ANNUAL REPORT - Colombo Stock ExchangeC T Holdings PLC 01 Annual Report 2016/17 We are... Professionals inspired by the ingrained family values inherited over generations Value creators

Creating Value since 1928

C T Holdings PLC - 2016/2017

ANNUAL REPORT

ContentsWe are... 01

Our Business at a Glance 02

Milestones 03

What we do... 04

Financial Highlights 06

Chairman’s Statement 08

Profile of Directors 10

Management Discussion and Analysis 12

Corporate Governance 20

Risk Management 22

Report of the Remuneration Committee 24

Report of the Nominations Committee 25

Report of the Related Party Transactions Review Committee 26

Financial StatementsAnnual Report of the Board of Directors of the Company 28

Report of the Audit Committee 30

Statement of Directors’ Responsibilities 32

Independent Auditors’ Report 33

Statement of Profit or Loss and Other Comprehensive Income 34

Statement of Financial Position 35

Statement of Changes in Equity 36

Statement of Cash Flows 38

Notes to the Financial Statements 40

Five Year Review - Group 112

Group Directory 113

Information to Shareholders 116

Notice of Meeting 118

Form of Proxy 119

Corporate Information Inner Back Cover

01C T Holdings PLCAnnual Report 2016/17

We are...Professionals inspired by the ingrained family values inherited over generationsValue creators driven by innovation and technology towards building strong brandsAccountable firmly committed to transparency and good governanceDedicated to people as our most important assetSocially responsible pursuing trusted leadership

02 C T Holdings PLCAnnual Report 2016/17

C T Holdings PLC then known as Ceylon Theatres Limited was incorporated in 1928 with its primary focus on the entertainment industry. The Company owned and operated a string of cinemas in various parts of the country including such well-known destinations as Regal Colombo, Empire and Majestic cinemas.

The Company also set up the first film production and processing facilities in the country with the establishment of Ceylon Studios Ltd in 1956, thus paving the way for the development of the local film production expertise.

Despite the Company’s first production “Asokamala” being unsuccessful, the Company persevered to subsequently produce hit films such as “Golu Hadawatha”, “Akkara Paha”, “Sakman Maluwa” etc. The hit film “Nidhanaya” was adjudged the best Sri Lankan film produced in the past 50 years.

Anticipating the effects of the changes within the film industry in the 1970s and 80s, the Company began to diversify into other areas of business, notably, consolidating its interest in Millers Limited and through it, Cargills (Ceylon) Ltd. Millers Ltd was subsequently merged with C T Holdings PLC.

The Company also diversified into Financial Services and Real Estate. The subsidiary Cargills shed the Department Store concept to introduce and expand the Supermarket concept to Sri Lanka. This change was to be the most significant change to the Group and the backbone of future growth. Cargills also expanded into Food Processing, Dairy, Agri Business and Confectionery. A fully fledged Commercial Bank under the name ‘Cargills Bank’ has also been set up by the Group. All this while also staying true to its roots in cinema business by developing cinemas with digital sounds, 3D viewing and upgrating facilities for patrons.

C T Holdings is now a diversified Group with interest in Retail, Fast Moving Consumer Goods, Distribution, Real Estate, Entertainment, Banking and Financial Services.

Our Business at a Glance


1928Ceylon Theatres Limited established, focusing primarily on the entertainment industry by Sir Chittampalam A. Gardiner.

1981Acquired Millers and Cargills and ventured into retail and distribution under the leadership of Mr. Albert A Page.

1991Completed the Majestic City shopping and entertainment mall through C T Land Development PLC.

1992Entered the financial services sector through C T Smith Stockbrokers (Member, Colombo Stock Exchange) – now re named as C T CLSA Securities (Private) Limited.

Cargills diversified into food processing with the acquisition of the Goldi processed meat plant – now known as Cargills Quality Foods Ltd.

1996KFC franchise awarded to Cargills.

1999Entered the Ceramic / Tiles, Plantation and Packaging sectors.

2002Cargills acquired the Walls Ice Cream plant and CPC/Best foods production facility of jams, cordials and sauces.

Milestones

2006Cargills commissioned its new state-of-the art meat processing facility.

2008Ceylon Theatres merged with Millers PLC to create an investment holding Company.

Cinema exhibition operation transferred to a wholly owned subsidiary, Ceylon Theatres (Private) Limited.

2009C T Properties Limited completed its flagship ‘Empire’ residential development project.

2010Name of Ceylon Theatres PLC changed to C T Holdings PLC

2011Cargills acquired controlling interest in Kotmale Holdings PLC. Cargills also acquired Diana Biscuits Manufacturers (Private) Limited (subsequently re-named Cargills Quality Confectioneries (Pvt) Ltd).

2012Cargills entered the brewery sector.

Ceylon Theatres added three new screens to the Majestic Cineplex including Sri Lanka’s first ever 3D cinema.

2013Cargills set up the TGI Fridays Franchise Restaurant in Colombo, Fort.

2014Group received license to set up and operate a Commercial Bank.Cargills Square Mall opened in Jaffna.

Exited the Ceramic / Tiles, Plantation and Packaging sectors.

2015Retail sector comprising the supermarkets spun off into a separate company with new direct equity injection into the Company.

Two new cinema screens set up by Ceylon Theatres at Arcade Independence Square, the Group’s Regal cinema was fully refurbished.

Cargills exited the brewery sector.

2016Cargills Bank network increased to 11 branches.

2017Cargills commissioned the expanded dairy facility.

Cargills Square mall Gampaha opened with a supermarket, KFC and two cinema screens.


What we do...

Retail and Wholesale Distribution

Fast Moving Consumer Foods (FMCG)

Real Estate

The retail sector of the Group functions under Cargills Foods Company (Pvt) Ltd. The modern trade arm covers all districts of the island through Cargills Food City and Food City Express store formats. Cargills Food City has been rated the 10th most valuable brand in Sri Lanka as per the Brand Finance Index ratings of 2016 with a AA+ rating and is the only Retailer ranked in the top ten of national brands. This sector maintains a backward integration model with local fruit and vegetable collection centres in every district of the island.

Millers Limited the marketing and distribution arm holds the agency rights for leading international food brands reaching 40,000 groceries islandwide. The Company is also the distributor for the Group’s own brands.

The Group’s FMCG brands are some of the widest consumed household brands in the Country which include, ‘Magic’ and ‘Kotmale’ dairy products, ‘Kist’ range of jams, cordials, nectars, juices and accompaniments, ‘Cargills Finest’, ‘Goldi’ and ‘Sams’ processed meats and ‘Kist’ brand of confectioneries. The sector operates some of the most modern facilities with many ISO International Standard certifications among them such as ISO 9001: 2000 Quality Management System certification, ISO 22000: 2005 Food Safety Management System certification and ISO 14001: 2004 Environment Management System certification.

C T Land Development is a long established name in the Real Estate and Property sector. The Company owns and operates ‘Majestic City’, the largest and most popular shopping and entertainment mall in the Country. The Group also owns and operates the Cargills Square Malls in Jaffna and Gampaha. Property development operations under C T Properties which previously completed the ‘Empire’ luxury apartment complex in Colombo 2 and C T Gardens Township project in Piliyandala.


RestaurantsThe restaurants’ sector includes the world renowned ‘KFC’ and ‘TGIFridays’ franchises with 30 KFC restaurants and one flagship TGIF Restaurant.

Banking and Financial ServicesCapital Market operations of the Group are carried out under C T CLSA Holdings Ltd, which covers stockbroking, advisory services and capital market solutions. The Group is also the promoter shareholder of Cargills Bank.

EntertainmentThe Group has been associated with the national cinema industry for over 80 years with the making of the first national production and thereon producing landmark motion pictures that have won international acclaim. Ceylon Theatres (Private) Limited is engaged in operating twelve cinema screens in six locations.


Financial Highlights

Group Company

2017 2016 Change 2017 2016 Change Rs. ‘000 Rs. ‘000 % Rs. ‘000 Rs. ‘000 %

OperationsRevenue 85,037,781 72,399,182 17.46 - - -Results from operating activities 5,798,305 4,135,309 40.21 (142,988) (91,445) 56.37Profit before taxation 4,690,108 3,662,324 28.06 1,323,215 592,191 123.44Profit for the year 2,667,014 2,318,207 15.05 1,298,524 568,871 128.26

Profit attributable to owners of the Company 1,747,876 1,626,228 7.48 1,298,524 568,871 128.26

Per Share DataEarnings Per Share (Rs.) 9.55 8.88 7.50 7.09 3.11 128.04Dividends Per Share (Rs.) 5.20 3.80 36.84 5.20 3.80 36.84Dividend Cover (Times) 1.84 2.34 (21.37) 1.36 0.82 65.85

Shareholders’ InterestStated Capital 3,194,008 3,194,008 3,194,008 3,194,008Total equity attributable to equity holders of the parent 18,794,039 18,859,682 7,580,200 7,774,641Return on equity attributable to equity holders of the parent (%) 9.30 8.62 17.13 7.31Total equity attributable to equity holders of the parent per Share (Rs.) 102.65 103.00 41.40 42.46

LeverageNet finance expenses 1,131,121 393,626 - -Interest cover (Times) 5.13 10.51 - -Borrowings (including overdrafts) 18,579,107 13,760,296 - -Borrowing as a Percentage of total equity attributable to equity holders of the parent (%) 98.86 72.96 - -

NoteEarnings, dividends and shareholders funds per share have been calculated based on the number of issued shares presently in issue.

Retail 80.11%Real estate 0.60%FMCG 15.05%Restaurants 3.84%Entertainment 0.40%

Retail 46.59%Real estate 11.31%FMCG 34.80%Restaurants 6.13%Entertainment 1.17%


Rs. 2,667 MnProfit for the year

Rs. 85.04 BnRevenue

Rs. 9.55Earnings Per Share

Rs. 5.20Dividend Per Share

Rs. 22.20 BnTotal Equity

Rs. 57.86 BnTotal Assets

Revenue (Rs. Bn)

13 14 15 16 170

20

40

80

60

100

Profit for the year (Rs. Mn)

13 14 15 16 170

1,000

2,000

3,000

4,000

Earnings Per Share (Rs.)

13 14 15 16 170

2

4

6

8

10

12

Dividend per share (Rs.)

16 1713 14 150

2

3

1

4

5

6

7

8

9


The investments made by the Group over the past few years have also begun to show growth and profitability.

We are pleased to present the Annual Report of the company for the year ended 31st March 2017. This report sets out details of the financial performance of CT Holdings PLC (the Company), the Company and subsidiaries (the Group) as well as statutory and other information and disclosures.

At the outset I must express my satisfaction at the performance of the Group during the year. We focused on steady continuous growth / improvement while sustaining the growth and profitability momentum of the past few years. Our overall performance confirms that the objectives for the year were largely met.

OperationsThe Group’s two largest sectors of operation namely Retail and FMCG are closely linked with the rural agricultural economy. From the time the Group launched its first supermarket (way back in the year 1983), this sector has enjoyed steady and continuous growth. Presently, the CFC operates 300+ supermarkets spread across every district of the Island – Mannar being the most recent. Despite the growth of our chain of stores as well as others during the past 5 years, recent studies reveal that the penetration of modern trade across the island is below 20%. This confirms the growth enjoyed by the retail trade in general and the opportunities available in this sector. The Group looks forward to further prudent investments in this sector in the coming years to take modern trade to the masses and keep this key avenue available for the marketing and distribution of local primary produce.

Chairman’s Statement

The FMCG sector covers Dairy, Meat, Agribusiness and confectionery subsectors. These subsectors too showed continuous growth over the past few years. The growth is fuelled by increasing consumption levels as well as the market acceptance of the innovative and high quality products marketed by the subsectors. We believe that we have built and operate a base of food processing facilities capable of some of the best food products in the said categories. These facilities, together with the marketing capacity and our retail network could be used for further growth.

Increasing food processing volumes also necessitated capacity enhancements. The Group’s dairy sector commissioned its expanded dairy facility in Banduragoda in March 2017 under the patronage of His Excellency the President Mr. Maithripala Sirisena. The investment (which was implemented over two years) increased the receiving, storage and other infrastructure at the facility. Subsequent to the expansion, the facility can now process an average of 100,000 litres of fresh milk each day.

PerformanceWe consider the performance of the Group to be creditable in the overall economic backdrop. While top line revenue continues to show steady growth concerted efforts are made to improve efficiency and reduce costs.

Group revenue increased over the previous year by 17.4% to reach 85.03 Bn while profit before taxation increased by 38.2% over 2016. Net profit was, however, impacted by increased finance costs and tax liabilities.

Profit for the year attributable to owners (Rs. Bn)

13 14 15 16 170

500

1,000

1,500

2,000

2,500

Rs. 1.75 BnProfit for the year attributable to owners


Banking InvestmentCargills Bank has now settled into an efficient mode of operations with improved performances across all areas of the Bank. It is focused on technology as a key driver of efficiency, convenience and rapid growth to achieve this during the current and next financial years.

Real EstateThe Group also intends to benefit from economic growth in the provinces by setting up Mini Malls in key provincial cities and in the suburban areas of the western province. The Group’s retail, restaurant and cinema brands would function as anchor tenants at these development projects. A new Mini mall was opened in Gampaha town in March 2017. Other such Mini Malls are planned for the upcoming years.

Fixed Assets and InvestmentsThe investment by the Group in property, plant and equipment during the year amounted to Rs. 4.57 Bn compared to Rs. 1.87 Bn in the previous financial year. The investments have been funded through internally generated funds and borrowings. At the Company level there were no investments in property, plant and equipment either during the current or previous year.

DirectorateI am pleased to welcome Mr. Imtiaz Abdul Wahid and Mr. S C Niles to the Board of C T Holdings PLC.

Mr. Wahid has been associated with the Group for over twenty years and presently functions and Managing Director / Deputy CEO of Cargills (Ceylon) PLC. He also functions as a Director of many

other Companies within the Group. He counts many years of senior managerial experience with the Group as well as in overseas companies. We look forward to his valuable contribution to the Board of CT Holdings PLC.

Mr. Niles functioned in the capacity of Director – Group Corporate Affairs of C T Holdings PLC prior to his appointment as Executive Director of the Company.

All other Directors of the Company were Directors for the entire year under review.

Stated CapitalThe stated capital of the Company is represented by 183,097,253 ordinary shares (same as in the previous year). There were no new issue of shares during the year.

AppropriationsThe company declared a first interim dividend of Rs. 1.00 per share on 19th January 2017 (2016 – Rs. 1.00) and a second interim dividend of Rs 3.50 per share on 28th March 2017 (2016 final dividend – Rs 2.80 per share). The Directors do not recommend a final dividend out of the profits for the year ended 31st March 2017.

ConclusionWe note with confidence the economic developments taking place in our country and anticipate future opportunities to the Group through increased consumption. Such growth would also filter through to primary producers through the many collection centres and our business locations. The investments made by the

Group over the past few years have also begun to show growth and profitability. We, therefore, look forward with optimism to the future.

AcknowledgmentsOn behalf of the Board of Directors, I wish to place on record my sincere thanks to our Customers, Bankers, Suppliers and Principals and appreciate the support extended to us during the year. I also thank our shareholders for their encouragement and continued confidence in our Group.

Finally, I wish to mention my sincere thanks to all my fellow Directors and staff for the assistance and cooperation rendered during the year.

(Signed)Louis PageChairman6th June 2017


Mr. Anthony A Page(Chairman Emeritus)Mr. Anthony Page counts over 40 years of management experience in a diverse array of businesses. He is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and a Fellow Member of the Institute of Certified Management Accountants of Sri Lanka.

He served on the Board of the Colombo Stock Exchange and several public listed and non-listed Companies. Mr. Page also served as a Council Member of the Employers Federation of Ceylon.

Profile of Directors

Board of DirectorsMr. Louis Page(Chairman)Non-Executive DirectorLouis R. Page is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and a Fellow Member of the Chartered Institute of Management Accountants (UK). He is the Chairman of Cargills (Ceylon) PLC and Cargills Bank Ltd. He has also held a number of Board and Senior Management positions at the highest level in overseas public companies and public institutions.

Mr. Ranjit Page(Deputy Chairman / Managing Director)Executive DirectorMr. V. Ranjit Page possesses over 30 years of management experience with expertise in food retailing, food service, and manufacturing, having introduced the concept of super marketing to the Sri Lankan masses. He also serves on the boards of several C T Holdings Group companies.

Mr. J B L De SilvaIndependent Non-Executive DirectorMr. J. B. L. De Silva, a Lawyer by profession, has substantial experience in the rubber trade. He is a past Chairman of the Colombo Rubber Traders’ Association and is a Director of other listed and non-listed companies.

Mr. Priya EdirisingheIndependent Non-Executive DirectorMr. A. T. Priya Edirisinghe is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka, Fellow Member of the Chartered Institute of Management Accountants (UK), and holds a Diploma in Commercial Arbitration. He was the Senior Partner of Baker Tilly Edirisinghe & Co., Chartered Accountants and currently serves as Consultant/Advisor. He is the Managing Director of PE Management Consultants (Pvt) Ltd. He counts over 45 years’ experience in both public practice and in the private sector. He serves on the boards of a number of other listed and non-listed companies where in some companies he also serves as Chairman / Member of the Audit Committee, Related party Transaction Review Committee and Member of the Remuneration Committee. Mr. Edirisinghe is the Chairman of the Company’s Audit and Related Party Transactions Review Committees and a member of the Company’s Remuneration and Nominations Committees.

Mr. Sunil MendisIndependent Non-Executive DirectorDesamanya Sunil Mendis was formerly the Chairman of Hayleys Group, and a former Governor of the Central Bank of Sri Lanka. He possesses around 50 years of wide and varied commercial experience, most of which has been in very senior positions. Mr. Mendis serves as a member of the Company’s Audit, Related party Transaction Review Committee and Remuneration Committees, and also serves on the Boards of several other Group companies.

Mrs. Cecilia MuttukumaruNon-Executive DirectorMrs. Cecilia Muttukumaru is the Chairperson of C T CLSA Securities (Private) Limited, C T CLSA Capital (Private) Limited, and Comtrust Asset Management (Private) Limited. She is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and a Fellow Member of the Chartered Institute of Management Accountants (U.K.).

Dr. A. Aravinda PageNon-Executive DirectorDr. A. Aravinda Page, MA (Cantab), M.B.B. Chir, MRCS (UK), is a specialty registrar in cardiothoracic surgery and is currently attached to Papworth Hospital NHS Foundation Trust, Cambridge, UK.


Mr. Joseph PageNon-Executive DirectorMr. Joseph C. Page is the Deputy Chairman / Managing Director of C T Land Development PLC. He is also a Director of Cargills (Ceylon) PLC, Ceylon Theaters (Pvt) Ltd and C T Properties Limited. Prior to joining C T Land Development PLC, he was the Executive Director of Millers Limited. He has over 30 years of management experience in the private sector.

Mr. R SelvaskandanIndependent Non-Executive DirectorMr. R. Selvaskandan is an Attorney-at-Law (SL) and Solicitor (England & Wales and Hong Kong) and was a senior partner of a leading law firm in Hong Kong prior to joining the property sector of the C T Holdings Group. He is the Chairman of C T Land Development PLC, Deputy Chairman of C T Properties Limited and a Partner of Varners, a Law firm based in Sri Lanka. He has more than thirty years’ experience in legal practice and management in Sri Lanka, UK and Hong Kong

Mr. A D B TalwatteIndependent Non-Executive DirectorMr. Asite Talwatte is a fellow member of the Institute of Chartered Accountants of Sri Lanka (ICASL) and the Chartered Institute of Management Accountants of the U.K. He also holds a Post-Graduate Diploma in Business and Financial Administration awarded by ICASL and the University of Wageningen, Holland and has a MBA from the University of Sri Jayawardenapura, Sri Lanka. Mr. Talwatte has also participated In a Kellogg Executive Programme at the Kellogg Graduate School of Management, Northwestern University, Evanston, Illinois.

Mr. Talwatte worked at Ernst & Young in Assurance, Business Risk and Advisory Services for 37 years, including 10 years as Country Managing Partner. He has worked with Ernst & Young in Cleveland, Ohio and also served on Ernst & Young’s Far-East Area Executive Committee, the Area Advisory Council and the ASEAN Leadership Committee.

Mr. Talwatte was President of the CA Sri Lanka for a 2 year period in 2002/2003 and the CIMA in 1995/96. He also served as the Chairman of the Statutory Accounting standards Committee and the Auditing standards Committee, the Urgent Issues Task Force and the Examinations Committee of ICASL. At CIMA he served as Chairman of the Management and Professional Development (MPD) Committee.

Mr. Talwatte has been closely associated with the development of Corporate Governance in Sri Lanka being actively involved with the Code of Audit Committees in 2002 and the Code of Corporate Governance of 2003. He co-chaired the Committees to structure the revised Code of Corporate Governance (of 2008) and the Listing Rules and a Committee on Corporate Governance set Up by ICASL jointly with the SEC to review and revise the Code of Corporate Governance. He currently chairs the Committee to review the applicability of Integrated Reporting in Sri Lanka and the Committee reviewing the Corporate Governance Code.

Mr. Talwatte has served as a Non-Executive Director on boards of listed companies, public companies and state owned enterprises.

Imtiaz Abdul WahidNon-Executive DirectorMr. M. Imtiaz Abdul Wahid is an Associate Member of the Institute of Chartered Accountants of Sri Lanka and a Fellow Member of the Chartered Institute of Management Accountants (UK). He has been involved in the operations of the subsidiary company Cargills (Ceylon) PLC in an executive capacity at different intervals progressively at higher levels (appointed Director 1997 and Deputy Managing Director in 2001) spanning a period of over 25 years, leaving the services of the company for employment abroad on two occasions in between whereby he also gained valuable exposure holding a number of senior management positions in overseas companies. He was appointed Managing Director/ Deputy CEO of Cargills (Ceylon) PLC in May 2010.

S C NilesExecutive DirectorMr. Sanjay Niles is an Associate Member of the Institute of Chartered Accountants of Sri Lanka and the Chartered Institute of Management Accountants, UK. He is also a Director of CT Land Development PLC, Managing Director of Ceylon Theatres (Pvt) Ltd and a Directors other Companies within the CT Holdings Group.


Retail and wholesale distributionThe retail sector consists of the Food City and Food City Express formats and constitutes the largest sector of operations for the Group. The operations are carried out under the subsidiary Cargills Foods Company (Pvt) Ltd (CFC), in which the Group has a 92% direct holding.

During the year CFC upgraded stores in three key urban centres. These stores offer a better customer experience and wider selection to suit the need of the modern customer. The initial response of customers has been very encouraging. A few more stores are also planned with the same concept in the ensuing years.

The Group’s unique backward integration model developed to connect the primary producers direct to the consumers has many benefits to the producers and customers. It allows for a reduction in handling, maintenance of freshness and consequently less damages and wastage. The savings made in this process benefits both the customer and the producers.

Keeping costs and wastage at a low level is a key part of the operations of the retail sector. We spare no efforts in this regard. Continuous improvement of the processes linked to handling and managing our merchandise offers great benefits to the operations of this sector. The Company is in the process of mechanising and uplifting its fresh food processing and distribution facilities. This will enhance the quality of fresh produce it offers to the end customer taking its competitive advantage to a distinctive level while further reducing the wastage and handling costs.

Management Discussion and Analysis

Wholesale distribution sector distributes some of the most famous imported food brand in the country. These include Kraft, Toblerone, Bonlac, Cadbury, Nabisco, Tang, Meadowlea, Belle, Alpelle etc. During the year this sector also added Ballantyne and Mc Vitie’s. The introduction of more shelf safe products also boosted volumes of this sector.

Adverse weather conditions and inconsistent government fiscal policies had some impact on the performance of this sector during the year. Despite this, revenue of the retail sector grew by 18.46% over the previous year to end at Rs. 68.12 Bn. Profits of the sector for the year amounted to Rs 1.23 Bn which was 39.25 % above the previous year.

Revenue (Rs. Bn)Retail and Wholesale Distribution

13 14 15 16 170

10

20

30

40

50

70

60

80

Segmental Profit (Rs. Mn)

Retail and Wholesale Distribution

13 14 15 16 170

500

1,000

1,500

2,000

Fast moving consumer goods (FMCG)Dairy constitutes the largest segment of the FMCG sector and operates under Cargills Quality Dairies (Pvt) Ltd and Kotmale Holdings Group. The companies manufacture products under both ‘Kotmale’ and ‘Magic’ brands. The Companies produce a range of dairy products spanning liquid milk, flavoured milk (ready to drink), curd, yoghurt, ice cream and cheese. These categories are further subdivided into a wider range of products. Yoghurt for instance has set yoghurt, stirred yoghurt and drinking yoghurt. Stirred Yoghurt with fresh fruit was introduced during the current year and widely accepted. Dairy ice cream has enjoyed significant growth year on year over the past few years. The Company’s signature impulse range of cones, cups and sticks are ever popular with consumers. The Companies are the largest producers of dairy Ice Cream in the country.


“Presently the Group operates 300+ supermarkets spread across every district of the Island.”

Sourcing of raw material locally is an important feature of this sector as well. The sector has set up chilling centres in key dairy producing areas in order to collect fresh milk directly from the producers – most of whom are small holders with a limited herd. During the year we set up four new chilling centres in the North Western and North Central provinces – a boon to dairy farmers in those areas. The Company presently collects an average of 115,000 litres of fresh milk per day and is the second largest private collector in the country.

The dairy sector operates two production facilities in the Western Province and one in Hatton in the Central Province. The facility in Hatton specialises in the manufacture of a range of cheeses under the Kotmale brand. The product is well accepted in the market resulting in the

production facility running at close to full capacity. The main production facility at Banduragoda has been upgraded in stages over the past few years.

The Meat sector (a subsector under FMCG) includes fresh and processed meats. Processed meats are produced and marketed under three brands, namely ‘Goldi’, ‘Sams’ kids range and ‘Finest’ premium range. Fresh meats are primarily supplied to the Group’s supermarkets. The products are distributed through mass market channels, direct to Hotels, restaurants and catering establishments and through supermarkets. The three brands are household names with wide acceptance. Despite periodic adverse market perceptions on the health effects of processed foods, this sector enjoys a steady growth and has a stable market presence.


We expect the steady performance to continue in the future as well.

The Agribusiness sector integrates well with the business model of the retail sector and the Group as a whole. This sector produces a range of jams, cordials, sauces and nectars under the ‘Kist’ brand name. This sector also produces condiments such as pickle, vinegar, chutney, sambol, chillie paste etc. and packs spices for sale through the Supermarkets. This sector maintains market leadership in the sauces and nectar categories and is on par with competition in the Jams category. The products are manufactured at the facility located at Katana and a primary processing facility in Kilinochchi and distributed island wide.

The Agribusiness sector also operates a high quality bottled drinking water facility close to the Knuckles mountain range. The product is marketed under the premium brand ‘Knuckles’. From an initial low volume, this business has grown substantially over the past few years, thus necessitating new investments in the bottling facility during this year. The bottled water is sold through supermarkets and a few selected eateries and franchise outlets.

The confectionery business functions under the ‘Kist Biscuits’ brand name. The production facility is located in the Matale district. Operating in a business sector dominated by two large established players, the business slowly achieved a niche market share. We are confident that this business would continue to expand and achieve adequate returns in the future years.

Revenue of the FMCG sector grew by 15.06% over the previous year to reach Rs 12.80 Bn while profits grew from Rs 803 Mn in 2016 to Rs 919 Mn in the current year.

Revenue - (Rs. Bn)FMCG

13 14 15 16 170

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Segmental Profit - (Rs. Bn)FMCG

13 14 15 16 170

200

400

600

800

1,000

RestaurantsThe restaurants sector comprises the franchises of Kentucky Fried Chicken (KFC) quick service restaurants and TGI Fridays. KFC operates thirty restaurants while TGI Fridays operates one restaurant in Colombo, Fort.

