Singer Sri Lanka PLC
Debenture 2012
Introductory Document Bank of Ceylon First Capital Asset Management Limited
Trustee Managers
SINGER (SRI LANKA) PLC
Introductory Document
Listing of 6,440,000 Fully paid, Unsecured, Redeemable, Senior, ‘A’ Rated Three year (2012/2015)Debentures of LKR 100/= each
2 Singer (Sri Lanka) PLC Debenture 2012-2015
TABLE OF CONTENTS
1.0 DETAILS OF THE ENTITY 05
2.0 CORPORATE INFORMATION – SINGER (SRI LANKA) PLC 08
3.0 CAPITAL STRUCTURE 14
4.0 PROFILE OF THE COMPANY 15
5.0 MANAGEMENT 19
6.0 FINANCIAL INFORMATION 25
7.0 CORPORATE GOVERNANCE PRACTICES 26
8.0 LISTING DEBT –TRUSTEE /DIRECTORS 27
9.0 FITCH RATING REPORT 28
10.0 OTHER REQUIRMENTS 30
11.0 ABBREVIATIONS 30
12.0 DECLARATION BY THE DIRECTORS 31
ANNEXURES
I InterimFinancial Statements as of 30th September 2012
II Annual Report for the financial years ending; - 31st December 2011 - 31st December 2010 - 31st December 2009
III Member Firms of Colombo Stock Exchange
IV Trust deed
3 Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
This Introductory Document is dated 12th November 2012
This Introductory Document has been prepared by Singer (Sri Lanka) PLC. The Directors of the Company, collectively and individually, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material respect and that there are no other material facts, the omission of which, would make any statement herein misleading. While Singer (Sri Lanka) PLC has taken reasonable care to ensure full and fair disclosure, it does not assume any responsibility for any investment decisions made by the investors based on information contained herein. In making an investment decision, prospective investors must rely on their own examination and assessments of the Company including the risks involved.
No person is authorized to give any information or make any representation in connection with the Debentures other than the information and representations contained in this Document and if given or made, any such information or representation must not be relied upon as having been authorized by the Company.
The delivery of this Introductory Document shall not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of Singer (Sri Lanka) PLC since the date of the Introductory Document.
‘The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of information in this Introductory Document. However, the CSE assumes no responsibility for the accuracy of any of the statements made, opinions expressed or reports included in this introductory document.’
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 01. DETAILS OF THE ENTITY
Company Name Singer (Sri Lanka) PLC
Head Office & Registered Office No. 80, Nawam Mawatha, Colombo 2, Sri Lanka Telephone: 94-11-2316316 (13 lines) Facsimile: 94-11- 2423544 E-mail: [email protected] Website: www.singersl.com
Date of incorporation and place Public company with limited liability Incorporated as a public company in Sri Lanka on 30th December 1974 under the Companies Ordinance and re-registered under the Companies Act No. 07 of 2007 on 13th June 2008.
Company Registration Number PQ 160
Secretary to the Company A.C.M. Irzan FCMA (UK)
Auditors/Reporting Accountants KPMG Ford, Rhodes, Thornton & Co. Chartered Accountants No. 32A, Sir Mohamed Macan Markar Mawatha, P.O. Box 186, Colombo 3
Managers First Capital Asset Management Limited No.75, Arnold Ratnayake Mawatha Colombo 10 Tel: 94-11-2639840 94-11-2639898 Fax: 94-11-2639819
Registrars Business Intelligence Ltd No. 8, Tickell Road Colombo 8 Tel: 94-11-5519900 Fax: 94-11-5579950
Trustee Bank of Ceylon Investment Banking Division 23rd Floor, Head Office No. 4, Bank of Ceylon Mawatha Colombo 1
Tel: 94-11-2448348, 94-11-2542167 Fax:94-11-2346842
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Introductory Document – Singer (Sri Lanka) PLC Singer(SriLanka)PLC Debenture2012-2015
1.1 SALIENT FEATURESAT A GLANCE Instrument type Senior, Rated, redeemable, unsecured and fully paid three year (2012-2015) Debentures carrying fixed rate and interest payable quarterly, until the expiry of three years respectively from the date of allotment. Number of Debentures issued 6,444,000 (Six Million Four Hundred Forty Four Thousand) Debentures.
Number of Debentures allotted 6,440,000 (Six Million Hundred Forty Thousand) Debentures. and to be listed Face value of a Debenture Rs100/- Tenure of Debentures 3 years(2012/2015) Debenture Rating Credit Rated ‘A’(Stable outlook) by Fitch Rating Lanka Ltd Listing The Company will be seeking a listing on the Main Board of the Colombo Stock Exchange by way of an Introduction Coupon Interest rate Interest is payable quarterly,(Nominal Interest Rate) Fixed Coupon Interest rate of 17.00%p.a.(18.11%p.a.AER) Number of Debentures issued Type of Debenture Number Type– A 6,440,000 Type– B None Method of allotment Privateplacementofferedonaprospectusandallottedon25thOctober2012. Prospectus was dated 28thSeptember2012. Date of allotment 25thOctober2012 No. of debentures allotted Type A- 6,440,000(Six Million Four Hundred Forty Thousand), Type B- None Redemption of principle On completion of 3years from the date of Allotment.(i.a. payable on30th money/ Maturity Date September2015. Mode of payment at maturity Repayment of the capital will be made by crossed account payee only cheques or By RTGS transfer up on instructions by the registered Debenture Holder. Interest Payment Dates Year Interest payment date 2012 First Interest Payment Date 31st December2012 2013 31stMarch2013 30thJune2013 30thSeptember2013 31stDecember2013 2014 31stMarch2014 30thJune2014 30thSeptember2014 31stDecember2014 2015 31stMarch2015 30thJune2015 30thSeptember2015 In order to accommodate the Debenture interest cycles in the Debt Trading System(DEX)the payment of interest should not include debenture holders holding debentures in the DEX as at the last day of the payment cycle(quarterly), but one day prior to the payment date(entitlement date).If the entitlement date is a holiday, interest should be calculated including the entitlement date.” The interest calculation shall be based up on the “Actual /Actual” number of days in each interest payment period.
Introductory Document– Singer (Sri Lanka) PLC 6 Singer (Sri Lanka) PLC Debenture 2012-2015
1.2 PRINCIPAL FEATURES OF THE DEBENTURE
1.2.1 Instrument type
Senior, unsecured, redeemable, rated and listed three year (2012/2015) Debentures carrying a fixed interest payable quarterly, until the expiry of three years respectively from the date of allotment. These debentures will be listed on the main board of the Debt System of the Colombo Stock Exchange by way of an Introduction.
1.2.2 Objectives of the issues.
The main objective of the issue is to raise long term funds to settle the short term obligations and re-structure the balance sheet of the Company.
The Funds raised through the debenture will be utilized to retire the company’s short-term obligations further strengthening the balance sheet of the company.
1.2.3 Interest
The debentures consist of one interest option for the investors. The interest for all debentures will be payable quarterly and the interest payment dates for the fixed option would be 31st March, 30th June, 30th September and 31st December each year until maturity.
The first interest period will commence from the date of Allotment until 31st December 2012.For the fixed option, the last interest period will be from the last interest payment date (30th September 2015) until the date of redemption of the Debentures.
The interest and all other charges shall accrue from day to day and interest shall be computed on the basis of actual number of days in an Interest Period. i.e. on an actual / actual basis.
1.2.4 WHO MAY INVEST?
a) Citizens of Sri Lanka who are resident in Sri Lanka and above 18 years of age.
b) Corporate bodies and societies registered/incorporated/established in Sri Lanka and authorized to invest in Debentures.
c) Approved provident funds, trust funds and contributory pension schemes registered /incorporated/established in Sri Lanka and authorized to invest in Debentures.
d) Foreign institutional investors, corporate bodies, incorporated out side Sri Lanka and individual residents out side Sri Lanka.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
2.0 CORPORATE INFORMATION – SINGER SRI LANKA PLC
2.1 THE BOARD OF DIRECTORS Name & Designation Description Hemaka Amarasuriya Mr. Amarasuriya joined the Board of Singer (Sri Lanka) PLC on 1st Chairman, Non April, 1979. Appointed Deputy Managing Director on 24th August 1983, Executive Director Country Manager Singer Singapore 2004, Managing Director on 1st January 1985, Chairman on 1st November 1986. Appointed as the Non- Address: Executive Chairman on 1st July 2010. No. 30/15 Park Road, Colombo. 05 He is the Chairman and former Managing Director of Singer Industries (Ceylon) PLC, Regnis (Lanka) PLC, Regnis Appliances (Pvt) Ltd., Singer Finance (Lanka) PLC, Reality Lanka Ltd, and Chairman of National Development Bank PLC.
He holds Directorships in NDB Capital Ltd., Bangladesh, Bata Shoe Company of Ceylon Ltd., Bata Exports (Pvt) Ltd., Equity Investments Lanka Ltd., TNL Radio Network (Pvt) Ltd., ACL Cables PLC, Tarmac Quarry Products (Private) Ltd., C.W. Mackie PLC, Micro Cars (Pvt) Ltd., Lanka Aluminium PLC, and ACME Printing & Packaging PLC. He is a Vice-President of Retail Holdings Ltd., USA and former Senior Vice- President of Singer Asia Ltd.
Mr. Amarasuriya is a founder President of the Industrial Association of Sri Lanka. Currently, Chairman of Regional Industrial Service Committee (RISC), Southern Province. Former Chairman of Employers’ Federation of Ceylon. Served on the Presidential Task Force on Science & Technology, and on the Securities and Exchange Commission & Advisory Committee on Company Law at different times.
He is a Fellow of The Institute of Chartered Accountants of Sri Lanka, Fellow of the Chartered Institute of Management Accountants - UK, Fellow of the Chartered Institute of Marketing UK and holds a Diploma in Marketing Management & Strategy from New York University, USA.
Asoka Pieris Mr. Pieris joined the Board of Singer (Sri Lanka) PLC on 1st August Director & Group Chief 2004. Appointed as Managing Director and Group Chief Executive Executive Officer , Officer on 1st July 2010. Executive Director He is the Director and Group Chief Executive Officer of Singer Industries Address: (Ceylon) PLC, Regnis (Lanka) PLC, Singer Finance (Lanka) PLC, No.56/17 Kumaragewatte Reality Lanka Ltd. and Regnis Appliances (Pvt) Ltd. Director of Btindia Road, Battaramulla. Ltd., Brand Trading (India) Private Ltd., Vice-President of Singer Asia Ltd. and Retail Holdings N.V.
Mr. Pieris is an Associate Member of The Institute of Chartered Accountants of Sri Lanka. Fellow Member of the Chartered Institute of Management Accountants, UK.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 Dr. Wijeyesinghe joined the Board of Singer (Sri Lanka) PLC, on 13th Dr.Gamini February 1995. He is a Director of Singer (Sri Lanka) PLC., Singer C.B.Wijeyesinghe Industries (Ceylon) PLC., Regnis (Lanka) PLC, NDB Venture Independent Non- Investments (Pvt) Ltd., Ayojana Fund (Pvt) Ltd., Fintravels Ltd. and Executive Director Ceylon Trading Co. Ltd.
Dr. Wijeyesinghe is a Fulbright Scholar - attended Ohio State University, USA, and Graduate School of Management. A past president of The Institute of Chartered Accountants of Sri Lanka and the Organisation of Professional Association of Sri Lanka.
He is a former Council Member of the Commonwealth Association of Corporate Governance, Member of the External Audit Committee of the International Monetary Fund, Member of the External Audit Committee of the Central Bank of Sri Lanka and precedent partner KPMG Ford, Rhodes, Thornton & Co. and member of the KPMG, Asia Pacific Board and FAPA (UK) (retired).
Dr. Wijeyesinghe is a Fellow of The Institute of Chartered Accountants of Sri Lanka and a Fellow of the Institute of Certified Management Accountants of Sri Lanka.He has been conferred a Doctorate (Honoris Causa) by the Postgraduate Institute of Management affiliated to the University of Sri Jayewardenepura.
Dr. Saman Kelegama Dr. Kelegama joined the Board of Singer (Sri Lanka) PLC as Director on Independent, Non- 1st June 2006. He is a Director of Singer Finance (Lanka) PLC, Regnis Executive Director (Lanka) PLC, S C Securities and Colombo Stock Exchange.
Dr. Kelegama is an Executive Director of Institute of Policy Studies of Sri Lanka, Fellow, National Academy of Sciences in Sri Lanka, former President of Sri Lanka Economic Association and author of several publications on the economy of Sri Lanka. He holds D.Phil (Economics) from Oxford University, UK.
Deshabandu Ajit Deshabandu Ajit Jayaratne joined the Board of Singer (Sri Lanka) PLC as Jayaratne, Director on 1st June 2006. Independent Non- Executive Director He is a Director of Singer Industries (Ceylon) PLC, ACL Cables PLC, Overseas Realty (Ceylon) Ltd., C.W. Mackie PLC, Colombo Fort Land & Building Company PLC, Colombo Fort Investment PLC, Colombo Investment Trust PLC, Colonial Motors PLC, York Arcade Holdings PLC and Mireka Capital Lanka Ltd.
He is a Former Chairman of Colombo Stock Exchange and Ceylon Chamber of Commerce and Former High Commissioner of Sri Lanka to Singapore.
Mr. Jayaratne holds a B.Sc. (Economics) from University of Southampton, and a Fellow of The Institute of Chartered Accountants of Sri Lanka, Fellow of the Institute of Chartered Accountants of England & Wales.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 Peter O’Donnell, Mr. O’Donnell joined the Board of Singer (Sri Lanka) PLC on 1st Non-Executive Director October 2003. He is a Managing Director of UCL Asia Ltd, (Hong Kong), Director, Singer Asia Ltd, Singer Pakistan Ltd, Observer, Singer Thailand Public Company Ltd.
Mr. O’Donnell is an alumnus of both Harvard College and Harvard Business School.
John J. Hyun, Mr. Hyun joined the Board of Singer (Sri Lanka) PLC on 10th June Non-Executive Director 2011.Mr. Hyun is a Managing Director of UCL Asia, one of Hong Kong’s larger direct investment groups in terms of liquid capital.
Mr. Hyun began his career in finance more than 17 years ago as part of Bankers Trust’s Asia Private Equity investment team based in Hong Kong before relocating to Seoul to help establish its Mergers, Acquisitions & Advisory group.
He returned to Hong Kong in 1999 with Investor Asia, the Asian operations of Investor AB, the Swedish industrial holding group controlled by the Wallenberg family. Mr. Hyun joined UCL in 2003.
He is a Director of Direct Asia Insurance (Holdings) Pvt Ltd., KCS Ltd., Singer Finance (Lanka) PLC and several Non-Profit Organizations active in Asia. He is an alumnus of the University of Chicago.
Gavin J. Walker, Mr. Walker joined the Board of Singer (Sri Lanka) PLC, as Director on Non-Executive Director 1st November 2005.Mr. Walker is the President and Chief Executive Officer of Singer Asia Ltd. and was appointed to this position in August 2005.
Prior to joining the Company, Mr. Walker held offices as Managing Director and Chief Executive Officer of public quoted and private companies in the United Kingdom and South Africa.
Mr. Walker served as Chief Executive Officer of a multi-brand retailer of electrical appliances and furniture with operations in 16 African countries and Australia. Mr. Walker serves on the Board of a number of Singer Asia Subsidiaries.
V.G.K. Vidyaratne, Mr. Vidyaratne joined the Board of Singer (Sri Lanka) PLC on 1st August (Alternate) Executive 2004.Director of Regnis (Lanka) PLC, and Regnis Appliances (Pvt) Ltd., Director Reality Lanka Ltd.
Mr. Vidyaratne is a Alternate Director of Singer Industries (Ceylon) PLC and General Manager of Factories of the Singer Group, Sri Lanka and a Committee Member of the Industrial Association of Sri Lanka.
He holds following qualifications; B.Sc. (Hons.) Degree in Production/Mechanical Engineering, University of Peradeniya. MBA from the University of Southern Queensland, Australia. He is a Chartered Engineer and a Member of the Institute of Engineers, Sri
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 Lanka. Mahesh Wijewardene, Mr. Wijewardene joined the Board of Singer (Sri Lanka) PLC on 1st June (Alternate) Executive 2006. He is the Commercial Director of Singer (Sri Lanka) PLC and Director Member of the Singer Asia Sourcing Committee. He is also the Chairman of Ceylon Chamber of Commerce - Import Section.
Mr. Wijewardene is a former Chairman of the Sri Lanka-China Business Council. Serves in the Committee of the Ceylon Chamber of Commerce. Mr. Wijewardene holds Masters in Business Administration from the University of Southern Queensland and Diploma in General Management.
Priyath Salgado, Mr. Salgado is an Alternate Director of the Group and he joined the Board (Alternate) Executive of Singer (Sri Lanka) PLC on 15th May 2008. He is the Finance Director Director of Singer (Sri Lanka) PLC and Director of Singer Finance (Lanka) PLC.
Nasser Majeed, Mr. Majeed joined the Board of Singer (Sri Lanka) PLC on 14th February (Alternate) Executive 2011. He is the Director Marketing of Singer (Sri Lanka) PLC and a Director Director of Regnis Appliances (Pvt) Ltd
Kumar Samarasinghe, Mr. Samarasinghe joined the Board of Singer (Sri Lanka) PLC on 14th (Alternate) Executive February 2011. He is the Director of Sales and Sewing Marketing of Director Singer (Sri Lanka) PLC.
Mr. Samarasinghe holds a Diploma in Business Administration and Diploma in Marketing and MBA from University of London.
A.C.M. Irzan, Mr.Irzan acts as the Secretary to the Board since 15th May 2008. He is an (Alternate) Executive Alternate Director of Singer Industries (Ceylon) PLC, Group Factory Director Controller and Chief Financial Officer of Regnis (Lanka) PLC and Regnis Appliances (Pvt) Ltd. He is fellow member of Chartered Institute of Management Accountants. He also holds an MBA in Marketing from the University of Colombo.
2.1 DIRECTORSHIPS OF THE DIRECTORS OF THE COMPANY IN OTHER INSTITUTIONS AS AT 30TH OCTOBER 2012
Mr. Hemaka Amarasuriya 1. Singer Industries (Ceylon) PLC 2. Regnis (Lanka) PLC 3. Regnis Appliance (Pvt) Ltd 4. Singer Finance (Lanka) PLC 5. Reality Lanka Ltd 6. Retail Holdings Ltd - USA 7. National Development Bank PLC 8. NDB Capital Ltd, Bangladesh 9. Bata Shoe Company of Ceylon Ltd 10. Bata Exports (Pvt) Ltd 11. Equity Investments Lanka Ltd 12. TNL Radio Network (Pvt) Ltd
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 13. ACL Cables PLC 14. C.W. Mackie PLC
15. Micro Cars (Pvt) Ltd 16. Lanka Aluminium PLC 17. ACME Printing & Packaging PLC
Mr. Asoka Pieris 1. Singer Industries (Ceylon) PLC 2. Regnis (Lanka) PLC 3. Singer Finance (Lanka) PLC 4. Reality Lanka Ltd 5. Regnis Appliances (Pvt) Ltd 6. Singer Asia Ltd 7. Singer Corporation Ltd
Mr. Dr.Gamini C.B.Wijeyesinghe 1. Singer Industries (Ceylon) 2. Regnis (Lanka) PLC 3. NDB Venture Investments (Pvt) Ltd 4. Ayojana Fund (Pvt) Ltd 5. Fintravels Ltd 6. Ceylon Trading Co. Ltd
Dr. Saman Kelegama 1. Singer Finance (Lanka) PLC 2. Regnis (Lanka) PLC 3. S C Securities 4. Colombo Stock Exchange 5. Institute of Policy Studies of Sri Lanka
Deshabandu Ajit Jayaratne 1. Singer Industries (Ceylon) PLC 2. ACL Cables PLC 3. Overseas Realty (Ceylon) Ltd 4. C.W. Mackie PLC 5. Colombo Fort Land & Building Company PLC 6. Colombo Fort Investment PLC 7. Colombo Investment Trust PLC 8. Colonial Motors PLC 9. York Arcade Holdings PLC 10. Mireka Capital Lanka Ltd
Mr. Peter O’Donnell 1. UCL Asia Ltd 2. Singer Asia Ltd 3. Singer Pakistan Ltd 4. Singer Thailand Public Company Ltd
Mr. John J. Hyun 1. UCL Asia 2. Direct Asia Insurance (Holdings) Pvt Ltd
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 3. KCS Ltd 4. Singer Finance (Lanka) PLC 5. Several Non-Profit Organizations active in Asia
Mr. Gavin J. Walker 1. Mr. Walker serves on the Board of a number of Singer Asia Subsidiaries.
Mr. V.G.K. Vidyaratne 1. Regnis (Lanka) PLC, 2. Regnis Appliances (Pvt) Ltd. 3. Reality Lanka Ltd. 4. Singer Industries (Ceylon) PLC – Alternate Director
Mr. Mahesh Wijewardene None
Mr.Priyath Salgado 1. Singer Finance (Lanka) PLC.
Mr. Nasser Majeed 1. Regnis Appliances (Pvt) Ltd.
Mr. Kumar Samarasinghe None
Mr. A.C.M. Irzan – Secretary to the Board 1. Singer Industries (Ceylon) PLC – Alternate Director
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
3.0 CAPITAL STRUCTURE
3.1 STATED CAPITAL
STATED CAPITAL AS AT 30TH SEPTEMBER 2012
No. of shares Rs. 125,209,610 Ordinary Shares 626,048,050
FIVE YEARS SHARE CAPITAL SUMMARY AS AT 31ST DECEMBER 2011
Description 2007 2008 2009 2010 2011
No of Shares 62,604,805 62,604,805 62,604,805 62,604,805 125,209,610 Stated Capital 626,048,050 626,048,050 626,048,050 626,048,050 626,048,050 (Rs.)
At the Extraordinary General Meeting held on 31st March 2011, the shareholders approved a subdivision of shares on the basis of one into one. As such 62,604,805 Ordinary Shares were issued. Post subdivision Ordinary Sahres increased to 125,209,610. This has not altered the stated capital of the company which remains the same at Rs. 626,048,050/-
3.1.1 Capital Structure Disclosures
- There are no shares redeemed, re-purchased in terms of Sections 63, 64, 66, 67,68, 69, 93 and 100 of the Companies Act and of any reduction of stated capital in terms of Section 59 of the Companies Act immediately preceding two years of the date of the Introductory Document.
- There are no Securities of the same or another class subscribed or sold privately, in conjunction with the Introduction of debentures.
The company’s capital structure does not include non-voting, preference or any other class of shares. Also the company does not have any outstanding convertible debt securities.
3.2 There is no statutory restriction on the free transferability of securities.
3.3 PARTICULARS OF DEBT AND LOAN CAPITAL AS AT 30TH SEPTEMBER 2012 – COMPANY
Description Amounts LKR‘000’ 1) Overdraft 1,110,482,000.00 2) Bank Loans 4,708,516,989.14 3) Long Term Bank Loans 452,957,660.90 4) Debentures 1,199,000,000.00
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
3.4 LITIGATION DISPUTES AND CONTINGENT LIABILITIES AS AT 30TH SEPTEMBER 2012
. Guarantees given to banks and other lending institutions on behalf of Singer Industries (Ceylon) PLC amounts to Rs.75 million and RS.455 million respectively.
. Case number : CA (WRIT) NOP 67/2008- The company has provided bank guarantees amounting to Rs.130.2 million to the Director General of Customs to clear imports during the year under review pending completion of legal proceedings in the Court of Appeal and the case is still being heard in the Courts.
The bank guarantees related to alleged additional duty payable on imports, is being contested bythe Company in Courts. The company lawyers are of the opinion that there is no basis that the Company is liable for the additional duty hence, no provision is made in the Financial Statements.
. There are no penalties imposed by Regulatory and State authorities on the company.
4.0 PROFILE OF THE COMPANY
4.1 OVERVIEW OF THE COMPANY
Singer (Sri Lanka) PLC / (Singer) is a public quoted company with limited liability, based in Colombo and has been in Sri Lanka since 1877 (As a branch of Singer Sewing Machine Company, USA).
It was incorporated as a public company in Sri Lanka on 30th December 1974 under the companies Ordinance and re-registered under the Companies Act No. 07 of 2007 on 13th June 2008. The shares of the company are listed on the Colombo Stock Exchange. The company has a market capitalization of Rs. 16 billion (as at 15th August 2012).
The company is a consumer durable retailer/ wholesaler, and operates with the largest distribution coverage in Sri Lanka through its 351 sales stores. From 1963 to 1995, Singer Industries (Ceylon) Limited , Regnis Lanka and Singer (Sri Lanka) factory were established , from whence flowed an impressive line of locally manufactured items - Sewing Machines, Televisions, Refrigerators, Washing Machines, Two wheeled Tractors and domestic/agro Water Pumps and Sprayers. The company also turned out agro implements and furniture.
Singer Sri Lanka also ventured into a range of financial services, in partnership with the Commercial Bank of Ceylon Ltd. Singer floated Equity Investments Lanka Ltd., Commercial Leasing Co. Ltd., formally known as Commercial Capital Ltd, to offer equipment leasing, venture capital, fund management and merchant banking. Singer (Sri Lanka) PLC holds 75% of its subsidiary, Singer Finance (Lanka) PLC, which is a registered Financial company with a stable outlook (Fitch Rating ‘BBB+lka).The Company also invested in Telshan Network (Pvt) Ltd., which owns TNL TV and Radio stations.
Singer (Sri Lanka) PLC’s core business is white goods, consumer electronics and sewing machines, whilst it operates in nine different segments and owns three brands, namely Singer, Sisil and Unic.
Fitch Rating has affirmed the company a rating of “A” (lka) with a stable outlook. The agency has simultaneously affirmed Singer (Sri Lanka) PLC’s outstanding LKR 500m – 1,000m senior
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 redeemable debenture at “A” (lka).
The Board of Directors comprises of 12 members and it is lead by the Chairman Hemaka Amarasuriya who was appointed as Chairman of the Board on 1st November 1986 and as the Non-Executive Chairman on 1st July 2010. VISION
To be the foremost appliance retailer in Asia Pacific.
MISSION
To improve quality of life by providing comforts and conveniences at fair prices
4.1.1 PRINCIPAL ACTIVITIES OF THE COMPANY
Main Operating Segments Products and Services Under each segment
Domestic, Industrial General Sewing-Related Products Sewing Machines Merchandise Audios Other Electronic Consumer Electronics Televisions (Portable/Hi-Fi) VCD DVD Products Air- White Goods Refrigerators Washing Machines Deep Freezers Bottle Coolers Conditioners Fans Gas Burners & Microwave Kitchen-Related Products Table Tops Ovens Rice Cookers Ovens Electric Ovens Grinders Blenders
Dialog-Satellite Communications Computers Laptops CDMA Cellular Phones Dishes Wood, Layered Furniture Furniture Sofa Sets Steel Furniture
Transportation Motor Bikes Bicycles
Agro Water Pumps Paddy Threshers Tractors
4.2 TOP 10 SHAREHOLDING AS AT 30TH NOVEMBER 2012
Name No of % Shares 1 Singer (Sri Lanka) Bv 107,812,850 86.11% 2 Bank Of Ceylon A/C Ceybank Unit Trust 4,116,423 3.29% 3 Bank Of Ceylon A/C Ceybank Century Growth Fund 593,042 0.47% 4 Miss - Ranjani Eileen Weeraratne Jayasuriya 592,516 0.47% 5 Mrs. - Mihiri Virani Fernando 470,000 0.38% 6 Mrs. - Zohra Taher Jafferjee 330,890 0.26% 7 Mrs. - Anoma Kamalika Amarasuriya 178,970 0.14% 8 Sri Lanka Insurance Corporation Ltd-General Fund 177,500 0.14% 9 Dr. - Nimal Ebenezer Herat Sanderatne 175,626 0.14% 10 Sampath Bank Plc/Capital Trust Holdings Private Limited 148,206 0.12%
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
4.3 DEGREE OF DEPENDENCE ON CUSTOMER AND SUPPLIERS.
Singer is not significantly dependent on any key suppliers and/ or customers. Singer is not over exposed to any particular customer or a supplier. The nature of the business is such; it is the normal course of business for the company to have a wide base of customers and suppliers.
4.4 DETAILS OF THE GROUP STRUCTURE
Singer (Sri Lanka) BV holds 86.11% of Singer (Sri Lanka) PLC, Corporate information of Singer (Sri Lanka) BV is as follows;
Singer (Sri Lanka) BV is incorporated in Netherlands on 12th July 1991 Board of Directors of Singer Sri Lanka BV as at 30th November 2012 – Trust International Management (T.I.M) BV Top ten Shareholders of Singer (Sri Lanka) BV as at 30th November 2012- 100% owned by Singer Asia Holdings BV
Singer Finance (Lanka) PLC is a 80.40% owned subsidiary of Singer (Sri Lanka) PLC and registered as a finance company with the Central Bank of Sri Lanka.
The principal business activities of SFLL are the acceptance of deposits from the general public and financing of Leasing and Hire Purchase facilities to the SME and other sectors in the country.
Reality Lanka is an associate company of Singer (Sri Lanka) PLC and it holds 40% of Reality Lanka Ltd’s shares.
GROUP STRUCTURE
UCL Asia Partners LP Retails Holdings NV Mr. Gavin Walker
54.1% 41.1% 4.8%
Singer Asia Holdings BV
100%
Singer (Sri Lanka) BV
86.11%
Singer (Sri Lanka) PLC
80.4% 40%
Singer Finance (Lanka) PLC Reality Lanka Ltd
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
Retail Holdings N.V is a Curacao (formally the Netherlands Antilles) public company that is the successor company to the Singer Company N.V and is predecessor companies. The company, formally know as Singer N.V., changed its name to Retail Holdings N.V. following the sale of the Singer Worldwide sawing business and trademark in 2004. Retail Holdings NV has no operating activities other than those carried out through Singer Asia.
4.5 EMPLOYEES
The permanent employee’s details as at 30th September 2012 are as follows;
Total no of Employees 1,395 Total no of Senior Managers 37
Singer has entered into two agreements with the labor unions with respect to wages for a period of two years and the agreement is renewable thereafter.
Name of the Labor Union Agreement Date Ceylon Intercompany Workers Union 15.12.2010 Intercompany Union 01.04.2012
4.6 FUTURE PLANS
In future, towards the latter part of 2012 the company is intending to complete opening 30 Singer Mega shops in year 2012 including 2 new Mega stores. Also Singer is venturing into a new business, Insurance Brokerage which is a new industry to Singer altogether. Singer is also looking forward to increase its internal production capacity by expanding manufacturing facility of washing machines, sofas (Furniture) and to recommence SKD assembly of refrigerators internally. Currently the company is operating at full capacity expansion of existing level of production.
Hence it’s vital for the company to increase its operation capacity to match the demand that is predicted to grow in the future by the company as the Government of Sri Lanka has aimed to improve the per capita income to USD $4,000 which is expected to increase the public purchasing power.
The company will finance the operational capacity expansions and business network expansions through debt finance, preferably by obtaining bank loans.
However, there are risks pertaining to the above expansion plans such as the expected demand increase not materializing, risk of inflation rate increasing which will not leave sufficient disposable income to be spent on non-essential goods, luxury goods as well as for investments such as obtaining insurance policies, which is the industry that Singer is looking forward to get into.
Also interest rate risk might restrict the company’s borrowing capacity to finance the expansions. Foreign Exchange rates increasing might risk Singer’s ability to sell goods at a fair price as price increase will lead to increased raw material prices for the electronic appliances and furniture produce by Singer.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 4.7 CONTROL ENVIRONMENT
Risk is an integral part of any business. It is a matter of identifying the sources of risk, their likelihood of occurrence and impact, and then developing comprehensive framework to address them. Over the years Singer has developed a set of clear risk management objectives and a well- established strategy to deliver them, through core risk management processes.
At a strategic level, the company’s risk management objectives are:
. To identify the Company’s significant risks. . To formulate the Company’s Risk Appetite and ensure that business profile and plans are consistent with it. . To optimize risk/return decisions by taking them as closely as possible to the business, while establishing strong and independent review and challenge structure. . To ensure that business growth plans are properly supported by effective risk infrastructure . To manage risk profile to ensure that specific financial deliverables remain possible under a range of adverse business conditions. . To help executives improve the control and co-ordination of risk taking across the business.
5.0 MANAGEMENT
5.1 CEO & SENIOR MANAGEMENT
Asoka Pieris Executive Director/CEO No. 56/7 Kumaragewatte Road Battaramulla
Mr. Pieris joined the Board of Singer (Sri Lanka) PLC on 1st August 2004. He was appointed as Managing Director and Group Chief Executive Officer on 1st July 2010.
He holds Directorship in the following companies. Director and Group Chief Executive Officer of Singer Industries (Ceylon) PLC, Regnis (Lanka) PLC, Singer Finance (Lanka) PLC, Reality Lanka Ltd. and Regnis Appliances (Pvt) Ltd. Director of Btindia Ltd., Brand Trading (India) Private Ltd., Vice-President of Singer Asia Ltd. and Retail Holdings N.V.
He is an Associate Member of The Institute of Chartered Accountants of Sri Lanka and Fellow Member of the Chartered Institute of Management Accountants, UK.
Chief Executive is/was NOT involved in the following events:
A petition under bankruptcy laws filed against such a person or any partnership in which he was a partner or any corporation of which he was as an executive officer.
A conviction of fraud, misappropriation or breach of trust or any other similar offence which the CSE considers a disqualification.
The subject of an order, judgment or ruling of any court or competent jurisdiction temporary enjoining him from acting as an investment advisor, dealer in securities, director or employee of a financial institution or engaging in any type of business practice or activity.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 SENIOR MANAGEMENT OF THE ENTITY Name Designation Work Experience R.S.Wijeweera Chief Executive Officer Mr. Wijeweera joined Singer Group in 2004 as the – Singer Finance Lanka CEO of Singer Finance Lanka Ltd, and admitted to the PLC Board as a Director in 2008.
He possesses 25 years of exposure in holding Senior Management Positions in Finance & Leasing Companies in Sri Lanka.
Shyam Ramanathan Director Logistics Mr. Ramanathan joined Singer Group on 1st September 1980. He was appointed as the Director Logistics of Singer (Sri Lanka) Ltd on 1st Jan.2005.
Later he was appointed as an Alternate Director of Singer Finance [Lanka] Plc from 13th November 2008
Chitral Perera Director – Human Mr. Perera joined Singer Group as Manager Human Resources Resources on 17th November 1997. He was appointed as Director Human Resources of Singer (Sri Lanka) Ltd on 2nd January 2002.
Mr. Perera severed in Sri Lanka Navy as a commissioned officer from 15th December 1975 to 16th November 1997 and retired in the rank of Commander.
Ajith Paranavitane Director IT Mr. Paranavitane posses Twenty Nine Years of experience in the IT industry.
He commenced his career in 1983 as a Software Engineer working for a Software vendor Data Management Systems Ltd.
Mr. Paranavitane subsequently was promoted as the Software Manger and in 1987 left Data Management System in order to join Singer.
He joined Singer in July 1987 as the Manager IT and was responsible for setting up the IT division of Singer Sri Lanka
He left Singer in late 1998 and worked in for a period of one year in 1999 as a Senior AS400 Consultant to a consulting firm based in New Jersey and rejoined Singer as Deputy Director IT in Year 2000. He was subsequently promoted as the Director IT.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
Mr. Premalal De Director Operations Mr. Silva joined Singer Group in 1980 as District Silva Manager.
Later he was promoted as Area Manager – Middle Management Grade in 1982, as Senior Management as Sales Manager – Wholesale in 1986, got promoted as Deputy Director Sales in 2004, as Key Management as Sales Director in 2006 also got Re-designated as Director Operations to be responsible for all Sales Channels excluding Singer Plus Channel in 2009.
Mr. Silva holds a Diploma in Sales Management from National Institute of Business Management. B.T.L.Mendis Senior Mr. Mendis joined Singer Group in Nov 1998. Manager Appointed as Senior Manager Commercial of Singer Commercial (Sri Lanka) Ltd. in 2007.
K.K.L.P. Yatiwella Group Finance Manger Mr. Yatiwella joined Singer Group in March 2003. He was appointed as the Finance Manager - Senior Management Grade of Singer (Sri Lanka) PLC in 2006.
H.A.P.S.Perera Factory Manager Mr. Perera joined Singer (Sri Lanka) PLC in 1994 as Internal Auditor. He was appointed as Assistant Accountant (SSL Factory) in 1997, and then promoted to the following designations: Cost Accountant (SSL Factory) in 1999, Factory Controller (SSL Factory) in 2005 and Manager (SSL Factory) in 2011.
Mr. Motte joined as a Trainee District Manager January R.C.M.De La Motte. Sales Manager – 1981 Wholesale And was confirmed as District Manager in January 1982.
Later he was promoted as Area Manager in 1987 and was confirmed as Area Manager in 1988 and then promoted to Senior Management in 1996 as Sales Manager – Wholesale.
He served as the Senior Manager Retail during 1997- 2005. And served as Senior Manager –MH & Senior Manager /Wholesale – 2005/2006.
Kapila Perera Group Manager – Mr.Perera joined Singer Group in 1994. Information He was appointed as the Group Manager – IT of Singer Technology (Sri Lanka) PLC in 2000.
Dhammika Marketing Manager – Mr.Wijesurendra joined Singer Group in 1988. He was Wijesundera White Goods appointed as a Trainee District Manager in 1988.
He held the following positions in the organizations: Manager Special Taskforce – 1991, Area Manager Wholesale 1992 -1997 (Middle Management Position) Area Manager – Retail Channel (Middle Management Position)1997-2000 Sales manager for Sisil Wholesale channel in 2001& looked after the Sisil brand (Senior
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
Management Position), Sales manager for singer retail / Sisil wholesale / Brand manager – 2003 (Senior Management Position), Sales manager Sisil World channel & Sisil wholesale channel 2007 (Senior Management Position), Brand Group Manager – Refrigerators in 2010 (Senior Management Position), Marketing Manager – White Goods since 2012.
C.A.Samarasinghe Business Development Mr. Samarasinghe joined Singer in 1992. He was Manager appointed as Sales Manager Retail in 2004, subsequently got promoted as Business Development Manager in 2010.
He worked as the Officer In charge of Credit Division at Commercial Credit Ltd, Kandy.
G A K Weerasuriya Senior Manager - Mr. Weerasuriya joined Singer in 1994 as Accountant - Inventory Management. He was appointed as Senior Manager – Inventory of Singer (Sri Lanka) Ltd in 2005.
Ananda Perera Senior Manager – Mr. Manoratne joined Singer Group in 3rd March Manoratne. Distribution. 1997. He was appointed as the Senior Manager - Distribution of Singer (Sri Lanka) Ltd. in 2005.
Neminda Group Human Karunaratne joined Singer Group in 1991, he was Karunaratne Resources appointed as Group Human Resources Development Development Manager Manager of Singer (Sri Lanka) Ltd in 2006.
M H M Fairoz Marketing Manager – Mr. Fairoz joined Singer Group in 2001 as Brand Manager,and got promoted as Senior Product manager Furniture and in 2006, s Brand Group manager in 2007, and as Electronics Marketing Manager - in 2012.
He worked at Richard Pieris & Co as Asst. Sales /Product Manager – 1997, Marketing Executive – 1994, Marketing Assistant - 1991, Marketing representative – 1989.
Asantha Senior Manager Mr. Karunaratne joined Singer as Senior Manager Uluwitage Merchandising & Merchandising & Promotions in 2006 December. Promotions Karunaratne He has previous experience in Shop Interior Designing, Space Planning, Advertising, Graphic Designing, Shop Window display, Qualified in AutoCAD Drawing.
Mr. Karunaratne worked at Almarai a Dairy Company operating in KSA & Gulf worked as the Trade Marketing Coordinator for KSA & Gulf. 1999 – 2006, worked at Singer as Assistant Manager Merchandising 1996 – 1999, worked as Merchandising Supervisor and promoted to store modernizer at Bata Shoe Company Ltd 1989 – 1996. And he was also employed at Cargills Ceylon Ltd and KVG’s Book store.
T.G.S Perera Senior Manager- Mr. Perera joined Singer Group in.1983.He was Recoveries appointed as Senior Manager-Audit of Singer (Sri
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
Lanka) Ltd in 2007 and as Senior Manager-Recoveries in 2010.
B.T.L.Mendis Senior Manager Mr. Mendis joined Singer Group in Nov 1998. Commercial Appointed as Senior Manager Commercial of Singer (Sri Lanka) Ltd. in 2007.
Aruna Kolambage Commercial Manager Mr.Kolambage joined Singer in 1997 He was appointed as the Commercial Manager of Singer (Sri Lanka) Ltd. in 2007.
Mr. Kolambage worked for 10 years for Ceylon Tobacco Company Ltd as Import/Export executive.
C L T P Rupasinghe Senior Manager Mr. Rupasinghe joined Singer in 1994. He was Treasury appointed as the Assistant Manager Budget in 1999, then got promoted as Manager Budget in 2001,Manager Treasury in 2003 and as Senior Manager Treasury in 2008.
M.M.C. Priyanjith Head of Risk Mr. Priyanjith joined Singer Group in 2004. He was Management appointed as a Manager Financial Reporting of Singer (Sri Lanka) Ltd in 2007.
He was initially appointed as the Head of Risk Management of Singer (Sri Lanka) Ltd. in 2009.
Mr. Priyanjith worked as an Accountant of CIC paints (Pvt) Ltd from 2002 to 2004. He possesses auditing experience from Ernst & Young from 1999 to 2002.
Dhammika N. Sales Manager – Mr.Guruge joined Singer Group in September 2009 as Guruge Modern Trade the Sales Manager - Mega Channel.
He was appointed as the Sales Manager – Modern Trade of Singer (Sri Lanka) Ltd in March 2010.
Ruwan Sanjeewa Sales Manager- Mr. Singhabahu joined Singer Group in 2004. He was Singhabahu Institutional Sales appointed as Sales Manager-Institutional Sales of Singer (Sri Lanka) Ltd. in 2010.
He worked at Hayley’s Group from 1988 to 2004 as Assistant Manager-Institutional Sales.
M.Mahesharatnam Senior Regional Mr. Mahesharatnam joined Singer Group in 1981. Manager He was appointed as Senior Regional Manager of Singer (Sri Lanka) Ltd. in 2011.
Vajira Tennakoon Marketing Manager Mr. Tennakoon joined Singer Group in 1997/11/20. He Digital Media was appointed as the Marketing Manager of Singer (Sri Lanka) Ltd. in 2011.
Harindra Viresh Senior Manager– Mr. Gomes joined Singer Group in 2006. First Gomes Financial Services appointment was Manager – Financial Services .Promoted to Senior Management in 2011.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
Oscar Dias Senior Manager - Mr. Amaratunga joined Singer Group in 1992. He was Amaratunga Service appointed as Service Assistant of Singer (Sri Lanka) Ltd. in 2002.
He worked as Service Manager at Rowlands Ltd.(Manufactures of USHA/GLACIO Refrigerators, Gas Cookers and the marketer for ACMA A/c’s).
Indika Gunathilake Business Development Mr.Gunathilake joined Singer Group in 1993 as a Manager – Retail Junior Clerk. Channel He held following positions in the organizations: Accounts Supervisor in 1996, District Manager in 1999, Area Manager in 2006, and Business Development Manager Retail Channel in January 2012.
Ransiri Perera Group Administration Mr. Perera joined Singer Group in 1991 as a clerk. Manager Appointed as Asst Administration Manager of Singer (Sri Lanka) Ltd. in 1999 and subsequently promoted as Administration Manager in 2001, Senior Administration in 2006 and Group Administration Manager in 2012 .
Nandana Sales Manager Mr. Wijesundara joined Singer in 1991 and was Wijesundara appointed as Sales Manager of Singer (Sri Lanka) Ltd. in 2012
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 6.0 FINANCIAL INFORMATION
6.1 FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS OF THE COMPANY
Five - year financial summary (for the Year Ended 31st December) 2009 OPERATING RESULTS (Rs.Millions) 2011 2010 (Restated) 2008 2007 Revenue 20,931 15,177 11,341 13,364 13,544 PBIT 2,292 1,411 1,136 1,664 1,510 Interest Costs 560 588 916 1,134 983 Net Profit Before Tax 1,732 823 220 530 527 Net Profit After Tax 1,163 423 121 447 311
Attributable to: Equity holders of the Co. 1,163 423 121 447 311 Minority Interest ASSETS (Rs.Millions) Cash and cash equivalent 364 200 362 254 335 Amounts due from Related parties -Non -Trade 23 30 5 18 202 Amounts due from Related parties - Trade 569 954 940 6 - Trade and other Receivables - Short term 4,327 3,219 2,671 4,421 4,837 Income Tax Receivable - - - 54 - Loans due from Related parties 540 611 241 164 23 Inventories 3,414 2,149 1,985 2,939 2,454 Deffered Tax Assets 126 114 143 96 69 Trade and Other Receivables -Long term 1,259 1,035 1,024 1,282 1,286 Other Long - term Investments 17 17 18 18 18 Investements in Equity Accounted Investees 48 24 24 24 111 Investements in Subsidiary 400 400 400 200 200 Intangible Assets 141 156 158 174 134 Property, Plant & Equipment 1,660 1,536 1,261 1,419 1,181 Total Assets 12,888 10,446 9,232 11,070 10,848 LIABILITIES (Rs.Millions) Long-term Interest-Bearing Borrowing 754 1,266 738 1,384 2,221 Retirement Benefit Obligations 198 177 155 146 126 Deffered Tax Liabilities 96 99 - - - Security Deposits 487 404 360 335 302 Trade and Other Payables 2,126 1,218 890 1,007 1,379 Deffered Revenue 118 66 50 73 90 Income Tax payable 171 123 13 - 27 Dividend Payable 6 3 3 - 7 Amounts due to Related parties -Trade 171 269 233 234 289 Amounts due to Related parties - Non-Trade 73 53 139 178 42 Interest Bearing Borrowings 4,321 3,160 3,666 4,810 3,728 Total Liabilities 8,521 6,838 6,246 8,166 8,210 Stated Capital 626 626 626 626 626 Capital Reserves 655 665 404 404 - Reatined Earnings - - - - 503 Revenue Reserves 3,086 2,317 1,956 1,874 1509 Total Equity attributable to Equity Holders of the Company 4,367 3,608 2,986 2,904 2638 Minority Interest - - - Total Equity 4,367 3,608 2,986 2,904 2,638 Total Liabilities & Equity 12,888 10,446 9,232 11,070 10,848
6.2 Interim Financial Statements as of 30th September 2012: Please refer Annexure: I 6.3 Annual Report for the financial years ending 31st December 2011, 31st December 2010, and 31st December 2009 is enclosed herewith. Please refer Annexure: II
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 7. 0 CORPORATE GOVERNANCE PRACTICES
a) DIRECTORS
The Board is responsible for the strategic planning process of the company. This includes the responsibility for the formulation of the strategic vision and mission of the company, setting the overall corporate policy and strategy, monitoring performance and reviewing risks and major investments.
The Board also takes on the added responsibility of directing company performance towards achieving the best results possible and increasing shareholder value. The Board sets the broad parameters of the company’s business. The company’s business units are then tasked with their application, in achieving specific targets and objectives.
b) REMUNERATION COMMITTEE
The Remuneration Committee consists of the 3 Non-Executive Directors, Chairman and Group Chief Executive Officer. The Finance Director acts as the Secretary to the Committee. The Committee is chaired by a Non- Executive Director.
Members of the committee
. Deshabandu Ajit Jayaratne - Independent Non-Executive . Dr. Saman Kelegama - Independent Non-Executive . Mr.Hemaka Amarasuriya - Non Executive Director
. Mr.Asoka Pieris - Group CEO, Executive Director . Mr.Priyath Salgado- Finance Director, Executive Director
The Finance Director acts as the Secretary to the Committee. The Group Chief Executive Officer attends by invitation to assist the Committee by providing the relevant information and participating in its analysis and deliberations.
The scope of the committee;
. To look into fees, remuneration and perquisites of Chairman, Group Chief Executive Officer, Independent Directors and the Executive Directors of the Company including Alternate Directors
. Approve recommendations made by the Group Chief Executive Officer and the Corporate Office of Singer Asia Limited.
. Review the policies pertaining to the remuneration and perquisites of the Executives of the Company.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
In performing this role, the Committee ensures that,
. Shareholders and employees interests are aligned
. The company is able to attract, motivate and retain employees, particularly at management level.
. The integrity of the company’s compensation and reward program is maintained. Aggregated remuneration paid to the Executive Director’s amounts to Rs. 63.539 Mn and Non- Executive Director’s fee amounts to 7.704 Mn as at 31st December 2011.
c) AUDIT COMMITTEE
The Audit Committee is empowered to review and monitor the financial reporting process of Singer Group so as to provide additional assurance on the reliability of the Financial Statements through a process of Singer Group through a process of independent and objective review.
The Audit Committee acts as an effective forum in assisting the Board of Directors in discharging their responsibilities on ensuring the quality financial reporting and related communication to the shareholders and the public.
The Audit Committee currently comprises of three Independent Non-Executive Directors of the Board namely;
. Dr. G.C.B. Wijesinghe - Independent Non-Executive . Deshabandu A.M de S. Jayaratne - Independent Non-Executive . Dr.S.Kelegama - Independent Non-Executive
The Head of Risk Management, functions as the Secretary to the Committee. The Finance Director / Compliance Officer, Audit Staff, Representatives of External Auditors and when Necessary, the Chairman/the Group Chief Executive Officer and relevant Operation Directors and Managers attend the meetings by invitations.
8.0 LISTING DEBT –TRUSTEE /DIRECTORS
TRUSTEES
Bank of Ceylon has agreed in writing to act as the Trustee to the debenture holders and has issued a consent letter to this effect. The Company has entered into an agreement with the Trustee (hereinafter called the ‘Trust Deed’). Debenture holders in their application for subscription have irrevocably authorized the Trustee, subject to overriding clauses in the Trust Deed, to act as their agent in entering into such deeds, writings, and instruments with the Company and to act as agents and Trustees for the debenture holders in order to facilitate the protection of the debenture holders investment and return. There is no conflict of interest between the Trustee/its directors and the Company. DIRECTORS
The Directors of Singer (Sri Lanka) PLC hold no interest in acquiring, disposing, or leasing of any asset of the Company during the past two years preceding the issue and have not proposed to acquire, dispose or lease any asset of the Company, during the two years succeeding the issue including the consideration of thereon.
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 9.0 FITCH RATING REPORT
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 10.0 OTHER REQUIRMENTS
The Introductory Document and the Articles of Association of the entity will be hosted in the company’s Website: http://www.singersl.com and/or Colombo Stock Exchange’s web site http://www.cse.lk for a period of not less than fourteen (14) days
11.0 ABBREVIATIONS
CDS - Central Depository Systems (Pvt) Limited
CSE - Colombo Stock Exchange
DEX - Debt Securities Trading System of the Colombo Stock Exchange
FRLL - Fitch Rating Lanka Limited
MN or Mn - Million
AER - Annual Equivalent Rate
SEC - Securities & Exchange Commission of Sri Lanka
LKR, SLR, or Rs. - Sri Lankan Rupees
GTB - Gross Treasury Bill
RTGS - Real Time Gross Settlement
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Introductory Document – Singer (Sri Lanka) PLC Singer (Sri Lanka) PLC Debenture 2012-2015 12.0 DECLARATION BY THE DIRECTORS
This Introductory Document has been seen and approved by the directors of the Entity and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate.
Signature of all the Directors of the company
Name of Director Signature
Mr. H.D.S. Amarasuriya Sgd
Dr. G.C.B. Wijesinghe Sgd
Dr. S. Kelegama Sgd
Deshabandu A.M. De S. Jayaratne (Alternate Mr. A.N. Majeed) Sgd
Mr. H.A. Pieris (Alternate Mr. L.N.S.K. Samarasinghe) Sgd
Mr. V.G.K. Vidyaratne Sgd
Mr. M.H. Wijewardene Sgd
Mr. M.P.A. Salgado Sgd
Mr. A.N. Majeed Sgd
Mr. L.N.S.K. Samarasinghe Sgd
Mr. P.J. O’Donnell (Alternate Mr. M.P.A. Salgado) Sgd
Mr. G.J. Walker (Alternate Mr. M.H. Wijewardene) Sgd
Mr. J. J. Hyun (Alternate Mr. V.G.K. Vidyaratne) Sgd
31 Introductory Document – Singer (Sri Lanka) PLC Annexure : I Interim Financial Statements as of 30th September 2012 S I N G E R ( S R I L A N K A ) P L C
INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 30th SEPTEMBER 2012 Interim Financial Statements for the nine months ended 30th September 2012
Group Chief Executive Officer’s Review
At the end of the first nine months, Singer Group had growth in the top line and bottom line even though the bottom line growth was minimal. This growth is on top of its growth achieved in 2010 and 2011.
At the end of the first nine months the Group revenue was Rs. 18.7 Billion, while the Company revenue was Rs. 17.5 Billion. Revenue grew by Rs. 3.2 Billion and in percentage terms by 21%. For the same period, Group net profit for the period was Rs. 887 Million, which was a marginal 2% growth over prior year while the Company net profit for the period was Rs. 761 Million, a marginal decline of 2%.
The results were despite the fact that the economy and consumer sentiments were affected by the sharp devaluation and sharp increase in interest rates, electricity and fuel costs. These adversely impacted the consumer sentiments and the buying power of the consumers. In addition, the drought destroyed part of the harvest and resulted in power cuts and shortages of water for consumers in some districts and further affected the consumers in the third quarter.
Revenue growth for the third quarter was 16% for the Group and 15% for the Company. The profit for third quarter declined by 34% for the Group and by 44% for the Company due to challenging market conditions.
The sharp rise of interest rates is a major concern to all in the business sector and was the major factor affecting profit. The net finance cost for the first nine months was an increase of 82% for the Company and 105% for the Group. The reduction of tax rates, helped to lower the impact of the adverse effects of interest.
In major product categories, Refrigerators had a growth of 17% above the prior year first nine months, while Domestic and Artisan Sewing Machines had a growth of 9%. Television volumes reduced by 17% since television volumes in the prior year were driven by the cricket world cup.
Other product lines which had a significant growth over prior year first nine months were Fans (40%), Microwaves (171%), Air Conditioners (33%), Kitchen Appliances (41%), Irons (82%) and Rice Cookers (54%). Other Product lines which had a significant volume reduction were Audios (28%) and Computers (12%). The Company had growth from new categories introduced such as Cameras, Mobile Phones, Water Purifiers, Sprayers, Induction Cookers, Gas Cylinders, Air Coolers and Blu Ray Players.
The Company’s subsidiary Singer Finance (Lanka) PLC., increased revenue by 46% and net profit by 51% in the first nine months.
I wish to place on record my appreciation of all our staff for their contribution and commitment without which it would have not been possible to achieve these results in challenging market conditions.
I also thank the Chairman and Board of Directors of the Company, and the Chairman and Chief Executive Officer of Singer Asia for their valuable support and guidance.
I also thank all our shareholders for their continued trust in the Board of Directors and the Management of the Company.
Sincerely,
Asoka Pieris Group Chief Executive Officer
Colombo 31st October 2012
2 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Statement of Comprehensive Income
Group Company Variance Variance For the quarter ended 30th September 2012 2011 2012 2011 Group % Company % Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Revenue 6,060,849 5,206,530 5,664,230 4,930,567 854,319 +16 733,663 +15 Cost of Sales (3,841,459) (3,254,242) (3,841,458) (3,254,241) (587,217) +18 (587,217) +18 Gross Profit 2,219,391 1,952,288 1,822,772 1,676,325 267,102 +14 146,445 +9 Other Operating Income 51,112 25,573 42,979 40,826 25,539 +100 2,153 +5 Selling and Administration Expenses (1,512,707) (1,250,400) (1,369,174) (1,140,248) (262,307) +21 (228,927) +20 Other Operating Expenses (63,062) (50,430) (59,781) (48,135) (12,632) +25 (11,645) +24 Finance Cost (432,967) (204,903) (283,364) (132,294) (228,064) +111 (151,070) +114 Finance Income 15,460 19,533 36,655 20,119 4,073 -21 16,536 +82 Net Finance Cost (417,507) (185,370) (246,709) (112,175) (232,138) +125 (134,533) +120 Share of Profit/(Loss) of Equity Accounted Investees (Net of Income Tax) 337 (13) – – 350 +2,693 – – Value Added Tax on Financial Services (10,114) (14,940) (5,251) (9,000) (4,826) -32 (3,749) -42 Profit before Tax 267,448 476,708 184,836 407,593 209,260 -44 222,757 -55 Income Tax Expense (60,880) (163,593) (36,416) (140,426) (102,713) -63 (104,010) -74 Profit for the Quarter 206,569 313,115 148,419 267,167 106,546 -34 (118,746) -44
Other Comprehensive Income Net Gain/(Loss) on Available for Sale Financial Assets (1,121) 957 (1,121) 957 Income Tax on Other Comprehensive Income – – – – Other Comprehensive Income for the Period - Net of Tax (1.121) 957 (1.121) 957 Total Comprehensive Income for the Period 205,448 314,072 147,299 268,124
Profit Attributable to: Equity Holders of the Company 194,175 301,624 148,419 267,167 Non-Controlling Interest 12,394 11,490 – – Profit for the Period 206,569 313,115 148,419 267,167
Total Comprehensive Income Attributable to: Equity Holders of the Company 193,054 302,582 147,299 268,124 Non-Controlling Interest 12,394 11,490 – – Total Comprehensive Income 205,448 314,072 147,299 268,124
Earnings per Share - Basic (Rs.) 1.65 2.41 1.19 2.13
Above figures are provisional and subject to audit.
3rd Quarter 2012 3rd Quarter 2011 Share Prices Rs. Rs. ’000
Highest 132.50 138.50 Lowest 90.00 105.00 Last Traded Price 112.50 130.20
SINGER (SRI LANKA) PLC 3 Interim Financial Statements for the nine months ended 30th September 2012
Statement of Comprehensive Income
Group Company Variance Variance For the period ended 30th September 2012 2011 2012 2011 Group % Company % Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Revenue 18,654,043 15,464,505 17,544,848 14,696,662 3,189,538 +21 2,848,187 +19 Cost of Sales (11,842,455) (9,598,709) (11,842,456) (9,598,709) (2,243,747) +23 (2,243,746) +23 Gross Profit 6,811,587 5,865,796 5,702,393 5,097,952 945,791 +16 604,440 +12 Other Operating Income 140,838 62,921 185,048 127,451 77,918 +124 57,596 +45 Selling & Administration Expenses (4,411,674) (3,770,158) (4,024,051) (3,468,245) (641,517) +17 (555,806) +16 Other Operating Expenses (164,708) (156,572) (155,713) (149,847) (8,136) +5 (5,865) +4 Finance Cost (1,126,402) (601,112) (730,335) (414,877) (525,289) +87 (315,457) +76 Finance Income 42,369 73,139 122,157 80,836 30,771 -42 41,321 +51 Net Finance Cost (1,084,033) (527,974) (608,177) (334,041) (556,059) +105 (274,136) +82 Share of Loss of Equity Accounted Investees (Net of Income Tax) 1,111 (606) – – 1,718 +283 – – Value Added Tax on Financial Services (36,593) (48,297) (21,752) (27,000) (11,704) -24 (5,248) -19 Profit before Tax 1,256,529 1,425,111 1,077,748 1,246,269 168,583 -12 168,521 -14 Income Tax Expense (369,348) (556,531) (316,246) (469,774) (187,182) -34 (153,528) -33 Profit for the Period 887,180 868,579 761,502 776,494 18,601 +2 14,992 -2
Other Comprehensive Income Net Gain/(Loss) on Available for Sale Financial Assets (1,121) 957 (1,121) 957 Income Tax on Other Comprehensive Income – – – – Other Comprehensive Income for the Period - Net of Tax – – – – Total Comprehensive Income for the Period 886,059 869,537 760,381 777,451
Profit Attributable to: Equity Holders of the Company 842,097 839,150 761,502 776,494 Non-Controlling Interest 45,083 29,430 – – Profit for the Period 887,180 868,579 761,502 776,494
Total Comprehensive Income Attributable to: Equity Holders of the Company 840,976 840,107 760,381 777,451 Non-Controlling Interest 45,083 29,430 – – Total Comprehensive Income 886,059 868,579 760,381 777,451
Earnings per Share - Basic (Rs.) 6.73 6.70 6.08 6.20
Above figures are provisional and subject to audit.
Nine Months 2012 Nine Months 2011 Share Prices Rs. Rs. ’000
Highest 132.50 138.50 Lowest 78.00 105.00 Last Traded Price 112.50 130.20
4 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Company Statement of Financial Position
As at 30.09.2012 30.09.2011 31.12.2011 01.01.2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 ASSETS Non-Current Assets Property, Plant & Equipment 1,866,028 1,493,121 1,659,601 1,536,053 Intangible Assets 130,656 145,592 141,266 155,619 Investments in Subsidiaries 982,242 400,000 400,000 400,000 Investments in Equity Accounted Investees 48,000 48,000 48,000 24,000 Other Investments 16,490 19,612 17,611 18,655 Trade and Other Receivables 1,278,938 1,184,952 1,139,462 959,367 Deferred Tax Assets 125,502 113,664 125,502 114,353 4,447,856 3,404,941 3,531,442 3,208,047 Current Assets Inventories 4,392,518 3,334,414 3,413,956 2,149,041 Loans due from Related Parties 865,600 505,439 539,506 611,410 Trade and Other Receivables 4,971,836 3,688,274 4,345,642 3,229,488 Amounts due from Related Parties - Trade 204,206 708,856 569,973 953,850 Amounts due from Related Parties - Non-Trade 24,297 101,718 23,540 29,556 Cash and Cash Equivalents 577,829 359,927 364,736 200,403 11,036,286 8,698,628 9,257,353 7,173,748 Total Assets 15,484,142 12,103,569 12,788,795 10,381,795 EQUITY AND LIABILITIES Equity Stated Capital 626,048 626,048 626,048 626,048 Capital Reserves 648,638 658,466 655,454 664,542 Statutory Reserve – – – – Revenue Reserves 3,104,708 2,688,908 3,086,118 2,309,949 Total Equity 4,379,394 3,973,422 4,367,620 3,600,539 Non-Current Liabilities Interest-Bearing Loans and Borrowings 401,958 1,434,749 754,125 1,265,833 Retirement Benefit Obligations 252,211 235,267 197,833 176,663 Deferred Taxation Liability 93,154 96,977 95,805 99,339 Security Deposits 555,716 463,378 487,449 403,894 Deposits from Customers – – – – 1,303,039 2,230,371 1,535,212 1,945,729 Current Liabilities Trade and Other Payables 2,431,505 1,976,027 2,126,108 1,218,205 Deferred Revenue 24,846 22,806 17,654 13,125 Income Tax Payable 47,849 171,652 170,547 118,434 Dividends Payable 11,181 9,814 5,825 3,205 Amounts due to Related Parties - Trade 152,111 233,626 171,272 268,648 Amounts due to Related Parties - Non-Trade 65,217 171,803 73,441 53,272 Deposits from Customers – – – – Interest-Bearing Loans and Borrowings 7,068,999 3,314,048 4,321,117 3,160,639 9,801,708 5,899,776 6,885,963 4,835,527 Total Equity and Liabilities 15,484,142 12,103,569 12,788,795 10,381,795 Net Assets per Share 24.80 21.48 24.65 18.45 I certify that the above Financial Statements have been prepared in accordance with the requirements of the Companies Act No. 07 of 2007.
(Sgd.) Priyath Salgado Finance Director
Above figures are provisional and subject to audit.
The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board by,
(Sgd.) Hemaka Amarasuriya (Sgd.) Asoka Pieris Director Director/Group Chief Executive Officer
Colombo 31st October 2012
SINGER (SRI LANKA) PLC 5 Interim Financial Statements for the nine months ended 30th September 2012
Consolidated Statement of Financial Position
As at 30.09.2012 30.09.2011 31.12.2011 01.01.2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 ASSETS Non-Current Assets Property, Plant & Equipment 1,904,353 1,519,106 1,691,107 1,564,240 Intangible Assets 146,498 158,593 153,933 165,190 Investments in Subsidiaries – – – – Investments in Equity Accounted Investees 47,996 46,918 46,886 23,525 Other Investments 16,531 19,653 17,652 18,696 Trade and Other Receivables 4,862,837 3,607,986 4,141,725 2,470,118 Deferred Tax Assets 137,758 113,664 147,577 114,353 7,115,973 5,465,920 6,198,879 4,356,122 Current Assets Inventories 4,392,518 3,349,790 3,430,827 2,149,041 Loans due from Related Parties 153,857 174,172 173,635 202,218 Trade and Other Receivables 8,339,225 6,386,514 6,978,871 5,485,394 Amounts due from Related Parties - Trade 9,211 2,544 7,986 6,724 Amounts due from Related Parties - Non-Trade 24,297 101,718 23,540 29,556 Deposits with Banks 50,945 – – – Marketable Securities 296,806 272,199 290,313 410,552 Cash and Cash Equivalents 586,146 374,213 372,303 250,574 13,853,005 10,661,150 11,277,474 8,534,059 Total Assets 20,968,978 16,127,070 17,476,353 12,890,181 EQUITY AND LIABILITIES Equity Stated Capital 626,048 626,048 626,048 626,048 Capital Reserves 648,638 674,816 655,454 664,542 Statutory Reserve 73,978 22,573 44,408 10,748 Revenue Reserves 3,477,504 2,985,580 3,415,958 2,573,884 Total Equity Attributable for Equity Holders of the Company 4,826,168 4,309,017 4,741,277 3,875,222 Non-Controlling Interest 348,539 245,559 258,455 225,053 Total Equity 5,174,707 4,554,576 5,000,323 4,100,275 Non-Current Liabilities Interest-Bearing Loans and Borrowings 664,474 1,509,753 1,110,385 1,287,291 Retirement Benefit Obligations 260,110 241,575 204,787 181,876 Deferred Taxation Liability 93,154 131,384 99,932 103,467 Security Deposits 555,716 463,378 487,449 403,894 Deposits from Customers 411,667 461,275 503,142 195,995 1,985,121 2,807,365 2,405,695 2,172,523 Current Liabilities Trade and Other Payables 2,902,233 2,357,791 2,571,464 1,497,947 Deferred Revenue 131,511 41,634 38,362 25,553 Income Tax Payable 76,724 161,367 197,322 151,283 Dividends Payable 11,181 9,814 5,825 3,205 Amounts due to Related Parties - Trade 152,111 233,626 171,272 268,648 Amounts due to Related Parties - Non-Trade 65,217 171,803 73,441 53,272 Deposits from Customers 2,613,228 2,118,188 2,159,857 1,451,991 Interest-Bearing Loans and Borrowings 7,856,944 3,670,906 4,852,792 3,165,484 13,809,150 8,765,129 10,070,335 6,617,383 Total Equity and Liabilities 20,968,978 16,127,070 17,476,353 12,890,181 Net Assets per Share 38.54 34.41 37.87 30.95 I certify that the above Financial Statements have been prepared in accordance with the requirements of the Companies Act No. 07 of 2007. (Sgd.) Priyath Salgado Finance Director Above figures are provisional and subject to audit. The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board by, (Sgd.) Hemaka Amarasuriya (Sgd.) Asoka Pieris Director Director/Group Chief Executive Officer Colombo 31st October 2012 6 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Statement of Changes in Equity
For the nine months ended 30th September 2012
Attributable to Equity Holders of the Company Statutory Reserve Group Stated Reserve Investment Revaluation General Retained Total Non- Total Capital Fund Fund Reserves Reserves Earnings Controlling Equity Interest Rs. ’000 Rs. ’000 Rs.’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Balance as at 1st January 2011 626,048 10,748 – 664,542 2,000,000 573,884 3,875,222 225,053 4,100,275 Realisation on Revaluation Surplus – – – (8,439) – 8,439 – – – Deferred Tax Effect on Transfer of Revaluation Surplus – – – 2,363 – – 2,363 – 2,363 Transfer to/(from) during the Period – 5,602 22,573 – – (28,175) – – – Net Profit for the Period – – – – – 839,149 839,149 29,430 868,579 Total Other Comprehensive Income for the Period – – – – – 957 957 – 957 Total Comprehensive Income for the Period – – – – – 840,106 840,106 29,430 869,536 Final Dividend - 2010 – – – – – (219,117) (219,117) (10,667) (229,784) Interim Dividend - 2011 – – – – – (187,814) (187,814) – (187,814) Balance as at 30th September 2011 626,048 16,350 22,573 658,466 2,000,000 987,323 4,310,760 243,816 4,554,575
Balance as at 1st January 2012 626,048 16,350 28,058 655,454 2,200,000 1,215,958 4,741,868 258,455 5,000,322 Realisation on Revaluation Surplus – – – (9,467) – 9,467 – – – Deferred Tax Effect on Transfer of Revaluation Surplus – – – 2,651 – – 2,651 – 2,651 Transfer to/(from) during the Period – 11,278 18,292 – – (29,570) – – – Change in Holding Percentage – – – – – (8,069) (8,069) 66,334 58,265 Net profit for the Period – – – – – 842,097 842,097 45,083 887,180 Total Other Comprehensive Income for the Period – – – – – (1,121) (1,121) – (1,121) Total Comprehensive Income for the Period – – – – – 840,976 840,976 45,083 886,059 Final Dividend - 2011 – – – – – (751,258) (751,258) (21,333) (772,591) Balance as at 30th September 2012 626,048 27,628 46,350 648,638 2,200,000 1,277,504 4,826,168 348,539 5,174,706
Company Stated Revaluation General Retained Total Capital Reserves Reserves Earnings Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Balance as at 1st January 2011 626,048 664,542 2,000,000 309,949 3,600,539 Realisation on Revaluation Surplus – (8,439) – 8,439 – Deferred Tax Effect on Transfer of Revaluation Surplus – 2,363 – – 2,363 Net Profit for the Period – – – 776,494 776,494 Other Comprehensive Income for the Period – – – 957 957 Total Comprehensive Income for the Period – – – 777,451 777,451 Final Dividend - 2010 – – – (219,117) (219,117) Interim Dividend - 2011 – – – (187,814) (187,814) Balance as at 30th September 2011 626,048 658,466 2,000,000 688,907 3,973,422
Balance as at 1st January 2012 626,048 655,454 2,200,000 886,118 4,367,619 Realisation on Revaluation Surplus – (9,467) – 9,467 – Deferred Tax Effect on Transfer of Revaluation Surplus – 2,651 – – 2,651 Net Profit for the Period – – – 761,502 761,502 Other Comprehensive Income for the Period – – – (1,121) (1,121) Total Comprehensive Income for the Period – – – 760,381 760,381 Final Dividend - 2011 – – – (751,258) (751,258) Balance as at 30th September 2012 626,048 648,638 2,200,000 904,708 4,379,393
SINGER (SRI LANKA) PLC 7 Interim Financial Statements for the nine months ended 30th September 2012
Cash Flow Statement
Group Company For the nine months ended 30th September 2012 2011 2012 2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Cash Flows from Operating Activities Net Profit before Income Tax Expense 1,256,529 1,434,384 1,077,748 1,255,951 Adjustments for: Depreciation on Property, Plant & Equipment 151,107 145,151 143,639 139,561 Share of (Profit)/Loss from Equity Accounted Investees (1,111) 606 – – Amortisation of Intangible Assets 13,600 11,421 12,075 10,286 (Gain) on Disposal of Property, Plant & Equipment (2,371) (8,426) (2,371) (8,426) Gain on Disposal of Equity Accounted Investees – – – – Interest Expense 1,126,402 601,369 730,335 414,877 Interest Income (42,369) (55,502) (109,101) (67,780) Deferred Profit on Hire Debtors (9,245) 176,154 (9,245) 176,154 Provision for Obsolete Inventory 47,587 10,572 47,587 10,572 Provision for Bad and Doubtful Receivables 102,936 66,454 70,310 59,628 Deferred Revenue (7,557) 55,866 (11,839) 49,136 Dividend Income (1,996) (5) (59,596) (28,805) Provision for Retiring Gratuity 55,952 59,919 54,377 58,824 Operating Profit before Working Capital Changes 2,689,467 2,497,963 1,943,919 2,069,978
(Increase)/Decrease in Inventories (1,009,279) (1,211,320) (1,026,150) (1,195,944) (Increase)/Decrease in Debtors Falling due after one Year (601,737) (1,076,174) (34,084) (163,711) (Increase)/Decrease in Debtors Falling due within one Year (1,472,788) (1,254,738) (773,618) (805,578) (Increase)/Decrease in Trade dues from Related Parties (1,982) (67,982) 365,010 172,833 Increase/(Decrease) in Trade dues to Related Parties (27,385) 83,508 (27,385) 83,508 Increase in Employee Security Deposits 68,267 59,484 68,267 59,484 Increase/(Decrease) in Customer Deposit Liabilities 361,896 931,478 – – Increase/(Decrease) in Trade and Other Payables (330,768) 860,101 305,398 757,822 Cash Generated from Operations 337,304 822,321 821,357 978,392
Finance Costs Paid (1,126,402) (601,369) (730,335) (414,877) Retiring Gratuity Paid (630) (220) – (220) Income Tax Paid (484,254) (515,477) (438,944) (415,867) Net Cash Flows from Operating Activities (1,277,127) (294,746) (347,921) 147,427 Cash Flows from Investing Activities Acquisition of Property, Plant & Equipment and Intangible Assets (380,933) (113,206) (359,366) (105,253) Proceeds from Disposal of Property, Plant & Equipment 12,784 16,790 10,207 16,790 Acquisition of Other Investments – – – – Investment in Bank Deposits (50,945) – – – Investment in Subsidiary Company – – (582,242) – Investment in Associate Companies – (24,000) – (24,000) Acquisition of Marketable Securities (6,493) 138,353 – – Net Cash Flows from Loans Given to Related Companies 19,778 28,045 (326,095) 105,971 Interest Received 42,369 55,502 109,101 67,780 Dividend Received 1,996 5 59,596 28,805 Net Cash Flows from Investing Activities (361,444) 101,489 (1,088,798) 90,092
Proceeds from Interest-Bearing Loans and Borrowings 2,046,769 427,667 1,831,944 269,995 Proceeds from Rights Issue Purchased by Minority Shareholders 58,265 – – – Net Payment to Minority Shareholders (21,333) (10,667) – – Dividend Paid (745,902) (400,322) (745,902) (400,322) Net Cash Flow from Financing Activities 1,337,799 16,678 1,086,043 (130,326)
Net Increase/(Decrease) in Cash and Cash Equivalents (297,627) (176,579) (350,676) 107,194 Cash and Cash Equivalents at the beginning of the Period (302,562) (207,198) (181,976) (257,369) Cash and Cash Equivalents at the end of the Period (600,189) (383,777) (532,652) (150,176)
8 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
1. Corporate Information 1st January 2012 and SLFRS 1, First Time Adoption 1.1 Reporting Entity of SLFRS has been applied. These SLFRS/LKASs have materially converged with the International 1.1.1 General Financial Reporting Standards (IFRS) as issued by the Singer (Sri Lanka) PLC is a limited liability company International Accounting Standards Board (IASB). incorporated and domiciled in Sri Lanka. The Registered Office of the Company is located at No. 80, The effect of the transition to SLFRS/LKAS on Nawam Mawatha, Colombo 2, and the principal place previously reported financial positions, financial of business is situated at the above address. performances and cash flows of the Group and the Company is given in Note No. 6 to the Financial In the Report of the Directors and in the Financial Statements. Statements, ‘the Company’ refers to Singer (Sri Lanka) PLC as the Holding Company and ‘the Group’ refers 2.2 Basis of Measurement to the Consolidated Financial Statements of Singer The Financial Statements have been prepared on the (Sri Lanka) PLC and its Subsidiary, Singer Finance historical cost basis except for certain investments (Lanka) Ltd. and items of Property, Plant & Equipment, which are 1.1.2 Date of Authorisation of Issue measured at fair value and Defined Benefit Plans which are measured at the present value of the Retirement The Financial Statements for the year ended Benefit Obligations as explained in the respective 30th September 2012 were authorised for issue in Notes to the Financial Statements. accordance with a resolution of the Board of Directors on 31st October 2012. 2.3 Functional and Presentation Currency
2. Basis of Preparation The Financial Statements are presented in Sri Lankan 2.1 Statement of Compliance Rupees which is the functional currency of the Company and its Subsidiary. The interim condensed Financial Statements have been prepared in compliance with Sri Lanka Accounting 3. Significant Accounting Policies Standard (SLAS) LKAS 34 - Interim Financial Reporting. The changes to accounting policies are set out These interim condensed Financial Statements should below have been applied consistently to all periods be read in conjunction with the annual Financial presented in these condensed Financial Statements Statements for the year ended 31st December 2011, and in preparing the opening SLFRS/LKAS statement and changes to the accounting policies as given in of financial position as at 1st January 2011 for the Note 6 to these Financial Statements. purpose of the transition to SLFRS/LKAS, unless otherwise indicated. For all periods up to and including the year ended 31st December 2011, the Group prepared its Financial Financial Statements for the nine months ending 30th Statements in accordance with SLAS which were September 2011 are prepared as per the SLFRS/LKAS. effective up to 31st December 2011. The Financial Statements for the period ended 30th September 3.1 Basis of Consolidation 2012 are the first Financial Statements prepared and presented in accordance with Sri Lanka Accounting The interim condensed Consolidated Financial Standards (SLFRS/LKAS) immediately effective from Statements comprise the Financial Statements of the Company and its subsidiaries as at each reporting date.
