THREE ACRE FARMS PLC

CORPORATE INFORMATIONCompany NameThree Acre Farms PLCRegistration Number PQ 195Stated Capital Rs. 623,604,000Number of Shares 23,545,000Date of Incorporation 4 th March, 1963Registered Address No. 15,.Rock House LaneColombo 15Sri LankaTel : ' +94-(11) - 2522556Fax : +94-(11) - 2524163+94-(11) - 5351192e-mail : info.cge@prima.com.lkBankersNational Development Bank PLCDeutsche AG BankBank of CeylonSeylan Bank PLCINTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 2 INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 11

INVESTOR INFORMATIONCORPORATE SUMMARYMarket Value of Shares as at 30.09.2008 30.09.2007Rs.RsName of Directors Mr. Cheng Chih Kwong, Primus Chairman & CEOHighest Market Value 10.00 10.00Lowest Market Value 8.25 6.50Mr. Tan Beng ChuanMr. Cheng Chih Cheng, RobertMr. Sunil LeeniyagodaExecutive Director & GGMDirectorDirectorClosing 8.25 8.75AuditorsKPMG Ford Rhodes, Thornton & Co.Company SecretaryS S P Corporate Services (Pvt) LimitedNo. 101,Inner Flower RoadColombo 3Tel : ' 2573485INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 10 INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 3

INCOME STATEMENTQUARTERLY REVIEWfor the nine months ended 30 th September 2008Group Group Company2008 2007 Change 2008 2007Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘0003,130,995 2,456,222Revenue 675,662 696,190 -3% 606,800 585,648Cost of Sales (816,144) (581,036) 40% (741,169) (440,881)Gross (Loss)/Profit (140,482) 115,154 NM (134,369) 144,767Other Operating Profit / (Loss) 18,603 (15,732) NM 17,359 (14,692)Other Operating Income /(Expenses)5,697 (2,333) NM 4,968 (2,710)Selling & Distribution Expenses (1,596) (938) 70% (1,592) (923)Administrative Expenses (13,370) (9,633) 61% (12,820) (9,188)(Loss)/Profit from Operations (131,148) 86,518 NM (126,454) 117,254Finance Income 350 223 57% (176) -(Loss)/Profit Before Tax (130,798) 86,741 NM (126,630) 117,254Tax Expense 19,555 (11,122) NM 19,758 (10,321)Net (Loss)/Profit After Tax (111,243) 75,619 NM (106,872) 106,933Accumulated (Losses) B/F (343,637) (405,104) (202,271) (256,958)Accumulated (Losses) C/F (454,880) (329,485) (309,143) (150,025)(Loss)/Earnings per ShareBasic (Rs.)(4.72) 3.21 (4.54) 4.54THIRD QUARTER ENDED 30 th SEPTEMBER 2008Group net turnover for the 3 rd quarter 2008 was Rs.235.42Mn as compared toRs.245.59Mn during the 3 rd quarter of 2007, a decrease of Rs.10.17Mn or 4%.Group net turnover for the first nine months of 2008 was Rs.675.66Mn ascompared to Rs.696.19Mn during the same period of 2007, a decrease ofRs.20.53Mn or 3%.Group has reported a net loss of Rs.40.12Mn during the 3 rd quarter of 2008 ascompared to net profit of Rs.24.44Mn reported in the 3 rd quarter of 2007. Forthe first nine months of 2008, the group has reported a net loss of Rs.111.24Mnas compared to net profit of Rs.75.62Mn reported in the first nine months of2007.The breeder farms continued to suffer losses due to the poor demand in themarket for Day-Old-Chicks (DOC). The Management has taken necessary stepsto minimize the losses such as curtailed the production of Commercial DOC byearly culling the parent birds.The Company and the Group have followed the same accounting policies andmethods of computation as disclosed in the Annual Report for financial yearended 31 st December 2007.There have been no other events subsequent to the interim period which requiredisclosure in the interim Financial Statements.(Sgd.)Cheng Chih Kwong, PrimusChairman & CEO(Sgd.)SSP Corporate Services (Private) LtdSecretariesINTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 4INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 9

STATEMENT OF CHANGES IN EQUITYINCOME STATEMENT FOR THIRD QUARTERFor nine months ended 30 th September 2008Group Stated Accumulated TotalCapital Losses EquityRs`000 Rs`000 Rs`000Balance as at 01.01.2007 623,604 (405,104) 218,500Net Profit for Nine Months Nil 75,619 75,619Balance as at 30.09.2007 623,604 (329,485) 294,119Balance as at 01.01.2008 623,604 (343,637) 279,967Net Loss for Nine Months Nil (111,243) (111,243)Balance as at 30.09.2008 623,604 (454,880) 168,724for the three months results ended 30 th September 2008Group Group Company2008 2007 Change 2008 2007Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘0003,130,995 2,456,222Revenue 235,427 245,594 -4% 207,449 208,974Cost of Sales (285,151) (205,350) 39% (249,616) (163,200)Gross (Loss)/ Profit (49,724) 40,244 NM (42,167) 45,774Other Operating Profit / (Loss) 6,670 (1,258) NM 6,729 (1,445)Other Operating Income /(Expenses)2,107 (451) NM 1,706 (451)Selling & Distribution Expenses (574) (505) 14% (571) (506)Administrative Expenses (4,757) (2,696) 76% (4,402) (2,735)(Loss)/Profit from Operations (46,278) 35,334 NM (38,705) 40,637Finance Income 350 223 57% (176) -(Loss) / Profit Before Tax (45,928) 35,557 NM (38,881) 40,637Tax Expense 5,804 (11,113) NM 5,982 (10,314)Company Stated Accumulated TotalCapital Losses EquityRs`000 Rs`000 Rs`000Net (Loss) / Profit After Tax (40,124) 24,444 NM (32,899) 30,323Accumulated (Losses) B/F (414,756) (353,929) (276,244) (180,348)Accumulated (Losses) C/F (454,880) (329,485) (309,143) (150,025)Balance as at 01.01.2007 623,604 (256,958) 366,646Net Profit for Nine Months Nil 106,933 106,933Balance as at 30.09.2007 623,604 (150,025) 473,579(Loss)/Earnings per ShareBasic (Rs.)(1.70) 1.04 (1.40) 1.29Balance as at 01.01.2008 623,604 (202,271) 421,333Net Loss for Nine Months Nil (106,872) (106,872)Balance as at 30.09.2008 623,604 (309,143) 314,461INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 8INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 5

