2017

Ceylon Printers PLCAnnual Report

Office Equipment PLCAnnual Report

Paragon Ceylon PLCAnnual Report

A N N U A L R E P O R T 2 0 1 7 1

Notice of Meeting

NOTICE IS HEREBY GIVEN that the Sixtieth Annual General Meeting of Office Equipment PLC will be held in the Board Room of Ceylon Printers Group, No. 20, Sir Chittampalam A. Gardiner Mawatha, Colombo 2, on 13th December 2017 at 10.15 a.m. for the following purposes :

1. To pass the ordinary resolution set out below to appoint Mr. W. N. S. Canagaratne who is 81 years of age as a Director of the Company.

IT IS HEREBY RESOLVED that the age limit stipulated is section 210 of the companies Act No. 7 of 2007 shall not apply to Mr. W. N. S. Canagaratne who is 81 years of age and that he be and is hereby appointed a Director of the Company in terms of section 211 of the Companies Act No. 7 of 2007.

2. To receive and consider the Report of the Directors on the affairs of the company and the Statement of Accounts for the year ended 31st March 2017 and the Report of the Auditors thereon.

3. To declare a dividend as recommended by the Board.

4. To pass the ordinary resolution set out below to appoint Mr. L. C. G. Ratnanather who is 82 years of age as a Director of the Company.

IT IS HEREBY RESOLVED that the age limit stipulated is section 210 of the companies Act No. 7 of 2007 shall not apply to Mr. L. C. G. Ratnanather who is 82 years of age and that he be and is hereby appointed a Director of the Company in terms of section 211 of the Companies Act No. 7 of 2007.

5. To pass the ordinary resolution set out below to appoint Mr. J P S Ratnanather who is 86 years of age as a Director of the Company.

IT IS HEREBY RESOLVED that the age limit stipulated is section 210 of the companies Act No. 7 of 2007 shall not apply to Mr. J P S Ratnanather who is 86 years of age and that he be and is hereby appointed a Director of the Company in terms of section 211 of the Companies Act No. 7 of 2007.

6. To re-elect Mr. P S R Casie Chitty who retires by rotation in terms of Article 84 of the Articles of Association of the Company as a Director at the Annual General Meeting, a Director.,

7. To authorise the Board of Directors to determine contributions to charities and other donations.

8. To re-appoint Messrs, Baker Tilly Edirisinghe & Co., as Auditors and authorise the Directors to determine their remuneration.

By Order of the BoardP W Corporate Secretarial (Pvt) Ltd

Secretaries31st October 2017Colombo

Note:

A member entitled to attend and vote at the above mentioned meeting is entitled to appoint a proxy who need not also be a member.

The completed form of proxy should be deposited at the registered office of the Company at No. 20, Sir Chittampalam A. Gardiner Mawatha, Colombo 2, not less than 48 hours before the time fixed for the Meeting.

A form of Proxy is attached to the Report.

A N N U A L R E P O R T 2 0 1 72

Corporate Information

Directors

W. N. S. Canagaratna (Chairman/Managing Director)

L. C. G. Ratnanather (Group Finance Director)

J. P. S. Ratnanather

J. A. S. Ratnasabapathy (Alternate to J. P. S. Ratnanather)

Anthony A. Page

P. S. R. Casie Chitty

M. M. Marzook

Secretaries P W Corporate Secretarial (Pvt) Ltd

Chief Executive Officer L. I. Ratnasabapathy

Head of Finance

M. S. A. Kariapper

Auditors BAKER TILLY Edirisinghe & Co. Chartered Accountants

Tax consultants Nanayakkara & Co. Chartered Accountants

Bankers Commercial Bank of Ceylon Ltd.

Lawyers

Nithi Murugesu

Attorney-at-Law

A N N U A L R E P O R T 2 0 1 7 3

Directors’ Profile

W. N. S. Canagaratna–ExecutiveChairmanandManagingDirectorA journalist by profession, he began his career in the Times of Ceylon in 1954, later joining the Information Services of the British High Commission in Sri Lanka to edit the BHC’s fortnightly publication, BritishBulletin. After joining the Ceylon Printers Group in 1967, he was also the Sri Lanka correspondent for The Statesman of Calcutta and Delhi for 12 years. He still maintains his links with journalism in Sri Lanka.

Mr. Canagaratna became a Director of Ceylon Printers PLC, Paragon Ceylon PLC, Kalamazoo Industries (Pvt) Ltd, Office Equipment PLC and International Computers (Ceylon) Ltd in 1984 and became the Executive Chairman and Managing Director of the Group in 1991.

Mr. Canagaratna is responsible for all policy decisions relating to the day-to-day operations of all companies in the Group.

L. C. G. Ratnanather -GroupFinanceDirectorMr. Leslie Ratnanather has been with the Company since 1965 and counts 52 years of senior management experience. He acts as the Group Finance Director and oversees the finance function. He is a director of Ceylon Printers PLC, Paragon Ceylon PLC, Kalamazoo Industries (Pvt) Ltd, Office Equipment PLC and International Computers (Ceylon) Ltd. Mr. Ratnanather is a finalist at the Chartered Institute of Accountants Sri Lanka.

J. P. S. Ratnanather –Non-ExecutiveDirectorMr. J. P. S. Ratnanather is a non-executive director of Ceylon Printers PLC, Paragon Ceylon PLC, Kalamazoo Industries (Pvt) Ltd, Office Equipment PLC and International Computers (Ceylon) Ltd.

J. A. S. Ratnasabapathy-AlternateDirectorMr. J. A. S. Ratnasabapathy has been with the Company since 1985 and counts 32 years of senior management experience. He acts as the alternate director to Mr. J. P. S. Ratnanather and oversees the Human Resources and Administrative functions of the Group. He is an alternate director of Ceylon Printers PLC, Paragon Ceylon PLC, Kalamazoo Industries (Pvt) Ltd, Office Equipment PLC and International Computers (Ceylon) Ltd. Mr. J. A. S. Ratnasabapathy is a retired officer of the Sri Lanka Army.

A. A. Page-Non-ExecutiveDirectorMr. Anthony A Page is the Chairman of C T Holdings PLC and counts 46 years of management experience in a diverse array of business, serving on the Boards of many companies. He was formerly on the Board of the Colombo Stock Exchange and a former Council Member of the Employers’ Federation of Ceylon. He is a fellow member of the Institute of Chartered Accountants of Sri Lanka.

P. S. R. Casie Chitty–IndependentNon-ExecutiveDirectorMr. R. Casie Chitty joined the board as an independent non executive director in 2009. He is a independent non executive director of Ceylon Printers PLC, Paragon Ceylon PLC and Office Equipment PLC. Mr. Casie Chitty who holds a Master in Economics from the University of Colombo is also a Fellow of the Association of Chartered Certified Accountants (ACCA), UK, an Associate Member of the Chartered Institute of Management Accounts (CIMA), UK, and a Chartered Financial Analyst, USA.

M. M. Marzook –IndependentNon-ExecutiveDirectorMr. M. M. Marzook joined the board as an independent non executive director in 2013. He is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), an Associate Member of the Chartered Institute of Management Accountants (CIMA) and holds a Master of Business Administration from the University of Sri Jayewardenepura. He is currently the Head of Special Projects – Finance and Management Information Systems, at Hayleys Advantis Limited. He counts for over 28 years’ experience in Finance, Consulting and Financial Advisory.

A N N U A L R E P O R T 2 0 1 74

Chairman’s Review

On behalf of the Board of Directors, I welcome you to the Sixtieth Annual General Meeting of Office Equipment PLC and it gives me great pleasure to present to you the Annual Report of the Company for the year ended 31st March 2017.

During the year under review the turnover of the Company recorded an increase from Rs. 81.267 million to Rs.101.485 million and the net profit attributable to the shareholders increased from a profit of Rs. 1.473 million in the preceding year to a profit of Rs. 3.813 million.

The provision for taxation during the year under review recorded an increase from Rs. 0.068 million in the previous year to Rs.3.447 million.

During the period under review the company faced increasing competition from other players in the market. Fur-ther, the Sri Lankan rupee depreciated by about 4.5% during the year which resulted in increased costs of imports. Due to high competition, cost increases could not be passed on to customers resulting in further erosion of margins. To overcome this, the company has expanded its product portfolio and introduced new cash handling and process-ing solutions to its customers and the market.

Despite the difficult market conditions the company is now succeeding in winning new orders and performance in the second half of the current year should show an improvement.

The organisation is working closely with the leading banks and Cash in Transit companies in providing cash handling solutions to further their regional expansion strategies and currently maintains a presence in these regions to ser-vice its clientele.

The Directors have recommended the payment of a final dividend of Rs. 1.00 per share for the year ended 31st March 2017 which requires the Approval of the Shareholders at the Annual General Meeting

In conclusion, I wish to thank all our customers, bankers, suppliers and principals for their patronage and support.

My thanks also to my colleagues on the Board, the Management and staff for their commitment and last but not least, our shareholders for their support and confidence.

Selvam CanagaratnaChairman

31st October, 2017

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The Directors of Office Equipment PLChave pleasure in presenting their Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2017.

This Annual Report of the Board on the affairs of the Company contains the information required in terms of the Companies Act No. 07 of 2007, the Listing Rules of the Colombo Stock Exchange and is guided by recommended best practices.

General

Office Equipment PLCis a public limited liability company which was incorporated under the Companies Ordinance No.51 of 1938 as a public company on 26th day of June 1958. Pursuant to the requirements of the new Companies Act No. 7 of 2007, the Company was re-registered on 6th June 2008 and bears registration number PQ141.

Principal activities of the Company and review of performance during the year

The main activity of Office Equipment PLC, which remained unchanged during the year, is Import, distribution and maintenance of cash and coin handling solutions and time recording system. The Chairman’s Review describes the Company’s affairs and mentions important events, which took place during the year.

This Report together with the Financial Statements, reflect the state of affairs of the Company.

Financial Statements

The Financial Statements of the Company duly signed by two Directors on behalf of the Board and the Auditors are given on pages 17 to 18.

Summarised Financial Results

Revenue 101,485,708 81,267,610Profit for the year 3,813,399 1,473,601

Auditors’ ReportThe Report of the Auditors on the Financial Statements of the Company is given on page 16.

Accounting PoliciesThe Accounting Policies adopted by the Company in the preparation of the Financial Statements are given on pages 22 to 27 which are consistent with those of the previous period.

DirectorsThe names of the Directors who held office as at the end of the accounting period are given below and their brief profiles appear on pages 02 to 03.

Executive DirectorsMr.W.N.S Canagaratna - Chairman/Managing DirectorMr. L.C.G RatnanatherMr. J.A.S Ratnasabapathy

Non - Executive DirectorsMr. J.P.S RatnanatherMr. Anthony A.Page

*Independent Non-Executive Directors*Mr. P.S.R Casie Chitty*Mr. M.M Marzook

Annual Report of the Board of Directors on the Affairs of the Company

Company

Year ended 31st March 2017 2016 Rs. Rs.

A N N U A L R E P O R T 2 0 1 76

The Directors have recommended the re-appointment of Mr. W. N. S. Canagaratne who is 81 years of age as a Director of the Company and accordingly a resolutions will be placed before the shareholders in terms of section 211 of the Companies Act in regard to the re-appointment of Mr. W. N. S. Canagaratne.

