Our Vision 04 - Lanka Electricity Company (Private) Limited - … · · 2012-10-15Hatton National...

Our Vision 04

Our Mission 05

Corporate Information 06

Chairman’s Message 08

Corporate Management 10

Report of Directors 11

Balance Sheet 18

Income Statement 19

Statement of Changes in Equity 20

Cash Flow Statement 21

Notes to the Financial Statements 22

Ten Year Summary 45

Auditor’s Report to the shareholders 15

Our Vision Our Mission

To provide the best energy

solutions to the Society

through continuous innovation

LECO Annual Report 2010 7 / PageLECO Annual Report 2010 6 / Page

CORPORATE INFORMATIONLanka Electricity Company (Private) Ltd

LEGAL FORM

LIST OF DIRECTORS DURING THE PERIOD 01.01.2010 – 31.12.2010

COMPANY SECRETARIES

REGISTERED OFFICE

Private Limited Liability Company incorporated in 1983 under the provisions of the Companies Act No 17 of 1982 and the Companies Act No 7 of 2007

Mr Chandana J. Haputantri Appointed with effect from 21.05.2010 ( Appointed Chairman w.e.f 2010-05-25

Mr Vidya Dilruk Amarapala Appointed with effect from 14.05.2010

Mrs Badra Jayaweera 08-09-2008

Mrs P.K.A.D de Silva 01-07-2009

Mr Rohan Seneviratne 30-06-2010

Mr A.A Ranapriya Abeyasinghe 11-08-2010

Mr H.S. Somathilaka 14-02-2011

Mr Champani Padmasekera 28.12.2005 Resigned w.e.f 30-04-2010

Mr U.D.S. Parakrama Perera 17.01.2006 Resigned w.e.f 05-02-2010

Dr M.N.Susantha Perera 17.01.2006 Resigned w.e,f 05-02-2010

Mr M.H.Prasanna Silva 30.10.2007 Resigned w.e.f 09-06-2010

Mr E.A.S.K Edirisinghe 16.12.2008 Resigned w.e.f 11-02-2010

Mr T.M. Herath 19-02-2010 Resigned w.e.f 04-05-2010

Secretaries & Registrars (Pvt) Ltdst1 Floor , 32A Sir Macan Markar Mawatha,

Colombo 03

411, Galle Road E.H.Cooray Bldg Colombo 03.

BANKERS

AUDITORS

Bank of Ceylon Commercial Bank of Ceylon PLCHatton National Bank PLCNations Trust Bank PLCPeoples BankSampath Bank Seylan Bank PLCStandard Chartered Bank State Mortgage and Investment Bank Housing Development Finance Corporation BankNational Development Bank Ltd

Ernst and Young – Chartered Accountants201, De Seram Place Colombo 10

On behalf of the Board of Directors of Lanka

Electricity Company (Private) Limited I am very thpleased to welcome you to the 27 Annual General

Meeting of the Company and to present the Annual

Report and the Statement of Accounts for the year st ndended 31 December 2010. This is the 2 Annual

General Meeting since my taking over as the

Chairman in May last year. During the year under

review Company has been able to take steps for the

improvement of its performance. We were able to

resolve the problem of the tariff with the Public

Utilities Commission of Sri Lanka and eliminate the

situation under which the Company faced losses

during the last 3 years. Setting up of the project,

funded by the ADB, for the construction of five

Primary Substations for the improvement of the

power supply to certain areas is yet another

remarkable step taken during the year. Completion

of this project will certainly achieve the objective of

the Hon. Minister of Power & Energy and the

Government for providing a quality service to meet

the customer needs.

The year under review has recorded electricity sales of 1,123 GWh (7 % increase over the previous year ) and revenue earnings of Rs 14.027 Million compared to 13,065 . The highest contributor to overall revenue was the Commercial sector 38% , followed by domestic sector 37% and industrial sector 19%.

Additional cost of Rs 390 Million for energy

purchases has been included in the current year, in

order to comply to directive issued by the Public

Utility Commision of Sri Lanka to account for

purchases for a calendar year , the inclusion of the

additional cost has resulted in a Net loss after tax of

Rs 605 Mn . However this problem would be

resolved with the new tariff structure which is

effective from January 2011.

The Company has invested in Rs 340 Million in enhancing the distribution network during the year under review resulting in a net asset value per share of Rs 79.00 . Our customer Service and revenue collection have been improved by entering into

FINANCIAL HIGHLIGHTS

OPERATIONS

agreements with private Banks and Cargills Food City to accept LECO Bills.

We have set up a very systematic and improved programme of training for our human resources which are the most important asset of the Company. A well trained and motivated work force, with career development opportunities to meet the challenges, is our objective. We are thankful to all our Trade Unions for their co-operation and assistance in maintaining good industrial relations.

On behalf of the Board of Directors I wish to express my very sincere thanks to the Management and each and every member of the staff for the valuable contribution made and co-operation extended during the year.

The Board also wishes to place on record its appreciation to all the valued Customers, Shareholders, Business Associates, Bankers, Ministry of Power & Energy and other Government Authorities, Suppliers, Company Secretaries and the Auditors for the support and co-operation extended.

Chandana .J.HaputantriChairman

.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

ACKNOWLEDGMENT

MESSAGE OF THE CHAIRMAN

LECO Annual Report 2010 9 / Page

Chairman’s Message

Corporate Management

Report of Directors

Left to Right

Mr. Vimal PereraChief Financial Officer

Dr. Narendra de SilvaHead of Engineering

Mr. H. N. GunasekaraHead of Operations

Mr. D. MunasigheHead of Human Resource

Mr. V. Kandasamy Chief Internal Auditor

The Board of Directors of Lanka Electricity Company (Private) Limited has pleasure in presenting their Annual Report together with the Audited Financial

stStatements of the Company for the year ended 31 December 2010

This Annual Report on the affairs of the Company contains the information required in terms of Section 168 of the Companies Act, No. 7 of 2007 and certain additional information.

The Company's principal activities, which remained unchanged during the year, were the business of retailing electricity. The Company purchases electricity in bulk from the national grid owned and managed by the Ceylon Electricity Board and distributes to customers through a modern distribution system managed by the Company.

P R I N C I PA L AC T I V I T I ES O F T H E C O M P A N Y A N D R E V I E W O F PERFORMANCE DURING THE YEAR

STATED CAPITAL

PROPERTY PLANT AND EQUIPMENT

TURNOVER

The turnover of the Company for the year was Rs. 14,027 Million (2009 – Rs.13,065 Million)

FINANCIAL STATEMENTS

The total Stated Capital of the Company as at 31st December 2010 was Rs.1,145.1 Million representing 113,580,264 “A” class ordinary shares and 926,390 “B” class Ordinary Shares.

The movement of the Share Capital of the Company is shown in Note.10 to the Accounts.

Information relating to movement in property, plant and equipment are given in Note 3 to the Audited Accounts.

The complete Financial Statements of the Company duly signed by Mr C.J.Haputantri. and Mr V. D Amarapala on behalf of the Board.

AUDITORS' REPORT

ACCOUNTING POLICIES

DIRECTORS

The Report of the Auditors on the Financial Statements of the Company is attached with the Financial Statements

The principal accounting policies adopted by the Company in the preparation of Financial Statements are given in Note 2.1 of the Financial Statements, which are, unless otherwise stated, consistent with those used in the previous period.

The names of the Directors who held office as at the end of the accounting period are given below

Mr. Chandana J. Haputantri appointed with effect from 21.05.2010 ( appointed Chairman w.e.f 2010-05-25

Mr. Vidya Dilruk Amarapala appointed with effect from 14.05.2010

Mrs. Badra Jayaweera08-09-2008

Mrs. P.K.A.D de Silva 01-07-2009

Mr. Rohan Seneviratne30-06-2010

Mr. A.A Ranapriya Abeyasinghe11-08-2010

Mr. H.S. Somathilaka 14-02-2011

Mr. Champani Padmasekera 28-12-2005 Resigned w.e.f 30-04-2010

Mr. U. D. S. Parakrama Perera 17.01.2006 Resigned w.e.f 05-02-2010

Dr. M.N.Susantha Perera17.01.2006 Resigned w.e,f 05-02-2010


Mr. M.H.Prasanna Silva30.10.2007 Resigned w.e.f 09-06-2010

Mr. E.A.S.K Edirisinghe 16.12.2008 Resigned w.e.f 11-02-2010

Mr T.M. Herath19-02-2010 Resigned w.e.f 04-05-2010

The Company maintains an Interests Register as stipulated by the Companies Act, No. 7 of 2007.

The Directors' remuneration is disclosed in Note 29.3. to the Financial Statements.

The donations made during the year amounted to Rs 32,000

The Directors do not recommend the payment of a dividend for 2010 as the Company has not achieved the 8% return on average net fixed assets, a covenant with the ADB.

The total Company reserves as at 31st December 2010 amounts to 7,891 Million, comprising Capital Reserves of Rs. 6,045 Million and Revenue Reserves of Rs. 1,846. Million. The movement is shown in Note 12 of the Audited accounts.

The number of persons employed by LECO at the end of 2010 was 1,338 (end of 2009 – 1,317)

Commitments and contingencies as at 31st December 2010 are given in Note 27.2. of the Audited Accounts.

INTERESTS REGISTER

DIRECTORS' REMUNERATION

DONATIONS

DIVIDENDS

RESERVES

EMPLOYMENT

COMMITMENT AND CONTINGENCIES

AUDITORS

EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Messrs Ernst & Young, Chartered Accountants served as the Auditors of the Company and Messrs Amarasekera and Co Chartered Accoutnants provided tax compliance services to the Company during the year under review. The Auditors do not have any interest in the Company or its group companies other than that of Auditor and in the aforesaid capacity as advisors on tax compliance.

