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ContentsGroup Financial Highlights 1Board of Directors - Profile 2-3Chairman’s Message 4-5Managing Director’s Review of the Operations 6-7Report of the Directors’ on the Affairs of the Company 8-11Report of The Audit Committee 12Report of the Remuneration Committee 13Product Portfolio 14-15Our Values 16New Initiatives 17Risk Management 18-19Corporate Governance 20-22Statement of Directors’ Responsibilities 23
Financial StatementsIndependent Auditors’ Report 26Consolidated Statement of Comprehensive Income 27Consolidated Statement of Financial Position 28Consolidated Statement of Changes In Equity 29-30Cash Flow Statement 31-32Notes to the Financial Statements 33-62
Supplementary Information Ten Year Summary 63Notice of Meeting 64Form of Proxy EnclosedCorporate Information Inner Back Cover
1Sierra Cables PLC • Annual Report 2013/14
Group Financial Highlights
For the year ended 31st March 2014 2013Rs. Rs.
Result for the Year
Revenue 2,284,934,549 2,141,353,995
Loss Before Tax (376,269,221) (20,005,638)
Loss After Tax (306,478,634) (24,561,745)
Position at the year End
Shareholders Funds 1,367,085,768 1,674,149,443
Total Assets 3,017,925,825 3,415,142,210
ROCE (13%) 7%
Current Ratio 1.24 : 1 1.54 : 1
Issued & Fully paid No. of Shares 537,512,430 537,512,430
Information Per Share (Rs.)
Earnings/(Loss) (0.54) (0.02)
Net Assets 2.52 3.08
Share Price
Lowest 1.60 2.00
Highest 2.70 3.70
Last Transaction 2.20 2.20
2Sierra Cables PLC • Annual Report 2013/14
Board of Directors - Profile
W.A.P. PereraChairman
Mr. W.A.P. Perera is a founder Director of
Sierra Construction (Private) Limited and
serves as the Chairman of Sierra Cables
PLC. He has over 34 years experience in
the construction industry.
D.S. PandithaManaging Director/CEO
Mr. D.S. Panditha is the Managing Director
and Chief Executive Officer of Sierra Cables
PLC. He is a member of both the Institute
of Incorporated Engineers and the Institute
of Marketing (SL). He has over 37 years
of experience in the cable and plastic
industry.
G.S.M. IrugalbandaraMs. G.S.M. Irugalbandara was the Director
of Alucop Cables for last five years. She
has an MBA from the University of South
Queensland. She has been attached to
KPMG as a Tax Manager prior to joining
Alucop Cables. She now serves as an
Executive Director at Sierra Cables PLC.
D.N.N. LokugeMr. D.N.N. Lokuge is a founder Director of
Sierra Construction (Private) Limited with
34 years experience in the construction
industry.
J.H.P. RatnayekeMr. J.H.P. Ratnayeke is a Senior Corporate
Lawyer who is also the precedent partner
of Paul Ratnayeke Associates, a leading
firm in Sri Lanka which he founded in 1987
handling all areas of law and International
Legal Consultancy work. Mr. Ratnayeke is
a Solicitor of England and Wales and an
Attorney-at-Law of the Supreme Court
of Sri Lanka. He has been awarded a
Masters Degree in Law by the University
of London. Currently, Mr. Ratnayeke holds
directorships in 62 Companies of which 08
are Public Quoted Companies.
He has also been elected/appointed as
Chairman/Deputy Chairman to several of
these companies. He is also Chairman of
P.R. Secretarial Services (Pvt) Ltd.
E.A.D.T.B. PereraMr. E.A.D.T.B. Perera is a founder Director
of Sierra Construction (Private) Limited with
34 years experience in the construction
industry.
Dr. D.G.K.E. WeerapperumaDr. Kamal Weerapperuma is currently
the Managing Director of PE Consultancy
Services Ltd. and serves as Independent
Director of ACL Plastics, Plastishells
Limited, Arpico Plastics Limited, Arpico
Flexifoam (Pvt) Limited and RPC Polymers
(Pvt) Limited. He held positions of CEO/
Director of Delmege Forsyth Group,
Kelani Cables Ltd., Central Industries
Ltd., Executive Director, Haycarb Ltd. and
Research Fellow in Chemical Engineering,
Imperial College, University of London.
Dr. Weerapperuma served as consultant
to several Industries and Banks. Further,
he served on the Prime Ministers advisory
Committee on Power and Energy, and on
several public sector committees including
those in the Ministries of Science and
Technology, and in the Ministry of Industry.
He currently serves as an examiner/
scrutineer for Chartered Engineer (UK)
and Fellowship reviews of the Institute of
Materials, Mining, and Minerals (UK). In
addition, he serves on the Ethics review
committee of the Sri Lanka Medical
Association.
He holds a B.Sc. Degree from University
of Ceylon, M.Sc. and Ph.D. Degrees from
the UK. He is a Chartered Engineer (UK), a
Fellow of the Institute of Materials, Mining,
and Minerals (UK), and an Alumnus of
“Insead”, France.
3Sierra Cables PLC • Annual Report 2013/14
Prof. A.K.W. JayawardaneProf. Jayawardane is the Vice-Chancellor
and Professor in Civil Engineering,
University of Moratuwa. He is an
academic, a researcher and consultant
with experience and expertise in teaching,
research and consultancy in the broad
areas of construction management,
project management and technology
management. He is having a BSc. Eng.in
Civil Engineering with first class honours,
University of Moratuwa and MSc. in
Construction, University of Technology,
United Kingdom. He is also a fellow
member of the Institution of Engineers
and founder member of the Society of
Structural Engineers and Institute of
Project Managers in Sri Lanka.
B.W.N. RupasingheMr. B.W.N. Rupasinghe holds a B.Sc. Degree
in Electrical & Electronics from University
of Peradeniya. Further has a M.Sc. Degree
in Electrical Power Transmission and
Distribution from Manchester Institute of
Science and Technology, UK with a MA.
Degree in Economics. He was the former
General Manager of Central Engineering
and Consultancy Bureau.
P.R. SaldinMr. Rimoe Saldin is a Fellow of the Institute
of Chartered Accountants of Sri Lanka. He
is also a Fellow of the Chartered Institute
of Management Accountants in the United
Kingdom and a Certified Management
Accountant, Australia. He is an Alumni of
the Asian Institute of Management, Manila.
He has over 21 years of experience at top
management level in the areas of Finance,
Human Resource Development, General
Management and Operations. Presently,
Mr. Saldin serves as the Group Chief
Operating Officer of the Browns Group of
Companies and Director/Chief Executive
Officer of Browns Investments PLC. He
also serves on the Board of Directors of a
number of listed and unlisted Companies.
He was previously, the Country Controller
for Royal Dutch Shell in Sri Lanka and
Finance Director of Shell Gas Lanka Ltd.
and Shell Terminal Lanka Ltd. Mr. Saldin,
also served as Group Finance Director and
Commercial Director of CIC Holdings PLC.
He also served on the Board of Directors of
number of listed and unlisted Companies
in the CIC Group.
Board of Directors - Profile
4Sierra Cables PLC • Annual Report 2013/14
It gives me much pleasure to present to
you the Annual Report of the Company
and its Subsidiaries for the year ended
31st March 2014 and welcome you warmly
to the eleventh Annual General Meeting of
Sierra Cables PLC.
A Resilient EconomyThe state of the economy during the year
under review was indeed heartening.
GDP growth that had slowed in 2012
rebounded strongly to record 7.3% in
2013, compared to 6.3% in 2012, driven
mainly by the services sector that grew at a
robust 6.4% compared to 4.6% a year ago.
The industry sector expanded by 9.9%,
albeit somewhat slower than the previous
year due to slower growth in mining,
quarrying and construction. This sector
nonetheless continued to be the key driver
underpinning national economic growth.
It is noteworthy that per capita income
crossed the US$ 3,000 threshold this year.
Inflation meanwhile, trended downward,
averaging 6.9% in 2013 compared with
7.6% in 2012 and was contained at single
digits for the fifth successive year.
Export earnings picked up to 6.4% in
2013 in comparison with a contraction
of 7.4% last year, buoyed by improved
demand for garments and tea from major
export destinations. Import expenditure
contracted by 6.2% in 2013, mainly due to
lower fuel imports, the policies introduced
to rationalize imports and subdued
international commodity prices. Workers’
remittances meanwhile expanded by 13%
to reach US $6.8 billion in 2013. The trade
deficit narrowed by 19.2% to US$ 7,609
million in 2013 from US$ 9,417 million
in 2012. Moderate inflation and policies
to propel credit growth led to a softened
monetary stance that, together with the
excess rupee liquidity in the market,
provided the impetus for market interest
rates to tumble, as evidenced by the
AWPLR that declined sharply from 14.40%
in 2012 to 8.57% by end March 2014.
Post-conflict GDP growth has been
underpinned by strong growth in the
construction subsector that raised its share
of GDP from 6.6% in 2009 to 8.7% by 2013.
The construction subsector will continue
to drive growth in the future, given the
government’s commitment towards post-
conflict reconstruction, national integration
and infrastructure development. High
tourist arrivals that reached 1.27 million in
2013, a rise of 26.7%, signify the continuing
tourism boom and the healthy prospects
for tourism related infrastructure
development, including large hotels
and restaurants. We are hopeful that
opportunities associated with such large-
scale infrastructure development projects
will offer scope for own product range.
Operating ResultsDuring the year under review the Company
revenue grew by about 4% from Rs 2.05
billion a year ago to Rs 2.13 billion this
year, while Group revenue grew by 6.71%
from Rs 2.14 billion last year to Rs 2.28
billion this year. In tandem, our Company
gross profit rose by 1.41% this year, while
the Group gross profit rose by 4.06% this
year. In contrast however, the Company
reported a post-tax loss of Rs 270.0 million
this year, compared to a profit of Rs 15.1
million last year, while Group post-tax
losses increased from Rs 24.5 million in
2013 to Rs 306.4 million this year.
Operational performance this year was
undermined pursuant to the identification
of certain unrecorded transactions as well
as discrepancies between the physical
stock of inventory and recorded balances,
in relation to both prior and current
year. These unrecorded transactions and
discrepancies were quantified following a
report from the auditors. The current year’s
financial statements now incorporate
the unrecorded revenue, expenses
and assets, while a part of the value of
inventories and finished goods were
written-off. These adjustments triggered
“I am happy report that
we have in hand, a
major order surpassing Rs.1 billion,
which will contribute
significantly to our
growth plans”
Chairman’s Message
5Sierra Cables PLC • Annual Report 2013/14
a considerable negative impact on the
current year’s reported results. Relevant
disclosures were made by the Company
to the Colombo Stock Exchange on 13th
May 2014, 2nd June 2014, 11th June 2014
and 11th July 2014, while the Company
has in the meantime, initiated action to
rectify and prevent such occurrences in
the future.
Of the two associate companies, T & G
Lanka (Pvt.) Limited, reported a profit of Rs
0.36 million in 2014 compared to a loss of
Rs. 5 million in 2013, while Tea Leaf Resort
Holdings (Pvt) Limited reported a loss of Rs
0.71 million this year compared to a loss
of Rs 0.05 million in 2013. Tea Leaf Resort
Holdings (Pvt) Limited is presently awaiting
approval from relevant authorities to
commence operations.
Of the two subsidiary companies, Sierra
Industries (Pvt.) Limited, the company
engaged in the manufacture of PVC pipes,
commenced commercial operations in
2012. However its operational results have
been hindered due to a delay in receiving
anticipated commercial orders for water
supply schemes from within the Group,
lower-than-forecast margins and the delay
in obtaining SLS standards for fittings.
Several measures were implemented to
arrest losses, including strengthening
the sales team and the debt collection
process. Sierra Power (Pvt.) Ltd, focused on
mini-hydro projects has commenced civil
construction work.
A Glimpse into the Year AheadWhilst our inherent strengths and
resilience enabled us to surmount
challenges, the disquieting occurrence
this year has strengthened our resolve
to fortify our internal control systems,
an aspect we have undertaken without
delay. Measures have been introduced to
tighten and improve internal processes as
well as our computerized systems so as to
augment our risk management framework.
Our Audit Committee closely reviews the
progress of the on-going investigation and
the implementation of remedial action.
Our approach to governance remains
focused on driving ethical values across
the organization.
I am happy report that we have in hand, a
major order surpassing Rs.1 billion, which
will contribute significantly to our growth
plans. The ensuing year will probably pose
its own share of challenges. Nonetheless,
the improved prognosis for infrastructure
development and national development
offers considerable business opportunities
for our diverse business segments. The
country’s growth plans to reach per capita
income of US$ 4,000 by 2015 and a US$
100 billion economy by 2016 is expected
to propel demand for reliable and efficient
power and communication cables and
wires in our market segments.
We remain mindful of our objective of
enhancing shareholder wealth and will
relentlessly pursue strategies to operate
as a strong, profitable, sustainable
organization.
AppreciationsAs always, I am sincerely grateful to
my fellow Directors for their invaluable
contribution, cooperation and guidance.
My deep appreciation is due to our
Managing Director and our team for their
dedicated, relentless efforts during a
turbulent year. Our bankers, customers
and business partners are always an
important part of our journey and I extend
my sincere thanks for their valuable
support and strong relationship with our
Company.
May I also take this opportunity to thank
our shareholders most sincerely, for their
understanding and steadfast support in
the midst of difficulties encountered this
year. I assure you of our continued passion
and commitment to take this Company to
greater heights.
Priyantha Perera Chairman
Colombo
22nd August, 2014
Chairman’s Message
6Sierra Cables PLC • Annual Report 2013/14
Cable and wire form the mainstay of
the construction industry, the essential
conduits in the provision of power and
communication. In 2013 the construction
subsector grew by 14.4% compared to a
21.6% growth in 2012. Building material
imports rose by 11.9% in 2013. Credit
granted by banks to the private sector
for construction activities increased by
16.6%, while credit granted for housing
development grew by 9.1%, reflecting
private sector participation in the
construction of hotels, condominiums and
housing units. Rising raw material costs,
however, brought about an increase in the
cost of construction, which rose by 7.2% in
2013.
Nevertheless, the PVC cable industry has
been beleaguered with over capacity, as
manufacturers were prone to enhance
capacity given the high anticipation of
post-conflict demand, which lamentably,
has as yet, failed to materialize. Against
this backdrop, we have been extremely
cautious to avoid the pitfalls associated
with lowering selling prices, as sometimes
witnessed in the market as the industry
grapples with intense competition, over-
capacity and low profitability.
The Year in FocusOur performance this year is a mixed
reflection of external challenges, internal
achievements and an unexpected setback.
Top line growth was evidenced as the
revenue of the Company improved from
Rs 2.05 billion last year to Rs 2.13 billion
this year, reflecting an increase of 4%.
Group revenue rose by 6.7% from Rs 2.14
billion to Rs 2.28 billion this year. Growth
in turnover was largely attributable to the
expansion in overseas markets as reflected
in export sales which grew by 129.4% from
Rs 6.6 million last year to Rs 15.1 million
this year.
0
500
1000
1500
2000
2500
20142013201220112010
Rs. Mn
REVENUE
The Company benefited from falling raw
material prices, in particular copper LME
prices that declined from an average US$/
PMT 7,951 a year ago to US$/PMT 7,326
this year. A stable exchange rate that
prevailed over much of 2013, with the
rupee depreciating by just 2.75% against
the dollar, from Rs/US$ 127.16 in 2012
to Rs/US$ 130.75 in 2013, which further
boosted corporate performance.
The above gains are reflected in the Gross
Profit of the Company, which rose by
1.41% from Rs 298.8 million a year ago
to Rs 303.0 million this year, while Gross
profit of the Group increased by 4.06%
from Rs 305.0 million last year to Rs 317.4
million this year.
In tandem with the benign interest rate
regime fostered by the Central Bank of
Sri Lanka in order to accelerate credit
growth in the country, finance costs of the
Company at Rs 145.9 million reflected a
decline of 9.9% over the finance costs of Rs
161.9 million reported a year ago. Group
finance costs declined by 6.2% to Rs 176.0
million this year against Rs 187.7 million
last year.
Our plans for profitability, however, was
impeded and the operational results
we post this year have been skewed by
the inclusion in the financial statements
of certain adjustments relating to prior
years and current year, which have been
discussed by the Chairman in his message
to shareholders. These adjustments
were made consequent to identifying
and incorporating in this year’s financial
statements, certain transactions with
regard to revenue, other income, expenses
and assets that were not recorded in
the general ledger and in the financial
statements of the Company during prior
years and current year.
The Company’s current year’s financial
statements therefore incorporate
adjustments pertaining to revenue,
expenses and assets unrecorded in prior
years amounting to Rs 113 million and
write down of inventory and finished
goods amounting to Rs 220 million, which
together with the impairment provisions
made by the Company in respect of trade
and other receivables and investment
in subsidiaries aggregating Rs 53 million
have exerted downward pressure on the
bottom-line. As a result the Company
reported a post-tax loss of Rs.270.0 million
this year compared to a profit of Rs.15.1
million a year ago, while Group post-
tax losses increased to Rs.306.4 million
compared to a loss of Rs.24.5 million last
year.
During the year under review, the company
disposed one of the two apartments it
owns in Fairfield Residencies, situated in
Colombo 8, at a price of Rs.15 million.
Managing Director’s Review of the Operations
7Sierra Cables PLC • Annual Report 2013/14
New Product OfferingWith the country on a growth trajectory,
there is much anticipation for tourist
arrivals and growth in local per capita
income. Increased demand is anticipated
in the construction of hotels, diners and
cafeterias, housing, apartment complexes
and high rise buildings. Given the increased
awareness of public safety measures,
greater focus is directed at installing
materials that are non-hazardous to the
public in case of fire.
As part of our product innovation, we
ventured into the manufacture and
marketing of our latest product offering,
the Low Smoke Halogen Free (LSHF) Cable,
during this year. These cables reduce the
amount of toxic and corrosive gas emitted
during combustion through special
features pertaining to halogen content, low
smoke density and flame propagation that
ensures safety during fire.
We will shortly supplement our portfolio
of wire and cables by developing and
marketing fire resistant cables. Customers
of this product will benefit from flexibility,
resistance to high temperatures and
combustion, with low smoke and toxic gas
emission.
Plans for Subsidiary CompaniesThe Company made investments in Sierra
Industries (Pvt) Ltd and Sierra Power
(Pvt) Ltd with the objective of broad-
basing revenue sources, given the high
competition and diminishing margins
associated with traditional wires and
cables. These investments however,
involve longer gestation period due to the
very nature of operations.
Sales of PVC pipes the main product of
Sierra Industries Ltd were constrained
during the year under review by a delay
in obtaining certification for fittings. Pipes
and fittings are usually sold together. We
were awarded SLS 659 for uPVC Fittings
in May 2014 and ISO 9001:2008 Quality
management system certificate for fittings
in June 2014, as a result of which, we are
now geared to penetrate the market and
achieve the required target.
Sierra Power (Pvt.) Ltd on the other has
received required approvals and we have
commenced civil construction works.
Head Race Channel has been initiated
and almost 90% of the weir construction
has been completed. Meantime, the
addendum for SPPA was signed in March
2014 with a new tariff structure which will
yield greater benefit for the subsidiary.
Promising OutlookThe country is placed on the threshold of
economic prosperity. We are encouraged
that the government is not only focused
on mega-scale infrastructure projects but
also on housing and building construction,
essential market segments for our
company.
Our critical focus rests on operating a
viable, thriving business model, towards
which end we have reinforced our internal
control measures and reviewed and
strengthened processes and reporting
mechanisms including information
technology. We are poised to enter a year
of growth, given several orders in hand.
Managing Director’s Review of the Operations
AppreciationsBefore concluding I would like to express
my sincere thanks to my Chairman and
members of the Board for their guidance
and support. Our staff, as always, rallied
around to deliver their best in a difficult
year and I thank them warmly for their
resilience. My grateful thanks to our
customers and suppliers for their loyal
patronage and trust and to all our other
stakeholders whose relationships we truly
treasure.
D. Shamendra PandithaManaging Director
Colombo
22nd August, 2014
8Sierra Cables PLC • Annual Report 2013/14
The Board of Directors of Sierra Cables PLC
are pleased to present their Report on the
affairs of the Company together with the
Audited Financial Statements for the year
ended 31st March 2014.
