samson international plc annual report 2013/14

iSamSon international PlC annual report 2013/14

Evolution of the Company

Samson International Plc is a subsidiary of the DSI Samson Group (Pvt) Ltd. The parent Company was

founded in 1962. DSI Samson Group has an export turnover of more than 1% of the country’s total export

turnover and has a workforce of 8,500 employees. The majority of their factories are located in remote rural

areas. Samson International PLC is one of them.

Samson International Plc started its business on 14th October 1988 at a time the open economic policies

had got firmly established in the country with a great tendency among the business community to commence

export-oriented projects. Accordingly, this Company was intended to produce rubber-based products largely

for export markets.

Samson International Plc now manufactures and exports molded and extruded rubber products such as hot

water bottles, jar sealing rings, rubber mats, rubber floorings, beadings and mud flaps mainly to international

markets. Samson International Plc has 324 employees and the main factory is situated at Bogahagoda, Galle.

Milestones

• 1988–SamsonInternationalLtd.wasincorporatedasaPrivateCompanyon

14th October, 1988

• 1992-Ordinarysharesof theCompanywere listed in theColomboStock

Exchange and became a public quoted company as Samson International Plc

on 24th July, 1992

• 1994-Wasawardedthefirst“ISO9001:2008qualitymanagement

certificate” among the rubber-related product manufacturing companies in

Sri Lanka

• 2007-InvestedinthefirstmicrowavecontinuouslinemachineinSriLanka.

(This is the only microwave machine in South Asia)

• 2009-PurchasedallassetsofAkselRubberMatCompany,Kalutara

• 2012-WasawardedtheGoldExportAwardfromtheNationalChamberof

Exporters of Sri Lanka

• 2013–WasawardedtheGoldExportAwardfromtheNationalChamberof

Exporters of Sri Lanka for the second consecutive year when the Company

celebrated its Silver Jubilee

• 2014-PurchasedassetsofOktaPVCLanka(Private)Ltd.,Baddegama,and

steppedintomanufacturingPVCproducts

cOntents

Page

1) Financial highlights 01

2) OurCorporateVision,Mission,ValuesandourAim 02

3) Chairman’s review In English 03 - 06

4) Chairman‘sreviewinSinhala 07-09

5) ManagingDirector’soperationalreview 10-13

6) Corporate information 14 - 15

7) TheBoardofDirectors 16-17

8) Profi les of Directors 18 - 19

9) Executive management 20 - 23

10) Managementdiscussion&analysis 24-52

11) Corporate governance 53 - 58

12) Riskmanagement 59-64

13) ReportoftheBoardofDirectors 65-70

14) StatementofDirectors’responsibilities 71

15) AuditCommitteeReport 72-73

16) RemunerationCommitteeReport 74

17) FinancialReview 75-76

18) Auditor’sReport 77

19) FinancialStatement 78-107

20) SustainabilityReport 108-121

21) GlobalReportingInitiative 122-126

22) InvestorInformation 127-130

23) Four-Quarter Financial Summary 131

24) Ten- year Economic Summary 132

25) Ten-year Financial Summary 133

26) Foreign Currency Financial Statement 134

27) GlossaryofFinancialTerms 135

28) NoticeoftheAGM 136

29) DirectiontothevenueoftheAGM 137

30) Notes 138

31) Form of Proxy Enclosed

SamSon international PlC annual report 2013/14

Profit Before Tax (Rs.‘000) Finance Cost (Rs.‘000)

NetAssetsPerShare(Rs.) FixedAssetTurnoverRatio(Times)

(7,608)

(55,980)

19,123

51,077

64,841

(80,000)

(60,000)

(40,000)

(20,000)

-

20,000

40,000

60,000

80,000

2009/10 2010/11 2011/12 2012/13 2013/14

17,161

21,922

10,106 9,900

3,780

-

5,000

10,000

15,000

20,000

25,000

2009/10 2010/11 2011/12 2012/13 2013/14

102.87

88.27 91.75 104.00

117.00

-

20

40

60

80

100

120

140

2009/10 2010/11 2011/12 2012/13 2013/14

3.44 7.71

4.95

5.31 5.45

-

1

2

3

4

5

6

2009/10 2010/11 2011/12 2012/13 2013/14

Profit before tax increased by 27% or Rs. 13.7mn

Finance cost decreased by 62% or Rs. 6.0mn

Financial investments increased by Rs. 50mn

Profit before tax increased by 27% or Rs. 13.7mn

Finance cost decreased by 62% or Rs. 6.0mn

Financial investments increased by Rs. 50mn

1SamSon international PlC annual report 2013/14

2013/14 2012/13 Variance %

Operating Results

Revenue Rs.000 952,561 973,858 (21,297) (2)

Profitbeforetax Rs.000 64,841 51,077 13,764 27

Taxonprofit Rs.000 8,491 (4,438) 12,929 291

Profitaftertax Rs.000 56,350 55,515 835 1.5

Exportsearnings inUS$000 4,753 5,235 (482) (9)

Valueadditions Rs.000 227,496 199,631 27,865 14

Interest cover times 18.15 6.15

ROCE % 12.5 13.8 (1.3)

Gross profit to Sales % 15.2 15.3 (0.1)

Valueadditionsperemployee Rs/month 58,512 55,085 3,427 6.2

Manpower Nos. 324 302 22 7.3

Financial Position

Dividendcover times 7.3 7.2

Currentratio times 2.37 2.39

Gearing % 6.8 13.2 (6.4)

Financecost Rs.000 3,780 9,900 (6,120) (62)

FinancialInvestments Rs.000 50,354 - 50,354

Totalassets Rs.000 654,125 593,108 61,017 10.2

Cashgeneratedfromoperations Rs.000 136,204 17,785 118,419 666

Shareholder information

Dividendpershare Rs. 2.00 2.00 - -

Marketpricepershare-Closing Rs. 88.20 82.20 6.00 7

Earningspershare Rs. 14.64 14.43 0.21 1.5

Netassetspershare Rs. 116.82 104.18 12.64 12

Numberofsharesissued Nos. 3,847,974 3,847,974 - -

NumberofShareholders Nos. 1,125 1,127 (2) (0.2)

Marketcapitalization Rs.000 339,391 316,303 23,088 7

Shareholders’Funds Rs.000 449,558 400,904 48,654 12

Price earnings ratio times 6.02 5.69 0.33 5.8

Financial

HighlightsFinancial

Highlights


Our Vision

To be a leading Polymer Product manufacturer in the region.

Our Mission

To become a versatile manufacturer of diversified polymer products in the

globalmarketbyutilizingmoderntechnologywhileprovidingoptimum

value to Stakeholders.

Our Values

Contributing to the Socio-economic development,

Respecting national and religious heritage,

Protecting and safeguarding our environment,

Enhancing disciplined human resources based on the family concept.

Our Aim

Aiming at versatility in all polymer products…

During the last 25 years, we have maintained a benchmark for having arguably the widest

product range among the rubber products manufacturing companies in Sri Lanka.

WearemovingonbeyondourSilverJubilee,determinedtoexpandourpolymerproducts

range and invest in modern technology aimed at versatility.

Wealsocontinuetobecommittedtocontributetothenationaleconomy,servingtherural

areas in the Southern Province by using local raw materials, opening direct employment

avenues for neighbouring villages, generating foreign exchange and nurturing our

indigenousheritageasasociallyresponsiblecorporatecitizenwhileaimingatversatilityand

movingforwardinthedirectionofourVision.

Our cOrpOrateVision, Mission, Values and aim


cHairMan’s

review

“It is observed that currently, more than half of

Sri Lankan exports are still centered on the US

and EU markets. We would be severely affected

if the economies in both the US and EU decline.

To minimize the risk, the right mixture of exports

has to be identifi ed. In view of this, we all have to

develop the Chinese, Japanese and South Asian

markets… “

ItismypleasuretopresenttheAnnualReportofSamsonInternationalPlcfortheyearended31stMarch2014.As

you are aware, Samson International Plc was incorporated on

14th October 1988 and we celebrated our silver jubilee this

fi nancial year.

Global Economic outlookIn 2013, the global economic growth was estimated at 3

percent which is a marginal drop from 3.2 percent recorded

in2012.AsprojectedintheIMFforecast,globalgrowthwill

strengthen from 3 percent in 2013 to 3.6 percent in 2014 and

3.9 percent in 2015.

6

5.2

3.9

3.23

3.63.9

5

4

2

3

1

0

2010 2011 2012 2013 2014 2015

5.2

2010

3.9

2011

3.2

2012

3

2013

3.6

2014

3.9

2015

World Economic Output Growth (%)%

Source : IMF World Economic Outlook Report of April 2014


Whenwelookattheforeigncurrencytrends,forsome

currencies the foreign exchange market was highly volatile. The

Japanese Yen recorded 18.1 percent depreciation against the

dollar where currencies such as the Euro, Sterling Pound and

theSouthAfricanRandsignificantlyappreciatedagainstthe

dollar. Infl ation remained stable in many economies in 2013

while a few developed economies faced defl ationary pressures.

Sri Lankan Economic OutlookTheSriLankaneconomyrecordeda7.3percentgrowthin

2013 while infl ation remained at single digit levels for the fi fth

consecutiveyear,steadilydecliningtomid–singledigitlevels

by the end of 2013. Though remaining at a low level of 4.4

percent in 2013, the unemployment level recorded a slight

increase of 0.4 percent compared to the previous year due to

new job seekers entering the labour market. Infl ation trended

downward in 2013, averaging 6.9% in the year. Economic

growth was broad based with contributions from all sectors,

supported by favorable weather conditions.

The Sri Lankan economy was projected to accelerate further

in the medium term to an annual growth rate of 8 percent.

This economic growth target is expected to be supported by

infrastructure expansion in transport, telecommunication, ports

and growth of tourism. The services sector made the largest

contributiontogrowthin2013.Rapidgrowthinwholesale

and retail trade, hotels and restaurants, transport, banking,

insurance and real estate enhanced performance in the large

service sector to 6.4% from 4.6% a year earlier. Industry grew

by 9.9%, slightly less than a year earlier, as slower growth

in mining and quarrying and in construction offset a pickup

in manufacturing and utilities. Favourable weather helped

maintainagriculturegrowthatarelativelyfavourable4.7%.

Whenwelookfurther,foodinflationwasatabout12%during

the fi rst quarter as the drought late in 2012 had disrupted

domestic food supplies, but then dropped markedly to 0.9%

inFebruary2014.Non-foodinflationwasalsoloweroverthe

yearbutincreasedto7.1%inJanuary2014.

cHairMan’s statement (contd...)

-6

-4

-2

0

2

4

6

8

10

12

14

16

2005 2005 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015

Emergind and Devoloping Emergind and Devoloping Emergind and Devoloping Emergind and Devoloping Asia Asia Asia

India India India India

China China China China

Economic Growth (%) Economic Growth (%) Economic Growth (%) Source : World Economic Source : World Economic Outlook Apr 2014 Outlook Apr 2014

-6

-4

-2

0

2

4

6

2005 2005 2005 2005 2006 2007 2008 2008 2008 2008 2008 2008 2008 2009 2010 2020111111 2012 2013 2014 2015 2015

United States United States United States United States

Japan Japan

Advanced Economies Advanced Economies Advanced Economies Advanced Economies

Economic Growth (%) Source : World Economic Source : World Economic Outlook Apr 2014

AccordingtoIMFWorldEconomicOutlookReportofApril

2014, the USA, Euro area ( Germany, France, Italy and Spain),

Japan,UKandCanadahaveadvancedeconomies.The

economic activities in these countries struggled in the fi rst half

but grew fi rmly in the second half of the year and recorded

1.4 percent growth in 2013 compared to 1.3 percent in 2012.

In these countries, growth is expected to increase to about

2.2percentin2014.Keydriversofsuchgrowthwillbea

reduction in fi scal tightening (except in Japan) while pursuing

accommodative monetary measures . Growth will be strongest

in the United States at about 2.8 percent while in the Euro area

growth is projected to be positive but varied area depending on

the extent of debt and fi nancial fragmentation.

-6

-4

-2

0

2

4

6

2005 2005 2005 2006 2007 2008 2008 2008 2008 2009 2010 2011 2012 2012 2012 2013 2013 2013 2014 2015 2015

Euro Euro Area

France France

Germony Germony Germony Germony

Economic Growth (%) Source : World Economic Outlook Apr 2014 Outlook Apr 2014

Economic activity in many emerging market economies ( i.e.,

China,India,Indonesia,Malaysia,Philippines,Thailandand

Vietnam)hasbeendisappointinginalessfavorableexternal

fi nancial environment, although they continue to contribute

more than two-thirds of global growth. Some emerging

economies slowed in growth due to weaker domestic demand

than anticipated and the growth recorded by emerging

economieswas4.7percent,whichisa0.2percentdrop

fromthepreviousyear.AccordingtoIMF,inChinagrowthis

projectedtoremainatabout7.5percentin2014.

%

%

%





The 2013 fi scal defi cit is estimated at 5.8% of GDP in keeping

with the target. The target was achieved notwithstanding

unexpectedly weak revenues by reducing current expenditure.

Capital expenditure was largely sustained but was again

slightly below the target of 6% of GDP. The ratio of

governmentdebttoGDPfellto78.4%inSeptember2013

from79.1%in2012.

There was a turnaround in external demand during the

secondhalfofthefinancialyear2013/14withthegradual

improvement in the advanced economies including the United

States and the European Union, which are Sri Lanka’s major

export destinations. Currently, more than half of Sri Lankan

exportsarestillcentredontheUSandEUmarkets.Wewould

be severely affected if the economies of both the US and the

EUdecline.Tominimizetherisk,therightmixtureofexports

has to be identifi ed. In view of this, we have all to develop the

Chinese, Japanese and South Asian markets.

Withtheflexibleexchangeratepoliciesofthegovernment

the rupee remained less volatile against the dollar and the

currencies of some of the major emerging economies. By the

endof2013,therupeehadexchangedatarateof130.75

againsttheUSdollarrecordingadepreciationof2.75percent

compared to the previous year.

In 2013, many key infrastructure projects were completed,

namely, the country’s second international airport, harbour

and port development projects, the Expressway and highway

developmentprojects,theNorthernrailwayprojectandpower

projects, with some more due to be completed in the future.


12.0

10.0

8.0

6.0

4.0

2.0

0.0200920092009

AgricultureAgriculture IndustryIndustry

%

ServicesServices GDPGDP

20102010 20112011 201220122012 201320132013

Industry PerformanceThe rubber industry of the country faced two major challenges

during the year. Firstly, the signifi cant decline in production was

due to a drop in tapping days during the adverse weather in the

firstninemonths.Rubberproductiondeclinedby14.2percent

compared to 2012. Secondly, declining world market prices of

natural rubber due to high stocks levels maintained in China

and Japan, which affected rubber prices in Sri Lanka too.

Despite these challenges the output of rubber products

increased at a moderate rate of 4.6 percent with the increase

in international demand for rubber-based products in the

latter part of 2013. Earnings from exports of rubber products

recorded a 3.3 percent growth in 2013, which was the second

largest contributor to the growth in industrial exports of the

country.

Future prospects for the industry will be more favourable with

the government’s master plan in respect of the rubber industry

looking to generate USD 5 bn worth of rubber exports by

2022. In achieving this goal we could expect the authorities

to extend their support towards improving testing laboratory

facilities, developing infrastructure and regulating the industry.

Company’s PerformanceDuringtheyearended31stMarch2014,theCompany

recordedaturnoverofRs.953mnasagainstRs.974mnin

the previous year. The reduced turnover was caused by the

signifi cant depreciation of the currency of India, South Africa

and Japan, our customers. However, the profi t before taxation

inthecurrentyearisRs.64.8mnascomparedtoRs51.0mn

inthepreviousyear,whichisanincreaseby27%.

Wecontinuetomanufacturetotheinternationalstandards

required of many ISO certifi ed products. In the future, we

will focus on widening our global presence with a wide

productrange.Wewillcontinuetofocusonhighcontributing

products.Wastageandscraplevelswillbefurtherminimized

withpropercontrols.Weneedtofurtherimproveourquality

levels and delivery times from their current position in order to

differentiate our products from Chinese products.

Source :Central Bank Annual Report 2013


1200

1000

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Turn Over (Rs. Mn)Turn Over (Rs. Mn)Turn Over (Rs. Mn)

800

600

400

200

0

Tu

I am happy to inform you that Samson International Plc

purchasedtheassetsofOktaPVCLanka(Pvt)Ltd.on14th

July2014bymovingforwardinthedirectionofourVision.We

willbeabletowidenourproductrangefurtherwiththePVC-

related products.

Movingforwardinthe

directionofourVision

DividendsThe Board of Directors decided to recommend a dividend of

Rs.2.00persharefortheyearunderreview(Rs.2.00pershare

in2012/13).

AppreciationAs we complete our Silver Jubilee this year, I would like to

especially thank our invaluable and loyal customers. Further, I

would like to thank the Board of Directors, the management

and every employee of the company for their dedication and

commitment extended to the company.

I would also like to thank our bankers and all our suppliers for

theirsupport.Wedeeplyappreciateourshareholdersfortheir

faith in our Company and we assure them of a bright future.

Dr D. S. RajapaksaChairman

Colombo

1st August 2014

Turnover Last Ten Financial Years (Rs.Mn)



ManaGinGDirector’s Operational review

“During the year we improved many aspects of

our operational effectiveness through investing

in advanced technology, improving the working

capital, minimizing waste, maintaining higher levels

of capacity utilization in most of the products and

controlling all overheads… “

We, Samson International Plc, cater to sophisticated

international markets as well as the local market.

However, we continued to maintain satisfactory profi t levels

in the recent past notwithstanding macroeconomic pressures,

which were challenges to face in the face of slightly lower

global economic growth (3.0 % in 2013 compared to 3.2%

in 2012), adverse movements in exchange rates of some

currencies that we dealt with ( India, South Africa and

Japan) and continuous increases in energy prices.

However, in a more positive light, an increase in exports

as well as local demand could be expected as advanced

economies are picking up, domestic demand in emerging

economies is increasing, and the rupee continues to be

stable against some major currencies and continues domestic

demand in infrastructure developments.

WiththeKatunayaka-Colombohighwaynowopen,our

customerscanreachuswithintwohoursfromtheKatunayaka

International Airport. Although our factory is located 100

km from Colombo in the South of Sri Lanka , the Southern

Expressway has brought us closer to Colombo. Anyone can

reach us now in a one-hour journey from Colombo and 15

Profi t Before Tax (Rs.Mn)

80

60

40

20

0

-20 2004/052004/05

PBT (Rs.Mn)

2006/072005/06 2007/08 2008/09 2009/102009/102009/102009/10 2010/11 2011/122011/12 2012/13 2013/142013/14

-40

-60

-80

PBP


minutesfromMatara.Thegovernment’smassiveinfrastructure

projects certainly help our business.

Weareplanningtobecome

bigger and bigger

year by year

During the year we improved many aspects of operational

effectiveness by investing in advanced technology, improving

ourworkingcapital,minimizingwaste,maintaininghigher

levelsofcapacityutilizationandcontrollingalloverheads.

In the fi nancial year under review, we invested in a fully

automatedflashlesspressforVstrap,amill,anotherpress

line for hot water bottles and an additional cutter for jar

sealingrings.Wecontinuetoinvestmoreandmorein

Research&Development.OurGroupsignedanagreement

withthePolymerUnitoftheUniversityofMoratuwafor

researchactivitiesfor3yearsbyinvestingRs.15mnfrom

which the major contribution will come to Samson Intentional

Plc.Wearelookingforwardtothefuturewithmuchpositive

hope.Wewillcontinuouslyengageinproductdevelopment,

processautomationandcreatingsynergies.Weareplanning

to become bigger and bigger year by year.

Ourworkingcapitalcycleisasfollows:

2013/2014 2012/2013 Variance

DebtCollectionPeriod(Days) 65 79 (14)

RMHoldingPeriod(Days) 23 18 5

WIPHoldingPeriod(Days) 14 11 3

FG Holding Period (Days) 19 58 (39)

Credit Settlement Period (Days) (54) (38) (16)

CashOperatingCycle(Days) 67 128 (61)

OperatingCycle(Days) 56 87 (31)

Our measures to improve quality in compliance with

international standards and continuous in-house and

overseas laboratory tests will ensure a solid market share

forourproducts.Wehaveachievedsignificantinternational

recognitionintermsofproductquality.Wearethefirst

rubber- related product manufacturing company to receive

theISO9001:2008QualityManagementCertificate.Since

ManaGinG Director’s Operational review (contd...)

1994, we have enjoyed ISO status. Further, we have been

awardedBritishStandard(BS1970:2006),TUVCertification

andFSCCertificationforhotwaterbottles.Wealsohavethe

FireRetardantCertificateforrubbersmatsandflooringsand

theElectricalResistantCertificateforrubbermats.Allraw

materials are used to manufacture our products by conforming

totheReachregulationsofEurope.

Wearethefirst

rubber- related product

manufacturing company to

receivetheISO9001:2008

QualityManagement

Certifi cate

Above all, our main focus is contributing to the rural

communities by offering them many more employment

opportunitiesandupliftingtheirlivingstandards.Weasa

company are committed to protecting our cultural heritage

and customs. Our years of experience prove that customs and

rituals tie generations with bonds that cannot be broken.

WearepleasedtoinformyouthatyourCompanyreceiveda

coupleofawardsduringtheyear:firstlyNationalChamber

of Commerce Gold Awards for the last two consecutive years

in recognition of our export growth and volume; secondly a

CertificateofRecognitionawardedbytheInstituteofChartered

Accountantswasreceivedforlastyear’sAnnualReportinthe

manufacturing category.

As you are aware, Samson International Plc produces more

than 40 types of rubber products under four different

product segments.

a) Medical Items: These include hot water bottles, fi nger

exercises and power web.

b) Food Grade Items: These include jar sealing rings.

c) Household & Industry Items: This segment includes

rubber mats ,rubber fl ooring and rubber hoses,

continuous rubber rolls, bath mats, staircase mats, vehicle



Business Segment2013/14 2012/13 2013/14 2012/13 2013/14 2012/13 2013/14 2012/13 2013/14 2012/13

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Export Sales 208,861 212,328 284,583 285,912 67,717 99,166 52,092 58,635 613,250 656,041 Local Sales 635 1,343 2,081 5,338 40,561 39,389 296,034 271,747 339,311 317,817

209,496 213,671 286,664 291,250 108,275 138,555 348,126 330,382 952,561 973,858 Profit/(Loss) on Fixed Asset Disposal 82 291 81 291 88 292 81 292 332 1,166 Other Income 472 328 472 214 472 24 535 16 1,951 582

210,050 214,290 287,217 291,755 108,835 138,871 348,742 330,690 954,844 975,606

Segmental Expense (200,558) (201,821) (256,869) (261,225) (105,064) (136,291) (344,589) (322,209) (907,080) (921,546)

Operating Profit/(Loss) 9,492 12,469 30,348 30,530 3,771 2,580 4,153 8,481 47,764 54,060

Medical Items Food Grade Items Household Items Others Company

mats, entrance mats, industry mats and also specialty mats

such as fi re retardant mats, oil resistant mats, antistatic

mats and fabric mats.

4) Other products: These include beadings, footwear

components, road humps, mud fl aps, D- fenders and

other items which do not belong to the above three

categories.

Turnover Mix in (Rs. Mn.)

