tokyo cement -annual report 2010
TRANSCRIPT
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A N N U A L R E P O R T - 2 0 1 0
TheEastern Prideof a
Resurgent Nation
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A N N U A L R E P O R T - 2 0 1 0
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CORPORATE INFORMATION
NAME OF THE COMPANY Tokyo Cement Company (Lanka) PLC
REGISTRATION NO. PQ 115
LEGAL FORM A Public Quoted Company with Limited Liability, Incorporated
in Sri Lanka in 1982
BOARD OF DIRECTORS
Mr. Edgar Gunatunga Chairman, Non-Executive Independent Director
Mr. S. R. Gnanam Jt. Managing Director
Mr. K. Yanagihara Jt. Managing Director, Nominee Director of Nippon
Coke & Engineering Company Limited, Japan
Mr. A. S. G. Gnanam Non-Executive Director
Mr. E. J. Gnanam Non-Executive Director
Mr. R. Seevaratnam Non-Executive Independent Director
Dr. Harsha Cabral Non-Executive Independent Director
Mr. Tooru Tanimura
Mr. Shiro Takihara Nominee Directors of Nippon Coke & Engineering
Company Limited, Japan
Mr. S. V. Wanigasekera
COMPANY SECRETARY Seccom (Private) Limited,
1E - 2/1, De Fonseka Place, Colombo 5
T-Phone: 2590176 Fax: 2551386
E-Mail: kmaahamed@hotmail .com
HEAD OFFICE 469 - 1/1, Galle Road, Colombo 3
T-Phone: 2587619 Fax: 2500897
Website: www.tokyocement.lk
SUBSIDIARY COMPANIES Fuji Cement Company (Lanka) Limited
Tokyo Cement Colombo Terminal (Pvt) Limited
Tokyo Super Cement Company Lanka (Pvt) Limited
Tokyo Cement Power (Lanka) Limited
AUDITORS BDO Partners (Chartered Accountants)
Sir Chittampalam A. Gardiner Mawatha,
Colombo 2
LEGAL ADVISORS Murugesu & Neelakandan (Attorneys-at-Law)
2, Deal Place,
Colombo 3
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To actively participate in Sri Lanka’s ConstructionIndustry effort towards achieving global standards
by providing cement of high quality, better yield
and affordabil ity while meeting changing customer
requirements to satisfaction.
The Mission
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ContentsFINANCIAL REPORTS
06 Socially Responsible Growth
07 Financial Highl ights
09 Corporate Profi le
MESSAGES TO STAKEHOLDERS
11 Board of Directors
13 Chairman’s Review
15 Message from the President of Nippon Coke & Engineering Co. Ltd.,
16 Joint Managing Directors’ Message
OUR CONTRIBUTION TO SOCIETY
23 Report of the Directors30 Corporate Governance
32 Corporate Governance Disclosures under CSE l isting rules
34 Directors’ Responsibil ities
PERFORMING ON YOUR BEHALF
35 Audit Committee Report
36 Social Impact Report
ACHIEVEMENTS
41 Shareholders’ and Investors’ Information
49 Independent Auditor’s Report
51 Income Statement
52 Balance Sheet
SAFEGUARDING YOUR ASSETS
54 Statement of Changes in Equity
55 Cash Flow Statement
58 Notes to the Financial Statement
86 Five-Year Summary
88 Notice of Meeting
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 07
FINANCIAL HIGHLIGHTS - 2009/10
PROFIT AFTER TAXATION
Year Rs. Mn
Year
200 400 600 800 1,000 1,200 0
2006
2010
2007
2009
2008
Rs. Mn
2006 640
2007 824
2008 572
2009 357
2010 351
CAPITAL INVESTMENTS DURING PAST 05 YEARS
Year Rs. Mn
Year
2,000 4,000 6,000 8,000 10,000 12,000 14,000 0
2006
2010
2007
2009
2008
Rs. Mn
2006 5,292
2007 7,814
2008 9,766
2009 12,200
2010 13,283
CAPITAL EMPLOYED - GROUP
Year Rs. Mn
Year
1,000 2,000 3,000 4,000 5,000 6,000 0
2006
2010
2007
2009
2008
Rs. Mn
2006 3,817
2007 4 ,485
2008 5,005
2009 5,243
2010 5,531
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TOKYO CEMENT COMPANY (LANKA) PLC
Performance Highlights
Consolidated Company
Rs. Mn 2010 2009 2010 2009
PERFORMANCE
Turnover
Less: Cost of Sales
Gross Profit
Profit Before Tax
Profit Attributable to Ordinary Shareholders
INFORMATION TO SHAREHOLDERS
Earnings Per Share - Voting
Earnings Per Share - Non-Voting
Dividend Per Share - Voting
Dividend Per Share - Non-Voting
Net Assets Value Per Share
Market Value Per Share - Voting
Market Value Per Share - Non-Voting
KEY FINANCIAL INDICATORSReturn on Capital (ROCE)
Interest Cover
Price Earnings Ratio - Voting
Price Earnings Ratio - Non-Voting
Current Ratio
Quick Asset Ratio
17,652
(14,933)
2,719
647
357
1.28
1.28
0.30
0.30
20.00
125.00
9.00
27%
1.78
97.37
7.03
0.53:1
0.33:1
14,737
(12,456)
2,281
347
351
1.37
1.37
1.65
1.65
21.00
28.00
17.75
21%
1.41
20.47
12.98
0.62:1
0.49:1
6,045
(5,352)
693
143
143
0.53
0.53
0.30
0.30
12.10
125.00
9.00
6%
3.2
236.18
16.98
0.55:1
0.35:1
OPERATING HIGHLIGHTS
Group
Turnover decreased by 16.5% (To Achieve Rs. 14.7 Bn)
Pre-Tax Profit and Post-Tax Profit Rs. 347 Mn and Rs. 351 Mn respectively
Total assets decreased by 8% (To reach Rs. 12.4 Bn)
Company
Turnover grew by 1.3% (To Achieve Rs. 6.1 Bn)
Pre-Tax Profit and Post-Tax profit Rs. 1.464 Bn and Rs. 1.461 respectively
Total assets grew by 5% (To reach Rs. 7.8 Bn)
Ratios of the previous year have been restated.
TheEastern Pride
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6,125
(4,835)
1,290
1,465
1,461
5.41
5.41
1.65
1.65
17.20
28.00
17.75
37%
6.73
5.17
3.28
0.88:1
0.76:1
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 08
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A new decade! a new beginning!
The conclusion of the 2009/10 financial year ushers a new decade in which Tokyo Cement Company (Lanka) PLC
would also mark a corporate milestone of its own successful existence of three decades.
Our progress during the past 28 years has been recognized as rewarding to multiple stakeholders, consistent
and exemplary. For the Board of Directors, the management as well as the entire staff, the progress of
Tokyo Cement has been inspiring. The reason being every year of the past 28 years has delivered many challengestesting our resolve; yet we have braved many an adversity successfully. We as a good corporate citizen and a
strategically important enterprise for the economy have endeavoured to do the best and be the best.
The financial year 2009/10 epitomizes this corporate character of Tokyo Cement Company (Lanka) Plc.
Strong effects of a depressed economy were widely felt across the cement market as a result of a downturn
in construction activiti es. The Tokyo Cement Group in particular has been forced to operate in an environment
of successive years of declines in the market leading to contraction in output. When other corporates tend to
lose opportunities to improve during downturn, at Tokyo Cement, challenges strengthen the effort to keep
raising the bar in terms of efficiency, cost management as well as other best practices across the value chain.
It is through such inward looking holistic approach that Tokyo Cement has been able to outperform the cement
industry in tough years as well as other corporates in relatively good times.
In a year when economy could only manage to grow by perhaps one of the lowest ever rate of 3.5% and
national cement output contracted by 30%, Tokyo Cement fared better. Despite turbulent conditions in the
cement industry, Tokyo Cement retained its market leadership. Our portfolio of products namely Nippon,
Tokyo Super - Super Portland Cement, Tokyo Super - Super Pozzolana and last year’s innovati on Tokyo Super
- Super Masonry continue to enthral the market with the best quality and reliabil ity as well as value for money.
More importantly Tokyo Cement was also able to secure the same profitabil ity levels, that were achieved in
2008/9 financial year.
The resilience of the Company and the Group was more pronounced, especially in the fourth quarter of 2009/10
financial year when the construction sector began to rebound. This manifests the core strength of the Group to
maximize performance on the upturn and manage better in a downturn. Today, Tokyo Cement is a Group with
an installed capacity of near 2 million tons of cement, 500 employees and over Rs. 12 billion in assets.
Better times are certainly on the cards as evident by the fact that economy grew by 7% in the first quarter of calendar
year 2010 and forecast of 7% growth overall for the year. In the medium term projections are a high 8% to 10%
economic growth. As the country at large savours the initial benefits of the end of war, people of all communities are
hopeful of a fresh decade as well as a new era of unprecedented opportunities to enhance their socio-economic
prosperity. We at Tokyo Cement too are ready to take part in the rebuilding of Sri Lanka and serve the rebound.
Our past reinvestment of profits retained after distribution among multiple stakeholders in the core business has
put Tokyo Cement in good stead to leverage the new opportunities.
CORPORATE PROFILE
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TheEastern Pride
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In 2008/09 financial year the Group invested over Rs. 4 bil l ion for a new highly effic ient and advanced Vertical
Roller Mil as well as in a pioneering 10 MW Bio Mass eco-friendly power plant. These have been further
consolidated in the current financial year whilst plans are underway to expand capacity and foray into new
ventures in tandem with the upturn in the construction sector.
Despite externally 2009/10 was yet another year of challenges s everal new initiatives bore fruits within Tokyo
Cement Group.
The launch of cement based tile bond with two variants as solutions for new surfaces and existing surfaces or
tile on tile was a key milestone as part of product extension strategy tapping new markets especially as
Sri Lankan households are fast converting to ti les. The launch was possible owing to enhanced Research and
Development (R&D) efforts within the Group. Last year we launched pre-packed concrete as a solution to
individual and small and medium scale construction segments’ needs.
The management reviewed all cost aspects as a consciou s strategy to improve cost and operational ef ficiency.
Work was also undertaken in the year under review to prepare for the implementation of a state-of-the-art
Enterprise Resource Planning (ERP) software solution in 2010/11 financial year.
These overall measures wil l help in the management’s zeal to make Tokyo Cement efficient and leverage a
more agile organization to harness new growth opportunities and meet present demand cost effectively.
Preliminary efforts were also made towards incorporating a wholly owned subsidiary Tokyo Cement Power
(Lanka) Ltd., for setting up of and operation of a power generation plant for util ization of the power generated
by it for the supply to the national grid.
In a bid to better serve the post-war construction boom in the North, the Company also plans to invest
Rs. 60 mil l ion in putting a ready mix concrete plant in Jaffna in the new financial year. This wil l increase the
number of ready mix concrete plants to seven.
We continue to focus on sustainabil ity of our operat ions whilst preserving the env ironment in which we operate.
As part of continuous improvement from our pioneering position as the first corporate to secure ISO 14001Environmental Standards Certification, the Company invested further in making our operations in the
Trincomalee Jetty more environment friendly.
To our shareholders Tokyo Cement has been a corporate that strives to enhance value with many key initiatives
finalized in 2009/10 and for implementation in the New Year.
Midst unprecedented opportunities, th e way forward for Sri Lanka as an exemplary global citizen faces many
challenges. Addressing them early with bold and pragmatic solutions would quicken the forward march.
The nation as a collective force must unite with courage and confidence.
As Sri Lanka embraces a new era of permanent peace and rapid socio-economic development, the
persevering Tokyo Cement too remains committed and ever wil l ing to enhance its contribution to the country
and all other stakeholders, l ike it has done for the past 28 years.
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 10
CORPORATE PROFILE
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BOARD OF DIRECTORS
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 11
Mr. S.R. GnanamJoint Managing Director
Mr. Edgar Gunatunga Chairman
Mr. S.V. WanigasekeraDirector
Mr. K. YanagiharaJoint Managing Director
Mr. E.J. GnanamDirector
Mr. A.S.G. GnanamDirector
Dr. Harsha Cabral
Director
Mr. R. Seevaratnam
Director
Mr. S. MoriDirector (Resigned on 28th June 2010)
Mr. T. Uetake
Director (Resigned on 28th June 2010)
Mr. W.C. FernandoGroup General Manager
Director, Fuji Cement, Tokyo Super Cement &Tokyo Cement Colombo Terminal
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TheEastern Pride
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The period under review, April 2009 - March 2010, was an eventful period in th e country. In May, the
Government security forces completely annihilated the Northern terrorists who were waging a war
against the State fighting for a homeland in the North & East for the past 29 years at great cost in men
and resources. It was the political wil l of the State that decided for a mil itary adventure which brought
about the welcome victory. The President seeing his popularity being enhanced, decided to call for a
poll to re-elect him for a second term, prematurely, which he won convincingly. In April, parliamentary
elections were held and the ruling party together with a few insignificant political parties was returnedto power with an increased majority. These events would augur well for the prosperity of the country.
Due to the continuing war situation that prevailed during the period and the slow recovery of the slow
down in the global economy, construction industry in the country was sluggish. In point of fact, there
were hardly any mega buildings and apartment projects. However, due to Company’s foreign
connections, it was successful in securing orders mainly from foreign contractors who were engaged in
mega projects in the country.
The Company’s performance is considered fairly satisfactory. The consolidated profit of the Group was
Rs. 351 mil l ion as against Rs. 357 mil l ion during the previous period. The profits of the Company was
Rs. 1.4 bil l ion as against Rs. 143 mil l ion in the previous year. The substantial increase in profit was due
to Rs. 1.1 bil l ion dividend being received from subsidiary company, Fuji Cement, out of that Company’s
carried forward tax free profits. The Company’s drop in profits was cushioned to some extent by
reduced cost in raw materials and substantial savings in cost of electricity, due to Company’s own
power generation.
Due to sluggish demand, the capacity util ization of the plants of the Company and that of its subsidiary
Tokyo Super Cement was 60%. Due to the said reason, the operations of Fuji Cement was marginal.
The contribution from the subsidiary company, Tokyo Cement Colombo Terminal was also in the
negative due to the reasons stated. The Company’s fleet of three vessels provides a useful service for
imports of raw materials. Using Company’s own ships at tracts low rates of import duties. Notwithst anding
the fierce competition in the l ine of trade, the contributions from the Company’s six batching plants were
satisfactory. The Bio Mass electricity generation plant commissioned in October 2008 at a substantialcost has proved to be a wise investment. It not only generates plant’s entire requirements at costs far
below the cost from the national grid, but it also generates excess power to be sold to the nationa l grid.
The Company enjoys tax free period until year 2013, and the subsidiary, Tokyo Super Cement, until
2018. The tax free period of Fuji Cement lapsed in 2008.
CHAIRMAN’S REVIEW
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What is my forecast for the ensuing year ! Although the war scenario is now history, I do not see rapid
recovery of building projects in the South during the ensuing year. However, due to destruction from
the war in the North & East, I foresee considerable development in these areas . To meet the increased
demand in the North, a batching plant is currently being installed in the Peninsula. The upshot of these,
I predict, the Company will record a substantial increase in profitabil ity in the ensuing year. However,
I express a concern in that the CEPA which is being currently discussed may contain provisions enabling
India to export to the country at further concessionary terms. It is hoped that the authorities wil l takecognizance of the interest of the local industries prior to signing the agreement.
The Company is fortunate in having a committed workforce and I take the opportunity to record my
appreciation for their good work and commitment. I also thank my colleagues in the Board for their
valuable contribution and co-operation.
Thank you
Edgar Gunatunga Chairman
17th August, 2010 Colombo
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CHAIRMAN’S REVIEW
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On behalf of the Japanese Joint Venture Partner, I would l ike to express our heartfelt appreciation to
the shareholders of Tokyo Cement Company (Lanka) PLC for the confidence they had placed in the
members of the Board.
I would l ike to thank the dealers and customers of Tokyo Cement Group for special consideration.
Also, management staff and employees of Tokyo Cement Group for their contribution to the Company.
In Fiscal Year 2009/2010, it became such a situation that the produ ction adjustment has been taken d ue
to the influence of slowdown of the world economy since the Autumn of 2008. Consequently, the
cement demand was sluggish and the profit of the Tokyo Cement Group ha s maintained similar level of
profitabil ity in comparison to the previous year. However, the 'profit of the Tokyo Cement Group has
increased substantially due to receipt of dividend from the subsidiary company Fuji Cement and
considerable cost saving of electricity from the Bio Mass Power Plant.
The Northern Province became peaceful recently and reconstruction and revival projects are being
proceeded gradually in this area. Hence, cement demand is expected to increase substantially.
I wish that Tokyo Cement Group will grow more and more, and then contribute to the construction
industry to a great degree.
I hope the Fiscal Year 2010 would be a prosperous year for Tokyo Cement Group.
Kiyoaki Ogura President
Nippon Coke & Engineering Co. Ltd.
17th August, 2010
MESSAGE FROM THE PRESIDENT OF NIPPON COKE & ENGINEERING CO. LTD.
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TheEastern Pride
of aResurgent Nation
The financial year that ended on March 31, 2010 was a mixed one for Tokyo Cement Plc. The year was
characterized by economic downturn i n the early part of the year whilst at the tail end a recovery was
evident.
In comparison to a 6% growth in 2008, the country’s Gross Domestic Product (GDP) improved by only
3.5% in 2009. The Central Bank described the growth rate of 3.5% as a demonstration of the resil ience
of the economy amidst global and local shocks. The growth rate would have been much lower if not fora strong recovery in the latter part of 2009. GDP grew by a high 6.2% in the last quarter of 2009 and
for Tokyo Cement benefits of economic revival began translating only in the first quarter of calendar
year 2010 and the last quarter of financial year 2009/10.
