engineering better sri lanka - cecbcecb.lk/about/pdf/english_opt.pdfbsc., dip. mgt., fca, chartered...

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ENGINEERINGBETTER SRI LANKA

As the acclaimed business icon for national engineering consultancy and construction excellence in Sri Lanka and Overseas, CECB spans 42 long years of solid engineering performances as a state owned, commercially successful self financing entity. Our engineering roots entrenched firmly in the massive multipurpose Mahaweli Development infrastructure project has since then been extended and grown to add engineering expertise to the development of diversified array of social and economic infrastructures in Sri Lanka and overseas.

Our integrated strengths and capabilities covers – Dams, Tunnels, Hydropower Engineering (Sri Lanka/Eastern Africa), Irrigation, Water Supply/Sanitation & Environmental Engineering, Highways, Bridges, Rail Roads, Airports, High-Rises, Buildings & Urban infrastructure, University Campuses, Laboratories, Health Care, Coastal & Marine, Defence infrastructure, Sri Lankan High Commissions overseas to name a few. Our range of expertise further covers environmental studies, natural resources management, socioeconomic aspects of resettlement, community development, ICT networks etc. Truly we are the one stop shop for all engineering design, consultancy and construction needs.

We have continuously met our national obligations towards the post conflict era changes and aspirations of our people. As we near our golden jubilee, our position is among the strongest in the industry. CECB with its trained multidisciplinary expertise and advanced engineering capabilities will redouble its efforts to face the future national challenges in protecting environment while creating attractive public and private infrastructures and utilities.

CONTENTS

Financial Highlights 03 Statement of Financial Position 20Board of Directors 04 Cash Floe Statements 21 Our Team 06 Statement of Changes in Equity 22 Corporate Information & Notes to the Financial Statements 23Accounting Policies 07 Auditor General’s Report 48 Financial Statements Performances of the Year 59Statement of Comprehensive Income 19 CESL 70

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CECB’s Vision

“To be a world Class Engineering Organization”

CECB’s Mission

To be a World Class Engineering Organization, acquiring excellence in Engineering, Architecture and Quantity Surveying, utilizing state of the art technology, with a highly motivated, trained and skilled workforce rewarded appropriately for their contribution use of resources for the maximum benefit to man- kind.

INSPIRED TO GO BEYOND

he CECB – Central Engineering Consultancy Bureau. The Foremost consultancy Organization in Sri

Lanka today: multi – disciplinary in func- tion, futuristic in approach and, above all, gifted with a team of inspired professionals yearning to go Forward.

That inspiration comes with a history – a history that has left indelible marks nu- merously on the face of this country from over two millennia ago: a history that flourished when the developed world of today was hardly awake.

Fortunately, those indelible marks – inge- nious engineering feats – of that distant time are still with us, not as some lifeless artifact, but as something that runs though our veins….. Feeding us…. And breathing very life to our souls. And that sprouts inspiration in the men and women we have chosen. At CECB, we give wings to such inspiration.

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CECB’s Vision


CECB’s Mission







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CECB’s Vision


CECB’s Mission







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CECB’s Vision


CECB’s Mission







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FINANCIAL HIGHLIGHTS

2012

Group

CECB

2011

CECB

Rs.Mn Rs.Mn Rs.Mn

Restated

Construction Revenue

11,543

11,543

7,640

Consultancy Revenue 1,508 1,508 909 Consolidated Revenue 13,051 13,051 8,550 Gross Profit 1,624 1,560 924 Net Profit Before tax 558 545 308 Net profit after tax 266 259 146 Total assets 16,805 14,179 12,129 Contributed Capital - 500 500 Total Equity 3,624 3,615 3,259 Total Equity Equilibrium 16,805 14,179 12,129 Current Assets 13,520 11,082 9,421 Current Liabilities 12,917 10,324 8,631

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BOARD OF DIRECTORS

Eng.Nihal Rupasinghe Eng.M.A.P. Hemachandra Mr. S.M.N.L.Senanayake Eng. S.S.Ediriweera

BSc. (Hons), PG Dip. (Hydro power) Norway, C. Eng., MIE (SL),MICE (London), Licd. Surveyor

Joined Faculty of Engineering, Uni- versity of Peradeni- ya as Instructor in 1980. Joined Central Engineering Consul- tancy Bureau in 1981. Appointed as Chief Resident Engineer in 1989 to 1996. Func- tioned as Project Manager, CECB 1997 to 1998. Appointed as Additional General Manager (Engineer- ing Procurement and Construction) to manage the Said Division. Appointed Chairman/CECB in 2005.

F.I.E.D.(SL), M.I.E.E., M.I.Prod. Functioned as the Chair- man B.C.C. Lanka Ltd., Chairman/ Managing Director in Colombo Sack Makers Ltd. and State Pharmaceuticals Manu- facturing Corporation of Sri Lanka. Appointed as the Working Director of the Central Engineering Consultancy Bureau in June 2010.

BSc., Dip. Mgt., FCA, Chartered Accountant. Joined Corporate Vision (Pvt) Ltd., as a Direc- tor in 1988 and joined Financial Consultants and Allied Services (Pvt) Ltd., as a Director in 1994. In 2008, joined Mahaweli Cultural Foundation Trust as a Director and in 2004 joined Central Engineer- ing Consultancy Bureau as Director. He is also a Director of State Phar- maceuticals Corporation and State Pharmaceu- ticals Manufacturing Corporation since 2010.

BSc., Eng MIE(SL), C. Eng. Appointed as Director, Ministry of Posts and Telecommunications from 1972 to 1991. Joined Sri Lanka Telecom Services Ltd., as General Manager and appointed as Member of the Board of Directors in 1992. Attached to Associat- ed News Papers of Ceylon Ltd., and functioned as Managing Director in 2000. He worked as Secretary in Ministry of Posts, Telecom- munication and Information Technology Development and as Secretary in Ministry of Tertiary Education and Training in 2001. In 2004, retired from Public Service. Appointed as an Engineer- ing Consultant of Media and Information and as a Board Member of Sri Lanka Rupa- vahini Corporation and a Board Member of Sri Lanka Broadcasting Corporation. Doubling as Advisor to the Board, ITN. In 2011 January he was appointed as Board of Director in CECB and as an Executive Director of CESL. He is a member of the production Engineers (London) and the Institu- tion of Electrical Engineers (London)

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BOARD OF DIRECTORS CONTINUED

Eng. Ranjith Pemasiri Dr. M.H.M.U.P. Herath Mr. Wasantha Ekanayake

BSc.Eng.(Hons), MIE(SL), MSc.(Construction Mgt.)

Joined Road Development Authority as Executive En- gineer/ Resident Engineer in 1981and in 1993 appointed as a Director Highway in Provin- cial Department of Highways and as a Project Director at Ministry of Home Affairs and Provincial Councils. Assumed duties as General Manager at Southern Provincial Road Development Authority in 1993. Worked as National Project Director at Ministry of Provincial Councils and Local Government since 2003. Presently working as General Manager, Road Development Authority. Appointed as Di- rector of Central Engineering Consultancy Bureau in year 2010.

MBBS (Col.) Medical Officer at Ragama Rehabilitation Hospital since 2010. Appointed as a Director of Central Engineering Consul- tancy Bureau in August 2010.

(B.A.(Hons.), Class 1 of the Sri Lanka Administrative Service. Director General, Department of Management Audit, Trea- sury Representative/ Member of the Board of Directors of Central Engineering Consul- tancy Bureau in 2010.

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CORPORATE INFORMATION AND ACCOUNTING POLICIES 1. CORPORATE INFORMATION

1.1 Domicile and Legal Form

Central Engineering Consultancy Bureau is a State Corporation established under the provisions of the State Industrial Corporations Act no. 49 of 1957 and domiciled in Sri Lanka. The Bureau’s registered office and the principal place of business are located at No.415, Bauddhaloka Mawatha, Colombo 07. The Consolidated Financial Statements of Central Engineering Consultancy Bureau as at and for the year ended 31st December 2012 comprises the Bureau and its subsidiaries (together referred to as the “Group”). The Financial Statements of all Companies in the Bureau have a common financial year which ends on December 31st.

1.2 Principal Activities and Nature of Operations Central Engineering Consultancy Bureau is primarily involved in the business of construction, consultancy and any engineering related activities. Central Engineering Service (Private) Limited (CESL) is a fully owned subsidiary of CECB engage in the business of undertaking and executing Design-Build, Turnkey and other types of construction work in the field of civil, electrical and mechanical engineering and all aspects connected therewith or ancillary or incidental thereto on its own or as a member of joint venture or a member of a consortium in Sri Lanka or elsewhere.

2 BASIS OF PREPARATION

2.1 Statement of Compliance The financial statements of the Bureau and the Group comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the cash flow statement, together with the accounting policies and notes to the financial statements. These financial statements have been prepared in accordance with Sri Lanka Accounting Standards (SLFRS and LKAS) as issued by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka). These Financial Statements for the year ended 31st December, 2012 are the first Financial Statements prepared and presented in accordance with Sri Lanka Accounting Standards immediately effective from 1st January, 2012. Financial Statements were prepared in accordance with Sri Lanka Accounting Standards (SLAS) effective up to 31st December, 2011 reconciled on convergence of the SLAS compliant Financial Statements to SLFRS/LKAS compliant Financial Statements are given in Note 32 to the Financial Statements. The Consolidated Financial Statements were authorized for issue by the Board of Directors in accordance with the resolution passed by the Board of Directors on 10th February 2014. Financial Statements of the subsidiary is prepared in compliance with the Accounting policies of the Bureau unless stated otherwise.

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3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.2 Foreign Currency Transactions All foreign exchange transactions are converted to functional currency, at the rates of exchange prevailing at the time the transactions are effected. Monetary assets and liabilities denominated in foreign currency are retranslated to functional currency equivalents at the spot exchange rate prevailing at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. The gain or loss arising on translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to the translation difference.

3.3 Financial assets and financial liabilities (a) Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they originated. All other financial assets are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

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

The Group has the following non-derivative financial assets: loans and receivables and available-for-sale financial assets.

(i) Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivable comprise cash and cash equivalents, investment in debenture and trade and other receivables, including related party receivables.

(ii) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call and fixed deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

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3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.3 Financial assets and financial liabilities (Continued)

(iii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for sale and that are not classified as any of the other financial assets. The Group’s investments in equity securities are classified as available-for sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, are recognised in other comprehensive income and presented within equity in the fair value reserve. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to profit or loss. However investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured therefore the equity instruments are measured at cost.

(b) Non-derivative financial liabilities The Group initially recognises debt securities issued on the date that they are originated. All other financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contracted obligations are discharged, cancelled or expired.

The Group classifies non-derivative financial liabilities in to the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost.

Other financial liabilities comprise: loans and borrowings, trade and other payables.

Ordinary Share Capital

Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity net of any tax effects.

3.4 Impairment

3.4.1 Non-derivative Financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

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3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.4 Impairment (Continued)

3.4.1 Financial assets (Continued)

The Group considers evidence of impairment for receivables at a specific asset level. All individually significant receivables are as assessed for specific impairment.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reserved through profit or loss. Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss. The cumulative loss that is removed from other comprehensive income and recognised in profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised in profit or loss. Changes in impairment provisions attributable to time value are reflected as a component of interest income.

3.4.2 Non-financial assets

The carrying amounts of the Group’s non-financial assets other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. For the purpose of impairment testing, assets are Grouped together into the smallest Group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Groups of assets (the “cash generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss.Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (Group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized.

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3.5 Property, Plant and Equipment

3.5.1 Recognition and Measurement Property, Plant and Equipment are stated at cost/revaluation less accumulated depreciation and accumulated impairment losses. The Group elected to apply the optional exemption of SLFRS 1 First Time adoption of Sri Lanka Accounting Standards (SLFRS) to use the fair value as deemed cost at the date of transition for certain items of property, plant and equipments.(Note 15). The cost of an item of property, plant and equipment comprise its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. The cost of self-constructed assets includes the cost of materials, direct labor, and any other costs directly attributable to bringing the asset to the working condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, they are accounted for separate items (major component) of property, plant and equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment

3.5.2 Leased Assets Leases in terms of which the Group assumes substantially all the risk and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured and capitalized at an amount equal to the lower of its fair value and the present value of minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. 3.5.3 Subsequent Costs The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day to day servicing of property, plant and equipment are recognized in profit or loss as incurred. 3.5.4 De-recognition

The carrying amount of an item of property, plant and equipment is de-recognized on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses on de-recognition are recognized within other income in profit or loss.

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3.5 Property, Plant and Equipment (Continued)

3.5.5 Depreciation Depreciation is recognized in profit or loss on the straight-line basis over the estimated useful lives of each part of item of Property, Plant and Equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Depreciation of an asset begins when it is available for use whereas depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposal Group that is classified as held for sale) and the date that the asset is derecognised. Depreciation is not charged on Freehold Land and Capital Work in Progress.

The estimated useful lives are as follows:

Asset Category Useful Lives

Freehold Building 13.33 yearsOffice Equipment and Furniture and Fittings 8 yearsConstruction Instruments and equipments 4-5 yearsMotor Vehicles 4 yearsPlant and Machinery 5 yearsContainers 5 yearsComputers 5 yearsLibrary Books 8 years

3.5.6 Capital Work in Progress Capital expenses incurred during the year which are not completed as at the reporting date are shown as Capital Work-in-Progress, whilst the capital assets which have been completed during the year and available to use have been transferred to Property, Plant and Equipment.

3.6 Inventories

Inventories are valued at lower of cost and net realizable value. Cost is determined on the weighted average cost basis and includes expenses incurred in acquiring the inventories and bringing them to their existing location and condition.

3.6.1 Work in Progress

Construction contracts in progress represent the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity. Construction contracts in progress is presented as part of trade and other receivables in the statement of financial position for all contracts in which costs incurred plus recognised profits exceed progress billings. If progress billings exceed costs incurred plus recognised profits, then the difference is presented as deferred income/revenue in the statement of financial position.

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3.7 Employee benefits

(a) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which contributions are made into a separate fund and the entity will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plan are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Defined Contribution Plans - Employees Provident Fund and Employees Trust Fund

All employees who are eligible for Employees Provident Fund contribution and Employees Trust Fund contribution are covered by relevant contribution funds in line with respective statutes and regulations. The Group contributes 12 % and 3% of gross emoluments of employees to Employees’ Provident Fund and Employees’ Trust Fund respectively

(b) Defined Benefit Plan - Gratuity The Bureau is liable to pay gratuity in terms of the Payment of Gratuity Act No: 12 of 1983, where the liability to an employee arises only on completion of five years of continued service. However, the provision is calculated based on half month’s salary of the last month of the financial year of service in conformity with the Sri Lanka Accounting Standard No: 16, ‘”Retiring Benefit Cost”.

3.8 Provisions

Provisions are recognised if, as a result of a past event the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions and liabilities are recognised in the balance sheet. Provisions are determined by discounting expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risk specific to the liability. Unwinding of discount is recognised as finance cost

3.9 Statement of Comprehensive Income

3.9.1 Revenue

(a) Construction Contracts Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue is recognised in profit or loss in proportion to the stage of completion of the contract. The stage of completion is assessed with reference to the proportion that contract cost incurred for work performed to date bear to the estimated total contract costs. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable.

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3.9 Statement of Comprehensive Income (Continued) 3.9.1 Revenue (Continued)

(b) Consultancy Services The Group generates revenues from consultancy service related to construction work. Revenue from consultancy services is recognised in profit or loss in proportion to the stage of the transaction at the reporting date. The stage of completion is assessed with reference to survey of work performed.

3.9.2 Interest Income

For all financial instruments measured at amortised cost and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in the income statement.

3.9.2 Dividend Income

Dividend income is accounted when the shareholders’ right to receive payment is established.

3.9.3 Other Income

Profits or losses from disposal of property, plant and equipments recognized having deducted from proceeds on disposal, the carrying value of the assets and the related expenses.

Foreign currency gains and losses are reported on a net basis.

3.9.4 Expenditure Recognition (a) Construction and consultancy Cost

Contract expenses are recognised as incurred unless they create an asset related to future contract activity. Expected losses are recognized as an expense when it is probable that the total cost pertaining to construction contracts will exceed its revenue. Other Expenses 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 revenue in arriving at the profit for the year.

3.9.5 Taxation

(a) Current Taxes Current Income tax liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the Commissioner General of Inland Revenue. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. The provision for income tax is based on the elements of income and expenditures reported in the Financial Statements and computed with in accordance with the provisions of the Inland Revenue Act. The relevant details are disclosed in the respective notes to the Financial Statements.

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3.9 Statement of Comprehensive Income (Continued)

3.9.5 Taxation (Continued)

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

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

Temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and

Taxable temporary differences arising on the initial recognition of goodwill. 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.

4 EVENTS OCCURRING AFTER THE REPORTING PERIOD

Events after the reporting period are those events favourable and unfavourable that occurs between the end of the reporting period and the date when the Financial Statements are authorized for issue. The materiality of the events occurring after the reporting period is considered and appropriate adjustments to or disclosures are made in the Financial Statements, where necessary.

5 NEW ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE AS AT THE REPORTING DATE

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2014, and have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early.

(i) SLFRS 10 Consolidated Financial Statements, SLFRS 11 Joint Arrangements, SLFRS 12 Disclosure of Interests in Other Entities

SLFRS 10 introduces a single control model to determine whether an investee should be consolidated. As a result, the Group may need to change its consolidation conclusion in respect of its investees, which may lead to changes in the current accounting for these investees.

Under SLFRS 11, the structure of the joint arrangement, although still an important consideration, is no longer the main factor in determining the type of joint arrangement and therefore the subsequent accounting. SLFRS 12 brings together into a single standard all the disclosure requirements about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Group is currently assessing the disclosure requirements for interests in subsidiaries, interests in joint arrangements and associates and unconsolidated structured entities in comparison with the existing disclosures. SLFRS 12 requires the disclosure of information about the nature, risks and financial effects of these interests.

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6 NEW ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE AS AT THE REPORTING DATE (CONTINUED)

(iii) SLFRS 13 Fair Value Measurement

SLFRS 13 provides a single source of guidance on how fair value is measured, and replaces the fair value measurement guidance that is currently dispersed throughout SLFRS. Subject to limited exceptions, SLFRS 13 is applied when fair value measurements or disclosures are required or permitted by other SLFRSs. The Group is currently reviewing its methodologies in determining fair values.

7 First Time Adoption of SLFRSs/LKAS These Financial Statements, for the year ended 31 December 2012, are the first financial statement of the Group has prepared in accordance with SLFRS/LKAS. For periods up to and including the year ended 31 December 2011, the Group prepared its financial statements in accordance with Sri Lanka Accounting Standards (SLASs) which were effective up to 31st December 2011. Group has prepared its Financial Statements which comply with SLFRSs applicable for periods ending on or after 31 December 2012 and prior periods, together with the comparative period’s data as at and for the years ended 31 December 2011, as described in the accounting policies.

In preparing these financial statements, the Group’s opening Statement of Financial Position was prepared as at 1 January 2011, the Group’s date of transition to SLFRS. Note 42 explains the principal adjustments made by the Group in restating its SLAS statement of financial position as at 1 January 2011 and its previously published SLAS financial statements as at and for the year ended 31 December 2011. The effect of Group’s transition to SLFRSs described in Note 28 is summarized in this note as follows: Transition elections; Reconciliation of equity and comprehensive income as previously reported under previous SLAS and SLFRSs.

8 Transition Elections SLFRS 1 – First-time Adoption of Sri Lanka Financial Reporting Standards allows first-time adopters certain exemptions from the retrospective application of certain SLFRSs.

