ceylon printers plc annual report · ceylon printers plc annual report. 2016 1 ... colombo 2, not...

2016

Ceylon Printers PLCAnnual Report

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Notice of Meeting

NOTICE IS HEREBY GIVEN that the Fifty Ninth Annual General Meeting of Ceylon Printers PLC will be held in the Board Room of Ceylon Printers Group, No. 20, Sir Chittampalam A. Gardiner Mawatha, Colombo 2, on 31st October 2016 at 10.00 a.m. for the following purposes :

1. To re-elect Mr. W. N. S. Canagaratna who retires at the Annual General Meeting, a Director. Mr. W. N. S. Canagaratna has attained the age of Eighty years and the Company has received special notice of intention in compliance with Law, relating to his re-election.

2. To re-elect Mr. L. C. G. Ratnanather who retires at the Annual General Meeting, a Director. Mr. L. C. G. Ratnanather has attained the age of Eighty One years and the Company has received special notice of intension in compliance with Law, relating to his re-election

3. To re-elect Mr. J P S Ratnanather who retires at the Annual General Meeting, a Director. Mr. J P S Ratnanather has attained the age of eighty Five years and the Company has received special notice of intension in compliance with Law, relating to his re-election

4. To receive and adopt the Report of the Directors and the Statement of Accounts for the year ended 31st March 2016 and the Report of the Auditors thereon.

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

6. To re-elect Mr. M M Marzook who retires by rotation 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. Edirisinghe & Co. as Auditors and authorise the Directors to determine their remuneration.

By Order of the BoardBUSINESSMATE (PVT.) LTDSecretaries

20th September, 2016

Colombo

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.

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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

Businessmate (Pvt) Ltd

Chief Executive Officer

M. R. Ratnasabapathy

Head of Finance L. I. Ratnasabapathy

A.G.M. 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

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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 11 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 51 years of senior management experi-ence. 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 (Cey-lon) 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 31 years of senior management ex-perience. He acts as the alternate director to Mr. J. P. S. Ratnanather and oversees the Human Resources and Admin-istrative 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 45 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 Insti-tute 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, Kalamazoo Systems 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 Jayewar-denepura. He is currently the Head of Special Projects – Finance and Management Information Systems, at Hayleys Advantis Limited. He counts for over 27 years’ experience in Finance, Consulting and Financial Advisory.

Directors’ Profile

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Chairman’s Review

On behalf of the Board of Directors, I welcome you to the fifty-ninth Annual General Meeting of Ceylon Printers PLC and it gives me great pleasure to present to you the Annual Report of the Company for the year ended 31st March 2016.

The Company underwent many significant changes during the year. A rights issue was conducted and the proceeds utilised, along with proceeds from a new bank loan towards investments in new machinery. Depreciation charges increased by 1.932 million and interest cost increased by 2.558 million during the year as a result of the new invest-ment.

Installation of the new machine took place in December 2015 and production commenced thereafter but teething problems in the first few months prevented the company from achieving the optimum output on the machine. The teething problems have now largely been resolved.

A new position of CEO was created in February of 2016 and Mr Ravi Ratnasabapathy was appointed to the position.

The printing industry has been badly hit by the decline in the tea exports due to downturns in key overseas markets particularly Russia and the Middle East. Tea production declined by 11.1% and exports by 3.4% in the first half of 2016. This lead to severe price competition amongst printers.

The Sri Lankan rupee depreciated by about 11% during the year resulting increased costs of raw materials but due to high competition cost increases could not be passed on to customers resulting in an erosion of margins.

The turnover of the Company in the period under review increased by Rs. 58.606 million from Rs. 81.139 million to Rs. 139.746 million, and Group turnover increased from Rs 85.194 million to Rs. 143.271 million.

The Company’s Net Profit after tax increased from a loss of Rs. 0.896 million in the preceding year to a loss of Rs. 5.319 million and the Group’s Net Profit after tax increased from a loss of Rs. 0.201 million in the preceding year to a loss of Rs. 4.929 million

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.

In conclusion, I wish to take this opportunity to express my thanks to 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


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Directors Report

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY – FOR YEAR 2015/16.The Directors are pleased to present their report together with the audited Financial Statements for the year ended 31st March 2016. The details set out herein provide the pertinent information in compliance with the Companies Act No. 07 of 2007.

Principal Activities And Review of BusinessThe principal activity of the Company is that of a Commercial Printer and this has remained unchanged. Ceylon Printers PLC is the holding Company that owns investments in International Computers (Ceylon) Ltd and CP Group Investments (Pvt) Ltd, Whose principal activity is trading in Computers and computer accessories and the provision of preventive maintenance services of computers and software solutions and providing interest bearing loans to the staff of the Ceylon Printers Group of Companies. A review of Business and it’s performance during the year with comments on financial results is contained in The Chairman’s Review.

There are no other classes in which the company has an interest, either as a Shareholder of another company or otherwise.

The Directors are not aware of any other material information which would add on for the Shareholders to have a further appreciation of the state of the company’s affairs outside the information disclosed in Financial Statements.

Financial StatementsThe Financial Statements of the Company and the Group for the accounting period ended 31st March 2016, com-pleted and signed in accordance with the provisions of the Companies Act is given on pages 15 to 16.

Auditor’s ReportThe Auditor’s Report on the Financial Statements of the Company and the Group is given on page 14.

Accounting PoliciesThe Notes to the Financial Statements contained herein describe the accounting policies adopted in the preparation of financial Statements.

Stated CapitalThe Stated Capital is the total of the amounts received by the Company in respect of the issue of Shares.

The Stated Capital of the Company as at 31st March 2016 consists of 600,170 Ordinary shares totaling to Rs. 30,358,500/-. There was a Rights Issue and a sub division during the year.

DividendsThe Directors have not recommended any Dividend for the year ended 31st March 2016.

InvestmentsThe investments in Listed Companies and Subsidiaries are disclosed in Note 11 to the Financial Statements.

Property Plant and EquipmentInformation relating to movements of Property, Plant and Equipment is given in Note 10 to the Financial Statements.

DirectorateThe basis on which Directors are classified as Independent Non Executive Directors is discussed in the Corporate Governance statement.

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Directors Report Contd...

The Directors of the company as at the end of the accounting period and those who ceased to hold office as Direc-tors of the Company during the accounting period are as follows:.

Directors as at 31st March 2016 Remarks

Mr. W. N. S. Canagaratna - Executive Director Mr. L.C. G. Ratnanather - Executive Director Mr. J. P. S. Ratnanather - Non Executive Director Mr. J.A.S. Ratnasabapathy - Non Executive Director Mr. Anthony A. Page - Non Executive Director Mr. P S R Casie Chitty - Independent Non Executive Director Mr. M. M Marzook - Independent Non Executive Director Mr. W. N. S. Canagaratna who reached the age of 80 years on 3rd June 2016 retires pursuant to Section 210 of the Company’s Act No. 07 of 2007. Special Notice has been received from a member of the Company regarding the re-election of Mr. W. N. S. Canagaratna. Mr. W. N. S. Canagaratna offer himself for re-election.

Mr. L. C. G. Ratnanather who reached the age of 81 years on 12th April 2016 retires pursuant to Section 210 of the Company’s Act No. 07 of 2007. Special Notice has been received from a member of the Company regarding the re-election of Mr. L. C. G. Ratnanather. Mr. L. C. G. Ratnanather offer himself for re-election

Mr. J P S Ratnanather who reached the age of the age of 85 years on 24th June 2016 retires pursuant to Section 210 of the Company’s Act No. 07 of 2007. Special Notice has been received from a member of the Company regarding the re-election of Mr. J P S Ratnanather. Mr. J P S Ratnanather offer himself for re-election.