The Directors have recommended the re-appointment of Mr. L.C.G Ratnanather who is 82 years of age as a Director of the Company and accordingly a resolutions will be placed before the shareholders in terms of section 211 of the Companies Act in regard to the re-appointment of Mr. L.C.G Ratnanather.

The Directors have recommended the re-appointment of Mr. J.P.S Ratnanather who is 86 years of age as a Director of the Company and accordingly a resolutions will be placed before the shareholders in terms of section 211 of the Companies Act in regard to the re-appointment of Mr. J.P.S Ratnanather.

Mr. P.S.R Casie Chitty retires by rotation at the conclusion of the Annual General Meeting in terms of Article 84 of the Article of Association and being eligible is recommended by the Directors for re- election.

Interests RegisterThe Company maintains an Interests Register in terms of the Companies Act, No. 7 of 2007, which is deemed to form part and parcel of this Annual Report and available for inspection upon request.

All related party transactions which encompasses the transactions of Directors who were directly or indirectly interested in a contract or a related party transaction with the Company during the accounting period are recorded in the Interests Register in due compliance with the applicable rules and regulations of the relevant Regulatory Authorities.

The Related Party Transactions Review Committee has reviewed all related party transactions that require their review for the year ended 31st March 2017 in compliance with the relevant listing rules.

The relevant interests of Directors in the shares of the Company as at 31st March 2017 as recorded in the Interests Register are given in this Report under Directors’ shareholding.

Directors’ RemunerationThe Directors’ remuneration is disclosed in Note 07 to the Financial Statements.

Directors’ Interests in ContractsThe Directors’ interest in contracts are included with the related party disclosures in Note 28 to the Financial Statements.

The Company carried out transactions in the ordinary course of its business at commercial rates with related entities.

Directors’ Responsibility for Financial ReportingThe Directors are responsible for the preparation of Financial Statements of the Company to reflect a true and fair view of the state of its affairs. The Directors are of the view that these financial statements have been prepared in conformity with requirements of the Sri Lanka Accounting Standards, the Companies Act No.7 of 2007 and the Listing Rules of the Colombo Stock Exchange.

AuditorsMessrs, Baker Tilly Edirisinghe& Co., Chartered Accountants served as the Auditors during the year under review. Based on the written representations made by the Auditors, they do not have any interest in the Company other than as Auditors and Tax Consultants.

The Audit fee payable to the Auditors for the year Rs. 187,245/- (2016 – Rs.189,420/-)

The Auditors have expressed their willingness to continue in office. The Audit Committee recommended that they be re-appointed as Auditors. A resolution to re-appoint the Auditors and to authorise the Directors to determine their remuneration will be proposed at the Annual General Meeting.

Annual Report of the Board of Directors on the Affairs of the Company Contd...

A N N U A L R E P O R T 2 0 1 7 7

Stated CapitalThe Stated Capital of the Company is Rs.833,560/-.The number of shares issued by the Company stood at 833,560 fully paid ordinary shares as at 31st March 2017.

Directors’ ShareholdingThe relevant interests of Directors in the shares of the Company as at 31st March 2017 and 31st March 2016 are as follows.

Major Shareholders, Distribution Schedule and other informationInformation on the twenty largest shareholders of the Company distribution schedule of the number of shareholders, percentage of shares held by the public, market values per share as per the Listing Rules of the Colombo Stock Exchange are given on page 09 to 10 under Investor Information.

ReservesThe movement of reserves during the year are given under the Statement of Changes in Equity on page 19. (Statement of Changes in Equity).

Land holdingsThe Company does not own any free hold.

Property, Plant and EquipmentDetails and movements of property, plant and equipment are given under Note 11 to the Financial Statements.

Capital ExpenditureThe total capital expenditure during the year amounted to Rs. 3,607,556/- Mn compared to Rs. 375,402/- incurred in the previous year. Details of movement in property, plant and equipment and capital work-in-progress are given under Note 11 to the financial statements.

DonationsThe Company has made Rs. 48,000/- during the year.

DividendsThe Directors have recommended the payment of a final dividend of Rs. 1.00 per share for the year ended 31st March 2017 which requires the Approval of the Shareholders at the Annual General Meeting.

Annual Report of the Board of Directors on the Affairs of the Company Contd...

Shareholding as at Shareholding as at 31/03/2017 31/03/2016

Mr. W.N.S Canagaratna - Chairman/Managing Director 18,710 18,710Mr. L.C.G Ratnanather Nil NilMr. J.P.S Ratnanather Nil NilMr.J.A.S Ratnasabapathy Nil NilMr.Anthony A.Page 10 10Mr. P.S.R Casie Chitty Nil NilMr.M.M Marzrook Nil Nil 18,720 18,720

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Annual Report of the Board of Directors on the Affairs of the Company Contd...

Corporate GovernanceCorporate Governance practices and principles with respect to the Management and Operations of the Company are set out on page 12.

An Audit Committee, Remuneration Committee and a Related Party Transaction Review Committee function as Board sub committees, with Directors who possess the requisite qualifications and experience. The composition of the said committees is as follows.

Audit CommitteeMr. P.S.R Casie ChittyMr.M.M Marzook

Remuneration CommitteeMr. P.S.R Casie ChittyMr.M.M Marzook

Related Party Transaction Review CommitteeMr. P.S.R Casie ChittyMr.M.M Marzook

The Report on Corporate Governance is given on page 12 of the Annual Report.

Events Occurring After the Reporting DateNo circumstances have arisen since the reporting date which would require adjustment to or disclosure in the Financial Statements.

Annual General MeetingThe Annual General Meeting will be held on 13th December at 10.15 a.m. The Notice of the Annual General Meeting appears on page 01.

By Order of the BoardOffice Equipment PLC

Mr. W.N.S Canagaratna Mr. L.C.G Ratnanather P W Corporate Secretarial (Pvt) LtdChairman/Managing Director Finance Director Secretaries.

31st October, 2017

A N N U A L R E P O R T 2 0 1 7 9

Information to Shareholders and Investors

02. Shareholder Analysis

No of Shares No of Shares Held As At Held As At

31/03/2017 % 31/03/2016 %

Shares Held By The Public 224,676 26.95 504,940 60.58 Shares Held By Others 608,884 73.05 328,620 39.42 833,560 100.00 833,560 100

01. Twenty Largest Shareholdings

2017 2016 No of Shares No of Shares Held % Held %

1 C T Holdings PLC 163,700 19.64 163,700 19.642 Mrs J E Chinniah 134,744 16.16 151,059 18.123 Mr J T Ratnanather 83,570 10.03 83,570 10.034 SirChittampalamA.GardinerTrust 38,660 4.64 38,660 4.645 CyrilGardiner(Private)Limited 38,220 4.59 38,220 4.586 Mrs M C P Canagaratna 37,750 4.53 37,750 4.537 MrAJCRatnanather 28,170 3.38 28,170 3.388 MrGIRatnanather 28,050 3.37 28,050 3.369 Mr J S Ratnanather 28,050 3.37 28,050 3.3610 Ms P R Canagaratna 25,310 3.04 25,310 3.0411 MrsAMDeAlwis 25,310 3.04 25,310 3.0412 MrsBAJRatnasabapathy 24,880 2.98 24,880 2.9813 DrMTStanislaus 24,880 2.98 24,880 2.9814 Mr W N S Canagaratna 18,710 2.24 18,710 2.2415 MrLJRDissanayake 11,401 1.37 3,505 0.3416 CeylonPrintersLtd-GroupEmployeesProvidentAssociation 8,600 1.03 8,600 1.0317 MrLLRMorrow 6,220 0.75 6,220 0.7518 Nikan(Pvt)Ltd 5,260 0.63 5,260 0.6319 MrMZMohamedNihaz 5,000 0.60 0 0.0020 MrsRCMSethikavaler 4,300 0.52 4,300 0.51 740,785 88.87 744,144 89.18 Balance Shareholders 92,775 11.13 89,416 10.82 Total 833,560 100.00 833,560 100.00

03. Distribution of Share holding as at 31st March 2017

2017 2016 2017 2016 2017 2016 No. of Shareholders No. of Shares Held % Held

1 1,000 285 249 39,851 51,366 4.78 6.16

1,001 10,000 36 25 82,874 65,875 9.94 7.90

10,001 100,000 13 13 412,391 716,319 49.48 85.92

100,001 1,000,000 0 0 0 0 0 0

Over 1,000,000 0 0 0 0 0 0

336 287 833,560 833,560 100.00 100.00

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04. Analysis of Shareholders as at 31St March 2017

Category No. of Shareholders No. of Shares %

Local Individuals 284 421,624 50.58 Local Institutions 38 272,610 32.70 Foreign Individuals 12 135,706 16.28 Foreign Institutions 2 3,620 0.43 Total 336 833,560 100.00

05. Directors’ and Ceo’s Shareholding as at 31St March 2017

Names of Directors No. of shares Percentage (%)

Mr. W. N. S. Canagaratna 18,710 2.244 Mr. L.C. G. Ratnanather Nil Mr. J. P. S. Ratnanather Nil Mr. Anthony A. Page 10 0.001 Mr. J.A.S.Ratnasabapathy Nil (Alternative director to Mr,J P S Ratnanather) Mr. P S R Casie Chitty Nil Mr. M.M Marzook Nil Mr. L.I.Ratnasabapathy (CEO) Nil

SHARE PRICES FOR THE YEAR

31/03/2017 Date 31/03/2016 Date

Market price per share Highest during the period Rs. 120.00 01.04.2016 Rs. 3000.00 18.09.2015 Lowest during the period Rs. 49.80 23.02.2017 Rs. 110.00 31.03.2016 As at end of the period Rs. 56.90 Rs. 111.00

31/03/2017 31/03/2016

No. of transactions 739 928 No. of Shares traded 53,351 11,585 Value of Shares traded (Rs.) 4,804,388 9,657,017

PUBLIC HOLDING Public Holdings precentage as at 31st March 2017 26.95% Number of shareholders representing the above precentage 322

Information to Shareholders and Investors Contd...

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Statement of Directors’ Responsibilities

The Companies Act No. 07 of 2007 places the responsibility on the directors to prepare financial statements for each year comprising a balance sheet, statement of income, cash flow and changes in equity along with the accounting policies and notes thereto, which give a true and fair view of the state of affairs of the company at the Balance Sheet date and the results for that financial year.

The Directors are of the view that the financial statements have been prepared in accordance with all applicable laws and the Sri Lanka Accounting Standards which have been selected and applied consistently and judgments and estimates have been made which are reasonable and prudent.

The directors are responsible for ensuring that the company keeps accounting records with reasonable accuracy of the financial position of the company to enable them to ensure that the financial statements comply with the Companies Act and Sri Lanka Accounting Standards. They are also responsible for taking reasonable steps to safeguard the assets of the company and to have proper regard to the establishment of appropriate systems of internal controls, with a view to the prevention and detection of fraud and other irregularities.