The strategy of localised menu items continues to pay dividends with customers of all walks feeling welcome to dine at the many KFC restaurants in Colombo and across the island. Home delivery is also a growing segment at present. During the year, this sector grew revenue by 16.25% while profits grew by more than 100%. This performance was achieved on the back of improved internal efficiencies and productivity improvements. We are confident that the levels of operation and profitability would be sustained in the coming years as well.

Although TGI Fridays restaurant is well located in the central business district in Colombo and boasts of an excellent variety of menu items, the restaurant has not succeeded in attracting adequate traffic to achieve the required revenue levels. Further efforts are now being directed towards volume growth while preserving the brand and operational strengths.

Revenue of this sector for the year ended 31st March 2017 amounted to Rs 3.26 Bn while profits for the year amounted to Rs 162 Mn compared to Rs 62 Mn in the previous year.

Management Discussion and Analysis (Contd.)


“The Company presently collects an average of 115,000 litres of fresh milk per day ”

Revenue (Rs. Bn)Restaurant

13 14 15 16 170

500

1,000

1,500

2,000

2,500

3,000

3,500

RestaurantSegmental Profit (Rs. Bn)

13 14 15 16 17-150

-100

-50

0

50

100

150

200


Real estateThe Real Estate sector in the country is undergoing a spurt in growth with substantial foreign and local investments. The Group owns several properties at strategic locations in the country. Details are given in the financial statements. The real estate sector was commenced with a view to unlocking the values of these properties through the development of such sites.

Majestic City Mall owned and operated by the subsidiary CT Land Development PLC continues to be a significant landmark in the shopping entertainment space in Colombo. Targeting the mass market customer, the Mall offers an array of products and facilities to discerning customers. The property is located on a 1.5 acre property in Colombo 4 with easy access to two main roads as well as bus and train services. The complex has enjoyed near 100 % occupancy for the past few years.

The Group also commenced expanding the Mall concept to other parts of the country by setting up Mini Malls in the provincial cities. The first such was built in Jaffna in 2014. Consisting of Group Anchor tenants such as Food City, KFC and Cinemas and a Food Court and other Tenants, Cargills Square is a landmark in the Jaffna Town. In April 2017, the Group commissioned the second such Mini Mall in Gampaha, which also includes the Food City, KFC and two cinema screens. The Group looks forward to setting up similar Mini Malls in other parts of the Country as well.

The revenue of the sector for the year, amounted to Rs 507 Mn (2016 – Rs 627 Mn) and profit for the year amounted to Rs 299 Mn (2016 – Rs 302 Mn).

Revenue (Rs. Bn)Real Estate

13 14 15 16 170

100

200

300

400

500

600

700

Segmental Profit (Rs. Bn)

Real Estate

13 14 15 16 170

50

100

200

300

150

250

350

EntertainmentThe Entertainment sector of the Group is operated under the subsidiary Ceylon Theatres (Pvt) Ltd, which is involved in the exhibition / screening of movies. The Group also owns a 1/3rd stake in Cinema Entertainments (Pvt) Ltd, a company engaged in film distribution activities. This sector represents a small but important

sector, since the Group commenced operations in the 1920s as a cinema operator.

Ceylon Theatres operated 11 cinema screens across six (06) locations in Colombo, Kandy, Jaffna and Gampaha. The latest addition was the commencement of the two cinema screens at Cargills Square, Gampaha, in April 2017. Subsequent to the year end, the Company also commenced work on refurbishing the cinema owned by the Group located in Nuwara Eliya. It is expected that this cinema will become operational towards the end of the calendar year 2017. The Group continues to be committed to the development of the cinema industry in Sri Lanka. Further investments are planned in the coming years, to expand the network and to set up more screens.

Success of this industry depends on both the quality of the content exhibited as well as the facilities and features made available to patrons. Thus, the Group set up cinemas with 3D screens, digital sound & projections, high quality seating and other facilities in the country. The response from the patrons has been very encouraging.

The Company maintained the profit momentum of 2016 in the current year as well. Revenue for this year amounted to Rs 340 Mn compared to Rs 331 Mn in 2016 while profit for the year was Rs 31 Mn, which is 38% above 2016.



“The Group also commenced expanding the Mall concept to other parts of the country by setting up Mini Malls”

Revenue (Rs. Bn)Entertainment

13 14 15 16 170

100

200

300

400

EntertainmentSegmental Profit (Rs. Bn)

13 14 15 16 17-60

-40

-20

0

20

40


Banking and financial servicesThe Banking and Financial Services sector of the Group includes banking operations, stock broking and investment banking and represents a new and growing sector for the Group and is accounted as an associate (equity accounted investee) of the Group.

The Banking sector comprises the Cargills Bank which was promoted and launched by the Group. Cargills bank has made good progress subsequent to the initial setbacks experienced at the time of start-up. Cargills Bank now handles a full range of banking services spanning corporate, retail and SME sectors. The Bank raised substantial equity in the early part of this year with the Group being the primary contributor, thus enabling it to meet its Tier – 1 capital requirements.

Technology and innovation are the backbone of expected future growth for the bank providing opportunities for new and innovative banking solutions. To this end investments will be made by the bank in the coming years. The Bank presently operates branches and kiosks (service points) at Food City supermarket locations. These are set to grow in the coming years.

The Group’s Capital Market business operates under C T CLSA Holdings Limited with CLSA Limited (one of Asia’s leading equity broking and investment Groups) as its strategic equity partner. C T CLSA offers Stockbroking, Investment Banking and Asset Management Services through its three fully owned subsidiaries.

C T CLSA Securities (Pvt) Limited, a Member of the Colombo Stock Exchange, is an established player in stock broking services in the island with a proven track

record of promoting Sri Lankan businesses to overseas investors. Backed by a strong and recognized research & trading teams the Company has consistently been ranked among the leading Sri Lankan stockbroking houses for many years.

C T CLSA Capital (Pvt) Limited, handles Investment Banking operations. During the year, the company has handled re-structuring work, public equity issues other capital raising initiatives and advisory services for both public and private companies within and outside the Group

Comtrust Asset Management (Pvt) Limited, the Asset Management business of the Group presently operates Five unit trusts – the Comtrust Equity Fund, Comtrust Money Market Fund, Comtrust Gilt Edged Fund, Comtrust Adl Mudarabah Fund and the Crescent iFund. In addition to the Unit Trusts, Comtrust also manages Private Portfolios for High Net worth Individuals and Corporates.

Revenue (Rs. Bn)Banking and Financial Services

13 14 15 16 170

500

1,000

1,500

2,000

Financial reviewGroup revenue amounted to Rs 85.04 Bn compared to Rs 72.34 Bn in the previous year, an increase of 17.46% over 2016. Profit from operation reached Rs 5.80 Bn compared to Rs 4.14 Bn of the previous year.

Profit growth, however, was pegged back by increasing finance costs on account of increased interest rates as well as increased borrowings. Overall, prime lending rates moved up by approximately 2.50% during the year (over and above another increase of about 2.0% during the previous year).

Borrowing levels increased during the year due to investments in property, plant and equipment and strategic investments in the equity of associates. Group borrowings at the year-end (net of cash and cash equivalents) were about 64% above the previous year at Rs 13.3 Bn. The total Group debt presently stands at 1.91 times cash generated from operations. In this regard we consider the debt levels to be


Segmental Profit Rs. Bn)Financial Services

13 14 15 16 17-250

-200

-150

-100

-50

0

50


“The Group set up cinemas with 3D screens, digital sound & projections, high quality seating and other facilities”

Borrowings (Rs. Bn)The Group

13 14 15 16 170

5

10

15

20

25

30

healthy and well manageable. Appropriate strategies are in place to continuously evaluate and manage group debt.

Profit for the current year amounted to Rs 2.67 Bn compared to Rs 2.32 Bn in 2016.

During the year the company paid two interim dividends totaling to Rs 5.20 per share. This is 36.80% above the distribution of Rs 3.80 per share made from and out of the profits of the previous year 2015/16. The Directors do not propose a final dividend for the year.


Section 7.10 of the Listing Rules of the Colombo Stock Exchange – “Corporate Governance” sets out the Corporate Governance requirements of listed companies. The Directors hereby confirm that the Company is in compliance with the said section of the Listing Rules as at 31st March 2017.

Corporate Governance within the Group is handled at two levels(a) Subsidiary Company level – each of the listed subsidiaries have Corporate Governance Procedures that are compliant with the

requirements of Listing Rules. Subsidiaries that are private companies follow the Corporate Governance procedures adopted for the listed company immediately above in the group structure.

(b) At Parent Company level – the details of the Parent Company’s compliance with the Listing Rules are set out in the table below.

The overall Policy Framework for the Group is formulated by the Group’s Executive Committee, which is then presented to the Board of Directors of the Parent Company and subsidiaries for approval and adoption. The Policy Framework is periodically reviewed and updated as required.

Principle Compliance Status

Remarks

1. Non-Executive Directors

The Board shall include at least two Non-Executive Directors; or one third of the total number of Directors whichever is higher.

Complied The Board of Directors consists of Twelve Directors of whom Ten are Non- Executive Directors.

2. Independent Directors

Two or 1/3rd of Non-Executive Directors appointed to the Board of Directors, whichever is higher shall be ‘independent’.

Complied Five Directors out of the nine Non-Executive Directors are Independent. (See 3 below)

The Board shall require each Non-Executive Director to submit a declaration annually of his/her independence or non-independence in the prescribed format.

Complied All Non- Executive Directors submit signed declarations of Independence / Non-Independence annually.

3. Disclosures relating to Directors

The Board shall make a determination annually as to the independence or non-independence of each Non-Executive Director and set out in the annual report the names of Directors determined to be ‘independent’.

Complied Mr. A D B Talwatte is an independent Director of the Company. Messrs J B L De Silva, Priya Edirisinghe, Sunil Mendis, and R Selvaskandan are deemed to be independent as given below.

In the event a Director does not qualify as ‘independent’ but if the Board, taking account of all the circumstances, is of the opinion that the Director is nevertheless ‘independent’, the Board shall specify the criteria not met and the basis for its determination in the annual report.

Complied Messrs J B L De Silva, Priya Edirisinghe and Sunil Mendis have served in the Company’s Board for a continuous period exceeding nine (09) years. Further Messrs Priya Edirisinghe, Sunil Mendis and R Selvaskandan also serve as Directors of other Group Companies of C T Holdings PLC. Nevertheless, the Board of Directors of the Company, having considered their credentials and integrity have resolved that Messrs J B L De Silva, Priya Edirisinghe, Sunil Mendis and R Selvaskandan be deemed Independent Directors of the Company.

The Board shall publish in its annual report a brief résumé of each Director on its Board.

Complied Disclosed in the Annual Report.

Corporate Governance


Principle Compliance Status

Remarks

Upon appointment of a new Director to its Board, the Company shall forthwith provide to the Exchange a brief résumé of such Director for dissemination to the public.

Complied The résumés of Mr. Imtiaz Abdul Wahid & Mr. S C Niles, who were appointed as directors during the year, were submitted to the Colombo Stock Exchange for dissemination to the Public.

5. Remuneration Committee

A listed company shall have a remuneration committee comprising a minimum of two independent Non-Executive Directors or exclusively by Non-Executive Directors a majority of whom shall be independent, whichever shall be higher. One Non-Executive Director shall be appointed as Chairman of the Committee by the Board.

Complied The Remuneration Committee consisted of three Independent Directors and one Non-Executive Director. The Chairman of the Remuneration Committee is a Non-Executive Director.

The Remuneration Committee shall recommend the remuneration payable to the Executive Directors and Chief Executive Officer, to the Board.

Complied The functions of the Remuneration Committee are disclosed in the Report of the Remuneration Committee.

The annual report should set out the names of Directors comprising the Remuneration Committee, contain a statement of the remuneration policy and set out the aggregate remuneration paid to Executive and Non-Executive Directors.

Complied The names of the members of the remuneration Committee are disclosed in the Annual Report under Corporate Information. Details of the Directors’ emoluments are disclosed in Notes to the financial statements.

6. Audit Committee

A listed company shall have an Audit Committee comprising a minimum of two Independent Non-Executive Directors or exclusively by Non-Executive Directors a majority of whom shall be independent whichever shall be higher. One Non-Executive Director shall be appointed Chairman of the committee by the Board.

Complied The Audit Committee consisted of four Independent Directors. The Chairman of the Audit Committee is an Independent Non-Executive Director.

Unless otherwise determined by the Audit Committee the Chief Executive Officer and the Chief Financial Officer of the listed company shall attend audit committee meetings.

Complied The Managing Director is invited to attend the Audit Committee meetings as required.

The Chairman or one member of the committee should be a Member of a recognised professional accounting body.

Complied The Chairman is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and Chartered Institute of Management Accountants, UK.

Functions of the Audit Committee Complied Disclosed in the Report of the Audit Committee.

The annual report should set out the names of Directors comprising the Audit Committee.

Complied The names of the members of the Audit Committee are disclosed in the Annual Report under Corporate Information.

The committee shall make a determination of the independence of the auditors and shall disclose the basis for such determination in the annual report.

Complied Disclosed in the Report of the Audit Committee.

The annual report shall contain a report by the audit committee, setting out the manner of compliance, during the period to which the annual report relates.

Complied Disclosed in the Report of the Audit Committee


Risks are internal or external events that can negatively impact the realization of short term objectives or the implementation of long-term strategies. They can also emerge from missed or poorly exploited opportunities. The risk management process encompasses anticipating, identifying, managing and mitigating internal and external risks and opportunities to ensure both short and long term economic, environmental and social sustainability of the C T Holdings (CTH) Group.

CTH risk portfolio is distributed among subsidiary companies and varies with the nature of each business and operation of each sector and company. The Board of Directors of CTH is entrusted with the task of assessing and regulating the risk profile of each operating sector along the lines of the strategic objectives of the Parent Company. For certain key areas, the Group has set up separate monitoring and reporting structures dedicated to monitoring and reporting on internal and external risks. Such structures, where appropriate, have direct reporting responsibilities to independent committees as well.

Consistent risk monitoringThe management teams of the respective companies are responsible for overseeing the implementation and effectiveness of risk management in their particular sector. They ensure that the risk management system as a whole is operational and that the standards and processes remain current. CTH as the Holding Company primarily faces the internal and external risks that are described in the following section.

Risk Management

1. Business riskThe business risks constantly change in nature and complexity in the operating environment of the Group. The Group’s businesses are subject to a variety of risks, including laws and regulations, market conditions and competitive landscape, which require constant monitoring and evaluation by the management. CTH as the Holding Company carefully evaluates all risks pertaining to high value investments of the Group both in existing operating sectors and new areas (if any).

2. Reputational riskFailure to protect the Group’s reputation could lead to a loss of trust and confidence among stakeholders. We recognise the commercial imperative to safeguard the interests of all our stakeholders. We therefore endeavour to engage with them to take into account their views in developing long term strategies.

3. Funding & liquidityThe Group’s subsidiaries and associates finance their operations through a combination of retained earnings, long term and short term loans. Effective management of cash flows is a key component of maintaining strong funding and liquidity positions. Adequate funding arrangements are available to meet investments and contingencies that may occur in the ordinary course of business. Further, the strong relationships maintained with Banks enable companies within the Group to raise funds at competitive rates as and when required.

4. Credit riskCredit risk is the risk due to uncertainty in counterparty’s ability to meet its financial obligations. Credit risk arises from cash and cash equivalents, deposit with banks

as well as credit exposure to customers including outstanding receivables. Strict credit control procedures are adopted in order to assess the credit quality of present and potential customers with further mitigating measures undertaken to reduce risk. The utilisation of credit limits is regularly monitored.

5. Interest rate riskExcept in the case of investment of surplus funds at the Parent Company level, the Group’s income and operating cash inflows are substantially independent of changes in market interest rates. The Group’s interest rate risk arises from long term borrowings at variable rates linked to market conditions. Such arrangements, while being advantageous at present exposes the Group to interest rate fluctuations. The Group analyses its interest rate exposure on a dynamic basis.

6. Exchange rate riskExposure to Exchange Rate risk is minimal. Revenue streams are also largely independent of Exchange Rate fluctuations except in the case of commodity imports.

7. Product safetyThe safety and quality of our products is of paramount importance to the Group as well as being essential for maintaining customer trust and confidence. A breach in confidence could affect the size of our customer base and financial results. We have detailed and established procedures for ensuring product integrity and quality at all times. There are strict product safety processes in place and regular management reports. We work in partnership with suppliers to ensure mutual understanding of the standards


required. We also monitor developments in areas such as health, safety and nutrition in order to respond appropriately to changing customer trends and new legislation.

8. Health and safety risksProvision of adequate safety to our staff and customers is of the utmost importance to us. Injury or loss of life cannot be measured in financial terms. We operate stringent health and safety processes in line with best practice in our outlets, manufacturing facilities and offices, which also ensure that safety practices are inculcated in all employees. Such procedures are monitored regularly.

9. Regulatory and political environmentAs a Group predominantly operating within Sri Lanka our business is affected by the regulatory and political framework within the country. The effect of such an environment outside Sri Lanka could affect the Company to the extent that it affects the entire local economy. We consider these uncertainties in the local and overseas economies when developing strategies and reviewing performance. We remain vigilant to future changes. As part of our day to day operations we engage with governmental and non-governmental organisations to ensure the views of our customers and employees are represented and try to anticipate and contribute to important changes in public policy whenever possible.

10. Legal issuesFull provision is made for all legal liabilities that are expected to result in any material loss to the Company. All contingent liabilities have been disclosed in the financial statements.

11. Retirement benefit obligationsThe retirement benefit obligations are computed based on actuarial assumptions. The management takes all required steps to ensure that such assumptions are accurate and corresponds to past results and current trends. However, any significant discrepancies between actuarial assumptions and actual conditions may have some impact on future results. The management considers the possibility of such impact as very low.

12. Risk of natural disastersNatural disasters such as earthquakes, storms, and floods, as well as accidents, acts of terror, infection and other factors beyond the control of the Group could adversely affect the Group’s business operation. Insurance covers are obtained against all identified risks and natural disasters affecting the assets of the Group and operational matters.

13. CompetitionThe Retail and Wholesale distribution sector faces a very competitive environment. The management regularly reviews the competitor environment in order to develop appropriate counter strategies. Due to the widespread nature of operations, Group’s sales are not dependent on a single or small group of customers.

14. Information systems and cyber securityThe Group is heavily reliant on computerised operational and financial systems to ensure efficiency of operations and financial reporting. These systems and the associated controls are regularly monitored and reviewed. Measures have been put in place to protect the

Group against factors such as natural disasters, accidents, computer viruses and unauthorised accesses. An IT disaster recovery plan is also in place.

15. Commodity price riskThe Group’s FMCG sector is more exposed to the volatility in the commodity prices. Prices may also be effected by environmental factors such as drought & floods. Long term relationships built with suppliers and forward contracts help in minimising the effects of this risk factor to some extent.

16. Supply chainRaw material, semi processed food and finished goods for re-sale are sourced from third-party suppliers, contract manufacturers and primary producers exposes the group to market volatility and availability.


The Remuneration Committee of C T Holdings PLC is appointed by the Board of Directors of the Company and reports directly to the Board. The remuneration Committee of the parent Company may also function as the Remuneration Committee of certain subsidiaries unless such subsidiaries have separate Remuneration Committees. The Remuneration Committee of the Parent Company is represented in the Remuneration Committees of subsidiaries, where such Committees have been separately constituted.

CompositionThe Committee comprises four Non-Executive Directors, three of whom are independent as follows:

Name Non-Executive Directors

Louis Page, Chairman Non-Executive

A T P Edirisinghe FCA, FCMA (UK) Independent

Sunil Mendis Independent

J B L De Silva Independent

The Composition of the members of the Remuneration Committee satisfies the criteria as specified in the standards of Corporate Governance for listed Companies.

ScopeThe Remuneration Committee recommends the remuneration payable to the Executive Directors, Chief Executive Officer and/or equivalent position thereof and Senior Management/Executives, to the Board of the Company concerned which will make the final determination upon consideration of such recommendations. The Remuneration Committee shall also recommend the variable incentives or bonuses.

Report of the Remuneration Committee

The Group commissions an independent study every 1 to 3 years for the remuneration packages of the Directors, CEOs and Senior Management to ensure that the remuneration / compensation of the Group is on par with the industries in which the group Companies operate.

MeetingsThe committee met once during the year attended by all members.

(Signed)Louis PageChairman - Remuneration Committee

6th June 2017


The Nominations Committee of C T Holdings PLC is appointed by the Board of Directors of the Company and reports directly to the Board. The Nominations Committee of the parent Company functions as the Nominations Committee of all subsidiaries within the Group as well.

CompositionThe Committee comprises three Non-Executive Directors (two of whom are independent) and one Executive Director as follows –


Louis Page Chairman Non-Executive

A T P Edirisinghe FCA, FCMA (UK) Independent


Ranjit Page

The Composition of the members of the Nominations Committee satisfies the criteria as specified in the standards of corporate governance for listed companies.

ScopeThe scope of the Nominations Committee would be to review all appointments to the Board of Group companies and recommend to the respective Board of Directors of the relevant company for appointment.

During the year the appointments of Mr. Imtiaz Abdul Wahid and Mr. S C Niles were recommended to the Board of Directors of the parent Company.

MeetingsThe Committee meets once each year or as required.

(Signed)Louis PageChairman - Nominations Committee

6th June 2017

Report of the Nominations Committee


Related Party Transactions Review Committee (RPTRC) is appointed by the Board of Directors of the Company and reports directly to the Board.

CompositionThe Committee comprises four members who are independent as follows:


A T P Edirisinghe FCA, FCMA (UK) Chairman

Independent

A D B Talwatte FCA, FCMA (UK) Independent


J B L De Silva Independent

The Chairman is a Fellow of the Institute of Chartered Accountants of Sri Lanka.

The composition of the members of the Related Party Transactions Review Committee satisfies the criteria as specified in the standards on corporate governance for listed companies.

ScopeThe RPTRC was formed by the Board to assist the Board in reviewing all related party transactions carried out by the Company.

The mandate of the Committee includes inter-alia the assurance of the following:• Developing and recommending for adoption by the Board of

Directors of the Company and its listed subsidiaries, a related party transactions policy consistent with that proposed by the Code of Best Practices on Related Party Transactions (RPT Code) of the Securities and Exchange Commission of Sri Lanka (SEC).

• Making immediate market disclosures on applicable related party transactions, as required by Section 9 of the continuing listing requirements of the CSE.

• Making appropriate disclosures on related party transactions in the Annual Report, as required by Section 9 of the continuing listing requirements of the CSE.

• Identifying and reporting on recurrent and non-recurrent transactions to be in line with the applicable CSE Rules.

Report of the Related Party Transactions Review Committee

Related party transactionsCompanies within the Group regularly engage in transactions with other companies within the Group.

The Committee receives and reviews details of all related party transactions from the Chief Financial Officers of individual companies and disposes of the same in accordance with the mandate set out above. Procedures are also in place for the Committee to obtain quarterly declarations of related party transactions from Directors of all Group companies.

MeetingsThe Related Party Transactions Review Committee met three times during the year. Details of attendance at meetings are as follows:

Name Held Attended

A T P Edirisinghe, Chairman 3 3

A D B Talwatte 3 3

Sunil Mendis 3 3

J B L De Silva 3 1

ConclusionBased on its work, the Related Party Transactions Review Committee confirms that there were no non-recurrent transactions with related parties during the year. It also noted that in respect of recurrent transactions, the transactions were in the ordinary course of business, there were no changes to practices followed over the years and general terms and conditions applicable to such transactions with Related Parties are similar to those entered into with non-related parties taking into account, if any, due consideration of factors such as volume, cost and any other special benefits which form part and parcel of such transactions. The observations of the Committee have been communicated to the Board of Directors.

Priya EdirisingheChairman Related Party Transactions Review Committee

6th June 2017

Annual Report of the Board of Directors of the Company 28

Report of the Audit Committee 30

Statement of Directors’ Responsibilities 32

Independent Auditors’ Report 33

Statement of Profit or Loss and Other Comprehensive Income 34

Statement of Financial Position 35

Statement of Changes in Equity 36

Statement of Cash Flows 38

Notes to the Financial Statements 40

Five Year Review - Group 112

Group Directory 113

Information to Shareholders 116

Notice of Meeting 118

Form of Proxy 119

Corporate Information Inner Back Cover

Financial Statements


The Directors are pleased to present the Annual Report of C T Holdings PLC for the Year ended 31st March 2017.

ActivitiesThe Group’s Principal activities and important events during the year are discussed in detail in the Chairman’s Statement and Management Discussion and Analysis set out on pages 8 to 9 and 12 to 19 respectively. There were no significant changes to the business activities of the Group during the year.

Risk managementThe overall approach to risk management within the Company and Group is set out in pages 22 to 23.

Financial statementsThe audited financial statements of the Company & Group for the year ended 31st March 2017 and given on pages 34 to 111 form an integral part of this annual report.

Auditors’ reportThe auditors’ report is set out on page 33.

Accounting policiesThe accounting policies adopted in the preparation of the financial statements are given on notes 1 to 5.

Ratios and market price informationKey ratios and market price information pertaining to the equity of the Group are set out on page 112 along with the trend for the past five years. Company and subsidiaries have not raised any capital through listed debt instruments during the year.

Property, plant & equipmentThe movement of property, plant and equipment during the year is given in note 13 to the financial statements. The Group’s outlay on property, plant and

Annual Report of the Board of Directors of the Company

equipment during the year amounted to Rs 4.57 Bn (2016 – Rs 1.87 Bn) while there was no capital outlay on property, plant and equipment during the year at the Company level (2016 – Rs Nil). The Directors are of the opinion that the carrying amount of properties stated in note 13 to the financial statements reasonably reflects their fair values.

Extents, locations, valuations of the Group’s property holdings and investment properties are disclosed in note 13.3 and 15.2 to the financial statements.

Stated capitalThe stated capital of the Company at the balance sheet date amounted to Rs. 3,194,007,832 comprising 183,097,253 ordinary (voting) shares. The Company and subsidiaries do not have any Employee Share Ownership or Stock Option Schemes at present.

ShareholdersThere were 1,518 registered shareholders as at 31st March 2017 (2016 -1,567 shareholders). An analysis of shareholders according to size and holdings, public holdings and the names of the twenty largest shareholders of the Company at the reporting date are given on Pages 116 and 117.

DirectorateMr. Imtiaz Abdul Wahid and Mr. S C Niles were appointed Directors of the Company on 1st December 2016 and 1st February 2017 respectively. All other Directors of the Company have been Directors throughout the year under review. Details of Directors of group companies as at the reporting date are given on pages 113 to 115 of this report.

Brief profiles of the Directors of the Company are given on pages 10 and 11, including their determination as independent and non-executive, as appropriate.

Details of attendance at meetings

Name of Director Board Meetings AGMHeld Attended Held Attended

Louis Page 5 5 1 1Ranjit Page 5 5 1 1J B L De Silva 5 3 1 -Priya Edirisinghe 5 5 1 1Sunil Mendis 5 5 1 1Mrs. Cecilia Muttukumaru 5 5 1 1S C Niles (w e f 01 Feb 2017) 2 2 - -Joseph Page 5 - 1 -R Selvaskandan 5 5 1 1Dr. A Aravinda Page 5 2 1 1A D B Talwatte 5 5 1 1Imtiaz Abdul Wahid (w e f 1 Dec 2016)

2 2 - -


Directors’ remunerationThe remuneration of the Directors is given in note 8 to the financial statements.