A sum of Rs 1,096,000/- is payable by the Company to the Auditors as Audit for the year under review.

The Auditors have expressed their willingness to continue in office. A resolution to re-appoint the Auditors and to authorise the Directors to determine their remuneration will be proposed at the Annual General Meeting.

The Board of Directors of Lanka Electricity Company (Pvt) Ltd decided to suspend the services of the General Manger with effect from 11 March 2011

This Annual Report is signed for and on behalf of the Board of Directors by Chairman and Director

Secretaries and Registrars (pvt ) Ltd June 13,. 2010


ANNUAL REPORT OF THE BOARD ON THE AFFAIRS OF THE COMPANY

Auditors’ Report

to the Shareholders

Report on the Financial Statements

Management's Responsibility for the Financial Statements

Scope of Audit and Basis of Opinion

We have audited the accompanying financial statements of Lanka Electricity Company (Private) Limited, the consolidated financial statements of the Company and its subsidiaries, which comprise the balance sheets as at 31 December 2010, and the income statements, statements of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Sri Lanka Accounting Standards. Th is respons ib i l i ty inc ludes : des ign ing , implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit. Except as discussed in Paragraphs 1 to 10 below, 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 misstatements.

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 the management, as well as evaluating the overall financial statement presentation.

Except as discussed in Paragraphs 1 to 10 below, 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

1. The ownership documents of following properties were not available for our inspection.

The original title deeds of the following properties were not available for our inspection.

2. We were unable to ascertain the accuracy and completeness of the Infrastructure - work in progress balance approximately amounting to Rs. 358.2 Mn at the year end included under Property, Plant and Equipment due to non availability of adequate information.

3. Non Current Assets have not been tested for impairment in accordance with SLAS 41, even though there are indicators of impairment. If so tested, adjustments may arise as a result of impairment of assets, which have not been made in these financial statements.

.

Opinion

Company

INDEPENDENT AUDITOR'S REPORT

FHL - Nugegoda Supermarket

Premises400,000

FHL – Pitakotte CSC Quarters

11,900,000

FHL – Nugegoda Land 3,350,277

FHL – Hikkaduwa Primary 600,000

FHL – Hikkaduwa Consumer

Service Centre852,124

FHL - Galkanda Land 538,500

LHL – Udahamulla Land 57,000,000

DescriptionAmounts

Rs.

FHL - Nugegoda Stanley Thilakaratna Mawatha

6,395,000

FHL – Kelaniya Substation Land

2,746,840

DescriptionAmounts

Rs.


balance in the general ledger by Rs.37.4 Mn and Rs.3.1Mn respectively for which no satisfactory explanation was received. Further the receivable balance as per confirmation received from Ceylon Electricity Board does not agree with the general l e d g e r b y R s . 1 6 . 3 M n f o r w h i c h n o satisfactory explanation was received.

In our opinion, except for any adjustments, if any as might have been determined to be necessary had we been able to satisfy ourselves of the matters referred in paragraphs 1 to 10, so far as appears from our examination, the Company maintained proper accounting records for the year ended 31 December 2010 and the financial statements give a true and fair view of the Company's state of affairs as at 31 December 2010 and its loss and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

In our opinion, except for any adjustments, if any as might have been determined to be necessary had we been able to satisfy ourselves of the matters referred in paragraphs 1 to 10, so far as appears from our examination, the consolidated financial statements give a true and fair view of the state of affairs as at 31 December 2010 and its loss 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.

In our opinion, these financial statements also comply with the requirements of Section 151(2) and 153(2) to 153(7) of the Companies Act No. 07 of 2007.

04 May 2011 Colombo

10.The payable balance as per confirmation received from Ceylon Electricity Board and Lanka Transformers (Pvt) Ltd does not agree with the

Group

Report on Other Legal and Regulatory Requirements

4. “Supply of Infrastructure” reflected under Property, Plant & Equipment is revalued using a standard formula prescribed by the lenders to the Company up to 31 December 2009. However, no such revaluation has been carried out for the current year under review.This method of revaluation does not reflect the fair value of the said assets nor such an exercise been carried out. Any resulting impact of such on the Property, Plant & Equipment, the revaluation surplus and the related depreciation charge cannot be ascertained.

5. We were unable to obtain independent confirmations from lawyers to ascertain contingent liabilities of the Company as at the year end including those disclosed in a note 27.2 (b) to these financial statements.

6. We were unable to ensure the completeness and accuracy of the inventory valuation as of the year end due to non availability of all required information and explanations. Further a physical verification of inventories approximately worth Rs.42.5 Mn has not been carried out as of the year end.

7. We were unable to ensure the completeness, recover ability and adequacy of related bad and doubtful debt allowances of trade debtors as of the year end. Further no adjustments have been made in the financial statements in respect of the difference between the ledger and the billing system balances amounting to Rs.770.97 Mn.

8. We have not received the required information from Mr. Champani Padmasekara, Mr. Hilary Prasanna Silva and Mr. E.A.S.K. Edirisinghe, as key management personnel regarding related party transactions as required by SLAS 30.

9. We were unable to ensure the existence and accuracy of the street light maintenance account balance amounting to Rs.21.23 Mn which has been set off with the receivable balance from which local authorities without their agreements and approvals. Further we were unable to ensure the existence and accuracy of other payables amounting to Rs.2.04 Mn included under 'trade and other payables' as of the year end.

Financial

Statements


BALANCE SHEET As at 31 December 2010

I certify that these financial statements are in compliance with the requirements of the Companies Act No.07 of 2007.

(Sgd) Mr. S. M. Vimal Perera

Chief Financial Officer

The board of directors is responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the board by.

(Sgd) Mr. C. J. Haputantri

Director

(Sgd) Mr. V. D. Amarapala

Director

The accounting policies and notes on pages 22 through 44 form an integral part of the financial statements.

04 May 2011 Colombo

INCOME STATEMENTYear ended 31 December 2010

The accounting policies and notes on pages 22 through 44 form an integral part of the financial statements.

Note2010

Rs.'0002009

Rs.'0002010

Rs.'0002009

Rs.'000

19 14,354,489

13,657,688

14,027,002

13,065,755

(12,411,708)

(12,021,449)

(12,154,865)

(11,493,574)

19.2 (389,806)

-

(389,806)

-

1,552,975

1,636,239

1,482,331

1,572,181

20 503,882

373,083

503,744

372,968

(1,259,740)

(1,166,887)

(1,237,138)

(1,161,992)

(1,179,685)

(1,109,288)

(1,134,619)

(1,074,811)

21 186,842

218,253

181,454

210,741

22 (41,793)

(51,335)

(41,626)

(51,178)

23 (237,519)

(99,935)

(245,854)

(132,091)

24 (361,065)

(298,102)

(359,689)

(295,318)

(598,584)

(398,037)

(605,543)

(427,409)

(600,032)

(406,492)

(605,543)

(427,409)

1,448

8,455

-

-

(598,584)

(398,037)

(605,543)

(427,409)

Revenue

Cost of Purchase of Electricity

Additional cost of Purchase of Electricity

Gross Profit

Other Operating Income

Operating Expenses

Administrative Expenses

Finance Income

Finance Cost

Loss Before Tax

Income Tax Expense

Loss for the Year

Equity Holders of the Parent

Minority Interest

Loss for the Year

Basic Loss Per Share 25 (5.24)

(3.55)

(5.29)

(3.73)

CompanyGroup

LECO Annual Report 2010 18 / Page LECO Annual Report 2010 19 / Page

Company

2010 Rs.'000

2009Rs.'000

2010Rs.'000

2009Rs.'000

3 8,477,457 8,804,012 8,420,074 8,734,780

4 2,000,000 2,000,000 2,031,321 2,031,321

5 570,000 570,000 570,000 570,000

6 68,100

145,200

115,185

192,285

11,115,557

11,519,212

11,136,580

11,528,386

7 684,400

723,345

607,442

674,012

8 1,683,448

1,899,782

1,761,306

2,021,564

9 75,818

82,354

32,473

6 1,538,463

951,109

1,532,478

949,350

775,791

537,587

728,975

417,384

4,757,920

4,194,177

4,662,674

4,094,910

15,873,477

15,713,389

15,799,254

15,623,296

10 1,145,067

1,145,067

1,145,067

1,145,067

11 6,045,146

6,053,357

6,045,146

6,039,935

12 449,900

449,900

449,900

449,900

1,393,566

1,993,598

1,396,447

2,001,990

9,033,679

9,641,922

9,036,560

9,636,892

23,325

8,455

-

9,057,004

9,650,377

9,036,560

9,636,892

13 210,014

287,436

210,014

287,436

14 791,574

449,461

791,664

449,468

15 2,691,664

2,588,725

2,691,664

2,588,725

16 318,679

284,189

318,574

284,071

4,011,931

3,609,811

4,011,916

3,609,700

17 2,132,154 1,645,002 2,078,788 1,568,626

18 12,631 31,945 12,631

13 143,485

82,570

143,485

2,804,542

2,453,201

2,750,778

2,376,704

15,873,477 15,713,389

15,799,254

15,623,296

Note

32,600

-

31,945

82,570

Group

ASSETS

Non-Current Assets

Property, Plant & Equipment

Investments in Equity Securities

Borrowings by Department of Treasury Operations

Other Investments

Total Non-Current Assets

Current Assets

Inventories

Trade and Other Receivables

Amounts due from Related Parties

Current Portion of Other Investments

Cash and Bank Balances

Total Current Assets

Total Assets

EQUITY AND LIABILITIES

Equity and Reserves

Stated Capital

Capital Reserves

Revenue Reserves

Retained Earnings

Minority Interest

Total Equity

Non-Current Liabilities

Interest Bearing Loans & Borrowings

Deferred Tax Liability

Deferred Income on Consumer Contributions

Employment Retirement Benefits

Total Non-Current Liabilities

Current Liabilities

Trade and Other Payables

Amount due to Related Parties

Income Tax Liabilities

Current Portion of Interest Bearing Borrowings

Total Current Liabilities

Total Equity and Liabilities

516,272 693,684 515,874 693,563

STATEMENT OF CHANGES IN EQUITYYear ended 31 December 2010

CASH FLOW STATEMENT Year ended 31 December 2010

The accounting policies and notes on pages 22 through 44 form an integral part of the financial statements.The accounting policies and notes on pages 22 through 44 form an integral part of the financial statements.

