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01 Profile, Vision, Culture and Values
02 Our Portfolio of Businesses
03 Our Markets & Our Locations
04-05 Financial Highlights
06-07 Profile of Directors
08 Chairman’s Review
09-10 Corporate Governance
11 Audit Committee Report
12 Remuneration Committee Report
13 Risk Management
14 Sustainability Report
15-17 Report of the Directors
18 Statement of Directors’ Responsibility
19 Financial Reports
20 Independent Auditors’ Report
21 Statements of Comprehensive Income
22 Statements of Financial Position
23-24 Statement of Changes of Equity
25 Statement of Cash Flows
26-64 Notes to the Financial Statements
65 Directors of Group
66 Group Structure
67 Real Estate Portfolio
68 Five Year Summary
69-70 Shareholder Information
71 Notice of Meeting
72 Notes
73-74 Form of Proxy
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01Renuka Agri Foods PLC | Annual Report 2013
02 Renuka Agri Foods PLC | Annual Report 2013
03Renuka Agri Foods PLC | Annual Report 2013
04 Renuka Agri Foods PLC | Annual Report 2013
Financial highlights
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05Renuka Agri Foods PLC | Annual Report 2013
Financial highlights (Contd)
To Government Revenue 0.33%
To Maintain Operations 8.30%
Retained with the Business 55.95%
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(2013)(2012)(2011)(2010)(2009)
Finance Cost& Interest Cover
Finace Cost (Rs.M)Interest Cover
To Employees 25.83%
To Providers of Capital 9.59%
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e Added Distribution
06 Renuka Agri Foods PLC | Annual Report 2013
Profile of Directors
Dr. S. R. Rajiyah
Dr. S.R. Rajiyah is the Executive Chairman of the Company. He is also
the Chairman of Renuka Shaw Wallace PLC, Shaw Wallace Ceylon Ltd
and the Managing Director of the Renuka Group. He is a medical doctor
qualified in Sri Lanka and counts over 36 years of corporate experience
in operations, quality management, research and development as well
as in founding and running businesses.
Mrs. I.R. Rajiyah
Mrs. I.R. Rajiyah is the Executive Deputy Chairperson of the Company.
She is qualified in Business Studies from the United Kingdom and is a
fellow of the British Institute of Management. She counts over 40 years
of corporate experience in founding and running businesses. She was
presented with the Best Women Exporter Award in 2009 by the National
Chamber of Exporters Sri Lanka. She is also the Chairperson of Renuka
Holdings PLC and Director of Renuka Shaw Wallace PLC, Shaw Wallace
Ceylon Ltd, Richlife Dairies Ltd and several un-listed companies.
Mr. S. Vasantha Kumara
Mr S.Vasanthakumara is the Chief Operating Officer of the Company. He
holds a Bachelor of Engineering Degree from the Mangalore University.
He counts over 26 years of industrial work experience, out of which, 16
years have been with the Renuka Group. He has extensive experience in
supply chain management and overall general management functions.
He is a Director of Renuka Shaw Wallace PLC, Shaw Wallace Ceylon Ltd
and Richlife Dairies Ltd.
Mr. S.V. Rajiyah
Mr. S.V.Rajiyah is an Executive Director of the Company. He is also an
Executive Director of Renuka Holdings PLC & Renuka Shaw Wallace PLC.
He is the Managing Director of Shaw Wallace Ceylon Ltd, Richlife Dairies
Ltd and Joint Managing Director of McShaw Automotive Ltd. He heads
the Business Development, International Marketing and Investment
Division of the Group. Mr Rajiyah is a graduate in Management from
the Warwick Business School, University of Warwick, United Kingdom.
His direct interest includes corporate strategy, key product and brand
development and portfolio management. He has over 12 year’s
experience in General Management
Ms. A.L. Rajiyah
She holds a BSC (Hons) Accounting and Finance from the University
of Warwick and a MSc Law and Accounting from the London School of
Economics.
She spent 3 years at the investment bank, Morgan Stanley in London
where she was involved in the structuring of credit derivative products
linked to European corporates. She subsequently joined Alcentra Limited
(a subsidiary of Bank of New York Mellon Corporation) which is a USD 18
Bn asset management firm in London, where she was a Vice President
involved in portfolio management, trading and investing in credit
derivative products for Alcentra's structured products platform. She is an
Executive Director of the company Renuka Shaw Wallace PLC and Renuka
Holdings PLC.
Mr. M. Terfloth
Mr M.Terfloth is a Non-Executive Director and holds a MBA from IMD,
Switzerland and a BSc in marketing. After trading financial instruments
in London and New York with Credit Suisse-First Boston, he joined
Terfloth & Kennedy (U.K.) ltd. Since 1991 he has been President and CEO
of B. Terfloth & Cie (Canada) Inc, then also taking over the chairmanship.
His direct interests include international strategic sourcing, key product
and brand development.
Mr. C. J. De S. Amaratunge
Mr. C.J.De.S.Amaratunge is an Independent Non Executive Director of the
Company. He is an Attorney at law and Notary Public and was called to
Bar in 1967. He is the Senior Partner of M/s Dissanayake Amaratunge
Associates, Attorney at Law, Notaries Public and Solicitors. He counts
over 41 year’s experience in all civil branches of the law including
Commercial Corporate Convenyancing and Litigation and Convenyancing.
He serves as a Director on several boards of both private and public
companies.
Mr. L.M. Abeywickrama
Mr. L.M.Abeywickrama is a Non Executive Director of the company. He is
a Management consultant and trainer with over 26 year’s management
experience in the private sector both Sri Lanka and Overseas. He
holds a Bachelors Degree in Science from the University of Colombo,
a Post Graduate Diploma in Marketing from the Chartered Institute of
Marketing and MBA from the American University Washington DC. He
is a fellow of the Chartered Institute of Marketing and a past chairman
of the SIM Sri Lanka region. He serves as a Director on the Boards of
Shaw Wallace Ceylon Ltd, Richlife Dairies Ltd, Renuka Shaw Wallace PLC
& Renuka Holdings PLC.
Mr. P.C.K. Abeykoon
Mr P.C.K Abeykoon is an Independent Non Executive Director experienced
and qualified financial specialist. An associate of the Institute of
Chartered Accountants of Sri Lanka. A fellow member of Society of
Cost Management Accountants of Sri Lanka, having over 17 years
of professional experience in business. He holds a Bachelors’ Degree
in Business Management from the University of Sri Jayewardenepura
and a Master Degree in Business Administration from the Postgraduate
Institute of Management, University of Sri Jayewardenepura.
07Renuka Agri Foods PLC | Annual Report 2013
Mr W.Rajapakshe
Mr.W.Rajapakshe is an attorney at law and a President's counsel. He is
an Independent Non-Executive Director.
Mr J.E. Brennan (Resigned on 31/3/2013)
Mr J.F.Brennan is an Non Executive Director
He has over 40 year’s experience in the food industry in the United
Kingdom specializing in the development, sourcing and marketing of
ethnic and specialty food products.
Mr M.K.A.Ranglin (Appointed on 1/4/2013)
Mr M.K.A. Ranglin joined GraceKennedy in 1980 at Grace Foods
Processors Meat Division in Westmoreland, starting in the position of
Quality Control Technician and moving to General Manager in 1984. Over
the next 20 years he held several senior management positions within
the Foods Division and was promoted to the position of Senior General
Manager – Domestic Business in January 2005. He was appointed Chief
Executive Officer of Grace Foods UK Limited in February 2008 and on 1st
March 2011 he was promoted to CEO for GK Goods Division. He was also
appointed to the Board of Directors of GraceKennedy Ltd. Mr Ranglin
holds a B.Sc. (Hons) in Chemical Engineering from the University of the
West Indies and a MBA in Technology Management.
Profile of Directors (Contd)
08 Renuka Agri Foods PLC | Annual Report 2013
Chairman's Review
It is with great pleasure that I welcome all of you, our valued
shareholders, to the 13th Annual General Meeting of Renuka Agri
Foods PLC and present to you the Annual Report and Audited Financial
Statement for the year ended 31st March 2013.
Local and Global Economic Environment
Looking back on the global economy during the financial year under
review, economic growth remained sluggish with uncertainty across the
region largely due to the Chinese leadership transition and reforms in the
Euro Zone. Global growth relied predominantly on emerging economies
which also experienced slower growth as exports were hit by sluggish
performance of the advanced economies. On the local front, interest
rates continued to be high, while the exchange rate was highly volatile
throughout the year making it difficult to effectively take positions in the
currencies we export in.
Industry Performance
The coconut industry saw production increase by 4.7% to 2,940 million
nuts in 2012 largely due to the effect of favourable weather conditions
that prevailed in the major coconut growing areas in 2011. The special
commodity levy introduced for edible oil imports from May 2012 was
increased further from November 2012 which resulted in a 46.2%
increase in coconut oil production and thus increasing prices of our main
raw material. The Coconut Cultivation Board has targeted to increase
national coconut production in Sri Lanka to 3,650 million nuts by the year
2016 and to this effect,the government has distributed over 4 million
seedlings through the Divi Naguma home garden programme, Kaprukai
Sipannai programme and subsidies given to lands less than 5 acres for
new/re-planting/under planting.
As part of its food security drive the government is promoting the
local dairy industry with the objective of meeting the national diary
requirement through domestic liquid production, by the year 2020. Thus
in the dairy industry a slew of measures have been adopted to support
the local industry: among them include price controls and tariffs on
imported milk products, relaxation of duty and other levies on modern
dairy equipment, higher indicated purchasing prices and support for local
dairy farmers to set up dairy farms and milk collecting centers. Apart
from the support rendered to the infrastructure of the local dairy industry
the government has also actively through the media highlighted the
importance in consuming fresh milk. This support has undoubtedly
benefitted the local diary industry as an attitudinal change is needed to
realize the nation’s vision of self-sufficiency in milk.
Company Performance
Year 2012 has been a remarkable year for us, characterised by a stringent
focus on our strategy- by Board, management and staff members at all
levels.
It is with satisfaction that I note that the Group's total revenue has hit a
record high of Rs.2.5 Bn despite a challenging year. The year 2012/13
results show that your company has progressed ever further in top line,
laying the foundation for future growth in bottom line in the years to
come. We have recorded a total comprehensive income Rs.231 Mn.
for the company and Rs. 190 Mn. for the Group during the current
financial year. The Statement of Financial Position has become further
strengthened in the year under review with total assets increasing to
Rs.3.3 Bn.
In the Agri Food Exports sector we successfully commenced exports from
the newly commissioned coconut water tetra pak production line after
the initial setting up and trial productions. We also laid the foundation
for entering a select number of new markets with our brand in the
coming year.
The dairy sector saw a year of investment including the acquisition
of a further 24% in Richlife Dairies Ltd making the company a 100%
group owned entity. During the year we also increased availability of
the Richlife range of dairy products through an increase of coverage
mainly in the general trade. This along with investment in advertising
and promotions resulted in an increase in sales by over 100%.
As an integrated Agri business company, we continued to innovate and
reinvent our food and beverage brands in line with consumer needs;
offering not only the best taste and pleasure but also best nutritional
profile in their respective categories for a healthy diet. At group level we
invested in our brands- Renuka and Richlife where the results of these
investments will be seen in increased turnover and brand recognition in
the years to come. Thus selling and distribution expenses increased by
96% compared to the previous financial year. During the financial year,
we have made investments to expand our product portfolio, increase our
distribution coverage and brand visibility
Rural Economy
Keeping with our strategy of creating shared value is not only our
approach to corporate social responsibility but also the way we do
business; we extended our relationship with farmers across the island.
We procure milk and coconut from over 7000 farmers contributing
approximately Rs 1 billion to the rural economy. Our collection of
coconut and milk have a network comprising out-growers, farmers and
our own farmer societies mainly in the Western, North Western, Central,
North Central and Southern regions who directly supply to the company
through our company owned collection, chilling centers and extension
network.
Acknowledgments
I wish to express my sincere gratitude to my fellow Directors on the
Board for their support, and to my other colleagues in the Group who
have worked tirelessly to add to shareholder value, and to all employees
for their dedication and commitment. I also extend my gratitude to the
shareholders and all other stakeholders as well as to our loyal consumer
base around the world for the support and confidence placed in us.
Sgd.
Dr. S.R. Rajiyah
Chairman
05th August, 2013
09Renuka Agri Foods PLC | Annual Report 2013
Corporate Governance
Renuka Agri Foods PLC is the holding company of subsidiaries namely
Renuka Teas (Ceylon) (Private) Ltd, Renuka Organics (Pvt) Ltd and
Richlife Dairies Ltd.
The Board of Directors
The Company’s business and operations are managed under the
supervision of the Board, which consists of members with experience
and knowledge in the areas of business, in which the company is
engaged with specific acumen in terms of commercial, financial and or
technical expertise.
Board’s Responsibilities
Strategic Direction: The Board provides good stewardship, vision
and strategic direction to the institution whilst transparency and
accountability is maintained. The Board also reviews and monitors the
Company’s activities.
Business Performance: Reviews Business Results on a regular basis
and guides the management on an appropriate direction in achieving
forecast results.
Code of Business Conduct and Ethics: The code of conduct and ethics
are clearly defined from the Board of Directors downwards to every
employee.
Financial Performance of the Company: The Board sits once in
three months to review the financial performance of the company.
The Quarterly Accounts are reviewed by the Audit Committee before
recommending to the Board of Directors to consider for adoption and
release to the public. Final dividends are recommended by the Board
of Directors.
Investor Rights and Relations: The Company communicates regularly
with its shareholders updating them on the company’s position and
performance through the quarterly reports.
The annual report provides a comprehensive assessment of the
company’s performance during the year.
Audit: An independent statutory audit is carried out annually and the
appointment of auditors M/s KPMG, Chartered Accountants for the
ensuing year is recommended to the shareholders at the Annual General
Meeting.
Composition and Attendance at Meetings
The Board of Directors, Audit committee and Remuneration committee
meet quarterly to discharge its duties effectively. The table below shows
the attendance of Directors to the Board meetings and committee
meetings.
Name of Director Board MeetingAudit Committee
Meeting
Dr. S.R. Rajiyah 3/4 -
Mrs. I.R. Rajiyah 3/4 -
Mr. S.V. Rajiyah 4/4 -
Mr. S. Vasanthakumara 3/4 -
Mr. C.J. De S. Amaratunge 4/4 4/4
Mr. P.C.K. Abeykoon - 1/4
Mr. L.M. Abeywickrama 4/4 4/4
Mr. W. Rajapakshe 1/4 -
Mr. J. Brennan
(Resigned 31/3/2013)- -
Mr. M. Terfloth 1/4 -
Ms. A.L. Rajiyah 1/4 -
Mr. M.K.A. Ranglin
(Appointed 01/04/2013)- -
Board of Directors and Independence
Our Board currently has 11 members of which 5 members are Executive
Directors and six members are Non Executive Directors.
There is a Board balance and complies with the Independent Directors
criteria set out under Listing Rules of the Colombo Stock Exchange.
Together, the Directors with their wide experience in both the public and
private sectors and diverse academic backgrounds provide a collective
range of skills, expertise and experience which is vital for the successful
direction of the Group. A brief profile of each Director is presented on
page 06 to 07.
The Board periodically review directors composition with the Companies
that are similarly situated to ensure that board and committee
composition is reasonable and competitive.
Information
The Directors are provided with quarterly reports on performance,
minutes of quarterly meetings and such other reports and documents as
are necessary. The Chairman ensures all Directors are adequately briefed
on issues arising at Meetings.
Re-Election Of Directors
The provisions of the company’s Articles of Association require that
one third of the non executive directors retire at each annual general
meeting and the director who retires are those who have served for the
longest period after their appointment/ reappointment.
10 Renuka Agri Foods PLC | Annual Report 2013
Going Concern
The Directors, after making necessary inquiries and reviews including
reviews of capital expenditure requirements, future prospects and
risks, have a reasonable expectation of the Company’s existence in the
foreseeable future. Therefore, the going concern basis is adopted in the
preparation on the Financial Statements.
Internal Control
The Board is responsible for the company’s internal controls and for
reviewing their effectiveness. Internal control is established with
emphasis placed on safeguarding assets, making available accurate and
timely information and imposing greater discipline on decision making.
It covers all controls, including financial, operational and compliance
control and risk management. It is important to state, however that any
system can ensure only reasonable and not absolute, assurance that
errors and irregularities are prevented or detected within a reasonable
time.
Communication with Stakeholders
Shareholders are provided with Quarterly Financial Statements and the
Annual Report, which the Group considers as its principal communication
with them and other stakeholders. These reports are provided to the
Colombo Stock Exchange.
Board Committees
To assist the Board in discharging its duties, various Board Committees
are established. The functions and terms of references of the Board
Committees are clearly defined and where applicable, comply with
the recommendations of the Code of the Best Practice and Corporate
Governance. The audit committee ensures the integrity of financial
information, the effectiveness of the financial controls and the internal
controls and risk management system.
Corporate Governance Disclosure
The Company has published quarterly Financial Statements with the
necessary explanatory notes as required by the rules of the Colombo
Stock Exchange and the Securities and Exchange Commission of Sri Lanka
to all stakeholders. Any other financial and non financial information,
which is price sensitive or warrants the shareholders and stakeholders,
attention and consideration, is promptly disclosed in public.
Major Transactions
There are no transactions during the year review which fall within the
definition of “Major Transactions” in terms of the Companies Act.
Auditors' Report
The Auditors' Report on the Financial Statement is given on page 20 of
this Annual Report
Corporate Governance (Contd)
11Renuka Agri Foods PLC | Annual Report 2013
Audit Committee Report
The Audit Committee appointed by and responsible to the Board of
Directors comprise of three Non Executive Directors. The Managing
Director, Financial Controller and Company Secretary attends the
meetings by invitation.
Meetings
The Audit Committee met four times during the year. The members of
the audit committee are:
Mr. P.C.K. Abeykoon
Mr. C.J. De S. Amaratunge
Mr. L.M. Abeywickrama
Financial Reporting System
The Committee reviewed the financial reporting system adopted
by the Group in the preparation of its quarterly and annual Financial
Statements in order to assess reliability of the process and consistency
of accounting policies and their compliance with the Sri Lanka Financial
Reporting Standards/Sri Lanka Accounting Standards (SLFRSs and LKASs)
promulgated by The Institute of Chartered Accountants of Sri Lanka
(ICASL). The Audit Committee obtained Statements of Compliance from
the Business Unit Heads where appropriate.
The Committee reviewed the adequacy of disclosure and the presentation
formats of the published Financial Statements and adequacy of the
content and quality of routine management information forwarded to
its members.
The quarterly and annual Financial Statements are recommended to
the Board of Directors for their deliberation and issuance by the Audit
Committee.
External Audit
The Committee carried out an annual evaluation of the External Auditors
to establish their independence. The Audit Committee has recommended
to the Board of Directors that Messrs. KPMG, Chartered Accountants to be
re-appointed as Auditors for the financial year ending 31st March 2014.
Compliance with Law and Regulations
The Committee reviewed the quarterly compliance reports submitted by
the relevant officers to ensure that the Group complied with all statutory
requirements.
Conclusion
The Audit Committee is satisfied that the Group’s accounting policies,
operational controls and risk management processes provide reasonable
assurance that the affairs of the Group are managed in accordance with
Group policies. Group assets are properly accounted for an adequately
safeguarded.
Sgd.
P.C.K. Abeykoon
Chairman
Audit Committee
05th August, 2013
12 Renuka Agri Foods PLC | Annual Report 2013
The Remuneration Committee of Renuka Agri Foods PLC being that
of its ultimate parent company comprises of the three Non-Executive
Directors. It is responsible for determining the remuneration packages of
the key Management Personnel of the Group.
Members are:
Mr. C.J.De.S.Amaratunga
Chairman
Mr M.S.Dominic
Member
Mr L.M.Abeywickrama
Member
The Committee formally met once during the year with Managing
Director attending it by invitation.
The Committee strongly believes that it must formulate policies so as
to ensure that the objectives of the Remuneration Committee Charter
are met. It is also committed to attract, retain and motivate the key
Management Personnel.
The Remuneration Committee also took into consideration the
market rates prevailing at the time of performance evaluation of key
Management Personnel. Individual remuneration packages are designed
to be fair to the company and to its employees.
Sgd.
C.J. De S. Amaratunga
Chairman
Remuneration Committee
05th August, 2013
Remuneration Committee Report
13Renuka Agri Foods PLC | Annual Report 2013
Enterprise Risk Management and issues pertaining to employees and
industrial relations.
The Board has overall responsibility for risk management and internal
control within the context of achieving the Group’s objectives
An effective risk management framework enables us to prioritize and
allocate resources against those risks that underscore the ongoing
sustainability of the organization. Our systematic policies help us to
identify and uncover risks and help us to be cognizant of the same. This
preparedness builds the resilience of the organization and allows us to
put in place procedures for risk mitigation.
The principal risk in achieving the Group objective of enhancing
shareholder value and safeguarding the Group’s assets have been
identified as set out below. The nature and the scope of risks are subject
to change and not all of the factors listed are within the control of your
Company. It should be noted that the other factors besides those listed
may affect the performance of the business.
A dedicated team is demarcated to assist the Board in reviewing risk
factors at regular intervals and monthly risk evaluation meetings ensure
that the focus from effective risk coverage never shifts. The Board is
kept updated on the progress and its opinion sought for mitigating any
challenges that might emerge.
Risk Management
Our Group’s risk management framework takes into account the range
of risks to be managed, the systems and processes in place to deal with
these risks, and the chain of responsibility within the organization to
monitor the effectiveness of our mitigation measures. The risks that we
take into account in the pursuit of our business goals are detailed below.
Credit Risk
Credit risk is where the customer of the Group is unable to meet
his financial obligations. This is a strong possibility in the conduct of
business for any organization and in order to mitigate this, we measure
monitor and manage credit risk for each borrower, having put into place
clear credit approval procedures. We regularly review credit ratings
of customers, constantly updating our records to ensure complete
awareness of the credit status of borrowers, in order to mitigate any ill
effects from this type of risk. We also ensure all are foreign customers
are credit worthy and dealt through letters of credit etc.
Legal and Regulatory Risk
We monitor and review the introduction of new regulation or the
amendments to existing regulation by the government locally and or
internationally which may be adverse to business and complexity in
complying with all regulatory requirements.