348.12330.38

213.67

138.55291.25

209.49

2013/14 2012/13

286.66108.27

Medical Items

Food Grade Item

House Hold ItemHouse Hold ItemHouse Hold Item

other

Me

FooFoo

Ho

othoth

30

9

5 4

31

12

10

3 -

5

10

15

20

25

30

35

Food Grade Items Food Grade Items Food Grade Items Medical Items Others Others Household Items Household Items

2013/14 2013/14 2013/14 2013/14 2013/14 2013/14 2013

2012/13 2012/13 2012/13

Operating Profi t (Rs. Mn.)

The segmental profi t analysis is given below.



Wehadasalesgrowthof7%fromlocalsales.However,

export sales decreased by 6.5 %. During the year overheads

were controlled effectively. Finance costs decreased by 62%

fromRs.9.9mninthepreviousyeartoRs.3.7mninthe

currentfinancialyear.WeinvestedRs50.3mninTreasuryBills,

Tax free Debentures and Fixed Deposits this year. Administration

overheads and selling and distribution overheads too are under

control.ExchangegainincomeincreasedfromRs6.1mnin

thepreviousyeartoRs17.7mninthecurrentyear,whichwas

mainly due to the favourable exchange rate of the Euro that

prevailed during the year. However, we also lost some revenue

due to unfavorable exchange rates that prevailed in Japan,

India and South Africa in the same period. The net profi t

beforetaxincreasedby27%toRs.64.8mninthecurrent

financialyearcomparedtoRs.51.0mninthepreviousyear.

WeinvestedRs50mn

in Treasury Bills, Tax free

Debentures and Fixed

Deposits this year

It is important that we maintain excellent rapport with our

neighbors, villagers and employees. At present our rapport

with our neighbors and villagers seem to be constructive and

improving. Our relationship with our employees too seems

sound and pleasant at present.

Currently we produce more than 40 products out of rubber

using moulding , extruding, microwaving and injection

moulding. Your company has now reached versatility in

manufacturing rubber products. In the future we will focus

on reaching versatility in other polymer products such as

PVCtoo.IamhappytoinformyouthatSamsonInternational

PlcpurchasedtheassetsoftheOktaPVCLanka(Pvt)Ltd.

on 14th July 2014 by moving forward in the direction of

ourVision.Wewillbeabletowidenourproductrangeand

turnoverfurtherwhenweaddtoitPVC-relatedproducts.

I would like to thank all the members of management and

every employee of the company for their dedication and

commitment extended to the company during the year.

D. K. RajapaksaManaging Director

Colombo

1st August 2014


cOrpOrate informationName of the Company : SamsonInternationalPlc

Legal Form : Apublicquotedcompanywithlimitedliability,incorporatedon14thOctober 1988 and re-

registeredundertheCompaniesActNo.7of2007on3rdSeptember2008.

Company Registration number : PQ192

Stock Exchange listing : TheordinarysharesoftheCompanywerelistedintheColombo Stock Exchange of Sri Lanka

on 24th July 1992 and the Company was converted to a public quoted company.

Principal line of business : Manufactureandexportofrubber-basedproductsfortheinternationalandlocalmarkets.

Registered Offi ce : No.110,KumaranRatnamRoad,Colombo02.

Te:(011)4728800,Fax(011)2440890

Email:[email protected]

Galle Factory : AkuressaRoad,Bogahagoda,Galle.

Te(091)3094469-72,Fax(091)2224036


Kalutara Factory : No.57/B,FullertonIndustrialZone,Nagoda,Kalutara.

Te (034) 5622688


Baddegama Factory : GilcroftEstate,Kiribathwila,Ampegama,Baddegama

(Purchased on 14th July 2014)

Te (091) 2293801, Fax (091) 2233020


Directors : DrD.S.Rajapaksa(Chairman)

MrD.K.Rajapaksa(ManagingDirector)

MrD.R.Rajapaksa

MrD.M.Rajapaksa

MrC.Cumaranatunge

MrR.H.Nandajeewa(Resignedon8/8/2013)

MrG.H.A.Wimalasena

MrT.K.Bandaranayake

MrB.L.P.Jayawardena

MrD.G.P.S.Abeygunawardana(Director/GeneralManager)Appointed-on8/8/2013asDirector

Secretaries : PWCorporateSecretarial(Pvt)Ltd.

No.3/17,KynseyRoad,Colombo08

Parent Company : DSISamsonGroup(Pvt)Ltd.

Auditors : MessrsHLBEdirisinghe&Company

Chartered Accountants,

No.45,BraybrookStreet,Colombo02.

Bankers : BankofCeylon

HattonNationalBank

Commercial Bank

NationTrustBank

DFCCVardhanaBank

People’s Bank


1. Dr. D. Samson Rajapaksa

2. Mr. D. Kulatunga Rajapaksa

3. Mr. D. Ranatunga Rajapaksa

4. Mr. D. Mahinda Rajapaksa

13

5

7 8624

tHe BOarD of Directors


5. Mr. G. H. Ananda Wimalasena

6. Mr. Tissa K. Bandaranayake

7. Mr. B. Lalith P. Jayewardene

8. Mr. D. G. Priyantha S. Abeygunawardana

Note : Mr. C. Cumaranatunga was absent as he is based in Germany


1. Dr. D. Samson Rajapaksa M.B.B.S (Cey), F.R.C.O.G. (U.K.), M.S. (S.L.)

Chairman

DrSamsonRajapaksaisamedicalpractitionerbyprofession

and counts over three decades of experience with DSI Group.

He serves as the Chairman of DSI Holdings (Pvt) Ltd. and is the

Chairman of DSI Samson Group (Pvt) Ltd. He is also a Director

of D. Samson Industries (Pvt) Ltd., D. Samson and Sons (Pvt)

Ltd.,andSamsonReclaimRubbers(Pvt)Ltd.

In addition to being on the DSI Samson Group (Pvt) Ltd.

Board, he is a Consultant Obstetrician and Gynecologist in the

private sector.

Dr.SamsonRajapaksaservesasaCommitteeMemberofthe

YoungMembersBuddhistAssociationandoftheSriLanka

MedicalLibrary.

2. Mr. D. Kulatunga Rajapaksa B.Sc (Hons) (Cey)

Managing Director

MrKulatungaRajapaksaistheManagingDirectorofDSI

Samson Groups (Pvt) Ltd. He has over 48 years of experience

in the manufacture of footwear and rubber products.

HehasservedasaCouncilMemberofseveraluniversities.

MrKulatungaRajapaksaisapastpresidentoftheNational

Chamber of Exporters of Sri Lanka and also was the past

presidentoftheSriLankaAssociationofManufacturersand

ExporterofRubberproductsandisthecurrentpresidentof

theSriLankaFootwear&LeatherProductsManufacturers

Association.

HeisalsotheChairmanoftheWellassaRubberCompany

LimitedandalsoaDirectoroftheMawbimaLanka

Foundation.

3. Mr. D. Ranatunga Rajapaksa Dip. In Technology

Non- Executive Director

MrRanatungaRajapaksaistheManagingDirectorof

SamsonRubberIndustries(Pvt)Ltd.,acompanythat

specializesinthedesigning,manufacturingandexporting

oftyresandtubes.HeisalsotheManagingDirectorof

MountspringWater(Pvt)Ltd.,SamsonReclaimRubbersLtd.

SamsonRubberProducts(Pvt)Ltd.,SamsonBikes(Pvt)Ltd.,

DSI Tyre India (Pvt) Ltd. and several other subsidiary companies

of the DSI Samson Group.

Mr.RanatungaRajapaksaplaysamajorroleinexpanding

the Group’s overseas business and has more than 43 years of

experience with DSI Group.

4. Mr. D. Mahinda Rajapaksa B.Sc Eng. (Hons), MBIM, CEng, MIMechE (UK), FIE (SL)

Non -Executive Director

Mr.MahindaRajapaksaisaCharteredEngineerbyprofession

and has more than five years’ experience working as an

EngineerinUKandSriLanka.

In addition to being a Director of Samson International Plc,

Mr.MahindaRajapaksaistheManagingDirectorofSamson

(Exports) Ltd. and is a Director of DSI Samson Group (Pvt) Ltd.,

D. Samson Industries (Pvt) Ltd. and several other subsidiary

companies of the DSI Samson Group.

Mr.MahindaRajapaksahasover35yearsofmanagerial

experience within the DSI Samson Group.

5. Mr. Chula Cumaranatunge M.Sc. (Econ) (Lond.)

Non -Executive Director

MrChulaCumaranatungehasover28years’experiencein

the rubber industry.

MrChulaCumaranatungeisalsoaDirectorofGlovetex(Pvt)

Ltd.andofCentralRubber(Pvt)Ltd.

6. Mr. G. H. Ananda Wimalasena B.Sc, Higher Diploma in Management (London College of

Printing, U.K.)

Independent, Non –Executive Director

MrAnandaWimalasenawastheFounder-ManagingDirector

of Asiri Hospital Group of Companies from 1980 to 2006.

MrAnandaWimalasenahasexperienceandextensive

exposureinManagementandHealthservices.Healsoserves

as a Director of Hemas Hospitals (Pvt) Ltd. He is Chairman in

ITMC(Pvt)Ltd.andalsoChairmanoftheRiskManagement&

Audit Committee of Hemas Hospitals (Pvt) Ltd.

7. Mr. Tissa K. Bandaranayake B.Sc. (Cey), FCA

Independent, Non –Executive Director

MrTissaBandaranayakehasmorethan46yearscommercial

and professional experience and was a Senior Partner of Ernst

&Youngfromwhereheretiredafter27years,havingserviced

a large portfolio of clients, both local and multinational in

various industries.

He currently serves as a Director Laugfs Gas Plc, Overseas

Realty(Ceylon)Plc,RenukaHoldingsPlc,RenukaShaw

WallacePlc,MicroHoldings(Pvt)Ltd.,HarischandraMills

Plc,WatersEdgeLtd.andNawalokaHospitalsPlc.Healso

prOFiles of the Directors


servesasanAdvisor/ConsultanttotheBoardofDirectorsof

NoritakeLankaPorcelain(Pvt)Ltd.

He serves as Chairman of the Quality Assurance Board

established by the Institute of Chartered Accountants of

Sri Lanka comprising senior members of the accounting

profession as well as representatives of public sector

regulatorybodiessuchastheSEC,SLAASMB,CBSL,etc.

MrTissaBandaranayakeisaPastChairmanoftheAudit

Faculty of the Institute of Chartered Accountants of Sri Lanka.

8. Mr. B. Lalith P. Jayawardena MBA, BCom (Sp)

Executive Director

MrLalithJayawardenahasover24years’experiencein

Samson International Plc and has served the company from its

inception. He is also a Director of Samson Group Corporate

Services(Pvt)Ltd.,SamtessiBrushManufacturers(Pvt)Ltd.

andMicroMinerals(Pvt)Ltd.,asubsidiaryoftheRichardPeiris

Group.Inaddition,MrLalithJayawardenaservesastheGroup

Treasurer of the DSI Samson Group.

He is the Secretary of the Sri Lanka Association of

Manufacturers&ExporterofRubberProducts(SLAMERP).Mr

LalithJayawardenaisalsoamemberoftheRubberAdvisory

Council of the Sri Lanka Export Development Board and of

theMinistryofIndustryandCommerce.HeisapastTreasurer

ofthePlasticandRubberInstituteofSriLanka.

9. Mr. D. G. Priyantha S. Abeygunawardana MBA, LLM, LLB, FCA, FCMA, FCCA, MCIM, Attorney-at- Law

Director / General Manager

Mr.PriyanthaAbeygunawardanaisatriple-qualified

AccountantholdingthefellowshipofChartered,CIMA

andACCA.HealsoholdstwoMaster’sdegreesintwo

differentfields,namely,MBAfromtheUniversityofSri

JayewardenepuraspecializinginFinanceandLLMfrom

University of Colombo in Company Law, Labour Law and

Banking Law.

He obtained his LLB degree from the Open University of Sri

Lanka and took his oaths as an Attorney-at- Law in 2004

having passed the requisite examinations held by the Sri Lanka

Law College.

HeisalsomemberofCharteredInstituteofMarketingofUK.

PreviouslyhewasatFord,Rhodes,Thornton&Company,

Hayley’s,AbansandfinallyatRichardPiersExportsPlcwhere

heworkedasGeneralManagerforsixyears.Hejoined

Samson International Plc in February 2012.

prOFiles of the Directors (contd...)

Analysis of Director’s Professional Background:

Professionally qualified area No. of Directors on the Board

1 Medical 1

2 Science 3

3 Engineering 2

4 Finance 3

5 Economics 1

6 Law 1

7 Marketing 1

8 Management 3


executiVe

Management

Mr. Kulatunga Rajapaksa

B.Sc (Hons) (Cey)

Managing Director

Mr. Priyantha Abeygunawardana

MBA, LLM, LLB, FCA, FCMA, FCCA, MCIM, Attorney-at -Law

Director/ General Manager

Research&Development

Mr. Sunil KariyawasamDip. in Rubber Technology (NDT)

Deputy General Manager – Research

& Development

Mr. Wimal Siriwardana Dip. in Rubber Technology,

Certifi cate in Hydraulic Technology

Executive – Research and Development

Mr. P K Sameera TharangaB.Sc Engineering (Hons)

Process Engineer


executiVe Management (contd...)

Marketing

Supplies HumanResources

Mr Naveendra KumaraMBA, MAAT, Dip in Business Mgt.

Manager - Marketing

Mr. M. A. P. JanakanthaDip. in Engineering Science, Dip. in Rubber

Technology

Executive- Production, Galle Factory

Ms. Piumangani SeneviratneBMS (Sp), Dip. in Mgt

Manager - Supplies

Ms. Nishanthi PadmakumariDip. in Human Resources Management

Executive - Human Resources

Mr. Sanjeewa WeerakkodiBA ( Hons) (Economics), Dip in

Marketing ( UK)

Assistant Manager - Marketing

Mr. Asanka Dimuth EdirisingheDip. in Engineering Science

Executive- Production, Kalutara

Factory

Production



Analysis of Educational and Professional qualifi cations of the Executives :

CATEGORY Number of educational Number of professional

qualifi cations qualifi cations

Master’sDegrees 4 -

Bachelor’sDegrees 7 -

Diplomas 11 -

Professionally qualifi ed in Accountancy 3

Professionally qualifi ed in Law 1

ProfessionallyqualifiedinMarketing 2

Total 22 6

Quality Assurance

Finance

Engineering

Welfare

Mr. Namal NishanthaB.Sc, Dip. in Rubber Technology

Executive- Quality Assurance

Mr. Thilina Promod Kahanda Gamage B.Sc Finance Management (Sp)

Executive- Finance

Mr. Nilantha JayalalDip. in Technology

Executive – Engineering

Mr. G. ParanavithanaDip. in Commerce

Executive- Welfare


cOrpOrateGovernance

“Board of Directors gives its top priority to

attain a high standard of corporate governance

practices as specified by regulatory bodies …”

TheBoardrecognizestheinterestsoftheCompany’s

shareholders, employees, customers, suppliers, consumers,

and communities in which it operates and who are all essential

for the Company’s success. The Company’s corporate

governance framework is expected to ensure a transparent

and good governance system leading towards enhancing

profitability and long-term sustainability. The Directors are

committed to maintaining the highest standards of corporate

governance in the interest of stakeholders having regard to

the requirements of the Securities and Exchange Commission

of Sri Lanka, Colombo Stock Exchange and the Institute of

Chartered Accountants of Sri Lanka and to this end, inter

alia, have established internal control systems, including a

comprehensive risk identification, measurement and mitigation

process which is in place designed to carry out the business

of the Company in an orderly manner, to safeguard its assets

and secure as far as possible, the accuracy and reliability of the

records and protect the rights and interests of shareholders

and be accountable to them for the overall management of

the Company. The corporate governance of the Company

is reflected in its strong belief in protecting and enhancing

stakeholder value in a sustainable manner, supported by a

sound system of policies and practices.


Board of Directors

The Board comprising professional and experienced business

leaders of high repute is entrusted with, and is responsible for

providing strategic direction to the company in an honest, fair,

diligent and ethical manner. The Board of Samson International

Plc comprises three executive directors and six non-executive

directors.Theirprofilesappearonpages18&19ofthisAnnual

Report.

RoleoftheBoardofDirectors The Board of the Company is responsible for formulating

company policy and overall business strategy. The

implementation of policy and strategy is done within a

framework that requires compliance with existing laws and

regulations as well as establishing best practices in dealing with

employees, customers, suppliers and the community at large.

It is the Company’s policy to hold regular Board meetings.

Information relevant to these Board meetings was distributed

in a timely manner with ample time given for members to

assimilateandanalyzeinformationinordertomakewell-

informed decisions at Board meetings. In the furtherance of

his duties, provisions have been made to allow a director to

acquire independent professional advice at the expense of the

company. The Board approves all material contracts, projects,

investments, acquisitions and disposal fixed assets and annual

capital&revenuebudgets.

cOrpOrate Governance (contd...)

To protect the untarnished reputation of the company, the

Board ensures that its members and employees maintain the

highest possible ethical standards.

TheBoardhasdelegatedresponsibilitytotheManaging

Director who is also the Chief Executive Officer for planning

and guiding the business towards meeting set objectives. There

is a clear demarcation of responsibilities and authority between

theChairmanandtheChiefExecutiveOfficer/Managing

Director, which ensures a balance of power.

Appointment&Re-electionofDirectors The Board of Directors collectively decides on the new

appointment of directors as per the Articles of Association of

the Company. Formal and transparent procedures are followed

inmakingsuchappointments.TheAnnualGeneralMeeting

is considered to be the ideal forum for this, with sufficient

biographic data on directors seeking appointment or re-election

accompanying their names so that shareholders can make

informed voting decisions.

BoardMeetingsThe Board held five meetings during the period under review

and their attendance is given below.

Name of Director Status 27th May 08thAugust 11thNovember 13thFebruary 26thMay No of

2013 2013 2013 2014 2014 Attendance

DrDSRajapaksa NE √ √ √ √ √ 5/5

MrDKRajapaksa E x √ √ √ √ 4/5

MrDMRajapaksa NE √ √ √ √ √ 5/5

MrDRRajapaksa NE √ √ √ √ √ 5/5

MrRHNandajeewa(Resignedon8/8/2013) E √ √ - - - 2/2

MrCCumaranatunga(BasedinGermany) NE x x x x x 0/5

MrTKBandaranayake NE/I √ √ √ √ √ 5/5

MrGHAWimalasena NE/I x √ √ x √ 3/5

MrBLPJayawardena E √ √ x x x 2/5

Mr.DGPSAbeygunawardana(Appointedon8/8/2013) E - √ √ √ √ 4/4

Directors’attendanceattheBoardMeetingsofSamsonInternationalPLC

Note1:Understatuscolumn,“E”=Executive,“NE”=Non-Executiveand“I”=Independent

Note2:MrCumaranatungeisbasedinGermanyandallproceedingsoftheBoardmeetingshavebeensenttohim.



CommitteesSpecificresponsibilitieshavebeendelegatedtotheBoardCommittees,namely,AuditCommitteeandRemunerationCommittee.

Audit Committee

TheAuditCommitteeconsistsofthreeNon-ExecutiveDirectors:

MrT.K.Bandaranayake–Chairman Independent,Non-ExecutiveDirector

MrG.H.Wimalasena Independent,Non-ExecutiveDirector

MrD.M.Rajapaksa Non-ExecutiveDirector

PleaserefertheAuditCommitteeReportonpages72and73forthefunctionsandresponsibilitiesoftheCommittee.TheInternal

AuditfunctionoftheCompanyiscarriedoutbyMs.Ernst&Young,CharteredAccountants.TheydirectlyreporttotheChairmanof

the Audit Committee. The Audit Committee Charter gives guidelines on audit-related matters.


2013 2013 2013 2014 2014 Attendance

MrTKBandaranayake

(Chairman) NE/I √ √ √ √ √ 5/5



AttendanceofMembersoftheAuditCommittee

RemunerationCommittee

TheRemunerationCommittee,appointedbytheBoardofDirectors,consistsofthreeNon-ExecutiveDirectors:

MrG.H.A.Wimalasena–Chairman IndependentNon-ExecutiveDirector

MrT.K.Bandaranayake IndependentNon-ExecutiveDirector


TheyrecommendtheremunerationpackagesofDirectors,ManagersandExecutivesoftheCompany.

Compliance and Disclosure of InformationTheCompany’scompliancewithitsstatutoryobligationsisregularlymonitoredbyManagementandaStatementofCompliance

is presented to the Board on a regular basis. The Board of Directors requires that the Financial Statements of the Company are

prepared in accordance with the Sri Lanka Accounting Standards and in accordance with the requirements of the Colombo Stock

ExchangeandCompaniesAct,7of2007.Maximuminformationisprovidedtoshareholdersandfulldisclosureismadesubjectonly

to consideration of any sensitive information, which could directly impact on the business of the Company.

TheStatementofComplianceunderSection7.10oftherulesofColomboStockExchangeonCorporateGovernanceisshowninthe

Table below. All these mandatory provisions have been fully complied with.



CSE Rule No. Subject Applicable Requirement Compliance Status

7.10.1(a) Non-ExecutiveDirectors Atleast1/3ofthetotalnumberof Compliant

DirectorsshouldbeNon-ExecutiveDirectors 6 out of the 9 Board

members are

Non-Executives.

7.10.2(a) IndependentDirectors 2or1/3ofNon-ExecutiveDirectors, Compliant

whichever is higher should be independent There are 2 Independent

Directors and 6

Non-ExecutiveDirectors.

7.10.2(b) IndependentDirectors EachNon-ExecutiveDirectorshouldsubmit Compliant

adeclarationofindependence/ Independence of Directors

non-independence has been determined in

accordance with CSE.

7.10.3(a) DisclosurerelatingtoDirectors a. TheBoardshallmakeadetermination Compliant

annually as to the independence or All Independent,

non independence of each Non-ExecutiveDirectors

Non-ExecutiveDirector have submitted declarations

for their independence.

b.NamesofindependentDirectors Compliant

shouldbedisclosedintheAnnualReport This has been disclosed.

7.10.3(b) DisclosurerelatingtoDirectors IntheeventaDirectordoesnotqualifyas NotApplicable

independent, but if the Board is of the opinion

that the Director is nevertheless independent,

shall specify the criteria not met and the basis

forthedeterminationintheAnnualReport

7.10.3(c) DisclosurerelatingtoDirectors AbriefresumeofeachDirectorshouldbe Compliant

includedintheAnnualReportincluding Please refer the Profile of the

the area of expertise Directors in the Annual

Reportonpages18,19.

7.10.3(d) DisclosurerelatingtoDirectors UponappointmentofanewDirector Compliant

to the Board, a brief resume of each A brief resume of the new

Director should be provided to the CSE. Director was provided to the

CSE in August 2013.

7.10.5 RemunerationCommittee AlistedCompanyshallhavea Compliant


7.10.5(a) CompositionofRemuneration ShallcompriseNon-ExecutiveDirectors, Compliant

Committee a majority of whom shall be independent 2out3Non-Executive

directors are independent.


CSE Rule No. Subject Applicable Requirement Compliance Status

7.10.5(b) ReportofRemuneration TheRemunerationCommitteeshall Compliant

recommend the remuneration

of Chief Executive Officer and

Executive Directors

7.10.5(c) DisclosureintheAnnualReport TheAnnualReportshouldsetout:

relatingtoRemuneration a. NamesofDirectorscomprising Compliant

Committee theRemunerationCommittee

b. Statement of remuneration policy Compliant

c. Aggregate remuneration paid to Compliant

Executive&Non-ExecutiveDirectors Plseepage74

7.10.6 AuditCommittee TheCompanyshallhaveanAuditCommittee Compliant

Rule No. Subject Applicable Requirement Compliance Status

7.10.6.(a) Thecompositionof a. ShallCompriseNon-ExecutiveDirectors, Compliant

Audit Committee a majority of whom can be independent 2out3Non-Executive

directors are independent.

b. Chief Executive officer and the chief Compliant

Financial Officer should attend Audit

committee meetings

c. The Chairman of the Audit committee or Chairman is a member of

One member should be a member of a Institute of Chartered

professional Accounting body Accountants of Sri Lanka

7.10.6.(b) AuditCommitteefunctions Overseeingofthe Compliant

(i) Preparation, Presentation and adequacy of Audit Committee oversees

disclosures in the financial statements in the integrity of the

accordance with Sri Lanka Accounting financial statement.

