Industrial Asphalts (Ceylon) PLC · Industrial Asphalts (Ceylon) PLC notice of annual general...

Industrial Asphalts (Ceylon) PLC


C o n t e n t s

Corporate Information ................................ 1

Notice of Annual General Meeting................... 2

Chairman’s Statement ................................ 3

Report of the Directors’ ............................... 4 - 5

Directors’ Responsibilities for the

Preparation of Financial Statements ............ 6

Board of Directors ........................................ 6

Report of the Audit Committee.......................... 7

Report of the Remuneration Committee ......... 7

Corporate Governance ............................... 8 - 9

Risk ............................................................ 10

Independent Auditor’s Statement ............... 11

Statement of Comprehensive Income .......... 12

Statement of Financial Position ................... 13

Statement of Changes in equity .................. 14

Cash Flow Statement ................................. 15

Accounting Policies ..................................... 16-20

Notes to the Accounts ................................ 21-25

Shareholders Information.............................. 26

Form of Proxy

We add value to our customers’

businesses by providing products,

process and services which allow

them to increase efficiency and

quality of their operations

and products.


Corporate Information

Legal Status Public Quoted Company with limited liability

Incorporated in Sri Lanka in 1964.

Company Registration No PQ 185

Board of Directors Mr. J V R Joseph (Chairman)

Mr. N E Aluwihare (resigned w.e.f.28.09.2012)

Mr. E W B Dabare (resigned w.e.f.28.09.2012)

Mr. S R Ekanayake.

Mr. M C P Fernando

Registered Address No. 28/1 New Nuge Road,

Peliyagoda

Company Secretaries K H L Corporate Services Ltd

No 02, Deal Place,

Colombo 3

Auditors Cecil Arsecularatne & Company

Chartered Accountants

No 3 Dr Lester James Peris Mawatha

Colombo 5.

Bankers Commercial Bank of Ceylon Plc

Bank of Ceylon

1


notice of annual general meeting

NOTICE IS HEREBY GIVEN that the FORTY NINTH ANNUAL GENERAL MEETING of Industrial Asphalts (Ceylon)

PLC will be held on Friday 27th September 2013 at 10.00am at The Ceylon Chamber of Commerce Auditorium, 50,

Nawam Mawatha, Colombo 2.

1. To receive the report of the Directors and the Statement of Accounts for the year ended 31st March 2013

together with the Report of the Auditors thereon.

2. To declare a first and final dividend of Rs. 2.00 per share as recommended by the Directors.

3. To re-elect Mr M C P Fernando who retires by rotation in terms of article 90 of the Articles of Association

of the Company and offers himself for re-election as a Director.

4. To reappoint Messrs Cecil Arsecularatne as Auditors of the Company for the ensuing year and to

authorise the Directors to determine their remuneration.

5. To authorise Directors to determine and make contributions towards donations.

By order of the Board

K.H.L Corporate Services Ltd

Secretaries

4 September 2013

NOTES

1 A member entitled to attend and vote is entitled to appoint a proxy to attend instead of them.

A proxy may vote on a poll (and join in demanding a poll) but not on a show of hands.

2. The instrument appointing a proxy should reach the registered address of the Company

No 28/1 New Nuge Road, Peliyagoda by 10.00 am on 25th September 2013.

2


chairman’s statement

On behalf of the Board of Directors I take pleasure in

welcoming you to the Forty Ninth Annual General Meeting

of the Company and to present the Report of the Directors

and Financial Statements of the Company for the year ended

31st March 2013.

As has been widely documented the economic environment

remained challenging during the year under review and

continues to test the resilience of our strategy and business

model.

Our performance for the year was in the backdrop of an

economy which recorded a year on year growth of 6.4% in

real terms following on from two previous years of over

8% growth. The Central Bank adopted a tight monetary

policy by raising policy interest rates and imposing a ceiling

on lending to contain liquidity and inflation. The high interest

rate regime which was prevalent right through the period

under review impacted on our results adversely as indeed

did the rapidly depreciating value of the Sri Lankan Rupee.

The effects of bad weather are logically spoken of in the

context of its impact on agriculture. This is especially so in

an agricultural led economy such as ours. However

unseasonal rainfall also has a negative effect on our industry

as most applications are carried out outdoors under dry

conditions. Heavy rains in the latter part of the second

quarter prevented any road building or waterproofing

activities thus slowing down demand.

Our turnover for the year dipped very badly due primarily to

a failure in the supply chain during the first quarter of the

year. Stocks of Bitumen from the Country’s duopolies ran

out completely and were not replenished for over 6 weeks.

Such an unplanned stock out had not taken place for a

number of years. This impacted on our operations during

the quarter from which we did not recover over the rest of

the year

Although sales dropped by 11% to Rs 66 million compared

to last year our gross margins improved to 20.3% against

18.2% last year. Improvements in gross margins would have

been even greater if not for the higher utility charges that

we have had to bear, particularly for electricity.

All containable overhead expenditure was strictly controlled

and despite inflationary pressures total overhead

expenditure was below the previous year

However the one exception was the cost of financing. The

cost of Bank interest increased by 58% over the previous

year. This is where businesses up and down the country

are facing a double whammy. On the one hand the bank

rates of interest have increased significantly over the past

eighteen months as one of the mechanisms for containing

inflationary pressures and on the other hand ironically for

the same reason it is becoming increasingly difficult to

ensure payments are received in a timely manner from trade

debts as debtors have fine tuned the art of extending

settlements using various guises. The Commercial Banks

can follow the lead in many developed countries of closing

down accounts of defaulters and establishing a mechanism

for such defaulters not to be able to open accounts in

any other Bank.

Mention has been made in previous reviews too of the

adverse effect the weakness in the Sri Lankan Rupee

has on our cost of production due to the fact that a

significant proportion of raw materials for our coating

manufacture has to be imported. This was true of this

year too.

.

The effective rate of tax for the year was after

considering adjustments for deferred taxation was

28.3% compared to15.5%.

Due to strains in cash resources we were unable to pay

an interim dividend this year. A final dividend of Rs 2.00

per share has been proposed as a first and final dividend.

The payout again reflects the limited liquidity that is at our

disposal at this point in time, in the current regime of high

cost of funding. We are hopeful that we can institute an

interim payment in the next financial year. None the less

we are proud of the fact we have always paid a dividend

to our shareholders on their investments each year since

inception.

We are of the opinion that we need a strong and balanced

board with a broad range of skills and experiences. The

importance of diversity in thought and experience

contributes significantly to the value, quality and depth of

board deliberations and decisions. A recruitment process

is underway that should lead to changes being made to

the Board during the current year to fill the vacancies

created by the retirement of Mr Noel Aluvihare and Mr

Basil Dabare during the year under review. All Board

changes will be announced at the appropriate time.

The outlook is undoubtedly one of surmounting challenges.

IAC is a market and technology leader across its targeted

end user segments. We are innovative with a clear focus

on customer demands. Furthering sustainable revenue

and margin growth will be our objective in the coming

year. We will build on our already well established foot

print in our core businesses as well as trade in a greater

range of bought in products from leading European

manufacturers to complement our range

Finally, on behalf of the Board, I would like to thank all of

our people for the invaluable contribution they make to

our continuing success. Our growth and development

over the years is as a direct result of their persistent

hard work, dedication and achievement of results, and I

believe we all look forward with enthusiasm and

confidence.

J V R Joseph

Chairman

August 28th,2013

3


annual report of the directors

The Directors present their Report for the year ended 31

March 2013 together with the Statement of Financial

Position and Statement of Comprehensive Income for

the year under review.