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed
internal processes, people and systems or from external events.
The Group has put in place a structured internal control frame work in
place to mitigate this risk, comprising of a sophisticated MIS system and
insurance policies. Moreover, a clear system is followed whereby any
loss is communicated to all related parties and across the company to
prevent a similar incident in the future. Regular meetings are conducted
to assess these risks. Back up as well as disaster recovery plans are
implemented.
Attraction and Retention of Talent
This is risk arising from the inability to attract and retain skilled staff
at middle to senior management. The migration of skilled workers has
created a brain drain situation and the Group remains at risk of losing
key personnel to better job prospects overseas. To mitigate this risk,
the Group retains its skills and main personnel via above industry
remuneration schemes, skills upgrading room for professional growth
performance based reward systems and other best practices in training
motivation and recognition.
Market Risk
In overall to eliminate loss of market share or market leadership, we
monitor market and customer needs and develop innovations that add
value to our customers. We also enhance productivity and efficiency to
improve price competitiveness and investing in high quality machinery
and equipment.
Product Risk
Product risk implies any negative effect of perceived impact of our
products on stakeholders in general which could bring down our market
share. We employ established operating procedures to review and
approve all raw materials prior to use to ensure that quality control
is maintained. We take into account safety, health and environmental
hazards to cover all avenues of possible negative publicity. Our research
and development team is equipped to field any technical questions
about our product, whilst our marketing and distribution procedures
ensure complete control of the supply chain.
Financial Risk
Financial risk management obligations and policies have been described
in the note No. 37 of the notes to the Financial Statement.
Issues Pertaining to Employees and Industrial Relationship
The Board of Directors reviews all the issues with regard to employees
and Industrial Relation which affect the performance of the Group.
Renuka Agri Foods PLC takes considerable amount of steps to ensure
employees are satisfied at all the levels and their issues are addressed in
order to retain talented employees. A well structured grievance handling
system is in place to handle the grievance of employees at all levels.
We also ensure proper industrial relationships with all the governmental
agencies. There are no issues which affect the company’s performance
to be disclosed.
Risk Management
14 Renuka Agri Foods PLC | Annual Report 2013
Sustainability is the key element of our strategy for future growth where
the resource efficient, environmentally responsible manufacturing of
products and provision of services that deliver sustainability benefits can
leverage commercial advantage for the group.
The key business drivers for sustainability are internal operations and
stakeholder engagement. The first focuses on our internal operations
and manufacturing our products and provision of our services more
efficiently using fewer resources. This approach helps us to reduce our
costs and as the same time reduces our impact on the environment.
The second approach focuses on our partnerships with our stakeholders.
Stakeholders are any individual or party that has an interest in our group,
and who are affected by, or can affect our organizational activities.
Partnerships help to build trust among our key stakeholders and to reach
a better understanding on a variety of issues. It can also pave the way
for more successful solutions to problems, concerns and challenges.
Internal Operations
Economic Performance-Implemented IT/ERP systems for the group
which monitors all aspects in providing up to date information and real
time data.
Environmental Impact -Renuka has strived to ensure that all our
manufacturing and production processes will not knowingly harm
people and will minimize the negative impact our business will have on
human life. We maintain in good order the property we are privileged to
use, protecting the environment and our natural resources.
Renuka Work place- At Renuka we have created a work place policy and
created employee awareness for the total group. With an expanding
employee base , creation of a group identity and belongingness is
priority. We also have an open communication policy and implemented
a process to identify corruption within the business units. Effective two
way communication with employees is important and in particular face
to face dialogue. Communication on matters is through in-house email
presentation and team briefings. Employees are also encouraged to
access the corporate websites.
Stakeholder Engagement
Our business partners- We have built lasting business relationships all
over the world and not only centered in Sri Lanka. It is through our
business partners that we co-exist to full fill customer needs and wants.
We also look at our business partners as a resource base to develop
business efficiencies and innovative products.
Our Customers- In meeting their needs, everything we must do must
be of world class quality. We engage our customers through weekly,
monthly and annual meetings, customer visits, International trade fair
participation and corporate websites.
Our Employees- The foundation that our business is built on. Our constant
employee engagement helps us to retain and motivate our employees
and to maintain an organizational culture formed by respect, honesty
and integrity. We pay considerable attention to employee remuneration,
career and progress, health and safety and organizational ethics.
Local Community- Renuka has been actively involved in supporting
the rural farmer network for our coconut division as well as the dairy
division. Renuka procures over Rs 1 Bn worth of produce from our
farmer net work. It also conducts farmer training programmes, medical
camps, veterinary services which assist in improving the livelihood and
wellness of the communities within Sri Lanka.
Renuka considers engagement to be an increasingly important
component of its corporate citizenship strategy. Our engagement efforts
help Renuka identify those issues that are most material to our business
operations and shape our approach to addressing a range of areas
relating to the financial, social and environmental performance of the
organization.
Our Investors/Shareholders- Shareholder engagement is important to
us to have access to growth capital and in the process we must make
a sound profit. In meeting global challenges and evolving consumer
needs we must be geared to be proactive with new ideas and ready
with the output as well. When we operate according to these principles
the shareholders should realize a fair return.
Sustainability Report
15Renuka Agri Foods PLC | Annual Report 2013
The Board of Directors of Renuka Agri Foods PLC is pleased to present
its Report and the Audited Financial Statements of the Company and its
subsidiaries (‘the Group’) for the financial year ended 31st March 2013.
The details set out herein provide the pertinent information required by
the Companies Act No.07 of 2007, the Colombo Stock Exchange Rules
and are guided by recommended best Accounting Practices.
The Principal Activities of the Group and Structure
There were no significant changes in the nature of the principal activities
of the company and its subsidiaries during the financial year under review
where the principal activity of the company to manufacture and export
of Coconut Milk, Coconut Milk Powder, UHT treated Coconut Milk, Coconut
Water and by products derived out of primary processing of Coconut. The
activity of the Group is namely Agri business and companies within each
sub sector and their principal activities are described on page 66 of the
Annual Report.
Review of Business
The review of the performance during the year, with comments on
financial results and future developments is contained in the Chairman’s
statement. These reports form an integral part of the report of the
Directors.
Financial Results
The company recorded a net profit of Rs.231 Mn and Rs.190 Mn at group
level for the year. An abridgment of the performance is presented in the
table below.
Group CompanyFor the year ended 31st March
2013 2012 2013 2012(Rs.'000) (Rs.'000) (Rs.'000) (Rs.'000)
Profit after Taxation 189,690 337,893 230,521 315,180
Profit available for
appropriation 714,865 609,279 748,353 599,687
Auditors' Report
The Auditors' Report on the Financial Statement is given on page 20 of
this Annual Report
Significant Accounting Polices
The accounting policies adopted in the preparation of the Financial
Statements are given on pages 26 to 33 There have been no changes
in the accounting policies adopted by the Group during the year under
review.
Financial Statements
Financial Statements of the Group comprises the Statement of Financial
Position, Statement of Comprehensive Income, changes in equity
and cash flow together with the accounting policies and notes to the
Financial Statements for the year ended 31st March 2013 are set out in
pages 21 to 66.
Statement of Directors’ Responsibilities
The Statement of Director’s Responsibilities for the Financial Statements
is given on page 18.
Board of Directors
The following Directors held office as at the Statement of Financial
Position date. Brief portfolios of the Current Directors are given in pages
06 & 07 of the Annual Report.
Directors ExecutiveNon-
ExecutiveIndependent
Dr S.R.Rajiyah √
Mrs I.R.Rajiyah √
Mr S.V.Rajiyah √
Ms A.L.Rajiyah √
Mr W.Rajapakshe √ √
Mr P.C.K.Abeykoon √ √
Mr S.Vasanthakumara √ - -
Mr C.J.De.S.Amaratunge √ √
Mr L.M.Abeywickrama √ -
Mr J.Brennan √ √
Mr M.Terfloth √ -
All Directors’ held office during the entire year.
The following Directors; served as members of the Audit Committee and
Remuneration Committee
Audit Committee
Mr. P.C.K. Abeykoon
Mr. C.J. De S. Amaratunge
Mr. L.M. Abeywickrama
Remuneration Committee
Mr. C.J. De S. Amaratunga
Mr. M.S. Dominic
Mr. L.M. Abeywickrama
Report of the Directors
16 Renuka Agri Foods PLC | Annual Report 2013
Directors’ Interest
Directors’ interests in contracts or proposed contract with the Company
both direct and indirect are disclosed on pages 49 to 52 of the Annual
Report under related party transactions the above discloses the
transaction with entities where a Director of the either has control or
exercise significant influence. These interests have been declared at
Director’s Meetings.
Directors’ interests in transactions and shares
The Directors have no direct or indirect interest in any other contracts
or proposed contracts in relation to the business of the Company, while
they had the following interest in Ordinary shares of the Company.
As at 31st March 2013 2012
Dr. S.R. Rajiyah 20 -
Dr. & Mrs. I.R.Rajiyah (Jt) 8,426,258 3,300,020
Mr. S.V. Rajiyah 1,404,375 100,111
Mr. P.C.K. Abeykoon -
Mr. W. Rajapakshe -
Mr. C.J. De S. Amaratunge -
Mr. L.M. Abeywickrama 28,000 20,000
Mr. S. Vasanthakumara 1,010 1,010
Mr. J. Brennan - -
Mr. M. Terfloth - -
Ms. A.L. Rajiyah 1,219,483 -
Remuneration of Directors
Directors’ Remuneration, in respect of the Company for the financial year
ended 31st March 2013 is given in Note 07 to the Financial Statements,
on page 34.
Recommendation for re-election
In terms of Article 28 (2) of the Articles of Association of the Company,
Ms. A.L. Rajiyah and Mr. M.K.A. Ranglin retire and being eligible; offer
themselves for re-election at the forthcoming Annual General Meeting.
In terms of Article 30 (1) of the Articles of Association of the Company,
Mr. P.C.K. Abeykoon retires by rotation and is not seeking for
re-appointment at the forthcoming Annual General Meeting.
Mr. C.J. de S. Amaratunge who is above the age of 70 years and a
notice of an Ordinary Resolution has been received from a shareholder
pursuant to Section 211 of the Companies Act No. 07 of 2007, for the
re-appointment of Mr. C.J.de S. Amaratunge at the forthcoming Annual
General Meeting, notwithstanding the age limit of 70 years stipulated
by Section 210 of the Companies Act No. 7 of 2007. The Directors
recommend the adoption of the Ordinary Resolution.
Corporate Donations
During the year donations amounting to Rs.75,000/- were made by the
Group.
Auditors
Company’s Auditors during the year under review were Messrs. KPMG,
Chartered Accountants. Their report on the Financial Statements is given
on page 20 of the Annual Report.
As far as the Directors are aware the Auditors do not have any other
relationship or interest with the Company other than that of an auditor
of the Company.
The retiring auditors have expressed their willingness to continue in
office. A resolution to re-appoint them as Auditors of the Company and
authorizing the Directors to fix their remuneration will be proposed at
the Annual General Meeting.
Corporate Governance
Compliance of corporate governance rules as per the Listing Rules of the
Colombo Stock Exchange (CSE)
Solvency Test
Solvency Test has been carried out by the Board of Directors before the
payment of the final dividend as required by the Companies Act No.7
of 2007.
Dividends
The Board of Directors has recommended a payment of Rs.0.10 per
share payable for 2012/2013 (2011/2012– Rs 0.14 per share) Board
of Directors has obtained the solvency report before deciding that the
company would meet the Solvency Test requirement under section 56
(2) of the companies Act No.7 of 2007 immediately after the proposed
final dividend distribution.
Stated Capital
The stated capital of the Company as at 31st March 2013 was Rs.1.194
Bn consisting of 561,750,000 Ordinary shares
Shareholders Funds
Total Group shareholders funds stood at Rs.1.909 Bn as at 31st March
2013 (2012 Rs.1.162 Bn) comprising of stated capital of Rs.1.194 Bn and
reserves of Rs.0.715 Bn. The movements are shown in the statement of
changes in equity.
Report of the Directors (Contd)
17Renuka Agri Foods PLC | Annual Report 2013
Property, Plant & Equipment
The carrying value of Property, Plant & Equipment for the company and
the group as at 31st March 2013 amounted to Rs.1.386 Bn and Rs.491 Mn
respectively. The total expenditure on the acquisition of property, plant
& equipment during the year in respect of new assets and replacements
by the company and the group amounted to Rs.60 Mn and Rs.358 Mn
(including through acquisition of subsidiaries) respectively.
Statutory Payments
The Directors to the best of their knowledge and belief are satisfied that
all statutory payments have been paid up to date or have been provided
for in these Financial Statements
Going Concern
The Board of Directors is satisfied that the Company has adequate
resources to continue its operations in the foreseeable future.
Accordingly the Financial Statements are prepared based on the going
concern concept.
Events Occurring After the Reporting Date
Subsequent to the reporting date, no material circumstances have
arisen, which would require adjustments to or disclosure in these
Financial Statements other than those disclosed in note 34 to these
Financial Statements.
Share information
Information relating to shareholding earnings dividend, net assets and
market price per share are given on pages 69 to 70 of the Annual Report.
Annual Report
The Board of Directors approved the Company’s Financial Statements
together with the reviews which forms part of the Annual Report, on
05th August, 2013. The appropriate number of copies of the Report would
be submitted to the Colombo Stock Exchange, Sri Lanka Accounting and
Auditing Standard Monitoring Board and the Registrar of Companies
within the given time frames.
Notice of Meeting
The notice of meeting of the 13th Annual General Meeting is given on
page 71.
Public Holding
The percentage of shares held by the public as at 31st March 2013 was
47.94%.
By order of the Board
Sgd. Sgd. Sgd.
Dr. S.R. Rajiyah C.J. De S. Amaratunge Renuka Enterprises
(Private) Limited
Chairman Director Company Secretaries
05th August, 2013
Report of the Directors (Contd)
18 Renuka Agri Foods PLC | Annual Report 2013
This Statement of Directors’ Responsibilities is to be read in conjunction
with the Report of the Auditors and is made to distinguish the respective
responsibilities of the Directors and to the Auditors in relation to the
Financial Statements contained in this Annual Report.
The Directors of your Company are required by the Companies Act No.7
of 2007 to prepare Financial Statements which give a true and fair view
of the state of affairs of the Company and of the Group as at the end of
the financial year, and of the income and expenditure of the Company
and of the Group for the financial year.
The Directors confirm that the Financial Statements of the Company for
the year ended 31st March 2013 presented in the Report have been
prepared in accordance with the Sri Lanka Accounting Standards and the
Companies Act of No.7 of 2007. In preparing the Financial Statement,
the Directors have selected appropriate accounting policies and have
applied them consistently. Reasonable and prudent judgment and
estimates have been made and applicable accounting standards have
been followed and the Financial Statements have been prepared on a
going concern basis.
The Directors are of the view that adequate funds and other resources
are available within the company for the company to continue in
operation for the foreseeable future.
The Directors have taken all reasonable steps expected of them to
safeguard the assets of the Company and of the Group and to establish
appropriate systems of internal controls in order to prevent, deter and
detect any fraud, misappropriation or other irregularities.
The Directors have also taken all reasonable steps to ensure that the
Company and its subsidiaries maintain adequate and accurate accounting
books of record which reflect the transparency of transactions and
provide an accurate disclosure of the Company’s financial position.
The Directors are required to provide the Auditors with every opportunity
to take whatever steps and undertake whatever inspection they
consider appropriate for the purpose of enabling them to give their Audit
Report. The Directors are of the view that they have discharged their
responsibilities in this regard.
Compliance Report
The Directors confirm that, to the best of their knowledge all taxes and
levies payable by the Company and all contributions, levies and taxes
payable on behalf of the employees of the Company, and all other
known statutory obligations as at the reporting date have been paid or
provided for in the Financial Statements.
As required by section 56 (2) of the Companies Act No.7 of 2007,
the Board of Directors have confirmed that the Company satisfies the
Solvency test immediately after the distribution, in accordance with
section 57 of the Companies Act No.7 of 2007.
By order of the Board
Sgd.
Renuka Enterprises (Private) Limited
Company Secretaries
05th August, 2013
Statement of Directors Responsibility
19Renuka Agri Foods PLC | Annual Report 2013
Financial
Reports
Contents
20 Independent Auditors' Report
21 Statements of Comprehensive Income
22 Statements of Financial Position
23-24 Statement of Changes of Equity
25 Statement of Cash Flows
26-64 Notes to the Financial Statements
20 Renuka Agri Foods PLC | Annual Report 2013
Independent Auditors' Report
KPMG, a Sri Lanka Partnership and a member firmof the KPMG network of independent member firmsaffilliated with KPMG International cooperative(“KPMG International”), a Swiss entity.
M.R. Mihular FCAT.J.S. Rajakarier FCAMs. S.M.B. Jayasekara ACAG.A.U. Karunaratne ACA
Principals - S.R.I. Perera ACMA, LLB, Attorney-at-law, H.S. Goonewardene ACA
P.Y.S. Perera FCAW.W.J.C. Perera FCAW.K.D.C Abeyrathne ACAR.M.D.B. Rajapakse ACA
C.P. Jayatilake FCAMs. S. Joseph ACAS.T.D.L. Perera ACAMs. B.K.D.T.N. Rodrigo ACA
KPMG Tel : +94 - 11 542 6426(Chartered Accountants) Fax : +94 - 11 244 587232A, Sir Mohamed Macan Markar Mawatha, +94 - 11 244 6058P. O. Box 186, +94 - 11 254 1249 Colombo 00300, +94 - 11 230 7345Sri Lanka. Internet : www.lk.kpmg.com
TO THE SHAREHOLDERS OF RENUKA AGRI FOODS PLC
Report on the Financial Statements
We have audited the accompanying financial statements of Renuka Agri
Foods PLC (“the Company”) and the consolidated financial statements
of the Company and its subsidiaries (“the Group”), which comprise the
statements of financial position as at 31st March 2013, the statements
of comprehensive income, changes in equity and cash flows for the year
then ended, and notes, comprising a summary of significant accounting
policies and other explanatory information set out on pages 26 to 64 of
the annual report.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation
of these financial statements in accordance with Sri Lanka Accounting
Standards. This responsibility includes: designing, implementing
and maintaining internal control relevant to the preparation and
fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances.
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion on these financial statements
based on our audit. We conducted our audit in accordance with
Sri Lanka Auditing Standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
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 policies used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation.
We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit. We therefore believe that our audit provides a reasonable basis
for our opinion.
Opinion - Company
In our opinion, so far as appears from our examination, the Company
maintained proper accounting records for the year ended 31st March
2013 and the financial statements give a true and fair view of the
financial position of the Company as at 31st March 2013, and of its
financial performance and its cash flows for the year then ended in
accordance with Sri Lanka Accounting Standards.
Opinion - Group
In our opinion, the consolidated financial statements give a true and fair
view of the financial position of the Company and its subsidiaries dealt
with thereby as at 31st March 2013 and of its financial performance
and its cash flows for the year then ended in accordance with Sri Lanka
Accounting Standards.
Report on Other Legal and Regulatory Requirements
These financial statements also comply with the requirements of
Sections 153(2) to 153(7) of the Companies Act No. 07 of 2007.
Chartered Accountants
05th August 2013
Colombo
21Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
For the year ended 31st March 2013 2012 2013 2012Note Rs. Rs. Rs. Rs.
Revenue 5 2,564,829,166 1,975,027,640 1,478,635,687 1,626,891,682
Cost of Sales (1,960,021,955) (1,351,955,870) (1,098,168,465) (1,111,179,132)
Gross Profit 604,807,211 623,071,770 380,467,222 515,712,550
Other Operating Income 6 70,402,585 34,886,551 8,604,564 3,565,731
Administration Expenses (223,453,727) (170,449,950) (108,106,893) (84,191,359)
Selling and Distribution Expenses (238,671,197) (121,942,563) (34,144,939) (93,254,212)
Profit from Operations 7 213,084,872 365,565,808 246,819,954 341,832,710
Net Financing Costs 8 (22,214,520) (29,324,799) (10,019,907) (26,688,048)
Profit Before Tax 190,870,352 336,241,009 236,800,047 315,144,662
Taxation 9 (1,179,750) 1,652,845 (6,278,969) 35,405
Profit for the year 189,690,602 337,893,854 230,521,078 315,180,067
Other Comprehensive Income - - - -
Total Comprehensive Income for the Year 189,690,602 337,893,854 230,521,078 315,180,067
Profit Attributable to:
Owners of the Company 200,000,582 316,443,340 230,521,078 315,180,067
Non Controlling Interest (10,309,980) 21,450,514 - -
Profit for the Year 189,690,602 337,893,854 230,521,078 315,180,067
Total Comprehensive Income Attributable to:
Owners of the Company 200,000,582 316,443,340 230,521,078 315,180,067
Non Controlling Interest (10,309,980) 21,450,514 - -
Total Comprehensive Income for the Year 189,690,602 337,893,854 230,521,078 315,180,067
Basic Earnings Per Share 10.1 0.36 0.79 0.41 0.79
Dividend Per Share 10.2 0.14 0.10 0.14 0.10
Figures in brackets indicate deductions
The Financial Statements are to be read in conjunction with the related notes, which form a part of the Financial Statements of the Group set out on pages 26 to 64.
Statements of Comprehensive Income
22 Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03-2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Note Rs. Rs. Rs. Rs. Rs. Rs.