Principal ActivitiesThe principal activities of the Company are
the manufacturing and sale of cables, wires
and conductors primarily for electrification
and telecommunication purposes. Of the
two subsidiaries, Sierra Power (Private) Ltd.
has commenced civil construction work to
engage in power generation to the national
grid, while Sierra Industries (Private) Ltd.
is engaged in the manufacturing of uPVC
pipes and fittings. The two associate
companies T & G Lanka (Private) Ltd. and
Tea Leaf Resort (Private) Ltd. are diversified
into manufacturing of Patch Cables and
the Leisure Sector, respectively.
Review of OperationsA review of the Company’s business and
its performance during the financial year
is contained in the Chairman’s Message
on pages 4, 5 and in the Managing
Director’s Report on pages 6 & 7 of this
Annual Report. Together with the Financial
Statements, these reports reflect the state
of affairs of the Company.
RevenueThe revenue of the Group for the year
amounted to Rs 2,284.93 million compared
to Rs 2,141.35 million in 2012/13.
Results and AppropriationsThe Group made a Loss before Taxation
of Rs 376.26 million compared to a Loss
before Taxation of Rs 20.00 million in
2012/13. The detailed results are given in
the Statement of Comprehensive Income
on page 27.
Financial StatementsThe Financial Statements of the Company
are given on pages 27 to 62.
Significant Accounting PoliciesThe significant accounting policies
adopted in the preparation of the financial
statements are given on pages 33 to 39
Changes in accounting policies made
during the accounting period is described
under Note 2.5 to the Financial Statements.
Auditors’ ReportThe Independent Auditors Report on the
Financial Statements is given on page 26.
Group Company
2014 2013 2014 2013For the year ended 31st March Rs. Rs. Rs. Rs.
Revenue 2,284,934,549 2,141,353,995 2,137,572,003 2,055,318,338
Cost of Sales (1,967,488,040) (1,836,300,771) (1,834,518,102) (1,756,473,539)
Gross Profit 317,446,509 305,053,224 303,053,901 298,844,799
Other Income 39,705,634 6,137,840 39,705,634 6,137,840
Selling and Distribution Expenses (146,149,660) (103,030,304) (145,212,139) (88,436,991)
Administrative Expenses (146,979,750) (67,271,954) (141,289,774) (64,211,117)
Other Operating Expenses (272,616,893) (2,515,236) (272,616,894) (2,515,236)
Profit/(Loss) from Operations (208,594,160) 138,373,570 (216,359,272) 149,819,295
Net Finance Costs (167,578,713) (158,354,069) (137,248,148) (132,932,082)
Profit/(Loss) Before Associate Companies’ Share of Loss
(376,172,873) (19,980,499) (353,607,420) 16,887,213
Share of Loss of associate companies (96,348) (25,139) - -
Profit/(Loss) Before Taxation (376,269,221) (20,005,638) (353,607,420) 16,887,213
Income Tax Expense 69,790,587 (4,556,107) 83,541,215 (1,740,666)
Profit/(Loss) for the year (306,478,634) (24,561,745) (270,066,205) 15,146,547
Other Comprehensive Income/(Expense)
Net change in fair value of available-for-sale Investments (7,272,588) (9,853,492) (7,272,588) (9,853,492)
Revaluation surplus on Property Plant and Equipment - 430,075,011 - 430,075,011
Deferred Tax Impact on Revaluation surplus on Property, Plant and Equipment - (97,136,079) - (97,136,079)
Actuarial Gain/(Loss) on Defined Benefit Obligation Net of Tax (2,312,453) 1,380,312 (2,114,672) 1,380,312
Other Comprehensive Income/(Expense) for the Year, Net of Income Tax (9,585,041) 324,465,752 (9,387,260) 324,465,752
Total Comprehensive Income/(Expense) for the year (316,063,675) 299,904,007 (279,453,465) 339,612,299
Profit/(Loss) Attributable to:
Owners of the Company (290,881,814) (12,693,539) (270,066,205) 15,146,547
Non - Controlling Interests (15,596,820) (11,868,206) - -
(306,478,634) (24,561,745) (270,066,205) 15,146,547
Total Comprehensive Income/(Expense) attributable to:
Owners of the Company (300,400,357) 311,772,213 (279,453,465) 339,612,299
Non-Controlling Interests (15,663,318) (11,868,206) - -
(316,063,675) 299,904,007 (279,453,465) 339,612,299
Basic Earnings/(Loss) Per Share (0.54) (0.02) (0.50) 0.03
Report of the Directors’ on the Affairs of the Company
9Sierra Cables PLC • Annual Report 2013/14
Corporate DonationsNo donations were made by the Company
during the year under review.
Property Plant & EquipmentDetails of the Property, Plant and
Equipment of the Company and the
Group is set out in Note 11 to the Financial
Statements on pages 44, 45 & 46. Extents,
locations and valuations of the properties
of the Group are given in Note 11.3 to the
Financial Statements on page 46.
InvestmentsDetails of Investments held by the
Company are disclosed in Notes 14 to16
the Financial Statements on pages 47 & 48.
Stated CapitalThe stated capital of the Company as at
31st March 2014 was Rs.894.56 million
and is represented by 537,512,430 issued
and fully paid Ordinary Shares. There was
no change in the stated capital during the
year.
ReservesThe Group’s retained earnings and other
reserves as at 31st March 2014 amounted
to Rs 461 million. Movement of the
reserves are given in the Statement of
Changes in Equity on pages 29 & 30 of the
Financial Statements.
DirectorateThe names of the Directors who held office
during the financial year and who are
currently in office are listed below. Brief
profiles of the directors are given on pages
2 & 3.
Mr. W.A.P. PereraChairmanNon-Executive Director
Mr. D.N.N. LokugeNon-Executive Director and Alternate Director to D.S. Panditha
Mr. E.A.D.T.B. PereraNon-Executive Director
Mr. D.S. PandithaExecutive Director
Mr. J.H.P. RatnayekeNon-Executive Independent Director
No of Shares
As at 31.03.2014 As at 31.03.2013
Mr. W.A.P Perera 3,920,510 3,920,510
Mr. D.S.Panditha 17,022,950 17,022,050
Mr. E.A.D.T.B Perera 10 10
Ms. G.S.M. Irugalbandara 1,709,800 1,709,800
Mr. D.N.N. Lokuge 100,010 10
Mr. J.H.P.Ratnayeke Nil Nil
Dr. D.G.K.E.Weerapperuma Nil Nil
Mr. P.R. Saldin Nil Nil
Prof. A.K.W. Jayawardane Nil Nil
Mr. F.A.W. Irugalbandara (Alternate Director) 200,010 200,010
Ms. K.A. Suraweera (Alternate Director) Nil Nil
Eng. B.W.N. Rupasinghe Nil Nil
Dr. D.G.K.E. WeerapperumaNon-Executive Independent Director
Ms. G.S.M. IrugalbandaraExecutive Director
Eng. B.W.N. RupasingheNon-Executive Independent Director
Prof. A.K.W. JayawardaneNon-Executive Independent Director
Mr. P.R. SaldinNon-Executive Director
Mr. F.A.W. IrugalbandaraAlternate Director to W.A.P. Perera
Ms. K.A. SuraweeraAlternate Director to E.A.D.T.B. Perera
Retirement by RotationMr. W.A.P. Perera, Mr. D.N.N. Lokuge
and Mr. J.H.P. Ratnayeke will retire at
the Annual General Meeting in terms of
Article 91 of the Articles of Association and
being eligible, will offer themselves for
re-election.
Directors’ Interest RegisterThe Company maintains an Interest
Register in terms of the Companies Act
No. 7 of 2007. The Directors have made
declarations and disclosed their interests to
the Board and those interests are recorded
in the interests register as provided for in
Section 192(2) of the Companies Act No. 7
of 2007.
Directors’ Remuneration and Other BenefitsDirectors’ remuneration in respect of the
Company for the financial year 2013/14 is
given in Note 7 to the Financial Statements
on page 40.
Corporate GovernanceThe Directors confirm that the Company is
in compliance with the rules on Corporate
Governance contained in the Listing Rules
of the Colombo Stock Exchange. Corporate
governance practices adopted by the
Company in respect of the management of
the Company is given on pages 20 to 22.
Board Sub CommitteesThe Board has appointed Board Sub-
Committees to assist the Board to ensure
oversight and control over specific affairs
of the Company.
Audit Committee comprises of
Dr. D.G.K.E. Weerapperuma(Chairman)
Prof. A.K.W. Jayawardane
Mr. P.R. Saldin
Eng. B.W.N. Rupasinghe
Remuneration Committee comprises of
Dr. D.G.K.E. Weerapperuma(Chairman)
Prof. A.K.W. Jayawardane
Eng. B.W.N. Rupasinghe
Report of the Directors’ on the Affairs of the Company
10Sierra Cables PLC • Annual Report 2013/14
AuditorsThe Financial Statements of the Company
for the year have been audited by KPMG,
Chartered Accountants, the retiring
auditors, who have expressed their
willingness to continue as auditors of the
Company and who are recommended
by the directors for re-appointment. A
resolution relating to their re-appointment
and authorizing the Directors to determine
their remuneration will be proposed at the
forthcoming Annual General Meeting.
The Auditors, KPMG, were paid
Rs.700,000/- (2012/2013 - Rs.630,000/-) as
Audit Fees by the Company. In addition,
they were paid Rs.327,794/- (2012/2013 –
Rs.383,853/-) by the Company for audit
related services.
As far as the Directors are aware the
Auditors do not have any relationship
(other than that of an Auditor) with the
Company other than those disclosed
above. The Auditors do not have any
interest in the Company.
Shareholding and Share InformationThe Company had 23,783 registered
shareholders as at 31st March 2014. The
distribution and analysis of shareholding,
the holding of the 20 largest shareholders,
Directors and Chief Executive Officer’s
shareholding, public holding percentage
as well as information relating to earnings,
net assets per share and share trading is
given on pages 1, 9, 10 & 11.
List of Directors of Subsidiaries and Associate Companies
SubsidiariesSierra Power (Private) Ltd.
Mr. W.A.P.Perera
Mr. D.S. Panditha
Ms. G. S. M. Irugalbandara
Prof. A. Senaratne
Sierra Industries (Private) Ltd.
Dr. D.G.K.E. Weerapperuma (Chairman)
Mr. W.A.P.Perera
Mr. D. S. Panditha
Associate CompaniesT & G Lanka (Private) Ltd.
Mr. O. M. Grimsgaard
Mr. M. Grimsgaard
Mr. D. S. Panditha
Mr. A. D.M.M.L.S.Madappulli
Tea Leaf Resort (Private) Ltd
Mr. W. A. P.Perera
Mr. G.A.Aloysius
Mr. D.S.Panditha
Mr. D.S.K.Amarasekara
Mr. J.M.S.De Mel
Mr. N.M.Prakash
Mr. G. J Alosius
Statutory PaymentsThe Directors, to the best of their knowledge
and belief, are satisfied that all statutory
payments due to relevant authorities have
been made by the Company.
Events Occurring after the Reporting DateNo circumstances have arisen since the
reporting date, which require adjustments
to or disclosure in the accounts.
Capital CommitmentsThere were no material capital
commitments as at the reporting date.
Contingent LiabilitiesThere were no material contingent
liabilities as at the reporting date which
require adjustments to or disclosure in the
Financial Statements.
Going ConcernThe Directors having made an assessment
of the Company’s operating conditions,
financial position, risks and future
prospects, have a reasonable expectation
that the Company has adequate resources
to continue its operations as a going
concern in the foreseeable future.
RESIDENT NON -RESIDENT
Number ofShareholders No of Shares (%) Number of
Shareholders No. of Shares (%)
1 - 1000 14,972 13,939,959 2.59 9 6,400 0.00
1001 - 10,000 7,418 18,177,614 3.38 17 89,800 0.02
10,001 - 100,000 1,134 36,048,676 6.71 16 715,054 0.13
100,001 - 1000,000 189 51,921,867 9.66 4 2,400,000 0.45
Over - 1,000,000 23 410,613,060 76.39 1 3,600,000 0.67
Total 23,736 530,701,176 98.73 47 68,11,254 1.27
Analysis of Shareholders
Number ofShareholders No. of Shares (%)
Resident 23,736 530,701,176 98.73
Non-Resident 47 6,811,254 1.27
Total 23,783 537,512,430 100.00
Analysis of Shareholders
Number ofShareholders No. of Shares (%)
Individual 23,446 143,990,321 26.79
Institutional 337 393,522,109 73.21
Total 23,783 537,512,430 100.00
Report of the Directors’ on the Affairs of the Company
11Sierra Cables PLC • Annual Report 2013/14
Name of Shareholder No. of Shares31-03-2014
% ofIssued Capital
No. of Shares31-03-2013
% ofIssued Capital
1 Sierra Holdings (Private) Limited 312,335,490 58.11 312,335,490 58.11
2 Browns Investments PLC 32,210,943 5.99 32,210,943 5.99
3 Mr. Daya Shamendra Panditha 17,022,950 3.17 17,022,950 3.17
4 Employees’ Provident Fund 8,113,032 1.51 8,113,032 1.51
5 Seylan Bank PLC 5,495,149 1.02 7,585,000 1.41
6 Mr. Abeyratna Banda Sarath Herath 5,000,000 0.93 5,000,000 0.93
7 Mr. Wahalathanthrige Anil Priyantha Perera 3,920,510 0.73 3,920,510 0.73
8 Mr. Tranz Dominion, L.L.C 3,600,000 0.67 3,500,000 0.65
9 Mr. Wickramasinghe Arachchige Kassapa Dewamitta Saparamadu 3,488,000 0.65 3,488,000 0.65
10 Nuwara Eliya Property Developers (Private) Limited 2,767,200 0.51 2,841,000 0.53
11 Mr. Munidasa Ilamperuma 2,150,000 0.40 2,050,000 0.38
12 Nexus Nubart Holdings (Private) Limited 2,000,000 0.37 2,000,000 0.37
13 Seylan Bank PLC/Arc Capital (Private) Limited 1,905,549 0.35 - -
14 Mr. Bathiya Chandana Ranaweera 1,800,000 0.33 1,800,000 0.33
15 Ms. Genevive Sujivie Madhuni Irugalbandara 1,709,800 0.32 1,709,800 0.32
16 Mr. Rajinda Goonewardene Seneviratne 1,423,600 0.26 1,423,600 0.26
17 Dr. Abdul Rahuman Mohamed 1,284,073 0.24 - -
18 Dee Sanda Holdings (Private) Limited 1,260,172 0.23 - -
19 Mrs. Kalanie Sandya Rangedara 1,248,000 0.23 - -
20 Seylan Bank PLC/Priyani Dharshini Ratnagopal 1,219,600 0.23 - -
Total 409,954,068 76.27 - -
SecretariesP.R. SECRETARIAL SERVICES (PRIVATE) LIMITEDColombo
Priyantha Perera D.S. PandithaDirector Director
22nd August, 2014
Report of the Directors’ on the Affairs of the Company
12Sierra Cables PLC • Annual Report 2013/14
Role of the CommitteeThe role of the Audit committee which
reports its findings to the Board, is to
ensure the integrity of the financial
reporting of the Company, internal and
external audit processes of the Company
and the maintenance of sound internal
control and risk management of the
Company and it’s compliance with legal
and regulatory requirements.
The Audit Committee, appointed by and
responsible to the Board of Directors,
comprises of 03 Independent Non-
Executive Directors and one Non-Executive
Director, during the said financial year
2013/14 Ms. G.S.M. Irugalbandara acted
as Secretary. All Non-Executive Directors
satisfy the criteria for independence as
specified in the Standards on Corporate
Governance for listed Companies issued
by the Securities & Exchange Commission
of Sri Lanka.
The members of the Audit Committee
are:-
Dr. Kamal Weerapperuma(Chairman) – Independent Non-Executive Director
Mr. P.R. SaldinNon-Executive Director
Mr. Nimal RupasingheIndependent Non-Executive Director
Prof. Ananda JayawardhenaIndependent Non-Executive Director
The Chief Executive Officer/Managing
Director, Finance Director and Group Chief
Financial Officer attend all meetings of the
Committee by invitation.
The Audit Committee meetings were held
five times during the year under review
and also met on four occasions after 31st
March 2014 up to 15th July 2014.
Duties and Responsibilities
Audit
1. Recommends to the Board of the
appointment and removal of external
auditors and review their terms of
engagement.
2. Determines with the external auditors,
the audit plan and scope and their
authority and responsibilities.
3. Oversees and appraises the quality of
audits conducted and monitors their
effectiveness.
4. Reviews external audit reports and
recommendations and ensures
appropriate management response to
recommendations.
5. Monitors the relationship between
management and the external
auditors.
6. Reviews and assesses the
independence of the external auditor.
Accounting1. Identifies and assesses areas of risks
which might impact on the company
and research appropriate mitigations.
2. Monitors and review the adequacy of
the company’s accounting system and
internal control environment.
3. Reviews the annual and quarterly
financial statements of the company,
and make recommendations to the
board.
4. Determines company - specific
accounting policies within the ambit of
the accounting standards.
5. Reviews significant transactions which
are not a normal part of the company’s
business.
Risk Management1. Monitors, reviews and evaluates the
adequacy and effectiveness of the
company’s risk management controls,
both internally and externally.
2. Evaluates the effectiveness of the
company’s business continuity plans.
3. Evaluates the adequacy of the
company’s insurance covers at least
annually.
The Audit Committee has recommended to
the Board of Directors that Messrs KPMG,
be appointed as Auditors for the financial
year ending 31st March, 2015 subject to
the approval of the shareholders at the
next annual general meeting.
As advised by the announcement of 12th
May 2014, the Board of Directors of Sierra
Cables PLC informed the Colombo Stock
Exchange that there had been significant
misstatements in the financial statements
of the Company in 2010/2011, 2011/2012,
2012/2013 and 2013/2014. The Board of
Directors then commissioned an inquiry by
Auditors to investigate the discrepancy and
also commissioned a forensic investigation
into the matter. The shareholders were
updated on the states of the matter
referred to above, by the Company’s
announcements to the Colombo Stock
Exchange dated 3rd June 2014, 11th June
2014 and 11th July 2014.
Based on the relevant reports and further
investigations carried out, the financial
statements of the company were prepared
and audit was completed. Steps have been
taken to tighten and improve the processes
and computerized systems within the
Company. The Audit Committee has been
reviewing the progress of the investigation
and remedial actions closely.
The required changes arising out of the
investigations were made in the financial
statements for the year ended 31st March
2014.
Dr. D.G.K.E. WeerapperumaChairman
Audit Committee
22nd August, 2014
Report of The Audit Committee
13Sierra Cables PLC • Annual Report 2013/14
The same Remuneration Committee
appointed for the year 2012/2013
continued to function for 2013/2014. The
Committee consists of three Non-Executive
Independent Directors as follows:
Dr. D.G.K.E. Weerapperuma(Chairman)
Prof. A.K.W. Jayawardane
Eng. B.W.N. Rupasinghe
The main function of the Remuneration
Committee during the year 2013/2014
was to provide policy advice with regard to
remuneration of Directors and Executive
Staff.
Dr. D.G.K.E. WeerapperumaChairman
Remuneration Committee
22nd August, 2014
Report of the Remuneration Committee
14Sierra Cables PLC • Annual Report 2013/14
Armoured Cables
Copper conductors insulated with PVC or XLPE, steel wire armoured
and PVC sheathed, with a voltage rating of 600/1000v. Utilised for the
distribution of electricity within factories and buildings, manufactured
to BS 6346 and BS 5467 standards.
LSHF (Low Smoke Halogen Free) Armourd Power Cables
LV cables with LSZH, thermosetting insulation which under exposure
of to fire generate low emission of smoke, fumes and toxic gasses
and zero halogens. Commonly use in places where there are lot of
environmental hazard including fire.
Earth Cables
Solid, stranded or flexible copper conductors with PVC insulation,
non sheathed with a voltage rating of 450/750v. Single-core Earth
conductors used as general-purpose cables manufactured to BS 6004
and SLS 733 standards.
