ANNUAL REPORT 2010/2011

FUTURE...

FUTURE...

ANNUAL REPORT 2010/2011

02 03

OUR VISION

OUR MISSION

OUR VALUES

“To be the convenient partner in enhancing the taste and

health needs of the nation”

“To become the largest value added salt supplier in the island

contributing to fulfillment of salt and iodine needs of the nation

by way of extracting best resources from nature using modern

technology and improved productivity while satisfying

stakeholders of every facet”

Customer is valued as the most important party and

the entire processes centre for fulfilling and exceeding

customer needs and wants.

We value the customer centric decision making system

based on evidence rather than management by opinion.

Equal treatment of employees is recognized as a prominent

value of the company.

Existence of favourable working environment and

protection and respect for employees' rights, assurance

equity in reward system.

Employees are valued and recognized as the number one

asset of the company rather than as a liability.

Drivers towards continuous improvements in processes are

recognized as a value in the system.

Team effort is a valued feature of the organization rather

than chasing individual goal achievement.

Recognition and acceptance of social and environmental

responsibilities in all the operations of the company.

THE SHEER DEDICATION AND COMMITMENT BY MANY

TOWARDS THE ATTAINMENT OF THE PROMISED GOALS,

CONTRIBUTED TO THE ACHIEVEMENT OF YOUR

COMPANY'S SUCCESS SO FAR.

THE COMPLETION OF MANY PHASES OF THE GIGANTIC

PROJECTS THAT HAVE BEEN UNDERTAKEN BY YOUR

COMPANY REINFORCES SELF BELIEF AND INSPIRES

TOWARDS ACHIEVING THE GOAL OF YOUR COMPANY

BECOMING THE LARGEST PLAYER IN THE SALT INDUSTRY

IN SRI LANKA.

YOUR COMPANY, ENCAPSULATING THE UNIQUE

BUSINESS STRENGTHS IT IS ENDOWED WITH, MARCHES

ON, HAVING EMBARKED ON THE ROAD TO GAIN

SUPREMACY IN THE SALT INDUSTRY IN SRI LANKA IN

NEAR FUTURE ..........

FUTURE

02 03

OUR VISION

OUR MISSION

OUR VALUES

“To be the convenient partner in enhancing the taste and

health needs of the nation”

“To become the largest value added salt supplier in the island

contributing to fulfillment of salt and iodine needs of the nation

by way of extracting best resources from nature using modern

technology and improved productivity while satisfying

stakeholders of every facet”

Customer is valued as the most important party and

the entire processes centre for fulfilling and exceeding

customer needs and wants.

We value the customer centric decision making system

based on evidence rather than management by opinion.

Equal treatment of employees is recognized as a prominent

value of the company.

Existence of favourable working environment and

protection and respect for employees' rights, assurance

equity in reward system.

Employees are valued and recognized as the number one

asset of the company rather than as a liability.

Drivers towards continuous improvements in processes are

recognized as a value in the system.

Team effort is a valued feature of the organization rather

than chasing individual goal achievement.

Recognition and acceptance of social and environmental

responsibilities in all the operations of the company.

THE SHEER DEDICATION AND COMMITMENT BY MANY

TOWARDS THE ATTAINMENT OF THE PROMISED GOALS,

CONTRIBUTED TO THE ACHIEVEMENT OF YOUR

COMPANY'S SUCCESS SO FAR.

THE COMPLETION OF MANY PHASES OF THE GIGANTIC

PROJECTS THAT HAVE BEEN UNDERTAKEN BY YOUR

COMPANY REINFORCES SELF BELIEF AND INSPIRES

TOWARDS ACHIEVING THE GOAL OF YOUR COMPANY

BECOMING THE LARGEST PLAYER IN THE SALT INDUSTRY

IN SRI LANKA.

YOUR COMPANY, ENCAPSULATING THE UNIQUE

BUSINESS STRENGTHS IT IS ENDOWED WITH, MARCHES

ON, HAVING EMBARKED ON THE ROAD TO GAIN

SUPREMACY IN THE SALT INDUSTRY IN SRI LANKA IN

NEAR FUTURE ..........

FUTURE

NAME OF COMPANY

REGISTERED OFFICE

CONTACT DETAILS

COMPANY REGISTRATION NUMBER

DETAILS OF INCORPORATION

BOARD OF DIRECTORS

AUDITORS TO THE COMPANY

REGISTRARS TO THE COMPANY

SECRETARIES TO THE COMPANY

BANKERS TO THE COMPANY

Raigam Wayamba Salterns PLC

No. 23, Walukarama Road,

Colombo 03.

Tel: 011 2753340-1, 011 4886777

Fax: 011 2753342, E-mail: info@raigam.lk

Web: www.wayambasalterns.lk

PV 10922 PB/PQ

Incorporated as a Private Limited Liability Company under the

Companies Act No. 17 of 1982 on 15 June 2005 in Colombo, and

re-registered under the Companies Act No. 07 of 2007 on 15

January 2009, converted to a Public Company in December 2009.

Later the Company was listed on the Dirisavi Board of the

Colombo Stock Exchange on 29 April 2010 converting into a

Public Listed Company.

Dr. Ravindranath Liyanage

Mr. G.V.P.Ganaka Amarasinghe

Prof. S. P. P. Amaratunga

Mr. T. Dharmarajah

Mr. N. B. W. C. Prashantha

Mr. W.A.Upali Gunawardena

Mr. S. A. Wickramapala

Messrs. Ernst & Young

Chartered Accountants,

201, De Saram Place,

Colombo 10.

Merchant Bank of Sri Lanka PLC

Level 18, Bank of Ceylon Merchant Tower,

No. 28, St. Michael's Road,

Colombo 03.

U.K. Consultants (Pvt) Limited

36/6, Parakum Mawatha,

Nawala Road, Nugegoda.

Tel.: 011 2825072, 011 4873996

Sampath Bank PLC

People's Bank

CORPORATE INFORMATION

CONTENTS

04 05

05

06

08

11

15

17

20

22

24

25

27

28

29

30

31

32

52

56

57

Corporate Information

Message from Chairman

Board of Directors

Management Discussion and Financial Review

Corporate Governance

Annual Report of the Board of Directors

Statement of Directors' Responsibility

Report of the Audit Committee

Report of the Remuneration Committee

Risk Management

Auditors' Report

Balance Sheet

Income Statement

Statement of Changes in Equity

Cash Flow Statement

Notes to the Financial Statements

Investor Information

Notice of Meeting

Form of Proxy

NAME OF COMPANY

REGISTERED OFFICE

CONTACT DETAILS

COMPANY REGISTRATION NUMBER

DETAILS OF INCORPORATION

BOARD OF DIRECTORS

AUDITORS TO THE COMPANY

REGISTRARS TO THE COMPANY

SECRETARIES TO THE COMPANY

BANKERS TO THE COMPANY

Raigam Wayamba Salterns PLC

No. 23, Walukarama Road,

Colombo 03.

Tel: 011 2753340-1, 011 4886777

Fax: 011 2753342, E-mail: info@raigam.lk

Web: www.wayambasalterns.lk

PV 10922 PB/PQ

Incorporated as a Private Limited Liability Company under the

Companies Act No. 17 of 1982 on 15 June 2005 in Colombo, and

re-registered under the Companies Act No. 07 of 2007 on 15

January 2009, converted to a Public Company in December 2009.

Later the Company was listed on the Dirisavi Board of the

Colombo Stock Exchange on 29 April 2010 converting into a

Public Listed Company.

Dr. Ravindranath Liyanage

Mr. G.V.P.Ganaka Amarasinghe

Prof. S. P. P. Amaratunga

Mr. T. Dharmarajah

Mr. N. B. W. C. Prashantha

Mr. W.A.Upali Gunawardena

Mr. S. A. Wickramapala

Messrs. Ernst & Young

Chartered Accountants,

201, De Saram Place,

Colombo 10.

Merchant Bank of Sri Lanka PLC

Level 18, Bank of Ceylon Merchant Tower,

No. 28, St. Michael's Road,

Colombo 03.

U.K. Consultants (Pvt) Limited

36/6, Parakum Mawatha,

Nawala Road, Nugegoda.

Tel.: 011 2825072, 011 4873996

Sampath Bank PLC

People's Bank

CORPORATE INFORMATION

CONTENTS

04 05

05

06

08

11

15

17

20

22

24

25

27

28

29

30

31

32

52

56

57

Corporate Information

Message from Chairman

Board of Directors

Management Discussion and Financial Review

Corporate Governance

Annual Report of the Board of Directors

Statement of Directors' Responsibility

Report of the Audit Committee

Report of the Remuneration Committee

Risk Management

Auditors' Report

Balance Sheet

Income Statement

Statement of Changes in Equity

Cash Flow Statement

Notes to the Financial Statements

Investor Information

Notice of Meeting

Form of Proxy

MESSAGE FROM THE CHAIRMAN

continued as planned towards strategic directions of the

company and we are confident in achieving the aim of reducing

salt prices and capturing the mass market by converting

consumer usage habit from crystal salt to table salt which is the

global trend. The research and development activities have been

further extended to develop innovative, value added salt

products, through which a higher profitability and further

establishment of the brand with a wide range of products to

satisfy changing consumer needs are expected.

During the year the company continued with its development

plan in expansion of saltterns as well as increasing

manufacturing capacity of value added salt. The total capital

expenditure incurred by the group during the year amounted to

Rs. 130.3m . This includes purchase of alternative lands in

Puttalam area, construction of reservoirs and crystallization

tanks in existing and newly acquired lands in Puttalam area and

development activities including construction of new table salt

plant and saltern by the subsidiary company Southern Salt

Company (Pvt) Limited at Bata-atha in Hambanthota district.

The management took every effort to keep administrative and

other expenses to their minimum, assuring a higher level of

efficiency. It is highly usual to observe an increase in such

expenditure during any accelerated development drive with

expanded areas which needs a close monitoring mechanism.

Further investments were made in building brand capital with

short term and long term projects. Despite this situation the net

profit recorded an increase of Rs. 6.6m with the increased

revenue and the additional income from short term

investments.

Construction of the Bata-atha saltern and the first phase of

Puttalam project are nearing the completion. As expected the

company managed to collect a primary harvest in the Yala

season of 2011 which is a good indication of the success in

project. The construction of buildings for Bata-atha table salt

manufacturing plant also has reached its final level, and

installation of plant has commenced. We are confident that

commercial production can be commenced by the end of this

year. The construction of new Pure Vacuum Dried (PVD) plant at

Puttalam to manufacture salt by evaporating under controlled

environment ensuring an extra purity and productivity has been

launched. On behalf of the Board of Directors I am happy to

declare that despite issues delaying the allocation of leased

lands, the company has continued all development activities as

planned through alternatives. The shareholders' funds are

strictly utilized with its best advantages and the funds yet to

apply according to the investment plan have been invested in

secure sources until used for intended purposes.

PERFORMANCE

DEVELOPMENT

FUTURE PROSPECTSAs discussed in the Prospectus issued for the Initial Public

Offering took place in year 2010, the grand strategy of the

company is to establish three salt bases in the Southern, Eastern

and Wayamba provinces where centric independent

distribution networks will be set up within each salt base. These

effective and efficient distribution channels will benefit the

company in the future in terms of product affordability and

availability. As discussed in the Prospectus the company is

looking forward to integrate the Periyakarachchi Saltern

Development Project of Raigam Eastern Salt Company (Pvt)

Limited with the ongoing projects in Puttalam and Hambantota

districts, by implementing a suitable scheme of financing. The

Periyakarachchi Saltern Project consists a leasehold government

land in extent approximately 1,805 acres in the vicinity of the

famous Nilaweli tourist destination in the Eastern province. This

will be an ideal opportunity for a multi-faced venture.

Consumer confidence in our brand is the most valuable

strength of the company. I truly appreciate this trust. We could

not have achieved these satisfactory results if not for the

contribution of our energetic team of employees. I sincerely

thank you for your excellent commitment and effort. I take this

opportunity to place on record the invaluable guidance and

support of my fellow members in the Board. I greatly appreciate

the confidence placed on us by our shareholders and on behalf

of the Board of Directors I assure that we will reach greater

heights in the year ahead.

Dr. Ravindranath Liyanage

Chairman

August 16, 2011

APPRECIATION

06 07

MESSAGE FROM THE CHAIRMAN

continued as planned towards strategic directions of the

company and we are confident in achieving the aim of reducing

salt prices and capturing the mass market by converting

consumer usage habit from crystal salt to table salt which is the

global trend. The research and development activities have been

further extended to develop innovative, value added salt

products, through which a higher profitability and further

establishment of the brand with a wide range of products to

satisfy changing consumer needs are expected.

During the year the company continued with its development

plan in expansion of saltterns as well as increasing

manufacturing capacity of value added salt. The total capital

expenditure incurred by the group during the year amounted to

Rs. 130.3m . This includes purchase of alternative lands in

Puttalam area, construction of reservoirs and crystallization

tanks in existing and newly acquired lands in Puttalam area and

development activities including construction of new table salt

plant and saltern by the subsidiary company Southern Salt

Company (Pvt) Limited at Bata-atha in Hambanthota district.

The management took every effort to keep administrative and

other expenses to their minimum, assuring a higher level of

efficiency. It is highly usual to observe an increase in such

expenditure during any accelerated development drive with

expanded areas which needs a close monitoring mechanism.

Further investments were made in building brand capital with

short term and long term projects. Despite this situation the net

profit recorded an increase of Rs. 6.6m with the increased

revenue and the additional income from short term

investments.

Construction of the Bata-atha saltern and the first phase of

Puttalam project are nearing the completion. As expected the

company managed to collect a primary harvest in the Yala

season of 2011 which is a good indication of the success in

project. The construction of buildings for Bata-atha table salt

manufacturing plant also has reached its final level, and

installation of plant has commenced. We are confident that

commercial production can be commenced by the end of this

year. The construction of new Pure Vacuum Dried (PVD) plant at

Puttalam to manufacture salt by evaporating under controlled

environment ensuring an extra purity and productivity has been

launched. On behalf of the Board of Directors I am happy to

declare that despite issues delaying the allocation of leased

lands, the company has continued all development activities as

planned through alternatives. The shareholders' funds are

strictly utilized with its best advantages and the funds yet to

apply according to the investment plan have been invested in

secure sources until used for intended purposes.

PERFORMANCE

DEVELOPMENT

FUTURE PROSPECTSAs discussed in the Prospectus issued for the Initial Public

Offering took place in year 2010, the grand strategy of the

company is to establish three salt bases in the Southern, Eastern

and Wayamba provinces where centric independent

distribution networks will be set up within each salt base. These

effective and efficient distribution channels will benefit the

company in the future in terms of product affordability and

availability. As discussed in the Prospectus the company is

looking forward to integrate the Periyakarachchi Saltern

Development Project of Raigam Eastern Salt Company (Pvt)

Limited with the ongoing projects in Puttalam and Hambantota

districts, by implementing a suitable scheme of financing. The

Periyakarachchi Saltern Project consists a leasehold government

land in extent approximately 1,805 acres in the vicinity of the

famous Nilaweli tourist destination in the Eastern province. This

will be an ideal opportunity for a multi-faced venture.

Consumer confidence in our brand is the most valuable

strength of the company. I truly appreciate this trust. We could

not have achieved these satisfactory results if not for the

contribution of our energetic team of employees. I sincerely

thank you for your excellent commitment and effort. I take this

opportunity to place on record the invaluable guidance and

support of my fellow members in the Board. I greatly appreciate

the confidence placed on us by our shareholders and on behalf

of the Board of Directors I assure that we will reach greater

heights in the year ahead.

Dr. Ravindranath Liyanage

Chairman

August 16, 2011

APPRECIATION

06 07

DR. RAVINDRANATH LIYANAGECHAIRMAN / CEO

Dr. Ravindranath Liyanage is the founder and present Chairman

/ CEO of the Raigam Group and holds a B.Sc. Degree in Business

Administration from the University of Sri Jayewardenepura. His

MBA, specializing in Marketing was obtained from the

University of Colombo and later the Lacrosse University (USA)

conferred him the PhD in Management.

This was followed by numerous other Post Graduate and

professional qualifications such as Diploma in Marketing. Dr.

Liyanage is the first Fellow of the Institute of Marketing in Sri

Lanka and he holds membership of various professional bodies

including Institute of Gemology, Institute of HR Professionals,

and the Association of Accounting Technicians of Sri Lanka.

Starting his career in the private sector, he changed course in

mid career to public sector and changed again to end up

creating the well known, truly Sri Lankan FMCG company in the

land, The Kingdom of Raigam. He was the Platinum Award

winner of FCCISL Entrepreneur of the Year in 2005 and in the

same year won the much coveted CIMA Business Leader of the

Year, thus becoming the first ever entrepreneur to win both

these prestigious awards in the same year. He presently serves as

a Director of Puttalam Salt Limited. Dr. Liyanage is a Faculty

Board Member of the Management Faculty of the University of

Sri Jayewardenepura and a well known lecturer in Management

subjects in many universities and institutions.

BOARD OF DIRECTORS

PROF. S.P.P. AMARATUNGANON - EXECUTIVE DIRECTOR

Prof. Sampath Perera Priyantha Amaratunga, who is presently,

the Dean of the Faculty of Management Studies and

Commerce, University of Sri Jayewardenepura, obtained his B.A

Degree in Economics from the same university and his M.A. in

Economics from the University of Colombo.

Obtaining his M.Sc in Economics of Rural Development from the

Saga National University and Ph.D. in Economics of Rural

Development from Kogoshima National University in Japan,

Prof. Amaratunga counts over 20 years of service as an

academic at the University of Sri Jayewardenepura. He has

published many articles in international and national refereed

journals. In addition, he serves as a consultant to many reputed

companies among which are Sri Lankan Airlines, South Asia

Gateway Terminals and Ceylon Tobacco Company Ltd.

Prof. Amaratunga was the recipient of the prestigious Research

Excellence Award in 2002, awarded by the Keyshu Society of

Rural Economics, Japan, in addition to several other local and

international awards. He is considered as an expert in the field of

Economics with special reference to Rural Development, whose

attention is not focused solely on the university community, but

additionally, he has a wide array of interests and is actively

involved in the development of the country.

MR. G.V.P. GANAKA AMARASINGHEMANAGING DIRECTOR

Mr. Ganegama Vidana Pathiranage Ganaka Amarasinghe

commenced his career at Raigam as the Managing Director of

the group in early 1999. He obtained his first Degree in Business

Administration from the University of Sri Jayewardenepura and

became a Fellow Member of the Institute of Chartered

Accountants, Society of Certified Management Accountants

and The Association of Accounting Technicians of Sri Lanka. For

decades he has held senior positions in private and public

sectors, as Accountant, Financial Analyst, and Finance Manager.

Mr. Amarasinghe is a regular lecturer at the Institute for

Accounting Studies and is a visiting lecturer for many

professional and academic institutions. Presently, he serves as a

Member of the Governing Council of the Institute of Chartered

Accountants of Sri Lanka. He has served as a Member of the

Panel of Judges of National Exports Awards since 2005 and The

Presidential Awards for Travel and Tourism in 2007. He is also a

Director of Puttalam Salt Limited.

MR. T. DHARMARAJAHNON - EXECUTIVE DIRECTOR

Mr. Thiyagarajah Dharmarajah, the present President of the

Association of Accounting Technicians (AAT) of Sri Lanka,

graduated from the University of Sri Jayewardenepura

obtaining a B.Sc. Management (Sp) Degree and counts over 30

years experience in the disciplines of finance and accounting in

the public and private sectors. He is a partner of Amarasekara

and Company, a well recognized firm of Chartered Accountants

in Sri Lanka. Mr. Dharmarajah is well-known and respected in

the field of Finance and Accountancy, who has been in active

involvement in many accounting bodies of Sri Lanka. He holds

the fellow membership of the Institute of Chartered

Accountants of Sri Lanka, the Association of Accounting

Technicians of Sri Lanka, the Institute of Public Finance and

Development Accountancy.

In addition, he holds the Higher National Diploma in

Accountancy – Ceylon Technical College. He is also a member of

the Governing Council of the Institute of Chartered

Accountants of Sri Lanka (ICASL) and a member of the Council

of the University of Sri Jayewardenepura. Mr. Dharmarajah has

been lecturing in Finance and Accountancy for decades and he

is acknowledged as a respected lecturer who has contributed

immensely to produce thousands of qualified Accountants in Sri

Lanka.

DR. RAVINDRANATH LIYANAGECHAIRMAN / CEO

MR. G.V.P. GANAKA AMARASINGHEMANAGING DIRECTOR

MR. T. DHARMARAJAHNON-EXECUTIVE DIRECTOR

PROF. S.P.P. AMARATUNGANON-EXECUTIVE DIRECTOR

MR. W.A. UPALI GUNAWARDENANON-EXECUTIVE DIRECTOR

MR. N.B.W.C. PRASHANTHAEXECUTIVE DIRECTOR

MR. S.A. WICKRAMAPALANON-EXECUTIVE DIRECTOR

08 09

DR. RAVINDRANATH LIYANAGECHAIRMAN / CEO

Dr. Ravindranath Liyanage is the founder and present Chairman

/ CEO of the Raigam Group and holds a B.Sc. Degree in Business

Administration from the University of Sri Jayewardenepura. His

MBA, specializing in Marketing was obtained from the

University of Colombo and later the Lacrosse University (USA)

conferred him the PhD in Management.

This was followed by numerous other Post Graduate and

professional qualifications such as Diploma in Marketing. Dr.

Liyanage is the first Fellow of the Institute of Marketing in Sri

Lanka and he holds membership of various professional bodies

including Institute of Gemology, Institute of HR Professionals,

and the Association of Accounting Technicians of Sri Lanka.

Starting his career in the private sector, he changed course in

mid career to public sector and changed again to end up

creating the well known, truly Sri Lankan FMCG company in the

land, The Kingdom of Raigam. He was the Platinum Award

winner of FCCISL Entrepreneur of the Year in 2005 and in the

same year won the much coveted CIMA Business Leader of the

Year, thus becoming the first ever entrepreneur to win both

these prestigious awards in the same year. He presently serves as

a Director of Puttalam Salt Limited. Dr. Liyanage is a Faculty

Board Member of the Management Faculty of the University of

Sri Jayewardenepura and a well known lecturer in Management

subjects in many universities and institutions.

BOARD OF DIRECTORS

PROF. S.P.P. AMARATUNGANON - EXECUTIVE DIRECTOR

Prof. Sampath Perera Priyantha Amaratunga, who is presently,

the Dean of the Faculty of Management Studies and

Commerce, University of Sri Jayewardenepura, obtained his B.A

Degree in Economics from the same university and his M.A. in

Economics from the University of Colombo.

Obtaining his M.Sc in Economics of Rural Development from the

Saga National University and Ph.D. in Economics of Rural

Development from Kogoshima National University in Japan,

Prof. Amaratunga counts over 20 years of service as an

academic at the University of Sri Jayewardenepura. He has

published many articles in international and national refereed

journals. In addition, he serves as a consultant to many reputed

companies among which are Sri Lankan Airlines, South Asia

Gateway Terminals and Ceylon Tobacco Company Ltd.

Prof. Amaratunga was the recipient of the prestigious Research

Excellence Award in 2002, awarded by the Keyshu Society of

Rural Economics, Japan, in addition to several other local and

international awards. He is considered as an expert in the field of

Economics with special reference to Rural Development, whose

attention is not focused solely on the university community, but

additionally, he has a wide array of interests and is actively

involved in the development of the country.

MR. G.V.P. GANAKA AMARASINGHEMANAGING DIRECTOR

Mr. Ganegama Vidana Pathiranage Ganaka Amarasinghe

commenced his career at Raigam as the Managing Director of

the group in early 1999. He obtained his first Degree in Business

Administration from the University of Sri Jayewardenepura and

became a Fellow Member of the Institute of Chartered

Accountants, Society of Certified Management Accountants

and The Association of Accounting Technicians of Sri Lanka. For

decades he has held senior positions in private and public

sectors, as Accountant, Financial Analyst, and Finance Manager.

Mr. Amarasinghe is a regular lecturer at the Institute for

Accounting Studies and is a visiting lecturer for many

professional and academic institutions. Presently, he serves as a

Member of the Governing Council of the Institute of Chartered

Accountants of Sri Lanka. He has served as a Member of the

Panel of Judges of National Exports Awards since 2005 and The

Presidential Awards for Travel and Tourism in 2007. He is also a

Director of Puttalam Salt Limited.

MR. T. DHARMARAJAHNON - EXECUTIVE DIRECTOR

Mr. Thiyagarajah Dharmarajah, the present President of the

Association of Accounting Technicians (AAT) of Sri Lanka,

graduated from the University of Sri Jayewardenepura

obtaining a B.Sc. Management (Sp) Degree and counts over 30

years experience in the disciplines of finance and accounting in

the public and private sectors. He is a partner of Amarasekara

and Company, a well recognized firm of Chartered Accountants

in Sri Lanka. Mr. Dharmarajah is well-known and respected in

the field of Finance and Accountancy, who has been in active

involvement in many accounting bodies of Sri Lanka. He holds

the fellow membership of the Institute of Chartered

Accountants of Sri Lanka, the Association of Accounting

Technicians of Sri Lanka, the Institute of Public Finance and

Development Accountancy.

In addition, he holds the Higher National Diploma in

Accountancy – Ceylon Technical College. He is also a member of

the Governing Council of the Institute of Chartered

Accountants of Sri Lanka (ICASL) and a member of the Council

of the University of Sri Jayewardenepura. Mr. Dharmarajah has

been lecturing in Finance and Accountancy for decades and he

is acknowledged as a respected lecturer who has contributed

immensely to produce thousands of qualified Accountants in Sri

Lanka.

DR. RAVINDRANATH LIYANAGECHAIRMAN / CEO

MR. G.V.P. GANAKA AMARASINGHEMANAGING DIRECTOR

MR. T. DHARMARAJAHNON-EXECUTIVE DIRECTOR

PROF. S.P.P. AMARATUNGANON-EXECUTIVE DIRECTOR

MR. W.A. UPALI GUNAWARDENANON-EXECUTIVE DIRECTOR

MR. N.B.W.C. PRASHANTHAEXECUTIVE DIRECTOR

MR. S.A. WICKRAMAPALANON-EXECUTIVE DIRECTOR

08 09

MR. W.A. UPALI GUNAWARDENANON - EXECUTIVE DIRECTOR

Mr. Warusapperuma Arachchige Upali Gunawardena is a

Chartered Engineer by profession, the present Chairman of the

Institute of Incorporated Engineers, Sri Lanka and a Fellow of the

Institute of Engineers, Sri Lanka. He holds a Post – Graduate

Diploma in Engineering from the University of Moratuwa and

many other qualifications. After completing initial career in civil

engineering he gained over thirty five years experience with

significant exposure to the salt industry in Sri Lanka. During this

period he held several positions in the management of the

National Salt Corporation and Lanka Salt Ltd, including the

positions of Chief Engineer, General Manager and Consultant.