ASSETS
Non-Current AssetsProperty, Plant and Equipment 11 1,385,758,547 1,149,576,596 472,112,990 491,491,390 467,124,997 277,944,658 Biological Assets 12 29,513,248 28,098,711 5,633,879 - - - Intangible Assets 13 8,175,558 10,918,522 - 8,175,558 10,918,522 - Immovable Estate Assets on Lease 14 54,999,984 57,749,988 60,499,992 - - - Premium Paid for Leasehold Premises 15 2,555,532 2,624,602 2,693,672 2,555,532 2,624,602 2,693,672 Investments Property 16 283,495,321 55,089,160 46,274,894 - - - Investment In Subsidiaries 17 - - - 1,353,875,000 670,625,000 146,875,000 Goodwill on Acquisition 18 267,425,254 265,553,003 - - - -
2,031,923,444 1,569,610,582 587,215,427 1,856,097,480 1,151,293,121 427,513,330
Current AssetsInventories 19 356,029,941 317,728,021 250,603,984 232,118,876 241,326,137 207,657,221 Trade and Other Receivables 20 356,570,036 216,781,989 112,294,137 221,064,227 130,806,938 87,473,371 Tax Recoverable 21 25,089,030 18,393,159 19,331,656 13,803,958 8,660,850 4,425,119 Amounts Due from Related Companies 22 376,554,189 56,854,204 30,044,873 91,776,037 177,975,141 122,547,997 Cash and Cash Equivalents 23 109,616,498 77,189,143 158,770,140 30,177,569 40,365,512 129,464,899
1,223,859,694 686,946,516 571,044,790 588,940,667 599,134,578 551,568,607 Total Assets 3,255,783,138 2,256,557,098 1,158,260,217 2,445,038,147 1,750,427,699 979,081,937
EQUITY AND LIABILITIESEquityStated Capital 24 1,194,452,950 552,452,950 552,452,950 1,194,452,950 552,452,950 552,452,950 Retained Earnings 714,865,218 609,279,419 345,798,614 748,352,602 599,686,524 324,631,457
1,909,318,168 1,161,732,369 898,251,564 1,942,805,552 1,152,139,474 877,084,407 Non Controlling Interest 482,739,080 129,697,848 34,987,389 - - -
2,392,057,248 1,291,430,217 933,238,953 1,942,805,552 1,152,139,474 877,084,407
Non-Current LiabilitiesRetirement Benefit Obligations 25 26,028,208 23,514,010 10,749,268 13,658,403 10,893,054 6,358,287 Loans and Borrowings 26.2 161,253,497 117,564,188 13,096,316 130,499,267 108,055,784 13,100,651 Finance Lease Obligations 27 63,304,808 65,486,066 67,000,000 - - - Deferred Tax Liability 28 40,749,482 48,928,708 18,604,475 18,172,990 16,089,215 16,883,651
291,335,995 255,492,972 109,450,059 162,330,660 135,038,053 36,342,589
Current LiabilitiesLoans and Borrowings 26.1 109,924,184 222,699,677 18,219,861 87,783,573 207,019,693 3,208,356 Finance Lease Obligations 27 2,181,258 2,163,702 2,128,079 - - - Trade and Other Payables 29 305,394,597 311,707,187 65,868,240 187,246,980 162,875,611 50,767,917 Amounts Due to Related Companies 30 3,420,232 62,315,463 7,167,052 18,371,751 52,775,357 3,449,314 Dividend Payable 2,075,762 1,993,936 1,350,000 725,762 643,936 - Income Tax Payable 2,170,350 1,114,337 6,454,541 - - - Bank Overdraft 23 147,223,512 107,639,607 14,383,432 45,773,869 39,935,575 8,229,354
572,389,895 709,633,909 115,571,205 339,901,935 463,250,172 65,654,941 Total Liabilities 863,725,890 965,126,881 225,021,264 502,232,595 598,288,225 101,997,530 Total Equity and Liabilities 3,255,783,138 2,256,557,098 1,158,260,217 2,445,038,147 1,750,427,699 979,081,937
The Financial Statements are to be read in conjunction with the related notes, which form a part of the Financial Statements of the Group set out on pages 26 to 64.
I certify that the Financial Statements have been prepared in compliance with the requirement of the Companies Act No. 07 of 2007
Sgd.D.C.F. KaththriarachchigeFinancial Controller
The Board of directors is responsible for preparation and presentation of these Financial Statements. Approved and signed for and on behalf of the Board:
Sgd. Sgd.Dr. S.R. Rajiyah C.J. De. S. AmaratungaChairman Director
05th August, 2013Colombo
Statements of Financial Position
23Renuka Agri Foods PLC | Annual Report 2013
For the year ended 31st March Stated Capital
Retained Earnings
Total Equity
Rs. Rs. Rs.
Company
Balance as at 1st April 2011 as Previously Stated 552,452,950 324,631,457 877,084,407
Impact of Adopting SLFRSs as at 1st April 2011 - - -
Restated Balance as at 1st April 2011 552,452,950 324,631,457 877,084,407
Profit for the Year - 315,180,067 315,180,067
Other Comprehensive Income - - -
Total Comprehensive Income - 315,180,067 315,180,067
Transactions with Owners of the Company, Recognized
Directly in Equity
Dividend Paid - (40,125,000) (40,125,000)
Total Transactions with Owners of the Company - (40,125,000) (40,125,000)
Balance as at 31st March 2012 552,452,950 599,686,524 1,152,139,474
Balance as at 1st April 2012 552,452,950 599,686,524 1,152,139,474
Profit for the Year - 230,521,078 230,521,078
Other Comprehensive Income - - -
Total Comprehensive Income - 230,521,078 230,521,078
Transactions with Owners of the Company, Recognized
Directly in Equity
Right Issue During the Year 642,000,000 - 642,000,000
Direct Cost on Share Issue - (3,210,000) (3,210,000)
Dividend Paid - (78,645,000) (78,645,000)
Total Transactions with Owners of the Company 642,000,000 (81,855,000) 560,145,000
Balance as at 31st March 2013 1,194,452,950 748,352,602 1,942,805,552
Figures in brackets indicate deductions
The Financial Statements are to be read in conjunction with the related notes, which form a part of the Financial Statements of the Group set out on pages 26 to 64.
Statement of Changes of Equity
24 Renuka Agri Foods PLC | Annual Report 2013
Equity Attributable to Owners
For the year ended 31st March Stated Capital
Retained Earnings
Total Non
Controlling Interest
Total Equity
Rs. Rs. Rs. Rs. Rs.
Group
Balance as at 1st April 2011 as Previously Stated 552,452,950 335,273,890 887,726,840 34,311,901 922,038,741
Impact of adopting SLFRSs as at 1st April 2011 - 10,524,724 10,524,724 675,488 11,200,212
Restated Balance as at 1st April 2011 552,452,950 345,798,614 898,251,564 34,987,389 933,238,953
Profit for the year - 316,443,340 316,443,340 21,450,514 337,893,854
Other Comprehensive Income - - - - -
Total Comprehensive Income - 316,443,340 316,443,340 21,450,514 337,893,854
Transactions with Owners of the Company, Recognized
Directly in Equity
Adjustment due to
- Acquisition of Subsidiary - - - 75,614,841 75,614,841
- Change in Percentage Holdings - (4,073,204) (4,073,204) 4,071,563 (1,641)
Reversal of Revaluation Reserve - (8,764,331) (8,764,331) (2,722,761) (11,487,092)
Dividend Paid - (40,125,000) (40,125,000) (3,703,698) (43,828,698)
Total Transactions with Owners of the Company - (52,962,535) (52,962,535) 73,259,945 20,297,410
Balance as at 31st March 2012 552,452,950 609,279,419 1,161,732,369 129,697,848 1,291,430,217
Balance as at 1st April 2012 552,452,950 609,279,419 1,161,732,369 129,697,848 1,291,430,217
Profit for the year - 200,000,582 200,000,582 (10,309,980) 189,690,602
Other Comprehensive Income - - - - -
Total Comprehensive Income - 200,000,582 200,000,582 (10,309,980) 189,690,602
Transactions with Owners of the Company, Recognized
Directly in Equity
Adjustment due to
- Disposal of Subsidiary - (3,382,855) (3,382,855) 7,211,262 3,828,407
- Acquisition of Subsidiary - - - 448,089,688 448,089,688
- Changes in Percentage Holdings - (9,176,928) (9,176,928) (90,823,072) (100,000,000)
Dividend Paid - (78,645,000) (78,645,000) (1,126,666) (79,771,666)
Right Issue During the Year 642,000,000 - 642,000,000 - 642,000,000
Share Issue Expenses - (3,210,000) (3,210,000) - (3,210,000)
Total Transactions with Owners of the Company 642,000,000 (94,414,783) 547,585,217 363,351,212 910,936,428
Balance as at 31st March 2013 1,194,452,950 714,865,218 1,909,318,168 482,739,080 2,392,057,248
Figures in brackets indicate deductions
The Financial Statements are to be read in conjunction with the related notes, which form a part of the Financial Statements of the Group set out on pages 26 to 64.
Statement of Changes of Equity (Contd)
25Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
For the year ended 31st March 2013 2012 2013 2012Rs. Rs. Rs. Rs.
Cash Flows Operating Activities
Profit Before Tax 190,870,352 336,241,009 236,800,047 315,144,662
Adjustment For
Depreciation 77,463,171 46,392,103 35,813,662 30,125,398
Fair Value Gain on Biological Assets (1,135,379) (22,023,127) - -
Amortization of Intangible Assets 2,742,964 2,729,631 2,742,964 2,729,631
Amortization of Immovable Estate Assets on Lease 2,750,004 2,750,004 - -
Profit on Disposal of Subsidiary (4,326,758) - - -
Provision for Retirement Benefit Obligation 6,994,232 7,151,165 4,527,149 4,753,767
Provision for impairment Losses on Trade and other Receivables 121,678 7,297,436 - -
Provision for Obsolete Inventories 5,940,464 - 5,940,464 -
Write off of Inventory - - - (2,232,576)
Net Finance Costs 18,713,904 6,284,824 6,308,980 2,087,642
VAT Recoverable Write Off - 1,882,668 - 1,860,522
Dividend Income - - (202,500) (450,000)
(Profit)/Loss on Disposal of Property, Plant and Equipment (36,300) 36,429 - -
Amortization of Prepaid Lease Rent 69,070 69,070 69,070 69,070
Operating Profit Before Working Capital Changes 300,167,402 388,811,212 291,999,836 354,088,116
(Increase)/Decrease in Inventories (65,747,914) (40,825,914) 3,266,797 (31,436,340)
Increase in Trade and Other Receivables (181,404,240) (68,038,378) (90,257,289) (43,333,567)
(Increase)/Decrease in Amounts due from Related Companies 97,300,015 (26,809,331) 86,199,104 (55,427,144)
Increase in Trade and Other Payables 21,378,320 78,249,730 24,371,369 112,107,694
Increase/(Decrease) in Amounts due to Related Companies 21,707,622 55,148,411 (34,403,606) 49,326,043
Cash Generated from operations 193,401,205 386,535,730 281,176,211 385,324,802
Gratuity paid (4,052,731) (1,264,260) (1,761,800) (219,000)
Interest Paid (37,728,705) (10,452,860) (20,038,362) (5,571,914)
Tax Paid (14,762,929) (6,464,548) (9,338,302) (6,855,284)
Net Cash Generated from Operating Activities 136,856,840 368,354,062 250,037,747 372,678,604
Cash flows from Investing Activities
Purchase of Property, Plant and Equipment (108,063,579) (217,242,667) (60,180,055) (219,305,737)
Purchase of Biological Assets (279,158) (441,705) - -
Purchase of Intangible Assets - (13,648,153) - (13,648,153)
Proceeds from Disposal of Investment - 5,000,000 - -
Proceeds from Disposal of Property, Plant and Equipment 36,300 303,571 - -
Investment in Debentures - - (602,000,000) -
Acquisition of Subsidiaries Net of Cash Acquired (Note 35.1) (449,883,677) (555,326,241) (100,000,000) (523,750,000)
Acquisition of Non-Controlling Interest (100,000,000) - - -
Interest Income Received 19,014,801 4,168,036 13,729,382 3,484,272
Proceeds from Disposal of Subsidiary 7,311,650 - 18,750,000 -
Net Cash flow used in Investing Activities (631,863,663) (777,187,159) (729,700,673) (753,219,618)
Cash flows from Financing Activities
Proceeds from Issue of Shares 642,000,000 - 642,000,000 -
Share Issue expenses (3,210,000) - (3,210,000) -
Loans and Borrowings During the Year 330,217,933 306,398,449 234,169,362 301,974,826
Repayment of Loans and Borrowings (399,304,117) (27,051,503) (330,961,999) (3,208,356)
Repayment of Lease Obligations (2,163,702) (2,166,260) - -
Dividend Income - - 202,500 450,000
Payment of Dividend (79,689,841) (43,184,761) (78,563,174) (39,481,064)
Net Cash Flows Generated From Financing Activities 487,850,273 233,995,925 463,636,689 259,735,406
Net Decrease in cash and cash equivalents (7,156,550) (174,837,172) (16,026,237) (120,805,608)Cash and Cash Equivalents at the Beginning of the year (30,450,464) 144,386,708 429,937 121,235,545
Cash and cash equivalents at the end of the year (Note 23) (37,607,014) (30,450,464) (15,596,300) 429,937
Figures in brackets indicate deductions
The Financial Statements are to be read in conjunction with the related notes, which form a part of the Financial Statements of the Group set out on pages 26 to 64.
Statement of Cash Flows
26 Renuka Agri Foods PLC | Annual Report 2013
Notes to the Financial Statements
1. CORPORATE INFORMATION
1.1. Reporting Entity
Renuka Agri Foods PLC is a public quoted Company incorporated
and domiciled in Sri Lanka. The registered office of the Company
is located at No. 69, Sri Jinarathana Road, Colombo 2.
The consolidated Financial Statements of the Company as at
and for the year ended 31st March 2013 comprise the Company
and its subsidiaries (together referred to as the “Group” and
individually as “Group entities”).
The principal activities of the Company and Group entities are
disclosed in Note 39 to the Financial Statements.
1.2. Parent and Ultimate Parent Undertaking
The company's parent undertaking is Renuka Shaw Wallace PLC
and the Company's ultimate parent is Renuka Group Limited.
1.3. Financial Year
Financial Statements of the Company and Group entities ends
on 31st March.
2. BASIS OF PREPARATION
2.1. Statement of Compliance
The Consolidated Financial Statements have been prepared
in accordance with the Sri Lanka Accounting standards issued
by the Institute of Chartered Accountants of Sri Lanka and the
requirements of the Companies Act No. 7 of 2007.
These are the Group’s first Financial Statements prepared in
accordance with Sri Lanka Financial Reporting Standards (SLFRS)
and SLFRS 1, “First-time Adoption of Sri Lanka Accounting
Standards” has been applied. An explanation of how the
transition to SLFRSs has affected the reported financial position
and financial performance of the Group is provided in the
Note 36 to the Financial Statements.
The consolidated Financial Statements were authorized for issue
by the Board of Directors on 05th August, 2013.
2.2. Basis of Measurement
The consolidated Financial Statements have been prepared on
the historical cost basis except for the following material items
in the statement of financial position:
� Biological assets are measured at fair value less costs to sell
� Investment property is measured at fair value
� Liability for defined benefit obligations is carried at the
present value of the defined benefit obligations.
2.3. Functional and Presentation Currency
These consolidated Financial Statements are presented in
Sri Lanka rupees, which is the Company’s functional currency.
All financial information presented has been rounded to the
nearest rupee unless otherwise indicated
2.4. Use of Estimates and Judgments
The preparation of the Financial Statements in conformity with
SLFRSs requires management to make judgments, estimates
and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimates are revised and in any
future periods affected.
Information about critical judgments in applying accounting
policies that have significant effect on the amounts recognized
in the Financial Statements is included in the respective notes to
the Financial Statements.
Information about assumptions and estimation uncertainties
that have a significant risk of resulting in a material adjustment
within the next financial year are included in respective notes to
the Financial Statements
2.5. Going Concern
The Board of Directors has made an assessment of the Group’s
ability to continue as a going concern in the foreseeable future
and they do not intend to liquidate or cease trading.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
Financial Statements and in preparing the opening SLFRS
statement of financial position at 1st April 2011 for the purposes
of the transition to SLFRSs, unless otherwise indicated. The
accounting policies have been applied consistently by Group
entities.
3.1. Basis of Consolidation
The consolidated Financial Statements include the Financial
Statements of the company, its subsidiaries and other
companies over which it has control. The group’s Financial
Statements comprise of the consolidated Financial Statements
of the company which have been prepared in compliance with
the group’s accounting policies.
3.1.1. Business Combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date which is the date on which
control is transferred to the Group. Control is the power to
govern the financial and operating policies of an entity so as
to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that
currently are exercisable.
27Renuka Agri Foods PLC | Annual Report 2013
Notes to the Financial Statements (Contd)
The Group measures goodwill at the acquisition date as:
� The fair value of the consideration transferred; plus
� The recognized amount of any non-controlling interests in
the acquiree; plus
� If the business combination is achieved in stages, the fair
value of the pre-existing equity interest in the acquiree; less
� The net recognized amount (generally fair value) of the
identifiable assets acquired and Liabilities Assumed
When the excess is negative, a bargain purchase gain is
recognized immediately in profit or loss.
3.1.2 Non-Controlling Interests
Acquisitions of non-controlling interests are accounted for
as transactions with owners in their capacity as owners and
therefore no goodwill is recognized and as a result, adjustments
to non controlling interests arising from transactions that do not
involve the loss of control are based on a proportionate amount
of the net assets of the subsidiary
3.1.2. Subsidiaries
Subsidiaries are entities controlled by the Group. The Financial
Statements of subsidiaries are included in the consolidated
Financial Statements from the date that control commences
until the date that control ceases. The accounting policies of
subsidiaries have been changed when necessary to align them
with the policies adopted by the Group.
3.1.3. Loss of Control
On the loss of control, the Group derecognizes the assets and
liabilities of the subsidiary, any non controlling interests and
the other components of equity related to the subsidiary Any
surplus or deficit arising on the loss of control is recognized in
profit or loss. If the Group retains any interest in the previous
subsidiary, then such interest is measured at fair value at the
date that control is lost. Subsequently it is accounted for as an
equity accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.
3.1.4. Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealized
income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated Financial Statements.
Unrealized losses are eliminated in the same way as unrealized
gains, but only to the extent that there is no evidence of
impairment.
3.2. Foreign Currency Transactions
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting
date are retranslated to the functional currency at the exchange
rate at that date. The foreign currency gain or loss on monetary
items is the difference between amortized cost in the functional
currency at the beginning of the year, adjusted for effective
interest and payments during the year, and the amortized cost
in foreign currency translated at the exchange rate at the end
of the year.
Non-monetary assets and liabilities that are measured at fair
value in a foreign currency are retranslated to the functional
currency at the exchange rate at the date that the fair value
was determined. Non-monetary items that are measured based
on historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
Foreign currency differences arising on re-translation are
generally recognized in profit or loss.
3.3. Financial Instruments
3.3.1. Non-Derivative Financial Assets
The Group initially recognizes loans and receivables and deposits
on the date that they are originated. All other financial assets
are recognized initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
The Group derecognizes a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers
the rights to receive the contractual cash flows on the financial
asset in a transaction in which substantially all the risks and
rewards of ownership of the financial asset are transferred. Any
interest in transferred financial assets that is created or retained
by the Group is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and
intends either to settle on a net basis or to realize the asset and
settle the liability simultaneously.
The group classifies non derivative financial assets into the
following categories;
� Loans and Receivables
(a) Loans and Receivables
Loans and receivables are financial assets with fixed or
determinable payment that are not quoted in an active market.
Such assets are recognized at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition
loans and receivables are measured at amortized cost using the
effective interest method, less any impairment losses.
Loans and receivables comprise of trade receivables, other
receivables, and cash & cash equivalents.
28 Renuka Agri Foods PLC | Annual Report 2013
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and call
deposits with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of
changes in their fair value and are used by the Group in the
management of its short-term commitments.
3.3.2. Non-Derivative Financial Liabilities
The Group initially recognizes debt securities issued and
subordinated liabilities on the date that they are originated. All
other financial liabilities are recognized initially on the trade
date at which the Group becomes a party to the contractual
provisions of the instrument.
The Group derecognizes a financial liability when its contractual
obligations are discharged or cancelled or expire. Financial
assets and liabilities are offset and the net amount presented
in the statement of financial position when, and only when, the
Group has a legal right to offset the amounts and intends either
to settle on a net basis or to realize the asset and settle the
liability simultaneously.
The Group classifies non-derivative financial liabilities into the
other financial liabilities category. Such financial liabilities are
recognized initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition these
financial liabilities are measured at amortized cost using the
effective interest method.
Other financial liabilities comprise loans and borrowings, debt
securities issued, bank overdrafts, and trade and other payables.
Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as
a component of cash and cash equivalents for the statement of
cash flows.
3.3.3. Stated Capital
3.3.3.1 Ordinary Shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares are
recognized as a deduction from equity, net of any tax effects.
3.4. Property, Plant and Equipment
3.4.1. Recognition and Measurement
Items of property, plant and equipment are measured at cost
less accumulated depreciation and accumulated impairment
losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labor, any other costs
directly attributable to bringing the assets to a working condition
for their intended use, the costs of dismantling and removing
the items and restoring the site on which they are located.
Purchased software that is integral to the functionality of the
related equipment is capitalized as part of the equipment.
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Any gains and losses on disposal of an item of property, plant
and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and
equipment, and are recognized net within other income in profit
or loss.
3.4.2. Reclassification to Investment Property
When the use of a property changes from owner-occupied to
investment property, the property is re measured to fair value
and reclassified as investment property. Any gain arising on re
measurement is recognized in profit or loss to the extent the gain
reverses a previous impairment loss on the specific property,
with any remaining gain recognized in other comprehensive
income and presented in the revaluation reserve in equity.
Any loss is recognized in other comprehensive income and
presented in the revaluation reserve in equity to the extent
that an amount had previously been included in the revaluation
reserve relating to the specific property, with any remaining
loss recognized immediately in profit or loss.
3.4.3. Subsequent Costs
The cost of replacing a part of an item of property, plant and
equipment is recognized in the carrying amount of the item
if it is probable that the future economic benefits embodied
within the part will flow to the Group, and its cost can be
measured reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day servicing of property,
plant and equipment are recognized in profit or loss as incurred.
3.4.4. Depreciation
Items of property, plant and equipment are depreciated from
the date they are available for use or, in respect of self-
constructed assets, from the date that the asset is completed
and ready for use.
Depreciation is calculated to write off the cost of items of
property, plant and equipment less their estimated residual
values using the straight-line basis over their estimated useful
lives. Depreciation is generally recognized in profit or loss,
unless the amount is included in the carrying amount of another
asset. Leased assets are depreciated over the shorter of the
lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease
term. Land is not depreciated.