NoteStatedCapitalRs.'000

CapitalReservesRs.'000

RevenueReserveRs.'000

Retained Earnings Rs.'000

Total

Rs.'000

1,145,067

4,982,731

449,968

2,429,399 9,007,165

11 -

1,057,204

-

-

1,057,204

12 -

-

(68)

-

(68)

-

-

-

(427,409)

(427,409)

1,145,067

6,039,935

449,900

2,001,990

9,636,892

11 -

5,211

-

-

5,211

-

-

-

(605,543)

(605,543)

Balance as at 31 December2008

Surplus on revaluation of

supply of infrastructure

Transferred to during the year

Loss for the year

Balance as at 31 December

2009

Net Additions / (Removals) of


Loss for the year

Balance as at 31 December 2010 1,145,067

6,045,146

449,900

1,396,447

9,036,560

Group Note

Minority

Rs.'000Interest

CapitalReservesRs.'000

RevenueReserveRs.'000

Retained Earnings Rs.'000

StatedCapitalRs.'000

Total

Rs.'000

1,145,067

4,996,153

449,968

2,400,090

-

8,991,278

11 -

1,057,204

-

-

-

1,057,204

12 -

-

(68)

-

-

(68)

-

-

-

(406,492)

8,455

(398,037)

1,145,067 6,053,357

449,900

1,993,598

8,455

9,650,377

11 -

5,211

-

-

-

5,211

-

(13,422)

-

-

13,422

-

-

-

-

(600,032)

1,448

(598,584)


2008

Surplus on revaluation of


Transferred to during the year

Profit/(Loss) for the year


2009

Net Additions / (Removals) of


Allotment of shares

Profit/(Loss) for the year

Balance as at 31 December 2010 1,145,067

6,045,146

449,900

1,393,566

23,325

9,057,004

Company

Cash Flows from / (Used in) Investing Activities

Cash Flows From / (Used in) Operating Activities

Adjustments for

Operating Profit/(Loss) before Working Capital

Changes

Cash Generated from Operations

Net Cash From/(Used in) Operating Activities

Net Cash Flows from/(Used in) Investing

Activities

Cash Flows from / (Used in) Financing Activities

Net Cash Flows from/(Used in) Financing

Activities

Net Increase/(Decrease) in Cash and Cash

Equivalents

Cash and Cash Equivalents at the beginning of

the year

Cash and Cash Equivalents at the end of the year

Note

Group Company

2010Rs.'000

20102009Rs.'000 Rs.

2009Rs.'000

102,861 194,399 78,318 159,130

818,676 523,819 891,605 408,017

570,147 289,772 644,427 177,319

271,917 (141,631) 266,800 (233,552)

(77,422) (77,423) (77,422) (77,423)

2,248,190 1,483,548 2,195,390 1,361,586

Profit/(Loss) before tax from operations

Depreciation of Property, Plant & Equipment

Unclaimed NBT

Transfers from Revenue Reserve

Interest Income Profit on Sale of Property, Plant & Equipment

Finance Costs

Amortization of Consumer Contribution

Amortization of Intangible Assets

Provision for Defined Benefit Plans

(Increase)/ Decrease in Inventories

(Increase)/ Decrease in Trade and Other

Receivables

(Increase)/ Decrease in Amounts Due from

Related Parties

Increase/(Decrease) in Amounts Due to

Related Parties

Increase/ (Decrease) in Trade and Other

Payables

Interest Paid

Defined Benefit Plan Costs Paid

Income Tax Paid

Net of Acquisition and Disposal of Property,

Plant & Equipment

Investment/ (Recoveries) in Other

Investments - Non Current

Investment in Equity Securities

Interest Received

Consumer Contribution Received

Repayment of Interest Bearing Loans & Borrowing

(237,519)

(99,935)

(245,854)

(132,091)

685,352

668,696

674,305

658,349

10,378

-

-

-

(68)

-

(186,842)

(218,253)

(181,454)

(210,741)

(2,442)

(15,281)

(2,442)

(15,281)

41,793

51,335

41,626

51,178

(252,736)

(212,660)

(252,736)

(212,660)

17

3

-

44,860

20,562

44,873

20,444

38,945

223,989

66,570

107,508

216,334

164,824

260,258

166,303

2,917

(102,197)

(3,492)

(20,042)

(20,211)

-

(20,211)

477,830

42,804

510,162

(4,882)

(41,793)

(51,335)

(41,626)

(51,178)

(10,370)

(15,433)

(10,370)

(15,433)

(196,366)

(167,279)

(195,182)

(164,087)

(347,700)

(769,184)

(347,430)

(764,018)

77,100

116,375

77,100

116,375

-

-

-

(89,575)

186,842

218,253

181,455

210,741

355,675

292,925

355,675

292,925

(77,422) (77,423) (77,422) (77,423)

3

12

21

23

22

20

16

22

16

5

21

15

13

26

-

(68)

-

-

764,642

(18,861)

833,804

(133,656)

1,483,548

1,502,409

1,361,586

1,495,242


NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2010

1. CORPORATE INFORMATION

1.1 General

1.2 Principal Activities and Nature of Operations

1.3 Parent Enterprise and Ultimate Parent Enterprise

1.4 Date of Authorization for Issue

Lanka Electricity Company (Private) Limited is a limited liability Company incorporated and domiciled in Sri Lanka. The registered office of the Company is located at 411, E.H.Cooray Building, Galle Road, Colombo 03.

During the year, the principal activities of the Company were purchasing electricity from Ceylon Electricity Board and retailing to domestic and industrial customers, through the Company's branches located at Galle, Kalutara, Moratuwa, Kelaniya, Nugegoda, Kotte and Negombo.

The subsidiaries of the Company and their principal activities were as follows;

The Company's parent undertaking is Ceylon Electricity Board, which is incorporated in Sri Lanka, under the Ceylon Electricity Board Act No.17 of 1969.

The Financial Statements of Lanka Electricity Company (Private) Limited for the year ended 31December 2010 were authorized for issue in accordance with a resolution of the board of directors on 04 May 2011.

Company Activity

LECO Projects (Pvt.) Ltd

To provide infrastructure facilities for electricity distribution within the Country.

Ante - LECO Metering Company (Pvt.) Ltd

To set up an energy meter manufacturing facility to meet the electronic meter requirements of Sri Lanka and for export market.

2. BASIS OF PREPARATION

2.1 GENERAL ACCOUNTING POLICIES

2.1.1 General

2.1.2 Statement of Compliance

2.1.3 Going Concern

2.1.4 Comparative Information

2.1.5 Basis of Consolidation

These financial statements presented in Sri Lanka Rupees have been prepared on a historical cost basis except for certain Property, Plant and Equipment that have been stated at revalued amounts. The financial statements are presented in Sri Lanka Rupees. The preparation and presentation of these financial statements is in compliance with the Company's Act No. 07 of 2007.

In these financial statements, the 'Company' refers to Lanka Electricity Company (Pvt) Ltd as the holding company and the 'Group' refers to the Companies whose financial statements have been consolidated therein.

The balance sheets, statements of income, statements of changes in equity and cash flows, together with accounting policies and notes, (“financial statements”) of Lanka Electricity Company (Private) Limited, and those consolidated with such as at 31 December 2010 has been prepared in accordance with the Sri Lanka Accounting Standards.

The Directors have made an assessment of the Company's ability to continue as a going concern and they do not intend either to liquidate or cease operations.

The accounting policies have been consistently applied by the Group with those used in the previous year. Previous year figures and phrases have been re-arranged wherever necessary to conform to the current year's presentation. Such reclassifications are more fully described in Note 31 to the financial statements.

a) The Group financial statements comprise consolidation of the financial statements of Lanka Electricity Company (Pvt) Ltd and its

2.3 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

2.3.1 Judgments

subsidiaries in terms of the Sri Lanka Accounting Standard No. 26 (Revised 2005) on Consolidated a n d s e p a ra t e f i n a n c i a l s t a t e m e n t s .The subsidiary companies namely;

b) All the Companies in the Group are incorporated in Sri Lanka and are prepared to a common financial year which ends on 31 December.

c) The total profit and/or loss for the year of the subsidiary companies are included in the Consolidated Income Statement. The amount under the heading Minority Interest in the Consolidated Income Statement represents the proportion of the profit or loss after taxation applicable to outside shareholders.

d) The total Assets and Liabilities at the Balance

Sheet date of the subsidiary companies are included in the Consolidated Balance Sheet.

e) Net assets applicable to the minority shareholders are transferred to the minority interest.

f) All inter-company balances and transactions are eliminated upon consolidation of financial statements.

