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Notes to the Financial Statements
 

   The Government has guaranteed third party loans amounting to Rs. 10,978 million (1998 - Rs. 9,841 million).

   Total value of loans that have neither been guaranteed nor secured is Rs. 6,440 million (1998 - Rs. 316 million). All bank    overdrafts are unsecured.

   The majority of the loans require SLTL, among other matters, to submit audited financial statements to the lenders within stated    periods of the calendar year-end, and to maintain adequate accounting records in accordance with generally accepted    accounting practice. SLTL has not complied with some of these requirements. However, the Directors believe that the lenders    were aware of the likely shortcomings in SLTL’s accounting records when signing the loan agreements, and have not notified    SLTL of any breach. The Directors do not believe that the lenders will materially alter any of the terms of these loans to SLTL’s    detriment.

   The Directors believe the Company will have sufficient finances available to meet its present commitments, either from the    renewal of its current facilities or from the negotiation of new facilities.

 
 
  15. Deferred Income Taxes        
 
 
 

Deferred income taxes are calculated on all temporary differences under the liability method using a principal tax rate of 35% (1998 - 35%).

The movement in the deferred income tax account is as follows:

 
   
                  Group
                Company
 
 
---------------- ---------------- ---------------- ----------------  
1999 1998 1999 1998  
 
Rs.million Rs.million Rs.million Rs.million  
 
---------------- ---------------- ---------------- ----------------  
 
At beginning of year
5,131 3,871 5,131 3,871  
 
Income statement charge
1,057
1,260
1,056
1,260
 
 
---------------- ---------------- ---------------- ----------------  
 
At end of year
6,188
5,131
6,187
5,131
 
 
---------------- ---------------- ---------------- ----------------  
 
16. Deferred Income
 
             
  The deferred income represents the deferred line connection charges, net of amounts released equally to the income statement over a period of 15 years.  
       
          Group/Company
 
        ---------------- ----------------  
        1999 1998  
        Rs.million Rs.million  
        ---------------- ----------------  
  Balance at 1 January     4,748 3,294  
  Connection fees for the year     1,719 1,933  
  Amount amortised during the year    
(537)
(479)
 
      ---------------- ----------------  
  Balance at 31 December    
5,930
4,748
 
      ---------------- ----------------  
  Amortisations fall due as follows:    
 
  Within one year    
530
422
 
  After one year    
5,400
4,326
 
      ---------------- ----------------  
     
5,930
4,748
 
      ---------------- ----------------  
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Notes to the Financial Statements                              
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