Aerial Bundle Conductors
Aerial Bundle Conductors are self-supporting insulated cables used for low-
voltage electricity distribution. Comprise of three phase conductors (aluminium)
and a neutral conductor (alloy aluminium) bundled together with or without
street lamp wires. The neutral conductor also acts as a messenger or a load
bearer. Manufactured to National French standard NFC 33:209.
LSHF (Low Smoke Halogen Free) Unarmoured Power Cables
LV cables with LSZH, thermosetting insulation which under exposure of
to fire generate slow emission of smoke, fumes and toxic gasses and
zero halogens. The unarmoured cables often lay in places where there
are higher threats of fire.
Control Cables
Control Cables with copper conductors, with PVC insulation and sheathing or with PVC
insulation and sheathing and added steel wire armouring. Manufactured according to BS
6346 specifications with a voltage rating of 600/1000v, utilized for transmissions to control
units in industry, railways, traffic signals, thermal power and hydro power systems.
Flexible Cables
PVC insulated and sheathed flexible cables with a voltage rating of
300/300v and 300/500v, used as general-purpose cables. Manufactured
to BS 6500 and SLS 1143 standards.
Product Portfolio
15Sierra Cables PLC • Annual Report 2013/14
Aluminium Conductors (AAC & ACSR)
All Aluminium Conductors (AAC) and Aluminium Conductors Steel
Reinforced (ACSR), used for low, medium and high-voltage electricity
transmission and distribution. Manufactured to SLS 750, BS 215 (Parts I
& II) and ASTM standards.
Co-axial Cables
Annealed copper conductors with polyethylene insulated and copper
braided co-axial cables, used as television antenna wires. Manufactured
to JIS standards.
Single & Multi-Core Unarmoured Cables
Solid or stranded copper conductors with PVC insulation and sheathing,
with a voltage rating of 300/500v, 450/750v. Utilised for in-house wiring
distribution of electricity within buildings and factories. Manufactured
to BS 6004 and SLS 733 standards.
Telecommunication Cables
PVC insulated, self-supporting one-pair dropwire and polyethylene
insulated copper conductors used as telecommunication distribution
cables. Manufactured to BS 3573 and SLT standards.
Unarmoured Cables (Multi-Core)
Copper conductors insulated with PVC or XLPE and PVC sheathed, with
a voltage rating of 600/1000v. Utilised for the distribution of electricity
within factories and buildings, manufactured to BS 6346 and BS 5467
standards.
Auto Cables
All Copper Conductors PVC insulated single-core auto cables, used in
motor vehicles and also for general wiring.
Aluminium/PVC Cables
PVC insulated aluminum service main-wire with a voltage rating of
300/500v. Single-core, twin and flat-twin cables manufactured to BS
6004 and CEB specifications.
Product Portfolio
16Sierra Cables PLC • Annual Report 2013/14
As a responsible and ethical corporate citizen, Sierra Cables PLC carries out its business based on set of values, where each member of Sierra Cables family is committed to follow.
QualityWe are committed to produce highest quality products for our customers.
ServiceWe always strive for excellence in serving our customers and making sure that they are beyond the satisfactory level.
ProductivityAs a manufacturer, we always try to take the maximum output of resources without exploiting them.
IntegrityWe believe in truth, justice and fair play together with professionalism above everything.
PassionWe will embrace challenges with passion and aggressively pursue our goals to reach the pinnacle.
Our Values
17Sierra Cables PLC • Annual Report 2013/14
uPVC FittingsAs s part of the ongoing initiative strategy,
Sierra industries (Pvt) Ltd, a booming
subsidiary company of Sierra Cables,
started manufacturing uPVC fittings aiming
to increase market share of uPVC Pipes
since both products can be sold together.
Further, SLS 659 certificate was obtained in
May 2014.
Karapalagama Mini Hydro ProjectThe civil construction of the Mini Hydro Power Plant which is located
in Walapane, Nuwara Eliya District, has been commenced. Weir
construction along with 80% of work of access road to the Power House
and 10% of civil work of Head Race Channel has also been completed.
Since Company uses European origin machinery and aims to uplift the
livelihood of villagers in remote areas of Walapane, 1/3 of machinery
cost is to be received from Belgium Government as a grant.
New Initiatives
18Sierra Cables PLC • Annual Report 2013/14
The corporate world is inevitably
comprised with many risks.
They are the possibilities of failure that
can make or break an organization. The
extent to which we are exposed to risk
determines the extent of the return we get
compensated. High exposure to risk gives
high return for the company and vice versa.
However, this is only a general rule and
that is where the vitality of a competent
management is arisen for the purpose of
managing the risk at exceptional times.
Risk management is about identifying risks,
developing solutions to overcome them
and implementing strategies to reduce the
impact. It gives special consideration for
the experience possessed by the persons
involved since the relative importance
of a risk can be elaborated by highly
experienced persons.
The risk management of the company is
based on the level of risk appetite.
At Sierra Cables our appetite is neither low
nor high but moderate or more often above
the moderate level. This has enabled us to
accept the right level of risk suitable for the
company avoiding unnecessary risk that
could hinder the future of the company.
Therefore risk management is a smooth
process implemented by the company.
Sierra Cables Risk Management ProcessIt is required to identify possible risks in the
environment and in the company from time
to time. This will form a proactive mindset
in the company amongst its members at
any level. Thus the identification will involve
the contributions from all employees. The
top management that plays a main role in
the risk management will commence its
activities from this point onwards looking
at issues with a broader perspective.
The next step is to analyze the risks and
prioritize them accordingly. This is vital
when we operate in a highly volatile
environment as our resources need to be
ready at any given time for the purpose.
Mostly it is the top management that takes
the initiative at this point clearing the path
of the company for future objectives and
goals. However, in the planning stage the
middle level managers who are experts
in various fields take part to form a better
plan. Their ideas together with experience
will support to develop an action plan on
how to face the future risks and take the
action suitably.
The action taken for risks can be threefold.
They are acceptance, avoidance and
mitigation. The finalized action plan will
now be implemented concentrating on
taking any of the three actions specified
above. It is not easy to implement if the
planning has not been done well.
Similarly the implementation demonstrates
the quality of the previous stages of the
risk management process.
The final step is crucial if we are to reap
the benefits of risk management because
it guarantees the implementation taking
place according to the planned manner.
At the same time controlling and monitoring
stage also considers environmental
changes to ensure the actions taken are
complied according to the timely needs.
PLANNING
IMPLEMENTING
CONTROLLING &MONITORING
IDENTIFYINGRISKS
ANALYSING &PRIORITIESTHE RISKS
Risk
Man
agem
ent
Fram
ewor
k
Risk Management
19Sierra Cables PLC • Annual Report 2013/14
We have identified the below as key risks faced by the company.
Financial Risk
C Liquidity.
C Interest rates.
C Exchange rates.
C Credit collection.
C Main impact is on the working capital and
profitability where as the sustainability of
the company is affected.
C Monthly meetings with sales
Representatives to review on debt
collection. Positive relationships with
financial institutions in order to obtain
lucrative rates.
C A separate method to assess the potential
of customers in terms of their credit
worthiness.
C Agreeing for call options.
C Looking for supplier credit to mitigate
costly fluctuations in local interest rates.
Business Risk
C Market Risk. C Price changes can directly impact on the
profit.
C When setting prices it is possible to match
with raw material prices.
C Setting sales targets considering
company’s potential.
C Having a thorough idea on the trends in
the market.
Operational Risk
C Health & safety of employees.
C Changes in environmental, international
quality standards & regulatory
environment.
C Impact on employees personal and work
life.
C Future existence of the business.
C Employee performance evaluation
scheme.
C Good relationships with employees
through the activities of the employee
welfare society.
C Providing training on industrial safety.
C Obtaining the ISO 9001:2000 standard.
C Obtaining the ISO 14001 standard.
C Obtaining the OHSAS Certificate
Product Risk
C Customer satisfaction.
C Cost effectiveness.
C Decline in market share. C Maintaining SLS standard.
C Bidding with competitive prices.
C Proper testing to identify quality defects.
C Production planning on monthly basis.
Information Risk
C Timely & accurate information for
decision making.
C Systems operation & application.
C Lack of accurate and timely decision
making.
C Use of an ERP system for timely decision
making.
C Data backup procedure.
C Agreements with IT vendors for support
and maintenance.
C Regular upgrading of the systems.
Risk Management
20Sierra Cables PLC • Annual Report 2013/14
Sierra Cables is a company which is highly
concentrated on the corporate governance
aspect. Company is highly appreciates
and believes responsibilities and activities
of a good corporate citizen. Company
maintains a higher transparency in each
and every activity it undertakes with the
government and with the rest of the public.
From the day it was listed, the Board of
Directors understanding the importance of
governance took steps to adhere to various
guidelines. Specifically this includes the
guidelines issued by regulatory bodies and
legislation of the country such as institute
of Chartered Accountants of Sri Lanka,
Securities & Exchange Commission and the
Companies Act of 2007.
The acts of the board are transparent
and they are bounded by the directives
issued by the CSE, regarding governance
of companies. The board is appointed
annually by the shareholders and the
board seeks to achieve the objectives
of the company on behalf of them. Lack
of communication between the parties
can lead to problems. Such that this
concept was developed to ensure a good
relationship between the shareholders,
board of directors, the management and
other stakeholders. Also at all times the
board is obliged to act in the best interest
of the company and there by enhance the
shareholders’ wealth.
When the management takes part in
governance in a responsible way it will
provide a fundamental background for
sound decision making and performance
of the company. With this in mind
the board always strikes a balance
on the two dimensions, conformance
and performance. Otherwise lack of
concentration on either can yield a wrong
doing from both aspects. Therefore, we
believe that we have maintained the
right level of governance while achieving
the highest possible profit. Sierra Cables
corporate governance framework can be
demonstrated as follows.
The Board BalanceThe responsibility of the Board of Directors
is to operate the company by acting in a
manner that reflects the best interest of the
company. Ten Directors were appointed
as the Board of Directors. Out of the ten,
eight are Non-Executive Directors. Four
out of the eight Non-Executive Directors
are Independent Directors. All directors
are veterans in their fields such as
engineering, law, construction, marketing,
finance and public administration. Their
years of experiences are the reason for the
continual success of the company.
Despite the varying levels of shareholding
possessed by the directors, equality is a
major fact that is prevalent at all times in
the board. It is not compromised with the
dominance of one or group of directors
when decision making comes.
Chairman and Managing Director/ Chief Executive OfficerThe Board is lead by the Chairman who
is also a Non-Executive Director. The
Chairman’s leadership will take the
company to unattainable heights with
high strands of efficiency, effectiveness
and professionalism. In an ever changing
environment such a leadership is the
core on directing and controlling the
organization for better performance.
The MD/CEO on the other hand
handles a totally different set of duties
and responsibilities. The MD/CEO will
contemplate on improving the shareholder
value by formulating strategy, evaluating
its viability and implementing them to
reach for the desired purposes.
Board MeetingsBoard meetings are scheduled to be held
every two months. In these meetings
the board considers the performance
of the company from many angles.
The monthly financial performance,
selling and distribution, key projects,
investment opportunities, key risks faced,
appointments, etc. are some of the areas
thoroughly considered. This is also one
of the main controlling techniques of the
board.
Responsibilities of the BoardThe Board is responsible for
1. Enhancing shareholder wealth.
2. Planning and guiding the business
towards meeting the set objectives.
3. Ensuring the interests of all
stakeholders is considered in
corporate decisions.
4. Formulating, communicating, and
monitoring business policies, overall
strategies and corporate goals to
ensure sustained growth.
5. Assessing and approving the
implementation of management and
internal control systems.
6. Ensuring the compliance with all
statutory and other obligations being
met.
Audit CommitteeThe Audit Committee mainly looks at
legal and financial compliance of the
company. Both these areas will cover the
accounting practices, financial control, risk
management, etc. In order to look into
these matters responsibly the board has
appointed four Non-Executive Directors
out of which three are independent.
They are,
Dr. D.G.K.E. Weerapperuma(Chairman)
Prof. A.K.W. Jayawardane
Mr. P.R. Saldin
Eng. B.W.N. Rupasinghe
The Committee has met five times during
the year. The meetings are attended by
Executive Director, Chief Financial Officer
by invitation and other Directors and
Executives when required.
Corporate Governance
21Sierra Cables PLC • Annual Report 2013/14
Duties and ResponsibilitiesAudit
1. Recommend the Board of the
appointment and removal of external
auditors and review their terms of
engagement.
2. Determine with the external auditors,
the audit plan and scope and their
authority and responsibilities.
3. Oversee and appraise the quality of
audits conducted and monitor their
effectiveness.
4. Review external audit reports and
recommendations and ensure
appropriate management response to
recommendations.
5. Monitor the relationship between
management and the external
auditors.
6. Review and assess the independency
of the external auditor.
Accounting
1. Monitor and review the adequacy of
the company’s accounting system and
internal control environment.
2. Review the annual and quarterly
financial statements of the company,
and make recommendations to the
board.
3. Determine company - specific
accounting policies within the ambit of
the accounting standards.
4. Review significant transactions which
are not a normal part of the company’s
business.
Risk Management1. Identify and assess areas of risks which
might impact on the company and
research appropriate mitigations.
2. Monitor, review and evaluates the
adequacy and effectiveness of the
company’s risk management controls,
both internally and externally.
3. Evaluate the effectiveness of the
company’s business continuity plans.
4. Evaluate the adequacy of the
company’s insurance covers at least
annually.
The Audit Committee has recommended
to the Board of Directors that Messers.
KPMG, Chartered Accountants to
appointed as Auditors for the year ending
31st March, 2015 subject to the approval
of the shareholders at the next annual
general meeting.
Remuneration CommitteeThe Remuneration Committee looks
forward to attract and retain directors,
executives and employees for the
company. Also through the decisions of
Remuneration Committee it is expected to
obtain the highest level of contribution for
the achievement of goals and objectives of
the company. There by it expects to create
a good value for the shareholders.
The Sierra Cables PLCs Remuneration
Committee consists of three Non-Executive
Independent Directors as follows;
Dr. D.G.K.E. Weerapperuma(Chairman)
Prof. A.K.W. Jayawardane
Eng. B.W.N. Rupasinghe
The main responsibilities of the
Remuneration Committee is,
1. To review and approve Remuneration
policy of the Company.
2. To advice on structuring Remuneration
packages that enable the Company
to attract, retain and motivate high
calibre individuals with the requisite
skills.
3. To recommend to the Board of
Directors the Remuneration to be
paid to the Executive Directors,
Non-Executive Directors, their pre-
requisites and allowances.
Internal ControlThe Internal Control system encompasses
the financial, operational, risk
management, regulatory compliances of
the company. Maintaining effective control
is vital as it is the responsibility of the Board.
All the sectors have different controls
developed uniquely for themselves.
Their discipline, commitment will ensure
correct processes are maintained within
the company. The effectiveness of these
controls is reviewed regularly through the
Management Review Meeting and Board
Meetings. One of the main items heavily
discussed in every Management Review
Meeting is the Key Performance Indicators
(KPI). It summarizes the performance of
every department of the company on
a monthly basis.
Even though all these controls are in place
we cannot reject the fact that exceptions
can appear in an unexpected manner.
Therefore, either through preventive or
corrective actions such situations should
be managed. However, the ultimate
expectations thus will be to develop and
maintain accurate processes, information
and customer satisfaction. Simply this
will ensure maximization of shareholders’
wealth and the quality of company’s
performance.
BOARD OFDIRECTORS
SHAREHOLDERS
BOARDCOMMITTEES
(AUDIT &REMUNERATION)
AUDITORS
Appoint
Appoint
Appoint
Appoint
Report
TOPMANAGEMENT
MANAGINGDIRECTOR/CEO
Corp
orat
e G
over
nanc
e Fr
amew
ork
Corporate Governance
22Sierra Cables PLC • Annual Report 2013/14
Rule Board of Directors Status
7.10.1(a) to (c) Correct number of Non-Executive Directors. Complied
7.10.2(a) Correct number of independent Non-Executive Directors Complied
7.10.2(b) Specified whether the Non-Executive directors submitted a declaration annually of his/her
independence or Non-Independence to the Board of Directors.
Complied
7.10.3(a) Confirmed that the Board of Directors made an annual determination as to the Independence or
Non-Independence of each Non-Executive Director based on the declaration mentioned above and
other information available to the Board and states the names of Non-Executive Directors determined
to the Independent.
Complied
7.10.3(b) If the Directors does not qualify as Independent, the Board taking in to account all the circumstances
if of the opinion that the Non-Executive Director is Independent, the Board has specified, in annual
report, the qualification not met under CSE listing rules and the basis for determining the Director to
be Independent.
Complied
7.10.3(c) Published a small resume in the annual report, of each Director of the Board, which includes
information on the nature of his/her expertise.
Complied
Rule Remuneration & Remuneration Committee Status
7.10.5(a) The correct number of Independent Non-Executive Directors in the Remuneration Committee. Complied
7.10.5(a) Specified whether a separate remuneration committee was formed or whether listed parents
remuneration committee used.
Complied
7.10.5(c) Specified the names of the directors comprising the remuneration committee (where the parent
company’s remuneration committee, qualifies to function as the listed company’s remuneration
committee, a statement in the annual report to this effect and disclosed the names of the Directors.
Complied
7.10.5.(b) Disclosed the functions of the remuneration committee Complied
7.10.5.(a) Specified whether the chairman of the committee is a Non-Executive Director. Complied
7.10.5(c) Specified the aggregate remuneration paid to Executive and Non-Executive Directors in the annual
report - (Remuneration should include cash and all non-cash benefits paid in consideration of
employment with the listed Entity)
Complied
Rule Contents Under the Audit Committee Report Status
7.10.6(a) The correct number of Independent Non-Executive Directors in the Audit Committee. Complied
7.10.6(a) & (C) Specified whether a separate Audit committee was formed or whether listed parent’s Audit Committee
was used.
Complied
7.10.6(c) Specified whether the names of the Directors comprising the Audit Committee (where the parent
company’s Audit Committee qualifies to functions as the listed company’s Audit Committee, a
statement to this effect and disclose the names of the Directors).
Complied
7.10.6(b) Confirmed the functions of the Audit Committee Complied
7.10.6(a) & (c) Specified whether the chairman of the committee is a Non-Executive Director. Complied
7.10.6(a) & (c) Specified whether the chairman or 1 member of the audit committee is a member of a recognized
professional Accounting body.
Complied
7.10.6(a) & (c) Specified whether the CEO & CFO attend Audit Committee meeting, unless otherwise determined by
the Audit committee.
Complied
7.10.6( c) Specified the basis for determining External Auditors as being Independent. Complied
Corporate Governance
23Sierra Cables PLC • Annual Report 2013/14
The responsibility of Directors in relation
to the Financial Statements is set out in
the following statement. The responsibility
of the auditors, in relation to the Financial
Statements prepared in accordance with
the provisions of the Companies Act No.
7 of 2007 and other statutes which are
applicable to the preparation of Financial
Statements are set out in the Independent
Auditors’ Reports.
The Financial Statements comprise of:
C A Statement of Financial Position,
which presents a true and fair view
of the state of affairs of the Company
and its subsidiaries as at the end of the
financial year; and
C An Statement of Comprehensive
Income, which presents a true and
fair view of the profit and loss of the
Company and its subsidiaries for the
financial year, which comply with the
requirements of the Act.
The Directors are required to ensure that, in preparing these Financial Statements:
C The appropriate Accounting Policies
have been selected and applied in
consistent manner and material
departures, if any, have been disclosed
and explained;
C Requirements in the Sri Lanka
Accounting Standards, Companies Act
No.07 of 2007 and listing rules of the
Colombo Stock Exchange, have been
followed;
C Judgments and estimates have been
made which are reasonable and
prudent.
The Directors are also required to ensure
that the Company has adequate resources
to continue in operation to justify applying
the going concern basis in preparing the
Financial Statements.
Further, the Directors have a responsibility
to ensure that the Company maintains
sufficient accounting records to disclose,
with reasonable accuracy, the financial
position of the Company and of the
Group, and to ensure that the Financial
Statements presented comply with the
requirements of the Act.
The Directors are also responsible for
taking reasonable steps to safeguard
the assets of the Company and of the
Group and in this regard to give proper
consideration to the establishment of
appropriate internal control systems with
a view to preventing and detecting fraud
and other irregularities.