SINGER (SRI LANKA) PLC 9 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
3.2 Business Combinations in the Income Statement. If the Group retains any interest in the previous subsidiary, then such interest Business combinations are accounted using is measured at fair value as at the date. It is then acquisition methods. The Group measures goodwill accounted for an equity accounted investee or as an at the acquisition date, as the fair value of the available-for-sale financial asset depending on the level consideration transferred including the recognised of influence retained. amount of any non-controlling interests in the acquire, less the net recognised amount (generally fair value) of A change in ownership in the interest of a subsidiary the identifiable assets acquired and liabilities assumed without a loss of control is accounted as an equity measured as of the acquisition date. When the excess transaction. is negative, a bargain purchase gain is recognised immediately in profit or loss. 3.5 Associates (Equity Accounted Investees)
The Group elects on a transaction-by-transaction Associates are those entities in which the Group basis whether to measure non-controlling interests has significant influence, but not control, over the at fair value, or at their proportionate share of the financial and operating policies. Significant influence recognised amount of the identifiable net assets, is presumed to exist when the Group holds between at the acquisition date. 20% to 50% of the voting power of another entity. Investments in associates are accounted for using Transaction costs, other than those associated with the equity method (Equity Accounted Investees) and the issue of debt or equity securities, that the Group are recognised initially at cost. The Consolidated incurs in connection with a business combination are Financial Statements includes the Group’s share of the expensed as incurred. income and expenses and equity movements of Equity Accounted Investees, from the date that significant 3.3 Subsidiaries influence commences until the date that significant influence ceases. When the Group's share of losses Subsidiaries are entities controlled by the Group. exceeds its interest in an Equity Accounted Investee, Control exists when the Group has the power to the carrying amount of that interest is reduced to nil govern the financial and operating policies of an and the recognition of further losses is discontinued entity so as to obtain benefits from its activities. The except to the extent that the Group has an obligation or Financial Statements of subsidiaries are included in the has made payments on behalf of the investee. Consolidated Financial Statements from the date that control commences until the date that control ceases. 3.6 Financial Instruments
Losses applicable to the non-controlling interests The Group recognises a financial assets or a financial in a subsidiary are allocated to the non-controlling liabilities in its statement of financial position when the interests even if doing so cause the non-controlling Group becomes a party to the contractual provisions interests to have a deficit balance. of the instrument.
3.4 Loss of Control Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are Upon loss of control, the Group derecognises the directly attributable to the acquisition or issue of a assets and liabilities of the subsidiary, anyone- financial asset or a liability (other than financial assets controlling interests and the other components of and financial liabilities at fair value through profit equity related to the Subsidiary. Any surplus or or loss) are added or deducted from the fair value deficit arising on the loss of control is recognised of the financial asset or liability, as appropriate, on
10 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements initial recognition. Transaction costs that are directly Loans and receivables comprise of HP and Lease attributable to the acquisition of financial assets and receivable, related party loans and staff loans. financial liabilities at fair value through profit or loss are recognised immediately in the Income Statement. 3.6.1.3 Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivative Financial assets and liabilities are offset and the net financial assets that are recognised as available for amount is presented when, and only when the Group sale or not classified in any of the previous categories. has a legal right to offset the amount and intends The Group’s investments in equity securities and either to settle on a net basis or to realise the asset certain debt securities are classified as available-for- and settle the liability simultaneously. sale financial assets.
3.6.1 Financial Assets Subsequent to initial recognition, they are measured Financial assets are categorised as fair value through at fair value and changes therein, are recognised profit or loss if it is acquired for the purpose of being in the other comprehensive income and presented sold in the short term and designated as much upon in the available-for-sale reserve in equity. When initial recognition or if it is a derivative instrument. an investment is derecognised, the gain or loss accumulated in equity is derecognised from the Financial assets include cash and cash equivalents, available-for-sale reserve and recognised in the short-term deposits, receivables, quoted and Income Statement. unquoted financial instruments and derivative financial instruments. Available-for-sale comprise of equity investments.
3.6.1.1 Held-to-Maturity Financial Assets 3.6.1 Derecognition of Financial Assets
A non-derivative financial asset with fixed or Financial assets are derecognised when the contractual determinable payments with fixed maturity where rights to the cash flows from the asset has expires, or Group intends to hold to maturity is classified under when the Group has transferred the financial asset and this category. subsequently all the risks and rewards of ownership to another entity. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost On derecognition of financial asset, the difference using the effective interest method, less any between the carrying amount of the asset and the sum impairment losses. of the consideration received and receivable, and the cumulative gain or loss that had been recognised in Held-to-maturity comprise of T Bills and T Bonds. other comprehensive income or accumulated in equity is recognised in the Income Statement. 3.6.1.2 Loans and Receivables
Loans and receivables are financial assets with fixed 3.6.2 Financial Liabilities or determinable payments that are not quoted in an Initial Recognition and Measurement active market. Financial liabilities within the scope of LKAS 39 are classified as financial liabilities at fair value through Subsequent to initial recognition held-to-maturity profit or loss, loans and borrowings and determine financial assets are measured at amortised cost the classification of its financial liabilities at initial using the effective interest method, less any recognition. impairment losses.
SINGER (SRI LANKA) PLC 11 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
All financial liabilities are recognised initially at fair The fair value of financial instruments that are value and in the case of loans and borrowings, plus traded in an active market at each reporting date is directly attributable transaction costs. determined by reference to quoted market prices or dealer price quotations, without any deduction for 3.6.2.1 Financial Liabilities at Fair Value Through transaction costs. Profit or Loss For financial instruments not traded in an active Financial liabilities are classified as fair value through market, the fair value is determined using appropriate profit or loss if it is defined as held for trading and is valuation techniques. Such techniques may include designated at such upon initial recognition. using recent arm’s length market transactions; reference to the current fair value of another Gain or losses on liabilities held for trading are instrument that is substantially the same; a discounted recognised in the Income Statement. cash flow analysis or other valuation models. 3.6.2.2 Other Financial Liabilities 3.6.5 Impairment These are all financial liabilities other than financial 3.6.5.1 Impairment of Financial Assets liabilities at fair value through profit or loss. Financial assets other than those measured at fair The financial liabilities include trade and other value are assessed for indicators of impairment at payables, bank overdrafts, loans and borrowings and the end of each reporting period. Financial assets are financial guarantee. considered to be impaired when there is objective evidence that as a result of one or more event that 3.6.2.3 Derecognition of Financial Liability occurred after the initial recognition of the financial assets, the estimated future cash from the asset have Financial liabilities are derecognised when and only been affected. when they are extinguished, that is when the obligation is discharged, cancelled or expired. The Company assesses at each reporting date whether there is any objective evidence that a financial asset 3.6.3 Amortised Cost Measurement or a group of financial assets is impaired. A financial The amortised cost of a financial asset or liability is asset or a group of financial assets is deemed to be the amount at which the financial asset or liability impaired if, and only if, there is objective evidence is measured at initial recognition, minus principal of impairment as a result of one or more events that repayments and any impairment and plus/minus the has occurred after the initial recognition of the asset cumulative amortisation using the effective interest and that loss event has an impact on the estimated method of any difference between the initial amount future cash flows of the financial asset or the Group of recognised and the maturity amount financial assets that can be reliably estimated.
3.6.4 Fair Value Measurement (a) Impairment Losses on Financial Assets Carried Fair value is the amount for which an asset could at Amortised Cost be exchanged, or a liability settled, between Impairment losses on assets carried at amortised cost knowledgeable, willing parties in an arm’s length are measured as the difference between the carrying transaction on the measurement date. amount of the financial asset and the present value of estimated future cash flows discounted at the asset’s original effective interest rate.
12 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
Impairment losses are recognised in profit or loss The Significant Accounting Policies set out in Note and reflected in an allowance account against loans No. 3 have been applied in preparing the interim and advances. When a subsequent event causes the Financial Statements for the nine months ended amount of impairment loss to decrease, the decrease 30th September 2012 and the 3rd quarter ended 30th in impairment loss is reversed through profit or loss. September 2012 and comparative information for all the periods presented and in the preparation of the opening (b) Impairment Losses on Available-for-Sale SLFRS financial position as at 1st January 2011. Financial Assets 4.1 Exemption Offered in the SLFRS - 1 First Impairment losses on available-for-sale investment Time Adoption of Sri Lanka Accounting Standards securities are recognised by transferring the (SLFRS) cumulative loss that has been recognised in other comprehensive income to profit or loss as a Group has taken the advantage of the following reclassification adjustment. The cumulative loss that optional exemptions offered in the SLFRS - 1 First is reclassified from other comprehensive income to Time Adoption of Sri Lanka Accounting Standards profit or loss is the difference between the acquisition (SLFRSs). cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss 4.1.1 Exemption from Business Combinations previously recognised in profit or loss. Changes in The Group elected not to apply IFRS 3, retrospectively impairment provisions attributable to time value are to past business combinations that occurred before reflected as a component of interest income. 1st January 2011.
If, in a subsequent period, the fair value of an 4.1.2 Exemption from Other SLFRs impaired available-for-sale debt security increases and the increase can be objectively related to an event Investments in Subsidiaries and Associates occurring after the impairment loss was recognised The Group elected to account for its Investments in in profit or loss, the impairment loss is reversed, with Subsidiaries and Associates at cost in its separate the amount of the reversal recognised in profit or loss. Financial Statements as recognised previously as per However, any subsequent recovery in the fair value the previous Sri Lanka Accounting Standards. of an impaired available-for-sale equity security is recognised in other comprehensive income. 4.1.3 The Group has Applied the following Mandatory Exceptions
4. First Time Adoption of SLFRSs/LKAS Significant Accounting Judgment, Estimates and The interim condensed Financial Statements, for the Assumptions period ended 30th September 2012, are the Significant accounting judgment, estimates and first Financial Statements prepared in accordance assumptions at 1st January 2011 and at 31st with SLFRS/LKAS. Previously for period up to December 2011 are consistent with those made for the 31st December 2011, the Group and Company same dates in accordance with SLAS effective up to prepared its Financial Statements in accordance with 31st December 2011 (after adjustment to reflect any Sri Lanka Accounting Standards which were effective difference in accounting policies). up to 31st December 2011.
SINGER (SRI LANKA) PLC 13 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
The estimates used by the Group to present these amounts in accordance with SLFRS/LKAS effective from 1st January 2012 reflect conditions at 1st January 2011, the date of transition to SLFRS/ LKAS and as of 31st December 2011.
4.2 Explanations for Transition to SLFRS/LKASs In preparing SLFRS/LKAS statement of financial position for previously reported financial periods, required adjustments have been made, in accordance with the respective SLFRS/LKASs. The effect of the transition from SLASs to SLFRS/LKASs has been presented in the Note No. 6 to the Financial Statements.
5. New Accounting Standards Issued but not yet Effective The Institute of Chartered Accountants of Sri Lanka has issued the following standards which become effective for annual periods beginning after the current financial year. Accordingly these standards have not been applied in preparing these Financial Statements. The Group expects that these standards when applied will have substantial impact to the financial performance, financial position and disclosures. The Group will be adopting these standards when they become effective.
SLFRS 9 - Financial Instruments SLFRS 10 - Consolidated Financial Statements SLFRS 11 - Joint Arrangements SLFRS 12 - Disclosure of Interest in other entities SLFRS 13 - Fair Value Measurement
6. Explanations for Transition to SLFRS/LKAS In preparing SLFRS/LKAS statement of financial position for previously reported financial period, required adjustments have been made in accordance with the respective SLFRS/LKASs. The effect of the transition from SLASs to SLFRS/LKASs, has been presented in the reconciliation statements and accompanying notes to the material reconciliation items.
14 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Reconciliation of Income Statement
For the nine months ended 30th September 2011
Group Company Effect of Effect of Transition to As per Transition to As per As per SLAS SLFRS SLFRS/LKAS As per SLAS SLFRS SLFRS/LKAS Note Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Revenue 6.1 15,474,035 (9,530) 15,464,505 14,706,343 (9,681) 14,696,662 Cost of Sales (9,598,709) – (9,598,709) (9,598,709) – (9,598,709) Gross Profit 5,875,326 (9,530) 5,865,796 5,107,634 (9,681) 5,097,952 Other Operating Income 62,921 – 62,921 127,451 – 127,451 Selling and Administration Expenses 6.1 (3,752,520) (17,638) (3,770,158) (3,455,190) (13,056) (3,468,245) Other Operating Expenses (156,572) – (156,572) (149,847) – (149,847) Finance Cost (601,369) 257 (601,112) (414,877) – (414,877) Finance Income 55,502 17,638 73,139 67,780 13,056 80,836 Net Finance Cost (545,867) 17,894 (527,973) (347,097) 13,056 (334,041) Share of Loss of Equity Accounted Investees (Net of Income Tax) (606) – (606) – – – Value Added Tax on Financial Services (48,297) – (48,297) (27,000) – (27,000) Profit before Tax 1,434,385 (9,274) 1,425,111 1,255,951 (9,681) 1,246,269 Income Tax Expense 6.1 (559,242) 2,711 (556,531) (472,485) 2,711 (469,774) Profit for the Period 875,143 (6,563) 868,580 783,466 (6,971) 776,494
Attributable to: Equity Holders of the Company 844,073 (4,922) 839,150 783,466 (6,971) 776,495 Non-Controlling Interest 31,071 (1,641) 29,430 – – – Profit for the Period 875,143 (6,563) 868,580 783,466 (6,971) 776,495
SINGER (SRI LANKA) PLC 15 Interim Financial Statements for the nine months ended 30th September 2012
Reconciliation - Company Statement of Financial Position
Equity as at 30th September 2011 Effect of Transition to As per As per SLAS SLFRS SLFRS/LKAS Note Rs. ’000 Rs. ’000 Rs. ’000
ASSETS Non-Current Assets Property, Plant & Equipment 1,493,121 – 1,493,121 Intangible Assets 145,592 – 145,592 Investments in Subsidiaries 400,000 – 400,000 Investments in Equity Accounted Investees 6.2 48,000 – 48,000 Other Investments 6.2 17,020 2,592 19,612 Trade and Other Receivables 1,199,011 (14,059) 1,184,952 Deferred Tax Assets 113,664 – 113,664 3,416,407 (11,467) 3,404,941 Current Assets Inventories 3,334,414 – 3,334,414 Loans due from Related Parties 505,439 – 505,439 Trade and Other Receivables 6.2 3,789,635 (101,361) 3,688,274 Amounts due from Related Parties - Trade 708,856 – 708,856 Amounts due from Related Parties - Non-Trade 101,718 – 101,718 Deposits with Banks – – – Marketable Securities – – – Cash and Cash Equivalents 359,927 – 359,927 8,799,989 (101,361) 8,698,628 Total Assets 12,216,396 (112,828) 12,103,569 EQUITY AND LIABILITIES Equity Stated Capital 626,048 – 626,048 Capital Reserves 658,466 – 658,466 Revenue Reserves 6.3 2,701,818 (12,910) 2,688,908 Total Equity Attributable for Equity Holders of the Company 3,986,332 (12,910) 3,973,422 Non-Controlling Interest – – – Total Equity 3,986,332 (12,910) 3,973,422
Non-Current Liabilities Interest-Bearing Loans and Borrowings 1,434,749 – 1,434,749 Retirement Benefit Obligations 235,267 – 235,267 Deferred Taxation Liability 96,977 – 96,977 Security Deposits 463,378 – 463,378 Deposits from Customers – – – 2,230,371 – 2,230,371 Current Liabilities Trade and Other Payables 1,976,027 – 1,976,027 Deferred Revenue 115,420 (92,614) 22,806 Income Tax Payable 178,956 (7,304) 171,652 Dividends Payable 9,814 – 9,814 Amounts due to Related Parties - Trade 233,626 – 233,626 Amounts due to Related Parties - Non-Trade 171,803 – 171,803 Deposits from Customers – – – Interest-Bearing Loans and Borrowings 3,314,048 – 3,314,048 5,999,693 (99,918) 5,899,776 Total Equity and Liabilities 12,216,396 (112,828) 12,103,569
16 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Reconciliation - Company Statement of Financial Position
Equity as at 1st January 2011 Equity as at 31st December 2011 (Date of Transition to SLFRS/LKAS) Effect of Effect of Transition to As per Transition to As per As per SLAS SLFRS SLFRS/LKAS As per SLAS SLFRS SLFRS/LKAS Note Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
ASSETS Non-Current Assets Property, Plant & Equipment 1,659,601 – 1,659,601 1,536,053 – 1,536,053 Intangible Assets 141,266 – 141,266 155,619 – 155,619 Investment in Subsidiaries 400,000 – 400,000 400,000 – 400,000 Investments in Equity Accounted Investees 48,000 – 48,000 24,000 – 24,000 Other Investments 6.2 17,020 591 17,611 17,020 1,635 18,655 Trade and Other Receivables 6.2 1,258,913 (119,451) 1,139,462 1,035,300 (75,933) 959,367 Deferred Tax Assets 125,502 – 125,502 114,353 – 114,353 3,650,302 (118,860) 3,531,442 3,282,345 (74,298) 3,208,047 Current Assets Inventories 3,413,956 – 3,413,956 2,149,041 – 2,149,041 Loans due from Related Parties 539,506 – 539,506 611,410 – 611,410 Trade and Other Receivables 6.2 4,326,897 18,745 4,345,642 3,219,839 9,649 3,229,488 Amounts due from Related Parties - Trade 569,973 – 569,973 953,850 – 953,850 Amounts due from Related Parties - Non-Trade 23,540 – 23,540 29,556 – 29,556 Deposits with Banks – – – – – – Marketable Securities – – – – – – Cash & Cash Equivalents 364,736 – 364,736 200,403 – 200,403 9,238,608 18,745 9,257,353 7,164,100 9,649 7,173,748 Total Assets 12,888,910 (100,115) 12,788,795 10,446,445 (64,649) 10,381,795 EQUITY AND LIABILITIES Equity Stated Capital 626,048 – 626,048 626,048 – 626,048 Capital Reserves 655,454 – 655,454 664,542 – 664,542 Statutory Reserve – – – – – – Revenue Reserves 6.3 3,085,527 591 3,086,118 2,316,845 (6,896) 2,309,949 Total Equity Attributable for Equity Holders of the Company 4,367,029 591 4,367,620 3,607,435 (6,896) 3,600,539 Non-Controlling Interest – – – – – – Total Equity 4,367,029 591 4,367,620 3,607,435 (6,896) 3,600,539
Non-Current Liabilities Interest-Bearing Loans & Borrowings 754,125 – 754,125 1,265,833 – 1,265,833 Retirement Benefit Obligations 197,833 – 197,833 176,663 – 176,663 Deferred Taxation Liability 95,805 – 95,805 99,339 – 99,339 Security Deposits 487,449 – 487,449 403,894 – 403,894 Deposits from Customers – – – – – – 1,535,212 – 1,535,212 1,945,729 – 1,945,729 Current Liabilities Trade and Other Payables 2,126,108 – 2,126,108 1,218,205 – 1,218,205 Deferred Revenue 6.2 118,359 (100,705) 17,654 66,284 (53,159) 13,125 Income Tax Payable 170,547 – 170,547 123,028 (4,594) 118,434 Dividends Payable 5,825 – 5,825 3,205 – 3,205 Amounts due to Related Parties - Trade 171,272 – 171,272 268,648 – 268,648 Amounts due to Related Parties - Non-Trade 73,441 – 73,441 53,272 – 53,272 Deposits from Customers – – – – – – Interest-Bearing Loans and Borrowings 4,321,117 – 4,321,117 3,160,639 – 3,160,639 6,986,669 (100,705) 6,885,963 4,893,281 (57,753) 4,835,527 Total Equity and Liabilities 12,888,910 (100,115) 12,788,795 10,446,446 (64,649) 10,381,795
SINGER (SRI LANKA) PLC 17 Interim Financial Statements for the nine months ended 30th September 2012
Reconciliation - Consolidated Statement of Financial Position
Equity as at 30th September 2011 Effect of Transition to As per As per SLAS SLFRS SLFRS/LKAS Note Rs. ’000 Rs. ’000 Rs. ’000
ASSETS Non-Current Assets Property, Plant & Equipment 1,519,106 – 1,519,106 Intangible Assets 158,593 – 158,593 Investment in Subsidiaries – – – Investments in Equity Accounted Investees 46,918 – 46,918 Other Investments 6.2 17,061 2,592 19,653 Trade and Other Receivables 6.2 3,621,916 (13,930) 3,607,986 Deferred Tax Assets 113,664 – 113,664 5,477,258 (11,338) 5,465,920 Current Assets Inventories 3,349,790 – 3,349,790 Loans due from Related Parties 174,172 – 174,172 Trade and Other Receivables 6.2 6,487,875 (101,361) 6,386,514 Amounts due from Related Parties - Trade 2,544 – 2,544 Amounts due from Related Parties - Non-Trade 101,718 – 101,718 Deposits with Banks – – – Marketable Securities 272,199 – 272,199 Cash and Cash Equivalents 374,213 – 374,213 10,762,510 (101,361) 10,661,150 Total Assets 16,239,768 (112,699) 16,127,070 EQUITY AND LIABILITIES Equity Stated Capital 626,048 – 626,048 Capital Reserves 674,816 – 674,816 Statutory Reserve 22,573 – 22,573 Revenue Reserves 6.3 2,995,728 (10,148) 2,985,580 Total Equity Attributable for Equity Holders of the Company 4,319,165 (10,148) 4,309,017 Non-Controlling Interest 244,638 920 245,559 Total Equity 4,563,803 (9,228) 4,554,576
Non-Current Liabilities Interest-Bearing Loans and Borrowings 1,509,753 – 1,509,753 Retirement Benefit Obligations 241,575 – 241,575 Deferred Taxation Liability 131,384 – 131,384 Security Deposits 463,378 – 463,378 Deposits from Customers 461,275 – 461,275 2,807,365 – 2,807,365 Current Liabilities Trade and Other Payables 2,360,417 (2,626) 2,357,791 Deferred Revenue 6.2 135,175 (93,541) 41,634 Income Tax Payable 168,672 (7,304) 161,367 Dividends Payable 9,814 – 9,814 Amounts due to Related Parties - Trade 233,626 – 233,626 Amounts due to Related Parties - Non-Trade 171,803 – 171,803 Deposits from Customers 2,118,188 – 2,118,188 Interest-Bearing Loans and Borrowings 3,670,906 – 3,670,906 8,868,600 (103,471) 8,765,129 Total Equity and Liabilities 16,239,768 (112,699) 16,127,070
18 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Reconciliation - Consolidated Statement of Financial Position
Equity as at 1st January 2011 Equity as at 31st December 2011 (Date of Transition to SLFRS/LKAS) Effect of Effect of Transition to As per Transition to As per As per SLAS SLFRS SLFRS/LKAS As per SLAS SLFRS SLFRS/LKAS Note Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
ASSETS Non-Current Assets Property, Plant & Equipment 1,691,107 – 1,691,107 1,564,240 – 1,564,240 Intangible Assets 153,933 – 153,933 165,190 – 165,190 Investment in Subsidiaries – – – – – – Investments in Equity Accounted Investees 46,886 – 46,886 23,525 – 23,525 Other Investments 6.2 17,061 591 17,652 17,061 1,635 18,696 Trade and Other Receivables 6.2 4,261,101 (119,376) 4,141,725 2,545,742 (75,624) 2,470,118 Deferred Tax Assets 147,577 – 147,577 114,353 – 114,353 6,317,664 (118,785) 6,198,879 4,430,110 (73,990) 4,356,122 Current Assets Inventories 3,430,827 – 3,430,827 2,149,041 – 2,149,041 Loans due from Related Parties 173,635 – 173,635 202,218 – 202,218 Trade and Other Receivables 6.2 6,960,125 18,745 6,978,871 5,475,745 9,649 5,485,394 Amounts due from Related Parties - Trade 7,986 – 7,986 6,724 – 6,724 Amounts due from Related Parties - Non-Trade 23,540 – 23,540 29,556 – 29,556 Deposits with Banks – – – – – – Marketable Securities 290,313 – 290,313 410,552 – 410,552 Cash & Cash Equivalents 372,303 – 372,303 250,574 – 250,574 11,258,728 18,745 11,277,474 8,524,410 9,649 8,534,059 Total Assets 17,576,392 (100,040) 17,476,353 12,954,520 (64,340) 12,890,181 EQUITY AND LIABILITIES Equity Stated Capital 626,048 – 626,048 626,048 – 626,048 Capital Reserves 655,454 – 655,454 664,542 – 664,542 Statutory Reserve 44,408 – 44,408 10,748 – 10,748 Revenue Reserves 6.3 3,413,011 2,947 3,415,958 2,578,325 (4,441) 2,573,844 Total Equity Attributable for Equity Holders of the Company 4,738,921 2,947 4,741,868 3,879,663 (4,441) 3,875,222 Non-Controlling Interest 257,669 786 258,455 224,234 819 225,053 Total Equity 4,996,590 3,733 5,000,323 4,103,897 (3,622) 4,100,275
Non-Current Liabilities Interest-Bearing Loans & Borrowings 1,110,385 – 1,110,385 1,287,291 – 1,287,291 Retirement Benefit Obligations 204,787 – 204,787 181,876 – 181,876 Deferred Taxation Liability 99,932 – 99,932 103,467 – 103,467 Security Deposits 487,449 – 487,449 403,894 – 403,894 Deposits from Customers 503,142 – 503,142 195,995 – 195,995 2,405,695 – 2,405,695 2,172,521 – 2,172,523 Current Liabilities Trade and Other Payables 2,574,219 (2,755) 2,571,464 1,500,316 (2,369) 1,497,947 Deferred Revenue 6.2 139,379 (101,017) 38,362 79,309 (53,756) 25,553 Income Tax Payable 197,322 – 197,322 155,877 (4,594) 151,283 Dividends Payable 5,825 – 5,825 3,205 – 3,205 Amounts due to Related Parties - Trade 171,272 – 171,272 268,648 – 268,648 Amounts due to Related Parties - Non-Trade 73,441 – 73,441 53,272 – 53,272 Deposits from Customers 2,159,857 – 2,159,857 1,451,991 – 1,451,991 Interest-Bearing Loans and Borrowings 4,852,792 – 4,852,792 3,165,484 – 3,165,484 10,174,107 (103,772) 10,070,335 6,678,100 (60,718) 6,617,383 Total Equity and Liabilities 17,576,392 (100,040) 17,476,353 12,954,520 (64,340) 12,890,181
SINGER (SRI LANKA) PLC 19 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
6.1 Income Statement
30th September 2011 Group Company Rs. '000 Rs. '000 Revenue Deferred Revenue (9,681) (9,681) Service Revenue 151 – (9,530) (9,681)
Selling and Administration Employee Benefit on Employee Loans (17,638) (13,056) (17,638) (13,056)
Net Finance Cost Finance Income on Employee Loans 17,638 13,056 Finance Cost 257 – 17,894 13,056
Income Tax Tax Adjustment on Deferred Revenue 2,711 2,711 2,711 2,711
6.2 Financial Position
Group Company 31st Dec. 1st Jan. 30th Sep. 31st Dec. 1st Jan. 30th Sep. 2011 2011 2011 2011 2011 2011 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Trade and Other Receivables Employee Loans - Reclassification to Prepaid 18,820 9,958 14,188 18,745 9,649 14,059
Deferred Revenue Netting off with Instalment Receivables 101,017 66,880 116,347 100,705 66,284 115,420 Deferred Revenue Recognition in Income Statement – (13,125) (9,681) – (13,125) (9,681) 101,017 53,756 106,666 100,705 53,159 105,739
Available-for-Sale Financial Assets Fair Value of Unquoted Investment as per SLFRS/LKAS 17,611 18,655 19,612 17,611 18,655 19,612 Carrying Amount of Unquoted Investment as per SLAS 17,020 17,020 17,020 17,020 17,020 17,020 Gain/(Loss) on Available-for-Sale Financial Assets 591 1,635 2,592 591 1,635 2,592
20 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
6.3 Retained Earnings
The following is a summery of transition adjustments to the Group and Company retained earnings from SLAS to SLFRS/LKAS:
Group Company 31st Dec. 1st Jan. 30th Sep. 31st Dec. 1st Jan. 30th Sep. 2011 2011 2011 2011 2011 2011 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Retained Earnings Reported as SLAS 4,996,590 4,103,897 4,563,803 4,367,029 3,607,435 3,986,332
SLFRS/LKAS Adjustments Deferred Revenue – (13,125) (9,681) – (13,125) (9,681) Service Revenue 386 905 1,056 – – – Finance Cost 2,755 2,369 2,626 – – – Tax Adjustment on Deferred Revenue – 4,594 2,711 – 4,594 2,711 Fair Value Adjustment - Investment 591 1,635 2,592 591 1,635 2,592 Retained Earnings as per SLFRS/LKAS 5,000,323 4,100,275 4,554,576 4,367,620 3,600,539 3,973,422
6.4 Segmental Analysis of Company Net Turnover is as follows:
Quarter ending Quarter ending 9 months ending 9 months ending 30th September 2012 30th September 2011 30th September 2012 30th September 2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Sewing-Related Products 640,017 550,972 1,998,156 1,624,083 Consumer Electronics 1,362,861 1,334,816 4,283,300 4,279,244 White Goods 2,174,958 1,796,087 6,888,754 5,241,770 Kitchen-Related Products 421,411 357,560 1,293,636 1,038,148 Communications 338,454 344,768 946,437 897,036 Furniture 319,517 237,359 979,373 741,724 Transport 158,741 107,616 435,886 348,259 Agro 248,271 201,389 719,306 526,398 5,664,230 4,930,567 17,544,848 14,696,662
SINGER (SRI LANKA) PLC 21 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
6.5 Segmental Analysis of Company Profits before Tax is as follows:
Quarter ending Quarter ending 9 months ending 9 months ending 30th September 2012 30th September 2011 30th September 2012 30th September 2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Sewing-Related Products 19,608 43,465 118,397 131,962 Consumer Electronics 48,541 162,058 298,452 451,573 White Goods 68,938 127,218 379,764 384,146 Kitchen-Related Products 16,764 30,979 92,206 121,905 Communications 4,589 15,255 39,822 48,065 Furniture 14,826 15,850 58,055 56,777 Transport 2,135 10,734 10,280 11,203 Agro 12,689 11,035 42,929 35,639 Dividend Income – – 59,596 32,000 Value Added Tax on Financial Services (5,251) (9,000) (21,752) (27,000) 182,836 407,593 1,077,748 1,246,269
6.6 Segmental Analysis of Group Net Turnover is as follows:
Quarter ending Quarter ending 9 months ending 9 months ending 30th September 2012 30th September 2011 30th September 2012 30th September 2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Sewing-Related Products 640,017 550,972 1,998,156 1,624,083 Consumer Electronics 1,362,861 1,334,816 4,283,300 4,279,244 White Goods 2,174,958 1,796,087 6,888,754 5,241,770 Kitchen-Related Products 421,411 357,560 1,293,636 1,038,148 Communications 338,454 344,768 946,437 897,036 Furniture 319,517 237,359 979,373 741,724 Transport 158,741 107,616 435,886 348,259 Agro 248,271 201,389 719,306 526,398 Singer Finance (Lanka) PLC 396,619 275,963 1,109,195 767,843 6,060,849 5,206,530 18,654,043 15,464,505
22 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
6.7 Segmental Analysis of Group Profits before Tax is as follows:
Quarter ending Quarter ending 9 months ending 9 months ending 30th September 2012 30th September 2011 30th September 2012 30th September 2011 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Sewing-Related Products 19,608 43,465 118,397 131,962 Consumer Electronics 48,541 162,058 298,452 451,573 White Goods 70,938 127,218 379,764 384,146 Kitchen-Related Products 16,764 30,979 92,206 121,905 Communications 4,589 15,255 39,822 48,065 Furniture 14,826 15,850 58,055 56,777 Transport 2,135 10,734 10,280 11,203 Agro 12,689 11,035 42,929 35,639 Singer Finance (Lanka) PLC 87,136 75,067 250,111 232,744 Dividend – – 1,996 – Share of Profit on Equity Accounted Investees 337 (13) 1,111 (606) Value Added Tax on Financial Services (10,115) (14,940) (36,593) (48,297) 267,448 476,708 1,256,529 1,425,111
7. Related Party Transactions 7.1 Identity of Related Parties The Company has a related party relationship with its Parent Company, its Associate Companies, Affiliate Companies and with its Directors.
7.2 Transactions with Parent Companies (a) During the year, Company had Following Transactions with its Parent Companies: Singer Asia Ltd. - (Intermediate Parent)
2012 2011 Rs. Million Rs. Million Royalty Expenses 194.7 163.4 Royalty Payable Balance as at Period end 65.2 171.9
Singer Asia Holdings BV - (Intermediate Parent) Royalty Paid to Singer Asia Ltd. through Singer Asia Holding BV
Singer (Sri Lanka) BV - (Intermediate Parent)
2012 2011 Rs. Million Rs. Million Dividend Paid 646.9 188.7
SINGER (SRI LANKA) PLC 23 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
(b) Following companies are also Parent Companies of Singer (Sri Lanka) PLC and Singer Finance (Lanka) PLC with whom no transactions were entered into during the period:
Company Relationship Singer (Sri Lanka) BV Intermediate Parent Singer Asia Holdings NV Intermediate Parent Retail Holdings NV Ultimate Parent
7.3 Transactions with Subsidiary Companies 2012 2011 Rs. Million Rs. Million Singer Finance (Lanka) PLC Sales Financed through SFLL 1,057.6 1,624.2 Payments to Singer (Sri Lanka) PLC on behalf of Customers 909.8 1,522.8 Short-Term Loan Given 963.0 – Short-Term Loan Settled 400.0 Interest Income 94.9 55.7 Dividend Received (Gross) 64.0 32.0 Rental Collection through Singer (Sri Lanka) PLC 2,087.2 2,292.3 Expenses Paid 117.2 68.0 Administrative Fee Charged 61.2 55.9 Collecting Commission Paid through Singer (Sri Lanka) PLC 11.9 7.1 Purchase of Assets 0.3 – Rent Reimbursed 10.5 8.1 Royalty Paid through Singer (Sri Lanka) PLC 12.4 8.5 Balance Receivable - Trade 343.7 706.3 Balance Receivable - Loans 563.0 331.8
7.4 Transactions with Associate Companies (a) During the year the Company had following transactions with its Associate Comapnies:
2012 2011 Rs. Million Rs. Million Reality (Lanka) Ltd. Rent Charged by Reality Lanka Ltd. 4.1 1.8 Interest Income Charged by Singer (Sri Lanka) PLC – 4.3 Investment Made – 24.0 Interest Receivable – 22.2 Loan Receivable 73.6 45.1
(b) Following company is an Associate Company of Singer (Sri Lanka) PLC, with whom Singer (Sri Lanka) PLC or Singer Finance (Lanka) PLC had no transactions taken place other than through Advertising Agencies during the year:
Telshan Network (Pvt) Ltd.
24 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
7.5 Transactions with Other Related Parties Transactions with the following parties have been disclosed in Note 3.6:
Company Relationship Regnis (Lanka) PLC Affiliate Company Singer Industries (Ceylon) PLC Affiliate Company Singer Asia Sourcing Ltd. Affiliate Company
7.6 Transactions with Key Management Personnel and Directors (a) Loans to Directors No Loans have been given to the Directors of the Company. (b) A number of Key Management Personnel or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. These transactions are given below:
Name of the Company Name of Nature of 2012 2011 and Relationship Director Transaction Rs. Million Rs. Million Singer Industries Mr. H.D.S. Amarasuriya (Ceylon) PLC (Chairman) Purchases 634.0 657.0 (Affiliate Company) Mr. H.A. Pieris Net Finance (Charges)/Income 0.3 1.3 Dr. G.C.B. Wijeyesinghe Corporate Guarantee Given 75.0 75.0 Mr. G. J. Walker Lease Rental Paid 3.5 1.9 Deshabandu A.M. de S. Jayaratne Dividend Paid – 2.8 Mr. V.G.K. Vidyaratne Purchase of Raw Material 5.2 0.14 Trade Credit Settled 608.8 738.0 Loans Receivable – – Balance Payable 78.5 58.6
Regnis (Lanka) PLC Mr. H.D.S. Amarasuriya (Affiliate Company) (Chairman) Purchases 1,589.0 1,368.1 Dr. G.C.B. Wijeyesinghe Corporate Guarantees Given 455.5 455.5 Mr. H.A. Pieris Interest Income 8.4 5.1 Mr. V.G.K. Vidyaratne Non-Trade Settlement 20.0 37.0 Mr. G.J. Walker Trade Credit Settled 1,803.9 1,579.6 Dr. S. Kelegama Sales Taxes 227.0 – Expenses Paid 33.5 30.5 Loan Settled – 70.0 Loan Payable 60.0 – Balance Payable 77.5 51.3
SINGER (SRI LANKA) PLC 25 Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
Name of the Company Name of Nature of 2012 2011 and Relationship Director Transaction Rs. Million Rs. Million
Singer Finance Mr. H.D.S. Amarasuriya Sales Financed through (Lanka) PLC (Chairman) Singer Finance (Lanka) Ltd. 1,057.6 1624.2 (Subsidiary Company) Dr. G.C.B. Wijeyesinghe Payments to Singer (Sri Lanka) PLC (Resigned w.e.f 30.12.2011) on behalf of Customers 909.8 1,522.8 Mr. H.A. Pieris Short-Term Loan Given 963.0 – Dr. S. Kelegama Short-Term Loan Settled 400.0 Mr. M.P.A. Salgado Interest Income 94.9 55.7 Mr. G.J. Walker Dividend Received (Gross) 64.0 32.0 Mr. J.J. Hyun Rental Collection through (Appointed w.e.f. 28.2.2011) Singer (Sri Lanka) PLC 2,087.2 2,292.3 Expenses Paid 117.2 68.0 Administrative Fee Charged 61.2 55.9 Collecting Commission Paid through Singer (Sri Lanka) PLC 11.9 7.1 Purchase of Assets 0.3 – Rent Reimbursed 10.5 8.1 Royalty Paid through Singer (Sri Lanka) PLC 12.4 8.5 Balance Receivable - Trade 343.7 706.3 Balance Receivable - Loans 563.0 331.8
National Development Bank PLC Mr. H.D.S. Amarasuriya Borrowed Money 290.0 201.0 Interest Paid 21.8 14.0 Issue of Debentures 150.0 270.0 Debenture Interest – 14.7
Singer Asia Sourcing Ltd. Mr. G.J. Walker Purchases – 32.9 (Affiliate Company) Settlements – 26.9 Balance (Receivable)/Payables 7.5 2.0
Singer Asia Ltd. Mr. P.J. O'Donnell Royalty Expenses 194.7 163.4 (Intermediate Parent Company) Mr. T. Brown Royalty Payable 65.2 171.9 (Resigned w.e.f. 10.06.2011) Mr. G.J. Walker Mr. H.A. Pieris
Sampath Bank PLC Dr. S. Kelegama Borrowed Money – 246.3 (Resigned w.e.f. 30.12.2011) Interest Paid 28.8 11.1
Reality Lanka Ltd. Mr. H.D.S. Amarasuriya Rent Charged 4.1 1.8 (Associate Company) Mr. H.A. Pieris Interest Income – 4.3 Mr. V.G.K. Vidyarathne Investment Made – 24.0 Mr. G.J. Walker Interest Receivable – 22.2 Loan Receivable 73.6 45.1
Regnis Appliances (Pvt) Ltd. Mr. H.D.S. Amarasuriya Purchases 664.7 356.4 Mr. H.A. Pieris Settlements 804.6 388.4 Mr. V.G.K. Vidyaratne Expenses Paid 1.2 – Mr. A.N. Majeed Finance Charges 6.0 0.6 Mr. G.J. Walker Loan Settled 80.0 – Non-Trade Settlements 6.7 – Balance Payable - Trade – – Balance Payable - Loan 20.0 100.0 Fintravels Ltd. Dr. G.C.B. Wijeyesinghe Business Transactions 6.2 4.6
26 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
Notes to the Financial Statements
(c) Key Management Personnel includes members of the Board of Directors of the Company, its Subsidiary and Parent. Transaction with Key Management Personnel, their close family members and parties/entities in which such Key Management Personnel or their close family members have control, joint control or significant influence can be shown as follows:
(i) Transactions with Key Management Personnel or their close family members
2012 2011 Rs. Million Rs. Million Deposits kept by Key Management Personnel or their close family members of Singer Finance (Lanka) PLC 86.2 39.2
8. Stated Capital
8.1 30th September 2012 30th September 2011
Value - Ordinary Shares Rs. 626,048,050/- Rs. 626,048,050/- No. of Shares - Ordinary Shares 125,209,610 125,209,610 Voting Rights One Vote per Ordinary Share One Vote per Ordinary Share
9. Contingencies (a) Guarantees given to banks and other lending institutions on behalf of Singer Industries (Ceylon) PLC and Regnis (Lanka) PLC amounts to Rs. 75 Million and Rs. 455.5 Million respectively.
(b) The Company has provided Bank Guarantees amounting to Rs. 130.2 Million to the Director General of Customs to clear imports during the year under review pending completion of legal proceedings in the Court of Appeal. The Bank Guarantee related to alleged additional duty payable on imports, is being contested by the Company in Courts. The Company lawyers are of the opinion that there is no basis that the Company is liable for the additional duty and hence, no provision is made in the Financial Statements.
10. Events Occurring after the Balance Sheet Date There have been no material events occurring after the Balance Sheet date that require disclosure in the Financial Statements, except - (i) The Company has issued 6,440,000 of senior rated unsecured redeemable listed Debentures of the par value of Rs. 100/- each on 25th October 2012, for the value of Rs. 644,000,000/- under the following terms: Coupon Method Coupon Payment Coupon Rate
Interest Payment - Option 1 Fixed Quarterly 16.75% - 17.75% Option 2 Floating Quarterly 2 months gross TB rate +2.25% Tenure - 3 years Capital Payment - On maturity
SINGER (SRI LANKA) PLC 27 Interim Financial Statements for the nine months ended 30th September 2012
11. Listed Debentures Details regarding the listed debentures are as follows: 1. 19.75% debentures unsecured redeemable on 29th February 2013. 2. 6 months TB +1.65 debentures unsecured redeemable on 29th September 2012.
Interest rate of comparable Government Securities as at date of issue, 30th September 2008 was 19.75%. Interest rate of comparable Government Securities as at 30th September 2012 was 13.96%.
The listed debentures were not traded during the period 30th September 2008 to 30th September 2012. Therefore, highest traded price, lowest traded price, last traded price as at 30th September 2012, interest yield and yield to maturity of trade were not available.
30th September 2012 30th September 2011 Debt Equity Ratio 0.09 0.36 Interest Cover 2.73 4.62 Quick Assets Ratio 0.68 0.91
12. Top 20 Shareholders as at 30th September 2012 Name No. of Shares % 1. Singer (Sri Lanka) BV 107,812,850 86.11 2. Bank of Ceylon A/c Ceybank Unit Trust 4,115,723 3.29 3. Bank of Ceylon A/c Ceybank Century Growth Fund 592,842 0.47 4. Miss Ranjani Eileen Weeraratne Jayasuriya 592,516 0.47 5. Mrs. Mihiri Virani Fernando 470,000 0.38 6. Mrs. Zohra Taher Jafferjee 330,890 0.26 7. Mrs. Anoma Kamalika Amarasuriya 178,970 0.14 8. Sri Lanka Insurance Corporation Ltd. - General Fund 177,500 0.14 9. Dr. Nimal Ebenezer Herat Sanderatne 174,664 0.14 10. Sampath Bank PLC/Capital Trust Holdings Private Ltd. 153,006 0.12 11. Mas Capital (Private) Ltd. 135,400 0.11 12. Mrs. Kalutaravedage Jinangali Manel De Silva 131,248 0.10 13. Mr. Nalin Amita De Silva 126,326 0.10 14. Jafferjee Brothers (Exports) Ltd. 125,200 0.10 15. Miss Nai Kaluge Ruvani Hemamala De Silva 118,246 0.09 16. Mrs. Enoka Kamali Wickramasinghe 112,644 0.09 17. Mr. Hemaka Devapriya Senarath Amarasuriya 89,482 0.07 18. Merchant Bank of Sri Lanka Ltd./Union Investments Ltd. 88,894 0.07 19. Mr. Abeysiri Hemapala Munasinghe 83,986 0.07 20. Mrs. Malini Wijenaike 82,006 0.07 115,692,393 92.39 Others 9,517,217 7.61 Total 125,209,610 100.00
28 SINGER (SRI LANKA) PLC Interim Financial Statements for the nine months ended 30th September 2012
13. Directors and CEO's Shareholding as at 30th September 2012 Name of the Director Shareholding Shareholding 30th September 2012 31st December 2011 No. of Shares No. of Shares Mr. H.D.S. Amarasuriya 89,482 89,482 Mr. H.A. Pieris - CEO 2,000 500 Dr. G.C.B. Wijeyesinghe – – Dr. Saman Kelegama – – Deshabandu Ajit Jayaratne – – Mr. P.J. O'Donnell – – Mr. John J. Hyun – – Mr. G.J. Walker – – Mr. V.G.K. Vidyaratne 23,831 21,236 Mr. M.H. Wijewardene – – Mr. N. Majeed 5,000 1,000 Mr. K. Samarasinghe 4,124 3,124 Mr. M.P.A Salgado 4,000 –
14. Public Holding Public holding as at 30th September 2012 is 13.65% (As at 30th September 2011 - 12.22%).
SINGER (SRI LANKA) PLC 29
Annexure : II Annual Report for the financial years ending 31st December 2011 16 Independent Auditors’ Report
TO THE SHAREHOLDERS OF SINGER (SRI LANKA) PLC We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of Report on the Financial Statements our audit. We therefore believe that our audit provides a reasonable We have audited the accompanying financial statements of basis for our opinion. Singer (Sri Lanka) PLC, the consolidated financial statements of the Company and its subsidiary as at that date which comprise the Opinion balance sheet as at December 31, 2011, and the income statement, In our opinion, so far as appears from our examination, the Company statement of changes in equity and cash flow statement for the maintained proper accounting records for the year ended December year then ended, and a summary of significant accounting policies 31, 2011 and the financial statements give a true and fair view of and other explanatory notes as set out on pages 144 to 186 of the the Company’s state of affairs as at December 31, 2011 and its profit Annual Report. and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards. Management’s Responsibility for the Financial Statements In our opinion, the consolidated financial statements give a true and Management is responsible for the preparation and fair presentation fair view of the state of affairs as at December 31, 2011 and the of these financial statements in accordance with Sri Lanka Accounting profit and cash flows for the year then ended, in accordance with Standards. This responsibility includes: designing, implementing Sri Lanka Accounting Standards, of the Company and its Subsidiary and maintaining internal control relevant to the preparation and dealt with thereby, so far as concerns the members of the Company. fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying Report on Other Legal and Regulatory Requirements appropriate accounting policies; and making accounting estimates These financial statements also comply with the requirements of that are reasonable in the circumstances. Section 153 (2) to 153 (7) of the Companies Act No. 07 of 2007.
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 Chartered Accountants, material misstatement. Colombo An audit includes examining, on a test basis, evidence supporting 28th February 2012 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.
Annual Report 2011 Singer (Sri Lanka) PLC 143 17 Income Statement
Consolidated Company
Year ended 31st December 2011 2010 2011 2010 Note Rs. Rs. Rs. Rs.
Revenue 3 22,010,767,109 16,028,533,802 20,931,312,025 15,177,484,870 Cost of Sales (13,655,527,677) (10,233,156,320) (13,655,527,677) (10,233,156,320) Gross Profit 8,355,239,432 5,795,377,482 7,275,784,348 4,944,328,550
Other Income 5 134,709,962 267,467,070 167,244,869 155,127,078 Selling and Administrative Expenses (5,449,103,540) (3,884,069,598) (5,019,725,936) (3,546,500,255) Other Expenses 6 (195,965,537) (174,471,508) (186,559,996) (167,136,767) Finance Cost 7.1 (839,683,862) (819,353,491) (559,650,375) (587,671,758) Finance Income 7.2 38,212,108 45,128,240 83,832,844 51,452,221 Net Finance Cost (801,471,754) (774,225,251) (475,817,531) (536,219,537) Share of Profit/(Loss) of Equity Accounted Investees (Net of Income Tax) 8 (638,975) (1,016,683) – – Value Added Tax on Financial Services (56,507,301) (61,200,000) (29,000,000) (26,500,000) Profit before Tax 9 1,986,262,287 1,167,861,512 1,731,925,754 823,099,069 Income Tax Expense 10 (679,505,974) (499,042,148) (568,935,468) (399,737,255) Profit for the Year 1,306,756,313 668,819,364 1,162,990,286 423,361,814
Attributable to: Equity Holders of the Company 1,262,654,702 668,011,242 1,162,990,286 423,361,814 Non-Controlling Interest 44,101,611 808,122 – – Profit for the Year 1,306,756,313 668,819,364 1,162,990,286 423,361,814
Earnings per Share - Basic - (Rs.)* 11.2 10.08 5.34 9.29 3.38 Earnings per Share Excluding the Gain on Dilution of equity holding of Singer Finance (Lanka) PLC - (Rs.)* 11.3 10.08 3.92 9.29 3.38 Dividends per Share (Including Proposed Final Dividend) - (Rs.) 33 7.50 4.50
* Information for the previous year has been restated to reflect the subdivision of shares in March 2011.
The Notes on pages 148 through 186 form an integral part of these Financial Statements.
Colombo 28th February 2012
144 Singer (Sri Lanka) PLC Annual Report 2011 18 Balance Sheet
Consolidated Company
As at 31st December 2011 2010 2011 2010 Note Rs. Rs. Rs. Rs. ASSETS Non-Current Assets Property, Plant & Equipment 12 1,691,106,605 1,564,239,939 1,659,601,041 1,536,053,077 Intangible Assets 13 153,933,369 165,189,703 141,266,387 155,618,778 Investment in Subsidiary 14 – – 400,000,000 400,000,000 Investments in Equity Accounted Investees 15 46,885,646 23,524,621 48,000,000 24,000,000 Other long-term Investments 16 17,061,300 17,061,300 17,020,000 17,020,000 Trade and Other Receivables 19.1 4,261,100,668 2,545,741,689 1,258,913,230 1,035,299,957 Deferred Tax Assets 28 147,576,857 114,353,256 125,501,850 114,353,256 6,317,664,445 4,430,110,508 3,650,302,508 3,282,345,068 Current Assets Inventories 17 3,430,827,040 2,149,041,418 3,413,955,560 2,149,041,418 Loans due from Related Parties 18 173,634,631 202,217,767 539,505,864 611,410,191 Trade and Other Receivables 19.2 6,960,125,253 5,475,744,793 4,326,897,165 3,219,839,055 Amounts due from Related Parties - Trade 20.1 7,986,289 6,723,621 569,973,103 953,850,294 Amounts due from Related Parties - Non-Trade 20.2 23,539,522 29,556,243 23,539,522 29,556,243 Marketable Securities 21 290,312,617 410,551,810 – – Cash and Cash Equivalents 22 372,302,709 250,573,958 364,735,727 200,402,845 11,258,728,062 8,524,409,610 9,238,606,941 7,164,100,046 Total Assets 17,576,392,507 12,954,520,118 12,888,909,449 10,446,445,114 Equity Stated Capital 23 626,048,050 626,048,050 626,048,050 626,048,050 Capital Reserves 24 655,453,887 664,542,029 655,453,887 664,542,029 Statutory Reserve 25 44,407,823 10,748,118 – – Revenue Reserves 26 3,413,010,861 2,578,324,678 3,085,526,518 2,316,845,046 Total Equity Attributable to Equity Holders of the Company 4,738,920,621 3,879,662,875 4,367,028,455 3,607,435,125 Non-Controlling Interest 257,669,325 224,234,379 – – Total Equity 4,996,589,946 4,103,897,254 4,367,028,455 3,607,435,125 Non-Current Liabilities Interest-Bearing Loans and Borrowings 27 1,110,385,067 1,287,290,697 754,125,067 1,265,832,925 Retirement Benefit Obligations 29 204,787,190 181,875,758 197,833,421 176,663,436 Deferred Tax Liabilities 28 99,932,484 103,466,761 95,805,177 99,339,454 Security Deposits 487,448,522 403,893,567 487,448,522 403,893,567 Deposits from Customers 35 503,142,064 195,994,681 – – 2,405,695,327 2,172,521,464 1,535,212,187 1,945,729,382 Current Liabilities Trade and Other Payables 30 2,574,219,012 1,500,315,840 2,126,108,140 1,218,205,378 Deferred Revenue 31 139,379,298 79,308,834 118,358,968 66,283,640 Income Tax Payable 197,321,544 155,877,053 170,547,218 123,027,740 Dividend Payable 32 5,824,553 3,204,691 5,824,553 3,204,691 Amounts due to Related Parties - Trade 34.1 171,271,866 268,647,603 171,271,866 268,647,603 Amounts due to Related Parties - Non-Trade 34.2 73,441,026 53,272,425 73,441,026 53,272,425 Deposits from Customers 35 2,159,857,465 1,451,990,703 – – Interest-Bearing Loans and Borrowings 27 4,852,792,470 3,165,484,251 4,321,117,036 3,160,639,130 10,174,107,234 6,678,101,400 6,986,668,807 4,893,280,607 Total Equity and Liabilities 17,576,392,507 12,954,520,118 12,888,909,449 10,446,445,114 The Notes on pages 148 through 186 form an integral part of these Financial Statements. I certify that the above Financial Statements have been prepared in accordance with the requirements of the Companies Act No. 07 of 2007.
Priyath Salgado Finance Director The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board by,
Hemaka Amarasuriya H.A. Pieris Director Director/Group Chief Executive Officer Colombo 28th February 2012
Annual Report 2011 Singer (Sri Lanka) PLC 145 19 Statement of Changes in Equity
Attributable to the Equity Holders of the Company Statutory Reserve Consolidated Stated Reserve Investment Revaluation General Retained Total Non-Controlling Total Capital Fund Fund* Reserve Reserve Earnings Interest Equity Note Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Balance as at 1st January 2010 626,048,050 8,042,189 – 404,084,717 1,600,000,000 375,624,170 3,013,799,126 – 3,013,799,126 Share Issue – – – – – – – 400,000,005 400,000,005 Surplus on Revaluation for the Year 12 – – – 359,796,766 – – 359,796,766 – 359,796,766 Deferred Tax Effect on Revaluation 28.2 – – – (99,339,454) – – (99,339,454) – (99,339,454) Transferred to/(from) during the Year 25.1/26.1 – 2,705,929 – – 400,000,000 (402,705,929) – – – Adjustment in Respect of Change in Group Holding 5.1 – – – – – – – (176,573,748) (176,573,748) Profit for the Year – – – – – 668,011,242 668,011,242 808,122 668,819,364 Interim Dividend - 2010 33 – – – – – (62,604,805) (62,604,805) – (62,604,805) Balance as at 31st December 2010 626,048,050 10,748,118 – 664,542,029 2,000,000,000 578,324,678 3,879,662,875 224,234,379 4,103,897,254 Realisation on Revaluation Surplus 24.1 – – – (12,622,419) – 12,622,419 – – – Deferred Tax effect on Transfer of Revaluation Surplus 28.2 – – – 3,534,277 – – 3,534,277 – 3,534,277 Transferred to/(from) 25.1/25.2/ during the Year 26.1 – 5,602,000 28,057,705 – 200,000,000 (233,659,705) – – – Profit for the Year – – – – – 1,262,654,702 1,262,654,702 44,101,611 1,306,756,313 Final Dividend - 2010 33 – – – – – (219,116,818) (219,116,818) – (219,116,818) Interim Dividend - 2011 33 – – – – – (187,814,415) (187,814,415) (10,666,665) (198,481,080) Balance as at 31st December 2011 626,048,050 16,350,118 28,057,705 655,453,887 2,200,000,000 1,213,010,861 4,738,920,621 257,669,325 4,996,589,946
Stated Revaluation General Retained Total Company Capital Reserve Reserve Earnings Note Rs. Rs. Rs. Rs. Rs.
Balance as at 1st January 2010 626,048,050 404,084,717 1,600,000,000 356,088,037 2,986,220,804 Surplus on Revaluation for the period 12 – 359,796,766 – – 359,796,766 Deferred Tax Effect on revaluation 28.2 – (99,339,454) – – (99,339,454) Transferred to/(from) during the Year 26.1 – – 400,000,000 (400,000,000) – Net Profit for the Year – – – 423,361,814 423,361,814 Interim Dividend - 2010 33 – – – (62,604,805) (62,604,805) Balance as at 31st December 2010 626,048,050 664,542,029 2,000,000,000 316,845,046 3,607,435,125 Realisation on Revaluation Surplus 24.1 – (12,622,419) – 12,622,419 – Deferred Tax effect on Transfer of Revaluation Surplus 28.2 – 3,534,277 – – 3,534,277 Transferred to/(from) during the Year 26.1 – – 200,000,000 (200,000,000) – Final Dividend - 2010 33 – – – (219,116,818) (219,116,818) Interim Dividend - 2011 33 – – – (187,814,415) (187,814,415) Net Profit for the Year – – – 1,162,990,286 1,162,990,286 Balance as at 31st December 2011 626,048,050 655,453,887 2,200,000,000 885,526,518 4,367,028,455
*Investment Fund Investment Fund Account consists of 8% of the profits calculated for the payment of Value Added Tax on Financial Services and 5% of the Profit before Tax calculated for payment of Income Tax purposes during the year.
The Notes on pages 148 through 186 form an integral part of these Financial Statements.
Colombo 28th February 2012
146 Singer (Sri Lanka) PLC Annual Report 2011 20 Cash Flow Statement
Consolidated Company Year ended 31st December 2011 2010 2011 2010 Note Rs. Rs. Rs. Rs.
Cash Flows from Operating Activities Profit before Income Tax Expense 1,986,262,287 1,167,861,512 1,731,925,754 823,099,069 Adjustments for: Depreciation on Property, Plant & Equipment 12 207,120,389 175,809,093 199,295,874 169,657,299 Share of Loss from Equity Accounted Investee 8 638,975 1,016,683 – – Amortisation of Intangible Assets 13 15,933,417 14,151,652 14,352,391 12,968,704 (Gain) on Disposal of Property, Plant & Equipment (9,561,662) (1,365,846) (9,561,662) (1,365,846) (Gain) on Disposal of Other Long-Term Investments – (3,638,919) – (3,638,919) (Gain) on Dilution of Holding in Subsidiary – (176,573,748) – – Interest Expense 839,683,862 819,353,490 559,650,375 587,671,758 Interest Income (38,212,108) (45,128,240) (83,832,844) (51,452,221) Deferred Profit on Hire Debtors 889,099,456 49,203,579 269,865,399 (73,096,533) Provision for Obsolete Inventory 50,096,184 76,047,999 50,096,184 76,047,999 Bad Debts Written-off (227,677,071) (186,160,327) (203,353,653) (168,884,152) Provision for Bad and Doubtful Receivables 137,689,500 132,410,289 119,318,202 108,096,385 Deferred Revenue 31 60,070,464 22,297,250 52,075,328 16,751,490 Dividend Income (18,225) (952,770) (28,804,721) (20,948,270) Provision for Retiring Gratuity 29 36,562,706 33,812,561 34,686,259 31,981,517 Operating Profit before Working Capital Changes 3,947,688,174 2,079,797,867 2,705,712,886 1,510,541,888 (Increase)/Decrease in Inventories (1,331,881,806) (240,170,134) (1,315,010,327) (240,170,134) (Increase)/Decrease in Debtors falling due after One Year (2,123,971,906) (615,490,859) (248,631,054) (23,580,832) (Increase)/Decrease in Debtors falling due within One Year (1,892,716,534) (969,219,679) (1,285,707,393) (402,520,245) (Increase)/Decrease in dues from Related Parties 4,754,053 (23,964,370) 389,893,911 (38,272,506) Increase/(Decrease) in dues to Related Parties (77,207,136) 51,330,986 (77,207,137) (50,465,369) Increase in Employee Security Deposits 83,554,954 44,378,004 83,554,953 44,378,003 Increase in Customer Deposit Liabilities 1,015,014,144 184,363,644 – – Increase in Trade and Other Payables 1,054,553,263 465,252,520 912,939,993 340,162,306 Cash Generated from Operations 679,787,206 976,277,979 1,165,545,832 1,140,073,111 Finance Costs Paid (820,333,953) (834,404,431) (564,687,607) (599,511,969) Retiring Gratuity Paid 29 (13,651,274) (10,482,222) (13,516,274) (10,482,222) Income Tax Paid (671,285,084) (330,220,218) (532,564,583) (262,740,970) Net Cash from Operating Activities (825,483,105) (198,828,892) 54,777,368 267,337,950 Cash Flows from Investing Activities Acquisition of Property, Plant & Equipment and Intangible Assets 12/13 (349,166,590) (110,291,661) (333,346,287) (97,409,426) Proceeds from Disposal of Property, Plant & Equipment 20,064,114 3,532,513 20,064,114 3,532,513 Proceeds from Sale of Other Long-Term Investments – 5,067,392 – 5,067,392 (Acquisition)/Disposal of Marketable Securities 120,239,193 (250,077,877) – – Investment in Equity Accounted Investee (24,000,000) – (24,000,000) – Net Cash Flows from Loans Given to Related Companies 28,583,136 38,297,654 71,904,327 (370,894,770) Interest Received 56,049,226 43,474,632 101,669,962 49,798,613 Dividend Received 18,225 952,770 28,804,721 20,948,270 Net Cash Flows from Investing Activities (148,212,696) (269,044,577) (134,903,163) (388,957,408) Cash Flows from Financing Activities Proceeds from Interest-Bearing Loans and Borrowings 5,908,054,000 4,086,605,327 5,133,054,000 4,086,605,327 Repayment of Interest-Bearing Loans and Borrowings (4,614,744,236) (4,388,652,638) (4,573,224,290) (4,361,396,454) Proceeds from Issuance of Shares – 400,000,005 – – Net payment to Minority Shareholders (10,666,665) – – – Dividends Paid (404,311,371) (62,378,282) (404,311,371) (62,378,282) Net Cash Flows from Financing Activities 878,331,728 35,574,412 155,518,339 (337,169,409) Net Increase/(Decrease) in Cash and Cash Equivalents (95,364,073) (432,299,058) 75,392,544 (458,788,867) Cash and Cash Equivalents at the beginning of the Year 22 (207,197,556) 225,101,502 (257,368,668) 201,420,200 Cash and Cash Equivalents at the end of the Year 22 (302,561,629) (207,197,556) (181,976,124) (257,368,668) The Notes on pages 148 through 186 form an integral part of these Financial Statements.
Annual Report 2011 Singer (Sri Lanka) PLC 147 21 Notes to the Financial Statements
Note 1 Corporate Information page 148 1. Corporate Information 1.1 Reporting Entity Note 2 Significant Accounting Policies page 149 1.1.1 General Note 3 Revenue page 155 Singer (Sri Lanka) PLC is a limited liability company Note 4 Segment Information page 155 incorporated and domiciled in Sri Lanka. The Registered Office Note 5 Other Income page 156 of the Company is located at No. 80, Nawam Mawatha, Colombo 2, and the principal place of business is situated at Note 6 Other Expenses page 157 the above address. Note 7 Net Finance Cost page 157 In the Report of the Directors and in the Financial Statements, Note 8 Share of Profits/(Losses) of Equity ‘the Company’ refers to Singer (Sri Lanka) PLC as the Holding Accounted Investee - (Net of Income Tax) page 157 Company and ‘the Group’ refers to the Consolidated Financial Note 9 Profit before Tax page 157 Statements of Singer (Sri Lanka) PLC and its Subsidiary, Singer Note 10 Income Tax Expense page 158 Finance (Lanka) PLC. Note 11 Earnings per Share page 159 1.1.2 Companies in the Group Note 12 Property, Plant & Equipment page 160 Subsidiary Note 13 Intangible Assets page 164 A subsidiary, Singer Finance (Lanka) PLC, was incorporated on Note 14 Investment in Subsidiary - Company page 166 19th April 2004 under the Companies Act No. 17 of 1982 and its commercial operations commenced on 8th July 2004. Note 15 Investments in Equity Accounted Investees page 166 Note 16 Other Long-Term Investments page 168 Singer Finance (Lanka) PLC issued 25% of its equity holding through Initial Public Offering and allotted shares on 22nd Note 17 Inventories page 168 December 2010. Shares of Singer Finance (Lanka) PLC was Note 18 Loans Due from Related Parties page 169 first traded on 17th January 2011 at the Colombo Stock Note 19 Trade and other Receivables page 169 Exchange. Pursuant to the Special Resolution passed by the shareholders on 21st December 2010, the name of the Note 20 Amounts due from Related Parties page 170 Subsidiary Company was changed from Singer Finance (Lanka) Note 21 Marketable Securities page 171 Ltd. to Singer Finance (Lanka) PLC. The name change was Note 22 Cash and Cash Equivalents page 171 gazetted on 18th February 2011. Note 23 Stated Capital page 171 Associates (Equity Accounted Investees) Note 24 Capital Reserves page 172 Associate Companies of the Group, whose results have been Note 25 Statutory Reserves page 172 included in the Consolidated Financial Statements are: Note 26 Revenue Reserves page 172 Telshan Network (Pvt) Ltd. Note 27 Interest-Bearing Loans & Borrowings page 173 Reality Lanka Ltd. Note 28 Deferred Tax Assets/(Liabilities) page 177 All of the above companies are incorporated in Sri Lanka.
Note 29 Retirement Benefit Obligations page 178 Financial Statements of all the companies in the Group are Note 30 Trade and Other Payables page 179 prepared for a common financial year, which ends on 31st December, except Singer Finance (Lanka) PLC, which ends Note 31 Deferred Revenue page 179 on 31st March. Note 32 Dividend Payable page 179 Note 33 Dividends page 180 1.1.3 Principal Activities and Nature of Operations Company Note 34 Amounts due to Related Parties page 180 During the year, the principal activities of the Company were Note 35 Deposits from Customers page 180 marketing domestic and industrial sewing machines, consumer Note 36 Commitments and Contingencies - electronics, home appliances, furniture, agricultural equipment Group/Company page 180 and personal computers and manufacturing furniture and Note 37 Events Occurring after the Balance Sheet Date page 181 agricultural equipment. Note 38 Related Party Transactions page 182 Subsidiary Note 39 Transactions with Key Management Personnel page 186 Principal activities of Singer Finance (Lanka) PLC. are financing of the sale or purchase of any goods, articles, vehicles or other items either by letting on hire, hire purchase, leasing and other methods of financing. In addition, Singer Finance (Lanka) PLC accepts deposits.
148 Singer (Sri Lanka) PLC Annual Report 2011 1.1.4 Parent Enterprise and Ultimate Parent Enterprise 1.2.5 Changes in Accounting Policies The Company's parent undertaking is Singer (Sri Lanka) BV. Property, Plant & Equipment The Company's ultimate parent undertaking and controlling The Group resolved to measure buildings at fair value with party is Retail Holdings NV, which is incorporated in the effect from 31st December 2010. Accordingly henceforth, Netherlands, Antilles. buildings would be stated at valuation, less accumulated depreciation and accumulated impairment losses. Buildings 1.1.5 Number of Employees were measured at cost in the previous periods. Thereby, The number of employees of the Group at the end of the year buildings were stated at cost, less accumulated depreciation was 1,228 (2010 - 1,147), Company - 1,095 (2010 - 1,049). and accumulated impairment losses in the previous periods.
1.1.6 Date of Authorisation of Issue 1.2.6 Foreign Currency Translation The Financial Statements for the year ended 31st December Transactions in foreign currencies are initially recorded at 2011 were authorised for issue in accordance with a resolution the functional currency rate ruling at the date of the transaction. of the Board of Directors on 28th February 2012. Monetary assets and liabilities denominated in foreign currencies at the reporting date are re-translated at the functional currency 1.2 Basis of Preparation rate of exchange ruling at that date. Non-monetary items that 1.2.1 Statement of Compliance are measured in terms of historical cost in a foreign currency are re-translated using the exchange rates as at the dates of The Financial Statements have been prepared in accordance with the initial transactions. Foreign exchange differences arising on Sri Lanka Accounting Standards (SLAS), issued by The Institute of translation are recognised in profit and loss. Chartered Accountants of Sri Lanka (ICASL) and the requirements of the Companies Act No. 07 of 2007 and Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995. 2. Significant Accounting Policies The accounting policies set out below have been consistently 1.2.2 Basis of Measurement applied by the Group, and are consistent with those used in the The Financial Statements have been prepared on the historical previous year, except as explained in Note 1.2.5, which addresses cost basis, except for certain investments and items of Property, changes in accounting policies. Certain comparative amounts have Plant & Equipment, which are measured at fair value and been reclassified to conform to the current year’s presentation. Defined Benefit Plans which are measured at the present value The Directors have made an assessment of the Group’s ability to of the Retirement Benefit Obligations as explained in the continue as a going concern in the foreseeable future, and they respective Notes to the Financial Statements. do not intend either to liquidate or cease trading. 1.2.3 Functional and Presentation Currency 2.1 Basis of Consolidation The Financial Statements are presented in Sri Lankan 2.1.1 Subsidiaries Rupees which is the functional currency of the Company and its Subsidiary. Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and 1.2.4 Use of Estimates and Judgements operating policies of an entity so as to obtain benefits from its The preparation of Financial Statements in conformity activities. The Financial Statements of Subsidiaries are included with SLAS requires management to make judgements, estimates in the Consolidated Financial Statements from the date that and assumptions that affect the application of accounting control commences until the date that control ceases. policies and the reported amounts of assets, liabilities, income 2.1.2 Associates (Equity Accounted Investees) and expenses. Actual results may differ from these estimates. Associates are those entities in which the Group has significant Estimates and underlying assumptions are reviewed on an influence, but not control, over the financial and operating ongoing basis. Revisions to accounting estimates are recognised policies. Significant influence is presumed to exist when the Group in the period in which the estimate is revised if the revision holds between 20% to 50% of the voting power of another affects only that period or in the period of the revision and future entity. Investments in associates are accounted for using the periods if the revision affects both current and future periods. equity method (equity accounted investees) and are recognised Information about significant areas of estimation uncertainty initially at cost. The Consolidated Financial Statements includes and critical judgements in applying accounting policies that the Group’s share of the income and expenses and equity have the most significant effect on the amounts recognised in movements of equity accounted investees, from the date that the Financial Statements is included in the following Notes: significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its • Note 13 - Measurement of intangible assets interest in an equity accounted investee, the carrying amount • Note 29 - Measurement of retirement benefit obligations • Note 36 - Commitments and Contingencies
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 149 of that interest is reduced to nil and the recognition of further (b) Subsequent Costs losses is discontinued, except to the extent that the Group has an The cost of replacing part of an item of Property, Plant & obligation or has made payments on behalf of the investee. Equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied 2.1.3 Transactions Eliminated on Consolidation within that part will flow to the Group and its cost can be Intra-group balances and transactions, and any unrealised measured reliably. The carrying amount of the replaced part is income and expenses arising from intra-group transactions are derecognised. The costs of the day-to-day servicing of Property, eliminated in preparing the Consolidated Financial Statements. Plant & Equipment are recognised in profit and loss as incurred. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to (c) Depreciation the extent of the Group’s interest in the investee. Unrealised Depreciation is recognised in profit and loss on a straight-line losses are eliminated in the same way as unrealised gains, but basis over the estimated useful lives of each part of an item of only to the extent that there is no evidence of impairment. Property, Plant & Equipment. Freehold land is not depreciated.
The estimated useful lives are as follows: 2.2 Assets and Bases of their Valuation Assets classified as current assets on the Balance Sheet are cash Freehold Buildings Over 37.5 to 50 years and bank balances and those which are expected to be realised Motor Vehicles Over 05 years in cash during the normal operating cycle or within one year Furniture, Fittings and Equipment Over 10 years from the reporting date whichever is shorter. Plant and Machinery Over 10 years 2.2.1 Property, Plant & Equipment EDP Equipment Over 05 years Items of Property, Plant & Equipment are measured at cost Improvement on Leasehold Premises Over 04 to 10 years or valuation, less accumulated depreciation and accumulated Shop Furniture and Equipment Over 05 years impairment losses. Depreciation of an asset commences when the asset is available (a) Cost and Valuation for use and ceases at the earlier of the date the asset is classified Cost includes expenditure directly attributable to the acquisition as held for sale and the date that the asset is derecognised. of the asset. Purchased software that is integral to the Depreciation methods, useful lives and residual values are functionality of the related equipment is capitalised as part of reassessed at the reporting date. that equipment. When parts of an item of Property, Plant & Equipment have different useful lives, they are accounted for as (d) Derecognition separate items of Property, Plant & Equipment. An item of Property, Plant & Equipment is derecognised All items of Property, Plant & Equipment are initially recognised upon disposal of or when no future economic benefits are at cost. A revaluation is carried out when there is a substantial expected from its use or disposal. Gains and losses arising on difference between the fair value and the carrying amount of the derecognition of the asset are determined by comparing the Property, and is undertaken by professionally qualified valuers. proceeds from disposal with the carrying amount of Property, When items of Property, Plant & Equipment are subsequently Plant & Equipment and are recognised net within ‘Other revalued, the entire class of such assets are revalued. Income’ in profit and loss.
