MACKWOODS ENERGY PLC · MACKWOODS ENERGY PLC 4 ANNUAL REPORT 2015/2016 Corporate Information (As at...

AnnuAl RepoRt 2015/2016

MAckwoods eneRgy plc

1



1

Empowering the Nation

Our Vision“ Mackwoods Energy to be the preferred choice and the leader in providing energy solutions through which the company strives to enhance shareholder value whilst contributing to the socio economic development of the country.”

Our MissionWe are committed to value creation by fulfilling the needs of trade and industry and meeting the national energy requirements by providing competitive and high quality products, services and renewable energy solutions.

We aim to accomplish this through continuous development of the existing business and by diversifying into new products, markets and services and renewable energy projects through optimum procurement, production and distribution in a sustainable and environment friendly manner. In doing so, the company will always be mindful of the obligations to society, the customers, shareholders and the employees.



3

ContentsCorporate Information 4

Financial Highlights/Financial Calender 5

Chairman’s Review 6

Recent Activities & Products 7

Board of Directors and the Management Team 10

Annual Report of the Board of Directors 11

Directors’ Profile 15

Statement of Corporate Governance 17

Risk Management 23

Statement of Directors’ Responsibility 24

Audit Committee Report 25

Related Party Transaction Review Committee 26

Independent Auditor’s Report 27

Statement of Comprehensive Income 28

Statement of Financial Position 29

Statement of Changes in Equity 30

Statement of Cash Flow 31

Notes to the Financial Statements 32

Shareholders Information 54

Definitions 56

Notice of Meeting 57

Form of Proxy 59

Mackwoods EnErgy PLc

annuaL rEPort 2015/20164

Corporate Information (As at 31st March 2016)

Name of Company Mackwoods Energy PLC (PV 17807 PB/PQ)

Legal Form A limited liability Company incorporated in Sri Lanka on 19th March 1979 and converted to a public limited liability Company on 21st November 2011. Name since changed to Mackwoods Energy PLC upon the Company being listed on the Diri Savi Board of CSE on 25th April 2012.

Registered Office Mackwoods Energy PLC No. 10, Gnanartha Pradeepa Mawatha Colombo 08 Tel: +94 11 2697965-9 Fax: +94 11 2699454

Secretaries Mackwoods (Private) Limited (ML) No. 10, Gnanartha Pradeepa Mawatha Colombo 08 Tel: +94 11 2683030/2697974 Fax: +94 11 2677576

Auditors Wijeyeratne & Company Chartered Accountants 15, Maitland Crescent Colombo 07 Tel: +94 11 5736933/5736996

Registrars SSP Corporate Services (Pvt) Ltd No 101, Inner Flower Road, Colombo 3

Board of Directors Dr. C.N.A.Nonis, BSc (Hons), MBBS(Lond), MRCP(UK) - Chairman F.L.Fonseka, FCA, FCMA(UK), CGMA, MBA (Sri J) Mrs.S.M.A.Nonis Ranaweera, LL.B (Hons.)(Lond), Barrister-at-Law (Gray’s Inn), Attorney-at –Law D.T.Ranaweera Bsc (Hons) (Lond) L.L.Samarasinghe, L.J.K.Hettiaratchi, LLB, FCMA (UK), CGMA, MBCS, CITP, Attorney-at-Law Dr. H.Shafeeu, PhD, MEng (Hons), CEng, MIEE

Bankers National Development Bank PLC 40, Navam Mawatha, Colombo 02.

Pan Asia Banking Corporation PLC 996A, Maradana Road, Colombo 08.

Hatton National Bank PLC 46/38, Navam Mawatha, Colombo 02.

Hongkong & Shanghai Banking Corporation Limited Po. Box 73, Colombo 01.

Lawyers F J & G De Saram (Attorneys at Law & Notaries Public) No. 216, De Saram Place, Colombo 10.



5

Financial Highlights/Financial CalenderYear Ended 31st March 2016 2015 Rs ‘000s Rs ‘000s Summary of Results Revenue 172,498 218,623

Total Comprehensive Income (11,539) 20,632

Balance Sheet Highlights

Stated Capital 555,583 555,583

Total Equity 716,095 737,634

Net Assets 716,095 737,634

Total Assets 796,913 822,192

No of Ordinary Shares 100,000,000 100,000,000

Shareholders Information

Earnings Per Share (Rs) (0.75) (0.09)

Return on Equity (Times) (0.11) (0.01)

Net Assets Per Share (Rs) 7.16 7.38

Current Ratio (Times) 4.95 5.90

Market Price as at 31st March (Rs) 2.80 6.00

Market Capitalization as at 31st March (Rs) 280,000,000 600,000,000

Dividend Payout Rs. 0.10 per share

Financial Calendar 1st Quarter Report 15th August 2015

2nd Quarter Report 15th November 2015

3rd Quarter Report 15th February 2016

4th Quarter Report 31st May 2016

Annual Report 2015/16 31st August 2016

5th Annual General Meeting 24th November 2016

Final dividend Proposed 23nd September 2015

Final dividend Paid 8th October 2015



Chairman’s ReviewOn behalf of the Board of Directors, I have great pleasure in presenting to you the Annual report and the Audited Accounts of the Company for the year ended 31st March, 2016.

For the year 2015, Sri Lanka recorded a real GDP growth of 4.8% against 4.9% in the previous fiscal period, maintaining momentum overall. The Company had an extremely challenging period during the financial year 2015/16. MEPLC’s revenues decreased by 21% to Rs.172mn in comparison with the previous financial year. This downturn in revenue was caused by both Internal and external factors which retarded the company’s business operations, in particular with the unexpected move away of a key agency. Consequently, the total comprehensive income for the year amounted to a loss of Rs. 11.5mn, as compared with a Rs.20.6mn profit in the previous year. Regardless of the setbacks encountered, MEPLC has recently been successful

in securing new franchises in Power Generators, thus broadening its portfolio both in terms of capacity up to 3000KVA, and Country of manufacture. Hence, MEPLC is now capable of offering a wider array of power solutions from India, Europe and China. The acquisition of the new agencies will enable MEPLC to achieve a significant growth in revenue over the next year.

Sri Lanka continues to experience a substantial demand for energy. In 2015, electricity sales increased by over 6% to 13,090 GWh, from 12,357 GWh in 2014. The private hydropower generation sector contributed 1,064 GWh to capacity, compared to the 902 GWh in 2014 and total national power contribution by hydropower increased during the year to 5,968 GWh from 4,534 GWh in 2014. The power demand in Sri Lanka began escalating accompanying the boom in the tourism sector and manufacturing sector, following the end of the conflict, and this high demand growth has been sustained to date.

To cater to this demand the Government has decided to enhance over hundred megawatts to the National grid through renewable energy. The renewable energy sectors of wind, solar and hydro have been earmarked as initial alternative power sources to meet this immediate demand growth, and in this context, MEPLC envisages uplifting our hydropower Capacity in contributing to the Nation’s energy requirements. In view of the persistent delays in implementation of mini hydropower projects including transmission line and grid availability issues, the Company is also exploring investments in more mature hydropower projects which already have approval.

The country plans to achieve 20% of its total power requirement from renewable energy sources by 2020, whilst aiming to provide electrification for 100% of the population by 2017. This has created an investment climate conducive to renewable energy developers, coupled with attractive returns. Rapid technology development in solar PV cell manufacturing has also created a broader scope for investment in solar parks. We will also continue to explore opportunities in other emerging markets, in line with our commitment to long term sustainable business growth.

My sincere thanks to the Management Team and employees at all levels, who continued to work with a high level of dedication and commitment. A special word of thanks to my colleagues on the Board for their ready support and cooperation at all times and to all our stakeholders who have contributed towards the Company during this year.

Dr. C. N. A. Nonis ChairmanColombo : 28th September 2016



7

Recent Activities & Products

Generator Installation at LSR Dambulla Resort

Generator Installation at St. Anthony’s Hardware, Nawala



Recent Activities & Products (Contd)

Preparation of Thudugala Mini Hydro Power Plant for commissioning



9

Recent Activities & Products (Contd)

Operations of Labookellie Mini Hydro Power Plant



Board of Directors and the Management TeamAs at 31st March 2016

BOARD OF DIRECTORS

Dr. Chrisantha Nicholas Anthony Nonis Chairman/Non-Executive Director

Mr. Francis Lalith Fonseka Executive Director

Mrs. Shelendra Marianne Andrea Nonis Ranaweera Non-Executive Director

Mr. Dinesh Thivanka Ranaweera Executive Director

Mr Lakshman Leelaraja Samarasinghe Non–Executive Director

Mr. Lakshman Jayaraj Kumar Hettiaratchi Independent Non-Executive Director

Dr. Hasaan Shafeeu Independent Non-Executive Director

SENIOR MANAGEMENT

R. Hettige Chief Operating OfficerA. Marasinghe General Manager – Marketing S. Karunaratne General Manager – ProjectsN. Perera Manager – Finance

OPERATIONS MANAGEMENT

P. P. Wimalaratne Manager Engineering

G. De Alwis Sales & Service Manager

H. B. Prashanthi Accountant

D. Abayagunawardena Customer Service Executive

K. P. U. M. Gunarathne Stores Executive

H. Jayalath Executive Logistics

S. Gamage Executive Operations

W. D. Kularathne Consultant Renewable Energy Projects



11

Annual Report of the Board of DirectorsThe Directors of the Company have pleasure in presenting their Annual Report together with the Audited Financial Statements of Mackwoods Energy PLC for the year ended 31st March 2016.

Company’s NameThe Company name changed to Mackwoods Energy PLC following the listing on the Diri Savi Board of the Colombo Stock Exchange on 25th April 2012

Parent EnterpriseThe Company’s parent undertaking is Mackwoods (Pvt) Ltd, which is a member of the Mackwoods Group of Companies.

Principal ActivitiesThe principal activities of the Company are the provision of energy solutions covering a wide range of products and services.

Review of PerformanceA brief review of the Company performance and the state of affairs of the company during the year are given in the Financial Statements and the related notes and the Chairman’s Review.

Financial StatementsThe financial statements of the Company for the year ended 31st March 2016 are given on pages 28 to 53.

Auditors’ ReportThe Auditors’ report on the financial statements is given on page 27.

Accounting PoliciesThe accounting policies adopted in the preparation of the financial statements are given as notes to the financial statements.

Corporate GovernanceDetails of Corporate Governance practices of the company are given in the statement of the Corporate Governance.

Capital Expenditure & InvestmentsDuring the year Rs.15.0 Mn was invested in fixed assets and in hydro projects. Short-term investments in commercial papers (intergroup) amounted to Rs 261Mn as at 31st March 2016

Contingent Liabilities & Capital CommitmentsContingent Liabilities and Capital Commitments as at the year end are disclosed in Note 29.

Events occurring after the Reporting dateNo circumstances have arisen and no material events occurred since the Reporting date, which would require adjustments to or disclosure in these Financial Statements.

Financial Results and AppropriationsTotal Comprehensive Income of the Company for the financial year ended 31st March 2016 is Rs (11.539Mn) (2015: Rs. 20.6 Mn).



2014/15 2015/16 Rs. 000’s Rs. 000’s Balance brought forward -31/3/2014 112,269 92,864 Current Year’s Net Profit/ Loss after taxation 20,633 (11,539) 132,902 81,325Appropriations Transfer Revaluation Reserve (30,038) (63,683)Dividends (10,000) (10,000) Balance carried forward 92,864 7,642 Stated CapitalThe Stated Capital of the Company as at 31st March 2016 is Rs.555,583,112/- made up of 100,000,000 ordinary shares.