Notes to the Financial Statements (Contd)
29Renuka Agri Foods PLC | Annual Report 2013
The estimated useful lives for the current and comparative
years of significant items of property, plant and equipment are
as follows:
Class of Assets Useful Lifetime (Years)
Factory Buildings 40
Plant and machinery 10-20
Electrical Installation 10
Spare Parts and Tools 10
Laboratory Equipment 10
Factory Equipment 10
Office Equipment 10
Furniture and Fitting 10
Motor vehicles 05
3.5. Intangible Assets and Goodwill
3.5.1. Goodwill
Goodwill that arises upon the acquisition of subsidiaries is
included in intangible assets. Goodwill is measured at initial
recognition in accordance with accounting policy 3.1.1.
3.5.1.1 Subsequent Measurement
Goodwill is measured at cost less accumulated impairment
losses. In respect of equity accounted, investees, the carrying
amount of goodwill is included in the carrying amount of the
investment, and any impairment loss on such investment is not
allocated to any asset, including goodwill, that forms part of the
carrying amount of the equity accounted investee.
3.5.2. Other Intangible Assets
Other intangible assets that are acquired by the Group and
have finite useful lives are measured at cost less accumulated
amortization and accumulated impairment losses.
3.5.3. Subsequent Expenditure
Subsequent expenditure is capitalized only when it increases
the future economic benefits embodied in the specific asset to
which it relates. All other expenditure, including expenditure on
internally generated goodwill and brands, is recognized in profit
or loss as incurred.
3.5.4 Amortization
Except for goodwill, intangible assets are amortized on a
straight-line basis in profit or loss over their estimated useful
lives from the date that they are available for use.
Class of Assets Useful Lifetime (Years)
Computer Software 5 years
Amortization methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
3.6 Biological Assets
Biological assets are measured at fair value less costs to sell,
with any change therein recognized in profit or loss. Costs to
sell include all costs that would be necessary to sell the assets,
including transportation costs.
3.7 Investment Property
Investment property is a property held either to earn rental
income or for capital appreciation or for both, but not for sale in
the ordinary course of business, use in the production or supply
of goods or services or for administrative purposes.
3.7.1 Basis of Recognition
Investment property is recognized if it is probable that future
economic benefits that are associated with the investment
property will flow to the Group and cost of the investment
property can be reliably measured.
3.7.2 Measurement
An investment property is measured initially at its cost. The cost
of a purchased investment property comprises of its purchase
price and any directly attributable expenditure. The cost of a self
constructed investment property is its cost at the date when the
construction or development is complete.
The Group applies the fair value model for investment properties
in accordance with Sri Lanka Accounting Standard 40 (LKAS
40) “Investment Property”. Accordingly, land and buildings
classified as investment properties are stated at its fair value
and the resulting gain or loss arising from the change in fair
value of the investment property is recognized in profit or loss.
3.7.3. Derecognition
Investment properties are derecognised when disposed of, or
permanently withdrawn from use because no future economic
benefits are expected. Transfers are made to and from
investment properties only when there is a change in use.
Any gain or loss on disposal of an investment property
(calculated as the difference between the net proceeds from
disposal and the carrying amount of the item) is recognized in
profit or loss. When an investment property that was previously
classified as property plant and equipment is sold, any related
amount included in the revaluation reserve is transferred to
retained earnings. When the use of a property changes such
that it is reclassified as property plant and equipment, its
fair value at the date of reclassification becomes its cost for
subsequent accounting.
3.8. Leased Assets
Leases in terms of which the Group assumes substantially all
the risks and rewards of ownership are classified as finance
Notes to the Financial Statements (Contd)
30 Renuka Agri Foods PLC | Annual Report 2013
leases. Upon initial recognition the leased asset is measured at
an amount equal to the lower of its fair value and the present
value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the
accounting policy applicable to that asset. Other leases are
operating leases and, except for investment property, the
leased assets are not recognized in the Group’s statement of
financial position.
3.9. Inventories
Inventories are measured at the lower of cost and net realizable
value.
The cost of inventories includes expenditure incurred in
acquiring the inventories, production or conversion costs and
other costs incurred in bringing them to their existing location
and condition. In the case of manufactured inventories and work
in progress, cost includes an appropriate share of production
overheads based on normal operating capacity.
Cost incurred in bringing inventories to the present location and
condition is recognized as follows
� Raw Material - At cost determined at the factory on
weighted average cost method.
� Finished Goods - At factory cost of direct materials, direct
labor and appropriate proportion of fixed production
overheads at normal operating capacity.
� Goods in transit - At the actual cost
� Packing Material - At cost determined at the factory on
weighted average cost method
Net realizable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and
selling expenses.
3.10 Impairment
3.10.1 Financial Assets
A financial asset not carried at fair value through profit or loss
is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future Cash
flows of that asset that can be estimated reliably. Objective
evidence that financial assets (including equity securities)
are impaired can include default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the
Group would not consider otherwise, indications that a debtor or
issuer will enter bankruptcy, or the disappearance of an active
market for a security. In addition, for an investment in an equity
security, a significant or prolonged decline in its fair value below
its cost is objective evidence of impairment.
The Group considers evidence of impairment for receivables
at both a specific asset and collective level. All individually
significant receivables are assessed for specific impairment. All
individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment
that has been incurred but not yet identified. Receivables that
are not individually significant are collectively assessed for
impairment by grouping together receivable with similar risk
characteristics.
Losses are recognised in profit or loss and reflected in an
allowance account against loans and receivables. When an
event occurring after the impairment was recognised causes
the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through profit or loss.
3.10.2 Non-Financial Assets
The carrying amounts of the Group’s non-financial assets, other
than biological assets, investment properties, inventories and
deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If
any such indication exists, then the asset’s recoverable amount
is estimated. For goodwill, and intangible assets that have
indefinite useful lives or that are not yet available for use, the
recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. For the purpose of
impairment testing, assets that cannot be tested individually
are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups
of assets. For the purposes of goodwill impairment testing,
goodwill acquired in a business combination is allocated to the
group of CGUs that is expected to benefit from the synergies
of the combination. This allocation is subject to an operating
segment ceiling test and reflects the lowest level at which
that goodwill is monitored for internal reporting purposes. The
Group’s corporate assets do not generate separate cash inflows.
If there is an indication that a corporate asset may be impaired,
then the recoverable amount is determined for the CGU to which
the corporate asset belongs. An impairment loss is recognized if
the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in profit
or loss.
Impairment losses recognized in respect of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to
the units, and then to reduce the carrying amounts of the other
assets in the unit (group of units) on a pro rata basis.
Notes to the Financial Statements (Contd)
31Renuka Agri Foods PLC | Annual Report 2013
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognized in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortization, if no
impairment loss had been recognized.
3.10 Employee Benefits
3.10.2 Defined Contribution Plan-Gratuity
A defined benefit plan is a post-employment benefit plan other
than a defined contribution plan. The Group’s net obligation in
respect of defined benefit plans is calculated by estimating the
amount of future benefit that employees have earned in return
for their service in the current and prior periods; that benefit is
discounted to determine its present value.
The retirement benefit obligation of the group is based on the
actuarial valuation using Projected Unit Credit (PUC) methods
as recommended by Sri Lanka Accounting Standard (LKAS 19)
Employee Benefits. The calculation is performed by independent
actuary using the projected unit credit method. The assumptions
based on which the results of the actuarial valuation was
determined, are included in Note 25 to the Financial Statements.
The Group recognizes all actuarial gains and losses arising
from the defined benefits plans immediately in the statement
of comprehensive income. The liability is disclosed under
non-current liabilities in the statement of financial position and
not externally funded.
However, as per the Payment of Gratuity Act No. 12 of 1983 the
liability to an employee arises only on completion of 5 years of
continued service.
3.10.3 Defined Contribution Plan-Employee Provident Fund and
Employee Trust Fund
All employees who are eligible for Employees Provident Fund
contribution and Employees Trust Fund contribution are covered
by relevant contribution funds in line with respective statutes
and regulations. The Company contributes 12 % and 3% of gross
emoluments of employees to Employees’ Provident Fund and
Employees’ Trust Fund respectively.
3.11 Provisions
A provision is recognized if, as a result of a past event, the
Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. 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 the risks specific to the liability. The
unwinding of the discount is recognized as finance cost.
3.11.4 Commitments and Contingent Liabilities
Contingent Liabilities are possible obligations whose existence
will be confirmed only by occurrence or non-occurrence of
uncertain future events not wholly within the control of the
Company or present obligations where the transfer of economic
benefits is not probable or cannot be reliably measured. Capital
Commitment and Contingent Liabilities of the Company and
the group are disclosed in the respective notes to the Financial
Statements.
3.3.3 Events After the Reporting Period
The materiality of the events after the reporting period has been
considered and appropriate adjustments and provisions have
been made in the Financial Statements wherever necessary.
3.12 Revenue
3.12.2 Sale of Goods
Revenue from the sale of goods in the course of ordinary
activities is measured at the fair value of the consideration
received or receivable, net of returns, trade discounts and
volume rebates.
Revenue is recognized when significant risks and rewards of
ownership have been transferred to the customer, recovery of
the consideration is probable, the associated costs and possible
return of goods can be estimated reliably, there is no continuing
management involvement with the goods, and the amount of
revenue can be measured reliably.
If it is probable that discounts will be granted and the amount
can be measured reliably, then the discount is recognized as a
reduction of revenue as the sales are recognized.
3.12.3 Rental Income
Rental income from investment property is recognized in profit
or loss on a straight-line basis over the term of the lease. Lease
incentives granted are recognized as an integral part of the total
rental income, over the term of the lease. Rental income from
subleased property is recognized as other income.
3.13 Finance Income and Finance Costs
Finance Income comprises interest income on funds invested
recognized in profit or loss using the effective interest method.
Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset are
recognized in profit or loss using the effective interest method.
Notes to the Financial Statements (Contd)
32 Renuka Agri Foods PLC | Annual Report 2013
Foreign currency gains and losses on financial assets and
financial liabilities are reported on a net basis as either finance
income or finance cost depending on whether foreign currency
movements are in a net gain or net loss position.
3.14 Income Tax
Tax expense comprises current and deferred tax. Current tax and
deferred tax is recognized in profit or loss except to the extent
that it relates to a business combination, or items recognized
directly in equity or in other comprehensive income.
3.14.2 Current Tax
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment
to tax payable in respect of previous years. Current tax payable
also includes any tax liability arising from the declaration of
dividends.
3.14.3 Deferred Tax
Deferred tax is recognized in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognized for:
� Temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or
loss;
� Temporary differences related to investments in
subsidiaries, associates and jointly controlled entities to the
extent that the Group is able to control the timing of the
reversal of the temporary differences and it is probable that
they will not reverse in the foreseeable future; and
� Taxable temporary differences arising on the initial
recognition of goodwill.
The measurement of deferred tax reflects the tax consequences
that would follow the manner in which the Group expects, at
the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities. For investment property that
is measured at fair value, the presumption that the carrying
amount of the investment property will be recovered through
sale has not been rebutted.
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse, using
tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and
they relate to taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax
credits and deductible temporary differences to the extent that
it is probable that future taxable profits will be available against
which they can be utilized. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realized.
3.15 Statement of Cash Flows
The Statement of Cash Flows has been prepared using the
“indirect method”.
Interest paid are classified as operating cash flows, interest
received is classified as investing cash flows for the purpose of
presenting Statement of Cash Flows.
3.16 Earnings Per Share
The Company presents Basic Earnings Per Share (EPS) data for
its Ordinary Shares. Basic EPS is calculated by dividing the profit
or loss attributable to ordinary shareholders of the Company by
the weighted average number of Ordinary Shares outstanding
during the period.
3.17 Related Party Transactions
Disclosure has been made in respect of the transactions in
which one party has the ability to control or exercise significant
influence over the financial and operating policies/decisions of
the other, irrespective of whether a price is charged.
3.18 Segment Reporting
Segments results that are results to the group’s CEO (the chief
operating decision maker) include items directly attributable
to a segment as well as those that can be allocated on a
reasonable basis. Unallocated items comprise mainly corporate
assets, head office expenses and tax assets and liabilities.
3.19 Determination of Fair Values
A number of the Group’s accounting policies and disclosures
require the determination of fair value, for both financial
and non-financial assets and liabilities. Fair values have been
determined for measurement and/or disclosure purposes based
on the following methods.
When applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific
to that asset or liability.
3.19.1 Biological Assets
The fair value of younger standing timber is based on the
present value of the net cash flows expected to be generated
by the plantation at maturity, in its most relevant market, and
includes the potential additional biological transformation and
the related risks associated with the asset.
Notes to the Financial Statements (Contd)
33Renuka Agri Foods PLC | Annual Report 2013
3.19.2 Investment Property
An external, independent valuation company, having
appropriate recognized professional qualifications and recent
experience in the location and category of property being
valued, values the Group’s investment property portfolio. The
fair values are based on market values, being the estimated
amount for which a property could be exchanged on the date
of the valuation between a willing buyer and a willing seller in
an arm’s length transaction after proper marketing wherein the
parties had each acted knowledgeably and willingly.
In the absence of current prices in an active market, the
valuations are prepared by considering the aggregate of the
estimated cash flows expected to be received from renting out
the property. A yield that reflects the specific risks inherent in
the net cash flows then is applied to the net annual cash flows
to arrive at the property valuation.
3.19.3 Inventories
The fair value of inventories acquired in a business combination
is determined based on the estimated selling price in the
ordinary course of business less the estimated costs of
completion and sale, and a reasonable profit margin based on
the effort required to complete and sell the inventories.
4. ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE AS AT
REPORTING DATE
The Institute of Chartered Accountants of Sri Lanka has issued
the following new Sri Lanka Accounting Standards which is not
applicable for the current financial period..
Accordingly these Standards have not been applied in preparing
these Financial Statements.
� Sri Lanka Accounting Standards –SLFRS 10 “Consolidated
Financial Statements”.
The objective of this SLFRS is to establish principles for the
presentation and preparation of consolidated Financial
Statements when an entity controls one or more other entities.
An investor is expected to control an investee if and only if the
investor has all the following:
(a) Power over the investee;
(b) Exposure, or rights, to variable returns from its involvement
with the investee ; and
(c) The ability to use its power over the investee to affect the
amount of the investor’s returns
This Standard will require the Company to review the group
structure in the context of the new Standard and its requirements.
Accordingly adoption of this standard is expected to have an
impact on the Group structure, and consolidated reporting.
SLFRS 10 will become effective from 1 April 2014 for the Group
with early adoption permitted. This SLFRS will supersede the
requirements relating to consolidated Financial Statements in
LKAS 27”Consolidated and Separate Financial Statements
� Sri Lanka Accounting Standards –SLFRS 11 “Joint
Arrangements”
The objective of this SLFRS is to establish principles for financial
reporting by entities that have an interest in arrangements that
are controlled jointly (ie joint arrangements).
SLFRS 11 will become effective from 1 April 2014 for the Group
with early adoption permitted. This SLFRS will supersede the
requirements relating to consolidated Financial Statements in
LKAS 31” Interests in Joint Ventures.
� Sri Lanka Accounting Standard - SLFRS 12 ”Disclosure of
Interests in Other Entities”
SLFRS 10 will become effective from 1 April 2014 for the Group
with early adoption permitted
� Sri Lanka Accounting Standard - SLFRS 13, “Fair Value
Measurement”
This SLFRS defines fair value, sets out in a single SLFRS
framework for measuring fair value; and requires disclosures
about fair value measurements.
This SLFRS will become effective for the Group from 1 April
2014. Earlier application is permitted.
This SLFRS shall be applied prospectively as of the beginning of
the annual period in which it is initially applied. The disclosure
requirements of this SLFRS need not be applied in comparative
information provided for periods before initial application of this
SLFRS.
� Sri Lanka Accounting Standard – SLFRS 9 “Financial
Instruments”
The objective of this SLFRS is to establish principles for the
financial reporting of financial assets and financial liabilities that
will present relevant and useful information to users of Financial
Statements for their assessment of the amounts, timing and
uncertainty of an entity’s future cash flows.
An entity shall apply this SLFRS to all items within the scope of
LKAS 39 Financial Instruments: Recognition and Measurement.
This SLFRS will become effective for the group from 1st April
2015. Earlier application is permitted for the financial period
beginning on or after 01 January, 2013. However, if the
Group elects to apply this SLFRS early, it must apply all of the
requirements in this SLFRS at the same time
Notes to the Financial Statements (Contd)
34 Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
For the year ended 31st March 2013 2012 2013 2012Rs. Rs. Rs. Rs.
5. REVENUE
Export Sales 1,369,414,564 1,522,384,047 1,299,176,541 1,483,778,251
Local Sales 1,194,511,672 451,923,593 179,459,146 143,113,431
Rent Income 902,930 720,000 - -
2,564,829,166 1,975,027,640 1,478,635,687 1,626,891,682
6. OTHER OPERATING INCOME
Insurance Claim 320,434 199,580 135,629 72,667
Fair Value Gain on Biological Assets 1,135,379 22,023,127 - -
Profit on Disposal of Property, Plant and Equipment 36,300 - - -
Profit on Disposal of Subsidiary 4,326,758 - - -
Dividend Income - - 202,500 450,000
Packing Material Rebate (Note 29.1) 46,064,355 - - -
Write Back of Payables 6,877,951 - 6,877,951 -
Sundry Income 11,641,408 12,663,844 1,388,484 3,043,064
70,402,585 34,886,551 8,604,564 3,565,731
7. PROFIT BEFORE TAX
Is stated after charging all expenses including the followings;
Director's & Key Management Personnel Remuneration 10,935,000 4,105,000 5,535,000 4,105,000
Auditor's Remuneration
Audit 1,108,750 1,145,796 500,000 430,000
Non Audit Services 172,500 150,000 172,500 150,000
Other Auditor's fees 217,500 600,172 217,500 600,172
Impairment Loss on Trade Receivables 121,678 7,297,436 - -
Depreciation on Property, Plant and Equipment 77,463,171 59,908,416 35,813,662 30,125,398
Amortization on Intangible Assets 2,742,964 2,729,631 2,742,964 2,729,631
Provision for Obsolete Inventories 5,940,464 - 5,940,464 -
VAT Recoverable Written Off - 1,882,668 - 1,860,522
Personnel Costs (Note 7.1) 211,718,666 185,171,252 127,675,239 132,194,868
7.1 PERSONNEL COSTS
Salaries, Wages and Related Expenses 190,699,970 164,757,539 115,562,126 118,712,899
Defined Contribution Plan Costs - EPF and ETF 14,024,464 13,262,548 7,585,964 8,728,202
Defined Benefit Plan Costs - Retirement Benefit Obligation 6,994,232 7,151,165 4,527,149 4,753,767
211,718,666 185,171,252 127,675,239 132,194,868
Notes to the Financial Statements (Contd)
35Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
For the year ended 31st March 2013 2012 2013 2012Rs. Rs. Rs. Rs.
8. NET FINANCING COSTS
Finance Income
Interest on - Call Deposit 1,633,174 2,052,762 880,782 1,433,242
- Foreign Currency Accounts 189,146 1,194,706 135,029 1,115,322
- Fixed Deposits 13,037,230 853,656 8,558,320 935,708
- Repo Investments 4,155,251 66,912 4,155,251 -
19,014,801 4,168,036 13,729,382 3,484,272
Finance Costs
Interest on - Bank Loans 17,099,307 4,199,464 7,913,912 3,241,828
- Bank Overdraft 10,911,091 4,557,944 3,068,859 1,167,427
- Lease 62,204 20,429 - -
- Packing Credit Loans 9,129,841 1,675,023 9,055,591 1,162,659
- Other 526,262 - -
Exchange Loss 3,500,616 23,039,975 3,710,927 24,600,406
41,229,321 33,492,835 23,749,289 30,172,320
(22,214,520) (29,324,799) (10,019,907) (26,688,048)
9. TAXATION
Income Tax Charge for the Year (Note 9.1) 8,987,211 3,650,370 4,195,194 759,031
Under Provision in Respect of Previous Years 371,765 101,663 - -
Deferred Tax Provision/(Reversal) for the Year (Note 28) (8,179,226) (5,404,878) 2,083,775 (794,436)
1,179,750 (1,652,845) 6,278,969 (35,405)
9.1 Reconciliation Between Accounting Profit and Taxable Income
Profit Before Tax 190,870,352 336,241,009 236,800,047 315,144,662
Aggregate Disallowable Expenses 89,971,167 78,315,851 43,534,493 38,967,041
Aggregate Allowable Expenses (110,445,966) (36,477,530) (41,610,322) (24,689,527)
Aggregate Other Income (16,438,577) (6,743,504) (15,185,337) (2,710,826)
Aggregate Exempt Income (270,656) (859,975) (270,656) (773,445)
Adjusted Business Profit 153,686,320 370,475,851 223,268,225 325,937,905
Exempted Business Profit (223,268,225) (325,937,905) (223,268,225) (325,937,905)
Taxable Business Profit/( Loss) (69,581,905) 44,537,946 - -
Taxable Aggregate Other Income 18,315,020 3,397,247 14,982,837 2,710,826
Income Tax at 28% 5,764,563 1,992,387 4,195,194 759,031
Income Tax at 12% 2,148,993 712,396 - -
Income Tax at 10% 1,073,655 945,587 - -
8,987,211 3,650,370 4,195,194 759,031
Notes to the Financial Statements (Contd)
36 Renuka Agri Foods PLC | Annual Report 2013
9. TAXATION (Continued)
9.2 Income tax rates applicable to the company and subsidiaries
9.2.1 Company
In terms of the agreement with the Board of investment of Sri Lanka (BOI), business profit of the Company was exempted from income tax for a
period of 10 years from the date of commencement of its business, which came to an end in the year of assessment 2011/12. Subsequently the
said exemption period was extended for another two years of assessments ending 2013/14 by a supplementary agreement. After the expiration
of said tax exemption period, the Company will be liable for taxation at rate of 12%.
Dividend paid by Company out of exempt profits during the 12 year tax holiday period or within one year thereafter is exempted from tax. Other
Income is liable for income tax at the rate of 28%.