In 2009, all major sectors of the economy grew, though lower in comparison to 2008. The agriculture
sector recorded a low growth of 3.2% compared to a high growth of 7.5% in 2008. The industry sector
slowed down registering a growth rate of 4.2% compared to a growth of 5.9% in 2008 whilst the
services sector which accounts for 55% of GDP, grew by 3.3%, down from 5.6% in 2008. The
deceleration in the Industry sector was witnessed in all sub-sectors consisting of factory, industry and
construction sectors.
The construction sector in 2009 grew by 5.6% but a near 30% contraction in comparison to the 7.8%
growth enjoyed in 2008. Despite this contraction in growth between the two years, Construction
sector’s contribution to the change in GDP was 10.3% up from 8.4% in the previous year.
The output of non-metall ic mineral products category which was mainly contributed by the cement and
building materials industries registered a negative growth of 3.3% in 2009 due to the slowdown in the
construction sub-sector.
According to the Central Bank the recorded growth in construction sub-sector came from positive
contributions from public sector mega construction projects such as Norochcholai and Upper Kotmale
power plants, road network development projects such as the Colombo – Katunayake and Southern
Expressways and construction of several flyovers and other rural road development projects under the“Maga Neguma” programme.
The calendar year 2009 also saw a deceleration in housing construction as reflected by the drop in the
volume of building material imports by 24.1% in 2009 whilst cement imports contract ed by 15% and local
cement production declined by 7.4%.
Whilst performance of construction and cement industries in 2009 could be described as most
disappointing, there was a pick up in fortunes in early 2010 and Tokyo Cement is confident the trend
will continue.
The Government is forecasting an economic growth of over 6% in 2010 with a positive contribution
being made by all the major sectors of the economy. The release of first quarter GDP data confirms this
optimism as the economy grew by 7.1% in comparison to a weak corresponding period in 2009.
JOINT MANAGING DIRECTORS’ MESSAGE
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 17
FINANCIAL PERFORMANCE
The overall depressed economic and market conditions which prevailed in most part of the 2009/10
financial year had a direct bearing in the financial performance of Tokyo Cement.
The Group’s consolidated revenue was Rs. 14.7 bil l ion in 2009/10, which is 16.5% decline over the top
line performance recorded in the previous financial year. The Group’s gross profit after other income
declined by 5.4% to Rs. 2.7 bil l ion whilst we succeeded to achieve a net profit similar to the previous
year. In a financial year when most corporates saw decline in their bottom line, Tokyo Cement retaining
its profitabil ity levels intact is noteworthy. It must also be recorded that for the full year net profit figure,
Rs. 351 mil l ion.
This substantiates our assertion that t he economic recovery has begun to be more pronounced from the
start of the 2010 calendar year. This phenomenon also augurs well for the outlook for the upcoming
2010/11 financial year.
MARKET CONDITIONS
As explained earlier on, the cement market was besieged by low level of construction activities, both
commercial and household. Cement production was down by 30% to 3.4 mil l ion metric tons in calendar
year 2009. The downturn forced the Group to temporarily shut down the subsidiary Fuji Cement’s plant
whilst the capacity util ization of other plants was a low 60%. In l ine with pick up in economic and
construction activities, the Group has been expanding capacity util ization and output.
In 2009 price of cement also declined as demand was slack. This however helped to encourage the
will ing builders in a depressed economic environment. It must be noted that the major users of cement
in the year under review were state funded large-scale infrastructure projects as the overall
commercial segment was under performing. Though there are greater signs of economic revival,
commercial construction activities h ave not picked up in equal velocity. This is a challenge for the overall
construction sector as well as the cement sub-sector.
It must be emphasized that cement sector has seen two years of decline in overall demand and sales
in comparison to the previous years.
Despite turbulent conditions in the cement industry, Tokyo Cement retained its market leadership.Our portfolio of products, namely Nippon, Tokyo Super - Super Portland Cement, Tokyo Super - Super
Pozzolana and last year’s innovation Tokyo Super - Super Masonry continue to enthra ll the market with
the best quality and reliabil ity as well as value for money.
CONSOLIDATED REVENUE
Year Rs. Mn
Year
3,000 6,000 9,000 12,000 15,000 18,000 0
2006
2010
2007
2009
2008
Rs. Mn
2006 8,956
2007 11,308
2008 13,893
2009 17,652
2010 14,737
JOINT MANAGING DIRECTORS’ MESSAGE
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TheEastern Pride
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OPERATIONAL REVIEW
In 2008/09 financial year the Group invested over Rs. 4 bil l ion partly via bank borrowings for new
Vertical Roller Mill as well as the pioneering Bio Mass Power Plant. The first year of charging for
depreciation for the capital expenditure incurred was in 2009/10 which had an impact in the pre-tax
profitabil ity at Group level.
In terms of raw material, the year 2009/10 too was mixed with the early part seeing a decline due to
effects of the global recession but picking up with the rebound in the latter quarters.
As external conditions were depressed Tokyo Cement used the challenging times to look within for
process improvements. The management reviewed all cost aspects as a conscious strategy to improve
cost and operational efficiency. Work was also undertaken in t he year under review to prepare for the
implementation of a state-of-the-art Enterprise Resource Planning (ERP) software solution in 2010/11
financial year.
These overall measures wil l help in the management’s zeal to make Tokyo Cement efficient and
leverage a more agile organization to harness new growth opportunities and meet present demand
cost effectively.
It must be recalled that in the year 2008 Group successfully commissioned the highly efficient and
advanced Vertical Roller Mill along with the activation of the 10 MW Bio Mass eco-friendly power plant.
Benefits from the power plant helped the year und er review whilst the Roller Mill wil l enable the Group
to better service the evident rebound in the market in 2010/11.
Subsequent to the balance sheet date, the Company incorporated a wholly owned subsidiary Tokyo
Cement Power (Lanka) Ltd., for setting up and operation of a power generation plant to supply power
to the national grid.
During the year the Company also fully util ized a concessionary JICA funded cr edit scheme to the value
of Rs. 50 mil l ion via Bank of Ceylon to improve environmental-friendliness of the operations in the
Trincomalee Jetty.
The Group’s ready mix concrete solution branded Tokyo Supermix also performed satisfactorily in
2009/10. During the year we reactivated the plant in Anuradhapura makin g all six plants in the country
fully operational. Following the end of war, the Northern economy is rebounding and an increase in
medium scale commercial construction and house rebuilding is evident. To cater to this new demand
efficiently the Company plans to invest Rs. 60 mil l ion in putting a ready mix concrete plant in Jaffna in
the new financial year.
JOINT MANAGING DIRECTORS’ MESSAGE
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 19
PRODUCT DEVELOPMENT
The Company also focused on enhanced Research and Development (R&D) in 2009/10 financial year
the fruit of which was the launch of cement based tile bond with two variants as solutions for new
surfaces and existing surfaces or ti le on tile.
These two products were developed based on extensive market research which revealed that existing
products do not satisfy user expectations effectively.
With the increase in per capit a income more households are opting for floor and wall ti les. This together
with the growth in construction activities make the launch of cement based tile bond timely and augurs
well for their success.
The product extension initiative is part of Tokyo Cement’s continuous strategy of identifying new
opportunities in the market. Last year we launched pre-packed concrete as a solution to individua l and
small and medium scale construction segments’ needs.
ENHANCING SHAREHOLDER RETURNS
During the year under review, Tokyo Cement successfully completed the sub-division of its voting shares
on the basis of ten for one, thereby enhancing the l iquidity of the Company’s shares in the
Colombo Stock Exchange.
During the year, the Company also saw its share price improved. Price of voting shares peaked to a
high of Rs. 340 before sub-division as opposed to the highest of Rs. 192 in the previous year. After the
sub-division the share price peaked to a high of Rs. 28.
Subsequent the Balance Sheet date, in May the Company also proposed t he capitalization of reserves
worth Rs. 573.7 mil l ion on the basis of one for eight existing held for both voting and non-voting shares
at a consideration of Rs. 17 per share. Following shareholder approval for the capitalization of
reserves, 22,500,000 voting shares and 11,250,000 non-voting shares of the Company were l isted on
7th July 2010.
In August, 2010 the Company announced an in terim dividend of Rs. 1.65 per share for both voting and
non-voting shareholders for 2009/10 financial year.
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TheEastern Pride
of aResurgent Nation
FUTURE PROSPECTS
In our previous year’s Annual Report we emphasized that Sri Lanka as a nation is blessed with an
unprecedented opportunity to deliver high socio-economic growth following the end of the near
30-year old confl ict.
The country has begun to reap initial benefits of a Sri Lanka sans war. Tourism sector has been the firstbounce back with many leisure groups embarking on or announcing massive expansion. With your
Company’s fortunes directly l inked to the buoyancy of the construction sector, the new building or
improvements by the tourism sector is most welcome.
A great opportunity before a peaceful Sri Lanka is the overall rebuilding of the country, espec ially in the
North and East which was most ravaged by the war.
With post-war benefits also l ikely to encompass the industrial and agricultural sectors as well as the
overall economy of Sri Lanka, we remain optimistic of future prospects. A comfortably achievable 6% to
7% economic growth in the short-term and a high 8% to 10% growth envisaged in the medium to
long-term signify a new era of prosperity for Sri Lanka. The Government is also committed in the medium
term to doubling the per capita income to US$ 4,000 from the current $ 2,000.
These targets translate to higher construction activities at multiple levels of state, commercial and
households. All these point to an imminent economic resurgence in Sri Lanka in l ine with President
Mahinda Rajapakse’s new vision of making Sri Lanka the Asia’s wonder. A truly united, peaceful and
prosperous Sri Lanka is the overarching goal of people of all communities in the country.
We congratulate the Government for its bold vision and Tokyo Cement wil l strengthen itself to
contribute not only to the rebuilding of Sri La nka but also make it stronger and s uccessful. In this new era
of unprecedented opportunity it is important for the country to lay a solid foundation. As we have
repeatedly highlighted, the need for a national policy on construction sector as well as for cement
industry is paramount if Sri Lanka were to reap effectively and efficiently the true post-war potential.Such a national policy must take into heart the need to develop a viable and dynamic local cement
industry.
At present the capacity in the cement industry is underutil ized and this translates to waste of valuable
resources. The first milestone for the cement industry and the Government as a responsible and
pragmatic enabler of development is to ensure that the excess capacity is fully addressed. Tokyo
Cement which is nearing three decades of existence has been an integral part of Sri Lanka’s
development thus far by reinvesting profits for expansion and modernization.
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 21
Given our proven track record and long-standing commitment, we are confident Tokyo Cement is best
suited to lead the revival in cement industry, thereby lend a catalyst impetus to the overall construction
challenge of future Sri Lanka.
A more efficient public sector powered by competent and professional civil service sans personnel
co-opted from private sector with confl ict of interest, a robust public-private partnership for
infrastructure development, improved governance both at government and private sector level and a
greater degree of law and order with a ca ring society are some of the immediate priorities for th e new
post-war Sri Lanka.
The Government has thus far successfully managed to improve macro-economic environment with low
rates of interest and inflation and a stable exchange rate. These positives must be sustained withcontinued vigilance on fiscal management.
From a corporate perspective, in the new financial year Tokyo Cement wil l consolidate its operations
and investments made to date whilst gearing afresh and exploring new growth and expansion
opportunities. New capital expenditure for modernization, process improvements and greater cost
efficiency are in the pipeline for the next financial year (2010/11).
With Sri Lanka as a nation and corporates such as Tokyo Cement can plan ahead midst peaceful times.
We have set our sights to become a fully integrated cement manufacturer in the medium to long-term.
Thank you
S.R. Gnanam K. YanagiharaJoint Managing Director Joint Managing Director
17th August, 2010 17th August, 2010 Colombo Colombo
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The Directors of Tokyo Cement Company (Lanka) PLC., take special pride in presenting their report
along with the audited financial statements of the Company and the Group for the financial year
ended March 31, 2010, as the Company and Group begin its second quarter century of commitment
to excellence following Twenty Eight years of steady growth.
BUSINESS REVIEW OF PRINCIPAL ACTIVITIES
The manufacturing operations of the Company continue to be devoted solely to the production ofOrdinary Portland Cement, Pozzolana Cement, Masonry Cement and Ready Mixed Concrete;
all superior quality cement products. The overall performance of the Company during the year under
review is outl ined below and includes developments recorded in the same period.
GROUP TURNOVER
The Group recorded a total turnover of Rs.14.7 Bn, a decrease of Rs. 2.9 Bn over the previous financial
year. The turnover of the Company stood at Rs. 6.1 Bn which is an improvement of Rs. 80 Mn over the
equivalent figure of the previous year.
REVIEW OF THE RESULTS
2010 2009
(Rs. Mn) (Rs. Mn)
Group pre-tax profit 348 647
Group after tax profit 351 357
Net profit attributable to ordinary shareholders 369 347
Company pre-tax profit 1,465 143
Company after tax profit 1,461 143
Dividend
An interim dividend of Rs. 1.65 per share on both ordinary voting shares and ordinay non-voting shares
was declared by the Directors out of tax free dividend received from Fuji Cement Company (Lanka) Ltd.
and Ex-dividend date was 17th August, 2010
EARNINGS PER SHARE
Please refer page 71 note 7.
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PROPERTY, PLANT & EQUIPMENT
The consolidated Property, Plant & Equipment, at cost, for the year ended March 31, 2010 stood at
Rs. 12.9 Bn as against Rs. 12.9 Bn recorded at the end of the preceding year. The share of the
Company’s fixed assets was valued at Rs. 6.9 Bn, compared to Rs. 6.8 Bn the previous year. Details
regarding the movement of assets are provided in the notes to the accounts. The Group’s total capital
expenditure stood at Rs. 1.1 Bn, compared to Rs. 2.4 Bn during the previous year. The value of assets
disposed of during the year amounted to Rs. 1.4 Bn.
CURRENT ASSETS
The total current assets of the Group as at March 31, 2010 were valued at Rs. 3.2 Bn, compared to
Rs. 3.6 Bn the previous year.
LONG-TERM LOANS
As at March 31, 2010, the long-term borrowings of the Group amounted to Rs. 3.7 Bn compared to
Rs. 3.4 Bn, which was the figure recorded at the end of the previous financial year. The share of
Company borrowings during this period stood at Rs. 1.1 Bn against Rs. 603 Mn in the previous year.
Loan repayment proceeds on schedule.
GROUP INVESTMENTS
A total of Rs. 1.1 Bn was expended on Property, Plant & Equipment and Investments. The total capital
expenditure during the previous year wa s Rs. 2.4 Bn. Short-term investments were made in Treasu ry Bil ls
and Term Deposits.
STATED CAPITAL
The stated capital of the Company at the end of the year under review was represented by 180 Mn
ordinary voting shares and 90 Mn ordinary non-voting shares.
GROUP RESERVES
The total reserves of the Group was calculated to be Rs. 5.5 Bn as at March 31, 2010, compared with
Rs. 5.2 Bn in the previous year. This includes Rs. 150 Mn in capital reserves and Rs. 3.5 Bn in revenuereserves.
GROUP DONATIONS
The Group donated a total amount of Rs. 7.4 Mn for various charities during the year. In the previous
year Group donations amounted to Rs. 63.2 Mn.
GROUP TAXATION
The Company is not l iable for income tax at the Balance Sheet date due to the reason mentioned in th e
accounting policy number 2.4.2.2 on page 66 of the Financial Statements. Income tax l iabil ity of Tokyo
Cement, Colombo Terminal (Pvt) Ltd has been Rs. 24.8 Mn.
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There is no l iabil ity for deferred tax at the Balance Sheet date due to the reason mentioned in the
accounting policy number 2.4.2.2.1 on page 66 of the financial statements. The Company is currently
enjoying a ten-year tax holiday and certain timing differences wil l not reverse for a considerable period
of time. Hence, the timing differences have been excluded from the tax expense.
SHAREHOLDERS’ / INVESTORS’ INFORMATION
Shareholders‘ / investors’ informations provided separately from pages 40 to 48.
EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Please refer note 27 on page 85.
EMPLOYMENT POLICIES
The Group continues to abide by its policy of not discriminating in terms of gender, race or religion in
the matter of employment. The Group respects each and every individual and career advancement
opportunities are provided to all employees without exception. The Group is as committed as always to
create a zero accident-free, work environment since the safety of all staff is of ultimate importance. A
total of 575 permanent employees and 55 casual workers was on our payroll in the year ended
March 31, 2010. They received a total remuneration package of Rs. 259 Mn which exceeds by
Rs. 2.2 Mn the figure for the previous year.
CUSTOMERS
The Directors consider invaluable the patronage of our customers who are our greatest source of
strength. The Company continues to be committed to provide total satisfaction to our customer base by
enhancing the quality of our range of products and services.
SUPPLIERS
The Group continues to thrive on the strong bonds with all its suppliers, based on trust and reliabil ity.
STATUTORY PAYMENTS
The Directors are satisfied that all statutory payments in respect of the employees and the staff havebeen complied to the full and to the best of their knowledge.
ENVIRONMENTAL PROTECTION
The Company, which was the first Sri Lankan company in the cement industry to obtain the ISO 14001
Environmental Management Certificate, has not relaxed its commitment to preserve the environment
and to the efficient use of natural resources with future generations in mind.
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RESEARCH AND DEVELOPMENT
The Company invested heavily on research and development this year as well, since the continuous improvementof quality and maintaining high standards under the guidance of competent professionals remains a key andfoundational concern.
CORPORATE GOVERNANCE/INTERNAL CONTROL
The Company considers sound governance measures and appropriate internal control as an integral part ofoperations. The practices followed by the Company are set out on pages 30 to 33.
GOING CONCERN
Preparation of financial statements has been done on the going concern basis, as confirmed in the Statement ofDirectors’ Responsibil ities on page 34.
