16. BORROWINGS   Close Window  
 
(All amounts in Sri Lanka Rupees millions)
  Group Company
  2003 2002 2003 2002
Current (due within one year)        
Bank overdrafts 1
Government borrowings 2,353 2,626 2,353 2,626
Bank borrowings and others 4,830 3,938 2,486 3,696
Debentures 375 375 375 375
  ---------
7,558
======
---------
6,940
======
---------
5,214
======
---------
6,697
======
Non-current (due after one year)        
Government borrowings 8,709 11,264 8,709 11,264
Debentures [Note (a)] 375 750 375 750
Bank borrowings and others 4,439 6,972 3,192 6,704
  13,523 18,986 12,276 18,718
Total borrowings ---------
21,081
======
---------
25,926
======
---------
17,490
======
---------
25,415
======
   
(a) The redemption of debentures will be in 4 equal annual instalments, commencing from 23 March 2002, two years from the initial date of allotment.

The interest rate exposure of the borrowings of the Company was as follows:
   
 
  Group Company
  2003 2002 2003 2002
Total borrowings        
- at fixed rates 13,242 18,445 13,216 18,445
- at floating rates 7,839 7,481 4,274 6,970
  ---------
21,081
======
---------
25,926
======
---------
17,490
======
---------
25,415
======
   
  The currency exposure of the borrowings of the Company at the Balance Sheet date was as follows:
   
 
  Group Company
  2003 2002 2003 2002
Foreign currency 5,678 9,325 5,678 9,325
Local currency 15,403 16,601 11,812 16,090
  ---------
21,081
======
---------
25,926
======
---------
17,490
======
---------
25,415
======
         
 
  Group/Company
  2003 2002
Average effective interest rates    
- Bank overdrafts 14.5%
- Domestic bank borrowings 14% 14.0%
- Foreign bank borrowings 5.56% 5.7%
- Government borrowings 12.74% 13.0%
Debentures    
- Fixed (annually) 14.50% 14.5%
- Fixed (quarterly) 14.00% 14.0%
- Floating 13% - 16% 13% - 16%
 
Maturity of non-current borrowings:
  Group Company
  2003 2002 2003 2002
Between 1 and 2 years 8,517 9,203 7,270 8,960
Between 3 and 5 years 3,684 6,224 3,684 6,199
Over 5 years 1,322 3,559 1,322 3,559
  ---------
13,523
======
---------
18,986
======
---------
12,276
======
---------
18,718
======
   
(b) The Government borrows amounts in foreign currencies to fund the development of SLTL’s network. These amounts have been re-lent to SLTL with shorter repayment periods than the underlying loan. The loan balance as at 31 December 2003 is Rs. 11,061 million (2002 - Rs. 13,335 million). Exchange fluctuations on repayments of these loans are borne by the Government.
   
(c) SLTL bears the foreign exchange risk and the related costs on a loan re-lent by the Government (a loan not among the above loans), bearing interest at 10% per annum. The loan was fully repaid during the financial year (2002 - Rs. 554 million).
   
(d) Certain Government re-lent loans amounting to Rs. 354 million (2002 - Rs. 1,086 million) have been granted on condition that at least 25%-30% of the average capital expenditure on the related projects is funded from funds generated internally. These projects have been completed as at the Balance Sheet date.
   
(e) The Government has guaranteed third party loans amounting to Rs. 5,486 million (2002 - Rs. 8,127 million). Total value of loans that have neither been guaranteed nor secured is Rs. 115 million (2002 - Rs. 2,062 million).
   
(f) The majority of the loans require SLTL to submit audited financial statements among other matters to the lenders within stated periods of the calendar year end, and to maintain adequate accounting records in accordance with generally accepted accounting principles.
   
(g) The Directors believe the Company will have sufficient finances available to meet its present commitments.
 
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