The Directors of Dipped Products PLC present their report together with the Audited Financial Statements of the Company and of the Group for the year ended March 31, 2013.
The details set out herein provide the pertinent information required by the Companies Act No. 07 of 2007, the Colombo Stock Exchange Listing Rules and are guided by recommended best accounting practices.
The principal activities of the Group and its management team are shown in Group Structure and Management Team sections in this annual report. The joint letter from the Chairman and the Managing Director describe the Group's affairs and mention important events of the year. The results for the year are set out in the Income Statement.
The Financial Statements of the Company and the Group are given on pages 68 to 131.
Independent Auditors' Report on the Financial Statements is given on page 67.
The accounting policies adopted by the Company and its subsidiaries in the preparation of the Financial Statements are given on pages 74 to 86.
Directors' Interest in Transactions: Directors of the Company and its subsidiaries have made the general disclosures provided for in Section 192 (2) of the Companies Act No. 07 of 2007. Note 32 to the Financial Statements dealing with related party disclosures include details of their interests in transactions.
Directors' Remuneration: The Executive Directors' remuneration is determined within an established framework. The total remuneration of Executive Directors of the Company for the year ended March 31, 2013 is Rs. 18,330,350/- (2012 - Rs. 16,625,600/-) which includes the value of perquisites granted to them as part of their terms of service. The total remuneration of Non-Executive Directors for the year ended March 31, 2013 is Rs. 2,080,000/- (2012 - Rs. 1,560,000/-) determined according to scales of payment decided upon by the Board. The Board is satisfied that the payment of this remuneration is fair to the Company.
Remuneration paid to the Directors of the subsidiary companies for the financial year ended March 31, 2013 is Rs. 61,957,205/- (2012 - Rs. 34,510,600/-).
Details of Directors' shareholdings as defined in Colombo Stock Exchange Rules.
|No of Shares|
March 31, 2013
April 1, 2012
|Mr. J A G Anandarajah
(Retired on March 31, 2013)
|Mr. G K Seneviratne
(Retired on April 8, 2013)
|Mr. N Y Fernando||10,288||10,288|
|Mr. K A L S Fernando||56,264||56,264|
|Dr. K I M Ranasoma||300||300|
|Mr. K D D Perera*||1,000||1,000|
* Mr. K D D Perera holds directly and indirectly 48.38% of the total issued shares of Hayleys PLC which in return holds 41.60% of shares in Dipped Products PLC.
The donations made by the Company and the Group are disclosed in Note 7 to the Financial Statements.
The total amount of donations was Rs. 68,708/- (2012 - Rs. 232,423/-). This has not exceeded the amount of Rs. 250,000/- approved by the shareholders at the last Annual General Meeting.
No donations were made for political purposes.
The names of the Directors who served during the year are given in the Board of Director in this Annual Report.
Messrs R M T Premarathna and V R Gunasekara were appointed to the Board with effect from May 1, 2013. In terms of the Article No. 27 (2) of the Articles of Association, the shareholders are required to re-elect them at the Annual General Meeting.
In terms of Article No. 29 (1) of the Articles of Association of the Company, Messrs L G S Gunawardena, A M Pandithage and R Seevaratnam retire by rotation and being eligible offer themselves for re-election.
Messrs J A G Anandarajah and G K Seniviratne retired on March 31, 2013 and April 8, 2013 respectively.
The Directors of the subsidiaries are given in Group Structure.
The Auditors, Messrs Ernst & Young, Chartered Accountants, will be paid Rs. 852,000/- (2012 - Rs. 710,000/-) and Rs. 9,307,430/- (2012 - Rs. 3,543,016/-) as audit fees by the Company and its subsidiaries respectively. Messrs Ernst & Young, Chartered Accountants will be paid Rs. 470,600/- (2012 - Rs. 125,000/-) and Rs. 1,477,192/- (2012 - Rs. 497,906/-) by the Company and the Group, for non-audit related work, which consisted mainly of tax consultancy services.
In addition to the above, Rs. 5,219,535/- (2012 - Rs. 4,763,619/-), and Rs. 748,411/- (2012 - Rs. 247,075/-) were paid as audit fees by ICOGUANTI S.p.A. and Dipped Products (Thailand) Ltd. respectively.