Mr. P S R Casie Chitty is due to retire by rotation at the forthcoming Annual General Meeting of the Company In terms of Article 90 of the Articles of Association of the Company, and being eligible, offer himself for re-election and this is recommended by the Board.

Mr. M. M Marzook is due to retire by rotation at the forthcoming Annual General Meeting of the Company In terms of Article 90 of the Articles of Association of the Company, and being eligible, offer himself for re-election and this is recommended by the Board.

Directors/Chief Executive Officers Shareholdings

The Shareholdings of the Directors/Chief Executive Officers together with those of their spouses are as follows:

31st March 2016 31st March 2015 Number Number

Mr. W. N. S. Canagaratna-Chairman/Managing Director 65,610 3,828Mr. L.C. G. Ratnanather Nil NilMr. J. P. S. Ratnanather Nil NilMr. J. A. S. Ratnasabapathy 16,720 760Mr. Anthony A. Page 10 1Mr. P S R Casie Chitty Nil NilMr M. M. Marzook Nil NilMr. R. Ratnasabapathy-Chief Executive Officer w.e.f. 18th February 2016 Nil Nil

82,340 4,589

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Directors Report Contd...

Directors Remuneration and other benefitsThe Directors remuneration and other benefits of the Company and the Subsidiary during the financial year 2015/2016 is Rs. 510,508/- and Rs. 96,000/- respectively

Interest RegisterThe particulars of entries in the Interest Register and the Directors Interests in the Contracts of the Company are disclosed under Note 25 to the financial statements contained herein.

The Directors are not either directly or indirectly interested in any existing or proposed contracts with the Company other than what is disclosed in the Financial Statements.

Post Balance Sheet EventsNo circumstances of significance have arisen since the Balance Sheet date, other than disclosed in Note 24 which, would require adjustments to or disclosure in the financial statements.

DonationsThe total amount of Donations made by the company during the Financial Year are Rs. 0.00

AuditorsM/s BAKER TILLY Edirisinghe & Co., Chartered Accountants, Auditors of the Company, have signified their willingness to continue in office and are recommended for re-appointment.

The amounts payable to Auditors as audit fees of the Company and the Subsidiary are Rs.270,374/- and Rs. 190,977/- respectively.

The fees payable by the company and the Subsidiary for other services provided by the Auditors are;

Nature of Service Fees Payable

None -

The particulars of relationship (other than that of Auditors) which the Auditors have with or any interests which the Auditors have in, the company and the Subsidiary are;

Nature of Relationship Fees Payable

None -

Employee Share OwnershipThe Company does not operate any share option scheme.

Going Concern The Directors have made an assessment of the Company’s ability to continue as a going concern and do not intend either to liquidate or to cease operations of the Company.

By Order of the Board

----------------------------- --------------------------- -----------------------------------Chairman/Managing Director Finance Director Businessmate (Pvt) Ltd., Secretaries.20th September 2016

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Information to Shareholders and Investors

2. Shareholder Analysis 2016 2015 No of shares No of shares held % held % Shares held by the public 290,380 48.38% 16,927 48.35% Shares held by the others 309,790 51.62% 18,083 51.65% 600,170 100.00% 35,010 100.00%

1. Twenty Largest Shareholdings

2016 2015 No of Shares No of Shares Held % Held % 1) C T Holdings Limited 118,830 19.80% 6,932 19.80%2) Mr. J T Ratnanather 108,620 18.10% 6,562 18.74%3) Mr. W N S Canagaratna 51,730 8.62% 3,018 8.62%4) Sir Chittampalam A Gardiner Trust 27,840 4.64% 1,624 4.64%5) Cyril Gardiner Limited 26,040 4.34% 1,409 4.02%6) Mr. E J Gunasekera 20,350 3.39% -7) Mr. P Poongunaseelan 18,509 3.08% -8) Mrs. A M De Alwis 17,250 2.87% 793 2.27%9) Mr.A J C Ratnanather 16,950 2.82% 906 2.59%10) Mrs B A J Ratnasabapathy 16,720 2.79% 760 2.17%11) Mr. G I Ratnanather 15,370 2.56% 897 2.56%12) Mr J S Ratnanather 15,360 2.56% 896 2.56%13) Dr Mrs M C P Canagaratna 13,880 2.31% 810 2.31%14) Miss P R Canagaratna 13,260 2.21% 774 2.21%15) Dr. Mrs. M T Stanislaus 7,600 1.27% 760 2.17%16) Mrs. P Poonkulavathani 5,940 0.99% -17) Mr. G T Fazleabas 5,510 0.92% 551 1.57%18) Mr G H S Kumara 5,210 0.87% -19) Mr. H W M Woodward 5,000 0.83% 500 1.43%20) Shalsri Investments (Pvt) Ltd 4,660 0.78% - 514,629 85.75% 27,192 77.67%Balance shareholders 85,541 14.25% 7,818 22.33%Total 600,170 100.00% 35,010 100.00%

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Information to Shareholders and Investors Contd...

3. Equity

- Earnings per share - Rs. (10.16) - Dividend per share - Rs. 00.00 - Net asset value per share Rs. 66.36

The Company has not raised funds on listed securities. The market value information of Ceylon Printers PLC is as follows: The market value information of Ceylon Printers PLC is as follows:

- Market Value of a Share as at 31st March 2016 was Rs. 158.90 - The highest value per share traded during the financial year was Rs. 3,374.00 and the lowest value per

share traded during the financial year was Rs. 142.00

4. Distribution of Shareholdings

2016 2015 2016 2015 2016 2015 No. of Shareholders No. of Shares Held % Held

1 - 1,000 249 193 53,041 13,231 8.84% 37.80%

1,001 - 5,000 19 4 37,160 8,285 6.19% 23.66%

5,001 - 10,000 5 2 29,260 13,494 4.87% 38.54%

10,001 - 50,000 11 Nil 201,529 Nil 33.58% Nil

50,001 - 100,000 3 Nil 279,180 Nil 46.52% Nil

100,001 - 500,000 Nil Nil Nil Nil Nil Nil

500,001 - 1,000,000 Nil Nil Nil Nil Nil Nil

1,000,001 and over Nil Nil Nil Nil Nil Nil

Total 287 190 600,170 35,010 100.00 100.00

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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 safe-guard 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 loca-tions 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 Ceylon Printers PLC values the guiding principles of good Corporate Governance to main-tain 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 Directors

The 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 2015/2016 the board held 02 meeting and reserved certain decisions to itself while others were del-egated 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 individu-als of high standing in society, experts in their chosen fields and individuals of the highest standards of integrity.

Independent Directors

As 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 Contracts

Directors’ interests in contracts have been disclosed and declared at the meetings of the Directors during the year and are disclosed in Note 25 to the Accounts and also entered in the Interest Register.

Audit Committee

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

Remuneration Committee

The 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.

Disclosure of Information and Compliance

The 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.

Businessmate (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.

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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 experi-enced 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 pack-age of Managing Director, Executive Directors and the Management Staff, their respective performances and decid-ing on appropriate remuneration packages for them; as well as determining incentives based on Company perfor-mance for all management staff.