Increases in the carrying amount on revaluation are credited 2.2.2 Intangible Assets to the revaluation reserve in shareholders' equity, unless it An intangible asset is recognised if it is probable that future reverses a previous revaluation decrease relating to the same economic benefits will flow to the entity and the cost of the asset, which was previously recognised as an expense. In these asset can be measured reliably in accordance with SLAS 37 circumstances the increase is recognised as income to the extent of the previous write down. on Intangible Assets. Intangible Assets with finite useful lives are measured at cost, less accumulated amortisation and The revaluation surplus is transferred to retained earnings accumulated impairment losses. over the useful period of the respective assets that have been revalued. The useful lives of Intangible Assets are assessed to be either finite or indefinite. Decreases in the carrying amount on revaluation that offset previous increases of the same individual asset is charged Intangible Assets with finite lives are amortised over the useful against revaluation reserve directly in equity. All other decreases economic life and assessed for impairment whenever there is are recognised in profit and loss. an indication that the Intangible Asset may be impaired. The amortisation period and the amortisation method for
150 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements an Intangible Asset with a finite useful life are reviewed at least The allowances for bad and doubtful debts are based on the at each financial year-end. Changes in the expected useful life collectibles of the receivables and a provision is made for these or the expected pattern of consumption of future economic amounts, based on the period of arrears as follows: benefits embodied in the asset are accounted for by changing Hire Purchase Receivables the amortisation period or method, as appropriate, and treated Arrears of 3 and 4 months as changes in accounting estimates. Amortisation expense on 50% of debtors, net of unearned carrying charges. Intangible Assets with finite lives is recognised in profit and loss on a straight-line basis over the estimated useful lives, from the Arrears of 5 months and over date they are available for use. 100% of debtors, net of unearned carrying charges.
The estimated useful lives of Intangible Assets with finite lives Singer Finance (Lanka) PLC are as follows: Hire purchase receivables/lease receivables for motor vehicles. The Class of Intangible Assets Useful Life Arrears of 4 months and over Computer Software 10 years 50% of debtors, net of unearned carrying charges. Other Intangible Assets Externally Acquired 5 years Arrears of 6 months and over 100% of debtors, net of unearned carrying charges. Intangible Assets with indefinite useful lives are tested for impairment annually either individually or at the cash- Trade Receivables generating unit level. Such intangibles are not amortised. Arrears within 150-180 days 20% Gains or losses arising from derecognition of an Intangible Arrears within 181-210 days 40% Asset are measured as the difference between the net disposal Arrears within 211-240 days 60% proceeds and the carrying amount of the asset and are Arrears of 241 days and over 100% recognised in profit and loss when the asset is derecognised.
Intangible Assets with indefinite useful lives represent Trade 2.2.4 Investments Marks purchased through the effect of a business combination 2.2.4.1 Non-Current Investments and were recorded initially at cost. Following the initial Non-current investments are measured initially at cost. Provision recognition of Trade Marks at cost, the carrying amount was for diminution in value of investments is made when in the recognised after accumulated amortisation annually up to opinion of the Directors there has been a decline, other than 31st December 2005. However, due to the effect of SLAS 41 - temporary in the carrying amount of the investment. Impairment of Assets, the said Trade Marks were deemed indefinite lived Intangible Assets and accordingly, the carrying 2.2.4.2 Current Investments Marketable Securities amount of the Trade Marks is determined after testing for Current investments are stated at lower of cost and market impairment annually. This change is applied prospectively. value determined on an aggregate portfolio basis.
2.2.3 Trade and Other Receivables An impairment loss will be recognised when the subsequent Trade receivables are stated at the amounts they are estimated to write down of the asset to fair value less, cost to sell is lower realise net of provisions for bad and doubtful debts. than the value previously recognised. A gain will be recognised Other receivables and dues from related parties are recognised for any subsequent increase in fair value, less cost to sell off an at cost, less provision for bad and doubtful receivables. asset, not exceeding the cumulative impairment loss that has been recognised. Assets sold to customers under fixed rate hire agreements which transfer all the risks and rewards as well as the legal title at the 2.2.5 Inventories end of such contractual period are classified as hire purchase Inventories are measured at the lower of cost and net realisable receivables. Hire purchase receivable in the Balance Sheet value, after making due allowances for obsolete and slow moving represents the total hire value net of unearned finance income items. Net realisable value is the estimated selling price in the charges and provision for doubtful recoveries. ordinary course of business, less the estimated cost of completion Assets leased to customers under agreements, which transfer and selling expenses. substantially all the risks and rewards associated with ownership other than legal title, are classified as finance leases. Lease rentals receivable in the Balance Sheet represent total minimum lease payments due, net of unearned income and provision for doubtful recoveries.
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 151 The cost of each category of inventory is determined on the year from the reporting date. Non-current liabilities are those following basis: balances that fall due for payment later than one year from the reporting date. Raw Materials - At actual cost on first-in first-out basis. Finished Goods All known liabilities have been accounted for in preparing the (excluding factory) - Weighted average cost. Financial Statements. Finished Goods and At the cost of direct materials, direct Work-in-Progress at labour and an appropriate proportion 2.3.1 Provisions Piliyandala Factory of fixed production overheads, based A provision is recognised if, as a result of a past event, the - on normal operating capacity. Group has a present legal or constructive obligation that can Goods-in-Transit - At actual cost. be measured reliably, and it is probable that an outflow of Supplies and Parts Purchase cost, less issues for the period economic benefits will be required to settle the obligation. valued at a standard percentage of - selling price (requires revision). 2.3.1.1 Provisions for Warranties Repossessed Goods - Half of its weighted average cost. A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical Provisions for Inventory warranty data and a weighing of all possible outcomes against Specific provisions are made giving consideration to the their associated probabilities. condition of inventory held by the Company. Trade and Other Payables 2.2.6 Cash and Cash Equivalents Trade and other payables are stated at their cost. Cash and cash equivalents comprise cash in hand, demand deposits and short-term highly liquid investments, readily Capital Commitments and Contingencies convertible to known amounts of cash and subject to Capital commitments and contingent liabilities of the Group are insignificant risk of changes in value. disclosed in the respective Notes to the Financial Statements. For the purpose of cash flow statement, cash and cash 2.3.2 Employee Benefits equivalents consist of cash in hand and deposits in banks, net of 2.3.2.1 Defined Benefit Plan outstanding bank overdrafts. A defined benefit plan is post-employement benefit plan other 2.2.7 Impairment of Assets than a defined contribution plan. The liability recognised in The carrying amount of the Company’s non-financial assets the Financial Statements in respect of defined benefit plans is other than inventories and deferred tax assets is reviewed at the present value of the defined benefit obligation as at the each reporting date to determine whether there is an indication reporting date. The defined benefit obligation is calculated by of impairment. If any such indication exists, or when annual a Qualified Actuary as at the reporting date using the Projected impairment testing for an asset is required, then the asset's Unit Credit (PUC) method as recommended by SLAS 16. recoverable amount is estimated. The actuarial valuation involves making assumptions about The recoverable amount of an asset or cash-generating unit discount rates, salary increment rate, mortality rate and is the greater of its value in use and its fair value, less costs to retirement age. Due to the long-term nature of his plans such sell. In assessing value in use, the estimated future cash flows estimates are subject to significant uncertainty. are discounted to their present value using a pre-tax discount The liability is not externally funded. rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair 2.3.2.2 Defined Contribution Plans - Employees' value, less costs to sell, an appropriate valuation model is used. Provident Fund /Mercantile Services Provident Society and Employees' Trust Fund An impairment loss is recognised if the carrying amount of an A defined contribution plan is a post-employement benefit plan asset or cash-generating unit exceeds its estimated recoverable under which an entity pays fixed contributions into a separate amount. Impairment losses are recognised in profit and loss. entity and will have no legal or constructive obligation to pay An impairment loss is reversed if there has been a change further amounts. Employees are eligible for contributions to in the estimates used to determine the recoverable amount. Employees' Provident Fund/Mercantile Services Provident Society An impairment loss is reversed only to the extent that the and Employees' Trust Fund in line with the respective Statutes asset's carrying amount does not exceed the carrying amount and Regulations. The Company contributes 12%, 12% and 3% that would have been determined, net of depreciation or of gross emoluments of employees to the Employees' Provident amortisation, if no impairment loss had been recognised. Fund, Mercantile Services Provident Society and the Employees' 2.3 Liabilities and Provisions Trust Fund, respectively and is recognised as an expense in Liabilities classified as current liabilities in the Balance Sheet are profit and loss in the periods during which services are rendered those which fall due for payment on demand or within one by employees.
152 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 2.3.2.3 Short-Term Benefits (e) Service Fee Income on Hire Purchase Short-term employee benefit obligations are measured on an Service fee income is recognised over the length of hire purchase undiscounted basis and are expensed as the related service is agreement on sum of digit method. In the event of early provided. A liability is recognised for the amount expected to termination of the Hire Purchase Contract or cash conversion be paid under short-term cash bonus if the Group has a present remaining deferred, service income is recognised when such legal or constructive obligation to pay this amount as a result of contract is recognised or converted. past services provided by the employee and the obligation can (f) Income on Suraksha and Extended Warranty Scheme be measured reliably. Income is recognised over the period of contract. Unrecognised income is accounted for as Deferred Revenue. 2.3.3 Discontinued Operations A discontinued operation is a component of the Group’s (g) Others business that represents a separate major line of business or Other income is recognised on an accrual basis. geographical area of operations that has been disposed of or is Net gains and losses of a revenue nature on the disposal of held for sale, or is a subsidiary acquired with a view to resale. Property, Plant & Equipment and other non-current assets Classification as discontinued operation occurs upon disposal or including investments have been accounted for in profit and when the operation meets the criteria to be classified as held for loss, having deducted from proceeds on disposal, the carrying sale, if earlier. When an operation is classified as a discontinued amount of the assets and related selling expenses. operation, the comparative Income Statement is restated as if the operation had been discontinued from the start of the 2.4.2 Revenue Recognition Policy of Singer Finance (Lanka) PLC comparative period. (a) Hire Purchase 2.4 Income Statement The excess of aggregated contract receivables over the cost 2.4.1 Revenue Recognition of the hired assets constitutes the total unearned income at the commencement of a contract. The unearned income Revenue is recognised to the extent that it is probable that is recognised as income over the term of the hire purchase the economic benefits will flow to the Company and the contract commencing from the month in which the first rental revenue and associated costs incurred or to be incurred can is due, in proportion to the declining receivable balance, so as be reliably measured. Revenue is measured at the fair value to produce a constant periodic rate of return on the hirer’s net of the consideration received or receivable, net of returns and investment outstanding on the hire purchase. allowances, trade discounts and turnover taxes. The following specific criteria are used for the purpose of recognition (b) Lease of revenue: The excess of aggregated contract receivables over the cost (a) Sale of Goods (Normal Trading Transactions) of the leased assets constitutes the total unearned income Revenue from the sale of goods is recognised when the at the commencement of a contract. The unearned income significant risks and rewards of ownership of the goods is recognised as income over the term of lease contract have passed to buyers, the recovery of the consideration is commencing from the month in which the first rental is due, in probable, the associated costs and possible return of goods proportion to the declining receivable balance, so as to produce can be estimated reliably, there is no continuing management a constant periodic rate of return on the lessor’s net investment involvement with the goods and the amount of revenue can be outstanding on the lease outstanding. measured reliably. (c) Interest on Government Securities (b) Sale of Goods (Hire Purchase Transactions) Interest is accrued in profit and loss, based on a receivable At the time of effecting hire sales, the cash sales value is pattern reflecting a constant periodic rate of return. recognised as sales.
The unearned income is recognised as income over the term of (d) Commissions, Service Charges and Others hire purchase contract commencing from the month in which Commissions, service charges and others are recognised on an first rental is due, in proportion to the declining receivable accrual basis. balance, so as to produce a constant periodic rate of return on the hirer’s net investment outstanding on the hire purchase. 2.4.3 Expenditure Recognition (c) Interest - Other (a) Expenses are recognised in profit and loss on the basis of Interest income is recognised in profit and loss as it accrues a direct association between the cost incurred and the earning (taking into account the effective yield on the asset). of specific items of income. All expenditure incurred in the running of the business and in maintaining the Property, Plant & (d) Dividends Equipment in a state of efficiency has been charged to income Dividend income is recognised in profit and loss when the right in arriving at the profit for the year. to receive dividends is established.
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 153 (b) For the purpose of presentation of the Income Statement, 2.4.5 Borrowing Costs the Directors are of the opinion that ‘function of expenses Borrowing costs are recognised as an expense in the period in method’ presents fairly the elements of the Company's which they are incurred. performance and hence such presentation method is adopted. 2.4.6 Events Occurring after the Balance Sheet Date Net Finance Cost All material events occurring after the Balance Sheet date have Finance income comprises interest income on funds invested, been considered and where necessary adjustments made in and gains on translation of foreign currency. these Financial Statements. Finance cost comprises interest payable on borrowings and losses on translation of foreign currency. 2.4.7 Earnings Per Share The Group presents basic Earnings Per Share (EPS) for its 2.4.4 Taxation ordinary shares. Basic EPS is calculated by dividing the profit Income tax expense comprises both current and deferred tax. or loss attributable to ordinary shareholders of the Company Income tax expense is recognised in profit and loss, except to by the weighted number of ordinary shares outstanding during the extent that it relates to items recognised directly in equity, in the period. which case it is recognised in equity. 2.4.8 Segment Reporting (a) Current Taxes A segment is a distinguishable component of the Group that The current tax is the expected tax payable on the taxable is engaged in either providing related products or services income for the year, using tax rates enacted or substantially (Business Segments) or in providing products or services within enacted at the reporting date, and any adjustment to tax a particular economic environment (Geographical Segment) payable in respect of previous years. which is subject to risk and returns that are different from those of other segments. Segmental information is presented (b) Deferred Taxation in respect of the Group’s Business or Geographical Segments. Deferred tax is recognised in respect of temporary differences The Group's primary format for segment reporting is based on between the carrying amount of assets and liabilities for business segments and is based on the Group's management financial reporting purposes and the amounts used for and internal reporting structure. taxation purposes. Segment results assets and liabilities include items directly Deferred tax liabilities are recognised for all taxable temporary attributable to a segment as well as those that can be allocated differences, except for - on a reasonable basis. • temporary differences arising on the initial recognition of Segment Capital expenditure is the total cost incurred during assets or liabilities in a transaction that is not a business the period to acquire Property, Plant & Equipment and combination and that affects neither the accounting profit Intangible Assets other than goodwill. nor taxable profit or loss; • temporary differences related to investments in Subsidiaries Segment information is presented in the respective Notes to the to the extent that it is probable that the temporary Financial Statements. differences will not reverse in the foreseeable future; and 2.4.9 Cash Flow Statement • taxable temporary differences arising on the initial The cash flow statement has been prepared using the recognition of goodwill. indirect method. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on 2.4.10 New Accounting Standards Issued but not tax laws that have been enacted or substantively enacted by the Effective at the Reporting Date reporting date. The Institute of Chartered Accountants of Sri Lanka issued a new A deferred tax asset is recognised for unused tax losses and volume of Sri Lanka Accounting Standards which will become deductible temporary differences, to the extent that it is applicable for annual periods beginning on or after 1st January probable that future taxable profits will be available against 2012. Accordingly, these Standards have not been applied in which they can be utilised. The carrying amount of deferred tax preparing these Financial Statements as they were not effective assets is reviewed at each reporting date and is reduced to the for the year ended 31st December 2011. extent that it is no longer probable that the related tax benefit The Company is currently in the process of evaluating the will be realised. potential effect of these Standards on its Financial Statements Tax withheld on dividend income from subsidiaries and and the impact on the adoption of these Standards has not associates is recognised as an expense in the Consolidated been quantified as at the reporting date. Income Statement at the same time as the liability to pay the related dividend is recognised.
154 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 3. Revenue Consolidated Company
Year ended 31st December 2011 2010 2011 2010 Rs. Rs. Rs. Rs.
3.1 Summary Gross Turnover 22,010,767,109 16,136,677,105 20,931,312,025 15,285,628,173 Less: Sales Taxes: Turnover Tax – (108,143,303) – (108,143,303) 22,010,767,109 16,028,533,802 20,931,312,025 15,177,484,870
3.2 Revenue Sale of Goods 19,338,972,033 14,028,853,847 19,338,972,033 14,028,853,847 Rendering of Services 2,671,795,076 1,999,679,955 1,592,339,992 1,148,631,023 22,010,767,109 16,028,533,802 20,931,312,025 15,177,484,870
4. Segment Information 4.1 Segment Products and Services
Sewing-Related Products Domestic and Industrial Sewing Machines and General Merchandise. Consumer Electronics Televisions, Audios, VCD, DVD and Other Electronic Products. White Goods Refrigerators, Washing Machines, Deep Freezers, Bottle Coolers, Air-Conditioners and Fans. Kitchen-Related Products Table Tops, Gas Ovens, Rice Cookers, Microwave Ovens, Electric Ovens, Grinders and Blenders. Communications Computers, Laptops, CDMA and Celluar Phones and Dialog Satellite Dishes. Furniture Wood and Layered Furniture, Sofa Sets and Steel Furniture. Transportation Motor Bikes and Bicycles. Agro Water Pumps, Paddy Threshers, Tractors Singer Finance (Lanka) PLC Leasing, Hire Purchase and Loans
4.2 Segmental Analysis of Revenue is as Follows: Consolidated Company
2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Sewing-Related Products 2,403,858 1,932,881 2,403,858 1,932,881 Consumer Electronics 6,068,647 3,601,210 6,068,647 3,601,210
White Goods 7,399,427 5,386,396 7,399,427 5,386,396 Kitchen-Related Products 1,481,274 1,049,177 1,481,274 1,049,177 Communications 1,333,349 974,595 1,333,349 974,595 Furniture 1,041,997 814,385 1,041,997 814,385 Transportation 448,145 764,342 448,145 764,342
Agro 754,615 654,499 754,615 654,499 Singer Finance (Lanka) PLC 1,079,455 851,049 – – 22,010,767 16,028,534 20,931,312 15,177,485
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 155 4.3 Segmental Analysis of Profit before Tax is as Follows: Consolidated Company
2011 2010 2011 2010 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Sewing-Related Products 188,133 92,801 188,133 92,801 Consumer Electronics 591,230 246,501 591,230 246,501 White Goods 575,451 261,601 575,451 261,601 Kitchen-Related Products 149,642 68,552 149,642 68,552 Communications 70,320 42,011 70,320 42,011 Furniture 71,074 40,192 71,074 40,192 Transportation 11,344 18,826 11,344 18,826 Agro 45,927 30,028 45,927 30,028 Singer Finance (Lanka) PLC 283,762 187,201 – – Segment Result 1,986,883 987,713 1,703,121 800,512 Gain on Disposal of Other Investment (Note 16.3) – 3,639 – 3,639 Dividend from Associates/Subsidiary 18 953 28,805 18,948
Gain on Dilution of Shares in Singer Finance (Lanka) PLC (Note 5.1) – 176,574 – – Share of Loss on Equity Accounted Investees (639) (1,017) – – 1,986,262 1,167,862 1,731,926 823,099
4.4 There are no separately distinguishable assets and liabilities for the above segments.
5. Other Income Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Dividend Income - Quoted 18,225 120,270 28,804,721 18,115,770 - Unquoted – 832,500 – 832,500 Gain on Disposal of Property, Plant & Equipment 9,561,662 1,365,846 9,561,662 1,365,846 Overdue Charges 41,549,697 31,381,760 – – Miscellaneous Income 38,360,755 11,175,760 17,716,163 14,982,221 Service Fee Income - Singer Finance (Lanka) PLC – – 65,942,700 73,813,555 Income from Financial Services 45,219,623 42,378,267 45,219,623 42,378,267 Gain on Dilution of Holding in Singer Finance (Lanka) PLC (Note 5.1) – 176,573,748 – – Gain on Disposal of Other Investments (Note 16.3) – 3,638,919 – 3,638,919 134,709,962 267,467,070 167,244,869 155,127,078
5.1 Subsidiary Company Singer Finance (Lanka) PLC issued 26,666,667 ordinary shares at Rs. 15/- per share increasing stated capital by Rs. 400 million. IPO shares were allotted on 22nd December 2010. Due to this allotment of shares, Group holding percentage on Singer Finance (Lanka) PLC decreased to 75% from 100% with effect from 22nd December 2010. Gain on Dilution resulting from decrease in Group holding percentage from 100% to 75% in Singer Finance (Lanka) PLC was accounted in the Consolidated Financial Statements. The Gain on Dilution of Holding in Singer Finance (Lanka) PLC is calculated as below:
Rs.
Stated Capital of Singer Finance (Lanka) PLC 800,000,005 Investment of Singer (Sri Lanka) PLC 400,000,000 Net Asset Value of Singer Finance (Lanka) PLC on the date of allotment, 22nd December 2010 226,426,257 Gain on Dilution 176,573,748
156 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 6. Other Expenses Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Depreciation on Property, Plant & Equipment (Notes 12.9 & 12.18) 180,032,120 160,319,856 172,207,605 154,168,063 Amortisation of Intangible Assets with Finite Useful Lives (Note 13.8) 15,933,417 14,151,652 14,352,391 12,968,704 195,965,537 174,471,508 186,559,996 167,136,767
7. Net Finance Cost 7.1 Finance Cost Interest on Overdrafts and Loans 529,434,258 545,848,228 507,795,702 542,161,113 Interest on Security Deposits 54,446,848 39,319,918 50,596,591 34,202,876 Interest on Customer Deposits 254,544,674 222,877,576 – – Interest on Related Party Payables 1,258,082 11,307,769 1,258,082 11,307,769 839,683,862 819,353,491 559,650,375 587,671,758
7.2 Finance Income Interest Income - Related Parties 17,595,396 36,122,289 83,442,814 88,847,850 - Others 20,604,847 7,352,343 378,165 (39,049,237) Gain on Translation of Foreign Currency 11,865 1,653,608 11,865 1,653,608 38,212,108 45,128,240 83,832,844 51,452,221 Net Finance Cost 801,471,754 774,225,251 475,817,531 536,219,537
8. Share of Profit/(Loss) of Equity Accounted Investee - (Net of Income Tax) Consolidated
2011 2010 Rs. Rs. Rs. Rs. Share of Profit/(Loss) Share of Tax Net Profit/(Loss) Net Profit/(Loss)
Reality Lanka Ltd. (824,975) 186,000 (638,975) (1,016,683) (824,975) 186,000 (638,975) (1,016,683)
9. Profit before Tax Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Stated after Charging all Expenses including the Following: Executive Directors’ Emoluments 63,539,518 27,388,160 54,871,469 22,270,866 Non-Executive Directors’ Fees 7,704,299 5,310,000 6,579,299 4,185,000 Auditors' Remuneration - Statutory Audit 1,850,000 1,550,000 1,300,000 1,080,000 - Audit-Related Services 925,000 773,500 765,000 468,500 - Non-Audit Services – 1,300,000 – 1,300,000 Provision for Bad and Doubtful Receivables 137,689,500 132,410,289 119,318,202 108,096,385 Provision for Obsolete Inventory 50,096,184 76,047,999 50,096,184 76,047,999 Personnel Costs (Note 9.1) 2,534,018,054 1,853,225,295 2,424,414,608 1,782,072,888 Operating Lease Rentals 415,896,718 311,930,856 400,038,242 303,681,713 Donations 284,000 355,126 284,000 355,126
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 157 9.1 Personnel Costs Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Staff Cost 2,298,678,924 1,668,937,935 2,198,216,933 1,604,772,284 Voluntary Retirement Scheme 2,170,919 6,853,947 2,170,919 6,853,947 Defined Benefit Plan Costs - Retiring Gratuity 36,562,706 33,812,560 34,686,259 31,981,517 Defined Contribution Plan Costs - EPF, ETF and MSPS 196,605,505 143,620,853 189,340,497 138,465,140 2,534,018,054 1,853,225,295 2,424,414,608 1,782,072,888
10. Income Tax Expense Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Current Income Tax Expense Current Tax Expense on Ordinary Activities for the Year - Singer (Sri Lanka) PLC (Note 10.1) 708,443,910 443,567,628 578,971,099 365,307,497 (Over)/Under Provision in Respect of Previous Year 1,085,665 35,396,548 1,112,963 5,729,691 Tax on Dividend Income WHT on Dividend Received from Singer Finance (Lanka) PLC 3,200,000 2,000,000 – – 712,729,575 480,964,176 580,084,062 371,037,188
Deferred Tax Expense/(Income) (Note 10.2) (33,223,601) 18,077,973 (11,148,594) 28,700,067 679,505,974 499,042,149 568,935,468 399,737,255
10.1 Reconciliation Between Current Tax Expense and the Product of Accounting Profit Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Profit before Tax including Intra-Group Adjustment 2,015,062,282 1,364,435,260 1,731,925,754 823,099,069 Intra-Group Adjustment (28,799,996) (196,573,748) – – Profit before Tax 1,986,262,286 1,167,861,512 1,731,925,754 823,099,069 Share of Loss of Associates 638,975 1,016,683 – – Aggregate Accounting Profit 1,986,901,261 1,168,878,195 1,731,925,754 823,099,069 Aggregate Disallowable Expenses 1,299,729,658 586,503,028 583,891,356 541,205,741 Aggregate Tax Deductible Expenses (897,278,913) (305,608,813) (365,990,268) (313,406,581) Income Not Liable for Tax (28,818,221) (201,165,437) (28,804,721) (22,587,189) 2,360,533,785 1,248,606,973 1,921,022,121 1,028,311,040 Taxable Profit 2,360,533,785 1,248,606,973 1,921,022,121 1,028,311,040 Taxable Profit tax @ 35% - (01.01.2011 - 31.03.2011) 545,978,803 1,248,606,973 545,978,803 1,028,311,040 Taxable Profit tax @ 33 1/3% - (01.01.2011 - 31.03.2011) 109,877,916 – – – Taxable Profit tax @ 28% - (01.04.2011 - 31.12.2011) 1,704,677,066 – 1,375,043,318 – 2,360,533,785 1,248,606,973 1,921,022,121 1,028,311,040 Income Tax at 35% 191,092,581 437,012,441 191,092,581 359,908,864 Income Tax at 33 1/3% 36,625,972 – – – Income Tax at 28% 477,309,579 – 385,012,129 – Social Responsibility Levy 3,415,778 6,555,187 2,866,389 5,398,633 Current Income Tax Expense 708,443,910 443,567,628 578,971,099 365,307,497
158 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements The Group tax expense is based on the taxable profit of each Company in the Group. Singer (Sri Lanka) PLC is liable to Income Tax at 28% on taxable profit with effect from 1st April 2011 and an additional 1.5% Social Responsibility Levy on Tax was abolished with effect from 1st April 2011.
10.2 Deferred Tax Expense/(Income) Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Deferred Tax Charge/(Credit) arising due to Origination and Reversal of Temporary Differences (Note 28.1/28.2) (33,223,601) (10,532,694) (11,148,594) 89,400
Adjustment due to Change in Tax Rate (Note 28.1) – 28,610,667 – 28,610,667 (33,223,601) 18,077,973 (11,148,594) 28,700,067
10.3 Deferred Tax has been computed using the enacted tax rate of 28%.
11. Earnings Per Share 11.1 Basic earnings per share is calculated by dividing the profit for the year attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Number of ordinary shares for the year 2010 has been adjusted to reflect the increase in number of shares consequent to the subdivision on 31st March 2011. Accordingly, earnings per share has been adjusted retrospectively as per SLAS 34 - Earnings Per Share - (Revised 2005).
11.2 The following reflects the income and share data used in the basic earnings per share computations: Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Amounts used as the Numerator Profit for the Year 1,306,756,313 668,819,364 1,162,990,287 423,361,814 Profit Attributable to Ordinary Shareholders for Basic Earnings per Share 1,262,654,702 668,011,242 1,162,990,287 423,361,814
Number of Ordinary Shares Used as Denominator Weighted Average Number of Ordinary Shares in Issue Applicable to Basic Earnings per Share 125,209,610 125,209,610 125,209,610 125,209,610 Basic Earnings per Share (Rs.) 10.08 5.34 9.29 3.38
11.3 The following reflects the income and share data used in the earnings per share excluding the gain on dilution of equity holding in Singer Finance (Lanka) PLC.
Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Amounts used as the Numerator Profit for the Year Excluding the Gain on Dilution of Equity Holding in Singer Finance (Lanka) PLC 1,306,756,313 492,245,616 1,162,990,287 423,361,814 Profit Attributable to Ordinary Shareholders for Earnings per Share Excluding the Gain on Dilution of Equity Holding in Singer Finance (Lanka) PLC 1,262,654,702 491,437,494 1,162,990,287 423,361,814
Number of Ordinary Shares Used as Denominators Weighted Average Number of Ordinary Shares in Issue Applicable to Basic Earnings per Share 125,209,610 125,209,610 125,209,610 125,209,610 Earnings per Share Excluding the Gain on Dilution of Shares of Singer Finance (Lanka) PLC (Rs.) 10.08 3.92 9.29 3.38
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 159 12. Property, Plant & Equipment 12.1 Gross Carrying Amounts - Consolidated
Balance Additions/ Disposals/ Balance as at Transfers Transfers as at 01.01.2011 31.12.2011 Rs. Rs. Rs. Rs. At Cost Motor Vehicles 182,745,633 110,139,619 33,081,294 259,803,958 Furniture & Equipment 179,927,626 58,049,477 48,048,353 189,928,750 Plant & Machinery 169,154,722 10,590,462 1,925,850 177,819,334 Culinary School Equipment 75,814 – – 75,814 E.D.P. Equipment 267,040,150 46,294,252 – 313,334,402 Shop Furniture 98,492,050 35,189,357 18,624,013 115,057,394 Shop Equipment 196,774,560 27,559,095 36,299,373 188,034,282 Improvements on Leasehold Premises 402,438,438 56,163,945 144,908,358 313,694,025 1,496,648,993 343,986,207 282,887,241 1,557,747,959
At Valuation Freehold Land 512,436,500 – – 512,436,500 Freehold Building 547,859,318 503,300 38,254 548,400,872 1,060,295,818 503,300 38,254 1,060,837,372 Total Gross Carrying Amount 2,556,944,811 344,489,507 282,848,987 2,618,585,331
12.2 Depreciation and Impairment Losses
Balance Charge for Disposals/ Balance as at the Year/ Transfers as at 01.01.2011 Transfers 31.12.2011 Rs. Rs. Rs. Rs.
Freehold Building – 18,116,948 38,254 18,155,202 Motor Vehicles 98,993,996 23,183,272 22,578,941 99,598,327 Furniture & Equipment 112,040,069 16,905,626 48,048,353 80,897,342 Plant & Machinery 99,149,920 16,212,262 1,925,850 113,436,332 Culinary School Equipment 75,814 – – 75,814 E.D.P. Equipment 202,511,114 27,737,408 – 230,248,522 Shop Furniture 65,524,412 13,890,499 18,624,013 60,790,898 Shop Equipment 137,258,089 24,899,473 36,299,373 125,858,189 Improvements on Leasehold Premises 277,151,458 66,174,901 144,908,259 198,418,100 Total Depreciation and Impairment Loss 992,704,872 207,120,389 272,346,535 927,478,726
12.3 Carrying Amounts Group 2011 2010 Rs. Rs.
At Cost 630,269,233 503,944,121 At Valuation 1,060,837,372 1,060,295,818 Total Carrying Amount of Property, Plant & Equipment 1,691,106,605 1,564,239,939
12.4 During the financial year, the Group acquired property, plant & equipment to the aggregate value of Rs. 344,489,507/- (2010 - Rs. 96,691,246/-) on cash basis.
12.5 Property, plant & equipment includes fully-depreciated assets having a gross carrying amount of Rs. 223,093,320/- (2010 - Rs. 458,201,081/-).
160 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 12.6 Lands & buildings were revalued during the financial year 2010 by Messrs Chulananda Wellappili, an Independent Valuer. The results of such revaluation were incorporated in these Financial Statements from its effective date which is 31st December 2010. Such assets were valued on an open market value for existing use basis. The surplus arising from the revaluation was transferred to a revaluation reserve.
12.7 Cost of the revalued land as at 31st December 2011 is Rs. 103,338,782/- (2010 - Rs. 103,338,782/-).
12.8 Cost of the revalued buildings as at 31st December 2011 is at Rs. 255,159,491/- (2010 - Rs. 273,314,693/-).
12.9 Depreciation charge for the year is included in the following line items in the Income Statement.
2011 2010 Rs. Rs.
Cost of Sales 27,088,269 15,489,237 Other Expenses Excluding Amortisation of Software and Externally Acquired Intangible Assets 180,032,120 160,319,856 207,120,389 175,809,093
12.10 Gross Carrying Amounts - Company
Balance Additions/ Disposals/ Balance as at Transfers/ Transfers as at 01.01.2011 31.12.2011 Rs. Rs. Rs. Rs. At Cost Freehold Building – – – – Motor Vehicles 178,944,606 110,139,619 33,081,294 256,002,931 Furniture & Equipment 167,971,448 54,970,927 48,048,353 174,894,022 Plant & Machinery 169,154,722 10,590,462 1,925,850 177,819,334 Culinary School Equipment 75,814 – – 75,814 E.D.P. Equipment 256,841,611 43,787,434 – 300,629,045 Shop Furniture 98,492,050 35,189,357 18,624,013 115,057,394 Shop Equipment 196,774,560 27,559,095 36,299,373 188,034,282 Improvements on Leasehold Premises 377,944,625 50,606,094 144,908,358 283,642,361 1,446,199,436 332,842,988 282,887,241 1,496,155,183
At Valuation Freehold Land 512,436,500 – – 512,436,500 Freehold Building 547,859,318 503,300 38,254 548,400,872 1,060,295,818 503,300 38,254 1,060,837,372 Total Gross Carrying Amount 2,506,495,254 333,346,288 282,848,987 2,556,992,555
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 161 12.11 Depreciation and Impairment Losses
Balance Charge for Disposals/ Balance as at the Year/ Transfers as at 01.01.2011 Transfers 31.12.2011 Rs. Rs. Rs. Rs.
Freehold Building – 18,116,948 38,254 18,155,202 Motor Vehicles 98,213,551 22,823,067 22,578,941 98,457,677 Furniture & Equipment 108,172,541 15,623,199 48,048,353 75,747,387 Plant & Machinery 99,149,919 16,212,262 1,925,850 113,436,331 Culinary School Equipment 75,814 – – 75,814 E.D.P. Equipment 196,393,572 26,074,357 – 222,467,929 Shop Furniture 65,524,412 13,890,499 18,624,013 60,790,898 Shop Equipment 137,258,090 24,899,473 36,299,373 125,858,190 Total Depreciation and Impairment Losses 970,442,175 199,295,874 272,346,535 897,391,514
12.12 Carrying Amounts
2011 2010 Rs. Rs.
At Cost 598,763,669 475,757,259 At Valuation 1,060,837,372 1,060,295,818 Total Carrying Amount of Property, Plant & Equipment 1,659,601,041 1,536,053,077
12.13 During the financial year, the Company acquired Property, plant & equipment to the aggregate value of Rs. 333,346,288/- (2010 - Rs. 86,440,992/-) on cash basis.
12.14 Property, plant & equipment include fully-depreciated assets having a gross carrying amount of Rs. 216,764,418/- (2010 - Rs. 446,831,598/-).
12.15 Lands and Buildings were revalued during the financial year 2010 by Messrs Chulananda Wellappili, an Independent Valuer. The results of such revaluation were incorporated in these Financial Statements from its effective date which is 31st December 2010. Such assets were valued on an open market value for existing use basis. The surplus arising from the revaluation was transferred to a revaluation reserve.
12.16 Cost of revalued land as at 31st December 2011 is Rs. 103,338,782/- (2010 - Rs. 103,338,782/-).
12.17 Carrying amount of the revalued buildings as at 31st December 2011 is Rs. 255,159,491/- (2010 - Rs. 273,314,693/-).
12.18 Depreciation charge for the year is included in the following line items in the Income Statement.
2011 2010 Rs. Rs.
Cost of Sales 27,088,269 15,489,236 Other Expenses Excluding Amortisation of Software and Externally Acquired Intangible Assets 172,207,605 154,168,063 199,295,874 169,657,299
162 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 12.19 Information on the Freehold Land & Building of the Company
Net Book Cost or Cost or Value as a Revaluation of Revaluation of Accumulated % of Extent Buildings Land Buildings Total Value Depreciation Net Book Value Revalued Location (Perches) (Square Feet) Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Amount Ambalantota No. 46, Main Street, Ambalantota 6.6 1,885 5,610,000 4,147,000 9,757,000 666,198 9,090,802 93 Balangoda No. 60, Ratnapura Road, Balangoda 6.2 2,080 9,300,000 5,616,000 14,916,000 1,409,521 13,506,479 91 Bandarawela No. 120, Main Street, Bandarawela 3.69 1,535 4,428,000 4,840,250 9,268,250 955,709 8,312,541 90 Borella No. 33, D.S. Senanayaka Mawatha, Borella 4.64 1,700 23,200,000 5,661,000 28,861,000 3,447,589 25,413,411 88 Chilaw No. 04, Bazaar Street, Chilaw 13.05 4,120 15,660,000 11,865,600 27,525,600 2,537,074 24,988,526 91 Colpetty No. 143, Galle Road, Colombo 03 3.35 1,560 15,075,000 5,040,000 20,115,000 306,980 19,808,020 98 Eheliyagoda No. 159, Ratnapura Road, Eheliyagoda 5.73 1,660 4,870,500 4,357,500 9,228,000 1,450,002 7,777,998 84 Galle No. 176, Main Street, Galle 2.84 2,250 7,100,000 9,000,000 16,100,000 732,608 15,367,392 95 Gampaha No. 103, Colombo Road, Gampaha 19.45 7,870 32,166,000 24,790,500 56,956,500 4,764,579 52,191,921 92 Hikkaduwa No. 263, Galle Road, Hikkaduwa 8.74 2,400 8,740,000 6,120,000 14,860,000 1,338,650 13,521,350 91 Hingurakgoda Main Road, Hingurakgoda 15.25 2,145 12,200,000 6,435,000 18,635,000 2,075,936 16,559,064 89 Kadawatha Kandy Road, Kadawatha 3.8 1,150 4,400,000 3,018,750 7,418,750 728,412 6,690,338 90 Kandy - Mega No. 215, Sirimavo Bandaranaike Mawatha, Kandy 9.55 12,840 20,980,000 40,568,800 61,548,800 8,941,416 52,607,384 85 Katugastota No. 07, Madawala Road, Katugastota 4.875 535 5,512,500 – 5,512,500 – 5,512,500 100 Kirindiwella No. 83, Rakwana Road, Kirindiwella 8.1 2,940 8,100,000 7,497,000 15,597,000 1,393,013 14,203,987 91 Kurunegala No. 28A, Bodhiraja Mawatha, Kurunegala 7.66 2,230 13,788,000 4,961,250 18,749,250 1,075,846 17,673,404 94 Maharagama No. 71/A, High Level Road, Maharagama 6.2 2,700 15,500,000 8,505,000 24,005,000 1,150,328 22,854,672 95 Matara Anagarika Dharmapala Mawatha, Matara 10 3,520 16,800,000 11,880,000 28,680,000 1,990,068 26,689,932 93 Middeniya Katuwana Road, Middeniya 8.25 2,670 6,600,000 6,174,375 12,774,375 1,306,303 11,468,072 90 Mount Lavinia Galle Road, Mount Lavinia 7.5 1,900 22,500,000 5,985,000 28,485,000 1,043,065 27,441,935 96 Mount Lavinia - Mega Galle Road, Mount Lavinia 20 15,840 55,410,000 58,756,047 114,166,047 10,985,655 103,180,392 90 Nawalapitiya Kotmale Road, Nawalapitiya 5.25 2,760 7,050,000 6,210,000 13,260,000 1,604,099 11,655,901 88 Negombo Greens Road, Negombo 6 2,040 14,400,000 5,049,000 19,449,000 1,182,267 18,266,733 94 Nuwara Eliya No. 80, Kandy Street, Nuwara Eliya 4.65 1,700 9,300,000 4,768,500 14,068,500 992,425 13,076,075 93
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 163 Net Book Cost or Cost or Value as a Revaluation of Revaluation of Accumulated % of Extent Buildings Land Buildings Total Value Depreciation Net Book Value Revalued Location (Perches) (Square Feet) Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Amount Panadura No. 348, Galle Road, Panadura 6.15 2,940 9,225,000 8,121,750 17,346,750 1,583,519 15,763,231 91 Pettah No. 1801/79, People's Park, Bodhiraja Mawatha, Colombo 11 81.2 872 8,000,000 8,000,000 1,091,552 6,908,448 86 Piliyandala Gonamaditta Road, Piliyandala 1,151.95 116,410 114,435,000 254,707,625 369,142,625 31,858,510 337,284,115 91 Pussellawa No. 515B, Nuwara Eliya Road, Pussellawa 12.43 3,295 9,322,500 8,451,675 17,774,175 2,119,419 15,654,756 88 Rathnapura No. 122, Colombo Road, Ratnapura 5.8 2,735 8,700,000 7,384,500 16,084,500 1,675,212 14,409,288 90 Tangalle No. 99, Matara Road, Tangalle 4.6 1,285 6,900,000 1,606,250 8,506,250 36,960 8,469,290 100 Trincomalee North Coast Road, Trincomalee 12.12 2,184 4,464,000 2,200,000 6,664,000 221,397 6,442,603 97 Wellawatta No. 579, Galle Road, Wellawatta, Colombo 06 4.6 2,700 20,700,000 6,682,500 27,382,500 1,935,192 25,447,308 93 512,436,500 548,400,872 1,060,837,372 92,599,505 968,237,867
13. Intangible Assets Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
13.1 Trade Mark Summary Cost As at the beginning of the Year 79,762,500 79,762,500 79,762,500 79,762,500 As at the end of the Year 79,762,500 79,762,500 79,762,500 79,762,500 Less: Accumulated Impairment Loss – – – – Net Carrying Amount 79,762,500 79,762,500 79,762,500 79,762,500
13.2 Software Summary Cost As at the beginning of the Year 113,101,497 99,501,081 91,469,140 80,500,706 Acquired/Incurred during the Year (Note 13.7) 4,677,083 13,600,416 – 10,968,434
As at the end of the Year 117,778,580 113,101,497 91,469,140 91,469,140
Amortisation As at the beginning of the Year 46,874,301 39,122,642 34,812,869 28,244,158 Amortisation Charge for the Year 9,533,421 7,751,659 7,952,395 6,568,711 As at the end of the Year 56,407,722 46,874,301 42,765,264 34,812,869
Carrying Amount As at the beginning of the Year 66,227,196 60,378,439 56,656,271 52,256,548 As at the end of the Year 61,370,858 66,227,196 48,703,876 56,656,271
164 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 13.3 Other Intangible Assets Externally Acquired Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Cost As at the beginning of the Year 32,000,000 32,000,000 32,000,000 32,000,000 Acquired/Incurred during the Year – – – – Capitalised during the Year – – – – As at the end of the Year 32,000,000 32,000,000 32,000,000 32,000,000
Amortisation As at the beginning of the Year 12,799,993 6,400,000 12,799,993 6,400,000 Amortisation Charge for the Year 6,399,996 6,399,993 6,399,996 6,399,993 As at the end of the Year 19,199,989 12,799,993 19,199,989 12,799,993
Carrying Amount As at the beginning of the Year 19,200,007 25,600,000 19,200,007 25,600,000 As at the end of the Year 12,800,011 19,200,007 12,800,011 19,200,007 Total Net Carrying Amount 153,933,369 165,189,703 141,266,387 155,618,778
13.4 Sisil Trademark The Company had acquired the ‘SISIL’ trademark in December 2000, amounting to Rs. 55 million. The carrying amount as at 31st December 2011 is Rs. 41,250,000/-. The Company had initially recorded the ‘Sisil’ trademark at cost and amortised over the determined useful life. The management is of the opinion that the aforementioned trademark has an indefinite useful life as their associated brand awareness and recognition has existed over 30 years and the Company intends to utilise the said trademark for the foreseeable future. There are no legal, regulatory, contractual, competitive, economic or other factors that may limit its useful life and accordingly, the carrying amount of this trademark is determined after testing for impairment annually. Following assumptions are made to test for any impairment as at 31st December 2011.
Annual Sales Growth for the Next Five Years 12% Gross Margin 27% Discount Rate 12% Indefinite Growth Rate after Year 2015 3%
13.5 UNIC Trademark The Company had acquired the ‘UNIC’ trademark in 2006, amounting to Rs. 38,512,500/-. This asset is now carried at cost subject to annual impairment test and carrying amount as at 31st December 2011 is Rs. 38,512,500/-. This trademark is also considered to have an indefinite useful life due to the factors mentioned in the preceding paragraph and accordingly, the carrying amount of this trademark is determined after testing for impairment annually. Following assumptions are made to test for impairment as at 31st December 2011.
Annual Sales Growth for the Next Five Years
Year 2012 to 2016 10% Gross Margin 33% Discount Rate 12% Indefinite Growth Rate after Year 2015 2%
13.6 The Company took over the showrooms, retail operation of the Hayleys Electronic Retail Ltd. from 2nd January 2008 and agencies of Phillips and Kenwood from Hayleys Electronic Retail Ltd. for Rs. 32 million. The entire purchase consideration is treated as Goodwill, and is amortised over the determined useful life of 5 years commencing from the period beginning 1st January 2009.
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 165 13.7 The subsidiary had acquired the software which is categorised as Intangible Assets, amounting to Rs. 4,677,083/-. It is amortised over 5 years, commencing from the date of effective use.
Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
13.8 Ammortisation Charge for the Year Ammortisation of Software 9,533,421 7,751,659 7,952,395 6,568,711 Ammortisation of Other Intangible Assets Externally Acquired 6,899,996 6,399,993 6,399,996 6,399,993 15,933,417 14,151,652 14,352,391 12,968,704
14. Investment in Subsidiary - Company
Market Value/ Carrying Market Carrying Director's Value Value Value Valuation Country of No of Shares 2011 2011 2010 2010 Incorporation 2011 2010 Rs. Rs Rs. Rs.
Singer Finance (Lanka) PLC Sri Lanka 80,000,000 80,000,000 Investment on 1st January 400,000,000 2,160,000,000 400,000,000 897,000,000 Investments made during the Year – – – – Carrying amount as at 31st December 400,000,000 2,160,000,000 400,000,000 897,000,000
14.1 Singer Finance (Lanka) PLC started trading its shares on 17th January 2011 at Colombo Stock Exchange after allotting on 22nd December 2010. In the absence of active market trading as at 31st December 2010, market value of Singer Finance (Lanka) PLC is not available. Hence, Directors valued Singer Finance (Lanka) PLC at its Net Assets Value as at 31st December 2010 of Rs. 897 million.
15. Investments in Equity Accounted Investees 15.1 Investment in Equity Accounted Investees - Consolidated
Share of Consolidated Profit/(Loss) Consolidated Carrying Net of Dividends Carrying Holding Amount Received for Amount % 2011 the Year 2010 2011 2010 Rs. Rs. Rs. Non-Quoted Reality Lanka Ltd. (Note 15.2) 40 40 46,885,646 (638,975) 23,524,621 (Directors' Valuation as at 31.12.2011 Rs. 48.0 million 2010 - 24.0 million) Telshan Network (Pvt) Ltd. 23.56 23.56 – – – (Directors' Valuation as at 31.12.2011 Rs. 10 million 2010 - Rs. 10 million) (Note 15.6) Total Non-Quoted Investments in Equity Accounted Investees 46,885,646 23,524,621 Net Carrying Amount of Investments in Equity Accounted Investees 46,885,646 23,524,621
166 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements Consolidated Consolidated Balance as at Balance as at 31.12.2011 31.12.2010 Rs. Rs. 15.2 Share of Equity Accounted Investees Retained Profit Reality Lanka Ltd. Balance Brought Forward (475,379) 541,304 Current Year Share of Profit/(Loss) (638,975) (1,016,683) Current Year's Retained Profit/(Loss) (638,975) (1,016,683) (1,114,354) (475,379) Total Share of Equity Accounted Investees Retained Profits (1,114,354) (475,379) Cost of Equity Accounted Investees (Note 15.5) 48,000,000 24,000,000 Total Carrying Amount of Investment in Equity Accounted Investees 46,885,646 23,524,621
15.3 Movement of Investment - Cost
Consolidated Increase/ Consolidated Balance as at (Decrease) Balance as at 01.01.2011 in Investments 31.12.2011 Rs. Rs. Rs.
Reality Lanka Ltd. 24,000,000 24,000,000 48,000,000 Telshan Network (Pvt) Ltd. (Note 15.6) – – – 24,000,000 24,000,000 48,000,000
15.4 Summarised Financial Information of Equity Accounted Investees
Current Non-Current Total Current Non-Current In Thousands of Rs. Ownership Assets Assets Assets Liabilities Liabilities 2010 Reality Lanka Ltd. (Associate) 40% 9,106 178,785 187,891 129,080 –
2011 Reality Lanka Ltd. (Associate) 40% 1,257 190,169 191,426 74,212 –
15.5 Investment in Equity Accounted Investees - Company
Carrying Market Value/ Carrying Market Value/ Value Directors’ Value Directors’ No. of Shares 2011 Valuation 2010 Valuation 2011 2010 Rs. Rs. Rs. Rs. Non-Quoted Telshan Network (Pvt) Ltd. (Note 15.6) 2,000,000 2,000,000 – – – – Reality Lanka Ltd. 4,800,000 2,400,000 48,000,000 48,000,000 24,000,000 24,000,000 Total Investments in Non-Quoted Associate Equity Securities 48,000,000 48,000,000 24,000,000 24,000,000 Net Carrying Amount of Investment in Equity Accounted Investees 48,000,000 48,000,000 24,000,000 24,000,000
15.6 Investment in Telshan Network (Pvt) Ltd. amounting to Rs. 20,000,000/- had been written off since it carries negative net assets position.
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 167 16. Other Long-Term Investments 16.1 Consolidated
Carrying Market Value/ Carrying Market Value/ Value Directors’ Value Directors’ No. of Shares 2011 Valuation 2010 Valuation 2011 2010 Rs. Rs. Rs. Rs. (a) Non-Quoted Equity Investment Lanka Ltd. 1,665,000 1,665,000 17,020,000 18,683,790 17,020,000 18,683,790 Credit Information Bureau of Sri Lanka 100 100 41,300 41,300 41,300 41,300 Total Investments in Non-Quoted Equity Securities 17,061,300 18,725,090 17,061,300 18,725,090 Total Net Carrying Amount of Other Investments - Non-Current 17,061,300 18,725,090 17,061,300 20,565,275
16.2 Company Investments in Equity Securities - Non-Current
Carrying Market Value/ Carrying Market Value/ Amount Directors’ Amount Directors’ No. of Shares 2011 Valuation 2010 Valuation 2011 2010 Rs. Rs. Rs. Rs.
(a) Non-Quoted Equity Investment Lanka Ltd. 1,665,000 1,665,000 17,020,000 18,683,790 17,020,000 18,683,790 Total Investments in Non-Quoted Equity Securities 17,020,000 18,683,790 17,020,000 18,683,790 Total Net Carrying Amount of Other Investments - Non-Current 17,020,000 18,683,790 17,020,000 18,683,790
16.3 Singer (Sri Lanka) PLC sold entire 42,795 shares of Regnis (Lanka) PLC for Rs. 5,067,392/-. The purchase consideration of such sold shares was Rs. 1,428,473/-. The resulting gain on disposal of other long-term Investments amounting to Rs. 3,638,919/- is recognised to the Consolidated and Company Income Statements under other income.
17. Inventories Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Raw Materials 144,251,095 104,156,594 144,251,095 104,156,594 Work-in-Progress 32,295,354 23,315,632 32,295,354 23,315,632 Finished Goods 3,033,957,740 1,824,856,499 3,017,086,260 1,824,856,499 Supplies and Parts 237,179,190 224,440,896 237,179,190 224,440,896 Goods-in-Transit 203,636,831 133,305,325 203,636,831 133,305,325 3,651,320,210 2,310,074,946 3,634,448,730 2,310,074,946 Less: Provision for Inventory (198,753,108) (148,656,924) (198,753,108) (148,656,924) Consignment Inventory (21,740,062) (12,376,604) (21,740,062) (12,376,604) Total Inventories 3,430,827,040 2,149,041,418 3,413,955,560 2,149,041,418
168 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 18. Loans Due from Related Parties Consolidated Company
2011 2010 2011 2010 Relationship Rs. Rs. Rs. Rs.
Regnis (Lanka) PLC Affiliate Company – 70,000,000 – 70,000,000 Reality Lanka Ltd. Associate Company 73,634,631 102,217,767 73,634,631 102,217,767
Singer Industries (Ceylon) PLC Affiliate Company – 30,000,000 – 30,000,000
Regnis Appliances (Pvt) Ltd. Affiliate Company 100,000,000 – 100,000,000 –
Singer Finance (Lanka) PLC Subsidiary – – 365,871,233 409,192,424 173,634,631 202,217,767 539,505,864 611,410,191
18.1 The Management intends to recover the above loans within one year from the Balance Sheet date. Interest is charged at the rate 1% above the Company’s effective rate. The aforesaid loans are not secured.
19. Trade and Other Receivables 19.1 Non-Current Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Hire Debtors 2,570,571,457 1,909,741,950 898,024,896 686,833,953 Less: Deferred Profit on Hire Sales (463,477,667) (353,520,847) (158,950,407) (133,932,621) 2,107,093,790 1,556,221,103 739,074,489 552,901,332 Lease Rental Receivables Gross Instalment in Lease 1,696,342,529 404,145,149 – – Rental Received in Advance (806,322) (1,429,770) – – 1,695,536,207 402,715,379 – – Unearned Income (348,027,794) (75,136,106) – – 1,347,508,413 327,579,273 – – Loan Debtors Consumer and Personal Loans 308,581,917 178,055,108 – – Rental Received in Advance (10,705) (138,270) – – Less: Unearned Loan Interest Income (46,542,948) (20,778,524) – – 262,028,264 157,138,314 – –
Other Receivables 322,655,334 344,221,130 322,655,334 344,221,130 Loans to Employees (Note 19.3) 221,814,867 160,581,869 197,183,407 138,177,495 544,470,201 504,802,999 519,838,741 482,398,625 4,261,100,668 2,545,741,689 1,258,913,230 1,035,299,957
Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. 19.2 Current Hire Debtors 4,355,456,307 3,273,885,461 3,255,593,499 2,373,187,515 Rental Received in Advance (230,500) (440,561) – – Less: Deferred Profit on Hire Sales (983,362,634) (681,332,711) (637,421,409) (392,573,796) Provision for Doubtful Debts (48,133,225) (34,127,964) (43,792,581) (26,448,014) 3,323,729,948 2,557,984,225 2,574,379,509 1,954,165,705
Lease Rental Receivables Gross Instalment in Lease 905,609,460 335,953,903 – – Unearned Income (337,116,117) (103,526,578) – – Provision for Doubtful Debts (2,595,288) (7,285,731) – – 565,898,055 225,141,594 – –
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 169 Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Loan Debtors Consumer and Personal Loans 1,298,346,605 1,567,955,974 – – Less: Unearned Loan Interest Income (200,017,493) (255,150,429) – – FD Loans 50,760,571 45,548,790 – – Net Receivable 1,149,089,683 1,358,354,335 – – Less: Provision for Bad & Doubtful Debts (20,318,047) (18,020,195) – – 1,128,771,636 1,340,334,140 – –
Other Debtors Trade Receivables 1,142,264,500 718,285,506 1,142,264,500 718,285,506 Provision for Doubtful Debts (53,756,341) (36,144,066) (53,756,341) (36,144,066) Advance and Other Receivables 762,776,079 517,278,646 589,878,626 425,063,016 Provision for Doubtful Debts (147,214,135) (266,426,651) (130,730,734) (249,723,027) Shipping Guarantees – 4,359,274 – 4,359,274 Prepayments 188,994,052 338,478,313 163,429,585 331,257,829 Interest Receivable from Reality Lanka Ltd. – 17,837,118 – 17,837,118 Loans to Employees (Note 19.3) 48,661,459 58,616,695 41,432,020 54,737,700 1,941,725,614 1,352,284,835 1,752,517,656 1,265,673,350 6,960,125,253 5,475,744,793 4,326,897,165 3,219,839,055
19.3 Loans to Company Employees Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Movement Balance as at the beginning of the Year 219,198,565 198,763,363 192,915,195 189,054,059 Loans Granted during the Year 136,424,500 98,514,045 120,664,500 69,961,000 Less: Repayments (85,146,739) (78,078,843) (74,964,268) (66,099,864) Balance as at the end of the Year 270,476,326 219,198,565 238,615,427 192,915,195 Due within One Year 48,661,459 58,616,695 41,432,020 54,737,700 Due after One Year 221,814,867 160,581,870 197,183,407 138,177,495
20. Amounts Due from Related Parties Consolidated Company
2011 2010 2011 2010 Relationship Rs. Rs. Rs. Rs. 20.1 Trade Singer Finance (Lanka) PLC Subsidiary – – 561,986,814 947,126,673 Regnis Appliances (Pvt) Ltd. Affiliate Company 1,140,930 – 1,140,930 – Singer Asia Sourcing Ltd. Affiliate Company 6,845,359 6,723,621 6,845,359 6,723,621 7,986,289 6,723,621 569,973,103 953,850,294
20.2 Non-Trade Singer Industries (Ceylon) PLC Affiliate Company 17,375,371 21,987,873 17,375,371 21,987,873 Regnis (Lanka) PLC Affiliate Company 6,164,151 7,568,370 6,164,151 7,568,370 23,539,522 29,556,243 23,539,522 29,556,243
170 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 21. Marketable Securities Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Investment in Repurchase Agreement 290,312,617 410,551,810 – – 290,312,617 410,551,810 – –
22. Cash and Cash Equivalents Components of Cash and Cash Equivalents 22.1 Favourable Cash and Cash Equivalent Balances Cash and Bank Balances 372,302,709 250,573,958 364,735,727 200,402,845
22.2 Unfavourable Cash and Cash Equivalent Balances Bank Overdrafts (Notes 27.1 and 27.6) (674,864,338) (457,771,513) (546,711,851) (457,771,513) Total Cash and Cash Equivalents for the Purpose of Cash Flow Statement (302,561,629) (207,197,556) (181,976,124) (257,368,668)
23. Stated Capital 23.1 Issued and Fully Paid
At the Issued for Issued for At the beginning Cash during Non-Cash end of of the Year the Year Consideration the Year 01.01.2011 31.12.2011 Number Number Number Number
Number of Shares - Ordinary Shares 62,604,805 – 62,604,805 125,209,610 62,604,805 – 62,604,805 125,209,610
Rs. Rs. Rs. Rs.
Rupees - Ordinary Shares 626,048,050 – – 626,048,050 626,048,050 – – 626,048,050
23.2 At the Extraordinary General Meeting held on 31st March 2011, the shareholders approved a subdivision of shares on the basis of one into one. Its issued shares were 62,604,805 and post subdivision it has increased to 125,209,610. This has not altered the Stated Capital of the Company which remains at Rs. 626,048,050/-.
23.3 Rights, Preference and Restrictions of Classes of Capital The holders of ordinary shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share at a meeting of the Company.
23.4 Shares held by Group Companies The shares of the Company held by the Group Companies are as follows:
2011 2010 Number Number
Singer (Sri Lanka) B.V. (Note 23.2) 107,812,850 53,906,425 Singer Industries (Ceylon) PLC – 1,050,700
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 171 24. Capital Reserves Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. (a) Revaluation Reserve Revaluation Reserve (Note 24.1) 655,453,887 664,542,029 655,453,887 664,542,029 655,453,887 664,542,029 655,453,887 664,542,029
24.1 Revaluation Reserve Balance as at the beginning of the Year 664,542,029 404,084,717 664,542,029 404,084,717 Revaluation during the Year – 359,796,766 – 359,796,766 Deferred Tax on Revaluation – (99,339,454) – (99,339,454) Realisation on Revaluation Surplus (12,622,419) – (12,622,419) – Deferred Tax effect on transfer of Revaluation Surplus 3,534,277 – 3,534,277 – Balance as at the end of the Year 655,453,887 664,542,029 655,453,887 664,542,029
25. Statutory Reserves Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. (a) Reserve Fund Reserve Fund (Note 25.1) 16,350,118 10,748,118 – – 16,350,118 10,748,118 – –
(b) Investment Fund Investment Fund (Note 25.2) 28,057,705 – – – 28,057,705 – – –
44,407,823 10,748,118 – –
25.1 Reserve Fund
Balance as at the beginning of the year 10,748,118 8,042,189 – – Transfer of surplus during the year 5,602,000 2,705,929 – – Balance as at the end of the year 16,350,118 10,748,118 – –
25.2 Investment Fund
Balance as at the beginning of the year – – – – Transfers during the year 28,057,705 – – – Balance as at the end of the year 28,057,705 – – –
26. Revenue Reserves Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Summary (a) General Reserve (Note 26.1) 2,200,000,000 2,000,000,000 2,200,000,000 2,000,000,000 2,200,000,000 2,000,000,000 2,200,000,000 2,000,000,000
(b) Retained Earnings (Note 26.2) 1,213,010,861 578,324,678 885,526,518 316,845,046 1,213,010,861 578,324,678 885,526,518 316,845,046 3,413,010,861 2,578,324,678 3,085,526,518 2,316,845,046
172 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 26.1 General Reserve The general reserve which is a revenue reserve represents the amounts set aside by the Directors for general application.
The movement of general reserve is as follows:
Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
At the beginning of the Year 2,000,000,000 1,600,000,000 2,000,000,000 1,600,000,000 Transferred from Retained Earnings 200,000,000 400,000,000 200,000,000 400,000,000 At the end of the Year 2,200,000,000 2,000,000,000 2,200,000,000 2,000,000,000
26.2 Retained Earnings
Singer (Sri Lanka) PLC 885,526,518 316,845,046 885,526,518 316,845,046 Equity Accounted Investees (Note 15.2) (1,114,354) (475,379) – – Subsidiary Company 186,267,999 86,189,385 – – Gain on Dilution of Equity Holding in Singer Finance (Lanka) PLC (Note 5.1) 176,573,748 176,573,748 – – Retained Earnings Attributable to Minority Shareholders (Note 26.3) (34,243,068) (808,122) – – 1,213,010,861 578,324,678 885,526,518 316,845,046
26.3 Retained Earnings Attributable to Minority Shareholders
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
At the beginning of the year 808,122 – – – Profit Attributable to Minority Shareholders - for the year 44,101,611 808,122 – – Dividend for Minority Shareholders - for the year (10,666,665) – – – At the end of the year 34,243,068 808,122 – –
27. Interest-Bearing Loans & Borrowings 27.1 Interest-Bearing Loans & Borrowings - Consolidated
2011 2011 2011 2010 2010 2010 Amount Amount Total Amount Amount Total Repayable Repayable Repayable Repayable Within 1 Year After 1 Year Within 1 Year After 1 Year Rs. Rs. Rs. Rs. Rs. Rs.
Debentures (Note 27.2) 520,000,000 500,000,000 1,020,000,000 300,000,000 1,060,000,000 1,360,000,000 Bank Loans (Note 27.3) 3,657,928,132 360,385,067 4,018,313,199 2,157,712,738 227,290,697 2,385,003,435 Bank Overdrafts (Note 22.2) 674,864,338 – 674,864,338 457,771,513 – 457,771,513
Commercial Papers (Note 27.4) – 250,000,000 250,000,000 250,000,000 – 250,000,000 4,852,792,470 1,110,385,067 5,963,177,537 3,165,484,251 1,287,290,697 4,452,774,948
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 173 27.2 Debentures - Consolidated
6 months TB+ 1.75% Debentures Redeemable on 05.06.12 Balance as at New Redemption As at 01.01.2011 Issues 31.12.2011 Rs. Rs. Rs. Rs. 6 Month TB + 1.75% Debentures Unsecured Redeemable on 05.06.2012 30,000,000 – 15,000,000 15,000,000 AWPLR+3.00 Debentures Unsecured Redeemable on 05.06.2011/12 90,000,000 – 45,000,000 45,000,000 19.75% Debentures Unsecured Redeemable on 29.02.2012/13 272,000,000 – – 272,000,000 6 Months TB+1.65 Debentures Unsecured Redeemable on 29.09.2011/12 28,000,000 – – 28,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2012 270,000,000 – 120,000,000 150,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2012 270,000,000 – 120,000,000 150,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2012/13 400,000,000 – 40,000,000 360,000,000 1,360,000,000 – 340,000,000 1,020,000,000
27.3 Bank Loans - Consolidated
Balance as at Loans Repayment As at 01.01.2011 Obtained 31.12.2011 Rs. Rs. Rs. Rs. (a) Movement of Bank Loans Bank Loans 2,385,003,435 5,708,054,000 4,074,744,236 4,018,313,199 2,385,003,435 5,708,054,000 4,074,744,236 4,018,313,199
(b) Bank Loan Repayable after One Year
Company Lender/Rate Repayment Security 31.12.2011 31.12.2010 of Interest (p.a.) Rs. Rs.
Singer (Sri Lanka) PLC E-Friends Loan @6.5% At Maturity No Assets Pledged 4,125,067 5,832,925 National Savings Bank Rs. 200 million to be AWPLR+1.25% paid in May 2012 No Assets Pledged – 200,000,000 4,125,067 205,832,925 Singer Finance (Lanka) PLC BoC AWPLR+2.5% Rate (Floor Rate 23%) Rate Reviewed Monthly Monthly Payment Lease Debtors – 1,570,316 Loan on Securitisation – 19,887,456 Fixed Rate 25.75% Monthly Repayment Hire Purchase Receivable Sampath Bank AWPLR+2% (Floor Rate 22%) Rate Reviewed Quarterly Monthly Payment Hire Purchase Receivable 137,510,000 – Commercial Bank Hire Purchase/Lease AWPLR+1% Monthly Payment Receivable 218,750,000 – 356,260,000 21,457,772 360,385,067 227,290,697
174 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 27.4 Commercial Papers - Consolidated
Balance as at New Redemption As at 01.01.2011 Issues 31.12.2011 Rs. Rs. Rs. Rs.
Commercial Papers 250,000,000 200,000,000 200,000,000 250,000,000 250,000,000 200,000,000 200,000,000 250,000,000
27.5 Bank Facilities - Consolidated
2011 2010 Utilised Total Facility Utilised Total Facility Rs. Rs. Rs. Rs.
Overdraft 674,864,338 1,497,000,000 457,771,513 1,045,000,000 Term Loans 454,125,635 450,000,000 312,597,484 1,410,000,000 Short-Term Loans 3,814,187,564 5,336,060,635 2,322,405,951 3,655,800,000 Debentures 1,020,000,000 1,020,000,000 1,360,000,000 1,360,000,000 Total Debt Facility 5,963,177,537 8,303,060,635 4,452,774,948 7,470,800,000
Public Deposits 2,662,999,529 – 1,647,985,384 – Guarantees – 350,000,000 254,359,274 350,000,000 Letter of Credit 1,493,256,782 1,685,000,000 1,408,218,372 1,685,000,000 Total Debt and Other Facilities 10,119,433,848 10,338,060,635 7,763,337,980 9,505,800,000
27.6 Interest-Bearing Loans & Borrowings - Company
2011 2011 2011 2010 2010 2010 Amount Amount Total Amount Amount Total Repayable Repayable Repayable Repayable Within 1 Year After 1 Year Within 1 Year After 1 Year Rs. Rs. Rs. Rs. Rs. Rs.
Debentures (Note 27.7) 520,000,000 500,000,000 1,020,000,000 300,000,000 1,060,000,000 1,360,000,000 Bank Loans (Note 27.8) 3,254,405,185 4,125,067 3,258,530,252 2,152,867,617 205,832,925 2,358,700,542 Bank Overdrafts (Note 22.2) 546,711,851 – 546,711,851 457,771,513 – 457,771,513 Commercial Papers (Note 27.9) – 250,000,000 250,000,000 250,000,000 – 250,000,000 4,321,117,036 754,125,067 5,075,242,103 3,160,639,130 1,265,832,925 4,426,472,055
27.7 Debentures - Company
As at New Redemption As at 01.01.2011 Issues 31.12.2011 Rs. Rs. Rs. Rs. 6 Months TB+1.75 Debentures unsecured redeemable on 05.06.2012 30,000,000 – 15,000,000 15,000,000 AWPLR+3.00 Debentures Unsecured Redeemable on 05.06.2012 90,000,000 – 45,000,000 45,000,000 19.75% Debentures Unsecured Redeemable on 29.02.2012/13 272,000,000 – – 272,000,000 6 Months TB+1.65 Debentures Unsecured Redeemable on 29.09.2012 28,000,000 – – 28,000,000
AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2012 270,000,000 – 120,000,000 150,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2012 270,000,000 – 120,000,000 150,000,000 AWPLR+0.65 Debentures Unsecured Redeemable on 31.12.2012/13 400,000,000 – 40,000,000 360,000,000 1,360,000,000 – 340,000,000 1,020,000,000
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 175 27.8 Bank Loans - Company
As at Loans Repayments As at 01.01.2011 Obtained 31.12.2011 Rs. Rs. Rs. Rs. (a) Movement of Bank Loans Bank Loans 2,358,700,542 4,933,054,000 4,033,224,290 3,258,530,252 2,338,491,542 4,933,054,000 4,033,224,290 3,258,530,252
(b) Bank Loan Repayable after One Year
Lender/Rate Repayment Security 31.12.2011 31.12.2010 of Interest (p.a.) Rs. Rs.
E-Friends Loan @ 6.5% At Maturity No Assets Pledged 4,125,067 5,832,925
National Savings Bank - Rs. 200 million to be No Assets Pledged – 200,000,000 AWPLR+1.25% paid in May 2012 4,125,067 205,832,925
27.9 Promissory Notes - Company
As at New Redemption As at 01.01.2011 Issues 31.12.2011 Rs. Rs. Rs. Rs.
Commercial Papers 250,000,000 200,000,000 200,000,000 250,000,000 250,000,000 200,000,000 200,000,000 250,000,000
27.10 Bank Facilities
2011 2010 Utilised Total Facility Utilised Total Facility Rs. Rs. Rs. Rs.
Overdraft 546,711,851 1,247,000,000 457,771,513 1,020,000,000 Term Loans 454,125,635 450,000,000 286,294,591 1,310,000,000 Short-Term Loans 3,054,404,617 4,459,100,000 2,322,405,951 3,655,800,000 Debentures 1,020,000,000 1,020,000,000 1,360,000,000 1,360,000,000 Total Debt Facility 5,075,242,103 7,176,100,000 4,426,472,055 7,345,800,000
Guarantees – 350,000,000 254,359,274 350,000,000 Letter of Credit 1,493,256,782 1,685,000,000 1,408,218,372 1,685,000,000 Total Debt and Other Facilities 6,568,498,885 9,211,100,000 6,089,049,701 9,380,800,000
176 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 28. Deferred Tax Assets/(Liabilities) Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. 28.1 Deferred Tax Assets Balance as at the beginning of the Year 114,353,256 143,053,325 114,353,256 143,053,325 Adjustment due to Change in Tax Rate - Recognised in Income Statement (Note 10.2) – (28,610,667) – (28,610,667) Origination and Reversal of Timing Differences - Recognised in Income Statement (Note 10.2) 33,223,601 (89,402) 11,148,594 (89,402) Balance as at the end of the Year 147,576,857 114,353,256 125,501,850 114,353,256
28.2 Deferred Tax Liabilities Deferred Tax Liability/(Asset) balance as at the beginning of the Year 103,466,761 14,749,401 99,339,454 – Origination of Deferred Tax Liability due to Revaluation of Building - Recognised in Equity (3,534,277) 99,339,454 (3,534,277) 99,339,454 Origination and Reversal of Timing Differences - Recognised in Income Statement (Note 10.2) – (10,622,094) – – Deferred Tax Liability/(Asset) balance as at the end of the Year 99,932,484 103,466,761 95,805,177 99,339,454
28.3 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against tax liabilities and when the deferred tax relate to the same fiscal authority.
The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows: 28.3.1 Consolidated
2011 2010 Assets Liabilities Assets Liabilities Rs. Rs. Rs. Rs. (a) Composition of Deferred Tax Assets Property, Plant & Equipment – 64,684,674 – 68,301,370 Intangible Assets – 4,678,100 – 4,495,750 Lease Rentals 20,639,251 – – – Inventories 55,650,870 – 41,623,938 – Provision on Assets 83,820,396 – 96,060,676 – Deferred Benefit Obligations 56,829,114 – 49,465,762 – 216,939,631 69,362,774 187,150,376 72,797,120 Net Deferred Tax 147,576,857 – 114,353,256 –
(b) Composition of Deferred Tax Liabilities Property, Plant & Equipment – 96,896,622 – 105,210,997 Intangible Assets – 3,546,755 – – Provision on Assets – – 281,998 – Deferred Benefit Obligations 510,893 – 1,462,238 – 510,893 100,443,377 1,744,236 105,210,997 Net Deferred Tax – 99,932,484 – 103,466,761
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 177 28.3.2 Company
2011 2010 Assets Liabilities Assets Liabilities Rs. Rs. Rs. Rs. (a) Composition of Deferred Tax Assets Property, Plant & Equipment – 64,684,674 – 68,301,370 Intangible Assets – 4,678,100 – 4,495,750 Inventories 55,650,870 – 41,623,938 – Provision on Assets 83,820,396 – 96,060,676 – Deferred Benefit Obligations 55,393,358 – 49,465,762 – 194,864,624 69,362,774 187,150,376 72,797,120 Net Deferred Tax 125,501,850 – 114,353,256 –
(b) Composition of Deferred Tax Liabilities Property, Plant & Equipment – 95,805,177 – 99,339,454 – 95,805,177 – 99,339,454 Net Deferred Tax – 95,805,177 – 99,339,454
29. Retirement Benefit Obligations Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Present Value of Unfunded Gratuity 204,787,190 181,875,758 197,833,421 176,663,436 Total Present Value of the Obligation 204,787,190 181,875,758 197,833,421 176,663,436
Provision for Retiring Gratuity At the beginning of the Year 181,875,758 158,545,420 176,663,436 155,164,141 Actuarial Gain/(Loss) on Obligation (124,970) 220,509 (183,884) (247,944) Current Service Cost 17,499,411 16,018,237 16,230,217 15,028,682 Interest on Obligation 19,188,265 17,573,814 18,639,926 17,200,779 218,438,464 192,357,980 211,349,695 187,145,658
Benefits Paid (13,651,274) (10,482,222) (13,516,274) (10,482,222) At the end of the Year 204,787,190 181,875,758 197,833,421 176,663,436
The Company maintains a non-contributory defined benefit plan providing for gratuity benefits payable to employees expressed in terms of final monthly salary and service.
As at 31st December 2011, the gratuity liability was actuarialy valued under the Projected Unit Credit (PUC) method by a professionally qualified actuary firm Messrs Actuarial & Management Consultants (Private) Ltd.
The required accounting provision of the Company as at 31st December 2011, has been determined based on the recommendation on this Report.
Following key assumptions were made in arriving at the above figures: (a) Rate of Discount - 10.5% p.a. (net of tax) (b) Salary Increment Rate Year 1 - 10% Year 2+ - 9%
178 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements (c) Retirement Age
Other than Factory General Staff Factory General Staff Males 60 years 55 years Females 60 years 55 years
(d) Assumptions regarding future mortality are based on A67/70 Mortality Table, issued by the Institute of Actuaries, London. The demographic assumptions underlying the valuation are with respect to retirement age, early withdrawal from service and retirement on medical grounds.
The expense so recognised is included in Selling and Administrative expenses in the Income Statement.
The Group's and Company's retirement benefit obligation would have been Rs. 246.5 million and Rs. 237.5 million respectively as at the Balance Sheet date, had their retirement benefit obligation been calculated as per the requirements of Payment of Gratuity Act No. 12 of 1983.