He was highly involved in the implementation of universal salt

iodization program at the inception in Sri Lanka, and installed

the first Salt Iodization plant in Palavi Saltern donated by

UNICEF. Eng. Upali Gunawardena handled a special assignment

on behalf of the UNICEF in February/March 2005. As a

consultant to the UNICEF he was mandated to assess the

damages to the salterns in the country as a consequence of the

Tsunami. He also participated in programs in managing,

monitoring and controlling of iodine deficiency disorders,

organized by WHO in India, Nepal and Thailand.

MR. S.A. WICKRAMAPALANON - EXECUTIVE DIRECTOR

Mr. Subasinghe Arachchige Wickramapala is currently the

Chairman of Co-operative Leasing Company Ltd and Vice-

Chairman of Co-operative Insurance Company Ltd. He counts

over 35 years experience in the public sector with considerable

exposure to rural banking and co-operatives in Sri Lanka. Mr.

Wickramapala served as an Assistant Commissioner, in the

Department of Co-operative Development of the Government

of Sri Lanka, until 2004. He has also functioned as a Director of

Sri Lanka Co-operative Rural Bank Federation Ltd and as its

Salt Industry in Sri Lanka is a perfect example for inelastic

demand. Though the country is surrounded by the sea and most

of the coastal areas are suitable for salt crystallization, still a

considerable quantity of salt is imported in to Sri Lanka to fill the

gap. Main reasons for this situation was the reluctance of

investment in salt manufacturing ventures due to unstable

economic situation, security issues and the competition from

low priced imports that prevailed for decades. During the recent

years more emphasis can be observed in this industry following

end of the conflict and implementation of favourable fiscal

policies. A remarkable change was observed in consumer

behavior keeping in to world trend of replacing conventional

crystal salt by value added salt like table salt. The main challenge

faced by the industry is the unpredictable changing weather

pattern experienced after the Tsunami.

During the year under review the company continued its

development drive in expansion of salt manufacturing capacity

and refinery which includes new saltern developments,

construction of new factory and also modernization of the

existing facilities strategically located in Puttalam and

Hambantota Districts. Development projects in Hambantota

District are carried out under the wholly owned subsidiary,

Southern Salt Company (Pvt) Limited.

The company continued three saltern development projects

during the year. Objective of these projects is sourcing of raw salt,

the main raw material for manufacture of value added salt

internally. The internal integration of raw material supply is much

cost effective than the present external sources. The long term

strategy of the company is to be the leader in the value added salt

market in Sri Lanka by granting the price advantage to customers

through effective cost management measures. The status of

saltern development activities are detailed below.

DEVELOPMENT DRIVE

DEVELOPMENT OF SALTERNS

MANAGEMENT DISCUSSION

AND FINANCIAL

REVIEW

MR. N.B.W.C. PRASHANTHAEXECUTIVE DIRECTOR

Mr. Nanayakkarawasam Bataduwa Widanalage Chandana

Prashantha is the Director Finance of the company. He holds

B.Sc. (Special) Degree in Business Administration from the

University of Sri Jayewardenepura. He is also a Member of the

Institute of Chartered Accountants of Sri Lanka (ICASL). After

completing his internship at Ernst & Young in 2000, he served in

a few institutions in Sri Lanka and overseas in the field of finance

and accounting. Thereafter joining The Kingdom of Raigam as

the Financial Controller, he was appointed as Director-Finance

of the Raigam Group on 01st January 2006 after holding several

positions in Raigam corporate ladder.

April

0

20

100

60

140

40

120

80

160

180

Oct

ober

July

Januar

y

May

Nove

mber

August

Febru

ary

June

Dec

ember

Septe

mber

Mar

ch

Rai

n F

all i

n m

m

FLUCTUATION OF RAIN FALL IN 2010/11

Month

Chairman, from 2004-2009, and also the Chairman of

Wayamba Co-operative Rural Bank Union Ltd from 1996-

2009. He is a director of Puttalam Salt Ltd.

During his tenure as Managing Director of Puttalam Salt Ltd

(PSL) from 1997 to 2003, he contributed greatly, overseeing

the transition of Sri Lanka Salt Corporation to Puttalam Salt

Limited, for PSL to become one of the most profitable

companies.

10 11

MR. W.A. UPALI GUNAWARDENANON - EXECUTIVE DIRECTOR

Mr. Warusapperuma Arachchige Upali Gunawardena is a

Chartered Engineer by profession, the present Chairman of the

Institute of Incorporated Engineers, Sri Lanka and a Fellow of the

Institute of Engineers, Sri Lanka. He holds a Post – Graduate

Diploma in Engineering from the University of Moratuwa and

many other qualifications. After completing initial career in civil

engineering he gained over thirty five years experience with

significant exposure to the salt industry in Sri Lanka. During this

period he held several positions in the management of the

National Salt Corporation and Lanka Salt Ltd, including the

positions of Chief Engineer, General Manager and Consultant.

He was highly involved in the implementation of universal salt

iodization program at the inception in Sri Lanka, and installed

the first Salt Iodization plant in Palavi Saltern donated by

UNICEF. Eng. Upali Gunawardena handled a special assignment

on behalf of the UNICEF in February/March 2005. As a

consultant to the UNICEF he was mandated to assess the

damages to the salterns in the country as a consequence of the

Tsunami. He also participated in programs in managing,

monitoring and controlling of iodine deficiency disorders,

organized by WHO in India, Nepal and Thailand.

MR. S.A. WICKRAMAPALANON - EXECUTIVE DIRECTOR

Mr. Subasinghe Arachchige Wickramapala is currently the

Chairman of Co-operative Leasing Company Ltd and Vice-

Chairman of Co-operative Insurance Company Ltd. He counts

over 35 years experience in the public sector with considerable

exposure to rural banking and co-operatives in Sri Lanka. Mr.

Wickramapala served as an Assistant Commissioner, in the

Department of Co-operative Development of the Government

of Sri Lanka, until 2004. He has also functioned as a Director of

Sri Lanka Co-operative Rural Bank Federation Ltd and as its

Salt Industry in Sri Lanka is a perfect example for inelastic

demand. Though the country is surrounded by the sea and most

of the coastal areas are suitable for salt crystallization, still a

considerable quantity of salt is imported in to Sri Lanka to fill the

gap. Main reasons for this situation was the reluctance of

investment in salt manufacturing ventures due to unstable

economic situation, security issues and the competition from

low priced imports that prevailed for decades. During the recent

years more emphasis can be observed in this industry following

end of the conflict and implementation of favourable fiscal

policies. A remarkable change was observed in consumer

behavior keeping in to world trend of replacing conventional

crystal salt by value added salt like table salt. The main challenge

faced by the industry is the unpredictable changing weather

pattern experienced after the Tsunami.

During the year under review the company continued its

development drive in expansion of salt manufacturing capacity

and refinery which includes new saltern developments,

construction of new factory and also modernization of the

existing facilities strategically located in Puttalam and

Hambantota Districts. Development projects in Hambantota

District are carried out under the wholly owned subsidiary,

Southern Salt Company (Pvt) Limited.

The company continued three saltern development projects

during the year. Objective of these projects is sourcing of raw salt,

the main raw material for manufacture of value added salt

internally. The internal integration of raw material supply is much

cost effective than the present external sources. The long term

strategy of the company is to be the leader in the value added salt

market in Sri Lanka by granting the price advantage to customers

through effective cost management measures. The status of

saltern development activities are detailed below.

DEVELOPMENT DRIVE

DEVELOPMENT OF SALTERNS

MANAGEMENT DISCUSSION

AND FINANCIAL

REVIEW

MR. N.B.W.C. PRASHANTHAEXECUTIVE DIRECTOR

Mr. Nanayakkarawasam Bataduwa Widanalage Chandana

Prashantha is the Director Finance of the company. He holds

B.Sc. (Special) Degree in Business Administration from the

University of Sri Jayewardenepura. He is also a Member of the

Institute of Chartered Accountants of Sri Lanka (ICASL). After

completing his internship at Ernst & Young in 2000, he served in

a few institutions in Sri Lanka and overseas in the field of finance

and accounting. Thereafter joining The Kingdom of Raigam as

the Financial Controller, he was appointed as Director-Finance

of the Raigam Group on 01st January 2006 after holding several

positions in Raigam corporate ladder.

April

0

20

100

60

140

40

120

80

160

180

Oct

ober

July

Januar

y

May

Nove

mber

August

Febru

ary

June

Dec

ember

Septe

mber

Mar

ch

Rai

n F

all i

n m

m

FLUCTUATION OF RAIN FALL IN 2010/11

Month

Chairman, from 2004-2009, and also the Chairman of

Wayamba Co-operative Rural Bank Union Ltd from 1996-

2009. He is a director of Puttalam Salt Ltd.

During his tenure as Managing Director of Puttalam Salt Ltd

(PSL) from 1997 to 2003, he contributed greatly, overseeing

the transition of Sri Lanka Salt Corporation to Puttalam Salt

Limited, for PSL to become one of the most profitable

companies.

10 11

Construction of Puttalam Palavi saltern was completed during

the year. Development of the Hambantota Bata-atha saltern is

in its final stage. During the Yala season of 2011 a test harvest

was carried out successfully. Development of a saltern is a long

term process. After completion of civil construction it takes

about two to three years for seasoning crystallization areas and

also to collect a sufficient volume of brine. While the procedure

for acquisition of Vanathavilluwa government land on a long

term lease is continued, the company commenced to acquire

suitable alternative lands in order to avoid possible delays in

completion of the total project.

LOCATION STATUS AT THE BEGINNING OF THE

YEAR

NEW ACQUISITIONS

STATUS AT THE END OF THE YEAR

PLANNED

Puttalam – Palavi Saltern 110 acresunder construction

Nil 110 acrescompleted

110 acres

Puttalam Saltern (alternative for

Vanathavilluwa)

Not commenced 35 acres 35 acresunder construction

325 acres

Hambantota – Bata-atha Saltern

204 acres Nil 204 acresnearing completion

204 acres

Total 314 acres 35 acres 349 acres 639 acres

PRODUCTION FACILITIES

One of the main objectives of the company is to capture the

domestic salt market through value added salt products.

Additionally the company is engaged in supplying conventional

crystal salt using the excess capacity. Therefore the main focus

in production strategy is to develop the production capacity in

value added products. Production facilities of the company and

capital investment during the year in this area are detailed

below.

LOCATION STATUS AT THE BEGINNING OF THE YEAR

DEVELOPMENTS DURING THE YEAR

CAPITAL EXPENDITURE DURING THE YEAR (Rs.)

Palavi Table Salt Plant

Completed Process improvement 27,977,613

Palavi Pure Vacuum Dried Palnt

Planning stage Machines under fabrication 11,274,013

Bata-atha Salt Plant

Planning stage Machine installation started 15,336,113

MARKETING DRIVE

PROCESSED SALT

The marketing drive of the company ensures from designing

right quality products to satisfy varying needs of consumers to

availability of same wherever they are demanded. The company

operates with an island wide distribution network which reaches

over 80% of the retail, wholesale and modern trade outlets as

well as industrial users in the country.

In addition to introduction of new products, the company

launched several promotional campaigns during the year.

As a result of gradual conversion of consumer - usage habit from

conventional crystal salt to table salt and other value added

products, a high potential can be expected in processed salt

market. The demand for refined table salt which was limited to

urban areas has now spread to rural markets significantly. The

main barrier to convert the mass market in to table salt is the large

price gap that prevails between table salt and crystal salt in our

market. Our aim is to reduce salt prices with cost advantages

through own salterns and benefits of economies of scale in order

to facilitate a speedy conversion of consumers to value added

salt, where the company is strategically strong.

BRANDS

HUMAN RESOURCES

The company believes in brand strength. Therefore

establishment of brand is one of the priority tasks given to the

marketing division. This effort has been endorsed by creating a

market segment to demand salt in its brand name creating an

additional value to the product. Moving forward the company

introduced the word “Esi – Salt” to conventional common table

salt. Today “Esi” is a unique term known to consumers to

demand company products.

Number of employees at the end of the year under review was

204 compared to 175 in the previous year. Majority of the

employees are engaged in either in field activities or production

under extremely difficult conditions. The company takes every

possible measure in order to address their various needs and

maintain a pleasant working environment.

The company recorded a turnover of Rs. 297.4 million during

the year with an increase of Rs 37.8 million compared to the

previous year. This is an increase of 14.5%. Despite the

significant upward fluctuation experienced in turnover during

the year 2009, the company has maintained its upward trend in

growth during the last five years period. This kind of periodic

fluctuations are common in industries like agriculture and salt

due to high dependence on weather. Due to the satisfactory

national harvest in the Yala season of 2010, the players in salt

market had to adjust their prices downward to face the

competition. Despite bad weather continued thereafter the

unfavourable market conditions including lower price levels in

wholesale market were continued. However the increase in

turnover during the year represents an increase in volume.

The subsidiary company had not commenced commercial

production up to the end of year.

PERFORMANCETURNOVER

12 13

Construction of Puttalam Palavi saltern was completed during

the year. Development of the Hambantota Bata-atha saltern is

in its final stage. During the Yala season of 2011 a test harvest

was carried out successfully. Development of a saltern is a long

term process. After completion of civil construction it takes

about two to three years for seasoning crystallization areas and

also to collect a sufficient volume of brine. While the procedure

for acquisition of Vanathavilluwa government land on a long

term lease is continued, the company commenced to acquire

suitable alternative lands in order to avoid possible delays in

completion of the total project.

LOCATION STATUS AT THE BEGINNING OF THE

YEAR

NEW ACQUISITIONS

STATUS AT THE END OF THE YEAR

PLANNED

Puttalam – Palavi Saltern 110 acresunder construction

Nil 110 acrescompleted

110 acres

Puttalam Saltern (alternative for

Vanathavilluwa)

Not commenced 35 acres 35 acresunder construction

325 acres

Hambantota – Bata-atha Saltern

204 acres Nil 204 acresnearing completion

204 acres

Total 314 acres 35 acres 349 acres 639 acres

PRODUCTION FACILITIES

One of the main objectives of the company is to capture the

domestic salt market through value added salt products.

Additionally the company is engaged in supplying conventional

crystal salt using the excess capacity. Therefore the main focus

in production strategy is to develop the production capacity in

value added products. Production facilities of the company and

capital investment during the year in this area are detailed

below.

LOCATION STATUS AT THE BEGINNING OF THE YEAR

DEVELOPMENTS DURING THE YEAR

CAPITAL EXPENDITURE DURING THE YEAR (Rs.)

Palavi Table Salt Plant

Completed Process improvement 27,977,613

Palavi Pure Vacuum Dried Palnt

Planning stage Machines under fabrication 11,274,013

Bata-atha Salt Plant

Planning stage Machine installation started 15,336,113

MARKETING DRIVE

PROCESSED SALT

The marketing drive of the company ensures from designing

right quality products to satisfy varying needs of consumers to

availability of same wherever they are demanded. The company

operates with an island wide distribution network which reaches

over 80% of the retail, wholesale and modern trade outlets as

well as industrial users in the country.

In addition to introduction of new products, the company

launched several promotional campaigns during the year.

As a result of gradual conversion of consumer - usage habit from

conventional crystal salt to table salt and other value added

products, a high potential can be expected in processed salt

market. The demand for refined table salt which was limited to

urban areas has now spread to rural markets significantly. The

main barrier to convert the mass market in to table salt is the large

price gap that prevails between table salt and crystal salt in our

market. Our aim is to reduce salt prices with cost advantages

through own salterns and benefits of economies of scale in order

to facilitate a speedy conversion of consumers to value added

salt, where the company is strategically strong.

BRANDS

HUMAN RESOURCES

The company believes in brand strength. Therefore

establishment of brand is one of the priority tasks given to the

marketing division. This effort has been endorsed by creating a

market segment to demand salt in its brand name creating an

additional value to the product. Moving forward the company

introduced the word “Esi – Salt” to conventional common table

salt. Today “Esi” is a unique term known to consumers to

demand company products.

Number of employees at the end of the year under review was

204 compared to 175 in the previous year. Majority of the

employees are engaged in either in field activities or production

under extremely difficult conditions. The company takes every

possible measure in order to address their various needs and

maintain a pleasant working environment.

The company recorded a turnover of Rs. 297.4 million during

the year with an increase of Rs 37.8 million compared to the

previous year. This is an increase of 14.5%. Despite the

significant upward fluctuation experienced in turnover during

the year 2009, the company has maintained its upward trend in

growth during the last five years period. This kind of periodic

fluctuations are common in industries like agriculture and salt

due to high dependence on weather. Due to the satisfactory

national harvest in the Yala season of 2010, the players in salt

market had to adjust their prices downward to face the

competition. Despite bad weather continued thereafter the

unfavourable market conditions including lower price levels in

wholesale market were continued. However the increase in

turnover during the year represents an increase in volume.

The subsidiary company had not commenced commercial

production up to the end of year.

PERFORMANCETURNOVER

12 13

PROFITABILITY

Net profit after taxation for the year was Rs. 57.8 million

compared to the corresponding value recorded for the previous

year Rs. 51.2 million. This was an increase of 12.8% compared to

the previous year. The subsidiary company is yet to commence

commercial operations, and therefore the revenue consists of

the sales and other income of the parent company only. An

increase has been recorded in marketing and administrative

expenses due to the accelerated expansion drive. As explained in

the previous year it's a natural phenomenon during the

development stage of any business. However the interest

income and the controlled cost of production have been resulted

in the positive results during the year.

The Group's Earnings per share (EPS) stood at Rs. 0.21 for the

financial year under review. This is a 16.6% increase over the

previous year's EPS. Further growth in the EPS can be anticipated

when the new capital raised at the Initial Public Offering (IPO)

starts yielding through the investments that have been planned

out in near future.

EARNINGS PER SHARE

FINANCIAL POSITION

MARKET PRICE AND DIVIDEND

MOVING FORWARD

Net assets value of the Group was grown by Rs. 57.8 million

during the year. The investment in capital assets during the year

was Rs. 130.3 million compared to the previous year's

investment of Rs. 46.3 million. The cash and cash equivalent

value at the beginning of the year shows an unusual value of Rs.

1,103.3 million due to the over subscribed funds at the IPO

launched in March 2010. The corresponding liability is shown

under trade and other payables. Funds raised from the IPO were

invested in medium term fixed deposits until they are used for

intended purposes. Borrowing at the end of the year includes

bank overdrafts for the value of Rs. 108.2 million since the

developments were funded through short term facilities

negotiated at attractive rates, until the fixed deposits are

matured. The value of fixed deposits on 31 March 2011reported

to Rs. 150 million.

Share price of the company behaved in a stable manner during

the year recording Rs.5.10 and Rs. 3.70 the highest and lowest

respectively. Considering the Group's earning per share Rs.

0.21 for the year, the directors have recommended a final

dividend of Rs. 0.12 per share, to be paid in September 2011.

The company expects to open the two salterns at Puttalam and

Bata-atha for commercial production in the latter part of

2011/12. The initial harvest of salt from these projects, though it

is not at full capacity will make a substantial contribution to

reduce cost of production of table salt and be more competitive

in the market. Further the new salt refinery installed at the Bata-

atha Industrial Zone is to be commissioned soon. The distinct

advantage of this project is the benefit on transport cost

connected with catering to the demand in Southern province.

And also the total salt requirement is self generated. The

vacuum evaporation salt plant is under construction at Palavi,

Puttalam. Year 2011/ 12 is expected to be a milestone year in

the company's development drive as four major projects are to

be completed shortly. Blessings of nature with weather

conditions favourable to the industry will be a definite success

factor.

TURNOVER (Rs. Mn.)

0

2007 2008 2009 2010 2011

200

100

300

400

50

250

150

350

450

NAME OF THE DIRECTOR Ind

Dr. Ravindranath Liyanage √ - - 12

Mr. G.V.P. Ganaka Amarasinghe √ - - 12

Mr. N.B.W.C. Prashantha √ - - 12

Prof. S.P.P. Amaratunga - √ √ 11

Mr. T. Dharmarajah - √ √ 12

Mr. S.A. Wickramapala - √ √ 10

Mr. W.A. Upali Gunawardena - √ √ 11

EX

EC

UTIV

E

NO

N-E

XEC

UTIV

E

IND

EPEN

DEN

T

NO

. O

F M

EETIN

GS

The Board of Directors is responsible for the governance of the

company, in a manner that protects the rights and interests of

the shareholders where corporate governance practices come

into play in the company. Corporate governance is understood

as the manner in which a corporate entity directs and controls

its common affairs with respect to all stakeholders. There is no

single model or set of structures which manifest the concept of

good corporate governance. It is in effect the rules and

regulations that govern the relationship between all

stakeholders in the system.

The Board meets once every month. Its principal focus is the

overall strategic direction, development and control of the

company. The Board of Directors of the company comprises

seven (07) Directors, consisting three (03) Executive Directors

and four (04) Non- Executive Independent Directors. Out of the

twelve Board Meetings held for the financial year ending 31

March 2011, the Directors' attendance has been shown in the

below table.

COMPOSITION OF THE BOARD

CORPORATEGOVERNANCE

STRATEGIC DIRECTION ANDCORPORATE STRUCTURE

INTERNAL CONTROL AND RISK MANAGEMENT

The company strongly pursues the direction identified and laid

down in its Strategic Plan taking into account the Current

Business and Political Environment. The company has recently

benefited form initiatives such as Information Technology,

Human Resources and Sourcing.

The Board is responsible for the company's systems of the

internal control and risk management and for reviewing the

effectiveness of those systems. Such systems are designed to

14 15

PROFIT AFTER TAX (Rs. Mn.)

2007

0

80

160

20

100

180

40

120

200

60

140

2008 2009 2010 2011

PROFITABILITY

Net profit after taxation for the year was Rs. 57.8 million

compared to the corresponding value recorded for the previous

year Rs. 51.2 million. This was an increase of 12.8% compared to

the previous year. The subsidiary company is yet to commence

commercial operations, and therefore the revenue consists of

the sales and other income of the parent company only. An

increase has been recorded in marketing and administrative

expenses due to the accelerated expansion drive. As explained in

the previous year it's a natural phenomenon during the

development stage of any business. However the interest

income and the controlled cost of production have been resulted

in the positive results during the year.

The Group's Earnings per share (EPS) stood at Rs. 0.21 for the

financial year under review. This is a 16.6% increase over the

previous year's EPS. Further growth in the EPS can be anticipated

when the new capital raised at the Initial Public Offering (IPO)

starts yielding through the investments that have been planned

out in near future.

EARNINGS PER SHARE

FINANCIAL POSITION

MARKET PRICE AND DIVIDEND

MOVING FORWARD

Net assets value of the Group was grown by Rs. 57.8 million

during the year. The investment in capital assets during the year

was Rs. 130.3 million compared to the previous year's

investment of Rs. 46.3 million. The cash and cash equivalent

value at the beginning of the year shows an unusual value of Rs.

1,103.3 million due to the over subscribed funds at the IPO

launched in March 2010. The corresponding liability is shown

under trade and other payables. Funds raised from the IPO were

invested in medium term fixed deposits until they are used for

intended purposes. Borrowing at the end of the year includes

bank overdrafts for the value of Rs. 108.2 million since the

developments were funded through short term facilities

negotiated at attractive rates, until the fixed deposits are

matured. The value of fixed deposits on 31 March 2011reported

to Rs. 150 million.

Share price of the company behaved in a stable manner during

the year recording Rs.5.10 and Rs. 3.70 the highest and lowest

respectively. Considering the Group's earning per share Rs.

0.21 for the year, the directors have recommended a final

dividend of Rs. 0.12 per share, to be paid in September 2011.

The company expects to open the two salterns at Puttalam and

Bata-atha for commercial production in the latter part of

2011/12. The initial harvest of salt from these projects, though it

is not at full capacity will make a substantial contribution to

reduce cost of production of table salt and be more competitive

in the market. Further the new salt refinery installed at the Bata-

atha Industrial Zone is to be commissioned soon. The distinct

advantage of this project is the benefit on transport cost

connected with catering to the demand in Southern province.

And also the total salt requirement is self generated. The

vacuum evaporation salt plant is under construction at Palavi,

Puttalam. Year 2011/ 12 is expected to be a milestone year in

the company's development drive as four major projects are to

be completed shortly. Blessings of nature with weather

conditions favourable to the industry will be a definite success

factor.

TURNOVER (Rs. Mn.)

0

2007 2008 2009 2010 2011

200

100

300

400

50

250

150

350

450

NAME OF THE DIRECTOR Ind

Dr. Ravindranath Liyanage √ - - 12

Mr. G.V.P. Ganaka Amarasinghe √ - - 12

Mr. N.B.W.C. Prashantha √ - - 12

Prof. S.P.P. Amaratunga - √ √ 11

Mr. T. Dharmarajah - √ √ 12

Mr. S.A. Wickramapala - √ √ 10

Mr. W.A. Upali Gunawardena - √ √ 11

EX

EC

UTIV

E

NO

N-E

XEC

UTIV

E

IND

EPEN

DEN

T

NO

. O

F M

EETIN

GS

The Board of Directors is responsible for the governance of the

company, in a manner that protects the rights and interests of

the shareholders where corporate governance practices come

into play in the company. Corporate governance is understood

as the manner in which a corporate entity directs and controls

its common affairs with respect to all stakeholders. There is no

single model or set of structures which manifest the concept of

good corporate governance. It is in effect the rules and

regulations that govern the relationship between all

stakeholders in the system.

The Board meets once every month. Its principal focus is the

overall strategic direction, development and control of the

company. The Board of Directors of the company comprises

seven (07) Directors, consisting three (03) Executive Directors

and four (04) Non- Executive Independent Directors. Out of the

twelve Board Meetings held for the financial year ending 31

March 2011, the Directors' attendance has been shown in the

below table.

COMPOSITION OF THE BOARD

CORPORATEGOVERNANCE

STRATEGIC DIRECTION ANDCORPORATE STRUCTURE

INTERNAL CONTROL AND RISK MANAGEMENT

The company strongly pursues the direction identified and laid

down in its Strategic Plan taking into account the Current

Business and Political Environment. The company has recently

benefited form initiatives such as Information Technology,

Human Resources and Sourcing.

