Elpitiya Plantations Plc Annual Report 2010/11 - Colombo Stock ...

Elpitiya Plantations Plc Annual Report 2010/11 

1

2 

Elpitiya Plantations Plc Annual Report 2010/11

Contents 

Financial Highlights 02 

Chairman’s Statement 03 

Managing Director’s Review 05 

Board of Directors 07 

Annual Report of the Board of Directors 09 

Audit Committee Report 11 

Report of the Remuneration Committee 11 

Corporate Governance 12 

Corporate Sustainability Report 16 

Risk Management 20 

Management Team 21 

Statement of Directors’ Responsibilities 22 

Auditors’ Report 23 

Balance Sheet 24 

Income Statement 25 

Statement of Changes in Equity 26 

Cash Flow Statement 27 

Notes to the financial Statements 28 

Value Added Statement 53 

Information on Estates 54 

Ten year summary 55 

Shareholder & Investor Information 56 

Definitions 58 

Financial calendar 59 

Corporate Information 60 

Notice of Meeting 61 

Attached - Form of Proxy and Instructions as to Completion 


1

Financial Highlights 

2,800 

2,600 

2,400 

2,200 

2,000 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

- 

Turnover 

(Rs.million ) 

2007 2008 2009 2010 2011 

Tea Rubber Oil palm & Other Crops 

380 

330 

280 

230 

180 

130 

80 

30 

(20) 

(70) 

(120) 

Net Profit After Tax 

(Rs.million ) 


1,400 

1,300 

1,200 

1,100 

1,000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

- 

Shareholders' Funds 

(Rs. million) 


6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

- 

(1.00) 

(2.00) 

EPS (Rs) 


20.00 

18.00 

16.00 

14.00 

12.00 

10.00 

8.00 

6.00 

4.00 

2.00 

- 

Net Assets 

Per Share (Rs) 


30.00 

25.00 

20.00 

15.00 

10.00 

5.00 

- 

(5.00) 

(10.00) 

(15.00) 

Return on 

Shareholders' Funds (%) 


2011 2010 % 

Year ended 31 st March Rs.000’ Rs.000’ increase/ 

(Decrease) 

Turnover 2,601,501 2,215,126 17 

Gross Profit 594,432 241,211 146 

Profit / (Loss) before Tax 384,233 63,817 502 

Income Tax (Expense) / Income (20,729) - - 

Profit/(Loss) after Tax 363,504 63,817 470 

Non-Current Assets 3,086,299 2,910,616 6 

Current Assets 580,485 774,102 (25) 

Current Liabilities 613,941 888,019 (22) 

Shareholders’ Fund 1,363,284 1,017,997 34 

Capital Expenditure 242,536 268,524 (10) 

Earnings per Share (Rs.) 4.99 1.23 305 

Dividend per Share (Rs.) 0.36 0.25 44 

Net assets per Share (Rs.) 18.71 13.97 34 

Stated Capital 694,236 694,236 - 

Net Assets 1,363,284 1,017,997 34 

Return on Equity (%) 26.66 6.27 325 

2 


Chairman’s Statement 

It gives me great pleasure to submit this report for the year ended 

March 2011 where the highest net profit before management 

fees of Rs 386 mn was recorded, for Elpitiya Plantations Plc (EPP) 

for the year under review. Attractive prices for rubber and palm oil 

were the main contributors to this commendable performance. 

There were several other significant events that took place in EPP, 

all of which were responsible for improving the bottom line. The 

shareholders of the company subscribed to a rights issue, which 

helped to restructure the balance sheet resulting in a lower 

interest for the year compared to the previous year. We thank 

them for their support and confidence in the company. Further 

our efforts in diversifying the asset base contributed significantly 

to the operational results. The investment in palm oil both at field 

and factory level, and the diversification into hydropower 

contributed to sustaining the company’s profits by being a good 

balance to fluctuating commodity prices. 

The company is committed to protecting the environment and 

developing a sustainable model of plantation practices, covering 

both the field and the factories. Several initiatives have been 

undertaken at estate level to improve the condition of the soil, to 

contain water, and mitigate the effects of global warming. The 

gradual replacing of artificial fertilizer with organic fertilizer to 

minimise soil impact, and site specific fertilizing, providing only 

the required nutrients without excessive chemicals, are some of 

the other initiatives towards sustainability. Compost pits are 

maintained on the estates, with the long term goal of replacing 

one round of artificial fertilizer on estates with organic products. 

Further the company has a continuous forestry management 

programme to improve the biodiversity in the plantations and 

enhance the value of the environment. Currently over 700 ha of 

commercial forest has been planted by the company. 

Energy efficiency has also taken primary focus with several 

energy efficient initiatives being implemented covering the head 

office to the factories. These investments have given adequate 

results not only in terms of cost reductions but also in terms of 

lower energy use, thus making a contribution to reducing carbon 

emissions. Among the micro level efficiency improvements 

carried out are fuel switching and power factor correction systems 

and fibre reinforced plastic fan installation. A comparison of 

energy saving on the estates in the last 3 years shows a saving of 

approximately 1000 KVA units per month, which have been 

achieved with no production cutbacks or outsourcing of 

production. Energy savings have also been enabled through 

process redesign and efficiency improvements. 

Global warming and climate change will be a major risk that has 

to be addressed by the plantation industry and whilst we have 

taken a few steps to mitigate these effects, I believe that a clear 

consciousness and commitment to overcoming these effects 

must be addressed by all employees and stakeholders in the 

industry. Or else, all plantation crops in particular will be affected 

by its ill effects. 

We have also been in a position to develop five of our factories to 

obtain ISO 22000 underlying our commitment to quality, as well 

as customer commitment. Several other factories will also fall 

within this initiative in the next year. 

Despite the significant profits this year, the contribution from the 

tea sector particularly the up country estates were far below 

expectations. This was caused by a combination of events, i.e. 

inconsistent weather resulting in lower tea production and a tea 

market that was lower than the previous year. The low grown tea 

prices were somewhat better, although nowhere near the 

previous year levels. It was only in the month of March 2011 that 

both tea production and prices improved culminating in the 

company being able to reduce the losses on tea before the close 

of the financial year. It was fortunate that profits from rubber, palm 

oil and hydropower compensated to the poor performance from 

the tea sector. 

The future for EPP is very challenging. On one side, with the 

government’s thrust and priority towards plantations and 

agriculture, the estates show great promise for diversification into 

other crops and industries. On the other hand, the industry is 

faced with twin problems of rising cost and lower productivity 

particularly for high and mid grown tea. This has been an area of 

concern for the past several years as Sri Lanka’s competitiveness 

as a tea producer has declined with each successive wage 

increase and it is unfortunate that there does not appear to be a 

visible solution in sight to resolve this issue. All stakeholders must 

realize that unless each stakeholder acts with responsibility and 


3

Chairman’s Statement (contd.) 

commitment to ensure the long term well being and 

competitiveness of the tea industry, the future of this glorious 

industry will be severely eroded. 

We all need to accept the fact that cost will always increase. 

However, if the industry is to contribute to the economic 

advancement of Sri Lanka, it has to be coupled with increased 

productivity from the land and employees. It is only then that the 

industry will see positive growth and leap forward in the global tea 

industry. Thanks to His Excellency the President, the peace 

dividend in Sri Lanka, has opened new vistas on plantations. 

What is now required is to put these lands to the most productive 

use in a manner that the economic well being of Sri Lanka will be 

improved thus creating more employment, foreign exchange, and 

economic growth. Investors must be attracted to participate in 

the opportunities that the plantation industry offers and we as a 

company is committed to developing EPP to be a strong 

economic platform, in the future. 

We are fortunate that the government has provided a very 

attractive fertiliser subsidy covering the plantation companies as 

well, which will assist in ensuring adequate nutrient ratios on our 

soils and increase productivity of all crops. We are grateful to the 

government for this progressive step. Bank interest has also been 

well controlled unlike in the past, all of which have contributed 

towards curtailing cost. What remains is to significantly improve 

all round productivity for which a concerted effort is required from 

all the stakeholders. 

The estates work closely with the plantation community and 

address the critical needs of the community by enhancing 

education, awareness, social development and promoting good 

practices. We have specifically focused on crèche development, 

improving nutrition, welfare and co-operatives and worker health 

amongst several other areas. The Merrill J Fernando Charitable 

Foundation has supported us in many of these initiatives and 

provides educational scholarships to children of estate workers. 

We have also been fortunate to have the support of the Ministry 

of Livestock and Rural Development to concrete estate roads in 

addition to developing roads under the Plantation Development 

Project (PDP). The Plantations Human Development Trust (PHDT) 

continues to play a useful role in supporting the company in 

several social development initiatives. I thank all these institutions 

for their commitment and dedication to uplifting the communities 

on the estates. 

I am thankful to all the workers and staff of the plantations for their 

continuous support, co-operation and commitment throughout 

the year. 

We do appreciate the co-operation they have always given us 

during times of uncertainty and unrest. The Plantation executives 

have been a tower of strength and have worked tirelessly 

throughout the financial year and have faced much risk and 

hardship in the course of their duties. Their loyalty and dedication 

to the company has been admirable. 

I thank the Managing Director, CEO, the executives and staff of 

the head office for the leadership, guidance and support they 

constantly provide to the estates. The CEO and his team at the 

head office have always been inextricably linked to the progress 

and development of the estates and am grateful to them for the 

role they have played through the years. 

Finally, my grateful thanks and appreciation to the shareholders 

and board of directors including the two independent non 

executive directors, and the board member representing the 

government, for their involvement in the affairs of the company 

and their guidance and insight in assisting me in my role as 

Chairman of Elpitya Plantations Plc. 

J M S Brito 

Chairman 

23 rd August 2011 

4 


Managing Director’s Review 

The financial year ended March 2011 was a remarkable year for 

Elpitiya Plantations Plc, (EPP) as the company recorded its 

highest profit since the inception of the company. This 

achievement brought immense satisfaction to all who have been 

associated with EPP particularly since 1997. We owe this 

performance to the Chief Executive Officer (CEO) and all the 

employees at the head office, the general managers, managers 

and assistant managers on the estates, the staff and the workers 

for their tireless efforts during the year. The performance would 

have been even better had the tea estates contributed more 

meaningfully to the profits of the company. 

It is unfortunate that the tea industry, the country’s backbone and 

the larger component in the company continues to lag behind 

and was barely able to make a profit during the year. The high and 

medium grown estates in particular were affected by inconsistent 

weather and fluctuating tea prices, which contributed to the 

negative margins on the estates. This is a serious area of concern 

and has been aggravated by the recent wage increase. 

Once in two years plantation sector wages are increased in 

keeping with the collective agreement and whilst we appreciate 

the need for increased wages and benefits to employees, it is 

important that the increases are compensated with an increase in 

productivity. When this does not happen, the industry gradually 

erodes to a position when investors and stakeholders begin to 

lose confidence on this industry. Unfortunately this is the current 

position of the tea industry, which is clearly seen by the rate of 

replanting in all the high and medium grown estates in Sri Lanka. 

Unless this situation is corrected no investor will be willing to risk 

capital in the cultivation/replanting of tea particularly in the high 

and medium grown estates. This will not be in the interest of Sri 

Lanka as a premier International Tea Producer. 

Elpitiya Plantations Plc. had a rights issue to restructure the 

balance sheet and stabilize the company. The rights issue was 

fully subscribed and we were able to use the funds for the 

intended purpose and eliminate much of the short debts. We 

thank the shareholders for their confidence in subscribing to the 

rights issue. This resulted in a substantially lower finance cost in 

the company. We were also able to restructure some of the debt 

and reduce overall finance cost by these efforts. 

Our company has been fortunate that timely diversification has 

helped to mitigate the vagaries of commodity prices. Rubber, 

palm oil and hydropower profits have compensated to the losses 

in tea. Rubber had one of its best years in the last two decades 

with boom prices. Palm oil continued to show great promise with 

price stability and contributed to the bottom line. The hydropower 

investment too continues to yield more than adequate dividends. 

The future for the plantations is no doubt challenging and does 

pose great opportunities. The government has supported 

agriculture and shown its commitment in no uncertain terms with 

an attractive fertilizer subsidy, which was provided this year. 

Economic policies have also been streamlined and the plantations 

have great opportunities particularly for diversification provided 

the right climate is created for such investments. This is the 

challenge to all stakeholders as the company needs to attract 

both investors and technology. Our strategy is to develop a 

sustainable plantation company and accordingly, energy 

conservation, water and soil conservation, soil enhancement and 

commercial forestry has received top priority. 

Several energy reducing initiatives have been introduced in the 

factories such as fuel switching, process improvements and 

installing energy efficient trough fans to reduce energy cost and 

reduce emissions. Substantial savings have been seen as a result 

of a combination of initiatives. Another mini hydro power project 

is also expected to be constructed in the following year for which 

all the preliminary work has been undertaken. 

We are pleased to state that the asset base of the company has 

significantly grown since 1997 particularly with the large timber 

and forestry reserves in the high and medium grown areas gaining 

in value each year. Even the year under review, the company 

invested Rs. 242.8 Mn. for capital development. On the 

diversification front the joint venture (JV) – Elpiitya Lifestyle 

Solutions (Pvt) Ltd. has reduced its losses and created the much 

needed turnaround. The branded tea operation – Harrow Ceylon 

Choice has still not come upto expectations, although the 

distribution network has significantly improved and the brand 

value grown. AEN Palm Oil Processing (Pvt) Ltd. continues to fair 

remarkably well and produce adequate returns. The company 

has in place several committees that work closely with the 


5

Managing Director’s Review (contd.) 

plantations communities on our estates. These committees focus 

on crèche development , road rehabilitation, welfare matters, 

nutrition aspects, etc. 

government could quite rightly take the leadership to resolve 

these issues and ensure that the industry continues in the 

forefront as the major foreign exchange earner. 

The company is also thankful to the Plantation Human 

Development Trust and the Merrill J Fernando Charitable 

Foundation for supporting the estate communities by way of 

educational scholarships and social development initiatives. The 

company also continues to focus on carrying out medical camps, 

welfare events, pilgrimages, book donation schemes etc. for the 

benefit of the estate community. Several awareness building 

programmes aimed at dengue prevention and prenatal and 

antenatal care have also been carried out. The company is also 

grateful to the Ministry of Livestock and Rural Community 

Development for the assistance given to concrete roads on the 

Pundalu Oya estates. In addition, we also received funding for 

this same purpose under the Plantation Development Project and 

express our grateful thanks to all these institutions. 

EPP has also focused on training and skills development 

programs for different levels of employees. Quality circles were 

also set up on the estates with similar objectives. Regular training 

programmes have also been held particularly aimed at the 

plantation executives, workers and staff, as this is an investment 

that is well worth the effort. The company was also able to obtain 

ISO 22000 for five tea factories, whilst several others are in the 

pipeline for next year. In addition, the ELS factory also received 

the Forestry Stewardship Council Chain of Custody Certification, 

which was a great achievement. 

I take this opportunity to convey my appreciation to the CEO and 

the staff at the head office and all plantation executives, workers 

and staff for their continued dedication and commitment. The 

workers and staff have always co-operated with us and developed 

a wonderful dialogue with the plantation executives and the team 

at head office. We are grateful to them in resolving all issues. The 

plantation executives have continued to give leadership on the 

estates and have faced much hardship with fortitude and 

commitment. I am grateful to all of them. I must also thank all our 

customers who purchase our product and the brokers for the 

confidence they have in our products, without whose support this 

performance would not have been possible. I thank the CEO for 

his unwavering leadership, hard work and perseverance. 

There have been several who have contributed to the progress of 

this company. The Management Committee (MC) chaired by Mr. 

Devan de Mel meets monthly and reviews the performance of the 

estates and the company and offers pragmatic advice and 

solutions. I thank them for their valuable time and the candid 

feedback given to me in the discharge of my duties. The chairman 

and the board of directors have been a great source of 

encouragement and guidance to me and I thank them for the 

continuous support and advice given to me in the discharge of 

my duties, which I have always valued and look forward in the 

future too. 

The challenges for the industry are global warming and climate 

change, inconsistent commodity prices and escalating cost. No 

sustainable solutions have been found for any of these issues 

and therefore, it is of concern to the company. It is time that all 

stakeholders get together and find a long-term solution or else 

this can affect the long term stability of the plantation sector. The 

R.M. Fernando 

Managing Director 


6 


Board of Directors 

Mr. J M S Brito (Chairman) 

Mr. Merrill J Fernando 

Mr Brito was appointed to the Board of Elpitiya Plantations PLC 

on December 01, 2002 and as Chairman on April 28, 2003. Mr 

Brito is the Deputy Chairman and Managing Director of Aitken 

Spence PLC, a Law Graduate of London University, a Fellow of 

the Institute of Chartered Accountants of England and Wales and 

has a Master’s Degree in Business Administration from the City 

Business School, London. Together with this multi disciplined 

knowledge, he also brings with him a wealth of 25 years of 

international experience working with Price Waterhouse-London, 

British EverReady PLC, Minmetco Group, World Bank and PERC. 

Presently Mr Brito is Chairman of the Development Finance 

Corporation of Ceylon and the DFCC Vardhana Bank. He is a 

former Chairman of Sri Lanka Airlines and was a non-executive 

Director of Sri Lanka Insurance Corporation and the Strategic 

Enterprise Management Agency and the Task Force for Rebuidling 

the Nation. 

Mr. Merrill J Fernando was appointed as a Director to the Board 

of Elpitiya Plantations PLC in August 01, 1997. 

One of the first Sri Lankan tea tasters in the then British-dominated 

trade, Mr. Merrill J Fernando is the Chairman of MJF Holdings 

Limited. He founded the ‘Dilmah’ tea brand that reintroduced 

pre-packaged Pure Ceylon Tea to Western markets. ’Dilmah’, 

launched in Australia is now sold in over 90 countries around the 

world and is considered a role model for the value added 

marketing of a third world commodity. 

Mr. Fernando is the founder of the MJF Foundation, a low profile 

charity that works to create better conditions for plantation 

workers ‘underprivileged children, elders and society’s victims. 

Mr. Malik J Fernando 

Dr. R M Fernando (Managing Director) 

Dr R M Fernando was appointed to the Board of Elpitiya 

Plantations PLC on August 01, 1997 and as Managing Director 

on May 14, 2004. Dr Fernando, who heads Plantations and 

Business Development in Aitken Spence PLC, holds a PhD and 

a MBA from the University of Colombo and is also a Chartered 

Marketer and a Fellow of the Chartered Institute of Marketing 

(CIM), UK. 

