Tuesday 16 December 2014

Overdue Lanka Cement accounts arrive Results disappoint after damming 2011 Audit Report

By J. Kurukulasuriya

Ceylon Finance Today: Lanka Cement PLC simultaneously released its financial statements for the quarters ended 31 March and 30 June 2014, on Friday 12 December, showing that their cost of sales expenses for the six months of. operations rose 17% over the previous corresponding period and interest expense has gone from zero to 782,000 resulting in a net loss of Rs 2.5 million as against the comparable 2013 loss of Rs 517,000.

In the report and accounts for the year ended 31 December 2011, which is the most recent set of audited accounts released by the Lanka Cement Company, N. S. M. Samsudeen attorney-at-law Chairman/Managing director states, "I assumed duties as the chairman of Lanka Cement PLC in July 2012. We assure all share holders that the company will be uplifted into a profit generating enterprise in the near future". This was in spite of having incurred an operational loss for the year 2010 of Rs 39,338,269 and Rs 34,735,581 for the year 2011.


The auditor could not verify the existence or value of the company's property, plant and equipment at the time — it said—, "We were not received (sic) satisfactory documentary evidence in respect of following property, plant and equipment. Hence, we are unable to satisfy ourselves as to the existence, accuracy and value of the property, plant & equipment as at 31 December2011. Satisfactory evidence was not made available in respect of the deferred grant amounting Rs 94,785,639 and government grant amounting Rs 9,259,621".

Further criticizing the company the auditor said, — "We also draw attention that (sic) the adverse financial indicators of the company. The company incurred consecutive year net loss of Rs 34,560,582 during the year ended 31 December, 2011 and, there is an accumulated loss of Rs 1,785,491434 as of that date. The company's total liabilities exceeded its total assets by Rs 50,383,953 (Previous year Rs 15, 823, 372).These factors raise substantial doubt that the company will be able to continue as a going concern". In conclusion they said — "we do NOT express an opinion on the financial statements of the company."


On the balance sheet, Lanka Cement has an issued capital of Rs 1,735 million, with accumulated losses of Rs 2.3 billion. It has a PB ST loan of Rs 7.5 million. The share capital consists of 173,510,748 ordinary shares.

By comparison with its competitor, Ceylon FT recently reported on the accounts of Tokyo Cement, which has a stated capital of Rs 2,890 million, with reserves of Rs 6,700 million. It had a six month profit of Rs 1,179 million for the six months to 30 September.


A new board of five Lanka Cement directors took office on 26 July 2012. They were — Noor Salim Mohamed Samsudeen, Jayasuriya Kuranage Nishan Chaminda Perera, Chintaka Jeevantha Wijesekera, Tiramadura Manik Arjuna Jayasinghe, and Lal Wijesekera Abeynayake.

Lanka Cement operates a concrete yard at KKS to supply concrete blocks and paving blocks for housing projects and road works. "My vision for the company is to install a grinding/Packing plant at KKS and cater to the Rehabilitation, Resettlement Programme started by the government in the Northern Province", the chairman said at the time.

The company's total equity went from Rs 32 million in 2007 to Rs minus 51 million (negative equity) on 31 December 2011, the date of the last audited accounts. The audit was carried out by Udayasiri Kariyawasam & Company Chartered Accountants.

There were 4,605 shareholders.

Lanka Cement's major shareholder and the controlling company is Ceylon Cement Corporation 62%, and the Secretary General to the Treasury holds 12%. The People's Bank has six per cent with over 10 million shares, and Ceylon Petroleum Corp five million shares. Among individual shareholders, Thirugnanasambandar Senthilverl has 158,200 shares and E. Thavagnanesooriyam 4,787,814 shares.

The public holds 25% of the shares in the company, none of the directors hold shares.
www.ceylontoday.lk

No comments:

Post a Comment