In the process of applying the Group's accounting policies, management has made the following judgment, apart from those involving estimations, which has the most significant effect on the amounts recognized in the financial statements.

Allowance for Doubtful Debts and Obsolete and Slow Moving Inventories

2.3.2 Estimates and Assumptions

Defined Benefit Plans

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.4.1 Foreign Currency Translation

The Group reviews at each balance sheet date all receivables and inventories to assess whether an allowance should be recorded in respect of doubtful debts and obsolete and slow moving inventories respectively in the income statement. The management uses judgment in estimating such amounts in the light of the duration of outstanding and any other factors management is aware of that indicates uncertainty in recovery.

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 liabilities within the next financial year are discussed below. The respective carrying amounts of assets are given in related notes to the financial statements.

The cost of defined benefit plans of the Company is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases and mortality rates. Due to the long term nature of this plan, such estimate is subject to significant uncertainty.

The financial statements are presented in Sri Lanka rupees, which is the Group's functional and presentation currency. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the Balance Sheet date. All differences are taken to profit or loss. Non monetary items that are measured in terms of historical cost in a foreign currency are

LECO Projects (Pvt.) Ltd

Holding %2010

Holding %2009

100 % 100 %

70 % 70 %Ante LECO MeteringCompany (Pvt) Ltd


translated using the exchange rates as at the dates of the initial transactions. Non monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Procurements made under different currencies for Projects under Asian Development Bank Loan was converted to USD at the rate prevailing at the date of receiving suppliers and then converted to SLRS at the exchange rate prevailing at the date of signing of the loan agreement between the Government of Sri Lanka (GOSL) and LECO. Loans are repaid by LECO to GOSL at the exchange rate prevailing at the date of signing the agreement. Exchange gains resulting from the above transactions were transferred to a capital reserve in the previous years.

Foreign exchange differences arising from other transactions in foreign currencies are recognised in the Income Statement.

a) Current Taxes Current income tax assets and liabilities for the

current and prior periods are measured at the amounts expected to be recovered from or paid to the Commissioner General of Inland Revenue. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the Balance Sheet date.

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.

Current income tax relating to items recognized directly in equity is recognized in equity and not in the income statement.

b) Deferred Taxation

Deferred income tax is provided, using the liability method, on all temporary differences at the Balance Sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences:

2.4.2 Taxation

Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the Balance Sheet date.

Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the income statement.

Borrowing costs are recognized as an expense in the period in which they are incurred.

Inventories are valued at the lower of cost and net realizable value, after making due allowances for obsolete and slow moving items. Net realizable value is the price at which inventories can be sold i n t h e o r d i n a r y course of business less the est imated cost of completion and the estimated cost necessary to make the sale.

The cost incurred in bringing inventories to its present location and condition are accounted using the following cost formulae:-

Trade receivables are stated at the amounts they are estimated to realise net of provisions for bad and doubtful receivables.

2.4.3 Borrowing Costs

2.4.4 Inventories

2.4.5 Trade and Other Receivables

Other receivables and dues from Related Parties are recognised at cost less provision for bad and doubtful receivables.

Cash and cash equivalents are defined as cash in hand, demand deposits and short-term highly liquid investments, readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and deposits in banks net of outstanding bank overdrafts. Investments with short maturities i.e. three months or less from the date of acquisition are also treated as cash equivalents.

a) Cost and ValuationAll items of Property, Plant & Equipment are initially recorded at cost. Where items of Property, Plant and Equipment are subsequently revalued, the entire class of such assets is revalued. Revaluations are made with sufficient regularity to ensure that their carrying amounts do not differ materially from their fair values at the Balance Sheet date. Subsequent to the initial recognition as an asset at cost, revalued Property, Plant and Equipment are carried at revalued amounts less any subsequent depreciation thereon. All other Property, Plant and Equipment are stated at historical cost less depreciation.

As agreed with the Asian Development Bank, the supply infrastructure assets of the Company are revalued annually by applying the weighted average index based on the G-5 MUV index (published by World Bank), in respect of imported assets and wholesale price index in respect of local components of the assets, commencing from the Financial Year Ended 31 December 1987. Assets originally taken-over by LECO from Local Councils / CEB have been valued at historical cost up to and including financial year 1992 and revaluedthereafter. The surplus on revaluation is being credited to a capital reserve. Further, the related increases in the brought forward balance of the accumulated depreciation is adjusted to reflect the new values.

2.4.6 Cash and Cash Equivalents

2.4.7 Property, Plant and Equipment

When an asset is revalued as described in paragraph above, any increase in the carrying amount is credited directly to a revaluation surplus unless it reverses a previous revaluation decrease relating to the same asset, which was previously recognized as an expense. In these circumstances the increase is recognized as income to the extent of the previous write down. When an asset's carrying amount is decreased as a result of a revaluation, the decrease is recognized as an expense unless it reverses a previous increment relating to that asset, in which case it is charged against any related revaluation surplus, to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same asset. Any balance remaining in the revaluation surplus in respect of an asset, is transferred directly to retained earnings on retirement or disposal of the asset.

b) De-recognition An 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 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognized

Operating LeasesLeases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term are classified as operating leases.

Lease payments (excluding costs for services such as insurance and maintenance) paid under operating leases are recognized as an expense in the income statement on a straight-line basis over the lease term.

2.4.8 Leases

2.4.9 Investments

Initial Recognition:Cost of investment includes purchase cost and acquisition charges such as brokerages, fees, duties and bank regulatory fees. The Group distinguishes and presents current and non current investment in the balance sheet.

Operational &Maintenance Goods

At actual cost on aweighted average basis

Goods in Transit At actual cost


Measurement

2.4.10 Provisions

2.4.11 Retirement Benefit Obligations

Current Investment:Current investments are carried at the lower of cost and market value, determined on the basis of individual investment.

Unrealized losses arising from reduction to market value and reversals of such reduction required to state current investments at lower of cost and market value which are included in the income statement.

Long Term Investments:Long term investments are stated at cost. Carrying amounts are reduced to recognize a decline other than temporary, determined for each investment individually. These reductions for other than temporary declines in carrying amounts are charged to the income statement.

Disposal of InvestmentOn disposal of an investment, the difference between net disposals and proceeds and the carrying amount is recognised as income or expense.

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effects of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, increase in the provision due to the passage of time is recognized as an interest expense.

a) Defined Benefit Plan – Gratuity The Company measures the present value of the promised retirement benefits of gratuity which is a defined benefit plan with the advice of an

actuary every year using projected benefits valuation method. Actuarial gains and losses are recognized as income or expenses over the expected average remaining working lives of the participants of the plan.

b) Defined Contribution Plans - Employees' Provident Fund & Employees' Trust Fund Employees are eligible for Employees' Provident Fund Contributions and Employees' Trust Fund Contributions in line with the respective statutes and regulations. The Group contributes 15% and 3% of gross emoluments of employees to Employees' Provident Fund and Employees' Trust Fund respectively.

Contributions from consumers to defray the cost of assets installed to establish new service connections are recognized as deferred obligations. The new service connection assets are depreciated over a period of 20 years. The corresponding consumer contributions are amortised to the Income Statement over a similar period of 20 years, upto 31 December 2008. Commencing from 01 January 2009, receipt of consumer contributions is amortised over 8 years and receipt prior to 31 December 2008 is amortized over 20 years.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group 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 fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups 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.

Impairment losses of continuing operations are recognized in the income statement in those expense categories consistent with the function

2.4.12 Deferred Income of Consumer Contributions

2.4.13 Impairment of Assets

2.4.14 Income Statement

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.

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 Group 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. That increased amount cannot ''exceed' the carrying amount that would have been determined, net of depreciation, 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.

Revenue RecognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue and associated costs incurred or to be 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. The following specific criteria are used for the purpose of recognition of revenue.

a) Rendering of ServicesRevenue from rendering of services is recognized in the accounting period in which the services are rendered or performed.

b) InterestInterest Income is recognized as the interest accrued (taking into account the effective yield on the asset) unless collectability in doubt.

c) DividendsDividend income is recognized on a cash basis.

d) OthersOther income is recognized on an accrual basis.

Net Gains and losses of a revenue nature on the disposal of Property, Plant & 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 selling expenses. On disposal of revalued Property, Plant and Equipment, amount remaining in Revaluation Reserve relating to that asset is transferred directly to Retained Earnings.

Gains and losses arising from incidental activities to main revenue generating activities and those arising from a group of similar transactions which are not material, are aggregated, reported and presented on a net basis.

a) The following standards have been issued by the Institute of Chartered Accountants of Sri Lanka.

-Sri Lanka Accounting Standard 44 Financial Instruments; Presentation (SLAS 44)-Sri Lanka Accounting Standard 45 Financial Instruments; Recognition and Measurement (SLAS 45)-Sri Lanka Accounting Standard 39 Share Based Payments (SLAS 39)

The effective date of SLAS 44, 45 and 39 was changed during the year to be effective for financial periods beginning on or after 01 January 2012. These three standards have been amended and forms a part of the new set of financial reporting standards mentioned under note (b) below.

a) Following the convergence of Sri Lanka Accounting Standards with the International Financial Reporting Standards, the Council of the Institute of Chartered Accountants of Sri Lanka has adopted a new set of financial reporting standards that would apply for financial periods beginning on or after 01 January 2012. The application of these financial reporting standards is substantially different to the prevailing standards.