PRINCIPAL ACTIVITIES

The Company’s principal activities are the manufacture

and distribution of bituminous products; distribution of

a specialist range of surface coatings and industrial

Chemicals.

There were no significant changes to the principal

activities of the Company during the year under review.

ANNUAL BUSINESS REVIEW

A review of the operations of the Company is described

in the Chairman’s statement.

FINANCIAL STATEMENTS & APPROPRIATIONS

The financial statements for the year ended 31 March

2013 are given on pages 12-25 of the report. The Directors

have recommended the payment of a final dividend of

Rs 2.00 per share amounting to Rs 1,333,124.

RESPONSIBILITY FOR FINANCIAL STATEMENTS

The Directors’ responsibility in relation to the financial

statements Is set out on Page 6.

DIRECTORATE

The Directors of the Company during the period under

review and the changes that took place to date are given

below: J V R Joseph

N E Aluwihare (Resigned with effect from 28 Sept 2012)

E W B Dabare (Resigned with effect from 28 Sept 2012)

S R Ekanayake

M C P Fernando

Brief resume of the Directors are given in page 6.

Mr M C P Fernando retires by rotation under article 90

and is recommended for re-election with the unanimous

support of the Board.

DIRECTOR’S SHAREHOLDING

The Directors during the period under review and their

Shareholdings are as follows :

2013 2012

J V R Joseph 1008 1008

N E Aluwihare 12 12

E W B Dabare –)) –))

S R Ekanayake –)) –))

M C P Fernando –)) –))

INTERESTS REGISTER

The Company maintains the Interests register

since re-registration under the Companies Act

No 7 of 2007. The Directors’ shareholding is

shown above and the remuneration Paid is shown

in Note 3 to the accounts. None of the Directors

had an interest in a contract with the Company.

REMUNERATION COMMITTEE

The Following non-executive Directors are

members of the Remuneration Committee:

M C P Fernando (Chairman)

S R Ekanayake

AUDIT COMMITTEE

The following non-executive Directors are

members of the Audit Committee.

J V R Joseph (Chairman)

M C P Fernando

S R Ekanayake

FIXED ASSETS

Changes to the fixed Assets are shown in Note 8

to the financial statements.

MARKET VALUE OF SHARES

The market value of the Company’s ordinary

shares as at 31 March 2013 was Rs 199.00

(2012 – Rs 395.00)

The highest price the shares traded during

the year was Rs 239.90 (2012 – Rs 558.00)

The lowest price Rs 180.55 (2012 – Rs 310.60)

DIRECTORS REMUNERATION

Remuneration received by the Directors is set

out Note 3 of the financial statements.

STATUTORY PAYMENTS

The Company has made all known statutory

payments.

POST BALANCE SHEET EVENTS

No circumstances have arisen since the Balance

Sheet date, which would require adjustments to,

or disclosure in the Financial Statements other

than those disclosed in Notes to the Financial

Statements.

GOING CONCERN

The financial statements have been prepared on

a going concern basis, as the Directors consider

4


annual report of the directors

that the Company has sufficient resources and

committed borrowing facil it ies to support its

operations for the foreseeable future.

AUDITORS

The retiring auditors Cecil Arsecularatne & Co have

indicated their willingness to continue in office a

resolution to reappoint them and authorising.

The Directors to fix their remuneration will be

proposed at the Annual General Meeting. As far as

the Directors are aware the Auditors do not have any

relationship or interest in the company other than as

stated. They confirm that they are independent in

accordance with the Code of Ethics of The Institute

of Chartered Accountants of Sri Lanka.

The fees paid for the auditors are disclosed in

Note 3 to the financial statements.

ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be

held at the on Friday 27th September 2013 at 10.00

am at The Ceylon Chamber of Commerce

Auditorium, 50 Nawam Mawatha, Colombo 2.

By order of the Board

J V R Joseph M C P Fernando

Director Director

K H L Corporate Services Ltd

Secretaries

Colombo this day 4 September 2013.

5


J V R Joseph MA (Finance) FCMA FCCA FCGMA

Chairman

A Fellow of the Institute of Chartered Management

Accountants (UK) and a Fellow of the Association of

Chartered Certified Accountants (UK). Holds a post

graduate Degree in Finance and has a number of

years of extensive experience at a senior level

internationally both in industry and as a management

consultant

S R Ekanayake B Sc (Hons)

Independent non-executive Director

Holds a Bachelor of Science Degree with Chemistry

specialisation from the University of Ceylon. He has

extensive technical experience in Ink and coatings

technology.

M C P Fernando B Sc (Hons)

Independent Non Executive Director

Joined the Board in 2008. Holds a Bachelor of Science

degree from the University of Sri Lanka. He is an

entrepreneur and is involved in several projects in

the hotel and agricultural sectors .

directors’ responsibilities for the preparation of financial

statements

Board of Directors

The Directors of your company are required by the companies Act no 7 of 2007 to prepare Financial Statements,which give a true and fair view of the state of affairs of the company as at the end of the financial year, and of theProfit and Loss and of the Cash flows of the Company for the financial year

The Directors confirm that the Financial Statements of the Company for the year ended 31st March 2013 presentedin the Report have been prepared in accordance with the Sri Lanka Accounting Standards and the Companies ActNo 7 of 2007. In preparing the Financial Statements, the Directors have selected the appropriate accountingpolicies and have applied them consistently. Reasonable and prudent judgments and estimates have beenmade and applicable accounting standards have been followed and the financial Statement have been preparedon a going concern basis.

The Directors are of the view that adequate funds and other resources are available within the company for theCompany to continue in operation for the foreseeable future.

The Directors have taken all reasonable steps expected from them to safeguard the assets of the Company andto establish appropriate systems of Internal controls in order to prevent, deter and detect any frauds,misappropriation or other irregularities. The Directors have also taken all reasonable steps to ensure that theCompany maintains adequate and accurate accounting books of record, which reflect the transparency oftransactions and provide an accurate disclosure of the Company’s financial position.

As required by Section 56 (2) of Companies Act No 7 of 2007, the Board of Directors have confirmed that theCompany, based on the information available satisfied the Solvency test, immediately after the distribution, inaccordance with Section 57 of the Companies Act of 7 of 2007, and have obtained a certificate from the Auditors.

The Directors are required to provide the Auditors with every opportunity to take whatever steps and undertakewhatever inspection they consider appropriate for the purpose of enabling them to give their Audit Report.The Directors are of the view that they have discharged their responsibilities in this regard.

The Directors confirm that to the best of their knowledge, all taxes and levies payable by the Company and allcontributions, levies and taxes payable on behalf of the employees of the company and all other known statutoryobligations as at the balance sheet date have been paid or provided for in the Financial Statement.

By Order of the BoardK H L Corporate Services Ltd

Secretaries

04th September 2013

6


report of the remuneration committee

The remuneration Committee comprises Mr M C P Fernando and Mr S R Ekanayake both of whom are considered

to be Independent non-executive Directors. They are responsible for reviewing and recommending the framework

and policy for remuneration of senior management.

The remuneration committee met once during the year.

The policy on remuneration is geared to attract and retain the best professional talent to the Company and to

motivate and encourage them to perform at the highest possible level.