Mr. Malik J Fernando was appointed as a Director to the Board of 

Elpitiya Plantations PLC in August 01, 1997. 

He is the Director operations of the MJF Group, which comprises 

several tea growing and tea packing/exporting companies, 

supplying the ‘Dilmah Tea’ brand around the world. 

Mr. Fernando holds a Bachelor of Science Degree in Management 

from Babson College, USA. 

He has extensive experience in the plantation industry both in the 

public and private sectors and played a key role in the plantations 

privatization programme. 

He plays an important role in the re-branding strategy of Aitken 

Spence and also leads the CSR and Sustainability initiatives of 

the Group. He was awarded the Brand Leadership Award at the 

Asia Brand Congress 2008, held in Mumbai in September 2008. 

He has been recently appointed as Honorary President of CIM, 

Sri Lanka region and Chairman of United Nations Global Compact 

Network, Ceylon. 

Mr. Lalit N de Silva Wijeyeratne 

Mr L N De S Wijeyeratne was appointed as a Director to the 

Board of Elpitiya Plantations PLC on January 9, 2009. 

He is a Fellow of The Institute of Chartered Accountants in Sri 

Lanka and counts over thirty five years of experience in Finance 

and General Management both in Sri Lanka and overseas. He 

was the Group Finance Director of Richard Peiris PLC from 

January 1997 to June 2008 and also held senior management 

positions at Aitken Spence PLC, Brooke Bonds Ceylon and 

Zambia Consolidated Copper Mines Limited. He is presently a 

Director of several listed and unlisted companies. 


7

Board of Directors (contd.) 

Dr. Anura Ekanayake 

Mr. M P D U K Mapa Pathirana 

Dr Anura Ekanayake was appointed as a Director to the Board of 

Elpitiya Plantations PLC on January 09, 2009. He was the 

Chairman of the Ceylon Chamber of Commerce during the period 

August 2009 to July 2011 and the immediate past Chairman of 

the Industrial Association of Sri Lanka. He started his professional 

career in the public sector and served in a number of senior Sri 

Lankan Government positions before moving to the private 

sector. He has held several key positions in the Plantation Sector, 

first serving as the Director of Planning at the Ministry of Plantation 

Industries and thereafter as Director General (Development) of 

the Ministry of Public Administration, Home Affairs and Plantation 

Industries. He served on the Boards of J.E.D.B. and S.L.S.P.C. 

prior to their privatization and thereafter served on the Boards of 

all 23 RPCs for several years. During this period he also served 

as a member of the Tea Research Board as well as the Board of 

the Post Graduate Institute of Agriculture of University of 

Peradeniya. During his public sector tenure, he also held a 

number of international positions including that of the Chairman 

of international Natural Rubber Organization based in Kuala 

Lumpur, Malaysia. He holds a PhD in Economics from Australia 

National University where he conducted research on ‘Economics 

of human capital’. He has widely published in Sri Lanka and 

abroad on economics, human capital, agriculture and environment 

related areas. His current professional interests are supporting 

businesses on organizational transformation including culture 

change and coaching young professionals to realize their full 

potential. 

M P D U K Mapa Pathirana is the Director General of the 

Department of External Resources of the Ministry of Finance and 

Planning. He is a class 1 Officer of the Sri Lanka Administrative 

Service counting 24 years of experience in Provincial 

Administration and Ministry of Finance and Planning. He holds a 

B.Sc. Special Degree in Estate Management and Valuation from 

the University of Sri Jayawardenapura and a Masters Degree in 

Commerce and Management in Economics from Lincoln 

University, New Zealand. He also has completed the Professional 

Part II examination of the Institute of Chartered Accountants. He 

has a wide experience in auditing and finance, mobilizing 

development financing from bilateral and multilateral financing 

agencies and implementing development projects and provincial 

and divisional administration levels. He also possesses wide 

experience in international relations gained during his tenure in 

the Diplomatic Services. 

8 


Annual Report of the Board of Directors 

The Directors are pleased to submit their Report together with the 

Audited Accounts for the year ended 31 March 2011. 

Principal Activities of the Company 

The principal activities of the Company are cultivation, 

manufacture and sale of black Tea, Rubber, Palm Oil and other 

crop. 

Review of Performance 

The Chairman’s and the Managing Director’s reviews contain a 

detailed account of the years’ operations and developments of 

the Group. 

Profit/(Loss) 

The net profit/(loss) for the year is Rs. 363,504,155/- 

Taxation 

A detailed statement of the income tax rates applicable is set out 

on pages 48 & 49. 

Dividend 

The Directors recommended a First & Final Dividend of 36 cents 

per share for the year ended March 31, 2011. 

The Directors are confident that the Company would meet the 

requirement of the Solvency test under Section 56(2) of the 

Companies Act No.7 of 2007 immediately after the payment of 

the first and final dividend is made. 

Capital & Reserves 

The Capital and the Reserves of the Company as at 31st March 

2011 is given below 

Shareholder Information 

Information relating to earnings, net assets, market price per 

share is given in the financial highlights and the shareholder and 

the investor information on pages 2 & 55 of the Annual Report. 

Corporate Governance 

The Company’s corporate governance practices are set out on 

pages12,13, 14 & 15. 

Major Shareholders 

The 20 largest shareholders of the Company as at 31 March 

2011 are given in the share information on pages 56 & 57 together 

with an analysis of the shareholding. 

Directors 

The names of the Directors of the Company as at the date of the 

Report are on Pages 7, 8 & 60. 

In terms of Article 92 of the Articles of Association of the Company, 

Dr. S A B Ekanayake and Mr. L N D S Wijeyeratne retire by rotation 

and being eligible stand for re-election and are being 

recommended by the Board for re-election at the forthcoming 

Annual General Meeting. 

Mr. Merrill J Fernando attained the age of 70 years on May 6, 

2000 and in accordance with Section 210(2) of the Companies 

Act No.7 of 2007, he vacates office at the forthcoming Annual 

General Meeting. In terms of Section 211 of the Companies Act 

No. 7 of 2007, a shareholder has given notice of an Ordinary 

Resolution to the Company that the age limit of Mr. Merrill J 

Fernando in terms of Section 210(1) of the said Companies Act 

No. 7 of 2007, shall not apply to him. The Directors recommend 

the adoption of the Ordinary Resolution. 

Details are as follows: 

Rs. 

Stated Capital 694,236,120.00 

Accumulated Profits 669,048,314.00 

1,363,284,434.00 

Share Split Information 

Mr. D V H de Mel resigned as a Director on 10 th August 2011. 

Directors’ Interest in Contracts 

The Directors have disclosed their interest in contracts of the 

Company at meetings of the Directors. The details of which are 

set out in the notes to the financial statements (Pages 51 & 52) 

Company subdivided every one (01) ordinary share into two (02) 

issued and fully paid ordinary shares on 19th October 2010. 

Consequently, the number of ordinary shares of the company 

increased from 36,433,215 to 72,866,430. 

Interest Register 

The Interest Register is maintained as per the requirements of the 

Companies Act No. 7 of 2007 and is available for inspection. 


9

Annual Report of the Board of Directors (contd.) 

Directors’ fees 

Auditors 

A sum of Rs 1,050,000 was paid as directors’ fees during the 

financial year 31st March 2011. 

The accounts for the year have been audited by Messrs. Ernst & 

Young who offer themselves for re-appointment. 

Directors’ shareholdings 

None of the Directors hold shares in the Company 

Post Balance Sheet Events 

The post Balance Sheet events have been disclosed in Note 27 

to the Accounts. 

The audit fee payable by the Company to the Auditors’ Messrs. 

Ernst & Young was Rs. 1,340,000/- 

As far as the directors are aware, the auditors do not have any 

relationship with the Company that would have an impact on their 

independence. 

By Order of the Board 

Annual General Meeting 

The Nineteenth Annual General Meeting of your Company will be 

held on 26th September 2011 at 3.00 p.m. 

Public Holding 

The percentage of shares held by the public as at March 31, 

2011 was 16.95% (March 31, 2010 –9.52%) 

Mr. J M S BRITO DR. R M FERNANDO AITKEN SPENCE 

CHAIRMAN MANAGING DIRECTOR CORPORATE 

FINANCE 

(PVT) LTD., 

Secretaries 

COLOMBO 


10 


Audit Committee Report 

Composition of Audit Committee 

Compliance 

The Audit Committee (AC) comprises of 2 Independent Non 

Executive Directors – M/s Dr. Anura Ekanayake (Chairman) and L 

N de S Wijeyeratne and Devan de Mel, Non Executive Director. 

The Chief Internal Auditor of Aitken Spence PLC (AS) and Mr. W 

M Ratnayake, Manager Internal Audit Plantations carry out 

regular internal audits on the estates and also attend the meetings 

by invitation. Further the Managing Director (MD), the Chief 

Executive Officer (CEO) and the Deputy General Manager (DGM 

- Finance) are also present at meetings. In addition, the estate 

General Managers and the estate Managers whose audit reports 

are reviewed and discussed are also present at the meetings. 

Activities 

The Committee ensures the adoption of effective internal controls, 

and compliance with the Sri Lanka Accounting Standards and 

the prevailing laws of the country based on guidelines provided 

by the respective regulatory authorities in all aspects and in the 

preparation of financial statements. 

External Audit 

The Committee has assessed the performance of the external 

auditors M/s Ernst & Young and is of the opinion that the external 

auditors do not have any relationship with the Company that 

would have an impact on their independence. 

The committee met during the financial year and reports from 

several estates arising from both field and factory operations 

including financial reports were reviewed and discussed. Having 

reviewed the audit reports of several estates, the Committee 

recommended several controls, risk mitigation strategies and 

internal monitoring mechanisms to mitigate frauds, discrepancies 

and other financial risks and issues that could occur on the 

estates and in the Company. In addition, the Audit Committee 

also reviewed the financial statements for the year and approved 

the accounts for signature. 

Dr. Anura Ekanayake 

Chairman 

Audit Committee 


Report of the Remuneration Committee 

The Remuneration Committee (RC) consists of Mr. Malik 

Fernando, Non Executive Director as Chairman and two Non 

Executive Independent Directors, M/s Dr. Anura Ekanayake and 

Lalit N de S Wijeyeratne as members who form the committee. 

The Non Executive Independent Directors are independent of 

management and are able to exercise independent judgment in 

the decisions of the committee, as they do not have any business 

or other relationships with the Company or its employees. The 

Managing Director (MD) of Elpitiya Plantations PLC (EPP) attends 

the meeting by invitation. The RC met once during the year under 

review prior to considering salary increases. 

The policy that was adopted for remuneration of employees was 

based on competitive remuneration structures of other plantation 

companies, and also with the objective of retaining professional 

and managerial talent and encouraging and motivating good 

performers to perform at a higher level. The Company has a 

formal performance appraisal system and regular evaluations are 

carried out to evaluate each employee’s performance. 

The remuneration policy adopted also takes into consideration, 

the cost of living and inflation and the basic needs of the 

employees particularly in the lower income groups. The 

performance of the Company and affordability together with 

economic conditions that prevail were also considered in 

recommending increases in remuneration. 

The RC having deliberated the performance of all employees in 

the Company, approved revisions of individual remuneration 

packages based on individual performance, industry norms and 

the contribution of the individuals in the performance of the 

Company. 


Chairman 

Remuneration Committee 



11

Corporate Governance 

The processes adopted by a Corporate to optimize profits without compromising on principles and standards thus ensuring that the 

Corporate’s objectives are achieved by adhering to such principles and practices, is good Corporate Governance. 

Hence, the Company has adopted the principles and best practices suggested jointly by the Institute of Chartered Accountants of 

Sri Lanka and the Securities and Exchange Commission of Sri Lanka and by the relevant regulatory bodies including the Colombo 

Stock Exchange to achieve its objectives and to ensure accountability to the shareholders and other stakeholders of the Company. 

The Company’s compliance with the Code of Best Practices on Corporate Governance is given below; 

A. DIRECTORS 

1. The Board of Directors 

Composition and Attendance at Board Meetings 

The Board as at 31 st March 2011 comprised of the following Directors; Two Executive Directors including the Chairman and 

the Managing Director and six other Non-Executive Directors. These Directors are named below and their profiles appear on 

pages 7 & 8 of this Report. Details of Directors’ shareholdings in the Company and Directorates in other related companies 

are given on pages 51 & 52 respectively. 

The Board meets at least four times a year to review the business performance of the Company. 

In addition to attending meetings, the Directors take decisions via circular resolutions. During the year under review the Board 

met 04 times. Attendance at these Meetings are given below. 

NAME 10.06.10 27.08.10 14.12.10 23.03.11 

Mr. J M S Brito ✓ ✓ ✓ ✓ 

Dr. R M Fernando ✓ ✓ ✓ ✓ 

Mr. Merrill J Fernando Excused Excused Excused Excused 

Mr. Malik J Fernando ✓ ✓ ✓ ✓ 

Mr. D V H De Mel (resigned w.e.f. 10.08.2011) ✓ ✓ Excused ✓ 

Mr. J H J Jayamaha 

✓ 

Dr. S A B Ekanayake ✓ Excused ✓ ✓ 

Mr. L N de S Wijeyeratne ✓ ✓ ✓ Excused 

Mr. M D U K Mapa Pathirana 

Excused 

The Directors communicate with one another regularly to discuss relevant business issues and to familiarize themselves with 

business opportunities, challenges, risks and controls that need to be instituted. 

Responsibilities of the Board of Directors 

The Board is responsible for: 

• Maximizing shareholder value. 

• Formulating, communicating, implementing and monitoring the business goals, objectives, strategies and policies of the 

Company. 

• Ensuring adherence to appropriate accounting policies and practices. 

• Setting priorities and communicating values and ethical standards for management. 

• Ensuring proper risk management and audit systems covering all aspects of the business are in place and are 

implemented. 

12 


Corporate Governance (contd.) 

• Ensuring due compliance with applicable laws of the country and institute best practices on ethical, legal, health, 

environmental and safety standards for the Company. 

• Reviewing and approving the Operational and Financial Budgets and monitoring performance against the Budgets. 

• Reviewing and approving major investments and business proposals recommended by the Management Committee 

• Approving the annual and interim Financial Statements and recommending dividends for approval by the shareholders. 

• The Board is responsible ultimately, for the Company’s financial performance. 

• The Directors obtain independent professional advice, whenever required at the Company’s expense in discharging 

their duties. 

. 

2. Chairman and Managing Director 

The functions of the Chairman and of the Managing Director are distinct and separate which ensures the balance of power 

and authority within the Company. 

3. The Chairman’s Role 

The Chairman conducts all Board Meetings and ensures, 

• The effective discharge of the Board’s functions. 

• The effective participation by the individual directors to make their contribution on matters under consideration prior to 

taking decisions. 

• The balance between the Executive and Non-Executive Directors is maintained and views considered and ascertained. 

• The Board is in complete control of the Company’s affairs and alert to its obligations to all shareholders and stakeholders. 

4. Board Balance 

The balance of Executive and Non-Executive Directors on the Board ensures that decision making is transparent and not 

dominated by any individual or small group. 

The Board comprised of six Non-Executive Directors of whom two are independent Non-Executive Directors. Their profiles 

reflect their caliber and the weight their views carry in Board deliberations. The Non-Executive Directors do not get involved 

in the day to day management and are free from any relationship that can interfere with the affairs of the Company. 

5. Financial Acumen 

The Chairman is a fellow member of the Institute of Chartered Accountants of London and Wales, and has a Degree in Law 

and a Moters Degree in Business Administration. The Board also includes another Senior Chartered Accountant. Hence, the 

Board possesses the necessary knowledge and competence to provide guidance on matters of finance. 

6. Company Secretaries 

All Directors have access to the Secretaries to the Company who ensure Board Procedures are followed, applicable rules 

regulations are complied with and appropriate facilities are available for the proper conduct of Meetings. 

7. Supply of information 

Directors are furnished with monthly reports of performance and are given appropriate information and board papers well 

in advance of Board Meetings to study the matters that would be discussed. This enables Board Members to actively 

participate at Board Meetings. The Chairman ensures that all Directors are adequately briefed on issues arising at Meetings. 

8. Appointment and Re-election of Directors 

A formal and transparent procedure is adopted for the appointment of Directors to the Board. Upon the appointment of 

a Director, the Company discloses same to the Colombo Stock Exchange together with a brief resume of such Director 

containing details with regard to his expertise. 


13


The Directors are elected by the shareholders of the Company in terms of the Articles of Association. The Articles of Association 

of the Company empower the Board of Directors to either fill a casual vacancy to the directorate or appoint additional 

Directors. Directors so appointed hold office until the next Annual General Meeting at which they are eligible for election. 

The Articles require one-third of the Directors in office to retire at each Annual General Meeting. The Directors to retire each 

year are those who have been longest in office since their re-appointment. Retiring Directors are eligible for re-election by the 

shareholders. 

The Managing Director does not retire by rotation. 

B. DIRECTORS’ REMUNERATION 

Remuneration Committee 

The composition of the Remuneration Committee satisfies the requirements laid down in the Listing Rules of the Colombo 

Stock Exchange. The Remuneration Committee consists of : 

Mr Malik J Fernando (Chairman) - Non Executive Director 

Dr Anura Ekanayake - Independent Non Executive Director 

Mr Lalit N de S Wijeyeratne - Independent Non Executive Director 

The Remuneration Committee is entrusted with the responsibility of formulating and reviewing the remuneration packages of 

Executive Directors and Executive employees. 

Disclosure of Remuneration 

The report of the Remuneration Committee is given on Page 11 of this Annual Report. The total of the Directors’ Remuneration 

is under Note 21 to the Financial Statement. 

C. RELATIONS WITH SHAREHOLDERS 

The Board encourages the active participation of all the shareholders at the Annual General Meeting. 

Shareholders are free to communicate with the Company whenever it is considered necessary. Such communication can 

be either with the Chairman or with the Managing Director or the Chief Executive Officer or the Secretaries of the Company 

depending on the matters being addressed. 

1. Constructive use of the Annual General Meeting 

The Board considers the Annual General Meeting as an opportunity to communicate with shareholders, and encourages 

their participation. The Board is willing to answer questions raised by the shareholders at the General Meetings of the 

Company and maintains an appropriate dialogue with them. 

