Part written off, no fraud alleged
Sierra Cables PLC has posted a loss of Rs.306.5 million after tax in the year ended March 31, 2014, up from a loss of Rs.24.6 million a year earlier on account of certain unrecorded transactions and discrepancies in its accounts that have not been described as a fraud in the company’s annual report.
"Operational performance this year was undermined pursuant to the identification of certain unrecorded transactions as well as discrepancies between the physical stock of inventory and recorded balances, in relation to both prior and current year," the company’s Chairman Mr. Priyantha Perera has told shareholders in the annual report.
"These unrecorded transactions and discrepancies were quantified following a report from the auditors. The current year’s financial statements now incorporate the unrecorded revenue, expenses and assets, while a part of the value of inventories and finished goods were written-off."
The company’s Auditors, KPMG, has issued a qualified opinion on the group results saying that certain transactions relating to the operations of the company had neither been recorded in the general ledger nor in the financial statements of the company up to March 31, 2014.
Sierra Cables PLC has posted a loss of Rs.306.5 million after tax in the year ended March 31, 2014, up from a loss of Rs.24.6 million a year earlier on account of certain unrecorded transactions and discrepancies in its accounts that have not been described as a fraud in the company’s annual report.
"Operational performance this year was undermined pursuant to the identification of certain unrecorded transactions as well as discrepancies between the physical stock of inventory and recorded balances, in relation to both prior and current year," the company’s Chairman Mr. Priyantha Perera has told shareholders in the annual report.
"These unrecorded transactions and discrepancies were quantified following a report from the auditors. The current year’s financial statements now incorporate the unrecorded revenue, expenses and assets, while a part of the value of inventories and finished goods were written-off."
He said that these adjustments triggered a considerable negative impact on the operating results of the year under review and disclosures regarding these matters had been made to the Colombo Stock Exchange.
Sierra had meanwhile initiated action to rectify and prevent such occurrences in the future, Perera said.
One of Sierra’s Associate companies, T&G Lanka (Pvt) Limited reported a profit of Rs.0.36 million in the year under review against a loss of Rs.5 million the previous year while Tea Leaf Resorts Holdings (Pvt) Limited reported a loss of Rs.0.7 million against a loss of Rs.0.05 million in 2013. Perera said that this company was presently awaiting approval to commence operations.
Of the two subsidiary companies, Sierra Industries (Pvt) Limited engaged in manufacturing PVC pipes, had commenced commercial operations in 2012.
However its operational results have been affected by a delay in receiving anticipated commercial orders for water supply schemes from within the group, lower than forecast margins and delay in obtaining SLS Standard for fittings.
"Several measures were implemented to arrest losses, including strengthening the sales team and the debt collection process," Perera said.
He also reported that Sierra Power (Pvt) Limited focused on mini hydro projects has commenced civil construction work.
"Whilst our inherent strengths and resilience enabled us to surmount challenges, the disquieting occurrence this year has strengthened our resolve to fortify our internal control systems, an aspect we have undertaken without delay," Perera said.
"Measures have been introduced to tighten and improve internal processes as well as our computerized systems so as to augment our risk management framework."
He also announced Sierra had a major order worth over Rs.1 billion which will contribute significantly to their growth plans.
"The ensuing year will probably pose its own share of challenges. Nonetheless, the improved prognosis for infrastructure development and national development offers considerable business opportunities for our diverse business segments," he said.
Sierra had meanwhile initiated action to rectify and prevent such occurrences in the future, Perera said.
One of Sierra’s Associate companies, T&G Lanka (Pvt) Limited reported a profit of Rs.0.36 million in the year under review against a loss of Rs.5 million the previous year while Tea Leaf Resorts Holdings (Pvt) Limited reported a loss of Rs.0.7 million against a loss of Rs.0.05 million in 2013. Perera said that this company was presently awaiting approval to commence operations.
Of the two subsidiary companies, Sierra Industries (Pvt) Limited engaged in manufacturing PVC pipes, had commenced commercial operations in 2012.
However its operational results have been affected by a delay in receiving anticipated commercial orders for water supply schemes from within the group, lower than forecast margins and delay in obtaining SLS Standard for fittings.
"Several measures were implemented to arrest losses, including strengthening the sales team and the debt collection process," Perera said.
He also reported that Sierra Power (Pvt) Limited focused on mini hydro projects has commenced civil construction work.
"Whilst our inherent strengths and resilience enabled us to surmount challenges, the disquieting occurrence this year has strengthened our resolve to fortify our internal control systems, an aspect we have undertaken without delay," Perera said.
"Measures have been introduced to tighten and improve internal processes as well as our computerized systems so as to augment our risk management framework."
He also announced Sierra had a major order worth over Rs.1 billion which will contribute significantly to their growth plans.
"The ensuing year will probably pose its own share of challenges. Nonetheless, the improved prognosis for infrastructure development and national development offers considerable business opportunities for our diverse business segments," he said.
The company’s Auditors, KPMG, has issued a qualified opinion on the group results saying that certain transactions relating to the operations of the company had neither been recorded in the general ledger nor in the financial statements of the company up to March 31, 2014.
"The company has neither followed the established accounting procedures nor used the accounting system of the company for recording and accounting for these transactions as it had followed for recording and accounting for other transactions of the company up to 31st March 2014," the Auditors have said.
Sierra Holdings (Pvt) Limited with 58.11% is the controlling shareholder of the company followed by Browns Investments (5.99%) and Mr. D.S. Panditha (3.17%). The EPF too owns 1.51%.
Sierra Holdings (Pvt) Limited with 58.11% is the controlling shareholder of the company followed by Browns Investments (5.99%) and Mr. D.S. Panditha (3.17%). The EPF too owns 1.51%.
Sierra has a stated capital of Rs.894.6 million, retained earnings of Rs.40.5 million, a fair value reserve of Rs.87.8 million and revaluation reserve of Rs.332.9 million in its books.
Total assets ran at Rs.3.02 billion and total liabilities at Rs.1.65 billion.
Net assets per share were down to Rs.2.52 from Rs.3.08. The Sierra share traded at a low of Rs.1.60 and a high of Rs.2.70 during the year under review against a trading range of Rs.2 to Rs.3.70 the previous year.
The directors of the company are: Messrs. W.A.P. Perera (Chairman), D.S. Panditha (MD/CEO), G.S.M. Irugalbandara, D. Lokuge, J.P. Ratnayeke, E.A.D.T.B. Perera, Dr. D.G.K.E. Weerapperuma, Prof. A.K.W. Jayawardane, B.W.N. Rupasinghe and P.R. Saldin.
www.island.lk
Total assets ran at Rs.3.02 billion and total liabilities at Rs.1.65 billion.
Net assets per share were down to Rs.2.52 from Rs.3.08. The Sierra share traded at a low of Rs.1.60 and a high of Rs.2.70 during the year under review against a trading range of Rs.2 to Rs.3.70 the previous year.
The directors of the company are: Messrs. W.A.P. Perera (Chairman), D.S. Panditha (MD/CEO), G.S.M. Irugalbandara, D. Lokuge, J.P. Ratnayeke, E.A.D.T.B. Perera, Dr. D.G.K.E. Weerapperuma, Prof. A.K.W. Jayawardane, B.W.N. Rupasinghe and P.R. Saldin.
www.island.lk
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