Annual Report 2009/10 - Colombo Stock Exchange

Connecting Sri Lanka to Progress
Sierra Cables PLC - Annual Report 2009/10
17
Independent Auditor’s Report
KPMG Ford, Rhodes, Thornton & Co. Tel : +94-11 242 6426
(Chartered Accountants) +94-11 542 6426
32A, Sir Mohamed Macan Markar Mawatha, Fax : +94-11 244 5872
P. O. Box 186, +94-11 244 6058
Colombo 00300, +94-11 254 1249
Sri Lanka. +94-11 230 7345
Internet : www.lk.kpmg.com
TO THE SHAREHOLDERS OF SIERRA CABLES PLC
Report on the Financial Statements
We have audited the accompanying financial statements of Sierra
Cables PLC, the Consolidated Financial Statements of the Company
and its subsidiaries as at March 31, 2010 which comprise the Balance
Sheet as at March 31, 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 page 18 to 37.
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 responsibility 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 responsibility 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 Policies used and significant
estimates made by management, as well as evaluating the overall
Financial Statement presentation.
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 March 31,
2010 and the Financial Statements give a true and fair view of the
Company’s state of affairs as at March 31, 2010 and its profit and cash
flows for the year then ended in accordance with Sri Lanka Accounting
Standards.
Opinion – Group
The investment in associate company, Central Industries PLC, which
was disposed in part during the year, has been accounted for under
equity method up to the disposal, as explained in Note 9.2.a to the
Financial Statements, based on the un audited Financial Statements
of the Associate Company. Consequently, we are unable to satisfy
ourselves on accuracy of the amount of the share of profits of the
Associate, the profit on disposal of the part investment included in the
Consolidated Income Statement for the year ended 31 March 2010,
the amount of the balance investment transferred to other Long-term
investments and the retained earnings as at Balance Sheet date.
In our opinion, except for the effect of such adjustments, if any, as
might have been determined to be necessary due to the matter stated
above, the Consolidated Financial Statements give a true and fair
view of the state of affairs as at March 31, 2010 and the 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 concerns the shareholders of the Company.
Emphasis of Matter
Without further qualifying our opinion, we draw attention to note 21 to
the consolidated Financial Statements giving reference to the state
of the subsidiary company, Alucop Marketing (Private) Limited With
net loss for the year ended 31 March 2010, as of that date carried
an accumulated loss, net liability and Adverse net current liability
positions, further, the subsidiary’s net assets are less than half of the
stated Capital resulting in a serious loss of capital situation in terms
of Section 220 of the Companies Act No.07 Of 2007.These factors
raise substantial doubt that the subsidiary will be able to continue as
a going Concern.
Report on Other Legal and Regulatory Requirements
These Financial Statements also comply with the requirements of
Sections 153(2) to 153(7) of the Companies Act No. 07 of 2007.
Chartered Accountants
Colombo
04 June 2010
KPMG Ford, Rhodes, Thornton & Co., a Sri Lankan Partnership
and a member firm of the KPMG network of independent
member firm affiliated with KPMG International, a Swiss
cooperative. All rights reserved.
A.N. Fernando FCA
Ms. M.P. Perera FCA
T.J.S. Rajakarier FCA
Ms. S.M.B. Jayasekara ACA
S. Sirikananathan FCA
P.Y.S. Perera FCA
W.W.J.C. Perera FCA
W.K.D.C Abeyrathne ACA
M.R. Mihular FCA
C.P. Jayatilake FCA
Ms. S. Joseph ACA
S.T.D.L. Perera ACA