Directors’ interest in contractsThe Directors’ interest in contracts and proposed contracts with the Company are disclosed under the related party transactions in note 30 to the financial statements. The Directors have declared their interests at meetings of the Board.

Directors’ shareholdingsThe Directors’ shareholdings in the Company were as follows:

As at As at31-Mar-2017 31-Mar-2016

Louis Page 10,000 10,000Ranjit Page 11,231,945 10,927,338J B L De Silva 213 213Priya Edirisinghe 30,036 30,036Sunil Mendis - -Mrs. Cecilia Muttukumaru 1,290,000 1,155,000S C Niles 51,350 N/AJoseph Page 6,426,520 6,426,520R Selvaskandan - -Dr. A Aravinda Page 19,650 1,750A D B Talwatte - -Imtiaz Abdul Wahid - N/A

19,059,714 18,550,857

Events after the reporting periodEvents occurring after the reporting date of the Company are given in note 34 to the financial statements.

Corporate governanceThe corporate governance practices within the Group are set out in pages 20 to 21 and the report of the Audit Committee is set out on page 30 and 31.

DividendsThe Company paid the following dividends during the year.(a) Final dividend of Rs. 2.80 per share on 14th July 2016, out of profits for the year

ended 31st March 2016.

(b) First interim dividend of Rs. 1.70 per share on 19th January 2017, out of profits for the year ended 31st March 2017.

(c) Second interim dividend of Rs. 3.50 per share on 28th March 2017, out of profits for the year ended 31st March 2017.

In view of the two interim dividends paid during the year the Directors do not propose a final dividend for the year.

AuditorsThe remuneration paid to the Auditors is given in Note 8.2 to the financial statements.

As far as the Directors are aware, the Auditors do not have any relationship (other than that of an auditor) with the Company. M/s. KPMG, Chartered Accountants are deemed re-appointed in terms of Section 158 of the Companies Act No.7 of 2007, as Auditors of the Company. A resolution authorising the Directors to determine their remuneration will be submitted at the Annual General Meeting.

By Order of the Board

Ranjit PageDeputy Chairman / Managing Director

Priya EdirisingheDirector

S L W DissanayakeCompany Secretary

6th June 2017


The Audit Committee of C T Holdings PLC is appointed by the Board of Directors of the Company and reports directly to the Board. Key individual listed subsidiaries have separate Audit Committees with representation from the Audit Committee of the Holding Company.

The Audit Committee functions within the overall governance process established by the Board of Directors of the Company and assists the Board in effectively discharging its responsibilities.

CompositionThe Audit Committee consisted of four Independent Non-Executive Directors during the year ended 31st March 2017.They are:

Name Non-Executive DirectorsA T P Edirisinghe FCA, FCMA (UK) Chairman IndependentA D B Talwatte FCA, FCMA (UK) IndependentSunil Mendis IndependentJ B L De Silva Independent

The Chairman of the Audit Committee is a Fellow member of the Institute of Chartered Accountants of Sri Lanka. The Composition of the members of the Audit Committee satisfies the criteria as specified in the standards of Corporate Governance for listed Companies. The Deputy Chairman / Managing Director and Executive Director attend Audit Committee meetings as and when requested by the Committee. The Company Secretary functions as the Secretary to the Committee.

ScopeThe functions of the Audit Committee as specified in the Group’s policies cover the following:• Oversight of the preparation, presentation and adequacy of disclosures in the financial

statements of a listed company, in accordance with Sri Lanka Accounting Standards.• Oversight of the Company’s compliance with financial reporting requirements,

information requirements of the Companies Act and other relevant financial reporting related regulations and requirements.

• Oversight over the processes to ensure that the Company’s internal controls and risk management are adequate, to meet the requirements of the Sri Lanka Auditing Standards.

• Assessment of the independence and performance of the Company’s external auditors.

• To make recommendations to the Board pertaining to appointment, re-appointment and removal of external auditors and to approve the remuneration and terms of engagement of the external auditors.

Report of the Audit Committee

MeetingsThe Audit Committee of the Holding Company met three times during the year, one meeting being attended by the auditors of the Company as well.

Details of attendance at meetings are as follows:

Name Held AttendedA T P Edirisinghe, Chairman

3 3

A D B Talwatte 3 3Sunil Mendis 3 3J B L De Silva 3 1

Financial StatementsFour quarterly financial statements as well as the annual financial statements were circulated, reviewed and recommended to the Board for approval during the year. In all instances, the Audit Committee also obtained declarations from relevant key officials confirming that the respective financial statements are in conformity with the applicable Accounting Standards, Company Law and other Statutes including Corporate Governance Rules and that the presentation of such financial statements are consistent with those of the previous quarter or year as the case may be. Further, any departures from such reporting and statutory requirements and Group policies are also disclosed to the Committee for discussion and approval.

ConclusionBased on its work, the Audit Committee is of the opinion that the control procedures and environment within the Group provide reasonable assurance regarding the monitoring of the operations, accuracy of the financial statements and safeguarding of assets of the Company.


Audit and Auditors’ IndependenceThe Audit Committee assessed the independence and performance of the Company’s external auditors and made recommendations to the Board pertaining to appointment / re-appointment. The Audit Committee also reviewed the audit fees for the Company and approved the remuneration and terms of engagement of the external auditors and made recommendations to the Board. When doing so, the Audit Committee reviewed the type and quantum of non-audit services (if any) provided by the external auditors to the Company to ensure that their independence as Auditors has not been impaired.

The Audit Committee obtains a statement from Messrs. KPMG confirming independence as required by Section 163 (3) of the Companies Act No. 07 of 2007 on the audit of the Statement of Financial Position and the related Statements of Income, Changes in Equity, and Cash Flows of the Company and the Group.

The Audit Committee has recommended to the Board of Directors that M/s. KPMG be re-appointed as Auditors of the Company for the year ending 31st March 2018.

Priya EdirisingheChairman - Audit Committee

6th June 2017


Maintenance of Accounting RecordsUnder the provisions of the Companies Act No. 07 of 2007 (‘the Act’), every company is required to maintain accounting records which correctly record and explain the Company’s transactions, and will at any time enable the financial position of the Company to be determined with reasonable accuracy, enable the Directors to prepare financial statements in accordance with the Act and also enable the financial statements of the Company to be readily and properly audited.

Preparation of Financial Statements of the Company and GroupThe Act places the responsibility on the Board of Directors to ensure that financial statements are prepared within the prescribed time period in conformity with the Act. Such financial statements of a Company shall give a true and fair view of the state of affairs of the Company as at the reporting date and the profit or loss or income and expenditure, as the case may be, of the Company for the accounting period ending on that reporting date.

Further the Act also requires that a Company with one or more subsidiaries at the reporting date to also prepare financial statements in relation to the Group including every subsidiary, which give a true and fair view of the state of affairs of the Company and its subsidiaries as at the reporting date and the profit or loss or income and expenditure, as the case may be, of the Company and its subsidiaries for the accounting period ending on that reporting date.

Statement of Directors’ Responsibilities

DividendsIn the event of any distribution of dividends the Board of Directors are required to satisfy themselves that the Company will, immediately after the relevant distribution is made, satisfy the solvency test, provided that such a certificate is obtained from the auditors.

Annual ReportThe Board of Directors are required to prepare an Annual Report on the affairs of the Company during the accounting period ending on the reporting date in the prescribed format and circulate the same to every shareholder of the Company within the time frame prescribed in the Act.

Independent auditThe Act required the Company to appoint an Auditor to audit the financial statements of the Company / Group for the reporting period. Accordingly, M/s KPMG presently function as the Auditors of the Company. Their responsibility with regard to the financial statements as auditors of the Company are set out in the Independent Auditor‘s Report set out on Page 33.

ManagementThe Directors are responsible for the proper management of the resources of the Company. The internal control system has been designed and implemented to obtain reasonable but not absolute assurance that the Company is protected from undue risks, frauds and other irregularities.

ComplianceConsidering the present financial position of the Group and the forecasts for the foreseeable future, the Directors have adopted the going concern basis for the preparation of these financial statements.

The Directors confirm that:(a) The Company is in compliance with

the requirements of the Act as aforementioned.

(b) These financial statements have been prepared in accordance with the requirements of the Companies Act No. 7 of 2007 and applicable Sri Lanka Accounting Standards, which have been consistently applied and supported by reasonable and prudent judgments and estimates.

(c) The Company obtained the required certificate of solvency for the dividends declared during the year.

(d) the Company is in compliance with section 9 of the Listing Rules of the Colombo Stock Exchange in respect of the related party transactions entered into by the company during the year.

(e) All statutory payments have been made up to date.

The Directors are satisfied that the control procedures within the Company operated effectively during the year.

By order of the Board


6th June 2017


TO THE SHAREHOLDERS OF C T HOLDINGS PLC

Report on the Financial StatementsWe have audited the accompanying financial statements of C T Holdings PLC, (“the Company”), and the consolidated financial statements of the Company and its subsidiaries (“Group”), which comprise the statement of financial position as at March 31, 2017, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information set out on pages 34 to 111 of the annual report.

Board’s Responsibility for the Financial StatementsThe Board of Directors (“Board”) is responsible for the preparation of these financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Sri Lanka Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance

Independent Auditors’ Report

about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Board, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at March 31, 2017, and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

Report on Other Legal and Regulatory RequirementsAs required by section 163 (2) of the Companies Act No. 07 of 2007, we state the following:a) The basis of opinion and scope and

limitations of the audit are as stated above

b) In our opinion:

• We have obtained all the information and explanations that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the Company,

• The financial statements of the Company give a true and fair view of its financial position as at March 31, 2017, and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

• The financial statements of the Company, and the Group comply with the requirements of sections 151 and 153 of the Companies Act No. 07 of 2007.

CHARTERED ACCOUNTANTSColombo

6th June 2017


For the year ended 31st March Group Company

In thousands of rupees Note 2017 2016 2017 2016

Revenue 6 85,037,781 72,399,182 - -Cost of sales (74,492,946) (63,669,926) - -Gross profit 10,544,835 8,729,256 - -Other income 7 2,248,693 1,991,540 33,285 169,814Distribution expenses (2,338,849) (2,312,232) - -Administrative expenses (4,216,578) (3,739,374) (73,228) (81,062)Other expenses (439,796) (533,881) (103,045) (180,197)Results from operating activities 8 5,798,305 4,135,309 (142,988) (91,445)Finance income 373,217 477,155 1,466,388 683,714Finance expense (1,504,338) (870,781) (185) (78)Net finance income / (expense) 9 (1,131,121) (393,626) 1,466,203 683,636Share of loss of equity accounted investees, net of income tax 18.1 22,924 (79,359) - -Profit before taxation 4,690,108 3,662,324 1,323,215 592,191Income tax expense 10 (2,023,094) (1,344,117) (24,691) (23,320)Profit for the year 2,667,014 2,318,207 1,298,524 568,871

Other comprehensive income, net of tax Items that will not be reclassified subsequently to profit or loss:Revaluation of property, plant and equipment 13 - 1,148,524 - -Remeasurement of obligation on defined benefit plan (24,377) (30,094) 1,106 (5,007)Share of other comprehensive income of equity accounted investees 18.1 (2,458) (277) - - (26,835) 1,118,153 1,106 (5,007)

Items that may be reclassified subsequently to profit or loss:Net change in fair value of available-for-sale financial assets 9.2 (37,647) (65,557) (29,293) (41,613)Share of other comprehensive income of equity accounted investees 18.1 - (3,259) - - (37,647) (68,816) (29,293) (41,613)Total other comprehensive income for the year, net of tax (64,482) 1,049,337 (28,187) (46,620)Total comprehensive for the year 2,602,532 3,367,544 1,270,337 522,251

Profit for the year attributable to:Owners of the parent 1,747,876 1,626,228 1,298,524 568,871Non-controlling interest 919,138 691,979 - - 2,667,014 2,318,207 1,298,524 568,871

Total comprehensive income for the year attributable to:Owners of the parent 1,694,049 2,487,379 1,270,337 522,251Non-controlling interest 908,483 880,165 - - 2,602,532 3,367,544 1,270,337 522,251

Earnings per share (Rs.) 11 9.55 8.88 7.09 3.11Dividends per share (Rs.) 12 5.20 3.80 5.20 3.80

The notes on pages 40 to 111 are an integral part of these financial statements

Statement of Profit or Loss and Other Comprehensive Income


As at 31st March Group Company


AssetsNon-current assetsProperty, plant and equipment 13 23,307,407 20,948,826 5,569 8,298Prepaid lease rentals to acquire rights to use lands 14 180,245 34,532 - -Investment properties 15 10,524,586 9,828,265 1,447,550 1,443,250Goodwill and other intangible assets 16 1,527,680 1,320,109 688,467 688,467Investments in subsidiaries 17 - - 2,215,248 1,430,177Investments in equity accounted investees 18 6,293,711 4,195,236 2,906,169 2,219,653Other investments 19 450,144 1,363,416 291,762 1,178,448Deferred tax assets 10.5 49,564 54,630 - -Total non-current assets 42,333,337 37,745,014 7,554,765 6,968,293

Current assetsInventories 20 8,340,128 7,198,122 - -Trade and other receivables 21 4,673,958 3,768,320 14,147 806,277Other investments 19 14,481 50,976 - -Cash and cash equivalents 22 2,500,830 3,401,289 270,710 237,505Total current assets 15,529,397 14,418,707 284,857 1,043,782Total assets 57,862,734 52,163,721 7,839,622 8,012,075

Equity and liabilitiesEquity attributable to owners of the parentStated capital 23 3,194,008 3,194,008 3,194,008 3,194,008Reserves 24 4,583,173 4,618,260 399,514 428,807Retained earnings 11,016,858 11,047,414 3,986,678 4,151,826Total equity attributable to equity holders of the parent 18,794,039 18,859,682 7,580,200 7,774,641Non-controlling interest 3,405,406 4,662,872 - -Total equity 22,199,445 23,522,554 7,580,200 7,774,641

LiabilitiesNon-current liabilitiesBorrowings 25 2,569 198,300 - -Employee benefits 26 828,996 694,345 15,504 14,410Deferred income 27 103,607 122,158 - -Trade and other payables 28 2,940,780 2,422,001 - -Deferred tax liabilities 10.5 1,287,415 991,819 - -Total non-current liabilities 5,163,367 4,428,623 15,504 14,410

Current liabilitiesTrade and other payables 28 12,288,384 11,173,225 9,823 12,370Current tax liabilities 2,163,869 1,522,171 1,805 3,759Borrowings 25 15,815,379 11,310,253 - -Dividends payable 232,290 206,895 232,290 206,895Total current liabilities 30,499,922 24,212,544 243,918 223,024Total equity & liabilities 57,862,734 52,163,721 7,839,622 8,012,075

Statement of Financial Position

The notes on pages 40 to 111 are an integral part of these financial statements. The Board of Directors is responsible for the preparation and presentation of these Financial statements. The Financial Statements have been approved by the Board of Directors on 6th June 2017.

Ranjit Page Priya Edirisinghe Deputy Chairman / Director Managing Director

I certify that these Financial Statements have been prepared in accordance with the requirements of the Companies Act No 7 of 2007.

S C Niles Executive Director


<------------------ Attributable to the owners of the parent ------------------>

Available Non- Group Stated Revaluation for sale General Retained Total controlling TotalIn thousands of rupees Capital Reserve Reserve Reserve Earnings Interest

For the year ended 31st March 2016Balance at 1st April 2015 3,194,008 3,183,612 181,453 367,220 10,339,567 17,265,860 4,156,863 21,422,723Total comprehensive income for the yearProfit for the year - - - - 1,626,228 1,626,228 691,979 2,318,207Other comprehensive incomeRevaluation of property, plant and equipment - 944,345 - - - 944,345 204,179 1,148,524Net change in fair value of available- for-sale financial assets - - (58,370) - - (58,370) (7,187) (65,557)Re-measurements of defined benefit plan - - - - (21,288) (21,288) (8,806) (30,094)Share of other comprehensive income of associates - - - - (3,536) (3,536) - (3,536)Total other comprehensive income for the year - 944,345 (58,370) - (24,824) 861,151 188,186 1,049,337Total comprehensive income for the year - 944,345 (58,370) - 1,601,404 2,487,379 880,165 3,367,544Transactions with owners directly recorded in equityDividends paid - - - - (659,150) (659,150) (255,374) (914,524)Put options written on non-controlling - - - - (194,759) (194,759) (82,673) (277,432)Total contributions by & distributions to owners - - - - (853,909) (853,909) (338,047) (1,191,956)Changes in ownership interestAcquisition of non controlling interest - - - - (39,648) (39,648) (37,935) (77,583)Acquisition of equity accounted investees - - - - - - 1,826 1,826Total changes in ownership - - - - (39,648) (39,648) (36,109) (75,757)Balance as at 31st March 2016 3,194,008 4,127,957 123,083 367,220 11,047,414 18,859,682 4,662,872 23,522,554

For the year ended 31st March 2017Balance at 1st April 2016 3,194,008 4,127,957 123,083 367,220 11,047,414 18,859,682 4,662,872 23,522,554Total comprehensive income for the yearProfit for the year - - - - 1,747,876 1,747,876 919,138 2,667,014Other comprehensive incomeNet change in fair value of available-for-sale financial assets - - (35,087) - - (35,087) (2,560) (37,647)Re-measurements of defined benefit plan - - - - (16,282) (16,282) (8,095) (24,377)Share of other comprehensive income of associates - - - - (2,458) (2,458) - (2,458)Total other comprehensive income for the year - - (35,087) - (18,740) (53,827) (10,655) (64,482)Total comprehensive income for the year - - (35,087) - 1,729,136 1,694,049 908,483 2,602,532Transactions with owners directly recorded in equityDividends paid - - - - (1,464,778) (1,464,778) (682,134) (2,146,912)Put options written on non-controlling - - - - (357,613) (357,613) (151,803) (509,416)Total contributions by & distributions to owners - - - - (1,822,391) (1,822,391) (833,937) (2,656,328)Changes in ownership interestAcquisition of subsidiaries - - - - - - (39,692) (39,692)Disposal of ownership interest - - - - (4,253) (4,253) 13,840 9,587Acquisition of non controlling interest - - - - 66,952 66,952 (171,068) (104,116)Acquisition of equity accounted investees - - - - - - (1,135,092) (1,135,092)Total changes in ownership - - - - 62,699 62,699 (1,332,012) (1,269,313)Balance as at 31st March 2017 3,194,008 4,127,957 87,996 367,220 11,016,858 18,794,039 3,405,406 22,199,445

Statement of Changes in Equity


Company Available Stated Revaluation for sale General Retained TotalIn thousands of rupees Capital Reserve Reserve Reserve Earnings

For the year ended 31st March 2016Balance at 1st April 2015 3,194,008 74,999 181,883 213,538 4,247,112 7,911,540Total comprehensive income for the yearProfit for the year - - - - 568,871 568,871Other comprehensive incomeNet change in fair value of available-for-sale financial assets - - (41,613) - - (41,613)Defined benefit plan actuarial gains / (losses) - - - - (5,007) (5,007)Total other comprehensive income for the year - - (41,613) - (5,007) (46,620)Total comprehensive income for the year - - (41,613) - 563,864 522,251Transactions with owners directly recorded in equityContributions by & distributions to ownersDividends paid - 2014/15 (final) - - - - (476,053) (476,053)Dividends paid - 2015/16 (interim) - - - - (183,097) (183,097)Total contributions by & distributions to owners - - - - (659,150) (659,150)Balance as at 31st March 2016 3,194,008 74,999 140,270 213,538 4,151,826 7,774,641

For the year ended 31st March 2017Balance at 1st April 2016 3,194,008 74,999 140,270 213,538 4,151,826 7,774,641Total comprehensive income for the yearProfit for the year - - - - 1,298,524 1,298,524 Other comprehensive incomeNet change in fair value of available-for-sale financial assets - - (29,293) - - (29,293)Defined benefit plan actuarial gains / (losses) - - - - 1,106 1,106Total other comprehensive income for the year - - (29,293) - 1,106 (28,187)Total comprehensive income for the year - - (29,293) - 1,299,630 1,270,337 Transactions with owners directly recorded in equityContributions by & distributions to ownersDividends paid - 2015/16 (final) - - - - (512,673) (512,673)Dividends paid - 2016/17 (first interim) - - - - (311,265) (311,265)Dividends paid - 2016/17 (second interim) - - - - (640,840) (640,840)Total contributions by & distributions to owners - - - - (1,464,778) (1,464,778)Balance as at 31st March 2017 3,194,008 74,999 110,977 213,538 3,986,678 7,580,200



Statement of Cash Flows


In thousands of rupees 2017 2016 2017 2016

Cash flows from operating activitiesProfit for the year 4,690,108 3,662,324 1,323,215 592,191

Adjustments for:Depreciation of property, plant & equipment 13 1,873,811 1,766,001 2,729 5,091Amortisation of leasehold right over land 14 4,348 1,650 - -Amortisation of intangible assets 16 71,098 36,613 - -Interest income 9 (298,822) (204,102) (16,864) (8,835)Profit on deemed disposal of equity accounted investees - (55,651) - -Profit on sale of property, plant & equipment 7 (38,790) (24,846) - -Dividend income 9 (28,424) (133,422) (1,427,146) (621,154)Finance cost 9 1,504,338 870,781 185 28Share of loss of equity accounted investees 18.1 (22,924) 49,837 - -Reversal / (charge) for impairment of trade and other receivables 21 29,652 35,232 - -Amortisation of deferred income 27 (18,551) (11,481) - -Provision for slow moving and obsolete inventories 20 (16,749) (44,711) - -Change in fair value of investment properties 15 (424,774) (190,583) (4,300) (148,500)Impairment losses on property, plant and equipment 13 (193) 97,166 - -Provision for obligation on defined benefit plan 26 152,667 124,770 2,200 1,528Gain on disposal of available for sale investments 9 (39,338) (53,725) (22,378) (53,725)(Gain) / loss on de-recognition of subsidiaries - (257) - 50Impairment of improvements to investment properties 15 23,865 - - -Impairment losses on investments in subsidiaries 17 - - 103,045 180,197Cash generated from operating activities before working capital 7,461,322 5,925,596 (39,314) (53,129)Change in inventories (1,092,477) (897,015) - -Change in trade and other receivables (492,001) (783,165) 8,129 2,267Change in amounts due from related parties 6,358 (123,771) - (629,838)Change in trade and other payables 1,073,299 2,975,982 (2,545) (1,906)Change in amounts due to related parties (375) (1,423) - (17,454)Cash generated from operating activities 6,956,126 7,096,204 (33,730) (700,060)Interest paid (1,503,471) (870,739) (185) (28)Income tax paid (1,471,600) (648,986) (27,527) (27,002)Defined benefit plan payments 26 (56,117) (24,286) - -Net cash from / (used in) operating activities 3,924,938 5,552,193 (61,442) (727,090)




Cash flows from investing activitiesProceeds from sale of property, plant and equipment 13 87,316 117,432 - -Interest received 9 298,822 204,102 16,864 8,835Dividends received 9 34,944 139,348 1,428,029 505,932Proceeds from sale of investments 1,027,644 2,277,008 925,957 2,277,008Proceeds from sale of ownership interest 9,587Cash lost on de-recognition of subsidiaries - (251) - -Acquisition of property, plant and equipment (4,570,740) (2,390,759) - -Prepaid lease rentals to acquire rights to use lands 14 (153,669) - - -Improvements to investment property 15 - (6,747) - -Acquisition of non-controlling interests (104,116) (80,029) - -Acquisition of intangible assets (185,165) (77,945) - -Acquisition of subsidiary, net of cash acquired 22.5(b)(iv) (143,108) (494,980) (790,632) -Acquisition of investment in equity accounted investees (3,219,621) (2,552,000) - (1,276,000)Acquisition of other investments (76,187) (318,029) (46,187) (103,106)Net cash from / (used in) investing activities (6,994,293) (3,182,850) 1,534,031 1,412,669

Cash flows from financing activitiesNet short term borrowings 4,857,320 460,443 - -Repayment of long term borrowings 25.1 (537,529) (553,489) - -Payment of finance lease liabilities 25.2 (2,246) (1,327) - -Dividends paid to owners (1,439,383) (620,253) (1,439,384) (620,253)Dividends paid to non controlling interest (682,134) (255,374) - -Net cash from / (used in) financing activities 2,196,028 (970,000) (1,439,384) (620,253)Net decrease in cash and cash equivalents (873,327) 1,399,343 33,205 65,326

Cash and cash equivalents at 1st April 139,008 (1,260,335) 237,505 172,179Net decrease in cash and cash equivalents (873,327) 1,399,343 33,205 65,326Cash and cash equivalents at 31st March (734,319) 139,008 270,710 237,505

Cash and cash equivalents at 31st MarchCash and cash at bank 1,645,781 1,694,751 4,469 3,224Short term deposits 855,049 1,706,538 266,241 234,281 2,500,830 3,401,289 270,710 237,505Bank overdrafts (3,235,149) (3,262,281) - - 22 (734,319) 139,008 270,710 237,505



1. Presentation of the financial statements(a) Description of the reporting entity and businessC T Holdings PLC (the ‘Company’) is a company incorporated in Sri Lanka and listed on the Colombo Stock Exchange. The address of the Company’s registered office is No. 8, Sir Chittampalam A Gardiner Mawatha, Colombo 2. The consolidated financial statements of the Company as at and for the year ended 31st March 2017 comprise the Company and its subsidiaries (together referred to as the ‘Group’ and individually as ‘Group entities’) and the Group’s interest in associates. The financial statements of all companies within the Group are prepared for a common financial year which ends on 31st March 2017, except as mentioned in note 18.4. The principal Activities of the Group are set out on pages 4 to 5 of the Annual Report.

(b) Statement of complianceThe financial statements which comprise the statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows and notes thereto have been prepared in accordance with new Sri Lanka Accounting Standards (SLFRSs), and the requirements of the Companies Act, no 07 of 2007. The Board of Directors of the Company is responsible for the preparation and presentation of these financial statements. The financial statements were authorised for issue by the Board of Directors on 6th June 2017.

(c) Functional and presentation currencyThese financial statements are presented in Sri Lankan Rupees, which is the Group’s functional currency. All financial information presented in Sri Lankan Rupees has been rounded to the nearest thousands, except when otherwise indicated.

(d) Key accounting judgements and estimatesIn preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

(i) JudgmentsInformation about critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Reference ItemNote 13 Property, plant and equipmentNote 15 Investment propertiesNote 16 Goodwill and other intangible assetsNote 17 Impairment of investmentsNote 26 Employee benefitsNote 10.5 Deferred taxationNote 32 Leases: whether an arrangement contains a leaseNote 17 Consolidation: whether the group has de-facto control over an investeeNote 32 Lease classification

(ii) Assumptions and estimation uncertaintiesInformation about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31st March 2017 is included in the following notes:

Notes to the Financial Statements


Reference ItemNote 26 Measurement of defined benefit obligations: key actuarial assumptions;Note 10.5 Recognition of deferred tax assets: availability of future taxable profit

against which carry forward tax losses can be used;Note 17 Impairment test: key assumptions underlying recoverable amounts;Notes 34 Recognition and measurement of provisions and contingencies: key

assumptions about the likelihood and magnitude of an outflow of resources; and

Notes 17 Acquisition of subsidiary: fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquired and liabilities assumed, measured on a provisional basis.

(e) Materiality and AggregationEach material class of similar items is presented separately in the financial statements. Items of a dissimilar nature or function are presented separately unless they are immaterial.

(f) Comparative InformationComparative information has been reclassified to conform to the current year’s presentation, where necessary. Except when a standard permits or requires otherwise, comparative information is disclosed in respect of the previous period. Where the presentation or classification of items in the financial statements are amended, comparative amounts are reclassified unless it is impracticable.