BOARD OF DIRECTORS
The following are the Directors who served the Company during the year ended March 31, 2010:
Mr. Edgar Gunatunga - Chairman - Non-Executive Independent DirectorMr. Simon Rajaseelan Gnanam - Joint Managing DirectorMr. Arul Selvaraj Gunaseelan Gnanam - Non-Executive DirectorMr. El i jah Jeyaseelan Gnanam - Non-Executive DirectorMr. Ranjeevan Seevaratnam - Non-Executive Independent Director
Mr. Kuniomi Yanagihara - Joint Managing Director, Nominee Director of
Nippon Coke & Engineering Company Limited, JapanMr. Stanley Vincent WanigasekeraMr. T. Uetake - (Resigned on 28th June, 2010)Mr. Shunichiro Mori - (Resigned on 28th June, 2010)
Dr. Harsha Cabral - Non-Executive Independent Director
RETIRING DIRECTORS
To re-elect Mr. Ranjeevan Seevaratnam who retires by rotation in terms of Article 113 of the Articles of
Association.
To re-elect as a Director, Mr. Edgar Gunatunga and being over the age of 70 years and who retires in terms of
Articles of Association and pursuant to Section 211 of the Companies Act No. 7 of 2007 for which special notice
of the following ordinary resolution has been given by a member for the purpose:
That the age limit referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to
Mr. Edgar Gunatunga who is 78 years and that he be re-elected a Director of the Company.
DIRECTORS’ INTERESTS
The Directors’ Interests in the Company contracts appear on page 83 of the financial statements and have beendeclared at the meetings of the Directors. Apart from the information disclosed, the Directors have no other director indirect interest in any contracts or proposed contracts pertaining to the business of the Group.
MAJOR SHAREHOLDINGS
The twenty majority shareholders and the percentage held by each of them as at March 31, 2010 appear onpage 41 to 42.
ANNUAL GENERAL MEETING
The Annual General Meeting wil l be held on September 16, 2010 at 5 p.m. The notice of the Annual GeneralMeeting appears on page 88.
TheEastern Pride
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Non-Executive Director, Nominee Directors ofNippon Coke & Engineering Company Limited, Japan
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AUDITORS
BDO Partners, Chartered Accountants are the Auditors of the Company. They are recommended for
re-election.
DIRECTORS’ SHAREHOLDINGS
Directors’ Shareholding - Ordinary Shares
No. of No. ofShares held Shares held
as at 31.03.10 as at 31.03.09
Local Joint Venture Partner - St. Anthony’s Consolidated Ltd. 49,499,780 4,949,978
Mr. Gnanam A. S. G. 10 1
Mr. Gnanam S. R. 10 1
Mr. Gnanam E. J. 10 1
Foreign Joint Venture Partner - Nippon Coke & Engineering Co. Ltd.
(Mitsui Mining Company Ltd.) 49,499,940 4,949,994
Nominee Directors
Mr. Wanigasekera S. V. 4,800 480
Mr. K. Yanagihara - -
Mr. Shunichiro Mori - -
Mr. T. Uetake - -
Independent Directors
Mr. Edgar Gunatunga - -
Mr. Ranjeevan Seevaratnam - -
Dr. Harsha Cabral - -
49,504,770 4,950,477
Total Ordinary Shares in Issue 180,000,000 18,000,000
Directors’ Shareholding - Non-Voting Shares
Mr. Wanigasekera S. V. 3,000 3,600
Total Non-Voting Shares in Issue 90,000,000 90,000,000
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TheEastern Pride
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GROUP STRUCTURE
Tokyo Cement Co. (Lanka) Plc
Subsidiaries % of holding
- Fuji Cement Co. (Lanka) Ltd. 100% Owned
- Tokyo Super Cement Co. Lanka (Pvt) Ltd. 100% Owned
- Tokyo Cement Colombo Terminal (Pvt) Ltd. 56.85% Owned
- Tokyo Cement Power (Lanka) Ltd. (Stil l in gestation stage) 100% Owned
AUDITORS’ REPORT
The financial Statements for the year ended March 31, 2010 have been audited by BDO Partners and
their report is given on pages 49 & 50.
SIGNIFICANT ACCOUNTING POLICIES
The Significant Accounting Policies adopted in the preparation of Financial Statements are given on
pages 58 to 85 of the Annual Report.
DIRECTORS’ RESPONSIBILITIES FOR FINANCIAL STATEMENTS
The Directors are responsible for the preparation and presentation of Financial Statements of theCompany to reflect a true and fair view of the state of its affairs. The Statement of Directors’
Responsibil ities for the Financial Statements is given on page 34 of this Annual Report.
EQUITABLE TREATMENT TO SHAREHOLDERS
The Directors at all times ensure that all shareholders are treated equitably.
COMPLIANCE WITH LAWS AND REGULATIONS
To the best of the knowledge and belief of the Directors, the Group has not engaged in any activities
violating the laws and regulations of the Company.
OUTSTANDING LITIGATIONS
In the opinion of the Directors and t he Company lawyers / legal counsel , l itigations pendin g against the
Company will not have major impact to the Financial Statements.
INTEREST REGISTER
As required by the Companies Act No. 07 of 2007 Interest Registers have been maintained by the
Company.
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Mr. E. Gunatunge Hony. FIB
Director - Appointed to the Board in June 1997 Chairman since February 2007. Joined Sampath Bank as Managing Director/Duputy Chairman in January 1991.Retired from position of Managing Director/Deputy Chairman in December 1996 and continued as a Director.Appointed Chairman on September 24th 1998. Counts 53 years banking experince, and serves on the boards ofseveral public companies.
Mr. S. R. Gnanam
Bachelor of CommerceAppointed to the Board in 1983. Over Twenty Five years working experience in Business Management, Strategicplanning, Social and Economic Research. Chairman of South Asian Investment (Private) Ltd and Alexandra Industries(Ceylon) Ltd. CEO of Capital City Holdings (Pvt) Ltd., Capital City Development (Pvt) Ltd., Capital City Farms (Pvt)Limited, St. Anthony’s Consolidated (Private) Limited and St. Anthony’s Hardware (Pvt) Limited.
Mr. K. YanagiharaAppointed to the Board in November 1998. Graduated Minning Faculty of Akita University in 1967. Entered MitsuiMining Co., Ltd. as a Mining Engineer in 1967. At Sunagawa Mining Coll iery in Hokkaido. Assigned to MiningEngineer and Manager at Undergound Mine Coll iery for seven years in Canada from 1972. Assigned to Managerat Open Pit Coal Mine for Seven years in Canada from 1981. Worked as Mining Engineer in Indonesia, Mongoliaand Malaysia. Worked as a General Manager of Mitsui Mining Co., Ltd, in Tokyo. Professional Engineer (Mining).
Mr. A. S. G. Gnanam
Appointed to the Board in August 1999. Attended I l l inois Institute of Technology Graduated in Industrial &Mechanical Engineering in 1973. Chairman & Managing Director St. Anthony’s Industries Group (Pvt) Ltd., AlsoChairman of Rhino Roofing Products Ltd., CEO of many private and public l iabil ity companies.
Mr. E. J. Gnanam BA (University of Texas), MBA (University of Melbourne)
Appointed to the Board in February 2007. Managing Director of South Asian Investments (Private) Limited, aninvestment company and also the Managing Director of Ceylon Synthetic Textile Mil ls Limited, Rhino Roofing Products
Limited and also in the Board of Private, Public and l isted companies. Has wide experience at leading corporatesector institutions in the garments trade, manufacturing and services.
Mr. R. Seevaratnam
Appointed to the Board in May 2007. Fellow Member of The Institute of Chartered Accountants of Sri Lanka andEngland & Wales and holder of General Science Degree from the University of London. Former senior partner ofKPMG Ford, Rhodes, Thornton & Company. Director of Haycarb PLC, Dipped Products PLC, Acme Printing &Packaging PLC, Acme Packaging Solutions (Pvt) Ltd., Tea Factories Small Holders PLC, Hatton National Bank PLC,Hayleys MGT Knitting Mil ls PLC, Hayleys Advantis Ltd. Shaw Wallace & Hedges PLC, and in many Puplic LimitedCompanies.
Dr. H. Cabral
Appointed to the Board in March 2009. President’s Counsel, Ph.D. in Corporate Law (University of Canberra),Austral ia, Commissioner - Law Commission of Sri Lanka, Member (NCED-National Council for EconomicDevelopment), Legal Cluster, Member - Board of Studies - Council of Legal Education SL, Lecturer and Examiner -University of Wales, University of Colombo and Sri Lanka Law College, Vice-President - BRIPASL (Business Recovery
and Insolvency Practitioners’ Association of SL), Member - Academic Board of Studies - Institute of CharteredAccountants of Sri Lanka.
Mr. S. V. Wanigasekera
Appointed to the Board in 1983. Stanley Vincent Wanigasekera, B.Com (London), F.C.A. (UK), F.C.A. (Sri Lanka).Chairman of Central Finance Company PLC in the year 2006. Served as the Executive Chairman of Ceylon TobaccoCompany PLC and was a Director of Hatton National Bank PLC, Richard Peiris & Company PLC, AssociatedMotorways PLC and Brown & Company PLC. Chairman of Central Industries PLC. He has over 53 years of financeand management experience in Sri Lanka.
Mr. Shunichiro Mori
Appointed to the Board in June 2008. Bachelor of Economics, Nagasaki University, Nagasaki, Japan. Worked atGeneral Affairs Dept, Miike Office, Mitsui Coal Industry Co., Coal & Coke Dept, Mitsui Mining Co., (Tokyo, Japan),Mitsui Ming USA Inc., (Stationed in USA). General Manager of Coal & Coke Dept, General Manager of CorporatePlanning Dept.
Mr. Toshimitsu Uetake
Appointed to the Board in April 2002. Bachelor of Educatin at Hokkaido University. Worked as Senior Manager,Materials Procurement & Products Delivery Department.
BOARD OF DIRECTORS
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Tokyo Cement Company (Lanka) PLC continues to hold the exclusive honour of being the only cement
manufacturer l isted in the Colombo Stock Exchange. The Company is proud of its commitment to
upholding the highest standards associated with good corporate governance, strictly complying with
the principles and provisions of the Code of Best Practice on Corporate Governance published by the
Institute of Chartered Accountants of Sri Lanka (ICASL).
BOARD OF DIRECTORS
The Board consists of ten members including seven Directors and three Independent and
Non-Executive Directors. Two Joint Managing Directors each represent the two major shareholders. All
Non-Executive Directors are professionals with vast experience in the spheres of business and
administration.
BOARD PROCESSES
The Board of Directors formulates corporate goals and overall business strategy. In addition, they
provide direction in managing the business, reviewing performance and reporting to shareholders on
the performance of the Company on a quarterly basis. The Board meets monthly to assess corporate
and operational performance in the context of budgets and macro-economic market conditions.
AUDIT COMMITTEE
The Audit Committee comprises three Non-Executive Directors of which two are independent. They
examined the adequacy and effectiveness of internal control and assessed compliance with regulatory
requirements. This Committee met with the Joint Managing Directors, Group General Manager and
Chief Financial Officer, attending meetings upon invitation. The report of the Audit Committee appears
on page 35.
AUDIT COMMITTEE MEMBERS
Mr. R. Seevaratnam, FCA - Chairman - Audit Committee - Independent Director
Mr. Edgar Gunatunga - Independent Director
Mr. S. V. Wanigasekera, FCA - Non-Executive Director
REMUNERATION COMMITTEE
The Remuneration Committee comprises three Directors of which one is an Independent Non-Executive
Director.
Mr. S. V. Wanigasekera, FCA - Chairman - Non-Executive Director
Mr. R. Seevaratnam, FCA - Independent Director
Mr. S. R. Gnanam - Joint Managing Director
Mr. W. C. Fernando, FCA - Group General Manager
The Committee was empowered to examine any matters relating to remuneration paid to executive
members. Their terms of reference also encompass the Human Resources of the Company.
CORPORATE GOVERNANCE
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INTERNAL CONTROL AND MONITORING
Internal control and monitoring of operations are carried out on a regular basis. Selected sales depots
are audited in addition to the review of systems. These reports are scrutinized and discussed by the
members of the Audit Committee and suitable action is taken where necessary in consultation with
senior management.
Members of the Audit Committee also examine the monthly accounts submitted to the Board.
The Audit Committee also reviews internal controls in compliance with various accounting standards.
GOING CONCERN
The Board has adopted the going concern basis in preparing financial statements given that the
Company possesses sufficient resources to continue operations into the foreseeable future.
TRANSPARENCY
The Board discloses full information, both financial and non-financial information within the bounds of
commercial realities. Being the only cement manufacturer l isted on the Colombo Stock Exchange, it is
committed to a responsible business philosophy. Publication of quarterly accounts, the release of the
Annual Report and Audited Accounts are complied with within the stipulated time frame.
INVESTOR RELATIONS
The Company continues to maintain good communication with all shareholders irrespective of whetherthey are corporates or individuals. The Board invites questions from shareholders during the General
Meeting. In addition, the Chairman and Executive Directors meet institutional investors and analysts to
discuss the Company’s performance. Share price sensitive information not available to other
shareholders is not divulged during this meeting.
SHAREHOLDER VALUE AND RETURNS
Persons of eminence who are respected in the community serve on the Board and this factor enhances
the value of the shares of the Company. The Board also maintains an attractive dividend rate in l ine
with the expectations of the shareholders as well as for Capital formations of future expansion.
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Board of Directors
i . The correct number of Non-Executive Directors, in accordance with Rule 7.10.1 (a)
i i . The correct number of Independent Non-Executive Directors, in accordance with
Rule 7.10.2 (a)
i i i . Specified whether the Non-Executive Directors submitted a Declaration annually of
his/her independence or non-independence to the Board of Directors – Rule 7.10.2 (b)
iv. Confirmed that the Board of Directors made an annual determination as to the
independence or non-independence of each Non-Executive Director based on the
Declaration mentioned above and other information available to the Board AND states
the names of Non-Executive Directors determined to be ‘ Independent’ – Rule 7.10.3(a)
v. If the Director does not qualify as ‘ Independent’, but if the Board taking into account all
the circumstances is of the opinion that the Non-Executive Directors is ‘ Independent”, the
Board has specified, in the Annual Report, the qualification not met under Rule 7.10.4 ofthe CSE List ing Rules and the basis for determining the Director to be ‘ Independent’
Rule 7.10.3(b)
vi . Published a brief resume in the Annual Report, of each Director of the Board, which
includes information on the nature of his/her expertise – Rule 7.10.3 ( c)
Remuneration Committee
vi i . The correct number of Independent Non-Executive Directors in the Remuneration
Committee, in accordance with Rule 7.10.5(a)
vi i i . Specified whether a separate Remuneration Committee was formed or whether l isted
parent Company’s Remuneration Committee used – Rule 7.10.5(a)
ix. Specified the names of Directors comprising the Remuneration Committee (where the
parent company’s Remuneration Committee qualifies to function as the listed company’s
Remuneration Committee, a statement in the Annual Report to this effect and disclosed
the names of the Directors) - Rule 7.10.5(c)
x. Disclosed the functions of the Remuneration Committee, in accordance with
Rule 7.10.5(b)
xi . Specified whether the Chairman of the Committee is a Non-Executive Director
Rule 7.10.5(a)
CORPORATE GOVERNANCE DISCLOSURES UNDER CSE LISTING RULES
RuleNo.
ComplianceStatus
Compliant
Compliant
Compliant
Compliant
N/A
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Rule
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xi i . The Annual Report contained a statement on the Remuneration pol icy – Rule 7.10.5(c)
xi i i . Specified the aggregate remuneration paid to Executive AND Non-Executive Directors
in the Annul Report – [“Remuneration” should include cash and all non-cash benefits paid
in consideration of employment with the Listed Entity (excluding statutory entit lementssuch as EPF and ETF)] – Rule 7. 10.5(c)
Audit Committee
xiv. The correct number of Independent Non-Executive Directors, in accordance with
Rule 7.10.6(a)
xv. Specified whether a separate Audit Committee formed or whether l isted parent
company’s Audit Committee used - Rule 7.10.6 (a)
xvi . Specified the names of Directors comprising the Audit Committee (where the parent
company’s Audit Committee qualifies to function as the listed company’s
Audit Committee, a statement to this effect AND disclosed the names of the Directors)Rule 7.10.6(c)
xvi i . Confirmed that the functions of the Committee has being in accordance with
Rule 7.10.6(b)
xvi i i . Specified whether the Chairman of the Committee is a Non-Executive Director
Rule 7.10.6(b)
xix. Specified whether the Chairman or one member of Committee is a member of a
recognized professional accounting body – Rule 7.10.6( a)
xx. Specified whether the CEO and CFO attended Committee meetings, unless otherwise
determined by the Audit Committee – Rule 7.10.6 (a)
xxi . The Annual Report contained a report by the Audit Committee stating the manner of
compliance in relation to the functions required of the Audit Committee and the
determinations made by the Audit Committee – Rule 7.10.6 (c )
xxi i . Specified the basis for determining External Auditors as being Independent
Rule 7.10.6( c)
RuleNo .
ComplianceStatus
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Compliant
Rule
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 33
CORPORATE GOVERNANCE DISCLOSURES UNDER CSE LISTING RULES
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The responsibil ities of the Board of Directors in relation to the financial statements of the Company and
Group are set out as follows. The responsibil ity of the Auditors wh ich dif fer, are set out in the
Auditors’ Report.
According to the Companies Act No. 7 of 2007, the Directors are required to prepare financial
statements for each year, giving an accurate and impartial view of th e profit and loss of the Company
and its subsidiaries as evidenced at the close of the financial year.
The Directors are of the view that in the course of preparing the said financial statements, appropriate
accounting policies h ave been adhered to and maintained throughout. Material departures if any, have
been disclosed and explained. The Directors also confirm that all applicable Accou nting Standards have
been followed with judgments and estimates being made that are both reasonable and prudent.