Standards.

(ii) Compliance with financial reporting Compliant

requirements, information requirements of Audit Committee oversees

the Companies Act and other relevant the requirement of the

financial reporting related regulations Companies Act and

and requirements other regulations.

(iii) Processes to ensure that the internal Compliant

controls and risk management are Audit Committee oversees

adequate, to meet the requirements of effectiveness of internal

the Sri Lanka Auditing Standards. control and risk

management,




Rule No. Subject Applicable Requirement Compliance Status

(iv) Assessment of the independence and Compliant

performance of the external auditors. Audit Committee oversees

independence and

performance of the external

auditors.

(v)Makerecommendationtotheboard Compliant

pertaining to appointment, re-appointment Audit Committee

and removal of external auditors and to makes such

approve the remuneration and terms of recommendations.

engagement of the external auditors

7.10.6.(c) DisclosureintheAnnualReport a. NamesofDirectorscomprisingtheAudit Compliant

relating to Audit Committee Committee.

b. The Audit Committee shall make a Compliant

determination of the independence of

the Auditors and disclose the basis

for such determination.

c. TheAnnualReportshallcontainaReport Compliant

of the Audit Committee setting out the

manner of compliance of the function. Plseepage72,73.

The Code of Best Practice of Corporate Governance issued jointly by the Securities Exchange Commission of Sri Lanka and the

Institute of Chartered Accountants of Sri Lanka, which are voluntary provisions, has been also been fully complied with.

Internal Controls TheInternalAuditfunctionoftheCompanycontinuestobeoutsourcedandisbeingcarriedoutbyMsErnst&Youngand

Company, Chartered Accountants. They assess the strengths and weaknesses of the Company’s Internal Control System and liaise

closely with the Audit Committee on a quarterly basis in making recommendations on improving these systems. Controls are in

place to safeguard the Company’s assets, physical or otherwise, and ensure that proper records of each Company’s transactions are

maintained. Directors are responsible for establishing appropriate systems of internal control in the Company and reviewing the

effectiveness of the system of internal controls constantly.

Going ConcernTheDirectorshavecontinuedtousethe“Goingconcern”basisinthepreparationofFinancialStatements,aftercarefulreviewofthe

financial position and cash flow status of the Company. The Board of Directors believes that the Company has adequate resources

to continue in operation for the foreseeable future.

Secretary to the BoardPWCorporateSecretarial(Pvt)Ltd.actsasSecretariestothecompany.TheyadvisetheBoardonappropriateproceduresforthe

management of its meetings and duties, as well as the compliance of corporate governance in the Company.


risk Management“The Company ensures the “minimization of

risks” by adopting many strategies for smooth

Company operations … “

TheRiskManagementPolicyofSamsonInternational

Plc is to proactively manage risk to ensure continued

growth of our business and to protect our employees, assets

and reputation. Our ongoing assessment process takes into

account the likelihood of an event, its potential impact on the

business, the need for mitigation and to take corrective action.

Weneedtohaveaneffectiveriskmanagementsystemwhile

maintainingbusinessflexibility.Wewillidentifyandassess

material risks associated with our business, monitor, manage

and mitigate these risks.

Managingbusinessandfinancialrisksisoffundamental

importance in maintaining sustainable growth and making

steady progress towards the achievement of corporate

goals and objectives. The risk management process has

been designed to ensure identification of any situation or

circumstance that would adversely affect the achievement

of the Company’s objectives. The company has a proactive

approach to business, aimed at enhancing shareholder value.

The company reviews and assesses significant risks on a regular

basis and has implemented an oversight programme to ensure

that there is a system of internal control in place. The Audit

Committee reviews and monitors internal controls. The Audit

ReportsarereviewedbytheAuditCommitteealongwiththe

RiskReportsandComplianceReportsonaquarterlybasis.

The potential risks are identified through risk workshops, risks

reviews, essential control checklists and risks reporting. The

Board also reviews its strategies, processes, procedures and

guidelines on a continuous basis to effectively identify, assess

and respond to risks.


risk Management (contd...)

TheRiskManagementTablebelowexplainsthetypeofrisk,riskexposure,mitigatingactionandriskrankingoftheCompany.

Risk Risk exposure Mitigating action Risk Ranking

Financial Related risks

1) CreditRisk Riskarisingduetodefaultof ThishasbeenexplainedunderNote5ofthe Medium

payment. Higher credit risk may Financial Statement on pages 92 and 93.

adversely impact both liquidity

and profitability.

2) Operational Internalprocessfailures, ThishasbeenexplainedunderNote5ofthe Medium

processRisk fraud,pilferageandbreakdown FinancialStatementonpages92and93.

of internal controls

3) Financing Inabilitytosatisfydebt ThishasbeenexplainedunderNote5ofthe Low

and Interest repayments and obtain Financial Statement on pages 92 and 93.

rate risk the best interest rates.

4) Foreign Depreciationoftherupeevalue ThishasbeenexplainedunderNote5ofthe Medium

Exchange and loss of exchange in Financial Statement on pages 92 and 93.

rateRisk conversioninrelationtoexport

proceeds, import payments and

foreign currency debt

transactions.

5) Project Newprojects/Capital ThishasbeenexplainedunderNote5ofthe Medium

Managementexpendituresinvolve FinancialStatementonpages92and93.

Risks highrisksanduncertainties

in terms of delays and cost

overruns. Failure of major

projects will affect profitability,

capital structure and reputation.




Non-Financial Related risks

6) Reputation Adverseimpactonthe a)Maintenanceofhighestethicalstandardsat Low

Risk corporateimageandbrand alltimesinallbusinessactivitiesandmake

which is likely to diminish compliance audit as part of internal audit scope.

shareholder value.

This will finally lead to a b) Proper adherence to the statutory, health and

decline in market share safety concerns by obtaining appropriate

and customer base. quality certification standards.

c) Continuous review of customer comments in order

to exceed customer expectations and ensure quality

standards are adhered to and improved upon.

d)TheCompanyplaysacorporatecitizenrole

throughCSRinitiatives.

7) Human Riskoflosingskilledand a)Providefocusedandstructuredtraining medium

Resources trainedhumancapital tostaffatalllevelstoaidpersonal

Risk andprofessionaldevelopment.

b) Establish career development programmes and

succession plans in order to retain and motivate them.

c)Maintaininggoodrelationshipswithemployees

through regular dialogue.

d) Top priority is given to automation of manual work.

8) Technological Riskoflowproductivityand a)Frequentvisitsofoverseasexhibitionsandcontinuous medium

Risk highmaintenancecosts investmentinmodernmachinery.

compared to the products

manufactured by competitors. b) Continuous competitor analysis is carried out.

c) InvestinginResearchandDevelopmentactivities

throughout the year.

d)InvestinginERPsystem,hardwareand

developing software in-house.

9) Procurement Riskofnon-availability a)Establishingrelationshipswithmanyglobalandlocal medium

Risk ofrawmaterialsand suppliersforrawmaterialsandcommodities

excessive prices. in order to reduce over dependency

onasinglesupplier/brand.

b) Store raw materials when the prices are low and

enter into forward contracts for raw material purchases.

a) Consume energy in the most efficient way.




10) Inventory Riskofhavingnon-moving a) Identifyingslow-movingstocksandsellthemin medium

Risk stock adifferentmarket.

b) Re-orderlevelandeconomicorderquantity

are established.

11) Riskof Riskoflosingourmarket a) Ensuringhighstandardsofqualityin High

Competition share and sales growth to the eyes of the customer and branding all our products.

Chinese low quality products

and to other substitute b) Participate in trade fairs both local and

products,e.g.PVC-Related foreigntoattractnewcustomers.

Products

c) Identify the products which are in the decline stage

of the Product Life cycle and take corrective action.

d) Sourcing new markets and developing new products.

e) Makenecessaryinvestmentstoupgradethefacilities.

f) Corporate plan is prepared every three years and

monitored closely.

g) Increasing productivity and efficiency in order to

ensure our prices remain competitive.

h)CarryingoutResearchandDevelopmentactivitiesto

identify needs.

i) The provision of various value added services for

our key customers.

j) ManufacturePVC-relatedproductswherethereis

highdemand,e.g.,PVChoses

12) StatutoryandRiskofnon-compliance a) Createawarenessofstatutoryobligationsatalllevels. Low

Regulatory withchangesinlegal

Risk andregulatoryenvironment, b) Seekadvicefromexternalconsultantson

taxation, labour and other all matters relating to litigation and contracts.

laws will result in judiciary

actions. c) Product liability insurance is taken for hot water bottles.

d) Have a central record room to keep all our important

documents for 10 years.

e) Continuous dialogue with statutory bodies to meet

updated reporting requirements.




13) Fire and Fire and natural disasters can a) Obtaining comprehensive insurance cover for Low

natural halt or cease operations fire and natural disasters.

disaster risk

b) Fire safety drills and training is given to ensure

the occurrence of fire is kept to a minimum.

The company is equipped with firefighting equipment

at all strategic locations in the factory.

14) Information Tominimizeriskassociated a) Databack-upsstoredinoffsitelocations. Low

systems risk with data security, hardware

&communicationandsoftware. b) Maintainingofspareservers.

c) Vendoragreementsforsupportserviceand

regular maintenance.

Statutory and Regulatory Risk

Low


RiskMinimizationStrategiesappliedtothenewbusinesslineofPVCInordertoandtominimizethecurrentbusinessriskandalso

tomoveforwardinthedirectionofourVision,weinvestedina

PVCfactoryrecently.Priortotakingoverthisfactory,Samson

International Plc faced many risks, namely,

1) In the past we lost a significant market share for our

rubberhosesastherearePVChoseswithabetterfinish

and lower price. So we faced a Risk of Competition.

2) FurtherweusealotofPVC-relateditemsasraw

materialsforourfinishedproducts,e.g.,PVCstoppersfor

hot water bottles. These are imported from China and

there are frequent complaints about the quality of these

stoppers from our customers (Operational Risk).

3) Wehaveexperiencedthatevery3-4years,rubberprices

sky rocket. During this time, sales of rubber-related

products decrease. Therefore during such times, we can

makesomeofourproductsoutofPVC,e.g.,PVChot

waterbottles,PVCjarsealingrings,PVCbathmats,etc,

which can be competitive in the market. Therefore we

could eliminate the Business Risk.

Therefore in order to eliminate above risks, we decided to step

intomanufacturingPVCproductsandpurchasedassetsof

OktaPVCLanka(Private)Ltd.,Baddegama,

WhenwenegotiatedthepriceforPVCbusiness,we

eliminatedtheriskinthefollowingmanner:

a) Wesearchedforafactoryclosetoourcurrent

factory. This eliminates some operational risks and

we found a suitable factory.

b) Weeliminatedtheriskoftransferringoldtax

liabilitiesandpenaltiestous.Weacceptedtheir

liabilities but excluded tax liabilities. Therefore, the

finance and legal risks were eliminated.

c) Weeliminatedtheriskofpaymentsmadeto

unknown creditors and accrued expenses in the

future. This has to be settled by the current owner

asperourlegalagreement.Weeliminatedfinance

risk.

d) Weeliminatedtheriskofbaddebts.Duesfrom

debtors have to be collected by the previous owner.

The previous owner has to collect all dues from

debtors and it is part of his purchase consideration.

e) Weeliminatedtheriskofchequesinhandbeing

dishonoured.Wegavethesechequestotheprevious

owner as part of purchase consideration.

f) Weobtainedtheservicesofoldemployeesby

giving them new letters of appointment. Therefore

no old EPF, ETF and gratuity issues and penalties will

be faced by our Company.

g) Wedecidedtopayelectricity,insuranceand

telephonebillstominimizetheoperational risk.

h) Wedidadiligenceauditbygivingittoareputed

Audit Firm. This eliminated all financial risk.

i) AvaluationreportforLand&Buildingswas

obtained.

j) A title deed search was done and a survey plan was

carried out.

k) Physical verification of assets was carried out.

l) RequiredBoardresolutionswerepassedafterwe

obtainedtheapprovaloftheAuditCommittee.We

checked whether it was under major transactions

under Section 185 of the Companies Act.

m) Informed the Colombo Stock Exchange. There is no

legal risk.

n) MarketresearchwascarriedoutforPVCproducts

before we invested in them. Therefore there is no

market risk.

o) Negotiatedbankingfacilitiesforthenewbusiness

in advance. Therefore there is no business and

finance risk.



repOrt of the Board of Directors

The Directors of Samson International Plc have pleasure in

presenting their report together with the audited financial

statementsoftheCompanyfortheyearended31stMarch

2014, which was approved by the Directors at a meeting held

on 1st August 2014.

GeneralSamson International Plc is a public limited liability Company,

incorporated in Sri Lanka on 14th October 1988 and re-

registeredundertheCompaniesActNo.7of2007on3rd

September 2008 under registration number PO 192. The

ordinary shares of the Company were listed in the Colombo

Stock Exchange of Sri Lanka on 24th July 1992 and the

Company was converted into a public quoted company.

ThisReportprovidestheinformationasrequiredbythe

CompaniesActNo.07of2007,theListingRulesofthe

Colombo Stock Exchange and recommended best practices on

Corporate Governance.

The Principal Activities of the CompanyThe principal activity of the Company is the manufacture of

unhardenedvulcanizedrubberproductsfortheinternational

and local market. There have been no significant changes in the

nature of the Company’s principal activities during the year.

Accounting PoliciesA summary of the significant accounting policies adopted in the

preparation of the Financial Statements is given on page 83 of

thisReportasrequiredbySection168(1)(d)oftheCompanies

ActNo.7of2007.Thepoliciesadoptedareconsistentwith

those adopted in the previous financial year.

ReviewoftheyearTheChairman’sreviewandtheManagingDirector’soperational

review together with the Financial Statements highlight the

Company’s performance during the period under review and

thestateofaffairsasat31stMarch2014.

SegmentReporting

Segment-wise products contribution to the Company’s revenue,

results,assetsandliabilitiesisprovidedinNote28tothe

FinancialStatementsonpage107.

TurnoverTurnoveroftheCompanyisRs.953mnin2013/14as

comparedtoRs.974mninthelastyear.

Turnoverbysegment:

2013/2014 2012/2013

Medicalitems 209,496 213,671

Food grade items 286,664 291,250

Householditems 108,275 138,555

Footwear components 348,126 330,381

Totalturnover 952,561 973,857

Rs in 000’


Profits: 2013/2014 2012/2013

Profitfortheyear 64,841 51,077

(after payment of all expenses, making provision for known liabilities and

depreciation on property, plant and equipment)

Tax on profits (8,491) 4,438

Profit after taxation 56,350 55,515

Retainedprofitsbroughtforward 185,152 137,333

Profitsavailableforappropriation/distributions 241,502 192,848

Proposedfirst&finaldividends (7,696) (7,696)

Retainedprofitscarriedforward 233,806 185,152

repOrt OF tHe Board of Directors (contd...)

TaxationUnderSection52oftheInlandRevenueActNo10of2006,taxprofitonexportsales,taxprofitonlocalsales,interestincomeand

agriculture income of the Company are taxed at the rate of 12%, 28%, 28% and 10 % respectively.

InvestmentsinProperty,Plant&EquipmentDuringtheyear2013/2014,theCompanyinvestedRs.25.8mninproperty,plant&equipment.Thetotalinvestmentsinproperty,

plant&equipmentasat31stMarch2014amountedRs.500mnasopposedtoRs.474mnasat31stMarch2013.Theinformation

relatingtothemovementinproperty,plant&equipmentisgiveninNote13totheFinancialStatementonpage97.

StatedCapital&ReservesThe movement of the Stated capital is as follows.

2013/2014 2012/2013

Statedcapital-Rs 105,752 105,752

No.ofOrdinaryshares 3,847,974 3,847,974

DetailsoftheStatedcapitalaregiveninNote21totheFinancialStatementsonpage102ofthisAnnualReport.Therightsand

obligations attaching to the ordinary shares are set out in the Articles of Association of the Company, a copy of which can be

obtained from the Secretaries upon request.

ReservesTheGroupreservesasat31stMarchwereasfollows.

2013/2014 2012/2013

General reserves 110,000 110,000

Revenuereserves 233,806 185,152

Total reserves 343,806 295,152


DirectorateThe names of the Directors who held office at the end of the financial year are given below and their brief profiles appear on pages

18 and 19.

1) DRD.S.Rajapaksa(Chairman)

2) MrD.K.Rajapaksa(ManagingDirector)

3) MrD.R.Rajapaksa(Non-ExecutiveDirector)

4) MrD.M.Rajapaksa(Non-ExecutiveDirector)

5) MrC.Cumaranatunge(Non-ExecutiveDirector)

6) MrG.H.A.Wimalasena(Independent,Non-ExecutiveDirector)

7) MrT.K.Bandaranayake(Independent,Non-ExecutiveDirector)

8) MrB.L.P.Jayawardena(ExecutiveDirector)

9) MrD.G.P.S.Abeygunawardana–Director/GeneralManager

(appointedon8/8/2013asDirector)

10) MrR.H.Nandajeewa–Director

(Resignedon8/8/2013)

IntermsofArticle88(i)oftheArticlesofAssociation,MrD.R.RajapakseandunderSection210oftheCompaniesActNo.7of

2007,MrT.K.BandaranayakeandMrG.H.A.Wimalasenaareavailableforre-election.

Directors’ interest in sharesDirectors’ holdings of ordinary shares in the Company are given below.

No of Shares as at No of shares as at

31.03.2014 31.03.2013

DrD.S.Rajapaksa 7,156 7,156

Mr.D.K.Rajapaksa 9,931 9,931

Mr.D.R.Rajapaksa 10,319 10,319

Mr.D.M.Rajapaksa 9,295 9,295

Mr.C.Cumaranatunge 2,244 2,244

Mr.G.H.A.Wimalasena Nil Nil

Mr.T.K.BandaranayakeNil Nil

Mr.B.L.P.Jayawardena Nil Nil

Mr.D.G.P.S.Abeygunawardana(appointedon8/8/2013) 100 -

Mr.R.H.Nandajeewa(retiredon8/8/2013) - 132

Total 39,045 39,077



The Directors of the Company who have relevant interests in

the shares of the Company have disclosed their shareholdings

in compliance with Section 200 of the Companies Act.

Directors’RemunerationandOtherBenefits The details of the Directors’ remuneration and other benefits,

in respect of the Company for the financial year ended 31

March2014isgiveninNote8.1totheFinancialStatements

onpage94ofthisReport,asrequiredbySection168(1)(f)of

theCompaniesActNo.07of2007.Directors’remuneration

forthefinancialyear2013/14isRs.8,376,395(lastyear

Rs.8,057,195).

Directors’interestintransactions:The Directors of the Company have made a disclosure as

requiredunderSection192(2)oftheCompaniesActNo.07of

2007.Note27tothefinancialstatementsdealingwithrelated

party disclosures include their interests in transactions under

note27.3onpage105.

InterestRegisterTheInterestsRegisterismaintainedbytheCompany,asper

theCompaniesAct,No.7of2007.AllDirectorshavemade

declarationsasprovidedforinSection192(1)&(2)ofthe

Companies Act aforesaid. The related entries were made in the

InterestsRegisterduringtheyearunderreview.TheInterests

RegisterisavailableforinspectionasrequiredbySection119

(1)(d)oftheCompaniesActNo.07of2007.

Board committeesThe Board while assuming the overall responsibility and

accountability in the management of the company has also

appointed Board Committees to ensure oversight and control

over certain affairs of the Company, conforming to the

corporate governance code and adopting the best practices.

Accordingly, the following Committees have been constituted

bytheBoard:

AuditCommittee:MrT.K.Bandaranayake–Chairman, Independent,

Non-ExecutiveDirector

MrG.H.Wimalasena Independent,




TheReportoftheAuditCommitteeisgivenonpages72and

73,whichformspartoftheAnnualReport.

RemunerationCommittee:MrG.H.A.Wimalasena–Chairman, Independent,


MrT.K.Bandaranayake Independent,


Mr.D.M.Rajapaksa Non-ExecutiveDirector

TheReportoftheRemunerationCommitteeisgivenonpage

74,whichformsapartoftheAnnualReport.

Employment Policies The Company continues to invest in human resource

development and implements effective practices to develop and

build an efficient and effective workforce to ensure optimum

contribution toward the achievement of its corporate goals.

The Company employment policies are based on recruiting

the best people, providing them training to enhance their

skills, and recognition of the innate skills and competencies

of each individual while offering equal career opportunities

regardless of gender, race or religion and to retain them with

the Company as long as possible. The number of persons

employed by the Company at year-end was 324 (last year 302).

System of internal controlsThe Board of Directors has established an effective and

comprehensive system of internal controls to ensure that proper

controls are in place to safeguard the assets of the Company,

to detect and prevent fraud and irregularities, to ensure that

proper records are maintained and Financial Statements

presentedarereliableandaccurate.MonthlyManagement

Accounts are prepared, giving management relevant, reliable

and up -to-date Financial Statements and key performance

indicators. The Statement on Directors ‘responsibility for

financialreportingoftheCompanyissetoutonpage71ofthis

Report.

The Audit Committee reviews, on a regular basis, the reports,

policies and procedures to ensure that a comprehensive internal

control framework is in place.


DonationsThetotalamountofdonationswasRs.39,519intheyear

2013/14(20012/13–Rs44,500).Thishasnotexceededthe

amount approved by shareholders at the last Annual General

Meeting.Nodonationwasmadeforpoliticalpurposes.

MajorTransactionsThere have been no transactions during the year under review

whichfallwithinthedefinitionof“MajorTransactions”in

termsofSection185oftheCompaniesAct,No.07of2007.

ThetotalassetsoftheCompanyisRs.654mnand50%of

thetotalassetsisRs.327mn.TheCompanyhasnotbought

anyassetsorundertakenanyliabilitiesgreaterthanRs.327mn

during the year under review.

Share informationThe information pertaining to earnings per share, dividend

per share, net assets per share and market value per share is

given in the financial highlights on page 01 and in the Ten-year

summaryonpage133ofthisAnnualReport.

The twenty major shareholders and percentages held by each

oneofthemasat31stMarch2014aregivenonpage130of

theAnnualReport.

Public holding of shares in the CompanyAsat31stMarch2014,thepublicheld43.04%(in2012/2013-

13.91%) of the shares of the Company. This significant

difference arose due to changes in the interpretation of

thedefinitionof“PublicHolding”bytheColomboStock

Exchange.

Statutory PaymentsThe Directors, to the best of their knowledge and belief, are

satisfied that all statutory payments due to the government,

other regulatory institutions and in relation to employees

have been made within the stipulated period and have been

accounted for during the financial year.

Compliance with laws and regulationsTo the best of the knowledge and belief of the Directors, the

Company has not engaged in any activities contravening the

laws and regulations of the country.


Social and Environmental ResponsibilityAs a responsible corporate body, the Company has taken

allnecessarystepsandprecautionstominimizeanyadverse

impactoftheCompany’sactivitiesontheenvironment.When

introducing new business, products, methods and machines,

maximum care is taken to ensure that these conform to

accepted environmental and safety regulations and standards.

