Bogawantalawa Annual Report 2013-2014

Transcription

BOGAWANTALAWA TEA ESTATES PLC | Annual Report 2013/14
CONTENTS
PAGE
NOTICE OF MEETING
02
CHAIRMAN’S STATEMENT
03
FINANCIAL HIGHLIGHTS
05
VALUE ADDED STATEMENT
05
SUSTAINABILITY REPORT
06
CORPORATE SOCIAL RESPONSIBILITY
10
INVESTOR INFORMATION
16
BOARD OF DIRECTORS
18
STATEMENT OF DIRECTORS RESPONSIBILITY
19
CORPORATE GOVERNANCE
20
REPORT OF THE AUDIT COMMITTEE
23
RISK MANAGEMENT
24
DIRECTORS’ REPORT
26
INDEPENDENT AUDITORS REPORT
29
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
30
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
32
CONSOLIDATED CASH FLOW STATEMENT
33
NOTES TO THE ACCOUNTS
34
TEN YEAR SUMMARY
89
CORPORATE INFORMATION
90
FORM OF PROXY
Attached
FINANCIAL CALENDAR
2013/2014
FINANCIAL STATEMENTS
DATE
1st Quarter
08/08/2013
2nd Quarter
08/11/2013
3rd Quarter
31/01/2014
4th Quarter
19/05/2014
ANNUAL REPORT 2013/2014
21st Annual General Meeting
30/09/2014
20th Annual General Meeting
30/09/2013
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Notice of Meeting
NOTICE IS HEREBY GIVEN that the Twenty First Annual General
Meeting of Bogawantalawa Tea Estates PLC will be held at the
Auditorium of the Center for Banking Studies, Central Bank
of Sri Lanka, No 58, Sri Jayawardanapura Mawatha, Rajagiriya
on 30th September 2014 at 10.00 a.m. and the business to be
brought before the Meeting will be:
1.
To receive and consider the Annual Report of the
Board of Directors on the affairs of the Company
and the Financial Statements for the year ended 31st
March 2014 and the Report of the Auditors thereon.
2.
To re-elect as a Director Mr. S A S Jayasundara who
retires by rotation in terms of Article 89 & 90 of the
Articles of Association of the Company.
3.
To elect as a Director Mr. J Molligoda who retires in
terms of Article 96 of the Articles of Association of the
Company.
4.
To authorise the Directors to determine donations for
the ensuing year.
5.
To re-appoint Messrs. BDO Partners, Chartered
Accountants as Auditors of the Company and
to authorise the Directors to determine their
remuneration.
Notes:
1. A member entitled to attend and vote at the meeting
is entitled to appoint a Proxy to attend and vote
instead of him/her.
2.
A Proxy need not be a member of the Company.
3.
A Form of Proxy is enclosed for this purpose.
4.
The completed form of Proxy should be deposited
at the Registered Office of the Company, No. 153,
Nawala Road, Narahenpita, Colombo 5, not less than
forty-five (45) hours before the time fixed for the
commencement of the Meeting.
By Order of the Board
Bogawantalawa Tea Estates PLC
Sgd.
P W CORPORATE SECRETARIAL (PVT) LTD
Director/Secretaries
26th August 2014
Colombo
Vision
“Bogawantalawa Tea Estates PLC aspires to be the world’s best
tea growing and marketing company”
Mission
“To be a company where people share the responsibility and commitment
to attain excellence in managing the resources on a sustainable basis
by providing customers with high-quality products and services whilst
developing our employees and protecting the environment.”
Chairman’s Statement
On behalf of the Board of Directors, I am pleased to welcome
you to the 21st Annual General Meeting and to present you the
Annual Report and Accounts of Bogawantalawa Tea Estates
PLC for the year 2013/2014.
The Tea Industry
According to the Central Bank Annual Report, the Sri Lankan
economy grew by 7.3% in 2013 compared to the 6.3% growth
recorded in 2012 whilst the agriculture sub sector grew only by
4.7%. The share of the agricultural export sector ie; tea, rubber,
coconut etc. accounted for 24.8% of the total export earnings
in 2013. The total tea export earnings for the year amounting
to US$ 1. 54 Billion Contributes only 14.8% of the total export
earnings of Sri Lanka. The total tea export volume from Sri
Lanka for the year 2013 recorded a figure of 320 Million kilos
compared with the world export figure of 1,865 Million kilos. As
for the global market share, Sri Lankan export figure works out
to 17%, while Kenya retained its position as the largest exporter
with a share of 26%. As for the production, Sri Lanka recorded
an all time high production of 340.2 Million kilos, which is a gain
of 12 million kilos from the previous year. However, the high
grown production figure of 74.4 million kilos was only 22% of
the total Sri Lankan tea production.
Performance of the company
Very adverse weather conditions prevailed during the year,
especially during the period June to September 2013 coupled
with the 20% wage increase granted w.e.f 1st April 2013 had a
major impact on the financial performance which has resulted
in a net loss of Rs. 39.5 Million for the year under review. The
company has experienced a drop of 8.3 % in turnover mainly
due to crop shortfalls. The company net sale average for tea of
Rs. 414.03 is an increase of Rs. 9.69 per kg from the previous
year. The high grown tea estates ended the season at an overall
yield of 1608 kg per hectare, which is 7% below last season
productivity figure. The cost of production has increased by Rs.
23.42per kg to due to crop shortfalls and the escalation of costs
related to wages, fuel and electricity.
Despite adverse financial results, the company continued
its capital development programmes, in particular field
development activities, factory modernization programmes
and worker welfare activities, and in fact has invested Rs.
193.4Mn during the year under review with a view to ensuring
long-term sustainability and growth. We continue to invest on
medium/ long term development programmes which include
replanting and diversification.
Since Balance Sheet date, higher tea production levels achieved
by our estates coupled with increase in Bogawantalawa
tea prices, due to the strategies & actions adopted by the
management to improve integrated quality & productivity,
resulted in a turnaround situation in the first quarter financial
results of the current year 2014/15 itself, recording a net profit
after tax of Rs.31.4 Million during the first quarter of 2014/15 as
against a net loss of Rs. 41.5 Million during the corresponding
period of the previous year
Performance of BPL Teas, the marketing subsidiary
The marketing subsidiary, BPL Teas (Pvt) Ltd. has been focusing
on further improving its efforts in marketing teas in different
forms such as value added flavored black & green teas, silver
tips, herbal teas etc., in selected international markets. The
company has invested Rs.220 Million in modern state- of- theart tea bag manufacturing machines to meet the changing
demand of modern “knot” base tea bags. BPL Teas continues to
establish firm relationships and contracts with well-established
private label brands. We are pleased to inform you that in
terms of financial performance, the company has shown
a tremendous growth prospects and has recorded overall
revenue of Rs.1.2 Billion and after tax profit of Rs.42 Million
for the period under review. Our major business partners in
Netherlands and Sweden have contributed Rs.23.7 Million
during the year to Bogawantalawa estate workers as fair trade
premium for uplifting their welfare and social standards.
Bogawantalawa sustainability practices
The Bogawantalawa’s sustainable development policy has at
its core the twin pillars of “people and planet”. Its long term
value creation for the shareholders depends on adapting to the
environment and the sustainable development of our estates
and the welfare of the community in which we operate.
The garden fresh teas of Bogawantalawa estates are unique
because of our integrated approach linking the overall estate
operations to the ecological systems and socially responsible
activities. Our operations are conducted such that it provides
a platform for its business to thrive in a sustainable manner. In
so doing, we are in the process of building a strong symbiotic
bond between the employees & the shareholders, its customers
and community at large.
BTE practices fair treatment for its employees ensuring a
conducive work environment and has been implementing
several programmes & projects to enhance quality of life of the
estate community and the villages around the estates as a part
of the company strategy. The projects completed recently in
improving the quality of life in the estate community include;
water supply schemes, new construction of pre-schools and
child development centres. These are in addition to the social
welfare activities conducted through Plantation Human
Development Trust (PHDT).
I am pleased to state that the company has already obtained
Rain Forest Alliance Certification for two estates together with
their tea factories and we are in the process of obtaining RA
certificates for all other estates as well.
Future outlook
The company, in addition to its aggressive tea marketing
strategy is pursuing in harnessing its land and other resources
for diversification with a view to optimizing profits on a
sustainable basis. One such diversification is the embarkation
of diversifying land successfully taken from Aspic Corporation
(Pvt) Ltd., in to oil palm in Anhettigama estate, Deraniyagala,
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Chairman’s Statement
comprising approximately 350 hectares. All necessary approvals
in this connection have been obtained.
With the implementation of the above-mentioned strategies
your company could enhance the long term value creation for
the shareholders on a sustainable basis.
Conclusion
On behalf of the Board of Directors, I wish to place on record my
sincere appreciation to our shareholders, employees, suppliers
and customers for the continued support they have provided
over the year. I am grateful to my colleagues on the Board for
their valued advices and support.
Sgd.
D.J Ambani
Chairman
26th August 2014
Financial Highlights
Rs ‘000s
2013/2014
2012/2013
% change
2,651,117
2,646,370
-
Gross Profit
(41,083)
263,142
-116%
Profit/(Loss) before tax
(38,965)
313,336
-112%
(540)
(26,535)
(41,039)
286,801
Earnings per share
(0.47)
3.42
Dividend per share
-
Net assets per share
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11.66
2013/2014
2012/2013
2,651,117
2,646,370
327,144
289,036
2,978,261
2,935,406
Turnover
Taxation
Profit/(Loss) after tax
Rs per share
Value Added Statement
In Rs ‘000
Turnover
Other Income
Total Revenue
Cost of Bought Material and Service
1,066,834
941,670
1,911,427
1,993,736
1,739,264
1,465,002
Distribution of Value Added
To Employees as Remuneration
To Government
28,993
54,380
To Lenders of Capital
70,540
74,360
Retained in the Business
72,630
399,994
1,911,427
1,993,736
Provision for Depreciation
113,669
113,193
Profit Retained
(41,039)
286,801
72,630
399,994
Retained in the Business
-114%
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Sustainability Report
People, Planet and Profit
Bogawantalawa Tea Estates PLC (BTE) is a leading tea
exporter who produces a variety of own brand and private
label tea products from the teas manufactured in its own
estates. The Company’s high grown tea estates are located in
Bogawantalawa Valley known as the “Golden Valley of Ceylon
Tea”. These estates are located in the extensive western slopes
of the tea planting district of Nuwara Eliya. High elevations
are considered to be the most favorable for producing quality
tea. Its lush, vigorous tea bushes produce pure fresh teas, with
its distinctive aroma and taste. With years of experience we
are positioned to be the preferred private label partner for
discerning customers.
Key interventions of Bogawantalawa sustainable Tea
“Bogawantalawa Tea” is made according to the principles
of “sustainable food” thus providing values to discerning
customers, community, employees and all other stake holders.
The quality of tea is affected by a number of factors which can
be classified into four; namely cultivars, environmental aspects,
agricultural practices and tea manufacturing techniques. The
fermentation ability, chemical components and agronomic
characters vary with cultivars. Soils and climate are two
major factors affecting the quality. Agricultural practices
include among others prudent harvesting techniques, fertility
management & irrigation, plant protection etc. Tea manufacture
involves a series of complicated operations (withering, rolling,
fermenting, drying & sifting) which indeed can be regarded
as a combination of science, art and craft. Slight changes in
manipulation of every step can affect the final quality including
appearance, tea liquor,colour, aroma and taste.
(1) Carbon neutral plantations
BTE garden fresh teas are unique because of the company’s
integrated approach linking the overall estate operationsto the
ecological systems and socially responsible activities (CSR). In
this report, estate interventions on sustainable management of
tea are discussed in brief.
Sustainability Policy
“BTE sustainable development policy is based on its premise
that its long term value creation for the shareholders
depends on the sustainable development of our estates
and the community in which we operate.”
•
•
The environmental sustainability policy consistently
reviews the commitment of BTE to conserve and
manage the environment in which the company
operates for the benefit and well- being of the present
and future generations within plantations and its
neighborhood.
Towards achieving this objective, BTE shall pursue
environmentally friendly and socially responsible
practices & methods in all its agricultural field
operations, tea manufacturing processes and managing
its employees to ensure that all natural resources and
eco-systems will be managed in a sustainable manner.
BTE key interventions of sustainable development programmes
are as follows.
1.
2.
3.
4.
5.
Carbon neutral plantations
Plantation forestry
Conservation and social forestry
Towards organic production
Human resources and social development
The BTE concept of carbon neutral plantation aimed at
neutralizing the emissionof carbon dioxide gasses from the
estates because it is the gas which is highly contributed to the
“green- house” effect. Greenhouse effect causes to the Global
warming and as a result climatic and weather changes, sinking
of lands, increasing of sea levels due to melting of glaziers,
crop damages, pest and diseases, skin cancers, flora and fauna
damagers…etc. are possible to experienced.
Sources of carbon dioxide production in plantation sector are
burning of fossil fuels, processing, fermentations, microbial
activities, natural process…etc. Our interventions and practical
applications to be a carbon neutral plantation are as follows,
1. Management and cultivationof carbon sinks in large scale
More than 85% of our total extent has covered with
any vegetation type such as bushes, trees, shrubs,
veins, grasses, flowering plants, micro flora…etc. This
vegetation absorbs Co2 from atmosphere during
day time and emit O2 environment to maintain the
equilibrium of atmosphere.
2. Minimize consumption of natural resources
Non-renewable fossil fuels are non-renewable natural
resource. It produces a high percentage of Co2, Co, No2
and So2.
3. Minimize production of green-house gases
Co2, Co, No2, So2, CFC and O3 are green-house gasses.
BTEL has identified sources of these gases and have
adopted controlling measures.
4. Extension services and awareness programs
Extension programmes to educate the employees and
their family members, School children, Community,
and other stake holders are conducted, periodically,
in collaboration with Government Organizations, NGO
and private service providers.
5. Recycling and waste management
Uncontrolled and disorganized waste management
system is caused to production of Methane (CH4)
and Co2 while creating a number of hindrances in
sustainable development. BTEL is highly concern about
the waste management and do recycling accordingly.
6. Own fuel wood reserves
The fuel wood plantations are maintained in order to be
sustainable from energy reserves. Ecologically adapted
provincials of Eucalyptus Species, Calliandracallothyrus,
Grevelliyarobusta…etc. are planted in wood lots. High
productivity, high energy value, minimize the pressure
on natural forest, high biodiversity, habitat to wild life
are few benefits of these fuel wood reserves.
7. Sustainable replanting and new planting
When trees are harvested for fuel wood purpose
or old teas are uprooted for replanting, replanting
programmes are conducted without delaying to
maintain the ecological sustainability.
8. Tea Factories
Earlier, our tea processing factories ran with the fossil
fuels. At present BTE has converted these factories to
use the Steam Broilers. As a result, net emission of Co2
quantity is negligible, from our tea estates.
9. Facilitate to enhance bio diversities and eco system stability
All the flora and fauna have been inventoried.
Conservation measures are adapted to protect the red
listed and endemic flora and fauna. BTE environmental
professionals always monitor the biodiversity and
facilitate to ecosystem stability.
10. Green development
Green development is a land use planning concept that
includes consideration of community-wide or regional
environmental implications of development, as well
as site-specific green building concepts. This includes
city planning, environmental planning, architecture,
landscape architecture and community building.
11. Hydro power plants
The power generated by the group utilizing
Bogawantalawa land exceeds 10(ten) MW which is
more than the electricity usage by BTE tea factories and
the other buildings in the estates.
This step is in keeping with the focus of sustainability
in the plantations and also towards clean energy
generation resulting in contributing towards
minimizing carbon Emission.
Mini hydro power plants are,
1. Maliboda Estate/ Ellapita Ella - 0.8Mega Watts
2. -Do- -Magalganga - 9.9MW
3. -Do
- MandagalOya - 0. 9 MW
In addition Bogawantalawa has six small scale hydro power
plants in the estates.
Bogawana - 115KW
Although the rated Generator output is 115KW, it generates
only around 70KW. Rehabilitation to the existing machine
would be done after inspecting the turbine components such
as runners, wearing rings, vanes etc.
Loinorn - 157KVA
At present it could generate 157KVA, but shorter period, around
6 - 7 hours. This machine works with the availability of water at
the reservoir tank.
Campion - 40KVA
Here too, repairs to the channel and increase the water holding
capacity by building new structures to the existing system,
would have to be undertaken. Thepower generating capacity
could be improved and run for longer hours.
Kotiyagalla Estate.
Chinese Pelton - 75KW
English Pelton - 112.5 KVA (90KW)
The necessary repairs are in progress. With the improvement
to the present channel if both generators are working these
two generators could absorb at least 40% of the electricity
consumption.
Wanarajah Estate
The Mini Hydro capacity is around 100KW. However the
channels would have to be rehabilitated.
In addition to above, BTE has a Joint Venture projects to
generate power @ Osborne estate.
Osborne (Agra Oya Hydro (Pvt) Ltd)
Capacity - 1.5 MW
Majority of potential areas for hydro power have been
converted and another project @Campion is in the pipeline.
To enhance the efficiency of energy consumption energy
audits are periodically being conducted.
(2) Plantation forestry
Plantation forestry provides mainly production, protection
and recreation benefits to the tea estates. With the prevailing
demand for the fuel wood, timber and other products related
to the forestry, the opportunity to plantation forestry is vast.
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a. Production
Timber, Fuel wood, Poles, Gum, Resins, Honey, …etc.
b. Protection
Water shade, Catchments, Minimize Soil Erosion,
Improve soil resource base, Habitats
(iii) To encourage plantation of large and beautiful trees which
provide shadow to enhance the natural beauty and to plant
all around the cultivation field to increase production.
(iv) To encourage environment conservation byplantation and
to create general consciousness regarding environment
conservation.
c. Recreation
Bare lands turn in to green, Improve Bio diversity index,
House for eco-tourism,etc.
(v) To enhance the natural beauty of the villages and cities by
plantation.
As a reputed Company we have been given our prior attention
to Environmental conservation through plantation forestry
under the sustainable development. Sustainable managements
of natural resources are vital and these activities are managed
by Forestry / Timber and Environment Division of the Company
in collaboration with estates management by introducing of
diverse agro forestry models.
(4) Towards organic production
The basic definition is food grown or raised without the use
of additives, coloring, synthetic chemicals (e.g., fertilizers,
pesticides, and hormones), radiation, or genetic manipulation.
At present, we are working towards the organic production with
our innovative findings and vast research and development
activities.
Selected bare lands and marginal tea fields have been
converted to Plantation Forestry and we are managing
Eucalyptus grandis 105,280 Number of trees in 150 Ha of
extent as managed timber blocks. All the activities including
tending / silvicultural operations, harvestings … etc, related to
forestry conduct according to forestry master plan-2013/2018,
Bogawantalawa Tea Estates PLC and national forestry policies,
rules and regulations.
In-house activities are as follows,
1. Minimum use of artificial fertilizers
Both major and minor nutrients are replaced with
organic fertilizers
Reforestation and afforestation in both Up Country
& Low Country estates are conducting annually with
timber and fuel wood species. Eucalyptus grandis and
Swieteniamacrophylla,commonly grow as timber species and
Calliandracalothyrsus and Gliricidiamolluccana, as fuel wood
species. It is important to note that we always maintain our
annual allowable cut below the annual increments of stands to
sustainable management of our forestry reserves.
2. In house research activities.
(a) A pilot project is being undertaken with outside
expertise to convert some areas of tea into
cultivation and manufacture of organic tea to
discerning customers.
(3) Conservation and social forestry
Social forestry means the management and protection of
forests and afforestation on barren lands with the purpose of
helping in the environmental, social and rural development.
Social forestry is the forestry by the people and for the people,
whose main purpose is to fulfill the needs of forestry which are
manure, food, fruit, fiber and productive capacity. As a whole
social forestry’s main objective is to reconstruct the ecosystem
and conserve the environment. The objectives of social forestry
are as follows.
(i) To cooperate soil conservation and to prevent spoiling the
productive capacity of soil.
(ii) To increase fuel availability and to increase the food
modification by increasing fruit production.
1. Minimum level of chemicals application
Organic pesticides are being practiced and with the
integrated pest management (IPM) practices.
(b) Compost and Vermi-compost are also being
experimented. “Effect of global warming on
“Eucalyptus Grandis” in up country area “, “Water
use efficiency of Eucalyptus Grandis” and Screening
of most suitable firewood species for up country
tea estates are being studied in collaboration with
scientific institutions.
3. Organic fertilizers and pesticides
Organic fertilizers are fertilizers derived from animal
or vegetable matter. (e.g. compost, manure).
Naturally occurring organic fertilizers include
manure, slurry, worm castings, peat, seaweed,
humic acid…etc. Processed organic fertilizers
include compost, bloodmeal, bone meal, humic
acid, amino acids, and seaweed extracts. Other
examples are natural enzyme-digested proteins,
fish meal, and feather meal. Decomposing crop
residue (green manure) from prior years is another
source of fertility.
Compost project are being done at estate levels to production
of required amount of compost to estate tea planting activities.
(5) Human Resources and Social development
BTE practices fair treatment for its employees ensuring a
conducive work environment for all its employees. The
company encourages its employees to be innovative and be
proactive on sustainable development matters. We strive to
provide career growth and continuous training & development
on new technology. BTE has formulated HR Policies covering
the following aspects.
•
•
•
Policy on recruitment, Induction and Orientation
Succession Planning & career path for employees
Company- wide performance management system
&appraisal
• Management Development and Training.
• Employee responsibilities, discipline, handling
grievances
Awareness Programmes on personal hygiene & first aid,
health & safety are being conducted at all levels in a manner
designed to increase the level of awareness of all aspects of the
environment and its relevance, importance and management.
The company is committed to achieve business growth in ways
that uphold ethical values, human dignity and environment
concerns.
For BTE, CSR will not be a one-off intervention to help out in
an unfortunate social situation. BTE will engage in a sustainable
manner to create a social environment that upholds the
opportunity for its business to thrive. In so doing, we will build a
strong symbiotic bond between the employees & their families,
its customers and community at large.
BTE does not engage in the use of child labour. We have clearly
defined the employee cardre and we follow international rules
and regulations while ensuring the ethical production values
at all time. Also, we provide wide range of facilities to our
employees, including,
a. Facilitate - health, education, sports activities …etc.
b. Social forestry - provide benefits of fuel-wood planting
for home usage
c. Health &Safety measures
d. Counseling, medical camps, entertainmentsetc.
The management takes care of the workers and their families
from infant stages up to retirement. Even after retirement the
management provides medical care and other facilities. Further
we maintain sixty five Child Development Centers (CDCs). Some
of these child development centres require certain structural
renovations, upgrading and modernizing. The company
intends to have all its creches fully modernized by end 2014
in keeping with its commitment towards the well-being of its
worker children.
Our customers have high expectations of the standards and
practices applied by the company. To ensure that we meet
those expectations, the company operations are assessed
by a range of independent and third party assurance and
certification schemes. Such audits are often undertaken by
world recognized NGOs via independent auditors.
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Corporate Social Responsibility
Bogawantalawa Tea Estates PLC (BTE) gives its utmost priority
to the welfare of its estate community and surrounding
villages. We believe in being socially responsible as we
primarily operate in communities which are influenced by tea
plantation companies. For BTE, Corporate Social Responsibility
is not a one-off intervention to help out in an unfortunate
social situation. Our estates engage in a sustainable manner to
create a social environment that upholds the opportunity for its
business to thrive.
In our supply chain management, there is no child labour.
We have clearly defined the employee cadre and follow
international rules and regulations whilst ensuring the ethical
Bogawantalawa Estate:
Issuing of Gas Cookers and ‘Laughs’ Gas Cylinders to the estate
employees: September 2013
production values at all times. When an individual joins our
company, we ensure to take care of them and their families by
conducting medical camps, providing educational facilities,
conducting nutritional programs amongst others. Additionally,
we also provide our employees with water and sanitation
facilities, housing with electricity, community forestry which
provides benefits of fuel wood for heating, and occupational
health and safety measures.
During the year 2013/2014, BTE has continued to uplift the lives
of its community with the following projects amongst others:
Issuing of jerkins to the estate workforce: October 2013
Bogawana Estate:
Purified Drinking Water Project in collaboration with World Vision, Sri Lanka: April 2014
This project aims to provide drinking water to a community of 390 families in the Bogawana Division of Bogawana Estate. The first
phase of this project was completed in 2013 at a cost of LKR 14 million and benefitted 190 families, a school, pre-school, and a Child
Development Center was benefitted. The second phase of this project commenced in April 2014 and will benefit the balance 200
families of Bogawana Estate.
Construction of the ‘Child Friendly Space” building in Bridwell Division in collaberation with World Vision, Sri Lanka:
January 2014 These Child Friendly Space buildings allow children to engage in extra educational activities such as reading, computer
training, arts and crafts etc during their school after hours. A teacher is always present to guide the children through these activities.
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Medical Checkups for workers who engage in tea bush spraying: March 2014
Campion Estate:
Couple counseling: June 2013
Re-Opening of the estate library in collaboration with World
Vision: August 2013
Couples were advised on family planning, inter-relation
marriages etc.
Income generating project: March 2014
Fish was purchased from Hambanthota and resold to workers on Campion Estate. This was also undertaken with the view of
improving the nutritional diet of workers.
Fetteresso Estate:
Ayurveda Clinic conducted in collaboration with the PHDT: June 2013
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Renovation of the Child Development Center in the Fetteresso Division conducted in collaboration with World Vision, Sri Lanka:
January 2014
Water supply project conducted in collaboration with World Vision: January 2014
Kotiyagalla Estate
Blood donation campaign: November 2013
Distribution of plants and seeds under the Divineguma program
Awareness program on the use of Gas
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Lethenty Estate:
Dental hygiene program for children and adults: June and October 2013
Loinorn Estate:
Renovation of the Bogawantalawa Hospital ward: September 2013
The Bogawantalawa Hospital ward was painted and mosquito nets, CFL bulbs, and fruits were donated. This project was conducted with the assistance of Fairtrade premium.
Promoting the use of Liquefied Petroleum Gas
Norwood Estate:
Elders’ sports competition: September 2013
Dengue Awareness Program: November 2013
Donation of 50 gift parcels to children
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Donation of Baby Cots: November 2013
This project was conducted in collaboration with the Berendina Organization.
Osborne Estate:
Eye Clinic: April 2013
Water project: July 2013
This project was conducted under the WATSAN project.
Construction of Latrines: December 2013
This project was conducted under the WATSAN project.
Poyston Estate:
Providing loans for housing, cattle breeding, business etc through the Poyston Estate worker housing co-op society and
opening of a co-operative outlet with all essential consumables and other sundry items of day to day need at reasonable prices:
February 2014
Medical Camp: February 2014
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Free Books and school bags were issued to the children who attended the estate child development centers and sought admission
to Grade I: December 2013
Wanarajah Estate:
Assistance to Earth Slip victims: May/June 2013
Through this project broken homes were re-built, mud and sand was removed, and medical assistance was provided to those in
need of it.
Medical screening conducted with the assistance of Fairtrade Funds: October 2013 - April
2014
Construction of Latrines: 2013/2014
Illuktanna Tea Factory:
New Year celebrations: January 2014
The management of Illuktanna organized a gala New Year Celebration event with free lunch and a musical show for its employees.
16
Investor Information
1.) Stock exchange listing
The Ordinary Shares of the Company are Listed on the Colombo Stock Exchange In Sri Lanka
Ordinary Shares
Stated Capital - Rs. 586,250,010.00
2.) Major shareholders as at 31st March
Name
31st March 2014
No of
shares
1 Metropolitan Resource Holdings PLC
Commercial Bank of Ceylon PLC/
Metropolitan Resource Holdings PLC
53,889,067
2,512,500
2 Dr. T. Senthilverl
3 Mr. D.A.De Silva Wickramanayake
]
31st March 2013
%
No of
Shares
%
56,401,567 67.345
56,401,567 67.345
11,300,560 13.493
11,300,560 13.493
6,086,006
7.267
6,069,836
7.248
4 Mr. M.N.Singa Laxana
711,600
0.850
746,700
0.892
5 Mrs. N.H.Abdul Husein
226,816
0.271
205,793
0.246
6 DR. R.D.Bandaranaike
196,909
0.235
196,909
0.235
7 Gnanam Imports (Pvt) Ltd.
174,735
0.209
187,435
0.224
8 Eagle Proprietary Investments Limited
137,359
0.164
-
-
9 Mr. W.T.K.Pieris (Deceased)
100,000
0.119
100,000
0.119
10 Mr. H Abdulhusein
97,000
0.116
7,000
0.008
11 Sea Consortium Lanka (Pvt) Ltd.
85,000
0.101
85,000
0.101
12 Employees Provident Fund
81,724
0.098
40,166
0.048
13 Mr. S P Jayakumar
75,257
0.090
45,257
0.054
14 Mr. A.R.Ibrahim
72,670
0.087
67,796
0.081
15 Seylan Bank PLC/ Mr.Jayantha Dewage
70,000
0.084
70,000
0.084
16 Mr. M.A.Junaid
68,582
0.082
54.569
0.065
17 Waldock Mackenzie Limited/
Mr. Lalin Tusith Samarawickrama
68,100
0.081
68,100
0.081
18 First Capital Markets Limited/
Mr. L.K.N.K.Kulawardena
66,590
0.080
66,590
0.080
19 Mr. D.J.Ambani
63,750
0.076
63,750
0.076
20 Mr. P Sasikumar
60,084
0.072
33,584
0.040
3.) Distribution of Ordinary Shareholders
As at 31/03/14
As at 31/03/13
From To
No of
Holders
No of
Shares
%
No of
Holders
No of
Shares
%
1 - 1000
17,946
4,173,179
4.98
17,904
4,197,568
5.01
1,001 - 10,000
619
1,915,297
2.29
638
1,970,516
2.35
10,001 - 100,000
81
2,425,972
2.90
87
2,473,116
2.95
100,001 - 1,000,000
5
1,447,419
1.73
4
1,336,837
1.60
Over 1,000,000
4
73,788,133
88.10
4
73,771,963
88.09
Total
18,655
83,750,000
100.00
18,637
83,750,000
100.00
17
Investor Information
4.) Categories of Shareholders - Resident/Non Resident
As at 31/03/14
As at 31/03/13
No of
Holders
No of
Shares
%
No of
Holders
No of
Shares
%
Local Individuals
18,549
26,071,680
31.13
18,530
26,335,236
31.44
Local Institutions
87
57,305,670
68.43
91
57,274,673
68.39
Foreign Individuals
17
177,460
0.21
15
82,260
0.10
Foreign Institutions
2
195,190
0.23
1
57,831
0.07
18,655
83,750,000
100.00
18,637
83,750,000
100.00
Total
As at 31/03/2014
Company
Group
5.) Earning per Share (Rs)
6.) Dividend Per Share (Rs)
7.) Net Assets per share (Rs)
8.) Price earning ratio
9.) Return on capital employed
As at 31/03/2013
Company
Group
0.49
0.34
3.42
4.19
-
-
-
-
11.07
12.02
11.66
12.58
(18.98)
(27.22)
3.36
2.74
(0.04)
0.03
0.29
0.34
10.) Market Value of Shares
Highest (Rs)
(20/05/2013) 13.50(01/10/2012) 15.00
Lowest (Rs)
(18/12/2013) 8.50(14/06/2012) 7.00
Year end (Rs)
11.) Public Holding percentage 25.28%
9.30 11.50
18
Board of Directors
Mr D J Ambani
Mr Dinesh Jamnadas Ambani is the present Chairman of the
following companies:
²
²
²
²
²
Metropolitan Resource Holdings PLC and its subsidiary
Ceylon Tea Gardens Ltd.