(g) Events after the reporting periodAll material events after the reporting date have been considered and where appropriate, adjustments or disclosures have been made in respective notes to the financial statements.

(h) Basis of measurementThe financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:

Items Measurement basesFreehold land Fair valueFinancial instruments at fair value through profit or loss Fair valueAvailable-for-sale financial assets Fair value Investment property Fair valueDefined benefit obligations Present value

The Management of the C T Holdings PLC has made an assessment of the Group’s ability to continue as a going concern and is satisfied that the group has the resources to continue in business for a foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Group’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.

(i) Measurement of fair valueA number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Group has an established control framework with respect to the measurement of fair values.

Significant valuation issues are reported to the Group’s audit committee.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.• Level 1: Quoted prices (unadjusted) in

active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.


The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

Reference ItemNote 15 Investment propertyNote 29 Financial instrumentsNote 17 Acquisition of subsidiaryNote 13 Freehold Land

1.1. Amortised cost measurementThe amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or un-collectability.

2. Operating segments2.1. Basis for segmentationThe Group has the following six strategic divisions, which are its reportable segments. These divisions offer different products and services, and are managed separately because they require different technology and marketing strategies.

The following summary describes the operations of each reportable segment.

Reportable Segment OperationRetail and Wholesale Distribution Operation of a chain of supermarkets and

convenient stores. Local distributor for world renown brands of food and beverages.

FMCG Manufacturer / distributor of processed meat, dairy, jams, cordials, sauces and confectionery.

Restaurants Franchisee / Operator for ‘Kentucky Fried Chicken’ (KFC) and ‘TGI Fridays’ Restaurants in Sri Lanka.

Real Estate Owner / operator of the ‘Majestic City’ and ‘Cargills Square’ shopping and entertainment malls. Development and sale / rental of residential condominiums and commercial development.

Entertainment Import and distribution of cinematic content.Financial Services Stock brokering, capital market solutions and fund

management and Commercial Banking.

Notes to the Financial Statements (Contd.)

The Group’s chief executive officer reviews the internal management reports of each division at least quarterly.

Segment results that are reported to the Group’s chief operating officer include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses, and tax assets and liabilities. Inter-segment transfers are based on fair market prices. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

3. Significant accounting policiesUnless otherwise indicated, the accounting policies set out below have been applied consistently to all periods presented in these financial statements and have been applied consistently by Group entities.

3.1. Basis of consolidation(a) Business combinationsThe Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.


The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.

(b) SubsidiariesSubsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Total comprehensive income of subsidiary is attached to the owners of the Company and to the non-controlling interest, even this result in the non-controlling interest having a deficit balance. When necessary, adjustments are made to the financial

statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

(c) Loss of controlWhen the Group loses control over a subsidiary it de-recognises the assets and liabilities of the subsidiary, any related non-controlling interests and the other components of equity. Any resulting gain or loss is recognised in profit or loss.

Any interest retained in the former subsidiary is measured at fair value when control is lost. Subsequently that retained interest is accounted for as equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(d) Non-controlling interestsNon-controlling-interests are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss.

(e) Interest in equity accounted investeesThe Group’s interests in equity accounted investees comprise interests in associates. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant

influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investments in associates are accounted for under the equity method. They are initially recognised at cost. which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income 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 exceed its interest in an equity accounted investee, the carrying amount of the investment, including any long term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

(f) Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.


3.2. Foreign Currency - Foreign currency transactionsTransactions in foreign currencies are translated into the respective functional currencies of Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.

3.3. Discontinued OperationsA discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:• represents a separate major line

of business or geographical area of operations;

• is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or

• is a subsidiary acquired exclusively with a view to re-sell.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as discontinued operation, the comparative statement of profit or loss and other comprehensive income is represented as if the operation had been discontinued from the start of the comparative year.

3.4. RevenueRevenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates.

3.4.1. Sale of goodsRevenue is recognized when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured net of returns, trade discounts and volume rebates. The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement.

Loyalty programmeRevenue is allocated between the loyalty programme and the other components of the sale. The amount allocated to the loyalty programme is deferred, and is recognised as revenue when the Group has fulfilled its obligations to supply the discounted products under the terms of the programme or when it is no longer probable that the points under the programme will be redeemed.

3.4.2. Rendering of servicesThe Group recognises revenue from rendering of services in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed with reference to surveys of work performed.

3.4.3. CommissionsWhen the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount of commission made by the Group.

3.4.4. Investment property rental incomeRental income from investment property is recognised as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

3.4.5. Cinema OperationsRevenue from cinema operations is recognised at the point of issuance of tickets.

3.4.6. Apartment SaleRevenue is recognised based on sale agreements when completion is certified by the project Architect/ Engineer and substantial amount from the total sale value as per the agreement has been received by the Company.

3.4.7. Dividend IncomeDividend income is recognised when the Company’s right to receive the payment is established.



3.4.8. OthersGains or losses on the disposal of Property, Plant & Equipment have been accounted for in the profit or loss at the date of disposal. Other income is recognised on an accrual basis.

3.5. Employee benefits3.5.1. Short-term employee benefitsShort-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

3.5.2. Defined contribution plansDefined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay any further amounts. Obligations for contributions to Employees Provident Fund and Employees Trust Fund covering all employees are recognised as an expense in the in profit or loss, as incurred.

Types of contribution plans which are being contributed for by the Group;

(a) Employee Provident Fund (EPF) - The Group and employees contribute 12% and 8% respectively of the salary to EPF.

(b) Employees Trust Fund - All employees of the Group are members of the Employees’ Trust Fund (ETF). The Group contributes 3% of the salary of each employee to ETF.

3.5.3. Defined benefit plansDefined Benefit Plan is a post-employment benefit plan other than Defined Contribution Plan. These plans create an obligation on the entity to provide agreed benefits to current and past employees and effectively places actuarial and investment risk on the entity. The liability recognised in the statement of financial position in respect of Defined Benefit Plan is the present value of the defined benefit obligation at the reporting date. The defined benefit obligation is calculated annually by independent actuaries, using projected unit credit method, as recommended by LKAS 19 Employee Benefit. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates that apply to the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related liability.

The assumptions based on which the results of the actuarial valuation were determined are included in the note 26.3 to the Financial Statements.

This liability is not externally funded and the item is grouped under non-current liabilities in the statement of financial position. However, under the Payment of Gratuity Act No. 12 of 1983 the liability to an employee arises only on completion of five years of continued service. The company recognizes all actuarial-gains and losses arising from defined benefit plans in other comprehensive Income and expenses related to defined benefit plans in staff expenses in profit or loss.

3.5.4. Termination benefitsTermination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

3.6. GrantsGrants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant, and are then recognised in profit or loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the periods in which the expenses are recognised.

3.7. Finance income and finance costsThe Group’s finance income and finance costs would include:• interest income;• interest expense;• dividend income;• the net gain or loss on the disposal of

available-for-sale financial assets;• the net gain or loss on financial assets

at fair value through profit or loss;• the foreign currency gain or loss on

financial assets and financial liabilities;• the gain on the re-measurement to

fair value of any pre-existing interest in an acquiree in a business combination;

• impairment losses recognised on


financial assets (other than trade receivables);

• the reclassification of net gains previously recognised in other comprehensive income.

3.8. Income TaxIncome tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

3.8.1. Current taxCurrent tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax payable also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if certain criteria are met.

3.8.2. Deferred taxDeferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognised for:• temporary differences on the initial

recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

A deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Future taxable profits are determined based on business plans for individual subsidiaries in the Group and the reversal of temporary differences. Deferred tax is not recognized for the undistributed profits of subsidiaries as the parent company has control over the dividend policy of its subsidiaries and distribution of those profits. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Un-recognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property that is measured at fair value is presumed to be recovered through sale.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

3.9. Dividend distributionDividend distribution to the Company’s shareholders is recognized as a liability in the Group’s financial statements in the period in which the dividends are proposed by directors or approved by the Company’s shareholders, as the case may be.



3.10. InventoriesInventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated costs necessary to make the sale.

Property inventoryThe Group’s inventories arise where there is a change in use of investment properties evidenced by the commencement of development with a view to sale, and the properties are reclassified as inventories at their deemed cost, which is the fair value at the date of reclassification. They are subsequently carried at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less costs to complete redevelopment and selling expenses.

3.11. Property, plant and equipmenti. Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Land is stated at its fair value. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the following:

• the cost of materials and direct labour;• any other costs directly attributable

to bringing the assets to a working condition for their intended use;

• when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and

• capitalised borrowing costs.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. On-going repairs and maintenance are expensed as incurred.

iii. Depreciation

Items of property, plant and equipment are depreciated from the date they are available for use or, in respect of self-constructed assets, from the date that the asset is completed and ready for use. Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line basis over their estimated useful lives. Depreciation

is generally recognised in profit or loss, unless the amount is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

Description No of yearsFreehold buildings 50Improvements to leasehold buildings

4 to or period of lease whichever is

lowerPlant & machinery 5 to 10Motor vehicles 4 to 5Furniture & fittings 5

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Fully depreciated property, plant and equipment are retained in the financial statements until such time when they are no longer in use.

iv. Constructions in progress

All direct and indirect costs that are related to the construction of fixed assets and incurred before the assets are ready for their intended use are capitalised as construction in progress. Construction in progress is stated in the statement of financial position at cost less impairment losses. Construction in progress is transferred to fixed assets when it is ready for its intended use. No depreciation is provided against construction in progress.


v. Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, the property is re-measured to fair value and reclassified as investment property. Any gain arising on this re-measurement is recognised in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in the revaluation reserve in equity. Any loss is recognized immediately in profit or loss.

3.12. Intangible assets and goodwilli. Recognition and measurement

Asset Measurement BasisGoodwill Goodwill arising on the

acquisition of subsidiaries is measured at cost less accumulated impairment losses. In respect of acquisitions prior to 1 April 2011, goodwill is included on the basis of its deemed cost, which represents the amount recorded under previous GAAP (SLAS) In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity accounted investee as a whole.

3.13. Investment propertyInvestment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business or use in the production or supply of goods or services or for administrative purposes.

Investment property is initially measured at cost and subsequently at fair value with any change therein recognised in profit or loss. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. When investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings.

When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

3.14. Assets held for saleNon-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale or held-for distribution if it is highly probable that they will be recovered primarily through sale or distribution rather than through

Asset Measurement BasisOther intangible assets

Other intangible assets, including computer software, patents, trademarks and licenses, which are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

iii. Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognized in profit or loss. Goodwill is not amortised.

The estimated useful lives for current and comparative periods are as follows:

Description No of yearsTrademarks and licenses

10 years

Computer software 4 years



continuing use. Immediately before classification as held-for-sale or held-for-distribution, the assets, or components of a disposal group, are re-measured in accordance with the Group’s other accounting policies. Thereafter, generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro- rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on re-measurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. Once classified as held-for-sale or held for-distribution, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

3.15. Financial instruments3.15.1. Non-derivative financial assets and liabilitiesThe Group classifies non-derivative financial assets into the categories of financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. The Group classifies non-derivative financial liabilities into the other financial liabilities category.

i. Recognition and derecognition

The Group initially recognises loans and receivables on the date when they are originated. All other financial assets (including assets designated as at fair value through profit or loss) are recognised initially on the trade date, when the Group becomes a party to the contractual provisions of the instrument.

The Group de-recognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

The Group de-recognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

ii. Non-derivative financial assets - Measurement

Asset Measurement BasisFinancial assets at fair value through profit or loss

A financial asset is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein, including any interest or dividend income are recognised in profit or loss.

Held-to-maturity financial assets

If the Group has the positive intent and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. These assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses.

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 recognised 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.


Asset Measurement BasisAvailable-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the above categories of financial assets. These assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognised in other comprehensive income and accumulated in the fair value reserve in equity. When these assets are de-recognised, the gain or loss accumulated in equity is reclassified to profit or loss.

iii. Non-derivative financial liabilities - Measurement

Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise loans and borrowings, debt securities issued, bank overdrafts, and trade and other payables. Bank overdrafts that are repayable on demand and form an integral part of the Group’ s cash management are included as a component of cash and cash equivalents for the statement of cash flows.

3.15.2. Derivative financial instrumentsDerivatives are initially recognised at fair value; any directly attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

a. Financial liability on put options written over non-controlling-interest

The financial liability is recognised at the present value of the redemption amount and accreted through finance charges in the profit or loss over the contract period up to the final redemption amount. Any adjustments to the redemption amount are recognised in equity in accordance with LKAS 39.

The initial redemption liability is a reduction of parent’s equity if the risks and rewards of ownership remain with the non-controlling interest or a reduction of non-controlling interest equity if the risks and rewards of ownership transfer to the parent. If the present value of the redemption amount exceeds the carrying value of the non-controlling interest, any excess is recorded against parent’s equity.

If the contract is exercised, any non-controlling interest equity is allocated to parent equity. No adjustments are made to goodwill upon settlement of the contract. The redemption liability is offset by the cash payment.

If the contract lapses un-exercised where the risks and rewards of ownership have transferred to the parent, a non-controlling interest equity is reinstated. In substance, the parent has sold those shares back to the non-controlling interest and it is a transaction with a non-controlling interest. The non-controlling interest equity amount is reinstated at an amount equal to its share of the carrying values of the subsidiary’s net assets at the date of lapse plus the goodwill from the subsidiary’s initial acquisition. Any difference between the redemption liability and the non-controlling interest equity adjustment is recognised against the parent’s equity. No adjustments are made to goodwill.

If the contract lapses unexercised where the risks and rewards of ownership remain with the non-controlling interest, then no adjustment is made to the carrying value of the non-controlling interest and the redemption liability is de-recognised against the parent’s equity.

3.16. Stated capital - Ordinary sharesOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

3.17. Impairmenti. Non-derivative financial assets

A financial asset not classified as at fair value through profit or loss, including an interest in an equity-accounted investee, is 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.• observable data indicating that there is a measurable decrease in the expected cash flows from a group of financial assets.

In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Category Measurement BasisFinancial assets measured at amortised cost

The Group considers evidence of impairment for these assets measured at amortised cost (loans and receivables and held-to-maturity financial assets) at both a specific asset and collective level. All individually significant assets are individually assessed for impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Group uses historical information on the timing of recoveries and the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss 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 a provisions account against loans and receivables or held-to-maturity investment securities. Interest on the impaired asset continues to be recognised. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.

Available-for-sale financial assets

Impairment losses on available-for sale financial assets are recognised by reclassifying the losses accumulated in the fair value (available for sale) reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost (net of any principal repayment and amortization) and the current fair value, less any impairment loss recognised previously in profit or loss. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available for-sale equity security is recognized in other comprehensive income.

Equity-accounted investees

An impairment loss in respect of an equity-accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in profit or loss. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.


ii. Non-financial assets

The carrying amounts of the Group’s non-financial assets (investment property, inventories and deferred tax assets) are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and indefinite-lived intangible assets are tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro-rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the

ii. Leased assets

Assets held by the Group under leases which transfer to the Group substantially all of the risks and rewards of ownership are classified as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Assets held under other leases are classified as operating leases and are not recognised in the Group’s statement of financial position.

iii. Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

3.20. Operating profitOperating profit is the result generated from the continuing principal revenue producing activities of the Group as well as other income and expenses related to operating activities. Operating profit excludes net finance costs, share of profit of equity accounted investees and income taxes.


extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.18. ProvisionsA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

3.19. Leasesi. Determining whether an arrangement

contains a lease

At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. At inception or on reassessment of an arrangement that contains a lease, the Group separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset; subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Group’s incremental borrowing rate.


3.21. Fair value measurement‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities

When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid price and liabilities and short positions at an ask price.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price – i.e. the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

4. Standards issued but not yet effectiveThe Institute of Chartered Accountants of Sri Lanka has issued the following new and amendments to Sri Lanka Accounting Standards and which are effective after the period end of 31 March 2017. However these new and amendments to standards have not been applied in preparing these financial statements.

The extent of the impact of these Standards to the Financial Statements has not been determined as at 31 March 2017.

4.1. New accounting standards issued but not effective as at reporting dateSLFRS 9 – Financial Instruments: Classification & MeasurementSLFRS 9, as issued, reflects the first phase of work on replacement of LKAS 39 and applies to classification and measurement of financial assets & liabilities, depending on the entity’s business model for managing contractual cash flows characteristics of the financial asset. SLFRS 9 will be effective for financial periods beginning on or after 1 January 2018.

The actual impact of adopting SLFRS 9 on the Group’s consolidated financial statements in 2017-18 is not known and cannot be reliably estimated because it will be dependent on the financial instruments that the Group holds and economic conditions at that time as well as accounting elections and judgements that it will make in the future. The new standard will require the Group to revise its accounting processes and internal controls related to reporting financial instruments and these changes are not yet complete.

SLFRS 15 – Revenue from contract with customersSLFRS 15, establishes a comprehensive framework for determining revenue recognition by a 5 step model and will replace the existing LKAS 18 & LKAS 11. SLFRS 15, will be applicable for the financial periods beginning on or after 1 January 2018


SLFRS 16 – LeasesSLFRS 16 eliminates the current dual accounting model for lessees which distinguishes between On-Balance Sheet fiancé leases and Off-Balance Sheet operating leases. Instead there will be a single On-Balance Sheet accounting model that is similar to current finance lease accounting. SLFRS 16 will be applicable for the financial periods beginning on or after 1 January 2018. The impact on the implementation of the above standard has not been quantified yet.

5. Financial risk managementThe Group has exposure to the following risks from its use of financial instruments:• Credit risk• Liquidity risk• Market risk• Operational risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital.

Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk

management framework. The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

5.1. Credit riskCredit risk is the risk of financial loss to the Group if a customer or counter party to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers. The Group is exposed to credit risk on trade receivables and other receivables, due from related party and bank balances.

Trade and other receivablesThe creditworthiness of each customer is evaluated prior to sanctioning credit facilities. Appropriate procedures for follow-up and recovery are in place to monitor credit risk.

5.2. Liquidity riskLiquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking damage to the Group’s reputation.

5.3. Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

5.4. Currency riskCurrency risk is the risk that the value of a financial instrument will fluctuate due to a change in foreign exchange rates.



5.5. Operational riskOperational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Group’s operations. The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Group’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity. The primary responsibility for the development and implementation of controls to address operational risk is assigned to management. This responsibility is supported by the development of overall Group standards for the management of operational risk in the following areas:

Requirements for appropriate segregation of duties, including the independent authorisation of transactions;• Requirements for the reconciliation

and monitoring of transactions;• Compliance with regulatory and other

legal requirements;• Documentation of controls and

procedures;• Development of contingency plans;• Training and professional

development;• Ethical and business standards;• Risk mitigation, including insurance

where this is effective.

Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

The Cash Flow Statement has been prepared using the “Indirect method” of preparing cash flows in accordance with the Sri Lanka Accounting Standard (LKAS 07) - Statement of Cash Flows.


6. RevenueFor the year ended 31st March Group Company


The following is an analysis of the Group’s revenueSales of goods 84,135,191 71,495,728 - -Rendering of services 340,352 330,529 - -Investment property rentals 562,238 572,925 - - 85,037,781 72,399,182 - -

7. Other incomeFor the year ended 31st March Group Company


Gain on sale of property, plant and equipment 38,790 24,846 - -Amortisation of grants 11,481 11,481 - -Merchandising income 1,471,436 1,398,080 - -Change in fair value of investment property (refer note 15) 424,774 190,583 4,300 148,500Rental income from property 52,783 32,743 28,985 21,314Gain on deemed disposal of equity accounted investees - 55,650 - -Sundry Income 249,429 278,157 - - 2,248,693 1,991,540 33,285 169,814

8. Results from operating activitiesFor the year ended 31st March Group Company


The following items have been included in results from operating activities:Employee costs (refer note 8.1) 5,702,193 5,029,888 30,487 34,758Depreciation of property, plant and equipment 1,873,811 1,766,001 2,729 5,091Directors’ emoluments 313,016 259,393 26,127 24,026Fees payable to the company’s auditor (refer note 8.2) 13,908 10,258 990 758Impairment of trade and other receivables 29,652 35,232 - -Impairment loss on investments in subsidiary - - 103,045 180,197Impairment losses recognised for the year in respect of property, plant and equipment (193) 97,166 - -Impairment of inventories (16,749) 44,711 - -





8.1 Employee costsSalaries, wages and other related expenses 5,099,585 4,512,836 24,948 29,121Defined benefit plan cost - retirement benefit obligation 152,667 124,770 2,200 1,529Defined contribution plan costs - EPF & ETF 449,941 392,282 3,339 4,108 5,702,193 5,029,888 30,487 34,758

8.2 Fees payable to the company’s auditorAudit and audit related expenses 8,399 8,241 500 460Non-audit services 5,509 2,017 490 298 13,908 10,258 990 758

9. Net finance income / (expense)For the year ended 31st March Group Company


9.1 Recognised in profit or lossFinance incomeInterest income 298,822 204,102 16,864 8,835Net foreign exchange gain 6,633 56,383 - -Dividends from equity investments 28,424 133,422 1,427,146 621,154Gain on disposal of available sale investments 39,338 53,725 22,378 53,725Re-measurement to fair value of pre-existing interest in acquiree - 29,523 - -Total finance income 373,217 477,155 1,466,388 683,714

Finance expenseFinance cost on bank loans (1,233,546) (690,856) - -Finance cost on finance lease - (42) - -Finance cost on overdraft facilities (270,792) (180,140) (185) (28)Impairment loss on assets classified as available-for-sale - 257 - (50)Total finance expense (1,504,338) (870,781) (185) (78)Net finance income / (expenses) recognised in profit or loss (1,131,121) (393,626) 1,466,203 683,636

9.2 Recognised in other comprehensive incomeNet change in fair value of available-for-sale financial assets (7,137) 103,390 1,217 127,334Reclassification of fair value on disposal of available-for-sale financial assets (30,510) (168,947) (30,510) (168,947) (37,647) (65,557) (29,293) (41,613)


10. Income tax expenseFor the year ended 31st March Group Company


10.1 Amounts recognised in profit or lossCurrent tax expensesCurrent tax on profits for the year 1,707,185 1,096,790 24,719 13,925Current tax on profits in respect of prior years 5,433 8,564 (28) 9,395 1,712,618 1,105,354 24,691 23,320

Deferred tax expensesDeferred tax on profits for the year 311,866 238,763 - -Deferred tax on profits in respect of prior years (1,390) - - - 310,476 238,763 - -Total income tax expense recognised in profit or loss 2,023,094 1,344,117 24,691 23,320

10.2 Amounts recognised in other comprehensive incomeRe-measurement of obligation on defined benefit plan 9,814 9,548 - -Share of other comprehensive income of bequity accounted investee 971 (1,396) - -Total income tax expense recognised in other comprehensive income 10,785 8,152 - -

10.3 Tax rate applicable for Group companies(a) Standard rate

The standard corporate tax rate is 28% for all companies other than as disclosed below.

(b) Companies liable to income tax other than at standard rate

• Part of the profits of Cargills (Ceylon) PLC is taxed at 40%.• In accordance with the Inland revenue Act No 10 of 2006 and subsequent amendments thereto, the income of Cargills Confectionery

(Pvt) Ltd is exempt from Income Tax until the year of assessment 2017/18.• Under the Inland Revenue Act No. 10 of 2006 and subsequent amendments thereto, Cargills Quality Dairies (Private) Limited, Cargills

Quality Foods Limited, Cargills Agrifoods Limited and Kotmale Dairy Products (Private) Limited are subject to a concessionary tax rate of 10%. However, as the Department of Inland revenue is contesting the income tax exemptions claimed, provisions have been made for income tax at the normal rate for the financial years ended 31st March 2012 to 31st March 2017 although tax returns continue to be filed based on concessionary tax rate.



10.4 Reconciliation of effective tax

In percentages In thousands of rupees

Group Company Group CompanyFor the year ended 31st March 2017 2016 2017 2016 2017 2016 2017 2016

Profit before tax 4,690,108 3,662,324 1,323,215 592,191

Income tax using the Company’s standard tax rate 28.00 28.00 28.00 28.00 1,313,230 1,025,451 370,500 165,813Effect of higher tax rate (0.04) 0.20 - - (1,911) 7,398 - -Inter-company entries 8.14 14.58 - - 381,634 533,964 - -Non-deductible expenses 23.09 22.92 2.29 8.87 1,083,082 839,452 30,291 52,529Deductible expenses (18.74) (19.94) - (0.01) (878,893) (730,412) (1) (82)Tax-exempt income (12.75) (23.65) (29.72) (36.07) (598,212) (866,013) (393,207) (213,591)Other sources of income 1.31 1.64 0.36 0.42 61,317 60,239 4,722 2,474Allowable deductions out of un-recognised tax losses (0.55) (1.47) (0.33) (0.42) (25,984) (53,784) (4,307) (2,500)Current year losses 0.60 4.04 - - 28,235 147,805 - -Irrecoverable economic service charges (ESC) (0.00) (0.03) - - (231) (1,223) - -Tax on dividend received 7.35 3.66 1.26 1.57 344,918 133,913 16,721 9,282 36.40 29.95 1.87 2.36 1,707,185 1,096,790 24,719 13,925Change in un-recognised temporary differences 6.62 6.52 - - 310,476 238,763 - -Income tax on profit in respect of prior years 0.12 0.23 - 1.59 5,433 8,564 (28) 9,395Income tax expense recognised in profit or loss 43.14 36.70 1.87 3.95 2,023,094 1,344,117 24,691 23,320


10.5 Deferred tax (assets) / liabilities(a) Movement in deferred tax balances

In thousands of rupees Recognised in in other Net balance Net balance Recognised in comprehensive as at Deferred tax Deferred tax as at 1 April profit or loss income 31 March liability assets

For the year ended 31st March 201Accelerated tax depreciation [refer note 10.5(a)(i)] 1,217,356 367,555 - 1,584,911 1,584,911 -Fair value gains 71,194 - - 71,194 71,194 -Retirement benefit obligation (161,766) (27,470) (9,548) (198,784) - (198,784)Tax losses [refer note 10.5(a)(ii)] (293,169) (20,182) - (313,351) - (313,351)Decrease in future tax rates 58,255 (62,129) - (3,874) - (3,874)Provisions (159,214) (21,749) - (180,963) - (180,963)Other (24,682) 2,738 - (21,944) - (21,944)Tax assets / (liabilities) before set-off 707,974 238,763 (9,548) 937,189 1,656,105 (718,916)Set-off of tax - - - - (664,286) 664,286Net tax assets / (liabilities) 707,974 238,763 (9,548) 937,189 991,819 (54,630)

For the year ended 31st March 2017Accelerated tax depreciation [refer note 10.5(a)(i)] 1,584,911 365,346 - 1,950,257 1,950,257 -Fair value gains 71,194 - - 71,194 71,194 -Retirement benefit obligation (198,784) (28,046) (9,814) (236,644) - (236,644)Tax losses [refer note 10.5(a)(ii)] (313,351) 8,915 - (304,436) - (304,436)Decrease in future tax rates (3,874) - - (3,874) - (3,874)Provisions (180,963) 4,459 - (176,504) - (176,504)Other (21,944) (40,198) - (62,142) - (62,142)Tax assets / (liabilities) before set-off 937,189 310,476 (9,814) 1,237,851 2,021,451 (783,600)Set-off of tax - - - - (734,036) 734,036Net tax assets / (liabilities) 937,189 310,476 (9,814) 1,237,851 1,287,415 (49,564)

(i) Accelerated tax depreciation on property, plant and equipment

(ii) Tax losses are available for deduction against future taxable income.



(b) The deferred income tax assets and liabilities during the year were calculated after setting off balances within the same tax jurisdiction.