DirectorateThe names of the Directors of the Company who held office as at 31st March 2016 are given below and their brief profiles are given in pages 15 and 16.

Dr. C. N. A.Nonis, BSc.(Hons.)(London), MBBS (London), MRCP (UK) Chairman - (Non-Executive Director)

Mr. F. L. Fonseka, FCA, FCMA(UK) ,CGMA, MBA (Sri J) (Executive Director)

Mrs. S. M. A. Nonis Ranaweera, LL.B.(Hons.)(London), Barrister-at-Law (Gray’s Inn), Attorney-at-Law (Non-Executive Director)

Mr. D. T. Ranaweera Bsc.(Hons) (Lond) (appointed w.e.f 28th March 2016.) (Executive Director)

Mr. L. L. Samarasinghe ( Non-Executive Director)

Mr. L. J. K. Hettiaratchi, LLB, FCMA(UK),CGMA, MBCS, CITP, Attorney-at-Law (Independent Non-Executive Director)

Dr. H. Shafeeu, PhD, MEng (Hons), CEng, MIEE (Independent Non-Executive Director)

Mrs. N. S. M.Samaratunga, Mr. A. L. Yatawara, and Mr. S. M. Liyanage resigned from the Board of Directors w.e.f.31/12/2015,31/1/2016 and 31/1/2016 respectively .

Mr. D. T. Ranaweera was appointed as an Executive Director w.e.f 28 th March 2016

Special notice has been given of the intention to propose an ordinary resolution for re-election of Mr. L.L. Samarasinghe, (who reached the age of 82 years in November 2015), notwithstanding the age limit of 70 years stipulated in section 210 of the Companies Act.

Interest RegisterThe following entries have been made in the Interest Register maintained by the Company as at 31st March 2016.

Mackwoods (Private) Limited: 62,928,793 ordinary shares (62.93%)

Annual Report of the Board of Directors (Contd)



13


Dr. C. N. A. Nonis, , Mr. F. L. Fonseka, Mr. L. L.Samarasinghe, Mr. D. T. Ranaweera and Mrs. S. M. A. Nonis Ranaweera are Directors of Mackwoods (Private) Ltd.

Directors’ shareholdings in the Company as at 31st March 2016 were as follows:

Directors Share Holding as at 31/3/2016 Share Holding as at 31/3/2015

Dr. C. N. A. Nonis 3,018,707 3,018,707

Mr. F. L. Fonseka 2,667,500 3,017,500

Mr. L. J. K. Hettiaratchi 5,000 5,000

Directors’ interests in related party contracts or proposed contracts are disclosed in Note 30 to the accounts and these have been disclosed to the Board.

Directors’ RemunerationDirectors’ remuneration is disclosed in Note 10 to the Financial Statements.

AuditorsThe Accounts for the year have been audited by Messrs. Wijeyeratne & Company (Chartered Accountants) who offer themselves for reappointment. The Auditors do not have any interest in the Company other than that of auditor and provider of tax and related services.

The Auditors Messrs. Wijeyeratne & Company were paid Rs 210,382 as audit fees and Rs 30,169 as non-audit related work, which included tax consultancy work.

Shareholder Information

Shareholder Information is disclosed in page 54 and 55.

Earnings, Dividend, and Net Asset Value per shareEarnings per share, Dividend per share and net assets per share figures are given below.

2015/16 2014/15 Rs. Rs.

Earnings per Share Negative Negative

Dividend per Share - 0.10

Net assets per share 7.16 7.37

Share Trading InformationThe shares of the Company are listed in the Colombo stock Exchange from 25th April 2012. Information relating to the trading of the Company’s share during 2015/16 are given below:

2015/16 Rs.

Market Value per Share - high 6.70

Market Value per Share - low 2.80

Market Value per share - 31 March 2.80




PersonnelThe company had in its employment 22 (2015 : 22) persons as at 31 March 2016

Corporate Social Responsibility and Corporate GovernanceThe Company views itself as a responsible corporate citizen and places high degree of importance on sound Corporate Governance practices. An Audit Committee, a Remuneration Committee and a Related Party Transactions Review Committee have been set up to function as Board sub committees with directors who possess requisite qualifications and experience.

Board Committees

Audit CommitteeThe Audit Committee consisted of two Independent Non-Executive Directors, namely Mr. L. J. K. Hettiaratchi, LLB, FCMA(UK), CGMA, MBCS, CITP, Attorney-at-Law, and Dr H. Shafeeu, PhD, MEng (Hons), CEng, MIEE and Mr. L. L. Samarasinghe, Non Executive Director. Mr. L. J. K. Hettiaratchi functioned as the Chairman of the Audit Committee.

Remuneration CommitteeThe Remuneration Committee consisted of two Independent Non-Executive Directors, namely Mr. L. J. K. Hettiaratchi, LLB, FCMA(UK),CGMA, MBCS, CITP, Attorney-at-Law and Dr. H. Shafeeu, PhD, MEng (Hons), CEng, MIEE. Mr. L. J. K. Hettiaratchi functioned as the Chairman of the Remuneration Committee.

Statutory PaymentsThe Directors to the best of their knowledge and belief are satisfied that all statutory payments in relation to Employees and Government have been paid or where relevant, provided for.

Going ConcernThe Directors have adopted the going concern concept in preparing the Financial Statements.

DonationsThere were no donations given during the year ended 31st March 2016.

Annual General MeetingThe Annual General Meeting will be held on 24th of November 2016 .

Mr. D. T Ranaweera Mr. F L. Fonseka Director Director

Sgd

Mackwoods (Private) Limited Secretaries, Mackwoods Energy PLC.Colombo, 28th September 2016



15

Dr. C. N. A. Nonis - Chairman/Non-Executive Director BSc.(Hons.)(London), MBBS (London), MRCP (UK)

Dr. Nonis is the Chairman of the Mackwoods Group of Companies. He qualified in London, with a First Class Honours BSc. from Imperial College of Science, Technology and Medicine and obtained his M.B.B.S. from the Royal Free Hospital Medical School, University of London, having spent his electives at Massachusetts General Hospital, Harvard Medical School, Boston, USA. He carried out his postgraduate training at Royal Brompton, the Hammersmith, and Addenbrooke’s Hospital, Cambridge, and obtained his M.R.C.P. (U.K.). He is a Member of the Royal College of Physicians, UK, and is a Fellow of the Royal Society of Medicine, London.

Dr. Nonis is a Director of Ceylon Hotels Corporation PLC, and previously served on the Council of the Employers’ Federation of Ceylon; the Advisory Committee on Peace and Reconciliation of the Ceylon Chamber of Commerce; as President of the India Life Sciences Institute – Sri Lanka Committee; and as Deputy Chairman of the Royal Commonwealth Society in London. He served as the Sri Lankan High Commissioner to the UK from 2011 to 2014. He is a Board member of the Ramphal Institute, London and the International Advisory Council of Asia House, London.

Mr. Francis Lalith Fonseka – Executive Director FCA, FCMA (UK), CGMA, MBA (Sri J.)

Mr. Fonseka is the Joint Managing Director of Mackwoods (Pvt) Ltd. He is a Fellow of the Institute of Chartered Accountants of Sri Lanka, and a Fellow of the Chartered Institute of Management Accountants (CIMA), UK, and holds an MBA from the University of Sri Jayewardenepura and counts over 25 years of experience in the fields of finance and business.

He is a Past President of CIMA, Sri Lanka Division, and was a Member of the Developing Nations Committee of the International Federation of Accountants (IFAC). He has served on the Urgent Issues Task Force of the Institute of Chartered Accountants of Sri Lanka and was a Member of the Global Markets Committee of CIMA Global.

Mrs. S. M. A. Nonis Ranaweera - Non-Executive Director LL.B.(Hons.)(London), Barrister-at-Law (Gray’s Inn), Attorney-at-Law

Mrs. Nonis Ranaweera is a Director of Mackwoods (Pvt) Ltd. She graduated from University College London, University of London with an LLB (Hons) Degree and is a Barrister-at-Law from the Honourable Society of Gray’s Inn, UK and an Attorney-at-Law.

Mrs. Nonis Ranaweera is a Partner of Julius & Creasy – Attorneys-at-Law, Solicitors and Notaries Public and is attached to the Corporate Law Department. Mrs. Nonis Ranaweera serves as a Council Member of the Royal Commonwealth Society – Sri Lanka, a Member of the Zonta Club 1 of Colombo, and also serves as a Trustee of the Sriyani Nonis Charitable Trust.

Mr. D. T. Ranaweera - Executive DirectorB.Sc. (Hons.)(London)

Mr. Ranaweera is a Director of Mackwoods (Pvt) Ltd. Mr. Ranaweera graduated from University College London, University of London, with a B.Sc. (Hons.) Degree in Mathematics and Computer Science. He has also been a Director of Royal Hospital (Pvt) Ltd since 2007.

Mr. L. L. Samarasinghe – Non-Executive Director

Mr. Samarasinghe is a Director of Mackwoods (Pvt) Ltd and a Director of Lee Hedges (Pvt) Ltd. He was the former Managing Director of Mackwoods (Pvt) Ltd. He has also held the positions of Chairman of the Employers’ Federation of Ceylon, President of the National Chamber of Commerce, Director of Ceylon Oxygen Ltd. and a Member of the Coconut Development Authority. Mr. Samarasinghe was a Member of the Inland Revenue Board of Review.

Directors’ Profile



Mr. Lakshman Jayaraj Kumar Hettiaratchi – Non-Executive Independent Director LLB, FCMA (UK), CGMA, MBCS, CITP, Attorney-at-Law

Mr. Hettiaratchi is a Management Consultant, and a Director of several companies, former member of the Council of University of Moratuwa, former Member of the National Education Commission. He was a Director of Sampath Bank PLC and is a Former President of the Organisation of Professional Associations of Sri Lanka, former President of Chartered Institute of Management Accountants- Sri Lanka Branch and the former Country Manager of IBM World Trade Corporation, Sri Lanka.

Dr. Hassan Shafeeu– Non-Executive Independent Director PhD, MEng (Hons), CEng, MIEE

Dr. Shafeeu qualified in London with a First Class Honours in MEng from the University College London, University of London winning the Clinton Prize for the year 1990 for outstanding performance. He obtained his PhD in Electronic and Electrical Engineering and carried out his Post Doctoral Research in University College London, University of London.

Dr. Shafeeu presently works as PMTS Product Definition for Maxim Integration Solutions Ltd, a public company based in the USA and counts over 25 years of wide ranging experience at senior positions in the fields of telecommunications/engineering, in the UK, USA and the Maldives.

Directors’ Profile (Contd)



17

Statement of Corporate GovernanceMackwoods Energy PLC is committed to maintaining the highest standards of Corporate Governance by which the Company is managed and controlled and decision making is carried out for value creation and long term sustainability of the Company. In line with this, the Company has complied with the Code of Best Practice on Corporate Governance as detailed below.

The BoardDuring the year their were changes to the Board and presently it comprises of 02 Executive Directors and 05 Non-Executive Directors, including the Chairman. The names of the Directors and their brief profiles are given on pages 15 to 16. The Board has determined that two of the Non-Executive Directors, namely Mr. L. J. K. Hettiaratchi and Dr. H. Shafeeu satisfy the criteria to be independent Non-Executive Directors. The Board has an appropriate balance of skills, experience, knowledge and independence, enabling it to carry out their duties and responsibilities effectively. The Directors are responsible for protecting the rights and interests of the shareholders and are accountable to them.