Evaluation of performance ensures equality and fairness without discrimination of gender, age, ethnicity, religion

or any other consideration.

report of the audit committee

The Audit committee comprises Mr J V R Joseph (Chairman) S R Ekanayake and Mr. M C P Fernando. The Audit

Committee is responsible for reviewing, on behalf of the Board, the Group’s accounting and financial policies and

its disclosure practices, internal controls, internal audit and risk management. It is also responsible for overseeing

all matters associated with the appointment, terms, remuneration and performance of the external auditor and for

reviewing the scope and results of the audit. The Committee met four times during the year when all members

attended.

Mr J V R Joseph is a Fellow of the Institute of Chartered Management Accountants (UK) and a Fellow of the

Association of Chartered Certified Accountants (UK) The Finance Executive Officer attends meetings by invitation.

During the year the Committee reviewed the Company’s policies and procedures relating to governance and risk

control. It assisted the Board to fulfil its responsibilities relating to external financial reporting and announcements.

The External Auditors’ letter of engagement, including the scope of the audit, was reviewed and discussed by the

Committee with Management and the External Auditors prior to the commencement of the Audit. Before the

conclusion of the audit, the Committee met with the External Auditors to discuss all audit issues and agree on

their treatment. The Audit Committee is satisfied that the independence of the External Auditors has not been

impaired by any event or service that gives rise to a conflict of interest.

The Audit Committee has recommended to the Board of Directors that Messrs. Cecil Arsecularatne & Co,Chartered

Accountants be re-appointed as External Auditors for the financial year ending 31st March 2014 subject to approval

by the shareholders at the Annual General Meeting of the Company.

Based on the reports submitted by the External Auditors and discussions with management, the Audit Committee

is of the view that the control environment of the Company is satisfactory and provides reasonable assurance that

the financial position of the Company is adequately monitored and its assets are safeguarded

7


The Board is committed to business integrity, appropriate ethical standards and professionalism in all its operations andactivities. This includes a commitment to high standards in corporate governance, which describes the systems by whichcompanies are directed and controlled at a senior level, including the operation of the Board..

In terms of section 7.10 of the listing rules of the Colombo Stock Exchange, Industrial Asphalts (Ceylon) PLC complied with therelevant provisions under Corporate Governance. The level of compliance is enumerated below

The BoardThe Board of Directors is responsible for the Company’s strategy, policy, monitoring achievement of its business objectives andmaintaining a system of effective corporate governance, which includes responsibility for health, safety, environmental, socialand ethical issues. It monitors the exposure to key business risks

As at 31 March 2013 the Board comprises of three non-executive directors. Once the vacancies caused by recent retirementsfrom the Board are filled it believes that it will be of sufficient size to contain an appropriate balance of skills and experience butnot so large as to be unwieldy.

The non-executive directors bring independent objective judgement to bear on Board decisions by constructively challengingmanagement and helping to develop the company’s strategic objectives. All of the directors have fiduciary responsibilities to theCompany. Collectively, the Board is responsible for leading and directing the long term development of the Company

Two of the non- executive directors are considered by the Board to be independent of the management and free from anybusiness or other relationship that could materially interfere with the exercise of their independent judgement. The Board metfour times during the year. It reviews the management and financial performance of the Company as well as long term strategicplanning and risk assessment. Additionally the Board meets with senior management regularly to review operational mattersand disseminate the Board’s plans for the future.

The Directors have access to the Company Secretary and procedures have been adopted for Directors to obtain access toindependent professional advice at the Company’s expense, where it is deemed necessary in order to discharge theirresponsibilities as a Director of the Company.

No of Meetings

J V R Joseph 4N E Aluvihare (Retired with effect from 28.09.2012) 2E W B Dabare (Retired with effect from 28.09.2012) 2S R Ekanayake 4M C P Fernando 4

Rule 7.10.1 of CSE 3 Directors of the Company are Non-Executive Directors

Rule 7.10.2 of CSE All of the Directors have submitted declarations on their independence or non independence againstthe specified criteria of the CSE. Based on these declarations the independence or non independenceof the Directors is given below:

J V R Joseph Non Executive DirectorS R Ekanayake Independent Non Executive DirectorM C P Fernando Independent Non Executive Director

Accordingly there are two Independent Non Executive Directors at present.Their details are given on Page 6.

Rule 7.10.3 of CSE The Board of Directors determine the independence or non independence of each Non ExecutiveDirector

Remuneration Committee All the members of the Remuneration Committee are IndependentRule 7.10.5 of CSE Non Executive Directors.(balance as previously) The members of the Remuneration Committee as at 31st March 2013 are as follows-

M C P Fernando (Chairman)S R Ekanayake

Mr M C P Fernando is the Chairman of the Remuneration Committee and is an IndependentNon Executive Director

The remunerations committee recommends to the Board the remuneration payable to all Executivesbased on performance appraisals.

corporate governance

8


A report of the remuneration committee which contains the remuneration policy is given on page 7.

Audit Rule The Audit Committee comprises of a Non Executive Director and two Independent Non ExecutiveCommittee 7.10.6 of Directors. The members of the Audit Committee is as follows:

CSEJ V R Joseph (Chairman)E W B DabareM C P FernandoMr Joseph, a Non Executive Director on the Board is a fellow member of the Chartered Institute ofManagement Accountants (UK) and Institute of Chartered Certified Management Accountants (UK).He is the Chairman of the Audit committee.

The Finance Executive Officer attends the Audit Committee meetings by invitation.

A report of the Audit committee is given on page 7.

Relationship with The Board of Directors ensures that the senior management team posses right skills to deliverstakeholders their best contribution towards the company. The Board has empowered such employees to make

operational decisions and also encourage them to make recommendations to the board on areas ofstrategic importance. The vision, goals and objectives of the company have been formulated and allthe employees have been briefed clearly of their specific job to achieve overall results for thecompany. Staff directly communicate any concerns to the Directors.

The Company maintains a sound relationship with regulatory authorities.

The Shareholders have the right to voice their concerns to the Board of Directors and exercise theirvotes at Annual General Meetings/ Extraordinary General Meetings of the Company. The notice ofsuch meetings, and relevant documents as required by the Companies Act No.07 of 2007 and ListingRules of Colombo Stock Exchange are circulated to all the shareholders at least 15 working daysprior to the date of the meeting.

Disclosure The Board’s policy is to disclose all relevant information to stakeholders, within the bounds ofprudent commercial judgment, in addition to preparing the financial statements in accordance withSri Lanka Accounting Standards, the Companies Act No.07 of 2007 and in conformity with StockExchange disclosure requirements.

corporate governance (continued)

9


risk

External Market Factors

Economic Environment

The Global economic environment and the levels of activity in the markets and territories in which the Companydoes business in could adversely affect the Company’s revenues, profitability and cash flow.

Currency ExposureA significant proportion of our raw materials are imported. Primarily these are denominated in US Dollars, Eurosand UK Pounds. Fluctuation in exchange rates between the Sri Lankan Rupee and these currencies could causeprofit and balance sheet volatility.

Competitor ActivityThe Company operates in competitive markets both in terms of competitors offering directly comparable andalternative products. The ability of the Company to compete is directly dependent on its ability to developtechnological innovations and deliver high quality products. Demand for our products can be impacted if we failto compete successfully causing loss of market share and margin erosion.

We continue to work closely with our customers and seek to always have the highest quality products available tomeet our proposed delivery schedules. We seek to continuously improve the quality and the performance of ourproducts whilst providing prompt technical support and advice so as to provide high quality application solutionsto our customers.

Technological changeThe Company is dependent on manufacturing and selling high quality products into advanced applications.Demand for these applications and consequently our products could be impacted as new technologies andmaterials are developed.