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

satisfied that the Company has not engaged in any activities

which have caused adverse effects on the environment and it

has complied with the relevant environmental regulations.

SustainabilityReportingSustainability practices have been built into every aspect of our

businesses and we consider sustainability goals along with our

operationalandfinancialgoals.ThisSustainabilityReportison

pages108to121ofthisAnnualReport.

Corporate GovernanceThe Company maintains and practices high principles of good

corporate governance. The Directors are responsible for the

formulation and implementation of overall business strategies,

policies and setting standards in the short, medium and long-

term adopting good governance in managing the affairs of the

Company. The practices adopted by the Company in relation

to corporate governance are set out on pages 53 to 58 of this

Report.

Auditor’sReportTheCompany’sexternalauditor,Messrs.HLBEdirisinghe&

Company, performed the audit on the Financial Statements

fortheyearended31March2014.TheAuditor’sReporton

theFinancialStatementsisgivenonpage77ofthisReportas

required by Section 168 (1) (c) of the Companies Act.

Appointment of AuditorsTheretiringAuditorsHLBEdirisinghe&Company,Chartered

Accountants, have expressed their willingness to continue

in office. A resolution to re-appoint them as auditors and

authorizetheDirectorstofixtheirremunerationwillbe

proposedattheAnnualGeneralMeetingintermsofthe

CompaniesAct,No.7of2007.


Auditor’sRemunerationandIndependenceThe Company paid audit fees to the external auditors for the

year2013/14amountingtoRs.282,900(2013-Rs.265,200).

BasedonthedeclarationprovidedbyMs.HLBEdirisinghe&

Company and as far as the Directors are aware, the Auditors do

not have any relationship with or interests in the Company that

may have a bearing on their independence, within the meaning

of the Code of Professional Conduct and Ethics issued by the

Institute of Chartered Accountants of Sri Lanka.

Outstanding litigationIn the opinion of the Directors, in consultation with the

Company lawyers, there is no litigation currently pending

against the Company which will have a material impact on the

reported financial results or future operations of the Company.

Post Balance sheet eventsIn the opinion of the Directors, no item, transaction or event of

an unusual nature has taken place between the financial year-

end and the date of this report that would materially affect

the results of the Company for the financial year in respect of

which this report is made.

On14thJuly2014,theCompanyinvestedinaPVCfactory,

OktaPVCLanka(Pvt)Ltd.,Baddegama,whowereengagedin

manufacturingPVCpipe&fittingsunderSLS.Thetotalassets

valueandLiabilitiestakenbyusareRs.137,167,655and

Rs.113,339,588respectively.Theamountpaidtotheowner

wasRs.23,828,067.ThecompanyinformedtheColombo

Stock Exchange prior to investing in this business line.

Going ConcernThe Board of Directors has reviewed the Company’s business

and corporate plans and are satisfied that the Company has

adequate resources to continue its operations in the

foreseeable future. After considering the financial position,

operating conditions, regulatory and other factors and such

matters required to be addressed in The Corporate Governance

Code, the Directors have a reasonable expectation that

the Company possesses adequate resources to continue in

operation for the foreseeable future. For this reason, they

continue to adopt the Going Concern basis in preparing the

Financial Statements.


Financial Statements of the Company The Financial Statements of the Company, duly certified by the

Head of Finance and approved by two Directors in compliance

withSections152,153and168oftheCompaniesActNo.7of

2007,aregivenfrompages78to107oftheAnnualReport.

SecretariesPWCorporateSecretarial(Pvt)Ltd.continuestoworkas

Secretaries to the Company.

DividendsThe Directors recommend a dividend of 2.00 per share for the

yearended31stMarch2014(2.00persharein2012/13).

NoticeofMeetingDetailsoftheAnnualGeneralMeetingaregivenintheNotice

ofMeetingonpage136.

22ndAnnualGeneralMeetingThe22ndAnnualGeneralMeetingoftheCompanywillbeheld

onMondaythe19thdayofSeptember2014attheSriLanka

CollegeofObstetriciansandGynecologistsSamsonRajapaksa

AuditoriumatNo112,ModelFarmRoad,Colombo08,which

was the same venue for the previous year.

On behalf of the Board

D.K. Rajapaksa D. G. P. S Abeygunawardana

ManagingDirector Director/GeneralManager

P W Corporate Secretarial (Pvt) Ltd.

Secretaries

Colombo

1st August 2014.


stateMentof Directors responsibility

The following statement, which should be read in

conjunction with the Auditor’s responsibilities, as set out

in their report, is made with a view to distinguish between the

respective responsibilities of the Directors’ and the Auditor’s, in

relation to Financial Statements.

TheDirectorsarerequiredbytheCompaniesAct,No07of

2007,toprepareFinancialStatementsforeachfinancialyear,

which give a true and fair view of the state of affairs of the

Company as at the end of the financial year and of the profit

and loss for the financial year. The Directors are required to

prepare these Financial Statements on the going concern basis,

unless it is not appropriate.

Since the Directors are satisfied that the Company has the

resources to continue its business for the foreseeable future,

the Financial Statements continue to be prepared on the said

basis.

The Directors consider that in preparing the Financial

Statements, the Company has used appropriate accounting

policies, consistently applied, and supported by reasonable

and prudent judgments and estimates, and that all accounting

standards which they consider to be applicable have been

followed.

The Directors are responsible for ensuring that the Company

keeps accounting records which disclose with reasonable

accuracy the financial position of the Company, and which

enable them to ensure that the Financial Statements comply

withtheCompaniesAct,No.07of2007.

The Directors have general responsibility for taking such steps

as are reasonably open to them to safeguard the assets of

the Company and to prevent and detect fraud and other

irregularities.

The Directors are of the opinion that the Financial Statements

oftheCompanysetoutonpages78to107havebeen

prepared in accordance with the above requirements and that

they have appropriately discharged their responsibilities as set

out in this Statement.

The Directors confirm that to the best of their knowledge,

all taxes, duties and levies payable by the Company and all

contributions, levies and taxes payable on behalf of and in

respect of the employees of the Company, and all other known

statutory dues as were due and payable by the Company, as at

the Balance Sheet date have been paid, or where relevant are

being provided for.

On behalf of the Board

D. K. Rajapaksa D. G. P.S. Abeygunawardana

ManagingDirector Director/GeneralManager

Colombo

1st August 2014.


auDitcommittee report

TheAuditCommitteecomprisesthreeNon-Executive

Directors the majority of whom are independent. The

CommitteeischairedbyMrT.K.Bandaranayake,whoisa

FellowMemberoftheInstituteofCharteredAccountantsofSri

LankaandformerSeniorPartnerofMessrsErnst&Young.

MembersoftheAuditCommitteeandDetailsofMeetingsheldThe attendance of the members of the Audit Committee was

asfollows:


2013 2013 2013 2014 2014 Attendance

MrTKBandaranayake

(Chairman) NE/I √ √ √ √ √ 5/5



Member’sattendanceattheAuditCommitteemeetingsofSamsonInternationalPlc

Note:MrGHAWimalasenawasunabletoattendtwomeetingsashewasawayonoverseastours.

The Audit Committee held five meetings during the year under

review. The proceedings of the Audit Committee are regularly

reported to the Board of Directors.

RoleoftheAuditCommitteeThe functions of the Audit committee are in line with the

requirementoftheSecurities&ExchangeCommissionofSri

Lanka and the best practices of Corporate Governance. These

included, inter alia, ensuring the effectiveness of internal

controls and procedures for financial reporting purposes

and the integrity of financial statements as well as the

independence of the external auditors.

TheAuditCommitteewasresponsibleforthefollowing:

1.Meetingswiththeauditorstodiscussanyproblemsand

reservations arising from the audit and any other matters

that the auditor may wish to discuss independent of the

management.

2. Reviewingtheintegrityandadequacyofthedisclosures

in the financial statements of the company in accordance

withtheCompaniesAct,No.7of2007,theSriLanka

Accounting Standards and Accounting Policies which are

consistently applied.

3. Reviewingthefinancialreportingsystemtoensure

the accuracy and timelines of the financial statements

produced.

4. Reviewingandensuringtheadequacyandeffectiveness

of the Company’s internal control systems and risk

management.

5. Oversight on the compliance by the company with the

requirements of the statutory and regulatory framework.

Compliance is monitored quarterly through the ‘Company

Reports’.

6. MakingrecommendationstotheBoardofDirectorsonthe

appointment/re-appointmentandtheremunerationofthe

external auditors based on their performance.

7. Examininganynon-auditworkperformedbytheauditors

to ensure that their independence is not impaired.

Internal Audit FunctionThe Audit Committee reviews the Quarterly Internal Audit

Reports.TheinternalauditfunctioniscarriedoutbyM/sErnst

&Young.Theinternalauditreportsarereviewedthoroughly

and recommendations are made for rectification.


Audit Committee

auDit committee report (contd...)

ConclusionThe committee reports to the Board of Directors, identifying

the matters in respect of which it considers that action or

improvement is needed and making recommendations as to

the steps to be taken.

The Audit Committee is satisfied that the company’s accounting

policies, operational controls and risk management practices

provide reasonable assurance that the affairs of the Company

are managed in accordance with the Company policies and

that the Company assets are properly accounted for and

adequately safeguarded.

The Committee has recommended to the Board of Directors

thatMessrsHLBEdirisinghe&Co.,CharteredAccountants,be

re-appointed as the Auditors for the financial year ending 31st

March2015,subjecttotheapprovaloftheshareholdersat

theAnnualGeneralMeetingatafeetobedeterminedbythe

management.

T. K. Bandaranayake

Chairman

Audit Committee

Colombo

1st August 2014


repOrt OFthe remuneration committee

TheRemunerationCommittee,appointedbyand

responsible to the Board of Directors, consists of two

independent,Non-ExecutiveDirectors,MrG.H.A.Wimalasena

andMrT.K.BandaranayakeandanotherNon-Executive

DirectorMrD.M.Rajapaksa.ThecommitteeischairedbyMr

G.H.A.Wimalasena.

RoleoftheCommittee:TheRemunerationCommitteereviewsandrecommendstothe

Board of Directors the policy on remuneration for the executive

staff, specific remuneration packages for the Executive Directors

andrevisionoffeesfortheNon-ExecutiveDirectors.Directors’

remunerationforthefinancialyear2013/14isRs.8,376,395

(lastyearRs.8,057,195).

RemunerationPolicy:In a highly competitive environment, attracting and retaining

high caliber executives is a key challenge faced by the Group.

In this context, the Committee took into account competition,

market information and performance evaluation methodology

in declaring the overall remuneration policy.

TheRemunerationCommitteeheldtwomeetingsduringthe

year under review.

G.H.A. Wimalasena

Chairman


Colombo

1st August 2014.



Financial review

“During the year, the Company reduced the

finance cost by 62%, reduced gearing to 6.8%

and took many investments decisions… “

Revenue

Duringtheyearended31stMarch 2014, the Company

recordedaturnoverofRs.953mnasagainstRs974mn

inthepreviousyear.Itisnotedthattherewasagrowthof7%

inlocalsalesintheyear.LocalsaleswentupbyRs21mnfrom

Rs.318mninthepreviousyeartoRs.339mninthecurrent

year.However,exportsaleshavecomedownby6.5%orbyRs

43mnfromRs.656mninthepreviousyeartoRs.613mnin

the current financial year.

Inlocalsales,itisnotedthatsalesofVstrapandshoesoles

have gone up significantly in the current financial year.

Rubbermats,roadhumpsandrubberhosesaleshavebeen

growinggradually.Wehavestillnotseenasignificantsales

improvementinfloorings.Wehavetappedalmostevery

customer in the pipe joints market and had a significant sales

growthintheyear.Wewilldevelopourlocalsalesfurther

through aggressive sales promotions and by strengthening and

restructuringtheMarketingDepartment.

In exports sales, we noted a marginal drop in sales in jar sealing

rings, hot water bottles and rubber mats. During the year, we

had experienced a favourable gain from Euro exchange rates.

However, we encountered an adverse impact on our sales

from India, South Africa and Japan due to the devaluation

of their currencies, which affected our sales of hot water

bottles, mud flaps and bath mats. It is noted that that there

was a significant growth in rubber pallet bands and some

improvements in sales from floorings.

OutofthetotalrevenueofRs953mnfortheyearended31st

March2014,64%wasearnedfromexportssalesandthe

balance 36% from local sales.

GrossProfitMarginTheCompanyhasrecordedagrossprofitofRs145mnas

againstRs150mninthepreviousyear.Themainreasonforthe

drop in gross profits was a decrease in export sales, increase in

energy costs and salaries and wages, unfavourable exchange

rates of India, South Africa and Japan and also the amount

written off from non-moving finished goods stocks and raw

materials.TheGrossProfitRatiointhecurrentyearaswell

as in the previous year is 15%. The reduction of production

overheads and wastage levels were achieved effectively.

Wastelevelsinjarsealingringscamedownthisyeartoan

unprecedented level.

OperationalProfitMargin(Profitbefore Finance cost)TheOperationalProfitinthecurrentfinancialyearisRs

47.7mnandlastyearitwasRs.54.0mn.Thesellingand

distributioncostwasRs.24mninthecurrentyearasagainst

Rs24.8mninthepreviousyearwhileAdministrativeOverheads

wasRs.75mnduringtheyearunderreviewasagainstRs72.7

mn. This year’s Administrative Overhead cost includes the

amount written off of intangible assets. The exchange gain

earned due to the depreciation of the local currency against

foreigncurrencieswasRs.17.7mninthecurrentyearas

againstRs6.2mninthepreviousyear.However,welostsome

revenue due to the adverse impact from the exchange rates of

India, South Africa and Japan. The operational profit to sales

ratio was 5.0% (previous year 5.6%).

Profit/(Loss)beforeTaxationTheprofitbeforetaxationinthecurrentyearisRs.64.8mn

ascomparedtotheprofitofRs51.0mnintheprevious

year.Thecurrentyear’sprofitofRs.64.8mnwasrecorded

afteramortizationofRs.6.3mnintangibleassets,Rs.13.2

mn of non- moving finished goods stocks and raw materials.

Thefinancecostdecreasedby62%fromRs.9.9mninthe

previousyeartoRs.3.7mninthecurrentfinancialyear.The


CompanywasabletoearnagainofRs0.5mnfromthe

forward exchange contracts which commenced in the last

quarter.Wehopetoearnmoregainsfromforeignexchange

contracts in the coming years.

TaxationDuring the year, tax provision increased due to the deferred tax

adjustment.

2013/14 2012/2013

Rs. Rs.

Tax on profits of the year 4,535,269 3,042,594

Deferredtaxexpense/(Income) 3,955,316 (7,481,140)

Total 8,490,585 (4,438,546)

After the tax provision, the Company recorded a profit of

Rs56.3mninthecurrentyearasagainstRs.55.5mninthe

previous year.

RatiosThe gearing ratio in the current year is 6.8% as against 13.2%

inthepreviousyear.EarningspershareareRs.14.64inthe

currentyearasagainstRs.14.43inthepreviousyear.The

marketpriceasat31stMarch2014wasRs.88.20(lastyearRs

82.20).

Financial review (contd...)

InvestmentsDuringtheyear,theCompanyinvestedRs15mninaflash

lessautomatedVstrappress,Rs3mninamillandanother

Rs.2mninapressline.AnotherRs.1.5mnwasinvestedin

a water treatment plant. The company was able to invest in

Debentures,TreasuryBillsandFixeddepositsamountingtoRs.

50.3mninthefinancialyearunderreview.Wehaveplanned

toinvestanotherRs6mninnewsoftwareintheIFSsystemin

2014/15.

MarketCapitalizationThemarketcapitalizationoftheCompanywasRs.339.4mnat

theclosingpriceoftheshare,upfromRs.316.3mnrecorded

in the previous year. During the year under review, the highest

tradedpriceoftheCompany’ssharewasRs.105.00,whilethe

lowestpricewasRs.74.00.49,773sharesweretradedduring

theyearandthesharepriceclosedfortheyearatRs.88.20.


auDitOrsreport

TO THE SHAREHOLDERS OF SAMSON INTERNATIONAL PLC

ReportontheFinancialStatementsWehaveauditedtheaccompanyingfinancialstatementsof

Samson International PLC., which comprise the statement of

financialpositionasat31stMarch2014,andthestatements

of income, other comprehensive income, statement of changes

in equity and cash flow statement for the year then ended,

and summary of significant accounting policies and other

explanatory notes.

Management’sResponsibilityfortheFinancial Statements

Managementisresponsibleforthepreparationandfair

presentation of these financial statements in accordance with

Sri Lanka Accounting Standards. This responsibility includes;

designing, implementing and maintaining internal control

relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether

due to fraud or error; selecting and applying appropriate

accounting policies, and making accounting estimates that are

reasonable in the circumstances.

Scope of Audit and Basis of Opinion Our responsibility is to express an opinion on these financial

statementsbasedonouraudit.Weconductedouraudit

in accordance with Sri Lanka Auditing Standards. Those

standards require that we plan and perform the audit to obtain

reasonable assurance whether the financial statements are free

from material misstatement.

An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by management,

as well as evaluating the overall financial statement

presentation.

Wehaveobtainedalltheinformationandexplanationswhich

to the best of our knowledge and belief were necessary for

thepurposesofouraudit.Wethereforebelievethatouraudit

provides a reasonable basis for our opinion.

Opinion

In our opinion, so far as appears from our examination, the

company maintained proper accounting records for the year

endedMarch31,2014andthefinancialstatementsgiveatrue

andfairviewofthecompany’sStateofAffairsasatMarch

31, 2014 and its financial performance and cash flows for

the year then ended in accordance with Sri Lanka Accounting

Standards.

ReportonOtherLegalandRegulatoryRequirements

These financial statements also comply with the requirements

ofSection151(2)oftheCompaniesActNo07of

2007.

HLB Edirisinghe & Co.

Chartered Accountants

Colombo

1st August 2014


stateMentof comprehensive income

FOR THE YEAR ENDED 31ST MARCH 2014 2013

NOTES Rs. Rs.

Revenue 6 952,561,234 973,858,289

Costofsales (807,751,637) (824,008,726)

Gross Profit 144,809,597 149,849,563

Otherincome 7 2,282,319 1,749,323

Distributioncost (24,019,314) (24,801,170)

Administrativeexpenses (75,308,710) (72,737,442)

Operating Profit 8 47,763,892 54,060,274

Financeincome 9.1 20,856,704 6,916,633

Financecost 9.2 (3,780,035) (9,900,028)

Net Finance Income 17,076,669 (2,983,395)

Profitbeforeincometaxation 64,840,561 51,076,879

Income tax expense 10 (8,490,585) 4,438,546

Profit for the year 56,349,976 55,515,425

Other comprehensive income, net of tax - -

Total Comprehensive Income for the year, net of tax 56,349,976 55,515,425

Earnings per share - Basic 11 14.64 14.43

Dividends per share 12 2.00 2.00

Note: AllvaluesareinRupees,unlessotherwisestated.

Figures in brackets indicate deductions.

TheSignificantAccountingPoliciesandNotesonpages82to107areanintegralpartofthesefinancialstatements.


AS AT 31.03.2014 31.03.2013

ASSETS NOTES Rs. Rs.Non Current Assets Property,plantandequipment 13 172,218,635 174,449,120Intangibleassets 14 2,557,332 8,950,642Available for sale financial assets 15 21,354,300 - Other financial assets 16 29,000,000 -Deferredtaxassets 17 4,975,187 6,855,791 230,105,453 190,255,553Current Assets Inventories 18 125,296,412 143,785,662Trade and other receivables 19 229,125,850 226,059,880 Taxrecoverable 8,716,706 13,251,975Cashandcashequivalents 20 60,880,788 19,755,466 424,019,756 402,852,983Total Assets 654,125,209 593,108,536 EQUITY AND LIABILITIES Statedcapital 21 105,752,241 105,752,241General reserve 110,000,000 110,000,000 Retained earnings 233,806,250 185,152,222Total Equity 449,558,491 400,904,463 Non- Current Liabilities Deferredtaxliability 17 10,905,774 8,831,062Retirementbenefitobligation 22 15,129,866 14,528,107 26,035,640 23,359,169 Current Liabilities Tradeandotherpayables 23 145,688,020 108,040,574Short term borrowings 24 32,843,058 60,804,330 178,531,078 168,844,904Total Liabilities 204,566,718 192,204,073Total Equity And Liabilities 654,125,209 593,108,536

IcertifythataboveFinancialStatementscomplywiththerequirementsofCompaniesActNo.07of2007.

T. P. Kahanda Gamage Head of Finance The Board of Directors are responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the Board,

D. K. Rajapaksa D. G. P. S. Abeygunawardana ManagingDirector Director/GeneralManager TheSignificantAccountingPoliciesandNotesonpages82to107areanintegralpartofthesefinancialstatements. Colombo 1st August 2014

stateMentof Financial position


stateMentof changes in equity

FOR THE YEAR ENDED 31ST MARCH 2014

Stated General Retained

Capital Reserve Earnings Total

Rs. Rs. Rs. Rs.

Restated Balance as at 1st April 2012 105,752,241 110,000,000 137,332,745 353,084,986

Profit for the year - - 55,515,425 55,515,425

Other Comprehensive Income - - - -

Total Comprehensive Income for the year - - 55,515,425 55,515,425

Transactions with equity holders

DividendsPaid - - (7,695,948) (7,695,948)

Balance as at 31st March 2013 105,752,241 110,000,000 185,152,222 400,904,463

Profitfortheyear - - 56,349,976 56,349,976

Other Comprehensive Income - - - -

Total Comprehensive Income for the year - - 56,349,976 56,349,976

Transactions with equity holders

DividendsPaid - - (7,695,948) (7,695,948)

Balance as at 31st March 2014 105,752,241 110,000,000 233,806,250 449,558,491

Note:ThepurposeoftheGeneralreserveistoutilizeinfutureinvestmentsandexpansions.

Note: AllvaluesareinRupees,unlessotherwisestated.

Figures in brackets indicate deductions.

TheSignificantAccountingPoliciesandNotesonpages82to107areanintegralpartofthesefinancialstatements.


stateMentof cash Flows


NOTES Rs. Rs.

CASH FLOW FROM OPERATING ACTIVITIES Profit /(Loss) before taxation 64,840,561 51,076,879 Adjustment for : Depreciation 13 27,768,868 26,526,938 Amortizationofintangibleassets 6,393,310 1,278,660 (Profit)/Lossondisposalofproperty,plant&equipment (331,681) (1,166,071) (Profit)/Lossonscrappingplant&equipment - 109,382 Increaseinretirementbenefitobligation 22 1,539,613 7,673,597 Financeincome 9.1 (20,856,704) (6,916,633) Financecost 9.2 3,780,035 9,900,028 Profit Before Working Capital Changes 83,134,002 88,482,780 (Increase)/decreaseininventories 18,489,250 (18,645,717) (Increase)/decreaseintrade&otherreceivable (3,065,970) (16,127,420) Increase/(decrease)intrade&otherpayable 37,647,447 (35,925,069) Cash generated from operations 136,204,729 17,784,574 Interestpaid 9.2 (3,780,035) (9,900,028) Incometaxpaid - (1,594,745) Retiringgratuitypaid 22 (937,855) (3,051,511)Net cash generated from operating activities 131,486,839 3,238,291 CASH FLOW FROM INVESTING ACTIVITIES Purchaseofproperty,plantandequipment 13 (25,856,701) (20,118,377) Investment in debentures (21,354,300) - Investment in treasury bills (10,000,000) - Investment in fixed deposits (19,000,000) Interestincome 9.1 20,856,704 6,916,633 Proceedsfromsaleofproperty,plant&equipment 650,000 2,366,071Net cash used in investing activities (54,704,297) (10,835,673)CASH FLOW FROM FINANCING ACTIVITIES Dividendpaid (7,695,948) (7,695,948) Proceedsfromshorttermborrowings 24 161,650,914 160,977,140 Repaymentofshorttermborrowings 24 (177,273,998) (128,304,333)

Net cash used in financing activities (23,319,032) 24,976,859Net (decrease) / increase in cash and cash equivalents 53,463,510 17,379,477Cash and cash equivalents at the beginning of the year 4,236,943 (13,142,534)Cash and Cash equivalents at the end of the year 20 57,700,453 4,236,943

Note: AllvaluesareinRupees,unlessotherwisestated. Figures in brackets indicate deductions. TheSignificantAccountingPoliciesandNotesonpages82to107areanintegralpartofthesefinancialstatements. 1st August 2014


nOtesto the Financial statements

1. General Information

1.1 General

The Company is a public limited liability company

incorporated and domiciled in Sri Lanka. The address of

itsregisteredofficeisNo.110,KumaranRatnamRoad,

Colombo 02 and the principle place of business is

situatedatAkuressaRoad,Bogahagoda,Angulugaha,

Galle.