The Directors are required to prepare the
Financial Statements and to provide the
auditors with every opportunity to take
whatever steps and undertake whatever
inspections they may consider to be
appropriate to enable them to give their
independent audit opinion.
The Directors are of the view that they
have discharged their responsibilities as
set out in this statement.
By Order of the Board
P.R. Secretarial Services(Private) Limited
Secretaries
22nd August, 2014
Statement of Directors’ Responsibilities
24Sierra Cables PLC • Annual Report 2013/14
25Sierra Cables PLC • Annual Report 2013/14
Fina
ncia
l Sta
tem
ents
ContentsIndependent Auditors’ Report 26
Consolidated Statement of Comprehensive Income 27
Consolidated Statement of Financial Position 28
Consolidated Statement of Changes In Equity 29-30
Cash Flow Statement 31-32
Notes to the Financial Statements 33-62
26Sierra Cables PLC • Annual Report 2013/14
Independent Auditors’ Report
TO THE SHAREHOLDERS OF SIERRA CABLES PLC
Report on the Financial Statements
We have audited the accompanying financial
statements of Sierra Cables PLC (“the Company”)
and the consolidated financial statements of
the Company and its subsidiaries (“the Group”),
which comprise the statements of financial
position as at 31st March 2014, the statements
of comprehensive income, changes in equity and
cash flows for the year then ended, and notes,
comprising a summary of significant accounting
policies and other explanatory information set
out on pages 27 to 62 of the annual report.
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 control 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
policies used and significant estimates made by
management, as well as evaluating the overall
financial statement presentation.
Except as discussed in the following paragraphs,
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.
Qualified Opinion - Company
As disclosed in Note 7.1 to the financial
statements, the Company has incorporated
certain income, expenses and assets in the
Statement of Comprehensive Income and the
Statement of Financial Position of the Company
for the year ended and as at 31st March 2014.
The transactions relating to these income,
expenses and the assets are related to the
operations of the Company, but had not been
recorded either in the general ledger or in the
financial statements of the Company up to 31st
March 2014 as disclosed in the said Note 7.1
to the financial statements. The Company has
neither followed the established accounting
procedures nor used the accounting system
of the Company for recording and accounting
for these transactions as it had followed for
recording and accounting for other transactions
of the Company up to 31st March 2014.
In our opinion, except for the effects of the
matter described in the preceding paragraph,
the financial statements give a true and fair view
of the financial position of the Company as at
31st March 2014, and its financial performance
and its cash flows for the year then ended in
accordance with Sri Lanka Accounting Standards.
Qualified Opinion - Group
As disclosed in Note 7.1 to the financial
statements, the Company has incorporated
certain income, expenses and assets in the
Statement of Comprehensive Income and the
Statement of Financial Position of the Company
for the year ended and as at 31st March 2014.
KPMG, a Sri Lanka Partnership and a member firmof the KPMG network of independent member firmsaffilliated with KPMG International cooperative(“KPMG International”), a Swiss entity.
M.R. Mihular FCAT.J.S. Rajakarier FCAMs. S.M.B. Jayasekara ACAG.A.U. Karunaratne ACA
Principals - S.R.I. Perera ACMA, LLB, Attorney-at-law, H.S. Goonewardene ACA
P.Y.S. Perera FCAW.W.J.C. Perera FCAW.K.D.C Abeyrathne ACAR.M.D.B. Rajapakse ACA
C.P. Jayatilake FCAMs. S. Joseph ACAS.T.D.L. Perera ACAMs. B.K.D.T.N. Rodrigo ACA
KPMG Tel : +94 - 11 542 6426(Chartered Accountants) Fax : +94 - 11 244 587232A, Sir Mohamed Macan Markar Mawatha, +94 - 11 244 6058P. O. Box 186, +94 - 11 254 1249 Colombo 00300, +94 - 11 230 7345Sri Lanka. Internet : www.lk.kpmg.com
The transactions relating to these income,
expenses and the assets are related to the
operations of the Company, but had not been
recorded either in the general ledger or in the
financial statements of the Company up to 31st
March 2014 as disclosed in the said Note 7.1
to the financial statements. The Company has
neither followed the established accounting
procedures nor used the accounting system
of the Company for recording and accounting
for these transactions as it had followed for
recording and accounting for other transactions
of the Company up to 31st March 2014.
In our opinion, except for the effects of the
matter described in the preceding paragraph, the
consolidated financial statements give a true and
fair view of the financial position of the Company
and its subsidiaries dealt with thereby as at 31st
March 2014, and of its financial performance
and its cash flows for the year then ended in
accordance with Sri Lanka Accounting Standards.
Without further qualifying our opinion, we
draw attention to Note 34 and Note 35 to the
consolidated financial statements which more
fully explain existence of doubt on the going
concern of Sierra Industries (Private) Limited,
a subsidiary of the group and non-completion
of contractual agreement between the main
contractor of Sierra Power (Private) Limited, a
subsidiary of the Group respectively.
Report on Other Legal and Regulatory Requirements
These financial statements also comply with the
requirements of Sections 153(2) to 153(7) of the
Companies Act No. 07 of 2007.
Chartered Accountants
10th July 2014Colombo
27Sierra Cables PLC • Annual Report 2013/14
Group CompanyFor the year ended 31st March 2014 2013 2014 2013
Note Rs. Rs. Rs. Rs.
Revenue 5 2,284,934,549 2,141,353,995 2,137,572,003 2,055,318,338
Cost of Sales (1,967,488,040) (1,836,300,771) (1,834,518,102) (1,756,473,539)
Gross Profit 317,446,509 305,053,224 303,053,901 298,844,799
Other Income 6 39,705,634 6,137,840 39,705,634 6,137,840
Selling and Distribution Expenses (146,149,660) (103,030,304) (145,212,139) (88,436,991)
Administrative Expenses (146,979,750) (67,271,954) (141,289,774) (64,211,117)
Other Operating Expenses (272,616,893) (2,515,236) (272,616,894) (2,515,236)
Profit/(Loss) from Operations 7 (208,594,160) 138,373,570 (216,359,272) 149,819,295
Net Finance Costs 8 (167,578,713) (158,354,069) (137,248,148) (132,932,082)
Profit/(Loss) Before Associate Companies’ Share of Loss (376,172,873) (19,980,499) (353,607,420) 16,887,213
Share of Loss of Associate Companies 15 (96,348) (25,139) - -
Profit/(Loss) Before Taxation (376,269,221) (20,005,638) (353,607,420) 16,887,213
Income Tax Expense 9 69,790,587 (4,556,107) 83,541,215 (1,740,666)
Profit/(Loss) for the year (306,478,634) (24,561,745) (270,066,205) 15,146,547
Other Comprehensive Income/(Expense)
Net Change in Fair Value of Available-for-Sale Investments (7,272,588) (9,853,492) (7,272,588) (9,853,492)
Revaluation Surplus on Property, Plant and Equipment - 430,075,011 - 430,075,011
Deferred Tax Impact on Revaluation Surplus on Property, Plant and Equipment - (97,136,079) - (97,136,079)
Actuarial Gain/(Loss) on Defined Benefit Obligation Net of Tax (2,312,453) 1,380,312 (2,114,672) 1,380,312
Other Comprehensive Income/(Expense) for the year, Net of Income Tax (9,585,041) 324,465,752 (9,387,260) 324,465,752
Total Comprehensive Income/(Expense) for the year (316,063,675) 299,904,007 (279,453,465) 339,612,299
Profit/(Loss) Attributable to:
Owners of the Company (290,881,814) (12,693,539) (270,066,205) 15,146,547
Non-Controlling Interests (15,596,820) (11,868,206) - -
(306,478,634) (24,561,745) (270,066,205) 15,146,547
Total Comprehensive Income/(Expense) attributable to:
Owners of the Company (300,400,357) 311,772,213 (279,453,465) 339,612,299
Non-Controlling Interests (15,663,318) (11,868,206) - -
(316,063,675) 299,904,007 (279,453,465) 339,612,299
Basic Earnings/(Loss) per Share 10 (0.54) (0.02) (0.50) 0.03
Figures in brackets indicate- deductions.
The Financial Statement are to be read in conjunction with the related notes which form a part of these Financial Statements set out on pages 33 to 62.
Consolidated Statement of Comprehensive Income
28Sierra Cables PLC • Annual Report 2013/14
Group CompanyAs at 31st March 2014 2013 2014 2013
Note Rs. Rs. Rs. Rs.
ASSETSNon-Current AssetsProperty, Plant and Equipment 11 1,206,366,843 1,179,081,707 890,561,492 954,108,269 Intangible Assets 12 2,087,725 4,050,560 2,087,725 4,050,560 Investment Property 13 14,784,299 31,211,300 14,784,299 31,211,300 Investments in Subsidiaries 14 - - 160,680,020 70,880,020 Investments in Associates 15 2,689,197 2,785,545 5,800,000 5,800,000 Investments Available for Sale 16 112,951,573 121,765,158 112,951,573 121,765,158 Goodwill on Acquisition 14 - 329,300 - -
1,338,879,637 1,339,223,570 1,186,865,109 1,187,815,307
Current AssetsInventories 17 612,006,180 1,026,894,046 564,953,048 992,280,321 Trade and Other Receivables 18 950,307,110 870,687,803 788,608,741 795,567,718 Income Tax Receivable 15,830,737 15,811,592 15,830,737 15,811,592 Asset Held for Sale 19 21,000,000 21,000,000 21,000,000 21,000,000 Amounts Due from Related Companies 20 69,480,864 72,310,131 134,499,606 89,045,367 Available-for-Sale Financial Assets 16 - 53,134,656 - 53,134,656 Cash in Hand and at Bank 21 10,421,297 16,080,412 10,257,327 15,776,180
1,679,046,188 2,075,918,640 1,535,149,459 1,982,615,834 Total Assets 3,017,925,825 3,415,142,210 2,722,014,568 3,170,431,141
EQUITY AND LIABILITIESEquity Stated Capital 22 894,565,898 894,565,898 894,565,898 894,565,898 Retained Earnings 40,455,632 333,900,623 93,828,558 366,009,435 Fair Value Reserve 87,812,815 95,085,403 87,812,815 95,085,403 Revaluation Reserve 332,938,932 332,938,932 332,938,932 332,938,932 Total Equity Attributable to Equity Holders of the Company 1,355,773,277 1,656,490,856 1,409,146,203 1,688,599,668 Non-Controlling Interest 11,312,491 17,658,587 - - Total Equity 1,367,085,768 1,674,149,443 1,409,146,203 1,688,599,668
Non Current LiabilitiesRetirement Benefit Obligations 23 22,153,322 14,874,524 21,624,714 14,874,524 Deferred Tax Liability 24 84,844,699 155,529,230 68,355,089 152,713,789 Long Term Loans 25 182,843,657 217,485,541 98,773,221 113,440,531 Long Term Lease Liability 26 2,757,920 6,234,846 2,757,920 6,234,846
292,599,598 394,124,141 191,510,944 287,263,690
Current LiabilitiesTrade and Other Payables 27 392,351,499 369,806,639 336,227,201 339,067,141 Current Portion of Long Term Loans 25 63,292,945 54,158,846 43,000,700 37,758,056 Current Portion of Lease Liability 26 3,480,568 5,859,816 3,480,568 5,859,816 Import Demand Loans 28 771,034,976 843,276,728 678,146,734 796,596,321 Bank Overdraft 21 128,080,471 73,766,597 60,502,218 15,286,449 Total Current Liabilities 1,358,240,459 1,346,868,626 1,121,357,421 1,194,567,783 Total Liabilities 1,650,840,057 1,740,992,767 1,312,868,365 1,481,831,473 Total Equity and Liabilities 3,017,925,825 3,415,142,210 2,722,014,568 3,170,431,141
Net Assets per Share 2.52 3.08 2.62 3.14
The Financial Statement are to be read in conjunction with the related notes which form a part of these Financial Statements set out on pages 33 to 62.
It is certified that the Financial Statements have been prepared in compliance with the requirements of the Companies Act No 07 of 2007.
Thusitha SiriwardeneFinance Manager
The Board of Directors is responsible for the preparation and presentation of the Financial Statements. Approved and signed for and on behalf of the Board of Directors.
Priyantha Perera D.S. PandithaChairman Managing Director
10th July, 2014Colombo
Consolidated Statement of Financial Position
29Sierra Cables PLC • Annual Report 2013/14
For the Year ended 31st March, 2014 Stated Capital
Revaluation Reserve
Fair Value Reserve
Retained Earnings
Total
Company Rs. Rs. Rs. Rs. Rs.
Balance as at 1st April 2012 894,565,898 - 104,938,895 349,482,576 1,348,987,369
Profit for the year - - - 15,146,547 15,146,547
Other Comprehensive Income/(Expense)
Net Change in Fair Value of Available for Sale Investments - - (9,853,492) - (9,853,492)
Revaluation Surplus on Property, Plant and Equipment - 430,075,011 - - 430,075,011
Deferred Tax on Revaluation Surplus of Property, Plant and Equipment - (97,136,079) - - (97,136,079)
Actuarial Gain on Defined Benefit Obligation Net of Tax - - - 1,380,312 1,380,312
Total Comprehensive Income/(Expense) for the year - 332,938,932 (9,853,492) 16,526,859 339,612,299
Balance as at 31st March 2013 894,565,898 332,938,932 95,085,403 366,009,435 1,688,599,668
Balance as at 1st April 2013 894,565,898 332,938,932 95,085,403 366,009,435 1,688,599,668
Loss for the year (270,066,205) (270,066,205)
Other Comprehensive Income/(Expense)
Fair Value Loss on Available for Sale Investments - - (7,272,588) - (7,272,588)
Actuarial Loss on Defined Benefit Obligation - - - (2,114,672) (2,114,672)
Total Comprehensive Income/(Expense) for the year - - (7,272,588) (272,180,877) (279,453,465)
Balance as at 31st March 2014 894,565,898 332,938,932 87,812,815 93,828,558 1,409,146,203
Figures in brackets indicate deductions.
The Financial Statements are to be read in conjunction with the related notes which form a part of these Financial Statements set out on pages 33 to 62.
Statement of Changes In Equity
30Sierra Cables PLC • Annual Report 2013/14
Att
ribu
tabl
e to
ow
ners
of t
he C
ompa
ny
For t
he Y
ear e
nded
31s
t Mar
ch S
tate
d C
apit
al R
eval
uati
on R
eser
ve F
air
Valu
e
Res
erve
Ret
aine
d E
arni
ngs
Tot
alN
on C
ontr
ollin
g In
tere
st
Tot
al
Equi
ty
Gro
up R
s.
Rs.
R
s. R
s. R
s. R
s. R
s.
Bala
nce
as a
t 1s
t A
pril
2012
894
,565
,898
-
104
,938
,895
3
45,2
13,8
50
1,3
44,7
18,6
43
29,
451,
690
1,3
74,1
70,3
33
Loss
for
the
year
-
--
(12,
693,
539)
(12,
693,
539)
(11,
868,
206)
(24,
561,
745)
Oth
er C
ompr
ehen
sive
Inco
me
Net
Cha
nge
in F
air
Valu
e of
Ava
ilabl
e fo
r Sa
le In
vest
men
ts -
-
(9
,853
,492
) -
(9
,853
,492
) -
(9
,853
,492
)
Reva
luat
ion
Surp
lus
on P
rope
rty,
Pla
nt a
nd E
quip
men
t -
4
30,0
75,0
11
-
-
430
,075
,011
-
4
30,0
75,0
11
Def
erre
d Ta
x on
Rev
alua
tion
Surp
lus
of P
rope
rty,
Pla
nt a
nd E
quip
men
t -
(9
7,13
6,07
9) -
-
(9
7,13
6,07
9) -
(9
7,13
6,07
9)
Actu
aria
l Gai
n on
Defi
ned
Bene
fit O
blig
atio
n N
et o
f Tax
-
-
-
1,3
80,3
12
1,3
80,3
12
-
1,3
80,3
12
Tota
l Com
preh
ensi
ve In
com
e/(E
xpen
se) f
or t
he y
ear
-
332
,938
,932
(9
,853
,492
) (1
1,31
3,22
7) 3
11,7
72,2
13
(11,
868,
206)
299
,904
,007
Adj
ustm
ent
Due
to
Chan
ges
in E
ffec
tive
Hol
ding
s -
--
--
75,
103
75,
103
Bala
nce
as a
t 31
st M
arch
201
3 8
94,5
65,8
98
332
,938
,932
9
5,08
5,40
3 3
33,9
00,6
23
1,6
56,4
90,8
56
17,
658,
587
1,6
74,1
49,4
43
Bala
nce
as a
t 1s
t A
pril
2013
894
,565
,898
3
32,9
38,9
32
95,
085,
403
333
,900
,623
1
,656
,490
,856
1
7,65
8,58
7 1
,674
,149
,443
Loss
for
the
year
-
--
(290
,881
,814
) (2
90,8
81,8
14)
(15,
596,
820)
(306
,478
,634
)
Oth
er C
ompr
ehen
sive
Inco
me/
(Exp
ense
)-
Fair
Val
ue L
oss
on A
vaila
ble
for
Sale
Inve
stm
ents
--
(7,2
72,5
88)
-
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res
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Fina
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con
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rela
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note
s w
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se F
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Sta
tem
ents
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on
page
s 33
to 6
2.
Statement of Changes In Equity
31Sierra Cables PLC • Annual Report 2013/14
Group Company
2014 2013 2014 2013For the Year ended 31st March Rs. Rs. Rs. Rs.
Cash Flows from Operating Activities
Profit/(Loss) before Share of Loss of Associate (376,172,873) (19,980,499) (353,607,420) 16,887,213
Adjustments
Depreciation 77,032,206 79,806,262 65,666,707 72,818,926
Amortization of Intangible Asset 2,103,351 2,070,440 2,103,351 2,070,440
Impairment of Assets Held for Sale - 2,515,236 - 2,515,236
Depreciation of Investment Property 1,163,580 1,642,700 1,163,580 1,642,700
Provision for Impairment of Other Receivables 15,000,000 - 15,000,000 -
Provision for Impairment of Trade Receivables 21,636,318 (2,028,726) 21,636,318 (2,028,726)
Provision for Impairment of Subsidiaries - - 17,000,000 -
Profit on Sale of Property, Plant and Equipment (885,276) - (885,276) -
Loss on Disposal of Investment Property 263,421 - 263,421 -
Profit on Disposal of Investment Available for Sale (1,519,434) (1,607,969) (1,519,434) (1,607,969)
Write off of Work in Progress 127,482,528 - 127,482,528 -
Write off of Finished Goods 93,394,610 - 93,394,610 -
Impairment of Goodwill 329,300 - - -
Provision for Retirement Benefit Obligation 4,853,501 3,453,854 4,599,133 3,453,854
Interest Expenses 176,051,617 187,760,457 145,929,108 161,984,579
Interest Income (1,166,742) (6,657,304) (1,166,742) (6,657,304)
Dividend Income (4,868,130) (4,529,871) (4,868,130) (4,529,871)
Operating Profit Before Working Capital Changes 134,697,977 242,444,580 132,191,754 246,549,078
(Increase)/Decrease in Inventories 194,010,727 (83,301,377) 206,450,134 (48,687,652)
(Increase)/Decrease in Trade and Other Receivables (116,255,625) (63,692,303) (29,677,341) 3,414,175
(Increase)/Decrease in Dues from Related Parties 2,829,267 9,990,881 (142,254,239) 27,873,037
Increase/(Decrease) in Trade and Other Payables 22,544,861 (192,058,267) (2,839,939) (213,761,098)
Increase/(Decrease) in Dues to Related Parties - - - (38,512,994)
Cash Generated from/(used in) Operations 237,827,207 (86,616,486) 163,870,369 (23,125,454)
Interest Paid (174,577,616) (187,760,457) (144,455,108) (159,443,328)
Income Tax/ ESC Paid (19,145) (8,531,862) (19,145) (8,531,838)
Gratuity Paid (781,100) (501,525) (781,100) (501,525)
Net Cash Flows Generated from/(used in) Operating Activities 62,449,346 (283,410,330) 18,615,016 (191,602,145)
Cash Flows from Investing Activities
Interest Income 1,166,742 6,657,304 1,166,742 6,657,304
Dividend Received 4,868,130 4,529,871 4,868,130 4,529,871
Acquisition of Property, Plant and Equipment (104,997,639) (72,818,240) (2,800,227) (34,292,909)
Acquisition of Intangible Assets (140,516) (480,000) (140,516) (480,000)
Proceeds from Disposal of Property, Plant and Equipment 1,565,572 1,334,519 1,565,573 1,334,519
Proceeds from Disposal of Investment Property 15,000,000 - 15,000,000 -
(Investment in)/ Maturity Proceeds from Treasury Bills 53,134,656 (14,308,278) 53,134,656 (14,308,278)
Proceeds from Disposal of Available of Sale Investments 3,060,431 5,089,355 3,060,431 5,089,355
Investment in Subsidiary Net of Cash Acquired - 2,817,124 (10,000,000) (880,000)
Investment in Available for Sale Investment - (656,097) - (656,097)
Net Cash from/(used in) Investing Activities (26,342,624) (67,834,442) 65,854,789 (33,006,235)
Cash Flow Statement
32Sierra Cables PLC • Annual Report 2013/14
Group Company
2014 2013 2014 2013For the Year ended 31st March Rs. Rs. Rs. Rs.
