PIRAMAL GLASS CEYLON PLC - Annual Report 2009-2010

8/6/2019 PIRAMAL GLASS CEYLON PLC - Annual Report 2009-2010

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2009-2010





A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

C o n t e n t s

Corporate In ormation 2

Chairman’s Statement 3-4

Report on the A airs o the Company 5-6

Directors’ Responsibilities or the Preparation o the Financial Statements 7

The Board o Directors 8-9

Corporate Governance – Compliance Table 10

Corporate Governance – Attendance o Directors at Meetings 11

Corporate Governance – Remuneration & Audit Committee Report 12

Auditors’ Report 13Balance Sheet 14

Income Statement 15

Statement o Changes in Equity 16

Cash Flow Statement 17

Accounting Policies 18-23

Note to the Accounts 24-34

Shareholders’ and Investor In ormation 35

Ten Year Financial Review 36

Glossary o Financial Terminology 37

Notice o Meeting 38



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

Aud rStatutoryMessrs. Ernst & YoungChartered AccountantsP.O.Box 101, Colombo 10

Internal Messrs. S.J.M.S. AssociatesNo.04, Castle Lane, Colombo 04.

Ba k rBank of CeylonCiti Bank, N.ACommercial Bank of Ceylon PLCDevelopment Finance Corporation of Ceylon PLC

Hatton National Bank PLCPeople’s BankStandard Chartered BankSampath Bank PLC

C m a y s cr ary Mrs. Sagarika Jayasundera (Attorney-at-Law)148, Maligawa Road, Borupana, RatmalanaTelephone: +94 117 800 302

R g rar

P.W. Corporate Secretarial (Pvt) LtdNo.3/17, Kynsey Road, Colombo 08Telephone: +94 114 640 360-3

L gal Adv rMessrs. F.J. & G. de Saram216, De Saram Place , Colombo 10Telephone: +94 114 718 200

CoRpoRAte Information

th B ard D r c rVijay Shah – ChairmanDr. C.T.S.B PereraN. Santhanam (Up to 07/10/2009)R.M.S. FernandoSanjay Tiwari – CEO / Executive DirectorSandeep Umesh Arora (From 07/10/2009)

Aud C mmVijay Shah – ChairmanDr. C.T.S.B PereraR.M.S Fernando

R mu ra C mmVijay Shah – Chairman

Dr. C.T.S.B PereraR.M.S Fernando

s r Ma ag m t amSanjay Tiwari – CEO / Executive DirectorT.P. Sheriffdeen – Vice President U.P. Hettige – General ManagerNiloni Boteju – Financial ControllerA.K.M Fowzin – Head of HRPalitha Piyanandana – Senior Manager (Supply Chain)

C m a y namThe Company has changed the name from “CEYLONGLASS COMPANY PLC” to “PIRAMAL GLASS CEYLON PLC”with effect from 26th August 2008 (in accordance withSection 8 of Companies Act No. 07 of 2007)

C m a y numb r PQ 190

R g r d o fc148, Maligawa Road, Borupana, RatmalanaTelephone: +94 112 635 481 -83Fax:+94 112 635 484E-mail: [email protected]: www.piramalglassceylon.com

Fac ry Wagawatte Road, Poruwadanda, Horana.Telephone: +94 344 938 965 -67Fax:+94 342 258120

Marawila Road, Nattandiya.Telephone: +94 322 254 242

Fax:+94 322 255 193



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ChAiRMAn’s Statement

Dear Shareholders,

Warm Greetings to You All !

The turbulent industrial & economic environment seems

to be behind us particularly with re erence to emerging

economies. Consequently, the investments made by your

Company in the new acility at Horana have now started

bearing ruits. This is evident rom the per ormance in the

last three quarters o the FY 2009-10 which has shown a

positive net pro t.

p r rma c R v w:The domestic market, in particular, has undergone an

unprecedented recessionary trend with a decline in sales

by 6.3% as compared to the previous year. The ourth

quarter, however, showed a beginning o recovery with

the sales refecting a growth o 4% over the previous year

corresponding period.

The doubling o capacity by the Company, on the one hand,

and the recessionary domestic trend on the other could

have spelt a doom or the Company had it not been or

its recent thrust into e port markets. It gives me great

pleasure in in orming you that, your Company achieved a

sales o LKR1166 mn (as against LKR424 mn in the previous

year) which refects a stunning growth o 175%. The share

o e ports as percentage to total sales o the Company

grew rom 14% in the previous year to a stupendous 33%o sales. This is an endorsement o con dence reposed by

the international customers or our products.

The Company made signi cant progress in stabilizing its

e panded capacity both in terms o glass drawn rom the

urnace as well as production e ciency. The Company

produced 61859 tons o glass dur ing the year as comparedto 52348 tons in the previous year, a growth o 18%.