1.2 Principal Activities and Nature of Operations

During the year, the principal activities of the Company

were manufacture and export of unhardened rubber

products to the international and local markets.

1.3 Parent Enterprise & Ultimate Parent Enterprise

The Company’s parent undertaking is DSI Samson

Group(Pvt)Ltdwhichholdseffectively55.79%of

shares of Samson International PLC collectively inclusive

of Company holding.

1.4 Approval of Financial Statements

These financial statements have been approved for

issue by the Board of Directors on 1st August 2014

1.5 Number of Employees

The total number of employees stod at 324 as at 31st

March2014.(302asat31stMarch2013)

2. Basis of Preparation

2.1. Statement of Compliance

The Company prepares the financial statements in

accordance with the Sri Lanka Accounting Standards

(LKAS&SLFRS)issuedbytheInstituteofChartered

Accountants of Sri Lanka and the requirements of

theCompaniesActNo.07of2007andSriLanka

AccountingandAuditingStandardsActNo.15of

1995.

2.2. Basis of Measurement

The financial statements have been prepared on the

historical cost basis, except that the retirement benefit

obligations are measured at the present value of the

defined benefit plans as explained in the respective

notes to the financial statements.

2.2.1 Going concern

The Directors have made an assessment of the

Company’s ability to continue as a going concern in

the foreseeable future and they do not foresee a need

for liquidation or cessation of trading. Therefore, the

financial statements continued to be prepared on the

going concern basis

2.3. Functional and Presentation Currency

The Financial Statements are presented in Sri Lankan

RupeeswhichistheCompany’sfunctionalcurrency.

2.4. Use of Estimates and Judgments

The preparation of financial statements in conformity

withSLFRSrequiresmanagementtomakejudgments,

estimates and assumptions that affect the application

of accounting policies and the reported amounts of

assets and liabilities and disclosure of contingent assets

and liabilities at the date of the financial statements

and the reported amounts of revenue and expenses

during the reporting period. Although the judgments

and estimates are based on management’s best

knowledge of the current events and actions, actual

results may ultimately differ from those estimates. It

also requires management to exercise its judgment

in the process of applying the company’s accounting

policies.


Information about critical estimates and judgments

in applying accounting policies that have the most

significanteffectontheamountsrecognizedinthe

financialstatementsisprovidedinNote04.

3. Significant Accounting Policies

The accounting policies set out below have been

applied consistently to all periods presented in these

financial statements of the company

3.1. Foreign Currency

3.1.1. Foreign Currency Transactions

In preparing the Financial Statements of the individual

entities, transactions in currencies other than the

entity’s functional currency (foreign currencies)

are recorded in the functional currencies using

the exchange rates prevailing at the dates of the

transactions.

At each reporting date, monetary items denominated

in foreign currencies are translated at the closing rate.

Exchange differences arising on the settlement of

monetary items, and on the translation of monetary

items, are included in profit or loss for the period.

3.2. Assets and the Bases of their Valuation

Assets classified as current assets in the Statement of

Financial Position are cash, bank balances and those

whichareexpectedtoberealizedincash,duringthe

normal operating cycle of the Company’s business, or

within one year from the reporting date, whichever

is shorter. Assets other than current assets are those

which the Company intends to hold beyond a period

of one year from the reporting date.

3.2.1. Property, Plant and Equipment

3.2.1.1. Recognition and Measurement

Property, Plant and Equipment are stated at cost less

accumulated depreciation and accumulated impairment

losses.

All property, plant and equipment are stated at

historical cost less depreciation. Historical cost

includes expenditure that is directly attributable to the

acquisition of the items.

Wherethecarryingamountofanassetisgreaterthan

its estimated recoverable amount, it is written down

immediately to its recoverable amount.

3.2.1.2. Subsequent Costs

The cost of replacing part of an item of property, plant

andequipmentisrecognizedinthecarryingamount

of the item if it is probable that the future economic

benefits embodied within the part will flow to the

company and its cost can be measured reliably. The

carryingamountofthereplacedpartisderecognized.

3.2.1.3. Derecognition

The carrying amount of an item of property, plant and

equipmentisderecognizedondisposalorwhenno

future economic benefits are expected from its use

or disposal. Gains or losses on derecognition of the

asset are determined by comparing the proceeds from

disposalwiththecarryingamountofproperty,plant&

equipmentandarerecognizedwithinotherincomein

the statement of comprehensive income.

3.2.1.4. Depreciation

Depreciation is calculated over the depreciable

amount, which is the cost of an asset, or other amount

substituted for cost, less its residual value.

Depreciationisrecognizedinprofitorlossonastraight

line basis over the estimated useful lives of each

part of an item of property, plant and equipment,

since this most closely reflects the expected pattern

of consumption of the future economic benefits

embodied in the asset. Leased assets are depreciated

over the shorter of the lease term and their useful lives

unless it is reasonably certain that the company will

obtain ownership by the end of the lease term. Land is

not depreciated.

nOtes to the Financial statements (contd...)


Theestimatedusefullivesareasfollows:

Asset Category Useful Life Depreciation

(Years) Rate (%)

Buildings 20 5%

Storage Tank 10 10%

Plant&Machinery 10 10%

MachineAccessories 10 10%

Furniture and Fittings 10 10%

Office Equipment 10 10%

MotorVehicles 5 20%

Depreciation of an asset begins when it is available for

use where as depreciation of an asset ceases at the

earlier of the date that the asset is classified as held for

saleandthedatethattheassetisderecognized.

Depreciation method, useful lives and residual values

are reviewed at each financial year end and adjusted if

appropriate.

3.2.2. Intangible Assets

3.2.2.1. Software

All computer software cost incurred, which are not

internally related to associate hardware, which can be

clearly identified, reliably measured and it is probable

that they will lead to future economic benefits, are

included in the Statement of Financial Position under

the category of intangible assets.

Intangible assets acquired separately are measured on

initial recognition at cost.

Following initial recognition, intangible assets are

carried at cost less accumulated amortisation and

accumulated impairment losses, if any.

3.2.2.2 Subsequent Expenditure

Subsequent expenditure is capitalised only when it

increases the future economic benefits embodied in the

specific asset to which it relates. All other expenditure

isrecognizedinprofitorlossasincurred.

3.2.2.3. Amortisation

Amortizationiscalculatedoverthecostoftheasset,

or other amount substituted for cost, less its residual

value.

Amortizationisrecognizedintheprofitorlossona

straight line basis over the estimated useful lives of

intangible assets, other than goodwill, from the date

that they are available for use, since this most closely

reflects the expected pattern of consumption of the

future economic benefits embodied in the asset. The

estimated useful life has been re-estimated to 5 years

instead of the previous estimate of 10 years which is

shownbelow:

Category Useful Depreciation Useful

of Asset Life (Years) Rate (%) Life (Years)

Re-estimated up to 2012/13

ERPComputer

Software 5 20% 10

Amortisation methods, useful lives and residual values

are reviewed at each financial year end and adjusted if

appropriate.

Changes in the expected useful life or the expected

pattern of consumption of future economic benefits

embodied in the asset is accounted for by changing the

amortisation period or method, as appropriate, and are

treated as changes in accounting estimates.

3.2.2.4 Derecognising

Gains or losses arising from derecognising of an

intangible assest are measured as the difference

between the net disposal proceeds and the carrying

amount of the asset and are recognised in the income

statement when the asset is derecognised.

3.2.3 Impairment of non-financial assets

Assets that have an indefinite useful life are not

subject to amortisation and are tested annually for

impairment. Assets that are subject to amortisation are

reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount may

not be recoverable. An impairment loss is recognised

for the amount by which the asset’s carrying amount

exceeds its recoverable amount. The recoverable



amount is the higher of an asset’s fair value less costs

to sell and value in use. For the purposes of assessing

impairment, assets are grouped at the lowest levels

for which there are separately identifiable cash flows

(cash-generatingunits).Non-financialassetsotherthan

goodwill that suffered impairment are reviewed for

possible reversal of the impairment at each reporting

date.

3.2.4. Inventories

Inventories are measured at the lower of cost and net

realizablevalue.

Costs incurred in bringing each product to its present

locationandconditionareaccountedforasfollows:

a) All inventory items except manufactured

inventories and work-in-progress are measured

using first in, first out basis.

b) Manufacturedinventoriesandwork-in-progressare

measured at weighted average factory cost which

includes all direct expenditure and appropriate

shares of production overhead based on normal

operating capacity but exluding borrowing costs.

Netrealisablevalueistheestimatedsellingpricein

the ordinary course of business, less the estimated

costs of completion and the estimated costs

necessary to make the sale.

3.2.4.1 Allowance for Impairment

All inventory items are tested for impairment

periodically.

3.2.5. Trade Receivables

3.2.5.1. Recognition and Measurement

Trade receivables are amounts due from customers for

goods sold or services performed in the ordinary course

of business. If collection is expected in one year or less

(or in the normal operating cycle of the business if

longer), they are classified as current assets. If not, they

are presented as non-current assets.

3.2.5.2. Provision for Impairment

Trade receivables are recognised initially at fair value

and subsequently measured at amortised cost using the

effective interest method, less provision for impairment.

A provision for impairment of trade receivables is

established when there is objective evidence that

the Company will not be able to collect all amounts

due according to the original terms of receivables.

Significant financial difficulties of the debtor, probability

that the debtor will enter bankruptcy or financial

reorganisation, and default or delinquency in payments

are considered indicators that the trade receivable is

impaired. The amount of the provision is the difference

between the asset’s carrying amount and the present

value of estimated future cash flows, discounted at the

original effective interest rate.

The carrying amount of the asset is reduced

through the use of an allowance account, and the

amount of the loss is recognised in the statement of

comprehensive income.

3.2.5.3. Trade Receivables Write Off

Whenatradereceivableisuncollectible,itiswritten

off against the allowance account for trade receivables.

Subsequent recoveries of amounts previously written

off are credited against distribution expenses in the

statement of comprehensive income.

3.2.6. Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances, call

deposits, demand deposits, and short term highly liquid

investments readily convertible to known amounts

of cash and subject to insignificant risk of changes

in value net of bank overdrafts that are repayable on

demand for the purpose of the Statement of Cash

Flows.

3.3. Financial Instruments

3.3.1. Financial Assets

3.3.1.1. Initial Recognition and Measurement

FinancialassetswithinthescopeofLKAS39are

classified as financial assets at fair value through

profit or loss, loans and receivables, held-to-maturity

investments or available-for-sale financial assets, as

appropriate. The Company determines the classification

of its financial assets at initial recognition. All financial

assets are recognised initially at fair value plus, in the



case of assets not at fair value through profit or loss,

directly attributable transaction costs. Purchases or sales

of financial assets that require delivery of assets within

a time frame established by regulation or convention in

the market place (regular way trades) are recognised on

the trade date, i.e., the date that the company commits

to purchase or sell the asset.

The company’s financial assets include cash and short

term deposits, trade and other receivables, loans and

other receivables and other financial assets.

3.3.1.2. Subsequent Measurement

The subsequent measurement of financial assets

dependsontheirclassificationasfollows:

Financial assets at fair value through profit and

loss

Financial assets at fair value through profit and loss

include financial assets designated as such at fair value

through profit or loss at initial recognition. Financial

assets are classified as held for trading if they are

acquired for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at

fair value through profit loss are carried at fair value

in the statement of financial position with fair value

gainsorlossesrecognizedthroughtheStatementof

Comprehensive Income.

The company did not have any financial assets classified

asfairvaluethroughprofitorlossasat31stMarch

2014.

Available-for-Sale Financial Investments

Available-for-sale financial investments include equity

and debt securities. Equity investments classified as

available-for-sale are those, which are neither classified

as held for trading nor designated at fair value through

profit or loss. Debt securities in this category are those

which are intended to be held for an indefinite period

of time and which may be sold in response to needs

for liquidity or in response to changes in the market

conditions.

After initial measurement, available-for-sale financial

investments are subsequently measured at fair value

with unrealised gains or losses recognised as other

comprehensive income in the available-for-sale reserve

until the investment is derecognised, at which time the

cumulative gain or loss is recognised in other operating

income, or determined to be impaired, at which time

the cumulative loss is reclassified to the statement of

comprehensive income in finance costs and removed

from the available-for-sale reserve. Interest income on

available-for-sale debt securities is calculated using the

effective interest method and is recognised in profit or

loss.

The Company evaluates its available-for-sale financial

assets to determine whether the ability and intention

tosellthemintheneartermisstillappropriate.When

the Company is unable to trade these financial assets

due to inactive markets and management’s intention

to do so significantly changes in the foreseeable future,

the Company may elect to reclassify these financial

assetsinrarecircumstances.Reclassificationtoloans

and receivables is permitted when the financial assets

meet the definition of loans and receivables and the

Company has the intent and ability to hold these

assets for the foreseeable future or until maturity.

Reclassificationtotheheld-to-maturitycategoryis

permitted only when the entity has the ability and

intention to hold the financial asset accordingly.

For a financial asset reclassified out of the available-for

sale category, any previous gain or loss on that asset

that has been recognised in equity is amortised to profit

or loss over the remaining life of the investment using

theEIR.Anydifferencebetweenthenewamortised

cost and the expected cash flows is also amortised over

theremaininglifeoftheassetusingtheEIR(Efective

InterestRate).Iftheassetissubsequentlydetermined

to be impaired, then the amount recorded in equity is

reclassified to the statement of comprehensive income.

Held-to-maturity Investments

Non-derivativefinancialassetswithfixedor

determinable payments and fixed maturities are

classified as held-to-maturity when the Company

has the positive intention and ability to hold them to

maturity.

After initial measurement, held-to-maturity investments

are measured at amortised cost using the effective




interest method, less impairment. Amortised cost is

calculated by taking into account any discount or

premium on acquisition and fees or costs that are an

integralpartoftheEIR.TheEIRamortisationisincluded

in finance income in the statement of comprehensive

income. The losses arising from impairment are

recognised in the statement of comprehensive income

in finance costs.

The company did not have any financial assets classified

asheldtomaturityinvestmentsasat31stMarch

2014.

Loans and Receivables

Loans and receivables are non-derivative financial assets

with fixed or determinable payments that are not

quoted in an active market. After initial measurement,

such financial assets are subsequently measured at

amortised cost using the effective interest rate method

(EIR),lessimpairment.Amortisedcostiscalculated

by taking into account any discount or premium on

acquisition and fees or costs that are an integral part of

theEIR.TheEIRamortisationisincludedunderfinance

income in the statement of comprehensive income.

The losses arising from impairment are recognised in

the statement of comprehensive income under finance

costs.

3.3.1.3. Derecognition

A financial asset (or, where applicable a part of a

financial asset or part of a group of similar financial

assets)isderecognisedwhen:

• Therightstoreceivecashflowsfromtheassethave

expired

• TheCompanyhastransferreditsrightstoreceive

cash flows from the asset or has assumed an

obligation to pay the received cash flows in full

without material delay to a third party under a

‘pass-through arrangement; and either

(a) The Company has transferred substantially all

the risks and rewards of the asset, or

(b) The Company has neither transferred nor

retained substantially all the risks and rewards

of the asset, but has transferred control of the

asset.

On derecognition of a financial asset, the difference

between the carrying amount of the asset (or the

carrying amount allocated to the portion of the asset

transferred), and the sum of (i) the consideration

received (including any new asset obtained less any

new liability assumed) and (ii) cumulative gain or loss

thathadbeenrecognizedinothercomprehensive

incomeisrecognizedinprofitorloss.

3.3.2. Impairment of Financial Assets

The Company assesses at each reporting date whether

there is any objective evidence that a financial asset or

a group of financial assets is impaired. A financial asset

or a group of financial assets is deemed to be impaired

if, and only if, there is objective evidence of impairment

as a result of one or more events that has occurred

after the initial recognition of the asset (an incurred

‘loss event’) and that loss event has an impact on the

estimated future cash flows of the financial asset or the

group of financial assets that can be reliably estimated.

3.3.3. Financial Liabilities

3.3.3.1. Initial Recognition and Measurement

FinancialliabilitieswithinthescopeofLKAS39are

classified as financial liabilities at fair value through

profit or loss, loans and borrowings, as appropriate.

The Company determines the classification of its

financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value

plus, in the case of loans and borrowings, transaction

costs that are directly attributable to the acquisition or

issue of such financial liability.

The company’s financial liabilities include trade and

other payables, bank overdrafts, loans and borrowings,

financial guarantee contracts, and derivative financial

instruments.

3.3.3.2. Subsequent Measurement

Financial liabilities at fair value through profit or

loss

Financial liabilities at fair value through profit or loss

include financial liabilities held for trading and financial


liabilities designated upon initial recognition at fair

value through profit or loss.

Financial liabilities are classified as held for trading

if they are acquired for the purpose of selling in the

near term. This category includes derivative financial

instruments entered into by the Company that are

not designated as hedging instruments in hedge

relationshipsasdefinedbyLKAS39.

Gains or losses on liabilities held for trading are

recognised in the statement of comprehensive income.

The Company has not designated any financial

liabilities upon initial recognition as fair value through

profit or loss.

Loans and Borrowings

After initial recognition, interest bearing loans and

borrowings are subsequently measured at amortised

cost using the effective interest rate method unless the

effect of discounting would be insignificant in which

case they are stated at cost.

Amortised cost is calculated by taking into account

any discount or premium on acquisition and fees

orcoststhatareanintegralpartoftheEIR.The

EIRamortisationisincludedinfinancecostsinthe

statement of comprehensive income.

3.3.3.3 Derecognition

A financial liability is derecognised when the obligation

under the liability is discharged or cancelled or expires.

3.4. Post Employment Benefits

3.4.1. Defined Benefit Plan

Defined benefit plans are post-employment benefit

plans other than defined contribution plans. The

liabilityrecognizedinthestatementoffinancial

position in respect of defined benefit plan is the present

value of the defined benefit obligation at he reporting

date. The defined benefit obligation is calculated using

the“ProjectedUnitCreditMethod”.

Pastservicecostsarerecognizedimmediatelyinthe

profit or loss while the actuarial gains and losses are

charged or credited to profit or loss in the period in

which they arise. The liability is not externally funded.

3.4.2. Defined Contribution Plans – Employees’

Provident Fund and Employee Trust Fund

All employees who are eligible for Employees’ Provident

Fund Contributions and Employees’ Trust Fund

Contributions are covered by relevant contributions

funds in line with the relevant statutes. Employer’s

contributions to the defined contribution plans are

recognizedasanexpenseinprofitorlosswhen

incurred.

3.5 Stated Capital

Stated capital consists solely of ordinary share capital.

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of

new shares are shown as a deduction, net of tax, in

equity from the proceeds.

3.6 Provisions

Aprovisionisrecognizedif,asaresultofapastevent

the Company 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.

3.7. Statement of Comprehensive Income

3.7.1. Revenue

3.7.1.1. Revenue Recognition

Revenueisrecognizedtotheextentthatitisprobable

that the economic benefits will flow to the Company

and the revenue and the associated costs incurred or

tobeincurredcanbereliablymeasured.Revenueis

measured at the fair value of the consideration received

or receivable, net of trade discounts and sales taxes,

and after eliminating sales within the Company. The

following specific criteria are used for the purpose of

recognition of revenue.

3.7.1.1.1 Sale of Goods

Revenuefromthesaleofgoodsisrecognizedwhenthe

significant risks and rewards of ownership of the goods

have passed to the buyer, usually on delivery of the

goods.



3.7.1.1.2. Other Income

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

recordedusingtheeffectiveinterestrate(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 statement of comprehensive income.

3.7.2. Expenditure Recognition

3.7.2.1. Operating Expenses

All expenses incurred in day to day operations of the

business and in maintaining the property, plant and

equipment in a state of efficiency has been charged to

the statement of comprehensive income in arriving at

the profit for the year. Provision has also been made

for impairment of financial assets, slow moving stocks,

all known liabilities and depreciation on property, plant

and equipment.

3.7.2.2. Borrowing Costs

Borrowing costs directly attributable to acquisition,

construction or production of assets that necessarily

takes a substantial period of time to get ready for its

intended use or sale are capitalised as part of the cost

of the respective assets. All other borrowing costs are

expensed in the period they occur. Borrowing costs

consist of interest and other costs that Company incurs

in connection with the borrowing of funds.

3.7.3. Net Finance Income

Finance costs comprise interest expense on borrowings,

unwinding of the discount on provisions, changes in

the fair value of financial assets at fair value through

profitorloss,impairmentlossesrecognizedonfinancial

assets, borrowing costs that are not directly attributable

to the acquisition, construction or production of a

qualifying asset are recognised in profit or loss using

the effective interest method.

3.7.4. Taxation

3.7.4.1. 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

ofInlandRevenue.Thetaxratesandtaxlawsusedto

compute the amount are those that are enacted or

substantively enacted by the reporting date.

The provision for income tax on Sri Lankan operation

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

RevenueAct.

The relevant details are disclosed in the respective notes

to the Financial Statements.

3.7.4.2. Deferred Taxation

Deferred taxation is provided, using the liability

method, on all temporary differences at the reporting

date between the tax bases of assets and liabilities and

their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible

temporary differences, carry forward of unused tax

losses and unused tax credits to the extent that it is

probable that future taxable profits will be available

against which the deductible temporary differences

andcarryforwardofunusedtaxlosses/creditscanbe

utilised.

The carrying amount of deferred tax assets is reviewed

at each reporting date and reduced to the extent that

it is no longer probable that the related tax benefit will

be realised.

Deferred tax assets and liabilities are measured at the

tax rates that are expected to apply to the year when

theassetisrealizedortheliabilityissettled,based

on tax rates (and tax laws) that have been enacted or

substantively enacted as at the reporting date.

Deferred tax assets and deferred tax liabilities are offset

if legally enforceable right exists to set off current

tax assets against current tax liabilities and when the

deferred taxes relate to the same taxable entity and the

same taxation authority.



3.8. Related Party Transactions

Disclosure has been made in respect of the transactions

in which one party has the ability to control or exercise

significant influence over the financial and operating

policies/decisionsoftheother,irrespectiveofwhethera

price is being charged or not.

The relevant details are disclosed in the respective notes

to the Financial Statements.

3.9. Cash Flow

Interest received and dividends received are classified as

investing cash flows, while dividend paid and interest

paid, is classified as financing cash flows for the

purpose of presentation of Statement of Cash Flows

whichhasbeenpreparedusingthe‘IndirectMethod’.

3.10. Earnings Per Share

Basic EPS is calculated by dividing the profit or loss

attributable to ordinary shareholders of the Company

by the weighted average number of shares outstanding

during the period.

