Annual Report.CDR - Colombo Stock Exchange

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)
36 RELATED PARTY TRANSACTIONS Contd ……..
With the approval of the Monitory Board of the Central Bank of Sri Lanka ,The Finance Company PLC, took over identified
assets and liabilities of TFC Homes (Pvt) Ltd and The Finance Property Fund Company Ltd., during the financial year
ended 31st March 2010.
Assets
Rs. (million)
Housing Projects 1,005.70
Land Projects 28.50
Investment Properties 732.17
Total assets taken over 1,766.37
Liabilities
Bank Loans 242.23
Fixed Deposit Liabilities 1,588.10
Total liabilities taken over 1,830.33
37 EVENT OCCURRING AFTER THE BALANCE SHEET DATE
There are no material transactions which took place during the period up to the date of signing the Auditor's Report which
require adjustments to or disclosure in the financial statements, other than those disclosed in Note 39.
38 COMMITMENTS AND CONTINGENT LIABILITIES
38.1 Litigation against the Company
In the opinion of the Directors, litigations if any which currently are against the Company, are related to the normal course
of business and will not have a significant impact on the reported financial results or future operations of the Company.
38.2. Assessments against Income Taxes
The Department of Inland Revenue has issued following assessments and the Company has made appeals of
which the outcomes are pending. However, the liability can't be ascertained due to pending status of the appeals.
Year of Assessment Income Tax & Penalty Assessment (Rs)
2005/06 302,818,095
2006/07 688,409,322
2007/08 468,324,620
38.3. Economic Service Charge
The following taxes are in arrears as at the Balance Sheet date.
Year of Assessment Economic Service Charge (Rs.)
2008/2009 15,000,000
2009/2010 55,229,916
38.4. In addition to the above, the arrears in Value Added Tax, VAT on Financial Services, Nation Building Tax and
Stamp Duty are being settled on agreement with the Department of Inland Revenue and liabilities of those have
been provided in the Financial Statements.
39 GOING CONCERN ASSUMPTION
The Directors resolved in November 2009 to continue the operations despite the significant loss of capital by the
Company and this was approved at the Shareholders' meeting which was held in this regard in December 2009.
In October 2010, as directed by the Central Bank of Sri Lanka, the Directors have decided to recapitalize the company
by issuing 40 million voting shares at Rs.40/- per share. Also they have decided to issue 100 million non voting shares
at Rs.20/- per share to depositors of the company as at 21st September 2010.
In the opinion of the Directors these issues of shares together with the future plans of the company indicate that the
company will have the ability to continue in operation for the foreseeable future.
T H E F I N A N C E C O . P L C - A N N U A L R E P O RT 2 0 0 9 - 2 0 1 0
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