Accordingly the Group has applied the following transition exceptions and exemptions to full retrospective application of SLFRSs. (a) Fair value or revaluation as deemed cost

Deemed Cost of Property, Plant and Equipment certain items of property, plant and equipment have been measured at fair value at the date of transition to SLFRSs which were carried in the statement of financial position prepared in accordance with previous SLAS on the basis of acquisition cost. The Group has elected to regard those values as deemed cost at the date of the revaluation since they were broadly comparable to fair value.

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STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31ST DECEMBER

2012 2011 2012 2011Rs. Rs. Rs. Rs.

Note

Revenue 9 13,051,404,569 8,550,176,848 13,051,404,569 8,550,176,848

Cost of Sales 10 (11,427,073,880) (7,592,905,377) (11,491,305,532) (7,626,512,721)

Gross Profit 1,624,330,689 957,271,471 1,560,099,037 923,664,127

Other Income 11 257,331,766 291,500,170 241,051,176 289,825,801

Administration Expenses (1,183,162,649) (951,787,024) (1,118,904,881) (921,391,793)

Selling and Distribution Expenses (316,855,524) (84,396,410) (316,855,524) (84,396,410)

Results from Operating Activities 381,644,282 212,588,207 365,389,808 207,701,724

Finance Income 201,368,165 114,975,754 199,625,758 114,939,272

Finance Cost (24,343,420) (15,444,710) (20,123,026) (14,609,857) -

Net Finance Income 12 177,024,745 99,531,044 179,502,732 100,329,415

Profit Before Income Tax 558,669,027 312,119,251 544,892,540 308,031,139

Income Tax Expense 14 (291,677,345) (164,074,708) (285,794,064) (161,905,298) -

Profit/(Loss) for the Year 266,991,682 148,044,543 259,098,476 146,125,841

Other Comprehensive Income

- - - -

Other Comprehensive Income for the Year - - - -

Total Comprehensive Income for the Year 266,991,682 148,044,543 259,098,476 146,125,841

Figures in brackets indicates deductions.

The Notes to the Financial Statements set out on pages 5 to 40 form an integral part of these Financial Statements.

GROUP CECB

CENTRAL ENGINEERING CONSULTANCY BUREAU

1

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AS AT 31ST DECEMBER

2012 2011 2010 2012 2011 2010Rs. Rs. Rs. Rs. Rs. Rs.

Assets NoteNon-Current Assets

Property, Plant and Equipment 15 3,217,787,244 2,664,214,277 2,361,824,781 3,029,322,086 2,643,168,837 2,361,824,781 Investments 16 68,114,301 64,456,627 69,796,710 68,114,321 64,456,647 69,796,710

Total Non-Current Assets 3,285,901,545 2,728,670,904 2,431,621,491 3,097,436,407 2,707,625,484 2,431,621,491

Current AssetsInventories 17 667,283,290 278,209,888 230,776,561 473,612,890 277,233,388 230,776,561 Trade and Other Receivables 18 10,744,968,138 9,277,200,225 2,549,702,106 8,571,483,325 6,908,203,554 2,549,702,106 Short term Investments 16 1,572,852,406 1,707,593,967 1,491,086,629 1,572,852,406 1,707,593,967 1,491,086,629 Cash and Cash Equivalents 20 534,761,471 615,208,770 327,792,660 464,311,326 528,777,653 327,792,660

Total Current Assets 13,519,865,305 11,878,212,850 4,599,357,956 11,082,259,947 9,421,808,562 4,599,357,956 Total Assets 16,805,766,850 14,606,883,754 7,030,979,447 14,179,696,354 12,129,434,046 7,030,979,447

Equity and Liabilities - Contributed Capital 500,000 500,000 500,000 500,000 500,000 500,000 Capital Reserve 3,027,999 12,697,551 12,697,551 3,027,999 12,697,551 12,697,551 Retained Earnning 3,621,103,055 3,247,819,226 3,081,060,339 3,611,291,147 3,245,900,524 3,081,060,339

Total Equity 3,624,631,054 3,261,016,777 3,094,257,890 3,614,819,146 3,259,098,075 3,094,257,890

Non-Current LiabilitiesLease Creditors 21 35,565,671 49,724,339 3,348,385 11,624,193 36,288,826 3,348,385 Retirement Benefit Obligation 22 228,787,990 203,004,443 172,616,158 228,787,990 203,004,443 172,616,158 Differed Tax 23 76,388 61,355 - - - -

Total Non-Current Liabilities 264,430,049 252,790,137 175,964,543 240,412,183 239,293,269 175,964,543

Current LiabilitiesTrade and Other Payables 24 12,331,787,072 10,584,051,848 3,367,666,505 10,022,553,967 8,123,827,340 3,367,666,505 Income Tax Payables 25 382,092,902 452,561,417 386,442,259 374,116,600 450,453,362 386,442,259 Lease Creditors 21 36,544,774 7,107,672 - 18,740,207 - - Inter Base current accounts 6,701,059 - (153,711) 6,701,059 - (153,711) Inter company current accounts 159,579,941 - - (97,646,808) 7,406,097 - Bank Overdraft 20 - 49,355,903 6,801,961 - 49,355,903 6,801,961

Total Current Liabilities 12,916,705,748 11,093,076,840 3,760,757,014 10,324,465,025 8,631,042,702 3,760,757,014 Total Liabilities 13,181,135,796 11,345,866,977 3,936,721,557 10,564,877,208 8,870,335,971 3,936,721,557 Total Equity and Liabilities 16,805,766,850 14,606,883,754 7,030,979,447 14,179,696,354 12,129,434,046 7,030,979,447 - - - - - - -

U.N.B.Mawathagama Finance Manager

Approved and signed for and on behalf of the Board ;

Eng. N.Rupasinghe Eng. S.S.EdiriweeraCHAIRMAN DIRECTOR

04th November 2014Colombo

It is certified that the Financial Statements have been prepared in compliance with geneally accepted accounting policies.

The Board of Directors is responsible for the preparation and presentation of these Financial Statements.

CENTRAL ENGINEERING CONSULTANCY BUREAUSTATEMENT OF FINANCIAL POSITION

The Notes to the Financial Statements set out on pages 5 to 40 form an integral part of these Financial Statements. Figures in brackets indicates deductions.

GROUP CECB

2

Page | 20

FOR THE YEAR ENDED 31ST DECEMBER 2012 2011 2012 2011Rs. Rs. Rs. Rs.

Cash Flows from Operating Activities

Profit Before Tax 558,669,027 312,119,251 544,892,540 308,031,139

Adjustments for:

Depreciation on Property, Plant and Equipments 270,948,236 162,369,658 215,955,094 155,787,195

Provision / reversal of Bad and Doubtful Debts 253,228,799 84,357,975 253,228,799 84,357,975

Provision for Gratuity 54,909,537 50,277,065 54,909,537 50,277,065

Net Finance Income (177,024,745) (99,531,044) (179,502,732) (100,329,415)

Previous Period Adjustments 96,622,595 18,714,344 96,622,595 18,714,344

(Profit) / Loss on disposal of Property, Plant and Equipments 15,299,893 44,895,184 15,299,894 44,895,183

Exchange Loss on fixed deposits 263,795 - 263,795 -

Operating Profit before Working Capital Changes 1,072,917,137 573,202,433 1,001,669,521 561,733,486

(Increase)/Decrease in Inventories (389,073,402) (47,433,327) (196,379,502) (46,456,827)

(Increase)/Decrease in Trade and Other Receivables (1,720,996,712) (6,811,856,094) (1,916,508,570) (4,442,859,423)

Increase/(Decrease) in Trade and Other Payables 1,747,735,224 7,216,385,343 1,898,726,627 4,756,160,835

Increase/(Decrease) in Amounts Due to Related Companies 159,579,941 - (105,052,905) 7,406,097

Increase in Inter Base current accounts 6,701,059 153,711 6,701,059 153,711

Cash Generated from Operating Acitivities 876,863,247 930,452,066 689,156,230 836,137,880

Interest paid (24,343,420) (15,444,710) (20,123,026) (14,609,857)

Tax paid (362,130,829) (97,894,194) (362,130,825) (97,894,195)

Gratuity paid (29,125,990) (19,888,780) (29,125,990) (19,888,780)

Net Cash Flows from Operating Activities 461,263,008 797,224,382 277,776,389 703,745,048

Cash Flows from Investing Activities

Investment in Property Plant and Equipment (671,479,463) (306,520,505) (481,810,606) (301,660,460)

Investment in Capital Work in Progress (137,493,498) (144,685,278) (137,493,498) (144,685,278)

Investment / Disposal of Long Term Deposit (3,657,674) 5,340,083 (3,657,674) 5,340,063

Investment / Disposal of Short Term Deposit 134,477,766 (216,507,338) 134,477,766 (216,507,338)

Interest Income 201,368,165 114,975,754 199,625,758 114,939,272

Net Cash Flows from Investing Activities (476,784,705) (547,397,284) (288,858,254) (542,573,742)

Cash Flows from Financing Activities

Payment of Finance Lease Liabilities (15,569,700) (4,964,929) (4,028,559) (2,740,255)

Net Cash from Financing Activities (15,569,700) (4,964,929) (4,028,559) (2,740,255)

Net Increase/(Decrease) in Cash and Cash Equivalents (31,091,396) 244,862,168 (15,110,424) 158,431,051

Cash and Cash Equivalent at the beginning 565,852,867 320,990,699 479,421,750 320,990,699

Cash and Cash Equivalent at the end (Note 20) 534,761,471 565,852,867 464,311,326 479,421,750

Figures in brackets indicates deductions.


GROUP CECB

CENTRAL ENGINEERING CONSULTANCY BUREAUCASH FLOW STATEMENT

3

Page | 21


Contributed Capital

Capital Reserve

Retained Earnings Total

Rs. Rs. Rs. Rs.

Balance as at 01st January 2011 500,000 12,697,551 3,081,060,339 3,094,257,890 Net Profiit For the Year - - 146,125,841 146,125,841 Prior Period Adjustments - - 18,714,344 18,714,344

Balance as at 31st December 2011 500,000 12,697,551 3,245,900,524 3,259,098,075

Net Profiit For the Year - - 259,098,476 259,098,476 Prior Period Adjustments - - 96,622,595 96,622,595 Trasfers of Capital Reserves (9,669,552) 9,669,552 -


Contributed Capital

Capital Reserve

Retained Earnings Total

Rs. Rs. Rs. Rs.

Balance as at 01st January 2011 500,000 12,697,551 3,081,060,339 3,094,257,890 Net Profiit For the Year - - 148,044,543 148,044,543 Prior Period Adjustments - - 18,714,344 18,714,344


Net Profiit For the Year - - 266,991,682 266,991,682 Prior Period Adjustments - - 96,622,595 96,622,595 Trasfers of Capital Reserves (9,669,552) 9,669,552 -

500,000 3,027,999 3,621,103,055 3,624,631,054



GROUP

CECB

CENTRAL ENGINEERING CONSULTANCY BUREAUSTATEMENT OF CHANGES IN EQUITY

4

Page | 22


2012 2011 2012 2011Rs. Rs. Rs. Rs.

9 RevenueConstruction Revenue 11,542,700,246 7,640,245,757 11,542,700,246 7,640,245,757 Consultancy Revenue 1,508,704,323 909,931,091 1,508,704,323 909,931,091

13,051,404,569 8,550,176,848 13,051,404,569 8,550,176,848

10 Cost of salesConstruction Cost 10,390,504,534 6,914,874,922 10,454,736,186 6,948,482,266 Consultancy Cost 1,036,569,346 678,030,455 1,036,569,346 678,030,455

11,427,073,880 7,592,905,377 11,491,305,532 7,626,512,721

11 Other IncomeMiscellaneous Revenue 101,860,400 108,687,749 89,669,539 107,013,380 Hiring Income 4,258,960 69,147,581 4,258,960 69,147,581 Reimbursable costs 107,819,931 97,889,584 103,730,202 97,889,584 Sundry Income 43,656,270 15,775,256 43,656,270 15,775,256 Exchange loss on fixed deposits (263,795) - (263,795) -

257,331,766 291,500,170 241,051,176 289,825,801

12 Net Finance Income

Finance IncomeInterest Income 201,368,165 114,975,754 199,625,758 114,939,272

201,368,165 114,975,754 199,625,758 114,939,272 Finance Cost Interest Expenses (24,343,420) (15,444,710) (20,123,026) (14,609,857)

(24,343,420) (15,444,710) (20,123,026) (14,609,857)

Net Finance Income 177,024,745 99,531,044 179,502,732 100,329,415

13 Staff Cost

Salaries & Allowance 551,389,054 339,597,126 549,977,054 338,476,404 EPF 66,039,607 40,617,180 65,997,247 40,617,180 ETF 16,668,752 10,154,295 16,499,312 10,154,295 Incentives & Other Allowances 124,196,766 154,284,339 124,196,766 154,284,339 Bonus 16,083,223 11,703,224 16,083,223 11,703,224 Sick leave encashment 26,633,690 17,672,674 20,030,914 17,338,248

801,011,092 574,028,838 792,784,516 572,573,690

CENTRAL ENGINEERING CONSULTANCY BUREAUNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

GROUP CECB

17

Page | 23



2012 2011 2012 2011Rs. Rs. Rs. Rs.

14 Income Tax14.1 Current Tax Expense (Note 14.2) 259,871,110 138,242,418 254,002,864 136,134,363

Deferred Tax Provision 15,033 61,355 Adjustment for Prior Years 31,791,200 25,770,935 31,791,200 25,770,935

291,677,343 164,074,708 285,794,064 161,905,298

14.2 Reconciliation of Accounting Profit to Taxable ProfitAccounting Profit before Income Tax Expense 558,669,027 308,031,139 544,892,540 308,031,139 Aggregate Disallowed Items 478,211,906 153,947,576 435,290,369 153,947,576 Aggregate Allowable Items 197,493,732 139,535,084 172,961,541 293,682,799

Total Statutory Income 679,772,285 441,390,009 654,330,215 441,390,009 Exempted Income - Taxable Income 679,772,285 441,390,009 654,330,215 441,390,009

Tax on Construction Income @ 12% 47,719,522 35,646,655 46,989,034 35,113,840 Tax on Other Income @ 28% 78,709,138 27,217,255 73,571,380 25,642,015 Dividend Tax 133,442,450 75,378,508 133,442,450 75,378,508 Current Income Tax Expenses 259,871,110 138,242,418 254,002,864 136,134,363

GROUP CECB

18

Page | 24

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20

Page | 26

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Tota

l

20



2012 2011 2010 2012 2011 2010Rs. Rs. Rs. Rs. Rs. Rs.

15 Property, Plant and Equipment

15.3

16 InvestmentsLong term investment (Note 16.1) 68,114,301 64,456,627 69,796,710 68,114,321 64,456,647 69,796,710 Short term investment (Note 16.2) 1,572,852,406 1,707,593,967 1,491,086,629 1,572,852,406 1,707,593,967 1,491,086,629

1,640,966,707 1,772,050,594 1,560,883,339 1,640,966,727 1,772,050,614 1,560,883,339

16.1 Long term investmentLoans and receivable financial assets

Investment in Fixed Deposit 66,114,301 62,456,627 67,796,710 66,114,301 62,456,627 67,796,710 Available for sale financial assets

Mark Marine Services (Pvt) Ltd 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 68,114,301 64,456,627 69,796,710 68,114,301 64,456,627 69,796,710

Investment in subsidiary (Unquoted)Central Engineering Services (Private) Limited - - - 20 20 -

- - - 20 20 - 68,114,301 64,456,627 69,796,710 68,114,321 64,456,647 69,796,710

16.2 Short term investmentRepo - - - - - - Short term investments 1,572,852,406 1,707,593,967 1,491,086,629 1,572,852,406 1,707,593,967 1,491,086,629

1,572,852,406 1,707,593,967 1,491,086,629 1,572,852,406 1,707,593,967 1,491,086,629

17 InventoriesInventories 94,197,005 - - - - - Work in Progress (Note 17.1) 573,086,285 278,209,888 230,776,561 473,612,890 277,233,388 230,776,561

667,283,290 278,209,888 230,776,561 473,612,890 277,233,388 230,776,561

17.1 Work in Progress represent the Construction contracts in progress as at the balance sheet date, which include all material at site

18 Trade and Other ReceivablesTrade Receivables (Note 18.1) 9,436,707,824 7,630,245,860 2,388,663,371 7,354,474,092 5,336,788,535 2,388,663,371 Other Receivables (Note 18.2) 98,103,575 66,978,346 72,577,907 93,019,352 66,031,571 72,577,907 Deposits, Prepayments and Advances (Note 18.3)1,210,156,739 1,579,976,019 88,460,828 1,123,989,881 1,505,383,448 88,460,828

10,744,968,138 9,277,200,225 2,549,702,106 8,571,483,325 6,908,203,554 2,549,702,106

18.1 Trade ReceivablesDebtors 6,465,036,910 5,718,366,340 1,784,231,927 5,147,088,090 3,963,965,025 1,784,231,927 Due from customers 2,032,777,542 1,445,184,876 381,780,583 1,357,100,354 906,128,867 381,780,583 Retention receivables 1,524,454,179 913,569,758 604,029,564 1,435,846,455 913,569,757 604,029,564 - - - Less - Provision for Impairment (Note 18.1.1)(585,560,807) (446,875,114) (381,378,703) (585,560,807) (446,875,114) (381,378,703)

9,436,707,824 7,630,245,860 2,388,663,371 7,354,474,092 5,336,788,535 2,388,663,371

18.1.1 Provision for ImpairmentDebtors 585,560,807 446,875,114 381,378,703 585,560,807 446,875,114 381,378,703

585,560,807 446,875,114 381,378,703 585,560,807 446,875,114 381,378,703

18.1.1 Provision for ImpairmentBalance at the beginning 446,875,114 381,378,703 313,601,119 446,875,114 381,378,703 313,601,119 Impairment loss recognised 287,756,144 84,396,410 90,763,691 287,756,144 84,396,410 90,763,691 Amounts written off against debtor (114,543,106) (18,861,564) - (114,543,106) (18,861,564) - Reversal of provision (34,527,346) (38,435) (22,986,107) (34,527,346) (38,435) (22,986,107) Balance at the end 585,560,807 446,875,114 381,378,703 585,560,807 446,875,114 381,378,703

18.2 Other Receivables Staff Loans 46,866,413 46,108,431 17,055,878 46,366,413 46,108,431 17,055,878 Prepaid Staff Cost 6,560,208 4,916,157 4,054,549 6,560,208 4,916,157 4,054,549 General Suspense (320,414) 1,774,849 6,002,695 - 1,774,849 6,002,695 Sundry Debtors 42,241,359 14,099,779 45,464,785 37,943,045 13,232,134 45,464,785 WHT Receivable 2,756,009 79,130 - 2,149,686 - -

98,103,575 66,978,346 72,577,907 93,019,352 66,031,571 72,577,907

As per the exemption given in SLFRS 1, the Group measured items of property, plant, and equipment at the date of transition to SLFRS at its fair value andused the fair value as its deemed cost at that date. For this purpose, the Land, Building and Motor vehicle of the Company had been revalued at Rs2,213,974,614./- by Shiral I De Silva D.I.V. and D.I.A (Sri Lanka), an independent professional valuer for the assets held as at 31st December 2010. Thesurplus arising from the revaluation amounting to Rs.1,960,817,886/- was transferred to retained earnings. The valuation has been conducted on the basisof estimated market value as at 31st December 2010. However the other assets was taken to books at the written down value as at 31st December 2010 asdeem cost.

GROUP CECB

21

Page | 27

Page | 28

CEN

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asa

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13.

23

Page | 29

CEN

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2012

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2012

2011

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Rs.

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Inve

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2012

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Rs.