3.11. Events Occurring after the Reporting Period

Events after the reporting period are those events

favourable and unfavourable, that occur between

the end of the reporting period and the date when

thefinancialstatementsareauthorizedforissue.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.

3.12. New Accounting Standards issued but not yet

effective

There are a number of new Accounting Standards,

amendments to standards, which have been issued

butnotyeteffectiveasattheReportingdatehavenot

been applied in preparing these Financial Statements.

Thecompanywilladoptthefollowingnew/revised

Accounting Standards which will be effective from 01st

April 2015. Accordingly these Accounting Standards

have not been applied in preparing these Financial

Statements.

SLFRS9-FinancialInstruments

SLFRS13-FairValueMeasurement

Sri Lanka Accounting Standard- SLFRS 9 ‘Financial

Instruments’

The objective of this Accounting Standard is to

establish principles for the financial reporting of

financial assets and financial liabilities that will present

relevant and useful information to users of financial

statements for their assessment of the amounts, timing

and uncertainty of an entity’s future cash flows.

AnentityshallapplythisSLFRStoallitemswithinthe

scopeofLKAS39‘FinancialInstruments:Recognition

andMeasurement’.

The effective date of this Accounting Standard

has been deferred as at the date of these financial

statements.

Sri Lanka Accounting Standard- SLFRS 13 ‘Fair

Value measurement’

This Accounting Standard defines fair value, sets out in

asingleSLFRSaframeworkformeasuringfairvalue;

and requires disclosures abut fair value measurements.

ThisSLFRSwillbecomeeffectivefrom01stJanuary

2014 and shall be applied prospectively as of the

beginning of the annual period in which it is initially

applied.TheDisclosurerequirementsofthisSLFRSneed

not to be applied comparative information provided for

periodsbeforeinitialapplicationofthisSLFRS.

In addition to the above, following standards will also

be effective for annual periods commencing on or after

01st January 2014.

SLFRS10-ConsolidatedFinancialStatements

SLFRS11-JointArrangements

SLFRS12-DisclosureofInterestsinOtherEntities

The above three standards will impact the recognition,

measurement and disclosures aspects currently

containedinLKAS27-Consolidatedandseparate

financialstatements,LKAS28-Investmentsin

associates,LKAS31-InterestinjointventuresandSIC-

12 and SIC 13 which are on consolidation of special

purpose entities(SPEs) and jointly controlled entities

respectively.




Establishing a single control model that applies to

all entities including Special Purpose Entities and

removal of the option to proportionate consolidation

jointly controlled entities are the significant changes

introducedunderSLFRS10andSLFRS11respectively.

SLFRS12,establishesasinglestandardondisclosures

related to interests in other entities. This incorporates

new disclosures as well as disclosures currently required

underLKAS27,LKAS28andLKAS31.

Based on the preliminary analysis performed, the above

Standards on adoption are not expected to have any

material impact on the financial statements.

3.13. Segment Reporting

Segment information is provided for for the different

business segments of the company. Business

segmentation has been determined based on the

nature of goods provided by the company after

considering the risks and rewards of each type of

product.

The activities of the segments are described in note 28

to the financial statements.

4. Critical Accounting Estimates, Assumptions and Judgments

Estimates, assumptions and judgments are continually

evaluated and are based on historical experience

and other factors, including expectations of future

events that are believed to be reasonable under the

circumstances. The Company makes estimates and

assumptions concerning the future. The resulting

accounting estimates will, by definition, seldom

equal the related actual results. The estimates and

assumptions that have a significant risk of causing

a material adjustment to the carrying amount of

assets and liabilities within the next financial year are

discussed below.

4.1 Estimated Useful lives of Property, Plant and

Equipment (PPE)

The Company reviews annually the estimated useful

lives of PPE based on factors such as business plan

and strategies, expected level of usage and future

developments. Future results of operations could be

materially affected by changes in these estimates

brought about by changes in the factors mentioned.

A reduction in the estimated useful lives of PPE would

increase the recorded depreciation charge and decrease

the PPE balance.

4.2 Estimated Useful lives of Intangible Assets

The Company reviews annually the estimated useful

lives of intangible assets based on factors such as

business plan and strategies, expected level of usage

and future developments. Future results of operations

could be materially affected by changes in these

estimates brought about by changes in the factors

mentioned. A reduction in the estimated useful lives

of intangible assets would increase the recorded

amortizationchargeanddecreasetheintableassets

balance.

4.3 Defined Benefit Obligations

The present value of the gratuity obligations depends

on a number of factors that are determined on an

actuarial basis using a number of assumptions. The

assumptions used in determining the net cost for

gratuity include the discount rate. Any changes in

these assumptions will impact the carrying amount of

gratuity obligations.

The Company determines the appropriate discount

rate at the end of each year. This is the interest rate

that should be used to determine the present value of

estimated future cash outflows expected to be required

to settle the pension obligations. In determining the

appropriate discount rate, the Company considers

the interest rates of government bonds that are

denominated in the currency in which the benefits will

be paid and that have terms to maturity approximating

the terms of the related pension obligation.

4.4 Allowance for Doubtful Debts

The Company assesses at the reporting date whether

there is objective evidence that trade receivables have

been impaired. Impairment loss is calculated based on

a review of the current status of existing receivables

and historical collections experience. Such provisions

are adjusted periodically to reflect the actual and

anticipated impairment.



Risk Exposure Risk exposure Mitigating actions

5.1CreditRisk Riskarisingfromdefaultofpayment.Higher a)Followingstringentassessment

credit risk may adversely impact both liquidity procedures to ensure credit.

and profitability.

b) Developing and implementing

Credit Policies.

c) Obtaining bank guarantees, deposits,

post dated cheques from local

debtors and insurance cover for

export debtors whenever there is a

doubt about recovery.

d) Closely monitoring the debtor

balances and laying action plans

accordingly.

5.2OperationalprocessRisk Internalprocessfailures,frauds, a) Outsourceinternalaudittoareputed

pilferages and breakdowns of internal controls audit firm to review and report on

the adequacy of the financial and

operational controls to Audit

CommitteeandManagingDirector.

b) Systems and procedures are in

place to ensure compliance with

internal controls, which are monitored

and reviewed for their continued

efficiency and effectiveness.

c) Provide focused and structured

training to staff at all levels to

familiarizethemwithprocessesand

procedures.

d) Carrying out mandatory preventive

maintenance programmes.

e) The Company sources its products

and services from approved suppliers.

5. FinancialRiskManagement



Risk Exposure Risk exposure Mitigating actions

5.3 Financing and Interest Inability to satisfy debt repayments and obtain the a) To have adequate facilities in

rate risk best interest rates. obtaining USD loans and

borrowings in foreign currency

to bring down finance charges.

b) Funding of long-term assets through

equity and Long-term loans.

c) To have adequate short-term

borrowing facilities available at all

times.

d) Low gearing is maintained.

5.4 Foreign Exchange Depreciation of the rupee value and loss on a) Exchange rate movements are taken

rateRisk exchangeinconversioninrelationtoexport intoconsiderationbefore

proceeds,importpaymentsandforeigncurrency conversion&pricing.

debt transactions.

b) Practising effective hedging

techniques.

c) Continuous evaluation of the impact

of Central Bank regulations.

5.5ProjectManagement Newprojects/Capitalexpendituresinvolvehigh a) ConductaPESTELanalysis

Risks risksanduncertaintiesintermsofdelayand andfeasibilitystudybefore

cost overruns. Failure of major projects will initiating the projects.

affect profitability, capital structure and reputation.

b) Board approval should be received for

all investments.

c) Post-evaluation of the projects is

carried out for each investment.




NOTES Rs. Rs.

06. Revenue Saleofgoods 6.1 952,561,234 973,858,289

952,561,234 973,858,289

6.1 Sale of Goods

ExportTurnover 613,250,076 656,041,490

LocalTurnover 339,311,158 317,816,799

952,561,234 973,858,289

07. OtherIncome

Profitondisposalofproperty,plant&equipment 331,681 1,166,071

Income from cultivation - 5,259

Reversalofoverprovidedexpenses 11,290

Creditors’dueswrittenback 1,877,601 -

Reversalofinventoryimpairementprovision 61,747 577,993

2,282,319 1,749,323

08. ExpensesbyNature

Costofpurchase 514,837,534 569,154,015

Employee benefit expenses 8.1 131,108,188 112,128,990

Otheroverheads 74,508,706 66,488,300

Depreciation 27,768,868 26,526,938

Export expenses 13,068,204 14,132,366

Machinerymaintenance 14,514,517 8,495,804

Subcontractwages 11,552,748 7,829,757

Auditors remuneration - Assurance services 242,300 230,000

Auditorsremuneration-Non-Assuranceservices 40,600 35,200

Others 119,437,996 116,525,968

Total Cost of Purchase, Distribution and Administrative Expenses 907,079,661 921,547,338

8.1 Employee Benefit Expenses

Director’semoluments 8,376,395 8,057,196

Bonus&otherallowances 1,437,254 1,252,102

Salaries,wages&overtime 111,288,432 92,508,653

Post employment benefit - gratuity 692,826 1,918,399

EPF&ETF 9,313,281 8,392,640

131,108,188 112,128,990




NOTES Rs. Rs.

9. NetFinanceIncome 9.1 Finance Income

InterestIncome 3,086,413 726,762

ForeignExchangeGain 17,770,291 6,189,871

20,856,704 6,916,633

9.2 Finance Cost

InterestExpensesOnBankBorrowing 2,342,302 4,765,096

OverdraftInterest 1,437,733 5,134,932

3,780,035 9,900,028

Net Finance Income 17,076,669 (2,983,395)

10 Income Tax Expenses

Current Tax Expenses:

Current tax on profit for the year 10.1 4,353,651 3,034,498

(Over)/Underprovisioninpreviousyears 181,618 8,096

Deferred Tax Expenses:

Originationandreversaloftemporarydifferences 17 3,955,316 (7,481,140)

Income Tax Expenses in Statement of Comprehensive Income 8,490,585 (4,438,546)

10.1 Reconciliation between Current Tax Expenses and the Accounting Profits

Profit before tax 64,840,561 51,076,879

Tax effectsof:

–Totaldisallowableexpenses 36,796,434 38,189,332

–Totalallowableexpenses (49,550,123) (50,361,037)

Taxable income from ordinary activities 52,086,872 38,905,174

Tax loss claimed (18,230,405) (13,616,811)

Taxable income 33,856,467 25,288,363

Agricultural Income 10% - 526

Tax profitonexportsales 12% 3,844,619 3,033,972

Interest income 28% 509,032 -

Tax on profit for the year 4,353,651 3,034,498



NOTES Rs. Rs.

11. Earnings per Share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of

the company by the weighted average number of ordinary shares outstanding at year end.

Amount Used as the Numerator

Profitfortheyear 56,349,976 55,515,425

Profit attributable to equity holders of the company 56,349,976 55,515,425

Number of Ordinary Shares Used as the Denominator

Weightedaveragenumberofordinarysharesinissue 3,847,974 3,847,974

Weighted average number of ordinary shares for earnings per share 3,847,974 3,847,974

Basic Earnings per Share (Rs.Cts) 14.64 14.43

12. Dividend paid during the year

Amounts Used as Numerator

Dividendpaid 7,695,948 7,695,948

Number of Ordinary Shares Used as the Denominator

WeightedAverageNumberofOrdinarySharesinIssue 3,847,974 3,847,974

Dividend per Share (Rs. Cts.) 2.00 2.00




13. Property, Plant and Equipment As At As At 01.04.2013 Additions Disposals 31.03.2014

COST/VALUATION Rs. Rs. Rs. Rs.

Freehold assets

Freehold land 3,190,105 - - 3,190,105

Buildings 90,594,322 - - 90,594,322

Storage tank 125,031 - - 125,031

Plantandmachinery 233,231,837 20,320,526 (228,000) 253,324,363

Machineaccessories 117,145,471 3,270,733 (300,000) 120,116,204

Furnitureandfittings 1,471,790 - - 1,471,790

Office equipment 13,952,118 338,483 - 14,290,601

Motorvehicles 3,282,668 - - 3,282,668

Sundryassets 11,535,367 396,959 - 11,932,326

Wastewatertreatmentplant-WIP - 1,530,000 - 1,530,000

Total 474,528,708 25,856,701 (528,000) 499,857,410

DEPRECIATION

Freehold assets

Freehold land - - - -

Buildings 39,159,991 4,726,349 - 43,886,340

Storage tank 125,031 - - 125,031

Plantandmachinery 161,726,941 13,804,163 (201,401) 175,329,703

Machineaccessories 77,412,056 7,151,674 (8,280) 84,555,450

Furnitureandfittings 599,285 111,550 - 710,835

Office equipment 9,431,185 1,038,460 - 10,469,645

Motorvehicles 2,857,669 199,558 - 3,057,227

Sundryassets 8,767,430 737,114 - 9,504,544

Wastewatertreatmentplant-WIP - - - -

Total 300,079,588 27,768,868 (209,681) 327,638,775

WRITTEN DOWN VALUE

Freehold assets

Freehold land 3,190,105 - - 3,190,105

Buildings 51,434,331 - - 46,707,982

Storage tank - - - -

Plantandmachinery 71,504,896 - - 77,994,660

Machineaccessories 39,733,415 - - 35,560,754

Furnitureandfittings 872,505 - - 760,955

Office equipment 4,520,933 - - 3,820,956

Motorvehicles 424,999 - - 225,441

Sundryassets 2,767,937 - - 2,427,782

Wastewatertreatmentplant-WIP - - - 1,530,000

Total 174,449,120 - - 172,218,635



13 (a) Fully Depreciated Property, Plant and Equipment

A class-wise analysis of the initial cost of fully depreciated property, plant and equipment of the company which are still in use as at

reporting date is as follows,

As at 31.03.2014

Rs.

Furniture&Fittings 410,828

MotorVehicle 2,432,668

OfficeEquipment 7,500,096

Plant&Machinery 101,298,352

Sundry Assets 5,248,051

Tools&Accessories 49,173,275

Total 166,063,270

(b) Temporarily idle property, plant and equipment

There were no property, plant and equipment idle from active use as at the reporting date.

(c) Property, plant and equipment retired from active use

There were no property, plant and equipment retired from active use as at the reporting date.

(d) Title restriction of property, plant and equipment

There were no restrictions on the title of property, plant and equipment as at the reporting date.

(e) Land holdings and Investment properties

ThevalueofofficeandfactorysituatedatAkuressaRoad,Bogahagoda,Angulugaha,Gallewasvaluedbyindependent

incorporatedvalueratavalueofRs.132mnasat29thAugust2009andthefactoryatNo:57B,IndustrialProcessingZone,

Nagoda,Kalutharawaspurchasedin2009/2010atthemarketvalueofRs.18,000,000/.

Location Address No. of Buildings Extent of land Extent of Building

Galle Factory AkuressaRoad, 10Buildings 7Acres2Roods& 94,900Sqft

Bogahagoda,Galle. 17Perches

Kalutara Factory No.57/B,Fullerton 03Buildings 120Perches 5,990Sqft

IndustrialZone,

Nagoda,Kalutara.


31.03.2014 31.03.2013

Rs. Rs.

14. Intangible Assets

Cost

Asat1April 12,786,626 12,786,626

Additions - -

As at 31 March 12,786,626 12,786,626

Amortisation

Asat1April 3,835,984 2,557,322

Chargefortheyear 6,393,310 1,278,662

As at 31 March 10,229,294 3,835,984

Net book value 2,557,332 8,950,642

Thecompanyhaschangeditsestimateregardingtheamortizationperiodofintangibleassetas5yearsinsteadofpreviousestimate

of10yearsduringtheyear2013/14.


15. Available for Sale Financial Assets No of Market Market Value Market Value Quoted Debentures Debentures Price As at 31.03.2014 As at 31.03.2013

Rs. Rs. Rs.

Hayleys Plc 10,000 1,000 10,000,000 -

NationalDevelopmentBankPlc 50,200 100 5,020,000 -

HattonNationalBankPlc 63,343 100 6,334,300 -

Total 21,354,300

16. Other Financial Assets

Investment in treasury bills 10,000,000 -

Investment in fixed deposits 19,000,000 -

Total 29,000,000 -

17.DeferredIncomeTaxAssetsandLiabilities

17.1 - Deferred tax assets

Balanceatthebeginningoftheyear 6,855,791 1,952,274

Recognisedinprofit&loss (1,880,604) 4,903,517

Balance at the end of the year 4,975,187 6,855,791

17.2 - Deferred tax liabilities


Recognisedinprofit&loss 2,074,712 (2,577,625)

Balance at the end of the year 10,905,774 8,831,062

Net Deferred tax liabilities 5,930,587 1,975,271


As at 31.03.2014 31.03.2013

NOTES Rs. Rs.

18. Inventories

Rawmaterials 31,561,702 34,115,020

Work-in-progress 33,428,845 24,350,790

Finishedgoods 52,028,190 79,070,920

Packingmaterials 9,539,574 7,510,831

Provision for inventory (1,261,899) (1,261,899)

125,296,412 143,785,662

19 TradeandOtherReceivables

Current

Tradereceivables-Local 18,913,852 24,379,603

Tradereceivables-Foreign 146,678,834 158,609,434

Tradereceivables-Relatedparties 19.1 41,509,219 24,100,175

Less:Provisionforimpairmentoftradereceivables (2,075,014) (2,136,761)

Trade receivables - net 205,026,891 204,952,451

Otherreceivables 2,129,055 797,567

Depositsandprepayments 4,694,006 4,197,185

Advances 5,167,139 3,967,544

VATReceivable 12,108,759 12,145,133

Otherreceivables 24,098,959 21,107,430

Total 229,125,850 226,059,880

19.1 - Trade Receivables - Related parties

D.SamsonIndustries(Pvt)Ltd. 40,066,078 21,067,803

SamsonRubberIndustries(Pvt)Ltd. - 18,565

Samson Engineers (Pvt) Ltd. 99,491 38,621

SamsonTrading(Pvt)Ltd. 705,152 341,655

SamsonReclaimRubbersLtd. 152,957 178,694

SamsonRubberProducts(Pvt)Ltd. 34,212 2,195,971

SamsonRajarataTiles(Pvt)Ltd 107,935 -

DSIWelfareshop - 8,625

Samson Compounds (Pvt) Ltd. 206,468 238,241

DSamson&Sons(Pvt)Ltd. 44,057 12,000

Samson Group Corporate Services (Pvt) Ltd. 92,869 -

41,509,219 24,100,175


17.3 - Recognised Deferred Tax Assets and Liabilities

As at 31.03.2014 31.03.2013

Assets Liabilities Assets Liabilities

Rs. Rs. Rs. Rs.

Property,plant&equipment - 10,905,774 - 8,831,062

Definedbenefitobligation 1,945,571 - 1,743,313 -

Tax loss 3,029,616 - 5,112,478 -

Total 4,975,187 10,905,774 6,855,791 8,831,062


As at 31.03.2014 31.03.2013

NOTES Rs. Rs.

19.2 Analysis of Financial Instruments

Financial instruments by category

Loans and receivables

Trade and other receivables excluding prepayments, statutory payments and advances 205,026,891 204,952,451

Cashandcashequivalents 20 60,880,788 19,755,466

265,907,679 224,707,917

Financial liabilities at amortised cost

Trade and other payables (Excluding statutory liabilities) 23 145,410,992 105,640,551

Borrowings 24 32,843,058 60,804,330

178,254,050 166,444,881

19.3 Exposure to Credit Risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the

endofthereportingperiodwasasfollows:

Trade and other receivables 205,026,891 204,952,451

205,026,891 204,952,451

The maximum exposure to credit risk for trade receivables at the end of the reporting

periodbytypeofcounterpartyisasfollows:

Tradereceivablesfromrelatedparties 41,509,219 24,100,175

Tradereceivables-others 163,517,672 180,852,275

205,026,891 204,952,450

Amounts due from related companies were given on normal credit terms.

Movementsonthecompanyprovisionforimpairmentoftradereceivablesisasfollows:

31.03.2014

Rs.

Asat1April 2,136,761

Provision/(Reversal)forreceivablesimpairment (61,747)

As at 31 March 2,075,014

The creation and release of provision for impaired receivables have been included in ‘operating expenses’ and ‘other income’

inthestatementofcomprehensiveincome(Note08and07respectively).Amountschargedtotheallowanceaccountare

generally written off, when there is no expectation of recovering additional cash.

The other classes within trade and other receivables do not contain impaired assets.




As at 31.03.2014 31.03.2013

NOTES Rs. Rs.

20. Cash and Cash Equivalents

Favourable Cash and Cash Equivalent Balances

Bankbalances 60,457,996 19,346,511

Cashonhand 422,792 408,955

60,880,788 19,755,466

Unfavourable Cash and Cash Equivalent Balances

Bank Overdrafts 3,180,335 15,518,523

3,180,335 15,518,523

Cash and cash equivalents for the purpose of cash flow statement 57,700,453 4,236,943

The company held cash and cash equivalents with reputed commercial banks.

21. Stated Capital

Issued and fully paid

3,847,974NumberofOrdinarySharesinIssuewithnoparvalue 105,752,241 105,752,241

105,752,241 105,752,241

22.RetirementBenefitObligation

Movement in the Present Value of Defined Benefit Obligation

Balanceasatthebeginningoftheyear 14,528,107 9,906,020

Current Service Cost 1,598,092 1,544,630

InterestCost 1,813,027 990,602

Actuarial(gain)/lossonobligation (1,871,505) 5,138,366

BenefitPaid (937,855) (3,051,511)

Balance as at the end of the year 15,129,866 14,528,107

Actuarial assumptions: 31.03.2014 31.03.2013

Salary Incremental rate 10% 10%

RateofDiscount 11% 11%

Staff turnover rate 4% to 42% 5%

ProvisionhasbeenmadeforretirementgratuitiesinconformitywithLKAS19-EmployeeBenefits.

23. Trade and Other Payables

TradeCreditors-RelatedCompanies 23.1 111,330,980 72,071,865

Trade Creditors - Other 18,038,360 10,812,096

Sundry Creditors Including Accrued Expenses 15,055,030 15,952,238

VATPayable 186,886 1,363,366

NBTPayable 90,142 1,036,657

AdvancesReceived 986,622 6,804,352

145,688,020 108,040,574


As at 31.03.2014 31.03.2013

NOTES Rs. Rs.

As at 31.03.2014 31.03.2013

NOTES Rs. Rs.

23.1 Trade Creditors - Related Companies

D.SamsonIndustries(Pvt)Ltd. 1,362,735 142,661

SamsonRubberIndustries(Pvt)Ltd. - 40,000

SamsonEngineers(Pvt)Ltd. 25,093 207,473

SamsonReclaimRubbersLtd. 385,450 243,246

SamsonRubberProducts(Pvt)Ltd. 3,201,908 3,729,279

Samson Group Corporate Services (Pvt) Ltd. - 505,669

SamsonCompounds(Pvt)Ltd. 106,088,889 66,774,430

DSIWelfareShop 23,150 39,880

MountSpringWater(Pvt)Ltd. 4,608 1,382

SamsonInformationTechnologies(Pvt)Ltd. 68,512 32,307

DSamson&Sons(Pvt)Ltd 170,635 40,888

Samson Bikes (Pvt) Ltd - 314,650

111,330,980 72,071,865

24. Borrowings

Current

Bank borrowings - Overdrafts 3,180,335 15,518,523

-ShortTermBorrowings 29,662,723 45,285,807

32,843,058 60,804,330

24.1 - Securities for the above facilities are as follows:

Nature of Asset Nature of the Bank/Institution Securities

Loan Facility

Inventory Overdraft HattonNationalBankPLC FinishedGoodStocks&Debtors

ConfirmedOrderConfirmation TermLoan HattonNationalBankPLC ConfirmedOrderConfirmation

Inventory Overdraft SeylanBankPLC FinishedGoodStocks&Debtors

Inventory Overdraft BankOfCeylon-Galle RawMaterialStocks

Inventory Overdraft BankOfCeylon-Cop. RawMaterialStocks

Financialassets Overdraft DFCCVardhanaBankPLC Treasurybills

24.2 - Short Term Borrowings


Obtainedduringtheyear 161,650,914 160,977,140

Repaymentsduringtheyear (177,273,998) (128,304,333)

Balanceattheendoftheyear 29,662,723 45,285,807




25. Commitments and Contingencies

There were no commitments and contingencies existing as at the reporting date.