The Directors are also of the view that the Company has adequate assets and resources to continue a
profitable operation in the future. Accordingly, the going concern has been used in the preparation of
the financial statements.
The Directors are responsible for the overall internal control systems of the Company while
acknowledging the fact that t here is no single system of internal control that could guarantee absolutely
against mismanagement or fraud, the Directors confirm that the systems in place are so designed as to
safeguard the Company’s assets and that all transactions are properly authorized and recorded, thusensuring that all material misstatements and irregularities are either prevented or detected speedily.
The Directors are required to provide the Auditors with every opportunity to take whatever steps and
undertake any inspections they consider appropriate for the purpose of enabling them to submit their
audit report.
The Directors are responsible for ensuring that the Company maintains sufficient accounting records to
be able to disclose with reasonable accuracy, the financial position of the Company and that of the
Group, thus ensuring that the Company’s financial statements comply with the requirements of the
Companies Act.
The Directors are of the view that they have discharged their responsibil ities to the best of their abil ity as
stated herein.
The Directors also confirm to the best of their knowledge, all taxes, duties and levies payable by the
Company and its subsidiaries, as well as all other well-known statutory dues that were due and
payable by the Company and its subsidiaries as at the Balance Sheet date have been paid, or where
relevant been provided for.
By Order of the Board of Tokyo Cement Company (Lanka) PLC
SECCOM (PRIVATE) LTD.
Company Secretaries,
17th August, 2010 Colombo
DIRECTORS’ RESPONSIBILITIES
TheEastern Pride
of aResurgent Nation
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The Company’s Audit Committee comprises of th ree Non-Executive Directors as part of good c orporate
governance practi ces. They are Mr. S. V. Wanigasekera, Mr. E. Gunatu nga and Mr. R. Seevaratnam.
The objective of the Audit Committee is to assist the Board of Directors of the Company in fulfi l l ing its
responsibil ities for the financial reporting process, the system of internal control over financial reporting,
the audit process and t he Company’s process for monitoring compliance w ith laws, regulations and best
practices.
The other members participating at the Audit Committee deliberations are Mr. S. R. Gnanam,
Mr. K. Yanagi hara (Jo int Man aging D irector s), Mr. W. C. Fernando, Grou p Genera l Manage r,
Mr. Nirantha Kuruwita, Chief Financial Officer and mil l managers and accountants by invitation.
The Audit Committee meets regularly and the areas covered under the Audit Report include
Sales Delivery, Banking & Receivables, Project, Production, Physical Verification, Stores Maintenance,
Empty Bags Usage (including damages ), Packing and Weigh Bridge Operation.
The Board is also updated with decisions and recommendations made at the Audit Committee meetings.
The members of the Audit Committee reviewed the monthly accounts submitted to the Management.
Quarterly accounts and the Annual Report to the shareholders are also checked and reviewed by the
Audit Committee before their release.
R. Seevaratnam
Chairman - Audit Committee
17th August, 2010 Colombo
AUDIT COMMITTEE REPORT
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 35
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SOCIAL IMPACT REPORT
With the policy decision to align operational processes towards environmentally sustainable
manufacturing, Tokyo Cement has initiated many internal technological and procedural improvements
to operationalise this policy of sustainabil ity. These initiatives which are aimed at minimizing
environmental impacts from point of importation to delivery, have put the Company on track with our
ultimate goal of becoming a producer of eco-friendly cement.
GREEN ENERGYTo uphold our commitment towards minimizing environmental impacts from manufacturing two years
ago, Tokyo Cement invested in green energy for our factories. As a result of this initiative, a Rs 2.4 bil l ion
Bio Mass Power Plant was commissioned in 2008 with a capacity of 10 MW. Powered by paddy husk
and Gliricidia wood, this environmentally-friendly power supply can meet the electricity requirements of
the three Tokyo Cement manufacturing factories in Trincomalee.
With this new source of renewable energy we have reduced considerable amount of power intake
from the national grid, which has translated into a saving for the Company. We also sell excess power
to the national grid, adding to our revenue streams.
The Bio Mass Power Plant has also contributed towards income generation of rural, farming communities
as the Company purchases paddy husk and Gliricidia wood from these communities. The Company is
also educating communities on the correct techniques of farming Gliricidia and continues t o supply seed
for Gliricidia farming.
CLEANING THE OCEAN BED
The Company continued to clean the sea bed at the Trincomalee Jetty, at the point of unloading cement
clinker from vessels. This is done to remove the small amount of cement clinker that fall into the sea at
the time of unloading, although cement clinker is essentially of l imestone composition and is not
environmentally harmful.
CONTROLLING DUST EMISSION
The Company invested Rs. 65 mil l ion durin g the year under review to modify th e cement hopper at thefactory premises in Trincomalee. These modifications contribute towards minimizing dust emissions to the
environment when unloading c linker.
The Company has also taken action to prevent transmission of cement dust to the outside environment
through vehicle wheels, by install ing water patches at entry and exit points to the factory. All vehicles
entering and exiting the premises pass through these water patches that clean vehicle wheels of
residual cement dust.
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SOUND CONTROLS
The sound controls at the factory premises were upgraded with new equipment to minimize sound
pollution.
COMMITMENT TO STAKEHOLDERS
Tokyo Cement has continued to uphold its responsibil ities towards various stakeholder groups of the
Company.
EMPLOYEE WELFARE
As part of our commitment to our workforce we upgraded accommodation facil ities for senior
managers at the Trincomalee factory premises.
COMMUNITY WELFARE
The Company continues to supply a nutritious, mid-day meal, everyday, for school children in four
underserved schools in Trincomalee and Kandy Districts. The provision of the free mid-day meal has
contributed towards better school attendance.
TRAINING FOR MASONS
The Company continued to provide training programmes for masons in the Central, Northern and
Eastern Provinces. The training sessions, that benefit about 25 persons per session, impart skil ls on
masonary work, concreting, ti l ing, brick work and other construction related activities.
Given the large success of this programme in providing much needed skil ls for the local construction
industry and in generating employment, Tokyo Cement is hoping to start a training institute for masons
over the coming months.
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 37
SOCIAL IMPACT REPORT
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Jt. Managing Director Mr. S. R. Gnanam lighting the traditional oil lampat Dealer Convention - 2009
Jt. Managing Director Mr. K. Yanagihara lighting the traditional oil lampat Dealer Convention - 2009
Director/Group General Manager Mr. W. C. Fernando lightingthe traditional oil lamp at Dealer Convention - 2009
Ancheneye Hardware receiving the award for the “Best Dealer” - 2009
Keerthi Hardware receiving the award for the“Best Dealer” First runners-up - 2009
Samsudeen Grill Industries receiving the award for the“Best Dealer” Second runners-up - 2009
Launch of Supermix Dry Mix Concrete Launch of Superbond Tile Adhesive
Kinniya Bridge - Constructed Exclusively using Nippon Cement
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 38
SOCIAL IMPACT REPORT
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 39
SOCIAL IMPACT REPORT
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TheEastern Pride
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 40
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EARNING PER SHARE - VOTING ORDINARY SHARES
Year Rs.
Year
1 2 3 4 5 0
2006
2010
2007
2009
2008
Rs.
2006 41.3
2007 3.2
2008 2.05
2009 1.28
2010 1.37
Number of SharesName
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DIVIDEND PER SHARE - VOTING ORDINARY SHARES NON-VOTING ORDINARY SHARES(Restated)
Year Rs.
Year
0
2006
2010
2007
2009
2008
Rs.
2006 0.45
2007 0.50
2008 0.40
2009 0.30
2010 1.65
0.5 1 1.5 2
Number of SharesName
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 42
SHAREHOLDERS’ & INVESTORS’ INFORMATION
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 43
SHAREHOLDERS’ & INVESTORS’ INFORMATION
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SHAREHOLDERS’ & INVESTORS’ INFORMATION
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SHAREHOLDERS’ & INVESTORS’ INFORMATION
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14,000
Year
TOTAL ASSE TS
2,000 4,000 6,000 8,000 10,000 12,000 0
2006
2007
2008
2009
2010
Rs. Mn Year Rs. Mn
2006 7,602
2007 9,126
2008 11,342
2009 13,492
2010 12,409
21
Year
RETURN ON EQUITY
3 6 9 12 15 18 0
2006
2007
2008
2009
2010
% Year Return on Equity
2006 16.78
2007 18.37
2008 11.43
2009 6.81
2010 6.34
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 46
GRAPHICAL REVIEW
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COMPOSITION OF LIABILITIES - GROUP
Shareholders’ Equity 5,531
Borrowings 3,744
Trade & Other Payables 2,220
Minority Interest 140
Other Liabil ities 774
12,409
Rs. Bn.
COMPOSITION OF ASSETS
PPE & CWIP 9,148
Inventories 688Trade & Other Receivables 1,313
Other Assets 1,260
12,409
Rs. Bn.
PPE & CWIP 74%
Other Assets 10%
Inventories 5%
Trade & Other Receivables 11%
Trade & Other
Payables 18%
Other Liabilities 6%Minority Interest 1%
Shareholders’ Equity
45%
Borrowings 30%
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 47
GRAPHICAL REVIEW
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SHAREHOLDERS’ INFORMATION - VOTING
Shares 500 & Less 0.06
Shares 501-5000 1.48Shares 5001-100,000 6.81
More than 100,000 Shares 91.65
100.00
%
Shares 5001-10000 6.81%
More than 10,000 Shares 91.65%
Shares 501-5000 1.48%
Shares 500 & Less 0.06%
SHAREHOLDERS’ INFORMATION - NON-VOTING
Shares 500 & Less 0.23
Shares 501-5000 2.78
Shares 5001-100,000 13.86
More than 100,000 Shares 83.13
100.00
Rs. Bn.
Shares 500 & Less 0.23% Shares 5001-10000 13.86%
Shares 501-5000 2.78%
More than 10,000 Shares 83.13%
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 48
GRAPHICAL REVIEW
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 49
INDEPENDENT AUDITOR’S REPORTTO THE SHAREHOLDERS OF TOKYO CEMENT COMPANY (LANKA) PLC
Report on the Financial Statements
We have audited the accompanying financial statements of Tokyo Cement Company (Lanka)
PLC, and consolidated financial statements of the Company and its subsidiaries as at
31st March, 2010 which comprise the balance sheet as at 31st March, 2010, and the income
statement, statement of changes in equity and cash flow statement for the year then ended,and a summary of significant accounting policies and other explanatory notes as set out on
pages 58 to 85.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with Sri Lanka Accounting Standards. This responsibil ity includes:
designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to
fraud or error; selecting and applying appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Scope of Audit and Basis of Opinion
Our responsibil ity is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Sri Lanka Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance whether the
financial statements are free from material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.
"Charter House"
65/2, Sir Chittampalam A Gardiner Mawatha,
Colombo 02, Sri Lanka.Telepho ne : 94-11-2421 878-79-70,
94-112387002-03
94-11-2328831
Telefax : 94-11-2336064
E-mail : bdopar tners @bdo.l k
BDO Partners
Chartered Accountants
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We have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit. We therefore believe that our audit
provides a reasonable basis for our opinion.
Opinion - Company
In our opinion, so far as appears from our examination, the Company maintained proper
accounting records for the year ended 31st March, 2010 and the financial statements give a
true and fair view of the Company’s state of affairs as at 31st March, 2010 and its profit and
cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.
Opinion - Group
In our opinion, the consolidated financial statements give a true and fair view of the state of
affairs as at 31st March, 2010 and its profit and cash flows for the year then ended in
accordance with Sri Lanka Accounting Standards, of the Company and its subsidiaries dealt
with thereby, so far as concern the shareholders of the Company.
Report on other Legal and Regulatory Requirements
These financial statements also comply with the requirements of Section 153(2) and 153(7) of
the Companies Act No. 07 of 2007.
CHARTERED ACCOUNTANTS
17th August, 2010
Colombo
SR/ts
Partner : S. Rajapakse FCA, MBA. Ms. M. S. E. Raymond FCA.
S. G. Ranjith ACA. Tishan H. Subasinghe ACA.
H. S. Rathnaweera ACA, Ashane J. W. Jayasekara ACA, MBA,
H. M. Saman Siri lal ACA
Consultant: V. Sinnadorai FCA
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 50
INDEPENDENT AUDITOR’S REPORTTO THE SHAREHOLDERS OF TOKYO CEMENT COMPANY (LANKA) PLC
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 51
INCOME STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Consolidated Company
Rs. Note March 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009
Turnover 14,737,746,491 17,652,390,974 6,125,479,102 6,045,332,950
Cost of Sales (12,456,588,445) (14,933,080,308) (4,835,376,262) (5,352,538,256)
Gross Profit 2,281,158,046 2,719,310,666 1,290,102,840 692,794,694
Other Income 3 463,986,887 185,148,940 1,315,154,773 198,197,367 2,745,144,933 2,904,459,606 2,605,257,613 890,992,061
Distributio n Cost (946,806,953) (1,095,455,809) (562,421,641) (452,664,747)
Administra tive Expenses (613,718,346) (327,573,442) (322,096,675) (230,453,880)
Finance Cost 4 (837,128,303) (834,474,275) (255,774,104) (64,973,957)
Profit Before Taxation 5 347,491,331 646,956,080 1,464,965,193 142,899,477
Income Tax Expense 6 3,868,190 (289,480,757) (3,612,167) -
Profit for the Year 351,359,521 357,475,323 1,461,353,026 142,899,477
Attributed to:
Equity Holders of the Company 369,303,901 346,631,241 1,461,353,026 142,899,477
Minority Interest (17,944,380) 10,844,082 - -
Earnings per Ordinary Share
- Voting (Rupees per Share) 7 1.37 1.28 5.41 0.53
- Non-Voting (Rupees per Share) 7 1.37 1.28 5.41 0.53
Dividend Per Ordinary Share
- Voting 8 1.65 0.30 1.65 0.30
- Non-Voting 8 1.65 0.30 1.65 0.30
Figures in brackets indicate deductions
Ratios of the previous year have been restated.
The Accounting Policies and Notes from pages 58 to 85 form an intergral part of these Financial Statements.
17th August, 2010
Colombo
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BALANCE SHEET AS AT MARCH 31, 2010
Consolidated Company
Rs. Note March 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009
ASSETS
Non-Current Assets
Property , Plant & Equipment 9 9,055,420,757 9,359,452,701 4,344,190,714 4,675,712,936
Capital Work-in-Pr ogress 93,376,092 396,523,614 89,792,430 111,645,843Goodwill 10 13,186,823 13,186,823 - -
Investment 11 - 500,000 1,235,150,030 485,650,030
Investment In Fixed Deposit 3,000,000 3,000,000 - -
Operatin g Lease Prepaymen t 12 69,460,316 73,801,586 - -
Total Non-Current Assets 9,234,443,988 9,846,464,724 5,669,133,174 5,273,008,809
Current Assets
Inventories 13 687,821,933 1,388,254,260 299,940,535 764,576,769
Trade & Other Receivables 14 1,313,085,689 1,727,638,781 479,402,366 1,060,892,352
Operating Lease Prepaymen t 12 4,341,270 4,341,270 - -
Tax Receivable 258,665,676 214,749,800 126,421,576 93,029,709
Amount Due from Related Parties 15 - - 1,173,923,511 12,499,272
Cash and Cash Equivalents 910,934,352 310,596,594 40,693,180 209,489,360
Total Current Assets 3,174,848,920 3,645,580,705 2,120,381,168 2,140,487,462
Total Assets 12,409,292,908 13,492,045,429 7,789,514,342 7,413,496,271
Figures in brackets indicate deductions
The Accounting Pol icies and Notes from pages 58 to 85 form an intergral part of these Financial Statements.
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 53
Rs. Note March 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009
EQUITY & LIABILITIES Equity
Stated Capital 16 1,793,000,000 1,793,000,000 1,793,000,000 1,793,000,000
Reserves 17 150,000,000 150,000,000 - -
Retained Earnings 3,588,649,234 3,300,345,333 2,853,287,934 1,472,934,908
Equity Attributed to Equity Holders of the Company 5,531,649,234 5,243,345,333 4,646,287,934 3,265,934,908
Minor Interest 140,130,198 158,074,578 - -
Total Equity 5,671,779, 432 5,401,419,911 4,646,287,934 3,265,934,908
Non-Current Liabilities
Interest Bearing Borrowings 18 1,386,762,725 867,925,625 685,101,400 202,657,776
Deferred Tax 19 213,635,164 264,087,499 32,817,926 32,817,926
Retirement Benefits Obligation 20 29,867,590 23,039,761 21,028,732 16,695,742
Deferred Revenue 6,949,335 9,824,923 - -
Lease Creditors 53,198,560 98,027,938 1,497,494 13,934,530
Total Non-Curren t Liabilit ies 1,690,413,374 1,262,905,746 740,445,552 266,105,974
Current Liabilities
Trade & Other Payables 21 2,219,905,037 3,774,560,381 1,074,208,338 1,751,132,641
Amount Due to Related Parties - - 503,875,505 1,531,160,881
Current Maturity of Long-Term Loans 18 2,356,956,650 2,569,470,983 460,669,200 401,100,000
Lease Creditors 48,620,771 42,291,264 16,228,427 17,187,966Bank Overdrafts 421,617,644 441,397,144 347,799,386 180,873,901
Total Current Liabiliti es 5,047,100,102 6,827,719,772 2,402,780,856 3,881,455,3 89
Total Equity & Liabilities 12,409,292,908 13,492,045,429 7,789,514,342 7,413,496,271
Figures in brackets indicate deductions
The Accounting Pol icies and Notes from pages 58 to 85 form an intergral part of these Financial Statements.