The Board is responsible for the company's systems of the

internal control and risk management and for reviewing the

effectiveness of those systems. Such systems are designed to

14 15

PROFIT AFTER TAX (Rs. Mn.)

2007

0

80

160

20

100

180

40

120

200

60

140

2008 2009 2010 2011

manage, rather than eliminate, the risk of failure to achieve

business objectives. Any system can provide only reasonable and

not absolute assurance against material misstatements or losses.

It is our policy for all Directors to attend the AGM, if at all

possible. Whilst, this may not always be achievable, under

normal circumstances this means the Chairman and Directors

are available to answer questions.

Established procedures ensure the timely release of share price

sensitive information and the publication of financial results and

regulatory financial statements.

To reinforce our commitment to our policy to achieve best

practice in our standards of business integrity Raigam Wayamba

Salterns PLC has communicated its Best Business Practices across

the company.

It now better reflects Raigam Wayamba Salterns PLC's growing

operations and the increasing expectations in the areas of

corporate governance and business practice standards.

Members:

Mr. T. Dharmarajah (Head)

Prof. S.P.P. Amaratunga

Mr. W.A.U. Gunawardena

The Audit Committee is comprised of three (03) Non-Executive

Directors of the Board, headed by Mr. Dharmarajah. The Audit

Committee closely examines all internal audit reports and

ensures appropriate follow up action is taken on the comments

and recommendations made in these reports.

Members:

Mr. W.A.U. Gunawardena (Head)

Prof. S.P.P. Amaratunga

Mr. S.A. Wickramapala

This committee recommends to the Board of Directors of the

company the remuneration payable to the executive staff in

managerial category and above. The Board of Directors will

make the final determination upon consideration of such

recommendations. Prior to the appointment of the

Remuneration Committee the matters pertaining to the

remuneration was determined by the Board of Directors of the

RELATIONSHIP WITH SHAREHOLDERS

BEST BUSINESS PRACTICES

COMMITTEESBOARD AUDIT COMMITTEE

REMUNERATION COMMITTEE

company. The remuneration of the Executive Directors will be

based on market rates and the remuneration of the Non

Executive Directors will be an amount per Board sitting.

The Board makes every endeavor to ensure that the business

complies with all laws and regulations.

The Board of Directors requires that financial statements of the

company are prepared in accordance with the Sri Lanka

Accounting Standards and in accordance with the requirements

of the Colombo Stock Exchange. Maximum information is

provided to shareholders and full disclosure is made subject only

to any sensitive information, which could directly impact the

business of the company.

DISCLOSURE OF INFORMATION AND COMPLIANCE

The Directors of Raigam Wayamba Salterns PLC have pleasure

in presenting to the Members, their Report together with the

Audited Financial Statements of the company for the year

ended 31 March 2011 and the Auditor's Report thereon.

The details set out herein provide pertinent information

required by the Companies Act No. 7 of 2007, Listing Rules of

the Colombo Stock Exchange, Securities Exchange Commission

and are guided by recommended best Accounting Practices.

The Turnover of the company was Rs: 297,411,339 and a

composition of Revenue is given in Note 03 to the financial

statements.

For the year ended 31 March,

2011 2010

Rs. Rs.

Turnover 297,411,339 259,531,518

Gross Profit 136,002,558 115,952,873

Profit Before Tax 64,161,794 51,256,027

Profit After Tax 57,865,492 51,256,027

There were no new investments during the year. However cash

injections made to the company's fully owned subsidiary;

Southern Salt Company (Pvt) Ltd was converted to equity under

the subsidiary which has been accounted as Investment in

subsidiary in the company's financial statements, amounting to

Rs. 50 M.

The total capital expenditure incurred on the acquisition of

during the financial year

amounted to Rs: 130,359,317 (2010 – Rs. 46,321,598), out of

which expenditure on Salterns and Field Development amounts

to Rs. 35,555,746 (2010 - Rs. 17,869,239). Further information

relating to the movement of is

given in Note 04 to the financial statements. Capital

expenditure has been financed by either long or short term

borrowing and or internally generated funds.

The Stated Capital of the company as at 31 March 2011 was Rs:

604,414,640. Details of the Stated Capital are given in Note 09

to the financial statements.

OPERATIONAL REVIEWTURNOVER

FINANCIAL RESULTS

INVESTMENTS

PROPERTY, PLANT AND EQUIPMENT

STATED CAPITAL

property, plant and equipment

property, plant and equipment

ANNUAL REPORT OF

THE BOARD OFDIRECTORS

16 17

manage, rather than eliminate, the risk of failure to achieve

business objectives. Any system can provide only reasonable and

not absolute assurance against material misstatements or losses.

It is our policy for all Directors to attend the AGM, if at all

possible. Whilst, this may not always be achievable, under

normal circumstances this means the Chairman and Directors

are available to answer questions.

Established procedures ensure the timely release of share price

sensitive information and the publication of financial results and

regulatory financial statements.

To reinforce our commitment to our policy to achieve best

practice in our standards of business integrity Raigam Wayamba

Salterns PLC has communicated its Best Business Practices across

the company.

It now better reflects Raigam Wayamba Salterns PLC's growing

operations and the increasing expectations in the areas of

corporate governance and business practice standards.

Members:

Mr. T. Dharmarajah (Head)

Prof. S.P.P. Amaratunga

Mr. W.A.U. Gunawardena

The Audit Committee is comprised of three (03) Non-Executive

Directors of the Board, headed by Mr. Dharmarajah. The Audit

Committee closely examines all internal audit reports and

ensures appropriate follow up action is taken on the comments

and recommendations made in these reports.

Members:

Mr. W.A.U. Gunawardena (Head)

Prof. S.P.P. Amaratunga

Mr. S.A. Wickramapala

This committee recommends to the Board of Directors of the

company the remuneration payable to the executive staff in

managerial category and above. The Board of Directors will

make the final determination upon consideration of such

recommendations. Prior to the appointment of the

Remuneration Committee the matters pertaining to the

remuneration was determined by the Board of Directors of the

RELATIONSHIP WITH SHAREHOLDERS

BEST BUSINESS PRACTICES

COMMITTEESBOARD AUDIT COMMITTEE

REMUNERATION COMMITTEE

company. The remuneration of the Executive Directors will be

based on market rates and the remuneration of the Non

Executive Directors will be an amount per Board sitting.

The Board makes every endeavor to ensure that the business

complies with all laws and regulations.

The Board of Directors requires that financial statements of the

company are prepared in accordance with the Sri Lanka

Accounting Standards and in accordance with the requirements

of the Colombo Stock Exchange. Maximum information is

provided to shareholders and full disclosure is made subject only

to any sensitive information, which could directly impact the

business of the company.

DISCLOSURE OF INFORMATION AND COMPLIANCE

The Directors of Raigam Wayamba Salterns PLC have pleasure

in presenting to the Members, their Report together with the

Audited Financial Statements of the company for the year

ended 31 March 2011 and the Auditor's Report thereon.

The details set out herein provide pertinent information

required by the Companies Act No. 7 of 2007, Listing Rules of

the Colombo Stock Exchange, Securities Exchange Commission

and are guided by recommended best Accounting Practices.

The Turnover of the company was Rs: 297,411,339 and a

composition of Revenue is given in Note 03 to the financial

statements.

For the year ended 31 March,

2011 2010

Rs. Rs.

Turnover 297,411,339 259,531,518

Gross Profit 136,002,558 115,952,873

Profit Before Tax 64,161,794 51,256,027

Profit After Tax 57,865,492 51,256,027

There were no new investments during the year. However cash

injections made to the company's fully owned subsidiary;

Southern Salt Company (Pvt) Ltd was converted to equity under

the subsidiary which has been accounted as Investment in

subsidiary in the company's financial statements, amounting to

Rs. 50 M.

The total capital expenditure incurred on the acquisition of

during the financial year

amounted to Rs: 130,359,317 (2010 – Rs. 46,321,598), out of

which expenditure on Salterns and Field Development amounts

to Rs. 35,555,746 (2010 - Rs. 17,869,239). Further information

relating to the movement of is

given in Note 04 to the financial statements. Capital

expenditure has been financed by either long or short term

borrowing and or internally generated funds.

The Stated Capital of the company as at 31 March 2011 was Rs:

604,414,640. Details of the Stated Capital are given in Note 09

to the financial statements.

OPERATIONAL REVIEWTURNOVER

FINANCIAL RESULTS

INVESTMENTS

PROPERTY, PLANT AND EQUIPMENT

STATED CAPITAL

property, plant and equipment

property, plant and equipment

ANNUAL REPORT OF

THE BOARD OFDIRECTORS

16 17

DONATIONS

TAXATION

MAJOR SHAREHOLDERS

DIRECTORS

DIRECTORS' INTEREST IN CONTRACTS WITH

THE COMPANY

DIRECTORS' REMUNERATION AND OTHER

BENEFITS

The donations made during the year by the company amounted

to Rs. 389,950 (2010 - Rs. 36,980).

Pursuant to agreement dated 20 March 2006 entered into with

Board of Investment under Section 17 of the Board of

Investment Law, the Company is exempt from the business of

manufacturing for a period of 8 years from year 2007. This

exemption expires on the 2nd of March 2015 and for the

immediately succeeding two years the Company is liable to pay

income tax at the rate of 10% and thereafter at the rate of 20%.

The details of 20 major shareholders of the company as at 31

March 2011 have been set out under "Investor information".

The names of the Directors who held office during the year are

given below. Their brief profile has been set out under the

content of "Board of Directors."

Names

Dr.Ravindranath Liyanage

Mr.G.V.P.G. Amarasinghe

Prof. S.P.P.Amarathunga

Mr.T.Dharmarajah

Mr.N.B.W.C. Prashantha

Mr.W.A. Upali Gunawardena

Mr.S.A.Wickramapala

Directors' share holding of the company as at 31 March 2011

is as follows.

Mr.G.V.P.G. Amarasinghe 250,000 0.08%

Mr.N.B.W.C. Prashantha 408,100 0.14%

The remuneration of the Directors for the financial year ended st31 March 2011 is Rs.5,081,000 (2010 - Rs. 90,000).

Directors' interest in contracts in relation to transactions with

related entities, and other related disclosures are stated in Note

22 to the financial statements.

As required by the Companies Act No 07 of 2007 an Interest

Register is maintained by the company.

Name of the Director

DIRECTORS' INTERESTS IN SHARES

Number Percentage

SOLVENCY TEST

'

Your directors have made an assessment of the Solvency of the

company, immediately after the proposed dividend and confirm

that the company satisfies the Solvency Test as required by the

Section 57 of Companies Act No.7 of 2007.

The Directors recommend that a final dividend of Cents 12 per

share on the 282,207,320 shares issued as the final dividend for

the year 2010 / 11. The dividend to be paid out of profits, will be

subject to Withholding tax.

DIVIDEND

ENVIRONMENTAL PROTECTION

EMPLOYMENT POLICY

STATUTORY PAYMENTS

POST BALANCE SHEET EVENTS

INTERNAL CONTROLS

DIRECTORS RESPONSIBILITY FOR

FINANCIAL REPORTING

AUDITORS

The company activities may have indirect effect on the

environment. It is the policy of the company to minimize any

adverse effects as much as possible and creating awareness

among staff on current global environment threats.

The company's recruitment and employment policy is non

discriminatory. Employee appraisals are carried out by the

respective Departmental Heads annually in order to evaluate

their performance and realize potential to benefit the company

and employees.

The Directors, to the best of their knowledge and belief, are

satisfied that all statutory payments have been made up to date.

No circumstances have arisen since the Balance Sheet date,

which would require adjustment or disclosure in the financial

statements.

The Board has overall responsibility for the company's system of

internal controls. Although no system of internal control can

provide absolute assurance against material misstatement or

loss, the company's internal control system has been designed

to provide the Directors with reasonable assurance that assets

are safeguarded, transactions properly authorised and recorded

and material errors and irregularities either prevented or

detected within a reasonable period of time.

The Statement of Director's Responsibility is given in this report.

The financial statements for the year ended 31 March 2011

have been audited by Messrs. Ernst & Young, Chartered

Accountants in accordance with the Companies Act No. 7 of

2007. A resolution proposing re-appointment of Messrs. Ernst &

Young as Auditors to the company and authorizing the Directors

of the company to fix their remuneration will be forwarded at

the Annual General Meeting.

The Audit Fees of Messrs. Ernst & Young for the current year was

Rs. 190,600 (2010 - Rs. 118,000) was paid by the company. As

far as the Directors were aware the Auditors do not have any

relationship other than that of an Auditor with the company.

The Annual General Meeting will be held at 9.30 a.m. on 15

September 2011 at the Auditorium of the Institute of Chartered

Accountants of Sri Lanka. The notice of Annual General Meeting

is attached hereto the report.

By Order of the Board

16 August, 2011

ANNUAL GENERAL MEETING

Dr Ravindranath Liyanage

Chairman / CEO

G.V.P Ganaka Amarasinghe

Managing Director

18 19

DONATIONS

TAXATION

MAJOR SHAREHOLDERS

DIRECTORS

DIRECTORS' INTEREST IN CONTRACTS WITH

THE COMPANY

DIRECTORS' REMUNERATION AND OTHER

BENEFITS

The donations made during the year by the company amounted

to Rs. 389,950 (2010 - Rs. 36,980).

Pursuant to agreement dated 20 March 2006 entered into with

Board of Investment under Section 17 of the Board of

Investment Law, the Company is exempt from the business of

manufacturing for a period of 8 years from year 2007. This

exemption expires on the 2nd of March 2015 and for the

immediately succeeding two years the Company is liable to pay

income tax at the rate of 10% and thereafter at the rate of 20%.

The details of 20 major shareholders of the company as at 31

March 2011 have been set out under "Investor information".

The names of the Directors who held office during the year are

given below. Their brief profile has been set out under the

content of "Board of Directors."

Names

Dr.Ravindranath Liyanage

Mr.G.V.P.G. Amarasinghe

Prof. S.P.P.Amarathunga

Mr.T.Dharmarajah

Mr.N.B.W.C. Prashantha

Mr.W.A. Upali Gunawardena

Mr.S.A.Wickramapala

Directors' share holding of the company as at 31 March 2011

is as follows.

Mr.G.V.P.G. Amarasinghe 250,000 0.08%

Mr.N.B.W.C. Prashantha 408,100 0.14%

The remuneration of the Directors for the financial year ended st31 March 2011 is Rs.5,081,000 (2010 - Rs. 90,000).

Directors' interest in contracts in relation to transactions with

related entities, and other related disclosures are stated in Note

22 to the financial statements.

As required by the Companies Act No 07 of 2007 an Interest

Register is maintained by the company.

Name of the Director

DIRECTORS' INTERESTS IN SHARES

Number Percentage

SOLVENCY TEST

'

Your directors have made an assessment of the Solvency of the

company, immediately after the proposed dividend and confirm

that the company satisfies the Solvency Test as required by the

Section 57 of Companies Act No.7 of 2007.

The Directors recommend that a final dividend of Cents 12 per

share on the 282,207,320 shares issued as the final dividend for

the year 2010 / 11. The dividend to be paid out of profits, will be

subject to Withholding tax.

DIVIDEND

ENVIRONMENTAL PROTECTION

EMPLOYMENT POLICY

STATUTORY PAYMENTS

POST BALANCE SHEET EVENTS

INTERNAL CONTROLS

DIRECTORS RESPONSIBILITY FOR

FINANCIAL REPORTING

AUDITORS

The company activities may have indirect effect on the

environment. It is the policy of the company to minimize any

adverse effects as much as possible and creating awareness

among staff on current global environment threats.

The company's recruitment and employment policy is non

discriminatory. Employee appraisals are carried out by the

respective Departmental Heads annually in order to evaluate

their performance and realize potential to benefit the company

and employees.

The Directors, to the best of their knowledge and belief, are

satisfied that all statutory payments have been made up to date.

No circumstances have arisen since the Balance Sheet date,

which would require adjustment or disclosure in the financial

statements.

The Board has overall responsibility for the company's system of

internal controls. Although no system of internal control can

provide absolute assurance against material misstatement or

loss, the company's internal control system has been designed

to provide the Directors with reasonable assurance that assets

are safeguarded, transactions properly authorised and recorded

and material errors and irregularities either prevented or

detected within a reasonable period of time.

The Statement of Director's Responsibility is given in this report.

The financial statements for the year ended 31 March 2011

have been audited by Messrs. Ernst & Young, Chartered

Accountants in accordance with the Companies Act No. 7 of

2007. A resolution proposing re-appointment of Messrs. Ernst &

Young as Auditors to the company and authorizing the Directors

of the company to fix their remuneration will be forwarded at

the Annual General Meeting.

The Audit Fees of Messrs. Ernst & Young for the current year was

Rs. 190,600 (2010 - Rs. 118,000) was paid by the company. As

far as the Directors were aware the Auditors do not have any

relationship other than that of an Auditor with the company.

The Annual General Meeting will be held at 9.30 a.m. on 15

September 2011 at the Auditorium of the Institute of Chartered

Accountants of Sri Lanka. The notice of Annual General Meeting

is attached hereto the report.

By Order of the Board

16 August, 2011

ANNUAL GENERAL MEETING

Dr Ravindranath Liyanage

Chairman / CEO

G.V.P Ganaka Amarasinghe

Managing Director

18 19

As stipulated by The Companies Act No. 07 of 2007, Directors

are responsible for the preparation and presentation of financial

statements comprising a Profit and Loss Account for the year

and a Balance Sheet which presents a true and fair view of the

state of affairs of the company as at the end of the financial year,

which have to be placed before the AGM.

In keeping with the provisions under the above Act, the

Directors of Raigam Wayamba Salterns PLC, acknowledge their

responsibility in relation to financial reporting of the company.

The responsibilities differ from those of its Auditors, Messrs

Ernst & Young, which are set out in their report.

The financial statements of the company for the year ended 31

March 2011 included in this report, have been prepared and

presented in accordance with the Sri Lanka Accounting

Standards, and they provide the information as required by the

Companies Act No. 7 of 2007, Sri Lanka Accounting Standards

and the Listing Rules of the Colombo Stock Exchange. The

Directors confirm that suitable accounting policies have been

used and applied consistently, and that all applicable accounting

standards have been followed in the preparation of the financial

statements. All material deviations from these standards if any

have been disclosed and explained. The judgments and

estimates made in the preparation of these financial statements

are reasonable and prudent.

The Directors confirm their responsibility for ensuring that the

company maintains accounting records, which are sufficient to

prepare financial statements that disclose with reasonable

accuracy of the financial position of the company. They also

confirm their responsibility towards ensuring that the financial

statements presented in the Annual Report give a true and fair

view of the state of affairs of the company as at 31 March 2011

and that of the profit for the year then ended.

The overall responsibility for the company's internal control

systems lies with the Directors. Whilst recognizing the fact that

there is no single system of internal control that could provide

absolute assurance against material misstatements and frauds,

the Directors confirm that the prevalent internal control systems

instituted by them and which comprise internal checks, internal

audit and financial and other controls are so designed that,

there is a reasonable assurance that all assets are safeguarded

and transactions properly authorized and recorded, so that

material misstatements and irregularities are either prevented or

detected within a reasonable period of time.

The Directors are of the view that the company has adequate

resources to continue operations in the foreseeable future, and

have continued to use the going concern basis in the

preparation of these financial statements.

STATEMENT OF DIRECTORS'

RESPONSIBILITY

The Directors have provided the Auditors Messrs. Ernst & Young,

Chartered Accountants with every opportunity to carry out

reviews and tests that they considered appropriate and

necessary for the performance of their responsibilities. The

Auditors have examined the financial statements together with

all financial records and related data they may have considered

to be appropriate to enable them to express their opinion.

By Oder of the Board

Dr. Ravindranath Liyanage

Chairman / CEO

16 August, 2011

20 21

As stipulated by The Companies Act No. 07 of 2007, Directors

are responsible for the preparation and presentation of financial

statements comprising a Profit and Loss Account for the year

and a Balance Sheet which presents a true and fair view of the

state of affairs of the company as at the end of the financial year,

which have to be placed before the AGM.

In keeping with the provisions under the above Act, the

Directors of Raigam Wayamba Salterns PLC, acknowledge their

responsibility in relation to financial reporting of the company.

The responsibilities differ from those of its Auditors, Messrs

Ernst & Young, which are set out in their report.

The financial statements of the company for the year ended 31

March 2011 included in this report, have been prepared and

presented in accordance with the Sri Lanka Accounting

Standards, and they provide the information as required by the

Companies Act No. 7 of 2007, Sri Lanka Accounting Standards

and the Listing Rules of the Colombo Stock Exchange. The

Directors confirm that suitable accounting policies have been

used and applied consistently, and that all applicable accounting

standards have been followed in the preparation of the financial

statements. All material deviations from these standards if any

have been disclosed and explained. The judgments and

estimates made in the preparation of these financial statements

are reasonable and prudent.

The Directors confirm their responsibility for ensuring that the

company maintains accounting records, which are sufficient to

prepare financial statements that disclose with reasonable

accuracy of the financial position of the company. They also

confirm their responsibility towards ensuring that the financial

statements presented in the Annual Report give a true and fair

view of the state of affairs of the company as at 31 March 2011

and that of the profit for the year then ended.

The overall responsibility for the company's internal control

systems lies with the Directors. Whilst recognizing the fact that

there is no single system of internal control that could provide

absolute assurance against material misstatements and frauds,

the Directors confirm that the prevalent internal control systems

instituted by them and which comprise internal checks, internal

audit and financial and other controls are so designed that,

there is a reasonable assurance that all assets are safeguarded

and transactions properly authorized and recorded, so that

material misstatements and irregularities are either prevented or

detected within a reasonable period of time.

The Directors are of the view that the company has adequate

resources to continue operations in the foreseeable future, and

have continued to use the going concern basis in the

preparation of these financial statements.

STATEMENT OF DIRECTORS'

RESPONSIBILITY

The Directors have provided the Auditors Messrs. Ernst & Young,

Chartered Accountants with every opportunity to carry out

reviews and tests that they considered appropriate and

necessary for the performance of their responsibilities. The

Auditors have examined the financial statements together with

all financial records and related data they may have considered

to be appropriate to enable them to express their opinion.

By Oder of the Board

Dr. Ravindranath Liyanage

Chairman / CEO

16 August, 2011

20 21

The Audit Committee appointed by and responsible to the Board

of Directors, comprises three members namely,

Mr. T. Dharmarajah, Prof. S.P.P. Amarathunga and Mr. W.A.U.

Gunawardana, all being Non-Executive Independent Directors

of the company. The Committee is chaired by Mr. T. Dharmarajah,

a member of the Institute of Chartered Accountants of Sri Lanka.

All members of the Audit Committee have requisite knowledge to

carry-out their roles effectively and to discuss matters that come

within their purview independently and professionally.

The Purpose of the Audit Committee is to:

1. Assist the Board of Directors in fulfilling its overall

responsibilities for the financial reporting process

2. Review the system of internal control and risk management

3. Monitor the effectiveness of the internal audit function

4. Review the company's process for monitoring compliance

with laws and regulations

5. Review the independence and performance of the external

auditors

6. To make recommendations to the Board on the

appointment of external auditors and recommend their

remuneration and terms of engagement

The Principal activities of the Committee during the year are

detailed below.

During its meeting, the committee reviewed the adequacy and

effectiveness of the internal control systems and approach to its

exposure to the business and financial risks. Processes are in

place to safeguard the assets of the organization and to ensure

that the financial reporting system can be relied upon in the

preparation and presentation of financial statements.

The Committee reviewed the company's Bi- Annual Financial

Statements, the Annual Report and Statutory Accounts for

reliability, consistency and compliance with the Sri Lanka

Accounting Standards and other statutory requirements,

including the Companies Act No 7 of 2007 prior to issuance. It

also reviewed the adequacy of disclosure in published financial

statements.

The Committee reviewed the Management Letters Issued by

the External Auditors and the Management response thereto.

The Audit Committee has recommended to the Board of

Directors that Messrs Ernst & Young be re-appointed as

Auditors for the financial year ending 31 March 2012 subject to

the approval of the shareholders at the next Annual General

Meeting.

INTERNAL CONTROLS

FINANCIAL STATEMENTS

EXTERNAL AUDITORS

REPORT OF THE AUDIT

COMMITTEE

CONCLUSIONThe Audit committee is satisfied that the control environment

adopted in the organization provides reasonable, but not

absolute assurance that the financial position of the company is

satisfactory and that systems are in place to minimize the impact

of identifiable risks and that the Listing Rules of the Colombo

Stock Exchange have been met.

T. Dharmarajah

Chairman - Audit Committee

16 August, 2011

22 23

The Audit Committee appointed by and responsible to the Board

of Directors, comprises three members namely,

Mr. T. Dharmarajah, Prof. S.P.P. Amarathunga and Mr. W.A.U.

Gunawardana, all being Non-Executive Independent Directors

of the company. The Committee is chaired by Mr. T. Dharmarajah,

a member of the Institute of Chartered Accountants of Sri Lanka.

All members of the Audit Committee have requisite knowledge to

carry-out their roles effectively and to discuss matters that come

within their purview independently and professionally.

The Purpose of the Audit Committee is to:

1. Assist the Board of Directors in fulfilling its overall

responsibilities for the financial reporting process

2. Review the system of internal control and risk management

3. Monitor the effectiveness of the internal audit function

4. Review the company's process for monitoring compliance

with laws and regulations

5. Review the independence and performance of the external

auditors

6. To make recommendations to the Board on the

appointment of external auditors and recommend their

remuneration and terms of engagement

The Principal activities of the Committee during the year are

detailed below.

During its meeting, the committee reviewed the adequacy and

effectiveness of the internal control systems and approach to its

exposure to the business and financial risks. Processes are in

place to safeguard the assets of the organization and to ensure

that the financial reporting system can be relied upon in the

preparation and presentation of financial statements.

The Committee reviewed the company's Bi- Annual Financial

Statements, the Annual Report and Statutory Accounts for

reliability, consistency and compliance with the Sri Lanka

Accounting Standards and other statutory requirements,

including the Companies Act No 7 of 2007 prior to issuance. It

also reviewed the adequacy of disclosure in published financial

statements.

The Committee reviewed the Management Letters Issued by

the External Auditors and the Management response thereto.

