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SSEENNKKAADDAAGGAALLAA FFIINNAANNCCEE CCOOMMPPAANNYY LLIIMMIITTEEDD
Incorporated under the Companies Ordinance No.51 of 1938 and registered under the Finance Companies
Act No. 78 of 1988. The Company is re-registered under the Companies Act No.07 of 2007
IINNTTRROODDUUCCTTOORRYY DDOOCCUUMMEENNTT
For obtaining the listing of
53,368,000
Ordinary Voting Shares
on the Diri Savi Board of the Colombo Stock Exchange.
For further inquiries, please contact the Managers to the Introduction
If you are in any doubt regarding the contents of this document you should consult your stockbroker, bank
manager, lawyer or any other professional advisor.
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 the Company since
the date of this document.
MANAGERS TO THE INTRODUCTION
Capital Alliance Limited,
Level 05, “Millennium House”,
46/58, Navam Mawatha,
Colombo 02.
Tel: 2317777
Fax: 2317788
�������������������� ���� ���������
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
3
DECLARATION
This Introductory Document has been prepared by Capital Alliance Limited from Information
supplied by Senkadagala Finance Company Limited (The Company) or which is publicly available.
The Directors of the Company, collectively and individually, having made all reasonable inquiries,
confirm that to the best of their knowledge and belief, the information contained herein is true and
correct in all material respects and that there are no other material facts, the omission of which, would
make any statement herein misleading. While Capital Alliance Limited has taken reasonable care to
ensure full and fair disclosure it does not assume any responsibility for any investment decision made
by 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 to make any representations not contained in this
Introductory Document and if given or made, any such information or representation must not be
relied upon as having been authorized by the Company.
�
�
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 the statements made, opinions expressed or reports
included in this Introductory Document.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
4
ABBREVIATIONS USED IN THIS INTRODUCTORY DOCUMENT
CDS - Central Depository Systems (Pvt.) Limited
CSE - Colombo Stock Exchange
SFCL or the “Company” - Senkadagala Finance Company Limited
SEC - Securities & Exchange Commission of Sri Lanka
CBSL - Central Bank of Sri Lanka
Ordinary Share(s) - Ordinary Voting Share(s) of the Company
EGM - Extraordinary General Meeting
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
5
TABLE OF CONTENTS�1 CORPORATE INFORMATION 6��2 INFORMATION RELEVANT TO THE INTRODUCTION 7�
2.1 Introduction of Ordinary Voting Shares for Listing 7�2.2 Collection Points 7�
�3 FINANCIAL SECTOR 11�
Registered Finance Companies 11��4 PROFILE OF THE ENTITY 13�
4.1 Overview of the Company and Nature of the Business 13�4.2 Degree of Dependence 15�4.3 Corporate Structure 15�4.4 Human Resources 17�4.5 Future Plans & Prospects 17�4.6 Assumptions on which future plans are based 18�4.7 Associated risks to future plans 19�
�5 DETAILS OF THE BOARD OF DIRECTORS 21�
5.1 Directors’ Profiles 22�5.2 Directors’ interest in assets 24�5.3 Founder/ Management/ Deferred Shares of the Company 24�5.4 Articles pertaining to the Directors 24�5.5 Statement – Board of Directors 24�
�6 SENIOR MANAGEMENT TEAM 25��7 CAPITAL STRUCTURE 27�
7.1 Stated Capital 27�7.2 Details of the Ten Largest Ordinary Shareholders as at 28th January 2011 27�7.3 Capitalization of Reserves 28�
�8 STATUTORY AND OTHER GENERAL INFORMATION 31�
8.1 Litigation, Disputes And Contingent Liabilities 31�8.2 Material Contracts 31�8.3 Details of Commissions Paid and Benefits Paid to Promoters 31�8.4 Management Agreements 31�8.5 Inspection of Documents 32�
�9 FINANCIAL INFORMATION 33�
9.1 Auditor Report on the Five Year Financial Performance of Senkadagala Finance Company Limited 33�9.2 Ratios and Share Information 36�9.3 Receivables 37�9.3.1 Policy for classification of non-performing receivables 37�9.3.2 Composition of Receivables: 37�9.4 Maturity Analysis of Deposits & Borrowings 38�
�10 CORPORATE GOVERNANCE PRACTICES 39�
10.1 Directors 39�10.2 Remuneration Committee 39�10.3 Audit Committee 40�
�11 DECLARATION BY THE DIRECTORS 41�FINANCIAL STATEMENTS 42�AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2008 43�AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2009 71�AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2010 99�UN-AUDITED INTERIM FINANCIAL STATEMENTS AS AT 31ST DECEMBER 2010 131�
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
6
1
CORPORATE INFORMATION
Name of the Company Senkadagala Finance Company Limited
Incorporation & Legal Form A Public Limited Liability Company domiciled in Sri Lanka, incorporated under the
Companies Ordinance No.51 of 1938 on 29th December 1968. The Company is re-
registered under the Companies Act No. 7 of 2007.
Registered as a Finance Company by the Monetary Board of Sri Lanka under the
Finance Companies Act No.78 of 1988. Registered under the Finance Leasing Act
No.56 of 2000. It is also an approved Credit Agency under the Mortgage Act No.06 of
1949 and the Trust Receipt Ordinance No.12 of 1947.
Company Registration No. PB 238
Registered Office 2nd Floor, No. 267, Galle Road, Colombo 3.
Telephone 011-2301301
Fax 011-2301937
Company Secretary Managers & Secretaries (Pvt) Limited
No.08, Tickell Road,
Colombo 08.
Company Auditors KPMG Ford Rhodes Thornton & Co.,
Chartered Accountants,
Sir Mohamed Macan Makar Mawatha,
Colombo 03.
Internal Auditors Ernst & Young Advisory Services (Pvt) Ltd.
No.839/2, Peradeniya Road,
Kandy.
Bankers Commercial Bank of Ceylon PLC
Hatton National Bank PLC
Sampath Bank PLC
Honkong & Shanghai Banking Corporation Limited
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
7
2
INFORMATION RELEVANT TO THE INTRODUCTION
2.1 INTRODUCTION OF ORDINARY VOTING SHARES FOR LISTING
This Introductory Document dated 03rd March 2011 is published for the purpose of obtaining
a listing on the Colombo Stock Exchange for the Ordinary Voting Shares of Senkadagala
Finance Company Limited.
The shares are to be listed on the Diri Savi Board of the Colombo Stock Exchange.
2.2 COLLECTION POINTS
Copies of the Introductory Document may be obtained from the Manager or any member firm
and trading member firm of the Colombo Stock Exchange
2.2.1 MANAGERS TO THE INTRODUCTION
Capital Alliance Limited Level 5, ‘Millennium House’
46/58, Navam Mawatha,
Colombo 02.
Telephone : 011-2317777
Fax : 011-2317788
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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2.2.2 MEMBERS AND TRADING MEMBERS OF THE CSE
Members of the CSE
Acuity Stockbrokers (Pvt) Limited Level 6, Acuity House,
53, Dharmapala Mawatha,
Colombo 03.
Telephone: 2206206
Fax: 2206298/9
E-mail: [email protected]
Asha Phillip Securities Limited Level 4, "Millennium House"
46/58, Navam Mawatha,
Colombo 02
Telephone: 2429100
Fax: 2429199
E-mail: [email protected]
Asia Securities (Pvt) LimitedLevel 21, West Tower,
World Trade Center,
Echelon Square, Colombo 1.
Telephone: 2423905,5320000
Fax: 2336018
E-mail: [email protected]
Assetline Securities (Pvt) Limited 282, Kaduwela Road,
Battaramulla.
Telephone: 4700111, 2307366
Fax: 4700112
E-mail: [email protected]
Bartleet Mallory Stockbrokers (Pvt) Ltd. Level "G", Bartleet House,
65, Braybrooke Place,
Colombo 2.
Telephone: 5220200
Fax: 2434985
E-mail: [email protected]
Capital TRUST Securities (Pvt) Limited 42, Sir Mohamed Macan Marker Mawatha,
Colombo 3.
Telephone: 5335225
Fax: 5365725
E-mail: [email protected]
Ceylinco Stockbrokers (Pvt) Limited Ceylinco House, Level 9,
69, Janadhipathi Mawatha,
Colombo 1.
Telephone: 4714300, 4714388, 4714389
Fax: 2387228
E-mail: [email protected]
CT Smith Stockbrokers (Pvt) Limited 4-14, Majestic City,
10, Station Road,
Colombo 4.
Telephone: 2552290-4
Fax: 2552289
E-mail: [email protected]
D N H Financial (Pvt) Limited Level 16, West Tower,
World Trade Centre,
Colombo 01.
Telephone: 5732222
Fax: 5736264
E-mail: [email protected]
J B Securities (Pvt) Limited150, St. Joseph Street,
Colombo 14.
Telephone: 2490900, 0772490900
Fax: 2430070, 2446085,2447875
E-mail: [email protected]
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
9
John Keells Stockbrokers (Pvt) Limited130, Glennie Street,
Colombo 2.
Telephone: 2306250,2342066-7,2446694-5
Fax: 2342068, 2326863
E-mail: [email protected]
Lanka Securities (Pvt) Limited 228/2, Galle Road
Colombo 4.
Telephone: 4706757,2554942
Fax: 4706767
E-mail: [email protected]
NDB Stockbrokers (Pvt) Limited 5th Floor, NDB Building,
40, Navam Mawatha,
Colombo 2.
Telephone: 2314170-8
Fax: 2314180
E-mail: [email protected]
SC Securities (Pvt) Limited2nd Floor,
55, D.R. Wijewardena Mawatha,
Colombo 10.
Telephone: 4711000
Fax: 2394405
E-mail: [email protected]
Somerville Stockbrokers (Pvt) Limited 137, Vauxhall Street,
Colombo 2.
Telephone: 2329201-5, 2332827, 2338292-3
Fax: 2338921
E-mail: [email protected]
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
10
Trading Members of the CSE
Capital Alliance Securities (Pvt) LimitedLevel 5, "Millennium House",
46/58 Navam Mawatha,
Colombo 02
Tel: 2317777
Fax: 2317788
E-mail: [email protected]
First Guardian Equities (Pvt) Limited 32nd Floor, East Tower,
World Trade Centre,
Colombo 01
Tel: 5884400
Fax: 5884401
E-mail: [email protected]
Heraymila Securities Limited Level 8, South Wing,
‘Millennium House’
46/58, Navam Mawatha,
Colombo 02
Tel: 2359100
Fax: 2305522
E-mail: [email protected]
IIFL Securities Ceylon (Pvt) Limited27th Floor, East Tower,
World Trade Centre,
Colombo 01
Tel: 2333000
Fax: 2333383
E-mail: [email protected]
Richard Pieris Securities (Pvt) Limited 69, Hyde Park Corner,
Colombo 02
Tel: 0777 281281
E-mail : [email protected]
SKM Lanka Holdings (Pvt) Limited377/3, Galle Road,
Colombo 03
Tel: 2372413-4
Fax: 2372416
E-mail: [email protected]
SMB Securities (Pvt) Limited47, Dharmapala Mawatha,
Colombo 03
Tel: 5539593
Fax: 2339292
E-mail: [email protected]
Taprobane Securities (Pvt) Limited 2nd Floor, 10, Gothami Road,
Colombo 08
Tel: 5328200
Fax: 5328277
E-mail: [email protected]
TKS Securities (Pvt) Limited 14, Reid Avenue,
Colombo 07
Tel: 2675200
Fax: 2682553
E-mail: [email protected]
Claridge Stockbrokers (Pvt) Limited 10, Gnanartha Pradeepa Mawatha,
Colombo 08
Tel: 2697974
Fax: 2677576
E-mail: [email protected]
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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3
FINANCIAL SECTOR
The financial sector in the country, including the Central Bank of Sri Lanka, mainly
comprises of the following major financial institutions – Licensed Commercial Banks,
Licensed Specialized Banks, Specialized Leasing Companies, Registered Finance
Companies, Insurance Companies and Pension and Provident Funds. In total, the asset base
of the country’s major financial institutions amounted to Rs. 5,616 billion as at end of
December 2009.
REGISTERED FINANCE COMPANIES
The core activities of Registered Finance Companies (RFCs) revolve around providing
financing to customers that do not have easy access to bank finance, through leasing and hire
purchase facilities. RFCs are regulated under the Finance Companies Act No.78 of 1988.
The total number of RFCs in operation as at end December 2009 was recorded at 35, carrying
out operations through a network of 289 branches spread island wide. Out of the total asset
base of Rs. 5,616 billion, the total asset base of RFCs for the year 2009 was recorded at
Rs.185 billion, accounting for 3.3% of the total assets of the country’s major financial
institutions.
Market share of the two largest RFCs accounted for approximately 37% of the total assets of
the industry during 2009, a reduction of 9% from 46% during 2008. The largest nine RFCs
accounted for approximately 73% of the total assets, whilst eighteen medium size RFCs
accounted for only 24% of total assets.
The sector is steadily recovering, with the performance of most of the companies in the sector
having been adversely affected in 2009 due to the resultant high interest rates and the
heightened credit and liquidity risks which were caused by the collapse of certain unregulated
finance companies. The financial distress caused by the collapse of the unregulated finance
companies, resulted in a loss of investor confidence in all finance companies and cast a
negative outlook on the entire sector.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
12
This resulted in most of the Companies scaling down business operations to mitigate their
risk factor. Hire Purchase and Lease facilities which accounted for approximately 63% of the
RFC industry’s assets saw a slowdown in growth, with many companies curtailing lending
and adopting a conservative approach. Thus the growth of total assets of RFCs was recorded
at 5% as opposed to a 23% growth in 2008.
However, amidst these challenges most of the RFCs have continued to generate positive
returns, with 27 of the 35 RFCs complying with the increased minimum capital requirement,
and maintaining the capital adequacy well above the statutory minimum indicating the
sector’s resilience and ability to withstand its challenges.
The sector recovered significantly as a result of the good governance and well adopted
business practices undertaken by RFCs. The stability of the sector was preserved primarily
through the timely intervention and stringent regulations and supervision undertaken by the
CBSL, which undertook several measures to restore the public confidence in the sector and
provided advisory services on the recovery process.
Further, to enhance and strengthen the regulatory framework of the financial sector, CBSL
have proposed certain changes to the framework, which include closely monitoring the
compliance with the Finance Companies (Corporate Governance) Direction and making the
board of directors more accountable for the companies’ performance and risk management
practices. In addition, RFCs have been required to list on the Colombo Stock Exchange by
the end of June 2011 to broad base the share ownership structure and to improve transparency
as well as the imposition of the Finance Companies (Reporting Requirement) Direction No.
05 of 2009 to grant more powers to the CBSL to regulate RFCs.
Source: Central Bank of Sri Lanka
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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4
PROFILE OF THE ENTITY
4.1 OVERVIEW OF THE COMPANY AND NATURE OF THE BUSINESS
Senkadagala Finance Company Limited (SFCL) is a medium-sized Registered Finance
Company (RFC) licensed by the Central Bank of Sri Lanka. Based on publicly available
information published by finance companies, SFCL is the seventh largest RFC in Sri Lanka,
in terms of its asset size, accounting for 3.3% of sector assets at the financial year ended
2009.
A public limited company incorporated in 1968 under the Companies Ordinance No.51 of
1938, and registered under the Finance Companies Act No.78 of 1988. The Company re-
registered under the Companies Act No.7 of 2007. SFCL is also a registered Finance Leasing
Establishment in terms of the Finance Leasing Act No. 56 of 2000.
Senkadagala Finance Company Limited, as denoted by its name, has its roots in Kandy.
Nevertheless, the Company has expanded its presence to encompass an island-wide network
of 30 branches, located in seven provinces. During the course of last year, the network grew
by four branches in the Western province to cater to the commercial boom in the province.
The principal lines of business that the Company engages in can be broadly classified into
fund-based and fee-based categories.
Fund-based services include Lease Finance, Hire Purchase Finance, Trade Loans and Pledge
Loans. Since inception, SFCL has been primarily involved in the provision of vehicle finance
through lease and hire purchase agreements, and remains so, with vehicle finance accounting
for 95% of its loan book as at the financial year ended 2009.
Fee-based services include Insurance Brokering Services and IT-related consultancy. The
Company acts as an agent for reputed insurance companies, providing an insurance brokering
service to its own clientele. In terms of IT, the Company is under agreement with IBM and
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
14
0
1000
2000
3000
4000
5000
6000
7000
2006 2007 2008 2009 2010
Total�Assets�(Rs�Mn.)
0
1000
2000
3000
4000
5000
2006 2007 2008 2009 2010
Lending�Assets�Portfolio�(Rs.�Mn.)
0
500
1000
1500
2000
2500
2006 2007 2008 2009 2010
Term�Deposits�(Rs.�Mn)
Keells Business Systems Ltd. to offer software engineering solutions. In addition, the
Company also provides IT consultancy services to associate companies and outside clients.
Further it has been observed based on publicly available information published by finance
companies that SFCL is amongst the largest licensed deposit-taking institutions registered
with the Central Bank of Sri Lanka (CBSL) and is supervised by the Department of
Supervision of Non-Bank Financial Institutions. The target clientele of RFCs is primarily the
Small and Medium Enterprise sector which lies beyond the risk appetite of traditional
commercial banks. Competition is therefore largely limited to other RFCs and specialised
leasing companies. Operating in a very competitive environment against 35 registered
finance companies, the Company holds a noteworthy 3% of the country’s financing assets.
The Company has been affirmed a long-term rating of ‘BBB+ (lka)’, with a stable outlook by
Fitch Ratings Lanka Limited.
In addition, SFCL, having recently introduced a fully automated state-of-the-art Savings
Account system with ATM card facility, is the first finance company in Sri Lanka to issue an
ATM card which can be accessed at over 23 million ATM locations worldwide.
The following graphs depicting the growth in the assets, term deposits and lending assets
portfolio of SFCL indicate the resilience of the Company despite external challenges faced by
the industry during the recent financial turmoil in both international and domestic financial
markets.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
15
4.2 DEGREE OF DEPENDENCE
The principal input of the Company’s operations is the funds employed. These funds are
obtained through deposits from the public and from bank borrowings. The Company received
45% from public deposits and 31% from bank borrowings for the financial year ended 31st
March 2010. The balance 24% constitutes of other institutional borrowings. The Company
ensures that both avenues of funds are obtained from a number of different sources so as to
avoid dependence on any one particular group of suppliers.
Similarly, the Company has also ensured a wide spread customer base, by utilising its
network of branches. In addition, it also maintains a significantly low single borrower limit
which is applicable to both individuals and to groups such that no single borrower or group of
borrowers has a significant share of the Company’s portfolio of receivables.
Therefore it can be firmly established that there is no significant dependency by the Company
on any one or group of its customers or suppliers.
4.3 CORPORATE STRUCTURE
Senkadagala Finance Company Limited is a subsidiary of E.W. Balasuriya & Co. (Pvt)
Limited, which owns 30,088,050 shares amounting to 56.38% of the share capital of the
Company as at 31st December 2010.
E. W. Balasuriya & Co. (Pvt) Limited was incorporated on 27th April 1984, under the
Companies Ordinance No.51 of 1938 and re-registered under the Companies Act. No. 07 of
2007. The principle business of E. W. Balasuriya & Co. (Pvt) Limited includes the purchase
and sale of gems, jewellery and other precious stones both locally and abroad. In addition, the
Company also manufactures jewellery and exports the same worldwide, and test the gems for
identifications using valuation reports and necessary certificates required by the state gem
corporations and other Government authorities.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
16
4.3.1 SHAREHOLDERS OF E.W. BALASURIYA & COMPANY LIMITED
ORDINARY SHAREHOLDERS AS AT NUMBER OF SHARE31st December 2010 SHARES PERCENTAGE
00.03 100,081 )desaeceD( ayirusalaB .W.E .rM )1(
00.01 100,06 ayirusalaB .L .rM )2(
00.01 000,06 )desaeceD( ayirusalaB .J .srM )3(
00.01 000,06 ayirusalaB .A .rD )4(
00.01 000,06 ayirusalaB .R .rM )5(
00.01 000,06 odnanreF .L .srM )6(
00.01 000,06 ayirusalaB .M .rD )7(
00.01 000,06 nahoM nadaM .G ).srM( .rD )8(
TOTAL 600,002 100.00
4.3.2 BOARD OF DIRECTORS OF E.W. BALASURIYA & COMPANY LIMITED
Name of Director Address
Mr. L. Balasuriya No. 14, Claessen Place, Colombo 05
Dr. A. Balasuriya No. 03, Galkanda Lane, Anniewatte, Kandy
Mr. R. Balasuriya No.53/7, Ward Place, Colombo 07
Mrs. L. Fernando No. 30/3, Ward Place, Colombo 07
Dr. M. Balasuriya No. 81, Kynsey Road, Colombo 07
Dr. (Mrs.) G. Madan Mohan No.43, Ward Place, Colombo 07
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
17
Senior�Managers�� 5%
Managers�� 4%Branch�Managers�
� 13%
Assistant�Managers�� 3%
Executives�� 38%
Trainee�Executives�&�Others�� 3%
Analysis�of�Employees�by�levels�of�responsibility
4.4 HUMAN RESOURCES
The number of employees of the Company as at 31st December 2010 was 215, in comparison
to 213 employees as at 31st March 2010.
The analysis of employees based on the level of responsibility is as follows:
The Company does not have any Labour Unions and has not entered into any collective
agreement.
4.5 FUTURE PLANS & PROSPECTS
The local economy, after experiencing a period of high interest rates together with high
inflation during the beginning of the financial year, slowly declined. This in turn, had a
negative effect on many of the customers of SFCL and brought about an increase in
delinquency in repayment of loans and payment of rentals. However, with the improvement
of macro-economic conditions and the effective remedial steps taken by the Central Bank of
Sri Lanka, a fall in interest rates was experienced during the second half of the year which
eased the pressures in the market.
Further, a reduction in the rates of customs duty on imported motor vehicles, which was
announced previously by the government, came into effect part way during the year. This
brought immediate relief to the industry, which up to that point, was facing difficult times.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
18
Automobile dealers reduced the prices of stocks immediately resulting in a surge in demand.
As the vast majority of these vehicle acquisitions were funded through leases, SFCL is geared
up to obtain a fair portion of this surge.
The Company has also embarked on a continuous training programme for its staff in order to
achieve increased levels of service quality. Towards this end, several residential training
programmes and workshops have been planned for the year ahead.
The Company will be taking a number of steps in the near future designed to increase the
level and frequency of interaction with clients. The objective of this endeavour is to
strengthen and personalise the bond with clientele. An analysis of SFCL’s portfolio has
revealed that the major source of new business of the Company is through repeat business
from existing customers. Therefore, it is the intention of the Company to ensure that there
will be a continuous benefit from this avenue of business.
The Company also has plans to expand its existing network so as to better service its clients,
and has applied to the Central Bank of Sri Lanka for approval to open five new service
centres.
4.6 ASSUMPTIONS ON WHICH FUTURE PLANS ARE BASED
The future plans and prospects of the Company are based on the assumption that there will be
an increased demand for its products and services inline with the expectations of the
Company. In addition, the Company anticipates that the current improvement in the macro-
economic environment will sustain, with inflation and interest rates maintained at below
double digit figures for the financial year 2011/12. Further, these future plans are expected to
be sustainable on the assumption that changes in Government regulations or changes in
directions to finance companies will not have severe adverse affects to the operations and
profitability of the Company.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
19
4.7 ASSOCIATED RISKS TO FUTURE PLANS
Risk management can be simply defined as the process of analyzing risk and determining the
best method of managing the exposure to such risks.
Financial institutions like SFCL are constantly exposed to numerous risks. These include,
inflation risk which alter the disposable income, saving and spending patterns of consumers,
thereby impacting the leasing and lending portfolio of the Company, as there is a direct
impact on the level of deposits and the tendency for customers to invest in vehicles financing.
This will in turn affect the expected levels of performance of the Company
Other risks to which financial institutions are exposed include exchange rates, imposition of
taxes and changes in the rates of applicable taxes, as they are indirectly affected by the
performance of the auto industry and any regulations imposed in terms of the industry.
In addition, the Company is exposed to amendments in legislation and directions issued by
the Central Bank of Sri Lanka to finance companies. Volatility of future interest rates will
also have an impact on the achievement of future plans of the Company, as this will have a
direct impact on the Company’s rate of borrowing and lending. As a result, SFCL needs to be
cognizant of the risks it can be exposed to in an evolving macro environment.
The risk management framework of SFCL was formulated taking into account the changes in
business activity and macro decisions, policy changes and market trends. Accordingly, an
effective risk management framework was prepared taking into account the following:
(a) a clearly defined organizational structure with unambiguous roles and responsibilities
pertaining to the SFCL staff involved in risk taking and management.
(b) an effective MIS (Management Information System) system that ensures a flow of
information between operational levels to top management of SFCL.
(c) clearly defined risk management policies and procedures covering risk identification,
acceptance measurement, monitoring, reporting and control.
(d) a mechanism to ensure an ongoing review of systems, policies and procedures and
the ability to adopt changes in the future at SFCL
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
20
In compliance with regulatory requirements and the risk profile of products and services
under the SFCL umbrella, the board of directors of SFCL established an Integrated Risk
Management Committee. This committee is tasked with protecting and growing SFCL’s
solvency while ensuring the Company is sufficiently liquid to meet its obligations on time. It
also improves the Company’s ability to identify, measure, monitor and control the overall
levels of risk, while being responsible for implementing a comprehensive action plan on
matters referred by the line management on issues requiring immediate action. The
committee which meets quarterly will also whenever necessary recommend further stress
testing/sensitivity analyses to be conducted on diverse scenarios, assessing the impact of
same.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
21
5
DETAILS OF THE BOARD OF DIRECTORS
As at the date of the Introductory Document, the board of directors of Senkadagala Finance
Company Limited constitutes of one (01) executive director and eight (08) non-executive
directors, which include a Non-Executive Chairman. The Managing Director is the only
executive director and is also the Chief Executive Officer of the Company. The directors
bring in a range of talents, skills and expertise needed to guide the Company in the interest of
all stakeholders.
Name of Director Age Address
Mr. S. K. Wickremesinghe 82 8, Claessen Place, Colombo 5.
Mr. L. Balasuriya 56 14, Claessen Place, Colombo 5.
Mr. C.L.S. Herath 77 No.64, Old Kesbewa Road, Nugegoda.
Dr. A. Balasuriya 57 3, Galkanda Lane, Anniewatte, Kandy.
Mrs. L. Fernando 52 30/3, Ward Place, Colombo 7.
Mr. R. Balasuriya 54 53/7, Ward Place, Colombo 7.
Dr. (Mrs.) G. M. Mohan 51 43, Ward Place, Colombo 7.
Dr. M. Balasuriya 53 81, Kynsey Road, Colombo 7.
Mr. W.A.T. Fernando 46 24A, Iceland Residencies, Galle Road, Colombo 3.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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5.1 DIRECTORS’ PROFILES
MR. SARATH KUSUM WICKREMESINGHE - CHAIRMAN
B.Sc. (Cey.)
Mr. Wickremesinghe is a well-known business leader, who has in the past chaired the Boards
of several blue-chip companies including National Development Bank PLC, Commercial
Bank of Ceylon PLC, Ceylon Tobacco Company PLC, Chemical Industries (Colombo) PLC,
and Sri Lankan Airlines. He was also Sri Lanka’s High Commissioner to the UK from 1995
to 1999.
MR. LAKSHMAN BALASURIYA – MANAGING DIRECTOR/CEO
B.Sc. (Lond.), M.Sc. (Lancaster)
He is a director of Senkadagala Hotels Limited, E.W. Balasuriya & Co. (Pvt) Ltd. and
Thompsons Beach Hotels Ltd. He has over 27 years of experience in Finance, Hotels and
other commercial fields.
DR. ASOKA BALASURIYA - DIRECTOR
B.Sc. (Lond.), Ph.D. (Lond.)
Dr. Balasuriya has over 30 years’ experience in the field of gems and jewellery. He is also a
director of Senkadagala Hotels Limited, Thompsons Beach Hotels Ltd and is Chairman of
E.W. Balasuriya & Co. (Pvt) Ltd.
MRS. LAKSHMI FERNANDO - DIRECTOR
B.Sc. (Hons.)
Mrs. Fernando has many years’ experience in the field of finance as well as in hotel
management. She is a director of Thompsons Beach Hotels Limited, Senkadagala Hotels
Limited and E.W. Balasuriya & Co. (Pvt) Ltd.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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DR. MAHENDRA BALASURIYA - DIRECTOR
B.V.Sc.
Dr. Balasuriya is a director of Senkadagala Hotels Limited, E.W. Balasuriya & Co. (Pvt) Ltd.
and Thompsons Beach Hotels Ltd. He has over 27 years of experience in hotels and other
related fields.
MR. WIDANALAGE AJITH TERENCE FERNANDO – DIRECTOR
FCMA (UK), MA (Colombo)
Mr. Fernando is a Fellow of the Chartered Institute of Management Accountants of the
United Kingdom and has a MA in Financial Economics from the University of Colombo. He
counts over 20 years’ experience in capital markets of Sri Lanka. In 2000, he founded Capital
Alliance in partnership with Asia Capital Ltd. Currently he is the group CEO of the Capital
Alliance group which includes Capital Alliance Holdings Ltd, Capital Alliance Ltd., a
primary dealer for Government securities, appointed by the Central Bank of Sri Lanka and
Capital Alliance Securities (Pvt) Ltd, a trading member of the Colombo Stock Exchange. In
addition, he serves on the boards of many private companies including ADZ Insurance
Brokers (Pvt) Ltd, Ashthi Holdings (Pvt) Ltd, Ceylon Tea Brokers PLC, First Alliance
Money Brokers (Pvt) Ltd and Shift Solutions (Pvt) Ltd. He is Deputy Chairman of the
Financial Ombudsman’s office and a director of the Lanka Financial Services Bureau.
MR. CYRIL LIONEL SRIMANNE HERATH - DIRECTOR
B.A. (Cey.)
Mr. Herath is a distinguished public servant having served for many years as the Inspector
General of Police of Sri Lanka. He was later appointed the Secretary of Defense. From 1994
to 2004, Mr. Herath served as Chairman of the National Savings Bank of Sri Lanka.
MR. ROHAN BALASURIYA - DIRECTOR
B.Sc. (E. Ang.), M.Sc. (E. Ang.)
Mr. Balasuriya is a director of Senkadagala Hotels Limited, E.W. Balasuriya & Co. (Pvt)
Limited and Thompsons Beach Hotels Ltd. He has over 25 years of experience in finance and
other related fields.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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DR. (MRS.) GAYATHRI MADAN MOHAN - DIRECTOR
M.B.B.S.
Dr. Madan Mohan is an experienced medical consultant working in the USA. She is also a
director of Senkadagala Hotels Limited, E.W. Balasuriya & Co. (Pvt) Ltd. and Thompsons
Beach Hotels Ltd.
5.2 DIRECTORS’ INTEREST IN ASSETS
The directors of SFCL hold no interest in any assets acquired, disposed or leased by the
Company during the past two years preceding the date of this Introductory Document.
Furthermore, it is not proposed that the directors will hold any interest in assets to be
acquired, disposed or leased by the Company in the two years subsequent to the Issue.
5.3 FOUNDER/ MANAGEMENT/ DEFERRED SHARES OF THE COMPANY
There are no founder or management or deferred shares of Senkadagala Finance Company
Limited.
5.4 ARTICLES PERTAINING TO THE DIRECTORS
As per the Articles of Association of Senkadagala Finance Company Limited, the share
qualification of directors may be fixed by the Company at a general meeting, and unless and
until so fixed no share qualification shall be required.
Further, the Board shall determine the payment of remuneration and other benefits by the
Company to a director for services as a director or in any other capacity (outside the scope of
the ordinary duties of a director) in the manner as set out in Section 216 of the Act, if the
Board is satisfied that to do is fair to the Company.