2.5 Effect of Sri Lanka Accounting Standards issued but not yet effective:


3. PROPERTY, PLANT & EQUIPMENT 3.1 Group3.1.1 Gross Carrying Amounts

3.1.4 Net Book Values

Additions DisposalBalance As at

31.12.2010

Balance As at

01.01.2010

Rs.'000 Rs.'000 Rs.'000 Rs.'000

At Cost

Freehold Land 447,264

4,769

-

452,033

Leasehold Land 7,065

-

-

7,065

Buildings 155,701

524

-

156,225

Motor Vehicles 451,840

6,757

(722)

457,875

Computers 228,339

3,355

-

231,694

Office Equipment 233,041

12,619

(88)

245,572

Plant & Machinery 80,428

211

-

80,639

1,603,678

28,235

(810)

1,631,103

At Valuation

Freehold Land 867,279

-

-

867,279

Buildings 333,646

-

-

333,646

Supply of Infrastructure 14,725,499

390,658

(19,729)

15,096,428

15,926,424

390,658

(19,729)

16,297,353

Total Value of Depreciable Assets 17,530,102

418,893

(20,539)

17,928,456

Supply of Infrastructure -Work InProgress

Balance As at

01.01.2010

Rs.'000

Incurred During the

YearRs.'000

Transferred

Rs.'000

Balance As at

31.12.2010

Rs.'000

409,245 339,598 (390,658) 358,185409,245 339,598 (390,658) 358,185

17,939,347 758,491 (411,197) 18,286,641Total Gross Carrying Amount

3.1.2 In the Course of Construction

DisposalBalance As atBalance As at Charge for

the year01.01.2010 31.12.2010

At Cost

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Leasehold Land 3,801 183 - 3,984 Buildings 2,472 3,899 - 6,371 Motor Vehicles 215,404

44,676

(722)

259,358

Computers 216,515

12,293

-

228,808


9,074 (88)

189,351

Plant & Machinery 14,024

10,633 -

24,657

632,582

80,758

(810)

712,530

At Valuation

Buildings 17,945

8,355

-

26,300 Supply of Infrastructure 8,485,882

596,239 (11,766)

9,070,355 8,503,827

604,594

(11,766)

9,096,655 Total Depreciation 9,136,408

685,352

(12,576)

9,809,184

3.1.3 Depreciation

2010 2009

Rs.'000 Rs.'000

At Cost

Freehold Land 452,033 447,264

Leasehold Land 3,082 3,264

Buildings 149,854 153,229

Motor Vehicles 198,517 236,436

Computers 2,886 11,824

Office Equipment 56,221 52,654

Plant & Machinery 55,982 67,499

918,574 972,170

At Valuation

Freehold Land 867,279 867,279

Buildings 307,346 315,701

Supply of Infrastructure 6,026,072 6,239,617

7,200,698 7,422,596

In the Course of Construction

Supply of Infrastructure - Work In Progress 358,185 409,245

Total Carrying Amount of Property, Plant & Equipment 8,477,457 8,804,012

3.2 Company

3.2.1 Gross Carrying Amounts

Balance As

at

01.01.2010

Rs.'000

Additions

Rs.'000

Disposal

Rs.'000

Balance As at

31.12.2010

Rs.'000

At Cost

Freehold Land 447,264 4,769 - 452,033

Leasehold Land 7,065 - - 7,065

Buildings 155,701 524 - 156,225

Motor Vehicles 451,840 6,757 (722) 457,875

Computers 228,037 3,355 - 231,392

Office Equipment 231,228 12,560 (88) 243,700

1,521,135 27,965 (810) 1,548,290

At Valuation

Freehold Land 867,279 - - 867,279

Buildings 333,646 - - 333,646

Supply of Infrastructure 14,725,499 390,658 (19,729) 15,096,428

15,926,424 390,658 (19,729) 16,297,353

Total Value of Depreciable Assets 17,447,559 418,623 (20,539) 17,845,643


3.2.2 In the Course of Construction

3.2.3 Depreciation

3.2.4 Net Book Values

3.2.7 The useful lives of the Company's assets are as follows;

Balance As at

01.01.2010

Incurred

during Year Transfers

Balance As at

31.12.2010

Rs.'000 Rs.'000 Rs.'000 Rs.'000

409,245 339,598 (390,658) 358,185

409,245 339,598 (390,658) 358,185

Supply of Infrastructure - Work In

Progress

Total Gross Carrying Amount 17,856,804 758,221 (411,197) 18,203,828

Balance As at

01.01.2010 Charge for the

yearDisposal

Balance As at

31.12.2010

Rs.'000 Rs.'000 Rs.'000 Rs.'000

At Cost

Leasehold Land 3,801

183 -

3,984

Buildings 2,472

3,899 -

6,371

Motor Vehicles 215,404

44,676

(722)

259,358

Computers 216,432

12,214

-

228,646


8,739 (88)

188,739 618,197

69,711

(810)

687,098

At Valuation

Buildings 17,945

8,355

26,300

Supply of Infrastructure 8,485,882

596,239 (11,766)

9,070,355

8,503,827

604,594

(11,766)

9,096,655

Total Depreciation 9,122,024

674,305

(12,576)

9,783,753

2010 2009

Rs.'000 Rs.'000

452,033 447,264 3,081

3,264

149,853

153,229

198,518

236,436

2,746

11,605 54,961

51,140

861,192

902,938

867,279

867,279

307,346

315,701

6,026,072

6,239,617

7,200,697

7,422,597

358,185

409,245

At Cost

Freehold Land

Leasehold Land

Buildings

Motor Vehicles

Computers

Office Equipment

At Valuation

Freehold Land

Buildings

Supply of Infrastructure

In the Course of Construction

Supply of Infrastructure - Work In Progress

Total Carrying Amount of Property, Plant & Equipment 8,420,074

8,734,780

3.2.5 The fair value of land and buildings was last determined by means of a revaluation during the financial year 31 December 2006 by Messrs. K.T.D. Tissera, P.B.D. Edirisinghe, P.T. Mohideen and S.A.S. Fernando , independent valuers in reference to market based evidence. The results of such revaluation were incorporated in these Financial Statements from its effective date which was 01 January 2007. The surplus arising from the revaluation was transferred to a revaluation reserve.

3.2.6 During the financial year, the Company acquired Property, Plant & Equipment to the aggregate value of Rs.758.221Mn (2009 - Rs. 1,206.651Mn). Cash payments amounting to Rs.23.449 Mn (2009 - Rs.764.018 Mn) were made during the year for purchase of Property, Plant & Equipment.

2010 2009

Buildings 2.5% p.a. 2.5% p.a.Leasehold Land Over lease period Over lease period

Supply of Infrastructure

Substations, Overhead lines & Service Lines taken over from

Local Authorities and CEB 10% p.a. 10% p.a.

Substations, Overhead lines & Service Lines constructed by

Lanka Electricity Company (Pvt) Ltd 4% - 5% p.a. 4% - 5% p.a.

Motor Vehicles 15% p.a. 15% p.a.

Computers 20% p.a. 20% p.a.

Office Equipment 15% p.a. 15% p.a.

3.2.8 The Company's Property, Plant and Equipment includes fully depreciated assets having a gross carrying amounts of Rs.754.268Mn (2009-Rs.431,577Mn).

3.2.9 The details of Leasehold Property are as follows;

CostRs. '000

Lease Period SinceUnexpired Lease

period as at 31/12/2010

Location

Peliyagoda 3,350 99 Years 30/03/99 88 YearsUdahamulla 1,667 99 Years 12/01/88 77 YearsHikkaduwa 1,448 50 Years 07/11/97 37 YearsAmbalangoda 600 30 Years 01/12/96 16 Years

4. INVESTMENTS IN EQUITY SECURITIES

Non-Quoted

Lanka Broad Band

Network (Pvt) Ltd

West Coast Power (Pvt)

Ltd

LECO Projects (Pvt) LtdAnte LECO Metering

Company (Pvt) Ltd Total Investments in

Non-Quoted Equity

SecuritiesLess: Allowances for Fall

in Value

Net Investment in Non

Quoted Equity Security

Carrying

Value 2010

Directors'

Valuation 2010

Carrying Value

2009

Directors'

Valuation 2009

2010 2009 2010 2009 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Ordinary

shares 4% 4% 500,000

500,000

5,000

-

5,000

-

Preferenceshares 100% 100% 1,500,000

1,500,000

15,000

-

15,000

-

Ordinaryshares 17% 17% 20,000,000

20,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Ordinary

shares 100% 100% 100 100 1

1

1

1

Ordinary

shares 70% 70% 3,131,967

3,131,967

31,320

31,320

31,320

31,320

2,051,321

2,031,321

2,051,321

2,031,321

(20,000)

-

(20,000)

-

2,031,321

2,031,321

2,031,321

2,031,321

No. of SharesHolding %Company


Administrative Borrowings by Department

of Treasury Operations

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

570,000 570,000 570,000 570,000

570,000 570,000 570,000 570,000

5. BORROWINGS BY DEPARTMENT OF TREASURY OPERATIONS

Ante LECO Metering Company (Pvt) Ltd - - 47,085 47,085

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

-

- 47,085 47,085

Non Current

Long Term Borrowings (6.1) - - 47,085 47,085

Term Deposits 68,100 145,200 68,100 145,200

68,100 145,200 115,185 192,285

Current

Investments in Banks for Loans given to

Employees 482,086 405,458 482,086 405,458

Investments in Other Deposits 1,056,377 545,651 1,050,392 543,891

1,538,463 951,109 1,532,478 949,350

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

6.OTHER INVESTMENTS

6.1 Long Term Borrowings

7. INVENTORIES

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

683,338 725,531 606,380 676,198

14,094 10,846 14,094 10,846

697,432 736,377 620,474 687,044

Operational and Maintenance Goods

Goods in Transit

Allowances for Obsolete and Slow Moving

Inventories (13,032) (13,032) (13,032) (13,032)