The Directors are also responsible for taking reasonable steps to manage the resources of the Company and to design and implement appropriate internal control systems with a view to protect the Company from undue risks and loss. The financial reporting system has also been reviewed by the Board through the management accounts submitted at Board meetings.

The directors confirm that they have provided the Auditors of the company with the opportunity to visit all locations of the company and to undertake all inspections and verifications as they considered appropriate to conduct their audit.

The directors are of the view that the financial statements have been prepared in accordance with all applicable laws and the Sri Lanka Accounting Standards which have been selected and applied consistently and judgments and estimates have been made which are reasonable and prudent.

The Directors confirm that all statutory payments due and payable to all statutory and regulatory authorities have been made by the Company up to date.

The Directors are of the view that they have discharged their obligations as set out in this statement.

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Statement of Corporate Governance

By Corporate Governance, we mean the system by which companies are managed and controlled. This is important both to the directors of the company and its subsidiaries.

The Board of directors of Office Equipment PLC values the guiding principles of good Corporate Governance to maintain the company as a going concern as well as to comply with standards of sound business and accounting policies.

The extent to which the rules and principles of good Corporate Governance are implemented within the Company during the year is set out below.

The Board of DirectorsThe company’s board consists of 07 directors of whom 04 are non-executive directors. The names and designations are given on page 02. The board meets on a regular basis and has a formal schedule of matters reserved to it. The board is supplied with full and timely information to enable it to discharge its responsibilities effectively. During the

financial year 2016/2017 the board held 01 meeting and reserved certain decisions to itself while others were delegated to the management to carry out the operations of the company smoothly. Circular resolutions are adopted by the board from time to time on matters of routine importance.

Vacancies in the board are filled by a decision of the whole board. All members appointed to the board are individuals of high standing in society, experts in their chosen fields and individuals of the highest standards of integrity.

Independent DirectorsAs at the balance sheet date Mr. P. S. R. Casie Chitty and Mr. M. M. Marzook functioned as independent non-executive directors.

Directors’ Interests in ContractsDirectors’ interests in contracts have been disclosed and declared at the meetings of the Directors during the year and are disclosed in Note 28 to the Accounts and also entered in the Interest Register.

Audit CommitteeThe audit committee consists of Mr. P. S. R. Casie Chitty and Mr. M. M. Marzook.

Remuneration CommitteeThe Remuneration Committee consists of Mr. P. S. R. Casie Chitty and Mr. M. M. Marzook. This Committee makes recommendations to the Board of Directors of the Company on the remuneration policy of the Company as well as the aggregate remuneration of the Executive Directors.

Related Party Transactions Review CommitteeThe Related Party Transactions Review Committee consists of Mr. P. S. R. Casie Chitty, Mr. M. M. Marzook and Mr L. C. G. Ratnanther

Disclosure of Information and ComplianceThe 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.

P W Corporate Secretarial (Pvt) Ltd who act as Secretaries to the Company advises the Board on appropriate procedures for the management of its meetings and duties, as well as the compliance of Corporate Governance in the Company.

Remuneration Committee ReportThe Remuneration Committee appointed by the Board of Directors comprises of two (2) Independent Non-executive Directors as follows:

Mr. P. S. R. Casie Chitty - ChairmanMr. M. M. Marzook

The Remuneration Policy on remuneration packages is to attract and retain the best professionals and an experienced workforce and motivate, encourage high levels of performance in a competitive environment bearing in mind the business performance and stakeholder expectations.

The Committee met once during the year. The meetings were for the purpose of examining the remuneration package of Managing Director, Executive Directors and the Management Staff, their respective performances and deciding on appropriate remuneration packages for them; as well as determining incentives based on Company performance for all management staff.

The Committee also reviewed data concerning remuneration packages among comparable Companies. The Managing Director assists the Committee by providing all relevant information with regard to compensation package.

Performance Evaluation method to compensate employees is in place and succession plans have been defined.

A N N U A L R E P O R T 2 0 1 7 13

Remuneration Committee Report

The Remuneration Committee appointed by the Board of Directors comprises of two (2) Independent Non-executive Directors as follows:

Mr. P. S. R. Casie Chitty - ChairmanMr. M. M. Marzook

The Remuneration Policy on remuneration packages is to attract and retain the best professionals and an experienced workforce and motivate, encourage high levels of performance in a competitive environment bearing in mind the business performance and stakeholder expectations.

The Committee met once during the year. The meetings were for the purpose of examining the remuneration package of Managing Director, Executive Directors and the Management Staff, their respective performances and deciding on appropriate remuneration packages for them; as well as determining incentives based on Company performance for all management staff.

The Committee also reviewed data concerning remuneration packages among comparable Companies. The Managing Director assists the Committee by providing all relevant information with regard to compensation package.

Performance Evaluation method to compensate employees is in place and succession plans have been defined.

P. S. R. Casie ChittyChairmanRemuneration CommitteeColombo

31st October, 2017

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Audit Committee Report

The Audit Committee is appointed by the Board of Directors of the company and reports directly to the Board. The Audit Committee consists of two Non-Executive Directors - Mr. P.S.R. Casie Chitty (Chairman), and Mr. M. M.Marzook.

The Chairman of the Audit Committee is a Fellow of the Association of Chartered Certified Accountants - UK and an Associate member of the Chartered Institute of Management Accountants - UK. Mr. Marzook is an Associate Member of the Chartered Institute of Management Accountants - UK and, holds a Master of Business Administration from the, University of Sri Jayewardenepura.

The composition of the members of the Audit Committee satisfies the criteria as specified In the Standards on Corporate Governance for listed Companies.

They are:Mr. P. S. R. Casie Chitty - ChairmanMr. M. M. Marzook

The Audit Committee is empowered to examine all matters pertaining to the Financial Affairs of the Company and assist the Board of Directors in effectively discharging their duties. The Audit Committee examines the preparation, presentation and adequacy of disclosures in the financial statements and whether these are in accordance with SriLanka Accounting Standards and whether the financial reporting requirements, are in accordance with the Companies Act and other relevant financial reporting related regulations and requirements.

The Audit Committee also reviewed and approved the Annual and Interim financial statements prior to the final approval by the Board. In all instances, the Audit Committee obtained relevant declarations from the Finance Director and Head of Finance stating that the respective financial statements are in conformity with the applicable Accounting Standards, Company Law and other Statues including Corporate Governance Rules and that the presentation of such Financial Statements are consistent with those of the Previous Quarter or Year as the case may be, and further states any departures from financial reporting, statutory requirements and Group policies, (if any).

This Audit Committee also reviews the adequacy and proper continuous functioning of the Internal Control Procedures of the Company to obtain reasonable assurances that the financial statements of the Company accurately reflect the state of affairs of the Company and the results for the period to which it relates. This Audit Committee also assesses major business and control risks of the company.

The Audit Committee meetings were held thrice during the year. The Finance Director, CEO and Head of Finance attended all audit committee meetings by invitation and other Senior Managers attended such meetings as and when requested to do so by the Audit Committee.

The Audit Committee assessed the independence and performance of the external auditors Messrs Edirisinghe &Co, Chartered Accountants, and has recommended to the Board of Directors that they be re-appointed as Auditors subject to the approval of the shareholders.

P.S.R. Casie ChittyChairmanAudit CommitteeColombo,

31st October, 2017

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Report of the Related Party Transactions Review Committee

The Related Party Transactions Review Committee is appointed by the Board of Directors of the company and reports directly to the Board. The Related Party Transactions Review Committee consists of two Non-Executive Directors and one Executive Director.

Composition of the CommitteeThe Committee comprise two non-executive Independent Directors and an executive director. The members of the Committee are as follows:

Mr. P. S. R. Casie Chitty – ChairmanMr. M. M. MarzookMr L. C. G. Ratnanather

In compliance with the requirements of the Listing Rules of the CSE, the Chairperson of the Committee is an Independent Director. The Company Secretary functions as the Secretary of the Committee.

Meetings of CommitteeThe Committee had one meeting during the financial year 2016/2017 and the attendance at these meetings is showed in the Corporate Governance Report. The Chief Executive Officer, and Head of Finance attended all meetings by invitation.

The Chairperson of the Committee reported the proceedings and significant issues discussed at the Committee meeting to the Board after every Committee meeting. The minutes of the Committee meetings were circulated to the Board.

Objective of the CommitteeThe purpose of the Committee is to review all proposed related party transactions prior to being entered into or if the transaction is expressed to be conditional to such review, prior to the completion of the transactions except for transactions explicitly exempted in the Terms of Reference which is in conformity with the Listing Rules.Policies and Procedures

The members of the Board of Directors of the Company have been identified as Key Management Personnel. In accordance with the Related Party Transaction Policy, the declarations are obtained from each Key Management Personnel of the Company for the purpose of identifying parties related to them. Based on the information furnished in these declarations, the Company retrieves data on related party transactions from the data base of the Company.

Related Party TransactionsDetails of other related party transactions entered into by the Company during the year 2016/2017 is disclosed in Note 29 to the Financial Statements.

DeclarationA Declaration by the Board of Director on compliance with the rules pertaining to Related Party Transactions appears on the Report of the Board of Director on page 06 of this Annual Report.

P. S. R. Casie ChittyChairmanRelated Party Transactions Review CommitteeColombo

31st October, 2017

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Auditors Report

To The Shareholders Of Office Equipment Plc

Report on the Financial StatementsWe have audited the accompanying financial statements of Office Equipment PLC, which comprise the Statement of financial position as at March 31, 2017, and the Statement of profit or loss and other comprehensive income, Statement of changes in equity and, Statement of cash flows for the year then ended, and summary of significant accounting policies and other explanatory information.

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

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

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

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

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

Report on Other Legal and Regulatory Requirements As required by section 163(2) of the Companies Act No.07 of 2007, we state the following:a) The basis of opinion and scope and limitations of the audit are as stated above.b) In our opinion:- we have obtained all the information and explanations that were required for the audit and , as far as appears

from our examination, proper accounting records have been kept by the Company ,- the financial statements of the Company comply with the requirements of section 151 of the Companies Act No.

07 of 2007.

Edirisinghe & Co.,Chartered Accountants.

Colombo 02.31 October 2017

Independent Auditor’s Report

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Auditors Report Statement of Profit or Loss and Other Comprehensive Income

For the Financial Year Ended 31st March 2017 2016 Note Rs. Rs.

Revenue 04 101,485,708 81,267,610

Cost of Sales (55,087,936) (42,242,980)Gross Profit 46,397,772 39,024,630

Other Income 05 1,745,097 27,827

Selling and Distribution Costs (8,643,905) (9,259,665)Administration Expenses (30,327,565) (27,216,139)Results from Operating Activities 9,171,399 2,576,653

Finance Costs 06 (2,246,451) (1,744,092)Finance Income 06 336,179 709,485Net Finance (Cost)/Income (1,910,272) (1,034,607)

Profit / (Loss) before Income Taxation 07 7,261,127 1,542,046

Income Tax Expenses 08 (3,447,728) (68,445)

Profit / (Loss) for the Year 3,813,399 1,473,601

Profit / (Loss) After Income Taxation 3,813,399 1,473,601

Other Comprehensive IncomeNet Change in Fair Value of Available-for-Sale Financial Assets 128,353 9,601Deficit / (Surplus) Charge on Employee Retirement Benefit Obligation 1,265,989 (413,984)Other Comprehensive Income for the year 1,394,342 (404,383)

Total Comprehensive Income for the Year 5,207,741 1,069,218

Earnings / (Loss) per Share (Rs. Cts.) 09 4.57 1.77

Dividend per Share (Rs. Cts.) 10 1.12 -

The Accounting Policies and the Notes to the Accounts form an integral part of these financial statements.

