Sri Lanka Cricket financial position deteriorating: Arjuna
2008-11-19 19:16:34

An Internal Audit review of Sri Lanka Cricket (SLC) for the financial years 2006-2007 has found that SLC’s liquidity position had been deteriorating over the period under review, mainly due to high capital expenditure, borrowing costs and infrastructure development commitments, with losses running into millions of rupees, according to the report tabled in Parliament today by MP and Interim Committee Chairman of SLC Arjuna Ranatunga.

The loss of revenue by way of broadcasting and sponsorship rights income due from Taj TV amounting to US $ 11,947940 (and the subsequent refusal of Ceylinco Insurance to pay the insurance claim) as well as the payment of US $ 5 million as damages to WSG Nimbus had impacted heavily on the financial position of SLC. The total loss incurred by SLC on this deal amounted to US $ 16,947,940 (Around Rs1800 million approximately).

The report said that SLC’s working capital as at December 31, 2006 was a deficit of Rs303 million ( as per audited accounts) and a deficit of Rs416 million (per un-audited accounts) as at December 31,2007. This reveals that the working capital position has deteriorated by Rs 113million in 2007over the previous year, it said

Outstanding term loans and bank overdraft balances as at December 31, 2006 and December 31, 2007 were Rs 446.1 million and Rs478.6 million respectively.

The total interest costs for 2007 stood at Rs121 million as per accounts which shows an increase of 303 per cent when compared with interest charge of Rs30 million for 2006.The interest costs as a percentage of average borrowings for the years 2006 and 2007 were 5.2 per cent and 25.1 per cent respectively. “This reflects the growing dependence of SLC on short term borrowings as well as the general increase of interest costs as a result of increasing lending rates in the financial markets over the period,” it added.

The audit conducted by PriceWaterhouseCoopers found that despite the SLCs poor liquidity position, SLC recorded an excess of income over expenditure (Profit ) of Rs663,622,284 (unaudited) for the year 2007 and an excess of expenditure over income (Loss ) before tax of Rs 721,158,033 (audited) for the year 2006.

Mr.Ranatunga tabled the audit report during his speech in Parliament when the votes of the ministry of Sports as taken up before debate.

Mr.Ranatunga also accused a business mafia of trying to gain control of SLC and asked the Sports Minister to appoint persons who genuinely care for the game to cricket bodies.

The Minister Gamini Lokuge in his reply said that whatever decisions he has taken have been in the best interest of sports and not due to political reasons..