Cash Flows from Financing Activities
Borrowing During the Period 1,800,105,539 1,928,554,099 1,667,543,835 1,821,280,408
Repayment of Borrowings (1,897,855,076) (1,566,578,669) (1,795,418,088) (1,565,277,108)
Repayment of Lease (7,330,174) (6,153,940) (7,330,174) (7,537,608)
Proceeds from Share Issue to Non-Controlling Interests 9,000,000 - - -
Net Cash Flows from/(used in) Financing Activities (96,079,711) 355,821,490 (135,204,427) 248,465,692
Net Increase/(Decrease) in Cash and Cash Equivalents (59,972,989) 4,576,718 (50,734,622) 23,857,312
Cash and Cash Equivalents at the Beginning of the Period (57,686,185) (62,262,903) 489,731 (23,367,581)
Cash and Cash Equivalents at the End of the Period (Note 21) (117,659,174) (57,686,185) (50,244,891) 489,731
Analysis of Cash and Cash Equivalents at the end of the year;
Cash in Hand and at Bank 10,421,297 16,080,412 10,257,327 15,776,180
Bank Overdraft (128,080,471) (73,766,597) (60,502,218) (15,286,449)
(117,659,174) (57,686,185) (50,244,891) 489,731
Figures in brackets indicate deductions.
The Financial Statements are to be read in conjunction with the related notes which form a part of these Financial Statements set out on pages 33 to 62.
Cash Flow Statement
33Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
1. REPORTING ENTITY
1.1 Domicile and Legal Form
Sierra Cables PLC is a public limited liability Company incorporated and domiciled in Sri Lanka. The registered office of the Company is located at 112, Havelock Road, Colombo 05 and principal place of business is located at 39/1A, Galwarusawa Road, Korathota, Kaduwela.
The consolidated financial statements of the Company as at and for the year ended 31st March 2014 comprise the Company and its Subsidiaries (together referred as the “Group” individually as Group entities) and the group interest in associates.
Sierra Cables being a part of a large conglomerate is also a Group on its own. The principal activity of the Company is manufacture and sale of wires and cables. The two subsidiaries, Sierra Power (Private) Ltd and Sierra Industries (Private) Ltd are engaged in the power generation to the National Grid and manufacture of UPVC pipes and fittings respectively. The two associate companies T & G Lanka (Private) Ltd and Tea Leaf Resort (Private) Ltd are diversified to manufacturing of Patch Cables and to leisure sector.
All the companies in the Group have a common financial year, which ends on 31st March.
2. BASIS OF PREPARATION
2.1 Statement of Compliance
The consolidated financial statements have been prepared in accordance with the Sri Lanka Accounting Standards (SLFRSs/LKASs) promulgated by the Institute of Chartered Accountants of Sri Lanka (ICASL) and comply with the requirement of Companies Act No.07 of 2007.
The consolidated financial statements were authorised for issue by the Board of Directors on 10th July 2014.
2.2 Basis of Measurement
The Financial Statements have been prepared on the historical cost basis except for the following material items in the statement of financial position.
C Available-for-sale financial assets are measured at fair value;
C Liability for defined benefit obligations is carried at the present value of the defined benefit obligations.
C Land, Buildings and Plant and Machinery are measured at cost at the time of acquisition and subsequently at revalued amounts, which are the fair values at the date of revaluation.
The Directors have made an assessment of the Group’s ability to continue as a going concern in the foreseeable future and they do not foresee a need for liquidation or cessation of trading.
2.3 Functional and Presentation Currency
The Financial Statements are presented in Sri Lankan Rupees which is the Group’s functional currency. All financial information presented in Sri Lankan Rupees has been rounded to the nearest rupee, unless stated otherwise.
2.4 Use of Estimates and Judgments
The preparation of Financial Statements in conformity with Sri Lanka Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about critical estimates and judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is provided in the following notes.
C Identification, measurement and assessment of impairment
C Recognition and measurement of financial instruments
C Retirement Benefit Obligations
2.5 Change in Accounting Policy
Defined Benefit Plans
The Company adopted LKAS 19 – ‘Employee Benefits’ (Revised 2013) which became effective from 1st January 2013 as part of its mandatory application and changed its basis for determining the income or expense related to defined benefit plan.
As a result of the change, the Company now recognizes all the re measurements of the net defined benefit liability in other comprehensive income. Re measurements of the net defined benefit liability comprise of Actuarial gain or loss.
Previously, the Company recognized actuarial gain or losses in profit or loss.
Impact of Change in Accounting Policy
The change in accounting policy has been applied retrospectively.
The following table summarizes the financial effects on the financial statements on implementation of the new accounting policy:
Group Company
Description 2013 2013Rs. Rs.
Consolidated Statement of Comprehensive Income
Comprehensive Income 1,913,910 1,913,910
Other Comprehensive Income (1,913,910) (1,913,910)
The change in Accounting policy has no material impact on income tax and the deferred tax computations as at the above dates.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.
34Sierra Cables PLC • Annual Report 2013/14
3.1 Basis of Consolidation
(a) Business Combination
Business combinations are accounted for using the acquisition method as at the acquisition date when control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable
The Group measures goodwill at the acquisition date as:
C The fair value of the consideration transferred; plus
C The recognised amount of any non-controlling interests in the acquire; plus
C If the business combination is achieved in stages, the fair value of the pre-existing equity interest In the acquire; less
C The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities Assumed.
C When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
(b) Non-Controlling Interests
For each business combination, the Group elects to measure any non-controlling which are generally at fair value.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
(c) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
(d) Loss of Control
On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
(e) Investments in Associates
Associates are those entities in which the Group has significant influence but not control, over the financial and operating policies, Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Investments in associates are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity accounted investees, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment, including any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
(f) Transactions Eliminated on Consolidation
Intra group balances and transactions, and any unrealised income and expenses arising from intra group transactions, are eliminated in preparing the consolidated financial statements, Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.
3.2 Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are re-translated to the functional currency at the exchange rate at that date.
Non monetary assets and liabilities denominated in foreign currencies that are measured at fair value are re-translated to the functional currency at the exchange rate at the date that the fair value was determined. Non monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss.
3.3 Assets and Bases of Their Valuation
3.3.1 Property, Plant and Equipment
(a) Recognition and Measurement
All items of property, plant and equipment are initially recorded at cost. Where items of property, plant and equipment are subsequently revalued, the entire class of such assets is revalued. Revaluations are made with sufficient regularity to ensure that their carrying amounts do not differ materially from their fair values at the reporting date.
Subsequent to the initial recognition of the asset at cost, the revalued property, plant and equipment are carried at revalued amounts less accumulated depreciation thereon and accumulated impairment losses. The Group applies revaluation model to land, building and plant and machinery and cost model to the remaining assets under property, plant and equipment which are stated at historical cost less accumulated depreciation less accumulated impairment losses, if any.
The cost of an item of property, plant and equipment comprise its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. The cost of self-constructed
Notes to the Financial Statements
35Sierra Cables PLC • Annual Report 2013/14
assets includes the cost of materials, direct labour, any other costs directly attributable to bringing the asset to the working condition for its intended use and capitalised borrowing costs. This also includes cost of dismantling and removing the items and restoring in the site on which they are located.When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
(b) Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized.
The costs of the day to day servicing of property, plant and equipment are recognized in profit or loss as incurred.
(c) Derecognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses on derecognition are recognized within other income in profit or loss.
(d) Depreciation
Items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated useful lives of each component. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows.
AssetCategory
Useful Life(Years)
DepreciationRate(%)
Building 20-25 4-5
Plant and Machinery 10-20 5-10
Factory Equipment 5 20
Furniture Fittings 5 20
Motor Vehicles 5 20
Offices and Computer Equipment 5 20
Depreciation of an asset begins when it is available for use where as depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized.
Depreciation method, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
(e) Revaluation Policy
The Company’s land, buildings, plant and machinery, factory equipment are revalued with sufficient regularity once in five years. The revaluation surplus is accounted in the revaluation reserve.
3.3.2 Intangible Assets and Goodwill
(a) Intangible Assets
An Intangible Asset is recognized if it is probable that economic benefits are attributable to the assets will flow to the Group and cost of the assets can be measured reliably and carried at cost less accumulated amortization and accumulated impairment losses.
(b) Goodwill
Goodwill that arises on the acquisition of subsidiaries is presented with intangible assets. For the measurement of goodwill at initial recognition, see Note 3.1 (a).
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity accounted investee as a whole.
(c) Computer Software
All computer software cost incurred, which are not an integral part of the related hardware, which can be clearly identified, reliably measured and its probable that they will lead to future economic benefits, are included in the Statement of Financial Position under the category of intangible assets.
Subsequent Expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.
Amortization
Intangible assets are amortized on a straight-line basis in profit or loss over their estimated useful lives from the date that they are available for use. The estimated useful lives for the current and comparative years are as follows:
AssetCategory
Useful Life(Years)
DepreciationRate(%)
Computer Software 05 20
Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
3.3.3 Leased Assets
Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for
Notes to the Financial Statements
36Sierra Cables PLC • Annual Report 2013/14
in accordance with the accounting policy applicable to that asset. Other leases are operating leases and are not recognized in the Group’s statement of financial position.
3.3.4 Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is initially measured at cost and subsequently at cost less accumulated depreciation and impairment losses.
Provision for depreciation is calculated by using a straightline method on the cost of the Property in order to write-off such amounts over the estimated useful economic life of 20 years.
3.3.5 Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sales.
The costs incurred in bringing inventories to its present location and condition, are accounted for as follows:
Raw Materials
- On actual cost on first-in-first-out basis
Finished Goods and Work-in-Progress
- At actual cost, on first-in-first-out basis for work in progress
- At standard cost for finished goods
3.3.6 Impairment of non financial assets
The carrying amounts of the group’s non financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an assets or cash generating unit (CGU) exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
Impairment losses are recognised in the statement of comprehensive income. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to CGU (if any) and then to reduce the carrying amounts of other assets in
the CGU (group of CGUs) on pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.3.7 Financial Instruments
(i) Non Derivative Financial Assets
The group initially recognizes loans and receivables on the date that they are originated. All other financial assets are recognized initially on the trade date at which the group becomes a party to the contractual provisions of the instrument.
A financial asset is measured initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.
The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire; it transfers the right to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to set off the amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The group classifies non derivative financial assets into the following categories;
C Loans and Receivables
C Available for Sale Financial Assets
(a) Loans and Receivables
Loans and receivables are financial assets with fixed or determinable payment that are not quoted in an active market. Such assets are recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.
(b) Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term commitments.
(c) Available for Sale Financial Assets
Available-for-sale financial assets are financial assets that are designated as available for sale and are not classified in any other categories. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses on available for sale equity instruments are recognised in other comprehensive
Notes to the Financial Statements
37Sierra Cables PLC • Annual Report 2013/14
income and presented within equity in the fair value reserve. When an investment is derecognised, the cumulative gain or loss in other comprehensive incomes transferred to profit or loss.
Available for sales financial assets comprise of investment in equity shares and treasury bills.
(ii) Non-Derivative Financial Liabilities
The Group recognizes financial liabilities initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group classifies financial liabilities into other financial liabilities category. Such finance liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.
Other financial liabilities comprise trade payables, other liabilities and bank borrowings.
(iii) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.
(iv) Amortized Cost Measurement
The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition, minus principal repayments and any impairment and plus/minus the cumulative amortization using the effective interest method of any difference between the initial amount recognised and the maturity amount.
(v) Fair Value Measurement
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction on the measurement date.
The fair value of financial instruments that are traded in an active market at each reporting date is determined by reference to quoted market prices or dealer price quotations, without any deduction for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.
(vi) Impairment
The group assesses at each reporting date whether there is any objective evidence that financial assets or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the
estimated future cash flows of the financial asset that can be estimated reliably.
Objective evidence that a financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the company on terms that the company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults or the disappearance of an active market for a security.
(a) Impairment Losses on Available for Sale Financial Assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in profit or loss. Changes in cumulative impairment losses attributable to application of the effective interest method are reflected as a component of interest income.
If, in a subsequent period,the fair value of an impaired available-far-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-far-sale equity security is recognised in other comprehensive income.
3.3.8 Defined Benefit Plan
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value.
The retirement benefit obligation of the group is based on the actuarial valuation using Projected Unit Credit (PUC) methods as recommended by Sri Lanka Accounting Standard (LKAS 19) Employee Benefits. The calculation is performed by independent Actuary using the projected unit credit method. The assumptions based on which the results of the actuarial valuation was determined, are included in Note 23.2 to the Financial Statements.
The Group recognizes all actuarial gains and losses arising from the defined benefits plans immediately in the other comprehensive income. The liability is disclosed under Non-current liabilities in the Statement of Financial Position and not externally funded.
However, as per the Payment of Gratuity Act No. 12 of 1983 the liability to an employee arises only on completion of 5 years of continued service.
(i) Defined Contribution Plans – Employees’ Provident Fund and Employee Trust Fund
All employees who are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributions are covered
Notes to the Financial Statements
38Sierra Cables PLC • Annual Report 2013/14
by relevant contributions funds in line with the relevant statutes. Employer’s contributions to the defined contribution plans are recognized as an expense in profit or loss when incurred.
3.3.9 Provisions
A provision is recognized if, as a result of a past event the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation.
3.4 Statement of Comprehensive Income
(a) Revenue
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue and the 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.
(i) Sale of Goods
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably.
(ii) Dividend Income
Dividend income recognized when the right to receive the dividend is established.
(iii) Interest Income
Interest income is recognized on an accrual basis unless collection is in doubt.
(iv) Gains and Losses
Net gains and losses of a revenue nature arising from the disposal of property, plant and equipment and other non-current assets, including investments, are accounted for in the statement of comprehensive income, after deducting from the proceeds on disposal, the carrying amount of such assets and the related selling expenses.
(v) Other Income
Other income is recognized on an accrual basis
(b) Expenditure Recognition
(i) Operating Expenses
All expenses incurred in day to day operations of the business and in maintaining the property, plant and equipment in a state of efficiency has been charged to the statement of comprehensive income in arriving at the profit for the year. Provision has also been made for impairment of financial assets, slow moving inventories, all known liabilities and depreciation on property, plant and equipment.
(ii) Borrowing Costs
Borrowing costs directly attributable to acquisition, construction or production of assets that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that Group incurs in connection with the borrowing of funds.
(iii) Net Finance Income/(Expenses)
Finance income comprises interest income on funds invested. Interest income is recognized as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings that are not directly attributable to the acquisition, construction or productions of a qualifying asset recognised using the effective interest method.
(c) Taxation
(i) Current Taxes
Current Income tax liabilities for the current and prior periods are measured 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 reporting date.
The provision for income tax is based on the elements of income and expenditures reported in the Financial Statements and computed in accordance with the provisions of the Inland Revenue Act.
(ii) Deferred Taxation
Deferred taxation is provided, using the liability method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences and carry forward of unused tax losses / credits can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted as at the reporting date.
Deferred tax assets and deferred tax liabilities are offset if legally enforceable right exists to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation authority.
(D) Related Party Transactions
Disclosure has been made in respect of the transactions in which one party has the ability to control or exercise significant influence over the financial and operating policies/decisions of the other, irrespective of whether a price is being charged or not.
Notes to the Financial Statements
39Sierra Cables PLC • Annual Report 2013/14
The relevant details are disclosed in the respective notes to the Financial Statements.
(e) Cash Flow Statement
Interest received and dividends received are classified as investing cash flows, while dividend paid and interest paid, is classified as financing cash flows for the purpose of presentation of Statement of Cash Flows which has been prepared using the ‘Indirect Method’.
(f) Earnings per Share
Basic Earning Per Share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the number of shares outstanding at the reporting date.
(g) Events Occurring After the Reporting Period
Events after the reporting period are those events favorable and unfavorable, that occur between the end of the reporting period and the date when the financial statements are authorized for issue.
The materiality of the events occurring after the reporting period is considered and appropriate adjustments to or disclosures are made in the Financial Statements, where necessary.
(h) Assets Held for Sale
Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale the assets are re measured in accordance with the Group’s accounting policies. Thereafter the assets are measured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initial classification and subsequent gains and losses on re-measurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.
Once classified as held for sale, property plant and equipment are no longer amortized or depreciated
4. EFFECT OF ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE
New Accounting Standards Issued but not Effective as at Reporting Date
The Institute of Chartered Accountants of Sri Lanka has issued the following new Sri Lanka Accounting Standards which will become applicable for financial periods beginning on or after 1st January 2014.
Accordingly, these Standards have not been applied in preparing these financial statements.
C Sri Lanka Accounting Standards - SLFRS 10 “Consolidated financial statements”
The objective of this SLFRS is to establish principles for the presentation and preparation of consolidated financial statements when a company controls one or more other entities.
An investor is expected to control an investee if and only if the investor has all the following:
C Power over the investee;
C Exposure, or rights, to variable returns from its involvement with the investee; and
C The ability to use its power over the investee to affect the amount of the investor’s returns.
This Standard will require the Group to review the group structure in the context of the new Standard and its requirements. Accordingly adoption of this standard is expected to have an impact on the Group structure, and consolidated reporting.
SLFRS 10 will become effective from 1st April 2014 for the Group with early adoption permitted. This SLFRS will supersede the requirements relating to consolidated financial statements in LKAS 27” Consolidated and Separate Financial Statements.
C Sri Lanka Accounting Standard - SLFRS 13, “Fair Value Measurement”
This SLFRS defines fair value, sets out in a single SLFRS a framework for measuring fair value; and requires disclosures about fair value measurements.
This SLFRS will become effective for the Group from 1st April 2014. Earlier application is permitted.
This SLFRS shall be applied prospectively as of the beginning of the annual period in which it is initially applied. The disclosure requirements of this SLFRS need not be applied in comparative information provided for periods before initial application of this SLFRS.
C “Sri Lanka Accounting Standard – SLFRS 9 “Financial Instruments”
The objective of this SLFRS is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an company’s future cash flows.
A company shall apply this SLFRS to all items within the scope of LKAS 39 Financial Instruments: Recognition and Measurement. This SLFRS will become effective for the Group from 1st April 2015. Earlier application is permitted for the financial period beginning on or after 1st January, 2013.