684,400 723,345 607,442 674,012

8. TRADE AND OTHER RECEIVABLES

8.1 Summary

Trade Debtors

Other Debtors

Advances and Prepayments

Loans to Company Officers

Allowances for Doubtful Debtors

- Related Parties (8.2)

- Others

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

16,715 21,278 128,263 168,220

1,820,270 1,874,559 1,820,264 1,874,553

1,836,985 1,895,837 1,948,527 2,042,773

114,759 148,448 114,759 148,448

79,852 53,906 21,791 28,752

309,348 322,339 309,348 322,339

(657,496) (520,748) (633,119) (520,748)

1,683,448 1,899,782 1,761,306 2,021,564

8.2 Trade Debtors - Related Parties

Group Company

2010 2009 2010 2009Relationship

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Parent

Company 16,715 21,278 16,715 21,278

Subsidiary

Company - - - -

Subsidiary

Company - - 111,548 146,942

16,715 21,278 128,263 168,220

Ceylon Electricity Board

LECO Projects (Pvt) Ltd

Ante LECO Metering Company

(Pvt) Ltd

9. AMOUNTS DUE FROM RELATED PARTIES

Group Company

2010 2009 2010 2009Relationship

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Ceylon Electricity Board Parent

Company 75,818 82,354 - -

Ante LECO Metering Company

(Pvt) Ltd

Subsidiary

Company - - 30,024 30,281

LECO Projects (Pvt) Ltd Subsidiary

Company - - 2,449 2,319 75,818 82,354 32,473 32,600


12. REVENUE RESERVES

12.1 Summary

10. STATED CAPITAL

The holders of ordinary shares confer their right to receive dividends as declared from time to time entitled to one vote per share at a meeting of the Company. All shares rank equally with regard to Company's residual assets.

11. CAPITAL RESERVES

11.1 Summary

Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Revaluation Reserve

On: Property, Plant & Equipment

Lands 764,336 764,336 764,336 764,336

Buildings 43,459 43,459 43,459 43,459

Supply of Infrastructure (11.2) 5,237,351 5,232,140 5,237,351 5,232,140

6,045,146 6,039,935 6,045,146 6,039,935

Pending Allotment of Shares - 13,422 - -

6,045,146 6,053,357 6,045,146 6,039,935

11.2 On: Supply of Infrastructure

Group Group

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Balance as at the beginning of the year 5,232,140 4,174,936 5,232,140 4,174,936

Revaluation of Cost of Supply Infrastructure (3.2.1) - 2,335,478 - 2,335,478

Revaluation of Accumulated Depreciation

(3.2.3) - (1,278,581) - (1,278,581)

Net Additions / (Removals) of supply of infrastructure 5,211 6,606 5,211 6,606

Adjustment in respect of prior years - (6,299) - (6,299)

Balance as at the end of the year 5,237,351 5,232,140 5,237,351 5,232,140

Supply Infrastructure are revalued each year using indices that reflect price changes due to inflation (2010 - Nil% / 2009 - 19.43%). The unrealised surplus cannot be directly distributed to the shareholders.

Foreign Exchange Reserves (12.2)

Asset Replacement Fund (12.3)

Insurance Reserves (12.4)

109,258 109,258 109,258 109,258

311,642 311,642 311,642 311,642

29,000 29,000 29,000 29,000

Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

449,900 449,900 449,900 449,900

12.2 Foreign Exchange Reserve

This represents the gain on exchange in the previous years when Asian Development Bank Term Loans in SDR were paid to the Government of Sri Lanka at contracted rates although supplies of capital goods were received and accounted at higher prevailing rates, and gain recorded when loan agreements were signed.

12.3 Asset Replacement Reserve

Balance as at the beginning of the year

Expensed during the year

Balance as at the end of the year

Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

311,642 311,710 311,642 311,710

- (68) - (68)

311,642 311,642 311,642 311,642

This represents amounts set aside from profit for replacement and rehabilitation of Property, Plant and Equipment of the Company.

12.4 This represents the amount transferred from the Retained Earnings to cover losses and damages to Property, Plant & Equipment and Inventories of the Company.

13. INTEREST BEARING LOANS & BORROWINGS

Company

Bank Loans (13.1)

Bank Over Draft (26.2)

2010 2010 2010 2009 2009 2009

Amount Amount Total Amount Amount TotalRepayable Repayable Repayable Repayable

Within 1 Year After 1 Year Within 1 Year After 1 YearRs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

77,422 210,014 287,436 77,422 287,436 364,858 66,063 - 66,063 5,148 - -

143,485 210,014 353,499 82,570 287,436 364,858


Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Number '000 Number '000

Issued and Fully Paid Ordinary Shares

A Shares 1,135,803 1,135,803 113,580 113,580 B Shares 9,264 9,264 926 926

1,145,067 1,145,067 114,507 114,507

13.1 Bank Loans

The above loans were given to the Government of Sri Lanka by Asian Development Bank and re-lent to Lanka Electricity Company (Private) Limited.

14. DEFERRED TAX (ASSET) / LIABILITY

Balance as at the beginning of the year

Deferred tax adjustment for the year (24)

Balance as at the end of the year

Depreciation allowances for tax purposes

Deferred Income on Consumer Contribution

Deferred Tax Liability

Deferred Tax Asset

Deferred Income on Consumer Contribution

Employment Retirement Benefits

Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

449,468 278,118 449,468 278,118

342,106 171,343 342,196 171,350

791,574 449,461 791,664 449,468

185,738 569,906 185,828 569,913

695,037 - 695,037 -

- (21,020) - (21,020)

(89,201) (99,425) (89,201) (99,425)

791,574 449,461 791,664 449,468

15. DEFERRED INCOME

16. EMPLOYMENT RETIREMENT BENEFIT

Balance as at 1st January

Consumer contributions during the year

Charged to income statement

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

2,588,725 2,508,460 2,588,725 2,508,460

355,675 292,925 355,675 292,925

(252,736) (212,660) (252,736) (212,660)

2,691,664 2,588,725 2,691,664 2,588,725

Balance as at 1st January

Charge for the year

Payments made during the year

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

284,189 279,060 284,071 279,060

44,860 20,562 44,873 20,444

(10,370) (15,433) (10,370) (15,433)

318,679 284,189 318,574 284,071

16.1 Messrs. Actuarial Management Consultants (Pvt) Ltd Actuaries, carried out an actuarial valuation of the defined benefit plan gratuity of the Company. Appropriate and compatible assumptions were used in determining the cost of retirement benefits. The principal assumptions used are as follows:

Discount Rate

Salary Increment Rate

Normal Retirement Age

Current Service Cost

2010 2009

11% per annum 11% per annum

8.5% 8.5%

Appointments upto 31

December 2006 - 65 years

Appointments upto 31

December 2006 - 65 years Appointments after 01

January 2007 - 55 years

Appointments after 01

January 2007 - 55 years

Rs.17,068,291/- Rs. 15,888,964/-

17. TRADE AND OTHER PAYABLES

17.1 Summary

17.2 Trade Dues Payable to Related Parties

Trade Payable - Related Parties (17.2)

Sundry Creditors including Accrued Expenses

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

1,688,375 1,235,414 1,688,375 1,235,414

443,779 409,588 390,413 333,212

2,132,154 1,645,002 2,078,788 1,568,626

Ceylon Electricity Board Parent Company 1,688,375 1,235,414 1,688,375 1,235,414

1,688,375 1,235,414 1,688,375 1,235,414

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

Relationship

18. AMOUNTS DUE TO RELATED PARTIES

Ceylon Electricity Board

Lanka Transformers (Pvt) Ltd

Group Company

Relationship 2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

Parent Company 472 398 472 398

Affliate Company 12,159 31,547 12,159 31,547

12,631 31,945 12,631 31,945


Asian Development Bank

Project 2

Project 3

Repayment Value of an As at Loans Repayment As at

Period Installment 01.01.2010 Obtained 31.12.2010Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

20 years 22,253 200,280 - (44,507) 155,774

15 years 16,458 164,578 - (32,916) 131,663

364,858 - (77,422) 287,436

InterestRate(%)

10.50

13

19. REVENUE

3,169,198 2,972,408 3,169,198 2,972,408

5,265,461 4,933,826 5,265,461 4,933,826

5,302,446 4,846,785 5,302,446 4,846,785

198,573 218,646 198,573 218,646

75,824 73,851 75,824 73,851

15,500 20,239 15,500 20,239

3,869 2,734 - -

Industrial & Hotels

Domestic

Commercial

Street Light (19.1)

Religious

Temporary Connections

Contract Revenue

Sale of Goods 323,618 589,199 - -

Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

14,027,002 13,065,755 14,027,002 13,065,755

14,354,489 13,657,688 14,027,002 13,065,755

19.1. In the current year, revenue on street light (treasury paid) has been recognized only up to the amount received from the government in the year 2010 which is Rs. 158,603,899/- in these financial statements. If such revenue is recognized during the year on the same basis as previous years the street light revenue would have been increased by Rs. 293,876,602/-. The loss of Rs. 245,854,000/- after taking in to account the cost of Rs. 167,819,007/- for providing the unrecorded street light revenue.

19.2. A directive was issued by the Public Utility Commission of Sri Lanka to account for purchases for a calendar year with effect from 1/1/2011.Previously purchases were calculated and recorded for 20 December to 21 December. As a result of this directive, an additional 10 days of purchases of electricity has been recorded for the year ended 31/12/2010. The effect of this on profit/ (loss) is an additional cost of Rs. 389,806,000/- for the year ended 31/12/2010. On this basis the company recorded a loss of Rs.245,854,000/-. If the purchases were recorded on the same basis as in the previous year, the company would have recorded a profit of Rs.143,952,000/-.