To maintain and advance our technology skills and knowledge we invest in resources and specialists who workclosely with our customers and end users covering the major market segments of our business so that wemaintain our position as market leaders in our core businesses

Business Specific Factors

Operational disruptionThe Company’s business is dependent on the ongoing operation of our various manufacturing facilities.A significant operational disruption could adversely affect our ability to make and supply products.

We have implemented policies and procedures to efficiently and safely manage all our operations and to maintainour supply of products to our customers, in particular.

Product SpecificationsThe Company’s products are used in highly demanding end use applications. Any failure to supply products inaccordance with their specifications could lead to loss of business and potentially a liability claim.

Our products are manufactured in strict adherence to established specifications and our quality managementprocess is one of continuous improvement which is overseen by senior management.

Insufficient capacityOur customers’ businesses depend on maintaining a consistent supply of high quality products. Any unexpectedupsurge in demand could lead to insufficient capacity to fulfil customers’ needs.

Our stocks of finished goods and raw materials enable us to supply any short term surge in demand from ourcustomers. Furthermore it is our policy to keep capacity well ahead of demand by investing in all aspects of oursupply chain so that our customers can be confident that we can meet their current and future requirements.

Debtor DefaultThere is an ever present risk when granting credit to customers who then delay or default on payments.

The Company has stringent rules in place in evaluating customers who are granted credit and monitoring eachindividual performance on an ongoing basis to avoid potential defaults. An “amber alert” system is inbuilt into ourcredit control procedures to highlight at an early stage potential problem customers so that pre-emptive action istaken to collect dues before default occurs

PersonnelThe technical nature of the business requires trained, experienced and knowledgeable personnel. We endeavorto retain staff with these qualities through a programme of planned career development and opportunities forpromotion and undertaking greater responsibility.

10


TO THE SHAREHOLDERS OF INDUSTRIAL ASPHALTS (CEYLON) PLC

Report on the Financial Statements

We have audited the accompanying financial statements of Industrial Asphalts (Ceylon) PLC which comprise the

Statement of Financial Position as at March 31, 2013, and the Statement of Comprehensive Income, Statement of

Changes in Equity & Cash Flow Statement for the year then ended, and a summary of significant accounting

policies and other explanatory notes as set out in pages 16 to 25.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance

with Sri Lanka Accounting Standards. This responsibility includes; designing, implementing and maintaining

internal controls relevant to the preparation and fair presentation of financial statements that are free from material

misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with Sri Lanka Auditing Standards. Those standards require that we plan and perform the

audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation.

We have obtained all the information and explanations, which to the best of our knowledge and belief were

necessary for the purposes of our audit. We therefore believe that our audit provides a reasonable basis for our

opinion.

OpinionIn our opinion, so far as appears from our examination, the Company maintained proper accounting records for

the year ended March 31, 2013 and the financial statements give a true and fair view of the Company’s State of

affairs as at March 31, 2013 and its Financial Performance for the year then ended in accordance with Sri Lanka

Accounting Standards.

Report on Other Legal and Regulatory Requirements

In our opinion, these financial statements also comply with the requirement of Section 151(2) to the Companies

Act No 07 of 2007.

CHARTERED ACCOUNTANTSColombo22nd August 2013

S/Ng

Independent auditor’s statement

11


Note 2013 2012

Rs. Rs.

Revenue 01 66,008,732 74,922,979

Cost of Sales (52,527,025) (61,194,697)

Gross Profit 13,481,707 13,728,282

Other Operating Income 02 81,395 189,236

Distribution Cost (3,003,989) (3,229,736)

Administration Cost (5,837,326) (5,966,441)

Profit from Operating Activities 03 4,721,788 4,721,341

Finance Cost 04 (2,751,853) (1,747,511)

Net Profit Before Taxation 1,969,934 2,973,831

Income Tax Expense 05 (557,426) 463,735

Net Profit For the Period 1,412,509 3,437,566

Other Comprehensive Income

Revaluation of Property Plant & Equipment 18,388,988 – ))))

Deferred tax effect on revaluation surplus on Property Plant & Equipment (2,206,679) – ))))

Other Comprehensive Income 16,182,309

Total Comprehensive Income for the Year 17,594,818 3,437,566

Basic earning per share 06 2.12 5.16

Dividend per Share 07 2.00 3.00

The Accounting Policies and Notes on pages 16 to 25 Form an integral part of these Financial Statements.

statement of comprehensive incomeyear ended 31st March 2013

12


statement of financial positionas at 31st March 2013

As at 31 March As at 31 March As at 01st Apr2013 2012 2011

Note Rs. Rs. Rs.ASSETSNON-CURRENT ASSETSProperty, Plant and Equipment 08 55,891,603 38,774,038 39,623,719Lease Hold Land 09 2,727,900 2,766,870 2,805,840Intangible Assets 10 21,675 –))))) –)))))

58,641,178 41,540,908 42,429,559

CURRENT ASSETSInventories 11 26,682,909 23,745,370 21,529,905Trade & Other Receivables 12 25,780,767 23,450,336 23,719,322Short Term Investment 13 378,522 378,629 1,420,769Cash & Cash Equivalents 14 2,316,752 3,579,658 1,891,286

55,158,950 51,153,994 48,561,282

TOTAL ASSETS 113,800,127 92,694,902 90,990,841

EQUITY AND LIABILITIESCAPITAL AND RESERVESStated Capital 15 6,665,620 6,665,620 6,665,620Revaluation Reserve 46,112,663 29,930,354 29,930,354General Reserve 15,141,299 15,141,299 15,141,299Retained Earnings 18,545,607 19,132,784 17,699,510

Share holders Interest 86,465,189 70,870,057 69,436,783

NON-CURRENT LIABILITIESDeferred Tax Liabilities 16 7,171,808 4,725,745 5,650,863Retirement benefit obligation - Gratuity 17 949,334 864,112 731,285Term Loan 458,210 958,290 1,500,000Commission Retained 140,927 127,523 119,598

8,720,279 6,675,670 8,001,746

CURRENT LIABILITIESTrade & Other Payables 18 1,756,861 1,707,145 1,818,614Term Loan 500,040 500,000 500,000Import Loans 16,357,758 12,942,029 11,233,698

18,614,659 15,149,174 13,552,312

TOTAL EQUITY AND LIABILITIES 113,800,127 92,694,902 90,990,841

I certify that the financial statements have been prepared in compliance with the requirement of the Companies Act No. 7 of 2007.

................................W. M. M. FernandoFinancial Officer

The Board of directors is responsible for the preparation and presentation of these financial statements Signed for and onbehalf of the board by,

...................................... ......................................J. V. R. Joseph M. C. P. Fernando

Director Director


13


statement of changes in equityfor the year ended 31st March 2013

STATED REVALUATION GENERAL RETAINED TOTAL

CAPITAL RESERVES RESERVES EARNINGS Rs.

