On'ally Holdings PLC - Colombo Stock Exchange

On'ally Holdings PLCCORPORATE INFORMATIONDIRECTORS : DR. PRATHAP RAMANUJAM (CHAIRMAN)MR. ONALLY GULAMHUSEIN (MANAGING DIRECTOR)MR. H. P. SILVADR. S. A. GULAMHUSEINMR. W. N. G. SILVAMR. R. M. ARIYADASAMS. W. J. K. GEEGANAGEMRS. T. SARVESHWARAN (DEPUTY MANAGING DIRECTOR)MR. B. V. SELVANAYAGAMREGISTERED OFFICE : 20, BAMBALAPITIYA ROAD (GALLE ROAD)COLOMBO 4Tel : 011 2501622SECRETARIES : P W CORPORATE SECRETARIAL (PVT) LTD3/17, KYNSEY ROADCOLOMBO 8.Tel : 011 4640360-3AUDITORS : MESSRS PRICEWATERHOUSECOOPERSCHARTERED ACCOUNTANTS100, BRAYBROOKE PLACECOLOMBO 2BANKERS : BANK OF CEYLONTHE HONGKONG & SHANGHAI BANKING CORPORATIONTHE STANDARD CHARTERED BANKLEGAL ADVISORS : MESSRS JULIUS & CREASYD M SWAMINATHAN ASSOCIATES2

On'ally Holdings PLCNOTICE OF ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the Twenty Third (23 rd ) Annual General Meeting of the Company will be held at theGalle Face Hotel, No.2, Galle Road, Colombo 03, on Tuesday, 17 th August 2010 at 10.00 a.m. for the followingpurposes.1. Routine Business1.1 To receive and consider the Annual Report of the Board of Directors on the affairs of the Company and theStatement of Accounts for the year ended 31 st March 2010 with the Report of the Auditors thereon.1.2 To pass the ordinary resolution set out below to appoint Mr. Onally Gulamhusein, who is 86 years of age, asa Director of the Company.“IT IS HEREBY RESOLVED that the age limit stipulated in Section 210 of the Companies Act, No.7 of 2007shall not apply to Mr. Onally Gulambusein, who is 86 years of age and that he be and is hereby appointed aDirector of the Company”.1.3 To re-elect as a Director, Ms. Wasantha Jayaseeli Kapugama Geeganage, who retires by rotation at theAnnual General Meeting in terms of Article 88(i) of the Articles of Association as a Director of the Company.1.4 To re-appoint Messrs PricewaterhouseCoopers, Chartered Accountants, as the Auditors of the Company andto authorise the Directors to fix their remuneration.1.5 To authorize the Directors to determine donations for the year ending 31 st March 2011 and up to the date of thenext Annual General Meeting.2. Special BusinessTo pass the following resolution as a Special Resolution:IT IS HEREBY RESOLVED THAT the Articles of Association of the Company be amended in the followingmanner to comply with provisions contained in Section 6A of the Listing Rules of the Colombo Stock Exchange;1. That Article 164 of the Articles of Association of the Company be deleted in its entirety and the followingnew Article be substituted therefor numbered accordingly:'164. Any notice required to be or which may be given by advertisement shall unless otherwiserequired by the Statutes be advertised once in Sinhala, Tamil and English national daily newspapers.'2. That Article 170 of the Articles of Association of the Company be deleted in its entirety and the followingnew Article be substituted therefor under the caption "Compliance with Rules".'170. Notwithstanding anything to the contrary contained in the Articles of the Company, so long asthe Company is listed on the Colombo Stock Exchange, the Company shall comply with the Rulesof the Colombo Stock Exchange and the Central Depository System, which shall be in force fromtime to time.'By order of the BoardON’ALLY HOLDINGS PLC(Sgd) Anusha WijesingheP W CORPORATE SECRETARIAL (PVT) LTDDirector / SecretariesJuly 19, 2010Colombo3

On'ally Holdings PLCNOTICE OF ANNUAL GENERAL MEETING (Contd)Notes1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on behalfof him/her.2. A proxy need not be a member of the Company3. The form of proxy is enclosed for this purpose.4. The completed Form of Proxy must be deposited at the Registered Office of the Company, No.20, BambalapitiyaRoad, (Galle Road) Colombo 4, not later than 47 hours prior to the time appointed for the holding of themeeting.4

On'ally Holdings PLCCHAIRMAN’S REVIEWOn behalf of the Board of Directors, I have great pleasure in welcoming you to the Twenty Third Annual GeneralMeeting of the Company. The relevant accounts have been in your hands for the period specified by the Statute. Asummary of the Company’s performance and results for the year under review are given below:-Operating ResultsThe Company made a profit of Rs. 34.61 Million after taxation and profit before taxation was Rs. 53.07 Million, asagainst Rs. 36.93 Million and Rs. 56.09 Million respectively in the previous year. Turnover increased from Rs. 71.55Million to Rs. 75.57 Million, whilst operating profit also increased from Rs. 43.08 Million to Rs.43.85 Million. Themain reason for the decrease in profit before taxation is due to a decrease in interest rate during the year. Theaverage occupancy based on floor area was 97.35% as at March 31, 2010 as compared to 97.97% as at March 31,2009.The Directors have approved a Final Dividend of Rs. 1.35 per share (Rs.1.35 per share in the previous year) whilstan Interim Dividend of Rs. 0.90 per share (Rs. 0.90 in the previous year) was paid on December 17, 2009 making atotal dividend for the year of Rs.2.25 per share (Rs. 2.25 per share in the previous year).ReservesThe Directors did not make any appropriation to the Repairs and Maintenance Reserve during the year. The buildinghowever is regularly being refurbished and during the year a sum of Rs. 2.82 Million was incurred on up-keep andrenewals and charged to Revenue. This amount was transferred from Repairs and Maintenance Reserve toRetained Earnings thus reducing the Repairs and Maintenance Reserve Account to Rs. 17.43 Million.ConclusionUnity Plaza continues to be the focus of the thriving information technology industry with the majority of its occupantsbeing computer related companies. It also catered to the state sector with Government Departments occupyingmore than two floors of the building during the year. Despite the challenges posed by the current economic climatewe look forward with caution, to continued profitability and thus enabling an attractive return to our shareholders.Finally, I wish to thank my colleagues on the Board for the guidance, support and co-operation extended to me. Myspecial thanks are due to the Managing Director, Deputy Managing Director and the staff for their dedication and hardwork, which contributed immensely to the performance of the Company.(Sgd)Dr. Prathap RamanujamChairman19 th July 2010Colombo5