The Committee also reviewed data concerning remuneration packages among comparable Companies. The Man-aging 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


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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. And 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 Sri Lanka Accounting Standards and whether the financial reporting requirements, are in accordance with the Compa-nies 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 ap-proval 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 Account-ing 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 Proce-dures 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, Head of Finance and As-sistant General Manager - 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,


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Auditors Report

To The Shareholders Of Ceylon Printers Plc

Report on the Financial StatementsWe have audited the accompanying financial statements of Ceylon Printers PLC, (“the Company”), and the consolidated financial statements of the Company and its subsidiaries (“Group”), which comprise the statement of financial position as at March 31, 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and, cash flow statement 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, 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 Group as at March 31, 2016 and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

Report on Other Legal and Regulatory 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 give a true and fair view of its financial position as at March 31, 2016,

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

- the financial statements of the Company and the Group, comply with the requirements of section 151 and 153 of the Companies Act No. 07 of 2007.

Edirisinghe & Co.,Chartered Accountants.Colombo 02.


Independent Auditor’s Report

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Auditors Report

Group Company

For the Financial Year Ended 31st March 2016 2015 2016 2015 Note Rs. Rs. Rs. Rs.

Statement of Profit or Loss and Other Comprehensive Income

Revenue 03 143,271,017 85,194,239 139,746,106 81,139,851

Cost of Sales (125,906,395) (74,640,992) (124,415,597) (72,076,012)Gross Profit 17,364,622 10,553,247 15,330,509 9,063,839

Other Income 04 2,618,986 1,042,002 2,544,814 811,497

Selling and Distribution Costs (1,195,129) (796,037) (996,887) (651,987)Administration Expenses (23,635,263) (10,586,223) (22,116,515) (9,986,806)Results from Operating Activities (4,846,784) 212,989 (5,238,079) (763,457)

Finance Costs 05 (2,895,765) (337,793) (2,894,202) (335,616)Finance Income 05 574,876 40,350 430,938 27,224Net Finance (Cost)/Income (2,320,889) (297,443) (2,463,264) (308,392)

Profit / (Loss) before Income Taxation 06 (7,167,673) (84,454) (7,701,343) (1,071,849)

Income Tax Expenses / (Tax Credit) 07 2,238,477 (116,809) 2,382,259 175,201

Profit / (Loss) for the Year (4,929,196) (201,263) (5,319,084) (896,648)

Profit / (Loss) After Income Taxation (4,929,196) (201,263) (5,319,084) (896,648)

Other Comprehensive IncomeNet Change in Fair Value of Available-for-Sale Financial Assets (1,963,313) 516,298 (2,030,871) 516,298Fair Value Impact of Equity Investments Disposed during the Period - - - -Deficit / (Surplus) Charge on Employee Retirement Benefit Obligation (987,397) 141,824 (897,162) 141,824

Other Comprehensive Income / (Expense) for the year (2,950,710) 658,122 (2,928,033) 658,122

Total Comprehensive Income / (Expense) for the Year (7,879,906) 456,859 (8,247,117) (238,526)

Profit / (Loss) Attributable toEquity Holders of the Parent (4,991,551) (201,263) - -Minority Interest 62,355 - - - (4,929,196) (201,263) - -

Total Comprehensive Income / (Expense) Attributable toEquity Holders of the Parent (7,976,040) 456,859 - -Minority Interest 96,134 - - - (7,879,906) 456,859 - -

Earnings / (Loss) per Share (Rs. Cts.) 08 (9.54) (0.45) (10.16) (2.01)

Dividend per Share (Rs. Cts.) 09 - 11.00 - 11.00

TheAccountingPoliciesandtheNotestotheAccountsformanintegralpartofthesefinancialstatements.Figuresinbracketsindicatedeductions.

A N N U A L R E P O R T 2 0 1 616

Statement of Financial Position

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

Group Company

As at 31.03.2016 31.03.2015 31.03.2016 31.03.2015 Note Rs. Rs. Rs. Rs.

AssetsNon - Current AssetsProperty , Plant and Equipment 10 37,938,106 570,128 37,938,106 569,108Non Current Financial Assets 11 824,125 2,763,409 4,023,749 6,182,952Deferred Tax Assets 12 6,146,005 3,714,283 4,561,224 2,100,534Total Non Current Assets 44,908,236 7,047,820 46,523,079 8,852,594

Current AssetsInventories 13 22,479,904 15,154,082 22,479,904 15,154,082Trade and Other Receivables 14 39,269,893 16,372,195 38,104,383 16,008,195Due from Related Companies 15 14,429,664 74,426 15,194,790 145,729Other Current Financial Assets 16 5,627,893 1,987,423 4,041,448 1,927,420Income Tax Refund 2,545,813 2,275,361 2,133,025 2,054,757Cash and Cash Equivalents 17 1,597,827 695,965 649,385 388,030Total Current Assets 85,950,994 36,559,452 82,602,935 35,678,213

TOTAL ASSETS 130,859,230 43,607,272 129,126,014 44,530,807

EQUITY AND LIABILITIES

Capital and ReservesStated Capital 18 30,358,500 350,100 30,358,500 350,100Reserves - - - -Other Components of Equity 522,859 2,519,951 489,080 2,519,951Retained Earnings 6,392,578 11,709,515 8,977,892 15,194,138Non Controlling Interest 2,157,166 - - -Total Equity Attributable to Owners of the Company 39,431,103 14,579,566 39,825,472 18,064,189

Non - Current LiabilitiesLoans and Borrowings 22 20,910,000 - 20,910,000 -Retirement Benefit Obligation 19 9,561,911 7,637,375 9,140,733 7,350,941Total Non Current Liabilities 30,471,911 7,637,375 30,050,733 7,350,941

Current LiabilitiesTrade and Other Payable 20 11,271,503 10,229,207 10,949,986 8,791,443Due to Related Companies 21 6,634,823 4,547,699 5,249,933 3,710,809Income Tax Payable - - - -Loans and Borrowings 22 43,049,890 6,613,425 43,049,890 6,613,425Total Current Liabilities 60,956,216 21,390,331 59,249,809 19,115,677

TOTAL EQUITY AND LIABILITIES 130,859,230 43,607,272 129,126,014 44,530,807

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 20th September 2016.

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

L. I. RatnasabapathyFinance Officer

A N N U A L R E P O R T 2 0 1 6 17

Statements of Changes in EquityGROUP Available Non- Stated Retained for Sale Controlling Capital Earnings Reserve Interest Total Rs. Rs. Rs. Rs. Rs.

Balance as at 1st April 2013 350,100 7,674,929 4,223,142 - 12,248,171

Net Profit / (Loss) for the Year - 4,479,090 - - 4,479,090

Other Comprehensive Income / (Expense) for the Year - - (2,219,489) - (2,219,489)Total Comprehensive Income / (Expense) for the Year - 4,479,090 (2,219,489) - 2,259,601

Transfers - - - - -Dividends - - - - -


Net Profit / (Loss) for the Year - (201,263) - - (201,263)

Other Comprehensive Income / (Expense) for the Year - 141,824 516,298 - 658,122Total Comprehensive Income / (Expense) for the Year - (59,439) 516,298 - 456,859

Transfers - - - - -Dividends - (385,065) - - (385,065)


Book Value of Non Controling Interest - - - 1,399,021 1,399,021Net Profit / (Loss) for the Year - (4,991,551) - 62,355 (4,929,196)Gain on Bargaining Acquisition of Subsidiary - 662,011 - 662,011 1,324,022Rights Issue 30,008,400 - - - 30,008,400

Other Comprehensive Income / (Expense) for the Year - (987,397) (1,997,092) 33,779 (2,950,710)Total Comprehensive Income / (Expense) for the Year 30,008,400 (5,316,937) (1,997,092) 2,157,166 24,851,537Transfers - - - - -Dividends - - - - -

Balance as at 31st March 2016 30,358,500 6,392,578 522,859 2,157,166 39,431,103

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Statements of Changes in Equity Contd...

COMPANY Available Stated Retained for sale Capital Earnings reserve Total Rs. Rs. Rs. Rs.