As at 1 April 2011 6,665,620 29,930,354 15,141,299 17,697,301 69,675,083

Changes in fair value in investments –))))) –))))) –))))) 2,209 2,209

Adjusted SLFRS balance as at 1 April 2011 6,665,620 29,930,354 15,141,299 17,699,510 69,436,783

Total Comprehensive Income for the Year

Net Profit for the year –))))) –)))) –))))) 3,437,566 3,437,566

Other Comprehensive Income –))))) –)))) –))))) –))))) –)))))

Total Comprehensive Income –))))) –)))) –))))) 3,437,566 3,437,566

Dividend to equity owners - 2010/2011 –))))) –)))) –))))) (2,004,292) (2,004,292)

As at 1 April 2012 6,665,620 29,930,354 15,141,299 19,132,784 70,870,057

Total Comprehensive Income for the Year

Net Profit for the year –))))) –)))) –))))) 1,412,509 1,412,509

Other Comprehensive Income

Revaluation –))))) 16,182,309 –))))) –))))) 16,182,309

Total Comprehensive Income –))))) 16,182,309 –))))) 1,412,509 17,594,819

Dividend to equity owners - 2011/2012 –))))) –)))) –))))) (1,999,686) (1,999,686)

As at 31 March 2013 6,665,620 46,112,663 15,141,299 18,545,607 86,465,189


14


cash flow statementfor the year ended 31st March 2013

2013 2012Rs. Rs.

Net profit before Tax 1,969,934 2,973,831

AdjustmentsDepreciation 1,593,723) 1,741,039)Interest Income (39,740) (34,832)Provision for Gratuity 204,572) 132,827)Investment income (7) (7)Amortization 60,645) 38,970)Changes in Market value of investment 106) 3,696)Net Finance Cost 2,751,853) 1,747,511)Profit on Sale of Investment –))))) (151,192)

Operating Profit before working capital changes 6,541,086) 6,451,843)

(Increase)/ Decrease in Inventories (2,937,539) (2,215,465)(Increase)/ decrease in Trade & Other Receivables (2,121,988) 211,085)Increase/ (decrease) in Trade & Other Payables 49,715) (103,543)

Cash Generated from Operations 1,531,275) 4,343,920)

Net Finance Cost (2,751,853) (1,747,512)Gratuity paid (119,350) –)))))Income Tax Paid (526,483) (403,483)

Net Cash From Operating Activities (1,866,411) 2,192,925)

Cash Flow from Investing activitiesPurchase of Property, Plant & Equipment (322,300) (891,357)Purchase Software (43,350) –)))))Investment income 7) 7)Sale of Investment –))))) 1,189,637)Interest Income 39,740) 34,832)

Net Cash Generated from Investing Activities (325,903) 333,119)

Cash Flow from Financing activitiesImport Loan 3,415,730) 1,708,331)Commission Retained 13,404) –)))))Term Loan (500,040) (541,710)Dividend Paid (1,999,686) (2,004,292)

Net Cash used in Financing Activities 929,408) (837,671)

Net Increase/Decrease in Cash & Cash Equivalents (1,262,907) 1,688,373)Cash & Cash Equivalents at the beginning of the period 3,579,658) 1,891,286)

Cash & Cash Equivalents at the end of period 2,316,752) 3,579,658)

Note-(A)—Analysis of Cash & Cash EquivalentsCash at Bank & Cash in Hand 2,316,752) 3,579,658)

2,316,752) 3,579,658)


15


accounting policies31st March 2013

1. Reporting Entity

1.1 Corporate InformationIndustrial Asphalts (Ceylon) PLC is a Public limited liability Company incorporated and domiciled in Sri

Lanka. The registered office and the principal place of the business is located at No. 28/1, New Nuge Road,

Peliyagoda. The financial statements were authorised by the Directors on 22nd August. 2013.

1.2 Principal activities & Nature of OperationsDuring the year, the principal activities were the manufacture and distribution of bituminous products,

distribution of specialist range of surface coating and industrial chemicals.

1.3 Number of Employees

The staff strength of the company as at March 31 2013 was 22 (18 as at March 31 2012)

2 Basis of Preparation

2.1 Statement of Compliance

The financial statements of the Company have been prepared in accordance with Sri Lanka Accounting

Standards comprising SLFRS and LKAS (hereafter referred as “SLFRS”), issued by Institute of Chartered

Accountants of Sri Lanka and in compliance with the requirements of the Companies Act No 07 of 2007.

For all periods up to and including the year ended 31 March 2012, the Company prepared its financial

statements in accordance with SLASs effective up to 31 March 2012. These financial statements for the year

ended 31 March 2013 are the first the Company has prepared in accordance with LKASs (SLFRS and LKAS)

effective for the periods beginning on or after 01 January 2012.

The Company has consistently applied the accounting policies used in preparation of its opening SLFRS

statement of financial position at 01 April 2011 through all periods presented, as if these policies had

always been in effect.

Note discloses the impact of the transition to SLFRS on the Company’s reported financial position and cash

flows, including the nature and effect of significant changes in accounting policies from those used in the

Company’s financial statements for the year ended 31 March 2012 prepared under SLASs.

2.2 Basis of measurementThe financial statements have been prepared on a historical cost basis, Machinery & Motor Vehicle that have

been measured at fair value.

2.3 Functional Currency & Presentation CurrencyThe financial statements are presented in Sri Lankan Rupees except when otherwise indicated.

2.4 Presentation of Financial Statements

The assets and liabilities of the company presented in its Statement of Financial Position are grouped by

nature and listed in an order that reflects their relative liquidity and maturity pattern. No adjustments have

been made for inflationary factors affecting the Financial Statements.

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial

position only when there is a legally enforceable right to offset the recognised amount and there is an

intention to settle on a net basis, or to realise the assets and settle the liability simultaneously. Income and

expenses are not offset in the statement of comprehensive income unless required to be permitted by the

Accounting Standards or interpretation, and specifically disclosed in the Accounting Policies of the company.

2.5 Materiality and AggregationEach material class of similar items is presented separately in the Financial Statements. Items of dissimilar

nature or function are presented separately unless they are immaterial as permitted by Sri Lanka Accounting

Standards LKAS 1 ‘Presentation of Financial Statements.

16


accounting policies (continued)

31st March 2013

2.6 OffsettingAssets and Liabilities and income and expenses are not set – off unless permitted by the Sri Lanka

Accounting Standards.

2.7 Significant Accounting Judgment, Estimate and Assumption

2.7.1 Going ConcernThe company’s management has made an assessment of its ability to continue as a going concern and is

satisfied that it has the resources to continue in business for the foreseeable future. Furthermore,

management is not aware of any material uncertainties that may cast significant doubt upon the company’s

ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the

going concern basis.

3. Assets and bases of their valuation

3.1 Financial instruments — Initial recognition, Classification and subsequent measurement

3.1.1 Financial Assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial

assets designated upon initial recognition at fair value through profit or loss.

Fair value has been measured at active market price at each reporting date.

3.2 Taxation

3.2.1 Income TaxProvide for the income tax liability on the basis of the profit for the year as adjusted for taxation purposes in

accordance with the provisions of the Inland Revenue Act No. 10 of 2006 and the amendments thereto.

Current income tax assets and liabilities for the current and prior periods at the amount expected to be

recovered from or paid to the commissioner general of Inland Revenue. The tax rates and tax laws used to

compute the amount are those that are enacted or substantively enacted by the balance sheet date.

3.2.2 Deferred Taxation

Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet

date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences: except

Where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction

that is not a business combination and, at the time of the transaction, affects neither the accounting profit

nor taxable profit or loss; and

Deferred income tax assets is recognised for all deductible temporary differences, carry-forward of unused

tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against

which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax

losses can be utilised.

Industrial Asphalts (Ceylon) PLC review the carrying amount of deferred income tax assets at each balance

sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available

to allow all or part of the deferred income tax asset to be utilised.

Company measures Deferred income tax assets and liabilities at the tax rates that are expected to be

applied to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that

have been enacted or substantively enacted at the balance sheet date.

Company recognises in equity the deferred income tax relating to items recognised directly in equity, and not

in the income statement.