2. Major Transactions 

There were no transactions during the year under review which was within the definition of ‘Major Transactions’ in terms 

of the Companies Act. 

D. ACCOUNTABILITY AND AUDIT 

1. Financial Reporting 

The Board of Directors confirm that the Financial Statements of the Company have been prepared in a meaningful 

manner and are in accordance with the Sri Lanka Accounting Standards and the Companies Act. No. 07 of 2007. The 

Company has duly complied with all the requirements prescribed by the regulatory authorities including the Colombo 

Stock Exchange and the Registrar of Companies. 

The Annual Report includes descriptive, non-financial content through which an attempt is made to provide stakeholders 

with information to assist them to make more informed decisions. 

The Statement of Directors’ Responsibilities in relation to the Financial Statements is set out on Page 22. 

14 



2. Audit Committee 

The Audit Committee is a sub committee of the Board of Directors of Elpitiya Plantations PLC. The Committee comprised 

of three Non-Executive Directors of whom one member is a Fellow of the Institute of Chartered Accountants of Sri Lanka. 

The Audit Committee is headed by an Independent Non-Executive Director. The names of the members of the Audit 

Committee are as follows: 

Dr Anura Ekanayake (Chairman) - Independent Non-Executive Director 

Mr Lalit N de S Wijeyeratne - Independent Non-Executive Director 

Mr Devan de Mel - Non-Executive Director (resigned w.e.f. 10.08.2011) 

The Audit Committee is entrusted with the responsibility of monitoring and evaluating the internal control functions, 

evaluating the performance of the External Auditors and make their recommendations to the Board on their reappointment 

or removal which is subject to the approval of the shareholders at the Annual General Meeting. 

The Audit Committee is also entrusted with the responsibility of monitoring and guiding the Internal Audit function and 

reviewing the effectiveness of the internal controls. 

The Audit Committee Report appears on Page 11 of this report. 

3. Internal Control 

The Company has set out effective systems of control including Financial, Operational and Compliance. 

The Company’s Internal Audit Team mainly focuses on transaction assurances, positive assurances, internal controls, 

routine checks, special reviews and evaluations. The team also assists the Management in evaluating various Operational 

Risks and ensures that the systems and controls are in place. 

The Board of Directors is assured by the Internal Audit Team of the adequacy of the internal controls, compliance with 

the code of Business Ethics and other applicable corporate policies. 

The Board is fully conscious that any internal control system contains inherent limitations and no system of internal 

controls could provide absolute assurance against the occurrence of material errors, poor judgement in decision making, 

human errors, losses, frauds or irregularities. The Board has taken appropriate action to minimize such situations. 

E. OTHER 

1. Organization 

The Board has put in place an organizational structure with formally defined lines of responsibility, reporting and 

appropriate limits of authority. There are established procedures for planning and investment, risk management and for 

information and reporting systems to monitor the Company’s businesses. 

2. Management Committee 

The Management Committee meets monthly to evaluate the strategic plans, actual performance, and corrective actions 

with a view to achieve the desired goals. The Committee also periodically reviews the Company’s various Policies 

involving agriculture, manufacture, personnel, remuneration, asset management, and other controls. The decisions of the 

Management Committee meetings are communicated to the Estate Management through the Cluster General Managers 

at the monthly Cluster Meetings with the Managers. 

3. Managing Agent 

Aitken Spence Plantation Managements Limited (ASPM) has been appointed as the Managing Agent, since the 

acquisition of the Company in August 1997. ASPM also owns the controlling interest of the Company. 

The Board of ASPM has clear objectives in advising the Board of the Company, on strategic and operational decisions 

as the Managing Agents of the Company. The Board of ASPM also meets at least four times a year to review the 

performance of the Company. 


15

CORPORATE SUSTAINABILITY REPORT 

At Elpitiya Plantations PLC, sustainability plays a key role and 

strategies have been implemented to meet these objectives. 

We have a well diversified portfolio of businesses/ crops 

which increases the bio-diversity of the estates and ensures 

environmental conservation in achieving our goal of long term 

sustainability. 

From the inception, through a visionary corporate plan the 

company has grown in terms of Asset value, Profitability and 

the quality of the Human Capital. We also developed strategies 

through the years towards strengthening multiethnic harmony in 

our workforce. 

• Elpitiya Plantations in association with the Merrill J. 

Fernando Charitable Foundation provides educational 

scholarships to children of estate workers. This includes 

scholarships to students who have been accepted to 

university and students who have performed well at 

their GCE Ordinary Examinations. In the year 2010/11, 

3 students qualified to receive scholarships to continue 

their studies from GCE Ordinary level to Advanced level 

of Rs. 750 per month for 2 years and 5 students who 

qualified to enter University for higher studies were 

granted scholarships of Rs. 1500 monthly for 3 years. 

Currently, there are 20 scholarship recipients. 

Social Development. 

• High standards of quality in the health and welfare for 

the children and a series of activities carried out towards 

improving the literacy of estate workers’ children. Total 

spending to maintain the creche facilities in all estates 

in 2010/11 was Rs. 24 Million. Gulugahakande Child 

Development Center was placed first at the all island 

child development center competition Organized by 

PHDT beating 430 estates. 

• The plantation sector recognizes that its success is 

linked inevitably to its workers, and as such, the health 

of employees is of paramount importance. During the 

year, Elpitiya, Deviturai, Bentota, Talgaswella, Ketandola, 

New Peacock and Nayapane Estates organized free 

medical camps and eye camps for employees and 

treated 820 employees and their family members, 

and also conducted a” Well Woman Clinic” and a 

workshop to create awareness on Sexually Transmitted 

Diseases. Sheen Estate conducted Ante Natal Clinics, 

Expanded Immunization and Contraception clinics 

for employees which were also extended to villagers. 

Similar programmes were also held at Gulugahakande, 

Ketandola, Talgaswella, and Dunsinane Estates. 

• Plantations provide health facilities including pre 

natal and antenatal clinics on all estates with free 

vaccination and medical checkups. Each estate has a 

medical officer who looks into these programmes. The 

company has also made available four (4) ambulances 

to minimize the time taken to transport serious patients 

to base hospitals. 

• During pregnancy, female workers are given ‘light 

work’ at a location close to their homes and a ‘Nursing 

Interval’ for 12 months is extended to all new mothers. A 

qualified mid wife looks after the wellbeing of expecting 

mothers on every estate. 

• Our plantations have encouraged the community spirit 

by organizing and supporting events such as annual 

trips, get-togethers, pilgrimages and shramadana 

campaigns on a regular basis. 

16 


CORPORATE SUSTAINABILITY REPORT (contd.) 

• With the aim of improving the quality of life of plantation 

staff, many awareness programmes have been 

conducted, specifically addressing issues such as 

Dengue prevention at Lelwela, New peacock, Sheen 

and Talgaswella Estates, and pre-natal and ante-natal 

care on Talgaswella, New Peacock and Dunsinane 

Estates. 

• The secretaries of Aitken Spence led by Mrs.Daisy 

Kunanandham in their special annual project, donated 

educational and health care utenciils for the children 

of Dunsinane, Sheen, Fernlands and Meddacombra 

Estates. Over 1600 students benefited from these 

activities. 

• The company has collaborated with the Ministry of 

Livestock & Rural Community Development in a special 

project to concrete roads in the Nuwara Eliya Region. 

The full length of the roads developed by Dunsinane, 

Fernlands and Sheen Estates was 32 kilometers 

at a approximate cost of Rs. 43.5 Million in the 

corresponding year. 

• Skills development and prevention of alcoholism 

programmes were conducted for the members of 

Quality Circles in utilizing the funds granted by the PDP 

aiming at prevention of Absenteeism on our plantations. 

• Total spending on developing field rest rooms, water 

schemes, play grounds, places of worship, social 

development centres, re-roofing and rehabilitating 

internal roads was in the rang of Rs. 55.3 Million. 


17


Environmental Conservation 

In the context of the plantation sector, environmental conservation 

is two pronged – controlling the soil erosion, soil pollution, water 

pollution and land loss caused by the process of cultivation, and 

managing the energy consumed by estates, and the Tea, Rubber 

and Palm Oil factories. 

The team at Elpitiya is in the process of gradually replacing 

artificial fertilizer with organic fertilizer to minimise the impact to 

the soil, by moving into site specific fertilizing, which provide only 

the required nutrients. Compost pits are also maintained in the 

estates for this purpose with the long term goal of replacing one 

round of artificial fertiliser with compost/ organic fertiliser on all 

the estates. 

At Deviturai Estate, a new secondary level wastewater treatment 

unit, including anaerobic and aerobic tanks and a clarifier tank, 

was built . This followed tests carried out on a collection of water 

samples for contamination levels. Henceforth, water samples will 

be tested randomly for Biochemical Oxygen Demand (BOD) and 

Chemical Oxygen Demand (COD) levels from Deviturai as well as 

other estates to identify and mitigate significant impacts to the 

environment. 

The plantations also grow leguminous cover crops in order to 

improve soil properties, reduce soil erosion and to control the 

growth of weeds which would otherwise require chemicals and 

weedicides. 

Tea estates of Elpitiya Plantations do not produce effluents 

or waste water that can be considered significant to require 

immediate attention. The estate management has undertaken 

to minimise, and eventually eliminate, the spraying of pesticides 

to control tea tortrix by pursuing biological methods such as 

collection of egg masses and using moth traps. 

Elpitiya Plantations works with their communities to reduce their 

solid waste generation and also harvests rain water to improve 

moisture content in the micro environment. 

18 



Our plantations span over 4410 Hects of mature area and 1201 Hects of immature area and none of our estates are within a 20km 

radius to any nature reserve or protected area. Elpitiya Plantations have a continuous Forestry Management programme which has 

helped to preserve and improve the bio diversity in the plantations and enhance their environmental value at large. Currently over 

700hects of forestry has been planted by the Company. The forestry management programme includes the planting of Eucalyptus 

Grandis and other species to fuel the Tea Manufacturing process, instead of using nonrenewable fuels. 

Certifications 

The following Tea Factories are certified for I.S.O 22000 which ensures the quality of tea manufactured. 

New Peacock, Dunsinane, Nayapane, Deviturai and Talgaswella. 

Nayapane is proud to be the first tea factory in Sri Lanka to be certified for ISO 9001 back in 1998. 

All the Plantations are in the process of achieving I.S.O 14001 in complying with Environmental standards. Dunsinane Tea factory was 

honored with a merit award at the Taiki Akimoto 5S awards and the only plantation company to win an award in this competition. 


19

Risk Management 

Risk management refers to a coordinated set of activities and 

methods that is used to direct an organization and to control the 

many risks that can affect its ability to achieve objectives. 

Risk and reward bear a direct relationship to each other. 

Managing risk in this ever changing dynamic business 

environment for any organization is a challenge. As the diversity 

of an organization increases, so does the complexity of risk 

management. The Elpitiya Plantations PLC is of the view that a 

disciplined approach to risk management is important in ensuring 

that the company only accepts risks that are adequately 

compensated for when pursuing its strategic objectives. Our 

goal is to optimize the tradeoff between risk and reward. 

The Board of Directors of Elpitiya Plantations PLC has placed an 

effective risk management system to minimize, monitor and 

control the impact of adverse events or to maximize the realization 

of opportunities. 

Operational Risk 

An operational risk is, as the name suggests, a risk arising from 

execution of a company’s business functions. It is a very broad 

concept which focuses on the risks arising from the people, 

systems and processes through which a company operates. 

A sound system of internal controls is in place to mitigate the 

operational risk. Periodic checks are carried out at the estate 

level to ensure the quality and the cost effectiveness of the 

system of controls. In addition, the Company’s assets are 

adequately insured to minimize any financial losses. 

Product Quality Risk 

This is viewed as the inability to maintain consistency in quality of 

the product which causes low prices and poor demand. 

Nayapane & New Peacock Estates which are located in 

Pussellawa Region and Dunsinane Estate in Pundaluoya Region 

have obtained ISO 22000 Food Safety Certification and Deviturai, 

Polgahawila and Talgaswella Tea Factories located in Low 

Country Region are working towards obtaining ISO 22000 Food 

Safety Certification. The Marketing Division is in close contact 

with all Estate Managers ensuring that product quality is 

maintained at the highest levels on a consistent basis. The HR 

Division is providing ongoing training to all sectors such as Field 

Workers, Factory Workers and Executives on the aspects of the 

quality and adopting TQM procedures 

Interest Rate Risk 

Interest rate risk is the risk of financial loss that investors, 

businesses and borrowers face when interest rates rise. 

The Company is utilizing the long term funds at concessionary 

rates available under the ADB (Asian Development Bank) line of 

credit, Plantation Trust Fund and E-Friends loan scheme to its 

fullest potential. The company has also obtained multi facilities 

from various banks under different terms and conditions which 

allow to maintain appropriate mix of floating and fixed, different 

maturities, etc. 

Negotiations with banks take place often time to obtain the best 

possible interest rate for company borrowings. 

Human Risk 

Human risk is the potential that a chosen action or activity 

including the choice of inaction will lead to an undesirable 

outcome. The notion implies that a choice having an influence on 

the outcome exists. Potential losses themselves may also be 

called “risks”. Almost any human endeavour carries some risk, 

but some are much more risky than others. 

As the industry is highly labor intensive and unionized low 

productivity, work stoppages, go slows, strikes, etc. would 

adversely affect the overall performance of the Company. A 

Collective Agreement has been signed between the Trade Unions 

and the Employer’s Federation of which the Company is a 

member. This ensures industrial peace between the Managements 

and Trade Unions. In addition, continuous training and 

development programs including welfare are carried out to 

motivate, develop and retain the human resource of the Company, 

Legal Risk 

The potential loss that may occur to a business as a result of 

insufficient, improperly applied, or simply unfavorable legal 

proceedings in the country in which the business is operate. 

The Company with the assistance of the Aitken Spence Group 

Legal Department, Company Secretaries and Registrars 

endeavor compliance with all legal, company secretarial, stock 

market and other regulations. 

Liquidity Risk 

Probability of loss arising from a situation where there will not be 

enough cash and/or cash equivalents to meet financial 

obligations. 

Liquidity is directly linked with the performance of the Company. 

Finance division of the Company strives to ensure sufficient funds 

are available to meet the debt commitments and working capital 

requirements. Loans and Overdraft facilities are arranged with 

banks to meet any cash flow deficits. 

Climatic Changes 

This risk arises due to adverse climatic changes which affect the 

performance of the Company 

The Company adopts best agricultural practices, planting of 

selected cultivars in order to mitigate loss of crop due to 

unfavorable climatic changes. In addition, various research 

programs on soil & foliar analysis for fertilizer recommendations, 

shade-planting, fuel wood planting, pest & disease control, etc. 

are carried out together with the Tea and Rubber Research 

Institutes. 

20 


Management Team 

Head Office 

Left to right Mr Athula Fernando (General Manager - Ceylon Choice Operation), Mr A Segarajasingam (General Manager - Marketing), 

Mr A L W Goonewardena (Chief Executive Officer), Mr B Bulumulla (Deputy Chief Executive Officer), Mr P S Dissanayake (General 

Manager - Engineering & Projects), Mr Ruwan Nissanka (Deputy General Manager - Finance) 

Estates 

UC - Cluster 1 

Up Country (UC) 

UC - Cluster 2 

Mr R K Gunasekera, Manager – Sheen Estate; 

Mr S K S B Pahathkumbura, General Manager 

Cluster I – Up Country & Dunsinane Estaste; M r D M S R Dissanayake, 

Manager – Meddecombra Estate; 

& Mr H Wickremasinghe, Manager – Fernlands Estate 

Mr M I Izzadeen, General Manager – Cluster II – Up Country & 

New Peacock Estate & 

Mr K R Mathavan, Manager – Nayapane Estate 

Low Country (LC) 

Mr N D Ratnayake, Manager – Deviturai Estate; Mr U A Karunanayake, Manager – Lelwalla Estate; Mr D C Kumarage 

Manager – Bentota Estate; Mr A G Geethkumara, General Manager – Low Country & Talgaswella Estate, 

Mr M H P Gunaratne, Manager – Katandola Estate; Mr D T Fernando, Deputy Manager in charge, Gulugahakande 

Estate; & Mr R R Vanderputt, Manager - Elpitiya Estate 


21

Statement of Directors’ Responsibilities 

The Companies Act No. 7 of 2007 requires the Directors of the 

Company to be responsible for the preparation and presentation 

of the financial statements to the shareholders in accordance 

with the relevant provisions of the Companies Act No.7 of 2007 

and the Sri Lanka Accounting and Auditing Standards Act No 

15 of 1995 and the Listing Rules of the Colombo Stock 

Exchange. 

The Directors confirm that the financial statements of the 

Company for the year ended 31st March 2011 incorporated in 

this report have been prepared in accordance with the 

Companies Act No. 7 of 2007, Sri Lanka Accounting and 

Auditing Standards Act No 15 of 1995 and the Listing Rules of 

the Colombo Stock Exchange. 

In the preparation of the financial statements, the Directors have 

selected the appropriate accounting policies and have applied 

them consistently. Any material departures from accounting 

policies have been disclosed and explained in the financial 

statements. 

The Directors have adopted the going concern basis in preparing 

the financial statements. The Directors having considered the 

Company’s business plans, and a review of its current and future 

operations, are of the view that the Company has adequate 

resources to continue in operation. 

The Directors accept the responsibility to ensure that the 

Company maintains adequate and accurate records which 

reflect the true financial position of the Company. 

The Directors have taken reasonable steps to safeguard the 

assets of the Company. The Directors have instituted appropriate 

systems of internal controls in order to prevent and detect fraud 

and other irregularities. 

The Directors have provided the Auditors with every opportunity 

to carry out any reviews and tests that they consider appropriate 

and necessary for the performance of their responsibilities. 

The Directors confirm to the best of their knowledge that all 

taxes, levies and financial obligations of the Company have been 

either duly paid or adequately provided for in the financial 

statements. 

By Order of the Board, 

Sgd. 

AITKEN SPENCE CORPORATE FINANCE (PVT) LTD 

Secretaries 

Colombo 


22 


Auditors’ Report 

Chartered Accountants 

201 De Saram Place 

P. O. Box 101 

Colombo 10 

Sri Lanka. 

