Annual Report 2012/2013 Ceylon and Foreign Trades PLC

Annual Report 2012/2013 Ceylon and Foreign Trades PLC 1

CONTENTS Page Contents 1 Corporate Information 2 Vision and Mission 3 Notice of Meeting 4 History & Present Status 4 Chairman’s Review 5 Directors’ Profile 6 Statement of Directors’ Responsibilities 7 Annual Report of the Board of Directors 7 Corporate Governance 10 Report of Audit Committee 11 Report of Remuneration Committee 12 Risk Management 12 Shareholders Information 13 Report of Auditors 15 Statement of Comprehensive Income 16 Statement of Financial Position 17 Statement of Changes in Equity 18 Statement of Cash Flow 19 Notes to the Financial Statements 20 Financial Highlights 54 Form of Proxy 55


CORPORATE INFORMATION

LEGAL FORM : A Public Company with Limited Liability Registered under the Companies Act No. 17 of 1982/No. 07 of 2007 and quoted on the Colombo Stock Exchange. DATE OF INCORPORATION : 28

th April 1949

REGISTRATION UNMBER : PQ 163 (New) DIRECTORS : Dr. S. A. Gulamhusein Dr. D. C. Gunasekera Mr. T. A. Gulamhusein Mr. I. Shabbir Mr. A. Y. Tyebkhan Dr. A. A. Shabbir Mr. L. W. W. Priyankara Mr. I. Zahir

REGISTERED ADDRESS : No. 414/18, K. Cyril C. Perera Mawatha, Colombo 13.

TELEPHONE : (94-11) 7608500, 7608551

TELEFAX : (94-11) 2447886

E-MAIL : [email protected]

WEB : www.cft.lk www.cftfmcg.lk

SUBSIDIARY COMPANIES : Colombo Freight & Transport Ltd ASSOCIATE COMPANY : On’ally Holdings PLC BANKERS : Sampath Bank PLC 110, Sir James Peiris Mawatha, Colombo 2. National Development Bank PLC 40, Nawam Mawatha, Colombo 2. Union Bank of Colombo PLC 15A, Alfred Place, Colombo 03. Habib Bank Limited 140-142,2

nd Cross Street, P.O.Box 1077,Colombo 11.

Bank of Ceylon Head office, Bank of Ceylon Mawatha,Colombo 01. AUDITORS : A. I. Macan Markar & Co. Chartered Accountants 46-2/1,2

nd Floor, Lauries Road,

Colombo 04. SECRETARIES : P W Corporate Secretarial (Pvt) Ltd. 3/17, Kynsey Road, Colombo 8. Tel : (94-11) 4640360

mailto:[email protected]

http://www.cft.lk/

http://www.cftfmcg.lk/


OUR VISION

OUR MISSION

To be the best in business, customer oriented, goals in

focus and enjoy confidence and satisfaction of all who

interact with us.

Continue diversification, improve performance and return

to shareholders.


NOTICE OF MEETING

NOTICE IS HEREBY GIVEN that the Sixty

Second Annual General Meeting of Ceylon and

Foreign Trades PLC will be held at the

Auditorium,3rd

Floor, “Olympic House”, 100/9F,

Independence Avenue, Colombo 07 on 21st

October 2013 at 4.00 p.m. for the following

purposes:

1. To receive and consider the Report of the Directors and the Statement of Accounts for the year ended 31

st March 2013 with the

Report of the Auditors thereon. 2. To re-elect Mr. Idris Shabbir who retires by

rotation in terms of Article 91 of the Articles of Association of the Company as a Director.

3. To re-elect Mr. Aliasger Shabbir who retires

by rotation in terms of Article 91 of the Articles of Association of the Company as a Director

4. To re-appoint Messrs. A I Macan Markar &

Co. as the Auditors of the Company, for the ensuing year and to authorize the Directors to determine their remuneration.

5. To authorise the Directors to determine

donations as they think fit for the ensuing year and up to the next Annual General Meeting.

By Order of the Board CEYLON AND FOREIGN TRADES PLC

(Sgd.)

P W CORPORATE SECRETARIAL (PVT) LTD

Director/Secretaries

5th September 2013

Colombo

Notes: 1 A member is entitled to appoint a Proxy to attend and vote instead of himself and a Proxy need not be a member of the Company. A Form of Proxy is enclosed for this purpose. The completed form of Proxy should be deposited at the Registered Office of the Company, not less than 48 hours before the time fixed for the commencement of the Meeting.

HISTORY AND PRESENT STATUS Ceylon & Foreign Trades PLC goes back to 1949, one year after the country gained independence from British rule, when a group of pioneering businessmen banded together to form this company. The Company which began operations by exporting traditional Ceylonese commodities gradually expanded and consolidated its status as an import/export house of repute. A major development following increasing activity of the Company was the broad basing of its ownership and It assumed the status of a Public Limited Liability Company in 1978. The Company’s major exports were Tea, Rubber and Coconut during the first and second phases of its operations which were also the major products of the Country.

During the last one and half decades CFT group diversified its operations to enter the field of spice and desiccated coconut exports. The export trade forms the backbone of the country’s economy and it is with justifiable pride that CFT could claim to be a stakeholder in the task of earning vital foreign exchange for the country for decades. An important facet of CFT’s operations not merely enabled it to gain a degree of domestic fame for its stability and reliability but also to establish itself as an export house of repute among overseas buyers on the basis of its honourable conduct in fulfilling its contractual obligations to its buyers worldwide.


HISTORY AND PRESENT STATUS ( Contd…)

PRESENT STATUS CFT, the flagship company has an associate which is a public quoted company, On’ ally Holdings PLC, owning and operating Unity Plaza, the well known computer mall in Colombo. The challenges impacting the business operations of CFT are numerous. Many of the fundamentals which historically characterize the movements of the products that we trade in have been over shadowed by the volatility and macroeconomic uncertainty emanating from the troubled regions of the world.

During the year the company continued with its CFT consumer division for import and distribution of FMCG products. CFT consumer is the sole agent for ARS brand pest control products, Parachute the world’s largest packaged coconut oil and Aquawipe a high quality wet wipe Range. We continue to look for more products to add to our range. We brought in an experienced marketing manager, for our marketing of Cement imported by us, and have been able to develop this division to yield useful profits. We continue to grow this business and be a participant in the growing infrastructure development of the country.

CHAIRMAN’S REVIEW It gives me great pleasure to welcome you to the Annual General Meeting of Ceylon and Foreign Trades PLC and to present you the Annual Report and financial statements for the year ended 31st March 2013 and to review the performance of the company during this period.

COMPANY PERFORMANCE During the period under review, the company recorded growth of 19 % in turnover even in the face of challenging circumstances for our export and import trading. Our diversification into import and marketing of cement contributed significantly to the company’s profitability. Apart from our agreement with Maple Leaf cement Factory Ltd Pakistan becoming sole importer of “Maple Leaf” brand cement in Sri Lanka, we also entered into an agreement with Dewan Cement Ltd, Karachi to import and market ADAM brand cement. CFT Consumer division, for FMCG import and distribution. The results were disappointing due to a long break in supplies from ARS as well as Marico, India.

PERFORMANCE OF SUBSIDIARIES AND ASSOCIATE The Associate Company On’ ally Holdings has made steady progress and contributed to your Company an income of dividends. The performance of On’ ally has been adequately documented in their Annual Report for the year under review. The consolidated group profit for the financial period ended 31st March 2013 before tax was Rs. 14.3 Million and consolidated group net profit for the same period was Rs. 12.6million. In conclusion, I wish to thank our customers who have placed their confidence in our products and services, our employees who have worked hard towards the progress of the Company, our Suppliers, our Bankers, our Auditors and our shareholders who have loyally stood with us for many years. (Sgd) S. A. Gulamhusein Chairman

5th September, 2013.


DIRECTORS PROFILE

Dr. S A Gulamhusein Chairman

Dr S A Gulamhusein is a widely experienced businessman and has been in business since 1973. He heads his family firm, which deals in Tea exports, Spices, Coconut products and IT related products, Manufacturing and exporting Garments, Import & distribution of Hardware etc. Dr Gulamhusein is a shareholder/Director of several companies and the Chairman of the Business Chamber of Commerce

Mr. T A Gulamhusein Director

Mr.T.A.Gulamhusein is a Director of Ceylon & Foreign Trades PLC since 1987. He has vast experience in the export trade and handles exports of spices as Managing Director of Spice of Life (Pvt) Ltd.

Dr D C Gunasekara Director

Mr.Darandranath Charith Gunasekara was Secretary General setting up the Colombo Stock Exchange and the Regulatory Authority and its law, as an Advisor to President J R Jayewardene. He was a Member of the Greater Colombo Economic Commission [1981-1985]. He set up the Stock Exchange System in Kenya and was advisor to the Privatization Minister of Uganda.

He has been awarded the “ Bourse de Bourses” medal by Paris Stock Exchange. Ha later set up the Real Estate Exchange Limited and was Advisor to the Ministry of Urban Development. He has since been recognized by the UN as one of the five best practices in affordable housing globally. He works as a social entrepreneur advisor.

Mr. I Shabbir Director

Mr Idris Shabir has been a Director of the Company since 1999. He has a Master’s Degree in Information Systems and Management from Aberdeen University, U.K. He is also a Director of several other export companies and presently engaged in the tea export trade.

Dr. A A Shabbir Director

Dr. Ali Asger Shabbir holds a PhD from Tokyo, Japan and a Degree from King’s College London, UK. Dr Shabbir was appointed a Director of Ceylon & Foreign Trades PLC in 2006 and presently runs several other companies. He specializes in the IT industry.

Mr. A Y Tyebkhan Director

Mr.Ai Tyebkhan is an international lawyer and legal consultant. He was legal counsel at Emirates National Oil Company in Dubai ans was a Solicitor and worked in the London and Brussels offices of leading International law firm Lovell.

Mr. Tyebkhan is qualified as a Solicitor in England & Wales and also a MA in Philosophy, Politics and Economics from the University of Oxford. Mr.Tyebkhan’s legal experience includes advising clients in the areas of corporate, commercial, banking and finance and EU law.

Mr.Tyebkhan is a co-founder and director of Legal Base and was appointed to the Board of Ceylon & Foreign Trades PLC in2006.

He also serves on the General Council of SLASSCOM, the ITBPO and knowledge services chamber of Sri Lanka.

Mr. L W W Priyankara Director

Mr. Waruna Priyankara was appointed a director of Ceylon & Foreign Trades PLC in January 2011. He counts over 10 year experience in the Financial Services, Trading & Manufacturing Sectors. He is an associate member of Institute of Certified Management Accountant of Sri Lanka and National Diploma Holder in Business & Finance.

Mr. I Zahir Director

Imran Zahir is a fellow Member of the Chartered Institute of Management Accountants – UK. He counts over a decade experience in Finance, Islamic Banking and Business. He was appointed to the board on 30th March 2012.


STATEMENT OF DIRECTORS’ RESPONSIBILITIES The Directors are responsible for ensuring that the Company keeps sufficient accounting records which disclose the financial position of the Company with reasonable accuracy and that the financial statements are prepared in conformity with the Sri Lankan Accounting Standards and comply with the provisions of the Companies Act No.7 of 2007. The Directors have adopted the going concern basis for the preparation of the financial statements.

The Directors are responsible for taking reasonable measures to safeguard the assets of the Company and in that regard maintain effective controls.

The Directors confirm that all statutory payments have been made up to date.

By order of the Board CEYLON AND FOREIGN TRADES PLC

(Sgd) S.A.Gulamhusein Chairman 5

th September, 2013.

ANNUAL REPORT OF THE BOARD OF DIRECTORS The Directors of Ceylon and Foreign Trades

PLC have pleasure in presenting to the

Shareholders their Report together with the

Annual Audited Accounts of the Company and

its subsidiaries for the year ended 31st March

2013.

For the year ended 31.03.2013 31.03.2012 Rs. Rs. Revenue 241,443,451 198,609,893 Net profit/(loss) before Taxation 7,183,625 22,363,626 Net Profit/ (loss) after Taxation 7,160,101 21,716,666 PRINCIPAL ACTIVITIES OF THE COMPANY AND ITS SUBSIDIARIES

Ceylon and Foreign Trades PLC

The principal activities of the Company are

exporters of Ceylon produce, manufactured

goods, Importers and Indent Agents.

West Coast Lanka (Pvt) Ltd

Importers & Distributors of house hold

insecticides, sanitary items, pharmaceuticals,

cosmetics and washing detergents.

Colombo Freight & Transport Limited The principal activities of the Company are functioning as Freight Forwarders. FINANCIAL PERFORMANCE The Company’s financial performance in the year 2012/2013 is set out in the Statement of Comprehensive Income, which appears on page 16 of this report. The Company’s profit after tax in the year under review was Rs.7,160,101/- STATE OF AFFAIRS The State of Affairs of the Company as at 31

st

March 2013 is set out in the Statement of Financial Position, which appears on page 17 of this report. AUDITORS REPORT The Report of the Auditors on the financial statements of the Company is given on page 15.. ACCOUNTING POLICIES The financial statements of the Company have been prepared in accordance with the revised Sri Lanka Accounting Standards and the policies adopted thereof are given on pages 20 to 31 figures pertaining to the previous periods have been re-stated where necessary to conform to the presentation for the year under review.


STATEMENT OF DIRECTORS' RESPONSIBILITY The Directors are responsible for preparing and presenting the financial statements of the Company and Group to reflect a true and fair view of the state of its affairs. The Directors are of the view that these Financial Statements have been prepared in conformity with the requirements of the Sri Lanka Accounting Standards, the Companies Act No. 7 of 2007 and the Listing Rules of the Colombo Stock Exchange. DIRECTORS The names of the Directors who held office as at the end of the accounting period are given below: Executive Directors

Dr. S A Gulamhusein – Chairman Mr. L W W Priyankara

Non Executive Directors

Mr. T A Gulamhusein

Mr. I Shabbir

Mr. A Shabbir

Independent Non Executive Directors

Dr. D C Gunasekera

Mr. A Y Tyebkhan

Mr. I Zahir

Mr. Idris Shabbir and Mr. Aliasger Shabbir

retire by rotation at the Annual General Meeting

in terms of Article 91 of the Articles of

Association and being eligible offers

themselves for re-election.

INTERESTS REGISTER

The Company maintains an Interests Register

in terms of the Companies Act, No.7 of 2007,

and the names of Directors who were directly

or indirectly interested in a contract or a related

party transaction with the Company during the

accounting period under review are given in

Note 31 to the Financial Statements on page

47.

REMUNERATION TO DIRECTORS

The total emoluments of the Directors during

the year under review amounted to Rs.

660,000/-

AUDITORS

Messrs. A I Macan Markar & Company,

Chartered Accountants, served as the auditors

during the year under review. Based on the

written representation made by the auditors,

they do not have any interest in the Company

other than as auditors and tax consultants.

The audit fee payable to the auditors for the

year under review is Rs.140,000/-

The auditors have expressed their willingness

to continue in office. A resolution to re-appoint

the auditors and to authorize the Directors to

determine their remuneration will be proposed

at the Annual General Meeting.

STATED CAPITAL

The Stated Capital of the Company is Rs.

14,119,600/- divided into 140,196,000 Ordinary

Shares as at 31st March 2013.

DIRECTORS’ SHAREHOLDINGS

The number of shares of the Company held by each of the Directors is set out in the table below: Number of Shares held

As at 31.03.2013 31.03.2012 Dr.S A Gulamhusein 28,232,200 31,632,200 Mr.T A Gulamhusein 260,000 260,000 Mr. I Shabbir 44,209,200 44,209,200 Mr. A Shabbir 14,569,000 11,069,000 Mr. A Y Tyebkhan 10,000 10,000 Dr. D C Gunasekera 10,000 10,000 Mr. L W W Priyankara - - Mr. I Zahir - - MAJOR SHAREHOLDERS, DISTRIBUTION

SCHEDULE AND OTHER INFORMATION

Information on the twenty largest shareholders

of the Company, distribution schedule of the

number of shareholders, percentage of shares

held by the public, market values per share as

per the Listing Rules of the Colombo Stock

Exchange are given under investor information.


RESERVES

The movements of reserves during the year are

given under the statement of changes in equity

on page 18.

CAPITAL EXPENDITURE

The total capital expenditure during the year

including the capitalization of borrowing cost

amounted to Rs.73,000/- compared to Rs

6,774,565/- incurred in the previous year.

Details of movements in property, plant and

equipment are given under notes 07. of the

Financial Statements.

PUBLIC HOLDINGS

17.17% of the issued shares of the Company is

held by the public.

DONATIONS

The Company has not made any donations

during the period under review.

POST BALANCE SHEET EVENTS

The Post Balance Events have been made up

to the date of the Auditors Report. No events

have occurred since the Balance Sheet date,

which would require adjustments to, or

disclosure in the Financial Statements.

CORPORATE GOVERNANCE

The Directors confirm that the company

complies with the Listing Rules of the Colombo

Stock Exchange on Corporate Governance.

An Audit Committee and a Remuneration

Committee function as Board Sub-Committees

with Directors who possess the requisite

qualifications and experience. The composition

of the said Committees is as follows;

Audit Committee

Mr. A Y Tyebkhan – Chairman

Mr. I Shabbir

Dr. D C Gunasekera

Mr. I Zahir

Remuneration Committee

Mr. A Y Tyebkhan – Chairman

Mr. T A Gulamhusein

Dr. D C Gunasekera

Mr. A Shabbir

Mr. I Zahir

STATUTORY PAYMENTS

All statutory payments due to the Government

of Sri Lanka and on behalf of the employees

have been made or accrued for at the balance

sheet date.

GOING CONCERN

The financial statements are prepared on going

concern principles. After making adequate

enquiries from management, the Directors are

satisfied that the Company has adequate

resources to continue its operations in the

foreseeable future.

ANNUAL GENERAL MEETING

The Annual General Meeting of the Company

will be held at the Auditorium,3rd

Floor,

“Olympic House”, 100/9F, Independence

Avenue, Colombo 07 on Monday 21st October

2013 at 4.00 p.m..The Notice of the Annual

General Meeting appears on page 04.

BY ORDER OF THE BOARD CEYLON AND FOREIGN TRADES PLC (Sgd) Dr. S A Gulamhusein Chairman (Sgd) Dr. A A Shabbir Director (Sgd) P W CORPORATE SECRETARIAL (PVT) LTD Director/Secretaries 5

th September 2013.