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Le

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72,1

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CEC

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s at 3

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Non

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finan

cial

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A

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Leas

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227

Fina

ncia

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man

agem

ent (

cont

inue

d)

27M

arke

t risk

27In

tere

st r

ate

risk

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Fixe

d ra

te in

stru

men

tsFi

nanc

ial A

sset

s - L

ong

term

fixe

d de

posit

66,1

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fixe

d de

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1,57

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491,

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1,

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apita

l man

agem

ent

01) t

o sa

fegu

arde

d th

e G

roup

abi

lity

to c

ontin

ue a

s a g

oing

con

cern

, so

that

it c

an c

ontin

ue to

pro

vide

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rns f

or sh

areh

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nd b

enef

its fo

r oth

er st

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rs

02) t

o pr

ovid

e an

ade

quat

e re

turn

to sh

areh

olde

rs b

y pr

icin

g pr

oduc

ts co

mm

ensu

rate

ly w

ith th

e le

vel o

f risk

; and

The

Gro

up’s

net

deb

t to

adju

sted

equi

ty ra

tio a

t the

repo

rting

dat

e w

as a

s fol

low

s.

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Tota

l lia

bilit

ies

13,1

81,1

35,7

96

11,3

45,8

66,9

77

3,93

6,72

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Le

ss: c

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)

(464

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)

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t Dec

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49

3.29

1.

17

2.

79

3

1.

17

Cre

dit r

isk (c

ontin

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The

Gro

up's

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sure

tocr

edit

risk

isin

fluen

ced

mai

nly

byth

ein

divi

dual

char

acte

ristic

sofe

ach

custo

mer

.How

ever

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agem

enta

lsoco

nsid

erst

hede

mog

raph

icso

fthe

Gro

up’s

custo

mer

base

,ast

hese

fact

orsm

ayha

ve a

n in

fluen

ce o

n cr

edit

risk.

Dur

ing

2012

the

maj

ority

of t

he G

roup

’s re

venu

e w

as a

ttrib

utab

le to

sale

s tra

nsac

tions

with

Uva

, Ce

ntra

l and

Nor

th C

entra

l pro

vinc

ial g

eogr

aphi

cal r

egio

ns .

The

Gro

up h

eld

cash

and

cas

h eq

uiva

lent

s of R

s. 53

4,76

1,47

1 at

31s

t Dec

embe

r 201

2 (2

011:

Rs.

565,

852,

867)

, whi

ch re

pres

ents

its m

axim

um c

redi

t exp

osur

e on

thes

e as

sets.

The

cas

h an

d ca

sh e

quiv

alen

ts ar

e he

ld

with

ban

k an

d fin

anci

al in

stitu

tion

coun

terp

artie

s.

GR

OU

P

CEC

B

GR

OU

PC

ECB

Impa

irm

ent l

osse

sTh

e ag

ing

of tr

ade

debt

ors a

t the

repo

rting

dat

e th

at w

ere

not i

mpa

ired

was

as f

ollo

ws.

Cre

dit r

isk (c

ontin

ued)

The

note

pres

ents

info

rmat

ion

abou

tthe

Gro

up's

expo

sure

toea

chof

the

abov

eris

ks,t

heG

roup

'sris

km

anag

emen

tobj

ectiv

es,p

olic

iesa

ndpr

oces

sesf

orm

easu

ring

and

man

agin

gris

k,an

dth

eG

roup

'sm

anag

emen

tof

capi

tal.

The

Boar

dof

Dire

ctor

sha

sov

eral

lre

spon

sibili

tyfo

rth

ees

tabl

ishm

enta

ndov

ersig

htof

the

Gro

up’s

risk

man

agem

ent

fram

ewor

k.Th

eBo

ard

has

esta

blish

edth

eA

udit

and

Man

agem

entC

omm

ittee

,whi

chis

resp

onsib

le fo

r dev

elop

ing

and

mon

itorin

g th

e G

roup

’s ri

sk m

anag

emen

t pol

icie

s. Th

e co

mm

ittee

repo

rts re

gula

rly to

the

Boar

d of

Dire

ctor

s on

its a

ctiv

ities

.

The

Gro

up’s

risk

man

agem

entp

olic

iesa

rees

tabl

ished

toid

entif

yan

dan

alys

eth

eris

ksfa

ced

byth

eG

roup

,to

seta

ppro

pria

teris

klim

itsan

dco

ntro

ls,an

dto

mon

itorr

isksa

ndad

here

nce

tolim

its.R

iskm

anag

emen

tpo

licie

sand

syste

msa

rere

view

edre

gula

rlyto

refle

ctch

ange

sin

mar

ketc

ondi

tions

and

the

Gro

up’s

activ

ities

.The

Gro

up,t

hrou

ghits

train

ing

and

man

agem

ents

tand

ards

and

proc

edur

es,a

imst

ode

velo

pa

disc

iplin

edan

d co

nstru

ctiv

e co

ntro

l env

ironm

ent i

n w

hich

all

empl

oyee

s und

ersta

nd th

eir r

oles

and

obl

igat

ions

.

The

Aud

itan

dM

anag

emen

tCom

mitt

eeov

erse

esho

wm

anag

emen

tmon

itors

com

plia

nce

with

the

Gro

up’s

risk

man

agem

entp

olic

iesa

ndpr

oced

ures

,and

revi

ewst

head

equa

cyof

the

risk

man

agem

entf

ram

ewor

kin

rela

tion

toth

eris

ksfa

ced

byth

eG

roup

.The

Aud

itan

dM

anag

emen

tCom

mitt

eeis

assis

ted

inits

over

sight

role

byIn

tern

alA

udit.

Inte

rnal

Aud

itun

derta

kes

both

regu

lar

and

adho

cre

view

sofr

iskm

anag

emen

tco

ntro

ls an

d pr

oced

ures

, the

resu

lts o

f whi

ch a

re re

porte

d to

the

Aud

it an

d M

anag

emen

t Com

mitt

ee.

Cred

itris

kis

the

risk

offin

anci

allo

ssto

the

Gro

upif

acu

stom

eror

coun

terp

arty

toa

finan

cial

instr

umen

tfai

lsto

mee

tits

cont

ract

ualo

blig

atio

ns,a

ndar

isesp

rinci

pally

from

the

Gro

up’s

rece

ivab

lesf

rom

custo

mer

san

d in

vestm

ent s

ecur

ities

.

Cre

dit r

isk

Liqu

idity

risk

is th

e ris

k th

at th

e G

roup

will

enc

ount

er d

iffic

ulty

in m

eetin

g th

e ob

ligat

ions

ass

ocia

ted

with

its f

inan

cial

liab

ilitie

s tha

t are

settl

ed b

y de

liver

ing

cash

or a

noth

er fi

nanc

ial a

sset

. The

Gro

up’s

app

roac

h to

The

follo

win

g ar

e th

e co

ntra

ctua

l mat

uriti

es o

f fin

anci

al li

abili

ties,

incl

udin

g es

timat

ed in

tere

st pa

ymen

ts an

d ex

clud

ing

the

impa

ct o

f net

ting

agre

emen

ts.

Expo

sure

to c

redi

t risk

00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

03-

04 Y

ears

M

ore

than

4

year

s

CEC

B

Cre

dit r

isk (c

ontin

ued)

The

carr

ying

am

ount

of f

inan

cial

ass

ets r

epre

sent

s the

max

imum

cre

dit e

xpos

ure.

The

max

imum

exp

osur

e to

cre

dit r

isk a

t the

repo

rting

dat

e w

as a

s fol

low

s

The

max

imum

exp

osur

e to

cre

dit r

isk fo

r loa

ns a

nd re

ceiv

able

s at r

epor

ting

date

by

geog

raph

ic re

gion

was

: 00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

Car

ryin

g am

ount

Con

trac

tual

cas

h flo

ws

Mar

ket r

isk is

the

risk

that

cha

nges

in m

arke

t pric

es, s

uch

as in

tere

st ra

tes a

nd e

quity

pric

es w

ill a

ffect

the

Gro

up’s

inco

me

or th

e va

lue

of it

s hol

ding

s of f

inan

cial

instr

umen

ts. T

he o

bjec

tive

of m

arke

t risk

m

anag

emen

t is t

o m

anag

e an

d co

ntro

l mar

ket r

isk e

xpos

ures

with

in a

ccep

tabl

e pa

ram

eter

s, w

hile

opt

imisi

ng th

e re

turn

.

GR

OU

P

Furth

er, t

he B

oard

seek

s to

mai

ntai

n a

bala

nce

betw

een

high

er ta

rget

ed re

turn

s tha

t mig

ht b

e po

ssib

le w

ith h

ighe

r lev

el o

f bor

row

ing,

and

the

adva

ntag

es a

nd se

curit

y af

ford

ed b

y th

e str

ong

capi

tal p

ositi

on o

f the

gr

oup.

Gro

upC

ompa

ny

At t

he re

porti

ng d

ate

the

inte

rest

rate

pro

file

of th

e gr

oup's

inte

rest

- bea

ring

finan

cial

instr

umen

ts w

as:

Gro

upC

ompa

ny

The

Boar

d’s p

olic

y is

to m

aint

ain

a str

ong

capi

tal b

ase

so a

s to

mai

ntai

n in

vesto

r, cr

edito

r and

mar

ket c

onfid

ence

and

to su

stain

futu

re d

evel

opm

ent o

f the

bus

ines

s. Ca

pita

l con

sists

of o

rdin

ary

shar

es, r

etai

ned

earn

ings

and

non

-con

trolli

ng in

tere

sts o

f the

Gro

up. T

he B

oard

of D

irect

ors m

onito

rs th

e re

turn

on

capi

tal a

s wel

l as t

he le

vel o

f div

iden

ds to

ord

inar

y sh

areh

olde

rs.

The

Gro

up's

mai

n ob

ject

ive

is w

hen

man

agin

g ca

pita

l are

:

03-

04 Y

ears

M

ore

than

4 y

ears

The

gros

s inf

low

s/(ou

tflow

s) d

isclo

sed

in th

e pr

evio

us ta

ble

repr

esen

t the

con

tract

ual u

ndisc

ount

ed c

ash

flow

s rel

atin

g to

fina

ncia

l lia

bilit

ies h

eld

for r

isk m

anag

emen

t pur

pose

s and

whi

ch a

re u

sual

ly n

ot c

lose

d ou

t pr

ior t

o co

ntra

ctua

l mat

urity

.

Carr

ying

am

ount

Cont

ract

ual c

ash

flow

s

24

Page | 30

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

2

27Fi

nanc

ial r

isk m

anag

emen

tov

ervi

ewTh

e gr

oup

has e

xpos

ure

to th

e fo

llow

ing

risk

arisi

ng fr

om fi

nanc

ial i

nstru

men

tsCr

edit

risk

Liqu

idity

risk

Mar

ket r

isk

Risk

man

agem

ent F

ram

ewor

k

27 CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)FO

R T

HE

YEA

R E

ND

ED 3

1ST

DEC

EMB

ER 2

012

27Fi

nanc

ial r

isk m

anag

emen

t (co

ntin

ued)

27

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Inve

stmen

t in

Fixe

d D

epos

it (L

ong

term

)66

,114

,301

62

,456

,627

67

,796

,710

66

,114

,301

62

,456

,627

67

,796

,710

Inve

stmen

t in

Fixe

d D

epos

it (S

hort

term

)1,

572,

852,

406

1,70

7,59

3,96

7

1,49

1,08

6,62

9

1,57

2,85

2,40

6

1,70

7,59

3,96

7

1,49

1,08

6,62

9

In

vestm

ent i

n Sh

ares

2,00

0,00

0

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000

2,00

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0

2,00

0,00

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Inve

stmen

t in

subs

idia

ry (U

nquo

ted)

-

-

-

20

20

-

Tr

ade

and

Oth

er R

ecei

vabl

es10

,744

,968

,138

9,

277,

200,

225

2,

549,

702,

106

8,

571,

483,

325

6,

908,

203,

554

2,

549,

702,

106

Cash

and

Cas

h Eq

uiva

lent

s53

4,76

1,47

1

615,

208,

770

327,

792,

660

464,

311,

326

528,

777,

653

327,

792,

660

12,9

20,6

96,3

16

11,6

64,4

59,5

89

4,43

8,37

8,10

5

10,6

76,7

61,3

78

9,20

9,03

1,82

1

4,43

8,37

8,10

5

2,38

8,66

3,37

1

-

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Bath

thar

amul

la(1

15,6

79,6

51.7

8)

51

2,13

4,69

5

532,

061,

244

137,

110,

747

396,

455,

043

404,

646,

948

137,

110,

747

M

ahar

agam

a12

7,41

4,29

5.83

259,

066,

494

20

9,78

1,10

2

43

,744

,667

14

3,38

6,84

2

82

,366

,806

43

,744

,667

Gam

paha

314,

678,

135

38

4,32

8,83

0

10

5,13

6,85

1

19

8,99

8,48

3

25

6,91

4,53

5

10

5,13

6,85

1

Jaw

atht

ha14

8,51

7,84

9.08

472,

993,

879

50

5,26

1,70

5

90

,987

,322

35

7,31

4,22

7

25

0,43

3,11

4

90

,987

,322

Am

para

84

,280

,424

.21

66

8,32

2,78

3

731,

985,

534

219,

120,

376

552,

643,

131

477,

156,

943

219,

120,

376

M

onar

agal

a5,

959,

539.

33

1,57

0,64

5,74

0

-

-

1,

454,

966,

088

-

-

Uva

875,

467,

540

1,

505,

329,

690

58

5,36

2,63

8

75

9,78

7,88

8

1,

250,

501,

098

58

5,36

2,63

8

Saba

raga

muw

a35

5,17

4,07

0

319,

616,

319

135,

890,

853

239,

494,

418

192,

202,

024

135,

890,

853

So

uthe

rn37

7,65

3,33

9

479,

569,

036

187,

960,

973

261,

973,

687

352,

154,

740

187,

960,

973

Ce

ntra

l1,

186,

998,

086

833,

195,

778

293,

589,

962

1,07

1,31

8,43

4

705,

781,

482

293,

589,

962

N

orth

Cen

tral

1,06

4,06

9,51

0

85

0,84

0,48

6

72

,439

,512

83

2,71

0,20

7

72

3,42

6,19

0

72

,439

,512

Kan

thal

e29

6,82

2,10

9

-

-

181,

142,

457

-

-

Ja

ffna

260,

951,

971

41

,261

,679

-

14

5,27

2,31

9

41

,261

,679

-

Kat

ubed

dha

285,

101,

035

32

1,65

3,14

4

10

8,83

2,93

3

16

9,42

1,38

3

19

4,23

8,84

8

10

8,83

2,93

3

Dig

ana

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

Co

nsul

tanc

y46

4,70

4,04

8

513,

261,

123

249,

046,

376

349,

024,

396

258,

432,

532

249,

046,

376

In

tern

atio

nal

179,

701,

617

18

7,38

7,56

2

79

,014

,644

64

,021

,965

59

,973

,267

79

,014

,644

Hea

d O

ffice

263,

916,

119

20

2,27

2,99

5

66

,740

,634

14

8,23

6,46

7

74

,858

,699

66

,740

,634

9,43

6,70

7,82

4

7,

630,

245,

860

2,

388,

663,

371

7,

354,

474,

092

5,

336,

788,

535

2,

388,

663,

371

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

227

Fina

ncia

l risk

man

agem

ent (

cont

inue

d)27

GR

OU

PG

ross

Impa

irm

ent

Gro

ssIm

pair

men

t G

ross

Im

pair

men

t20

1220

1220

1120

1120

1020

10R

s.R

s.R

s.R

s.R

s.R

s.Cu

rren

t bal

ance

(no

due)

00-0

1 Y

ear

7,70

0,51

2,71

9

-

6,

951,

842,

058

-

1,

811,

317,

592

-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

58

5,56

0,80

7

33

2,86

0,48

3

(4

46,8

75,1

14)

125,

426,

020

(381

,378

,703

)

9,43

6,70

7,82

4

58

5,56

0,80

7

7,

630,

245,

860

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

CEC

B G

ross

Im

pair

men

t G

ross

Im

pair

men

t G

ross

Im

pair

men

t 20

1220

1220

1120

1120

1020

10R

s.R

s.R

s.R

s.R

s.R

s.Cu

rren

t bal

ance

(no

due)

00-0

1 Y

ear

5,61

8,27

8,98

7

-

4,

658,

384,

733

-

1,

811,

317,

592

-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

(5

85,5

60,8

07)

332,

860,

483

(446

,875

,114

)

12

5,42

6,02

0

(3

81,3

78,7

03)

7,

354,

474,

092

(585

,560

,807

)

5,

336,

788,

535

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

2012

2011

2010

2012

2011

2010

Indi

vidu

al im

pair

men

tR

s.Rs

.Rs

.R

s.Rs

.Rs

.Ba

lanc

e at

the

begi

nnin

g44

6,87

5,11

4

381,

378,

703

313,

601,

119

446,

875,

114

381,

378,

703

313,

601,

119

Im

pairm

ent l

oss r

ecog

nise

d28

7,75

6,14

4

84,3

96,4

10

90,7

63,6

91

287,

756,

144

84,3

96,4

10

90,7

63,6

91

Re

vers

al o

f Im

pairm

ent

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

A

mou

nts w

ritte

n of

f(1

14,5

43,1

06)

(18,

861,

564)

-

(1

14,5

43,1

06)

(18,

861,

564)

-

B

alan

ce a

t the

end

585,

560,

807

44

6,87

5,11

4

38

1,37

8,70

3

58

5,56

0,80

7

44

6,87

5,11

4

38

1,37

8,70

3

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

2

27Fi

nanc

ial r

isk m

anag

emen

t (co

ntin

ued)

27C

ash

and

cash

equ

ival

ents

27Li

quid

ity r

isk

GR

OU

PA

s at 3

1st D

ecem

ber

2012

Non

-der

ivat

ive

finan

cial

liab

ilitie

sTr

ade

and

othe

r pay

able

s12

,331

,787

,072

12,3

31,7

87,0

72

12,3

31,7

87,0

72

-

-

-

-

A

mou

nts d

ue to

rela

ted

com

pani

es15

9,57

9,94

1

15

9,57

9,94

1

159,

579,

941

-

-

-

-

Le

ase

cred

itors

72,1

10,4

45

72

,110

,445

32

,655

,555

16

,561

,931

11

,597

,965

11

,294

,993

-

Bank

ove

rdra

ft-

-

-

-

-

-

-

12

,563

,477

,458

12,5

63,4

77,4

58

12,5

24,0

22,5

68

16,5

61,9

31

11,5

97,9

65

11,2

94,9

93

-

CEC

BA

s at 3

1st D

ecem

ber

2012

Non

-der

ivat

ive

finan

cial

liab

ilitie

sTr

ade

and

othe

r pay

able

s10

,022

,553

,967

10,0

22,5

53,9

67

10,0

22,5

53,9

67

-

-

-

-

A

mou

nts d

ue to

rela

ted

com

pani

es(9

7,64

6,80

8)

(9

7,64

6,80

8)

(97,

646,

808)

-

-

-

-

Leas

e cr

edito

rs30

,364

,400

30,3

64,4

00

18,7

40,2

07

6,12

5,42

0

3,24

8,75

6

2,

250,

017

-

Bank

ove

rdra

ft-

-

-

-

-

-

-

9,95

5,27

1,55

9

9,95

5,27

1,55

9

9,

943,

647,

366

6,

125,

420

3,

248,

756

2,25

0,01

7

-

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

227

Fina

ncia

l risk

man

agem

ent (

cont

inue

d)

27M

arke

t risk

27In

tere

st r

ate

risk

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Fixe

d ra

te in

stru

men

tsFi

nanc

ial A

sset

s - L

ong

term

fixe

d de

posit

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

Fi

nanc

ial A

sset

s - S

hort

term

fixe

d de

posit

1,57

2,85

2,40

6

1,

707,

593,

967

1,

491,

086,

629

1,

572,

852,

406

1,

707,

593,

967

1,

491,

086,

629

1,63

8,96

6,70

7

1,

770,

050,

594

1,

558,

883,

339

1,

638,

966,

707

1,

770,

050,

594

1,

558,

883,

339

28C

apita

l man

agem

ent

01) t

o sa

fegu

arde

d th

e G

roup

abi

lity

to c

ontin

ue a

s a g

oing

con

cern

, so

that

it c

an c

ontin

ue to

pro

vide

retu

rns f

or sh

areh

olde

rs a

nd b

enef

its fo

r oth

er st

akeh

olde

rs

02) t

o pr

ovid

e an

ade

quat

e re

turn

to sh

areh

olde

rs b

y pr

icin

g pr

oduc

ts co

mm

ensu

rate

ly w

ith th

e le

vel o

f risk

; and

The

Gro

up’s

net

deb

t to

adju

sted

equi

ty ra

tio a

t the

repo

rting

dat

e w

as a

s fol

low

s.

