Touchwood Investments Ltd (TIL), the forestry investment company, recorded a 58% decline in profit for the six months ended 30 September 2009 to Rs.25.7 million compared to Rs.60.8 million the previous year.
According to the company's interim financial statements, revenue increased by 2% to Rs.426 million for the period under review. Despite declining in sales and marketing, administration and staff expenses, other operating expenses increased by 19% to Rs.303 million, contributing to the lower profit.
The notes to the financial statements says that pending adjudication of a court case filed by the company over an order by the Securities and Exchange Commission (SEC) in 2007 on the company's accounting practices, the accounts for the period under review have been prepared in the same manner as has been previously done.
It was the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) which in 2007 communicated to the Colombo Stock Exchange (CSE) that the estimates of fair value of biological assets used by TIL in its financial statements for the years ended 31 March 2005 and 31 March 2006 are 'clearly unreliable' and does not adhere to International Accounting Standard (IAS) 41.
TIL filed an application in the Court of Appeal against the SLAASMB and the SEC seeking to quash the SEC directive.