The Board meets periodically and has dedicated the responsibility of the day-to-day management of the Company to the Managing Director and Chief Operating Officer who are assisted by the Executive Directors.

As per the Articles of Association of the Company, Directors are not subject to retirement by rotation.

Management CommitteeThe Board has appointed a Management Committee consisting of nominated Directors and Senior Management, that reviews the annual budget, monthly performance, progress reports on projects, capital expenditure proposals, and business strategies prior to recommending them to the Board. The Committee meets every month, and reports are submitted to the Board.

Internal Control & Risk managementThe Directors are responsible for the Company’s system of internal controls. The system in place is designed to safeguard assets against unauthorized use or disposal, and to ensure that proper accounting records are maintained, and that reliable financial information is generated. However, any system can provide only reasonable and not absolute assurance, that errors and irregularities are prevented or detected within a reasonable time.

The key procedures in place to discharge this responsibility are as follows:

• The Executive, Directors Chief Operating Officer and the Management Team establish and monitor financial controls appropriate for the operation and reports to the Board thereon and the Board reviews the strategy of the Company.

• Annual budgeting and regular forecasting processes are in place, and the Management Committee reviews performance reports.

• The Board has established policies with regard to investment and capital expenditure and employ adequate risk management processes.

• The Company uses the groups internal/Management audit function and Management Committee reviews the process/reports.

• The Company selects and trains employees and provides appropriate channels of communication to foster a control conscious environment.

• The Board has reviewed the effectiveness of the system of financial control for the period up to the date of signing the accounts. The Directors’ Responsibilities for the financial statements are described in page 24.



Remuneration CommitteeThe Remuneration committee during the year consisted of two independent Non- Executive Directors, namely Mr. L. J. K. Hettiaratchi (LLB, FCMA(UK), CGMA, MBCS,CITP, Attorney-At-Law), Dr. H Shafeeu (PhD, MEng (Hons.), CEng, MIEE). Mr. Hettiaratchi functioned as the Chairman of the Remuneration Committee. The Committee recommends to the Board the framework for the remuneration benefits and incentives for Executive Directors, including terminal benefits.

Remuneration PolicyThe Remuneration Policy is to support the recruitment, motivation and retention of high caliber individuals, having regard to business objectives, performance and stakeholder expectations. In setting remuneration policy, the Committee is guided by individual and collective performance and market information available and endeavors to align policy on remuneration and incentives, to the achievement of key corporate objectives and performance.

Directors’ remuneration is reported in Note 10 to the Financial Statements.

Audit CommitteeThe Audit committee consisted of two independent Non- Executive Directors, namely Mr. L. J. K. Hettiaratchi (LLB, FCMA(UK), CGMA, MBCS, CITP, Attorney-At- Law, and Dr. Hashan Shafeeu (PhD, MEng (Hons.), CEng, MIEE, and Mr. L. L. Samarasinghe Non-Executive Director. Mr. L. J. K. Hettiaratchi functioned as the Chairman of the audit committee.

During the year under review, the Committee met on 02 occasions. The Managing Director/CEO, Director/General Manager, Finance Manager and Directors and Senior Management Team participated in the Audit Committee meetings by invitation as required. The Committee assists the Board oversight of the compliance with financial accounting and reporting standards and requirements, Company’s internal controls and risk management procedures, going concern status and independence and performance of the Company’s external Auditors. The Audit Committee recommends the appointment, terms of engagement, and fees of the External Auditors. The Audit Committee Report appears on page 25.

Statement of Corporate Governance (Contd)



19

Levels of compliance with the CSE’s Listing Rules Section 7.10. Rules on Corporate Governance are given below:

RULE NO. SUBJECT APPLICABLE REQUIREMENT

COMPLIANCE STATUS DETAILS

7.10.1. (a) Non –Executive Directors

At least one-third of the total number of Directors should be Non-Executive Directors

√ Five out of Seven Directors are Non-Executive Directors

7.10.2. (a) Independent Directors

Two or one third of Non-Executive Directors, whichever is higher should be independent

√ Two out of Five Non-Executive Directors are Independent.

7.10.2. (b) Independent Directors

Each Non-Executive Director should submit a declaration of independence /non independence in the prescribed format.

√ Non-Executive Directors have submitted these declarations

7.10.3. (a) Disclosure Relating to Directors

Names of Independent Directors should be disclosed in the Annual Report

√ Please refer page 10 under the heading “Board of Directors”

7.10.3. (b) Disclosure Relating to Directors

The basis for the Board to determine a Director is Independent, if criteria specified for Independence is not met.

√ Please refer page 10 under the heading “Board of Directors”

7.10.3. (c) Disclosure Relating to Directors

A brief resume of each Director should be included in the Annual Report and should include the Director’s areas of expertise

√ Please refer Profile of Directors

7.10.3. (d) Disclosure Relating to Directors

Forthwith provide a brief resume of Compliant new Directors appointed to the Board with details specified in 7.10.3 (a), (b) and (c) to the Exchange

√ Not Applicable

7.10.5 Remuneration Committee

A listed company shall have a Remuneration Committee

√ Please refer page 18.

7.10.5. (a) Composition of Remuneration Committee

Shall comprise Non-Executive Directors a majority of whom will be independent





7.10.5. (b) Functions of Remuneration Committee

The Remuneration Committee shall recommend the remuneration of Chief Executive Officer and Executive Directors


7.10.5. (c) Disclosure in the Annual Report relating to Remuneration Committee

The Annual Report should set out:

(a) Names of Directors comprising the Remuneration Committee

(b) Statement of Remuneration Policy

(c) Aggregated remuneration paid to Executive and Non- Executive Directors


7.10.6. Audit Committee The Company shall have an Audit Committee

√ Please refer page 25

7.10.6.(a) Composition of Audit Committee

Shall comprise of Non-Executive Directors, a majority of whom will be Independent Non-Executive Directors shall be appointed as the Chairman of the Committee. Chief Executive Officer and Chief Financial Officer should attend Audit Committee Meetings. The Chairman of the Audit Committee or one member should be a member of a professional accounting body.

√ Managing Director/Chief Executive Officer, Director/General Manager , Chief Operating Officer and Financial Officers attend meetings by invitation

Chairman of the Audit Committee is a Senior Fellow Member of CIMA, UK






21

7.10.6. (b) Audit Committee Functions

Functions shall include:

(a) Overseeing of the preparation, presentation and adequacy of disclosures in the Financial Statements in accordance with Sri Lanka Accounting Standards.

(b) Overseeing of the compliance with financial reporting requirements, information requirements of the Companies Act and other relevant Financial reporting related to regulations and requirements

(c) Overseeing the processes to ensure that the internal controls and risk management are adequate to meet the requirements of the Sri Lanka Auditing Standards.

(d) Assessment of the independence and performance of the external auditors.

(e) Make recommendations to the Board pertaining to appointment, reappointment and removal of external auditors and approve the remuneration and terms of engagement of the external auditors.

√ The terms of reference of the Audit Committee have been agreed by the Board






7.10.6. (C) Disclosure in the Annual Report relating to Audit Committee

(a) Names of Directors comprising the Audit Committee

(b) The Audit Committee shall make a determination of the independence of the Auditors and disclose the basis for such determination

(c) The Annual Report shall contain a Report of the Audit Committee setting out the manner of compliance with their functions

√ Please refer Audit Committee Report






23

Risk ManagementMackwoods Energy is exposed to various risks, which the Board of Directors manage by adopting a systematic process of the identification, assessment and mitigation of the risks and thereby driving the Company towards achieving the corporate objectives and maintaining sustainable growth.

Given below are the main risks that are applicable for the current operations of the Company

Operational Risks The company is vulnerable to operational risks arising from day-to-day operations including government policy on Renewable Energy, increasing competition and dependence on product manufacturers and suppliers. The successful track record and reliability of the Company’s products and services and strong relationships and agreements in place with suppliers and manufacturers of products mitigate these risks. Further, strong internal controls, procedures, checks, and balances of key activities have been implemented to mitigate operational risks.

Economic Risk This refers to the changes in the macro economic factors (Eg. Interest rate and inflation) and policies relating to electricity tariffs and electrification policies as priorities. Comprehensive analysis of the macro economic variables and monitoring of key variables impacting on the cost variation enables the Company to address this risk.

Credit Risks Trading activities are exposed to market conditions and customer credit issues. This risk is mitigated through stringent credit control measures including the evaluation of credit worthiness of customers, fixing credit limits and monitoring/ active follow up of debtors and through bank guarantees and credit exposure mitigation measures.

Exchange Rate Risk Since imports are in foreign currency, undue fluctuations in the exchange rates may have an adverse impact on the business. This however is a risk affecting imports trade in general and not a company specific risk. This risk is mitigated through quotations for supply of products, keeping provision for price fluctuations and by the broad basing of revenue streams.

Regulatory procedures and tariff policies

The Company is exposed to potential changes in regulatory procedures in the approval process of Renewable Energy projects, the time lag in coordinating with multiple state organizations in the approval pipeline and the periodic changes in tariff policies for renewable and thermal energy sources. The PUCSL may revise the power purchase tariff based on the tariff structure chosen by the state power utility.

Human Resources Risk The Company is dependent on the performance of its key employees. As a measure to develop well being of its employees the company has undertaken human resource initiatives including the provision of relevant training and development, attractive remuneration, performance linked reward system and welfare facilities.



Statement of Directors’ ResponsibilityThe responsibilities of the Directors in relation to the Financial Statements of the Company are detailed below. The responsibility of the Auditors’ in relation to the Financial statements is set out in the Independent Auditors’ Report appearing on page

The Directors are responsible, under the Companies Act No. 7 of 2007, to prepare Financial Statements and the Annual Report for each financial year, which give a true and fair view of the state of affairs of the Company as at end of the financial year and the profit and loss during the financial year.

The Directors consider that, in preparing the Financial Statements on pages 32 to 53 the Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, and that accounting standards, which they consider to be applicable have been followed.

The Directors have responsibility for ensuring that the Company keeps accounting records, which disclose with reasonable accuracy the financial position of the Company and which enable them to ensure that financial statements comply with the Companies Act No. 7 of 2007. The Directors have general responsibility for taking reasonable measures, to safe guard the assets of the Company and to prevent and detect frauds and other irregularities.

The Directors are required to prepare the Financial Statements and to provide the Auditors with every opportunity to undertake whatever inspections they consider appropriate to enable them to submit their audit report.

The Directors confirm that they have complied with these requirements. They have a reasonable expectation, after making enquiries and following a review of the Company’s budget for the ensuing year, including cash flows and borrowing facilities, that the Company has adequate resources to continue in operational existence for the foreseeable future, and therefore have continued to adopt the going concern basis in preparing the accounts.

The Directors are confident that they have discharged their responsibility as set out in this statement. They also confirm that to the best of their knowledge all-statutory payments payable by the Company as at the Balance Sheet date have been paid or where relevant, provided for.

By Order Of The Board

Mackwoods (Pvt) LtdSecretaries - Mackwoods Energy PLCColombo, 28th September 2016



25

Audit Committee ReportThe Audit committee assisted the Board inter alia on the over sight of the effectiveness of the functions described in the Statement of Corporate Governance.

Mr. L. J. K. Hettiaratchi (LLB, FCMA(UK), MBCS,CITP), Attorney-At- Law, functioned as the Chairman of the audit committee and the Audit committee consisted of Independent Non-Executive Director, namely Dr. H. Shafeeu (PhD, MEng (Hons.), CEng, MIEE, and Mr. L. L. Samarasinghe Non-Executive Director.