Figures in brackets indicate deductions.

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These Financial Statements are in compliance with the requirements of the Companies Act No. 07 of 2007.

The Directors are responsible for the preparation and presentation of these financial statements. Signed for on behalf of the Board of Directors on 31st October 2017.

The Accounting Policies and the Notes to the Accounts form an integral part of these financial statements.

Statement of Financial Position

As at 31.03.2017 31.03. 2016 Note Rs. Rs.

Assets

Non - Current AssetsProperty , Plant and Equipment 11 6,422,500 6,097,160Non Current Financial Assets 12 1,099,064 970,711Deferred Tax Assets 13 115,305 1,677,172Total Non Current Assets 7,636,869 8,745,043

Current AssetsInventories 14 25,916,450 28,720,453Income Tax Refund 15 999,846 1,757,154Trade and Other Receivables 16 23,388,025 13,938,752Due from Related Companies 17 3,519,635 940,659Other Current Financial Assets 18 18,675,826 28,823,922Cash and Cash Equivalents 19 420,361 1,590,381Total Current Assets 72,920,143 75,771,321

TOTAL ASSETS 80,557,012 84,516,364

EQUITY AND LIABILITIES

Capital and ReservesStated Capital 20 833,560 833,560Reserves - -Available for Sale Reserve 21 825,899 697,546Retained Earnings 45,455,429 41,306,799Total Equity Attributable to Owners of the Company 47,114,888 42,837,905

Non - Current LiabilitiesInterest Bearing Borrowings 22 2,861,316 4,563,472Retirement Benefit Obligation 23 2,324,893 2,937,568Total Non Current Liabilities 5,186,209 7,501,040

Current LiabilitiesTrade and Other Payable 24 4,251,893 2,632,140Interest Bearing Borrowings 22 17,525,446 8,549,366Due to Related Companies 25 67,057 15,062,887Income Tax Liabilities - -Provision for Warranty Obligations 6,411,519 7,933,026Total Current Liabilities 28,255,915 34,177,419

TOTAL EQUITY AND LIABILITIES 80,557,012 84,516,364

W. N. S. Canagaratna L. C. G. Ratnanather Chairman/Managing Director Finance Director

M. S. A. KariapperFinance Officer

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Statement of Changes in Equity

Available for Stated Retained Sale Capital Earnings Reserve Total Rs. Rs. Rs. Rs.

Balance as at 1st April 2014 833,560 43,058,675 425,162 44,317,397

Net Profit / (Loss) for the Year - (106,691) - (106,691)

Other Comprehensive Income for the Year - 4,268 262,783 267,051Total Comprehensive Income for the Year - (102,423) 262,783 160,360

Transfers - - - -

Dividends - (2,709,070) - (2,709,070) Balance as at 1st April 2015 833,560 40,247,182 687,945 41,768,687

Net Profit / (Loss) for the Year - 1,473,601 - 1,473,601

Other Comprehensive Income for the Year - (413,984) 9,601 (404,383)Total Comprehensive Income for the Year - 1,059,617 9,601 1,069,218

Transfers - - - -

Dividends - - - -

Balance as at 1st April 2016 833,560 41,306,799 697,546 42,837,905

Net Profit / (Loss) for the Year - 3,813,399 - 3,813,399

Other Comprehensive Income for the Year - 1,265,989 128,353 1,394,342Total Comprehensive Income for the Year - 5,079,388 128,353 5,207,741

Transfers - - - -

Dividends - (930,758) - (930,758)

Balance as at 31st March 2017 833,560 45,455,429 825,899 47,114,888

Figuresinbracketsindicatedeductions.

TheAccountingPoliciesandNotestoAccountsformanintegralpartofthesefinancialstatements.

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Statement of Cash Flows

For the Financial Year Ended 31st March 2017 2016 Note Rs. Rs.

Cash Flows from Operating ActivitiesProfit / (Loss) Before Income Taxation 7,261,127 1,542,046Adjustment for Depreciation 3,282,216 2,965,262 Dividend Income (108,109) (27,827) Interest Income (336,179) (709,485) Interest Expenses 1,143,820 1,080,001 Lease Interest 499,780 664,091 Gratuity Opening balance adjestment 47,462 - Profit or Loss on Asset Disposal - - Fair Value Adjustment - - Reversal of Warranty Provision (1,521,507) - Provision for Retirement Benefit Obligations 665,101 694,384Operating Profit Before Working Capital Changes 10,933,711 6,208,472

Working Capital Adjustments(Increase) / Decrease in Inventories 2,804,003 (2,948,582)(Increase) / Decrease in Trade and Other Receivables (9,449,273) (666,537)Increase / (Decrease) in Trade and Other Payables 1,619,753 (3,145,551)(Payment) / Receipt of Related Party Balances (7,099,806) 6,859,865Cash Generated from Operations (1,191,612) 6,307,667

WHT (99,090) (106,624)Interest Paid (1,143,820) (1,080,001)Dividends Paid (930,758) -Retirement Benefit Obligations Paid (59,250) (72,000)Income Tax Paid (1,029,463) (1,607,620)Net Cash Flow from Operating Activities (4,453,993) 3,441,422

Cash Flows from Investing ActivitiesInterest Received 336,179 709,485Investment in Fixed deposit - (4,750)Fixed Deposit Uplifted (326,904) (570,631)Dividends Received 108,109 27,827Purchase of Equity Securities - -Acquisition of Property, Plant and Equipment (3,607,556) (375,402)Sale Proceed from Asset Disposal - -Net Cash Flow from Investing Activities (3,490,172) (213,471)

Cash Flows from Financing ActivitiesReceived / Paid Borrowings - -Loan Paid - -Lease Settlement during the year (2,037,624) (2,037,625)Loan obtained during the year 9,373,838 (4,122,270)Net Cash Flow from Financing Activities 7,336,214 (6,159,895)

Net Increase / (Decrease) in Cash and Cash Equivalents (607,951) (2,931,944)

Cash and Cash Equivalents at the Beginning of the Year (5,216,140) (2,284,196)

Cash and Cash Equivalents at the End of the Period (NOTE A) (5,824,091) (5,216,140)

NOTE A - CASH AND CASH EQUIVALENTSFavourable BalancesCash in Hand and at Bank 420,361 1,590,381Unfavourable BalancesBank Overdrafts (6,244,452) (6,806,521) (5,824,091) (5,216,140)

TheAccountingPoliciesandNotestoAccountsformanintegralpartofthesefinancialstatements.Figuresinbracketsindicatesdeductions.

A N N U A L R E P O R T 2 0 1 7 21

Corporate Information

Reporting Entity

The Office Equipment PLC is a public limited liability company incorporated and domiciled in Sri Lanka and listed on Colombo Stock Exchange. The Company’s Registered Office and the principal place of business is located at No.20, Sir Chittampalam A Gardiner Mawatha, Colombo 02.

Principal Activities and Nature of Operations

During the year, the principal activities of the Company were the import, distribution and maintenance of Cash and Coin handling solutions and time recording systems.

BASIS OF PREPARATION

Statement of Compliance

The financial statements of the Company have been prepared in accordance with the Sri Lanka Accounting Standards (herein referred to as SLFRSs/LKASs) effective from 1st January 2012, laid down by The Institute of Chartered Accountants of Sri Lanka (ICASL) and in compliance with the Companies Act No. 07 of 2007 and the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995.

Responsibilities for the Financial Statements

The Board of directors is responsible for the preparation and presentation of the Financial Statements of the company as per the provisions of the Companies Act No 07 of 2007.

Approval of Financial Statements by the Board of Directors

The Financial Statements of the Company for the year ended 31st March 2017 (including comparatives) were approved and authorised for issue on 31st October 2017.

The Financial Statements include following components:

² The Statement of Profit and Loss and Comprehensive Income

Providing information on the financial performance of the company for the year.

² The Statement of Financial Position Providing information on the financial position of

the company as at the year.

² The Statement of Changes in Equity Providing information on the movements of stated

capital and reserves of the during the period.

² The Statement of Cash Flows Providing information to the users, on generating

cash and cash equivalents and utilization of the cash and cash equivalents.

² Notes to the Financial Statements Comprising accounting policies and other explanatory

notes.

Basis of Measurement

The Financial Statements have been prepared on the historical cost basis and applied consistently with no adjustments being made for inflationary factors affecting the Financial Statements, except for the following;

² Available for Sale Financial Assets are measured at fair value.

² Loans and Receivables are measured at amortized cost.

² Liability for defined benefit obligations is recognized as the present value of the defined benefit obligation.

Functional and Presentation Currency

Items included in the Financial Statements of the company are measured using the currency of the primary economic environment in which the company operates. Financial Statements are presented in Sri Lankan Rupees, which is the company’s functional and presentation currency.

Going Concern

The Directors have made an assessment of the Company’s ability to continue as a going concern, and being satisfied that it has the resources to continue in business for the foreseeable future confirm that they do not intend either to liquidate or to cease operations. Therefore the financial statements continue to be prepared on a going concern basis.

Comparative Information

The presentation and classification of the financial statements of the previous years have been amended, where relevant for better presentation and to be comparable with those of the current year.

Change in Accounting Policies

The accounting policies adopted by the Company are consistent with those used in the previous financial year .

Use of Estimates and Judgments

The preparation of financial statements in conformity with SLFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although the judgments and estimates are based on management’s best knowledge of the current events and actions, actual results may ultimately differ from those estimates. It also requires management to exercise its judgment in the process of applying the company’s accounting policies.

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Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Assets and Bases of their Valuation

Property, Plant and EquipmentThe company applies the requirements of the LKAS 16 on “Property, Plant and Equipment” in accounting for its owned assets which are held for use in the provision of services, or for administrative purposes and are expected to be used for more than one year.

Basis of RecognitionProperty, plant and equipment are recognized if it is probable that future economic benefits associated with the asset will flow to the company and the cost of the asset can be reliably measured.

Basis of MeasurementAn item of property, plant and equipment that qualifies for recognition as an asset is initially measured at its cost. The cost of an item of property, plant and equipment compromises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use.

DepreciationDepreciation is calculated by using a straight-line method on the cost or valuation of all property, plant and equipment, other than freehold land, in order to write off such amounts over the estimated useful economic life of such assets.

Depreciation is recognized in the statement of comprehensive income on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment. Depreciation of an asset begins when it is available for use and ceases at the date that the asset is disposed. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the company will obtain ownership by the end of the lease term.

Rate of Depreciation

Plant and Machinery - 8 yearsFurniture and Fittings - 10 yearsOffice and Other Equipment - 10 yearsMotor Vehicles - 4 yearsComputers - 1 year

The assets residual values, useful lives and methods of depreciation are reviewed and adjusted as appropriate at each financial year.