30. Trade and Other Payables Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Trade Payables 1,038,405,126 551,474,918 858,046,445 458,339,232 Interest Payable 132,167,222 112,817,313 42,076,284 47,113,516 Value Added Tax Payable 77,879,367 53,949,856 74,205,036 51,439,712 MSPS Payable 21,169,011 13,839,778 21,169,011 13,839,778 ETF Payable 4,877,182 3,701,930 4,877,182 3,701,930 Advances Received from Customers 132,537,264 109,605,148 132,537,264 109,605,148 Accrued Expenses 762,682,118 404,122,470 729,811,324 392,252,500 Turnover Tax Payable – 31,802,374 – 31,802,374 Other Payables 333,422,821 188,243,317 192,306,693 79,352,452 Warranty Provisions 71,078,901 30,758,736 71,078,901 30,758,736 2,574,219,012 1,500,315,840 2,126,108,140 1,218,205,378
30.1 Warranty provisions have been recognised for expected warranty claims on products sold by the Company.
31. Deferred Revenue Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Balance as at the beginning of the Year 79,308,834 57,011,584 66,283,640 49,532,150 Amounts Collected during the Year 346,943,361 192,535,962 318,309,875 174,783,463 Amounts Recognised as Revenue during the Year (286,872,897) (170,238,712) (266,234,547) (158,031,973) Balance as at the end of the Year 139,379,298 79,308,834 118,358,968 66,283,640
31.1 Deferred revenue includes deferred service fee and amount deferred on extended warranty income as at 31st December 2011.
32. Dividend Payable Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs.
Unclaimed Dividends 5,824,553 3,204,691 5,824,553 3,204,691 5,824,553 3,204,691 5,824,553 3,204,691
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 179 33. Dividends Consolidated Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. Ordinary Shares Interim Dividend 2011 - Rs. 1.50 (2010 - Rs. 1.00) 187,814,415 62,604,805 187,814,415 62,604,805 Proposed Final Dividend 2011 - Rs. 6.00 (2010 - Rs. 3.50) 751,257,660 219,116,818 751,257,660 219,116,818 939,072,075 281,721,623 939,072,075 281,721,623
34. Amounts due to Related Parties Consolidated Company
2011 2010 2011 2010 Relationship Rs. Rs. Rs. Rs. 34.1 Trade
Singer Industries (Ceylon) PLC Affiliate Company 72,983,434 160,845,568 72,983,434 160,845,568 Regnis (Lanka) PLC Affiliate Company 64,339,509 53,402,870 64,339,509 53,402,870 Regnis Appliances (Pvt) Ltd. Affiliate Company 33,948,923 54,399,165 33,948,923 54,399,165 171,271,866 268,647,603 171,271,866 268,647,603
34.2 Non-Trade Singer Asia Ltd. Affiliate Company 73,441,026 53,272,425 73,441,026 53,272,425 73,441,026 53,272,425 73,441,026 53,272,425
35. Deposits from Customers Balance as at the beginning of the Year 1,647,985,384 1,463,621,740 – – New Deposits 1,501,498,312 716,990,498 – – Capitalisation of Interest 87,142,811 87,998,515 – – 3,236,626,507 2,268,610,753 – – Repaid Deposits (573,626,978) (620,625,369) – – Balance as at the end of the Year 2,662,999,529 1,647,985,384 – – Payable within One Year 2,159,857,465 1,451,990,703 – – Payable after One Year 503,142,064 195,994,681 – –
36. Commitments and Contingencies - Group/Company 36.1 Financial Commitments Documentary Credits effected for foreign purchases amounted to Rs. 1,493,256,782/- (2010 - Rs. 1,408,218,372/-).
36.2 Capital Commitments There were no significant capital commitments, which have been approved or contracted for by the Company/Subsidiary as at the Balance Sheet date except for the following: Operating Lease commitment as at 31st December 2011 is as follows: Within One Year - Rs. 339.6 million Between One to Five Years - Rs. 1,361.5 million Over Five Years - Rs. 450.2 million
180 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 36.3 Assets Pledged Company has given a negative pledge over the Company's total assets, except immovable assets, for the following banks over the Loans and Overdrafts having a carrying value of Rs. 2.0 billion as at the year end:
• Hongkong & Shanghai Banking Corporation Ltd. • Commercial Bank of Ceylon PLC • Seylan Bank PLC • Sampath Bank PLC • Nations Trust Bank PLC • Deutsche Bank AG • National Development Bank PLC • Muslim Commercial Bank Ltd. • DFCC Vardhana Bank PLC • People's Bank
Lease debtors and hire purchase receivable portfolio with a carrying value of Rs. 848 million had been pledged by the Subsidiary Singer Finance (Lanka) PLC against loans obtained to the value of Rs. 820 million from Bank of Ceylon, Sampath Bank PLC, Deutsche Bank and Commercial Bank.
36.4 Contingencies (a) Guarantees given to banks and other lending institutions on behalf of Singer Industries (Ceylon) PLC and Regnis (Lanka) PLC amounts to Rs. 75 million and Rs. 455.5 million respectively.
(b) The Company has provided bank guarantees amounting to Rs. 134.2 million to the Director General of Customs to clear imports during the year under review pending completion of legal proceedings in the Court of Appeal.
The bank guarantees related to alleged additional duty payable on imports, is being contested by the Company in Courts.
The Company lawyers are of the opinion that there is no basis that the Company is liable for the additional duty and hence, no provision is made in the Financial Statements.
(c) Singer Finance (Lanka) PLC has provided guaranties to its Fixed Deposit Holders amounting to Rs. 6,050,000/-, holding deposit holder's Fixed Deposits amounting to Rs. 6,898,939/90 as Security.
37. Events Occurring after the Balance Sheet Date There have been no material events occurring after the Balance Sheet date that require disclosure in the Financial Statements, except (i) On the 28th February 2012, Board of Directors approved a final dividend of Rs. 6.00 per share amounting to Rs. 751.3 million for the year ended 31st December 2011. The dividend will be paid on 20th March 2012.
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 181 38. Related Party Transactions 38.1 Identity of Related Parties The Company has a related party relationship with its Parent Company, its Associate Companies, its Affiliate Companies and with its Directors.
38.2 Transactions with Parent Companies (a) During the year, the Company had following transactions with its Parent Companies:
Singer Asia Ltd. - (Intermediate Parent)
2011 2010 Rs. million Rs. million
Royalty Expense 232.8 178.3 Royalty Payable Balance as at the Year End 73.4 53.3
Singer Asia Holdings B.V. (Intermediate Parent) Royalty paid to Singer Asia Ltd. through Singer Asia Holdings B.V.
(b) Following companies are also Parent Companies of Singer (Sri Lanka) PLC and Singer Finance (Lanka) PLC, with whom no transactions were entered into during the year:
Company Relationship Singer (Sri Lanka) B.V. Intermediate Parent Singer Asia Holdings N.V. Intermediate Parent Retail Holdings N.V. Ultimate Parent
38.3 Transactions with Subsidiary Companies
2011 2010 Rs. million Rs. million Singer Finance (Lanka) PLC Sales Financed through Singer Finance (Lanka) PLC 2,049.9 2,096.8 Payments to Singer (Sri Lanka) PLC on behalf of Customers 1,835.4 1,383.3 Interest Income 65.8 52.7 Dividend Received - Gross 32.0 20.0 Cash Collections by Singer (Sri Lanka) PLC 2,937.3 618.4 Expenses Paid 94.5 92.0 Administrative Fee Charged 73.2 88.1 Collecting Commission Paid through Singer (Sri Lanka) PLC 10.4 177.4 Purchase of Assets – 0.4 Rent Reimbursed 11.0 9.6 Royalty Paid through Singer (Sri Lanka) PLC 12.0 9.6 Balance Receivable - Trade 562.0 947.1 Balance Receivable - Loan 365.9 409.2
182 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements 38.4 Transactions with Associate Companies (a) During the year, the Company had following transactions with its Associate Companies:
2011 2010 Rs. million Rs. million Reality Lanka Ltd. Loans Receivable 73.6 102.2 Interest Income 4.3 7.4 Interest Receivable – 17.8 Invested in Shares 24.0 – Rent Expense 4.2 3.6
(b) Following company is an Associate Company of Singer (Sri Lanka) PLC, with whom Singer (Sri Lanka) PLC or Singer Finance (Lanka) PLC had no transactions other than through Advertising Agencies during the year.
Telshan Network (Pvt) Ltd.
38.5 Transactions with Other Related Parties Transactions with the following parties have been disclosed in Note 38.6:
Relationship Regnis (Lanka) PLC Affiliate Company Singer Industries (Ceylon) PLC Affiliate Company Singer Asia Sourcing Ltd. Affiliate Company
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 183 38.6 Transactions with Key Management Personnel A number of Key Management Personnel or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. These transactions are given below:
Name of the Company Name of Nature of 2011 2010 and Relationship Director Transaction Rs. million Rs. million
Singer Industries (Ceylon) PLC Mr. H.D.S. Amarasuriya (Chairman) Purchases 884.0 1,159.0 (Affiliate Company) Dr. G.C.B. Wijeyesinghe Corporate Guarantee given 75.0 75.0 Mr. H.A. Pieris Lease Rental paid 2.7 2.5 Mr. V.G.K. Vidyaratne Net Finance Income 2.3 0.8 Mr. G.J. Walker Trade Credit Settled 987.0 1,070.0 Deshabandu A.M. de S. Jayaratne Dividend paid 2.9 – Purchase of Fixed Assets 1.2 – Loans Granted – 30.0 Loans Recovered 30.0 – Loans Receivable – 30.0 Balance Payable 55.6 139.0
Regnis (Lanka) PLC Mr. H.D.S. Amarasuriya (Chairman) Purchases 2,099.7 2,380.5 (Affiliate Company) Dr. G.C.B. Wijeyesinghe Corporate Guarantee given 455.5 455.5 Mr. H.A. Pieris Interest Income 5.9 16.2 Mr. V.G.K. Vidyaratne Non-Trade Settlement 47.0 44.0 Mr. G.J. Walker Trade Credit Settled 2,088.0 2,490.2 Dr. S. Kelegama Loans Recovered 70.00 60.0 Loans Receivable – 70.0 Expenses Incurred 40.4 28.2 Balance Payable 58.2 45.8 Singer Finance (Lanka) PLC Mr. H.D.S. Amarasuriya (Chairman) Sales Financed through (Subsidiary Company) Singer Finance (Lanka) PLC 2,049.9 2,096.8 Dr. G.C.B. Wijeyesinghe Payments to Singer (Sri Lanka) PLC (Resigned w.e.f. 30.12.2011) on behalf of Customers 1,835.4 1,383.3 Mr. H.A. Pieris Interest Income 65.8 52.7 Dr. S. Kelegama Dividend Received (Gross) 32.0 20.0 Mr. M.P.A. Salgado Cash Collection by Singer (Sri Lanka) PLC 2,937.3 618.4 Mr. G.J. Walker Expenses Paid 94.5 92.0 Mr. J.J. Hyun (Appointed w.e.f. 28.02.2011) Administrative Fee Charged 73.2 88.1 Collecting Commission Paid through Singer (Sri Lanka) PLC 10.4 177.4 Purchase of Assets – 0.4 Rent Reimbursed 11.0 9.6 Royalty Paid through Singer (Sri Lanka) PLC 12.0 9.6 Balance Receivable - Trade 562.0 947.1 Balance Receivable - Loans 365.9 409.2
184 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements Name of the Company Name of Nature of 2011 2010 and Relationship Director Transaction Rs. million Rs. million
National Development Bank PLC Mr. H.D.S. Amarasuriya Borrowed Funds 22.8 255.1 Interest Expense 1.9 26.5 Issue of Debentures 150 270.0 Debenture Interest 28.9 21.1
Singer Asia Sourcing Ltd. Mr. H.D.S. Amarasuriya (Affiliate Company) (Resigned w.e.f. 30.06.2010) Purchases 0.1 29.4 Mr. G.J. Walker Settlement – 29.8 Balance Receivable/(Payable) 6.8 6.7
Singer Asia Ltd. Mr. H.D.S. Amarasuriya (Intermediate Parent Company) (Resigned w.e.f. 30.06.2010) Royalty Expense 232.8 178.3 Mr P.J. O' Donnell Royalty Payable 73.4 53.3 Mr. T. Brown Mr. G.J. Walker Mr H.A. Pieris
Sampath Bank PLC Dr. S. Kelegama Borrowed Funds 281.9 210.5 (Resigned w.e.f. 30.12.2011) Interest Expense 16.6 4.8
DFCC Bank PLC Deshabandu A.M. de S. Jayaratne Investment in Debenture – 400.0 (Resigned w.e.f. 30.04.2010) Debenture Repayment 40.0 75.0 Debenture Interest Repayment 39.3 16.9
Reality Lanka Ltd. (Associate Company) Mr. H.D.S. Amarasuriya Loan Receivable 73.6 102.2 Mr. H.A. Pieris Interest Income 4.3 7.4 Mr. V.G.K. Vidyaratne Interest Receivable – 17.8 Mr. G.J. Walker Investment in Shares 24.0 – Rent Charge 4.2 3.6
Regnis Appliances (Pvt) Ltd. Mr. H.D.S. Amarasuriya Purchases 485.0 142.6 Mr. H.A. Pieris Settlements 618.0 88.2 Mr. V.G.K. Vidyaratne Expenses Paid 1.0 – Mr. A.N. Majeed Finance Charges 3.0 – Loan Granted 100.0 – Loan Receivable 100.0 – Balance Payable 32.8 54.4
Fintravels Ltd. Dr. G.C.B. Wijeyesinghe Business Transactions 5.5 1.5
Notes to the Financial Statements Annual Report 2011 Singer (Sri Lanka) PLC 185 39. Transactions with Key Management Personnel (a) Key Management Personnel includes members of the Board of Directors of the Company, its Subsidiary and Parent. Transaction with Key Management Personnel, their close family members and parties/entities in which such Key Management Personnel or their close family members have control, joint control or significant influence can be shown as follows:
2011 2010 Rs. million Rs. million (i) Transactions with Key Management Personnel or Close Family Members Deposit Kept by Key Management Personnel or their close family members at Singer Finance (Lanka) PLC. 60.3 45.8
Group Company
2011 2010 2011 2010 Rs. Rs. Rs. Rs. (ii) Compensation of Key Management Personnel Short-Term Employee Benefits 63,539,518 27,388,160 54,871,469 22,270,866 Post-Employment Benefits Paid – 7,030,000 – 7,030,000
In addition to their salaries the Company provides non-cash benefits to the Key Management Personnel and contributes to a post employment defined benefit plan on their behalf. Directors' emoluments are disclosed in Note 9 to the Financial Statements.
(iii) No transactions had taken place during the year with the parties/entities in which Key Management Personnel or their close family members have control, joint control or significant influence.
(b) The amounts receivable from or payable by above related parties as at 31st December 2011, are disclosed in Notes 18, 19.2, 20 and 34 respectively.
186 Singer (Sri Lanka) PLC Annual Report 2011 Notes to the Financial Statements Annexure : II Annual Report for the financial years ending 31st December 2010 Independent Auditors’ Report
TO THE SHAREHOLDERS OF SINGER (SRI LANKA) PLC We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the Report on the Financial Statements purposes of our audit. We therefore believe that our audit provides We have audited the accompanying financial statements of a reasonable basis for our opinion. Singer (Sri Lanka) PLC, the consolidated financial statements of the Company and its subsidiary as at that date which comprise Opinion the balance sheet as at December 31, 2010, and the income In our opinion, so far as appears from our examination, the statement, statement of changes in equity and cash flow statement Company maintained proper accounting records for the year ended for the year then ended, and a summary of significant accounting December 31, 2010 and the financial statements give a true and fair policies and other explanatory notes as set out on pages 98 to 140 view of the Company’s state of affairs as at December 31, 2010 and of the Annual Report. its profit and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards. Management’s Responsibility for the Financial Statements In our opinion, the consolidated financial statements give a true and fair view of the state of affairs as at December 31, Management is responsible for the preparation and fair presentation 2010 and the profit and cash flows for the year then ended, in of these financial statements in accordance with Sri Lanka accordance with Sri Lanka Accounting Standards, of the Company Accounting Standards. This responsibility includes: designing, and its subsidiary dealt with thereby, so far as concerns the implementing and maintaining internal control relevant to the members of the Company. preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; Report on Other Legal and Regulatory Requirements selecting and applying appropriate accounting policies; and making These financial statements also comply with the requirements of accounting estimates that are reasonable in the circumstances. Section 153 (2) to 153 (7) of the Companies Act No. 07 of 2007. 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 Chartered Accountants, misstatement. An audit includes examining, on a test basis, evidence Colombo supporting the amounts and disclosures in the financial statements. 28th February 2011 An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
Singer (Sri Lanka) PLC Annual Report 2010 97 Income Statement
Consolidated Company
Year ended 31st December 2010 2009 2010 2009 (Restated) (Restated) Note Rs. Rs. Rs. Rs.
Revenue 3 16,028,533,802 11,913,503,311 15,177,484,870 11,341,538,283
Cost of Sales (10,233,156,320) (7,281,813,332) (10,233,156,320) (7,281,813,333)
Gross Profit 5,795,377,482 4,631,689,979 4,944,328,550 4,059,724,950
Other Income 5 267,467,070 96,752,099 155,127,078 99,610,250
Selling and Administrative Expenses (3,884,069,598) (3,119,744,609) (3,546,500,255) (2,914,255,811)
Other Expenses 6 (174,471,508) (209,456,100) (167,136,767) (200,336,559)
Finance Cost 7.1 (819,353,491) (1,193,592,345) (587,671,758) (916,267,818)
Finance Income 7.2 45,128,240 85,320,937 51,452,221 113,349,832
Net Finance Cost (774,225,251) (1,108,271,408) (536,219,537) (802,917,986) Share of Profit/(Loss) of Equity Accounted Investee (Net of Income Tax) 8 (1,016,683) (891,318) – –
Value Added Tax on Financial Services (61,200,000) (42,350,000) (26,500,000) (21,100,000)
Profit before Tax 9 1,167,861,512 247,728,643 823,099,069 220,724,846
Income Tax Expense 10 (499,042,148) (114,830,101) (399,737,255) (99,648,790)
Profit for the Year 668,819,364 132,898,542 423,361,814 121,076,056
Attributable to:
Equity Holders of the Company 668,011,242 132,898,542 423,361,814 121,076,056
Non-Controlling Interest 808,122 – – –
Profit for the Year 668,819,364 132,898,542 423,361,814 121,076,056
Earnings per Share - Basic - (Rs.) 11.2 10.67 2.12 6.76 1.93 Earnings per Share Excluding the Gain on dilution of holding in Singer Finance (Lanka) Ltd. - (Rs.) 11.3 7.85 2.12 6.76 1.93 Dividend per Share (Including Proposed Final Dividend) - (Rs.) 32 4.50 – 4.50 –
The Accounting Policies and Notes on pages 102 through 140 form an integral part of these Financial Statements.
Colombo 28th February 2011
98 Singer (Sri Lanka) PLC Annual Report 2010 Balance Sheet
Consolidated Company
As at 31st December 2010 2009 2010 2009 (Restated) (Restated) Note Rs. Rs. Rs. Rs. ASSETS Non-Current Assets Property, Plant & Equipment 12 1,564,239,939 1,285,727,688 1,536,053,077 1,261,639,286 Intangible Assets 13 165,189,703 165,740,939 155,618,778 157,619,048 Investment in Subsidiaries 14 – – 400,000,000 400,000,000 Investments in Equity Accounted Investees 15 23,524,621 24,541,304 24,000,000 24,000,000 Other long-term Investments 16 17,061,300 18,489,773 17,020,000 18,448,473 Trade and Other Receivables 19.1 2,545,741,689 2,039,522,072 1,035,299,957 1,024,443,307 Deferred Tax Assets 27 114,353,256 143,053,325 114,353,256 143,053,325 4,430,110,508 3,677,075,101 3,282,345,068 3,029,203,439 Current Assets Inventories 17 2,149,041,418 1,984,919,283 2,149,041,418 1,984,919,283 Loans due from Related Parties 18 202,217,767 240,515,421 611,410,191 240,515,421 Trade and Other Receivables 19.2 5,475,744,793 4,392,707,413 3,219,839,055 2,670,710,325 Amounts due from Related Parties - Trade 20.1 6,723,621 7,074,245 953,850,294 939,892,782 Amounts due from Related Parties - Non-Trade 20.2 29,556,243 5,241,249 29,556,243 5,241,249 Marketable Securities 21 410,551,810 160,473,932 – – Cash and Cash Equivalents 22 250,573,958 385,446,050 200,402,845 361,764,748 8,524,409,610 7,176,377,593 7,164,100,046 6,203,043,808 Total Assets 12,954,520,118 10,853,452,694 10,446,445,114 9,232,247,247 Equity Stated Capital 23 626,048,050 626,048,050 626,048,050 626,048,050 Capital Reserves 24 675,290,147 412,126,906 664,542,029 404,084,718 Revenue Reserves 25 2,578,324,678 1,975,624,170 2,316,845,046 1,956,088,037 Total Equity attributable to Equity Holders of the Company 3,879,662,875 3,013,799,126 3,607,435,125 2,986,220,805 Non-Controlling Interest 224,234,379 – – – Total Equity 4,103,897,254 3,013,799,126 3,607,435,125 2,986,220,805 Non-Current Liabilities Interest Bearing Loans and Borrowings 26 1,287,290,697 763,935,865 1,265,832,925 737,632,975 Retirement Benefit Obligations 28 181,875,758 158,555,375 176,663,436 155,164,141 Deferred Tax Liabilities 27 103,466,761 14,749,401 99,339,454 – Security Deposits 403,893,567 359,515,564 403,893,567 359,515,564 Deposits from Customers 34 195,994,681 150,001,086 – – 2,172,521,464 1,446,757,291 1,945,729,382 1,252,312,680 Current Liabilities Trade and Other Payables 29 1,500,315,840 1,050,114,260 1,218,205,378 889,883,283 Deferred Revenue 30 79,308,834 57,011,584 66,283,640 49,532,150 Income Tax Payable 155,877,053 5,133,096 123,027,740 12,731,522 Dividend Payable 31 3,204,691 2,978,168 3,204,691 2,978,168 Amounts due to Related Parties - Trade 33.1 268,647,603 233,475,033 268,647,603 233,475,033 Amounts due to Related Parties - Non-Trade 33.2 53,272,425 37,104,053 53,272,425 138,910,364 Deposits from Customers 34 1,451,990,703 1,313,620,654 – – Interest Bearing Loans and Borrowings 26 3,165,484,251 3,693,459,429 3,160,639,130 3,666,203,242 6,678,101,400 6,392,896,276 4,893,260,607 4,993,713,762 Total Equity and Liabilities 12,954,520,118 10,853,452,694 10,446,445,114 9,232,247,247 The Accounting Policies and Notes on pages 102 through 140 form an integral part of these Financial Statements. I certify that the Financial Statements of the Company comply with the requirements of the Companies Act No. 07 of 2007.
Priyath Salgado Finance Director The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board by,
Hemaka Amarasuriya H.A. Pieris Director Director/Group Chief Executive Officer Colombo 28th February 2011 Singer (Sri Lanka) PLC Annual Report 2010 99 Statement of Changes in Equity
Consolidated Stated Reserve Revaluation General Retained Non-Controling Total Capital Fund Reserve Reserve Earnings Interest Note Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Balance as at 31st December 2008 as previously stated 626,048,050 3,012,962 404,084,717 1,500,000,000 420,453,045 – 2,953,598,774 Effect due to change in accounting policy on adoption of SLAS 33 (Note 39) – – – – (72,698,190) – (72,698,190) Adjusted balance as at 31st December 2008 626,048,050 3,012,962 404,084,717 1,500,000,000 347,754,855 – 2,880,900,584 Transferred to/(from) during the year – 5,029,227 – 100,000,000 (105,029,227) – – Profit for the Year – – – – 132,898,542 – 132,898,542
Balance as at 31st December 2009 626,048,050 8,042,189 404,084,717 1,600,000,000 375,624,170 – 3,013,799,126 Share Issue – – – – – 400,000,005 400,000,005 Surplus on Revaluation for the Year 12/24.2 – – 359,796,766 – – – 359,796,766 Deferred Tax effect on Revaluation 27 – – (99,339,454) – – – (99,339,454) Transferred to/(from) during the Year – 2,705,929 – 400,000,000 (402,705,929) – – Adjustment in Respect of Change in Group Holding – – – – – (176,573,748) (176,573,748) Profit for the Year – – – – 668,011,242 808,122 668,819,364 Interim Dividend - 2010 – – – – (62,604,805) – (62,604,805) Balance as at 31st December 2010 626,048,050 10,748,118 664,542,029 2,000,000,000 578,324,678 224,234,379 4,103,897,254
Company Stated Revaluation General Retained Capital Reserve Reserve Earnings Total Note Rs. Rs. Rs. Rs. Rs.
Balance as at 31st December 2008 as previously stated 626,048,050 404,084,717 1,500,000,000 373,951,178 2,904,083,945 Effect due to change in accounting policy on adoption of SLAS 33 (Note 39) – – – (38,939,197) (38,939,197) Adjusted balance as at 31st December 2008 626,048,050 404,084,717 1,500,000,000 335,011,981 2,865,144,748 Transferred to/(from) during the Year – – 100,000,000 (100,000,000) – Net Profit for the Year – – – 121,076,056 121,076,056 Balance as at 31st December 2009 626,048,050 404,084,717 1,600,000,000 356,088,037 2,986,220,804 Surplus on Revaluation for the Year 12/24.2 – 359,796,766 – – 359,796,766 Deferred Tax effect on Revaluation 27 – (99,339,454) – – (99,339,454) Transferred to/(from) during the Year – – 400,000,000 (400,000,000) – Net Profit for the Year – – – 423,361,814 423,361,814 Interim Dividend - 2010 – – – (62,604,805) (62,604,805)
Balance as at 31st December 2010 626,048,050 664,542,029 2,000,000,000 316,845,046 3,607,435,125
The Accounting Policies and Notes on pages 102 through 140 form an integral part of these Financial Statements.
Colombo 28th February 2011
100 Singer (Sri Lanka) PLC Annual Report 2010 Cash Flow Statement
Consolidated Company Year ended 31st December 2010 2009 2010 2009 (Restated) (Restated) Note Rs. Rs. Rs. Rs. Cash Flows from Operating Activities Profit before Income Tax Expense 1,167,861,512 247,728,643 825,099,069 221,724,846 Adjustments for: Depreciation on Property, Plant & Equipment 12 175,809,093 201,259,195 169,657,299 195,570,681 Share of (Profit)/Loss from Equity Accounted Investee 8 1,016,683 891,318 – – Amortisation of Intangible Assets 13 14,151,652 23,829,976 12,968,704 20,398,948 (Gain)/Loss on Disposal of Property, Plant & Equipment (1,365,846) 398,977 (1,365,846) 398,977 Gain on Disposal of Other Long-Term Investments (3,638,919) – (3,638,919) – Gain on Dilution of Holding in Subsidiary (176,573,748) – – – Interest Expense 819,353,490 1,193,593,345 587,671,758 916,267,818 Interest Income (45,128,240) (85,320,937) (51,452,221) (113,349,832) Deferred Profit on Hire Debtors 49,203,579 (232,261,629) (73,096,533) (359,051,575) Provision for Obsolete Inventory 76,047,999 2,585,883 76,047,999 2,585,883 Provision/(Reversal of Provision) for Bad and Doubtful Receivables (53,750,038) 75,946,242 (60,787,767) 85,045,073 Deferred Revenue 30 22,297,250 (22,049,408) 16,751,490 (23,519,484) Dividend Income (952,770) (528,019) (20,948,270) (10,513,619) Provision for Retiring Gratuity 28 33,812,561 33,134,160 31,981,517 32,286,418 Operating Profit before Working Capital Changes 2,079,797,867 1,438,552,091 1,510,541,888 967,189,479
(Increase)/Decrease in Inventories (240,170,134) 951,024,865 240,170,134 951,024,865 (Increase)/Decrease in Debtors falling due after one Year (615,490,859) 374,960,878 (23,580,832) 355,038,469 (Increase)/Decrease in Debtors falling due within one Year (969,219,679) 583,185,794 (402,520,245) 1,885,151,550 (Increase)/Decrease in dues from Related Parties (23,964,370) 120,407,940 (38,272,506) (812,410,597) Increase/(Decrease) in dues to Related Parties 51,330,986 (120,711,533) (50,465,369) (40,165,040) Increase in Employee Security Deposits 44,378,004 24,678,257 44,378,003 24,678,257 Increase in Customer Deposit Liabilities 184,363,644 333,974,625 – – Increase/(Decrease) in Trade and Other Payables 465,252,520 (83,202,661) 340,162,306 (105,669,023) Cash Generated from/(Used in) Operations 976,277,979 3,622,870,255 1,140,073,111 3,224,837,960 Finance Costs Paid (834,404,431) (1,214,427,785) (599,511,969) (923,945,555) Retiring Gratuity Paid 28 (10,482,222) (22,997,598) (10,482,222) (22,997,598) Income Tax Paid (330,220,218) (78,364,951) (262,740,970) (66,806,789) Net Cash from Operating Activities (198,828,892) 2,307,079,921 (267,337,950) 2,211,088,016
Cash Flows from Investing Activities Acquisition of Property, Plant & Equipment and Intangible Assets 12/13 (110,291,661) (53,068,841) (97,409,426) (46,181,235) Proceeds from Disposal of Property, Plant & Equipment 3,532,513 3,938,210 3,532,513 3,938,210 Proceeds from Sale of Other Long-Term Investments 5,067,392 – 5,067,392 – (Acquisition)/Disposal of Marketable Securities (250,077,877) 15,410,586 – – Investment in Subsidiary – – – (200,000,000) Net Cash Flows from Loans Given to Related Companies 38,297,654 (240,515,421) (370,894,770) (184,515,421) Interest Received 43,474,632 74,872,439 49,798,613 102,901,334 Dividend Received 952,770 528,019 20,948,270 10,513,619 Net Cash Flows from Investing Activities (269,044,577) (198,835,008) (388,957,408) (313,343,493)
Cash Flows from Financing Activities Proceeds from Interest Bearing Loans and Borrowings 4,086,605,327 2,359,729,000 4,086,605,327 2,359,729,000
Repayment of Interest Bearing Loans and Borrowings (4,388,652,638) (3,799,708,214) (4,361,396,454) (3,623,954,536)
Proceeds from Issuance of Shares 400,000,005 – – – Dividends Paid (62,378,282) – (62,378,282) – Net Cash Flows from Financing Activities 35,574,412 (1,439,979,214) (337,169,409) (1,264,225,536) Net Increase/(Decrease) in Cash and Cash Equivalents (432,299,058) 668,265,699 (458,788,867) 633,518,987 Cash and Cash Equivalents at the beginning of the Year 22 225,101,502 (443,164,197) 201,420,200 (432,098,787) Cash and Cash Equivalents at the end of the Year 22 (207,197,556) 225,101,502 (257,368,668) 201,420,200
The Accounting Policies and Notes on pages 102 through 140 form an integral part of these Financial Statements.
Singer (Sri Lanka) PLC Annual Report 2010 101 Notes to the Financial Statements
Note 1 Corporate Information page 102 1. Corporate Information 1.1 Reporting Entity Note 2 Significant Accounting Policies page 103 1.1.1 General Note 3 Revenue page 109 Singer (Sri Lanka) PLC is a limited liability company Note 4 Segment Information page 109 incorporated and domiciled in Sri Lanka. The Registered Office Note 5 Other Income page 110 of the Company is located at No. 320, Dr. Colvin R. De Silva Mawatha (Union Place), Colombo 2, and the principal place of Note 6 Other Expenses page 111 business is situated at the above address. Note 7 Finance Cost page 111 In the Report of the Directors and in the Financial Statements, Note 8 Share of Profits/(Losses) of Equity ‘the Company’ refers to Singer (Sri Lanka) PLC as the Holding Accounted Investee - (Net of Income Tax) page 111 Company and ‘the Group’ refers to the Consolidated Financial Note 9 Profit before Tax page 111 Statements of Singer (Sri Lanka) PLC and its Subsidiary, Singer Note 10 Income Tax Expense page 112 Finance (Lanka) Ltd. Note 11 Earnings per Share page 113 1.1.2 Companies in the Group Note 12 Property, Plant & Equipment page 114 Subsidiary Note 13 Intangible Assets page 117 A fully-owned subsidiary, Singer Finance (Lanka) Ltd., was Note 14 Investment in Subsidiary - Company page 119 incorporated on 19th April 2004 under the Companies Act No. 17 of 1982 and its commercial operations commenced on Note 15 Investments in Equity Accounted Investees page 119 8th July 2004. Note 16 Other Long-Term Investments page 121 Singer Finance (Lanka) Ltd. issued 25% of its equity holding Note 17 Inventories page 122 through Initial Public Offering and allotted shares on 22nd Note 18 Loans Due from Related Parties page 122 December 2010. Shares of Singer Finance (Lanka) Ltd. was first Note 19 Trade and other Receivables page 122 traded on 17th January 2011 at the Colombo Stock Exchange. Pursuant to the Special Resolution passed by the shareholders Note 20 Amounts due from Related Parties page 124 on 21st December 2010, name of the Subsidiary Company Note 21 Marketable Securities page 124 was changed from Singer Finance (Lanka) Ltd. to Singer Note 22 Cash and Cash Equivalents page 124 Finance (Lanka) PLC. The name change was gazetted on 18th Note 23 Stated Capital page 124 February 2011. Note 24 Capital Reserves page 125 Associates (Equity Accounted Investees) Note 25 Revenue Reserves page 125 Associate Companies of the Group, whose results have been Note 26 Interest Bearing Loans & Borrowings page 126 included in the Consolidated Financial Statements are: Note 27 Deferred Tax Assets/(Liabilities) page 130 Telshan Network (Pvt) Ltd. Reality (Lanka) Ltd. Note 28 Retirement Benefit Obligations page 132 Note 29 Trade and Other Payables page 133 All of the above companies are incorporated in Sri Lanka. Note 30 Deferred Revenue page 133 Financial Statements of all the companies in the Group are prepared for a common financial year, which ends on Note 31 Dividend Payable page 133 31st December. Note 32 Dividends page 133 Note 33 Amounts due to Related Parties page 134 1.1.3 Principal Activities and Nature of Operations Company Note 34 Deposits from Customers page 134 During the year, the principal activities of the Company were Note 35 Commitments and Contingencies - marketing domestic and industrial sewing machines, consumer Group/Company page 134 electronics, home appliances, furniture, agricultural equipment Note 36 Events Occurring after the Balance Sheet Date page 135 and personal computers and manufacturing furniture and Note 37 Related Party Transactions page 136 agricultural equipment. Note 38 Transactions with Key Management Personnel page 139 Subsidiary Note 39 Related Financial Statements page 139 Principal activities of Singer Finance (Lanka) Ltd. are financing of the sale or purchase of any goods, articles, vehicles or other items either by letting on hire, hire purchase, leasing and other methods of financing. In addition, Singer Finance (Lanka) Ltd. accepts deposits.
102 Singer (Sri Lanka) PLC Annual Report 2010 1.1.4 Parent Enterprise and Ultimate Parent Enterprise 1.2.5 Changes in Accounting Policies The Company's parent undertaking is Singer (Sri Lanka) BV. Property, Plant & Equipment The Company's ultimate parent undertaking and controlling The Group resolved to measure buildings at fair value with party is Retail Holdings NV, which is incorporated in the effect from 31st December 2010. Accordingly henceforth, Netherlands, Antilles. buildings would be stated at valuation less accumulated depreciation and accumulated impairment losses. Buildings 1.1.5 Number of Employees were measured at cost in the previous periods. Thereby, The number of employees of the Group at the end of the year buildings were stated at cost less accumulated depreciation and was 1,147 (2009 - 1,116), Company - 1,049 (2009 - 1,045). accumulated impairment losses in the previous periods.
1.1.6 Date of Authorisation of Issue Revenue Recognition - Hire Purchase/Lease and Loans The Financial Statements for the year ended 31st December 2010 The Group changed its method of recognising interest income were authorised for issue in accordance with a resolution of the on Hire purchase, Lease and Loans from sum of digit method Board of Directors on 28th February 2011. to constant periodic rate of return method keeping in line with SLAS 33.
1.2 Basis of Preparation Therefore, unearned income arising from Hire purchase, Lease 1.2.1 Statement of Compliance and Loans have been recognised as income over the term of The Financial Statements have been prepared in accordance with the contract, commencing from the month in which the first Sri Lanka Accounting Standards (SLAS), issued by The Institute of rental was due, in proportion to the declining receivable balance, Chartered Accountants of Sri Lanka (ICASL) and the requirements so as to produce a constant periodic rate of return on the net of the Companies Act No. 07 of 2007 and Sri Lanka Accounting investment outstanding. and Auditing Standards Act No. 15 of 1995. Interest income recognised based on sum of digit method for 1.2.2 Basis of Measurement the year ending 31st December 2009 have been restated in both The Financial Statements have been prepared on the historical Company and Group Financial Statements. cost basis except for certain investments and items of Property, Plant & Equipment, which are measured at fair value and 1.2.6 Foreign Currency Translation Defined Benefit Plans which are measured at the present value Transactions in foreign currencies are initially recorded at of the Retirement Benefit Obligations as explained in the the functional currency rate ruling at the date of the transaction. respective Notes to the Financial Statements. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated at the functional currency 1.2.3 Functional and Presentation Currency rate of exchange ruling at that date. Non-monetary items that The Financial Statements are presented in Sri Lankan Rupees are measured in terms of historical cost in a foreign currency which is the functional currency of the Company and its are re-translated using the exchange rates as at the dates of Subsidiary. the initial transactions. Foreign exchange differences arising on translation are recognised in profit and loss. 1.2.4 Use of Estimates and Judgements The preparation of Financial Statements in conformity with SLAS requires management to make judgements, 2. Significant Accounting Policies estimates and assumptions that affect the application of The accounting policies set out below have been consistently accounting policies and the reported amounts of assets, applied by the Group, and are consistent with those used in liabilities, income and expenses. Actual results may differ from the previous year, except as explained in Note 1.2.5, which these estimates. addresses changes in accounting policies. Certain comparative amounts have been reclassified to conform to the current Estimates and underlying assumptions are reviewed on an year’s presentation. ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision The Directors have made an assessment of the Group’s ability to affects only that period or in the period of the revision and future continue as a going concern in the foreseeable future, and they periods if the revision affects both current and future periods. do not intend either to liquidate or cease trading.
Information about significant areas of estimation uncertainty 2.1 Basis of Consolidation and critical judgements in applying accounting policies that 2.1.1 Subsidiaries have the most significant effect on the amounts recognised in Subsidiaries are entities controlled by the Group. Control exists the Financial Statements is included in the following Notes: when the Group has the power to govern the financial and 1RWH0HDVXUHPHQWRILQWDQJLEOHDVVHWV operating policies of an entity so as to obtain benefits from its 1RWH0HDVXUHPHQWRIUHWLUHPHQWEHQHILWREOLJDWLRQV activities. The Financial Statements of subsidiaries are included in 1RWH&RPPLWPHQWVDQG&RQWLQJHQFLHV the Consolidated Financial Statements from the date that control commences until the date that control ceases.
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 103 2.1.2 Associates (Equity Accounted Investees) was previously recognised as an expense. In these circumstances Associates are those entities in which the Group has significant the increase is recognised as income to the extent of the influence, but not control, over the financial and operating previous write down. policies. Significant influence is presumed to exist when the Decreases in the carrying amount on revaluation that offset Group holds between 20% to 50% of the voting power of previous increases of the same individual asset is charged another entity. Investments in associates are accounted for against revaluation reserve directly in equity. All other using the equity method (equity accounted investees) and decreases are recognised in profit and loss. are recognised initially at cost. The Consolidated Financial Statements includes the Group’s share of the income (b) Subsequent Costs and expenses and equity movements of equity accounted The cost of replacing part of an item of Property, Plant & investees, from the date that significant influence commences Equipment is recognised in the carrying amount of the item until the date that significant influence ceases. When the if it is probable that the future economic benefits embodied Group's share of losses exceeds its interest in an equity within that part will flow to the Group and its cost can be accounted investee, the carrying amount of that interest measured reliably. The carrying amount of the replaced part is is reduced to nil and the recognition of further losses is derecognised. The costs of the day-to-day servicing of Property, discontinued except to the extent that the Group has an Plant & Equipment are recognised in profit and loss as incurred. obligation or has made payments on behalf of the investee. (c) Depreciation 2.1.3 Transactions Eliminated on Consolidation Depreciation is recognised in profit and loss on a straight-line Intra-group balances and transactions, and any unrealised basis over the estimated useful lives of each part of an item of income and expenses arising from intra-group transactions are Property, Plant & Equipment. Freehold land is not depreciated. eliminated in preparing the Consolidated Financial Statements. Unrealised gains arising from transactions with equity The estimated useful lives are as follows: accounted investees are eliminated against the investment to Freehold Buildings Over 37.5 to 50 years the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but Motor Vehicles Over 05 years only to the extent that there is no evidence of impairment. Furniture, Fittings and Equipment Over 10 years Plant and Machinery Over 10 years 2.2 Assets and Bases of their Valuation EDP Equipment Over 05 years Assets classified as current assets on the Balance Sheet are cash and bank balances and those which are expected to be Improvement on Leasehold Premises Over 04 to 10 years realised in cash during the normal operating cycle or within Shop Furniture and Equipment Over 05 years one year from the reporting date whichever is shorter. Depreciation of an asset commences when the asset is 2.2.1 Property, Plant & Equipment available for use and ceases at the earlier of the date the Items of Property, Plant & Equipment are measured at cost asset is classified as held for sale and the date that the asset is or valuation less accumulated depreciation and accumulated derecognised. impairment losses. Depreciation methods, useful lives and residual values are reassessed at the reporting date. (a) Cost and Valuation Cost includes expenditure directly attributable to the acquisition (d) Derecognition of the asset. Purchased software that is integral to the An item of Property, Plant & Equipment is derecognised functionality of the related equipment is capitalised as part of upon disposal of or when no future economic benefits are that equipment. When parts of an item of Property, Plant & expected from its use or disposal. Gains and losses arising on Equipment have different useful lives, they are accounted for as derecognition of the asset are determined by comparing the separate items of Property, Plant & Equipment. proceeds from disposal with the carrying amount of Property, All items of Property, Plant & Equipment are initially recognised Plant & Equipment and are recognised net within ‘Other at cost. A revaluation is carried out when there is a substantial Income’ in profit and loss. difference between the fair value and the carrying amount of the property, and is undertaken by professionally qualified valuers. 2.2.2 Intangible Assets When items of Property, Plant & Equipment are subsequently An intangible asset is recognised if it is probable that future revalued, the entire class of such assets are revalued. economic benefits will flow to the entity and the cost of the Increases in the carrying amount on revaluation are credited to asset can be measured reliably in accordance with the revaluation reserve in shareholders' equity unless it reverses a SLAS 37 on Intangible Assets. Intangible assets with previous revaluation decrease relating to the same asset, which finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.
104 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements The useful lives of intangible assets are assessed to be either other than legal title, are classified as finance leases. Lease finite or indefinite. rentals receivable in the Balance Sheet represent total minimum lease payments due net of unearned income and provision for Intangible assets with finite lives are amortised over the useful doubtful recoveries. economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The allowances for bad and doubtful debts are based on the The amortisation period and the amortisation method for an collectibles of the receivables and a provision is made for these intangible asset with a finite useful life are reviewed at least amounts based on the period of arrears as follows: at each financial year-end. Changes in the expected useful life Hire Purchase Receivables or the expected pattern of consumption of future economic Arrears of 3 and 4 months benefits embodied in the asset is accounted for by changing 50% of debtors net of unearned carrying charges. the amortisation period or method, as appropriate, and treated as changes in accounting estimates. Amortisation Arrears of 5 months and over expense on intangible assets with finite lives is recognised 100% of debtors net of unearned carrying charges. in profit and loss on a straight-line basis over the estimated useful lives, from the date they are available for use. Singer Finance (Lanka) Ltd. Hire purchase receivable/lease receivables for motor vehicles. The estimated useful lives of intangible assets with finite lives are as follows: Arrears of 4 months and over 50% of debtors net of unearned carrying charges. The Class of Intangible Assets Useful Life Computer Software 10 years Arrears of 6 months and over 100% of debtors net of unearned carrying charges. Other Intangible Assets Externally Acquired 5 years Trade Receivables Intangible assets with indefinite useful lives are tested Arrears within 150-180 days 20% for impairment annually either individually or at the cash Arrears within 181-210 days 40% generating unit level. Such intangibles are not amortised. Arrears within 211-240 days 60% Gains or losses arising from derecognition of an intangible Arrears of 241 days and over 100% asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are 2.2.4 Investments recognised in profit and loss when the asset is derecognised. 2.2.4.1 Non-Current Investments Intangible assets with indefinite useful lives represent Trade Non-current investments are measured initially at cost. Provision Marks purchased through the effect of a business combination for diminution in value of investments is made when in the and were recorded initially at cost. Following the initial opinion of the Directors there has been a decline other than recognition of Trade Marks at cost, the carrying amount was temporary in the carrying amount of the investment. recognised after accumulated amortisation annually up to 31st December 2005. However, due to the effect of SLAS 41 - 2.2.4.2 Current Investments Impairment of Assets, the said Trade Marks were deemed Marketable Securities indefinite lived intangible assets and accordingly, the carrying Current investments are stated at lower of cost and market amount of the Trade Marks is determined after testing for value determined on an aggregate portfolio basis. impairment annually. This change is applied prospectively. An impairment loss will be recognised when the subsequent write down of the asset to fair value less cost to sell is lower 2.2.3 Trade and Other Receivables than the value previously recognised. A gain will be recognised Trade receivables are stated at the amounts they are estimated to for any subsequent increase in fair value less cost to sell of an realise net of provisions for bad and doubtful debts. asset, not exceeding the cumulative impairment loss that has Other receivables and dues from related parties are recognised been recognised. at cost, less provision for bad and doubtful receivables. 2.2.5 Inventories Assets sold to customers under fixed rate hire agreements Inventories are measured at the lower of cost and net realisable which transfer all the risks and rewards as well as the legal value, after making due allowances for obsolete and slow title at the end of such contractual period are classified as hire moving items. Net realisable value is the estimated selling price purchase receivables. Hire purchase receivable in the Balance in the ordinary course of business less the estimated cost of Sheet represents the total hire value net of unearned finance completion and selling expenses. income charges and provision for doubtful recoveries.
Assets leased to customers under agreements, which transfer substantially all the risks and rewards associated with ownership
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 105 The cost of each category of inventory is determined on the year from the reporting date. Non-current liabilities are those following basis: balances that fall due for payment later than one year from the reporting date. Raw Materials - At actual cost on first-in first-out basis. Finished Goods All known liabilities have been accounted for in preparing the (excluding factory) - Weighted average cost. Financial Statements. Finished Goods and At the cost of direct materials, direct 2.3.1 Provisions Work-in-Progress at labour and an appropriate proportion Piliyandala Factory of fixed production overheads based A provision is recognised if, as a result of a past event, the - on normal operating capacity. Group has a present legal or constructive obligation that can Goods-in-Transit - At actual cost. be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Supplies and Parts Purchase cost less issues for the period valued at a standard percentage of - selling price (requires revision). 2.3.1.1 Provisions for Warranties A provision for warranties is recognised when the underlying Repossessed Goods - Half of its weighted average cost. products or services are sold. The provision is based on historical warranty data and a weighing of all possible outcomes against Provisions for Inventory their associated probabilities. Specific provisions are made giving consideration to the condition of inventory held by the Company. Trade and Other Payables
2.2.6 Cash and Cash Equivalents Trade and other payables are stated at their cost. Cash and cash equivalents comprise cash in hand, demand Capital Commitments and Contingencies deposits and short-term highly liquid investments, readily Capital commitments and contingent liabilities of the Group are convertible to known amounts of cash and subject to disclosed in the respective Notes to the Financial Statements. insignificant risk of changes in value.
For the purpose of cash flow statement, cash and cash 2.3.2 Employee Benefits equivalents consist of cash in hand and deposits in banks net 2.3.2.1 Defined Benefit Plan of outstanding bank overdrafts. A defined benefit plan is post-employement benefit plan other than a defined contribution plan. The liability recognised in the 2.2.7 Impairment of Assets Financial Statements in respect of defined benefit plans is the The carrying amount of the Company’s non-financial assets present value of the defined benefit obligation as at the reporting other than inventories and deferred tax assets are reviewed date. The defined benefit obligation is calculated by a Qualified at each reporting date to determine whether there is an Actuary as at the reporting date using the Projected Unit Credit indication of impairment. If any such indication exists, or when (PUC) method as recommended by SLAS 16. annual impairment testing for an asset is required, then the The actuarial valuation involves making assumptions about asset's recoverable amount is estimated. discount rates, salary increment rate, mortality rate and The recoverable amount of an asset or cash-generating unit retirement age. Due to the long-term nature of his plans such is the greater of its value in use and its fair value less costs to estimates are subject to significant uncertainty. sell. In assessing value in use, the estimated future cash flows The liability is not externally funded. are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value 2.3.2.2 Defined Contribution Plans - Employees' of money and the risks specific to the asset. In determining fair Provident Fund /Mercantile Services Provident Society and value, less costs to sell, an appropriate valuation model is used. Employees' Trust Fund A defined contribution plan is a post-employement benefit An impairment loss is recognised if the carrying amount of an plan under which an entity pays fixed contributions into asset or cash-generating unit exceeds its estimated recoverable a separate entity and will have no legal or constructive amount. Impairment losses are recognised in profit and loss. obligation to pay further amounts. Employees are eligible for An impairment loss is reversed if there has been a change contributions to Employees' Provident Fund/Mercantile Services in the estimates used to determine the recoverable amount. Provident Society and Employees' Trust Fund in line with An impairment loss is reversed only to the extent that the respective Statutes and Regulations. The Company contributes asset's carrying amount does not exceed the carrying amount 12%, 12% and 3% of gross emoluments of employees to that would have been determined, net of depreciation or the Employees' Provident Fund, Mercantile Services Provident amortisation, if no impairment loss had been recognised. Society and the Employees' Trust Fund respectively and is recognised as an expense in profit and loss in the periods 2.3 Liabilities and Provisions during which services are rendered by employees. Liabilities classified as current liabilities in the Balance Sheet are those which fall due for payment on demand or within one
106 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 2.3.2.3 Short-Term Benefits (e) Service Fee Income on Hire Purchase Short-term employee benefit obligations are measured on an Service fee income is recognised over the length of hire purchase undiscounted basis and are expensed as the related service agreement on sum of digit method. In the event of early is provided. A liability is recognised for the amount expected termination of the Hire Purchase Contract or cash conversion to be paid under short-term cash bonus if the Group has a remaining deferred, service income is recognised when such present legal or constructive obligation to pay this amount contract is recognised or converted. as a result of past service provided by the employee and the obligation can be measured reliably. (f) Income on Suraksha and Extended Warranty Scheme Income is recognised over the period of contract. 2.3.3 Discontinued Operations Unrecognised income is accounted as Deferred Revenue. A discontinued operation is a component of the Group’s business that represents a separate major line of business (g) Others or geographical area of operations that has been disposed Other income is recognised on an accrual basis. of or is held for sale, or is a subsidiary acquired with a view Net gains and losses of a revenue nature on the disposal of to resale. Classification as discontinued operation occurs Property, Plant & Equipment and other non-current assets upon disposal or when the operation meets the criteria to including investments have been accounted for in profit and be classified as held for sale, if earlier. When an operation loss, having deducted from proceeds on disposal, the carrying is classified as a discontinued operation, the comparative amount of the assets and related selling expenses. Income Statement is restated as if the operation had been discontinued from the start of the comparative period. 2.4.2 Revenue Recognition Policy of Singer Finance (Lanka) Ltd. 2.4 Income Statement (a) Hire Purchase 2.4.1 Revenue Recognition The excess of aggregated contract receivables over the cost Revenue is recognised to the extent that it is probable that of the hired assets constitutes the total unearned income at the economic benefits will flow to the Company and the the commencement of a contract. The unearned income is revenue and associated costs incurred or to be incurred can recognised as income over the term of hire purchase contract be reliably measured. Revenue is measured at the fair value commencing from the month in which first rental is due, of the consideration received or receivable, net of returns and in proportion to the declining receivable balance, so as to allowances, trade discounts and turnover taxes. The following produce a constant periodic rate of return on the hirer’s net specific criteria are used for the purpose of recognition of investment outstanding on the hire purchase. revenue: (b) Lease (a) Sale of Goods (Normal Trading Transactions) The excess of aggregated contract receivables over the cost Revenue from the sale of goods is recognised when the of the leased assets constitutes the total unearned income significant risks and rewards of ownership of the goods at the commencement of a contract. The unearned income have passed to buyers, the recovery of the consideration is is recognised as income over the term of lease contract probable, the associated costs and possible return of goods commencing from the month in which first rental is due, can be estimated reliably, there is no continuing management in proportion to the declining receivable balance, so as to involvement with the goods and the amount of revenue can produce a constant periodic rate of return on the lessor’s net be measured reliably. investment outstanding on the lease outstanding.
(b) Sale of Goods (Hire Purchase Transactions) (c) Interest on Government Securities At the time of effecting hire sales, the cash sales value is Interest is accrued in profit and loss based on a receivable recognised as sales. pattern reflecting a constant periodic rate of return.
The unearned income is recognised as income over the term of (d) Commissions, Service Charges and Others hire purchase contract commencing from the month in which Commissions, service charges and others are recognised on an first rental is due, in proportion to the declining receivable accrual basis. balance, so as to produce a constant periodic rate of return on 2.4.3 Expenditure Recognition the hirer’s net investment outstanding on the hire purchase. (a) Expenses are recognised in profit and loss on the basis (c) Interest - Other of a direct association between the cost incurred and the Interest income is recognised in profit and loss as it accrues earning of specific items of income. All expenditure incurred in (taking into account the effective yield on the asset). the running of the business and in maintaining the Property, Plant & Equipment in a state of efficiency has been charged to (d) Dividends income in arriving at the profit for the year. Dividend income is recognised in profit and loss when the right to receive dividends is established.
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 107 (b) For the purpose of presentation of the Income Statement, 2.4.5 Borrowing Costs the Directors are of the opinion that ‘function of expenses Borrowing costs are recognised as an expense in the period in method’ presents fairly the elements of the Company's which they are incurred. performance and hence such presentation method is adopted. 2.4.6 Events Occurring after the Balance Sheet Date Net Finance Cost All material events occurring after the Balance Sheet date have Finance income comprises interest income on funds invested, been considered and where necessary adjustments made in and gains on translation of foreign currency. these Financial Statements. Finance cost comprises interest payable on borrowings and losses on translation of foreign currency. 2.4.7 Earnings Per Share The Group presents basic Earnings Per Share (EPS) for its 2.4.4 Taxation ordinary shares. Basic EPS is calculated by dividing the profit or Income tax expense comprises both current and deferred tax. loss attributable to ordinary shareholders of the Company by Income tax expense is recognised in profit and loss except to the weighted number of ordinary shares outstanding during the extent that it relates to items recognised directly in equity, the period. in which case it is recognised in equity. 2.4.8 Segment Reporting (a) Current Taxes A segment is a distinguishable component of the Group that The current tax is the expected tax payable on the taxable income is engaged in either providing related products or services for the year, using tax rates enacted or substantially enacted at (Business Segments) or in providing products or services within the reporting date, and any adjustment to tax payable in respect a particular economic environment (Geographical Segment) of previous years. which is subject to risk and returns that are different from those of other segments. Segmental information is presented (b) Deferred Taxation in respect of the Group’s Business or Geographical Segments. Deferred tax is recognised in respect of temporary differences The Group's primary format for segment reporting is based on between the carrying amount of assets and liabilities for business segments and is based on the Group's management financial reporting purposes and the amounts used for and internal reporting structure. taxation purposes. Segment results assets and liabilities include items directly Deferred tax liabilities are recognised for all taxable temporary attributable to a segment as well as those that can be differences except for - allocated on a reasonable basis. z temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business Segment Capital expenditure is the total cost incurred during combination and that affects neither the accounting profit the period to acquire Property, Plant & Equipment and nor taxable profit or loss; Intangible Assets other than goodwill.
z temporary differences related to investments in subsidiaries Segment information is presented in the respective Notes to to the extent that it is probable that the temporary the Financial Statements. differences will not reverse in the foreseeable future; and 2.4.9 Cash Flow Statement z taxable temporary differences arising on the initial recognition of goodwill. The cash flow statement has been prepared using the indirect method. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on 2.4.10 New Accounting Standards Issued but not tax laws that have been enacted or substantive enacted by the Effective at the Reporting Date reporting date. The Institute of Chartered Accountants of Sri Lanka issued a A deferred tax asset is recognised for unused tax losses and new volume of Sri Lanka Accounting Standards which will deductible temporary differences, to the extent that it is become applicable for annual periods beginning on or after probable that future taxable profits will be available against 1st January 2012. Accordingly, these Standards have not been which they can be utilised. The carrying amount of deferred tax applied in preparing these Financial Statements as they were assets is reviewed at each reporting date and is reduced to the not effective for the year ended 31st December 2010. extent that it is no longer probable that the related tax benefit The Company is currently in the process of evaluating the will be realised. potential effect of these Standards on its Financial Statements Tax withheld on dividend income from subsidiaries and and the impact on the adoption of these Standards have not associates is recognised as an expense in the Consolidated been quantified as at the reporting date. Income Statement at the same time as the liability to pay the related dividend is recognised.
108 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 3. Revenue Consolidated Company
For the Year Ended 2010 2009 2010 2009 Rs. Rs. Rs. Rs.
3.1 Summary
Gross Turnover 16,136,677,105 11,986,421,788 15,285,628,173 11,414,456,760 Less: Sales Taxes: Turnover Tax (108,143,303) (72,918,477) (108,143,303) (72,918,477)
16,028,533,802 11,913,503,311 15,177,484,870 11,341,538,283
3.2 Revenue
Sale of Goods 14,028,853,847 9,955,202,993 14,028,853,847 9,955,202,993
Rendering of Services 1,999,679,955 1,958,300,318 1,148,631,023 1,386,335,290
16,028,533,802 11,913,503,311 15,177,484,870 11,341,538,283
4. Segment Information
4.1 Segment Products and Services
Sewing-Related Products Domestic and Industrial Sewing Machines and General Merchandise. Consumer Electronics Televisions, Audios, VCD, DVD and Other Electronic Products. White Goods Refrigerators, Washing Machines, Deep Freezers, Bottle Coolers, Air-Conditioners and Fans. Kitchen-Related Products Table Tops, Gas Ovens, Rice Cookers, Microwave Ovens, Electric Ovens, Grinders and Blenders. Communications Computers, CDMA and Celluar Phones, Dialog Satellite Dishes. Furniture Wood and Layered Furniture, Sofa Sets and Steel Furniture. Transportation Motor Bikes and Bicycles. Agro Water Pumps, Paddy Threshers, Tractors Singer Finance (Lanka) Ltd. Leasing, Hire Purchase and Loans granted.
4.2 Segmental Analysis of Revenue is as Follows: Consolidated Company
2010 2009 2010 2009 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Sewing-Related Products 1,932,881 1,578,894 1,932,881 1,578,894
Consumer Electronics 3,601,210 2,747,551 3,601,210 2,747,551
White Goods 5,386,396 3,915,828 5,386,396 3,915,828
Kitchen-Related Products 1,049,177 716,048 1,049,177 716,048
Communications 974,595 683,785 974,595 683,785
Furniture 814,385 527,388 814,385 527,388
Transportation 764,342 760,531 764,342 760,531
Agro 654,499 411,513 654,499 411,513
Singer Finance (Lanka) Ltd. 851,049 571,965 – –
16,028,534 11,913,503 15,177,485 11,341,538
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 109 4.3 Segmental Analysis of Profit before Tax is as Follows: Consolidated Company
2010 2009 2010 2009 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
Sewing-Related Products 92,801 31,061 92,801 31,061
Consumer Electronics 246,501 62,084 246,501 62,084
White Goods 261,601 71,230 261,601 71,230
Kitchen-Related Products 68,552 12,808 68,552 12,808
Communications 42,011 11,017 42,011 11,017
Furniture 40,192 8,529 40,192 8,529
Transportation 18,826 5,840 18,826 5,840
Agro 30,028 8,642 30,028 8,642
Singer Finance (Lanka) Ltd. 187,201 36,881 – –
Segment Result 987,713 248,092 800,512 211,211
Gain on Disposal of Other Investment 3,639 – 3,639 –
Dividend from Associates/Subsidiary 953 528 18,948 9,514
Gain on Dilution of Shares in Singer Finance (Lanka) Ltd. 176,574 – – –
Share of Profit on Equity Accounted Investees (1,017) (891) – –
Profit before Tax 1,167,862 247,729 823,099 220,725
4.4 There are no separately distinguishable assets and liabilities for the above segments.
5. Other Income Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Dividend Income - Quoted 120,270 528,019 115,770 513,619
- Unquoted 832,500 – 18,832,500 9,000,000
Gain/(Loss) on Disposal of Property, Plant & Equipment 1,365,846 (398,977) 1,365,846 (398,977)
Miscellaneous Income 42,557,520 62,178,197 14,982,221 17,928,510
Service Fee Income - Singer Finance (Lanka) Ltd. – – 73,813,555 38,122,238
Income from Financial Services 42,378,267 34,444,860 42,378,267 34,444,860
Gain on Dilution of Holding in Singer Finance (Lanka) Ltd. (Note 5.1) 176,573,748 – – –
Gain on Disposal of Other Investments (Note 16.3) 3,638,919 – 3,638,919 –
267,467,070 96,752,099 155,127,078 99,610,250
5.1 Subsidiary Company Singer Finance (Lanka) Ltd. issued 26,666,667 ordinary shares at Rs. 15/- per share increasing stated capital by Rs. 400 million. IPO shares were allotted on 22nd December 2010. Due to this allotment of shares, Group holding percentage on Singer Finance (Lanka) Ltd. decreased to 75% from 100% with effect from 22nd December 2010. Gain on Dilution resulting from decrease in Group holding percentage from 100% to 75% in Singer Finance (Lanka) Ltd. was accounted in the Consolidated Financial Statements. The Gain on Dilution of Holding in Singer Finance (Lanka) Ltd. is calculated as below:
Rs. Stated Capital of Singer Finance (Lanka) Ltd. 800,000,005
Investment of Singer (Sri Lanka) PLC 400,000,000 Net Asset Value of Singer Finance (Lanka) Ltd. on the date of allotment, 22nd December 2010 226,426,257
Gain on Dilution 176,573,748
110 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 6. Other Expenses Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Depreciation on Property, Plant & Equipment (Note 12.9) 160,319,856 185,626,124 154,168,063 179,937,611
Amortisation of Intangible Assets with Finite Useful Lives 14,151,652 23,829,976 12,968,704 20,398,948
174,471,508 209,456,100 167,136,767 200,336,559
7. Net Finance Cost
7.1 Finance Cost
Interest on Overdrafts and Loans 545,848,228 893,762,997 542,161,113 875,180,976
Interest on Security Deposits 39,319,918 46,566,856 34,202,876 35,347,269
Interest on Customer Deposits 222,877,576 247,522,919 – –
Interest on Related Party Payables 11,307,769 5,084,918 11,307,769 5,084,918
Loss on Translation of Foreign Currency – 654,655 – 654,655
819,353,491 1,193,592,345 587,671,758 916,267,818
7.2 Finance Income
Interest Income - Related Parties 36,122,289 27,052,723 88,847,850 76,634,009
- Others 7,352,343 58,268,214 (39,049,237) 36,715,823
Gain on Translation of Foreign Currency 1,653,608 – 1,653,608 –
45,128,240 85,320,937 51,452,221 113,349,832
Net Finance Cost 774,225,251 1,108,271,408 536,219,537 802,917,986
8. Share of Profit/(Loss) of Equity Accounted Investee - (Net of Income Tax) Consolidated
2010 2009 Rs. Rs. Share of Profit/(Loss) Share of Tax Net Profit/(Loss) Net Profit/(Loss)
Reality (Lanka) Ltd. (420,245) (596,438) (1,016,683) (891,318)
(420,245) (596,438) (1,016,683) (891,318)
9. Profit before Tax Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Stated after Charging all Expenses including the following: Executive Directors’ Emoluments 27,388,160 21,815,139 22,270,866 17,524,089
Non-Executive Directors’ Fees 5,310,000 3,810,000 4,185,000 2,685,000
Auditors' Remuneration - Statutory Audit 1,550,000 1,373,924 1,080,000 975,000
- Audit-Related Services 773,500 586,200 468,500 425,000
- Non-Audit Services 1,300,000 – 1,300,000 –
Provision for Bad and Doubtful Receivables 132,410,289 134,220,403 108,096,385 92,410,414
Bad Debts Written off 179,560,645 47,197,423 168,884,152 7,345,514
Provision/(Reversal of Provision) for Obsolete Inventory 76,047,999 2,585,883 76,047,999 2,585,883
Personnel Cost (Note 9.1) 1,853,225,295 1,577,755,377 1,782,072,888 1,470,621,608
Operating Lease Rentals 311,930,856 287,444,159 303,681,713 282,784,559
Donations 355,126 210,744 355,126 210,744
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 111 9.1 Personnel Cost Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Staff Cost 1,668,937,935 1,391,604,825 1,604,772,284 1,289,338,359
Voluntary Retirement Scheme 6,853,947 24,673,044 6,853,947 24,673,044
Defined Benefit Plan Costs - Retiring Gratuity 33,812,560 33,134,160 31,981,517 32,286,418
Defined Contribution Plan Costs - EPF, ETF and MSPS 143,620,853 128,343,348 138,465,140 124,323,787
1,853,225,295 1,577,755,377 1,782,072,888 1,470,621,608
10. Income Tax Expense Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Current Income Tax Expense Current Tax Expense on Ordinary Activities for the Year - Singer (Sri Lanka) PLC (Note 10.1) 443,567,628 163,764,743 365,307,497 149,003,715
(Over)/Under Provision in respect of Previous Year 35,396,548 5,174,202 5,729,691 (2,782,363) Tax on Dividend Income
WHT on Dividend Received from Singer Finance (Lanka) Ltd. 2,000,000 1,000,000 – –
480,964,176 169,938,945 371,037,188 146,221,352
Deferred Tax
Expense/(Income) (Note 10.2) 18,077,973 (55,108,845) 28,700,067 (46,572,562)
499,042,148 114,830,101 399,737,255 99,648,790
10.1 Reconciliation between Current Tax Expense and the Product of Accounting Profit Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Profit before Tax 1,167,861,512 247,728,642 823,099,069 220,724,846
Share of (Profit)/Loss of Associates 1,016,683 891,318 – –
Intra Group Adjustment 196,573,748 10,000,000 – –
Aggregate Accounting Profit 1,168,878,195 248,619,960 823,099,069 220,724,846
Aggregate Disallowable Expenses 586,503,028 652,875,976 541,205,741 398,658,576
Aggregate Tax Deductible Expenses (305,608,813) (429,276,075) (313,406,581) (190,337,929)
Income not Liable for Tax (201,165,437) (10,000,000) (22,587,189) (9,000,000)
1,248,606,973 462,219,861 1,028,311,040 420,045,493
Add: Tax Loss of Subsidiary – – – –
Taxable Profit 1,248,606,973 462,219,861 1,028,311,040 420,045,493
Income Tax at 35% (2009 - 35%) 437,012,441 161,776,951 359,908,864 147,015,923
Social Responsibility Levy 6,555,187 1,987,792 5,398,633 1,987,792
Current Income Tax Expense 443,567,628 163,764,743 365,307,497 149,003,715
The Group tax expense is based on the taxable profit of each Company in the Group. Singer (Sri Lanka) PLC is liable to Income Tax at 35% on taxable profit with effect from 1st April 2006 and an additional 1.5% Social Responsibility Levy on Tax is payable with effect from 1st April 2008. (From 1st April 2006 to 31st March 2008 was 1% as tax payable.)
112 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 10.2 Deferred Tax Expense/(Income) Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs. Deferred Tax Charge/(Credit) arising due to Origination and Reversal of Temporary Differences (10,532,694) (55,108,845) 89,400 (46,572,562)
Adjustment due to Change in Tax Rate 28,610,667 – 28,610,667 –
18,077,973 (55,108,845) 28,700,067 (46,572,562)
10.3 Deferred Tax has been computed using the enacted tax rate of 28%.
11. Earnings Per Share 11.1 Basic Earnings per Share is calculated by dividing the profit for the year attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
11.2 The following reflects the income and share data used in the Basic Earnings per Share computations: Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Amounts used as the Numerator
Profit for the Year 668,819,364 132,898,542 423,361,814 121,076,056 Profit Attributable to Ordinary Shareholders for Basic Earnings per Share 668,011,242 132,898,542 423,361,814 121,076,056
Number of Ordinary Shares Used as Denominator Weighted Average Number of Ordinary Shares in Issue Applicable to Basic Earnings per Share 62,604,805 62,604,805 62,604,805 62,604,805
Basic Earnings per Share (Rs.) 10.67 2.12 6.76 1.93
11.3 The following reflects the Income and Share data used in the Earnings per Share excluding the Gain on Dilution of Equity holding in Singer Finance (Lanka) Ltd.
Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Amounts used as the Numerator Profit for the Year Excluding the Gain on Dilution of Equity Holding in Singer Finance (Lanka) Ltd. 492,245,616 132,898,542 423,361,814 121,076,056 Profit Attributable to Ordinary Shareholders for Earnings per Share Excluding the Gain on Dilution of Equity Holding in Singer Finance (Lanka) Ltd. 491,437,494 132,898,542 423,361,814 121,076,056
Number of Ordinary Shares Used as Denominators Weighted Average Number of Ordinary Shares in Issue Applicable to Basic Earnings per Share 62,604,805 62,604,805 62,604,805 62,604,805 Earnings per Share excluding the Gain on Dilution of Shares in Singer Finance (Lanka) Ltd. (Rs.) 7.85 2.12 6.76 1.93
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 113 12. Property, Plant & Equipment 12.1 Gross Carrying Amounts - Consolidated
Balance Additions/ Increase/(Decrease) Disposals/ Balance as at Transfers in Revaluation Transfers as at 01.01.2010 31.12.2010 Rs. Rs. Rs. Rs. Rs.
At Cost
Freehold Building 271,063,314 2,251,379 – 273,314,693 –
Motor Vehicles 169,825,467 16,113,500 – 3,193,334 182,745,633
Furniture and Equipment 175,929,014 3,998,612 – – 179,927,626
Plant and Machinery 154,526,061 14,628,661 – – 169,154,722
Culinary School Equipment 75,814 – – – 75,814
E.D.P. Equipment 255,983,550 11,796,850 – 740,250 267,040,150
Shop Furniture 91,647,056 6,844,994 – – 98,492,050
Shop Equipment 187,231,967 9,542,593 – – 196,774,560
Improvements on Leasehold Premises 370,923,781 31,514,657 – – 402,438,438
1,677,206,024 96,691,246 – 277,248,277 1,496,648,993
At Valuation
Freehold Land 507,423,500 – 5,013,000 – 512,436,500
Freehold Building 193,075,552 354,783,766 – 547,859,318
507,423,500 193,075,552 359,796,766 – 1,060,295,818
Total Gross Carrying Amount 2,184,629,523 289,766,798 359,796,766 277,248,277 2,556,944,811
12.2 Depreciation and Impairment Losses
Balance Charge for Disposals/ Balance as at the Year/ Transfers as at 01.01.2010 Transfers 31.12.2010 Rs. Rs. Rs. Rs.
Freehold Building 74,668,421 5,570,720 80,239,141 –
Motor Vehicles 88,886,945 11,157,051 1,050,000 98,993,996
Furniture and Equipment 99,252,206 12,787,863 – 112,040,069
Plant and Machinery 89,156,211 9,993,709 – 99,149,920
Culinary School Equipment 75,814 – – 75,814
E.D.P. Equipment 173,767,979 29,460,051 716,917 202,511,114
Shop Furniture 50,080,962 15,443,450 – 65,524,412
Shop Equipment 105,591,801 31,666,288 – 137,258,089
Improvements on Leasehold Premises 217,421,497 59,729,960 – 277,151,458
Total Depreciation and Impairment Losses 898,901,836 175,809,093 82,006,058 992,704,872
12.3 Carrying Amounts Group 2010 2009 Rs. Rs.
At Cost 503,944,121 778,304,188
At Valuation 1,060,295,818 507,423,500
Total Carrying Amount of Property, Plant & Equipment 1,564,239,939 1,285,727,688
114 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 12.4 During the financial year, the Group acquired Property, Plant & Equipment to the aggregate value of Rs. 96,691,246/- (2009 - Rs. 46,246,122/-) on cash basis.
12.5 Property, Plant & Equipment includes fully-depreciated assets having a gross carrying amount of Rs. 458,201,081/- (2009 - Rs. 337,591,579/-).
12.6 Lands & buildings were revalued during the financial year 2010 by Messrs Chulananda Wellappili, an Independent Valuer. The results of such revaluation were incorporated in these Financial Statements from its effective date which is 31st December 2010. Such assets were valued on an open market value for existing use basis. The surplus arising from the revaluation was transferred to a revaluation reserve.
12.7 Cost of the revalued land as at 31st December 2010 is Rs. 103,338,782/- (2009 - Rs. 103,338,782/-).
12.8 Carrying amount of the revalued buildings as at 31st December 2010 is estimated at Rs. 273,314,693/- (2009 - Rs. 271,063,314/-).
12.9 Depreciation charge for the year is included in the following line items in the Income Statement.
2010 2009 Rs. Rs.
Cost of Sales 15,489,237 15,633,071 Other Expenses Excluding Amortisation of Software Including Externally Accrued Intangible Assets 160,319,856 185,626,124
175,809,093 201,259,195
12.10 Gross Carrying Amounts - Company
Balance Additions/ Increase/(Decrease) Disposals/ Balance as at Transfers/ in Revaluation Transfers as at 01.01.2010 31.12.2010 Rs. Rs. Rs. Rs. Rs.
At Cost
Freehold Building 271,063,314 2,251,379 – 273,314,693 –
Motor Vehicles 166,024,440 16,113,500 – 3,193,334 178,944,606
Furniture and Equipment 166,591,865 1,379,583 – – 167,971,448
Plant and Machinery 154,526,061 14,628,661 – – 169,154,722
Culinary School Equipment 75,814 – – – 75,814
E.D.P. Equipment 247,103,388 10,478,473 – 740,250 256,841,611
Shop Furniture 91,647,056 6,844,994 – – 98,492,050
Shop Equipment 187,231,967 9,542,593 – – 196,774,560
Improvements on Leasehold Premises 352,742,816 25,201,809 – – 377,944,625
1,637,006,721 86,440,992 – 277,248,277 1,446,199,436
At Valuation
Freehold Land 507,423,500 – 5,013,000 – 512,436,500
Freehold Building – 193,075,552 354,783,766 – 547,859,318
507,423,500 193,075,552 359,796,766 – 1,060,295,818
Total Gross Carrying Amount 2,144,430,221 284,529,544 359,796,766 277,248,277 2,506,495,254
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 115 12.11 Depreciation and Impairment Losses
Balance Charge for Increase/ Disposals/ Balance as at the Year/ (Decrease) Transfers as at 01.01.2010 Transfers in Revaluation 31.12.2010 Rs. Rs. Rs. Rs. Rs.