Balance as at 1st April 2013 350,100 12,381,555 4,223,142 16,954,797

Net Profit / (Loss) for the Year - 3,952,472 - 3,952,472

Other Comprehensive Income / (Expense) for the Year - - (2,219,489) (2,219,489)Total Comprehensive Income / (Expense) for the Year - 3,952,472 (2,219,489) 1,732,983

Transfers - - - -Dividends - - - -


Net Profit / (Loss) for the Year - (896,648) - (896,648)

Other Comprehensive Income / (Expense) for the Year - 141,824 516,298 658,122Total Comprehensive Income / (Expense) for the Year - (754,824) 516,298 (238,526)

Transfers - - - -Dividends - (385,065) - (385,065)


Net Profit / (Loss) for the Year - (5,319,084) - (5,319,084)

Rights Issue 30,008,400 - - 30,008,400

Other Comprehensive Income / (Expense) for the Year - (897,162) (2,030,871) (2,928,033)Total Comprehensive Income / (Expense) for the Year 30,008,400 (6,216,246) (2,030,871) 21,761,283

Transfers - - - -Dividends - - - -

Balance as at 31st March 2016 30,358,500 8,977,892 489,080 39,825,472

A N N U A L R E P O R T 2 0 1 6 19

Group Company

For the Financial Year Ended 31st March 2016 2015 2016 2015 Rs. Rs. Rs. Rs.

Statement of Cash Flows

Cash Flows from Operating ActivitiesProfit / (Loss) Before Income Taxation (7,167,673) (84,454) (7,701,343) (1,071,849)Adjustment forDepreciation 2,243,555 311,382 2,242,535 310,362Dividend Income - - - -Interest Income (574,876) (40,350) (430,938) (27,224)Interest Expenses 2,895,765 337,793 2,894,202 335,616Lease Interest - - - -Profit or Loss on Assets Disposal (1,720,230) - (1,720,230) -Fair Value Adjustment - - - -Provision for Warranty Expenses - - - -Provision for Retirement Benefit Obligations 1,283,764 1,092,965 1,239,255 1,055,252Operating Profit Before Working Capital Changes (3,039,695) 1,617,336 (3,476,519) 602,157Working Capital Adjustments(Increase) / Decrease in Inventories (7,325,822) (9,623,642) (7,325,822) (9,623,644)(Increase) / Decrease in Trade and Other Receivables (34,229,477) (4,176,448) (35,606,125) (2,386,958)Increase / (Decrease) in Trade and Other Payables 880,200 8,935,729 2,158,544 7,973,322(Payment) / Receipts of Related Party Balances - - - -Cash Generated from Operations (43,714,794) (3,247,025) (44,249,922) (3,435,123)

Income Tax Paid (426,274) (2,464,117) (156,700) (2,289,383)Interest Paid (2,895,765) (337,793) (2,894,202) (335,616)Gratuity Paid (346,625) - (346,625) -Net Cash Flow from Operating Activities (47,383,458) (6,048,935) (47,647,449) (6,060,122)

Cash Flows from Investing ActivitiesInterest Received 574,876 40,350 430,938 27,224Investment in Fixed Deposit (2,060,834) (144,359) (2,026,451) (144,358)Fixed Deposit Uplifted - - - -Dividends Received - - - -Purchase of Equity Securities (15,000) - (75,000) -Acquisition of Property, Plant and Equipment (39,611,533) (414,450) (39,611,533) (414,450)Acquisition of Subsidiary Net of Cash 206,961 - - -Sales proceeds on Disposal of Equity Investments 1,923,561 - 1,923,561 -Net Cash Flow from Investing Activities (38,981,969) (518,459) (39,358,485) (531,584)

Cash Flows from Financing ActivitiesLoan Obtained During The Year 55,975,000 5,000,000 55,975,000 5,000,000Loan Settlement During The Year (500,000) - (500,000) -Dividends Paid - (385,065) - (385,065)Loans to Company Officers Recovery (87,576) - (87,576) -Rights Issue 30,008,400 - 30,008,400 -Net Cash Flow from Financing Activities 85,395,824 4,614,935 85,395,824 4,614,935

Net Increase / (Decrease) in Cash and Cash Equivalents (969,603) (1,952,459) (1,610,110) (1,976,771)

Cash and Cash Equivalents at the Beginning of the Year (917,460) 1,034,999 (1,225,395) 751,376

Cash and Cash Equivalents at the End of the Period NOTE A (1,887,063) (917,460) (2,835,505) (1,225,395)

NOTE A - CASH AND CASH EQUIVALENTSFavourable BalancesCash in Hand and at Bank 1,597,827 695,965 649,385 388,030Unfavourable BalancesBank Overdrafts (3,484,890) (1,613,425) (3,484,890) (1,613,425) (1,887,063) (917,460) (2,835,505) (1,225,395)

A N N U A L R E P O R T 2 0 1 620

Corporate Information

Reporting Entity

Ceylon Printers 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 and it’s subsidiary were commercial printing and trading in Computers and computer accessories and the provision of preventive maintenance services of computers and software solutions and providing interest bearing loans to the staff of the Ceylon Printers Group of Companies

Basis Of Preparation

Statement of Compliance

The financial statements of the Company and it’s subsidiaries 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 and its subsidiary 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 2016 (including comparatives) were approved and authorised for issue on 20th September 2016.

The Financial Statements include following components:

• The Statement of Profit and Loss and Comprehensive Income

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

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

the company as at the year.• The Statement of Changes in Equity Providing information on the movements of stated

capital and reserves of the during the period.• The Statement of Cash Flows Providing information to the users, on generating

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

• Notes to the Financial Statements Comprising accounting policies and other

explanatory notes.

Basis of Measurement

The Consolidated 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;

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

• Loans and Receivables are measured at amortized cost.

• 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 group are measured using the currency of the primary economic environment in which the group operates. Financial Statements are presented in Sri Lankan Rupees, which is the group ‘s functional and presentation currency.

Going Concern

The Directors have made an assessment of the Company’s and it’s Subsidiaries 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.

A N N U A L R E P O R T 2 0 1 6 21

Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries are prepared in compliance with the Group’s accounting policies unless otherwise stated

All intra-Group balances, income and expenses, unrealized gains and losses resulting from intra-Group transactions and dividends are eliminated in full.

Subsidiaries

Subsidiaries are those enterprises controlled by the parent. Control exists when the parent holds more than 50% of the voting rights or otherwise has a controlling interest. Subsidiaries are fully consolidated from the date of acquisition or incorporation, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, which is 12 months ending 31 March, using consistent accounting policies.

Subsidiaries consolidated have been listed in the Group directory. The following companies, with equity control equal to or more than or less than 50%, have been consolidated as subsidiaries based on the power to govern the financial and operating policies of those entities.

1. International Computers (Ceylon) Ltd 99.89%2. CP Group Investment (Pvt) Ltd 49.99%

The total profits and losses for the year of the Company and of its subsidiaries included in consolidation are shown in the consolidated statement of comprehensive income and all assets and liabilities of the Company and of its subsidiaries included in consolidation are shown in the statement of financial position.

Non-controlling interest which represents the portion of profit or loss and net assets not held by the Group, are shown as a component of profit for the year in the consolidated income statement and statement of comprehensive income and as a component of equity in the consolidated statement of financial position, separately from parent’ shareholders’ equity.

The consolidated statement of cash flow includes the cash flows of the Company and its subsidiaries.

Assets and Bases of their Valuation

Property, Plant and Equipment

The company and its subsidiaries 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 Recognition

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

Basis of Measurement

An 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.

Depreciation

Depreciation 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.