(d) Deferred tax has been computed taking into consideration the tax rates of 28% or 40% for all standard rate companies. A weighted averaged rate is applied when income is taxed at different tax rates. Details of tax rates for individual companies are shown in Note 10.3 (a) & (b).

(e) Deferred Taxation is provided for all Group companies except those companies with tax losses available for carry forward exceeding taxable temporary differences and companies which are exempt from income tax.

(f) Un-accounted deferred tax assets

A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available in the foreseeable future, against which such deductible temporary timing differences could be utilised. The deferred tax effect on undistributed reserves of subsidiaries has not been recognised where the parent can control the timing of the reversal of these temporary differences.

The break down of un-accounted deferred tax assets is given below;



Deductible temporary differences 43,332 33,566 2,781 2,360Tax losses 365,321 124,539 120,233 124,539 408,653 158,105 123,014 126,899

10.6 Income tax treatmentsThe income tax exemption claimed under the Inland Revenue Act No. 10 of 2006 are being contested by the Department of Inland Revenue. The contingent liability on potential income tax payments is as follows:

Cargills Agrifoods Limited - Rs. 77.23 Mn, Cargills Quality Dairies (Private) Limited - Rs. 208.87 Mn, Cargills Quality Foods Limited - Rs.222.60 Mn and Kotmale Dairy Products (Private) Limited Rs. 61.40 Mn. Having sought professional advice, the Management is confident that the tax exemptions are applicable and as such no liabilities would arise.

An additional tax assessment of Rs 243.58 Mn has been issued by the Department of Inland Revenue for the Y/A 2013/2014. Having sought professional advice, a valid petition of appeal was made to the Commissioner General of Inland Revenue. Accordingly, no provision has been made in the financial statements of the subsidiary company Cargills (Ceylon) PLC or the Group.


11. Earnings per share11.1 Basic earnings per shareEarnings per share is calculated by dividing the profit attributable to equity holders of the Company by weighted average number of ordinary shares outstanding during the year.


2017 2016 2017 2016

Basic earning per share in rupees 9.55 8.88 7.09 3.11

In thousands of rupeesProfit for the year attributable to owners of the Company 1,747,876 1,626,228 1,298,524 568,871

In thousands no. of sharesWeighted average number of ordinary shares in issue / Present number of ordinary shares in issue 183,097 183,097 183,097 183,097

11.2 Diluted earnings per shareDiluted earnings per share computation is the same as in the note 11.1.

12. Dividends 2017 2016

Total Total Date of Dividend dividend Date of Dividend dividend payment per share (In thousands payment per share (In thousands Rs. of rupees) Rs. of rupees)

First interim 19-January-2017 1.70 311,265 18-January-2016 1.00 183,097Second interim 28-March-2017 3.50 640,840 - - -Final - - - 14-July-2016 2.80 512,672 5.20 952,105 3.80 695,769



13. Property, plant & equipment13.1 Reconciliation of carrying amount

Group Improvements In thousands of rupees Freehold Freehold to leasehold Plant & Motor Furniture & Under land buildings buildings machinery vehicles fittings construction TotalCost / ValuationAs at 1st April 2015 8,517,640 2,114,946 4,068,216 12,404,134 1,017,803 243,941 968,131 29,334,811Additions - 131,689 412,106 1,001,531 148,923 16,406 155,034 1,865,689Revaluation 1,148,526 - - - - - - 1,148,526Losses recognised in profit or loss - - (775) (13,365) (431) (2,065) (96,147) (112,783)On Acquisition of Subsidiaries - - 1,135 5,228 4,557 2,887 - 13,807De-recognised on disposal of subsidiaries - - - - - (268) - (268)Disposals - - - (13,133) (21,857) - (86,303) (121,293)Transfers 525,392 (2,134) - 36,403 - - (36,403) 523,258As at 31st March 2016 10,191,558 2,244,501 4,480,682 13,420,798 1,148,995 260,901 904,312 32,651,747

As at 1st April 2016 10,191,558 2,244,501 4,480,682 13,420,798 1,148,995 260,901 904,312 32,651,747Additions 451,797 75,285 792,887 1,818,476 194,373 248 1,237,674 4,570,740 Losses recognised in profit or loss - - (889) (6,716) - - - (7,605)On Acquisition of Subsidiaries - - - 946 4,131 - - 5,077Disposals - - (1,135) (84,643) (95,864) (2,887) - (184,529)Transfers (236,292) (64,535) - - - - - (300,827)As at 31st March 2017 10,407,063 2,255,251 5,271,545 15,148,861 1,251,635 258,262 2,141,986 36,734,603

Accumulated depreciation and impairment lossesAs at 1st April 2015 - 525,231 2,269,663 6,337,006 709,066 140,320 - 9,981,286Charge for the year - 88,809 524,769 995,080 134,825 22,518 - 1,766,001Losses recognised in profit or loss - - (677) (12,644) (397) (1,899) - (15,617)De-recognised on disposal of subsidiaries - - - - - (193) - (193)Disposals - - - (7,688) (20,697) - - (28,385)Transfers - (171) - - - - - (171)As at 31st March 2016 - 613,869 2,793,755 7,311,754 822,797 160,746 - 11,702,921

As at 1st April 2016 - 613,869 2,793,755 7,311,754 822,797 160,746 - 11,702,921Charge for the year - 94,852 472,617 1,167,025 131,473 7,844 - 1,873,811 Losses recognised in profit or loss - - (884) (6,699) (215) - - (7,798)Disposals - - - (51,824) (83,999) (180) - (136,003)Transfers - (5,735) - - - - - (5,735)As at 31st March 2017 - 702,986 3,265,488 8,420,256 870,056 168,410 - 13,427,196

Carrying ValueAs at 1st April 2016 10,191,558 1,630,632 1,686,927 6,109,044 326,198 100,155 904,312 20,948,826As at 31st March 2017 10,407,063 1,552,265 2,006,057 6,728,605 381,579 89,852 2,141,986 23,307,407


Company Improvements In thousands of rupees to leasehold Plant & Motor buildings machinery vehicle Total

Cost / valuationAs at 1st April 2015 4,854 2,707 41,024 48,585Additions - - - -As at 31st March 2016 4,854 2,707 41,024 48,585

As at 1st April 2016 4,854 2,707 41,024 48,585Additions - - - -As at 31st March 2017 4,854 2,707 41,024 48,585

Accumulated depreciation and impairmentAs at 1st April 2015 2,516 2,589 30,091 35,196Charge for the year 73 58 4,960 5,091As at 31st March 2016 2,589 2,647 35,051 40,287

As at 1st April 2016 2,589 2,647 35,051 40,287Charge for the year 73 57 2,599 2,729As at 31st March 2017 2,662 2,704 37,650 43,016

Carrying ValueAs at 1st April 2016 2,265 60 5,973 8,298As at 31st March 2017 2,192 3 3,374 5,569

13.2 Fair Value Measurement of Freehold Land - GroupThe Group’s freehold lands are stated at their revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated impairment losses. The Group has revalued all of its freehold land in the reporting period ending 31st March 2016. The value measurements were carried out in conformity with the requirements of the Sri Lanka Accounting Standards by Mr. Tissa Weeratne, Chartered Valuation Surveyor, UK & Fellow, Institute of Valuers of Sri Lanka, with appropriate qualifications and recent experience in the valuation of properties in the relevant locations. Mr. T Weeratne is not related to the Group. The surplus arising on such valuations have been transferred to Revaluation Reserves.

The fair value of the freehold land was determined based on the market comparable approach that reflects recent transaction prices for similar properties. The fair value measurement for all the lands has been categorised as a Level 3 fair value based on the inputs to the valuation technique used. A significant increase in the market value per perch used in arriving at fair value would result in a significant increase in fair value, and vice versa.

If revalued freehold land recorded under property, plant and equipment were stated on the historical cost basis, the carrying amounts would be as follows:

As at 31 March GroupIn thousands of rupees 2017 2016

Freehold land 6,063,601 6,063,601



13.3 Details of the lands - GroupAs at 31st March Land extent Building area

(Sq. ft.)No. of

buildingsFair value

In thousands of rupees2017 2016

C T Holdings PLCKandy 170 Perches 9,650 4 435,500 435,500Negombo 91 Perches 17,500 1 240,250 240,250Bandarawela 2.8 Acres 30,600 4 628,000 628,000Cargills (Ceylon) PLCColombo 01 141 Perches 124,215 1 2,252,000 2,252,000Colombo 02 82 Perches 20,970 2 721,600 721,600Boralasgamuwa 2.5 Acres 23,168 4 - 236,292Canal Row, Colombo 01 15 Perches 12,300 1 240,500 240,500Moratuwa 78.6 Perches - - 249,600 249,600Dematagoda 84 Perches - - 275,792 275,792Cargills Foods Company (Private) LimitedKandy 94 Perches 25,174 1 1,289,176 1,289,176Maharagama 145 Perches 15,827 1 479,500 479,500Nuwara Eliya 57 Perches 9,617 1 197,882 197,882Mattakuliya 2 Acres 80,967 2 710,371 710,371Kohuwala 29 Perches 6,225 1 100,000 100,000Mattakuliya 1.8 Acres 44,469 4 439,200 439,200Gampaha 82.6 Perches - - 72,175 72,175Cargills Quality Foods LimitedMattakuliya 1.3 Acres 16,409 - 342,000 342,000Ja - Ela 5.1 Acres 38,381 - 291,470 291,470Ja - Ela 4 Acres 29,246 - 72,400 72,400Cargills Agrifoods LimitedKatana 11.3 Acres 66,184 - 269,000 269,000Millers LimitedKelaniya 1.5 Acres 55,770 2 185,250 185,250C P C Lanka LimitedKatoolaya Estate, Thawalantenne 4 Acres 695 1 12,100 12,100Kotmale Dairy Products (Private) LimitedMulleriyawa 1.7 Acres 28,862 3 20,000 20,000Bogahawatta 1.7 Acres 15,980 6 78,500 78,500Kuduoya Estate, Ruwanpura, Hatton 17 Acres 10,221 4 51,399 -Cargills Quality Dairies (Private) LimitedMirigama, Baduragoda 100 Perches - - 6,000 6,000The Empire Investments Company (Private) LimitedBandarawela 85 Perches 6,345 1 347,000 347,000Katubadda - - - 400,398 -Total 10,407,063 10,191,558


13.4 Leased assets capitalised in property, plant and equipment

Group

As at 31st March Capitalised Accumulated Carrying value In thousands of rupees Amount Amortisation 2017 2016

Improvements to leasehold buildings 5,271,545 (3,265,488) 2,006,057 1,686,927

13.5 SecurityThe details of assets mortgaged for banking facilities obtained have been given in the note 25.4 to the financial statements.

13.6 Details on classes of assets(a) Land & buildings consist of freehold land, road ways & buildings.

(b) Improvements to leasehold buildings include the cost of civil work incurred in setting up new outlets on leasehold premises.

(c) Furniture & fittings consist of tools, implements, furniture & fittings, office & other equipment.

(e) Property, plant and equipment under construction consists of expenditure incurred on projects where operations had not commenced as at the reporting date.

13.7 Other informationProperty, plant and equipment of the Group and the Company included:


In millions of rupees 2017 2016 2017 2016

Fully depreciated assets 2,798.57 2,487.72 33.033 33.033

14. Prepaid lease rentals to acquire rights to use landsAs at 31st March Group Company


CostAs at 1st April 48,223 48,223 - -Additions 153,349 - - -As at 31st March 201,572 48,223 - -

Accumulated amortisationAs at 1st April 10,947 9,297 - -Additions 4,348 1,650 - -As at 31st March 15,295 10,947 - -Carrying value 186,277 37,276 - -

Current portion 6,032 2,744 - -Non-current portion 180,245 34,532 - - 186,277 37,276 - -



15. Investment Properties15.1 Reconciliation of Carrying Amount



As at 1st April 9,828,265 8,388,972 1,443,250 1,294,750Improvements during the year 320 6,747 - -On acquisition of subsidiaries - 1,240,000 - -Reclassification from property, plant and equipment 295,092 1,963 - -Transfer to profit or loss (23,865) - - -Change in fair value 424,774 190,583 4,300 148,500At 31st March 10,524,586 9,828,265 1,447,550 1,443,250

Investment properties comprise both commercial properties leased to third parties as well as land held for capital appreciation. Changes in fair values are recognised as gains in profit or loss and included in ‘other income’. All gains are unrealised.

15.2 Measurement of fair values(a) Valuation process

The valuations of investment properties for the reporting period were performed by Mr. Tissa Weeratne, Chartered Valuation Surveyor, UK & Fellow, Institute of Valuers of Sri Lanka, an accredited independent valuer with a recognised and relevant professional qualification and with recent experience in the locations and categories of the investment property being valued. The valuation models applied are in accordance with those recommended by the International Valuation Standards Committee and are consistent with the principles in SLFRS 13.

For all investment properties, their current use equates to the highest and best use and changes in Level 2 and 3 fair values are reviewed annually at each reporting date.

(b) Valuation techniques used

Valuation technique (1) : - market comparable approachThe bare lands are valued using the market comparable approach. Under the market comparable approach, a property’s fair value is estimated based on comparable transactions. The valuer used the comparable method of valuation involving analysing data obtained from local selling prices for the entire portfolio, by property type. The market comparable approach is based upon the principle of substitution under which a potential buyer will not pay more for the property than it will cost to buy a comparable substitute property. The unit of comparison applied by the Group is the price per perch.

Valuation techniques (2) : - income capitalisation methodThe commercial property (shopping malls & theatres) are valued using the income capitalisation method where a property’s fair value is estimated based on the normalised net operating income generated by the property, which is divided by the capitalisation (discount) rate. The difference between gross and net rental income includes expense at rates estimated by the valuer.


(c) Fair value hierarchy

The fair value measurement for all the investment properties are categorised as a Level 3 fair value based on the inputs to the valuation technique used. A significant increase in the market value per perch, capitalisation rate and market rent used in arriving at fair value would result in a significant increase in fair value, and vice versa. There has been no change to the valuation technique during the year.

Level 1 - Quoted prices in active marketsLevel 2 - Significant observable inputsLevel 3 - Significant unobservable inputs

(d) Information about fair value measurements using significant unobservable inputs (Level 3)

Property valuations are inherently subjective as they are made on the basis of assumptions made by the valuer which may not prove to be accurate. For these reasons we have classified the investment property valuations as Level 3 as defined by SLFRS 13.

Group

Description of the property Location Land extent Building area

(sq. ft.)

No. of buildings

In thousands of rupeesFair value Change in fair value2017 2016 2017 2016

Company:- C T Holdings PLCLand Nuwara Eliya 60 Perches 6,500 3 139,300 132,998 6,300 26,500Company:- Cargills (Ceylon) PLCLand Colombo 02 1.5 Acres 21,070 2 2,344,300 2,253,800 90,500 46,800Land Colombo 02 78 Perches 4,846 1 647,600 627,800 19,800 11,400Commercial property Jaffna Leasehold 98,525 1 173,510 175,088 (1,579) (5,317)Company:- Millers LimitedBare land Nittambuwa 112 Perches - - 118,875 102,250 16,625 7,950Company:- Dawson Office Complex (Private) LimitedBare land Colombo 02 94 Perches - - 800,280 772,200 28,080 (71,800)Company:- C T Land Development PLCCommercial property Colombo 4 257 Perches 277,514 - 3,306,764 3,117,949 188,817 180,750Company:- C T Real Estate (Private) LimitedBare land Piliyandala 114 Perches - - 71,200 87,477 6,888 2,227Commercial property Piliyandala 154.9 Perches 23,985 2 116,057 118,703 (2,265) (7,927)Company:- C T Properties Lakeside (Private) LimitedBare land Boralesgamuwa 43 Acres 11,400 1 1,200,000 1,200,000 - -Company:- C T Properties G S (Private) LimitedBare land Kotahena 199.6 Acres - - 1,298,700 1,240,000 58,700 -Company:- Frederick North Hotel Company LimitedBare land Boralasgamuwa 2.5 Acres 23,168 4 308,000 - 12,908 Total 10,524,586 9,828,265 424,774 190,583



Company

Description of the property Location Land extent Building area

(sq. ft.)

No. of buildings

In thousands of rupeesFair value Change in fair value2017 2016 2017 2016

Land Kandy 170 Perches 9,650 4 447,000 438,500 8,500 52,000Land Negombo 91.0 Perches 17,500 1 240,250 243,750 (3,500) 42,000Commercial property Bandarawela 2.8 Acres 30,600 4 621,000 628,000 (7,000) 28,000Bare land Nuwara Eliya 60 Perches 6,500 3 139,300 133,000 6,300 26,500Total 1,447,550 1,443,250 4,300 148,500

(e) Key unobservable inputs:

Valuation technique (1) : - market comparable approachUnobservable input - Market value per perch

Valuation technique (2) : - income capitalisation methodUnobservable inputs - Estimated rental value (ERV), Equivalent yield

(f) Income and expense

During the year ended 31 March 2017 Rs. 615.02 Mn (2016: Rs. 605.67 ) rental and ancillary income from investment properties was recognised in the Group profit or loss. Direct operating expenses, including repairs and maintenance, arising from investment property that generated rental income amounted to Rs. 791.26 Mn (2016: Rs. 1,623.27 Mn ). The Group did not incur any direct operating expenses arising from investment properties that did not generate rental income (2016: Nil).

(g) Restrictions and obligations

As at 31 March 2017 there were no restrictions on the realisability of investment property or the remittance of income and proceeds of disposal (2016: Rs. nil) except for the restriction mentioned as note (i) below. There are no obligations to construct or develop the Group’s residential or development land investment property or has no obligation to complete any construction of any property as at the reporting date.

i. Restrictions on realisability of bare land located at Boralesgamuwa

Sri Lanka Land Reclamation and Development Corporation (SLRDC) has issued an acquisition notice for this land under the Weras Reservoir Project on 29th March 2013. Due to impracticability of estimating the compensation to be received from SLRDC or fair value of the land as at 31 March 2017, the said land is stated at its previous revalued amount in the financial statements.


16. Goodwill and other intangible assets

Group Company

As at 31st March Goodwill Trademarks Computer Total Goodwill and Software In thousands of rupees Licenses

CostAs at 1st April 2015 1,229,723 193,807 29,457 1,452,987 688,467On acquisition of subsidiaries - - 435 435 -Additions - 3,503 74,442 77,945 -As at 31st March 2016 1,229,723 197,310 104,334 1,531,367 688,467

As at 1st April 2016 1,229,723 197,310 104,334 1,531,367 688,467On acquisition of subsidiaries - - - - -Additions 93,504 11,694 173,471 278,669 -As at 31st March 2017 1,323,227 209,004 277,805 1,810,036 688,467

Accumulated amortisation and impairmentAs at 1st April 2015 71,746 83,161 19,738 174,645 -Amortisation / impairment loss recognised during the year - 15,336 21,277 36,613 -As at 31st March 2016 71,746 98,497 41,015 211,258 -

As at 1st April 2016 71,746 98,497 41,015 211,258 -Amortisation / impairment loss recognised during the year - 14,537 56,561 71,098 -As at 31st March 2017 71,746 113,034 97,576 282,356 -

Net carrying valueAs at 1st April 2016 1,157,977 98,813 63,319 1,320,109 688,467As at 31st March 2017 1,251,481 95,970 180,229 1,527,680 688,467



16.1 Impairment loss and subsequent reversal for goodwill(a) Consolidation goodwill

Goodwill on acquisition as at the reporting date has been tested for impairment and no impairment was found in carrying value. For the purposes of impairment testing, goodwill has been allocated to the Group’s CGUs (operating divisions) as follows.

AS at 31 March GroupIn thousands of rupees 2017 2016

FMCG 634,760 541,256Corporate 688,467 688,467 1,323,227 1,229,723

There has been no permanent impairment of intangible assets that require a provision during the year. Recoverable value of goodwill has been estimated based on the expected future cash flows. When testing for impairment for goodwill, the recoverable amount is determined on the basis of value-in-use calculations. These calculations use cash flow projections based on financial budgets which are approved by management and are discounted at an appropriate pre-tax discount rate equivalent to the average treasury bond rate.

The key assumptions used are given below;• Business Growth - long term average growth for each division. The weighted average growth rate used is consistent with the forecast

included in industry reports• Inflation - current inflation rates• Margin - past performance and budgeted expectations• Discount rate - risk free adjusted for the specific risk relating to the industry

(b) Company - Merger goodwill

The Company goodwill relates to the property assets and investments acquired through the merger of Millers PLC with C T Holdings PLC (previously Ceylon Theatres PLC) in the financial year 2007/08. At the reporting date, the market value of the said quoted investments and property assets exceed the book value and the recognized goodwill. Therefore, no impairment was deemed to be necessary to the carrying value of goodwill stated in the financial statements.


17. Investments in subsidiaries17.1 Investments in subsidiaries - Company

Name of the investee Principal activity Ownership interest and voting power

Total cost of investment (in thousands of rupees)

2017 2016 2017 2016Quoted subsidiary companiesCargills (Ceylon) PLC R & WD 70.20% 70.20% 168,763 168,763C T Land Development PLC Real estate 67.86% 64.20% 513,913 409,797

682,676 578,560Un-quoted subsidiary companiesC T Properties Limited Real estate 73.61% 76.01% 1,831,850 1,047,850Ceylon Theatres (Private) Limited Entertainment 55.00% 55.00% 165,432 165,432

1,997,282 1,213,282Less: Provision for impairmentAs at 1st April (361,665) (181,468)Impairment recognised during the year (103,045) (180,197)

(464,710) (361,665)Total 2,215,248 1,430,177

There is no significant restriction on the Company’s or its subsidiaries’ ability to access or use the assets and settle the liabilities of the Group.

Impairment of investmentDetails of the respective amounts of impairment of investment in subsidiaries recognised in the profit / (loss) under other expenses is stated below.

AS at 31 March CompanyIn thousands of rupees 2017 2016

Carrying amount 1,831,850 1,047,850Less: Recoverable amount (1,367,140) (686,185)Impairment loss for the Company 464,710 361,665

The method used in calculating recoverable amount is fair value less cost of disposal. The Company’s main assets are investment properties, the fair values of which had been categorised under Level 3 based on the inputs to the valuation technique used.



17.2 Investments in subsidiaries - Group

Name of the investee Principal activity Ownership interest and voting power

Total cost of investment (in thousands of rupees)

2017 2016 2017 2016QuotedSubsidiariesCargills (Ceylon) PLC R & WD 70.20% 70.20% 168,763 168,763C T Land Development PLC Real estate 67.86% 64.20% 513,913 409,797

682,676 578,560Sub - subsidiariesKotmale Holdings PLC FMCG 69.86% 70.20% 1,964,833 1,362,878

1,964,833 1,362,878Un-quotedSubsidiariesC T Properties Limited Real estate 92.03% 92.35% 2,488,925 1,378,925Ceylon Theatres (Private) Limited Entertainment 85.54% 83.89% 300,432 300,432

2,789,357 1,679,357Sub - subsidiariesCargills Quality Foods Limited FMCG 70.20% 70.20% 1,193,453 1,193,453Cargills Agrifoods Limited FMCG 70.20% 70.20% 45,630 45,630C P C Lanka Limited FMCG 70.20% 70.20% 14,200 14,200Cargills Quality Diaries (Private) Limited FMCG 70.20% 70.20% 75,000 75,000Cargills Distributors (Private) Limited FMCG 70.20% 70.20% 50,261 50,261Cargills Food Processors (Private) Limited Restaurants 70.20% 70.20% 213,500 61,500Cargills Food Services (Private) Limited Restaurants 70.20% 70.20% 160,000 160,000Millers Limited R & WD 70.20% 70.20% 300,000 300,000Cargills Foods Company (Private) Limited R & WD 64.58% 64.58% 475,000 475,000Cargills Quality Confectionery (Private) Limited FMCG 70.20% 70.20% 1,445,547 1,445,547Dawson Office Complex (Private) Limited Real estate 70.20% 70.20% 2,350,101 101Cargills Frozen Products (Pvt) Limited FMCG 70.20% 70.20% 50,250 50,250Ceylon Agro Development Company (Pvt) Ltd FMCG 70.20% - 160,019 -C T Property Management Company (Private) Limited Real estate 92.03% 92.35% - -C T Real Estate (Private) Limited Real estate 92.03% 92.35% - -C T Properties Lakeside (Private) Limited Real estate 92.03% 92.35% - -C T Properties GS (Pvt) Ltd Real estate 92.03% 92.35% 615,446 615,446Kotmale Products Limited FMCG 69.86% 70.20% 185,400 185,400Kotmale Milk Foods Limited FMCG 69.86% 70.20% - -Kotmale Dairy Products (Private) Limited FMCG 69.86% 70.20% 13,030 13,030Kotmale Milk Products Limited FMCG 69.86% 70.20% - -Kotmale Marketing (Private) Limited FMCG 69.86% 70.20% - -Frederick North Hotel Company Limited Real estate 70.20% - 311,000 -The Empire Investments Company (Private) Limited Real estate 70.20% - 776,000 -

8,433,837 4,684,81813,870,703 8,305,613

R & WD - Retail & Wholesale DistributionFMCG - Fast Moving Consumer Goods


17.2.1 Composition of the GroupInformation about the composition of the Group at the end of the reporting period is as follows:

Number of Number of wholly-owned non wholly subsidiaries owned subsidiariesAs at 31st March 2017 2016 2017 2016

Retail & wholesale distribution - - 3 3Real estate - - 9 7FMCG - - 14 13Restaurants - - 2 2Entertainment - - 1 1 - - 29 26

17.2.2 Acquisitions of subsidariesDuring the year subsidiary, Cargills Agrifoods Limited acquired 1,460,002 ordinary shares representing 100% stake of Ceylon Agro Development Company (Private) Limited at a total purchase consideration of Rs. 160 Mn. Ceylon Agro Development Company (Private) Limited is engaged in producing and distribution of agricultural seeds.

(i) Consideration transferred

The following table summarises the fair value of consideration transferred as at the acquisition date.

In thousands of rupeesShare of owners of the company 112,334Share of non controlling interest 47,685Total consideration transferred 160,019

(ii) Identifiable assets acquired and liabilities assumed

Current assetsCash and cash equivalents 17,749Inventory 32,780Trade and other receivables 47,296

Non-current assetsProperty, Plant and equipment 5,077

Current liabilitiesEmployee benefits (3,910)Trade and other payables (72,169)Net assets acquired 26,823

Share of owners of the company 18,830Share of NCI 7,993Total 26,823



(iii) Measurement of fair values

The valuation techniques used for measuring the fair value of material assets acquired were as follows.

Property, plant and equipment Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when they are available, and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.

Inventories Market comparison technique: The fair value is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

(iv) Goodwill

Goodwill arising from the acquisition has been recognised as follows.

Consideration transferred 112,334Fair value of identifiable net assets (18,830) 93,504

The goodwill is attributable mainly to the skills and technical talent of the work force and the synergies expected to be achieved from integrating the company into the Group’s existing operation . None of the goodwill recognised is expected to be deductible for tax purposes.

(v) Net cash outflow on acquisition of subsidiaries

Consideration paid in cash 160,019Less: cash and cash equivalent balances acquired (excluding bank overdraft) (17,749) 142,270


17.3 Non-controlling interest17.3.1 Details of non-wholly owned subsidiaries that have material non-controlling interestsSummarised financial informationThe summarised financial information below represents amounts before intra-group eliminations.