The Committee had two meetings during the year. Mr. L. J. K.Hettiaratchi and Mr. L. L. Samarasinghe attended both meetings and Dr. H. Shafeeu joined one meeting through electronic media. The Managing Director, Director/General Manager and the Financial Officers attended the audit Committee meetings. The Management Team was present at discussions, as required. Other Directors and the external auditors were present on invitation as required. Audit Committee deliberations and findings are reported to the Board.

The Committee assisted the Board oversight of the:

• Financial reporting, internal controls and risk management and internal and external audit framework.

• Assessment of the Company’s internal controls and risk management framework.

• Compliance with reporting standards.

• The effectiveness of the internal audit function and the external auditors independence.

The Committee reviewed the quarterly financial statements of the Company and the consistency, of accounting policies adopted.

The Committee reviewed changes in the risk profile effecting the Company and risk management processes in place in consultation with the Senior Management Team.

The Committee reviewed the internal audit activities undertaken by the Group Internal Audit Division and the adequacy of internal control systems with regard to corporate assets.

The Managing Director and Management team assisted the Committee by providing necessary information and cooperation to carry out its activities effectively.

Having carefully reviewed the scope of audit and assessed the other services provided by the external auditors, the committee is satisfied that the independence of the external auditors has not been adversely affected. The Committee has recommended to the Board of Directors that Wijeyeratne & Company (Chartered Accountants) be reappointed as Auditors for the financial year ending 31st March 2017, subject to the approval of the shareholders at the Annual General Meeting.

Signed

L. J. K. Hettiaratchi Chairman – Audit Committee 28th September 2016



Related Party Transactions Review Committee

Formation of the CommitteeIn compliance with the code of best practices on Related Party transactions issued by the Securities and Exchange Commission of SriLanka, the Board of Directors of Mackwoods Energy PLC formed the Related Party Transactions Review Committee (RPTRC) in February 2016.

Purpose of the CommitteeThe purpose of the committee is to conduct an independent review, approval and oversight of all related party transactions of the company and to ensure that the company complies with the rules set out in the code.

Composition of the CommitteeThe Board appointed a combination of two independent Non Executive Directors and one Non Executive Director as stipulated by the listing Rule 9.2 on Related Party Transactions Review Committee issued by the Colombo Stock Exchange.

The RPTRC at year end comprised of the following members.Mr.L.J.K.Hettiaratchi - INED-ChairmanMr.L.L. Samarasinghe - NED Dr. Hassan Shafeeu - INED

Responsibilites of the Related Party Transaction Review CommitteeThe Committee has identified the following key responsibilities and have set out in the charter for RPTRC.

• Ensure that the company complies with the rules set out in the Code.• Review in advance all related party transactions subject to the exceptions given under rule 27 of the

Code.• Conduct meetings quarterly and report to the Board on the committee’s activities.• Review the Charter periodically and as and when appropriate recommend amendments to the Charter

and Policies to the Board.• As assigned by law and regulations or the Board perform such other functions as required.

MeetingsSince forming the Committee in February 2016 no meetings were held during the period due to the changes in the Board and the short time period from the formation of the committee to the financial year end.However the company will schedule quarterly meetings to review and report to the Board on matters involving RPT from the year 2016/17 onwards.

Sgd.

L.J.K.Hettiaratchi -Chairman

28th September 2016



27

Independent Auditor’s ReportWijeyeratne & Company

Chartered aCCountants

15, Maitland Crescent, Colombo 7. P.O. Box 191, Colombo, Sri Lanka.Phone : (94) 11- 2693147/8 2678256/7 5736996/5736933 5736878/5736844Fax : (94) 11- 2693839E mail : [email protected] : www.wijeyaratne.com

Partners : C. S. Wijeyaratne FCA FCMA, W. J. L. S. Fernando ACA, FCMA Mrs. D. N. Perera ACA, FCMA, B.Sc, Mrs. N. S. Perera ACA, S. Egodagamage ACA, BSc (Bus. Admin) Sp. (USJ)

REPORT OF THE AUDITORS

TO THE MEMBERS OF MACKWOODS ENERGY PLC

Report on The Financial Statements

We have audited the accompanying financial statements of Mackwoods Energy PLC (‘the Company’) which comprise the statement of financial position as at 31st March 2016, and the statement of profit or loss and other comprehensive Income, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information (set out on 28 to 53).

Board’s Responsibility for the Financial StatementsThe Board of Directors (“Board”) is responsible for the preparation of these financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur 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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Board, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the company as at March 31, 2016 and of its financial performance and cash flow for the year then ended in accordance with Sri Lanka Accounting Standards.

Report on other Legal and Regulatory Requirements

As required by the section 163(2) of the Companies Act No. 07 of 2007, we state the following:a) The basis of opinion and scope and limitations of the audit are as stated above.b). In our opinion - we have obtained all the information and explantions that were required for the audit and as far as appears from our

examination, proper accounting records have been kept by the Company,

- the financial statements of the Company, comply with the requirements of section 151 of the Companies Act.

CHARTERED ACCOUNTANTS Colombo,

28th September 2016



Statement of Comprehensive IncomeFor the year ended 31st March, 2016 Notes Year Ended Year Ended 31.03.2016 31.03.2015 Rs. Rs. REVENUE 6 172,498,185 218,623,150

Cost of Sales (136,982,506) (166,811,806)

GROSS PROFIT 35,515,679 51,811,344

Distribution Expenses (42,226,337) (45,976,049)

Administrative Expenses (69,829,253) (19,370,183)

Other Expenses 7 (8,023,250) (8,508,721)

Finance Cost 8 (5,420,129) (3,095,723)

Finance Income 9 18,465,801 19,447,339

Net Finance Income 13,045,672 16,351,616

PROFIT / (LOSS) BEFORE TAX 10 (71,517,489) (5,691,993)

Income Tax Expense 11 (3,705,230) (3,712,905)

PROFIT / (LOSS) FOR THE YEAR (75,222,719) (9,404,898)

OTHER COMPREHENSIVE INCOME

Gain on Revaluation of Land and Building 65,350,000 30,169,046

Tax on Other Comprehensive Income (1,667,000) (131,333)

OTHER COMPREHENSIVE INCOME FOR THE YEAR 63,683,000 30,037,713

TOTAL COMPREHENSIVE INCOME FOR THE YEAR (11,539,719 ) 20,632,815

Profit /(Loss) Attributable to:

Owners of the Company (75,222,719) (9,404,898)

Profit /(Loss) for the year (75,222,719) (9,404,898)

Total Comprehensive Income Attributable to:

Equity holders of the Company (11,539,719) 20,632,815

TOTAL COMPREHENSIVE INCOME FOR THE YEAR (11,539,719) 20,632,815

(Loss)/ Earnings per Share - Basic - (Rs) 12 (0.75) (0.09)

The notes on Pages 32 through 53 form an integral part of the Financial Statements



29

Statement of Financial Position RestatedAs at 31st March, 2016 Notes 31.03.2016 31.03.2015 Rs. Rs.

ASSETS.Non-Current Assets Property, Plant and Equipment 13 430,584,676 357,566,642 430,584,676 357,566,642 Current Assets Inventories 15 13,579,288 49,383,394 Trade and Other Receivable 16 46,831,938 96,538,975 Amount due from Related Parties 17 43,446,883 54,787,292 Short Term Investments 18 261,000,000 261,000,000 Cash and Cash Equivalents 19 1,470,421 2,915,544 366,328,530 464,625,205 TOTAL ASSETS 796,913,206 822,191,847

EQUITY AND LIABILITIES Capital and Reserves Stated Capital 20 555,583,112 555,583,112 Capital Reserve 21 152,871,059 89,187,059 Revenue Reserves 7,641,897 92,864,616 Total Equity 716,095,068 737,634,787 Non-Current Liabilities Deferred Tax Liabilities 22 5,672,006 3,173,893 Retirement Benefit Obligation 23 806,129 1,551,371 Interest bearing Borrowings 24 361,829 1,036,496 6,839,964 5,761,760 Current Liabilities Trade and Other Payable 25 29,780,958 53,578,541 Tax Payable 20,837,117 22,337,250 Amount due to Related Parties 26 2,056,512 1,356,512 Interest bearing Borrowings 24 333,997 1,522,997 Short Term Borrowings 20,969,590 - 73,978,174 78,795,300 TOTAL EQUITY AND LIABILITIES 796,913,206 822,191,847

The notes on Pages 32 through 53 form an integral part of the Financial Statements

I certify that the financial statements of the company comply with the requirements of the Companies Act No. 07 of 2007.

Finance Manager ……………………………

The Board of Directors is responsible for the Preparation and Presentation of these Financial Statements

Signed for and on behalf of the Board

Dr. C. N. A. Nonis F . L. Fonseka Chairman / Director Director Colombo, 28th September 2016



Statement of Changes in EquityFor the year ended 31st March, 2016 Attributable to owners of the company

Stated Revaluation Retained Total Capital Reserve Earnings Rs. Rs. Rs. Rs. Balance at 31 March 2014 - As previously stated 555,583,112 59,149,346 122,295,005 737,027,463 Prior Year Adjustment (Note 29) - - (10,025,491) (10,025,491) Balance at 31 March 2014 - Restated 555,583,112 59,149,346 112,269,514 727,001,972 Dividend Paid - For the year of assessment 2013/2014 - - (10,000,000) (10,000,000) Comprehensive Income for the year Loss for the year - - (9,404,898) (9,404,898) Other comprehensive income - 30,037,713 - 30,037,713 Total comprehensive income - 30,037,713 (9,404,898) 20,632,815 Balance as at 31st March 2015- Restated 555,583,112 89,187,059 92,864,616 737,634,787 Transaction with owners of the Company recognised directly to Equity Dividend Paid - For the year of assessment 2014/2015 - - (10,000,000) (10,000,000) Comprehensive Income for the year Loss for the Year - - (75,222,719) (75,222,719)Other comprehensive income - 63,683,000 - 63,683,000 Total comprehensive income - 63,683,000 (75,222,719) 11,539,719 Balance as at 31st March 2016 555,583,112 152,870,059 7,641,897 716,095,068



31

Statement of Cash FlowFor the year ended 31st March, 2016 31.03.2016 31.03.2015 Rs. Rs.

Cash Flow from Operating Activities (Loss) Before Income Tax Expense (71,517,489) (5,691,993) Adjustments for ; Depreciation on Property, Plant and Equipment 3,069,895 3,001,436Provision for Gratuity 145,508 956,367 Lease Interest 488,291 694,163Interest Income (15,791,849) (19,433,959) Operating (Loss)/ Profit before Working Capital Changes (83,605,644) (20,473,989) (Increase) /Decrease Inventories 35,804,106 (20,964,351)Decrease Trade and Other Receivables 49,707,037 25,095,401 Decrease Amount due from Related Parties 11,340,409 1,353,112 Decrease Amount due to Related Parties 700,000 (500,000)Decrease in Trade and Other Payables (23,797,583) 26,636,744 Cash Generated from Operations (9,851,675) 11,146,920 Income Tax Paid (4,374,250) (2,858,575)Gratuity Paid (890,750) (308,750) Net Cash Flows generated from Operating Activities (15,116,675) 7,979,595 Cash Flows from Investing Activities Interest Income 15,791,849 19,433,959Purchase of Property, Plant and Equipment (10,737,929) (23,356,405) Net Cash Flow used in Investing Activities 5,053,920 (3,922,446) Cash Flow from Financing Activities Dividend Paid (10,000,000) (10,000,000)Repayment of the Lease (2,351,958) (2,217,168) Net Cash Flow used in Financing Activities (12,351,958) (12,217,168) Net Decrease in cash and cash equivalents (22,414,713) (8,160,019)Cash and Cash Equivalents at the Beginning of the Year 2,915,544 11,075,563 Cash and Cash equivalents at the end of the Year (19,499,169) 2,915,544 Analysis of Cash and Cash equivalents Cash and Cash Equivalents at the end of the Year Cash and cash equivalents 1,470,421 2,915,544 Short Term Borrowings (20,969,590) - (19,499,169) 2,915,544



Notes to the Financial Statements1. Corporate Information

1.1 Reporting Entity

General Mackwoods Energy PLC is a limited liability company incorporated and domiciled in Sri Lanka.. The

registered office of the company is located at No. 10. Gnanartha Pradeepa Mawatha, Colombo 8 and the principal place of business is situated at the above address.