Colombo


CORPORATE GOVERNANCE Being a Quoted Public Company, the Board of Directors are committed to adopt the accepted practices in every sphere of activity and guided by the regulations issued by relevant Governing Authorities. The Board of Directors The names and the profile of the members of the Board of Directors are given under ‘Profile of Directors’ section of this Annual Report. The Board collectively decides on the appointment on Directors. The Directors so appointed retire at the Annual General Meeting that follows and seek re election from the shareholders. The other directors to retire and seek re election at the appropriate years. The Directors possess vast experience and expertise in managing the varied business interests of the Company. Most of them carry many years of commercial experience at the highest level. The Board is responsible for the overall strategic planning, policy decision and control. All plans and strategies proposed are examined and fully discussed at meetings of Directors. Circular resolutions are also adopted by the Board from time to time on matters of routine importance. Meeting of the Board of Directors At present the Board meets whenever necessary and during the year they met on 6 occasions, to discuss and approve the quarterly financial statements. Further, approvals relating to key appointments, capital expenditure and enhancement of facilities are approved at the Board Meetings. Going Concern The Directors believe, having reviewed the Financial Statements and all other related information, the Company has adequate resources to continue in operation in the foreseeable future.

Disclosure of Information and Compliance The Board of Directors endeavor to ensure that the business practices of the Company comply with laws and regulations of the country. Additionally, checks and controls are in place to ensure that the Policies of the Board are complied with. Non-Executive and Independent Directors Out of the 06 Non-Executive Directors, 03 Directors are Independent Directors, complying with the requirements of Corporate Governance. Audit Committee

The Audit Committee consists of 04 Non-Executive Directors, namely Mr A Y Tyebkhan, Dr D C Gunasekera, Mr. I. Zahir and Mr I Shabbir of which the first three are Independent Directors. The Audit Committee is chaired by Mr A Y Tyebkhan. Remuneration Committee

The Remuneration Committee consists of 05 Non-Executive Directors, namely Mr A Y Tyebkhan, Mr T A Gulamhusein, Dr D C Gunasekera, Mr A A Shabbir and Mr.I Zahir of which Mr A Y Tyebkhan, Dr D C Gunasekera and I Zahir are Independent.The Remuneration Committee is chaired by Mr A Y Tyebkhan. Financial Statements

The Board of Directors requires that the Financial Statements of the Company are prepared in accordance with both the Sri Lanka Accounting Standards and the requirements of the Colombo Stock Exchange. Adequate information is provided to shareholders and disclosed fully subject only to any sensitive information, which affect directly on the business of the Company. Internal Control Functions relating to various operations are clearly defined and officers are assigned to undertake such functions in such a manner that no operation is carried out fully by a single officer. Procurement of major inputs and capital items and disposal of redundant and sundry items are handled by two or more senior officers under the guidance of the Directors.


CORPORATE GOVERNANCE (Contd…)

Secretaries to the Board P W Corporate Secretarial (Pvt) Ltd are the Secretaries to the Company and they are qualified to act as Secretaries as per the provision of the Companies Act No: 07 of 2007.

By order of the Board CEYLON AND FOREIGN TRADES PLC (Sgd) Dr S A Gulamhusein Chairman 5

th September 2013

REPORT OF AUDIT COMMITTEE The Audit Committee of the Company comprises of 04 Non-Executive Directors as given below. Committee Members Status & Position Mr A Y Tyebkhan Non-Executive & Independent Chairman Mr I Shabbir Non-Executive Member Dr D C Gunasekera Non-Executive & Independent Member Mr. I. Zahir Non-Executive & Independent Member 1. Tasks

The committee reviews the reporting system adopted by the Company in preparation and presentation and adequacy of disclosures in the interim and Annual Financial Statements to ensure reliability, consistency of the accounting policies and methods followed to their compliance with the Sri Lanka Accounting Standards, Companies Act and Colombo Stock Exchange listing rules.

The Committee also reviews the adequacy of the internal controls currently practiced and recommends improvements.

2. Internal Controls The Internal Audit Unit periodically reviews the methods and effectiveness of financial controls that are currently in place to provide reasonable assurance to the Board of Directors.

3. External Audit The Audit Committee, upon reviewing the independence and performance of the External Auditors, recommends to the Board that M/S A I Macan Markar & Company be re-appointed as the External Auditors for the year ending 31

st March 2014.

4. Compliance with law and regulation The committee reviews the quarterly compliance reports to ensure that the Company has complied with the all statutory requirements. 5. Meetings The audit committee met five times during the year. The attendance of the members at these meeting is as follows. Mr A Y Tyebkhan 4/5 Mr I Shabbir 4/5 Dr D C Gunasekera 0/5 Mr. I. Zahir 3/5 Conclusion The Audit Committee meet periodically with the representatives of the Management to ensure that the affairs of the company are managed in accordance with its policies and that the Company’s assets are properly accounted and adequately safeguarded.

A Y Tyebkhan Chairman Audit Committee 5

th September 2013

Colombo


REPORT OF REMMUNERATION COMMITTEE The Remuneration Committee of the Company comprises of 05 Non-Executive Directors as given below.

Committee Member Status & Position Mr A Y Tyebkhan Non-Executive &

Independent Chairman Mr T A Gulamhusein Non-Executive Member Dr D C Gunasekera Non-Executive & Independent Member Mr A Shabbir Non-Executive Member Mr. I. Zahir Non-Executive & Independent Member

The Committee lay down guidelines and parameters for determining the compensation package of Directors and Senior Executive staff. The primary objective of the committee is to attract and retain qualified, experienced and dedicated staff and reward performance. The Chairman assists this committee in its deliberations. (Sgd) A Y Tyebkhan Chairman Remuneration Committee 05

th September 2013

Colombo

RISK MANAGEMENT The board of directors recognizes risk management as a key area that contributes towards safeguarding the interest of the stakeholders. Risk management form integral part of the business and does not limit its scope only to compliance requirements. Adopting a fair approach to provide a reasonable assurance that the company risk exposure is mitigated to the possible extent. BUSINESS RISK Low return due to resources limitation by nature, E.g. Low harvest In Coconut industry during first few month of the year. Mitigation action taken to backward integration. Implementation of the cost control procedures and cost saving initiatives will reduce the risk in reduction in budgeted profitability and inadequate of cash flows. FINANCIAL RISK Movement in the Sri Lankan & US currencies affects our market price. However we carry out valuation exercise in order to minimize the risk occurring. The company is in a position to take advantage of relative low interest rate whilst obtaining low interest USD facilities to settle high interest borrowings.

MARKET RISK We are facing severe competition from the Philippines, Vietnam, and Indonesia in our export market due to the scarcity of pure coconut. We are insisting in getting pure coconut to export market resulting gaining even greater recognition. LEGAL RISK Changing the government’s policies on taxes and duties could have impact on the company’s business. Awareness of those duty and tax structures and action will be taken to the minimize the cost. Non performance of legal obligations and non compliance with regulatory requirement will have a negative impact on the reputation of the company. Implementation of an effective Corporate Governance Framework and proper monitoring mechanism will minimize the non compliances. OPERATIONAL RISK Conduct periodic internal audit reviews which report to the Audit committee of the company. Working out business continuity plans and appropriate insurance covers to prevent losses due to fraud, human errors, inefficient processes, natural perils and loss of sensitive information.


TWENTY MAJOR SHAREHOLDERS OF THE COMPANY 31ST MARCH 2013

Name No. of Shares %

Mr.G I Shabbir 44,209,200 31.534

Commercial Bank of Ceylon PLC/ Spice of Life (Pvt)Ltd 10,000,000

Seylan Bank PLC/ Spice of Life (Pvt) Ltd 9,980,000 28,832,000 20.565

Spice of Life (Pvt) Ltd 8,852,000

Union Bank of Colombo LPLC/Dr. S H A Gulamhusein 15,200,000

Dr. S H A Gulamhusein 13,032,200

Mr. G H A A Shabbir 12,515,822

Pan Asia Banking Corporation PLC/Mr. G H A A Shabbir 2,053,178

Dr. H G De Silva (Deceased) 1,400,000 0.999

Mr. C R De Silva (Deceased) 1,200,000 0.856

Merchant Bank of Sri Lanka PLC A/C No 01 905,400 0.646

Bank of Ceylon No 1 Account 830,100 0.592

Mr. K C Thangarajah (Deceased) 800,000 0.571

Mr. V Ratnavale 800,000 0.571

Mr. A W Prathalingam 800,000 0.571

Dr. L K Amarasuriya 800,000 0.571

Ms. R C Wijesekera 533,200 0.380

Mr. D W Wickramaratne (Deceased) 450,000 0.321

Mr. P S Jayaratne 419,800 0.299

Mrs. C C Gunawardana 400,000 0.285

Mr. S R De Silva (Deceased) 400,000 0.285

First Capital Markets Limited/ Mrs. S S De Fonseka 349,900 0.250

Mr. Mariapillai Radhakrishnan ( Deceased) 288,800 0.206

Emerging Markets Investment Management (Pvt) Limited 278,950 0.199

Sub Total 126,498,550 90.230

Others 13,697,450 9.770

Grand Total 140,196,000 100.00

DISTRIBUTION OF SHAREHOLDINGS AS AT 31ST MARCH 2013

From ToNo of Shareholders No of Shares %

1 - 1,000 786 334,709 0.24

1,001 - 10,000 591 2,541,799 1.81

10,001 - 100,000 188 6,330,398 4.52

100,001 - 1,000,000 41 12,546,694 8.95

Over 1,000,000 10 118,442,400 84.48

1,616 140,196,000 100.00

ANALYSIS OF SHAREHOLDERS AS AT 31ST MARCH 2013

Category No of Shareholders No of Shares %

Local Individuals 1,537 88,301,837 62.98

Local Institutions 55 51,326,018 36.61

Foreign Individuals 24 568,145 0.41

Foreign Institutious 0 0 0.00

1,616 140,196,000 100.00

28,232,200 20.138

14,569,000 10.392

SHAREHOLDERS INFORMATION


DIRECTORS SHAREHOLDING AS AT 31 ST MARCH 2013

Name of Directors As at 31 March 2013 % As at 31 March 2012 %

Dr. S H A Gulamhusein 13,032,200

Union Bank of Colombo Ltd/

Mr.S H A Gulamhusien

Mr. T A Gulamhusein 260,000 0.185 260,000 0.185

Mr.G I Shabbir 44,209,200 31.534 44,209,200 31.534

Mr. G.H.A A Shabbir 12,515,822

Pan Asia Banking Corporation

PLC/ Mr.G H A A Shabbir

Mr. A Y Tyebkhan 10,000 0.007 10,000 0.007

Dr. D C Gunasekera 10,000 0.007 10,000 0.007

Mr. L.W.W. Priyankara - - - -

Mr. I. Zahir - - - -

87,290,400 62.264 87,190,400 62.192

The Public Holding Percentage - 17.17%

MARKET PRICE PER SHARE

As at 31 Mar 2013 As at 31 Mar 2012

Highest During the Year Rs. 9.20 (19/09/2012) Rs.13.60 (26/05/2011)

Lowest During the Year Rs. 4.00 (01/06/2012) Rs. 5.50 (15/02/2012)

As at end of the Year Rs. 5.10 Rs. 6.40

Key Ratios

31 Mar 2013 31 Mar 2012 31 Mar 2013 31 Mar 2012

Rs Rs Rs Rs

Earning Per Share (Rs.) 0.09 0.27 0.05 0.15

Net Assets Per Share(Rs.) 6.32 6.24 4.25 4.21

Current Ratio 0.95 0.91 1.03 1.00

10.392 11,069,000 7.895

20.138 31,632,200 15,200,000

2,053,178 14,569,000

Group Company

28,232,200 22.563



STATEMENT OF COMPREHENSIVE INCOME

The notes from page 20 to 50 form an integral part of these Financial Statements.

Figures in brackets indicate deductions

For the Year ended Notes *Restated *Restated

31 Mar 2012 31 Mar 2012

Rs Rs Rs Rs

Revenue 01 241,443,451 202,232,390 241,443,451 198,609,893

Cost of Sales (203,668,389) (164,185,869) (203,668,389) (150,315,578)

Gross Profit 37,775,062 38,046,522 37,775,062 48,294,315

Other Income 02 25,536,435 38,544,016 34,430,426 47,028,956

Selling and Distribution Expenses (11,101,304) (12,363,870) (10,244,322) (9,846,376)

Administrative Expenses (25,722,895) (34,850,574) (25,548,451) (30,573,534)

Results from Opertaing Activities 03 26,487,298 29,376,093 36,412,716 54,903,362

Net Finance Cost (29,378,346) (33,481,975) (29,229,091) (32,539,735)

Profit After Finance Cost (2,891,048) (4,105,882) 7,183,625 22,363,626

Share of Associate Company's Profit 17,193,791 39,252,477 - -

Profit Before Tax 14,302,743 35,146,596 7,183,625 22,363,626

Tax Expense 05 (1,618,237) (5,042,688) (23,525) (646,960)

Profit for the Year 12,684,507 30,103,908 7,160,101 21,716,666

Other Comprehensive Income :

Defined benefit plan actuarial gains (losses) 177,517 (74,179) 177,517 (74,179)

177,517 (74,179) 177,517 (74,179)

Total Comprehensive Income for the Year 12,862,024 30,029,729 7,337,618 21,642,488

Profit Attributable to:

Equity Holders of The Company 13,275,353 38,376,046 - -

Non Controlling Interest (590,847) (8,272,138) - -

Profit for the year 12,684,507 30,103,908 - -

Total Comprehensive Income Attributable to:

Equity Holders of The Company 13,452,871 38,301,867 - -

Non Controlling Interest (590,847) (8,272,138) - -

Profit for the year 12,862,024 30,029,729 - -

Earnings per share - basic 06 0.09 0.27 0.05 0.15

Earnings per Share - basic

(Exclusive of fair value gain) 06 0.03 0.16 (0.01) 0.04

Other Comprehensive Income for the Year

(Net of Tax)

31 Mar 2013 31 Mar 2013

Group Company


As At Notes

31 Mar 2012 01 Apr 2011 31 Mar 2012 01 Apr 2011

Rs Rs Rs Rs Rs Rs

Assets

Property, Plant & Equipment 7 556,283,842 560,508,068 319,356,150 554,389,427 557,632,226 315,490,723

Intangible Assets 8 85,000 127,500 - 85,000 127,500 -

Other Investments 9 50,628,720 41,000,000 - 50,628,720 41,000,000 -

Investments in Subsidiaries 10 - - - 1,614,500 1,614,500 1,614,500

Investment in Associates 11 356,617,591 349,915,103 323,779,368 50,944,180 50,944,180 51,590,852

Non Current Assets 963,615,153 951,550,671 643,135,518 657,661,827 651,318,405 368,696,075

Inventories 13 36,623,382 43,565,578 39,280,768 36,623,382 43,565,578 22,009,707

Trade & Other Receivables 14 94,861,650 71,485,237 36,344,361 88,516,687 64,030,771 10,705,781

Amount Due from Related 15 13,121,994 7,802,264 10,826,259 29,965,107 26,277,114 26,403,996

Companies

Income Tax Refund Due 16 1,786,817 623,607 3,118,464 3,670,043 2,506,833 5,688,337

Short Term Investments 12 36,409,954 31,417,276 40,994,927 36,356,914 31,366,836 40,901,717

Cash & Cash Equivalents 17 7,213,592 5,683,998 6,108,258 7,059,105 4,612,800 5,158,577

Current Assets 190,017,390 160,577,960 136,673,037 202,191,238 172,359,931 110,868,114

Total Assets 1,153,632,543 1,112,128,631 779,808,556 859,853,065 823,678,337 479,564,189

Equity

Stated Capital 18 14,119,600 14,119,600 14,119,600 14,119,600 14,119,600 14,119,600

Revaluation Reserve 19 542,095,635 542,095,635 304,600,835 542,095,635 542,095,635 304,600,835

Revenue Reserve 20 1,236,701 1,236,701 1,236,701 1,077,447 1,077,447 1,077,447

Other reserves 214,591 37,073 111,252 214,591 37,073 111,252

Retained Profits 336,912,001 324,859,328 286,483,282 38,700,732 32,763,311 11,046,645

Non Controling Interest (7,899,941) (7,309,094) 963,044 - -

Total Equity 886,678,587 875,039,243 607,514,714 596,208,004 590,093,066 330,955,779

Liabilities

Interest Bearing Borrowings 21 66,351,106 60,355,903 55,355,199 66,351,105 60,355,902 55,355,197

Deferred Tax Liabilities 22 131,421 107,896 494,165 (130,170) (153,695) (19,086)

Defined Benefit Plans 23 471,567 466,505 347,302 252,286 247,224 134,864

Non Current Liabilities 66,954,094 60,930,305 56,196,666 66,473,221 60,449,432 55,470,976

Trade & Other Payables 24 72,732,926 38,489,744 26,772,548 71,439,423 37,001,017 23,851,225

Income Tax Payable - - - - -

Interest Bearing Borrowings 21 70,654,173 71,661,663 42,699,224 70,654,173 71,661,663 27,677,711

Amounts Due to Related 25 20,850,246 20,848,946 20,446,092 19,315,727 19,314,427 18,911,573 Companies

Bank Overdraft 17 35,762,516 45,158,731 26,179,313 35,762,516 45,158,731 22,696,925

Current Liabilities 199,999,862 176,159,084 116,097,177 197,171,839 173,135,838 93,137,435

Total Liabilities 266,953,955 237,089,389 172,293,842 263,645,060 233,585,270 148,608,411

Total Equity and Liabilities 1,153,632,542 1,112,128,632 779,808,556 859,853,065 823,678,337 479,564,189

330,955,779 Total Equity Attributable to

Equity Holders of the

Parent

894,578,528 882,348,337 606,551,670 596,208,004 590,093,066

31 Mar 2013*Restated

31 Mar 2013*Restated

Group Company

STATEMENT OF FINANCIAL POSITION

I certify that these financial statements have been prepared in compliance with the requirements of the Company act No. 07 of 2007.