26. EventsOccurringaftertheReportingDate

Nocircumstanceshavearisen,sincereportingdate,whichwouldrequireadjustmentsto,ordisclosure,inthefinancial

statements.

27. RelatedPartyDisclosures

Detailsofsignificantrelatedpartydisclosuresareasfollows:

27.1 Key Management Personnel of the Company

TheKeyManagementpersonnel(KMP)comprisethemembersofitsBoardofDirectors.Directors’sremunerationforthe

financialyearendedMarch31,2014isgiveninNote8.1totheFinancialStaements.

Dr.D.S.Rajapaksa

Mr.D.K.Rajapaksa

Mr.D.R.Rajapaksa

Mr.D.M.Rajapaksa

Mr.C.Cumaranatunge

Mr.G.H.A.Wimalasena

Mr.T.K.Bandaranayake

Mr.B.L.P.Jayawardena

Mr.D.G.P.S.Abeygunawardana

27.2.1 Transactions with Key Management Personnel of the Company

KeyManagementPersonnelCompensation 2014 2013

Rs. Rs.

Short-termemployeebenefits 8,376,395 8,057,196

8,376,395 8,057,196

27.2.2 Other Transaction with Key Management Personnel

Mr.CCumaranatungeadirectorofthecompanyisalsoChairman/ManagingDirectorofM/sSangerGMBHandGumitex

Productions-UNDtowhichcompany’ssalesamountingtoRs.470,229,315/-hasbeenmadeduringtheyearasspecified

below.

Other Transaction with Key Management Personnel - For the year ended 31.03.2014

Rs.

ToSANGERGMBH 140,809,810

ToGUMMITEXGMBH 329,419,505

470,229,315



27.3 Directors Interest In Contracts with the Company

NoneoftheDirectorsoftheCompanyhadanydirectorindirectinterestsinanyexistingorproposedcontractswiththe

Companyotherthanthosestatedbelow:

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

27.3.1 Mr.D.S.RAJAPAKSAwhoisaDirectorofthecompanyisalsoholdingdirectorshipsinthefollowingcompanies

within the Group.

Name of Company Relationship

D. Samson Industries (Pvt) Ltd. Director

DSamson&Sons(Pvt)Ltd. Director

SamsonReclaimRubbersLtd. Director

Samson Trading Company (Pvt) Ltd. Director

27.3.2 Mr.D.KRAJAPAKSAwhoisaDirectorofthecompany’sisalsoholdingdirectorshipsinthefollowingcompanies

within the Group.



Samson Compounds (Pvt) Ltd. Director

DSamson&Sons(Pvt)Ltd. Director

SamsonRubberIndustries(Pvt)Ltd. Director

SamsonRubberProducts(Pvt)Ltd. Director


Samson Group Corporate Services (Pvt) Ltd. Director

Samson Information Technologies (Pvt) Ltd. Director

MountSpringWater(Pvt)Ltd. Director

SamsonManufacturers(Pvt)ltd. Director

27.3.3 Mr.D.R.RAJAPAKSAwhoisaDirectorofthecompanyisalsoholdingdirectorshipsinthefollowingcompanies

within the Group.




Samson Engineers (Pvt) Ltd. Director




Samson Group Corporate Services (Pvt) Ltd Director

MountSpringWater(Pvt)Ltd. Director



27.3.4 Mr.D.M.RAJAPAKSAwhoisaDirectorofthecompanyisalsoholdingdirectorshipsinthefollowingcompanies

within the Group.







SamsonManufacturers(Pvt)ltd. Director

27.3.5 Mr.B.L.P.JAYAWARDANAwhoisaDirectorofthecompanyisalsoholdingdirectorshipsinthefollowingcompanies

within the Group.



SamtessiBrushManufacturers(Pvt)Ltd Director

27.4 The company has entered into transactions during the year with following companies in which some of the directors

of the company is also directors of the said company.

Name of Company 2014 2013

Sales Purchases Sales Purchases

Rs. Rs. Rs. Rs.

D.SamsonIndustries(Pvt)Ltd. 198,616,507 827,792 186,391,439 627,679

DSamson&Sons(Pvt)Ltd 418,905 2,166,466 27,917 1,838,602

SamsonRubberIndustries(Pvt)Ltd 47,812 40,000 45,624 242,171

SamsonTradingCompany(Pvt)Ltd. 3,555,015 97,150 5,221,160 -

SamtessiBrushManufacturers(Pvt)Ltd 2,495 - - -

SamsonCompounds(Pvt)Ltd. 8,338,388 478,774,619 2,974,762 555,733,842

SamsonEngineers(Pvt)Ltd 610,090 1,036,385 391,992 3,765,537

SamsonReclaimRubbersLtd. 1,190,620 4,515,049 1,795,564 4,401,200

SamsonSportswear(Pvt)Ltd - - 10,626,375 9,600.00

Samson Group Corporate Services (Pvt) Ltd. - 3,451,836 - 3,384,551

SamsonManufactures(Pvt)Ltd 102,528 - 13,741.00 -

SamsonRubberProducts(Pvt)Ltd 11,020,492 15,284,699 12,270,369 14,812,531

MountSpringWater(Pvt)Ltd - 14,613 27,157 10,053

SamsonInformationTechnologies(Pvt)Ltd. - 501,990 - 571,308

27.5 OutstandingamountsduefromrelatedpartiesandduetorelatedpartiesaredisclosedinNote19.1&23.1

respectively.


nOtes to the Financial statements (contd...)28.SegmentOperatingResults

28.1

Bu

sin

ess

Seg

men

t M

edic

al It

ems

Foo

d G

rad

e It

ems

Ho

use

ho

ld It

ems

Oth

ers

Co

mp

any

20

14

201

3

201

4

2013

2

014

20

13

201

4

2013

20

14

2013

R

s.’0

00

Rs.

’000

R

s.’0

00

Rs.

’000

R

s.’0

00

Rs.

’000

R

s.’0

00

Rs.

’000

R

s.’0

00

Rs.

’000

ExportSales

208,861

212,328

284,583

285,912

67,714

99,166

52,092

58,635

613,250

656,041

LocalSales

635

1,343

2,081

5,338

40,561

39,389

296,034

271,747

339,311

317,817

209,496

213,671

286,664

291,250

108,275

138,555

348,126

330,382

952,561

973,858

Profit/(Loss)onFixedAssetDisposal

82

291

81

291

88

292

81

292

332

1,166

OtherIncome

472

328

472

214

472

24

535

16

1,951

582

210,050

214,290

287,217

291,755

108,835

138,871

348,742

330,690

954,844

975,606

SegmentalExpense

(200,558)

(201,821)

(256,869)

(261,225)

(105,064)

(136,291)

(344,589)

(322,209)

(907,080)

(921,546)

OperatingProfit/(Loss)

9,492

12,469

30,348

30,530

3,771

2,580

4,153

8,481

47,764

54,060

28.2

Geo

gra

ph

ical

Seg

men

t

Europe

162,038

193,324

284,583

285,912

49,022

45,873

44,186

46,193

539,829

546,757

Australia&NewZealand

35,645

-

-

-

1,380

5,085

2,659

885

39,684

5,970

America

-

-

-

-

2,817

413

-

1,161

2,817

1,574

Africa

-

-

-

-

--

5,247

10,321

5,247

10,321

Asia

11,178

19,004

-

-

14,495

47,795

-

75

25,673

91,419

Total

208,861

212,328

284,583

285,912

67,714

99,166

52,092

58,635

613,250

656,041


GlOBal reporting initiative (Gri)SamsoninternationalPlcvoluntarilyadoptedGlobalReportingInitiative(GRI)G4‘Inaccordance’coreGuidelinesduringthe

financialyear2013/14asameasureofimprovingthestandardofaccountabilityandreportingonaccountability,Thesedetailsare

given below.

Strategy and Analysis Page

G4-1 StatementfromtheChairman Chairman’sReview 3-6

Organization profile

G4-3 Nameoftheorganization. SamsonInternationalPlc

G4-4 Primarybrands,products,and/orservices. ManagementDiscussionandAnalysis-ourproducts 25-36

G4-5 Locationoforganization’sheadquarters. CorporateInformation 14-15

G4-6 Numberofcountrieswheretheorganization ManagementDiscussionandAnalysis- 42

operates, and names of countries with either Our Global Presence

major operations or that are specifically

relevant to the sustainability issues

covered in the report.

G4-7 Natureofownershipandlegalform. CorporateInformationandInvestorInformation 15,130

G4-8 Marketsserved(includinggeographic ManagementDiscussionandAnalysis- 42,107

breakdown,sectorsserved,andtypesof OurGlobalPresenceandNote28ofthe

customers/beneficiaries). FinancialStatements

G4-9 Scaleofthereportingorganization. CorporateInformationandInvestorInformation 15,127

G4-10 Totalworkforcebyemploymenttype, ManagementDiscussionandAnalysis-OurPeople 36

employment contract, and region, broken

down by gender.

G4-11 Percentage of employees covered by collective None

bargaining

G4-12 Organizationssupplychain Sustainability-Environment 121

G4-13 Significantchangesduringthereportingperiod InvestorInformation 127

regardingsizestructureandownership

Commitment to External Initiatives

G4-14 Precautionaryprinciples RiskManagement 59-64

G4-15 Charters, principles or other initiatives Corporate Governance and Sustainability 53, 108

G4-16 Membershipsofassociation ManagementDiscussionandAnalysis- 50

MembershipandAssociations


Identified Material Aspects and Boundaries Page

G4-17 Operationalstructureoftheorganization. ExecutiveManagement 23

G4-18 Processfordefiningreportcontent. ManagementDiscussionandAnalysis, 24,83,

Accounting Policies, Glossary of Financial Terms. 135

G4-19 Materialaspectidentifiedforreportcontent. ManagementDiscussionandAnalysis, 24,83

Accounting Policies.

G4-20 Aspectboundaryforidentifiedmaterial ManagementDiscussionandAnalysis, 24,83

aspectswithintheorganization. AccountingPolicies.

G4-21 Aspectboundaryforidentifiedmaterial Chairman’sReview,ManagementDiscussionand 3,24,

aspectsoutsidetheorganization. Analysis,AccountingPolicies. 83

G4-22 Restatementsofinformationprovidedinthe None

previous reports.

G4-23 Significantchangesfrompreviousreporting AccountingPolicies,Chairman’sReview 83,3

periods in the scope and aspect boundaries.

Stakeholder engagement

G4-24 Listofstakeholdergroupsengagedbythe SustainabilityReport 109-119

organization.

G4-25 Basisforidentificationandselectionof SustainabilityReport 109-119

stakeholders with whom to engage.

G4-26 Approachestostakeholderengagement, SustainabilityReport 109-119

including frequency of engagement by type

and by stakeholder group.

G4-27 Keytopicsandconcernsthathavebeen SustainabilityReport 109-119

raised through stakeholder engagement.

Report Profile

G4-28 Reportingperiod Yearended31March2014.

G4-29 Date of most recent previous report Quarterly Financials 131

G4-30 Reportingcycle Annually

G4-31 Contactpointforquestionsregardingthe Director/GeneralManager

report or its contents. Samson International Plc,

AkuressaRoad,

Bogahagoda,

Galle.

G4-32 CompliancewithGRIG4Guidelines,GRI Sustainabilityreport 108,24

ContentIndexandExternalAssuranceReport. andManagementDiscussionandAnalysis.

G4-33 Policyandcurrentpracticewithregardto AuditReportandAuditCommitteeReport 77,72

seeking external assurance for the report.

GlOBal reporting initiative (Gri) (contd...)


Governance Page

G4-34 Governancestructureoftheorganization, ReportoftheBoardofDirectors 65-70

including committees under the highest

governance body responsible for

decision-making on economic, environment

and social impacts

Ethics and integrity

G4-56 The values, principles , standards and norms Our corporate vision ,mission, values and our aim. 2

of behavior

Specific Standard Disclosures

Category: Economic

Aspect Economic Performance

G4-EC1 Directeconomicvaluegenerated,distributed ManagementDiscussionandAnalysis- 50

andretained. StatementofValueAdded

G4-EC2 Financialimplicationsandotherrisksand ManagementDiscussionandAnalysis 24,59

opportunitiesfortheorganization’sactivities andRiskManagement

due to climate change.

G4-EC3 Coverageoftheorganization’sdefined AccountingPoliciesandNotesto 91

benefit plan obligations. Financial Statements

Aspect Indirect Economic Impacts

G4-EC8 Significant indirect economic impacts, Chairman’sReview , 3, 132

including the extent of impacts. Ten year Economic Summary

Category: Environment

Aspect Emissions

G4-EN15 Directgreenhousegas(GHG)emissions(Scope1) ManagementDiscussionandAnalysis-Energy 47

G4-EN16 Energyindirectgreenhousegas(GHG) ManagementDiscussionandAnalysis-Energy 47

emissions(Scope 2)

G4-EN17 Otherindirectgreenhousegas(GHG) ManagementDiscussionandAnalysis-Energy 47

emissions (Scope 3)

G4-EN18 Greenhousegas(GHG)emissionsintensity ManagementDiscussionandAnalysis-Energy 47

Aspect EffluentsandWaste

G4-EN23 Totalweightofwastebytypeand ManagementDiscussionandAnalysis- 47

disposal method Production efficiencies and energy

G4-EN29 Compliance None 108

Monetaryvalueofsignificantfinesandtotal

number of non-monetary sanctions for

non-compliance with environmental

laws and regulations.



Category: Social Page

Labor Practices and Decent Work

Aspect Employment

G4-LA1 Totalnumberandrateofnewemployeehires ManagementDiscussionandAnalysis-OurPeople 36-40

and employee turnover by age group gender

and region.

G4-LA2 Benefitsprovidedtofull-timeemployeesthat ManagementDiscussionandAnalysis-OurPeople 41

are not provided to temporary or part-time

employees, by significant location of operation.

Aspect Labour/ManagementRelations

G4-LA4 Minimumnoticeperiodsregardingoperational ManagementDiscussionandAnalysis-Legal 49

changes, including whether these are specified

in collective agreements.

Aspect Occupational Health and Safety

G4-LA5 Percentageoftotalworkforcerepresentedin ManagementDiscussionandAnalysis-OurPeople 36

formal joint management-worker health and

safety committees that help monitor and

advice on occupational health and safety

programmes.

G4-LA6 Typeofinjuryandratesofinjury,occupational ManagementDiscussionandAnalysis-OurPeople 36

disease, lost days and absenteeism, and total

number of work-related fatalities, by region

and by gender.

Aspect Training and Education

G4-LA9 Averagehoursoftrainingperyearperemployee ManagementDiscussionandAnalysis-OurPeople 36-40

by gender, and by employee category.

Human Rights

Aspect Investment

G4-HR1 Totalnumberandpercentageofsignificant None

investment agreements and contracts that

include human rights clauses or that

underwent human rights screening.

Aspect Child Labour

G4-HR5 Operationsandsuppliersidentifiedashaving ManagementDiscussionandAnalysis-Legal 49

significant risk for incidents of child labour and

measures taken to contribute to the effective

abolition of child labour.



Society Page

Aspect Anti-Corruption Risk Management

G4-SO3 Totalnumberandpercentageofoperations None

assessed for risks related to corruption and

the significant risks identified.

Aspect Compliance

G4-SO8 Monetaryvalueofsignificantfinesandtotal None

number of non-monetary sanctions for

non-compliance with laws and regulations.

Product Responsibility

Aspect Product and Service Labelling

G4-PR3 Typeofproductandserviceinformation ManagementDiscussionandAnalysis-OurProducts 25-36

requiredbytheorganization’sprocedures

for product and service information and

labeling, and percentage of significant product

and service categories subject to such

information requirements.

Aspect MarketingCommunications

G4-PR7 Totalnumberofincidentsofnon-compliance None

with regulations and voluntary codes

concerning marketing communications,

including advertising, promotion, and

sponsorship by type of outcomes.

Aspect Compliance

G4-PR9 Monetaryvalueofsignificantfinesfor None

non-compliance with laws and regulations

concerning the provision and use of

products and services.



inVestOrinformation“The active participation of shareholders at

the Annual General Meeting is encouraged.

The Board believes the AGM is a means

of continuing effective dialogue with

shareholders. While valuing the patronage of

all our shareholders, the Company has made

every endeavours to ensure equitable treatment

to all our shareholders irrespective of the

number of shares they hold”.

BoardofDirectorsatthelastAGM

1) General

a) Statedcapital - Rs.105,752,241

b) No.ofShares - 3,847,974

c) Class of Shares - Ordinary Shares


2) Stock Exchange Listing

The issued ordinary shares of Samson International Plc are listed on the Colombo Stock Exchange. The audited income statement

fortheyearended31stMarch2014andtheauditedbalancesheetoftheCompanyasatthatdatehavebeensubmittedtothe

Colombo Stock Exchange within the stipulated date.

3) Date of Listing

The Company was listed on 24th July 1992.

4) MarketCapitalization

ThemarketcapitalizationoftheCompanywhichisthenumberofordinarysharesissuedmultipliedbythemarketvalueofashare

(attheyearend),wasRs.339.3mnat31stMarch2014(Rs.316.3mnasat31stMarch2013).

5) MarketValueoftheCompany’sOrdinaryShares

Market Value per 2014 Date 2013 Date Change

share Rs Rs

Highest Price 105.00 16.01.2014 120.00 28.8.2012 (12.5%)

LowestPrice 74.00 5.04.2013 62.00 13.6.2012 19%

Closing 88.20 31.3.2014 82.20 31.3.2013 7.2%

inVestOr information (contd...)

The share price of the company has increased

five-fold during last ten years

Share Price Rs.160

140

120

100

80

60

40

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

20

0

Rs.


6) Analysis of Shareholders based on number of shares asat31stMarch2014

No of Shares held No of % of Total % of total

Shareholders Shareholders holding holding

1-1,000 1,023 90.9 121,652 3.2

1,001–10,000 88 7.8 244,041 6.4

10,001-100,000 9 0.8 304,427 7.9

100,001–1,000,000 3 0.3 932,106 24.2

1,000.000&Over 2 0.2 2,245,748 58.3

Total 1,125 100 3,847,974 100.0

Analysis of Shareholders based on number of shares asat31stMarch2013

No of Shares held No of % of Total % of total

Shareholders Shareholders holding holding

1-1,000 1,021 90.0 130,334 3.4

1,001–10,000 94 8.3 258,915 6.7

10,001-100,000 7 1.0 281,195 7.3

100,001–1,000,000 3 0.4 932,106 24.2

1,000.000&Over 2 0.3 2,245,424 58.3

Total 1,127 100 3,847,974 100.0

7) AnalysisofShareholderscategory-wiseasat31stMarch2014

Category No of % of Total % of

Shareholders Shareholders holding total holding

Individual- Local 1,081 96.4 621,922 16.2

Institutional-local 42 3.6 3,225,742 83.8

Individual - foreign 2 0.0 310 0

Institutional- foreign 0 0.0 0 0

Total 1,125 100 3,847,974 100

AnalysisofShareholderscategory-wiseasat31stMarch2013

Category No of % of Total % of

Shareholders Shareholders holding total holding

Individual- Local 1,086 96.4 621,869 16.2

Institutional-local 40 3.5 3,225,805 83.8

Individual - foreign 1 0.1 300 0

Institutional- foreign 0 0 0 0

Total 1,127 100 3,847,974 100



8) NoofShareTransctionsTheNoofSharetransactionsfortheyearended31stMarch2014and2013are49,773and54,183respectively.

9) Public HoldingsAsat31stMarch2014,thepublicheld43.04%(in2012/2013-13.91%)ofthesharesoftheCompany.Thissignificantdifference

arose due to change in the interpretation of the definition of public holding by the Stock Exchange.