Tel : (0) 11 2463500 

Fax Gen : (0) 11 2697369 

Tax : (0) 11 5578180 

eysl@lk.ey.com 

INDEPENDENT AUDITORS’ REPORT 

TO THE SHAREHOLDERS OF ELPITIYA PLANTATIONS PLC 

Report on the Financial Statements 

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 audited the accompanying Financial Statements of 

Elpitiya Plantations PLC which comprise the Balance Sheet as 

at March 31, 2011 and the Income Statement, Statement of 

Changes in Equity and Cash Flow Statement for the year then 

ended, and a summary of significant Accounting Policies and 

other explanatory notes. 

We have obtained all the information and explanations which to 

the best of our knowledge and belief were necessary for the 

purpose of our audit. We therefore believe that our audit provides 

a reasonable basis for our opinion. 

Opinion 

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 

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

Company maintained proper accounting records for the year 

ended March 31, 2011, and the Financial Statements give a true 

and fair view of the Company’s state of affairs as at March 31, 

2011 and its profit and cash flows for the year then ended in 

accordance with Sri Lanka Accounting Standards. 

Report on Other Legal and Regulatory Requirements 

In our opinion, these Financial Statements also comply with the 

requirements of Section 151(2) of the Companies Act No. 07 of 

2007. 

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 misstatements. 

24 May 2011 


Partners : 

A D B Talwatte FCA FCMA M P D Cooray FCA FCMA R N de Saram ACA FCMA Ms. Y A De Silva ACA W R H Fernando FCA FCMA 

W K B S P Fernando FCA ACMA A P A Gunasekera FCA FCMA A Herath FCA D K Hulangamuwa FCA FCMA LLB (Lond) 

H MA Jayesinghe FCA FCMA Ms. G G S Manatunga ACA Ms. L C G Nanayakkara FCA FCMA B E Wijesurya ACA ACMA 


23

Balance Sheet 

As at 31 st March 2011 

ASSETS 

Non Current Assets 

Note 2011 2010 

Rs. 

Rs. 

Leasehold Property 3 180,186,524 185,452,948 

Immovable estate assets on finance lease 

(Other than leasehold property) 4 202,632,518 218,180,073 

Tangible assets other than immature/mature plantations 5 459,939,769 458,614,117 

Immature/mature plantations 6 2,105,763,627 1,971,092,682 

Long Term Investment - (Unquoted) 7 97,776,444 77,276,420 

Amounts due from related companies 10.1 40,000,000 - 

3,086,298,882 2,910,616,240 

Current Assets 

Inventories 8 326,469,489 190,036,643 

Trade and other receivables 9 154,135,778 140,072,753 

Amounts due from related companies 10 26,336,535 54,932,532 

ESC Recoverable 3,700,926 18,040,934 

Cash and Bank balances 69,842,686 371,019,291 

580,485,414 774,102,153 

TOTAL ASSETS 3,666,784,296 3,684,718,393 

EQUITY AND LIABILITIES 

Capital and Reserves 

Stated Capital 11 694,236,120 694,236,120 

Accumulated Profits 669,048,314 323,760,772 

Total Equity 1,363,284,434 1,017,996,892 

Non Current liabilities & Deferred Income 

Interest Bearing Loans & Borrowings 12 831,279,460 953,671,551 

Retirement Benefit Obligations 13 464,154,667 448,410,122 

Deferred Income 14 206,711,663 186,516,926 

Net liability to the Lessor payable after one year 15 187,412,977 190,104,072 

1,689,558,767 1,778,702,671 

Current Liabilities 

Interest Bearing Loans & Borrowings (Including Overdraft) 12 308,304,543 312,805,411 

Net liability to the Lessor payable within one year 15 2,691,095 2,587,592 

Trade and other payables 16 278,426,690 246,761,117 

Amounts due to related companies 17 24,518,767 325,864,710 

613,941,095 888,018,830 

Total Equity and Liabilities 3,666,784,296 3,684,718,393 

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

Chief Financial Officer 

The board of directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of 

the board by 

DIRECTOR 

MANAGING AGENT 

1 1 

2 2 

The accounting policies and notes on pages 28 through 52 form an integral part of the Financial Statements. 

Colombo, 

24 May 2011 

24 


Income Statement 

Year Ended 31 st March 2011 

Note 2011 2010 

Rs. 

Rs. 

Revenue 18 2,601,501,029 2,215,126,092 

Cost of Sales (2,007,069,199) (1,973,914,603) 

Gross Profit 594,431,830 241,211,489 

Other Income And Gains 19 99,055,529 81,097,740 

Administration Expenses (159,319,697) (143,037,064) 

Management Fee & Workers Profit Share (40,059,177) (10,202,236) 

Finance Cost 20 (144,583,738) (144,075,445) 

Share of Profit/ (Loss) of Joint Ventures 7.1 34,707,997 38,822,310 

Profit/(Loss) Before Taxation 21 384,232,743 63,816,794 

Income Tax Expense 22 (20,728,587) - 

Net Profit/(Loss) for the Year 363,504,155 63,816,794 

Basic Earnings / (Loss) Per Share 23 4.99 1.23 



25

Statement Of Changes In Equity 


Stated Capital Accumulated Total 

Profit/ ( Loss ) 

Rs Rs Rs 

Balance as at 31 March 2009 350,000,010 259,943,978 609,943,988 

Rights Shares Issued 344,236,110 - 344,236,110 

(11,474,537 @ 30/- per share) 

Net Profit/(Loss) for the year - 63,816,794 63,816,794 

Balance as at 31 March 2010 694,236,120 323,760,772 1,017,996,892 

Net Profit/(Loss) for the year - 363,504,155 363,504,155 

Dividends - (18,216,613) (18,216,613) 

Balance as at 31 March 2011 694,236,120 669,048,314 1,363,284,434 


26 


N note 2011 2010 

Rs. 

Rs. 

CASH FLOWS FROM OPERATING ACTIVITIES 

Net Profit/(Loss) before Taxation 384,232,743 63,816,794 

ADJUSTMENTS FOR 

Depreciation/Amortization 21 103,809,009 88,215,186 

Provision for Defined Benefit Plans 13 78,468,529 172,695,485 

Amortization of Grants 14.1 (10,203,521) (7,539,513) 

Share of Profit/ (Loss) of Joint Ventures (34,707,997) (38,822,310) 

Finance Cost 20 144,583,738 144,075,445 

Deferred Income from Sublease 14.2 (9,748,782) (11,005,541) 

Provision for Doubtful Debtors 13,000,000 7,576,810 

Operating Profit before Working Capital Changes 669,433,718 419,012,356 

(Increase)/Decrease in Trade and other Receivables (14,063,025) (56,460,037) 

(Increase)/Decrease in Amounts due from Related Companies 15,595,997 (4,933,110) 

(Increase)/Decrease in Inventories (136,432,846) (89,946,700) 

Increase/(Decrease) in Trade and Other Payables 35,811,650 (77,770,634) 

Increase/(Decrease) in Amounts due to Related Companies (301,345,943) (92,472,871) 

Cash Generated from Operations 268,999,551 97,429,004 

Cash Received as Sublease of Land 1,292,901 13,330,819 

Finance Cost Paid (102,416,858) (119,830,419) 

Defined Benefit Plan Cost Paid 13 (62,723,984) (51,013,346) 

Grants Received 14.1 38,854,140 42,046,975 

Economics Service Charges Paid (6,388,578) (3,817,432) 

Net Cash from Operating Activities 137,617,172 (21,854,399) 

CASH FLOWS FROM INVESTING ACTIVITIES 

Field Development Expenditure 6 (175,700,796) (185,232,716) 

Purchase of Property, Plant & Equipment (32,490,835) (83,290,950) 

Dividend Received 14,207,983 8,357,661 

Right Issue on Ordinary Shares - 344,236,110 

Loan Given to Related Party (40,000,000) - 

Investment in shares (10) - 

Net Cash used in Investing Activities (233,983,658) 84,070,105 

CASH FLOWS FROM FINANCING ACTIVITIES 

Cash Flow Statement 


Payment of Government Lease Rentals (44,727,217) (27,383,428) 

Proceeds from Loans 104,589,181 860,150,198 

Settlement of Loan (230,068,462) (399,877,135) 

Dividend Paid (18,216,613) - 

Other Lease Rental Paid (16,604,925) (10,442,841) 

Net Cash (used in) / from Financing Activities (205,028,036) 422,446,794 

Net Increase/(Decrease) in Cash & Cash Equivalents (301,394,522) 484,662,500 

A. Cash & Cash Equivalents at the beginning of the year 332,626,350 (152,036,150) 

B. Cash & cash Equivalents at the end of the year 31,231,828 332,626,350 

NOTE A 

Cash & Cash Equivalents at the beginning of the year 

Cash & Bank Balances 371,019,291 20,607,486 

Bank Overdrafts (Note 12) (38,392,941) (172,643,636) 

332,626,350 (152,036,150) 

NOTE B 

Cash & Cash Equivalents at the end of the year 

Cash & Bank Balances 69,842,686 371,019,291 

Bank Overdrafts (Note 12) (38,610,858) (38,392,941) 

31,231,828 332,626,350 



27

1. CORPORATE INFORMATION 

Notes to the Financial Statements 


Domicile and Legal Form 

Elpitiya plantations PLC is a limited liability Company incorporated and domiciled in Sri Lanka, under the Companies Act No. 

17 of 1982 (The Company re-registered under the Companies Act No. 07 of 2007) in terms of the provisions of the conversion 

of public Corporations or Government Owned Business undertakings into public Companies Act No. 23 of 1987. The 

registered office of the Company is located at No. 315, Vauxhall Street, Colombo – 02, and Plantations are situated in the 

planting districts of Nuwera Eliya and Galle. 

1.2 Principal Activities and Nature of Operations 

During the year, the principal activities of the Company were cultivation, manufacture and sale of black Tea, Rubber, Oil Palm 

and other crops. 

1.3 Parent Enterprise 

The Company’s parent undertaking is Aitken Spence Plantation Managements Limited. 

1.4 Date of Authorisation for Issue 

The Financial Statements of Elpitiya Plantations PLC for the year ended 31 March 2011 were authorised for issue in accordance 

with a resolution of the Board of Directors on 24 May 2011. 

2.1 BASIS OF PREPARATION 

These financial statements presented in Sri Lanka Rupees have been prepared on a historical cost basis except for certain 

Property, Plant and Equipment which are stated at revalued amounts. The Financial Statements are prepared in Sri Lankan 

rupees and all values are rounded to the nearest rupee. 

2.1.1 Statement of compliance 

The Financial Statements of Elpitiya Plantations PLC have been prepared in accordance with the Sri Lanka Accounting 

Standards (SLAS) adopted by the Institute of Chartered Accountants of Sri Lanka (ICASL) and also in compliance with the 

requirements of the Companies Act No 07 of 2007. 

2.1.2 Going Concern 

The Directors have made an assessment of the Company’s ability to continue as a going concern and they do not intend either 

to liquidate or to cease trading. 

2.1.3 Comparative Information 

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous 

year unless otherwise stated. 

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS 

Judgments 

In the purpose of applying the company’s accounting policies , management has made the following judgments , apart from 

those involving estimations , which has the most significant effect on the amounts recognized in the financial statements. 

28 




Inventory valuation – Produce stock 

Company has valued part of unsold produce stock at since realized prices. The balance unsold stock remained as at the 

balance sheet date valued at an estimated selling prices based on most recent selling prices available subsequent to the year 

end. 

Estimates and Assumptions 

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that 

have a significant risk of causing a material adjustments to the carrying amounts of assets and liabilities within the next 

financial year are discussed below. 

Impairment of Goodwill 

The company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the “value in 

use” of the cash generating units to which the goodwill is allocated .Estimating a value in use amount requires management 

to make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount 

rate in order to calculate present value of those cash flows. However, at present company does not have any recorded 

Goodwill balance as at the balance sheet date. 

Deferred Tax Assets 

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available 

against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred 

tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax 

planning strategies. The carrying value of the unrecognised deferred tax assets at 31 March 2011 was Rs.188,650,437/- 

(2010. Rs. 471,116,273/-). 

Defined Benefit Plans 

The cost of defined benefit pension plan is determined using actuarial valuations. The actuarial valuation involves making 

assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future 

pension increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. The net 

employee liability at 31 March 2011 is Rs. 464,154,667/- (2010 Rs. 448,410,122/-). Further details are given in Note 13. 

2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

2.3.1 Foreign Currency Translation 

The financial statements are presented in Sri Lankan rupees, which is the Company’s functional and presentation currency. 

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction. 

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange 

ruling at the balance sheet date. All differences are taken to profit or loss with the exception of differences on foreign currency 

borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal 

of the net investment, at which time they are recognised in profit or loss. Tax charges and credits attributable to exchange 

differences on those borrowings are also dealt with in equity. Non monetary items that are measured in terms of historical cost 

in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non monetary items 

measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was 

determined. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying 

amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and 

translated at the closing rate. 


29



2.3.2 Taxation 

a) Current Taxes 

Current income 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. The tax rates and tax laws used to compute the 

amount are those that are enacted or substantively enacted by the balance sheet date. 

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. 

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement 

b) Deferred Taxation 

Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the 

tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. 

Deferred income tax liabilities are recognised for all taxable temporary differences: 

• except where the deferred income tax liability arises from goodwill amortisation or the initial recognition of an asset or 

liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting 

profit nor taxable profit or loss; and 

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint 

ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that 

the temporary differences will not reverse in the foreseeable future. 

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets 

and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible 

temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised: 

• except where the deferred income tax asset relating to the deductible temporary difference arises from the initial 

recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, 

affects neither the accounting profit nor taxable profit or loss; and 

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in 

joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will 

reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be 

utilised. 

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it 

is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be 

utilised. 

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset 

is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the 

balance sheet date. 

Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the income statement. 

30 




2.3.3 Borrowing Costs 

Borrowing costs are recognised as an expense in the period in which they are incurred, except to the extent where borrowing 

costs that are directly attributable to the acquisition, construction, or production of a qualifying asset that takes a substantial 

period of time to get ready for its intended use or sale is capitalised as part of that asset. The amount of borrowing costs 

eligible for capitalisation is determined in accordance with SLAS 20-Borrowing Costs – Allowed Alternative Treatment. The 

capitalisation rate of 11% (2010– 22%) percent was used. 

Borrowing costs amounting to Rs. 31,131,878/= (previous year Rs. 97,507,174/=) incurred on borrowings obtained to meet 

expenses relating to immature plantations have been capitalised as part of the cost of the immature plantations. 

2.3.4 Intangible Assets 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a 

business combination is fair value as at the date of acquisition. Following the initial recognition of the intangible assets, the cost 

model is applied requiring the assets to be carried at cost less any accumulated amortisation and accumulated impairment 

losses. Internally generated intangible assets, excluding capitalised development costs are not capitalised and expenditure is 

reflected in the income statement in the year in which the expenditure is incurred. 

The useful lives of intangible assets are assessed to be either finite or indefinite. 

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is 

an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible 

asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected 

pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation 

period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible 

assets with finite lives is recognised in the income statement in the expense category consistent with the function of the 

intangible asset. Amortisation was commenced when the assets were available for use. 

As at the balance sheet date, company does not have any intangible assets with finite lives. 

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit 

level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to 

determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from 

indefinite to finite is made on a prospective basis. 

Intangible assets that are not yet available for sale are tested for impairments at each financial year end, even if there is no 

indication that the asset is impaired. 

As at the balance sheet date, company does not have any intangible assets with indefinite lives. 

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal 

proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised. 

Research and Development Costs 

Research costs are expensed as incurred. An intangible assets arising from development expenditure on an individual project 

is recognised only when the company can demonstrate the technical feasibility of completing the intangible assets so that it 

will be available for use or sale , its intention to complete and its ability to use or sell the assets , how the assets will generate 

future economic benefits , the availability of recourses to complete the assets and the ability to measure reliably the expenditure 

during the development. 


31



During the period of development, the assets is tested for impairment annually, Following the initial recognition of the 

development expenditure, the cost model is applied requiring the assets to be carried at cost less any accumulated amortisation 

and accumulated impairment losses . Amortisation of the assets begins when development is complete and the asset is 

available for use. It is amortised over the period of expected future sales. During the period of which the asset is not yet in uses 

it is tested for impairments annually. 

2.3.5 Deferred Expenditure 

Expenditure which is deemed to have a benefit or relationship to more than one financial year is classified as deferred 

expenditure. Such expenditure is written off over the period to which it relates, on a straight-line basis. 

2.3.6 Inventories 

Inventories other than produce stocks are valued at the lower of cost and estimated net realisable value, after making due 

allowances for obsolete and slow moving items. Net realisable value is the price at which Inventories can be sold in the 

ordinary course of business after allowing for cost of realisation and / or cost of conversion from their existing state to saleable 

condition. 

The cost incurred in bringing inventories to its present location and condition are accounted using the following cost formula. 

Input Material 

At average cost. 

Growing Crop-Nurseries 

At the cost of direct materials, direct labour and an appropriate proportion of directly 

attributable overheads. 

Produce Stocks 

Valued at estimated selling prices or since realised prices. 

Consumables & Spares 

At actual cost. 

2.3.7 Trade and Other Receivables 

Trade receivables are stated at the amounts they are estimated to realise net of provisions for bad and doubtful receivables. 

Other receivables and dues from related parties are recognised at cost less provision for bad and doubtful receivables. 

2.3.8 Cash and Cash Equivalents 

Cash and Cash Equivalents are defined as cash in hand, demand deposits and short term highly liquid investments readily 

convertible to known amounts of cash and subject to insignificant risk of changes in value. 

For the purpose of Cash Flow Statement Cash and Cash Equivalents consist of cash in hand and deposits in banks net of 

outstanding bank overdrafts. Investments with short term maturities i.e. three months or less from the date of acquisitions are 

also treated as Cash Equivalents. 

Interest paid is classified as operating Cash Flows. 

The Cash Flow Statement is reported based on indirect method. 

2.3.9 Property, Plant and Equipment 

a) Cost 

Property, Plant & Equipment is recorded at cost less accumulated depreciation and less any impairment in value. 

32 




b) Cost and Valuation 

All items of Property, Plant & Equipment are initially recorded at cost. Where items of Property, Plant and Equipment are 

subsequently revalued, the entire class of such assets is revalued. Revaluations are made with sufficient regularity to 

ensure that their carrying amounts do not differ materially from their fair values at the balance sheet date. Subsequent 

to the initial recognition as an asset at cost, revalued Property, Plant and Equipment are carried at revalued amounts 

less any subsequent depreciation thereon. All other Property, Plant and Equipment are stated at historical cost less 

depreciation. 