Derecognition

An item of property, plant and equipment are derecognized upon replacement, disposal or when no

future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset is included in the statement of comprehensive income in the year the asset is derecognized.

Financial instruments

Financial Assets

Initial Recognition and Measurement

Financial assets within the scope of LKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The company determines the classification of its financial assets at initial recognition.

All financial assets are recognized initially at fair value plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the company commits to purchase or sell the asset.

The Company’s financial assets include cash and fixed deposits, trade and other receivables, loans and other receivables, quoted and unquoted financial instruments.

Subsequent Measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial Assets at Fair Value Through Profit or Loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with changes in fair value recognized in finance income or finance costs in the statement of comprehensive income.

The Company evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Company is unable to trade these financial assets due to inactive markets and management’s intention to sell them in the foreseeable future significantly changes, the company may elect to reclassify these financial assets in rare circumstances. The reclassification to loans and receivables, available-for-sale or held to maturity depends on the nature of

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Significant Accounting Policies Contd...

the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method (EIR), less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the income statement. The losses arising from impairment are recognized in the income statement in finance costs.

Held-to-Maturity Investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the company has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the income statement. The losses arising from impairment are recognized in the income statement in finance costs.

Available-for-Sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available for-sale or are not classified in any of the above categories of financial assets. Available-for-sale financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses on available-for-sale debt instruments, are recognized in other comprehensive income and presented in the “available for sale financial assets reserve” in equity. When an investment is derecognized, the gain or loss accumulated in equity is transferred to profit or loss. Available-for-sale financial assets comprise equity securities.

Impairment losses on available for sale financial assets are recognized by transferring the cumulative loss that has been recognized in other comprehensive income and presented in the “available for sale financial assets reserve” in equity to profit or loss. Changes in cumulative impairment losses attributable to application of the

effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed, with the amount of the reversal recognized in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in other comprehensive income.

Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a company of similar financial assets) is derecognized when:

² The rights to receive cash flows from the asset have expired

² The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass through’ arrangement; and either,

(a) The company has transferred substantially all the risks and rewards of the assets, or

(b) The company has neither transferred nor retained substantially all the risks and rewards of the assets, but has transferred control of the assets.

When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognized to the extent of the company’s continuing involvement in it. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

Impairment of Financial Assets

The company assesses at each reporting date whether there is any objective evidence that a financial asset or a company of financial assets is impaired. A financial asset or a company of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an

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Significant Accounting Policies Contd...

incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the company of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a company of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial Liabilities

Initial Recognition and Measurement

Financial liabilities within the scope of SLFRS/LKAS are recognized when and only when the company becomes a party to the contractual provisions of the financial instrument. Financial liabilities are recognized initially at fair value plus in case of financial liabilities which can be classified in to two categories as financial liabilities at fair value through profit and loss and other financial liabilities. Company has classified its financial liabilities in to other financial liability category.

Subsequent Measurement

The company classifies non derivative financial liability into the other financial liabilities category. Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method. Such financial liabilities measured at amortized cost includes trade and other payables, interest bearing borrowings, amounts due to related companies etc.

Derecognition

A financial liability is derecognized when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in statement of comprehensive income.

Inventories

Inventories are measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of inventories is based on a weighted average cost.

The cost includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories, cost includes an appropriate share of factory overheads based on normal operating capacity.

Trade and Other Receivable

Trade and other receivables are non-derivative financial assets with fixed or determinable payments. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized in the statement of comprehensive income. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited in the statement of comprehensive income.

Cash and Cash Equivalents

Cash and cash equivalents in the Statement of Financial Position comprise cash at banks and in hand. Cash and Bank balances are stated at recoverable value. Bank overdrafts and short term borrowings that are repayable on demand and forming an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash flows.

Other Current Assets

Other current assets include advances, deposits and prepayments. Advances and Deposits are carried at historical value less impairment and amortized over the period during which it is utilized.

Stated capital

Classification

Ordinary shares with discretionary dividends are classified as equity. Other shares are classified as equity or liability according to the economic substance of the particular instrument. Distribution to holders of a financial instrument classified as an equity instrument is charged directly to equity.

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Significant Accounting Policies Contd...

Share Issue Expenses

Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction, net of tax from the proceeds.

Dividend to Shareholders of the Company

Dividend distribution to the Company’s shareholders is recognized as a liability in the Company’s and the company’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

Liabilities and Provisions

Liabilities classified as current liabilities on the statement of financial position are those which fall due for payment on demand of the creditor or within one year from the Statement of Financial Position date. Non-current liabilities are those balances that fall due for payment after one year from the Statement of Financial Position date. All known liabilities have been accounted for in preparing these financial statements. Provisions and liabilities are recognized when the company has a legal or constructive obligation as a result of past events and it is probable that an outflow of economic benefits will be required to settle the obligation.

Loans-Term and Short-Term Borrowings

Borrowings are initially recognized at fair value net of transactions cost. Subsequently, they are stated at amortized cost ; any difference between the proceeds (Net of transaction cost) and the repayable amount (including interest) is recognized in the Statement of Comprehensive Income over the period of the loan using effective interest method.

Trade and Other Payable

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one (1) year or less (Or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Provisions

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

A provision for warranties is recognized when the underlying products or services are sold. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities.

Retirement Benefit Obligation

Defined Benefit Plan - GratuityDefined benefit plan defines an amount of benefit that an employee will receive on retirement, usually dependent on one or more factors such as years of service and compensation. The defined benefit plan comprises the gratuity provided under the Act, No 12 of 1983.

The liability is valued using the gratuity formula prescribed by the Institute of Chartered Accountants of Sri Lanka. The liability is not externally funded.

Defined Contribution Plans - EPF and ETFA defined contribution plan is a post employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligations to pay further amounts. Obligations for contributions to a defined contribution plan are recognized as an employee benefit expense in the income statement in the periods during which services are rendered by employees. The company contributes 12% and 3% of gross emoluments of employees to the Employees’ Provident Fund and to the Employees’ Trust Fund respectively.

Other LiabilitiesOther Liabilities include interest, fees and expenses and other provisions. These liabilities are recorded at amounts expected to be payable at the Reporting date.

Contingent Liabilities and Contingent AssetsThe Company do not recognize a contingent liability but disclose its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognized because it cannot be measured reliably.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Company. The Company do not recognize a contingent asset but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

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Significant Accounting Policies Contd...

Taxation

Income tax expense comprises of current and deferred tax. The income tax expense is recognized in profit or loss except to the extent that it relates to the items recognized directly in the statement of other comprehensive income or statement of changes in equity, in which case it is recognized directly in the respective statements.

Current Taxes

The current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

The provision for income tax is based on the elements of income and expenditure as reported in the financial statements and computed in accordance with the provisions of the Inland Revenue Act No. 10 of 2006.

Deferred Taxation

Deferred tax is provided using liability method on temporary differences as at the reporting date between the tax written down value and their carrying amounts in financial reporting of the company for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognized for unused tax losses and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax assets to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that is probable that future taxable profits will allow the deferred tax assets to be recovered.

Revenue and Expenditure

Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company 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 company separately identifies different component of a single transaction. The following specific criteria are used for the purpose of recognition of revenue.

Sale of Goods

Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost and possible return of goods can be estimated reliably, there is no continuing management involvement with goods and the amount of the revenue can be measured reliably.

Rendering of Services

Revenue is recognized at the fair value of the consideration received or receivable net of trade discounts and sales-related taxes collected on behalf of the government of Sri Lanka when the outcome of a transaction involving the rendering of services can be estimated reliably by reference to the stage of completion of the transaction. The outcome of a transaction is estimated when all the following conditions are satisfied,

- The amount of revenue can be measure reliably,

- It is probable that the economic benefits associated with the transaction will flow to the entity,

- The stage of completion of the transaction at the end of the reporting period can be measure reliably, and,

- The costs incurred for the transaction and the costs to complete the transaction can be measure reliably.

Interest

Interest income is recognized as it accrues in the statement of comprehensive income using effective interest method.

Dividends

Dividend is recognized when the right to receive such is established, which is generally when the dividend is declared.

Gains and Losses

Net gains and losses of a revenue nature arising from the disposal of property, plant and equipment and other non current assets, including investments, are accounted for in the statement of comprehensive income, after deducting from the proceeds on disposal, the carrying amount of such assets and the related selling expenses.

A N N U A L R E P O R T 2 0 1 7 27

Significant Accounting Policies Contd...

Others

Other income is recognized on an accrual basis.

Expenditure Recognition

Expenses are recognized in the statement of comprehensive income on the basis of a direct association between the cost incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant and equipment in a state of efficiency has been charged to the statement of comprehensive income.

For the purpose of presentation of the statement of comprehensive income, the “function of expenses” method has been adopted, on the basis that it presents fairly the elements of the Company’s performance.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets.

All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that the company incurs in connection with the borrowing of funds.

Finance Income and Costs

Finance income comprises of interest income. Interest income is recognized in the statement of comprehensive income as it accrues, using the effective interest method.

Finance expense comprises interest payable on all financial liabilities such as term loans, overdrafts and finance leases.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

Warranty Costs

Costs incurred by the company under the terms of the warranty agreement between principal suppliers are reimbursed to the company. Any amounts that are not reimbursed under the warranty agreement are charged to the statement of comprehensive income.

Statement of Cash Flows

The statements of cash flow have been prepared using the “indirect method” in accordance with LKAS 07 on ‘Statement of Cash Flows’. Cash and cash equivalents comprise cash in hand and cash at bank that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Interest paid is classified under operating cash flows. Dividend received and interest income is classified under cash flows from investing activities. Dividend paid are classified under cash flow from financing activities.

Bank overdraft and short term borrowings that are repayable on demand and forming an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows.

Events Occurring after the Reporting Date

In accordance with the LKAS 10 on ‘Events After the Reporting Period’, events after the reporting date are those events that occur between the reporting date and the date when the financial statements are authorized to issue. All material post reporting date events have been considered and where appropriate adjustments or disclosures have been made in the respective Notes to the financial statements.

Earnings Per Share (EPS)

The financial statements present earnings per share (EPS) for its ordinary shareholders. The EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period.

Related Party Transactions

Disclosure has been made in respect of the transactions in which one party has the ability to control or exercise significant influence over the financial and operating policies/decisions of the other, irrespective of whether a price is charged.

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Notes to the Financial Statements01. ACCOUNTING STANDARDS ISSUED BUT NOT

EFFECTIVE AS AT THE REPORTING DATE

The following Sri Lanka Accounting Standards have been issued by the Institute of Chartered Accountants of Sri Lanka which are not yet effective as at 31 st March 2017.

SLFRS 9 - Financial Instruments: Classification and Measurement

The objective of this Accounting Standard is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity’s future cash flows.

The improvements introduced by SLFRS 9 includes a logical model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-reformed approach to hedge accounting.

An entity shall apply this SLFRS to all items within the scope of LKAS 39 ‘Financial Instruments: Recognition and Measurement’.

SLFRS 9 will become applicable from annual reporting periods beginning on or after 1st April 2018, with early adoption permitted.