Bogawantalawa Tea Estates PLC and its 100% owned
subsidiary BPL Teas (Pvt) Ltd
Metrocorp (Pvt) Ltd,
Megatech (Pvt) Ltd.
Eco Power Group
He is a Director of the following companies
² Ceylon Tea Trails
² Walters Bay Bogawantalawa Estates (Pvt) Ltd
Mr L J Ambani
Mr.Lalithkumar Jamnadas Ambani is a fellow Member of
the Chartered Institute of Management Accountants and
an Associate member of the Sri Lanka Institute of Chartered
Accountants He also functions as a Director of the following
companies:
²
²
²
²
²
²
BPL Teas (Pvt) Ltd
Metrocorp (Pvt) Ltd
Megatech (Pvt) Ltd
Office Network (Pvt) Ltd
Eco Power Group
Mr C M O Haglind
Mr. Carl Michael Oscarsson Haglind has a MBA from Stockholm
School of Economics. He is a Founder and President of
Teamwork Technology. He is also a Director of Eco Power, BPL
Teas (Pvt) Ltd and Gourmet Teas. Prior to this he was the Vice
President of Manpower in Sweden.
Mr S A S Jayasundara
Mr.Sudath Ajitha Samaradivakara Jayasundara has a Bachelor of
Law (LL.B) from the University of Colombo and is an Attorneyat-Law & Notary Public, having an active practice in the Civil
Courts of Sri Lanka. He also holds a Diploma in International
Relations (BCIS).
He currently works and holds the following positions:
²
²
²
²
²
Board Director and General Manager of Telshan Networks
(Pvt) Ltd (TNL TV)
Board Director of Harishchandra Mills, Matara
Board Director of Varna Ltd
Board Director of Metropolitan Resource Holdings PLC
and
Board Director of Bimputh Finance PLC
Mr D A De S Wickramanayake
Mr. Don Ariyaseela De Silva Wickramanayake is the present
Chairman/Managing Director of Master Divers (Pvt) Ltd. ,
Director of Pelwatte Sugar Industries Ltd, Chairman of Pelwatte
Diary Industries,Chairman of Mawbima Lanka Foundation,
Director of Bogawantalawa Tea Estates PLC, Director of Elpitiya
Plantations Ltd, Council member of Uva Wellassa University and
Council member of National Institute of Fisheries and Nautical
Engineering
He is also the Former Chairman of National Livestock
Development Board, former Chairman of State Engineering
Corporation and former Member of the council University of
Ruhuna.
Mr Wickramanayake has published the
HAMBANTOTA (Regarding Port of Hambantota)
book
WHY
Mr J Molligoda
Mr Jayampathy Molligoda is a Fellow Member of the Institute of
Chartered Accountants of Sri Lanka and he holds a FMIC Masters
of Business Administration from the Post graduate Institute of
Management, University of Sri Jayawardenapura. He has also
completed the “Executive Strategy Programme” at Victoria
University, Melbourne, Australia. He is a Fellow Member of the
Institute of Certified Management Accountants of Sri Lanka.
He counts over 28 years of experience in the fields human
resource development, financial management and strategic
planning. At present he is the Director/CEO of Bogawantalawa
Tea Estates PLC.
19
Statement of Directors Responsibility
The Directors are required by the Companies Act to prepare
financial statements for each financial year, which give a true
and fair view of the state of affairs of the Company and the
Group as at the end of the financial year and of the profit and
loss for that period.
Accordingly, the Directors have taken all reasonable steps to
ensure that proper books of accounts of the Company and its
subsidiaries and associates have been maintained and that the
financial statements have been prepared in compliance with
the Sri Lanka Accounting Standards.
In preparing the financial statements, suitable accounting
policies have been used and applied consistently, and
reasonable and prudent judgments and estimates have been
made. Relevant accounting standards have been followed.
BOGAWANTALAWA TEA ESTATES PLC
The Directors are responsible for maintaining adequate
accounting records, for safe guarding the assets of the Group
and for preventing and detecting fraud and other irregularities.
(Sgd)
D J Ambani
Chairman
26th August 2014
Bogawantalawa Tea Estates PLC.
Management team
Director / Chief Executive Officer - Mr. J.Molligoda
Agricultural Advisor - Mr. P.C.B.Dasanayaka
Manufacturing Consultant - Mr. S.K.Abeygoonewardena
Chief Operating Officer (BPL Teas) - Mr. V.S.B.Liyanage
Senior Vice President Marketing (BPL Teas) - Mr. J.M.Ratwatte
Financial Controller - Mrs. C.Wahalathantri
General Manager - Low Country -Mr. A.S. Gunawardena
Senior Manager QA/QC - Mr. V.A.S.Panditharathne
Senior Manager Personnel/Administration - Mr. U.S.Waidyatilleke
Manager Business Development - Mr. H.M.C.Gamagedara Chief Internal Auditor - Mr. S.R.Rajapakse
National Sales Manager (LMD) - Mr. G.C.Weerasinghe
General Manager Operations (BPL Teas) - Mr W.M.S.C Welegama
Engineering Consultant - Mr. P.Kanagasabapathy
Estate level
Regional General Manager Hatton/Dickoya
Mr. U.K.Navaratne
Regional General Manager Bogawantalawa
Mr. M.F.Majeed
Senior Manager Loinorn Estate
Mr. R.M.Samarakoon
Senior Manager Lethenty Estate
Mr. N.P.Sirithunga
Senior Manager Campion Estate
Mr. M.A.Fernando
Manager Kotiyagalla Estate
Mr. S.A.I.B.Peiris
Manager Wanarajah Estate
Mr. K.G.Samarathunga
Manager Bogawantalawa Estate
Mr. K.S.Weerasuriya
Manager Fetteresso Estate
Mr. W.N.D.De Alwis
Manager Poyston Estate
Mr. M.Y.B.Markar
Manager Osborne Estate
Mr. E.U.D.B.G.D.Ehelepola
Plantation Manager Forestry and Environment
Mr. Y.M.T.K.Bandara
Manager Low Country
Mr H E Wijayasundara
Manager Anhettigama Estate
Mr M Premarathne
Assistant Manager Illuktenne Tea Factory
Mr. I.G.C.P.Rathnasiri
20
Corporate Governance
The Directors confirm that the Company has already
Audit Committee
implemented action to comply with the Rules on Corporate
The Audit Committee, of the Parent Company, Metropolitan
Governance contained in the listing rules of the Colombo
Resource Holdings PLC ( MRH PLC), acts as the Audit Committee
Stock Exchange. The Board of Directors of Bogawantalawa
of BTE PLC.
Tea Estates PLC believes that good Corporate Governance is
essential to create value for all stakeholders and are committed
The members of the Audit Committee (AC) are as follows
to upholding very high standards of transparency and utmost
Mr G V M Nanayakkara - Chairman AC ( Independent non
integrity in the governance of the Company.
executive Director - MRH PLC )
Mr S A S Jayasundara - Member AC ( Independent non executive
The Board of Directors
Director - MRH PLC )
The Directors of the Board are responsible for the formation
Mr A A D S Saparamadu - Member AC
of overall business strategies, policies and setting standards
and ensuring the implementation of them, setting goals and
The Audit Committee, is responsible, for reviewing policies and
targets in short, medium and long term basis. The Directors
procedures of Internal Control, Risk Review and Control reports,
review progress quarterly and during the year under review
planning and audit completion reports from the Company’s
they met on four occasions.
external auditors and ensuring that the Company has an
embedded process of identifying risks, both financial and
operational. The Committee ensures that risks, so identified, are
Attendance at these meetings was:
managed via a well-defined action plan.
Mr. D J Ambani 4/4
Mr. L J Ambani
3/4
The Committee is also responsible for the consideration
Mr. C M O Haglind 4/4
and appointment of external auditors, the maintenance of a
Mr. D A D S Wickramanayake 1/4
professional relationship with them, reviewing accounting
Mr J Molligoda
1/1
principles, policies and practices adopted in the preparation
Mr. S A S Jayasundara 2/4
of public financial information and examining all documents
representing the final financial statements.
The Board reviews and approves the Annual Budget, actual
performance against the budget, grants approval for capital
The Financial Controller, Chief Internal Auditor and relevant
expenditure and any other project proposals. Separate sub
operational divisional heads attend the meeting by invitation.
committees are set up by the Board for Investment decisions
The decisions of the Audit Committee are reported to the
and special projects. The recommendation from these sub
Directors at the Board Meetings.
committees are forwarded to the Board for the final approval
at a Board meeting.
The report from the Chairman of the Audit Committee is on
page no 23
Management Meeting
Management meetings are held every quarter whereby all
Remuneration Committee
Directors, the senior management including all divisional
The Remuneration Committee, of the Parent Company,
heads review the progress for the most recent quarter and the
Metropolitan Resource Holdings PLC, acts as the Remuneration
performance against budget and last year. Further the next
Committee of BTE PLC.
quarters forecast and the forecast for the year are discussed
and agreed upon at each meeting. Estate wise details are
The members of the Remuneration Committee (RC) are as
analysed and recommendations are made to the Board. All
follows
capital expenditure, other project proposals, budgets are
initially reviewed at this meeting and referred to the Board
Mr J H Hertzburg - Chairman RC ( Independent non executive
at the Board Meeting for formal approval and/or ratification
Director - MRH PLC )
wherever necessary. In addition there is also a Management
Mr G V M Nanayakkara - Member RC ( Independent non
Committee consisting the Chairman / 2 Directors and the Senior
executive Director - MRH PLC )
Management Team which meets every week / fortnightly and to
review progress, approval for payments and recommendations
to the Board for any Board papers.
21
The Remuneration Committee is responsible for the
Relations with the Community
recommendation of the remuneration payable to the
The Board is conscious of the principles of good citizenship and
Chairman, Executive Directors and Chief Executive Officer and
the operational dimensions of the BTE PLC’s social programmes.
sets guidelines for the remuneration of the Senior Management
The Human Resources division of the Company is set up at
within the Company, to the Board of BTE PLC. The Board
Head Office in Colombo with regional coordinating officers.
makes the final determination upon consideration of such
recommendations. The remuneration recommendations are
based on the present market rates.
The gross amount amount paid as directors emoluments for
the year is disclosed under notes to the financial statements note no 8 Page 54.
Internal Control
Board has endeavored to ensure that control systems,
designed to safeguard the Company’s assets and maintain
proper accounting records that facilitate the production
and availability of reliable information, are in place and are
functioning as planned.
An internal audit and monitoring division is set up to monitor
whether all internal control systems, processes and procedures
are followed Any issues relating to controls, productivity,
efficiency, effectiveness are discussed at the monthly review
meetings with respective operational managers. All operational
and financial functions and approval levels are clearly defined
and controlled by the officers with proper segregation of duties.
All purchases for major inputs, capital expenditure, disposals
are handled by a committee at Center Office and recommend
to the Chief Executive Officer. Payments to major suppliers
of estates are made from Head Office. All sales proceeds are
collected at Head Office and the required funds are released
for remuneration and local purchases to operational units.
Actual utilization of funds released are monitored by obtaining
certified statements from respective operational managers.
Compliance with Legal Requirements
The Board is conscious of its responsibility to the Shareholders,
the Government and the Society in which it operates and is
unequivocally committed to upholding ethical behavior in
conducting its business. The Board, through the Company’s
Administrative and Finance Divisions, strives to ensure that
the businesses of the Company and its subsidiary comply with
the laws and regulations of the country. The Board of Directors
ensure that all financial statements are prepared in accordance
with the Sri Lanka Accounting Standards and conform to the
requirements of the Colombo Stock Exchange.
22
Subject
Compliance Table (Colombo Stock Exchange - Listing Rules)
Compliance Details
Status
Disclosures regarding the Board of Directors
Three of the six Directors are Non-Executive Directors
Compliant
Please refer page no 26.
Two of the three non-executive directors are Independent
Directors
Compliant
Mr. D A de S Wickramanayake and Mr. S A S
Jayasundara are the Independent Directors of the
Company. Mr. S A S Jayasundera is also a Director
of Metropolitan Resource Holdings PLC (MRH).
However, after taking into consideration the fact
that he is not actively involved in the Management
of MRH and since he does not hold a significant
shareholding in the Company, the Board is of the
view that his independence is not compromised.
Accordingly, the Board has determined that Mr. D
A de S Wickramanayake and Mr. S A S Jayasundara
are independent Directors as per the criteria set out
in the Listing Rules of the Colombo Stock Exchange
Non-Executive Directors have submitted the declaration of
independence /non-independence
Compliant
Names of independent Directors included in the Annual
Report
Compliant
A brief resume of each Director included in the Annual
Report
Compliant
Disclosures regarding remuneration and Remuneration Committee
Specify whether a separate Remuneration Committee was
formed or listed parent’s remuneration committee used
Compliant
The Remuneration Committee of the parent
Company serves as the Remuneration Committee
of the Company.
The names of the members and the composition of the
Remunerations committee included in the annual report
Compliant
The functions and the remuneration policy of the
Remuneration Committee included in the annual report
Compliant
The aggregate remuneration paid to Executive & NonExecutive Directors specified in the annual report
Compliant
Specify whether a separate Audit Committee was formed
or listed parent’s audit committee used
Compliant
The Audit Committee of the parent Company
serves as the Audit Committee of the Company.
The names of the members and the composition of the
Audit committee included in the annual report
Compliant
Chief Executive Officer and the Chief Financial officer
attend Audit Committee Meetings
Compliant
The Chairman of the Audit Committee and two members
are Members of a professional accounting body
Compliant
The Audit Committee shall make a determination of the
independence of the Auditors and disclose the basis for
such determination
Compliant
Please refer Audit Committee Report on page 23.
c) The Annual Report shall Contain a Report of the Audit
Committee setting out the manner of Compliance of the
Functions
Compliant
Please refer Audit Committee Report on page 23.
Contents under the Audit Committee Report
By order of the Board
Sgd
Director
26th August 2014
23
Report of the Audit Committee
The Audit Committee of the parent company, Metropolitan
Resource Holdings PLC acts as the Audit Committee of
Bogawantalawa Tea Estates PLC. The Audit Committee consists
of the following Non-Executive Directors.
² Mr G V M Nanayakkara-Chairman
² Mr A A D S Saparamadu
² Mr S A S Jayasundara
The audit committee’s role and duties include;
² the review of internal control systems,
² assist the board of directors in its oversight of the
preparation of the financial statements in conformity
with SLFRS, Companies Act No. 7 of 2007, rules and
regulations of CSE and SEC,
² Overview of the company’s processes for monitoring
compliance with laws & regulations and risk
assessments,
² make recommendations to the board on the
appointment of external auditors and recommend their
remuneration and terms of engagement.
The Audit Committee met four times during the year under
review. The Chief Financial Controller, Chief Internal Auditor,
sector senior management personnel and Chief Executive
Officer were invited and attended to deliberate proceedings.
The Audit Committee reviewed the management letter issued
by the external auditors at the audit committee meeting and
also considered and verified the independence of the external
auditors Messers BDO partners, Chartered Accountants are
independent. The Audit Committee reviewed the nature of
the non-audit function related to tax that external auditors
have undertaken to ensure that it did not compromise their
independence.
The audit committee is strongly supported by the internal
audit reports. The internal audits have been outsourced to
M/S B R De Silva & Company, Chartered Accountants and they
have carried out internal audits for the financial year covering
estates other administrative units and the BPL Teas Private
Ltd and specific scopes are given by the Chief Internal Auditor
based on the audit committee proposals and board directions.
Audit supervisory committee has been set up consisting
senior management team to scrutinize the audit reports and
deliberations are reported to the Audit Committee. Audit
Supervisory Committee had discussed report findings and
implemented the recommendations with the respective sector
managers and estate managers. These reports have been
reviewed by the audit committee along with the explanations
given by the estate management and members of the senior
management who participated at these audit committee
meetings. At the meetings, the Committee reviewed the
effectiveness of the internal control systems and the Group’s
approach to its exposure to the business and financial risks.
The committee studied the processes that are in place to
safeguard the assets of the company and its subsidiaries. The
committee also reviewed the internal audit reports pertaining
to the subsidiary company, BPL Teas (Pvt) Ltd.
The committee noted that a comprehensive set of Management
accounts and progress reports are produced on a monthly basis
highlighting all key performance indications and reviewed by
the Senior Management. The Directors review the performance
at the pre- Board meetings followed by the Board Meetings
held quarterly on a pre-determined dates agreed.
The committee reviewed the audited financial statements
including the annual report for the year 2013/14.The audit
committee has recommended to the Board of Directors that
Messers BDO partners, Chartered Accountants be continued as
the external auditors for the year ending 31st March 2015 as
well.
Sgd.
G V M Nanayakkara
Chairman - Audit Committee
26th August 2014
24
Risk Management
Risk Management Process & Approach
The process of risk management consist of identification,
analysis, assessment, prioritization, monitoring of risk and either
acceptance or mitigation of uncertainty in Business decisionmaking.
Our approach to risk management is to have built in internal
control systems to business processes, outcome of regular
discussions, review meetings and comprehensive reporting.
Responsibilities for the Risk
The Board of Directors of Bogawantlawa Tea estates PLC:
² bears overall responsibility to exercise prudent risk
management mechanisms.
Area of Risk
Our main concern
over
²
²
²
identifies principle risks faced by the company and
ensure implementation of appropriate system to
manage such risks.
designates key management personnel and defines
their areas of responsibility to manage risks
reviews risk management strategy periodically and
formulate mitigating actions considering internal and
external environmental changes.
Company Audit Committee review probable risk elements at its
meeting and report to the Board of Directors.
Impact to the Company
performance
Key Mitigating Actions
Climate and weather Production quantities
Changes
& quality fluctuate
according to the
seasons and weather
patterns
Change in the weather
Timely replanting of selected cultivars to
patterns affects production and minimize the effect on climatic conditions,
productivity and quality
good agricultural practices such as pruning,
fertilizing depending on seasons
Product Quality
Maintain consistent
product quality & be
amongst the premium
quality category
Buyers curtailing demand and
offer average price for low
quality products due to more
teas available in the market in
such category.
Quality assurance is considered as key in
this area and our processing plants are with
HACCP / ISO. Obtaining Rainforest alliance
certification is in progress. Quality Assurance
Systems are implemented throughout the
value chain and more emphasis given on
cultivation and processing.
Human Resource Industry wide highly
unionized large
workforce
Create globally
accepted healthy
employee satisfied
working environment
through obtaining SA
8000 industry standards
and Fair Trade
Certificates
As the industry is highly labour
intensive with high bargaining
power, low productivity, work
stoppages, strikes would
result in a major impact on the
profitability & liquidity of the
company.
Satisfied motivated workforce
with the implementation of SA
8000 & Fair Trade
The Collective Agreement entered into
with the Trade Unions in the Company’s
capacity as a member of the Employers
Federation ensures industrial peace and
wages are applied industry wide and not ad
hoc. Continuous training and development
programs are conducted to motivate and
develop the human resource to enhance
productivity and have better relationship
with workforce and staff.
Frequent assessment and monitoring
status and standards requested by the
international regulatory bodies
Fluctuation of global Maintain a stable Net
commodity prices
Sale Average (Realized
- Tea
Price per Kg)
Fluctuation of prices are very
sensitive to profitability &
liquidity
Low inflation
regime, high value
(strong) of local
currency
Gap between revenue and
cost may be narrowed due
to increased labour wages
possibly high liquidity issues
would surface.
The cyclical pattern of price is mitigated
by focusing on producing ‘quality teas’.
Availability of a range of high and low
grown teas and change in product quality
depending on market behavior minimize
loss in margin due to price fluctuations.
Value added tea marketing through our
subsidiary and concentration on local
market by introducing our own brand also
minimize the effect on such situations.
Maintain minimum gap in price level
compared to benchmarking estate selling
marks.
Tea export earnings in
term of local currency
may not be favorable to
the company/industry
25
Risk Management
Area of Risk
Our main concern
over
Impact to the Company
performance
Key Mitigating Actions
Operational
A sound internal
control system is a key
factor in safeguarding
tangible, intangible
assets and creation of
wealth
Natural disasters, accidents,
fraud, human errors, may lead
to financial losses
Periodical checks are carried out at estate
level to ensure the quality and cost
effectiveness of systems Regular reviews
are undertaken to ensure that appropriate
infrastructure and sufficient insurance covers
are available to safeguard the company’s
assets and minimize any financial loss.
Financial
Adequate return on
investments within
acceptable risk levels,
generation of funds for
capital development
projects securing
working capital
requirements
Effect on profitability and
liquidity and long term
sustainability
Prudent investments in capital
developments projects after proper
investment evaluation in replanting, factory
development etc. Adoption of diversification
strategies. Monitoring and reporting return
on investments quarterly to the Board of
Directors.
Interest Rate
Needs to minimize the
adverse effects of the
fluctuating interest
rates
Effect on profitability and cash
flows
Liquidity issues in
Short Term
Settlement of Labour
wages & supplier Bills
Company
Reputation &
Corporate Image
Compliance of
legal and statutory
requirements and best
corporate governance
Non compliance may lead to
loss of reputation, fines and
surcharges and even litigation
Reputation is considered as the Company’s
most important aspect. Therefore, the
Company obtains legal advice to include
mitigating clauses wherever possible in
the Agreements for new ventures and
investments. Due consideration is given
to health, safety and environmental issues
and the best practices are followed in these
areas.
Investments
As Investments are key
to the sustainability of
the business
Impact on future profitability,
liquidity and risk project failing
mid-way
Investments are first subject to a technical
& financial evaluation process and
prioritize depending on the cost benefit
and the availability of funding. Then Board
approval is sought prior to embarking on
the investment. Close monitoring of the
progress is made to ensure forecasted
investment proposals are achieved and
expectations are met.
Competition
Global competitors of
tea industry benefit
from lower costs etc.
Low demand for tea from
exporters will lead to low
prices.
To mitigate risk of competition company
focus on productivity, quality and local
market operation.
Information
Management
Systems Risk
To minimize risk
associated with
security, Hardware
communication and
software.
Non availability of information
for monitoring, Risk involve in
information leakage.
Maintaining spare servers to safeguard
critical data, software. Data backups stored
at off site locations, vendor agreements for
support service and maintenance, Update
virus scanners and firewalls etc. Compliance
with the statutory requirements
The Company manages and mitigates
interest rate risk by utilising low cost funding
from banking and financial services sector
to minimize high cost borrowing such
as overdraft. Also an appropriate mix of
floating and fixed rate interest debt capital is
employed. Financing through securitization
Any delays may effect to labour manage fluctuation of interest rates.
Pre-arranged short term financing facility at
unrest and continuous supply
lowest finance cost based on quarterly cash
of input materials
flow projections.
26
Directors’ Report
BOGAWANTALAWA TEA ESTATES PLC
ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY
The Directors of Bogawantalawa Tea Estates PLC have pleasure
in presenting their Annual Report together with the Audited
Financial Statements of the Company for the year ended 31st
March 2014.
This Annual Report of the Board on the affairs of the Company
contains the information required in terms of the Companies
Act No. 07 of 2007, the Listing Rules of the Colombo Stock
Exchange and is guided by recommended best practices.
General
Bogawantalawa Tea Estates PLC is a public limited liability
Company which was incorporated under the Companies
Act No.17 of 1982 as a public Company on 22nd June 1992.
Pursuant to the requirements of the new Companies Act No. 7
of 2007, the Company was re-registered on 8th April 2008 and
bears registration number PQ 124. Accordingly, the name of
the Company has changed to Bogawantalawa Tea Estates PLC.
Principal activities of the Company and review of
performance during the year
A review of the business of the Company and its performance
during the year with comments on financial results and future
strategies and prospects are contained in the Chairman’s
review (pages 03 to 04).
This report together with the Financial Statements reflect the
state of affairs of the Company.
Financial Statements
The Financial Statements of the Company are given on pages
30 to 33.
Revenue
Net Profit / (Loss) for the year
Carried forward Profit /(Loss)
Directors
The names of the Directors who held office as at the end of
the accounting period are given below and their brief profiles
appear on page 18.
Executive Directors
Mr. D J Ambani
Mr. L J Ambani
Mr. J Molligoda
-
-
-
Non - Executive Directors
Mr. C M O Haglind
-
*Mr. D A De S Wickramanayake -
*Mr. S A S Jayasundara
-
Chairman
Deputy Chairman
Director / CEO
Director
Director
Director
* Independent Non-Executive Director
The principal activity of the Company, which is cultivation and
processing of Tea and Rubber, remained unchanged.
Summarised Financial Results
Year ended 31st March 2014
Accounting Policies
The financial statements of the Company have been prepared
in accordance with the revised Sri Lanka Accounting Standards
and the policies adopted thereof are given on page 34 to 52.
Figures pertaining to the previous period have been re-stated
where necessary to conform to the presentation for the year
under review.
2014
Rs.’000
2013
Rs.’000
2,651,117
(41,039)
340,664
2,646,370
286,801
390,058
Independent Auditors’ Report
The Report of the Independent Auditors on the Financial
Statements of the Company is given on page 29.
Mr. S A S Jayasundara retires by rotation at the conclusion of
the Annual General Meeting in terms of Articles 89 and 90 of
the Articles of Association and being eligible is recommended
by the Directors for re-election.
Mr. J Molligoda who was appointed during the year shall
retire in terms of Article 96 of the Articles of Association of the
Company and being eligible is recommended by the Directors
for re-election.
Interests Register
The Company maintains an Interests Register in terms of the
Companies Act, No.7 of 2007, and the names of Directors who
were directly or indirectly interested in a contract or a related
party transaction with the Company during the accounting
period under review are given in Note 40 to the Financial
Statements on page 77 to 78.
Directors’ Remuneration
The Directors’ remuneration is disclosed under key management
personnel compensation in Note 12 to the Financial Statements
on page 54.
Directors’ Interests in Contracts
The Directors have no direct or indirect interest in any other
contract or proposed contract with the Company. Except for the
transactions referred to in Note 40. to the Financial Statements,
27
Directors’ Report
the Company did not carry out any transaction with any of the
Directors.
Directors’ responsibility for Financial Reporting
The Directors are responsible for the preparation of Financial
Statements of the Company to reflect a true and fair view
of the state of its affairs. The Directors are of the view that
these financial statements have been prepared in conformity
with requirements of the Sri Lanka Accounting Standards,
the Companies Act No.7 of 2007 and the Listing Rules of the
Colombo Stock Exchange.
Auditors
Messrs BDO Partners, Chartered Accountants served as the
Auditors during the year under review. Based on the written
representations made by the Auditors, they do not have
any interest in the Company other than that of Auditors and
provider of tax related services.
A total amount of Rs. 2,214,927/- is payable by the Company
to the Auditors for the year under review comprising
Rs. 1,913,525/- as audit fees and Rs. 211,402/- for non audit
services.
The Auditors have expressed their willingness to continue
in office. The Audit Committee at a meeting held on August
2014 recommended that they be re-appointed as Auditors.
A resolution to re-appoint the Auditors and to authorise the
Directors to determine their remuneration will be proposed at
the Annual General Meeting.
Stated Capital
The Stated Capital of the Company is Rs.586,250,010/-.
The number of shares issued by the Company stood at
58,400,000 fully paid ordinary shares and 01 Golden Share as at
31st March 2014 (which was the same as at 31st March 2013).
Directors’ Shareholding
The relevant interests of Directors in the shares of the Company
as at 31st March 2014 and 31st March 2013 are as follows.
Shareholding Shareholding
as at
as at
31/03/2014
31/03/2013
Mr. D J Ambani
63,750
63,750
Mr. L J Ambani
-
Mr. C M O Haglind
-
Mr. D A de S Wickramanayake
6,086,006
6,069,836
Mr. S J S Jayasunera
-
Mr. J Molligoda
16,388
N/A
Shareholders
There were 18,655 shareholders registered as at 31st March
2014 (18,637 shareholders as at 31st March 2013). The details of
distribution are given on page 16 to 17 of this Report.
Major Shareholders, Distribution Schedule and other
information
Information on the distribution of shareholding, analysis of
shareholders, market values per share, earnings, dividends, net
assets per share, twenty largest shareholders of the Company,
percentage of shares held by the public as per the Listing Rules
of the Colombo Stock Exchange are given on page 16 to 17
under Share Information.
Reserves
The movement of reserves during the year are given in under
the Statement of Changes in Equity on page 32.
Land holdings
The book value of property, plant and equipment as at the
balance sheet date amounted to Rs. 601,393,296/- (2013 Rs. 599,103,610/-)
The extents, locations, valuations and the number of buildings
of the Company’s land holdings are given in Note 18.6.
The movement of fixed assets during the year is given in Note
18 to the financial statements.
Dividends
The Directors do not recommend a dividend.
Statutory Payments
The Directors confirm that to the best of their knowledge,
all taxes, duties and levies payable by the Company, all
contributions, levies and taxes payable on behalf of, and in
respect of 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
provided for.
Donations
The Company made donations amounting to Rs. 69,500/(2013 - Rs.78,970/-) during the year under review for charitable
purposes.
Events occurring after the Balance Sheet date
There are no material events as at the date of the Auditor’s
report which require adjustment to, or disclosure in the
Financial Statements.
28
Directors’ Report
Corporate Governance practices and principles with respect to
the management and operations of the Company is set out on
page 20 of this report. The Directors confirm that the Company
has complied with the Rules on Corporate Governance
contained in the Listing Rules of the Colombo Stock Exchange.
Going Concern
The financial statements are prepared on going concern
principles. After making adequate enquires from the
management, the Directors are satisfied that the Company
has adequate resources to continue its operations in the
foreseeable future.
The Audit Committee and Remuneration Committee of
Metropolitan Resource Holdings PLC, which is the holding
Company of Bogawantalawa Tea Estates PLC functions as the
Companies Audit Committee and Remuneration Committee.
The composition of the said Committees is as follows:
Annual General Meeting
The Annual General Meeting will be held at the Auditorium of
the Center for Banking Studies, Central Bank of Sri Lanka, No 58,
Sri Jayawardanapura Mawatha, Rajagiriya on 30th September
2014 at 10.00 a.m
Audit Committee
Mr. G V M Nanayakkara - Chairman
(Independent non-executive Director - MRH PLC)
Mr. S A S Jayasundara - Member
(Independent non-executive Director)
Mr. A A D S Saparamadu - Member
The Notice of the Annual General Meeting appears on page 02.
Remuneration Committee
Mr. J H Hertzburg - Chairman
Mr. G V M Nanayakkara - Member
Sgd
D J Ambani
Chairman
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. Prudent internal controls ensure
professionalism, integrity and commitment of the Board of
Directors, Management and employees.
The Corporate Governance Statement on page 20 explains the
measures adopted by the Company during the year.
The Company continued its Corporate Social Responsibility
Programme, details of which are set out on pages 10 to 15 of
this Report.
Environmental Protection
After making adequate enquiries from the management, the
Directors are satisfied that the Company operates in a manner
that minimizes the detrimental effects on the environment and
provides products and services that have a beneficial effect on
the customers and the communities within which the Company
operates.