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Tota

l lia

bilit

ies

13,1

81,1

35,7

96

11,3

45,8

66,9

77

3,93

6,72

1,55

7

10,5

64,8

77,2

08

8,87

0,33

5,97

1

3,93

6,72

1,55

7

Le

ss: c

ash

and

cash

equ

ival

ents

(534

,761

,471

)

(6

15,2

08,7

70)

(327

,792

,660

)

(464

,311

,326

)

(5

28,7

77,6

53)

(327

,792

,660

)

Net

deb

t12

,646

,374

,325

10

,730

,658

,207

3,

608,

928,

897

10

,100

,565

,882

8,

341,

558,

318

3,

608,

928,

897

Tota

l equ

ity3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

A

djus

ted

equi

ty3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

Net

deb

t to

adju

sted

equi

ty ra

tio a

t 31s

t Dec

embe

r3.

49

3.29

1.

17

2.

79

3

1.

17

Cre

dit r

isk (c

ontin

ued)

The

Gro

up's

expo

sure

tocr

edit

risk

isin

fluen

ced

mai

nly

byth

ein

divi

dual

char

acte

ristic

sofe

ach

custo

mer

.How

ever

,man

agem

enta

lsoco

nsid

erst

hede

mog

raph

icso

fthe

Gro

up’s

custo

mer

base

,ast

hese

fact

orsm

ayha

ve a

n in

fluen

ce o

n cr

edit

risk.

Dur

ing

2012

the

maj

ority

of t

he G

roup

’s re

venu

e w

as a

ttrib

utab

le to

sale

s tra

nsac

tions

with

Uva

, Ce

ntra

l and

Nor

th C

entra

l pro

vinc

ial g

eogr

aphi

cal r

egio

ns .

The

Gro

up h

eld

cash

and

cas

h eq

uiva

lent

s of R

s. 53

4,76

1,47

1 at

31s

t Dec

embe

r 201

2 (2

011:

Rs.

565,

852,

867)

, whi

ch re

pres

ents

its m

axim

um c

redi

t exp

osur

e on

thes

e as

sets.

The

cas

h an

d ca

sh e

quiv

alen

ts ar

e he

ld

with

ban

k an

d fin

anci

al in

stitu

tion

coun

terp

artie

s.

GR

OU

P

CEC

B

GR

OU

PC

ECB

Impa

irm

ent l

osse

sTh

e ag

ing

of tr

ade

debt

ors a

t the

repo

rting

dat

e th

at w

ere

not i

mpa

ired

was

as f

ollo

ws.

Cre

dit r

isk (c

ontin

ued)

The

note

pres

ents

info

rmat

ion

abou

tthe

Gro

up's

expo

sure

toea

chof

the

abov

eris

ks,t

heG

roup

'sris

km

anag

emen

tobj

ectiv

es,p

olic

iesa

ndpr

oces

sesf

orm

easu

ring

and

man

agin

gris

k,an

dth

eG

roup

'sm

anag

emen

tof

capi

tal.

The

Boar

dof

Dire

ctor

sha

sov

eral

lre

spon

sibili

tyfo

rth

ees

tabl

ishm

enta

ndov

ersig

htof

the

Gro

up’s

risk

man

agem

ent

fram

ewor

k.Th

eBo

ard

has

esta

blish

edth

eA

udit

and

Man

agem

entC

omm

ittee

,whi

chis

resp

onsib

le fo

r dev

elop

ing

and

mon

itorin

g th

e G

roup

’s ri

sk m

anag

emen

t pol

icie

s. Th

e co

mm

ittee

repo

rts re

gula

rly to

the

Boar

d of

Dire

ctor

s on

its a

ctiv

ities

.

The

Gro

up’s

risk

man

agem

entp

olic

iesa

rees

tabl

ished

toid

entif

yan

dan

alys

eth

eris

ksfa

ced

byth

eG

roup

,to

seta

ppro

pria

teris

klim

itsan

dco

ntro

ls,an

dto

mon

itorr

isksa

ndad

here

nce

tolim

its.R

iskm

anag

emen

tpo

licie

sand

syste

msa

rere

view

edre

gula

rlyto

refle

ctch

ange

sin

mar

ketc

ondi

tions

and

the

Gro

up’s

activ

ities

.The

Gro

up,t

hrou

ghits

train

ing

and

man

agem

ents

tand

ards

and

proc

edur

es,a

imst

ode

velo

pa

disc

iplin

edan

d co

nstru

ctiv

e co

ntro

l env

ironm

ent i

n w

hich

all

empl

oyee

s und

ersta

nd th

eir r

oles

and

obl

igat

ions

.

The

Aud

itan

dM

anag

emen

tCom

mitt

eeov

erse

esho

wm

anag

emen

tmon

itors

com

plia

nce

with

the

Gro

up’s

risk

man

agem

entp

olic

iesa

ndpr

oced

ures

,and

revi

ewst

head

equa

cyof

the

risk

man

agem

entf

ram

ewor

kin

rela

tion

toth

eris

ksfa

ced

byth

eG

roup

.The

Aud

itan

dM

anag

emen

tCom

mitt

eeis

assis

ted

inits

over

sight

role

byIn

tern

alA

udit.

Inte

rnal

Aud

itun

derta

kes

both

regu

lar

and

adho

cre

view

sofr

iskm

anag

emen

tco

ntro

ls an

d pr

oced

ures

, the

resu

lts o

f whi

ch a

re re

porte

d to

the

Aud

it an

d M

anag

emen

t Com

mitt

ee.

Cred

itris

kis

the

risk

offin

anci

allo

ssto

the

Gro

upif

acu

stom

eror

coun

terp

arty

toa

finan

cial

instr

umen

tfai

lsto

mee

tits

cont

ract

ualo

blig

atio

ns,a

ndar

isesp

rinci

pally

from

the

Gro

up’s

rece

ivab

lesf

rom

custo

mer

san

d in

vestm

ent s

ecur

ities

.

Cre

dit r

isk

Liqu

idity

risk

is th

e ris

k th

at th

e G

roup

will

enc

ount

er d

iffic

ulty

in m

eetin

g th

e ob

ligat

ions

ass

ocia

ted

with

its f

inan

cial

liab

ilitie

s tha

t are

settl

ed b

y de

liver

ing

cash

or a

noth

er fi

nanc

ial a

sset

. The

Gro

up’s

app

roac

h to

The

follo

win

g ar

e th

e co

ntra

ctua

l mat

uriti

es o

f fin

anci

al li

abili

ties,

incl

udin

g es

timat

ed in

tere

st pa

ymen

ts an

d ex

clud

ing

the

impa

ct o

f net

ting

agre

emen

ts.

Expo

sure

to c

redi

t risk

00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

03-

04 Y

ears

M

ore

than

4

year

s

CEC

B

Cre

dit r

isk (c

ontin

ued)

The

carr

ying

am

ount

of f

inan

cial

ass

ets r

epre

sent

s the

max

imum

cre

dit e

xpos

ure.

The

max

imum

exp

osur

e to

cre

dit r

isk a

t the

repo

rting

dat

e w

as a

s fol

low

s

The

max

imum

exp

osur

e to

cre

dit r

isk fo

r loa

ns a

nd re

ceiv

able

s at r

epor

ting

date

by

geog

raph

ic re

gion

was

: 00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

Car

ryin

g am

ount

Con

trac

tual

cas

h flo

ws

Mar

ket r

isk is

the

risk

that

cha

nges

in m

arke

t pric

es, s

uch

as in

tere

st ra

tes a

nd e

quity

pric

es w

ill a

ffect

the

Gro

up’s

inco

me

or th

e va

lue

of it

s hol

ding

s of f

inan

cial

instr

umen

ts. T

he o

bjec

tive

of m

arke

t risk

m

anag

emen

t is t

o m

anag

e an

d co

ntro

l mar

ket r

isk e

xpos

ures

with

in a

ccep

tabl

e pa

ram

eter

s, w

hile

opt

imisi

ng th

e re

turn

.

GR

OU

P

Furth

er, t

he B

oard

seek

s to

mai

ntai

n a

bala

nce

betw

een

high

er ta

rget

ed re

turn

s tha

t mig

ht b

e po

ssib

le w

ith h

ighe

r lev

el o

f bor

row

ing,

and

the

adva

ntag

es a

nd se

curit

y af

ford

ed b

y th

e str

ong

capi

tal p

ositi

on o

f the

gr

oup.

Gro

upC

ompa

ny

At t

he re

porti

ng d

ate

the

inte

rest

rate

pro

file

of th

e gr

oup's

inte

rest

- bea

ring

finan

cial

instr

umen

ts w

as:

Gro

upC

ompa

ny

The

Boar

d’s p

olic

y is

to m

aint

ain

a str

ong

capi

tal b

ase

so a

s to

mai

ntai

n in

vesto

r, cr

edito

r and

mar

ket c

onfid

ence

and

to su

stain

futu

re d

evel

opm

ent o

f the

bus

ines

s. Ca

pita

l con

sists

of o

rdin

ary

shar

es, r

etai

ned

earn

ings

and

non

-con

trolli

ng in

tere

sts o

f the

Gro

up. T

he B

oard

of D

irect

ors m

onito

rs th

e re

turn

on

capi

tal a

s wel

l as t

he le

vel o

f div

iden

ds to

ord

inar

y sh

areh

olde

rs.

The

Gro

up's

mai

n ob

ject

ive

is w

hen

man

agin

g ca

pita

l are

:

03-

04 Y

ears

M

ore

than

4 y

ears

The

gros

s inf

low

s/(ou

tflow

s) d

isclo

sed

in th

e pr

evio

us ta

ble

repr

esen

t the

con

tract

ual u

ndisc

ount

ed c

ash

flow

s rel

atin

g to

fina

ncia

l lia

bilit

ies h

eld

for r

isk m

anag

emen

t pur

pose

s and

whi

ch a

re u

sual

ly n

ot c

lose

d ou

t pr

ior t

o co

ntra

ctua

l mat

urity

.

Carr

ying

am

ount

Cont

ract

ual c

ash

flow

s

24

Page | 31

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

2

27Fi

nanc

ial r

isk m

anag

emen

tov

ervi

ewTh

e gr

oup

has e

xpos

ure

to th

e fo

llow

ing

risk

arisi

ng fr

om fi

nanc

ial i

nstru

men

tsCr

edit

risk

Liqu

idity

risk

Mar

ket r

isk

Risk

man

agem

ent F

ram

ewor

k

27 CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

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NO

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TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)FO

R T

HE

YEA

R E

ND

ED 3

1ST

DEC

EMB

ER 2

012

27Fi

nanc

ial r

isk m

anag

emen

t (co

ntin

ued)

27

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Inve

stmen

t in

Fixe

d D

epos

it (L

ong

term

)66

,114

,301

62

,456

,627

67

,796

,710

66

,114

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62

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67

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Inve

stmen

t in

Fixe

d D

epos

it (S

hort

term

)1,

572,

852,

406

1,70

7,59

3,96

7

1,49

1,08

6,62

9

1,57

2,85

2,40

6

1,70

7,59

3,96

7

1,49

1,08

6,62

9

In

vestm

ent i

n Sh

ares

2,00

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0

2,

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000

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0

2,00

0,00

0

2,

000,

000

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000,

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Inve

stmen

t in

subs

idia

ry (U

nquo

ted)

-

-

-

20

20

-

Tr

ade

and

Oth

er R

ecei

vabl

es10

,744

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,138

9,

277,

200,

225

2,

549,

702,

106

8,

571,

483,

325

6,

908,

203,

554

2,

549,

702,

106

Cash

and

Cas

h Eq

uiva

lent

s53

4,76

1,47

1

615,

208,

770

327,

792,

660

464,

311,

326

528,

777,

653

327,

792,

660

12,9

20,6

96,3

16

11,6

64,4

59,5

89

4,43

8,37

8,10

5

10,6

76,7

61,3

78

9,20

9,03

1,82

1

4,43

8,37

8,10

5

2,38

8,66

3,37

1

-

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Bath

thar

amul

la(1

15,6

79,6

51.7

8)

51

2,13

4,69

5

532,

061,

244

137,

110,

747

396,

455,

043

404,

646,

948

137,

110,

747

M

ahar

agam

a12

7,41

4,29

5.83

259,

066,

494

20

9,78

1,10

2

43

,744

,667

14

3,38

6,84

2

82

,366

,806

43

,744

,667

Gam

paha

314,

678,

135

38

4,32

8,83

0

10

5,13

6,85

1

19

8,99

8,48

3

25

6,91

4,53

5

10

5,13

6,85

1

Jaw

atht

ha14

8,51

7,84

9.08

472,

993,

879

50

5,26

1,70

5

90

,987

,322

35

7,31

4,22

7

25

0,43

3,11

4

90

,987

,322

Am

para

84

,280

,424

.21

66

8,32

2,78

3

731,

985,

534

219,

120,

376

552,

643,

131

477,

156,

943

219,

120,

376

M

onar

agal

a5,

959,

539.

33

1,57

0,64

5,74

0

-

-

1,

454,

966,

088

-

-

Uva

875,

467,

540

1,

505,

329,

690

58

5,36

2,63

8

75

9,78

7,88

8

1,

250,

501,

098

58

5,36

2,63

8

Saba

raga

muw

a35

5,17

4,07

0

319,

616,

319

135,

890,

853

239,

494,

418

192,

202,

024

135,

890,

853

So

uthe

rn37

7,65

3,33

9

479,

569,

036

187,

960,

973

261,

973,

687

352,

154,

740

187,

960,

973

Ce

ntra

l1,

186,

998,

086

833,

195,

778

293,

589,

962

1,07

1,31

8,43

4

705,

781,

482

293,

589,

962

N

orth

Cen

tral

1,06

4,06

9,51

0

85

0,84

0,48

6

72

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83

2,71

0,20

7

72

3,42

6,19

0

72

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Kan

thal

e29

6,82

2,10

9

-

-

181,

142,

457

-

-

Ja

ffna

260,

951,

971

41

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,679

-

14

5,27

2,31

9

41

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-

Kat

ubed

dha

285,

101,

035

32

1,65

3,14

4

10

8,83

2,93

3

16

9,42

1,38

3

19

4,23

8,84

8

10

8,83

2,93

3

Dig

ana

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

28,3

06,6

58

12,4

39,6

33

13,6

84,8

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Co

nsul

tanc

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4,70

4,04

8

513,

261,

123

249,

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376

349,

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396

258,

432,

532

249,

046,

376

In

tern

atio

nal

179,

701,

617

18

7,38

7,56

2

79

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64

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59

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79

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d O

ffice

263,

916,

119

20

2,27

2,99

5

66

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14

8,23

6,46

7

74

,858

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66

,740

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9,43

6,70

7,82

4

7,

630,

245,

860

2,

388,

663,

371

7,

354,

474,

092

5,

336,

788,

535

2,

388,

663,

371

CEN

TRA

L EN

GIN

EER

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CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

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FIN

AN

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L ST

ATE

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TS (C

ON

TIN

UED

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FOR

TH

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EAR

EN

DED

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T D

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BER

201

227

Fina

ncia

l risk

man

agem

ent (

cont

inue

d)27

GR

OU

PG

ross

Impa

irm

ent

Gro

ssIm

pair

men

t G

ross

Im

pair

men

t20

1220

1220

1120

1120

1020

10R

s.R

s.R

s.R

s.R

s.R

s.Cu

rren

t bal

ance

(no

due)

00-0

1 Y

ear

7,70

0,51

2,71

9

-

6,

951,

842,

058

-

1,

811,

317,

592

-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

58

5,56

0,80

7

33

2,86

0,48

3

(4

46,8

75,1

14)

125,

426,

020

(381

,378

,703

)

9,43

6,70

7,82

4

58

5,56

0,80

7

7,

630,

245,

860

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

CEC

B G

ross

Im

pair

men

t G

ross

Im

pair

men

t G

ross

Im

pair

men

t 20

1220

1220

1120

1120

1020

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s.R

s.R

s.R

s.R

s.R

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(no

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5,61

8,27

8,98

7

-

4,

658,

384,

733

-

1,

811,

317,

592

-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

(5

85,5

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07)

332,

860,

483

(446

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)

12

5,42

6,02

0

(3

81,3

78,7

03)

7,

354,

474,

092

(585

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,807

)

5,

336,

788,

535

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

2012

2011

2010

2012

2011

2010

Indi

vidu

al im

pair

men

tR

s.Rs

.Rs

.R

s.Rs

.Rs

.Ba

lanc

e at

the

begi

nnin

g44

6,87

5,11

4

381,

378,

703

313,

601,

119

446,

875,

114

381,

378,

703

313,

601,

119

Im

pairm

ent l

oss r

ecog

nise

d28

7,75

6,14

4

84,3

96,4

10

90,7

63,6

91

287,

756,

144

84,3

96,4

10

90,7

63,6

91

Re

vers

al o

f Im

pairm

ent

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

A

mou

nts w

ritte

n of

f(1

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43,1

06)

(18,

861,

564)

-

(1

14,5

43,1

06)

(18,

861,

564)

-

B

alan

ce a

t the

end

585,

560,

807

44

6,87

5,11

4

38

1,37

8,70

3

58

5,56

0,80

7

44

6,87

5,11

4

38

1,37

8,70

3

CEN

TRA

L EN

GIN

EER

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CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

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L ST

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ON

TIN

UED

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FOR

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EAR

EN

DED

31S

T D

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201

2

27Fi

nanc

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isk m

anag

emen

t (co

ntin

ued)

27C

ash

and

cash

equ

ival

ents

27Li

quid

ity r

isk

GR

OU

PA

s at 3

1st D

ecem

ber

2012

Non

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ivat

ive

finan

cial

liab

ilitie

sTr

ade

and

othe

r pay

able

s12

,331

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,072

12,3

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72

12,3

31,7

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72

-

-

-

-

A

mou

nts d

ue to

rela

ted

com

pani

es15

9,57

9,94

1

15

9,57

9,94

1

159,

579,

941

-

-

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-

Le

ase

cred

itors

72,1

10,4

45

72

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32

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16

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11

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11

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-

Bank

ove

rdra

ft-

-

-

-

-

-

-

12

,563

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12,5

63,4

77,4

58

12,5

24,0

22,5

68

16,5

61,9

31

11,5

97,9

65

11,2

94,9

93

-

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s at 3

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Non

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finan

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liab

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sTr

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and

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s10

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10,0

22,5

53,9

67

10,0

22,5

53,9

67

-

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-

-

A

mou

nts d

ue to

rela

ted

com

pani

es(9

7,64

6,80

8)

(9

7,64

6,80

8)

(97,

646,

808)

-

-

-

-

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e cr

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30,3

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00

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6

2,

250,

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-

Bank

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-

-

-

-

-

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9,95

5,27

1,55

9

9,95

5,27

1,55

9

9,

943,

647,

366

6,

125,

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3,

248,

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FOR

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T D

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Fina

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l risk

man

agem

ent (

cont

inue

d)

27M

arke

t risk

27In

tere

st r

ate

risk

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Fixe

d ra

te in

stru

men

tsFi

nanc

ial A

sset

s - L

ong

term

fixe

d de

posit

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

Fi

nanc

ial A

sset

s - S

hort

term

fixe

d de

posit

1,57

2,85

2,40

6

1,

707,

593,

967

1,

491,

086,

629

1,

572,

852,

406

1,

707,

593,

967

1,

491,

086,

629

1,63

8,96

6,70

7

1,

770,

050,

594

1,

558,

883,

339

1,

638,

966,

707

1,

770,

050,

594

1,

558,

883,

339

28C

apita

l man

agem

ent

01) t

o sa

fegu

arde

d th

e G

roup

abi

lity

to c

ontin

ue a

s a g

oing

con

cern

, so

that

it c

an c

ontin

ue to

pro

vide

retu

rns f

or sh

areh

olde

rs a

nd b

enef

its fo

r oth

er st

akeh

olde

rs

02) t

o pr

ovid

e an

ade

quat

e re

turn

to sh

areh

olde

rs b

y pr

icin

g pr

oduc

ts co

mm

ensu

rate

ly w

ith th

e le

vel o

f risk

; and

The

Gro

up’s

net

deb

t to

adju

sted

equi

ty ra

tio a

t the

repo

rting

dat

e w

as a

s fol

low

s.