17



31st March 2013

3.3 Post Balance Sheet EventsIndustrial Asphalts (Ceylon) PLC consider all material events occurring after the balance sheet date and,

where necessary we make adjustments or disclosures to these financial statements.

3.4 Cash & Cash EquivalentsCompany considers highly liquid investment instruments with an original maturity of three months or less

to be cash & cash equivalents.

For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and deposits in

banks net of outstanding bank overdrafts. Investments with short maturities as defined above are also

treated as cash equivalents.

3.5 Property, Plant, & EquipmentCompany states property, plant & equipment at cost, excluding the costs of day to day servicing, less

accumulated depreciation and accumulated impairment in value. Such cost includes the cost of replacing

part of the plant and equipment when that cost is incurred, if the recognition criteria are met.

Subsequent CostThese are costs that are recognised in the carrying amount of an item if it is probable that the future

economic benefits embodied within that part will flow to the company and it can be measured.

Restoration CostExpenditure incurred on replacement, repairs or maintenance of Property, Plant & Equipment in order to

restore or maintain the future economic benefits expected from the originally assessed standard of

performance is recognised as an expense when incurred.

DerecognitionCompany derecognises an item of property, plant and equipment upon disposal or when no future economic

benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset

(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is

included in the income statement in the year the asset is derecognised.

Depreciation

Company calculates the provision for depreciation using written down value basis to write down cost of

property, plant & equipment to their residual values over following useful lives. We do not depreciate land.

Asset Percentage

Plant & Machinery 10%

Office, Computer Equipment 25%

Motor Vehicle 25%

Building 2%

Other Equipment 25%

Company now determines the depreciation charge separately for each significant part of an item of property,

plant and equipment and begins to depreciate when it is available for use, rather than adopting a method

whereby property, plant and equipment are depreciated fully in the year of disposal with no such charge

being accounted for in the year of purchase.

3.6 Intangible Assets

Basis of Recognition

An Intangible Asset is recognized if it is probable that future economic benefits that are attributable to the

asset will flow to the entity and the cost of the asset can be measured reliably in accordance with LKAS 38

‘Intangible Assets’. Accordingly, these assets are stated in the Balance Sheet at cost, less accumulated

amortization and accumulated implement losses, if any.

18


accounting policies31st March 2013

Subsequent Expenditure

Subsequent expenditure on Intangible Assets is capitalised only when it increases the future economic

benefits embodied in these assets. All other expenditure is charged to the Income Statement when incurred.

Useful Economic Lives, Amortization and Impairment

The useful lives of Intangible Assets are assessed to be either finite or indefinite. The company does not

possess intangible assets with indefinite useful lives. Useful economic lives, amortization and impairment

of finite and indefinite intangible assets are described below:

Intangible Assets with Finite Lives and Amortization

Intangible Assets with finite lives are amortized over the useful economic lives. The amortization period and

the amortization method for an intangible asset with finite useful life are reviewed at least at each Balance

Sheet date. Changes in the expected useful life or the expected pattern of consumption of future economic

benefit embodied in the asset are accounted for by changing the amortization period or method, as

appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible

assets with finite lives is recognised in the Income Statement as an expense.

Computer Software

All computer software costs incurred, licensed for use by the Company, which are not integrally related to

associated hardware, which can be clearly identified, reliably measured and it Is probable that they will lead

to future economic benefits, are included in the Balance Sheet under the category of intangible assets and

carried at cost, less accumulated amortization and accumulated impairment losses, if any.

Amortization of Intangible Assets

Intangible assets are amortized using the straight line method to write down the cost over its estimated

useful economic lives. Effective rates are as follows:

Class of Assets % per Annum

Software 50%

The unamortized balances of intangible Assets with finite lives are reviewed for impairment whenever there

is an indication for impairment and recognised as expenses in the Income Statement to the extent that they

are no longer probable of being recovered from the expected future benefits.

Derecognition of Intangible Assets

Intangible assets are derecognised on disposal or when no future economic benefits are expected from

its use. Gains or losses arising from recognition of an intangible asset are measured as the difference

between the net disposal proceeds and the carrying amount of the asset and are recognised in the

Income Statement.

3.7 Inventories

Inventories are valued at the lower of cost or net realisable value after making due allowances for obsolete

and slow moving items, Net realisable value is the price at which inventories can be sold in the ordinary

course of business less estimated cost of completion and estimated cost necessary to make the sale.

The cost incurred in bringing inventories to its present location and conditions are accounted using the

following cost formulae;

Raw Material – At actual cost on weighted average cost basis.

Finished Goods

Work in Progress– At the cost of direct materials fixed labour and an appropriate proportion of

manufactory overheads based on normal capacity.

Goods in Transit – At actual cost.

}

19


3.8 Liabilities and Provisions

3.8.1 ProvisionsWhen company has a present obligation (legal or constructive) as a result of a past event, where it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation

and the company can reliably estimate the amount of the obligation, we recognise it as a provision in

accordance with LKAS 37 - Provisions, Contingent Liabilities and Contingent Asset.

3.8.2 Retirement Benefit Obligations

a) Defined Benefit Plan – GratuityGratuity is a Defined Benefit Plan. The Company is liable to pay gratuity in terms of the relevant statute.

In order to meet this liability, a provision is carried forward in the balance sheet, in a manner computed

using the prescribed formula in appendix E of LKAS 19. The resulting difference between brought

forward provision at the beginning of a year and the carried forward provision at the end of a year is

dealt within the income statement.

However, under the payment of gratuity Act No. 12 of 1983, the liability to an employee arises only on

completion of 5 years of continued service.

The gratuity liability is not funded nor actuarially valued.

b) Defined Contribution Plans – Employees’ Provident Fund & Employees’ Trust Fund

Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund

Contributions in line with the respective statutes and regulations. The Company contributes 12 % and

3 % of gross emoluments of employees to Employees’ Provident Fund and Employees’ Trust Fund

respectively.

3.9 Income Statement

Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company

and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is

measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes.

The following specific criteria are used for the purpose of recognition of revenue.

a) Sale of Goods

Revenue from the sale of goods is recognised when the significant risks and rewards or ownership of

the goods, have passed to the buyer, usually on dispatch of the goods.

b) Interest

Revenue is recognised on a time proportion basis that takes into account the effective interest rate on

asset.

c) Dividends

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

d) Rental incomeRental income arising on investment properties is accounted for on a straight-line basis over the

lease terms.

h) OthersOther income is recognised on an accrual basis.


31st March 2013

20


notes to the accounts31st March 2013

2013 2012Rs. Rs.