Sgd
J Molligoda
Director / CEO
Sgd
P W Corporate Secretarial (Pvt) Ltd
Secretaries
26th August 2014
29
Independent Auditors Report
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF BOGAWANTALAWA TEA ESTATES
PLC
Report on the Financial Statements
We have audited the accompanying financial statements of
Bogawantalawa Tea Estates PLC, and the Consolidated Financial
Statements of the Company and its subsidiaries which comprise
the Statement of Financial Position as at 31st March, 2014, and the
Statement of Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flow for the year then ended, and a
summary of significant accounting policies and other explanatory
notes as set out on pages 30 to 88.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance with
Sri Lanka Accounting Standards. This responsibility includes:
designing, implementing and maintaining internal 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
statements based on our audit. We conducted our audit in
accordance with Sri Lanka Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material
misstatement.
Opinion - Company
In our opinion, so far as appears from our examination, the
Company maintained proper accounting records for the year
ended 31st March, 2014 and the financial statements give a true
and fair view of the financial position of the company as at 31st
March, 2014 and of its financial performance and cash flows for
the year then ended in accordance with Sri Lanka Accounting
Standards.
Opinion - Group
In our opinion, the consolidated financial statements give a true
and fair view of the financial position as at 31st March, 2014
and the financial performance and cash flows for the year then
ended in accordance with Sri Lanka Accounting Standards, of
the company and its subsidiaries dealt with thereby, so far as
concerns the shareholders of the company.
Report on Other Legal and Regulatory Requirements
These financial statements also comply with the requirements of
Section 151(2) and 153(2) to 153(7) of the Companies Act No.07
of 2007.
Sgd
CHARTERED ACCOUNTANTS
Colombo
26th August 2014
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.
We have obtained all the information and explanations which
to the best of our knowledge and belief were necessary for
the purposes of our audit. We therefore believe that our audit
provides a reasonable basis for our opinion.
30
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 31ST MARCH, 2014
Note
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
Revenue
7 3,862,480,689 3,769,086,748 2,651,117,896 2,646,370,878
Cost of Sales
8 (3,648,347,013) (3,288,391,544) (2,692,201,261) (2,383,228,231)
Gross Profit/ (Loss)
214,133,676
480,695,204
(41,083,365)
263,142,647
Gain on Fair Value of Consumable Biological Assets
Other Income
9
Administration Expenses
Distribution Expenses
Management Fee Expenses
10
Other Expenses
Net Finance Income/ (Expenses)
11
118,734,030
176,862,429
509,730,135
114,365,356
197,503,365
792,563,925
118,734,030
208,410,075
286,060,740
114,365,356
174,670,798
552,178,801
(327,589,679)
(79,130,231)
(27,979,950)
-
(98,974,192)
(533,674,052)
(225,218,646)
(70,176,407)
-
(11,920,621)
(102,937,686)
(410,253,360)
(230,257,164)
-
(24,228,544)
-
(70,540,065)
(325,025,773)
(152,812,508)
(11,668,621)
(74,360,857)
(238,841,986)
Profit/ (Loss) Before Taxation
12
(23,943,917)
382,310,565
(38,965,033)
313,336,815
Income Tax Expenses
13
(4,665,323)
(31,771,256)
(540,302)
(26,534,999)
Profit/ (Loss) For the Year
(28,609,240)
350,539,309
(39,505,335)
286,801,816
Attributable to:
Equity Holders of the Parent
Non-Controlling Interest
(28,609,240)
-
(28,609,240)
350,539,309
-
350,539,309
(39,505,335)
-
(39,505,335)
286,801,816
286,801,816
Earnings/(Loss) Per Share - Basic
14
(0.34)
4.19
(0.47)
3.42
Dividend Per Share
15
0.1
-
0.1
-
Acturial Gain/ (Loss) on Retirement Benefit Obligation
(1,533,975)
-
(1,533,975)
-
Tax on Other Comprehensive Income / (Expenses)
-
-
-
-
Other Comprehensive Income / (Expenses) For the Year, Net of Tax
Total Comprehensive Income / (Expenses) For the Year, Net of Tax
(1,533,975)
-
(1,533,975)
-
(30,143,215)
350,539,309
(41,039,310)
286,801,816
Attributable to :
Equity Holders of the Parent
(30,143,215)
-
(30,143,215)
350,539,309
-
350,539,309
(41,039,310)
-
(41,039,310)
286,801,816
286,801,816
Other Comprehensive Income / (Expenses)
Figures in brackets indicate deductions.
The Significant Accounting Policies and the Notes from pages 34 to 88 form an integral part of these financial statements.
Colombo
26th August 2014
31
Consolidated Statement of Financial Position
AS AT 31ST MARCH, 2014
Note
Group
2013/2014
Rs.
2012/2013
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
ASSETS
Non-Current Assets
Right to Use of Land
16
Immovable JEDB/ SLSPC Estate Assets on Finance Lease
(Other than Right to use of Land)
17
Tangible Assets Other than Bearer Biological Assets
18
Intangible Assets
19
Bearer Biological Assets
20
Consumable Biological Assets
21
Capital Work-in-Progress
22
Investments
23
Total Non-Current Assets
268,519,149
277,063,733
268,519,149
277,063,733
5,437,227
947,651,935
373,361
1,458,168,381
531,388,185
64,152,557
15,000,000
3,290,690,795
7,747,587
708,649,742
2,279,398
1,427,324,894
456,207,475
19,249,753
15,024,521
2,913,547,103
5,437,227
601,393,296
-
1,458,168,381
531,388,185
22,590,497
78,300,000
2,965,796,735
7,747,587
599,103,610
1,427,324,894
456,207,475
19,249,753
46,674,521
2,833,371,573
Current Assets
Inventories
24
Trade and Other Receivables
25
Amount Due From Related Parties
26
Cash and Cash Equivalents
27
Total Current Assets
Total Assets
582,490,910
515,934,093
52,343,066
38,969,252
1,189,737,321
4,480,428,116
607,109,912
494,852,260
7,902,628
55,119,816
1,164,984,616
4,078,531,719
391,540,877
238,492,215
3,110,207
30,151,196
663,294,495
3,629,091,230
393,845,774
260,808,479
22,281,556
48,053,522
724,989,331
3,558,360,904
EQUITY AND LIABILITIES
Equity
Stated Capital
28
Retained Earnings
Equity Attributable to Owners of the Parent
Total Equity
586,250,010
420,777,816
1,007,027,826
20
1,007,027,846
586,250,010
459,296,031
1,045,546,041
20
1,045,546,061
586,250,010
340,644,386
926,894,396
-
926,894,396
586,250,010
390,058,696
976,308,706
976,308,706
620,861,552
24,176,451
694,787,142
163,662,110
290,820,657
510,975,432
25,000,000
2,330,283,344
255,879,437
24,357,912
639,342,192
169,439,632
313,941,037
519,616,916
50,000,000
1,972,577,126
382,342,641
21,106,086
677,486,884
163,662,110
290,820,657
510,975,432
25,000,000
2,071,393,810
253,464,512
18,918,878
625,520,246
169,439,632
313,941,037
519,616,916
50,000,000
1,950,901,221
550,029,538
26,527,403
4,925,516
281,735,280
540,302
136,476,373
13,597,313
552,014,243
26,962,987
4,534,503
280,020,630
26,534,999
73,836,044
12,758,439
441,658,974
24,856,569
4,925,516
-
540,302
102,262,315
11,433,734
446,151,085
25,292,153
4,534,503
20,000,000
26,534,999
64,431,814
10,876,732
8,641,483
25,000,000
95,643,718
1,143,116,926
3,473,400,270
4,480,428,116
8,309,117
25,000,000
50,437,570
1,060,408,532
3,032,985,658
4,078,531,719
8,641,483
25,000,000
11,484,131
630,803,024
2,702,196,834
3,629,091,230
8,309,117
25,000,000
20,574
631,150,977
2,582,052,198
3,558,360,904
Non-Current Liabilities
Interest Bearing Borrowings
29
Liability to Make Lease Payments
30
Retirement Benefit Obligations
31
Grants and Subsidies
32
Deferred Income
33
Net Liability to Lessor of JEDB/ SLSPC Estates
34
Redeemable Debentures
35
Current Liabilities
Trade and Other Payables
36
Amounts Due to Related Parties
37
Dividend Payable
Short Term Borrowings
Income Tax Liability
Current Portion of Interest Bearing Borrowings
29
Current Portion of Liability to Make Lease Payments
30
Current Portion of Net Liability to
Lessor of JEDB/ SLSPC Estates
34
Redeemable Debentures - Current Maturity
35
Bank Overdrafts
27
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
Commitments and Contingencies
38 & 39
I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act No.07 of 2007.
Sgd
Mrs. Chamari Wahalathanthri
Financial Controller
The Board of Directors is responsible for the preparation of these financial statements.
Approved and signed for and on behalf of the Board of Directors of Bogawantalawa Tea Estates PLC.
Sgd
Mr. D. J. Ambani
Chairman
Colombo
26th August 2014
Sgd
Mr. L. J.Ambani
Deputy Chairman
32
Consolidated Statement of Changes in Equity
GROUP
Stated Non-Controlling
Capital
Interest
Rs.
Rs.
Retained
Earnings
Rs.
Total
Rs.
Balance As At 01st April, 2012
Net Profit for the Year
Other Comprehensive Income
586,250,010
-
-
20
-
-
108,756,722
350,539,309
-
695,006,752
350,539,309
-
Balance As At 31st March, 2013
Dividend Paid
Net Loss for the Year
586,250,010
-
-
-
586,250,010
20
-
-
-
20
459,296,031
(8,375,000)
(28,609,240)
(1,533,975)
420,777,816
1,045,546,061
(8,375,000)
(28,609,240)
(1,533,975)
1,007,027,846
Stated Non-Controlling
Capital
Interest
Rs.
Rs.
Retained
Earnings
Rs.
Total
Rs.
COMPANY
Net Profit for the Year
Other Comprehensive Income
586,250,010
-
-
-
-
-
103,256,880
286,801,816
-
689,506,890
286,801,816
-
Dividend Paid
Net Loss for the Year
586,250,010
-
-
-
586,250,010
-
-
-
-
-
390,058,696
(8,375,000)
(39,505,335)
(1,533,975)
340,644,386
976,308,706
(8,375,000)
(39,505,335)
(1,533,975)
926,894,396
Colombo
26th August 2014
33
Consolidated Cash Flow Statement
Cash Flows From Operating Activities
Net Profit/(Loss) Before Taxation
Adjustments for:
- Depreciation/Amortization
- Profit on Disposal of Property, Plant and Equipment
- Interest Income
- Lease Interest
- Interest Expense
- Lease Interest to JEDB/SLSPC
- Provision for Retirement Benefit Obligations
- Gratuity (Including Provision for Bolted Workers)
- Amortization of Grants and Subsidiaries
- Gain on Fair Value of Consumable Biological Assets
- Amortization of Net Income from Operating Rights Given to LRL
- Amortization of Net Income from Operating Rights Given to ASPIC
- Provision for Inventories
- Lease Creditors Written Back
- Gain on Investments in Shares
- Profit on Disposal of Investment in Quoted Shares
- Exchange Gain on Revaluation of Interest Bearing Borrowings
- Dividends Income
- Provision Made for Immature Plantation - Bearer Biological Assets
- Reversal of Impairment Provision Made in Respect of BPL Teas (Pvt) Ltd
Operating Income/ (Loss) Before Working Capital Changes
(Increase)/Decrease in Inventories
(Increase)/Decrease in Trade and Other Receivables
Increase/(Decrease) in Due From Related Parties
Increase/(Decrease) in Trade and Other Payables
Increase/(Decrease) in Due To Related Parties
Cash Generated from Operations
Group
2013/2014
Rs.
2012/2013
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
(23,943,917)
382,310,565
(38,965,033)
313,336,815
131,241,371
(5,332,160)
(3,203,084)
4,697,737
69,025,885
28,453,654
128,776,513
(21,876,835)
(1,496,760)
5,289,859
69,376,837
27,845,803
113,669,438
(5,332,160)
(2,968,689)
3,889,162
41,165,938
28,453,654
113,193,610
(21,876,835)
(1,226,372)
4,385,520
43,355,906
27,845,803
116,476,950
(8,839,140)
(118,734,030)
(9,381,311)
(416,336)
-
(46,474)
-
(2,203)
(206,794)
(7,350,398)
50,000,000
-
222,439,750
24,619,002
(21,081,834)
(44,440,438)
(15,493,780)
(435,584)
165,607,116
74,149,296
(9,031,127)
(114,365,356)
(9,381,311)
(416,336)
1,072,092
-
(3,121)
-
(8,534)
(1,356,358)
-
-
530,885,227
(129,382,890)
(73,267,288)
(1,898,170)
43,337,541
(13,165,541)
356,508,879
112,521,938
(8,839,140)
(118,734,030)
(9,381,311)
(416,336)
-
-
-
(2,203)
(7,350,398)
50,000,000
(31,650,000)
126,060,830
2,304,897
22,316,263
19,171,349
(18,001,187)
(435,584)
151,416,568
70,950,228
(9,031,127)
(114,365,356)
(9,381,311)
(416,336)
(3,121)
-
(76,362,497)
(62,379,632)
3,061,618
(30,660,020)
(733,415)
(97,222,640)
(98,730,969)
-
(9,706,996)
150,848,274
(48,502,550)
(61,902,932)
3,061,618
(26,534,999)
17,537,705
(71,201,709)
(97,483,545)
(6,884,404)
198,653,718
Cash Flows From Investment Activities
Investment in Bearer Biological Assets - Immature Plantations (Tea)
Harvesting of Timber Plantations
Additions to Biological Assets - Nursery
Acquisition of Property, Plant and Equipment and Capital Expenditure Incurred
Acquisition of Intangible Assets
Proceeds from Disposal of Property, Plant and Equipment
Proceeds from Disposal of Investment in Shares
Gain on Investment in Shares
Dividends Received
Interest Received
Net Cash Used in Investing Activities
(119,597,959)
51,787,033
(8,521,711)
(348,935,803)
-
5,450,044
26,724
-
7,350,398
3,203,084
(409,238,190)
(109,996,766)
36,389,425
-
(53,132,259)
(286,042)
27,536,849
178,778
3,121
1,356,358
1,496,760
(96,453,776)
(119,597,959)
51,787,033
(8,521,711)
(54,995,340)
-
5,450,044
26,724
-
7,350,398
2,968,689
(115,532,122)
(109,996,766)
36,389,425
(23,930,987)
27,536,850
178,778
3,121
1,356,358
1,226,372
(67,236,849)
Cash Flow From Financing Activities
Payments of Finance Lease Rentals
Payments Made to Lessor of JEDB/SLSPC Estates
Receipts From Interest Bearing Borrowings
Payments of Long Term Borrowings
Short Term Borrowings - (Net of Receipts)
Dividends Paid
Repayment Debentures
Net Cash From/ (Used In) Financing Activities
Net Increase/ (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Year
Cash and Cash Equivalents at the End of the Year (Note A)
(18,518,850)
(29,426,160)
565,915,949
(138,086,710)
1,714,650
(7,983,986)
(25,000,000)
348,614,893
(61,356,712)
4,682,246
(56,674,466)
(17,527,232)
(78,026,686)
114,989,777
(51,134,452)
14,852,630
-
(25,000,000)
(41,845,963)
12,548,535
(7,866,289)
4,682,246
(15,669,952)
(29,426,160)
250,300,873
(83,592,241)
(20,000,000)
(7,983,986)
(25,000,000)
68,628,534
(29,365,883)
48,032,948
18,667,065
(15,116,627)
(78,026,685)
114,989,778
(40,817,468)
(20,000,000)
(25,000,000)
(63,971,002)
67,445,867
(19,412,919)
48,032,948
38,969,252
(95,643,718)
(56,674,466)
55,119,816
(50,437,570)
4,682,246
30,151,196
(11,484,131)
18,667,065
48,053,522
(20,574)
48,032,948
Interest Paid
Gratuity Paid
Grants Received
Taxes Paid
Net Cash Generated from Operating Activities
(A) Cash and Cash Equivalents at the End of the Year
Cash and Bank Balances
Bank Overdrafts
Colombo
26th August 2014
(1,356,358)
415,411,066
(74,132,675)
24,330,013
11,276,904
9,303,609
(11,965,541)
374,223,376
34
Significant Accounting Policies
1
1.1
CORPORATE INFORMATION
Domicile and Legal Form
Bogawantalawa Tea Estates PLC (BTE PLC) formerly
known as Bogawantalawa Plantations Limited (BPL), is a
public limited liability Company, listed in the Colombo
Stock Exchange, incorporated and domiciled in Sri
Lanka, under the Companies Act No.17 of 1982 later got
replaced with the Companies Act No.07 of 2007, in terms
of the provisions of the Conversion of Corporations and
Government Owned Businesses Undertakings into Public
Companies Act No.23 of 1987. The registered office of the
Company is located at No.153, Nawala Road, Narahenpita,
Colombo 05, and Plantations are situated in the planting
regions of Bogawantalawa and Deraniyagala.
appropriate disclosures as required by the Listing Rules of
the Colombo Stock Exchange.
The Group and the Company did not adopt any
inappropriate accounting treatments which are not in
compliance with the requirements of the SLASs, and
regulations governing the preparation and presentation
of the Financial Statements.
2.2
Basis of Measurement
The Financial Statements of the Group and the Company
have been prepared on the historical cost basis except for
the following material items in the statement of financial
position.
1.2
Principle Business Activities and Nature of Operations
of the Company and its Subsidiaries
Company
During the year, the principle activities of the Company
were the cultivation, manufacture and sale of Tea, Rubber
and Forestry.
Items
Measurements Basis
Consumer
Biological
Assets
Stated at valuation
Right to Use of Stated at valuation
Land
Immovable
JEDB/SLSPC
Estate Assets
on Finance
Lease
Stated at valuation
Subsidiary - BPL Teas (Pvt) Ltd
During the year, the principal activity of BPL Teas (Pvt) Ltd
was exporting value-added tea.
1.3
Parent Company
The Company’s parent undertaking and controlling party
is Metropolitan Resource Holdings PLC, which hold 67.35
%, of the shares, and is incorporated in Sri Lanka.
Defined
Benefit
Obligations
Management Contract
The Company is managed by Metropolitan Resource
Holdings PLC. The Management agreement which came
into effect from 01st January, 1996 was initially for a period
of five years and with a provision to extend by a further
period by mutual consent of both parties.
Liability for defined
benefit obligations is
recognized as the present
value of the defined
benefit obligation plus
unrecognized actuarial
gains, less unrecognized
past service cost and
unrecognized actuarial
losses
1.4
Date of Authorization for Issue
The Financial Statements of Bogawantalawa Tea Estates
PLC, for the year ended 31st March, 2014 was authorized
for issue by the Directors on 26th August 2014.
2
2.1
BASIS OF PREPARATION
Statement of Compliance
The financial statements of the Company and the Group
have been prepared and presented in accordance with
Sri Lanka Accounting Standards, which comprise Sri
Lanka Financial Reporting Standards (SLFRSs), Sri Lanka
Accounting Standards (LKASs), Statement of Alternative
Treatment (SoAT), relevant interpretations of the Standing
Interpretations Committee (SIC) and International
Financial Reporting Interpretations Committee (IFRIC)
which are collectively referred to as SLASs and in
compliance with the requirements of the Companies Act
No.07 of 2007 and amendments thereto, and provide
Note No.
2.3
Use of Estimates and Judgements
The preparation of financial statements in conformity
with SLFRS requires management to make judgements,
estimates and assumptions that affect the application of
accounting policies and the reported amount of assets,
liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and assumptions are based on historical
experience and various other factors that are believed to
be reasonable under the circumstances, the results form
the basis of making the judgements about the carrying
amount of assets and liabilities that are not readily
apparent from other sources.
Estimates and assumptions are reviewed on an ongoing
basis. Revision to accounting estimates are recognized
in the period in which the estimate is revised and in any
future period affected.
35
Information about critical judgements in applying
accounting policies that have the most significant effect
on the amounts recognized in the financial statements are
included in note no 06 to the financial statements.
2.4
Comparative Information
Previous period figures and notes have been reclassified
wherever necessary to conform to the current year’s
presentation.
2.5
Materiality and Aggregation
Each material class of similar items is presented separately
in the financial statements. Items of a dissimilar nature
or function are presented separately unless they are
immaterial.
2.6
Offsetting
Assets and liabilities, and income and expenses, are not
offset unless required or permitted by SLFRSs / LKASs.
2.7
Going Concern
The management has made an assessment of its ability
to continue as a going concern and is satisfied that it has
the resources to continue in business for the foreseeable
future. Furthermore, management is not aware of any
material uncertainties that may cast significant doubt
upon the Company’s ability to continue as a going
concern. Therefore, the Financial Statements continue to
be prepared on the going concern basis.
2.8
Responsibility for Financial Statements
The Board of Directors is responsible for the preparation
and fair presentation of the Financial Statements of
the Group and the Company as per the provision of
the Companies Act No. 07 of 2007 and the Sri Lanka
Accounting Standards.
2.9
a)
- Amortized cost
- Fair value through profit or loss
- Fair value through other comprehensive income.
The standard is effective for accounting periods beginning
on or after 01st January, 2015.
b)
SLFRS 10 - Consolidated Financial Statements
SLFRS 10 replaces the portion of LKAS 27 - Consolidated
and Separate Financial Statements that addresses the
accounting for consolidated financial statements. It also
addresses the issues raised in SIC 12 - Consolidation
Special Purpose Entities. SLFRS 10 establishes a single
control model that applies to all entities including special
purpose entities. The changes introduced by SLFRS 10 will
require management to exercise significant judgement to
determine which entities are controlled and therefore, are
required to be consolidated by a parent, compared with
the requirements that were in LKAS 27. SLFRS 10 was issued
in 2012 and become effective for the financial periods
beginning on or after 01st January, 2014. Accordingly, the
financial statements for the year ending 31st March, 2015
will adopt the SLFRS 10. The company/group will quantify
the effect in due course.
c)
SLFRS 11 - Joint Arrangements
SLFRS 11 replaces LKAS 31 - Interest in Joint Ventures
and SIC - 13 Jointly-controlled Entities - Non-monetary
Contributions by Ventures. SLFRS 11 removes the option
to account for Jointly Controlled Entities (JCEs) using
proportionate consolidation. Instead, JCEs that meet the
definition of a joint venture must be accounted for using
the equity method. The company does not have any
joint venture arrangements presently recognized under
proportionate consolidation method. SLFRS 11 was issued
in 2012 and become effective for the financial periods
beginning on or after 01st January, 2014. Accordingly, the
financial statements for the year ending 31st March, 2015
will adopt the SLFRS 11. The company/group will quantify
the effect in due course.
d)
SLFRS 12 - Disclosure of Interests in Other Entities
SLFRS 12 includes all of the disclosures that were
previously in LKAS 27 related to consolidated financial
statements, as well as all of the disclosures that were
previously included in LKAS 31 and LKAS 28. These
disclosures relate to an entity’s interest in subsidiaries,
Effect of Accounting Standards Issued but not Effective
As At the Reporting Date
There are a number of new Accounting Standards,
amendments to standards, which have been issued but
not yet effective as at the reporting date have not been
applied in preparing these Financial Statements. The
Company and the Group will adopt the following new/
revised Accounting Standards which will be effective
from 01st January, 2014 and 2015. Accordingly, these
Accounting Standards have not been applied in preparing
these Financial Statements.
-
-
-
-
-
SLFRS 9 - Financial Instruments
SLFRS 10- Consolidated Financial Statements
SLFRS 11- Joint Arrangements
SLFRS 12- Disclosure of Interest in Other Entities
SLFRS 13- Fair Value Measurement
SLFRS 9 - Financial Instruments : Classification and
Measurement
SLFRS 9, as issued reflects the first phase of work on
replacement of LKAS 39 and applies to classification and
measurement of financial assets and liabilities as defined
in LKAS 39. The available-for-sale and held-to-maturity
categories of financial assets in LKAS 39 have been
eliminated. Under SLFRS 9, there are three categories of
financial assets:
36
joint arrangements, associates and structured entities.
The number of new disclosures is also required, but has no
impact on the group’s financial position or performance.
SLFRS 12 was issued in 2012 and become effective for the
financial periods beginning on or after 01st January, 2014.
Accordingly, the financial statements for the year ending
31st March, 2015 will adopt the SLFRS 12.
e)
3.
3.1
SLFRS 13 - Fair Value Measurement
SLFRS 13 establishes a single source of guidance under
SLFRS for all fair value measurements. SLFRS 13 does not
change when an entity is required to use fair value, but
rather provides guidance on how to measure fair value
under SLFRSs when fair value is required or permitted.
This standard is effective for annual periods beginning
on or after 01st January, 2014. Accordingly, the financial
statements for the year ending 31st March, 2015 will
adopt the SLFRS 13. The company/group will quantify the
effect in due course.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below are consistent
with those used in the previous year. Accounting policies
of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the
Group.
Basis of Consolidation
The Group’s Financial Statements comprise consolidation
of the Financial Statements of the Company, its Subsidiary
(BPL Teas (Pvt) Ltd) in terms of the Sri Lanka Accounting
Standard -LKAS 27 on ‘Consolidated and Separate
Financial Statements’.
3.1.1 Business Combinations and Goodwill
Acquisitions of subsidiaries are accounted for using the
acquisition method of accounting. The Group measures
goodwill at the acquisition date as the fair value of the
consideration transferred including the recognized
amount of any non-controlling interests in the acquiree,
less the net recognized amount (generally fair value) of
the identifiable assets acquired and liabilities assumed, all
measured as of the acquisition date.
When the fair value of the consideration transferred
including the recognized amount of any non-controlling
interests in the acquire is lower than the fair value of net
assets acquired, a gain is recognized immediately in the
statement of comprehensive income.
The Group elects on a transaction-by transaction basis
whether to measure non-controlling interests at fair value,
or at their proportionate share of the recognized amount
of the identifiable net assets, at the acquisition date.
Transaction costs, other than those associated with the
issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as
incurred.
When the Group acquires a business, it assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with the
contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value
at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the
acquirer will be recognized at fair value at the acquisition
date. Contingent consideration which is deemed to be an
asset or liability, which is a financial instrument and within
the scope of LKAS 39, is measured at fair value with changes
in fair value either in the statement of comprehensive
income or as a change to other comprehensive income. If
the contingent consideration is classified as equity, it will
not be remeasured. Subsequent settlement is accounted
for within equity. In instances where the contingent
consideration does not fall within the scope of LKAS 39,
it is measured in accordance with the appropriate SLFRS/
LKAS.
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. Goodwill is reviewed
for impairment, annually or more frequently if events or
changes in circumstances indicate that the carrying value
maybe impaired. For the purpose of impairment testing,
goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Group’s
cash generating units that are expected to benefit from
the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
3.1.2 Subsidiaries
Subsidiaries are all entities (including special purpose
entities) over which the Group has the power to govern the
financial and operating policies generally accompanying a
shareholding of more than one half of the voting rights.
The existence and effect of potential voting rights that
are currently exercisable or convertible are considered
when assessing whether the Group controls another
entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group
also assesses existence of control where it does not have
more than 50% of the voting power but is able to govern
the financial and operating policies by virtue of de-facto
control. De-facto control may arise in circumstances where
the size of the Group’s voting rights relative to the size
and dispersion of holdings of other shareholders give the
Group the power to govern the financial and operating
policies, etc. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the
37
estimate revised and in any future periods affected.
3.2
Investments in subsidiaries are accounted for at cost
less impairment. Cost is adjusted to reflect changes in
consideration arising from contingent consideration
amendments. Cost also includes directly attributable costs
of investment.
3.2.1 Functional and Presentation Currency
Items included in the financial statements of each of the
Group’s entities are measured using the currency of the
primary economic environment in which the entities
operate (‘the functional currency’). The consolidated
financial statements are presented in Sri Lankan Rupees,
which is the Company’s and the Group’s functional and
presentation currency.
3.1.3 Non-Controlling Interests
Non-controlling interests represent the portion of profit or
loss and net assets of Subsidiaries not owned, directly or
indirectly, by the Company.
Non-controlling interests are presented separately in
the consolidated statement of comprehensive income
and within equity in the consolidated statement of
financial position, but separate from Parent shareholders’
equity. Any losses applicable to the non-controlling
interests are allocated against the interests of the noncontrolling interests even if this results in a deficit balance.
Acquisitions of non-controlling interests are accounted
for using the Parent entity extension method, whereby
the difference between the consideration and the fair
value of the share of the net assets acquired is recognized
as equity. Therefore, no goodwill recognized as a result of
such transactions.
The Financial Statements of the Company’s Subsidiaries
are prepared for the same reporting year, using consistent
Accounting Policies.
The Financial Statements of all Subsidiaries in the Group
have a common financial year which ends on 31st March.
3.1.4 Loss of Control
Upon the loss of control, the Group de-recognizes the
assets and liabilities of the Subsidiary, any non-controlling
interests and the other components of equity related to
the Subsidiary. Any surplus or deficit arising on the loss
of control is recognized in profit or loss. If the Group
retains any interest in the previous Subsidiary, then such
interest is measured at fair value at the date that control
is lost. Subsequently it is accounted for as an Associate
or in accordance with the Group’s accounting policy for
financial instruments.
3.1.5 Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any
unrealized income and expenses arising from intragroup transactions, are eliminated in full in preparing
the Consolidated Financial Statements. Unrealized gains
arising from transactions with equity-accounted investees
are eliminated against the investment to the extent of
the Group’s interest in the investee. Unrealized losses are
eliminated in the same way as unrealized gains, but only
to the extent that there is no evidence of impairment.
Foreign Currencies
3.2.2 Transactions and Balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions or valuation where items are
re-measured.
Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the
Foreign exchange gains and losses that relate to
borrowings and cash and cash equivalents are presented
in the statement of comprehensive income within ‘Finance
income or cost’.
3.3
Property, Plant and Equipment
3.3.1 Measurement
Items of property, plant and equipment other than
bare land are stated at historical cost less accumulated
depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
The Company and the Group elected the exemption to
measure land and buildings recognized previously at
revalued amounts as deemed cost with effect from 01st
April, 2011 in accordance with provisions of SLFRS 1.
Accordingly, land and buildings are stated at deemed cost
less accumulated depreciation.
The cost of property, plant and equipment comprises
expenditure directly attributable to the acquisition of the
item. These costs include the cost of replacing part of the
property, plant and equipment and borrowing costs for
long term construction projects if the recognition criteria
are met. The cost of self-constructed assets includes the
cost of materials and direct labour, any other cost directly
attributable to bringing the asset to a working condition
for its intended use, and the costs of dismantling,
removal and restoration, and the obligation for which
an entity incurs either when the item is acquired or as a
consequence of having used the item during a particular
period.
38
Subsequent costs are included in the asset’s carrying
amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
Group and the cost of the item can be measured reliably.
The carrying amount of the replaced part is de-recognized.
All other repairs and maintenance are charged to the
statement of comprehensive income during the financial
period in which they are incurred
3.3.2 Depreciation
Depreciation of assets begins when it is available for
use and ceases at the earlier of the date that the asset is
classified as held for sale and the date that the asset is derecognized. Significant components of individual assets
are assessed and if a component has a useful life that is
different from the remainder of that asset, that component
is depreciated separately. Land is not depreciated.