When an asset is revalued, any increase in the carrying amount is credited directly to a revaluation surplus unless it 

reverses a previous revaluation decrease relating to the same asset, which was previously recognised as an expense. 

In these circumstances the increase is recognised as income to the extent of the previous written down. When an 

asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognised as an expense unless it 

reverses a previous increment relating to that asset, in which case it is charged against any related revaluation surplus, 

to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same 

asset. Any balance remaining in the revaluation surplus in respect of an asset, is transferred directly to accumulated 

profits or loss on retirement or disposal of the asset. 

c) Restoration Costs 

Expenditure incurred on repairs or maintenance of property, plant and equipment in order to restore or maintain the 

future economic benefits expected from originally assessed standard of performance, is recognized as an expense 

when incurred. 

d) Depreciation 

The provision for depreciation is calculated on the cost or valuation of all property, plant and equipment other than 

freehold land, in order to write off such amounts over the estimated useful lives by equal instalments as follows: 

Buildings 2.5 % 

Plant & machinery 7.5 % 

Furniture & fittings 10 % 

Vehicles 20 % 

Equipment 12.5 % 

Water Sanitation 5 % 

Mature Plantations 

- Tea 3 % 

- Rubber 5 % 

- Oil Palm 5 % 

- Coconut 2 % 

- Cinnamon 5 % 

The leasehold rights are being amortised in equal amounts over the following periods. 

Bare Land - Over 53 years 

Mature Plantations - Over 30 years 

Buildings - Over 25 years 

Machinery - Over 15 years 

Improvements to Land - Over 53 years 

Other Vested Assets - Over 53 years 

Unimproved Land - Over 53 years 

The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each 

financial year end. 


33

e) Derecognition 

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are 

expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference 

between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the 

year the asset is derecognised. 

2.3.10 Immature and Mature Plantations 

The cost of Replanting and New Planting are classified as immature plantations up-to the time of harvesting the crop. 

Further, the general charges incurred on the plantation are apportioned based on the labour days spent on respective 

Replanting and New Planting, and capitalised on the immature areas. The remaining portion of the general charges is expensed 

in the accounting period in which it is incurred. 

The cost of areas coming into bearing are transferred to mature plantations and depreciated over their useful life period. 

2.3.11 Infilling Cost 

Where infilling results in an increase in the economic life of the relevant field beyond its previously assessed standard of 

performance, the costs are capitalised in accordance with Sri Lanka Accounting Standard No. 32 and depreciated over the 

useful life at rates applicable to mature plantation. 

2.3.12 Leases 



Infilling costs that are not capitalised have been charged to the Income Statement in the year in which they are incurred. 

a) Finance leases - where the company is the lessee 

Property, plant and equipment on finance leases, (which effectively transfer to the company substantially all of the risks 

and benefits incidental to ownership of the leased item) are capitalised at their cash price, and depreciated/amortised 

over the period the company is expected to benefit from the use of the leased assets. 

The corresponding principal amount payable to the lessor is shown as a liability. 

The finance charges allocated to future periods are separately disclosed under Notes 12.5 & 15. 

The interest element of the rental obligation applicable to each financial year is charged to the Income Statement over 

the period of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for 

each period. 

The cost of improvements to or on leased property is capitalised, and depreciated over the unexpired period of the lease 

or the estimated useful lives of the improvements, whichever is shorter. 

b) Assets leased to third parties under agreements that transfer substantially all the risks and rewards associated with 

ownership other than legal title, are classified as finance leases. Lease rentals receivable from the lessee shown in the 

balance sheet. 

c) Operating Leases 

Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term are 

classified as operating leases. 

Lease payments (excluding costs for services such as insurance and maintenance) paid under operating leases are 

recognised as an expense in the income statement on a straight-line basis over the lease term 

34 


d) Leasehold Property 



Leasehold property comprising of land use rights obtained on a long term basis, is stated at the recorded carrying 

values as at the effective date of Sri Lanka Accounting Standard 19 – Leases in line with Ruling of the Urgent Issues 

Task Force of The Institute of Chartered Accountants of Sri Lanka. Such carrying amounts are amortised over the 

remaining lease term or useful life of the leased property whichever is shorter. 

2.3.13 Investment in Joint Venture 

The company have interest in joint ventures which are jointly controlled entities. A joint venture is a contractual arrangement 

whereby two or more parties undertake an economic activity that is subject to joint control, and a jointly controlled entity is a 

joint venture that involves the establishment of a separate entity in which each venturer has an interest. The company 

recognises its interest in the joint venture using the equity method. 

Under the equity method, the investment in the joint venture is carried in the balance sheet at cost plus post acquisition 

changes in the company’s share of net assets of the associate. Goodwill relating to a joint venture is included in the carrying 

amount of the investment and is not amortised. The income statement reflects the share of the results of operations of the joint 

venture. Where there has been a change recognised directly in the equity of the joint venture, the company recognises its 

share of any changes and discloses this, when applicable, in the statement of changes in equity. Profits and losses resulting 

from transactions between the company and the joint venture are eliminated to the extent of the interest in the joint venture. 

The reporting dates of the joint venture and the company are identical and the joint venture’s accounting policies conform to 

those used by the company for like transactions and events in similar circumstances 

2.3.14 Provisions 

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, where 

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable 

estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are 

determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the 

time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the 

provision due to the passage of time is recognized as an interest expense. 

2.3.15 Retirement Benefit Obligation 

a) Defined Benefit Plans –Gratuity 

The Company measures the present value of the promised retirement benefits of gratuity which is a defined benefit plan 

with the advice of an actuary every two years using projected benefits valuation method. Actuarial gains and losses are 

recognised as income or expenses over the expected average remaining working lives of the participants of the plan. 

The key assumptions used by the actuary include the following: 

i) Rate of Discount 11.5% (per annum) 

ii) Rate of Salary Increase - Workers 9% (per annum) 

- Staff 10% (per annum) 

iii) Retirement Age - Workers 55 years 

- Staff 55 years 

iv) 

The company will continue as a going concern. 

The actuarial present value of the accrued benefits as at 31st March 2011 is Rs. 464,154,667/- This item is grouped 

under retirement benefit obligations in the balance sheet. The liability is not externally funded. 


35



b) Defined Contribution Plans – Employees’ Provident Fund & Employees’ Trust Fund 

Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributions in line 

with the respective statutes and regulations. The Company contributes 12% and 3% of gross emoluments of employees 

to the Employees’ Provident Fund and to the Employees’ Trust Fund respectively. 

2.3.16 Grants and Subsidies 

Grants and subsidies are recognised at their fair value where there is reasonable assurance that the grant/subsidy will be 

received and all attaching conditions, if any, will be complied with. When the grant or subsidy relates to an income item it is 

recognised as income over the periods necessary to match them to the costs to which it is intended to compensate on a 

systematic basis. 

Grants and subsidies related to assets, including non-monetary grants at fair value are deferred in the balance sheet and 

credited to the income statement over the useful life of the asset. 

2.3.17 Impairment of Non Financial Assets 

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such 

indication exists, or when annual impairment testing for an asset is required, the company makes an estimate of the asset’s 

recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs 

to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are 

largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its 

recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 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. In determining fair value less costs to sell, an 

appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices or other 

available fair value indicators. 

Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent 

with the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In 

this case the impairment is also recognised in equity up to the amount of any previous revaluation. 

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that 

previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company 

makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a 

change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If 

that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot 

‘’exceed’ the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised 

for the asset in prior years. Such reversal is recognised in the income statement unless the asset is carried at revalued amount, 

in which case the reversal is treated as a revaluation increase. Impairment losses recognised in relation to goodwill are not 

reversed for subsequent increases in its recoverable amount. 

The following criteria are also applied in assessing impairment of specific assets: 

Goodwill 

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the 

carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cashgenerating 

unit (or group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cashgenerating 

unit (or group of cash-generating units) is less than the carrying amount of the cash-generating unit (group of 

cash-generating units) to which goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to 

Goodwill cannot be reversed in future periods. The company performs its annual impairment test of goodwill as at 31 

December. However, at present company does not have any recorded Goodwill as at the balance sheet date. 

36 




Intangible Assets 

Intangible assets with indefinite useful lives are tested for impairment annually as of 31 March either individually or at the cash 

generating unit level, as appropriate. However, at present company does not have any recorded intangible assets as at the 

balance sheet date. 

2.3.18 Income Statement 

Revenue Recognition 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue 

and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the 

consideration received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the 

purpose of recognition of revenue 

(a) 

Sale of Goods 

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have 

passed to the buyer, usually on dispatch of the goods. 

(b) 

Interest 

Interest Income is recognised as the interest accrued (taking into account the effective yield on the asset) unless 

collectibility is in doubt. 

(c) 

Dividends 

Dividend income is recognised on a cash basis. 

(d) 

Rental income 

Rental income is recognised on an accrual basis. 

(e) 

Others 

Other income is recognised on an accrual basis 

Net Gains and losses of a revenue nature on the disposal of property, plant & equipment and other non current assets 

including investments have been accounted for in the income statement, having deducted from proceeds on disposal, 

the carrying amount of the assets and related selling expenses. On disposal of revalued property, plant and equipment, 

amount remaining in Revaluation Reserve relating to that asset is transferred directly to Accumulated Profit / (Loss). 

Gains and losses arising from incidental activities to main revenue generating activities and those arising from a group 

of similar transactions which are not material, are aggregated, reported and presented on a net basis. 

Expenditure Recognition 

a) Expenses are recognised in the income statement 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 & equipment in a state of efficiency has been charged to income in arriving at the Profit/ (Loss) for the 

year. 

b) For the purpose of presentation of the Income Statement 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. 


37



2.3.19 Effect of Sri Lanka Accounting Standards issued but not yet effective: 

a) The following standards have been issued by the Institute of Chartered Accountants of Sri Lanka. 

- Sri Lanka Accounting Standard 44 Financial Instruments; Presentation (SLAS 44) 

- Sri Lanka Accounting Standard 45 Financial Instruments; Recognition and Measurement (SLAS 45) 

- Sri Lanka Accounting Standard 39 Share Based Payments (SLAS 39) 

The effective date of SLAS 44, 45 and 39 was changed during the year to be effective for financial periods beginning on 

or after 01 January 2012. These three standards have been amended and forms a part of the new set of financial 

reporting standards mentioned under note (b) below. 

b) Following the convergence of Sri Lanka Accounting Standards with the International Financial Reporting Standards, the 

Council of the Institute of Chartered Accountants of Sri Lanka has adopted a new set of financial reporting standards 

that would apply for financial periods beginning on or after 01 January 2012. The application of these financial reporting 

standards is substantially different to the prevailing standards. 

3. LEASEHOLD PROPERTY 

Although leases of all JEDB/SLSPC estates handed over to the company have not been executed todate, leases have been 

executed for Fernlands,Harrow, New Peacook, Nayapana, North Meddakumbura, Sheen, Talgaswella, Igallkanda, Gallinda, 

Elpitiya, Katandola, Lelwela, Diviturai, Gulugahakanda and Habarakada Estates. Leases remains to be executed for Nagoda and 

Mapalagama estates. All of these leases will be retroactive on 22 June, 1992, the date of formation of the Company. The 

leasehold right to the land on all of these estates have been taken into the books of the Company on June 22, 1992 immediately 

after formation of the Company, in terms of the ruling 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 8 March 1995 that this bare land would 

be revalued at the value established for this land by valuation specialist, D.R. Wickramasinghe just prior to the formation of the 

company. The value taken into the 22 June 1992, Balance Sheet and the amortisation of the leasehold rights to 31 March 2011 

are as follows. 

The above mentioned leasehold right to bare land comprising of land use rights obtained on a long term basis is re-classified as 

leasehold property and stated at the recorded carrying values as at the effective date of Sri Lanka Accounting Standard 19 

Leases, in line with revised Ruling of the Urgent Issues Task Force of the Institute of Chartered Accountants of Sri Lanka. Such 

carrying amounts are amortized over the remaining lease term or useful life of the leased property whichever is shorter. The 

leasehold right to land is disclosed under non current assets under leasehold property. The revised UITF ruling does not permit 

further revaluation of Leasehold Property. The values taken into the 22 June 1992 balance sheet and amortization of the leasehold 

property up to 31 March 2011 are as follows. 

Accumulated 

accumulated 

Revaluation Balance Amortization Amortisation Amortization Written Down Written Down 

as at as at as at for the as at Value as at Value as at 

22.06.92 Disposals 01.04.2010 01.04.2010 year 31.03.2011 31.03.2011 31.03.2010 

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 

Leasehold property 280,058,758 (938,279) 279,120,479 93,667,531 5,266,424 98,933,955 180,186,524 185,452,948 

280,058,758 (938,279) 279,120,479 93,667,531 5,266,424 98,933,955 180,186,524 185,452,948 

The leasehold rights to bare land are being amortised by equal amounts over 53 year period. 

38 




4. IMMOVABLE ESTATE ASSETS ON FINANCE LEASE (OTHER THAN LEASEHOLD PROPERTY) 

As morefully explained in Note 3 all JEDB/SLSPC estates leases have been executed as at the Balance Sheet date, in terms of the ruling 

of the UITF of Institute of Chartered Accountants of Sri Lanka all immovable assets in these estates under finance leases have been taken 

into the books of the Company retroactive to 22 June 1992. For this purpose the Board decided at its meeting on March 8, 1995 that 

these assets would be taken 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 22 June 1992 Balance Sheet and amortised as follows: 

Immature Improvement Other Vested Unimproved Mature Plant & 

Plantations to Land Assets lands Plantations Buildings Machinery Total 

Rs. Rs. Rs. Rs Rs. Rs. Rs. Rs. 

Revaluation as at 22.06.1992 283,368,199 4,214,618 4,028,217 1,564,267 95,362,391 73,002,143 47,785,047 509,324,882 

Transferred to mature (283,368,199) - - - 283,368,199 - - - 

- 4,214,618 4,028,217 1,564,267 378,730,590 73,002,143 47,785,047 509,324,882 

Acquired by Government 2002/2003 - - - - (1,389,400) (3,390,250) - (4,779,650) 

Balance as at 31.03.2011 - 4,214,618 4,028,217 1,564,267 377,341,190 69,611,893 47,785,047 504,545,232 

Accumulated amortisation as at 01.04.2010 - 1,799,019 1,353,644 391,070 185,242,613 49,793,766 47,785,047 286,365,157 

Amortisation during the year - 79,521 76,004 29,514 12,578,040 2,784,476 - 15,547,557 

Accumulated amortisation as at 31.03.2011 - 1,878,540 1,429,648 420,584 197,820,653 52,578,242 47,785,047 301,912,714 

Written down value as at 31.03.2011 - 2,336,078 2,598,569 1,143,683 179,520,537 17,033,651 - 202,632,518 

Written down value as at 31.03.2010 - 2,415,599 2,674,573 1,173,197 192,098,577 19,818,127 - 218,180,073 

These assets are being amortised in equal annual amounts over the following periods: 

Mature plantations 

Buildings 

Machinery 

Other vested assets/ Unimproved land 

30 years 

25 years 

15 years 

53 Years 

Investment in plantation assets which were immature at the time of handing over to the company by way of estate leases are shown 

under immature plantation (revalued as at 22nd June 1992). Further, investment in such immature plantation to bring them to maturity 

are shown under Note No 6. When these plantations become mature the additional investment to bring them to maturity will be moved 

from the category immature plantations to mature plantations under Note 6 and a corresponding move from immature plantations to 

mature plantations will be made in the above note. 


39



5. TANGIBLE ASSETS Balance Additions Disposals Balance 

OTHER THAN IMMATURE/MATURE as at for the during the as at 

PLANTATIONS 31.03.2010 year Year 31.03.2011 

Rs. Rs. Rs. Rs. 

Cost 

Buildings 19,974,422 - - 19,974,422 

Motor Vehicles 61,386,516 775,000 - 62,161,516 

Plant & Machinery 120,286,288 19,808,142 - 140,094,430 

Furniture & Fittings 10,230,013 593,956 - 10,823,969 

Equipment 47,257,494 5,352,179 - 52,609,673 

Water Sanitation 202,951,568 29,505,564 - 232,457,132 

462,086,301 56,034,841 - 518,121,142 

Assets on Sheen Mini Hydro Project 

Plant & Machinery 57,453,147 291,282 - 57,744,429 

Equipment 4,098,854 48,600 - 4,147,454 

Motor Vehicles 99,889 - - 99,889 

Civil Construction & Others 81,380,332 - - 81,380,332 

143,032,222 339,882 - 143,372,104 

Assets Acquired on Finance Lease 

Motor Vehicles 19,359,784 10,800,000 - 30,159,784 

Plant & Machinery 73,280,594 - - 73,280,594 

92,640,378 10,800,000 - 103,440,378 

697,758,901 67,174,723 - 764,933,624 

Balance charge Accumulated Balance 

as at for the depreciation as at 

31.03.2010 Year on disposals 31.03.2011 


Depreciation 

Buildings 3,979,487 503,530 - 4,483,017 

Motor Vehicles 60,102,672 729,457 - 60,832,129 

Plant & Machinery 81,411,893 8,245,438 - 89,657,331 

Furniture & Fittings 5,985,626 577,131 - 6,562,757 

Equipment 27,554,895 3,861,642 - 31,416,537 

Water Sanitation 45,367,639 11,257,220 - 56,624,859 

224,402,212 25,174,418 - 249,576,630 

Assets on Sheen Mini Hydro Project 


Equipment 721,949 513,829 - 1,235,778 

Motor Vehicles 19,978 19,978 - 39,956 

Civil Construction & Others 2,034,508 2,034,508 - 4,069,016 

8,817,654 6,882,763 - 15,700,417 

Assets Acquired on Finance Lease 

Motor Vehicles 9,154,992 4,411,957 - 13,566,949 


31,404,680 9,908,002 - 41,312,682 

264,624,546 41,965,183 - 306,589,729 

Written Down Value 433,134,355 458,343,895 

Balance Additions Capitalised Balance 

as at for the during the as at 

31.03.2010 Year Year 31.03.2011 


Capital Work-in-Progress 25,479,762 941,117 (24,825,005) 1,595,874 

TOTAL WRITTEN DOWN VALUE 458,614,117 459,939,769 

The assets shown above are those movable assets vested in the Company by gazette notification at the date of formation of the 

company (22 June 1992) and all investments in tangible assets by the company since its formation. The assets taken over by way of 

estate leases are set out in Notes 3 & 4. 