Freehold Building 74,668,421 5,570,720 – 80,239,141 –
Motor Vehicles 88,466,705 10,796,846 – 1,050,000 98,213,551
Furniture and Equipment 96,419,691 11,752,850 – – 108,172,541
Plant and Machinery 89,156,210 9,993,709 – – 99,149,919
Culinary School Equipment 75,814 – – – 75,814
E.D.P. Equipment 169,005,426 28,105,063 – 716,917 196,393,572
Shop Furniture 50,080,962 15,443,450 – – 65,524,412
Shop Equipment 105,591,802 31,666,288 – – 137,258,090
Improvements on Leasehold Premises 209,325,903 56,328,373 – – 265,654,276
Total Depreciation and Impairment Losses 882,790,935 169,657,299 – 82,006,058 970,442,177
12.12 Carrying Amounts
2010 2009 Rs. Rs.
At Cost 475,757,259 754,215,786
At Valuation 1,060,295,818 507,423,500
Total Carrying Amount of Property, Plant & Equipment 1,536,053,077 1,261,639,286
12.13 During the financial year, the Company acquired Property, Plant & Equipment to the aggregate value of Rs. 86,440,992/- (2009 - Rs. 42,536,009/-) on cash basis.
12.14 Property, Plant & Equipment include fully-depreciated assets having a gross carrying amount of Rs. 446,831,598/- (2009 - Rs. 332,387,916/-).
12.15 Lands and Buildings were revalued during the financial year 2010 by Messrs Chulananda Wellappili, an Independent Valuer. The results of such revaluation were incorporated in these Financial Statements from its effective date which is 31st December 2010. Such assets were valued on an open market value for existing use basis. The surplus arising from the revaluation was transferred to a revaluation reserve.
12.16 Cost of revalued land as at 31st December 2010 is Rs. 103,338,782/- (2009 - Rs. 103,338,782/-).
12.17 Carrying amount of the revalued buildings as at 31st December 2010 is Rs. 273,314,693/- (2009 - Rs. 271,063,314/-).
12.18 Depreciation charge for the year is included in the following line items in the Income Statement.
2010 2009 Rs. Rs.
Cost of Sales 15,489,236 15,633,071 Other Expenses Excluding Amortisation of Software and Externally Accrued Intangible Assets 154,168,063 179,937,611
169,657,299 195,570,682
116 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 13. Intangible Assets Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
13.1 Trade Marks Summary Cost
As at the beginning of the Year 79,762,500 79,762,500 79,762,500 79,762,500
As at the end of the Year 79,762,500 79,762,500 79,762,500 79,762,500
Less: Accumulated Impairment Loss – – – –
Net Carrying Amount 79,762,500 79,762,500 79,762,500 79,762,500
13.2 Software Summary Cost
As at the beginning of the Year 99,501,081 83,585,162 80,500,706 67,762,281
Acquired/Incurred during the Year (Notes 13.8 and 13.9) 13,600,416 15,915,919 10,968,434 12,738,425
As at the end of the Year 113,101,497 99,501,081 91,469,140 80,500,706
Amortisation
As at the beginning of the Year 39,122,642 21,692,666 28,244,158 14,245,210
Amortisation Charge for the Year 7,751,659 17,429,976 6,568,711 13,998,948
As at the end of the Year 46,874,301 39,122,642 34,812,869 28,244,158
Carrying Amount As at the beginning of the Year
As at the end of the Year 60,378,439 61,892,496 52,256,548 53,517,071
66,227,196 60,378,439 56,656,271 52,256,548
13.3 Software Underdevelopment Cost As at the beginning of the Year
Acquired/Incurred during the Year – 9,093,200 – 9,093,200
Capitalised during the Year – – – –
As at the end of the Year – (9,093,200) – (9,093,200)
– – – –
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 117 13.4 Other Intangible Assets Externally Acquired Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Cost
As at the beginning of the Year 32,000,000 32,000,000 32,000,000 32,000,000
Acquired/Incurred during the Year – – – –
Capitalised during the Year – – – –
As at the end of the Year 32,000,000 32,000,000 32,000,000 32,000,000
Amortisation
As at the beginning of the Year 6,400,000 – 6,400,000 –
Amortisation Charge for the Year 6,399,993 6,400,000 6,399,993 6,400,000
As at the end of the Year 12,799,993 6,400,000 12,799,993 6,400,000
Carrying Amount
As at the beginning of the Year 25,600,000 32,000,000 25,600,000 32,000,000
As at the end of the Year 19,200,007 25,600,000 19,200,007 25,600,000
Total Net Carrying Amount 165,189,703 165,740,939 155,618,778 157,619,048
13.5 SISIL Trademark The Company had acquired the ‘SISIL’ trademark in December 2000, amounting to Rs. 55 million. The carrying amount as at 31st December 2010 is Rs. 41,250,000/-. The Company had initially recorded the ‘SISIL’ trademark at cost and amortised over the determined useful life. The management is of the opinion that the aforementioned trademark has an indefinite useful life as their associated brand awareness and recognition has existed over 30 years and the Company intends to utilise the said trademark for the foreseeable future. There are no legal, regulatory, contractual, competitive, economic or other factors that may limit its useful life and accordingly, the carrying amount of this trademark is determined after testing for impairment annually. Following assumptions are made to test for any impairment as at 31st December 2010.
Annual Sales Growth for the Next Five Years 12%
Gross Margin 25%
Discount Rate 12%
Indefinite Growth Rate after Year 2014 3%
13.6 UNIC Trademark The Company had acquired the ‘UNIC’ trademark in 2006, amounting to Rs. 38,512,500/-. This assets are now carried at cost subject to annual impairment test and carrying amount as at 31st December 2010 is Rs. 38,512,500/-. This trademark is also considered to have an indefinite useful life due to the factors mentioned in the preceding paragraph and accordingly, the carrying amount of this trademark is determined after testing for impairment annually. Following assumptions are made to test for impairment as at 31st December 2010.
Annual Sales Growth for the Next Five Years
Sales Gross Margin
Year 2011 20% 28%
Year 2012 20% 28%
Year 2013 and 2014 18% 26% Year 2015 - ơ 15% 25% Gross Margin 28% –
Discount Rate 12% –
Indefinite Growth Rate after Year 2014 2% –
118 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 13.7 The Company took over the showrooms, retail operation of the Hayleys Electronic Retail Ltd. from 2nd January 2008 and Agencies of Phillips and Kenwood from Hayleys Electronic Retail Ltd. for Rs. 32 million. The entire purchase consideration is treated as Goodwill, and is amortised over the determined useful life of 5 years commencing from the period beginning 1st January 2009.
13.8 The subsidiary had acquired the software which is categorised as Intangible Assets, amounting to Rs. 2,631,982/-. It is amortised over 5 years, commencing from the date of effective use.
13.9 The Company on 12th February 2004, signed an agreement with IFS R&D Ltd. to implement a Software Solution System at a cost of US$ 850,000 (Rs. 84 million approximately) and is in a process of implementation. During the year, Rs. 10,968,434/- (2009 - Rs. 9,093,200/-) has been capitalised.
14. Investment in Subsidiary - Company Carrying Director's Carrying Director's Value Valuation Value Valuation 2010 2010 2009 2009 Country of No of Shares (Restated) Incorporation 2010 2009 Rs. Rs Rs. Rs.
Singer Finance (Lanka) Ltd. Sri Lanka 80,000,000 80,000,000
Investment on 1st January 400,000,000 – 200,000,000 –
Investments made during the Year – – 200,000,000 –
Carrying amount as at 31st December 400,000,000 897,000,000 400,000,000 480,000,000
14.1 Singer Finance (Lanka) Ltd. started trading its shares on 17th January 2011 at Colombo Stock Exchange after allotting on 22nd December 2010. In the absence of active market trading as at 31st December 2010, market value of Singer Finance (Lanka) Ltd. is not available. Hence, Directors valued Singer Finance (Lanka) Ltd. at its Net Assets Value as at 31st December 2010 of Rs. 897 million.
15. Investments in Equity Accounted Investees 15.1 Investment in Equity Accounted Investees - Consolidated
Share of Profit/(Loss) Consolidated Net of Consolidated Carrying Dividends Carrying Holding Amount Received for Amount % 2010 the Year 2009 2010 2009 Rs. Rs. Rs.
Non-Quoted
Reality (Lanka) Ltd. (Note 15.2) 40 40 23,524,621 (1,016,683) 24,541,304 (Directors' Valuation as at 31.12.2010 Rs. 23.5 million 2009 - 24.5 million)
Telshan Network (Pvt) Ltd. 23.56 23.56 – –– (Directors' Valuation as at 31.12.2010 Rs. 10 million 2009 - Rs. 10 million) (Note 15.6)
Total Non-Quoted Investments in Equity Accounted Investees 23,524,621 24,541,304
Net Carrying Amount of Investments in Equity Accounted Investees 23,524,621 24,541,304
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 119 Consolidated Consolidated Balance Balance as at as at 31.12.2010 31.12.2009 Rs. Rs.
15.2 Share of Equity Accounted Investee Retained Profit Reality (Lanka) Ltd.
Balance Brought Forward 541,304 1,432,622
Current Year Share of Profit/(Loss) (1,016,683) (891,318)
Deduct: Dividends Received during the Year-Gross – –
Current Year's Retained Profit/(Loss) (1,016,683) (891,318)
(475,379) 541,304
Total Share of Equity Accounted Investee Retained Profits (475,379) 541,304
Total Share of Equity Accounted Investee Revaluation Surplus – –
Cost of Equity Accounted Investee (Note 15.3) 24,000,000 24,000,000
Total Carrying Amount of Investment in Equity Accounted Investee 23,524,621 24,541,304
15.3 Movement of Investment - Cost
Consolidated Increase/ Consolidated Balance as at (Decrease) Balance as at 01.01.2010 in Investments 31.12.2010 Rs. Rs. Rs.
Reality (Lanka) Ltd. 24,000,000 – 24,000,000
Telshan Network (Pvt) Ltd. (Note 15.6) – – –
24,000,000 – 24,000,000
15.4 Summarised Financial Information of Equity Accounted Investee
Non- Non- Current Current Total Current Current Total Profit/ In thousands of Rs. Ownership Assets Assets Assets Liabilities Liabilities Liabilities Revenues Expenses (Loss) 2009
Reality (Lanka) Ltd. (Associate) 40% 5,472 177,457 182,930 121,576 – 121,576 3,600 (5,828) (2,228)
2010
Reality (Lanka) Ltd. (Associate) 40% 9,106 178,785 187,891 129,080 – 129,080 3,600 (6,142) (2,542)
15.5 Investment in Equity Accounted Investees - Company
Carrying Market Value/ Carrying Market Value/ Amount Directors’ Amount Directors’ No. of Shares 2010 Valuation 2009 Valuation 2010 2009 Rs. Rs. Rs. Rs.
Non-Quoted
Telshan Network (Pvt) Ltd. (Note 15.6) 2,000,000 2,000,000 –– ––
Reality (Lanka) Ltd. 2,400,000 2,400,000 24,000,000 24,000,000 24,000,000 24,000,000 Total Investments in Non-Quoted Associate Equity Securities 24,000,000 24,000,000 24,000,000 24,000,000 Net Carrying Amount of Investment in Equity Accounted Investees 24,000,000 24,000,000 24,000,000 24,000,000
15.6 Investment in Telshan Network (Pvt) Ltd. amounting to Rs. 20,000,000/- had been written off since it carries negative net assets position.
120 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 16. Other Long-Term Investments 16.1 Consolidated Investments in Equity Securities - Non-Current
Carrying Market Value/ Carrying Market Value/ Amount Directors’ Amount Directors’ No. of Shares 2010 Valuation 2009 Valuation 2010 2009 Rs. Rs. Rs. Rs.
(a) Quoted (Marketable Equity Securities) Investments with Related Parties
Regnis (Lanka) PLC (Note 16.3) – 42,795 – – 1,428,473 2,856,566 Total Investments in Quoted Marketable Equity Securities – – 1,428,473 2,856,566
(b) Non-Quoted
Equity Investment Lanka Ltd. 1,665,000 1,665,000 17,020,000 18,683,790 17,020,000 18,683,790
Credit Information Bureau of Sri Lanka 100 100 41,300 41,300 41,300 41,300 Total Investments in Non-Quoted Equity Securities 17,061,300 18,725,090 17,061,300 18,725,090 Total Net Carrying Amount of Other Investments - Non-Current 17,061,300 18,725,090 18,489,773 20,565,275
16.2 Company Investments in Equity Securities - Non-Current
Carrying Market Value/ Carrying Market Value/ Amount Directors’ Amount Directors’ No. of Shares 2010 Valuation 2009 Valuation 2010 2009 Rs. Rs. Rs. Rs.
(a) Quoted (Marketable Equity Securities) Investments with Related Parties
Regnis (Lanka) PLC – 42,795 – – 1,428,473 2,856,566 Total Investments in Quoted Equity Securities – – 1,428,473 2,856,566
(b) Non-Quoted
Equity Investment Lanka Ltd. 1,665,000 1,665,000 17,020,000 18,683,790 17,020,000 18,683,790 Total Investments in Non-Quoted Equity Securities 17,020,000 18,683,790 17,020,000 18,683,790 Total Net Carrying Amount of Other Investments - Non-Current 17,020,000 18,683,790 18,448,473 21,540,356
16.3 Singer (Sri Lanka) PLC sold the entire 42,795 shares of Regnis (Lanka) PLC for Rs. 5,067,392/-. The purchase consideration of such sold shares was Rs. 1,428,473/-. The resulting gain on disposal of Other Long-Term Investments amounting to Rs. 3,638,919/- is recognised to the Consolidated and Company Income Statements under Other Income.
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 121 17. Inventories Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Raw Materials 104,156,594 86,233,313 104,156,594 86,233,313
Work-in-Progress 23,315,632 21,894,175 23,315,632 21,894,175
Finished Goods 1,824,856,499 1,635,240,695 1,824,856,499 1,635,240,695
Supplies and Parts 224,440,896 226,990,131 224,440,896 226,990,131
Goods-in-Transit 133,305,325 90,066,197 133,305,325 90,066,197
2,310,074,946 2,060,424,511 2,310,074,946 2,060,424,511
Less: Provision for Inventory (148,656,924) (72,608,925) (148,656,924) (72,608,925)
Consignment Inventory (12,376,604) (2,896,303) (12,376,604) (2,896,303)
Total Inventories 2,149,041,418 1,984,919,283 2,149,041,418 1,984,919,283
18. Loans Due from Related Parties Consolidated Company
2010 2009 2010 2009 Relationship Rs. Rs. Rs. Rs.
Regnis (Lanka) PLC Affiliate Company 70,000,000 130,000,000 70,000,000 130,000,000
Reality Lanka Ltd. Associate Company 102,217,767 110,515,421 102,217,767 110,515,421
Singer Industries (Ceylon) PLC Affiliate Company 30,000,000 – 30,000,000 –
Singer Finance (Lanka) Ltd. Subsidiary – – 409,192,424 –
202,217,767 240,515,421 611,410,191 240,515,421
18.1 The Management intends to recover the above loans within one year from the Balance Sheet date. Interest is charged at the rate of 1% above the Company’s effective rate. The aforesaid loans are not secured.
19. Trade and Other Receivables 19.1 Non-Current Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Hire Debtors 1,909,741,950 1,575,178,134 686,833,953 830,929,531 Less: Deferred Profit on Hire Sales (353,520,847) (260,169,101) (133,932,621) (121,208,435) 1,003,319,771 1,315,009,033 552,901,332 709,721,096
Lease Rental Receivables Gross Instalment in Lease 404,145,149 284,467,870 – – Rental Received in Advance (1,429,770) (3,190,141) – – 402,715,379 281,277,729 Unearned Income (75,136,106) (51,593,876) – – 327,579,273 229,683,854 – –
Loan Debtors Consumer and Personal Loans 178,055,108 191,741,120 Rental Received in Advance (138,270) (990,131) Less: Unearned Loan Interest Income (20,778,524) (28,401,255) 157,138,314 162,349,734 – –
Other Receivables 344,221,130 211,302,704 344,221,130 211,302,704 Loans to Employees (Note 19.3) 160,581,869 121,176,748 138,177,495 103,419,507 504,802,999 332,479,452 482,398,625 314,722,211 2,545,741,689 2,039,522,072 1,035,299,957 1,024,443,307
122 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
19.2 Current Hire Debtors 3,273,885,461 2,778,837,501 2,373,187,515 2,161,103,544 Rental Received in Advance (440,561) (1,025,946) – – Less: Deferred Profit on Hire Sales (681,332,711) (785,117,848) (392,573,796) (478,394,515) Provision for Doubtful Debts (34,127,964) (87,585,242) (26,448,014) (83,091,051) 2,557,984,224 1,905,108,465 1,954,165,705 1,599,617,978
Lease Rental Receivables Gross Instalment in Lease 335,953,903 277,881,823 – – Unearned Income (103,526,578) (86,753,413) – – Provision for Doubtful Debts (7,285,731) (5,612,178) – – 225,141,595 185,516,231 – –
Loan Debtors Consumer and Personal Loans 1,567,955,974 1,397,434,571 – – Less: Unearned Loan Interest Income (255,150,429) (228,206,123) – – FD Loans 45,548,790 34,135,487 – – Net Receivable 1,358,354,335 1,203,363,936 – – Less: Provision for Bad & Doubtful Debts (18,020,195) (26,293,430) – – 1,340,334,139 1,177,070,506 – –
Other Debtors Trade Receivables 718,285,506 517,969,355 718,285,506 517,969,355 Provision for Doubtful Debts (36,144,066) (18,927,546) (36,144,066) (18,927,546) Advance and Other Receivables 517,278,646 750,447,002 425,063,016 701,726,980 Provision for Doubtful Debts (266,426,651) (277,336,249) (249,723,027) (271,084,277) Shipping Guarantees 4,359,274 2,573,000 4,359,274 2,573,000 Prepayments 338,478,313 48,666,492 331,257,829 42,751,785 Interest Receivable from Reality Lanka Ltd. 17,837,118 10,448,498 17,837,118 10,448,498 Loans to Employees (Note 19.3) 58,616,695 91,171,659 54,737,700 85,634,552 1,352,284,836 1,125,012,211 1,265,673,350 1,071,092,347 5,475,744,793 4,392,707,413 3,219,839,055 2,670,710,325
19.3 Loans to Company Employees Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Movement
Balance as at the beginning of the Year 198,763,363 231,470,736 189,054,059 206,611,896
Loans Granted during the Year 98,514,044 39,149,000 69,961,000 35,247,000
Less: Repayments (78,078,843) (58,271,329) (66,099,864) (52,804,837)
Balance as at the end of the Year 219,198,564 212,348,407 192,915,195 189,054,059
Due within One Year 58,616,695 91,171,659 54,737,700 85,634,552
Due after One Year 160,581,869 121,176,748 138,177,495 103,419,507
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 123 20. Amounts Due from Related Parties Consolidated Company
2010 2009 2010 2009 Relationship Rs. Rs. Rs. Rs.
20.1 Trade
Singer Finance (Lanka) Ltd. Subsidiary – – 947,126,673 932,818,537
Singer Asia Sourcing Ltd. Affiliate Company 6,723,621 7,074,245 6,723,621 7,074,245
6,723,621 7,074,245 953,850,294 939,892,782
20.2 Non-Trade
Singer Industries (Ceylon) PLC Associate 21,987,873 – 21,987,873
Regnis (Lanka) PLC Affiliate Company 7,568,370 5,241,249 7,568,370 5,241,249
29,556,243 5,241,249 29,556,243 5,241,249
21. Marketable Securities Investment in Repurchase Agreement 410,551,810 160,473,932 – –
410,551,810 160,473,932 – –
22. Cash and Cash Equivalents Components of Cash and Cash Equivalents 22.1 Favourable Cash and Cash Equivalent Balances
Cash and Bank Balances 250,573,958 385,446,050 200,402,845 361,764,748
22.2 Unfavourable Cash and Cash Equivalent Balances
Bank Overdrafts (Notes 26.1 and 26.7) (457,771,513) (160,344,548) (457,771,513) (160,344,548) Total Cash and Cash Equivalents for the Purpose of Cash Flow Statement (207,197,556) 225,101,502 (257,368,668) 201,420,200
23. Stated Capital 23.1 Issued and Fully Paid
At the Issued for Issued for At the beginning Cash during Non-Cash end of of the Year the Year Consideration the Year 01.01.2010 31.12.2010 Number Number Number Number
Number of Shares - Ordinary Shares 62,604,805 – – 62,604,805
62,604,805 – – 62,604,805
Rs. Rs. Rs. Rs.
Rupees - Ordinary Shares 626,048,050 – – 626,048,050
626,048,050 – – 626,048,050
23.2 Rights, Preference and Restrictions of Classes of Capital The holders of ordinary shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share at a meeting of the Company.
124 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 23.3 Shares held by Group Companies The shares of the Company held by the Group Companies are as follows:
2010 2009 Number Number
Singer (Sri Lanka) B.V. 52,252,125 52,252,125
Singer Industries (Ceylon) PLC 1,050,700 1,050,700
24. Capital Reserves Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
(a) Reserve Fund
Reserve Fund (Note 24.1) 10,748,118 8,042,188 – –
10,748,118 8,042,188 – –
(b) Revaluation Reserve
Revaluation Reserve (Note 24.2) 664,542,029 404,084,718 664,542,029 404,084,718
664,542,029 404,084,718 664,542,029 404,084,718
675,290,147 412,126,906 664,542,029 404,084,718
Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
24.1 Reserve Fund
Balance as at the beginning of the Year 8,042,189 3,012,962 – –
Transfer of Surplus during the Year 2,705,929 5,029,226 – –
Balance as at the end of the Year 10,748,118 8,042,188 – –
24.2 Revaluation Reserve
Balance as at the beginning of the Year 404,084,717 404,084,718 404,084,717 404,084,718
Revaluation during the Year 359,796,766 – 359,796,766 –
Deferred Tax on Revaluation (99,339,454) – (99,339,454) –
Balance as at the end of the Year 664,542,029 404,084,718 664,542,029 404,084,718
25. Revenue Reserves Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Summary
(a) General Reserve (Note 25.1) 2,000,000,000 1,600,000,000 2,000,000,000 1,600,000,000
2,000,000,000 1,600,000,000 2,000,000,000 1,600,000,000
(b) Retained Earnings (Note 25.2) 578,324,678 375,624,170 316,845,046 356,088,037
578,324,678 375,624,170 316,845,046 356,088,037
2,578,324,678 1,975,624,170 2,316,845,046 1,956,088,037
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 125 25.1 General Reserve The general reserve which is a revenue reserve represents the amounts set aside by the Directors for general application.
The movement of General Reserve is as follows:
Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
At the beginning of the Year 1,600,000,000 1,500,000,000 1,600,000,000 1,500,000,000
Transferred from Retained Earnings 400,000,000 100,000,000 400,000,000 100,000,000
Issue of Bonus Shares – – – –
At the end of the Year 2,000,000,000 1,600,000,000 2,000,000,000 1,600,000,000
25.2 Retained Earnings
Singer (Sri Lanka) PLC 316,845,046 356,088,037 316,845,046 356,088,037
Equity Accounted Investees (Note 15.2) (475,379) 541,304 – –
Subsidiary Company 86,189,385 18,994,829 – –
Gain on Dilution of Equity Holding in Singer Finance (Lanka) Ltd. 176,573,748 – – –
Retained Earnings Attributable to Minority Shareholders (808,122) – – –
578,324,678 375,624,170 316,845,046 356,088,037
26. Interest Bearing Loans & Borrowings 26.1 Interest Bearing Loans & Borrowings - Consolidated
2010 2010 2009 2009 Amount Amount Amount Amount Repayable Repayable 2010 Repayable Repayable 2009 Within 1 Year After 1 Year Total Within 1 Year After 1 Year Total Rs. Rs. Rs. Rs. Rs. Rs.
Debentures (Note 26.2) 300,000,000 1,060,000,000 1,360,000,000 875,000,000 480,000,000 1,355,000,000
Bank Loans (Note 26.3) 2,157,712,738 227,290,697 2,385,003,435 2,358,114,881 33,935,865 2,392,050,746
Promissory Notes (Note 26.4) ––– 300,000,000 – 300,000,000
Bank Overdrafts (Note 22.2) 457,771,513 – 457,771,513 160,344,548 – 160,344,548
Commercial Papers (Note 26.5) 250,000,000 – 250,000,000 – 250,000,000 250,000,000
3,165,484,251 1,287,290,697 4,452,774,948 3,693,459,429 763,935,865 4,457,395,294
126 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 26.2 Debentures - Consolidated
Balance as at New Redemption As at 01.01.2010 Issues 31.12.2010 Rs. Rs. Rs. Rs.
14.0% Debentures Unsecured Redeemable on 06.08.2010 242,500,000 – 242,500,000 – 6 Month TB+1.50% (Floor 9.75%, Cap 16%) Debentures Unsecured Redeemable on 06.08.2010 357,500,000 – 357,500,000 –
14.0% Debentures Unsecured Redeemable on 06.08.2010 7,500,000 – 7,500,000 – 6 month TB+1.50% (Floor 9.75%, Cap 16%) Debentures Unsecured Redeemable on 06.08.2010 192,500,000 – 192,500,000 – AWPLR+1.75 (Floor 14.5%, Cap 16.5%) Unsecured Redeemable on 06.08.2010 75,000,000 75,000,000 – 6 Month TB+1.75% Debentures Unsecured Redeemable on 05.06.2012 45,000,000 – 15,000,000 30,000,000 AWPLR+3.00 Debentures Unsecured Redeemable on 05.06.2011/2012 135,000,000 – 45,000,000 90,000,000 19.75% Debentures Unsecured Redeemable on 29.02.2011/2012 and 2013 272,000,000 – – 272,000,000 6 Months TB+1.65 Debentures Unsecured Redeemable on 29.09.2011/2012 28,000,000 – – 28,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2011/2012 – 300,000,000 300,000,000 270,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2011/2012 – 300,000,000 300,000,000 270,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2011/2012 and 2013 – 400,000,000 – 400,000,000
1,355,000,000 1,000,000,000 995,000,000 1,360,000,000
26.3 Bank Loans - Consolidated
Balance as at Loans Repayment As at 01.01.2010 Obtained 31.12.2010 Rs. Rs. Rs. Rs.
(a) Movement of Bank Loans
Bank Loans 2,392,050,746 3,086,605,327 3,093,652,638 2,385,003,435
2,392,050,746 3,086,605,327 3,093,652,638 2,385,003,435
(b) Bank Loan Repayable after One Year
Company Lender/Rate Repayment Security 31.12.2010 31.12.2009 of Interest (p.a.) Rs. Rs.
Singer (Sri Lanka) PLC E-Friends Loan @6.5% At Maturity No Assets Pledged 5,832,925 7,632,975 National Savings Bank Rs. 200 million to be No Assets Pledged AWPLR+1.25% paid in May 2012. 200,000,000 –
205,832,925 7,632,975 Singer Finance (Lanka) Ltd. BOC AWPLR+2.5% Rate Monthly Payment Lease Debtors (Floor Rate 23%) Reviewed Monthly 1,570,316 6,415,434 Loan on Securitisation Monthly Repayment Hire Purchase Receivable 19,887,456 19,887,456 Fixed Rate 25.75%
21,457,772 26,302,890
227,290,697 33,935,865
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 127 26.4 Promissory Notes - Consolidated
Balance as at New Redemption As at 01.01.2010 Issues 31.12.2010 Rs. Rs. Rs. Rs.
Promissory Notes 300,000,000 – 300,000,000 –
300,000,000 – 300,000,000 –
26.5 Commercial Papers - Consolidated
Commercial Papers 250,000,000 – – 250,000,000
250,000,000 – – 250,000,000
26.6 Bank Facilities - Consolidated
2010 2009 Utilised Total Facility Utilised Total Facility Rs. Rs. Rs. Rs.
Overdraft 457,771,513 1,045,000,000 160,344,548 670,000,000
Term Loans 312,597,484 1,410,000,000 339,853,668 339,853,668
Short-Term Loans 2,322,405,951 3,655,800,000 2,602,197,078 4,100,000,000
Debentures 1,360,000,000 1,360,000,000 1,355,000,000 1,355,000,000
Total Debt Facility 4,452,774,948 7,470,800,000 4,457,395,294 6,464,853,668
Public Deposits 1,647,985,384 – 1,463,621,740 –
Guarantees 254,359,274 350,000,000 – 350,000,000
Letter of Credit 1,408,218,372 1,685,000,000 556,677,296 1,660,000,000
Total Debt and Other Facilities 7,763,337,980 9,505,800,000 6,477,694,330 8,474,853,668
26.7 Interest Bearing Loans & Borrowings - Company
2010 2010 2010 2009 2009 2009 Amount Amount Total Amount Amount Total Repayable Repayable Repayable Repayable Within 1 Year After 1 Year Within 1 Year After 1 Year Rs. Rs. Rs. Rs. Rs. Rs.
Debentures (Note 26.8) 300,000,000 1,060,000,000 1,360,000,000 875,000,000 480,000,000 1,355,000,000
Bank Loans (Note 26.9) 2,152,867,617 205,832,925 2,358,700,542 2,330,858,694 7,632,975 2,338,491,669
Promissory Notes (Note 26.10) ––– 300,000,000 – 300,000,000
Bank Overdrafts (Note 22.2) 457,771,513 – 457,771,513 160,344,548 – 160,344,548
Commercial Papers (Note 26.11) 250,000,000 – 250,000,000 – 250,000,000 250,000,000
3,160,639,130 1,265,832,925 4,426,472,055 3,666,203,242 737,632,975 4,403,836,217
128 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 26.8 Debentures - Company
As at New Redemption As at 01.01.2010 Issues 31.12.2010 Rs. Rs. Rs. Rs.
14.0% Debentures Unsecured Redeemable on 06.08.2010 242,500,000 – 242,500,000 – 6 month TB+1.50% (Floor 9.75%, Cap 16%) Debentures Unsecured Redeemable on 06.08.2010 357,500,000 – 357,500,000 –
14.0% Debentures Unsecured Redeemable on 06.08.2010 7,500,000 – 7,500,000 – 6 month TB+1.50% (Floor 9.75%, Cap 16%) Debentures Unsecured Redeemable on 06.08.2010 192,500,000 – 192,500,000 –
AWPLR+1.75 (Floor 14.5%, Cap 16.5%) Unsecured Redeemable on 06.08.2010 75,000,000 75,000,000 – 6 Month TB+1.75% Debentures Unsecured Redeemable on 05.06.2011/2012 45,000,000 – 15,000,000 30,000,000
AWPLR+3.00 Debentures Unsecured Redeemable on 05.06.2011/2012 135,000,000 – 45,000,000 90,000,000 19.75% Debentures Unsecured Redeemable on 29.02.2011/2012 and 2013 272,000,000 – – 272,000,000 6 Months TB+1.65 Debentures Unsecured Redeemable on 29.09.2011/2012 28,000,000 – – 28,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2011/2012 – 300,000,000 300,000,000 270,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2011/2012 – 300,000,000 300,000,000 270,000,000 AWPLR+1.25 Debentures Unsecured Redeemable on 31.12.2011/2012 and 2013 – 400,000,000 – 400,000,000
1,355,000,000 1,000,000,000 995,000,000 1,360,000,000
26.9 Bank Loans - Company
As at Loans Repayment As at 01.01.2010 Obtained 31.12.2010 Rs. Rs. Rs. Rs.
(a) Movement of Bank Loans
Bank Loans 2,338,491,669 3,086,605,327 3,066,376,454 2,358,700,542
2,338,491,669 3,086,605,327 3,066,376,454 2,358,700,542
(b) Bank Loan Repayable after One Year
Lender/Rate Repayment Security 31.12.2010 31.12.2009 of Interest (p.a.) Rs. Rs.
E-Friends Loan @ 6.5% At Maturity No Assets Pledged 5,832,925 7,632,975
National Savings Bank - Rs. 200 million to be No Assets Pledged 200,000,000 – AWPLR +1.25% paid in May 2012
205,832,925 7,632,975
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 129 26.10 Promissory Notes - Company
As at New Redemption As at 01.01.2010 Issues 31.12.2010 Rs. Rs. Rs. Rs.
Promissory Notes 300,000,000 – 300,000,000 –
300,000,000 – 300,000,000 –
26.11 Commercial Papers - Company
Commercial Papers 250,000,000 – – 250,000,000
250,000,000 – – 250,000,000
26.12 Bank Facilities
2010 2009 Utilised Total Facility Utilised Total Facility Rs. Rs. Rs. Rs.
Overdraft 457,771,513 1,020,000,000 160,344,548 645,000,000
Term Loans 286,294,591 1,310,000,000 286,294,591 286,294,591
Short-Term Loans 2,322,405,951 3,655,800,000 2,602,197,078 4,100,000,000
Debentures 1,360,000,000 1,360,000,000 1,355,000,000 1,355,000,000
Total Debt Facility 4,426,472,055 7,345,800,000 4,403,836,217 6,386,294,591
Guarantees 254,359,274 350,000,000 – 350,000,000
Letter of Credit 1,408,218,372 1,685,000,000 556,677,296 1,660,000,000
Total Debt and Other Facilities 6,089,049,701 9,380,800,000 4,960,513,513 8,396,294,591
27. Deferred Tax Assets/(Liabilities) Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
27.1 Deferred Tax Assets Balance as at beginning of the Year 143,053,325 96,480,763 143,053,325 96,480,763 Adjustment due to Change in Tax Rate - Recognised in Income Statement (28,610,667) – (28,610,667) – Origination and Reversal of Timing Differences - Recognised in Income Statement (89,402) 46,572,562 (89,402) 46,572,562 Balance as at the end of the Year 114,353,256 143,053,325 114,353,256 143,053,325
27.2 Deferred Tax Liabilities Deferred Tax Liability/(Asset) balance as at beginning of the Year 14,749,401 22,705,744 – – Origination of Deferred Tax Liability due to Revaluation of Building - Recognised in Equity 99,339,454 – 99,339,454 – Origination and Reversal of Timing Differences - Recognised in Income Statement (10,622,094) (7,956,343) – – Deferred Tax Liabilities/(Asset) balance as at the end of the Year 103,466,761 14,749,401 99,339,454 –
130 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 27.3 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against tax liabilities and when the deferred tax relate to the same fiscal authority.
The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows: 27.3.1 Consolidated
2010 2009 Assets Liabilities Assets Liabilities Rs. Rs. Rs. Rs.
(a) Composition of Deferred Tax Assets Property, Plant & Equipment – 68,301,370 – 70,490,904 Intangible Assets – 4,495,750 – 5,391,750 Inventories 41,623,938 – 25,413,124 – Provision on Assets 96,060,676 – 139,215,405 – Deferred Benefit Obligations 49,465,762 – 54,307,450 – 187,150,376 72,797,120 218,935,979 75,882,654 Net Deferred Tax 114,353,256 – 143,053,325 –
(b) Composition of Deferred Tax Liabilities Property, Plant & Equipment – 105,210,997 – 3,661,815 Intangible Assets –– – 12,274,515 Provision on Assets 281,998 – –– Deferred Benefit Obligations 1,462,238 – 1,186,929 – 1,744,236 105,210,997 1,186,929 15,936,330 Net Deferred Tax – 103,466,761 – 14,749,401
27.3.2 Company (a) Composition of Deferred Tax Assets Property, Plant & Equipment – 68,301,370 – 70,490,904 Intangible Assets – 4,495,750 – 5,391,750 Inventories 41,623,938 – 25,413,124 – Provision on Assets 96,060,676 – 139,215,405 – Deferred Benefit Obligations 49,465,762 – 54,307,450 – 187,150,376 72,797,120 218,935,979 75,882,654 Net Deferred Tax 114,353,256 – 143,053,325 –
(b) Composition of Deferred Tax Liabilities Property, Plant & Equipment – 99,339,454 – – – 99,339,454 – – Net Deferred Tax – 99,339,454 – –
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 131 28. Retirement Benefit Obligations Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Present Value of Unfunded Gratuity 181,875,758 158,555,375 176,663,436 155,164,141
Total Present Value of the Obligation 181,875,758 158,555,375 176,663,436 155,164,141
Provision for Retiring Gratuity
At the beginning of the Year 158,545,420 148,418,813 155,164,141 145,875,322
Actuarial Gain/(Loss) on Obligation 220,509 1,756,142 (247,944) 1,980,250
Current Service Cost 16,018,237 13,173,214 15,028,682 12,365,416
Interest on Obligation 17,573,814 18,204,804 17,200,779 17,940,751
192,357,980 181,552,973 187,145,658 178,161,739
Benefits Paid (10,482,222) (22,997,598) (10,482,222) (22,997,598)
At the end of the Year 181,875,758 158,555,375 176,663,436 155,164,141
The Company maintains a non-contributory defined benefit plan providing for gratuity benefits payable to employees expressed in term of final monthly salary and service.
As at 31st December 2010, the gratuity liability was actuarial valued under the Projected Unit Credit (PUC) method by a professionally qualified actuary firm Messrs Actuarial & Management Consultants (Private) Ltd.
The required accounting provision of the Company as at 31st December 2010, has been determined based on the recommendation on this Report.
Following key assumptions were made in arriving at the above figures: (a) Rate of Discount - 10.5% p.a. (net of tax) (b) Salary Increment Rate Year 1 - 10% Year 2+ - 9% (c) Retirement Age
Other than Factory General Staff Factory General Staff
Males 60 years 55 years Females 60 years 55 years
(d) Assumptions regarding future mortality are based on A67/70 Mortality Table, issued by the Institute of Actuaries, London. The demographic assumptions underlying the valuation are with respect to retirement age, early withdrawal from service and retirement on medical grounds.
The expense so recognised is included in Selling and Administrative expenses in the Income Statement.
The Group's and Company's retirement benefit obligation would have been Rs. 189.5 million and Rs. 185.6 million respectively as at the Balance Sheet date, had their retirement benefit obligation been calculated as per the requirements of Payment of Gratuity Act No. 12 of 1983.
132 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 29. Trade and Other Payables Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Trade Payables 551,474,918 400,274,704 458,339,232 358,058,716
Interest Payable 112,817,313 127,868,253 47,113,516 58,953,727
Value Added Tax Payable 53,949,856 68,520,446 51,439,712 65,997,250
MSPS Payable 13,839,778 8,803,362 13,839,778 8,803,362
ETF Payable 3,701,930 647,802 3,701,930 647,802
Advances Received from Customers 109,605,148 62,226,462 109,605,148 62,226,462
Accrued Expenses 404,122,470 242,590,160 392,252,500 237,489,206
Turnover Tax Payable 31,802,374 32,059,767 31,802,374 32,059,767
Other Payables 188,243,317 81,899,095 79,352,452 40,889,255
Warranty Provisions (Note 29.1) 30,758,736 24,758,736 30,758,736 24,758,736
1,500,315,840 1,050,114,260 1,218,205,378 889,883,283
29.1 Warranty provisions have been recognised for expected warranty claims on products sold by the Company.
30. Deferred Revenue Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Balance as at the beginning of the Year 57,011,584 79,060,992 49,532,150 73,051,634
Amounts Collected during the Year 192,535,962 189,085,772 174,783,463 179,909,574
Amounts Recognised as Revenue during the Year (170,238,712) (211,135,180) (158,031,973) (203,429,058)
Balance as at the end of the Year 79,308,834 57,011,584 66,283,640 49,532,150
30.1 Deferred revenue includes deferred service fee and amount deferred on extended warranty income as at 31st December 2010.
31. Dividend Payable Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs.
Unclaimed Dividends 3,204,691 2,978,168 3,204,691 2,978,168
3,204,691 2,978,168 3,204,691 2,978,168
32. Dividends Consolidated Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs. Ordinary Shares
Interim Dividend 2010 - Rs. 1.00 (2009 - Nil) 62,604,805 – 62,604,805 –
Proposed Final Dividend 2010 - Rs. 3.50 (2009 - Nil) 219,116,818 – 219,116,818 –
281,721,623 – 281,721,623 –
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 133 33. Amounts due to Related Parties Consolidated Company
2010 2009 2010 2009 Relationship Rs. Rs. Rs. Rs.
33.1 Trade
Singer Industries (Ceylon) PLC Affiliate Company 160,845,568 67,182,017 160,845,568 67,182,017
Regnis (Lanka) PLC Affiliate Company 53,402,870 160,943,016 53,402,870 160,943,016