5.5 STATEMENT – BOARD OF DIRECTORS
The Chairman nor any director of the Company has been or is involved in any of the
following events:
� a petition under any bankruptcy laws filed against such person or any partnership in
which he was a partner or any corporation of which he was an executive officer;
� conviction for fraud, misappropriation or breach of trust or any other similar offence
which the CSE considers a disqualification.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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6
SENIOR MANAGEMENT TEAM
Lakshman Balasuriya – Managing Director/Chief Executive Officer
B.Sc. (Lond.), M.Sc. (Lancaster)
14, Claessen Place, Colombo 05.
Mr. Balasuriya is a director of Senkadagala Hotels Limited, E.W. Balasuriya & Co. (Pvt) Ltd.
and Thompsons Beach Hotels Ltd. He has over 27 years of experience in finance, hotels and
other commercial fields.
The Chief Executive Officer nor any person nominated to become the Chief Executive
Officer is or was involved in the following events:
� petition under bankruptcy laws filed against such person or any partnership in which
he was a partner or any corporation of which he was an executive officer.
� convicted for fraud, misappropriation or breach of trust or any other similar offence
which the CSE considers a disqualification.
Lalith J de Alwis – Deputy Chief Executive Officer
ACA, FCMA (UK)
Lalith de Alwis is Deputy Chief Executive Officer of the company reporting to the Managing
Director/Chief Executive Officer, Mr. Lakshman Balasuriya. He has responsibility for the
entire organization and the General Manager reports directly to him.
He has many years’ experience in the field of financial services, having been Managing
Director of Lanka ORIX Leasing Co. Ltd. (LOLC), the pioneer leasing company in Sri Lanka
which he joined in its initial stage and subsequently set up the Bank of Ceylon subsidiary,
Ceylease Financial Services Ltd., in collaboration with the Bank of Ceylon. While at LOLC,
Mr. de Alwis initiated the commencement of the first factoring company in Sri Lanka,
LOFAC. In the UK, Mr. de Alwis worked for the Local Investment Fund, a fund set up by a
number of British banks in collaboration with the UK government to promote investment in
SMEs.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Pradeep Ikiriwatte – General Manager
Over 25 years of experience in the leasing and operational activities of SFCL and four years’
audit experience at KPMG Ford Rhodes and Thornton & Co., Chartered Accountants.
Jagath Jayatilake – Assistant General Manager – Operations
Over 25 years of experience in the leasing and operational activities of SFCL.
Keerthi Athurupana – Assistant General Manager – Accounts
Over 25 Years with SFCL. Five years’ audit experience at Ford Rhodes and Thornton & Co.,
Chartered Accountants.
Timothy de Silva – Assistant General Manager – Information Technology
A pioneer in the Sri Lankan software industry. Over 25 years’ experience in the IT field. Past
head of the Software department of Keells Business Systems Ltd. Member of a number of
professional computer bodies.
Kumudu Rajapakse – Chief Financial Officer
B. Sc. (Special) Hon, ACA, ACMA, MCPM
Associate member of the Institute of Chartered Accountants of Sri Lanka and a graduate from
the University of Sri Jayawardenepura. Over 8 years of financial experience at SFCL and
four years of audit experience at KPMG Ford Rhodes and Thornton & Co., Chartered
Accountants.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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7
CAPITAL STRUCTURE
7.1 STATED CAPITAL
Ordinary Shareholding Structure as at 28th January 2011
Level of Shareholding
No. of No. of % of Shareholders Shares Shareholding
1 - 1,000 1 4 0.00
1,001 - 5,000 2 9,600 0.02
5,001 - 10,000 1 6,100 0.01
10,001 - 50,000 2 64,060 0.12
50,001 - 100,000 0 - -
100,001 - 500,000 4 1,196,030 2.24
500,001 - 1,000,000 0 - -
Over 1,000,000 9 52,092,206 97.61
Total 19 �53,368,000 � 100.00
7.2 DETAILS OF THE TEN LARGEST ORDINARY SHAREHOLDERS AS AT 28TH JANUARY 2011
ORDINARY SHAREHOLDERS AS AT NUMBER OF SHARE28th January 2011 SHARES PERCENTAGE
E.W. Balasuriya & Co. (Pvt) Limited 30,088,050 56.38
Mr. L. Balasuriya 3,065,832 5.74
Dr. A. Balasuriya 3,065,832 5.74
Mr. R. Balasuriya 3,065,832 5.74
Mr. M. Balasuriya 3,065,832 5.74
Dr. (Mrs.) G. Madan Mohan 3,065,832 5.74
Mrs. L. Fernando 2,570,002 4.82
Mr. P.P.K. Ikiriwatte 2,052,502 3.85
Mr. J.K. Jayatileke 2,052,492 3.85
Mr. D.K.C.R. Fernando 495,830 0.93
Others 779,964 1.46
TOTAL 53,368,000� 100.00
The public holding percentage as at the date of the Introductory Document was 10.08%
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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7.3 CAPITALIZATION OF RESERVES
Senkadagala Finance Company Limited (hereinafter sometimes referred to as the
“Company”) issued ordinary voting shares by way of a capitalization of revenue reserves in
the proportion of three (3) new ordinary voting shares for every two (2) ordinary voting
shares held. The objective of the issue was to enhance the stated capital of the Company. The
shares were allotted to the existing shareholders of the Company as 0at 29th September 2010.
The total number of shares allotted were 32,020,800 for which a consideration of Rs.10.00
per share was capitalized.
The Company and the directors were of the opinion that the issue price of Rs. 10.00 per share
is fair and reasonable for the Company and to all the existing shareholders of the Company.
The shares will rank equal to the existing shares issued by the Company and will include full
voting rights and the right to participate in any dividend or distribution that may be declared
after the allotment of shares.
Prior to the issue of shares by way of the Capitalization of Reserves the Company had
21,347,200 ordinary voting shares.
There were no preliminary expenses incurred in the Capitalization of Reserves of the
Company.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Shareholdingprior to
Capitalization of Reserves
Entitlement of Shares 3:2
Shares Allotted
Shareholding after
Capitalization
% of Shares held subsequent
to the Issue
E.W. Balasuriya & Co. (Pvt) Limited 12,035,220 18,052,830.00 18,052,830 30,088,050 56.38%
Mr. L. Balasuriya 1,226,333 1,839,499.50 1,839,499 3,065,832 5.74%
Dr. A. Balasuriya 1,226,333 1,839,499.50 1,839,499 3,065,832 5.74%
Mr. R. Balasuriya 1,226,333 1,839,499.50 1,839,499 3,065,832 5.74%
Mr. M. Balasuriya 1,226,333 1,839,499.50 1,839,499 3,065,832 5.74%
Dr. (Mrs.) G. Madan Mohan 1,226,333 1,839,499.50 1,839,499 3,065,832 5.74%
Mrs. L. Fernando 1,028,001 1,542,001.50 1,542,001 2,570,002 4.82%
Mr. P.P.K. Ikiriwatte 821,001 1,231,501.50 1,231,501 2,052,502 3.85%
Mr. J.K. Jayatileke 820,997 1,231,495.50 1,231,495 2,052,492 3.85%
Mr. D.K.C.R. Fernando 198,332 297,498.00 297,498 495,830 0.93%
Mrs. S. Thaha 155,600 233,400.00 233,400 389,000 0.73%
Mr. D.G.K. Hewamallika (Deceased) 62,240 93,360.00 93,360 155,600 0.29%
Mrs. C. Fernando 62,240 93,360.00 93,360 155,600 0.29%
Mr. E.W. Balasuriya (Deceased) 16,664 24,996.00 24,996 41,660 0.08%
Mr. M.M. Ariyaratne 8,960 13,440.00 13,440 22,400 0.04%
Mrs. R. Dullewe 2,440 3,660.00 3,660 6,100 0.01%
Mrs. S.I. Ching 1,920 2,880.00 2,880 4,800 0.01%
Mr. C.Y. Ching 1,920 2,880.00 2,880 4,800 0.01%
Mr. L. Balasuriya - Trustee of the Bonus Issue 2010 - - 4 4 0.00%
TOTAL 21,347,200 32,020,800 32,020,800 53,368,000 100.00%
7.3.1 DETAILS OF THE SHARE ISSUE
The details of the share issue are as follows:
Further, it should be noted that apart from the Capitalization of Reserves, the Company has
not issued any classes of shares during the two years preceding the date of the Introductory
Document.
It should also be noted that 62,240 Ordinary Voting Shares belonging to the late Mr. D.G.
Suraweera was purchased by E.W.Balasuriya & Co. (Pvt) Limited for a consideration of Rs.
45/- per share, amounting to a total consideration of Rs.2,800,800.00 on 02nd June 2009.
There has not been a reduction in the stated capital of the Company, in the two years
preceding the date of this Introductory Document nor are there any statutory restrictions on
the free transferability of the Shares to be listed on the CSE. Further there are no restrictions
applicable to non-residents shareholders holding shares of the Company.
Further, the Company does not have any outstanding convertible debt securities, nor has
Securities of the same class or another class been subscribed or sold privately in conjunction
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
30
with the listing of Shares on the Colombo Stock Exchange, as at the date of this Introductory
Document.
It should also be noted that as at the date of this Introductory Document, SFCL has no
outstanding options to subscribe for the shares of the Company.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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8
STATUTORY AND OTHER GENERAL INFORMATION
8.1 LITIGATION, DISPUTES AND CONTINGENT LIABILITIES
The Company has not been involved, nor is it currently involved in any legal arbitration or
mediation proceedings in the recent past, which may have had a significant effect on the
Company's financial position and profitability.
There have been no penalties imposed by Regulatory or State Authorities on the Company.
The Company does not have any contingent liabilities that would affect its current and future
profits in any such proceedings.
8.2 MATERIAL CONTRACTS
The Company has not entered into any material contracts and does not intend to enter any
material contracts except for those contracts entered into as part of the ordinary course of
business, within the last two years preceding the date of this Introductory Document.
8.3 DETAILS OF COMMISSIONS PAID AND BENEFITS PAID TO PROMOTERS
The Company has not paid commission to anyone for subscribing or agreeing to subscribe, or
procuring or agreeing to procure subscriptions, for any shares of the Company, within the last
two years preceding the date of this Introductory Document.
Further, no benefit has been paid or given within the two years preceding the date of this
Introductory Document and there are no benefits intended to be paid or given to any
promoter.
8.4 MANAGEMENT AGREEMENTS
There are no management agreements presently in force as at the date of this Introductory
Document and at present no such agreements are under consideration.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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8.5 INSPECTION OF DOCUMENTS
The Introductory Document and Articles of Association of Senkadagala Finance Company
Limited will be hosted on the Company’s website at www.senfin.com and on the CSE
website at www.cse.lk for a period of not less than fourteen (14) days.
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9 FINANCIAL INFORMATION
9.1 AUDITOR REPORT ON THE FIVE YEAR FINANCIAL PERFORMANCE OF SENKADAGALA
FINANCE COMPANY LIMITED FROM 2006 TO 2010
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9.2 RATIOS AND SHARE INFORMATION
*All the provisions have been considered except provision for Income Tax.
Source: SFCL
Year Ended Latest
Interim
31.12.2010
Comparative
Interim
31.12.2009
31.03.2010 31.03.2009
Net Interest Income / Total Average Assets (%) 10.40 10.79 13.12 9.98
Non-Interest Income / Total Average Assets (%) 1.63 1.47 2.62 1.45
Personnel & Other Non-Interest Expenses / Net
Interest Income & Non-Interest Income (%)*
81.08 84.35 63.65 77.95
Gross NPL Ratio (%) 4.31 3.53 3.35 7.29
General & Specific Loan Loss Revenues (B/S) /
(Total Non-Performing Loans – Interest-In-
Suspense) (%)
79.54 51.61 89.64 95.56
Liquid Assets / Customer Deposits & Short –
Term Funds
0.32:1 0.27:1 0.25:1 0.26:1
Capital Adequacy Ratio (%) 17.36 16.55 18.22 17.22
Debt/Equity Ratio 2.81:1 3.67:1 2.33:1 3.11:1
Book Value per Share (Rs.) 42.02 41.43 19.28 42.44
Earnings per Share (Rs.) 2.29 2.79 6.47 2.71
Profit after Tax / Average Equity (%) 5.50 6.65 22.30 8.62
Return on Average Assets (%) 2.27 1.92 5.72 2.52
Effective Tax Rate (%) 59.00 23.00 39.21 39.34
Dividends / Profit after Tax (%) 74.09 53.86 15.24 62.74
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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9.3 RECEIVABLES
9.3.1 POLICY FOR CLASSIFICATION OF NON-PERFORMING RECEIVABLES
Provision for possible loan losses are made on the basis of a continuous review of all advances to
customers in accordance with the Finance Company Direction No.3 of 2006 (Provision for bad and
doubtful debt) issued by the Central Bank of Sri Lanka and in accordance with Sri Lanka Accounting
Standard No. 33, Revenue Recognition and Disclosure in the Financial Statements of Finance
Companies. Accordingly, specific provisions have been made as follows:
All advances in arrears for a period of 6-12 months 50%
All advances in arrears for over 12 months 100%
In addition, wherever it is considered prudent, further provisions are made for specifically identified
loans and advances.
9.3.2 COMPOSITION OF RECEIVABLES:
YE
31.03.2010
(%)
YE
31.03.2009
(%)
Latest
Interims
31.12.2010
(%)
Comparative
Interims
31.12.2009
(%)
Performing Loans & Advances
Less than 3 months 92.25 90.83 94.89 89.93
3-6 months 7.75 9.17 5.11 10.07
7-12 months - - - -
13-18 months - - - -
More than 18 months - - - -
Total (%) 100.00 100.00 100.00 100.00Total Performing Loans (Rs.) 4,460,445,720 4,567,517,176 4,946,651,868 4,316,854,630
Non Performing Loans & Advances
1-2 months - - - -
3-6 months - - - -
6-7 moths 13.74 9.15 3.79 1.34
7-12 months 34.58 38.18 22.17 21.33
13-18 months 51.69 52.66 74.04 77.33
Total (%) 100.00 100.00 100.00 100.00
Total Non-Performing Loans (Rs.) 39,113,734 96,441,531 56,363,716 124,234,949
Total (Rs.) 4,499,559,454 4,663,958,707 5,003,015,585 4,441,089,580
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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9.4 MATURITY ANALYSIS OF DEPOSITS & BORROWINGS
YE
31.03.2010
(%)
YE
31.03.2009
(%)
Latest
Interims
31.12.2010
(%)
Comparative
Interims
31.12.2009
(%)
Maturity Period
Less than or equal to 1 month 4.72 6.26 2.80 5.11
More than 1 month less than or equal to 3 months 10.09 12.92 7.83 10.58
More than 3 months less than or equal to 6 months 8.30 8.67 8.28 9.13
More than 6 months less than or equal to 1 year 38.26 23.71 39.94 34.05
More than 1 year less than or equal to 3 years 32.83 31.23 34.88 26.68
More than 3 years less than or equal to 5 years 5.80 17.21 6.26 14.45
Matured (waiting for customer instructions) - - - -
TOTAL 100.00 100.00 100.00 100.00
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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10
CORPORATE GOVERNANCE PRACTICES
The Company maintains high standards of Corporate Governance Practices and is committed
to ensure the prevalence of such practices. The Company’s policy of good governance
ensures that its affairs are conducted in an efficient and transparent manner and is
communicated throughout the organization.
The board of directors strives to ensure that the operations of the Company are carried out in
keeping with the highest ethical standards and in the best interest of all stakeholders.
The board of directors is responsible for directing the Company at a strategic level, assuring
long-term value creation. Each division of the Company is headed by a member of the
Corporate Management team. Targets are set for major profit and cost centres and are
reviewed at regular intervals, to identify and rectify any variances.
The board of directors comprises of nine (9) members, one (1) executive director and eight
(8) non-executive directors.
10.1 DIRECTORS
The independent, non-executive directors of Senkadagala Finance Company Limited
compromise of the following directors:
� Mr. Sarath Kusum Wickremesinghe – Independent & Non-Executive
� Mr. Cyril Lionel Srimanne Herath – Independent & Non-Executive
� Mr. Widanalage Ajith Terernce Fernando – Independent & Non-Executive
10.2 REMUNERATION COMMITTEE
The Remuneration Committee constitutes of the following directors and is headed by Mr.
S.K. Wickremesinghe
� Mr. Sarath Kusum Wickremesinghe – Independent Non-Executive Director
� Mr. Cyril Lionel Srimanne Herath – Independent Non-Executive Director
� Dr. Mahendra Balasuriya – Non-Executive Director
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Statement of the Remuneration Policy
The Committee deliberates and determines the remuneration policy and the criteria relevant
to the emoluments of executive directors and non-executive directors, and the salaries and
perquisites of Corporate Management. The recommendations made by the Remuneration
committee will be reviewed and approved by the board of directors, if the directors are of the
view that the emoluments are fair and reasonable.
The aggregate of the remuneration paid to executive and non-executive directors amounts to
Rs. 317,500/- per month.
Further it should also be noted that the post employment benefits attributable to the key
management personnel amounts to is Rs. 5,080,642.00 as at 31st March 2010
10.3 AUDIT COMMITTEE
The Audit Committee constitutes of the following four (4) non-executive directors and is
headed by Mr. S.K. Wickremesinghe
� Mr. Sarath Kusum Wickremesinghe – Independent Non-Executive Director
� Mr. Cyril Lionel Srimanne Herath – Independent Non-Executive Director
� Mr. Widanalage Ajith Terernce Fernando – Independent Non-Executive Director
� Ms. Lakshmi Fernando – Non-Executive Director
The Audit Committee plays a key role in reviewing the internal control system that will
guarantee the prevalence of effective internal controls. The Committee constantly reviews the
system and controls and makes recommendations for improvements where necessary.
The Committee has reviewed all audited financial statements which include quarterly interim
statements in order to ensure that they comply with all statutory provisions, Sri Lanka
Accounting Standards and Central Bank mandated directives. In addition, the Audit Plan and
the Management Letter submitted by the External Auditors have been reviewed by the Audit
Committee.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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11
DECLARATION BY THE DIRECTORS
We, the undersigned, who are named in the Introductory Document as directors of
Senkadagala Finance Company Limited, hereby declare and confirm that we have read the
provisions of the Companies Act No. 07 of 2007 and the Colombo Stock Exchange Listing
Rules and any amendments to it relating to the issue of this Introductory Document and that
those provisions have been complied with.
This Introductory Document has been seen and approved by us and we collectively and
individually accept full responsibility for the accuracy of the information given and confirm
that provisions of the CSE Listing Rules and of the Companies Act No. 7 of 2007 and any
amendments to it from time to time have been complied with after making all reasonable
enquiries and to the best of our knowledge and belief, there are no other facts, the omission of
which would make any statement herein misleading or inaccurate.
Mr. Sarath Kusum Wickremesinghe (Sgd.)
Mr. Lakshman Balasuriya (Sgd.)
Mr. Cyril Lionel Sirimanne Herath (Sgd.)
Dr. Asoka Balasuriya (Sgd.)
Mrs. Lakshmi Fernando (Sgd.)
Mr. Rohan Balasuriya (Sgd.)
Dr. (Mrs.) Gayathri Madan Mohan (Sgd.)
Dr. Mahendra Balasuriya (Sgd.)
Mr. Widanalage Ajith Terence Fernando (Sgd.)
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2008
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
44
Income statement
For the year ended 31st March 2008 2007Note Rs Rs
924,661,651,1140,203,293,11emocnI
Interest income 2 1,259,892,987 1,058,869,613
Interest expenses 3 (668,736,623) (499,470,631)
289,893,955463,651,195emocni tseretni teN
Other operating income 4 126,692,550 100,999,039
Other operating expenses 5 (23,673,563) (25,555,571)
054,248,436153,571,496snoitarepo morf emocni teN
)153,969,47()825,530,69(tsoc lennosreP
)393,575,05()323,438,55(tnempiuqe dna tnalp ,ytreporp fo noitaicerpeD
)898,621,6()178,761,4(ytiutarg gniriter rof noisivorP
)548,641,771()545,855,451(sesnepxe rehtO
6 (310,596,267) (308,818,487)
369,320,623480,975,383emocni rehto erofeb tiforP
Other income 7 11,642,140 3,488,177
041,215,923422,122,593snoisivorp erofeb tiforP
)800,148,86()856,143,19(snoisivorp dna sessol naoL
303,879,566 260,671,132
)064,129,2()502,826,1(secivres laicnanif no xaT deddA eulaV
276,947,752163,152,203noitaxat erofeb tiforPTaxation 8 (16,497,436) 31,115,985
756,568,882529,357,582raey eht rof tiforp teN
Earnings per share 9 13.39 13.53
Dividend per share 10 3.27 3.86
Figures in brackets indicates deductions.
The accounting policies from page 49 to 56 and the notes from page 57 to 70 form an integral part of thesefinancial statements.
Senkadagala Finance Company Limited
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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For the year ended 31st March 2008 2007Rs Rs
Cash flow from operating activitiesInterest and commission receipts 1,122,596,837 934,853,165
Interest payments (668,736,623) (499,470,631)
Recoveries of bad debts 20,573,509 12,468,458
Other income 200,420,539 172,139,448
Operating expenditure (23,673,563) (25,555,571)
Cash payments to employees and suppliers (238,214,600) (246,035,351)
Operating profit before changes in operating assets 412,966,099 348,399,518
(Increase) / Decrease in operating assetsIncrease in Short term funds (13,919,221) (8,244,152)
Increase in Funds advanced to customers (730,681,869) (554,844,851)
Decrease in Amounts Due from Related Party - 14,938,131
Increase in Other receivables (15,110,170) (4,703,398)
Increase in Deferred expenses (10,812,847) (4,111,296)
Increase in Trade debtors (100,060,047) (280,310)
Increase in Other assets (37,968,311) (109,126,337)
(908,552,465) (666,372,213)
Increase / (Decrease) in operating liabilitiesIncrease in Deposits from customers 172,965,546 77,608,541
Gratuity Paid (1,822,500) (500,000)
Increase / (Decrease) in Advances received (12,981,687) (7,404,575)
Increase in Other liabilities 90,453,433 22,665,182
248,614,792 92,369,148
Net cash from operating activities (246,971,574) (225,603,547) Taxes paid (Value added tax & SRL) (1,648,573) (2,921,460)
WHT Paid (15,247,705) (2,615,032)
Net Cash Outflow from operating activities (263,867,852) (231,140,039)
Cash flow from investing activitiesDividends received 270,207 73,374
Interest received from Treasury Activities 44,644,445 42,254,207
Investment securities acquired during the year (3,939,625) (10,140,000)
Purchase of property, plant and equipment (216,888,281) (122,612,212)
Proceeds from sale of property, plant and equipment 18,001,999 6,515,000
Net Cash Outflow from investing activities (157,911,255) (83,909,631)
Cash flow from financing activitiesSecuritization loans obtained 1,830,200,717 1,351,714,700
Debentures 241,000,000 259,000,000
Repayment of securitization loans (1,476,851,908) (1,295,961,509)
Dividends paid (62,355,968) (73,747,055)
Net cash flow from financing activities 531,992,841 241,006,136
Senkadagala Finance Company LimitedStatement of Cash flow
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedStatement of Cash flow Continued
For the year ended 31st March 2008 2007Rs Rs
337,312,011stnelaviuqe hsac dna hsac ni )esaerceD( /esaercnI teN (74,043,534)
Cash and cash equivalents at the beginning of the period (Note 11) 307,212,787 381,256,321
Cash and cash equivalents at the end of the period (Note 11) 417,426,520 307,212,787
Reconciliation of cash and cash equivalents025,624,714sdnuf mret trohs dna hsaC 307,212,787
417,426,520 307,212,787
Reconciliation of operating profit163,152,203noitaxat erofeb tiforP 257,749,672
Dividends (270,207) (73,374)
018,018,97noisivorp stbed daB 68,841,008
848,035,11tnemriapmi rof noisivorP -
502,826,1tiforp no xaT deddA eulaV 2,921,460
323,438,55noitaicerpeD 50,575,393
178,761,4ytiutarg rof noisivorP 6,126,898
)544,446,44(emocni tnemtsevnI (42,254,207)
)041,227,9(selcihev rotom fo lasopsid no tiforP (1,568,177)
374,973,21seef larutcurts fo noitazitromA 6,080,845
Cash flows from operating activities before changes in operating assets 412,966,099 348,399,518
Figures in brackets indicates deductions.
The accounting policies from page 49 to 56 and the notes from page 57 to 70 form an integral part of these financialstatements.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Stated Statutory General Retained Totalcapital reserve reserve profit
Rs Rs Rs Rs Rs
Balance as at 1st April 2006 213,472,000 43,593,997 275,696,300 (54,727,394) 478,034,903
Profit after tax for the year - - - 288,865,657 288,865,657
Transfer to reserve - 17,431,578 130,000,000 (147,431,578) -
Interim dividend paid - - - (82,400,192) (82,400,192)
Balance as at 31st March 2007 213,472,000 61,025,575 405,696,300 4,306,493 684,500,368
Balance as at 1st April 2007 213,472,000 61,025,575 405,696,300 4,306,493 684,500,368
Profit after tax for the year - - - 285,753,925 285,753,925
Transfer to reserve - 18,510,458 197,322,092 (215,832,550) -
Interim dividend paid - - - (69,698,608) (69,698,608)
Balance as at 31st March 2008 213,472,000 79,536,033 603,018,392 4,529,260 900,555,685
Note
Figures in brackets indicates deductions.
Sri Lanka Accounting Standard No. 14 (Revised - 2005) Income Taxes - effective from 1st January 2006 requires to
recognize deferred tax for assets leased out by the Company under Finance Lease Agreements. The same adjustment
created a negative value in opening retained profit 2006/2007 that was brought forward from restated value 2005/2006.
Senkadagala Finance Company Limited
For the year ended 31 st March 2008Statement of changes in Equity
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1.0 Corporate Information
1.1 General Information
Senkadagala Finance Company Limited was incorporated on December 29, 1968 and
domiciled in Sri Lanka. Its registered office is situated at No. 12, Kotugodella
Veediya, Kandy.
1.2 Principal Activities and Nature of Operations
The principal lines of business of the company include providing of financial
accommodations in the form of lease finance, hire purchase, trade loans and pledge
loans.
1.3 Number of Employees
The number of employees of the Company at the end of the year was 148 (2007 –
105).
2.0 Summary of Significant Accounting Policies
2.1 General Policies
2.1.1 Basis of Preparation
The financial statements of the Company are prepared under the historical cost
convention in conformity with Sri Lanka Accounting Standards adopted by The
Institute of Chartered Accountants of Sri Lanka.
No adjustments have been made for inflationary factors affecting the financial
statements.
The accounting principles are applied consistently with due regard to prudence,
materiality and substance over form criteria as explained in Sri Lanka Accounting
Standard No.3 (revised 2005), on Presentation of Financial Statements.
These financial statements are prepared and presented in Sri Lanka Rupees unless
otherwise stated.
Senkadagala Finance Company LimitedSignificant Accounting Polices
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Where appropriate the accounting policies are disclosed in the succeeding notes and
have been consistently applied by the Company, except for the changes in accounting
policies discussed under 2.1.4 below.
These Financial Statements of Senkadagala Finance Company Ltd for the year ended
31st March 2008 where authorized for issue in accordance with resolution of the
Board of Directors on 6th June, 2008.
2.1.2 Going Concern
The Directors have made an assessment of the Company’s ability to continue as a
going concern and they do not intend either to liquidate or to cease operations.
2.1.3 Comparative Figures
Where necessary amounts shown in the previous year have been reclassified to
facilitate comparison.
2.1.4 Changes in Accounting Policies The Company has adopted the following Sri Lanka Accounting Standards (SLAS’s)
in presenting these financial statements for fair presentations.
� SLAS No. 14 (Revised - 2005) - Income Taxes
� SLAS No. 33 - Revenue Recognition and Disclosures in the Financial Statements of Finance Companies.
The effects in adopting the above two Sri Lanka Accounting Standards have been
accounted in accordance with SLAS No. 10 (Revised - 2005) Accounting Policies,
Changes in Accounting Estimates and errors as discussed in the notes 2.1.6 Deferred
Taxation and 2.5.3 Provision for Bad and Doubtful Debts.
(a) SLAS 14 (Revised - 2005) – Income Taxes
The Company adopted the amendments to Sri Lanka Accounting Standard No. 14 on
Income Taxes under which deferred tax is calculated on all temporary differences.
Thus, deferred tax on assets leased to customers was provided. The effect of this
change as at March 31, 2007 and March 31, 2006 has been incorporated in the
Financial Statements.
2.1 General Accounting Policies (Continued)
2.1.1 Basis of Preparation (Continued)
Senkadagala Finance Company LimitedSignificant Accounting Polices
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(b) SLAS 33 – Revenue Recognition and Disclosures in the Financial Statements
of Finance Companies.
The Company has provided full specific provision for capital outstanding which are
more than six months, in accordance with Sri Lanka Accounting Standard No 33,
Revenue Recognition and Disclosures in the financial statements of Finance
Companies (SLAS 33) and they were treated as written offs for accounting purposes.
During the year, the Company has adopted SLAS 33 for bad debts provision on
percentage bases as described in 2.3.3.
The effects of the changes in Accounting Policies have been accounted in accordance
with SLAS 10 (Revised - 2005) – Accounting Policies, Changes in Accounting
Estimates and errors.
2.1.5 Post-Balance Sheet Events
All the material post Balance Sheets events have been considered and appropriate
adjustments/ disclosures have been made in the Accounts, wherever necessary.
2.1.6 Taxation
(a) Current Taxes
Provision for taxation is based on the elements of income and expenditure as reported
in the financial statements and computed in terms of the provisions of the Inland
Revenue Act No, 10 of 2006 and amendments thereto, at the rate of 35% (2007 –
35%).
(b) Deferred Taxation
Sri Lanka Accounting Standard No. 14 (Revised - 2005) Income Taxes – effective
from 1st January 2006 requires to recognize Deferred Tax for all temporary
differences arises between tax bases of Assets and Liabilities and their carrying value
for financial reporting purpose.
Accordingly deferred tax arising from assets leased out by the Company under
finance lease agreements has been recognized in these financial statements and effect
has been accounted in accordance with Sri Lanka Accounting Standard No. 10
(Revised 2005) Accounting Policies, Changes in Accounting Estimates and errors.
2.1 General Accounting Policies (Continued)
2.1.4 Changes in Accounting Policies (Continued)
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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Deferred Tax is provided on temporary differences as at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized on all temporary differences.
Deferred tax assets are recognized for all deductible differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilized.
Deferred Tax assets and liabilities are measured at the tax rate that are expected to apply in the year when the assets are recognized, or the liabilities are settled, based on tax rate and tax laws that have been enacted or substantially enacted at the balance sheet date.
Current Tax and deferred tax relating to items recognized directly in equity are also recognized in equity and not in the income statement.
Deferred Tax assets and liabilities are set off if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
2.2 Assets and Bases of their Valuation
2.2.1 Leases
Assets leased to the customers under agreements that transfer substantially all the
risks and rewards associated with ownership other than legal title, are classified as
finance leases.
Lease rentals receivable under finance leases net of unearned lease interest income i.e.
not accrued to revenue, (interest in suspense), provisions for doubtful recovery of
rentals and initial rentals received are classified as stock out on hire in the Balance
Sheet.
2.1 General Accounting Policies (Continued)
2.1.6 Taxation (Continued)
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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Provision for bad and doubtful recoveries is made as described under 2.3.3
2.2.2 Investments
(a) Dealing Securities
These are marketable securities acquired and held with the intention of resale over a short period of time. Such securities are recorded at the lower of cost and market value on an aggregate portfolio basis.