Further, the valuation of immovable JEDB / SLSPC estate assets on finance lease (other than leasehold property) and tangible 

assets other than immature / mature plantations taken over as at 22 June 1992 is based on net book values obtained from the state 

plantations corporation and Janatha Estate Development Board as at such date. These values were not made available to us by 

individual asset. 

40 




6. IMMATURE/MATURE PLANTATIONS Immature Mature 

Plantations Plantations total 

Rs. Rs. Rs. 

Cost 

At the beginning of the year 1,115,853,637 1,024,697,928 2,140,551,565 

Additions 175,700,796 - 175,700,796 

Transfers (362,798,305) 362,798,305 - 

At the end of the year 928,756,128 1,387,496,233 2,316,252,361 

Depreciation 

At the beginning of the year - 169,458,890 169,458,890 

Charge for the year - 41,029,844 41,029,844 

At the end of the year - 210,488,734 210,488,734 

Written Down Value - as at 31.03.2011 928,756,128 1,177,007,499 2,105,763,627 

Written Down Value - as at 31.03.2010 1,115,853,637 855,239,045 1,971,092,682 

These are investments in immature/ mature plantations since the formation of the Company. The assets (including plantation 

assets) taken over by way of estate leases are set out in Notes 3 and 4. Further investment in immature plantations taken over by 

way of these leases are shown in the above note. When such plantations become mature, the additional investments since take 

over to bring them to maturity, will be moved from immature to mature under this note. Borrowing costs amounting to 

Rs. 31,131,878/= (2010 - Rs. 97,507,174/=) incurred on borrowings obtained to meet expenses relating to immature plantations 

have been capitalised as part of the cost of the immature plantations. 

7. LONG TERM INVESTMENTS 2011 2010 

Rs 

Rs. 

AEN Palm Oil Processing (Pvt) Ltd. (7.1) 97,776,414 77,276,400 

Tea Country Home (Pvt) Ltd. 10 10 

Water Villas (Pvt) Ltd. 10 10 

EPP Hydro Power (Pvt) Ltd. 10 - 

97,776,444 77,276,420 

7.1 AEN PALM OIL PROCESSING (PVT) LTD 

Balance B/F 77,276,400 46,811,727 

Gross Dividend (14,207,983) (8,357,637) 

Share of Profit/ (Loss) of Joint venture 34,707,997 38,822,310 

Total Carrying Value of Investment 97,776,414 77,276,400 

The above investment represents the amount invested in AEN Palm Oil Processing (Pvt) Ltd. which is a joint venture company 

established with Namunukula Plantations PLC and Agalawatta Plantations PLC. 

7.2 Company’s investment in Elpitiya Lifestyle Solutions (Pvt) Ltd recorded at Zero value due to losses of that Company. 

8. INVENTORIES 2011 2010 

Rs. 

Rs. 

Growing Crop - Nurseries 15,387,382 16,514,478 

Produce Stock 289,377,545 158,345,882 

Consumables & Spares 21,704,562 15,176,283 

326,469,489 190,036,643 


41



9. TRADE AND OTHER RECEIVABLES 2011 2010 

Rs. 

Rs. 

Produce debtors 80,658,710 73,214,543 

Advances & Prepayments 18,546,931 22,126,476 

Employee Related Debtors 21,497,595 21,544,294 

Other debtors 31,978,653 21,278,251 

VAT Recoverable 3,049,649 3,504,949 

155,731,538 141,668,513 

Provision for doubtful debtors (1,595,760) (1,595,760) 

154,135,778 140,072,753 

10. AMOUNT DUE FROM RELATED COMPANIES Relationship 2011 2010 

Rs. 

Rs. 

Elpitiya Tea Farmers (Pvt) Ltd. Related Company 70,910 70,910 

AEN Palm Oil Processing (Pvt ) Ltd. Related Company 4,684,996 3,949,905 

Elpitiya Lifestyle Solutions (Pvt) Ltd. - Current Account 10.1 Related Company 7,803,986 29,043,062 

Elpitiya Lifestyle Solutions (Pvt) Ltd. - Loan Related Company 17,381,213 17,762,909 

Dunsinane Power Company (Pvt) Ltd. Related Company 225,562 213,562 

New Peacock Cottages (Pvt)Ltd. Related Company 168,006 168,006 

Water Villas (Pvt) Ltd. Related Company 3,850,112 3,750,040 

Meddecombra Power Co. (Pvt) Ltd. Related Company 637,597 637,597 

EPP Hydro Power (Pvt) Ltd. Related Company 4,906,312 - 

Tea Country Homes (Private) Ltd. Related Company 5,413,444 5,142,144 

45,142,138 60,738,135 

Less:Provision for Doubtful Receivables (18,805,603) (5,805,603) 

26,336,535 54,932,532 

10.1 Elpitiya Lifestyle Solutions (Pvt) Ltd. - Current Account 

Recoverable After one year (Note) 40,000,000 - 

Recoverable Within one year 7,803,986 29,043,062 

47,803,986 29,043,062 

Note:- The above balance represents interest free loan given to Elpitiya Lifestyle Solutions (Pvt) Ltd. Payment will commence 

after a grace period of 03 years. 

11. STATED CAPITAL 2011 2010 

Rs. 

Rs. 

Issued and Fully Paid Number of Shares 

Beginning of the year 36,433,215 36,433,215 

Share Sub Division During the year 36,433,215 - 

Ordinary Shares Including Two golden share held by the Treasury which 72,866,430 36,433,215 

has Special rights 

Value of Issued and Fully Paid Shares 

B/F Ordinary Shares Including one golden share held by the Treasury which 694,236,120 350,000,010 

has Special rights 

Right Shares Issued during the year - 344,236,110 

694,236,120 694,236,120 

Stated Capital represents the amount paid to the company in respect of issuing 72,866,430 ordinary shares including Two 

Golden shares which has special rights. During the year, Company has sub divided every one (1) existing issued and fully paid 

ordinary share into two (2) issued and fully paid ordinary shares. 

42 


12. INTEREST BEARING LOANS AND BORROWINGS 

12.1. Long Term Loans 



2011 2011 2010 2010 

Repayable Repayable Repayable Repayable Repayable Repayable 

within after 1 year Less after 2011 within after 1 year Less after 2010 

1 year than 05 years 05 years total 1 year than 05 years 05 years total 

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 

(ADB Loans through DFCC) 38,122,501 67,690,118 - 105,812,619 39,566,736 108,249,253 1,163,390 148,979,379 

12.2. Term Loans 41,069,463 171,210,118 44,608,475 256,888,056 76,675,097 138,732,182 48,983,722 264,391,001 

12.3. Short Term Loans 75,826,000 - - 75,826,000 104,035,576 - - 104,035,576 

12.4 Tea Securitising Loan 108,600,000 458,900,000 - 567,500,000 43,800,000 461,400,000 108,900,000 614,100,000 

12.5. Finance leases 6,075,721 13,870,749 - 19,946,470 10,335,061 10,727,912 515,092 21,578,065 

12.6 Guaranteed Redeemable Debentures - 75,000,000 - 75,000,000 - 75,000,000 - 75,000,000 

Bank Overdraft 38,610,858 - - 38,610,858 38,392,941 - - 38,392,941 

308,304,543 786,670,985 44,608,475 1,139,584,003 312,805,411 794,109,347 159,562,204 1,266,476,962 

831,279,460 953,671,551 

12.1 Long Term Loans 2011 2011 2011 Rate of terms of 

ADB Loans (Through DFCC) 

Repayable Repayable Repayable total total Interest Repayment 

within after 1 year Less after 05 years as At as At 

1 year than 05 years 31.03.2011 31.03.2010 

Rs. Rs. Rs. Rs. Rs. 

Loan - 1 15,848,100 22,914,474 - 38,762,574 54,610,674 (I) 

Loan - 2 10,054,752 27,650,637 - 37,705,389 47,760,141 (II) 

Loan - 3 933,372 1,011,081 - 1,944,453 2,877,825 (III) 

Loan - 5 - - - - 1,714,284 (IV) 

Loan - 6 208,333 - - 208,333 2,708,329 (V) 

Loan - 7 94,392 - - 94,392 1,227,096 

(DFCC Vardana) 10,983,552 16,113,926 - 27,097,478 38,081,030 (VI) 

12.2 Term Loans 

38,122,501 67,690,118 - 105,812,619 148,979,379 

H.N.B (66061001) - - - - 7,750,000 (VII) 

H.N.B (66061101) - - - - 6,930,000 (VIII) 

H.N.B-(E friends Loan) 2,000,004 2,333,318 - 4,333,322 6,333,326 (IX) 

Seylan Bank 6,478,571 51,828,572 32,392,857 90,700,000 90,700,000 (X) 

Bank of Ceylon - - - - 52,212,121 (XI) 

NDB (0920500305) 6,915,888 47,423,228 12,215,618 66,554,734 61,965,554 (XII) 

Sampath Bank-Marketing - - - - 10,000,000 (XIII) 

Sampath Bank (39365000406) - - - - 28,500,000 (XIV) 

HNB - 40045642 16,300,000 4,000,000 - 20,300,000 - (XV) 

NTB Loan 9,375,000 65,625,000 - 75,000,000 - (XVI) 

41,069,463 171,210,118 44,608,475 256,888,056 264,391,001 

120 equal monthly installments 

commencing from 30.09.2003 













36monthly installement of Rs 750,000 


and final installement of Rs 675,000 


83 equal Monthly installments 

commencing from September 2011 

24 monthly installements 

83 equal Monthly installments 

commencing from September 2011 

59 monthly installment of Rs 166,670/- 

and final instalment of Rs 166,470 /- 

60 monthly installement of Rs 500,000/- 

17 monthly installment of Rs 1.4 Mn. Each 

and final instalment of Rs 1.2 Mn. Plus Interest 

48 monthly installment of Rs 1,562,500/- 

commencing from september 2011. 


43



12.3 Short Term Loans 2011 2011 2011 Rate of terms of 

Repayable Repayable Repayable total total Interest Repayment 

within after 1 year Less after 05 years as At as At 

1 year than 05 years 31.03.2011 31.03.2010 

Rs. Rs. Rs. Rs. Rs. 

HNB Money Market Loan 75,000,000 - - 75,000,000 100,000,000 (XVII) 

Marketing Development Tempory Loan 826,000 - - 826,000 4,035,576 (XVIII) 

75,826,000 - - 75,826,000 104,035,576 

Payable within 03 months 

Payable within 03 months 

12.4 Tea Securitising Loans 

National Development Bank 19,400,000 - - 19,400,000 49,100,000 

National Development Bank 17,000,000 28,500,000 - 45,500,000 50,000,000 (XIX) 

National Development Bank 28,200,000 78,200,000 - 106,400,000 115,000,000 (XX) 

National Development Bank 19,000,000 129,000,000 - 148,000,000 150,000,000 (XXI) 

State Bank of India-through NDB 25,000,000 223,200,000 - 248,200,000 250,000,000 (XXII) 

108,600,000 458,900,000 - 567,500,000 614,100,000 

12.5 Finance Leases 

Gross Liability 9,415,897 17,734,068 - 27,149,965 27,873,881 

Less: Finance charges (3,340,176) (3,863,319) - (7,203,495) (6,295,816) 

allocated to future periods 

Net liability 6,075,721 13,870,749 - 19,946,470 21,578,065 

12.6 Guaranteed Redeemable Debentures (Rs.75,000,000/-) 

The above balance represents 03 Guaranteed Redeemable Debenture, for the value of Rs. 25,000,000/- each at the par value of Rs. 

25,000,000/- each (principal sum) payable to Plantations Trust Fund. The rate of interest will be 13.08% per annum is payable semi-annually on 

or before 30 June and 31 December until the said debenture shall have been redeemed on 04 December 2012. Debentures shall mandatorily 

be converted to ordinary shares if Company fails to adhere to the conditions stated in the debenture invested agreement. 

(I) 

(II) 

(III) 

(IV) 

(V) 

(VI) 

(VII) 

(VIII) 

15.75% per annum. 4% reduction on timely payments. 

17.6% per annum. 4% reduction on timely payments. 

18.33% p.a 4% reduction on timely payments 

18 % per annum. 4% reduction on timely payments. 

18% per annum, 4%, reduction on timely payments. 

AWPR+ 2 per annum 

AWPLR + 3% (reviewed monthly) 

AWPLR + 3% (reviewed monthly) 

(XV) 

(XVI) 

(XVII) 

(XVIII) 

(XIX) 

(XX) 

(XXI) 

(XXII) 

Short term money market rate. 

AWPLR-0.2T% per centum per annum 

Short term money market rate. 

18% per annum. 

18.43% per annum. 

AWPLR + 1.95% per annum. 

AWPLR of 1.75% per annum. 

AWPLR + 2.25% per annum. 

(IX) 

6.5% {untill refinance funds are received at AWPLR+3% (reviewed monthly)} 

(X) 

16% per annum. 

(XI) 

AWPLR + 2.5% with a floor rate of 21.0% p.a 

(XII) 

16.44% per annum. 

(XIII) 

AWPLR +2.0% with a floor rate of 16% p.a 

(XIV) 

AWPLR +2.0% with a floor rate of 19% p.a 

44 


13. RETIRING BENEFIT OBLIGATIONS 2011 2010 

Rs. 

Rs. 

At the beginning of the year 448,410,122 326,727,983 

Provisions for the year 78,468,529 172,695,485 

Payments for the year (62,723,984) (51,013,346) 

At the end of the year 464,154,667 448,410,122 

The actuarial valuation had been carried out as at 31 March 2010 and updated as at 31 march 2011 which amounts to Rs. 464,154,667/=. 

The provision made in the current year, comprised with current service cost and interest cost amounting to Rs. 22,973660/- and 

Rs. 54,209,134/-. 

14. DEFERRED INCOME 2011 2010 

Rs. 

Rs. 

14.1 Deferred Grants and Subsidies 156,951,693 128,301,074 

14.2 Sub Lease Income 49,759,970 58,215,852 

206,711,663 186,516,926 

14.1 Deferred Grants and Subsidies 




Add : Grants received for the year - Monitory 38,854,140 42,046,975 

Less : Amortisation for the year (10,203,521) (7,539,513) 


The Company has received funding from the Plantation Housing and Social Welfare Trust and Asian Development Bank for the 

development of workers facilities such as re-roofing of line rooms, latrines, water supply and sanitation etc. The amounts spent are 

included under the relevant classification of Property, Plant & Equipment and the grant component is reflected under Deferred Grants 

and Subsidies. Further this includes the C.T.C. Machinery Subsidy which represents the funds received from Sri Lanka Tea Board in 

relation to C.T.C. Project. 

14.2 Sub Lease Income 2011 2010 

Rs. 

Rs. 


Add: Cash received for the year 1,292,901 13,839,091 

Less : Amortisation for the year (9,748,782) (11,005,541) 


15. NET LIABILITY TO THE LESSOR OF SLSPC / JEDB ESTATES 2011 2010 

Rs. 

Rs. 

Repayable after 5 years 

Gross liability 302,182,594 312,492,594 

Less : finance charges (126,654,359) (133,816,159) 

Net liability 175,528,235 178,676,435 

Repayable after1 year less than 5 years 



Net liability 11,884,742 11,427,637 

Repayable after1 year 187,412,977 190,104,072 

Repayable within1 year 



Net liability 2,691,095 2,587,592 

Total 190,104,072 192,691,664 


45



The lease of the estates have been amended, with effect from 22nd June, 1996 to an amount substantially higher than the previous lease 

rental of Rs. 500/- per estate per annum. The first rental payable under the revised basis is Rs. 10.31 million from 22nd June 1996 to 21 June 

1997. This amount is to be inflated annually by the Gross Domestic Product (GDP) deflator, and is in the form of a contingent rental. The GDP 

deflator used for the current year is 5.7%. 

16. TRADE AND OTHER PAYABLES 2011 2010 

Rs. 

Rs. 

Trade creditors 80,050,421 68,727,198 

Employee related creditors 93,168,097 67,997,768 

Others 105,208,172 110,036,151 

278,426,690 246,761,117 

17. AMOUNTS DUE TO RELATED COMPANIES Relationship 2011 2010 

Rs. 

Rs. 

Aitken Spence Plantation Managements Ltd. - Current Account Parent Company 22,084,413 63,939,223 

- Interest Free Loan Parent Company - 200,000,000 

Aitken Spence & Co. PLC (Other Expenditure) Related Company 2,434,354 27,189,134 

Aitken Spence & Co. PLC (Short Term Loan) Related Company - 8,000,000 

Aitken Spence & Co. PLC (Interest Payable) Related Company - 26,736,353 

24,518,767 325,864,710 

18. REVENUE 2011 2010 

Rs. 

Rs. 