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and
are recognized within ‘other income’ in the statement of
comprehensive income.
Identifiable interest costs on borrowings to finance
the construction of property, plant and equipment are
capitalized during the period of time that is required to
complete and prepare the asset for its intended use.
3.3.3 Amortization of Leasehold Right
The leasehold rights over assets taken over from JEDB /
SLSPC are being amortized in equal amounts over the
following years. (Lower of lease period and economic
useful life)
Depreciation on assets is calculated using the straight-line
method to allocate their cost to their residual values over
their estimated useful lives.
Assets held under finance leases are depreciated over the
shorter of the lease term and the useful lives of equivalent
owned assets unless it is reasonably certain that the Group
will have ownership by the end of the lease term. The
estimated useful lives for the current and comparative
periods are as follows:
Over 40 years
Water Projects and Sanitation
Over 20 years
Plant and Machinery
Over 13 1/3 years
Motor Vehicles
Over 05 years
Equipment
Over 08 years
Furniture and Fittings
Over 10 years
(Replanting and New Planting)
Tea
Over 33 1/3 years
Rubber
Over 20 years
Coconut
Over 08 years
Leasehold Assets
Plant and Machinery
Over 13 1/3 years
Motor Vehicles
Over 05 years
Equipment
Over 08 years
The useful life, residual values and depreciation method of
assets are reviewed, and adjusted if required, at the end of
each financial year.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Over 53 years
Buildings
Over 25 years
Plant and Machinery
Over 15 years
Water Supply Scheme
Over 20 years
Mature Plantation (Both Tea and
Rubber)
over 30 years
3.3.4 Permanent Land Development Costs
Permanent land development costs are those costs
incurred making major infrastructure development and
building new access roads on leasehold lands.
These costs have been capitalized and amortized over the
remaining lease period.
Permanent impairment to land development costs is
charged to the statement of comprehensive income in full
or reduced to the net carrying amounts of such assets in
the year of occurrence after ascertaining the loss.
Freehold Assets
Improvements to Bare Land
Bare Land
3.3.5 Repairs and Maintenance
Repairs and maintenance are charged to the statement of
comprehensive income during the period in which they are
incurred. The cost of major renovations is included in the
carrying amount of the asset when it is probable that future
economic benefits in excess of the originally assessed
standard of performance of the existing asset will flow to
the Company and the Group. This cost is depreciated over
the remaining useful life of the related asset.
3.4
Non-Current Assets Held for Sale and Discontinued
Operations
Non-current assets and disposal groups classified as held
for sale are measured at the lower of their carrying amount
and fair value less costs to sell. Non-current assets and
disposal groups are classified as held for sale only when
the sale is highly probable and the asset or disposal group
is available for immediate sale in its present condition. In
the consolidated statement of comprehensive income of
the reporting period, and of the comparable period of the
39
previous year, income and expenses from discontinued
operations are reported separately from income and
expenses from continuing operations. Property, plant and
equipment and intangible assets once classified as held
for sale are not depreciated or amortized.
The gain or loss arising on initial recognition of consumable
biological assets at fair value less cost to sell and from
a change in fair value less cost to sell of consumable
biological assets are included in the statement of
comprehensive income for the period in which it arises.
3.5
Biological Assets
The entity recognizes the biological assets when, and
only when, the entity controls the assets as a result of a
past event, it is probable that future economic benefits
associated with the assets will flow to the entity and the
fair value or cost of the assets can be measured reliably.
Consumable biological assets represent Eucalyptus
Grandis timber trees that the company grows and
manages in its plantations. The Eucalyptus Grandis timber
tree matures after 17 years and as per best harvesting
practices, the trees can be harvested when they are 20
years old.
Biological assets are classified in to mature biological assets
and immature biological assets. Mature biological assets
are those that have attained harvestable specifications or
are able to sustain regular harvests. Immature biological
assets are those that have not yet attained harvestable
specifications. Tea, rubber, other plantations and nurseries
are classified as biological assets.
Eucalyptus Grandis Trees at their initial stage (i.e upto five
years from the date of planting) are measured at cost and
depreciated over five years.
The fair value of timber trees are measured using DCF
method taking into consideration the current market
prices of timber, applied to expected timber content of
trees at the maturity by an independent professional
Valuation Surveyor M/S Ariyatillake & Co. (Pvt) Ltd.
The cost of land preparation, rehabilitation, new planting,
replanting, crop diversification, inter-planting and
fertilizing, etc., incurred between the time of planting
and harvesting (when the planted area attains maturity),
are classified as immature plantations. These immature
plantations are shown at direct costs plus attributable
overheads, including interest attributable to long-term
loans used for financing immature plantations. The
expenditure incurred on bearer biological assets (tea,
rubber fields) which comes into bearing during the year,
is transferred to mature plantations. Expenditure incurred
on consumable biological assets is recorded at cost at
initial recognition and thereafter at fair value at the end of
each reporting period.
3.5.3 Growing Crop Nurseries
Nursery cost includes the cost of direct materials,
direct labour and an appropriate proportion of directly
attributable overheads, less provision for overgrown
plants.
The main variables in the DCF model are:
Variable
Comments
Currency
Sri Lankan Rupees.
Timber
Content
Estimate based on physical verification of
girth, height and considering the growth
of each spice in different geographical
regions.
Biological assets are further classified as bearer biological
assets and consumable biological assets.
Economic Estimated based on the normal life span of
each spices by factoring the forestry plan
Useful
of the Company.
Life
3.5.1 Bearer Biological Assets
Bearer biological assets include tea and rubber trees that
are not intended to be sold or harvested, but are grown
for harvesting agricultural produce from such biological
assets. The bearer biological assets are measured at
cost less accumulated depreciation and accumulated
impairment losses, if any, in terms of LKAS 16 - Property,
Plant and Equipment as per the ruling issued by ICASL.
3.5.2 Consumable Biological Assets
Consumable biological assets include managed timber
trees that are to be sold as biological assets. The managed
timber trees are measured on initial recognition and at the
end of each reporting period at its fair value less cost to sell
in terms of LKAS 41. The cost is treated as approximation
to fair value of young plants as the impact on biological
transformation of such plants to price during this period is
immaterial.
Selling
Price
Estimated based on price quotation
extracted from timber corporation net
of all the direct expenses, incurred in
bringing the trees into saleable condition.
(Stumpage value).
Discount
Rate
Discount rate reflects the possible
variations in the Cash flows and the risk
related to the biological assets.
Grandis Trees are measured at the directors’ assessment
of their fair value at each reporting date, after
considering and making necessary adjustments to the
independent valuers’ report to reflect the requirements
of the International Accounting Standard with respect
to valuation. In the absence of market based valuation
40
accumulated amortization. Amortization is calculated
using the straight-line method to allocate the cost of
licenses over their estimated useful lives which is between
10 years.
measures the fair value of biological assets have been
determined using the net present value of the expected
future cash flows (discounted at a risk adjusted rate).
All other assumptions and sensitivity analysis are given in
note 21 to the financial statements.
3.5.4 Infilling Cost on Bearer Biological Assets
Where infilling results in an increase in the economic
life of the relevant field beyond its previously assessed
standard of performance, the costs are capitalized and
depreciated over the useful life at rates applicable to
mature plantations. Infilling costs that are not capitalized
have been charged to the statement of comprehensive
income in the year in which they are incurred.
3.6
3.7
Borrowing Costs
Borrowing costs that are directly attributable to
acquisition, construction or production of a qualifying
asset, which takes a substantial period of time to get ready
for its intended use or sale are capitalized as a part of the
asset.
Costs associated with maintaining computer software
programmes are recognized as an expense as incurred.
Costs that are directly associated with the production
of identifiable and unique software products controlled
by the Group, and that will probably generate economic
benefits exceeding costs beyond one year, are recognized
as intangible assets. These directly attributable costs
include the software development employee costs and an
appropriate portion of relevant overheads.
Borrowing costs that are not capitalized are recognized
as expenses in the period in which they are incurred and
charged to the statement of comprehensive income.
Computer software development costs recognized as
assets are amortized over their estimated useful lives,
which do not exceed 02 years.
The amounts of the borrowing costs which are eligible for
capitalization are determined in accordance with LKAS 23
- “Borrowing Costs”.
Costs relating to development of software are carried in
capital work-in-progress until the software is available for
use.
Other development expenditures that do not meet the
above criteria are recognized as an expense as incurred.
Development costs previously recognized as an expense
are not recognized as an asset in a subsequent period.
3.8
Capital Work-in-Progress
The cost of capital work-in-progress is the cost of purchase
or construction together with any related expenses
thereon.
Intangible Assets
3.7.1 Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date
of acquisition. Goodwill on acquisitions of subsidiaries is
included under intangible assets. Goodwill acquired in a
business combination is tested annually for impairment
or more frequently if events or changes in circumstances
indicate that it might be impaired and carried at less than
costs less accumulated impairment losses. Impairment
losses on goodwill are not reversed.
3.7.3 Computer Software
Acquired computer software licenses are capitalized on
the basis of the costs incurred to acquire and bring to use
the specific software. These costs are amortized over their
estimated useful life of 02 years.
Goodwill is allocated to cash-generating units (‘CGU’) for
the purpose of impairment testing. Each CGU or a group
of CGUs represents the lowest level within the Group at
which goodwill is monitored for internal management
purposes and which are expected to benefit from the
synergies of the combination.
3.7.2 Licenses
Separately acquired licenses are shown at historical
cost. Licenses acquired in a business combination are
recognized at fair value at the acquisition date. Licenses
have a finite useful life and are carried at cost less
Expenditure incurred on capital work-in-progress for
permanent nature or for the purpose of increasing the
earning capacity of the business has been treated as
capital expenditure.
Capital work-in-progress is transferred to the respective
asset accounts at the time of first utilization or at the time
the asset is commissioned.
3.9
Investments
In the Company’s separate financial statement,
investments in subsidiaries and associates are stated
at cost less accumulated impairment losses. Where an
indication of impairment exists, the carrying amount of
the investment is assessed and written down immediately
to its recoverable amount.
41
3.10 Impairment of Non-Financial Assets
The carrying amounts of the Group’s non-financial
assets, other than deferred tax assets are reviewed at
each reporting date to determine whether there is any
indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash generating
unit is the greater of its value in use and its fair value less
costs to sell.
In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to the
asset. For the purpose of impairment testing, assets that
cannot be tested individually are grouped together into
the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the “cash
generating unit, or CGU”).
An impairment loss is recognized if the carrying amount
of an asset or its CGU exceeds its estimated recoverable
amount. Impairment losses are recognized in statement of
In respect of other assets, impairment losses recognized in
prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists.
An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had
been recognized.
3.11 Financial Assets
3.11.1Classification
The Company and the Group classify its financial assets
in the following categories: at fair value through profit
or loss (‘FvTPL’), loans and receivables, available-for-sale
(‘AFS’) and held-to-maturity (‘HTM’). The classification
depends on the purpose for which the financial assets
were acquired. Management determines the classification
of its financial assets at initial recognition.
i.
Financial Assets at Fair Value Through Profit or
Loss
Financial assets at fair value through profit or loss
are financial assets held for trading. A financial asset
is classified in this category if acquired principally for
the purpose of selling in the short term. Derivatives
are also categorized as held for trading unless they
are designated as hedges. Assets in this category are
classified as current assets if expected to be settled
within 12 months; otherwise, they are classified as
non-current.
ii. Loans and Receivables
Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are
not quoted in an active market. They are included
in current assets, except for maturities greater than
twelve (12) months after the end of the reporting
period. These are classified as non-current assets.
iii. Available-For-Sale Financial Assets
AFS financial assets are non-derivatives that are
either designated in this category or not classified
in any of the other categories. They are included in
non-current assets unless the investment matures or
management intends to dispose of it within twelve
(12) months from the end of the reporting period.
iv. Held-To-Maturity Financial Assets
HTM financial assets are non-derivative financial
assets with fixed or determinable payments and
fixed maturities that the Company’s and the Group’s
management have the positive intention and ability
to hold to maturity. If the Company and the Group
were to sell other than an insignificant amount of
HTM financial assets, the whole category would
be reclassified as AFS. HTM financial assets are
included in non-current assets, except for those with
maturities less than twelve (12) months from the end
of the reporting period, which are classified as current
assets.
3.11.2Recognition and Initial Measurement
Regular purchases and sales of financial assets are
recognized on the trade-date, the date on which the
Company and the Group commit to purchase or sell the
asset.
Financial assets are initially recognized at fair value plus
transaction costs for all financial assets not carried at FvTPL.
Financial assets carried at FvTPL are initially recognized
at fair value and transaction costs are expensed in the
3.11.3Subsequent Measurement - Gains and Losses
AFS financial assets and financial assets at FvTPL are
subsequently carried at fair value. Loans and receivables
and HTM financial assets are subsequently carried at
amortized cost using the effective interest method.
Changes in the fair values of financial assets at FvTPL,
including the effects of currency translation are recognized
in the statement of comprehensive income in the period
in which the changes arise.
42
3.11.4Determination of Fair Value
Fair value is the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction on the
measurement date.
Fair Value Measurement Hierarchy
Level 1
The fair value for financial instruments traded in active
markets at the reporting date is based on their quoted
market price or dealer price quotations (bid price for long
positions and ask price for short positions), without any
deduction for transaction costs.
Level 2
For all other financial instruments not traded in an active
market, the fair value is determined by using appropriate
valuation techniques. Valuation techniques include the
discounted cash flow method, comparison with similar
instruments for which market observable prices exist,
options pricing models, credit models and other relevant
valuation models.
Level 3
Certain financial instruments are recorded at fair value
using valuation techniques in which current market
transactions or observable market data are not available.
Their fair value is determined using a valuation model that
has been tested against prices or inputs to actual market
transactions and using the best estimate of the most
appropriate model assumptions.
For loans and receivables category, the amount of the
loss is measured as the difference between the asset’s
carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have
not been incurred) discounted at the financial asset’s
original effective interest rate. The carrying amount of the
asset is reduced and the amount of the loss is recognized
in the statement of comprehensive income. If a loan or
held-to maturity investment has a variable interest rate,
the discount rate for measuring any impairment loss
is the current effective interest rate determined under
the contract. As a practical expedient, the Company and
the Group may measure impairment on the basis of an
instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognized,
the reversal of the previously recognized impairment loss
is recognized in the statement of comprehensive income.
ii.
Assets Classified as AFS
The Company and the Group assess at the end of each
reporting period whether there is objective evidence that
a financial asset or a group of financial assets is impaired.
For debt securities, the Company and the Group use
criteria and measurement of impairment loss applicable for
‘assets carried at amortized cost’ above. If, in a subsequent
period, the fair value of a debt instrument classified as
AFS increases and the increase can be objectively related
to an event occurring after the impairment loss was
recognized in the statement of comprehensive income,
the impairment loss is reversed through the statement of
In the case of equity securities classified as AFS, in addition
to the criteria for ‘assets carried at amortized cost’ above,
a significant or prolonged decline in the fair value of the
security below its cost is also considered as an indicator
that the assets are impaired. If any such evidence exists
for AFS financial assets, the cumulative loss that had been
recognized directly in equity is removed from equity and
recognized in the statement of comprehensive income.
The amount of cumulative loss that is reclassified to the
statement of comprehensive income is the difference
between the acquisition cost and the current fair value,
less any impairment loss on that financial asset previously
recognized in the statement of comprehensive income.
Impairment losses recognized in the statement of
comprehensive income on equity instruments classified
as AFS are not reversed through the statement of
3.11.5Subsequent Measurement - Impairment of Financial
Assets
i.
Assets Carried at Amortized Cost
The Company and the Group assess at the end of each
reporting period whether there is objective evidence that
a financial asset or group of financial assets is impaired. A
financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective
evidence of impairment as a result of one or more events
that occurred after the initial recognition of the asset (a
‘loss event’) and that loss event (or events) has an impact
on the estimated future cash flows of the financial asset or
group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the
debtors or a group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or
principal payments, the probability that they will enter
bankruptcy or other financial reorganization, and where
observable data indicate that there is a measurable decrease
in the estimated future cash flows, such as changes in
arrears or economic conditions that correlate with defaults.
3.11.6De-recognition
Financial assets are de-recognized when the rights to receive
cash flows from the investments have expired or have
43
been transferred and the Company and the Group have
transferred substantially all risks and rewards of ownership.
due according to the original terms of receivable. Bad
debts are written-off when identified.
3.11.7Offsetting Financial Instruments
Financial assets and liabilities are offset and the net
amount presented in the statement of financial position
when there is a legally enforceable right to offset the
recognized amounts and there is an intention to settle
on a net basis, or realize the asset and settle the liability
simultaneously.
3.14 Cash and Cash Equivalents
For the purpose of the statements of cash flows, cash and
cash equivalents includes cash in hand, deposits held at
call with banks, other short-term highly liquid investments
with original maturities of three months or less and bank
overdrafts. Bank overdrafts are shown within borrowings
in current liabilities in the statement of financial position.
3.12 Inventories
Inventories are valued at the lower of cost and net
realizable value, after making due allowances for obsolete
and slow moving items. The cost of inventories includes
expenditure incurred in acquiring the inventories,
production or conversion costs and other costs incurred
in bringing them to their existing location and condition.
Manufactured inventories cost includes an appropriate
share of production overheads based on normal operating
capacity. Net realizable value is the price at which
inventories can be sold in the ordinary course of business
less the estimated cost of completion and estimated cost
necessary to make the sale.
3.15 Stated Capital
Inventory
Element
Valuation Method
Input
Material
At average cost
Growing
CropNurseries
At the cost of direct materials, direct
labour and an appropriate proportion
of directly attributable overheads.
Agricultural
Produce
harvested
from
Biological
Assets
Agricultural produce harvested from
Biological Assets are measured at
their fair value less cost to sell at the
point of harvest. The finished and semi
finished inventories from agricultural
produce are valued by adding the
cost of conversion to the fair value of
agricultural produce.
Spares and
At average cost
Consumables
3.13 Trade and Other Receivables
Trade receivables are amounts due from customers for
merchandise 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.
Trade and other receivables are stated at the amounts
they are estimated to realize, net of provisions for bad
and doubtful receivables. A provision for doubtful debts
is made where as there is objective evidence that the
Company or Group will not be able to recover all amounts
3.15.1Classification
Ordinary shares with discretionary dividends are
classified as equity. Other shares are classified as equity
or liability according to the economic substance of the
particular instrument. Distribution to holders of a financial
instrument classified as an equity instrument is charged
directly to equity.
3.15.2Share Issue Expenses
Incremental costs directly attributable to the issuance of
new shares or options are shown in equity as a deduction,
net of tax from the proceeds.
3.15.3Dividend to Shareholders of the Company
Dividend distribution to the Company’s shareholders is
recognized as a liability in the Company’s and the Group’s
financial statements in the period in which the dividends
are approved by the Company’s shareholders.
3.16 Financial Liabilities
3.16.1Initial Recognition and Measurement
Financial liabilities within the scope of LKAS 39 are classified
as financial liabilities at fair value through profit or loss,
loans and borrowings, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
The Group and Company determines the classification of
its financial liabilities at initial recognition. All financial
liabilities are recognized initially at fair value and, in the
case of loans and borrowings, carried at amortized cost.
This includes directly attributable transaction costs.
The Group’s financial liabilities include trade and other
payables, bank overdrafts, loans and borrowings.
3.16.2Subsequent Measurement
The subsequent measurement of financial liabilities
depends on their classification as described below:
a)
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 as at fair
44
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. Gains or losses on
liabilities held for trading are recognized in the statement
of comprehensive income.
The Group and Company have not designated any
financial liabilities upon initial recognition as at fair value
through profit or loss.
b)
Loans and Borrowings
After initial recognition, interest bearing loans and
borrowings are subsequently measured at amortized cost
using the effective interest rate method. Gains or losses
are recognized in the statement of comprehensive income
when the liabilities are de-recognized as well as through the
effective interest rate method (EIR) amortization process.
Other financial liabilities comprise interest bearing loans
and borrowings, trade payables, other payables, income
tax payables and amounts due to related parties.
3.16.3De-recognition
A financial liability is de-recognized when the obligation
under the liability is discharged or cancelled or expires.
Preference shares, which are mandatorily redeemable on
a specific date, are classified as liabilities. The dividends on
these preference shares are recognized in the statement
of comprehensive income as finance cost.
Borrowings are classified as current liabilities unless the
Company and the Group have an unconditional right
to defer settlement of the liability for atleast twelve (12)
months after the date of statement of financial position.
Identifiable interest costs on borrowing to finance the
construction of property, plant and equipment are
capitalized during the period of time that is required to
complete and prepare the asset for its intended use.
3.17 Employee Benefits
3.17.1Defined Benefit Plan - Gratuity
Defined benefit plan defines an amount of benefit that an
employee will receive on retirement, usually dependent
on one or more factors such as years of service and
compensation. The defined benefit plan comprises the
gratuity provided under the payment of gratuity Act, No
12 of 1983.
The liability recognized in the statement of financial
position in respect of defined benefit plan is the present
value of the defined benefit obligation at the date of the
statement of financial position together with adjustments
for unrecognized pastservice costs. The defined benefit
obligation is calculated once in two years by independent
actuaries, Messrs Actuarial and Management Consultants
(Private) Limited [Formerly Messrs Watson Wyatt Lanka
(Private) Limited] using the projected unit credit method.
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows using appropriate interest rates by the actuarial
valuer.
Past-service costs are recognized immediately in statement
of comprehensive income, unless the changes to the
defined benefit plan are conditional on the employees
remaining in service for a specified period of time (the
vesting period). In this case, the past-service costs are
amortized on a straight-line basis over the vesting period.
The following assumptions based on which the results of
the actuarial valuation was determined, are included in
note 31 to the financial statements.
The key assumptions used by the actuary include the
following:
When an existing financial liability is replaced by another
from the same lender on substantially different terms,
or the terms of an existing liability are substantially
modified, such as exchange or modification is treated as
the de-recognition of the original liability. The difference
in the respective carrying amounts is recognized in the
3.16.4Trade and Other Payables
Trade and other payables are obligations to pay for goods
or services that have been acquired in the ordinary course
of business from suppliers. Accounts payable are classified
as current liabilities if payment is due within one (1) year
or less (or in the normal operating cycle of the business if
longer). If not, they are presented as non-current liabilities.
Trade and other payables are stated at their costs.
3.16.5Borrowings
Borrowings are recognized initially at fair value, net
of transaction costs incurred. In subsequent periods,
borrowings are stated at amortized cost using the effective
interest method; any difference between proceeds (net of
transaction costs) and the redemption value is recognized
in the statement of comprehensive income over the
period of the borrowings.
Interest, dividends, losses and gains relating to a financial
instrument, or a component part, classified as a liability
is reported within finance cost in the statement of
45
- 11% (Per
annum)
Average
Rate of
Interest
b.
Average Rate of Salary Increases
c.
an outflow of resources will be required to settle the
obligation and when a reliable estimate of the amount
can be made. Provisions are not recognized for future
operating losses.
(Previous
Year 11%)
a.
- Worker
- 15% (Once (Previous
Year 15%)
in two
years)
- Staff
- 7.5% (Per
Annum)
Where there are number of similar obligations, the
likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a
whole. A provision is recognized even if the likelihood of
an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions for asset retirement obligations are measured
at the present value of the expenditures expected to be
required to settle the obligation using a pre-tax rate that
reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase
in the provision due to passage of time is recognized as
finance cost.
(Previous
Year 7.5%)
Average Retirement Age
- Workers
- 60 Years
(Previous
Year 60
Years)
- Staff
- 55 Years
(Previous
Year 55
Years)
d.
Daily Wage
Rate
- Rs.450/=
(Previous
Year Rs.380)
e.
The company will continue in business
as a going concern.
3.17.2Defined Contribution Plans
For defined contribution plans, such as Ceylon Plantation
Provident Society (CPPS) / Estate Staff Provident Society
(ESPS), Employees’ Provident Fund (EPF) and Employees’
Trust Fund (ETF), the Company and the Group contribute
12% or 15% and 3% respectively, of the employees’
basic or consolidated wage or salary. The Company and
the Group have no further payment obligation once the
contributions have been paid. The Company and the
employees are members of these defined contribution
plans.
3.19 Contingent Liabilities and Contingent Assets
The Company and the Group do not recognize a
contingent liability but disclose its existence in the
financial statements. A contingent liability is a possible
obligation that arises from past events whose existence
will be confirmed by uncertain future events beyond
the control of the Company and the Group or a present
obligation that is not recognized because it is not
probable that an outflow of resources will be required to
settle the obligation. A contingent liability also arises in
the extremely rare circumstance where there is a liability
that cannot be recognized because it cannot be measured
reliably.
A contingent asset is a possible asset that arises from past
events whose existence will be confirmed by uncertain
future events beyond the control of the Company and the
Group. The Company and the Group do not recognize a
contingent asset but discloses its existence where inflows
of economic benefits are probable, but not virtually
certain.
In the acquisition of subsidiaries by the Group under a
business combination, the contingent liabilities assumed
are measured initially at their fair values at the acquisition
date, irrespective of the extent of any minority interest.
3.17.3Short Term Employee Benefits
Wages, salaries, paid annual leave and sick leave, bonuses
and non-monetary benefits are accrued in the period in
which the associated services are rendered by employees
of the Company and the Group.
3.17.4Termination Benefits
Termination benefits are payable whenever an employee’s
service is terminated before the normal retirement date or
whenever an employee accepts voluntary redundancy in
exchange for these benefits. The Company and the Group
recognize termination benefits when it is demonstrably
committed to either terminate the employment of current
employees according to a detailed formal plan without
possibility of withdrawal or to provide termination benefits
as a result of an offer made to encourage voluntary
redundancy.
3.18 Provisions
Provisions are recognized when the Company and the
Group have a present legal or constructive obligation
as a result of past events when it is more probable that
3.20 Deferred Revenue
3.20.1Government Grants and Subsidies
Government grants are recognized where there is
reasonable assurance that the grant will be received and all
attached conditions will be compiled with. When the grant
relates to an expense item, it is recognized as income over
the period necessary to match the grant on a systematic
basis to the costs that it is intended to compensate. Where
the grant relates to an asset, it is recognized as deferred
46
income and released to income in equal amounts over the
expected useful life of the related asset.
Where the company receives non-monitory grants, the
asset and the grant are recorded gross at nominal amounts
and released to the statement of comprehensive income
over the expected useful life and pattern of consumption
of the benefit of the underlying asset by equal annual
installments. Where loans or similar assistance are
provided by governments or related institutions with an
interest rate below the current applicable market rate, the
effect of this favourable interest is regarded as additional
government grant.
Grants related to property, plant and equipment other
than grants received for biological assets are initially
deferred and allocated to the statement of comprehensive
income on a systematic basis over the useful life of the
related property, plant and equipment.
Assets are amortized over their useful lives or unexpired
lease period, whichever is lower.
Government grant related to the Biological Assets which
are measured at fair value less point sale cost is directly
charged to the carrying value of such assets in accordance
with the applicable financial framework.
Property, plant and equipment acquired under finance
leases are depreciated over the estimated useful life of the
asset in accordance with the annual rates stated in note
2.4 (c) to the financial statements as mentioned above.
Where there is no reasonable certainty that the ownership
will be transferred to the Company and the Group, the
asset is depreciated over the shorter of the lease term or
its estimated useful life.
3.21.2Operating Leases
Leases of assets where a significant portion of the risks
and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases are charged as an expense to the
statement of comprehensive income on a straight-line
basis over the period of the lease.
3.22 Tax Expense
Income tax expense comprises of current, deferred tax and
other statutory taxes. Income tax expense is recognized in
the statement of comprehensive income except to the
extent that it relates to items recognized directly in the
statement of changes in equity.
a)
Current Tax
Current tax is the expected tax payable or receivable on
the taxable income or loss for the year, using tax rates
enacted or substantively enacted at the reporting date,
and any adjustment to tax payable in respect of previous
years. Current tax payable also includes any tax liability
arising from the tax on dividend income.
3.21 Accounting for Leases Where the Company and the
Group are the Lessee
The provision for income tax is based on the elements
of income and expenditure as reported in the Financial
Statements and computed in accordance with the
provisions of the Inland Revenue Act. No 10 of 2006 and
subsequent amendments thereto.
3.21.1Finance Leases
Leases of property, plant and equipment where the
Company and the Group assumes substantially all the
benefits and risks of ownership are classified as finance
leases.
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be
recovered from or paid to the Commissioner General of
Inland Revenue.
b)
Deferred Tax
Deferred tax is recognized in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognized
for:
3.20.2Net Income from Operating Rights Given
The net income raised on giving up of operating rights
to Lalan Rubbers (Pvt) Ltd and Walters Bay Tea Estates
(Pvt) Ltd is recognized as income to the statement of
comprehensive income over a period of 42 and 06 years
respectively, which is the period of operating lease in
agreements.
Finance leases are capitalized at the inception of the
lease at the lower of the fair value of the leased asset
and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and
finance charges so as to achieve a constant periodic rate
of interest on the balance outstanding. The corresponding
rental obligations, net of finance charges, are included
in payables. The interest element of the finance lease
is charged to the statement of comprehensive income
as finance cost over the lease period so as to produce a
constant periodic rate of interest on the remaining balance
of the liability for each period.
- Temporary differences on the initial recognition
of assets or liabilities in a transaction that is not
a business combination and that affects neither
accounting nor taxable profit or loss;
- Temporary differences related to investments in
subsidiaries and jointly controlled entities to the
extent that it is probable that they will not reverse in
the foreseeable future; and
47
- Taxable temporary differences arising on the initial
recognition of goodwill.
- Taxable temporary differences arising on subsidiaries,
associates or joint ventures who have not distributed
their entire profits to the parent or investor.
Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively
enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities
will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses,
tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will
be available against which they can be utilized. Deferred
tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the
related tax benefits will be realized.
Deferred tax assets and liabilities are not discounted.
The net increase in the carrying amount of deferred tax
liability net of deferred tax asset is recognized as deferred
tax asset is recognized as deferred tax expense and
conversely any net decrease is recognized as reversal to
deferred tax expense, in the statement of comprehensive
income.
c)
Withholding Tax on Dividends
Dividend distributed out of taxable profit of the local
companies attracts a 10% deduction at source and is not
available for set off against the tax liability of the company.
Withholding tax that arises from the distribution of
dividends by the company is recognized at the same time
as the liability to pay the related dividend is recognized.
d)
Sales Taxes
Revenues, expenses and assets are recognized net of the
amount of sales tax except for the following;
- Sales tax incurred on a purchase of a assets or services
is not recoverable from the taxation authority, in
which case the sales tax is recognized as part of
the cost of acquisition of the asset or as part of the
expense item as applicable; and
- Receivables and payables that are stated with the
amount of sales tax included.
The net amount of sales tax recoverable from, or payable
to, the taxation authority is included as part of other
receivables or other payables in the statement of financial
position.
3.23 Revenue Recognition
Revenue is recognized to the extent that it is probable
that the economic benefits will flow to the company, and
the revenue can be reliably measured, regardless of when
the payment is being made. Revenue is measured at the
fair value of consideration received or receivable, taking
into account contractually defined terms of payment and
excluding taxes or duty.