The estimated useful lives as follows

Rate of Depreciation

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

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

A N N U A L R E P O R T 2 0 1 622

Significant Accounting Policies Contd...

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 AssetsInitial 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 and it’s subsidiaries 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 group commits to purchase or sell the asset.

The Group’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 Group 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 group 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 group 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 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 group 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

A N N U A L R E P O R T 2 0 1 6 23


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 group of similar financial assets) is derecognized when:

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

• 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 group 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 group’s continuing involvement in it. In that case, the group 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 group 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 group could be required to repay.

Impairment of Financial Assets

The group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group 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 incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group 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 LiabilitiesInitial recognition and measurement

Financial liabilities within the scope of SLFRS/LKAS are recognized when and only when the company and it’s subsidiaries becomes a party to the contractual provisions of the financial instrument. abilities 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 group 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

A N N U A L R E P O R T 2 0 1 624


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 group 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

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.

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 and it’s subsidiaries 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.

A N N U A L R E P O R T 2 0 1 6 25


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 (Orin 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 group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. 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 ETF

A 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 Liabilities

Other 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 Assets

The group 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 group 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 group. The group do not recognize a contingent asset but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

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 and it’s

A N N U A L R E P O R T 2 0 1 626


subsidiaries 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 utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized 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 group and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes. The group 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.

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

A N N U A L R E P O R T 2 0 1 6 27


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 group’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 and it’s subsidiaries under the terms of the warranty agreement between principal suppliers are reimbursed to the group. 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. The transition from previous SLASs to new SLASs has not had a material impact on the Statement of Cash Flows.

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 group’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.

A N N U A L R E P O R T 2 0 1 628

Notes to the Financial Statements

1. 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 2016.

SLFRS 15 ,’Revenue from contracts with customers’, The objective of this standard is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature,amount,timing and uncertainty of revenue and cash flows arising from a contract with a customer.

SLFRS 15 will become effective on 01st January 2018.

SLFRS 9,’Financial Instruments’, This standard will replace Sri Lanka accounting Standard -LKAS 39(Financial Instruments :Recognition and measurement).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.


SLFRS 14, ‘Regulatory Deferral Accounts’, The objective of this standard is to specify the financial reporting requirements for regulatory deferral account balances that arise when an entity provides goods or services to customers at a price or rate that is subject to rate regulation.


2. Financial Risk Management

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

• Credit Risk / Counterparty Risk • Liquidity Risk • Market Risk • Operational Risk

This note presents information about the group’s 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 group risk management processes are established to identify and analyse the risks faced by the group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the group’s activities.

The Board of Directors oversees how management monitors compliance with the group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the group.

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 group 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 group 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 group 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.

A N N U A L R E P O R T 2 0 1 6 29

Notes to the Financial Statements Contd...

The group 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.

Cash and Cash Equivalents

The group held cash and cash equivalents of Rs. 1,597,827 (2015 - Rs. 695,965) which is recorded in Note 17. Which represents its maximum credit exposure of these assets.

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

• Commercial Bank of Ceylon PLC - AA+(lka) • Nations Trust Bank - A (lka)

b. Liquidity Risk

Liquidity risk is the risk that the group 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 group’s 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 group’s approach to managing its liquidity risk is as follows:

• Regularly monitoring of the group’s assets and liabilities in order to forecast cash flows for up to future period.

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

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

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

Loans and borrowings - - 43,049,890 20,910,000 - 63,959,890 Trade and other payable - - 17,906,326 - - 17,906,326 - - 60,956,216 20,910,000 - 81,866,216

Less than 3 3 to 12 1 to 5 > 5 As at 31st March 2015 On demand months months years years Total (Rs)

Loans and borrowings - - 6,613,425 - - 6,613,425 Trade and other payable - - 14,776,906 - - 14,776,906 - - 21,390,331 - - 21,390,331

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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;

• Foreign Exchange Risk• Interest Rate Risk• 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 group does not use any derivative financial instruments to hedge the risk. The group 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 group’s exposure to the risk of changes in market interest rates relates primarily to the group’s long-term debt obligations with floating interest rates.

Equity Price Risk

The Group’s 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 group’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the group’s operations.

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

• Compliance with regulatory and other legal requirements

• Training and professional development• Ethical and business standards

3. CAPITAL MANAGEMENT

The group’s objectives when managing capital are to safeguard the group’s 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 6 31

03. Revenue Turnover 146,090,352 86,807,528 142,565,441 82,753,140 NBT Expense (2,819,335) (1,613,289) (2,819,335) (1,613,289) 143,271,017 85,194,239 139,746,106 81,139,851

04. Other Income Sundry Income 874,849 955,452 824,584 811,086 Dividend Income 23,907 411 - 411 Disposal of Investment 1,720,230 - 1,720,230 - Tax Written-Back - 86,139 - - 2,618,986 1,042,002 2,544,814 811,497

05. Net Finance (Cost)/Income Finance Cost Interest Expense (2,895,765) (337,793) (2,894,202) (335,616) Total Finance Cost (2,895,765) (337,793) (2,894,202) (335,616)

Finance Income Interest Income 574,876 40,350 430,938 27,224 Intercompany Interest - - - - Total Finance Income 574,876 40,350 430,938 27,224

Net Finance (Cost)/Income (2,320,889) (297,443) (2,463,264) (308,392)

06. 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 534,508 396,189 510,508 396,189 Directors Fees and Directors Travelling 343,600 255,600 247,600 176,400 Machinery Hire Charges 11,403,650 8,306,505 11,403,650 8,306,505 Auditors Remuneration 461,351 259,400 270,374 172,200 Depreciation 2,243,552 326,382 2,242,534 310,362 Defined Benefit Cost, Gratuity 2,271,161 1,055,253 1,239,255 1,055,253 Salaries 6,576,245 4,185,052 5,982,245 3,715,052 EPF 669,274 330,008 526,517 289,832 ETF 136,954 112,662 124,909 72,486 Bonus 453,143 337,595 417,643 310,195 Medical Aid and Welfare 932,155 272,132 928,935 272,132 Insurance 135,245 217,290 92,204 217,290 Power and Electricity 481,220 211,192 481,220 211,192 Disallowable VAT - 661,746 - -

Group Company

2016 2015 2016 2015 Rs. Rs. Rs. Rs.For the Financial Year Ended 31st March


A N N U A L R E P O R T 2 0 1 632

07. Income Tax Expenses Current Income Tax Expense

Tax Charge on Profit For The Year (7.1) 193,245 201,811 78,431 4,955Deemed Dividend Tax - - - -Adjustments in Respect of Current Income Tax of Previous Year - - - - 193,245 201,811 78,431 4,955

Deferred Income Tax ExpenseRelating to Origination and Reversal of Temporary Differences (Note 12) (2,431,722) (85,002) (2,460,690) (180,156)Income Tax Expense / (Credit) in the Statement of Comprehensive Income (2,238,477) 116,809 (2,382,259) (175,201)

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

Accounting Profit Before Income Taxation (7,167,673) (84,454) (7,701,343) (1,071,849)Deficit / (Surplus) Charge on Employee Retirment Benefits - 141,824 - 141,824Adjusted Accounting Profit (7,167,673) 57,370 (7,701,343) (930,025)Income Not Subject to Income Tax (155,029) - - -Aggregate Disallowed Items 3,621,941 1,363,647 3,576,241 1,312,915Aggregate Allowable Expenses (13,904,729) (394,862) (13,904,729) (438,362)Aggregate Allowable Income (2,163,984) (40,761) (2,151,168) (27,635)Taxable Profits from Ordinary Activities (19,769,474) 985,394 (20,180,999) (83,107)Interest Income 574,876 40,350 430,938 27,224Taxable Profits from ordinary activities 411,525 - - -Adjustments for Tax Loss for the Year (296,239) (304,990) (150,828) (9,528)Taxable Income 690,162 720,752 280,110 17,696Tax at 28% or Other 193,245 201,811 78,431 4,955Tax on Profit for the Year 193,245 201,811 78,431 4,955

Tax Loss at the Beginning of the Year 5,396,550 5,701,540 73,580 -Taxable Loss for the Year 20,180,999 - 20,180,999 83,108Tax Loss Utilized for the Year (296,239) (304,990) (150,828) (9,528)Tax Loss at the End of the Year 25,281,310 5,396,550 20,103,751 73,580


Group Company


A N N U A L R E P O R T 2 0 1 6 33


08. Earnings / (Loss) 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 Rights Issue carried out on the 9th of October 2015 and the Share Split carried out on the 18th of February 2016.