(Sgd)

L.W.W. Priyankara

Director/Group Accountant

The Board of Directors is responsible for the preparation and presentation of these financial statements. (Sgd) (Sgd) S.A. Gulamhusein A.A. Shabbir Chairman Director 5

th September 2013


Group

Stated Revaluation Revenue Retained Other Non Controlling Total

Capital Reserve Reserve Profits Reserves Interest

Rs Rs Rs Rs Rs Rs

Balance at 1st April 2011 14,119,600 304,600,835 1,236,701 286,483,282 - 963,044 607,403,462

Impacts of change in accounting policies - - - - 111,252 - 111,252

Restated Balance at 1st April 2011 14,119,600 304,600,835 1,236,701 286,483,282 111,252 963,044 607,514,714

Current Year Profit/(Loss) - - - 30,103,908 - - 30,103,908

Minority interest - - - 8,272,138 - (8,272,138) -

Other comprehensive income - - - - (74,179) - (74,179)

Total comprehensive income for the year - - - 38,376,046 (74,179) (8,272,138) 30,029,729

Revaluation Reserve - 237,494,800 - - - - 237,494,800

Total contribution by and distribution to

the owners of the company - 237,494,800 - - - - 237,494,800

Restated Balance at 31st March 2012 14,119,600 542,095,635 1,236,701 324,859,328 37,073 (7,309,094) 875,039,243

Balance at 1st April 2012 14,119,600 542,095,635 1,236,701 324,859,328 37,073 (7,309,094) 875,039,243

Impacts of change in accounting policies - - - - - - -

Restated Balance at 1st April 2012 14,119,600 542,095,635 1,236,701 324,859,328 37,073 (7,309,094) 875,039,243

Current Year Profit/(Loss) - - - 12,684,507 - 12,684,507

Non controlling Interest - - - 590,847 - (590,847) -

Other comprehensive income - - - 177,517 - 177,517

Total comprehensive income for the year - - - 13,275,353 177,517 (590,847) 12,862,024

Dividends - - - (1,222,680) - - (1,222,680)


the owners of the company ` - - (1,222,680) - - (1,222,680)

Restated Balance at 31st March 2013 14,119,600 542,095,635 1,236,701 336,912,001 214,591 (7,899,941) 886,678,587

Company

Stated Revaluation Revenue Other Retained Total

capital reserve reserve Reserves profits

Rs Rs Rs Rs Rs

Balance at 1st April 2011 14,119,600 304,600,835 1,077,447 - 11,046,645 330,844,527

Impacts of change in accounting policies - - - 111,252 - 111,252

Restated Balance at 1st April 2011 14,119,600 304,600,835 1,077,447 111,252 11,046,645 330,955,779

Current Year Profit/(Loss) - - - - 21,716,666 21,716,666

Other comprehensive income - - - (74,179) - (74,179)

Total comprehensive income for the year - - - (74,179) 21,716,666 21,642,488

Revaluation Reserve - 237,494,800 - - - 237,494,800


the owners of the company - 237,494,800 - - - 237,494,800

Restated Balance at 31st March 2012 14,119,600 542,095,635 1,077,447 37,073 32,763,311 590,093,066

Balance at 1st April 2012 14,119,600 542,095,635 1,077,447 37,073 32,763,311 590,093,066

Impacts of change in accounting policies - - - - - -

Restated Balance at 1st April 2012 14,119,600 542,095,635 1,077,447 37,073 32,763,311 590,093,066

Current Year Profit/(Loss) - - - 7,160,101 7,160,101

Other comprehensive income - - - 177,517 - 177,517

Total comprehensive income for the year - - - 177,517 7,160,101 7,337,618

Dividends - - - - (1,222,680) (1,222,680)


the owners of the company - - - - (1,222,680) (1,222,680)

Restated Balance at 31st March 2013 14,119,600 542,095,635 1,077,447 214,591 38,700,732 596,208,004

STATEMENT OF CHANGES IN EQUITY For the Year ended 31st March 2013

The notes annexed form an integral part of these Financial Statements.

Figures in brackets indicate deductions


For the Year ended

31 Mar 2013 31 Mar 2012 31 Mar 2013 31 Mar 2012

Rs Rs Rs Rs

Cash Flow from Operating Activities

Profit/(Loss) for The Year Before Tax 14,302,743 35,146,596 7,183,625 22,488,925

Adjustments for:-

Provision for Gratuity / (Over provision) 182,579 104,525 182,579 (27,616)

Dividend Income (2,322,306) (893,427) (11,218,898) (9,633,018)

Differed tax reversal - (251,661) - -

Share of Associates Company Profits (17,193,791) (39,252,477) - -

Provision for Fall in Value of Shares - - - -

Unrealized gain /(loss)from share investments (2,236,884) 16,219,433 (2,234,284) 16,196,683

Fair value gain on investment property (8,600,000) (15,933,149) (8,600,000) (15,933,149)

Fair value gain on short term investments (2,990)

Unclaimed ESC written off - 2,616,950 - 3,825,173

Interest Income - (1,485) - (1,485)

Lease and Loan Interest Charge 23,257,052 13,808,236 21,487,512 13,491,895

Software amortization 42,500 42,500 42,500 42,500

FD interest (114,101) (163,562) (114,101) (163,562)

Depreciation of Property, Plant & Equipment 4,032,851 3,134,770 3,051,424 2,127,863

Operating Profit before Working Capital Changes 11,350,643 14,574,259 9,780,359 32,414,208

(Increase)/Decrease in Inventories 6,942,196 (4,284,810) 6,942,196 (21,555,871)

(Increase)/Decrease in Trade & Other Receivables (23,376,413) (34,977,314) (24,485,916) (53,161,428)

(Increase)/Decrease in Amount Due from Subsidiaries (5,319,730) 3,023,995 (3,687,993) 126,882

Increase/(Decrease) in Trade & Other Payables 34,243,182 10,617,196 33,838,405 12,049,792

Increase/(decrease) in investments in associate companies - - - 646,672

Increase/(Decrease) in Amount Due to Subsidiaries 1,300 1,502,854 601,300 1,502,854

23,841,179 (9,543,820) 22,988,350 (27,976,891)

Gratuity Payments - (59,501) - (59,501)

Tranferred to WHT 2,980,357 2,980,357

Tax Paid (109,547) - (109,547)

ESC paid (528,341) - (528,341) (503,000)

With holding tax & Income Tax Payments (3,505,679) (922,237) (3,505,679) (922,237)

Interest paid (23,257,052) (13,288,523) (21,487,512) (12,972,181)

Net Cash Flow from Operating Activities (579,084) (23,814,080) 337,627 (42,433,810)

Cash Flow from Investment Activities

Interest Received 114,101 1,485 114,101 1,485

Proceeds From Disposal of PPE - - - -

Dividend Paid (1,222,680) (1,222,680)

Dividend Received 11,218,898 9,633,018 11,218,898 9,633,018

(Increase)/Decrease in Investment (2,755,794) (6,638,792) (2,755,794) (6,661,802)

Investment in fixed deposits (270,220) (3,000,000) (270,220) (3,000,000)

Vehicle disposal 264,375 264,375

Acquisition of Investment property (758,500) (22,066,851) (758,500) (22,066,851)

Acquisition of Intangible asset - (170,000) - (170,000)

Acquisition of Property, Plant & Equipment (73,000) (934,514) (73,000) (917,191)

Cash Flow from Investment Activities 6,517,179 (23,175,655) 6,517,179 (23,181,342)

Cash Flow from Financing Activities

Lease Instalment Paid (1,777,123) (2,181,373) (1,777,123) (2,181,373)

Loans Received (Net) 57,724,834 108,917,221 57,724,834 108,917,221

Loan/ Prepayments/other movement net (50,959,998) (79,149,792) (50,959,998) (64,128,279)

Cash Flow from Financing Activities 4,987,714 27,586,056 4,987,713 42,607,569

Net Change in Cash & Cash Equivalents 10,925,809 (19,403,679) 11,842,519 (23,007,582)

Cash & Cash Equivalents at the Beginning of the year (39,474,733) (20,071,055) (40,545,931) (17,538,348)

Cash & Cash Equivalents at end of the year (Note 17) (28,548,924) (39,474,733) (28,703,411) (40,545,931)

Group Company

STATEMENT OF CASH FLOWS

The notes annexed form an integral part of these Financial Statements. Figures in brackets indicate deductions


NOTES TO THE FINANCIAL STATEMENTS (Contd…)

ACCOUNTING POLICIES

01. Corporate Information

01.1.Corporate Information

Ceylon & Foreign Trades PLC is

incorporated on April 28, 1949 and

domiciled in Sri Lanka. The registered

office is at No. 414/18, K.Cyril C. Perera

Mawatha, Colombo 13. The shares of the

Company have a primary listing on the

Colombo Stock Exchange.

The Consolidated Financial Statements of

the Company for the year ended March

31, 2013 comprised the Company (Parent

Company) and its subsidiaries (together

referred to as the “group”) and the group

interest in its Associates.

Ceylon Foreign & Trades PLC does not

have an identifiable parent of its own.

The Consolidated Financial Statements

have been approved for issue by the

Board of Directors on 5th September

2013.

01.2 Principal Activities and Nature of

Operations

Company

The principal activities of the Company are

exporters of Sri Lankan produce,

manufactured goods, and importers &

indent Agent and there were no significant

changes in the nature of the operation of

the company during the financial year

under review.

Subsidiaries

Colombo Freight & Transport Limited

No operations during the year.

West Cost Lanka (Private) Limited

No operations during the year.

Associates

On’ ally Holdings PLC

Owners of Unity Plaza, specializing in

renting out prime office and shop space. It

is an associate Company of Ceylon &

Foreign Trades PLC.

02. Basis of Preparation

02.1 Statement of Compliance

The Consolidated Financial Statements are

prepared in accordance and comply with Sri

Lanka Accounting Standards

(SLFRS/LKAS) laid down by The Institute of

Chartered Accountants of Sri Lanka

(ICASL) and in compliance with the

Companies Act No. 07 of 2007. These are

the Group’s first financial statements

prepared in accordance with

SLFRSs/LKASs and SLFRS 1 First-time

Adoption of Sri Lanka Accounting

Standards has been applied.

An explanation of how the transition to

SLFRS/LKAS has affected on the reported

financial position and statement of other

comprehensive income of the Group is

provided in note 35.

The financial statements of the subsidiaries,

West Coast Lanka (Pvt) Ltd and CFT

Transport (Pvt) Ltd have been prepared on

the basis that they are non going concern

entities.

02.2 Use of Estimates and Judgement

The preparation of the financial statements

in conformity with SLFRSs/LKASs requires

management to make judgments, estimates

and assumptions that affect the application

of accounting policies and the reported

amounts of assets, liabilities, income and

expenses. Actual results may differ from

these estimates.

Estimates and underlying assumptions are

based on historical experience and various

other factors that are believed to be

reasonable under the circumstances, the



results which form the basis of making the

judgments about the carrying amount of

assets and liabilities that are not readily

apparent from other sources. Estimates and

underlying assumptions are reviewed on an

on-going basis. Revisions to accounting

estimates are recognized in the period in

which the estimates are revised and in any

future periods affected. Information about

critical judgments in applying accounting

policies that have the most significant effect

on the amounts recognized in the financial

statements are included in the following

notes to these financial statements.

Critical Accounting

Estimates/

Judgments

Note

Revaluation of Land

& Building 07

Retirement Benefit

Obligation 23

Deferred tax assets &

Liabilities 22

Useful lives of PPE 06 – Accounting

policies

Useful life of

Intangible assets

06.1 – Accounting

policies

02.3 Basis of Measurement

The financial statements of the Group have

been prepared on the historical cost basis

with no adjustments being made for

inflationary factors affecting the Financial

Statements, except for the following

material items in the statement of financial

position,

Available-for-sale financial assets are

measured at fair value

The liability for defined benefit obligations

is measured at the present value of the

defined benefit obligation

Lands and buildings are stated at

revalued amount

02.4 Functional and presentation currency

The functional currency is the currency of

the primary economic environment in which

the group operates. The financial

statements are presented in Sri Lankan

Rupee (Rs.), which is the functional

currency and the Group’s presentation

currency. All financial information presented

in Rupee has been rounded to the nearest

Rupee unless stated otherwise.

02.5 Comparative Information

Previous period figures and notes have been restated and reclassified wherever necessary to conform to the current year’s presentation. The Group has applied the exception given by the Institute of Chartered Accountants of Sri Lanka in applying comparative figures for SLFRS 7-Financial Instruments Disclosures. Accordingly the comparative disclosure required by paragraph 31-42 (Nature and extent of risk arising from Financial Instruments) will not be disclosed for comparative period due to difficulty of gathering such information.

02.6 New Accounting Standards issued but

not Effective at Financial Position Date

Application of SLFRS 9 - Financial Instruments, SLFRS 10-Consolidated Financial Statements, SLFRS 11-Joint venture Arrangements, SLFRS 12-Disclosure of Interest in other entities & SLFRS 13-Fair value Measurement. The International Accounting Standard Board has issued SLFRS 10, 11, 12 & 13 with effect from 1 January 2013. The Institute of Chartered Accountants of Sri Lanka decided to defer the application of above standards of SLFRS 10, 11, 12 & 13. i) SLFRS 9 - Financial Instruments

ICASL published the SLFRS 9 - Financial

Instruments, which will supersede the

provisions of LKAS 39 Financial

Instruments: Recognition and Measurement

on classification and measurement of

financial assets and requirements with

respect to the classification and

measurement of financial liabilities, the de-

recognition of financial assets and financial



liabilities and how to measure fair value

were added to SLFRS 9. Most of these

requirements have been carried forward

without substantive amendment from LKAS

39. However, to address the issue of own

credit risk some changes were made to the

fair value option for financial liabilities.

The standard is applied retrospectively in

accordance with LKAS 8 Accounting

Policies, Changes in Accounting Estimates

and Errors with certain exemptions.

ii) SLFRS 10 - Consolidated Financial

Statements

ICASL published SLFRS 10 Consolidated

Financial Statements, which supersedes

LKAS 27 Consolidated and Separate

Financial Statements and SIC-12

Consolidation- Special Purpose Entities.

Additionally, the ICASL published SLFRS -

12 Disclosure of Interests in Other Entities

and LKAS 27 Separate Financial

Statements.

The following are the main changes from

LKAS 27 and SIC-12.

A single control model is applied to

determine whether an investee should be

consolidated.

De facto control is explicitly included in

the model.

Control involves power over the relevant

activities of the investee, exposure to

variability of returns, and a link between

power and returns.

Guidance is provided for assessing

whether the investor is a principal or an

agent in respect of its relationship with

the investee. A principal could

consolidate an investee whereas an

agent would not because the linkage

between power and returns is not

present.

Control assessment includes

consideration of substantive potential

voting rights as opposed to currently

exercisable potential voting rights.

Exposure or right to variability in returns

replaces and is broader than the concept

of benefits.

Protective rights are defined and explicit

guidance on ‘kick-out’ rights is introduced.

Enhanced disclosures about involvement

with consolidated and unconsolidated

entities are required.

SLFRS 10 is effective for annual periods

beginning on or after 1 January 2013. Early

adoption is permitted provided that the

entire suite of consolidation standards is

adopted at the same time. However, an

entity is permitted to provide the additional

information required by SLFRS 12 without

having to early adopt the remaining

standards.

iii) SLFRS 11 - Joint Arrangements

ICASL published SLFRS 11 Joint

Arrangements, which supersedes LKASS

31 Interests in Joint Ventures and SIC-13

Jointly Controlled Entities - Non-Monetary

Contributions by Ventures. SLFRS 11 also

amends LKAS 28 Investments in

Associates.

The following are the main changes from

LKAS 31;

The structure of the joint arrangement,

although still an important consideration,

is no longer the main factor in

determining the type of joint arrangement

and therefore the subsequent accounting

If a joint arrangement is determined to be

a joint venture, then the joint venturer

accounts for its investment using the

equity method in accordance with LKAS

28 Investments in Associates and Joint

Ventures; the free choice between using

either the equity method or proportionate

consolidation has been eliminated.

iv) SLFRS 12 - Disclosure of Interests

In Other Entities SLFRS 12 Disclosure of

Interests in Other Entities is a consolidated

disclosure standard requiring a wide range



of disclosures about an entity’s interests in

subsidiaries, joint arrangements, associates

and unconsolidated ‘structured entities.

Disclosures are presented as a series of

objectives, with detailed guidance on

satisfying those objectives.

The objective of SLFRS 12 is to require the

disclosure of information that enables users

of financial statements to evaluate;

The nature of, and risks associated with,

its interests in other entities

The effects of those interests on its

financial position, financial performance

and cash flows.

Where the disclosures required by

SLFRS 12, together with the disclosures

required by other SLFRSs, do not meet

the above objective, an entity is required

to disclose whatever additional

information is necessary to meet the

objective.

SLFRS 12 is required to be applied by an

entity that has an interest in any of the

following;

Subsidiaries

Joint arrangements (joint operations

or joint ventures)

Associates

Unconsolidated structured entities

v) SLFRS 13 - Fair Value Measurement

SLFRS 13 Fair Value Measurement applies

to SLFRSs that require or permit fair value

measurements or disclosures and provides

a single SLFRS framework for measuring

fair value and requires disclosures about

fair value measurement. The Standard

defines fair value on the basis of an ‘exit

price’ notion and uses a ‘fair value

hierarchy’, which results in a market-based,

rather than entity-specific, measurement.

SLFRS 13;

Defines fair value

Sets out in a single SLFRS a framework

for measuring fair value

Requires disclosures about fair value

measurements.

SLFRS 13 applies when another SLFRS

requires or permits fair value

measurements or disclosures about fair

value measurements (and measurements,

such as fair value less costs to sell, based

on fair value or disclosures about those

measurements), except for:

Share-based payment transactions within

the scope of SLFRS 2 Share-based

Payment

Leasing transactions within the scope of

LKAS 17 Leases

Measurements that have some

similarities to fair value but that are not

fair value, such as net realizable value in

LKAS 2 Inventories or value in use in

LKAS 36 Impairment of Assets. Additional

exemptions apply to the disclosures

required by SLFRS 13.

03. Basis of Consolidation

03.1 Subsidiaries

Subsidiaries are all entities (Including

special purpose entities ) over which a

Company has the power to govern the

financial and operating policies that is

generally accompanied by a share holding

of more than one half of the voting rights.

The existence and effect of potential voting

rights that are currently exercisable or

convertible are considered when assassin

the whether the Company controls another

entity. Subsidiaries are fully consolidated

from the date on which control is

transferred. They are de-consolidated from

the date that control ceases.

The purchase method of accounting is used

to account for the acquisition of subsidiaries

by the Company. The cost of an acquisition

is measured as the fair value of the assets

given, equity instruments issued and

liabilities incurred or assumed at the date of

exchange, and costs directly attributable to

the acquisition. The excess of the cost of

acquisition over the fair value of the

Group’s share of the identifiable net assets

acquired is recorded as goodwill. If the cost



of acquisition is less than the fair value of

the net assets of the subsidiary acquired,

the difference is recognised directly in the

income statement.