Notes to the Financial Statements
40Sierra Cables PLC • Annual Report 2013/14
Group Company
For the year ended 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
5. REVENUE
Local Sales 2,269,758,619 2,134,739,158 2,122,396,073 2,048,703,501
Export Sales 15,175,930 6,614,837 15,175,930 6,614,837
2,284,934,549 2,141,353,995 2,137,572,003 2,055,318,338
6. OTHER INCOME
Profit on Disposal of Available for Sale Investments 1,519,434 1,607,969 1,519,434 1,607,969
Profit on Disposal of Property, Plant and Equipment 885,276 - 885,276 -
Dividend Income 4,868,130 4,529,871 4,868,130 4,529,871
Scrap Sales 32,432,794 - 32,432,794 -
39,705,634 6,137,840 39,705,634 6,137,840
7. PROFIT/(LOSS) FROM OPERATIONS
Profit/(Loss) from Operations is stated after charging all the expenses including following;
Directors’ Fees and Emoluments* 39,529,500 11,260,000 38,329,500 10,560,000
Auditors' Remuneration - Audit 775,000 684,000 700,000 630,000
- Audit Related Services 327,794 383,853 327,794 383,853
Depreciation and Amortization 80,299,137 83,519,402 68,933,638 76,532,066
Write off of Work in progress (Note 7.2) 127,482,528 - 127,482,528 -
Write off of Finished Goods (Note 7.3) 93,394,610 - 93,394,610 -
Provision for Impairment of Subsidiaries - - 17,000,000 -
Provision for Impairment of Other Receivables 15,000,000 - 15,000,000 -
Provision for Impairment of Trade Receivables 21,636,318 - 21,636,318 -
Loss on Disposal of Investment Property 263,421 - 263,421 -
Bad Debt Written Off 1,608,479 6,601,488 1,608,479 6,601,488
Personnel Costs
Salaries, Wages and Related Costs 105,587,015 96,363,267 99,217,061 90,025,816
Defined Contribution Plans 11,766,725 10,786,800 11,288,197 10,319,431
Defined Benefit Plan (Note 23) 4,853,501 3,453,854 4,599,133 3,453,854
*The Directors Fees and emoluments for the year ended 31st March 2014 include the directors’ fees and emoluments paid but not accounted for during the previous periods as explained in Note 7.1 to the financial statements. These have now been recognized in the financial statements for the year ended 31st March 2014.
7.1 Unrecorded Revenue, Expenses and Assets in the General Ledger
The Company has identified that certain transactions with regard to revenue, other income, expenses and assets have not been recorded in the general ledger of the company during the previous years and the current year and accordingly in the financial statements of the company as well. The Board of Directors has investigated and quantified the unrecorded income, expenses and assets recorded in a separate system maintained by the management and the following amounts have now been recorded in the respective captions in the financial statements for the year ended 31st March 2014 based on the information available. It is impractical for the company to identify impact for respective prior periods since the records and information are inadequate and incomplete to make a reliable assessment of the impact for the each prior period. Therefore the following amounts of revenue, other income, expenses and assets have been recorded in the financial statements for the year ended 31st March 2014 and appropriate adjustments have been made accordingly.
Notes to the Financial Statements
41Sierra Cables PLC • Annual Report 2013/14
7.1 Unrecorded Revenue, Expenses and Assets in the General Ledger (Continued)
Rs.
Income
Local Sales 80,994,023
Scrap Sales 32,403,794
Total 113,397,817
Expenses
Selling and Distribution Expenses 14,970,229
Administration Expenses 47,404,231
Other Operating Expenses 5,000,486
67,374,946
Assets
Trade and Other Receivables 3,810,964
Cash in Hand and at Bank 2,146,743
5,957,707
Reinstatement of the Effect of Understated Expenses in the General Ledger
Selling and Distribution 10,353,837
Administration Expenses 29,711,327
40,065,164
Total 113,397,817
7.2 Write off of Work in Progress
The Company has identified a difference of Rs. 172 Mn in the value of work in progress of inventories between the general ledger and Valuation carried out by the company as at 31st March 2014. Based on the analysis performed, it was identified that Rs. 49 Mn relates to the costs of sales of unrecorded revenue of Rs. 80 Mn disclosed in Note 7.1 and the balance due to overstatement of value of work in progress in the general ledger. However it is not practicable for the Company to identify the impact relating to the prior periods due to this overstatement of work in progress since the records and the information are inadequate and incomplete to make an accurate valuation of work in progress as at each previous year ends. Therefore, the Company has now recorded an amount of Rs. 49 Mn in cost of sales for the year ended 31st March 2014 and the balance has been written off during the year ended 31st March 2014.
7.3 Write off of Finished Goods
The Company has identified a difference of Rs. 93 Mn between the physical finished goods stock and the finished goods stock value in the general ledger as at 31st March 2014.This difference has been written off in the financial statements for the year ended 31st March 2014.
Group Company
For the year ended 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
8. NET FINANCE COSTS
8.1 Finance Income
Interest Income 1,166,742 6,657,304 1,166,742 6,657,304
Net Exchange Gain 7,306,162 22,749,084 7,514,218 22,395,193
8,472,904 29,406,388 8,680,960 29,052,497
Notes to the Financial Statements
42Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
For the year ended 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
8.2 Finance Costs
Interest on - Overdraft 17,307,132 15,493,496 6,859,798 6,371,973
- Lease 1,474,000 2,541,272 1,474,000 2,541,272
- Import Demand Loans 123,437,706 141,777,564 116,652,817 136,760,055
- Bank Loans 33,832,779 27,948,125 20,942,493 16,311,279
176,051,617 187,760,457 145,929,108 161,984,579
Net Finance Costs 167,578,713 158,354,069 137,248,148 132,932,082
9. INCOME TAx ExPENSE
Income Tax for the year (Note 9.1) - - - -
Deferred Tax Charge / (Reversal) for the year (Note 24) (69,790,587) 4,556,107 (83,541,215) 1,740,666
(69,790,587) 4,556,107 (83,541,215) 1,740,666
9.1 Reconciliation between the accounting Profit/(Loss) and Tax Expense
Profit/(Loss) before Tax (376,269,221) (20,005,638) (353,607,420) 16,887,213
Aggregate Disallowed Income (8,439,582) (10,502,736) (8,439,582) (10,502,736)
Aggregate Disallowable Expenses 177,676,721 96,652,956 164,548,359 89,416,264
Aggregate Allowable Expenses (166,289,326) (162,598,807) (121,122,138) (126,252,442)
Taxable Loss (373,321,408) (96,454,225) (318,620,781) (30,451,701)
Income from Other Sources 1,191,877 7,155,130 1,191,877 7,155,130
Total Statutory Income 1,191,877 7,155,130 1,191,877 7,155,130
Tax Loss Claimed (417,157) (2,504,296) (417,157) (2,504,296)
Qualifying Payments (774,720) (4,650,835) (774,720) (4,650,835)
Taxable Income/(Loss) - - - -
Tax on Exports @ 12% ( 2013 - 12%) - - - -
Tax on Balance Income @ 28% - - - -
- - - -
9.2 Accumulated Tax Losses
Balance as at 1st April 27,946,811 - 27,946,811 -
Adjustments 3,700,069 - 3,700,069 -
Tax Loss for the year 318,620,781 30,451,107 318,620,781 30,451,107
Tax Loss set off During the year (417,157) (2,504,296) (417,157) (2,504,296)
Balance as at 31st March 349,850,504 27,946,811 349,850,504 27,946,811
Sierra Cables PLC
In terms of Section 52 of Inland Revenue Act No. 10 of 2006, the profit from exports of Sierra Cables PLC is taxable at the rate of 12% and other profits and income are taxable at the rate of 28%.
Sierra Industries (Private) Limited
As per the section 16 (c) (1) and (2) of the Inland Revenue (Amendment) Act No. 22 of 2011 as amended by Act No. 08 of 2012, the Sierra Industries (Private) Limited’s profits and income (Other than any profits and income from the sale of any capital asset) shall be exempted from income tax for a period of six years
43Sierra Cables PLC • Annual Report 2013/14
9. INCOME TAx ExPENSE (Continued)
Sierra Power (Private) Limited
The Company has entered into an agreement with board of investment in Sri Lanka on 19th August 2013. According to the said agreement the Company shall qualify for a tax exemption period of 7 years in terms of the Sec. 17A of the Inland Revenue Act No. 10 of 2006 as amended by Inland Revenue Act No. 08 of 2012 subject to the investment made by the Company to the project over Rs. 500Mn or its equivalent in United State Dollars within a period to 24 months from the date of the agreement. The above investment should be made in fixed assets.
10. BASIC EARNING/(LOSS) PER SHARE
Basic Earnings/(Loss) per share is calculated based on the profit/(Loss) after taxation attributable to the ordinary shareholders divided by the weighted average number of ordinary shares outstanding during the year.
Group CompanyFor the year ended 31st March 2014 2013 2014 2013
Profits/(Loss) attributable to ordinary shareholders (Rs.) (290,881,814) (12,693,539) (270,066,205) 15,146,547
Weighted average number of ordinary shares 537,512,430 537,512,430 537,512,430 537,512,430
Basic Earnings/(Loss) per share (Rs.) (0.54) (0.02) (0.50) 0.03
Notes to the Financial Statements
44Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
11.
PRO
PERT
Y, P
LAN
T A
ND
EQ
UIP
MEN
T
As a
t 31s
t Mar
ch, 2
014
Lan
d
Bui
ldin
gs
Pla
nt a
nd
Mac
hine
ry M
otor
Vehi
cle
Lea
sed
Mot
or
Veh
icle
Furn
itur
e an
dFi
ttin
gs
Fac
tory
E
quip
men
t
Offi
ce &
C
ompu
ter
Equ
ipm
ent
Cap
ital
W
ork
in
Pro
gres
s
Tot
al
2014
Tot
al
2013
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
11.1
Com
pany
Cost
/ Re
valu
ed A
mou
nt
Bala
nce
as a
t 1st
Apr
il 9
8,97
7,50
1 3
11,0
28,3
99
542
,232
,534
2
6,79
1,74
0 2
1,77
9,60
3 3
,527
,839
2
9,71
0,98
3 1
6,51
3,46
0 5
11,3
44
1,0
51,0
73,4
03
1,0
29,0
28,7
11
Addi
tions
Dur
ing
the
year
-
-
466
,089
-
-
1
19,0
04
103
,054
1
,020
,715
1
,091
,365
2
,800
,227
3
4,29
2,90
9
Tran
sfer
s D
urin
g th
e ye
ar -
1
,131
,712
-
-
-
-
-
-
(1
,131
,712
) -
-
Dis
posa
ls D
urin
g th
e ye
ar -
-
-
(1
,583
,584
) (1
,708
,473
) -
-
-
-
(3
,292
,057
) (2
,167
,208
)
Tran
sfer
s to
Sub
sidi
ary
-
-
-
-
-
-
-
-
-
-
(44,
617,
000)
Off
set o
f Dep
reci
atio
n on
Rev
alue
d As
sets
-
-
-
-
-
-
-
-
-
-
(301
,743
,210
)
Recl
assi
ficat
ion
to A
sset
Hel
d fo
r Sa
le -
-
-
-
-
-
-
-
-
-
(9
3,79
5,81
0)
Reva
luat
ion
Dur
ing
the
year
-
-
-
-
-
-
-
-
-
-
430
,075
,011
Bala
nce
as a
t 31
st M
arch
98,
977,
501
312
,160
,111
5
42,6
98,6
23
25,
208,
156
20,
071,
130
3,6
46,8
43
29,
814,
037
17,
534,
175
470
,997
1
,050
,581
,573
1
,051
,073
,403
Dep
reci
atio
n
Bala
nce
as a
t 1st
Apr
il
-
7,6
43,0
03
19,
799,
324
22,
591,
162
13,
140,
666
2,1
90,2
97
20,
825,
047
10,
775,
635
- 9
6,96
5,13
4 3
97,0
02,6
81
Char
ge fo
r th
e ye
ar -
1
5,57
2,96
9 3
9,64
7,14
4 2
,394
,957
2
,460
,265
4
46,3
87
3,1
95,1
53
1,9
49,8
32
- 6
5,66
6,70
7 7
2,81
8,92
6
On
Dis
posa
l -
-
-
(1
,102
,608
) (1
,509
,152
) -
-
-
-
(2,6
11,7
60)
(832
,689
)
Recl
assi
ficat
ion
to A
sset
Hel
d fo
r Sa
le -
-
-
-
-
-
-
-
-
-
(70,
280,
574)
Off
set o
f Dep
reci
atio
n on
Rev
alue
d As
sets
-
-
-
-
-
-
-
-
- -
(3
01,7
43,2
10)
Bala
nce
as a
t 31
st M
arch
-
23,
215,
972
59,
446,
468
23,
883,
511
14,
091,
779
2,6
36,6
84
24,
020,
200
12,
725,
467
- 1
60,0
20,0
81
96,
965,
134
Net
Boo
k Va
lue
Bala
nce
as a
t 31s
t Mar
ch 2
013
98,
977,
501
303
,385
,396
5
22,4
33,2
10
4,2
00,5
78
8,6
38,9
37
1,3
37,5
42
8,8
85,9
36
5,7
37,8
25
511
,344
-
954
,108
,269
Bala
nce
as a
t 31
st M
arch
201
4 9
8,97
7,50
1 2
88,9
44,1
39 4
83,2
52,1
55 1
,324
,645
5
,979
,351
1
,010
,159
5
,793
,837
4
,808
,708
4
70,9
97
890
,561
,492
-
45Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
11.
PRO
PERT
Y, P
LAN
T A
ND
EQ
UIP
MEN
T (C
ON
TIN
UED
)
As a
t 31s
t Mar
ch, 2
014
Lan
d
Bui
ldin
gs
Pla
nt a
nd
Mac
hine
ry M
otor
Vehi
cle
Lea
sed
Mot
or
Veh
icle
Furn
itur
e an
dFi
ttin
gs
Fac
tory
E
quip
men
t
Offi
ce &
C
ompu
ter
Equ
ipm
ent
Cap
ital
W
ork
in
Pro
gres
s
Tot
al
2014
Tot
al
2013
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
11.2
Gro
up
Cost
/ Re
valu
atio
n
Bala
nce
as a
t 1st
Apr
il 1
45,2
94,7
99
311
,812
,855
6
42,4
27,6
47
33,
089,
936
21,
779,
603
4,0
70,8
70
32,
514,
036
18,
870,
758
80,
753,
036
1,2
90,6
13,5
40
1,1
69,2
84,1
59
Addi
tions
Dur
ing
the
year
-
-
-
-
-
131
,470
1
03,0
54
1,1
52,0
22
103
,611
,093
1
04,9
97,6
39
111
,587
,158
Addi
tions
Due
to A
cqui
sitio
n of
Sub
sidi
ary
21,
997,
440
Tran
sfer
s D
urin
g th
e ye
ar -
4
9,04
6,88
1 2
3,30
4,35
1 -
-
-
-
-
(7
2,35
1,23
2) -
-
Dis
posa
ls D
urin
g th
e ye
ar -
-
-
(1
,583
,584
) (1
,708
,473
) -
-
-
-
(3
,292
,057
) (2
,174
,208
)
Tran
sfer
s to
Sub
sidi
ary
-
-
-
-
-
-
-
-
-
-
(44,
617,
000)
Off
set o
f Dep
reci
atio
n on
Rev
alue
d As
sets
-
-
-
-
-
-
-
-
-
-
(301
,743
,210
)
Recl
assi
ficat
ion
to A
sset
Hel
d fo
r Sa
le -
-
-
-
-
-
-
-
-
-
(9
3,79
5,81
0)
Reva
luat
ion
Dur
ing
the
year
-
-
-
-
-
-
-
-
-
-
430
,075
,011
Bala
nce
as a
t 31
st M
arch
145
,294
,799
360
,859
,736
6
65,7
31,9
98
31,
506,
352
20,
071,
130
4,2
02,3
40
32,
617,
090
20,
022,
780
112
,012
,897
1
,392
,319
,122
1
,290
,613
,540
Dep
reci
atio
n
Bala
nce
as a
t 1st
Apr
il -
7
,652
,809
2
4,95
8,34
5 2
7,99
9,25
2 1
3,14
0,65
6 2
,558
,637
2
2,47
3,28
1 1
2,74
8,85
3 -
1
11,5
31,8
33
404
,570
,712
Addi
tions
Due
to A
cqui
sitio
n of
Sub
sidi
ary
- -
-
-
-
-
-
-
-
-
1
1,33
2
Char
ge fo
r th
e ye
ar -
1
6,20
9,71
6 4
8,02
1,00
4 2
,590
,721
2
,460
,265
4
88,5
02
5,2
07,4
50
2,0
54,5
48
-
77,
032,
206
79,
806,
262
On
Dis
posa
l -
-
-
(1
,102
,608
) (1
,509
,152
) -
-
-
-
(2
,611
,760
) (8
32,6
89)
Recl
assi
ficat
ion
to A
sset
Hel
d fo
r Sa
le -
-
-
-
-
-
-
-
-
-
(7
0,28
0,57
4)
Off
set o
f Dep
reci
atio
n on
Rev
alue
d As
sets
-
-
-
-
-
-
-
-
-
-
(301
,743
,210
)
Bala
nce
as a
t 31
st M
arch
-
23,
862,
525
72,
979,
349
29,
487,
365
14,
091,
769
3,0
47,1
39
27,
680,
731
14,
803,
401
-
185
,952
,279
1
11,5
31,8
33
Net
Boo
k Va
lue
Bala
nce
as a
t 31s
t Mar
ch 2
013
145
,294
,799
3
04,1
60,0
46
617
,469
,302
5
,090
,684
8
,638
,947
1
,512
,233
1
0,04
0,75
5 6
,121
,905
8
0,75
3,03
6 -
1,1
79,0
81,7
07
Bala
nce
as a
t 31
st M
arch
201
4 1
45,2
94,7
99
336
,997
,211
5
92,7
52,6
49
2,0
18,9
87
5,9
79,3
61
1,1
55,2
01
4,9
36,3
59
5,2
19,3
79
112
,012
,897
1
,206
,366
,843
-
46Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
11. PROPERTY, PLANT AND EQUIPMENT (Continued)
11.3 Details of Property, Plant and Equipment of the Group Stated at Valuation are Indicated below:
PropertyLocation
Method of Valuation
EffectiveDate of
Valuation
Valuer LandExtent
Carrying Value of Revalued Assets as at 31st March 2014 if carried at
Historical Cost
Carrying Value of Revalued Assetsas at 31st March
2014
Rs. Rs.
Land, buildings, Plant and machinery at Sierra Cables PLC Galvarusa Road, Korathota (within the limits of Kaduwela Pradeshiya Sabha)
Market Approach
31st March 2013
Mr. K. Arthur Perera A.M.I.V. (Sri Lanka) Valuer & Consultant
5.6375 444,497,571 1,073,374,484
444,497,571 1,073,374,484
11.4 Carrying Value of Property, Plant and Equipment
As at 31st March As at 31st March
2014 2013Rs. Rs.
At Cost 132,992,359 112,157,560
At Valuation 1,073,374,484 1,066,924,147
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
12. INTANGIBLE ASSETS
Cost
Balance as at 1st April 10,498,876 10,018,876 10,498,876 10,018,876
Addition during the year 140,516 480,000 140,516 480,000
Balance as at 31st March 10,639,392 10,498,876 10,639,392 10,498,876
Amortization Charge
Balance as at 1st April 6,448,316 4,377,876 6,448,316 4,377,876
Charge for the year 2,103,351 2,070,440 2,103,351 2,070,440
Balance as at 31st March 8,551,667 6,448,316 8,551,667 6,448,316
Written Down Value as at 31st March 2,087,725 4,050,560 2,087,725 4,050,560
Intangible assets represents the cost of computer software acquired by the company.
47Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
13. Investment Property
Balance as at 1st April 32,854,000 32,854,000 32,854,000 32,854,000
Disposals During the year (16,427,000) - (16,427,000) -
Balance as at 31st March 16,427,000 32,854,000 16,427,000 32,854,000
Depreciation
Balance as at 1st April 1,642,700 - 1,642,700 -
Charge for the year 1,163,580 1,642,700 1,163,580 1,642,700
Disposals During the year (1,163,579) - (1,163,579) -
Balance as at 31st March 1,642,701 1,642,700 1,642,701 1,642,700
Carrying Value as at 31st March 14,784,299 31,211,300 14,784,299 31,211,300
The Investment Property consisted of two apartments in Fairfield Residencies a Condominium Property situated in Colombo 8 having a floor area of 1,720 sq.ft. The Company has disposed one of the apartment at a price of Rs.15,000,000/-. The Fair Value of the remaining property as at 31st March 2014 is Rs.22,000,000/- (As at 31st March 2013, Rs.16,500,000/- per apartment).