The Audit Committee has recommended to the Board of

Directors that Messrs Ernst & Young be re-appointed as

Auditors for the financial year ending 31 March 2012 subject to

the approval of the shareholders at the next Annual General

Meeting.

INTERNAL CONTROLS

FINANCIAL STATEMENTS

EXTERNAL AUDITORS

REPORT OF THE AUDIT

COMMITTEE

CONCLUSIONThe Audit committee is satisfied that the control environment

adopted in the organization provides reasonable, but not

absolute assurance that the financial position of the company is

satisfactory and that systems are in place to minimize the impact

of identifiable risks and that the Listing Rules of the Colombo

Stock Exchange have been met.

T. Dharmarajah

Chairman - Audit Committee

16 August, 2011

22 23

The Remuneration Committee consists of three Independent

Non Executive Directors; Prof. S.P.P.

Amarathunga and Mr. S.A. Wickramapala. The Committee is

chaired by Mr. W.A.U. Gunawardena. The Committee met on

four occasions during the financial year.

The Remuneration Committee has reviewed and recommended

the following to the Board of Directors.

1. Policy on remuneration of the executive staff

2. Specific remuneration package for the Executive Directors

3. Recruitment and selection of staff to managerial cadre.

In a highly competitive environment attracting and retaining

high calibre executives is a key challenge faced by the company.

In this context, the Committee took into account, competition,

market information and performance evaluated methodology

in declaring the overall remuneration policy.

W.A.U. Gunawardena

Chairman - Remuneration Committee

16 August, 2011

Mr. W.A.U. Gunawardena,

REPORT OF THE REMUNERATION

COMMITTEE

RISK MANAGEMENT

24 25

The Board of Directors is well mindful of possible risks the

company and its subsidiary face and the implications of those.

Risk management forms an integral part of the business, which

is addressed by adopting a fair approach to provide a reasonable

assurance that the company's risk exposure is mitigated to the

possible extent.

The company faces different risks including following:

Delays in project development due to deadlocks leading to loss

of revenue E.g. Delay in granting approval by related authorities

for project related matters.

MITIGATING ACTIONS

Building and maintaining a good rapport with the stakeholders

to minimize project development delays.

Low returns due to resource limitation by nature. E.g. Weather

pattern changes that bring unfavourable impact to raw salt

harvest.

MITIGATING ACTIONS

Backward integration, obtaining expert knowledge on

forecasting and assumptions.

Obsolescent of existing technology due to innovation in the

industry.

MITIGATING ACTIONS

Foreign consultancy, training.

Non adherence to the rules and regulations set out in numerous

government Acts.

MITIGATING ACTIONS

Awareness of those regulations and policy level arrangement to

address those risks.

Returns from new projects being lower due to actual project

cost overruns.

MITIGATING ACTIONS

Making accurate project cost estimates using expert

knowledge. Adopting budgetary controls on development cost.

Losses due to fraud, human errors, inefficient processes, natural

perils and loss of sensitive information.

MITIGATING ACTIONS

Conduct periodic internal audit reviews which report to the

Audit Committee of the company. Working out a business

continuity plan to ensure disaster preparedness. Appropriate

insurance covers.

PROJECT DEVELOPMENT RISK

BUSINESS RISK

TECHNOLOGICAL RISK

LEGAL RISK

COST OVERRUN RISK

OPERATIONAL RISK

The Remuneration Committee consists of three Independent

Non Executive Directors; Prof. S.P.P.

Amarathunga and Mr. S.A. Wickramapala. The Committee is

chaired by Mr. W.A.U. Gunawardena. The Committee met on

four occasions during the financial year.

The Remuneration Committee has reviewed and recommended

the following to the Board of Directors.

1. Policy on remuneration of the executive staff

2. Specific remuneration package for the Executive Directors

3. Recruitment and selection of staff to managerial cadre.

In a highly competitive environment attracting and retaining

high calibre executives is a key challenge faced by the company.

In this context, the Committee took into account, competition,

market information and performance evaluated methodology

in declaring the overall remuneration policy.

W.A.U. Gunawardena

Chairman - Remuneration Committee

16 August, 2011

Mr. W.A.U. Gunawardena,

REPORT OF THE REMUNERATION

COMMITTEE

RISK MANAGEMENT

24 25

The Board of Directors is well mindful of possible risks the

company and its subsidiary face and the implications of those.

Risk management forms an integral part of the business, which

is addressed by adopting a fair approach to provide a reasonable

assurance that the company's risk exposure is mitigated to the

possible extent.

The company faces different risks including following:

Delays in project development due to deadlocks leading to loss

of revenue E.g. Delay in granting approval by related authorities

for project related matters.

MITIGATING ACTIONS

Building and maintaining a good rapport with the stakeholders

to minimize project development delays.

Low returns due to resource limitation by nature. E.g. Weather

pattern changes that bring unfavourable impact to raw salt

harvest.

MITIGATING ACTIONS

Backward integration, obtaining expert knowledge on

forecasting and assumptions.

Obsolescent of existing technology due to innovation in the

industry.

MITIGATING ACTIONS

Foreign consultancy, training.

Non adherence to the rules and regulations set out in numerous

government Acts.

MITIGATING ACTIONS

Awareness of those regulations and policy level arrangement to

address those risks.

Returns from new projects being lower due to actual project

cost overruns.

MITIGATING ACTIONS

Making accurate project cost estimates using expert

knowledge. Adopting budgetary controls on development cost.

Losses due to fraud, human errors, inefficient processes, natural

perils and loss of sensitive information.

MITIGATING ACTIONS

Conduct periodic internal audit reviews which report to the

Audit Committee of the company. Working out a business

continuity plan to ensure disaster preparedness. Appropriate

insurance covers.

PROJECT DEVELOPMENT RISK

BUSINESS RISK

TECHNOLOGICAL RISK

LEGAL RISK

COST OVERRUN RISK

OPERATIONAL RISK

Report on the Financial Statements

We have audited the accompanying financial statements of Raigam Wayamba Salterns PLC (“Company”), the consolidated financial

statements of the Company and its subsidiary (“Group”) which comprise the balance sheets as at 31 March 2011, and the income

statements, statement of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting

policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Sri Lanka

Accounting Standards. This responsibility includes: designing, implementing and maintaining internal controls relevant to the

preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;

selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our 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 plan and perform the audit to obtain reasonable assurance whether the

financial statements are free from material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also

includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall

financial statement presentation.

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes

of our audit. We therefore believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, so far as appears from our examination, the Company maintained proper accounting records for the year ended 31

March 2011 and the financial statements give a true and fair view of the Company’s state of affairs as at 31 March 2011 and its profit

and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

In our opinion, the consolidated financial statements give a true and fair view of the state of affairs as at 31 March 2011 and the profit

and cash flows for the year then ended, in accordance with Sri Lanka Accounting Standards, of the Company and its subsidiary dealt

with thereby, so far as concerns the shareholders of the Company.

Report on Other Legal and Regulatory Requirements

In our opinion, these financial statements also comply with the requirements of Section 151(2) and 153(2) to 153(7) of the Companies

Act No. 07 of 2007.

28 June 2011

Colombo

INDEPENDENT AUDITORS’ REPORTTO THE SHAREHOLDERS OF RAIGAM WAYAMBA SALTERNS PLC

26 27

REGULATORY AND COMPLIANCE RISK

HUMAN RISK

INTEREST RATE RISK

CREDIT RISK

Introduction of new regulations affecting the business

adversely.

MITIGATING ACTIONS

Monitoring of compliance with regulatory requirements.

Participate in lobbying efforts against regulations that could

have a negative impact on business/industry.

MITIGATING ACTIONS

Adverse impact on profitability due to interest rate fluctuations.

MITIGATING ACTIONS

Use of flexible financial sources and arrangement.

Liquidity position being negatively affected due to delays / non-

payments from debtors.

MITIGATING ACTIONS

Protection through legally enforceable agreements.

Adverse impact on business competitiveness due to the inability

to recruit/retain required talented staff.

Build strong employer brand.

BW/PNR/HMS/TW

Report on the Financial Statements

We have audited the accompanying financial statements of Raigam Wayamba Salterns PLC (“Company”), the consolidated financial

statements of the Company and its subsidiary (“Group”) which comprise the balance sheets as at 31 March 2011, and the income

statements, statement of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting

policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Sri Lanka

Accounting Standards. This responsibility includes: designing, implementing and maintaining internal controls relevant to the

preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;

selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our 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 plan and perform the audit to obtain reasonable assurance whether the

financial statements are free from material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also

includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall

financial statement presentation.

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes

of our audit. We therefore believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, so far as appears from our examination, the Company maintained proper accounting records for the year ended 31

March 2011 and the financial statements give a true and fair view of the Company’s state of affairs as at 31 March 2011 and its profit

and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

In our opinion, the consolidated financial statements give a true and fair view of the state of affairs as at 31 March 2011 and the profit

and cash flows for the year then ended, in accordance with Sri Lanka Accounting Standards, of the Company and its subsidiary dealt

with thereby, so far as concerns the shareholders of the Company.

Report on Other Legal and Regulatory Requirements

In our opinion, these financial statements also comply with the requirements of Section 151(2) and 153(2) to 153(7) of the Companies

Act No. 07 of 2007.

28 June 2011

Colombo

INDEPENDENT AUDITORS’ REPORTTO THE SHAREHOLDERS OF RAIGAM WAYAMBA SALTERNS PLC

26 27

REGULATORY AND COMPLIANCE RISK

HUMAN RISK

INTEREST RATE RISK

CREDIT RISK

Introduction of new regulations affecting the business

adversely.

MITIGATING ACTIONS

Monitoring of compliance with regulatory requirements.

Participate in lobbying efforts against regulations that could

have a negative impact on business/industry.

MITIGATING ACTIONS

Adverse impact on profitability due to interest rate fluctuations.

MITIGATING ACTIONS

Use of flexible financial sources and arrangement.

Liquidity position being negatively affected due to delays / non-

payments from debtors.

MITIGATING ACTIONS

Protection through legally enforceable agreements.

Adverse impact on business competitiveness due to the inability

to recruit/retain required talented staff.

Build strong employer brand.

BW/PNR/HMS/TW

I certify that these financial statements are in compliance with the requirements of the Companies Act No.07 of 2007.

……………………….....……………………..E.A.C.K.Perera

General Manager Finance

The Board of Directors is responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the Board by:

……………………….....……………………..G.V.P.G.Amarasinghe

Director

……………………….....…………………….. R.Liyanage

Director

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

28 June 2011Colombo

INCOME STATEMENTYEAR ENDED 31 MARCH 2011

BALANCE SHEETAS AT 31 MARCH 2011

Non-Current Assets

Property, Plant and Equipment 4 442,072,419 331,206,250 398,520,931 308,409,827

Investments 5 - - 61,823,540 11,823,540

Leasehold Land 6 1,200,000 1,200,000 - -

Goodwill 1,846,790 1,846,790 - -

Deferred Tax Assets 13.2 202,057 - 202,057 -

445,321,266 334,253,040 460,546,528 320,233,367

Current Assets

Inventories 7 29,191,336 7,012,435 27,809,135 7,012,435

Trade and Other Receivables 8 176,416,295 154,426,355 169,844,646 170,923,912

Investments 5.2 150,000,000 - 150,000,000 -

Cash and Cash Equivalents 19.1 5,741,719 1,130,918,151 5,673,078 1,130,838,150

361,349,350 1,292,356,941 353,326,859 1,308,774,497

Total Assets 806,670,616 1,626,609,981 813,873,387 1,629,007,864

Stated Capital 9 604,414,640 604,414,640 604,414,640 604,414,640

Retained Earnings 56,466,129 (1,399,363) 66,988,427 1,961,625

Total Equity 660,880,769 603,015,277 671,403,067 606,376,265

Non-Current Liabilities

Interest Bearing Loans and Borrowings 10 6,783,658 14,094,363 6,783,658 14,094,364

Retirement Benefit Liability 12 1,192,424 892,624 1,192,424 892,624

7,976,082 14,986,987 7,976,082 14,986,988

Current Liabilities

Trade and Other Payables 14 18,560,265 950,723,098 16,598,990 949,946,806

Income Tax Payable 3,332,480 - 3,332,480 -

Interest Bearing Loans and Borrowings 10 115,921,020 34,695,264 114,562,768 34,508,450

Non Interest Bearing Loans and Borrowings 11 - 23,189,355 - 23,189,355

137,813,765 1,008,607,717 134,494,238 1,007,644,611

Total Equity and Liabilities 806,670,616 1,626,609,981 813,873,387 1,629,007,864

Group Company

Note 2011 2010 2011 2010Rs. Rs. Rs. RsASSETS

EQUITY AND LIABILITIES

Group Company

Note 2011 2010 2011 2010Rs. Rs. Rs. Rs

.

Earnings Per Share 17 0 .21 0.18 0.23 0 .19

Basic Earnings Per Share

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

Revenue 3 297,411,339 259,531,518 297,411,339 259,531,518

Cost of Sales (161,408,781) (143,578,645) (161,408,781) (143,578,645)

Gross Profit 136,002,558 115,952,873 136,002,558 115,952,873

Other Income and Gains 15 20,928,425 14,001 20,928,425 14,001

Selling and Distribution Expenses (36,448,233) (26,584,471) (36,448,233) (26,584,471)

Administrative Expenses (47,101,659) (30,662,368) (39,985,798) (28,744,135)

Finance Cost 16 (9,219,296) (7,464,008) (9,173,847) (7,449,493)

Profit Before Tax 18 64,161,794 51,256,027 71,323,104 53,188,775

Income Tax Expense 13 (6,296,302) - (6,296,302) -

Profit for the Year 57,865,492 51,256,027 65,026,802 53,188,775

28 29

I certify that these financial statements are in compliance with the requirements of the Companies Act No.07 of 2007.

……………………….....……………………..E.A.C.K.Perera

General Manager Finance

The Board of Directors is responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the Board by:

……………………….....……………………..G.V.P.G.Amarasinghe

Director

……………………….....…………………….. R.Liyanage

Director

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

28 June 2011Colombo

INCOME STATEMENTYEAR ENDED 31 MARCH 2011

BALANCE SHEETAS AT 31 MARCH 2011

Non-Current Assets

Property, Plant and Equipment 4 442,072,419 331,206,250 398,520,931 308,409,827

Investments 5 - - 61,823,540 11,823,540

Leasehold Land 6 1,200,000 1,200,000 - -

Goodwill 1,846,790 1,846,790 - -

Deferred Tax Assets 13.2 202,057 - 202,057 -

445,321,266 334,253,040 460,546,528 320,233,367

Current Assets

Inventories 7 29,191,336 7,012,435 27,809,135 7,012,435

Trade and Other Receivables 8 176,416,295 154,426,355 169,844,646 170,923,912

Investments 5.2 150,000,000 - 150,000,000 -

Cash and Cash Equivalents 19.1 5,741,719 1,130,918,151 5,673,078 1,130,838,150

361,349,350 1,292,356,941 353,326,859 1,308,774,497

Total Assets 806,670,616 1,626,609,981 813,873,387 1,629,007,864

Stated Capital 9 604,414,640 604,414,640 604,414,640 604,414,640

Retained Earnings 56,466,129 (1,399,363) 66,988,427 1,961,625

Total Equity 660,880,769 603,015,277 671,403,067 606,376,265

Non-Current Liabilities

Interest Bearing Loans and Borrowings 10 6,783,658 14,094,363 6,783,658 14,094,364

Retirement Benefit Liability 12 1,192,424 892,624 1,192,424 892,624

7,976,082 14,986,987 7,976,082 14,986,988

Current Liabilities

Trade and Other Payables 14 18,560,265 950,723,098 16,598,990 949,946,806

Income Tax Payable 3,332,480 - 3,332,480 -

Interest Bearing Loans and Borrowings 10 115,921,020 34,695,264 114,562,768 34,508,450

Non Interest Bearing Loans and Borrowings 11 - 23,189,355 - 23,189,355

137,813,765 1,008,607,717 134,494,238 1,007,644,611

Total Equity and Liabilities 806,670,616 1,626,609,981 813,873,387 1,629,007,864

Group Company

Note 2011 2010 2011 2010Rs. Rs. Rs. RsASSETS

EQUITY AND LIABILITIES

Group Company

Note 2011 2010 2011 2010Rs. Rs. Rs. Rs

.

Earnings Per Share 17 0 .21 0.18 0.23 0 .19

Basic Earnings Per Share

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

Revenue 3 297,411,339 259,531,518 297,411,339 259,531,518

Cost of Sales (161,408,781) (143,578,645) (161,408,781) (143,578,645)

Gross Profit 136,002,558 115,952,873 136,002,558 115,952,873

Other Income and Gains 15 20,928,425 14,001 20,928,425 14,001

Selling and Distribution Expenses (36,448,233) (26,584,471) (36,448,233) (26,584,471)

Administrative Expenses (47,101,659) (30,662,368) (39,985,798) (28,744,135)

Finance Cost 16 (9,219,296) (7,464,008) (9,173,847) (7,449,493)

Profit Before Tax 18 64,161,794 51,256,027 71,323,104 53,188,775

Income Tax Expense 13 (6,296,302) - (6,296,302) -

Profit for the Year 57,865,492 51,256,027 65,026,802 53,188,775

28 29

CASH FLOW STATEMENTYEAR ENDED 31 MARCH 2011

STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 MARCH 2011

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

Note 2011 2010 2011 2010Rs. Rs. Rs. Rs.

CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Profit Before Income Tax Expense 64,161,794 51,256,027 71,323,104 53,188,775

Adjustments for

Depreciation 4 15,997,264 11,418,840 15,602,602 11,406,398

Finance Costs 16 9,219,297 7,464,008 9,173,847 7,449,493

Provision for Defined Benefit Plans 12 379,800 (7,072) 379,800 (7,072)

Loss on Disposal of Property,Plant and Equipment 103,028 1,775,533 103,028 1,775,533

Operating Profit Before Working Capital Changes 89,861,183 71,907,336 96,582,381 73,813,128

(Increase) / Decrease in Inventories (22,178,899) 4 ,451,287 (20,796,700) 4,451,287

(Increase) / Decrease in Trade and Other Receivables (21,989,940) (17,847,097) 1,079,266 (31,007,941)

Increase / (Decrease) in Trade and Other Payables (932,162,833) 920,256,318 (933,347,816) 932,521,916

Cash Generated from Operations (886,470,489) 978,767,844 (856,482,869) 979,778,390

Income Tax Paid (3,165,879) - (3,165,879) -

Gratuity Paid 12 (80,000) - (80,000) -

Finance Costs Paid 16 (7,435,597) (6,323,978) (7,390,147) (6,309,463)

Net Cash from Operating Activities (897,151,965) 972,443,866 (867,118,896) 973,468,927

Acquisition of Property, Plant and Equipment 4.1 (130,359,317) (34,321,598) (109,209,589) (28,500,166)

Acquisition of Other Investments - - (50,000,000) (6,823,540)

Acquisition / (Disposal) of Investments (150,000,000) 12,000,000 (150,000,000) 12,000,000

Acquisition / (Disposal) of Proceeds from Property, Plant and Equipment 3,392,857 - 3,392,857 -

Net Cash from / (Used in) Investing Activities (276,966,460) (22,321,598) (305,816,732) (23,323,706)

Proceeds from Issuance of Share Capital - 200,000,000 - 200,000,000

Loan Obtained 11 - 23,189,355 - 23,189,355

Principal Payment under Finance Lease Liabilities 10.5 (4,803,835) (2,661,333) (4,803,835) (2,661,333)

Repayment of Interest Bearing Loans and Borrowings 10.4 (3,683,080) (3,676,380) (3,683,080) (3,676,380)

Repayment of Non Interest Bearing Loans and Borrowings 11 (23,189,355) - (23,189,355) -

Payment of Dividends - (36,212,897) - (36,212,897)

Net Cash from / (used in) Financing Activities (31,676,270) 180,638,745 (31,676,270) 180,638,745

Net Increase / (Decrease) in Cash and Cash Equivalents (1,205,794,696) 1,130,761,014 (1,204,611,898) 1,130,783,966

Cash and Cash Equivalents at the Beginning of the Year 1,103,325,020 (27,435,994) 1,103,431,833 (27,352,133)

Cash and Cash Equivalents at the End of the Year 19 (102,469,676) 1,103,325,020 (101,180,065) 1,103,431,833

Group CompanyGROUP Stated Retained Total Capital Earnings

Rs. Rs. Rs.

Balance as at 01 April 2009 204,414,629 183,557,518 387,972,147

Issue of Shares 200,000,000 (200,000,000) -

Transferred to Stated Capital During the Year 1 1 (11) -

Call in Advance 200,000,000 - 200,000,000

Interim Dividend for 2009/2010 - (36,212,897) (36,212,897)

Profit for the Year - 51,256,027 51,256,027

Balance as at 31 March 2010 604,414,640 (1,399,363) 603,015,277

Profit for the Year - 57,865,492 57,865,492

Balance as at 31 March 2011 604,414,640 56,466,129 660,880,769

COMPANY

Balance as at 31 March 2009 204,414,629 184,985,758 389,400,387

Issue of Shares 200,000,000 (200,000,000) -

Transferred to Stated Capital During the Year 11 (11) -

Call in Advance 200,000,000 - 200,000,000

Interim Dividend for 2009/2010 - (36,212,897) (36,212,897)

Profit for the Year - 53,188,775 53,188,775

Balance as at 31 March 2010 604,414,640 1,961,625 606,376,265

Profit for the Year - 65,026,802 65,026,802

Balance as at 31 March 2011 604,414,640 66,988,427 671,403,067

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

StatedCapital

Rs.

RetainedEarnings

Rs.

Total

Rs.

30 31

CASH FLOW STATEMENTYEAR ENDED 31 MARCH 2011

STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 MARCH 2011

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

Note 2011 2010 2011 2010Rs. Rs. Rs. Rs.

CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Profit Before Income Tax Expense 64,161,794 51,256,027 71,323,104 53,188,775

Adjustments for

Depreciation 4 15,997,264 11,418,840 15,602,602 11,406,398

Finance Costs 16 9,219,297 7,464,008 9,173,847 7,449,493

Provision for Defined Benefit Plans 12 379,800 (7,072) 379,800 (7,072)

Loss on Disposal of Property,Plant and Equipment 103,028 1,775,533 103,028 1,775,533

Operating Profit Before Working Capital Changes 89,861,183 71,907,336 96,582,381 73,813,128

(Increase) / Decrease in Inventories (22,178,899) 4 ,451,287 (20,796,700) 4,451,287

(Increase) / Decrease in Trade and Other Receivables (21,989,940) (17,847,097) 1,079,266 (31,007,941)

Increase / (Decrease) in Trade and Other Payables (932,162,833) 920,256,318 (933,347,816) 932,521,916

Cash Generated from Operations (886,470,489) 978,767,844 (856,482,869) 979,778,390

Income Tax Paid (3,165,879) - (3,165,879) -

Gratuity Paid 12 (80,000) - (80,000) -

Finance Costs Paid 16 (7,435,597) (6,323,978) (7,390,147) (6,309,463)

Net Cash from Operating Activities (897,151,965) 972,443,866 (867,118,896) 973,468,927

Acquisition of Property, Plant and Equipment 4.1 (130,359,317) (34,321,598) (109,209,589) (28,500,166)

Acquisition of Other Investments - - (50,000,000) (6,823,540)

Acquisition / (Disposal) of Investments (150,000,000) 12,000,000 (150,000,000) 12,000,000

Acquisition / (Disposal) of Proceeds from Property, Plant and Equipment 3,392,857 - 3,392,857 -

Net Cash from / (Used in) Investing Activities (276,966,460) (22,321,598) (305,816,732) (23,323,706)

Proceeds from Issuance of Share Capital - 200,000,000 - 200,000,000

Loan Obtained 11 - 23,189,355 - 23,189,355

Principal Payment under Finance Lease Liabilities 10.5 (4,803,835) (2,661,333) (4,803,835) (2,661,333)

Repayment of Interest Bearing Loans and Borrowings 10.4 (3,683,080) (3,676,380) (3,683,080) (3,676,380)

Repayment of Non Interest Bearing Loans and Borrowings 11 (23,189,355) - (23,189,355) -

Payment of Dividends - (36,212,897) - (36,212,897)

Net Cash from / (used in) Financing Activities (31,676,270) 180,638,745 (31,676,270) 180,638,745

Net Increase / (Decrease) in Cash and Cash Equivalents (1,205,794,696) 1,130,761,014 (1,204,611,898) 1,130,783,966

Cash and Cash Equivalents at the Beginning of the Year 1,103,325,020 (27,435,994) 1,103,431,833 (27,352,133)

Cash and Cash Equivalents at the End of the Year 19 (102,469,676) 1,103,325,020 (101,180,065) 1,103,431,833

Group CompanyGROUP Stated Retained Total Capital Earnings

Rs. Rs. Rs.

Balance as at 01 April 2009 204,414,629 183,557,518 387,972,147

Issue of Shares 200,000,000 (200,000,000) -

Transferred to Stated Capital During the Year 1 1 (11) -

Call in Advance 200,000,000 - 200,000,000

Interim Dividend for 2009/2010 - (36,212,897) (36,212,897)

Profit for the Year - 51,256,027 51,256,027

Balance as at 31 March 2010 604,414,640 (1,399,363) 603,015,277

Profit for the Year - 57,865,492 57,865,492

Balance as at 31 March 2011 604,414,640 56,466,129 660,880,769

COMPANY

Balance as at 31 March 2009 204,414,629 184,985,758 389,400,387

Issue of Shares 200,000,000 (200,000,000) -

Transferred to Stated Capital During the Year 11 (11) -

Call in Advance 200,000,000 - 200,000,000

Interim Dividend for 2009/2010 - (36,212,897) (36,212,897)

Profit for the Year - 53,188,775 53,188,775

Balance as at 31 March 2010 604,414,640 1,961,625 606,376,265

Profit for the Year - 65,026,802 65,026,802

Balance as at 31 March 2011 604,414,640 66,988,427 671,403,067

The accounting policies and notes on pages 32 through 51 form an integral part of the Financial Statements.

StatedCapital

Rs.

RetainedEarnings

Rs.

Total

Rs.

30 31

2.1.2 COMPARATIVE INFORMATION

2.1.3 STATEMENT OF COMPLIANCE

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

JUDGMENTS

ESTIMATES AND ASSUMPTIONS

2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.3.1 FOREIGN CURRENCY TRANSLATION

2.3.2 TAXATION

The accounting policies applied by the Group are consistent with those used in previous year’s figures and phrases have been

rearranged, wherever necessary, to confirm to the current year’s presentation.