These Financial Statements are in compliance with the requirements of the Companies Act No. 07 of 2007
Mr. Nirantha Kuruwita Chief Financial Officer (CFO)
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
Approved and Signed for and on behalf of the Board
Mr. S. R. Gnanam Mr. K. Yanagihara
Jt. Managing Director Jt. Managing Director
17th August, 2010
Colombo
SR/ts
Consolidated Company
BALANCE SHEET AS AT MARCH 31, 2010
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deniateRdetatSnoitpmedeRlatipaC
Rs. Reserve Fund Capital Earnings Total
CONSOLIDATED
Balance as at 31st March, 2008 150,000,000 1,793,000,000 3,061,714,092 5,004,714,092
Net Profit for the Year - - 346,631,241 346,631,241Dividend Paid - - (108,000,000) (108,000,000)
Balance as at 31st March, 2009 150,000,000 1,793,000,000 3,300,345,333 5,243,345,333
Net Profit for the Year - - 369,303,901 369,303,901
Dividend Paid - - (81,000,000) (81,000,000)
Balance as at 31st March, 2010 150,000,000 1,793,000,000 3,588,649,234 5,531,649,234
Stated Retained
Rs. Capital Earnings Total
COMPANY
Balance as at 31st March, 2008 - 1,793,000,000 1,438,035,431 3,231,035,431
Net Profit for the Year - - 142,899,477 142,899,477
Dividend Paid - - (108,000,000) (108,000,000)
Balance as at 31st March, 2009 - 1,793,000,000 1,472,934,908 3,265,934,908
Net Profit for the Year - - 1,461,353,026 1,461,353,026
Dividend Paid - - (81,000,000) (81,000,000)
Balance as at 31st March, 2010 - 1,793,000,000 2,853,287,934 4,646,287,934
Figures in brackets indicate deductions
The Accounting Policies and Notes from pages 58 to 85 form an intergral part of these Financial Statements.
17th August, 2010
Colombo
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2010
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CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Rs. Note 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Cash Flow from Investing Activities
Purchase of Property, Plant & Equipment A (1,074,267,479) (2,097,407,633) (71,287,961) (1,630,118,102)
Dividend Received - - 1,149,999,235 149,999,904Expenditure incurred on Capital Work-in-Progress (9,006,500) (311,505,418) (9,006,500) (42,954,690
Interest Received 778,958 526,438 - -
Proceeds from Sale of Property, Plant & Equipment 697,825,000 141,503,710 - 8,400,000
Net Cash from / (used) in Investing Activities (384,670,021) (2,266,882,903) 1,069,704,774 (1,514,672,888)
Cash Flow from Financing Activities
Repayment of Interest Bearing Loans and Borrowings (7,108,455,971) (5,425,342,697) (2,113,726,282) (841,037,559)
Receipt of Interest Bearing Loans and Borrowings 7,419,039,632 5,350,378,696 2,660,000,000 1,030,000,000
Investment in Subsidiary - - (750,000,000) -
Redemption of Preference Shares 500,000 - 500,000 -
Dividend Paid (81,000,000) (108,000,000) (81,000,000) (108,000,000)
Lease Rental Paid (68,021,702) (54,242,077) (22,026,935) (22,024,060)
Advances (to) / from Subsidiary - - (2,189,128,115) 924,868,578
Net Cash from / (used) in Financing Activities 162,061,959 (237,206,078) (2,495,381,332) 983,806,959
Net Increase / (Decrease) in Cash and Cash Equivalents 620,117,258 41,865,174 (335,721,665) 84,429,471
Cash and Cash Equivalents at beginning of period B (130,800,550) (172,665,724) 28,615,459 (55,814,012)
Cash and Cash Equivalents at end of period C 489,316,708 (130,800,550) (307,106,206) 28,615,459
Figures in brackets indicate deductionsThe Accounting Policies and Notes from pages 58 to 85 form an intergral part of these Financial Statements.
17th August, 2010
Colombo
Consolidated Company
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Rs. Note 31st March,2010 31st March,2009 31st March,2010 31st March,2009
A. Purchase of Property, Plant and Equipment
Purchases During the Year 987,149,356 1,353,366,909 69,663,179 966,519,745
Transferred from Capital Work-in-Progress 399,272,149 4,473,161,102 32,484,699 2,562,883,7541,386,421,505 5,826,528,011 102,147,878 3,529,403,499
Less: Leasehold Assets Addition During the Year - (115,734,796) - -
Less: Capital Work-in-Progress Balance as at
1st April, 2009 in Relation to Assets Transferred (312,154,026) (3,613,385,582) (30,859,917) (1,876,885,397)
Less: Assets Transfer to Subsidiaries - - - (22,400,000)
1,074,267,479 2,097,407,633 71,287,961 1,630,118,102
B Cash and Cash Equivalents at Beginning of Period
Bank Balances and Cash 310,596,594 181,147,783 209,489,360 96,218,544
Bank Overdraft (441,397,144) (353,813,507) (180,873,901) (152,032,556)
(130,800,550) (172,665,724) 28,615,459 (55,814,012)
C Cash and Cash Equivalent at End of Period
Bank Balances and Cash 910,934,352 310,596,594 40,693,180 209,489,360
Bank Overdraft (421,617,644) (441,397,144) (347,799,386) (180,873,901)
489,316,708 (130,800,550) (307,106,206) 28,615,459
Figures in brackets indicate deductions
The Accounting Policies and Notes from pages 58 to 85 form an intergral part of these Financial Statements.
17th August, 2010 Colombo
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Consolidated Company
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
1.1 General
Tokyo Cement Company (Lanka) PLC is a Public Limited Liabil ity Company incorporated and domiciled in Sri Lanka
and l isted on the Colombo Stock Exchange. The Registered Office and the principal place of business of the
Company is located at No.469 1/1, Galle Road, Colombo 03. Factories are located at Cod-Bay, China Bay,
Trincomalee, No 77B, New Nuge Road, Peliyagoda, Pahalakondadeniya, Katugastota, Aluthgama, Miriswatte,
Itthapana, Anuradhapura and Colombo Port.
1.2 Principal Activities and Nature of Operations
During the year, the principal activities of the Company were Manufacturing and Sell ing Cement and Ready Mixed
Concrete to the local market.
1.3 Parent Enterprise
The parent undertaking is Tokyo Cement Company (Lanka) PLC, and ultimate parent of the Group is also Tokyo
Cement Company (Lanka) PLC.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 GENERAL ACCOUNTING POLICIES
2.1.1 Basis of Preparation
These financial statements presented in Sri Lanka Rupees have been prepared under the historical cost basis in
accordance with generally accepted accounting principles and the standards laid down by the Institute of
Chartered Accountants of Sri Lanka.
2.1.2 Statement of Compliance
The Balance Sheet, Statement of Income, Changes in Equity and Cash Flows, together with Accounting Policies and
Notes (“Financial Statements”) of the Company and the Group as at 31st March, 2010 and for the year then ended
have been prepared in compliance with the Sri Lanka Accounting Standards (SLAS) issued by the Institute of
Chartered Accountants of Sri Lanka and t he requirement of the Companies Act No. 7 of 2007.
2.1.3 Going Concern
The directors have made an assessment of the Parent Company’s and its abil ity to continue as going concern and
they do not intend either to l iquidate or to cease trading. However, the Subsidiary Company of the Group has net
current l iabil ities of Rs. 625,015,854/- as at the Balance Sheet date. (2009 – Rs. 922,430,794/-)
2.1.4 Comparative Information
The accounting policies have been consistently applied by the Company and are consistent with those of the
previous year. The previous year’s figures and phrases have been rearranged wherever necessary to conform to
the current year’s presentation.
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2.1.5 Discontinuing Operations
A discontinuing operation is a clearly distinguishable component of the Company’s business that is abandoned or
terminated pursuant to a single plan and which represents a separate major l ine of industry or geographical area
of operations.
As at the Balance Sheet date, the company does not have any discontinuing operations.
2.1.6 Foreign Currency Transaction
All foreign exchange transactions are converted to Sri Lanka Rupees, which is the reporting currency, at the rates of
exchange prevail ing at the time the translations were effected.
Monetary assets and l iabil ities denominated in foreign currencies are translated to Sri Lanka Rupee equivalents
using year end spot foreign exchange rates, the resulting gains or losses are accounted in the Income Statement.
Non monetary assets and l iabil ities are translated using exchange rates that existed when the values were
determined. The resulting gain or loss is accounted in the Income Statement.
2.1.7 Materiality and Aggregation
Each material class of similar items is presented separately in the financial statements. Items of a dissimilar nature or
function are presented separately unless they are immaterial .
2.1.8 Significant Accounting Judgements, Estimates and Assumptions
a) Judgements
In the process of applying the accounting policies, management has made the following judgements, apart from
those involving estimations, which have most significant effect on the amounts recognized in the financial statements.
b) Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the Balance Sheet
date, that have a significant risk of causing material adjustments to the carrying amounts of assets and l iabil ities
within the next financial year, have been considered.
The preparation of the Company’s financial statements require management to make judgments, estimates and
assumptions that affect the reported amounts of revenue, expenses, assets and l iabil ities and the disclosure of
contingent l iabil ities at reporting date.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
2.2 Consolidation
a) Subsidiaries
Subsidiaries are all entities over which the Group has the power directly or indirectly to govern the financial and
operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence
and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity. Subsidiaries are ful ly consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of
an acquisition is measured as the fair value of the assets given, equity instruments issued and l iabil ities incurred or
assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and
liabil ities and contingent l iabil ities assumed in a business combination are measured initial ly at their fair values at the
acquisition date irrespective of the extent of any minority interest. The excess of the cost of acquisition is over the fair
value of the group’s share of t he identifiable assets acquired is recorded as goodwil l . I f the cost of a cquisition is less
than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the Income
Statement.
Related party transactions, balances and unrealized profits or losses between group of companies are eliminated.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
b) Minority interests
The interest of the outside shareholders in net assets of the Group and proportion of the profit after taxation
applicable to outside shareholders are stated separately in t he Consolidated Balance Sheet and the Consolidated
Income Statement under the heading minority interest.
c) Transactions Eliminated on Consolidation
Intra-group balances, transactions and any unrealized gains and expenses arising from intra-group transactions are
eliminated in preparing the consolidated financial statements.
d) Reporting Date
All the Group’s subsidiaries have a common financial year end.
2.3 ASSETS & BASES OF THEIR VALUATION
2.3.1 Property, Plant & Equipment
a) Cost
Property, plant and equipment is recorded at cost less accumulated depreciation and less any impairment in value.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
b) Cost and Valuation
All items of property, plant and equipment are initial ly recorded at cost. Where items of property, plant and
equipment are subsequently revalued, the entire class of such assets is revalued.
c) Depreciation
Provision for depreciation is calculated by using straight l ine on the cost or valuation of all property, plant and
equipment other than freehold land, in order to write off such amounts over the estimated useful l ives of such assets.
Assets held under finance lease are depreciated over the shorter of the lease term or the use l ives of equivalent
owned assets.
The principal annual rates used for this purpose, which are consistent with that of the proceeding years are;
Per annum %
Factory Buildings 2.5
Generator House 5.0
Other Buildings 10.0
Fuel Storage Tanks 5.0 Plant and Machinery 5.0
Power Plant 5.0
Laboratory Equipment and Generators 10.0
Office Equipment 12.5 / 25.0
Factory and Other Equipment 15.0
Recycling system 12.5
Furniture and Fittings 12.5
Vehicles 17.5 / 25.0
Cement Silo 2.5
Tug Boat 10.0
Railway Platform 10.0
Barges 10.0 Computer and Other Electrical Equipment 12.5
Packer House 5.0
Landing Jetty 5.0
Batching Plant 10.0
Vessel 10 / 12.5
Vessel Dry Docking 40.0
Dry Docking - Special survey 20.0
Vessel Equipment 5.0
Bio Mass Building 10.0
Bio Mass Plant & Machinery 5.0
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
Depreciation of assets begins when it is available for use and ceases at the earl ier of the date that the asset is
classified as held for sale and the date that the asset is derecognized.
Vessel Dry Docking has exceptionally been depreciated from the date of completion of Dry Docking until the next
Dry Docking which is estimated as 2 ½ years. As per the rul ing obtained from the Urgent Issue Task Force (UITF) of the
Institute of Chartered Accountants of Sri Lanka, the special survey dry docking expenses are to be amortized over
five years.
The asset’s residual values, useful l ives and methods of depreciation are reviewed and adjusted if appropriate at
each financial year.
d) Restoration Costs
Expenditure incurred on repairs or maintenance of property, plant and equipment in order to restore or maintain
the future economic benefits expected from originally assessed standard of performance is recognized as an
expense when incurred.
e) DerecognizingAn item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognizing of the asset is calculated as the
difference between the net disposal proceeds and the carrying amount.
2.3.2 Leases
a) Finance Leases – where the company is the lessee
Leases in terms of which the Group assumes that substantial ly of all the risks and rewards of ownership are classified
as finance leases. Assets acquired by way of a finance lease are measured at an amount equal to the lower of their
fair value or the present value of minimum lease payments at the inception less accumulated depreciation and
accumulated impairment losses.
The corresponding principal amount payable to the lessor is shown as a l iabil ity. The finance charges allocated to
future periods are separately disclosed in the notes.
The interest element of the rental obligation applicable to each financial year is charged to the income statement
over the period of the lease so as to produce a constant periodic rate of interest on the remaining balance of the
liabil ity for each period.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
The cost of improvements to or on leased property is capital ized, and depreciated over the unexpired period of
the lease or the estimated useful l ives of the improvements, whichever is shorter.
Any excess of sales proceeds over the carrying amount of assets in respect of a sale and leaseback transaction that
result in a finance lease, is deferred and amortized over the lease term.
b) Operating Leases
Leases where the lessor effectively retains substantial ly all the risks and rewards of an asset under the leased term,
are classified as operating leases.
Lease payments (excluding cost of service such as insurance and maintenance) paid under operating leases are
recognized as an expense in the income statement over the period of lease on a straight l ine basis.
2.3.3 Impairment of Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If such
indication exists or when annual impairment testing for an asset is required the Company makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fairvalue less costs to sell and its value in use and determined for an individual asset, unless the asset’s does not
generate cash inflows that are largely independent of those from other assets or group of assets. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down
to its recoverable amount. In assessing value in use, the estimated future cash f lows are discounted to their present
value using a pretax discount rate that reflects current market assessment of the time value of money and the risk
specific to the asset. These calculations are collaborated by valuation multiples, quoted share prices or other
available fair value indicators.
Impairment losses of continuing operations are recognized in the income statement in those expense categories
consistent with the function of the impaired asset, except for property previously revalued where the revaluation
was taken to equity. In this case the impairment is also recognized in equity up to the amount of any previous
revaluation.
For assets excluding goodwil l, an assessment is made at each reporting date as to whether there is any indication
that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists,
the company makes an estimate of recoverable amount. A previously recognized impairment loss is reversed only
if there has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognized. If that is the case the carrying amount of the asset is increased to its recoverable
amount.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
That increased amount cannot “exceed” the carrying amount that would have been determined, net of depreciation
had, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the income
statement unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation
increase.
2.3.4 Goodwill
Goodwil l represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition.
Goodwil l is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that
the carrying value may be impaired.
Impairment is determined for goodwil l by assessing the recoverable amount of the cash generating unit (or, group
of cash generating units) to which the goodwil l relates. Where the recoverable amount of cash generating unit (or,
group of cash generating units) is less than the carrying amount of cash generating unit (or, group of cash generating
units) to which goodwil l has been allocated, an impairment loss is recognized. Impairment losses relating to Goodwil l
cannot be reversed in future periods.
2.3.5 Capital Work in Progress
Capital work in progress is transferred to the respective asset accounts at the time of the first uti l ization of the asset.
2.3.6 Investments
Long Term Investments
Long term investments are classified as non current investments and are stated at cost less any impairment losses.
The cost of the Investment includes acquisition charges such as brokerages fee, duties and bank charges.
In the parent Company’s financial statement, investment in subsidiaries are carried at cost less impairment loss.
Provision for impairment is made in the Income Statement when in the opinion of the Directors there has been a
decline other than temporary in the value of the investments determined on individual basis.
2.3.7 Inventories
Inventories are measured at the lower of cost and net realizable value, after making due allowances for obsolete
and slow moving items. Net realizable value is price at which inventories can be sold in the ordinary course of
business less the estimated cost of completion and estimated cost necessary to make the sale.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
The cost incurred in bringing inventories to its present location and condition is accounted using the following cost
formula.
Raw Material - At cost determined on first-in-first-out basis
Finished Goods - At the cost of direct materials, direct labour and appropriate proportion of fixedproduction overheads at normal operating capacity.
Work In progress - At the cost of direct materials, direct labour and appropriate proportion of f ixed
production overheads.
Packing Material - At cost determined on first-in first-out basis
Goods in Transit - At actual cost
2.3.8 Trade and Other Receivable
Trade and other receivables are recognized at the amounts they are estimated to realize net of provisions for
impairment.
Other receivables and dues from related parties are recognized at cost less provision for impairment. The amount
of the provision is recognized in the income statement.
2.3.9 Cash and Cash Equivalents
Cash and cash equivalents are defined as cash in hand and demand deposits.
For the purpose of cash flow statement, cash & cash equivalent consists of cash in hand and deposits in banks net
of outstanding bank overdrafts.
The cash flow statements are reported based on the indirect method.
2.4 LIABILITIES & PROVISIONS
2.4.1 LiabilitiesLiabil ities classified under current l iabil ities in the balance sheet are those expected to fall due within one year from
the balance sheet date. Items classified as non-current l iabil ities are those expected to fall due at point of time after
one year from the balance sheet date.
Trade and Other Payables
Trade creditors and other payables are stated at their book values.