CONSOLIDATED BALANCE SHEETCASH FLOW STATEMENTas at 30 th September 2008GroupCompany30.09.2008 31.12.2007 30.09.2008 31.12.2007Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000Assets EmployedNon – Current AssetsProperty, Plant & Equipment 1,174,455 1,167,178 814,532 791,602Intangible Assets 5,859 7,211 5,859 7,211Investment in Subsidiary Companies - - - -Livestock 190,742 153,540 156,016 99,726Non current receivables - - 149,323 380,7951,371,056 1,327,929 1,125,730 1,279,334Current AssetsInventories 105,360 90,231 62,888 53,496Trade Receivables and Prepayments 43,529 12,382 31,263 12,239Current Tax Receivables 31,950 40,710 27,924 19,148Cash & Cash Equivalents 7,807 9,263 3,223 5,150188,646 152,586 125,298 90,033Total Assets 1,559,702 1,480,515 1,251,028 1,369,367EQUITIES AND LIABILITIESCapital and ReservesStated Capital 623,604 623,604 623,604 623,604Accumulated Losses (454,880) (343,637) (309,143) (202,271)Total Equity 168,724 279,967 314,461 421,333Non-Current LiabilitiesPayable to Parent Company 1,333,030 894,627 891,722 868,047Deferred Tax Liabilities 8,724 28,590 8,724 28,590Defined Benefit Obligations 7,630 7,383 4,591 4,3471,349,384 930,600 905,037 900,984Current LiabilitiesTrade & Other Payables 41,594 260,248 31,530 37,350Borrowings - 9,700 - 9,70041,594 269,948 31,530 47,050TOTAL LIABILITIES 1,390,978 1,200,548 936,567 948,034Total Equity and Liabilities 1,559,702 1,480,515 1,251,028 1,369,367Net Asset per Share 7.17 11.89 13.36 17.89Note: (1). Comparative figures have been restated to be in line with published Audited Accounts as at 31.12.2007.(2). The interim financial statements for nine months ended 30 th September 2008 are unaudited.(3). The interim financial statements were approved by the Board on 27 th Nov 2008.(4). NM change in percentage term is not meaningful.for the nine months ended 30 th September 2008GROUPCOMPANY2008 2007 2008 2007Cash generated from operations Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000(Loss) / Profit before tax (130,798) 86,741 (126,630) 117,254Adjustment for:Depreciation 41,953 36,959 26,300 21,216Impairment of intangible assets 1,352 1,353 1,352 1,353Amortization of livestock investment 196,451 126,859 122,552 77,126Loss on disposal of property, plant & equipment - 5,403 - 5,403Finance cost (350) (223) 176 -Change in working capitalTrade and other receivables (22,387) 21,017 (27,800) 26,321Inventories (15,129) 6,119 (9,392) 5,086Trade and other payables (218,654) (2,060) (5,820) 17,348Defined benefit obligation 1,246 1,515 669 780Cash generated from operations (146,316) 283,683 (18,593) 271,887Operating activitiesCash generated from operations (146,316) 283,683 (18,593) 271,887Interest received 526 223 - -Interest paid (176) - (176) -Terminal benefits paid (999) (813) (425) (576)Tax paid (311) (2,700) (108) (1,899)Net cash from operating activities (147,276) 280,393 (19,302) 269,412Investing activitiesPurchase of property, plant & equipment (49,230) (20,883) (49,230) (19,855)Proceeds from disposal of property, plant andequipment- 5,000 - 5,000Purchase of livestock investment (233,653) (186,216) (178,842) (116,683)Net cash used in investing activities (282,883) (202,099) (228,072) (131,538)Financing activitiesProceeds from related companies - - 231,472 -Payments on short term borrowings (9,700) (75,603) (9,700) (135,326)Proceeds from Parent Company 438,403 - 23,675 -Net cash (used in ) / generated fromfinancing activities428,703 (75,603) 245,447 (135,326)(Sgd.) Cheng Chih Kwong, PrimusChairman & CEO(Sgd.) Sanjeewa PereraAGM Finance(Sgd.) Tan Beng ChuanExecutive Director & GGM(Decrease)/increase in cash and cashequivalentsMovement in cash & cash equivalents(1,456) 2,691 (1,927) 2,548At start of year 9,263 5,917 5,150 2,306(Decrease)/increase for nine months periodended(1,456) 2,691 (1,927) 2,548Balance at the end of the period 7,807 8,608 3,223 4,854INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 6 INTERIM FINANCIAL STATEMENTS for the nine months ended 30 th September 2008Three Acre Farms PLC 7