(b) Fall in value of Investments
Unrealized losses on revaluation of dealing securities at the lower of cost and market value are taken to the Income Statement as per the provision of Sri Lanka accounting Standard No. 22 on Accounting for Investments. (c) Investments in Associates
Investments in associates are stated at cost in the company’s financial statement in accordance with the Allowed Alternative Treatment as prescribed by Sri Lanka accounting Standard No.27, Accounting for Investments in Associates.
(d) Investment Securities
Investment securities are stated at cost in the Company’s financial statements in accordance with Sri Lanka Accounting Standard No. 22, Accounting for Investments.
2.2.3 Property, Plant and Equipment
Property, Plant and Equipment are recorded at cost of purchase or construction or valuation together with any incidental expenses thereon. These assets are stated at cost less accumulated depreciation, which is provided for on the basis specified below.
Depreciation is provided at the following rates on straight line basis over the periods appropriate to the estimated useful lives of the different types of assets:
Free hold land is not depreciated.
Buildings 5% per annum Office Equipments 10% per annum Computers and Other equipments 25% per annum Furniture and Fittings 10% per annum Software Program 12% per annum Motor Vehicles 16.67%per annum Generators 12.5% per annum
Interior Construction 20% per annum
Full year depreciation is provided in the year of purchase and no depreciation is provided in the year of disposal.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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2.2.4 Debtors
Debtors are stated at their estimated realizable amounts. Provision has been made in
the accounts for bad and doubtful debts.
2.2.5 Cash and Cash Equivalents
Cash and cash equivalent comprise of cash balances, short-term funds, balances with
Central Bank of Sri Lanka and Government of Sri Lanka Treasury Bills readily
convertible to known amounts of cash and subject to insignificant risk of changes in
value.
2.3 Liabilities and provisions
2.3.1 Commitments and contingencies
All discernible risks are accounted for in determining the amount of other liabilities.
2.3.2 Retirement benefits obligations
Provision for retirement gratuity has been calculated at half month’s salary of the last
month of the financial year of all categories for each completed years of service is
made in the Accounts in accordance with the SLAS No. 16 – Retirement Benefit Cost.
However, in accordance with the payment of Gratuity Act No. 12 of 1983, this
liability only arises upon completion of five (5) years of continued service.
The provision is not externally funded.
2.3.3 Provision for Bad and Doubtful Debts
In the previous years, for the purpose of Accounting, the Company had written off all
outstanding on contracts of which rentals (either capital or interest or both capital and
interest) were in arrears for more than six months in preparing financial statements.
Commencing from this year provision for bad and doubtful debts is made in
accordance with Direction issued by the Central Bank of Sri Lanka to Finance
Companies and Sri Lanka Accounting Standard No. 33 Revenue Recognition and
Disclosure in the Financial Statements of Finance Companies.
In addition, wherever it is considered prudent, provisions are made on specifically
identified loans and advances.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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2.4 Income statement
2.4.1 Revenue Recognition
(a) Income from Lease and Hire Purchase Agreements
The interest components of the lease/ hire purchases rental receivable during the year on assets leased and on hire purchases advance to customers are recognized as Income for the year.
The unearned lease/ hire purchases income included in the lease/ hire purchases rentals receivable is taken into revenue over the term of the lease/ hire purchases commencing from the month in which the lease/ hire purchases is executed in proportion to the capital outstanding, so as to provide a constant periodic return on the net investment outstanding at the end of each period.
(b) Basis of Recognizing Interest Income
Interest is recognized on accrual basis and ceases to be taken into revenue for all types of advances when such contracts are classified as non-performing (where the recovery of interest or principle is in arrears for over six months). Thereafter interest on advances is accounted for on a cash basis.
(c) Dividend Income
Dividend income from share trading is recognized in the period in which they are declared.
(d) Rent Income
Rent income is recognized on an accrual basis.
(e) Commission income
Commission income is recognized on a cash basis.
(f) Recovery of Bad Debts written off
Recovery of Bad Debts written off is recognized on a cash basis.
(g) Profit on sales of Investments and Vehicles Stocks
Profit earned on the sales of investments is accounted in the income Statement based on net realizable value.
(h) Interest Income from money market investments
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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Interest Income from Money Market investments is recognized on a cash basis
2.5 Expenditure Recognition
2.5.1 Interest and Other Expenses
In terms of the Sri Lanka Accounting Standard 33 – Revenue Recognition and
Disclosure in the Financial Statements of Finance Companies, interest and other
expenses payable are recognized on an accrual basis.
2.6 Cash Flow Statement
The cash flow statement has been prepared by using the “Direct Method” in
compliance with SLAS-9, Cash Flow Statement. Cash and Cash Equivalents comprise
mainly of cash balance and call deposits. Cash and cash equivalents are presented net
of bank overdrafts for the purpose of the cash flow statement.
2.7 Segment Reporting
A segment is a distinguishable component of the Company that is engaged in
providing services (Business Segment).
In accordance with the Sri Lanka Accounting No. 28 on Segment Reporting,
Segmental information is presented in respect of the Company. The segment comprise
of financing and investing.
Inter segment transactions are based on fair market prices.
Segment results, assets and liabilities include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly of Had Office expenses.
Segment capital expenditure is the total cost incurred during the period to acquire
segment assets that are expected to be used for more than one accounting period.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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Senkadagala Finance Company LimitedNotes to the financial statements
For the year ended 31st March 2008 2007Note Rs Rs
1 IncomeGross income 1.1 1,398,227,677 1,163,356,829
Value Added Tax (5,925,636) (7,190,400)
1,392,302,041 1,156,166,429
1.1 Gross incomeInterest income 2 1,259,892,987 1,058,869,613
Other operating income 4 126,692,550 100,999,039
Other income 7 11,642,140 3,488,177
1,398,227,677 1,163,356,829
2 Interest income Lease 371,208,567 407,836,248
Hire purchase 652,706,515 464,857,137
Loans 12,398,556 12,012,283
Non - Hire purchase 47,367,531 28,659,032
Fixed deposit loans 1,589,451 1,039,299
Money market investments 29,178,645 33,094,037
Treasury bills 15,465,800 9,160,170
Default charges 129,969,922 102,170,449
Discounting cheques 8,000 40,958
1,259,892,987 1,058,869,613
Notional tax credit for withholding tax on government securities on secondary market transactions.
2008 2007Rs Rs
The resulting Notional tax credit amounts to 1,546,580 916,017
Net interest income amounts to 13,919,220 8,244,153
Gross interest 15,465,800 9,160,170
3 Interest expensesFixed deposits 99,790,998 82,366,229
Certificate of deposits 849,588 2,597,127
Savings accounts 439,704 -
Securitization loans 443,273,581 329,179,632
Debentures 91,068,677 55,992,613
Corporate loan 33,314,075 29,335,030
668,736,623 499,470,631
The Inland Revenue (Amendment) Act. No. 10 of 2006 provides that a Company which derives interest income
from the secondary market transactions in Government securities would be entitled to a notional tax credit (being
one ninth of net interest income), provided such interest income forms part of the Statutory Income of the Company
for that year of assessment.
Accordingly, the net interest earned by the Company from the Secondary Market transactions in Government
securities (Treasury bills) for the year has been grossed up in the financial statements.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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For the year ended 31st March 2008 2007Note Rs Rs
4 Other operating incomeFinance charges 14,638,594 10,279,656
Commission income 37,318,217 20,408,208
Bad debts recoveries 20,573,509 12,468,458
Dividend income 270,207 73,374
Profit on sale of seized stocks 36,867,937 27,649,195
Sundry income 4,933,059 8,362,216
Legal fees 12,091,027 21,757,932
126,692,550 100,999,039
5 Other operating expensesCommission paid 15,077,232 14,651,925
Value Added Tax 5,925,636 7,190,400
Debenture issue arrangement fee - 133,316
C.R.I.B charges 2,670,695 3,579,930
23,673,563 25,555,571
6 Operating expensesOverhead expenses includes the followings :Directors' remuneration 69,000 69,000
Salaries and wages 69,716,094 53,436,412
Employers' contribution to Employees' Provident Fund 8,365,931 6,318,422
Employers' contribution to Employees' Trust Fund 2,091,483 1,579,606
Auditors' remuneration 275,000 250,000
Amortization of securitization loan structuring fee 12,379,473 6,080,845
7 Other incomeRent income 1,920,000 1,920,000
Profit on disposal of motor vehicles 9,722,140 1,568,177
11,642,140 3,488,177
8 TaxationTaxation based on profits for the year 8.1 8,744,644 1,576,004
Deferred tax charged / (reversed) 7,752,792 (32,691,989)
16,497,436 (31,115,985)
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
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Notes to the financial statements (Continued)
For the year ended 31st March 2008 2007Rs Rs
8 Taxation (Continued)
8.1 Reconciliation of effective tax rateNet profit before tax 302,251,361 257,749,672
Add - Disallowable expenses 348,091,557 459,918,788
Less - Allowable expenses (610,095,293) (708,816,186)
40,247,625 8,852,274
Add / (Less) - Adjustments (2,190,207) (1,993,374)
38,057,418 6,858,900
Income Tax at 35% 8,658,063 1,560,400
Social Responsibility Levy @ 1% of Income Tax 86,581 15,604
Income Tax on profit for the year 8,744,644 1,576,004
Effective tax rate 2.89% 0.61%
9 Earnings per share
Profit after taxation 285,753,925 288,865,657
Profit attributable to ordinary share holders 285,753,925 288,865,657
Number of ordinary shares as denominator 21,347,200 21,347,200
Earnings per ordinary share 13.39 13.53
10 Dividend per shareFinal dividend paid 2006/07 13,128,528 16,544,080
1st Interim dividend paid 18,145,120 16,117,136
2nd Interim dividend paid 20,279,840 14,089,152
3rd Interim dividend paid 18,145,120 35,649,824
69,698,608 82,400,192
Dividend per ordinary share 3.27 3.86
Senkadagala Finance Company Limited
Earnings per share have been calculated by dividing the net profit for the year attributable to the ordinary
shareholders by the weighted average number of ordinary shares outstanding during the year.
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As at 31st March 2008 2007Note Rs Rs
11 Cash and short term fundsCash and bank balances 11.1 136,840,878 113,043,252
Money at call and short notice 280,585,642 194,169,535
417,426,520 307,212,787
11.1 Cash and bank balancesCommercial Bank Savings 43,857 38,911
Commercial Bank Kandy # 1 (8,766,664) 1,118,538
Commercial Bank Kandy # 2 20,296,965 28,235,348
Commercial Bank Kandy # 3 3,993,792 5,487,656
Commercial Bank Kandy # 4 417,053 448,400
Commercial Bank Colombo # 5 665,940 22,280,271
Commercial Bank # 6 1,109,871 (3,921,896)
Commercial Bank corporate branch 976,674 982,924
Hong Kong and Shanghai Bank 19,815,825 1,149,771
Hatton National Bank Kandy 26,263,407 16,795,439
Hatton National Bank Colombo 2,539,087 121,311
Sampath Bank 6,364,014 (500)
Standard Chartered Bank 18,177 20,577
Nation Trust Bank 11,660 12,580
Bank of Ceylon 56,369 56,369
Bank of Ceylon 105,200 50,000
Pan Asia Bank 2,275,530 5,524,062
Union Bank 11,693,216 5,538,080
ICICI Bank 24,846,701 2,117,085
Cash value stamps 77,144 79,264
Encashment floats 1,260,996 929,755
Cash in hand 22,776,064 25,979,307
136,840,878 113,043,252
12 Advance and receivablesDeposits 1,042,284 1,042,284
Pre - paid rent 23,835,826 20,217,304
Advance company tax recoverable 6,125,619 6,125,619
Economic service charge 32,995,601 19,013,094
Cash cover on securitization loan 38,748,453 41,239,312
102,747,783 87,637,613
12.1
Notes to the financial statements (Continued)Senkadagala Finance Company Limited
ACT and ESC can be recovered only to the extent of the Company making taxable income in the future.
Advance company tax recoverable / Economic service charge (ACT / ESC)
12.1
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As at 31st MarchCost Market Cost Market
Value ValueRs Rs Rs Rs
13 Dealing securities quoted companies
Bank Finance InvestmentCentral Finance Co. Ltd. 243,207 866,600 243,207 533,000
(4,333 Ordinary Shares) ( @ Rs. 200) ( @ Rs. 123)
(4,333 Ordinary Shares as at March 31, 2007)
National Development Bank 500 63,456 500 -
(384 Ordinary Shares) ( @ Rs. 165.25) ( @ Rs. 199)
(384 Ordinary Shares as at March 31, 2007)
Commercial Bank of Ceylon PLC 72,450 29,120 - -
(208 Ordinary Shares) ( @ Rs. 140)
Debenture commercial bank 13.5% 5,000,000 5,000,000 5,000,000 5,000,000
(50,000 Debentures of Rs. 100/- each) ( @ Rs. 100) ( @ Rs. 100)
Beverage Food TobaccoCeylon Tobacco PLC 142,017 192,200 142,017 195,300
(3,100 Ordinary Shares) ( @ Rs. 62) ( @ Rs. 63)
(3,100 Ordinary Shares as at March 31, 2007)
Hotels TravelsAitken Spence PLC 3,355 14,025 3,355 12,540
(33 Ordinary Shares) ( @ Rs. 425 ) ( @ Rs. 380)
Investment TrustNational Equity Fund 600,925 600,925 600,925 600,925
(98,635 Ordinary Shares ) ( @ Rs. 6.09) ( @ Rs. 6.09)
(98,635 Ordinary Shares as at March 31, 2007)
ManufacturingRoyal Ceramics PLC 273 20,000 273 3,500
(100 Ordinary Shares) ( @ Rs. 200) ( @ Rs. 35)
(100 Ordinary Shares as at March 31, 2007)
Lanka Tiles Ltd. 7,175 12,250 140,000 196,000
(250 Ordinary Shares ) ( @ Rs. 49) ( @ Rs. 49)
(4,000 Ordinary Shares as at March 31, 2007)
DiversifiedJohn Keells Holdings PLC 13,800 241,536 13,800 312,635
(2,017 Ordinary Shares ) ( @ Rs. 119.75) ( @ Rs. 155)
(2,017 Ordinary Shares as at March 31, 2007)
Orient Fund (Portfolio Investments) 10,000,000 13,582,712 6,000,000 7,964,803
(1,000,000 Ordinary Shares ) ( @ Rs. 13.58) ( @ Rs. 13.27)
(600,000 Ordinary Shares as at March 31, 2007)
TradingLanka Indian Oil Corporation PLC 148,500 115,500 148,500 165,000
(5,500 Ordinary Shares) ( @ Rs. 21) ( @ Rs. 30)
(5,500 Ordinary Shares as at March 31, 2007)
16,232,202 20,738,324 12,292,577 14,983,703
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
2008 2007
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2008 2007Note Rs Rs
14 Loans & AdvancesNet investment in lease advancesLease rental receivable not less than one year from balance sheet date 889,616,606 829,804,267
Unearned income (204,462,121) (174,959,071)
685,154,485 654,845,196
Lease rental receivable later than one year from balance sheet date 1,474,607,409 1,327,783,662
Unearned income (485,972,428) (384,550,606)
988,634,981 943,233,056
Net investment in hire purchaseHire purchase rental receivable not less than one year from balance sheet date 1,392,602,862 1,009,920,023
Unearned income (381,189,094) (287,373,823)
1,011,413,768 722,546,200
Hire purchase rental receivable later than one year from balance sheet date 2,305,888,711 1,848,785,890
Unearned income (788,730,626) (624,172,070)
1,517,158,085 1,224,613,820
Net investment in non hire purchaseNon hire purchase rental receivable not less than one year from balance sheet date 92,454,153 68,329,009
Unearned income (16,850,873) (13,766,840)
75,603,280 54,562,169
Non hire purchase rental receivable later than one year from balance sheet date 85,728,169 72,962,511
Unearned income (30,540,163) (22,978,056)
55,188,006 49,984,455
Net investment in loans Loan rental receivable not less than one year from balance sheet date 26,748,843 25,091,107
Unearned income (7,607,811) (7,242,738)
19,141,032 17,848,369
Loan rental receivable later than one year from balance sheet date 46,629,760 49,827,221
Unearned income (17,796,669) (20,497,027)
28,833,091 29,330,194
Loans against fixed deposits 6,953,500 8,528,316
4,388,080,228 3,705,491,775
Provision for bad and doubtful debts on loans & advances 14.1.1 (82,821,800) (51,104,406)
Total loans & advances 4,305,258,428 3,654,387,369
14.1 Movement in provision for bad and doubtful debtsProvision as at 1st April 73,255,701 4,414,693
Provision for the year 79,810,810 68,841,008
Provision as at 31st March 153,066,511 73,255,701
Provision for bad and doubtful debts on loans & advances 14.1.1 82,821,800 51,104,406
Provision for bad and doubtful debts on arrears 14.1.2 26,943,272 22,151,295
Provision for loss on sale of repossessed vehicle 14.1.3 43,301,439 -
153,066,511 73,255,701
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
100% provision has been made for the loss recognised on sale of repossessed assets as per the requirement of Central Bank
Direction No. 3 of 2006 whereas in previous years it has been recognised as an expense.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2008 2007Note Rs Rs
15 Trade and other receivablesRentals in arrears 193,448,261 140,624,070
Provision for bad and doubtful debts on arrears 14.1.2 (26,943,272) (22,151,295)
166,504,989 118,472,775
Recoverable loss on sale of repossessed vehicle 43,301,439 -
Provision for loss on sale of repossessed vehicle 14.1.3 (43,301,439) -
- -
Sundry debtors 15.1 6,627,731 9,412,539
Discounting of cheques 490,000 500,000
Stamps fees receivable (73,986) (27,594)
Insurance 10,084,621 1,792,673
Other receivables 15.2 79,597,073 21,937,424
Advances allowed to car sales 21,857,388 25,193,153
Advance payments 21,938,987 29,685,786
307,026,803 206,966,756
15.1 Sundry debtorsStaff debtors 4,500,758 3,420,623
Sundry debtors 2,126,973 5,991,916
6,627,731 9,412,539
15.2 Other receivablesSearch fees and seizing charges receivables 1,767,624 1,130,730
Western union MMBL 238,873 -
Goods and Service Tax recoverable 11,020,826 11,020,826
Value Added Tax recoverable 66,569,750 9,785,868
79,597,073 21,937,424
16 Seized stockBalance as at 31 st March 244,152,852 206,184,541
Provision for impairment loss on seized stocks 16.1 (11,530,848) -
Balance as at 31 st March 232,622,004 206,184,541
16.1 Movement in provision for impairmentProvision as at 1st April - -
Provision made during the year 11,530,848 -
Provision as at 31st March 11,530,848 -
17 Investment securities (Unquoted)Senkadagala Hotels Limited 13,957,555 13,957,555
Credit Information Bureau 8,200 8,200
Consortium 200,000 200,000
14,165,755 14,165,755
18 Deferred expensesPre - paid loan arrangement fees 18,268,018 20,237,568
Paid during the year 10,812,848 4,111,295
Charged during the year (12,379,473) (6,080,845)
Balance at the end of the year 16,701,393 18,268,018
Loan structuring fee paid for arranging loans, has been treated as a deferred expense and has been charged to income
statement over the period of repayment of the loans and an amount of Rs.12,379,473 has been charged to the current
year's profit as amortization.
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Notes to the financial statements (Continued)
19 Property, plant and equipment
Cost As at Additions Disposals As at01.04.2007 31.03.2008
Rs Rs Rs Rs
Freehold assetsLand and buildings 30,113,702 72,714,144 - 102,827,846
Furniture and fittings 43,138,837 20,658,201 - 63,797,038
Office equipment 25,574,235 14,412,365 - 39,986,600
Air conditioner 10,716,379 2,090,152 - 12,806,531
Computer & accessories 61,545,798 9,759,570 - 71,305,368
Facsimile machine 642,383 59,700 - 702,083
Generator 14,321,098 8,214,500 - 22,535,598
Motor vehicles 69,539,138 56,365,867 (16,149,320) 109,755,685
Photostat machine 3,023,675 631,000 - 3,654,675
Software program 87,610,037 11,776,591 - 99,386,628
Fixtures and Fittings 35,081,696 16,856,041 - 51,937,737
Printers 9,364,740 3,350,150 - 12,714,890
390,671,718 216,888,281 (16,149,320) 591,410,679
Depreciation As at Charge for the Charge on As at01.04.2007 Period Disposals 31.03.2008
Rs Rs Rs Rs
Land and buildings 6,149,001 847,319 - 6,996,320
Furniture and fittings 13,624,738 5,214,330 - 18,839,068
Office equipment 6,878,120 3,157,009 - 10,035,129
Air conditioner 6,412,835 2,382,870 - 8,795,705
Computer & accessories 42,230,500 11,061,418 - 53,291,918
Facsimile machine 235,132 55,565 - 290,697
Generator 3,746,075 2,596,450 - 6,342,525
Motor vehicles 20,653,660 13,384,358 (7,869,461) 26,168,557
Photostat machine 1,589,650 660,858 - 2,250,508
Software program 65,431,913 5,507,464 - 70,939,377
Fixtures and Fittings 12,100,250 8,626,705 - 20,726,955
Printers 4,767,220 2,339,977 - 7,107,197
183,819,094 55,834,323 (7,869,461) 231,783,956
Written down value 206,852,624 359,626,723
Senkadagala Finance Company Limited
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2008 2007Rs Rs
20 Certificate of depositsCertificate of deposit control account 13,400,000 25,100,000
Interest in suspense (931,323) (412,848)
12,468,677 24,687,152
21 DepositsFixed deposits 864,903,614 699,648,495
Accrued interest thereon 40,624,587 40,013,492
905,528,201 739,661,987
22 Accrued expensesAudit fees 316,250 287,500
Staff bonus 13,249,950 13,423,400
Interest on debenture 47,009,231 31,058,494
Securitization loan repayment 41,985,171 13,129,619
Stamp duty & E.S.C payable 9,573,926 2,659,922
112,134,528 60,558,935
23 Accounts PayableDebit tax payable 36,350 800
Pay as you earn 201,271 (124,596)
Employees' provident fund 1,235,093 -
Employees' trust fund 185,264 -
Saving charges 13,060 -
Dividend payable 1,124,671 602,633
Registrar of motor vehicles charges 245,425 1,367,085
Refundable deposit 1,610,000 1,142,000
Search fee (58,984) 158,677
Mortgage (16,000) 670,451
Direct deposits 2,807,523 3,425,186
7,383,673 7,242,236
24 Trade payablesAmount payable to car sales 932,203 2,132,203
NHP - payable (27,469) -
XL - loan excess payment 33,227 7,531
Payable to suppliers 126,266,313 67,980,872
Sundry creditors (8,035,040) 6,312,090
Goods and Service Tax refund for buses 8,912 8,912
119,178,146 76,441,608
25 Commissioner General of Inland RevenueWithholding tax on treasury bills Interest and Commission (1,546,580) (2,845,523)
Income Taxes 8,744,644 1,576,004
Withholding tax on dividends (37,826) 8,240,019
W.H.T payable (3,851,812) 904,858
3,308,426 7,875,358
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
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Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
As at 31st March 2008 2007Rs Rs
26 Rentals received in advanceInitial payment of lease 21,032,485 28,582,373
Rental prepaid 34,655,791 40,087,590
55,688,276 68,669,963
27 Retirement benefit obligationBalance as at 1st April 13,780,292 8,153,394
Provision for the period 4,167,871 6,126,898
Paid during the period (1,822,500) (500,000)
Balance as at 31st March 16,125,663 13,780,292
28 DebenturesType Purpose of Interest 2008 2007 Interest Due/Settle
Debenture Rate Rs Rs Payable Dates
Listed Debentures To meet the working Note 28.1 250,000,000 250,000,000 Annually 4 years from the2005/2009 Capital requirement date of allotment
of the Company
Unsecured Redeemable To meet the working Note 28.2 259,000,000 259,000,000 Annually 5 years from the
Unlisted Debentures Capital requirement Note 28.2 241,000,000 - date of allotment
2006/2011 - of the Company
2007/2012
750,000,000 509,000,000
28.1 Unsecured Redeemable Listed Debentures
Payment Period Fixed Rate Floating Rate
Annually Type A 14% Type B 14.22%
28.2 Unsecured Redeemable Unlisted Debentures
2008 2007Rs Rs
29 Deferred taxationBalance as at 1st April 35,100,695 67,792,684
Amount originating / (releasing) during the period 7,752,792 (32,691,989)
Balance as at 31st March 42,853,487 35,100,695
The company issued 2,500,000 unsecured redeemable four year debentures of Rs. 100/- each to the value of Rs. 250 million
during the year ended 31.3.2006. The Debentures have fixed and floating interest rates as follows.
The company issued 2,590,000 & 2,410,000 unsecured redeemable five year debentures of Rs. 100/- each to the value of Rs. 259
& Rs. 241 million during the year ended 31.3.2007 & 31.03.2008 respectively. These debentures have a fixed rate of 16% p.a
The basis of calculating the floating rate of interest, for the period ended 31.03.2008 remains unchanged as per the debenture
prospectus.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2008 2007Rs Rs
30 Assets Securitization LoanCommercial Bank Corporate Division 122,478,478 245,450,109
Hatton National Bank PLC 85,697,220 183,505,469
Commercial Bank of Ceylon PLC 462,300,676 294,408,048
Sampath Bank PLC 343,216,269 573,258,794
Capital Alliance 223,080,272 250,042,376
National Development Bank PLC 654,100,000 326,000,000
Nations Trust Bank PLC 84,374,500 140,624,500
Pan Asia Bank PLC 175,659,266 29,011,975
Waldock Mackenzie 56,250,000 81,250,000
Union Bank PLC 91,666,667 75,000,000
Hongkong and Shanghai Banking Coporation Limited PLC 255,555,556 205,555,556
Investec 54,166,667 75,000,000
ICICI Bank PLC 239,941,605 87,370,006
Berkly 72,724,473 -
2,921,211,649 2,566,476,833
Security Pledged
31 Stated capital
2008 2007Rs Rs
Ordinary sharesAs at 1 st April
21,347,200 ordinary shares 213,472,000 213,472,000
As at 31 st March
21,347,200 ordinary shares 213,472,000 213,472,000
Stated capital as at 31 st March 213,472,000 213,472,000
Issued and fully paid
21,347,200 Ordinary shares 213,472,000 213,472,000
32 Statutory reserve fundBalance as at 1st April 61,025,575 43,593,997
Transfers during the period 18,510,458 17,431,578
Balance as at 31st March 79,536,033 61,025,575
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
Reserve Fund is a statutory reserve created in compliance with the direction No. 1 of Central Bank Regulations of
2003. The amount transferred is not less than 5% of the net profit after taxation.
In accordance with Section 58 of Companies Act No 7 of 2007 , which became effective from 3rd May 2007, share
capital has been reclassified as stated capital. The comparative information has also been reclassified accordingly.
Lease and Hire Purchase Portfolio amounting to Rs. 4,914,525,034.34 has been pledged as security for the above
loans.
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As at 31st March 2008 2007Rs Rs
33 General ReserveBalance as at 1st April 405,696,300 275,696,300
Transfers during the period 197,322,092 130,000,000
Balance as at 31st March 603,018,392 405,696,300
34 Related Party TransactionsTransactions with key managerial personsThe key management personnel are the members of its Board of Directors of Senkadagala Finance Company Limited
Remuneration of board members and key managerial personnel.The members of the board received a remuneration totaling to Rs.69,000 (2007 = Rs.69,000).
34.1
34.2
34.2.1
Name of related party (Granted)/Settled (Granted)/Settledduring the year during the year
2008 2007Rs Rs
E.W Balasuriya & Company (Private) Limited - 12,195,119
Senkadagala Hotels Company Limited - 7,743,471
Name of related party Relationship Ordinary sharesNo.
Senkadagala Hotels Company Limited Board of Directors 467,109
The company operates its registered office in the premises of Senkadagala Hotels Company Limited, and has paid
Rs.900,000/= to Senkadagala Hotels Company Limited, as rent for the year ended 31st March 2008. (In 2006/07
Rs.1,080,000/=)
Senkadagala Finance Company Limited
The company carries out transactions in the ordinary course of business on an arms length basis with the enterprises
which, the Boards of Directors of those companies have a substantial shareholding and a significant influence over the
company.
Notes to the financial statements (Continued)
Mr. E. W. Balasuriya, Mr. L. Balasuriya, Mr. R. Balasuriya, Mr. Dr. M. Balasuriya, Dr. A. Balasuriya and Mrs. L.
Fernando who are the directors of the company, are also the directors of Senkadagala Hotels Company Limited, and
E. W. Balasuriya & Company (Private) Limited. Further Mrs. Gayathri Madan Mohan who is a director of the
company, is also a director of E. W. Balasuriya & Company (Private) Limited.
Accommodation Granted and settled during the year to entities controlled by key managerial persons who have a
controlling interest is stated below.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2008 2007Rs Rs
35 Contingent liabilities and commitments
Contingent liabilities
Capital commitments
2008 2007Rs Rs
Approved and Contracted for 16,015,900 14,360,000
Approved but not Contracted for 52,204,000 60,000,000
68,219,900 74,360,000
36 Events occurring after the balance sheet date
37 Restatement of Certain Prior year Figures
Senkadagala Finance Company Limited has restated certain prior year figures with the adoption of revised Sri
Lanka Accounting Standards (SLAS).
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
No circumstances have arisen since the Balance Sheet date which would require adjustments to or disclosure in the
Financial Statements.
The company has not exposed itself to guarantees to banks or any third parties and commitments of a material
nature as at 31st March 2008.
Capital expenditure approved by the Board of Directors for which provision has not been made in the Financial
Statements amounted to approximately.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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39 Business Segments
Financial Reporting by segment as per the provision of Sri Lanka Accounting Standard No. 28 - Segment Reporting.
As at 31st March 2008 2007 2008 2007 2008 2007
Rs Rs Rs Rs Rs Rs
Financing Financing Investing Investing Consolidated Consolidated
Revenue
Interest 1,085,270,620 914,403,999 44,652,445 42,295,165 1,129,923,065 956,699,164
Bad Debts Recovered 20,573,509 12,468,458 - - 20,573,509 12,468,458
Other Income 230,885,697 182,265,440 16,845,406 11,923,767 247,731,103 194,189,207
Total Gross Income 1,336,729,826 1,109,137,897 61,497,851 54,218,932 1,398,227,677 1,163,356,829
Net result 642,862,982 581,293,645 30,260,333 9,076,938 673,123,315 590,370,583
Unallocated Expenses - - - - (387,369,390) (301,504,926)
Net Profit for the year 285,753,925 288,865,657
Total Assets 5,101,197,289 4,286,487,549 764,556,929 507,507,877 5,865,754,218 4,793,995,426
Total Liabilities 4,965,198,533 4,109,495,059 - - 4,965,198,533 4,109,495,059
38 Maturity Analysis
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.03.2008
Interest Earning Assets Rs Rs Rs Rs Rs
Money at call and short notice 280,585,642 - - - 280,585,642
Government Treasury bills - 93,946,607 - - 93,946,607
Dealing securities 16,232,202 - - - 16,232,202
Stock out on hire 148,540,805 1,608,914,207 1,403,267,197 1,137,582,719 4,298,304,928
Debtors 167,084,447 2,228,375 4,635,667 - 173,948,489
Seized stock 38,528,841 19,546,625 93,532,680 81,013,858 232,622,004
Investment securities - - - 14,165,755 14,165,755
Total Interest Earning Assets 650,971,937 1,724,635,814 1,501,435,544 1,232,762,332 5,109,805,627
Non Interest Earning Assets 326,402,848 19,652,830 24,313,467 385,579,446 755,948,591
Total Assets 977,374,785 1,744,288,644 1,525,749,011 1,618,341,778 5,865,754,218
Percentage (%) 31.03.2008 16.66 29.74 26.01 27.59 100.00
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.03.2008
Interest bearing liabilities Rs Rs Rs Rs Rs
Deposits 215,675,782 569,671,310 104,519,070 15,662,038 905,528,200
Certificate of deposits - 2,493,735 9,974,942 - 12,468,677
Saving accounts 19,317,807 - - - 19,317,807
Assets Securitization Funds 393,525,086 1,035,351,407 1,280,883,318 211,451,839 2,921,211,650
Debentures - - 250,000,000 500,000,000 750,000,000
Total Interest Bearing Liabilities 628,518,675 1,607,516,452 1,645,377,330 727,113,877 4,608,526,334
Non Interest Bearing Liabilities 277,387,404 7,872,746 6,866,473 64,545,576 356,672,199
Total Liabilities 905,906,079 1,615,389,198 1,652,243,803 791,659,453 4,965,198,533
Shareholders' Funds - - - 900,555,685 900,555,685
Total Shareholders' Funds
and Liabilities 905,906,079 1,615,389,198 1,652,243,803 1,692,215,138 5,865,754,218
Percentage (%) 31.03.2008 15.44 27.54 28.17 28.85 100
Senkadagala Finance Company LimitedAs at 31st March 2008
An analysis of the total assets employed and the total liabilities of the Company as at 31st March 2008, based on the remaining
period from the balance sheet date to the respective contractual maturity dates is given below.