9.2.2 Subsidiaries
a) Renuka Teas (Ceylon) (Private) Limited
The Company's export profit is liable to income tax at a concessionary rate of 12%. However, local sales and other income is liable to income tax
at 28%.
b) Renuka Organics (Private) Limited
According to the agreements entered into with the Board of Investment of Sri Lanka, the Profit and Income of the Company were exempt from
income tax for a period of 5 Years. This tax holiday period expired on 31st March 1999.
From the Year of Assessments 2006/2007,under Section 16 of the Inland Revenue Act No.10 of 2006, the Company's Profit was exempt from
income tax for a period of five years. This tax holiday period expired on 31st March 2011. The Company is liable to income tax at 10% on profit
from Agriculture from the year of assessment 2011/2012.
Company's other income is liable for income tax at the rate of 28%.
c) Campbell Teas (Private) Limited
From the Year of Assessment 1999/2000, according to Section 52 of the Inland Revenue Act No. 10 of 2006, the Company's export profit is liable
to income tax at a concessionary rate of 12%. The Company's other income is liable to income tax at the rate of 28%.
d) Renuka Trading (Private) Limited
The Company is liable to income tax at the rate of 28%.
e) Ceylon Botanicals (Private) Limited
The Company is liable to income tax at the rate of 28%.
f) Ceylon Forestry (Private) Limited
In accordance with the Section 17 of the Board of Investment of Sri Lanka law No. 4 of 1978, the Company is entitled to the following exemptions/
benefits with regard to income tax:
(i) For a period of eight (08) years reckoned from the Year of Assessment as may be determined by the BOI, Sri Lanka. For the above purpose,
the year of assessment shall be reckoned from the year in which the Company commences to make profits or any year of assessment not
later than two (02) years reckoned from the date of commencement of commercial operations whichever year is earlier, as specified in a
certificate issued by the BOI, Sri lanka.
(ii) After the expiration of the aforesaid tax exemption period, referred to in subclause (i) above, the profits and income of the Company shall for
each year of assessment be charged at the rate of ten per centum (10%) for a period of two (2) years ("concessionary period") immediately
succeeding the last date of the tax exemption period during which the profits and income of the Company is exempted from the income tax.
(iii) After the expiration of the aforesaid concessionary period referred to in subclause (ii) above, the profits and income of the Company shall be
charged for any year of assessment at the rate of 20%.
However, other income would be liable to Income Tax @ 28% for the year.
Notes to the Financial Statements (Contd)
37Renuka Agri Foods PLC | Annual Report 2013
9. TAXATION (Continued)
g) Kandy Plantations Limited
According to the Agreement entered into with the Board of Investment of Sri Lanka, the Profits and Income of Kandy Plantations Limited were
exempt for a period of 5 years from the year of assessment in which the Enterprises commence to make profit (i.e. 2003/2004). Accordingly the
said tax holiday period was expired on 31st March 2008.
However, the profit from Agriculture of the Company continued to be exempt from income tax for further 3 years of assessments ending
2010/2011, under Section 16 of the Inland Revenue Act No. 10 of 2006. This tax holiday was expired on 31st March 2011. The Company is liable
to income tax at 10% on profit from Agriculture from the year 2011/2012.
The other income of the Company is liable to income tax at 28%. The profit from export sales is liable to income tax at 12%.
h) Richlife Diaries Limited
The profits and the income of the Company (Agricultural Income) is liable at the rate of 10% and the other income, interest income is liable to income tax at the rate of 28%.
i) Renuka Trading (Private) Limited
The Company is liable to income tax at the rate of 28%.
j) Renuka Developments Limited
The Company is liable to income tax at the rate of 28%.
10.1 Basic Earnings Per Share
The computation of the basic earnings per share is based on the profit after tax attributable to ordinary shareholders for the year divided by the
weighted average number of ordinary shares outstanding during the year and calculated as follows:
GROUP COMPANY2013 2012 2013 2012
Profit After Tax attributable to Ordinary Shareholders (Rs.) 200,000,582 316,443,340 230,521,078 315,180,067
Weighted Average number of Ordinary Shares 529,650,000 401,250,000 529,650,000 401,250,000
Basic Earnings per Share (Rs.) 0.37 0.79 0.43 0.79
10.2 Dividend Per Share
Dividend Declared and Paid During the Year (Rs.) 78,645,000 40,125,000 78,645,000 40,125,000
Weighted Average number of Ordinary Shares 529,650,000 401,250,000 529,650,000 401,250,000
Dividend per Share (Rs.) 0.14 0.10 0.14 0.10
Notes to the Financial Statements (Contd)
38 Renuka Agri Foods PLC | Annual Report 2013
11.
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Dis
posa
ls/T
rans
fers
-
-
-
-
-
-
-
(85
,807
) -
8
5,80
7 (
860,
000)
-
-
(86
0,00
0)
Bala
nce
as a
t 31
st M
arch
201
2 -
2
1,18
5,85
8 2
27,1
10,8
49
59,
092
13,
421,
110
10,
359,
372
103
,628
2
,915
,700
5
0,33
0,55
7 8
,292
,298
2
5,67
8,20
5 1
,150
,000
-
3
60,6
06,6
69
Bala
nce
as a
t 1s
t A
pril
2012
-
21,
185,
858
227
,110
,849
5
9,09
2 1
3,42
1,11
0 1
0,35
9,37
2 1
03,6
28
2,9
15,7
00
50,
330,
557
8,2
92,2
98
25,
678,
205
1,1
50,0
00
-
360
,606
,669
Dis
posa
l of
Subs
idia
ry -
-
(
3,04
6,97
2) -
(
413,
839)
(29
9,32
7) (
32,8
90)
(60
9,05
0) (
15,9
37,5
54)
(77
0,85
1) -
-
-
(
21,1
10,4
83)
Char
ge f
or t
he y
ear
-
9,5
83,1
04
45,
139,
134
30,
000
1,6
03,5
18
1,4
23,6
17
10,
369
633
,279
4
,131
,912
1
,588
,365
1
3,31
9,87
3 -
-
7
7,46
3,17
1
Dis
posa
ls d
urin
g th
e ye
ar -
-
-
-
(
392,
668)
-
-
-
-
(5,
800)
-
-
-
(39
8,46
8)
Bala
nce
as a
t 31
st M
arch
201
3 -
3
0,76
8,96
2 2
69,2
03,0
11
89,
092
14,
218,
121
11,
483,
662
81,
107
2,9
39,9
29
38,
524,
915
9,1
04,0
12
38,
998,
078
1,1
50,0
00
-
416
,560
,889
Wri
tten
Dow
n V
alue
As
at 3
1st
Mar
ch 2
013
430
,140
,450
30
6,91
2,37
9 5
17,7
22,2
22
773
,308
5
,443
,264
4
,836
,147
2
3,59
4 4
,867
,324
3
1,80
6,65
0 8
,551
,461
51
,042
,954
-
2
3,63
8,79
4 1
,385
,758
,547
As
at 3
1st
Mar
ch 2
012
159
,340
,900
3
01,0
56,4
80
455
,240
,570
8
03,3
08
5,1
63,0
19
4,8
02,2
59
102
,273
6
,617
,614
5
2,00
8,30
6 9
,178
,169
4
5,03
4,99
8 -
1
10,2
28,7
00
1,1
49,5
76,5
96
As
at 1
st A
pril
2011
56,
642,
660
116
,449
,663
2
04,1
79,2
10
-
5,5
82,8
73
4,6
45,5
93
122
,766
7
,645
,397
4
0,22
8,23
5 4
,716
,154
3
1,78
5,43
9 1
15,0
00
-
472
,112
,990
Notes to the Financial Statements (Contd)
39Renuka Agri Foods PLC | Annual Report 2013
11.
PR
OPE
RTY
, PLA
NT
AN
D E
QU
IPM
ENT
11.2
Com
pan
y
As
atFa
ctor
y B
uild
ings
Plan
t an
d M
ach
iner
yFu
rnit
ures
an
d Fi
ttin
gsEl
ectr
ical
In
stal
lati
on
Wor
ksh
op
Tool
sLa
bora
tory
Eq
uipm
ent
Fact
ory
Equi
pmen
tO
ffic
e Eq
uipm
ent
Mot
or
Veh
icle
sCa
pita
l Wor
k In
Pro
gres
sTo
tal
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Cost
Bala
nce
as a
t 1s
t A
pril
2011
88,
920,
547
312
,791
,550
1
3,54
9,33
9 1
2,63
5,04
9 1
04,7
01
1,8
98,7
49
10,
251,
091
2,7
31,1
70
6,4
12,6
44
-
449
,294
,840
Add
ition
s du
ring
the
year
-
86,
755,
090
307
,382
-
-
-
1
,437
,659
1
,456
,005
1
9,53
0,90
1 1
09,8
18,7
00
219
,305
,737
Bala
nce
as a
t 31
st M
arch
201
2 8
8,92
0,54
7 3
99,5
46,6
40
13,
856,
721
12,
635,
049
104
,701
1
,898
,749
1
1,68
8,75
0 4
,187
,175
2
5,94
3,54
5 1
09,8
18,7
00
668
,600
,577
Bala
nce
as a
t 1s
t A
pril
2012
88,
920,
547
399
,546
,640
1
3,85
6,72
1 1
2,63
5,04
9 1
04,7
01
1,8
98,7
49
11,
688,
750
4,1
87,1
75
25,
943,
545
109
,818
,700
6
68,6
00,5
77
Add
ition
s du
ring
the
year
10,
457,
768
28,
708,
822
1,2
72,8
10
2,0
79,1
83
-
130
,980
5
,695
,905
1
,417
,202
9
,891
,796
5
25,5
89
60,
180,
055
Tran
sfer
s du
ring
the
year
4,2
44,2
88
70,
554,
624
1,4
70,4
64
-
-
-
8,6
13,9
67
-
2,2
32,1
52
(87
,115
,495
) -
Bala
nce
as a
t 31
st M
arch
201
3 1
03,6
22,6
03
498
,810
,086
1
6,59
9,99
5 1
4,71
4,23
2 1
04,7
01
2,0
29,7
29
25,
998,
622
5,6
04,3
77
38,
067,
493
23,
228,
794
728
,780
,632
Acc
umul
ated
Dep
reci
atio
n
Bala
nce
as a
t 1s
t A
pril
2011
13,
242,
747
131
,810
,040
9
,101
,469
8
,703
,235
6
0,36
5 1
,351
,407
5
,883
,871
7
30,1
35
466
,913
-
1
71,3
50,1
82
Char
ge f
or t
he y
ear
2,2
43,2
80
22,
344,
345
1,3
57,4
89
1,2
63,1
51
10,
373
150
,557
1
,063
,365
3
10,1
48
1,3
82,6
90
-
30,
125,
398
Bala
nce
as a
t 31
st M
arch
201
2 1
5,48
6,02
7 1
54,1
54,3
85
10,
458,
958
9,9
66,3
86
70,
738
1,5
01,9
64
6,9
47,2
36
1,0
40,2
83
1,8
49,6
03
-
201
,475
,580
Bala
nce
as a
t 1s
t A
pril
2012
15,
486,
027
154
,154
,385
1
0,45
8,95
8 9
,966
,386
7
0,73
8 1
,501
,964
6
,947
,236
1
,040
,283
1
,849
,603
-
2
01,4
75,5
80
Char
ge f
or t
he y
ear
2,3
07,5
45
25,
059,
492
1,4
06,0
59
1,2
63,0
59
10,
369
156
,031
1
,499
,910
4
74,8
54
3,6
36,3
43
- 3
5,81
3,66
2
Bala
nce
as a
t 31
st M
arch
201
3 1
7,79
3,57
2 1
79,2
13,8
77
11,
865,
017
11,
229,
445
81,
107
1,6
57,9
95
8,4
47,1
46
1,5
15,1
37
5,4
85,9
46
-
237
,289
,242
Wri
tten
Dow
n V
alue
As
at 3
1st
Mar
ch 2
013
85,
829,
031
319
,596
,209
4
,734
,978
3
,484
,787
2
3,59
4 3
71,7
34
17,
551,
476
4,0
89,2
40
32,
581,
547
23,
228,
794
491
,491
,390
As
at 3
1st
Mar
ch 2
012
73,
434,
520
245
,392
,255
3
,397
,763
2
,668
,663
3
3,96
3 3
96,7
85
4,7
41,5
14
3,1
46,8
92
24,
093,
942
109
,818
,700
4
67,1
24,9
97
As
at 1
st A
pril
2011
75,
677,
800
180
,981
,510
4
,447
,870
3
,931
,814
4
4,33
6 5
47,3
42
4,3
67,2
20
2,0
01,0
35
5,9
45,7
31
-
277
,944
,658
Notes to the Financial Statements (Contd)
40 Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
12. BIOLOGICAL ASSETS
Immature Plantation
Balance as at the beginning 28,098,711 5,633,879 5,633,879 - - -
Additions During the Year 279,158 441,705 - - - -
Gain on Fair Value During the Year 1,135,379 22,023,127 - - - -
Balance at the end 29,513,248 28,098,711 5,633,879 - - -
Biological assets as at 31st March 2013 consist of investment made in immature coconuts plants by the subsidiary, Ceylon Forestry (Private)
Limited. The fair valuation of these assets had not been carried out as at 1st April 2011 as those assets were not mature enough in order for
valuation being carried out reliably.
In arriving at the valuation of the biological assets for the year ended 31st March 2012 and 2013, subsidiary has obtained the professional services
of Messrs K.T.D Tissera, accredited chartered valuer (UK).
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
13. INTANGIBLE ASSETS
Balance at the beginning 10,918,522 - - 10,918,522 - -
Additions during the year - 13,648,153 - - 13,648,153 -
Amortization during the year (2,742,964) (2,729,631) - (2,742,964) (2,729,631) -
Balance at the end 8,175,558 10,918,522 - 8,175,558 10,918,522 -
As stated in note 3.5, all computer software costs incurred by the company which are not integrally related to associated hardware have been
classified as intangible assets.
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
14. IMMOVABLE ESTATE ASSETS ON LEASE
Balance as at the beginning 57,749,988 60,499,992 82,500,000 - - -
Amortization during the year (2,750,004) (2,750,004) (22,000,008) - - -
Balance at the end 54,999,984 57,749,988 60,499,992 - - -
Kandy Plantations Limited - Immovable Estate Assets on Lease
Leases have been executed for 3 estates (Primarily coconut) comprising 33 contiguous allotments of Land called and known as "Giriulla Estate"
by Mr. L.H. Croos Dabrera. This contiguous allotments of Land comprise a total extent of 640A-3R-32P. This lease has been executed for a period of
30 years under 2 separate lease agreements. The first lease agreement relates to 10 years period from 1st April 2003 to 31st March 2013 and the
second lease agreement relates to the next 20 years commencing from 1st April 2013 and ending on 31st March 2033.
A valuation report dated 11th October 2003 prepared by Mr. Leon M.P. Perera Dip.In.Val. F.I.V. indicates the method of ascertaining the maximum
amount payable to the owner of the Estate for the 30 years period which was Rs. 88,000,000/-. The agreed amount payable of Rs. 82.5 Mn. had
been capitalised on the basis that it represents the value of immovable assets taken over by the Company.
GROUP COMPANY31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011
Rs. Rs. Rs. Rs. Rs. Rs.
15. PREMIUM PAID FOR LEASEHOLD PREMISES
Balance at the beginning 2,624,602 2,693,672 2,762,742 2,624,602 2,693,672 2,762,742
Amortization during the year (69,070) (69,070) (69,070) (69,070) (69,070) (69,070)
Balance at the end 2,555,532 2,624,602 2,693,672 2,555,532 2,624,602 2,693,672
This represents the premium paid to the Board of Investment of Sri Lanka for the acquisition of leasehold land in 2006 and it is amortized over the
leasehold period of 50 years with effect from the year 2006.
Notes to the Financial Statements (Contd)
41Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
16. INVESTMENT PROPERTY
Balance at the Beginning 55,089,160 46,274,894 - - - -
Transfer/Additions During the Year - 8,814,266 46,274,894 - - -
Additions due to the Acquisition of Subsidiary 228,406,161 - -
Balance at the end 283,495,321 55,089,160 46,274,894 - - -
Renuka Trading (Private) Limited
The investment properties of the group include land and buildings held by Renuka Trading (Private) Limited. The Property has been valued by
Professional Valuer, Mr .Leon M.P. Perera D.I.V on 30th March 2012. The Property has been valued based on the market value of the adjoining
Properties. The Directors are of the opinion that the market value of Rs 110Mn stated in the valuation report as at 31st March 2012 has not changed
significantly during the year 2012/2013 and valuers opinion's has been obtained with respect to this as at 31st March 2013.
Renuka Development Limited
The investment properties of the group consist of investment property held by Renuka Developments Limited. The Property has been valued by
Professional Valuer, Mr. M.P. Perera D.I.V on 31st March 2012. The Property has been valued based on the market value of the lands in that areas.
The Directors are of the opinion that the market value of Rs.218,966,788 as at 31st March 2012 has not changed significantly during the year and
the valuers opinion has been obtained with respect to this as at 31st March 2013.
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
17. INVESTMENT IN SUBSIDIARIES
Investment in Shares
Renuka Products (Private) Limited - - - - 18,750,000 -
Renuka Organics (Private) Limited - - - 50,000,000 50,000,000 50,000,000
Renuka Teas (Ceylon) (Private) Limited - - - 96,875,000 96,875,000 96,875,000
Richlife Diaries Limited - - - 605,000,000 505,000,000 -
751,875,000 670,625,000 146,875,000
Investment in which Debentures
Renuka Organics (Private) Limited - - - 350,000,000 - -
Richlife Diaries Limited - - - 252,000,000 - -
602,000,000 - -
1,353,875,000 670,625,000 146,875,000
The Company has invested in debentures of the following Companies.
Renuka Organics (Private) Limited
The Company invested in 2,500,000 convertible debentures which has a par value of Rs.140 per share in Renuka Organics (Private) Limited during
the year. These debentures are convertible to ordinary shares, at the option of the issuer within a period of 5 years from the date of issue. The
convertible debentures were issued on 1st March 2013.
Richlife Diaries Limited
The Company invested in 18,000,000 convertible debentures which has a par value of Rs.14 per share in Richlife Diaries Limited during the year.
These debentures are convertible to ordinary shares, at the option of the issuer within a period of 5 years from the date of issue. The convertible
debentures were issued on 2nd February 2013.
Notes to the Financial Statements (Contd)
42 Renuka Agri Foods PLC | Annual Report 2013
17. Investment in Subsidiaries (Continued)
% Holding No. of SharesAs at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011
Renuka Products (Private) Limited (Note 17.2) - 37.5% - - 150,000 -
Renuka Organics (Private) Limited 100% 100% 100% 500,000 500,000 500,000
Renuka Teas (Ceylon) (Private) Limited 100% 100% 100% 2,500,000 2,500,000 2,500,000
Richlife Diaries Limited(Note 17.1)
100% 76% - 20,290,000 15,420,400 -
17.1 Acquisition of Non-Controlling Interests
During the year, the Company has acquired additional 4,869,600 shares in Richlife Dairies Limited from the non-controlling interests for a
consideration of Rs.100 Mn increasing its ownership from 76% to 100%.
17.2 Disposal of Subsidiary
The Company disposed its holding in Renuka Products (Private) Limited for Rs.18.75 Mn during the year.