The company has been re-registered under the new Companies Act. No. 07 of 2007 and the registration number of the Company is PV 17807 PB/PQ.

Mackwoods Energy PLC was listed on 25th April 2012 at the Diri Savi Board of the Colombo Stock Exchange. Pursuant to the special resolution passed by the shareholders, name of the company was changed from Mackwoods Energy Limited to Mackwoods Energy PLC.

Principal Activities and Nature of Operations During the year the principal activity of the company was providing total energy solutions with a wide

range of products and services.

Parent Enterprise and Ultimate Parent Enterprise The company’s parent and ultimate parent undertaking is Mackwoods (Pvt) Ltd which is incorporated in

Sri Lanka.

Number of Employees The number of employees of the company at the end of the year was 22 (2013/2014 - 22)

2. Summary of Significant Accounting Policies The principal accounting policies adopted in the preparation of these financial statements are set out

below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of Preparation

The financial statements are prepared in accordance with and comply with Sri Lanka Financial Reporting Standards (SLFRSs). The financial statements have been prepared under the historical cost basis, revaluation of available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The preparation of financial statements in conformity with SLFRSs and requires the use of certain critical accounting estimates. It requires management to exercise their judgment in the process of applying the Company’s accounting policies. The areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5.

2.2 Approval of Financial Statement The Financial Statement for the year ended 31st March 2016 were authorised for Issue in accordance with

a resolution of the Board of Directors on the 30th August 2016.

2.3 Changes in accounting policy and disclosures New standards and interpretations not yet adopted by the Company SLFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial

assets and financial liabilities. The complete version of SLFRS 9 was issued in July 2014. It replaces the guidance in LKAS 39 that relates to the classification and measurement of financial instruments.

31st March, 2016



33

Notes to the Financial Statements (Contd)

SLFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value through profit or loss. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in LKAS 39.

For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. SLFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under LKAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Company is yet to assess SLFRS 9’s full impact.

SLFRS 15, Revenue from contract with customers, establishes a new five-step model that will apply to revenue arising from contracts with customers. Under SLFRS 15 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in SLFRS 15 provide a more structured approach to measuring and recognising revenue. The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under SLFRS. Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 with early adoption permitted. The Company is currently assessing the impact of SLFRS 15 and plans to adopt the new standard on the required effective date.

2.4 Going concern

After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing its financial statements.

2.5 Foreign currency transactions

a) Functional and presentation currency Items included in the financial statements of the Company are measured using the currency of the primary

economic environment in which the entity operates (‘the functional currency’). The Financial Statements are presented in Sri Lankan Rupee (LKR) which is the Company’s functional and presentation currency.

b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates

prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the income statement within ‘other (losses) / gains – net’.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

31st March, 2016



2.6 Property, Plant and Equipment Property, plant and equipment are tangible items that are held for use in the production or supply of goods

or services, for rental to others, or for administrative purposes and are expected to be used during more than one year.

Cost and Valuation All property, plant and equipment is initially recorded at cost and stated at historical cost less depreciation.

Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All repairs and maintenance costs are charged to statement of comprehensive income during the financial period in which they are incurred.

Depreciation

The provision for depreciation is calculated by using a straight line method on the cost or revaluation of all, Property, Plant and Equipment other than freehold land and capital WIP, in order to write off such amounts over the following estimated useful lives by equal installments.

Depreciation is provided proportionately in the year of purchase and in the year of disposal of assets.

The principal annual rates for depreciation has been used are given below ;

Office Equipment 25% Motor Vehicles 25% Building 2% Tools and Equipment 25% Computer Equipment 25% Furniture and Fittings 25%

Derecognition An item of Property, Plant and Equipment is derecognised upon disposal of or when no future economic

benefits are expected from its use or disposal. Gains and losses arising on derecognition of the asset are determined by comparing the proceeds from disposal with the carrying amount of Property, Plant and Equipment and are recognised net within ‘Other Income’ in profit and loss.

Repairs and maintenance Repairs and maintenance are charged to the profit or loss in the statement of comprehensive income

during the period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Company. This cost is depreciated over the remaining useful life of the related asset.

2.7 Impairment of non-financial assets

Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels

Notes to the Financial Statements (Contd)31st March, 2016



35


for which there are separately identifiable cash flows (cash-generating units). Prior impairments of nonfinancial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

2.8 Financial assets

Classification The Company classifies its financial assets in the following categories: at fair value through profit or loss,

loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is

classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are

not quoted in an active market. They are included in current assets as trade and other receivables except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Company’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the Statement of Financial Position.

c)Available-for-salefinancialassets Available-for-sale financial assets are non-derivatives that are either designated in this category or not

classified in any of the other categories. They are included in non-current assets unless management intends to dispose of them within 12 months of the reporting period.

The Company does not have “Financial assets at fair value through Profit or Loss and Avilable-for-Sales financial assets” on the reporting date.

Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-date – the date on which

the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within other (losses) / gains – net, in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income statement as part of other income when the Company’s right to receive payment is established.

Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income.

When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as ‘gains and losses from investment securities’.

31st March, 2016




Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of other income. Dividends on available-for sale equity instruments are recognised in the income statement as part of other income when the Company’s right to receive payments is established.

2.9 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

2.10 Impairment of financial assets

Assets carried at amortised cost The Company assesses at the end of each reporting period whether there is objective evidence that a

financial asset or group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

2.11 Financial liabilities The Company’s financial liabilities include trade and other payables, bank loans and other borrowings,

unfavourable currency forward contract and obligations under finance leases. All other financial liabilities except for financial liabilities at fair value through profit or loss are recognised initially at their fair values and subsequently measured at amortised cost, using the effective interest method, unless the effect of discounting would be insignificant, in which case they are stated at cost.

2.12 Short Term Investments Unquoted investments in shares held on long-term basis are measured at cost, less impairment losses.

Provision for impairment is made when, in the opinion of the Directors there has been a decline other than temporary in the value of the investment.

Short Term Investment in Commercial paper are measured at cost less impairment losses.

2.13 Inventories Inventories are valued at the lower of cost or net realizable value, after making due allowances for obsolete

and slow moving items. Net realizable value is the price at which finished goods and consumables can be sold in the normal course of business less the estimated cost of completion and the estimated cost necessary to make the sale.

The cost of each category of inventory is determined on the following basis. Finished Goods-Generators - At Weights average cost on FIFO Basis Spare parts - At Weights average cost on FIFO Basis Goods in transit - At Actual cost

31st March, 2016



37


Financial Assets are considered to be impaired when there is objective evidence that as a result of one or more event that occurred after the initial recognition of the financial assets, the estimated future cash from the asset have been affected.

2.14 Trade receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the

ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer),they are classified as current assets. If not, they are presented as non-current assets.

2.15 Cash and cash equivalents

In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities.

2.16 Stated capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction,net of

tax, from the proceeds.

2.17 Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course

of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.18 Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are

subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

2.19 Borrowing costs General and specific borrowing costs directly attributable to the acquisition, construction or production of

qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

31st March, 2016



2.20 Taxation

a) Current taxes Statements and computed in accordance with the provisions of Inland Revenue Act, No: 10 of 2006.

b) Deferred income taxes Deferred income tax is provided in full, using the liability method, on temporary differences arising

between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it is arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

2.21 Provisions Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the

Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligations using the pre-tax rate that reflects current market assessment of the time value of money and risks specific to the obligations. The increase in the provision due to passage of time is recognised as interest expense.

2.22 Employeebenefits

a) Defined benefit obligation A defined benefit plan is post-employment benefit plan other than a defined contribution plan. The

liability recognised in the Financial Statements in respect of defined benefit plans is the present value of the defined benefit obligation at the reporting date. The Projected Unit Credit (PUC) method as recommended by LKAS 19.

The liability is neither externally funded nor actuarially valued.

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

Employees are eligible for contributions to Employees’ Provident Fund and Employees’ Trust Fund in line with the respective Statutes and Regulations. The company contributes 12% and 3% of gross emoluments of employees to the Provident Fund (maintained by parent company - Mackoods Pvt Ltd) and Employees’ Trust Fund respectively and is recognised as an expense in profit and loss in the periods during which services are rendered by employees.




39


Short Term benefits Short Term Employees benefit obligations are measured on an undiscounted basis and are expensed as the

related service is provided.

2.23 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and

services in the ordinary course of the Company’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts.

The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Company’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

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

the goods have passed to the buyer, usually on delivery of the goods.

Interest on loan Interest income is recognised in profit and loss as it accrues and is calculated by using the effective interest

rate method.

Gains and losses on disposal of Property, Plant and Equipment Gains and losses on disposal of an item of Property, Plant and Equipment are determined by Equipment

are determined by comparing the net sales proceeds with the carrying amounts of Property, Plant and Equipment and are recognised within ‘other operating income’ in the Income Statement.

Others

Other income is recognised on an accrual basis.

2.24 Expenditure Recognition Expenses are recognised in profit and loss on the basis of a direct association between the cost incurred

and the earning of specific items of income.All expenditure incurred in the running of the business and in maintaining the Property, Plant and Equipment in a state of efficiency has been charged to income in arriving at the profit for the year.

For the purpose of presentation of the Income Statement,the Directors are of the opinion that ‘function of expenses method’ presents fairly the elements of the company’s performance and hence such presentation method is adopted.

2.25 Leases Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are

classified as operating leases. Payments received under operating leases are credited to profit or loss on a straight-line basis over the period of the lease.

2.26 Dividend distribution Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

31st March, 2016




3 Financial risk management The principal financial instruments of the Company comprise of bank loans, short term deposits, money

market investments, equity investments and cash. The main purpose of these finance instruments is to raise and maintain liquidity for the Company’s operations, and maximize returns on the Company’s financial reserves. The Company has various other financial instruments such as trade receivables and trade payables which arise directly from its business activities.

The Company is exposed to a variety of financial risks. These include foreign exchange risks, credit risks, interest rate risks, liquidity risks and investment risks. Based on our economic outlook and the Company’s exposure to these risks, the Board of Directors of the Company approves various risk management strategies from time to time.

a) Market risk

Foreign Currency risk Foreign currency risk is managed by a combination of the finance function and currency forwards. Its

objective is to minimise losses arising from the Company’s exposure to various currencies by attempting to match foreign currency denominated current liabilities against current assets of similar currencies to the extent possible.

In the ordinary course of business, the Company enters into transactions denominated in foreign currencies and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollars. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities.

At 31 March 2016, if the currency had weakened / strengthened by 3% against the US Dollar with all other variables held constant, post-tax profit for the year would have been Rs. 954,593 (2015: Rs. 963,329 ) higher / lower, mainly as a result of foreign exchange gains / losses on translation of US Dollar denominated bank balances, trade receivables and trade accounts payable.