The inter Company transaction, balances

and unrealised gains on transactions

between Group Companies are eliminated.

The unrealised losses are also eliminated

but considered as an impairment of the

asset transferred.

The accounting policies of subsidiaries

have been changed when necessary to

align them with the policies adopted by the

Group. If a member of the group uses

accounting policies other than those

adopted in the consolidated financial

statements for like transactions and events

in similar circumstances, appropriate

adjustments are made to its financial

statements in preparing the consolidated

financial statements.

03.2 Associates - Equity accounted

Investees

Associates are those entities in which the

Company has significant influence, but not

control, over the financial and operating

policies. Significant influence is presumed

to exist when the group holds between 20

and 50 percent of the voting power of

another entity.

Associates are accounted for using the

equity method (equity accounted investees)

and are initially recognized at cost.

The Consolidated Financial Statements

include the group’s share of the income and

expenses and equity movements of equity

accounted investees, after adjustments to

align the accounting policies with those of

the group, from the date that significant

influence commences until the date that

significant influence ceases.

When the group’s share of losses exceeds

its interest in an equity accounted investee,

the carrying amount of that interest

(including any long-term investments) is

reduced to nil and the recognition of further

losses is discontinued except to the extent

that the company has an obligation or has

made payments on behalf of the investee.

An investment in an associate is accounted

for in investor’s separate financial

statements at cost.

The gain of control of an existing associate

accounted for as if any investment in the

acquiree that was held before obtaining

control was sold and subsequently

repurchase at the acquisition date.

04 Financial instruments

04.1 Financial Assets

Financial assets are within the scope of

LKAS 39 are classified appropriately as Fair

value through profit or loss(FVTPL), loans

and receivables (L&R), held to maturity

(HTM) and available-for-sale (AFS) at its

initial recognition. All the financial assets

are recognized at fair value at its initial

recognition.

04.2 Available-for-sale Financial Assets

Available-for-sale financial assets are non-

derivative financial assets that are

designated as available for- sale and that

are not classified in any of the other

financial assets categories. The Group’s

investments in equity securities are

classified as available-for-sale financial

assets.

Subsequent to initial recognition, these are

measured at fair value and changes

therein, other than impairment losses are

recognized in other comprehensive income

and presented within equity in the fair value

reserve on AFS. When an investment is

derecognized, the cumulative gain or loss in

other comprehensive income is transferred

to profit or loss.

04.3 Loans and receivables

Loans and receivables are financial assets

with fixed or determinable payments that

are not quoted in an active market. Such

assets are recognized initially at fair value

plus any directly attributable transaction

costs. Subsequent to initial recognition

loans and receivables are measured at

amortised cost using the effective interest

method, less any impairment losses.



05 Foreign currency translations

Transactions in foreign currency are

translated to rupees at the foreign

exchange rate ruling at the date of

transactions. Monetary assets and liabilities

denominated in foreign currencies at the

balance sheet date are translated to rupees

at the exchange rate ruling at that date.

Non-monetary items are accounted for

using the exchange rate at the date of

transaction. Foreign currency differences

arising on retranslation are recognized in

statement of comprehensive income.

06 Property, plant & equipment

06.1 Basis of Measurement

Items of Property, plant & equipment are

stated at cost of purchase less accumulated

depreciation and any accumulated

impairment loss. Where an item of

Property, plant & equipment comprises

major components having different useful

lives, they are accounted for as separate

items of property, plant & equipment.

The cost of replacing part of an item of

property plant & equipment is recognised in

the carrying amount of the item if it is

probable that the future economics benefits

embodied within the part will flow to the

company and its cost can be measured

reliably. The cost of day to day servicing of

property, plant & equipment are charged to

the income statement as incurred.

When replacement cost are recognised in

the carrying amount of an item of property,

plant & equipment, the remaining carrying

amount of the replace part is derecognised.

I) Cost Model

The Company applies the cost model to all

property, plantand equipment except

freehold land and buildings; which records

at cost of purchase together with any

incidental expenses thereon less any

accumulated depreciation and accumulated

impairment losses.

ii) Revaluation Model

The Group revalue its land and buildings

which are measured at its fair value at the

date of revaluation less any subsequent

accumulated depreciation and accumulated

impairment losses. Revaluations are made

with sufficient regularity to ensure that the

carrying amount does not differ materially

from that which would be determined using

fair value at the Financial Position date. The

company policy is to revalue its property,

plant and equipment once in three years.

On revaluation of lands and buildings, any

increase in the revaluation amount is

credited to the revaluation reserve in

shareholder’s equity unless it off sets a

previous decrease in value of the same

asset that was recognized in the statement

of comprehensive income. A decrease in

value is recognized in the statement of

comprehensive income where it exceeds

the increase previously recognized in the

revaluation reserve. Upon disposal, any

related revaluation reserve is transferred

from the revaluation reserve to retained

earnings and is not taken into account in

arriving at the gain or loss on disposal.

06.2 Depreciation

The freehold land is not depreciated. The

depreciation on other assets is calculated

using the Reducing balance method to

allocate their cost or re valued amounts to

there residual values over the estimated

useful lives, as follows:

Buildings 50 years

Plant & machinery 08 years

Office fixtures 10 years

Furniture & fittings 10 years

Stores equipment 10 years

Computer equipment 05 years

Leased motor vehicle 08 years

Motor vehicles & bicycles 08 & 04

Years



06.3 Disposal

An item of property, plant and equipment is

de-recognized upon disposal or when no

future economic benefits are expected from

its use or disposal.

The gain or loss on disposal of an item of

property, plant and equipment is

determined by comparing the proceeds

from disposal with the carrying amount of

the property, plant and equipment, and is

recognized net within other income/ other

expenses in the statement of

comprehensive income. When revalued

assets are sold, the amounts included in

the revaluation surplus reserve are

transferred to retained earnings.

07 Intangible Assets

07.1 Software

All computer software licensed for use by

the company, not constituting an integral

part of related hardware are included in the

balance sheet under the category intangible

assets and carried at cost less accumulated

amortization and any impairment losses.

The initial acquisition cost comprises of

license fee paid at the inception, import

duties, such other costs applicable, cost of

customizing the software to meet the

specific requirements of the company and

other directly attributable expenditure in

preparing the assets for its intended use.

The cost is amortized using the reducing

balance method at a rate 25% per annum

commencing from the date the application

software is available for use. The

amortization cost is recognized as an

expense.

07.2 Subsequent Expenditure

Subsequent expenditure on intangible

assets is capitalized only when it increases

the future economic benefits embodied

these assets. All other expenditure is

expensed when incurred.

07.3 De-recognition

Intangible assets are de-recognized on

disposal or when no future economic

benefits are expected from its use. The gain

or loss arising from de-recognition of

intangible assets are measured as

difference between the net disposal

proceeds and the carrying amount of the

asset.

07.4 Amortization

Amortization is recognized in the statement

of comprehensive income on a straight-line

basis over the estimated useful lives of

intangible assets, other than goodwill, from

the date that they are available for use. The

estimated useful life of intangible asset is

as follows;

Computer Software 4 Years

08 Impairment

08.1 Financial assets

Financial assets are assessed at each

reporting date to determine whether there is

objective evidence that it is impaired. A

financial asset is impaired if there is

objective evidence of impairment as a result

of one or more events that occurred after

the initial recognition of the asset, and that

loss event(s) had an impact on the

estimated future cash flows of that asset

that can be estimated reliably.

Objective evidence that financial assets are

impaired includes default or delinquency by

a debtor, restructuring of an amount due to

the Group on terms that the Group would

not consider otherwise, indications that a

debtor or issuer will enter bankruptcy,

adverse changes in the payment status of

borrowers or issuers, economic conditions

that correlate with defaults or the

disappearance of an active market for a

security.

The Group considers evidence of

impairment for financial assets measured at

amortized cost (loans and receivables) at



specific asset level. All individually

significant assets are assessed for specific

impairment.

An impairment loss in respect of a financial

asset measured at amortized cost is

calculated as the difference between its

carrying amount and the present value of

the estimated future cash flows discounted

at the asset’s original effective interest rate.

Losses are recognised in profit or loss and

reflected in an allowance account against

loans and receivables or held- to-maturity

investment securities. Interest on the

impaired asset continues to be recognised.

When an event occurring after the

impairment was recognised causes the

amount of impairment loss to decrease, the

decrease in impairment loss is reversed

through profit or loss.

08.2 Non-financial assets

The carrying amounts of the Group’s Non-

Financial Assets are reviewed at each

reporting date to determine whether there is

any indication of impairment. If any such

indication exists, then the assets’

recoverable amount is estimated. An

impairment loss is recognized if the carrying

amount of an asset or its related Cash-

Generating Unit (CGU) exceeds its

estimated recoverable amount.

The Group’s corporate assets do not

generate separate cash inflow and are

utilized by more than one CGU. Corporate

assets are allocated to CGUs on a

reasonable and consistent basis and tested

for impairment as part of the testing of the

CGU to which the corporate asset is

allocated. Impairment losses are

recognized in profit or loss.

Impairment losses recognized in prior

periods are assessed at each reporting

date for any indications that the loss has

decreased or no longer exists. An

impairment loss is reversed if there has

been a change in the estimates used to

determine the recoverable amount. An

impairment loss is reversed only to the

extent that the asset’s carrying amount

does not exceed the carrying amount that

would have been determined, net of

depreciation, if no impairment loss had

been recognized

09 Inventories

Inventories have been valued at the lower

of cost and net realisable value after

making due allowance for slow moving and

obsolete items, on a basis consistently

applied from year to year. The cost incurred

in bringing inventories to its present location

and conditions are accounted as follows:

Trading Inventories

- At purchase cost on First in First out

basis

Other Inventories

- Packing materials are at cost.

10 Trade Receivables

The trade receivables are recognised

initially at cost and subsequently carried at

cost less provision for impairment. A

provision for impairment of trade

receivables is established when there is

objective evidence that the Group will not

be able to collect all amounts due according

to the original items of the receivables. The

amount of the provision is the difference

between the asset’s carrying amount and

the present value of estimated future cash

flows.

The Carrying amount of the asset is

reduced through the use of an allowance

account. Once decided as irrecoverable

after due recovery procedures, the amount

of the loss is recognised as an operating

cost in the income statement. When a trade

receivable is uncollectible, it is written off

against the allowance account. Subsequent

recoveries of amounts previously written off

are credited against operating costs’ in the

income statement.



11 Cash and Cash Equivalents

Cash and cash equivalents comprise cash

in hand, deposits held at call with banks,

other short-term liquid investments with

original maturities of three months or less,

net of bank overdrafts. Bank overdrafts are

shown within borrowings in current liabilities

on the balance sheet. For the purpose of

the statement of the cash flows, cash &

cash equivalents are presented net of bank

overdraft.

12 Stated Capital

The ordinary shares are classified as

equity.

13 Trade Payables

The trade payables are recognised at fair

value.

14 Borrowings

The borrowings are recognised initially at

fair value, net of transaction costs incurred.

The borrowings are subsequently stated at

amortised cost. Any difference between the

proceeds (net of transaction costs) and the

redemption value is recognised in the

income statement over the period of the

borrowings using the effective interest

method.

The borrowings are classified as current

liabilities unless the group has an

unconditional right to defer settlement of the

liability for at least 12 months after the

balance sheet date.

15 Income Tax

15.1 Current and Deferred Income Tax

Income tax comprises current and deferred

tax. Income tax is recognized in the

statement of income except to the extent

that it relates to items recognized directly in

other comprehensive income or directly in

equity, in which case the income tax is also

recognized directly in other comprehensive

income or equity respectively.

Current tax is the expected tax payable on

the taxable income for the year, using tax

rates enacted or substantively enacted, at

the end of the reporting period, and any

adjustment to tax payable in respect of

previous years.

In general, deferred tax is recognized in

respect of temporary differences arising

between the tax bases of assets and

liabilities and their carrying amounts in the

consolidated financial statements.

However, deferred tax is not recognized if it

arises from the initial recognition of goodwill

or the initial recognition of an asset or

liability in a transaction other than a

business combination that, at the time of

the transaction, affects neither accounting

nor taxable profit nor loss. Deferred income

tax is provided on temporary differences

arising on investments in subsidiaries and

associates, except, in the case of

subsidiaries, where the timing of the

reversal of the temporary difference is

controlled by the company and it is

probable that the temporary difference will

not reverse in the foreseeable future.

Deferred income tax is determined on a

non-discounted basis using tax rates and

laws that have been enacted or

substantively enacted at the balance sheet

date and are expected to apply when the

deferred tax asset is realized or liability is

settled. Deferred tax assets are recognized

to the extent that it is probable that future

taxable profit will be available against which

the deductible temporary differences can be

utilized. Deferred income tax assets and

liabilities are presented as non-current.

15.2 Withholding Tax on Dividends

Dividend distributed out of taxable profit of

the local companies attracts a 10%

deduction at source and is not available for

set off against the tax liability of the

Company. Withholding tax that arises from

the distribution of dividends by the

Company is recognized at the same time as

the liability to pay the related dividend is

recognized.



15.3 Economic Service Charge (ESC)

As per the provisions of Economic Service

Charge Act No. 13 of 2006 amendments

thereto, ESC is payable on the liable

turnover at specified rates. ESC is

deductible from the income tax liability. Any

unclaimed amount can be carried forward

and set off against the income tax payable

in the four subsequent years as per the

relevant provision in the Act.

15.4 Nation Building Tax (NBT)

As per the provisions of the Nation Building

Tax Act, No. 9 of 2009 and the subsequent

amendments thereto, Nation Building Tax

should be payable at the rate of 2% with

effect from 1 January 2011 on the liable

turnover as per the relevant provisions of

the Act.

15.5 Sales Taxes (Value Added Tax)

Revenues, expenses and assets are

recognized net of the amount of sales tax

except for the following;

Sales tax incurred on a purchase of a

assets or services is not recoverable from

the taxation authority, in which case the

sales tax is recognized as part of the cost

of acquisition of the asset or as part of

the expense item as applicable; and

Receivables and payables that are stated

with the amount of sales tax included.

The net amount of sales tax recoverable

from, or payable to, the taxation authority is

included as part of tax receivables or tax

payables in the Financial Position.

16 Borrowing Costs

Borrowing costs that are directly attributable

to the acquisition, construction or

production of qualifying assets that take a

substantial period of time to get ready for its

intended use or sale, are capitalized as part

of the assets. Borrowing costs that are not

directly attributable to the acquisition,

construction or production of a qualifying

asset are recognized in profit or loss using

the effective interest method.

17 Other Non-financial Liabilities and

Provisions

Liabilities are recognized in the Financial

Position when there is a present obligation

as a result of a past event, the settlement of

which is expected to result in an outflow of

resources embodying economic benefits.

Obligations payable at the demand of the

creditor within one year of the Financial

Position date are treated as current

liabilities. Liabilities payable after one year

from the Financial Position date are treated

as non-current liabilities.

17.1 Finance Leases

Property and Equipment on finance leases,

which effectively transfer to the group

substantially the entire risk and rewards

incidental to ownership of the leased items,

are disclosed as finance leases at their

cash price and depreciated over the period

the Company is expected to benefit from

the use of the leased assets.

The corresponding principal amount

payable to the lessor is shown as a liability.

Lease payments are apportioned between

the finance charges and reduction of the

lease liability so as to achieve a constant

rate of interest on the outstanding balance

of the liability. The interest payable over the

period of the lease is transferred to an

interest in suspense account. The interest

element of the rental obligations pertaining

to each financial year is charged to the

statement of comprehensive income over

the period of lease.

18 Employee benefits

The Group has both defined benefit and

defined contribution plans.

18.1 Defined contribution plan

Eligible employees of the company are members of Company Provident Fund and Employees Trust Fund to which the company contributes 12% and 03% respectively of such employees’ basis wage or salary. The company contribution is recognized as an expense in the income statement as incurred.


NOTES TO THE FINANCIAL STATEMENTS (Contd…) 18.2 Defined benefit plan

Provision has been made in the financial

statements for retirement gratuities from the

first year of service for all employees in

conformity with Sri Lanka Accounting

Standard (LKAS) 16 – Retirement Benefits

obligation.

The cost of defined contribution pension

plans is charged to expense as the

contributions become payable. The cost of

defined benefit plans is determined using

the projected unit credit method. The

related pension liability recognized in the

statement of financial position is the present

value of the defined benefit obligation at the

end of the reporting period less the fair

value of plan assets. Actuarial valuations

for defined benefit plans are carried out

annually. The discount rate applied in

arriving at the present value of the pension

liability represents the yield on high quality

corporate bonds denominated in the

currency in which the benefits will be paid,

and that have terms to maturity

approximating the terms of the related

pension liability.

Actuarial gains and losses are recognized

in full in the period in which they occur, in

other comprehensive income without

recycling to the statement of income in

subsequent periods. Amounts recognized in

other comprehensive income are

recognized immediately in retained

earnings. Current service cost, the

recognized element of any past service

cost, the expected return on plan assets

and the interest expense arising on the

pension liability are included in the same

line items in the statement of income as the

related compensation cost.

Past service costs are recognized

immediately to the extent the benefits are

vested, and otherwise are amortized

straight-line over the average period until

the benefits become vested.

19 Provisions

A provision is recognised when the Group

has a present legal or constructive

obligation as a result of past events, it is

more likely than not, that an outflow of

resources will be required to settle the

obligation and the amount has been reliable

estimated. Provisions are not recognised

for future operating loses.

Where there are a number of similar

obligations, the likelihood that an outflow

will be required in settlement is determined

by considering the class of the obligation as

a whole. A provision is recognised even if

the likelihood of an outflow with respect to

any one item included in the same class of

obligation may be small.

The provision is measured at the present

value of the expenditures expected to be

required to settle the obligation.

20 Revenue Recognition

20.1 Goods sold and Services rendered

Revenue from sale of goods is recognised

in the income statement when the

significant risks and rewards of ownership

have been transferred to the buyer.

Revenue for services rendered is

recognised in the income statements in the

period to which they relate. No revenue is

recognised if there are significant

uncertainties regarding recovery of

consideration due, associated cost or the

possible return of goods.

20.2 Interest income

Interest income is derived from short-term

investments and is treated on an accrual

basis.

20.3 Dividend

Dividend income is recognised when the

shareholders’ right to receive dividend is

established and management income is

recognised on accrual basis.

20.4 Other income

Other income is recognised on an accrual

basis.