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
18. GOODWILL ON ACQUISITION
At the Beginning of the Year 265,553,003 - - - - -
Additions During the Year (Note 35) 1,872,251 265,553,003 - - - -
At the End of the Year 267,425,254 265,553,003 - - - -
18.1 Goodwill on Acquisition Consist of Following Companies
Richlife Diaries Limited 265,553,003 265,553,003 - - - -
Renuka Developments Limited 1,872,251 - - - - -
267,425,254 265,553,003 - - - -
19. INVENTORIES
Raw Materials and Consumables 45,957,110 39,851,984 33,616,941 24,641,947 24,087,664 19,453,485
Finished Goods 136,936,871 136,088,733 134,888,616 109,695,026 116,388,929 126,845,275
Packing Materials and Consumables 119,538,698 81,765,231 73,831,503 55,164,529 48,288,457 58,024,697
Machinery Spare Parts 16,918,565 9,631,321 2,210,376 16,591,540 9,051,260 2,169,844
Goods in Transit 3,257,284 11,338,625 4,491,580 3,836,064 11,338,625 4,485,866
Work in progress 40,451,247 40,141,497 4,886,914 29,219,604 33,260,572 -
363,059,775 318,817,391 253,925,930 239,148,710 242,415,507 210,979,167
Less : Provision for the Obsolete Inventories (Note 19.1) (7,029,834) (1,089,370) (3,321,946) (7,029,834) (1,089,370) (3,321,946)
356,029,941 317,728,021 250,603,984 232,118,876 241,326,137 207,657,221
19.1 Provision for Obsolete Inventories
Balance at the Beginning 1,089,370 3,321,946 1,777,849 1,089,370 3,321,946 1,777,849
Provision Made During the Year 5,940,464 - 1,544,097 5,940,464 - 1,544,097
Write off During the Year - (2,232,576) - - (2,232,576) -
Balance at the end 7,029,834 1,089,370 3,321,946 7,029,834 1,089,370 3,321,946
Notes to the Financial Statements (Contd)
43Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
20. TRADE AND OTHER RECEIVABLES
Trade Debtors 266,960,154 115,671,877 84,038,702 132,033,599 42,973,992 74,711,745
Staff Loans and Advances 1,584,102 2,320,336 177,970 1,555,197 2,297,836 145,871
Other Receivables 2,941,644 15,663,877 15,092,182 296,437 2,213,296 835,603
Pre-Payments 2,680,269 8,367,505 167,200 1,738,071 1,064,743 -
Deposit and Advances 88,727,874 82,392,071 12,318,503 85,440,923 82,257,071 11,780,152
Sundry Debtors 1,033,083 255,334 1,099,580 - - -
363,927,126 224,671,000 112,894,137 221,064,227 130,806,938 87,473,371
Provision for Impairment Losses (Note 20.1) (7,357,090) (7,889,011) (600,000) - - -
356,570,036 216,781,989 112,294,137 221,064,227 130,806,938 87,473,371
20.1 Provision for Impairment Losses
Balance at the Beginning 7,889,011 600,000 - - - -
Acquisition of Subsidiary - 13,706,373 - - - -
Provision Made During the Year 121,678 7,297,436 600,000 - - -
Write off During the Year (653,599) (13,714,798) - - - -
Balance at the year end 7,357,090 7,889,011 600,000 - - -
21. TAX RECOVERABLES
VAT Recoverable 6,270,720 5,057,546 8,220,520 - - 1,730,636
NBT Recoverable 1,257,893 2,341,139 1,210,876 1,257,893 2,348,024 1,210,876
Income Tax 4,446,061 3,957,791 429,661 - - -
Notional Tax 415,525 - - 415,525 - -
WHT Recoverable 88,077 582,832 325,982 88,077 582,832 325,982
ESC Recoverable 12,610,754 6,453,851 9,144,617 12,042,463 5,729,994 1,157,625
25,089,030 18,393,159 19,331,656 13,803,958 8,660,850 4,425,119
22. AMOUNTS DUE FROM RELATED COMPANIES
Campbell Teas (Private) Limited - - - - 1,652,708 1,652,709
Renuka Enterprises (Private) Limited - 7,800,000 1,800,000 - 7,800,000 1,800,000
Renuka Agro Exports Limited - 285,051 6,158,359 - - -
Kandy Plantation Limited - - - 3,865,963 737,003 539,155
Renuka Shipping and Travel (Private) Limited - 5,904,500 2,054,500 - 5,900,000 2,050,000
Renuka Organics (Private) Limited - - - 14,747,831 13,068,050 20,981,940
Renuka Shaw Wallace PLC 207,000 - 17,532,014 207,000 - 17,532,014
Renuka Teas (Ceylon) (Private) Limited - - - 53,608,054 57,467,882 45,920,821
Shaw Wallace Ceylon Limited - 27,138,648 - - - -
Renuka Holdings Limited 357,000,000 211,140 2,500,000 - 211,140 2,500,000
Renuka Products (Private) Limited - - - - 25,042,120 29,571,358
Richlife Diaries Limited - - - - 50,581,373 -
Shaw Wallace Food Services (Private) Limited 19,347,189 15,514,865 - 19,347,189 15,514,865 -
376,554,189 56,854,204 30,044,873 91,776,037 177,975,141 122,547,997
Notes to the Financial Statements (Contd)
44 Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
23. CASH AND CASH EQUIVALENTS
Short-Term Deposits 8,940,169 15,137,510 119,528,683 715,768 3,354,356 106,033,894
Call Deposits 29,773,925 15,813,684 9,016,763 10,413,327 2,619,900 6,075,082
Cash at Bank and in Hand 70,902,404 46,237,949 30,224,694 19,048,474 34,391,256 17,355,923
109,616,498 77,189,143 158,770,140 30,177,569 40,365,512 129,464,899
Bank Overdraft (147,223,512) (107,639,607) (14,383,432) (45,773,869) (39,935,575) (8,229,354)
Cash and Cash Equivalent for Cash Flow Purpose (37,607,014) (30,450,464) 144,386,708 (15,596,300) 429,937 121,235,545
24. STATED CAPITAL
Ordinary Shares
Balance as at the beginning (401,250,000 shares) 552,452,950 552,452,950 552,452,950 552,452,950 552,452,950 552,452,950
Issued During the year (160,500,000 shares) 642,000,000 - - 642,000,000 - -
Balance at the year end (561,750,000 shares) 1,194,452,950 552,452,950 552,452,950 1,194,452,950 552,452,950 552,452,950
25. RETIREMENT BENEFIT OBLIGATIONS
Balance at the beginning of the year 23,514,010 10,749,268 5,272,026 10,893,054 6,358,287 5,272,026
Adjustment due to Acquisition/ (Disposal) of Subsidiary (427,303) 6,877,837 3,845,681 - - -
Provision Made During the Year 6,994,232 7,151,165 2,659,936 4,527,149 4,753,767 1,418,517
Payment During the Year (4,052,731) (1,264,260) (1,028,375) (1,761,800) (219,000) (332,256)
Balance at the year end 26,028,208 23,514,010 10,749,268 13,658,403 10,893,054 6,358,287
An actuarial valuation of retirement benefit obligation was carried out as at 31st March 2013 by Mr. M. Poopalanathan, Actuarial and Management
Consultants (Private) Limited. The valuation methods used by the actuary to value the benefit is the "Projected unit credit method", the method
recommended by the Sri Lanka Accounting Standards No 19 ( LKAS 19) "Employee Benefits". The principal assumptions used were as follows and
those had been uniformly applied to all the companies in the group.
1. Retirement age 55
2. Discount rate 11%
3. Salary increment rate 10%
4. Demographic Assumption A 67/70 Mortality Table
25.1 Movement in the Present Value of the Retirement Benefit Obligations
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
Balance at the Beginning of the Year 23,514,010 10,749,268 5,272,026 10,893,054 6,358,287 5,272,026
Acquisition/(Disposal) of Subsidiary (427,303) 6,877,837 3,845,681 - - -
Interest Cost for the Year 2,289,564 926,693 754,696 974,016 762,994 632,643
Current Service Cost for the Year 3,975,822 1,970,691 1,203,568 2,000,285 1,729,557 1,069,615
Provision Made During the Year - 1,275,319 927,950 - - -
Payments Made During the Year (4,052,731) (1,264,260) (1,028,375) (1,761,800) (219,000) (332,256)
Actuarial (Gain)/Loss for the Year 728,846 2,978,462 (226,278) 1,552,848 2,261,216 (283,741)
Balance at the Year End 26,028,208 23,514,010 10,749,268 13,658,403 10,893,054 6,358,287
Notes to the Financial Statements (Contd)
45Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
26. LOANS AND BORROWINGS
Balance at the Beginning of the Year 340,263,865 31,316,177 - 315,075,477 16,309,007 19,250,000
Acquisition of Subsidiary - 29,600,742 - - - -
Borrowings During the Year 330,217,933 306,398,449 33,292,632 234,169,362 301,974,826 -
Repayment During the Year (399,304,117) (27,051,503) (1,976,455) (330,961,999) (3,208,356) (2,940,993)
Balance at the Year End 271,177,681 340,263,865 31,316,177 218,282,840 315,075,477 16,309,007
26.1 Repayment Due within One Year 109,924,184 222,699,677 18,219,861 87,783,573 207,019,693 3,208,356
26.2 Repayment Due After One Year 161,253,497 117,564,188 13,096,316 130,499,267 108,055,784 13,100,651
271,177,681 340,263,865 31,316,177 218,282,840 315,075,477 16,309,007
26.3 Details of Loans and Borrowings of the Company
Nameof Bank
FacilityObtained
OutstandingBalance
InterestRate
RepaymentTerms
AssetsPledged
Rs.
DFCC Bank Boiler Loan 9,830,876 AWPR +6.5% p.a To be paid in 72 installment with
a grace period of 24 months
starting from July 2008 a monthly
installment of Rs. 267,363/-
Primary Mortgage over leasehold
rights of an allotted plot of land
depicted on lot no.28, Yatadawala
HSBC Limited Packing Credit Loan
25,822,783 1 or 3 months
LIBOR+ 3.5% p.a
Repayable on Demand Corporate guarantee of USD
1,000,000/- from Renuka Shaw
Wallace PLC and LKR 25,000,000/-
from Richlife Dairies Ltd.
National Development Bank PLC
Medium Term Loan
124,191,524 1 year LIBOR+ 3.75% p.a
24 equal monthly installments of USD 40,581 each
(a) Primary mortgage over stock
and book debt for USD 740,000/-
Packing Credit Loan
58,437,657 Repayable on Demand (b) Agreement to mortgage over
stocks and book debts for USD
1,180,000/-
(c) Corporate guarantee from
Renuka Agro Exports Ltd. for USD
940,000/-
218,282,840
Notes to the Financial Statements (Contd)
46 Renuka Agri Foods PLC | Annual Report 2013
26.4 Details of Loans and Borrowings of the Group
Nameof Bank
FacilityObtained
OutstandingBalance
InterestRate
RepaymentTerms
AssetsPledged
Rs.
DFCC Bank Boiler Loan 9,830,876 AWPR +6.5% p.a To be paid in 72 installment with
a grace period of 24 months
starting from July 2008 a monthly
installment of Rs. 267,363/-
Primary Mortgage over leasehold
rights of an allotted plot of land
depicted on lot no.28, Yatadawala
DFCC Bank Term Loan 35,000,000 AWPR +3% p.a To be paid in 48 installment
with a grace period of 12
a monthly installment of
Rs.729,167/-
Corporate Guarantee
Import Loan Facility
782,438 AWPR +2% p.a 3 Months Corporate Guarantee
HSBC Limited Packing Credit Loan
25,822,783 1 or 3 months
LIBOR+ 3.5% p.a
Repayable on Demand Corporate guarantee of USD
1,000,000/- from Renuka Shaw
Wallace PLC and LKR 25,000,000/-
from Richlife Dairies Ltd
National Development Bank PLC
Medium Term Loan
124,191,524 1 year LIBOR+ 3.75% p.a
24 equal monthly installments of USD 40,625 each
(a) Primary mortgage over stock
and book debt for USD 740,000/-
Packing Credit Loan
58,437,657 Repayable on Demand (b) Agreement to mortgage over
stocks and book debts for USD
1,180,000/-
(c) Corporate guarantee from
Renuka Agro Exports Ltd. for USD
940,000/-
Bank of Ceylon Long Term Loan 9,508,403 6.5% p.a Repayable over 96 equal monthly installments
Property held at, Pirivena Road,
Moligoda, Wadduwa for Rs.426
Mn.
Import Loan 7,604,000 16.5% p.a 3 Months
271,177,681
Notes to the Financial Statements (Contd)
47Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
27. FINANCE LEASE OBLIGATION
Balance as at the Beginning of the year 67,759,864 69,128,079 71,347,643 - - -
Addition Due to Acquisition of Subsidiary - 798,045 -
Repayments During the Year (2,217,104) (2,166,260) (2,219,564) - - -
65,542,760 67,759,864 69,128,079
Interest in Suspense (56,694) 110,096 - - - -
Balance as at the End of the Year 65,486,066 67,649,768 69,128,079 - - -
Balance Payable as at year end 65,486,066 67,649,768 69,128,079 - - -
Lease Rental Payable within One Year (2,181,258) (2,163,702) (2,128,079) - - -
Lease Rental Payable After One Year 63,304,808 65,486,066 67,000,000 - - -
27.1 Analysis by Company
Kandy Plantations Limited (Note 27.2) 65,000,000 67,000,000 69,128,079 - - -
Richlife Dairies Limited (Note 27.3) 486,066 649,768 - - - -
65,486,066 67,649,768 69,128,079 - - -
27.2 Kandy Plantations Limited
Land
Balance as at the beginning of the Year 67,000,000 69,000,000 71,000,000 - - -
Repayments During the Year (2,000,000) (2,000,000) (2,000,000) - - -
Balance as at the Year End 65,000,000 67,000,000 69,000,000 - - -
Lease Rental Payable within One Year (2,000,000) (2,000,000) (2,000,000) - - -
Lease Rental Payable After One Year 63,000,000 65,000,000 67,000,000 - - -
Motor Vehicle
Balance as at the beginning of the Year - 128,079 347,643 - - -
Repayments During the Year - (128,079) (219,564) - - -
Balance as at the year end - - 128,079 - - -
Lease Rental Payable within One Year - - 128,079 - - -
Lease Rental Payable After One Year - - - - - -
27.3 Richlife Dairies Limited
Plant and Machinery
Balance at the Beginning 759,864 - -
Additions Due to Acquisition of Subsidiary - 798,045 -
Repayments During the Year (217,104) (38,181) -
542,760 759,864 -
Interest in Suspense (56,694) (110,096)
486,066 649,768
Lease Rental Payable within One Year 181,258 163,702 -
Lease Rental Payable After One Year 304,808 486,066 -
Notes to the Financial Statements (Contd)
48 Renuka Agri Foods PLC | Annual Report 2013
GROUP COMPANY
As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.
28. Deferred Taxation
Balance at the beginning 48,928,708 16,575,254 20,487,969 16,089,215 16,883,651 18,767,145
Addition Due to Acquisition of Subsidiary - 37,758,332 - - - -
Provision Made/(Reversed) During the Year (8,179,226) (5,404,878) (1,883,494) 2,083,775 (794,436) (1,883,494)
Balance at the Year End (Note 28.1) 40,749,482 48,928,708 18,604,475 18,172,990 16,089,215 16,883,651
28.1 Provision for Deferred Taxation is attributable to the followings.
2013 2012 2011
Temporary Differences
Tax Effects
Temporary Differences
Tax Effects
Temporary Differences
Tax Effects
Rs. Rs. Rs. Rs. Rs. Rs.
a. Company
On Property, Plant and Equipment 165,100,018 19,812,000 144,969,842 17,396,381 147,055,381 17,646,645
On Retirement Benefit Obligation (13,658,403) (1,639,010) (10,893,054) (1,307,166) (6,358,287) (762,994)
151,441,615 18,172,990 134,076,788 16,089,215 140,697,094 16,883,651
b. Group
On Property, Plant and Equipment 144,117,512 58,728,934 545,772,700 64,569,244 147,055,381 19,367,469
On Accumulated Tax Losses (53,877,014) (15,085,564) (109,740,817) (13,168,898) - -
On Retirement Benefit Obligation (26,028,208) (2,893,888) (23,514,010) (2,471,638) (6,358,287) (762,994)
64,212,290 40,749,482 412,517,873 48,928,708 140,697,094 18,604,475
GROUP COMPANY 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011
Rs. Rs. Rs. Rs. Rs. Rs.
29. TRADE AND OTHER PAYABLES
Trade Creditors 110,576,294 79,905,145 43,115,600 64,756,368 41,989,121 36,189,405
Accrued Expenses 76,496,354 13,268,969 13,431,606 11,858,125 9,154,441 10,932,477
Packing Material Rebate (Note 29.1) - 46,064,355 - - - -
Other Payables 118,321,949 172,468,718 9,321,034 110,632,487 111,732,049 3,646,035
305,394,597 311,707,187 65,868,240 187,246,980 162,875,611 50,767,917
29.1 This balance represent a packing material rebate to be granted by Tetra Pak South East Asia (Private) Limited to the Company on timely settlement
of overdue amount on Capital Equipment payable to Tetra Pak South East Asia (Private) Limited by 31st March 2012. The Company has fully granted
above rebate during current financial year and settled off against its purchases made from Tetra Pak Asia (Private) Limited. This benefit recognized
under other income in financial statements.
GROUP COMPANY 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011
Rs. Rs. Rs. Rs. Rs. Rs.
30. AMOUNTS DUE TO RELATED COMPANIES
Renuka Group Limited - - 5,000 - - 5,000
Shaw Wallace Food Services Limited - 3,398,109 - - - -
Renuka Shaw Wallace PLC - 44,000,188 2,788,208 - 44,000,188 -
Shaw Wallace Ceylon Limited - 1,417,503 - - 1,417,504 -
Renuka Shipping & Travel (Private) Limited - 4,800 4,800 - - -
Richlife Dairies Limited - - - 14,951,519 - -
Renuka Agro Exports Limited 3,420,232 13,494,863 4,369,044 3,420,232 7,357,665 3,444,314
3,420,232 62,315,463 7,167,052 18,371,751 52,775,357 3,449,314
Notes to the Financial Statements (Contd)
49Renuka Agri Foods PLC | Annual Report 2013
31.
REL
ATE
D P
AR
TY D
ISCL
OSU
RES
31.1
Tran
sact
ion
s w
ith
Rel
ated
Com
pan
ies
Nam
e of
th
e Co
mpa
ny
Nat
ure
of
Rel
atio
nsh
ipN
ame
of t
he
Com
mon
Dir
ecto
r/s
Nat
ure
ofTr
ansa
ctio
ns
Am
oun
tsR
ecei
ved/
(Pai
d)B
alan
ce a
s at
31s
t M
arch
Due
fro
m/(
to)
2013
2012
2013
2012
Rs.
Rs.
Rs.
Rs.
Renu
ka O
rgan
ics
(Pri
vate
) Li
mite
dSu
bsid
iary
Dr.
S. R
. Raj
iyah
Fund
Rec
eive
d 4
10,0
00,0
00
-
14,
747,
831
13,
068,
050
Mrs
. I. R
. Raj
iyah
Fund
Tra
nsfe
rs (
407,
500,
000)
8,8
27,7
60
Mr.
S. V
. Raj
iyah
Raw
Mat
eria
l Loa
n -
Mr.
S. V
asan
tha
Kum
ara
Bills
Rec
eive
d (
820,
219)
913
,867
Inve
stm
ent
in D
eben
ture
350
,000
,000
-
Renu
ka S
haw
Wal
lace
PL
CPa
rent
Dr.
S. R
. Raj
iyah
Fund
Tra
nsfe
rs 4
4,20
7,18
8 6
1,53
2,20
0 2
07,0
00
(44
,000
,188
)
Mrs
. I. R
. Raj
iyah
Mr.
S. V
. Raj
iyah
Mr.
S. V
asan
tha
Kum
ara
Mr.
L. M
. Abe
ywic
kram
a
Mr.
C. J
. De.
S. A
mar
atun
ga
Mr.
P. C
. K. A
beyk
oon
Renu
ka A
gro
Expo
rts
Lim
ited
Aff
iliat
eD
r.S.
R.Ra
jiyah
Fund
Tra
nsfe
rs 4
5,36
6,52
2 2
1,66
6,36
0 (
3,42
0,23
2) (
7,35
7,66
5)
Mrs
.I.R.
Rajiy
ahBi
lls R
ecei
ved
(43
,710
,930
) 3
6,63
8,38
0
Mr.
S.V.
Rajiy
ahPa
ckin
g M
ater
ial L
oan
617
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8
18,7
97
Raw
Mat
eria
l Loa
n 1
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1
0,23
9,87
3
Renu
ka P
rodu
cts
(Priv
ate)
Lim
ited
Subs
idia
ryD
r.S.
R.Ra
jiyah
Bills
Rec
eive
d -
1
,711
,066
-
2
5,04
2,12
0
Mrs
.I.R.
Rajiy
ahFu
nd T
rans
fers
(25
,042
,120
) 6
,240
,304
Mr.
S.V.
Rajiy
ahPa
ckin
g M
ater
ial L
oan
-
-
Acq
uisi
tion
of S
ubsi
diar
y -
18
,500
,000
Notes to the Financial Statements (Contd)
50 Renuka Agri Foods PLC | Annual Report 2013
31.1
Tran
sact
ion
s w
ith
Rel
ated
Com
pan
ies
(Con
tin
ued)
Nam
e of
th
e Co
mpa
ny
Nat
ure
of
Rel
atio
nsh
ipN
ame
of t
he
Com
mon
Dir
ecto
r/s
Nat
ure
ofTr
ansa
ctio
ns
Am
oun
tsR
ecei
ved/
(Pai
d)B
alan
ce a
s at
31s
t M
arch
Due
fro
m/(
to)
2013
2012
2013
2012
Rs.
Rs.
Rs.
Rs.
Kand
y Pl
anta
tions
Lim
ited
Sub
Subs
idia
ryD
r. S
.R. R
ajiy
ahFu
nd T
rans
fers
185
,000
3
2,65
3,31
4 3
,865
,963
7
37,0
03
Mrs
. I.R
. Raj
iyah
Tran
sfer
of
Coco
nuts
(1,
697,
501)
(37
,706
,055
)
Mr.
S.V
. Raj
iyah
Pack
ing
Mat
eria
l Loa
n 1
7,46
1 8
,105
Mr.
W. R
ajap
aksh
eTr
ansf
er o
f Ke
rnel
20,
934,
793
14,
791,
777
Paym
ent
for
Nut
s 3
,993
,124
-
Kern
el f
or C
opra
- S
undr
y Sa
le 8
,096
,230
-
Tran
sfer
Exp
ense
(3,
325,
412)
-
Bills
Rec
eive
d (
25,0
74,7
35)
(9,
549,
294)
Renu
ka T
eas
(Cey
lon)
(P
riva
te)
Lim
ited
Subs
idia
ryD
r.S.
R.Ra
jiyah
Fund
Tra
nsfe
rs (
6,00
0,00
0) 1
7,60
0,00
0 5
3,60
8,05
4 5
7,46
7,88
2
Mrs
.I.R.
Rajiy
ahFu
nd R
ecei
ved
1,9
00,0
00
-
Mr.
S.V.
Rajiy
ahPa
ckin
g M
ater
ial L
oan
(14
3,14
3) 4
51,0
97
Bills
Rec
eive
d 3
83,3
15
5,6
01,8
43
Cam
pbel
l Tea
s (P
rivat
e) L
imite
dSu
b Su
bsid
iary
Dr.
S.R.
Rajiy
ahFu
nd T
rans
fers
(1,
652,
708)
-
-
1,6
52,7
08
Mrs
.I.R.
Rajiy
ah
Mr.
S.V.
Rajiy
ah
Renu
ka S
hipp
ing
and
Trav
el (
Priv
ate)
Lim
ited
Aff
iliat
eD
r.S.
R.Ra
jiyah
Fund
Rec
eive
d/Tr
ansf
ers
(5,
900,
000)
3,8
50,0
00
-
5,9
00,0
00
Mrs
.I.R.
Rajiy
ah
Mr.
S.V.
Rajiy
ah
Renu
ka E
nter
pris
es
(Pri
vate
) Li
mite
dA
ffili
ate
Dr.
S.R.
Rajiy
ahFu
nd T
rans
fers
(7,
800,
000)
6,0
00,0
00
-
7,8
00,0
00
Mrs
.I.R.
Rajiy
ah
Mr.
S.V.
Rajiy
ah
Notes to the Financial Statements (Contd)
51Renuka Agri Foods PLC | Annual Report 2013
31.1
Tran
sact
ion
s w
ith
Rel
ated
Com
pan
ies
(Con
tin
ued)
Nam
e of
th
e Co
mpa
ny
Nat
ure
of
Rel
atio
nsh
ipN
ame
of t
he
Com
mon
Dir
ecto
r/s
Nat
ure
ofTr
ansa
ctio
ns
Am
oun
tsR
ecei
ved/
(Pai
d)B
alan
ce a
s at
31s
t M
arch
Due
fro
m/(
to)
2013
2012
2013
2012
Rs.
Rs.
Rs.
Rs.
Renu
ka H
oldi
ngs
PLC
Aff
iliat
eD
r.S.