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
14. INVESTMENTS IN SUBSIDIARIES
Sierra Power (Private) Limited - - 86,680,010 880,010
Sierra Industries (Private) Limited - - 91,000,010 70,000,010
- - 177,680,020 70,880,020
Provision for Impairment (Note 14.1) - - (17,000,000) -
- - 160,680,020 70,880,020
14.1 Provision for Impairment
Sierra Industries (Private) Limited - - 15,000,000 -
Sierra Power (Private) Limited - - 2,000,000 -
- - 17,000,000 -
14.2 Goodwill on Acquisition
Balance as at 31st April 329,300 329,300 - -
Impairment During the year (329,300) - - -
Balance as at 31st March - 329,300 - -
48Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
15. Investments in Associates
Tea Leaf Resort Holdings (Private) Limited (Note 15.1) - 198,190 2,500,000 2,500,000
T & G Lanka (Private) Limited (Note 15.2) 2,689,197 2,587,355 3,300,000 3,300,000
2,689,197 2,785,545 5,800,000 5,800,000
15.1 Tea Leaf Resort Holdings (Private) Limited
Cost of the Investment 2,500,000 2,500,000 2,500,000 2,500,000
Share of Loss for the year (Net of Income Tax) (198,190) (25,499) - -
Accumulated Share of Loss (2,500,000) (2,301,810) - -
Net Asset Value of Associate as at 31 March - 198,190 2,500,000 2,500,000
15.2 T & G Lanka (Private) Limited
Cost of the Investment 3,300,000 3,300,000 3,300,000 3,300,000
Share of Loss for the year (Net of Income Tax) 101,842 360 - -
Accumulated Share of Loss (610,803) (712,645) - -
Net Asset Value of Associate as at 31st March 2,689,197 2,587,355 3,300,000 3,300,000
15.3 Summarized Financial Information of Associates
T & G Lanka(Private) Limited
Tea Leaf Resort Holdings (Private) Limited
2014 2013 2014 2013Rs. Rs. Rs. Rs.
Revenue 14,513,706 11,009,441 - -
Profit/(Loss) After Tax 363,723 (5,020,518) (710,896) (50,977)
Assets 26,482,565 15,317,514 7,202,353 7,510,853
Liabilities 14,958,153 8,457,932 7,516,848 7,114,452
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
16 AVAILABLE FOR SALE INVESTMENTS
16.1 Investment in Equity Securities
National Development Bank PLC 3,624,750 3,341,250 3,624,750 3,341,250
Richard Pieris Exports PLC 570,781 68,369 570,781 68,369
ACL Cables PLC 12,200 13,100 12,200 13,100
Central Industries PLC 89,862,664 99,033,625 89,862,664 99,033,625
DFCC Bank PLC 1,430,000 1,311,000 1,430,000 1,311,000
Chevron Lubricants PLC 486,048 2,170,000 486,048 2,170,000
NDB Aviva Growth Fund Investment in Units 16,965,130 15,827,814 16,965,130 15,827,814
112,951,573 121,765,158 112,951,573 121,765,158
16.2 Investment in Treasury Bills
Treasury Bills - 53,134,656 - 53,134,656
- 53,134,656 - 53,134,656
49Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
17. Inventories
Raw Materials 89,660,017 95,191,445 73,380,869 84,778,234
Work in Progress 88,157,985 299,962,829 88,157,985 299,962,829
Finished Goods 370,332,692 595,893,623 339,558,708 571,693,109
Packing Materials 9,309,582 7,273,759 9,309,582 7,273,759
Stationeries 1,934,792 2,170,657 1,934,792 2,170,657
Engineering Items 28,503,836 25,996,607 28,503,836 25,996,607
Tool Boxes - 2,405,126 - 2,405,126
Goods in Transit 24,107,276 - 24,107,276 -
612,006,180 1,028,894,046 564,953,048 994,280,321
Less: Provision for Obsolete Inventories (Note 17.1) - (2,000,000) - (2,000,000)
612,006,180 1,026,894,046 564,953,048 992,280,321
17.1 Provision for Obsolete Inventories
Balance as at 1st April 2,000,000 2,000,000 2,000,000 2,000,000
Written off During the year (2,000,000) - (2,000,000) -
Balance as at 31st March - 2,000,000 - 2,000,000
18. TRADE AND OTHER RECEIVABLES
Trade Receivables 866,449,120 768,532,119 790,461,281 720,675,007
Less: Provision for Impairment (Note 18.1) (90,402,204) (68,765,886) (90,402,204) (68,765,886)
776,046,916 699,766,233 700,059,077 651,909,121
Other Receivables 41,746,428 11,014,231 - -
VAT Receivable 130,202,234 165,169,729 104,145,860 154,429,235
Deposits, Prepayments and Advances 39,311,532 16,737,610 21,403,804 11,229,362
987,307,110 892,687,803 825,608,741 817,567,718
Less: Provision for Impairment (37,000,000) (22,000,000) (37,000,000) (22,000,000)
950,307,110 870,687,803 788,608,741 795,567,718
18.1 Provision for Impairment of Trade Receivables
Balance as at 1st April 68,765,886 70,794,613 68,765,886 70,794,613
Impairment for the year 21,636,318 (2,028,727) 21,636,318 (2,028,727)
Balance as at 31st March 90,402,204 68,765,886 90,402,204 68,765,886
18.2 Provision for Impairment of Other Receivables
Balance as at 1st April 22,000,000 22,000,000 22,000,000 22,000,000
Impairment for the year 15,000,000 - 15,000,000 -
Balance as at 31st March 37,000,000 22,000,000 37,000,000 22,000,000
50Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
19. ASSET HELD FOR SALE
Balance as at 1st April 21,000,000 - 21,000,000 -
Transferred During the year - 23,515,236 - 23,515,236
Impairment Loss for the year - (2,515,236) - (2,515,236)
Balance as at 31st March 21,000,000 21,000,000 21,000,000 21,000,000
The Company has classified part of its Plant and Machinery as Non Current Asset Held for Sale during the previous year, following the decision by Board of The Directors to dispose the same. Effort to sell the Plant and Machinery was commenced during the previous financial year and Directors are of the opinion that they still commit to the initial decision to sell the assets and actively involved in the same as at the end of the reporting period. Further Directors are of the opinion that, there is no further impairment on the carrying amount of the asset as at 31st March 2014.
Group Company
2014 2013 2014 2013Rs. Rs. Rs. Rs.
20. AMOUNTS DUE FROM RELATED COMPANIES
Non-Trading
Sierra Civil Engineering & Construction (Private) Limited 2,785,000 3,985,000 2,785,000 3,985,000
Sierra Power (Private) Limited - - 15,478,664 4,752,730
Sierra Industries (Private) Limited - - 49,540,078 11,982,506
2,785,000 3,985,000 67,803,742 20,720,236
Trading
Sierra Electrical Engineering (Private) Limited 616,785 616,785 616,785 616,785
Sierra Information Technologies (Private) Limited 459,781 - 459,781 -
Sierra Global Network (Private) Limited 2,393,006 2,393,056 2,393,006 2,393,056
Sierra Readymix (Private) Limited 138,281 107,203 138,281 107,203
Sierra Water Works (Private) Limited - 19,688 - 19,688
Sierra Construction (Private) Limited 63,088,011 64,794,757 63,088,011 64,794,757
Sierra Civil Engineering & Construction (Private) Limited - 345,572 - 345,572
Sierra Property Development (Private) Limited - 48,070 - 48,070
66,695,864 68,325,131 66,695,864 68,325,131
Total 69,480,864 72,310,131 134,499,606 89,045,367
21. CASH AND CASH EQUIVALENTS
Favorable Balances
Cash in Hand and at Bank 10,421,297 16,080,412 10,257,327 15,776,180
10,421,297 16,080,412 10,257,327 15,776,180
Unfavorable Balances
Bank Overdraft (128,080,471) (73,766,597) (60,502,218) (15,286,449)
Cash and Cash Equivalents for Cash Flow Purposes (117,659,174) (57,686,185) (50,244,891) 489,731
22. STATED CAPITAL
537,512,430 Ordinary Shares 894,565,898 894,565,898 894,565,898 894,565,898
894,565,898 894,565,898 894,565,898 894,565,898
51Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
23. RETIREMENT BENEFIT OBLIGATIONS
Balance as at 1st April 14,874,524 13,836,105 14,874,524 13,836,105
Current Service Cost 2,814,191 1,931,884 2,814,191 1,931,884
Interest Charge for the year 2,039,310 1,521,970 1,784,942 1,521,970
Actuarial (Gain)/Loss 3,206,397 (1,913,910) 2,932,157 (1,913,910)
Payments During the year (781,100) (501,525) (781,100) (501,525)
Balance as at 31st March 22,153,322 14,874,524 21,624,714 14,874,524
23.1 The total amount charged to Statement of Comprehensive Income in respect of Retirement Benefit Obligations made up as follows;
Group Company
2014 2013 2014 2013As at 31st March Rs. Rs. Rs. Rs.
Current Service Cost 2,814,191 1,931,884 2,814,191 1,931,884
Interest Cost 2,039,310 1,521,970 1,784,942 1,521,970
4,853,501 3,453,854 4,599,133 3,453,854
Actuarial (Gain)/Loss 3,206,397 (1,913,910) 2,932,157 (1,913,910)
Expense recognised in Other Comprehensive Income 3,206,397 (1,913,910) 2,932,157 (1,913,910)
23.2 An Actuarial Valuation of the Retirement Benefit Obligations of the company was carried out as at 31st March 2014, by Messrs M. Poopalanathan, a firm of Professional Actuaries. The valuation was carried out as per the “Projected Unit Credit” (PUC) method.
As at 31st March 2014 2013
Expected Annual Average Salary Increment 10% 10%
Discount Rate 10% 12%
Retirement Age 55 Years 55 Years
Mortality A 67/70 Mortality Table issued by the Institute of Actuaries, London
Resignation Rate 1.7% for age up to 49 and thereafter zero.
23.3 The calculation of the retirement benefit obligation is sensitive to the assumptions set out above. The following table summarizes how the impact on the defined benefit obligation at the end of the reporting period would have increased/(decreased) as a result of a change in the respective assumptions by one percent.
Group Company
Defined Benefit Obligation Defined Benefit Obligation
OnePercentage
Point Increase
OnePercentage
Point Decrease
OnePercentage
Point Increase
OnePercentage
Point Decrease
Rs. Rs. Rs. Rs.
Effect on the Discounting Rate (2,570,292) 1,900,446 (2,041,684) 2,429,054
Effect on the Salary Escalation Rate 1,941,144 (2,637,626) 2,469,752 (2,109,018)
(629,148) (737,180) 428,068 320,036
52Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
24. DEFERRED TAx LIABILITY
Balance as at 1st April 155,529,230 53,303,446 152,713,789 53,303,446
Provision/(Reversal) for the year (Note 24.2) (70,684,531) 102,225,784 (84,358,700) 99,410,343
Balance as at 31st March 84,844,699 155,529,230 68,355,089 152,713,789
As at 31st March 2014 2013
Temporary Difference
Tax Effect
Temporary Difference
Tax Effect
Rs. Rs. Rs. Rs.
24.1 The Deferred Tax Liability is Attributable to the Followings
Company
On Property, Plant and Equipment 616,614,378 171,937,974 588,593,439 164,681,712
On Retirement Benefit Obligations (21,264,714) (6,029,878) (14,874,524) (4,157,207)
On Accumulated Tax Losses (349,850,504) (97,553,007) (27,946,811) (7,810,716)
245,499,160 68,355,089 545,772,104 152,713,789
Group
On Property, Plant and Equipment 675,674,449 188,475,594 598,648,585 167,497,153
On Retirement Benefit Obligations (22,153,322) (6,077,888) (14,874,524) (4,157,207)
On Accumulated Tax Losses (349,850,504) (97,553,007) (27,946,811) (7,810,716)
303,670,623 84,844,699 555,827,250 155,529,230
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
24.2 Deferred Tax Liability - Provision/(Reversal)
Provision/(Reversal) for the year
Statement of Comprehensive Income (69,790,587) 4,556,107 (83,541,215) 1,740,666
Other Comprehensive Income (893,944) 97,669,677 (817,485) 97,669,677
(70,684,531) 102,225,784 (84,358,700) 99,410,343
25. LONG TERM LOANS
Balance as at 1st April 271,644,387 88,639,433 151,198,587 48,749,972
On Acquisition of Subsidiary - 20,000,000 - -
Loans Obtained During the year 30,000,000 211,740,611 30,000,000 149,882,711
Repayments During the year (55,507,785) (48,735,657) (39,424,666) (47,434,096)
Balance as at 31st March 246,136,602 271,644,387 141,773,921 151,198,587
Amount Payable within one year 63,292,945 54,158,846 43,000,700 37,758,056
Amount Payable After one year 182,843,657 217,485,541 98,773,221 113,440,531
53Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
26. LEASE LIABILITIES
Balance as at 1st April 14,319,722 17,874,720 14,319,722 17,874,720
Lease Obtained During the year - 3,982,610 - 3,982,610
14,319,722 21,857,330 14,319,722 21,857,330
Rentals Paid During the year (7,330,174) (7,537,608) (7,330,174) (7,537,608)
Gross Lease Liability 6,989,548 14,319,722 6,989,548 14,319,722
Less: Interest in Suspense (751,060) (2,225,060) (751,060) (2,225,060)
Total Liability at the End of the year 6,238,488 12,094,662 6,238,488 12,094,662
Amount Payable Within one year 3,480,568 5,859,816 3,480,568 5,859,816
Amount Payable After one year 2,757,920 6,234,846 2,757,920 6,234,846
27. TRADE AND OTHER PAYABLES
Trade Creditors 293,957,193 305,366,389 266,818,825 288,416,370
Other Payables 52,698,428 21,964,604 23,712,498 8,175,125
Taxes Payable 45,695,878 42,475,646 45,695,878 42,475,646
392,351,499 369,806,639 336,227,201 339,067,141
28. IMPORT DEMAND LOAN
Balance as at 1st April 843,276,728 647,131,258 796,596,321 645,866,663
Loans Obtained During the year 1,770,105,539 1,713,988,482 1,637,543,835 1,668,572,670
Repayments During the year (1,842,347,291) (1,517,843,012) (1,755,993,422) (1,517,843,012)
Balance as at 31st March 771,034,976 843,276,728 678,146,734 796,596,321
29. CONTINGENT LIABILITIES
There were no material contingent Liabilities as at the reporting date which require adjustments to or disclosure in the Financial Statements.
30. COMMITMENTS
There were no material capital commitments as at the reporting date.
31. EVENTS OCCURRING AFTER THE REPORTING PERIOD
There were no material events occurring after the reporting period that require adjustments to or disclosure in the Financial Statements.
54Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
32. ASSETS PLEDGED AS SECURITY AND REPAYMENT TERMSThe following assets have been pledged as securities against the long term and short term borrowings that have been disclosed in Notes 25, 26 and 29 to the financial statement respectively.
Name of the Bank Assets Pledged Facility Obtained Interest Rate Repayment Terms
Commercial Bank of Ceylon PLC
Overdraft of Rs.40 Mn PLR+1.5% p a -
1. A Primary Mortgage Numbered 3627 Valued at 550 Mn secured upon Land and Buildings and Plant and Machinery at 39/1A Galavarusa Road, Korathota and stocks and books of debt valued at Rs.490 Mn dated 13/1/2012.
Letter of Credit Facility for Rs. 400 Mn Combined Facility for the grant of Import Demand Loan and release of Document against Acceptance Rs.1,000 Mn.
AWPLR+1.75% p a
AWPLR+1.5% p a
Repayable over 180 days
Repayable over 180 days
2. A Primary Mortgage No. FCC/11/140 Valued at Rs.35 Mn as at 13/1/2012 secured upon Tribular Strander / Rewinding Machine.
Term Loan (1) of Rs.35 Mn.
AWPLR+2% p a 49 monthly Installments
3. A Primary Mortgage No.FCC/11/141 secured upon 160mm Bow Standing Machine and 8 Wire Drawing and anncaling Line.
Term Loan (2) of Rs.20 Mn.
AWPLR+2% p a 22 monthly Installments
Term Loan (3) of Rs.114 Mn.
AWPLR+2% p a 56 monthly Installments
Term Loan of Rs.30 Mn.
AWPLR+2% p a 36 monthly Installments
Sampath Bank PLC A Promissory Note Valued at Rs.10 Mn.
Temporary Overdraft of Rs.10 Mn.
15% p a 120 days from the date of grant
55Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
33.
RELA
TED
PA
RTY
DIS
CLO
SURE
33.1
Tran
sact
ions
wit
h Re
late
d Pa
rtie
s
Nam
e of
the
Com
pany
Nat
ure
of t
he T
rans
acti
ons
Tran
sact
ion
Valu
e Ye
ar E
nded
31s
t M
arch
Bala
nce
Out
stan
ding
as a
t 31
st M
arch
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Tran
sact
ions
wit
h Su
bsid
iary
Com
pani
esSi
erra
Pow
er (P
riva
te) L
imite
dAm
ount
Pai
d fo
r Ca
pita
l Exp
ense
s 5
3,00
0,00
0 3
,872
,730
1
5,47
8,66
4 4
,752
,730
To
tal A
mou
nt P
aid
for
othe
r Ca
pita
l Exp
ense
s 4
2,04
5,52
4 -
--
Tota
l Am
ount
Pai
d fo
r th
e Ad
min
istr
atio
n Ex
pens
es 1
,480
,410
-
--
Equi
ty S
hare
s Al
loca
ted
Agai
nst t
he P
aid
Expe
nses
(85,
800,
000)
880
,010
-
-
Sier
ra In
dust
ries
(Pri
vate
) Lim
ited
Tota
l Am
ount
Pai
d fo
r th
e Ex
pens
e 1
8,93
4,32
0 5
,877
,698
4
9,54
0,07
8 1
1,98
2,50
6 La
nd T
rans
fer
Agai
nst t
he In
vest
men
t -
4
4,61
7,00
0 -
-Fu
nds
Rece
ived
from
Sie
rra
Cabl
es C
usto
mer
s (3
76,7
48)
--
-Eq
uity
Sha
res
Allo
cate
d Ag
ains
t the
Pai
d Ex
pens
es (1
1,00
0,00
0)-
--
Fund
s pa
id fo
r Eq
uity
inve
stm
ent
(10,
000,
000)
--
-Lo
an G
rant
ed D
urin
g th
e Pe
riod
40,
000,
000
--
-
Tran
sact
ions
wit
h O
ther
Rel
ated
Com
pani
esSi
erra
Pro
pert
y &
Dev
elop
men
t (Pr
ivat
e) L
imite
dSe
ttle
men
t of I
nvoi
ces
(48,
070)
--
48,
070
Sier
ra C
onst
ruct
ion
(Pri
vate
) Lim
ited
Sale
of G
oods
122
,257
,383
11
1,41
2,85
2 6
3,08
8,01
1 6
4,79
4,75
7 Se
ttle
men
t of I
nvoi
ces
(123
,964
,129
) (1
08,8
05,5
10)
--
Sier
ra C
ivil
Engi
neer
ing
and
Cons
truc
tion
(Pri
vate
) Lim
ited
Loan
Set
tlem
ent
(1,2
00,0
00)
(900
,000
) 2
,785
,000
3
,985
,000
Sa
le o
f Goo
ds 1
6,31
5 5
64,5
77
-
345
,572
Se
ttle
men
t of I
nvoi
ces
(361
,887
) (6
41,0
20)
--
Sier
ra E
lect
rica
l Eng
inee
ring
(Pri
vate
) Lim
ited
Sale
of G
oods
--
616
,785
6
16,7
85
Sier
ra G
loba
l Net
wor
ks (P
riva
te) L
imite
dSa
le o
f Goo
ds-
741
,249
2
,393
,006
2
,393
,056
Se
ttle
men
t of I
nvoi
ces
(50)
(912
,412
)-
-
Sier
ra In
form
atio
n Te
chno
logi
es (P
riva
te) L
imite
dSa
le o
f Goo
ds 4
59,7
81
- 4
59,7
81
-
Sier
ra W
ater
Wor
ks (P
riva
te) L
imite
dSa
le o
f Goo
ds -
4
91,8
17
- 1
9,68
8 Se
ttle
men
t of I
nvoi
ce (1
9,68
8) (9
94,3
53)
- -
Sier
ra R
edim
ix (P
riva
te) L
imite
dSa
le o
f Goo
ds 1
57,6
27
602
,517
1
38,2
81
107
,203
Se
ttle
men
t of I
nvoi
ce (1
26,5
49)
(495
,314
)-
-
56Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
33.2 Transactions with Key Management Personnel
Key Management personnel are those having authority and responsibility for planning, directing and controlling the activities of the Group. Accordingly the Directors of the Company (including Executive and Non-Executive Directors) have been classified as Key Management personnel of the Company, Group.