On'ally Holdings PLCBOARD OF DIRECTORSDr. Prathap RamanujamChairmanDr. Prathap Ramanujam is currentlyChairman/CEO of Pan Asian PowerLtd and Waters Edge Ltd. Retiredas Secretary to the Ministry of UrbanDevelopment and Sacred AreaDevelopment in April 2010. He hasbeen Secretary to various Ministriessince 1997, prior to which he hasheld other senior positions in thePublic Service.He holds a PhD in Economics fromthe Australian National UniversityCanberra, M.Sc. (NationalEconomic Policy) from theUniversity of Bristol, UnitedKingdom and B.Sc (1st Class) fromthe University of Peradeniya, SriLanka.Dr. Ramanujam is the Chairman ofOn’ally Holdings PLC sinceJanuary 2008.Mr. H P SilvaDirectorMr. W N G SilvaDirectorMr. Prasanna Silva is the DirectorGeneral of the Urban DevelopmentAuthority.He is a Chartered Architect byProfession and holds a M.Sc in(Architecture) and a B Sc. In (BuiltEnvironment) from the University ofMoratuwa, Sri Lanka.He is a Fellow Member of the SriLanka Institute of Architects and aCorporate Member of the RoyalInstitute of British Architects.Mr. Gamunu Silva holds a B.Sc.(Engineering) degree from theUniversity of Peradeniya, Sri Lankaand a post-graduate degree inAeronautics from National Schoolof Construction Aeronautics ofToulouse, France.Mr. Onally GulamhuseinManaging Director Mr. Onally Gulamhusein has 55years of experience in Real EstateBusiness.He has been the Managing Directorof On’ally Holdings PLC since itsinception.He was also a Director of TuckersAutodrome Ltd., now registeredunder the name of Union Co., Ltd(Agents for General Motors Ltd)from its inception for a considerableperiod and the Chairman of YvesWardrobe Ltd.Mrs. Tharsini SarveshwaranDeputy Managing Director Mrs. T Sarveshwaran is a fullmember of the Association ofBusiness Executives (UK) and shehas obtained an ExecutiveDiploma in Accounting andFinance from the Institute ofChartered Accountants of Sri LankaMrs. T Sarveshwaran possesses 12years experience in the fields ofAccounting and Administration atOn’ally Holdings PLC.Mr. R M AriyadasaDirectorMr. Silva who counts over 46 yearsexperience as an Engineer in thepublic sector presently serves as anEngineering Consultant to theMinistry of Cultural Affaires andMinistry of Irrigation and WaterResources Management.Mr. R M Ariyadasa is presently theDirector (Development Planning-North & East) and Director (RestHouse Management) of the UrbanDevelopment Authority.In addition he functions asChairman of the People's ParkManagement Corporation representingUrban DevelopmentAuthority.He counts nearly 30 years ofexperience in relation toDevelopment Planning and relatedactivities in Urban DevelopmentAuthority. In addition, he has workedabout 07 years in various PublicSector Departments engagingmostly in accounts related activitiesprior to working in UrbanDevelopment Authority.Dr Shabbir A GulamhuseinDr. Shabbir A Gulamhusein wasappointed to the Board of On'allyHolding PLC in March 2003.He is the Chairman of Ceylon andForeign Trades PLC, Chairman ofBusiness Chamber of Commerceand the Chairman/Chief Executiveof the family owned Adam Groupof Companies.6Mr. R M Ariyadasa holds a M.Sc.(Town and Country Planning) fromthe University of Moratuwa, SriLanka and B.Sc. (EstateManagement and Valuation) fromthe University of Sri Jayawardenapura,Sri Lanka.He is a Chartered Member of theInstitute of Town Planners, SriLanka.

On'ally Holdings PLCBOARD OF DIRECTORS (Contd)Ms. W J K GeeganageDirectorMs. Wasantha Geeganage is aFellow Member of the Institute ofChartered Accountants of Sri Lankaand holds a B.Com (Special)Degree from the University of SriJayawardenapura, Sri Lanka. Shecounts 29 years of experience inthe fields of Auditing, Accounting& Taxation in the Private andPublic Sectors.Ms. Geeganage who is the DeputyDirector General (Finance) of theUrban Development Authority(UDA) – the major shareholder ofthe Company, since March 1997,is a Director of Urban Investmentand Development Co. (Pvt) Ltd andUDA Rest Houses Ltd – Companieswhich are fully owned by the UDA;Project Accountant of UDAHambantota Priority Projects andSpatial Information andInfrastructure Monitoring Project.She has served on the Board ofManagement of the Association ofAccounting Technicians of SriLanka for a period of 5 years and isa Committee Member andSecretary of the Peoples ParkManagement Corporation.Ms. Geeganage is the Chairpersonof the Audit Committee of On’allyHoldings PLC.Mr. Brian V SelvanayagamDirectorMr. Brian V Selvanayagam wasappointed to the Board of On’allyHoldings PLC on 1st November2008.He is an Associate Member of theChartered Institute of ManagementAccountants (UK), AssociateMember of the Institute ofChartered Accountants of Sri Lanka,Associate Member of theChartered Institute of Marketing(UK) and Fellow Member of theSociety of Certified ManagementAccountants of Sri Lanka.He is experienced in the fields ofbanking, finance and corporatefinance and had served at Ernst &Young, DFCC Bank, Hongkong andShanghai Banking Corporation,Dunamis Capital PLC and LeoBurnett Solutions Inc.He is presently reading for hisMasters in Business Administrationfrom the University of Wales (UK).7

On'ally Holdings PLCHIGHLIGHTSOPERATING RESULTS 2009/10 2008/09 Increased(Rs. '000) (Rs.'000) (Decreased)%Turnover 75,568) 71,547) 5.62)Operating profit 43,849) 43,079) 1.79)Interest income 9,226) 13,011) (29.09)Profit before tax 53,075) 56,090) 5.38)Tax (18,469) (19,156) (3.60)Profit after tax 34,606) 36,934) (6.30)Profit brought forward 778,000) 768,528) 1.23)Profit available for appropriation 812,606) 805,462) 0.89)Transfer from reserve 3,239) 1,240) 161.21)Dividends (31,501) (28,702) 9.75)Profit carried forward 784,344) 778,000) 0.82)KEY INDICATORSEarnings per share (Rs) 2.47) 2.64) (6.44)Earnings per share(exclusive fair value gain) (Rs) 2.47) 2.64) (6.44)Dividend per share (Rs) 2.25) 2.05) 9.76)Net assets per share (Rs) 68.58) 68.36) 0.32)Market price per share as at 31 March (Rs) 42.00) 27.75) 51.35)8

On'ally Holdings PLCANNUAL REPORT OF THE BOARD OF DIRECTORSON THE AFFAIRS OF THE COMPANYThe Directors of On’ally Holdings PLC have pleasure in presenting their Annual Report together with the AuditedFinancial Statements of the Company for the year ended 31 st March 2010.GeneralOn’ally Holdings PLC is a public limited liability Company which was incorporated under the Companies OrdinanceNo. 51 of 1938 as a public limited liability company on 25th June 1982 which obtained the certificate to commencebusiness on 20 th August 1982, listed on the Colombo Stock Exchange on 25th April 1991 and re-registered as per theCompanies Act, No.7 of 2007 on 13 th December 2007 under the new Number PQ 107.Principal activities of the Company and review of performance during the yearThe Company’s principal activities, which remained unchanged during the year, are Property Development / RealEstate.A review of the business of the Company, its performance during the year and its future prospects are contained inthe Chairman’s Review, which forms an integral part of this Report.This Report and the Financial Statements reflect the state of affairs of the Company.Financial StatementsThe complete Financial Statements of the Company, duly signed by two Directors on behalf of the Board of Directorsand the Auditors are given on pages 15 to 28.Accounting PoliciesThe accounting policies adopted by the Company in the preparation of the Financial Statements are given on pages20 to 22, which are consistent with those of the previous period except as disclosed in Note 2.9.DirectorsThe names of the Directors who held office as at the end of the accounting period are given below, and their briefprofiles appear on pages 6 to 7.Executive DirectorsMr Onally Gulamhusein - Managing DirectorMrs Tharsini Sarveshwaran - Deputy Managing DirectorNon Executive Directors* Dr. Prathap Ramanujam - ChairmanMr H P Silva - DirectorDr. S A Gulamhusein - Director* Mr W N G Silva - DirectorMr R M Ariyadasa - DirectorMs W J K Geeganage - Director* Mr B V Selvanayagam - Director* Independent Non Executive DirectorsMrs. Yvonne Gulamhusein, a founder member who served as a Director of the Company since itsinception in June 1982, passed away on 12th July 2010 having served the Company over a period of28 years.The Board, at its meeting held on 15th July 2010, passed a vote of condolence on her demise.Mr Onally Gulamhusein who is over 70 years of age will vacate office on 10th August 2010 in pursuance of Section210 of the Companies Act, No.7 of 2007. A resolution will be placed before the shareholders at the forthcomingAnnual General Meeting in terms of Section 211 of the Companies Act No. 7 of 2007 with regard to the appointmentof Mr. Onally Gulamhusein as a Director of the Company.Ms. W.J.K. Geeganage and Mr. W. N. G. Silva retire by rotation at the Annual General Meeting in terms of Article 88(i)of the Articles of Association. Mr. W. N. G. Silva had given written notice to the Company that he is not offering himselffor re-election. Ms. W.J.K. Geeganage being eligible to continue as a Director of the Company, is recommended bythe Directors for re-election.9