The Financial Statements of Group have been prepared in accordance with Sri Lanka Accounting Standards (SLAS).

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those

involving estimations, which have the most significant effect on the amounts recognized in the Financial Statements.

The Group reviews at each balance sheet date all receivables to assess whether an allowance should be recorded in the income

statement. The Management uses judgement in estimating such amounts in the light of the duration of outstanding and any

other factors management is aware of that indicate uncertainty in recovery.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a

significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year are

discussed below. The respective carrying amounts of assets and liabilities are given in related notes to the Financial Statements.

The Property, Plant and Equipment of the Group are reflected at fair value, when current market prices of similar assets are

available, such evidences are considered in estimating fair values of these assets. In the absence of such information the Group

determines within a reasonable fair value estimates, amounts that can be attributed as fair values, with the assistance of an

independent valuer.

The Defined Benefit Obligation and the related charge for the year is determined using assumptions required under actuarial

valuation techniques. The valuation involves making assumptions about discount rates, future salary increases, staff turnover

rates etc. Due to the long term nature of such obligations these estimates are subject to significant uncertainty. Further details are

given in Note 12.

The Financial Statements are presented in Sri Lanka Rupees, which is the Group's functional and presentation currency.

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange

ruling at the balance sheet date. All differences are taken to profit or loss. Non monetary items that are measured in terms of

historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non

monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair

value was determined.

Pursuant to agreement dated 20 March 2006 entered into with Board of Investment under Section 17 of the Board of Investment

Law, the Company is exempt from the business of manufacturing for a period of 8 years from year 2007. This exemption expires

Allowance for Doubtful Debts:

Fair Value of Property, Plant & Equipment:

Defined Benefit Plans:

a) CURRENT TAXES

Raigam Wayamba Salterns PLC

1. CORPORATE INFORMATION1.1 GENERAL

1.2 PRINCIPAL ACTIVITIES AND NATURE OF OPERATIONS

1.3 PARENT ENTITY AND ULTIMATE PARENT ENTITY

1.4 DATE OF AUTHORIZATION FOR ISSUE

2. BASIS OF PREPARATION

2.1.1 BASIS OF CONSOLIDATION

Raigam Wayamba Salterns PLC (“Company”) is a limited liability company incorporated and domiciled in Sri Lanka. The

registered office of the Company is located at No. 23, Walukarama Road, Colombo 03.

During the year, the principal activities of the Company and the subsidiary dealt with in these financial statements were as

follows;

COMPANY ACTIVITIES

Raigam Wayamba Saltern PLC Manufacturing and Distribution of Salt Island wide,

Development of Salterns

Southern Salt Company (Pvt) Ltd Development of Salterns

The Group’s parent entity is Raigam Marketing Services (Private) Limited. In the opinion of the Directors, the Group’s ultimate

parent undertaking and controlling party is also Raigam Marketing Services (Private) Limited, which is incorporated in Sri Lanka.

The Financial Statements of Raigam Wayamba Salterns PLC and its subsidiary for the year ended 31 March 2011 were authorized

for issue in accordance with a resolution of the Board of Directors on 28 June 2011.

The Financial Statements have been prepared on a historical cost basis, except for freehold land, buildings on freehold land, plant

and machinery. The Financial Statements are presented in Sri Lankan Rupees. The Preparation and Presentation of these financial

statements are in compliance with the Companies Act No. 07 of 2007.

The Financial Statements of the Group represent the consolidation of the Financial Statements of the Company, its subsidiary,

after elimination of all material intra Group transactions.

a) SUBSIDIARY

Subsidiary is the enterprise controlled by the parent. Control exists when the parent has the power, directly or indirectly to govern

the financial and operating policies of an enterprise. Subsidiary is controlled from the date the parent obtains control until the

date that control ceases. The following companies have been consolidated.

- Raigam Wayamba Salterns PLC - Parent- Southern Salt Company (Private) Limited - Subsidiary

All companies of the Group are incorporated in Sri Lanka and have a common financial year which ends on 31 March.

b) The total profits and losses for the year, of the Company and of its subsidiary included in consolidation are shown in the

Consolidated Income Statement. All assets and liabilities of the Company and of its subsidiary included in consolidation are

shown in the Consolidated Balance Sheet. The Consolidated Cash Flow Statement includes the cash flows of the

Company and its subsidiary.

Goodwill represents the excess of the cost of the acquisition over the Fair Value of identifiable net assets of a subsidiary as at the

date of acquisition. In accordance with SLAS 25 (revised 2004), goodwill arising on business combinations after 1 June 2005 are

not amortised, but tested for impairment annually.

c) GOODWILL

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

32 33

2.1.2 COMPARATIVE INFORMATION

2.1.3 STATEMENT OF COMPLIANCE

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

JUDGMENTS

ESTIMATES AND ASSUMPTIONS

2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.3.1 FOREIGN CURRENCY TRANSLATION

2.3.2 TAXATION

The accounting policies applied by the Group are consistent with those used in previous year’s figures and phrases have been

rearranged, wherever necessary, to confirm to the current year’s presentation.

The Financial Statements of Group have been prepared in accordance with Sri Lanka Accounting Standards (SLAS).

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those

involving estimations, which have the most significant effect on the amounts recognized in the Financial Statements.

The Group reviews at each balance sheet date all receivables to assess whether an allowance should be recorded in the income

statement. The Management uses judgement in estimating such amounts in the light of the duration of outstanding and any

other factors management is aware of that indicate uncertainty in recovery.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a

significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year are

discussed below. The respective carrying amounts of assets and liabilities are given in related notes to the Financial Statements.

The Property, Plant and Equipment of the Group are reflected at fair value, when current market prices of similar assets are

available, such evidences are considered in estimating fair values of these assets. In the absence of such information the Group

determines within a reasonable fair value estimates, amounts that can be attributed as fair values, with the assistance of an

independent valuer.

The Defined Benefit Obligation and the related charge for the year is determined using assumptions required under actuarial

valuation techniques. The valuation involves making assumptions about discount rates, future salary increases, staff turnover

rates etc. Due to the long term nature of such obligations these estimates are subject to significant uncertainty. Further details are

given in Note 12.

The Financial Statements are presented in Sri Lanka Rupees, which is the Group's functional and presentation currency.

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange

ruling at the balance sheet date. All differences are taken to profit or loss. Non monetary items that are measured in terms of

historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non

monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair

value was determined.

Pursuant to agreement dated 20 March 2006 entered into with Board of Investment under Section 17 of the Board of Investment

Law, the Company is exempt from the business of manufacturing for a period of 8 years from year 2007. This exemption expires

Allowance for Doubtful Debts:

Fair Value of Property, Plant & Equipment:

Defined Benefit Plans:

a) CURRENT TAXES

Raigam Wayamba Salterns PLC

1. CORPORATE INFORMATION1.1 GENERAL

1.2 PRINCIPAL ACTIVITIES AND NATURE OF OPERATIONS

1.3 PARENT ENTITY AND ULTIMATE PARENT ENTITY

1.4 DATE OF AUTHORIZATION FOR ISSUE

2. BASIS OF PREPARATION

2.1.1 BASIS OF CONSOLIDATION

Raigam Wayamba Salterns PLC (“Company”) is a limited liability company incorporated and domiciled in Sri Lanka. The

registered office of the Company is located at No. 23, Walukarama Road, Colombo 03.

During the year, the principal activities of the Company and the subsidiary dealt with in these financial statements were as

follows;

COMPANY ACTIVITIES

Raigam Wayamba Saltern PLC Manufacturing and Distribution of Salt Island wide,

Development of Salterns

Southern Salt Company (Pvt) Ltd Development of Salterns

The Group’s parent entity is Raigam Marketing Services (Private) Limited. In the opinion of the Directors, the Group’s ultimate

parent undertaking and controlling party is also Raigam Marketing Services (Private) Limited, which is incorporated in Sri Lanka.

The Financial Statements of Raigam Wayamba Salterns PLC and its subsidiary for the year ended 31 March 2011 were authorized

for issue in accordance with a resolution of the Board of Directors on 28 June 2011.

The Financial Statements have been prepared on a historical cost basis, except for freehold land, buildings on freehold land, plant

and machinery. The Financial Statements are presented in Sri Lankan Rupees. The Preparation and Presentation of these financial

statements are in compliance with the Companies Act No. 07 of 2007.

The Financial Statements of the Group represent the consolidation of the Financial Statements of the Company, its subsidiary,

after elimination of all material intra Group transactions.

a) SUBSIDIARY

Subsidiary is the enterprise controlled by the parent. Control exists when the parent has the power, directly or indirectly to govern

the financial and operating policies of an enterprise. Subsidiary is controlled from the date the parent obtains control until the

date that control ceases. The following companies have been consolidated.

- Raigam Wayamba Salterns PLC - Parent- Southern Salt Company (Private) Limited - Subsidiary

All companies of the Group are incorporated in Sri Lanka and have a common financial year which ends on 31 March.

b) The total profits and losses for the year, of the Company and of its subsidiary included in consolidation are shown in the

Consolidated Income Statement. All assets and liabilities of the Company and of its subsidiary included in consolidation are

shown in the Consolidated Balance Sheet. The Consolidated Cash Flow Statement includes the cash flows of the

Company and its subsidiary.

Goodwill represents the excess of the cost of the acquisition over the Fair Value of identifiable net assets of a subsidiary as at the

date of acquisition. In accordance with SLAS 25 (revised 2004), goodwill arising on business combinations after 1 June 2005 are

not amortised, but tested for impairment annually.

c) GOODWILL

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

32 33

2.3.5 TRADE AND OTHER RECEIVABLES

2.3.6 CASH AND CASH EQUIVALENTS

2.3.7 PROPERTY, PLANT AND EQUIPMENT

2.3.8 LEASES – COMPANY AS A LESSEE

2.3.9 INVESTMENTS

Trade Receivables are stated at the amounts they are estimated to realise net of allowances for bad and doubtful receivables.

Other Receivables and dues from related parties are recognised at cost less allowances for bad and doubtful receivables.

Cash and Cash Equivalents are cash in hand, demand deposits and short-term highly liquid investments, readily convertible to

known amounts of cash and subject to insignificant risk of changes in value.

For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and deposits in banks net of

outstanding bank overdrafts. Investments with short maturities i.e. three months or less from the date of acquisition are also

treated as cash equivalents.

Property, Plant and Equipment except for land, building on freehold land and plant and machinery are stated at cost, excluding

the costs of day to day servicing, less accumulated depreciation and accumulated impairment in value. Such cost includes the

cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria are met.

Land buildings and plant and machinery are measured at fair value less depreciation on buildings and impairment charged

subsequent to the date of the revaluation.

Depreciation is calculated on a straight line basis over the useful life of the assets.

Valuations are performed every 3-5 years to ensure that the fair value of a revalued asset does not differ materially from its

carrying amount.

Any revaluation surplus is credited to the revaluation reserve included in the equity section of the balance sheet, except to the

extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase

is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except that a deficit directly offsetting a previous

surplus on the same asset is directly offset against the surplus in the asset revaluation reserve.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are

capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum

lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to

achieve a constant rate of interest on the remaining balance of the liability. Finance charges are reflected in the income

statement.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no

reasonable certainty that the Company will obtain ownership by the end of the lease term. The depreciation policy for

depreciable leased assets is consistent with that for depreciable asset that are owned as described in 4.9.

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.

Cost of investment includes purchase cost and acquisition charges such as brokerages, fees, duties and bank regulatory fees.

The Group distinguishes and presents current and non current investment in the Balance Sheet.

b) MEASUREMENT

Current Investments

Current investments are carried at the lower of cost and market value, determined on the basis of aggregate portfolio.

Unrealized gains and losses on current investment is carried at market value are recognized as income or expense.

a) INITIAL RECOGNITION:

on the 2nd of March 2015 and for the immediately succeeding two years the Company is liable to pay income tax at the rate of

10% and thereafter at the rate of 20%.

Pursuant to the approval granted on 5th August 2008 by the Ministry of Industrial Development under “300 Industries

Programme, “Gamata Karmantha Project” referring to Section 20 of the Inland Revenue Act. No.10 of 2006 and Section 11 of

the Inland Revenue (Amendment) Act. No.09 of 2008, the Company has been entitled to a tax holiday period upto a minimum

period of five years and a maximum period of ten years provided certain conditions are met by the Company.

Section 17 of the Greater Colombo Economic Commission Law No. 4 of 1978, under which The Board of Investment (BOI) in Sri

Lanka is set up, has given the BOI the power to grant exemptions from the Inland Revenue Act. The Board on entering into

agreement with the Company has stated that the provisions of the Inland Revenue Act in relation to the imposition, payment,

and recovery of income tax in respect of the profits and income of the enterprise shall not apply for the profits and income of the

enterprise.

Effect of application of deferred taxation as per SLAS 14 Income Taxes (Revised 2005) on entities enjoying a tax

holiday period

During the year the Group commenced application of deferred taxation as per SLAS 14 Income Taxes (Revised 2005) on entities

enjoying tax holiday periods under the Board of Investment Law, as recommended by the “Deferred Tax council ruling for BOI

companies” issued by The Institute of Chartered Accountants of Sri Lanka. The effect of this application has not been accounted

for retrospectively since the effect is immaterial.

Revenues, expenses and assets are recognized net of the amount of sales tax except where the sales tax incurred on a purchase

of assets or service is not recoverable from the taxation authorities in which case the sales tax is recognized as a part of the cost of

the asset or part of the expense items as applicable and receivable and payable that are stated with the amount of sales tax

included. The amount of sales tax recoverable and payable in respect of taxation authorities is included as a part of receivables

and payables in the Balance Sheet.

Borrowing costs are recognised as an expense in the period in which they are incurred, except to the extent where borrowing

costs that are directly attributable to the acquisition, construction, or production of an asset that takes a substantial period of

time to get ready for its intended use or sale, are capitalized as part of that asset.

Inventories are valued at the lower of cost and net realizable value, after making due allowances for obsolete and slow moving

items. Net realizable value is the price at which inventories can be sold in the ordinary course of business less the estimated cost

of completion and the estimated cost necessary to make the sale.

The cost incurred in bringing inventories to its present location and conditions are accounted using the following cost formulae:-

Raw Materials - At purchase cost on first-in first-out basis

Finished Goods & Working-Progress - At the cost of direct materials, direct labour and an appropriate proportion of

manufacturing overheads based on normal operating capacity, but excluding

borrowing costs.

Engineering Stock and

Other Chemicals Stock - At purchase cost on First in First out basis

Net realizable Value is the estimated selling price in the ordinary course of business, less estimated cost of completion and

estimated costs necessary to make the sale.

Southern Salt Company (Private) Limited

b) DEFERRED TAXATION

c) SALES TAX

2.3.3 BORROWING COSTS

2.3.4 INVENTORIES

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

34 35

2.3.5 TRADE AND OTHER RECEIVABLES

2.3.6 CASH AND CASH EQUIVALENTS

2.3.7 PROPERTY, PLANT AND EQUIPMENT

2.3.8 LEASES – COMPANY AS A LESSEE

2.3.9 INVESTMENTS

Trade Receivables are stated at the amounts they are estimated to realise net of allowances for bad and doubtful receivables.

Other Receivables and dues from related parties are recognised at cost less allowances for bad and doubtful receivables.

Cash and Cash Equivalents are cash in hand, demand deposits and short-term highly liquid investments, readily convertible to

known amounts of cash and subject to insignificant risk of changes in value.

For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and deposits in banks net of

outstanding bank overdrafts. Investments with short maturities i.e. three months or less from the date of acquisition are also

treated as cash equivalents.

Property, Plant and Equipment except for land, building on freehold land and plant and machinery are stated at cost, excluding

the costs of day to day servicing, less accumulated depreciation and accumulated impairment in value. Such cost includes the

cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria are met.

Land buildings and plant and machinery are measured at fair value less depreciation on buildings and impairment charged

subsequent to the date of the revaluation.

Depreciation is calculated on a straight line basis over the useful life of the assets.

Valuations are performed every 3-5 years to ensure that the fair value of a revalued asset does not differ materially from its

carrying amount.

Any revaluation surplus is credited to the revaluation reserve included in the equity section of the balance sheet, except to the

extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase

is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except that a deficit directly offsetting a previous

surplus on the same asset is directly offset against the surplus in the asset revaluation reserve.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are

capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum

lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to

achieve a constant rate of interest on the remaining balance of the liability. Finance charges are reflected in the income

statement.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no

reasonable certainty that the Company will obtain ownership by the end of the lease term. The depreciation policy for

depreciable leased assets is consistent with that for depreciable asset that are owned as described in 4.9.

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.

Cost of investment includes purchase cost and acquisition charges such as brokerages, fees, duties and bank regulatory fees.

The Group distinguishes and presents current and non current investment in the Balance Sheet.

b) MEASUREMENT

Current Investments

Current investments are carried at the lower of cost and market value, determined on the basis of aggregate portfolio.

Unrealized gains and losses on current investment is carried at market value are recognized as income or expense.

a) INITIAL RECOGNITION:

on the 2nd of March 2015 and for the immediately succeeding two years the Company is liable to pay income tax at the rate of

10% and thereafter at the rate of 20%.

Pursuant to the approval granted on 5th August 2008 by the Ministry of Industrial Development under “300 Industries

Programme, “Gamata Karmantha Project” referring to Section 20 of the Inland Revenue Act. No.10 of 2006 and Section 11 of

the Inland Revenue (Amendment) Act. No.09 of 2008, the Company has been entitled to a tax holiday period upto a minimum

period of five years and a maximum period of ten years provided certain conditions are met by the Company.

Section 17 of the Greater Colombo Economic Commission Law No. 4 of 1978, under which The Board of Investment (BOI) in Sri

Lanka is set up, has given the BOI the power to grant exemptions from the Inland Revenue Act. The Board on entering into

agreement with the Company has stated that the provisions of the Inland Revenue Act in relation to the imposition, payment,

and recovery of income tax in respect of the profits and income of the enterprise shall not apply for the profits and income of the

enterprise.

Effect of application of deferred taxation as per SLAS 14 Income Taxes (Revised 2005) on entities enjoying a tax

holiday period

During the year the Group commenced application of deferred taxation as per SLAS 14 Income Taxes (Revised 2005) on entities

enjoying tax holiday periods under the Board of Investment Law, as recommended by the “Deferred Tax council ruling for BOI

companies” issued by The Institute of Chartered Accountants of Sri Lanka. The effect of this application has not been accounted

for retrospectively since the effect is immaterial.

Revenues, expenses and assets are recognized net of the amount of sales tax except where the sales tax incurred on a purchase

of assets or service is not recoverable from the taxation authorities in which case the sales tax is recognized as a part of the cost of

the asset or part of the expense items as applicable and receivable and payable that are stated with the amount of sales tax

included. The amount of sales tax recoverable and payable in respect of taxation authorities is included as a part of receivables

and payables in the Balance Sheet.

Borrowing costs are recognised as an expense in the period in which they are incurred, except to the extent where borrowing

costs that are directly attributable to the acquisition, construction, or production of an asset that takes a substantial period of

time to get ready for its intended use or sale, are capitalized as part of that asset.

Inventories are valued at the lower of cost and net realizable value, after making due allowances for obsolete and slow moving

items. Net realizable value is the price at which inventories can be sold in the ordinary course of business less the estimated cost

of completion and the estimated cost necessary to make the sale.

The cost incurred in bringing inventories to its present location and conditions are accounted using the following cost formulae:-

Raw Materials - At purchase cost on first-in first-out basis

Finished Goods & Working-Progress - At the cost of direct materials, direct labour and an appropriate proportion of

manufacturing overheads based on normal operating capacity, but excluding

borrowing costs.

Engineering Stock and

Other Chemicals Stock - At purchase cost on First in First out basis

Net realizable Value is the estimated selling price in the ordinary course of business, less estimated cost of completion and

estimated costs necessary to make the sale.

Southern Salt Company (Private) Limited

b) DEFERRED TAXATION

c) SALES TAX

2.3.3 BORROWING COSTS

2.3.4 INVENTORIES

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

34 35

2.3.13 REVENUE RECOGNITION

2.4 EFFECT OF SRI LANKA ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue and

associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration

received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the purpose of

recognition of revenue.

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to

buyer, usually on dispatch of the goods.

Revenue is recognised on a time proportion basis that takes into accounts the effective interest rate on asset.

Dividend Income is recognised when the shareholders’ right to receive the payment is established.

Other income is recognised on an accrual basis.

a) The following standards have been issued by the Institute of Chartered Accountants of Sri Lanka.

- Sri Lanka Accounting Standard 44 Financial Instruments; Presentation (SLAS 44)

- Sri Lanka Accounting Standard 45 Financial Instruments; Recognition and Measurement (SLAS 45)

- Sri Lanka Accounting Standard 39 Share Based Payments (SLAS 39)

The effective date of SLAS 44, 45 and 39 was changed during the year to be effective for financial periods beginning on or after

01 January 2012. These three standards have been amended and forms a part of the new set of financial reporting standards

mentioned under note (b) below.

b) Following the convergence of Sri Lanka Accounting Standards with the International Financial Reporting Standards, the Council

of the Institute of Chartered Accountants of Sri Lanka has adopted a new set of financial reporting standards that would apply

for financial periods beginning on or after 01 January 2012. The application of these financial reporting standards is

substantially different to the prevailing standards.

a) SALES OF GOODS

b) INTEREST

c) DIVIDENDS

d) OTHERS

Long Term Investments

Long term investments are stated at cost. Carrying amounts are reduced to recognize a decline other than temporary,

determined for each investment individually. These reductions for other than temporary declines in carrying amounts are

charged to income statement.

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, where it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, the

reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The expense relating to

any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material,

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, where appropriate, the risks specific to the liability. Where discounting is used, the

increase in the provision due to the passage of time is recognized as an interest expense.

The Group measures the present value of the promised retirement benefits of gratuity which is a defined benefit plan with the

advise of a qualified actuary, using the Projected Unit Credit (PUC) method for the purpose of determining the charge for any

period before the next regular actuarial valuation fall due and approximate estimation provided by the qualified actuary is used.

Actuarial gain and losses are recognized as income or expense immediately.

Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributions in line with the

respective statutes and regulations. The Group contributes 12% and 3% of gross emoluments of employees to Employees’

Provident Fund and Employees’ Trust Fund respectively.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication

exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable

amount. An asset's recoverable amount is the higher of an asset's or cashgenerating unit's fair value less costs to sell and its value

in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of

those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is

considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These

calculations are corroborated by valuation multiples or other available fair value indicators.

Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with

the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In this case

the impairment is also recognised in equity up to the amount of any previous revaluation.

For assets, an assessment is made at each reporting date as to whether there is any indication that previously recognised

impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of

recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to

determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount

of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have

been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is

recognised in the income statement unless the asset is carried at revalued amount, in which case the reversal is treated as a

revaluation increase.

2.3.10 PROVISIONS

2.3.11 RETIREMENT BENEFIT OBLIGATIONS

2.3.12 IMPAIRMENT OF NON FINANCIAL ASSETS

a) DEFINED BENEFIT PLAN – GRATUITY

b) DEFINED CONTRIBUTION PLANS – EMPLOYEES’ PROVIDENT FUND AND EMPLOYEES’ TRUST FUND

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

36 37

2.3.13 REVENUE RECOGNITION

2.4 EFFECT OF SRI LANKA ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue and

associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration

received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the purpose of

recognition of revenue.

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to

buyer, usually on dispatch of the goods.

Revenue is recognised on a time proportion basis that takes into accounts the effective interest rate on asset.

Dividend Income is recognised when the shareholders’ right to receive the payment is established.

Other income is recognised on an accrual basis.

a) The following standards have been issued by the Institute of Chartered Accountants of Sri Lanka.

- Sri Lanka Accounting Standard 44 Financial Instruments; Presentation (SLAS 44)

- Sri Lanka Accounting Standard 45 Financial Instruments; Recognition and Measurement (SLAS 45)

- Sri Lanka Accounting Standard 39 Share Based Payments (SLAS 39)

The effective date of SLAS 44, 45 and 39 was changed during the year to be effective for financial periods beginning on or after

01 January 2012. These three standards have been amended and forms a part of the new set of financial reporting standards

mentioned under note (b) below.

b) Following the convergence of Sri Lanka Accounting Standards with the International Financial Reporting Standards, the Council

of the Institute of Chartered Accountants of Sri Lanka has adopted a new set of financial reporting standards that would apply

for financial periods beginning on or after 01 January 2012. The application of these financial reporting standards is

substantially different to the prevailing standards.

a) SALES OF GOODS

b) INTEREST

c) DIVIDENDS

d) OTHERS

Long Term Investments

Long term investments are stated at cost. Carrying amounts are reduced to recognize a decline other than temporary,

determined for each investment individually. These reductions for other than temporary declines in carrying amounts are

charged to income statement.

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, where it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, the

reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The expense relating to

any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material,

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, where appropriate, the risks specific to the liability. Where discounting is used, the

increase in the provision due to the passage of time is recognized as an interest expense.

The Group measures the present value of the promised retirement benefits of gratuity which is a defined benefit plan with the

advise of a qualified actuary, using the Projected Unit Credit (PUC) method for the purpose of determining the charge for any

period before the next regular actuarial valuation fall due and approximate estimation provided by the qualified actuary is used.

Actuarial gain and losses are recognized as income or expense immediately.

Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributions in line with the

respective statutes and regulations. The Group contributes 12% and 3% of gross emoluments of employees to Employees’

Provident Fund and Employees’ Trust Fund respectively.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication

exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable

amount. An asset's recoverable amount is the higher of an asset's or cashgenerating unit's fair value less costs to sell and its value

in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of

those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is

considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These

calculations are corroborated by valuation multiples or other available fair value indicators.

Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with

the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In this case

the impairment is also recognised in equity up to the amount of any previous revaluation.

For assets, an assessment is made at each reporting date as to whether there is any indication that previously recognised

impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of

recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to

determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount

of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have

been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is

recognised in the income statement unless the asset is carried at revalued amount, in which case the reversal is treated as a

revaluation increase.