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
Directors' Fees 8,250,000 4,950,000 7,050,000 4,250,000
Short term Employee Benefits 31,279,500 6,310,000 31,279,500 6,310,000
39,529,500 11,260,000 38,329,500 10,560,000
The Directors’ Fees and Short Term Employee benefits for the year ended 31st March 2014 include the directors’ fees and emoluments paid but not accounted for during the previous periods as explained in Note 7.1 to the financial statements. These have now been recognized in the financial statements for the year ended 31st March 2014.
34. CONTRACTUAL AGREEMENT WITH SUPPLIER OF SIERRA POWER (PRIVATE) LIMITED.
Sierra Cables PLC has made a payment of Rs.53,000,000/- on behalf of its subsidiary, Sierra Power (Private) Limited to one of its main contractor during the year ended 31st March 2014 . However the contractual agreement between this contractor and Sierra Power (Private) Limited had not been finalized until 4th June 2014, the date on which the financial statements of the subsidiary were authorized for issue by the Board of Directors.
35. GOING CONCERN
The Sierra Industries (Private) Limited, a subsidiary of the group has recorded accumulated losses of Rs.92, 956,323/- as at 31st March 2014. Further current liabilities of the subsidiary exceed its current assets by Rs.92,399,571/-. Further the subsidiary company is facing a serious loss of capital situation in terms of section 220 of the Companies Act No.7 of 2007. However the Directors of the subsidiary company have made an assessment of the Company’s ability to continue as a going concern and do not intend either to liquidate or cease trading.
36. FINANCIAL RISk MANAGEMENT
(i) Overview
The Group has exposure to the following risks from its use of financial instruments:
C Credit Risk
C Liquidity Risk
C Market Risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risks, and the Group’s management of capital.
(ii) Risk Management Framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyses the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Credit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations, and this principally arises from the Group’s receivables from customers.
57Sierra Cables PLC • Annual Report 2013/14
Notes to the Financial Statements
36. FINANCIAL RISk MANAGEMENT (CONTINUED)
(ii) Risk Management Framework (Continued)
Exposure to Credit Risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows;
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
Trade Receivables 776,046,916 699,766,233 700,059,077 651,909,121
Amounts Due from Related Companies 69,480,864 72,310,131 134,499,606 89,045,367
Balances with Banks 10,421,297 16,080,412 10,257,327 15,776,180
855,949,077 788,156,776 844,816,010 756,730,668
Trade Receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The management has established a credit policy under which each new customer is analysed individually for credit worthiness before the Group standard payment and delivery terms offered.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of Trade Receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.
The maximum exposure to credit risk for trade and other receivables is the carrying amounts at the end of the reporting period, and it is analysed by geographic regions as follows:
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
Local Debtors 836,687,468 744,878,364 760,699,629 697,021,452
Foreign Debtors 29,761,652 23,653,755 29,761,652 23,653,555
866,449,120 768,532,119 790,461,281 720,675,007
Provision for Impairment (90,402,204) (68,765,886) (90,402,204) (68,765,886)
776,046,916 699,766,233 700,059,077 651,909,121
Exposure to Currency Risk
The summarised quantitative data about the Group’s exposure to currency risk as reported to the Management of the Group based on its risk management policy was as follows:
Group Company
As at 31st March 2014 2013 2014 2013USD USD USD USD
Trade Receivables 226,144 198,353 226,144 198,353
Trade Payables (2,041,369) (2,315,414) (1,855,069) (2,193,289)
Net Statement of Financial Position Exposure (1,815,225) (2,117,061) (1,628,925) (1,994,936)
58Sierra Cables PLC • Annual Report 2013/14
36. FINANCIAL RISk MANAGEMENT (CONTINUED)
(ii) Risk Management Framework (Continued)
The following are the contractual maturities of financial liabilities.
As at 31st March 2014 CarryingAmount
0-6Months
6-12Months
More than 12 Months
Rs. Rs. Rs. Rs.
Non-Derivative Financial Liabilities
Trade and Other Payables 392,351,499 392,351,499 - -
Interest Bearing Borrowings 1,023,410,066 804,421,733 33,386,757 185,601,577
Bank Overdraft 128,080,471 128,080,471 - -
1,543,842,036 1,324,853,702 33,386,757 185,601,577
As at 31st March 2013 CarryingAmount
0-6Months
6-12Months
More than 12 Months
Rs. Rs. Rs. Rs.
Non-Derivative Financial Liabilities
Trade and Other Payables 369,806,639 369,806,639 - -
Interest Bearing Borrowings 1,127,015,777 871,600,015 30,548,347 224,867,415
Bank Overdraft 73,766,597 73,766,597 - -
1,570,589,013 1,315,173,251 30,548,347 224,867,415
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
(iii) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
(a) Currency Risk
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than Sri Lankan Rupees. The foreign currencies in which these transactions primarily denominated are United Stated Dollars (USD) and Euro.
Exposure to Currency Risk
As at 31st March 2014 2013USD USD
Trade Payables - Foreign Creditors 2,041,369 2,315,414
Gross Statement of Financial Position Exposure 2,041,369 2,315,414
The following significant exchange rates were applicable during the year
Average Rate Reporting Date Spot Rate
2014 2013 2014 2013Rs. Rs. Rs. Rs.
US Dollars 130.05 129.87 130.69 126.85
Notes to the Financial Statements
59Sierra Cables PLC • Annual Report 2013/14
36. FINANCIAL RISk MANAGEMENT (CONTINUED)
(iii) Risk Management Framework (Continued)
(a) Currency Risk (Continued)
Sensitivity Analysis
A strengthening of the Rs, as indicated below, against the USD at 31st March 2014 would have increased/ (decreased) the equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant.
Strengthening Weakening
Profit or Loss Profit or LossRs. Rs.
31st March 2014
USD (10% Movement) (26,679,652) 26,679,652
31st March 2013
USD (10% Movement) (29,371,675) 29,371,675
(b) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument fluctuate because of changes in market interest rates. The groups exposure to the risk of changes in market interest rates relates primarily to the Group’s long term debt obligation .The Group utilises various financial instruments to manage exposures to interest rate risks .
At the reporting date, the Group’s interest-bearing financial instruments were as follows:
Carrying AmountAs at 31st March 2014 2013
Rs. Rs.
Fixed Rate Instruments
Financial Assets
Treasury Bills - 53,134,656
Financial Liabilities
Lease Liabilities (6,238,488) (12,094,662)
(6,238,488) 41,039,994
Variable Rate Instruments
Financial Liabilities
Long Term Loans (246,136,602) (271,644,387)
Import Demand Loans (771,034,976) (843,276,728)
Bank Overdrafts 128,080,471 (73,766,597)
(1,150,846,212) (1,188,687,712)
Notes to the Financial Statements
60Sierra Cables PLC • Annual Report 2013/14
36. FINANCIAL RISk MANAGEMENT (CONTINUED)
(iii) Risk Management Framework (Continued)
(b) Interest Rate Risk (Continued)
Cash Flow Sensitivity Analysis for Variable Rate Instruments
The Group is exposed to changes in market interest rates through bank borrowings at variable interest rates.
Profit or Loss100 bp Increase 100 bp Decrease
As at 31st March 2014 Rs. Rs.
Variable Rate Instruments (1,150,846) 1,150,846
Cash Flow Sensitivity (Net) (1,150,846) 1,150,846
(iv) Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain share holder, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital and level of dividends to ordinary shareholders.
The Group’s Net Debt to adjusted Equity ratio at the end of the reporting period was as follows:
Group Company
As at 31st March 2014 2013 2014 2013Rs. Rs. Rs. Rs.
Total Liabilities 1,650,840,057 1,740,992,767 1,312,868,365 1,481,831,473
Less: Cash and Cash Equivalents (10,421,297) (16,080,412) (10,257,327) (15,776,180)
Net Debt 1,640,418,760 1,724,912,355 1,302,611,038 1,466,055,293
Total Equity 1,367,085,768 1,674,149,443 1,409,146,203 1,688,599,668
Net Debt to Equity Ratio 120% 100% 92% 84%
There were no changes in the Group’s approach to capital management during the year and the Group is not subject to externally imposed capital requirements.
(v) Fair Value Measurement
The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.
Level 1 : Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2 : Valuation techniques based on observable inputs.
Level 3 : Valuation techniques using significant unobservable inputs.
Notes to the Financial Statements
61Sierra Cables PLC • Annual Report 2013/14
36. FINANCIAL RISk MANAGEMENT (CONTINUED)
(vi) Financial Instruments Carried at Fair Value and Valuation Bases
The table below analyses financial instruments measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorized.
Company
As at 31st March 2014 Level 1 Level 2 Level 3 TotalRs. Rs. Rs. Rs.
Available for Sale Investments 112,951,573 - - 112,951,573
112,951,573 - - 112,951,573
(vii) Fair Value of Financial Instruments Carried at Amortized Cost
The following table summarizes the carrying amounts and the company’s estimate of fair values of those financial assets and liabilities not presented on the Company’s Statement of Financial Position at fair value.
2014
Carrying Amount
FairValue
Rs Rs
Assets 10,421,297 8,603,483
Cash and Cash Equivalents 950,307,110 949,821,912
Trade and Other Receivables 69,480,864 69,480,864
Amounts Due from Related Companies
Liabilities
Trade and Other Payables 392,351,499 379,939,522
Interest Bearing Borrowings 1,023,410,066 1,023,410,066
Cash and Cash Equivalents
The carrying amount of the cash and cash equivalents and balances with banks approximate the fair value as theses are short term in nature.
Trade and Other Receivables
Trade and other receivables are expected to be settled within one year from the reporting date and hence the discounting impact would be immaterial. Therefore carrying amount approximate the fair value as at the reporting date.
Trade and Other Payables
Trade and other payables are expected to be settled within one year from the reporting date and hence the discounting impact would be immaterial. Therefore carrying amount approximate the fair value as at the reporting date.
Interest Bearing Borrowings
Long term borrowings are repriced either monthly, quarterly or semi annually in line with the changes in the market rates. Hence carrying value of these borrowings approximate the fair value. Other borrowings are short term in nature and hence carrying value approximate the fair value.
Notes to the Financial Statements
62Sierra Cables PLC • Annual Report 2013/14
36. FINANCIAL RISk MANAGEMENT (CONTINUED)
(vii) Categorization of Financial Assets and Liabilities as at the Reporting Date
Classification
Loansand
Receivables
Available for Sale
Investments
Fair Value Through
Profit or Loss Investments
Held to Maturity
Investments
Rs. Rs. Rs. Rs.
Group
Financial Instrument
Trade and Other Receivables 950,307,110 - - -
Amount Due from Related Parties 69,480,864 - - -
Cash and Cash Equipments 10,421,297 - - -
Available for Sale Investments - 112,951,573 - -
Classification
Fair Value Through Profit
or Loss
AmortizedCost
Rs. Rs.
Financial Liabilities
Trade and Other Payables - 392,351,499
Interest Bearing Borrowings - 1,023,410,066
Notes to the Financial Statements
63Sierra Cables PLC • Annual Report 2013/14
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
For t
he y
ear e
nded
31
Mar
chRs
.Rs
.Rs
.Rs
.Rs
.Rs
.Rs
.Rs
.Rs
.Rs
.
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761,
924,
958
461
,207
,379
N
on-C
ontr
ollin
g In
tere
st-
--
--
-29
,451
,690
17
,658
,588
11,
312,
491
Rati
osTo
tal A
sset
s/Eq
uity
2.1
2 1
.54
1.4
9 1
.44
1.4
9 1
.50
1.9
0 2
.03
2.0
1 2
.21
Turn
over
/Ass
ets
0.8
3 0
.63
0.8
2 0
.81
0.8
0 0
.5
0.59
0.
89
0.63
0.
76
Net
Mar
gin
(%)
8.5
5 9
.70
7.3
0 8
.70
1.7
0 1
0.40
1
.08
4.8
6 (1
.08)
(13.
41)
Retu
rn o
n Eq
uity
(%)
15.
059.
358.
8710
.13
2.07
7.82
1.22
8.95
(0.7
7) (2
1.46
)
Retu
rn o
n As
sets
(%)
7.09
6.07
5.95
7.05
1.39
5.20
0.65
431
(0.7
2) (1
0.16
)
Shar
e In
form
atio
nEa
rnin
gs p
er S
hare
(LKR
) 0
.12
0.1
9 0.
190.
240.
050.
20.
030.
22(0
.02)
(0.5
4)
Pric
e Ea
rnin
gs R
atio
19.
20
10.
67
10.5
77.
4922
.45
10.9
318
0.10
14.6
7(1
04.5
3) (3
.14)
Net
Ass
ets
Per
Shar
e 1
.27
2.0
0 2.
132.
372.
372.
572.
452.
503.
082.
52
Ten Year Summary
64Sierra Cables PLC • Annual Report 2013/14
Notice of Meeting
NOTICE IS HEREBY GIVEN that the 11th Annual General Meeting of SIERRA CABLES PLC. Will be held on 29th of September 2014 at 10.00 a.m at The Sri Lanka Foundation Institute,100, Independence Square, Colombo 07.
AGENDA
1. To read the notice convening the meeting.
2. To receive and consider the Report of the Directors and the Statement of Audited Accounts for the year ended 31st March, 2014 and the Report of the Auditors.
3. To re-elect Mr. W.A.P. Perera who retires by rotation in terms of Articles 91 of the Articles of Association of the Company as a Director of the Company.
4. To re-elect Mr. D.N.N. Lokuge who retires by rotation in terms of Articles 91 of the Articles of Association of the Company as a Director of the Company.
5. To re-elect Mr. J.H.P. Ratnayeke who retires by rotation in terms of Articles 91 of the Articles of Association of the Company as a Director of the Company
6. To re-appoint Messrs KPMG, Charted Accountants as Auditors of the Company for ensuring year and to authorize the Directors to determine their remuneration.
7. To transact any other business of which due notice has been given.
By Order of the Board
(Sgd.)P.R. Secretarial Services (Private) LimitedSecretaries
Colombo.22nd August, 2014
Sierra Cables PLC • Annual Report 2013/14
I/We……………………….......................................................................………………………………………………………………………………………..................……….......……….of
…………………………………………………………...................................................................................................................................................................……………………being a Member/Member* of the above named Company, hereby appoint
(1)………………………………………………….................…….of………………………………………………………………………………………………..failing him/her.
(2) Mr. W.A.P. Perera, or failing him
(3) Mr. D.N.N. Lokuge, or failing him
(4) Mr. E.A.D.T.B. Perera, or failing him
(5) Mr. D.S. Panditha, or failing him
(6) Dr. D.G.K.E. Weerapperuma, or failing him
(7) Mr. J.H.P. Ratnayeke, or failing him
(8) Ms. G.S.M.Irugalbandara, or failing him
(9) Mr. A.K. W. Jayawardane, or failing him
(10) Mr. B.W.N. Rupasinghe, or failing him
(11) Mr. P.R. Saldin, or failing him
as my/our Proxy to represent me/us and vote and speak for me/us on my/our behalf at the 11th Annual General Meeting of the Company to be held on 29th of September 2014 at 10.00 a.m at The Sri Lanka Foundation Institute,100, Independence Square, Colombo 07 and at any adjournment thereof and at every poll which may be taken in consequence thereof.
I/WE INDICATE MY/OUR VOTE ON THE RESOLUTIONS BELOW AS FOLLOWS;
For Against
1. To receive and consider the report of the Directors and the audited financial statements for the year ended 31st March 2014 and the Report of the Auditors thereon.
2. To re-elect Mr. W.A.P. Perera who retires by rotation in terms of Articles 91 of the Articles of Association of the Company as a Director of the Company.
3. To re-elect Mr. D.N.N. Lokuge who retires by rotation in terms of Articles 91 of the Articles of Association of the Company as a Director of the Company.
4. To re-elect Mr. J.H.P. Ratnayeke who retires by rotation in terms of Articles 91 of the Articles of Association of the Company as a Director of the Company.
5. To re-appoint Messrs KPMG, Charted Accountants as Auditors of the Company for ensuring year and to authorize the Directors to determine their remuneration.
Signed this ………............................................…… day of ……………….......................………….. 2014.
………………………………................…… N.I.C. No. ……………………………….....................………
Signature of shareholder
Note:
1. A Proxy need not be a member of the Company
2. Instructions as to completion appear overleaf
Form of Proxy
Sierra Cables PLC • Annual Report 2013/14
INSTRUCTIONS AS TO COMPLETION
1. Kindly perfect the Form of Proxy by filing in legibly your full name, National Identity Card/ Passport/ Company Registration Number, your address and your instructions as to voting and by signing in the space provided and filing in the date of signature. Please ensure that all details are legible.
2. Please mark “X” in appropriate cages, to indicate your instructions as to voting on each resolution. If no indication is given, the Proxy holder in his/her discretion will vote as he/her thinks fit.
3. To be valid, the completed Form of Proxy must be deposited at the Registered Office at No. 9, Bawa Place, Borella, Colombo 8, not less than 48 hours before the time appointed for the holding of the meeting.
4. If you wish to appoint a person other than the Chairman (or failing him, one of the Directors) as your Proxy, please insert the relevant details (1) overleaf and initial against this entry.
5. In the case of a Company/Corporation, the Proxy must be under its Common Seal, which should be affixed and attested in the manner prescribed by Articles of Association/ Act of Incorporation.
6. In the case of a Proxy signed by an Attorney, a certified copy of the Power of Attorney should accompany the completed Form of Proxy for registration, if such Power of Attorney has not already been registered with the Company.
Form of Proxy
Please provide the following details to update our records:
Full Name of Shareholder/s:.................................................................
...............................................................................................................
...............................................................................................................
Address : ..............................................................................................
...............................................................................................................
...............................................................................................................
...............................................................................................................
N.I.C. No................................................................................................
Signature :............................................................................................
Name of the Company
Sierra Cables PLC
Company Re-Registration No.
PQ 166 (under the Companies Act No.07 of 2007)
Registered Office
112, Havelock Road, Colombo 05.
Company Secretaries
P.R. Secretarial Services (Pvt) Ltd. 59, Gregory’s Road, Colombo 07. Tel: 2671439, 2671441 E-mail: [email protected]
Auditors
KPMG 32 A, Sir Mohamed Macan Markar Mawatha, Colombo 03. Tel: 5426426 Fax: 2445872 Internet: www.lk.kpmg.com
Legal Advisors
Paul Ratnayeke Associates 59, Gregory’s Road, Colombo 07. Tel: 2697893, 2697894 E-mail [email protected]
Bankers
Commercial Bank of Ceylon PLC Sampath Bank PLC Bank of Ceylon
Subsidiary Companies
Sierra Industries (Pvt) Ltd.
Sierra Power (Pvt) Ltd.
Associate companies
T & G Lanka (Private) Ltd.
Tea Leaf Resorts (Private) Ltd.
Domicile and Legal Form
Sierra Cables PLC is a limited liability company incorporated and domiciled in Sri Lanka.
The Registered Office of the company is at 112, Havelock Road, Colombo 05 and the Principal Place of business is located at 39/1A, Galwarusa Road, Korathota, Kaduwela.
Tel: 4412000-5 Fax: 2770291, 4412573 E-mail: [email protected] Web: www.sierracables.com
Issued ordinary shares of the company is stated as listed on the Colombo Exchange since 22nd November 2005.
Principal Activities and Nature of Operations
The principal activity of the company is manufacturing and sales of wires and cables.
Parent Enterprises and Ultimate Parent Enterprise
In the Directors opinion, the company’s ultimate parent undertaking and controlling party is Sierra Holdings (Pvt) Ltd., which is incorporated in Sri Lanka.
Number of Employees
The number of employees of the Group at the end of the year was 318 (2012/13 - 307).
Cover Designed by Sierra Cables / Produced & Printed by Printel (Pvt) Limited
Corporate Information