3.23.1Sale of Goods
Revenue from the sale of goods in the course of ordinary
activities is measured at invoice value net of brokerage,
sale expenses and other levies relate to revenue. Revenue is
recognized when persuasive evidence exists, usually in the
form of an executed sales agreement, that the significant
risks and rewards of ownership have been transferred to
the buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be
estimated reliably, there is no continuing management
involvement with the goods, and the amount of revenue
can be measured reliably. If it is probable that discounts
will be granted and the amount can be measured reliably,
then the discount is recognized as a reduction of revenue
as the sales are recognized.
3.23.2Interest
Interest income is recognized using the effective interest
method. When a loan granted or a receivable is impaired,
the Company and the Group reduces the carrying amount
to its recoverable amount, being the estimated future
cash flow discounted at the original effective interest rate
of the instrument, and continues unwinding the discount
as interest income. Interest income on impaired loan and
receivables are recognized using the original effective
interest rate.
3.23.3Rental Income
Rental income arising from operating leases is recognized
on an accrual basis.
3.23.4Gains and Losses on Disposal
Gains and losses on disposal of an item of property, plant
and equipment are determined by comparing the net
sales proceeds with the carrying amounts of property,
plant and equipment and are recognized within ‘other
operating income’ in the statement of comprehensive
income.
3.23.5Other Income
Other income is recognized on an accrual basis.
48
3.23.6Amortization of Government Grants Received
An unconditional government grant related to a biological
asset is recognized in the statement of comprehensive
income as other income when the grant becomes
receivable.
Other government grants are recognized initially as
deferred income at fair value when there is reasonable
assurance that they will be received and the company will
comply with the conditions associated with the grant and
are then recognized in the statement of comprehensive
income as other income on a systematic basis over the
useful life of the asset.
Grants that compensate the company for expenses
incurred are recognized in the statement of comprehensive
income as other income on a systematic basis in the same
periods in which the expenses are recognized.
3.23.7Gains Arising from Changes in Fair Value of Biological
Assets
Gains or losses arising on initial recognition of biological
assets at fair value less estimated point of sale costs
are recognized in the statement of comprehensive
income. Gains or losses arising on change in fair value
due to subsequent measurements are recognized in the
statement of comprehensive income in the period in
which they arise.
3.23.8Dividend Income
Dividend income is recognized in the statement of
comprehensive income on the date the entity’s right to
receive payment is established.
3.24 Expenditure Recognition
Expenses are recognized in the statement of
comprehensive income on the basis of a direct association
between the cost incurred and the earning of specific
items of income. All expenditure incurred in the running
of the business and in maintaining the property, plant and
equipment in a state of efficiency has been charged to
income in arriving at the profit/ (Loss) for the year.
For the purpose of presentation of the statement of
comprehensive income the Directors are of the opinion
that function of expenses method presents fairly the
elements of the Company’s performance, and hence such
presentation method is adopted.
3.25 Earnings Per Share
The Company presents basic and diluted earnings per
share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during
the period, adjusted for own shares held. Diluted EPS is
determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number
of ordinary shares outstanding, adjusted for own shares
held, for the effects of all dilutive potential ordinary shares,
which comprise convertible notes and share options
granted to employees.
3.26 Comparatives
Where necessary, comparative figures have been adjusted
to conform with changes in presentation in the current
year.
3.27 Related Party Disclosures
3.27.1Transactions with Related Parties
The company carries out transactions in the ordinary
course of its business with parties who are defined as
related parties in Sri Lanka Accounting Standard 24. The
Pricing applicable to such transactions is based on the
assessment of the risk and pricing model of the company
and is comparable with what is applied to transactions
between the company and its unrelated customers.
3.27.2Transactions with Key Management Personnel
According to Sri Lanka Accounting Standard 24 “Related
Party Disclosures”, Key management personnel, are those
having authority and responsibility for planning, directing
and controlling the activities of the entity. Accordingly, the
board of directors (including executive and non-executive
directors), personnel hold designation of General Manager
and above positions and their immediate family members
have been classified as Key Management Personnel of the
company.
The immediate family member is defined as spouse or
dependent. Dependent is defined as anyone who depends
on the respective Director for more than 50% of his/her
financial needs.
3.28 Segment Reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who
is responsible for allocating resources and assessing
performance of the operating segments, has been
identified as the Board of Directors that makes strategic
decisions.
Accordingly, the segment comprises of tea, rubber
and others as described in the note 47 to the financial
statements.
Revenue and expenses directly attributable to each
segment are allocated to the respective segments.
Revenue and expenses not directly attributable to a
segment are allocated on the basis of their resource
utilization, wherever possible.
49
Assets and liabilities directly attributable to each segment
are allocated to the respective segments. Assets and
liabilities, which are not directly attributable to a segment,
are allocated on a reasonable basis wherever possible.
Unallocated items comprise mainly interest bearing
borrowings, finance lease liability to government and
expenses.
Segment capital expenditures are the total cost incurred
during the period to acquire segment assets that are
expected to be used for more than one accounting period.
4.1
Foreign Exchange Risk
The Group’s component BPL Teas (Pvt) Ltd operates
internationally and are exposed to foreign exchange risk
arising from various currency exposures, primarily with
respect to the US Dollar. Foreign exchange risk arises
when future commercial transactions or recognized assets
or liabilities are denominated in a currency that is not the
entity’s functional currency.
4.2
Cash Flow and Fair Value Interest Rate Risk
The Company and the Group has cash and bank balances
including deposits placed with creditworthy licensed
banks and financial institutions. The Company and the
Group manage its interest rate risk by actively monitoring
the yield curve trend and interest rate movement for the
various cash and bank balances.
3.29 Events after the Reporting Date
All material events after the reporting date have been
considered and where appropriate adjustments or
disclosures have been made in the respective notes to the
financial statements.
4
FINANCIAL RISK MANAGEMENT
Financial Risk Factors
The Company’s and the Group’s activities exposed to
variety of financial risks: market risk (including currency
risk, fair value interest rate risk, cash flow interest rate risk
and price risk), credit risk and liquidity risk.
The Company’s and the Group’s overall financial risk
management programme focuses on the unpredictability
of financial markets and seeks to minimize potential
adverse effects on the financial performance of the
Company and the Group. Financial risk management is
carried out through risk reviews, internal control systems,
insurance programmes and adherence to the Company’s
and the Group’s financial risk management policies.
The Board of Directors regularly reviews these risks and
approves the risk management policies, which covers the
management of these risks.
Market risk consists of:
- Foreign currency exchange risk - risk that the value of
a financial instrument will fluctuate due to changes in
foreign exchange rates.
- Price risk - risk that the value of a financial instrument
will fluctuate as a result of changes in market prices,
whether those changes are caused by factors specific
to the individual instrument or its issuer or factors
affecting all instrument traded in the market.
Liquidity risk (funding risk) - risk that an entity will
encounter difficulty in raising funds to meet commitments
associated with financial instruments.
The Company’s and the Group’s borrowings comprise
borrowings from financial and non-financial institutions
and Debentures. The Company’s and the Group’s interest
rate risk objective is to manage an acceptable level of rate
fluctuation on the interest expense. In order to achieve
this objective, the Company and the Group target a
composition of fixed and floating borrowings based on
assessment of its existing exposure and desirable interest
rate profile. The Company and the Group analyses its
interest rate exposure on a dynamic basis.
4.3
Credit Risk
Credit risk is managed on Company and the Group
basis. Credit risk arises from cash and cash equivalents,
derivative financial instruments and deposits with banks
and financial institutions, as well as credit exposures to
customers, including outstanding receivables (net of
deposits held). Individual risk limits are set, based on
internal or external ratings. The utilization of credit limits
is regularly monitored.
The Company and the Group place its cash and cash
equivalents with a number of creditworthy financial
institutions. The Company’s and the Group’s policy limits
the concentration of financial exposure to any single
financial institution. The maximum credit risk exposure
of the financial assets of the Company and the Group are
approximately their carrying amounts as at the date of the
statement of financial position.
- Fair value interest rate risk - risk that the value of a
financial instrument will fluctuate due to changes in
market interest rates.
- Cash flow interest rate risk - risk that future cash flows
associated with a financial instrument will fluctuate.
In the case of a floating rate debt instrument, such
fluctuations. Result in a change in the effective
interest rate of the financial instrument, usually
without a corresponding change in its fair value.
Credit risk - risk that one party to a financial instrument will
fail to discharge an obligation and cause the other party to
incur a financial loss.
50
4.4
Liquidity Risk
Prudent liquidity risk management implies maintaining
sufficient liquid funds to meet its financial obligations.
In the management of liquidity risk, the Company and
the Group monitor and maintain a level of cash and cash
equivalents deemed adequate by the management to
finance the Company’s and the Group’s operations and
to mitigate the effects of fluctuations in cash flows. Due
to the dynamic nature of the underlying business, the
Company and the Group aim at maintaining flexibility in
funding by keeping both committed and uncommitted
credit lines available.
The table below analyses the Group’s and the Company’s
non-derivative financial liabilities into relevant maturity
groupings based on the remaining period at the date
of the statement of financial position to the contractual
maturity date.
Group
Less Than 01 Year (Rs.)
Between Year 02 And Year 05 (Rs.) Over 05 Years (Rs.)
As at 31st March, 2014
Borrowings
136,476,373
612,687,000
8,174,552
13,597,313
24,176,451
-
Borrowings
73,836,044
224,246,902
31,632,535
Lease Liability
12,758,439
24,357,912
-
Lease Liability
Company
Less Than 01 Year (Rs.)
Between Year 02 And Year 05 (Rs.) Over 05 Years (Rs.)
Borrowings
102,262,315
374,168,089
8,174,552
11,433,734
21,106,086
-
Borrowings
64,431,814
221,831,977
31,632,535
Lease Liability
10,876,732
18,918,878
-
Lease Liability
Capital expenditure and working capital expenditure
requirements of the Group are financed through internally
generated cash flows as well as external financing
arrangements. Management has arranged financial
facilities with several financial institutions to support
future financial requirements.
The Company and the Group manage its capital structure
and make adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the
Company and the Group may or may not make dividend
payments to shareholders, return capital to shareholders
or issue new shares or other instruments.
5
CAPITAL MANAGEMENT RISK
The primary objective of the Company’s and the Group’s
capital management is to ensure that it maintains a strong
credit rating and healthy capital ratios in order to support
its business and maximize shareholder value.
Consistent with others in the industry, the Company and
the Group monitor capital on the basis of the gearing ratio.
This ratio is calculated as total borrowings by total equity.
Total borrowings including non-current and current
borrowings as shown in the statements of financial
position. Total equity is calculated as ‘Total equity’ in the
statements of financial position.
51
Group
2013/2014
Company
2012/2013
2011/2012
2013/2014
2012/2013
2011/2012
Borrowings (Rs.)
1,039,073,205
609,736,111
531,036,690
484,604,956
337,896,326
283,724,016
Total Equity (Rs.)
1,057,027,846
1,045,546,061
695,006,752
945,244,396
976,308,706
689,506,890
98%
58%
76%
52%
35%
41%
Gearing Ratio
6
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
6.1
Critical Accounting Estimates and Assumptions
The Company and the Group make 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 amounts of assets and liabilities within the
next financial year are addressed below:
6.1.1 Estimated Useful Lives of Property, Plant and
Equipment
The Company and the Group reviews annually the
estimated useful lives of property, plant and equipment
based on factors such as business plan and strategies,
expected level of usage and future technological
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 property, plant and
equipment would increase the recorded depreciation
charge and decrease the property, plant and equipment
carrying value.
6.1.2 Taxation
i. Income Taxes
Judgement is involved in determining the Company and
the Group provision for income taxes. There are certain
transactions and computations for which the ultimate
tax determination is uncertain during the ordinary course
of business. The Company and the Group recognize
liabilities for tax matters based on estimates of whether
additional taxes will be due. If the final outcome of these
tax matters result in a difference in the amounts initially
recognized, such differences will impact the income tax
and/or deferred tax provisions in the period in which such
determination is made.
ii.Deferred Tax
Deferred tax assets are recognized to the extent that it is
probable that future taxable profit will be available against
which temporary differences can be utilised. This involves
judgement regarding future financial performance of a
particular entity in which the deferred tax asset has been
recognized.
6.1.3 Fair Valuation of Consumable Biological Assets-Timber
The fair value of timber trees are measured using DCF
method taking into consideration the available log and
tree prices in city centers less point-of-sale-costs applied
to expected timber content of a tree at the maturity
and changes in fair value reflected in the statement of
6.1.4 Fair Value of Derivatives and Other Financial
Instruments
Certain financial instruments such as investments,
derivative financial instruments and certain elements
of borrowings are carried on the statement of financial
position at fair value, with changes in fair value reflected
in the statement of comprehensive income.
Fair values are estimated by reference in part to
published price quotations and in part by using valuation
techniques. The fair value of financial instruments that
are not traded in an active market is determined by using
valuation techniques. The Company and the Group use
its judgement to select a variety of methods and make
assumptions that are mainly based on market conditions
existing at the end of each financial reporting period.
6.1.5 Impairment of Non-Current Assets
The Company and the Group test annually the indicators
to ascertain whether non-current assets (including
intangibles) have suffered any impairment, in accordance
with the accounting policy stated in note 3.10. These
calculations require the use of estimates.
6.1.6 Defined Benefit Plan - Gratuity
The present value of the defined benefit plan 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 (income) for defined
benefit plan include the discount rate, future salary
increase rate, mortality rate, withdrawal and disability rates
and retirement age. Any changes in these assumptions
will impact the carrying amount of defined benefit plan.
The Company and the Group determine 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 defined benefit plan. In determining the
appropriate discount rate, the Company and the Group
consider the interest yield of long term government
52
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 defined benefit
plan. Other key assumptions for defined benefit plan are
based in part on current market conditions (Note 3.17.1).
6.1.7 Provisions
The Company and the Group recognize provisions when
they have a present legal or constructive obligation
arising as a result of a past event, and it is probable that
an outflow of economic benefits will be required to settle
the obligation and a reliable estimate can be made.
The recording of provisions requires the application
of judgements about the ultimate resolution of these
obligations. As a result, provisions are reviewed at each
statement of financial position date and adjusted to reflect
the Company’s and the Group’s current best estimate.
6.1.8 Contingent Liabilities
Determination of the treatment of contingent liabilities
in the financial statements is based on the management’s
view of the expected outcome of the applicable
contingency. The Company and the Group consult with
legal counsel on matters related to litigation and other
experts both within and outside the Company and the
Group with respect to matters in the ordinary course of
business.
6.1.9 Impairment of Trade Receivables
The Company and the Group assesses at the date
of statement of financial position 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.
53
Notes to the Financial Statements
7. REVENUE
7.1 Industry Segment
Tea
Rubber
Local Marketing Sales
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
3,547,090,003
13,848,947
301,541,739
3,862,480,689
3,512,006,927
4,978,235
252,101,586
3,769,086,748
2,637,268,949
13,848,947
-
2,651,117,896
2,641,392,643
4,978,235
2,646,370,878
3,419,857,995
15,797,379
212,691,639
3,648,347,013
3,088,593,256
5,440,342
194,357,946
3,288,391,544
2,676,403,882
15,797,379
-
2,692,201,261
2,377,787,889
5,440,342
2,383,228,231
17,117,934
16,421,028
4,878,915
8,866,299
5,332,160
8,839,140
9,381,311
416,336
-
42,434,752
35,276,077
9,500,852
-
21,876,835
9,031,127
9,381,311
416,337
999,608
31,503,603
33,212,008
6,916,708
3,121
2,203
7,350,398
6,229,997
7,455
1,356,358
4,679,000
30,000,000
-
-
30,000,000
-
-
-
-
31,650,000
208,410,075
174,670,798
8. COST OF SALES
8.1 Industry Segment
Tea
Rubber
Local Marketing Division
9. OTHER INCOME
Income from Leasing of Bungalows and Renting Land for Communication Towers
17,117,934
16,421,028
Revenue Share Income from ASPIC and Eco Power (Pvt) Ltd
4,878,915
8,866,299
Profit on Sale of Property, Plant and Equipment
5,332,160
21,876,835
Amortization of Grants
8,839,140
9,031,127
Income from Operating Rights Given to LRL
9,381,311
9,381,311
Income from Operating Rights Given to ASPIC
416,336
416,337
Sundry Income
55,880
999,608
Profit on Sale of Reprocessed Tea
42,434,752
31,503,603
Profit on Sale of Refuse Tea
35,276,077
33,212,008
Revenue Share of Tea Trial (Pvt) Ltd.,
9,500,852
6,916,708
Gain on Investments In Shares
-
3,121
Profit on Disposal of Investment in Quoted Shares
2,203
7,455
Dividends Income
7,350,398
1,356,358
Other Income
6,229,997
4,683,657
Walters Bay Tea Estates Pvt) Ltd - Fee for Management & Operation
30,000,000
30,000,000
Written Back of Lease Creditor
46,474
-
Contract Packing Income
-
1,462,908
Exchange Gain on Transaction of Foreign Currency
-
21,300,170
Tea Sales - Staff
-
64,832
Reversal of Impairment Provision Made in Respect of BPL Teas (Pvt) Ltd
-
-
176,862,429
197,503,365
10.
MANAGEMENT FEE EXPENSES
Previous Year’s Profit After Tax
Management Fee to Managing Agent
350,539,309
(353,006,087)
286,801,816
(353,006,087)
27,979,950
-
24,228,544
-
As per agreement entered with the managing agent Metropolitan Resource Holdings PLC, the management fee is computed
based on profit after tax as follows:
- 5.15% of the previous year’s annual profit after tax upto Rs.100 million
- 7.5% of the previous year’s annual profit after tax slab of Rs.100 to Rs.200 million
- 9.85% of the previous year’s annual profit after tax over Rs.200 million
54
11. NET FINANCE INCOME/ (EXPENSES)
Finance Income
Interest Income
Finance Expenses
Interest on Finance Lease
Interest on Bank Overdrafts
Lease Interest to JEDB/SLSPC
Interest on Long Term Loans
Interest on Short Term Borrowings
Bill Discounting Charges
Interest on Debentures
Net Finance Income/(Expenses)
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
3,203,084
1,496,760
2,968,689
1,226,372
(4,697,737)
(8,568,679)
(28,453,654)
(50,543,787)
(956,796)
-
(8,956,623)
(98,974,192)
(5,289,859)
(7,248,424)
(27,845,803)
(46,455,649)
(4,869,166)
(16,759)
(12,708,786)
(102,937,686)
(3,889,162)
(2,683,390)
(28,453,654)
(28,569,129)
(956,796)
-
(8,956,623)
(70,540,065)
(4,385,520)
(1,211,708)
(27,845,803)
(24,566,246)
(4,869,166)
(12,708,786)
(74,360,857)
14,669,080
1,913,525
-
7,784,125
1,848,846
347,528
8,544,584
8,460,551
2,310,360
63,772,026
-
39,042,468
20,439,832
66,351,247
17,941,980
114,055,913
1,724,595,309
70,950,228
1,465,002,037
50,000,000
-
540,302
-
540,302
13,582,895
12,952,104
26,534,999
12. PROFIT/ (LOSS) BEFORE TAXATION
Profit/ (loss) before tax is stated after charging all expenses including the followings:
Directors’ Emoluments
14,669,080
7,784,125
Auditor’s Remuneration - Audit Services
2,408,525
2,433,846
- Other Services
-
347,528
Depreciation/Amortization On ;
- Right to Use of Land
8,544,584
8,460,551
- Immovable (JEDB/SLSPC) Estate Assets on Finance Lease
(Other than Right to Use of Land)
2,310,360
20,439,832
- Property, Plant and Equipment
79,437,921
79,565,189
- Brand Developments
1,906,036
1,518,951
- Bearer Biological Assets
39,042,468
17,941,980
Staff Costs
- Retirement Benefit Obligations
(including Provision for Bolted Workers)
118,010,925
73,435,870
- Salaries and Wages
1,803,078,035 1,530,000,980
Provision made for Immature Plantation
- Bearer Biological Assets
50,000,000
-
13. INCOME TAX EXPENSES
13.1Current Income Tax Expense
Current Income Tax Expense on Current Year’s Profit
Under Provision in Respect of Previous Year
4,665,323
-
4,665,323
18,819,152
12,952,104
31,771,256
55
13. INCOME TAX EXPENSES (Contd…)
13.2Reconciliation of Accounting Profit/ (Loss) to Income Tax Expense
Numerical reconciliation between the tax expense/ (income) and the product of accounting profit/ (loss) multiplied by the
applicable tax rate disclosing also the basis on which the applicable tax rate is computed are given below:
Group
Company
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
Statutory Tax Rate
28%
28%
28%
28%
Accounting Profit/ (Loss)
(23,943,917)
382,310,565
(38,965,033)
313,336,815
Tax Expense/ (Tax Income) on Accounting Profit/ (Loss)
(6,704,297)
94,631,683
(10,910,209)
87,734,308
Add : Tax Effect of Disallowable Expenses in
Determining Taxable Income/ (Loss)
105,139,966
67,730,939
84,633,839
64,447,356
Less : Tax Effect of Allowable Expenses in
Less : Tax Effect of Profit from Agriculture
Add : Tax Effect of Adjusted Loss from Trade or Business
Add : Tax Effect of Non- Agricultural Income in
Add : Tax on Interest Income
Less : Tax Effect of Tax Loss Set Off in
Less : Effect on Changing the Profits Due to SLFRS/ LKAS
Less : Effect on Agricultural Profit which is
Taxed at Lower Rate
Tax Expense Charge to Statement of
Comprhensive Income
(133,253,427)
(133,803,771)
(126,354,795)
(131,702,966)
-
10,164,666
-
10,189,039
41,020,757
(2,819,523)
41,020,757
-
11,610,408
(726,126)
11,610,408
(726,126)
831,233
343,384
831,233
343,384
(6,510,194)
(10,176,519)
(290,931)
(10,176,519)
-
(1,209,226)
-
(1,209,226)
(7,469,123)
(5,316,355)
-
(5,316,355)
4,665,323
18,819,152
540,302
13,582,895
13.3Deferred Taxation
The deferred tax asset arising on the temporary difference of the company has not been recognized as a matter of prudence
and the resultant tax effect is disclosed below:
Group
Company
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
Temporary Difference on PPE
379,327,694
389,975,459
312,723,994
316,780,708
Temporary Difference on
Retirement Benefit Obligations - Gratuity
(772,817,545) (717,186,253) (755,517,287) (703,364,306)
Tax Losses Carried Forward
(715,315,543) (613,295,628) (584,787,437) (440,483,943)
Tax Credits Carried Forward
-
(48,060,395)
-
(46,217,542)
Temporary Difference on Consumable Biological Assets
531,388,185
456,207,475
531,388,185
456,207,475
Temporary Difference on Deferred Income
290,820,657
313,941,037
290,820,657
313,941,037
(286,596,552) (218,418,305) (205,371,888) (103,136,571)
Deferred Tax Asset
(39,427,253) (122,523,759)
(31,304,786) (110,995,585)
Deferred tax of the company has been computed at effective tax rate of 16.14% for all the temporary differences except
temporary difference on consumable biological assets and deferred income which were taxed at the rate of 10% and 28%
respectively. The tax rate used by the subsidiary company for the computation of deferred tax is 10%.
56
14. EARNINGS/ (LOSS) PER ORDINARY SHARE
14.1Basic Earnings/ (Loss) Per Ordinary Share
The calculation of basic earnings/ (loss) per ordinary share has been done based on net profit/(loss) attributable to ordinary
shareholders divided by weighted average number of ordinary shares in issue as at the reporting date and calculated as follows:
Group
Company
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
Net Profit/(Loss) Attributable to Ordinary Shareholders
(28,609,240)
350,539,309
(39,505,335)
286,801,816
Weighted Average Number of Ordinary Shares in Issue (Nos) 83,750,001
83,750,001
83,750,001
83,750,001
Basic (Loss)/ Earnings per Ordinary Share (Rs.)
4.19
(0.47)
3.42
(0.34)
14.2Diluted Earnings Per Ordinary Share
The calculation of diluted earnings/(loss) per ordinary share is based on net profit/(loss) attributable to ordinary shareholders
and weighted average number of ordinary shares outstanding after adjustment for the effect of all dilutive potential ordinary
shares. There were no potentially dilutive shares outstanding at any time during the year/previous year.
Group
Company
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
15.
DIVIDEND PER SHARE
Dividend Paid (Rs.)
No. of Ordinary Shares in Issue (Nos.)
Dividend Per Ordinary Share (Rs.)
8,375,000
83,750,001
0.1
-
-
-
8,375,000
83,750,001
0.1
-
16. RIGHT TO USE OF LAND - (GROUP/COMPANY)
“JEDB/SLSPC Estates allocated to the Company have been handed over to, and are being operated by the Company. Lease
deeds of all estates have been executed. All leases signed are retroactive to 22nd June,1992, the date of formation of the
Company. The leasehold rights to use of bare land on all Estates have been taken into the books of the Company on 22nd
June,1992 immediately after the formation of the Company in terms of the ruling on this matter obtained from the Urgent
Issue Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanka. For this purpose, the Board decided at its meeting
on 8th March,1995 that the values attached to the right to use land would be those determined by Valuation Specialist,
Mr.D.R.Wickramasinghe just prior to the formation of the Company. The valuation report referred to above was not subjected
to a land survey. “
However, the Institute of Chartered Accountants of Sri Lanka has withdrawn the UITF ruling with the implementation of LKAS/
SLFRS and introduced Statement of Recommended Practice (SoRP) on Leasehold Land on 19th December, 2012. Subsequently,
amendments to the SoRP along with the modification to the title as Statement of Alternative Treatment (SoAT) were approved
by the council on 21st August, 2013. As per the SoRT, right to use of land on lease does not permit further revaluation.
Balance
Balance
As At
As At
31.03.2014
31.03.2013
Rs.
Rs.
Capitalized Value
Revaluation as at 22nd June, 1992
448,380,000
448,380,000
Amortization
As at 01st April
171,316,267
162,855,716
Amortization for the Year
8,544,584
8,460,551
As at 31st March
179,860,851
171,316,267
Written Down Value
268,519,149
277,063,733
The Leasehold Right to use of Bare Land is being amortized by equal amounts over a 53 years period and the unexpired period
of the lease as at the date of the Statement of Financial Position is 31.75 years.
57
17. IMMOVABLE JEDB/ SLSPC ESTATE ASSETS ON FINANCE LEASE (OTHER THAN RIGHT TO USE OF LAND) - (GROUP/ COMPANY)
As more fully explained in Note 16, all JEDB/SLSPC estate lease deeds have been executed to date. In terms of the ruling of
the UITF of The Institute of Chartered Accountants of Sri Lanka prevailed at the time of privatization of plantation estates, all
immovable assets in the JEDP/SLSPC estates under finance leases have been taken into the books of the company retroactive
to 22nd June, 1992. For this purpose, the Board decided at its meeting on 08th March, 1995, that these assets be revalued at
their book values as they appear in the books of the JEDB/SLSPC, on the day immediately preceding the date of formation of
the company. These assets are taken into the Statement of Financial Position as at 22nd June, 1992 and amortized as follows:
17.1Capitalized Value
Buildings
Rs.
Revaluation as at 22nd June, 1992
64,948,134
64,948,134
64,948,134
Plant and
Machinery
Rs.
Total
Rs.
13,272,826
13,272,826
13,272,826
78,220,960
78,220,960
78,220,960
17.2Amortization
Accumulated Amortization As At 01st April, 2013
Accumulated Amortization As At 31st March, 2014
57,203,846
2,307,061
59,510,907
13,269,527
3,299
13,272,826
70,473,373
2,310,360
72,783,733
17.3Written Down Value As At 31st March, 2014
5,437,227
-
5,437,227
17.4Written Down Value As At 31st March, 2013
7,744,288
3,299
7,747,587
17.5Investment in plantation assets which were immature at the time of handing over to the company by way of estate leases are
shown under immature plantations (revalued as at 22nd June,1992), all of which have been transferred to mature plantations
(Bearer Biological Assets) as at the date of statement of financial position. Investment by the company on mature and immature
plantations is shown separately under bearer biological assets in Note 20 to the financial statements.
17.6Assets are being amortized in equal annual amounts over the following periods:
Mature Plantations/Improvements to Land (Note 20)
- 30 Years
Buildings
- 25 Years
Plant and Machinery
- 15 Years
58
18
TANGIBLE ASSETS OTHER THAN BEARER BIOLOGICAL ASSETS
18.1
GROUP
18.1.1 Cost
18.1.1.1 Freehold Assets
Buildings
Rs.
258,328,470
Additions
10,052,479
Disposals
-
Transfer From Leasehold
-
268,380,949
Plant and
Machinery
Rs.
667,013,980
278,018,770
(333,869)
-
944,698,881
Motor
Vehicles
Rs.
83,640,062
6,830
(10,491,217)
1,191,304
74,346,979
Others
Rs.
376,232,274
15,730,524
(60,780)
-
391,902,018
Total
Rs.
1,385,214,786
303,808,603
(10,885,866)
1,191,304
1,679,328,827
18.1.1.2 Assets on Finance Leases
Additions
Transfer To Freehold
-
-
-
-
54,089,346
-
-
54,089,346
24,066,272
14,749,396
(1,191,304)
37,624,364
-
-
-
-
78,155,618
14,749,396
(1,191,304)
91,713,710
18.1.1.3 Total Gross Carrying Amount
As At 31st March, 2014
268,380,949
998,788,227
111,971,343
391,902,018
1,771,042,537
258,328,470
721,103,326
107,706,334
376,232,274
1,463,370,404
53,200,397
Charge For the Year
7,137,539
Transfer From Leasehold
-
Accumulated Depreciation on Disposals
-
60,337,936
424,840,574
39,647,305
-
(276,765)
464,211,114
74,079,180
4,169,201
992,754
(10,491,217)
68,749,918
191,273,001
22,178,605
-
-
213,451,606
743,393,152
73,132,650
992,754
(10,767,982)
806,750,574
-
-
-
-
8,034,164
1,510,892
-
9,545,056
3,293,346
4,794,380
(992,754)
7,094,972
-
-
-
-
11,327,510
6,305,272
(992,754)
16,640,028
18.1.2.3 Total Accumulated Depreciation
60,337,936
473,756,170
75,844,890
213,451,606
823,390,602
53,200,397
432,874,738
77,372,526
191,273,001
754,720,662
18.1.2
Accumulated Depreciation
18.1.2.2 Assets On Finance Leases
Charge For the Year
Transfer To Freehold
18.1.3
Written Down Value
208,043,013
525,032,057
36,126,453
178,450,412
947,651,935
18.1.4
Written Down Value
205,128,073
288,228,588
30,333,808
184,959,273
708,649,742
59
18
TANGIBLE ASSETS OTHER THAN BEARER BIOLOGICAL ASSETS (Contd..)
18.2
COMPANY
18.2.1 Cost
Buildings
Rs.
258,328,471
Additions
10,052,479
Disposals
-
268,380,950
Plant and
Machinery
Rs.
Motor
Vehicles
Rs.
Others
Rs.
Total
Rs.