On'ally Holdings PLCANNUAL REPORT OF THE BOARD OF DIRECTORSON THE AFFAIRS OF THE COMPANYInterests RegisterThe Company maintains an Interests Register in terms of the Companies Act, No. 7 of 2007, which is deemed toform part and parcel of this Annual Report and is available for inspection upon request.All related party transactions, which encompass the transactions of Directors who were directly or indirectly interestedin a contract or a related party transaction with the Company during the accounting period, are recorded in theInterests Register.The relevant interests of Directors in the shares of the Company as at 31 st March 2010 as recorded in the InterestsRegister are given in this report under the caption “Directors’ Shareholding”.Directors’ RemunerationThe total remuneration of the Directors during the year under review amounted to Rs. 4,600,300/-.Directors’ responsibility for Financial ReportingThe Directors are responsible for the preparation of the Financial Statements of the Company to reflect a true and fairview of the state of its affairs. A further statement in this regard is included on page 14.AuditorsMessrs PricewaterhouseCoopers, Chartered Accountants served as the Auditors during the year under review. TheAuditors do not have any interest in the Company other than those referred to herein.A total amount of Rs. 174,700/- is payable by the Company to the Auditors for the year under review, comprisingRs.150,000/- as audit fees and expenses and Rs. 24,700/- for non audit services.The Auditors have expressed their willingness to continue in office. The Audit Committee at a meeting held on 22 ndJune 2010 recommended that they be re-appointed as Auditors. A resolution to re-appoint the Auditors and toauthorise the Directors to determine their remuneration will be proposed at the Annual General Meeting.Stated CapitalThe Stated Capital of the Company is Rs.140,006,160/- [Rs.140,006,160/- as at 31 st March 2009].The number of shares issued by the Company stood at 14,000,616 fully paid ordinary shares as at 31 st March 2010(14,000,616 fully paid ordinary shares as at 31 st March 2009).Directors’ ShareholdingThe relevant interests of the Directors in the shares of the Company as at 31 st March 2010 are as follows.Shareholding Shareholdingas atas at31/3/2010 31/3/2009Dr. Prathap Ramanujam Nil NilMr. O Gulamhusein 1,714,428 1,714,428Mrs. Y Gulamhusein (passed away on 12th July 2010) 91,706 91,706Mr. H P Silva Nil NilDr. S A Gulamhusein 45,850WML / Dr. S A Gulamhusein 328,832 374,682 377,082Mr. W N G Silva Nil NilMr. R M Ariyadasa Nil NilMs. W J K Geeganage NIl NilMrs. T Sarveshwaran Nil NilMr B V Selvanayagam 100 100Mr B V Selvanayagam (Joint holding with Mrs. L. Selvanayagamand Mr. S.G. Selvanayagam) 750,000 750,00010

On'ally Holdings PLCANNUAL REPORT OF THE BOARD OF DIRECTORSON THE AFFAIRS OF THE COMPANYShareholdersThere were 585 shareholders registered as at 31 st March 2010 (619 shareholders as at 31 st March 2009).Major Shareholders, Distribution Schedule and other informationInformation to investors on the distribution of shareholding, analysis of shareholders, market values per share,earnings, dividends, net assets per share, the twenty largest shareholders of the Company, percentage of sharesheld by the public as per the Listing Rules of the Colombo Stock Exchange are given on pages 30 to 31 under thecaption “Information to Investors”.ReservesThe reserves of the Company, with the movements during the year, are given in Notes 22 and 23 to the FinancialStatements on page 27.Property, Plant & EquipmentDetails and movements of property, plant and equipment are given under Note 11 to the Financial Statements onpage 24.DonationsThe Company made donations amounting to Rs. 500,000/- during the year under review. (Rs.16,000/- during theyear ended 31 st March 2009)DividendsA final dividend of Rs. 1.35 per share was approved by the Directors for the year under review and the said dividendwas paid on 14th July 2010. The relevant certificate solvency was obtained from the Auditors in respect of the saiddividend. (In terms of the new Articles of Association which was adopted by a Special Resolution passed on 12 thAugust 2008, the Directors are empowered to approve the payment of dividends, whether interim or final, without theneed for approval by an ordinary resolution of the shareholders).An interim dividend of Rs.0.90 per share was paid on 17 th December 2009.Accordingly, the total dividend for the year under review amounts to Rs.2.25 per share (Rs.2.25 per share for the yearended 31 st March 2009).Statutory PaymentsThe Directors confirm that, to the best of their knowledge, all taxes, duties and levies payable by the Company, allcontributions, levies and taxes payable on behalf of and in respect of the employees of the Company and all otherknown statutory dues as were due and payable by the Company as at the Balance Sheet date have been paid or,where relevant provided for.Contingent LiabilitiesThere were no material Contingent Liabilities as at the Balance Sheet date, except as disclosed in Note 19 to theFinancial Statements on page 26.Events occurring after the Balance Sheet dateNo events have occurred since the balance sheet date which would require adjustment to, or disclosure in theFinancial Statements.Corporate GovernanceThe Directors confirm that the Company is compliant with the Corporate Governance Rules contained in the ListingRules of the Colombo Stock Exchange.Composition of the BoardThe Board of On'ally Holdings PLC comprises of ten members, eight of whom including the Chairman are NonExecutive Directors. Two members of the Board, viz., the Managing Director and the Deputy Managing Director serveas Executive Directors.11

On'ally Holdings PLCANNUAL REPORT OF THE BOARD OF DIRECTORSON THE AFFAIRS OF THE COMPANYThe Board has determined that one third of such Non Executive Directors are ‘independent’ as per the Listing Rulesof the Colombo Stock Exchange; such Independent Non Executive Directors being:Dr Prathap RamanujamMr. W N G SilvaMr. Brian Vinod SelvanayagamChairman, Managing Director, Board Meetings, Internal Controls and the Company SecretaryThe roles of Chairman and Managing Director are separate with a clear distinction of responsibilities.The Chairman is responsible for the efficient conduct of Board Meetings.The Managing Director is entrusted with the duty of overseeing the performance of the Company and implementsthe policies of the Board. He is fully accountable to the Board.The performance of the Company is monitored, discussed and reviewed by the Board at monthly Board Meetings.and professional advice, if necessary, is sought by the Directors.The Board is responsible for ensuring that adequate systems of internal controls are implemented to safeguard theassets of the Company and the Board is assisted by the Urban Development Authorised in this regards.P W Corporate Secretarial (Pvt) Ltd, who act as Secretaries to the Company, are qualified to act as Secretaries as perthe provision of the Companies Act No. 7 of 2007. The Directors have access to the advice and services of theCompany Secretaries, who are responsible to the Board for ensuring that Company secretarial procedures arefollowed and that the applicable rules and regulations are complied with.Board Sub CommitteesAudit CommitteeMs W J K Geeganage (Chairperson)Mr. W N G SilvaMr B V SelvanayagamThe Report of the Audit Committee is given on page 13.Remuneration CommitteeDr Prathap Ramanujam (Chairman)Mr. W N G SilvaMr R M AriyadasaThe Remuneration Committee recommends the remuneration payable to the Executive Directors and the employeesof the Company. The Board makes the final determination after considering such recommendations. Theremuneration packages are linked to the individual performances and are aligned with the Company’s business.The aggregate remuneration paid to the Executive and Non Executive Directors are given on page 28 of this Report.Annual General MeetingThe Notice of the Twenty Third (23 rd ) Annual General Meeting appears on pages 3 to 4.This Annual Report is signed for and on behalf of the Board of Directors by(Sgd)Dr. Prathap RamanujamChairman(Sgd)Mr Onally GulamhuseinManaging Director(Sgd)P W Corporate Secretarial (Pvt) LtdSecretaries19 th July 2010Colombo12

On'ally Holdings PLCREPORT OF THE AUDIT COMMITTEEThe Audit Committee which has been formally constituted as a Sub Committee of the Board, comprise the followingmembers Ms. Wasantha Geeganage, Mr. W N G Silva and Mr. B V Selvanayagam. The Chairperson, Ms. W.J.K.Geeganage is a fellow member of the Institute of Chartered Accountants with over 28 years of post qualificationexperience in finance. The Managing Director, Deputy Managing Director and the Accountant attend the meeting ofthe Audit Committee by Invitation, with the Company Secretaries in attendance.The Audit Committee is empowered to review and monitor the financial reporting process of the Company, so as toprovide additional assurance on the reliability of the financial statements through a process of independent andobjective review. As such, the Audit Committee acts as an effective forum in assisting the Board of Directors indischarging their responsibilities of ensuring the quality of financial reporting and related communications to theshareholders and the public.The Audit Committee is empowered, amongst other functions to examine any matters relating to the financial affairsof the Company and to review the adequacy of the internal control procedures, audit programmes, disclosure ofaccounting policies, compliance with statutory and corporate governance requirements etc. .The Committee along with the Board reviewed the annual financial statements for the year ended 31 st March 2010to ensure compliance with mandatory and statutory requirements.The Audit Committee is of the view that the internal controls prevalent within the Company are satisfactory andprovides reasonable assurance that the financial position of the Company is well monitored and the assets aresafeguarded.The Committee has recommended to the Board of Directors that Messrs PricewaterhouseCoopers be re-appointedthe Auditors for the year ending 31 st March 2011 subject to the approval of the shareholders at the Annual GeneralMeeting. The Audit Committee has also made its recommendations to the Board of Directors on the fees payable tothe Auditors for approval by the Board.(Sgd)Wasantha GeeganageChairperson – Audit Committee19 th July 2010Colombo13