Sale of Produce 

Tea 1,900,250,656 1,766,738,751 

Rubber 490,051,378 254,683,950 

Coconut 633,717 737,093 

Oil Palm & Other Crops 210,565,278 192,966,298 

2,601,501,029 2,215,126,092 

46 




18a Segment Information 

Industry Tea Rubber Coconut Oil Palm & Other crop Total 

2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 

Revenue 1,900,250,656 1,766,738,751 490,051,378 254,683,950 633,717 737,093 210,565,278 192,966,298 2,601,501,029 2,215,126,092 

Revenue Expenditure (1,577,239,232) (1,529,612,239) (181,565,532) (134,967,976) 827,968 1,013,389 (66,814,856) (49,437,107) (1,824,791,652) (1,713,003,933) 

Depreciation / Amortization (60,816,994) (52,027,061) (23,802,595) (20,029,686) (772,740) (650,685) (18,416,690) (15,507,754) (103,809,019) (88,215,186) 

Gratuity (45,971,151) (101,851,381) (17,992,219) (39,211,348) (584,109) (1,273,820) (13,921,050) (30,358,935) (78,468,529) (172,695,484) 

Segment Results 216,223,279 83,248,070 266,691,032 60,474,940 104,836 (174,023) 111,412,683 97,662,502 594,431,830 241,211,489 

Other Income 99,055,529 81,097,740 

Unallocated Expenses (159,319,697) (143,037,064) 

Management Fees & workers profit share (40,059,177) (10,202,236) 

Finance cost (144,583,738) (144,075,445) 

Income tax Expence (20,728,587) - 

Share of Profit/ (Loss) of Joint Ventures 34,707,997 38,822,310 

Profit/ (Loss) for the year 363,504,155 63,816,794 

18b Segment Assets 

non Current Assets 

Cost 2,253,030,799 2,058,758,510 881,792,659 792,366,805 28,626,975 613,042,418 682,266,047 102,998,862 3,845,716,480 3,567,166,595 

Accumulated Depreciation / Amortization (528,432,109) (467,113,031) (206,818,102) (179,831,941) (6,714,250) (139,232,812) (160,020,576) (5,842,023) (901,985,037) (792,019,807) 

1,724,598,690 1,591,645,480 674,974,557 612,534,864 21,912,725 473,809,606 522,245,471 97,156,839 2,943,731,443 2,775,146,788 

Current Assets 260,913,849 112,078,753 58,699,075 43,148,742 276,107 33,407,417 6,580,458 1,401,731 326,469,490 190,036,643 

1,985,512,539 1,703,724,232 733,673,632 655,683,606 22,188,832 507,217,023 528,825,929 98,558,570 3,270,200,933 2,965,183,431 

Unallocated 

Non Current Assets 

Cost 160,522,593 157,565,761 

Accumulated Depreciation / Amortization (17,955,154) (22,096,309) 

142,567,439 135,469,452 

Current Assets 254,015,924 584,065,510 

396,583,363 719,534,962 

Total Non Current Assets 3,086,298,882 2,910,616,240 

Total Current Assets 580,485,414 774,102,153 

Total Assets 3,666,784,296 3,684,718,393 

18c Segment Liabilities 

non Current Liabilities 271,927,160 264,460,824 106,427,029 101,813,694 3,455,102 3,307,521 82,345,376 78,828,082 464,154,667 448,410,121 

271,927,160 264,460,824 106,427,029 101,813,694 3,455,102 3,307,521 82,345,376 78,828,082 464,154,667 448,410,121 

Current Liabilities 359,680,232 523,730,799 140,771,883 201,628,985 4,570,091 6,550,122 108,918,889 156,108,924 613,941,095 888,018,830 

Unallocated 

Non Current Liabilities 1,225,404,100 1,330,292,550 

Total Non Current Liabilities 1,689,558,767 1,778,702,671 

Capital and Reserve 1,363,284,434 1,017,996,892 

Total Equity and Liabilities 3,666,784,296 3,684,718,393 

18d Segment Capital Expenditure 

Cost 20,339,876 27,573,393 84,106,811 97,686,646 - - 114,544,954 136,884,104 218,991,641 262,144,143 


47



19. OTHER INCOME AND GAINS 2011 2010 

Rs. 

Rs. 

Profit from Refuse Tea Project 20,297,829 19,563,117 

Profit on Hydro Power Project - Sheen MHP 42,484,013 33,566,601 

Amortisation of Capital Grants 10,203,521 7,539,513 

Income from Sub Lease 9,980,041 11,638,929 

Interest Income 905,062 865,949 

Sundry Income from Ceylon Choice Operations 713,460 - 

Others 14,471,603 7,923,631 

99,055,529 81,097,740 

20. FINANCE COST 2011 2010 

Rs. 

Rs. 

Overdraft Interest 8,172,375 25,281,629 

Term Loan Interest 123,522,295 176,631,810 

Interest on Government Lease 7,722,408 7,821,931 

Variable Lease Rental 30,271,138 5,073,428 

Lease Interest 4,249,886 5,938,293 

Interest Paid to related Companies 59,178 20,687,713 

Exchange Loss 1,718,336 147,815 

175,715,616 241,582,619 

Amount Capitalised (31,131,878) (97,507,174) 

144,583,738 144,075,445 

21. PROFIT BEFORE TAXATION IS STATED AFTER CHARGING 2011 2010 

Rs. 

Rs. 

Auditors fees 1,340,000 1,217,000 

Depreciation/Amortisation 103,809,009 88,215,186 

Defined Benefit Plan Costs 78,468,529 172,695,485 

Defined Contributions Plan Costs - EPF & ETF 101,064,241 108,636,657 

Others - Staff Costs (Including Estate Employees) 900,463,199 736,803,732 

Director fees 1,050,000 1,019,000 

Donations 25,000 235,988 

22. INCOME TAX EXPENSE 

The Company is liable for income tax at the rate of 35% on its profit from manufacture & exempt on profit from agriculture. The carried 

forward tax losses of the Company as at 31 March 2011, amounts to Rs.1,315,351,044/- (provisional) 2009/2010 Rs.1,337,847,971/-). 

Current Tax Expense 2011 2010 

Rs. 

Rs. 

Current Income Tax Expense 20,728,587 - 

20,728,587 - 

48 




22.1 Reconciliation between Current Tax (Expense) / Income and the product of 

Accounting Profit Multiplied by the Statutory Tax rate of (35%) as follows. 2011 2010 

Rs. 

Rs. 

Accounting Profit / (Loss) before Tax and Joint Venture Profit 349,524,746 24,994,484 

Tax effect on Accounting Profit / (Loss) 122,333,661 8,748,069 

Tax effect on Aggregate Disallowed items 87,769,072 96,934,759 

Tax effect on Aggregate Allowable items (115,479,601) (142,531,534) 

Business Profit / (Loss) 94,623,131 (36,848,706) 

Tax effect on interest income 316,772 - 

Tax effect on exempt Income - Agriculture (64,343,729) - 

Tax Losses Brought Forward & Utilized (10,708,661) - 

19,887,513 - 

SRL 298,313 - 

Business Profit/(Loss) 20,185,825 - 

Last Year Under/(over) Provision 257,185 - 

ESC Setoff 285,577 - 

20,728,587 - 

Provided in the accounts 20,728,587 - 

23. EARNINGS PER SHARE 

The calculation of the basic earnings per share has been done based on profit after tax for the year divided by the weighted average 

number of ordinary shares outstanding during the year. 

The following reflects the income and share data used in the basic earnings per share computations. 

2011 2010 

RS. 

Rs. 

Amount used as the numerator 

Net profit /(loss) for the year 

363,504,155 63,816,794 

Amount used as the denominator 

Weighted average number of ordinary shares outstanding during the year 72,866,430 51,829,778 


49

24. SECURITIES PLEDGED 



Following assets have been pledged as security for liabilities. 

Name of Bank Loan Security nature of Liability carrying Amount Pledged 

Facility 2011 2010 

Rs. Rs. Rs. 

Bank of Ceylon 125,000,000 Primary mortgage over estate produce consisting of Tea, Rubber, Oilpalm, Coffee, Overdraft 53,797,091 57,572,458 

Coconuts, Clove & Paddy on estate. 

Primary floating mortgage bond for Rs. 25 Mn. over stock of estate produce consisting 

of Tea, Rubber, Oil Palm and Coconut stored at Dunsinane, Sheen, Fernlands and 

Medecombra Estates at Pundaluoya. 

Hatton National Bank 50,000,000 Primary floating mortgage bond for Rs. 10 Mn. over leasehold property at “Talgaswella 

Estate” in Galle. 

Overdraft 15,359,281 15,808,105 

Corporate Guarantee of Aitken Spence Plantation Managements Ltd. 

Hatton National Bank 10,000,000 Primary floating mortagage bond for Rs. 25 Mn. over lease hold property “Gallinda E-Friends Loan 15,359,281 15,808,105 

Estate” at Mapagala, Galle. 

Hatton National Bank 75,000,000 Primary floating mortgage bond for Rs. 100 Mn. over leasehold property at “Fernlands Money Market Loan 7,086,861 7,293,951 

Estate” Pundaluoya,Nuwara Eliya. 

Hatton National Bank 25,000,000 Primary floating mortgage bond for Rs. 100 Mn. over leasehold property at “Fernlands Money Market Loan 7,086,861 25,000,000 

Estate” Pundaluoya,Nuwara Eliya. 

Hatton National Bank 10,000,000 Leeway available on the primary floating mortagage band for Rs. 50 Mn over leasehold Short Term Loan 11,952,017 12,301,274 

property “Harrow Estate” situated at Pundaluoya, Nuwara Eliya 

Seylan Bank 90,700,000 Primary mortgage over leasehold rights to the land and Buildings of Elpitiya and Term Loan 27,101,570 27,986,152 

Bentota Estates. 

DFCC Bank 158,481,886 Primary mortgage over leasehold rights to the land and buildings of Nayapane, Term Loan 37,478,674 38,574,938 

Deviturai & Newpeacock estates. 

DFCC Bank 124,014,728 Further mortgage over leasehold rights to the land and the buildings of Nayapane, Term Loan 37,478,674 38,574,938 


DFCC Bank 25,429,000 Further mortgage over leasehold rights to the land and the buildings of Nayapane, Term Loan 37,478,674 38,574,938 


DFCC Bank 47,000,000 Secondary mortgage over the leasehold rights of Sheen estate 

Term Loan 11,572,377 11,910,540 

together with buildings & machinery situated at Kadorapitiya. 

Secondary mortgage over the leasehold rights of Sheen estate 

DFCC Bank 18,000,000 Term Loan 11,572,377 11,910,540 

together with buildings & machinery situated at Kadorapitiya. 

NDB 80,000,000 Primary Mortgage over lealehold rights of Lelwela Estate. 

Tea Securitising Loan 5,393,827 5,551,443 

Corporate Guarantee of Aitken Spence Plantation Managements Ltd. 

NDB 150,000,000 Primary Mortgage over lealehold rights of Ketandola Estate & Gulugahakanda Estate. 

Further mortgage over future Tea receivables. 

Tea Securitising Loan 18,852,544 19,424,611 

Further Mortgage over leasehold rights of Lelwela Estate. 

State Bank of India 250,000,000 Primary Mortgage over lealehold rights of Dunsinane Estate & Meddacombra Estate. Tea Securitising Loan 35,137,854 36,164,640 

NDB 75,000,000 Securitising of future Tea Sales. 

Tea Securitising Loan Securitising of future Tea Sales 

NDB 115,000,000 Securitising of future Tea Sales. 


NDB 50,000,000 Securitising of future Tea Sales. 


50 


25. CAPITAL COMMITMENTS 2011 2010 

Followings are the capital commitments as at the balance sheet date. Rs. (Mn) Rs. (Mn) 

Approved by Board & Contracted for - - 

Approved by Board & not Contracted for 237 167 

26. CONTINGENCIES 

No known contingent liabilities exist as at the balance sheet date other than few legal matters pending as at the year end of which the outcome 

is not determinable. 

27. POST BALANCE SHEET EVENTS 

There have been no material events occurring after the balance sheet date that require adjustment or disclosure in the financial statements. 

28. RELATED PARTY DISCLOSURES 

The details of the significant related party disclosures are as follows. 

28.1 Transactions with the Parent and Related entities. 



Company name of Relationship nature of Charged/(Credited) 

Director transaction 2011 2010 

Rs. 

Rs. 

Aitken Spence Plantations Mr. J.M.S. Brito Parent Company Management Fees 22,400,000 9,019,066 

Managements Ltd. Dr. R.M. Fernando Executive Staff Salaries & Expenses 16,871,867 15,445,311 

Mr. Merril J. Fernando Short Term Loan Interest - 9,622,863 

Mr. Malik J. Fernando Loan Repayment - 44,166,662 

Mr. D.V.H.de Mel 

Mr. D.A.de S.Wickremanayake 

Mr.A.L.W.Goonewardena 

Aitken Spence PLC Mr. D.H.S.Jayawardena Related Company Interest on Current Account - 11,180,749 

Mr. J.M.S. Brito & Short Term Loans 4,258,593 3,359,345 

Dr. R.M. Fernando 

Services & Sundries 

Mr. G.C.Wickremasinghe 

Mr.G.M.Perera 

Mr. C.H.Gomez 

Mr.N.J.de Silva Deva Adithya 

Mr.V.M.Fernando 

Dr. P Dissanayake 

Mr. R N Asirwatham 

Tea Country Homes (Pvt) Ltd. Mr. J.M.S. Brito Related Company Professional & Secretarial Charges 274,780 249,908 

Dr R.M. Fernando 

Mr. A.L.W.Goonewardena 

Mr. Malik J. Fernando 


New Peacock Cottage (Pvt) Ltd. Mr. J.M.S. Brito Related Company Professional Charges - 27,769 


Mr. Merril J. Fernando 





Water Villas (Pvt) Ltd. Mr. J.M.S. Brito Related Company Professional Charges & Secretarial Fees 103,552 30,644 


Mr. Merril J. Fernando 






51

28. RELATED PARTY DISCLOSURES (CONT.) 

Company name of Relationship nature of Charged/(Credited) 

Director transaction 2011 2010 

Rs. 

Rs. 

AEN Palm Oil Processing (Pvt) Ltd. Mr. J.M.S. Brito Related Company Expenditure Incurred 356,466 361,423 

Mr R.M. Fernando 

Mr. F. L. Fonseka 

Dr. C.N.A.Nonis 

Mr. S.S.Poholiyadda 

Mr. J.H.P. Ratnayake 

Elpitiya Lifestyle Solutions (Pvt) Ltd. Mr. S. Pathirane Related Company Expenditure Incurred 9,964,446 6,033,084 

Dr. R.M. Fernando USD Loan & Interest 11,887,082 17,876,941 


Mr. D.A.de S.Wickramanayake 

Ms. D.Pathirane 

Mr. A.Kanthasamy 

Meddecombra Power Company (Pvt) Ltd Mr. J.M.S.Brito Related Company Professional Fees - 27,769 

Dr. R.M.Fernando 

& Secretarial Charges 



EPP Hydro Power (Pvt) Ltd Mr. J.M.S. Brito Related Company Professional Fees 1,626,552 - 


& Secretarial Charges 

Mr. Merril J. Fernando Expenditure Incurred 2,080,000 - 




HNB Bank Mr. D.H.S.Jayawardana Related Company Loan Receipts 25,000,000 - 

Loan Repayment 46,380,004 49,852,428 

Finance Lease Repayment 7,482,383 10,964,386 

Finance Lease Obtained - 928,836 

DFCC Vardhana Mr. J.M.S. Brito Related Company Loan Repayment 10,983,552 11,914,138 

DFCC Bank Mr. J.M.S. Brito Related Company Loan Receipts - 50,000,000 

ADB Loans Repayment 32,183,208 88,213,742 

Lanka Commodity Brokers Ltd Dr. Anura Ekanayake Related Company Tea Sales 42,228,680 - 

28.2 Transactions with the Key Management Personnel of the Company and parent 

There are no transactions with the key management personnel of the company and its parent other than those disclose in Note 21. 

28.3 Other Related Party Transactions 

Guarantees given by Aitken Spence Plantation Managements Ltd on behalf of the company. 

* Corporate Guarantee of Rs.25.429 Mn. for DFCC Loan 26262/F/002 31464 & 26262/G/001 31465. 

* Corporate Guarantee of Rs.7.467 Mn. for DFCC Loan 23338/C/002 30966. 

* Corporate Guarantee of Rs.125 Mn. for Bank of Ceylon Overdraft Facility. 

* Corporate Guarantee of Rs.50 Mn. for HNB Permanent Overdraft Facility. 

* Corporate Guarantee of Rs.75 Mn. for debentures. 

* Corporate Guarantee of Rs.80 Mn. for NDB Loan. 

29. RELATED PARTY TRANSACTIONS 



There are no related party transactions other than those disclosed in Notes 7, 10, 17, 20, 24 & 28 to the Financial Statements. 

52 


Value Added Statement 

Figures in Rs.000’ Year ended as a Year ended as a 

Value Added 

31.03.11 % 31.03.10 % 

Turnover 2,601,501 2,215,126 

Other Income 99,056 81,098 

2,700,557 100 2,296,224 100 

Purchase of goods and Services (1,450,637) (54) (1,218,494) (53) 

Total Value Added 1,249,920 46 1,077,730 47 

Distributed as follows 

To Employee, 

as remuneration 1,001,527 80.13 845,440 78.45 

To Government, 

as lease rental 37,994 3.04 12,895 1.20 

To Lenders, 

as interest on short & 

long term borrowings 106,590 8.53 131,180 12.17 

Retained for re-investment and 103,809 8.30 88,215 8.18 

future growth 

Depreciation 103,809 8.30 88,215 8.18 

Reserves - - - - 

1,249,920 100 1,077,730 100 

Distribution of Value Added 2010/2011 

Government 3.04% 

Remuneration 80.13% 

Depreciation 8.30% 

Lenders 8.53% 

Distribution of Value Added 2009/2010 

Government 1.20% 

Remuneration 78.45% 

Depreciation 8.18% 

Lenders 12.17% 


53

NUWARAELIYA DISTRICT 

Dunsinane 577.75 - - 51.75 629.50 790.00 1,026 - - Tea 1,011 

Sheen 303.50 - - 69.75 373.25 517.25 497 - - Tea 674 

Fernlands 383.99 - - 38.25 422.24 484.25 546 - - Tea 771 

Meddecombra 474.50 - - 232.04 706.54 890.00 640 - - Tea 893 

KANDY DISTRICT 

New Peacock 290.49 - - 170.29 460.78 535.73 777 - - Tea 584 

Nayapane 268.15 - - 190.00 458.15 576.50 498 - - Tea 481 

GALLE DISTRICT 

Information On Estates 


Cultivated Area (ha.) 

Annula Production Factory Details No. of 

Total 

Area 

Kg’000 

Crop Workers 

Estate Tea Rubber Oil Palm Others Total (ha.) tea Rubber OilPalm Manfd. 