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Tota

l lia

bilit

ies

13,1

81,1

35,7

96

11,3

45,8

66,9

77

3,93

6,72

1,55

7

10,5

64,8

77,2

08

8,87

0,33

5,97

1

3,93

6,72

1,55

7

Le

ss: c

ash

and

cash

equ

ival

ents

(534

,761

,471

)

(6

15,2

08,7

70)

(327

,792

,660

)

(464

,311

,326

)

(5

28,7

77,6

53)

(327

,792

,660

)

Net

deb

t12

,646

,374

,325

10

,730

,658

,207

3,

608,

928,

897

10

,100

,565

,882

8,

341,

558,

318

3,

608,

928,

897

Tota

l equ

ity3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

A

djus

ted

equi

ty3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

Net

deb

t to

adju

sted

equi

ty ra

tio a

t 31s

t Dec

embe

r3.

49

3.29

1.

17

2.

79

3

1.

17

Cre

dit r

isk (c

ontin

ued)

The

Gro

up's

expo

sure

tocr

edit

risk

isin

fluen

ced

mai

nly

byth

ein

divi

dual

char

acte

ristic

sofe

ach

custo

mer

.How

ever

,man

agem

enta

lsoco

nsid

erst

hede

mog

raph

icso

fthe

Gro

up’s

custo

mer

base

,ast

hese

fact

orsm

ayha

ve a

n in

fluen

ce o

n cr

edit

risk.

Dur

ing

2012

the

maj

ority

of t

he G

roup

’s re

venu

e w

as a

ttrib

utab

le to

sale

s tra

nsac

tions

with

Uva

, Ce

ntra

l and

Nor

th C

entra

l pro

vinc

ial g

eogr

aphi

cal r

egio

ns .

The

Gro

up h

eld

cash

and

cas

h eq

uiva

lent

s of R

s. 53

4,76

1,47

1 at

31s

t Dec

embe

r 201

2 (2

011:

Rs.

565,

852,

867)

, whi

ch re

pres

ents

its m

axim

um c

redi

t exp

osur

e on

thes

e as

sets.

The

cas

h an

d ca

sh e

quiv

alen

ts ar

e he

ld

with

ban

k an

d fin

anci

al in

stitu

tion

coun

terp

artie

s.

GR

OU

P

CEC

B

GR

OU

PC

ECB

Impa

irm

ent l

osse

sTh

e ag

ing

of tr

ade

debt

ors a

t the

repo

rting

dat

e th

at w

ere

not i

mpa

ired

was

as f

ollo

ws.

Cre

dit r

isk (c

ontin

ued)

The

note

pres

ents

info

rmat

ion

abou

tthe

Gro

up's

expo

sure

toea

chof

the

abov

eris

ks,t

heG

roup

'sris

km

anag

emen

tobj

ectiv

es,p

olic

iesa

ndpr

oces

sesf

orm

easu

ring

and

man

agin

gris

k,an

dth

eG

roup

'sm

anag

emen

tof

capi

tal.

The

Boar

dof

Dire

ctor

sha

sov

eral

lre

spon

sibili

tyfo

rth

ees

tabl

ishm

enta

ndov

ersig

htof

the

Gro

up’s

risk

man

agem

ent

fram

ewor

k.Th

eBo

ard

has

esta

blish

edth

eA

udit

and

Man

agem

entC

omm

ittee

,whi

chis

resp

onsib

le fo

r dev

elop

ing

and

mon

itorin

g th

e G

roup

’s ri

sk m

anag

emen

t pol

icie

s. Th

e co

mm

ittee

repo

rts re

gula

rly to

the

Boar

d of

Dire

ctor

s on

its a

ctiv

ities

.

The

Gro

up’s

risk

man

agem

entp

olic

iesa

rees

tabl

ished

toid

entif

yan

dan

alys

eth

eris

ksfa

ced

byth

eG

roup

,to

seta

ppro

pria

teris

klim

itsan

dco

ntro

ls,an

dto

mon

itorr

isksa

ndad

here

nce

tolim

its.R

iskm

anag

emen

tpo

licie

sand

syste

msa

rere

view

edre

gula

rlyto

refle

ctch

ange

sin

mar

ketc

ondi

tions

and

the

Gro

up’s

activ

ities

.The

Gro

up,t

hrou

ghits

train

ing

and

man

agem

ents

tand

ards

and

proc

edur

es,a

imst

ode

velo

pa

disc

iplin

edan

d co

nstru

ctiv

e co

ntro

l env

ironm

ent i

n w

hich

all

empl

oyee

s und

ersta

nd th

eir r

oles

and

obl

igat

ions

.

The

Aud

itan

dM

anag

emen

tCom

mitt

eeov

erse

esho

wm

anag

emen

tmon

itors

com

plia

nce

with

the

Gro

up’s

risk

man

agem

entp

olic

iesa

ndpr

oced

ures

,and

revi

ewst

head

equa

cyof

the

risk

man

agem

entf

ram

ewor

kin

rela

tion

toth

eris

ksfa

ced

byth

eG

roup

.The

Aud

itan

dM

anag

emen

tCom

mitt

eeis

assis

ted

inits

over

sight

role

byIn

tern

alA

udit.

Inte

rnal

Aud

itun

derta

kes

both

regu

lar

and

adho

cre

view

sofr

iskm

anag

emen

tco

ntro

ls an

d pr

oced

ures

, the

resu

lts o

f whi

ch a

re re

porte

d to

the

Aud

it an

d M

anag

emen

t Com

mitt

ee.

Cred

itris

kis

the

risk

offin

anci

allo

ssto

the

Gro

upif

acu

stom

eror

coun

terp

arty

toa

finan

cial

instr

umen

tfai

lsto

mee

tits

cont

ract

ualo

blig

atio

ns,a

ndar

isesp

rinci

pally

from

the

Gro

up’s

rece

ivab

lesf

rom

custo

mer

san

d in

vestm

ent s

ecur

ities

.

Cre

dit r

isk

Liqu

idity

risk

is th

e ris

k th

at th

e G

roup

will

enc

ount

er d

iffic

ulty

in m

eetin

g th

e ob

ligat

ions

ass

ocia

ted

with

its f

inan

cial

liab

ilitie

s tha

t are

settl

ed b

y de

liver

ing

cash

or a

noth

er fi

nanc

ial a

sset

. The

Gro

up’s

app

roac

h to

The

follo

win

g ar

e th

e co

ntra

ctua

l mat

uriti

es o

f fin

anci

al li

abili

ties,

incl

udin

g es

timat

ed in

tere

st pa

ymen

ts an

d ex

clud

ing

the

impa

ct o

f net

ting

agre

emen

ts.

Expo

sure

to c

redi

t risk

00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

03-

04 Y

ears

M

ore

than

4

year

s

CEC

B

Cre

dit r

isk (c

ontin

ued)

The

carr

ying

am

ount

of f

inan

cial

ass

ets r

epre

sent

s the

max

imum

cre

dit e

xpos

ure.

The

max

imum

exp

osur

e to

cre

dit r

isk a

t the

repo

rting

dat

e w

as a

s fol

low

s

The

max

imum

exp

osur

e to

cre

dit r

isk fo

r loa

ns a

nd re

ceiv

able

s at r

epor

ting

date

by

geog

raph

ic re

gion

was

: 00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

Car

ryin

g am

ount

Con

trac

tual

cas

h flo

ws

Mar

ket r

isk is

the

risk

that

cha

nges

in m

arke

t pric

es, s

uch

as in

tere

st ra

tes a

nd e

quity

pric

es w

ill a

ffect

the

Gro

up’s

inco

me

or th

e va

lue

of it

s hol

ding

s of f

inan

cial

instr

umen

ts. T

he o

bjec

tive

of m

arke

t risk

m

anag

emen

t is t

o m

anag

e an

d co

ntro

l mar

ket r

isk e

xpos

ures

with

in a

ccep

tabl

e pa

ram

eter

s, w

hile

opt

imisi

ng th

e re

turn

.

GR

OU

P

Furth

er, t

he B

oard

seek

s to

mai

ntai

n a

bala

nce

betw

een

high

er ta

rget

ed re

turn

s tha

t mig

ht b

e po

ssib

le w

ith h

ighe

r lev

el o

f bor

row

ing,

and

the

adva

ntag

es a

nd se

curit

y af

ford

ed b

y th

e str

ong

capi

tal p

ositi

on o

f the

gr

oup.

Gro

upC

ompa

ny

At t

he re

porti

ng d

ate

the

inte

rest

rate

pro

file

of th

e gr

oup's

inte

rest

- bea

ring

finan

cial

instr

umen

ts w

as:

Gro

upC

ompa

ny

The

Boar

d’s p

olic

y is

to m

aint

ain

a str

ong

capi

tal b

ase

so a

s to

mai

ntai

n in

vesto

r, cr

edito

r and

mar

ket c

onfid

ence

and

to su

stain

futu

re d

evel

opm

ent o

f the

bus

ines

s. Ca

pita

l con

sists

of o

rdin

ary

shar

es, r

etai

ned

earn

ings

and

non

-con

trolli

ng in

tere

sts o

f the

Gro

up. T

he B

oard

of D

irect

ors m

onito

rs th

e re

turn

on

capi

tal a

s wel

l as t

he le

vel o

f div

iden

ds to

ord

inar

y sh

areh

olde

rs.

The

Gro

up's

mai

n ob

ject

ive

is w

hen

man

agin

g ca

pita

l are

:

03-

04 Y

ears

M

ore

than

4 y

ears

The

gros

s inf

low

s/(ou

tflow

s) d

isclo

sed

in th

e pr

evio

us ta

ble

repr

esen

t the

con

tract

ual u

ndisc

ount

ed c

ash

flow

s rel

atin

g to

fina

ncia

l lia

bilit

ies h

eld

for r

isk m

anag

emen

t pur

pose

s and

whi

ch a

re u

sual

ly n

ot c

lose

d ou

t pr

ior t

o co

ntra

ctua

l mat

urity

.

Carr

ying

am

ount

Cont

ract

ual c

ash

flow

s

24

Page | 32

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

2

27Fi

nanc

ial r

isk m

anag

emen

tov

ervi

ewTh

e gr

oup

has e

xpos

ure

to th

e fo

llow

ing

risk

arisi

ng fr

om fi

nanc

ial i

nstru

men

tsCr

edit

risk

Liqu

idity

risk

Mar

ket r

isk

Risk

man

agem

ent F

ram

ewor

k

27 CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)FO

R T

HE

YEA

R E

ND

ED 3

1ST

DEC

EMB

ER 2

012

27Fi

nanc

ial r

isk m

anag

emen

t (co

ntin

ued)

27

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Inve

stmen

t in

Fixe

d D

epos

it (L

ong

term

)66

,114

,301

62

,456

,627

67

,796

,710

66

,114

,301

62

,456

,627

67

,796

,710

Inve

stmen

t in

Fixe

d D

epos

it (S

hort

term

)1,

572,

852,

406

1,70

7,59

3,96

7

1,49

1,08

6,62

9

1,57

2,85

2,40

6

1,70

7,59

3,96

7

1,49

1,08

6,62

9

In

vestm

ent i

n Sh

ares

2,00

0,00

0

2,

000,

000

2,00

0,00

0

2,00

0,00

0

2,

000,

000

2,

000,

000

Inve

stmen

t in

subs

idia

ry (U

nquo

ted)

-

-

-

20

20

-

Tr

ade

and

Oth

er R

ecei

vabl

es10

,744

,968

,138

9,

277,

200,

225

2,

549,

702,

106

8,

571,

483,

325

6,

908,

203,

554

2,

549,

702,

106

Cash

and

Cas

h Eq

uiva

lent

s53

4,76

1,47

1

615,

208,

770

327,

792,

660

464,

311,

326

528,

777,

653

327,

792,

660

12,9

20,6

96,3

16

11,6

64,4

59,5

89

4,43

8,37

8,10

5

10,6

76,7

61,3

78

9,20

9,03

1,82

1

4,43

8,37

8,10

5

2,38

8,66

3,37

1

-

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Bath

thar

amul

la(1

15,6

79,6

51.7

8)

51

2,13

4,69

5

532,

061,

244

137,

110,

747

396,

455,

043

404,

646,

948

137,

110,

747

M

ahar

agam

a12

7,41

4,29

5.83

259,

066,

494

20

9,78

1,10

2

43

,744

,667

14

3,38

6,84

2

82

,366

,806

43

,744

,667

Gam

paha

314,

678,

135

38

4,32

8,83

0

10

5,13

6,85

1

19

8,99

8,48

3

25

6,91

4,53

5

10

5,13

6,85

1

Jaw

atht

ha14

8,51

7,84

9.08

472,

993,

879

50

5,26

1,70

5

90

,987

,322

35

7,31

4,22

7

25

0,43

3,11

4

90

,987

,322

Am

para

84

,280

,424

.21

66

8,32

2,78

3

731,

985,

534

219,

120,

376

552,

643,

131

477,

156,

943

219,

120,

376

M

onar

agal

a5,

959,

539.

33

1,57

0,64

5,74

0

-

-

1,

454,

966,

088

-

-

Uva

875,

467,

540

1,

505,

329,

690

58

5,36

2,63

8

75

9,78

7,88

8

1,

250,

501,

098

58

5,36

2,63

8

Saba

raga

muw

a35

5,17

4,07

0

319,

616,

319

135,

890,

853

239,

494,

418

192,

202,

024

135,

890,

853

So

uthe

rn37

7,65

3,33

9

479,

569,

036

187,

960,

973

261,

973,

687

352,

154,

740

187,

960,

973

Ce

ntra

l1,

186,

998,

086

833,

195,

778

293,

589,

962

1,07

1,31

8,43

4

705,

781,

482

293,

589,

962

N

orth

Cen

tral

1,06

4,06

9,51

0

85

0,84

0,48

6

72

,439

,512

83

2,71

0,20

7

72

3,42

6,19

0

72

,439

,512

Kan

thal

e29

6,82

2,10

9

-

-

181,

142,

457

-

-

Ja

ffna

260,

951,

971

41

,261

,679

-

14

5,27

2,31

9

41

,261

,679

-

Kat

ubed

dha

285,

101,

035

32

1,65

3,14

4

10

8,83

2,93

3

16

9,42

1,38

3

19

4,23

8,84

8

10

8,83

2,93

3

Dig

ana

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

Co

nsul

tanc

y46

4,70

4,04

8

513,

261,

123

249,

046,

376

349,

024,

396

258,

432,

532

249,

046,

376

In

tern

atio

nal

179,

701,

617

18

7,38

7,56

2

79

,014

,644

64

,021

,965

59

,973

,267

79

,014

,644

Hea

d O

ffice

263,

916,

119

20

2,27

2,99

5

66

,740

,634

14

8,23

6,46

7

74

,858

,699

66

,740

,634

9,43

6,70

7,82

4

7,

630,

245,

860

2,

388,

663,

371

7,

354,

474,

092

5,

336,

788,

535

2,

388,

663,

371

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

227

Fina

ncia

l risk

man

agem

ent (

cont

inue

d)27

GR

OU

PG

ross

Impa

irm

ent

Gro

ssIm

pair

men

t G

ross

Im

pair

men

t20

1220

1220

1120

1120

1020

10R

s.R

s.R

s.R

s.R

s.R

s.Cu

rren

t bal

ance

(no

due)

00-0

1 Y

ear

7,70

0,51

2,71

9

-

6,

951,

842,

058

-

1,

811,

317,

592

-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

58

5,56

0,80

7

33

2,86

0,48

3

(4

46,8

75,1

14)

125,

426,

020

(381

,378

,703

)

9,43

6,70

7,82

4

58

5,56

0,80

7

7,

630,

245,

860

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

CEC

B G

ross

Im

pair

men

t G

ross

Im

pair

men

t G

ross

Im

pair

men

t 20

1220

1220

1120

1120

1020

10R

s.R

s.R

s.R

s.R

s.R

s.Cu

rren

t bal

ance

(no

due)

00-0

1 Y

ear

5,61

8,27

8,98

7

-

4,

658,

384,

733

-

1,

811,

317,

592

-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

(5

85,5

60,8

07)

332,

860,

483

(446

,875

,114

)

12

5,42

6,02

0

(3

81,3

78,7

03)

7,

354,

474,

092

(585

,560

,807

)

5,

336,

788,

535

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

2012

2011

2010

2012

2011

2010

Indi

vidu

al im

pair

men

tR

s.Rs

.Rs

.R

s.Rs

.Rs

.Ba

lanc

e at

the

begi

nnin

g44

6,87

5,11

4

381,

378,

703

313,

601,

119

446,

875,

114

381,

378,

703

313,

601,

119

Im

pairm

ent l

oss r

ecog

nise

d28

7,75

6,14

4

84,3

96,4

10

90,7

63,6

91

287,

756,

144

84,3

96,4

10

90,7

63,6

91

Re

vers

al o

f Im

pairm

ent

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

A

mou

nts w

ritte

n of

f(1

14,5

43,1

06)

(18,

861,

564)

-

(1

14,5

43,1

06)

(18,

861,

564)

-

B

alan

ce a

t the

end

585,

560,

807

44

6,87

5,11

4

38

1,37

8,70

3

58

5,56

0,80

7

44

6,87

5,11

4

38

1,37

8,70

3

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

2

27Fi

nanc

ial r

isk m

anag

emen

t (co

ntin

ued)

27C

ash

and

cash

equ

ival

ents

27Li

quid

ity r

isk

GR

OU

PA

s at 3

1st D

ecem

ber

2012

Non

-der

ivat

ive

finan

cial

liab

ilitie

sTr

ade

and

othe

r pay

able

s12

,331

,787

,072

12,3

31,7

87,0

72

12,3

31,7

87,0

72

-

-

-

-

A

mou

nts d

ue to

rela

ted

com

pani

es15

9,57

9,94

1

15

9,57

9,94

1

159,

579,

941

-

-

-

-

Le

ase

cred

itors

72,1

10,4

45

72

,110

,445

32

,655

,555

16

,561

,931

11

,597

,965

11

,294

,993

-

Bank

ove

rdra

ft-

-

-

-

-

-

-

12

,563

,477

,458

12,5

63,4

77,4

58

12,5

24,0

22,5

68

16,5

61,9

31

11,5

97,9

65

11,2

94,9

93

-

CEC

BA

s at 3

1st D

ecem

ber

2012

Non

-der

ivat

ive

finan

cial

liab

ilitie

sTr

ade

and

othe

r pay

able

s10

,022

,553

,967

10,0

22,5

53,9

67

10,0

22,5

53,9

67

-

-

-

-

A

mou

nts d

ue to

rela

ted

com

pani

es(9

7,64

6,80

8)

(9

7,64

6,80

8)

(97,

646,

808)

-

-

-

-

Leas

e cr

edito

rs30

,364

,400

30,3

64,4

00

18,7

40,2

07

6,12

5,42

0

3,24

8,75

6

2,

250,

017

-

Bank

ove

rdra

ft-

-

-

-

-

-

-

9,95

5,27

1,55

9

9,95

5,27

1,55

9

9,

943,

647,

366

6,

125,

420

3,

248,

756

2,25

0,01

7

-

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

227

Fina

ncia

l risk

man

agem

ent (

cont

inue

d)

27M

arke

t risk

27In

tere

st r

ate

risk

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Fixe

d ra

te in

stru

men

tsFi

nanc

ial A

sset

s - L

ong

term

fixe

d de

posit

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

Fi

nanc

ial A

sset

s - S

hort

term

fixe

d de

posit

1,57

2,85

2,40

6

1,

707,

593,

967

1,

491,

086,

629

1,

572,

852,

406

1,

707,

593,

967

1,

491,

086,

629

1,63

8,96

6,70

7

1,

770,

050,

594

1,

558,

883,

339

1,

638,

966,

707

1,

770,

050,

594

1,

558,

883,

339

28C

apita

l man

agem

ent

01) t

o sa

fegu

arde

d th

e G

roup

abi

lity

to c

ontin

ue a

s a g

oing

con

cern

, so

that

it c

an c

ontin

ue to

pro

vide

retu

rns f

or sh

areh

olde

rs a

nd b

enef

its fo

r oth

er st

akeh

olde

rs

02) t

o pr

ovid

e an

ade

quat

e re

turn

to sh

areh

olde

rs b

y pr

icin

g pr

oduc

ts co

mm

ensu

rate

ly w

ith th

e le

vel o

f risk

; and

The

Gro

up’s

net

deb

t to

adju

sted

equi

ty ra

tio a

t the

repo

rting

dat

e w

as a

s fol

low

s.