Amounts used as NumeratorProfit / (Loss) Attributable to equity holders of the Company for basic Earnings per share (4,991,551) (201,263) (5,319,084) (896,648)

Number of Ordinary Shares used as the Denominator“Weighted Average number of Ordinary Shares in issue applicable to basic Earnings per Share” 523,301 446,432 523,301 446,432

Earning / (Loss) per Share (Rs. Cts.) (9.54) (0.45) (10.16) (2.01)

Number of Ordinary Shares in IssueAt the Beginning of the Year 35,010 35,010 35,010 35,010Increase in the Number of Shares in Issue due to the Rights Issue 25,007 - 25,007 -Increase in the Number of Shares in Issue due to the Share Split 540,153 - 540,153 -Total Number of Shares in Issue as at the end of the Financial Year 600,170 35,010 600,170 35,010

09. Dividends Per Share Amounts used as Numerator Dividend Paid - 385,065 - 385,065

Number of Ordinary Shares used as the Denominator Number of Ordinary Shares in Issue 600,170 35,010 600,170 35,010 - 11.00 - 11.00

Group Company


A N N U A L R E P O R T 2 0 1 634

GROUP Balance Additions/ Balance As at Transfers/ As at 01.04.2015 (Disposals) 31.03.2016 Rs. Rs. Rs.

Cost/Valuation

At Cost Plant and Machinery 3,475,013 38,344,361 41,819,374 Furniture and Fittings 887,481 174,992 1,062,473 Electrical Installation 1,688,616 618,200 2,306,816 Office Appliances 4,110,809 125,000 4,235,809 Fixtures 30,449 348,980 379,429 Partitions 407,770 - 407,770 Tools 115,435 - 115,435 Motor Vehicle 2,073,972 - 2,073,972 Computers 2,211,687 - 2,211,687 Computer Software 366,016 - 366,016 Spares 98,321 - 98,321 Total Cost of Freehold Assets 15,465,569 39,611,533 55,077,102 At Cost/Valuation Motor Vehicle 600,000 - 600,000 Total Cost/Valuation of Leasehold Assets 600,000 - 600,000

Total Cost/Valuation Property, Plant and Equipment 16,065,569 39,611,533 55,677,102 Depreciation Plant and Machinery 3,370,361 2,050,340 5,420,701 Furniture and Fittings 883,154 5,072 888,226 Electrical Installation 1,288,095 153,272 1,441,367 Office Appliances 4,050,167 26,146 4,076,313 Fixtures 30,459 8,725 39,184 Partitions 407,771 - 407,771 Tools 115,435 - 115,435 Motor Vehicle 2,088,972 - 2,088,972 Computers 2,211,690 - 2,211,690 Computer Software 366,016 - 366,016 Spares 98,321 - 98,321 Reference Library - - - Total Depreciation of Freehold Assets 14,910,441 2,243,555 17,153,996

Motor Vehicle 585,000 - 585,000 Total Depreciation of Leasehold Assets 585,000 - 585,000

Total Depreciation Property , Plant and Equipment 15,495,441 2,243,555 17,738,996

Total Carrying Amount of Property , Plant and Equipment 570,128 37,938,106


10. Property, Plant and Equipment

A N N U A L R E P O R T 2 0 1 6 35

COMPANY Balance Additions/ Balance As at Transfers/ As at 01.04.2015 (Disposals) 31.03.2016 Rs. Rs. Rs.

Cost/Valuation

At Cost Plant and Machinery 3,475,013 38,344,361 41,819,374 Furniture and Fittings 887,481 174,992 1,062,473 Electrical Installation 1,681,015 618,200 2,299,215 Office Appliances 4,092,209 125,000 4,217,209 Fixtures 30,449 348,980 379,429 Partitions 407,770 - 407,770 Tools 115,435 - 115,435 Motor Vehicle 2,073,972 - 2,073,972 Computers 2,211,687 - 2,211,687 Computer Software 366,016 - 366,016 Spares 98,321 - 98,321 Total Cost of Freehold Assets 15,439,368 39,611,533 55,050,901 At Cost/Valuation Motor Vehicle - - - Total Cost/Valuation of Leasehold Assets - - -

Total Cost/Valuation Property, Plant and Equipment 15,439,368 39,611,533 55,050,901

Depreciation Plant and Machinery 3,370,361 2,050,340 5,420,701 Furniture and Fittings 883,154 5,072 888,226 Electrical Installation 1,280,495 153,272 1,433,767 Office Appliances 4,032,587 25,126 4,057,713 Fixtures 30,459 8,725 39,184 Partitions 407,770 - 407,770 Tools 115,435 - 115,435 Motor Vehicle 2,073,972 - 2,073,972 Computers 2,211,690 - 2,211,690 Computer Software 366,016 - 366,016 Spares 98,321 - 98,321 Reference Library - - - Total Depreciation of Freehold Assets 14,870,260 2,242,535 17,112,795

Motor Vehicle - - - Total Depreciation of Leasehold Assets - - -

Total Depreciation Property , Plant and Equipment 14,870,260 2,242,535 17,112,795

Total Carrying Amount of Property , Plant and Equipment 569,108 37,938,106

10. Property, Plant and Equipment


A N N U A L R E P O R T 2 0 1 636

For the year ended Notes to the Financial Statements Contd...

Financial Assets - Available for Sale 824,125 2,763,409 4,023,749 6,182,952 824,125 2,763,409 4,023,749 6,182,952

Financial Assets - Available For Sale

Investment in Equity Securities Fair Value Fair Value Fair Value Fair Value As at As at As at As at

31.03.2016 31.03.2015 31.03.2016 31.03.2015

Quoted Equity Securities 824,125 2,763,409 529,206 2,763,409 Private Equity - - 3,494,543 3,419,543 Total Investment in Equity Securities 824,125 2,763,409 4,023,749 6,182,952

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.

Group Company

2016 2015 2016 2015 Rs. Rs. Rs. Rs.