20. OTHER OPERATING INCOME

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

252,736 212,660 252,736 212,660

229,688 146,865 229,688 146,865

404 1,883 404 1,883

20,916 11,559 20,916 11,559

Amortization of Consumer Contribution

Recoveries from Consumers

Training School Income

Interest on Staff Loans & Concessionary

Loans to Consumers

Sundry Income 138 115 - -

503,882 373,083 503,744 372,968

21. FINANCE INCOME

23. PROFIT BEFORE TAX

Interest on Other Deposits

Interest on Administrative Borrowings

by Treasury

Interest on Government securities

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

113,126

178,353

107,738

170,841

39,900

39,900

39,900

39,900

33,816

-

33,816

-

186,842

218,253

181,454

210,741

Stated after Charging /(Crediting) following;

Included under other operating expenses

Depreciation

Staff Costs

Included under administration expenses

Depreciation

Donation & Contribution

Public Relations and Advertising

Entertainment

Directors Fees

Research and Development Costs

Staff Costs include;

- Defined Benefit Plan Costs - Gratuity (included in staff cost)

- Defined Contribution Plan Costs - EPF & ETF (included in staff cost)

Allowances for Doubtful Debtors

Audit FeesProfit on Sale of Property, Plant and

Equipment

Allowance for Fall in Value in Investments

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

625,041

599,157

625,041

599,154

404,317

374,230

404,317

374,230

60,201

69,539

49,265

59,195

342

4,512

32

4,512

3,730

10,690

3,722

10,690

75

81

75

81

100

458

100

196

-

9,429

-

9,429

671,545

600,332

662,274

589,813

44,873

20,463

44,873

20,444

101,258

93,675

99,792

93,011

112,377

102,962

112,371

102,962

1,580 1,475 1,096 1,220

(2,422) (15,281) (2,442) (15,281)

- 20,000 - 20,000


22 FINANCE COST

Interest Expense on Overdrafts

Interest Expense on Loans & Barrowings

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

187

249

20

93

41,606

51,086

41,606

51,086

41,793

51,335

41,626

51,178

24. INCOME TAX EXPENSE 25. BASIC LOSS PER SHARE

Current Income Tax

Current tax expense on ordinary activities for the year (24.1)

Over provision of current taxes in respect of prior years (24.2)

Social Responsibility Levy @ 1.5%

Deferred Income Tax

Deferred Taxation Charge (14)

Income Tax expense reported in the income statement

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

77,516 124,885 76,076 122,135

(59,724) - (59,724) -

1,167 1,874 1,141 1,833

342,106 171,343 342,196 171,350

361,065 298,102 359,689 295,318

24.1. A reconciliation between tax expense and the product of accounting profit multiplied by the statutory tax rate is as follows:

Accounting Loss Before Tax

Aggregate Disallowed Items

Aggregate Allowable Expenses

Adjusted Taxable Profit

Statutory Tax Rate

Current Tax Expense

Group Company

2010 2009 2010 2009Rs.'000 Rs.'000 Rs.'000 Rs.'000

(237,519) (99,935) (245,854) (132,091)

727,922 687,302 736,648 711,602

(268,928) (230,553) (273,435) (230,553)

221,475 356,814 217,359 348,958

35% 35% 35% 35%

77,516 124,885 76,076 122,135

24.2 . The Department of Inland Revenue had raised an income tax assessment in respect of the year 1995/1996 recognizing the full amount of income arising from new service connection for tax purposes in the same period that such income was derived, whereas the accounting policy is to recognize such income on a deferred basis over a 20 years period.

The matter was under appeal before the Board of Review and the Board of Review on conclusion of the inquiry has determined that there is no additional assessment of income and the income tax assessment raised in respect of year of assessment 1995/96 was not valid. Hence the provision made in respect of this liability of Rs.407.703Mn has been reversed in year 2008.

In 2010, at the meeting held with the Department of Inland Revenue in order to settle the petition of appeal made against the notice of Assessment issued for the Year of Assessment 2007/2008, the Department of Inland Revenue agreed to treat the consumer contribution on the following basis;

-From the year of assessment 2007/2008, the receipts will be taxed over eight years.

-The remaining of the consumer contributions as at the beginning of the year of assessment 2007/2008, i.e. brought forward amount to be taxed on the same as accounting amortization basis, i.e. over twenty years

25.1. Basic loss per share is calculated by dividing the net loss for the year attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. The weighted average number of ordinary shares outstanding during the year and the previous year are adjusted for events that have changed the number of ordinary shares outstanding without a corresponding change in the resources such as a bonus issue.

25.2 The following reflects the income and share data used in the basic loss per share computation:

Amounts used as the numerator

Loss for the year

Loss attributable to ordinary shareholders

for basic loss per share

Group Company

2010 2009 2010 2009

Rs.'000 Rs.'000 Rs.'000 Rs.'000

(600,032) (406,492) (605,543) (427,409)

(600,032) (406,492) (605,543) (427,409)

26. CASH AND CASH EQUIVALENTS IN THE CASH FLOW STATEMENT

Components of Cash and Cash Equivalents

26.1 Favourable Cash & Cash Equivalents balance

Cash & Bank Balances

Current Portion of Other Investments

26.2 Unfavourable Cash & Cash

Equivalent Balances

Bank Overdraft (13)

Total Cash and Cash Equivalents For the

Purpose of Cash Flow Statement

Group Company

2010Rs.'000

2009Rs.'000

2010Rs.'000

2009Rs.'000

775,791 537,587 728,975 417,384

1,538,462 951,109 1,532,478 949,350

2,314,253 1,488,696 2,261,453 1,366,734

(66,063) (5,148) (66,063) (5,148)

2,248,190 1,483,548 2,195,390 1,361,586


Number of ordinary shares used as the

denominator:

Weighted average number of ordinary

shares in issue

2010 2009 2010 2009Number '000 Number '000 Number '000 Number '000

114,507 114,507 114,507 114,507

114,507 114,507 114,507 114,507

27. COMMITMENTS AND CONTINGENCIES

27.1 Capital Expenditure Commitments

The Group/Company does not have material purchase commitments for acquisition of property, plant and equipment incidental to the ordinary course of business as at 31 December 2010 (2009 - Nil).

27.2 Contingent Liabilities

a) The Company suspended paying turnover tax with effect from 1st of July 2008. The turn over tax unpaid for the period 01 July 2008 to 31st December 2010 amounts to Rs.336.74Mn ( 2009 - 196.47Mn). However, the written clearance has not yet been received by the Company from the relevant tax authorities. No provision has been made in the financial statements in this regard.

b) The Company is a defendant or defendant respondent in 23 (2009-24) lawsuits for which the maximum liability is estimated by the Company at Rs.305,822,620/- (2009 - Rs.31,436,033/-) at the year end. Although there is no assurance, the directors believe, based on the information currently available, that the ultimate resolution of such legal procedures would not likely to have a material adverse effect on the results of operations, financial position or liquidity of the Company. Accordingly, no provision for any liability has been made in these financial statements in this regard.

28. ASSETS PLEDGEDFollowing assets have been pledged as security for liabilities.

Nature of Assets

Fixed Deposits

Fixed Deposits

Fixed Deposits

Fixed Deposits

Carrying Amount ofAssets

Pledged

Nature of Liabilities 2010 2009

Rs.'000 Rs.'000

IncludedUnder

Bank overdraft facilities of People's Bank 45,500 36,000

Current Current OtherInvestments

and NonSMI loan schemes of People's Bank 80,838 72,667

Staff loan Schemes of SMIB Bank and HDFC Bank

482,086 405,458

Bond against the stand by Letter of credit facilities of West Cost Power (Pvt) Ltd to NDB Bank

319,000 319,000

927,424 833,125

29. RELATED PARTY DISCLOSURE

Details of significant related party disclosures are as follows;

29.1 The Company carried out following transactions with following related companies;

Parent CompanyOther major

shareholders / Treasury

Affiliates

Ante Leco Metering Company (Pvt) Ltd

Leco Projects(Pvt) Ltd

West CoastPower (Pvt)

Lanka (Pvt) LtdTransformers

2010 2009Rs.'000 Rs.'000

2010Rs.'000

2009Rs.'000

2010Rs.'000

2009Rs.'000

2010Rs.'000

2009Rs.'000

2010Rs.'000

2009Rs.'000

2010Rs.'000

2009Rs.'000

(1,214,534) (1,245,595)

205,142

127,719

176,838

120,705

2,319

1,947

2,000,000

1,910,425

(31,547)

-

(12,544,671) (11,493,574)

-

-

-

-

-

-

-

-

-

-

12,381,356 11,524,635

-

-

-

-

-

-

-

-

-

-

(293,811)

-

77,422

77,422

-

-

-

-

-

-

-

-

-

-

39,900

39,900

-

-

-

-

-

-

-

-

(472)

-

-

-

-

-

-

-

-

-

-

-

-

-

(39,900)

(39,900)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

89,575

-

-

-

-

-

-

285,182

410,638

130

372

-

-

-

-

-

-

-

-

(320,448)

(354,505)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(13,994)

(64,407)

-

-

-

-

-

-

-

-

-

-

33,382

32,860

-

-

-

-

-

-

-

-

-

-

-

-

(1,672,132) (1,214,534) 282,564 205,141 141,572 176,838 2,449 2,319 2,000,000 2,000,000 (12,159) (31,547)

Balance as at 01 January

Purchase of Electricity

Payments for Electricity

ADB Loan Repayments

Interest on Borrowings

Accrued Expenses

Interest Received

Equity

Material Transfer

Receipt of Material

Purchase of goods

Payments

Fund Transfers


29.2 Transactions with Government Related Entities

For the purpose of this disclosure, the management has decided to disclose transactions with the entities relating to the line ministry to which Company belongs to, in addition to the transactions with the Government Treasury, and there were no such transactions during the year (2009 - Nil).