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AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2009
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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ncome statementestated
For the year ended 31st March 2009 2008Note Rs Rs
989,197,163,1811,625,546,11emocnI
Interest income 2 1,560,124,313 1,259,892,987
Interest expenses 3 (931,903,957) (668,736,623)
463,651,195653,022,826emocni tseretni teN
Other operating income 4 72,687,517 85,961,028
Other operating expenses 5 (85,433,017) (32,384,573)
918,237,446658,474,516snoitarepo morf emocni teN
)825,530,69()264,457,011(tsoc lennosreP
Depreciation of property, plant and equipment (65,326,045) (50,326,859)
Amortization on intangible )464,705,5()680,490,5(stessa
)178,761,4()121,58(ytiutarg gniriter rof noisivorP
)682,317,251()138,904,012(sesnepxe rehtO
6 (391,669,545) (308,751,008)
118,189,533113,508,322emocni rehto erofeb tiforP
Other income 7 12,714,288 15,937,974
Profit before provisio 587,919,153995,915,632sn
)912,040,84()382,574,99(snoisivorp dna sessol naoL
137,044,316 303,879,566
)502,826,1()038,322,91(secivres laicnanif no xaT deddA eulaV
163,152,203684,028,711noitaxat erofeb tiforPTaxation 8 (52,219,510) (15,039,988)
373,112,782679,006,56raey eht rof tiforp teN
Earnings per share 9 3.07 13.45
Dividend per share 10 1.51 3.27
Figures in brackets indicates deductions.
The accounting policies from page 77 to 4 and the notes from page 5 to 9 form an integral part ofthese financial statements.
Senkadagala Finance Company Limited
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedStatement of Cash flow
For the year ended 31st March 2009 2008Rs Rs
Cash flow from operating activitiesInterest and commission receipts 1,375,998,231 1,112,275,018
Interest payments (931,903,957) (668,736,623)
Recoveries of bad debts 1,512,956 20,573,509
Other income 209,513,438 174,306,670
Operating expenditure (85,433,017) (32,384,573)
Cash payments to employees and suppliers (299,610,467) (236,860,032)
Operating profit before changes in operating assets 270,077,184 369,173,969
(Increase) / Decrease in operating assetsIncrease in Short term funds (49,403,440) (13,919,221)
Increase in Funds advanced to customers (141,093,725) (687,380,315)
Increase in Other receivables 15,289,958 (15,110,170)
Increase in Deferred expenses (12,918,526) (10,322,156)
Increase in Trade debtors (124,831,990) (100,119,031)
Increase in Other assets 49,913,489 (37,968,311)
(263,044,234) (864,819,204)
Increase / (Decrease) in operating liabilitiesIncrease in Deposits from customers 460,835,904 172,965,545
Gratuity Paid - (1,822,500)
Increase / (Decrease) in Advances received (28,590,536) (12,981,687)
Increase in Other liabilities (86,349,623) 90,512,417
345,895,745 248,673,775
Net cash from operating activities 352,928,695 (246,971,460)
Taxes paid (Value added tax & SRL) (19,311,501) (16,896,278)
Net Cash Outflow from operating activities 333,617,194 (263,867,738)
Cash flow from investing activitiesDividends received 575,725 270,207
Interest received from Treasury Activities 52,623,794 44,644,445
Investment securities acquired during the year - (3,939,625)
Purchase of property, plant and equipment (114,212,622) (205,111,690)
Purchase of intangible assets (2,780,000) (11,776,591)
Proceeds from sale of property, plant and equipment 9,532,000 18,001,999
Net Cash Outflow from investing activities (54,261,103) (157,911,255)
Cash flow from financing activitiesSecuritization loans obtained 1,251,489,074 1,830,200,717
Unlisted Debentures issued 240,000,000 241,000,000
Listed Debentures Redeemed (150,000,000) -
Repayment of securitization loans (1,771,617,865) (1,476,852,024)
Dividends paid (32,129,858) (62,355,968)
Net cash flow from financing activities (462,258,649) 531,992,725
Cont…..
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedStatement of Cash flow Continued
For the year ended 31st March 2009 2008Rs Rs
Cont…..
Net Increase/ (Decrease) in cash and cash equivalents (182,902,558) 110,213,733
Cash and cash equivalents at the beginning of the period (Note 11) 417,426,520 307,212,787
Cash and cash equivalents at the end of the period (Note 11) 234,523,962 417,426,520
Reconciliation of cash and cash equivalents269,325,432sdnuf mret trohs dna hsaC 417,426,520
234,523,962 417,426,520
Reconciliation of operating profit684,028,711noitaxat erofeb tiforP 302,251,361
)527,575(sdnediviD (270,207)
Provision for bad debts 86,935,188 36,509,371
590,045,21tnemriapmi rof noisivorP 11,530,848
038,322,91secivres laicnanif no xaT deddA eulaV 1,628,205
031,024,07noitaicerpeD 55,834,323
121,58ytiutarg rof noisivorP 4,167,871
)497,326,25(emocni tnemtsevnI (44,644,445)
)479,103,5(selcihev rotom fo lasopsid no tiforP (9,722,140)
728,355,12seef larutcurts fo noitazitromA 11,888,782
Cash flows from operating activities before changes in operating assets 270,077,184 369,173,969
Figures in brackets indicates deductions.
The accounting policies from page 77 to 4 and the notes from page 5 to 9 form an integral part of thesefinancial statements.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedStatement of changes in uityFor the year ended 31 st March
Stated Statutory General Retained Totalcapital reserve reserve profit
Rs Rs Rs Rs Rs
Balance as at 01.04.2007 (Restated) Note A 213,472,000 61,025,575 405,696,300 5,308,464 685,502,339
Profit after tax for the year (Restated) Note B - - - 287,211,373 287,211,373
-evreser ot refsnarT 18,510,458 197,322,092 (215,832,550) -
Dividend paid - - - (69,698,608) (69,698,608)
Balance as at 31st March 2008 (Restated) 213,472,000 79,536,033 603,018,392 6,988,680 903,015,105
Balance as at 01.04.2008 (Restated) Note C 213,472,000 79,536,033 603,018,392 6,988,680 903,015,105
Profit after tax for the year - 679,006,56679,006,56
-evreser ot refsnarT 4,000,000 35,000,000 (39,000,000) -
Dividend paid (32,020,800) (32,020,800)
Balance as at 31.3.2009 213,472,000 83,536,033 638,018,392 1,568,856 936,595,281
Note A
Rs.694,603,4)detroper sA( 7002/40/10 ta sa ecnalaB
Adjustment for rectification of error 1,001,968 464,803,5)detatser sA( 7002/40/10 ta sa ecnalaB
Note B
Rs.Profit for the period (As reported) 285,753,925
Adjustment for rectification of error 1,457,448Profit for the period (As restated) 287,211,373
Note C
Rs.062,925,4)detroper sA( 8002/40/10 ta sa ecnalaB
024,954,2)lasreveR( rorre fo noitacifitcer rof tnemtsujdA 086,889,6)detatser sA( 8002/40/10 ta sa ecnalaB
Figures in brackets indicates deductions.
The accounting policies from page 77 to 4 and the notes from page 5 to 9 form an integral part of these financial
The Company rectified the under provision of deferred taxation, during the current year, whereas the Company had claimed an
excess amount of brought forward tax losses, while not considering the bad debt provision on lease advances in arriving at the
carrying value, for the purpose of computing deferred tax liability.
The rectification was accounted for retrospectively, in accordance with Sri Lanka Accounting Standards 10 - Accounting
Policies, Changes in Accounting Estimates and Errors.
Consequent to the reversal of deferred taxation, the cumulative reversal of deferred tax liability that would have been adjusted
up to 01.04.2008 is Rs.2,459,420 and the figures reported previously has been restated as follows:
The deferred tax liability of Rs.34,098,724 that would have been provided up to 1.04.2007 has been adjusted to the retained
earnings and the restated balance from reported previously is as follows:
The restatement of the retained earning balance are summarized below,
During the year ended 31st March 2008 the Company had charged Rs.7,752,792 as deferred tax liability arising for that year
whereas the reversal of deferred tax liability would have been Rs 6,295,344 as if the error would have not taken place.
Accordingly the net profit has been understated by Rs 1,457,448 and the net profit for the year ended 31.03.2008 has been
restated as follows
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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1. Corporate Information
1.1 Domicile and legal form
Senkadagala Finance Company Limited is Limited Liability Company incorporated
under the Companies Act on December 29, 1968 and registered under the Finance
Company Act No.78 of and domiciled in Sri Lanka. Its registered office is situated at
No. 12, Kotugodella Veediya, Kandy.
1.2 Principal Activities and Nature of Operations
The principal lines of business of the Company include providing of financial
accommodations in the form of lease finance, hire purchase, trade loans and pledge
loans.
1.3 Number of Employees
The number of employees of the Company at the end of the year was 212 (2008 –
185).
1.4 Approval of Financial Statements by Directors
The Financial Statements of Senkadagala Finance Company Ltd for the year ended
31st March 2009 where authorized for issue in accordance with a resolution of the
Board of Directors on May 20,2009.
1.5 Parent Enterprise and Ultimate Parent Enterprise The Company is a subsidiary of E.W.Balasuriya and Company Private Limited, which
is incorporated and domiciled in Sri Lanka.
2. Summary of Significant Accounting Policies
2.1 General Policies
2.1.1 Basis of Preparation
Statement of Compliance The Balance Sheet, and the related Statements of Income, Changes in Equity and
Cash Flow together with the Accounting Policies and Notes (Financial Statements) of
Senkadagala Finance Company Ltd as at 31 March 2009 and for the year then ended,
comply with the Sri Lanka Accounting Standards laid down by the Institute of
Chartered Accountants of Sri Lanka.
Senkadagala Finance Company LimitedSignificant Accounting Polices
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Basis of Measurement The Financial Statements of the Company are prepared under the historical cost
convention basis. No adjustments have been made for inflationary factors affecting
the financial statements.
Financial Statements of the Company are presented in Sri Lankan Rupees, which is
the Company’s functional currency.
2.1.2 Going Concern
The Directors have made an assessment of the Company’s ability to continue as a
going concern and they do not intend either to liquidate or to cease operations.
2.1.3 Comparative Figures
Comparative information is reclassified wherever necessary to conform with the current years’ classification in order to provide a better presentation.
2.1.4 Post-Balance Sheet Events
All the material post Balance Sheets events have been considered and appropriate adjustments/ disclosures have been made in the Accounts, wherever necessary.
2.1.5 Taxation
Tax expense comprises current tax and deferred tax.
(a) Current Taxes
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Provision for taxation is based on the elements of income and expenditure as reported in the financial statements and computed in terms of the provisions of the Inland Revenue Act No, 10 of 2006 and amendments thereto, at the rate of 35% (2008 – 35%).
(b) Deferred Taxation
Deferred Tax is provided on temporary differences as at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized on all temporary differences.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
2.1 General Accounting Policies (Continued)
2.1.1 Basis of Preparation (Continued)
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Deferred tax assets are recognized for all deductible differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilized.
Deferred Tax assets and liabilities are measured at the tax rate that are expected to apply in the year when the assets are recognized, or the liabilities are settled, based on tax rate and tax laws that have been enacted or substantially enacted at the balance sheet date.
Current Tax and deferred tax relating to items recognized directly in equity are also recognized in equity and not in the income statement.
Deferred Tax assets and liabilities are set off if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
2.2 Assets and Bases of their Valuation
2.2.1 Leases
Assets leased to the customers under agreements that transfer substantially all the
risks and rewards associated with ownership other than legal title, are classified as
finance leases.
Lease rentals receivable under finance leases net of unearned lease interest income i.e.
not accrued to revenue, (interest in suspense), provisions for doubtful recovery of
rentals and initial rentals received are classified as stock out on hire in the Balance
Sheet.
Provision for bad and doubtful recoveries is made as described under 2.3.3
2.2.2 Investments
(a) Dealing Securities
These are marketable securities acquired and held with the intention of resale over a
short period of time. Such securities are recorded at the lower of cost and market
value on an aggregate portfolio basis.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
2.1.5 Taxation (Continued)
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(b) Fall in value of Investments
Unrealized losses on revaluation of dealing securities at the lower of cost and market
value are taken to the Income Statement as per the provision of Sri Lanka accounting
Standard No. 22 on Accounting for Investments.
(c) Investments in Associates
Investments in associates are stated at cost in the company’s financial statement in
accordance with the Allowed Alternative Treatment as prescribed by Sri Lanka
accounting Standard No.27, Accounting for Investments in Associates.
(d) Investment Securities
Investment securities are stated at cost in the Company’s financial statements in
accordance with Sri Lanka Accounting Standard No. 22, Accounting for Investments.
2.2.3 Property, Plant and Equipment
The Property, plant & equipment are recorded at cost /valuation less accumulated
depreciation and impairment losses.
Property, Plant and Equipment are recorded at cost of purchase or construction or
valuation together with any incidental expenses thereon. These assets are stated at
cost less accumulated depreciation, which is provided for on the basis specified
below.
Depreciation is provided at the following rates on straight line basis over the periods
appropriate to the estimated useful lives of the different types of assets:
Free hold land is not depreciated.
Buildings 5% per annum
Office Equipments 10% per annum
Computers and Other equipments 25% per annum
Furniture and Fittings 10% per annum
Motor Vehicles 16.67%per annum
Generators 12.5% per annum
Interior Construction 20% per annum
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
2.2.2 Investments (Continued)
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2.2.4 Intangible Assets
2.2.4.1 Basis of Recognition An Intangible asset is recognized if it is probable that future economic benefits that
are attributable to the assets will flow to the entity and the cost of the assets can be
measured reliably in accordance with the Sri Lanka Accounting Standard No 37
Intangible Assets. Accordingly, these assets are stated in the balance sheet at cost less
accumulated amortization and accumulated impairment loss.
2.2.4.2 Amortization The amortization expense on intangible asset is recognized in the Income statement in
the expense category consistent with the function of the intangible assets.
2.2.4.3 Computer Software Computer software is stated at cost less accumulated amortization and any
accumulated impairment loss. Amortization is done at 12% per annum on cost.
2.2.5 Debtors
Debtors are stated at their estimated realizable amounts. Provision has been made in
the accounts for bad and doubtful debts.
2.2.6 Cash and Cash Equivalents
Cash and cash equivalent comprise of cash balances, short-term funds, balances with
Central Bank of Sri Lanka and Government of Sri Lanka Treasury Bills readily
convertible to known amounts of cash and subject to insignificant risk of changes in
value.
2.3 Liabilities and provisions
2.3.1 Commitments and contingencies
All discernible risks are accounted for in determining the amount of other liabilities.
2.3.2 Retirement benefits obligations
The Retirement benefits obligations have adopted the actuarial valuation method in
accordance with SLAS 16 (Revised 2006) Employee Benefits.
The resulting increase/decrease in the obligation is dealt as follows on initial adoption
of the standards.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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Where the transitional liability is more or less than the liability that would have been
recognized at the same date under the Company’s previous accounting policy, the
increase/decrease as part of its retirement benefit obligation immediately as increase
or decrease in that provision.
Up to 31st March 2008, provision had been made for retirement gratuities based on
number of years of service multiplied by the half of last month’s salary of those
employees.
2.3.2.1 The principal actuarial assumptions used in the determining the cost are ;
(i) Retirement age - normal retirement age, or age on valuation date, if greater
(ii) Payment of benefit – Gratuity is assumed to be paid immediately provided the participant has 5 years of service credit at the time of departure. It is also assumed that all participants who are eligible for a commuted pension will choose it in lieu of statutory gratuity payments.
(iii) Salary scale - Per annum 10%
2.3.2.2 The liability is not externally funded.
2.3.3 Provision for Bad and Doubtful Debts
Provision for bad and doubtful debts is made in accordance with Direction issued by
the Central Bank of Sri Lanka to Finance Companies and Sri Lanka Accounting
Standard No. 33 Revenue Recognition and Disclosure in the Financial Statements of
Finance Companies.
In addition, wherever it is considered prudent, provisions are made on specifically
identified loans and advances.
2.4 Income statement
2.4.1Revenue Recognition
(a) Income from Lease and Hire Purchase Agreements
The interest components of the lease/ hire purchases rental receivable during the year
on assets leased and on hire purchases advance to customers are recognized as Income
for the year.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
2.3.2 Retirement benefit obligations (Continued)
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The unearned lease/ hire purchases income included in the lease/ hire purchases
rentals receivable is taken into revenue over the term of the lease/ hire purchases
commencing from the month in which the lease/ hire purchases is executed in
proportion to the capital outstanding, so as to provide a constant periodic return on the
net investment outstanding at the end of each period.
(b) Basis of Recognizing Interest Income
Interest is recognized on accrual basis and ceases to be taken into revenue for all types
of advances when such contracts are classified as non-performing (where the recovery
of interest or principle is in arrears for over six months). Thereafter interest on
advances is accounted for on a cash basis.
(c) Dividend Income
Dividend income from share trading is recognized in the period in which they are
declared.
(d) Rent Income
Rent income is recognized on an accrual basis.
(e) Commission income
Commission income is recognized on a cash basis.
(f) Recovery of Bad Debts written off
Recovery of Bad Debts written off is recognized on a cash basis.
(g) Profit on sales of seized vehicles stocks
Profit earned on the sales of seized vehicles stocks accounted in the income Statement
based on net realizable value.
(h) Interest Income from money market investments
Interest Income from Money Market investments is recognized on a cash basis
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
2.4.1 Revenue Recognition (Continued)
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2.5 Expenditure Recognition
2.5.1 Interest and Other Expenses
In terms of the Sri Lanka Accounting Standard 33 – Revenue Recognition and
Disclosure in the Financial Statements of Finance Companies, interest and other
expenses payable are recognized on an accrual basis.
2.6 Cash Flow Statement
The cash flow statement has been prepared by using the “Direct Method” in
compliance with SLAS-9, Cash Flow Statement. Cash and Cash Equivalents comprise
mainly of cash balance and call deposits. Cash and cash equivalents are presented net
of bank overdrafts for the purpose of the cash flow statement.
2.7 Segment Reporting
A segment is a distinguishable component of the Company that is engaged in
providing services (Business Segment).
In accordance with the Sri Lanka Accounting Standards No. 28 on Segment
Reporting, Segmental information is presented in respect of the Company. The
segment comprise of financing and investing.
Inter segment transactions are based on fair market prices.
Segment results, assets and liabilities include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly of Head Office expenses.
Segment capital expenditure is the total cost incurred during the period to acquire
segment assets that are expected to be used for more than one accounting period.
Senkadagala Finance Company LimitedSignificant Accounting Polices (Continued)
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Senkadagala Finance Company LimitedNotes to the financial statements
For the year ended 31st March 2009 2008Note Rs Rs
1 Income 1.1 1,645,526,118 1,361,791,989
1,645,526,118 1,361,791,989
1.1 IncomeInterest income 2 1,560,124,313 1,259,892,987
Other operating income 4 72,687,517 85,961,028
Other income 7 12,714,288 15,937,974
1,645,526,118 1,361,791,989
2 Interest income Lease 396,445,864 371,208,567
Hire purchase 880,312,438 652,706,515
Loans 15,970,974 12,398,556
Non - Hire purchase 51,962,428 47,367,531
Fixed deposit loans 2,730,313 1,589,451
Money market investments 29,952,065 29,178,645
Treasury bills 2.1 22,671,729 15,465,800
Default charges 160,078,502 129,969,922
Discounting cheques - 8,000
1,560,124,313 1,259,892,987
2.1 Notional tax credit for withholding tax on government securities on secondary market transactions.
The resulting Notional tax credit amounts to 2,267,173 1,546,580
Net interest income amounts to 20,404,556 13,919,220
Gross interest 22,671,729 15,465,800
3 Interest expensesFixed deposits 190,368,595 99,790,998
Certificate of deposits 3,251,643 849,588
Savings accounts 3,604,639 439,704
Securitization loans 541,003,018 443,273,581
Debentures 123,845,605 91,068,677
Corporate loan 69,830,457 33,314,075
931,903,957 668,736,623
The Inland Revenue (Amendment) Act. No. 10 of 2006 provides that a Company which derives interest
income from the secondary market transactions in Government securities would be entitled to a notional
tax credit (being one ninth of net interest income), provided such interest income forms part of the
Statutory Income of the Company for that year of assessment.
Accordingly, the net interest earned by the Company from the Secondary Market transactions in
Government securities (Treasury bills) for the year has been grossed up in the financial statements.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
RestatedFor the year ended 31st March 2009 2008
Note Rs Rs
4 Other operating incomeFinance charges 15,892,498 15,070,843
Commission income 28,576,214 26,996,398
Bad debts recoveries 1,512,956 20,573,509
Dividend income 575,725 270,207
Sundry income 15,391,959 10,959,044
Legal fees 10,738,165 12,091,027
72,687,517 85,961,028
5 Other operating expensesCommission paid 15,384,121 15,077,232
Value Added Tax 4,644,599 5,925,636
Debenture issue arrangement fee 701,343 490,691
C.R.I.B charges 2,666,515 2,670,695
Loss on sale of seized stocks 62,036,439 8,220,319
85,433,017 32,384,573
6 Operating expensesOverhead expenses includes the followings :Directors' remuneration 2,850,000 69,000
Salaries and wages 89,585,482 69,716,094
Employers' contribution to Employees' Provident Fund 10,791,996 8,365,931
Employers' contribution to Employees' Trust Fund 2,697,999 2,091,483
Directors' fees 180,000 135,000
Auditors' remuneration 386,062 275,000
Amortization of securitization loan structuring fee 21,553,827 11,888,782
7 Other incomeRent income 1,760,000 1,920,000
Inspection fees 765,528 1,307,254
Investment Income 3,274,886 2,988,580
Profit on disposal of motor vehicles 5,301,974 9,722,140
Staff bonus over provision 1,611,900 -
12,714,288 15,937,974
8 TaxationTaxation based on profits for the year 8.1 27,373,177 8,744,644
Deferred tax charged / (reversed) 24,846,333 6,295,344
52,219,510 15,039,988
The Deferred tax charged for the year ended 31.3.2008 has been restated as described in the notes changes
in equity Statement and as a consequent the deferred tax charge for the year ended has been restated from
Rs.7,752,792 to Rs.6,295,344
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
For the year ended 31st March 2009 2008Rs Rs
8.1 Reconciliation of effective tax rate
Net profit before tax 117,820,486 302,251,361
Add - Disallowable expenses 224,051,529 348,091,557
Less - Allowable expenses (150,052,773) (610,095,293)
Add / (Less) - Adjustments (74,971,066) (2,190,207)
Loss from lease Business 1,695,327 -
Business loss claimed during the year (41,490,226) (13,320,096)
Taxable income 77,053,277 24,737,322
Income Tax at 35% 26,968,647 8,658,063
Social Responsibility Levy @ 1.5% of Income Tax 404,530 86,581
Income Tax on profit for the year 27,373,177 8,744,644
Effective tax rate 23% 3%
9 Earnings per share
Profit after taxation 65,600,976 287,211,373
Profit attributable to ordinary share holders 65,600,976 287,211,373
Number of ordinary shares as denominator 21,347,200 21,347,200
Earnings per ordinary share 3.07 13.45
10 Dividend per shareFinal dividend paid 2007/08 19,491,780 13,128,528
1st Interim dividend paid 12,640,272 18,145,120
2nd Interim dividend paid - 20,279,840
3rd Interim dividend paid - 18,145,120
32,132,052 69,698,608
Dividend per ordinary share 1.51 3.27
Earnings per share have been calculated by dividing the net profit for the year attributable to the
ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
As at 31st March 2009 2008Note Rs Rs
11 Cash and short term fundsCash and bank balances 11.1 121,188,729 136,840,878
Money at call and short notice 113,335,233 280,585,642
234,523,962 417,426,520
11.1 Cash and bank balancesCommercial Bank Savings 43,857 43,857
Commercial Bank Kandy # 1 16,935,672 (8,766,664)
Commercial Bank Kandy # 2 7,325,396 20,296,965
Commercial Bank Kandy # 3 730,328 3,993,792
Commercial Bank Kandy # 4 278,479 417,053
Commercial Bank Colombo # 5 (1,923,512) 665,940
Commercial Bank # 6 1,054,319 1,109,871
Commercial Bank corporate branch 974,674 976,674
Hong Kong and Shanghai Bank 32,670,314 19,815,825
Hatton National Bank Kandy 2,631,188 26,263,407
Hatton National Bank Colombo 3,327,992 2,539,087
Sampath Bank - 6,364,014
Standard Chartered Bank 15,776 18,177
Nation Trust Bank 11,660 11,660
Bank of Ceylon 56,369 56,369
Bank of Ceylon 105,200 105,200
Pan Asia Bank 20,129,934 2,275,530
Union Bank 8,020,905 11,693,216
ICICI Bank 15,500,000 24,846,701
Cash value stamps 52,159 77,144
Encashment floats 3,410,434 3,080,111
Cash in hand 11,217,319 22,776,064
Savings atm withdrawals (1,379,734) (1,819,115)
121,188,729 136,840,878
12 Advance and receivablesDeposits 1,042,284 1,042,284
Pre - paid rent 20,310,923 23,835,826
Advance company tax recoverable 6,125,619 6,125,619
Economic service charge 43,537,781 32,995,601
Cash cover on securitization loan 16,441,218 38,748,453
87,457,825 102,747,783
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st MarchCost Market Cost Market
Value ValueRs Rs Rs Rs
13 Dealing securities quoted companies
Bank Finance InvestmentCentral Finance Co. Ltd. 243,207 680,281 243,207 866,600
(4,333 Ordinary Shares) ( @ Rs. 157) ( @ Rs. 200)
(4,333 Ordinary Shares as at March 31, 2009)
National Development Bank 500 34,176 500 63,456
(384 Ordinary Shares) ( @ Rs. 89) ( @ Rs. 165.25)
(384 Ordinary Shares as at March 31,2009)
Commercial Bank of Ceylon PLC 72,450 16,484 72,450 29,120
(208 Ordinary Shares) ( @ Rs. 79.25) ( @ Rs. 140)
Debenture commercial bank 13.5% 5,000,000 5,000,000 5,000,000 5,000,000
(50,000 Debentures of Rs. 100/- each) ( @ Rs. 100) ( @ Rs. 100)
Beverage Food TobaccoCeylon Tobacco PLC 142,017 297,600 142,017 192,200
(3,100 Ordinary Shares) ( @ Rs. 96) ( @ Rs. 62)
(3,100 Ordinary Shares as at March 31, 2009)
Hotels TravelsAitken Spence PLC 3,355 10,395 3,355 14,025 (33 Ordinary Shares) ( @ Rs. 315 ) ( @ Rs. 425 )
(33 Ordinary Shares as at March 31, 2009)
Investment TrustNational Equity Fund 600,925 1,405,974 600,925 600,925
(131,399.4 Ordinary Shares ) ( @ Rs. 10.7) ( @ Rs. 6.09)
(131,399.4 Ordinary Shares as at March 31, 2009)
ManufacturingRoyal Ceramics PLC 273 273 273 20,000
(10 Ordinary Shares) ( @ Rs. 27.25) ( @ Rs. 200)
(10 Ordinary Shares as at March 31, 2009)
Lanka Tiles Ltd. 7,175 12,250 7,175 12,250
(250 Ordinary Shares ) ( @ Rs. 49) ( @ Rs. 49)
DiversifiedJohn Keells Holdings PLC 13,800 121,547 13,800 241,536
(1,937 Ordinary Shares ) ( @ Rs. 62.75) ( @ Rs. 119.75)
(1,937Ordinary Shares as at March 31, 2009)
Orient Fund (Portfolio Investments) 10,000,000 13,582,712 10,000,000 13,582,712
(1,000,000 Ordinary Shares ) ( @ Rs. 13.58) ( @ Rs. 13.58)
TradingLanka Indian Oil Corporation PLC 148,500 88,000 148,500 115,500
(5,500 Ordinary Shares) ( @ Rs. 16) ( @ Rs. 21)
(5,500 Ordinary Shares as at March 31, 2009)
16,232,202 21,249,691 16,232,202 20,738,324
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
20082009
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
90
As at 31st March 2009 2008Note Rs Rs
14 Loans & AdvancesNet investment in lease advancesLease rental receivable more than one year from balance sheet date 1,249,369,440 889,616,492
Unearned income (365,424,067) (204,462,121)
883,945,373 685,154,371
Lease rental receivable less than one year from balance sheet date 729,002,644 1,474,607,409
Unearned income (213,223,649) (485,972,428)
515,778,995 988,634,981
Net investment in hire purchaseHire purchase rental receivable more than one year from balance sheet date 2,578,660,040 1,392,602,862
Unearned income (809,743,810) (381,189,094)
1,768,916,230 1,011,413,768
Hire purchase rental receivable less than one year from balance sheet date 1,504,639,003 2,305,888,711
Unearned income (472,482,646) (788,730,626)
1,032,156,357 1,517,158,085
Net investment in non hire purchaseNon hire purchase rental receivable more than one year from balance sheet date 126,026,413 92,454,153
Unearned income (40,112,358) (16,850,873)
85,914,055 75,603,280
Non hire purchase rental receivable less than one year from balance sheet date 73,535,965 85,728,169
Unearned income (23,405,419) (30,540,163)
50,130,546 55,188,006
Net investment in loans Loan rental receivable not more than one year from balance sheet date 57,127,939 26,748,843
Unearned income (20,774,219) (7,607,811)
36,353,720 19,141,032
Loan rental receivable less than one year from balance sheet date 33,333,950 46,629,760
Unearned income (12,121,684) (17,796,669)
21,212,266 28,833,091
Loans against fixed deposits 15,559,547 6,953,500
36,771,813 35,786,591
Provision for bad and doubtful debts on loans & advances 14.1.1 (50,550,238) (82,821,800)
Total loans & advances 4,359,416,851 4,305,258,314
14.1 Movement in provision for bad and doubtful debts
Provision as at 1st April 109,765,072 73,255,701
Provision for the year 86,935,188 36,509,371
Bad Debts write off (121,615,613) -
Provision as at 31st March 75,084,647 109,765,072
Provision for bad and doubtful debts on loans & advances 14.1.1 50,550,238 82,821,800 Provision for bad and doubtful debts on arrears 14.1.2 24,534,409 26,943,272
75,084,647 109,765,072
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
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As at 31st March 2009 2008Note Rs Rs
15 Trade and other receivablesRentals in arrears 271,050,685 193,448,261 Provision for bad and doubtful debts on arrears 14.1.2 (24,534,409) (26,943,272)
246,516,276 166,504,989
Sundry debtors 15.1 9,752,100 6,627,731 Discounting of cheques 490,000 490,000 Stamps fees receivable - (73,986) Insurance 53,974,698 10,084,621 Other receivables 15.2 97,030,913 79,656,057 Advances allowed to car sales 10,006,524 21,857,388 Advance payments 14,147,266 21,938,987
431,917,777 307,085,787
15.1 Sundry debtorsStaff debtors 6,046,856 4,500,758 Sundry debtors 3,705,244 2,126,973
9,752,100 6,627,731
15.2 Other receivablesSearch fees and seizing charges receivables 1,687,324 1,826,608 Western union MMBL 294,232 238,873 Goods and Service Tax recoverable 11,020,826 11,020,826 Value Added Tax recoverable 84,028,531 66,569,750
97,030,913 79,656,057
16 Seized stockBalance as at 31 st March 182,708,515 244,152,852 Provision for impairment loss on seized stocks 16.1 (12,540,095) (11,530,848) Balance as at 31 st March 170,168,420 232,622,004
16.1 Movement in provision for impairmentProvision as at 1st April 11,530,848 - Provision made during the year 12,540,095 11,530,848 Loss incurred during the period (11,530,848) - Provision as at 31st March 12,540,095 11,530,848
17 Investment securities (Unquoted)Senkadagala Hotels Limited 13,957,555 13,957,555 Credit Information Bureau 8,200 8,200 Consortium 200,000 200,000
14,165,755 14,165,755
18 Deferred expensesPre - paid loan arrangement fees 16,701,393 18,268,018 Paid during the year 12,918,527 10,322,157 Charged during the year (21,553,827) (11,888,782) Balance at the end of the year 8,066,093 16,701,393
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
Loan structuring fee paid for arranging loans, has been treated as a deferred expense and has been charged to
income statement over the period of repayment of the loans and an amount of Rs.21,553,827 has been
charged to the current year's profit as amortization.