As at 31st March Cargills C T Land Ceylon) PLC Development PLCIn thousands of rupees 2017 2016 2017 2016

AssetsCurrent assets 15,759,274 14,931,269 103,872 235,449Non-current assets 33,356,576 27,279,866 3,981,613 3,554,412Total assets 49,115,850 42,211,135 4,085,485 3,789,861

LiabilitiesCurrent liabilities 30,087,087 23,755,857 72,258 75,782Non-current liabilities 4,656,841 3,950,460 628,762 603,525Equity 14,371,923 14,504,818 3,384,467 3,110,554Total liabilities 49,115,851 42,211,135 4,085,487 3,789,861

Equity attributable to :Owners of the Company 10,089,170 10,182,463 2,296,832 1,996,976Non-controlling interests 4,282,753 4,322,355 1,087,635 1,113,578 14,371,923 14,504,818 3,384,467 3,789,861



For the year ended 31st March Cargills C T Land Ceylon) PLC Development PLCIn thousands of rupees 2017 2016 2017 2016

Revenue (Including other income) 86,038,249 73,184,563 832,009 763,745Expenses (83,754,053) (71,493,982) (329,192) (385,767)Profit for the year 2,284,196 1,690,581 492,251 377,978Other comprehensive income (39,554) 876,706 18,098 (8,544)Total comprehensive income 2,244,642 2,567,287 510,349 369,434

Profit for the year attributable to:Owners of the Company 1,603,518 1,186,797 334,061 242,662Non-controlling interests 680,678 503,784 158,190 135,316Profit for the year 2,284,196 1,690,581 492,251 377,978

Other comprehensive income attributable to :Owners of the Company (27,767) 615,452 12,282 (5,485)Non-controlling interests (11,787) 261,254 5,816 (3,059)Other comprehensive income (39,554) 876,706 18,098 (8,544)

Total comprehensive income attributable to:Owners of the Company 1,575,751 1,802,250 346,343 237,177Non-controlling interests 668,891 765,037 164,006 132,257Total comprehensive income for the year 2,244,642 2,567,287 510,349 369,434

Dividends paid to non-controlling interests 2,004,648 715,247 78,927 51,482

Details of net cash inflows / (outflows)Net cash inflow from operating activities 3,753,916 5,334,187 226,657 223,405Net cash inflow / (outflow) from investing activities (6,775,767) (3,418,140) (13,081) (85,364)Net cash inflow / (outflow) from financing activities 2,479,307 (694,501) (234,134) (141,497)Net cash inflow / (outflow) (542,544) 1,221,546 (20,558) (3,456)

Proportion of ownership interest and voting power held by non-controlling-interest 29.80% 29.80% 32.14% 35.80%


17.3.2 Acquisition of non-controlling interests

Investee Investor Increase inholding (%)

In thousands of rupeesInvestment Number of shares

acquiredC T Land Development PLC C T Holdings PLC 3.66 104,116 1,785,250

The effect of changes in the Company’s ownership interest in the investee is as follows:

Company’s ownership interest at 1st April 2016 1,996,976Effect of increase in Company’s ownership interest 116,200Share of comprehensive income 346,343 Other adjustments (5,176)Dividends issued (157,510)Company’s ownership interest at 31st March 2017 2,296,832

17.3.3 Purchase of shares by Cargills (Ceylon) PLC in Kotmale Holdings PLCIn the previous year, subsequent to a voluntary offer (made on 14th January 2015), the subsidiary Cargills (Ceylon) PLC (CCP) made an announcement to exercise its option in terms of Sec 246 of Companies Act No.7 of 2007 to compulsorily acquire all the shares in the subsidiary Kotmale Holdings PLC (KHP) not already owned by CCP and its subsidiaries Cargills Quality Food Ltd (CQF) and Cargills Quality Dairies (Pvt) Ltd (CQD) at that time. Consequent to this offer, the remaining shares of KHP amounting to 852,712 shares were acquired at a total cost of Rs. 54.14 Mn (at Rs 62.50 per share) by CCP in terms of the said sec. 246 of the Companies Act.

This action was based on legal advice received that the aforesaid section could be read on a standalone basis. The Securities and Exchange Commission of Sri Lanka (SEC) subsequently informed the Company that the said Section 246 cannot be read on a standalone basis and should be read as a part of Part VIII of the Companies Act which deals with ‘Amalgamations’. Accordingly, the SEC directed that the CCP and KHP give the former minority shareholders of KHP the opportunity to continue as shareholders of KHP if they so desire. Accordingly on 18 July 2016 CCP (jointly with KHP) wrote to the shareholders as directed by the SEC. Applications were received from shareholders holding 18,512 shares requesting to continue as shareholders of KHP, while holders of 297 shares requested for fresh cheques to complete the disposal of their shares. Additionally the shareholders who did not encash their previous pay orders also continue to remain as shareholders of KHP.

In a separate transaction, on 3 March 2017, CCP and CQF transferred 1,459,864 shares and 29,539,097 shares respectively held in KHP to CQD. Accordingly, as at 31 March 2017, the Company directly and through subsidiaries holds 31,246,778 shares representing 99.51% of the issued share capital of KHP.



17.3.4 Issue of shares by subsidiaries - C T Properties Ltd

Investee Investor Change in effective holding (%)

In thousands of rupeesInvestment Number of shares

acquiredC T Properties Ltd C T Holdings PLC (2.40) 784,000 78,400

Cargills (Ceylon) PLC 4.31 326,000 32,600C T Land Development PLC (2.23) - -

(0.32) 1,110,000 111,000

17.3.5 Issue of shares by subsidiaries - OthersIn March 2017 the following group companies issued shares to the subsidiary Cargills (Ceylon) PLC for the following values – a. Dawson Office Complex (Private) Limited, issued 23,500,000 shares for a cash consideration of Rs. 2,350 Mn.

b. The Empire Investments Company (Private) Limited issued 77,600,000 shares for a cash consideration of Rs. 776 Mn.

c. Frederick North Hotel Company Limited issued 31,100,000 shares for a cash consideration of Rs 311 Mn.

The financial statements of the said companies have been consolidated as 100% subsidiaries of Cargills (Ceylon) PLC

18. Investments in equity accounted investees

As at 31st March Ownership interest Total cost of investment and voting power (in thousands of rupees) 2017 2016 2017 2016

GroupC T CLSA Holdings Limited 25.81% 25.81% 117,797 110,036Cinema Entertainments (Private) Limited 30.65% 30.65% 6,022 6,159Cargills Bank Limited 53.17% 31.01% 6,169,892 4,079,041 6,293,711 4,195,236

CompanyC T CLSA Holdings Limited 25.81% 25.81% 33,342 33,342Cinema Entertainment (Private) Limited 16.67% 16.67% 1,375 1,375Cargills Bank Limited 25.29% 18.22% 2,871,452 2,184,936 2,906,169 2,219,653


18.1 Summarised financial information as included in their own financial statements of equity accounted investees.

As at / for the year ended 31st March C T CLSA Holdings Cargills Bank Limited Other Investees Total LimitedIn thousands of rupees 2017 2016 2017 2016 2017 2016 2017 2016

Profit / (loss) and other comprehensive incomeRevenue 301,895 348,340 1,128,842 451,228 - 18,039 1,430,737 817,607 Other income 45,659 34,737 65,839 34,191 - 839 111,498 69,877 Total Expenses (290,891) (312,407) (1,168,667) (801,244) - (18,197) (1,459,558) (1,358,248)Profit / (loss) for the year 56,663 70,670 26,014 (315,825) - 681 82,677 (470,764)Other comprehensive income for the year (1,869) 494 (3,715) (11,813) - - (5,584) (11,319)Total comprehensive income for the year 54,794 71,164 22,299 (327,638) - 681 77,093 (482,083)

Transactions with ownersDividend paid 24,728 21,978 - - 449 412 25,177 22,390Dividends received during the year 6,382 5,673 - - 138 126 6,520 5,799Movement due to change in shareholding - - (9,609) - - - (9,609) -Expense on right issue - - (798) - - - (798) -

Total assets 1,098,331 1,068,261 21,416,906 14,253,284 70,583 71,029 22,585,820 15,392,574 Total liabilities (641,929) (641,929) (10,763,427) (9,413,768) (50,936) (50,936) (11,456,292) (10,106,633)Net assets 456,402 426,332 10,653,479 4,839,516 19,647 20,093 11,129,528 5,285,941

Percentage of ownership interest as at 31st March 25.81% 25.81% 53.17% 31.01% 30.65% 30.65%

Reconciliation of carrying amount of interests in associatesGroup’s of share of net assets of associates 117,797 110,036 5,664,094 1,500,717 6,022 6,159 5,794,431 1,616,912 Goodwill - - 505,798 26,324 - - 505,798 26,324 Application for the rights issue of shares - - - 2,552,000 - - - 2,552,000 Carrying amount of interest in associates 117,797 110,036 6,169,892 4,079,041 6,022 6,159 6,300,229 4,195,236

Share of:- Profit / (loss) 14,625 18,240 8,299 (97,935) - 336 22,924 (79,359)- Other comprehensive income (482) 128 (1,976) (3,663) - (2,458) (3,536) 14,143 18,368 6,323 (101,598) - 336 20,466 (82,895)



18.2 The summarised financial information presented above represents amounts shown in the associate’s financial statements prepared in accordance with Sri Lanka Financial Reporting Standards (SLFRS). All of the above associates are accounted for using the equity method in these consolidated financial statements.

18.3 None of the Group equity accounted investees are publicly listed entities and consequentially do not have published price quotations.

18.4 The financial year end date of Cargills Bank Limited is 31 December due to the industry requirement and financial statements for the year ended 31 December 2016 have been used for the purposes of applying the equity method. Further, there are no significant transactions between the dates of the financial statements of the said companies and 31 March 2017 which require any adjustments.

18.5 Change in the Group’s ownership interest in an associateCargills Bank Limited

During the year Cargills Bank Ltd issued 222,042,858 ordinary shares to the Company and to the subsidiary Cargills (Ceylon) PLC. Consequent to the subscription to the new shares, the effective shareholding of the Group increased from 31.01% to 53.17% at the reporting date.

The Group’s voting rights in Cargills Bank Ltd is below 50% as per the investment conditions imposed by the regulator. As such the Group does not have controlling power over the investee and accordingly the investment in Cargills Bank Limited is equity accounted.


19. Other investments Group Company

As at 31st March Shares / Units Carrying Value Shares / Units Carrying Value (Numbers) (In thousands of Rs.) (Numbers) (In thousands of Rs.) 2017 2016 2017 2016 2017 2016 2017 2016

19.1 Other non-current investmentsInvestments in quoted companiesCeylon Printers PLC 118,830 118,830 6,417 18,882 118,830 118,830 6,417 18,882Office Equipment PLC 163,700 163,700 9,298 18,171 163,700 163,700 9,298 18,171Paragon (Ceylon) PLC 213,060 213,060 14,488 12,336 213,060 213,060 14,488 12,336Overseas Realty (Ceylon) PLC 4,500 4,500 91 105 4,500 4,500 91 105Lanka IOC PLC 525,000 525,000 15,925 70,619 325,000 325,000 9,425 10,563Hotel Developers (Lanka) PLC 27,700 27,700 - - 27,700 27,700 - -The Housing & Development Finance Corporation Bank of Sri Lanka 70,000 70,000 2,513 3,465 70,000 70,000 2,513 3,465Lanka Walltiles PLC 1,499,628 1,499,628 139,465 148,163 1,499,628 1,499,628 139,465 148,163Hemas Holdings PLC - 220,000 - 17,732 - 220,000 - 17,732 188,197 289,473 181,697 229,417

Investments in un-quoted companiesLanka Film Distributors Company (Private) Limited 100 100 100 100 100 100 100 100

Other investmentsComtrust Gilt Edged Fund (Unit trust) 24,886,713 106,364,707 261,847 1,073,843 10,843,303 94,936,747 109,965 948,931 261,847 1,073,843 109,965 948,931 450,144 1,363,416 291,762 1,178,448

19.2 Other current investments

Group Company

As at 31st March Shares / Units Carrying Value Shares / Units Carrying Value (Numbers) (In thousands of Rs.) (Numbers) (In thousands of Rs.) 2017 2016 2017 2016 2017 2016 2017 2016

Sierra Cables PLC 49,500 49,500 147 144 - - - -Aitken Spence PLC 267,500 267,500 14,334 19,661 - - - -Capital Alliance Finance PLC - - - 31,171 - - - - 14,481 50,976 - -

19.3 The Group’s shareholdings in the ordinary share capital of Office Equipment PLC, Ceylon Printers PLC and Paragon (Ceylon) PLC range between 19.64% to 21.30%. However, these companies have not been treated as equity accounted investees since the Group exercises no significant influence in the operations of the companies concerned.



20. InventoriesAs at 31st March Group Company


Raw material and consumables 1,089,397 886,258 - -Work-in-progress 62,798 57,362 - -Finished goods 7,018,899 6,056,614 - -Goods in transit 162,631 209,400 - -Food and beverages - restaurant operations 64,777 63,611 - - 8,398,502 7,273,245 - -Less - provision for obsolete and slow moving items (58,374) (75,123) - - 8,340,128 7,198,122 - -

21. Trade and other receivablesAs at 31st March Group Company


Trade receivables (other than from related parties) 2,281,576 1,945,848 285 228Dues from related parties (Refer note 30.3) 16,048 22,406 13,128 806,016Current tax asset 675,907 276,844 - -Advances and other receivables 497,515 496,203 163 33Loans given to employees (Refer note 21.1) 26,860 19,694 - -Prepayments and accrued income 1,361,700 1,161,969 571 - 4,859,606 3,922,964 14,147 806,277Less : provision for impaired / doubtful debts (Refer note 21.3) (185,648) (154,644) - - 4,673,958 3,768,320 14,147 806,277

21.1 Loans given to employees



As at 1st April 19,694 16,941 - -Loans granted during the year 40,543 34,124 - -Less: recoveries (33,377) (31,371) - -As at 31st March 26,860 19,694 - -

21.2 Credit and market risks, and impairment lossesInformation about the Group’s exposure to credit and market risks, and impairment losses for trade and other receivables, excluding construction contracts in progress, is included in note 29.5.


21.3 Movement in the provision for impaired / doubtful debts



As at 1st April 154,644 119,412 - -Impairment losses recognised 29,652 35,232 - -On acquisition of subsidiaries 1,352 - - -As at 31st March 185,648 154,644 - -

22. Cash and cash equivalents



Cash and bank balances 1,645,781 1,694,751 4,469 3,224Short term deposits with banks (Refer note 22.1) 855,049 1,706,538 266,241 234,281Cash and cash equivalents in the statement of financial position 2,500,830 3,401,289 270,710 237,505Bank overdrafts (3,235,149) (3,262,281) - -Cash and cash equivalents in the statement of cash flows (734,319) 139,008 270,710 237,505

22.1 Short term deposits with bank



Re-purchase agreements 127,318 130,172 - -Fixed & other deposits 727,731 1,576,366 266,241 234,281 855,049 1,706,538 266,241 234,281

23. Stated capital - ordinary sharesAs at 31st March Group Company


Issued and fully paid sharesAs at 31st March 3,194,008 3,194,008 3,194,008 3,194,008

No. of shares in issueFully paid ordinary shares carry one vote per share and carry a right to dividends. 183,097 183,097 183,097 183,097



24. Reserves



Revaluation reserve (Refer note 24.1) 4,127,957 4,127,957 74,999 74,999Available for sale reserve (Refer note 24.2) 87,996 123,083 110,977 140,270General reserve (Refer note 24.3) 367,220 367,220 213,538 213,538 4,583,173 4,618,260 399,514 428,807

24.1 Revaluation reserveThe revaluation reserve arises on the revaluation of land as described in note 13.2. Distributions from the properties revaluation reserve can be made where they are in accordance with the requirements of the Company’s articles and any other statues. The Directors do not currently intend to make any distribution from the properties revaluation reserve.

24.2 Available for sale reserveThe Available for sale reserve represents the cumulative gains and losses arising on the revaluation of available-for-sale financial assets that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

24.3 General reserveGeneral reserve represents the amounts set aside by the Directors for general application.


25. BorrowingsAs at 31st March Group

Unsecured – measured Secured – measured Total at amortised cost at amortised cost In thousands of rupees 2017 2016 2017 2016 2017 2016

Non-current liabilitiesLoans from banks - - - 198,300 - 198,300Finance lease liabilities - - 2,569 - 2,569 - - - 2,569 198,300 2,569 198,300

Current liabilitiesCurrent portion of secured bank loans - - 198,300 537,529 198,300 537,529Current portion of finance lease liabilities - - 921 - 921 -Other short term loans from banks 10,981,009 6,002,443 1,400,000 1,508,000 12,381,009 7,510,443Bank overdrafts 3,180,953 2,897,870 54,196 364,411 3,235,149 3,262,281 14,161,962 8,900,313 1,653,417 2,409,940 15,815,379 11,310,253

Total liabilitiesSecured bank loans (Refer note 25.1) - - 198,300 735,829 198,300 735,829Finance lease liabilities (Refer note 25.2) - - 3,490 - 3,490 -Other short term bank loans (Refer note 25.4-b) 10,981,009 6,002,443 1,400,000 1,508,000 12,381,009 7,510,443Bank overdrafts (Refer note 25.4-c) 3,180,953 2,897,870 54,196 364,411 3,235,149 3,262,281 14,161,962 8,900,313 1,655,986 2,608,240 15,817,948 11,508,553

25.1 Secured bank loans

For the year ended 31st March Group

In thousands of rupees 2017 2016

As at 1st April 735,829 1,289,318Repayments during the year (537,529) (553,489)As at 31st March 198,300 735,829

Non-current portion of secured bank loans - 198,300Current portion of secured bank loans 198,300 537,529 198,300 735,829



25.2 Finance lease liabilities

For the year ended 31st March Group

In thousands of rupees 2017 2016

As at 1st April - 1,377De-recognition of subsidiaries - (50)On acquisition of subsidiaries 6,404 (1,327)Repayments during the year (2,246) -As at 31st March 4,158 -Less: Finance charges allocated to future periods (668) -Net liability 3,490 -

Non-current portion of secured bank loans 2,569 -Current portion of secured bank loans 921 - 3,490 -

25.3 Information about the Group’s exposure to risks is covered in Note 29.4.

25.4 Terms and repayment scheduleTerms and conditions of outstanding loans are as follows:

25.4 (a) Loans from banksFinancial Institution

Security Repayment Terms and Maturity

Nominal Interest Rate

Currency In thousand of rupeesPrincipal

ValueAmount

outstanding 2017

Amount outstanding

2016Cargills Foods Company (Private) LimitedCommercial Bank PLC

Deed of Assignment No. 496 dated 30.09.2014 Additional Mortgage Bond No. 497 dated 30.09.2014 for Rs. 1,502,300,000/- over credit and debit card receivables and ESCROW Account.

48 equal monthly installments after a grace period of 12 months.

AWPLR Plus 0.8% p.a.

LKR 589,000 94,700 336,500

Habib Bank Limited AWPLR Plus 0.8% p.a.

LKR 306,200 51,800 181,600

State Bank of India AWPLR Plus 0.8% p.a.

LKR 306,200 51,800 181,600

Company total - Cargills Foods Company (Private) Limited - 198,300 699,700Cargills Quality Confectioneries (Private) Limited


Financial Institution




ValueAmount

outstanding 2017

Amount outstanding

2016Bank of Ceylon Corporate guarantee

from Cargills (Ceylon) PLC for Rs. 11.12 Mn. Mortgage over leasehold right of the land, buildings and plant and machinery fixed in the premises.

54 equal monthly installments of Rs. 205,835 commencing from July 2011 (after a grace period of 6 months).

6.00% LKR 11,115 - 1,039

Bank of Ceylon Corporate guarantee from Cargills (Ceylon) PLC for Rs. 282.56 Mn.

64 equal monthly installments of Rs. 4,415,000 commencing from July 2011 (after a grace period of 6 months).

7.67% LKR 282,560 - 35,090

Company total - Cargills Quality Confectioneries (Private) Limited - 36,129Total - Loans from banks 198,300 735,829

25.4 (b) Other short term loans from banksFinancial Institution




ValueAmount

outstanding 2017

Amount outstanding

2016Cargills (Ceylon) PLC“Commercial Bank of Ceylon PLC”

“Corporate guarantee for Rs.50 Mn. dated 05/05/1998 executed by C T Holdings PLC Holdings PLC”

1 month, commencing from 16.03.15 to 16.04.15 (maximum 12 months).

Based on the prevailing market rates

LKR 830,000 900,000 830,000

“Hongkong and Shanghai Banking Corporation”

No security provided Overnight, commencing from 31.03.16 to 01.04.16 (maximum 06 months)

Overnight Cost of Funds+1.0% p.a.

LKR 300,000 - 300,000

Sampath Bank PLC No security provided “4 months, commencing from 18.12.15 to 18.04.16 (maximum 06 months)

Based on the prevailing money market rates

LKR 1,800,000 - 300,000







ValueAmount

outstanding 2017

Amount outstanding

2016Nations Trust Bank PLC

No security provided 1 month, commencing from 08.03.16 to 08.04.16 (maximum 03 months)

negotiated at the time of granting each loan

LKR 100,000 - 100,000

Nations Trust Bank PLC

No security provided 1 month, commencing from 31.03.16to 30.04.16 (maximum 03months)

negotiated at the time of granting each loan

LKR 75,000 - 75,000

Bank of Ceylon No security provided 2 weeks, commencingfrom 29.03.2017 to 12.04.2017(maximum 12months)

“On case by case basisdecided by Treasury department

LKR 1,500,000 1,500,000 1,035,700

Hatton National Bank PLC

No security provided 1 week commencing from 27.03.2017 to 03.04.2017 (maximum period 120 days)

AWPLR+0.75%/ LKR 1,154,000 1,154,000 -



AWPLR+0.75% LKR 521,000 521,000 -



AWPLR+0.75% LKR 220,000 220,000 -

Sampath Bank PLC

No security provided 1 month, commencing from 16.03.2017 to 16.04.2017 (maximum period 06 months)


LKR 403,200 403,200 -






ValueAmount

outstanding 2017

Amount outstanding

2016Sampath Bank PLC



LKR 1,396,800 925,000 -




LKR 2,800,000 875,000 -

Company total - Cargills (Ceylon) PLC 6,498,200 2,640,700Cargills Foods Company (Private) LimitedStandard Chartered Bank

No security provided 1 month, commencing from02.03.2017 to 02.04.2017(maximum 02 months)


LKR 117,583 117,583 572,008

Standard Chartered Bank

No security provided 1 month, commencing from10.03.2017 to 11.04.2017(maximum 02 months)


LKR 228,544 228,544 207,735




LKR 153,613 153,613 -




LKR 500,000 500,000 -







ValueAmount

outstanding 2017

Amount outstanding

2016Bank of Ceylon No security provided 1 month,

commencing from29.03.2017 to 12.04.2017(maximum 12 months)

Quoted by TreasuryDepartment on case bycase basis

LKR 185,000 185,000 350,000

Bank of Ceylon No security provided 1 month, commencing from 30.03.2017 to 13.04.2017 (maximum 12 months)

Quoted by Treasury Department on case by case basis

LKR 145,000 145,000 150,000

ICICI Bank Limited No security provided 1 week commencing from 29.03.2017 to 05.04.2017 (maximum 03 months)

SLIBOR+0.95%, 250,000 250,000 -

ICICI Bank Limited No security provided 1 week commencing from 30.03.2017 to 06.04.2017 (maximum 03 months)

SLIBOR+0.95%, 350,000 350,000 -

Company total - Cargills Foods Company (Private) Limited 1,929,740 1,279,743 Cargills Quality Foods LimitedStandard Chartered Bank

No security provided Payable on demand AWPLR LKR 600,000 400,000 400,000


No security provided Payable on demand AWPLR +0.5% LKR 750,000 348,000 1,937,000

Commercial Bank of Ceylon PLC

No security provided Payable on demand AWPLR LKR 575,000 - 575,000

Company total - Cargills Quality Foods Limited 748,000 2,912,000Cargills Quality Confectioneries (Private) LimitedHatton National Bank PLC

Corporate guarantee from Cargills (Ceylon) PLC for Rs. 200 Mn

Payable on demand AWPLR +.75% LKR 200,000 133,000 115,000

Company total - Cargills Quality Confectioneries (Private) Limited 133,000 115,000






ValueAmount

outstanding 2017

Amount outstanding

2016Millers LimitedStandard Chartered Bank


Payable on demand AWPLR LKR 250,000 100,000 100,000

Commercial Bank of Ceylon PLC


Payable on demand AWPLR LKR 165,000 - 100,000


Corporate Guarantee from Cargills (Ceylon) PLC for Rs 335 Mn

Payable on demand AWPLR +.75% LKR 175,000 - 363,000

Company total - Millers Limited 100,000 563,000Cargills Agrifoods LimitedHatton National Bank PLC

No security provided Payable on demand AWPLR+1% LKR 100,000 100,000 -

Company total - Cargills Agrifoods Limited 100,000 -Cargills Food Services (Private) LimitedCommercial Bank PLC

No security provided Payable on demand Market rate LKR 150,000 73,000 -

Company total - Cargills Food Services (Private) Limited 150000 73,000 - Ceylon Agro Development Company (Private) LimitedHatton National Bank PLC

No security provided Payable on demand AWPLR +.75% LKR 29,249 29,249 -

Company total - Ceylon Agro Development Company (Private) Limited 29,249 - Cargills Quality Dairies (Private) LimitedStandard Chartered Bank

No security provided Payable on demand AWPLR LKR 1,200,000 750,000 -


No security provided Payable on demand AWPLR +.75% LKR 750,000 1,752,820 -

Company total - Cargills Quality Dairies (Private) Limited 2,502,820 - Dawson Office Complex (Private) LimitedHatton National Bank PLC

Corporate Guarantee of Cargills (Ceylon) PLC for Rs. 400.0 Mn

1 week commencing from 27.03.2017 to 03.04.2017 (Maimum period 120 days)

AWPLR+0.75% LKR 400,000 267,000 -

Company total - Dawson Office Complex (Private) Limited 267,000 - Total - Other short term bank loans 12,381,009 7,510,443



25.4 (c) Bank overdraftsFinancial Institution




ValueAmount

outstanding 2017

Amount outstanding

2016Cargills Ceylon PLCCommercial Bank PLC

Corporate guarantee for Rs.50 Mn. dated 05/05/1998 executed by C T Holdings PLC

Payable on demand AWPLR+0.5% LKR 370,000 49,365 363,385


No security provided Payable on demand AWPLR LKR 575,000 18,758 572,233

Deutsche Bank No security provided Payable on demand Market rate LKR 45,000 37,454 7,767Muslim Commercial Bank Limited

No security provided Payable on demand Market rate LKR 675,000 652,554 673,335

Sampath Bank PLC No security provided Payable on demand AWPLR+0.5% LKR 100,000 23,995 86,603Cargills Bank Limited

No security provided* Payable on demand Market rate LKR - 26,498 -

Company total - Cargills Ceylon PLC 808,624 1,703,323Cargills Agrifoods LimitedCommercial Bank PLC

No security provided Payable on demand AWPLR+1% LKR 100,000 78,583 417

Cargills Bank Limited

No security provided* Payable on demand Market rate LKR - 42,372 23,451

Company total - Cargills Agrifoods Limited 120,955 23,868Cargills Food Processors (Private) LimitedCargills Bank Limited


Deutsche Bank No security provided Payable on demand Market rate LKR 100,000 63,263 87,678Commercial Bank PLC

No security provided Payable on demand AWPLR +1% LKR 100,000 63,860 26,558

Company total - Cargills Food Processors (Private) Limited 207,396 165,226Cargills Food Services (Private) LimitedCargills Bank Limited


Commercial Bank PLC

No security provided Payable on demand Market rate LKR - 1,603 714

Commercial Bank PLC

No security provided Payable on demand Market rate LKR 175,000 - 110,000

Deutsche Bank No security provided Payable on demand Market rate LKR 5,000 4,379 -Company total - Cargills Food Services (Private) Limited 10,709 120,565






ValueAmount

outstanding 2017

Amount outstanding

2016Cargills Foods Company (Private) LimitedCargills Bank Limited


Deutsche Bank No security provided Payable on demand Market rate LKR 550,000 530,814 452,323Commercial Bank PLC

No security provided Payable on demand Market rate LKR - 64,578 5,699

Bank of Ceylon No security provided Payable on demand AWPLR+0.5% p.a.