Net gains and losses of a revenue nature

on the disposal property, plant & equipment


NOTES TO THE FINANCIAL STATEMENTS (Contd…) 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.

Gains & 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.

21 Expenditure

Expenses are recognized in the statement

of comprehensive income on the basis of a

direct association between the cost incurred

and the earning of specific items of income.

All expenditure incurred in running of the

business and in maintaining the property,

plant & equipment in a state of efficiency

has been charged to income in arriving at

the profit for the year.

For the presentation of the statement of

comprehensive income the Directors are of

the opinion that the nature of the expenses

method present fairly the element of the

Group’s performance, and hence such

presentation method is adopted.

Preliminary and pre operational expenditure

is recognized in the statement of

comprehensive income. Repairs and

renewals are charged to the statement of

comprehensive income in the year in which

the expenditure is incurred.

22 Finance cost

Finance costs comprise interest expense

on borrowings and impairment losses

recognized on financial assets (other than

trade receivables), are recognized in the

statement of comprehensive income.

The company profits are stated after

Providing for all impairment losses and

depreciation of property, plant and

equipment.

Charging all expenses incurred in the

day-to-day operations of the business

and in maintaining the property, plant and

equipment in a state of efficiency.

23 Earnings per Share

The Group presents basic and diluted

earnings per share data for its ordinary

shares. Basic earnings per share is

calculated by dividing the profit or loss

attributable to ordinary shareholders of the

Company by the weighted average number

of ordinary shares outstanding during the

year. Diluted earnings per share is

determined by adjusting the profit or loss

attributable to ordinary shareholders and

the weighted average number of ordinary

shares outstanding, for the effects of all

dilutive potential ordinary shares.

24 Cash flow statement

Cash flow statement has been prepared

using the indirect method.

Interest paid are classified as operating

cash floes, interest and dividend received

are classified as investing cash flows while

dividend paid are classified as financing

cash flows for the purpose of presenting of

cash flow statement

25 Commitments and Contingencies

All discernible risks are accounted for in

determining the amount of all known

liabilities. Contingent Liabilities are possible

obligations whose existence will be

confirmed only by uncertain future events or

present obligations where the transfer of

economic benefit is not probable or cannot

be reliably measured. Contingent Liabilities

are not recognized in the Financial Position

but are disclosed unless they are remote.

26 Risk Management Framework

The board of directors has overall

responsibility for the establishment and

oversight of the Company’s risk

management framework. The Board has

established the audit committee, which is

responsible for developing and monitoring

Company risk management policies in their

specified areas. All Board committees have

both executive and non-executive members

and report regularly to the board of

directors on their activities.


NOTES TO THE FINANCIAL STATEMENTS (Contd…) For the Year ended 31st March 2013

01. REVENUE

31 Mar 2013 31 Mar 2012 01 Apr 2011 31 Mar 2013 31 Mar 2012 01 Apr 2011

Rs Rs Rs Rs Rs Rs

Net Revenue 241,443,451 202,232,390 157,151,381 241,443,451 198,609,893 103,236,442

01.1 Geographical Segment of Revenue


Rs Rs Rs Rs Rs Rs

Export turnover 67,750,410 74,247,489 76,073,199 67,750,410 74,247,489 76,073,199

Local sales 173,667,327 146,378,298 87,882,010 173,667,327 141,237,683 26,546,192

Total 241,417,737 220,625,786 163,955,208 241,417,737 215,485,172 102,619,390

Rent income 25,714 925,714 931,269 25,714 925,714 931,269

Total revenue 241,443,451 221,551,501 164,886,477 241,443,451 216,410,886 103,550,659

Less: Sales return - (19,319,110) (7,152,313) - (17,800,993) (109,230)

Less: Turnover Tax (582,784) (204,987)

Net revenue 241,443,451 202,232,390 157,151,381 241,443,451 198,609,893 103,236,442

01.2 Divisional Segment of Revenue


Rs Rs Rs Rs Rs Rs

Export turnover 67,750,410 74,247,489 76,073,199 - - -

Local sales 100,173,497 33,394,465 23,084,090 73,493,830 107,843,218 3,462,101

Total 167,923,907 107,641,954 99,157,289 73,493,830 107,843,218 3,462,101

Rent income 25,714 925,714 931,269 - - -

Total revenue 167,949,621 108,567,668 100,088,558 73,493,830 107,843,218 3,462,101

Less: Sales return - - - - (17,800,993) (109,230)

Less: Turnover Tax (204,987) - - -

Net revenue 167,949,621 108,567,668 99,883,571 73,493,830 90,042,224 3,352,871

02. OTHER OPERATING INCOME


Rs Rs Rs Rs Rs Rs

Dividend income 2,322,306 893,427 85,946 11,218,898 9,633,018 3,452,302

Interest on staff loans 900 515 735 900 515 735

Interest Income - 1,485 42 - 1,485 42

Profit on disposal of shares 86,075 6,740,872 2,233,523 86,075 6,740,872 2,233,523

Unrealized gain from

share investments 2,236,884 2,990 3,803,387 2,234,284 - 3,803,387

Fair value gain on

investment property 8,600,000 15,933,149 - 8,600,000 15,933,149 -

FD interest 114,101 163,562 - 114,101 163,562 -

Rent from stores - - - - - 60,000

Advertising Recover 12,176,169 13,906,108 2,525,027 12,176,169 13,906,108

Balances written off - 166,066 4,844,028 - 166,066 4,601,859

Differed tax reversal - 251,661 - - -

Miscellaneous - 484,182 717,204 - 484,182 717,204

25,536,435 38,544,016 14,209,892 34,430,426 47,028,956 14,869,052

Group Company

Group Company

Group Company

TRADING DIVISION FMCG DIVISION


03. OPERATING PROFIT /(LOSS)

Profit from the operations is stated after charging all expenses

including the followings :


Rs Rs Rs Rs Rs Rs

Staff costs

Salaries, wages, allowances etc. 14,635,404 19,012,307 9,445,143 14,635,404 16,882,066 1,739,239

EPF & ETF 1,028,626 1,687,710 1,061,119 1,028,626 1,481,330 245,804

Provision for retiring gratuities

(Note 23) 182,579 6,843 251,741 182,579 - 90,366

15,846,609 20,706,860 10,758,003 15,846,609 18,363,396 2,075,409

Others

Audit fee & expenses 140,000 202,409 219,268 140,000 154,000 140,000

Depreciation of property, plant

& equipment 4,032,851 3,134,770 2,480,824 3,051,424 2,127,863 1,404,094

Donations - 1,000 16,847 - - -

Secretarial fee & expenses 359,110 235,662 - 359,110 235,662 331,618

Professional fees 9,500 - 577,854 9,500 - -

Consolidation fee 30,000 40,000 - 30,000 40,000 35,000

Advertisement - 489,250 1,596,192 - - 19,163

04. FINANCING COST


Rs Rs Rs Rs Rs Rs

Term loan & short term loan interest 6,924,360 - 996,389 6,924,360 - 996,389

PC Loan Interest 2,001,862 714,625 348,904 2,001,862 714,625 348,904

Import Loan interest & commission 138,919 4,376,371 1,699,082 138,919 4,060,030 698,422

Margin Trading-Interest 12,422,372 8,146,144 4,521,679 12,422,372 8,146,144 4,521,679

Factoring interest 1,769,540 51,382 - 1,769,540 51,382 -

Overdraft interest 4,003,613 2,169,426 2,291,554 4,003,613 1,734,332 1,687,577

Bank charges 1,386,867 999,140 957,043 1,367,866 990,740 653,186

Debit Tax - 28,196 219,874 - 17,669 161,107

Under Provision of VAT Liability 130,254 74,708 - 71,087

Lease interest 432,782 519,713 - 432,782 519,713

Other lease expenses 124,702 108,203 499,568 124,702 108,203 -

Bad & doubtful debts - 35,179 54,719 - - -

Loss on disposal 24,375 - - 24,375 - -

Loss from fall in value of investments - 16,196,683 - - 16,196,683 -

Penalty charges 18,701 214 24,859 18,701 214 17,167

Miscellaneous - 136,697 193,166 - - -

29,378,346 33,481,975 11,881,545 29,229,091 32,539,735 9,155,518

Group Company

Group Company


For the Year ended 31st March 2013



For the Year ended 31st March 2013

05. INCOME TAX EXPENSE

Income tax has been provided on the taxable income of the company at 28% and 12% on profit arising from domestic sales and export

sales respectively.


Rs Rs Rs Rs Rs Rs

Tax on profit for the period - 800,144 1,065,750 - 781,568 6

Share of income tax of the associate 1,821,078 1,447,669 4,896,831 - - -

1,821,078 2,247,813 5,962,581 - 781,568 6

Deferred tax charge/ (reversal) of the 23,525 (134,608) (69,221) 23,525 (134,608) 57,213

Share of deferred tax of the associates (226,366) 2,929,483 (33,934) - - -

1,618,237 5,042,688 5,859,427 23,525 646,960 57,219

Reconciliation of accounting profits and current tax on ordinary activities are as follows:-

Profit/(loss) before taxation 14,302,743 4,737,441 8,108,345 7,183,625 22,488,925 6,962,788

Consolidation adjustment - - (3,366,337) - - -

Accounting profit of the company and 14,302,743 4,737,441 4,742,009 7,183,625 22,488,925 -

its subsidiaries

Income not liable for tax (11,304,973) (16,373,891) (5,685,826) (11,304,973) (16,373,891) (5,685,826)

Expenses disallowed for tax (6,080,263) 4,435,997 (717,594) (7,191,943) 3,014,671 (1,993,420)

Capital allowance (593,124) (651,756) (776,400) (456,113) (514,745) (231,776)

Other allowable for tax - - (177,000) - - -

Adjusted business profit / (loss) for the year (3,675,617) (7,852,209) (2,614,811) (11,769,404) 8,614,959 (948,234)

Tax losses brought forward (67,626,264) (42,907,430) (42,907,430) (50,273,937) (52,341,418) (52,341,460)

Tax loss claim during the year - (3,015,755) - (3,015,755)

Taxable Income from Other Sources 114,101 - - 114,101 1,485 42

Tax losses carry forward (67,626,264) (39,891,675) (42,907,430) (50,273,937) (49,325,663) (52,341,418)

Taxable income (3,561,516) 5,600,689 3,000,025 (11,655,303) 5,600,689 42

Income tax - 800,144 1,065,744 - 781,568 6

Provision for the year - 672,022 1,049,994 - 672,022 6

SRL - - 15,750 - - -

Dividend tax - 128,123 - 109,547 -

Income Tax payable - 800,144 1,065,744 - 781,568 6

06. EARNINGS PER SHARE

average number of ordinary shares outstanding during the year, as per the Sri Lanka Accounting Standard - LKAS 33 - Earnings per Share.


Rs Rs Rs Rs Rs Rs

Profit attributable to Ordinary shareholders 13,275,353 38,376,046 24,236,604 7,160,101 21,716,666 6,905,568

Weighted average number of ordinary shares 140,196,000 140,196,000 140,196,000 140,196,000 140,196,000 140,196,000

Earnings / (deficit) per ordinary share (Rs) 0.09 0.27 0.17 0.05 0.15 0.05

Earnings / (deficit) per ordinary share

(Rs- Exclusive of fair value gain) 0.03 0.16 0.17 (0.01) 0.04 0.05

Movement of Number of Shares during the year

31-Mar-13

Number of shares held as at 1st April 2012 140,196,000

Movement during the year -

Number of shares held as at 31st March 2013 140,196,000

Group Company

Group Company

Basic earning /(loss) per share is calculated by dividing the net profit/(loss) for the year attributable to ordinary shareholders by the weighted


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As At 31st March 2013


08. INTANGIBLE ASSET


Rs Rs Rs Rs Rs Rs

Balance as at 1 Apr 2012 127,500 - - 127,500 - -

Addition : (Soft ware) - 170,000 - - 170,000 -

Amortization (25%) (42,500) (42,500) - (42,500) (42,500) -

Balance as at 31 Mar 2013 85,000 127,500 - 85,000 127,500 -

09. OTHER INVESTMENTS


Rs Rs Rs Rs Rs Rs

Investment properties 09.1 47,358,500 38,000,000 - 47,358,500 38,000,000 -

Term deposit 09.2 3,270,220 3,000,000 - 3,270,220 3,000,000 -

50,628,720 41,000,000 - 50,628,720 41,000,000 -

Group Company

Group Company

Cost/Valuation on 31 March 2013 includes assets at valuation as follows:-

As at

31 Mar 2013

Land 31.03.2012 445,000,000 - 445,000,000

Building 31.03.2012 105,000,000 - 105,000,000

Investment Property 31.03.2013 38,000,000 9,358,500 47,358,500

Total 588,000,000 9,358,500 597,358,500

Valuation Date Freehold

Land & Building

Previous Revalued Date 31.03.2010 304,600,835

Revaluation Surplus -2011 /2012 237,494,800

Current Year Revaluation Surplus -

Balance as at 31.03.2013 542,095,635

The carrying amount of revalued land & buildings as at 31 March 2013, if they were carried at cost is as follows:-

2013 2012

Rs. Rs. Rs. Rs.

Land 310,271 - 310,271 310,271

Buildings 13,132,321 4,186,155 8,946,166 9,128,741

Depreciation on Buildings was provided at 2% on reducing balance method from 1 April 1995.

Details of property, Plant and Equipment pledged as security for term loans obtained, are disclosed in Note 21

Valued On Valued Amount

Additions at

cost since the

date of

Valuation

Cost

Cumulative

Depreciation if

Assets were

carried at Cost

Net Carrying

Amount

The book value of the land area of 296.5 perches, purchased in 1977/78, owned by the company which is located in

no 414/18, K. Cyril C. Perera Mawatha, Colombo 13 has been revalued by M.C.Abdul Malick

Int.Sc.(Land).,D.I.V,(S.L).,F.IV.(S.L), retired state valuer on 31 March 2012. The surplus of Rs. 193,000,000 has

The book value of the building of 52,523 Square feet, constructed in 1982/83, owned by the company which is

situated in no 414/18 K Cyril C. Perera Mawatha, Colombo 13 has been revalued by M.C.Abdul Malick Int.Sc.(Land).

,D.I.V,(S.L).,F.IV.(S.L),retired state valuer on 31 March 2012. The surplus of Rs. 44,494,800 has been credited to

Net Carrying

Amount



07.1 PROPERTY, PLANT & EQUIPMENT (CONTD.)


11. INVESTMENT IN ASSOCIATES

11.1Investment at Cost

On' ally Holdings PLC

31 Mar 2013 31 Mar 2012 01 Apr 2011

Rs Rs Rs

Balance as at 1st April 2012 349,915,103 323,779,368 307,028,640

Share of associate profits 17,193,791 39,252,477 25,354,022

Share of tax (1,821,078) (1,447,669) (4,896,831.40)

Share of associate differed tax 226,366 (2,929,483) 33,934

Share of profits of associate after tax 365,514,182 358,654,694 327,519,764

Dividend received from associate (8,896,591) (8,739,591) (3,740,396)

Balance as at 31st March 2013 356,617,591 349,915,103 323,779,368

Company

No of 31 Mar 2013 31 Mar 2012 31 Mar 2011

Shares @ Rs Rs Rs Rs

Quoted

On'ally Holdings PLC 4,198,225 Rs.48.00 201,514,800 50,944,180 50,944,180 51,590,852

Summarized Financial Information of On'ally Holdings PLC

31 Mar 2013 31 Mar 2012 01 Apr 2011

Rs Rs Rs

Non current assets 1,077,393,133 1,076,749,916 967,242,330

Current assets 147,492,948 121,653,220 105,644,320

Total assets 1,224,886,081 1,198,403,136 1,072,886,650

Capital & reserves 1,052,278,600 1,029,678,687 921,681,857

Total liabilities 172,607,481 168,724,449 151,204,793

Total equity & liabilities 1,224,886,081 1,198,403,136 1,072,297,223

Total income for the year 110,470,767 103,023,346 95,815,156

Profit/(loss) for the year 65,026,507 145,381,702 84,370,751

Market Value

Group

10. INVESTMENTS IN SUBSIDIARIES

Holding No of Cost Amount 31 Mar 2013 31 Mar 2012 1-Apr-11

% Shares Rs written off Rs Rs Rs

Unquoted

Colombo Freight & Transport Ltd 78.38 145 14,500 - 14,500 14,500 14,500

West Coast Lanka (Pvt) Ltd 53.34 160,000 1,600,000 - 1,600,000 1,600,000 1,600,000

TOTAL 1,614,500 - 1,614,500 1,614,500 1,614,500

In the opinion of the Directors’ for impairment of subsidiaries, the net realizable value of investment in West Coast Lanka (Pvt) Ltd is

higher than the cost and the provision made for Colombo Freight & Transport (Pvt) Ltd in 2007/08 is sufficient.

09.1. Investment properties


Rs Rs Rs Rs Rs Rs

Balance as at 1 Apr 2012 38,000,000 22,066,851 - 38,000,000 22,066,851 -

Addition 758,500 - 758,500 -

Disposal - - - - - -

Changes in fair value during the year 8,600,000 15,933,149 - 8,600,000 15,933,149 -

Balance as at 31 Mar 2013 47,358,500 38,000,000 - 47,358,500 38,000,000 -

09.2. Term Deposit


Rs Rs Rs Rs Rs Rs

Union Bank - Kotahena Branch

(A/C No.-4784705016) 3,270,220 3,000,000 - 3,270,220 3,000,000 -

Group Company

The new land of 95.28 perches, is located at Kottagahawatta, Gothami Mawatha, Kotuwila village purchased on has been revalued by

M.C.Abdul Malick Int.Sc.(Land)., D.I.V,(S.L).,F.IV.(S.L), retired state valuer on 31st March 2013. The surplus of Rs. 8,600,000 has been

recognized as fair value gain on investment property.

