Annual Report 2009/10 - Colombo Stock Exchange

2 Sierra Cables PLC - Annual Report 2009/10 Connecting Sri Lanka to Progress
Group Financial Review
Group Results
During the year under review the group turnover reflects a growth in
Tender & Project Business by 22% & 21% respectively.
Profitability
The Gross Profit margin of the Group has increased by 6% though the
Turnover has decreased by 32% over the previous year. This shows
a better control over the profitability by improvement in production
efficiencies and cost control. Further 40% decrease in Finance Costs
and 50% decrease in Energy Costs supported to achieve higher Pre-
Tax Profit. Earnings per Share shows a remarkable growth over last
year leading to the increase in net margin from 1.7% to 10.4% during
the year. Also the Group’s Return on Equity and Return on Assets
show the better performance.
Other Income
Other Income of the Group has increased by 35% due to the disposal
of significant portion of associate company share during the year
under review.
Finance and Growth
The Group is in a situation to invest in growth projects financing through
debt in the presence of a low debt equity ratio of 32 : 68 respectively.
During the year under review the Group diversified to a hydro power
project which promises an attractive Return on Investment.
Capital Expenditure
The Group has incurred Rs.102 million against Capital Expenditure
which utilized on purchasing new machinery and upgrading of existing
machinery there by acquiring new technology to meet future demands
of the industry.
Taxation
The Group made an Income Tax provision of Rs.23 million which was
paid during the year itself through quarterly taxes and withholding
taxes. Further the Group has paid Rs.121 million to the Government
by way of Direct Sales Taxes during the year.
Financial Indicators
The Group’s Long-term Loans decreased by 24% while Shortterm
Borrowings including Overdrafts have increased by 16%.
Shareholders' Funds consist of 65% Stated Capital and 35% Revenue
Reserves.
Accounting Policies and Disclosures
The Accounting Policies of the Group have been reviewed and
amended where necessary, to comply with the Sri Lanka Accounting
and Auditing Standards Act No.15 of 1995.
The Group has adopted the practice of making full disclosure of both
financial and non-financial information to enable the existing and
potential shareholders to assess the performance of the Group and
its future.