SLFRS 15 - ‘Revenue from Contracts with Customers’

T h i s A c co u nt i n g S ta n d a rd e sta b l i s h e s a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including LKAS 18-Revenue, LKAS 11-Construction Contracts and IFRIC 13-Customer Loyalty Programs.

This SLFRS will become applicable from 1st April 2018 and shall be applied prospectively as of the beginning of the annual period in which it is initially applied. The disclosure requirements of this SLFRS need not to be applied comparative information provided for periods before initial application of this SLFRS.

SLFRS 16 - Leases

SLFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer (‘lessee’) and the supplier (‘lessor’). SLFRS 16 will replace Sri Lanka Accounting Standard - LKAS 17 (Leases) and related interpretations. SLFRS 16 introduces a single accounting model for the lessee, eliminating the present classification of leases in LKAS 17 as either operating leases or finance leases.

The new Standard requires a lessee to:

- recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

- present depreciation of lease assets separately, from interest on lease liabilities in the income statement.

SLFRS - 16 substantially carry forward the lessor accounting requirement in LKAS-17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. SLFRS 16 will become Applicable from 1st April 2019. The impact on the implementation of the above Standard has not been quantified yet.

The Company is currently in the process of evaluating the potential effect of these standards on its Financial Statements and the impacts of the adoption of these standards have not been quantified as at the reporting date. Pending the completion of the detailed impact analysis, possible impact for SLFRS 9, SLFRS 15 and SLFRS 16 is not reasonably estimable as at the reporting date.

02. FINANCIAL RISK MANAGEMENT

The company is exposed to a range of financial risks through its number of financial instruments. In particular, the key financial risk categories are:

² Credit Risk / Counterparty risk² Liquidity risk² Market risk² Operational risk

This note presents information about the companies exposure to each of the above risks, the objectives, policies and processes for measuring and managing risk and management of capital. Further quantitative disclosures are included throughout these financial statements.

Risk Management Framework

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The company risk management processes are established to identify and analyse the risks faced by the company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the companies activities.

The Board of Directors oversees how management monitors compliance with the companies risk management policies and procedures, and reviews

A N N U A L R E P O R T 2 0 1 7 29

Notes to the Financial Statements Contd...

Less than 3 3 to 12 1 to 5As at 31st March 2017 On demand months months years > 5 years Total (Rs)

Loans and borrowings - - 17,525,446 2,861,317 - 20,386,763Trade and other payable - 4,251,893 - - - 4,251,893 - 4,251,893 17,525,446 2,861,317 - 24,638,656

Less than 3 3 to 12 1 to 5As at 31st March 2016 On demand months months years > 5 years Total (Rs)

Loans and borrowings - - 8,549,366 4,563,472 - 13,112,838Trade and other payable - 2,632,140 - - - 2,632,140 - 2,632,140 8,549,366 4,563,472 - 15,744,978

the adequacy of the risk management framework in relation to the risks faced by the company.

a. Credit Risk / Counterparty Risk

Credit risk arises from credit exposure to unsecured customers and cash and cash equivalents and deposits/investments with banks and financial institutions and when banks/financial institutions fail to discharge their contractual interest and principal on their debt obligations due to declining financial strength. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings or to historical information about counterparty default rates.

Management of Credit Risk The company manages its credit risk with different

types of instruments as follows

Fixed Deposits Deposits are placed only with reputed and

established commercial banks and other licensed financial institutions.

Trade and Other Receivables The company is responsible for managing and

analysing the credit risk for each of their new customers before standard payment and delivery terms and conditions are offered. The management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Sources of credit risks are identified, assessed and monitored and the company has policies to manage the risks within various subcategories. The utilization of credit limits is regularly monitored. Management does not expect any losses from non-performance by these counterparties.

The company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant

exposures, and a collective loss component established for group’s of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

The maximum exposure to credit risk for trade and other receivables at the reporting date is Rs.23.38Mn (2016 - Rs.13.93Mn) which is recorded in Note 15.

Cash and Cash Equivalents The company held cash and cash equivalents of

Rs.-5.82Mn (2016 - Rs.-5.21Mn) which is recorded in Note 18. Which represents its maximum credit exposure of these assets.

Respective credit ratings of banks in which company cash balances held are as follows,

² Commercial Bank of Ceylon PLC - AA+(lka)

b. Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligation associated with its financial liabilities that are settled by delivering cash or other financial assets.

Management of Liquidity Risk The companies approach to managing liquidity is to

ensure, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation. The companies approach to managing its liquidity risk is as follows:² Regularly monitoring of the companies assets

and liabilities in order to forecast cash flows for up to future period.

² Monitoring the facility limits i.e. overdrafts with banks.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

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Notes to the Financial Statements Contd...

c. Market Risk Market risk is the risk that the fair value or future cash

flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks;

² Foreign Exchange Risk ² Interest Rate Risk ² Equity Price Risk

Foreign Exchange Risk Foreign currency risk is the risk that the value of a

financial instrument will fluctuate due to changes in foreign exchange rates. The company does not use any derivative financial instruments to hedge the risk. The company is not exposed to foreign currency risk as it does not operate internationally.

Interest Rate Risk Interest rate risk is the risk that the fair value or future

cash flows of a financial instrument will fluctuate because of changes in market interest rates. The companies exposure to the risk of changes in market interest rates relates primarily to the companies long-term debt obligations with floating interest rates.

Equity Price Risk The Companies listed and unlisted equity securities

are susceptible to market price risk arising from uncertainties about future values of the investment securities

d. Operational Risk Operational risk is the risk of direct or indirect loss

arising from a wide variety of causes associated with the companies processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the companies operations.

² Requirements for appropriate segregation of duties, including the independent authorization of transactions

² Compliance with regulatory and other legal requirements

² Training and professional development² Ethical and business standards

03. CAPITAL MANAGEMENT

The companies objectives when managing capital are to safeguard the companies ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Consistent with others in the industry, capital is monitored on the basis of the gearing ratio.

A N N U A L R E P O R T 2 0 1 7 31

04. Revenue Turnover - Sale of Goods 61,510,236 42,495,041 Turnover - Rendering of Services 41,418,053 40,176,770 NBT Expense (1,442,581) (1,404,201) 101,485,708 81,267,610

05. Other Income Dividend Income 108,109 27,827 Sundry Income 115,481 - Reversal of warranty provision 1,521,507 - Fixed Assets Disposal - - 1,745,097 27,82706. Net Finance (Cost)/Income

Finance Cost Inter Company Interest - - Interest Paid - Others (1,143,820) (389,041) Overdraft Interest (602,851) (690,960) Lease Interest (499,780) (664,091) Total Finance Cost (2,246,451) (1,744,092) Finance Income Interest Income 336,179 709,485 Inter Company Interest - Total Finance Income 336,179 709,485 Net Finance (Cost)/Income (1,910,272) (1,034,607)

07. Profit Before Income Tax Expense Profit before income tax expense is stated after charging all expenses including the following :

Included in Administrative Expenses Directors Emoluments 825,842 872,344 Directors Fees and Directors Travelling 216,000 216,000 Auditors Remuneration 187,245 189,420 Depreciation 3,282,214 2,965,262 Defined Benefit Cost, Gratuity 665,101 694,384 Salaries and Allowances 12,667,148 11,084,684 EPF 1,214,623 1,109,868 ETF 301,543 274,652 Bonus 796,547 669,104 Incentive Bonus 1,989,336 1,027,424 Warranty Provision - - Traveling 1,478,135 750,949 Allowance for Doubtful Debts - -

2017 2016 Rs. Rs.

Notes to the Financial Statements

For the Financial Year Ended 31st March

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Notes to the Financial Statements Contd...

2017 2016 Rs. Rs.For the Financial Year Ended 31st March

08. Income Tax Expenses Current Income Tax Expense Tax Charge on Profit For The Year (8.1) (1,885,861) 983,228 Deemed Dividend Tax - - Adjustments in Respect of Current Income Tax of Previous Year - - (1,885,861) 983,228 Deferred Income Tax Expense Relating to Origination and Reversal of Temporary Differences (Note 13) (1,561,867) (914,783) Income Tax expense in Statement of Comprehensive Income (3,447,728) 68,445

8.1 Reconciliation between current tax expense and the product of accounting profit

Accounting Profit Before Income Taxation 7,261,127 1,542,046 Deficit / (Surplus) Charge on Employee Retirment Benefits - - Adjusted Accounting Profit 7,261,127 1,542,046 Income Not Subject to Income Tax (393,275) (737,312) Aggregate Disallowed Items 4,604,737 4,841,483 Aggregate Allowable Income - - Aggregate Allowable Expenses (5,022,535) (2,844,174) Taxable Profits from Ordinary Activities 6,450,054 2,802,043 Other Income 285,166 709,485 Tax Losses Brought Forward and Utilized - - Taxable Income 6,735,220 3,511,528 Tax at 28% or Other 1,885,861 983,228 Deemed Dividend Tax - - Tax on Profit for the Year 1,885,861 983,228 Tax Loss at the Beginning of the Year - - Adjustments for Tax Loss Brought Forward - - Tax Loss Utilized for the Year - - Tax Loss at the End of the Year - -

Office Equipment PLC is liable for income tax at a rate of 28% on its business profits and other profits. Deferred tax has been computed using the future effective tax rate of 28%.

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Notes to the Financial Statements Contd...

2017 2016 Rs. Rs.For the Financial Year Ended 31st March

09. Earnings per Share The basic earnings per share is calculated by dividing the net profits for the year attributable to ordinary

shareholders by weighted average number of ordinary shares outstanding during the year.

The weighted average number of Ordinary Shares outstanding during the year, and previous year, are adjusted for the change in the number of Ordinary Shares in issue due to the share split carried out on the 18th of February 2016.

Amounts used as Numerator Profit Attributable to Ordinary Shareholders 3,813,399 1,473,601

Number of Ordinary Shares used as the Denominator Number of Ordinary Shares in Issue 833,560 833,560 Earning / (Loss) per Share (Rs. Cts.) 4.57 1.77

Number of Ordinary Shares in Issue At the Beginning of the Year 833,560 83,356 Increase in the Number of Shares in Issue due to the Share Split - 750,204 Total Number of Shares in Issue as at the end of the Financial Year 833,560 833,560

10. Dividends per Share Amounts used as Numerator Dividend Paid 930,758 -

Number of Ordinary Shares used as the Denominator Number of Ordinary Shares in Issue 833,560 833,560 1.12 -

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Balance Additions / Disposal Balance as at Transfers as at 01.04.2016 31.03.2017 Rs. Rs. Rs. Rs.