Reality Lanka Ltd. Associate Company – 5,350,000 – 5,350,000
Regnis Appliances (Pvt) Ltd. Affiliate Company 54,399,165 – 54,399,165 –
268,647,603 233,475,033 268,647,603 233,475,033
33.2 Non-Trade
Singer Asia Ltd. Affiliate Company 53,272,425 37,104,053 53,272,425 37,580,483
Singer Finance (Lanka) Ltd. Subsidiary Company – – – 101,329,881
53,272,425 37,104,053 53,272,425 138,910,364
34. Deposits from Customers
Balance as at the beginning of the Year 1,463,621,740 1,129,647,116 – – New Deposits 716,990,498 796,913,458 – – Capitalisation of Interest 87,998,515 91,814,620 – – 2,268,610,753 2,018,375,194 – – Repaid Deposits (620,625,369) (554,753,454) – – Balance as at the end of the Year 1,647,985,384 1,463,621,740 – – Payable within One Year 1,451,990,703 1,313,620,654 – – Payable after One Year 195,994,681 150,001,086 – –
35. Commitments and Contingencies - Group/Company 35.1 Financial Commitments Documentary Credits effected for foreign purchases amounting to Rs. 1,408,218,372/- (2009 - Rs. 556,677,296/-).
35.2 Capital Commitments There were no significant capital commitments, which have been approved or contracted for by the Company/Subsidiary as at the Balance Sheet date except for the following: The Company on 12th February 2004 signed an agreement with IFS R&D Ltd. to implement a Software Solution System at a cost of US$ 850,000 (Rs. 84 million approximately) and is in a process of implementation. Payments up to 31st December 2010 were Rs. 76.7 million (2009 - Rs. 65.7 million).
Operating Lease commitment as at 31st December 2010 is as follows: Within one Year - Rs. 307.9 million Between one to five Years - Rs. 1,009.0 million Over five Years - Rs. 524.1 million
134 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 35.3 Assets Pledged Company has given a negative pledge over the Company's total assets, except immovable assets, for the following banks over the Loans and Overdrafts having a carrying value of Rs. 1.3 billion as at the year end:
z Hongkong & Shanghai Banking Corporation Ltd. z Commercial Bank of Ceylon PLC z Seylan Bank PLC z Sampath Bank PLC z Nations Trust Bank PLC z Deutsche Bank AG z National Development Bank PLC z Muslim Commercial Bank Ltd. z DFCC Vardhana Bank Ltd.
Lease debtors portfolio had been pledged by the Subsidiary Singer Finance (Lanka) Ltd. against loan obtained of Rs. 60.7 million from Bank of Ceylon, Sampath Bank PLC and DFCC Vardhana Bank Ltd., which has a carrying amount of Rs. 26.3 million as at the year end.
35.4 Contingencies (a) Guarantees given to banks and other lending institutions on behalf of Singer Industries (Ceylon) PLC and Regnis (Lanka) PLC amounts to Rs. 75 million and Rs. 455.5 million respectively.
(b) The Company has provided bank guarantees amounting to Rs. 105.2 million to the Director General of Customs to clear imports during the year under review pending completion of legal proceedings in the Court of Appeal.
The bank guarantees related to alleged additional duty payable on imports, is being contested by the Company in Courts.
The Company lawyers are of the opinion that there is no basis that the Company is liable for the additional duty and hence, no provision is made in the Financial Statements.
36. Events Occurring after the Balance Sheet Date There have been no material events occurring after the Balance Sheet date that require disclosure in the Financial Statements except,
(i) Pursuant to the Special Resolution passed by the shareholders on 21st December 2010, name of the Subsidiary Company was changed from Singer Finance (Lanka) Ltd. to Singer Finance (Lanka) PLC . The name change was gazetted on 18th February 2011.
(ii) On the 28th February 2011, the Board of Directors approved a final Dividend of Rs. 3.50 per share amounting to Rs. 219.1 million for the year ended 31st December 2010. This dividend will be paid on 21st March 2011.
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 135 37. Related Party Transactions 37.1 Identity of Related Parties The Company has a related party relationship with its Parent Company, its Associate Companies, its Affiliate Companies and with its Directors.
37.2 Transactions with Parent Companies (a) During the year, the Company had following transactions with its Parent Companies:
Singer Asia Ltd. - (Intermediate Parent)
2010 2009 Rs. million Rs. million
Royalty Expenses 178.3 126.9
Royalty Payable Balance as at the year end 53.3 36.7
Singer Asia Holdings B.V. (Intermediate Parent) Royalty paid to Singer Asia Ltd. through Singer Asia Holdings B.V.
(b) Following companies are also Parent Companies of Singer (Sri Lanka) PLC and Singer Finance (Lanka) Ltd., with whom no transactions were entered into during the year:
Company Relationship
Singer (Sri Lanka) B.V. Intermediate Parent Singer Asia Holdings N.V. Intermediate Parent Retail Holdings N.V. Ultimate Parent
37.3 Transactions with Subsidiary Company
2010 2009 Rs. million Rs. million
Singer Finance (Lanka) Ltd.
Sales Financed through Singer Finance (Lanka) Ltd. 2,096.8 2,080.0
Payments to Singer (Sri Lanka) PLC on behalf of Customers 1,383.3 1,047.0
Short-Term Loans Given – 121.5
Short-Term Loans Settled – 177.5
Interest Income 52.7 49.6
Dividend Received - Gross 20.0 10.0
Investment in Shares – 200.0
Cash Collections by Singer (Sri Lanka) PLC 618.4 314.0
Expenses Paid 92.0 43.4
Administrative Fee Charged 88.1 38.1
Collecting Commission Paid through Singer (Sri Lanka) PLC 177.4 61.7
Purchase of Assets 0.4 0.9
Rent Reimbursed 9.6 2.2
Royalty Paid through Singer (Sri Lanka) PLC 9.6 6.8
Balance Receivable 947.1 831.5
136 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 37.4 Transactions with Associate Companies (a) During the year the Company had following transactions with its Associate Companies:
2010 2009 Rs. million Rs. million
Reality (Lanka) Ltd.
Loans Receivable 102.2 110.5
Interest Income 7.4 10.4
Interest Receivable 17.8 10.4
Rent Expense 3.6 3.6
(b) Following company is an Associate Company of Singer (Sri Lanka) PLC, with whom Singer (Sri Lanka) PLC or Singer Finance (Lanka) Ltd. had no transactions taken place other than through Advertising Agencies during the year.
Telshan Network (Pvt) Ltd.
37.5 Transactions with Other Related Parties Transactions with the following parties have been disclosed in Note 37.6.
Relationship
Regnis (Lanka) PLC Affiliate Company Singer Industries (Ceylon) PLC Affiliate Company Singer Asia Sourcing Ltd. Affiliate Company Singer Asia Logistic Ltd. Affiliate Company
37.6 Transactions with Key Management Personnel and Directors A number of Key Management Personnel or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. These transactions are given below:
Name of the Company Name of Nature of 2010 2009 and Relationship Director Transaction Rs. million Rs. million
Singer Industries (Ceylon) PLC Mr. H.D.S. Amarasuriya (Chairman) Purchases 1,159.0 560.0 (Affiliate Company) Dr. G.C.B. Wijeyesinghe Corporate Guarantee given 75.0 75.0 Mr. H.A. Pieris Lease Rental paid 2.5 3.0 Mr. V.G.K. Vidyaratne Net Finance Income 0.8 5.0 Mr. G.J. Walker Trade Credit Settled 1,070.0 589.0 Loans Granted 30.0 – Loans Receivable 30.0 – Deshabandu Ajit Jayaratne Balance Payable 139.0 67.1
Regnis (Lanka) PLC Mr. H.D.S. Amarasuriya (Chairman) Purchases 2,380.5 1,685.0 (Affiliate Company) Dr. G.C.B. Wijeyesinghe Corporate Guarantee given 455.5 455.5 Mr. H.A. Pieris Interest Income 16.2 16.3 Mr. V.G.K. Vidyaratne Non-Trade Settlement 44.0 58.8 Mr. G.J. Walker Trade Credit Settled 2,490.2 1,632.0 Dr. Saman Kelegama Loans Granted – 130.0 Loans Recovered 60.0 – Loans Receivable 70.0 130.0 Expenses Incurred 28.2 30.0 Balance Payable 45.8 155.7
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 137 Name of the Company Name of Nature of 2010 2009 and Relationship Director Transaction Rs. million Rs. million Singer Finance (Lanka) Ltd. Mr. H.D.S. Amarasuriya (Chairman) Sales Financed through (Subsidiary Company) Singer Finance (Lanka) Ltd. 2,096.8 2,080.0 Dr. G.C.B. Wijeyesinghe Payments to Singer (Sri Lanka) PLC Mr. H.A. Pieris on behalf of Customers 1,383.3 1,047.0 Dr. Saman Kelegama Short-Term Loans given – 121.5 Mr. G.J. Walker Short-Term Loans settled – 177.5 Mr. M.P.A. Salgado Interest Income 52.7 49.6 Dividend Received (Gross) 20.0 10.0 Investment in Shares – 200.0 Cash Collection by Singer (Sri Lanka) PLC 618.4 314.0 Expenses Paid 92.0 43.4 Administrative Fee Charged 88.1 38.1 Collecting Commission Paid through Singer (Sri Lanka) PLC 177.4 61.7 Purchase of Assets 0.4 0.9 Rent Reimbursed 9.6 2.2 Royalty Paid through Singer (Sri Lanka) PLC 9.6 6.8 Balance Receivable 947.1 831.5
National Development Bank PLC Mr. H.D.S. Amarasuriya Borrowed Funds 255.1 250.0 Interest Expense 26.5 – Dr. G.C.B. Wijeyesinghe (Resigned w.e.f. 31.03.2010) Issue of Debentures 270.0 – Debenture Interest 21.1 – Singer Asia Sourcing Ltd. Mr. H.D.S. Amarasuriya (Affiliate Company) (Resigned w.e.f. 30.06.2010) Purchases 29.4 22.4 Mr. G.J. Walker Settlement 29.8 66.0 Balance Receivable 6.7 7.1 Singer Asia Ltd. Mr. H.D.S. Amarasuriya (Intermediate Parent Company) (Resigned w.e.f. 30.06.2010) Royalty Expense 178.3 126.9 Mr. P.J. O’Donnell Royalty Payable 53.3 36.7 Mr. T. Brown Mr. G.J. Walker Mr. H.A. Pieris
Sampath Bank PLC Dr. Saman Kelegama Borrowed Funds 210.5 300.0
Interest Expense 4.8 24.0
DFCC Bank PLC Deshabandu Ajit Jayaratne Investment in Debenture 400.0 75.0
(Resigned w.e.f. 30.04.2010) Debenture Repayment 75.0 –
Debenture Interest Repayment 16.9 –
Reality Lanka Ltd. (Associate Company) Mr. H.D.S. Amarasuriya Loan Receivable 102.2 110.5
Mr. H.A. Pieris Interest Income 7.4 10.4
Mr. V.G.K. Vidyaratne Interest Receivable 17.8 10.4
Mr. G.J. Walker Rent Charge 3.6 3.6
Regnis Appliances (Pvt) Ltd. Mr. H.D.S. Amarasuriya Purchases 142.6 – Mr. H.A. Pieris Settlements 88.2 – Mr. V.G.K. Vidyaratne Balance Payable 54.4 – Mr. A.N. Majeed
Fintravels Ltd. Dr. G.C.B. Wijeyesinghe Business Transactions 1.5 0.5
138 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements 38. Transactions with Key Management Personnel (a) Key Management Personnel includes members of the Board of Directors of the Company, its Subsidiary and Parent. Transaction with Key Management Personnel, their close family members and parties/entities in which such Key Management Personnel or their close family members have control, joint control or significant influence can be shown as follows:
2010 2009 Rs. million Rs. million
(i) Transactions with Key Management Personnel or Close Family Members Deposit Kept by Key Management Personnel or their close family members at Singer Finance (Lanka) Ltd. 45.8 12.1
Group Company
2010 2009 2010 2009 Rs. Rs. Rs. Rs. (ii) Compensation of Key Management Personnel
Short-Term Employee Benefits 28,628,060 22,617,064 23,510,766 18,326,014
Post-Employment Benefit Paid 7,030,000 11,832,380 7,030,000 11,832,380
In addition to their salaries the Company provides non-cash benefits to the Key Management Personnel and contributes to a past employment defined benefit plan on their behalf. Directors emoluments are disclosed in Note 9 to the Financial Statements.
(iii) No transactions had been taken place during the year with the parties/entities in which Key Management Personnel or their close family members have control, joint control or significant influence.
(b) The amounts receivable from or payable by above related parties as at 31st December 2010, are disclosed in Notes 18, 20 and 33 respectively.
39. Restated Financial Statements 39.1 Consolidated The Group has calculated the amount recognised as interest income on Hire Purchase, Lease, and Loans on Sum of Digit Method. However, with the effect of SLAS 33, this interest calculation should change to Constant Periodic Rate. The Company has restated the Financial Statements with retrospective effect applicable for the accounting period starting from 01st of January 2008, which is the earliest prior period where such adjustment is practicable due to limitations placed on the availability of information. The effect of the restatement is summarised below:
Periods Prior to 2009 31st December 2008
Balance Sheet
Increase/(Decrease) in Trade and Other Receivables (80,419,063) (115,698,532)
Increase/(Decrease) in Amounts due to Related Parties 376,529 (1,142,729)
Increase/(Decrease) in Income Tax Payable (28,977,225) (39,145,178)
Interest Income
Increase/(Decrease) In Revenue 24,179,198 (114,342,314)
Increase/(Decrease) in Selling and Administrative Expense 291,891 (2,498,947)
Increase/(Decrease) in Income Tax Expense 3,007,485 (39,145,178)
Statement in Change in Equity
Increase/(Decrease) In Retained Earnings 20,879,822 (72,698,190)
Retained Earning Brought Forward (72,698,190) –
(51,818,368) (72,698,190)
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2010 139 39.2 Company The Company has calculated the amount recognised as interest income on Hire Purchase, on Sum of Digit method. However, with the effect of SLAS 33, this interest calculation should change to Constant Periodic Rate. The Company has restated the Financial Statements with retrospective effect applicable for the accounting period starting from 01st of January 2008, which is the earliest prior period where such adjustment is practicable due to limitations placed on the availability of information. The effect of the restatement is summarised below:
Periods Prior to 2009 31st December 2008
Balance Sheet
Increase/(Decrease) in Trade and Other Receivables 3,524,341 (60,572,757)
Increase/(Decrease) in Related Party Payable 1,214,452 (666,300)
Increase/(Decrease) in Income Tax Payable 689,632 (20,967,260)
Interest Income
Increase/(Decrease) in Revenue 56,713,603 (60,572,757)
Increase/(Decrease) in Selling an Administrative Expense 1,657,725 (666,300)
Increase/(Decrease) in Income Tax Expense 14,496,424 (20,967,260)
Statement in Change in Equity
Increase/(Decrease) In Retained Earnings 40,559,454 (38,939,197)
Retained Earning Brought Forward (38,939,197) –
1,620,257 (38,939,197)
140 Singer (Sri Lanka) PLC Annual Report 2010 Notes to the Financial Statements Annexure : II Annual Report for the financial years ending 31st December 2009 Independent Auditors’ Report
TO THE SHAREHOLDERS OF SINGER (SRI LANKA) PLC ȱȱȱȱȱȱȱ¡ȱ ȱȱȱȱȱȱ ȱȱȱ ȱ¢ȱ Report on the Financial Statements ȱȱȱȱȱǯȱȱȱȱȱȱ ȱȱȱȱ¢ȱęȱȱȱ ȱȱȱȱȱȱȱǯ ȱǻȱǼȱǰȱȱȱęȱȱ ȱȱ¢ȱȱȱ¢ȱȱȱȱȱ ȱ Opinion ȱȱȱȱȱȱřŗȱȱŘŖŖşǰȱȱȱ ȱȱǰȱȱȱȱȱȱȱ¡ǰȱȱ ȱǰȱȱȱȱȱ¢ȱȱȱĚ ȱ ¢ȱȱȱȱȱȱȱ¢ȱ ȱȱȱ¢ȱȱǰȱȱȱ¢ȱȱęȱ ȱřŗȱȱŘŖŖşȱȱȱęȱȱȱȱ ȱȱȱȱ¡¢ȱȱȱȱȱȱ ȱȱȱ ȱȱȱ¢Ȃȱȱȱěȱȱȱ ȱŜŞȱȱŗŖŝȱȱȱȱǯ řŗȱȱŘŖŖşȱȱȱęȱȱȱĚ ȱȱȱ¢ȱ ȱȱȱȱ ȱȱȱȱǯ Management’s Responsibility for the Financial Statements ȱȱǰȱȱȱęȱȱȱ ȱȱȱȱȱȱȱȱ ȱȱȱȱ ȱȱȱȱȱěȱȱȱřŗȱȱ ȱȱȱęȱȱȱȱ ȱ ŘŖŖşȱȱȱęȱȱȱĚ ȱȱȱ¢ȱȱǰȱ ȱȱȱǯȱȱ¢ȱDZȱ ȱȱ ȱȱȱȱǰȱȱȱ ǰȱȱȱȱȱȱ ¢ȱȱȱ¢ȱȱ ȱ¢ǰȱȱȱȱ ȱȱȱȱȱȱȱȱęȱ ȱȱȱȱȱ¢ǯ ȱȱȱȱȱȱǰȱ ȱȱ ȱȱȱDzȱȱȱ¢ȱȱȱ Report on Other Legal and Regulatory Requirements Dzȱȱȱȱȱȱȱȱȱ ȱęȱȱȱ¢ȱ ȱȱȱ ȱǯ ȱȱŗśřȱǻŘǼȱȱŗśřȱǻŝǼȱȱȱȱȱǯȱŖŝȱȱŘŖŖŝǯ
ȱȱȱȱȱȱ ȱ¢ȱȱȱ¡ȱȱȱȱȱęȱ ȱȱȱȱǯȱȱȱȱȱ ȱȱ ȱȱȱȱǯȱȱ KPMG Ford, Rhodes, Thornton & Co. ȱȱȱ ȱȱȱȱȱȱȱȱ Chartered Accountants, ȱȱ ȱȱęȱȱȱȱ ȱȱǯȱ ȱȱȱ¡ǰȱȱȱȱǰȱȱ ŞȱȱŘŖŗŖ ȱȱȱȱȱȱȱęȱ ǯȱȱȱȱȱȱȱȱ ȱȱȱęȱȱȱ¢ȱǰȱ ȱ ȱȱȱȱȱęȱȱǯ
Singer (Sri Lanka) PLC Annual Report 2009 67 Income Statement
Consolidated Company Year ended 31st December 2009 2008 2009 ŘŖŖŞȹ Note Rs. ǯ Rs. ǯȹ Revenue 3 11,889,324,113 ȱŗřǰŝřŚǰŖşŘǰŞŝŜȱ 11,284,824,680 ȱŗřǰřŜŚǰŘŜŝǰŗřřȱ ȱȱ (7,281,813,332) ȱǻŞǰŚşŖǰŘŞŚǰŝřŘǼ (7,281,813,332) ȱǻŞǰŚşŖǰŘŞŚǰŝřŘǼ ȱę 4,607,510,781 ȱśǰŘŚřǰŞŖŞǰŗŚŚȱ 4,003,011,348 ȱŚǰŞŝřǰşŞŘǰŚŖŗȱ ȱ ś 96,752,099 ȱŗŚřǰśŗŝǰśşŞȱ 100,610,250 ȱŚŜŚǰŝřŝǰŜŗŘȱ ȱȱȱ¡ (3,119,452,719) ȱǻřǰŜŘŚǰşŜŖǰřřřǼ (2,912,598,085) ȱǻřǰśŖřǰŘŜŗǰřŗŜǼ ȱ¡ Ŝ (209,456,100) ȱǻŗŞŖǰśŘşǰŗřŗǼ (200,336,559) ȱǻŗŝŘǰŘŘŗǰśŗŞǼ ȱ ŝ (1,193,592,345) ȱǻŗǰřŝşǰśŘŚǰŝŗŝǼ (916,267,818) ȱǻŗǰŗřŚǰŗŜŚǰŝŞřǼ ȱ ŝ 85,320,937 ȱśŝǰřŖŝǰŘŝŝȱ 113,349,832 ȱřśǰśŜřǰŞŗřȱ ȱȱ (1,108,271,408) ȱǻŗǰřŘŘǰŘŗŝǰŚŚŖǼ (802,917,986) ȱǻŗǰŖşŞǰŜŖŖǰşŝŖǼ ȱȱęȦǻǼȱȱ¢ȱȱ ȱ ȱȱȱǻȱȱ ȱ¡Ǽ 8 (891,318) ȱřşǰŗŜřǰŘŘřȱ – – ȱȱ¡ȱȱȱ (42,350,000) ȱǻŚřǰŝŖŝǰŞřŜǼ (21,100,000) ȱǻřŚǰŘŞřǰŞŝşǼ ęȱȱ¡ ş 223,841,335 ȱŘśśǰŖŝŚǰŘŘśȱ 166,668,968 ȱśřŖǰřśŘǰřřŖȱ ȱ¡ȱ¡ ŗŖ (111,822,616) ȱǻŞşǰŜŗśǰşśśǼ (86,152,366) ȱǻŞřǰŞŘşǰŚřřǼ ęȱȱȱ 112,018,719 ȱŗŜśǰŚśŞǰŘŝŖȱ 80,516,602 ȱŚŚŜǰśŘŘǰŞşŝȱ
ȱȱ ŗŗǯŘ 1.79 ŘǯŜŚȱ 1.29 ŝǯŗřȱ
ȱȱȱ¡ȱȱ ȱȱȱ ȱȱȱȱ ȱȱ¢ȱȱ ŗŗǯř 1.79 ŗǯřŜ 1.29 ŖǯŜŖ ȱȱ 32 – ŜǯŖŖ – ŜǯŖŖȱ
ȱȱȱȱȱȱȱŝŘȱȱŗŖŝȱȱȱȱȱȱȱȱǯ
68 Singer (Sri Lanka) PLC Annual Report 2009 Balance Sheet
Consolidated Company
As at 31st December 2009 2008 2009 2008 Note Rs. ǯ Rs. ǯ ASSETS Non-Current Assets ¢ǰȱȱǭȱ ŗŘ 1,285,727,688 ȱŗǰŚŚśǰŖŝŝǰşŚŝȱ 1,261,639,286 ȱŗǰŚŗşǰŖŗŗǰŗŚŜȱ ȱ ŗř 165,740,939 ȱŗŞŘǰŝŚŞǰŗşřȱ 157,619,048 ȱŗŝŚǰřŝŘǰŝŝŖȱ ȱȱ¢ ŗŚ – – 400,000,000 ȱŘŖŖǰŖŖŖǰŖŖŖȱ ȱȱ¢ȱȱ ŗś 24,541,304 ȱŘśǰŚřŘǰŜŘŘȱ 24,000,000 ȱŘŚǰŖŖŖǰŖŖŖȱ ȱ ŗŜ 18,489,773 ȱŗŞǰŚŞşǰŝŝřȱ 18,448,473 ȱŗŞǰŚŚŞǰŚŝřȱ ȱȱȱ ŗş 2,039,522,072 ȱŘǰŘŝŘǰŝřřǰŘŚŘȱ 1,024,443,307 ȱŗǰŘŞŘǰŚŘşǰŜşŖȱ ȱ¡ȱ Řŝ 143,053,325 ȱşŜǰŚŞŖǰŝŜřȱ 143,053,325 ȱşŜǰŚŞŖǰŝŜřȱ 3,677,075,101 ȱŚǰŖŚŖǰşŜŘǰśŚŖȱ 3,029,203,439 ȱřǰŘŗŚǰŝŚŘǰŞŚŘȱ Current Assets ŗŝ 1,984,919,283 ȱŘǰşřŞǰśřŖǰŖřŗȱ 1,984,919,283 ȱŘǰşřŞǰśřŖǰŖřŗȱ ȱȱȱȱ ŗŞ 240,515,421 ŗŖŞǰřşŚǰŗřŖ 240,515,421 ȱŗŜŚǰřşŚǰŗřŖȱ ȱ¡ȱ – ȱśřǰŞŝŜǰŘśŖȱ – ȱśřǰŞŝŜǰŘśŖȱ ȱȱȱ ŗş 4,473,126,475 ȱśǰŖśśǰŚśŚǰřśşȱ 2,667,185,984 ȱŚǰŚŘŖǰŜŘŖǰşśŘȱ ȱȱȱȱȱȬȱ ŘŖǯŗ 7,074,245 ȱŜǰřřşǰŘŞŗȱ 939,892,782 ȱŜǰřřşǰŘŞŗȱ ȱȱȱȱȱȬȱȬ ŘŖǯŘ 5,241,249 ȱŗŝǰşşŖǰŖŘřȱ 5,241,249 ȱŗŝǰşşŖǰŖŘřȱ ȱ Řŗ 160,473,932 ȱŗŝśǰŞŞŚǰśŗŞȱ – – ȱȱȱ 22 385,446,050 ȱŘśśǰŝŞŜǰŖŘŘȱ 361,764,748 ȱŘśŚǰŘŗŚǰŖŜřȱ 7,256,796,655 ȱŞǰŜŗŘǰŘśŚǰŜŗŚȱ 6,199,519,467 ȱŝǰŞśśǰşŜŚǰŝřŖȱ Total Assets 10,933,871,756 ȱŗŘǰŜśřǰŘŗŝǰŗśŚȱ 9,228,722,906 ȱŗŗǰŖŝŖǰŝŖŝǰśŝŘȱ ȱȱ Equity ȱ 23 626,048,050 ȱŜŘŜǰŖŚŞǰŖśŖȱ 626,048,050 ȱŜŘŜǰŖŚŞǰŖśŖȱ ȱ ŘŚ 412,126,906 ȱŚŖŝǰŖşŝǰŜŝşȱ 404,084,718 ȱŚŖŚǰŖŞŚǰŝŗŞȱ ȱ Řś 2,027,442,537 ȱŗǰşŘŖǰŚśřǰŖŚśȱ 1,954,467,780 ȱŗǰŞŝřǰşśŗǰŗŝŞȱ Total Equity 3,065,617,493 ȱŘǰşśřǰśşŞǰŝŝŚȱ 2,984,600,548 ȱŘǰşŖŚǰŖŞřǰşŚŜȱ Non-Current Liabilities ȱȱȱȱ ŘŜ 763,935,865 ȱŗǰŚŚŚǰŗŜśǰŗřŝȱ 737,632,975 ȱŗǰřŞřǰŜŜŗǰŜŗŜȱ ȱęȱ 28 158,555,375 ȱŗŚŞǰŚŗŞǰŞŗřȱ 155,164,141 ȱŗŚśǰŞŝśǰřŘŘȱ ȱ¡ȱ¢ Řŝ 14,749,401 ȱŘŘǰŝŖśǰŝŚŚȱ – – ¢ȱ 359,515,564 ȱřřŚǰŞřŝǰřŖŜȱ 359,515,564 ȱřřŚǰŞřŝǰřŖŜȱ ȱȱ řŚ 150,001,086 ȱŞŗǰŖŝŜǰŝŖśȱ – – 1,446,757,291 ȱŘǰŖřŗǰŘŖřǰŝŖśȱ 1,252,312,680 ȱŗǰŞŜŚǰřŝŚǰŘŚŚȱ Current Liabilities ȱȱȱ¢ Řş 1,050,114,260 ȱŗǰŗśŝǰŝŞśǰŗŞŚȱ 889,883,283 ȱŗǰŖŖŜǰŞŜŘǰŞŜşȱ ȱ 30 57,011,584 ȱŝşǰŖŜŖǰşşŗȱ 49,532,150 ȱŝřǰŖśŗǰŜřŚȱ ȱ¡ȱ¢ 34,110,320 – 12,041,890 – ȱ¢ řŗ 2,978,168 – 2,978,168 – ȱȱȱȱȱȬȱ řřǯŗ 233,475,033 ȱŘřřǰŞřŝǰŝśŖȱ 233,475,033 ȱŘřřǰŞřŝǰŝśŖȱ ȱȱȱȱȱȬȱȬ řřǯŘ 36,727,524 ȱŗśŝǰřŚśǰŘşŞȱ 137,695,912 ȱŗŝŞǰŗŘŞǰŜŞŞȱ ȱȱ řŚ 1,313,620,654 ȱŗǰŖŚŞǰśŝŖǰŚŗŗȱ – – ȱȱȱȱ ŘŜ 3,693,459,429 ȱŚǰşşŗǰŞŗśǰŖŚŗȱ 3,666,203,242 ȱŚǰŞŗŖǰřŜŞǰŚŚŗȱ 6,421,496,972 ȱŝǰŜŜŞǰŚŗŚǰŜŝśȱ 4,991,809,678 ȱŜǰřŖŘǰŘŚşǰřŞŘȱ Total Equity and Liabilities 10,933,871,756 ȱŗŘǰŜśřǰŘŗŝǰŗśŚȱ 9,228,722,906 ȱŗŗǰŖŝŖǰŝŖŝǰśŝŘȱ
ȱȱȱȱȱȱȱŝŘȱȱŗŖŝȱȱȱȱȱȱȱȱǯ ȱ¢ȱȱȱȱȱȱȱ¢ȱ¢ȱ ȱȱȱȱȱȱȱǯȱŖŝȱȱŘŖŖŝǯ
Priyath Salgado Finance Director
ȱȱȱȱȱȱȱȱȱȱȱȱȱȱǯȱ ȱȱȱȱȱȱȱȱ¢ǰ
Hemaka Amarasuriya ȱħ Director Director
ȱ ŞȱȱŘŖŗŖ
Singer (Sri Lanka) PLC Annual Report 2009 69 Statement of Changes in Equity
Consolidated Stated ȱ ȱ ȱ ȱ Total ȱ Retained ȹ Note ǯ ǯ ǯ ǯ ǯ ǯȹ ȱȱȱřŗȱȱŘŖŖŝ ȱŜŘŜǰŖŚŞǰŖśŖȱ ȱŗǰŗşŘǰŖŖŗȱ ȱŘřŘǰŚŖŜǰŗŗşȱ ȱŗǰřŖŖǰŖŖŖǰŖŖŖȱ ȱŞŖŞǰşřřǰřřśȱ ȱŘǰşŜŞǰśŝşǰśŖśȱ ȱȱ ȬȱȱȱŘŖŖŝȱǻǯȱŘȱȱǼ 32 Ȯȳ Ȯȳ Ȯȳ Ȯȳ ȱǻŗŘśǰŘŖşǰŜŗŖǼ ȱǻŗŘśǰŘŖşǰŜŗŖǼ ȱ Ȭȱ ȱȱŘŖŖŞȱǻǯȱŚȱȱǼ –– ––ȱǻŘśŖǰŚŗşǰŘŘŖǼ ȱǻŘśŖǰŚŗşǰŘŘŖǼ ȱȱȱ ŗŘ ––ȱŗşśǰŗŞşǰŞŘşȱ ––ȱŗşśǰŗŞşǰŞŘşȱ ȱȦǻǼȱȱȱȱȱȱ ȱȱȱ¢ȱȱ ––ȱǻŘřǰśŗŗǰŘřŗǼ – ȱŘřǰśŗŗǰŘřŗȱ Ȯȳ ȱȦǻǼȱȱȱ Ȯȳ ȱŗǰŞŘŖǰşŜŗȱ Ȯȳ ȱŘŖŖǰŖŖŖǰŖŖŖȱ ȱǻŘŖŗǰŞŘŖǰşŜŗǼ Ȯȳ ęȱȱȱ Ȯȳ Ȯȳ Ȯȳ Ȯȳ ȱŗŜśǰŚśŞǰŘŝŖȱ ȱŗŜśǰŚśŞǰŘŝŖȱ
ȱȱȱřŗȱȱŘŖŖŞ ȱŜŘŜǰŖŚŞǰŖśŖȱ ȱřǰŖŗŘǰşŜŘȱ ȱŚŖŚǰŖŞŚǰŝŗŝȱ ȱŗǰśŖŖǰŖŖŖǰŖŖŖȱ ȱŚŘŖǰŚśřǰŖŚśȱ ȱŘǰşśřǰśşŞǰŝŝŚȱ ȱȦǻǼȱȱȱ – śǰŖŘşǰŘŘŝ – ŗŖŖǰŖŖŖǰŖŖŖ ǻŗŖśǰŖŘşǰŘŘŝǼ – ęȱȱȱ –––Ȯȳ ȱŗŗŘǰŖŗŞǰŝŗşȱ ȱŗŗŘǰŖŗŞǰŝŗşȱ ȱȱȱřŗȱȱŘŖŖş 626,048,050 8,042,189 404,084,717 1,600,000,000 427,442,537 3,065,617,493
Company Stated ȱ ȱ Total ȱ ȹ ȹ ȹ Note ǯ ǯ ǯ ǯ ǯȹ
ȱȱȱřŗȱȱŘŖŖŝ ȱŜŘŜǰŖŚŞǰŖśŖȱ ȱŘŖŞǰŞşŚǰŞŞşȱ ȱŗǰřŖŖǰŖŖŖǰŖŖŖȱ ȱśŖřǰŖśŝǰŗŗŗȱ ȱŘǰŜřŞǰŖŖŖǰŖśŖȱ ȱȱ ȬȱȱȱǻǯȱŘȱȱǼ 32 Ȯȳ Ȯȳ Ȯȳ ȱǻŗŘśǰŘŖşǰŜŗŖǼ ȱǻŗŘśǰŘŖşǰŜŗŖǼ ȱ Ȭȱ ȱȱŘŖŖŞȱǻǯȱŚȱȱǼ Ȯȳ Ȯȳ Ȯȳ ȱǻŘśŖǰŚŗşǰŘŘŖǼ ȱǻŘśŖǰŚŗşǰŘŘŖǼ ȱȱȱ ŗŘ – ȱŗşśǰŗŞşǰŞŘş ––ȱŗşśǰŗŞşǰŞŘşȱ ȱȦǻǼȱȱȱ – Ȯȳ ŘŖŖǰŖŖŖǰŖŖŖȱ ǻŘŖŖǰŖŖŖǰŖŖŖǼ Ȯȳ ęȱȱȱ Ȯȳ Ȯȳ Ȯȳ ŚŚŜǰśŘŘǰŞşŝ ŚŚŜǰśŘŘǰŞşŝ ȱȱȱřŗȱȱŘŖŖŞ ȱŜŘŜǰŖŚŞǰŖśŖȱ ȱŚŖŚǰŖŞŚǰŝŗŞȱ ȱŗǰśŖŖǰŖŖŖǰŖŖŖȱ ȱřŝřǰşśŗǰŗŝŞȱ ȱŘǰşŖŚǰŖŞřǰşŚŜȱ ȱȦǻǼȱȱȱ ––ŗŖŖǰŖŖŖǰŖŖŖ ǻŗŖŖǰŖŖŖǰŖŖŖǼ – ęȱȱȱ Ȯȳ Ȯȳ Ȯȳ ȱŞŖǰśŗŜǰŜŖŘȱ ȱŞŖǰśŗŜǰŜŖŘȱ ȱȱȱřŗȱȱŘŖŖş 626,048,050 404,084,718 1,600,000,000 354,467,780 2,984,600,548
ȱȱȱȱȱȱȱŝŘȱȱŗŖŝȱȱȱȱȱȱȱȱǯ
70 Singer (Sri Lanka) PLC Annual Report 2009 Cash Flow Statement
Consolidated Company Year ended 31st December 2009 2008 2009 2008 Note Rs. ǯ Rs. ǯȹ Cash Flows from Operating Activities ęȱȱ ȱ¡ȱ¡ 223,841,335 ȱŘśśǰŖŝŚǰŘŘśȱ 166,668,968 ȱśřŖǰřśŘǰřřŖȱ ȱDZ ȱȱ¢ǰȱȱǭȱ ŗŘ 201,259,195 ȱŗŝşǰŝşŘǰŜŚśȱ 195,570,682 ȱŗŝŚǰśřŗǰŞŘŘȱ ȱȱǻęǼȦȱȱ¢ȱȱ 8 891,318 ȱǻřşǰŗŜřǰŘŘřǼ – – ȱȱ ȱ ŗř 23,829,976 ȱŗŚǰŚřŚǰřŝşȱ 20,398,948 ȱŗŗǰřŞŝǰśŞŝȱ ǻ ǼȦȱȱȱȱ¢ǰȱȱǭȱ 398,977 ȱǻşǰŚŘŜǰŚşřǼ 398,977 ȱǻşǰŚŝŝǰŜŞŞǼ ȱȱȱȱ¢ȱȱ – ȱǻŞŖǰŚŘŜǰşŘŗǼ – ȱǻŚŖŞǰşŚŞǰŞŚŜǼ ȱȱ¡ ŝ 1,107,616,753 ȱŗǰřŘřǰŚŞśǰŜŚŜȱ 802,263,331 ȱŗǰŖşşǰŞŜşǰŗŝŝ ȱęȱȱ ȱ (232,261,629) ȱŗŖŖǰřŖřǰŗŞŚȱ (359,051,575) ȱǻşŚǰŖŘŝǰŖŘśǼ ȱǻȱȱǼȱȱȱ ¢ 2,585,883 ȱǻŘǰşŖśǰŝŜŚǼ 2,585,883 ȱǻŘǰşŖśǰŝŜŚǼ ȱȱȱȱȱ 75,946,242 ȱşŗǰŚŚŝǰśŖŝȱ 85,045,073 ȱşŘǰŞŜřǰŞŜŜȱ ȱ 30 (22,049,408) ȱǻŗŚǰŝŖŘǰŝşřǼ (23,519,484) ȱǻŗŝǰřśŞǰřřŞǼ ȱ (528,019) ȱǻŗŗŞǰŗŘşǼ (10,513,619) ȱǻŘŚǰŜśŝǰŞŖŞǼ ȱȱȱ ¢ 28 33,134,160 ȱřŝǰŞŖřǰŞřŘȱ 32,286,417 ȱřŜǰśŞŘǰŞřŘȱ ȱęȱȱȱȱ 1,414,664,783 ȱŗǰŞśśǰśşŞǰŖşśȱ 912,133,601 ȱŗǰřŞŞǰŘŗŘǰŗŚśȱ ǻ ǼȦȱȱ 951,024,865 ȱǻŚŞŗǰŜŚŞǰŗřŘǼ 951,024,865 ȱǻŚŞŗǰŜŚŞǰŗřŚǼ ǻ ǼȦȱȱȱȱȱĞȱȱ 374,960,878 ȱǻřŖŜǰŘŞŜǰŜŞŞǼ 355,038,469 ȱǻŘǰşşŗǰŝŘŜǼ ǻ ǼȦȱȱȱȱȱ ȱȱ 607,342,058 ȱŗŗǰŞśŚǰŖşŞȱ 1,940,837,880 ȱŚŘŚǰŖřŞǰŜŖŖȱ ǻ ǼȦȱȱȱȱȱ 120,407,940 ȱǻřǰśřŞǰŜŚřǼ (812,410,597) ȱŜşǰřŗŝǰŜŘŘȱ ȦǻǼȱȱȱȱȱ (120,980,490) ȱśşǰşŗŚǰřŝŞȱ (40,795,492) ȱŞŖǰŜşŝǰŝŜŞȱ ȱȱ¢ȱ¢ȱ 24,678,257 řřǰŘŝŞǰŞŗŘ 24,678,257 řřǰŘŝŞǰŞŗř ȱȱȱȱ 333,974,625 ŜŗŗǰŘŞŝǰŚŘŝ – – ȱȱȱȱȱ¢ (83,202,661) ȱǻřŘśǰşŜŘǰŝŞŜǼ (105,669,023) ȱǻřśŖǰŜŘŜǰŜŖŖǼ ȱ ȱȱ 3,622,870,255 ȱŗǰŚśŚǰŚşŜǰśŜŗȱ 3,224,837,960 ȱŗǰŗŜŖǰŘŝŞǰŚŞŞ ȱȱ (1,214,427,785) ȱǻŗǰřŚŝǰŚśŖǰŚŞŜǼ (923,945,555) ȱǻŗǰŗśŝǰŖşŘǰŖŚŜǼ ȱ ¢ȱ 28 (22,997,598) ȱǻŗŜǰŘŝŚǰŘŘŖǼ (22,997,598) ȱǻŗŜǰŘŝŚǰŘŘŖǼ ȱ¡ȱ (78,364,951) ȱǻŗşŘǰŜŜŗǰşŜśǼ (66,806,789) ȱǻŗşŘǰŜśŚǰŚŜśǼ ȱȱȱȱ 2,307,079,921 ȱǻŗŖŗǰŞşŖǰŗŗŖǼ 2,211,088,016 ȱǻŘŖśǰŝŚŘǰŘŚřǼ
Cash Flows from Investing Activities ȱȱ¢ǰȱȱǭȱȱ ȱȱȱ ȱ ŗŘȦŗř (53,068,841) ȱǻŘşŜǰŝŚşǰŞŚřǼ (46,181,235) ȱǻŘŝŞǰŝŜŗǰŞşśǼ ȱȱȱȱ¢ǰȱȱǭȱ 3,938,210 ȱŗŞǰşŖşǰśŞřȱ 3,938,210 ȱŗŞǰŚŗŞǰŚŞŖȱ ȱȱȱȱ¢ȱȱ – ȱŚşśǰŝŜŝǰŘŖŗȱ – ȱŚşśǰŝŜŝǰŘŖŗȱ ȱȱȱ 15,410,586 ȱǻşŜǰřŘŝǰŖşŗǼ – – ȱȱ¢ȱ – – (200,000,000) – ȱȱ ȱȱȱȱȱȱ (240,515,421) – (184,515,421) ǻřřǰŖŖŖǰŖŖŖǼ ȱ 74,872,439 śŝǰřŖŝǰŘŝŝ 102,901,334 řśǰśŜřǰŞŗŘ ȱȱ 528,019 ȱşǰŜŜŘǰřŖŞȱ 10,513,619 ȱŘŚǰŜśŝǰŞŖŞȱ ȱȱ ȱȱ ȱ (198,835,008) ȱŗŞŞǰśŜşǰŚřś (313,343,493) ȱŘŜŘǰŜŚśǰŚŖŜȱ
Cash Flows from Financing Activities ȱȱ ȱȱȱȱ 2,359,729,000 ȱřǰŗŚśǰŖŗřǰŜŝŝȱ 2,359,729,000 ȱŘǰşśŗǰŝŜřǰşŗŜȱ ¢ȱȱ ȱȱȱȱ (3,799,708,214) ȱǻřǰŘřŜǰŞŘŚǰŜŜŘǼ (3,623,954,536) ȱǻřǰŖŘŚǰşŗŜǰŚŝŗǼ ȱ – ȱǻřŞŘǰŚŘşǰřśřǼ – ȱǻřŞŘǰŚŘşǰřśřǼ ȱȱ ȱȱȱ (1,439,979,214) ȱǻŚŝŚǰŘŚŖǰřřŞǼȱ (1,264,225,536) ȱǻŚśśǰśŞŗǰşŖŞǼ Net Increase/(Decrease) in Cash and Cash Equivalents 668,265,699 ȱǻřŞŝǰśŜŗǰŖŗřǼ 633,518,987 ȱǻřşŞǰŜŝŞǰŝŚśǼ Cash and Cash Equivalents at the beginning of the Year 22 (443,164,197) ȱǻśśǰŜŖřǰŗŞŚǼ (432,098,787) ȱǻřřǰŚŘŖǰŖŚŘǼ Cash and Cash Equivalents at the end of the Year 22 225,101,502 ȱǻŚŚřǰŗŜŚǰŗşŝǼ 201,420,200 ȱǻŚřŘǰŖşŞǰŝŞŝǼ
ȱȱȱȱȱȱȱŝŘȱȱŗŖŝȱȱȱȱȱȱȱȱǯ
Singer (Sri Lanka) PLC Annual Report 2009 71 Notes to the Financial Statements
Year ended 31st December 2009 ȱ ŗ ȱ page 72 1. Corporate Information Note 2 ęȱȱ page 73 1.1 Reporting Entity Note 3 page 80 1.1.1 General ȱ Ś ȱ page 80 ȱ ȱǻȱǼȱȱȱȱȱ¢ȱ¢ȱ ȱ ś ȱ page 81 ȱȱȱȱȱǯȱȱȱ Ĝȱȱȱ¢ȱȱȱȱǯȱřŘŖǰȱǯȱȱ ȱ Ŝ ȱ¡ page 81 ǯȱȱȱ ȱǻȱǼǰȱȱŘǰȱȱȱ ȱ ŝ ȱ page 82 ȱȱȱȱȱȱȱȱȱǯ Note 8 ȱȱęȦǻǼȱȱ¢ȱ ȱȱȱȱ ȱȬȱǻȱȱ ȱ¡Ǽ page 82 ȱ ȱȱȱȱȱȱȱȱȱȱ ǰȱȁȱ¢ȂȱȱȱȱǻȱǼȱ ȱ ȱş ęȱȱ¡ page 82 ȱȱȱ ȱ¢ȱȱȁȱ Ȃȱȱȱȱ ȱȱŗŖ ȱ¡ȱ¡ page 83 ȱȱȱȱȱǻȱǼȱȱ ȱ ŗŗ ȱȱ page 84 ȱȱ¢ǰȱȱȱǻǼȱǯ ȱ ŗŘ ¢ǰȱȱǭȱ page 85 1.1.2 Companies in the Group ȱ ŗř ȱ page 88 Subsidiary ȱ ŗŚ ȱȱ¢ȱȬȱ¢ page 89 ȱ ȱ¢Ȭ ȱ¢ǰȱȱȱǻǼȱǯǰȱ ȱ ȱ ŗś ȱȱ¢ȱȱ page 90 ȱȱŗşȱȱŘŖŖŚȱȱȱȱȱ ȱ ŗŜ ȱ page 92 ǯȱŗŝȱȱŗşŞŘȱȱȱȱȱȱ ȱ ŗŝ page 93 ȱŞȱ ¢ȱŘŖŖŚǯ ȱ ŗŞ ȱȱȱȱ page 93 Associates (Equity Accounted Investees) ȱ ŗş ȱȱȱ page 94 ȱ ȱȱȱȱ ǰȱ ȱȱȱ Note 20 ȱȱȱȱ page 95 ȱȱȱȱȱȱȱDZ ȱ Řŗ ȱ page 95 ȱ ȱȱ¢ȱǯ Note 22 ȱȱȱ page 95 ȱ ȱ ȱǻǼȱǯȱ Note 23 ȱ page 96 ¢ȱǻǼȱǯ ȱ ŘŚ ȱ page 96 ȱ ȱȱȱ¢ȱǯȱȱȱȱȱ ȱ Řś ȱ page 97 ȱ¢ȱȱŘŖȱ ȱŘŖŖŞǯ ȱ ŘŜ ȱȱȱǭȱ page 97 ȱ ȱȱȱȱȱȱȱȱȱǯ ȱ Řŝ ȱ¡ page 101 ȱ ȱȱȱȱȱȱȱȱ ȱȱ Note 28 ȱęȱ page 101 ȱȱȱȱęȱ¢ǰȱ ȱȱȱ ȱ Řş ȱȱȱ¢ page 102 řŗȱǯ Note 30 ȱ page 102 ȱ řŗ ȱ¢ page 103 1.1.3 Principal Activities and Nature of Operations Company Note 32 page 103 ȱ ȱȱ¢ǰȱȱȱȱȱȱ¢ȱ Note 33 ȱȱȱȱ page 103 ȱȱȱȱȱ ȱǰȱ ȱ řŚ ȱȱ page 103 ȱǰȱȱǰȱǰȱ ȱ řś ȱȱȱȬȱ ȱȱȱȱȱȱ ȱȱȱ Ȧ¢ page 103 ȱȱȱȱǯȱ ȱ řŜ ȱȱĞȱȱȱȱ page 104 Subsidiary ȱ řŝ ȱ¢ȱ page 104 ȱ ȱȱȱȱȱǻǼȱǯǰȱȱ Note 38 ȱ ȱ ¢ȱȱ page 107 ęȱȱȱȱȱȱȱ¢ȱǰȱǰȱ ȱȱȱȱȱ¢ȱĴȱȱǰȱȱ ǰȱȱȱȱȱȱęǯȱ ȱ ǰȱȱȱǻǼȱǯȱȱǯ
72 Singer (Sri Lanka) PLC Annual Report 2009 1.1.4 Parent Enterprise and Ultimate Parent Enterprise ȱȱȱȱȱȱȱȱ ȱ ȱ¢ȇȱȱȱȱȱ ȱȱ ȱDZ ǻȱǼȱǯȱȱ¢ȇȱȱȱ Ȋȱ ȱŗřȱȬȱȱȱȱ ȱȱȱ¢ȱȱȱ ȱǰȱ Ȋȱ ȱŘŞȱȬȱȱȱȱęȱ ȱȱȱȱȱǰȱǯ Ȋȱ ȱřśȱȬȱ
1.1.5 Number of Employees 1.2.5 Foreign Currency Translation ȱ ȱȱȱ¢ȱȱȱ ȱȱȱȱȱȱ ȱ ȱȱȱȱȱ¢ȱȱ ¢ȱ ȱŗǰŗŗŜȱǻŘŖŖŞȱȬȱŗǰŗŚŝǼǰȱ¢ȱȬȱŗǰŖŚśȱǻŘŖŖŞȱȬȱŗǰŖŜşǼǯ ȱȱȱ¢ȱȱȱȱȱȱȱȱ ǯȱ¢ȱȱȱȱȱ 1.1.6 Date of Authorisation of Issue ȱȱȱȱȱȱȱȱȱ ȱ ȱȱȱȱȱ¢ȱȱřŗȱȱ ȱȱȱ¢ȱȱȱ¡ȱȱȱȱ ŘŖŖşȱ ȱȱȱȱȱȱ ȱȱ ǯȱȬ¢ȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱŖŞȱȱŘŖŗŖǯ ȱȱȱȱȱ¢ȱȱȬȱȱ ȱ¡ȱȱȱȱȱȱȱȱȱǯȱ ȱ ŗǯŘȱȱȱȱ ȱ¡ȱěȱȱȱȱȱ 1.2.1 Statement of Compliance ȱȱęȱȱǯ ȱ ȱȱȱȱȱȱȱȱ ȱȱȱȱȱǻǼǰȱȱ¢ȱ Řǯȱ ęȱȱ ȱ ȱȱȱȱȱȱȱ ȱ ȱȱȱȱȱ ȱȱȱ¢ȱ ǻ ǼȱȱȱȱȱȱȱȱǯȱŖŝȱ ȱ¢ȱȱ ǰȱȱȱȱ ȱȱȱȱ ȱŘŖŖŝȱȱȱȱȱȱȱȱ ȱȱ¢ǯȱȱȱȱȱȱ ȱǯȱŗśȱȱŗşşśǯ ęȱȱȱ ȱȱȱ¢Ȃȱǯ
ȱ ŗǯŘǯŘȱȱȱȱȱ ȱ ȱȱȱȱȱȱȱȱ Ȃȱ¢ȱ ȱ ȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱǰȱȱ ȱȱȱ¡ȱȱȱȱȱ ¢ȱȱȱȱȱȱȱȱȱǯȱ ȱȱ¢ǰȱȱǭȱǰȱ ȱȱȱ ȱȱȱȱ¡ȱȱȱȱȱȱȱ ȱ Řǯŗȱȱȱȱ ȱǯ 2.1.1 Subsidiaries ȱ ȱȱȱȱ¢ȱȱ ǯȱȱ 1.2.3 Functional and Presentation Currency ¡ȱ ȱȱ ȱȱȱ ȱȱȱȱęȱ ȱ ȱȱȱȱȱȱȱȱ ȱȱȱȱȱ¢ȱȱȱȱȱęȱ ȱ ȱȱȱȱ¢ȱȱȱ¢ȱ ȱȱǯȱȱȱȱȱȱȱ ȱȱ¢ǯ ȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱǯ 1.2.4 Use of Estimates and Judgements 2.1.2 Associates (Equity Accounted Investees) ȱ ȱȱȱȱȱȱ¢ȱ ȱȱȱȱȱȱǰȱ ȱ ȱȱȱȱȱ ȱȱ ȱȱ ȱȱȱȱěȱȱȱȱ ęȱĚǰȱȱȱǰȱȱȱęȱȱ ȱȱȱȱȱȱȱǰȱ ȱǯȱęȱĚȱȱȱȱ¡ȱ ǰȱȱȱ¡ǯȱȱȱ¢ȱěȱ ȱȱ ȱȱ ȱŘŖƖȱȱśŖƖȱȱȱȱ ȱȱǯ ȱȱȱ¢ǯȱȱȱȱȱȱ ȱ¢ȱȱȱȱȱȱȱ ȱ ȱȱ¢ȱȱȱ ȱȱ ȱȱȱ¢ȱȱǯȱȱȱ ȱȱǯȱȱȱȱȱȱ ȱȱȱȱ Ȃȱȱȱȱ ȱȱȱȱȱ ȱȱȱȱȱȱ ȱȱ¡ȱȱ¢ȱȱȱ¢ȱ ȱȱěȱ¢ȱȱȱȱȱȱȱȱȱ ȱǰȱȱȱȱȱęȱĚȱ ȱȱȱȱȱȱȱěȱȱȱ ȱȱȱȱȱęȱĚȱǯȱ ȱȱǯ ȱȱ ȇȱȱȱȱ¡ȱȱȱȱ ȱ ȱȱęȱȱȱȱ ȱ¢ȱȱǰȱȱ¢ȱȱȱȱ ¢ȱȱȱȱȱ¢ȱȱ ȱȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱęȱěȱȱȱ ȱȱ¡ȱȱȱ¡ȱȱȱ ȱȱȱ ȱȱȱȱ¢ȱȱȱȱȱǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 73 2.1.3 Transactions Eliminated on Consolidation (b) Subsequent Costs ȱ Ȭȱȱȱǰȱȱ¢ȱȱ ȱ ȱȱȱȱȱȱȱȱȱ¢ǰȱȱǭȱ ȱȱ¡ȱȱȱȬȱȱ ȱȱȱȱȱ¢ȱȱȱȱȱ ȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱęȱȱ ǯȱȱȱȱȱȱ ȱȱȱ ȱĚ ȱȱȱ ȱȱȱȱȱȱ ȱ¢ȱȱȱȱȱȱ ȱ¢ǯȱȱ¢ȱȱȱȱȱ ȱȱȱȱ¡ȱȱȱ Ȃȱȱȱȱ ȱȱǯȱȱȱȱȱ¢ȬȬ¢ȱȱ ǯȱȱȱȱȱȱȱȱ ¢ȱ ȱ¢ǰȱȱǭȱȱȱȱȱęȱȱ ȱȱǰȱȱ¢ȱȱȱ¡ȱȱȱȱȱ ȱȱǯȱ ȱȱǯȱ (c) Depreciation ȱ ŘǯŘȱȱȱȱȱȱȱ ȱ ȱȱȱȱęȱȱȱȱȱȬ ȱ ȱęȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱ ȱȱ¡ȱȱ ȱȱ¢ǰȱȱǭȱǯȱȱȱȱȱ ȱȱȱȱȱȱȱȱ¢ȱȱ ǯ ȱȱ¢ȱȱȱȱȱȱ ȱ ȱ ȱȱȱȱȱȱ DZȱ ȱǯ ȱ ȱřŝǯśȱȱśŖȱ¢ȱ ȱ ȱŖśȱ¢ 2.2.1 Property, Plant & Equipment ǰȱĴȱȱ ȱŗŖȱ¢ȱ ȱ ȱȱ¢ǰȱȱǭȱȱȱȱȱ ȱȱ¢ ȱŗŖȱ¢ȱ ȱȱȱȱȱȱ ȱ ȱŖśȱ¢ ȱȱ¡ȱȱȱ ȱȱȱȱ ȱȱȱ ȱŖŚȱȱŗŖȱ¢ ȱǯȱ ȱȱȱ ȱŖśȱ¢ (a) Cost and Valuation ȱ ȱȱȱ¢ǰȱȱǭȱȱȱ¢ȱ ȱ ȱȱȱȱȱ ȱȱȱȱ ȱȱǯȱȱȱ¡ȱ¢ȱ ȱȱȱȱȱȱȱȱȱȱȱȱ Ĵȱȱȱȱȱȱǯȱȱ ȱȱęȱȱȱȱȱȱȱȱȱȱȱ Ğ ȱȱȱȱȱȱ¢ȱȱȱȱ ȱǯ ȱȱȱȱȱȱȱǯȱȱ ȱ ȱǰȱȱȱȱȱȱȱ ȱȱȱȱ ȱȱȱȱȱ ȱȱȱȱǯȱ ěȱ ȱȱȱȱȱȱ¢ȱȱ ȱȱǰȱȱȱȱ¢ȱ¢ȱęȱ (d) Derecognition ǯȱȱȱȱ¢ǰȱȱǭȱȱȱ ȱ ȱȱȱ¢ǰȱȱǭȱȱȱȱ ¢ȱǰȱȱȱȱȱȱȱ ȱȱȱȱȱ ȱȱȱȱęȱȱ ȱǯȱ ¡ȱȱȱȱȱǯȱ ȱȱȱȱ ȱ ȱȱȱ¢ȱȱȱȱȱȱ ȱȱȱȱȱȱȱ¢ȱȱ ȱȱȱȱȱȇȱ¢ȱȱȱ ȱȱȱȱ ȱȱ¢ȱȱȱ ȱȱȱȱȱȱȱȱȱ ¢ǰȱȱǭȱȱȱȱȱȱ ȱ ǰȱ ȱ ȱ¢ȱȱȱȱ¡ǯȱ ȱ ȁȱ Ȃȱȱęȱȱǯ ȱȱȱȱȱȱȱȱȱ ȱ¡ȱȱȱȱ ȱ ǯ 2.2.2 Intangible Assets ȱ ȱȱȱȱȱȱȱȱȱȱȱ ȱ ȱȱȱ¢ȱȱȱȱȱěȱ ȱęȱ ȱĚ ȱȱȱ¢ȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱ ȱȱȱȱ¢ȱȱȱ ȱ ȱȱȱ¢ȱȱ¢ǯȱȱȱ ȱǯȱřŝȱȱ ȱǯȱ ȱȱ ȱ ȱȱȱȱęȱȱǯ ęȱȱȱȱȱȱȱȱȱ ȱȱȱȱǯȱ
74 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements ȱ ȱȱȱȱȱȱȱȱȱȱ ȱ ȱȱȱȱȱę¡ȱȱȱȱ ȱęȱȱęǯ ȱȱȱȱȱȱ ȱȱ ȱȱȱȱ ȱȱȱȱȱȱȱȱȱęȱ ȱ ȱȱ ȱęȱȱȱȱȱ ȱȱȱǯȱ ȱȱȱ ȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱ ȱȱęȱȱȱȱȱȱ ¢ȱȱǯȱȱȱȱȱȱ ȱǯ ȱȱȱȱȱȱ ȱȱęȱ ȱȱȱ ȱȱȱȱȱęȱ¢Ȭǯȱ ȱ ȱȱȱȱȱǰȱ ȱȱ ȱȱȱ¡ȱȱȱȱȱ¡ȱĴȱ ¢ȱȱȱȱȱ ȱȱ ȱ ȱȱȱȱȱęȱȱȱ ȱȱȱȱǰȱȱęȱȱęȱ ȱȱȱȱȱ¢ȱȱȱȱ ǯȱȱȱȱȱȱȱȱȱ ȱȱǰȱȱǰȱȱȱȱȱȱ ȱȱȱ¢ȱȱȱȱȱȱ ȱǯȱȱ¡ȱȱȱ ȱȱȱȱǯȱ ȱ ȱęȱȱȱȱȱęȱȱȱȱȱ ȱ ȱ ȱȱȱȱȱȱȱȱȱ Ȭȱȱȱȱȱȱǰȱȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱ¢ȱȱȱȱǯ ȱȱȱȱȱȱȱȱȱȱ DZ ȱ ȱȱȱȱȱȱȱ ȱęȱ Hire Purchase Receivables ȱȱȱ DZ ȱ ȱȱřȱȱŚȱȱ ȱȱȱȱ ȱ ȱ ȱ śŖƖȱȱȱȱȱȱ¢ȱǯ
ȱĞ śȱ¢ ȱ ȱśȱȱȱȱ ȱ ȱȱ¡¢ȱȱ śȱ¢ ȱ ŗŖŖƖȱȱȱȱȱȱ¢ȱǯ
ȱȱ ȱęȱȱȱȱȱȱ Singer Finance (Lanka) Ltd. ȱ¢ȱȱ¢ȱȱȱȱȱ ȱ ȱȱȦȱȱȱȱǯ ȱȱǯȱȱȱȱȱǯȱ ȱ ȱśȱȱȱȱ ȱ ȱȱȱȱȱȱȱȱȱ ȱ śŖƖȱȱȱȱȱȱ¢ȱǯ ȱȱȱȱȱěȱ ȱȱȱ ȱ ȱŝȱȱǭȱ ȱȱȱȱ¢ȱȱȱȱȱ ȱ ŗŖŖƖȱȱȱȱȱȱ¢ȱǯ ȱȱȱȱęȱȱȱ ȱȱȱȱ ǯ ȱ ȱ ȱŗśŖȬŗŞŖȱ¢ ŘŖƖ ȱ ȱȱ ȱęȱȱȱȱ ȱ ȱŗŞŗȬŘŗŖȱ¢ ŚŖƖ ȱȱȱȱȱěȱȱȱȱ ȱ ȱŘŗŗȬŘŚŖȱ¢ ŜŖƖ ȱȱ ȱ¢ȱȱȱǯȱ ȱ ȱȱȱȱȱȱȱǰȱȱ¢ȱ ȱȱŘŚŗȱ¢ȱȱȱ ŗŖŖƖ ȱ ȱȱĞȱȱȱ 2.2.4 Investments ¢ȱȱȱřŗȱȱŘŖŖśǯȱ ǰȱȱȱȱ 2.2.4.1 Non-Current Investments ěȱȱȱŚŗȱȬȱ ȱȱǰȱȱȱȱ ȱ Ȭȱȱȱ¢ȱȱȱǯȱ ȱ ȱȱęȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱ ¢ǰȱȱ¢ȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱȱ ȱĞȱȱȱȱ¢ǯȱȱ ȱȱȱ¢ȱȱȱ¢ȱȱȱ ȱȱȱ¢ǯ ȱǯȱ
2.2.3 Trade and Other Receivables 2.2.4.2 Current Investments ȱ ȱȱȱȱȱȱȱ¢ȱȱȱ Marketable Securities ȱȱȱȱȱȱȱȱȱǯ ȱ ȱȱȱȱȱ ȱȱȱȱȱ ȱ ȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱǯ ȱȱǰȱȱȱȱȱȱȱ ǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 75 ȱ ȱȱȱ ȱȱȱ ȱȱ 2.2.7 Impairment of Assets ȱ ȱ ȱȱȱȱȱȱȱȱȱȱ ȱ ȱ¢ȱȱȱȱ¢ȂȱȬęȱȱ ȱȱ ȱȱȱȱ¢ȱǯȱȱȱ ȱȱȱȱȱ¡ȱȱȱ ȱ ȱȱȱȱ¢ȱȱȱȱȱȱ ȱȱȱȱȱȱ ȱȱȱȱ ȱȱȱȱȱȱǰȱȱ¡ȱȱȱ ȱȱǯȱ ȱ¢ȱȱȱ¡ǰȱȱ ȱȱȱȱȱǯȱ ȱȱȱȱȱȱȱȱǰȱ ȱȱȇȱȱȱȱǯ 2.2.5 Inventories ȱ ȱȱȱȱȱȱȱȬȱȱ ȱ ȱȱȱȱȱ ȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱ ȱǰȱĞȱȱȱ ȱȱȱ ȱǯȱ ȱȱȱȱǰȱȱȱȱȱ ȱ ȱȱǯȱȱȱȱȱȱȱ Ě ȱȱȱȱȱȱȱȱȱȬ¡ȱ ȱȱȱȱ¢ȱȱȱȱȱȱ ȱȱȱĚȱȱȱȱȱ ȱȱȱȱȱȱ¡ǯ ȱȱȱȱ¢ȱȱȱȱęȱȱȱǯȱ ȱȱȱǰȱȱȱȱǰȱȱȱ ȱ ȱȱȱȱ¢ȱȱ¢ȱȱȱȱȱ ȱȱȱǯ ȱDZ ȱ ȱȱȱȱȱȱȱ¢ȱȱ ȱ Ȭ ȱȱȱȱęȬȱęȬȱ ȱȱȱȱȬȱȱ¡ȱȱȱ ǯ ȱǯȱ ȱȱȱȱ ȱ ȱ ȱęȱȱǯȱȱȱȱȱȱȱȱ ȱȱȱǻ¡ȱ¢Ǽ Ȭ ȱȱǯ ȱȱȱȱȱȱȱȱȱȱȱ ȱ ȱȱ ȱȱȱȱȱǰȱ ȱǯȱȱȱȱȱȱ¢ȱȱ ȱȱȱȬȬȱȱ ȱȱȱȱȱ ȱ¡ȱȱȱȇȱ¢ȱȱȱȱ¡ȱ ȱȱȱ¢ȱ¢ ȱȱę¡ȱȱ ȱ¢ȱȱȱ ȱȱȱǰȱȱ ȱȱȱȱ ȱȱȱǰȱȱȱȱȱȱ Ȭ ȱ¢ǯ ȱǯ ȬȬ Ȭ ȱȱǯ ȱȱ ȱȱȱȱȱ 2.3 Liabilities and Provisions ȱȱȱȱȱȱ ȱ ȱęȱȱȱȱȱȱȱ ȱȱȱȱ ȱȱȱ ȱȱȱȱ¢ȱȱȱȱ Ȭ ǻȱǼǯ ȱȱ¢ȱȱȱȱȱǯȱȬȱ ȱ Ȭ ȱȱȱ ȱȱǯ ȱȱȱȱȱȱȱȱ¢ȱȱ ȱȱ¢ȱȱȱȱȱǯ Provisions for Inventory ȱ ęȱȱȱȱȱȱȱȱ ȱ ȱ ȱȱȱȱȱȱȱȱ ȱȱ¢ȱȱ¢ȱȱ¢ǯ ȱȱǯ
2.2.6 Cash and Cash Equivalents 2.3.1 Provisions ȱ ȱȱȱȱȱęȱȱȱȱǰȱ ȱ ȱȱȱȱǰȱȱȱȱȱȱȱǰȱȱ ȱȱȱȬȱ¢ȱȱǰȱ ¢ȱȱȱȱȱȱȱȱȱ ¢ȱȱȱ ȱȱȱȱȱȱ ȱȱȱ¢ǰȱȱȱȱȱȱȱȱĚ ȱ ȱęȱȱȱȱȱǯ ȱȱęȱ ȱȱȱȱĴȱȱǯȱ ȱ ȱȱȱȱȱĚ ȱǰȱȱȱȱ 2.3.1.1 Provisions for Warranties ȱȱȱȱȱȱȱȱȱȱ ȱ ȱȱȱ ȱȱȱ ȱȱ ȱȱȱȱĞǯȱ ¢ȱȱȱȱȱǯȱȱȱ ȱȱȱȱ ¢ȱȱȱȱ ȱȱȱ ȱȱȱȱȱǯȱ
76 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements Trade and Other Payables 2.4 Income Statement ȱ ȱȱȱ¢ȱȱȱȱȱǯ 2.4.1 Revenue Recognition ȱ ȱȱȱȱȱ¡ȱȱȱȱȱȱ Capital Commitments and Contingencies ȱȱęȱ ȱĚ ȱȱȱ¢ȱȱȱ ȱ ȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱ¢ȱǯȱȱȱȱȱȱȱȱ ǯ ȱȱȱȱȱǰȱȱȱȱ ȱ ǰȱȱȱȱȱ¡ǯȱȱ ȱ ŘǯřǯŘȱȱȱęȱ ȱęȱȱȱȱȱȱȱȱ ȱ ŘǯřǯŘǯŗȱȱęȱęȱ ȱȱDZ ȱ ȱęȱęȱȱȱȬ¢ȱęȱȱȱ ȱȱęȱȱǯȱȱ¢ȱȱȱ ȱ ǻǼȱȱȱȱ ȱǻȱȱǼ ȱȱȱȱȱȱęȱęȱȱ ȱ ȱȱȱȱȱȱȱȱ ȱȱ ȱȱȱȱȱȱęȱęȱȱȱȱȱ ęȱȱȱ ȱȱ ȱȱȱȱ ȱǯȱȱęȱęȱȱȱȱ ȱȱȱ¢ǰȱȱ¢ȱȱȱȱ ¢ȱȱęȱ¢ȱȱȱȱȱȱȱȱ ȱǰȱȱȱȱȱȱȱȱ ȱȱȱǻǼȱȱȱȱ¢ȱ ȱȱȱȱ¢ǰȱȱȱȱȱ ȱŗŜǯ ȱȱ ȱȱȱȱȱȱ ȱȱȱȱȱ¢ǯ ȱ ȱȱȱȱȱȱȱ ȱǰȱ¢ȱȱǰȱ¢ȱȱȱ ȱ ǻǼȱȱȱȱ ȱǻ ȱȱǼ ȱǯȱȱȱȱȬȱȱȱȱȱȱ ȱ ȱȱȱȱěȱȱǰȱȱȱȱȱȱ ȱȱȱȱęȱ¢ǯȱ ȱȱǯȱȱȱęȱȱȱȱ ȱ ȱ¢ȱȱȱ¡¢ȱǯ ȱȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱǯ ȱ ŘǯřǯŘǯŘȱȱęȱȱȱȬȱ¢ȇȱ Provident Fund/ Mercantile Services Provident Society and (c) Interest - Other ȱ ¢ȇȱȱ ȱ ȱȱȱȱȱęȱȱȱȱȱȱ ȱ ȱęȱȱȱȱȱȬ¢ȱęȱ ǻȱȱȱȱěȱ¢ȱȱȱǼǯ ȱȱ ȱȱ¢ȱ¢ȱę¡ȱȱȱ ȱȱ¢ȱȱ ȱȱȱȱȱȱ (d) Dividends ȱȱ¢ȱȱǯȱ¢ȱȱȱ ȱ ȱȱȱȱȱęȱȱȱ ȱȱ ȱȱȱ¢ȇȱȱȦȱ ȱȱȱȱȱǯ ȱȱ¢ȱȱ¢ȇȱȱ
ȱȱȱ ȱȱȱȱǯȱ (e) Service Fee Income on Hire Purchase ȱ¢ȱȱŗŘƖǰȱŗŘƖȱȱřƖȱȱȱ ȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱ¢ȱȱȱ¢ȇȱȱ ȱȱȱȱȱȱǯȱ ȱȱȱ ǰȱȱȱȱ¢ȱȱȱ ȱ¢ȱȱȱȱ ȱȱȱȱȱ ¢ȇȱȱȱ¢ȱȱȱȱȱȱ ȱȱǰȱȱȱȱȱ ¡ȱȱęȱȱȱ ȱǯ ȱȱȱȱȱȱǯ
2.3.3 Discontinued Operations (f) Income on Suraksha and Extended Warranty Scheme ȱ ȱȱȱȱȱȱȱȱ Ȃȱ ȱ ȱȱȱȱȱȱȱǯȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱǯȱ ȱȱȱȱȱȱȱȱȱ ȱȱȱȱǰȱȱȱȱ¢ȱȱ ȱȱ ȱ (g) Others ȱǯȱęȱȱȱȱȱ ȱ ȱȱȱȱȱȱȱǯ ȱȱȱ ȱȱȱȱȱȱȱ ȱęȱȱȱȱǰȱȱǯȱȱȱȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱ ȱęȱȱȱȱǰȱȱȱ ¢ǰȱȱǭȱȱȱȱȬȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱęȱ ȱȱȱȱȱȱȱǯ ȱǰȱȱȱȱȱȱǰȱȱ ¢ȱȱȱȱȱȱȱȱ¡ǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 77 2.4.2 Revenue Recognition Policy of Singer 2.4.4 Taxation Finance (Lanka) Ltd. ȱ ȱ¡ȱ¡ȱȱȱȱȱȱ (a) Hire Purchase ¡ǯȱ ȱ¡ȱ¡ȱȱȱȱęȱȱȱ ȱ ȱ¡ȱȱȱȱȱȱȱȱ ¡ȱȱȱ¡ȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱ ¢ȱȱ¢ǰȱȱ ȱȱȱȱȱȱ¢ǯȱ ȱȱȱȱȱǯȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱ ǻǼȱȱȱ¡ ȱȱȱȱȱȱ ȱęȱȱ ȱ ȱȱ¡ȱȱȱȱ¡ȱ¡ȱ¢ȱȱȱ¡ȱ ȱǰȱȱȱȱȱȱȱǰȱ ȱȱȱ¢ǰȱȱ¡ȱȱȱȱ¢ȱ so as to produce a constant periodic rate of return on the ȱȱȱȱǰȱȱ¢ȱȱȱ¡ȱ Ȃȱȱȱȱȱȱȱǯȱ ¢ȱȱȱȱȱ¢ǯ
(b) Lease ȱ ǻǼȱȱȱ¡ ȱ ȱ¡ȱȱȱȱȱȱȱȱ ȱ ȱ¡ȱȱȱȱȱȱȱǰȱ ȱȱȱȱȱȱȱȱȱ ȱȱ¢ȱěȱ ȱȱ¢ȱ ȱȱȱȱȱǯȱȱȱȱ ȱȱȱȱȱȱęȱȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱ¡ȱǯ ȱȱȱȱȱ ȱęȱȱȱǰȱ ȱȱȱȱȱȱǰȱȱȱȱ ȱ ȱ¡ȱȱȱȱȱȱ¡ȱ ȱȱȱȱȱȱȱȱȱȂȱ ¢ȱěȱ¡ȱȱȬ ȱȱȱȱȱȱǯ zȱ ¢ȱěȱȱȱȱȱȱ ȱȱȱȱȱȱȱȱȱȱȱ (c) Interest on Government Securities ȱȱȱȱȱěȱȱȱ ȱ ȱȱȱȱęȱȱȱȱȱȱȱ ȱęȱȱ¡ȱęȱȱDzȱȱ ĴȱĚȱȱȱȱȱȱǯ zȱ ¢ȱěȱȱȱȱȱ ȱȱ¢Ȭȱǰȱȱȱ¡ȱ (d) Commissions, Service Charges and Others ȱȱȱȱȱȱ¢ȱěȱ ȱ ȱ ǰȱȱȱȱȱȱȱȱ ȱȱȱȱȱDzȱȱ ȱȱǯ
zȱ ¡ȱ¢ȱěȱȱȱȱȱ 2.4.3 Expenditure Recognition ȱȱ ǯ (a)ȱȱ¡ȱȱȱȱęȱȱȱȱȱȱ ȱ ȱȱ¡ȱȱȱȱȱȱ¡ȱȱȱȱ ȱȱȱȱ ȱȱȱȱȱȱ ȱȱȱ¡ȱęȱ ȱȱȱȱ ȱȱęȱȱȱǯȱȱ¡ȱȱ ȱȱ¢ȱěȱȱȱǯȱȱ¢ȱ ȱȱȱȱȱȱȱȱȱȱ ȱȱȱ¡ȱȱȱ ȱȱȱȱȱ ¢ǰȱȱǭȱȱȱȱȱȱĜ¢ȱȱȱ ȱȱȱȱȱȱ¡ȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱęȱȱȱ¢ǯ ȱȱȱ¡ȱęȱ ȱȱǯ (b)ȱȱȱȱȱȱȱȱȱ ȱ ȱ ȱ¡ȱȱȱȱȱȱȱȱ ǰȱȱȱȱȱȱȱȱȱ ¡ȱȱȱȱ¡ȱȱȱȱȱ¢ȱ ȱ¡ȱȱȱ¢ȱȱȱȱȱ ěȱ ȱ¢ȱǰȱȱȱ¡ȱ ȱȱȱ ¢ȇȱȱȱȱȱȱ ȱȱȱ¢ȱȱ¢ȱȱȱǯ ȱȱǯ ȱ ¡ȱ ȱȱȱȱȱȱȱ Net Finance Cost ȱȱȱȱȱ¡ȱȱȱȱ ȱ ȱȱȱȱȱȱȱ ęȱȱȱȱȱȱȱȱȱ¢ȱȱ¢ȱȱ ǰȱȱȱȱȱȱȱ¢ǯ ȱȱȱǯ
ȱ ȱȱȱȱ¢ȱȱ ȱȱ ȱȱȱȱȱ¢ǯȱ
78 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements ȱ ŘǯŚǯśȱȱ ȱ ȱ ȱȱ¡ȱȱȱȱȱȱ ȱ ȱȱȱȱȱȱ¡ȱȱȱȱ ȱȱȱȱȱ¢ǰȱȱǭȱȱ ȱ ȱ¢ȱȱǯ ȱ ȱȱȱȱ ǯ ȱ ȱȱȱȱȱȱȱȱ ȱ ŘǯŚǯŜȱȱȱȱĞȱȱȱȱ ȱȱȱǯȱ ȱ ȱȱȱȱĞȱȱȱȱȱ ȱȱȱȱ ȱ¢ȱȱ 2.4.9 Cash Flow Statement ȱȱȱȱǯȱ ȱ ȱȱĚ ȱȱȱȱȱȱȱ ȱǯ 2.4.7 Earnings per Share
ȱ ȱ ȱȱȱȱȱȱǻǼȱȱȱ 2.4.10 New Standards and Interpretations not yet Adopted ¢ȱǯȱȱȱȱȱ¢ȱȱȱ ȱ ȱ ȱȱȱȱȱȱȱȱ ęȱȱȱĴȱȱ¢ȱȱȱȱ ȱȱ ȱ ȱȱȱ ǰȱ ȱȱ ¢ȱ¢ȱȱ ȱȱȱ¢ȱȱ ěȱȱȱȱȱȱȱĞȱŗȱ ¢ȱ ȱȱȱǯȱ ŘŖŗŗǯȱ¢ȱȱȱȱȱȱȱȱ ȱȱȱȱȱ¢ȱȱȱěȱ 2.4.8 Segment Reporting ȱȱ¢ȱȱřŗȱȱŘŖŖşǯ ȱ ȱȱȱȱȱȱȱȱ ȱ ȱȱȱȱȱȱȱȱȱ ȱ ȱȱȱȱŚŚȱȬȱȱ DZȱ ȱǻȱǼȱȱȱȱȱ ȱǻȱŚŚǼ ȱȱ ȱȱȱȱȱ ȱȱ ȱȱȱȱŚśȱȬȱȱ DZȱ ǻ ȱǼȱ ȱȱȱȱȱȱ ȱȱȱǻȱŚśǼ ȱȱȱěȱȱȱȱȱǯȱ ȱȱȱȱȱȱȱȱ ȱ ȱ¢ȱȱ¢ȱȱȱȱȱȱȱ Ȃȱȱȱ ȱǯȱȱ ȇȱ ȱěȱȱȱǯȱ ǰȱȱȱ ¢ȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱȱęȱȱȱȱ ȱȱȱȱȱȱ ȇȱȱȱ ȱȱǯȱ ȱȱǯ
ȱ ȱȱȱȱȱȱȱ¢ȱ Ĵȱȱȱȱȱ ȱȱȱȱȱȱ ȱȱȱȱǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 79 3. Revenue Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ 3.1 Summary ȱȱ 11,962,242,590 ŗřǰŞŖŚǰŚŖŞǰşŝŝȱ 11,357,743,157 ŗřǰŚřŚǰśŞřǰŘřŚȱ DZȱ ȱ¡ (72,918,477) ȱǻŝŖǰřŗŜǰŗŖŗǼ (72,918,477) ȱǻŝŖǰřŗŜǰŗŖŗǼ 11,889,324,113 ŗřǰŝřŚǰŖşŘǰŞŝŜȱ 11,284,824,680 ŗřǰřŜŚǰŘŜŝǰŗřřȱ
3.2 Revenue ȱȱ 9,993,830,000 ŗŗǰřřŝǰŜŜŞǰŖŖŖ 9,993,830,000 ŗŗǰřřŝǰŜŜŞǰŖŖŖ ȱȱ 1,895,494,113 ŘǰřşŜǰŚŘŚǰŞŝŜ 1,290,994,680 ŘǰŖŘŜǰśşşǰŗřř 11,889,324,113 ŗřǰŝřŚǰŖşŘǰŞŝŜ 11,284,824,680 ŗřǰřŜŚǰŘŜŝǰŗřř
4. Segment Information 4.1 Segment Products and Services ȱȱ ȱȱ ȱ ȱȱȱ ȱǯ ȱ ǰȱǰȱǰȱȱȱȱȱǯ ȱ ǰȱȱǰȱȱ£ǰȱĴȱǰȱȬȱȱǯ ȱȱ ȱǰȱ ȱǰȱȱǰȱ ȱǰȱȱǰȱ ȱȱǯ ǰȱȱȱȱǰȱȱȱǯ ȱȱ¢ȱǰȱȱȱȱȱǯ Transportation ȱȱȱ¢ǯ ȱǰȱ¢ȱǯ ȱȱǻǼȱǯ ǰȱ ȱȱȱȱǯ
4.2 Segmental Analysis of Revenue is as Follows: Consolidated Company 2009 2008 2009 2008 Rs. '000 ǯȱȇŖŖŖ Rs. '000 ǯȱȇŖŖŖ ȱȱ 1,570,999 ȱŗǰŞŘŚǰřŚŜȱ 1,570,999 ȱŗǰŞŘŚǰřŚŜȱ ȱ 2,733,812 ȱřǰřŞŘǰřşŜȱ 2,733,812 ȱřǰřŞŘǰřşŜȱ ȱ 3,896,247 ȱŚǰŚŗşǰşşŖȱ 3,896,247 ȱŚǰŚŗşǰşşŖȱ ȱȱ 712,467 ȱşŖŜǰŖşřȱ 712,467 ȱşŖŜǰŖşřȱ 680,366 ȱşŜşǰřŞŜȱ 680,366 ȱşŜşǰřŞŜȱ 524,751 ȱŝŝŗǰśŖŝȱ 524,751 ȱŝŝŗǰśŖŝȱ Transportation 756,728 ȱŜŖŘǰśśŞȱ 756,728 ȱŜŖŘǰśśŞȱ 409,455 ȱŚŞŝǰşşŗȱ 409,455 ȱŚŞŝǰşşŗȱ ȱȱǻǼȱǯ 604,499 ȱřŜşǰŞŘŜȱ – – 11,889,324 ȱŗřǰŝřŚǰŖşřȱ 11,284,825 ȱŗřǰřŜŚǰŘŜŝȱ
80 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements ȱ Śǯřȱȱȱ¢ȱȱęȱȱ¡ȱȱȱ DZ Consolidated Company 2009 2008 2009 2008 Rs. '000 ǯȱȇŖŖŖ Rs. '000 ǯȱȇŖŖŖ ȱȱ 22,925 ȱŗřǰŞŖşȱ 22,925 ȱŗřǰŞŖşȱ ȱ 46,090 ȱŘşǰŝŝśȱ 46,090 ȱŘşǰŝŝśȱ ȱ 52,570 ȱŘŞǰŝřŜȱ 52,570 ȱŘŞǰŝřśȱ ȱȱ 9,454 ȱŜǰŗřŝȱ 9,454 ȱŜǰŗřŝȱ 8,132 ȱŝǰŗŘŝȱ 8,132 ȱŝǰŗŘŝȱ 6,295 ȱśǰśŖŜȱ 6,295 ȱśǰśŖŜȱ Transportation 4,310 ȱŗǰşŞřȱ 4,310 ȱŗǰşŞřȱ 6,379 ȱřǰŜŝřȱ 6,379 ȱřǰŜŝřȱ ȱȱǻǼȱǯ 68,049 ȱřŞǰŜŘśȱ – – ȱȱȱȱ¢ȱȱ – ȱŞŖǰŚŘŝȱ – ȱŚŖŞǰşŚşȱ ȱȱȦ¢ 528 ȱŗŗřȱ 10,514 ȱŘŚǰŜśŞȱ ȱȱęȱȱ¢ȱȱ (891) ȱřşǰŗŜřȱ – – 223,841 ȱŘśśǰŖŝŚȱ 166,669 ȱśřŖǰřśŘȱ
4.3ȱȱȱȱȱ¢ȱȱȱȱȱȱȱȱǯ
5. Other Income Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱ ȱ Ȭȱ 528,019 ȱşǰŜŜŘǰřŖŞȱ 513,619 ȱşǰŜśŝǰŞŖŞȱ ȱ Ȭȱ – – 10,000,000 ȱŗśǰŖŖŖǰŖŖŖȱ ȦǻǼȱȱȱȱ¢ǰȱȱǭȱ (398,977) ȱşǰŚŘŜǰŚşřȱ (398,977) ȱşǰŚŝŝǰŜŞŞȱ ȱ 62,178,197 ȱŚŞǰŞşşǰŜşşȱ 17,928,510 ȱŗŝǰŖŖŜǰşŗŖȱ ȱȱ ȱȬȱȱȱǻǼȱǯ – – 38,122,238 – ȱȱȱ 34,444,860 ȱŚǰŜŚŜǰřśŞȱ 34,444,860 ȱŚǰŜŚŜǰřśŞȱ ȱȱȱȱ ȱȱ ȱȱȱ¢ȱȱ ȱǻȱŗśǯřȦŗśǯŞǼ – ȱŞŖǰŚŘŜǰşŘŗȱ – ȱŚŖŞǰşŚŞǰŞŚŜȱ 96,752,099 ȱŗśřǰŖŜŗǰŝŝşȱ 100,610,250 ȱŚŜŚǰŝřŝǰŜŗŘȱ DZȱȱȱȱ¢ȱȱ – ȱǻşǰśŚŚǰŗŞŗǼ – – 96,752,099 ȱŗŚřǰśŗŝǰśşŞȱ 100,610,250 ȱŚŜŚǰŝřŝǰŜŗŘȱ
6. Other Expenses ȱȱ¢ǰȱȱǭȱȱȱ 185,626,124 ŗŜŜǰŖşŚǰŝśŘ 179,937,611 ŗŜŖǰŞřřǰşřŗ ȱȱ ȱȱ ȱȱȱ 23,829,976 ŗŚǰŚřŚǰřŝş 20,398,948 ŗŗǰřŞŝǰśŞŝ 209,456,100 ŗŞŖǰśŘşǰŗřŗ 200,336,559 ŗŝŘǰŘŘŗǰśŗŞ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 81 7. Finance Cost Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ 7.1 Finance Cost ȱȱĞȱȱ 893,762,997 ȱŗǰŗřŖǰśŘŚǰŘşŖȱ 875,180,976 ȱŗǰŖŞśǰŖřŝǰŖŗŗȱ ȱȱȱ¢ȱȱ 46,566,856 ȱŜŗǰŖřŝǰřşřȱ 35,347,269 ȱřśǰŜŜŖǰŝŝřȱ ȱȱȱ 247,522,919 ȱŗŝŚǰŚşŜǰŖřśȱ – – ȱȱȱ¢ȱ¢ 5,084,918 ȱŗŚǰŝřśǰŘŖśȱ 5,084,918 ȱŗŚǰŝřśǰŘŖśȱ ȱȦǻ Ǽȱȱȱȱȱ¢ 654,655 ȱǻŗǰŘŜŞǰŘŖŜǼ 654,655 ȱǻŗǰŘŜŞǰŘŖŜǼ 1,193,592,345 ȱŗǰřŝşǰśŘŚǰŝŗŝȱ 916,267,818 ŗǰŗřŚǰŗŜŚǰŝŞř