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Tota

l lia

bilit

ies

13,1

81,1

35,7

96

11,3

45,8

66,9

77

3,93

6,72

1,55

7

10,5

64,8

77,2

08

8,87

0,33

5,97

1

3,93

6,72

1,55

7

Le

ss: c

ash

and

cash

equ

ival

ents

(534

,761

,471

)

(6

15,2

08,7

70)

(327

,792

,660

)

(464

,311

,326

)

(5

28,7

77,6

53)

(327

,792

,660

)

Net

deb

t12

,646

,374

,325

10

,730

,658

,207

3,

608,

928,

897

10

,100

,565

,882

8,

341,

558,

318

3,

608,

928,

897

Tota

l equ

ity3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

A

djus

ted

equi

ty3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

Net

deb

t to

adju

sted

equi

ty ra

tio a

t 31s

t Dec

embe

r3.

49

3.29

1.

17

2.

79

3

1.

17

Cre

dit r

isk (c

ontin

ued)

The

Gro

up's

expo

sure

tocr

edit

risk

isin

fluen

ced

mai

nly

byth

ein

divi

dual

char

acte

ristic

sofe

ach

custo

mer

.How

ever

,man

agem

enta

lsoco

nsid

erst

hede

mog

raph

icso

fthe

Gro

up’s

custo

mer

base

,ast

hese

fact

orsm

ayha

ve a

n in

fluen

ce o

n cr

edit

risk.

Dur

ing

2012

the

maj

ority

of t

he G

roup

’s re

venu

e w

as a

ttrib

utab

le to

sale

s tra

nsac

tions

with

Uva

, Ce

ntra

l and

Nor

th C

entra

l pro

vinc

ial g

eogr

aphi

cal r

egio

ns .

The

Gro

up h

eld

cash

and

cas

h eq

uiva

lent

s of R

s. 53

4,76

1,47

1 at

31s

t Dec

embe

r 201

2 (2

011:

Rs.

565,

852,

867)

, whi

ch re

pres

ents

its m

axim

um c

redi

t exp

osur

e on

thes

e as

sets.

The

cas

h an

d ca

sh e

quiv

alen

ts ar

e he

ld

with

ban

k an

d fin

anci

al in

stitu

tion

coun

terp

artie

s.

GR

OU

P

CEC

B

GR

OU

PC

ECB

Impa

irm

ent l

osse

sTh

e ag

ing

of tr

ade

debt

ors a

t the

repo

rting

dat

e th

at w

ere

not i

mpa

ired

was

as f

ollo

ws.

Cre

dit r

isk (c

ontin

ued)

The

note

pres

ents

info

rmat

ion

abou

tthe

Gro

up's

expo

sure

toea

chof

the

abov

eris

ks,t

heG

roup

'sris

km

anag

emen

tobj

ectiv

es,p

olic

iesa

ndpr

oces

sesf

orm

easu

ring

and

man

agin

gris

k,an

dth

eG

roup

'sm

anag

emen

tof

capi

tal.

The

Boar

dof

Dire

ctor

sha

sov

eral

lre

spon

sibili

tyfo

rth

ees

tabl

ishm

enta

ndov

ersig

htof

the

Gro

up’s

risk

man

agem

ent

fram

ewor

k.Th

eBo

ard

has

esta

blish

edth

eA

udit

and

Man

agem

entC

omm

ittee

,whi

chis

resp

onsib

le fo

r dev

elop

ing

and

mon

itorin

g th

e G

roup

’s ri

sk m

anag

emen

t pol

icie

s. Th

e co

mm

ittee

repo

rts re

gula

rly to

the

Boar

d of

Dire

ctor

s on

its a

ctiv

ities

.

The

Gro

up’s

risk

man

agem

entp

olic

iesa

rees

tabl

ished

toid

entif

yan

dan

alys

eth

eris

ksfa

ced

byth

eG

roup

,to

seta

ppro

pria

teris

klim

itsan

dco

ntro

ls,an

dto

mon

itorr

isksa

ndad

here

nce

tolim

its.R

iskm

anag

emen

tpo

licie

sand

syste

msa

rere

view

edre

gula

rlyto

refle

ctch

ange

sin

mar

ketc

ondi

tions

and

the

Gro

up’s

activ

ities

.The

Gro

up,t

hrou

ghits

train

ing

and

man

agem

ents

tand

ards

and

proc

edur

es,a

imst

ode

velo

pa

disc

iplin

edan

d co

nstru

ctiv

e co

ntro

l env

ironm

ent i

n w

hich

all

empl

oyee

s und

ersta

nd th

eir r

oles

and

obl

igat

ions

.

The

Aud

itan

dM

anag

emen

tCom

mitt

eeov

erse

esho

wm

anag

emen

tmon

itors

com

plia

nce

with

the

Gro

up’s

risk

man

agem

entp

olic

iesa

ndpr

oced

ures

,and

revi

ewst

head

equa

cyof

the

risk

man

agem

entf

ram

ewor

kin

rela

tion

toth

eris

ksfa

ced

byth

eG

roup

.The

Aud

itan

dM

anag

emen

tCom

mitt

eeis

assis

ted

inits

over

sight

role

byIn

tern

alA

udit.

Inte

rnal

Aud

itun

derta

kes

both

regu

lar

and

adho

cre

view

sofr

iskm

anag

emen

tco

ntro

ls an

d pr

oced

ures

, the

resu

lts o

f whi

ch a

re re

porte

d to

the

Aud

it an

d M

anag

emen

t Com

mitt

ee.

Cred

itris

kis

the

risk

offin

anci

allo

ssto

the

Gro

upif

acu

stom

eror

coun

terp

arty

toa

finan

cial

instr

umen

tfai

lsto

mee

tits

cont

ract

ualo

blig

atio

ns,a

ndar

isesp

rinci

pally

from

the

Gro

up’s

rece

ivab

lesf

rom

custo

mer

san

d in

vestm

ent s

ecur

ities

.

Cre

dit r

isk

Liqu

idity

risk

is th

e ris

k th

at th

e G

roup

will

enc

ount

er d

iffic

ulty

in m

eetin

g th

e ob

ligat

ions

ass

ocia

ted

with

its f

inan

cial

liab

ilitie

s tha

t are

settl

ed b

y de

liver

ing

cash

or a

noth

er fi

nanc

ial a

sset

. The

Gro

up’s

app

roac

h to

The

follo

win

g ar

e th

e co

ntra

ctua

l mat

uriti

es o

f fin

anci

al li

abili

ties,

incl

udin

g es

timat

ed in

tere

st pa

ymen

ts an

d ex

clud

ing

the

impa

ct o

f net

ting

agre

emen

ts.

Expo

sure

to c

redi

t risk

00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

03-

04 Y

ears

M

ore

than

4

year

s

CEC

B

Cre

dit r

isk (c

ontin

ued)

The

carr

ying

am

ount

of f

inan

cial

ass

ets r

epre

sent

s the

max

imum

cre

dit e

xpos

ure.

The

max

imum

exp

osur

e to

cre

dit r

isk a

t the

repo

rting

dat

e w

as a

s fol

low

s

The

max

imum

exp

osur

e to

cre

dit r

isk fo

r loa

ns a

nd re

ceiv

able

s at r

epor

ting

date

by

geog

raph

ic re

gion

was

: 00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

Car

ryin

g am

ount

Con

trac

tual

cas

h flo

ws

Mar

ket r

isk is

the

risk

that

cha

nges

in m

arke

t pric

es, s

uch

as in

tere

st ra

tes a

nd e

quity

pric

es w

ill a

ffect

the

Gro

up’s

inco

me

or th

e va

lue

of it

s hol

ding

s of f

inan

cial

instr

umen

ts. T

he o

bjec

tive

of m

arke

t risk

m

anag

emen

t is t

o m

anag

e an

d co

ntro

l mar

ket r

isk e

xpos

ures

with

in a

ccep

tabl

e pa

ram

eter

s, w

hile

opt

imisi

ng th

e re

turn

.

GR

OU

P

Furth

er, t

he B

oard

seek

s to

mai

ntai

n a

bala

nce

betw

een

high

er ta

rget

ed re

turn

s tha

t mig

ht b

e po

ssib

le w

ith h

ighe

r lev

el o

f bor

row

ing,

and

the

adva

ntag

es a

nd se

curit

y af

ford

ed b

y th

e str

ong

capi

tal p

ositi

on o

f the

gr

oup.

Gro

upC

ompa

ny

At t

he re

porti

ng d

ate

the

inte

rest

rate

pro

file

of th

e gr

oup's

inte

rest

- bea

ring

finan

cial

instr

umen

ts w

as:

Gro

upC

ompa

ny

The

Boar

d’s p

olic

y is

to m

aint

ain

a str

ong

capi

tal b

ase

so a

s to

mai

ntai

n in

vesto

r, cr

edito

r and

mar

ket c

onfid

ence

and

to su

stain

futu

re d

evel

opm

ent o

f the

bus

ines

s. Ca

pita

l con

sists

of o

rdin

ary

shar

es, r

etai

ned

earn

ings

and

non

-con

trolli

ng in

tere

sts o

f the

Gro

up. T

he B

oard

of D

irect

ors m

onito

rs th

e re

turn

on

capi

tal a

s wel

l as t

he le

vel o

f div

iden

ds to

ord

inar

y sh

areh

olde

rs.

The

Gro

up's

mai

n ob

ject

ive

is w

hen

man

agin

g ca

pita

l are

:

03-

04 Y

ears

M

ore

than

4 y

ears

The

gros

s inf

low

s/(ou

tflow

s) d

isclo

sed

in th

e pr

evio

us ta

ble

repr

esen

t the

con

tract

ual u

ndisc

ount

ed c

ash

flow

s rel

atin

g to

fina

ncia

l lia

bilit

ies h

eld

for r

isk m

anag

emen

t pur

pose

s and

whi

ch a

re u

sual

ly n

ot c

lose

d ou

t pr

ior t

o co

ntra

ctua

l mat

urity

.

Carr

ying

am

ount

Cont

ract

ual c

ash

flow

s

24

Page | 33

CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)

FOR

TH

E Y

EAR

EN

DED

31S

T D

ECEM

BER

201

2

27Fi

nanc

ial r

isk m

anag

emen

tov

ervi

ewTh

e gr

oup

has e

xpos

ure

to th

e fo

llow

ing

risk

arisi

ng fr

om fi

nanc

ial i

nstru

men

tsCr

edit

risk

Liqu

idity

risk

Mar

ket r

isk

Risk

man

agem

ent F

ram

ewor

k

27 CEN

TRA

L EN

GIN

EER

ING

CO

NSU

LTA

NC

Y B

UR

EAU

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (C

ON

TIN

UED

)FO

R T

HE

YEA

R E

ND

ED 3

1ST

DEC

EMB

ER 2

012

27Fi

nanc

ial r

isk m

anag

emen

t (co

ntin

ued)

27

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Inve

stmen

t in

Fixe

d D

epos

it (L

ong

term

)66

,114

,301

62

,456

,627

67

,796

,710

66

,114

,301

62

,456

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67

,796

,710

Inve

stmen

t in

Fixe

d D

epos

it (S

hort

term

)1,

572,

852,

406

1,70

7,59

3,96

7

1,49

1,08

6,62

9

1,57

2,85

2,40

6

1,70

7,59

3,96

7

1,49

1,08

6,62

9

In

vestm

ent i

n Sh

ares

2,00

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0

2,

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000

2,00

0,00

0

2,00

0,00

0

2,

000,

000

2,

000,

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Inve

stmen

t in

subs

idia

ry (U

nquo

ted)

-

-

-

20

20

-

Tr

ade

and

Oth

er R

ecei

vabl

es10

,744

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,138

9,

277,

200,

225

2,

549,

702,

106

8,

571,

483,

325

6,

908,

203,

554

2,

549,

702,

106

Cash

and

Cas

h Eq

uiva

lent

s53

4,76

1,47

1

615,

208,

770

327,

792,

660

464,

311,

326

528,

777,

653

327,

792,

660

12,9

20,6

96,3

16

11,6

64,4

59,5

89

4,43

8,37

8,10

5

10,6

76,7

61,3

78

9,20

9,03

1,82

1

4,43

8,37

8,10

5

2,38

8,66

3,37

1

-

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Bath

thar

amul

la(1

15,6

79,6

51.7

8)

51

2,13

4,69

5

532,

061,

244

137,

110,

747

396,

455,

043

404,

646,

948

137,

110,

747

M

ahar

agam

a12

7,41

4,29

5.83

259,

066,

494

20

9,78

1,10

2

43

,744

,667

14

3,38

6,84

2

82

,366

,806

43

,744

,667

Gam

paha

314,

678,

135

38

4,32

8,83

0

10

5,13

6,85

1

19

8,99

8,48

3

25

6,91

4,53

5

10

5,13

6,85

1

Jaw

atht

ha14

8,51

7,84

9.08

472,

993,

879

50

5,26

1,70

5

90

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,322

35

7,31

4,22

7

25

0,43

3,11

4

90

,987

,322

Am

para

84

,280

,424

.21

66

8,32

2,78

3

731,

985,

534

219,

120,

376

552,

643,

131

477,

156,

943

219,

120,

376

M

onar

agal

a5,

959,

539.

33

1,57

0,64

5,74

0

-

-

1,

454,

966,

088

-

-

Uva

875,

467,

540

1,

505,

329,

690

58

5,36

2,63

8

75

9,78

7,88

8

1,

250,

501,

098

58

5,36

2,63

8

Saba

raga

muw

a35

5,17

4,07

0

319,

616,

319

135,

890,

853

239,

494,

418

192,

202,

024

135,

890,

853

So

uthe

rn37

7,65

3,33

9

479,

569,

036

187,

960,

973

261,

973,

687

352,

154,

740

187,

960,

973

Ce

ntra

l1,

186,

998,

086

833,

195,

778

293,

589,

962

1,07

1,31

8,43

4

705,

781,

482

293,

589,

962

N

orth

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tral

1,06

4,06

9,51

0

85

0,84

0,48

6

72

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83

2,71

0,20

7

72

3,42

6,19

0

72

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Kan

thal

e29

6,82

2,10

9

-

-

181,

142,

457

-

-

Ja

ffna

260,

951,

971

41

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,679

-

14

5,27

2,31

9

41

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-

Kat

ubed

dha

285,

101,

035

32

1,65

3,14

4

10

8,83

2,93

3

16

9,42

1,38

3

19

4,23

8,84

8

10

8,83

2,93

3

Dig

ana

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

28,3

06,6

58

12,4

39,6

33

13,6

84,8

82

Co

nsul

tanc

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4,70

4,04

8

513,

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249,

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349,

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258,

432,

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249,

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In

tern

atio

nal

179,

701,

617

18

7,38

7,56

2

79

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64

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59

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79

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d O

ffice

263,

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119

20

2,27

2,99

5

66

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14

8,23

6,46

7

74

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66

,740

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9,43

6,70

7,82

4

7,

630,

245,

860

2,

388,

663,

371

7,

354,

474,

092

5,

336,

788,

535

2,

388,

663,

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CEN

TRA

L EN

GIN

EER

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CO

NSU

LTA

NC

Y B

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NO

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TO T

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FIN

AN

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L ST

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UED

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FOR

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DED

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201

227

Fina

ncia

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man

agem

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cont

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d)27

GR

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ross

Impa

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ent

Gro

ssIm

pair

men

t G

ross

Im

pair

men

t20

1220

1220

1120

1120

1020

10R

s.R

s.R

s.R

s.R

s.R

s.Cu

rren

t bal

ance

(no

due)

00-0

1 Y

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7,70

0,51

2,71

9

-

6,

951,

842,

058

-

1,

811,

317,

592

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01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

58

5,56

0,80

7

33

2,86

0,48

3

(4

46,8

75,1

14)

125,

426,

020

(381

,378

,703

)

9,43

6,70

7,82

4

58

5,56

0,80

7

7,

630,

245,

860

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

CEC

B G

ross

Im

pair

men

t G

ross

Im

pair

men

t G

ross

Im

pair

men

t 20

1220

1220

1120

1120

1020

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s.R

s.R

s.R

s.R

s.R

s.Cu

rren

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(no

due)

00-0

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5,61

8,27

8,98

7

-

4,

658,

384,

733

-

1,

811,

317,

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-

01-0

2 Y

ears

998,

816,

300

-

26

2,00

1,74

5

-

24

1,05

0,65

5

-

02-0

3 Y

ears

141,

407,

504

-

35

,237

,565

-

11

5,62

0,35

4

-

03-0

4 Y

ears

36,2

26,7

87

-

48,3

04,0

08

-

95,2

48,7

50

-

04

& A

bove

559,

744,

515

(5

85,5

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07)

332,

860,

483

(446

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)

12

5,42

6,02

0

(3

81,3

78,7

03)

7,

354,

474,

092

(585

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)

5,

336,

788,

535

(4

46,8

75,1

14)

2,38

8,66

3,37

1

(381

,378

,703

)

2012

2011

2010

2012

2011

2010

Indi

vidu

al im

pair

men

tR

s.Rs

.Rs

.R

s.Rs

.Rs

.Ba

lanc

e at

the

begi

nnin

g44

6,87

5,11

4

381,

378,

703

313,

601,

119

446,

875,

114

381,

378,

703

313,

601,

119

Im

pairm

ent l

oss r

ecog

nise

d28

7,75

6,14

4

84,3

96,4

10

90,7

63,6

91

287,

756,

144

84,3

96,4

10

90,7

63,6

91

Re

vers

al o

f Im

pairm

ent

(34,

527,

346)

(3

8,43

5)

(22,

986,

107)

(34,

527,

346)

(3

8,43

5)

(22,

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107)

A

mou

nts w

ritte

n of

f(1

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(18,

861,

564)

-

(1

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(18,

861,

564)

-

B

alan

ce a

t the

end

585,

560,

807

44

6,87

5,11

4

38

1,37

8,70

3

58

5,56

0,80

7

44

6,87

5,11

4

38

1,37

8,70

3

CEN

TRA

L EN

GIN

EER

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CO

NSU

LTA

NC

Y B

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EAU

NO

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TO T

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UED

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FOR

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201

2

27Fi

nanc

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isk m

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t (co

ntin

ued)

27C

ash

and

cash

equ

ival

ents

27Li

quid

ity r

isk

GR

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s at 3

1st D

ecem

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2012

Non

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ivat

ive

finan

cial

liab

ilitie

sTr

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and

othe

r pay

able

s12

,331

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,072

12,3

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72

12,3

31,7

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72

-

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-

A

mou

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ue to

rela

ted

com

pani

es15

9,57

9,94

1

15

9,57

9,94

1

159,

579,

941

-

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ase

cred

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72,1

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72

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32

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16

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11

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-

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ove

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ft-

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-

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-

-

12

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12,5

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77,4

58

12,5

24,0

22,5

68

16,5

61,9

31

11,5

97,9

65

11,2

94,9

93

-

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s at 3

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Non

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finan

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liab

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sTr

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and

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s10

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10,0

22,5

53,9

67

10,0

22,5

53,9

67

-

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-

-

A

mou

nts d

ue to

rela

ted

com

pani

es(9

7,64

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(9

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(97,

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-

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30,3

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-

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9,95

5,27

1,55

9

9,95

5,27

1,55

9

9,

943,

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6,

125,

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3,

248,

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2,25

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7

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227

Fina

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l risk

man

agem

ent (

cont

inue

d)

27M

arke

t risk

27In

tere

st r

ate

risk

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Fixe

d ra

te in

stru

men

tsFi

nanc

ial A

sset

s - L

ong

term

fixe

d de

posit

66,1

14,3

01

62,4

56,6

27

67,7

96,7

10

66,1

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01

62,4

56,6

27

67,7

96,7

10

Fi

nanc

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sset

s - S

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term

fixe

d de

posit

1,57

2,85

2,40

6

1,

707,

593,

967

1,

491,

086,

629

1,

572,

852,

406

1,

707,

593,

967

1,

491,

086,

629

1,63

8,96

6,70

7

1,

770,

050,

594

1,

558,

883,

339

1,

638,

966,

707

1,

770,

050,

594

1,

558,

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28C

apita

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agem

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01) t

o sa

fegu

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d th

e G

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abi

lity

to c

ontin

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s a g

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con

cern

, so

that

it c

an c

ontin

ue to

pro

vide

retu

rns f

or sh

areh

olde

rs a

nd b

enef

its fo

r oth

er st

akeh

olde

rs

02) t

o pr

ovid

e an

ade

quat

e re

turn

to sh

areh

olde

rs b

y pr

icin

g pr

oduc

ts co

mm

ensu

rate

ly w

ith th

e le

vel o

f risk

; and

The

Gro

up’s

net

deb

t to

adju

sted

equi

ty ra

tio a

t the

repo

rting

dat

e w

as a

s fol

low

s.