10) TwentyMajorShareholdersasat31stMarch2014

Shareholder No of Shares % No of Shares %

as at 31/3/2014 as at 31/3/2013

1 DSI Samson Group ( Pvt) Ltd. 1,204,824 31.3 1,204,824 31.3

2 SeylanBankPLC/ThirugnanasambanderSenthilvel 1,040,924 27.0 1,040,600 27.0

3 D.SamsonIndustries(Pvt)Ltd. 548,758 14.2 548,758 14.2

4 D.Samson&Sons(Pvt)Ltd. 274,348 7.1 274,348 7.1

5 Dr.Thiruganansabander Senthilvel 109,000 2.8 109,000 2.8

6 SamsonRubberIndustries(Pvt)Ltd. 96,553 2.5 96,553 2.5

7 SangerGMBH 78,622 2.0 78,622 2.0

8 AbeysiriHemapalaMunasinghe 30,107 0.8 30,107 0.8

9 Mr.G.K.Piyasena 22,980 0.6 22,980 0.6

10 SamsonManufacturers(Pvt)Ltd. 22,154 0.6 22,154 0.6

11 Mr.H.Tanigawa 20,460 0.5 20,460 0.5

12 Mr.N.C.Pakianathan 12,538 0.3 9,304 0.3

13 Mrs.D.R.Wimalasena 10,694 0.3 - -

14 Mrs.D.W.Rathna - 10,796 0.3

15 Mr.D.R.Rajapaksa 10,319 0.3 10,319 0.3

16 WaldockMackenzieLtd./Hi-LineTrading(Pvt)Ltd. 10,000 0.3 10,000 0.3

17 Mr.D.K.Rajapaksa 9,931 0.3 9,931 0.3

18 Mr.T.S.Salim 9,400 0.3 9,900 0.3

18 Mr.D.M.Rajapaksa 9,295 0.2 9,295 0.2

19 Dr.D.S.Rajapaksa 7,156 0.2 7,156 0.2

20 WaldockMackenzieLtd./Hi-LineTowers(Pvt)Ltd. 7,100 0.2 7,100 0.2

Total 3,535,163 91.8 3,532,207 91.8

Others 312,811 8.2 315,767 8.2

Total Shareholdings of the Company 3,847,974 100.0 3,847,974 100.0



FOur-QuarterFinancial summary

2013 2012 2013 2012 2013 2012 2014 2013Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Un audited Un audited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Continuing operationsRevenue

Export 105,693 142,276 114,249 152,224 186,011 166,399 207,162 195,144 Local 69,072 97,292 89,504 83,010 88,814 66,132 84,961 72,717

Total Revenue 174,765 239,568 203,753 235,234 274,825 232,531 292,123 267,861Cost of sales (154,032) (206,748) (171,124) (194,765) (229,684) (196,581) (252,146) (234,057) Gross profit 20,733 32,820 32,629 40,469 45,141 35,950 39,977 33,804

Other Operating income 255 1,339 721 519 848 226 1,075 (186) Exchange gain / (Loss) 4,818 3,744 6,059 (885) 3,413 2,660 3,952 549 Selling & Distribution Cost (4,330) (8,211) (3,638) (5,179) (7,174) (6,931) (7,147) (6,364) Administrative expenses (15,521) (13,825) (16,019) (15,500) (16,238) (15,608) (24,287) (18,975)

Operating profit 5,955 15,867 19,752 19,424 25,990 16,297 13,570 8,828

Finance costs (1,596) (2,322) (974) (3,017) (1,115) (2,456) (1,244) (1,810) Profit before income tax 4,359 13,545 18,778 16,407 24,875 13,841 12,326 7,018

Income tax expense (921) (644) (2,035) (2,598) (3,105) (1,491) (2,193) (528) Profit after income tax 3,438 12,901 16,743 13,809 21,770 12,350 10,133 6,490

FINANCIAL POSITION

2013 2012 2013 2012 2013 2012 2014 2013Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Un audited Un audited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Assets

Non-current assets

Property Plant & Equipment 168,440 176,150 164,759 175,539 163,090 175,566 172,215 174,449Investments in Others 16,335 - 16,335 - 31,354 - 31,354 - Intangible assets 8,631 9,910 8,312 9,590 7,992 9,271 - 8,951Deferred Tax Assets 7,631 - 8,405 - 5,290 - 5,290 6,856

201,037 186,060 197,811 185,129 207,726 184,837 208,859 190,256 Current assets

Inventories 138,669 149,125 160,453 134,418 168,342 160,789 125,502 144,174Trade & other receivables 172,759 216,019 172,727 196,708 212,117 192,170 221,728 224,308Due from related companies - - - - - - - Income tax refund due 13,066 15,472 11,382 13,331 9,663 12,475 9,663 13,252Cash and cash equivalents 44,084 30,703 48,230 35,891 51,203 42,589 79,934 19,755

368,578 411,319 392,792 380,348 441,325 408,023 436,827 401,489Total Assets 569,615 597,379 590,603 565,477 649,051 592,860 645,686 591,745Equity and liabilities

Stated capital 105,753 105,753 105,753 105,753 105,752 105,752 105,752 105,752General reserves 110,000 110,000 110,000 110,000 110,000 110,000 110,000 110,000Retained earnings 188,590 155,352 197,637 161,252 219,408 173,604 231,388 185,152

Total equity 404,343 371,105 413,390 377,005 435,160 389,356 447,140 400,904Liabilities

Non-current liabilitesDeferred Tax Liabilities 10,339 9,277 11,466 9,734 9,737 10,368 9,737 8,831Retirement benefit obligations 14,635 9,629 15,569 10,055 16,128 8,818 16,953 14,528

24,974 18,906 27,035 19,789 25,865 19,186 26,690 23,359Current liabilities

Trade and other payables 98,427 114,245 93,468 87,629 115,722 147,645 139,347 106,678Short term borrowings 21,243 32,911 39,013 40,123 48,034 12,996 29,328 45,285Bank overdrafts 20,628 60,212 17,697 40,931 24,270 23,677 3,181 15,519

140,298 207,368 150,178 168,683 188,026 184,318 171,856 167,482 Total liabilities 165,272 226,274 177,213 188,472 213,891 203,504 198,546 190,841Total equity and liabilities 569,615 597,379 590,603 565,477 649,051 592,860 645,686 591,745

For the 03 Months ended 31st December For the 03 Months ended 31st MarchFor the 03 Months ended 30th June For the 03 Months ended 30th September

As at 31st MarchAs at 30th June As at 30th September As at 31st December

INCOME STATEMENT


ten - yeareconomic summary

Economic Indicators 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

GDP Indicators

GDP growth Per cent 5.4 6.2 7.7 6.8 6.0 3.5 8.0 8.2 6.3 7.3 GDP (current prices) Rs. billion 2,091.0 2,453.0 2,939.0 3,578.0 4,411.0 4,835.0 5,604.0 6,543.0 7,579.0 8,674.0 GDP (current prices) USD billion 20.7 24.4 28.3 32.3 40.7 42.1 49.6 59.2 59.4 67.2 GDP per capita (USD) Growth Per cent 8.6 20.5 14.5 13.8 24.6 2.1 16.7 18.3 3.0 12.0 GDP per capita (market prices) Rs (000) 107.4 124.7 147.8 178.8 218.2 236.4 271.3 313.6 372.8 423.5 GDP per capita (market prices) USD 1,030.0 1,241.0 1,421.0 1,617.0 2,014.0 2,057.0 2,400.0 2,836.0 2,922.0 3,280.0

Fiscal policy IndicatorsBudget deficit Per cent of GDP -7.5 -7 -7 -6.9 -7 -9.9 -8 -6.9 -6.5 -5.9

Monetory policy Indicators12 month T-Bill yield (year-end) Per cent 7.7 10.4 13 20 19.1 9.3 7.6 9.3 11.7 8.3Prime lending rate (year-end) Per cent 10.2 12.2 15.2 18.0 18.5 10.9 9.3 10.8 14.4 10.1 M2b money supply growth Per cent 19.6 19.1 17.8 16.6 8.5 18.6 15.8 19.1 17.6 16.7

Other Economic IndicatorsInflation annual average (CCPI 2006/07=100) Per cent - - - - - 3.5 6.2 6.7 7.6 6.9Unemployment rate Per cent 8.3 7.2 6.5 6 5.4 5.8 4.9 4.2 4 4.4All share index (year-end) Points 1507 1922 2722 2541 1503 3386 6636 6074 5643 5913Population Million 19.5 19.7 19.9 20 20.2 20.5 20.7 20.9 20.3 20.5

External Sector IndicatorsExports USD billion 5.8 6.3 6.7 7.7 8.1 7.1 8.6 10.6 9.8 10.4Imports USD billion 8.0 8.9 10.3 11.3 14.1 10.2 13.5 20.3 19.2 18.0 Balance of payments Per cent of GDP (1.0) 2.1 0.7 1.6 (3.5) 6.5 1.9 (1.9) 0.3 1.5 Current account balance USD billion (0.6) (0.7) (1.5) (1.4) (1.4) (0.2) (1.1) (4.6) (4.0) (2.6) Current account % of GDP Per cent (3.1) (2.7) (5.3) (4.2) (9.5) (0.5) (2.2) (7.8) (6.7) (3.9)

ForiegnCurrency IndicatorsExchange rate (annual average) Rs/USD 100.5 104.0 110.6 108.3 114.9 113.1 110.6 127.6 129.1

Rs/Euro 125.1 130.6 151.6 159.3 160.2 150.1 153.9 164.0 171.5 Rs/Yen 0.9 0.9 0.9 1.1 1.2 1.3 1.4 1.6 1.3 Rs/INR 2.3 2.3 2.7 2.5 2.4 2.5 2.4 2.4 2.2

Exchange rate change_ USD (annual average) Per cent 4.8 -0.7 3.4 6.4 -2.1 6.1 -1.6 -2.2 15.4 1.2

Rubber Sector Information

Production kg mn 94.7 104.4 109.2 117.6 129.2 136.9 152.9 158.2 152.0 130.4 Total extent hectares ‘000 115.0 116.0 120.0 120.0 122.0 124.0 126.0 129.0 131.0 132.0 Yield kg/hectare 1,064.0 1,144.0 1,128.0 1,261.0 1,382.0 1,437.0 1,561.0 1,566.0 1,459.0 1,219.0 Average price Colombo Auction Rs/kg 127.2 141.0 202.2 234.2 269.5 211.7 403.0 508.8 416.6 376.9 Export (f.o.b) Rs/kg 127.3 148.0 204.7 234.5 278.4 202.3 377.5 535.4 420.7 389.8


ten - yearFinancial summary

Year Ended 31st March 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Income statement :

Turnover 952,561 973,858 961,489 716,102 588,207 620,518 698,876 638,458 462,687 455,814

ProfitBeforeTaxation 64,841 51,077 19,123 (55,980) (7,608) 14,533 70,012 63,424 25,605 45,692

Taxation (8,491) 4,438 696 (229) (663) (5,757) (9,776) (13,297) (6,235) (7,779)

Profit After Taxation 56,349 55,515 19,820 (56,209) (8,271) 8,775 60,295 50,127 19,370 37,913

Balance Sheet :

Capital And Reserves

Statedcapital 105,752 105,752 105,752 105,752 105,752 105,752 105,752 38,480 38,480 32,983

CapitalReserves 110,000 110,000 110,000 10,000 10,000 10,000 10,000 67,272 67,272 47,483

RevenueReserves 233,806 185,152 137,332 223,893 280,102 288,373 279,597 229,302 186,871 167,502

Shareholders funds 449,558 400,904 353,084 339,645 395,854 404,125 395,349 335,054 292,623 247,968

Non Current Liabilities

InterestBearingBorrowings - - - - 868 5,120 16,877 14,500 20,500

DeferredTax 10,906 8,831 11,408 11,388 11,703 11,202 7,808 10,335 9,594 8,604

RetirementBenefitObligation 15,130 14,528 9,906 7,775 6,306 5,234 8,150 9,238 5,567 4,680

Total Equity & Non Current Liabilities 475,594 424,263 374,398 358,808 414,731 425,681 428,184 369,127 328,284 261,252

Assets Employed

CurrentAssets 424,020 402,853 388,248 388,205 476,617 481,125 421,581 343,385 486,907 307,190

CurrentLiabilities (178,531) (168,845) (208,197) (222,481) (232,670) (231,810) (176,186) (116,794) (283,562) (141,788)

WorkingCapital 245,488 234,008 180,051 165,724 243,947 249,315 245,395 226,591 203,345 165,402

Property,Plant&Equipment 179,751 190,255 194,347 193,084 170,784 176,366 182,789 142,436 124,839 95,749

Investment 50,354 - - - - - - 100 100 100

Long-Term Loans - - - - - - - - - -

Share Issue Expenses - - - - - - - - - -

Total Assets Less Current Liabilities 475,594 424,263 374,398 358,808 414,731 404,557 395,350 335,054 292,623 247,968

Financial Highlights :

Operating Results

NetProfit(%) 6 6 2.10 (7.85) (1.41) 1.41 8.63 7.85 4.19 8.32

AnnualSalesGrowth(%) (2) 1.29 34.00 21.74 (5.21) (11.21) 9.46 37.99 1.51 20.35

ROCE(%) 12.53 13.85 5.61 (16.55) (2.09) 2.17 15.25 14.96 6.62 15.29

Financial Position

QuickAssetsRatio(Times) 1.67 1.53 1.26 1.11 1.69 1.77 1.84 1.41 1.04 1.32

FixedAssetTurnoverRatio(Times) 5.45 5.31 4.95 3.71 3.44 3.52 3.82 4.48 3.70 4.76

Shareholder Information

EarningsPerShare(Rs.) 14.64 14.43 5.15 (14.61) (2.15) 2.28 15.67 13.03 5.03 11.49

Dividends(Rs.‘000) 7,696 7,696 - - - - - 7,696 - 6,597

DividendsRate(%) 20 20 - - - - - 20 - 20

MarketPricePerShare(Rs.) 88.20 82.20 90.00 100.00 86.75 50.25 62.00 44.75 47.25 63.00

PriceEarningsRatio(Times) 6.02 5.70 17.47 (6.85) (40.36) 22.43 3.95 3.43 9.39 5.48

NetAssetsPerShare(Rs.) 116.83 104.18 91.75 88.27 102.87 105.02 102.74 87.07 76.05 75.18


FOreiGncurrency Financial statementsINCOME STATEMENT

FOR THE YEAR ENDED 31ST MARCH 2014 2013 2014 2013Revenue 7,234,897 7,420,048 5,374,617 5,334,456 Cost of sales (6,135,038) (6,278,310) (4,557,561) (4,513,632) Gross profit 1,099,858 1,141,738 817,056 820,824

Other income 17,335 13,328 12,877 9,582 Distribution cost (182,432) (188,966) (135,524) (135,852) Administrative expenses (571,985) (554,203) (424,913) (398,430)

Operating Profit 362,776 411,898 269,497 296,123

Finance Income 158,411 52,699 117,679 37,887 Finance cost (28,710) (75,431) (21,328) (54,229)

Net Finance Income 129,701 (22,731) 96,351 (16,342)

Profit before income taxation 492,477 389,166 365,849 279,781 Income tax expense (64,488) 33,818 (47,906) 24,313

Profit for the year 427,990 422,985 317,942 304,094

STATEMENT OF FINANCIAL POSITION

AS AT 31st March 2014 2013 2014 2013ASSETS

Property, plant and equipment 1,303,009 1,358,237 1,015,244 1,042,782 Intangible Assets 19,349 69,688 15,076 53,503 Available for sale financial assets 161,567 - 125,885 - Other Financial assets 219,414 - 170,957 - Deferred tax assets 37,642 53,378 29,329 40,981 Non Current Assets 1,740,981 1,481,304 1,356,491 1,137,266

- - Inventories 947,994 1,119,496 738,633 859,489 Trade and other receivables 1,733,569 1,760,072 1,350,716 1,351,288 Tax Recoverable 65,951 103,178 51,386 79,215 Cash and cash equivalents 460,625 153,813 358,897 118,090 Current Assets 3,208,139 3,136,559 2,499,633 2,408,081

- - Total Assets 4,949,120 4,617,862 3,856,124 3,545,347

- EQUITY AND LIABILITIES -

(Major Import Currency) (Major Export Currency)

In USD' In Euro'(Major Import Currency) (Major Export Currency)

In USD' In Euro'

Equity 3,401,366 3,121,388 2,650,186 2,396,434

Non- Current Liabilities 196,986 181,871 153,482 139,631 Current liabilities - - Trade & other payables 1,102,278 841,189 858,843 645,820 Short Term Borrowings 248,491 473,414 193,613 363,462

1,350,769 1,314,603 1,052,456 1,009,282 Total Liabilities 1,547,755 1,496,475 1,205,938 1,148,913 Total Equity And Liabilities 4,949,120 4,617,862 3,856,124 3,545,347

01. This information does not constitute a full set of financial statements in compliance with SLFRS/LKAS. 02. Exchange rates prevailing at each year end have been used to convert the statement of financial position and average exchange rate prevailed during the year has been used to convert the income statement.03. Above has been presented for the information purpose only.


GlOssaryof Financial terms

1. Segment : Constituentbusinessunitsgroupedintermsofthenatureandsimilarityofoperations.

2. AnnualSalesGrowth : Percentagechangeoverpreviousyear’sgrossturnover.

3. CurrentRatio : Currentassetsdividedbycurrentliabilities.

4. DividendCover : Profitavailableforappropriationdividedbygrossdividend.

5. DividendperShare : TotalGrossDividenddividedbyno.ofsharesattheendoftheyear.

6. GrossDividend : PortionofProfits,inclusiveoftaxwithheld,distributedtoshareholders.

7. DividendRate : GrossDividendsdeclaredpershare.

8. EarningsperShare : Profitattributabletoshareholdersdividedbytheno.ofsharesissued.

9. InterestCover : Profitfromordinaryactivitiesbeforetaxandfinancecostdividedbyfinancecost.

10.NetAssetsperShare : NetAssetsdividedbytheno.ofshares.

11.PriceEarningsRatio : MarketPricepersharedividedbyearningspershare.

12.DeferredTaxation : Sumsetasidefortaxinthefinancialstatementthatwillbecomepayableinafinancialyear

other than the current financial year.

13.ValueAdditions : ThequantumofwealthgeneratedbytheactivitiesoftheCompany.

14.RevenueReserves : Reserveconsideredasbeingavailablefordistributionsandinvestments.

15.CapitalReserves : Reservesidentifiedforspecificpurposesandconsiderednotavailablefordistribution.

16.ReturnonCapitalEmployed : Profitafterinterest,taxdividedbycapitalemployedorshareholdersfundsattheyearend.

17.ShareholdersFund : Totalofstatedcapitalandrevenuereserves.

18.Capitalemployed : Shareholders’fundspluslong-termbearingloansandborrowings.

19.AverageCapitalEmployed : Meanoftwoconsecutiveyears’capitalemployed.

20.CorporateGovernance : AsystembywhichCompaniesaredirectedandcontrolledbythemanagementinthe

best interest of the stakeholders ensuring greater transparency through better and timely

financial reporting.

21.MarketCapitalization : NumberofordinarysharesinissuemultipliedbytheMarketValuepershareatthebalance

sheet date.

22.RelatedParties : Partieswhocouldcontrolorsignificantlyinfluencethefinancialandoperatingpoliciesof

the business.

23.IntangibleAssets : Anintangibleassetisanidentifiablenon-monetaryassetwithoutphysicalsubstance.

24.Impairment : Thisoccurswhentherecoverableamountofanassetislessthanitscarryingamount.

25.Fairvalue : Thisistheamountforwhichanassetcouldbeexchanged,oraliabilitysettled,between

knowledgeable, willing parties at arm’s length transaction.


nOticeof MeetingNOTICEISHEREBYGIVENthattheTwentySecondAnnualGeneralMeetingofSamsonInternationalPLCwillbeheldonFridaythe19thdayofSeptember2014attheSriLankaCollegeofObstetriciansandGynaecologists,SamsonRajapaksaAuditoriumatNo.112,ModelFarmRoad,Colombo08at2.00p.m.forthefollowingpurposes:

1. ToreceiveandconsidertheAnnualReportoftheBoardofDirectorsontheaffairsofCompanyandtheFinancialStatementstheyearended31stMarch2014andtheReportoftheAuditorsthereon.

2. Tore-electMr.DRRajapaksewhoretiresbyrotationintermsofArticle88(i)oftheArticlesofAssociation,asaDirector of the Company.

3. Tore-electMr.TKBandaranayakewhois71yearsofage,asaDirectoroftheCompanyandtoadoptthefollowingresolution:-

“ITISHEREBYRESOLVEDTHATMr.TKBandaranayakewhois71yearsofagebeandisherebyre-electedasaDirectoroftheCompanyanditisherebydeclaredasprovidedforinSection211(1)oftheCompaniesAct,No.7of2007thattheagelimitof70yearsreferredtoinSection210oftheCompaniesActshallnotapplytoMr.TKBandaranayake”.

4. Tore-electMr.GHAWimalasenawhois73yearsofage,asaDirectoroftheCompanyandtoadoptthefollowingresolution:-

“ITISHEREBYRESOLVEDTHATMr.GHAWimalasenawhois73yearsofagebeandisherebyre-electedasaDirectoroftheCompanyanditisherebydeclaredasprovidedforinSection211(1)oftheCompaniesAct,No.7of2007thattheagelimitof70yearsreferredtoinSection210oftheCompaniesActshallnotapplytoMr.GHAWimalasena.”

5. Tore-appointMessrsHLBEdirisinghe&Co.CharteredAccountantsasAuditorsoftheCompany fortheensuingyearandtoauthorizetheDirectorstodeterminetheirremuneration.

6. ToauthorizetheDirectorstodeterminedonationsfortheyearending31stMarch2015andup tothedateofthenextAnnualGeneralMeeting.

By Order of the Board

SAMSON INTERNATIONAL PLC

P W Corporate Secretarial (Pvt) LtdSecretaries

August 1st, 2014. Colombo

Notes:- 1.AshareholderisentitledtoappointaProxytoattendandvoteatthemeetingonhis/herbehalf.

2. A Proxy need not be a shareholder of the Company.

3. AFormofProxyaccompaniesthisNotice.

4. ThecompletedFormofProxyshouldbedepositedattheRegisteredOfficeoftheCompany,No.110,KumaranRatnam

Road,Colombo02,notlessthan48hoursbeforethetimeforholdingtheMeeting.


nOtes


FOrMof proxy

*I/We………………………………………………………………………of…………………………………………………………………………being*ashareholder/shareholdersofSAMSONINTERNATIONALPLC,doherebyappoint…………………………………………………………………………of……………………………………………………orfailing*him/her*

Dr.DSRajapaksa ofColomboorfailinghim*Mr.DKRajapaksa ofColomboorfailinghim*Mr.DMRajapaksa ofColomboorfailinghim*Mr.DRRajapaksa ofColomboorfailinghim*Mr.CCumaratunge ofColomboorfailinghim*Mr.BLPJayawardena ofColomboorfailinghim*MrTKBandaranayake ofColomboorfailinghim*MrGHAWimalasena ofColomboorfailinghim*Mr.DGPSAbeygunawardana ofColombo

as*my/ourProxytorepresentme/us*,tospeakandvotefor*me/uson*my/ourbehalfattheTwentySecondANNUALGENERALMEETINGOFTHECOMPANYtobeheldon19September2014at2.00p.m.andatanyadjournmentthereof,andateverypollwhichmaybetakeninconsequencethereof. FOR AGAINST

1. ToreceiveandconsidertheAnnualReportoftheBoardofDirectorsontheaffairsofCompanyandtheFinancialStatementsfortheyearendedended31stMarch2014andtheReportoftheAuditorsthereon.

2. Tore-electMr.DRRajapaksewhoretiresbyrotationintermsofArticle88(i)oftheArticlesofAssociation,as a Director of the Company.

3. Tore-electMr.TKBandaranayakewhois71yearsofage,asaDirectoroftheCompanyandtoadoptthefollowingresolution:-

“ItisherebyresolvedthatMrTKBandaranayakewhois71yearsofagebeandisherebyre-electedasaDirector of the Company and it is hereby declared as provided for in Section 211(1) of the Companies Act No.07of2007thattheagelimitof70yearsreferredtoinSection210oftheCompaniesActshallnotapplytoMrTKBandaranayake.”

4. Tore-electMr.GHAWimalasenawhois73yearsofage,asaDirectoroftheCompanyandtoadoptthefollowingresolution:-

“ITISHEREBYRESOLVEDTHATMr.GHAWimalasenawhois73yearsofagebeandisherebyre-electedas a Director of the Company and it is hereby declared as provided for in Section 211(1) of the Companies Act,No.7of2007thattheagelimitof70yearsreferredtoinSection210oftheCompaniesActshallnotapplytoMr.GHAWimalasena.”

5. Tore-appointMessrsHLBEdirisinghe&Co.CharteredAccountantsasAuditorsoftheCompanyfortheensuingyearandtoauthorizetheDirectorstodeterminetheirremuneration.

6. ToauthorizetheDirectorstodeterminedonationsfortheyearending31stMarch2015anduptothedateofthenextAnnualGeneralMeeting.

Signedthis……………dayof………………………..TwoThousandandFourteen.

*Signature/s

Note: 1) *Pleasedeletetheinappropriatewords. 2) Instructions as to completion are noted on the reverse hereof.


INSTRUCTIONS AS TO COMPLETION

1. KindlyperfecttheFormofProxyafterfillinginlegiblyyourfullnameandaddressandsigninthespaceprovided.

Please fill in the date of signature.

2. AshareholderentitledtoattendandvoteattheMeetingisentitledtoappointaProxywhoneednotbeashareholder,

toattendandvoteinsteadofhim.Pleaseindicatewithan“X”intheboxesprovidedhowyourProxyistovoteoneach

resolution. If no indication is given, the Proxy in his discretion will vote as he thinks fit.

3. In the case of a Corporate shareholder, the Form of Proxy must be completed under its Common Seal, which should be

affixed in the manner prescribed by the Articles of Association.

4. If the Form of proxy is signed by an Attorney, the relevant Power of Attorney should also accompany the completed

Form of Proxy, in the manner prescribed by the Articles of Association.

5. ThecompletedFormofProxyshouldbedepositedattheRegisteredOfficeoftheCompany,No.110,KumaranRatnam

Road,Colombo02,notlessthanFortyEight(48)hoursbeforetheappointedtimefortheMeeting.

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SAMSON INTERNATIONAL PLC.

Corporate Office:No. 110, Kumaran Rathnam Road, Colombo 02, Sri Lanka.

Tel : +94 11 4728800 Fax : +94 11 2440890 E-mail : [email protected] Web : www.samsonint.com

samson international plc annual report 2013/14

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