01 REVENUERepresents the final invoiced value of the goods net of all discount & rebate.

Segmental Analysis of SalesManufactured Product 26,221,309) 26,350,830)Traded Product 39,787,423) 48,572,149)

66,008,732) 74,922,979)

02 OTHER OPERATING INCOMEBank interest on the short term deposits, dividend income and profit on sale of investments.Interest on Fixed Deposits 39,740) 34,832)Investment income 7) 7)Profit on Sale of Investment –)))) 151,192)Sundry income 41,755) 6,900)Investment write off (107) (3,695)

81,395) 189,236)

03 OPERATING PROFIT is stated after chargingDirectors Remuneration 90,000) 100,000)Depreciation 1,593,723) 1,741,039)Staff Cost ( Note 03.1 ) 6,625,461) 5,906,493)Audit Fees 101,819) 90,970)

03.1 Staff CostSalaries,Wages,Bonus 5,732,383) 5,208,569)E.P.F. & E.T.F. - Defined Contribution Plan 688,506) 565,097)Gratuity - Defined Benefit Plan 204,572) 132,827)

Total 6,625,461) 5,906,493)

04 FINANCE COSTImport loan interest 2,450,413) 1,658,973)Loan interest 244,769) 18,139)Debit Tax –)))) 10,763)Bank Charges 54,300) 59,637)Overdraft Interest 2,371) –)))))

2,751,853) 1,747,511)

05 INCOME TAX EXPENSECurrent Income tax 12% 318,042) 461,383)Deferred taxation Charge 239,384) (925,118)

557,426) (463,735)

05.1 Reconciliation of the Accounting Profit and Taxable ProfitAccounting Profit 1,969,934) 2,977,526)Aggregate Disallowed Items 1,947,814) 2,143,138)Aggregate Allowable Expenses (1,307,139) (1,310,637)Aggregate Allowable Income 39,740) 34,832)Taxable Profit 2,650,349) 3,844,859)Statutory Income tax Rate % 12%) 12%)Income Tax expenses 318,042) 461,383)Effective tax rate ( Excluding deferred tax ) 16.1) 15.5)

05.2 Deferred Tax has been computed using the current effective tax rate.

21


notes to the accounts (continued)

31st March 2013

06 BASIC EARNING PER SHAREBasic earning per share is calculated by dividing the net profit for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

2013 2012Rs. Rs.

Amount used as the numeratorNet profit attributable to equity share holders of the company 1,412,509 3,437,566

Number of ordinary shares used as the denominatorWeighted average number of ordinary shares 666,562 666,562Basic Earning Per Share (Rs.) 2.12 5.16

07 DIVIDENDSDividend Interim –)))) 999,843Final 1,333,124 999,843

1,333,124 1,999,686

Dividend per Share Rs.2.00 Rs. 3.00Dividend payout ratio 0.96 0.58

Dividend Proposed/Payable

The proposed first & final dividend of Rs.2.00 for the year ended 31.03.2013.in accordance with Sri lankaAccounting Standards No. 10 (LKAS 10) Event after the balance sheet date this proposed final dividend hasnot been recongnised as a liability at 31.03.2013 however in computing the dividend per share this proposeddividend has been taken into consideration.

08 PROPERTY, PLANT & EQUIPMENT

Plant & Motor Office Total

Building Machinery Vehicles Equipment

FREEHOLD ASSETS

Cost /Valuation

Balance as at 1st April 2012 34,499,999 9,585,134) 5,197,148) 2,457,006 51,739,287)

Additions 30,000 275,709) –))))) 16,591 322,300)

Revaluation –))))) 10,089,657) (1,148,160) –))))) 8,941,497)

Disposals –))))) –))))) –))))) –))))) –)))))

Balance as at 31st March 2013 34,529,999 19,950,500) 4,048,988) 2,473,597 61,003,084)

DepreciationBalance as at 1st April 2012 859,050 7,152,726) 3,151,789) 1,801,685 12,965,250)

Charge for the Period 673,419 244,098) 511,340) 164,866 1,593,723)

Disposals –))))) –))))) –))))) –))))) –)))))

Revaluation –))))) (7,396,824) (2,050,667) –))))) (9,447,491)

Balance as at 31st March 2013 1,532,469 –))))) 1,612,462) 1,966,551 5,111,482)

W.D.V. as at31st March 2012 33,640,949 2,432,408) 2,045,359) 655,321 38,774,038)

W.D.V. as at31st March 2013 32,997,530 19,950,500) 2,436,526) 507,046 55,891,603)

22



31st March 2013

8.1 Revaluation of Property Plant & Equipment

The building was revalued during the financial year 2010/2011 and Plant & Machinery, Motor Vehicle were

revalued during the financial year 2012/2013 by an independent valuer. The result of that revaluation was

incorporated in this financial statement. Such assets were valued on an open market value for an existing

use basis. The surplus arising from the revaluation was transferred to revaluation reserve.

The carrying amount of revalued assets, that would have been included in the financial statements, had the

assets been carried at cost are as follows

Class of Asset Cost Cumulative Net Carrying Net Carrying

Rs. Depreciation Amount 2013 Amount 2012Rs. Rs. Rs.

Freehold buildings 8,617,188 2,894,318) 5,722,871) 5,895,214)

Plant & Machinery 9,860,843 7,396,824) 2,464,019) 2,432,408)

Motor Vehicles 5,197,148 3,663,129) 1,534,019) 2,045,359)

For the year ended 31st March 2013 2012 2011Rs. Rs. Rs.

09 OPERATING LEASE

Land 3,858,030) 3,858,030) 3,858,030)

Less: Amortization (1,130,130) (1,091,160) (1,052,190)

Balance as at 31st March 2,727,900) 2,766,870) 2,805,840)

10 INTANGIBLE ASSETS

Software 43,350) –))))) –)))))

Less: Amortization (21,675) –))))) –)))))

Balance as at 31st March 21,675) –))))) –)))))

11 INVENTORIES

Raw Materials 19,801,716) 12,886,029) 9,130,131)Finished Goods 4,859,811) 5,750,832) 8,244,027)Work in Progress 2,021,382) 3,708,562) 4,155,747)Import in Suspense –))))) 1,399,947) –)))))

26,682,909) 23,745,370) 21,529,905)

12 TRADE & OTHER RECEIVABLES

Trade Debtors 22,433,643) 19,885,494) 20,002,390)Defence levy 13,453) 13,452) 13,452)Staff Loan 7,500) –))))) –)))))Income Tax Overpayment 175,797) (32,644) 25,256)Deposits Advances & Prepayments 3,150,374) 3,584,035) 3,678,224)

25,780,767) 23,450,336) 23,719,322)

23



31st March 2013

FOR THE YEAR ENDED 31ST MARCH 2013 2012 2011Rs. Rs. Rs.

13 SHORT TERM INVESTMENTFixed Deposit 375,000.00 375,000 375,000

Investment in Equity Securities

Unquoted InvestmentExchemie Limited –))))) –))))) 1,038,445

Quoted InvestmentEquities (Note 13.1) 3,523 3,629 7,324

378,523 378,629 1,420,769

13.1 Equities (Quoted)

As at 31 March 2013 2012 2011No of Cost Market No of Cost Market No of Cost Market

Shares Rs. Value Shares Rs. Value Shares Rs. Value

Union Bank PLC 200 5,000 3,400 200 5,000 3,500 200 5,000 7,160Laughf Gas Ltd 5 115 123 5 115 129 5 115 164

205 5,115 3,523 205 5,115 3,629 205 5,115 7,324

2013 2012 2011Rs. Rs. Rs.