Group Company




12.SHORT TERM INVESTMENTS - CURRENT

Group

No of Market Value 31 Mar 2013 31 Mar 2012 01 Apr 2011

Shares @ Rs Rs Rs

Portfolio - 01

Lanka IOC PLC 17,800 20.40 416,160 433,140.00 406,490.00

Maskeliya Plantations PLC 1,200 12.10 14,520 20,520.00 33,720.00

Hemas Holdings PLC 3,750 27.00 101,250 98,625.00 172,500.00

Asia Capital PLC 660 22.80 15,048 24,750.00 57,948.00

First Capital PLC 600 11.20 6,720 23,760.00 13,260.00

Equity Two PLC 100 24.00 2,400 2,490.00 2,720.00

Sathosa Motors PLC 232 229.20 53,174 57,976.80 51,527.20

Royal Ceramics Lanka PLC 20 99.50 1,990 2,300.00 3,140.00

National Lanka Finance PLC 200 8.90 1,780 2,020.00 2,220.00

Sierra Cables PLC 10,900 2.20 23,980 35,970.00 58,860.00

Lanka Walltiles PLC 168 55.90 9,391 9,800.00 28,560.00

Raigam Wayamba Salterns PLC 15,500 2.20 34,100 48,050.00 69,750.00

COCO Lanka PLC - Non Voting 2,466 13.60 33,538 41,922.00 71,390.70

COCO Lanka PLC - Voting 2,170 18.00 39,060 56,745.50 86,474.50

-

Portfolio - 02 (Margin Trading) -

Asia Asset Finance Ltd. 2,000 2.20 4,400 7,800.00 -

ACL Cables Ltd 1,200 65.50 78,600 75,120.00 112,800.00

ACME Printing & Packing PLC 7,100 11.70 83,070 48,750.00 42,600.00

Access Engineering Limited 4,500 19.70 88,650 - 98,000

Aitken Spence Hotel 3,200 74.00 236,800 224,000.00 -

Industrial Asphalts(Ceylon) PLC 50 199.00 9,950 - -

Brown Investment PLC 51,400 3.30 169,620 165,000.00

Blue Diamond 2,000 3.00 6,000 12,200.00

Browns & Co Ltd 4,200 117.90 495,180 496,320.00 1,188,180.00

Bogawanthalawa Tea Estate 5,000 11.50 57,500 52,500.00 99,000.00

Cargill's (Ceylon) Ltd 500 151.80 75,900 87,000.00 115,000.00

First Capital Holdings PLC 22,500 11.20 252,000 -

V Capital Ltd - - - 246,400.00 486,200.00

Chemanex Ltd 2,100 74.00 155,400 192,850.00 253,460.00

Ceylon Hotel Corporation 500 16.80 8,400 11,450.00 15,700.00

Chemical IND Ltd (Non Voting) 2,000 46.60 93,200 136,710.00 162,000.00

Chemical IND Ltd (Voting) 1,780 61.00 108,580 28,680.00 46,500.00

Ceylon Investment Company 700 80.00 56,000 54,810.00 75,500.00

Commercial bank 917 113.00 103,621 91,700.00 79,740.00

Ceylon Theatres Ltd 2,341 126.20 295,434 351,384.10 420,000.00

C T Land Development Ltd 6,500 24.10 156,650 145,200.00 115,150.00

Colombo Land Development - 30.50 - - 10,800.00

Ceylon Leather Products (Warrants 2012) 1,000 - - 151,300.00 25,300.00

Ceylon Leather Products (Warrants 2014) 1,000 2.40 2,400 12,200.00 18,000.00

DFCC Bank 6,800 131.10 891,480 765,680.00 1,133,880.00

Dialog Axiata PLC 941,000 9.00 8,469,000 6,581,700.00 9,639,000.00

Dipped Products Ltd 3,500 111.00 388,500 330,330.00 383,130.00

Distilleries Company of Sri Lanka Limited 8,600 166.50 1,431,900 1,247,000.00 1,494,000.00

Colombo Dockyard Limited 575 214.10 123,108 120,750.00 76,530.00

Dankotuwa Porcelain 2,400 13.80 33,120 34,230.00 35,940.00

East west properties 2,500 13.00 32,500 32,750.00 -

E channeling 7,000 6.10 42,700 42,700.00 28,600.00

Eastern Merchants PLC 1,300 8.50 11,050 -

Expo Lanka Holdings PLC 19,500 6.80 132,600 74,400.00

Free Lanka Capital Holdings 271,900 2.50 679,750 511,800.00

Lanka Orix Leasing 1,500 57.00 85,500 59,400.00 71,760.00

Ceylon Grain Elevators Limited 2,600 49.70 129,220 103,360.00 16,810.00

Ceylon Glass Company Limited 11,500 6.10 70,150 61,000.00 111,000.00

Walker & Greig Limited (Warrants 6) 6,000 2.10 12,600 -

Walker & Greig Limited (Warrants 2015) - - - 32,500.00 177,000.00

Walker & Greig Limited (Voting) 18,200 15.60 283,920 260,400.00 579,750.00

Walker & Greig Limited (Warrants 2011) - - - - 34,600.00

Walker & Greig Limited (Warrants 3) 1,000 1.30 1,300 -

Walker & Greig Limited (Warrants 2013) - - - 6,400.00 16,850.00

Walker & Greig Limited (Warrants 2012) 2,100 - - 50,400.00 55,500.00

Hayley's Ltd 3,051 298.70 911,334 1,080,000.00 1,069,880.00

Haycrab Ltd 600 176.00 105,600 96,000.00 93,240.00

Hayleys Fibre PLC 1,500 29.00 43,500 -

Description





Shares @ Rs Rs Rs

Hayley's Exports Limited - - - 43,350.00 68,250.00

Hemas Holdings Limited 25,800 27.00 696,600 625,940.00 920,000.00

Hatton National Bank (Voting) 15,857 167.30 2,652,876 2,157,300.00 3,572,000.00

Hatton National Bank (Non Voting) - 131.80 - 56,700.00 42,660.00

Horana Plantation 1,700 26.50 45,050 37,650.00 144,600.00

HVA Foods - 11.20 - - 238,800.00

Janashakthi Insurance Co. Ltd 3,000 12.30 36,900 34,800.00 66,000.00

John Keells Holding Ltd 4,800 247.00 1,185,600 1,854,000.00 1,713,600.00

John Keells Hotels Limited 93,375 13.20 1,232,550 1,131,480.00 1,326,120.00

Lanka Aluminum Industries 1,845 27.00 49,815 12,550.00

Lanka IOC 186,000 20.40 3,794,400 1,429,750.00 693,440.00

Lankem Developments PLC 7,000 5.60 39,200 -

Laugfs Gas Ltd (Non Voting) 184,798 17.80 3,289,404 2,862,568.80 6,159,250.00

Laugfs Gas Ltd ( Voting) 2,900 24.50 71,050 -

Marawila Resorts Limited 2,750 6.00 16,500 8,750.00 11,000.00

Maskeliya Plantation Ltd 2,100 12.10 25,410 35,910.00 42,150.00

Merchant Bank 5,500 16.10 88,550 146,500.00 231,000.00

Hayley's MGT Knitting Mills Limited 4,900 10.20 49,980 57,120.00 32,040.00

Hayley's MGT Knitting Mills Limited (Right) - - - 800.00 -

National Development Bank 2,200 165.00 363,000 270,160.00 389,400.00

Nawaloka Hospitals Limited 53,000 2.90 153,700 164,300.00 212,000.00

Nation Trust Bank 5,100 61.00 311,100 290,190.00 305,200.00

Overseas Realty (Ceylon) Ltd 11,700 14.00 163,800 156,780.00 75,000.00

ODEL PLC 500 21.00 10,500 9,900.00 -

Orient Garment PLC 1,000 7.90 7,900 -

Pan Asia Bank 2,500 19.00 47,500 58,750.00 25,650.00

Pan Asia Power 10,000 2.70 27,000 20,800.00

P C House 9,400 3.00 28,200 77,080.00 152,190.00

Richard Pieris Co. Ltd 36,000 6.60 237,600 228,750.00 278,800.00

People's Leasing Company PLC 500 13.10 6,550 - 25,000

People's Merchant Bank 1,800 13.50 24,300 12,900.00

Raigam Wayamba Salterns PLC 45,300 2.20 99,660 128,030.00

Seylan Merchant Bank Limited (Non Voting) 630,720 0.40 252,288 252,288.00 544,576.00

Seylan Merchant Bank Limited (Warrants 2015) - - - - 33,428.20

Seylan Merchant Bank Limited (Voting) 60,714 0.90 54,643 78,928.20 111,428.00


Seylan Development PLC 3,500 8.60 30,100 -

Softlogic Holdings PLC 1,000 10.40 10,400 11,200.00

Singer Sri lanka PLC 500 99.50 49,750 50,500.00

Shaw Wallace & Hedges Ltd. 200 245.00 49,000 41,000.00

Hydro Power Free Lanka 12,600 5.70 71,820 90,720.00 177,660.00

Hemas Power PLC 500 20.90 10,450 -

Hotel Reefcomber (Voting) 1,300 19.30 25,090 14,950.00 37,450.00

Hotel Reefcomber (Warrants 2017) - - - - 49,800.00

Hotel Reefcomber (Warrants 2018) - - - 10,650.00 12,000.00

Hotel Reefcomber (Warrants 2019) 1,500 2.50 3,750 8,200.00 9,850.00

Seylan Bank (Non Voting) 18,266 35.50 648,443 544,214.00 440,160.00

Seylan Bank (Voting) 4,666 65.20 304,223 312,155.40 263,200.00

Singer Finance 3,300 12.60 41,580 53,460.00 120,450.00

Sierra Cables Ltd 62,000 2.20 136,400 188,100.00 307,800.00

On'ally Holdings PLC 6,700 48.00 321,600 383,500.00

Aitken Spense 12,000 119.60 1,435,200 1,352,400.00 1,541,850.00

Pelwatte Sugar 2,400 - - 56,400.00 76,560.00

Tess Agro Ltd 43,000 2.00 86,000 102,600.00 148,500.00

Textured Jersey Ltd 2,000 9.90 19,800 14,400.00

Sampath bank Ltd 258 224.90 58,024 37,398.40 57,660.00

Amana Takaful 30,000 1.70 51,000 38,000.00 31,500.00

Kelani Tire Ltd 3,000 34.50 103,500 79,500.00 157,800.00

Union Bank Colombo Ltd 5,100 17.00 86,700 80,500.00 75,180.00

Unions Chemicals Lanka PLC 20 440.00 8,800 -

United Motors Lanka PLC 200 96.00 19,200 -

Vidulanka PLC 3,000 3.50 10,500 -

Tokyo Cement Lanka (Non Voting) 9,400 17.50 164,500 216,000.00 44,000.00

Touchwood Investment 22,900 5.70 130,530 189,100.00 101,050.00

Watawala Plantation 4,600 11.20 51,520 41,000.00 102,500.00

Vallibel One PLC 14,300 16.00 228,800 271,700.00

York Arcade 1,490 15.00 22,350 45,360.00

36,409,954 31,417,276 40,994,927

Description




12.SHORT TERM INVESTMENTS - CURRENT

Company


Shares @ Rs Rs Rs

Portfolio - 01

Lanka IOC PLC 17,800 20.40 363,120 382,700 313,280.00

Maskeliya Plantations PLC 1,200 12.10 14,520 20,520 33,720.00

Hemas Holdings PLC 3,750 27.00 101,250 98,625 172,500.00

Asia Capital PLC 660 22.80 15,048 24,750 57,948.00

First Capital PLC 600 11.20 6,720 23,760 13,260.00

Equity Two PLC 100 24.00 2,400 2,490 2,720.00

Sathosa Motors PLC 232 229.20 53,174 57,977 51,527.20

Royal Ceramics Lanka PLC 20 99.50 1,990 2,300 3,140.00

National Lanka Finance PLC 200 8.90 1,780 2,020 2,220.00

Sierra Cables PLC 10,900 2.20 23,980 35,970 58,860.00

Lanka Walltiles PLC 168 55.90 9,391 9,800 28,560.00

Raigam Wayamba Salterns PLC 15,500 2.20 34,100 48,050 69,750.00

COCO Lanka PLC - Non Voting 2,466 13.60 33,538 41,922 71,390.70

COCO Lanka PLC - Voting 2,170 18.00 39,060 56,746 86,474.50

-

Portfolio - 02 (Margin Trading) -

Asia Asset Finance Ltd. 2,000 2.20 4,400 7,800 -

ACL Cables Ltd 1,200 65.50 78,600 75,120 112,800.00

ACME Printing & Packing PLC 7,100 11.70 83,070 48,750 42,600.00

Access Engineering Limited 4,500 19.70 88,650 - 98,000

Aitken Spence Hotel 3,200 74.00 236,800 224,000 -

Industrial Asphalts(Ceylon) PLC 50 199.00 9,950 - -

Brown Investment PLC 51,400 3.30 169,620 165,000

Blue Diamond 2,000 3.00 6,000 12,200

Browns & Co Ltd 4,200 117.90 495,180 496,320 1,188,180.00

Bogawanthalawa Tea Estate 5,000 11.50 57,500 52,500 99,000.00

Cargill's (Ceylon) Ltd 500 151.80 75,900 87,000 115,000.00

First Capital Holdings PLC 22,500 11.20 252,000

V Capital Ltd - - - 246,400 486,200.00

Chemanex Ltd 2,100 74.00 155,400 192,850 253,460.00

Ceylon Hotel Corporation 500 16.80 8,400 11,450 15,700.00

Chemical IND Ltd (Non Voting) 2,000 46.60 93,200 136,710 162,000.00

Chemical IND Ltd (Voting) 1,780 61.00 108,580 28,680 46,500.00

Ceylon Investment Company 700 80.00 56,000 54,810 75,500.00

Commercial bank 917 113.00 103,621 91,700 79,740.00

Ceylon Theatres Ltd 2,341 126.20 295,434 351,384 420,000.00

C T Land Development Ltd 6,500 24.10 156,650 145,200 115,150.00

Colombo Land Development - 30.50 - - 10,800.00

Ceylon Leather Products (Warrants 2012) 1,000 - - 151,300 25,300.00

Ceylon Leather Products (Warrants 2014) 1,000 2.40 2,400 12,200 18,000.00

DFCC Bank 6,800 131.10 891,480 765,680 1,133,880.00

Dialog Axiata PLC 941,000 9.00 8,469,000 6,581,700 9,639,000.00

Dipped Products Ltd 3,500 111.00 388,500 330,330 383,130.00

Distilleries Company of Sri Lanka Limited 8,600 166.50 1,431,900 1,247,000 1,494,000.00

Colombo Dockyard Limited 575 214.10 123,108 120,750 76,530.00

Dankotuwa Porcelain 2,400 13.80 33,120 34,230 35,940.00

East west properties 2,500 13.00 32,500 32,750 -

E channeling 7,000 6.10 42,700 42,700 28,600.00

Eastern Merchants PLC 1,300 8.50 11,050

Expo Lanka Holdings PLC 19,500 6.80 132,600 74,400

Free Lanka Capital Holdings 271,900 2.50 679,750 511,800

Lanka Orix Leasing 1,500 57.00 85,500 59,400 71,760.00

Ceylon Grain Elevators Limited 2,600 49.70 129,220 103,360 16,810.00

Ceylon Glass Company Limited 11,500 6.10 70,150 61,000 111,000.00

Walker & Greig Limited (Warrants 6) 6,000 2.10 12,600

Walker & Greig Limited (Warrants 2015) - - - 32,500 177,000.00

Walker & Greig Limited (Voting) 18,200 15.60 283,920 260,400 579,750.00

Walker & Greig Limited (Warrants 2011) - - - - 34,600.00

Walker & Greig Limited (Warrants 3) 1,000 1.30 1,300

Walker & Greig Limited (Warrants 2013) - - - 6,400 16,850.00

Walker & Greig Limited (Warrants 2012) 2,100 - - 50,400 55,500.00

Hayley's Ltd 3,051 298.70 911,334 1,080,000 1,069,880.00

Haycrab Ltd 600 176.00 105,600 96,000 93,240.00

Hayleys Fibre PLC 1,500 29.00 43,500

Hayley's Exports Limited - - - 43,350 68,250.00

Description







Shares @ Rs Rs Rs

Hemas Holdings Limited 25,800 27.00 696,600 625,940 920,000.00

Hatton National Bank (Voting) 15,857 167.30 2,652,876 2,157,300 3,572,000.00

Hatton National Bank (Non Voting) - 131.80 - 56,700 42,660.00

Horana Plantation 1,700 26.50 45,050 37,650 144,600.00

HVA Foods - 11.20 - - 238,800.00

Janashakthi Insurance Co. Ltd 3,000 12.30 36,900 34,800 66,000.00

John Keells Holding Ltd 4,800 247.00 1,185,600 1,854,000 1,713,600.00

John Keells Hotels Limited 93,375 13.20 1,232,550 1,131,480 1,326,120.00

Lanka Aluminum Industries 1,845 27.00 49,815 12,550

Lanka IOC 186,000 20.40 3,794,400 1,429,750 693,440.00

Lankem Developments PLC 7,000 5.60 39,200

Laugfs Gas Ltd (Non Voting) 184,798 17.80 3,289,404 2,862,569 6,159,250.00

Laugfs Gas Ltd ( Voting) 2,900 24.50 71,050

Marawila Resorts Limited 2,750 6.00 16,500 8,750 11,000.00

Maskeliya Plantation Ltd 2,100 12.10 25,410 35,910 42,150.00

Merchant Bank 5,500 16.10 88,550 146,500 231,000.00

Hayley's MGT Knitting Mills Limited 4,900 10.20 49,980 57,120 32,040.00

Hayley's MGT Knitting Mills Limited (Right) - - - 800 -

National Development Bank 2,200 165.00 363,000 270,160 389,400.00

Nawaloka Hospitals Limited 53,000 2.90 153,700 164,300 212,000.00

Nation Trust Bank 5,100 61.00 311,100 290,190 305,200.00

Overseas Realty (Ceylon) Ltd 11,700 14.00 163,800 156,780 75,000.00

ODEL PLC 500 21.00 10,500 9,900 -

Orient Garment PLC 1,000 7.90 7,900

Pan Asia Bank 2,500 19.00 47,500 58,750 25,650.00

Pan Asia Power 10,000 2.70 27,000 20,800

P C House 9,400 3.00 28,200 77,080 152,190.00

Richard Pieris Co. Ltd 36,000 6.60 237,600 228,750 278,800.00

People's Leasing Company PLC 500 13.10 6,550 25,000

People's Merchant Bank 1,800 13.50 24,300 12,900

Raigam Wayamba Salterns PLC 45,300 2.20 99,660 128,030

Seylan Merchant Bank Limited (Non Voting) 630,720 0.40 252,288 252,288 544,576.00