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Notes to the financial statements (Continued)
19 Property, plant and equipment
Cost As at Additions Disposals As at01.04.2008 31.03.2009
Rs Rs Rs Rs
Freehold assetsLand and buildings 102,827,846 8,717,300 - 111,545,146
Furniture and fittings 63,797,038 9,541,216 - 73,338,254
Office equipment 39,812,600 17,469,491 - 57,282,091
Air conditioner 12,806,531 6,106,122 - 18,912,653
Computer & accessories 71,305,368 5,189,053 - 76,494,421
Facsimile machine 622,083 168,400 - 790,483
Generator 22,535,598 8,494,402 - 31,030,000
Motor vehicles 109,755,685 42,890,145 (9,875,303) 142,770,527
Photostat machine 3,908,675 1,445,001 - 5,353,676
Fixtures and Fittings 51,937,737 12,154,157 - 64,091,894
Printers 12,714,890 2,037,335 - 14,752,225
492,024,051 114,212,622 (9,875,303) 596,361,370
Depreciation As at Charge for the Charge on As at01.04.2008 Period Disposals 31.03.2009
Rs Rs Rs Rs
Land and buildings 6,996,320 940,165 - 7,936,485
Furniture and fittings 18,839,068 6,657,449 - 25,496,517
Office equipment 9,891,941 4,731,828 - 14,623,769
Air conditioner 8,795,705 2,709,669 - 11,505,374
Computer & accessories 53,291,918 10,690,901 - 63,982,819
Facsimile machine 278,146 65,190 - 343,336
Generator 6,342,525 3,315,450 - 9,657,975
Motor vehicles 26,168,556 20,765,609 (5,645,163) 41,289,002
Photostat machine 2,406,133 974,833 - 3,380,967
Fixtures and Fittings 20,726,955 11,560,565 - 32,287,520
Printers 7,107,197 2,914,385 - 10,021,582
160,844,464 65,326,045 (5,645,163) 220,525,346
Written down value 331,179,587 375,836,024
2009 2008Rs Rs
20 Intangible AssetsSoftware programmeBalance at the beginning of the year 99,386,628 87,610,037
Additions during the year 2,780,000 11,776,591
Balance at the end of the year 102,166,628 99,386,628
AmortizationBalance at the beginning of the year 70,939,377 65,431,913
Charge for the year 5,094,086 5,507,464
Balance at the end of the year 76,033,463 70,939,377
Net book value 26,133,165 28,447,251
Senkadagala Finance Company Limited
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As at 31st March 2009 2008Rs Rs
21 Certificate of depositsCertificate of deposit control account 14,400,000 13,400,000Interest in suspense (486,793) (931,323)
13,913,207 12,468,677
22 DepositsFixed deposits 1,278,096,084 864,903,614Accrued interest thereon 64,963,587 40,624,587
1,343,059,671 905,528,201
23 Accrued expensesAudit fees 386,062 316,250 Staff bonus - 13,249,950Interest on debenture 56,163,833 47,009,231Securitization loan repayment 65,378,875 41,985,171Directors fees (37,500) -
121,891,270 102,560,602
24 Accounts PayableDebit tax payable 69,435 36,350 Pay as you earn - 201,271 Employees' provident fund - 1,235,093 Employees' trust fund - 185,264 Saving charges - 13,060 Dividend payable 1,015,613 1,124,671 Registrar of motor vehicles charges 475,069 245,425 Refundable deposit 2,168,000 1,610,000 Mortgage 182,299 (16,000) Direct deposits 3,607,796 2,807,523 Stamp duty & E.S.C payable 11,652,966 9,573,926 W.H.T on loan & debentures 1,212,003 772,178 W.H.T on commission 68,445 -
20,451,626 17,788,761
25 Trade payablesAmount payable to car sales 1,166,667 932,203 NHP - payable (1,784,650) (27,469) XL - loan excess payment 29,061 33,227 Stock payable 21,228,442 126,266,313Sundry creditors 2,281,036 (8,035,040)
Goods and Service Tax refund for buses 8,912 8,912
22,929,468 119,178,146
26 Commissioner General of Inland RevenueWithholding tax on treasury bills Interest and Commission (3,814,869) (1,546,580)
Income Taxes 27,373,177 8,744,644
Income tax payment (87,671) -
W.H.T on dividends (25,753) (37,826)
W.H.T payable (5,826,666) (4,623,990)
17,618,218 2,536,248
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
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Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
As at 31st March 2009 2008Rs Rs
27 Rentals received in advanceInitial payment of lease 12,286,660 21,032,485 Rental prepaid 14,811,080 34,655,791
27,097,740 55,688,276
28 Retirement benefit obligationBalance as at 1st April 16,125,663 13,780,292 Provision for the period 85,120 4,167,871 Paid during the period - (1,822,500) Balance as at 31st March 16,210,783 16,125,663
29 DebenturesType Purpose of Interest 2009 2008 Due/Settle
Debenture Rate (p.a) Rs Rs Dates
Listed Debentures To meet the working Note 29.1 100,000,000 250,000,000 4 years from the2005/2009 Capital requirement date of allotment
of the Company
2006/2011 259,000,000 259,000,000 5 years from the2007/2012 241,000,000 241,000,000 date of allotment2008/2013 240,000,000
840,000,000 750,000,000
29.1 Unsecured Redeemable Listed Debentures
Payment Period
Annually Type AQuarterly Type B
The basis of calculating the floating rate of interest, for the period ended 31.03.2009 remains unchanged as per the
debenture prospectus. The company has redeemed 60% of the listed debentures issued in 2005, during the year under
review amounting Rs.150 M.
To meet the working
Capital requirement
of the Company
16% (Fixed)
The provision for retiring gratuity for the year is based on the actuarial valuation carried out by MS Piyal S. Goonetilleke, as
at 31st March 2009.
Rate
14%W.A.TB (Net)+2.75%
Unsecured unlisted Redeemable Debentures
The company issued 2,500,000 unsecured redeemable four year debentures of Rs. 100/- each to the value of Rs. 250 million
during the year ended 31.3.2006. The Debentures have fixed and floating interest rates as follows.
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As at 31st March 2009 2008Note Rs Rs
30 Deferred taxationBalance as at 1st April 40,394,068 35,100,695
Effect on correction of differed taxation - (1,001,971)
Balance as at 1st April (Restated) 40,394,068 34,098,724
Amount originating / (releasing) during the period 24,846,333 6,295,344
Balance as at 31st March 30.1 65,240,401 40,394,068
30.1Deferred tax liabilityTax effect on capital allowances P.P.E 18,239,340 16,326,205
Tax effect on capital allowances Lease Assets 64,473,407 55,438,631
82,712,747 71,764,836
Deferred tax AssetsTax effect on gratuity provision (5,673,774) (5,643,982)
Tax effect on tax losses (11,798,572) (25,726,786)
(17,472,346) (31,370,768)
Net deferred tax liabilities 65,240,401 40,394,068
31 Assets Securitization LoanCommercial Bank Corporate Division 47,710,200 122,478,478
Hatton National Bank PLC 12,841,103 85,697,220
Commercial Bank of Ceylon PLC 499,635,336 462,300,676
Sampath Bank PLC 152,706,511 343,216,269
Capital Alliance 97,158,315 223,080,272
National Development Bank PLC 720,000,000 654,100,000
Nations Trust Bank PLC 35,937,001 84,374,500
Pan Asia Bank PLC 135,504,711 175,659,266
Waldock Mackenzie 31,250,000 56,250,000
Union Bank PLC 54,166,667 91,666,667
Hongkong and Shanghai Banking Corporation Limited PLC 95,555,556 255,555,556
Investec 91,666,667 54,166,667
ICICI Bank PLC 166,950,680 239,941,605
Berkly 60,000,000 72,724,473
First Capital Market 200,000,000
2,401,082,747 2,921,211,649
Security Pledged
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
Lease and Hire Purchase aggregate Portfolio amounting to Rs. 4,914,525,034.34 has been pledged as
security for the above loans.
Deferred tax liabilities
The deferred tax liability has been restated as described in note to the changes in equity statement resulting
in a decrease in deferred tax liability of Rs.1,001,971 as at 01.04.2007 and Rs.1,457,448 as at 31.03.2008
from reported previously.
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As at 31st March 2009 2008Rs Rs
32 Stated capitalStated capital as at 31 march 213,472,000 213,472,000
Number of ordinary shares 21,347,200 21,347,200
33 Statutory reserve fundBalance as at 1st April 79,536,033 61,025,575
Transfers during the period 4,000,000 18,510,458
Balance as at 31st March 83,536,033 79,536,033
34 General ReserveBalance as at 1st April 603,018,392 405,696,300
Transfers during the period 35,000,000 197,322,092
Balance as at 31st March 638,018,392 603,018,392
Reserve Fund is a statutory reserve created in compliance with the direction No. 1 of Central Bank
Regulations of 2003. The amount transferred is not less than 5% of the net profit after taxation.
Senkadagala Finance Company LimitedNotes to the financial statements (Continued)
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35 Related Party TransactionsTransactions with key managerial personnel
Remuneration of board members and key managerial personnel.The members of the board received a remuneration totaling to Rs 2,850,000 (2008 = Rs.69,000).
No post employment benefits were paid to key management personnel during the financial year. (2008 Nil)
35.1
35.2
35.3 Share holding in the related company
Name of the related party
Senkadagala Hotels Company Limited
35.4
36 Contingent liabilities and commitments
Contingent liabilities
Capital commitments
2009 2008Rs Rs
Approved and Contracted for 2,700,000 16,015,900
Approved but not Contracted for 1,700,000 52,204,000
4,400,000 68,219,900
37 Events occurring after the balance sheet dateNo circumstances have arisen since the Balance Sheet date which would require adjustments to or disclosure
in the Financial Statements.
The company has not exposed itself to guarantees to banks or any third parties and commitments of a material
nature as at 31st March 2009.
Capital expenditure approved by the Board of Directors for which provision has not been made in the
Financial Statements amounted to approximately.
Ordinary sharesNo.
467,109
Mr. E. W. Balasuriya, Mr. L. Balasuriya, Mr. R. Balasuriya, Dr. M. Balasuriya, Dr. A. Balasuriya and Mrs. L.
Fernando who are the directors of the company, are also the directors of Senkadagala Hotels Company
Limited, and E. W. Balasuriya & Company (Private) Limited. Further Dr.Mrs. Gayathri Madan Mohan who is
a director of the company, is also a director of E. W. Balasuriya & Company (Private) Limited.
The company carries out transactions in the ordinary course of business on an arms length basis with the
enterprises which, the Boards of Directors of those companies have a substantial shareholding and a significant
influence over the company.
The company operates its registered office in the premises of Senkadagala Hotels Company Limited, and has
paid Rs.787,800/= to Senkadagala Hotels Company Limited, as rent for the year ended 31st March 2009. (In
2007/08 Rs.787,800/=)
Number of Senkadagala Finance Company Ltd shares held by key managerial personnel amounted to Rs.
81,833,280 ( 2008-Rs. 81,833,280)
The key management personnel are the members of its Board of Directors of Senkadagala Finance Company
Limited
Senkadagala Finance Company LimitedNotes to the financial statements as at 31st March 2009 (Continued)
The Company did not have any material transactions with its key management personnel or their close family
members during the year.
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38 Maturity Analysis
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.03.2009
Interest Earning Assets Rs Rs Rs Rs Rs
Money at call and short notice 234,523,962 - - - 234,523,962
Government Treasury bills - 143,350,047 - - 143,350,047
Dealing securities - 16,232,202 - - 16,232,202
Stock out on hire 354,667,566 1,251,717,016 1,978,750,841 774,281,428 4,359,416,850
Debtors 179,214,393 290,497,808 49,663,400 - 519,375,601
Seized stock 126,413,579 43,754,841 - - 170,168,420
Investment securities - - - 14,165,755 14,165,755
Total Interest Earning Assets 894,819,500 1,745,551,914 2,028,414,241 788,447,183 5,457,232,837
Non Interest Earning Assets 129,254,820 - - 280,780,464 410,035,284
Total Assets 1,024,074,320 1,745,551,914 2,028,414,241 1,069,227,647 5,867,268,121
Percentage (%) 31.03.2009 17.45 29.75 34.57 18.22 100.00
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.03.2009
Interest bearing liabilities Rs Rs Rs Rs Rs
Deposits 349,195,515 872,988,787 120,875,370 - 1,343,059,672
Certificate of deposits - 12,456,604 1,456,604 - 13,913,207
Saving accounts 41,177,706 - - - 41,177,706
Assets Securitization Funds 563,829 815,533,401 1,584,985,517 - 2,401,082,747
Debentures - 100,000,000 239,000,000 501,000,000 840,000,000
Total Interest Bearing Liabilities 390,937,050 1,800,978,791 1,946,317,491 501,000,000 4,639,233,332
Non Interest Bearing Liabilities 181,473,514 23,170,096 3,071,665 83,724,233 291,439,508
Total Liabilities 572,410,564 1,824,148,888 1,949,389,156 584,724,233 4,930,672,840
Shareholders' Funds - - - 936,595,281 936,595,281
Total Shareholders' Funds and Liabilities 572,410,564 1,824,148,888 1,949,389,156 1,521,319,514 5,867,268,121
Percentage (%) 31.03.2009 9.73 31.02 33.15 25.93 100
Senkadagala Finance Company LimitedAs at 31st March 2009
An analysis of the total assets employed and the total liabilities of the Company as at 31st March 2009, based on the remaining period
from the balance sheet date to the respective contractual maturity dates is given below.
39 Business Segments
Financial Reporting by segment as per the provision of Sri Lanka Accounting Standard No. 28 - Segment Reporting.
As at 31st March 2009 2008 2009 2008 2009 2008Rs Rs Rs Rs Rs Rs
RevenueInterest 1,347,422,017 1,085,270,620 52,623,794 44,652,445 1,400,045,811 1,129,923,065Bad Debts Recovered 1,512,956 20,573,509 - - 1,512,956 20,573,509 Other Income 215,285,379 184,128,190 28,681,972 27,167,225 243,967,351 211,295,415 Total Gross Income 1,564,220,352 1,289,972,319 81,305,766 71,819,670 1,645,526,118 1,361,791,989
Net result 565,882,546 617,930,927 14,034,560 61,135,199 579,917,106 679,066,126
Unallocated Expenses - - - - (514,316,130) (391,854,753)
Net Profit for the year 65,600,976 287,211,373
Total Assets 5,204,348,860 5,129,703,410 662,919,261 736,109,792 5,867,268,121 5,865,813,202
Total Liabilities 4,930,672,840 4,962,798,097 - - 4,930,672,840 4,962,798,097
Investing ConsolidatedFinancing
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AUDITED FINANCIAL STATEMENTS AS AT 31ST MARCH 2010
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ncome StatementRestated
For the year ended 31st March 2010 2009Note Rs. Rs.
Income 3 1,546,262,350 1,645,526,118
313,421,065,1589,955,154,14emocni tseretnI
)759,309,139()840,696,548(5sesnepxe tseretnI
653,022,826739,368,506emocni tseretni teN
508,104,58563,207,496emocni gnitarepo rehtO
161,226,317203,665,007snoitarepo morf emocni teN
Operating expenses 7
)385,908,701()680,429,511(8stsoc lennosreP
Depreciation of property, plant )440,623,56()526,945,27(tnempiuqe dna
Amortization of intangible )680,490,5()122,839,5(stessa
)000,030,3()000,902,3(stnemulome 'srotceriD
)992,059,932()968,400,742(9sesnepxe gnitarepo rehtO
(444,625,801) (421,210,012)
Operating profit before taxation an 051,214,292105,049,552sessol elbissop d
)227,115,161()697,592,98(01snoisivorp dna sessol naoL
Operating profit before VAT on financial services and income tax 166,644,705 130,900,427
)038,322,91()709,821,43(secivres laicnanif no xaT deddA eulaV
795,676,111897,515,231xat emocni erofeb tiforP
)632,435,38(11esnepxe xat emocnI (52,219,510)
780,754,95265,189,84raey eht rof tiforP
97.292.221 erahs rep sgninrae cisaB
05.107.131erahs rep dnediviD
Figures in brackets indicate deductions.
The Notes to the Financial Statements from pages 105 to 130 form an integral part of these Financial Statements.
Senkadagala Finance Company Limited
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Senkadagala Finance Company LimitedStatement of Changes in uity For the year ended 31 st March 1
Stated Statutory General Restated Totalcapital reserve reserve Retained
fund earningsRs. Rs. Rs. Rs. Rs.
Balance as at 1st April 2008 as previously reported 213,472,000 79,536,033 603,018,392 6,988,680 903,015,105
Under provision of Value Added Tax on financial services ( Note A ) - - - (25,337,284) (25,337,284)
Under provision of Normal Value Added Tax ( Note A ) - - - (20,781,757) (20,781,757)
Balance as at 1st April 2008 as restated 213,472,000 79,536,033 603,018,392 (39,130,361) 856,896,064
Profit for the year (Restated) (Note B) - - - 59,457,087 59,457,087
Transfers to reserves - 4,000,000 35,000,000 (39,000,000) -
Dividend paid - - - (32,020,800) (32,020,800)
000,274,3129002 hcraM ts13 ta sa ecnalaB 83,536,033 638,018,392 (50,694,074) 884,332,351
000,274,3129002 lirpA ts1 ta sa ecnalaB 83,536,033 638,018,392 (50,694,074) 884,332,351
Profit for the year - - - 48,981,562 48,981,562
Transfers to reserves 3,000,000 - (3,000,000) -
Dividend paid - - - (36,290,240) (36,290,240)
000,274,3120102 hcraM ts13 ta sa ecnalaB 86,536,033 638,018,392 (41,002,752) 897,023,673
The restatement of retained earnings are summarised below.
Note A
Note B
Rs.679,006,56ylsuoiverp detroper sa 9002 hcraM ts13 dedne raey eht rof tiforP
)988,341,6(xaT deddA eulaV lamroN rof noisivorp rednu rof tnemtsujdA Profit for the year ended 31st March 2009 restated 59,457,087
The Notes to the Financial Statements from pages 105 to 130 form an integral part of these Financial Statements.
The Company agreed with the Department of Inland Revenue when settling the pending assessments on VAT on Financial Services and Normal VAT
according to the Sec: 25c (1) of Value Added Tax (Amendment) Act No 8 of 2006, and the respective under provisions for same have been accounted
for retrospectively, in accordance with Sri Lanka Accounting Standards 10 - Accounting Policies, Changes in Accounting Estimates and Errors.
The under provision of Rs.25,337,284 and Rs.20,781,757 for Value Added Tax on financial services and for Normal Value Added Tax respectively
relating to periods prior to 1st April 2008 have been adjusted to opening retained earnings as at 1st April 2008.
The under provision of Rs.6,143,889 for Normal Value Added Tax relating to year ended 31st March 2009 has been adjusted to the profit for that year
and the restated profit for the year ended 31st March 2009 is as follows.
Figures in brackets indicate deductions.
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Senkadagala Finance Company LimitedCash Flow Statement
For the year ended 31st March 2010 2009Rs. Rs.
Cash flows from operating activitiesInterest and commission receipts 1,451,559,985 1,560,124,313
Interest payments (845,696,048) (931,903,957)
Recoveries of bad debts 9,460,879 1,512,956
Other operating income 82,488,138 78,011,150
Operating expenditure (75,748,318) (110,483,112)
Cash payments to employees and suppliers (320,377,850) (299,610,467)
Operating profit before changes in operating assets and liabilities (Note A) 301,686,786 297,650,883
(Increase) / decrease in operating assetsInvestments in Government securities (19,842,105) (49,403,440)
Funds advanced to customers 55,646,577 (141,093,725)
Advances and receivables (7,640,980) 58,827,739
Deferred expenses (5,264,139) (12,918,526)
Trade and other receivables 74,182,854 (72,569,060)
97,082,207 (217,157,012)
Increase / (decrease) in operating liabilitiesDeposits from customers 696,327,072 460,835,904
Gratuity Paid (2,606,693) 317,625
Rentals received in advance (6,397,941) (28,590,536)
Other liabilities 56,480,496 (129,887,404)
743,802,934 302,675,589
Net cash generated from operating activities before income tax 1,142,571,927 383,169,460
Taxes paid (32,556,218) 3,071,528
Net cash generated from operating activities 1,110,015,709 386,240,988
Cash flows from investing activitiesDividend receipts 1,032,788 575,725
Purchase of dealing securities (1,462,265) -
Purchase of property, plant and equipment (84,319,229) (114,212,622)
Purchase of intangible assets (19,362,958) (2,780,000)
Proceeds from sale of property, plant and equipment 6,226,500 9,532,000
Net cash used in investing activities (97,885,164) (106,884,897)
Cash flows from financing activitiesSecuritization loans obtained 1,005,723,000 1,251,489,074
Unlisted Debentures issued 350,000,000 240,000,000
Repayment of securitization loans (1,978,424,145) (1,771,617,865)
Redemption of listed debenture (100,000,000) (150,000,000)
Dividends paid (35,966,275) (32,129,858)
Net cash used in financing activities (758,667,420) (462,258,649)
Cont…..
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedCash Flow Statement Continued
For the year ended 31st March 2010 2009Rs. Rs.
Net increase / (decrease) in cash and cash equivalents 253,463,124 (182,902,558)
Cash and cash equivalents at the beginning of the year 234,523,962 417,426,520
Cash and cash equivalents at the end of the year 487,987,086 234,523,962
Reconciliation of cash and cash equivalents474,744,632482,792,694sdnuf mret trohs dna hsaC
)215,329,1()891,013,8(tfardrevo knaB
487,987,086 234,523,962
(Note A)Reconciliation of operating profit
795,676,111897,515,231xat emocni erofeb tiforP
)527,575()887,230,1(sdnediviD
Provision for bad debts 41,201,817 86,935,188
General provision for bad debts 7,600,000 -
Loans written-off 2,266,787 -
Write-off of receivables on insurance premium and search fees 9,051,212 -
239,837,72tnemriapmi rof noisivorP 12,540,095
Reversal of specific provision on repossessed stocks (4,387,465) -
031,024,07648,784,87noitaicerpeD
547,204845,720,4ytiutarg gniriter rof noisivorP
)479,103,5()065,027,1(selcihev rotom fo lasopsid no tiforP
728,355,12956,739,5seef larutcurts fo noitazitromA
301,686,786 297,650,883
Figures in brackets indicate deductions.
The Notes to the Financial Statements from pages 105 to 130 form an integral part of these Financial
Statements.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
1. Corporate information
1.1 Domicile and legal form
1.2 Principal activities and nature of operations
1.3 Number of employeesThe number of employees of the Company at the end of the year was 213 (2009 – 212).
1.4 Responsibility for Financial Statements
*
*
*
*
* Notes to the Financial Statements comprising Accounting Policies used and other Notes.
1.5 Parent Enterprise and Ultimate Parent EnterpriseThe Company is a subsidiary of E.W.Balasuriya and Company (Private) Limited, which is
incorporated and domiciled in Sri Lanka.
An Income Statement providing the information on the financial performance of the Company
for the year under review.
A Balance Sheet providing information on the financial position of the Company at the end of
the year under review.
A Statement of Changes in Equity providing the information on the changes in shareholders’
equity during the year under review.
A Cash Flow Statement providing information on the cash and cash equivalents generating
ability of the Company and the utilisation of those cash flows.
Senkadagala Finance Company Limited is a limited liability company domiciled in Sri Lanka
incorporated under the Companies Ordinance, No 51 of 1938 on December 29, 1968 and
registered under the Finance Companies Act No.78 of 1988. Its registered office is situated at
No. 267, Galle Road, Colombo 3. The company re – registered under the Companies Act, No.
7 of 2007.
As a registered finance company, it is supervised by the Department of Supervision of Non-
Bank Financial Institutions of the Central Bank of Sri Lanka.
The Board of Directors is responsible for the preparation and presentation of the financial
statements of the Company in accordance with the provisions of the Companies Act, No. 7 of
2007 and Sri Lanka Accounting Standards.
The financial statements of Senkadagala Finance Company Ltd for the year ended 31st March
2010 were authorised for issue by a resolution of the Board of Directors on 26th
July, 2010.
These financial statements include the following components:
The principal lines of business of the Company can be broadly classified under two categories
– fund-based and fee-based. The fund-based services include finance leasing, hire purchase
finance, trade loans and pledge loans. The fee-based services are insurance brokering, vehicle
valuation, etc.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies
2.1 General Policies
2.1.1 Basis of Preparation
Statement of Compliance
2.1.1(a)
2.1.1(b)
2.1.1(c) Significant Accounting Judgments, Estimates and Assumptions
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised, if the
revision affects only that period or in the period of the revision and future periods as well, if
the revision affects both current and future periods.
Revisions to accounting estimates are dealt with in accordance with Sri Lanka Accounting
Standard No. 10 Accounting Policies, Changes in Accounting estimated and errors. (Revised
2005)
The Balance Sheet, and the related Statements of Income, Changes in Equity and Cash Flow
together with the Accounting Policies and Notes (Financial Statements) of Senkadagala
Finance Company Ltd as at 31st March 2010 and for the year then ended, comply with the Sri
Lanka Accounting Standards laid down by the Institute of Chartered Accountants of Sri Lanka
and the requirements of the Companies Act, No. 7 of 2007, Finance Companies Act, No 78
of 1988 and Finance Leasing Act No, 56 of 2000 and the amendments to these acts.
Basis of Measurement
The financial statements of the Company are prepared under the historical cost convention
basis. No adjustments have been made for inflationary factors affecting the financial
statements.
The Company did not adopt any inappropriate accounting treatments which do not comply
with the requirements of Sri Lanka Accounting Standards and other laws and regulations
governing the preparation and presentation of financial statements.
Presentation and Functional Currency
The financial statements of the Company are presented in Sri Lankan Rupees, which is the
Company’s functional currency.
The preparation of financial statement in conformity with SLAS requires the management to
make judgments, estimates and assumptions that influence the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Judgments and
estimates are based on historical experience and other factors, including expectations that are
believed to be reasonable under the circumstances and assumptions based on such knowledge
and expectations of future events. Hence actual experience and results may differ from these
judgments and estimates.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies(Contd)
2.1 General Policies (Contd)
2.1.2 Going Concern
2.1.3 Change to the Accounting Policies
2.1.4
2.1.5
When preparing the financial statements, the directors have made an assessment of the ability of the
constituents of the Company to continue as a going concern in the foreseeable future and they do not
foresee a need for liquidation or cessation of trading, taking into account all available information
about the future.
• Sri Lanka Accounting Standard No 44 ‘Financial Instrument : Presentation’• Sri Lanka Accounting Standard No 45 ‘Financial Instruments: Recognition and Measurement’
In order to comply with the requirement of these Accounting Standards, the Company has duly
planned the standards implementation program, especially considering the complex nature of the
effect of these Accounting Standards.
Post-Balance Sheet Events
All material post Balance Sheets events have been considered and appropriate adjustments/
disclosures have been made in the Accounts, wherever necessary.
There were no changes to the Accounting Policies adopted by the Company during the year under
review. However, the following two new Accounting Standards have been issued by the Institute of
Chartered Accountant of Sri Lanka and are effective for the accounting period on the dates specified
below.
Comparative Information
Comparative information including quantitative, narrative and descriptive information is disclosed in
respect of the previous period for all amounts reported in the financial statements in order to enhance
the understanding of the current period’s financial statements and to enhance inter-period
comparability.
These two standards become effective from January 1, 2011. SLAS 44 and SLAS 45 together
provide comprehensive guidance on identification, classification, measurement and presentation of
financial instruments (including derivatives), financial assets, financial liabilities and equity
instruments.
The Accounting Policies adopted by the Company are consistent with those of the previous financial
year as permitted by Sri Lanka Accounting Standard No. 3 (Revised 2005) on ‘Presentation of
Financial Statements’. However, when the presentation or classification of items in the Financial
Statement is amended, comparative amounts are also re-classified to confirm with the current year
presentation.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies(Contd)
2.1 General Policies (Contd)
2.1.6 Taxation
Tax expense comprises current tax and deferred tax.
(a) Current Taxes
(b) Deferred Taxation
2.2
2.2.1 Cash and Short –Term Funds (Cash and Cash Equivalents)
Cash and short-term funds include cash in hand, balances with banks, placements with banks
and money at call at short notice. They are brought in to the financial statement at the face
value.
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax assets to be utilised.
Provision for taxation is based on the elements of income and expenditure as reported in the
financial statements and computed in terms of the provisions of the Inland Revenue Act, No.
10 of 2006 and amendments thereto, at the rate of 35% (2009 – 35%).
Deferred tax is provided on temporary differences as at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised on all temporary differences.
Assets and Bases of their Valuation
Deferred tax assets are recognised for all deductible differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry forward of unused
tax credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rate that are expected to apply in the
year when the assets are recognised, or the liabilities are settled, based on tax rates and tax
laws that have been enacted or substantially enacted at the balance sheet date.
Current tax and deferred tax relating to items recognised directly in equity are also recognised
in equity and not in the income statement.
Deferred tax assets and liabilities are set off if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.2
2.2.2 Government Treasury Bills
2.2.3 Investments
(a) Dealing Securities
(b) Fall in value of Investments
(c)
(d)
2.2.4
2.2.4(a)
2.2.4(b)
Investment Securities
Unrealised losses on revaluation of dealing securities at the lower of cost and market value are
taken to the Income Statement in accordance with Sri Lanka Accounting Standard No. 22,
Accounting for Investments.
Investments in associates are not accounted under equity method in the Company’s financial
statements in accordance with the exemptions prescribed by Sri Lanka Accounting Standard
No. 27, Investments in Associates.
Investment securities are stated at cost in the Company’s financial statements in accordance
with Sri Lanka Accounting Standard No. 22, Accounting for Investments.