554,372,384
37,520,100
(333,869)
591,558,615
79,847,158
-
(10,491,217)
69,355,941
310,031,604
3,857,621
(60,780)
313,828,445
1,202,579,617
51,430,200
(10,885,866)
1,243,123,951
Additions
-
-
-
44,247,161
-
44,247,161
22,874,968
14,749,396
37,624,364
-
-
-
67,122,129
14,749,396
81,871,525
268,380,950
635,805,776
106,980,305
313,828,445
1,324,995,476
258,328,471
598,619,545
102,722,126
310,031,604
1,269,701,746
375,972,516
31,860,375
(276,765)
407,556,126
72,820,241
3,389,999
(10,491,217)
65,719,023
159,562,011
15,817,005
-
175,379,016
661,555,164
58,204,918
(10,767,982)
708,992,100
6,742,377
772,728
7,515,105
2,300,595
4,794,380
7,094,975
-
-
-
9,042,972
5,567,108
14,610,080
18.2.2
53,200,396
Charge For the Year
7,137,539
Accumulated Depreciation on Disposals
-
60,337,935
-
Charge For the Year
-
-
60,337,935
415,071,231
72,813,998
175,379,016
723,602,180
53,200,396
382,714,893
75,120,836
159,562,011
670,598,136
208,043,015
220,734,545
34,166,307
138,449,429
601,393,296
205,128,075
215,904,652
27,601,290
150,469,593
599,103,610
18.2.3
Written Down Value
Written Down Value
60
18.
TANGIBLE ASSETS OTHER THAN BEARER BIOLOGICAL ASSETS (Contd..)
18.3
The residual values and useful lives of above assets have been evaluated at the end of the year and did not recognize
changes of any of those estimations. The company has evaluated both internal and external indicators of impairment of
long lived assets and has not identified presence of any of such indicators at the end of the financial year. The management
is confident that there are no estimations uncertainty at the date of the statement of financial position that have a
significant risk of causing material adjustment to the carrying value of assets and liabilities within the financial year.
18.4
The assets shown above are those movable and immovable assets vested in the company by Gazette Notification on
the date of formation of the company (22nd June, 1992) and all investments in tangible assets by the company since its
formation. The assets taken over by way of estates leases are set out in Notes 16 and 17 above.
18.5
Cost of property, plant and equipment of the company as at reporting date includes the fully depreciated assets amounting
to Rs. 287,569,727/- (Group - Rs.338,422,639/-)
18.6
Information of the freehold building of the company/ group is disclosed below as required under rule 7.6 (VIII) of the
Colombo Stock Exchange listing rules.
Cost As At
Net Book Value As At
31.03.2014
31.03.2014
Location/ Estate
Square Feet
No. of Buildings
Rs.
Rs.
Kotiyagala
Bogawana
Campion
Norwood
Wanarajah
Lethenty
Bogawantalawa
Fetteresso
Loinorn
Osborne
Poyston
19.
INTANGIBLE ASSETS
10,422
10,201
25,536
30,689
36,624
8,231
25,292
3,545
31,391
2,323
31,203
218
144
192
154
218
188
139
126
103
128
90
28,923,420
10,817,963
17,736,256
20,346,081
13,825,125
30,409,914
14,508,146
8,900,992
10,283,383
3,429,856
4,337,481
21,493,730
8,408,838
12,834,449
16,516,720
11,153,545
29,962,736
15,290,450
10,583,562
8,261,780
2,121,396
3,425,953
19.1
GROUP/COMPANY
Group
Company
Brand Brand
19.1.1 Cost
Development Software
Total
Development Software
Rs.
Rs.
Rs.
Rs.
Rs.
Total
Rs.
Additions
3,037,908
-
3,037,908
2,675,525
-
2,675,525
5,713,433
-
5,713,433
-
-
-
-
-
-
-
19.1.2
Charge For the Year
1,518,951
1,518,957
3,037,908
1,915,084
387,080
2,302,164
3,434,035
1,906,037
5,340,072
-
-
-
-
-
-
-
19.1.3
Written Down Value
-
373,361
373,361
-
-
-
19.1.4
Written Down Value
1,518,957
760,441
2,279,398
-
-
-
19.1.5
Brand Development represents the investments made in brand developments, acquiring marketing rights and legal
protections for the brands which will result in future economic benefits. Brand acquisition cost will be amortized over a
period of 5 years and the costs relating to investment in brand acquiring, acquiring of marketing rights and legal protection
will be amortized over a period of ten years commencing from 2004/2005.
335,287,026
17,482,663
352,769,689
196,854,312
20,529,550
217,383,862
178,912,332
17,941,980
196,854,312
549,624,001
39,042,468
588,666,469
514,199,358
35,424,643
549,624,001
450,657,707 1,960,500,388 1,850,503,622
- 119,597,959 109,996,766
54,695,335
-
505,353,042 2,080,098,347 1,960,500,388
20.4 Borrowing cost incurred in respect of replanting amounting to Rs.14,909,200/-(Previous Year-Rs.17,028,880/-) has been capitalized to immature plantation during the year.
352,769,689
18,512,918
371,282,607
505,353,042
-
101,794,869
607,147,911
Written Down Value
917,562,944 899,759,854 184,104,885 202,617,803 389,764,049 308,498,730 1,491,431,878 1,410,876,387
Less: Provision Made for Immature Plantation (50,000,000)
Written Down Value After Provision 1,441,431,878 1,410,876,387
Growing Crop Nurseries
17,519,238
17,391,869
Less: Provision for Over-grown Plants
(782,735)
(943,362)
Total Written Down Value 1,458,168,381 1,427,324,894
-
-
-
555,387,492
-
-
555,387,492
20.3
-
-
-
555,387,492
-
-
555,387,492
Depreciation
Charge For the Year
844,458,423
109,996,766
(54,695,335)
899,759,854
20.2
899,759,854
119,597,959
(101,794,869)
917,562,944
Total
2013/2014
2012/2013
Rs.
Rs.
Additions
Transfers In/(Out)
Mature Plantations
Before Formation
After Formation
of the Company
of the Company
2013/2014
2012/2013 2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
20. BEARER BIOLOGICAL ASSETS (GROUP/ COMPANY)
Immature Plantations
2013/2014
2012/2013
20.1 Cost
Rs.
Rs.
61
62
2013/2014
21. CONSUMABLE BIOLOGICAL ASSETS - MANAGED TIMBER PLANTATIONS (GROUP/ COMPANY)
Rs.
455,948,264
Decrease Due to Harvesting
(51,787,033)
Gain/ (Loss) on Fair Valuation
118,734,028
522,895,259
Increase Due to New Planting
Note 21.1
7,310,497
Growing Crop Nurseries
1,182,429
531,388,185
21.1Biological Assets at Initial Stage
Cost
Add : Additions for the Year
Less : Transfer Out
Depreciation
Add : Charge for the Year
Less : Transfer Out
Written Down Value
2012/2013
Rs.
377,972,333
(36,389,425)
114,365,356
455,948,264
259,211
456,207,475
2,581,091
7,051,286
-
9,632,377
2,581,091
2,581,091
(2,321,880)
-
-
(2,321,880)
7,310,497
(2,321,880)
(2,321,880)
259,211
21.2The biological assets, Eucalyptus Grandis Mature and Immature Timber Trees of the company were inspected and valued by
M/S. Ariyatileka & Co (Pvt) Ltd., independent Chartered Valuers (UK) as at 31st March, 2014. Based on this Valuation Report,
the Directors of the company have valued the Eucalyptus Grandis Tree Plantation as at the date of the statement of financial
position after making adjustments for risk at individual fields to reflect the requirement of the Sri Lanka Accounting Standards.
Accordingly, Directors of the company have determined the fair value of these trees as Rs.522,895,259/-.
Eucalyptus Grandis Timber Trees are measured at the directors’ assessment of their value at each reporting date. The fair value
is determined as being the net present value of expected future cash flows (discounted at a risk adjusted rate) Significant
assumption used are, as follows:
a) Trees will reach maturity, 20 years after planting and further 40% of the existing inventory of trees will be thinned out during
the next 02 to 05 years with clear fell at 20 years.
b) Trees have been valued as per the current timber prices in the domestic market based on the price list of the State Timber
Corporation and prices of timber trees sold by Estates and prices of logs and sawn timber in the popular timber traders in
Sri Lanka.
c)
Timber yields have been adjusted to reflect volumes as reported by independent valuers contracted by the company.
Plantations have been independently inspected by the valuers and assessed in order to make this determination.
d) Future cash flows are determined by references to current timber prices without considering the inflationary effect.
e) The ongoing costs of growing the trees which are deducted in determining the net cash flows are constant in real terms.
f)
A discounting rate of 13% per annum is applied to the estimated cash flows. The rate was determined having regard to the
followings:
(i) New “Forestry Master Plan” (FMP) of the company for the period of 2014/2018 was completed and new inventories of
estate levels were completed. The “FMP” was approved by the Director of Plantation Management Monitoring Division
and the Conservator General of Forest in June, 2014. The valuation of Consumable Biological Asset was done based on
the figures of this approved FMP and all the risk factors with respect to the number of trees, species selection…etc. were
reduced to minimum residue level to have a better estimate of the valuation.
(ii) The weighted average long term bond rate
(iii) The adjusted risk premium by considering,
- Specific provision made in the “FMP” and the valuation schedule
- The illiquid nature of the plantations prior to maturity.
- A lack of market evidence as to the value of biological assets through their life cycle.
- Risk relations to diseases and fire affecting the Biological Assets
- Adoption of conservative valuation approach
g) Biological Assets at Initial Stage
The company has separately identified biological assets at their initial stage (that is Eucalyptus Grandis below 5 years from the
date of planting) and has valued at cost less accumulated depreciation due to the fact that the fair value of those assets cannot
be measured reliably.
63
21.
CONSUMABLE BIOLOGICAL ASSETS - MANAGED TIMBER PLANTATIONS (GROUP/COMPANY) (Contd…)
21.3 Potential Risks- Timber Plantations
The Company is Exposed to following Risks in Relation to Timber Plantations
a)
Supply and Demand Risk
The company is exposed to risks arising from fluctuations in the price and sales volume of timber. When possible, the
company manages this risk by aligning its harvest volume to market supply and demand. Management performs regular
industry trend analyses to ensure that the company’s pricing structure is in line with the market and to ensure that projected
harvest volumes are consistent with the expected demand.
b)
Regulatory and Environmental Risks
The company is subject to laws and regulations in Sri Lanka. The company has established environmental policies and
procedures aimed at compliance with local environmental and other laws. Management performs regular reviews to identify
environmental risks and to ensure that the systems in place are adequate to manage those risks.
c)
Climate and Other Risks
The Company’s timber plantations are exposed to the risk of damage from climatic changes, diseases, forest fires and other
natural forces. The company has extensive processes in place aimed at monitoring and mitigating those risks, including
regular forest health inspections and industry pest and disease surveys. The company also insures itself against natural
disasters such as floods, Land slides and hurricanes.
21.4 Sensitivity Analysis
21.4.1Sensitivity Variation on Sales Price
Net present value of the biological assets as appearing in the Statement of Financial Position are very sensitive to the changes
into the average sales prices applied. Simulations made for timber show that an increase or decrease by 10% of the estimated
future selling price other variables are remained unchanged, has the following effect on the net present value of biological
assets:
+10%
0%
-10%
(Rs.)
(Rs.)
(Rs.)
Managed Timber
577,103,320
522,895,259
468,404,100
21.4.2Sensitivity Variation on Discount Rate
Net present value of the biological assets as appearing in the Statement of Financial Position are very sensitive to changes
of the discount rate applied. Simulations made for timber show that an increase or decrease by 1 % of the estimated future
discount rate has the following effect on the net present value of biological assets:
14%
13%
12%
(Rs.)
(Rs.)
(Rs.)
Managed Timber
495,536,684
522,895,259
552,132,859
Group
Company
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
22. CAPITAL WORK-IN-PROGRESS
19,249,753
18,258,771
19,249,753
18,258,771
Additions During the Year
80,073,595
9,325,883
38,511,535
9,325,883
99,323,348
27,584,654
57,761,288
27,584,654
Less: Capitalized During the Year
(35,170,791)
(8,334,901)
(35,170,791)
(8,334,901)
64,152,557
19,249,753
22,590,497
19,249,753
64
23
INVESTMENTS
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
Investments in Subsidiaries
23.1
-
-
63,300,000
31,650,000
Investments in Equity Shares
23.2 15,000,000
15,000,000
15,000,000
15,000,000
Other Investments
23.3
-
24,521
-
24,521
15,000,000
15,024,521
78,300,000
46,674,521
Percentage
23.1 Investments in Subsidiaries
Holding
BPL Teas (Pvt) Ltd
(12,660,000 Ordinary Shares of Rs.10/- Each)
100%
-
-
126,600,000
126,600,000
-
-
126,600,000
126,600,000
Less : Provision for Impairment of Investments In Subsidiaries
-
-
(94,950,000)
(94,950,000)
Reversal of Impairment Provision
-
-
31,650,000
-
-
63,300,000
31,650,000
23.1.1Impairment of Investments in Subsidiaries
a)The recoverable amount of the investment made in BPL Teas (Pvt) Ltd., was less than the carrying amount of investment of
Rs.126,600,000/- and as such the difference between the carrying amount and the recoverable amount of Rs.94,950,000/has been recognized in the financial statements as impairment loss in year 2008/2009. Since BPL Teas (Pvt) Ltd (subsidiary)
has made a profit (net of tax) during the year and previous year amounting to Rs.42,388,646/- and Rs.63,737,492/-, respectively, and net asset position has been improved in past 3 years, board of directors has decided to reverse the impairment
provision made upto 50% of the total investment. Accordingly impairment provision of Rs. 31,650,000/- has been reversed
to the statement of comprehensive income during the year.
b)The following assumptions have been made when determining the recoverable amount:
i. The business activities of BPL Teas (Pvt) Ltd., will be drastically improved in the near future.
ii. Impairment is assumed to be limited to 75% of the investment made.
23.2 Investments in Equity Shares
Group
Percentage 2013/2014
2012/2013
Holding
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
Tea Trails (Pvt) Ltd
(1,500,000 Ordinary Shares of Rs.10/- Each)
6%
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
The Company has received 1,500,000 Ordinary Shares of Rs.10/= each free of charge from Tea Trails (Pvt) Ltd., as Promoter
Shares. Corresponding entry has been credited to the income statement in the year 2005/2006.
65
23. INVESTMENTS (Contd..)
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
23.3 Other Investments
23.3.1Quoted Shares
Commercial Bank Of Ceylon PLC
-
-
24,521
24,521
-
-
24,521
24,521
236,244,919
(19,765,994)
216,478,925
246,450,224
(26,368,931)
220,081,293
65,607,586
(2,528,639)
63,078,947
68,577,348
(9,131,576)
59,445,772
322,925,282
(452,129)
322,473,153
339,257,855
(10,846,630)
328,411,225
322,925,282
(452,129)
322,473,153
339,257,855
(10,846,630)
328,411,225
8,958,697
23,037,525
11,542,610
582,490,910
7,928,267
29,247,642
21,441,485
607,109,912
-
5,988,777
-
391,540,877
5,988,777
393,845,774
25. TRADE AND OTHER RECEIVABLES
Trade Receivables
316,866,455
Deposits, Prepayments and Other Receivables
46,644,607
Amount Receivable from Lalan Rubbers (Pvt) Ltd
Note 25.1 5,644,686
Amount Receivable from ASPIC Corporation (Pvt) Ltd Note 25.2 3,955,369
Amount Receivable from Walters Bay Tea Estates (Pvt) Ltd
911,620
Interest Receivable from Lalan Rubbers (Pvt) Ltd
6,388,872
Economic Service Charge Recoverable
16,941,070
VAT Receivable
29,177,408
Staff Advances
69,049,894
Advance Company Tax Recoverable
17,926,245
Withholding Tax Recoverable
6,171,957
Fair Trade
3,579,411
523,257,594
Less : Provision for Bad Debtors/Losses
(7,323,501)
515,934,093
280,135,996
40,310,676
11,991,726
4,906,163
7,643,751
6,388,872
44,550,390
49,281,409
67,970,320
17,926,245
5,275,088
3,881,580
540,262,216
(45,409,956)
494,852,260
78,878,747
31,187,364
5,644,686
3,955,369
911,620
6,388,872
14,407,455
9,359,645
68,983,756
17,926,245
6,171,957
-
243,815,716
(5,323,501)
238,492,215
84,083,194
27,129,894
11,991,726
4,906,163
7,643,751
6,388,872
40,942,454
30,103,584
67,827,464
17,926,245
5,275,088
304,218,435
(43,409,956)
260,808,479
24
INVENTORIES
Input Materials
Less : Provision for Obsolete and Damaged Items
Harvested Crops
Less : Provision for Harvested Crops
Finished Goods
Work-in-Progress
Goods in Transit
25.1 Amount Receivable from Lalan Rubbers (Pvt) Ltd
This includes the amount receivable for the following liabilities of the Rubber Division taken over by Lalan Rubbers (Pvt) Ltd.
(LRL), in terms of the Operating Agreement signed by the company and LRL on 19th March, 2003 and the amount receivable
in instalments as part payments for giving up operating rights and transfer of movable assets.
2013/2014
2012/2013
Rs.
Rs.
Long Term Loan Given to Lalan Rubbers (Pvt) Ltd
Note 25.1.1
5,644,686
11,991,726
5,644,686
11,991,726
The above balance remains as a liability of the company since the legal obligation of these remains with the company and it
will be changed annually in accordance with the settlements of loans.
66
25. TRADE AND OTHER RECEIVABLES (Contd…)
2013/2014
Rs.
2012/2013
Rs.
25.1.1Long Term Loan Given to Lalan Rubbers (Pvt) Ltd
Balance At the Beginning of the Year
Less : Payments Made During the Year
Balance At the End of the Year
11,991,726
(6,347,040)
5,644,686
20,540,166
(8,548,440)
11,991,726
25.2 Amount Receivable from ASPIC Corporation (Pvt) Ltd
This represents the amount receivable from ASPIC Corporation (Pvt) Ltd as part of consideration for giving up of all of the
operating rights relating to coconut cultivation of the Maliboda estate and Noori estate excluding an extent of approximately
152.32 hectares covered by forestry and timber planted and to be planted under ADB projects and an extent of approximately
2 hectares there of Noori Estate, Interests and transfer of movable assets.
As per second amendment to the operating agreement dated 31st May, 2011, Aspic Corporation (Pvt) Ltd requires to pay
an yearly payment of 9% plus VAT and NBT on the turnover of the said company from 01st April, 2011 to 21st June, 2045.
However, the operating agreement has been ceased during the year 2013/2014 and Anhettigama estate was taken over by
Bogawantalawa Tea Estates PLC.
Retiring Gratuity Liability
Consideration for the Operating Right Given
Note 25.2.1
2013/2014
Rs.
3,720,634
234,735
3,955,369
2012/2013
Rs.
3,720,634
1,185,529
4,906,163
25.2.1Consideration for the Operating Right Given
Add : Provision for the Year
Less : Payments Made During the Year
1,185,529
1,313,585
(2,264,379)
234,735
892,164
3,835,073
(3,541,708)
1,185,529
Group
26. AMOUNT DUE FROM RELATED PARTIES
2013/2014
2012/2013
Name of Related Party
Relationship
Rs.
Rs.
Walters Bay Bogawantalawa Tea Estates (Pvt) Ltd Related Entity
50,275,532
6,748,207
BPL Teas ( Pvt) Ltd
Subsidiary Company
-
-
Lanka Mother and Child Foundation
Related Entity
179,785
-
Eco Power (Pvt) Ltd
Related Company
115,626
246,165
Tea Trails (Pvt) Ltd
Related Company 1,463,753
808,804
Parent Entity
301,500
-
Metrocorp (Pvt) Ltd
Related Company
6,870
99,452
52,343,066
7,902,628
Company
2013/2014
2012/2013
Rs.
Rs.
-
1,042,673
179,785
115,626
1,463,753
301,500
6,870
3,110,207
21,127,135
246,165
808,804
99,452
22,281,556
67
27. CASH AND CASH EQUIVALENTS
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
27.1 Favourable Balances
Short Term Deposits
Cash in Hand
Cash in Transit
Cash at Bank
18,897,683
517,621
-
19,553,948
38,969,252
14,852,815
482,008
(660)
39,785,653
55,119,816
18,897,683
337,621
-
10,915,892
30,151,196
14,852,815
277,008
(660)
32,924,359
48,053,522
(95,643,718)
(50,437,570)
(11,484,131)
(20,574)
(56,674,466)
4,682,246
18,667,065
48,032,948
STATED CAPITAL
2013/2014
2012/2013
28.1 Number of Shares
No. of ordinary shares including one golden share held by the treasury
which has special rights.
Nos.
Nos.
83,750,001
83,750,001
Rs.
Rs.
586,250,010
586,250,010
27.2 Unfavourable Balances
Bank Overdrafts
Cash and Cash Equivalents for the
Purpose of Cash Flow Statement
28.
28.2 Value of Shares
Value of ordinary shares including the value of one golden share held by the treasury
which has special rights.
28.3 The Golden Shareholder
The Golden Share is currently held by Secretary to the Treasury and should be owned either directly by the Government of
Sri Lanka or by a 100% Government owned public Company. In addition to the rights of the normal ordinary shareholders, in
terms of the Articles of the Company, following special rights are vested with the Golden Shareholder.
a) The Company shall obtain the written consent of the Golden Shareholder prior to sub-leasing, ceding or assigning its
rights in part or all of the land leased/ to be leased to the Company by the JEDB/SLSPC.
b) The Golden Shareholder shall be entitled to call upon the Board of Directors once in three months to meet him or his
nominee to discuss matters of the Company to the state.
c)
The Golden Shareholder and his nominee shall be entitled to inspect the books of accounts of the Company after giving
two weeks written notice to the Company.
d) The Company should submit to the Golden Shareholder, within 60 days of the end of each quarter, a quarter report
relating to the performance of the Company during the said quarter in a pre-specified format agreed to by the Golden
Shareholder and the Company.
e) The Company shall submit the Golden Shareholder, within 90 days of the end of each fiscal year, information related to
the Company in a pre-specified format agreed to by the Golden Shareholder and the Company.
29.1.1.1National Development Bank PLC
Terms of
Repayments
Total
per Month
Facility
Loan No.
Rs.
Rs.
Term Loan 1LD0025000204
950,971
19,019,403
149,492
18,996,095
158,300
17,939,123
804,998
58,000,000
1,570,000 113,000,000
1,400,000
50,000,000
937,500
45,000,000
Term Loan 8
-
416,600
20,000,000
Term Loan 9 200,000,000
541,954,621
950,971
2,374,988
1,624,308
49,145,022
113,000,000
50,000,000
45,000,000
-
-
262,095,289
Balance
As At
01.04.2013
Rs.
-
-
-
-
-
-
-
20,000,000
200,000,000
220,000,000
-
-
-
-
-
-
-
-
-
-
(950,971)
(1,793,904)
(1,899,600)
(9,659,980)
(10,990,000)
(14,000,000)
(9,375,000)
-
-
(48,669,455)
New Revaluation
Loans
Exchange
Obtained
Gain/Loss Repayments
Rs.
Rs.
Rs.
29. INTEREST BEARING BORROWINGS
29.1 GROUP 2013/2014
2012/2013
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Repayable
Repayable
Repayable
Repayable
Balance
Repayable
Repayable
Repayable Repayable
within
within
after
after
As At
within
within
after
after
1 Year
2 - 5 Years
5 Years
1 Year 31.03.2014
1 Year
2 - 5 Years
5 Years
1 Year
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Term Loans 29.1.1 136,476,373 612,687,000
8,174,552 620,861,552 757,337,925
73,836,044
24,246,902
31,632,535 255,879,437
Balance
New Revaluation
As At
Loans
Exchange
01.04.2013
Obtained
Gain/ Loss Repayments
29.1.1Term Loans
Rs.
Rs.
Rs.
Rs.
National Development Bank PLC
Note
29.1.1.1 262,095,289 220,000,000
- (48,669,455)
DFCC Bank
Note
29.1.1.2
911,808
-
-
(911,808)
Commercial Bank of Ceylon PLC
Note
29.1.1.3
66,708,384 345,915,949
(206,794) (88,505,448)
329,715,481 565,915,949
(206,794) (138,086,711)
581,084
(275,292)
39,485,042
102,010,000
36,000,000
35,625,000
20,000,000
200,000,000
433,425,834
Balance
As At
31.03.2014
Rs.
433,425,834
323,912,091
757,337,925
Balance
As At
31.03.2014
Rs.
329,715,481
Balance
As At
31.03.2013
Rs.
68
(375)
1,636
375,614
189,980
2,491,132
458,513
8,295,160
1,842,207
1,024,992
874,090
4,676,740
2,192,338
1,163,972
3,379,298
5,613,869
2,822,588
2,770,236
2,765,120
13,489,576
462,543
8,250,000
3,569,155
-
-
-
-
66,708,384
Term Loan 1
37782
7,801
Term Loan 2
37781
27,075
Term Loan 3
55867
187,650
Term Loan 4
62458
23,635
Term Loan 5
68868
191,630
Term Loan 6
73236
46,940
Term Loan 7
96238
259,000
Term Loan 8
103688
51,175
Term Loan 9
299000
26,970
Term Loan 10
299000
18,590
Term Loan 11
299000
76,660
Term Loan 12
299000
59,250
Term Loan 13
369825
22,830
Term Loan 14
464637
57,270
Term Loan 15
489215
83,789
Term Loan 16
483152
42,128
Term Loan 17
476136
41,346
Term Loan 18
475256
41,270
Term Loan 19
514681
182,292
Term Loan 20
533762
6,903
Term Loan 21
461200
750,000
Term Loan 22
696961
USD 1,350
Term Loan 23
-
1,579,197
Term Loan 24
1528620
416,000
Term Loan 25
1588377
416,000
2,947,083
12,997,635
22,518,314
2,836,085
22,995,542
5,632,833
31,088,960
6,140,907
2,022,882
1,785,000
5,520,000
4,977,118
2,191,712
5,498,288
8,043,750
4,044,300
3,969,270
3,961,950
17,500,000
662,730
45,000,000
6,531,300
30,000,000
20,000,000
75,000,000
-
343,865,659
Balance
As At
01.04.2013
Rs.
911,808
911,808
Balance
As At
01.04.2013
Rs.
Term Loan29974 & 29975
75,984
13,677,680
13,677,680
Terms of
Repayments
Total
per Month
Facility
29.1.1.3Commercial Bank of Ceylon PLC
Loan No.
Rs.
Rs.
29. INTEREST BEARING BORROWINGS (Contd...)
Terms of
Repayments
Total
per Month
Facility
29.1.1.2DFCC Bank
Loan No.
Rs.
Rs.
-
-
(911,808)
(911,808)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,300,873
20,000,000
75,000,000
220,615,076
345,915,949
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
117,263
-
-
-
(324,057)
(206,794)
-
-
(375,300)
(188,800)
(2,299,560)
(563,280)
(3,108,000)
(614,100)
(323,640)
(223,080)
(919,920)
(711,000)
(273,960)
687,240)
(1,005,468)
(505,536)
(496,152)
(495,240)
(2,187,504)
(82,836)
(8,250,000)
(2,084,468)
(18,950,364)
(4,160,000)
(40,000,000)
-
(88,505,448)
New Revaluation
Loans
Exchange
Obtained
Rs.
Rs.
Rs.
-
-
New Revaluation
Loans
Exchange
Obtained
Rs.
Rs.
Rs.
(375)
1,636
314
1,180
191,572
(104,767)
5,187,160
1,228,107
701,352
651,010
3,756,820
1,481,338
890,012
2,692,058
4,608,401
2,317,052
2,274,084
2,269,880
11,302,072
379,707
1,601,950
11,350,509
15,840,000
35,000,000
220,291,019
323,912,091
Balance
As At
31.03.2014
Rs.
-
Balance
As At
31.03.2014
Rs.
69
29.2 COMPANY
2013/2014
Amount
Amount
Amount
Amount
Amount
Amount
Repayable
Repayable
Repayable
Repayable
Balance
Repayable
Repayable
within
within
After
After
As At
within
within
1 Year
2 - 5 Years
5 Years
1 Year 31.03.2014
1 Year
2 - 5 Years
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Term Loans 29.2.1 102,262,315 374,168,089
8,174,552 382,342,641 484,604,956
64,431,814 221,831,977
Balance
As At
01.04.2013
29.2.1Term Loans
Rs.
29.2.1.1 262,095,289
DFCC Bank
29.2.1.2
911,808
29.2.1.3
54,889,229
317,896,326
Terms of
Balance
Repayments
Total
As At
per Month
Facility 01.04.2013
29.2.1.1National Development Bank PLC
Loan No.
Rs.
Rs.
Rs.
950,971
19,019,403
950,971
149,492
18,996,095
2,374,988
158,300
17,939,123
1,624,308
804,998
58,000,000
49,145,022
1,570,000 113,000,000 113,000,000
1,400,000
50,000,000
50,000,000
937,500
45,000,000
45,000,000
416,600
20,000,000
-
Securitization Loan
-
- 200,000,000
-
541,954,621 262,095,289
317,896,326
Balance
As At
31.03.2014
Rs.
433,425,834
51,179,122
484,604,956
Balance
As At
31.03.2014
Rs.
581,084
(275,292)
39,485,042
102,010,000
36,000,000
35,625,000
20,000,000
200,000,000
433,425,834
253,464,512
31,632,535
New
Loans
Obtained Repayments
Rs.
Rs.
220,000,000 (48,669,455)
-
(911,808)
30,300,873 (34,010,980)
250,300,873 (83,592,243)
New
Loans
Obtained Repayments
Rs.
Rs.
-
(950,971)
-
(1,793,904)
-
(1,899,600)
-
(9,659,980)
- (10,990,000)
- (14,000,000)
-
(9,375,000)
20,000,000
-
200,000,000
-
220,000,000 (48,669,455)
Balance
As At
31.03.2013
Rs.
Repayable
After
1 Year
Rs.
2012/2013
Amount
Repayable
After
5 Years
Rs.
70
Term Loan 1
37782
7,801
Term Loan 2
37781
27,075
Term Loan 3
55867
187,650
Term Loan 4
62458
23,635
Term Loan 5
68868
191,630
Term Loan 6
73236
46,940
Term Loan 7
96238
259,000
Term Loan 8
103688
51,175
Term Loan 9
299000
26,970
Term Loan 10
299000
18,590
Term Loan 11
299000
76,660
Term Loan 12
299000
59,250
Term Loan 13
369825
22,830
Term Loan 14
464637
57,270
Term Loan 15
489215
83,789
Term Loan 16
483152
42,128
Term Loan 17
476136
41,346
Term Loan 18
475256
41,270
Term Loan 19
514681
182,292
Term Loan 20
533762
6,903
Term Loan 21
1,579,197
Assets pledged details are given in note 47 to the financial statements.
2,947,083
12,997,635
22,518,314
2,836,085
22,995,542
5,632,833
31,088,960
6,140,907
2,022,882
1,785,000
5,520,000
4,977,118
2,191,712
5,498,288
8,043,750
4,044,300
3,969,270
3,961,950
17,500,000
662,730
30,000,000
197,334,359
911,808
911,808
Term Loan 29974 & 29975
75,984
13,677,680
13,677,680
Terms of
Repayments
Total
per Month
Facility
29.2.1.3Commercial Bank of Ceylon PLC
Loan No.
Rs.
Rs.