Seylan Merchant Bank Limited (Voting) 60,714 0.90 54,643 78,928 111,428.00


Seylan Development PLC 3,500 8.60 30,100

Softlogic Holdings PLC 1,000 10.40 10,400 11,200

Singer Sri lanka PLC 500 99.50 49,750 50,500

Shaw Wallace & Hedges Ltd. 200 245.00 49,000 41,000

Hydro Power Free Lanka 12,600 5.70 71,820 90,720 177,660.00

Hemas Power PLC 500 20.90 10,450

Hotel Reefcomber (Voting) 1,300 19.30 25,090 14,950 37,450.00

Hotel Reefcomber (Warrants 2017) - - - - 49,800.00

Hotel Reefcomber (Warrants 2018) - - - 10,650 12,000.00

Hotel Reefcomber (Warrants 2019) 1,500 2.50 3,750 8,200 9,850.00

Seylan Bank (Non Voting) 18,266 35.50 648,443 544,214 440,160.00

Seylan Bank (Voting) 4,666 65.20 304,223 312,155 263,200.00

Singer Finance 3,300 12.60 41,580 53,460 120,450.00

Sierra Cables Ltd 62,000 2.20 136,400 188,100 307,800.00

On'ally Holdings PLC 6,700 48.00 321,600 383,500

Aitken Spense 12,000 119.60 1,435,200 1,352,400 1,541,850.00

Pelwatte Sugar 2,400 - - 56,400 76,560.00

Tess Agro Ltd 43,000 2.00 86,000 102,600 148,500.00

Textured Jersey Ltd 2,000 9.90 19,800 14,400

Sampath bank Ltd 258 224.90 58,024 37,398 57,660.00

Amana Takaful 30,000 1.70 51,000 38,000 31,500.00

Kelani Tire Ltd 3,000 34.50 103,500 79,500 157,800.00

Union Bank Colombo Ltd 5,100 17.00 86,700 80,500 75,180.00

Unions Chemicals Lanka PLC 20 440.00 8,800

United Motors Lanka PLC 200 96.00 19,200

Vidulanka PLC 3,000 3.50 10,500

Tokyo Cement Lanka (Non Voting) 9,400 17.50 164,500 216,000 44,000.00

Touchwood Investment 22,900 5.70 130,530 189,100 101,050.00

Watawala Plantation 4,600 11.20 51,520 41,000 102,500.00

Vallibel One PLC 14,300 16.00 228,800 271,700

York Arcade 1,490 15.00 22,350 45,360

36,356,914 31,366,836 40,901,717

Description


13. INVENTORIES


Rs Rs Rs Rs Rs Rs

Trading items 17,137,418 32,990,554 33,226,547 17,137,418 32,990,554 15,955,487

Raw materials FMCG 12,700,104 - 834,370 12,700,104 - 834,370

Work In Progress 194,564 - 861,840 194,564 - 861,840

Cement 5,386,116 8,568,988 994,911 5,386,116 8,568,988 994,911

Paraffin Wax - - 2,876,800 - - 2,876,800

Packing materials 1,205,180 276,036 486,300 1,205,180 276,036 486,300

Desiccated Coconut - 1,730,000 - 1,730,000 -

36,623,382 43,565,578 39,280,768 36,623,382 43,565,578 22,009,707

14. TRADE & OTHER RECEIVABLES


Rs Rs Rs Rs Rs Rs

Trade Receivables

Trade receivables 57,031,638 41,293,329 22,623,745 57,031,638 40,183,827 5,278,520

GST receivable 644,864 644,864 644,864 644,864 644,864 644,864

Staff loans & advances 155,000 96,190 - 155,000 96,190 -

Rent Receivable 53,216 53,216 53,216 53,216 53,216 53,216

VAT Receivable 2,190,280 5,748,016 4,824,745 421,402 3,979,138 3,651,035

Utilities Receivable 2,008,274 1,199,471 207,000 2,008,274 1,199,471 3,000

FD interest - 163,562 90,323 163,562 90,323

Festival Advance 38,150 33,600 38,150 33,600 -

PC Float - 120,000 39,250 120,000 39,250

Sampath Factoring & Leasing (Pvt) Ltd 12,962,211 6,995,244 12,962,211 6,995,244 -

Business Chamber of Commerce - 7,000 7,000 - 7,000 7,000

Shipping Guarantee Margin 7,487,000 7,487,000

Amounts due from directors 14.1 4,576,086 4,576,086 4,576,086 -

Dividend income receivable - 22,881 22,881 - 22,881 22,881

Deposits & prepayments 4,548,397 10,144,979 3,255,251 4,548,397 10,144,979 915,692

Recoverable expenses-Advertising 2,779,735 - - 2,779,735 - -

Mr. Zainudeen saifee Vila 386,800 386,800 - 386,800 386,800 -

94,861,650 71,485,237 36,344,361 88,516,687 64,030,771 10,705,781

14.1 Amounts due from directors- Mr. S.A Lukmanjee


Rs Rs Rs Rs Rs Rs

Balance as at 1 Apr 2012 4,576,086 4,576,086 4,576,086 - - -

Loans granted during the year - - - - - -

Balance as at 31 Mar 2013 4,576,086 4,576,086 4,576,086 - - -

Group Company

Group Company

Group Company

In order to protect the investment of Messrs Ceylon & foreign Trades PLC, the business of West Coast Lanka (Pvt) Ltd has been

transferred to and operated directly by Messrs Ceylon & Foreign Trades PLC.

Since the above implication will be fully implemented in the proceeding year, financial impact of these decisions will be reflected from

next year financial statements & onwards. The directors of the company has been performed a impairment test and they found there

is no impairment loss during the year.




15. AMOUNT DUE FROM RELATED COMPANIES


Rs Rs Rs Rs Rs Rs

West Coast Lanka (Pvt) Ltd - - - 17,392,826 18,352,563 15,455,450

Colombo Freight & Transport Ltd - - - 1,917,374 2,589,374 2,589,373

Network communication (Pvt) Ltd 10,469,231 5,149,349 10,758,644 8,002,144 2,682,262 8,291,557

Adam Apparel (Pvt) Ltd 3,565,148 3,565,300 980,000 3,565,148 3,565,300 980,000

14,034,379 8,714,649 11,738,644 30,877,492 27,189,499 27,316,380

Less: Provision for irrecoverable balances (912,385) (912,385) (912,385) (912,385) (912,385) (912,385)

Total 13,121,994 7,802,264 10,826,259 29,965,107 26,277,114 26,403,996

Group Company

16. INCOME TAX REFUND DUE


Rs Rs Rs Rs Rs Rs

Balance as at 1 Apr 2012 623,607 3,118,464 8,290,850 2,506,833 5,688,337 8,239,014

Transferred to WHT (2,980,357) - - (2,980,357) - -

Income tax provision for the year - (800,145) (2,890,606) - (781,568.46) (6)

ESC paid / Unclaimed ESC Written off 528,341 (2,616,950) (2,550,675) 528,341 (3,322,173) (2,550,675)

Provision for the current year (1,828,409) (298,630) 2,849,569 54,817 1,584,596 5,688,333

Deemed Dividend Tax paid 109,547 - 268,891 109,547 - -

Withholding tax paid 3,505,679 922,237 4 3,505,679 922,237 4

Balance as at 31 Mar 2013 1,786,817 623,607 3,118,464 3,670,043 2,506,833 5,688,337

17. CASH & CASH EQUIVALENTS


Rs Rs Rs Rs Rs Rs

Cash at bank 6,832,409 4,258,140 836,039 6,777,717 3,394,854 94,271

Cheques in hand - 1,059,999 - - 1,059,999 5,039,307

Cash in hand 381,183 365,859 5,272,219 281,387 157,947 25,000

7,213,592 5,683,998 6,108,258 7,059,105 4,612,800 5,158,577

Less : Bank overdraft (35,762,516) (45,158,731) (26,179,313) (35,762,516) (45,158,731) (22,696,926)

Cash & cash equivalents for the purpose of - -

cash flow statement (28,548,924) (39,474,733) (20,071,055) (28,703,411) (40,545,931) (17,538,348)

Bank Overdraft as at 31.03.2013

Union Bank- Head Office- 4784700017 5,363,134 5,447,968 4,327,136 5,363,134 5,447,968 4,327,136

Bank of Ceylon US $- 012710000016 25,544 25,544 25,544 25,544 25,544 25,544

Bank of Ceylon - Corporate Branch

A/C No : 0000 000 226 33,307 - - 33,307 - -

National Development Bank

US$ - A/C No : 106480002221 40,418 - - 40,418 - -

Union Bank - Head Office (FMCG)

A/C No. :4784700025 21,537,021 29,887,072 10,192,011 21,537,021 29,887,072 10,192,011

Sampath Bank-Head Office-002930006044 8,753,927 9,798,147 8,152,234 8,753,927 9,798,147 8,152,234

Union Bank '- A/C No : 4784700033 9,165 - 3,482,387 9,165 - -

35,762,516 45,158,731 26,179,313 35,762,516 45,158,731 22,696,925

Group Company

Group Company




18. STATED CAPITAL


Rs Rs Rs Rs Rs Rs

140,196,000 ordinary shares 14,119,600 14,119,600 14,119,600 14,119,600 14,119,600 14,119,600

Rights, Preferences and Restrictions of Classes of Capital

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at

meetings of the Company. All shares rank equally with regard to the company's residual assets.

Group Company

19. REVALUATION RESERVE


Rs Rs Rs Rs Rs Rs

Balance as At 01.04.2012 542,095,635 304,600,835 304,600,835 542,095,635 304,600,835 304,600,835

Surplus on revaluation of

land & buildings During the year - 237,494,800 - - 237,494,800 -

Balance on 31 Mar 2013 542,095,635 542,095,635 304,600,835 542,095,635 542,095,635 304,600,835

20. REVENUE RESERVE


Rs Rs Rs Rs Rs Rs

General Reserve 1,236,701 1,236,701 1,236,701 1,077,447 1,077,447 1,077,447

General Reserve represents the amounts set a side by the directors for general application.

21. INTEREST BEARING BORROWING


Rs Rs Rs Rs Rs Rs

Long Term

Balance on 1 Apr 2012 56,886,134 54,892,670 17,573,659 56,886,133 54,892,669 17,182,668

Loan received during the year 11,401,093 14,378,459 54,892,670 11,401,093 14,378,459 54,892,669

68,287,227 69,271,129 72,466,329 68,287,226 69,271,128 72,075,337

Repayments made during the year (4,279,004) (12,384,995) (17,573,659) (4,279,004) (12,384,995) (17,182,668)

Balance on 31 Mar 2013 64,008,223 56,886,134 54,892,670 64,008,222 56,886,133 54,892,669

Lease Liability 2,342,883 3,469,769 462,529 2,342,883 3,469,769 462,529

Payable in the ensuing year -

Balance due after one year 66,351,106 60,355,903 55,355,199 66,351,105 60,355,902 55,355,197

Short Term

Loan payable within one year 69,949,527 42,175,563 2,314,432 69,949,527 27,154,050 -

Packing credit & export & doc. credit loans 46,323,740 94,538,762 42,175,563 46,323,740 94,538,762 27,154,050

Lease instalments payable 1,061,899 1,712,136 523,661 1,061,899 1,712,136 523,661

Repayments made during the year (46,680,993) (66,764,797) (2,314,432) (46,680,993) (51,743,285) -

Balance on 31 Mar 2013 70,654,173 71,661,663 42,699,224 70,654,173 71,661,663 27,677,711

Group Company

Group Company

Group Company

Surplus on revaluation of Property, Plant & Equipment is a Capital Reserve arising from revaluation of Land & Buildings. The unrealized surplus cannot be

directly distributed to shareholders and can only be utilized for purposes specified under the Companies Act.




Details of Loans obtained by the Company is set out below

Granted Rate of Security

Date Interest (p.a)

Pan Asia Banking 14-Jul-10 18% On Demand On' ally Holdings PLC

Corporation PLC 2,798,850 No of shares

Commercial Bank of 28-Feb-11 AWPLR+3% On Demand On' ally Holdings PLC

Ceylon PLC 1,399,375 No of shares

Bank Facility Amount

Union Bank of Colombo PLC Overdraft,

Documentary

Credit Rs. 100 (Mn)

Packing Credit

Import/Short

term Loans

Leasing

AWPLR + 2.5%

Sampath Bank PLC Overdraft

Packing Credit

loan Rs. 55 (Mn)

Import Loan

AWPLR + 1.5%

AcceptanceExport bill

purchase USD 250,000/=

LIBOR + 4.5%

Habib Bank Limited Overdraft

Packing Credit

Loan Rs.50 (Mn)

Import Loan

AWPLR + 1.5%

Mortgage over stocks and assignment over book debts of

Rs.100.0Mn together with enhanced insurance covering all

risks assigned in favor of Union Bank

Security

Mortgage Bond Nos. 165 for Rs.20Mn & additional Mortgage

Bond for Rs.60Mn

Assets leased and indemnity of the company along with

comprehensive insurance and J & S Personal Guarantee of

Directors.

Join and several guarantee of three Directors of the company

S.A. Gulamhusein, T.A. Gulamhusein, and Ali Asger shabbir for

Rs.100 mn

Primary Mortgage Bond for Rs.55.0M over land &

building(Office & Warehouse Complex) situated at

No.414/18,K.Cyril C. Perera Mawatha Colombo 13.

Additional Mortgage Bond for US $ 250,000/- over the land and

building

Registered Mortgage on stocks in trade and receivables for Rs.

55.00M

65

60

Lender2011/2012 Repayment

Rs. Mn



21.1 LEASE LIABILITY


Rs Rs Rs Rs Rs Rs

Balance on 31 Mar 2012 6,117,322 1,085,557 419,546 6,101,477 1,069,712 403,701

Lease facilities received during the year - 7,213,138 1,014,312 - 7,213,138 1,014,312

Lease instalments paid during the year (2,209,904) (2,181,373) (348,301) (2,209,904) (2,181,373) (348,301)

3,907,418 6,117,322 1,085,557 3,891,573 6,101,477 1,069,712

Less: Interest In suspense

as at 31 Mar 2013 (486,791) (935,417) (99,367) (486,791) (919,572) (83,522)

3,420,627 5,181,905 986,190 3,404,782 5,181,905 986,190

Payable in the ensuing year 1,061,899 1,712,136 523,661 1,061,899 1,712,136 523,661

Balance due after one year 2,342,883 3,469,769 462,529 2,342,883 3,469,769 462,529

Balance on 31 Mar 2013 3,404,782 5,181,905 986,190 3,404,782 5,181,905 986,190

Group Company


25. AMOUNTS DUE TO RELATED COMPANIES


Rs Rs Rs Rs Rs Rs

Adammetals 1,300 100,000 1,300 100,000

TL - Adamexpo 4,831,987 4,831,987 4,329,133 3,297,468 3,297,468 2,794,614

TL - Spice of Life 16,016,959 16,016,959 16,016,959 16,016,959 16,016,959 16,016,959

20,850,246 20,848,946 20,446,092 19,315,727 19,314,427 18,911,573

Group Company



22. DEFERRED TAX LIABILITIES


Rs Rs Rs Rs Rs Rs

Balance as at 1 Apr 2012 107,896 494,165 563,386 (153,695) (19,086) (76,299)

Transferred from/(to) income statement 23,525 (386,269) (69,221) 23,525 (134,608) 57,213

Balance as at 31 Mar 2013 131,421 107,896 494,165 (130,170) (153,695) (19,086)

23. DEFINED BENEFIT PLANS - GRATUITY


Rs Rs Rs Rs Rs Rs

Balance as at 1 Apr 2012 466,505 347,302 206,813 247,224 134,864 155,750

Impact on changes on accounting policy

on 01.04.2011 (111,252) - (111,252)

466,505 347,302 95,561 247,224 134,864 44,498

Impact on changes on accounting policy

Over provision - (27,616) - (27,616)

Actuarial gain (177,517) 74,179 (177,517) 74,179

Provision during the year 182,579 132,141 251,741 182,579 125,298 90,366

Total 471,567 526,006 347,302 252,286 306,725 134,864

Payments during the year - (59,501) - - (59,501) -

Balance as at 31 Mar 2013 471,567 466,505 347,302 252,286 247,224 134,864

24. TRADE & OTHER PAYABLES


Rs Rs Rs Rs Rs Rs

Trade creditors 62,952,404 27,638,011 17,923,741 62,952,404 27,638,011 17,923,741

Rent & security deposits - 416,278 518,400 - 416,278 518,400

Accrued expenses 7,498,699 8,753,632 7,748,584 6,725,908 7,785,617 5,347,973

Tax on deemed distribution

of corporate profits 61,111 61,111 61,111 61,111 61,111 61,111

Due to director - Mos. S.S Lukmanjee 57,105 57,105 57,105 - - -

Due to director - Mr. M Ali 463,607 463,607 463,607 - - -

Due to director - Dr.S.A.Gulamhusain 1,700,000 1,100,000 100,000 1,700,000 1,100,000 100,000

72,732,926 38,489,744 26,872,548 71,439,423 37,001,017 23,951,225

Group Company

Group Company

Group Company


31. RELATED PARTY TRANSACTIONS

31.1 The Directors of Ceylon & Foreign Trades PLC are also the Directors of the following Related Companies.

Name of the Director WCL CF&T ONAL ADAM SOL NETCOM AAP BCC ADAM

EXPO INVST

Dr.S.A. Gulamhusein a a a a - - a aMr.T.A. Gulamhusein - a - - a - - - aMr.I. Shabbir - - - - a - - - aDr.A.A. Shabbir a - - - a a a - a

Mr.A.Y Tyebkhan - - a - - - - -

Dr. D.C. Gunesekera - - a - - - - -

Mr.L.W.W. Priyankara - - - - - - - - a

Mr.I. Zahir - - - - - - - -

Name of the Company Nature of the Relationship

West Coast Lanka (Pvt) Ltd Subsidiary

Colombo Freight & Transport Ltd Subsidiary

On'ally Holdings PLC Associate

Adamexpo Other Related Party

Spice of Life (Pvt) Ltd Other Related Party

Network Communications (Pvt) Ltd Other Related Party

Adam Apparels (Pvt) Ltd Other Related Party

Business Chamber of Commerce Other Related Party

Adam Investment (Pvt) Ltd Other Related Party

The Company carries out transactions in the ordinary course of its business with parties who are defined as related parties in Sri Lanka

Accounting Standard 30 “Related Party disclosures (Revised 2005)”, the details of which are reported below.The pricing applicable to

such transactions is based on the assessment of risk and pricing model of the company and is comparable with what is applied to

transactions between the company and its unrelated customers.