14 CASH & CASH EQUIVALENTSFavourable Balance

Cash at Bank 2,311,792 3,572,656 1,885,286Cash in Hand 4,960 7,002 6,000

2,316,752 3,579,658 1,891,286

15 STATED CAPITAL

Authorised2,500,000 ordinary shares of Rs.10/- each 25,000,000 25,000,000 25,000,000

Issued called up and fully paid666,562 Ordinary Shares of Rs.10/- each 6,665,620 6,665,620 6,665,620

16 DEFERRED TAX LIABILITIES

Balance as at 1st April 4,725,746 5,650,863 3,405,658Deferred tax on revaluation 2,206,679 –))))) 1,918,207Provision / (Reversal) made during the Year 239,384 (925,118) 326,999

7,171,808 4,725,745 5,650,863

17 RETIREMENT BENEFIT OBLIGATION - GRATUITY

Balance as at 1st April 864,112 731,285 692,926Provision made during the year 204,572 132,827 302,608Payment made during the year (119,350) –))))) (264,249)

949,334 864,112 731,285

The Key assumptions used by the actuary includes the followingRate of interest 12% 12% 12%Average Salary increment rate 3% 3% 3%Staff Turnover factor 4% 4% 4%Retirement age 55 years 55 years 55 years

24


18 TRADE & OTHER PAYABLESAccrued Expenses 749,504 763,508 874,957E.S.C Payable –))))) –))))) 124,510Security Deposit 58,972 58,972 –)))))Dividend Payables 948,385 884,665 819,147

1,756,861 1,707,145 1,818,614

19 POST BALANCE SHEET EVENTSSubsequent to the Balance sheet date , no circumstances have arisen which require adjustments to ordisclosure in these Financial Statements

20 CAPITAL COMMITMENT & CONTINGENCIESThere were no material capital commitments as at 31st March 2013.

21 EXPLANATION OF TRANSITION TO NEW SRI LANKA ACCOUNTING STANDARDS (SLAS)In preparing its opening new SLAS Statement of Financial Position, the company has adjusted amountsreported previously in Financial Statements prepared in accordance with the previous SLAS. An explanationof how the transition from previous SLAS has affected the company’s financial position and financialperformance is set out in the following tables and notes.

Reconciliation of Equity as at 01 April 2011 (Date of Transition to SLFRS)

Previous Effect of transition New SLFRS/LKAS

SLAS (Rs.) to SLAS (Rs.) (Rs.)

NON-CURRENT ASSETSProperty, Plant and Equipment 39,623,719 –)))) 39,623,719Lease Hold Land 2,805,840 –)))) 2,805,840

TOTAL NON CURRENT ASSETS 42,429,559 –)))) 42,429,559

CURRENT ASSETSInventories 21,529,905 –)))) 21,529,905Trade & Other Receivables 23,694,066 –)))) 23,694,066Short Term Investment 1,418,560 (2,209) 1,420,769Income Tax Refund 265,765 –)))) 265,765Cash & Cash Equivalents 1,891,286 –)))) 1,891,286

TOTAL CURRENT ASSETS 48,799,582 (2,209) 48,801,791

TOTAL ASSETS 91,229,141 (2,209) 91,231,350

EQUITY AND LIABILITIESCAPITAL AND RESERVESStated Capital 6,665,620 –)))) 6,665,620Revaluation Reserve 29,930,354 –)))) 29,930,354General Reserve 15,141,299 –)))) 15,141,299Retained Earnings 17,937,810 (2,209) 17,940,019

Share holders Interest 69,675,083 (2,209) 69,677,292

NON-CURRENT LIABILITIESDeferred Tax Liabilities 5,650,863 –)))) 5,650,863Retirement benefit obligation - Gratuity 731,285 –)))) 731,285Term Loan 1,500,000 –)))) 1,500,000Commission Retained 119,598 –)))) 119,598

TOTAL NON CURRENT LIABILITIES 8,001,746 –)))) 8,001,746

CURRENT LIABILITIESTrade & Other Payables 999,467 –)))) 999,467Dividend Payables 819,147 –)))) 819,147Term Loan 500,000 –)))) 500,000Import Loans 11,233,698 –)))) 11,233,698

TOTAL CURRENT LIABILITIES 13,552,312 –)))) 13,552,312

TOTAL EQUITY AND LIABILITIES 91,229,141 (2,209) 91,231,350

2013 2012 2011Rs. Rs. Rs.


31st March 2013

25


Holdings No. of Total % %Shareholders Shareholding 2013 2012

1 - 1,000 409 74,941 11.2 7.4

1,001 - 10,000 30 77,644 11.7 13.7

10,001 - 100,000 2 73,246 11.0 12.8

100,001 - and Over 1 440,731 66.1 66.0

442 666,562 100 100

MAJOR SHAREHOLDERS AS AT 31ST MARCH 2013

Shareholders No. of shares % %

2013 2012 2013 2012

Sigma Holdings (Pvt) Ltd 440,731 440,221 66.1 66.0

Dr T Senthiverl 43,500 43,500 6.5 6.5

K S Somapala 29,746 29,746 4.5 4.5

D S S Kumara 7,436 7,436 1.1 1.1

D P Kumara 7,436 7,436 1.1 1.1

H W M Woodward 6,932 6,932 1.0 1.0

M M A Latiff 6,253 6,253 0.9 0.9

R M S Banda 4,180 800 0.6 0.1

R Udalagama 4,000 4,000 0.6 0.6

Dr M A M Arafath Akram 3,500 –)) 0.5 0.0

R G G Wijesuriya 2,935 –)) 0.4 –)

J Mylvaganam 2,466 2,466 0.4 0.4

The Estate of the late Mr A Y S Gnanam 2,254 2,254 0.3 0.3

S G N Herath 2,222 500 0.3 0.1

D Ekanayake 2,006 2,006 0.3 0.3

C C Gunawardena 2,000 2,000 0.3 0.3

D M Fernando 2,000 2,000 0.3 0.3

E De Silva 1,986 1,986 0.3 0.3

B R M S Gnanaratne 1,960 1,000 0.3 0.2

W H R C Wijesooriya 1,800 3,000 0.3 0.5

2013 2012Rs Rs

NET ASSET VALUE PER SHARE 129.72 106.11

MARKET VALUE PER SHAREHighest during the year 239.90 558.00

Lowest during the year 180.55 310.60

As at 31st March 199.00 395.00

PERCENTAGE OF SHARES HELD BY THE PUBLIC 34% 34%

DISTRIBUTION OF SHAREHOLDERS AS AT 31 MARCH 2013

26

form of proxy

I/We, the undersigned ....................................................................................... being a member/s of Industrial Asphalts

(Ceylon) PLC, hereby appoint ............................................. (name) of ............................................................................

(address)

J V R Joseph of Colombo (or failing him)

S R Ekanayake of Battaramulla (or failing him)

M C P Fernando of Chilaw (or failing him)

as my/our proxy to represent me/us and to vote for me/us and on my/our behalf for/or against the resolution and/or

to speak at the Annual General Meeting of the Company, to be held on 27th September 2013 and at any adjournment

thereof and at every poll which may be taken in consequence thereof

For Against

1. To receive the Audited Financial

Statements and the Report of the Directors

for the year ended 31st March 2013

2. To declare a first and final dividend of . Rs. 2.00 per share

3. To re-elect Mr M C P Fernando who retires pursuant to

to article 90 of the Articles of Association of the Company

4. To reappoint Cecil Arsecularatne & Co as Auditors of the

Company and to authorise the Directors to fix their

remuneration

5. To authorise Directors to determine contributions

towards donations.

............................................................

Signature

Signed this…….. day of ……….… 2013

Instructions as to the completion of Proxy Form

A member is entitled to appoint a proxy to attend and vote in is/her/their place.

A proxy holder need not be a member of the Company.

A member wishing to vote by proxy at the meeting may use the form enclosed and interpolate the ‘right to

speak’.

To be valid, the completed form of proxy must be lodged at the registered office of the Company not less than

48 hours before the meeting.

In the case of a Company /corporation the proxy must be under it’s Common Seal, which should be

affixed and attested in the manner prescribed by its Articles


Date post:	26-Sep-2020
Category:	Documents
Upload:	others
View:	5 times
Download:	0 times

Industrial Asphalts (Ceylon) PLC · Industrial Asphalts (Ceylon) PLC notice of annual general...

Documents