On'ally Holdings PLCSTATEMENT OF THE DIRECTORS’ RESPONSIBILITYFOR THE PREPARATION OF FINANCIAL STATEMENTSThe Directors are required by the Companies Act, No. 7 of 2007 to prepare Financial Statements for each financialyear, which give a true and fair view of the state of affairs of the Company as at the end of the financial year and theincome and expenditure of the Company for the financial year.The Directors are also responsible to ensure that the Financial Statements comply with any regulations made underthe Companies Act, which specifies the form and content of Financial Statements and any other requirements thatapply to the Company’s Financial Statements under any other law.The Directors consider that the Financial Statements presented in this Annual Report have been prepared usingappropriate accounting policies consistently applied and supported by reasonable and prudent judgements andestimates and in compliance with the Sri Lanka Accounting Standards, Companies Act, No. 7 of 2007 and Sri LankaAccounting and Auditing Standards Act, No. 15 of 1985.The Directors are responsible for ensuring that the Company maintains sufficient accounting records that disclosethe financial position of the Company with reasonable accuracy and enable them to ensure that the FinancialStatements have been prepared and presented as aforesaid. They are also responsible for taking measures tosafeguard the assets of the Company and in that context to have proper regard to the establishment of appropriatesystems of internal control with a view to the prevention and detection of fraud and other irregularities.The Directors are also confident that the Company has adequate resources to continue in operation and haveapplied the ‘going concern basis’ in the preparation of Financial Statements.By Order of the BoardON’ALLY HOLDINGS PLC(Sgd)Dr Prathap RamanujamChairman(Sgd)Onally GulamhuseinManaging Director19 th July 2010Colombo14

On'ally Holdings PLCINDEPENDENT AUDITOR'S REPORTTO THE SHARE HOLDERS OF ON'ALLY HOLDINGS PLCReport on the Financial Statements1. We have audited the accompanying financial statements of On'ally Holdings PLC, which comprise the balancesheet as at 31 March 2010, and the income statement, statement of changes in equity and cash flow statementfor the year then ended, and a summary of significant accounting policies and explanatory notes as set out onpages 16 to 28.Management's Responsibility for the Financial Statements2. Management is responsible for the preparation and fair presentation of these financial statements inaccordance with Sri Lanka Accounting Standards. This responsibility includes: designing, implementing andmaintaining internal control relevant to the preparation and fair presentation of financial statements that arefree from material misstatement, whether due to fraud or error; selecting and applying appropriate accountingpolicies; and making accounting estimates that are reasonable in the circumstances.Scope of Audit and Basis of Opinion3. Our responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with Sri Lanka Auditing Standards. Those standards require that we plan and performthe audit to obtain reasonable assurance whether the financial statements are free from material misstatement.OpinionAn audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation.We have obtained all the information and explanations which to the best of our knowledge and belief werenecessary for the purposes of our audit. We therefore believe that our audit provides a reasonable basis forour opinion.4. In our opinion, so far as appears from our examination, the Company maintained proper accounting recordsfor the year ended 31 March 2010 and the financial statements give a true and fair view of the Company's stateof affairs as at 31 March 2010 and of its profit and cash flows for the year then ended in accordance with SriLanka Accounting Standards.Report on Other Legal and Regulatory Requirements5. These financial statements also comply with requirements of Section 151 (2) of the Companies Act, No.7 of 2007.(Sgd)PRICEWATERHOUSECOOPERSCHARTERED ACCOUNTANTS16 th July 2010COLOMBO.15

On'ally Holdings PLCINCOME STATEMENTFor the year ended 31 March 1998Year ended 31 March(all amounts in Sri Lanka Rupees) Notes 2010 2009Turnover 3 75,568,485) 71,547,230)Operating income 4 12,901,479) 11,500,838)Operating expenses (44,620,712) (39,968,945)Operating profit 5 43,849,252) 43,079,123)Finance income 7 9,225,919) 13,011,059)Profit before tax 53,075,171) 56,090,182)Tax 8 (18,469,086) (19,156,235)Profit for the year 34,606,085) 36,933,947)Earnings per share 9 2.47) 2.64)The notes on pages 20 to 28 form an integral part of these financial statements.Auditors' Report - page 15.16

On'ally Holdings PLCBALANCE SHEET(all amounts in Sri Lanka Rupees)31 March ggggggNotes 2010 2009ASSETSNon-current assetsProperty, plant and equipment 11 20,313,282 21,105,307Investment properties 12 894,897,604 894,897,604Deferred tax assets 17 1,170,853 1,088,906916,381,739 917,091,817Current assetsInventories 13 657,632 657,632Trade and other receivables 14 6,940,013 8,487,753Cash and cash equivalents 15 87,577,130 79,555,40895,174,775 88,700,793Total assets 1,011,556,514 1,005,792,610EQUITY AND LIABILITIESCapital and reservesStated capital 21 140,006,160 140,006,160Revaluation reserve 22 18,445,959 18,866,622Repairs and maintenance reserve 23 17,434,364 20,253,167Retained earnings 784,344,408 778,000,243960,230,891 957,126,192Non-current liabilitiesRental deposits 16 26,391,960 13,305,900Retirement benefit obligations 18 3,249,350 2,784,10029,641,310 16,090,000Current liabilitiesTrade and other payables 16 19,155,850 26,657,414Current tax liabilities 2,528,463 5,919,00421,684,313 32,576,418Total liabilities 51,325,623 48,666,418Total equity and liabilities 1,011,556,514 1,005,792,610The Board of Directors is responsible for the preparationand presentation of these financial statements. Thesefinancial statements were authorised for issue by theBoard of Directors on 22 nd June 2010.(Sgd) (Sgd) (Sgd)Prathap Ramanujam H P Silva Onally GulamhuseinChairman Managing Director Deputy Managing DirectorThe notes on pages 20 to 28 form an integral part of these financial statements.Auditors' Report - page 15.I certify that these financial statements have been preparedin compliance with the requirements of the CompaniesAct, No. 7 of 2007.17

On'ally Holdings PLCSTATEMENT OF CHANGES IN EQUITY(all amounts in Sri Lanka Rupees)Notes Stated Revaluation Repairs & Retained Totalcapital reserve maintenance earningsreserveBalance at 1 April 2008 140,006,160 19,287,285 21,072,633) 768,527,430) 948,893,508)Net profit –000) –000) –000) 36,933,947) 36,933,947)Depreciation transfer 22 –000) (420,663) –000) 420,663) –000)Transfer 23 –000) –000) (819,466) 819,466) –000)Dividend paid – 2008 10 –000) –000) –000) (16,100,708) (16,100,708)Dividend paid – 2009 –000) –000) –000) (12,600,555) (12,600,555)Balance at 31 March 2009 140,006,160 18,866,622 20,253,167 778,000,243) 957,126,192Balance at 1 April 2009 140,006,160 18,866,622 20,253,167 778,000,243) 957,126,192Net profit –000) –000) –000) 34,606,085) 34,606,085)Depreciation transfer 22 –000) (420,663) –000) 420,663) –000)Transfer 23 –000) –000) (2,818,803) 2,818,803) –000)Dividend paid – 2009 10 –000) –000) –000) (18,900,832) (18,900,832)Dividend paid – 2010 10 –000) –000) –000) (12,600,554) (12,600,554)Balance at 31 March 2010 140,006,160 18,445,959 17,434,364 784,344,408) 960,230,891The notes on pages 20 to 28 form an integral part of these financial statements.Auditors' Report - page 15.18