2.4.2 Provisions, Contingent Assets and Contingent Liabilities
Provisions are recognized when the group has a present obligations (legal & constructive) as a result of a past event,
where it is probable that an outflow of resources embodying economic benefits wil l be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
All the contingent l iabil ities are disclosed as notes to the Financial Statements unless the outflow of resources is made
contingent asset if exits are disclosed when inflow of economic benefit is probable.
All the contingent l iabil ities are disclosed on notes to the financial statements unless the outflow of resources is made
contingent asset if exits are disclosed when inflow of economic benefit is probable.
2.4.2.1 Retirement Benefit Obligations
2.4.2.1.1 Defined Benefit Plans – Gratuity
Provision has been made for retirement gratuities, in conformity with SLAS 16 / Gratuity Act No.12 of 1983. The
liabil ity is not externally funded. The gratuity l iabil ities were based on actuarial valuation carried out. The actuarial
gains and losses are charged or credited to the Income statement in the period is which they arise.
2.4.2.1.2 Defined Contribution Plans – Employees’ Provident Fund and Employees’ Trust Fund
Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributions in l ine
with respective statutes and regulations. The Company contributes 12% and 3% of gross emoluments of employees
to the Employees’ Provident Fund and to the Employees’ Trust Fund respectively
2.4.2.2 Taxation
The provision for Income Tax is based on the elements of income and expenditure as reported in the financial
statements and computed in accordance with the provisions of the Inland Revenue Act No.10 of 2006 and the
amendments thereto.
The Company has entered into an agreement with Board of Investment of Sri Lanka Law No. 4 of 1978 under which
the profit is exempt from Income Tax for a period of ten years of assessment from the date of the completion of the
stipulated investment of Rs.500 Mil l ion which was fulfi l led on 2003 and as such the tax exemption period
commenced on the said date.
Fuji Cement Company (Lanka) Limited a subsidiary of the Company, is l iable for income tax under the Inland Revenue
Act No. 10 of 2006 at the rate of 35% on its profit plus SRL on such tax at 1.5%.
Tokyo Cement Colombo Terminal (Pvt) Ltd a subsidiary of the Company is l iable to pay income t ax under the Inland
Revenue Act No.10 of 2006. There is no tax l iabil ity for the current year owing to continuous adjusted losses for
income tax purposes.
Tokyo Super Cement Company Lanka (Pvt) Ltd a subsidiary of the Company has entered into an agreement with
Board of Investment of Sri Lanka Law No. 4 of 1978 under which the profit is exempt from Income Tax for a period
of ten years of assessment reckoned from the date of commencement of business.
2.4.2.2.1 Deferred Taxation
Deferred tax is provided using the l iabil ity method on temporary differences at the Balance Sheet date between the
tax bases of assets and l iabil ities, and their carrying amounts for financial reporting purposes.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
Deferred tax assets and l iabil ities are recognized for all temporary differences. Deferred tax assets are recognized
for all deductible temporary differences, carry-forward of unused tax credits and unused t ax losses, to the extent
that it is probable that taxable profit wil l be available against which the deductible temporary differences, and the
carry-forward of unused tax credits and unused losses can be util ized.
The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that
it is no longer probable that sufficient t axable profit wil l be available to allow all or part of the deferred tax assets to
be util ized. Unrecognized deferred tax assets are reassessed at each Balance Sheet date and are recognized to
the extent that it has become probable that future taxable profit wil l al low the deferred tax asset to be recovered.
Deferred tax assets and l iabil ities are measured at the t ax rates that are expected to apply to the year when the
asset is realized or the l iabil ity is settled, based on tax rates and tax laws t hat have been enacted or substantively
enacted at the Balance Sheet date.
Income tax relating to items recognized directly in equity is recognized in equity
Deferred tax asset and deferred tax l iabil ities are offset, if a legally enforceable right exists to set off current taxassets against current tax l iabil ities and the deferred taxes relate to the same taxable entity and t he same taxation
authority.
Since the Company enjoys a ten year tax holiday from the year of assessment 2003/04, certain temporary
differences wil l not be reversed for some considerable period ahead.
Considering the above, the tax effect of such timing differences have been excluded from the tax expenses for the
period under review and periods preceding it.
2.4.3 Commitments
All material commitments as at the Balance Sheet date have been identified and disclosed in the notes to the
financial statements.
2.5 INCOME STATEMENT
2.5.1 Revenue Recognition
a) Sale of Goods
Revenue is recognized to the extent that it is probable that the economic benefits wil l flow to the Company and the
revenue and associated costs incurred can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable net of trade discounts and sales taxes. Revenue is recognized when the
significant risks and records of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs and possible return of goods can be estimated reliably.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
b) Interest
Interest income is recognized as the interest accrued on the time basis (taking into account the effective yield on the
asset) unless collectibil ity is in doubt.
c) Dividend
Dividend income is recognized when the share holder’s right t o receive payment has been established.
d) Others
Other income is recognized on an accrual basis.
e) Gains and Losses
Net gains and losses of a revenue nature on the disposal of property, plant and equipment and other non current
assets including investments have been accounted for in the income statement having deducted from proceeds on
disposal, the carrying amount of the assets and related property, plant and equipment amount remaining in
revaluation reserve relating to that asset is transferred directly to accumulated profit/( loss).
2.5.2 Expenditure Recognition
2.5.2.1 Expenses are recognized in the income statement on the basis of a direct association between the cost
incurred and the earning of specific items of income. All the expenditure incurred in the running of the business and
in maintaining the property, plant and equipment in a state of efficiency has been charged to income in arriving at
the profit for the year.
2.5.2.2 For the purpose of presentation of the income statement the directors are of the opinion that function of
expenses method presents fairly the elements of the Company’s performance and hence such presentation method
is adopted.
2.5.2.3 Borrowing Costs
Borrowing costs are recognized as an expense in the period in which they are incurred, except to the extent where
borrowing costs are directly attributable to the acquisition, construction or production of a qualifying assets which are
assets that necessarily takes a substantial period of time to get ready for its intended are added to the cost of those
assets. Until such time as the assets are substantial ly ready for their intended use or sale.
Investment income earned on temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing cost el igible for capital ization.
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SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE FINANCIAL STATEMENTS
2.6 GENERAL
2.6.1 Events Occurring after the Balance Sheet Date
All material events occurring after the Balance Sheet date have been considered and where necessary adjustments
to or disclosures have been made in the respective notes to the Financial Statements.
2.6.2 Related Party Transactions
Disclosures are made in respect of the transactions in which the Company has the abil ity to control or exercise
significant influence over the financial and operating decisions/policies of the other, irrespective of whether a price
is charged.
2.6.3 Earnings Per Share
The group presents basic earnings per share (EPS) for its voting and non voting ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary share holders of the Company by the number of
voting and non voting ordinary shares.
2.6.4 Segment ReportingA segment is a distinguishable component of the Group that is engaged either in providing related products or
services within a particular economic environment (Geographical Segment), which is subject to risks and rewards
that are different from those of other segments.
2.6.5 Comparative Figures
Where necessary comparative figures have been reclassified to conform to t he current years presentation.
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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE F INANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Interest Income 778,958 526,438 - -
Miscellaneous Income 170,433,552 51,240,605 163,659,568 44,062,143
Differed Revenue (Sale and Lease Back) 2,875,587 5,821,441 - 4,135,320
Exchange Gain 2,987,118 - 1,495,970 -
Dividend Received from Fuji Cement Company Lanka Ltd. - - 1,149,999,235 149,999,904
Handling Charges 103,996,099 109,529,777 - -Hiring Income of Prime Movers - 18,030,679 - -
Freight Income 182,915,573 - - -
463,986,887 185,148,940 1,315,154,7 73 198,197,367
Consolidated Company
3. OTHER INCOME
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Interest on Borrowings 791,968,372 785,335,194 247,143,749 54,925,551
Interest on Overdaft 7,265,916 5,848,584 - 555,445
Interest on Lease 29,521,826 25,883,594 8,630,355 7,432,698Exchange Loss 8,372,189 17,406,903 - 2,060,263
837,128,303 834,474,275 255,774,104 64,973,957
Consolidated Company
4. FINANCE COST
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
A. Profit /(Loss) Before Taxation 347,491,331 646,956,080 1,464,965,193 142,899,477
B. Profit/(Loss) Before Taxation is Stated After Charging
all Expenses including the following
Depreciation on Property, Plant, and Equipment 904,647,012 1,006,246,819 433,670,100 558,970,235
Directors Emoluments 14,960,712 12,765,306 14,960,712 12,765,306Auditors Remunaration - Audit Services 3,920,355 3,445,840 1,520,875 1,580,000
Charity and Donations 7,402,158 63,291,216 7,134,809 62,655,116
Staff Cost 259,024,277 256,804,944 176,441,333 166,513,542
Defined Benefits Cost - Retirement Benefit Obligation 7,789,673 6,476,744 4,926,884 3,978,929
RsDefined Contribution Plan Cost - E.P.F. & E.T.F. 16,805,217 15,095,020 10,996,727 9,219,331
Royalty - 37,364,867 - 29,479,582
Amortization of Operating Lease 4,341,270 4,341,270 - -
Research and Development Cost 1,964,313 1,819,891 1,957,713 1,819,891
Legal Expenses & Professional Fee 20,991,655 20,215,715 13,746,962 10,184,645
Repairs and Maintenance 554,977,215 399,786,062 422,767,587 317,786,990
Reimbursement of Vessel Operational Expenses 524,504,543 306,277,205 146,679,125 155,744,670
Sales Commission 309,946,481 390,942,124 138,145,812 126,490,553
NBT Expenses 256,972,593 23,291,261 149,955,811 18,679,774
Advertisements 60,651,072 43,212,289 53,188,532 21,589,453
Bad Debts Written off 2,460,160 5,853,851 - 378,155
Consolidated Company
5. NET PROFIT BEFORE TAXATION
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 71
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Current Income Tax Provision 46,584,145 58,211,184 3,612,167 -
Deferred Taxation (50,452,335) 231,269,573 - -
(3,868,190) 289,480,757 3,612,167 -
Consolidated Company
6. INCOME TAX EXPENSE
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Dividend - Interim
- Voting 1.65 0.30 1.65 0.30
- Non Voting 1.65 0.30 1.65 0.30
Consolidated Company
8. DIVIDEND PER SHARE
Consolidated
Reconcil iation between Current Tax Expense/(Income)and the Product of Accounting Profit.
Company
6.A. INCOME TAX
Consolidated
Basic Earnings Per Share
The Calculation of basic earning per ordinary share is based on the profit attributable to ordinary shareholders divided by the weighted average
number of ordinary shares in issue as at 31st March, 2010.
Company
7. EARNINGS PER ORDINARY SHARES
Note 01
Other Income consisting of Freight Income has been treated as exempt under section 13(dddd) of the Inland Revenue Act, No. 10 of 2006 as amended.
Note 01
As per the Special Resolution passed at the Extra Ordinary General Meeting (EGM) held on 20th January 2010, it was resolved that each of the issued
and subscribed 18Mn Voting Ordinary shares be sub - divided into 10 (ten) Ordinary shares (Voting) fully paid up. Therefore,the number of ordinary shares
outstanding is increased without an increase in resources.
Diluted Earnings Per Share
There is no potentially dilutive ordinary share of the Company and as a result the diluted earnings per share (EPS) is the same as basic EPS shown above.
Rs. Note 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Profit Attributable to Ordinary Shareholders - Voting 246,202,601 231,087,494 974,235,351 95,266,318
Profit Attributable to Ordinary Shareholders - Non Voting 123,101,300 115,543,747 487,117,675 47,633,159
Total Profit Attributable to Ordinary Shareholders 369,303,901 346,631,241 1,461,353,026 142,899,477
Weighted Average Number of Ordinary Shares - Voting 01 180,000,000 180,000,000 180,000,000 180,000,000
Weighted Average Number of Ordinary Shares - Non Voting 90,0 00,0 00 90,0 00,0 00 90,0 00,0 00 90,0 00,0 00
Basic Earnings per Ordinary Share - Voting 1.37 1.28 5.41 0.53Basic Earnings per Ordinary Share - Non Voting 1.37 1.28 5.41 0.53
Rs. Note 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Accounting Profit before Taxation 347,491,331 646,956,080 1,464,965,193 142,899,477
Less: Exempt Profit (Note 2.4.2.2.) 337,323,372 483,096,309 1,378,087,323 142,899,477
Trade loss carried forward to the Y/A 2010/2011 1,062,333,732 - -
Profit from Trade and Business 133,837,238 - - -
Liable Other Income 10,167,959 163,859,771 10,167,959 -
Exempt Other Income 01 182,915,573 - - -
Tax Rate for the Year 35% 35% 35% 35%
Income Tax Provision for the Year 21,434,967 57,350,920 3,558,785 -
Social Responsibil ity Levy 321,825 860,264 53,382 -
21,776,791 58,211,184 3,612,167 -
Income Tax Under Provision For Previous Years 24,807,354 - - -
46,584,145 58,211,184 3,612,167 -
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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
9. PROPERTY, PLANT AND EQUIPMENT
9 A. CONSOLIDATEDCOST/VALUATION
Freehold Land 32,581,600 - - - 32,581,600 F ac to ry B ui ld in gs 6 39 ,6 93 ,8 89 3 66 ,7 87 ,4 50 - - 1 ,0 06 ,4 81 ,3 39
Generator House 22,558,795 - - - 22,558,795
O th er B ui ld in gs 3 09 ,6 07 ,5 53 3 7, 15 4, 11 6 - - 3 46 ,7 61 ,6 69
Fuel Storage Tanks 4,940,759 - - - 4,940,759
P la nt & M ac hi ne ry 3 ,1 78 ,7 52 ,8 97 1 6, 81 5, 36 2 - - 3 ,1 95 ,5 68 ,2 59
Power Plant 221,083,463 - - - 221,083,463
F ac to ry a nd O th er E qu ipm en t 2 55 ,8 64 ,0 93 2 ,7 88 ,4 93 - - 2 58 ,6 52 ,5 86
La bora tory Eq uipment 2 5,87 9,4 72 78,4 89 - - 25,9 57, 961
Office Equ ipment 1 2,49 1,0 15 99 2,2 43 - - 13,4 83, 258
Generators 18,647,905 5,790,000 - - 24,437,905
Recycl ing System 785,895 - - - 785,895
F ur ni tu re & F it ti ng s 1 0, 17 4, 05 3 1 ,2 94 ,9 13 - - 1 1, 46 8, 96 6
Vehicles 509,533,951 30,374,889 4,405,443 2,738,600 538,241,997
Bulk Cement Carriers 12,637,344 - - - 12,637,344
Ce me nt Sil os 44 8,79 4,04 1 6,32 5,51 5 - - 4 55,1 19, 556
Cement Silos - Steel 27,322,920 - - - 27,322,920
Tug Boat 1,628,408 - - - 1,628,408
Railway Platform 7,263,915 - - - 7,263,915
Barges 11,812,085 - - - 11,812,085
C om pu te r & O th er E le ct ro ni c E qu ip me nt 3 4, 73 2, 87 5 5 ,2 00 ,1 27 - - 3 9, 93 3, 00 2
Packer House 67,760,711 - - - 67,760,711
Landing Jetty 66,420,752 - - - 66,420,752
Batching Plant & Pumper Truck 222,704,579 - - - 222,704,579
Vessel 2,777,881,354 694,800,000 1,172,120,000 - 2,300,561,354
Vessel Dry Docking 1,236,312,613 208,207,265 219,358,597 - 1,225,161,281
Bio Mass Building 207,472,122 - - - 207,472,122
B io M as s P la nt & M ac hi ne ry 2 ,3 55 ,4 11 ,6 32 9 ,8 12 ,6 43 - - 2 ,3 65 ,2 24 ,2 75
12,720,750,691 1,386,421,505 1,395,884,040 2,738,600 12,714,026,756
Leasehold Land 25,815,500 - - - 25,815,500
L ea se ho ld A ss et s- Mo to r V eh ic le 1 96 ,4 52 ,1 46 - - ( 2, 73 8, 60 0) 1 93 ,7 13 ,5 46