29.3 Transaction with the key Management Personal of the Company or its Parent

The Company has defined, the key Management personnel of the Company are the members of its Board of Directors and that of its parent and the divisional heads including General Manager.

Key management personnel Compensation

Directors fees and short term benefits

Remuneration of other key management personnel

Total compensation paid to key

Company

2010 2009Rs.'000 Rs.'000

474 744

13,879 10,731

14,353 11,475

30. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

The Board of Directors of Lanka Electricity Company (Pvt) Ltd decided to suspend the services of the General Manager with effect from 11 March 2011.


31. COMPARATIVE INFORMATION

The presentation and classification of following items in the Financial Statements are amended to ensure the comparability with the current year.

Balance Sheet

Trade and Other PayablesSundry Creditors including Accrued Expenses (a)

Balance SheetAmount Due to Related Parties (a)

Group Company

Increase Decrease Increase DecreaseAs reported previously

2009Rs.'000

Current Presentation

2009Rs.'000

As reported previously

2009Rs.'000

Current Presentation

2009Rs.'000

441,533

-

(31,945)

409,588

365,157

-

(31,945) 333,212

- 31,945 - 31,945 - 31,945 - 31,945

441,533 31,945 (31,945) 441,533 365,157 31,945 (31,945) 365,157

Reason for change in the Presentation and Classification The Amounts due to related parties which was classified under Sundry Creditors including Accrued Expenses during the previous year was reclassified under Amounts due to Related Parties during the current year for better presentation in the Financial Statements.


10 Year Summery

For the Year ended 31 st December 2010

PERFORMANCE HIGHLIGHTS

2,010Rs. '000

2009Rs. ' 000

2008Rs. ' 000

2007Rs. ' 000

2006Rs. ' 000

2005Rs. ' 000

2004Rs. ' 000

2003Rs. ' 000

2002Rs. ' 000

2001Rs. ' 000

14,027,002 13,065,755

13,229,654

11,517,269

9,713,653

8,175,259

7,587,016

6,976,467

5,625,636

3,661,595

-204,228 (80,913) 593,835

1,007,507

1,046,184

592,747

468,953

241,445

226,006

410,224

181,454 210,741

300,411

460,503

340,244

271,244

220,484

195,092

282,847

366,332

41,626 51,178

60,289

69,142

80,850

101,905

105,861

121,458

161,140

159,577

-245,854 (132,091) 533,546

938,364

965,334

760,770

583,576

315,079

347,713

616,979

359,689 295,318

747,981

535,328

370,184

274,526

268,984

120,500

197,969

283,131

-605,543 (427,409) (214,435) 403,036

595,150

486,244

314,592

194,579

149,744

333,848

1,145,067 1,145,067

1,145,067

1,145,067

1,145,067

1,145,067

1,145,067

1,145,067

1,145,067

1,145,067

6,045,146 6,039,935

4,982,731

4,473,981

3,331,032

3,176,836

2,953,821

2,800,778

2,647,078

2,493,253

449,900 449,900

449,968

450,127

341,539

363,189

1,221,469

906,877

893,297

743,553

4,011,916 3,609,700

3,430,497

2,973,040

3,045,153

2,805,387

3,314,405

3,285,082

3,307,192

3,244,393

2,750,778 2,376,704

2,436,836

2,535,429

2,471,970

1,955,196

1,832,223

1,488,019

1,431,846

1,415,288

14,402,807 13,621,306

12,445,099

11,577,644

10,334,761

9,445,675

10,466,985

9,625,823

9,424,480

9,041,554

11,136,580 11,528,386

10,386,277

9,536,369

6,336,746

5,926,066

5,625,300

5,535,673

4,894,909

4,729,720

4,662,674 4,094,910

4,488,221

4,685,110

6,148,733

5,304,190

4,841,685

4,090,151

4,529,571

4,311,834

15,799,254 15,623,296

14,874,498

14,221,479

12,485,479

11,230,256

10,466,985

9,625,824

9,424,480

9,041,554

0 0 0 3.66

5.20 4.25 2.75 1.70 1.31 2.92

78.92 84.16 78.66 76.09 60.85 56.5 46.46 42.38 40.92 38.27

0 0 0 1.50

2.00 1.50 1.50 0 0 2.00

1,338 1,326

1,358

1,283

1,270

1,284

1,302

1,318

1,314

1,322

354 354 338 347

338 320 302 285 274 261

6.85% -10.50% -9.68% 0.33% 9.38 9.00 6.20 3.70 0.90 4.40

0.06 0.06 0.07 0.08

0.11 0.19 0.23 0.27 0.31 0.33

1.70 1.72 1.84 1.85 2.49 2.7 2.6 2.7 3.2

0 172

229 172 172 0 0 229

1123.02 1,051.62

1,071.25

1,099.03

1,045.30

974.38

914.78

848.51

764.12

743.20

1228.02 1,120.23

1,124.48

1,144.22

1,110.75

1,036.77

969.17

899.18

838.51

797.01

6.28 5.81

5.03

4.74

5.80 5.32 5.61 5.63 6.41 6.75

473,079 469,323

459,548

445,386

429,387

411,157

392,782

376,098

360,357

345,314

3

Operating Results

Revenue from Sale of Electricity

Profit Before Interest

Interest Earned

Interest Incurred

Profit Before Tax

Taxation

Profit After Tax

Equity & Liabilities

Share Capital

Capital Resreves

Revenue Reserves

Non Current Liabilities

Current Liabilities

Assets

Non Current Assets

Current Assets

Share Information

Employee Information

No. of Employees

Consumer/ EmployeeRatio

Ratios & Other Information

Return on Average Net Fixed Assets (%)

Current Ratio

Dividend Paid (Rs.Mn)

Sales (GWh) Purchases

from CEB (GWh)

Purchases from CEB(Gwh)

Distribution System Losses %

No. of Consumers

Long Term Debt to Equity

DividendPer Share (Rs.)

Net Assets Per Share (Rs.)

Earnings Per Share (Rs.)


NOTICE OF MEETING

NOTICE IS HEREBY GIVEN that the Twenty Seventh Annual General Meeting of Lanka Electricity Company rd(Private) Limited will be held at the Registered Office of the Company at 3 Floor, E. H. Cooray Building, 411 Galle

throad, Colombo 03 on 30 June 2011 for the following purposes:

1. To receive and consider the Annual Report of the Board of Directors on the affairs of the Company and the stStatement of Accounts for the year ended 31 December 2010 and the Report of the Auditors thereon.

2. To re-appoint Messrs Ernst & Young, Chartered Accountants, the retiring Auditors and to authorise the Directors to determine their remuneration.

st3. To authorise the Directors to determine donations for the year ending 31 December 2011 and up to the date of the next Annual General Meeting.

4. To adopt the new Articles in lieu of the existing Articles of Association of the Company .

Secretaries and Registrars Limited

Secretaries

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on behalf of him/her.

2. A proxy need not be a member of the Company.

3. The Form of Proxy is enclosed for this purpose.

4. The completed Form of Proxy must be deposited at the Registered Office of the Company, not later than 48 hours prior to the time appointed for the holding of the meeting.

By Order of the Board


LANKA ELECTRICITY COMPANY (PRIVATE) LIMITED

FORM OF PROXY

I/We* ………………..……………………………………………………………………………………….……..................................................................

of ………………………………….…………………………………………………………………………….......................................................................

shareholder/s of LANKA ELECTRICITY COMPANY (PRIVATE) LIMITED hereby appoint

……………………………………………...............……………………………………….. of ………………………………………………………………….…….......

…………………………………………………………………………. or failing him............... of .......................................................................

thas my/our proxy to represent me/us/ on my / our behalf at the Annual General Meeting of the Company to be held on 30

June 2011 and at any adjournment there of and at every poll which may be taken in consequence of the aforesaid

Meeting and to VOTE as indicated below.

In witness my/our* hand this ……………… day of …………………. Two Thousand and Eleven

……………………………….

Signature

*Please delete what is inapplicable.

Note: Instructions are given below.

INSTRUCTIONS FOR COMPLETION

1. Kindly perfect the Form of Proxy by filling in legibly your full name address and the National Identity Card number and signing in the space provided and filling in the date of signature.

2. The completed Form of Proxy should be deposited at the Registered Office of the Company.

3. If you wish to appoint a person other than the Chairman or a Director of the Company as your Proxy, please insert the relevant details in the space provided (above the names of the Board of Directors) on the Proxy Form.

4. If the Form of Proxy is signed by an Attorney, the relative Power of Attorney should accompany the Form of Proxy for registration if such Power of Attorney has not already been registered with the Company.

5. If the appointor is a company / incorporated body this Form must be executed in accordance with the Articles of Association / Statute.

Planing & Construction Division

Branch Engineer

Kaluthara Branch

Branch Reception

Branch Manager - Mr. M. D. Gamage

Account Division

Custermer Service

LECO Kaluthara Branch

Management Staff & Branch Managers

Our Vision 04 - Lanka Electricity Company (Private) Limited - … · · 2012-10-15Hatton National...

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