On'ally Holdings PLCCASH FLOW STATEMENTFor the year ended 31 March 1998Year ended 31 March(all amounts in Sri Lanka Rupees) Notes 2010 2009Operating activitiesCash generated from operations 24 52,426,597) 44,099,578)Interest received 7 9,225,919) 13,011,059)Tax paid (21,941,574) (18,350,165)Net cash from operating activities 39,710,942) 38,760,472)Investing activitiesPurchase of property, plant and equipment 11 (451,559) (469,360)Proceeds from sale of property, plant and equipment 263,725) 2,250)Net cash used in investing activities (187,834) (467,110)Financing activitiesDividends paid 10 (31,501,386) (28,701,263)Net cash used in financing activities (31,501,386) (28,701,263)Increase in cash and cash equivalents 8,021,722) 9,592,099)Movement in cash and cash equivalentsAt start of year 79,555,408) 69,963,309)Increase 8,021,722) 9,592,099)At end of the year 15 87,577,130) 79,555,408)The notes on pages 20 to 28 form an integral part of these financial statements.Auditors' Report - page 15.19

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS(In the notes all amounts are shown in Sri Lanka Rupees unless otherwise stated)1. General informationThe Company is a public limited company incorporated in Sri Lanka and re-registered under the CompaniesAct, No. 07 of 2007 .The registered office of the Company is situated at No. 20, Galle Road, Colombo 4 and theprincipal place of business is Unit 603, No. 02, Galle Road, Colombo 04 .The principal activity of the Company is property development / real estate.2. Summary of significant accounting policiesThe principal accounting policies applied in the preparation of these financial statements are set out below.These policies have been consistently applied to all the years presented, unless otherwise stated.2.01 Basis of preparationThe financial statements are prepared in accordance with and comply with Sri Lanka Accounting Standards.They have been prepared under the historical cost convention, as modified by the revaluation of investmentproperties and buildings.2.02 Property, plant and equipmentAll property, plant and equipment is initially recorded at cost. Buildings are subsequently shown at marketvalue, based on valuations by an external independent valuer, less subsequent depreciation for such property.All other property, plant and equipment is stated at historical cost less depreciation.Increases in the carrying amount arising on revaluation of Buildings are credited to revaluation reserve inshareholders' equity. Decreases that offset previous increases of the same asset are charged against therevaluation reserve; all other decreases are charged to the income statement. Each year the difference betweendepreciation based on the revalued carrying amount of the asset charged to the income statement anddepreciation based on the assets' original cost is transferred from revaluation reserve to retained earnings.Depreciation is calculated on the straight line method to write off the cost of each asset, to their residual valuesover their estimated useful life as follows:Building8 - 25 yearsMachinery4 - 12 yearsOffice equipment4 yearsMotor vehicles8 yearsFurniture and fittings4 yearsLand is not depreciated as it is deemed to have an indefinite life.Where the carrying amount of an asset is greater than its estimated recoverable amount it is written downimmediately to its recoverable amount.Gains and losses on disposal of property, plant and equipment are determined by reference to their carryingamount and are taken into account in determining operating profit.2.03 Investment propertiesInvestment property, principally comprising freehold office building, is held for long - term rental yields and is notoccupied by the Company. Investment property is carried at fair value, representing open market value determinedonce in three years by an independent valuer. The fair valuation is reviewd annually by the Board of Directors withthe assistance of independent valuers. Changes in fair values are recorded in the Income statement.2.04 Impairment of assetsAssets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable. An impairmenr loss is recognised for theamount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is thehigher of an asset's fair value less costs to sell and value in use. For the purposes of assessig impairment,assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generatingunits). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairmentat each reporting date.2.05 InventoriesInventories are stated at the lower of cost or net realisable value. Cost is determined by the first-in, first-out(FIFO) method.20

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)2.06 Trade receivablesTrade receivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based ona review of all outstanding amounts at the year end. Bad debts are written off during the year in which they are identified.2.07 Cash and cash equivalentsCash and cash equivalents includes cash in hand, deposits held at call with banks, investments in treasurybills and re-purchase agreements.2.08 Current taxes and deferred income taxesThe tax expenses for the year comprise current tax and defferred tax. Tax is recognised in the income statement.The charge for current tax is based on the results for the year as adjusted for disallowable itemscalculated on the basis of the tax laws in force at the balance sheet date.Deferred income tax is provided in full, using the liability method, for all temporary differences arising betweenthe tax bases of assets and liabilities and their carrying values in the financial statements. Currently enactedtax rates are used to determine deferred income tax.The principal temporary differences arise from depreciation on property, plant and equipment provision for retirementobligation and tax losses carried forward. Deferred tax assets relating to the carry forward of unused taxlosses are recognised to the extent that it is probable that future taxable profit will be available against which theunused tax losses can be utilised.2.9 Retirement benefit obligationsChange in accounting policyDuring the year under review, the Company Changed its accounting policy on defined benefit obligation to complywith the revised accounting standard SLAS 16, Employee Benefit which is applicable for financial statementscovering annual periods beginning on or after 1 July 2007. The Company adopted revised SLAS 16, for the yearended 31 March 2010. The opening balance was not recomputed based on the current method and the transitionaladjustment was considered for the current year since the amount concerned is immaterial.Defined benefit plans define an amount of benefit that an employee will receive on retirement, usually dependenton one or more factors such as age, years of service and compensation.The liability recognized in the balance sheet in respect of defined plans is the present value of the definedbenefit obligation at the balance sheet date less the fair value of plan assets if any, together with adjustmentsfor unrecognized past service cost. The defined benefit obligation is calculated annually by the Company usingthe projected unit credit method based on the formula prescribed in Sri Lanka Accounting Standard 16; EmployeeBenefits. The present value of the defined benefit obligation is determined by discounting the estimatedfuture cash flows using the interest rates of high quality corporate bounds that are denominated in thecurrency in which the benefits will be paid, and that have terms to maturity approximating to the terms of therelated pension liability.Gains and losses arising from experience adjustments and changes in actuarial assumptions are charged orcredited to the income statement in the period in which they arise.Past service costs are recognize immediately in the income statement, unless the changes to the plan areconditional on the employees remaining in service for a specific period of time (the vesting period). In thiscase, the past service costs are amortised on straight-line basis over the vesting period.2.10 Defined contribution plansAll employees of the Company are members of Employees' Provident Fund and the Employees' Trust Fund,to which the Company contributes 15% and 3% respectively of such employees consolidated wage or salary.2.11 ProvisionsProvisions are recognised when the Company has a present legal or constructive obligation as a result of pastevents, it is probable that an outflow of resources will be required to settle the obligation; and the amount hasbeen reliably estimated. Provisions are not recognised for future operating losses.2.12 Revenue recognitionRental and other incomeRental income earned from commercial units rented to tenants and other operating income are recognised onan accrual basis.Interest incomeInterest income is recognised as it accrues unless collectibility is in doubt.21

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)2.13 Dividend distributionDividend distribution to the Company's shareholders is recognised as a liability in the Company'sfinancial statements in the period in which the dividends are approved by the Company's shareholders.2.14 Segment informationManagement has determined renting of investment property as one operating segment, and accordinglythese financial statements do not provide information by segment.3. TurnoverTurnover wholly consists of rental income.4. Operating income2010 2009Hire of premises 1,344,000 1,111,500Electricity fee 4,671,692 4,437,594Rental on hoarding and sign board 5,674,000 4,724,500Maintenance services 360,000 360,000Others 851,787 867,24412,901,479 11,500,838Others consists of income on vehicle parking of Rs. 280,700 (2009- Rs. 235,700), penalty on delayed rent of Rs.169,872 (2009 - Rs. 214,217) and profit on disposal of fixed assets of Rs. 263,725 (2009 - Rs. Nil).5. Operating profitThe following items have been charged in arriving at operating profit :)2010 2009Directors' emoluments 4,600,300 4,538,000Depreciation on property, plant and equipment (Note 11)Depreciation on property, - owned assets 1,239,142 1,260,980Depreciation on property, - leased assets NIl NilAuditors' remuneration – Audit fee 150,000 150,000Auditors' remuneration – Certification fee 24,700 30,000Management fees (Note 20) 593,200 480,000Repairs and maintenance expenditure 3,001,400 1,087,579Auditors' remuneration – Investement property 2,818,803 819,466Auditors' remuneration – Building and office equipments 182,597 268,113Staff cost (Note 6) 9,226,918 7,853,486Provision for doubtful debtors 180,000 180,0006. Staff costs2010 2009Salaries and wages 4,999,773 4,101,467Staff bonus 2,568,221 1,951,952Defined contribution plan 1,193,674 1,002,317Retirement benefit obligation (Note 18) 465,250 797,7509,226,918 7,853,4867. Finance income2010 2009Interest income 9,225,919 13,011,05922