As far as the Directors are aware, the Auditors of the Company and of the subsidiaries do not have any relationships (other than that of an Auditor) with the Company or any of its subsidiaries other than those disclosed above. The Auditors also do not have any interests in the Company or any of its Group Companies.
Messrs Ernst & Young, Chartered Accountants, are deemed reappointed, in terms of Section 158 of the Companies Act No. 07 of 2007, as Auditors of the Company.
The gross turnover of the Group during the year was Rs. 23,657,743,324/- (2012 - Rs. 19,693,665,405/-). The Group turnover from international trade in Hand Protection Sector amounted to Rs. 14,674,542,811/- (2012 - Rs. 13,499,024,705/-). Further information on Group turnover is detailed in Note 3 to the Financial Statements.
The total Group reserves as at March 31, 2013 amount to Rs. 6,246,107,122/- (2012 - Rs. 5,202,434,256/-) comprising capital reserves of Rs. 452,877,980/- (2012 - Rs. 236,836,303/-), available-for-sale reserve of Rs. 13,716/- (2012 - Rs. 16,192/-) and revenue reserves of Rs. 5,793,215,426/- (2012 - Rs. 4,965,581,761/-).
|Rs. '000||Rs. '000|
|After making provisions for all known liabilities and depreciation on property,
plant & equipment the profit earned by the Group before taxation was
|And taxation on Group profits amounting to were deducted||(390,943)||(294,922)|
|The Group was left with a profit of||1,784,273||2,142,755|
|And the amount attributable to non-controlling interest of||(366,385)||(236,780)|
|And the balance of the previous year net of final dividend and
appropriations were adjusted
|The profit before appropriation was||1,417,888||1,905,975|
Your Directors have made appropriations as follows:
|Interim dividend of Rs. 4/- per share (2012 - Nil)||239,446||Nil|
|Proposed final dividend of Rs. 3/- per share (2012 - Rs. 6/- per share)||179,585||359,169|
An interim dividend of Rs. 4/- per share was declared and paid to the shareholders on February 26, 2013.
The Board of Directors has recommended the payment of a final dividend of Rs. 3/- per share payable on July 8, 2013 to the shareholders of the issued ordinary shares of the Company as at close of business on June 27, 2013.
The Directors have confirmed that the Company satisfies the solvency test requirement under Section 56 of the Companies Act No. 07 of 2007 for both interim dividend paid and final dividend proposed. A solvency certificate was obtained from the Auditors in respect of the interim dividend paid and one has been sought in respect of the final dividend proposed.
The Directors are satisfied that all statutory payments in relation to Employees and the Government have been made up to date.
The Company has entered into an agreement with the Board of Investment of Sri Lanka and has been granted a 10-year tax holiday as 'Thrust Industries' up to March 31, 2009 and after completion of tax exemption period Company is liable to income tax at concessionary rate for a further period of ten years on its business activity. Concessionary rate applied for this year is 12% and other income of the Company is liable to taxation at corporate tax rate.
Group expenditure on Property, Plant and Equipment during the year amounted to Rs. 1,033,891,000/- (2012 - Rs. 984,078,000/-). The movement in Property, Plant and Equipment during the year is set out in Note 11 to the Financial Statements.
The value of land owned by the Group is stated at cost or valuation. Information on valuation of land is explained in Note 11 to the Financial Statements.
No circumstances have arisen since the reporting period end which would require adjustment to or disclosure in, other than those disclosed in Note 35 to the Financial Statements.
The Directors' after making necessary inquiries and reviews including review of the Group's budget for the ensuing year, capital expenditure requirements, future prospects and risks, cash flows and borrowing facilities have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Therefore, the going concern basis has been adopted in the preparation of the Financial Statements.
Information relating to earnings, dividend, net assets per share and share trading are given in The Share section in this Report .
The twenty major shareholders as at March 31, 2013 are given in The Share section of this Report.
The Annual General Meeting will be held at the Registered Office, No. 400, Deans Road, Colombo 10, Sri Lanka on June 27, 2013 at 3.00 p.m. The Notice of the Annual General Meeting appears at the end of this report.
For and on behalf of the Board,
A M Pandithage
Dr. K I M Ranasoma
Hayleys Group Services (Pvt) Ltd.
400, Deans Road,
May 14, 2013