Assets and Bases of their Valuation (Contd)
Investments in Government Treasury Bills are acquired or incurred principally for the purpose
of adherence to Central Bank regulation and sold or held as part of a portfolio that is managed
for short term profit, Treasury Bill Repurchase Agreements are started at cost and any interest
accrued up to the balance sheet date is recognised in the income statement.
These are marketable securities acquired and held with the intention of resale over a short
period of time. Such securities are recorded at the lower of cost and market value on an
aggregate portfolio basis.
Investments in Associates
Loans and Advances to Customers (Lease, Hire Purchase, Loans and advances andtrade and other receivable)
Rental receivable on lease assets
Hire purchase assets
Assets leased to customers which transfer substantially all the risks and rewards incidental to
ownership other than the legal title are accounted for as finance leases in accordance with Sri
Lanka Accounting Standard, No. 19 (Revised 2005) on Lease and reflected in the balance
sheet after eliminating unearned interest income, initial rental received and provision for
doubtful debts.
Assets hired to customers under hire purchase agreements, which transfer all the risks and
rewards incidental to ownership as well as legal title at the end of such contractual period are
classified as hire purchase receivables. Such assets are accounted for in a similar manner as
those of finance lease.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies(Contd)
2.2
2.2.4(c) Loans and advances and trade and other receivables
2.2.5 Provision for loan losses
2.2.6 Property, Plant and Equipment
(a) Basis of Recognition and Measurement of Property, Plant & Equipment
(b) Depreciation
Property, plant and equipment are recorded at cost of purchase or construction or valuation
together with any incidental expenses thereon. These assets are stated at cost less accumulated
depreciation, which is provided for on the basis specified below.
The provision for depreciation is calculated by using the straight line method on the cost or
valuation of property, plant & equipment other than freehold land, in order to write-off such
amounts over the estimated useful economic lives of these assets in equal installments. The
depreciation charges are determined separately for each item of property, plant & equipment
and begin to depreciate when it is available for use.
Loans and advances and trade and other receivable are stated in the balance sheet net of
provision for bad and doubtful debts and interest in suspense.
Assets and Bases of their Valuation (Contd)
Provision for possible loan losses is made on the basis of a continuous review of all advances
to customers in accordance with the Finance Company Direction, No. 3 of 2006 (Provision for
bad and doubtful debt) issued by the Central Bank of Sri Lanka and in accordance with Sri
Lanka Accounting Standard No. 33, Revenue Recognition and Disclosure in the Financial
Statements of Finance Companies. Accordingly, specific provisions have been made as
follow:
Property, plant and equipment are stated at cost or revalued amounts less accumulated
depreciation and accumulated impairment losses, if any. Subsequent expenditure incurred for
the purpose of acquiring, extending or improving assets of a permanent nature by means of
which to carry on the business or to increase the earning capacity of the business is treated as
capital expenditure. The carrying values of property, plant and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying value may not
be recoverable.
All advances in arrear for a period of 6 to 12 months 50%All advances in arrears for over 12 months 100%
In addition, wherever it is considered prudent, further provisions are made on specifically
identified loans and advances.
The Company applies the requirements of Sri Lanka Accounting Standard No. 18, (Property,
Plant & Equipment)
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies(Contd)
2.2
The estimated useful lives of the different types of assets are as follows:
Buildings 5% per annum (20 years)
2.2.7 Intangible Assets
2.2.7.1 Basis of Recognition
2.2.7.2
2.2.7.3 Computer Software
2.3 Liabilities and provisions
2.3.1 Commitments and contingencies
2.3.2
2.3.3 Borrowings
Generators 12.5% per annum (8 years)Interior construction 20% per annum (5 years)
An intangible asset is recognised if it is probable that future economic benefits that are attributable to
the asset will flow to the entity and the cost of the asset can be measured reliably in accordance with
Sri Lanka Accounting Standard No. 37, Intangible Assets. Accordingly, these assets are stated in the
balance sheet at cost less accumulated amortization and accumulated impairment loss.
Deposits from Customers
All discernible risks are accounted for in determining the amount of other liabilities.
The amortization expense on intangible assets is recognised in the income statement in the expense
category consistent with the function of the intangible assets.
Computer software is stated at cost less accumulated amortization and any accumulated impairment
loss. Amortization is done at 12% per annum of cost.
Assets and Bases of their Valuation (Contd)
Office equipment 10% per annum (10 years)Computers and other equipment 25% per annum (4 years)Furniture and fittings 10% per annum (10 years)
Amortization
Motor vehicles 16.67% per annum (6 years)
Deposits from customers include non-interest bearing deposits, savings deposits, term deposits, and
certificate of deposit. They are stated in the balance sheet at the amount payable. Interest paid and
payable on these deposits is charged to the income statement.
Borrowings include revolving facilities and assets securitization facilities. Balances payable are stated
in the balance sheet under Securitization Loan. Interest paid and payable on these borrowings is
charged to the income statement.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.3 Liabilities and provisions (Contd)
2.3.4 Debentures
2.3.5 Retirement benefits obligations
2.3.5.1 The principal actuarial assumptions used in determining the cost are;
(i) Retirement age - normal retirement age, or age on valuation date, if greater
(ii)
(iii)
(iv) Rate of interest - 11%
2.3.5.2 The liability is not externally funded.
The actuarial gain or losses are recognised in the income statement in the period in which they
arise.
Up to 31st March 2008, provision had been made for retirement gratuities based on the number of
years of service multiplied by half of the last month’s salary of those employees.
Payment of benefit – Gratuity is assumed to be paid immediately provided the participant has 5
years of service credit at the time of departure. It is also assumed that all participants who are
eligible for a commuted pension will choose it in lieu of statutory gratuity payments.
Salary scale - annual increase of 10%
These represent the funds borrowed by the Company for short term funding requirements. These
are recorded in the balance sheet at the cash value to be realised at settlement. Interest paid and
payable on these borrowings is charged to the income statement.
Retirement benefit obligations have been provided for using the actuarial valuation method in
accordance with SLAS 16 (Revised 2006) Employee Benefits.
The service of a qualified actuary is obtained to determine the value of the define benefit
obligation for the company. The valuation is done on an ongoing basis and uses a Projected Unit
Credit Method, which projects the current data using actuarial assumptions as specified in the
note 2.3.5.1 below and calculates a projected benefit at the participant’s assumed retirement date.
The actuarial value of this projected benefit is then valued and discounted to the valuation date to
derive the current liability.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies(Contd)
2.4 Income statement
2.4.1 Revenue Recognition
(a) Lease
(b) Hire Purchase
(c) Loans & Advances
(d) Interest Income on Investment in Government Securities
(e)
(f) Dividend Income
(g) Recovery of Bad debts
(h) Commission Income
Recognition of commission income on insurance business arranged by the Company is on a
cash basis.
Interest receivable is taken to the income statement on an accrual basis, based on a pattern
reflecting a constant periodic rate of return. Interest on Government securities is grossed up
with the notional tax credit available under the Inland Revenue Act No. 10 of 2006.
Interest Income on deposits with banks
Interest receivable is taken to the income statement on an accrual basis.
Dividend income is recognised in the income statement on the date that the Company’s right to
receive payment is established.
In accordance with Sri Lanka Accounting Standard No. 19 (Revised 2005) on Leases,
recognition of finance income on leasing is accounted based on a pattern reflecting a constant
periodic rate of return on capital outstanding. The excess of aggregate rentals receivable over
the cost of leased assets constitutes the total unearned interest income at the commencement of
the contract. We recognised the interest income from unearned income on the lease on an
accrual basis over the term of the lease in proportion to the remaining balance of the lease.
However, the recognition of income ceases when the recovery of principal or interest is in
arrear for six months or more. Thereafter, interest income is accounted on a cash basis.
Recognition of interest income from hire purchase facilities is similar to that of leases, which
recognises interest income based on a pattern reflecting a constant rate of return on the capital
outstanding.
Recognition of interest income from loans and advances is similar to that of leases, which
recognises interest income based on a pattern reflecting a constant rate of return on the capital
outstanding.
The recovery of bad debts is recognised as and when the debts are recovered.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies(Contd)
2.4 Income statement (Contd)
(i) Profit/loss from the sale of property, plant and equipment
(j) Profit on sales of seized vehicles stocks
2.5
2.6 Cash Flow Statement
2.7
Inter-segment transactions are based on fair market prices.
Segment results, assets and liabilities include those items directly attributable to a segment as
well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly
of head office expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment
assets that are expected to be used for more than one accounting period.
Profits and losses arising from the sale of property, plant and equipment are recognised in the
period in which the sale occurs.
Profits earned and losses incurred on the sales of repossessed vehicle stocks are accounted in
the income statement based on net realisable value.
Expenditure Recognition
In terms of Sri Lanka Accounting Standard 33 – Revenue Recognition and Disclosure in the
Financial Statements of Finance Companies, interest and other expenses payable are
recognised on an accrual basis. All the expenditure incurred in the running of our business and
maintaining the property, plant & equipment in a state of efficiency has been charged to
income in arriving at the profit for the year.
The cash flow statement has been prepared by using the “Direct Method” in compliance with
SLAS-9, Cash Flow Statement. Cash and cash equivalents comprise mainly of cash balances
and call deposits. Cash and cash equivalents are presented net of bank overdrafts for the
purpose of the cash flow statement.
Segment Reporting
In accordance with Sri Lanka Accounting Standard No. 28 on Segment Reporting, segmental
information is presented in respect of the Company. The segments comprise of financing and
investing.
A segment is a distinguishable component of the Company that is engaged in providing
services (Business Segment).
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
For the year ended 31st March 2010 2009Note Rs. Rs.
3 IncomeInterest income 4 1,451,559,985 1,560,124,313
Other operating income 6 94,702,365 85,401,805
1,546,262,350 1,645,526,118
4 Interest income Finance leases 281,201,213 396,445,864
Hire purchases 875,595,729 880,312,438
Loans and advances 18,986,608 15,970,974
Non - Hire purchases 33,553,422 51,962,428
Fixed deposit loans 4,027,350 2,730,313
Money market investments 45,201,087 29,952,065
Treasury bills 4.1 22,046,784 22,671,729
Default charges 170,947,792 160,078,502
1,451,559,985 1,560,124,313
4.1
5 Interest expensesFixed deposits 267,088,896 190,368,595
Certificate of deposits 581,528 3,251,643
Savings deposits 4,978,224 3,604,639
Securitization loans 393,462,948 541,003,018
Debentures 151,254,067 123,845,605
Corporate loans 28,330,385 69,830,457
845,696,048 931,903,957
6 Other operating incomeFinance charges 16,696,746 15,892,498
Commission income 30,912,105 28,576,214
Bad debts recoveries 9,460,879 1,512,956
Dividend income 1,032,788 575,725
Interest on insurance 19,441,045 14,724,569
Sundry income 2,033,311 667,390
Legal fees 10,905,458 10,738,165 Rent income 1,760,000 1,760,000 Inspection fees 689,473 765,528
Profit on disposal of motor vehicles 1,720,560 5,301,974
Discounting cheques 50,000 -
Investment income - 3,274,886
Staff bonus over provision - 1,611,900
94,702,365 85,401,805
7 Operating expensesOperating expenses includes the followings :
Internal Auditors' remuneration 4,614,790 3,832,923
External Auditors' remuneration - Audit related 450,000 386,062
- Non audit related 437,400 569,712
Amortization of securitization loan structuring fee 5,937,659 21,553,827
Legal expenses 5,783,218 3,339,375
Section 137 of the Inland Revenue Act. No. 10 of 2006 provides that a company which derives interest income
from the secondary market transactions in Government Securities would be entitled to a notional tax credit
(being one ninth of net interest income), provided such interest income forms part of the statutory income of
the Company for that year of assessment.
Notional tax credit for withholding tax on government securities on secondary market transactions.
Accordingly, the net interest earned by the Company from the secondary market transactions in Government
securities (Treasury bills) for the year has been grossed up in the financial statements, and the resulting
notional tax credit amounts to Rs.2,204,678 (2009 - Rs.2,267,173) for the Company.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
For the year ended 31st March 2010 2009Note Rs. Rs.
8 Personnel costsSalaries and wages 95,127,177 89,585,482
Contribution to Employees' Provident Fund 11,307,300 10,791,996
Contribution to Employees' Trust Fund 2,823,844 2,697,999
Retirement benefit obligations 8.1 4,027,548 402,745
Other personnel costs 2,638,217 4,331,361115,924,086 107,809,583
8.1 Retirement benefit obligationsAmount recognised in the income statement Current service cost 1,815,415 1,616,001
Interest cost 2,212,131 1,770,900
Recognition of transitional liability/(asset) - (2,984,156)4,027,548 402,745
9 Other operating expensesAdministrative expenses 40,043,338 21,271,048
Establishment expenses 117,139,904 109,359,756
Selling expenses 89,821,627 109,319,495
247,004,869 239,950,299
10 Loan losses and provisionsDirect write off 2,266,787 -
Specific Provision for bad and doubtful debts on loans and advances 41,201,817 86,935,188
General provision for debtors recoverable on repossessed stocks 7,600,000 -
specific provision for debtors recoverable on repossessed stocks 27,738,932 12,540,095
Reversal of specific provision on repossessed stocks (4,387,465) -
Loss on sale of repossessed stocks 14,875,725 62,036,439
89,295,796 161,511,722
11 Income tax expenseCurrent tax expense 11.1 77,806,441 27,373,177
Deferred tax charge / (reversal) for the year 5,727,795 24,846,333
83,534,236 52,219,510
11.1 Reconciliation of effective tax rateNet profit before tax 132,515,798 117,820,486
Add - Disallowable expenses 227,029,929 224,051,529
Less - Allowable expenses (142,108,421) (150,052,773)
Add / (Less) - Adjustments 35,292,134 (74,971,066)
Loss from lease business - 1,695,327
Business loss claimed during the year (33,710,605) (41,490,226)
Taxable income 219,018,835 77,053,277
Income Tax at 35% 76,656,592 26,968,647
Social Responsibility Levy @ 1.5% of income Tax 1,149,849 404,530
Income Tax on profit for the year 77,806,441 27,373,177
Effective tax rate 59% 23%
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
For the year ended 31st March 2010 2009Rs. Rs.
12 Basic earnings per share
Profit attributable to ordinary shareholders of the Company (Rs.) 48,981,562 59,457,087
Weighted average number of ordinary shares 21,347,200 21,347,200
Basic earnings per share (Rs.) 2.29 2.79
13 Dividend per share
1st interim - (2008/09 - Rs.0.60) - 12,808,320
2nd interim Rs.0.90 19,212,480 -
Final Rs.0.80 - (2008/09 - Rs.0.90) 17,077,760 19,212,480
36,290,240 32,020,800
Dividend per share (inclusive of proposed dividends) 1.70 1.50
Basic earnings per share have been calculated by dividing the net profit for the period attributable to the
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the year.
Dividends per share is calculated by dividing the proposed and/or paid dividend to ordinary shareholders
of the Company, by the number of ordinary shares in issue.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
As at 31st March 2010 2009Note Rs. Rs.
14 Cash and short term fundsCash and bank balances 14.1 343,263,464 123,112,241
Commercial Bank - Money market 103,033,820 113,335,233
Commercial Bank - Repo 50,000,000 -
496,297,284 236,447,474
14.1 Cash and bank balancesCommercial Bank Savings A/c 43,857 43,857
Commercial Bank - Kandy # 1 - 16,935,672
Commercial Bank - Kandy # 2 6,951,624 7,325,396
Commercial Bank - Kandy # 3 730,328 730,328
Commercial Bank - Kandy # 4 129,967 278,479
Commercial Bank # 6 3,946,180 1,054,319
Commercial Bank corporate branch 974,674 974,674
HSBC 954,554 32,670,314
Hatton National Bank - Kandy 1,587,374 2,631,188
Hatton National Bank - Colombo 30,551 3,327,992
Sampath Bank 10,453,027 -
Standard Chartered Bank 15,276 15,776
Nation Trust Bank - 11,660
Bank of Ceylon 58,406 56,369
Bank of Ceylon 31,100 105,200
Pan Asia Bank 42,821 20,129,934
Union Bank 94,202 8,020,905
ICICI Bank 8,402,459 15,500,000
Cash value stamps 30,449 52,159
Encashment floats 3,482,320 3,410,434
Cash in hand 14,351,398 11,217,319
Savings ATM withdrawals (9,786,829) (1,379,734)
Short term deposits 300,739,726 -
343,263,464 123,112,241
15 Dealing securitiesQuoted shares 15.1 12,694,467 11,232,202
Debentures - Commercial Bank - 13% (50, 000 Debentures Rs.100/- each) 5,000,000 5,000,000
17,694,467 16,232,202
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st MarchNo. of Cost Market No.of Cost Market
Shares Value Shares ValueRs. Rs. Rs. Rs.
15 Dealing securities (Continued)15.1 Quoted shares
Bank, Finance and InsuranceCentral Finance Company PLC 4,333 243,207 1,689,870 4,333 243,207 680,281.00
National Development Bank 384 500 80,640 384 500 34,176
Commercial Bank of Ceylon PLC 208 72,450 41,964 208 72,450 16,484
Beverage, Food and TobaccoCeylon Tobacco PLC 3,100 142,017 775,000 3,100 142,017 297,600
Hotels and TravelsAitken Spence PLC 33 3,355 45,334 33 3,355 10,395
Investment TrustNational Equity Fund 131,400 600,925 2,986,759 131,400 600,925 1,405,974
Namal Acuity Value Fund 25,000 1,250,000 1,325,000 - - -
ManufacturingRoyal Ceramics Lanka PLC 10 273 1,130 10 273 273
Lanka Tiles Ltd. 250 7,175 21,938 250 7,175 12,250
Diversified HoldingsJohn Keells Holdings PLC 1,937 13,800 356,408 1,937 13,800 121,547
Orient Fund (Portfolio Investments) 1,000,000 10,212,265 28,254,166 1,000,000 10,000,000 13,582,712
TradingLanka Indian Oil Corporation PLC 5,500 148,500 100,375 5,500 148,500 88,000
Total cost and market value 12,694,467 35,678,584 11,232,202 16,249,692
Senkadagala Finance Company LimitedNotes to the Financial Statements
2010 2009
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As at 31st March 2010 2009Note Rs. Rs.
16 Investment securities (Unquoted)Senkadagala Hotels Limited 16.1 13,957,555 13,957,555
Credit Information Bureau of Sri Lanka 8,200 8,200
Finance Houses Consortium (Pvt) Ltd. 200,000 200,000
14,165,755 14,165,755
16.1
17 Loans and advancesNet investment in lease advancesLease rental receivable after one year from balance sheet date 769,522,608 1,249,369,440
Unearned income (216,741,455) (365,424,067)
552,781,153 883,945,373
Lease rental receivable within one year from balance sheet date 470,916,966 729,002,644
Unearned income (111,816,717) (213,223,649)
359,100,249 515,778,995
Net investment in hire purchaseHire purchase rental receivable after one year from balance sheet date 2,842,393,528 2,578,660,040
Unearned income (867,343,312) (809,743,810)
1,975,050,215 1,768,916,230
Hire purchase rental receivable within one year from balance sheet date 1,638,884,446 1,504,639,003
Unearned income (416,044,443) (472,482,646)
1,222,840,004 1,032,156,357
Net investment in non hire purchaseNon hire purchase rental receivable after one year from balance sheet date 76,803,639 126,026,413
Unearned income (23,705,223) (40,112,358)
53,098,416 85,914,054
Non hire purchase rental receivable within one year from balance sheet date 73,213,860 73,535,965
Unearned income (17,679,243) (23,405,419)
55,534,617 50,130,547
Net investment in loans Loan rental receivable after one year from balance sheet date 74,865,647 57,127,939
Unearned income (29,663,835) (20,774,219)
45,201,812 36,353,719
Loan rental receivable within one year from balance sheet date 31,149,923 33,333,950
Unearned income (10,220,428) (12,121,684)
20,929,495 21,212,267
Loans against fixed deposits 15,643,319 15,559,546
Debtors recoverable on repossessed stocks 165,789,373 182,708,515
Specific Provision for bad and doubtful debts on loans and advances 17.1 (31,111,099) (50,550,238)
General provision for debtors recoverable on repossessed stocks (7,600,000) -
Specific provision for debtors recoverable on repossessed stocks 17.2 (27,738,933) (12,540,095)
Total loans and advances 4,399,518,621 4,529,585,270
Senkadagala Finance Company LimitedNotes to the Financial Statements
The Company holds 32.27% approximately of the issued share capital of the Senkadagala Hotels Limited. However
the Company has not accounted this under equity method as per Sri Lanka Accounting Standards 27 - Investments in
associates. However consolidated financial statements could be obtained from the ultimate parent of the Senkadagala
Hotels Limited , E.W.Balasuriya and Company (Private) Limited, incorporated and domiciled in Sri Lanka under the
Companies Act No.07 of 2007.Its registered office and the principal place of business is located at No 267,Galle
road,Colombo 03.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2010 2009Note Rs. Rs.
17 Loans and advances (Continued)17.1 Movement in specific provision for bad and doubtful debts on loans and advances
Balance at the beginning of the year 75,084,647 109,765,072 Provision for the year 41,201,817 86,935,188 Bad debts written-off (85,175,365) (121,615,613)
Balance at the end of the year 31,111,099 75,084,647
Provision for bad and doubtful debts on loans and advances 31,111,099 50,550,238
Provision for bad and doubtful debts on trade & other receivables - 24,534,409
31,111,099 75,084,647
17.2 Movement in specific provision for debtors recoverable on repossessed stocksBalance at the beginning of the year 12,540,095 54,832,287
Provision made during the year 27,738,932 12,540,095
Reversal of specific provision on repossessed stocks (4,387,465) -
Loss incurred during the year (8,152,629) (54,832,287)
Balance at the end of the year 27,738,933 12,540,095
18 Trade and other receivablesRentals in arrears 212,756,704 271,050,685
Provision for bad and doubtful debts 17.1 - (24,534,409)
212,756,704 246,516,276
Staff debtors 7,275,423 6,046,856
Discounting of cheques 490,000 490,000
Insurance 64,042,377 53,974,698
Advances allowed to car sales 7,768,649 10,006,524
Search fees and seizing charges receivables 1,924,251 1,687,324
Western union MMBL 1,022,093 294,232
Goods and Service Tax recoverable 11,020,826 11,020,826
Value Added Tax recoverable 18.1 (6,489,168) 31,765,601
Advance payments 2,026,235 14,147,266
Sundry debtors 3,634,603 3,705,244
305,471,993 379,654,847
18.1 Value Added Tax recoverable
The restatement of Value Added Tax recoverable is summarised below.
Balance as reported previously 84,028,531
Under provision of VAT on financial services prior to 1st April 2008 (25,337,284)
Under provision of Normal Value Added Tax prior to 1st April 2008 (20,781,757)
Under provision of Normal VAT (6,143,889)
Balance as at the end of the year (restated) 31,765,601
The Company agreed with the Department of Inland Revenue when settling the pending assessments on VAT on
Financial Services and Normal VAT according to the Sec: 25c (1) of Value Added Tax (Amendment) Act No 8 of
2006, and the respective under provisions for same have been accounted for retrospectively, in accordance with Sri
Lanka Accounting Standards 10 - Accounting Policies, Changes in Accounting Estimates and Errors as described in
Statement of Changes in Equity .
Senkadagala Finance Company LimitedNotes to the Financial Statements
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2010 2009Rs. Rs.
19 Advances and receivablesDeposits 2,122,284 1,042,284
Pre - paid rent 17,318,520 20,310,923
Advance company tax recoverable 6,125,619 6,125,619
Advance paid for fixed assets 6,788,447 -
Cash cover on securitization loans 19,206,154 16,441,218
51,561,024 43,920,044
20 Deferred expenses Balance at the beginning of the year 8,066,093 16,701,393
Paid during the year 5,264,139 12,918,527
Charged during the year (5,937,659) (21,553,827)
Balance at the end of the year 7,392,573 8,066,093
Senkadagala Finance Company LimitedNotes to the Financial Statements
Loan structuring fee paid for arranging loans, has been treated as a deferred expense and has been charged to
income statement over the period of repayment of loans.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2010
21 Property, plant and equipment
Cost As at Additions Disposals As at01.04.2009 31.03.2010
Rs. Rs. Rs. Rs.
Land and buildings 111,545,146 - - 111,545,146
Furniture and fittings 73,338,254 3,291,621 - 76,629,875
Office equipment 57,282,091 10,955,294 - 68,237,385
Air conditioner 18,912,653 5,906,203 - 24,818,856
Computer and accessories 76,494,421 20,389,863 715,171 96,169,113
Facsimile machine 790,483 103,000 - 893,483
Generator 31,030,000 1,390,500 - 32,420,500
Motor vehicles 142,770,527 27,888,160 7,521,927 163,136,760
Photostat machine 5,353,676 125,000 - 5,478,676
Fixtures and fittings 64,091,894 13,707,980 - 77,799,874
Printers 14,752,225 561,608 8,600 15,305,233
596,361,370 84,319,229 8,245,698 672,434,901
Accumulated depreciation As at Charge for the Charge on As at01.04.2009 Period Disposals 31.03.2010
Rs. Rs. Rs. Rs.
Buildings 7,936,485 940,165 - 8,876,650
Furniture and fittings 25,496,517 7,371,453 - 32,867,970
Office equipment 14,623,769 6,117,851 - 20,741,620
Air conditioner 11,505,374 3,675,226 - 15,180,600
Computer and accessories 63,982,819 9,088,571 713,171 72,358,219
Facsimile machine 343,336 71,657 - 414,994
Generator 9,657,975 3,929,679 - 13,587,654
Motor vehicles 41,289,002 25,328,812 3,017,986 63,599,828
Photostat machine 3,380,967 867,245 - 4,248,212
Fixtures and fittings 32,287,520 12,829,181 - 45,116,701
Printers 10,021,582 2,329,785 8,600 12,342,767
220,525,346 72,549,625 3,739,757 289,335,214
Net book value 375,836,024 383,099,687
22 Intangible assets 2010 2009Software programme Rs. Rs.
CostBalance at the beginning of the year 102,166,628 99,386,628
Additions during the year 19,362,958 2,780,000
Balance at the end of the year 121,529,586 102,166,628
AmortizationBalance at the beginning of the year 76,033,463 70,939,377
Charge for the period 5,938,221 5,094,086
Balance at the end of the year 81,971,684 76,033,463
Net book value 39,557,902 26,133,165
Senkadagala Finance Company LimitedNotes to the Financial Statements
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As at 31st March 2010 2009Note Rs. Rs.
23 Deposits from customersSaving deposits 66,944,059 41,177,709Certificate of deposits 23.1 68,966 13,913,207Fixed deposits 23.2 2,027,464,634 1,343,059,671
2,094,477,659 1,398,150,587
23.1 Certificate of depositsFace value 100,000 14,400,000Interest in suspense (31,034) (486,793)
68,966 13,913,207
23.2 Fixed depositsFixed deposits 1,951,821,251 1,278,096,084Accrued interest 75,643,383 64,963,587
2,027,464,634 1,343,059,671
24 Bank overdraftCommercial Bank - Kandy # 1 6,837,325 -Commercial Bank - Colombo # 5 1,430,932 1,923,512Nation Trust Bank 41,941 -
8,310,198 1,923,512
25 Assets securitization loansCommercial Bank Corporate Division 12,974,900 47,710,200
Hatton National Bank PLC 122,500,000 12,841,103
Commercial Bank of Ceylon PLC 198,072,581 499,635,336
Sampath Bank PLC 125,734,001 152,706,511
Capital Alliance 7,426,715 97,158,315
National Development Bank PLC 249,700,000 720,000,000
Nations Trust Bank PLC 154,959,404 35,937,001
Pan Asia Bank PLC - 135,504,711
Waldock Mackenzie 6,250,000 31,250,000
Union Bank PLC - 54,166,667
HSBC 30,000,000 95,555,556
Investec - 91,666,667
ICICI Bank PLC 89,729,999 166,950,680
Berkly 431,034,000 60,000,000
First Capital Treasuries Ltd. - 200,000,000
1,428,381,600 2,401,082,747
Securities pledged
26 Accrued expensesAudit fees 450,000 386,062Staff bonus payable 8,364,193 -Interest on debentures 67,998,514 56,163,833Securitization loan repayment 1,039,899 65,378,875Directors' fees (37,500) (37,500)VAT on financial services 3,132,764 -Nation Building Tax 132,771 -
81,080,641 121,891,270
Senkadagala Finance Company LimitedNotes to the Financial Statements
Lease and Hire Purchase aggregate portfolio amounting to Rs.4,249,761,665 have been pledged as security for
the above loans.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
As at 31st March 2010 2009Note Rs. Rs.
27 Accounts payableDebit tax 83,610 69,435 Dividend payable 1,339,578 1,015,613 Registrar of motor vehicles charges 2,512,842 475,069 Refundable deposit 372,000 2,168,000 Mortgage 197,425 182,299 Direct deposits 3,535,638 3,607,796 Stamp duty and E.S.C payable 7,682,667 11,652,966
15,723,760 19,171,178
28 Trade payablesAmount payable to car sales 932,203 1,166,667 NHP - payable (1,784,650) (1,784,650) XL - loan excess payment 51,170 29,061 W.H.T. on dividends (52,516) (3,118,913)W.H.T. on loan and debentures 2,225,641 1,212,003 Stock payable 102,659,178 21,228,442 Sundry creditors 18,045,128 2,281,036 Goods and Service Tax refund for buses 8,912 8,912
122,085,066 21,022,558
29 Current tax liabilitiesCurrent tax for the year 77,806,441 27,373,177Income tax payment - (87,671)Economic service charges (34,869,526) (43,537,781)Withholding tax on treasury bill interest (4,020,534) (721,709)W.H.T. on commission 631,698 68,445 W.H.T. on fixed deposits interest (7,978,849) (5,826,666)
31,569,230 (22,732,205)
30 Rentals received in advanceInitial payment of lease 1,632,450 12,286,660 Prepaid rentals 19,067,349 14,811,080
20,699,799 27,097,740
31 Retirement benefit obligationPresent value of defined benefit obligations 22,118,542 16,469,015
Unrecognised acturial loss 31.2 (4,486,905) (258,232)Net retirement benefit obligations 17,631,637 16,210,783
31.1 Movement of the retirement benefit obligationBalance at the beginning of the year 16,210,783 16,125,663
Retirement benefit expense for the year 4,027,547 402,745 Benefits paid during the year (2,606,693) (317,625) Balance at the end of the year 17,631,637 16,210,783
31.2 Unrecognised acturial lossPresent value of defined benefit obligations at the beginning of the year 16,210,784 13,141,507
Current service cost 1,815,415 1,616,001
Interest cost 2,212,131 1,770,900
Benefits paid during the year (2,606,693) (317,625)
Expected total present value of defined benefit obligations at the end of the year 17,631,637 16,210,783
Actual present value of defined benefit obligations at the end of the year 22,118,542 16,469,015
Acturial loss at the end of the year (4,486,905) (258,232)
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As at 31st March 2010
32 Debentures
Type Purpose of Interest Due/settle 2010 2009debenture rate (p.a) dates Rs. Rs.
Listed debentures2005/2009 Working capital Note 31.1 4 years from the - 100,000,000
requirement date of allotment
Unsecured, unlisted, redeemable debentures2006/2011 Working capital 5 years from the 259,000,000 259,000,000 2007/2012 requirement date of allotment 241,000,000 241,000,000
2008/2013 240,000,000 240,000,000
2009/2014 290,000,000 - 2010/2015 60,000,000 -
1,090,000,000 840,000,000
32.1 Unsecured redeemable listed debentures
The interest payable for the listed debentures are as follows.