2012

2011

2010

2012

2011

2010

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Tota

l lia

bilit

ies

13,1

81,1

35,7

96

11,3

45,8

66,9

77

3,93

6,72

1,55

7

10,5

64,8

77,2

08

8,87

0,33

5,97

1

3,93

6,72

1,55

7

Le

ss: c

ash

and

cash

equ

ival

ents

(534

,761

,471

)

(6

15,2

08,7

70)

(327

,792

,660

)

(464

,311

,326

)

(5

28,7

77,6

53)

(327

,792

,660

)

Net

deb

t12

,646

,374

,325

10

,730

,658

,207

3,

608,

928,

897

10

,100

,565

,882

8,

341,

558,

318

3,

608,

928,

897

Tota

l equ

ity3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

A

djus

ted

equi

ty3,

624,

631,

054

3,26

1,01

6,77

7

3,09

4,25

7,89

0

3,61

4,81

9,14

6

3,25

9,09

8,07

5

3,09

4,25

7,89

0

Net

deb

t to

adju

sted

equi

ty ra

tio a

t 31s

t Dec

embe

r3.

49

3.29

1.

17

2.

79

3

1.

17

Cre

dit r

isk (c

ontin

ued)

The

Gro

up's

expo

sure

tocr

edit

risk

isin

fluen

ced

mai

nly

byth

ein

divi

dual

char

acte

ristic

sofe

ach

custo

mer

.How

ever

,man

agem

enta

lsoco

nsid

erst

hede

mog

raph

icso

fthe

Gro

up’s

custo

mer

base

,ast

hese

fact

orsm

ayha

ve a

n in

fluen

ce o

n cr

edit

risk.

Dur

ing

2012

the

maj

ority

of t

he G

roup

’s re

venu

e w

as a

ttrib

utab

le to

sale

s tra

nsac

tions

with

Uva

, Ce

ntra

l and

Nor

th C

entra

l pro

vinc

ial g

eogr

aphi

cal r

egio

ns .

The

Gro

up h

eld

cash

and

cas

h eq

uiva

lent

s of R

s. 53

4,76

1,47

1 at

31s

t Dec

embe

r 201

2 (2

011:

Rs.

565,

852,

867)

, whi

ch re

pres

ents

its m

axim

um c

redi

t exp

osur

e on

thes

e as

sets.

The

cas

h an

d ca

sh e

quiv

alen

ts ar

e he

ld

with

ban

k an

d fin

anci

al in

stitu

tion

coun

terp

artie

s.

GR

OU

P

CEC

B

GR

OU

PC

ECB

Impa

irm

ent l

osse

sTh

e ag

ing

of tr

ade

debt

ors a

t the

repo

rting

dat

e th

at w

ere

not i

mpa

ired

was

as f

ollo

ws.

Cre

dit r

isk (c

ontin

ued)

The

note

pres

ents

info

rmat

ion

abou

tthe

Gro

up's

expo

sure

toea

chof

the

abov

eris

ks,t

heG

roup

'sris

km

anag

emen

tobj

ectiv

es,p

olic

iesa

ndpr

oces

sesf

orm

easu

ring

and

man

agin

gris

k,an

dth

eG

roup

'sm

anag

emen

tof

capi

tal.

The

Boar

dof

Dire

ctor

sha

sov

eral

lre

spon

sibili

tyfo

rth

ees

tabl

ishm

enta

ndov

ersig

htof

the

Gro

up’s

risk

man

agem

ent

fram

ewor

k.Th

eBo

ard

has

esta

blish

edth

eA

udit

and

Man

agem

entC

omm

ittee

,whi

chis

resp

onsib

le fo

r dev

elop

ing

and

mon

itorin

g th

e G

roup

’s ri

sk m

anag

emen

t pol

icie

s. Th

e co

mm

ittee

repo

rts re

gula

rly to

the

Boar

d of

Dire

ctor

s on

its a

ctiv

ities

.

The

Gro

up’s

risk

man

agem

entp

olic

iesa

rees

tabl

ished

toid

entif

yan

dan

alys

eth

eris

ksfa

ced

byth

eG

roup

,to

seta

ppro

pria

teris

klim

itsan

dco

ntro

ls,an

dto

mon

itorr

isksa

ndad

here

nce

tolim

its.R

iskm

anag

emen

tpo

licie

sand

syste

msa

rere

view

edre

gula

rlyto

refle

ctch

ange

sin

mar

ketc

ondi

tions

and

the

Gro

up’s

activ

ities

.The

Gro

up,t

hrou

ghits

train

ing

and

man

agem

ents

tand

ards

and

proc

edur

es,a

imst

ode

velo

pa

disc

iplin

edan

d co

nstru

ctiv

e co

ntro

l env

ironm

ent i

n w

hich

all

empl

oyee

s und

ersta

nd th

eir r

oles

and

obl

igat

ions

.

The

Aud

itan

dM

anag

emen

tCom

mitt

eeov

erse

esho

wm

anag

emen

tmon

itors

com

plia

nce

with

the

Gro

up’s

risk

man

agem

entp

olic

iesa

ndpr

oced

ures

,and

revi

ewst

head

equa

cyof

the

risk

man

agem

entf

ram

ewor

kin

rela

tion

toth

eris

ksfa

ced

byth

eG

roup

.The

Aud

itan

dM

anag

emen

tCom

mitt

eeis

assis

ted

inits

over

sight

role

byIn

tern

alA

udit.

Inte

rnal

Aud

itun

derta

kes

both

regu

lar

and

adho

cre

view

sofr

iskm

anag

emen

tco

ntro

ls an

d pr

oced

ures

, the

resu

lts o

f whi

ch a

re re

porte

d to

the

Aud

it an

d M

anag

emen

t Com

mitt

ee.

Cred

itris

kis

the

risk

offin

anci

allo

ssto

the

Gro

upif

acu

stom

eror

coun

terp

arty

toa

finan

cial

instr

umen

tfai

lsto

mee

tits

cont

ract

ualo

blig

atio

ns,a

ndar

isesp

rinci

pally

from

the

Gro

up’s

rece

ivab

lesf

rom

custo

mer

san

d in

vestm

ent s

ecur

ities

.

Cre

dit r

isk

Liqu

idity

risk

is th

e ris

k th

at th

e G

roup

will

enc

ount

er d

iffic

ulty

in m

eetin

g th

e ob

ligat

ions

ass

ocia

ted

with

its f

inan

cial

liab

ilitie

s tha

t are

settl

ed b

y de

liver

ing

cash

or a

noth

er fi

nanc

ial a

sset

. The

Gro

up’s

app

roac

h to

The

follo

win

g ar

e th

e co

ntra

ctua

l mat

uriti

es o

f fin

anci

al li

abili

ties,

incl

udin

g es

timat

ed in

tere

st pa

ymen

ts an

d ex

clud

ing

the

impa

ct o

f net

ting

agre

emen

ts.

Expo

sure

to c

redi

t risk

00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

03-

04 Y

ears

M

ore

than

4

year

s

CEC

B

Cre

dit r

isk (c

ontin

ued)

The

carr

ying

am

ount

of f

inan

cial

ass

ets r

epre

sent

s the

max

imum

cre

dit e

xpos

ure.

The

max

imum

exp

osur

e to

cre

dit r

isk a

t the

repo

rting

dat

e w

as a

s fol

low

s

The

max

imum

exp

osur

e to

cre

dit r

isk fo

r loa

ns a

nd re

ceiv

able

s at r

epor

ting

date

by

geog

raph

ic re

gion

was

: 00-0

1 Y

ear

01-0

2 Y

ears

02-0

3 Y

ears

Car

ryin

g am

ount

Con

trac

tual

cas

h flo

ws

Mar

ket r

isk is

the

risk

that

cha

nges

in m

arke

t pric

es, s

uch

as in

tere

st ra

tes a

nd e

quity

pric

es w

ill a

ffect

the

Gro

up’s

inco

me

or th

e va

lue

of it

s hol

ding

s of f

inan

cial

instr

umen

ts. T

he o

bjec

tive

of m

arke

t risk

m

anag

emen

t is t

o m

anag

e an

d co

ntro

l mar

ket r

isk e

xpos

ures

with

in a

ccep

tabl

e pa

ram

eter

s, w

hile

opt

imisi

ng th

e re

turn

.

GR

OU

P

Furth

er, t

he B

oard

seek

s to

mai

ntai

n a

bala

nce

betw

een

high

er ta

rget

ed re

turn

s tha

t mig

ht b

e po

ssib

le w

ith h

ighe

r lev

el o

f bor

row

ing,

and

the

adva

ntag

es a

nd se

curit

y af

ford

ed b

y th

e str

ong

capi

tal p

ositi

on o

f the

gr

oup.

Gro

upC

ompa

ny

At t

he re

porti

ng d

ate

the

inte

rest

rate

pro

file

of th

e gr

oup's

inte

rest

- bea

ring

finan

cial

instr

umen

ts w

as:

Gro

upC

ompa

ny

The

Boar

d’s p

olic

y is

to m

aint

ain

a str

ong

capi

tal b

ase

so a

s to

mai

ntai

n in

vesto

r, cr

edito

r and

mar

ket c

onfid

ence

and

to su

stain

futu

re d

evel

opm

ent o

f the

bus

ines

s. Ca

pita

l con

sists

of o

rdin

ary

shar

es, r

etai

ned

earn

ings

and

non

-con

trolli

ng in

tere

sts o

f the

Gro

up. T

he B

oard

of D

irect

ors m

onito

rs th

e re

turn

on

capi

tal a

s wel

l as t

he le

vel o

f div

iden

ds to

ord

inar

y sh

areh

olde

rs.

The

Gro

up's

mai

n ob

ject

ive

is w

hen

man

agin

g ca

pita

l are

:

03-

04 Y

ears

M

ore

than

4 y

ears

The

gros

s inf

low

s/(ou

tflow

s) d

isclo

sed

in th

e pr

evio

us ta

ble

repr

esen

t the

con

tract

ual u

ndisc

ount

ed c

ash

flow

s rel

atin

g to

fina

ncia

l lia

bilit

ies h

eld

for r

isk m

anag

emen

t pur

pose

s and

whi

ch a

re u

sual

ly n

ot c

lose

d ou

t pr

ior t

o co

ntra

ctua

l mat

urity

.

Carr

ying

am

ount

Cont

ract

ual c

ash

flow

s

24

Page | 34

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S (C

ON

TIN

UE

D)

FOR

TH

E Y

EA

R E

ND

ED

31S

T D

EC

EM

BE

R 2

012

28E

xpla

natio

n of

tran

sitio

n to

SL

FRS

and

LK

AS

CE

CB

Not

e

As p

er S

LA

Ss R

e-M

easu

rem

ent

due

to tr

ansi

tion

to S

LFR

s/L

KA

Ss

Re-

Cla

ssifi

catio

n an

err

or c

orre

ctio

n

As p

er S

LFR

Ss/

LK

AS

Rs.

Rs.

Rs.

Rs.

Rev

enue

A8,

571,

151,

405

(2

1,07

6,34

2)

10

1,78

5

8,55

0,17

6,84

8

Cos

t of S

ales

(7,6

26,5

12,7

21)

-

-

(7

,626

,512

,721

)

Gro

ss P

rofit

944,

638,

684

923,

664,

127

Oth

er In

com

eB

401,

376,

679

3,38

8,39

4

(1

14,9

39,2

72)

289,

825,

801

Adm

inis

tratio

n E

xpen

ses

C(8

93,9

30,6

30)

(2

7,56

6,58

9)

10

5,42

6

(921

,391

,793

)

Selli

ng a

nd M

arke

ting

Expe

nses

(84,

396,

410)

-

-

(8

4,39

6,41

0)

R

esul

ts fr

om o

pera

ting

activ

ities

367,

688,

323

207,

701,

724

Fina

nce

Inco

me

-

-

114,

939,

272

11

4,93

9,27

2

Fi

nanc

e co

stD

(14,

187,

675)

(422

,182

)

-

(14,

609,

857)

Net

Fin

ance

Inco

me

(14,

187,

675)

100,

329,

415

Prof

it B

efor

e In

com

e T

ax35

3,50

0,64

8

30

8,03

1,13

9

Inco

me

Tax

Expe

nse

(161

,905

,298

)

-

-

(1

61,9

05,2

98)

Prof

it/(L

oss)

for

the

Yea

r19

1,59

5,35

0

14

6,12

5,84

1

29

Page | 35

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S (C

ON

TIN

UE

D)

FOR

TH

E Y

EA

R E

ND

ED

31S

T D

EC

EM

BE

R 2

012

28E

xpla

natio

n of

tran

sitio

n to

SL

FRS

and

LK

AS

GO

RU

P

Not

e

As p

er S

LA

Ss R

e-M

easu

rem

ent

due

to tr

ansi

tion

to

SLFR

s/L

KA

Ss

Re-

Cla

ssifi

catio

n an

err

or c

orre

ctio

n

As p

er S

LFR

Ss/

LK

AS

Rs.

Rs.

Rs.

Rs.

Rev

enue

A8,

571,

151,

405

(2

1,07

6,34

2)

101,

785

8,

550,

176,

848

Cos

t of S

ales

(7,5

92,9

05,3

77)

(7

,592

,905

,377

)

Gro

ss P

rofit

978,

246,

028

957,

271,

471

Oth

er In

com

eB

403,

087,

530

3,38

8,39

4

(1

14,9

75,7

54)

291,

500,

170

A

dmin

istra

tion

Exp

ense

sC

(924

,314

,673

)

(2

7,57

7,77

7)

105,

426

(9

51,7

87,0

24)

Selli

ng a

nd M

arke

ting

Expe

nses

(84,

396,

410)

(8

4,39

6,41

0)

Res

ults

from

ope

ratin

g ac

tiviti

es37

2,62

2,47

5

21

2,58

8,20

7

Fina

nce

Inco

me

-

-

114,

975,

754

11

4,97

5,75

4

Fina

nce

cost

D(1

5,02

2,52

8)

(422

,182

)

(1

5,44

4,71

0)

Net

Fin

ance

Inco

me

(15,

022,

528)

99

,531

,044

Prof

it B

efor

e In

com

e T

ax35

7,59

9,94

7

31

2,11

9,25

1

Inco

me

Tax

Expe

nse

(164

,074

,708

)

(1

64,0

74,7

08)

Prof

it/(L

oss)

for

the

Yea

r19

3,52

5,23

9

14

8,04

4,54

3

30

Page | 36

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

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ON

TIN

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D)

FOR

TH

E Y

EA

R E

ND

ED

31S

T D

EC

EM

BE

R 2

012

28E

xpla

natio

n of

tran

sitio

n to

SL

FRS

and

LK

AS

CE

CB

Not

eSL

ASs

Re-

Mea

sure

men

tdu

e to

tran

sitio

nto

SL

FRs/

LK

ASs

Re-

Cla

ssifi

catio

n an

err

or

corr

ectio

n

SLFR

SsSL

ASs

Re-

Mea

sure

men

tdu

e to

tr

ansi

tion

to

SLFR

s/L

KA

Ss

Re-

Cla

ssifi

catio

n an

err

or

corr

ectio

n

SLFR

Ss

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Asse

tsNo

n-Cu

rren

t Ass

ets

Prop

erty

, Pla

nt a

nd E

quip

men

tE

386,

659,

295

1,9

75,1

65,4

86

2,36

1,82

4,78

1

692,

181,

546

1,95

0,98

7,29

1 2,

643,

168,

837

Inve

stm

ents

69,7

96,7

10

69,7

96,7

10

64,4

56,6

47

64

,456

,647

To

tal N

on-C

urre

nt A

sset

s45

6,45

6,00

5

2,

431,

621,

491

75

6,63

8,19

3

2,70

7,62

5,48

4

Curr

ent A

sset

sIn

vent

orie

s23

0,77

6,56

2

23

0,77

6,56

1

27

7,23

3,38

8

277,

233,

388

Tr

ade

and

Oth

er R

ecei

vabl

esF

2,62

5,87

6,84

4

(9

0,76

3,69

1)

14

,588

,953

2,

549,

702,

106

7,

005,

454,

635

(

111,

840,

034)

14,5

88,9

53

6,90

8,20

3,55

4

Sh

ort t

erm

Inve

stm

ents

1,49

1,08

6,62

9

1,49

1,08

6,62

9

1,70

7,59

3,96

7

1,

707,

593,

967

Cas

h an

d C

ash

Equi

vale

nts

327,

792,

660

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1st J

anua

ry 2

011

31st D

ecem

ber

2011

31

Page | 37

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1st J

anua

ry 2

011

31st D

ecem

ber

2011

31

Page | 38

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NT

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31

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Page | 39

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ash

and

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h Eq

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ets

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The

acco

untin

gpo

licie

sse

tout

inN

ote

3to

the

Fina

ncia

lSta

tem

ents

have

been

appl

ied

inpr

epar

ing

the

Fina

ncia

lSta

tem

ents

fort

heye

aren

ded

31st

Dec

embe

r201

2,th

eco

mpa

rativ

ein

form

atio

npr

esen

ted

inth

ese

Fina

ncia

lSta

tem

ents

fort

heye

aren

ded

31st

Dec

embe

r201

1an

din

the

prep

arat

ion

ofan

open

ing

SLFR

SSt

atem

ento

fFin

anci

alPo

sitio

nas

at1s

tJan

uary

2011

(the

Gro

up’s

date

of tr

ansi

tion)

.