(375)
1,636
375,614
189,980
2,491,132
458,513
8,295,160
1,842,207
1,024,992
874,090
4,676,740
2,192,338
1,163,972
3,379,298
5,613,869
2,822,588
2,770,236
2,765,120
13,489,576
462,543
-
54,889,229
Balance
As At
01.04.2013
Rs.
New
As At
01.04.2013
Rs.
Balance
Total
Facility
Rs.
Terms of
Repayments
per Month
29.2.1.2DFCC Bank
Loan No.
Rs.
(911,808)
(911,808)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,300,873
30,300,873
-
-
(375,300)
(188,800)
(2,299,560)
(563,280)
(3,108,000)
(614,100)
(323,640)
(223,080)
(919,920)
(711,000)
(273,960)
(687,240)
(1,005,468)
(505,536)
(496,152)
(495,240)
(2,187,504)
(82,836)
(18,950,364)
(34,010,980)
New
Loans
As At
Obtained Repayments
Rs.
Rs.
-
-
Balance
Loans
As At
Obtained Repayments
Rs.
Rs.
(375)
1,636
314
1,180
191,572
(104,767)
5,187,160
1,228,107
701,352
651,010
3,756,820
1,481,338
890,012
2,692,058
4,608,401
2,317,052
2,274,084
2,269,880
11,302,072
379,707
11,350,509
51,179,122
31.03.2014
Rs.
Balance
-
31.03.2014
Rs.
71
12,758,439
24,176,451
37,773,764
2012/2013
Amount
Repayable
within
1 Year
Rs.
2013/2014
Amount
Repayable
Balance
after
As At
1 Year
31.03.2014
Rs.
Rs.
24,357,912
Amount
Repayable
within
2 - 5 Years
Rs.
-
Amount
Repayable
after
5 Years
Rs.
24,357,912
Repayable
after
1 Year
Rs.
30.1.2 Finance Charges Allocated to Future Years
Balance
On New
Description of
As At
Leases
Class of Asset
Facility Number
Asset
Name of Lease Creditor 01.04.2013
Obtained
Rs.
Rs.
Motor Vehicles
11/PF-IP/AH/3160
01 Double Cab
NDB Bank PLC
615,500
-
V/12/003/4038
04 Toyota Hilux Cabs Commercial Bank of Ceylon PLC
3,374,620
-
13/PF/DIV III/NS/6859 03 Toyota Hilux Cabs NDB Bank PLC
-
2,437,314
3,990,120
2,437,314
Plant and Machinery 09/003/3227
01 Colour Separator
218,575
-
E/09/003/3282
01 Drier
1,946,396
-
E/09/003/3436
01 Generator
258,667
-
E/11/003/3473
01 Air Heater
460,169
-
FCO 11/1142
Machinery
1,491,573
4,375,380
-
Total Finance Charges Allocated to Future Years
8,365,500
2,437,314
Net Carrying Value of Liability to Make Lease Payments 37,116,350
-
37,773,764
5,296,377
819,567
1,819,372
5,233,944
13,169,260
Net
Carrying
Value
Rs.
1,986,533
9,227,550
13,390,421
24,604,504
37,116,351
Balance
As At
31.03.2013
Rs.
747,483
36,001
114,113
682,998
1,580,595
6,105,077
37,773,764
(218,575)
(1,198,913)
(222,666)
(346,056)
(808,575)
(2,794,785)
(4,697,737)
-
Interest
Balance
Written
As At
Off 31.03.2014
Rs.
Rs.
(280,005)
335,495
(1,344,000)
2,030,620
(278,947)
2,158,367
(1,902,952)
4,524,482
30.1.1 Gross Liability
Terms of
Balance
New
Balance
Repayment
Facility
As At
Leases
As At
Description of per Month
Amount 01.04.2013
Obtained Repayments 31.03.2014
Class of Asset
Facility Number
Asset
Name of Lease Creditor
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Motor Vehicles
11/PF-IP/AH/3160
01 Double Cab
NDB Bank PLC
72,563
7,612,726
3,192,788
-
(870,760)
2,322,028
V/12/003/4038
268,052 16,083,100 14,474,790
- (3,216,620) 11,258,170
V/08/003/3172
Motor Vehicle
45,822
1,649,592
46,474
-
(46,474)
-
353,382 16,962,314
- 16,962,314 (1,413,526) 15,548,788
42,307,732 17,714,052 16,962,314 (5,547,380) 29,128,986
01 Colour Separator
515,092 24,724,416
3,605,644 (3,605,644)
-
E/09/003/3282
01 Drier
302,193 18,131,580
9,670,176 (3,626,316)
6,043,860
E/09/003/3436
01 Generator
106,946
5,133,408
2,245,866 (1,390,298)
855,568
E/11/003/3473
01 Air Heater
128,899 10,958,253
3,480,273 (1,546,788)
1,933,485
FCO 11/1142
Machinery
219,146 13,148,760
8,765,840 (2,848,898)
5,916,942
72,096,417 27,767,799
- (13,017,944) 14,749,855
Total Gross Liability 45,481,851 16,962,314 (18,565,324) 43,878,841
30.
LIABILITY TO MAKE LEASE PAYMENTS
30.1 GROUP
Amount
Amount
Amount
Repayable
Repayable
Repayable
within
within
after
1 Year
2 - 5 Years
5 Years
Rs.
Rs.
Rs.
Liability to make
lease payments
13,597,313
24,176,451
-
72
18,918,878
Motor Vehicles
11/PF-IP/AH/3160
01 Double Cab
NDB Bank PLC
V/12/003/4038
01 Colour Separator
E/09/003/3282
01 Drier
E/09/003/3436
01 Generator
E/11/003/3473
01 Air Heater
Total Finance Charges Allocated to Future Years
Net Carrying Value of Liability to Make Lease Payments
5,296,377
819,567
1,819,372
7,935,316
32,539,820
1,986,533
9,227,550
13,390,421
24,604,504
Net
Carrying
Value
Rs.
29,795,610
Balance
As At
31.03.2013
Rs.
2,437,314
14,525,000 (11,780,790)
6,873,927
29,795,610
(3,889,162)
(218,575)
(1,198,913)
(222,666)
(346,056)
(1,986,210)
-
-
-
-
-
218,575
1,946,396
258,667
460,169
2,883,807
(280,005)
(1,344,000)
(278,947)
(1,902,952)
32,539,820
5,422,079
747,483
36,001
114,113
897,597
335,495
2,030,620
2,158,367
4,524,482
Interest
Balance
Written
As At
Off 31.03.2014
Rs.
Rs.
-
-
2,437,314
2,437,314
On New
Leases
Obtained
Rs.
-
6,043,860
855,568
1,933,485
8,832,913
37,961,899
2,322,028
11,258,170
15,548,788
29,128,986
615,500
3,374,620
-
3,990,120
30.2.2 Finance Charges Allocated to Future Years
Balance
Description of
As At
Class of Asset
Facility Number
Asset
Name of Lease Creditor 01.04.2013
Rs.
(870,760)
(3,216,620)
(1,413,526)
(5,500,906)
- (3,605,644)
- (3,626,316)
- (1,390,298)
- (1,546,788)
- (10,169,046)
16,962,314 (15,669,952)
-
3,605,644
9,670,176
2,245,866
3,480,273
19,001,959
36,669,537
18,918,878
-
-
16,962,314
16,962,314
10,876,732
3,192,788
14,474,790
-
17,667,578
32,539,820
Repayable
after
1 Year
Rs.
Motor Vehicles
11/PF-IP/AH/3160
01 Double Cab
NDB Bank PLC
72,563
7,612,726
V/12/003/4038
268,052 16,083,100
353,382 16,962,314
40,658,140
01 Colour Separator
515,092 24,724,416
E/09/003/3282
01 Drier
302,193 18,131,580
E/09/003/3436
01 Generator
106,946
5,133,408
E/11/003/3473
01 Air Heater
128,899 10,958,253
58,947,657
Total Gross Liability
21,106,086
2012/2013
Amount
Repayable
after
5 Years
Rs.
New
Balance
Leases
As At
Obtained Repayments 31.03.2014
Rs.
Rs.
Rs.
-
2013/2014
Amount
Amount
Amount
Amount
Repayable
Repayable
Balance
Repayable
Repayable
after
after
As At
within
within
5 Years
1 Year
31.03.2014
1 Year
2 - 5 Years
Rs.
Rs.
Rs.
Rs.
Rs.
30.2.1 Gross Liability
Terms of
Balance
Repayment
Facility
As At
Description of per Month
Amount 01.04.2013
Class of Asset
Facility Number
Asset
Name of Lease Creditor
Rs.
Rs.
Rs.
30.
LIABILITY TO MAKE LEASE PAYMENTS (Contd…)
30.2 COMPANY
Amount
Amount
Repayable
Repayable
within
within
1 Year
2 - 5 Years
Rs.
Rs.
Liability to Make
Lease Payments
11,433,734
21,106,086
73
74
31. RETIREMENT BENEFIT OBLIGATIONS
Balance at the Beginning of the Year
Provision for the Year
Note 31.1
Payable to Bolted Workers
Payments Made During the Year
Group
2013/2014
2012/2013
Rs.
Rs.
639,342,192
741,767,925
112,862,331
74,149,296
752,204,523
815,917,221
-
(77,844,060)
(57,417,381)
(98,730,969)
694,787,142
639,342,192
Company
2013/2014
2012/2013
Rs.
Rs.
625,520,246
729,897,623
108,907,319
70,950,228
734,427,565
800,847,851
-
(77,844,060)
(56,940,681)
(97,483,545)
677,486,884
625,520,246
31.1Expenses recognized in the statement of comprehensive income and other comprehensive income for the year ended 31st
March, 2014.
Group
Company
2013/2014
2013/2014
Rs.
Rs.
Current Service Cost
71,294,022
68,802,153
Interest Cost
40,034,334
38,571,191
Actuarial Loss
1,533,975
1,533,975
112,862,331
108,907,319
Interest cost and actuarial gain/loss could not be estimated in previous year as actuarial valuation or estimation of the gratuity
liability of the company has not been done as at 31st March, 2012.
31.2Provision for gratuity for the financial year 2013/2014 has been determined based on the latest actuarial valuation report issued
on 29/05/2014 which was done by Actuarial & Management Consultants (Pvt) Ltd. The provision in respect of gratuity liabilities
of existing employees as at 31st March, 2014 is Rs.677,486,884/- (company). If the company had provided for gratuity on the
basis of fourteen days wages and half month salary for each completed years of service in line with the payment of Gratuities
Act No. 12 of 1983, the liability would have been Rs. 925,281,165/-. Hence, there is a contingent liability of Rs.247,794,281/which would crystallize only if the Group ceases to be a going concern.
31.3The key assumptions used by the actuary are disclosed in the note 3.17.1 to the financial statements.
31.4Sensitivity Analysis
In order to illustrate the significance of the salary/wage escalation and discount rate used in the actuarial valuation as at 31st
March, 2014, sensitivity analysis has been carried out as follows:
Present Value of Defined
Discount Rate
Salary Escalation Rate
Benefit Obligation (Rs.)
1% Increase
As given in the report
627,410,924
1% Decrease
735,129,226
1% Increase
705,890,608
1% Decrease
650,775,547
31.5Even though the group policy for recognizing the gratuity provision is the actuarial valuation, BPL Teas (Pvt) Ltd (Subsidiary)
has not adopted the group policy and provision for gratuity has been calculated based on the formula method. However, the
effect for not applying the actuarial valuation (subsidiary) is not material to the group as at the date of the statement of financial
position.
32. GRANTS AND SUBSIDIES - (GROUP/COMPANY)
Grants and Subsidies Received During the Year
Total Grants and Subsidies Available for Amortization
Amortization For the Year
2013/2014
Rs.
169,439,632
3,061,618
172,501,250
(8,839,140)
163,662,110
2012/2013
Rs.
178,470,759
178,470,759
(9,031,127)
169,439,632
32.1The Above Represents the Following:
a) Asian Development Bank - Plantation Development Project
The funds received are utilized for rehabilitation (tarring and concreting) of internal roads and minor upgrading of tea
factories.
b) Plantation Human Development Project
The funds are utilized for reroofing of worker houses, development of workers welfare facilities and improvement of
institutional facilities.
c) The funds received from the Tea Board is for the construction of the CTC Tea Factory at Wanarajah and Kotiyagala Grounds.
The amounts spent are capitalized under the relevant classification of Property, Plant and Equipment and the corresponding
grant component is reflected under differed grants and subsidies and amortized over useful life span of the asset.
75
2013/2014
Rs.
2012/2013
Rs.
33. DEFERRED INCOME - (GROUP/COMPANY)
Net Income from Operating Rights Given to Lalan Rubbers (Pvt) Ltd
33.1
Net Income from Operating Rights Given to ASPIC Corporation (Pvt) Ltd
33.2
290,820,657
-
290,820,657
300,201,968
13,739,069
313,941,037
33.1
Net Income from Operating Rights Given to Lalan Rubbers (Pvt) Ltd
Gross Carrying Amount At the Beginning of the Year
Net Carrying Amount At the End of the Year
300,201,968
(9,381,311)
290,820,657
309,583,279
(9,381,311)
300,201,968
33.2
Net Income from Operating Rights Given to ASPIC Corporation (Pvt) Ltd
Gross Carrying Amount At the Beginning of the Year
Transferred to Other Payable
33.2.1
Net Carrying Amount At the End of the Year
13,739,069
(416,336)
(13,322,733)
-
14,155,405
(416,336)
13,739,069
33.2.1Deferred income from operating rights given to ASPIC Corporation (Pvt) Ltd has been transferred to other payable since
operating lease agreement with ASPIC Corporation (Pvt) Ltd has been ceased during the year.
34. NET LIABILITY TO LESSOR OF JEDB/SLSPC ESTATES - (GROUP/COMPANY)
Gross Liability
Finance Charges
Net Liability
The above reassessed liability is not reflected in these financial statements.
2013/2014
34.1 Gross Liability
Rs.
Amount
Rs.
5,926,463,890
4,744,135,105
1,182,328,785
2012/2013
Rs.
Less : Repayments During the Year
948,993,660
(29,426,160)
919,567,500
978,419,820
(29,426,160)
948,993,660
34.2
Finance Charges Allocated to Future Periods
Less : Finance Charges Written Off During the Year
421,067,627
(21,117,042)
399,950,585
442,504,251
(21,436,624)
421,067,627
34.3 Net Liability As At the End of the Year
519,616,915
527,926,033
34.4.1Amount Payable within One Year
Gross Liability
Finance Costs Allocated to Future Years
Net Liability Shown Under Current Liabilities
29,426,160
(20,784,677)
8,641,483
29,426,160
(21,117,043)
8,309,117
34.4.2Amount Payable after One Year and Less than Five Years
Gross Liability
Net Liability
117,704,640
(79,541,065)
38,163,575
117,704,640
(81,008,894)
36,695,746
34.4.3Amount Payable after Five Years
Gross Liability
Net Liability
772,436,700
(299,624,843)
472,811,857
801,862,860
(318,941,690)
482,921,170
510,975,432
519,616,916
34.4.5Total Net Liability
519,616,915
527,926,033
34.4 Maturity Analysis
34.4.4Net Liability Payable after One Year Shown Under Non-current Liabilities
76
34.
NET LIABILITY TO LESSOR OF JEDB/SLSPC ESTATES - (GROUP/COMPANY) (Contd…)
34.4 Maturity Analysis (Contd…)
2013/2014
2012/2013
Rs.
Rs.
34.4.6The contingent rental of Rs.54,120,630/- has been recovered from Lalan Rubber (Pvt) Ltd, ASPIC Corporation (Pvt) Ltd and
Walters Bay Tea Estates (Pvt) Ltd as per operating agreements entered into with parties concerned and balance contingent
rental of Rs. 7,336,612/- has been charged to statement of comprehensive income during the year and is based on GDP
deflator of 8.9% (2012).
34.4.7The Statement of Recommended Practice (SoRP) for Right-to-use of Land on Lease was approved by the council of the
Institute of Chartered Accounts of Sri Lanka on 19th December, 2012. Subsequently, the amendments to the SoRP along
with the modification to the title as Statement of Alternative Treatment (SoAT) were approved by the council on 21st August,
2013. The company has not reassessed the Right-to-use of Land because this is not mandatory requirement. However, if
the liability is reassessed according to the alternative treatment (SoAT) on the assumption that the lease rent is increased
constantly by GDP deflator of 4% and discounted at a rate of 11%, liability would be as follows:
35.
REDEEMABLE DEBENTURES (GROUP/COMPANY)
Redemption During the Year
75,000,000
(25,000,000)
50,000,000
100,000,000
(25,000,000)
75,000,000
Current Maturity
25,000,000
25,000,000
Long Term Portion
25,000,000
50,000,000
During the financial year 2009/2010 the company has issued Rs. 100Mn worth of Redeemable Debentures to the Plantation
Trust Fund on 27th July, 2009. Further, details are given in the table below:
Debenture Agreement Ref.
Par Value
No of
Maturity
Interest Rs. Debentures
Period
Rate
Issued
Debenture 2014 A
25,000,000
01 Redeemable in 5 years from 15.33 % p.a
the date of subscription
Debenture 2014 B
25,000,000
01
Redemption shall be on 15.58 % p.a
or before 30th June, 2015
Group
Company
36. TRADE AND OTHER PAYABLES
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
Trade Creditors
215,666,894
221,745,720
138,072,157
149,802,946
Note 36.1
78,030,404
77,844,060
78,030,404
77,844,060
Accruals and Other Payables
245,762,308
238,152,927
214,986,481
204,232,543
Rental Payable - JEDB/SLSPC
10,569,932
14,271,536
10,569,932
14,271,536
550,029,538
552,014,243
441,658,974
446,151,085
Group
Company
2013/2014
2013/2014
36.1 Payable to Bolted Workers
Rs.
Rs.
Balance at the Beginning of the Year
77,844,060
77,844,060
Provision Made During the Year
5,148,595
5,148,595
Payment Made During the Year
(4,962,251)
(4,962,251)
78,030,404
78,030,404
37. AMOUNTS DUE TO RELATED PARTIES
Ceylon Tea Gardens Limited
38.
1,670,834
24,856,569
26,527,403
1,670,834
25,292,153
26,962,987
-
24,856,569
24,856,569
25,292,153
25,292,153
CONTINGENT LIABILITIES AND CONTINGENT ASSETS
38.1 Contingent Liabilities
The contingencies in respect of pending litigations in Labour Tribunals are not expected to crystallize in a material liability to
the Company/ Group and no other contingent liabilities exist as at the date of the statement of financial position other than
those disclosed in Note 31.2 to the financial statements and circumstances disclosed below:
a)
b)
The Company has provided a corporate Guarantee on behalf of BPL Teas (Pvt) Ltd amounting to US $ 1,685,000/- and
Rs.25,000,000/- to Commercial Bank of Ceylon PLC.
As per the assessment (dated 11.06.2012) issued to the Company by the Department of Inland Revenue amounting
to Rs. 20.5 Mn additional VAT liability would crystallize. The tax appeal no. TAC/VAT/04/2014 has been made by the
company and appeal has been fixed for hearing on 05th August, 2014.
38.2 Contingent Assets
There is no contingent asset as at the reporting date.
77
39
UNRECOGNIZED CONTRACTUAL COMMITMENTS
There have been no capital commitments contracted but not provided for, or authorized by the board but not contracted
for, outstanding as at the date of the statement of financial position.
40.
RELATED PARTY DISCLOSURES
40.1 Substantial Shareholding and Ultimate Parent Company
The company is a subsidiary of Metropolitan Resource Holdings PLC, which holds 67.35% of ordinary shares of the company.
In the opinion of the directors, the company’s ultimate parent company as at the date of Statement of Financial Position is
Metropolitan Resource Holdings PLC.
40.2 Key Management Personnel Information
The Directors of the company have Interest in the transactions detailed below and some directors held the post of Directors of
such related companies during the year. The transactions listed below have been carried out under normal commercial terms.
Mr. D. J. Ambani, Mr. C. M. O. Haglind, Mr. L. J. Ambani, Mr. S. A. S. Jayasundara and Mr. J. Molligoda, the directors of the
company are also directors of the following companies and have had transactions as disclosed in Note 40.3.1 below.
40.3 Related Party Transactions
The company has a related party relationship with its related group companies as disclosed below. The following transactions
have been carried out with related parties during the year ended 31st March, 2014 under normal commercial terms.
40.3.1Transactions With Companies in Which Directors of the Company Hold Other Directorships
The Company has carried out transactions with entities where the Chairman or a Director of the Company is the Chairman or
a Director of such entities as detailed below:
40.3.1.1Transactions with Ultimate Parent Company
Name of the Ultimate
Parent Company
Name of Directors Relationship Nature of Transaction
Metropolitan Resource Mr.D.J. Ambani
Chairman
Holdings PLC. (MRH). Mr. L.J.Ambani
Director
Mr.C.M.O.Haglind Director
Mr.S.A.S.JayasundaraDirector
Mr. J. Molligoda
Director
Management fees paid 24,228,544
(including VAT and NBT)
Settlements of outstanding.
1,545,083
Expenses incurred by the
company on behalf of MRH.
1,846,583
11,792,159
40.3.1.2Transactions with Other Related Companies
Name of the
Company
Ceylon Tea Gardens
Limited. (CTGL)
Mr. D. J. Ambani
Mr. L. J. Ambani
Chairman
Director
BPL Teas ( Pvt) Mr. D. J. Ambani
Chairman
Limited. (BPL)
Mr. C.M.O. Haglind Director
Mr. L. J. Ambani
Director
Mr. J. Molligoda
Director
Amounts
2013/2014
2012/2013
Rs.
Rs.
Expenses incurred by the
company on behalf of CTGL.
Amounts
2013/2014
2012/2013
Rs.
Rs.
435,584
173,382
Funds receiving as 23,399,177
36,591,700
reimbursement of expenses
made by the company.
Expenses incurred
2,538,903
438,589
by the company.
Interest received against 775,812
2,706,825
the outstnding.
Funds Transfers
-
17,000,000
Transfer of tangible assets
-
7,159,170
and finished goods.
Issue of corporate guarantees on
behalf of BPL Teas (Pvt) Ltd amounting
to US $ 1,685,000 and Rs.25,000,000/to Commercial Bank of Ceylon PLC.
78
40. RELATED PARTY DISCLOSURES (Contd…)
40.3.1.2Transactions with Other Related Companies (Contd…)
Name of the Company
Amounts
2013/2014
2012/2013
Rs.
Rs.
Metrocorp (Pvt) Mr. D. J. Ambani
Chairman
Reimbursement of Rent and
-
Ltd. (MPL)
Administration Expenses.
Mr. L. J. Ambani
Director
Expenses incurred by the 1,450,204
company.
Funds receiving against the 1,542,786
expenses incurred by the
company.
Tea Trails (Pvt) Ltd. Mr. D. J. Ambani
Director
Income received for renting
7,412,357
(TTPL)
out bungalows (Including VAT and NBT).
Revenue share income 10,858,117
(Including VAT and NBT).
Settlements made by TTPL.
17,615,525
Eco Power (Pvt) Ltd. Mr. D. J. Ambani
Chairman
Revenue share income 4,609,278
(EPPL)
Mr. L. J. Ambani
(Including VAT and NBT).
Director
Settlements made by EPPL.
4,739,817
40.3.1.3Subsidiary - BPL Teas (Pvt) Ltd
Amounts
Name of the
2013/2014
Company
Rs.
1,528,730
98,734
104,737
6,326,283
6,916,708
1,075,844
2,660,892
-
2012/2013
Rs.
Metropolitan
Mr. D. J. Ambani
Ultimate
Management fees paid. 3,751,406
Resource
Mr. L. J. Ambani
Parent
(including VAT and NBT)
Holdings PLC
Mr. C. M. O. Haglind
Mr. J. Molligoda
Walters Bay Mr. D. J. Ambani
Director
Expenses incurred on behalf 10,995,724
2,000,000
Bogawantalawa Tea Mr. J. Molligoda
Director
of WBBTE.
Estates (Pvt) Ltd.
(WBBTE)
Purchase of tea on behalf
14,909,705
4,748,207
of WBBTE
Royalty fee received from
33,827,759
WBBTE
40.3.2Transactions with Key Management Personnel ( KMP ) of the Company or Parent
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the company as well as its related parties, directly or indirectly, including any director (whether executive or
otherwise) of the company.
a)
Loans to Directors
No loans have been given to the directors of the company and its parent company.
b)
Compensation to Key Management Personnel
Group
2013/2014
2012/2013
Rs.
Rs.
Company
2013/2014
2012/2013
Rs.
Rs.
Short-Term Employment Benefits
14,669,080
14,669,080
c)
Group has not incurred any amount as termination benefits or post employment benefits on account of the Key Managerial
Personnel during the year.
7,784,125
40.3.3Amounts receivable and payable to related parties are disclosed in Notes 26 and 37 to the financial statements.
7,784,125
79
41. OPERATING AGREEMENT WITH LALAN RUBBERS (PVT) LTD
The Company has entered into an Operating Agreement (OA) with Lalan Rubbers (Pvt) Ltd., (LRL) effective from 19th March,
2003 whereby LRL will operate and manage the Rubber Division of the Company from 01st April, 2003. Consequently, LRL
will meet all capital and operating costs of the Rubber Division from 01st April, 2003 and will be entitled to keep all revenues
obtained by the Division from that date.
As per the terms of the OA, LRL will make a payment of approximately Rs 278.25 million to Bogawantalawa Tea Estates PLC (BTE
PLC) in consideration for the operating rights obtained and of which Rs.120 million has been received in the year 2002/2003.
LRL were required to pay the Company a further three payments of Rs. 52.75 million each on or before 15th March, 2004, 2005
and 2006 respectively. These amounts have been received by the company.
LRL has also taken over the retiring gratuity liability of employees of the Rubber Division estimated at Rs.46.8 million (at
actuarial value), the capital and future interest payments of the long term loans of Rs.105.3 million payable to the Commercial
Bank of Sri Lanka and 48.21 % of the future annual land lease payments that are required to be made by BTE PLC to Janatha
Estate Development Board (JEDB) and Sri Lanka State Plantations Corporation (SLSPC) until the terms of these leases expire.
Accordingly, the retiring gratuity liability of Rs.46 8 million and the long term loans of Rs.105.3 million have been treated as
amounts due from LRL and recognized as income during the year 2002/2003 as LRL has agreed to pay these liabilities on behalf
of the Company.
The Secretary, Ministry of Plantation industries (letter Ref. MP1/9/2/6/9 BPL/SL dated 10th February, 2010 addressed to the
Company) informed the company that the Golden shareholder has granted covering approval to sub lease of the 13 rubber
estates which have been transferred to Lalan Rubbers (Pvt) Ltd under the operating agreement in 2003 without prior approval
of the Golden Shareholder. Accordingly, the company has entered into a sublease agreement with Lalan Rubbers (Pvt) Ltd
on 12th February, 2010, and a further payment of Rs. 110 million has been made by Lalan Rubbers (Pvt) Ltd to the Company.
However, all the assets and liabilities pertaining to those estates subleased to Lalan Rubbers (Pvt) Ltd continue to be reflected
in the books of the company (other than Gratuity Liability) as this is considered an operating lease.
In addition to the above sub leasing transaction, company has entered into another sub leasing transaction with LRL based on
a MOU during the financial year of 2012/2013 as described bellow. However, still the approval from the Golden Shareholder has
not been received in this regard as at the date of the Statement of Financial Position.
The Company has entered into a Memorandum of Understanding (MOU) with Lalan Rubbers (Pvt) Ltd, (LRL) effective from
01st October, 2012 and up to 21st June, 2045 whereby LRL will operate and manage a total area approximately of 973 hectares
comprising Anhettigama, Miyanawita and Maliboda estates. Consequently, LRL will be responsible for all day to day operations
of the properties. However, all the movable assets in the properties shall remain the property of BTE PLC.
As per the terms of the MOU, during the initial period of 5 years of this MOU, LRL shall invest a sum equivalent to Rupees Three
Hundred and Sixty Six Million (Rs 366,000,000/-) for the purpose of developing the properties by tea/rubber replanting, tea/
rubber new planting and undertaking agricultural programs according to the initial plan. For and in consideration for the rights
of Usufruct granted to LRL in respect of the properties, LRL shall pay to BTE a sum calculated by reckoning the amount payable
in respect of the extent of land comprising the properties as a fraction of the total sum of money payable by BTE in terms of the
said Indenture bearing No 1524, as rental for the entirety of the extent of land leased to the BTE by the Lessor viz. Nine Hundred
and seventy Three (973) hectares out of Sixteen Thousand Two Hundred and Twenty (16220) hectares viz:- 973/16220;
A further sum calculated in the following manner shall be paid by LRL to BTE PLC;
Having deducted the lease rental as aforesaid, if the use of the Properties by LRL yields a profit in LRL calculated in accordance
with Sri Lanka Accounting Standards and applicable law, a sum equivalent to 45% of the said profit after deducting any previous
losses incurred through the use of the properties; and a sum equivalent to 25% of the effective tax benefits received by LRL with
regard to the capital allowances connected to the project.
80
42. OPERATING AGREEMENT WITH ASPIC CORPORATION (PVT) LTD
The Company has entered into an Operating Agreement (OA) with ASPIC Corporation (Pvt) Ltd, (ASPIC) & Deraniyagala Tea
Estates Ltd (DTEL) effective from 16th March, 2006 whereby ASPIC will operate and manage the Noori Estate excluding an
extent of approximately 152.32 hectares covered by forestry and timber planted and to be planted under ADB projects and
an extent of approximately 2 hectares thereof; and the coconut cultivation of the Maliboda Estate of the Company from 16th
March, 2006. Consequently, ASPIC will meet all capital and operating costs of those estates from 16th March, 2006 and will be
entitled to keep all revenues obtained by the estates from that date.
As per the terms of the OA, ASPIC will make an initial payment of Rs.500,000/= to Bogawantalawa Tea Estates PLC (BTE PLC) in
consideration for the operating rights obtained and of which the initial payment has been received during the year 2005/2006.
ASPIC are required to pay the Company the following amounts before the due dates. Initial payment of Rs.500,000/= at the
time of execution of the agreement and a payment of Rs.3.5 million on or before 31st January, 2007 and four payments of
Rs.4 Million each on or before 31st January, 2008, 2009, 2010 and 2011. Meanwhile ASPIC is required to pay 4.8% of the future
annual land lease payments that are required to be made by BTE PLC to Janatha Estate Development Board (JEDB) until the
terms of these leases expire. The first payment of Rs.4 Million due on 31st January, 2008 was received by the Company. As per
the amendment to the operating agreement dated 11th January, 2008, the above installment payments were amended as
follows. 3 minimum payments of Rs.4 Million each on or before 31st January, 2009, 31st January, 2010 and 31st January, 2011
or 10% of the turnover of the company whichever is higher.
As per second amendment to the operating agreement dated 31st May, 2011 DTEL requires to pay on yearly payment of 9%
plus VAT and NBT on the turnover of the said company from 01st April, 2011 to 21st June, 2045.
The operating agreement was terminated on 01st October, 2013 and Bogawanatalawa Tea Estate PLC has taken physical
possession and control of the employees.