LKR 115,000 913 -

Company total - Cargills Foods Company (Private) Limited 1,163,893 675,157C PC (Lanka) LimitedCargills Bank Limited


Company total - C PC (Lanka) Limited - 11,260 11,743Cargills Quality Confectioneries (Private) LimitedBank of Ceylon No security provided Payable on demand Market rate LKR 176,450 - -Bank of Ceylon No security provided Payable on demand Market rate LKR 47,540 - -Cargills Bank Limited


Commercial Bank PLC

No security provided Payable on demand Market rate LKR 25,000 562 13,347

Company total - Cargills Quality Confectioneries (Private) Limited 57,284 48,043Cargills Quality Dairies (Private) LimitedCommercial Bank PLC

No security provided Payable on demand Market rate LKR 50,000 31,071 -

Seylan Bank PLC No security provided Payable on demand Market rate LKR 200,000 - -Cargills Bank Limited


Deutsche Bank No security provided Payable on demand Market rate LKR 100,000 91,537 696Company total - Cargills Quality Dairies (Private) Limited 227,893 58,311Cargills Quality Foods LimitedCommercial Bank PLC

No security provided Payable on demand Market rate LKR 75,000 - 76,819

Cargills Bank Limited


Deutsche Bank No security provided Payable on demand Market rate LKR 350,000 347,418 97,951Company total - Cargills Quality Foods Limited 397,754 213,448Kotmale Dairy Products (Private) LimitedBank of Ceylon No security provided Payable on demand Market rate LKR 10,000 893 51 Company total - Kotmale Dairy Products (Private) Limited 893 51







ValueAmount

outstanding 2017

Amount outstanding

2016Millers LimitedCargills Bank Limited


Deutsche Bank No security provided Payable on demand Market rate LKR 200,000 190,961 95,163Commercial Bank of Ceylon PLC


Payable on demand Market rate LKR - - 44,103



Company total - Millers Limited 223,653 241,520C T Land Development PLCCommercial Bank of Ceylon PLC

Negative Pledge to be executed over the “Majestic city” property at No 10 Station Road Colombo 04.

Payable on demand Market rate LKR 100,000 4,831 1,026

Company total - C T Land Development PLC 4,831 1,026 Ceylon Agro Development Company (Private) LimitedSeylan Bank PLC No security provided Payable on demand Market rate LKR - 4 -Company total - Ceylon Agro Development Company (Private) Limited 4 - Total - Other short term bank loans 3,235,149 3,262,281

25.4 (d) Finance lease liabilitiesFinancial Institution




ValueAmount

outstanding 2017

Amount outstanding

2016Ceylon Agro Development Company (Private) LimitedSeylan Bank PLC No security provided Payable on demand Market rate LKR 3,490 - Company total - Ceylon Agro Development Company (Private) Limited 3,490 - Total - Finance lease liabilities 3,490 -

* These overdrawn balances represent unrepresented cheques. Bank balance is in credit.** SLIBOR 12 months as at 31st March 2017 was 12.35%*** AWPLR weekly as at 31st March 2017 was 11.79%


26. Employee benefits26.1 Movement in defined benefit liability



As at 1st April 694,345 554,219 14,410 7,874Amounts recognised in profit or lossCurrent service cost 80,042 96,760 759 741Interest cost 72,625 28,010 1,441 788 152,667 124,770 2,200 1,529

Amounts recognised in other comprehensive incomeActuarial (gain)/loss 34,191 39,642 (1,106) 5,007 34,191 39,642 (1,106) 5,007

OtherBenefit paid (56,117) (24,286) - -On acquisition of subsidiary 3,910 - - - (52,207) (24,286) - -As at 31st March 828,996 694,345 15,504 14,410

26.2 ActuariesThe Group engaged the actuaries, Messrs. Actuarial and Management Consultants (Private) Limited to carry out the actuarial valuation of different companies within the Group.

26.3 Actuarial assumptions(a) The following were the principal actuarial assumptions at the reporting date


2017 2016 2017 2016

Discount rate 10.5% - 12% 10% - 10.50% 10.00% 10.00%Future salary increase 7.50% - 10% 7.50% - 15% 7.5% 7.5%

In addition to the above, demographic assumptions such as mortality, withdrawal and disability, and retirement age were considered for the actuarial valuation. “A 67/07 mortality table” issued by the Institute of Actuaries, London was used to estimate the gratuity liability of all Group companies.



(b) Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.



IncreaseDiscount rate (1% movement) (38,835) (33,399) (70) (796)Future salary growth (1% movement) 47,385 38,015 82 856

DecreaseDiscount rate (1% movement) 43,359 34,801 81 868Future salary growth (1% movement) (43,187) (31,055) (72) (821)

27. Deferred income27.1 Movement In deferred income

Group

For the year ended 31st March Grants Deferred rent In thousands of rupees received expense Total

GrossAs at 1st April 2015 116,907 55,727 172,634Received during the year - - -As at 31st March 2016 116,907 55,727 172,634As at 1st April 2016 116,907 55,727 172,634Received during the year - - -As at 31st March 2017 116,907 55,727 172,634Accumulated AmortisationAs at 1st April 2016 20,563 - 20,563Amortised during the year 11,481 18,432 29,913As at 31st March 2016 32,044 18,432 50,476As at 1st April 2016 32,044 18,432 50,476Amortised during the year 11,481 7,070 18,551As at 31st March 2017 43,525 25,502 69,027Net carrying valueAs at 1st April 2016 84,863 37,295 122,158As at 31st March 2017 73,382 30,225 103,607


27.2 Grants receivedGranted By Purpose of the

grantBasis of amortisation In thousands of rupees

Amount received

Balance as at 1-Apr-16

Amortised during the

year

Balance as at 31-Mar-17

United States Agency for International Development (USAID) and Connecting Regional Economies (USAID / CORE)

Kilinochchi project

Based on the corresponding expenditure being incurred

23,612 18,457 (2,407) 19,050

Dehiattakandiya project

Based on depreciation applicable corresponding to the plant & machinery acquired from the grant.

86,664 66,406 (9,074) 57,332

116,907 84,863 (11,481) 73,382

28. Trade and other payablesAs at 31st March Group Company


CurrentTrade creditors (other than from related parties) 8,228,170 7,705,006 103 500Dues to related parties [Refer note 30.3(b)] 1,264 1,639 - 556Accruals, other accounts payable & provisions 4,058,950 3,466,580 9,720 11,314 12,288,384 11,173,225 9,823 12,370

Non currentSecurity deposits (Refer note 28.1) 179,621 170,258 - -Put options written on non-controlling interest (Refer note 28.2) 2,761,159 2,251,743 - - 2,940,780 2,422,001 - - 15,229,164 13,595,226 9,823 12,370

28.1 Security depositsThis represents deposits which are repayable at the termination of tenancy agreements.



28.2 Put options written on non-controlling interestThe put option over non-controlling interest relates to the Put Option agreement entered into between Cargills Foods Company (Private) Limited (CFC), International Finance Corporation (IFC), and Cargills Ceylon PLC (CCP).

IFC has subscribed for 4,130,424 shares of CFC (representing 8% shares of the Company) for an aggregate subscription price of Rs. 2,550 Mn on 25th February 2015. Therefore IFC is considered the investor of CFC and non-controlling interest to the Group and CCP acts as the grantor / sponsor to the contract.

CCP has granted IFC an option (The Put Option) to sell their shares to CCP during the put period on up to three occasions at the Put Price.As per the Put Option agreement the Put price means in relation to any given exercise of the Put Option, the price (calculated as of the date of settlement of purchase of the relevant Put shares by the granter) that provides IFC an IRR of 9% in local currency terms; provided that the Put price, shall be suitably adjusted to account for any dividends received by IFC on the Put shares and there shall not be any discount for liquidity or minority stake.

The assumptions on which the above present value of the exercise price has been determined are as follows:- Conditions of the Shareholder Agreement will not be breached by either party until the Put period arrives.- In the event of non-listing of the Company by CCP, IFC will wait until the end of the Put period to exercise the Put Option.- Weighted average cost of capital of CCP is 11.9%.- Pricing date as 31st March 2017.- A year is assumed to have 365 days.

According to the terms of the agreement, the aforesaid put option written over non-controlling interest will have no effect of transferring ownership risks and rewards of the shares to the parent. Therefore the total value of non-controlling-interest of Rs. 2.550 Bn will continue to be recognised as non-controlling-interest and will be allocated its share of profit and losses without any change. The future dividend payable also will continue to be deducted from the non-controlling-interest. The financial liability is recognised at the present value of the redemption amount. The present value of the exercise price has been derived based on an exercise price of Rs. 4,263,498,814/- which has been computed after adjusting for an IRR of 9% and a put period from 25th February 2015 (which is the share certificate date) to 10th February 2021 (which is assumed as the exercise date).


29. Financial instruments – Fair values and risk management29.1 Accounting classifications and fair valuesThe following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Group Company


Financial assetsLoans and receivables - Trade receivables 21 2,297,624 1,968,254 13,413 806,244 - Other receivables 21 524,375 515,897 163 33 - Cash and cash equivalents 22 2,500,830 3,401,289 270,710 237,505Total loans and receivables 5,322,829 5,885,440 284,286 1,043,782

Available-for-sale financial assets - Other investments 19 464,625 1,414,392 291,762 1,178,448Total available-for-sale financial assets 464,625 1,414,392 291,762 1,178,448Total financial assets 5,787,454 7,299,832 576,048 2,222,230

Financial liabilitiesFinancial liabilities measured at amortised cost - Borrowings 25 15,817,948 11,508,553 - - - Security deposits 28 179,621 170,258 - - - Trade creditors 28 8,229,434 7,706,645 103 1,056Total financial liabilities 24,227,003 19,385,456 103 1,056

29.2 Fair Value HierarchyWhen measuring the fair value of an asset or a liability, the group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

(for example, as prices) or indirectly (for example, derived from prices); and• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Available-for-sale financial assets (Other Investments) are classified as Level 1 and there have been no transfers between level 1 and 2 during the current or prior year.



29.3 Capital managementThe Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2016.

The capital structure of the Group consists of below;



Debt (long and short term borrowings, excluding derivatives)Borrowings 15,817,948 11,508,553 - -Non-current trade creditors 2,761,159 2,251,743 - -Net debt 18,579,107 13,760,296 - -

Equity (all capital and reserves of the Group that are managed as capital)Stated capital 3,194,008 3,194,008 3,194,008 3,194,008Reserves 4,583,173 4,618,260 399,514 428,807Retained earnings 11,016,858 11,047,414 3,986,678 4,151,826Non-controlling interest 3,405,406 4,662,872 - -Total equity 22,199,445 23,522,554 7,580,200 7,774,641Total debt and equity 40,778,552 37,282,850 7,580,200 7,774,641

Gearing ratioNet debt to equity ratio 83.69% 58.50%

The Group is not subject to any externally imposed capital requirements.

29.4 Financial risk managementThe Group has exposure to the following risks arising from financial instruments:• credit risk• liquidity risk and• market risk

Risk management frameworkThe Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Group’s risk management processes are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Audit Committees oversee how management monitors compliance with the Group’s risk management processes/ guidelines and procedures and reviews the adequacy of the risk management framework in relation to the risks. The Audit Committees are assisted in its oversight role by Risk Management team and Internal Audit, who undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.


29.5 Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investments in debt securities.

The carrying amount of financial assets represents the maximum credit exposure.



Trade receivables 2,297,624 1,968,254 13,413 806,244Other receivables 524,375 515,897 163 33Cash and cash equivalents 2,500,830 3,401,289 270,710 237,505Other investments 464,625 1,414,392 291,762 1,178,448 5,787,454 7,299,832 576,048 2,222,230

29.5.1 Trade receivablesTrade receivables before provisions for impairments were at the ageing set out below.



Neither past due nor impaired 16,048 18,165 13,128 784,7281 - 30 days 1,675,252 1,383,444 284 49231 - 60 days 331,980 279,478 1 28161 - 90 days 91,592 97,100 - 22691 - 120 days 82,597 82,009 - 312More than 120 days 100,155 108,058 - 20,205 2,297,624 1,968,254 13,413 806,244

Based on historic payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings, if available, the management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full.

Impairment and risk exposureIndividual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The other receivables are assessed collectively to determine whether there is objective evidence that an impairment has been incurred but not yet been identified. For these receivables the estimated impairment losses are recognised in a separate provision for impairment.

The movement in the provision for impairment in respect of trade and other receivables during the year is given in note 21.3.

29.5.2 Cash and cash equivalentsThe Group held cash and cash equivalents of Rs.2.5 Bn at 31st March 2017 (2016: Rs. 3.401 Bn). The cash and cash equivalents are held with bank and financial institution counter-parties, with high credit ratings.



29.5.3 Corporate guaranteesThe Group’s policy is to provide financial guarantees only to subsidiaries. As at 31st March 2017, the Company had issued guarantees to certain banks in respect of credit facilities granted to subsidiaries (refer note 33)

29.6 Liquidity riskExposure to liquidity risk - Contractual maturities of financial liabilities at the reporting date.

Contractual cash flowsIn thousands of rupees Within Between Between Between More than Total 1 year 1-2 years 2-3 years 3-5 years 5 years

As at 31 March 2017Bank overdrafts 3,235,149 - - - - 3,235,149 Secured bank loans 198,300 - - - - 198,300 Other short term bank loans 12,381,009 - - - - 12,381,009 Trade and other payables 12,288,384 179,621 - - 2,761,159 15,229,164 28,102,842 179,621 - - 2,761,159 31,043,622

As at 31 March 2016Bank overdrafts 3,262,281 - - - - 3,262,281 Secured bank loans 537,529 198,300 - - - 735,829 Other short term bank loans 7,510,443 - - - - 7,510,443 Trade and other payables 11,173,225 170,258 - - 2,251,743 13,595,226 22,483,478 368,558 - - 2,251,743 25,103,779

30. Related parties30.1 Transactions with key management personnelAccording to the LKAS 24 - “Related Party Disclosures”, Key Management Personnel are those having authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly, the Board of Directors (including Executive & Non-Executive Directors) of the Company have been classified as Key Management Personnel of the entity.

(a) Mrs. R Page, wife of Mr. Ranjit Page , is a Director of the Double Yummm (Private) Limited with which Cargills Foods Company (Private) Limited had regular transactions in the ordinary course of business and the amount outstanding as at 31st March 2017 was Rs. 6.23 Mn (2016 - Rs. 4.89 Mn). Purchases for re-sale in the ordinary course of business for the year amounted to Rs. 68.95 Mn (2016 - Rs. 55.49 Mn) and rental income earned for the year amounted to Rs. 1.08 Mn (2016 - Rs. 1.08 Mn).

(b) Short term employment benefits paid to key management personnel have been disclosed in the Note 8 to these financial statements. There are no post employment benefits paid during the year.

(c) No unsecured loans to Directors have been granted during the year.


30.2 Other related party transactionsTransactions that are carried out in the ordinary course of business between the Company and other Group companies as well as between Group companies who are defined as related parties in Sri Lanka Accounting Standards (LKAS - 24 ‘Related party Disclosures’) are disclosed below.

A. Transactions between the Company and other Group companies

In thousands of rupees

Related Company Common Directors Transaction 2017 2016C T Properties Limited Ranjit Page Capital contribution - 626,000

R. Selvaskandan Recovery of expenditure (1,386) (1,273)Louis Page Issue of shares (784,000) - Joseph Page Settlement 2,658 - Ms. Cecilia MuttukumaruS C Niles

Ceylon Theatres (Private) Limited R. Selvaskandan Rent income 3,469 3,596 Joseph Page Recovery of expenditure - 1,089 Ms. Cecilia MuttukumaruS C Niles

Settlement (13,134) -

Millers Limited - Rent income 26,958 18,018 Settlement (26,403) (18,018)

Cinema Entertainments (Private) Limited R. Selvaskandan Rent income 2,573 2,520 Settlement (3,071) (2,179)



B. Transactions between Group companies

In thousands of rupeesNet

AmountReceived /

(Paid)

Balanceas at

31-Mar-17

Purchase /Sale ofGoods

Receipt /Rendering

ofServices

InterestReceived /

Paid

DividendReceived /

Paid

SubsidiaryCargills (Ceylon) PLC (17,320) 13,974 √ √ √ √Cargills Foods Company (Private) Limited (29,205) 99,334 √ √ √ √Cargills Quality Foods Limited 1,550 2,317 √ √ √ √Cargills Distributors (Private) Limited (24,627) - - - √ √Cargills Quality Diaries (Private) Limited 50,668 86,974 √ - √ √Cargills Frozen Products (Private) Limited - - - - - -Kotmale Holdings PLC (46,055) (40,958) - - - √Kotmale Products Limited (139,843) (137,779) - - √ -Kotmale Milk Foods Limited (146,858) (144,383) - - √ -Kotmale Dairy Products (Private) Limited 195,805 332,318 √ - - √Kotmale Milk Products Limited (262,477) (4,885) - - - -Cargills Quality Confectioneries (Private) Limited (8,994) 31 √ - √ -Cargills Agrifoods Limited (6,165) 3,344 √ - √ √CPC Lanka Limited (4,235) 1,014 √ √ √ √Cargills Food Processors (Private) Limited 5,039 12,980 √ √ √ √Cargills Food Services (Private) Limited (414) 818 √ √ √Millers Limited 6,140 9,267 √ - √ √Dawson Office Complex (Private) Limited (257,897) - - - - -Ceylon Agro Development Company (Private) Limited - - - - - √C T Land Development PLC (5,091) 185 √ - - √Ceylon Theatres (Private) Limited (36,622) 16,245 - √ - √C T Properties Limited (1,011,005) 730,624 - - - -C T Property Management Company (Private) Limited 150 1353 - - - -C T Real Estate (Private) Limited (11,511) 350,942 - - - -C T Properties Lakeside (Private) Limited 370 87,249 - - - -C T Properties G S (Private) Limited 397 699,245 - - - -

Equity accounted investeesC T CLSA Holdings Limited (159) (159) - √ - -Cinema Entertainments (Private) Limited 1,054 1,979 √ - - -Cargills Bank Limited (7,371) 11,584 √


30.3 Related party balances



(a) Amount due from subsidiary companiesCeylon Theatres (Private) Limited - - 10,700 20,364C T Properties Limited - - 2,000 784,727 - - 12,700 805,091

(b) Amount due from other related companiesUnited Hotels Co. Limited 856 1,159 - -Cargills Bank Limited 11,584 18,955 - -Ceylon Hotels Corporation PLC 266 228 - -Galle Face Hotel Company Limited 502 65 - -Kandy Hotels Company (1938) PLC 861 1,074 - -Cinema Entertainments (Private) Limited 1,979 925 428 925 16,048 22,406 428 925Total amounts due from related companies 16,048 22,406 13,128 806,016

(c) Amounts due to subsidiary companiesMillers Limited - - - 556 - - - 556

(d) Amount due to other related companiesKalamazoo System Limited - 391 - -Cinema Entertainments (Private) Limited - 1,248 - -CT CLSA Securities (Pvt) Ltd 638 - - -CT CLSA Capital (Pvt) Ltd 218 - - -Comtrust Asset Management (Pvt) Ltd 249 - - -CT CLSA Holdings Ltd 159 - - - 1,264 1,639 - -Total amounts due to related companies 1,264 1,639 - 556

30.4 Parent Company and ultimate controlling entityOdeon Holdings (Ceylon) (Private) Limited holds 41.75% (2016 – 41.75%) of the ordinary share capital of the Company.



31. Operating segmentsThe Group has five reportable segments, as described in Note 2.1, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different management strategies. For each of the strategic business units, the Group’s chief decision maker reviews internal management reports at least on a quarterly basis.

31.3 Geographical informationThe Group does not distinguish its turnover into significant geographical segments.

31.4 The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 2.1. Segment profit represents the profit before tax earned by each segment without allocation of corporate net income and Directors’ salaries, share of profit of associates, other gains and losses. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

For the purposes of monitoring segment performance and allocating resources between segments:(a) All assets are allocated to reportable segments other than interests in associates and assets use by the head office. Goodwill is

allocated to reportable segments as described in note 16.1. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments.

(b) All liabilities are allocated to reportable segments other than liabilities of the head office, if there are any.


Notes to the Financial Statements (Contd.)31

.5

Info

rmat

ion

abou

t rep

orta

ble

segm

ents

For t

he ye

ar en

ded

31st

Mar

ch

Reta

il & W

holes

ale

FMCG

Re

staur

ants

Real

Esta

te

Ente

rtain

men

t Gr

oup

Di

strib

ution

In th

ousa

nds o

f rup

ees

2017

20

16

2017

20

16

2017

20

16

2017

20

16

2017

20

16

2017

20

16

Reve

nue

Gros

s rev

enue

69

,070

,229

58,

293,

081

17,8

50,1

66 1

5,50

5,70

7 3,

268,

984

2,81

2,09

8 56

3,53

8 62

6,80

3 34

0,35

2 33

0,52

9 91

,093

,270

77,

568,

218

Elim

inati

ons o

f int

er se

gmen

t rev

enue

(9

50,4

80)

(789

,187

) (5,

048,

029)

(4,3

79,8

49)

- -

(56,

979)

-

- -

(6,0

55,4

89) (

5,16

9,03

6)Ex

tern

al re

venu

e 68

,119

,749

57,

503,

894

12,8

02,1

37 1

1,12

5,85

8 3,

268,

984

2,81

2,09

8 50

6,55

9 62

6,80

3 34

0,35

2 33

0,52

9 85

,037

,781

72,

399,

182

Segm

ent r

esul

tRe

sults

from

ope

ratin

g acti

vities

3,

074,

674

1,87

4,44

1 1,

943,

319

1,53

9,31

4 26

6,71

8 12

4,80

5 52

1,20

4 43

8,04

3 31

,587

26

,461

5,

837,

502

4,00

3,06

4Co

rpor

ate

and

othe

r una

lloca

ted

oper

ating

pro

fit

(39,

197)

13

2,24

5

5,79

8,30

5 4,

135,

309

Repo

rtabl

e seg

men

t pro

fit aft

er ta

x 1,

230,

569

883,

683

919,

078

803,

504

162,

030

62,3

14

298,

648

301,

919

30,8

74

22,4

13

2,64

1,19

9 2,

073,

833

Corp

orat

e an

d ot

her u

nallo

cate

d op

erati

ng p

rofit

25

,815

24

4,37

4

2,66

7,01

4 2,

318,

207

Repo

rtabl

e se

gmen

t pro

fit fo

r the

year

att

ribut

able

to o

wner

s of t

he p

aren

t

760,

981

57

3,88

1 6

45,1

98

563,

154

11

3,74

6

43,7

25

175,

879

182,

292

26

,257

18

,802

1

,722

,061

1,

381,

854

Corp

orat

e an

d ot

her u

nallo

cate

d op

erati

ng p

rofit

25

,815

24

4,37

4

1

,747

,876

1,6

26,2

28

Net fi

nanc

e exp

ense

(8

56,1

72)

(438

,477

) (2

42,7

59)

(135

,459

) (4

,165

) (2

0,10

4)

(98,

776)

(1

6,11

1)

3,96

6 1,

717

(1,1

97,9

06)

(608

,434

)Co

rpor

ate

and

othe

r una

lloca

ted

oper

ating

pro

fit

66,7

85

214,

808

(1,

131,

121)

(3

93,6

26)

Depr

eciati

on

1,04

8,95

6 98

7,85

7 58

7,70

4 53

6,35

5 17

1,17

0 16

7,20

4 10

,592

11

,301

51

,409

56

,941

1,

869,

831

1,75

9,65

8Co

rpor

ate

and

othe

r una

lloca

ted

oper

ating

pro

fit

3,98

0 6,

343

1,

873,

811

1,76

6,00

1


For t

he ye

ar en

ded

31st

Mar

ch

Reta

il & W

holes

ale

FMCG

Re

staur

ants

Real

Esta

te

Ente

rtain

men

t Gr

oup

Di

strib

ution

In th

ousa

nds o

f rup

ees

2017

20

16

2017

20

16

2017

20

16

2017

20

16

2017

20

16

2017

20

16

Segm

ent a

sset

sSe

gmen

t non

-curre

nt as

sets

Prop

erty,

plan

t and

equi

pmen

t 15

,223

,474

14,

264,

461

4,93

4,44

8 4,

008,

008

1,00

4,84

8 91

6,76

5 54

7,32

7 16

9,57

3 25

4,20

9 24

2,93

9 21

,964

,306

19,

601,

746

Prep

aid le

ase r

enta

ls to

acqu

ire ri

ghts

to u

se la

nds

147,

909

- 23

,625

24

,500

-

- -

- 8,

710

10,0

32

180,

244

34,5

32In

vestm

ent p

rope

rties

93

9,98

6 3,

158,

939

- -

- -

9,44

5,30

1 6,

536,

327

- -

10,3

85,2

87

9,69

5,26

6Go

odwi

ll and

oth

er in

tang

ible

asse

ts 11

6,29

8 -

627,

821

531,

571

94,6

82

98,8

38

- 45

0 44

7 78

2 83

9,24

8 63

1,64

1Ot

her i

nves

tmen

ts 6,

500

60,0

56

- -

- -

151,

882

124,

912

- -

158,

382

184,

968

Defe

rred

tax a

sset

s -

6,37

5 49

,196

48

,255

-

- -

- 36

6 -

49,5

62

54,6

30To

tal s

egm

ent n

on-c

urre

nt as

sets

16,4

34,1

67 1

7,48

9,83

1 5,

635,

090

4,61

2,33

4 1,

099,

530

1,01

5,60

3 10

,144

,510

6,

831,

262

263,

732

253,

753

33,5

77,0

29 3

0,20

2,78

3Cu

rrent

asse

tsIn

vent

ories

6,

502,

700

5,78

6,98

0 1,

768,

375

1,34

4,01

5 65

,534

63

,652

-

- 3,

519

3,47

5 8,

340,

128

7,19

8,12

2Tr

ade a

nd o

ther

rece

ivabl

es

2,89

7,89

7 2,

189,

415

1,49

1,86

3 1,

286,

422

124,

729

117,

456

112,

210

153,

667

45,8

11

20,2

08

4,67

2,51

0 3,

767,

168

Othe

r inv

estm

ents

14,3

62

50,8

60

60

58

59

58

- -

- -

14,4

81

50,9

76Ca

sh an

d ca

sh e

quiva

lents

941,

725

1,14

5,16

9 1,

183,

096

1,87

2,27

1 30

,531

20

,135

62

,698

96

,161

12

,069

30

,048

2,

230,

119

3,16

3,78

4To

tal s

egm

ent c

urre

nt as

sets

10,3

56,6

84

9,17

2,42

4 4,

443,

394

4,50

2,76

6 22

0,85

3 20

1,30

1 17

4,90

8 24

9,82

8 61

,399

53

,731

15,

257,

238

14,1

80,0

50To

tal s

egm

ent a

sset

s 26

,790

,851

26,

662,

255

10,0

78,4

84

9,11

5,10

0 1,

320,

383

1,21

6,90

4 10

,319

,418

7,

081,

090

325,

131

307,

484

48,8

34,2

67 4

4,38

2,83

3In

vestm

ents

in e

quity

acco

unte

d in

veste

es

6,29

3,71

1 4,

195,

236

Corp

orat

e an

d ot

her u

nallo

cate

d as

sets

2,73

4,75

6 3,

585,

652

57,

862,

734

52,1

63,7

21

Segm

ent l

iabilit

iesNo

n-cu

rrent

liabi

lities

Borro

wing

s -

198,

300

2,56

9 -

- -

- -

- -

2,56

9 19

8,30

0Em

ploy

ee b

enefi

ts 72

9,35

2 57

4,14

3 50

,410

63

,856

-

- 29

,647

38

,949

4,

083

2,98

8 81

3,49

2 67

9,93

6De

ferre

d in

com

e -

- 73

,381

84

,862

-

- 30

,226

-

- -

103,

607

84,8

62Tr

ade a

nd o

ther

pay

ables

2,

761,

159

2,25

1,74

3 -

- -

- 17

9,62

1 20

7,55

3 -

- 2,

940,

780

2,45

9,29

6De

ferre

d ta

x liab

ilities

44

5,96

5 25

7,80

0 38

4,30

8 30

7,19

7 92

,705

95

,038

39

1,50

7 35

8,85

4 -

- 1,

314,

485

1,01

8,88

9To

tal s

egm

ent n

on-c

urre

nt lia

biliti

es

3,93

6,47

6 3,

281,

986

510,

668

455,

915

92,7

05

95,0

38

631,

001

605,

356

4,08

3 2,

988

5,17

4,93

3 4,

441,

283

Curre

nt lia

bilit

iesTr

ade a

nd o

ther

pay

ables

10

,004

,025

8,

886,

975

1,50

6,08

0 1,

619,

558

564,

607

430,

017

79,7

57

130,

931

33,6

74

3,18

2 12

,188

,143

11,

070,

663

Curre

nt ta

x liab

ilities

88

7,02

2 51

5,76

9 1,

071,

544

886,

249

173,

616

70,7

54

26,8

79

40,2

80

4,26

6 6,

999

2,16

3,32

7 1,

520,

051

Borro

wing

s 10

,922

,410

7,

604,

843

4,33

0,03

3 3,

418,

593

291,

105

285,

791

271,

831

1,02

6 -

- 15

,815

,379

11,

310,

253

Divid

ends

pay

able

- -

- -

- -

- -

- -

- -

Tota

l seg

men

t cur

rent

liabi

lities

21

,813

,457

17,

007,

587

6,90

7,65

7 5,

924,

400

1,02

9,32

8 78

6,56

2 37

8,46

7 17

2,23

7 37

,940

10

,181

30,

166,

849

23,9

00,9

67To

tal s

egm

ent l

iabiliti

es

25,7

49,9

33 2

0,28

9,57

3 7,

418,

325

6,38

0,31

5 1,

122,

033

881,

600

1,00

9,46

8 77

7,59

3 42

,023

13

,169

35,

341,

782

28,3

42,2

50

Corp

orat

e an

d ot

her u

nallo

cate

d as

sets

321,

507

298,

917

35,

663,

289

28,6

41,1

67



32. CommitmentsThe capital expenditure commitments of the Company and Group approved by the Directors as at 31st March 2017 were as follows:

Group Company

As at 31st March 2017 2016 2017 2016In thousands of rupees

32.1 Capital commitmentsApproved and contracted 2,112,839 912,495 - -

32.2 Financial commitments(a) Settlement of letter of credits and import bills 36,173 333,371 - -

(b) Operating lease commitments where the Group is the lessee;

- within 1 year 1,212,518 912,495 - -- between 1 - 5 years 6,260,567 4,008,943 - -- more than 5 years 11,479,496 6,824,167 - - 18,952,581 11,745,605 - -

33. Contingencies(a) Letters of Guarantee

The Company and subsidiaries Cargills (Ceylon) PLC and Kotmale holdings PLC have given letters of gurantee to Commercial Banks on behalf of subsidiary companies totalling to Rs. 2.175 Bn. The Directors do not expect any claim on these guarantees. Accordingly, no provision has been made in the financial statements for any possible losses.