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)8. TaxThe charge for tax consists of :2010 2009Current tax 18,551,033) 19,401,170)Deferred tax (Note 17) (81,947) (244,935)18,469,086) 19,156,235)The tax on the Company's profit before tax differs from the theoretical amount that would arise using the basic taxrate of the Company as follows:2010 2009Profit before tax 53,075,171) 56,090,182)Tax calculatedssss– on trading profits at a tax rate of 35% (2009 – 35%) 15,347,239) 15,077,693)ssss– on interest income at a tax rate of 35% (2009 – 35%) 3,229,072) 4,553,871)18,576,311) 19,631,564)Income not subject to tax Nil) (118,130)Effect on notional tax credit (1,023,710) (937,750)Expenses not deductible for tax purposes 916,485) 580,551)Tax charge 18,469,086) 19,156,235)9. Earnings per ordinary shareBasic earnings per share is calculated by dividing the net profit attributable to the shareholders by the weightedaverage number of shares in issue during the year.2010 2009Net profit attributable to shareholders 34,606,085) 36,933,947)Weighted average number of shares in issue 14,000,616) 14,000,616)Basic earnings per share (Rs.) 2.47) 2.64)10. Dividends(a) During the year the directors paid a final dividend of Rs 1.35 per share amounting to Rs. 18,900,832 (2009– Rs. 16,100,708) for the year ended 31 March 2009. (A final divident of Rs. 1.15 per share amounting to Rs.16,100,708 for the year ended 31 March 2008 was paid during the year 2008/2009).(b)(c)The directors have paid an interim dividend of Rs. 0.90 per share amounting to Rs. 12,600,555 for the yearended 31 March 2010. ( An Interim divident of Rs. 0.90 per share amounting to Rs. 12,600,555 was also paidfor the year ended 31 March 2009).A dividend in respect of the year ended 31 March 2010 of Rs. 1.35 per share amounting to a total of Rs18,900,832 has been approved by the Board of Directors for payment on 14 th July 2010.23

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)11. Property, plant and equipmentBuilding Machinery Office Furniture Motor Totalequipment & fittings Vehicles& toolsYear ended 31 March 2009Opening net book amount 21,504,396) 46,650) 178,550) 173,176) –))))) 21,902,772)Additions 69,000) 535) 223,895) 175,930) –))))) 469,360)Disposal –))))) –))))) (5,844) –))))) –))))) (5,844)Depreciation charge (Note 5) (1,000,587) (40,585) (102,241) (117,568) –))))) (1,260,981)Closing net book amount 20,572,809) 6,600) 294,360) 231,538) –))))) 21,105,307)31 March 2009Cost / valuation 24,939,916) 1,669,838) 2,454,804) 2,980,741) 2,448,083) 34,493,382)Accumulated depreciation (4,367,107) (1,663,238) (2,160,444) (2,749,203) (2,448,083) (13,388,075)Closing net book amount 20,572,809) 6,600) 294,360) 231,538) –))))) 21,105,307))Year ended 31 March 2010Opening net book amount 20,572,809) 6,600) 294,360) 231,538) –))))) 21,105,307)Additions –))))) –))))) 243,451) 208,108) –))))) 451,559)Disposal –))))) –))))) –))))) (4,442) –))))) (4,442)Depreciation charge (Note 5) (1,003,461) (4,397) (124,906) (106,378) –))))) (1,239,142)Closing net book amount 19,569,348) 2,203) 412,905) 328,826) –))))) 20,313,282)At 31 March 2010Cost / valuation 24,939,916) 1,669,838) 2,416,689) 3,082,249) 2,448,083) 34,556,775)Accumulated depreciation (5,370,568) (1,667,635) (2,003,784) (2,753,423) (2,448,083) (14,243,493)Closing net book amount 19,569,348) 2,203) 412,905) 328,826) –))))) 20,313,282)(a)Building consists of owner occupied part of investment properties. The value of land is included in investmentproperties.(b) The cost of fully depreciated assets still in use, as at 31 March 2010 amounted to Rs. 8,702,410 (2009 - Rs 8,550,060).(c)During the year the Company had disposed fully depreciated office equipment, the cost of which was Rs.281,566.24

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)12. Investment propertiesAs per Sri Lanka Accounting Standards (SLAS) 40, (Revised 2005), Investment Property, the directors have adoptedthe fair value model for accounting for investment properties as at 1 April 2005. The investment properities aretherefore revalued every three years at fair value, comprising market value by an independent professionally qualifiedvaluer. The last valuation was performed by valuer, D.S.A. Senaratne (AIV), a prefessionally qualified valuer for theyear ened 31 March 2008.The Baord of Directors have assessed the current value of the investment properties as at 31 March 2010 with thatprovided by the valuer last year and have decided that there is no materil change in value requiring adjistment tothe previous valuation.2010 2009At beginning of year 894,897,604) 894,897,604At 31 March 894,897,604) 894,897,60413. InventoriesInventories consists of consumables.14. Trade and other receivablesDebtors are made up as follows : 2010 2009Trade receivables 215,964) 261,442Other accounts receivable [Note (a) below] 4,210,507) 3,143,964Prepayments and accrued income [Note (b) below] 2,513,542) 5,082,3476,940,013) 8,487,753(a) Other accounts receivable mainly consists of electricity charges receivable from tenants of Rs.704,384 (2009 -Rs 506,144), service deposit of Rs 1,629,268 (2009 - Rs 413,677) and maintenance income receivable net ofprovision from a third party amounting to Rs 1,073,500 (2009 - Rs 893,500 net). As discussed in note 19, theCompany instituted action to recover the gross amount due, totalling to Rs 2,210,000 as at 31 March 2010.(b) Pre-payments and accrued income mainly comprise insurance pre-paid expenses of Rs 1,017,400 (2009 - Rs993,262) and interest receivable of Rs 1,139,582 (2009 - Rs 3,847,086).15. Cash and cash equivalentsDebtors are made up as follows : 2010 2009Cash at bank and in hand 5,334,889 5,190,969Short term deposits – treasury bills 82,242,241 74,364,43987,577,130 79,555,408The weighted average effective interest rate on short term deposits was 2010 11.44% (2009 - 18.16%)For the purposes of the cash flow statement, the year end cash & cash equivalent comprise only the above.16. Trade and other payablesNon-current 2010 2009Rental deposits 26,391,960 13,305,900CurrentRental deposits 13,643,571 21,475,551Payables to related parties [Note 25 (iii)] 1,322,100 1,322,100Other accounts payable [Note (a) below] 2,426,934 2,107,450Accruals and provisions [Note (b) below] 1,763,245 1,752,31319,155,850 26,657,41445,547,810 39,963,314(a)(b)Other accounts payable mainly consists of rent in advance of Rs. 524,086. (2009 - Rs. 364,898) andhoarding rent advance of Rs. 364,898 (2009 - 364,898).Accruals and Provision mainly consists of VAT payable of Rs. 804,019 (2009 - Rs. 730,602) ESC payableRs. 237,750 (2009 - Rs. 212,232) and NBT payable Rs. 229,749 (2009 - Rs. 40,754)25