2.3.10 PROVISIONS

2.3.11 RETIREMENT BENEFIT OBLIGATIONS

2.3.12 IMPAIRMENT OF NON FINANCIAL ASSETS

a) DEFINED BENEFIT PLAN – GRATUITY

b) DEFINED CONTRIBUTION PLANS – EMPLOYEES’ PROVIDENT FUND AND EMPLOYEES’ TRUST FUND

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

36 37

Revenue from Sale of goods 297,411,339 259,531,518 297,411,339 259,531,518

297,411,339 259,531,518 297,411,339 259,531,518

Group 2011 20110 2011 2010 Rs. Rs. Rs. Rs.

Company

4. PROPERTY, PLANT & EQUIPMENT - GROUP

4.1 GROSS CARRYING AMOUNT Balance

As at Additions/ Disposals/ As at

01.04.2010 Acquisitions Transfers 31.03.2011

At Cost Rs. Rs. Rs. Rs.

Land - 5,223,000 - 5,223,000

Buildings 269,350 2,140,086 - 2,409,436

Plant & Machinery 3,653,600 45,302,704 - 45,460,419

Motor Vehicles 2,854,900 20,927,702 ( 3,495,885) 23,782,602

Furniture and Fittings 229,455 98,507 - 327,962

Factory Equipment 394,600 969,170 - 1,363,770

Office Equipment 83,000 138,921 - 221,921

Name Board 60,849 - - 60,849

Salterns Development 2,741,100 - - 2,741,100

Computers & Accessories - 971,490 - 971,490

10,286,854 75,771,579 ( 3,495,885) 82,562,548

At Valuation

Freehold Lands 186,518,750 - - 186,518,750

Buildings on Freehold Land 49,494,468 - - 49,494,468

Plant & Machinery 50,387,250 - - 50,387,250

286,400,468 - - 286,400,468

Assets on Finance Lease

Plant and Machinery 14,730,000 - - 14,730,000

14,730,000 - - 14,730,000

Total Value of Depreciable Assets 311,417,322 75,771,579 ( 3,495,885) 383,693,016

Balance

Salterns Development * 43,428,412 35,555,746 - 78,984,158

Factory Extension* - 11,274,013 - 11,274,013

Factory Building - 5,809,468 - 5,809,468

Plant Installation - 1,948,512 - 1,948,512

43,428,412 54,587,738 - 98,016,150

Total Gross Carrying Amount 354,845,734 130,359,317 ( 3,495,885) 481,709,166

4.2 IN THE COURSE OF CONSTRUCTION

* Borrowing cost amounts to Rs. 2,388,900/- has been capitalised during the year at the interest rate of 13.5%.

Buildings 39,458 35,138 - 74,596

Plant & Machinery 613,826 2,448,682 - 3,062,508

Motor Vehicles 400,644 1,630,434 - 2,031,078

Furniture and Fittings 72,404 23,767 - 96,171

Factory Equipment 37,525 73,488 - 111,013

Office Equipment 4,442 9,315 - 13,757

Name Board 6,187 9,870 - 16,057

Salterns Development 548,220 274,110 - 822,330

Computer & Accessories - 31,287 - 31,287

1,722,706 4,536,092 - 6,258,798

At Valuation

Buildings on Freehold Land 10,314,643 4,949,447 - 15,264,090

Plant and Machinery 10,498,302 5,038,725 - 15,537,027

20,812,945 9,988,172 - 30,801,117

Assets on Finance Lease

Plant and Machinery 1,103,833 1,473,000 - 2,576,833

1,103,833 1,473,000 - 2,576,833

Total Depreciation 23,639,484 15,997,264 - 39,636,748

4. PROPERTY, PLANT & EQUIPMENT (Contd...)

4.3 DEPRECIATION Balance Balance As at Charge for Transfers/ As at 01.04.2010 the Year Disposals 31.03.2011 At Cost Rs. Rs. Rs. Rs.

At Cost

Land 5,223,000 -

Buildings 2,334,839 229,892

Plant and Machinery 42,397,910 3,039,774

Motor Vehicles 21,751,523 2,454,257

Furniture and Fittings 231,791 157,051

Office Equipment 208,165 78,558

Factory Equipment 1,252,756 357,075

Name Board 44,792 54,661

Salterns Development 1,918,770 2,192,880

Computers & Accessories 940,203 -

76,303,750 8,564,148

At Valuation

Freehold Lands 186,518,750 186,518,750

Buildings on Freehold Land 34,230,378 39,179,825

Plant and Machinery 34,850,223 39,888,948

255,599,351 265,587,523

Assets on Finance Lease

Plant and Machinery 12,153,167 13,626,167

12,153,167 13,626,167

In the Course of Construction

Salterns Development 78,984,158 43,428,412

Factory Extension 11,274,013 -

Factory Building 5,809,468 -

Plant Installation 1,948,512 -

98,016,150 43,428,412

Total Carrying Amounts of Property, Plant and Equipment 442,072,419 331,206,250

4.4 NET BOOK VALUES 2011 2010 Rs. Rs.

3. REVENUE

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

38 39

Revenue from Sale of goods 297,411,339 259,531,518 297,411,339 259,531,518

297,411,339 259,531,518 297,411,339 259,531,518

Group 2011 20110 2011 2010 Rs. Rs. Rs. Rs.

Company

4. PROPERTY, PLANT & EQUIPMENT - GROUP

4.1 GROSS CARRYING AMOUNT Balance

As at Additions/ Disposals/ As at

01.04.2010 Acquisitions Transfers 31.03.2011

At Cost Rs. Rs. Rs. Rs.

Land - 5,223,000 - 5,223,000

Buildings 269,350 2,140,086 - 2,409,436

Plant & Machinery 3,653,600 45,302,704 - 45,460,419

Motor Vehicles 2,854,900 20,927,702 ( 3,495,885) 23,782,602

Furniture and Fittings 229,455 98,507 - 327,962

Factory Equipment 394,600 969,170 - 1,363,770

Office Equipment 83,000 138,921 - 221,921

Name Board 60,849 - - 60,849

Salterns Development 2,741,100 - - 2,741,100

Computers & Accessories - 971,490 - 971,490

10,286,854 75,771,579 ( 3,495,885) 82,562,548

At Valuation

Freehold Lands 186,518,750 - - 186,518,750

Buildings on Freehold Land 49,494,468 - - 49,494,468

Plant & Machinery 50,387,250 - - 50,387,250

286,400,468 - - 286,400,468

Assets on Finance Lease

Plant and Machinery 14,730,000 - - 14,730,000

14,730,000 - - 14,730,000

Total Value of Depreciable Assets 311,417,322 75,771,579 ( 3,495,885) 383,693,016

Balance

Salterns Development * 43,428,412 35,555,746 - 78,984,158

Factory Extension* - 11,274,013 - 11,274,013

Factory Building - 5,809,468 - 5,809,468

Plant Installation - 1,948,512 - 1,948,512

43,428,412 54,587,738 - 98,016,150

Total Gross Carrying Amount 354,845,734 130,359,317 ( 3,495,885) 481,709,166

4.2 IN THE COURSE OF CONSTRUCTION

* Borrowing cost amounts to Rs. 2,388,900/- has been capitalised during the year at the interest rate of 13.5%.

Buildings 39,458 35,138 - 74,596

Plant & Machinery 613,826 2,448,682 - 3,062,508

Motor Vehicles 400,644 1,630,434 - 2,031,078

Furniture and Fittings 72,404 23,767 - 96,171

Factory Equipment 37,525 73,488 - 111,013

Office Equipment 4,442 9,315 - 13,757

Name Board 6,187 9,870 - 16,057

Salterns Development 548,220 274,110 - 822,330

Computer & Accessories - 31,287 - 31,287

1,722,706 4,536,092 - 6,258,798

At Valuation

Buildings on Freehold Land 10,314,643 4,949,447 - 15,264,090

Plant and Machinery 10,498,302 5,038,725 - 15,537,027

20,812,945 9,988,172 - 30,801,117

Assets on Finance Lease

Plant and Machinery 1,103,833 1,473,000 - 2,576,833

1,103,833 1,473,000 - 2,576,833

Total Depreciation 23,639,484 15,997,264 - 39,636,748

4. PROPERTY, PLANT & EQUIPMENT (Contd...)

4.3 DEPRECIATION Balance Balance As at Charge for Transfers/ As at 01.04.2010 the Year Disposals 31.03.2011 At Cost Rs. Rs. Rs. Rs.

At Cost

Land 5,223,000 -

Buildings 2,334,839 229,892

Plant and Machinery 42,397,910 3,039,774

Motor Vehicles 21,751,523 2,454,257

Furniture and Fittings 231,791 157,051

Office Equipment 208,165 78,558

Factory Equipment 1,252,756 357,075

Name Board 44,792 54,661

Salterns Development 1,918,770 2,192,880

Computers & Accessories 940,203 -

76,303,750 8,564,148

At Valuation

Freehold Lands 186,518,750 186,518,750

Buildings on Freehold Land 34,230,378 39,179,825

Plant and Machinery 34,850,223 39,888,948

255,599,351 265,587,523

Assets on Finance Lease

Plant and Machinery 12,153,167 13,626,167

12,153,167 13,626,167

In the Course of Construction

Salterns Development 78,984,158 43,428,412

Factory Extension 11,274,013 -

Factory Building 5,809,468 -

Plant Installation 1,948,512 -

98,016,150 43,428,412

Total Carrying Amounts of Property, Plant and Equipment 442,072,419 331,206,250

4.4 NET BOOK VALUES 2011 2010 Rs. Rs.

3. REVENUE

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

38 39

Land 5,223,000 5,223,000

Building 160,910 2,140,086 - 2,300,996

Plant & Machinery 3,653,600 36,393,319 - 40,046,919

Motor Vehicles 2,854,900 24,423,587 (3,495,885) 23,782,602

Furniture and Fittings 196,955 98,507 - 295,462

Factory Equipment 394,600 628,405 - 1,023,005

Office Equipment 83,000 79,571 - 162,571

Name Board 60,849 - - 60,849

Salterns Development 2,741,100 - - 2,741,100

Computers & Accessories - 971,490 - 971,490

10,145,914 69,957,964 (3,495,885) 76,607,993

At Valuation

Freehold Lands 186,518,750 - - 186,518,750

Buildings on Freehold Land 49,494,468 - - 49,494,468

Plant & Machinery 50,387,250 - - 50,387,250

286,400,468 - - 286,400,468

Assets on Finance Lease

Plant and Machinery 14,730,000 - - 14,730,000

14,730,000 - - 14,730,000

Total Value of Depreciable Assets 311,276,382 69,957,964 (3,495,885) 377,738,461

Salterns Development 20,744,064 27,977,613 - 48,721,677

Factory Extension - 11,274,013 - 11,274,013

20,744,064 39,251,625 - 59,995,689

Total Gross Carrying Amount 332,020,446 109,209,589 (3,495,885) 437,734,150

4.6 IN THE COURSE OF CONSTRUCTION

4. PROPERTY, PLANT & EQUIPMENT - COMPANY

Balance Additions/ Disposals/ Balance

As at Transfers/ Transfers As at 01.04.2010 Acquisitions 31.03.2011 At Cost Rs. Rs. Rs. Rs.

4.5 GROSS CARRYING AMOUNTS

At Cost

Land `5,223,000 -

Building 2,261,107 145,318

Plant and Machinery 37,345,310 3,039,774

Motor Vehicles 21,751,523 2,454,257

Furniture and Fittings 207,541 129,551

Factory Equipment 930,177 357,075

Office Equipment 146,514 78,558

Name Board 48,576 54,661

Salterns Development 1,918,770 2,192,880

Computers & Accessories 940,203 -

70,772,723 8,452,074

At Valuation

Freehold Lands 186,518,750 186,518,750

Buildings on Freehold Land 34,230,378 39,179,824

Plant and Machinery 34,850,223 39,888,948

255,599,351 265,587,522

Assets on Finance Lease

Plant and Machinery 12,153,167 13,626,167

12,153,167 13,626,167

In the Course of Construction

Salterns Development 48,721,677 20,744,064

Factory Extension 11,274,013 -

59,995,689 20,744,064

Total Carrying Amounts of Property, Plant and Equipment 398,520,931 308,409,827

4.8 NET BOOK VALUES 2011 2010 Rs. Rs.

Building 15,592 24,296 39,888

Plant & Machinery 613,826 2,087,782 - 2,701,608

Motor Vehicles 400,644 1,630,434 - 2,031,078

Furniture and Fittings 67,404 20,517 - 87,921

Factory Equipment 37,525 55,302 - 92,827

Name Board 6,187 6,086 - 12,273

Office Equipment 4,442 11,615 - 16,057

Salterns Development 548,220 274,110 - 822,330

Computers & Accessories - 31,287 - 31,287

1,693,840 4,141,430 - 5,835,270

At Valuation

Buildings on Freehold Land 10,314,643 4,949,447 - 15,264,090

Plant and Machinery 10,498,302 5,038,725 - 15,537,027

20,812,945 9,988,172 - 30,801,117

Assets on Finance Lease

Plant and Machinery 1,103,833 1,473,000 - 2,576,833

1,103,833 1,473,000 - 2,576,833

Total Depreciation 23,610,618 15,602,602 - 39,213,220

4. PROPERTY, PLANT & EQUIPMENT (Contd...)

4.7 DEPRECIATION Balance Charge for Transfers/ Balance As at the year/ Disposals As at 01.04.2010 Transfers 31.03.2011 At Cost Rs. Rs. Rs. Rs.

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

40 41

Land 5,223,000 5,223,000

Building 160,910 2,140,086 - 2,300,996

Plant & Machinery 3,653,600 36,393,319 - 40,046,919

Motor Vehicles 2,854,900 24,423,587 (3,495,885) 23,782,602

Furniture and Fittings 196,955 98,507 - 295,462

Factory Equipment 394,600 628,405 - 1,023,005

Office Equipment 83,000 79,571 - 162,571

Name Board 60,849 - - 60,849

Salterns Development 2,741,100 - - 2,741,100

Computers & Accessories - 971,490 - 971,490

10,145,914 69,957,964 (3,495,885) 76,607,993

At Valuation

Freehold Lands 186,518,750 - - 186,518,750

Buildings on Freehold Land 49,494,468 - - 49,494,468

Plant & Machinery 50,387,250 - - 50,387,250

286,400,468 - - 286,400,468

Assets on Finance Lease

Plant and Machinery 14,730,000 - - 14,730,000

14,730,000 - - 14,730,000

Total Value of Depreciable Assets 311,276,382 69,957,964 (3,495,885) 377,738,461

Salterns Development 20,744,064 27,977,613 - 48,721,677

Factory Extension - 11,274,013 - 11,274,013

20,744,064 39,251,625 - 59,995,689

Total Gross Carrying Amount 332,020,446 109,209,589 (3,495,885) 437,734,150

4.6 IN THE COURSE OF CONSTRUCTION

4. PROPERTY, PLANT & EQUIPMENT - COMPANY

Balance Additions/ Disposals/ Balance

As at Transfers/ Transfers As at 01.04.2010 Acquisitions 31.03.2011 At Cost Rs. Rs. Rs. Rs.

4.5 GROSS CARRYING AMOUNTS

At Cost

Land `5,223,000 -

Building 2,261,107 145,318

Plant and Machinery 37,345,310 3,039,774

Motor Vehicles 21,751,523 2,454,257

Furniture and Fittings 207,541 129,551

Factory Equipment 930,177 357,075

Office Equipment 146,514 78,558

Name Board 48,576 54,661

Salterns Development 1,918,770 2,192,880

Computers & Accessories 940,203 -

70,772,723 8,452,074

At Valuation

Freehold Lands 186,518,750 186,518,750

Buildings on Freehold Land 34,230,378 39,179,824

Plant and Machinery 34,850,223 39,888,948

255,599,351 265,587,522

Assets on Finance Lease

Plant and Machinery 12,153,167 13,626,167

12,153,167 13,626,167

In the Course of Construction

Salterns Development 48,721,677 20,744,064

Factory Extension 11,274,013 -

59,995,689 20,744,064

Total Carrying Amounts of Property, Plant and Equipment 398,520,931 308,409,827

4.8 NET BOOK VALUES 2011 2010 Rs. Rs.

Building 15,592 24,296 39,888

Plant & Machinery 613,826 2,087,782 - 2,701,608

Motor Vehicles 400,644 1,630,434 - 2,031,078

Furniture and Fittings 67,404 20,517 - 87,921

Factory Equipment 37,525 55,302 - 92,827

Name Board 6,187 6,086 - 12,273

Office Equipment 4,442 11,615 - 16,057

Salterns Development 548,220 274,110 - 822,330

Computers & Accessories - 31,287 - 31,287

1,693,840 4,141,430 - 5,835,270

At Valuation

Buildings on Freehold Land 10,314,643 4,949,447 - 15,264,090

Plant and Machinery 10,498,302 5,038,725 - 15,537,027

20,812,945 9,988,172 - 30,801,117

Assets on Finance Lease

Plant and Machinery 1,103,833 1,473,000 - 2,576,833

1,103,833 1,473,000 - 2,576,833

Total Depreciation 23,610,618 15,602,602 - 39,213,220

4. PROPERTY, PLANT & EQUIPMENT (Contd...)

4.7 DEPRECIATION Balance Charge for Transfers/ Balance As at the year/ Disposals As at 01.04.2010 Transfers 31.03.2011 At Cost Rs. Rs. Rs. Rs.

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

40 41

Freehold Land 42,428,247 - 42,428,247 42,428,247

Building on Freehold Land 26,822,796 10,729,755 16,093,041 18,775,320

Plant and Machinery 27,840,599 11,027,697 16,812,902 19,596,962

Cumulative Depreciation Net Carrying Net Carrying Class of Asset of assets were Amount Amount Cost carried at cost 2011 2010 Rs. Rs. Rs. Rs.

4. PROPERTY, PLANT & EQUIPMENT (Contd...)

4.9

THE GROUP ARE ESTIMATED AS FOLLOWS.

THE USEFUL LIVES OF THE ASSETS OF

2011 2010

Buildings 10 Years 10 Years

Plant and Machinery 10 Years 10 Years

Motor Vehicles 10 Years 10 Years

Furniture and Fittings 10 Years 10 Years

Factory Equipments 10 Years 10 Years

Office Equipments 10 Years 10 Years

Salterns Development 10 Years 10 Years

Name Board 10 Years 10 Years

Computer & Accessories 10 Years 10 Years

Leasehold Land During the lease period from the month of operation commenced.

Non Current

Investment in Equity Securities - - 11,823,540 5,000,000

Acquisition of Investments - - 50,000,000 6,823,540

Balance as at 31 March (5.1) - - 61,823,540 11,823,540

5. INVESTMENTS Group Company

2011 2010 2011 2010 Rs. Rs. Rs. Rs.

Group Company 2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Acquisition of Investments in Fixed Deposits 150,000,000 - 150,000,000 -

Balance as at 31 March 150,000,000 - 150,000,000 -

5.2 INVESTMENT

Investments with Other Parties:

Southern Salt Co. (Pvt) Ltd 100% 100% 61,823,540 61,823,540 11,823,540 11,823,540

Total Investments in Non-Quoted Equity Securities 61,823,540 61,823,540 11,823,540 11,823,540

Total Gross Carrying Value of Investments in

Equity Securities 61,823,540 11,823,540

Provision for Decline in Value Other than Temporary - -

Total Net Carrying Value of Investments 61,823,540 11,823,540

Carrying Directors' Carrying Directors' % of Holding Value Valuation Value Valuation 2011 2010 2011 2011 2010 2010 Rs. Rs. Rs. Rs.

5.1 NON-QUOTED - COMPANY

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

As at the Beginning of the Year 1,200,000 1,200,000 - -

As at the End of the Year 1,200,000 1,200,000 - -

Leasehold land obtained for a period of 30 years for the purpose of establishment of a saltern and other related activities.

6. LEASEHOLD LAND

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Raw Materials 13,104,929 1,348,752 11,722,727 1,348,752

Finished Goods 7,199,785 3,080,749 7,199,785 3,080,749

Packing Materials 7,006,368 1,703,515 7,006,368 1,703,515

Other Chemical Stocks 939,500 330,218 939,500 330,218

Engineering Stocks 940,753 549,201 940,754 549,201

29,191,336 7,012,435 27,809,135 7,012,435

7. INVENTORIES

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Trade Debtors - Others 56 061 232 44 268 535 56 061 232 44 268 535

Less : Provision for Doubtful Debts (1,139,843) (1,139,843) (1,139,843) (1,139,843)

54,921,389 43,128,692 54,921,389 43,128,692

Other Debtors-Related Parties (8.1) 96,186,331 108,296,070 98,275,295 126,258,681

Advances, Prepayments and Deposits 25,308,574 3,001,593 16,647,962 1,536,539

176,416,295 154,426,355 169,844,646 170,923,912

8. TRADE AND OTHER RECEIVABLES

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

42 43

Freehold Land 42,428,247 - 42,428,247 42,428,247

Building on Freehold Land 26,822,796 10,729,755 16,093,041 18,775,320

Plant and Machinery 27,840,599 11,027,697 16,812,902 19,596,962

Cumulative Depreciation Net Carrying Net Carrying Class of Asset of assets were Amount Amount Cost carried at cost 2011 2010 Rs. Rs. Rs. Rs.

4. PROPERTY, PLANT & EQUIPMENT (Contd...)

4.9

THE GROUP ARE ESTIMATED AS FOLLOWS.

THE USEFUL LIVES OF THE ASSETS OF

2011 2010

Buildings 10 Years 10 Years

Plant and Machinery 10 Years 10 Years

Motor Vehicles 10 Years 10 Years

Furniture and Fittings 10 Years 10 Years

Factory Equipments 10 Years 10 Years

Office Equipments 10 Years 10 Years

Salterns Development 10 Years 10 Years

Name Board 10 Years 10 Years

Computer & Accessories 10 Years 10 Years

Leasehold Land During the lease period from the month of operation commenced.

Non Current

Investment in Equity Securities - - 11,823,540 5,000,000

Acquisition of Investments - - 50,000,000 6,823,540

Balance as at 31 March (5.1) - - 61,823,540 11,823,540

5. INVESTMENTS Group Company

2011 2010 2011 2010 Rs. Rs. Rs. Rs.

Group Company 2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Acquisition of Investments in Fixed Deposits 150,000,000 - 150,000,000 -

Balance as at 31 March 150,000,000 - 150,000,000 -

5.2 INVESTMENT

Investments with Other Parties:

Southern Salt Co. (Pvt) Ltd 100% 100% 61,823,540 61,823,540 11,823,540 11,823,540

Total Investments in Non-Quoted Equity Securities 61,823,540 61,823,540 11,823,540 11,823,540

Total Gross Carrying Value of Investments in

Equity Securities 61,823,540 11,823,540

Provision for Decline in Value Other than Temporary - -

Total Net Carrying Value of Investments 61,823,540 11,823,540

Carrying Directors' Carrying Directors' % of Holding Value Valuation Value Valuation 2011 2010 2011 2011 2010 2010 Rs. Rs. Rs. Rs.

5.1 NON-QUOTED - COMPANY

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

As at the Beginning of the Year 1,200,000 1,200,000 - -

As at the End of the Year 1,200,000 1,200,000 - -

Leasehold land obtained for a period of 30 years for the purpose of establishment of a saltern and other related activities.

6. LEASEHOLD LAND

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Raw Materials 13,104,929 1,348,752 11,722,727 1,348,752

Finished Goods 7,199,785 3,080,749 7,199,785 3,080,749

Packing Materials 7,006,368 1,703,515 7,006,368 1,703,515

Other Chemical Stocks 939,500 330,218 939,500 330,218

Engineering Stocks 940,753 549,201 940,754 549,201

29,191,336 7,012,435 27,809,135 7,012,435

7. INVENTORIES

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Trade Debtors - Others 56 061 232 44 268 535 56 061 232 44 268 535

Less : Provision for Doubtful Debts (1,139,843) (1,139,843) (1,139,843) (1,139,843)

54,921,389 43,128,692 54,921,389 43,128,692

Other Debtors-Related Parties (8.1) 96,186,331 108,296,070 98,275,295 126,258,681

Advances, Prepayments and Deposits 25,308,574 3,001,593 16,647,962 1,536,539

176,416,295 154,426,355 169,844,646 170,923,912

8. TRADE AND OTHER RECEIVABLES

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

42 43

8.1 OTHER RECEIVABLES FROM RELATED PARTIES

Raigam Marketing Services (Pvt) Ltd Parent Company 65,434,360 78,044,455 65,434,360 78,044,455

Dream Life Science (Pvt) Ltd Other Related Party 19,218,936 18,948,000 19,218,936 18,948,000

Raigam Herbal Remedies (Pvt) Ltd Other Related Party 8,556,500 8,556,500 8,556,500 8,556,500

Raigam Eastern Salt Company (Pvt) Ltd Other Related Party 1,165,890 936,470 1,165,890 936,470

Southern Salt Company (Pvt) Ltd Subsidiary Company - - 2,088,964 17,962,611

Raigam Distributors (Pvt) Ltd Other Related Party 1,810,645 1 ,810,645 1,810,645 1,810,645

96,186,331 108,296,070 98,275,295 126,258,681

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Relationship

9. STATED CAPITAL 2011 2010

Number Rs. Number Rs.

Fully Paid Ordinary Shares 87,500,010 404,414,629 20,441,464 204,414,629

Issue of Shares for Non Cash Consideration 194,707,310 200,000,000 20,000,000 200,000,000

Transferred to Stated Capital during the Year from

Retained Earnings - 11 - 11

282,207,320 604,414,640 40,441,464 404,414,640

Share Split (1:5) - - 202,207,320 -

Issue of Shares at 2.50 Per Share - - 80,000,000 200,000,000

Balance as at the End of the Year 282,207,320 604,414,640 282,207,320 604,414,640

10. INTEREST BEARING LOANS AND BORROWINGS - GROUP

Amount Amount Amount AmountRepayable Repayable 2011 Repayable Repayable 2010

Within 1 Year After 1 Year Total Within 1 Year After 1 Year TotalRs. Rs. Rs. Rs. Rs. Rs

Bank Loans (10.1) 4,000,000 983,586 4,983,586 4,000,000 4,666,666 8,666,666

Finance Leases (10.2) 3,709,625 5,800,072 9,509,697 3,102,133 9,427,697 12,529,830

Bank Overdrafts (19.2) 108,211,395 - 108,211,395 27,593,131 - 27,593,131

115,921,020 6,783,658 122,704,678 34,695,264 14,094,363 48,789,627

10.1 BANK LOANS

10.2 FINANCE LEASES

As at Loans As at

01.04.2010 Obtained Repayments 31.03.2011

Rs. Rs. Rs. Rs.