11. Non Current Financial Assets

For the Financial year ended 31st March

GROUP

Investment in Quoted Equity Securities Cost Fair Value Cost Fair Value No of As at As at No of As at As at Shares 31.03.2016 31.03.2016 shares 31.03.2015 31.03.2015

Kalamazoo Systems PLC - - - 1,822 203,332 1,936,239 Paragon Ceylon PLC 914 40,126 529,206 914 40,126 827,170 CT Land Development PLC 6,496 39,980 294,919 - - - Total investment in Quoted Equity Securities 80,106 824,125 243,458 2,763,409

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

Investments In Private Equity Percentage Percentage of No of Cost as at of No of Cost as at Holding shares 31.03.2016 Holding shares 31.03.2015

Investments in Unlisted Companies

Total investment in Private Equity - -

Total Investment in Equity Securities 824,125 2,763,409

A N N U A L R E P O R T 2 0 1 6 37

COMPANY

Investment in Quoted Equity Securities Cost Fair Value Cost Fair Value No of As at As at No of As at As at Shares 31.03.2016 31.03.2016 shares 31.03.2015 31.03.2015

Kalamazoo Systems PLC - - - 1,822 203,332 1,936,239 Paragon Ceylon PLC 914 40,126 529,206 914 40,126 827,170 Total investment in Quoted Equity Securities 40,126 529,206 243,458 2,763,409

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

Investments In Private Equity Percentage Percentage of No of Cost as at of No of Cost as at Holding shares 31.03.2016 Holding shares 31.03.2015

Investments in Unlisted Companies

Associate Companies - - - - - -

Subsidiary Companies International Computers (Ceylon) Ltd 99.99% 30,000 3,419,543 99.99% 30,000 3,419,543 CP Group Investment (Pvt) Ltd 49.99% 7,500 75,000 - - -

Other Investments - - - - -

Total investment in Private Equity 3,494,543 3,419,543

Total Investment in Equity Securities 4,023,749 6,182,952


A N N U A L R E P O R T 2 0 1 638

12. Deferred Tax Assets As at the Beginning of the Year 3,714,283 3,629,281 2,100,534 1,920,378 Recognised in Statement of Comprehensive Income 2,431,722 85,002 2,460,690 180,156 As at the End of the Year 6,146,005 3,714,283 4,561,224 2,100,534 Deferred Tax Assets Originated due to Temporary Differences on the Following Assets and Liability Bases

On Property, Plant and Equipment - 42,271 - 42,271 On Retirement Benefit Obligation 2,149,927 2,138,465 2,058,263 2,058,263 On Tax Loss Carried Forward 7,122,166 1,533,833 5,629,049 - Total Deferred Tax Assets 9,272,093 3,714,569 7,687,312 2,100,534 Deferred Tax Liabilities Originated due to Temporary Differences on the Following Assets and Liability Bases

On Property, Plant and Equipment (3,126,088) (286) (3,126,088) - Total Deferred Tax Liabilities (3,126,088) (286) (3,126,088) -

Net Deferred Tax Assets 6,146,005 3,714,283 4,561,224 2,100,534

13. Inventories Raw Materials 11,524,202 9,949,223 11,524,202 9,949,223 Work in Progress 9,813,869 5,204,859 9,813,869 5,204,859 Finished Goods 1,141,833 - 1,141,833 - Binders and Stock Forms - - - - 22,479,904 15,154,082 22,479,904 15,154,082

14. Trade And Other Receivable Trade Debtors 26,830,862 15,854,031 25,758,077 15,502,031 Provision for Bad Debts (89,280) (89,280) (89,280) (89,280) 26,741,582 15,764,751 25,668,797 15,412,751 Interest Receivable 75,353 - - - VAT Receivable - 12,000 - - Deposits and Prepayments 15,000 595,444 - 595,444 Other Receivables 12,437,958 - 12,435,586 - 39,269,893 16,372,195 38,104,383 16,008,195

The maximum exposure to credit risk for trade and other receivables at the reporting date is Rs. 39,269,893 (2015 - Rs. 16,372,195)

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

Balance as at 31st March 2016 26,741,582 - 15,578,649 3,897,569 7,265,364


Group Company


A N N U A L R E P O R T 2 0 1 6 39

15. Due From Related Companies International Computers (Ceylon) Ltd - - 839,552 145,729 Kalamazoo Systems PLC - - - - Kalamazoo Industries (Private) Ltd 74,426 74,426 - - Office Equipment PLC 12,857,924 - 12,857,924 - Paragon Ceylon PLC 1,497,314 - 1,497,314 - C.P. Group Investments (Pvt) Ltd. - - - - 14,429,664 74,426 15,194,790 145,729

16. Other Current Financial Assets Loans and Receivables Loans to Related Parties - - - - Loans to Company Officers 1,870,639 1,843,065 1,870,638 1,783,062 Investment in Fixed Deposits 3,757,254 144,358 2,170,810 144,358 5,627,893 1,987,423 4,041,448 1,927,420 Loans to Company Officers Balance at the Beginning of the Year 1,843,065 2,197,568 1,783,062 2,157,567 Fair Value of Loans Granted During the Year 2,262,797 1,053,639 2,262,797 1,053,639 Unwinding Interest on Staff Loans (60,003) - - - Repayments (2,175,221) (1,408,142) (2,175,221) (1,428,144) Balance at the End of the Year 1,870,639 1,843,065 1,870,638 1,783,062

17. Cash And Cash Equivalents Components of Cash and Cash Equivalents

Favourable Cash and Cash Equivalent Balances Cash at Bank 1,570,814 668,952 627,372 366,017 Cash In Hand 27,013 27,013 22,013 22,013 1,597,827 695,965 649,385 388,030 Unfavourable Cash and Cash Equivalent Balances Bank Overdraft (3,484,890) (1,613,425) (3,484,890) (1,613,425) (3,484,890) (1,613,425) (3,484,890) (1,613,425) Cash and Cash Equivalents for the purpose of Cash Flow Statements (1,887,063) (917,460) (2,835,505) (1,225,395)

18. Stated Capital Opening Ordinary Shares (35,010 Ordinary Shares) 350,100 350,100 350,100 350,100 25,007 Ordinary Shares In Right Issue 30,008,400 - 30,008,400 - Post Sub Division Of Ordinary Shares (600,170 Ordinary Shares) 30,358,500 350,100 30,358,500 350,100

The Company has done a Rights Issue on the basis of 05 (Five) new Ordinary Shares for every 07 (Seven) shares held at an Issue Price of Rs. 1,200 per Share on the 9th of October 2015.

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 60,017 shares, to 600,170 Ordinary Shares, on 18th February 2016.

Number of Ordinary Shares in Issue At the Beginning of the Year 35,010 35,010 35,010 35,010

Increase in the Number of Shares in Issue due to the Rights Issue 25,007 - 25,007 -

Increase in the Number of Shares in Issue due to the Share Split 540,153 - 540,153 -

Total Number of Shares in Issue as at the end of the Financial Year 600,170 35,010 600,170 35,010


Group Company


A N N U A L R E P O R T 2 0 1 640


19. Retirement Benefit Obligation Movement in the defined benefit obligation recognized in the financial position

As at the Beginning of the Year 7,637,375 6,686,234 7,350,941 6,437,512 Transfers - - - - Charge for the Period 2,271,161 954,338 2,136,417 913,429 Benefits Paid (346,625) (3,197) (346,625) - As at the End of the Year 9,561,911 7,637,375 9,140,733 7,350,941 Changes in the Present Value of Defined Benefit Obligation

As at the Beginning of the Year 7,637,375 6,686,234 7,350,941 6,437,512 Interest for the Year 566,643 433,900 544,301 408,904 Charge for the Year 717,121 662,262 694,954 646,349 Benefits Paid (346,625) (3,197) (346,625) - Deficit / (Surplus) Charge for the Year 987,397 (141,824) 897,162 (141,824) Transfers - - - - As at the End of the Year 9,561,911 7,637,375 9,140,733 7,350,941 The Amounts Recognized in the Statement of Comprehensive Income

Interest for the Year 566,643 433,900 544,301 408,904 Charge for the Year 717,121 662,262 694,954 646,349 Deficit / (Surplus) Charge for the Year 987,397 (141,824) 897,162 (141,824) Total 2,271,161 954,338 2,136,417 913,429