Cost/Valuation

At Cost Plant and Machinery 212,957 - - 212,957 Furniture and Fittings 92,373 - - 92,373 Electrical Installations 554,403 - - 554,403 Office Appliances 1,393,613 - - 1,393,613 Reference Library 58,242 - - 58,242 Test Equipment 11,753 - - 11,753 Partitions 256,534 - - 256,534 Computers 1,655,133 277,556 - 1,932,689 Motor Vehicles 3,004,901 3,330,000 - 6,334,901 Total Cost of Freehold Assets 7,239,909 3,607,556 - 10,847,465

At Cost/Valuation Motor Vehicle 8,100,000 - - 8,100,000 Total Cost/Valuation of Leasehold Assets 8,100,000 - - 8,100,000

Total Cost/Valuation Property, Plant and Equipment 15,339,909 3,607,556 - 18,947,465

Depreciation Plant and Machinery 212,957 - - 212,957 Furniture and Fittings 92,372 - - 92,372 Electrical Installations 378,835 45,800 - 424,635 Office Appliances 1,385,772 2,543 - 1,388,315 Reference Library 58,242 - - 58,242 Test Equipment 11,753 - - 11,753 Partitions 256,536 - - 256,536 Computers 1,655,133 277,556 - 1,932,689 Motor Vehicles 2,195,258 931,317 - 3,126,575 Total Depreciation of Freehold Assets 6,246,859 1,257,216 - 7,504,075 Motor Vehicle 2,995,890 2,025,000 - 5,020,890 Total Depreciation of Leasehold Assets 2,995,890 2,025,000 - 5,020,890 Total Depreciation Property, Plant and Equipment 9,242,749 3,282,216 - 12,524,965 Total Carrying Amount of Property, Plant and Equipment 6,097,160 6,422,500

Notes to the Financial Statements Contd...

For the year ended

11. Property, Plant and Equipment

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Notes to the Financial Statements Contd...

2017 2016 Rs. Rs.

For the Financial Year Ended 31st March

Financial Assets - Available for Sale 1,099,064 970,711 1,099,064 970,711

Financial Assets - Available For Sale

Investment in Equity Securities Fair Value Fair Value as at 31.03.2017 as at 31.03.2016

Quoted Equity Securities 1,074,064 945,711Private Equity 25,000 25,000Total Investment in Equity Securities 1,099,064 970,711

All Investments in Quoted Equity Securities are Carried at Fair Value.All Iinvestments in Unquoted Private Equity Securities, whose Fair Value Cannot be Reliably Measured, are Carried at Cost.

Investment in Quoted Equity Securities Cost Fair value Cost Fair value

No of As at As at No of As at As at Shares 31.03.2017 31.03.2017 Shares 31.03.2016 31.03.2016

Softlogic Life Insurance PLC 30,000 85,000 585,000 30,000 85,000 453,000Balangoda Plantation PLC 100 2,000 1,290 100 2,000 1,580CT Land Development PLC 3,150 22,050 138,600 3,150 22,050 143,010Dialog Axiata PLC 1,980 25,380 22,374 1,980 25,380 20,196Hapugastenna Plantation PLC 100 1,000 2,190 100 1,000 1,750Kahawatte Plantation PLC 666 7,490 24,842 666 7,490 25,108Lanka IOC PLC 1,000 27,000 29,000 1,000 27,000 32,500Madulsima Plantations PLC 600 6,250 3,060 600 6,250 4,620Namunukula Plantation PLC 500 7,500 37,000 500 7,500 29,750Nations Trust Bank PLC 2,492 49,705 184,408 2,492 49,705 184,907Sierra Cables PLC 1,100 3,300 3,300 1,100 3,300 3,190Softlogic Holdings PLC 2,000 58,000 23,800 2,000 58,000 26,600Talawekelle Tea Estates PLC 600 6,000 19,200 600 6,000 19,500Total Investment in Quoted Equity Securities 300,675 1,074,064 300,675 945,711

Market value per share are based on the list published by Colombo Stock Exchange.

Investments In Private Equity Percentage No of Shares Cost as at Percentage Cost as at of Holding 31.03.2017 of Holding No of Shares 31.03.2016

Investments in Unlisted CompaniesAssociate Companies - - - - - -Subsidiary Companies - - - - -Other InvestmentsCP Group Investment (Pvt) Ltd 17% 2,500 25,000 17% 2,500 25,000

Total Investment in Private Equity 25,000 25,000

Total Investment in Equity Securities 1,099,064 970,711

12. Non Current Financial Assets

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Notes to the Financial Statements Contd...

For the Financial Year Ended 31st March 2017 2016 Rs. Rs.

13. Deferred Tax Assets As at the Beginning of the Year 1,677,172 762,389 Recognised in Statement of Comprehensive Income (1,561,867) 914,783 As at the End of the Year 115,305 1,677,172 Deferred Tax Assets Originated due to Temporary Differences on the Following Assets and Liability Bases On Property, Plant and Equipment (568,100) (1,366,594) On Retirement Benefit Obligation 683,405 822,519 On Provisions - 2,221,247 Total Deferred Tax Assets 115,305 1,677,172 Deferred Tax Liabilities Originated due to Temporary Differences on the Following Assets and Liability Bases On Property, Plant and Equipment - - Total Deferred Tax Liabilities - - Net Deferred Tax Assets 115,305 1,677,172

14. Inventories Finished Goods 28,414,200 30,893,984 Goods In Transit - 324,219 Provision for Obsolete Stock (2,497,750) (2,497,750) 25,916,450 28,720,453

15. Income Tax Liabilities/(Refund) Balance at the Beginning of the Year (1,757,154) (1,026,138) Tax Paid for Previous Year (111,789) (870,056) Under / (Over) Provision in Respect of the Previous Year - - (1,868,943) (1,896,194) Tax Provision for the Year 1,885,861 983,228 SRL Provision for the Year - - 16,918 (912,966) WHT Paid for the Year (99,090) - Tax Paid for the Year (917,674) (844,188) Balance at the End of the Year (999,846) (1,757,154)

16. Trade and other Receivable Trade Debtors 22,464,870 14,740,479 Provision for Bad Debts (2,895,183) (2,895,183) 19,569,687 11,845,296 Deposits and Prepayments 328,000 286,000 WHT Receivables - - Dues to shareholders Dividend proposed - - Cash for Testing and Caliberation 862,400 660,400 Other Receivables 2,627,938 1,147,056 23,388,025 13,938,752

The maximum exposure to credit risk for trade and other receivables at the reporting date is Rs. 23,388,025 (2016 - Rs. 13,938,752)

Total Neither past Past due but not Impaired due nor 0-60 61-120 121-180 impaired Days Days Days Rs. Rs. Rs. Rs. Rs.

Balance as at 31st March 2017 23,388,025 - 10,262,747 3,954,856 9,170,422

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Notes to the Financial Statements Contd...

For the Financial Year Ended 31st March 2017 2016 Rs. Rs.

17. Due From Related Companies Ceylon Printers PLC - - International Computers (Ceylon) Ltd 1,413,123 689,123 Kalamazoo Industries (Private) Ltd 1,219,037 - Paragon Ceylon PLC 887,475 251,536 C.P.Group Investments (Pvt) Ltd. - - 3,519,635 940,65918. Other Current Financial Assets Loans and Receivables Held to Maturity Investments 16,127,826 15,800,922 Loans and Receivables 2,548,000 13,023,000 18,675,826 28,823,922 Held to Maturity Investments Bank Deposits (Non Equity Investments) 16,127,826 15,800,922 16,127,826 15,800,922 Loans and Receivables Loans to Related Parties 2,548,000 13,023,000 2,548,000 13,023,000 Loans to Related Parties Ceylon Printers PLC - 10,475,000 Loans to Company Officers 2,548,000 2,548,000 2,548,000 13,023,00019. Cash and Cash Equivalents Components of Cash and Cash Equivalents

Components of Cash and Cash Equivalents Favourable Cash and Cash Equivalent Balances Cash at Bank 349,711 1,519,731 Cash In Hand 70,650 70,650 420,361 1,590,381 Unfavourable Cash and Cash Equivalent Balances Bank Overdraft (6,244,452) (6,806,522) (6,244,452) (6,806,522) Cash and Cash Equivalents for the Purpose of Cash Flow Statements (5,824,091) (5,216,141)

20. Stated capital 833,560 Ordinary Shares in issue 833,560 833,560 833,560 833,560

The Company has done a share split on the basis of 10 (Ten) Ordinary Shares for 01 (One) Ordinary Share held, increasing the Ordinary Shares in issue from 83,356 shares, to 833,560 Ordinary Shares, on 18th February 2016.

Number of Ordinary Shares in Issue At the Beginning of the Year 833,560 83,356 Increase in the Number of Shares in Issue due to the Share Split 750,204 Total Number of Shares in Issue as at the end of the Financial Year 833,560 833,560

21. Available For Sale Reserve Balance as at 01st April 697,546 687,945 Add: Gains available for sale financial assets 128,353 9,601 Less: Adjustment due to amalgamation - - Balance as at 31st March 825,899 697,546

Investments classified under this category are initially recognized and subsequently measured at fair value and the changes in fair value are recognized in other comprehensive income and presented under “Available for sale reserve” with in equity.

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Notes to the Financial Statements Contd...

For the Financial Year Ended 31st March 2017 2016 Rs. Rs.

22. Interest Bearing Borrowings

NON CURRENT Obligation under Finance Lease 2,861,316 4,563,472 Total Non Current Loans and Borrowings 2,861,316 4,563,472

CURRENT Bank Overdraft 6,244,452 6,806,522 Obligation under Finance Lease 1,702,156 1,537,844 Term Loan 9,373,838 - Loans from Other Parties 205,000 205,000 Total Current Loans and Borrowings 17,525,446 8,549,366

Obligation under Finance Lease Balance at the Beginning of the Period 7,131,684 9,169,308 Leases Obtained During the Year - - Settlements During the Year (2,037,624) (2,037,624) 5,094,060 7,131,684 Interest in Suspense (530,588) (1,030,367) 4,563,472 6,101,317

Current Maturity Portion 335,469 499,780 Long Term Maturity Portion 195,119 530,588

Payable Within One Year 1,702,156 1,537,845 Payable After One Year 2,861,317 4,563,472 4,563,472 6,101,317 Term Loan Payable Within One Year - - - - Loans from Other Parties Mrs.B.A.J.Ratnasabapathy 205,000 205,000 205,000 205,000

A N N U A L R E P O R T 2 0 1 7 39

For the Financial Year Ended 31st March 2017 2016 Rs. Rs.

Movement in the defined benefit obligation recognized in the financial position :

As at the Beginning of the Year 2,937,568 1,901,200 Opening balance adjustment 47,462 - Transfers - - Charge for the Period (600,887) 1,108,368 Benefits Paid (59,250) (72,000) As at the End of the Year 2,324,893 2,937,568

Changes in the Present Value of Defined Benefit Obligation As at the Beginning of the Year 2,937,568 1,901,200 Opening balance adjustment 47,462 - Interest for the Year 338,702 145,999 Charge for the Year 326,399 548,385 Benefits Paid (59,250) (72,000) Deficit / (Surplus) Charge for the Year (1,265,988) 413,984 Transfers - - As at the End of the Year 2,324,893 2,937,568

The Amounts Recognized in the Statement of Comprehensive Income Opening balance adjustment 47,462 - Interest for the Year 338,702 145,999 Charge for the Year 326,399 548,385 Deficit / (Surplus) Charge for the Year (1,265,988) 413,984 Total (553,425) 1,108,368

1% - 128,682 128,682 (1%) - (138,651) (138,651) - 1% (140,937) (140,937) - (1%) 132,972 132,972

The Employee Benefit Liability of the Company is Based on the Gratuity Formulae in Appendix E of LKAS 19 - Employee Benefits.