Cashflowandfairvalueinterestraterisk Interest rate risk is managed by the finance function. It’s objective is to minimise the cost of financing

through the placement of temporary excess funds in high yielding money market investments and cash deposits and to the extent possible by re-scheduling more expensive borrowings with cheaper finance.

The Company’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash held at variable rates. The borrowings do not expose the Company to fair value interest rate risk as they are carried at amortised cost.

The Company is not exposed to interest rate risk as all borrowings are at fixed rates.

a) Price risk The Company is not exposed to other price risks such as commodity price risk, equity price risk,

prepayments risk, and residual value risk.

b) Credit Risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. If customers are independently rated, these ratings are used. If there is no independent rating, Management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

The credit quality of financial assets is disclosed in Note 14.2.

31st March, 2016



41


c) Liquidity risk

Management monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance.

Surplus cash is invested in interest bearing current accounts, time deposits, and money market deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts. At the reporting date, the Company held liquid assets of Rs. 1,470,421. (2015: Rs. 2,915,544 ) that are expected to readily generate cash inflows for managing liquidity risk.

The table below analyses the Company’s financial liabilities based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

2016 2015 As at 31 March Rs. Rs. Trade and other payable (Excl. statutory liabilities) 1 to 3 Months 7,254,078 32,929,564 3 - 12 Months 8,267,063 11,183,603 More than a year 2,673,450 2,673,460

18,194,591 46,786,627 Interest Bearing Borrowings 1 to 12 Months 568,274 2,217,163 More than a year 446,494 1,510,277 1,014,768 3,727,440 19,209,359 50,514,067

4 Capital risk management The Company manages its capital informally in order to safeguard the Company’s ability to continue as

a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

2016 2015 Rs. Rs.

Total borrowings 21,665,416 2,559,493 Less – Cash and cash equivalents (1,470,421) (2,915,544) Net borrowings 20,194,995 (356,051) Total equity 716,095,068 737,634,787 Total capital 736,290,063 737,278,736 Gearing ratio 3% 0%

The Company is wholly capitalised by the equity shareholders.

31st March, 2016



5 Critical accounting estimates and judgments Estimates and judgments are continually evaluated and are based on historical experience and other

factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the .next financial year are outlined below:

a) Estimated impairment of non-current assets

The Company tests annually the indicators to ascertain whether non-current assets (including intangibles) have suffered any impairment, in accordance with the accounting policy stated in policy 2.7.

The recoverable amounts of cash generating units have been determined based on value-in-use calculations.

These calculations require the use of estimates.

b) Defined benefit plan - Gratuity

The present value of the defined benefit plan depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for defined benefit plan include the discount rate. Any changes in these assumptions will impact the carrying amount of defined benefit plan.

The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit plan.

Other key assumptions for defined benefit plan are based in part on current market conditions.

c) Contingent liabilities

Determination of the treatment of contingent liabilities in the financial statements is based on the management’s view of the expected outcome of the applicable contingency. The Company consults with legal counsels (lawyers) on matters related to litigation and other experts both within and outside the Company with respect to matters in the ordinary course of business.

d) Provisions The Company recognises provisions when it has a present legal or constructive obligation arising as a

result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. The recording of provisions requires the application of judgments about the ultimate resolution of these obligations. As a result, provisions are reviewed at each balance sheet date and adjusted to reflect the Company’s current best estimate.




43


31.03.2016 31.03.2015 Rs. Rs.

06 REVENUE Sale of Goods 149,624,812 200,545,163 Rendering of Services and Commission Income 20,537,569 18,077,987 Supply of Hydroelectric Power 2,335,804 - 172,498,185 218,623,150

07 OTHER EXPENSES Depreciation on Property, Plant and

Equipment and Other Related Expenses 8,023,250 8,508,721

08 FINANCE COST Lease Interest 488,291 694,163 Bank Charges 4,931,838 2,401,560 5,420,129 3,095,723 09 FINANCE INCOME Interest Income - Related Parties 15,790,845 19,362,604 - Others 1,004 71,355 Gain on translation of foreign currency 2,673,952 13,380 18,465,801 19,447,339 10 (LOSS)/ PROFIT BEFORE TAX Stated after charging all expenses including the following: Auditors’ Remuneration -Statutory Audit and related services 270,550 267,676 Executive Directors Emoluments 10,256,250 8,894,500 Management and Shared Cost 29,427,337 16,861,980 Impairment of Trade Receivables

(Included in Administration Expenses) 42,071,954 - Personnel Costs (Note 10.1) 13,146,941 18,129,50410.1 Personnel Costs Staff Salaries and Allowances 9,935,525 13,663,428 Bonus - 1,722,126 Defined Benefit Plan Costs - Retiring Gratuity 145,508 956,367 Defined Contribution Plan Costs - EPF and ETF 3,065,908 1,787,583 13,146,941 18,129,504 11 INCOME TAX EXPENSE Current Taxes The provision for income tax is based on the elements of income and expenditure as reported in the

financial statements and computed in accordance with the provisions of the Inland Revenue Act No.10 of 2006 and any amendment thereto.

Deferred Taxation Deferred Taxation has been provided on the liability method. The tax effect of timing difference

which occur where are allowed for income tax purposes in a period from that when they are recognised expenses in the Financial Statements has been included in the provision for deferred taxation.

31st March, 2016




Year Ended Year Ended 31.03.2016 31.03.2015 Rs. Rs. Current Income Tax Current Income Tax Expense on ordinary

activities for the year 2,874,117 3,536,981 2,874,117 3,536,981 Deferred Tax 831,113 175,924 3,705,230 3,712,905 Deferred Tax

Deferred Tax charge/(credit) arising due to origination and reversal of Temporary Difference 831,113 175,924

11.1 Reconciliation between Current Tax Expense and the Product of Accounting Profit

Profit /(Loss) before Income Tax (71,517,489) (5,691,993) Interest Income (15,791,849) (19,433,959) Add : Disallowable Expenses 4,418,001 5,646,954 Less : Allowable Expenses (4,692,622) (3,049,682) Tax ( Loss )/Profit (87,583,959) (22,528,679) Interest Income Tax rate @ 28% 2,874,117 3,536,981 Income Tax 2,874,117 3,536,981

12 (LOSS)/EARNINGS PER SHARE - BASIC Basic loss per share is calculated by dividing the profit for the year attributable to the ordinary shareholders

by the weighted average number of ordinary shares outstanding during the year.

The following reflects the income and share data used in the basic losses per share computations.

Amount used as the Numerator Profit /(Loss) for the year (75,222,719) (9,404,898) Profit attributable to Ordinary Shareholders for Basic EPS Number of Ordinary Shares used as Denominator Weighted average number of Ordinary Shares in issue 100,000,000 100,000,000 applicable to basic EPS Basic (Loss)/ Earnings per Share

(0.75) (0.09)

31st March, 2016



45

Notes to the Financial Statements (Contd)13

PR

OPE

RT

Y, P

LAN

T A

ND

EQ

UIP

MEN

T

13.1

G

ross

Car

ryin

g A

mou

nts

Gros

s Car

ryin

g Am

ount

s De

prec

iatio

n Ca

rryi

ng A

mou

nts

Balan

ce as

at

Addit

ions

Disp

osals

/ In

creas

e in

Balan

ce as

at

As at

Ch

arge

for

Disp

osals

As

at

As at

As

at

31

.03.20

15

Tr

ansfe

rs Re

valua

tion

31.03

.2016

31

.03.20

15

the Ye

ar

31

.03.20

16

31.03

.2016

31

.03.20

15

Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

.

At

Cos

t

Mot

or V

ehicl

es

829

,167

-

-

-

8

29,1

67

465

,308

2

07,2

92

-

672

,600

1

56,5

67

363

,859

To

ols a

nd E

quip

men

t 7

54,1

58

1,6

54,2

68

-

-

2,4

08,4

26

309

,979

3

78,0

37

-

688

,016

1

,720

,410

4

44,1

79

Com

pute

r Equ

ipm

ent

1,1

61,4

80

69,

900

-

-

1

,231

,380

6

55,0

78

288

,704

-

9

43,7

82

287

,598

5

06,4

02

Furn

iture

and

Fitti

ngs

184

,811

2

03,9

46

-

-

388

,757

1

12,0

32

86,

800

-

1

98,8

32

189

,925

7

2,77

9 O

ffice

Equ

ipm

ent

167

,944

-

-

-

1

67,9

44

133

,221

2

6,13

5

-

159

,356

8

,588

3

4,72

3 H

ydro

electr

ic Pl

ant

-

4,2

69,5

50

-

-

4,2

69,5

50

-

720

,000

-

7

20,0

00

3,5

49,5

50

-

3

,097

,560

6

,197

,664

-

-

9

,295

,224

1

,675

,618

1

,706

,968

-

3

,382

,586

5

,912

,638

1

,421

,942

At V

alua

tion

Fr

eeho

ld L

and

272

,737

,500

-

-

59

,400

,000

332

,137

,500

-

-

-

-

33

2,13

7,50

0 2

72,7

37,5

00

Free

hold

Bui

ldin

g 2

3,92

1,36

1

-

-

5,9

50,0

00

29,

871,

361

1

,421

,361

4

50,0

00

-

1,8

71,3

61

28,

000,

000

22

,500

,000

2

96,6

58,8

61

-

-

65,3

50,0

00 3

62,0

08,8

61

1,4

21,3

61

450

,000

-

1

,871

,361

360

,137

,500

295

,237

,500

O

n Fi

nanc

e Le

ase

-

Le

ased

Mot

or V

ehicl

es

7,6

15,0

00

-

(5,9

45,0

00)

-

1,6

70,0

00

6,2

84,5

90

912

,927

(5

,945

,000

) 1

,252

,517

4

17,4

83

1,3

30,4

10

3

07,3

71,4

21

6,1

97,6

64

(5,9

45,0

00)

65,

350,

000

372

,974

,085

9

,381

,569

3

,069

,895

(5

,945

,000

) 6

,506

,464

366

,467

,621

297

,989

,852

13.2

In

the

cour

se o

f Con

stru

ctio

n

Hyd

ro P

rojec

ts

Wor

k - in

-pro

gres

s

59,5

76,7

90

8,8

09,8

15

(4,2

69,5

50)

-

64,1

17,0

55

-

-

-

-

64,1

17,0

55

59,

576,

790

Tota

l

3

66,9

48,2

11

15,

007,

479

(10,

214,

550)

6

5,35

0,00

0 4

37,0

91,1

40

9,3

81,5

69

3,0

69,8

95

(5,9

45,0

00)

6,5

06,4

64 4

30,5

84,6

76 3

57,5

66,6

42

31st March, 2016



T

he su

rplu

s aro

se o

n ab

ove

reva

luat

ions

has

bee

n cr

edite

d to

Rev

alua

tion

as fo

llow

s ;

Land

B

uild

ing

To

tal

Rs.

R

s.

Rs.