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)17. Deferred income taxesDeferred income taxes are calculated on all temporary differences under the liability method using a principal taxrate of 35% . The movement on deferred income tax account is as follows :2010 2009At beginning of year (1,088,906) (843,971)Release for the year (Note 8) (81,947) (244,935)At 31 March 2010 (1,170,853) (1,088,906)The movement of deffered income tax assets is as follows:Accelerated Retirement benefit Totaltax depreciationobligationAt 1 April 2009 114,471) 974,435 1,088,906Income Statement (80,891) 162,838 81,947At 31 March 2010 33,580 1,137,273 1,170,85318. Retirement benefit obligationsThe amounts recognised in the balance sheet are determined as follows:2010 2009Present value of unfunded obligation 3,249,350) 2,784,100Liability in the balance sheet)3,249,350) 2,784,100The movement in the defined obligation over the year is as follows:At 1 April 2009 2,784,100)Current service cost 231,350)Interest cost 276,610)Transitional adjustment (42,710)Benefits paidNil)At 31 March 2010 3,249,350)The amounts recognised in the income statment are as follows:Current service cost 231,350)Interest cost 276,610)Transitional adjustment (42,710))Total included in the costs (Note 6) 465,250)The principal actuarial assumptions used were as follows:Discount rate 10%Future salary increases 10%Retiring age60 years19. ContingenciesThe Company has contingencies in respect of the following legal proceedings:(a) The Company instituted action against a third party who jointly owns a part of the condominium building(owned by the Company and the said third party), to recover an amount of Rs. 2,210,000 due as at 31 March2010 for maintenance services provided by the Company. The Company made a provision of Rs. 1,136,500on the amount receivable, pending settlement of legal proceedings instituted.(b) A former employee of the Company has made an application in the Labour Department claiming compensationfor termination of services. The order is pending the determination of the Commissioner of Labour.There were no other contingencies at the balance sheet date. In the opinion of the directors, after obtainingappropriate legal advice, the outcome of the above actions will not give rise to any significant loss.20. CommitmentsFinancial commitmentsThe Company has an annual commitment to pay Rs. 593,200 as management fees to the Urban DevelopmentAuthority (UDA) for services rendered. UDA reserves the right to revise these fees.There were no other commitments at the balance sheet date.26

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)21. Stated capitalNumber ofSharessharesRs.At 31 March 2009 14,000,616) 140,006,160)At 31 March 2010 14,000,616) 140,006,160)All issued shares are fully paid.22. Revaluation reserveThe revaluation reserve and other reserves are not distributable.2010 2009At beginning of year 18,866,622) 19,287,285)Depreciation transfer (420,663) (420,663)At end of year) 18,445,959) 18,866,622)23. Repairs and maintenance reserveThe repairs and maintenance reserve is an appropriation made out of profit in previous years to meet futureabnormal maintenance costs of investment properties.2010 2009At beginning of year 20,253,167) 21,072,633)Transfers to retained earnings (2,818,803) (819,466)At end of the year 17,434,364) 20,253,167)24. Cash generated from operationsReconciliation of profit before tax to cash generated from operations:2010 2009Profit before tax 53,075,171) 56,090,182)Adjustments for:Depreciation (Note 11) 1,239,142) 1,260,981)Interest income (Note 7) (9,225,919) (13,011,059)Net (profit)/loss on disposal of property, plant and equipment (259,283) 3,594)Changes in working capital:- Inventory Nil) (582,661)- trade and other receivables 1,547,740) (2,214,494)- payables 5,584,496) 1,755,285)Retirement benefit obligations (Note 18) 465,250) 797,750)Cash generated from operations 52,426,597) 44,099,578)25. Directors' interests in contracts with the CompanyMr. H.P. Silva, Ms. W. J. K. Geeganage , Mr. R.M. Ariyadasa , Dr. Prathap Ramanujam and Mr. W.N. Gamunu SilvaDirectors of the Company were Director General, Deputy Director General (Finance), Director (DevelopmentPlanning - North & East), of the Urban Development Authority of Sri Lanka and the Secretary and Senior EngineeringConsultant for Ministry of Urban Development and Scared Area Development respectively at the Balance Sheetdate.Dr. S A Gulamhusein, a director of the Company is also a Director of Network Communications (Private) Limited.27

On'ally Holdings PLCNOTES TO THE FINANCIAL STATEMENTS (Contd.)The Company has carried out the following transactions during the year with above mentioned related parties:(i) Sales of goods and servicesRent income from:2010 2009Network Communications (Private) Limited 2,644,200 2,332,350(ii) Purchase of goods and servicesManagement fee paidUrban Development Authority 593,200 480,000(iii) Outstanding balances arising from sale / purchase of servicesPayable to related partiesNetwork Communications (Private ) Limited ( Security deposit) 1,322,100 1,322,100(a) None of the other directors had a direct or indirect interest in any contract with the Company.(b) The directors have disclosed the nature of their interests in contracts at meetings of Directors.26. Related party transactionsKey management compensationKey management includes directors (executive and non executive). The compensation paid or payable to keymanagement for employee services is shown below:2010 2009Salaries and other short-term employee benefits 4,600,300 4,538,000Termination benefits Nil NilPost employment benefits Nil NilOther long-term benefits Nil NilThere were no other related party transactions during the year other than those disclosed above and in Note 25 tothese financial statements.27. Post balance sheet eventsNo events have occurred since the balance sheet date which would require adjustments to, or disclosure in, thefinancial statements.28

On'ally Holdings PLCSIX YEAR REVIEWSUMMARY OF RESULTSYear ended 31 March 2005 2006 2007 2008 2009 2010Rs. Rs. Rs. Rs. Rs. Rs.OPERATING RESULTSRestatedTurnover 46,525,485 51,354,985 55,443,605 61,864,410 71,547,230 75,568,485Operating profit 29,002,606 149,814,110 31,687,930 182,177,787 43,079,123 43,849,252Interest income 2,527,662 3,871,884 5,449,533 10,341,778 13,011,059 9,225,919Profit before Tax 1,530,268 153,685,994 37,137,463 192,519,565 56,090,182 53,075,171Tax (9,648,162) (10,644,649) (12,419,913) (16,179,907) (19,156,235) 18,469,086Profit after tax 21,882,106 143,041,345 24,717,550 176,339,658 36,933,947 34,606,085Profit brought forward 20,622,818 487,768,320 608,408,680 614,308,738 768,527,428 778,000,243Prior year adjustment 464,764,166 Nil Nil Nil Nil NilProfit available for appropriation 507,269,090 630,809,665 633,126,230 790,648,396 805,461,377 812,606,328Transfer (to)/from reserves (2,000,000) Nil 3,583,493 1,680,082 1,240,129 3,239,466Dividends (17,500,770) (22,400,985) (22,400,985) (23,801,050) (28,701,263) (31,501,386)Profit carried forward 487,768,320 608,408,680 614,308,738 768,527,428 778,000,243 784,344,408ASSETSNon-current assetsProperty, plant & equipment 19,728,628 18,298,890 16,849,423 21,902,772 21,105,307 20,313,282Investment properties 632,105,326 749,945,326 749,945,326 894,897,604 894,897,604 894,897,604Deffered tax assets Nil Nil 568,898 843,971 1,088,906 1,170,853Current assets 48,800,262 51,813,221 61,680,023 76,311,539 88,700,793 95,174,775Total assets 700,634,216 820,057,437 829,043,670 993,955,886 1,005,792,610 1,011,556,514EQUITY AND LIABILITIESCapital & reservesStated capital 140,006,160 140,006,160 140,006,160 140,006,160 140,006,160 140,006,160Repairs & maintenance reserve 26,000,000 26,000,000 22,584,611 21,072,633 20,253,167 17,434,364Revaluation reserve 13,294,645 13,294,645 13,126,541 19,287,285 18,866,622 18,445,959Retained earnings 487,768,320 608,408,680 614,308,738 768,527,428 778,000,241 784,344,408Non - current liabilities 1,701,054 1,794,187 28,909,306 22,163,201 16,090,000 29,641,310current liabilities 31,864,037 30,553,765 10,108,314 22,899,179 32,576,420 21,684,313Total equity & liabilities 700,634,216 820,057,437 829,043,670 993,955,886 1,005,792,610 1,011,556,514KEY INDICATORSEarnings per share 1.56 10.22 1.77 12.60 2.64 2.47Earnings per share(exclusive fair value gain) 1.56 1.80 1.77 2.24 2.64 2.47Dividend per share 1.25 1.60 1.60 1.70 2.05 2.25Net Assets per share 47.65 56.26 56.43 67.78 68.36 68.58Market price per share 23.75 35.75 38.75 31.50 27.75 42.00OTHERSNumber of shareholders 571 648 650 630 619 585Dividend cover (Times) 1.25 6.39 1.10 7.41 1.29 1.10Dividend cover((Times)exclusive fair value gain)) 1.25 1.12 1.10 1.32 1.29 1.1029