7.2 Finance Income ȱ ȱ Ȭȱȱȱ 27,052,723 ȱřǰşŗŝǰŘŝşȱ 76,634,009 ȱŝǰŗşŗǰŞŝřȱ ȱ Ȭȱ 58,268,214 ȱśřǰřŞşǰşşŞȱ 36,715,823 ȱŘŞǰřŝŗǰşŚŖȱ 85,320,937 śŝǰřŖŝǰŘŝŝ 113,349,832 řśǰśŜřǰŞŗř Net Finance Cost 1,108,271,408 ŗǰřŘŘǰŘŗŝǰŚŚŖ 802,917,986 ŗǰŖşŞǰŜŖŖǰşŝŖ
Şǯȱ ȱȱęȦǻǼȱȱ¢ȱȱ ȱȬȱǻȱȱ ȱ¡Ǽ Consolidated 2009 2008 ȱȱęȦ ǯȹ ǯȹ ǻǼ ȱȱ¡ ęȦǻǼ ęȦǻǼ ȱȱ¢ȱǯ ––– ȱřŝǰŚŝŘǰŞŗŞȱ ¢ȱǻǼȱǯ ȱǻŗǰşŚŜǰŘŘśǼ ȱǻŗǰŖśŚǰşŖŝǼ (891,318) ȱŗǰŜşŖǰŚŖśȱ ȱǻŗǰşŚŜǰŘŘśǼ ȱǻŗǰŖśŚǰşŖŝǼ (891,318) ȱřşǰŗŜřǰŘŘřȱ
şǯȱ ęȱȱ¡ Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱĞȱȱȱ¡ȱȱȱ DZ ¡ȱȇȱ 22,577,269 ȱřŖǰŞŖŘǰşŗŝȱ 17,524,089 ȱŘŝǰŜśśǰŝŞŞȱ Ȭ¡ȱȇȱ 3,405,000 ȱŘǰśŞŖǰŖŖŖȱ 2,685,000 ȱŘǰřŚŖǰŖŖŖȱ ȇȱȱ Ȭȱ¢ȱ 1,373,924 ȱŗǰřŗśǰŝşŘȱ 975,000 ȱŞŝśǰŖŖŖȱ ȱ Ȭȱȱȱ 586,200 ȱŜŜŜǰŝśŖȱ 425,000 ȱśŖřǰŞśŖȱ ȱȱȱȱȱ 134,220,403 ȱŗŖśǰŖŖŖǰśŘŘȱ 92,410,414 ȱŞŝǰŝřśǰŘŖŖȱ ȱȱĴȱě 47,197,423 ȱŗřǰŚśŖǰśŗŚȱ 7,345,514 ȱřǰśśŗǰŞŞśȱ ȦǻȱȱǼȱȱȱ ¢ 2,585,883 ȱǻŘǰşŖśǰŝŜŚǼ 2,585,883 ȱǻŘǰşŖśǰŝŜŚǼ ȱȱǻȱşǯŗǼ 1,577,755,377 ȱŗǰŞŗřǰŜřśǰşśŘȱ 1,470,621,608 ȱŗǰŝŜŞǰŖŖŚǰśřŞȱ ȱȱ 287,444,159 ȱŘŚŚǰŗŚşǰŗŚŝȱ 282,784,559 ŘŞřǰŚŚŖǰşŚŖ Donations 210,744 ȱřŝŞǰŖŖŖȱ 210,744 ȱřŝŞǰŖŖŖȱ ȱȱ ȱ 23,829,976 ȱŗŚǰŚřŚǰřŝşȱ 20,398,948 ȱŗŗǰřŞŝǰśŞŝȱ ȱȱ¢ǰȱȱǭȱ 201,259,195 ȱŗŝşǰŝşŘǰŜŚśȱ 195,570,682 ȱŗŝŚǰśřŗǰŞŘŘȱ
9.1 Personnel Cost ěȱ 1,391,604,825 ŗǰŜŗŝǰŝŜŖǰŖŝş 1,289,338,359 ŗǰśŝŜǰşŘŞǰŜŝŘ ¢ȱȱęȱ 24,673,044 şǰŖŝŜǰŞŜŚ 24,673,044 şǰŖŝŜǰŞŜŚ ęȱęȱȱȱȬȱȱ ¢ 33,134,160 řŝǰŞŖřǰŞřŘ 32,286,418 řŜǰśŞŘǰŞřŘ ęȱȱȱȱȬȱǰȱȱȱ 128,343,348 ŗŚŞǰşşśǰŗŝŝ 124,323,787 ŗŚśǰŚŗŜǰŗŝŖ 1,577,755,377 ŗǰŞŗřǰŜřśǰşśŘ 1,470,621,608 ŗǰŝŜŞǰŖŖŚǰśřŞ
82 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 10. Income Tax Expense Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Current Tax Expense ȱ¡ȱ¡ȱȱ¢ȱ ȱȱȱȱȱȱǻȱŗŖǯŗǼ 160,177,319 ȱŗŗŖǰŗŝśǰŜśŜȱ 134,507,291 ȱŗŗŖǰŗŜŞǰŗśŞȱ ǻǼȦȱȱȱȱȱȱ 5,174,202 – (2,782,363) – ¡ȱȱȱ 1,000,000 ŘǰśŜŖǰŚŜŜ 1,000,000 ȱŗǰśŖŖǰŖŖŖȱ 166,351,521 ŗŗŘǰŝřŜǰŗŘŘ 132,724,928 ŗŗŗǰŜŜŞǰŗśŞ
Deferred Tax Charge/(Credit) ȱȱȱȱ¢ȱěȱǻȱŗŖǯŘǼ (54,528,905) ȱǻŘřǰŗŘŖǰŗŜŝǼ (46,572,562) ȱǻŘŝǰŞřŞǰŝŘśǼ 111,822,616 ȱŞşǰŜŗśǰşśś 86,152,366 ȱŞřǰŞŘşǰŚřřȱ ȱȹ ȱ ŗŖǯŗȱȱȱ ȱȱ¡ȱ¡ȱȱȱȱȱȱę Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ęȱȱ¡ 223,841,335 ȱŘśśǰŖŝŚǰŘŘśȱ 166,668,968 ȱśřŖǰřśŘǰřřŖȱ ȱȱǻęǼȦȱȱ 891,318 ȱǻřşǰŗŜřǰŘŘřǼ – – ȱ ȱ 10,000,000 ŗśǰŖŖŖǰŖŖŖ – – ȱȱęȱ 234,732,653 ŘřŖǰşŗŗǰŖŖŘ 166,668,968 ȱśřŖǰřśŘǰřřŖȱ ȱ ȱ¡ 652,875,976 ŚŞşǰŚŝřǰşşśȱ 412,296,101 ȱŚŖŖǰřŝŘǰřśŜȱ ȱ¡ȱȱ¡ (425,638,552) ȱǻřŘşǰŗśŗǰŖşŞǼ (190,337,929) ȱǻŗŞŞǰŗŘŗǰŗşşǼ ȱȱȱȱ¡ (10,000,000) ȱǻŗŖśǰŖŞşǰŘŘşǼ (10,000,000) ȱǻŚřŘǰŗŖŜǰŜśŚǼ 451,970,077 ȱŘŞŜǰŗŚŚǰŜŝŖȱ 378,627,140 ȱřŗŖǰŚşŜǰŞřřȱ DZȱ¡ȱȱȱ¢ – ȱŘŚǰřśŘǰŗŜřȱ – – ¡ȱę 451,970,077 ȱřŗŖǰŚşŜǰŞřřȱ 378,627,140 ȱřŗŖǰŚşŜǰŞřřȱ ȱ¡ȱȱřśƖȱǻŘŖŖŞȱȬȱřśƖǼ 158,189,527 ȱŗŖŞǰŜŝřǰŞşŘȱ 132,519,499 ȱŗŖŞǰŜŝřǰŞşŘȱ ȱ¢ȱ¢ 1,987,792 ȱŗǰśŖŗǰŝŜŚȱ 1,987,792 ȱŗǰŚşŚǰŘŜŜȱ ȱ ȱ¡ȱ¡ 160,177,319 ȱŗŗŖǰŗŝśǰŜśŜȱ 134,507,291 ȱŗŗŖǰŗŜŞǰŗśŞȱ
ȱ ȱ ȱ¡ȱ¡ȱȱȱȱȱ¡ȱęȱȱȱ¢ȱȱȱ ǯȱȱȱǰȱȱ¡ȱ ȱȱȱȱȱ ȱȱȱ ȱ¡ǯȱȱǻȱǼȱȱȱȱȱ ȱ¡ȱȱřśƖȱȱ¡ȱęȱ ȱěȱȱŗȱȱ ŘŖŖŜȱȱȱȱŗǯśƖȱȱ¢ȱ¢ȱȱ¡ȱȱ¢ȱ ȱěȱȱŗȱȱŘŖŖŞǯ
10.2 Deferred Tax Charge/(Credit) Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱ¡ȱȦǻǼȱȱȱȱ ȱȱȱȱȱȱȱ¢ȱě (54,528,905) ȱǻŘřǰŗŘŖǰŗŜŝǼ (46,572,562) ȱǻŘŝǰŞřŞǰŝŘśǼ (54,528,905) ȱǻŘřǰŗŘŖǰŗŜŝǼ (46,572,562) ȱǻŘŝǰŞřŞǰŝŘśǼ
10.3ȱȱȱ¡ȱȱȱȱȱȱȱěȱ¡ȱǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 83 11. Earnings per Share 11.1ȱȱȱȱȱȱȱȱ¢ȱȱȱęȱȱȱ¢ȱĴȱȱȱ¢ȱȱ¢ȱȱ ȱȱȱȱ¢ȱȱȱȱȱ¢ǯ
11.2ȱȱȱ ȱĚȱȱȱȱȱȱȱȱȱȱȱȱȱDZ Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Amounts used as the Numerator ęȱȱȱ 112,018,719 ȱŗŜśǰŚśŞǰŘŝŖȱ 80,516,602 ȱŚŚŜǰśŘŘǰŞşŝȱ ęȱĴȱȱ¢ȱȱ ȱȱȱȱȱȱȱ 112,018,719 ȱŗŜśǰŚśŞǰŘŝŖȱ 80,516,602 ȱŚŚŜǰśŘŘǰŞşŝȱ
Number of Ordinary Shares Used as Denominator ȱȱȱȱ¢ȱȱȱ ȱȱȱ ȱȱȱȱȱȱȱȱȱ 62,604,805 ŜŘǰŜŖŚǰŞŖśȱ 62,604,805 ŜŘǰŜŖŚǰŞŖśȱ ȱȱȱȱǻǯǼ 1.79 ŘǯŜŚȱ 1.29 ŝǯŗř
11.3ȱȱȱ ȱĚȱȱ ȱȱȱȱȱȱȱȱȱȱ¡ȱȱ ȱȱȱȱȱ ȱ ȱȱ¢ȱȱ ǯ
Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Amounts used as the Numerator ęȱȱȱȱ¡ȱȱ ȱȱ ȱȱȱȱ ȱȱ¢ȱȱ 112,018,719 ȱŞśǰŖřŗǰřŚşȱ 80,516,602 řŝǰśŝŚǰŖśŗ ęȱĴȱȱ¢ȱȱȱȱ ȱȱȱȱȱ¡ȱȱȱ ȱȱȱȱ ȱ ȱȱȱȱ¢ȱȱ 112,018,719 ȱŞśǰŖřŗǰřŚşȱ 80,516,602 řŝǰśŝŚǰŖśŗ
Number of Ordinary Shares Used as Denominator ȱȱȱȱ¢ȱȱȱ ȱȱȱ ȱȱȱȱȱȱȱȱȱ 62,604,805 ŜŘǰŜŖŚǰŞŖśȱ 62,604,805 ŜŘǰŜŖŚǰŞŖśȱ ȱȱȱ¡ȱȱ ȱȱȱ ȱȱȱȱ ȱȱ¢ȱȱ ȱǻǯǼ 1.79 ŗǯřŜ 1.29 ŖǯŜŖ
84 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 12. Property, Plant & Equipment 12.1 Gross Carrying Amounts - Consolidated Balance Ȧ ȦǻǼ Ȧ as at Transfers ȱ Transfers as at ŖŗǯŖŗǯŘŖŖş 31.12.2009 ǯ ǯ ǯ ǯ Rs. At Cost ȱ ȱŘŝŗǰŖŜřǰřŗřȱ ––– 271,063,313 ȱ ȱŗŝşǰŗŘŝǰŝŖŞȱ ŜŝřǰŖŖş – ȱşǰşŝśǰŘśŖȱ 169,825,467 ȱȱ ȱŗŜŝǰŖŘŝǰŖśŗȱ ȱŞǰşŖŗǰşŜřȱ –– 175,929,014 ȱȱ¢ ȱŗśŘǰŚŘşǰŜŖśȱ ȱŘǰŖşŜǰŚśŜȱ –– 154,526,061 ¢ȱȱ ȱŝśǰŞŗŚȱ ––– 75,814 ǯǯǯȱ ȱŘśŖǰŗŞŞǰŞŞśȱ ȱŞǰŖŖřǰŝŝŖȱ – ȱŘǰŘŖşǰŗŖśȱ 255,983,550 ȱ ȱŞŞǰŗřŜǰřŞŘȱ ȱřǰśŗŖǰŜŝŚȱ –– 91,647,056 ȱ ȱŗŞŖǰśŝśǰŚŚŖȱ ȱŜǰŜśŜǰśŘŝȱ –– 187,231,967 ȱȱȱ ȱřśřǰŜŞřǰŖŝśȱ ȱŗŝǰŘŚŖǰŝŖŝȱ –– 370,923,782 ȱŗǰŜŚŘǰřŖŝǰŘŝřȱ ȱŚŝǰŖŞřǰŗŖŜȱ – ȱŗŘǰŗŞŚǰřśśȱ 1,677,206,024
At Valuation ȱ ȱśŖŝǰŚŘřǰśŖŖȱ ––– 507,423,500 ȱśŖŝǰŚŘřǰśŖŖȱ ––– 507,423,500 Gross Carrying Amount Excluding Capital Work-in-Progress ȱŘǰŗŚşǰŝřŖǰŝŝřȱ ȱŚŝǰŖŞřǰŗŖŜȱ – ȱŗŘǰŗŞŚǰřśśȱ 2,184,629,524
12.2 In the Course of Construction/Development Balance Incurred ęȦ Ȧ as at Transferred Ĵȱě as at ŖŗǯŖŗǯŘŖŖş ȱ 31.12.2009 ǯ ǯ ǯ ǯ Rs. ȱȱ¢ ȱŞřŜǰşŞŚȱ ȱŗǰśŘŞǰŗşśȱ ȱŘǰřŜśǰŗŝşȱ – – Total Capital Work-in-Progress ȱŞřŜǰşŞŚȱ ŗǰśŘŞǰŗşś ŘǰřŜśǰŗŝş – – Total Gross Carrying Amount ȱŘǰŗśŖǰśŜŝǰŝśŝȱ ȱŚŞǰŜŗŗǰřŖŗȱ ȱŘǰřŜśǰŗŝşȱ ȱŗŘǰŗŞŚǰřśśȱ 2,184,629,524
12.3 Depreciation and Impairment Losses Balance ȱ Ȧ as at ȱȦ Transfers as at ŖŗǯŖŗǯŘŖŖş Transfers 31.12.2009 ǯ ǯ ǯ Rs. ȱ ȱŜŝǰŞŚşǰŖŘŖȱ ȱŜǰŞŗşǰŚŖŗȱ – 74,668,421 ȱ ȱŞŗǰŗŚŜǰŖŗŗȱ ȱŗřǰŚŘřǰşşŝȱ ȱśǰŜŞřǰŖŜřȱ 88,886,945 ȱȱ ȱŞŜǰŘşśǰşŚŞȱ ȱŗŘǰşśŜǰŘśŞȱ – 99,252,206 ȱȱ¢ ȱŝşǰŘŝŜǰŗŞŘȱ ȱşǰŞŞŖǰŖŘşȱ – 89,156,211 ¢ȱȱ ȱŝśǰŞŗŚȱ –– 75,814 ǯǯǯȱ ȱŗřŝǰřŚŞǰŚŞŖȱ ȱřŞǰśŞřǰŜŖŚȱ ȱŘǰŗŜŚǰŗŖśȱ 173,767,979 ȱ ȱřŗǰśŚŚǰŘŘŝȱ ȱŗŞǰśřŜǰŝřśȱ – 50,080,962 ȱ ȱŜŝǰŚŞŘǰŞŝŞȱ ȱřŞǰŗŖŞǰşŘřȱ – 105,591,801 ȱȱȱ ȱŗśŚǰŚŝŗǰŘŚşȱ ȱŜŘǰşśŖǰŘŚŞȱ – 217,421,497 Total Depreciation and Impairment Losses ȱŝŖśǰŚŞşǰŞŖşȱ ȱŘŖŗǰŘśşǰŗşśȱ ȱŝǰŞŚŝǰŗŜŞȱ 898,901,836
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 85 12.4 Carrying Amounts Group 2009 2008 Rs. ǯȱ ȱ 778,304,188 ȱşřŜǰŞŗŝǰŚŜŚȱ ȱ 507,423,500 ȱśŖŝǰŚŘřǰśŖŖȱ ȱȬȬ – ȱŞřŜǰşŞřȱ ȱ¢ȱȱȱ¢ǰȱȱǭȱ 1,285,727,688 ȱŗǰŚŚśǰŖŝŝǰşŚŝȱ
12.5ȱȱȱȱęȱ¢ǰȱȱ ȱȱ¢ǰȱȱǭȱȱȱȱȱȱȱǯȱŚŜǰŘŚŜǰŗŘŘȦȬȱ ǻŘŖŖŞȱȬȱǯȱřŗŞǰśŘŞǰřŜŝȦȬǼȱȱȱǯ
12.6ȱȱ¢ǰȱȱǭȱȱȱ¢ȱȱȱȱȱȱ¢ȱȱȱǯȱřřŝǰśşŗǰśŝşȦȬȱ ǻŘŖŖŞȱȬȱǯȱŗŞŝǰřŖŖǰŘŚřȦȬǼǯ
12.7ȱȱȱ ȱȱȱȱęȱ¢ȱŘŖŖŞȱ¢ȱǯȱȱǰȱȱ ȱǯȱȱȱȱ ȱȱ ȱȱȱȱȱȱȱȱěȱȱ ȱȱřŗȱȱŘŖŖŞǯȱȱȱ ȱȱȱȱȱȱȱȱ¡ȱȱǯȱȱȱȱȱȱȱ ȱȱȱ ȱȱǯ
12.8 ȱȱȱȱȱȱȱřŗȱȱŘŖŖşȱȱǯȱŗŖřǰřřŞǰŝŞŘȦȬȱǻŘŖŖŞȱȬȱǯȱŗŖřǰřřŞǰŝŞŘȦȬǼǯ
12.9 ȱȱȱȱȱȱȱȱřŗȱȱŘŖŖşȱȱȱȱǯȱśŘřǰŞŘŝǰśŚśȦȬȱǻŘŖŖŞȱȬȱǯȱśŘřǰŞŘŝǰśŚśȦȬǼǯȱ
12.10 ȱȱȱȱ¢ȱȱȱȱȱ ȱȱȱȱȱ ȱǯ
ǯ ȱȱ ŗśǰŜřřǰŖŝŗ ȱ¡ ŗŞśǰŜŘŜǰŗŘŚ ŘŖŗǰŘśşǰŗşś
12.11 Gross Carrying Amounts - Company Balance Ȧ Ȧ as at Ȧ Transfers as at ŖŗǯŖŗǯŘŖŖş 31.12.2009 ǯ ǯ ǯ Rs. At Cost ȱ ȱŘŝŗǰŖŜřǰřŗŚȱ –– 271,063,314 ȱ ȱŗŝśǰřŘŜǰŜŞŖȱ ȱŜŝřǰŖŗŖȱ ȱşǰşŝśǰŘśŖȱ 166,024,440 ȱȱ ȱŗśŝǰŝŜśǰŗŚŘȱ ȱŞǰŞŘŜǰŝŘřȱ – 166,591,865 ȱȱ¢ ȱŗśŘǰŚŘşǰŜŖśȱ ȱŘǰŖşŜǰŚśŜȱ – 154,526,061 ¢ȱȱ ȱŝśǰŞŗŚȱ –– 75,814 ǯǯǯȱ ȱŘŚŗǰŜśŜǰŘşřȱ ȱŝǰŜśŜǰŘŖŖȱ ȱŘǰŘŖşǰŗŖśȱ 247,103,388 ȱ ȱŞŞǰŗřŜǰřŞŘȱ ȱřǰśŗŖǰŜŝŚȱ – 91,647,056 ȱ ȱŗŞŖǰśŝśǰŚŚŖȱ ȱŜǰŜśŜǰśŘŝȱ – 187,231,967 ȱȱȱ ȱřřŞǰŝŞşǰŚŗřȱ ȱŗřǰşśřǰŚŖřȱ – 352,742,816 ȱŗǰŜŖśǰŞŗŞǰŖŞřȱ ȱŚřǰřŝŘǰşşřȱ ȱŗŘǰŗŞŚǰřśśȱ 1,637,006,721
At Valuation ȱ śŖŝǰŚŘřǰśŖŖ –– 507,423,500 śŖŝǰŚŘřǰśŖŖ –– 507,423,500 Gross Carrying Amount Excluding Capital Work-in-Progress ȱŘǰŗŗřǰŘŚŗǰśŞřȱ ȱŚřǰřŝŘǰşşřȱ ȱŗŘǰŗŞŚǰřśśȱ 2,144,430,221
86 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 12.12 In the Course of Construction/Development
Balance Incurred ęȦ Ȧ as at Transferred Ĵȱě as at ŖŗǯŖŗǯŘŖŖş ȱ 31.12.2009 ǯ ǯ ǯ ǯ Rs. ȱȱ¢ ȱŞřŜǰşŞŚ ŗǰśŘŞǰŗşś ȱŘǰřŜśǰŗŝşȱ – – Total Capital Work-in-Progress ȱŞřŜǰşŞŚȱ ȱŗǰśŘŞǰŗşśȱ ȱŘǰřŜśǰŗŝşȱ – – Total Gross Carrying Amount ȱŘǰŗŗŚǰŖŝŞǰśŜŝȱ ȱŚŚǰşŖŗǰŗŞŞȱ ȱŘǰřŜśǰŗŝşȱ ȱŗŘǰŗŞŚǰřśśȱ 2,144,430,221
12.13 Depreciation and Impairment Losses
Balance ȱ Ȧ Ȧ as at ȱȦ ǻǼȱ Transfers as at ŖŗǯŖŗǯŘŖŖş Transfers ȱ 31.12.2009 ǯ ǯ ǯ ǯ Rs. ȱ ȱŜŝǰŞŚşǰŖŘŖȱ ȱŜǰŞŗşǰŚŖŗȱ –– 74,668,421 ȱ ȱŞŗǰŖŞśǰşŝŝȱ ȱŗřǰŖŜřǰŝşŗȱ – ȱśǰŜŞřǰŖŜřȱ 88,466,705 ȱȱ ȱŞŚǰŚŖŖǰŘśŗȱ ȱŗŘǰŖŗşǰŚŚŖȱ –– 96,419,691 ȱȱ¢ ȱŝşǰŘŝŜǰŗŞŗȱ ȱşǰŞŞŖǰŖŘşȱ –– 89,156,210 ¢ȱȱ ȱŝśǰŞŗŚȱ ––– 75,814 ǯǯǯȱ ȱŗřŚǰŘŞŝǰśŚŚȱ ȱřŜǰŞŞŗǰşŞŝȱ – ȱŘǰŗŜŚǰŗŖśȱ 169,005,426 ȱ ȱřŗǰśŚŚǰŘŘŝȱ ȱŗŞǰśřŜǰŝřśȱ –– 50,080,962 ȱ ȱŜŝǰŚŞŘǰŞŞŖȱ ȱřŞǰŗŖŞǰşŘřȱ –– 105,591,803 ȱȱȱ ȱŗŚşǰŖŜśǰśŘŝȱ ȱŜŖǰŘŜŖǰřŝŜȱ –– 209,325,903 Total Depreciation and Impairment Losses ȱŜşśǰŖŜŝǰŚŘŗȱ ȱŗşśǰśŝŖǰŜŞŘȱ – ȱŝǰŞŚŝǰŗŜŞȱ 882,790,935
12.14 Carrying Amounts
2009 2008 Rs. ǯ ȱ 754,215,786 ȱşŗŖǰŝśŖǰŜŜřȱ ȱ 507,423,500 ȱśŖŝǰŚŘřǰśŖŖȱ ȱȬȬ – ȱŞřŜǰşŞřȱ Total Carrying Amount of Property, Plant & Equipment 1,261,639,286 ȱŗǰŚŗşǰŖŗŗǰŗŚŜȱ
12.15 ȱȱęȱ¢ǰȱȱ¢ȱȱ¢ǰȱȱǭȱȱȱȱȱȱȱǯȱŚŘǰśřŜǰŖŖşȦȬȱ ǻŘŖŖŞȱȬȱǯȱŘŘŜǰŝŗŞǰŖŗŜȦȬǼȱȱȱǯ
12.16 ¢ǰȱȱǭȱȱȱ¢ȱȱȱȱȱȱ¢ȱȱȱǯȱřřŘǰřŞŝǰşŗŜȦȬȱ ǻŘŖŖŞȱȬȱǯȱŗŞŝǰŘŖŖǰŘŚřȦȬǼǯ
12.17 ȱȱ ȱȱȱȱęȱ¢ȱŘŖŖŞȱ¢ȱǯȱȱǰȱȱ ȱǯȱȱȱȱ ȱȱ ȱȱȱȱȱȱȱȱěȱȱ ȱȱřŗȱȱŘŖŖŞǯȱȱȱ ȱȱȱȱȱȱȱȱ¡ȱȱǯȱȱȱȱȱȱȱ ȱȱȱ ȱȱǯ
12.18 ȱȱȱȱȱȱřŗȱȱŘŖŖşȱȱǯȱŗŖřǰřřŞǰŝŞŘȦȬȱǻŘŖŖŞȱȬȱǯȱŗŖřǰřřŞǰŝŞŘȦȬǼǯ
12.19 ȱȱȱȱȱȱȱȱřŗȱȱŘŖŖşȱȱȱȱǯȱśŘřǰŞŘŝǰśŚśȦȬȱǻŘŖŖŞȱȬȱǯȱśŘřǰŞŘŝǰśŚśȦȬǼǯ
12.20 ȱȱȱȱ¢ȱȱȱȱȱ ȱȱȱȱȱ ȱǯ
ǯ ȱȱ ŗśǰŜřřǰŖŝŗ ȱ¡ ŗŝşǰşřŝǰŜŗŗ ŗşśǰśŝŖǰŜŞŘ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 87 13. Intangible Assets Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ 13.1 Trade Mark Summary Cost ȱȱȱȱȱȱ 79,762,500 ȱŝşǰŝŜŘǰśŖŖȱ 79,762,500 ȱŝşǰŝŜŘǰśŖŖȱ DZȱȱ ȱ – – – – ȱ¢ȱ 79,762,500 ŝşǰŝŜŘǰśŖŖ 79,762,500 ŝşǰŝŜŘǰśŖŖ
ȱ ŗřǯŘȱȱĞ ȱ ȱ ȱ ȱ Summary Cost ȱȱȱȱȱȱ 83,585,162 ȱŜŖǰŜŗŜǰŞŝŞȱ 67,762,281 ȱŚŞǰŜřşǰŗŚŜȱ Ȧ ȱȱȱ 15,915,919 ȱŘŘǰşŜŞǰŘŞŚȱ 12,738,425 ȱŗşǰŗŘřǰŗřŚȱ ȱȱȱȱȱȱ 99,501,081 ȱŞřǰśŞśǰŗŜŘȱ 80,500,706 ȱŜŝǰŝŜŘǰŘŞŖȱ
Amortisation ȱȱȱȱȱȱ 21,692,666 ȱŝǰŘśŞǰŘŞŝȱ 14,245,210 ȱŘǰŞśŝǰŜŘřȱ ȱȱȱȱ 17,429,976 ȱŗŚǰŚřŚǰřŞŘȱ 13,998,948 ȱŗŗǰřŞŝǰśŞŝȱ ȱȱȱȱȱȱ 39,122,642 ȱŘŗǰŜşŘǰŜŜşȱ 28,244,158 ȱŗŚǰŘŚśǰŘŗŖȱ
Carrying Amount ȱȱȱȱȱȱ 61,892,496 ȱśřǰřśŞǰśşŗȱ 53,517,071 ȱŚśǰŝŞŗǰśŘřȱ ȱȱȱȱȱȱ 60,378,439 ȱŜŗǰŞşŘǰŚşřȱ 52,256,548 ȱśřǰśŗŝǰŖŝŖȱ
ȱ ŗřǯřȱȱĞ ȱȱȱȱ ȱ ȱ ȱ Cost ȱȱȱȱȱȱ 9,093,200 ȱŞǰŗŝŘǰŚśśȱ 9,093,200 ȱŞǰŗŝŘǰŚśśȱ Ȧ ȱȱȱ – ȱşŘŖǰŝŚśȱ – ȱşŘŖǰŝŚśȱ ȱȱȱ (9,093,200) – (9,093,200) – ȱȱȱȱȱȱ – ȱşǰŖşřǰŘŖŖȱ – ȱşǰŖşřǰŘŖŖȱ ȹȱ 13.4 Other Intangible Assets Externally Acquired Cost ȱȱȱȱȱȱ 32,000,000 – 32,000,000 – Ȧ ȱȱȱ – ȱřŘǰŖŖŖǰŖŖŖȱ – ȱřŘǰŖŖŖǰŖŖŖȱ ȱȱȱ – – – – ȱȱȱȱȱȱ 32,000,000 ȱřŘǰŖŖŖǰŖŖŖȱ 32,000,000 ȱřŘǰŖŖŖǰŖŖŖȱ
Amortisation ȱȱȱȱȱȱ – – – – ȱȱȱ 6,400,000 – 6,400,000 – ȱȱȱȱȱȱȱ 6,400,000 – 6,400,000 –
Carrying Amount ȱȱȱȱȱȱ 32,000,000 – 32,000,000 – ȱȱȱȱȱȱ 25,600,000 řŘǰŖŖŖǰŖŖŖ 25,600,000 řŘǰŖŖŖǰŖŖŖ
Net Carrying Amount 165,740,939 ŗŞŘǰŝŚŞǰŗşř 157,619,048 ȱŗŝŚǰřŝŘǰŝŝŖȱ
88 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 13.5 SISIL Trademark ȱ ȱ¢ȱȱȱȁ ȂȱȱȱȱŘŖŖŖǰȱȱȱǯȱśśȱǯȱȱ¢ȱȱȱȱ řŗȱȱŘŖŖşȱȱǯȱŚŗǰŘśŖǰŖŖŖȦȬǯȱȱ¢ȱȱ¢ȱȱȱȁSISILȂȱȱȱȱȱȱȱȱ ȱȱǯȱȱȱȱȱȱȱȱȱȱȱȱȱęȱȱȱȱȱ ȱȱ ȱȱȱȱ¡ȱȱřŖȱ¢ȱȱȱ¢ȱȱȱȱȱȱȱȱ ȱȱǯȱȱȱȱȱǰȱ¢ǰȱǰȱǰȱȱȱȱȱȱ¢ȱȱȱ ȱȱȱ¢ǰȱȱ¢ȱȱȱȱȱȱȱĞȱȱȱȱ¢ǯȱ ȱ ȱȱȱȱȱȱ¢ȱȱȱȱřŗȱȱŘŖŖşǯ
ȱ ȱȱ ȱȱ¡ȱęȱ¢ȱ ŗŘƖ ȱ ȱȱȱ ŘśƖ ȱ ȱȱȱ ŗŚƖ ȱ ęȱ ȱȱĞȱ¢ȱŘŖŗŚȱȱ řƖ
13.6 UNIC Trademark ȱ ȱ¢ȱȱȱȁ ȂȱȱȱŘŖŖŜǰȱȱȱǯȱřŞǰśŗŘǰśŖŖȦȬǯȱȱȱȱ ȱȱȱȱȱȱ ȱȱȱȱ¢ȱȱȱȱřŗȱȱŘŖŖşȱȱǯȱřŞǰśŗŘǰśŖŖȦȬǯȱȱȱȱȱȱȱ ȱȱęȱȱȱȱȱȱȱȱȱȱȱȱȱ¢ǰȱȱ¢ȱȱȱ ȱȱȱȱĞȱȱȱȱ¢ǯȱ ȱȱȱȱȱȱȱȱȱȱ řŗȱȱŘŖŖşǯ
ȱȱ ȱȱ ȱȱ¡ȱęȱ¢ ȱȱ ȱŘŖŗŖȱǭȱŘŖŗŗȱȱ řśƖ ȱ ȱŘŖŗŘȱȱ ŘśƖ ȱ ȱŘŖŗřȱǭȱŘŖŗŚȱȱ ŘŖƖ ȱ ȱȱȱ ŘŞƖ ȱ ȱȱȱȱ ŗŚƖ ȱ ęȱ ȱȱĞȱ¢ȱŘŖŗŚȱȱ ŘƖȱ
13.7ȱȱȱ¢ȱȱȱȱ ǰȱȱȱȱȱ ¢¢ȱȱȱǯȱȱŘȱ ¢ȱŘŖŖŞȱȱȱ ȱȱȱȱ ȱȱ ¢¢ȱȱȱǯȱȱǯȱřŘȱǯȱȱȱȱȱȱȱ ȱ ǰȱȱȱȱȱȱȱȱȱȱśȱ¢ȱȱȱȱȱȱŗȱ ¢ȱŘŖŖşǯ ȱȱȱ
13.8ȱȱȱ¢ȱȱȱȱĞ ȱ ȱȱȱȱ ȱǰȱȱȱǯȱřǰŞŚśǰŗśŖȦȬǯȱ ȱȱȱȱśȱ¢ǰȱȱȱȱȱȱěȱǯ
13.9ȱȱȱ¢ȱȱŗŘȱ¢ȱŘŖŖŚǰȱȱȱȱ ȱȱ ȱǭȱǯȱȱȱȱĞ ȱȱ¢ȱ ȱȱȱȱǞȱŞśŖǰŖŖŖȱǻǯȱŞŚȱȱ¡¢Ǽȱȱȱȱȱȱȱǯȱȱȱ¢ǰȱǯȱşǰŖşřǰŘŖŖȦȬȱ ǻŘŖŖŞȱȬȱǼȱȱȱǯ
14. Investment in Subsidiary - Company ¢ Holding % ȱƖ ǯȱȱ Cost of as at as at 2009 2008 Incorporation 31.12.2009 řŗǯŗŘǯŘŖŖŞ 31.12.2009 řŗǯŗŘǯŘŖŖŞ Rs. ǯ ȱȱǻǼȱǯ ȱ 100 ŗŖŖ 400,000 ŘŖŖǰŖŖŖ ȱȱŗȱ ¢ 200,000,000 ȱŘŖŖǰŖŖŖǰŖŖŖȱ ȱȱȱȱ 200,000,000 – ȱȱȱřŗȱ 400,000,000 ȱŘŖŖǰŖŖŖǰŖŖŖȱ
ȱ ǻȂȱȱȱȱřŗȱȱŘŖŖşȱȱȱȱȱ ȱǯȱŚŞŖȱȱǻŘŖŖŞȱȬȱǯȱŘŚŞȱǼǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 89 15. Investments in Equity Accounted Investees 15.1 Investment in Equity Accounted Investees - Consolidated
Share of ęȦǻǼ Consolidated Net of Carrying ¢ Holding Amount ȱ % 2009 ȱ 2008 2009 2008 Rs. ǯ ǯ Non-Quoted ¢ȱǻǼȱǯ 40 ŚŖȱ 24,541,304 ǻŞşŗǰřŗŞǼ ŘśǰŚřŘǰŜŘŘȱ ǻȇȱȱȱȱřŗǯŗŘǯŘŖŖşȱ ȱȱȱǯȱŘŚǯśȱǯȱŘŖŖŞȱȬȱŘśǯŚȱǼ ȱ ȱǻǼȱǯ 23.56 ŘřǯśŜ – –– ǻȇȱȱȱȱřŗǯŗŘǯŘŖŖşȱ ȱȱȱǯȱŗŖȱǯȱŘŖŖŞȱȬȱǯȱŗŖȱǼȱǻȱŗśǯŜǼ Total Non-Quoted Investments in Equity Accounted Investees 24,541,304 ŘśǰŚřŘǰŜŘŘȱ Net Carrying Amount of Investments in Equity Accounted Investees 24,541,304 ŘśǰŚřŘǰŜŘŘȱ
Consolidated ȹ ȱȹȱ as at ȱȱȹ 31.12.2009 ȱřŗǯŗŘǯŘŖŖŞ Rs. ǯȹ ŗśǯŘȱȱȱȱ¢ȱȱ ȱȱę Commercial Leasing Company Ltd. ȱȱ – ŘŝŞǰŗŚŘǰśŘřȱ ȱȱȱȱęȱȱȱ – řŝǰŚŝŘǰŞŗŞȱ DZȱȱȱȱȱȱȬȱ – ǻŗŖǰŜŖŚǰŜŚŜǼ ȱȇȱȱę – ŘŜǰŞŜŞǰŗŝŘȱ – řŖśǰŖŗŖǰŜşśȱ DZȱȱȱȱęȱȱȱȱȱ – ǻřŖśǰŖŗŖǰŜşśǼ – Ȯȳ
Reality (Lanka) Ltd. ȱȱ 1,432,622 ǻŘśŝǰŝŞřǼ ȱȱȱȱęȦǻǼ (891,318) ŗǰŜşŖǰŚŖśȱ DZȱȱȱȱȱȱȬȱ – Ȯȳ ȱȇȱȱęȦǻǼ (891,318) ŗǰŜşŖǰŚŖśȱ 541,304 ŗǰŚřŘǰŜŘŘȱ
15.3ȱ ȱŘŖŖŞǰȱȱǻȱǼȱȱȱřŖƖȱȱȱ¢ȱȱȱȱ¢ȱǯȱȱ¢ȱȱȱȱȱ ȱȱ¢ȱǯȱ ȱȱ¢ȱȱȱRIXȱȱǯȱȱ ȱȱȱȱ¢ȱ ěȱȱȱȱȱ¢ȱȱȱȱ¢ȱǯȱȱŗŘȱ ȱŘŖŖŞǰȱȱȱȱȱ¢ȱȱ ȱȱǯȱ
90 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements ȱ ȱǻȱǼȱȱȱȱ¢ȱěȱȱŘŖȱ ȱŘŖŖŞȱȱȱȱȱśǰřŖŘǰřŘřȱȱ¢ȱȱȱ ȱȱ¢ȱǯȱ ȱȱȱǯȱşřǯśŖȱȱǯȱ¢ȱȱȱȱȱȱȱ DZ
2009 2008 Rs. ǯ ȱ – ŚşśǰŝŜŝǰŘŖŘ Less ȱȱȱęȱȱȱȱȱȱȱȱȱ – řŖśǰŖŗŖǰŜşś ȱȱȱ – ŘřǰśŗŗǰŘřŗ ȱȱȱ – ŞŜǰŞŗŞǰřśśȱ ¢ȱȱȱ ȱȱȱȱȱ – ŚŗśǰřŚŖǰŘŞŘȱ ȱ ȱȱ – ŞŖǰŚŘŜǰşŘŗȱ
ȱ ȱęȱȱȱȱ ȱȱȱȱȱȱȱȁȱ ȂǯȱǻȱśǼ
Consolidated ȱȱ Balance as at 31.12.2009 řŗǯŗŘǯŘŖŖŞ Rs. ǯ ȱȱȱ¢ȱȱ ȱȱę 541,304 ȱŗǰŚřŘǰŜŘŘȱ ȱȱȱ¢ȱȱ ȱȱ – – ȱȱ¢ȱȱ ȱǻȱŗśǯŚǼ 24,000,000 ȱŘŚǰŖŖŖǰŖŖŖȱ ȱ¢ȱȱȱ ȱȱ¢ȱȱ ȱ 24,541,304 ȱŘśǰŚřŘǰŜŘŘȱ
15.4 Movement of Investment - Cost Ȧȹ Consolidated Balance as at ǻǼȱȹ ȱȱ ŖŗǯŖŗǯŘŖŖş ȱ ȹ 31.12.2009 ǯ ǯȹ Rs. ¢ȱǻǼȱǯ ŘŚǰŖŖŖǰŖŖŖȱ – 24,000,000 ȱ ȱǻǼȱǯȱǻȱŗśǯŜǼ Ȯȳ – Ȯȳ ŘŚǰŖŖŖǰŖŖŖ – 24,000,000
15.5 Summarised Financial Information of Equity Accounted Investee ȱ ȱ ȂȱȱȱęȦǻǼȱȱȱ¢ȱȱȱȱȱ¢ȱ ȱǯȱŞşŗǰřŗŞȦȬȱǻŘŖŖŞȱȬȱęȱȱǯȱřşǰŗŜřǰŘŘřǼǯ
Ȭ Ȭ ȱ Total Total ęȦ In thousands of Rs. Assets Asset Assets ȱ ¡ ǻǼ 2008 ¢ȱǻǼȱǯ ȱȱȱȱǻǼ ŚŖƖ ŗşŞȱ ŗŝŖǰŝŗŘȱ ŗŝŖǰşŗŖȱ ŗŖŝǰřŘŞȱ – ŗŖŝǰřŘŞȱ ŚǰŝŖŞȱ ǻŚŞŘǼ ŚǰŘŘŜȱ ŗşŞȱ ŗŝŖǰŝŗŘȱ ŗŝŖǰşŗŖȱ ŗŖŝǰřŘŞȱ – ŗŖŝǰřŘŞȱ ŚǰŝŖŞȱ ǻŚŞŘǼ ŚǰŘŘŜȱ
2009 Reality (Lanka) Ltd. (Associate) 40% 122 174,966 175,088 113,735 – 113,735 3,600 (5,828) (2,228) 122 174,966 175,088 113,735 – 113,735 3,600 (5,828) (2,228)
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 91 15.6 Investment in Equity Accounted Investees - Company
Carrying Market Value/ ¢ȹȱ ȱȦ Amount Directors’ ȹ Ȃȱ ǯȱȱ 2009 Valuation ŘŖŖŞȹ ȱ 2009 2008 Rs. Rs. ǯȹ ǯ Non-Quoted ȱ ȱǻǼȱǯȱǻȱŗśǯŝǼ 2,000,000 ŘǰŖŖŖǰŖŖŖ Ȯȳ – Ȯȳ – ¢ȱǻǼȱǯ 2,400,000 ŘǰŚŖŖǰŖŖŖ 2,400,000 2,400,000 ŘŚǰŖŖŖǰŖŖŖ ŘŚǰŖŖŖǰŖŖŖ Total Investments in Non-Quoted Associate Equity Securities 2,400,000 2,400,000 ŘŚǰŖŖŖǰŖŖŖ ŘŚǰŖŖŖǰŖŖŖ Net Carrying Amount of Investment in Equity Accounted Investees 2,400,000 2,400,000 ŘŚǰŖŖŖǰŖŖŖ ŘŚǰŖŖŖǰŖŖŖ
15.7ȱȱ ȱȱȱ ȱǻǼȱǯǰȱȱȱǯȱŘŖǰŖŖŖǰŖŖŖȦȬȱȱȱ Ĵȱěȱȱȱȱȱȱ ȱǯ
15.8ȱȱȱǻȱǼȱȱȱřŖƖȱȱȱ¢ȱȱȱȱ¢ȱǯȱȱ¢ȱȱȱȱȱ ȱȱ¢ȱǯȱ ȱȱ¢ȱȱȱRIXȱȱǯȱȱ¡ȱȱȱȱ¢ȱ ěȱȱȱȱȱ¢ȱȱȱȱ¢ȱǯȱȱŗŘȱ ȱŘŖŖŞǰȱȱȱȱȱ¢ȱȱ ȱȱǯ
ȱ ȱǻȱǼȱȱȱȱ¢ȱěȱȱŘŖȱ ȱŘŖŖŞǰȱȱȱȱȱśǰřŖŘǰřŘřȱȱ¢ȱȱȱ ȱȱ¢ȱǯȱ ȱȱȱǯȱşřǯśŖȱȱǯȱ¢ȱȱȱȱȱȱȱ DZ
2009 2008 Rs. ǯ ȱ – ŚşśǰŝŜŝǰŘŖŗ DZȱ ȱȱȱ – ŞŜǰŞŗŞǰřśś ȱ ȱȱ – ŚŖŞǰşŚŞǰŞŚŜ
ȱęȱȱȱȱ ȱȱȱȱȱȱȱȁȱ ȂȱǻȱśǼǯ
16. Other Investments 16.1 Consolidated Investments in Equity Securities - Non-Current Carrying Market Value/ ¢ ȱȦȹ Amount Directors’ ȱ Ȃȹ ǯȱȱ 2009 Valuation 2008 ȹ 2009 2008 Rs. Rs. ȱǯȱ ȱǯȹ (a) Quoted (Marketable Equity Securities) Investments with Related Parties ȱǻǼȱ 42,795 ȱŚŘǰŝşśȱ 1,428,473 2,856,566 ȱŗǰŚŘŞǰŚŝřȱ ȱŗǰŞŚŖǰŗŞśȱ Total Investments in Quoted Marketable Equity Securities 1,428,473 2,856,566 ȱŗǰŚŘŞǰŚŝřȱ ȱŗǰŞŚŖǰŗŞśȱ
(b) Non-Quoted ¢ȱ ȱȱǯ 1,665,000 ȱŗǰŜŜśǰŖŖŖȱ 17,020,000 18,683,790 ȱŗŝǰŖŘŖǰŖŖŖȱ ȱŗŞǰŜŞřǰŝşŖȱ ȱ ȱȱȱȱ 100 ȱŗŖŖȱ 41,300 41,300 ȱŚŗǰřŖŖȱ ȱŚŗǰřŖŖȱ Total Investments in Non-Quoted Equity Securities 17,061,300 18,725,090 ȱŗŝǰŖŜŗǰřŖŖȱ ȱŗŞǰŝŘśǰŖşŖȱ Total Net Carrying Amount of Other Investments - Non-Current 18,489,773 21,581,656 ȱŗŞǰŚŞşǰŝŝřȱ ȱŘŖǰśŜśǰŘŝśȱ
92 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 16.2 Company Investments in Equity Securities - Non-Current Carrying Market Value/ ¢ ȱȦȹ Amount Directors’ Ȃȹ ǯȱȱ 2009 Valuation 2008 ȹ 2009 2008 Rs. Rs. ȱǯȱ ȱǯȹ (a) Quoted (Marketable Equity Securities) Investments with Related Parties ȱǻǼȱ 42,795 ȱŚŘǰŝşśȱ 1,428,473 2,856,566 ȱŗǰŚŘŞǰŚŝřȱ ȱŗǰŞŚŖǰŗŞśȱ Total Investments in Quoted Equity Securities 1,428,473 2,856,566 ȱŗǰŚŘŞǰŚŝřȱ ȱŗǰŞŚŖǰŗŞśȱ
(b) Non-Quoted ¢ȱ ȱȱǯ 1,665,000 ȱŗǰŜŜśǰŖŖŖȱ 17,020,000 18,683,790 ȱŗŝǰŖŘŖǰŖŖŖȱ ȱŗŞǰŜŞřǰŝşŖȱ Total Investments in Non-Quoted Equity Securities 17,020,000 18,683,790 ȱŗŝǰŖŘŖǰŖŖŖȱ ȱŗŞǰŜŞřǰŝşŖȱ Total Net Carrying Amount of Other Investments - Non-Current 18,448,473 21,540,356 ȱŗŞǰŚŚŞǰŚŝřȱ ȱŘŖǰśŘřǰşŝśȱ
17. Inventories Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱ 86,233,313 ȱŜŚǰşŘŚǰśşŖȱ 86,233,313 ȱŜŚǰşŘŚǰśşŖȱ ȬȬ 21,894,175 ȱŘŝǰŞŜśǰśŜŚȱ 21,894,175 ȱŘŝǰŞŜśǰśŜŚȱ ȱ 1,635,240,695 ȱŘǰŜŖŘǰśŘŜǰŘŘŝȱ 1,635,240,695 ȱŘǰŜŖŘǰśŘŜǰŘŘŝȱ ȱȱ 226,990,131 ȱŗşŝǰŖŘŖǰŘřŜȱ 226,990,131 ȱŗşŝǰŖŘŖǰŘřŜȱ ȬȬ 90,066,197 ȱŗŘŗǰŜŘŘǰŗśŚȱ 90,066,197 ȱŗŘŗǰŜŘŘǰŗśŚȱ 2,060,424,511 ȱřǰŖŗřǰşśŞǰŝŝŗȱ 2,060,424,511 ȱřǰŖŗřǰşśŞǰŝŝŗȱ DZȱ ȱȱ ¢ (72,608,925) ȱǻŝŖǰŖŘřǰŖŚŘǼ (72,608,925) ȱǻŝŖǰŖŘřǰŖŚŘǼ ȱ ȱ ¢ (2,896,303) ȱǻśǰŚŖśǰŜşŞǼ (2,896,303) ȱǻśǰŚŖśǰŜşŞǼ Total Inventories 1,984,919,283 ȱŘǰşřŞǰśřŖǰŖřŗȱ 1,984,919,283 ȱŘǰşřŞǰśřŖǰŖřŗȱ
18. Loans Due from Related Parties Consolidated Company 2009 2008 2009 2008 Relationship Rs. ǯ Rs. ȱǯȹ ȱǻǼȱ Ĝȱ¢ 130,000,000 – 130,000,000 – ¢ȱȱǯ ȱ¢ 110,515,421 ŗŖŞǰřşŚǰŗřŖ 110,515,421 ŗŖŞǰřşŚǰŗřŖ ȱȱǻǼȱǯ ¢ – – – ȱśŜǰŖŖŖǰŖŖŖȱ 240,515,421 ŗŖŞǰřşŚǰŗřŖ 240,515,421 ŗŜŚǰřşŚǰŗřŖ
18.1ȱȱȱȱȱȱȱȱȱȱ ȱȱ¢ȱȱȱȱȱǯȱ ȱȱȱȱȱ ȱŗƖȱȱȱ¢Ȃȱěȱȱǯȱȱȱȱȱȱǯȱ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 93 19. Trade and Other Receivables 19.1 Non-Current Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Hire Debtors 1,575,178,134 ȱŗǰşŚŖǰřŚşǰŜŗřȱ 830,929,531 ȱŗǰŗŘśǰŜřŚǰŚśŝȱ DZȱȱęȱȱ ȱ (260,169,101) ȱǻŚŖŘǰŜŘşǰŗŜřǼ (121,208,435) ȱǻŘŗŞǰŘŜŖǰśŘŗǼ 1,315,009,033 ȱŗǰśřŝǰŝŘŖǰŚśŖȱ 709,721,096 ȱşŖŝǰřŝřǰşřŜȱ
Lease Rental Receivables ȱ ȱȱ 284,467,870 ȱřŞŘǰŚşŚǰśŘŜȱ – – ȱȱȱ (3,190,141) ȱǻŗřǰşŚśǰŚŘşǼ – – 281,277,729 ȱřŜŞǰśŚşǰŖşŝȱ – – ȱ (51,593,876) ȱǻŜşǰŜŜŗǰŞŖŖǼ – – 229,683,853 ȱŘşŞǰŞŞŝǰŘşŝȱ – –
Loan Debtors ȱȱȱ 191,741,120 ȱśřǰŞŜŝǰŘřŗȱ – – ȱȱȱ (990,131) ȱǻŘǰřŜřǰśŞŞǼ – – DZȱ ȱȱ ȱ ȱ (28,401,255) ȱǻşǰŜŘŘǰşŝŝǼ – – 162,349,734 ȱŚŗǰŞŞŖǰŜŜŜȱ – –
Other Receivables 211,302,704 ȱŘŗŞǰŘśŘǰŝŞŖȱ 211,302,704 ŘŗŞǰŘśŘǰŝŞŖ ȱȱ¢ȱǻȱŗşǯřǼ 121,176,748 ȱŗŝśǰşşŘǰŖŚşȱ 103,419,507 ŗśŜǰŞŖŘǰşŝŚ 332,479,452 řşŚǰŘŚŚǰŞŘş 314,722,211 ȱřŝśǰŖśśǰŝśŚȱ 2,039,522,072 ȱŘǰŘŝŘǰŝřřǰŘŚŘȱ 1,024,443,307 ȱŗǰŘŞŘǰŚŘşǰŜşŖȱ
19.2 Current Hire Debtors 2,778,837,501 ȱŚǰřśřǰŘřŜǰśşŞȱ 2,161,103,544 ȱřǰŞřŜǰŝŚŖǰśřŘȱ ȱȱȱ (1,025,946) ȱǻŗǰŚŝŜǰśşŝǼ – – DZȱȱȱęȱȱ ȱ (702,441,538) ȱǻşŜŞǰřřŖǰşŚŞǼ (482,022,167) ȱǻŝŚŚǰŖŘŗǰŜśŜǼ ȱ ȱȱȱ (89,842,489) ȱǻŗŖŖǰŘŗŝǰŗŗřǼ (82,987,740) ȱǻŞşǰŖşŚǰŘśŖǼ 1,985,527,528 ȱřǰŘŞřǰŘŗŗǰşŚŖȱ 1,596,093,637 ȱřǰŖŖřǰŜŘŚǰŜŘŜȱ
Lease Rental Receivables ȱ ȱȱ 277,881,823 ȱŘşŖǰŚŞŘǰŜŞŖȱ – – ȱ (86,753,414) ȱǻŗŖřǰŗŞŘǰŖŚŖǼ – – ȱȱȱ (5,612,178) ȱǻŗŚǰŚŚŞǰśŞŚǼ – – 185,516,231 ȱŗŝŘǰŞśŘǰŖśŜȱ – –
Loan Debtors ȱȱȱ 1,397,434,571 ȱŗśŚǰśŞŚǰŞşŖȱ – – DZȱ ȱȱ ȱ (228,206,123) ȱǻřŜǰŚŖŖǰŖŖŝǼ – – ȱ 34,135,487 ȱŘŞǰŚşŗǰŗřŝȱ – – ȱ 1,203,363,935 ȱŗŚŜǰŜŝŜǰŖŘŖȱ – – DZȱȱȱȱǭȱȱ (26,293,430) ȱǻŘŗǰşŚŝǰŜŗśǼ – – 1,177,070,505 ȱŗŘŚǰŝŘŞǰŚŖśȱ – –
Other Debtors ȱ 517,969,355 ȱŝŘşǰŖŖşǰśŝŖȱ 517,969,355 ȱŝŘşǰŖŖşǰśŝŖȱ ȱȱȱ (18,927,546) ȱǻŗşǰŝŗŚǰŖśşǼ (18,927,546) ȱǻŗşǰŝŗŚǰŖśşǼ ȱȱȱ 750,447,002 ȱŞŗŘǰŚŚŝǰŖşŜȱ 701,726,980 ȱŝśŞǰŝŘŗǰŝŜŖȱ ȱȱȱ (277,336,249) ȱǻŗŞśǰŝřŞǰŘŝşǼ (271,084,277) ȱǻŗŝşǰŗŚŜǰŗŞŗǼ ȱ 2,573,000 ȱŗǰŞśŚǰŗşŘȱ 2,573,000 ȱŗǰŞśŚǰŗşŘȱ ¢ 48,666,492 ȱŞŗǰřŘŚǰŝśŗȱ 42,751,785 ȱŝŜǰŚŜŘǰŗŘŘȱ ȱȱȱ¢ȱȱǯ 10,448,498 – 10,448,498 – ȱȱ¢ȱǻȱŗşǯřǼ 91,171,659 ȱśśǰŚŝŞǰŜŞŝȱ 85,634,552 ȱŚşǰŞŖŞǰşŘŘȱ 1,125,012,211 ȱŗǰŚŝŚǰŜŜŗǰşśŞȱ 1,071,092,347 ȱŗǰŚŗŜǰşşŜǰřŘŜȱ 4,473,126,475 ȱśǰŖśśǰŚśŚǰřśşȱ 2,667,185,984 ȱŚǰŚŘŖǰŜŘŖǰşśŘȱ
94 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 19.3 Loans to Company Employees Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Movement ȱȱȱȱȱȱȱ 231,470,736 ȱŘŖśǰŚŖŘǰŜŞŚȱ 206,611,896 ȱŗŞşǰŚŞŘǰŝŞŝȱ ȱ ȱȱȱ 39,149,000 ȱşŖǰŗśŚǰŝŚśȱ 35,247,000 ȱŝŚǰřŚŘǰŘŗśȱ DZȱ¢ (58,271,329) ȱǻŜŚǰŖŞŜǰŜşřǼ (52,804,837) ȱǻśŝǰŘŗřǰŗŖŜǼ ȱȱȱȱȱȱȱ 212,348,407 ȱŘřŗǰŚŝŖǰŝřŜȱ 189,054,059 ȱŘŖŜǰŜŗŗǰŞşŜȱ ȱ 91,171,659 ȱśśǰŚŝŞǰŜŞŝȱ 85,634,552 ȱŚşǰŞŖŞǰşŘŘȱ Ȭ 121,176,748 ȱŗŝśǰşşŘǰŖŚşȱ 103,419,507 ȱŗśŜǰŞŖŘǰşŝŚȱ
20. Amounts due from Related Parties Consolidated Company 2009 2008 2009 2008 Relationship Rs. ǯ Rs. ȱǯȹ 20.1 Trade ȱȱǻǼȱǯ ¢ – – 932,818,537 – ȱǻ Ǽȱǯ Ĝȱ¢ – ȱŜǰřřşǰŘŞŗȱ – ȱŜǰřřşǰŘŞŗȱ ȱȱȱǯ Ĝȱ¢ 7,074,245 – 7,074,245 – 7,074,245 ȱŜǰřřşǰŘŞŗȱ 939,892,782 ȱŜǰřřşǰŘŞŗȱ
20.2 Non-Trade ȱǻǼȱ Ĝȱ¢ 5,241,249 ȱŗŝǰşşŖǰŖŘřȱ 5,241,249 ȱŗŝǰşşŖǰŖŘřȱ 5,241,249 ŗŝǰşşŖǰŖŘř 5,241,249 ŗŝǰşşŖǰŖŘř
21. Marketable Securities ȱȱȱ 160,473,932 ŗŝśǰŞŞŚǰśŗŞȱ – Ȯȳ 160,473,932 ŗŝśǰŞŞŚǰśŗŞȱ – –
22. Cash and Cash Equivalents Components of Cash and Cash Equivalents ŘŘǯŗȱȱȱȱȱȱȱ ȱȱȱ 385,446,050 ȱŘśśǰŝŞŜǰŖŘŘȱ 361,764,748 ȱŘśŚǰŘŗŚǰŖŜřȱ
ŘŘǯŘȱȱȱȱȱȱȱ ȱĞȱǻȱŘŜǯŗȱȱŘŜǯŝǼ (160,344,548) ȱǻŜşŞǰşśŖǰŘŗşǼ (160,344,548) ȱǻŜŞŜǰřŗŘǰŞŚşǼ Total Cash and Cash Equivalents for the Purpose of Cash Flow Statement 225,101,502 ȱǻŚŚřǰŗŜŚǰŗşŝǼ 201,420,200 ȱǻŚřŘǰŖşŞǰŝŞŝǼ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 95 23. Stated Capital 23.1 Issued and Fully Paid At the Issued for Issued for ȱȱȹ ȱ Ȭ ȱȹȱ ȱȱ ȱȱ ȱ ȱȹȱ ŖŗǯŖŗǯŘŖŖş 31.12.2009 ȱȱ ȱȹȱ ȱȱȱȬȱ¢ȱ ŜŘǰŜŖŚǰŞŖś ––62,604,805 ŜŘǰŜŖŚǰŞŖś ––62,604,805
ǯȱ ȱǯȱ ȱǯȱ ȱǯȹȱ ȱȬȱ¢ȱ ŜŘŜǰŖŚŞǰŖśŖ ––626,048,050 ŜŘŜǰŖŚŞǰŖśŖ ––626,048,050
23.2 Rights, Preference and Restrictions of Classes of Capital ȱ ȱȱȱ¢ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ ȱȱȱȱȱȱ¢ǯ
23.3 Shares held by Group Companies ȱ ȱȱȱȱ¢ȱȱ¢ȱȱ ȱȱȱȱ DZ
2009 2008 Number ȱǻȱǼȱǯǯ 52,252,125 ȱśŘǰŘśŘǰŗŘśȱ ȱ ȱǻ¢Ǽȱ 1,050,700 ȱŗǰŖśŖǰŝŖŖȱ
24. Capital Reserves Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Summary ǻǼȱȱȱǻȱŘŚǯŗǼ 8,042,189 řǰŖŗŘǰşŜŘ Ȯȳ – 8,042,189 řǰŖŗŘǰşŜŘ Ȯȳ Ȯȳ
ǻǼȱȱȱǻȱŘŚǯŘǼ 404,084,717 ŚŖŚǰŖŞŚǰŝŗŝ 404,084,718 ŚŖŚǰŖŞŚǰŝŗŞ 404,084,717 ŚŖŚǰŖŞŚǰŝŗŝ 404,084,718 ŚŖŚǰŖŞŚǰŝŗŞ 412,126,906 ŚŖŝǰŖşŝǰŜŝş 404,084,718 ŚŖŚǰŖŞŚǰŝŗŞ
Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ 24.1 Reserve Fund ȱȱȱȱȱȱȱ 3,012,962 ȱŗǰŗşŘǰŖŖŗȱ Ȯȳ Ȯȳ ȱȱȱȱȱ 5,029,227 ȱŗǰŞŘŖǰşŜŗȱ Ȯȳ Ȯȳ ȱȱȱȱȱȱȱ 8,042,189 ȱřǰŖŗŘǰşŜŘȱ Ȯȳ Ȯȳ
24.2 Revaluation Reserve ȱȱȱȱȱȱȱ 404,084,717 ȱŘřŘǰŚŖŜǰŗŗşȱ 404,084,718 ȱŘŖŞǰŞşŚǰŞŞşȱ ȱȱȱ Ȯȳ ȱŗşśǰŗŞşǰŞŘŞȱ Ȯȳ ȱŗşśǰŗŞşǰŞŘşȱ ȇȱȱȱȱ¢ȱȱ Ȯȳ ȱǻŘřǰśŗŗǰŘřŖǼ Ȯȳ Ȯȳ ȱȱȱȱȱȱȱ 404,084,717 ȱŚŖŚǰŖŞŚǰŝŗŝȱ 404,084,718 ȱŚŖŚǰŖŞŚǰŝŗŞȱ
96 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 25. Revenue Reserves Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ Summary ǻǼȱ ȱȱǻȱŘśǯŗǼ 1,600,000,000 ŗǰśŖŖǰŖŖŖǰŖŖŖ 1,600,000,000 ŗǰśŖŖǰŖŖŖǰŖŖŖ 1,600,000,000 ŗǰśŖŖǰŖŖŖǰŖŖŖ 1,600,000,000 ŗǰśŖŖǰŖŖŖǰŖŖŖ
ǻǼȱȱȱǻȱŘśǯŘǼ 427,442,537 ŚŘŖǰŚśřǰŖŚś 354,467,780 řŝřǰşśŗǰŗŝŞ 427,442,537 ŚŘŖǰŚśřǰŖŚś 354,467,780 řŝřǰşśŗǰŗŝŞ 2,027,442,537 ŗǰşŘŖǰŚśřǰŖŚś 1,954,467,780 ŗǰŞŝřǰşśŗǰŗŝŞ
25.1 General Reserve ȱ ȱȱȱ ȱȱȱȱȱȱȱȱȱȱ¢ȱȱȱȱȱǯ
ȱ ȱȱȱ ȱȱȱȱ DZ
Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱȱȱȱȱ 1,500,000,000 ȱŗǰřŖŖǰŖŖŖǰŖŖŖȱ 1,500,000,000 ȱŗǰřŖŖǰŖŖŖǰŖŖŖȱ ȱȱȱȱ ŗŖŖǰŖŖŖǰŖŖŖȳ ȱŘŖŖǰŖŖŖǰŖŖŖȱ ŗŖŖǰŖŖŖǰŖŖŖȳ ȱŘŖŖǰŖŖŖǰŖŖŖȱ Issue of Bonus Shares Ȯȳ Ȯȳ Ȯȳ Ȯȳ ȱȱȱȱȱ 1,600,000,000 ȱŗǰśŖŖǰŖŖŖǰŖŖŖȱ 1,600,000,000 ȱŗǰśŖŖǰŖŖŖǰŖŖŖȱ
25.2 Retained Earnings Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱǻȱǼȱ 354,467,780 ȱřŝřǰşśŗǰŗŝŞȱ 354,467,780 ȱřŝřǰşśŗǰŗŝŞȱ ¢ȱȱ ȱǻȱŗśǯŘǼ 541,304 ȱŗǰŚřŘǰŜŘřȱ Ȯȳ Ȯȳ ¢ȱ¢ 72,433,453 ȱŚśǰŖŜşǰŘŚŚȱ Ȯȳ Ȯȳ 427,442,537 ȱŚŘŖǰŚśřǰŖŚśȱ 354,467,780 ȱřŝřǰşśŗǰŗŝŞȱ
ŘŜǯȱ ȱȱȱǭȱ ȱ ŘŜǯŗȱ ȱȱȱǭȱ ȱȬȱȱ
2009 2009 2008 2008 Amount Amount ȱ ȱ Repayable Repayable 2009 ¢ ¢ 2008 Within 1 Year Ğȱŗȱ Total ȱŗȱ Ğȱŗȱ Total Rs. Rs. Rs. ǯ ǯ ǯ ȱǻȱŘŜǯŘǼ 875,000,000 480,000,000 1,355,000,000 ȱŞşśǰŖŖŖǰŖŖŖȱ ȱŗǰřśśǰŖŖŖǰŖŖŖȱ ȱŘǰŘśŖǰŖŖŖǰŖŖŖȱ ȱȱǻȱŘŜǯřǼ 2,358,114,881 33,935,865 2,392,050,746 řǰŗřŝǰŞŜŚǰŞŘŘȱ ȱŞşǰŗŜśǰŗřŝȱ ȱřǰŘŘŝǰŖŘşǰşśşȱ ¢ȱȱǻȱŘŜǯŚǼ 300,000,000 – 300,000,000 ȱŗŜŖǰŖŖŖǰŖŖŖȱ – ȱŗŜŖǰŖŖŖǰŖŖŖȱ ȱĞȱǻȱŘŘǯŘǼ 160,344,548 – 160,344,548 ȱŜşŞǰşśŖǰŘŗşȱ – ŜşŞǰşśŖǰŘŗşȱ ȱȱǻȱŘŜǯśǼ 250,000,000 250,000,000 ȱŗŖŖǰŖŖŖǰŖŖŖȱ – ȱŗŖŖǰŖŖŖǰŖŖŖȱ 3,693,459,429 763,935,865 4,457,395,294 ŚǰşşŗǰŞŗśǰŖŚŗȱ ȱŗǰŚŚŚǰŗŜśǰŗřŝȱ ŜǰŚřśǰşŞŖǰŗŝŞȱ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 97 26.2 Debentures - Consolidated Balance as at As at ŖŗǯŖŗǯŘŖŖş Issues 31.12.2009 ǯ ǯ ǯ Rs. ŗŘǯŖƖȱȱȱȱȱŗŞǯŖŚǯŘŖŖşȱ ŗŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŗŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŜȱȱƸŗǯśŖƖȱǻȱşƖǰȱȱŗśƖǼȱ ȱȱȱȱȱȱȱŗŞǯŖŚǯŘŖŖşȱ ŘŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŘŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŗŘǯŖƖȱȱȱȱȱŗşǯŖŝǯŘŖŖşȱ ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŜȱȱƸŗǯŝśƖȱǻȱşǯŝśƖǰȱȱŗśƖǼȱ ȱȱȱȱȱȱȱŘŝǯŖşǯŘŖŖş ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŗŚǯŖƖȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŘŚŘǰśŖŖǰŖŖŖ ȮȳȮȳ242,500,000 ŜȱȱƸŗǯśŖƖȱǻȱşǯŝśƖǰȱȱŗŜƖǼȱ ȱȱȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ řśŝǰśŖŖǰŖŖŖ Ȯȳ Ȯȳ 357,500,000 ŗŚǯŖƖȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŝǰśŖŖǰŖŖŖ Ȯȳ Ȯȳ 7,500,000 ŜȱȱƸŗǯśŖƖȱǻȱşǯŝśƖǰȱȱŗŜƖǼȱ ȱȱȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŗşŘǰśŖŖǰŖŖŖ Ȯȳ Ȯȳ 192,500,000 ƸŗǯŝśȱǻȱŗŚǯśƖǰȱȱŗŜǯśƖǼȱ ȱȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŗśŖǰŖŖŖǰŖŖŖ Ȯȳ ŝśǰŖŖŖǰŖŖŖ 75,000,000 ŜȱȱƸŗǯŝśȱȱȱ ȱȱȱȱȱŖśǯŖŜǯŘŖŗŘ śŖǰŖŖŖǰŖŖŖ Ȯȳ śǰŖŖŖǰŖŖŖ 45,000,000 ƸřǯŖŖȱȱȱȱȱŖśǯŖŜǯŘŖŗŘ ŗśŖǰŖŖŖǰŖŖŖ Ȯȳ ŗśǰŖŖŖǰŖŖŖ 135,000,000 ŗşǯŝśƖȱȱȱȱȱŘşǯŖŘǯŘŖŗř ŘŝŘǰŖŖŖǰŖŖŖ Ȯȳ Ȯȳ 272,000,000 ŜȱȱƸŗǯŜśȱȱȱ ȱȱȱȱȱŘşǯŖşǯŘŖŗŘ ŘŞǰŖŖŖǰŖŖŖ Ȯȳ Ȯȳ 28,000,000 ŘǰŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŞşśǰŖŖŖǰŖŖŖ 1,355,000,000
ȱ ŘŜǯřȱ ȱȱȬȱ Balance as at Loans ¢ As at ŖŗǯŖŗǯŘŖŖş 31.12.2009 ǯ ǯ ǯ Rs. ǻǼȱȱȱȱ ȱ ȱřǰŘŘŝǰŖŘşǰşśşȱ ȱŗǰŞŖşǰŝŘşǰŖŖŖȱ ȱŘǰŜŚŚǰŝŖŞǰŘŗřȱ 2,392,050,746 ȱřǰŘŘŝǰŖŘşǰşśşȱ ȱŗǰŞŖşǰŝŘşǰŖŖŖȱ ȱŘǰŜŚŚǰŝŖŞǰŘŗřȱ 2,392,050,746
ȱ ǻǼȱȱȱ¢ȱĞȱȱ ¢ Ȧ ¢ȱ ¢ 31.12.2009 řŗǯŗŘǯŘŖŖŞ ȱ ȱǻǯǯǼ Rs. ǯ ȱǻȱǼȱ ȱŗŜǯśƖ ¢ȱ¢ȱ ȱȱȱ ǯȱŗŞǰşřşǰřşŚȦȬ ȱ Ȯȳ ŗŞǰşřşǰřşŚ ȱƸŖǯśƖȱȱ ¢ȱ¢ȱ ȱȱȱ ȱ¢ ǯȱşǰŝŘŘǰŘŘŘȦȬ ȱ – şǰŝŘŘǰŘŘś ȬȱȱȓȱŜǯśƖ ȱ¢ ȱȱ 7,632,975 – 7,632,975 ŘŞǰŜŜŗǰŜŗş ȱȱȱ ȱȱ ¢ȱ¢ȱ ȱ ȱ ȱȱȱǻǼȱǯ ƸŘƖȱȱ ǯȱŚǰŗŜŞǰŞŞşȦȬ ȱȱ ȱ¢ Ȯȳ ŜǰşŚŚǰŚŚŚ ȱȱ ¢ȱ¢ȱ ȱȱ ƸŘǯŘśƖȱȱ ǯȱŘǰśŖŖǰŖŖŖȦȬ Ȯȳ ŗśǰŖŖŖǰŖŖŖ ȱ¢ ȱƸŘƖȱȱ ¢ȱ¢ ȱ 6,415,434 ŗŞǰŜŝŗǰŜŗŞ ȱ¢ Loan on Securitisation ¢ȱ¢ ȱȱ 19,887,456 ŗşǰŞŞŝǰŚśŜ ¡ȱȱŘśǯŝśƖȱ 26,302,890 ŜŖǰśŖřǰśŗŞ 33,935,865 ŞşǰŗŜśǰŗřŝ
98 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 26.4 Promissory Notes - Consolidated Balance as at As at ŖŗǯŖŗǯŘŖŖş Issues 31.12.2009 ǯ ǯ ǯȹ Rs. ¢ȱ ŗŜŖǰŖŖŖǰŖŖŖ řŖŖǰŖŖŖǰŖŖŖ ŗŜŖǰŖŖŖǰŖŖŖ 300,000,000 ŗŜŖǰŖŖŖǰŖŖŖ řŖŖǰŖŖŖǰŖŖŖ ŗŜŖǰŖŖŖǰŖŖŖ 300,000,000
26.5 Commercial Papers - Consolidated
ȱ ŗŖŖǰŖŖŖǰŖŖŖ ŘśŖǰŖŖŖǰŖŖŖ ŗŖŖǰŖŖŖǰŖŖŖ 250,000,000 ŗŖŖǰŖŖŖǰŖŖŖ ŘśŖǰŖŖŖǰŖŖŖ ŗŖŖǰŖŖŖǰŖŖŖ 250,000,000
ȱ ŘŜǯŜȱ ȱȱȬȱ 2009 2008 Utilised Total Facility ȹ ȱ¢ Rs. Rs. ǯȹ ǯ Ğ 160,344,548 670,000,000 ȱŜşŞǰşśŖǰŘŗŞȱ ȱŝŘśǰŖŖŖǰŖŖŖȱ ȱ 339,853,668 339,853,668 ȱŜşŖǰřşŞǰŜŗŗȱ ȱŗǰŗśŖǰŝśŜǰśŖŚȱ Ȭȱ 2,602,197,078 4,100,000,000 ŘǰŝşŜǰŜřŗǰřŚş ȱřǰşŖŞǰşŖŖǰŖŖŖȱ 1,355,000,000 1,355,000,000 ȱŘǰŘśŖǰŖŖŖǰŖŖŖȱ ȱŘǰŘśŖǰŖŖŖǰŖŖŖȱ Total Debt Facility 4,457,395,294 6,464,853,668 ȱŜǰŚřśǰşŞŖǰŗŝŞȱ ȱŞǰŖřŚǰŜśŜǰśŖŚȱ
ȱ 1,463,621,741 1,129,647,116 ȱŗǰŗŘşǰŜŚŝǰŗŗŜȱ ȱŗǰŗŘşǰŜŚŝǰŗŗŜȱ – 350,000,000 ȱŘśŖǰŖŖŖǰŖŖŖȱ ȱŘşŘǰŖŖŖǰŖŖŖȱ Ĵȱȱ 556,677,296 1,660,000,000 ȱřŗŘǰŘśŝǰŜŝŝȱ ȱŗǰśŗśǰŖŖŖǰŖŖŖȱ Total Debt & Other Facilities 6,477,694,331 9,604,500,784 ŞǰŗŘŝǰŞŞŚǰşŝŗ ȱŗŖǰşŝŗǰřŖřǰŜŘŖȱ
ȱ ŘŜǯŝȱ ȱȱȱǭȱ ȱȬȱ¢ 2009 2009 2008 2008 Amount Amount ȱ ȱ Repayable Repayable 2009 ¢ ¢ 2008 Within 1 Year Ğȱŗȱ Total ȱŗȱ Ğȱŗȱ Total Rs. Rs. Rs. ǯ ǯ ǯ ȱǻȱŘŜǯŞǼ 875,000,000 480,000,000 1,355,000,000 ȱŞşśǰŖŖŖǰŖŖŖȱ ȱŗǰřśśǰŖŖŖǰŖŖŖȱ ȱŘǰŘśŖǰŖŖŖǰŖŖŖȱ ȱȱǻȱŘŜǯşǼ 2,330,858,694 7,632,975 2,338,491,669 ȱŘǰşŝşǰŖśśǰśşŘȱ ȱŘŞǰŜŜŗǰŜŗŜȱ ȱřǰŖŖŝǰŝŗŝǰŘŖŝȱ ¢ȱȱǻȱŘŜǯŗŖǼ 300,000,000 – 300,000,000 ȱŗśŖǰŖŖŖǰŖŖŖȱ – ȱŗśŖǰŖŖŖǰŖŖŖȱ ȱĞȱǻȱŘŘǯŘǼ 160,344,548 – 160,344,548 ȱŜŞŜǰřŗŘǰŞŚşȱ – ȱŜŞŜǰřŗŘǰŞŚşȱ ȱȱǻȱŘŜǯŗŗǼ – 250,000,000 250,000,000 ȱŗŖŖǰŖŖŖǰŖŖŖȱ – ȱŗŖŖǰŖŖŖǰŖŖŖȱ 3,666,203,242 737,632,975 4,403,836,217 ȱŚǰŞŗŖǰřŜŞǰŚŚŗȱ ȱŗǰřŞřǰŜŜŗǰŜŗŜȱ ȱŜǰŗşŚǰŖřŖǰŖśŜȱ
26.8 Debentures - Company As at As at ŖŗǯŖŗǯŘŖŖş Issues 31.12.2009 ǯ ǯ ǯ Rs. ŗŘǯŖƖȱȱȱȱȱŗŞǯŖŚǯŘŖŖşȱ ŗŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŗŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŜȱȱƸŗǯśŖƖȱǻȱşƖǰȱȱŗśƖǼȱ ȱȱȱȱȱȱȱŗŞǯŖŚǯŘŖŖşȱ ŘŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŘŖŖǰŖŖŖǰŖŖŖ Ȯȳ ŗŘǯŖƖȱȱȱȱȱŗşǯŖŝǯŘŖŖşȱ ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŜȱȱƸŗǯŝśƖȱǻȱşǯŝśƖǰȱȱŗśƖǼȱ ȱȱȱȱȱȱȱŘŝǯŖşǯŘŖŖş ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŗŚǯŖƖȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŘŚŘǰśŖŖǰŖŖŖ ȮȳȮȳ242,500,000 ŜȱȱƸŗǯśŖƖȱǻȱşǯŝśƖǰȱȱŗŜƖǼȱ ȱȱȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ řśŝǰśŖŖǰŖŖŖ Ȯȳ Ȯȳ 357,500,000 ŗŚǯŖƖȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŝǰśŖŖǰŖŖŖ Ȯȳ Ȯȳ 7,500,000 ŜȱȱƸŗǯśŖƖȱǻȱşǯŝśƖǰȱȱŗŜƖǼȱ ȱȱȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŗşŘǰśŖŖǰŖŖŖ Ȯȳ Ȯȳ 192,500,000
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 99 As at As at ŖŗǯŖŗǯŘŖŖş Issues 31.12.2009 ǯ ǯ ǯ Rs. ƸŗǯŝśȱǻȱŗŚǯśƖǰȱȱŗŜǯśƖǼȱ ȱȱȱȱȱȱŖŜǯŖŞǯŘŖŗŖ ŗśŖǰŖŖŖǰŖŖŖ Ȯȳ ŝśǰŖŖŖǰŖŖŖ 75,000,000 ŜȱȱƸŗǯŝśȱȱȱ ȱȱȱȱȱŖśǯŖŜǯŘŖŗŘ śŖǰŖŖŖǰŖŖŖ Ȯȳ śǰŖŖŖǰŖŖŖ 45,000,000 ƸřǯŖŖȱȱȱ ȱȱȱȱȱŖśǯŖŜǯŘŖŗŘ ŗśŖǰŖŖŖǰŖŖŖ Ȯȳ ŗśǰŖŖŖǰŖŖŖ 135,000,000 ŗşǯŝśƖȱȱȱȱȱŘşǯŖŘǯŘŖŗř ŘŝŘǰŖŖŖǰŖŖŖ Ȯȳ Ȯȳ 272,000,000 ŜȱȱƸŗǯŜśȱȱȱ ȱȱȱȱȱŘşǯŖşǯŘŖŗŘ ŘŞǰŖŖŖǰŖŖŖ Ȯȳ Ȯȳ 28,000,000 ŘǰŘśŖǰŖŖŖǰŖŖŖ Ȯȳ ŞşśǰŖŖŖǰŖŖŖ 1,355,000,000
ȱ ŘŜǯşȱ ȱȱȬȱ¢ As at Loans ¢ As at ŖŗǯŖŗǯŘŖŖş 31.12.2009 ǯ ǯ ǯ Rs. ǻǼȱȱȱȱ ȱ ȱřǰŖŖŝǰŝŗŝǰŘŖŝȱ ȱŗǰŞŖşǰŝŘşǰŖŖŖȱ ȱŘǰŚŝŞǰşśŚǰśřŞȱ 2,338,491,669 ȱřǰŖŖŝǰŝŗŝǰŘŖŝȱ ȱŗǰŞŖşǰŝŘşǰŖŖŖȱ ȱŘǰŚŝŞǰşśŚǰśřŞȱ 2,338,491,669
ȱ ǻǼȱȱȱ¢ȱĞȱȱ Ȧ ¢ȱ ¢ 31.12.2009 řŗǯŗŘǯŘŖŖŞ ȱ ȱǻǯǯǼ Rs. ǯ ȱŗŜǯśƖ ¢ȱ¢ȱ ȱȱȱȱ ǯȱŗŞǰşřşǰřşŚȦȬ assets – ŗŞǰşřşǰřşŚ ȱƸŖǯśƖȱȱ ȱ ¢ȱ¢ȱ ȱȱȱȱ ¢ ǯȱşǰŝŘŘǰŘŘŘȦȬ assets – şǰŝŘŘǰŘŘś ȬȱȱȓȱŜǯśƖ ȱ¢ ȱȱ 7,632,975 – 7,632,975 ŘŞǰŜŜŗǰŜŗş
26.10 Promissory Notes - Company As at As at ŖŗǯŖŗǯŘŖŖş Issues 31.12.2009 ǯ ǯ ǯȹ Rs. ¢ȱ ŗśŖǰŖŖŖǰŖŖŖ řŖŖǰŖŖŖǰŖŖŖ ŗśŖǰŖŖŖǰŖŖŖ 300,000,000 ŗśŖǰŖŖŖǰŖŖŖ řŖŖǰŖŖŖǰŖŖŖ ŗśŖǰŖŖŖǰŖŖŖ 300,000,000
26.11 Commercial Papers - Company ȱ ŗŖŖǰŖŖŖǰŖŖŖ ŘśŖǰŖŖŖǰŖŖŖ ŗŖŖǰŖŖŖǰŖŖŖ 250,000,000 ŗŖŖǰŖŖŖǰŖŖŖ ŘśŖǰŖŖŖǰŖŖŖ ŗŖŖǰŖŖŖǰŖŖŖ 250,000,000
ȱ ŘŜǯŗŘȱȱȱ 2009 2008 Utilised Total Facility ȹ ȱ¢ Rs. Rs. ǯȹ ǯ Ğ 160,344,548 645,000,000 ȱŜŞŜǰřŗŘǰŞŚşȱ ȱŝŖŖǰŖŖŖǰŖŖŖȱ ȱ 286,294,591 286,294,591 ȱŚŝŗǰŖŞśǰŞśŞȱ ȱŞŞŜǰŘŖŖǰŖŖŖȱ Ȭȱ 2,602,197,078 4,100,000,000 ȱŘǰŝŞŜǰŜřŗǰřŚşȱ ȱřǰŞşŞǰşŖŖǰŖŖŖȱ 1,355,000,000 1,355,000,000 ȱŘǰŘśŖǰŖŖŖǰŖŖŖȱ ȱŘǰŘśŖǰŖŖŖǰŖŖŖȱ Total Debt Facility 4,403,836,217 6,386,294,591 ŜǰŗşŚǰŖřŖǰŖśŜ ȱŝǰŝřśǰŗŖŖǰŖŖŖȱ – 350,000,000 ȱŘśŖǰŖŖŖǰŖŖŖȱ ȱŘşŘǰŖŖŖǰŖŖŖȱ Ĵȱȱ 556,677,296 1,660,000,000 ȱřŗŘǰŘśŝǰŜŝŝȱ ȱŗǰśŗśǰŖŖŖǰŖŖŖȱ Total Debt & Other Facilities 4,960,513,513 8,396,294,591 ŜǰŝśŜǰŘŞŝǰŝřř ȱşǰśŚŘǰŗŖŖǰŖŖŖȱ
100 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 27. Deferred Taxation Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ 27.1 Deferred Tax Assets ȱȱȱȱȱȱ 96,480,763 ŜŞǰŜŚŘǰŖřŞ 96,480,763 ȱŜŞǰŜŚŘǰŖřŞȱ ȱȱȱȱ¢ȱěȱȱ 46,572,562 ȱŘŝǰŞřŞǰŝŘśȱ 46,572,562 ȱŘŝǰŞřŞǰŝŘśȱ ȱȱȱȱȱȱȱ 143,053,325 ȱşŜǰŚŞŖǰŝŜřȱ 143,053,325 şŜǰŚŞŖǰŝŜř
27.2 Deferred Tax Liability ȱȱȱȱȱȱ 22,705,744 ȱŗŝǰşŞŝǰŗŞŜȱ – – ȱȱȱȱ¢ȱě (7,956,343) ȱŚǰŝŗŞǰśśŞȱ – – ȱȱȱȱȱȱȱ 14,749,401 ȱŘŘǰŝŖśǰŝŚŚȱ – –
27.3 ȱ¡ȱȱȱȱȱěȱ ȱȱȱȱ¢ȱȱȱȱěȱȱ¡ȱȱȱ¡ȱ ȱȱ ȱȱȱ¡ȱȱȱȱȱęȱ¢ǯ
ȱ ȱȱȱȱ¡ȱȱȱȱȱȱ¢ǰȱ ȱȱȱȱȱěĴȱȱȱ ȱȱȱ¡ȱǰȱȱȱ DZ
2009 2008 Assets ȹ Assets ȹ Rs. Rs. ǯȹ ǯ (a) Composition of Deferred Tax Assets ¢ǰȱȱǭȱ Ȯȳ 70,490,904 Ȯȳ ŝŚǰŗşşǰŝŚŚ ȱ Ȯȳ 5,391,750 Ȯȳ ŗŝǰŗřřǰśśŖ 25,413,124 Ȯȳ ŘŚǰśŖŞǰŖŜś Ȯȳ ȱȱ 139,215,405 Ȯȳ ŗŗŘǰŘŚşǰŜŘş Ȯȳ ¢ȱęȱ 54,307,450 Ȯȳ śŗǰŖśŜǰřŜř Ȯȳ 218,935,979 ŝśǰŞŞŘǰŜśŚȳ ŗŞŝǰŞŗŚǰŖśŝ şŗǰřřřǰŘşŚ ȱȱ¡ȱ 143,053,325 Ȯȳ şŜǰŚŞŖǰŝŜř Ȯȳ
(b) Composition of Deferred Tax Liability ¢ǰȱȱǭȱ Ȯȳ 3,661,815 Ȯȳ řśǰŜśŚǰŗŖř ȱȱ – 12,274,515 –– ȱȱ Ȯȳ – ŗŘǰŖśŞǰŗřŝ Ȯȳ ȱęȱ 1,186,929 Ȯȳ ŞşŖǰŘŘŘ Ȯȳ 1,186,929 15,936,330 ŗŘǰşŚŞǰřśş řśǰŜśŚǰŗŖř ȱȱ¡ȱ¢ Ȯȳ 14,749,401 Ȯȳ ŘŘǰŝŖśǰŝŚŚ
ŘŞǯȱ ȱęȱ Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱȱȱȱ ¢ 158,555,375 148,418,813 155,164,141 ŗŜŘǰŗŚşǰśŚŘ ȱȱȱȱȱ 158,555,375 148,418,815 155,164,141 ŗŜŘǰŗŚşǰśŚŘ
Provision for Retiring Gratuity ȱȱȱȱȱ 148,418,813 ȱŗŘŜǰŞŞşǰŘŖŗȱ 145,875,322 ȱŗŘśǰśŜŜǰŝŗŖȱ Actuarial Loss 1,756,142 ŗŖǰŝśşǰŖřř 1,980,250 ŗŖǰŘŜŗǰśśŜ ȱȱ 13,173,214 ŗŘǰŖŚŜǰŝşş 12,365,416 ŗŗǰŚŞŗǰŘŝŜ ȱ 18,204,804 ŗŚǰşşŞǰŖŖŖ 17,940,751 ŗŚǰŞŚŖǰŖŖŖ 181,552,973 ŗŜŚǰŜşřǰŖřř 178,161,739 ŗŜŘǰŗŚşǰśŚŘ ęȱ (22,997,598) ȱǻŗŜǰŘŝŚǰŘŘŖǼ (22,997,598) ȱǻŗŜǰŘŝŚǰŘŘŖǼ ȱȱȱȱȱ 158,555,375 ȱŗŚŞǰŚŗŞǰŞŗřȱ 155,164,141 ȱŗŚśǰŞŝśǰřŘŘȱ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 101 ȱ ȱ¢ȱȱȱȬ¢ȱęȱęȱȱȱȱ¢ȱęȱ¢ȱȱ¢ȱ¡ȱ ȱȱȱęȱ¢ȱ¢ȱȱǯ
ȱ ȱȱřŗȱȱŘŖŖşǰȱȱ¢ȱ¢ȱ ȱ¢ȱȱȱȱȱȱȱǻǼȱȱ¢ȱȱ ¢ȱęȱ¢ȱęȱȱȱȱȱȱǻǼȱǯ
ȱ ȱȱȱȱȱȱ¢ȱȱȱřŗȱȱŘŖŖşǰȱȱȱȱȱȱȱȱȱ ȱǯ
ȱ ȱ¢ȱȱ ȱȱȱȱȱȱȱęDZ ȱ ǻǼȱȱȱȱȱ Ȭȱ ŗŗƖȱǯǯȱǻȱȱ¡Ǽ ȱ ǻǼȱ¢ȱ ȱȱ Ȭȱ şƖȱǯǯ ȱ ǻǼȱȱ
ȱȱȱ ȱ ŜŖȱ¢ śśȱ¢ ŜŖȱ¢ śśȱ¢
ȱ ǻǼȱȱȱȱȱ¢ȱȱȱȱŜŝȦŝŖȱ¢ȱǰȱȱ¢ȱȱ ȱȱǰȱǯȱȱ ȱ ȱȱȱ¢ȱȱȱȱ ȱȱȱȱǰȱ¢ȱ ȱȱȱȱȱ ȱ ȱȱȱǯ
ȱ ȱ¡ȱȱȱȱȱȱȱȱȱ¡ȱȱȱ ȱǯ
ȱ ȱ ȇȱȱ¢ȇȱȱęȱȱ ȱȱȱǯȱŗŝşǯŜȱȱȱǯȱŗŝśǯŚȱȱ¢ȱȱ ȱȱȱȱǰȱȱȱȱęȱȱȱȱȱȱȱȱȱ¢ȱȱ ¢ȱ ȱǯȱŗŘȱȱŗşŞřǯ
29. Trade and Other Payables Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱ¢ 400,274,704 ȱřŚŝǰŞŖŝǰşŗŜȱ 358,058,716 ȱřŘŞǰŜŖŞǰŖŞŞȱ ȱ¢ 127,868,253 ȱŗŚşǰřśŞǰřŚŝȱ 58,953,727 ȱŜŝǰŘŞŜǰŗŘŗȱ ȱȱ¡ȱ¢ 68,520,446 ȱŘŜǰŗřŚǰŜŝŖȱ 65,997,250 ȱŘśǰŚŚŝǰŜŘŝȱ ȱ¢ 8,803,362 ȱŗŜǰŝŚŝȱ 8,803,362 ȱŗŜǰŝŚŝȱ ȱ¢ 647,802 ȱŗǰŖŚřǰşśŗȱ 647,802 ȱŗǰŖŚřǰşśŗȱ ȱ¢ȱ ȱȱ¡ 419,240,957 ȱŜŖŖǰŜŜŚǰŞŗŝȱ 372,663,690 ȱśśŗǰŝŖŗǰśşşȱ ¢ȱȱǻȱŘşǯŗǼ 24,758,736 ȱřŘǰŝśŞǰŝřŜȱ 24,758,736 ȱřŘǰŝśŞǰŝřŜȱ 1,050,114,260 ȱŗǰŗśŝǰŝŞśǰŗŞŚȱ 889,883,283 ȱŗǰŖŖŜǰŞŜŘǰŞŜşȱ
29.1 ¢ȱȱȱȱȱȱ¡ȱ ¢ȱȱȱȱȱ¢ȱȱ¢ǯ
30. Deferred Revenue Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱȱȱȱȱȱȱ 79,060,992 ȱşřǰŝŜřǰŝŞśȱ 73,051,634 ȱşŖǰŚŖşǰşŝřȱ ȱȱȱȱ 189,085,772 ȱŗŝŖǰŜŜŜǰśśŖȱ 179,909,574 ȱŗŜŗǰŝŜŞǰŞŜŘȱ ȱȱȱȱȱȱ (211,135,180) ȱǻŗŞśǰřŜşǰřŚŚǼ (203,429,058) ȱǻŗŝşǰŗŘŝǰŘŖŗǼ ȱȱȱȱȱȱȱ 57,011,584 ȱŝşǰŖŜŖǰşşŗȱ 49,532,150 ȱŝřǰŖśŗǰŜřŚȱ
30.1ȱȱȱȱȱȱȱȱȱȱȱȱ¡ȱ ¢ȱȱȱȱřŗȱȱŘŖŖşǯ
102 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 31. Dividend Payable Consolidated Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ ȱ 2,978,168 Ȯȳ 2,978,168 Ȯȳ 2,978,168 Ȯȳ 2,978,168 Ȯȳ
32. Dividends Ordinary Shares ȱȱŘŖŖşȱȬȱȱǻŘŖŖŝȱȬȱǯȱŘǯŖŖǼȱ – ŗŘśǰŘŖşǰŜŗŖ – ŗŘśǰŘŖşǰŜŗŖ ȱȱŘŖŖşȱȬȱȱǻŘŖŖŞȱȬȱǯȱŚǯŖŖǼ – ŘśŖǰŚŗşǰŘŘŖ – ŘśŖǰŚŗşǰŘŘŖ – řŝśǰŜŘŞǰŞřŖ – řŝśǰŜŘŞǰŞřŖ
33. Amounts due to Related Parties Consolidated Company 2009 2008 2009 2008 Relationship Rs. ǯ Rs. ȱǯȹ 33.1 Trade ȱ ȱǻ¢Ǽȱ Ĝȱ¢ 67,182,017 ȱŞŝǰŜŜŖǰŚŞśȱ 67,182,017 ȱŞŝǰŜŜŖǰŚŞśȱ ȱǻǼȱ Ĝȱ¢ 160,943,016 ȱŗŖŝǰşŘŗǰŞŞŖȱ 160,943,016 ȱŗŖŝǰşŘŗǰŞŞŖȱ ȱȱȱǯ Ĝȱ¢ – ȱřŜǰśŖśǰřŞśȱ – ȱřŜǰśŖśǰřŞśȱ ¢ȱȱǯ ȱ¢ 5,350,000 ȱŗǰŝśŖǰŖŖŖȱ 5,350,000 ȱŗǰŝśŖǰŖŖŖȱ 233,475,033 ŘřřǰŞřŝǰŝśŖ 233,475,033 ŘřřǰŞřŝǰŝśŖ
33.2 Non-Trade ȱȱǯ Ĝȱ¢ 36,727,524 ȱŗśŝǰřŚśǰŘşŞȱ 36,727,524 ȱŗśŝǰřŚśǰŘşŞȱ ȱȱǻǼȱǯ ¢ȱ¢ – – 100,968,388 ȱŘŖǰŝŞřǰřşŖȱ 36,727,524 ȱŗśŝǰřŚśǰŘşŞȱ 137,695,912 ȱŗŝŞǰŗŘŞǰŜŞŞȱ
34. Deposits from Customers ȱȱȱȱȱȱȱ 1,129,647,116 ȱśŗŞǰřřşǰŜŞşȱ Ȯȳ Ȯȳ ȱ 796,913,458 ȱŞśŚǰŝŖşǰŜŜşȱ Ȯȳ Ȯȳ ȱȱ 91,814,620 ȱśŝǰřŜŜǰřşśȱ Ȯȳ Ȯȳ 2,018,375,194 ȱŗǰŚřŖǰŚŗśǰŝśřȱ Ȯȳ Ȯȳ Repaid Deposits (554,753,454) ȱǻřŖŖǰŝŜŞǰŜřŝǼ Ȯȳ Ȯȳ ȱȱȱȱȱȱȱ 1,463,621,740 ȱŗǰŗŘşǰŜŚŝǰŗŗŜȱ Ȯȳ Ȯȳ 1,313,620,654 ȱŗǰŖŚŞǰśŝŖǰŚŗŗȱ Ȯȳ Ȯȳ Ȭ 150,001,086 ȱŞŗǰŖŝŜǰŝŖśȱ – – ȳȱ 35. Commitments and Contingencies - Group/Company 35.1 Financial Commitments ȱ ¢ȱȱěȱȱȱȱȱȱǯȱśśŜǰŜŝŝǰŘşŜȦȬȱǻŘŖŖŞȱȬȱǯȱřŗŘǰŘśŝǰŜŝŝȦȬǼǯ
35.2 Capital Commitments ȱ ȱ ȱȱęȱȱȱ ȱȱȱȱȱȱȱ¢ȱȱ¢Ȧ¢ȱȱȱȱ ȱȱȱ¡ȱȱȱ DZ ȱ ȱ¢ȱȱŗŘȱ¢ȱŘŖŖŚȱȱȱȱ ȱ ȱǭȱǯȱȱȱȱĞ ȱȱ¢ȱȱȱȱ ȱǞȱŞśŖǰŖŖŖȱǻǯȱŞŚȱȱ¡¢Ǽȱȱȱȱȱȱȱǯȱ¢ȱȱȱřŗȱȱŘŖŖşȱ ȱ ǯȱŜśǯŝȱȱǻŘŖŖŞȱȬȱǯȱśřȱǼǯȱ
ȱ ȱȱȱȱȱřŗȱȱŘŖŖşȱȱȱ DZ ȱ ȱȱȱȱ Ȭȱǯȱŗŝŗǯśȱ ȱ ȱȱȱęȱȱȱ ȬȱǯȱśŝŖǯŖȱ ȱ ȱęȱȱȱ ȬȱǯȱŗşŞǯŘȱ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 103 35.3 Assets Pledged ȱ ¢ȱȱȱȱȱȱȱȱ¢ȇȱȱǰȱ¡ȱȱǰȱȱȱ ȱȱȱȱ ȱȱĞȱȱȱ¢ȱȱȱǯȱŗǯŚȱȱȱȱȱ¢ȱDZ
zȱȱ ȱǭȱȱȱȱǯ zȱȱȱȱȱ¢ȱ zȱȱ¢ȱȱ zȱȱȱȱ zȱȱȱȱȱ zȱȱȱȱ zȱȱȱȱȱ zȱȱȱȱȱǯ
ȱ ȱȱȱȱȱȱ¢ȱȱ¢ȱȱȱǻǼȱǯȱȱȱȱȱǯȱŘŗŘȱȱ ȱȱȱ¢ǰȱȱȱȱȱȱȱ ȱȱȱ¢ȱȱȱǯȱśřǯŜȱȱȱȱȱ¢ȱǯ
35.4 Contingencies (a)ȱȱ ȱȱȱȱȱȱȱȱȱȱȱȱ ȱǻ¢ǼȱȱȱȱǻǼȱ ȱȱȱǯȱŝśȱȱȱǯȱŚśśǯśȱȱ¢ǯȱ
(b)ȱȱȱ¢ȱȱȱȱȱȱȱǯȱŝŖȱȱȱȱȱ ȱȱȱȱȱȱ ȱȱ¢ȱȱ ȱȱȱȱȱȱȱȱȱȱǯ
ȱ ȱȱȱȱȱȱȱ¢ȱ¢ȱȱǰȱȱȱȱ¢ȱȱ¢ȱȱǯ
ȱ ȱ¢ȱ ¢ȱȱȱȱȱȱȱȱȱȱȱȱ¢ȱȱȱȱȱȱ¢ȱȱǰȱ ȱȱȱȱȱȱȱǯȱ
řŜǯȱ ȱȱĞȱȱȱȱ ȱ ȱȱȱȱȱȱȱĞȱȱȱȱȱȱȱȱȱȱȱǯȱ
37. Related Party Transactions 37.1 Identity of Related Parties ȱ ȱ¢ȱȱȱȱ¢ȱȱ ȱȱȱ¢ǰȱȱȱǰȱȱĜȱȱȱ ȱȱǯ 37.2 Transactions with Parent Companies (a)ȱȱȱȱ¢ǰȱȱ¢ȱȱ ȱȱ ȱȱȱDZ
Singer Asia Ltd. - (Intermediate Parent)
2009 2008 Rs. million ǯȱ ¢¢ȱ¡ 126.9 ŗŚŞǯś ¢¢ȱ¢ȱȱȱ¢ȱ 36.7 ŗśŝǯř
ȱȱ ȱǯǯȱǻ ȱǼ ȱ ¢¢ȱȱȱȱȱǯȱȱȱȱ ȱǯǯ
(b)ȱȱ ȱȱȱȱȱȱȱȱǻȱǼȱȱȱȱȱǻǼȱǯǰȱ ȱ ȱȱ ȱ ȱȱȱȱȱ¢DZ
¢ Relationship ȱǻȱǼȱǯǯ ȱ ȱȱ ȱǯǯ ȱ ȱ ȱǯǯ ȱ
104 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements 37.3 Transactions with Subsidiary Companies 2009 2008 Rs. million ǯȱ Singer Finance (Lanka) Ltd. ȱȱȱȱȱǻǼȱǯ 2,080 řŖǯŞ ¢ȱȱȱǻȱǼȱȱȱȱȱ 1,047 řŖǯş Ȭȱȱ 121.5 śŜ ȬȱȱĴ 177.5 ȱŘřǯŖŖȱ ȱ 49.6 řǯř ȱ ȱ – ŗŖŖ ȱȱȬȱ 10 ŗś ȱȱ 200 – ȱȱ¢ȱȱǻȱǼȱ 314 şśǯŝ ¡ȱ 43.4 śş Ȭȱȱ – ŜŚǯř ȱȱ 38.1 – ȱȱȱȱȱǻȱǼȱ 61.7 – ȱȱ 0.9 – ȱ 2.2 ȱŘǯŗȱ ȱ 149.8 ŜŖǯş ȱȦǻ¢Ǽ 831.8 ǻŘŖǯŞǼ
37.4 Transactions with Associate Companies (a)ȱȱȱȱ¢ȱȱ¢ȱȱ ȱȱ ȱȱȱDZ
2009 2008 Rs. million ǯȱ Reality (Lanka) Ltd. ȱ 110.5 ŗŖŞǯŚ ȱ 10.4 – ȱ 10.4 – ȱ 3.6 ŗǯŝ ȱ 115.6 ŗŖŜǯř Commercial Leasing Company Ltd. (Ceased to be an Associate Company from 20th June 2008) ȱ – ŗŖǯŜ
(b) ȱ¢ȱȱȱȱ¢ȱȱȱǻȱǼȱǰȱ ȱ ȱȱǻȱǼȱȱȱȱ ȱǻǼȱǯȱȱȱȱȱȱȱȱȱȱȱȱȱ¢ǯ
Telshan Network (Pvt) Ltd.