R.Ra
jiyah
Fund
Tra
nsfe
rs (
211,
140)
2,2
88,8
60
-
211
,140
Mrs
.I.R.
Rajiy
ah
Mr.
S.V.
Rajiy
ah
Mr.
L. M
. Abe
ywic
kram
a
Mr.
C. J
. De
S. A
mar
atun
ga
Mr.
P. C
. K. A
beyk
oon
Rich
life
Dai
ries
Lim
ited
Subs
idia
ryD
r.S.
R.Ra
jiyah
Fund
Tra
nsfe
rs (
50,5
81,3
73)
50,
581,
373
(14,
951,
519)
50,
581,
373
Mrs
.I.R.
Rajiy
ahA
cqui
sitio
n of
Sub
sidi
ary
100
,000
,000
5
05,0
00,0
00
Mr.
S.V.
Rajiy
ahIn
vest
men
t in
Deb
entu
res
252
,000
,000
-
Mr.
S. V
asan
tha
Kum
ara
Mr.
C. J
. De
S. A
mar
atun
ga
Shaw
Wal
lace
Cey
lon
Lim
ited
Aff
iliat
eD
r. S
.R. R
ajiy
ahSa
les
(21
,523
,894
) 1
06,9
70,6
69
- 1
,417
,504
Mrs
. I.R
. Raj
iyah
Fund
Tra
nsfe
rs 1
41,8
80
133
,128
,870
Mr.
S.V.
Rajiy
ahPa
ckin
g M
ater
ial L
oan
1,7
85,4
51
-
Mr.
S. V
asan
tha
Kum
ara
Bills
Rec
eive
d 2
6,24
4,95
2 -
Mr.
L. M
. Abe
ywic
kram
aCo
nsul
tanc
y Se
rvic
es 3
,370
,840
Mr.
C. J
. De.
S. A
mar
atun
ga
Shaw
Wal
lace
Foo
dse
rvic
es (
Priv
ate)
Lim
ited
Aff
iliat
eD
r. S
.R. R
ajiy
ahSa
les
41,
548,
776
41,
652,
498
19,
347,
189
15,
514,
865
Mrs
. I.R
. Raj
iyah
Fund
Tra
nsfe
rs 6
3,07
2,67
0 2
6,13
7,63
3
Mr.
S.V.
Rajiy
ah
Mr.
S. V
asan
tha
Kum
ara
Mr.
L. M
. Abe
ywic
kram
a
Notes to the Financial Statements (Contd)
52 Renuka Agri Foods PLC | Annual Report 2013
31.1
Tran
sact
ion
s w
ith
Rel
ated
Com
pan
ies
(Con
tin
ued)
Nam
e of
th
e Co
mpa
ny
Nat
ure
of
Rel
atio
nsh
ipN
ame
of t
he
Com
mon
Dir
ecto
r/s
Nat
ure
ofTr
ansa
ctio
ns
Am
oun
tsR
ecei
ved/
(Pai
d)B
alan
ce a
s at
31s
t M
arch
Due
fro
m/(
to)
2013
2012
2013
2012
Rs.
Rs.
Rs.
Rs.
Sym
bios
is B
usin
ess
(Pri
vate
) Li
mite
dCo
mm
on D
irect
orM
r. L
. M. A
beyw
ickr
ama
Con
sult
ancy
Ser
vice
s 6
,285
,440
3
,370
,840
-
-
Chad
ha O
rient
al F
oods
Li
mite
dCo
mm
on D
irect
orM
r. J.
E. B
renn
anPu
rcha
se 1
8,98
1,46
8 5
8,76
0,05
3 -
-
Enco
Pro
duct
s Li
mite
dCo
mm
on D
irect
orM
r. J.
E. B
renn
anPu
rcha
se 9
4,78
6,83
8 8
7,23
5,13
1 -
-
B.Te
rflo
th a
nd c
ie(C
anad
a)Co
mm
on D
irect
orM
r. M
. Ter
floth
Purc
hase
32,
050,
783
22,
645,
814
--
The
bala
nces
with
the
rel
ated
par
ties
are
disc
lose
d in
Not
e 22
and
30
to t
he F
inan
cial
Sta
tem
ents
.
31.2
Tran
sact
ion
s w
ith
Key
Man
agem
ent
Pers
onn
el
Key
man
agem
ent
pers
onne
l inc
lude
s m
embe
rs o
f Bo
ard
of D
irec
tors
of
the
Com
pany
and
Sub
sidi
arie
s.
GR
OU
PCO
MPA
NY
For
the
year
end
ed 3
1st
Mar
ch20
1320
1220
1320
12R
s.Rs
.R
s.Rs
.
Shor
t-Te
rm E
mpl
oyee
Ben
efits
10,9
35,0
00 4
,105
,000
5,
535,
000
4,1
05,0
00
Cons
ulta
ncy
Fee
3,73
5,00
0 -
3,
735,
000
-
Rent
3,60
0,00
03,
600,
000
3,60
0,00
03,
600,
000
Tota
l Com
pens
atio
n Pa
id t
o Ke
y M
anag
emen
t Pe
rson
nel
18,2
70,0
007,
705,
000
12,8
70,0
007,
705,
000
Notes to the Financial Statements (Contd)
53Renuka Agri Foods PLC | Annual Report 2013
32. CONTINGENT LIABILITIES
There are no material contingent liabilities as at the reporting date which require adjustment to or disclosure in the Financial Statements.
33 CAPITAL COMMITMENTS
There were no significant capital commitments as at the reporting date.
34 EVENTS OCCURRING AFTER REPORTING DATE
The Directors have proposed the payment of a final dividend of Rs.0.10/- per share for the year ended 31st March 2013. In accordance LKAS-10
"Events Occurring after Reporting date" the final dividend has not been recognized as a liability in the financial statement at the year end.
35 NET ASSETS ACQUIRED OR DISPOSED DUE TO ACQUISITION/DISPOSAL OF SUBSIDIARIES
35.1 Acquisition of Subsidiaries
The Group has acquired, 50% shareholding of Renuka Developments Limited on 19th December 2012. This acquisition had the following effect on the group's assets and liabilities.
Net Identifiable Assets and Liabilities
Amount
Rs.
Property, Plant and Equipment 249,999,950
Investment Property 228,406,161
Trade and other receivables 697,080
Amounts Due from Related Parties 417,000,000
Cash and Cash Equivalents 116,323
Trade and other payables (199,920)
Income tax Receivable 235,905
896,255,499
Net Assets Acquired (50% of Total Net Identifiable Assets and Liabilities) 448,127,750
Goodwill on acquisition 1,872,250
Total cash consideration 450,000,000
Cash consideration paid on acquisition of subsidiary 450,000,000
Cash and Cash Equivalents at the date of acquisition (116,323)
Net Cash outflow on acquisition of Subsidiary 449,883,677
35.2 Disposal of Subsidiaries
The company disposed its holding in Renuka Products (Private) Limited for a consideration of Rs.18,750,000. The assets and liabilities as at the date of disposal were as follows.
AmountRs.
Assets
Property, Plant and Equipment 44,418,407
Inventory 21,505,530
Trade and Other Receivables 46,135,598
Total Assets 112,059,535
Liabilities
Retirement Benefit Obligations 427,303
Trade and Other Payables 27,890,830
Amounts Due to related Companies 80,602,853
Cash and Cash Equivalents 11,438,350
Total Liabilities 120,359,336
Total Identifiable Net Assets (8,299,801)
Notes to the Financial Statements (Contd)
54 Renuka Agri Foods PLC | Annual Report 2013
36. EXPLANATION OF TRANSITION TO SLFRSs - Company
In preparing opening SLFRS statements of financial position and statement of comprehensive income the company has not made any adjustments
to the amounts reported under previous SLASs. Since there were no material differences between the amounts reported under previous SLASs and
the amounts derived by applying new accounting polices under SLFRS/LKASs set out in the notes to the financial statements.
36.1 Reconciliation of Equity - Group
GROUP
As at 1st April 2011As perSLAS
Effect of Transition to SLFRS/LKASs
As per SLFRS/ LKASs
Note Rs. Rs. Rs.
Non-Current Assets
Property, Plant and Equipment a 464,825,832 7,287,158 472,112,990
Biological Assets b - 5,633,879 5,633,879
Immovable Estate Assets on Lease 60,499,992 - 60,499,992
Premium Paid Leasehold Premises 2,693,672 - 2,693,672
Investments Property 46,274,894 - 46,274,894
574,294,390 12,921,037 587,215,427
Currents Assets
Inventories 250,603,984 - 250,603,984
Trade and Other Receivables 112,294,137 - 112,294,137
Tax Recoverable c 18,901,996 429,660 19,331,656
Amounts Due from Related Companies 30,044,873 - 30,044,873
Cash and Cash Equivalents 158,770,140 - 158,770,140
570,615,130 429,660 571,044,790
Total Assets 1,144,909,520 13,350,697 1,158,260,217
EQUITY AND LIABILITIES
Equity
Stated Capital 552,452,950 - 552,452,950
Retained Earnings d 335,273,890 10,524,724 345,798,614
887,726,840 10,524,724 898,251,564
Non Controlling Interests e 34,311,901 675,488 34,987,389
922,038,741 11,200,212 933,238,953
Non-Current Liabilities
Retirement Benefit Obligations 10,749,268 - 10,749,268
Loans and Borrowings 13,096,316 - 13,096,316
Finance Lease Obligation 67,000,000 - 67,000,000
Deferred Tax Liability f 16,883,651 1,720,824 18,604,475
107,729,235 1,720,824 109,450,059
Current Liabilities
Loans and Borrowings 18,219,861 - 18,219,861
Finance Lease Obligation 2,128,079 - 2,128,079
Trade and Other Payables 65,868,240 - 65,868,240
Amounts Due to Related Companies 7,167,052 - 7,167,052
Dividend Payable 1,350,000 - 1,350,000
Income Tax Payable g 6,024,880 429,660 6,454,541
Bank Overdraft 14,383,432 - 14,383,432
115,141,544 429,661 115,571,205
Total Equity and Liabilities 1,144,909,520 13,350,697 1,158,260,217
Notes to the Financial Statements (Contd)
55Renuka Agri Foods PLC | Annual Report 2013
36.2 Reconciliation of Equity - Group
GROUP
As at 31st March 2012 As perSLAS
Effect of Transition to SLFRS/LKASs
As per SLFRS/ LKASs
Note Rs. Rs. Rs.
Non-Current Assets
Property, Plant and Equipments a 1,157,432,650 (7,856,055) 1,149,576,596
Biological Assets b - 28,098,711 28,098,711
Intangible Assets 10,918,522 - 10,918,522
Immovable Estate Assets on Lease 57,749,988 - 57,749,988
Premium Paid for Leasehold Premises 2,624,602 - 2,624,602
Investments Property 55,089,160 - 55,089,160
Goodwill on Acquisition 265,553,003 - 265,553,003
1,549,367,925 20,242,657 1,569,610,582
Currents Assets
Inventories 317,728,021 - 317,728,021
Trade and Other Receivables 216,781,989 - 216,781,989
Tax Recoverable 18,393,159 - 18,393,159
Amounts Due from Related Companies 56,854,204 - 56,854,204
Cash and Cash Equivalents 77,189,143 - 77,189,143
686,946,516 - 686,946,516
Total Assets 2,236,314,441 20,242,657 2,256,557,098
EQUITY AND LIABILITIES
Equity
Stated Capital 552,452,950 - 552,452,950
Retained Earnings d 601,019,154 8,260,265 609,279,419
1,153,472,104 8,260,265 1,161,732,369
Non-Controlling Interests e 116,900,550 12,797,298 129,697,848
Total Equity 1,270,372,654 21,057,563 1,291,430,217
Non-Current Liabilities
Retirement Benefit Obligations 23,514,010 - 23,514,010
Loans and Borrowings 117,564,188 - 117,564,188
Finance Lease Obligations 65,486,066 - 65,486,066
Deferred Tax Liability f 49,743,615 (814,907) 48,928,708
256,307,878 (814,907) 255,492,972
Current Liabilities
Loans and Borrowings 222,699,678 - 222,699,677
Finance Lease Obligations 2,163,702 - 2,163,702
Trade and Other Payables 311,707,187 - 311,707,187
Amounts Due to Related Companies 62,315,463 - 62,315,463
Dividend Payable 1,993,936 - 1,993,936
Income Tax Payable 1,114,337 - 1,114,337
Bank Overdraft 107,639,607 - 107,639,607
709,633,909 - 709,633,909
Total Equity and Liabilities 2,236,314,441 20,242,656 2,256,557,098
Notes to the Financial Statements (Contd)
56 Renuka Agri Foods PLC | Annual Report 2013
36.3 Reconciliation of Comprehensive Income - Group
GROUP
For the year ended 31st March As perSLAS
Effect of Transition to SLFRS/LKASs
As per SLFRS/ LKASs
Note Rs. Rs. Rs.
Revenue h 1,972,627,482 2,400,158 1,975,027,640
Cost of Sales i (1,348,228,266) (3,727,605) (1,351,955,870)
Gross Profit 624,399,216 (1,327,447) 623,071,770
Other Operating Income j 12,863,424 22,023,127 34,886,551
Administration Expenses k (171,748,235) 1,298,285 (170,449,950)
Selling and Distribution Expenses (121,942,563) - (121,942,563)
Profit from Operations 343,571,843 21,993,965 365,565,808
Net Financing Costs l (28,026,514) (1,298,285) (29,324,799)
Profit Before Tax 315,545,329 20,695,680 336,241,009
Taxation m 1,146,335 506,510 1,652,845
Profit for the Year 316,691,664 21,202,190 337,893,854
Other Comprehensive Income - - -
Total Comprehensive Income for the Year 316,691,664 21,202,190 337,893,854
a Property, Plant & Equipment
The Group elected to reassess remaining useful life of the certain items of PPE as at the transition date and the carrying values were adjusted
accordingly.
GROUP 31/03/2012 01/04/2011
Rs. Rs.
Impact on the carrying value of Property Plant & Equipments due to re assessment of useful life of assets (1,780,471) 12,921,037
Reclassification of biological assets from Property Plant and Equipment (Note b) (6,075,584) (5,633,879)
Effect of Transition to SLFRS/LKASs (7,856,055) 7,287,158
b Biological Assets
This represents the reclassification of biological assets which was previously classified under property, plant and equipment and the fair valuation
of biological assets as at the year end as per LKAS 41.
GROUP 31/03/2012 01/04/2011
Rs. Rs.
Reclassification of Biological Assets from Property, Plant and Equipment 6,075,584 5,633,879
Gain on Fair Value of Managed Agricultural Activities as per LKAS 41 22,023,127 -
Effect of Transition to SLFRS/LKASs 28,098,711 5,633,879
Notes to the Financial Statements (Contd)
57Renuka Agri Foods PLC | Annual Report 2013
c Income Tax Recoverable
This represents the reclassification of income tax receivable balance which was previously classified under income tax payable.
GROUP 31/03/2012 01/04/2011
Rs. Rs.
Reclassification of Income Tax Receivable - 429,660
Effect of Transition to SLFRS/LKASs - 429,660
d Retained Earnings
The net effect of adoption of SLFRS as of the transition date of 1st April 2011 and 31st March 2012 is recorded through “Retained Earnings”
GROUP Note 31/03/2012 01/04/2011
Rs. Rs.
Adjustment of net impact on accumulated depreciation of Property Plant and Equipment
through Retained Earnings due to re assessment of useful life of Certain assets. a (1,780,461) 12,921,037
Adjustment of net Impact on deferred Tax through Retained Earnings due to re assessment of
Property, Plant & Equipment. f 814,897 (1,720,824)
Impact on fair valuation of managed agricultural activities as per LKAS 41 to accommodate the fair values as at the date of transition. b 22,023,127 -
Reclassification of profit share between Equity Holders & Non Controlling Interest. e (12,797,298) (675,488)
Effect of Transition to SLFRS/LKASs 8,260,265 10,524,724
e Non Controlling Interest
GROUP 31/03/2012 01/04/2011
Rs. Rs.
Reclassification of profit share between Equity Holders & Non Controlling Interest 12,797,298 675,488
Effect of Transition to SLFRS/LKASs 12,797,298 675,488
f Deferred Tax
This represents the effect on deferred tax due to reassessment of Property, Plant & Equipment.
GROUP 31/03/2012 01/04/2011
Rs. Rs.
Net Impact on differed Tax due to re assessment of Property, Plant & Equipment (814,907) 1,720,824
Effect of Transition to SLFRS/LKASs (814,907) 1,720,824
g Income Tax payable
This represents the reclassification of Income Tax receivable balance which was previously classified under Income Tax payable .
GROUP 31/03/2012 01/04/2011
Rs. Rs.
Reclassification of Income Tax Receivable - 429,660
Effect of Transition to SLFRS/LKASs - 429,660
Notes to the Financial Statements (Contd)
58 Renuka Agri Foods PLC | Annual Report 2013
h Revenue
Revenue recognition on Harvested Crop was based on the financial period of harvesting in terms of previous SLAS 32. Thus the unsold stocks were treated
as a part of revenue. However, with the implementation of SLFRSs, the revenue recognition was based on the LKAS 18. Accordingly, the revenue is
recognized based on the date of auction where the recognition criteria are met and therefore the quantity which is sold at auction is treated as the sales.
“This classification does not effect on the net assets for the Statement of Financial position as at 01 April 2011, 31st March 2012. The turnover in
the Statement of Comprehensive Income for the year ended 31st March 2012 was decreased by Rs.2.4Mn.
GROUP 31/03/2012
Rs.
Impact of recognition of harvest income as per LKAS 18 2,400,158
Effect of Transition to SLFRS/LKASs 2,400,158
i Cost of Sales
Recognition of the cost of sales has been changed simultaneous to the changes to the revenue recognition. Thus, cost of sales consist of the directly
attributable cost of goods sold. Accordingly cost of opening stocks and the closing stocks were adjusted to the cost of production in arriving this.
Further, the measurement of unsold harvested crop have been changed.
Further effect of transition to SLFRS/LKAS include the effect on depreciation in 2011/2012 arising on reassessment of Property Plant & Equipment.
GROUP 31/03/2012
Rs.
Impact of recognition of harvesting expenses as per LKAS 18 2,400,158
Depreciation effect on re assessment of useful life of certain Plant & Machinery 1,327,447
Effect of Transition to SLFRS/LKAS 3,727,605
j Other Operating Income
GROUP 31/03/2012
Rs.
Gain on share value and Managed Agricultural Activities as per LKAS 41 22,023,127
Effect of Transition to SLFRS/LKASs 22,023,127
k Administrative Expenses
Finance expenses which was previously classified under administration expenses has been reclassified to Finance Cost.
GROUP 31/03/2012
Rs.
Net effect on Reclassification of Finance Cost from Administrative Expenses (1,298,285)
Effect of Transition to SLFRS/LKASs (1,298,285)
l Net Finance Income/cost
Finance expenses which was previously classified under administration expenses has been reclassified to finance cost.
GROUP 31/03/2012
Rs.
Net effect on reclassification of Finance cost from Administrative Expenses 1,298,285
Effect of Transition to SLFRS/LKASs 1,298,285
Notes to the Financial Statements (Contd)
59Renuka Agri Foods PLC | Annual Report 2013
m Taxation
This represents effect on deferred tax adjustments due to reassessment of Property, Plant & Equipment.
GROUP 31/03/2012
Rs.
Net effect on Deferred Tax adjustment due to reassessment of Property, Plant and Equipment 506,510
Effect of transition to SLFRS/LKASs 506,510
37. FINANCIAL RISK MANAGEMENT
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities.
The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment
in which all employees understand their roles and obligations. The Group Audit Committee oversees how management monitors compliance with
the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced
by the Group.
Financial Risk Factors
The activities of the Company’s and the Group exposed to variety of financial risks:
1. Market Risk - Currency Risk,
- Interest Rate Risk
- Price Risk
2. Credit risk
3. Liquidity risk
The Company’s and the Group’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks to
minimize potential adverse effects on the financial performance of the Company and the Group. Financial risk management is carried out through
risk reviews, internal control systems, insurance programmes and adherence to the Company’s and the Group’s financial risk management policies.
The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risk
Notes to the Financial Statements (Contd)
60 Renuka Agri Foods PLC | Annual Report 2013
1. Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s and the Group's
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimizing the return.
a. Currency Risk
The risk that the fair value or future cash flows of a financial instrument fluctuation due to changes in foreign exchange rates. The Company is
exposed to currency risk on sales, purchases that are denominated in a currency other than Sri Lankan Rupees (LKR). The foreign currencies in
which these transactions primarily denominated is US Dollars.
Exposure to Currency Risk
The Group’s exposure to foreign currency risk was as follows based on notional amounts.
The Company and the Group involves with foreign exchange transactions and are exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the US Dollar. Foreign exchange risk arises when future commercial transactions or recognized assets or
liabilities are denominated in a currency that is not the entity’s functional currency.
31st March 2013 31st March 2012Rs. US Dollars Rs. US Dollars
Trade and Other Payables 16,958,431 135,559 11,433,769 86,567
Trade and Other Receivables 133,901,661 1,070,357 94,768,324 717,507
Cash and Cash Equivalents 29,175,322 233,216 28,933,841 219,063
Gross Statement of Financial Position exposure 146,118,552 1,168,014 112,268,396 850,003
The following significant exchange rates were applicable during the year
Average Rate Reporting Date Spot Rate2013 2012 2013 2012
Rs. Rs. Rs. Rs.
US Dollars 128.14 114.39 125.10 132.08
Sensitivity Analysis
A strengthening of the Rs. as indicated below, against the US Dollar as at 31st March 2013 would have increased/(decreased) the equity and
profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be
reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant.
Strengthening WeakeningProfit or Loss Equity Profit or Loss Equity
Rs. Rs. Rs. Rs.
31st March 2013
USD (10% movement) 14,611,855 - (14,611,855) -
31st March 2012
USD (10% movement) 11,226,840 - (11,226,840) -
Notes to the Financial Statements (Contd)
61Renuka Agri Foods PLC | Annual Report 2013
b. Interest Rate Risk
The risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates
At the reporting date, the Group’s interest-bearing financial instruments were as follows
Carrying Amount 31/03/2013 31/03/2012
Rs. Rs.