People's Bank 8,666,666 - (3,683,080) 4,983,586

8,666,666 - (3,683,080) 4,983,586

New Leases /

As at Hire Purchase As at

01.04.2010 Obtained Repayments 31.03.2011

Rs. Rs. Rs. Rs.

Sampath Bank PLC 15,863,955 - (4,803,835) 11,060,120

15,863,955 - (4,803,835) 11,060,120

Gross Liability 15,863,955 11,060,120

Finance Charges Allocated to Future Periods (3,334,125) (1,550,423)

Net Liability 12,529,830 9,509,697

10.3 INTEREST BEARING LOANS AND BORROWINGS - COMPANY

Amount Amount Amount AmountRepayable Repayable 2011 Repayable Repayable 2010

Within 1 Year After 1 Year Total Within 1 Year After 1 Year TotalRs. Rs. Rs. Rs. Rs. Rs

Bank Loans (10.4) 4,000,000 983,586 4,983,586 4,000,000 4,666,667 8,666,667

Finance Leases (10.5) 3,709,625 5,800,072 9,509,697 3,102,133 9,427,697 12,529,830

Bank Overdrafts (19.2) 106,853,143 - 106,853,143 27,406,317 - 27,406,317

114,562,768 6,783,658 121,346,425 34,508,450 14,094,364 48,602,814

10.4 BANK LOANS As at Loans As atTerms of

Interst Rate Repayments 01.04.2010 Obtained Repayment 31.03.2011Rs. Rs. Rs. Rs

People's Bank 16% 60 Installments 8,666,666 - (3,683,080) 4,983,586

8,666,666 - (3,683,080) 4,983,586

10.5 FINANCE LEASES As at New Leases As at01.04.2010 Obtained Repayment 31.03.2011

Rs. Rs. Rs. Rs.

Sampath Bank PLC

15,863,955 - (4,803,835) 11,060,120

Gross Liability 15,863,955 11,060,120

Finance Charges allocated to Future Periods ( 3,334,125) (1,550,423)

Net Liability 12,529,830 9,509,697

15,863,955 - (4,803,835) 11,060,120

11. NON INTEREST BEARING LOANS AND BORROWINGS - (COMPANY & GROUP)

Amount Amount Amount AmountRepayable Repayable 2011 Repayable Repayable 2010

Relationship Within 1 Year After 1 Year Total Within 1 Year After 1 Year Total

Raigam Marketing

Service (Pvt) Ltd (11.1) Parent Company - - - 23,189,355 - 23,189,355

- - - 23,189,355 - 23,189,355

The loan has been obtained at a free interest rate.

11.1 INTER COMPANY LOAN As at Loans As at

01.04.2010 Obtained Repayment 31.03.2011

Rs. Rs. Rs. Rs.

Raigam Marketing Services (Pvt) Ltd 23,189,355 - (23,189,355) -

23,189,355 - (23,189,355)

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

44 45

10. INTEREST BEARING LOANS AND BORROWINGS - COMPANY

8.1 OTHER RECEIVABLES FROM RELATED PARTIES

Raigam Marketing Services (Pvt) Ltd Parent Company 65,434,360 78,044,455 65,434,360 78,044,455

Dream Life Science (Pvt) Ltd Other Related Party 19,218,936 18,948,000 19,218,936 18,948,000

Raigam Herbal Remedies (Pvt) Ltd Other Related Party 8,556,500 8,556,500 8,556,500 8,556,500

Raigam Eastern Salt Company (Pvt) Ltd Other Related Party 1,165,890 936,470 1,165,890 936,470

Southern Salt Company (Pvt) Ltd Subsidiary Company - - 2,088,964 17,962,611

Raigam Distributors (Pvt) Ltd Other Related Party 1,810,645 1 ,810,645 1,810,645 1,810,645

96,186,331 108,296,070 98,275,295 126,258,681

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Relationship

9. STATED CAPITAL 2011 2010

Number Rs. Number Rs.

Fully Paid Ordinary Shares 87,500,010 404,414,629 20,441,464 204,414,629

Issue of Shares for Non Cash Consideration 194,707,310 200,000,000 20,000,000 200,000,000

Transferred to Stated Capital during the Year from

Retained Earnings - 11 - 11

282,207,320 604,414,640 40,441,464 404,414,640

Share Split (1:5) - - 202,207,320 -

Issue of Shares at 2.50 Per Share - - 80,000,000 200,000,000

Balance as at the End of the Year 282,207,320 604,414,640 282,207,320 604,414,640

10. INTEREST BEARING LOANS AND BORROWINGS - GROUP

Amount Amount Amount AmountRepayable Repayable 2011 Repayable Repayable 2010

Within 1 Year After 1 Year Total Within 1 Year After 1 Year TotalRs. Rs. Rs. Rs. Rs. Rs

Bank Loans (10.1) 4,000,000 983,586 4,983,586 4,000,000 4,666,666 8,666,666

Finance Leases (10.2) 3,709,625 5,800,072 9,509,697 3,102,133 9,427,697 12,529,830

Bank Overdrafts (19.2) 108,211,395 - 108,211,395 27,593,131 - 27,593,131

115,921,020 6,783,658 122,704,678 34,695,264 14,094,363 48,789,627

10.1 BANK LOANS

10.2 FINANCE LEASES

As at Loans As at

01.04.2010 Obtained Repayments 31.03.2011

Rs. Rs. Rs. Rs.

People's Bank 8,666,666 - (3,683,080) 4,983,586

8,666,666 - (3,683,080) 4,983,586

New Leases /

As at Hire Purchase As at

01.04.2010 Obtained Repayments 31.03.2011

Rs. Rs. Rs. Rs.

Sampath Bank PLC 15,863,955 - (4,803,835) 11,060,120

15,863,955 - (4,803,835) 11,060,120

Gross Liability 15,863,955 11,060,120

Finance Charges Allocated to Future Periods (3,334,125) (1,550,423)

Net Liability 12,529,830 9,509,697

10.3 INTEREST BEARING LOANS AND BORROWINGS - COMPANY

Amount Amount Amount AmountRepayable Repayable 2011 Repayable Repayable 2010

Within 1 Year After 1 Year Total Within 1 Year After 1 Year TotalRs. Rs. Rs. Rs. Rs. Rs

Bank Loans (10.4) 4,000,000 983,586 4,983,586 4,000,000 4,666,667 8,666,667

Finance Leases (10.5) 3,709,625 5,800,072 9,509,697 3,102,133 9,427,697 12,529,830

Bank Overdrafts (19.2) 106,853,143 - 106,853,143 27,406,317 - 27,406,317

114,562,768 6,783,658 121,346,425 34,508,450 14,094,364 48,602,814

10.4 BANK LOANS As at Loans As atTerms of

Interst Rate Repayments 01.04.2010 Obtained Repayment 31.03.2011Rs. Rs. Rs. Rs

People's Bank 16% 60 Installments 8,666,666 - (3,683,080) 4,983,586

8,666,666 - (3,683,080) 4,983,586

10.5 FINANCE LEASES As at New Leases As at01.04.2010 Obtained Repayment 31.03.2011

Rs. Rs. Rs. Rs.

Sampath Bank PLC

15,863,955 - (4,803,835) 11,060,120

Gross Liability 15,863,955 11,060,120

Finance Charges allocated to Future Periods ( 3,334,125) (1,550,423)

Net Liability 12,529,830 9,509,697

15,863,955 - (4,803,835) 11,060,120

11. NON INTEREST BEARING LOANS AND BORROWINGS - (COMPANY & GROUP)

Amount Amount Amount AmountRepayable Repayable 2011 Repayable Repayable 2010

Relationship Within 1 Year After 1 Year Total Within 1 Year After 1 Year Total

Raigam Marketing

Service (Pvt) Ltd (11.1) Parent Company - - - 23,189,355 - 23,189,355

- - - 23,189,355 - 23,189,355

The loan has been obtained at a free interest rate.

11.1 INTER COMPANY LOAN As at Loans As at

01.04.2010 Obtained Repayment 31.03.2011

Rs. Rs. Rs. Rs.

Raigam Marketing Services (Pvt) Ltd 23,189,355 - (23,189,355) -

23,189,355 - (23,189,355)

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

44 45

10. INTEREST BEARING LOANS AND BORROWINGS - COMPANY

12.3 PRINCIPAL ASSUMPTIONS IN APPLYING GRATUITY FORMULAE

Messrs. Actuarial & Management Consultants (Pvt) Ltd., Actuaries carried out an actuarial valuation of the defined benefit plan

gratuity on 31.03.2011 and Liability related to the prior year has been accounted using formula method. Appropriate

assumptions were used in determining the cost of retirement benefits and the principal assumptions used are given below.

2011 2010

Staff Turnover Ratio 5% 5%

Salary Increase Rate 10% 10%

Discount Rate 11.0% 9.5%

Retirement Age 55 Years 55 Years

13. INCOME TAX - GROUP/COMPANY

The major components of income tax expense for the Years ended 31 March are as follows :

Income Statement 2011 2010

Current Income Tax Rs. Rs.Current Income Tax Charge (13.1) 6,498,359 -

Deferred Income Tax

Deferred Taxation Charge / (Reversal) (13.2) (202,057) -

Income tax expense reported in the Income Statement 6,296,302 -

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Trade Payables - Others 2,165,510 1,417,290 2,165,510 1,417,290

- Related Parties (14.1) 263,597 1,856,808 263,597 1,856,808

Other Payables - Related Parties (14.2) 793,000 793,000 43,000 43,000

Sundry Creditors Including Accrued Expenses 15,020,158 18,537,956 13,808,883 18,511,664

Excess Funds Refundable Against IPO Proceeds 318,000 928,118,044 318,000 928,118,044

18,560,265 950,723,098 16,598,990 949,946,806

Relationship

Puttalam Salt Ltd Other Related Party 263,597 1,856,808 263,597 1,856,808

263,597 1,856,808 263,597 1,856,808

Relationship

Raigam Marketing Services (Pvt) Ltd Parent Company 750,000 750,000 - -

Raigam Creations (Pvt) Ltd Other Related Party 43,000 43,000 43,000 43,000

793,000 793,000 43,000 43,000

14.1 TRADE PAYABLES TO THE RELATED PARTIES

14.2 OTHER PAYABLES TO RELATEDPARTIES

14. TRADE AND OTHER PAYABLES

12. OTHER DEFERRED LIABILITIES

2011 2010

Rs. Rs.

Accounting Profit Before Tax 64,161,794 71,323,104

Aggregate Disallowed Items (64,161,794) (71,323,104)

- -

Other Income 20,928,425 -

Tax Losses brought forward and utilised (2,636,071) -

Taxable Profit 18,292,354 -

Current Income Tax Expense 35% 6,402,324 -

Social Responsibility Levy 1.5% 96,035 -

Current Income Tax Expense 6,498,359 -

There is no income tax expense on profit of trade and business. (Refer Note No. 2.3.2)

13.1 A RECONCILIATION BETWEEN TAX EXPENSE AND THE PRODUCT OF ACCOUNTING

PROFIT MULTIPLIED BY THE STATUTORY TAX RATE IS AS FOLLOWS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

46 47

13.2 DEFERRED TAX ASSETS, LIABILITIES AND INCOME TAX RELATE TO THE FOLLOWINGS;

Balance Sheet Income Statement2011 2011

Rs. Rs.

Deferred Tax Liability / (Assets)

Capital Allowances for Tax Purposes (82,815) (82,815)

(82,815)

Deferred Tax Assets

Defined Benefit Plans (119,242) (119,242)

(119,242)

(202,057)

Net Deferred Tax Liability / (Asset) (202,057)

Deferred Income Tax Income / (Expense )

12.3 PRINCIPAL ASSUMPTIONS IN APPLYING GRATUITY FORMULAE

Messrs. Actuarial & Management Consultants (Pvt) Ltd., Actuaries carried out an actuarial valuation of the defined benefit plan

gratuity on 31.03.2011 and Liability related to the prior year has been accounted using formula method. Appropriate

assumptions were used in determining the cost of retirement benefits and the principal assumptions used are given below.

2011 2010

Staff Turnover Ratio 5% 5%

Salary Increase Rate 10% 10%

Discount Rate 11.0% 9.5%

Retirement Age 55 Years 55 Years

13. INCOME TAX - GROUP/COMPANY

The major components of income tax expense for the Years ended 31 March are as follows :

Income Statement 2011 2010

Current Income Tax Rs. Rs.Current Income Tax Charge (13.1) 6,498,359 -

Deferred Income Tax

Deferred Taxation Charge / (Reversal) (13.2) (202,057) -

Income tax expense reported in the Income Statement 6,296,302 -

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Trade Payables - Others 2,165,510 1,417,290 2,165,510 1,417,290

- Related Parties (14.1) 263,597 1,856,808 263,597 1,856,808

Other Payables - Related Parties (14.2) 793,000 793,000 43,000 43,000

Sundry Creditors Including Accrued Expenses 15,020,158 18,537,956 13,808,883 18,511,664

Excess Funds Refundable Against IPO Proceeds 318,000 928,118,044 318,000 928,118,044

18,560,265 950,723,098 16,598,990 949,946,806

Relationship

Puttalam Salt Ltd Other Related Party 263,597 1,856,808 263,597 1,856,808

263,597 1,856,808 263,597 1,856,808

Relationship

Raigam Marketing Services (Pvt) Ltd Parent Company 750,000 750,000 - -

Raigam Creations (Pvt) Ltd Other Related Party 43,000 43,000 43,000 43,000

793,000 793,000 43,000 43,000

14.1 TRADE PAYABLES TO THE RELATED PARTIES

14.2 OTHER PAYABLES TO RELATEDPARTIES

14. TRADE AND OTHER PAYABLES

12. OTHER DEFERRED LIABILITIES

2011 2010

Rs. Rs.

Accounting Profit Before Tax 64,161,794 71,323,104

Aggregate Disallowed Items (64,161,794) (71,323,104)

- -

Other Income 20,928,425 -

Tax Losses brought forward and utilised (2,636,071) -

Taxable Profit 18,292,354 -

Current Income Tax Expense 35% 6,402,324 -

Social Responsibility Levy 1.5% 96,035 -

Current Income Tax Expense 6,498,359 -

There is no income tax expense on profit of trade and business. (Refer Note No. 2.3.2)

13.1 A RECONCILIATION BETWEEN TAX EXPENSE AND THE PRODUCT OF ACCOUNTING

PROFIT MULTIPLIED BY THE STATUTORY TAX RATE IS AS FOLLOWS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

46 47

13.2 DEFERRED TAX ASSETS, LIABILITIES AND INCOME TAX RELATE TO THE FOLLOWINGS;

Balance Sheet Income Statement2011 2011

Rs. Rs.

Deferred Tax Liability / (Assets)

Capital Allowances for Tax Purposes (82,815) (82,815)

(82,815)

Deferred Tax Assets

Defined Benefit Plans (119,242) (119,242)

(119,242)

(202,057)

Net Deferred Tax Liability / (Asset) (202,057)

Deferred Income Tax Income / (Expense )

17. EARNINGS PER SHARE

17.1 Basic Earnings Per Share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted average

number of ordinary shares outstanding during the year. The weighted average number of ordinary shares outstanding during the year

and the previous year are adjusted for events, if any, that have changed the number of ordinary shares outstanding, without a

corresponding change in the resources such as a bonus issue.

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Interest Income 20,928,425 14,001 20,928,425 14,001

20,928,425 14,001 20,928,425 14,001

15. OTHER INCOME

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Interest Charges 7,435,597 6,323,978 7,390,147 6,309,463

Lease Interest Charges 1,783,700 1,140,030 1,783,700 1,140,030

9,219,297 7,464,008 9,173,847 7,449,493

16. FINANCE COST

17.2 The following reflects the income and share data used in the Basic Earnings Per Share computation.

Group Company

2011 2010 2011 2010

Amount Used as the Numerator: Rs. Rs. Rs. Rs.

Net Profit Attributable to Ordinary Shareholders for

Basic Earnings Per Share 57,865,492 51,256,027 65,026,802 53,188,775

2011 2010 2011 2010

Number of Ordinary Shares Used as Denominator: Number Number Number Number

Weighted Average Number of Ordinary Shares in

Issue Applicable to Basic Earning Per Share 282,207,320 282,207,320 282,207,320 282,207,320

Group Company 2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Included in Cost of Sales

Depreciation 13,297,844 10,275,112 12,907,914 10,275,112

Staff Costs includes 40,117,153 31,848,525 40,117,153 31,826,066

- Defined Benefit Plan Costs - Gratuity 531,045 - 531,045 (4,592)

- Defined Contribution Plan Costs - EPF & ETF 2,471,044 2,243,528 2,471,044 2,243,528

Depreciation 2,694,687 1,143,727 2,694,687 1,131,287

Research & Development Expenditure Written Off - 338,000 - -

Staff Costs includes 24,276,041 - 19,335,803 12,273,224

- Defined Benefit Plan Costs -Gratuity - (21,480) - (21,480)

- Defined Contribution Plan Costs - EPF & ETF 391,495 974,555 391,495 974,555

Other 1,503,551 - 1,503,551 -

IPO Expenses 2,098,011 6,612,172 2,098,011 6,612,172

Audit Fee & Expenses 190,600 143,750 160,000 118,000

Loss on Disposal of Property, Plant and Equipment 103,028 1,175,333 103,028 1,775,333

Included in Administrative Expenses

18. PROFIT FROM CONTINUING OPERATIONS

19. CASH AND CASH EQUIVALENTS IN CASH FLOW STATEMENT

19.1 FAVOURABLE CASH & CASH EQUIVALENT BALANCES

19.2 UNFAVOURABLE CASH & CASH EQUIVALENT BALANCES

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Cash & Bank Balances 5,741,719 1,130,918,151 5,673,078 1,130,838,150

Bank Overdrafts (10) (108,211,395) (27,593,131) (106,853,143) (27,406,317)

Total Cash and Cash Equivalents for the

Purpose of Cash Flow Statement (102,469,676) 1,103,325,020 (101,180,065) 1,103,431,833

20. COMMITMENTS AND CONTINGENCIES

20.1 CAPITAL EXPENDITURE COMMITMENTS

Commitments for acquisition of Salterns Development as at the Balance Sheet date is as follows;

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.Authorised by the Board, but not contracted for 50,000,000 15,000,000 50,000,000 15,000,000

50,000,000 15,000,000 50,000,000 15,000,000

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

48 49

17. EARNINGS PER SHARE

17.1 Basic Earnings Per Share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted average

number of ordinary shares outstanding during the year. The weighted average number of ordinary shares outstanding during the year

and the previous year are adjusted for events, if any, that have changed the number of ordinary shares outstanding, without a

corresponding change in the resources such as a bonus issue.

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Interest Income 20,928,425 14,001 20,928,425 14,001

20,928,425 14,001 20,928,425 14,001

15. OTHER INCOME

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Interest Charges 7,435,597 6,323,978 7,390,147 6,309,463

Lease Interest Charges 1,783,700 1,140,030 1,783,700 1,140,030

9,219,297 7,464,008 9,173,847 7,449,493

16. FINANCE COST

17.2 The following reflects the income and share data used in the Basic Earnings Per Share computation.

Group Company

2011 2010 2011 2010

Amount Used as the Numerator: Rs. Rs. Rs. Rs.

Net Profit Attributable to Ordinary Shareholders for

Basic Earnings Per Share 57,865,492 51,256,027 65,026,802 53,188,775

2011 2010 2011 2010

Number of Ordinary Shares Used as Denominator: Number Number Number Number

Weighted Average Number of Ordinary Shares in

Issue Applicable to Basic Earning Per Share 282,207,320 282,207,320 282,207,320 282,207,320

Group Company 2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Included in Cost of Sales

Depreciation 13,297,844 10,275,112 12,907,914 10,275,112

Staff Costs includes 40,117,153 31,848,525 40,117,153 31,826,066

- Defined Benefit Plan Costs - Gratuity 531,045 - 531,045 (4,592)

- Defined Contribution Plan Costs - EPF & ETF 2,471,044 2,243,528 2,471,044 2,243,528

Depreciation 2,694,687 1,143,727 2,694,687 1,131,287

Research & Development Expenditure Written Off - 338,000 - -

Staff Costs includes 24,276,041 - 19,335,803 12,273,224

- Defined Benefit Plan Costs -Gratuity - (21,480) - (21,480)

- Defined Contribution Plan Costs - EPF & ETF 391,495 974,555 391,495 974,555

Other 1,503,551 - 1,503,551 -

IPO Expenses 2,098,011 6,612,172 2,098,011 6,612,172

Audit Fee & Expenses 190,600 143,750 160,000 118,000

Loss on Disposal of Property, Plant and Equipment 103,028 1,175,333 103,028 1,775,333

Included in Administrative Expenses

18. PROFIT FROM CONTINUING OPERATIONS

19. CASH AND CASH EQUIVALENTS IN CASH FLOW STATEMENT

19.1 FAVOURABLE CASH & CASH EQUIVALENT BALANCES

19.2 UNFAVOURABLE CASH & CASH EQUIVALENT BALANCES

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Cash & Bank Balances 5,741,719 1,130,918,151 5,673,078 1,130,838,150

Bank Overdrafts (10) (108,211,395) (27,593,131) (106,853,143) (27,406,317)

Total Cash and Cash Equivalents for the

Purpose of Cash Flow Statement (102,469,676) 1,103,325,020 (101,180,065) 1,103,431,833

20. COMMITMENTS AND CONTINGENCIES

20.1 CAPITAL EXPENDITURE COMMITMENTS

Commitments for acquisition of Salterns Development as at the Balance Sheet date is as follows;

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.Authorised by the Board, but not contracted for 50,000,000 15,000,000 50,000,000 15,000,000

50,000,000 15,000,000 50,000,000 15,000,000

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

48 49

22.2 TRANSACTION WITH THE SUBSIDIARY AND OTHER RELATED ENTITIES

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Balance as at 01 April 28,351,807 24,888,400 46,314,418 28,637,029

Fund Transfers 500,356 5,320,215 34,626,709 47,932,167

Loan Obtained - - - (28,397,970)

Purchase of Goods and Service (71,639,697) (67,962,826) (71,639,697) (67,962,826)

Settlement for Purchase of Goods and Service 73,232,908 66,106,018 73,232,908 66,106,018

Issue of shares - - (50,000,000) -

Balance as at 31 March 30,445,374 28,351,807 32,534,338 46,314,418

20.2 CONTINGENCIES

21. ASSETS PLEDGED - COMPANY/GROUP

The Group does not have significant contingencies as at the Balance Sheet date

The following assets have been pledged as security for liabilities.

Nature of the assets Pledged Obtained Assets Pledged Assets Pledged Under

2011 2010

Land at Palavi Loans and Overdraft Facility 187 Mn 187 Mn Property, Plant

Building at Palavi Loans and Overdraft Facility 34 Mn 39 Mn and Equipment

Machinery at Palavi Overdraft Facility 35 Mn 40

Fixed Deposit Overdraft Facility 150 Mn - Investment

Facility Carrying Value of the Included

22. RELATED PARTY DISCLOSURES

22.1 TRANSACTION WITH THE PARENT

Details of significant related party disclosures are as follows:

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Balance as at 01 April 54,855,100 59,406,954 54,855,100 59,406,954

Fund Transfers (12,610,095) 18,637,501 (12,610,095) 18,637,501

Loan Obtained - (23,189,355) - (23,189,355)

Loan Repayment 23,189,355 - 23,189,355 -

Balance as at 31 March 65,434,360 54,855,100 65,434,360 54,855,100

22.3 TRANSACTIONS WITH ENTITIES THAT ARE CONTROLLED OR SIGNIFICANT INFLUENCED

` BY KEY MANAGEMENT PERSONNEL OR THEIR CLOSE MEMBERS OF FAMILY

22.4 KEY MANAGEMENT PERSONNEL COMPENSATIONS

23. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

a)

Sheet date, in respect of lease agreement no 012/L/2009/SBL/PET.

b) Joint and Several Guarantee for Rs.8,312,020 has been executed by Mr.N.B.W.C.Prashantha and Dr. R.Liyanage as at the Balance

Sheet date, in respect of lease agreement no 011/L/2009/SBL/PET.

c) Joint and Several Guarantee for Rs. 4,761,340 has been executed by Dr.R.Liyanage, Mr. K.R. Theodore, Mr. G.V.P.G. Amarasinghe,

Mrs. G.P. Maddumage, Mrs. M.U.N.Perera, Mrs. R.A.S.M. Dharmajeewa as at the Balance Sheet date, in respect of lease agreement

numbers 020, 021 and 022/L/2007/SBL/PET.

d) Joint and Several Guarantee has been executed by Mr.K.R.Theodore and G.V.P.G.Amarasinghe as at the Balance Sheet date, in

respect of bank loan of 20 Mn.

2011 2010

Rs. Rs.

Short Term Employee Benefits 2 ,100,000 -

There have been no material events occurring after the Balance Sheet date that require adjustments to or disclosure in the

Financial Statements.

Joint and Several Guarantee for Rs.9,499,452 has been executed by Mr.G.V.P.G.Amarasinghe and Dr. R.Liyanage as at the Balance

The above transactions are included in current liabilities as balance due to related parties and non interest bearing

borrowings and in current assets as balance due from related parties.

The above other related companies include following companies.

- Southern Salt Company (Pvt) Ltd

- Raigam Creations (Pvt) Ltd

- Raigam Distributors (Pvt) Ltd

- Raigam Herbal Remedies (Pvt) Ltd

- Raigam Eastern Salt Company (Pvt) Ltd

- Dream Life Science (Pvt) Ltd

- Puttalam Salt Limited

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

50 51

22.2 TRANSACTION WITH THE SUBSIDIARY AND OTHER RELATED ENTITIES

Group Company

2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Balance as at 01 April 28,351,807 24,888,400 46,314,418 28,637,029

Fund Transfers 500,356 5,320,215 34,626,709 47,932,167

Loan Obtained - - - (28,397,970)

Purchase of Goods and Service (71,639,697) (67,962,826) (71,639,697) (67,962,826)

Settlement for Purchase of Goods and Service 73,232,908 66,106,018 73,232,908 66,106,018

Issue of shares - - (50,000,000) -

Balance as at 31 March 30,445,374 28,351,807 32,534,338 46,314,418

20.2 CONTINGENCIES

21. ASSETS PLEDGED - COMPANY/GROUP

The Group does not have significant contingencies as at the Balance Sheet date

The following assets have been pledged as security for liabilities.