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 7.80% 10.05% 7.80% 10.05%

- Salary Increment Rate 10.00% 10.00% 10.00% 10.00%

- Retirement Age 55 years and 85 years 55 years and 85 years

Group Company


A N N U A L R E P O R T 2 0 1 6 41

Group Company


20. Trade And Other Payables Trade Creditors 9,552,324 3,924,099 9,552,324 3,923,033 NBT Payable 297,471 247,747 297,471 247,747 VAT Payable - 609,553 - 609,553 Expense Creditors 1,287,739 980,602 966,222 782,970 Other Payable 133,969 4,467,206 133,969 3,228,140 11,271,503 10,229,207 10,949,986 8,791,443

21. Due To Related Companies International Computers (Ceylon) Ltd - - - - Kalamazoo Systems PLC - - - - Kalamazoo Industries (Private) Ltd 5,249,933 1,262,942 5,249,933 1,262,942 Office Equipment PLC 689,123 2,648,570 - 1,983,447 Paragon Ceylon PLC 695,767 636,187 - 464,420 C.P. Group Investments (Pvt) Ltd. - - - - 6,634,823 4,547,699 5,249,933 3,710,809

22. Loans And Borrowings Non Current Loans Term Loan - Payable After One Year 20,910,000 - 20,910,000 - 20,910,000 - 20,910,000 - Other Current Loans Bank Overdraft 3,484,890 1,613,425 3,484,890 1,613,425 Temporary Loans 33,475,000 5,000,000 33,475,000 5,000,000 Term Loan - Payable within One Year 6,090,000 - 6,090,000 - Total Current Interest Bearing Loans and Borrowings 43,049,890 6,613,425 43,049,890 6,613,425

23. Commitments And Contingencies There were no commitments and contingencies existing as at the reporting date.

24. Events Occurring After The Reporting Date The Directors of CP Group Investments (Pvt) Ltd, on the 28th of August 2016, have recommended and made

the payment of a final dividend of Rs. 4.00 per share to the ordinary share holders of the company for the year ended 31st March 2016. 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.

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.

A N N U A L R E P O R T 2 0 1 642

25. Directors Interest In Contracts The Directors of the company are also the Directors of following companies. Name of Company Names of Directors

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

Office Equipment 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

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 Mr. J. B. M. Ponrajah

C. P Group Investment (Pvt) Ltd Mr. W. N. S. Canagaratna Mr. L. C. G. Ratnanather

Other than disclosed above none of the Directors are either directly or indirectly interested in any existing or

proposed contracts with the Company.


A N N U A L R E P O R T 2 0 1 6 43

Group Company

26. Related Party Transactions The company has entered into transactions during the year with following companies in which a Director of the company is also a Director of the said company.


International Computers (Ceylon) Ltd Sale of Goods and Services - - - - Kalamazoo Systems PLC Sale of Goods and Services - - - - Kalamazoo Industries (Private) Ltd Sale of Goods and Services - - - - Office Equipment PLC Sale of Goods and Services 377,062 532,764 210,612 354,014 Paragon Ceylon PLC Sale of Goods and Services 42,005 156,601 42,005 123,701 C.P. Group Investments (Pvt) Ltd. Sale of Goods and Services - - - - 419,067 689,365 252,617 477,715

International Computers (Ceylon) Ltd Purchase of Goods and Services - - 618,192 468,100 Kalamazoo Systems PLC Purchase of Goods and Services - 5,950 - 5,950 Kalamazoo Industries (Private) Ltd Purchase of Goods and Services 11,400,000 - 11,400,000 - Office Equipment PLC Purchase of Goods and Services 2,387 1,400 2,387 1,400 Paragon Ceylon PLC Purchase of Goods and Services 1,029,620 1,177,165 1,029,620 1,177,165 C.P. Group Investments (Pvt) Ltd. Purchase of Goods and Services - - - - 12,432,007 1,184,515 13,050,199 1,652,615

2016 2015

2016 2015

For the Financial Year Ended 31st March

For the Financial Year Ended 31st March

GROUP

COMPANY

Debits Credits Debits Credits Rs. Rs. Rs. Rs.

Debits Credits Debits Credits Rs. Rs. Rs. Rs.

Outstanding balances arising from sale/purchase of goods/services.

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

International Computers (Ceylon) Ltd - - - -Kalamazoo Systems PLC - - - -Kalamazoo Industries (Private) Ltd 74,426 5,249,933 74,426 1,262,942Office Equipment PLC 12,857,924 689,123 - 2,648,570Paragon Ceylon PLC 1,497,314 695,767 - 636,187C.P. Group Investments (Pvt) Ltd. - - - - 14,429,664 6,634,823 74,426 4,547,699

International Computers (Ceylon) Ltd 839,552 - 145,729 -Kalamazoo Systems PLC - - - -Kalamazoo Industries (Private) Ltd - 5,249,933 - 1,262,942Office Equipment PLC 12,857,924 - - 1,983,447Paragon Ceylon PLC 1,497,314 - - 464,420C.P. Group Investments (Pvt) Ltd. - - - - 15,194,790 5,249,933 145,729 3,710,809

Name of Company Nature of Transaction 2016 2015 2016 2015 Rs. Rs. Rs. Rs.

A N N U A L R E P O R T 2 0 1 644

27. Assets Pledged

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

Facility Security Amount (Rs.)L.C Facility Lien Over Fixed Deposits of Commercial Bank of Ceylon PLC 2,023,266

The following assets have been pledged to NDB, as securities for the facilities obtained.

Facility SecurityTerm Loans Primary mortgage over machinery owned by the Ceylon Printers Group of Companies,

which are located at No.20, Sir Chittampalam A Gardiner Mawatha, Colombo 2; a building owned by M/s Paragon Ceylon PLC.

Corporate Guarantee of Office Equipment PLC.

Joint and Several Guarantees of Mr.M.R.Ratnasabapathy and Mr.L.C.G.Ratnanather

Deed of declaration regarding access rights to movables.


A N N U A L R E P O R T 2 0 1 6 45

Notes

A N N U A L R E P O R T 2 0 1 646

Notes

A N N U A L R E P O R T 2 0 1 6 47

Form of Proxy

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

of……....………………………………………………..............………………………….......…...........................................……………………..... being a member /members of Ceylon Printers 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. P. S. R. CASIE CHITTY……………………………………………….………...…………….WHOM FAILINGMR. M M MARZOOK …………………………………………….……………………………….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 59th Annual General Meeting of the Company to be held on 31st October 2016 at 10.00 a.m. and at any adjournment thereof .

For Against

1 To receive and adopt the Report of the Directors and the Statement of Accounts for the year ended 31st March 2016 and the Report of the Auditors thereon

2. To re-elect Mr. W. N. S. Canagaratna who retires at the Annual General Meeting, a Director. Mr. W. N. S. Canagaratna has attained the age of Eighty years and the Company has received special notice of intention in compliance with Law, relating to his re-election.

3. To re-elect Mr. L. C. G. Ratnanather who retires at the Annual General Meeting, a Director. Mr. L. C. G. Ratnanather has attained the age of Eighty one years and the Company has received special notice of intention in compliance with Law, relating to his re-election.

4 To re-elect Mr. J P S Ratnanather who retires at the Annual General Meeting, a Director. Mr. J P S Ratnanather has attained the age of Eighty Five years and the Company has received special notice of intension in compliance with Law, relating to his re-election

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

6. To re-elect Mr. M M Marzook who retires by rotation at the Annual General Meeting, a Director.

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

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

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

Dated this ………………………………. day of …………………………….. 2016

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

A N N U A L R E P O R T 2 0 1 648

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 28th October 2016.

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) overleaf 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.

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