On'ally Holdings PLCINFORMATION TO INVESTORS01) DISTRIBUTION OF SHAREHOLDING AS AT 31st March 2010From To No. of PercentageShareHolders No. of Shares %1 - 1,000 469 105,168 0.751,001 - 10,000 94 283,440 2.0210,001 - 100,000 16 596,877 4.26100,001 - 1,000,000 3 1,233,677 8.81Over 1,000,000 3 11,781,454 84.15Total 585 14,000,616 100.0002) ANALYSIS OF SHAREHOLDERS AS AT 31st March 2010Category No. of Shareholders No. of Shares %Local Individuals 540 3,307,567 23.62Local Institutions 37 10,598,326 75.70Foreign Individuals 6 66,123 0.47Foreign Institutions 2 28,600 0.20Total 585 14,000,616 100.00SHARE PRICES FOR THE YEARMarket price per share31.03.2010 31.03.2009Rs.Rs.Highest during the period Rs. 45.00 (05/02/2010) Rs. 36.75 (27/08/2008)Lowest during the period Rs. 27.00 (07/04/2009) Rs. 22.50 (08/01/2008)As at end of the period Rs. 42.00 Rs. 27.75PUBLIC HOLDINGThe percentage of shares held by the public as at 31 st March 2010 is 7.16%.PER SHARE DATA AS AT 31 MARCH 2010 2009Earnings per share (Rs) 2.47 2.64Earnings per share (exclusive fair value gain) (Rs) 2.47 2.64Dividend per share (Rs) 2.25** 2.05***Net assets per share (Rs) 68.58 68.36Market price per share (Rs) 42.00 27.75** Final dividend of Rs. 1.35 per share paid for the year ended 31/3/09 andInterim dividend of 90 cents per share paid for the year ended 31/3/10.*** Final dividend of Rs. 1.15 per share paid for the year ended 31/3/08 andInterim dividend of 90 cents per share paid for the year ended 31/3/09.30

On'ally Holdings PLCMAJOR SHAREHOLDERS OF THE COMPANYName As at 31/03/2010 As at 31/03/2009No. of Shares (%) No. of Shares (%)Urban Development Authority 6,666,666 47.617 6,666,666 47.617Ceylon & Foreign Trades PLC 3,400,360 24.287 3,400,360 24.287Mr. O Gulamhusein 1,714,428 12.245 1,714,428 12.245Mr. B V Selvanayagam, Mr.S G Selvanayagam 750,000 5.357 750,000 5.357& Mrs L SelvanayagamWaldock Mackenzie Ltd/Dr.S A Gulamhusein 328,832 2.349 330,932 2.364Mrs. L Selvanayagam 154,845 1.106 154,845 1.106Merrill J Fernando & Sons (Pvt) Limited 95,832 0.684 95,832 0.684Estate of the Late Mrs. Y Gulamhusein 91,706 0.655 91,706 0.655Mr. H W M Woodward 60,000 0.429 66,500 0.475Mr. W R H Perera 51,075 0.365 51,075 0.365Dr. S A Gulamhusen 45,850 0.327 46,150 0.330Majestic Investments (Pvt) Ltd. 39,600 0.283 11,600 0.083Mrs. K S Cooray 33,332 0.238 33,332 0.238Mr. K Gnanethiran 30,000 0.214 30,000 0.214Tranz Dominion, L.L.C. 25,000 0.179Mr. M U M Azmi 24,100 0.172 24,100 0.172Mr. A A Noordeen 21,900 0.156 21,500 0.154Mr. D A S S Ganegoda 19,482 0.139 29,882 0.213Mr. K S A Ramchandani 17,400 0.124Mr. J A C J M De Saram 15,000 0.107 17,600 0.12613,585,408 97.033Others 415,208 2.967TOTAL 14,000,616 100.0031

On'ally Holdings PLC32

On'ally Holdings PLCFORM OF PROXYI/We ................................................................................................................(NIC NO. ...............................................)of .......................................................................................................................................................................................being amember / members* of ON’ALLY HOLDINGS PLC hereby appoint ............................................................................................................................................................................................................................. (NIC No. .....................................................)of ...................................................................................................................................................................(or failing him / her).Dr. Prathap RamanujamMr. Onally GulamhuseinMr. Hilary Prasanna de SilvaMr. Welapura Naidelage Gamunu SilvaDr. Shabbir Abbas GulamhuseinMr. Ratnayake Mudiyanselage AriyadasaMs. Wasantha Jayaseeli Kapugama GeeganageMr Brian Vinod SelvanayagamMrs. Tharsini Sarveshwaranof Colombo or failing him*of Colombo or failing him*of Colombo or failing him*of Colombo or failing him*of Colombo or failing him*of Colombo or failing him*of Colombo or failing her*of Colombo or failing him*of Colombo*as my/our* proxy to represent me/us* and on my/our* behalf at the Twenty Third (23 rd ) Annual General Meeting of theCompany to be held on Tuesday, 17 th August 2010 at 10.00 a.m. and at any adjournment thereof and every poll whichmay be taken in consequence of the aforesaid meeting.I/We,* the undersigned, hereby authorised my/our proxy to speak and vote for me/us* and on my/our* behalf inaccordance with the preference as indicated below.1. Routine Business1.1 To receive and consider the Annual Report of the Board ofDirectors and the Statements of Accounts for the year ended31st March 2010 with the Report of the Auditors thereon1.2 To appoint Mr. Onally Gulamhusein who is 86 years of ageas a Director of the Company pursuant to the provisions of theCompany Act, No. 7 of 20071.3 To re-elect Ms. Wasantha Jayaseeli Kapugama Geeganage,who retires by rotation in terms of Article 88(i) of the Articlesof Association of the Company1.4 To re-appoint Messrs PricewaterhouseCoopers, CharteredAccountants, as Auditors of the company and to authorise theDirectors to fix their remuneration.1.5 To authorise the Directors to determine donations for the yearending 31st March 2011 and up to the date of the next AnnualGeneral Meeting2. Special Business2.1 To amend the Articles of Association to comply withprovisions contained in Section 6A of the newListing Rules of the Colombo Stock Exchange;ForAgainstIn witness my/our* hands this ……………. day of ……………. Two Thousand and Ten.*Please delete as appropriateNotes:1. A proxy need not be a shareholder of the Company.2. Instructions as to completion appear overleaf.…………........………………Signature of Shareholder/s33

On'ally Holdings PLCINSTRUCTIONS FOR COMPLETION1. Kindly perfect the Form of Proxy by filling in legibly your full name address and the National Identity Cardnumber and signing in the space provided and filling in the date of signature.2. The completed Form of Proxy should be deposited at the Registered Office of the Company No.20,Bambalapitiya Road, (Galle Road) Colombo 4, Sri Lanka forty seven (47) hours before the time appointed forthe Meeting.3. If you wish to appoint a person other than the Chairman or a Director of the Company as your Proxy, pleaseinsert the relevant details in the space provided (above the names of the Board of Directors) on the ProxyForm.4. If the Form of Proxy is signed by an Attorney, the relative Power of Attorney should accompany the Form of Proxyfor registration if such Power of Attorney has not already been registered with the Company.5. If the appointor is a Company / Incorporated body this Form must be executed in accordance with the Articlesof Association / Statute.34

On'ally Holdings PLCATTENDANCE SLIPTWENTY THIRD ANNUAL GENERAL MEETINGI/We hereby record my/our presence at the Twenty Third Annual General Meeting of On’ally Holdings PLC at the GalleFace Hotel No. 2, Galle Road, Colombo 03, on Tuesday, 17 th August 2010 at 10.00 a.m.1.1 Signature of Shareholder : .............................................................................................................................1.2 Full Name of Shareholder : .............................................................................................................................1.3 NIC Number Shareholder : .............................................................................................................................2.1 Signature of Proxyholder : .............................................................................................................................2.2 Full Name of Proxyholder : .............................................................................................................................2.3 NIC Number of Proxyholder : .............................................................................................................................Notes:1. Shareholders/Proxyholders are requested to bring the duly perfected Attendance Slip with them when attendingthe Meeting and hand it over at the entrance to the Meeting Hall.2. Shareholders are also kindly requested to indicate any changes in their addresses by completing the following.Folio No./Share Certificate No. : …………………………………………………New Address : ……………………………………………..……………………………………………..……………………………………………..3. Please bring your National Identity Card when attending the Meeting.35