C

ost

188

,991

,470

16

,415

,530

205

,407

,000

Acc

umul

ated

Dep

reci

atio

n -

(492

,466

) (4

92,4

66)

A

t Val

uatio

n 2

12,4

50,0

00

22,5

00,0

00 2

34,9

50,0

00

R

eval

uatio

n 20

12/2

013

23,

458,

530

6

,576

,936

30

,035

,466

Car

ryin

g A

mou

nt a

s at 0

1.04

.201

3 2

12,4

50,0

00

22,5

00,0

00 2

34,9

50,0

00

A

ccum

ulat

ed D

epre

ciat

ion

-

(459

,849

) (4

59,8

49)

A

t Val

uatio

n 2

43,0

37,5

00

22,5

00,0

00 2

65,5

37,5

00

R

eval

uatio

n 20

13/2

014

30,

587,

500

45

9,84

9 3

1,04

7,34

9

Car

ryin

g A

mou

nt a

s at 0

1.04

.201

4 2

43,0

37,5

00

22,5

00,0

00 2

65,5

37,5

00

A

ccum

ulat

ed D

epre

ciat

ion

-

(469

,046

) (4

69,0

46)

A

t Val

uatio

n 2

72,7

37,5

00

22,5

00,0

00 2

95,2

37,5

00

R

eval

uatio

n 20

14/2

015

29,

700,

000

46

9,04

6 3

0,16

9,04

6

Car

ryin

g A

mou

nt a

s at 0

1.04

.201

5 27

2,73

7,50

0 22

,500

,000

295

,237

,500

A

ccum

ulat

ed D

epre

ciat

ion

-

(450

,000

) (4

50,0

00)

A

t Val

uatio

n 33

2,13

7,50

0 28

,000

,000

360

,137

,500

R

eval

uatio

n 20

15/2

016

59,4

00,0

00

5,95

0,00

0 65

,350

,000

To

tal R

eval

uatio

n 1

43,1

46,0

30

13,4

55,8

31 1

56,6

01,8

61

La

nd a

nd b

uild

ing

wer

e re

valu

ed d

urin

g th

e fin

anci

al y

ear 2

015/

2016

by

Mr.

D. L

. Pal

ihak

kara

, an

inde

pend

ent v

alue

r. T

he re

sult

of su

ch re

valu

atio

n w

ere

inco

rpor

ated

in th

ese

Fina

ncia

l Sta

tem

ents

from

its e

ffect

ive

date

whi

ch is

31

st M

arch

201

6. S

uch

asse

ts w

ere

valu

ed o

n an

ope

n m

arke

t val

ue fo

r exi

sting

us

e ba

sis.

T

he su

rplu

s aris

ing

from

the

reva

luat

ion

Rs.

65,3

50,0

00/-

was

tran

sferr

ed to

a re

valu

atio

n re

serv

e.

T

he p

rope

rty

is sit

uate

d at

No.

35, M

adam

pitiy

a R

oad,

Col

ombo

15

with

an

exte

nt o

f 0

A-3

R-0

2.35

P an

d co

nsist

s of

two

purp

ose

built

stor

es.

D

epre

ciat

ion

on fr

eeho

ld b

uild

ing

is ba

sed

on th

e co

st (o

peni

ng b

alan

ce) a

nd n

ot o

n th

e re

valu

ed a

mou

nt si

nce

the

reva

luat

ion

was

don

e at

the

end

of th

e fin

anci

al y

ear.

T

he c

arry

ing

amou

nt o

f th

e re

valu

ed a

sset

s th

at w

ould

hav

e be

en in

clud

ed in

the

Fina

ncia

l Sta

tem

ents

had

the

asse

ts be

en c

arrie

d at

cos

t wou

ld b

e as

fo

llow

s.

C

ost

Acc

umul

ated

C

arry

ing

D

epre

ciat

ion

A

mou

nt

Rs.

R

s.

Rs.

Fr

eeho

ld L

and

188

,991

,470

-

1

88,9

91,4

70

Free

hold

Bui

ldin

g 1

6,41

5,53

0

1,4

77,3

99

14,

938,

131

To

tal C

arry

ing

Am

ount

2

05,4

07,0

00

1,4

77,3

99

203

,929

,601




47


14 Analysis of financial instruments

14.1 Financial Instruments by the category Loans and

receivables Total Rs. Rs.

31 March 2016 As per the Statement of Financial Position Trade and other receivables 46,528,128 46,528,128

(Excluding prepayments) Amount due from Related Parties 43,446,883 43,446,883 Short term Investment - Commercial Papers (Inter Group) 261,000,000 261,000,000 Cash and Cash equivalents 1,470,421 1,470,421 352,445,432 352,445,432 31 March 2015 As per the Statement of Financial Position Trade and other receivables 96,346,658 96,346,658

(Excluding prepayments) Amount due from Related Parties 54,787,292 54,787,292 Short term Investment - Commercial Papers (Inter Group) 261,000,000 261,000,000 Cash and Cash equivalents 2,915,544 2,915,544 415,049,494 415,049,494 Other financial

liabilities at Total amortised cost

Rs. Rs. 31 March 2016 Liabilities as per Statement Of Financial Position Trade and other payable 18,194,591 18,194,591

(Excluding statutory liabilities)

Amounts due to Related Parties 54,787,292 54,787,292 Interest Bearing Borrowings 695,826 695,826 Short Term Borrowings 20,969,590 20,969,590 415,049,494 415,049,494

31 March 2015 Liabilities as per Statement Of Financial Position Trade and other payable 46,786,629 46,786,629

(Excluding statutory liabilities)

Amounts due to Related Parties 1,356,512 1,356,512 Interest Bearing Borrowings 2,559,493 2,559,493 50,702,634 50,702,634



14.2. Credit quality of financial assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference

to historical information about counter party default rates:

Rating 31.03.2016 31.03.2015 Rs. Rs.

Trade and other receivables Group 1 6,401,055 20,228,835

Group - New customers and existing customers with no history of default.

Amount due from Related Parties Not Rated 43,446,883 54,787,292 Short Term Investment

(Commercial Papers - Inter Group) Not Rated 261,000,000 261,000,000 Cash and Cash equivalents National Development Bank AA- 232,696 190,018 Pan Asia Banking Corp BBB 925 1,709,487 Hatton National Bank AA- 109,535 833,176 Hongkong & Shanghai Banking Corp AAA 2,245 72,863 Bank of Ceylon AA+ 1,009,057 - Nations Trust Bank A 5,963 - Cash in Hand Not Rated 110,000 110,000 1,470,421 2,915,544

The company’s exposure to foreign currency risk is analysed below: (Rs.)

As at 31.03.2016

All amounts in Rs. LKR USD Total

Amount due from Related Parties 43,446,883 - 43,446,883 Short Term Investment

(Commercial Papers - Inter Group) 261,000,000 - 261,000,000 Cash and Cash Equivalents 1,470,421 - 1,470,421 Trade and Other Receivable 46,528,128 - 46,528,128 352,445,432 - 352,445,432

As at 31.03.2015

All amounts in Rs. LKR USD Total

Amount due from Related Parties 54,787,292 - 54,787,292 Short Term Investment

(Commercial Papers - Inter Group) 261,000,000 - 261,000,000 Cash and Cash Equivalents 2,915,544 - 2,915,544 Trade and Other Receivable 65,543,730 30,802,928 96,346,658 384,246,566 30,802,928 415,049,494




49


The aging analysis of these trade receivables are as follows:

Year Ended Year Ended 31.03.2016 31.03.2015 Rs. Rs. 0 - 30 Days 5,305,986 9,374,810 31-90 Days 1,095,069 10,854,025 Total performing 6,401,055 20,228,835 More than 90 Days - Past due not impaired 3,267,392 46,636,635 9,668,447 66,865,470

15. INVENTORIES Generators and Equipment 927,161 16,428,159 Spares and Accessories 12,652,127 20,925,546 Goods In Transit - 12,029,689 13,579,288 49,383,394

16 TRADE AND OTHER RECEIVABLES Trade Receivables 51,740,401 66,865,470 Less: Provision for Impairment (42,071,954) - Net Trade Receivables 9,668,447 66,865,470 Sundry Advances 5,359,424 8,913,225 WHT Receivables 3,852,998 2,385,399 Prepayment 303,810 192,317 Interest Receivables - Related Parties 26,102,763 17,844,499 Other Receivables 89,496 152,065 Rent Deposit 1,455,000 186,000 46,831,938 96,538,975

17 AMOUNT DUE FROM RELATED PARTIES Mackwoods (Pvt) Ltd., 31,287,008 47,491,534 Agalawatte Plantations PLC 10,359,875 5,495,758 Claridge Stock Brokers (Pvt) Ltd., 1,800,000 1,800,000 43,446,883 54,787,292

18 SHORT TERM INVESTMENTS Commercial Papers- Inter Group Companies 261,000,000 261,000,000



19 CASH AND CASH EQUIVALENTS Cash at Bank 1,360,421 2,805,544 Cash in Hand 110,000 110,000 1,470,421 2,915,544 20. STATED CAPITAL Issued and Fully Paid Number of Ordinary Shares 100,000,000 100,000,000

Rupees - Ordinary Shares 555,583,112 555,583,112 Shares held by Related Parties as at 31.03.2016 Number Of Shares Mackwoods (Pvt) Ltd., 62,928,793 Agalawatte Plantations PLC 4,460,972 Claridge Fund (Pvt) Ltd., 3,800,500 Dr C N A Nonis 3,018,707 Mr. F L Fonseka 3,017,500 Mr. L J K Hettiaratchi 5,000 77,231,472

Year Ended Year Ended 31.03.2015 31.03.2014

Rs. Rs.

21 CAPITAL RESERVE Revaluation Reserve Balance as at Beginning of the year 89,187,059 59,149,346 Revaluation Surplus during the year 65,350,000 30,169,046 Tax on Revaluation Surplus (1,667,000) (131,333) Balance as at End of the year 152,870,059 89,187,059

22 DEFERRED TAX ASSETS/ (LIABILITIES) Deferred Tax Assets

Balance as at Beginning of the year 434,384 253,051 Amount charged to statement of comprehensive income (208,668) 181,333 Balance as at end of the year 225,716 434,384


Year Ended Year Ended 31.03.2016 31.03.2015 Rs. Rs.



51


Deferred Tax Liabilities Balance as at Beginning of the year 3,608,277 3,119,687 Amount charged to statement of comprehensive income 622,446 357,257 Recognised in other comprehensive income 1,667,000 131,333 Balance as at end of the year 5,897,723 3,608,277 Net Deferred Tax liability 5,672,006 3,173,893 Deferred Tax (Assets)/ Liabilities originated due to temporary

timing differences of following asset and liability basis. On Property, Plant and Equipment 5,897,722 3,608,275 On Retirement benefit obligation (225,716) (434,382) 5,672,006 3,173,893 23 RETIREMENT BENEFIT OBLIGATION Balance as at beginning of the year 1,551,371 903,754 Add : Provision made during the year 145,508 956,367 Less: Payments for the year (890,750) (308,750) Balance as at end of the year 806,129 1,551,371 Following assumptions are used in arriving at the provision for retirement gratuity.

Discounting rate 12%

Salary increment rate 10%

24 INTEREST BEARING BORROWINGS

Alliance Finance PLC - 2,306,762 Central Finance Company PLC 1,014,768 1,420,678 1,014,768 3,727,440

Gross Liability 1,014,768 3,727,440 Finance Charges allocated to future periods (318,942) (1,167,947) Net Liability 695,826 2,559,493 Interest bearing loan payable within a year 333,997 1,522,997 Interest bearing loan payable more than a year 361,829 1,036,496 695,826 2,559,493





25 TRADE AND OTHER PAYABLES Trade Creditors 9,016,946 42,205,282 Accrued Expenses 7,588,664 3,143,470 VAT Payable 4,868,022 5,153,338 Audit Fees and Tax Consultation Fees Payable 250,000 220,000 NBT Payable 766,775 797,140 EPF,ETF and PAYE Payable 4,951,570 841,435 Other Payable 822,064 765,696 Provision for Bonus 360,000 360,000 Medical and Insurance Payable 156,917 92,180 Dividend Tax Payable 1,000,000 - 29,780,958 53,578,541

26 AMOUNT DUE TO RELATED PARTIES Claridge Stockbrokers (Pvt) Ltd. 1,756,512 606,512 Claridge Asset Management (Pvt) Ltd. 300,000 750,000 2,056,512 1,356,512 27 ASSETS PLEDGED Company has given a pledge over the movable leased assets for the following leasing companies for the

finance lease facilities.