Inpr

epar

ing

itsop

enin

gSL

FRS

Stat

emen

tofF

inan

cial

Posi

tion,

the

Gro

upha

sad

just

edam

ount

sre

porte

dpr

evio

usly

inFi

nanc

ialS

tate

men

tspr

epar

edin

acco

rdan

cew

ithSr

iLan

kaA

ccou

ntin

gSt

anda

rds/

SLA

Ss(p

revi

ous

GA

AP)

.An

expl

anat

ion

ofho

wth

etra

nsiti

onfro

mSL

ASs

toSL

FRSs

has

affe

cted

the

Gro

up’s

finan

cial

posi

tion

and

finan

cial

perfo

rman

ceis

seto

utin

the

follo

win

gta

bles

and

the

note

s.

As s

tate

d in

Not

e 2.

1 to

the

Fina

ncia

l Sta

tem

ents

, the

se a

re th

e G

roup

’s fi

rst F

inan

cial

Sta

tem

ents

pre

pare

d in

acc

orda

nce

with

SLF

RSs

.

1st J

anua

ry 2

011

31st D

ecem

ber

2011

33

Page | 40

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S (C

ON

TIN

UE

D)

FOR

TH

E Y

EA

R E

ND

ED

31S

T D

EC

EM

BE

R 2

012

28E

xpla

natio

n of

tran

sitio

n to

SL

FRS

and

LK

AS

28.1

Exp

lana

tion

Not

es to

tran

sitio

n

AR

even

ue r

ecog

nitio

n

CEC

BG

OR

UP

31st

Dec

embe

r 201

131

st D

ecem

ber 2

011

Rs.

Rs.

Stat

emen

t of C

ompr

ehen

sive

Inco

me

Rev

enue

(21,

076,

342)

(21,

076,

342)

Adj

ustm

ent b

efor

e In

com

e T

ax(2

1,07

6,34

2)

(2

1,07

6,34

2)

Stat

emen

t of F

inan

cial

Pos

ition

Trad

e an

d O

ther

rece

ivab

le -

Am

ount

due

from

cus

tom

ers

(21,

076,

342)

(21,

076,

342)

Adj

ustm

ent t

o R

etai

ned

Ear

ning

s(2

1,07

6,34

2)

(2

1,07

6,34

2)

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enue

- E

rror

cor

rect

ion

CEC

BG

OR

UP

31st

Dec

embe

r 201

131

st D

ecem

ber 2

011

Rs.

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Stat

emen

t of C

ompr

ehen

sive

Inco

me

Rev

enue

101,

785

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ustm

ent b

efor

e In

com

e T

ax10

1,78

5

10

1,78

5

The

bure

auha

sado

pted

apo

licy

tore

cogn

izin

gre

venu

efr

omva

riatio

n,w

hen

and

only

whe

nth

eva

riatio

nis

prob

able

,i.e

.whe

nth

eva

riatio

nis

appr

oved

byth

ecu

stom

eran

dth

eam

ount

of v

aria

tion

can

be m

easu

red

relia

bly.

CEC

B h

as n

ot re

cogn

ised

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nue

from

con

sulta

ncy

serv

ices

car

ried

out i

n 20

11 a

nd th

e un

reco

gnis

ed a

mou

nts w

as re

pres

ente

d in

am

ount

due

to c

usto

mer

s in

trade

and

oth

er p

ayab

le

35

Page | 41

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S (C

ON

TIN

UE

D)

FOR

TH

E Y

EA

R E

ND

ED

31S

T D

EC

EM

BE

R 2

012

28E

xpla

natio

n of

tran

sitio

n to

SL

FRS

and

LK

AS

28.1

Exp

lana

tion

Not

es to

tran

sitio

n

AR

even

ue r

ecog

nitio

n

CEC

BG

OR

UP

31st

Dec

embe

r 201

131

st D

ecem

ber 2

011

Rs.

Rs.

Stat

emen

t of C

ompr

ehen

sive

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me

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enue

(21,

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(21,

076,

342)

Adj

ustm

ent b

efor

e In

com

e T

ax(2

1,07

6,34

2)

(2

1,07

6,34

2)

Stat

emen

t of F

inan

cial

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ition

Trad

e an

d O

ther

rece

ivab

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Am

ount

due

from

cus

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(21,

076,

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ustm

ent t

o R

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ned

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s(2

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enue

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rror

cor

rect

ion

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BG

OR

UP

31st

Dec

embe

r 201

131

st D

ecem

ber 2

011

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emen

t of C

ompr

ehen

sive

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me

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enue

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785

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ustm

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efor

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com

e T

ax10

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10

1,78

5

The

bure

auha

sado

pted

apo

licy

tore

cogn

izin

gre

venu

efr

omva

riatio

n,w

hen

and

only

whe

nth

eva

riatio

nis

prob

able

,i.e

.whe

nth

eva

riatio

nis

appr

oved

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ecu

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eran

dth

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ount

of v

aria

tion

can

be m

easu

red

relia

bly.

CEC

B h

as n

ot re

cogn

ised

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nue

from

con

sulta

ncy

serv

ices

car

ried

out i

n 20

11 a

nd th

e un

reco

gnis

ed a

mou

nts w

as re

pres

ente

d in

am

ount

due

to c

usto

mer

s in

trade

and

oth

er p

ayab

le

35

Page | 42

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S (C

ON

TIN

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FOR

TH

E Y

EA

R E

ND

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31S

T D

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BE

R 2

012

28E

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natio

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sitio

n to

SL

FRS

and

LK

AS

28.1

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lana

tion

Not

es to

tran

sitio

n

BSt

aff l

oans

and

adv

ance

s

CEC

BG

OR

UP

31st

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embe

r 201

131

st D

ecem

ber 2

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emen

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nce

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me

114,

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114,

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perL

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finan

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fair

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asbe

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cogn

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affc

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edov

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loan

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inte

rest

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ans

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cogn

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usin

gth

eef

fect

ive

inte

rest

rate

met

hod

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sure

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amor

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atem

ento

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er in

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how

ever

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assi

fy it

und

er fi

nanc

e in

com

e fo

r bet

ter p

rese

ntat

ion

36

Page | 43

CE

NT

RA

L E

NG

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CO

NSU

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AN

CY

BU

RE

AU

NO

TE

S T

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FIN

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TA

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S (C

ON

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TH

E Y

EA

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31S

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R 2

012

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lana

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es to

tran

sitio

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dmin

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pens

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ent o

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preh

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st D

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trat

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011

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me

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37

Page | 44

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RA

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sitio

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Pos

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1st J

anua

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011

31st

Dec

embe

r 201

11s

t Jan

uary

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131

st D

ecem

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Impa

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n th

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31st

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Stat

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t of C

ompr

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Inco

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1st J

anua

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011

31st

Dec

embe

r 201

11s

t Jan

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201

131

st D

ecem

ber 2

011

Rs.

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Rs.

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e re

ceiv

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(14,

588,

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(14,

588,

953)

(14,

588,

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(14,

588,

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Trad

e an

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ther

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Am

ount

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-

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tmen

t to

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aine

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arni

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(14,

588,

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588,

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588,

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nanc

e le

ase

GO

RU

P

GO

RU

P

GO

RU

P

CEC

B h

ad re

ceiv

ed a

n am

ount

from

trad

e re

ceiv

able

in th

e ye

ar 2

010

whi

ch w

as p

rovi

ded

for d

oubt

ful d

ebts

in th

e sa

me

year

and

how

ever

the

prov

isio

n ha

d no

t bee

n de

reco

gnis

ed.

Erro

r cor

rect

ed in

yea

r 201

0

Und

er S

LFR

Ss, t

he C

ompa

ny te

st th

e im

pairm

ent f

or T

rade

Rec

eiva

bles

at s

peci

fic a

sset

leve

l.

CEC

B

CEC

B

CEC

B

Follo

win

gth

eex

empt

ions

gran

ted

unde

rSLF

RS

01-F

irstT

ime

Ado

ptio

nof

SriL

anka

Fina

ncia

lRep

ortin

gSt

anda

rdst

hebu

reau

hasc

hang

edits

acco

untin

gpo

licy

onas

sets

and

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ted

to a

pply

opt

iona

l exc

eptio

n to

use

the

reva

luat

ion

as d

eem

ed c

ost u

nder

SLF

RSs

.

38

Page | 45

CE

NT

RA

L E

NG

INE

ER

ING

CO

NSU

LT

AN

CY

BU

RE

AU

NO

TE

S T

O T

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FIN

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CIA

L S

TA

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ME

NT

S (C

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TH

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EA

R E

ND

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Page | 46

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40

Page | 47

Page | 48

Page | 49

Page | 50

Page | 51

Page | 52

Page | 53

Page | 54

Page | 55

Page | 56

Page | 57

Page | 58

Page | 59

Page | 60

CECB - New Head Office Building

Established in 1973 to provide engineering consultancy services. Contribute to major infrastructure development projects. Contributed to projects like, Victoria, Kothmale, Randenigala, Rantembe, Maduruoya, Canyon, Bowathenna, Samanalawewa, Kukule ganga and Kothmale dams.

Self finance from its origin, has operated successfully and contributed to the government

revenues. Skilled ,Experienced and highly motivated workforce ,Over 450 Engineers, Over 50

Architectures and Over 500 Technical officers. Expanded to construction sector (EPC) in 1995.Involved in construction of Building, Roads

Free Trade Zone, Economic Centers, Hospitals, Industrial Parks Etc.

Operation with twelve regional offices located Throughout the country Digana, Anuradhapura, Galle, Rathnapura, Badulla, Kantale, Ampara, Jawatta Battaramulla, Gampaha, Maharagama, Kilinochchi Post-war development partner with government Uthuru Wasanthaya Nagenahira Nawodaya Northern road rehabilitation project Conflict Affected Region Emergency Project (CARE)

Entered into the international market in 2007 Maldives, India, United Kingdom, Tanzania, Ruwanda, East Africa Region etc. Listing best 20 success state own enterprises (SOE) which were shown favorable financial

performance.

Since 2005 CECB has been shown constant growth of turnover and market share. The LMD is a one of pioneer business magazine, which has been the source of current business issues, management ideas and provide information on performance of both state own enterprises and private sector companies. LMD has been listing best 20 success state own enterprises every year based on financial and physical performance. CECB has been listed at 12th positions among the best 20 SOE's for the year ended 2011/12.

1. CECB – At a Glance

Page | 61

NATIONAL AWARD FOR GREEN CONSTRUCTION EXCELLENCE FOR THE YEAR 2013 FOR CONSTRUCTION OF BUILDING WITH EXCELLENT ENVIRONMENT PERFORMANCE FOR CECB HEAD OFFICE – PHASE II

Eng. N. Rupasinghe, the Chairman of Central Engineering Consultancy Bureau receiving the award presented by the Ministry of Construction, Engineering Services, Housing and Common Amenities from H.E President Mahinda Rajapaksa at Sugathadasa Stadium Colombo on 05th December 2013.

CECB WAS AWARDED FOR EXCELLENCE IN ENGINERING SERVICES BY THE INSTITUTION OF ENGINEERS, SRI LANKA Eng. K.L.S.Sahabandu, the General Manager of Central Engineering Consultancy Bureau receiving the award from Hon. Minister of Economic Development Basil Rajapaksa at Cinnamon Grand on 24th September 2013.

2. CECB – Recent Awards

Page | 62

GREEN BUILDING GOLD RATING AWARDED TO THE CECB HEAD OFFICE NEW BUILDING (PHASE II) ‘MAHAWELI WING’ AT COLOMBO 07, BY GREEN BUILDING COUNCIL OF SRI LANKA.

Eng. N. Rupasinghe, the Chairman of Central Engineering Consultancy Bureau receiving the award presented by the Green Building Council of Sri Lanka from Hon. Minister of Economic Development Basil Rajapaksa in the presence of Hon. Minister of Technology, Research and Atomic Energy Patali Champika Ranawaka at BMICH on 04th May 2014.

Certificate of Appreciation Presented to Central Engineering Consultancy Bureau by the Institute for Construction Training Development (ICTAD) for the professional contribution for the 2013 National Excellence Award Winning Project for the Sethsiripaya Stage II Premises .

Page | 63

entral Engineering Consultancy Bureau (CECB) was established on 12th April 1973 to

provide multi-disciplinary engineering consultancy services for water resources

development projects. It is a statutory body established under the State Industrial

Corporations Act No.49 of 1957.

The Bureau was at the forefront of some of the largest development projects in Sri Lanka and

is the premier consultancy organization in Sri Lanka with a wide range of expertise in

different engineering disciplines. CECB served as one of the key institutions in the

implementation of the Mahaweli Project (Cascade development of the largest river in Sri

Lanka). In the implementation of these multi billion Rupee projects, the Bureau was

associated with several international consultants and had developed strong engineering

competence and expertise through these associations. The Bureau was responsible for the

design and supervision of all project related infrastructure (access roads, bridges, buildings

and water supply) associated with the major hydropower and Irrigation projects. Socio

economic aspects (resettlement, community development) and environmental studies were an

integral part of all these major projects.

Since its inception, CECB has grown and expanded to become the largest Engineering

Consultancy establishment in Sri Lanka. Its main area of interest was Engineering

Consultancy which contributes about 80% to its turnover until 1994. However, with the

commencement of Construction Division (EPC Division) a rapid increment of turnover was

observed in the past few years. Presently the contribution to turnover from the EPC has

reached to 95% level and the operations have been expanded up to the level of Consultancy

Division.

C

3. Background of CECB

4. Growth and Expansion

Page | 64

CECB Financial Performance

-2,000 4,000 6,000 8,000

10,000 12,000 14,000

2006 2007 2008 2009 2010 2011 2012

Value LKR Million

Year

Total Construction & Consultancy RevenueProfit before Tax

It is evident that the Bureau is becoming a change agent of the public sector in multi disciplinary Engineering and has also been Branded as a Public Sector organization which has capability and capacity to handle any dicey situation on a fast-track basis on behalf of the Government. In other words it is the only Public Sector Engineering Organization with a strong Human Resource base that consists of multi-disciplinary professionals and Technical staff representing various Engineering disciplines. It should also be noted that our organization is trained to think ‘beyond Engineering’ solutions as an organization, CECB acts as a result oriented team dedicated for the service. The team comprises of two major groups, namely, the technical/engineering staff and non technical Staff. The staff is supported by teams of Para technical, technical, and secretarial staff who has a wide range of experience and skills in their respective fields.

Entry of private , foreign Engineering Consultancy and Construction firms into the Sri

Lankan market.

Withdrawal of certain concessions and preferential facilities earlier accorded to

CECB, has become major threats to the Bureau.

Other factors such as increased overheads, rising costs of site administration and

recently imposed statutory limitations.

Hence, it has become necessary to plan urgently for better performance and higher

productivity in the future years. This plan is an attempt by the senior staff of CECB to

achieve the intended improvement in performance.

5. Future Challenges

Page | 65

It shall be truly beneficial for the country and CECB if the treasury direct its policies towards

the betterment of the local engineering industry without delay in keeping with the Presidents

concept of national productivity.

To keep up with the state of Art new technology, local and foreign specialized training for

the professional staff is absolutely necessary.

To provide a wide range of Engineering Consultancy, Construction and other related services,

CECB has a strong human resource base that consists of multi-disciplinary professional and

technical staff representing various disciplines such as:

Civil Engineering Water Management

Architectural Geo-technical Investigations

Structural Designs Hydro Power

Mechanical Work Electrical Work

Coastal and Marine Engineering Geology

Laboratory Investigations Technical Auditing

Transportation Water Supply and Sewerage

Power Generation Public Health

Information Technology Irrigation

Environmental Engineering

Specialist staff is supported by teams of Para technical, technical and secretarial staff who

have wide experience in their own fields.

7. Human Resources

Page | 66

Building Services Hydro Power and Energy

Hospital Development Power Transmission and Distribution

Architectural Services Water Resource Development

Structural Designs Technical Audit / Dam Safety

Quantity Surveying Electrical & Mechanical Work

Roads and Bridges Land Surveying

Railway Works Geo-technical Investigation & Laboratory Services Port/ Coastal Works Environmental Studies

Airport Development Project Management

Water Supply and Drainage Information Technology (IT)

8. Specialized Areas & Services

Page | 67

8. Specialized8. Specialized8. Special

9. Global and Local presence

Page | 68

Library Building - Maldives

Uwa Wellassa University

The Bureau has been at the forefront of some of the largest

development projects in Sri Lanka and is the premier

consultancy organization in Sri Lanka with a wide range of

expertise in different engineering disciplines. CECB served as

one of the key institutions in the implementation of the

Mahaweli Project (cascade development of the largest river

in Sri Lanka). In the implementation of these multi billion Rupee

projects, the Bureau was associated with several international

consultants and had developed strong engineering competence

and expertise through these associations. The Bureau was responsible for the design and supervision of all project related infrastructure (access roads, bridges, buildings and water supply) associated with the major hydropower and Irrigation projects. Socio economic Aspects (resettlement, Community development) and environmental studies were an integral part of all these major projects.

• Northern Roads A009 AB020 AB032 AB016 AB018 B297 B334 B296

Northern Road Rehabilitation Project

• Project cost: LKR 66000 million

6. History and Scope of CECB

Page | 69

CECB Head OfficeWon ICTAD Green Building Award for 2013

Floor Area: 2750 Sq mCost: LKR 250 million

Project cost: LKR 3,960million

Sethsiripaya Stage II Administrative Complex at BattaramullaWon the Excellence Award in 2013

Floor Area: 42,000 Sq m

Page | 70

Project cost: LKR 3,960million

Sethsiripaya Stage II Administrative Complex at BattaramullaWon the Excellence Award in 2013

Floor Area: 42,000 Sq m

Page | 71

Page | 72

Page | 2

CESL BOARD OF DIRECTORS

Eng. Nihal Rupasinghe Eng. S.S. Ediriweera Eng. G.H. Pathmasiri Eng. K.L.S. Sahabandu

BSc. (Hons), PG Dip. (Hy- dro power) Norway,

C. Eng., MIE (SL), MICE (London), Licd. Surveyor, Managing Director of the CESL.

BSc. Eng MIE (SL), C. Eng. Executive Director of the CESL.

Bsc. Eng, C. Eng, MIE (SL), MICE (Lon), Pg. Dip. (Hydraulics), Pg. Dip. (Cost. Mgt), Director of the CECB

Bsc. Eng. (Hons), PG Dip. (Hyd.), Msc. (Struct. Eng.), C. Eng., MIE (SL), MICE (London), M Cons E (SL), MSSE (SL), Director of the CESL

Eng. M.A.P. Hemachandra Mr. S.M.N.L. Senanayake Eng. G.D.A. Piyathilake F.I.E.D.(SL), M.I.E.E., M.I. Prod.E, Director of the CESL. Bsc.Dip. Mgt.,FCA, He is a

Charted Accountant, of the Tudor V. Perera & Com- pany (Charted Accounts) 103 1/3, De Mel Mawatha, Chanthanam Street, Colom- bo 01, Director of the CESL

Bsc. Eng., PG Dip. (Const. Mgt.), PG Dip. (Norway), C. Eng., MIE (SL), MASCE, Director of the CESL.

Eng. B.W.N Rupasinghe

BSc.Eng., MSc.Eng, PGDip.,(Econ),MA(ECON),MIE(SL),MIEE,M Cons E(SL)Director of the CESL.

Eng. K.L.S. Sahabandu

BSc.Eng.(Hons), MSc.Eng, PGDip.(Hyd). Msc. (Struct. Eng.), C.Eng (Econ),MIE(SL),MICE(London), M Cons E(SL), MSSE (SL), Director of the CESL.

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engineering better sri lanka - cecbcecb.lk/about/pdf/english_opt.pdfbsc., dip. mgt., fca, chartered...

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