Devitura 1 96.52 247.22 193.04 66.10 602.88 896.22 384 163 1,779 Tea 549 

Rubber 

Talgaswella 51.05 203.83 448.55 20.72 724.15 1,033.85 308 144 3,890 Tea 479 

Rubber 

Gulugahakanda 60.73 51.91 68.13 14.86 195.63 418.18 105 35 434 - 214 

Lelwala 68.81 42.28 - 21.00 132.09 240.35 180 26 - Tea 235 

Ketandola 65.35 127.08 79.48 10.16 282.07 832.69 120 60 458 Tea 224 

Bentota - 354.42 30.00 11.92 396.34 684.06 50 249 - Rubber 264 

Elpitiya - 335.63 160.92 56.39 552.94 952.44 25 266 1,445 Rubber 305 

2,632.06 1,376.57 990.14 953.23 5,952.00 8,851.52 5,186 937 8,006 6,689 

2010/2011 2009/2010 

Tea Rubber Oil Palm Tea Rubber Oil Palm 

Total Crop (Kg.000’s) 5,186 937 8,006 4,635 913 8,449 

Total NSA (Rs/Kg) 341.34 520.63 23.60 344.87 278.86 21.39 

Y P H 1,539 900 10,220 1,367 878 10,785 

Employment Strength 

Workers Clerical & Technical Executives 

Total 

2010 6,841 384 82 7,307 

2011 6,689 385 82 7,156 

54 


Ten Year Summary 

Year ended 31 st March 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 

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

TRADING RESULTS 

Revenue 2,601,501 2,215,126 1,556,182 1,883,109 1,281,922 1,046,338 1,214,280 1,022,891 1,103,657 999,283 

Other Income 99,056 81,098 53,795 44,757 35,718 30,681 31,101 78,264 41,268 67,229 

Gross Profit 594,432 241,211 89,528 362,925 199,722 93,149 163,512 70,719 113,773 110,087 

Finance Cost (144,584) (144,075) (114,548) (120,717) (107,420) (80,009) (56,360) (55,536) (57,034) (68,701) 

Profit / (Loss) Before Tax 384,233 63,817 (61,705) 166,317 11,286 (29,284) 52,534 31,128 30,178 40,167 

Income Tax (Expense) / Income (20,729) - - 3,919 (3,391) (8,327) - - - - 

Profit / ( Loss) After Tax 363,504 63,817 (61,705) 170,237 7,895 (37,610) 52,534 31,128 30,178 40,167 

BALANCE SHEET 

Funds Employed 

Stated Capital 694236 694,236 350,000 350,000 - - - - - - 

Share Capital - - - - 249,587 249,587 249,587 249,587 249,587 200,000 

Share Premium - - - - 100,413 100,413 100,413 100,413 100,413 - 

Revenue Reserves 669,048 323,761 259,944 321,649 151,412 (25,501) 12,110 (40,424) (71,552) (101,730) 

Negative Goodwill - - - - - 169,017 183,102 197,187 211,271 225,356 

Total Equity 1,363,284 1,017,997 609,944 671,649 501,412 493,517 545,212 506,763 489,719 323,626 

Convertible Debentures - - - - - - - - - 150,000 

Redeemable Debentures 75,000 75,000 75,000 75,000 - - - - - 20,000 

Deferred Income 206,712 186,517 149,176 138,306 116,943 93,758 91,661 87,205 77,741 60,954 

Retirement Benefit Obligations 464,155 448,410 326,728 305,449 264,845 230,658 243,149 240,858 231,722 217,313 

Net Liability to Lessor 187,413 190,104 192,692 195,180 197,570 199,872 202,084 204,211 206,256 208,624 

Interest Bearing Borrowings 681,279 878,672 415,789 394,491 254,478 326,363 368,747 383,173 367,509 368,673 

Non-Current Liabilities 1,614,559 1,778,703 1,159,384 1,108,426 833,836 850,651 905,641 915,447 883,227 875,564 

2,977,843 2,796,700 1,769,328 1,780,074 1,335,248 1,344,168 1,450,853 1,422,210 1,372,947 1,349,190 

Assets Employed 

Non-Current Assets 3,086,299 2,910,616 2,699,843 2,485,862 2,318,057 2,231,841 2,120,496 1,951,754 1,806,591 1,675,196 

Current Assets 580,485 774,102 271,273 416,094 314,884 219,897 233,766 224,927 226,801 194,092 

Current Liabilities (613,941) (888,019) (1,201,788) (1,121,882) (1,297,693) (1,107,571) (903,410) (754,471) (660,445) (520,098) 

2,977,843 2,796,700 1,769,328 1,780,074 1,335,248 1,344,168 1,450,853 1,422,210 1,372,947 1,349,190 

Key Indicators 

EPS (basic) (Rs.) 4.99 1.23 (1.24) 3.41 0.16 (0.75) 1.05 0.62 0.64 1.00 

Dividend Per Share(Rs.) 0.36 0.25 - - - - - - - - 

Net Assets Per Share (Rs.) 18.71 13.97 12.22 13.46 10.04 9.89 10.92 10.15 9.81 8.09 

Market Price Per Share (Rs.) 33.50 34.00 39.00 80.50 34.50 30.00 9.75 12.00 10.00 * 

Price Earnings Ratio 7 28 (32) 24 218 (40) 9 19 16 * 

Current Ratio 0.95 0.87 0.23 0.37 0.24 0.20 0.26 0.30 0.34 0.37 

Equity to Total Assets 37.18 27.63 20.53 23.14 19.04 20.13 23.16 23.28 24.08 17.31 

Return on Shareholder’s Funds % 26.66 6.27 (10.12) 25.35 1.57 (7.62) 9.64 6.14 6.16 12.41 

* Shares had not been traded during this period. 

** The figures for the previous years have been re-stated taking into consideration the sub division of shares. 


55

Shareholder & Investor Information 

SHAREHOLDING BREAKDOWN 

AS AT 31 - MARCH - 2011 

Category N no. of Shareholders No. of Shares % 

1 - 1,000 10,581 3,684,928 5.06 

1,001 - 10,000 623 2,211882 3.04 

10,001 - 100,000 95 2,609,066 3.58 

100,001 - 1,000,000 8 2,560,900 3.51 

Over 1,000,000 Shares 3 61,799,654 84.81 

SUMMARY OF SHAREHOLDINGS 


11,310 72,866,430 100.00 

Category no. of Shares no. of % 

Shareholders 

Residents 71,797,830 11,300 98.54 

Non Residents 1,068,600 10 1.46 

Individuals 9,812,962 11,243 13.47 

Institutions 63,053,468 67 86.53 

SHARES TRADED DURING THE YEAR 

April 1, 2010 to March 31, 2011 

Number of share transactions 15,087 

Number of shares 21,379,700 

Total Value 811,525,400.00 

Highest Price Traded (Rs) 55.00 

17.09.2010 

Lowest Price Traded (Rs) 15.00 

26.10.2010 

Value of Share as at the end of financial year (Rs) 33.50 

Excludes: 

Public Holding: 


* Parent, subsidiary or associate companies 

* Subsidiaries or associates of the parent company 

* Directors, CEO, their spouses & children under 18 & their nominees 

* Co. in which a director’s holding exceeds 50% of the equity or where the 

Director controls the composition of the Board 

* Shareholders whose holding exceeds 10% of the issued capital 

Total no of shares 72,866,430 

Less: Holding by the parent co (ASPM) 44,917,354 (61.64%) 

Less: Shareholder exceeding 10% (S to T) 15,600,000 (21.41%) 

Public holding 12,349,076 (16.95%) 

56 


Shareholder & Investor Information (contd.) 

20 Major ShareHolders Holding as at 

31 st March 2011 

Name of the Shareholder shareholding % 

1 AITKEN SPENCE PLANTATION MANAGEMENTS LTD 44,917,354 61.64 

2 SECRETARY TO THE TREASURY 15,600,000 21.41 

3 S.N.C.W.M.B.C. KANDEGEDARA 1,282,300 1.76 

4 GULF EAST FINANCE LTD., 717,300 0.98 

5 D S DALUWATTE 400,000 0.55 

6 M M UDESHI 332,000 0.46 

7 TRANZ DOMINION LLC 310,000 0.43 

8 SEYLAN BANK PLC/SNCWMBC KANDEGEDERA 274,500 0.38 

9 COMMERCIAL BANK OF CEYON/AF MUNAS & NM MUNAS 260,000 0.36 

10 T L M IMTIAZ 135,600 0.19 

11 PAN ASIA BANKING CORP PLC/S A WARNAKULASURIYA 131,500 0.18 

12 P A DAYANANDA 100,000 0.14 

13 K S D SENAWEERA 88,800 0.12 

14 K S JINADASA 85,700 0.12 

1 5 N W N JAYASIRI 77,200 0.11 

16 W L B PERERA 70,100 0.10 

17 FIRST CAPITAL MARKETS LTD/EPI FERNANDO 67,400 0.09 

18 D D W CHANDRADEVA 65,700 0.09 

19 M A U WIJESEKERA 65,000 0.09 

20 P C COORAY 59,600 0.08 

Total No. of Shares 65,040,054 89.26 

Golden Shareholder 

The Golden Share has been allotted to the Secretary to the Treasury for and on behalf of the State of Democratic Socialist Republic of 

Sri Lanka. The rights attached to the Golden Share are set out in the Articles of Association which are as follows: 

1) The Golden Share shall only be held by the Secretary to the Treasury in his official capacity. 

2) The Golden Shareholder’s prior written concurrence is required, 

(a) to amend the definition of the words Golden Share or Golden Shareholder and the Articles setting out specific rights 

attached to such share. 

(b) to sub-lease, cede or assign the rights in part or all of the lands assigned to the Company. 

3) The Golden Shareholder is entitled to 

(a) 

(b) 

(c) 

(d) 

call upon the Directors once in every three months if desired to meet with him or his nominees to discuss matters of the 

Company of interest to the State. 

inspect the books of accounts of the Company either by himself or by his nominees with due notice. 

receive within 60 days of the end of every quarter, a quarterly report relating to the performance of the Company. 

receive within 90 days from the end of each financial year, information relating to the Company in a pre-specified format. 


57

Definitions 

FINANCIAL TERMS 

Accounting policies 

Specific principles, bases, conventions, rules and practices adopted 

by an enterprise in preparing and presenting financial statements. 

Borrowings 

All interest bearing liabilities. 

Capital employed 

Total assets less interest free liabilities and provisions. 

Cash equivalents 

Liquid investments with original maturities of three months or less. 

Contingent Liabilities 

Conditions or situations at the Balance Sheet date, the financial effect 

of which are to be determined by future events which may or may not 

occur. 

Current ratio 

Current assets divided by current liabilities. 

Earnings Per Share 

Profits attributable to ordinary shareholders divided by the number of 

ordinary shares in issue. 

Effective Tax Rate 

Income tax expenses divided by profit from ordinary activities before 

tax. 

Equity 

Shareholders’ funds, i.e. share capital and reserves. 

Net Assets Per Share 

Shareholders’ funds divided by the number of ordinary shares. 

Price Earnings Ratio 

Market price of a share divided by earnings per share. 

Related parties 

Parties who could control or significantly influence the financial and 

operating policies of the business. 

Return on Shareholder’s Funds 

Attributable profits to the shareholders divided by shareholders funds. 

Segment 

Constituent business units grouped in terms of nature and similarity 

of operations. 

SLAS 

UITF 

Urgent Issues Tasks Force of The Institute of Chartered Accountants 

of Sri Lanka. 

Working capital 

Capital required to finance the day - to -day operations (current 

assets minus current liabilities). 

NON - FINANCIAL TERMS 

COP 

The Cost of Production. This generally refers to the Cost of producing 

a Kilo of produce. (Tea / Rubber / Oil Palm). 

Crop 

The total produce harvested over a given period of time (usually 

during a financial year). 

Extent in bearing 

The extent of land from which crop is being harvested. Also see 

“Immature Plantation”. 

Field 

An unit extent of land. Estates are divided in to fields in order to 

facilitate management. 

Immature plantation 

The extent of plantation that is under development and is not being 

harvested. 

Infilling 

A method of field development whereby planting of individual plants 

is done in order to increase the yield of a given field, whilst allowing 

the field to be harvested. 

Mature plantation 

The extent of plantation from which crop is being harvested. Also see 

“Extent in Bearing”. 

NSA 

The Net Sales Average. This is the average sale price obtained (over 

a period of time) after deducting Brokerage fees and cost of Gratis 

teas. 

Replanting 

A method of field development where an entire unit of land is taken 

out of “bearing” and developed by way of uprooting the existing trees, 

bushes and replanting with new trees / bushes. 

Yield 

The average crop per unit extent of land over a given period of time 

(usually kgs. per hectare per year). 

Sri Lanka Accounting Standards. 

58 


Financial Calendar 2010/2011 

August 27, 2010 - 18 th Annual General Meeting. 

November 29, 2010 - Half-yearly Accounts as at September 30, 2010. 

May 30, 2011 - Accounts for the year ended March 31, 2011. 

September 26, 2011 - 19 th Annual General Meeting. 


59

CORPORATE INFORMATION 

NAME 

ELPITIYA PLANTATIONS PLC 

LEGAL FORM 

A Public Quoted Company with Limited Liability, incorporated in Sri Lanka on 22 June 1992. 

COMPANY REGISTRATION NO 

PQ 171 

REGISTERED OFFICE 

315, Vauxhall Street, Colombo 2, 

BUSINESS ADDRESS 

No. 305, Vauxhall Street, Colombo 2. 

DIRECTORS 

Mr. J M S Brito - Chairman 

Dr. R M Fernando - Managing Director 

Mr. Merrill J Fernando 


Mr. D C Fernando - Alternate Director to Mr. Merrill J Fernando 

Mr. D V H de Mel - (Resigned w.e.f. 10.08.2011) 

Mr. B A K W Mahendra - (Resigned w.e.f. 14.07.2010) 

Ms. Minette D A Perera - Alternate Director to Mr. Malik J Fernando 

Dr. S A B Ekanayake 

Mr. L N de S Wijeyeratne 

Mr. J H J Jayamaha - (Resigned w.e.f. 29.12.2010) 

Mr. M P D U K Mapa Pathirana - (Appointed w.e.f. 29.12.2010) 

CHIEF EXECUTIVE OFFICER 

Mr. A L W Goonewardena 

MANAGING AGENT 

Aitken Spence Plantation Managements Limited 

SECRETARIES 

Aitken Spence Corporate Finance (Pvt) Ltd 

AUDITORS 

Messrs. Ernst & Young 

201, De Saram Place, Colombo 10. 

LAWYERS 

Julius & Creasy 

Attorneys – at – Law 

BANKERS 

Bank of Ceylon - Corporate Branch 

Sampath Bank PLC - Nawam Mawatha Branch 

Hatton National Bank PLC - Panchikawatta Branch 

Seylan Bank PLC - Millennium Corporate 

GROUP COMPANIES 

Tea Country Homes (Private) Limited 

Water Villas (Private) Limited 

E P P Hydro Power Company (Private) Limited 

JOINT VENTURE COMPANIES 

Elpitiya Lifestyle Solutions (Private) Limited 

A E N Palm Oil Processing (Private) Limited 

REGISTRARS 

SSP Corporate Services (Pvt) Ltd., 

101, Inner Flower Road, 

Colombo 3 

60 


Notice of Meeting 

NOTICE is hereby given that the Nineteenth Annual General Meeting of ELPITIYA PLANTATIONS PLC., will be held at the Auditorium 

of the Ceylon Chamber of Commerce, No.50 Nawam Mawatha, Colombo 2, at 3.00 p.m. on Monday, 26th September 2011 for the 

following purposes:- 

l 

To receive and consider the Annual Report of the Board of Directors together with the Financial Statements of the Company 

for the year ended 31 st March 2011 and the report of the Auditors thereon. 

l 

To declare a First and Final Dividend as recommended by the Directors 

l 

To re-elect Dr. S A B Ekanayake who retires by rotation in terms of Article 92 of the Articles of Association. 

l 

To re-elect Mr. L N D S Wijeyeratne who retires by rotation in terms of Article 92 of the Articles of Association. 

l 

To re-elect Mr. Merrill J Fernando who is over 70 years, as a Director by passing the following resolution. 

“That the age limit stipulated in Section 210 of the Companies Act No 7 of 2007 shall not apply to Mr Merrill J Fernando 

who has attained the age of 81 and that he be re-elected a Director of the Company” 

l 

To re-elect Mr. M P D U K Mapa Pathirana who retires in terms of Article 98 of the Articles of Association. 

l 

To re-appoint the retiring Auditors, Messrs. Ernst & Young, and authorize the directors to determine their remuneration. 

By order of the Board 

Sgd. 

Aitken Spence Corporate Finance (Pvt) Ltd 

Secretaries 



Note: 

1. A member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote in his/her stead and a 

Form of Proxy is enclosed for this purpose. A Proxy need not be a member of the Company. 

2. The completed Form of Proxy must be deposited at the Registrars, SSP Corporate Services (Pvt) Ltd., No.101, Inner Flower 

Road, Colombo 3 forty – eight hours before the time fixed for the meeting. 

3. Any member or Proxy holder attending the meeting is kindly requested to bring this report. 


61

notes 

62 


Form of Proxy 

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

……………………………………………………………………………..…………………………….........…..…………………............……..…… 

being a member / members of ELPITIYA PLANTATIONS PLC., hereby appoint ………………………………………..…………………… 

..………………………………………….………………………................................................................................…….........................… of 

………………………………....………….…………………………………….…………..……….....…............……….….......…… (whom failing) 

Joseph Michael Suresh Brito of Colombo 

(whom failing) 

Rohan Marshall Fernando of Colombo 


Merrill Joseph Fernando of Colombo 


Malik Joseph Fernando of Colombo 


Sumith Anura Bandara Ekanayake of Colombo 


Lalit Nihal de Silva Wijeyeratne of Colombo 


Mapa Pathirannahalage Deshapriya Udaya Kumara Mapa Pathirana of Colombo 

as my / our Proxy to vote for me/us and on my /our behalf at the Annual General Meeting of the Company to be held on 26th September 

2011 and at any adjournment thereof and at every poll which may be taken in consequence thereof. 

Signed this .............................day of .........................Two Thousand and Eleven 

..................................... 

Signature 

Note: Instructions as to completion are noted on the reverse hereof.

Instructions As to Completion 

Kindly perfect the form of proxy by filling in legibly your full name and address, signing in the 

space provided and filling in the date of signature. 

If the proxy form is signed by an Attorney, the relative power of attorney should also 

accompany the proxy form for registration, if such power of attorney has not already been 

registered with the Company. 

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. 

The completed form of proxy should be deposited at the Registrars, SSP Corporate Services 

(Pvt) Ltd., 101, Inner Flower Road, Colombo 3, on 24th September 2011 being 48 hours 

before the time appointed for the holding of the meeting.


65

66

Elpitiya Plantations Plc Annual Report 2010/11 - Colombo Stock ...

Create successful ePaper yourself

Delete template?

Save as template?