37.5 Transactions with Other Related Parties ȱ ȱ ȱȱȱȱȱȱȱřŝǯŜǯ
Relationship ȱǻǼȱ Ĝȱ¢ ȱ ȱǻ¢Ǽȱ Ĝȱ¢ ȱȱȱǯ Ĝȱ¢ ȱȱȱǯ Ĝȱ¢
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 105 37.6 Transactions with Key Management Personnel and Directors ȱ ȱȱȱ¢ȱȱȱȱȱȱǰȱȱȱȱȱȱȱȱȱȱȱȱ ȱęȱĚȱȱȱęȱȱȱȱȱȱǯȱȱȱȱȱ DZȱ
ȱȱȱ¢ ȱ Nature of 2009 2008 and Relationship Director Transaction Rs. million ǯȱ ȱ ȱǻ¢Ǽȱ ǯȱ ǯǯǯȱ¢ȱ(Chairman) 560.0 şŖŚǯś ǻĜȱ¢Ǽ ǯȱ ǯǯǯȱħ¢ ȱ ȱ 75.0 ŝśǯŖ ǯȱ ǯǯȱ Lease Rental paid 3.0 řǯř ǯȱǯ ǯ ǯȱ¢ ȱȱȱ 5.0 ŗŚǯŝ ǯȱ ǯ ǯȱ ȱȱĴȱ 589.0 ŞşŞǯŚ ȱȱ ¢ ȱ¢ 67.1 ŞŝǯŜ ȱǻǼȱȱ ǯȱ ǯǯǯȱ¢ȱ(Chairman) 1,685.0 ŗǰŞŘŘǯŖ ǻĜȱ¢Ǽ ǯȱ ǯǯǯȱħ¢ ȱ ȱ 455.5 ŚŘŞǯŖ ǯȱ ǯǯȱ ȱ 16.3 ȱŘǯŖȱ ǯȱǯ ǯ ǯȱ¢ ȬȱĴ 58.8 ȱŗŗŖǯŖȱ ǯȱ ǯ ǯȱ ȱȱĴȱ 1,632.0 ŗǰŞŖŜǯŖ ǯȱȱ ȱ 130.0 – ¡ȱ 30.0 ȱŘŚǯŖȱ ȱ¢ 155.7 Şşǯş ȱȱǻǼȱǯ ǯȱ ǯǯǯȱ¢ȱ(Chairman) ȱȱ 2,080.0 ȱřŖǯŞȱ ǻ¢ȱ¢Ǽ ǯȱ ǯǯǯȱħ¢ ȱȱǻǼȱǯȱ ǯȱ ǯǯȱ ȱȱȱ¢ȱȱȱǻȱǼȱȱ ǯȱȱ ȱȱȱȱȱȱ 1,047.0 ȱřŖǯşȱ ǯȱǯǯǯȱ Ȭȱȱ 121.5 ȱśŜǯŖȱ ȬȱȱĴ 177.5 ȱŘřǯŖȱ ȱ 49.6 ȱřǯřȱ ȱ ȱ – ȱŗŖŖǯŖȱ ȱȱǻ Ǽ 10.0 ȱŗśǯŖȱ ȱȱȱ 200.0 – ȱȱ¢ȱȱǻȱǼȱ 314.0 ȱşśǯŝȱ ¡ȱȱ 43.4 ȱśşǯŖȱ Ȭȱȱȱ – ȱŜŚǯřȱ ȱȱȱ 38.1 – ȱȱȱȱ ȱȱȱȱǻȱǼȱ 61.7 – ȱȱ 0.9 – ȱ 149.8 ŜŖǯş ȱ 2.2 Řǯŗ ¢¢ȱȱȱȱǻȱǼȱ 6.8 Śǯŗ ȱȦǻ¢Ǽ 831.8 ǻŘŖǯŞǼ ȱȱǯȱǯ ǯȱ ǯǯǯȱ¢ȱ(Chairman) ȱȱǻ Ǽ – ŗŖǯŜ ǻȱ¢Ǽ ǯȱ ǯǯȱ ǻȱȱȱȱ ȱȱȱȱ¢ ȱȱȱ ǯǯǯȱŘŖȱ ȱŘŖŖŞǼ ȱȱȱ ǯȱ ǯǯǯȱ¢ 250.0 ŚŖşǯŖ ǯȱ ǯǯǯȱħ¢ ȱȱȱǯ ǯȱ ǯǯǯȱ¢ 22.4 şśśǯŖ ǻĜȱ¢Ǽ ǯȱ ǯ ǯȱ Ĵ 66.0 – ȱȦǻ¢Ǽ 7.1 ǻřŜǯśǼ
106 Singer (Sri Lanka) PLC Annual Report 2009 Notes to the Financial Statements ȱȱȱ¢ ȱ Nature of 2009 2008 and Relationship Director Transaction Rs. million ǯȱ ȱȱǯ ǯȱ ǯǯǯȱ¢ ¢¢ȱ¡ 126.9 ŗŚŞǯś ȱȱȱǻ ȱȱ¢Ǽ ǯȱǯ ǯȱ ¢¢ȱ¢ 36.7 ŗśŝǯř ǯȱǯ ǯȱȂ ǯȱǯȱ ǯȱ ǯ ǯȱ ǯȱ ǯǯȱ ȱȱ ǯȱȱ ȱ¢ 300.0 ŘŞŞǯŖ ȱ¡ 24.0 ŘŜǯŖ ȱȱ ȱȱ ¢ ȱȱ 75.0 Ȯȳ ȱ¢ – řŖŖǯŖ ȱ ȱ¢ – ŚşǯŖ ¢ȱȱǯȱ ȱȱȱǻȱ¢Ǽ ǯȱ ǯǯǯȱ¢ ȱ 110.5 ŗŖŞǯŚȱ ǯȱ ǯǯȱ ȱ 10.4 – ǯȱǯ ǯ ǯȱ¢ ȱȱ 10.4 – ǯȱ ǯ ǯȱ ȱ 3.6 ŗǯŝ ȱ 115.6 ŗŖŜǯř ȱ ȱǯ ǯȱ ǯǯǯȱ¢ ¡ Nil Ŝǯř ȱǯ ǯȱ ǯǯǯȱħ¢ Business Transactions 0.5 Şǯŗ
38. Transactions with Key Management Personnel (a)ȱȱ ¢ȱȱȱȱȱȱȱȱȱȱ¢ȱȱȱ¢ǯȱȱ ȱ ¢ȱȱǰȱȱȱ¢ȱȱȱȦȱȱ ȱȱ¢ȱȱȱȱȱ ȱ¢ȱȱȱǰȱȱȱȱęȱĚȱȱȱ ȱȱ DZ
2009 2008 Rs. million ǯȱ (i) Transactions with Key Management Personnel or Close Family Members ȱȱ¢ȱ ¢ȱȱȱȱȱȱ¢ȱȱȱ ȱȱȱȱȱǻǼȱǯ 12.1 ŗŜǯŝ
Group Company 2009 2008 2009 2008 Rs. ǯ Rs. ǯ (ii) Compensation of Key Management Personnel Ȭȱ¢ȱę 25,982,269 řŖǰŞŖŘǰşŗŝ 20,209,089 ŘşǰşşśǰŝŞŞ Ȭ¢ȱęȱ 11,833,350 řǰŚŜśǰŖŖŖ 11,832,350 řǰŚŜśǰŖŖŖ
ȱ ȱȱȱȱȱȱ¢ȱȱȬȱęȱȱȱ¢ȱȱȱȱȱȱȱ Ȭ¢ȱęȱęȱȱȱȱǯȱȇȱȱȱȱȱȱşȱȱȱȱǯ
(iii)ȱȱȱȱȱȱȱȱȱȱ¢ȱ ȱȱȦȱȱ ȱ¢ȱȱȱȱȱ ȱ¢ȱȱȱǰȱȱȱȱęȱĚǯ
(b)ȱȱȱȱȱȱȱ¢ȱ¢ȱȱȱȱȱȱřŗȱȱŘŖŖşǰȱȱȱȱȱŗŞǰȱŗşǯŘǰȱŘŖȱ ȱřřȱ¢ǯ
Notes to the Financial Statements Singer (Sri Lanka) PLC Annual Report 2009 107 Statement of Value Added
2009 2008 Rs. '000 ǯȱȇŖŖŖ ȱȱȬȱ 12,798,131 ŗśǰŘŖşǰśŞř ȱ 96,752 ŗŚřǰśŗŞ 12,894,883 ŗśǰřśřǰŗŖŗ DZȱȱȱȱǭȱ 7,774,278 şǰŗŖŘǰśŘś ȱ 5,120,605 ŜǰŘśŖǰśŝŜ
% Ɩ Distribution of Value Added To Employees and Dealers ǰȱȱȱȱę 1,577,755 31 ŗǰŞŖŚǰśśş Řş To Government ȱ¡ǰȱȱ¡ǰȱȱȱ¡ǰȱ ȱȱȱ ȱȱǭȱȱ¡ 2,103,871 41 ŘǰŝŜŚǰŗŗś ŚŚ ȱȱȱ ȱȱȱ ȱǭȱȱȱȱ ȱȱȱ 1,108,271 22 ŗǰřŘŘǰŘŗŝ Řŗ To Suppliers of Capital ȱȱ ––ŘśŖǰŚŗş Ś Retained for Re-investment and Future Growth Depreciation 218,689 4 ŗşŚǰŘŘŝ 3 ȱę 112,019 2 ǻŞŚǰşŜŗǼ ǻŗǼ 5,120,605 100 ŜǰŘśŖǰśŝŜ ŗŖŖ
108 Singer (Sri Lanka) PLC Annual Report 2009 Annexure III : Members of the Colombo Stock Exchange
Members of the Colombo stock Exchange
• Bartleet Religare Securities (Pvt) Limited , Level "G", "Bartleet House",65, Braybrooke Place, Colombo 2. Tel:+94 11 5 220 200 Fax: +94 11 2 434 985 E-mail: [email protected], Website: www.bartleetstock.com
• Acuity Stockbrokers (Pvt) Ltd. Level 6, Acuity House, No. 53, Dharmapala Mawatha, Colombo 3. Tel: +94 11 2 206 206, Fax: +94 11 2 206 298 / 9, E-mail: [email protected], Website: www.acuity.lk
• John Keells Stock Brokers (Pvt) Ltd. 130, Glennie Street,Colombo 2. Tel: +94 (0) 11 2 306 250, 2 342 066-7, 2 446 694-5, 2 338 066-7, 2 439 047-8, 4 710 721-4, Fax: +94 (0) 11 2 342 068, 2 326 863, E-mail: [email protected], Website: www.jksb.keells.lk
• Asha Phillip Securities Ltd. 10, Prince Alfred Towers, 2nd Floor, Alfred House Gardens, Colombo - 03. Tele : +94 11 2 429 100, Fax : +94 11 2 429 199, E-mail: [email protected], Website:www.ashaphillip.net
• Assetline Securities (Pvt) Ltd. No.120, 120A, Pannipitiya Road, Battaramulla. Tel: +94 11 4 700 111, 2 307 366, Fax: +94 11 4 700 112, 2 307 365, E-mail:[email protected], Website:http://www.assetline.lk/stock_brokering.html
• CT Smith Stockbrokers (Pvt) Ltd. 4-14, Majestic City, 10, Station Road, Colombo 4. Tel. +94 11 2 552 290 - 4, Fax: +94 11 2 552 289, E-mail: [email protected], Website: www.ctsmith.lk
• Somerville Stockbrokers (Pvt) Ltd. 137, Vauxhall Street,Colombo 2.Tel: +94 11 2 329 201-5, 2 332 827, 2 338 292-3, Fax: +94 11 2 338 291,E-Mail: [email protected]
• J B Securities (Pvt) Ltd. 150, St. Joseph Street,Colombo 14. Tel:+94 11 2 490 900, 077 2 490 900, 077 2 490 901, Fax:+94 11 2 430 070, 2 446 085, 2 447 875, E-mail: [email protected], Website:www.jbs.lk
• Lanka Securities (Pvt) Ltd. 228/2, Galle Road, Colombo 04. Tel:+94 11 4 706 757, 2 554 942, Fax:+94 11 4 706 767, E-mail: [email protected], Website:www.lsl.lk • Asia Securities (Pvt) Ltd. Level 21, West Tower, World Trade Centre, Echelon Square, Colombo 1, Tel:+94 11 2 423 905, 5 320 000, Fax:+94 11 2 336 018, E-mail: [email protected], Website: www.asiasecurities.net
• Nation Lanka Equities (Pvt) Ltd. 44, Guildford Crescent, Colombo - 07. Tel:+94 11 4 714 300, 4 714 388, 4 714 389, 077 3 421 821, Fax:+94 11 2 387 228, E-mail: [email protected], Website: www.nlequities.com
• Capital Trust Securities (Pvt) Ltd. 42, Mohamed Macan Markar Mawatha, Tel:+94 11 2 174 174, +94 11 2 174 175, Fax:+94 11 2 174 173,E-mail: [email protected], Website: www.capitaltrust.lk
• S C Securities (Pvt) Ltd. 2nd Floor, 55 D.R. Wijewardena Mawatha,Colombo 10. Tel:+94 11 4 711 000 / +94 11 47 11 001, Fax:+94 11 2 394 405, E-mail:[email protected], Website: www.sampathsecurities.lk
• DNH Financial (Pvt) Limited. Level 16, West Tower, World Trade Center, Colombo 01. Tel:+94 11 5 700 777, Fax:+94 11 5 736 264, E-mail: [email protected], Website: www.dnhfinancial.com
• NDB Stockbrokers (Pvt) Ltd. 5th Floor, NDB Building, 40, Navam Mawatha,Colombo 2. Tel:+94 11 2 314 170 to 2 314 178, Fax:+94 11 2 314 180,E-mail: [email protected],Website: www.ndbs.lk Trading Members of the Colombo stock Exchange
• Capital Alliance Securities (Pvt) Ltd. Level 5, "Millennium House", 46/58 Navam Mawatha,Colombo 2.Tel:+94 11 2 317 777,Fax:+94 11 2 3177 88, E- mail: [email protected],Website: www.capitalalliance.lk
• SMB Securities (Pvt) Ltd. No. 47, Dharmapala Mawatha, Colombo 3.Tel: +94 5 232 091, Fax: +94 2 339 292,E-mail: [email protected],Website: www.smblk.com
• First Guardian Equities (Pvt) Ltd. 32nd Floor, East Tower, World Trade Centre, Echelon Square,Colombo 1.Tel: +94 11 5 884 400 (Hunting)Fax: +94 11 5 884 401,E-mail: [email protected], Website: www.firstguardianequities.com
• Taprobane Securities (Pvt) Ltd. 2nd Floor, No. 10, Gothami Road,Colombo 08.Tel: +94 11 5 328 200, Fax: +94 11 5 328 277,E-mail: [email protected] , [email protected],Website: www.taprobanestocks.com
• Heraymila Securities Ltd. Level 8, South Wing, Millennium House,46/58 Nawam Mawatha, Colombo 02.Tel: +94 11 2 359 100,Fax: +94 11 2 305 522,E-mail:[email protected],Website: www.heraymila.com
• SKM Lanka Holdings (Pvt) Ltd. No 35/1, Alwis Place, Colombo - 03. Tele : +94 11 2 344 444,Fax : +94 11 2 434 198,E-mail: [email protected],Website: www.skmlankaholdings.com
• IIFL Securities Ceylon (Pvt) Ltd. 27th Floor, East Tower, World Trade Centre, Echelon Square,Colombo 1,Tel: +94 11 2 333 000,Fax: +94 11 2 333 383,E-mail:[email protected]
• New World Securities (Pvt) Ltd. 2nd Floor, 45/2, Braybrooke Street,Colombo 2. Tel: +94 11 2 358 700 / 20, Fax: +94 11 2 358 701, Email: [email protected],Website: www.nws.lk
• Softlogic Stockbrokers (Pvt) Ltd, Level 23, East Tower, World Trade Centre, Colombo 1, Tel: +94 11 7 277 000 to 98,Fax: +94 11 7 277 099,Email: [email protected],Website: www.softlogicequity.lk • LOLC Securities Limited . Level 18, West Tower,World Trade Centre,Echelon Square,Colombo 1.Tel: +94 11 7 880 880,Fax: +94 11 2 434 771
• First Capital Markets Limited (Trading Member - Debt) No.75, Arnold Ratnayake Mawatha,Colombo 10. Tel: +94 11 2 639 898, +94 11 2 681 888,Fax: +94 11 2 639 899, +94 11 2 681 460,E-Mail: [email protected],Web site: www.firstcapital.lk
• TKS Securities (Pvt) Ltd. 19-01, East Tower, World Trade Centre,Echelon Square,Colombo 1. Tel: +94 11 7 857 799,Fax: +94 11 7 857 857,E-mail: [email protected],Website: www.tks.lk
• Richard Pieris Securities (Pvt) Ltd. 69, Hyde Park Corner, Colombo 02. Tel: +94 11 7 448 900,Fax: +94 11 2 675 064, Email:[email protected]
• Claridge Stockbrokers (Pvt) Ltd. No.10 Gnanartha Pradeepa Mawatha, Colombo 8. Tel: +94 11 2 697 974,Fax: +94 11 2 689 250,E-mail: [email protected] Annexure : IV Trust deed Trust Deed for the Issue of up to Five Million (5,000,000) Senior Rated Unsecured Redeemable Three Year Debentures (with an option to be increased to Six Million Four Hundred Forty Four Thousand (6,444,000) of the par value of LKR 100/- each by Singer Sri Lanka PLC
This Trust Deed is made and entered into at Colombo in the Democratic Socialist Republic of Sri Lanka on this Twenty Eighth (28th) Day of September in the Year Two Thousand and Twelve (2012)
By and between
Singer Sri Lanka PLC a Company duly established under the Companies Act No 17 of 1982 and re–registered under the Companies Act No 7 of 2007 (Registration No PQ160) in the Democratic Socialist Republic of Sri Lanka and having its Registered Office at No. 80, Nawam Mawatha, Colombo 2 (hereinafter referred to as “the Company “which term or expression as herein used shall where the context so requires or admits mean and include the said Singer Sri Lanka PLC its successors and assigns) of the ONE PART
And
Bank of Ceylon, a Banking Corporation duly established under Bank of Ceylon Ordinance (Cap. 397) and having its Head Office at “BOC Square,” No.1, Bank of Ceylon Mawatha, Colombo, Sri Lanka (hereinafter referred to as “the Trustee “which term or expression as herein used shall where the context so requires or admits mean and include the said Bank of Ceylon its successors and assigns) of the of the OTHER PART.
WHEREAS: a. The Company being duly empowered in that behalf by its Articles of Association has by a Resolution passed on 4th September 2012 by its Board of Directors, resolved to raise a sum of upto Sri Lankan Rupees Five Hundred Million (LKR 500,000,000) by the issue of up to Five Million (5,000,000) Senior Rated Unsecured Redeemable Three Year Debentures of the par value of Rupees One Hundred (Rs 100/-) each with the option to increase the issue upto Sri Lankan Rupees Six Hundred Forty Four Million Four Hundred Thousand (LKR644,400,000).
b. The said Debentures shall be constituted in the manner and upon the terms and conditions hereinafter contained.
c. The Company has obtained a rating of 'A (lka)' from Fitch Ratings Lanka Ltd. for the aforesaid Debentures.
d. The Trustee being duly qualified to act as a Trustee has agreed to accept the office of Trustee and act under the provisions of this Deed as Trustee for the benefit of and in the interests of the Debenture Holders on the terms and conditions hereinafter contained.
NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED AND DECLARED AS FOLLOWS:
1. DEFINITIONS
(a) In these Presents unless the subject or context otherwise requires the following expressions shall have the respective meanings given below:
1. “CENTRAL DEPOSITORY or CDS” means the Central Depository Systems (Pvt) Limited.
2. “CSE ” means the Colombo Stock Exchange.
3. “CERTIFICATE” means a bi-annual certificate issued by the Company signed by Two Directors or a Director and the Company Secretary.
4. “DEBENTURE HOLDERS” means the holders of the Debentures for the time being whose names are entered as holders of the Debentures in the Register or in the case of Debentures listed on the CSE and lodged with the CDS the persons in whose account the Debentures are lodged as at the relevant date.
5. “DEBENTURE CERTIFICATE” means a Certificate issued to a Debenture Holder in respect of any Debenture or Debentures.
6. “DEBENTURES” shall mean the Five Million (5,000,000) Senior Rated Unsecured Redeemable Three Year Debentures of Rupees One Hundred (LKR.100) each of Type A Debentures and Type B Debentures of the aggregate value of Sri Lankan Rupees Five
1 Hundred Million (LKR 500,000,000) with the option of increase up to Sri Lankan Rupees Six Hundred Forty Four Million Four Hundred Thousand (LKR. 644,400,000).
7. “DUE DATE OF INTEREST” means 31st December, 31st March, 30th June and 30th September until the Date of Redemption on the principal sum of the Debentures with the first of such payments being due on 31st December 2012 and the final interest payments in respect of Debentures shall be made with the repayment of the Principal sum on the Date of Redemption of the Debentures.
8. “EVENT OF DEFAULT” means any event set out in Clause 12.
9. “MARKET DAY” means a day on which trading takes place at the Colombo Stock Exchange.
10. “LISTED” means tradable on the Colombo Stock Exchange.
11. “RATE OF INTEREST” means (i) Seventeen per centum (17%) per annum on the principal sum, in the case of Type A Debentures and (ii) Three months Gross Treasury Bill Rate plus two point two five (2.25%) per annum on the Principal Sum, in the case of Type B Debentures.
12. “RESOLUTION” means a Resolution passed by the Debenture holders in terms of Clause 21 unless otherwise provided for.
13. “SEC” means the Securities and Exchange Commission of Sri Lanka.
14. “SRI LANKAN RUPEES” and the sign “LKR” mean the lawful currency of the Republic of Sri Lanka.
15. “REGISTERED ADDRESS” when used in relation to a Debenture holder means the respective address of the Debenture holder registered in the Register. In the case of the Debentures lodged with CDS the registered address shall be deemed to be the address provided by the Debenture holder to the CDS.
16. “THE DATE OF ALLOTMENT” means the date on which the Debentures will be allotted to the Debenture holders under the Prospectus, which date will be stated in the Debenture Certificate.
17. “THE DATE OF MATURITY” means the date on which the period of Three (03) years from the date of allotment expires, which date will be stated in the Debenture Certificate.
18. “THE DATE OF REDEMPTION” means the date of Maturity of the Debentures, which will be stated in the Debenture Certificate or such earlier date on which the Debentures become payable in terms of these presents and the Conditions endorsed on the debenture certificates or the date on which the principal sum of the Debentures are paid in full.
19. “THE REGISTER” means the register of the Debenture holders hereinafter covenanted to be kept by the Company.
20. “THE REGISTRARS” means the person(s) holding the office of Company Secretary for the time being of the Company or such other entity appointed with the approval of the Trustee.
21. “THESE PRESENTS’’ means this Trust Deed including the Schedules hereto as from time to time modified in accordance with the provisions herein contained and/or according to law and shall include any Supplementary Trust Deed executed in accordance with the provisions hereof.
22. “WORKING DAY “ means any day (other than a Saturday or Sunday or any statutory holiday) on which Banks and Foreign Exchange Markets are open for business in Sri Lanka.
23. “TRUST DEED” means these presents including the Schedules hereto as from time to time modified in accordance with the provisions herein contained and/or according to law and shall include any Supplementary Trust Deed executed in accordance with the provisions hereof.
2 24. “TRUSTEE” means Trustee above named and any other banking corporation appointed as Trustee under these Presents duly recognized by the Securities and Exchange Commission of Sri Lanka (SEC) to perform such role.
25. “ Type A Debentures” means Senior Rated Unsecured Redeemable Three (03) year Debentures with a fixed interest rate of Seventeen per centum (17%) per annum payable quarterly until the Date of Redemption.
26. “Type B Debentures“ means Senior Rated Unsecured Redeemable Three (03) year Debentures with a variable interest rate of Three months Gross Treasury Bill rate plus two point two five per centum (2.25%) per annum payable quarterly until the Date of Redemption.
(b) Words denoting or importing the singular number shall include the plural number and vice versa and words denoting or importing the masculine gender only shall include the feminine gender and shall include corporate and unincorporated bodies of persons.
(c) In these Presents references to :
(i) any provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made there under or under such modifications or re-enactment.
(ii) Principal and/or interest in respect of the Debentures or to any monies payable by the Company under these presents or under the Debentures shall be deemed also to include references to any additional amounts which may be payable under these presents.
(iii) Costs, charges or expenses shall include (but not be limited to) the Value Added Tax, Nation Building Tax or similar tax charged or chargeable in respect thereof.
(d) References in this Trust Deed to Schedules, clauses, sub-clauses, paragraphs and sub-paragraphs shall be construed as references to the Schedules to this Trust Deed and the clauses, sub clauses, paragraphs and sub-paragraphs of this Trust Deed respectively.
(e) The headings are inserted herein only for conveniences and shall not affect the construction of these presents.
2. APPOINTMENT OF THE TRUSTEE
The Trustee is hereby appointed as Trustee for the purposes of the Debentures and for the benefit of and in the interests of the Debenture Holders as provided herein and the Trustee accordingly accepts the appointment upon the terms and conditions contained herein and agrees to act under the provisions of this Deed as the Trustee.
3. AMOUNT OF THE DEBENTURE ISSUE
Debentures will be issued by the Company to raise a sum of upto Sri Lankan Rupees Five Hundred Million (LKR 500,000,000/-) with the option to increase upto Sri Lankan Rupee Six Hundred Forty Four Million Four Hundred Thousand (LKR. 644,400,000 ).
4. COVENANTS TO REPAY THE PRINCIPAL SUM AND INTEREST
4.1 Debentures not deposited with the CDS.
(a) The Company hereby covenants with the Trustee for the benefit of the Debenture Holders that prior to the listing of the Debentures on the CSE whilst the Debentures are not deposited with the CDS it will :
(i) as and when the Debentures ought to be redeemed in accordance with the provisions of these Presents and upon surrendering the Debenture Certificate to the Registrar, pay to the Debenture Holders registered as at the market day immediately prior to date of Maturity by RTGS transfer if so requested by the Debenture Holder at the cost and expense of the Debenture Holder or by crossed cheque marked “Account Payee only” sent by ordinary mail to the registered addresses of the Debenture Holders the principal sum of the
3 Debentures which ought to be redeemed and interest (if any) remaining unpaid up to the Date of Redemption of the Debentures.
(ii) pay to the Debenture Holders registered as at the Due Date of Interest by RTGS transfer if so requested by the Debenture Holder at the cost and expense of the Debenture Holder or by crossed cheque marked “Account Payee only” interest on the principal sum of the Debentures for the time being outstanding at the said Rate of Interest in accordance with the provisions of these presents. Provided however that the final interest payments in respect of Debentures shall be made with the repayment of the principal sum on the Date of Redemption of the Debentures.
(iii) Interest calculation shall be based upon the actual number of days in each interest payment period and a year of 365 days. Provided however that in a leap year the first interest payment for such year shall be based upon the actual number of days in such interest payment period and a year of 366 days.
(iv) the payment of the Principal sum and interest shall be made in Sri Lankan Rupees. Interest payments shall be made on the due date of interest after deducting any taxes and charges thereon, if any applicable in terms of the law prevailing at the time of payment.
(b) The Debentures shall be redeemed in accordance with the provisions contained in these Presents on the Date of Maturity or on such earlier date in the event of default together with interest (if any) remaining unpaid therefore.
(c ) On the Date of Maturity, the holder of every such Debentures to be redeemed shall be bound to surrender such original Debenture Certificate, either by person or through registered post to the Registrar.
(d) If any Debenture Holder fails or refuses to claim by surrender of the Debenture Certificate and receive payment of the redemption monies payable to such Debenture Holder, or any part thereof within 90 days from the Date of Maturity of the Debentures, the amount due to him shall be transferred by the Company to a suspense account at the end of 90 days after the Date of Maturity of the Debentures and shall be paid by the Company to the holder of the Debentures when the original Debenture Certificate is surrendered and no interest will be payable by the Company on such Debentures for the period between the Date of Maturity and the date of the said payment.
(e) If any cheques for redemption and interest payment sent by post to the Debenture Holders are returned to the Company undelivered, the amounts represented by each of such returned cheques shall also be transferred by the Company to the aforementioned suspense account and retained therein for a period of Six (06) years from the Date of Maturity of the Debentures. Such monies will be repaid to the Debenture Holders if the same is claimed in writing by such Debenture Holder within the said Six (06) years period. No person shall be entitled to claim any such redemption and interest payment after the completion of six years from the Date of Maturity and all unclaimed monies shall cease to be owed and payable by the Company to any Debenture Holder after the said period of Six (06) years.
(f) All Debenture Certificates pertaining to the Debentures redeemed as aforementioned shall be cancelled and shall not be reissued.
4.2 Debentures deposited with the CDS
(a) The provisions of the Clause 4.1 shall mutatis mutandis apply to the Debentures upon the Debenture certificates being deposited with the CDS.
(b) upon the dematerialization of the Debentures the Company shall always act on the information furnished by the CDS regarding the beneficial ownership of the Debentures. It shall therefore be the responsibility of each Debenture Holder to keep all the information in respect of such Debenture Holder updated. The Company shall be absolved from any responsibility or liability in respect of any error or absence of necessary changes in the information recorded with the CDS.
(c ) The Company shall be entitled to make all interest and redemption payments to the persons who are registered as the beneficial owners of the Debentures as of the date on which such payments are due without any request for claim from such Debenture Holders and the Company shall accordingly send the payment by RTGS transfer if so requested by the Debenture Holder at the cost and expense of the Debenture Holder or
4 by crossed cheque marked “ Account Payee only” to the registered address of the Debenture Holder as may be furnished by the CDS and such payment shall be deemed to be a payment duly made by the Company to the respective Debenture Holders in redemption of the Debentures of such Holders.
(d) In order to accommodate the Debenture interest cycles in the Debt Trading System (DEX) the payment of interest shall not include Debenture Holders holding Debentures in the DEX on the Due Date of Interest but one day prior to the due date of interest (ie the entitlement date). If the entitlement date is a holiday interest shall be calculated including the entitlement date.
(e) If any of the cheques referred to in (c ) above is returned undelivered the Company shall transfer the amount represented by each of such returned cheques to the suspense account referred to in the Clause 4.1 (d) above.
4.3 If the Date of Redemption falls on a non working day on which the Banks are closed for business in Sri Lanka, then the Debentures will be redeemed with interest on the next working day when the Banks are open for business in Sri Lanka.
4.4 The claims of the Debenture Holders shall in the event of winding up of the Company, rank after all the claims of secured creditors of the Company and any preferential claims under any Statutes governing the Company but in priority to subordinated creditors of the Company, if any or over the claims and rights of the shareholder/s of the Company.
5. DEBENTURE CERTIFICATES
5.1. The Company shall within 15 days from the date of closing of the issue send by registered mail the Debenture Certificates to the Debenture Holders. Provided however that in the event of the Debentures being listed on the CSE prior to the expiry of such period the Company may deposit such Debenture Certificates with the CDS.
5.2 Upon listing on the CSE the Debentures shall be held and transferred according to the rules of the CSE and CDS.
6. STAMP DUTY & OTHER CHARGES (IF ANY)
The Company shall pay all charges, stamp duties and other similar duties or taxes (if any) payable on or in connection with (I) the issue of the Debentures and (II) the execution of these Presents.
7. ELIGIBILITY FOR DEBENTURES
The Debentures may be issued to:
(a) Citizens of Sri Lanka who are resident in Sri Lanka and above 18 years of age.
(b) Corporate bodies and societies registered/ incorporated/established in Sri Lanka and authorized to invest in the Debentures.
(c) Foreign institutional investors, corporate bodies incorporated outside Sri Lanka, individuals resident outside Sri Lanka and Sri Lankans resident outside Sri Lanka who qualify to be issued Debentures in terms of the Direction of the Controller of Exchange dated 22nd November 2010.
(d) Approved Provident Funds, Trust Funds and Contributory Pension Schemes registered/established in Sri Lanka and authorized to invest in the Debentures.
(In the case of Approved Provident Funds, Trust Funds and Contributory Pension schemes the Application should be in the name of the Board of Management/Trustee of such Approved Provident Funds, Trust Funds and Contributory Pension Schemes in order to facilitate the opening of the CDS Accounts).
8. ISSUE OF CERTIFICATES
Subject to the rules of the SEC, CSE and the CDS, the Company shall issue to every Debenture Holder, one (01) certificate in respect of the number of Debentures held by such Debenture Holder. Joint Debenture Holders shall be entitled to only one certificate for any Debentures held jointly by them which Certificate shall be delivered to that one of the joint holders whose name appears first in the
5 Register of Debentures and the Company shall not be bound to register more than Three (03) persons (including the principal holder) as the joint holders of any of the Debentures (except in the case of executors, administrators or heirs of a deceased member). The Debenture Holder may apply in writing to the Company for the issue of more than one certificate for the Debentures if such Debenture Holder so wishes. Upon the certificate which it is applied to be replaced by two or more certificates being surrendered to the Company and on payment of such fee as the Company may determine from time to time for such issue the Company shall issue to the applicant Debenture Holder two or more certificates for such Debentures as the applicant may apply for. The Debenture Certificates in respect of Type A Debentures and Type B Debentures shall be substantially in the forms set out in the First and Second Schedule hereto and have endorsed thereon the conditions mentioned in the Third Schedule hereto and the Certificate shall be held subject to and with the benefit of all such conditions or such other conditions (having substantially the same effect) as may be endorsed on any Debenture Certificate. Every Debenture Certificate shall be under the common seal of the Company affixed with the authority of its Two Directors or a Director and the Company Secretary in accordance with its Articles.
9 TRANSFER OF DEBENTURES
(a) These Debentures shall be freely transferable and the registration of such transfer shall not be subject to any restriction, save and except to the extent required for compliance with statutory requirements.
(b) The Debentures shall be transferable and transmittable through the CDS as long as the Debentures are listed in the CSE. Subject to the provisions contained herein the Company may register without assuming any liability any transfer of Debentures, which are in accordance with the statutory requirements and rules and regulations in force for the time being as laid down by the CSE, SEC and the CDS.
(c ) In the case of death of a Debenture Holder
* The survivor where the deceased was a joint holder; and
* The executors or administrators of the deceased or where the administration of the estate of the deceased is in law not compulsory the heirs of the deceased where such Debenture Holder was the sole or only surviving holder; shall be the only persons recognized by the Company as having any title to his/her Debentures.
(d) Any person becoming entitled to any Debenture in consequence of bankruptcy or winding up of any Debenture Holder, upon producing proper evidence that he/she sustains the character in respect of which he/she proposes to act or his/her title as the Board of Directors of the Company thinks sufficient may in the discretion of the Board be substituted and accordingly registered as a Debenture Holder in respect of such Debentures subject to the applicable laws rules and regulations of CDS, CSE and SEC.
(e) No change of ownership in contravention to these conditions will be recognized by the Company.
10 COVENANT TO OBSERVE PROVISIONS OF THE TRUST DEED AND SCHEDULES.
The Company hereby covenants with the Trustee to comply with the provisions contained herein and to perform and observe the same. It is expressly agreed between the Company and the Trustee that the Trustee shall not be liable for any loss or damage however caused by non-observance or non-compliance with the covenants contained in Clause 11 by the Company.
11 COVENANTS BY THE COMPANY
The Company hereby covenants with the Trustee for the benefit of the Debenture Holders that, so long as any of the Debentures remain outstanding;
(a) The Company shall at all times carry on and conduct its affairs in a proper and appropriate manner.
(b) The Company shall at all times keep such books of accounts as it is obliged to keep under the applicable laws and (to the extent not prohibited by law or otherwise by virtue of any duty of confidentiality) at any time after an event of Default shall have occurred or the Trustee shall have reasonable cause to believe that an Event of Default will occur, allow a reputed Audit Firm appointed by the Trustee in consultation with the Company free access to the same at all times during working hours and to discuss the same with the Directors and Officers of the Company,
6 PROVIDED however that the Trustee and the Audit Firm shall, to the extent legally permitted, maintain confidentiality in respect of all the matters relating to the Company and its business and shall not use any information they acquire pursuant to these provisions for any other purpose.
(c ) The Company shall give a Certificate in writing to the Trustee within 30 days from the date of expiry of every bi-annual period commencing from the date of allotment of the Debentures, signed by Two Directors or a Director and the Company Sectary of the Company, certifying that the interest on the Debentures has been paid to the Debenture Holders in terms of the Clause 4.1 and Clause 4.2 above. In the event the Company defaults in submitting such Certificate the Trustee shall treat it as an Event of Default as set out in Clause 12.1 hereof.
(d) The Company shall at all times keep a correct Register of Debenture Holders showing:
i. The names and addresses (which shall be the registered addresses of the Debenture Holders) of all Debenture Holders.
ii The number, type and the value of the Debentures held by each Debenture Holder.
iii The date on which each Debenture Holder became registered as the holder of any Debentures and the date on which such holder ceased to be so registered.
iv. The date of the issue of Debentures.
Provided however, that in the case of Debentures that are lodged with the CDS, the Company may treat the records maintained by the CDS as an accurate record of the details required herein above.
(e) The Company shall permit the,
i. Trustee at all reasonable times without payment of any fee to inspect the Register of Debenture Holders and to take copies thereof.
ii Debenture Holders at all reasonable times without payment of any fee to inspect the Register of Debenture Holders pertaining to such Debenture Holder and to take copies thereof.
(f) The Company shall forthwith upon becoming aware of the happening of any and every such event as in mentioned in Clause 12.1 hereof give notice thereof in writing to the Trustee PROVIDED that the Company shall in any event issue a certificate to the Trustee within 30 days from the end of every bi-annual period commencing from the date of allotment of the Debentures signed by Two Directors or a Director and the Company Sectary the Company certifying that no event mentioned in paragraphs (c) and (d) of Clause 12.1 hereof has occurred during the previous Six (06) month period which would have resulted in the Debentures becoming payable in terms of the said Clause 12.1 . In the event the Company defaults in issuing such Certificates the Trustee shall treat it as an Event of Default as set out in Clause 12.1 hereof.
(g) The Company shall submit a certificate to the Trustee within 30 days from the end of every bi- annual period commencing from the date of allotment of the Debentures signed by Two Directors or a Director and the Company Sectary of the Company certifying that all of the covenants set out in clause 11 hereof have been complied with and whether or not any borrowing limits have been exceeded. In the event the Company defaults in submitting such Certificate the Trustee shall treat it as an Event of Default as set out in Clause 12.1 hereof.
(h) The Company shall issue to the Trustee such certificates as the Trustee may require to carry out its obligations in terms of these presents PROVIDED such certificates can be issued by the Company without committing any breach of its duty of confidentiality to any person or entity.
(i) The Company shall reproduce the Trust Deed in full in the prospectus relating to the issue of these Debentures, and shall make available to any Debenture Holder immediately on request a certified copy of the Trust Deed upon payment of a fee of LKR 500/-.
(j) The Company shall send to the Debenture Holders and the CSE an Interim Financial Statement prepared on a quarterly basis, no later than forty five days from the end of the first, second and third quarters and two months from the end of the fourth quarter.
(k) The Company shall send the Trustee all published financial information, which is normally provided to ordinary shareholders at the same time that it is sent to the shareholders.
(l) The Company shall not without the prior written approval of the Trustee which approval shall not be unreasonably with held declare or pay any dividend to its shareholders during any financial
7 year unless it has paid all the dues to the Debenture Holders upon the date on which the dividend is proposed to be declared or paid or has made satisfactory provisions therefore.
(m) The Company shall reimburse all reasonable expenses incurred by the Debenture Holders/Trustee after an Event of Default has occurred in connection with:
(i) Preservation of the Company’s assets (whether then or thereafter existing)
(ii) Collection of amounts due under this Deed.
(All such sums shall be reimbursed by the Company within 30 days from the date of notice of demand from the Debenture Holders or the Trustee. Provided in any event that the Company shall give the Trustee immediate notice upon it being aware of the occurrence of an Event of Default and/or if the Company becomes aware that any condition of the Trust Deed cannot be fulfilled and in any such event, to forward to the Trustee, as and when required by the Trustee, a confirmation that no Event of Default has occurred or is continuing)
(n) The Company shall submit to the Trustee a certificate in writing that the principal amount has been paid to the Debenture Holders in accordance with the terms or conditions of the Debentures and provisions of the Trust Deed, immediately upon such payments become due.
(o) The Company shall immediately notify the Trustee in the event that the Company becomes aware of the occurrence of any of the following events that has caused or could cause:
(a) Any amount payable under the Debenture to become immediately payable. (b) Any event in the opinion of the Company that may lead to the acceleration of either the payment of interest or redemption. (c) Any other right or remedy under the terms and conditions of the Debentures or the provisions or covenants of the Trust Deed to become immediately enforceable.
(p) The Company shall submit to the Trustee within one month after the end of every quarter, a certificate that the Company has complied with each and all of the covenants. The certificate should include:
(a) The date of the certificate; (b) the extent of liabilities or borrowing as per Articles of Association and whether or not they have been exceeded; (c) whether any material trading or capital loss has been sustained by the Company. ( in the event the Company fails to deliver the certificate to the Trustee, the Trustee shall inform the Debenture Holders of this fact); (d) whether or not any circumstances materially affecting the Company has occurred which adversely affect the Debentures; (e) whether any contingent liabilities have been incurred by the Company, and if so, the amount incurred and whether or not any contingent liability has matured or is likely to mature within the next twelve months, which will materially affect the ability of the Company to repay the Debentures; (f) whether the Company has assumed a liability of a related corporate body during the quarter, the extent of the liability assumed during the quarter and the extent of the liability at the end of the quarter; (g) Whether or not there has been any change in any accounting method or method of valuation of assets or liabilities of the Company; (h) Whether or not any circumstances have arisen which render adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate; (i) Any substantial change in the nature of the Company’s business since the issue of the Debentures; (j) Whether or not any action has been taken by the Board of Directors of the Company in terms sections 219 and 220 the Companies No. 7 of 2007 during the quarter; (k) Whether or not the company has observed and performed all the covenants and obligations binding upon them respectively pursuant to the Trust Deed.
The certificate shall be made in accordance with a resolution of the Board of Directors and where the Company fails to deliver the certificate to the Trustee, the Trustee shall inform he Debenture Holders of that fact.
(q) In the event that the Company creates a charge, the Company shall submit to the Trustee the written details of the charge within 21 days after it is created. If the amount to be advanced on the security of the charge is indeterminate, the Company shall submit to the Trustee the written details of the amount of each claim, within 5 market days from the date the claim is made.
8 (r) The Company shall at all times maintain records of all its published information and make them available for inspection by the Trustee and Debenture Holders.
(s) The Company shall reimburse the Trustee all reasonable costs, charges and expenses which the Trustee may incur in relation to the exercise of its duties hereunder.
12 EVENTS OF DEFAULT
12.1 The following shall constitute Events of Default under these Presents:
a) If the Company defaults the payment of principal sum or any interest due on the whole or any part of the Debentures in accordance with the provisions contained in these presents.
b) If the Debentures cease to be listed in the CSE at any time between the time of issue and the Date of Maturity, due to any default on the part of the Company.
c) If the Company stops or threatens to stop payment of its debts or ceases to carry on its business, which may lead to the winding up of the Company.
d) If any liquidation, bankruptcy, insolvency, receivership or similar action or proceeding is commenced against the Company or an order shall be made or an effective resolution shall be passed for the winding up of the Company.
e) If the Company does not submit a Certificate to the Trustee as set out in Clause 11 (c ) above certifying that the interest has been paid to the Debenture Holders in terms of the Trust Deed.
f) If the Company does not submit a Certificate to the Trustee as set out in Clause 11 (f) above certifying that no event mentioned in paragraphs (c ) and (d) of this clause hereof has occurred during the previous Six (06) month period, which would have resulted in the Debentures becoming payable in terms of this Clause.
g) If the Company does not submit a Certificate to the Trustee as set out in Clause 11 (g) above certifying that all of the covenants set out in clause 11 of the Trust Deed have been fully complied with.
h) If the Company commits a breach of any of the other covenants or provisions herein contained and on its part to be observed and performed provided however that the Trustee shall give the Company up to 30 days notice before declaring such breach to be an Event of Default.
i) Where any other indebtedness of the Company becomes due and payable prior to its stated maturity or where security created for any of their indebtedness becomes enforceable.
j) Where there is revocation, withholding or modification of a license, authorization or approval that impairs or prejudices the Company’s ability to comply with the terms and conditions of the Debentures or the provisions of the Trust Deed or any other document relating to the issue, offer or invitation in respect of the Debentures.
k) Where any mortgage, charge, pledge, lien or any other encumbrance, present or future is created or assumed by the Company contrary to the terms or conditions of the Debentures and the provisions of the Trust Deed.
12.2 Upon the occurrence of an Event of Default the Trustee may at its discretion and if so requested in writing by the Debenture Holders of at least one fifth (1/5) of the face value of the Debentures outstanding, or if so directed by a Special Resolution of the Debenture Holders give notice to the Company that the principal and interest on the Debentures becomes immediately due and payable.
12.3 Repayment before the maturity of the principal sum on the Debentures or any part thereof in any circumstance shall be subject to the prior written consent of the Central Bank of Sri Lanka.
13 ENFORCEMENT OF OBLIGATIONS
At any time after the Debentures shall have become repayable on maturity or otherwise under any provision of these Presents, the Trustee may at its discretion, or upon the request in writing of the Debenture Holders of at least one fifth (1/5) of the face value of the Debentures outstanding, and in the event that there is no Trustee, the Debenture Holders pursuant to an Extraordinary Resolution and without any further notice, may institute such proceedings as they think fit to enforce repayment and other obligations of the Company under these Presents.
9 Provided that nothing in these Presents shall preclude a Debenture Holder from initiating legal action on his own right.
14 APPLICATION OF MONIES RECEIVED BY THE TRUSTEE
In the event of the Trustee recovering or receiving any monies from the Company consequent to any action taken by the Trustee against the Company, the Trustee shall apply such monies,
(a) In the first place in paying or providing for the payment or satisfaction of the costs charges expenses and liabilities incurred in or about the execution of the trust constituted by these presents (including remuneration of the Trustee);
(b) Secondly, in or towards payment to the Debenture Holders of all arrears of interest remaining unpaid on the Debentures held by them respectively;
(c ) Thirdly in or towards payment to the Debenture Holders of all principal monies due in respect of the Debentures held by them respectively and;
(d) Finally, the Trustee shall pay the surplus (if any) of such monies to the Company or its assigns, PROVIDED that at the discretion of the Trustee payments may be made on account of principal monies before any part of the interest or the whole of the interest on the Debentures have been paid but such alteration in the order of payment of the principal monies and interest shall not prejudice the right of the Debenture Holder to receive the full amount to which they would have been entitled if the ordinary order of payment had been observed. Any payment to the Debenture Holders under this clause shall be made pari passu in proportion to the Debentures held by them respectively.
15 MANNER OF PAYMENT AND ENFORCEMENT OF DEBENTURES
Any payment to be made in respect of the Debentures by the Company or the Trustee may be made in the manner provided in this Trust Deed and any payments so made shall be good discharge pro tanto to the Company or the Trustee, as the case may be. Any payment of interest in respect of a Debenture shall extinguish any claim which may arise directly or indirectly in respect of such interest from a Debenture Holder.
Upon any payment under the provisions of Clause 14(c), the Debentures in respect of which such payment is made in full shall be produced to the Trustee through whom such payment is made and the Company shall call such Debentures to be cancelled (whether lodged in CDS or held in certificate form) and shall certify or procure the certification of such cancellation.
16 REMUNERATION OF THE TRUSTEE
The Company shall pay the Trustee during the continuation of these presents a sum of Sri Lankan Rupees Two Hundred Forty Thousand (LKR 240,000./-) per annum paid semi annually plus the applicable government taxes on account of remuneration for the Trustee for its services under these presents. The said fee shall be paid at the expiry of every one (01) year period commencing from the date of allotment of the Debentures.
Further, the Trustee shall be entitled to reimbursement from the Company all reasonable costs, charges and expenses which the Trustee may incur in relation to the exercise of its duties hereunder.
17 GENERAL POWERS OF THE TRUSTEE
Without prejudice to the powers and reliefs conferred on Trustees by these Presents or by the laws relating to the Trusts or any other applicable law the Trustee shall have the following powers:-
(a) the Trustee may in relation to these presents act on the opinion or advice of or a certificate or any information obtained from any lawyer, banker, valuer, surveyor, broker, auctioneer, accountant or other expert (whether obtained by the Trustee or the Company) and shall not be responsible for any loss occasioned by acting on any such opinion, advice, certificate or information and that the Trustee shall not be liable for acting on any opinion, advice, certificate or information purporting to be so conveyed although the same shall contain some error as long as the Trustee has acted in good faith and if the Trustee has reasonable grounds for believing that the auditor or officer was competent to give or make the certificate, report or statement;
(b) The Trustee shall as regards all the trusts, powers authorities and discretion vested in it by these Presents or by operation of law, have absolute and uncontrolled discretion as to the exercise or
10 non-exercise thereof and the Trustee shall not be responsible for any loss, costs, damages, expenses or inconvenience that may result from the exercise or non exercise thereof but whether the Trustee is under the provisions of these Presents bound to act at the request or direction of the Debenture Holders the Trustee shall nevertheless not be bound unless first indemnified to its satisfaction against all actions, proceedings, claims and demands to which it may render itself liable and all costs, charges, damages, expenses and liabilities which it may incur by so doing. However nothing in this Clause shall preclude a Debenture Holder from filing action on his own if he so wishes;
(c ) To summon any meeting of the Debenture Holders in accordance with the provisions of Clause 21 hereof;
(d) In case of default by the Company, the Trustee may but shall not be bound unless directed either by an instrument in writing signed by the Debenture Holders of at least Seventy Five per centum (75%) of the face value of the Debentures for the time being outstanding or in accordance with a Special Resolution passed by the Debenture Holders in accordance with Clause 21 of these Presents, to waive such terms and conditions as they shall deem expedient any of the covenants and provisions contained in these Presents on the part of the Company to be performed and observed;
(e) The Trustee as between itself and the Debenture Holders shall have full power to determine all questions and doubts arising in relation to any of the provisions of these Presents and every such determination, whether made upon a question actually raised or implied in the acts or proceedings of the Trustee. If a Debenture Holder is not satisfied with the said determination provided by the Trustee then the Debenture Holder may challenge such determination in a court of law, provided that
* Such Debenture Holder has the written consent of the Debenture Holders of at least ten per centum (10%) of the face value of Debentures for the time being outstanding.
* Such application to a Court of law is instituted within Thirty (30) days of notification of such determination to the Debenture Holders.
(f) The Trustee may, in the conduct of the trusts of these Presents, instead of acting through its staff, employ and pay a professional person, to transact or conduct, or concur in transacting or conducting, any business and to do or concur in doing all acts required to be done by the Trustee;
(g) The Trustee shall not be liable to the Company or any Debenture Holder by reason of having recognized or treated as a Debenture Holder any person subsequently found not to be so entitled to be recognized or treated;
(h) Whenever in these presents the Trustee is required in connection with any exercise of its powers, trusts, authorities or discretions to have regard to the interests of the Debenture Holders, it shall have regard to the interests of the Debenture Holders as a class and in particular, but without prejudice to the generality of the foregoing, shall not be obliged to have regard to the consequences of such exercise for any individual Debenture Holders resulting from his or its being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory, Provided further that the Trustee shall not be liable for anything done or omitted to be done in accordance with any direction given to the Trustee by the Debenture Holders pursuant to any duly convened meeting being held;
(i) The Trustee may, accept a certificate signed by Two Directors or a Director and the Company Secretary of the Company certifying that all Debentures have been redeemed or relating to any other matter primarily in the knowledge of the Company as sufficient evidence thereof and such Certificate shall be a complete protection to the Trustee who acts thereon;
(j) Where an Event of Default has occurred and is continuing to occur, the Trustee shall exercise such rights and powers vested in it by the Trust Deed and use a reasonable amount of skill and diligence in exercising such powers;
(k) The Trustee shall give notice in writing to the Debenture Holders as and when the Trustee is notified by the Company of any occurrence mentioned in Clause 12.1 or any condition of the Trust Deed which cannot be fulfilled;
PROVIDED nevertheless that none of the provisions of these Presents shall in any case in which the Trustee has failed to show the degree of care and diligence required by it, having regard to the provisions of these Presents, conferring on the Trustee the powers, authorities or discretions, relieve or indemnify the Trustee against any liabilities which by virtue of any rule of law would otherwise attach to it in respect of any negligence , default , breach of duty or breach of trust of which it may be guilty in relation to its duties under these Presents.
11 PROVIDED FURTHER that it shall exercise reasonable diligence to ascertain whether the Company has committed any breach of the terms and conditions of the Debentures or provisions of the Trust Deed or whether an Event of Default has occurred or is continuing to occur, on perusal of the documents submitted in terms of the covenants set out in the Trust Deed.
(l) The Trustee’s role shall be passive prior to the Trustee being notified of any occurrence of an Event of Default and the Trustee shall not have any other duty apart from those expressly stated herein;
(m) For the avoidance of doubt, the Trustee shall not be considered, nor have any responsibility or liability, as a lender or borrower. The obligation to repay any debts owing to Debenture Holders shall remain with the Company and the Trustee shall not be liable nor responsible for any act, omission or default of the Company nor any other party. The Trustee shall also not be liable for any loss due to any cause beyond its control, nor to take any action in relation to any Event of Default which it is not aware of, nor for consequential or indirect loss, nor for market loss, risk or movement affecting any investments. The Company shall fully indemnify the Trustee for any liability, claim, expense, damage or loss that the Trustee may incur in connection with this Trust Deed, save and except where such liability or loss is due solely to the negligence or willful misconduct of the Trustee. The Trustee shall be entitled to rely and act on any document or instrument which it has received from the Company and to treat it as authentic and authorized unless the Trustee has actual notice otherwise. In performing its duties, the Trustee shall maintain the confidentiality of confidential information received by it, but the Trustee may disclose any such information to a branch, head office, subsidiary or agent of the Trustee on a need to know basis in connection with this Trust Deed, to any government body or court and/or to any party in accordance with the requirement of a law, regulatory directive or regulation;
(n) The Trustee shall ensure that all documents required to be submitted by the Company in terms of the covenants set out in the Trust Deed are forwarded in a timely manner;
(o) The Trustee shall give notice in writing to the Debenture holders as soon as practicable if the Company fail to remedy any breach of terms and conditions of the Debentures or the provisions/covenants of the Trust Deed;
(p) The Trustee is not liable for anything done or omitted to be done in accordance with a direction given to the Trustee by the Debenture Holders at any meeting called.
18 APPOINTMENT AND REMOVAL OF THE TRUSTEE
(a) Subject to the provisions of this Trust Deed, the power of appointing new Trustees shall be vested in the Company, provided further that the Company shall obtain the approval of Debenture Holders holding not less than fifty per centum (50%) of the nominal value of the Debentures for the time being outstanding prior to the appointment of the new Trustee. Notice of such appointment shall be given to the Debenture Holders within thirty (30) days of such appointment by an advertisement published in national newspapers in all three languages (Sinhala, Tamil and English) of the Company’s choice circulating in Sri Lanka.
(b) In the event the Company does not or cannot exercise its power to appoint a new trustee and there being no new trustee appointed as of thirty (30) days before the removal/retirement of the Trustee taking effect in accordance with the terms hereof, the Debenture Holders of not less than 20% of the nominal value of the Debentures in issue may convene a meeting to appoint a new trustee by an ordinary resolution.
(c) Any removal of a Trustee and the subsequent appointment of a replacement trustee by the Company shall be with the consent of 75% majority of Debenture Holders. In the event of the Debenture Holders not being satisfied with the Trustee, they have the right to remove the Trustee by way of a special resolution passed at a General Meeting convened under Clause 21 hereof.
(d) The Company shall be notified of any removal of the Trustee and subsequent appointment of a replacement Trustee by the Debenture Holders.
(e) The Company shall take reasonable steps to replace the Trustee as soon as practicable after becoming aware that: a. The Trustee has ceased to exist b. The Trustee is in the situation of conflict of interests c. The Trustee has ceased to perform its function as a Trustee d. The Trustee is in the situation of being ineligible to be appointed as the Trustee and does not eliminate such situation within 90 days, of being informed of the same.
12 (f) In the event the Trustee discovers that it is not eligible to be appointed or act as Trustee, the Trustee shall give notice in writing to the Company regarding the same.
19 COMPLIANCE OF MAJORITY OF TRUSTEES
If there be more than one Trustee under these Presents the Trustees shall with majority consent exercise all or any of the trust’s powers and discretions vested in the Trustees generally under any clause of these Presents.
20 RETIREMENT OF TRUSTEE
(a) In the event of the Trustee, in its sole and absolute discretion, desiring to retire, the Trustee shall give not less than 90 days notice to the Company in writing to that effect, and the Company shall thereupon appoint a new Trustee in accordance with Clause 18 of these Presents. The Trustee shall continue in its capacity as Trustee until such time a new Trustee is appointed.
(b) In the event of such a retirement, the Trustee at its cost shall publish a notice to this effect in Newspapers in all three languages (Sinhala, Tamil and English) of its choice circulating in Sri Lanka and such notice shall be deemed to be sufficient notice to the Debenture Holders notwithstanding anything to the contrary herein contained.
(c) The aforesaid shall mutatis mutandis apply where there is a removal of a Trustee.
21 MEETINGS OF DEBENTURE HOLDERS
(a) The Trustee shall call a meeting/cause a meeting to be called of Debenture Holders with notice to the Company and all Debenture Holders on a requisition being received in writing signed by the Debenture Holder (s) of at least 1/5th of the face value of the Debentures for the time being outstanding or if requested by the Company.
(b) Not less than 21 days notice shall be given of a meeting for the purpose of passing a Resolution.
(c ) The quorum for the meeting (other than adjourned meeting) for the purpose of passing any resolution shall be the Debenture Holders representing 10% of the face value of the Debentures for the time being outstanding, present in person or by proxy or by attorney.
(d) If such a quorum cannot be obtained, such meeting shall be adjourned for not less than fourteen (14) days in which event notice of adjourned meeting shall be sent to every Debenture Holder and shall state in such notice that if a quorum as above defined shall not be present at the adjourned meeting the Debenture Holders then present shall form a quorum.
(e) The necessary majority for passing a Special Resolution shall not be less than 3/4ths of the persons voting thereat on a show of hands and if a poll is demanded then not less than 3/4ths of the votes given on such poll and the quorum for passing an Extraordinary Resolution shall not be less than 50% of the persons voting thereat on a show of hands and if a poll is demanded then not less than 50% of the votes given on such poll.
(f) On a poll, each Debenture Holder will be entitled to one vote for each Debenture held by such person.
(g) A proxy need not be a holder of the Debentures.
(h) The Trustee shall be the chairman of any meeting of the Debenture Holders and shall appoint a person or body to act as a Secretary of such meeting and a copy of a resolution certified by the Trustee and such Secretary shall deem to be conclusive evidence that such Resolution has been duly adopted.
(i) In the event the Company fails to remedy any breach of terms and conditions of the Debentures or the provisions / covenants of the Trust Deed, the Trustee shall: Call a meeting of the Debenture Holders with notice to the Company Inform the Debenture Holders of the failure at the meeting; and Submit proposals for the protection of the Debenture Holders interests or call for proposals from the Debenture Holders at the meeting as the Trustee considers necessary or appropriate and obtain the directions.
13 22 MODIFICATION OF THE TRUST DEED
The Trustee and the Company may by mutual agreement agree to modify these presents which are not detrimental to the Debenture Holders provided such modifications are of a routine nature. Provided however that any modification to these Presents shall only be made with the consent of the Debenture Holders of at least 3/4ths of the face value of the Debentures for the time being outstanding. Upon a modification being duly made, the Company may request the Debenture Holders to produce their Debenture Certificates to the Company in order that a memorandum of such modification may be endorsed thereon.
23 NOTICES
(a) Any notice or demand to the Company, the Debenture Holder(s) or the Trustee required to be given, made or served for any purpose hereof shall be given, made or served by sending the same by prepaid registered post in the case of the Company or the Trustee to the address shown in this Deed and by delivering it by hand or by prepaid ordinary mail in the case of Debenture Holder(s), to the address which appear in the Debenture Certificate or at such other address as shall have been notified (in accordance with this clause). For the purpose of this Clause, any notice sent by post or mail as provided in this Clause shall be deemed to have been given, made or served 72 hours after dispatch.
(b) The Trustee shall at any time be entitled to give notice of any meeting or make any communication to the Debenture Holders by notice published in Newspapers in all three languages (Sinhala, Tamil and English) of its choice circulating in Sri Lanka and such notice will notwithstanding anything to the contrary herein contained be deemed to be sufficient notice to the Debenture Holders including the provisions of the above clause.
24 MISCELLANEOUS
(a) Nothing in the provisions of these presents shall require disclosure to the Trustee by the Company of any information relating to the affairs of any of its customers except,
i) when required to do so by a Court of Law, or ii) in order to comply with any of the provisions of any Law.
PROVIDED however that the Company shall be obliged to furnish to the Audit Firm referred to in the clause 11(b) information in respect of the Company’s books of accounts.
(b) In the event of any inconsistency between these provisions and any rules, regulations or directions of the Securities and Exchange Commission of Sri Lanka, or the Colombo Stock Exchange such rules, regulations or directions shall prevail.
14 IN WITNESS WHEREOF the said Singer Sri Lanka PLC has caused its common seal to be fixed and authorized signatories of Bank of Ceylon have set their hands hereunto and to one other of the same tenor and date as these presents at Colombo on the day herein before mentioned.
The Common Seal of Singer Sri Lanka PLC ) is hereto affixed on this 28th September 2012 ) in the presence of …………………………………………………. ) Director and……………………………………………Director/Secretary ) who do hereby attest the sealing hereof in the presence of us )
Witnesses: 1.
2.
Signed for and on behalf of ) Bank of Ceylon by its duly ) authorized signatories ) ………………………………………………………. and ) ………………………………………………………. ) have set their respective hands hereto on ) this 28th September 2012 )
Witnesses: 1.
2.
15 THE FIRST SCHEDULE REFERRED TO IN THE TRUST DEED
Singer Sri Lanka PLC
No. 80, Nawam Mawatha, Colombo 2 (a Company duly established under the Companies Act No 17 of 1982)
Issue of Senior Rated Unsecured Redeemable Three Year Debentures of the par value of Rs 100/- each .
Type A Debentures – 2012-2015 CERTIFICATE
Certificate number Number of Debentures
Date of Maturity/Redemption Principal Sum Principal Sum
Name & Address of the Debenture Holder/s NIC/PP/Co Reg No of the Debentures Holder/s
Singer Sri Lanka PLC, a Company duly established under the Companies Act No 17 of 1982 and re–registered under the Companies Act No 7 of 2007 (Registration No PQ160) in the Democratic Socialist Republic of Sri Lanka and having its Registered Office at No. 80, Nawam Mawatha, Colombo 2 (hereinafter sometimes called and referred to as “The Company”, shall pay on the Date of Maturity/Redemption mentioned above or on such other earlier date on which the Debentures hereby covered become payable under the conditions endorsed on the reverse hereof and the terms and conditions in the Trust Deed referred to in the conditions endorsed on the reverse hereof (hereinafter referred to as “the said Trust Deed”) to the person/s mentioned above or the registered holder/s for the time being hereof (hereinafter called “the Debenture Holder”) the Principal Sum mentioned above representing the total value of the Debentures covered by this Debenture Certificate (hereinafter called “these Debentures”) in accordance with the provisions contained in the said Trust Deed.
Interest on these Debentures shall be paid at a fixed Interest rate of Seventeen per centum (17%) p.a. payable quarterly each year on 31st December, 31st March, 30th June and 30th September from Date of Allotment until the Date of Redemption on the principal sum of the Debentures in the case of Type A.
Interest payments shall be made on the due date of interest after deducting any taxes and charges thereon, if any applicable in terms of the law prevailing at the time of payment. The final interest payment shall be made with the repayment of the principal sum on the date of redemption. In order to accommodate the Debenture interest cycles in the Debt Trading System (DEX) the payment of interest shall not include Debenture Holders holding Debentures in the DEX as at the last day of the payment cycle but one day prior to the Due Date of Interest (Entitlement Date). If the entitlement date is a holiday interest shall be calculated including the Entitlement Date.
This Debenture Certificate is issued subject to the conditions contained herein and on the reverse hereof and the terms and conditions in the said Trust Deed which is deemed to be a part hereof and all constituting integral parts of these Debentures.
GIVEN UNDER THE COMMON SEAL OF SINGER SRI LANKA PLC ON THIS ………. DAY OF ….. IN THE YEAR 2012.
DIRECTOR DIRECTOR / COMPANY SECRETARY
16 THE SECOND SCHEDULE REFERRED TO IN THE TRUST DEED
Singer Sri Lanka PLC No. 80, Nawam Mawatha. Colombo 2 (a Company duly established under the Companies Act No 17 of 1982)
Issue of Senior Rated Unsecured Redeemable Three Year Debentures of the par value of Rs 100/- each .
Type B Debentures - 2012-2015 CERTIFICATE
Certificate number Number of Debentures
Date of Maturity/Redemption Principal Sum
Name & Address of the Debenture Holder/s NIC/PP/Co Reg No of the Debenture Holder
Singer Sri Lanka PLC, a Company duly established under the Companies Act No 17 of 1982 and re–registered under the Companies Act No 7 of 2007 (Registration No PQ160) in the Democratic Socialist Republic of Sri Lanka and having its Registered Office at No. 80, Nawam Mawatha, Colombo 2 (hereinafter sometimes called and referred to as “the Company”),shall pay on the Date of Maturity/Redemption mentioned above or on such other earlier date on which the Debentures hereby covered become payable under the conditions endorsed on the reverse hereof and the terms and conditions in the Trust Deed referred to in the conditions endorsed on the reverse hereof (hereinafter referred to as “the said Trust Deed”) to the person/s mentioned above or the registered holder/s for the time being hereof (hereinafter called “the Debenture Holder”) the Principal Sum mentioned above representing the total value of the Debentures covered by this Debenture Certificate (hereinafter called “these Debentures”) in accordance with the provisions contained in the said Trust Deed.
Interest on these Debentures shall be paid at a variable interest rate of Three months Gross Treasury Bill rate plus two point two five (2.25%) per annum, payable quarterly, each year on the 31st December., 31st March, 30th June and 30th September in the case of Type B.
Interest payments shall be made on the due date of interest after deducting any taxes and charges thereon, if any applicable in terms of the law prevailing at the time of payment. The final interest payment shall be made with the repayment of the principal sum on the date of redemption. In order to accommodate the Debenture interest cycles in the Debt Trading System (DEX) the payment of interest shall not include Debenture Holders holding Debentures in the DEX as at the last day of the payment cycle but one day prior to the Due Date of Interest (Entitlement Date). If the entitlement date is a holiday interest shall be calculated including the Entitlement Date.
This Debenture Certificate is issued subject to the conditions contained herein and on the reverse hereof and the terms and conditions in the said Trust Deed which is deemed to be a part hereof and all constituting integral parts of these Debentures.
GIVEN UNDER THE COMMON SEAL OF SINGER SRI LANKA PLC ON THIS ………. DAY OF …. IN THE YEAR 2012.
DIRECTOR DIRECTOR / COMPANY SECRETARY
17 THE THIRD SCHEDULE REFERRED TO IN THE TRUST DEED
The Conditions Endorsed on the Debentures
1. These Debentures are part of a series of Five Million (5,000,000) Senior Rated Unsecured Redeemable Three Year Debentures with the option of increasing upto Six Million Four Hundred Forty Four Thousand (6,444,000) issued by Singer Sri Lanka PLC at an issue price of LKR 100/- per Debenture subject to the Terms and Conditions contained in this Debenture Certificate and the terms and conditions contained in the Trust Deed dated 28th September 2012 (hereinafter referred to as “the said Trust Deed”)
2. These Debentures of the said series rank pari passu with each other and without any preference or priority one over another. These Debentures will be subsequently be listed on the Main Board of the Debt System of the Colombo Stock Exchange (CSE).
3. Upon listing of the Debentures in respect of the Debenture Certificates which are dematerialized, the Company shall thereafter always act on the information furnished by the CDS regarding the beneficial ownership of the Debentures. It shall therefore be the responsibility of each Debenture Holder to keep all the information in respect of such Debenture Holder updated. The Company shall be absolved from any responsibility or liability in respect of any error or absence of necessary changes in the information recorded with the CDS. The Company shall be entitled to make all interest and redemption payments to the persons who are registered as the beneficial owners of the Debentures on the CDS as of the date on which such payments are due without any request for claim from such Debenture Holders and the Company shall accordingly send the payment by RTGS transfer if so requested by the Debenture Holder at the cost and expense of the Debenture Holder or by crossed cheque marked “ Account Payee only” to the registered address of the Debenture Holder as may be furnished by the CDS and such payment shall be deemed to be a payment duly made by the Company to the respective Debenture Holders in redemption of the Debentures of such Holders. In order to accommodate the Debenture interest cycles in the Debt Trading System (DEX) the payment of interest shall not include Debenture holders holding Debentures in the DEX on the Due Date of Interest but one day prior to the due date of interest (i.e. the entitlement date). If the entitlement date is a holiday interest shall be calculated including the entitlement date.
4. (a) These Debentures shall be freely transferable and the registration of such transfer shall not be subject to any restrictions save and except to the extent required for compliance with statutory requirements.
(b) Upon a listing of these Debentures shall be transferable and transmittable through the CDS. Subject to the provisions contained herein the Company may register without assuming any liability any transfer of Debentures, which are in accordance with the statutory requirements and rules and regulations in force for the time being as laid down by the CSE, SEC and CDS.
(c ) In the case of the death of a Debenture Holder the survivor where the deceased was a joint holder and the executors or administrators of the deceased or where the administration of the estate of the deceased is in law not compulsory the heirs of the deceased where such Debenture Holder was the sole or only surviving holder shall be the only persons recognized by the Company as having any title to his/her Debentures.
(d) Any person becoming entitled to any Debenture in consequence of bankruptcy or winding up of any Debenture Holder, upon producing proper evidence that he/she sustains the character in respect of which he/she proposes to act or his/her title as the Board of Directors of the Company thinks sufficient may in the discretion of the Board be substituted and accordingly registered as a Debenture Holder in respect of such Debentures subject to the applicable laws rules and regulations of CDS, CSE and SEC.
5. No change of ownership in contravention of these conditions will be recognized by the Company. The Company shall only recognize and treat the registered Debenture Holder(s) as the owner hereof and as alone being entitled to receive and give effectual discharges for the monies hereby covered.
6. In the event of any inconsistency between the terms and conditions in this Debenture certificate and any term or condition of the said Trust Deed the terms or conditions in the said Trust Deed shall always prevail.
18