Cargills (Ceylon) PLC has provided bank guarantees to Lion Brewery (Ceylon) PLC and its subsidiary Pearl Springs (Private) Limited to the value of Rs. 700 Mn in 2015 to cover contingent tax liabilities in connection with the disposal of the investment in Millers Brewery Limited. The Directors do not expect any claim on these guarantees. Accordingly, no provision has been made in the financial statements for any possible losses there from.

(b) Income tax

Income tax exemptions claimed are being contested by the Department of Inland Revenue. This is further explained in note 10.6.


34. Events after the reporting periodNo material events have occurred since the reporting date which require adjustments to or disclosure in the financial statements.

35. Going ConcernThe subsidiary C T Properties Ltd recorded accumulated losses of Rs. 1,829,547,603/- as at 31 March 2017 (2016: Rs. 1,722,888,788/-). This indicates the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern. Note 15.2(g) indicates a potential restriction on the realisability of a land owned by the subsidiary. However, the net realisable values of the property assets and investments exceed the value at which such assets are stated in the statement of financial position. Further, the related party dues would not be demanded for repayment in a manner that would affect the Company’s ability to function as going concern due to the investments and borrowings for the same operations. Having taken into consideration the financial position and future prospects, the Directors have a reasonable expectation that the Company has adequate resources to continue to be in operation in the foreseeable future. Accordingly, the Directors have adopted a Going Concern method of accounting of the subsidiary concerned as at the reporting date.


As at / for the year ended 31st March 2017 2016 2015 2014 2013

Financial ResultsRevenue 85,037,781 72,399,182 62,452,231 56,768,293 67,820,126Results from operations 5,798,305 4,135,309 2,127,552 3,002,800 5,958,327Net finance costs (1,131,121) (393,626) (667,970) (933,975) (1,748,290)Profit before taxation 4,690,108 3,662,324 1,421,691 2,010,411 4,210,782Tax expenses (2,023,094) (1,344,117) (701,923) (578,931) (865,599)Profit after tax for the year from discontinued operations - - 420,435 152,504 -Profit for the year 2,667,014 2,318,207 1,140,203 1,583,984 3,345,183

Attributable to -Owners of the parent 1,747,876 1,626,228 816,846 1,279,841 1,977,280Non-controlling Interest 919,138 691,979 323,357 304,143 1,367,903 2,667,014 2,318,207 1,140,203 1,583,984 3,345,183

Financial PositionStated capital 3,194,008 3,194,008 3,194,008 3,194,008 3,194,008Reserves 15,600,031 15,665,674 14,156,800 13,754,323 13,777,893Total equity attributable to equity holders of the parent 18,794,039 18,859,682 17,350,808 16,948,331 16,971,901Non-controlling interest 3,405,406 4,662,872 4,195,112 3,824,693 9,825,801Total equity 22,199,445 23,522,554 21,545,920 20,773,024 26,797,702

BorrowingsBorrowings 15,817,948 11,508,553 12,384,754 17,605,055 20,373,916Non-current payables 2,761,159 2,251,743 1,974,311 - - 18,579,107 13,760,296 14,359,065 17,605,055 20,373,916

Net AssetsCurrent assets 15,529,397 14,418,707 12,618,347 11,584,180 18,849,338Current liabilities (30,499,922) (24,212,544) (20,887,330) (25,349,345) (26,271,404)Net current liabilities (14,970,525) (9,793,837) (8,268,983) (13,765,165) (7,422,150)Non-current liabilities (5,163,367) (4,428,623) (4,330,326) (3,003,203) (6,981,794)Non-current assets 42,333,337 37,745,014 34,145,229 37,541,392 41,201,562Total net assets 22,199,445 23,522,554 21,545,920 20,773,024 26,797,702

Ratios & StatisticsGrowth in annual turnover (%) 17.46 15.93 10.01 (16.30) 14.34Earnings per share (Rs.) 9.55 8.88 4.46 6.99 10.80Growth in earnings (%) 7.48 99.09 (36.18) (40.00) 73.94Shareholders’ funds per share (Rs.) 102.65 103.00 94.76 92.56 92.89Growth in shareholders’ funds (%) (0.35) 8.70 2.37 (7.09) 40.05Return on shareholders’ funds (%) 9.30 8.62 4.71 7.55 11.65Non-current assets to shareholders’ funds (%) 225.25 200.14 196.79 221.50 242.76Current ratio (times) 0.51 0.60 0.60 0.46 0.72Debt equity ratio (times) 0.84 0.38 0.67 0.85 0.76Dividend per share (Rs.) 5.20 3.80 3.40 8.30 2.31Dividend cover (times) 1.83 2.34 1.31 0.84 4.67Market price per share (Rs.) 148.90 129.90 128.00 135.00 126.20Price earnings ratio (times) 15.59 14.63 28.69 19.31 11.68Net asset value per share 121.24 128.47 117.67 113.45 146.36

Five Year Review - Group


Parent CompanyC T Holdings PLCAddress: No 8, Sir Chittampalam A Gardiner Mawatha, Colombo 02. Phone: +94112431243 Fax: +94112447956 Email: [email protected] Emeritus: Mr. Anthony A Page Directors: Louis Page (Chairman), Ranjit Page, Priya Edirisinghe, Sunil Mendis, J B L De Silva, Mrs. Cecilia Muttukumaru, Dr. A Aravinda Page, Joseph Page, R Selvaskandan, A D B Talwatte, Imtiaz Abdul Wahid (w e f 01 December 2016), S C Niles (w e f 01 February 2017)

Retail and Wholesale DistributionCargills (Ceylon) PLCAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704 Email: [email protected]: Louis Page (Chairman), Ranjit Page, Imtiaz Abdul Wahid, Sidath Kodikara, Priya Edirisinghe, P S Mathavan, Sanjeev Gardiner, Sunil Mendis, Anthony A Page, Joseph Page, Errol Perera

Cargills Foods Company (Private) LimitedAddress: 40, York Street, Colombo 01 Phone: +94112427777 Fax: +94112338704Directors: Ranjit Page (Chairman), Sidath Kodikara, Imtiaz Abdul Wahid, Priya Edirisinghe, Y Kanagasabai (w e f 01 July 2016), Sunil Mendis, Ms. Farida Kambata (w e f 01 October 2016)

Millers LimitedAddress: 40 York Street, Colombo 1 Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, P S Mathavan, D G O Dias, Ms. M G Perera (up to 31 January 2017)

Group Directory

FMCGCargills Quality Foods LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Ranjit Page (Chairman), Imtiaz Abdul Wahid, Sidath Kodikara, P S Mathavan, J C M Victoria, S L W Dissanayake

Cargills Distributors (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara

Cargills Quality Dairies (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara, P S Mathavan, D G O Dias, S L W Dissanayake,

Cargills Agrifoods LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara, P S Mathavan, Ms. M G Perera (up to 31 January 2017)

CPC (Lanka) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara

Ceylon Agro Development Company (Private) Limited Address: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Haridas Fernando, Keerthi Gunasekara, Talaal Maruzook, Saranga Wijesundara

Kotmale Holdings PLCAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Ranjit Page (Chairman), Imtiaz Abdul Wahid, P S Mathavan, Priya Edirisinghe, Sunil Mendis, Joseph Page

Kotmale Products LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, S L W Dissanayake

Kotmale Milk Foods LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, S L W Dissanayake

Kotmale Dairy Products (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, S L W Dissanayake

Kotmale Milk Products LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, S L W Dissanayake

Cargills Frozen Products (Pvt) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara, D G O Dias, S L W Dissanayake


Cargills Quality Confectionaries (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara

Cargills Enterprise Solutions (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: R Theagarajah (Chairman), S C Niles, Rohan Muttiah, Ranjit Page, Imtiaz Abdul Wahid

RestaurantsCargills Food Processors (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara, P S Mathavan, J C M Victoria

Cargills Foods Services (Private) LimitedAddress: 40, York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, Sidath Kodikara, P S Mathavan

Real EstateC T Land Development PLCAddress: 4th Floor, Majestic City, 10, Station Road, Colombo 04. Phone: +94112508673-4 Fax: +94112592427 Email: [email protected]: R Selvaskandan (Chairman), Joseph Page, Mrs. M G Perera, Anthony A Page, Louis Page, Priya Edirisinghe, Sunil Mendis, S C Niles, Dr. T Senthilverl, A D M De Alwis (up to 31 December 2016), Ranjit Page (w e f 27 January 2017)

C T Properties LimitedAddress: 28th Floor, West Tower, World Trade Centre, Colombo 01. Phone: +94112005700 Fax: +94112336727 Email: [email protected]: Ranjit Page (Chairman), R Selvaskandan, Joseph Page, Mrs. Cecilia Muttukumaru, S C Niles, Louis Page, Errol Perera, Jayantha Perera

C T Property Management Company (Private) LimitedAddress: 28th Floor, West Tower, World Trade Centre, Colombo 01. Phone: +94112005700 Fax: +94112336727Directors: R Selvaskandan (Chairman), Joseph Page, S C Niles, Louis Page, Errol Perera, Jayantha Perera

C T Real Estate (Private) LimitedAddress: 28th Floor, West Tower, World Trade Centre, Colombo 01. Phone: +94112005700 Fax: +94112336727Directors: R Selvaskandan (Chairman), Joseph Page, Mrs. Cecilia Muttukumaru, S C Niles, Louis Page, Errol Perera, Jayantha Perera

C T Properties Lakeside (Private) LimitedAddress: 28th Floor, West Tower, World Trade Centre, Colombo 01. Phone: +94112005700 Fax: +94112336727Directors: R Selvaskandan (Chairman), Joseph Page, Mrs. Cecilia Muttukumaru, S C Niles, Louis Page, Errol Perera, Jayantha Perera

C T Properties G S (Private) Ltd (formerly Keppel C T Developments (Pvt) Limited)Address: 28th Floor, West Tower, World Trade Centre, Colombo 01. Phone: +117468500 Fax: +117468502Directors: Louis Page (alternate - R Selvaskandan), Ranjit Page (alternate - S C Niles)

Dawson Office Complex (Private) LimitedAddress: 40 York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Director: Imtiaz Abdul Wahid

Frederick North Hotel Company (Private) LimitedAddress: 40 York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Imtiaz Abdul Wahid, S C Niles

Empire Investment Company (Private) LimitedAddress: 40 York Street, Colombo 01. Phone: +94112427777 Fax: +94112338704Directors: Ranjit Page, S C Niles, Anthony A Page

Group Directory (Contd.)


EntertainmentCeylon Theatres (Private) LimitedAddress: 8 Sir Chittampalam A Gardiner Mawatha, P O Box 2042, Colombo 02. Phone: +94112431243, +94112555565 Fax: +94112447956Directors: R Selvaskandan (Chairman), Joseph Page, Mrs. M G Perera, Anthony A Page, Mrs. Cecilia Muttukumaru, S C Niles

Banking & Financial ServicesCargills Bank LimitedAddress: 696 Galle Road, Colombo 04. Phone: +94117640000 Fax: +94112055575 Email: [email protected], Directors: Louis Page (Chairman), Ranjit Page, Rajendra Theagarajah, P S Mathavan, Mangala Boyagoda, Kamalini De Silva, Faizal Salieh, Richard Ebell

C T CLSA Holdings LimitedAddress: 4-14, Majestic City, 10 Station Road, Colombo 04. Phone: +94112552290 Fax: +94112552289Directors: Priya Edirisinghe (Chairman), Mrs. Cecilia Muttukumaru, Louis Page, Donald Skinner

C T CLSA Securities (Private) LimitedAddress: 4-14, Majestic City, 10 Station Road, Colombo 04. Phone: +94112552290 Fax: +94112552289 Email: [email protected]: Mrs. Cecilia Muttukumaru (Chairperson), Priya Edirisinghe, Donald Skinner, Kanishka Hewage

C T CLSA Capital (Private) LimitedAddress: 4-15 A, Majestic City, 10 Station Road, Colombo 04. Phone: +94112584843, +94112503523 Fax: +94112580181 Email: [email protected]: Mrs. Cecilia Muttukumaru (Chairperson), Donald Skinner, S C Niles, Zakir Mohamedally

Comtrust Asset Management LimitedAddress: 4-02, Majestic City, 10 Station Road, Colombo 04. Phone: +94115759571, +94112506347, +94112506204 Fax: +94112506347 Email: [email protected]: Mrs. Cecilia Muttukumaru (Chairperson), Donald Skinner, Joseph Page


Information to Shareholders

1. Distribution of ShareholdersSize of Shareholdings 31st March 2017 31st March 2016

Shareholders Holdings Shareholders HoldingsNumbers % Numbers % Numbers % Numbers %

1 - 1,000 Shares 772 50.86 198,779 0.11 806 51.44 208,035 0.111,001 - 10,000 Shares 437 28.79 1,976,336 1.08 452 28.84 2,042,514 1.1210,001 - 100,00 Shares 252 16.60 7,800,855 4.26 247 15.76 7,653,597 4.18100,001 - 1,000,000 Shares 39 2.57 11,491,546 6.28 44 2.81 12,442,055 6.79Over 1,000,000 Shares 18 1.18 161,629,737 88.25 18 1.15 160,751,052 87.80Total 1,518 100.00 183,097,253 100.00 1,567 100.00 183,097,253 100.00

2. Analysis of ShareholdersSize of Shareholdings 31st March 2017 31st March 2016

Shareholders Holdings Shareholders HoldingsNumbers % Numbers % Numbers % Numbers %

Institutions 117 7.71 112,566,249 61.48 123 7.85 112,400,344 61.39Individuals 1,401 92.29 70,531,004 38.52 1,444 92.15 70,696,909 38.61Total 1,518 100.00 183,097,253 100.00 1,567 100.00 183,097,253 100.00

Residents 1,387 91.37 152,506,855 83.29 1,433 91.45 152,382,567 83.22Non-Residents 131 8.63 30,590,398 16.71 134 8.55 30,714,686 16.78Total 1,518 100.00 183,097,253 100.00 1,567 100.00 183,097,253 100.00


3. Major Shareholders

Name of Shareholder 31st March 2017 31st March 2016Number of Shares % Number of Shares %

Odeon Holdings (Ceylon) (Pvt) Ltd 76,442,848 41.75 76,442,848 41.75Mr. Anthony A. Page 15,910,261 8.69 15,910,261 8.69Mr. Ranjit Page 11,231,945 6.13 10,927,338 5.97Sir Chittampalam A Gardiner Trust 9,200,004 5.03 9,200,004 5.03Ms. M.M. Page 8,849,731 4.83 8,630,877 4.71Employees Provident Fund 6,988,170 3.82 6,988,170 3.82Mr. Joseph Page 6,426,520 3.51 6,426,520 3.51Mrs. T. Selvaratnam 5,152,045 2.81 5,152,045 2.81The Bank of New York Mellon SA/NV – CF Ruffer Total Return Fund 4,300,000 2.35 4,300,000 2.35The Bank of New York Mellon SA/NV – CF Ruffer Absolute Return Fund 3,351,080 1.83 3,351,080 1.83Mrs. Tanya Selvaratnam 2,565,000 1.40 2,565,000 1.40Mr. T Selvaratnam 2,565,000 1.40 2,565,000 1.40HSBC Intl Nom Ltd - SSBT - First State Investments ICVC - Stewart Investors Indian Subcontinent Fund

2,093,683 1.14 - -

BNY-CF Ruffer Investment Funds : CF Ruffer Pacific Fund 2,000,000 1.09 2,000,000 1.09HSBC Intl Nom Ltd - JPMCB - Pacific Assets Trust PLC 1,686,445 0.92 1,686,445 0.92Melstacorp Ltd 1,475,500 0.81 1,475,500 0.81Mrs. Cecilia Muttukumaru 1,290,000 0.70 1,155,000 0.63Ms. A.M. Basnayake 890,588 0.49 864,080 0.47Mr. P.E. Muttukumaru 853,000 0.47 845,000 0.46The Galle Face Hotel Co. Ltd 832,275 0.45 832,275 0.45HSBC Intl Nom Ltd - SSBT - National Westminster Bank PLC as Depository of First State Indian Subcontinent

- - 1,974,964 1.08

Others 18,993,158 10.37 19,804,846 10.82Total 183,097,253 100.00 183,097,253 100.00

4. Share ValuationThe market value of ordinary shares of the Company on 31st March 2017 was Rs 148.90 (2016 - Rs 129.90). The highest and lowest values recorded during the year ended 31st March 2017 were Rs 150.00 (2016 - Rs 164.00) and Rs 114.00 (2016 - Rs 117.00) respectively.

5. Public Holding31st March 2017 31st March 2016

Shareholders ShareholdersNumber % Number of %

Public shareholding 1,502 38.92 1,553 39.22


Notice is hereby given that the Eighty Sixth Annual General Meeting of C T Holdings PLC will be held at the auditorium, the Institute of Chartered Accountants of Sri Lanka, 30A, Malalasekera Mawatha (Longdon Place), Colombo 07 on Friday, 30th June 2017 at 2.30 p.m. and the business to be brought before the meeting will be:

1) To receive and consider the Annual Report of the Directors and the financial statements for the year ended 31st March 2017 with the report of the Auditors thereon.

2) To re-elect Directors

a. Mrs. C K Muttukumaru and

b. Dr. A Aravinda Page, who retire by rotation,

c. Mr. Imtiaz Abdul Wahid (appointed a Director on 01 December 2016) and

d. Mr. S C Niles (appointed a Director on 01 February 2017) who retire in terms of the Articles of Association at the Annual General Meeting,

e. Mr. J B L De Silva and

f. Mr. A T P Edirisinghe and

g. Mr. Sunil Mendis, who retire in terms of Section 210 (2) (a) and (b) of the Companies Act No. 07 of 2007 having attained the age of Seventy, Seventy One and Seventy Two years respectively and offer themselves for re-election in terms of Section 211 (1) and (2) of the Companies Act No, 07 of 2007

Ordinary Resolution (i)“Resolved that Mr. J B L De Silva, a retiring Director, who has attained the age of seventy years be and is hereby reappointed a Director of the Company and it is hereby declared that the age limit of seventy years referred to in Section 210 of the Companies Act No. 07 of 2007 shall not apply to the appointment of the said Director”, and

Ordinary Resolution (ii)“Resolved that Mr. A T P Edirisinghe, a retiring Director, who has attained the age of seventy One years be and is hereby reappointed a Director of the Company and it is hereby declared that the age limit of seventy years referred to in Section 210 of the Companies Act No. 07 of 2007 shall not apply to the appointment of the said Director”, and

Ordinary Resolution (iii)“Resolved that Mr. Sunil Mendis, a retiring Director, who has attained the age of seventy two years be and is hereby reappointed a Director of the Company and it is hereby declared that the age limit of seventy years referred to in Section 210 of the Companies Act No. 07 of 2007 shall not apply to the appointment of the said Director”

3) To authorise the Directors to determine contributions to charities

4) To authorise the Directors to determine the remuneration of the Auditors, Messrs. KPMG, who are deemed re-appointed as auditors at the Annual General Meeting of the Company in terms of Section 158 of the Companies Act No. 7 of 2007.

By order of the Board


Colombo6th June 2017

Note:A shareholder is entitled to appoint a proxy to attend and vote in his/her stead and a proxy need not be a shareholder of the Company. A form of proxy is enclosed for this purpose. The instrument appointing a proxy must be completed and deposited at the registered office of the Company not less than 48 hours before the time fixed for the holding of the Meeting.

Notice of Meeting


I/We.......................................................................................................................................................................................................................of

..................................................................................................................................................................................................................................

.........................................................................................................being the Shareholder/Shareholders of C T HOLDINGS PLC hereby appoint

(1)........................................................................................................... of .............................................................................................................

.............................................................................................................................................................................................................................. or

failing him/her

(2) The Chairman of the Meeting as my/our proxy to vote as indicated for me/us and on my / our behalf at the Eighty Sixth Annual General Meeting of the Company to be held on 30th June 2017 and at any adjournment thereof.

Resolution For AgainstTo adopt the Financial Statements for the year ended 31st March 2017

To re-elect Mrs. C K Muttukumaru as a Director

To re-elect Dr. A Aravinda Page as a Director

To re-elect Mr Imtiaz Abdul Wahid as a Director

To re-elect Mr S C Niles as a Director

To re-elect Mr J B L De Silva as a Director

To re-elect Mr A T P Edirisinghe as a Director

To re-elect Mr Sunil Mendis as a Director

To authorise the Directors to determine contribution to charities

To authorise the Directors to determine the remuneration of the Auditors, Messrs. KPMG, who are deemed re-appointed as Auditors at the Annual General Meeting.

The proxy may vote as he/she thinks fit on any other resolution brought before the meeting.

Dated this .............................................................................. day of ............................................................. 2017

Witnesses:.................................................................................................................................................................

..........................................................................Signature of the Shareholder

Note:(a) A proxy need not be a member of the Company.

(b) Instructions as to completion appear on the reverse hereof

Form of Proxy


Instructions as to CompletionTo be valid, this Proxy form should be completed, signed and deposited at the Registered Office of the Company at No. 8, Sir Chittampalam A Gardiner Mawatha, Colombo 2, not less than 48 hours before the time appointed for holding the meeting. In perfecting the Form of Proxy, please ensure that all details are legible.

If you wish to appoint a person other than the Chairman as your proxy, please insert the relevant details at (1) overleaf and initial against this entry.

Please indicate with an X in the space provided how your Proxy is to vote on each resolution. If no indication is given, the proxy at his/her discretion will vote as he/she thinks fit.

In 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.

In the case of joint holders, only one needs to sign. The votes of the senior holder who tenders a vote will alone be counted.

In the case of non-resident Shareholders, the stamping will be attended to upon the return of the completed Form of Proxy to Sri Lanka.

Form of Proxy (Contd.)

Name of CompanyC T Holdings PLC

Registration NoPQ 210

Legal FormQuoted Public Company with limited liability Incorporated in Sri Lanka on 29th September 1928 and re-registered under the Companies Act No. 7 of 2007.

Chairman EmeritusAnthony A Page

Board of DirectorsLouis Page (Chairman)Ranjit Page (Deputy Chairman / Managing Director)J B L De SilvaPriya EdirisingheSunil MendisMrs. Cecilia MuttukumaruDr. A Aravinda PageJoseph PageR SelvaskandanA D B TalwatteImtiaz Abdul Wahid (w e f 01 December 2016)S C Niles (Executive Director, w e f 01 February 2017)

Company SecretarySarath Dissanayake

Corporate Information

Registered OfficeNo 8, Sir Chittampalam A Gardiner Mawatha, Colombo 2, Sri LankaTelephone: +94 11 2431243 Email: [email protected]: +94 11 2447956Postal Address: PO Box 327, Colombo

Exchange ListingColombo Stock Exchange

Executive CommitteePriya Edirisinghe (Chairman)Ranjit PageSunil MendisJoseph PageR SelvaskandanImtiaz Abdul Wahid

Audit CommitteePriya Edirisinghe (Chairman)J B L De SilvaSunil MendisA D B Talwatte

Remuneration CommitteeLouis Page (Chairman)J B L De SilvaPriya EdirisingheSunil Mendis

Nominations CommitteeLouis Page (Chairman)Priya EdirisingheSunil MendisRanjit Page

Related Party Transactions Review CommitteePriya Edirisinghe (Chairman)J B L De SilvaSunil MendisA D B Talwatte

AuditorsKPMG, Chartered Accountants

Tax ConsultantsPricewaterhouseCoopers, Chartered Accountants

BankersCargills Bank LtdCommercial Bank of Ceylon PLCPeople’s BankHatton National Bank PLCNDB Investment Bank LtdSampath Bank PLCStandard Chartered BankNations Trust Bank PLC

Creating Value since 1928

C T Holdings PLCNo 08, Sir Chittampalam A Gardiner Mawatha, Colombo 02.

Documents

ANNUAL REPORT - Colombo Stock ExchangeC T Holdings PLC 01 Annual Report 2016/17 We are... Professionals inspired by the ingrained family values inherited over generations Value creators