43. OPERATING AGREEMENT WITH WALTERS BAY TEA ESTATES (PVT) LTD
An operating Agreement (MOU) was made on 29th September, 2011 by and between Bogawantalawa Tea Estates PLC (BTE PLC)
and Walters Bay Tea Estates, LLC (WBTE US) and Walters Bay Tea Estates (Pvt) Ltd (WBTE SL). WBTE SL is a fully owned subsidiary
of WBTES US. According to the agreement, WBTE SL on behalf of WBTE US, operate and manage three tea factories, namely
Maliboda, Sapumalkanda and Noori and the tea lands coming under Maliboda and Noori estates (excluding the identified land
covering rubber and forestry areas belonging to the said estates). Consequently WBTE US/ WBTE SL will meet all capital and
operating costs of the said factories and lands of the estates from 01st July, 2011 until the 21st June, 2045.
By letter dated 16th June, 2011 the Director PMMD for the secretary of Ministry of Plantation Industries has informed BTE PLC
(Letter Ref, MP1/9/1/BGP/G-1) that the General Treasury has declared that it has no objections in principle, to the proposed
management and operating agreement subject to the parties making necessary charges to MOU as per the opinion of the
Department of Attorney General.
All the assets and liabilities pertaining to those estates subleased to WBTE SL/WBTE US are continued to be reflected in the
books of the company as this is considered an operating lease.
Consideration for the MOU to BTE would be as follows:
(i) During the first 05 year period commencing from the Effective Date ending 30th June, 2016 :
-The amount due to BTE during the first three years of operations ending 30th June, 2014 shall be Rs.30 Million per each
year.
-Thereafter commencing 01st July, 2014 upto 30th June, 2016, it shall be Rs.40 Million per each year.
(ii) During the period commencing from 01st July, 2016 upto the end of the agreement 21st June, 2045 the amount due to BTE PLC
shall be computed as follows:
-For the year commencing 01st July, 2016 and ending 30th June, 2017 the amount due to BTE shall be Rs. 45 Million.
-For the year commencing 01st July, 2017 and ending 30th June, 2018 and years thereafter upto June, 2045 each year the
figure shall be increased by the GDP deflator of the preceding year as stated by the Central Bank Annual Report.
81
44. EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION
44.1There have been no material events occurring after the date of the statement of financial position that require adjustment or
disclosure in the financial statements.
45. PRICING POLICY
Sales and purchases of goods and services to/from related parties were made at normal trading terms on arms length basis.
Management fees provisions were made as per contractual arrangements.
46. COMPARATIVE INFORMATION
Comparative Information of the Company/ Group has been reclassified wherever necessary to conform with the current year’s
presentation/ classification.
Company/ Group
Following information was reclassified for the current year’s presentation:
a) Immovable Estate Assets on Finance Lease
Mature plantation of bearer biological assets which was classified under immovable LEDB/SLSPC estate assets on finance lease
in previous year has been reclassified under bearer biological assets for fair presentation.
Company/ Group
Amount
(Rs)
Immovable Estate Assets on Finance Lease as per Previous Financial Statements
Less: Mature Plantation Transferred to Bearer Biological Assets
Immovable Estate Assets on Finance Lease as per Current Financial Statements.
210,365,390
(202,617,803)
7,747,587
b) Inventories
Growing Crop Nurseries which were classified under inventories in previous year have been reclassified under bearer biological
assets for fair presentation.
Group
Company
Amount
Amount
(Rs)
(Rs)
Inventories as per previous Financial Statements
Less: Growing Crop Nurseries Transferred to Bearer Biological Assets
Inventories as per Current Financial Statements
623,558,419
(16,448,507)
607,109,912
410,294,281
(16,448,507)
393,845,774
c)
Growing crop nurseries which were classified under inventories and mature plantation which was classified under immovable
estate assets on finance lease have been reclassified under bearer biological assets for fair presentation.
Company/ Group
Amount
(Rs)
Bearer Biological Assets as per Previous Financial Statements
Add: Mature Plantation Transferred from immovable Estate Assets on Finance Lease (Note 45 a)
Growing Crop Nurseries Transferred from Inventories (Note 45 b)
Bearer Biological Assets as per Current Financial Statements
1,208,258,584
202,617,803
16,448,507
1,427,324,894
82
46. COMPARATIVE INFORMATION (Contd…)
d) Retirement Benefit Obligations/ Trade and Other Payables
Amount payable to bolted workers which was classified under retirement benefit obligations has been reclassified under trade
and other payable since payment to be made within 30 days from the retirement.
Company
Amount
(Rs.)
Retirement
Trade
Benefit and Other
Obligation
Payable
Balance as per Previous Financial Statements
703,364,306
368,307,025
(77,844,060)
77,844,060
Balance as Per Current Financial Statements
625,520,246
446,151,085
Group
Amount
(Rs.)
Retirement
Trade
Benefit and Other
Obligation
Payable
717,186,252
474,170,183
(77,844,060)
77,844,060
639,342,192
552,014,243
Group
a) Subsidiary - BPL Teas (Pvt) Ltd
The business loss of the local marketing division amounting Rs. 10,308,485/- which was previously classified under other
income was re-classified on line by line basis as per the requirement of LKAS 01 (Presentation of Financial Statements) for fair
presentation as follows:
Statements of Comprehensive Income
Current As Reported
Presentation
Previously
Increase/ 2012/2013
2012/2013
(Decrease)
Rs.
Rs.
Rs.
Revenue 3,769,086,748 3,516,985,162
252,101,586
Cost of Sales (3,288,391,544) (3,094,033,598) (194,357,946)
Gross Profit
480,695,204
422,951,564
57,743,640
Other Income
197,503,365
187,190,223
10,313,142
Distribution Costs
(70,176,407)
(25,366,903)
(44,809,504)
Administration Expenses (225,218,646) (204,145,315)
(21,073,331)
Other Expenses
(11,920,621)
(11,668,621)
(252,000)
Net Finance Income / (Expenses) (102,937,686) (101,015,739)
(1,921,947)
Profit Before Tax
267,945,209
267,945,209
b) Trade and Other Receivable/ Amount Due from Related Parties
Amount receivable from Walters Bay Tea Estates (Pvt) Ltd which was classified under trade and other receivable has been
reclassified under due from related parties for fair presentation.
Company
Amount
(Rs.)
Receivable from Walters Bay Tea Estates (Pvt) Ltd
Trade and Amount Due
Other from Related Receivables
Parties
501,600,467
1.154,421
(6,748,207)
6,748,207
494,852,260
7,902,628
83
47. ASSETS PLEDGED
The following assets of the company/ group have been pledged as collaterals for interest bearing loans obtained by the
company/group to the respective financial institutions concerned.
47.1 Company
Name of the
Financial
Institution/
Purpose of
Facility
Nature of
the Facility
Facility
Granted
Rs.
Balance
Outstanding
As At
31.03.2014
Rs.
Securities Pledged
Field
Developments
and Process
Improvements
LD0025000256
LD0025000257
LD0920800104
Term Loan
Term Loan
Term Loan
18,996,095
17,939,123
58,000,000
581,084 Mortgage over the leasehold right and movable
(275,292) machinery of the two estates namely Loinorn and
39,485,042 Bogawantalawa.
Field
Developments
and Process
Improvements
LD1127309186
Term Loan
113,000,000
102,010,000 Mortgage over leasehold rights of Loinorn,
Bogawantalawa, Fettereso estates and all moveable
and immovable assets.
A lien over the “Debt Service Reserve Account”
(DSRA) maintained with the bank, with a letter of set
off in respect thereof.
Irrevocable power of Attorney given to the bank in
case of an unforeseen event to approach any other
broker and obtain proceeds from auctions due to the
company to service the loan.
Financing
Gratuity
Payments
LD1215983106
Term Loan
50,000,000
36,000,000 Mortgage over leasehold rights of Loinorn
Bogawantalawa, Fettereso estates and all moveable
and immovable assets.
Upgrading
the Lethenty
Factory
LD1217027807
Financing the
purchase of
machinery
for factory
development
activities in all
the up country
factories
and factory
development
activities of
Kotiyagala
and Campion
estates.
Term Loan
45,000,000
35,625,000
Term Loan
20,000,000
20,000,000 Primary movable mortgage over the new machinery
acquired under the loan.
For liquidation Securitization
of high cost
Loan
debt and
up country
working capital
requirement.
Mortgage over the leasehold rights of Loinorn,
Bogawantalawa and Fettereso buildings and
machinery thereon which are already mortgaged to
the bank together with a “Deed of Renunciation”.
A lien over the “Debt Service Reserve Account”
maintained with the bank, with a letter of set off in
respect thereof.
Irrevocable undertaking from a selected broker to
transfer the sales proceeds directly to the “Debt
Service Reserve Account” maintained with the bank.
Irrevocable “Power of Attorney” given to the bank
in case of an unforseen event to approach any other
broker and obtain proceeds from auctions due to the
company to service the loan.
200,000,000
200,000,000 Monies lying in the “Escrow Account” or monies to
be realized on account of the “Escrow Account”,
the deposits and all authorised investments made
from time to time by the ‘Escrow Agent” in term of
“Securuzed Debt Agreement”.
84
47. ASSETS PLEDGED (Contd…)
47.1 Company (Contd…)
Name of the Financial
Institution/Purpose of Facility
Nature of the
Facility
Balance Securities Pledged
Facility
Granted Outstanding As
Rs. At 31.03.2014
Rs.
1) Under Plantations Sector Reform Project
Reform Project
a) To finance 70% of the total cost
of crop development (Part A (I) ) Term Loan
to be undertaken during year II of
the project.
22,518,314
2,836,085
25,354,399
Term Loan
b) To finance 50% of the total cost
of crop development (Part A (III)
), to be undertaken during year III
of the project.
28,628,375
31,088,960
6,140,907
65,858,242
86,805
5,187,160
1,228,107
6,502,072
Secondary mortgage bond
No.1085 dated 04.11.1998 for
Rs.12,000,000/- executed over the
leasehold rights over the above tea
estate.
c) For field development and
factory modernization.
Term Loan
2,191,712
5,498,288
3,961,950
3,969,270
4,044,300
8,043,750
4,977,118
1,785,000
5,520,000
662,730
17,500,000
2,022,882
60,177,000
890,012
2,692,058
2,269,880
2,274,084
2,317,052
4,608,401
1,481,338
651,010
3,756,820
379,707
11,302,072
701,352
33,323,786
Primary ,mortgage bond
No.888 dated 30.10.2000 for
Rs.37,250,000/- executed over the
leasehold rights over the estate
namely Norwood.
d) To finance the gratuity payments Term Loan
of the estate workers.
30,000,000
11,350,509 Stocks and other movable assets
together with an assignment over
book debts.
2) To meet working capital
requirement
10,000,000
Overdraft
314 Primary mortgage bond
1,180 No.646 dated 19.09.1977 for
1,494 Rs.21,208,000/- executed over
the leasehold rights over the tea
estate namely Wanarajah (Dickoya,
Gampola).
6,090,942
47. ASSETS PLEDGED (Contd…)
47.2 BPL Teas (Pvt) Ltd
Name of the
Financial
Institution
Nature of
the Facility
Balance Securities Pledged
Facility
Granted Outstanding As
At 31.03.2014
Rs.
Rs.
1,601,950 Primary Mortgage for Rs.45 Mn over
machinery executed by the company
secondary mortgage bond for Rs.50 Mn
15,840,000 over machinery at No.21, Parakrama Road,
- Mattumagala, Welisara.
Term Loan
13,478,400
(108, 000
USD)
Term Loan
Term Loan
20,000,000
45,000,000
Bank
Overdraft
30,000,000
Letter of
Credit
20,000,000
Letters of
Guarantees
20,000,000
Packing
Credit Loan
73,902,400
(572,000
USD)
Packing
Credit Loan
695,944,240
(3,931,000`
Euro)
142,871,280
Export Bill
Purchase
Facility
15,000,000
-
Short Term
Loan
20,000,000
84,159,587 Primary mortgage for Rs.5 Mn over the
stocks in trade and other movable assets
together with an assignment over book
debts executed by the company.
-
Secondary mortgage for USD 850,000 and
tertiary mortgage for USD 650,000 over the
- stocks in trade and other movable assets
together with an assignment over book
debts executed by the company.
118,864,000 Quaternary mortgage for USD 500,000/over the stock in trade and other movable
assets together with an assignment over
book debts executed by the company.
20,000,000 Fifth mortgage for Rs.20 M over the stock
in trade and other movable assets together
with an assignment over book debts
executed by the company.
Fifth mortgage bond No.FCC/12/47 for
Rs.20M over the stock in trade.
One Off Short
Term Loan
Long Term
Loan
Finance
Lease
75,000,000
35,000,000 Sixth mortgage bond for Rs.75 Mn over the
stock in trade and book debts executed by
the company.
220,612,500
(1,250,000
Euro)
220,975,000 Primary mortgage bond for Euro 1,250,000
to be executed over the 4 nos. tea bagging
machines to be imported.
34,849,752
5,233,944 Absolute ownership of asset on finance
lease.
85
Revenue
2,637,268,949 2,641,392,643
Cost of Sales
(2,676,403,882) (2,377,787,889)
Gross Profit/(Loss)
(39,134,933) 263,604,754
Add : Gain on Fair Value
of Consumable
Biological Assets
-
-
Other Income
77,710,829
64,715,611
Less : Unallocated Expenses
-
-
Distribution Expenses
-
-
Administration Expenses
-
-
Net Finance Income/(Expenses)
-
-
Profit / (Loss) from
Before Taxation
38,575,896 328,320,365
Less : Taxation
-
-
Net Profit/(Loss)
for the Year
38,575,896 328,320,365
48.1.2 Segment Assets
Non-Current Assets
1,522,383,035 1,613,075,023
Current Assets
569,188,530 580,361,157
2,081,571,565 2,193,436,180
48.1.3 Segment Liabilities
Non-Current Liabilities
855,735,960 695,237,368
Current Liabilities
359,842,835 405,347,788
1,215,578,795 1,100,585,156
48.1.4 Segmental Expenses
48.1.4.1 Capital Expenditure
119,597,959 109,996,766
48.1.4.2 Depreciation/Amortization
93,368,979
93,368,979
-
-
-
-
-
-
(462,106)
-
(462,106)
650,956,280
4,906,250
655,862,530
-
-
-
-
2,623,293
(1,948,432)
-
(1,948,432)
605,116,278
4,906,250
610,022,528
-
-
-
-
2,623,293
291,346,407
16,189,912
257,276,057
473,753,995
731,030,052
380,173,416
447,568,292
827,741,708
42,974,375
42,974,375
-
-
102,354
-
(26,382,322)
(71,362,110)
(25,750,488)
-
-
-
2013/2014
Rs.
2013/2014
Rs.
2012/2013
Rs.
Total
- 3,862,480,689 3,769,086,748
- (3,648,347,013) (3,288,391,544)
- 214,133,676 480,695,204
2012/2013
Rs.
Unallocated
24,698,333
14,732,894
20,604,829
405,729,283
426,334,112
105,016,922
393,946,139
498,963,061
79,282,234
79,282,234
-
2,594,056
1,382,019
1,613,476
38,988,557
40,602,033
8,020,644
79,303,184
87,323,828
3,696,741
3,696,741
-
774,997,422
88,771,065
863,768,487
28,609,240
23,943,917
(4,665,323)
350,539,309
382,310,565
(31,771,256)
537,690,271 3,290,690,795 2,913,547,103
119,141,053 1,189,737,321 1,164,984,616
656,831,324 4,480,128,116 4,078,531,719
(46,292,699)
(14,521,444)
(31,771,256)
4,788,963
850,009
54,995,340
17,677,166
23,930,987
17,201,338
468,533,762
131,241,369
163,415,049
128,776,513
1,075,343 1,215,657,851 1,255,659,586 2,330,283,344 1,972,577,126
43,947,426 270,531,539 205,384,035 1,143,116,926 1,060,408,532
45,022,769 1,486,189,390 1,461,043,621 3,473,400,270 3,032,985,658
6,808,607
66,630,017
73,438,624
(10,308,484) (111,907,820)
(10,308,484) (107,242,497)
-
(4,665,323)
-
-
- 118,734,030 114,365,356 118,734,030 114,365,356
22,827,910
-
4,657
99,049,246 109,955,187 176,862,429 197,503,365
- (275,025,773) (238,841,986) (275,025,773) (238,841,986)
(25,366,904) (52,747,909) (44,809,503)
-
- (79,130,231) (70,176,407)
(51,332,807) (29,721,811) (21,073,331) (254,485,708) (164,733,129) (355,569,629) (237,139,267)
(26,654,883)
(2,683,639)
(2,173,945) (70,340,065) (74,108,858) (98,974,192) (102,937,686)
4,978,235 909,821,054 870,614,284 301,541,739 252,101,586
(5,440,341) (743,454,113) (710,805,366) (212,691,639) (194,357,948)
(462,106) 166,366,941 159,808,918
88,850,100
57,743,638
-
-
-
-
-
-
13,848,947
(15,797,379)
(1,948,432)
48.
SEGMENTAL ANALYSIS BY PRINCIPAL BUSINESS ACTIVITIES
48.1
GROUP
Agriculture
Manufacturing
Tea
Rubber
Export Market
Local Market
48.1.1 Segmental Results
2013/2014
2012/2013
2013/2014
2012/2013
2013/2014
2012/2013
2013/2014
2012/2013
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
86
119,597,959
93,368,979
48.2.4.2Depreciation/Amortization
93,368,979
109,996,766
2,623,293
-
-
-
-
855,735,960
695,237,368
359,842,835
405,347,788
1,215,578,795 1,100,585,156
-
-
-
(1,948,432)
-
(1,948,432)
605,116,278
4,906,250
610,022,528
-
64,715,611
-
328,320,365
-
328,320,365
13,848,947
(15,797,379)
(1,948,432)
838,297,422
89,199,715
927,497,137
2,623,293
-
17,677,166
54,995,340
114,365,356
174,670,798
(238,841,986)
313,336,815
(26,534,999)
286,801,816
17,201,338
23,930,987
113,669,438
174,593,299
113,193,610
133,927,753
1,950,901,221
631,150,977
2,582,052,198
569,340,270 2,965,796,735 2,833,371,573
139,721,924 663,294,495
724,989,331
709,062,194 3,629,091,230 3,558,360,904
114,365,356 118,734,030
109,955,187 208,410,075
(238,841,986) (325,025,773)
(14,521,443) (38,965,033)
(26,534,999)
(540,302)
(41,056,442) (39,505,335)
- 1,215,657,850 1,255,663,853 2,071,393,810
- 270,960,189
225,803,189 630,803,024
- 1,486,618,039 1,481,467,042 2,702,196,834
650,956,280
4,906,250
655,862,530
Total
2013/2014
2012/2013
Rs.
Rs.
-
- 2,651,117,896 2,646,370,878
- (2,692,201,261) (2,383,228,231)
-
- (41,083,365)
263,142,647
Unallocated
2013/2014
2012/2013
Rs.
Rs.
- 118,734,030
- 130,699,246
- (325,025,773)
(462,107) (75,592,497)
-
(540,302)
(462,107) (76,132,799)
4,978,235
(5,440,342)
(462,107)
Rubber
2013/2014
2012/2013
Rs.
Rs.
1,522,383,035 1,613,075,023
569,188,530
580,361,157
2,091,571,565 2,193,436,180
-
77,710,829
-
(38,575,896)
-
(38,575,896)
2,637,268,949 2,641,392,643
(2,696,403,882) (2,377,787,889)
(39,134,933)
263,604,754
48.2.4.1Capital Expenditure
48.2.2 Segmental Assets
Non-current Assets
Current Assets
48.2.3 Segmental Liabilities
Non-current Liabilities
Current Liabilities
48.2.4 Segmental Expenses
Revenue
Cost of Sales
Gross Profit/ (Loss)
Add : Gain on Fair Value of
Consumable Biological Assets
Other Income
Less : Unallocated Expenses
Profit/(Loss) Before Taxation
Less : Taxation
Net Profit/(Loss) for the Year
Tea
2013/2014
2012/2013
Rs.
Rs.
SEGMENTAL ANALYSIS BY PRINCIPAL BUSINESS ACTIVITIES (Contd…)
48.2 COMPANY
48.2.1 Segmental Results
48.
87
The carrying amounts of these financial assets and liabilities are a reasonable approximation of fair values, either due to their short term nature or that they are floating rate
instruments that we re-priced to market interest rates on or near the reporting date.
ii.
Financial Assets
Trade and Other Receivables
Amount Due From Related Parties
Cash and Cash Equivalents
Financial Liabilities
Trade and Other Payables
Amounts Due to Related Parties
Dividend Payable
Short Term Borrowings
Redeemable Debentures - Current Maturity
Bank Overdrafts
Current Portion of Interest Bearing Borrowings
Interest Bearing Borrowings - Non-Current Portion
Redeemable Debentures - Non-Current Portion
494,852,260
7,902,628
55,119,816
557,874,704
446,151,085
25,292,153
4,534,503
20,000,000
25,000,000
20,574
64,431,814
253,464,512
50,000,000
888,894,641
238,492,215
3,110,207
30,151,196
271,753,618
550,029,538 550,029,538 441,658,974 441,658,974 552,014,243 552,014,243
26,527,403
26,527,403
24,856,569
24,856,569
26,962,987
26,962,987
4,925,516
4,925,516
4,925,516
4,925,516
4,534,503
4,534,503
281,735,280 281,735,280
-
- 280,020,630 280,020,630
25,000,000
25,000,000
25,000,000
25,000,000
25,000,000
25,000,000
95,643,718
95,643,718
11,484,131
11,484,131
50,437,570
50,437,570
136,476,373 136,476,373 102,262,315 102,262,315
73,836,044
73,836,044
620,861,552 620,861,552 382,342,641 382,342,641 255,879,437 255,879,437
25,000,000
25,000,000
25,000,000
25,000,000
50,000,000
50,000,000
1,766,199,380 1,766,199,380 1,017,530,146 1,017,530,146 1,318,685,414 1,318,685,414
238,492,215
3,110,207
30,151,196
271,753,618
260,808,479
22,281,556
48,053,522
331,143,557
515,934,093
52,343,066
38,969,252
607,246,411
494,852,260
7,902,628
55,119,816
557,874,704
515,934,093
52,343,066
38,969,252
607,246,411
446,151,085
25,292,153
4,534,503
20,000,000
25,000,000
20,574
64,431,814
253,464,512
50,000,000
888,894,641
260,808,479
22,281,556
48,053,522
331,143,557
The fair values of financial assets and liabilities by classes that are not carried at fair value and of which carrying amounts are reasonable approximation of fair values are as follows:
2013/2014
2012/2013
Group
Company
Group
Company
Carrying Fair
Carrying
Fair
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
CAmount
Value
Amount
Value
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Classes of financial instrument that are not carried at fair value and of which carrying amounts are a reasonable approximation of fair value and,
i.
49. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is the amount of which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length
transaction, other than in a forced liquidation or sale.
Setout below is,
88
12.63
1.30
5.00
0.50
27.75
17.00
29.60
Investors Ratios
Price Earnings Ratio
Earnings per Share
Dividend Rate %
Dividend per Share
Net Asset Value per Share (Rs.)
Market Price
Equity to Assets %
Equity
Stated Capital
335,000
Retained Earning
578,103
Proposed Dividend
16,750
Total Equity
929,853
11,185
106
121
Production ( In ‘000 Kgs./ Nuts)
Tea
Rubber
Coconut
Operating Ratios
Operating Profit Margin
6.48
Turnover per Employee (Rs.)
125,387
Return on Share Holders Funds %
4.69
Fixed Asset Turnover Ratio
0.96
Assets & Liabilities
Property plant & Equipment
2,143,471
Investment
101,000
Current Assets
769,061
Creditors - Falling Due within one year
-716,347
Working Capital
52,714
Non Current & Deferred Liabilities
-1,090,647
Provision for terminal benefits
-299,376
Financial Ratios
Current Ratio
1.07
Fixed Assets to Current Assets (times)
2.79
Interest Cover
1.60
Company - Bogawantalawa Tea Estates PLC
Period
2004/05
Trading Results
Rs.000
Turnover
2,084,420
Gross Profit
135,169
Financing Cost
-71,913
Profit & (Loss) for the Period
43,575
-0.97
3.06
0.00
1.07
3.16
1.17
502,500
437,088
16,750
939,588
959,120
-6.04
-2.24
5.00
0.50
18.70
13.50
28.79
335,000
607,370
16,750
19.46
0.87
5.00
0.50
28.13
16.00
34.68
9,389
-
-
2,251,698
276,785
734,955
-756,771
-21,816
-1,167,993
-399,088
2,107,863
286,911
663,608
-620,251
43,357
(1,090,480)
(319,230)
11,208
93
82
(0.38)
136,646
-11.96
0.94
Rs.000
2,107,102
(7,923)
(74,812)
(112,359)
Rs.000
2,177,641
112,129
-79,786
29,266
4.28
138,263
2.31
0.88
2006/07
2005/06
1,013,907
502,500
511,407
-
20.94
1.48
0.00
0.00
20.18
34.50
29.68
9,472
-
-
1.00
2.90
0.28
2,330,845
281,986
943,268
(832,813)
110,455
(1,129,404)
(467,682)
7.57
173,605
7.33
1.17
Rs.000
2,736,017
251,738
-115,615
74,319
2007/08
770,926
502,500
268,426
-
(2.76)
(4.54)
-
-
15.34
12.50
24.74
7,952
-
-
1.29
2.71
(1.66)
2,241,449
46,650
827,432
(639,665)
187,767
(1,217,078)
(487,862)
1.36
148,858
(29.56)
0.97
Rs.000
2,177,498
29,625
(85,745)
(227,905)
2008/09
884,451
502500
381951
-
16.16
2.26
-
-
17.60
36.50
25.62
8,164.00
-
2.03
2.22
(0.37)
2,349,637
46,650
1,056,351
(521,435)
534,916
(1,402,578)
(644,174)
8.14
204,658
12.84
1.26
Rs.000
2,960,384
240,862
(82,917)
113,524
2009/10
1,061,208
586,250
474,958
-
13.56
1.46
12.67
19.80
30.10
9,296
(1.62)
2.70
(1.06)
2,512,908
82,836
930,910
(573,529)
357,381
(1,329,987)
(561,930)
9.47
291,033
11.13
1.23
Rs.000
3,080,590
291,644
(125,670)
118,132
2010/11
692,436
976,308
586,250
390,058
11.66
11.5
27.73
8.63
10.5
19.51
586,250
56,186
3.36
3.42
6,998
1.40
3.74
(0.26)
2,770,248
46,674
741,437
(528,306)
213,131
(1,350,380)
(703,364)
9.94
281,170
29.38
0.96
Rs .000
2,646,370
263,142
(74,360)
286,801
2012/13
(2.32)
-4.53
6,886
(1.11)
4.02
0.24
2,665,198
46,853
662,958
(597,569)
65,389
(1,544,079)
(729,897)
(13.31)
239,844
(52.75)
0.85
Rs .000
2,253,813
(300,051)
(88,909)
(365,244)
2011/12
926,894
586,250
340,644
11.07
9.3
25.92
(18.98)
(0.49)
6,210
1.05
4.47
1.72
2,965,796
78,300
663,294
(630,803)
32,491
(1,393,907)
(677,486)
(1.55)
283,148
(4.43)
0.89
Rs .000
2,651,117
(41,083)
(70,540)
(41,039)
2013/14
89
Ten Year Summary
90
Corporate Information
Name of the Company : Bogawantalawa Tea Estates PLC
Date of incorporation : 22nd June 1992
Company Registration No. : PQ 124
Legal Form : Quoted Public Company
Stock Exchange Listing : The ordinary shares of the company
are listed on the Stock Exchange in Sri Lanka
Directors
Mr. D J Ambani [Chairman]
Mr L J Ambani
Mr C M O Haglind
Mr J Molligoda
Mr D A de Silva Wickramanayake
Mr S A S Jayasundara
Secretaries and registrars
P W Corporate Secretarial (Pvt) Ltd
No 3/17, Kynsey Road, Colombo 08.
Telephone : 4 897 711 / 4 897 722
Fax : 4 740 588 E mail : pwcs@pwcs.lk
Registered Office :
No 153, Nawala Road, Narahenpita, Colombo-05, Sri Lanka
Telephone : 2 510 100 Fax 2 510 178 E mail : info@bpl.lk
Auditors
BDO Partners
Chartered Accountants
65/2, Sir Chittampalam A Gardiner Mawatha
Colombo 2.
Bankers
National Development Bank
DFCC Bank
Seylan Bank
Sampath Bank
Bank of Ceylon
91
Form of Proxy
I/We the undersigned ................................................................................................................................…….... NIC No….......................................................
of ................................................................................................................................................................................................................................................................
being a member/s* of Bogawantalawa Tea Estates PLC hereby appoint:
Mr. Dinesh Jamnadas Ambani
Mr. Lalithkumar Jamnadas Ambani
Mr. Carl Michael Oscarsson Haglind
Mr. Don Ariyaseela De Silva Wickramanayake
Mr. Sudath Ajitha Samaradivakara Jayasundara
Mr. Jayampathi Molligoda
of Colombo or failing him*
of Colombo or failing him*
of Sweden or failing him*
of Colombo or failing him *
....................................................................................................……..............................................................................................………...........................................
of …………….………………………………………………….........................................………………………………….…………………
my/our * Proxy to vote as indicated hereunder for me/us* and on my/our* behalf at the Twenty First Annual General Meeting of
the Company to be held on 30th September 2014 and at every poll which may be taken in consequence of the aforesaid Meeting
and at any adjournment thereof:
For
Against
Resolution 1
To receive and consider the Report of the Directors and the Statement
of Accounts for the year ended 31st March 2014 with the Report of the
Auditors thereon.
Resolution 2
To re-elect Mr. S A S Jayasundara who retires in terms of Article No. 89 & 90
of the Articles of Association of the Company, as a Director.
Resolution 3
To elect Mr. J Molligoda who retires in terms of Article No. 96 of the Articles
of Association of the Company, as a Director.
Resolution 4
To authorise the Directors to determine donations for the ensuing year.
Resolution 5
To re-appoint Messrs. BDO Partners Chartered Accountants as Auditors of
the Company and authorise the Directors to determine their remuneration.
In witness my/our* hands this .............................................................. day of ........................................................ Two Thousand and Fourteen.
* Please delete the inappropriate words.
Instructions as to completion appear on the reverse.
..........................................................
Signature of Shareholder/s
92
Instructions as to Completion
1.
This Form of Proxy must be deposited at No. 153, Nawala Road, Narahenpita, Colombo 5 not less than forty five (45) hours
before the time fixed for the Meeting.
2.
In perfecting the Form of Proxy please ensure that all details are legible.
3.
If you wish to appoint a person other than a Director of the Company as your proxy, please insert the relevant details in the
space provided.
4.
Please indicate with an ‘X’ in the space provided, how your proxy is to vote on the resolution. If no indication is given, the proxy
in his discretion will vote as he thinks fit.
5.
In the case of a Company/Corporation, the proxy must be under its Common Seal, which should be affixed and attested in the
manner prescribed by its Articles of Association.
6.
In the case of a Proxy signed by an Attorney, the Power of Attorney must be deposited at The Secretaries’ Office (i.e. P W
Corporate Secretarial (Pvt) Ltd., 3/17, Kynsey Road, Colombo 8) for registration.
7.
In the case of joint holders the Form of Proxy must be signed by the first holder.

Bogawantalawa Annual Report 2013-2014

Transcription

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