12,943,018,337 1,386,421,505 1,395,884,040 (2,738,600) 12,933,555,802
Item As at Transfer to As at
Rs. 01.04.2009 Additions Disposals Freehold category 31.03.2010
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- - - - - 32,581,600 32,581,600 2 02 ,6 33 ,9 41 2 1, 53 6, 28 2 - - 2 24 ,1 70 ,2 23 7 82 ,3 11 ,1 16 4 37 ,0 59 ,9 48
1 3, 53 1, 84 4 1 ,1 27 ,9 40 - - 1 4, 65 9, 78 4 7 ,8 99 ,0 11 9 ,0 26 ,9 51
1 05 ,5 73 ,1 53 3 1, 91 7, 96 1 - - 1 37 ,4 91 ,1 14 20 9, 27 0, 55 5 2 04 ,0 34 ,4 00
3 ,598 ,513 247 ,038 - - 3, 845 ,551 1,09 5,2 08 1, 342, 246
77 1, 17 1, 70 7 1 62 ,2 38 ,1 75 - - 9 33 ,4 09 ,8 82 2 ,2 62 ,1 58 ,3 77 2 ,4 07 ,5 81 ,1 90
1 16 ,8 85 ,9 64 1 0, 55 1, 97 3 - - 1 27 ,4 37 ,9 37 9 3, 64 5, 52 6 1 04 ,1 97 ,4 99
2 14 ,3 77 ,2 65 1 2, 37 7, 22 4 - - 2 26 ,7 54 ,4 89 3 1, 89 8, 09 7 4 1, 48 6, 82 8
9 ,3 60 ,3 55 2 ,3 34 ,0 15 - - 1 1, 69 4, 37 0 1 4, 26 3, 59 1 1 6, 51 9, 11 7
8, 488, 587 911, 812 - - 9, 400, 399 4 ,08 2,85 9 4, 002, 428
5 ,9 74 ,1 82 1 ,7 34 ,3 64 - - 7 ,7 08 ,5 46 1 6, 72 9, 35 9 1 2, 67 3, 72 3
785,895 - - - 785,895 - -
5, 822, 416 964, 469 - - 6,7 86, 885 4 ,682 ,081 4 ,3 51,6 37
250,004,800 80,341,172 657,697 2,738,600 332,426,875 205,815,122 259,529,151
12,637,344 - - - 12,637,344 - -
1 04 ,9 02 ,2 43 1 5, 17 0, 01 2 - - 1 20 ,0 72 ,2 55 33 5, 04 7, 30 1 3 43 ,8 91 ,7 98
2 ,6 31 ,6 82 5 ,0 82 ,5 84 - - 7 ,7 14 ,2 66 1 9, 60 8, 65 4 2 4, 69 1, 23 8
1,628,408 - - - 1,628,408 - -
7,263,915 - - - 7,263,915 - -
10,031,100 - - - 10,031,100 1,780,985 1,780,985
2 5, 00 8, 11 1 3, 89 5, 05 1 - - 2 8, 90 3, 16 2 1 1, 02 9, 84 0 9 ,7 24 ,7 64
2 7, 07 3, 27 5 1 ,8 47 ,9 90 - - 2 8, 92 1, 26 5 3 8, 83 9, 44 6 4 0, 68 7, 43 62 9, 72 8, 51 6 3 ,3 21 ,0 38 - - 3 3, 04 9, 55 4 3 3, 37 1, 19 8 3 6, 69 2, 23 6
4 4, 84 3, 27 6 2 2, 27 0, 45 8 - - 6 7, 11 3, 73 4 1 55 ,5 90 ,8 45 1 77 ,8 61 ,3 03
901,618,852 158,145,887 504,662,779 - 555,101,960 1,745,459,394 1,876,262,502
649,696,875 189,779,536 104,757,127 - 734,719,284 490,441,997 586,615,738
3 97 ,8 92 2 0, 74 7, 21 3 - - 2 1, 14 5, 10 5 1 86 ,3 27 ,0 17 2 07 ,0 74 ,2 30
2 ,2 58 ,6 14 1 17 ,9 36 ,4 91 - - 1 20 ,1 95 ,1 05 2 ,2 45 ,0 29 ,1 70 2 ,3 53 ,1 53 ,0 18
3,527,928,725 864,478,685 610,077,603 2,738,600 3,785,068,407 8,928,958,349 9,192,821,966
2,7 36,8 06 4 20,0 51 - - 3,15 6,85 7 22, 658, 643 23 ,07 8,69 4
52,900,105 39,748,276 - (2,738,600) 89,909,781 103,803,765 143,552,041
3,583,565,636 904,647,012 610,077,603 - 3,878,135,045 9,055,420,757 9,359,452,701
WDVDEPRECIATION
As at For the On Transfer to As at As at As at
01 . 04 .2009 Y ea r D is posa l s F reeho ld ca tegory 31 .03 .2010 31. 03. 2010 31 .03 .2009
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Freehold Land 17,906,600 - - 17,906,600
F ac tory Buil din gs 224,504,223 - - 224, 504,223
Generator House 22,558,795 - - 22,558,795
Other Buildings 298,238,140 37,154,116 - 335,392,256
Fuel Storage Tanks 4,940,759 - - 4,940,759
Plant & Machinery 1,005,405,239 16,679,267 - 1,022,084,506
Power Plant 210,267,852 - - 210,267,852
Factory and Other Equipment 242,598,624 1,673,569 - 244,272,193
Laboratory Equipment 25,879,472 78,489 - 25,957,961
Office Equipment 8,285,684 773,863 - 9,059,547
Generators 14,528,455 5,790,000 - 20,318,455
Recycling System 785,895 - - 785,895
Furniture & Fittings 8,143,901 1,207,156 - 9,351,057
Vehicles 399,922,920 20,552,233 - 420,475,153
Bul k Cement C arr iers 12,637,344 - - 12,637,344
Cement Silos 122,839,094 6,325,515 - 129,164,609
Tug Boat 1,628,408 - - 1,628,408
Railway Platform 7,263,915 - - 7,263,915
Barges 10,031,100 - - 10,031,100
Computer & Other Electronic - Equipment 19,955,281 2,101,027 - 22,056,308
Packer House 24,278,628 - - 24,278,628
Landing Jetty 66,420,752 - - 66,420,752
B at ch in g P la nt & P um pe r T ru ck 2 22 ,7 04 ,5 79 - - 2 22 ,7 04 ,5 79
Vessel 238,308,400 - - 238,308,400
Vessel D ry Doc kin g 1,016,954,016 - - 1,016,954,016
Bio Mass Building 207,472,122 - - 207,472,122
Bio Mass Plant & Machinery 2,355,411,632 9,812,643 - 2,365,224,275
6,789,871,830 102,147,878 - 6,892,019,708
Leasehold Land 25,815,502 - - 25,815,502
L ea se ho ld As se ts -M ot or V eh ic le 6 9, 53 7, 10 0 - - 6 9, 53 7, 10 0
6,885,224,432 102,147,878 - 6,987,372,310
9. B. COMPANY
COST/VALUATION
9. PROPERTY, PLANT AND EQUIPMENT
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MAR CH 31, 2010
ItemRs. As at As atRs. 01.04.2009 Addition s Disposals 31.03.2010
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- - - - 17,906,600 17,906,600
95,399,796 5,613,319 - 101,013,115 123,491,108 129,104,427
13,531,844 1,127,940 - 14,659,784 7,899,011 9,026,951
101,646,129 31,917,961 - 133,564,090 201,828,166 196,592,011
2,964,456 247,038 - 3,211,494 1,729,265 1,976,303
551,779,726 50,909,388 - 602,689,114 419,395,392 453,625,513
116,528,239 10,513,393 - 127,041,632 83,226,220 93,739,613
194,254,239 11,688,125 - 205,942,364 38,329,829 48,344,385
9,360,356 2,334,015 - 11,694,371 14,263,590 16,519,116
5,408,040 624,543 - 6,032,583 3,026,964 2,877,644
4,760,274 1,532,047 - 6,292,321 14,026,134 9,768,181
785,895 - - 785,895 - -
4,343,160 727,809 - 5,070,969 4,280,088 3,800,741
228,923,054 62,827,110 - 291,750,164 128,724,989 170,999,866
12,637,344 - - 12,637,344 - -
16,802,164 3,375,840 - 20,178,004 108,986,605 106,036,930
1,628,408 - - 1,628,408 - -
7,263,915 - - 7,263,915 - -10,031,100 - - 10,031,100 - -
13,713,096 1,555,343 - 15,268,439 6,787,869 6,242,185
13,353,232 1,213,932 - 14,567,164 9,711,464 10,925,396
29,889,338 3,321,038 - 33,210,376 33,210,376 36,531,414
44,682,453 22,270,458 - 66,952,911 155,751,668 178,022,126
238,308,400 - - 238,308,400 - -
452,284,632 65,382,771 - 517,667,403 499,286,613 564,669,384
397,892 20,747,213 - 21,145,105 186,327,017 207,074,230
2,258,614 117,936,491 - 120,195,105 2,245,029,170 2,353,153,018
2,172,935,796 415,865,774 - 2,588,801,570 4,303,218,138 4,616,936,034
2,736,806 420,051 - 3,156,857 22,658,645 23,078,696
33,838,894 17,384,275 - 51,223,169 18,313,931 35,698,206
2,209,511,496 433,670,100 - 2,643,181,596 4,344,190,714 4,675,712,936
As at For the On As at As at As at
01 .0 4. 20 09 Y ea r D is po sa ls 3 1. 03 .2 01 0 31 .0 3. 20 10 3 1. 03 .2 00 9
WDVDEPRECIATION
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10. GOODWILL
11. INVESTMENTS
12. OPERATING LEASE PREPAYMENT
Goodwil l reflects the excess of the purchase price of shares in Tokyo Cement Colombo Terminal (Pvt.) Ltd, (Formerly known as
Samudra Cement Company Lanka (Pvt) Ltd.) over the fair value of the proportionate share of the net assets of such Company as
at the date of acquisition. Unamortized balance of Goodwil l as at 01st April 2005 as well as goodwil l generated from further
acquisition which was made on 31st December 2006 recorded as a permanent asset subject to impairment testing.
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Investments In Subsidiaries - Unquoted - At Cost
Fuji Cement Company (Lanka) Ltd.
Ordinary Shares (9,000,000 shares) - - 90,000,000 90,000,000
10% Convertible Preference Shares
(6,000,000 Shares) - - 60,000,000 60,000,000
Tokyo Cement Colombo Terminal (Pvt.) Ltd.
Ordinary Shares - 19,425,000 - - 235,050,010 235,050,010
Tokyo Super Cement Company Lanka (Pvt) Ltd.
Ordinary Shares of 85,010,002 Shares - - 850,100,020 100,100,020
- - 1,235,150,030 485,150,030
Investments - Quoted
Commercial Bank of Ceylon PLC.
13% Redeemable Preference Shares
(Market Value Rs.9.00 per Share) - 500,000 - 500,000
- 500,000 1,235,150,030 485,650,030
Consolidated Company
Consolidated Company
Balance as at 01.04.2009 78,142,856 82,484,126 - -
Amortization during the year (4,341,270) (4,341,270) - -
73,801,586 78,142,856 - -
Less: Current Portion of Prepayment 4,341,270 4,341,270 - -
Balance as at 31st March, 2010 69,460,316 73,801,586 - -
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
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ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 77
13. INVENTORIES
Consolidated Company
Raw Materials 304,750,093 638,349,092 86,104,877 323,324,791
Finished Goods - Manufactured 132,675,135 202,407,339 116,904,025 89,475,567
Packing Materials 139,443,645 403,073,369 10,181,876 247,766,448
Spares and Consumables 80,074,186 104,837,508 55,870,883 64,423,011
Grinding Media 30,878,874 39,586,952 30,878,874 39,586,952
Balance as at 31st March, 2010 687,821,933 1,388,254,260 299,940,535 764,576,769
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
14. TRADE & OTHER RECEIVABLES
Consolidated CompanyRs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Group inventories have been pledged as security for term loans obtained, details of which are disclosed in Note 24.
Trade Debtors 921,376,332 983,764,018 308,912,193 588,330,288
Deposits, Advances and Pre-payments 57,207,144 78,608,301 24,690,252 29,841,393
Other Receivables 334,502,213 665,266,462 145,799,921 442,720,671
Balance as at 31st March, 2010 1,313,085,689 1,727,638,781 479,402,366 1,060,892,352
15. AMOUNT DUE FROM RELATED PARTIES
Consolidated Company
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Tokyo Cement Colombo Terminal (Pvt) Ltd. - - 6,420,160 8,513,730
Tokyo Super Cement Company Lanka (Pvt) Ltd. - - 1,167,503, 351 3,985,542
Balance as at 31st March, 2010 - - 1,173,923,511 12,499,272
16. STATED CAPITAL
Consolidated Company
At the At the At the At the
Beginning Sub division End of Beginning Sub division End of
Rs. Note of the Year of the Year of the Year of the Year
Number Of Shares 01.04.2009 Shares 31.03.2010 01.04.2009 Shares 31.03.2010
Value Rs.
Ordinary Shares
- Voting
- Non Voting
Note 01
As per the Special Resolution passed at the Extra Ordinary General Meeting (EGM) held on 20th January 2010, it was resolved that each of
the issued and subscribed 18Mn Voting Ordinary shares be sub - divided into 10 (ten) Ordinary shares (Voting) fully paid up. Therefore,the
number of ordinary shares outstanding is increased without an increase in resources.
}1,793,000,000 - 1,793,000,000 1,793,000,000 - 1,793,000,000
Ordinary Shares
- Voting 01 18,000,000 162,000,000 180,000,000 18,000,000 162,000,000 180,000,000
- Non Voting 90,000,000 - 90,000,000 90,000,000 - 90,000,000
108,000,000 162,000, 000 270,000,000 108,000,000 162,000,000 270,000,000
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TheEastern Pride
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17. RESERVES
Consolidated Company
Capital Redemption Reserve Fund 150,000,000 150,000,000 - -
150,000,000 150,000,000 - -
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
18. INTEREST BEARING BORROWINGS
Consolidated Company
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
a) Shigyo and Company - Preliminary Expenses Rs.4,260,894/-
The above amount has been written back in the Financial Statements.
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
Nippon Coke & Engineering Co. Ltd
(Mitsui Mining Company Ltd) - 180,534,441 - 180,534,441
Shigyo & Company - Preliminary Expenses - 4,260,894 - 4,260,894
- 184,795,335 - 184,795,335
Balance as at 01.04.2009 3,437,396,608 3,097,565,274 603,757,776 -
Add:
Loans Obtained/Exchange Loss during the year 7,419,039,63 2 5,350,378,696 2,660,000,000 1,030,000,000
10,856,436,240 8,632,739,305 3,263,757,776 1,214,795,335
Less:
Settlements during the year/
(Exchange Gain) during the year (7,108,455 ,971) (5,195,34 2,697) (2,113,726 ,282) (611,037,55 9)
Loan Repayable Write Back (4,260,894) - (4,260,894) -
Balance as at 31.03.2010 3,743,719,375 3,437,396,608 1,145,770,600 603,757,776
Current Maturity Portion 2,356,956,650 2,569,470,983 460,669,200 401,100,000
Non Current Maturity Portion 1,386,762,725 867,925,625 685,101,400 202,657,776
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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Balance as at 01.04.2009 264,087,499 32,817,926 32,817,926 32,817,926
Charge to / (from) Income Statement (50,452,335) 231,269,573 - -
Balance as at 31.03.2010 213,635,164 264,087,499 32,817,926 32,817,926
Sri Lanka Accounting Standard 14 Income Taxes does not specify the recognition and measuement of deferred tax for companies which enjoy tax
holidays under local jurisdictions.
Section 17 of the Board of Investments Law No. 4 of 1978, under which the Board of Investment (BOI) in Sri Lanka is set up, has given the Board the
power to grant exemptions from the Inland Revenue Act. The Board on entering into agreement with entities in the Group has stated that the
provisions of the respective Inland Revenue Acts to the imposition, payment and recovery of income tax in respect of the profits and income of the
enterprise shall not apply during the period of the tax exemption. For certain companies of the Group the BOI has given the option to pay tax as a
percentage of turnover or at a concessionery rate after the expiration of the tax holiday period.
The Urgent Issues Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanaka is at present interpreting the applicability of SLAS 14 to companies
under BOI tax holidays and if deemed applicable will specify the method of computing and the timing of accounting for deferred tax during the tax holiday
period. The Company awaits the ruling of the UITF to determine the accounting for deferred tax in relation to tax holiday companies.
20. RETIREMENT BENEFIT OBLIGATION
Provision for Retiring Gratuity
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
At the beginning of the Year 23,039,761 22,909,233 16,695,742 17,210,078
Acturial (Gains) /Losses 1,861,331 - 1,055,496 -
Current Service Cost 3,192,157 - 1,867,899 -
Interest Cost 2,736,185 - 2,003,489 -
Provision for the Year 7,789,673 6,476,744 4,926,884 3,978,929
30,829,434 29,385,977 21,622,626 21,189,007
Adjustment Made - (6,127,333) - (4,374,984)
Payments during the Year (961,844) (218,883) (593,894) (118,281)
At the end of the Year 29,867,590 23,039,761 21,028,732 16,695,742
19. DEFERRED TAX
Consolidated Company
Consolidated Company
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 79
Consolidated Company
20.1. The amounts recognised in the Balance Sheet are as follows
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Present Value of Unfunded Obligations 29,867,590 23,039,761 21,028,732 16,695,742
Total Present Value of Obligations 29,867,590 23,039,761 21,028,732 16,695,742
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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE F INANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
22. CAPITAL COMMITMENTS
Tokyo Cement Company (Lanka) PLC.
The Capital expenditure for the Jaffna Batching Plant Project, which is approved by the Board of Directors and contracted for, amounts
to approximately Rs.60 Mn.
23. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
23.1 Contingent Liabilities
a) The Group awaits the rul ing of the UITF to determine the accounting for deffered tax in relation to tax holiday companies.
b) Value Added Tax assessment for the months ending November, 2002 and March, 2003 have been issued by the Department of InlandRevenue.
20.2 The Group has adopted SLAS 16 ( Revised 2006) in determining this l iabil ity in respect of retiring gratuity. According to SLAS 16, actuarial
techniques should be used to make a reliable estimate of the amount of the retirement benefit obligation to the employees. The Group has
adopted the ‘ Project Unit Credit Method’ to determine the present value of the retiring benefit obligation as recommended by SLAS 16. The
actuarial valuation was carried out by M/s Actuarial & Management Consultants ( Pvt) Ltd in respect of Tokyo Cement Company (Lanka) PLC,
Fuji Cement Company (Lanka) Ltd,Tokyo Super Cement Company Lanka (Pvt) Ltd, Tokyo Cement Colombo Terminal (Pvt) Ltd. The l iabil ity is not
externally funded.
20.3 The principal actuarial assumptions used in determining this obligation were;
2009/2010 2008/2009
a) Discount rate 11% 12%
b) Salary increment 10% 10%
c) Retirement age 55 years
Assumptions regarding future mortality are based on a 67/70 mortality table, issued by the Institute of Actuaries, London.
Consolidated Company
21. TRADE & OTHER PAYABLES
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
Bil ls Payable 1,125,811,716 2,616,795,493 538,840,952 1,131,286,009
Expense Creditors 823,949,568 823,896,370 475,437,557 511,677,627
Other Creditors 270,143,753 333,868,518 59,929,829 108,169,005
2,219,905,0 37 3,774,560,38 1 1,074,208,33 8 1,751,132,6 41
TheEastern Pride
of aResurgent Nation
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c) Value Added Tax assessment for the months ending December, 2003 March, 2004 have been issued by the Department of InlandRevenue to Fuji Cement Co. (Lanka) Ltd.