Fixed Rate Instruments
Financial Assets
Bank Deposits 38,714,094 30,951,194
Variable Rate Instruments
Financial Liabilities
Bank Overdrafts (147,223,512) (107,639,607)
(117,449,587) (91,825,923)
c. Price Risk
Risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors
specific to the individual instrument or its issuer or factors affecting all instrument traded in the market.
2. Credit risk
Risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Credit risk is
managed on the Company and the Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables (net of deposits held). Individual
risk limits are set, based on internal or external ratings. The utilization of credit limits is regularly monitored. The Company and the Group place its
cash and cash equivalents with a number of creditworthy financial institutions. The Company’s and the Group’s policy limits the concentration of
financial exposure to any single financial institution. The maximum credit risk exposure of the financial assets of the Company and the Group are
approximately their carrying amounts as at statement of financial position date.
Exposure to Credit Risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows
Carrying Amount2013 2012
Rs. Rs.
Trade and Other Receivables 356,570,036 216,781,989
Amount due from Related Companies 376,554,189 56,854,204
Balances with Banks 109,616,498 77,189,143
842,740,723 350,825,336
Impairment Losses
The Company and the Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of Trade and
Other Receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a
collective loss component established for groups of similar assets in respect of losses that have been incurr but not yet identified. The collective
loss allowance is determined based on historical data of payment statistics for similar financial assets.
Notes to the Financial Statements (Contd)
62 Renuka Agri Foods PLC | Annual Report 2013
The aging of Trade and Other Receivables at the reporting date was as follows;
As at 31/03/2013 As at 31/03/2012 As at 01/04/2011
GrossBalance
GrossBalance
GrossBalance
Rs. Rs. Rs.
Past due 0-30 356,217,909 222,011,515 108,290,644
Past due 31-160 7,709,127 2,659,485 4,603,493
363,927,126 224,671,000 112,894,137
The maximum exposure to credit risk for Trade and Other Receivables as at the reporting date by geographic areas as follows;
Carrying Amount31/03/2013 31/03/2012
Rs. Rs.
Domestic 230,025,436 129,902,628
Europe 36,478,036 24,042,728
Middle East 43,208,744 47,808,141
Asia 1,500,323 20,168,507
United States 5,099,037 2,748,996
Canada 15,031,998 -
Caribbean 32,583,552 -
363,927,126 224,671,000
Cash and Cash Equivalents
The Company held cash and cash equivalents of Rs.109,616,498 at 31st March 2013 (Rs.77,189,143 as at 31st March 2012) which represent its
maximum credit exposure on these assets.
3. Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group’s reputation.
Prudent liquidity risk management implies maintaining sufficient liquid funds to meet its financial obligations. In the management of liquidity
risk, the Company and the Group monitor and maintain a level of cash and cash equivalents deemed adequate by the management to finance
the Company’s and the Group’s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying
business, the Company and the Group aim at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available.
Notes to the Financial Statements (Contd)
63Renuka Agri Foods PLC | Annual Report 2013
CarryingAmount
0-12Months
More than 1 Year
Rs. Rs. Rs.
As at 31st March 2013
Financial Liabilities (Non-Derivative)
Interest Bearing Borrowings 271,177,681 109,924,184 161,253,497
Amounts Due to Related Companies 3,420,232 3,420,232 -
Trade and Other Payables 305,394,597 289,890,646 15,503,951
Bank overdraft 147,223,512 147,223,512 -
Total 727,216,022 550,458,574 176,757,448
As at 31st March 2012
Financial Liabilities (Non-Derivative)
Interest Bearing Borrowings 340,263,865 222,699,677 117,564,188
Amounts Due to Related Companies 62,315,463 62,315,463 -
Trade and Other Payables 311,707,187 308,117,631 3,589,556
Bank overdraft 107,639,607 107,639,607 -
Total 821,926,122 700,772,378 121,153,744
4. Capital Management
The primary objective of the Company’s and the Group’s capital management is to ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximize shareholder value. The Company and the Group manage its capital structure and make
adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company and the Group may or may
not make dividend payments to shareholders, return capital to shareholders or issue new shares or other instruments. Consistent with others in
the industry, the Company and the Group monitor capital on the basis of the Net Debt to Equity Ratio. This ratio is calculated as Net Debt by total
equity. Net Debt includes non-current and current borrowings as shown in the statements of financial position. Total equity is calculated as ‘Total
equity’ in the statements of financial position.
The Net Debt to Equity Ratio as at 31st March was as follows:
GROUP COMPANY
31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011
Rs. Rs. Rs. Rs. Rs. Rs.
Total Liabilities 863,725,890 965,126,881 225,021,264 502,232,595 598,288,225 101,997,530
Cash & Cash Equivalents (109,616,498) (77,189,143) (158,770,140) (30,177,569) (40,365,512) (129,464,899)
Net Debt 754,109,392 887,937,738 66,251,124 472,055,026 557,922,713 (27,467,369)
Total Equity 1,909,318,168 1,161,732,369 898,251,564 1,942,805,552 1,152,139,474 877,084,407
Net Debt to Equity Ratio 39% 76% 7% 24% 48% (3%)
5. Operational Risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel,
technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory
requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the Company’s operations.
The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management.
This responsibility is supported by the development of overall Company standards for the management of operational risk in the following areas:
Notes to the Financial Statements (Contd)
64 Renuka Agri Foods PLC | Annual Report 2013
z Requirements for appropriate segregation of duties, including the independent authorization of transactions
z Requirements for the reconciliation and monitoring of transactions
z Requirements for the reconciliation and monitoring of transactions
z Documentation of controls and procedures
z Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks
identified
z Development of contingency plans
z Training and professional development
38. OPERATING SEGMENTS
Segment information is presented in respect of the group's operating segments. Operating Segments are based on the Group's management and
internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Segment Capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than a
period of one year.
The Group Comprises the following main operating segments:
- Agri Food Exports
- Dairy Production
Agri Food Exports
DairyGroupTotal
As at 31st March 31/03/2013 31/03/2012 31/03/2013 31/03/2012 31/03/2013 31/03/2012
Rs. Rs. Rs. Rs. Rs. Rs.
Total Revenue 1,733,258,633 1,872,393,991 831,570,533 102,633,649 2,564,829,166 1,975,027,640
Profit from Operation 255,858,663 361,388,251 (42,773,791) 4,177,557 213,084,872 365,565,808
Net Finance Income/(Cost) (8,729,335) (27,346,893) (13,485,185) (1,977,906) (22,214,520) (29,324,799)
Profit before Taxation 247,129,328 334,041,358 (56,258,976) 2,199,651 190,870,352 336,241,009
Total Assets 2,486,485,922 1,640,973,555 769,297,216 615,583,543 3,255,783,138 2,256,557,098
Fixed Assets Including Investment Property 1,238,362,872 792,940,224 526,135,318 511,117,355 1,764,498,190 1,304,057,579
Non Interest Bearing Liabilities
Deferred Taxation 19,423,673 17,525,859 21,325,809 31,402,849 40,749,482 48,928,708
Retirement Benefit Obligations 19,257,183 16,481,216 6,771,025 7,032,794 26,028,208 23,514,010
Trade & Other Payable 198,752,731 218,713,877 106,641,866 92,993,310 305,394,597 311,707,187
Notes to the Financial Statements (Contd)
65Renuka Agri Foods PLC | Annual Report 2013
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66 Renuka Agri Foods PLC | Annual Report 2013
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Group Structure
67Renuka Agri Foods PLC | Annual Report 2013
Classification Name of the Company Location Land PerchesNo. of
BuildingsBuilding in
Sq. ftValue (Rs.000)Cost/Valuation
Lease Hold
Free Hold
Property, Plant& Equipment
Kandy Plantations Ltd. Diwuldeniya 102,552 4 8,094 72,683
Ceylon Botanicals (Pvt) Ltd. Matale 10,842 20,000
Renuka Trading (Pvt) Ltd. Colombo 09 37.80 3 34,706 55,089
Renuka Developments Ltd. Colombo 09 96.36 2 7,507 250,000
Renuka Agri Foods PLC Wathupitiwala 670 8 81,364 103,622
Richlife Dairies Ltd. Wadduwa 681.50 6 57,550 322,187
Investment PropertiesRenuka Trading (Pvt) Ltd. Colombo 09 37.81 55,089
Renuka Developments Ltd. Colombo 09 88.04 228,406
Real Estate Portfolio
68 Renuka Agri Foods PLC | Annual Report 2013
2013 2012 2011 2010 2009Year ended 31st March Rs'000 Rs'000 Rs'000 Rs'000 Rs'000
A) Summary of the Operation
Revenue 2,564,829 1,975,028 1,220,656 1,090,513 1,086,298
Gross Profit 604,807 623,072 221,006 311,651 274,145
Profit from Operation 213,085 365,566 148,031 197,078 196,587
Profit before Taxation 190,870 336,241 146,429 187,209 168,842
Taxation (1,180) 1,652 (2,824) (6,014) (3,047)
Profit/(Loss) after Tax 189,691 337,894 143,605 181,195 165,795
Profit attributable to Equity Holders of the Company 200,001 316,443 144,009 181,195 165,795
B) Summary of Financial Position
Capital and Reserves
Stated Capital 1,194,453 552,453 552,453 552,453 282,453
Retained Earnings 714,865 609,279 345,799 242,432 88,861
Shareholders' Fund 1,909,318 1,161,732 898,252 794,885 371,314
Minority Interest 482,739 129,698 34,987 - -
Total Equity 2,392,057 1,291,430 933,239 794,885 371,314
Liabilities
Non-Current Liabilities 291,336 255,493 109,450 40,442 72,644
Current Liabilities 572,390 709,634 115,571 78,564 128,296
Total Liabilities 863,726 965,127 225,021 119,006 200,940
Total Equity and Liabilities 3,255,783 2,256,557 1,158,260 913,891 572,254
Assets
Property, Plant and Equipments 1,450,198 1,207,326 532,613 298,761 288,639
Investment Properties 274,056 55,089 46,275 - -
Other Non-Current Assets 307,669 307,195 8,327 - -
Current Assets 1,223,860 686,946 571,045 615,130 283,615
Total Assets 3,255,783 2,256,557 1,158,260 913,891 572,254
C) Key Indicators
Earnings per share (Rs.) 0.36 0.79 0.36 0.57 0.59
Net Profit Margin (%) 7.40% 17.11% 11.76% 16.62% 15.26%
Net Assets per Share (Rs.) 3.40 2.90 2.24 1.98 1.32
Dividends Paid per share (Rs.) 0.14 0.10 0.10 0.10 -
Dividends Payout (%) 23.27% 27.94% 22.14% 16.96% 0.00%
Dividend Cover (Times) 4.30 3.58 4.52 5.89 -
Interest Cover (Times) 6.06 33.17 92.36 19.97 8.16
Current Ratio (Times) 2.14 .97 4.94 7.83 2.21
Gearing Ratio on Long-Term Debts (%) 8.56% 12.41% 7.90% 2.02% 12.30%
Return on Equity (%) 7.93% 26.16% 15.39% 22.80% 44.65%
Five Year Summary
69Renuka Agri Foods PLC | Annual Report 2013
The issued ordinary shares of Renuka Agri Foods PLC are listed on the Main Board of the Colombo Stock Exchange (CSE).
2013 2012
No of shareholders 3233 2990
No of Shares Listed 561,750,000 401,250,000
Ordinary Shareholders as at 31-03-2013
No ofshares Held
No ofShareholders
TotalShareholding
% No ofShareholders
TotalShareholding
%
2013 2013 2012 2012
1 1,000 1189 547,714 0.10 1112 589,463 0.15
1,001 10,000 1325 5,988,488 1.07 1303 6,185,950 1.54
10,001 100,000 602 16,461,343 2.93 495 12,823,413 3.19
100,001 1,000,000 80 24,793,915 4.41 59 17,608,152 4.39
1,000,001 & Over 37 513,958,540 1.49 21 364,043,022 90.73
Total 3,233 561,750,000 100 2,990 401,250,000 100
Analysis ofShareholders
No ofShareholders
No ofShares
% No ofShareholders
No ofShares
%
2013 2012
Individuals 3113 417,792,724 74.37 2893 367,431,863 91.57
Institutions 120 143,957,276 25.63 97 33,818,137 8.43
Total 3,233 561,750,000 100 2,990 401,250,100 100
Analysis ofShareholders
No ofShareholders
No ofShares
% No ofShareholders
No ofShares
%
2013 2012
Resident 3,176 393,049,551 69.97 2947 271,398,978 67.64
Non-Resident 57 168,700,449 30.03 43 129,851,022 32.36
Total 3,233 561,750,000 100 2,990 401,250,000 100
Public Shareholding
The percentage of share held by public: 47.94 % as at 31st March 2013 (2012- 49.05%)
Share Trading Information
2013 2012Rs. Rs.
Market Value
Highest 6.80 7.10
Lowest 4.00 5.90
As at 31st March 4.10 6.00
No of Trades 6,498 22,018
No of Shares Traded 63,988,740 228,649,436
Value of Share Traded (Rs.) 305,644,521 1,577,472,876
Dividend
Proposed/Paid(Rs.) 56,175,000 78,645,000
(Rs.00.10 per share)
(Rs.00.14 per share)
Shareholder Information
70 Renuka Agri Foods PLC | Annual Report 2013
Top 20 Shareholders
As at 31st March 2013 As at 31st March 2012
Name No of Shares % No of Shares %
Renuka Shaw Wallace PLC 281,400,000 50.09% 201,000,000 50.09%
Mr. Talib Tawfiq Al Nakib 46,772,635 8.32% 41,744,167 10.41%
Greven Holdings Ltd 34,735,743 6.19% 25,987,500 6.48%
Grace Foods UK Ltd 22,500,000 4.01% 22,500,000 5.61%
Mr. Abeer Talib Tawfiq Talib Al-Nakib 14,855,280 2.64% - -
Mr. Loay Mahmoud Sayed Hamed Al Naqib 12,500,000 2.23% 6,510,400 1.62%
GraceKennedy Ltd. 12,255,555 2.18% 12,255,555 3.05%
Dr. S.R.Rajiyah & Mrs I.R.Rajiyah (Jt) 8,426,258 1.50% 3,300,000 0.82%
Deutsche Bank As Trustee for Namal Acuity Value Fund 8,220,240 1.46% 5,871,600 1.46%
Deutsche Bank AG National Equity Fund 7,515,480 1.34% 5,368,200 1.34%
Mr. Wayne Dusford 7,000,000 1.25% 5,000,000 1.25%
Mr. Peiris Henry Anthony 5,342,770 0.95% 3,377,500 0.84%
Mr. Kangasu Chelvadura Vignarajah 5,251,540 0.93% 4,447,600 1.11%
Mr. Aasiri Manmohan Iddamalgoda 4,351,095 0.77% 2,605,700 0.65%
Mr. Hashim Ahmed AlSayid Hashim AlGharabally 4,277,237 0.76% - -
Distilleries Co. of Sri Lanka A/c No.2 3,668,560 0.65% 2,620,400 0.65%
Mr. Raheel Ijaz & Mr Anenah A.Raheel (Jt) 3,479,500 0.62% 3,479,500 0.87%
Waldock Mackenzie Ltd. / Mr. Chamila Damion Kohombawickramage 3,350,000 0.60% - -
Mr. Tambi Lebbe Mohamed Imtiaz 3,079,461 0.55% 2,305,300 0.57%
Standard Chartered Bank Singapore S/A HL Bank Singapore Branch 3,000,000 0.53% - -
491,981,354 87.57% 348,373,422 86.82%
Shareholder Information (Contd)
71Renuka Agri Foods PLC | Annual Report 2013
Notice of Meeting
Notice is hereby given that the 13th Annual General Meeting of the Company will be held at the Sri Lanka Foundation Institute No.100 Independence
Square, Colombo 7 on the 25th September, 2013 at 9.00 a.m. for the following purposes.
1. To receive and consider the report of the Directors and the Statement of the Audited Financial Statement for the year ended 31st March 2013
with the report of the Auditors thereon.
2. To Re-elect Ms. A.L. Rajiyah as a Director who retires in terms of Article No.28 (2).
3. To Re-elect Mr. M.K.A. Ranglin as a Director who retires in terms of Article No.28 (2).
4. Mr. P.C.K.Abeykoon retire by rotation in terms of Article 30 (1) and is not seeking re-appointment.
5. To re-elect Mr. C.J. De S. Amaratunge who is above 70 years of age as a director in terms of section 211 of the Companies Act No.7 of 2007
and it is specifically declared that the age limit of 70 years referred to in section 210 of the Companies Act No.7 of 2007 shall not apply to the
said C.J. De S. Amaratunge.
6. To declare a dividend of Rs.0.10 per share.
7. To authorize the directors to determine the contribution to charity.
8. To re- appoint M/s KPMG Chartered Accountants as the auditors & authorize the Directors to determine their remuneration.
By Order of the Board
Sgd.
Renuka Enterprises (Pvt) Ltd.
Company Secretaries
05th August, 2013
NOTE:
a) A member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote instead of the member, such
proxy need not be a member.
b) A form of proxy is enclosed to this report.
c) The completed form of proxy should be deposited at the registered office of the company, “Renuka House” No.69, Sri Jinaratana Road, Colombo
2 on or before 9.00 a.m. on 23rd September, 2013 being not less than 48 hours before the time of the meeting.
72 Renuka Agri Foods PLC | Annual Report 2013
Notes
73Renuka Agri Foods PLC | Annual Report 2013
Form of Proxy
I/We…………………………………………………………………….................................................................................................................................…………………
of…………………………………………………………………………….......................................................................................................................……………..
being a member/members of Renuka Agri Foods PLC, hereby appoint:
Dr. S.R. Rajiyah (or failing him)
Mrs. I.R. Rajiyah (or failing her)
Mr. P.C.K. Abeykoon (or failing him)
Mr. L.M. Abeywickrama (or failing him)
Mr. S.V. Rajiyah (or failing him)
Mr. C.J. De S. Amaratunge (or failing him)
Mr. S. Vasanthakumara (or failing him)
Mr. W. Rajapakshe (or failing him)
Ms. A.L. Rajiyah (or failing her)
Mr. M. Terfloth (or failing him)
Mr. M.K.A. Ranglin (or failing him)
………………………………………………..........................................................…(NIC No……..……….........................................................................…………..) of
……………………………………………….................................................................................................................................……………………………….as
my/our proxy to represent me/us and to speak and to vote on my/our behalf at the Annual General Meeting of the Company to be held on
25th September 2013 and at any adjournment thereof and at every poll which may be taken in consequence thereof.
1. To receive & consider the report of the Directors and the Statement of the Audited Financial
Statements for the year ended 31st March 2013 with the report of the Auditors thereon.
2. To re-elect Ms. A.L. Rajiyah as a Director.
3. To re-elect Mr. M.K.A. Ranglin as a Director.
4. To re-elect Mr. C.J. De S. Amaratunge as a Director.
5. To declare a dividend of Rs.00.10 per share.
6. To authorize the Directors to determine the contribution to charity.
7. To re-appoint KPMG, Chartered Accountants as Auditors & authorize the Directors to
determine their remuneration.
Dated this……….............................................…..day of………..............................................2013
……………..........................………………
Signature of Shareholder
(a) A proxy need not be a member of the Company
(b) Instructions regarding completion appear overleaf
For Against
74 Renuka Agri Foods PLC | Annual Report 2013
INSTRUCTIONS AS TO COMPLETION OF TH FORM PROXY
1. To be valid, the completed form of proxy should be deposited at the Registered Office of the
Company at “Renuka House” No.69, Sri Jinaratana Road, Colombo 2, not less than 48 hours
before the time of the meeting.
2. In perfecting the form of proxy, please ensure that all the details are legible.
3. Please indicate with an “X” in the space provided how your proxy to vote on each resolution.
If no indication is given, the proxy in his discretion will vote as he thinks fit.
4. 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.
5. In the case of a proxy signed by the Attorney, the Power of Attorney must be deposited at the
Registered Office at “Renuka House” No.69, Sri Jinaratana Road, Colombo 2, for registration.
Form of Proxy (Contd)
Name of Company Parent Company
Renuka Agri Foods PLC Renuka Shaw Wallace PLC
Registration No. Registered Office
PB 1108/PQ “Renuka House”
69, Sri Jinaratana Road,
Legal Form Colombo 2, Sri Lanka.
Quoted Public Company with Limited Liability Telephone: 0094-11-2314750-5
Email: info@renukagroup.com
Principal Activity Fax: 0094-11-2445549
Agri Business
Postal Address
Subsidiaries P.O. Box 961, Colombo
Renuka Organics (Pvt) Ltd.
Renuka Teas (Ceylon) (Pvt) Ltd. Stock Exchange Listing
Richlife Dairies Ltd. Colombo Stock Exchange
Kandy Plantations Ltd.
Renuka Developments Ltd. Audit Committee
Renuka Trading (Pvt) Ltd. Mr. P.C.K. Abeykoon
Ceylon Forestry (Pvt) Ltd. Mr. C.J. De S. Amaratunge
Ceylon Botanicals (Pvt) Ltd. Mr. L.M. Abeywickrama
Board of Directors Remuneration Committee
Dr. S.R. Rajiyah - (Chairman) Mr. C.J. De S. Amaratunge
Mrs. I.R. Rajiyah Mr. M.S. Dominic
Mr. P.C.K. Abeykoon Mr. L.M. Abeywickrama
Mr. C.J. De S. Amaratunge
Mr. S.V. Rajiyah Auditors
Mr. L.M. Abeywickrama KPMG, Chartered Accountants
Mr. W. Rajapakshe
Mr. M. Terfloth Legal Consultants
Mr. S. Vasantha Kumara Nithya Partners - Attorneys at Law
Ms. A.L. Rajiyah
Mr. M.K.A. Ranglin Bankers
National Development Bank PLC
Company Secretaries Hong Kong & Shanghai Banking Corporation Ltd.
Renuka Enterprises (Pvt) Ltd. Commercial Bank of Ceylon PLC
69, Sri Jinaratana Road, DFCC Bank PLC
Colombo 2 DFCC Vardhana Bank PLC
Registrars
S.S.P. Corporate Services (Pvt) Ltd.
546, Galle Road,
Colombo 3.
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