Payment Period Rate
Annually Type A 14%Quarterly Type B W.A.TB (Net)+2.75%
33 Deferred tax liabilityBalance at the beginning of the year 65,240,401 40,394,068
Deferred tax charge / (reversal) for the year 5,727,795 24,846,333
Balance at the end of the year 70,968,196 65,240,401
33.1Deferred tax liabilityTax effect on capital allowances on P.P.E 18,384,900 18,239,340
Tax effect on capital allowances on leased assets 58,754,368 64,473,407
77,139,268 82,712,747
Deferred tax assetsTax effect on retirement benefit obligations (6,171,073) (5,673,774)
Tax effect on claimable tax losses - (11,798,572)
(6,171,073) (17,472,346)
Net deferred tax liabilities 70,968,196 65,240,401
Senkadagala Finance Company LimitedNotes to the Financial Statements
Deferred tax liabilities
16% (Fixed)
The Company issued 2,500,000 unsecured redeemable four year debentures of Rs. 100/- each to the value of Rs.
250 million during the year ended 31st March 2006. The Company has redeemed 60% of these listed debentures
during the year 2008/09 amounting Rs.150 M. and the balance of 40% has been redeemed during the year 2009/10
amounting Rs.100 M.
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As at 31st March 2010 2009Rs. Rs.
34 Stated capitalOrdinary shares21,347,200 ordinary shares 213,472,000 213,472,000
35 Statutory reserve fundBalance at the beginning of the year 83,536,033 79,536,033
Transfers during the year 3,000,000 4,000,000
Balance at the end of the year 86,536,033 83,536,033
36 General reserveBalance at the beginning of the year 638,018,392 603,018,392
Transfers during the year - 35,000,000
Balance at the end of the year 638,018,392 638,018,392
General reserve represents amount set aside by the Directors for future expansions and to meet any contingencies.
Senkadagala Finance Company LimitedNotes to the Financial Statements
The company's statutory reserve fund was created according to the Direction No. 1 of Central Bank Regulations of
2003.Accordingly the company has transferred Rs.3,000,000 (2009 - Rs.4,000,000/-) during the year ended 31st
March 2010 as required by the said Direction.
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For the year ended 31st March 2010
37 Related party transactions
37.1 Transactions with related entities
37.1.1 E.W.Balasuriya & Company (Pvt) Ltd
a)
2010 2009 Rs. Rs.
Colombo Branch 1,482,000 1,036,800
Aluthgama Branch 775,000 600,000
Negombo Branch 775,000 600,000
Wattala Yard 175,000 -
3,207,000 2,236,800
b)
37.1.2 Senkadagala Hotels Limited
The Company holds 32.27% approximately of the issued share capital of the Senkadagala Hotels Limited
37.2 Transactions with key management personnel (KMP) of the Company
37.2.1 Compensation of key management personnel2010 2009
Rs. Rs.
Short term employee benefits 3,209,000 3,030,000
38 Commitments and contingencies38.1 Capital expenditure commitments
2010 2009 Rs. Rs.
Approved but not contracted for - 2,700,000
Approved and contracted for 50,000,000 1,700,00050,000,000 4,400,000
38.2 Contingent liabilities
39 Event after the balance sheet date
The Company paid dividend of Rs.21,430,082 during the year ended 31st March 2010 (2009 - Rs.18,859,470) to
E.W.Balasuriya & Company (Pvt) Ltd.
There were no material events occurring after the Balance Sheet date that require adjustment to or disclose in the Financial
Statements.
According to Sri Lanka Accounting Standard 30 (Revised 2005) Related Party Disclosures, Key management personnel, are
those having authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly
members of the Board of Directors of the Company (including executive and non executive Directors), and of the Ultimate
Parent Company have been classified as key management personnel of the Company.
Capital expenditure approved by the Board of Directors for which provision has not been made in the financial statements
amounted to approximately the following|:
Senkadagala Finance Company LimitedNotes to the Financial Statements
Mr. E. W. Balasuriya, Mr. L. Balasuriya, Mr. R. Balasuriya, Dr. M. Balasuriya, Dr. A. Balasuriya and Mrs. L. Fernando
Directors of the Company are also the Directors of Senkadagala Hotels Limited.
There were no contingent liabilities as at the balance sheet date, which require adjustments to or disclosures in the Financial
Statements.
The Company operates its registered office in the premises of Senkadagala Hotels Limited, and has paid Rs.787,800 to
Senkadagala Hotels Limited, as rent for the year ended 31st March 2010. (2009 - Rs.787,800.)
The Company being a subsidiary company of E.W.Balasuriya & Company (Pvt) Ltd., Mr. E. W. Balasuriya, Mr. L.
Balasuriya, Mr. R. Balasuriya, Dr. M. Balasuriya, Dr. A. Balasuriya, Mrs. L. Fernando and Dr.Mrs. Gayathri Madan Mohan
Directors of the Company are also the Directors of E. W. Balasuriya & Company (Pvt) Ltd., with which the Company had the
following transactions.
The Company operate its following branch offices in the premises of E.W.Balasuriya & Company (Pvt) Ltd., and has paid
rent expenses for the respective branches as follows.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As at 31st March 2010
40 Maturity Analysis
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.03.2010
Interest Earning Assets Rs Rs Rs Rs Rs
Bank and Cash Balances 42,523,738 - - - 42,523,738
Deposits With Banks & other institution 453,773,546 - - - 453,773,546
Government Treasury bills 3,031,641 160,160,512 - - 163,192,153
Dealing securities - 17,694,467 - - 17,694,467
Investment securities - - - 14,165,755 14,165,755
Stock out on hire 559,499,748 1,433,919,404 1,525,708,316 1,100,423,280 4,619,550,748
Debtors 58,839,063 58,043,202 12,656,146 14,855,052 144,393,463
Total Interest Earning Assets 1,117,667,736 1,669,817,585 1,538,364,462 1,129,444,087 5,455,293,870
Non Interest Earning AssetsProperty, plant and equipment 422,657,589 422,657,589
Total Assets 1,117,667,736 1,669,817,585 1,538,364,462 1,552,101,676 5,877,951,459
Percentage (%) 31.03.2010 19.01 28.41 26.17 26.41 100.00
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.03.2010
Interest bearing liabilities Rs Rs Rs Rs Rs
Deposits 964,829,869 381,043,052 448,087,111 157,861,219 1,951,821,251
Certificate of deposits - 68,966 - - 68,966
Saving accounts - 66,944,059 - - 66,944,059
Bank overdraft 8,310,198 8,310,198
Assets Securitization Funds 1,042,000 881,995,501 545,344,099 - 1,428,381,600
Debentures - 40,000,000 470,000,000 580,000,000 1,090,000,000
Total Interest Bearing Liabilities 974,182,067 1,370,051,578 1,463,431,210 737,861,219 4,545,526,074
Non Interest Bearing Liabilities 129,536,090 195,296,285 - 110,569,337 435,401,712
Total Liabilities 1,103,718,157 1,565,347,863 1,463,431,210 848,430,556 4,980,927,786
Percentage (%) 31.03.2010 22.16 31.43 29.38 17.03 100
Shareholders' Funds - - - 897,023,673 897,023,673
Total Shareholders' Funds and Liabilitie 1,103,718,157 1,565,347,863 1,463,431,210 1,745,454,230 5,877,951,459
Senkadagala Finance Company Limited
An analysis of the total assets employed and the total liabilities of the Company as at 31st March 2010, based on the remaining
period from the balance sheet date to the respective contractual maturity dates is given below.
Notes to the Financial Statements
SEN
KA
DA
GA
LA F
INA
NC
E C
OM
PAN
Y LI
MIT
EDI N
TRO
DU
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RY
DO
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130
For t
he ye
ar en
ded 3
1st M
arch
41Se
gmen
t rep
ortin
g
s at 3
1st M
arch
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rev
enue
Inte
rest
281,
201,
213
396,
445,
864
875,
595,
729
880,
312,
438
56,5
67,3
8070
,663
,715
67,2
97,8
7155
,898
,680
-
-
-
-
1,
280,
662,
193
1,40
3,32
0,69
7
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196,
718,
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218,
773,
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216,
130,
671
183,
565,
232
-
-
776,
312,
967
626,
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578
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SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
131
ncome Statement
For the period ended 31st ecem er 2010 2009Note Rs. Rs.
Income 3 1,230,189,990 1,148,950,978
878,839,580,1553,521,111,14emocni tseretnI
)269,018,256()044,405,515(5sesnepxe tseretnI
619,721,334519,026,595emocni tseretni teN
001,210,36536,460,9116emocni gnitarepo rehtO
610,041,694055,586,417snoitarepo morf emocni teN
Operating expenses 7
)901,750,68()430,923,001(8stsoc lennosreP
)230,530,45()581,669,45(tnempiuqe dna tnalp ,ytreporp fo noitaicerpeD
)079,704,2()534,141,5(stessa elbignatni fo noitazitromA
)057,114,2()052,908,2(stnemulome 'srotceriD
)449,830,961()094,955,802(9sesnepxe gnitarepo rehtO
(371,805,393) (313,950,805)
112,981,281751,088,243sessol elbissop dna noitaxat erofeb tiforp gnitarepO
)076,066,35()946,090,02(01snoisivorp dna sessol naoL
Operating profit before VAT on financial services and income tax 322,789,508 128,528,541
Value Added Tax on financial )303,921,91()349,530,36(secivres
832,993,901565,357,952xat emocni erofeb tiforP
)357,207,89(11esnepxe xat emocnI (51,553,491)
747,548,75218,050,161doirep eht rof tiforP
80.120.321 erahs rep sgninrae cisaB
Figures in brackets indicate deductions.
Above figures are provisional and subject to audit
The Notes to the Financial Statements from pages 136 to 160 form an integral part of these Financial Statements.
Senkadagala Finance Company Limited
UN-AUDITED INTERIM FINANCIAL STATEMENTS AS AT 31ST
DECEMBER 2010
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
133
Senkadagala Finance Company LimitedStatement of Changes in uity
Stated Statutory General Restated Totalcapital reserve reserve Retained
fund earningsFor the period ended 31st ecem er 1 Rs. Rs. Rs. Rs. Rs.
000,274,3129002 lirpA ts1 ta sa ecnalaB 83,536,033 638,018,392 (50,694,074) 884,332,351
Profit for the period - - - 57,845,747 57,845,747
Dividend paid - - - (36,290,240) (36,290,240)
293,810,836330,635,38000,274,3129002 rebmeceD ts13 ta sa ecnalaB (29,138,567) 905,887,858
000,274,312)detroper sA( 0102 lirpA ts1 ta sa ecnalaB 86,536,033 638,018,392 (41,002,752) 897,023,673
VAT on financial services 2009/10 (Note A) - - - (4,589,093) (4,589,093)
000,274,312)detatser sA( 0102 lirpA ts1 ta sa ecnalaB 86,536,033 638,018,392 (45,591,845) 892,434,580
Profit for the period - - - 161,050,812 161,050,812
Bonus Share Issue 320,208,000 - (320,208,000) - -
Dividend paid - - - (24,549,280) (24,549,280)
000,086,3350102 rebmeceD ts13 ta sa ecnalaB 86,536,033 317,810,392 90,909,687 1,028,936,112
Note A
Above figures are provisional and subject to audit
The Notes to the Financial Statements from pages 136to 160 form an integral part of these Financial Statements.
The Company agreed with the Department of Inland Revenue when settling the pending assessments on VAT on Financial Services according to the
Sec: 25c (1) of Value Added Tax (Amendment) Act No 8 of 2006, and the respective under provisions for same have been accounted for
retrospectively, in accordance with Sri Lanka Accounting Standards 10 - Accounting Policies, Changes in Accounting Estimates and Errors.
Figures in brackets indicate deductions.
The under provision of Rs. 4,589,093 for VAT on financial services relating to year ended 31st March 2010 has been adjusted to the profit for that year.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
134
Senkadagala Finance Company LimitedCash Flow Statement
For the period ended 31st December 2010 2009Rs. Rs.
Cash flows from operating activitiesInterest and commission receipts 1,111,125,355 1,085,938,878
Interest payments (515,504,440) (652,810,962)
Recoveries of bad debts 26,119,233 4,957,042
Other operating income 76,520,318 56,424,946
Operating expenditure (102,713,275) (50,684,760)
Cash payments to employees and suppliers (273,219,837) (232,408,156)
Operating profit before changes in operating assets and liabilities (Note A) 322,327,354 211,416,988
(Increase) / decrease in operating assetsInvestments in Government securities (11,869,194) (15,591,944)
Funds advanced to customers (472,592,411) 206,645,368
Advances and receivables (13,007,884) (138,604,410)
Deferred expenses - (10,770,109)
Trade and other receivables (20,068,230) (9,308,178)
(517,537,720) 32,370,727
Increase / (decrease) in operating liabilitiesDeposits from customers 189,564,497 568,008,220
Gratuity Paid (337,500) (2,629,239)
Rentals received in advance 17,786,980 3,133,914
Other liabilities 59,460,983 65,152,302
266,474,960 633,665,197
Net cash generated from operating activities before income tax 71,264,594 877,452,912
Taxes paid (33,569,820) -
Net cash generated from operating activities 37,694,774 877,452,912
Cash flows from investing activitiesDividend receipts 806,574 341,123
Purchase of dealing securities - (1,462,265)
Purchase of property, plant and equipment (40,245,941) (74,453,010)
Purchase of intangible assets (763,481) (19,362,958)
Proceeds from sale of property, plant and equipment 29,747,996 3,836,500
Net cash used in investing activities (10,454,851) (91,100,610)
Cash flows from financing activitiesSecuritization loans obtained 510,910,000 807,000,000
Unlisted Debentures issued 180,000,000 180,000,000
Repayment of securitization loans (816,733,758) (1,551,742,910)
Redemption of listed debenture - (100,000,000)
New FD investment during the period (150,591,781) (266,320,523)
Dividends paid (24,298,762) (35,966,275)
Net cash used in financing activities (300,714,301) (967,029,708)
Cont…..
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedCash Flow Statement Continued
For the period ended 31st ecem er 2010 2009
Net increase / (decrease) in cash and cash equivalents (273,474,378) (180,677,406)
Cash and cash equivalents at the beginning of the period 487,987,086 234,523,962
Cash and cash equivalents at the end of the period 214,512,708 53,846,556
Reconciliation of cash and cash equivalentsCash and short term fu 655,648,35433,776,032sdn
-)626,461,61(tfardrevo knaB
214,512,708 53,846,556
(Note A)Reconciliation of operating profitProfit before income ta 565,357,952x 109,399,238
,608(sdnediviD 574) (341,123)
Provision for bad debts 19,413,593 38,864,514
Reversal of specific provision on repossessed stocks (6,338,451) -
200,344,65026,701,06noitaicerpeD
Provision for retiring gr 615,344,3615,392,3ytiuta
Profit on disposal of motor ,816,51(selcihev 510) (1,288,989)
Amortization of structur ,225,2seef la 595 4,896,830
322,327,354 211,416,988
Figures in brackets indicate deductions.
Above figures are provisional and subject to audit
The Notes to the Financial Statements from pages 136 to 160 form an integral part of these Financial
Statements.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
136
Senkadagala Finance Company LimitedNotes to the Financial Statements
1. Corporate information
1.1 Domicile and legal form
1.2 Principal activities and nature of operations
1.3 Number of employeesThe number of employees of the Company at the end of the period was 215 (2010 – 219).
1.4 Responsibility for Financial Statements
*
*
*
*
* Notes to the Financial Statements comprising Accounting Policies used and other Notes.
1.5
Senkadagala Finance Company Limited is a limited liability company domiciled in Sri Lanka
incorporated under the Companies Ordinance, No 51 of 1938 on December 29, 1968 and
registered under the Finance Companies Act No.78 of 1988. Its registered office is situated at
No. 267, Galle Road, Colombo 3. The company re – registered under the Companies Act, No.
7 of 2007.
As a registered finance company, it is supervised by the Department of Supervision of Non-
Bank Financial Institutions of the Central Bank of Sri Lanka.
The principal lines of business of the Company can be broadly classified under two categories
– fund-based and fee-based. The fund-based services include finance leasing, hire purchase
finance, trade loans and pledge loans. The fee-based services are insurance brokering, vehicle
valuation, etc.
The Board of Directors is responsible for the preparation and presentation of the financial
statements of the Company in accordance with the provisions of the Companies Act, No. 7 of
2007 and Sri Lanka Accounting Standards.
The financial statements of Senkadagala Finance Company Ltd for the period ended 31st
December 2010 were authorised for issue by a resolution of the Board of Directors on 10th
January, 2011.
These financial statements include the following components:
An Income Statement providing the information on the financial performance of the Company
for the period under review.
A Balance Sheet providing information on the financial position of the Company at the end of
the period under review.
A Statement of Changes in Equity providing the information on the changes in shareholders’
equity during the period under review.
A Cash Flow Statement providing information on the cash and cash equivalents generating
ability of the Company and the utilisation of those cash flows.
Parent Enterprise and Ultimate Parent EnterpriseThe Company is a subsidiary of E.W.Balasuriya and Company (Private) Limited, which is
incorporated and domiciled in Sri Lanka.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies
2.1 General Policies
2.1.1 Basis of Preparation
Statement of Compliance
2.1.1(a)
2.1.1(b)
2.1.1(c) Significant Accounting Judgments, Estimates and Assumptions
The Balance Sheet, and the related Statements of Income, Changes in Equity and Cash Flow
together with the Accounting Policies and Notes (Financial Statements) of Senkadagala
Finance Company Ltd as at 31st December 2010 and for the period then ended, comply with
the Sri Lanka Accounting Standards laid down by the Institute of Chartered Accountants of
Sri Lanka and the requirements of the Companies Act, No. 7 of 2007, Finance Companies
Act, No 78 of 1988 and Finance Leasing Act No, 56 of 2000 and the amendments to these
The Company did not adopt any inappropriate accounting treatments which do not comply
with the requirements of Sri Lanka Accounting Standards and other laws and regulations
governing the preparation and presentation of financial statements.
Basis of Measurement
The financial statements of the Company are prepared under the historical cost convention
basis. No adjustments have been made for inflationary factors affecting the financial
statements.
Revisions to accounting estimates are dealt with in accordance with Sri Lanka Accounting
Standard No. 10 Accounting Policies, Changes in Accounting estimated and errors. (Revised
2005)
Presentation and Functional Currency
The financial statements of the Company are presented in Sri Lankan Rupees, which is the
Company’s functional currency.
The preparation of financial statement in conformity with SLAS requires the management to
make judgments, estimates and assumptions that influence the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Judgments and
estimates are based on historical experience and other factors, including expectations that are
believed to be reasonable under the circumstances and assumptions based on such knowledge
and expectations of future events. Hence actual experience and results may differ from these
judgments and estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised, if the
revision affects only that period or in the period of the revision and future periods as well, if
the revision affects both current and future periods.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
138
Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.1 General Policies (Contd)
2.1.2 Going Concern
2.1.3 Change to the Accounting Policies
2.1.4
2.1.5 Post-Balance Sheet Events
All material post Balance Sheets events have been considered and appropriate adjustments/
disclosures have been made in the Accounts, wherever necessary.
These two standards become effective from January 1, 2011. SLAS 44 and SLAS 45 together
provide comprehensive guidance on identification, classification, measurement and presentation of
financial instruments (including derivatives), financial assets, financial liabilities and equity
In order to comply with the requirement of these Accounting Standards, the Company has duly
planned the standards implementation program, especially considering the complex nature of the
effect of these Accounting Standards.
Comparative Information
Comparative information including quantitative, narrative and descriptive information is disclosed in
respect of the previous period for all amounts reported in the financial statements in order to enhance
the understanding of the current period’s financial statements and to enhance inter-period
comparability.
When preparing the financial statements, the directors have made an assessment of the ability of the
constituents of the Company to continue as a going concern in the foreseeable future and they do not
foresee a need for liquidation or cessation of trading, taking into account all available information
about the future.
There were no changes to the Accounting Policies adopted by the Company during the period under
review. However, the following two new Accounting Standards have been issued by the Institute of
Chartered Accountant of Sri Lanka and are effective for the accounting period on the dates specified
below.
• Sri Lanka Accounting Standard No 44 ‘Financial Instrument : Presentation’• Sri Lanka Accounting Standard No 45 ‘Financial Instruments: Recognition and Measurement’
The Accounting Policies adopted by the Company are consistent with those of the previous financial
period as permitted by Sri Lanka Accounting Standard No. 3 (Revised 2005) on ‘Presentation of
Financial Statements’. However, when the presentation or classification of items in the Financial
Statement is amended, comparative amounts are also re-classified to confirm with the current period
presentation.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
139
Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.1 General Policies (Contd)
2.1.6 Taxation
Tax expense comprises current tax and deferred tax.
(a) Current Taxes
(b) Deferred Taxation
2.2
2.2.1 Cash and Short –Term Funds (Cash and Cash Equivalents)
Current tax is the expected tax payable on the taxable income for the period, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous periods.
Provision for taxation is based on the elements of income and expenditure as reported in the
financial statements and computed in terms of the provisions of the Inland Revenue Act, No.
10 of 2006 and amendments thereto, at the rate of 35% (2009 – 35%).
Deferred tax is provided on temporary differences as at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised on all temporary differences.
Deferred tax assets are recognised for all deductible differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry forward of unused
tax credits and unused tax losses can be utilised.
Assets and Bases of their Valuation
Cash and short-term funds include cash in hand, balances with banks, placements with banks
and money at call at short notice. They are brought in to the financial statement at the face
value.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rate that are expected to apply in the
period when the assets are recognised, or the liabilities are settled, based on tax rates and tax
laws that have been enacted or substantially enacted at the balance sheet date.
Current tax and deferred tax relating to items recognised directly in equity are also recognised
in equity and not in the income statement.
Deferred tax assets and liabilities are set off if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
140
Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.2
2.2.2 Government Treasury Bills
2.2.3 Investments
(a) Dealing Securities
(b) Fall in value of Investments
(c)
(d)
2.2.4
2.2.4 (a)
2.2.4 (b)
Assets and Bases of their Valuation (Contd)
Investments in Government Treasury Bills are acquired or incurred principally for the purpose
of adherence to Central Bank regulation and sold or held as part of a portfolio that is managed
for short term profit, Treasury Bill Repurchase Agreements are started at cost and any interest
accrued up to the balance sheet date is recognised in the Income Statement.
These are marketable securities acquired and held with the intention of resale over a short
period of time. Such securities are recorded at the lower of cost and market value on an
aggregate portfolio basis.
Unrealised losses on revaluation of dealing securities at the lower of cost and market value are
taken to the Income Statement in accordance with Sri Lanka Accounting Standard No. 22,
Accounting for Investments.
Investments in Associates
Investments in associates are not accounted under equity method in the Company’s financial
statements in accordance with the exemptions prescribed by Sri Lanka Accounting Standard
No. 27, Investments in Associates.
Investment Securities
Investment securities are stated at cost in the Company’s financial statements in accordance
with Sri Lanka Accounting Standard No. 22, Accounting for Investments.
Assets hired to customers under hire purchase agreements, which transfer all the risks and
rewards incidental to ownership as well as legal title at the end of such contractual period are
classified as hire purchase receivables. Such assets are accounted for in a similar manner as
those of finance lease.
Loans and Advances to Customers (Lease, Hire Purchase, Loans and advances andtrade and other receivables)
Rental receivables on lease assets
Assets leased to customers which transfer substantially all the risks and rewards incidental to
ownership other than the legal title are accounted for as finance leases in accordance with Sri
Lanka Accounting Standard, No. 19 (Revised 2005) on Lease and reflected in the Balance
Sheet after eliminating unearned interest income, initial rental received and provision for
doubtful debts.
Hire purchase assets
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
141
Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.2
2.2.4(c) Loans and advances and trade and other receivables
2.2.5 Provision for loan losses
2.2.6 Property, Plant and Equipment
(a) Basis of Recognition and Measurement of Property, Plant & Equipment
(b) Depreciation
Assets and Bases of their Valuation (Contd)
Loans and advances and trade and other receivable are stated in the balance sheet net of
provision for bad and doubtful debts and interest in suspense.
Provision for possible loan losses is made on the basis of a continuous review of all advances
to customers in accordance with the Finance Company Direction, No. 3 of 2006 (Provision for
bad and doubtful debt) issued by the Central Bank of Sri Lanka and in accordance with Sri
Lanka Accounting Standard No. 33, Revenue Recognition and Disclosure in the Financial
Statements of Finance Companies. Accordingly, specific provisions have been made as
All advances in arrear for a period of 6 to 12 months 50%All advances in arrears for over 12 months 100%
In addition, wherever it is considered prudent, further provisions are made on specifically
identified loans and advances.
The Company applies the requirements of Sri Lanka Accounting Standard No. 18, (Property,
Plant & Equipment)
Property, plant and equipment are stated at cost or revalued amounts less accumulated
depreciation and accumulated impairment losses, if any. Subsequent expenditure incurred for
the purpose of acquiring, extending or improving assets of a permanent nature by means of
which to carry on the business or to increase the earning capacity of the business is treated as
capital expenditure. The carrying values of property, plant and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying value may not
be recoverable.
Property, plant and equipment are recorded at cost of purchase or construction or valuation
together with any incidental expenses thereon. These assets are stated at cost less accumulated
depreciation, which is provided for on the basis specified below.
The provision for depreciation is calculated by using the straight line method on the cost or
valuation of property, plant & equipment other than freehold land, in order to write-off such
amounts over the estimated useful economic lives of these assets in equal installments. The
depreciation charges are determined separately for each item of property, plant & equipment
and begin to depreciate when it is available for use.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
142
Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.2
The estimated useful lives of the different types of assets are as follows:
Buildings 5% per annum (20 years)
2.2.7 Intangible Assets
2.2.7.1 Basis of Recognition
2.2.7.2
2.2.7.3 Computer Software
2.2.8 Impairment of Non Financial Assets
The amortization expense on intangible assets is recognised in the income statement in the expense
category consistent with the function of the intangible assets.
Motor vehicles 16.67% per annum (6 years)Generators 12.5% per annum (8 years)Interior construction 20% per annum (5 years)
An intangible asset is recognised if it is probable that future economic benefits that are attributable to
the asset will flow to the entity and the cost of the asset can be measured reliably in accordance with Sri
Lanka Accounting Standard No. 37, Intangible Assets. Accordingly, these assets are stated in the
balance sheet at cost less accumulated amortization and accumulated impairment loss.
Assets and Bases of their Valuation (Contd)
Office equipment 10% per annum (10 years)Computers and other equipment 25% per annum (4 years)Furniture and fittings 10% per annum (10 years)
Amortization
The Company assesses at each reporting date or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired, whether there is an indication that a non-financial
asset may be impaired. If any such indication exists, or when an annual impairment testing for an asset
is required the Company makes an estimate of the asset's recoverable amount. When the carrying value
of an asset (or cash generating unit) exceeds its recoverable value, the asset (or cash generating unit) is
considered impaired and is written down to its recoverable value.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer exists or may have decreased. If
such condition exists, the recoverable value is estimated. Previously recognised impairment loss is
reversed only if there has been a change in the estimates used to determine the asset's recoverable value
since the last impairment loss was recognised. If that is the case, the carrying value of the asset is
increased to its recoverable value.
Computer software is stated at cost less accumulated amortization and any accumulated impairment
loss. Amortization is done at 12% per annum of cost.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
143
Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.3 Liabilities and provisions
2.3.1 Commitments and contingencies
All discernible risks are accounted for in determining the amount of other liabilities.
2.3.2
2.3.3 Borrowings
2.3.4 Debentures
2.3.5 Retirement benefits obligations
Deposits from Customers
Deposits from customers include non-interest bearing deposits, savings deposits, term deposits,
and certificate of deposit. They are stated in the balance sheet at the amount payable. Interest
paid and payable on these deposits is charged to the income statement.
Borrowings include revolving facilities and assets securitization facilities. Balances payable are
stated in the balance sheet under Securitization Loan. Interest paid and payable on these
borrowings is charged to the income statement.
The service of a qualified actuary is obtained to determine the value of the define benefit
obligation for the company. The valuation is done on an ongoing basis and uses a Projected Unit
Credit Method, which projects the current data using actuarial assumptions as specified in the
note 2.3.5.1 below and calculates a projected benefit at the participant’s assumed retirement
date. The actuarial value of this projected benefit is then valued and discounted to the valuation
date to derive the current liability.
The actuarial gain or losses are recognised in the income statement in the period in which they
arise.
Up to 31st March 2008, provision had been made for retirement gratuities based on the number
of years of service multiplied by half of the last month’s salary of those employees.
These represent the funds borrowed by the Company for short term funding requirements. These
are recorded in the balance sheet at the cash value to be realised at settlement. Interest paid and
payable on these borrowings is charged to the income statement.
Retirement benefit obligations have been provided for using the actuarial valuation method in
accordance with SLAS 16 (Revised 2006) Employee Benefits.
Estimated provisions has been adjusted for the interim accounts and for the annual financial
statements
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.3 Liabilities and provisions (Contd)
2.3.5.1 The principal actuarial assumptions used in determining the cost are;
(i) Retirement age - normal retirement age, or age on valuation date, if greater
(ii)
(iii)
(iv) Rate of interest - 11%
2.3.5.2
2.4 Income statement
2.4.1 Revenue Recognition
(a) Lease
(b) Hire Purchase
(c) Loans & Advances
(d) Interest Income on Investment in Government Securities
Recognition of interest income from hire purchase facilities is similar to that of leases, which
recognises interest income based on a pattern reflecting a constant rate of return on the capital
outstanding.
Recognition of interest income from loans and advances is similar to that of leases, which
recognises interest income based on a pattern reflecting a constant rate of return on the capital
outstanding.
Interest receivable is taken to the income statement on an accrual basis, based on a pattern
reflecting a constant periodic rate of return. Interest on Government securities is grossed up
with the notional tax credit available under the Inland Revenue Act No. 10 of 2006.
Salary scale - annual increase of 10%
The liability is not externally funded.
Payment of benefit – Gratuity is assumed to be paid immediately provided the participant has
5 years of service credit at the time of departure. It is also assumed that all participants who
In accordance with Sri Lanka Accounting Standard No. 19 (Revised 2005) on Leases,
recognition of finance income on leasing is accounted based on a pattern reflecting a constant
periodic rate of return on capital outstanding. The excess of aggregate rentals receivable over
the cost of leased assets constitutes the total unearned interest income at the commencement of
the contract. We recognised the interest income from unearned income on the lease on an
accrual basis over the term of the lease in proportion to the remaining balance of the lease.
However, the recognition of income ceases when the recovery of principal or interest is in
arrears for six months or more. Thereafter, interest income is accounted on a cash basis.
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.4 Income statement (Contd)
(e)
(f) Dividend Income
(g) Recovery of Bad debts
(h) Commission Income
(i) Profit/loss from the sale of property, plant and equipment
(j) Profit on sales of seized vehicles stocks
2.5
Interest Income on deposits with banks
Interest receivable is taken to the income statement on an accrual basis.
Dividend income is recognised in the income statement on the date that the Company’s right
to receive payment is established.
The recovery of bad debts is recognised as and when the debts are recovered.
Profits and losses arising from the sale of property, plant and equipment are recognised in the
period in which the sale occurs.
Profits earned and losses incurred on the sales of repossessed vehicle stocks are accounted in
the income statement based on net realisable value.
Expenditure Recognition
In terms of Sri Lanka Accounting Standard 33 – Revenue Recognition and Disclosure in the
Financial Statements of Finance Companies, interest and other expenses payable are
recognised on an accrual basis. All the expenditure incurred in the running of our business and
maintaining the property, plant & equipment in a state of efficiency has been charged to
income in arriving at the profit for the year.
Recognition of commission income on insurance business arranged by the Company is on a
cash basis.
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Senkadagala Finance Company LimitedNotes to the Financial Statements
2. Summary of Significant Accounting Policies (Contd)
2.6 Cash Flow Statement
2.7
Inter-segment transactions are based on fair market prices.