Alliance Finance Plc Central Finance Company Plc

28 EVENTS AFTER THE REPORTING PERIOD All material events after the reporting date have been considered and where necessary adjustments have

been made in the financial statements.

29. PRIOR YEAR ADJUSTMENT Unreconciled amount due from Agalawatte Plantation PLC which has not been considered in prior

accounting periods, has been adjusted in the current year’s financial statements with retrospective effect.

30 COMMITMENTS AND CONTINGENCIES There were no capital commitments and contingencies as at the reporting date.




53


31 RELATED PARTY TRANSACTIONS 31.1 Identity of Related Parties

The company has a related party relationship with its Parent company, Affiliate companies and with its directors.

31.2 Transactions with Related Parties

Name of the Company Name of Director Interest Nature of transaction Year Ended As at 31/3/2016 31.03.2016 Rs.

Mackwoods (Pvt) Ltd Dr. C N A Nonis Parent Interest Receivable on 9,779,947 Mr. F L Fonseka Commercial Papers Mrs. S M A Nonis Ranaweera Mr. D. T. Ranaweera Shared Service 10,200,000 Mr. L L Samarasinghe Sales and Provision of 39,587

Services Dividend Paid 5,663,591

Agalawatte Plantations PLC Dr. C N A Nonis Affiliate Interest Receivable on 6,010,898 Mr. F L Fonseka Commercial Papers Mrs. S M A Nonis Ranaweera Mr. L L Samarasinghe Sales and Provision of 2,335,804

Services Dividend paid 401,487

Claridge Stock Brokers (Pvt) Ltd Dr. C N A Nonis Affiliate Sales and Provision of 5,661 Mr. F L Fonseka Services Mrs. S M A Nonis Ranaweera Mr. L L Samarasinghe Commission Brokerage 1 ,250 ,000

and Settlements

31.3 Transactions with Key Management Personnel

Key Management personnel includes members of the Board of Directors of the company, its Affiliate and Parent. Transactions with Key Management personnel, their close family members and parties/entities in which such Key Management personnel or their close family members have control, joint control or significant influence.

A number of Key Management Personnel or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities.

Compensation of Key Management personnel Year Ended Year Ended 31.03.2016 31.03.2015 Rs. Rs. Short term employee benefits 10,256,250 8,894,500

No transactions had taken place during the year with the parties/entities in which Key Management personnel or their close family members have control, joint control or significant influence.

The amounts receivable from or payable by above related parties as at 31st March, are disclosed in Note 17 and 26 respectively.



Shareholders Informationa) Distribution of shareholding (Ordinary Shares ) as at 31st March 2016

RESIDENT NON RESIDENT TOTAL No of Shares held No of No of Total No of No of Total No of No of T o t a l Shareholders Shares Holding Share Shares Holding Shareholders Shares Holding % holders % %

1 to 1000 shares 622 228,562 0.23 3 1,800 0.00 625 230,362 0.23 1001 to 10,000 shares 280 1,180,487 1.18 2 9,700 0.01 282 1,190,187 1.19 10,001 to 100,000 shares 87 2,793,408 2.79 2 120,000 0.12 89 2,913,408 2.91 100,001 to 1,000,000 shares 9 1,764,203 1.76 3 1,443,230 1.44 12 3,207,433 3.21 Over 1,000,000 shares 10 91,042,410 91.04 1 1,416,200 1.42 11 92,458,610 92.46 1008 97,009,070 97.01 11 2,990,930 2.99 1019 100,000,000 100.00

No of No of Total Shareholders Shares Holding %

b) Resident 1008 97,009,070 97.01 Non Resident 11 2,990,930 2.99 1019 100,000,000 100.00

c) Institutional 50 80,634,931 80.63 Individual 969 19,365,069 19.37 1019 100,000,000 100.00

Market Value Analysis Date Rs.

Highest 27/5/2015 6.70 (for the period ending 31st March 2016)

Lowest 31/3/2016 2.80 (for the period ending 31st March 2016)

Year end at 31st March 2016 31/3/2016 2.80

d) Distribution of Shareholdings Shareholders Holdings

Number % Number % No of Shares held Group Companies & Directors 10 0.98 86,675,794 86.676 General Public 1009 99.02 13,324,206 13.324 1019 100.00 100,000,000 100.00



55

Twenty largest shareholders As at 31st March 2016

NAME NO OF SHARES PERCENTAGE

Mackwoods (Pvt) Ltd 62,928,793 62.93

Agalawatte Plantations PLC 4,282,079 4.28

Claridge Fund (Pvt) Ltd 3,800,500 3.80

Epoc Research Laboratories (Pvt) Ltd 3,568,500 3.57

Employees Provident Fund 3,508,307 3.51

Dr C. N. A. Nonis 3,018,707 3.02

Mr A. L. Yatawara 2,820,555 2.82

Mrs N. S. M. Samaratunga 2,759,334 2.76

Mr F. L. Fonseka 2,667,500 2.67

Diversified Fund (Pvt) Ltd 1,688,135 1.69

Mr G. M. Kennedy 1,416,200 1.42

Mr. F. N. Herft 815,000 0.81

Ms H. S.Tan 491,500 0.49

Mr. C. G. A. M. Priya 250,000 0.25

Mr. H. Beruwalage 232,807 0.23

Mr. D. D. Guneratne 210,001 0.21

Mr. R. A. L. White 210,000 0.21

Mr. U. Rohith 200,040 0.20

Mr. K. A. Lakshman 200,000 0.20

Mr. N. Hussain 165,355 0.17

95,233,313 95.24

Balance held by 999 shareholders 4,766,687 4.77

100,000,000 100

The Percentage of shares held by the public as at 31st March 2016 was 19.73%

Shareholders Information (Contd)



DefinitionsFINANCIAL TERMS

Accounting Policies Specific principles, bases, conventions, rules and practices adopted by an enterprise in preparing and presenting financial statements.

Capital Employed Total assets less interest free liabilities and provisions.

Cash Equivalents Liquid investments with original maturities of six months or less.

Contingent Liabilities Conditions or situations at the Balance Sheet date the financial effect of which are to be determined by future events which may or may not occur.

Current Ratio Current assets divided by current liabilities.

Earnings per share Profits attributable to ordinary shareholders divided by the number of ordinary shares in issue

Equity Shareholders’ funds, ie. share capital and reserves.

Market Capitalisation Number of shares in issue multiplied by the market value of each share at the year end.

Net assets per share Shareholders’ funds divided by the number of ordinary shares.

Price Earnings ratio Market Price of a share divided by earnings per share.

Related Parties Parties who could control or significantly influence the financial and operating policies of the business.

SLAS Sri Lanka Accounting Standards

Working Capital Capital Required to finance the day –to – day operations .(Current assets less Current liabilities)

NON FINANCIAL TERMS

SHPPs Small Hydro Power Projects

SEA Sustainable Energy Authority

CEB Ceylon Electricity Board

PUCSL Public Utilities Commission of Sri Lanka



57

Notice of MeetingNOTICE IS HEREBY GIVEN that the 5th Annual General Meeting (AGM) of MACKWOODS ENERGY PLC (“the Company”) will be held at the “Auditorium of the Sri Lanka Foundation Institute, No.100, Independence Square, Colombo 07, on Thursday 24th day of November 2016 at 3.00 pm for the following purposes:

01. To receive and consider the Annual Report of the Board together with the Financial Statements of the Company for the financial year ended 31st March 2016 together with the report of the Auditors thereon.

02. To consider, and if thought fit, pass the following resolution as an ordinary resolution for the re-appointment of Mr. L. L. Samarasinghe.

Ordinary Resolution

IT IS HEREBY RESOLVED that Mr. L. L. Samarasinghe who reached the age of 82 years in November 2015 be appointed a Director of the Company in terms of Section 211 or the Companies Act No. 7 of 2007, for a term that ends on the earlier of a date that is one year from the date of appointment or at the conclusion of the Annual General Meeting following this Annual General Meeting at which the appointment if any, takes place and it is further resolved that the age limit referred to in Section 210 of the said Companies Act shall not apply to Mr. L. L. Samarasinghe.

03. To re-appoint M/s. Wijeyeratne & Co., Chartered Accountants as the Auditors of the Company to hold office until the conclusion of the next Annual General Meeting of the Company at a remuneration to be agreed with by the Board of Directors and to audit the Financial Statements of the Company for the accounting period ending 31st March 2017.

04. To authorize the Directors to determine contributions to charities.

By Order of the Board Mackwoods (Private) Limited Secretaries, Mackwoods Energy PLC

Colombo 28th September 2016

Note:

Any shareholder entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote/speak in his /her stead and a form of proxy is sent herewith for this purpose. A proxy need not be a member of the company.

A completed form of proxy must be deposited at the Registered Office of the Company at No. 10, Gnanartha Pradeepa Mawatha, Colombo 08 not less than 48 hours before the time appointed for the holding of the meeting.

Form of ProxyMACKWOODS ENERGY PLC

I/We ....................................................................................of .. .............................................................................. being member/s of the MACKWOODS ENERGY PLC hereby appoint,

Dr. C. N. A. Nonis or failing him

Mr. F. L. Fonseka or failing him

Mrs. S. M. A. Nonis Ranaweera or failing her

Mr. D. T. Ranaweera or failing him

Mr. L. L. Samarasinghe or failing him

Mr. L. J. K. Hettiaratchi or failing him

Dr. H. Shafeeu or failing him

........................................................................ of......................................................................................................as * my/our Proxy to vote/speak for me/us on *my/our behalf at the 5th Annual General Meeting of the Company to be held at the “Auditorium of the Sri Lanka Foundation Institute, No.100, Independence Square, Colombo 07, on Thursday 24th day of November 2016 at 3.00 pm and any adjournment thereof, and at every poll which may be taken in consequence thereof.

For Against

01. To receive and consider the Annual Report of the Board together with the Financial Statements of the Company

02. To re-appoint as a Director Mr. L. L. Samarasinghe in terms of Section 211 of the Companies Act No.7 of 2007.

03. To re-appoint M/s. Wijeyeratne & Co., Chartered Accountants as Auditors of the Company to audit the Financial Statements and authorise the Directors to fix their remuneration.

04. To authorize the Directors to determine contributions to charities for the ensuing year.

Signed this................................. day of ...........................Two Thousand and Sixteen

.................................... Signature/sNote: Please delete the inappropriate words.

Instruction as to completion are noted below.

1. The instrument appointing a proxy may be in writing under the hands of the appointer or of his Attorney duly authorized in writing under the hands of the appointer or of its attorney duly authorized in writing or if such Appointer is a corporation under its common seal or the hand of its Attorney or duly authorized person.

2. The instrument appointing a proxy and the power of Attorney or other authority, if any, under which it is signed or notarially certified copy of the Power of Authority or other authority will have to be deposited at the Registered Office of the Company not less than 48 hours before the time appointed for the holding of the meeting.

Date post:	30-Mar-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

MACKWOODS ENERGY PLC · MACKWOODS ENERGY PLC 4 ANNUAL REPORT 2015/2016 Corporate Information (As at...

Documents