Nature of the assets Pledged Obtained Assets Pledged Assets Pledged Under

2011 2010

Land at Palavi Loans and Overdraft Facility 187 Mn 187 Mn Property, Plant

Building at Palavi Loans and Overdraft Facility 34 Mn 39 Mn and Equipment

Machinery at Palavi Overdraft Facility 35 Mn 40

Fixed Deposit Overdraft Facility 150 Mn - Investment

Facility Carrying Value of the Included

22. RELATED PARTY DISCLOSURES

22.1 TRANSACTION WITH THE PARENT

Details of significant related party disclosures are as follows:

Group Company2011 2010 2011 2010

Rs. Rs. Rs. Rs.

Balance as at 01 April 54,855,100 59,406,954 54,855,100 59,406,954

Fund Transfers (12,610,095) 18,637,501 (12,610,095) 18,637,501

Loan Obtained - (23,189,355) - (23,189,355)

Loan Repayment 23,189,355 - 23,189,355 -

Balance as at 31 March 65,434,360 54,855,100 65,434,360 54,855,100

22.3 TRANSACTIONS WITH ENTITIES THAT ARE CONTROLLED OR SIGNIFICANT INFLUENCED

` BY KEY MANAGEMENT PERSONNEL OR THEIR CLOSE MEMBERS OF FAMILY

22.4 KEY MANAGEMENT PERSONNEL COMPENSATIONS

23. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

a)

Sheet date, in respect of lease agreement no 012/L/2009/SBL/PET.

b) Joint and Several Guarantee for Rs.8,312,020 has been executed by Mr.N.B.W.C.Prashantha and Dr. R.Liyanage as at the Balance

Sheet date, in respect of lease agreement no 011/L/2009/SBL/PET.

c) Joint and Several Guarantee for Rs. 4,761,340 has been executed by Dr.R.Liyanage, Mr. K.R. Theodore, Mr. G.V.P.G. Amarasinghe,

Mrs. G.P. Maddumage, Mrs. M.U.N.Perera, Mrs. R.A.S.M. Dharmajeewa as at the Balance Sheet date, in respect of lease agreement

numbers 020, 021 and 022/L/2007/SBL/PET.

d) Joint and Several Guarantee has been executed by Mr.K.R.Theodore and G.V.P.G.Amarasinghe as at the Balance Sheet date, in

respect of bank loan of 20 Mn.

2011 2010

Rs. Rs.

Short Term Employee Benefits 2 ,100,000 -

There have been no material events occurring after the Balance Sheet date that require adjustments to or disclosure in the

Financial Statements.

Joint and Several Guarantee for Rs.9,499,452 has been executed by Mr.G.V.P.G.Amarasinghe and Dr. R.Liyanage as at the Balance

The above transactions are included in current liabilities as balance due to related parties and non interest bearing

borrowings and in current assets as balance due from related parties.

The above other related companies include following companies.

- Southern Salt Company (Pvt) Ltd

- Raigam Creations (Pvt) Ltd

- Raigam Distributors (Pvt) Ltd

- Raigam Herbal Remedies (Pvt) Ltd

- Raigam Eastern Salt Company (Pvt) Ltd

- Dream Life Science (Pvt) Ltd

- Puttalam Salt Limited

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2011

50 51

VALUE ADDED STATEMENT

2011 2010

% Rs % Rs

Gross Turnover 297,411,339 259,531,518

Cost of materials & services purchased (141,843,639) (116,896,078)

Other Income 20,928,425 14,001

Total Value Addition 176,496,125 142,649,441

To employees (as remuneration) 37 % 66,102,702 33% 46,968,768

To government 15 % 25,665,998 18% 26,190,630

To providers of capital 7 % 11,608,197 31% 43,676,905

Retained in the business 41 % 73,119,228 18% 25,813,138

100% 176,496,125 100% 142,649,441

Value Added per Employee 865,177 672,875

Value Addition as a % of Turnover 59% 55%

VALUE ADDITION

DISTRIBUTION OF VALUE ADDITION

No of % of No of

Shareholders Holding Shares

Less than or equal to 1000 1,221 0.28 % 795,540 - - -

1,001 - 10,000 2,442 4.00 % 11,286,360 - - -

10,001 - 100,000 415 4.88 % 13,767,300 - - -

100,001 - 1,000,000 70 6.47 % 18,248,200 - - -

Over 1,000,001 7 84.37 % 238,109,920 2 100% 202,207,320

Grand Total 4,155 100.00 % 282,207,320 2 100% 202,207,320

Resident 4,133 98.85 % 278,960,520 2 100% 202,207,320

Non - Resident 22 1.15 % 3,246,800 - - -

Total Share Holding 4155 100.00 % 282,207,320 2 100% 202,207,320

Individuals 4,048 13.19% 37,22,400 - - -

Institutions 107 86.81 % 244,984,920 2 100% 202,207,320

Total Shareholding 4,155 100.00 % 282,207,320 2 100% 202,207,320

31 March 2011 31 March 2010

DISTRIBUTION OF SHAREHOLDING

RESIDENT & NON - RESIDENT

INDIVIDUALS & INSTITUTIONS

COMPOSITION OF SHAREHOLDERS

INVESTOR INFORMATION

STOCK EXCHANGE

PUBLIC HOLDING & MAJOR SHARE HOLDINGS

STATED CAPITAL

MARKET VALUE PER SHARE

TRADING ACTIVITIES

INVESTOR RATIOS

EXCHANGE RATES US$

The issued Ordinary shares of Raigam Wayamba Salterns PLC

are listed with the Colombo Stock Exchange of Sri Lanka, since

29 April 2010. The Audited Financial Statements of the

company for the year ended 31 March 2011 have been

submitted to the Colombo Stock Exchange.

The details of shareholders as at 31 March 2011 are as

follows;

Stated Capital as at 31 March 2011 is represented by shares in

issue as given below;

31.03.2011 31.03.2010

Ordinary Shares (Numbers) 282,207,320 202,207,320

2010/11 2009/10

Highest Rs 5.10 -

Lowest Rs 3.70 -

As at the year end Rs 4.50 -

No. of Transactions No. of times 9,026 -

No. of Shares Traded Nos 75,816,600 -

Value of Shares Traded Rs. 331,735,810 -

2010/11 2009/10

Earnings per share Rs 0.21 0.18

Dividend per share Rs - 1.77

Price Earning Ratio No. of Times 21.43 -

Earnings Yield % 4.67 -

Net Assets per share Rs 2.34 2.14

Debt Equity Ratio % 22 169

Interest Cover No. of Times 7.96 7.87

2010/11 2009/10

At the year end 111.33 113.33

31.03.2011 31.03.2010

No. of Shares % No. of Shares %

Raigam Marketing Services (Pvt) Ltd 101,103,660 35.83% 101,103,660 50%

Raigam Distributors (Pvt) Ltd 101,103,660 35.83% 101,103,660 50%

Employees Provident Fund 29,864,300 10.58% -

Directors' Share Holding 658,100 0.23% -

Public Share Holding 49,477,600 17.53% -

52 53

VALUE ADDED STATEMENT

2011 2010

% Rs % Rs

Gross Turnover 297,411,339 259,531,518

Cost of materials & services purchased (141,843,639) (116,896,078)

Other Income 20,928,425 14,001

Total Value Addition 176,496,125 142,649,441

To employees (as remuneration) 37 % 66,102,702 33% 46,968,768

To government 15 % 25,665,998 18% 26,190,630

To providers of capital 7 % 11,608,197 31% 43,676,905

Retained in the business 41 % 73,119,228 18% 25,813,138

100% 176,496,125 100% 142,649,441

Value Added per Employee 865,177 672,875

Value Addition as a % of Turnover 59% 55%

VALUE ADDITION

DISTRIBUTION OF VALUE ADDITION

No of % of No of

Shareholders Holding Shares

Less than or equal to 1000 1,221 0.28 % 795,540 - - -

1,001 - 10,000 2,442 4.00 % 11,286,360 - - -

10,001 - 100,000 415 4.88 % 13,767,300 - - -

100,001 - 1,000,000 70 6.47 % 18,248,200 - - -

Over 1,000,001 7 84.37 % 238,109,920 2 100% 202,207,320

Grand Total 4,155 100.00 % 282,207,320 2 100% 202,207,320

Resident 4,133 98.85 % 278,960,520 2 100% 202,207,320

Non - Resident 22 1.15 % 3,246,800 - - -

Total Share Holding 4155 100.00 % 282,207,320 2 100% 202,207,320

Individuals 4,048 13.19% 37,22,400 - - -

Institutions 107 86.81 % 244,984,920 2 100% 202,207,320

Total Shareholding 4,155 100.00 % 282,207,320 2 100% 202,207,320

31 March 2011 31 March 2010

DISTRIBUTION OF SHAREHOLDING

RESIDENT & NON - RESIDENT

INDIVIDUALS & INSTITUTIONS

COMPOSITION OF SHAREHOLDERS

INVESTOR INFORMATION

STOCK EXCHANGE

PUBLIC HOLDING & MAJOR SHARE HOLDINGS

STATED CAPITAL

MARKET VALUE PER SHARE

TRADING ACTIVITIES

INVESTOR RATIOS

EXCHANGE RATES US$

The issued Ordinary shares of Raigam Wayamba Salterns PLC

are listed with the Colombo Stock Exchange of Sri Lanka, since

29 April 2010. The Audited Financial Statements of the

company for the year ended 31 March 2011 have been

submitted to the Colombo Stock Exchange.

The details of shareholders as at 31 March 2011 are as

follows;

Stated Capital as at 31 March 2011 is represented by shares in

issue as given below;

31.03.2011 31.03.2010

Ordinary Shares (Numbers) 282,207,320 202,207,320

2010/11 2009/10

Highest Rs 5.10 -

Lowest Rs 3.70 -

As at the year end Rs 4.50 -

No. of Transactions No. of times 9,026 -

No. of Shares Traded Nos 75,816,600 -

Value of Shares Traded Rs. 331,735,810 -

2010/11 2009/10

Earnings per share Rs 0.21 0.18

Dividend per share Rs - 1.77

Price Earning Ratio No. of Times 21.43 -

Earnings Yield % 4.67 -

Net Assets per share Rs 2.34 2.14

Debt Equity Ratio % 22 169

Interest Cover No. of Times 7.96 7.87

2010/11 2009/10

At the year end 111.33 113.33

31.03.2011 31.03.2010

No. of Shares % No. of Shares %

Raigam Marketing Services (Pvt) Ltd 101,103,660 35.83% 101,103,660 50%

Raigam Distributors (Pvt) Ltd 101,103,660 35.83% 101,103,660 50%

Employees Provident Fund 29,864,300 10.58% -

Directors' Share Holding 658,100 0.23% -

Public Share Holding 49,477,600 17.53% -

52 53

FIVE YEAR SUMMARY

YEAR ENDED 31 MARCH

OPERATING RESULTS 2011 2010 2009 2008 2007

Turnover Rs. 297,411,339 259,531,518 382,619,050 157,973,507 66,218,640

Gross Profit Rs. 136,002,558 115,952,873 203,298,171 45,471,772 11,957,509

Earning Before Interest & Taxation (EBIT) Rs. 73,381,090 58,720,035 180,689,019 28,860,711 3,859,974

Profit / (Loss) before Taxation Rs. 64,161,794 51,256,027 172,053,821 12,547,391 1,440,348

Profit / (Loss) after Taxation Rs. 57,865,492 51,256,027 172,053,821 12,547,391 1,440,348

Retained Profit / (Loss) Rs. 56,466,129 (1,399,363) 183,557,518 11,503,697 (1,043,694)

Stated Capital Rs. 604,414,640 604,414,640 204,414,629 15,000,020 20

Reserves Rs. 56,466,129 (1,399,363) 183,557,518 200,918,306 (1,043,694)

Total Equity Rs. 660,880,769 603,015,277 387,972,147 215,918,326 (1,043,674)

Total Debt Rs. 145,789,847 1,023,594,704 73,973,666 128,459,570 96,495,086

Total Capital Employed Rs. 806,670,616 1,626,609,981 461,945,813 344,377,896 95,451,412

Leasehold Property, Plant & Equipment Rs. 12,153,167 13,626,167 2,229,500 2,502,500 -

Property, Plant & Equipment Rs. 429,919,252 317,580,083 307,849,529 303,287,692 65,395,468

Other Non Current Assets Rs. 3,248,847 3,046,790 3,046,790 3,046,790 -

Total Current Assets Rs. 361,349,350 1,292,356,941 148,819,998 35,540,914 30,055,944

Equity / Asset Ratio No of Times 0.82 0.37 0.84 0.63 (0.01)

Current Ratio No of Times 2.62 1.28 2.34 0.31 0.39

Gearing Ratio % 22 169 19 59 -

Turnover to Capital Employed No of Times 0.37 0.16 0.83 0.46 0.69

Earnings Per Share Rs. 0.21 0.18 8.42 8.36 720,174

FINANCIAL POSITION

CAPITAL EMPLOYED

ASSETS EMPLOYED

KEY FINANCIAL INDICATORS

54 55

1. Raigam Marketing Services (Pvt) Ltd 101,103,660 35.83 % 101,103,660 50 %

2. Raigam Distributors (Pvt) Ltd 101,103,660 35.83 % 101,103,660 50 %

3. Employees Provident Fund 29,864300 10.58 % -

4. Indra Traders (Pvt) Ltd 1,711,900 0.61 % -

5. Mr. D. Kim 1,525,700 0.54 % -

6. Colombo Machinery & Equipment (Pvt) Ltd 1,523,600 0.54 % -

7. Seylan Bank PLC / Mr. Jayantha Dewage 1,277,100 0.45 % -

8. Pan Asia Banking Corporation PLC / Mr. Ravindra Erle 1,000,000 0.35 % -

9. J.B. Cocoshell (Pvt) Ltd 955,800 0.34 % -

10. Tranz Dominion, L.L.C. 950,000 0.34 % -

11. Mr. M.M. Udeshi 678,300 0.24 % -

12. Waldock Mackenzie Limited / Mr. L.P. Hapangama 615,600 0.22 % -

13. Mr. C. Wijeweere 530,100 0.19 % -

14. J.Y.K. Associates (Pvt) Ltd 502,200 0.18 % -

15. Mrs. S. Wajeeha Banu 500,000 0.18 % -

16. Bank of Ceylon No. 1 Account 500,000 0.18 % -

17. Waldock Mackenzie Limited / Mr. Chamila Damion Kohom 500,000 0.18 % -

18. Mr. R.E. Rambukwelle 476,100 0.17 % -

19. Mr. B.H.K. Perera 457,500 0.16 % -

20. Mr. N.S.K.W. Gunasekara 430,000 0.15 % -

Sub Total

Balance held by 4,135 shareholders 36,001,800 12.76 % - -

Total No. of shares 282,207,320 100 % 202,207,320 100%

246,205,520 87.24% 202,207,320 100%

Name of ShareholdersAs at 31 March 2011 As at 31 March 2010

TWENTY LARGEST SHAREHOLDERS

No. of Shares % No. of Shares %

FIVE YEAR SUMMARY

YEAR ENDED 31 MARCH

OPERATING RESULTS 2011 2010 2009 2008 2007

Turnover Rs. 297,411,339 259,531,518 382,619,050 157,973,507 66,218,640

Gross Profit Rs. 136,002,558 115,952,873 203,298,171 45,471,772 11,957,509

Earning Before Interest & Taxation (EBIT) Rs. 73,381,090 58,720,035 180,689,019 28,860,711 3,859,974

Profit / (Loss) before Taxation Rs. 64,161,794 51,256,027 172,053,821 12,547,391 1,440,348

Profit / (Loss) after Taxation Rs. 57,865,492 51,256,027 172,053,821 12,547,391 1,440,348

Retained Profit / (Loss) Rs. 56,466,129 (1,399,363) 183,557,518 11,503,697 (1,043,694)

Stated Capital Rs. 604,414,640 604,414,640 204,414,629 15,000,020 20

Reserves Rs. 56,466,129 (1,399,363) 183,557,518 200,918,306 (1,043,694)

Total Equity Rs. 660,880,769 603,015,277 387,972,147 215,918,326 (1,043,674)

Total Debt Rs. 145,789,847 1,023,594,704 73,973,666 128,459,570 96,495,086

Total Capital Employed Rs. 806,670,616 1,626,609,981 461,945,813 344,377,896 95,451,412

Leasehold Property, Plant & Equipment Rs. 12,153,167 13,626,167 2,229,500 2,502,500 -

Property, Plant & Equipment Rs. 429,919,252 317,580,083 307,849,529 303,287,692 65,395,468

Other Non Current Assets Rs. 3,248,847 3,046,790 3,046,790 3,046,790 -

Total Current Assets Rs. 361,349,350 1,292,356,941 148,819,998 35,540,914 30,055,944

Equity / Asset Ratio No of Times 0.82 0.37 0.84 0.63 (0.01)

Current Ratio No of Times 2.62 1.28 2.34 0.31 0.39

Gearing Ratio % 22 169 19 59 -

Turnover to Capital Employed No of Times 0.37 0.16 0.83 0.46 0.69

Earnings Per Share Rs. 0.21 0.18 8.42 8.36 720,174

FINANCIAL POSITION

CAPITAL EMPLOYED

ASSETS EMPLOYED

KEY FINANCIAL INDICATORS

54 55

1. Raigam Marketing Services (Pvt) Ltd 101,103,660 35.83 % 101,103,660 50 %

2. Raigam Distributors (Pvt) Ltd 101,103,660 35.83 % 101,103,660 50 %

3. Employees Provident Fund 29,864300 10.58 % -

4. Indra Traders (Pvt) Ltd 1,711,900 0.61 % -

5. Mr. D. Kim 1,525,700 0.54 % -

6. Colombo Machinery & Equipment (Pvt) Ltd 1,523,600 0.54 % -

7. Seylan Bank PLC / Mr. Jayantha Dewage 1,277,100 0.45 % -

8. Pan Asia Banking Corporation PLC / Mr. Ravindra Erle 1,000,000 0.35 % -

9. J.B. Cocoshell (Pvt) Ltd 955,800 0.34 % -

10. Tranz Dominion, L.L.C. 950,000 0.34 % -

11. Mr. M.M. Udeshi 678,300 0.24 % -

12. Waldock Mackenzie Limited / Mr. L.P. Hapangama 615,600 0.22 % -

13. Mr. C. Wijeweere 530,100 0.19 % -

14. J.Y.K. Associates (Pvt) Ltd 502,200 0.18 % -

15. Mrs. S. Wajeeha Banu 500,000 0.18 % -

16. Bank of Ceylon No. 1 Account 500,000 0.18 % -

17. Waldock Mackenzie Limited / Mr. Chamila Damion Kohom 500,000 0.18 % -

18. Mr. R.E. Rambukwelle 476,100 0.17 % -

19. Mr. B.H.K. Perera 457,500 0.16 % -

20. Mr. N.S.K.W. Gunasekara 430,000 0.15 % -

Sub Total

Balance held by 4,135 shareholders 36,001,800 12.76 % - -

Total No. of shares 282,207,320 100 % 202,207,320 100%

246,205,520 87.24% 202,207,320 100%

Name of ShareholdersAs at 31 March 2011 As at 31 March 2010

TWENTY LARGEST SHAREHOLDERS

No. of Shares % No. of Shares %

FORM OF PROXY

We…………………………………………………………………………………..............................………………………………………

of…………………………………………………………………………………………………………………............................………….

being a Member/s of Raigam Wayamba Salterns PLC do hereby appoint one of the following Directors of the Company,

Dr. Ravindranath Liyanage or failing him

Mr. G.V.P. Ganaka Amarasinghe or failing him

Prof. S.P.P. Amarathunga or failing him

Mr. T. Dharmarajah or failing him

Mr. W.A. Upali Gunawardena or failing him

Mr. N.B.W.C Prashantha or failing him

Mr. S.A. Wickramapala or failing him

Mr./Mrs……………………………………………………………………………………….........................………………………………..

of……………………………………………………………………………………………….........................………………………………

as *my / our Proxy to speak and / to vote for*me / us on *my / our behalf at the Sixth Annual General Meeting of Raigam

Wayamba Salterns PLC to be held at the Auditorium of The Institute of Chartered Accountants of Sri Lanka, No 30A, Malalasekara

Mawatha, Colombo 7 on Thursday the 15 September 2011 at 9.30 a.m and at any adjournment thereof.

For Against

1. To receive and consider the Report of the Directors

and Financial Statement of the Company and the

Group for the financial year ended 31 Mach 2011,

with the Auditors Report thereon.

2. To re-appoint Messrs Ernst & Young, Chartered

Accountants as Auditors for the ensuing year

and to authorize the Directors to determine their

remuneration.

3. To declare a dividend as recommended by the Directors.

4. To authorize the Directors to determine donations

for the financial year 2011 / 12.

* The Proxy may vote as he / she thinks fit on any other resolution brought before this meeting

………………...............……… ……….…………...................

Signature/s Date

Note:

1. Please delete the inappropriate words.

2. Instructions as to completion are noted on the next page.

NOTICE OF MEETING

AGENDA

NOTICE IS HERE BY GIVEN that the Sixth Annual General Meeting of Raigam Wayamba Salterns PLC will be held at the Auditorium of

The Institute of Chartered Accountants of Sri Lanka, No 30A, Malalasekara Mawatha, Colombo 7 on Thursday the 15 September 2011

at 9.30 a.m. for the following purposes:

1. To receive and consider the Report of the Directors and Audited Financial Statements of the Company and the Group for the

financial year ended 31 Mach 2011, with the Auditors' Report thereon.

2. To re-appoint Messrs Ernst & Young, Chartered Accountants as Auditors for the ensuing year and to authorize the Directors to

determine their remuneration.

3. To declare a dividend as recommended by the Directors.

4. To authorize the Directors to determine donations for the financial year 2011/2012.

By order of the Board

Raigam Wayamba Salterns PLC

U.K. Consultants (Pvt) Ltd

Secretaries

16 August, 2011

Note:

A member entitled to attend and vote is entitled to appoint a Proxy to attend and vote in his / her place.

A Proxy need not to be a member of the Company.

A Form of Proxy accompanies this Notice.

56 57

FORM OF PROXY

We…………………………………………………………………………………..............................………………………………………

of…………………………………………………………………………………………………………………............................………….

being a Member/s of Raigam Wayamba Salterns PLC do hereby appoint one of the following Directors of the Company,

Dr. Ravindranath Liyanage or failing him

Mr. G.V.P. Ganaka Amarasinghe or failing him

Prof. S.P.P. Amarathunga or failing him

Mr. T. Dharmarajah or failing him

Mr. W.A. Upali Gunawardena or failing him

Mr. N.B.W.C Prashantha or failing him

Mr. S.A. Wickramapala or failing him

Mr./Mrs……………………………………………………………………………………….........................………………………………..

of……………………………………………………………………………………………….........................………………………………

as *my / our Proxy to speak and / to vote for*me / us on *my / our behalf at the Sixth Annual General Meeting of Raigam

Wayamba Salterns PLC to be held at the Auditorium of The Institute of Chartered Accountants of Sri Lanka, No 30A, Malalasekara

Mawatha, Colombo 7 on Thursday the 15 September 2011 at 9.30 a.m and at any adjournment thereof.

For Against

1. To receive and consider the Report of the Directors

and Financial Statement of the Company and the

Group for the financial year ended 31 Mach 2011,

with the Auditors Report thereon.

2. To re-appoint Messrs Ernst & Young, Chartered

Accountants as Auditors for the ensuing year

and to authorize the Directors to determine their

remuneration.

3. To declare a dividend as recommended by the Directors.

4. To authorize the Directors to determine donations

for the financial year 2011 / 12.

* The Proxy may vote as he / she thinks fit on any other resolution brought before this meeting

………………...............……… ……….…………...................

Signature/s Date

Note:

1. Please delete the inappropriate words.

2. Instructions as to completion are noted on the next page.

NOTICE OF MEETING

AGENDA

NOTICE IS HERE BY GIVEN that the Sixth Annual General Meeting of Raigam Wayamba Salterns PLC will be held at the Auditorium of

The Institute of Chartered Accountants of Sri Lanka, No 30A, Malalasekara Mawatha, Colombo 7 on Thursday the 15 September 2011

at 9.30 a.m. for the following purposes:

1. To receive and consider the Report of the Directors and Audited Financial Statements of the Company and the Group for the

financial year ended 31 Mach 2011, with the Auditors' Report thereon.

2. To re-appoint Messrs Ernst & Young, Chartered Accountants as Auditors for the ensuing year and to authorize the Directors to

determine their remuneration.

3. To declare a dividend as recommended by the Directors.

4. To authorize the Directors to determine donations for the financial year 2011/2012.

By order of the Board

Raigam Wayamba Salterns PLC

U.K. Consultants (Pvt) Ltd

Secretaries

16 August, 2011

Note:

A member entitled to attend and vote is entitled to appoint a Proxy to attend and vote in his / her place.

A Proxy need not to be a member of the Company.

A Form of Proxy accompanies this Notice.

56 57

Notes

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Form of Proxy (Cond..)Instructions as to completion of Form of Proxy

1. Kindly perfect the Form of Proxy after filling in legibly your full name and address and by signing in the space

provided. Please fill in the date of signature

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead

of him/her.

3. In the case of Corporate Members, the Form of Proxy must be completed under the Common Seal, which

should be affixed and attested in the manner prescribed by the articles of Associations / Statutes.

4. If the Form of Proxy is signed by an Attorney, the relevant Power of Attorney should also accompany the

completed Form of Proxy.

5. The completed Form of Proxy should be deposited at the Registered Office of the company at No. 23,

Walukarama Road, Colombo 03, not less than Forty Eight (48) hours before the time fixed for the meeting.

58 59

Notes

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Form of Proxy (Cond..)Instructions as to completion of Form of Proxy

1. Kindly perfect the Form of Proxy after filling in legibly your full name and address and by signing in the space

provided. Please fill in the date of signature

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead

of him/her.

3. In the case of Corporate Members, the Form of Proxy must be completed under the Common Seal, which

should be affixed and attested in the manner prescribed by the articles of Associations / Statutes.

4. If the Form of Proxy is signed by an Attorney, the relevant Power of Attorney should also accompany the

completed Form of Proxy.

5. The completed Form of Proxy should be deposited at the Registered Office of the company at No. 23,

Walukarama Road, Colombo 03, not less than Forty Eight (48) hours before the time fixed for the meeting.

58 59

ANNUAL REPORT 2010/2011

FUTURE...