The Company has fi led an appeal with the Court of Appeal against the assessments.
d) The Department of Customs has fi led action against the claiming of higher rate of duty in respect of the importation of goods in the shipsowned and operated by the Company and its subsidiaries and also computation of freight charges for purposes of customs duty onclinker import using own vessel.
e) The Department of Inland Revenue has disallowed Rs.300 Mil l ion donation made in the year of assessment 2002/03. However, this
has been contested by the Company.
Representation provided by the legal and tax experts based on information available the contingent l iabil ities as atMarch 31, 2010 may not have a major impact on t he Financial Statements.
23.2 Contingent Assets
There were no material contingent assets for the Company or Group existing as at the balance sheet date.
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SIGNIFICANT ACCOUNTING POL ICIES AND NOTES TO THE F INANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
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24. ASSETS PLEDGED
Following assets have been pledged as security for liabilities.
}
Rs.
Name of the Nature of Liabil it ies & Loan/Facil ity Granted Balance Outstanding Balance Outstanding Repayment Security PledgedCompany the Name of Bank as at 31.03.2010 a s at 31.03.2009
371,770,746
100,000,000
450,000,000
50,000,000
200,000,000
725,000,000
750,000,000
450,000,000
125,000,000
500,000,000
200,000,000
700,000,000
300,000,000
20,000,000
30,000,000
750,000,000
40,000,000
(US $ 5,250,000)
(US $ 5,250,000)
850,000,000
402,500,000
(US $ 3.5Mn)
500,000,000
500,000,000
52,057,062
33,312,000.
450,000,000
-
200,000,000
537,839,443
329,075,102
390,117,196
-
251,601,475
213,720,000
152,437,600
187,500,000
15,833,000
-
750,000,000
40,000,000
-
-
-
-
563,333,326
96,500,000
108,319,461
246,594,000
283,314,978
58,320,000
-
50,000,000
-
594,239,631
320,300,270
450,000,000
112,590,000
31,133,944
359,240,000
311,100,000
262,500,000
-
25,896,882
-
-
(US $ 546,875)
Rs. 63,628,906
(US $ 656,250)
Rs. 76,354,688
733,333,330
-
-
-
Within f ive years
commencing, one year
after vessel starts operations.
Renewable quarterly
Renewable quarterly
On demand
On demand
On demand
On demand
On demand
On demand
On demand
On demand
Repayable in 48 equal monthlyinstalments
Repayable in 48 equal monthlyinstalments
Repayable in 47 equal monthlyinstalments and a f inal installmentsof Rs.415,100/-
Repayable in 48 instalments
Repayable in 35 equal monthlyinstalments and a f inal installmentsof Rs.20,810,000/-
Repayment wil l commence after12 months from f irst disbursement
of the loan, thereafter repayablein 48 equal monthly installments.
(US $ 109,375 @)48 months
(US $ 109,375 @)48 months
Repayable in 60 equal monthlyinstallments
On demand
On demand
On demand
The Loan Agreement, Corporate Guarantee ofTokyo Cement Company Lanka PLC andmortgage over the Merchant vessel.
Corporate guarantee of Fuji Cement CompanyLanka Ltd.
Corporate guarantee of Fuji Cement CompanyLanka Ltd.
Mortgage Bond over Inventory and book debts.
Loan agreement MML and hypothecation bondover stocks at Port Premises, Colombo and bookdebts of the company for Rs. 200mn.
Mortgage Bond over Inventory, book debts andLeasehold Land and Buildings.
Mortgage Bond over Inv entory and book debts.
Mortgage Bond over Inv entory and book debts.
Mortgage Bond over Clinkerand Cement stock.
On Demand Trust Receipt.
On Demand Trust Receipt.
On Demand Loan Agreement.
On Demand Loan Agreement.
On Demand Loan Agreement.
Motor Vehicle
On Demand Loan Agreement.
On Demand Loan Agreement.
Con - Current Mortgaged over the Vesseland Corporate Guarantee fromTokyo Cement Company (Lanka) PLC.
(a) Primary mortgaged over proposed machineryand equipments
(b) Corporate Guarantee from Tokyo CementCompany (Lanka) PLC.
On Demand Loan Agreement.
On Demand Trust Receipt.
On Demand Trust Receipt.
a. Term LoansBank of Ceylon,
b. Commercial Papers Issued
Commercial Bank ofCeylon PLC.,
c. Money Market Loansi. Bank of Ceylon
ii. Sampath Bank PLC.,
d. Trust Receipts Loansi Sampath Bank PLC.,
ii Commercial Bank of Ceylon PLC.,
e. Hypothecation Loani. Bank of Ceylon
a. Hypothecation L oani. Bank of Ceylon,
b. Trust Receipts Loans
i. Sampath Bank PLC.,
ii. Commercial Bank of Ceylon PLC.,
c. Term Loansi. Commercial Bank of Ceylon PLC.,
ii . Sampath Bank PLC.
iii . Bank of Ceylon,
a. Term Loansi. Seylan Bank PLC
ii. Sampath Bank PLC.,
a. Term Loans
i. DFCC Bank
ii. CITI Bank
iii . Sampath Bank PLC.,
iv. Commercial Bank of Ceylon PLC.,
Tokyo
Cement
Colombo
Terminal (Pvt)
Ltd.
Tokyo
Cement
Company(Lanka) PLC
Fuji Cement
Company
(Lanka) Ltd.
Tokyo Super
Cement
Co. Lanka
(Pvt) Ltd.
TheEastern Pride
of aResurgent Nation
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 82
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2010
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.seinapmocgniwollofehtfosevitatneserpeR /srotceriDoslaeraynapmoCehtfosrotceriDehT1.52
25. RELATED PARTY TRANSACTIONS
St. Anthony’s Central Finance South Asian Rhino RoofingHardware PLC Investments Products(Pvt) Ltd. (Pvt) Ltd. Ltd.
Mr. Edgar Gunatunga - - - -
Mr. S. R. Gnanam x - x x
Mr. K. Yanagihara - - - -
Mr. S. V. Wanigasekera - x - -
Mr. A. S. G. Gnanam x - x x
Mr. E. J. Gnanam x - x xMr. R. Seevaratnam - - - -
Mr. T. Uetake - - - -
Mr. S. Mori - - - -
Dr. Harsha Cabral - - - -
“x” Denotes the companies in which each of the persons mentioned was a Director.
Note 01 : Mr. W. C. Fernando is a Director of the Fuji Cement Co (Lanka) Ltd ,Tokyo Super
Cement Co Lanka (Pvt) Ltd and Tokyo Cement Colombo Terminal (Pvt) Ltd.
Fuji Cement Tokyo Super Tokyo Cement Nippon Coke & St. Anthony’sCo. (Lanka) Cement Co. Colombo Engineering Company Consolidated
Ltd. Lanka Terminal Limited, Japan Ltd.(Pvt) Ltd. (Pvt) Ltd. (Representatives)
Mr. Edgar Gunatunga x x x - -
Mr. S. R. Gnanam x x x - x
Mr. K. Yanagihara x x x x -
Mr. S. V. Wanigasekera x x - - -
Mr. A. S. G. Gnanam x x - - x
Mr. E. J. Gnanam x x x - x
Mr. R. Seevaratnam x x - - -
Mr. T. Uetake x - - x -
Mr. S. Mori x - - x -
Dr. Harsha Cabral x x - - -
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 83
SIGNIFICANT ACCOUNTING POL ICIES AND NOTES TO THE F INANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2010
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Consolidated Company
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
TheEastern Pride
of aResurgent Nation
25.2 The Company has had following transactions with related entities during the Year or as at the Balance Sheet date in the ordinary
course of business at Commercial rates.
Rs. 31st March,2010 31st March,2009 31st March,2010 31st March,2009
(a) St. Anthony's Consolidated (Pvt) Ltd
i. Sales Commission 242,810,872 390,942,124 138,145,812 126,490,553
ii. Rent paid in respect of office premises - 840,000 - -
iii. Cement Sales - 630,200 - -
(b) Nippon Coke & Engineerin g Co. Ltd
(Mitsui Mining Co (Ltd))
i. Royalty - 37,364,867 - 29,479,582
ii. A loan has been obtained from Nippon Coke
& Engineering Co. Ltd., the deatails are given in Note 18
(c) St. Anthony's Hardware (Pvt) Ltd
i. Purchase of Chemicals 50,512,387 43,898,275 50,512,387 43,898,275
(d) Tokyo Cement Colombo Terminal (Pvt) Ltd
i Sales of Cement including Transport Charges - - 330,782,756 406,398,661
ii. Advertisin g and Image Buildings - - 4,506,497 24,000,000
iii. Transfer of Steel Silo - - - 22,400,000
(e) Sampath Bank
i. Import Loan - 91,578,938 - -
ii. Lease Creditor - 19,099,153 - 16,744,796
iii. Bank Guarantee - 850,000,000 - -
iv. Trust Recept Loan - 2,371,607,772 - -
(f) South Asian Investment (Pvt) Ltd
i. Sales Commission 67,135,608 88,018,550 - -
(g) Rhino Roofing Products Ltd
i. Sale of Cement 1,219,341,677 1,507,741,320 - 98,300,655
(h) Amounts Due From Related Companies (Note 15)
i. Tokyo Cement Colombo Terminal (Pvt) Ltd. - - 6,420,160 8,513,730
ii. Tokyo Super Cement Company Lanka (Pvt) Ltd. - - 1,167,503,351 3,985,542
(i) Amounts Due To Related Companies
i. Fuji Cement Company (Lanka) Ltd. - - 503,875,506 1,231,165,874
(j) Central Finance PLC
i. Finance Lease 100,935,492 144,193,560 - -
(k) Tokyo Super Cement Company Lanka (Pvt) Ltd.
i . Investment In Share Capital - - 750,000,000 -
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25.3 Transaction with key management pe rsonnel (KMP)
(a) Loans to Directors
No Loans have been given to the Directors of the Company.
(b) Key Management Personnel Compensation
Key Management Personnel comprises Directors of the Company Details of the compensation are given in Note 05 to the
Financial Statements.
The Remuneration Committee decides on the remuneration of Executive Directors and sets guidelines for the remuneration of the Management Staff
within the Group.
26. SUBSIDIARY COMPANIES
Company Holding
Fuji Cement Company (Lanka) Ltd 100%
Tokyo Cement Colombo Terminal (Pvt) Ltd 56.85%
Tokyo Super Cement Company Lanka (Pvt) Ltd 100%
Tokyo Cement Power (Lanka) Ltd (Stil l in gestation stage)
According to the letter dated 1st June, 2009 issued by Board of Investment of Sri Lanka, Fuji Cement Company (Lanka) Limited, a subsidiary of the
Parent Company has obtained the approval for suspension of operations ti l l 31st December, 2010.
27. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
(a) As required by section 56(2) of the Companies Act No. 07 of 2007, the Board of Directors have confirmed that the Company satisfied the
solvency test in accordance with Section 57 of the Companies Act No. 7 of 2007 and has obtained a certificate from the auditors, prior to paying
an interim dividend of Rs. 1.65 per share amounting to Rs.334,125,000 on the issued stated capital of ordinary voting shares and interim dividend
of Rs.1.65 per share amounting to Rs.167,062,500 on the Issued Stated Capital of non voting shares for the year under review.
(b ) Capitalization of Reserves and Issue of One share for every eight shares held.
An amount of Rs. 2,789,379,000 is standing to the credit of the Revenue Reserves in the Company's Balance Sheet as at 31st March 2010 (Draft).
The Board therefore recommended on 6th May, 2010 and approved by the shareholders on 28th June, 2010 that sum of Rs. 573,750,000 being
a part of the amount standing to the credit of the Revenue Reserve in the Company's Balance Sheet as at 31st March 2010, should be capital ized
and applied in paying up in ful l 22,500,000 Voting Ordinary Shares and 11,250,000 Non-Voting Ordinary Share in satisfaction the reof.
28. COMPARATIVE INFORMATION
Comparative figures have been re-classified where necessary in l ine with the presentation requirements for the current year.
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED MARCH 31, 2010
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 85
100%
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TheEastern Pride
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FIVE YEAR SUMMARY
GROUP
OPERATING RE SULT
Rs. Mn
Year ended March 31, 2010 2009/2010 2008/2009 2007/2008 2006/2007 2005/2006
Turnover 14,029 11,310 8,956
Gross Profit 2,052 1,935 1,500
Profit Before Taxation 541 844 629
Taxation 32 (20) 11
Profit After Taxation 573 824 640
Minority Interest (19) (10) (12)Profit Attributable to Ordinary Shareholders 554 814 628
BALANCE SHEET
Rs. Mn
As at March 31, 2010 2009/2010 2008/2009 2007/2008 2006/2007 2005/2006
Assets
Property, Plant & Equipment 4,687 4,473 4,783
Capital Work-in-Progress 3,699 2,564 278
Goodwil l 13 13 10 Investment 0.50 0.50 0.50
Fixed Deposit 3 - 655
Operating Lease Prepayment 78 82 87
8,481 7,134 5,814
CURRENT ASSETS
Inventories 1,212 600 601
Trade & Other Receivable 1,464 948 613
Operating Lease Prepayment 4 4 4
Amount Due from Subsidiary/Affi l iates - - 164
Cash & Cash Equivalent 181 440 407 2,861 1,992 1,789
11,342 9,126 7,603
17,652
2,719
647
(289)
358
(11)347
9,359
397
13 0.50
3
74
9,846
1,388
1,943
4
-
3113,646
13,492
9,055
93
13-
3
70
9,234
688
1,572
4
-
9113,175
12,409
14,737
2,281
347
4
351
18369
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TOTAL ASSETS
EQUITY & LIABILITIES
Capital & Reserves
Year ended March 31, 2010 2009/2010 2008/2009 2007/2008 2006/ 2007 2005/2006
Stated Capital 1,793 1,100 225
Reserves 150 376 1,251
Retained Earnings 3,062 3,009 2,341
5,005 4,485 3,817
Minority Interest 147 128 59
5,152 4,613 3,876
NON-CURRENT LIABILITIES
Interest Bearing Borrowing 1,272 1,772 1,532
Deferred Tax 33 69 83
Retirement Benefits Obligations 23 18 13
Deferred Revinue - - -
Lease Creditors 35 33 3
1,363 1,892 1,631
CURRENT LIABILITIES
Trade & Other Liabil ites 2,251 924 608
Current Maturity of Long-Term Loan 2,010 1,440 1,350
Lease Creditors 18 9 0.94
Bank Overdrafts 354 239 136
4,827 2,621 2,094
Total Equity and Liabil ities 11,342 9,126 7,601
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 87
1,793
150
3,300
5,243
158
5,401
868
264
23
10
98
1263
1,387
214
30
7
53
1,691
1,793
150
3,588
5,531
140
5,671
3,775
2.569
43
441
6,828
13,492
2,220
2,357
48
422
5,047
12,409
INVESTOR INFORMATION
Ratios of the previous year have been restated.
Earnings Per Share - Vorting Ordinary Share (Rs.) 1.37 1.28 20.51 30.15 31.41
Earnings Per Share - Non-Vorting Ordinary Share (Rs.) 1.37 1.28 2.05 3.02 3.14
Dividend Per Share - Vorting Ordinary Share (Rs.) 1.65 3.00 4.00 5.00 4.50
Dividend Per Share - Non - Vorting Ordinary Share (Rs.) 1.65 0.30 0.40 0.50 0.45
Return on Equity (%) 6.34 6.81 11.43 18.37 16.78
Interest Cover (Time) 1.41 1.78 2.38 3.28 3.20
Market Price Per Share (Rs.) - Voting 28.00 125 251.25 250.00 181.00
Price Earnings Ratio (Times) 20.44 97.4 12.25 8.29 5.7
Assets Turnover Ratio (Times) 1.19 1.31 1.24 1.24 1.18
Rs. Mn
FIVE YEAR SUMMARY
8/6/2019 Tokyo Cement -Annual Report 2010
http://slidepdf.com/reader/full/tokyo-cement-annual-report-2010 87/87
TheEastern Pride
of aResurgent Nation
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the Twenty Eighth Annual General Meeting of the Shareholders of
Tokyo Cement Company (Lanka) PLC will be held on Thursday 16th September 2010 at the Auditorium, Institute
of Chartered Accountants of Sri Lanka, 30A, Malalasekara Mw., Colombo 7 at 5.00 p.m. The business to be
brought before the Meeting wil l be :
Agenda
1. To receive and adopt the Report of the Directors, the Statement of Audited Accounts for the year ended
31 st March 2010 and the Report of the Auditors thereon.
2. To ratify the interim dividends authorized for payment on 6th August 2010, also as the final dividends for
the year 2009/10.
3. To re-elect Mr Ranjeevan Seevaratnam who retires by rotation in terms of Article 113 of the Articles of
Association.
4. To authorize the Directors to determine contributions to charities.
5. To authorize the directors to determine the remuneration payable to the Auditors Ms BDO Partners
(Chartered Accountants). (An auditor of a company, is deemed to be re-appointed at an Annual GeneralMeeting of the Company under section 158 of the Companies Act, No. 7 of 2007).
6. To re-elect as a director Mr Edgar Gunatunga and being over the age of 70 years and who retires in
terms of Articles of Association and pursuant to Section 211 of the Companies Act No 7 of 2007 for which
special notice of the following ordinary resolution has been given by a member for the purpose.
That the age limit referred to in Section 210 of the Companies Act No 7 of 2007 shall not apply to
Mr. Edgar Gunatunga who is 78 years and that he be re-elected a Director of the Company.
7. To transact any other business of which due notice has been given.
ANNUAL REPORT 2010 - TOKYO CEMENT COMPANY (LANKA) PLC. 88