(WCL)

(CF&T)

(ONAL)

(ADAMEXPO)

(SOL)

(NETCOM)

(AAP)

(BCC)

(ADAMINVST)



26. CHANGES IN CLASSIFICATION

27. CAPITAL COMMITMENTS

There are no material capital commitments as at the Balance Sheet date.

28. CONTINGENT LIABILITIES

There are no material Contingent Liabilities as at the Balance Sheet date which require adjustment to or disclosure in the

Financial Statement.

29. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

No circumstances have arisen since the balance sheet date which would require adjustments to, or disclosure in the financial

statements.

30. DIRECTORS’ RESPONSIBILITIES

The Board of Directors is responsible for the preparation and presentation of theses financial Statement according to the Sri

Lanka Accounting Standards (LKAS/SLFRS) and Company Act No 07 of 2007.

To facilitate comparison, relevant balances pertaining to the previous year, have been re-classified to conform to current year’s

classification and presentation


31.2 Transactions of Ceylon & Foreign Trades PLC with Related Parties

Nature of Name of

Relationship Directors

West Coast Lanka (Pvt) ltd Subsidiary Dr.S.A.Gulamhusain There were no transactions during the year.

Mr. A. Shabbir

Colombo Freight & Transport Ltd Subsidiary Dr .S A Gulamhusein There were no transactions during the year.

Mr T A Gulamhusein

On'ally Holdings PLC (Dividend) Associate Dr.S.A.Gulamhusain

Company (Chairman)

Adamexpo Other Related Dr.S.A.Gulamhusain

Party (Proprietor)

CFT obtained financing facilities from Adam Expo

CFT recovers the utilities expenses from Adam Expo.

Spice of Life (Pvt) Ltd Other Related Mr.T. A Gulamhusain CFT obtained financing facilities from Spice of Life

Party Mr. I. Shabbir

Mr. A. Shabbir

Network Communications Other Related Mr. A. Shabbir There were no transactions during the year.

(Pvt) Ltd Party

Adam Apparels (Pvt) Ltd Other Related Dr.S.A.Gulamhusain

Party Mr. A. Shabbir

Business Chamber of Commerce Other Related Mr S A Gulamhusein

Party (Chairman)

Adam Expo occupied a portion of the CFT building during

the year

CFT has purchased DC & packing material from Adam

Expo and has also sold DC to Adam Expo.

CFT granted financing facilities to Adam Apparels(Pvt) Ltd

@ rate of 14%.

Business Chamber of Commerce has occupied a portion

of the building free of charge during the year.

CFT pays one half of the salary of the employees of

Business Chamber of Commerce

CFT received Interim dividend from On'ally Holdings

during

Nature of transactions

CFT charges a fee for processing of Ceylon Black Tea

from Adamexpo

Name of the Company




31 Mar 2013 31 Mar 2012

Rs Rs

31.2.1 Sale of Goods

West Coast Lanka (Pvt) Ltd - 6,703,108

31.2.2 Other Income

Adam Expo 648,803 621,661

On'ally Holdings PLC(Dividend) 8,896,591 8,739,591

31.2.3 Purchase of Goods

Adam Expo 59,560,610 63,606,373

31.2.4 Expenses incurred on behalf of related parties

Business Chamber of Commerce 165,000 60,000

31.2.5 Receivables

West Coast Lanka (Pvt)Ltd (Utilities) 17,392,826 18,352,563

Adam Expo (Utilities) 1,773,318 1,124,515

Adam Expo (Utilities) 2,532 2,532

Network Communication(Pvt)Ltd 7,922,144 2,746,753

Spice of Life 17,000 -

31.2.6 Payables

Network Communication(Pvt)Ltd 234,893 234,893

Adam Expo 47,077,162 25,918,011

31.2.7 Finance Facilities Obtained by CFT

Adam Expo 6,060,000 6,060,000

Spice of Life(Pvt)Ltd 16,033,959 16,033,959

Network Communication(Pvt)Ltd - 64,491

Chairman/Mr.S.A. Gulamhusein 1,700,000 100,000

31.2.8 Finance Facilities Granted by CFT

Adam Expo 2,760,000 2,760,000

Adam Apperals(pvt)Ltd 3,565,148 3,565,148

NOTES TO THE FINANCIAL STATEMENTS (Contd…) As At 31st March 2013




32. GOING CONCERN

33. DIRECTORS' INTEREST IN CONTRACTS

Nature of Name of Nature of Amount

Relationship Directors transactions Rs.

Ceylon & Foreign Trades PLC Parent Dr.S.A.Gulamhusein

1,700,000

Ceylon & Foreign Trades PLC Parent Mr.L.W.W. Priyankara 660,000

Dr.S.A.Gulamhusain has

granted an interest free

loan

Mr.L.W.W. Priyankara is an

executive director and the

group accountant of the

company, and he receives a

monthly remuneration of Rs.

55,000 from the company

Further Colombo Freight and Transport Limited, also a subsidiary has ceased a substantial part of its core operating

activities and as result of this situation company has suffered continuing operating losses.

However, the company management has given a representation on the company’s ability to function as a going entity

indicating that it will continue in normal course business in the foreseeable future.

The company management has performed an impairment test on both the entities and concluded that there were no

indications of impairment of investment in subsidiaries.

Name of the Company

No Transactions have occurred during the financial period between the company and its Directors which would

require disclosure in the financial

Board of Directors of West Coast Lanka (Pvt) Ltd resolved that the business of West Coast Lanka (Pvt) Ltd be

transferred to and operated by Messrs Ceylon & Foreign Trades PLC.

These matters indicate the existence of a uncertainty which may cast significant doubt about the subsidiary company

West Coast Lanka (Pvt) Ltd ability to continue as a going concern entity.

34. FINANCIAL INSTRUMENTS

COMPANY

Maturity Analysis of financial assets

Carrying Contractual 6 months 6-12 More than 1 yr

amount cash flows or less months 1-2 years 2-5 years 5 years

Trade & Other Receivables 88,516,686.54 88,516,686.54 - - - -

Cash & Cash Equivalents 7,059,104.55 7,059,104.55 - - - -

Short term investments 36,356,914.10 - 36,356,914.10 - - -

Amount Due from Related Companies 29,965,106.91 29,965,106.91 - - - -

161,897,812.10 125,540,898.00 36,356,914.10 - - -

Maturity Analysis of financial liabilities

Carrying Contractual 6 months 6-12


Trade and other payables 71,439,422.60 71,439,422.60 - - - -

Amount due to related parties 19,315,727.04 19,315,727.04

Bank overdraft 35,762,516.28 35,762,516.28 - - - -

126,517,665.92 126,517,665.92 - - - -

More than 1 yr




GROUP

Maturity Analysis of financial assets



Trade & Other Receivables 94,861,649.92 94,861,649.92 - - - -

Cash & Cash Equivalents 7,213,591.94 7,213,591.94 - - - -

Short term investments 36,409,954.10 - 36,409,954.10

Amount Due from Related Companies 13,121,993.94 13,121,993.94

151,607,189.90 115,197,235.80 36,409,954.10 - - -

Maturity Analysis of financial liabilities



Trade and other payables 72,732,926.16 72,732,926.16 - - - -

Amount due to related parties 20,850,245.84 20,850,245.84

Bank overdraft 35,762,516.28 35,762,516.28 - - - -

129,345,688.28 129,345,688.28 - - - -

More than 1 yr

More than 1 yr




Notes to the reconciliation of SLAS to SLFRS

RECONCILIATION OF STATEMENT OF FINANCIAL POSITION

AS AT 31ST MARCH

GROUP

ASSETS Rs. Rs. Rs.

Non-Current Assets

Property, Plant & Equipment 560,508,068 - 560,508,068 319,356,150 - 319,356,150 Intangible Assets 127,500 - 127,500 - - -

Investment Property 41,000,000 - 41,000,000 - - - Investment in Associate Company 352,665,047 2,749,944 349,915,103 323,779,368 - 323,779,368 Total Non Current Assets 954,300,615 2,749,944 951,550,671 643,135,518 - 643,135,518

Current Assets

Inventories 43,565,578 - 43,565,578 39,280,768 - 39,280,768 Trade & Other Receivables 71,485,237 - 71,485,237 36,344,361 - 36,344,361 Amounts Due From Related Parties 7,802,264 - 7,802,264 10,826,259 - 10,826,259 Income Tax Recoverable 623,607 - 623,607 3,118,464 - 3,118,464 Short Term Investments 35.4 31,414,286 2,990 31,417,276 40,994,927 - 40,994,927 Cash & Cash Equivalents 5,683,998 - 5,683,998 6,108,258 - 6,108,258

Total Current Assets 160,574,970 2,990 160,577,960 136,673,037 - 136,673,037 Total Assets 1,114,875,585 2,752,934 1,112,128,631 779,808,556 - 779,808,556

EQUITY AND LIABILITIES

Equity

Stated Capital 14,119,600 - 14,119,600 14,119,600 - 14,119,600 Revaluation Reserve 542,095,635 - 542,095,635 304,600,835 - 304,600,835 Other Reserves 35.5 - 37,073 37,073 35.7 - 111,252 111,252 General Reserve 1,236,701 - 1,236,701 1,236,701 - 1,236,701 Retained Earnings 327,731,580 (2,872,252) 324,859,328 286,483,282 - 286,483,282

Total Equity 885,183,516 (2,835,179) 882,348,337 606,440,418 111,252 606,551,670 Non Controlling Interest (7,309,094) - (7,309,094) 963,044 963,044

877,874,422 (2,835,179) 875,039,243 607,403,462 111,252 607,514,714

Non-Current Liabilities

Retirement Benefit Obligations 35.6 378,280 88,225 466,505 35.8 458,554 (111,252) 347,302 Deferred Tax Liabilities 107,896 - 107,896 494,165 - 494,165

Interest Bearing Borrowings 60,355,903 - 60,355,903 55,355,199 - 55,355,199 Total Non Current Liabilities 60,842,080 88,225 60,930,305 56,307,918 (111,252) 56,196,666

Current Liabilities

Trade & Other Payables 37,389,744 (1,100,000) 38,489,744 26,772,548 - 26,772,548 Amounts Due To Related Parties 71,661,663 - 71,661,663 42,699,224 - 42,699,224 Interest Bearing Borrowings 21,948,946 1,100,000 20,848,946 20,446,092 - 20,446,092 Bank Overdrafts 45,158,731 - 45,158,731 26,179,313 - 26,179,313

Total Current Liabilities 176,159,084 - 176,159,084 116,097,177 - 116,097,177 Total Equity and Liabilities 1,114,875,585 (2,746,954) 1,112,128,632 779,808,556 - 779,808,556

1-Apr-2011

Note SLAS

Effect of

Transition to

SLFRSs

SLFRS Note SLAS

Effect of

Transition to

SLFRSs

SLFRS

1-Apr-2012

35.1 Other Income 1-Apr-2012 35.2 Administration Expenses 1-Apr-2012

Balance as per SLAS 38,541,025.77

Balance as per SLAS 34,725,276.09 Fair value gain on investments 2,990.00

Impact on changes in accounting policies - Gratuity provision125,298.23

Balance as per SLFRS 38,544,015.77

Balance as per SLFRS 34,850,574.32




Notes to the reconciliation of SLAS to SLFRS

35.3 Income Tax Expense 1-Apr-2012 35.4 Short Term Investments 1-Apr-2012

Balance as per SLAS 2,435,380.51 Balance as per SLAS 31,414,286.20

Deferred tax 2,607,307.17 Fair value gain on Investments 2,990.00

Balance as per SLFRS 5,042,687.68 Balance as per SLFRS 31,417,276.20

35.5 Other Reserves 1-Apr-2012 35.6 Retirement Benefit Obligation 1-Apr-2012

Balance as per SLAS - Balance as per SLAS 378,280.29

Other comprehensive income - Acturial Gain 37,073.26 Impact on changes in accounting policies (111,251.98)

Balance as per SLFRS 37,073.26 Acturial Gain 74,179.00

Gratuity provision for the year 125,298.23

35.7 Other Reserves 1-Apr-2011 Balance as per SLFRS 466,505.54

Balance as per SLAS -

Other comprehensive income - Acturial Gain 111,251.98 35.8 Retirement Benefit Obligation 1-Apr-2011

Balance as per SLFRS 111,251.98 Balance as per SLAS 458,553.54

Impact in changes of accounting policies - Gratuity provision(111,251.98)

Balance as per SLFRS 347,301.56


-

50,000

100,000

150,000

200,000

250,000

300,000

Gro

up

Co

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Gro

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Co

mp

any

Gro

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Co

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any

Gro

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2009 2010 2011 2012 2013

Tu

rno

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(Rs.'000)

Turnover

(5,000)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2009 2010 2011 2012 2013

Rs.'000

Profit After Tax

Group Company

FIVE YEAR SUMMARY

(Figures are in '000s)

Group Company Group Company Group Company Group Company Group Company

OPERATING RESULTS

Turnover 241,443 241,443 202,232 198,610 157,151 103,236 105,356 83,771 222,206 214,411

Profit before Tax 14,303 7,184 35,147 22,364 30,096 6,963 4,557 (1,060) 6,155 427

Taxation (1,618) (24) (5,043) (647) (5,859) (57) (2,942) 308 (5,585) (124)

Profit after Tax 12,685 7,160 30,104 21,717 24,237 6,906 1,615 (752) 570 303

Cost of sales (203,668) (203,668) (164,186) (150,316) 126,888 94,119 90,987 76,407 204,616 201,881

Other Comprehensive

Income 177 177 (74) (74) - - - - - -

Total Comprehensive

Income 12,862 7,338 30,030 21,642 - - - - - -

EQUITY & LIABILITIES

Stated Capital 14,119 14,119 14,119 14,119 14,119 14,119 14,119 14,119 14,119 14,119

Reserves 543,547 543,388 543,370 543,173 305,949 305,789 305,837 305,678 287,145 286,985

Retained Earnings 336,912 38,701 324,859 32,763 286,483 11,047 262,390 4,141 261,529 4,893

Minority Interest (7,899) - (7,309) - 963 - 820 - 65 -

Non-Current Liabilities 66,954 66,473 60,930 60,449 56,197 55,471 12,677 11,986 21,304 18,035

Current Liabilities 199,999 197,172 176,159 173,136 116,097 93,138 91,797 85,471 64,810 60,165

1,153,632 859,853 1,112,128 823,640 779,808 479,564 687,640 421,395 648,972 384,197

ASSETS

Property, Plant & Equipment 556,284 554,389 560,508 557,632 319,356 315,491 320,609 315,957 304,337 298,852

Intangible Assets 85 85 127 127 - - - - - -

Investments 407,246 103,187 390,915 55,559 323,779 53,205 307,028 53,205 306,946 53,678

Inventories 36,623 36,623 43,566 43,566 39,280 22,009 12,955 6,253 7,374 3,391

Current Assets 153,394 165,569 117,013 128,794 97,393 88,859 47,048 45,980 30,315 28,276

1,153,632 859,853 1,112,128 785,677 779,808 479,564 687,640 421,395 648,972 384,197

PERFORMANCE INDICATORS

Earnings per Share(Rs) 0.09 0.05 0.27 0.15 0.17 0.05 0.01 (0.01) 0.00 0.00

Net Assets per Share (Rs) 6.32 4.25 6.24 4.21 4.33 2.36 4.16 2.31 4.01 2.18

Return on Equity (%) 1.42% 1.20% 3.41% 3.68% 4.00% 2.09% 0.28% -0.23% 0.10% 0.10%

Current Ratio 0.95 1.03 0.91 1.00 1.18 1.19 0.65 0.61 0.58 0.53

2013 2010 20092012 (* Restated) 2011 (* Restated)

FINANCIAL HIGHLIGHTS


FORM OF PROXY I/We the undersigned ....................................................................................................................... of ...................................................................................................................................................... being a member / members of Ceylon and Foreign Trades PLC hereby appoint:

Dr. Shabbir Abbas Gulamhusein of Colombo or failing him* Mr. Taher Abbas Gulamhusein of Colombo or failing him* Mr. Idris Shabbir of Colombo or failing him* Mr. Aliasger Shabbir of Colombo or failing him* Mr. Aliasghar Yusuf Tyebkhan of Colombo or failing him* Mr. Darindranath Charith Gunasekera of Colombo or failing him* Mr. Loolbadda Waduge Waruna Priyankara of Colombo or failing him* Mr. Imran Zahir of Colombo or failing him* ………….................................................................................................................................................... my/our proxy to represent me/us and to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at the Auditorium,3

rd Floor, “Olympic House”, 100/9F,

Independence Avenue, Colombo 07 on 21st October 2013 at 4.00 p.m. and at any adjournment

thereof and at every poll which may be taken in consequence thereof. For Against

1. To receive and adopt the Audited Accounts for the year ended

31st March 2013 and the Reports of the Directors and Auditors thereon.

2. To re-elect Mr. Idris Shabbir who retires by rotation in terms of Article

No.91 of the Articles of Association of the Company, as a Director

3. To re-elect Mr. Aliasger Shabbir who retires by rotation in terms of Article

No. 91 of the Articles of Association of the Company, as a Director.

4. To re-appoint Messrs. A.I Macan Markar & Co Chartered Accountants

as the auditors of the Company, for the ensuing year and to authorize the

Directors to determine their remuneration.

5. To authorise Directors to determine donations as they think fit for the

ensuing year and up to the next Annual General Meeting.

In witness my/our hands this .................. day of .......................... Two Thousand & Thirteen.

..................................................... Signature of Shareholder/s Notes: 1. A proxy need not be a member of the Company 2. Instructions as to completion of Proxy appear overleaf.

Please delete wherever inappropriate.


INSTRUCTIONS TO COMPLETION

1. This Form of Proxy must be deposited at No. 414/18, K.Cyril C. Perera Mawatha, Colombo 13, not less than 48 hours before the time fixed for the Meeting.

2. In perfecting the Form of Proxy please ensure that all details are legible.

3. If you wish to appoint a person other than the Chairman (or failing him, one of the Directors) as your proxy, please insert the relevant details.

4. Please indicate with an ‘X’ in the space provided how your proxy is to vote on the Resolution. If no indication is given, the proxy in his discretion will vote as he thinks fit.

5. In the case of a Company/Corporation, the proxy must be under its Common Seal which should be affixed and attested in the manner prescribed by its Articles of Association.

6. In the case of a proxy signed by an Attorney, the Power of Attorney must be deposited at The Secretaries’ Office (i.e. P W Corporate Secretarial (Pvt) Ltd., 3/17, Kynsey Road, Colombo 8) for registration.

Documents

Annual Report 2012/2013 Ceylon and Foreign Trades PLC