In accordance with Sri Lanka Accounting Standard No. 28 on Segment Reporting, segmental
information is presented in respect of the Company. The segments comprise of financing and
investing.
Segment results, assets and liabilities include those items directly attributable to a segment as
well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly
of head office expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment
assets that are expected to be used for more than one accounting period.
The cash flow statement has been prepared by using the “Direct Method” in compliance with
SLAS-9, Cash Flow Statement. Cash and cash equivalents comprise mainly of cash balances
and call deposits. Cash and cash equivalents are presented net of bank overdrafts for the
purpose of the cash flow statement.
Segment Reporting
A segment is a distinguishable component of the Company that is engaged in providing
services (Business Segment).
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Senkadagala Finance Company LimitedNotes to the Financial Statements
For the period ended 31st December 2010 2009Note Rs. Rs.
3 IncomeInterest income 4 1,111,125,355 1,085,938,878
Other operating income 6 119,064,635 63,012,100
1,230,189,990 1,148,950,978
4 Interest income Finance leases 165,146,790 220,652,996
Hire purchases 749,989,619 641,800,765
Loans and advances 15,972,687 14,057,192
Non - Hire purchases 15,764,606 26,535,598
Fixed deposit loans 2,032,343 3,028,872
Money market investments 38,457,377 33,063,714
Treasury bills 13,187,993 17,324,383
Default charges 110,573,940 129,475,358
1,111,125,355 1,085,938,878
4.1
5 Interest expensesFixed deposits 197,592,681 199,798,040
Certificate of deposits 94,455 452,994
Savings deposits 3,861,258 3,871,861
Securitization loans 178,211,660 321,110,275
Debentures 125,371,002 105,372,689
Corporate loans 10,373,384 22,205,103
515,504,440 652,810,962
6 Other operating incomeFinance charges 16,709,297 11,043,621
Commission income 22,635,466 21,661,408
Bad debts recoveries 26,119,233 4,957,042
Dividend income 806,574 341,123
Interest on insurance 18,462,456 13,573,283
Sundry income 3,035,922 1,242,351
Legal fees 13,158,312 6,975,103Rent income 1,440,000 1,440,000Inspection fees 1,078,865 439,180
Profit on disposal of motor vehicles 15,618,510 1,288,989
Discounting cheques - 50,000
119,064,635 63,012,100
7 Operating expensesOperating expenses includes the followings :
Internal Auditors' remuneration 3,612,600 3,702,190
External Auditors' remuneration - Audit related - 225,000
- Non audit related 437,400 437,400
Amortization of securitization loan structuring fee 2,522,595 4,896,830
Legal expenses 3,939,654 4,817,972
Section 137 of the Inland Revenue Act. No. 10 of 2006 provides that a company which derives interest
income from the secondary market transactions in Government Securities would be entitled to a notional tax
credit (being one ninth of net interest income), provided such interest income forms part of the statutory
income of the Company for that year of assessment.
Accordingly, the net interest earned by the Company from the secondary market transactions in Government
securities (Treasury bills) for the period has been grossed up in the financial statements, and the resulting
notional tax credit amounts to Rs. 1,318,799 (2009 - Rs.1,732,438) for the Company.
Notional tax credit for withholding tax on government securities on secondary market transactions.
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Senkadagala Finance Company LimitedNotes to the Financial Statements
For the period ended 31st December 2010 2009Rs. Rs.
8 Personnel costsSalaries and wages 81,046,828 70,194,258
Contribution to Employees' Provident Fund 9,800,391 8,353,671
Contribution to Employees' Trust Fund 2,450,098 2,085,437
Retirement benefit obligations 3,293,516 3,443,516
Other personnel costs 3,738,201 1,980,227100,329,034 86,057,109
9 Other operating expensesAdministrative expenses 22,371,195 22,607,769
Establishment expenses 91,967,596 88,790,650
Selling expenses 94,220,699 57,640,525
208,559,490 169,038,944
10 Loan losses and provisionsSpecific Provision for bad and doubtful debts on loans and advances 19,413,593 38,864,514
Reversal of specific provision on repossessed stocks (6,338,451) -
Loss on sale of repossessed stocks 7,015,507 14,796,156
20,090,649 53,660,670
11 Income tax expenseCurrent tax expense 101,860,625 43,042,679
Deferred tax charge / (reversal) for the period (3,157,872) 8,510,812
98,702,753 51,553,491
12 Basic earnings per share
Profit attributable to ordinary shareholders of the Company (Rs.) 161,050,812 57,845,747
Weighted average number of ordinary shares 53,368,000 53,368,000
Basic earnings per share (Rs.) 3.02 1.08
Basic earnings per share have been calculated by dividing the net profit for the period attributable to
the ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the year.
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Senkadagala Finance Company LimitedNotes to the Financial Statements
As at 31.12.2010 31.03.2010Note Rs. Rs.
13 Cash and short term fundsCash and bank balances 13.1 86,972,119 343,263,464
Commercial Bank - Money market 58,337,526 103,033,820
Repo investment with banks 85,367,689 50,000,000
230,677,334 496,297,284
13.1 Cash and bank balancesCommercial Bank Savings A/c 43,857 43,857
Commercial Bank - Kandy # 1 1,500,477 -
Commercial Bank - Kandy # 2 70,986,363 6,951,624
Commercial Bank - Kandy # 3 - 730,328
Commercial Bank - Kandy # 4 177,901 129,967
Commercial Bank # 6 15,694 3,946,180
Commercial Bank corporate branch - 974,674
HSBC 18,095 954,554
Hatton National Bank - Kandy 3,795,484 1,587,374
Hatton National Bank - Colombo 25,720 30,551
Sampath Bank 4,052,645 10,453,027
Standard Chartered Bank 14,776 15,276
Nation Trust Bank 37,425 -
Bank of Ceylon 50,298 58,406
Bank of Ceylon 21,850 31,100
Pan Asia Bank 41,639 42,821
Union Bank 15,789 94,202
ICICI Bank 5,820,879 8,402,459
Cash value stamps 30,449 30,449
Encashment floats 3,620,980 3,482,320
Cash in hand 10,776,683 14,351,398
Savings ATM withdrawals (14,074,885) (9,786,829)
Short term deposits - 300,739,726
86,972,119 343,263,464
14 Fixed DepositsDFCC Vardhana Bank 150,591,781 -
150,591,781 -
15 Dealing securitiesQuoted shares 15.1 12,694,467 12,694,467
Debentures - Commercial Bank - 13% (50, 000 Debentures Rs.100/- each) 5,000,000 5,000,000
17,694,467 17,694,467
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
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As atNo. of Cost Market No. of Cost Market
Shares Value Shares ValueRs. Rs. Rs. Rs.
15 Dealing securities (Continued)15.1 Quoted shares
Bank, Finance and InsuranceCentral Finance Company PLC 4,333 243,207 3,546,561 4,333 243,207 1,689,870
National Development Bank 384 500 134,208 384 500 80,640
Commercial Bank of Ceylon PLC 208 72,450 54,059 208 72,450 41,964
Beverage, Food and TobaccoCeylon Tobacco PLC 3,100 142,017 1,100,500 3,100 142,017 775,000
Hotels and TravelsAitken Spence PLC 33 3,355 5,607 33 3,355 45,334
Investment TrustNational Equity Fund 131,400 600,925 2,986,759 131,400 600,925 2,986,759
Namal Acuity Value Fund 25,000 1,250,000 2,250,000 25,000 1,250,000 1,325,000
ManufacturingRoyal Ceramics Lanka PLC 10 273 3,049 10 273 1,130
Lanka Tiles Ltd. 250 7,175 34,725 250 7,175 21,938
Diversified HoldingsJohn Keells Holdings PLC 1,937 13,800 578,001 1,937 13,800 356,408
Orient Fund (Portfolio Investments) 1,000,000 10,212,265 49,667,963 1,000,000 10,212,265 28,254,166
TradingLanka Indian Oil Corporation PLC 5,500 148,500 103,950 5,500 148,500 100,375
Total cost and market value 12,694,467 60,465,381 12,694,467 35,678,583
31.12.2010 31.03.201016 Investment securities (Unquoted) Rs. Rs.
Senkadagala Hotels Limited 16.1 13,957,555 13,957,555
Credit Information Bureau of Sri Lanka 8,200 8,200
Finance Houses Consortium (Pvt) Ltd. 200,000 200,000
14,165,755 14,165,755
16.1 The Company holds 32.27% approximately of the issued share capital of the Senkadagala Hotels Limited. However the
Company has not accounted this under equity method as per Sri Lanka Accounting Standards 27 - Investments in associates.
However consolidated financial statements could be obtained from the ultimate parent of the Senkadagala Hotels Limited ,
E.W.Balasuriya and Company (Private) Limited, incorporated and domiciled in Sri Lanka under the Companies Act No.07 of
2007.Its registered office and the principal place of business is located at No 267,Galle road, Colombo 03.
Senkadagala Finance Company LimitedNotes to the Financial Statements
31.12.2010 31.03.2010
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As at 31.12.2010 31.03.2010Note Rs. Rs.
17 Loans and advances 17.3
Net investment in lease advances
Lease rental receivable within one year from balance sheet date 541,499,795 454,328,459
Unearned income (120,026,123) (106,499,171)
421,473,672 347,829,288
Lease rental receivable between one and five years from balance sheet date 663,896,164 769,522,608
Unearned income (184,002,174) (216,741,455)
479,893,990 552,781,153
Lease rental receivable in respect of Non performing lease advances 16,803,211 16,588,507
Unearned income in respect of Non performing lease advances (5,239,850) (5,317,545)
11,563,361 11,270,961
Net investment in hire purchase
Hire purchase rental receivable within one year from balance sheet date 2,079,283,969 1,621,345,772
Unearned income (490,824,739) (410,679,351)
1,588,459,230 1,210,666,421
Hire purchase rental receivable between one and five years from balance sheet dat 2,997,644,400 2,842,393,528
Unearned income (866,040,340) (867,343,312)
2,131,604,060 1,975,050,215
Hire purchase rental receivable in respect of Non performing HP advances 23,233,698 17,538,674
Unearned income in respect of Non performing HP advances (6,672,246) (5,365,092)
16,561,452 12,173,583
Net investment in non hire purchase
Non hire purchase rental receivable within one year from balance sheet date 36,370,640 51,385,314
Unearned income (7,792,626) (11,519,886)
28,578,014 39,865,428
Non hire purchase rental receivable between one & five years from balance sheet 40,219,061 76,803,639
Unearned income (11,545,117) (23,705,223)
28,673,944 53,098,416
Non hire purchase rental receivable in respect of Non performing NH advances 22,035,945 21,828,546
Unearned income in respect of Non performing NH advances (6,322,469) (6,159,357)
15,713,476 15,669,189
Net investment in loans
Loan rental receivable within one year from balance sheet date 35,537,819 31,149,923
Unearned income (11,544,179) (10,220,428)
23,993,639 20,929,495
Loan rental receivable between one and five years from balance sheet date 73,762,036 74,865,647
Unearned income (29,784,875) (29,663,835)
43,977,162 45,201,812
Loan rental receivable in respect of Non performing loan advances - -
Unearned income in respect of Non performing loan advances - -
- -
Loans against fixed deposits 17,429,754 15,643,319
Debtors recoverable on repossessed stocks 118,113,882 165,789,373
Specific Provision for bad and doubtful debts on loans and advances 17.1 (37,999,265) (31,111,099)
General provision for debtors recoverable on repossessed stocks (7,600,000) (7,600,000)
Specific provision for debtors recoverable on repossessed stocks 17.2 (21,400,482) (27,738,933)
Total loans and advances 4,859,035,889 4,399,518,621
Senkadagala Finance Company LimitedNotes to the Financial Statements
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As at 31.12.2010 31.03.2010Note Rs. Rs.
17 Loans and advances (Continued)17.1 Movement in specific provision for bad and doubtful debts on loans and advances
Balance at the beginning of the period 31,111,099 75,084,647Provision for the period 19,413,593 41,201,817Bad debts written-off - (85,175,365)Balance at the end of the period 50,524,692 31,111,099
Provision for bad and doubtful debts on loans and advances 37,999,265 31,111,099Provision for bad and doubtful debts on rental in assets 12,525,426 -
50,524,691 31,111,099
17.2 Movement in specific provision for debtors recoverable on repossessed stocksBalance at the beginning of the period 27,738,933 12,540,095
Provision made during the period - 27,738,932
Reversal of specific provision on repossessed stocks (6,338,451) (4,387,465)
Loss incurred during the period - (8,152,629)
Balance at the end of the period 21,400,482 27,738,933
17.3
18 Trade and other receivablesRentals in arrears 212,523,584 212,756,704
Provision for bad and doubtful debts on rental in arrears 17.1 (12,525,426) -
199,998,158 212,756,704
Staff debtors 4,542,946 7,275,423
Discounting of cheques 490,000 490,000
Insurance 72,453,046 64,042,377
Advances allowed to car sales 18,770,583 7,768,649
Search fees and seizing charges receivables 1,873,233 1,924,251
Western union MMBL 1,462,322 1,022,093
Goods and Service Tax recoverable 11,020,826 11,020,826
Value Added Tax recoverable 1,783,257 (6,489,168)
Advance payments 11,234,081 2,026,235
Sundry debtors 1,911,771 3,634,603
325,540,223 305,471,993
Senkadagala Finance Company LimitedNotes to the Financial Statements
The company does not have any receivable balances falling in the category of receivable after five years from balance
sheet date.
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As at 31.12.2010 31.03.2010Rs. Rs.
19 Advances and receivablesDeposits 2,122,284 2,122,284
Pre - paid rent 20,683,650 17,318,520
Advance company tax recoverable 6,125,619 6,125,619
Advance paid for fixed assets 30,931,359 6,788,447
Cash cover on securitization loans 4,705,996 19,206,154
64,568,908 51,561,024
20 Deferred expenses Balance at the beginning of the period 7,392,573 8,066,093
Paid during the period - 5,264,139
Charged during the period (2,522,594) (5,937,659)
Balance at the end of the period 4,869,979 7,392,573
21 Property, plant and equipment
Cost As at Additions Disposals As at01.04.2010 31.12.2010
Rs. Rs. Rs. Rs.
Land and buildings 111,545,146 - - 111,545,146
Furniture and fittings 76,629,875 102,058 - 76,731,933
Office equipment 68,237,385 878,981 - 69,116,366
Air conditioner 24,818,856 43,000 - 24,861,856
Computer and accessories 96,169,113 4,077,479 128,185 100,118,407
Facsimile machine 893,483 - - 893,483
Generator 32,420,500 - - 32,420,500
Motor vehicles 163,136,760 34,690,713 33,143,790 164,683,683
Photostat machine 5,478,676 140,000 - 5,618,676
Fixtures and fittings 77,799,874 - - 77,799,874
Printers 15,305,233 313,710 - 15,618,943
672,434,901 40,245,941 33,271,975 679,408,867
Accumulated depreciation As at Charge for the Charge on As at01.04.2010 Period Disposals 31.12.2010
Rs. Rs. Rs. Rs.
Buildings 8,876,650 592,623 - 9,469,273
Furniture and fittings 32,867,970 5,630,265 - 38,498,235
Office equipment 20,741,620 4,946,155 - 25,687,775
Air conditioner 15,180,600 2,643,796 - 17,824,397
Computer and accessories 72,358,219 6,848,967 128,185 79,079,001
Facsimile machine 414,994 57,524 - 472,517
Generator 13,587,654 2,913,418 - 16,501,072
Motor vehicles 63,599,828 20,692,889 19,014,304 65,278,413
Photostat machine 4,248,212 434,892 - 4,683,104
Fixtures and fittings 45,116,701 9,072,096 - 54,188,797
Printers 12,342,767 1,133,559 - 13,476,325
289,335,214 54,966,185 19,142,489 325,158,910
Net book value 383,099,687 354,249,957
Senkadagala Finance Company LimitedNotes to the Financial Statements
Loan structuring fee paid for arranging loans, has been treated as a deferred expense and has been charged to
income statement over the period of repayment of loans.
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As at 31st December 2010
21.1
31.12.2010 31.03.2010Rs. Rs.
Buildings 3,000,000 -
Air Conditioner 9,259,666 7,249,940
Computer and accessories 40,026,661 32,035,620
Generator 1,344,048 -
Photostat machine 2,836,625 1,367,625
Printers 3,483,060 2,612,245
21.2
31.12.2010 31.03.2010Rs. Rs.
Furniture and Fittings 1,643,057 1,609,557
Office Equipment 2,690,503 2,680,468
Air Conditioner 1,456,713 1,456,713
Computer and accessories 20,321,821 20,321,821
Facsimile machine 100,000 100,000
Photostat machine 302,050 302,050
Printers 473,320 473,320
22 Intangible assets 31.12.2010 31.03.2010Software programme Rs. Rs.
CostBalance at the beginning of the year 121,529,586 102,166,628
Additions during the period 763,481 19,362,958
Balance at the end of the period 122,293,067 121,529,586
AmortizationBalance at the beginning of the year 81,971,684 76,033,463
Charge for the period 5,141,435 5,938,221
Balance at the end of the period 87,113,119 81,971,684
Net book value 35,179,948 39,557,902
Notes to the Financial Statements Senkadagala Finance Company Limited
The cost of fully-depreciated Property, Plant & Equipment of the company which are still in use as at the
Following Property, Plant & Equipment of the company were retired from active use as at the Balance Sheet
Fully Depreciated Property, Plant & Equipment
Property, Plant & Equipment retired from active use
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As at 31.12.2010 31.03.2010Note Rs. Rs.
23 Deposits from customersSaving deposits 80,854,245 66,944,059 Certificate of deposits 23.1 2,811,720 68,966 Fixed deposits 23.2 2,200,376,191 2,027,464,634
2,284,042,156 2,094,477,659
23.1 Certificate of depositsFace value 3,100,000 100,000 Interest in suspense (288,280) (31,034)
2,811,720 68,966
23.2 Fixed depositsFixed deposits 2,079,469,175 1,951,821,251Accrued interest 120,907,016 75,643,383
2,200,376,191 2,027,464,634
24 Bank overdraftCommercial Bank - Kandy # 1 - 6,837,325 Commercial Bank - Colombo # 5 16,164,626 1,430,932 Nation Trust Bank - 41,941
16,164,626 8,310,198
25 Assets securitization loansCommercial Bank Corporate Division - 12,974,900
Hatton National Bank PLC 96,250,000 122,500,000
Commercial Bank of Ceylon PLC 106,765,336 198,072,581
Sampath Bank PLC 70,600,001 125,734,001
Capital Alliance - 7,426,715
National Development Bank PLC 77,500,000 249,700,000
Nations Trust Bank PLC 80,042,506 154,959,404
Waldock Mackenzie - 6,250,000
HSBC - 30,000,000
ICICI Bank PLC 41,199,999 89,729,999
Berkly 650,200,000 431,034,000
1,122,557,842 1,428,381,600
Securities pledged
26 Accrued expensesAudit fees 450,000 450,000 Staff bonus payable - 8,364,193 Interest on debentures 91,129,516 67,998,514 Securitization loan repayment 310,729 1,039,899 Directors' fees (37,500) (37,500) VAT on financial services 6,437,445 3,132,764 Nation Building Tax 47,100 132,771
98,337,290 81,080,641
Senkadagala Finance Company LimitedNotes to the Financial Statements
Lease and Hire Purchase aggregate portfolio amounting to Rs. 2,561,232,950.15 have been pledged as
security for the above loans.
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Senkadagala Finance Company LimitedNotes to the Financial Statements
As at 31.12.2010 31.03.2010Rs. Rs.
27 Accounts payableDebit tax (6,033) 83,610
Saving charges (114,190) -
Dividend payable 1,590,096 1,339,578
Registrar of motor vehicles charges 2,916,842 2,512,842
Refundable deposit 376,000 372,000 Mortgage 287,107 197,425 Direct deposits 3,787,206 3,535,638 Stamp duty and E.S.C payable 8,661,918 7,682,667
17,498,946 15,723,760
28 Trade payablesAmount payable to car sales 3,462,223 932,203 NHP - payable (1,821,325) (1,784,650) XL - loan excess payment 44,418 51,170 W.H.T. on dividends (77,615) (52,516) W.H.T. on loan and debentures 832,394 2,225,641 Stock payable 105,237,961 102,659,178 Sundry creditors 59,666,856 18,045,128 Goods and Service Tax refund for buses 8,912 8,912
167,353,824 122,085,066
29 Current tax liabilitiesIncome tax payable 179,667,066 77,806,441
Income tax payment (16,585,967) -
Economic service charges (46,845,114) (34,869,526)
Withholding tax on treasury bill interest (9,422,319) (4,020,534)
W.H.T. on commission 663,549 631,698
W.H.T. on fixed deposits interest (7,617,180) (7,978,849) 99,860,035 31,569,230
30 Rentals received in advanceInitial payment of lease 12,646,199 1,632,450 Prepaid rentals 25,840,580 19,067,349
38,486,779 20,699,799
31 Retirement benefit obligationBalance at the beginning of the period 17,631,637 16,210,783
Retirement benefit expense for the period 3,293,516 4,027,547 Benefits paid during the period (337,500) (2,606,693) Balance at the end of the period 20,587,653 17,631,637
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As at 31st December 2010
32 Debentures
Type Purpose of Interest Due/settle 31.12.2010 31.03.2010debenture rate (p.a) dates Rs. Rs.
Unsecured, unlisted, redeemable debentures2006/2011 Working capital 16% (Fixed) 5 years from the 259,000,000 259,000,0002007/2012 requirement 16% (Fixed) date of allotment 241,000,000 241,000,000
2008/2013 16% (Fixed) 240,000,000 240,000,000
2009/2014 16% (Fixed) 270,000,000 290,000,0002009/2014 14.5% (Fixed) 80,000,000 60,000,0002010/2015 14.5% (Fixed) 120,000,000 -2010/2015 14.0% (Fixed) 60,000,000 -
1,270,000,000 1,090,000,000
33 Deferred tax liabilityBalance at the beginning of the period 70,968,196 65,240,401
Deferred tax charge / (reversal) for the period (3,157,872) 5,727,795
Balance at the end of the period 67,810,324 70,968,196
34 Stated capitalOrdinary shares53,368,000 ordinary shares 533,680,000 213,472,000
Allotted and Fully paidBalance as at 01.04.2010 - 21,347,200 Ordinary shares 213,472,000 213,472,000
Bonus Share Issue in November 2010
3 for every 2 held 32,020,800 Ordinary Shares 320,208,000 -
Balance as at 31.12.2010 - 53,368,000 Ordinary shares 533,680,000 213,472,000
35 Statutory reserve fundBalance at the beginning of the period 86,536,033 83,536,033
Transfers during the period - 3,000,000
Balance at the end of the period 86,536,033 86,536,033
36 General reserveBalance at the beginning of the period 638,018,392 638,018,392
Transfers during the period (320,208,000) -
Balance at the end of the period 317,810,392 638,018,392
Senkadagala Finance Company LimitedNotes to the Financial Statements
The company's statutory reserve fund was created according to the Direction No. 1 of Central Bank Regulations of
2003.
General reserve represents amount set aside by the Directors for future expansions and to meet any contingencies.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
158
For the period ended 31st December 2010
37 Related party transactions
37.1 Transactions with related entities
37.1.1 E.W.Balasuriya & Company (Pvt) Ltd
a)
2010 2009 Rs. Rs.
Colombo Branch 1,205,361 921,466
Aluthgama Branch 602,676 491,106
Negombo Branch 588,614 457,156
Wattala Yard 196,199 43,3022,592,850 1,913,030
b)
37.1.2 Senkadagala Hotels Limited
The Company holds 32.27% approximately of the issued share capital of the Senkadagala Hotels Limited
37.2 Transactions with key management personnel (KMP) of the Company
37.2.1 Compensation of key management personnel2010 2009
Rs. Rs.
Short term employee benefits 2,773,500 2,411,750
Long term employment benefits - -
37.2.2
38 Commitments and contingencies38.1 Capital expenditure commitments
2010 2009 Rs. Rs.
Approved but not contracted for - 2,700,000
Approved and contracted for 50,000,000 1,700,00050,000,000 4,400,000
38.2 Contingent liabilities
39 Event after the balance sheet date
The Company paid dividend of Rs.13,840,503 during the period ended 31st December 2010 (2009 - Rs.21,430,082)
to E.W.Balasuriya & Company (Pvt) Ltd.
The key management personal are entitled to gratuity provisions as per the provisions laid down by the Act
Post Employment benefits to key management personnel
There were no material events occurring after the Balance Sheet date that require adjustment to or disclose in the
Financial Statements.
According to Sri Lanka Accounting Standard 30 (Revised 2005) Related Party Disclosures, Key management
personnel, are those having authority and responsibility for planning, directing and controlling the activities of the
entity. Accordingly members of the Board of Directors of the Company (including executive and non executive
Directors), and of the Ultimate Parent Company have been classified as key management personnel of the Company.
Capital expenditure approved by the Board of Directors for which provision has not been made in the financial
statements amounted to approximately the following|:
Senkadagala Finance Company LimitedNotes to the Financial Statements
Mr. E. W. Balasuriya, Mr. L. Balasuriya, Mr. R. Balasuriya, Dr. M. Balasuriya, Dr. A. Balasuriya and Mrs. L.
Fernando Directors of the Company are also the Directors of Senkadagala Hotels Limited.
There were no contingent liabilities as at the balance sheet date, which require adjustments to or disclosures in the
Financial Statements.
The Company operates its Kandy branch office in the premises of Senkadagala Hotels Limited, and has paid
Rs.393,250 to Senkadagala Hotels Limited, as rent for the year ended 31st December 2010. (2009/10 - Rs.590,850)
The Company being a subsidiary company of E.W.Balasuriya & Company (Pvt) Ltd., Mr. E. W. Balasuriya, Mr. L.
Balasuriya, Mr. R. Balasuriya, Dr. M. Balasuriya, Dr. A. Balasuriya, Mrs. L. Fernando and Dr.Mrs. Gayathri Madan
Mohan Directors of the Company are also the Directors of E. W. Balasuriya & Company (Pvt) Ltd., with which the
Company had the following transactions.
The Company operate its following branch offices in the premises of E.W.Balasuriya & Company (Pvt) Ltd., and has
paid rent expenses for the respective branches as follows.
SENKADAGALA FINANCE COMPANY LIMITEDINTRODUCTORY DOCUMENT
159
As at 31st December 2010
40 Maturity Analysis
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.12.2010
Interest Earning Assets Rs Rs Rs Rs Rs
Bank and Cash Balances 86,972,119 - - - 86,972,119
Deposits With Banks & other institution 294,296,996 - - - 294,296,996
Government Treasury bills - 175,061,347 - - 175,061,347
Dealing securities - 17,694,467 - - 17,694,467
Investment securities - - - 14,165,755 14,165,755
Stock out on hire 744,941,479 1,634,486,359 1,316,482,029 1,367,667,126 5,063,576,993
Debtors 83,647,238 77,563,531 10,221,452 19,005,786 190,438,006
Total Interest Earning Assets 1,209,857,832 1,904,805,703 1,326,703,480 1,400,838,667 5,842,205,683
Non Interest Earning AssetsProperty, plant and equipment - - - 389,429,905 389,429,905
Total Assets 1,209,857,832 1,904,805,703 1,326,703,480 1,790,268,572 6,231,635,588
Percentage (%) 31.12.2010 19.41 30.57 21.29 28.73 100.00
Up to 3 3 to 12 1 to 3 More than Total as atMonths Months years 3 years 31.12.2010
Interest bearing liabilities Rs Rs Rs Rs Rs
Deposits 226,626,454 1,487,155,386 320,441,579 45,245,756 2,079,469,175
Certificate of deposits - 2,811,720 - - 2,811,720
Saving accounts - 80,854,245 - - 80,854,245
Bank overdraft 16,164,626 - - - 16,164,626
Assets Securitization Funds 217,792,913 467,247,080 437,517,848 - 1,122,557,842
Debentures 40,000,000 159,000,000 831,000,000 240,000,000 1,270,000,000
Total Interest Bearing Liabilities 500,583,993 2,197,068,431 1,588,959,427 285,245,756 4,571,857,608
Non Interest Bearing Liabilities 133,120,946 212,086,656 - 285,634,266 630,841,868
Total Liabilities 633,704,939 2,409,155,087 1,588,959,427 570,880,022 5,202,699,476
Percentage (%) 31.12.2010 12.18 46.31 30.54 10.97 100.00
Shareholders' Funds - - - 1,028,936,112 1,028,936,112
Total Shareholders' Funds and Liabilities 633,704,939 2,409,155,087 1,588,959,427 1,599,816,135 6,231,635,588
Senkadagala Finance Company Limited
An analysis of the total assets employed and the total liabilities of the Company as at 31st December 2010, based on the remaining
period from the balance sheet date to the respective contractual maturity dates is given below.
Notes to the Financial Statements
SEN
KA
DA
GA
LA F
INA
NC
E C
OM
PAN
Y LI
MIT
EDI N
TRO
DU
CTO
RY
DO
CU
MEN
T
160
For t
he pe
riod e
nded
31st
ecem
er
41Se
gmen
t rep
ortin
g
s at 3
1st
ecem
er20
1020
0920
1020
0920
1020
0920
1020
0920
1020
0920
1020
0920
1020
09R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.R
s.
Rev
enue
Inte
rest
165,
146,
790
220,
652,
996
749,
989,
619
641,
800,
765
33,7
69,6
36
43
,621
,662
51
,645
,370
50
,438
,097
-
-
-
-
1,
000,
551,
415
95
6,51
3,52
0
Com
mis
sion
s-
-
-
-
-
-
-
-
41
,097
,922
35
,234
,691
-
-
41
,097
,922
35
,234
,691
-tne
R
-
-
-
-
-
1,44
0,00
0
1,44
0,00
0
-
-
-
-
1,44
0,00
0
1,44
0,00
0
-sdnedivi
D
-
-
-
-
-
80
6,57
4
34
1,12
3
-
-
-
-
80
6,57
4
34
1,12
3
Oth
er in
com
e15
,618
,510
1,
288,
989
965,576,071
15
4,13
2,65
5
186,
294,
079
155,
421,
644
Tot
al r
even
ue16
5,14
6,79
0
22
0,65
2,99
6
74
9,98
9,61
9
64
1,80
0,76
5
33
,769
,636
43,6
21,6
62
69,5
10,4
54
53,5
08,2
09
41,0
97,9
22
35,2
34,6
91
170,
675,
569
15
4,13
2,65
5
1,23
0,18
9,99
0
1,14
8,95
0,97
8
Prof
it b
efor
e ta
x 25
9,75
3,56
5
10
9,39
9,23
8
Tax
atio
n(9
8,70
2,75
3)
(5
1,55
3,49
1)
Prof
it a
fter
tax
161,
050,
812
57,8
45,7
47
Segm
ent A
sset
s 49
1,45
7,35
1
56
4,05
2,11
4
3,
720,
063,
290
3,
185,
716,
637
19
3,76
6,64
8
274,
077,
811
991,
695,
474
1,12
3,79
4,07
7-
-
834,
652,
825
73
0,31
0,82
1
6,23
1,63
5,58
8
5,87
7,95
1,45
9
Segm
ent
Lia
bili
ties
722,
575,
771
1,02
9,83
8,48
0
3,28
1,47
0,54
6
2,83
4,78
7,55
6
147,
754,
133
19
6,72
2,54
230
4,13
2,88
6
23
1,91
5,94
4-
-
746,
766,
140
68
7,66
3,26
5
5,20
2,69
9,47
6
4,98
0,92
7,78
6
Una
lloca
ted
Inve
stm
ents
/ Pr
oper
tyT
otal
Insu
ranc
e
Senk
adag
ala F
inan
ce C
ompa
ny L
imite
d
Hir
e Pu
rcha
ses
secnavdA reht
Ognisae
L
otes t
o the
Fina
ncial
State
ments