The principle assumptions used in determining the cost of employee benefits were:

- Rate of Discount 12.00% 7.80% - Salary Increment Rate 9.25% 10.00% - Retirement Age 55 years and 80 years

Sensitivity of assumptions employed in actuarial valuation The following table demonstrates the sensitivity to a reasonably possible change in the key assumptions em-

ployed with all other variables held constant in the employment benefit liability measurement.

The sensitivity of the Income Statement and Statement of Financial Position is the effect of the assumed changes in discount rate and salary increment rate on the profit or loss and employment benefit obligation for the year.

Increase/ (Decrease) in

Discount Rate

Increase/ (Decrease) in

Salary Increment

Sensitivity effect on Income statement Increase /(Reduction)

in results for the year

Sensitivity effect on Employment Benefit Obligation Increase /

(Decrease) in the Liability

23. Retirement Benefit Obligation

Notes to the Financial Statements Contd...

A N N U A L R E P O R T 2 0 1 740

Notes to the Financial Statements Contd...

For the Financial Year Ended 31st March 2017 2016 Rs. Rs.

24. Trade and other Payables Trade Creditors 113,241 110,819 Kalamazoo Systems PLC 6,000 6,000 NBT Payable 268,103 106,323 VAT Payable 2,240,180 992,569 Expense Creditors 1,624,369 1,416,429 4,251,893 2,632,140

25. Due to related companies Ceylon Printers PLC 67,057 12,857,924 International Computers (Ceylon) Ltd - - Kalamazoo Industries (Private) Ltd - 2,204,963 Paragon Ceylon PLC - - C.P.Group Investments (Pvt) Ltd. - - 67,057 15,062,887

26. Commitments and Contingencies The company has given a corporate guarante to Ceylon Printers PLC for the facilities obtained.

There were no commitments and contingencies existing as at the reporting date , other than the details diclosed above.

27. Events Occurring After The Reporting Date Shares of International Computers (Ceylon) Ltd amounting 30,000 owned by Ceylon Printers PLC has been sold

to Office Equipment PLC in the subsequent period.

Shares of C.P Group Investments (Pvt) Ltd amounting 2,500 owned by Office Equipment PLC has been sold to Ceylon Printers PLC in the subsequent period.

There were no circumstances that have arisen, other than disclosed above, since the reporting date, which would require adjustments to, or disclosure, in the financial statements.

Proposed final dividend

The Directors have recommended the payment of a final dividend of Rs. 1.00 per share for the year ended 31st March 2017 which requires the Approval of the Shareholders at the Annual General Meeting. In accordance with Sri Lanka Accounting Standard LKAS 10 , Events After the Reporting date, this proposed final dividend has not been recognized as a liability as at the end of reporting period.

As required by section 56 (2) of the Companies Act No. 7 of the 2007, the board of directors have confirmed that the company satisfies the solvency test in accordance with Section 57 of the Companies Act No. 7 of 2007, and have obtained solvency certificates from the auditor and the necessary approvals from the Central Bank of Sri Lanka prior to declaring the said dividends.

A N N U A L R E P O R T 2 0 1 7 41

28. Directors Interest In Contracts

The directors of the company are also the directors of following companies.

Company Name Names of Directors

Ceylon Printers PLC Mr. W. N. S. Canagaratna Mr. L. C. G. Ratnanather Mr. J. P. S. Ratnanather Mr. A. A. Page Mr. P. S. R. Casie Chitty Mr. M. M. Marzook

International Computers (Ceylon) Ltd Mr. W. N. S. Canagaratna Mr. L. C. G. Ratnanather Mr. J. P. S. Ratnanather Mr. A. A. Page

Kalamazoo Industries (Pvt) Ltd Mr. W. N. S. Canagaratna Mr. L. C. G. Ratnanather Mr. J. P. S. Ratnanather Mr. A. A. Page Paragon Ceylon PLC Mr. W. N. S. Canagaratna Mr. L. C. G. Ratnanather Mr. J. P. S. Ratnanather Mr. P. S. R. Casie Chitty Mr. M. M. Marzook C. P Group Investment (Pvt) Ltd Mr. W. N. S. Canagaratna Mr. L. C. G. Ratnanather

Key management personnel (KMP)

Compensation of key management personnel 2016/17 2015/16 Short term employee benefits 1,041,842 1,088,344

Other than disclosed above none of the Directors are either directly or indirectly interested in any existing or proposed contracts with the Company.

Notes to the Financial Statements Contd...

A N N U A L R E P O R T 2 0 1 742

Notes to the Financial Statements Contd...

For the Financial Year Ended 31st March 2017 2016Name of Company Nature of Transaction Rs. Rs.

Ceylon Printers PLC Purchase of Goods and Services 215,250 2,387 Fund transfers (13,006,117) (210,612) (12,790,867) (208,225)

International Computers (Ceylon) Ltd Purchase of Goods and Services 56,050 - Fund transfers 667,950 (166,450) 724,000 (166,450)

Kalamazoo Industries (Private) Ltd Fund transfers (3,424,000) - (3,424,000) -

Paragon Ceylon PLC Rent expenses 503,700 503,700 Fund transfers 132,239 - 635,939 503,700

Outstanding Balances Arising From Sale / Purchase of Goods / Services

For the Financial Year Ended 31st March 2017 2016 Debits Credits Debits Credits Rs. Rs. Rs. Rs.

Ceylon Printers PLC - 67,057 - 12,857,924 International Computers (Ceylon) Ltd 1,413,123 - 689,123 - Kalamazoo Industries (Private) Ltd 1,219,037 - - 2,204,963 Paragon Ceylon PLC 887,475 - 251,536 - C.P.Group Investments (Pvt) Ltd. - - - - 3,519,635 67,057 940,659 15,062,887

There have been no related party transactions other than those disclosed above to be disclosed in the financial statements.

29. Related Party Transactions

Details of significant related party transactions that have been carried out in the ordinary course of business in an arms length basis with entities are disclosed below.

All unsecured and repayable on demand. No guarantees have been issued or received in respect of any related party balances. All balances are fully recoverable and payable in cash.

The Company has entered into transactions During the Year with the Following Companies in which a Director of the Company is also a Director of the Said Company.

A N N U A L R E P O R T 2 0 1 7 43

Notes to the Financial Statements Contd...

30. Asset PledgedThe following assets have been pledged to Commercial Bank PLC, as securities for the facilities obtained.

Facility Security Amount (Rs.)

OverDraft Facility General terms and conditions relating to Overdraft for Rs. 5,000,000/- to be signed by the company.

5,000,000

Import Facility Lien over documents of title to goods under import. 10,000,000

Import Demand Loan

Facility

General terms and conditions relating to Import Demand Loan for Rs. 10,000,000/- to be signed by the company.

10,000,000

Usance Release Individual drafts drawn by the suppliers and accepted by the company to be lodged with the bank.

10,000,000

Guarantee Facility Single Counter Indemnity dared 07/01/2016 signed by the company for a letter of Guarantee limit of Rs. 3,000,000/-.

3,000,000

One off Letter of Credit Facility

Lien over documents of title to goods under import. 5,440,838

For all facilities

Lien over following fixed deposits in the name of the company held underlien to the bank together with letter of anthority and set off.

Account No. Value (Rs.) Interest Rate Maturity Date

3030015738 3,564,169 10% 17.06.20173030019177 5,899,742 10% 28.07.20163400718202 6,454,967 9% 21.04.2017

For the Financial Year Ended 31st March 2017 2016 Rs. Rs.

A N N U A L R E P O R T 2 0 1 744

Notes

A N N U A L R E P O R T 2 0 1 7 45

Notes

A N N U A L R E P O R T 2 0 1 746

Notes

A N N U A L R E P O R T 2 0 1 7 47

Form of Proxy

I/We……………………………………………..................……………...……………….............................................……………………………....

of……....………………………………………………..............………………………….......……..........................................…………………..... being a member /members of Office Equipment PLC hereby appoint,

(i) …………………………………....................………...........................................................…………………..……………………………….

of …………………………………………………………................................................….....................................or failing him/her.

Mr. W. N. S. Canagaratna ............................................................................................................. WHOM FAILINGMr. L.C. G. Ratnanather ............................................................................................................... WHOM FAILINGMr. J. P. S. Ratnanather ................................................................................................................ WHOM FAILINGMr. J.A.S.Ratnasabapathy ............................................................................................................ WHOM FAILINGMr. Anthony A. Page .................................................................................................................... WHOM FAILINGMr. M M Marzook ........................................................................................................................ WHOM FAILINGMr. P. S. R. Casie Chitty ................................................................................................................ WHOM FAILING

(ii) the Chairman of the Meeting as my/our proxy to vote as indicated hereunder for me /us and on my/our behalf at the 60th Annual General Meeting of the Company to be held on 13st December 2017 at 10.15 a.m. and at any adjournment thereof .

* The proxy may vote as he/she thinks fit on any other resolution brought before the Meeting.

Dated this ………………………………. day of …………………………….. 2017

……………...............…………… ……….……..............................….........…………... Date Signature of Member(s)

For Against

1. To declare a dividend as recommended by the Directors

2. To pass the ordinary resolution set out in the Notice of Meeting under item 3 for the appointment of Mr. W.N.S. Canagaratne.

3. To pass the ordinary resolution set out in the Notice of Meeting under item 3 for the appointment of Mr. L. C. G. Ratnanather.

4. To pass the ordinary resolution set out in the Notice of Meeting under item 3 for the appointment of Mr. J P S Ratnanather .

5. To re-elect Mr. P S R Casie Chitty who retires by rotation at the Annual General Meeting, a Director.

6. To authorise the Board of Directors to determine contributions to charities and other donations.

7. To re-appoint Messrs, Baker Tilly Edirisinghe & Co., as Auditors and authorise the Directors to determine their remuneration.

A N N U A L R E P O R T 2 0 1 748

Form of Proxy Contd...

Instructions As To Completion Of Proxy Form

1 To be valid, this proxy form must be completed, signed, and deposited at the Registered Office of the Company, No. 20, Sir Chittampalam A Gardiner Mawatha, Colombo 2, Sri Lanka by 11th December 2017.

2 In perfecting the form of proxy, please ensure that all details are legible.

3 If you wish to appoint a person other than the Chairman as your proxy, please insert the relevant details at (i) overleef and initial against this entry. A proxy need not be a member of the Company.

4 Please indicate with an” X” in the space provided how your proxy is to vote on each resolution. If no indication is given, the proxy at his discretion will vote as he thinks fit. Please delete (*) if you do not wish your proxy to vote as he thinks fit on any other resolution brought before the Meeting.

5 In the case of a Company/ Corporation, the proxy must be under its Common Seal, which should be affixed and attested in the manner prescribed by its Articles of Association.

6 In the case of joint holders, only one need to sign. The votes of the senior holder who tenders a vote will alone be accounted.

Office Equipment PLCNo. 20, Sir Chittampalam A Gardiner Mawatha,Colombo 2

2017

Ceylon Printers PLCAnnual Report

Office Equipment PLCAnnual Report

Paragon Ceylon PLCAnnual Report