The Company total revenue or the year ending 31st March

2010 grew by 19.8% to Rs. 3,518.7 million. The Gross Pro t

to sales ratio increased to 25.7% this year as against 20.1%

in the previous year. The Company achieved Gross Pro t o

Rs. 903.8 million or the year as against Rs. 590.4 million

in the previous year refecting a growth o 53.1%. Net loss

or the FY 2010 was lower at Rs. 61.09 million as comparedto the loss o Rs. 260.94 million in FY 2009. It is pertinent

to note that the Company reported a positive net pro t in

the last three quarters.

The important highlights in this year are :

• Your company has sold more than the total production

o the year thus reducing the inventory leading to better

management o working capital

• Established an e port market or the entire additional

tonnage produced in e cess o the domestic

requirements.

As mentioned in my earlier reports, our unique investment

or making colour bottles through orehearth coloring has

enabled the company to launch high valued added new

colours in the international and domestic markets which

has helped the Company to showcase its capabilities or

innovation in packaging to meet the demand or high end

customers.

With the increase in e ports sales, your Company, during

the year did major restructuring o the long term loans by

converting part o the Rupee loan to a U.S. Dollar oreign

currency loan. This conversion was done in the month

o November 2009. This has resulted in the reduction in

interest cost rom LKR 659 mn in previous year to LKR 581

mn in current year. The ull year impact o the interest cost

reduction will be refected in the year 2010-11 and onwards.As we have adequate e ports, our oreign currency risk on

these loans is limited.



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ChAiRMAn’s Statement

LooKinG AheADWith the stabilization o the new plant at Horana, the

management is con dent about the uture o the companywith the already reported positive per ormance o past

three quarters o the FY 2010 . The uture ocus o the

Company will be towards serving ully the domestic market

which is well on its way to recovery, as well as increasing the

business in the specialized liquor and beverages segment

in the international markets. This would help improve the

pro tability substantially in the uture. The Company is now

poised to concentrate on its vision “be the most pre erred

Specialty Glass Packaging solutions provider in Asia bymeeting customer e pectation through innovative designs

and manu acturing”.

AppReCiAtionMr. N. Santhanam has ceased to be a Director o the

Company with e ect rom 7th October 2009. He has been

on the Board since 2001 and has guided the Company or

the past nine years by his valuable advice. I would like to

put on record our sincere appreciation or the services and

counsel rendered by him during his tenure on the Board o

the Company.

I welcome Mr. Sandeep Arora, CFO , Piramal Glass Limited,

to the Board o Directors o Piramal Glass Ceylon plc. He

brings with him a wealth o e perience specially in the eld

o Finance and Treasury operations. We are privileged to

have him on our Board.

The per ormance o our company, during the year, could

not have been achieved without the untiring e orts,

dedication and commitment o our employees. I take this

opportunity to place on record my gratitude to them. I also

thank our valued customers or their continuing patronage

and support.

I take this opportunity to thank the various departments o

the Government o Sri Lanka, Board o Investment, Banks,

other institutions and clients that e tended assistance toPiramal Glass Ceylon PLC.

I also wish to convey my gratitude to my colleagues on

the Board o Directors and the Management Team or their

valuable contribution during the nancial year. I would

ail in my duty, i I do not thank you, our shareholders, or your con dence in us.

Finally I would like to thank Piramal Glass Manu acturing

& Project Team or e tending all their support and help

to stabilize the operations at Horana and their continued

technical guidance. I would also like to thank the Piramal

Glass Manu acturing E cellence Cell or initialing the

programme in our Srilanka Operations.

Mr Vijay Shah, Chairman o the Company is the Managing

Director o Piramal Glass Limited, India. The transactions

with Piramal Glass Limited are disclosed in Note 26.1.

V jay s aChairman

21st April 2010



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RepoRt on the AFFAiRsof the Company

t s ar ld r

The Board o Directors have pleasure in presenting the 55th Annual Report and the Audited Accounts o the Company orthe year ended 31st March 2010.

ReVieW oF YeARThe Chairman’s statement describes in brie o the Company’s a airs and the per ormance during the year and alsomentions the events subsequent to the balance sheet date.

pRinCipAL ACtiVitY Principal activity o the Company is the manu acture and sale o Glass Containers. The Company owns Freehold Land at Ratmalana (21 acres) and Nattandiya (54 acres) and Leasehold Land at Horana (25 acres) and Nattandiya ( 9 acres).

CURRenCY All gures appearing in the accounts are in Sri Lankan Rupees and has been denoted as “LKR”.

FinAnCiAL ResULts 0 0 009LKR 000’ LKR 000’

Revenue 3,518,763 2,936,155Cost o Sales (2,614,981) (2,345,802) Gross Pro t 903,782 590,353Other Operating Income 348 53,172Admin & Distribution Cost (384,036) (246,076)Finance Cost (581,186) (658,698)Loss Be ore Ta (61,092) (261,249)Income Ta Reversal - 314 Loss or the Year (61,092) (260,935)

sALes hiGhLiGhtsThe Total revenue or the year ending 31st March 2010 grew by 19.8% to LKR 3,518.7 million as against 2,936 million

o the previous year. The above growth is mainly due to three old increase in E ports sales to LKR 1,166 million asagainst LKR 424 Mn in the previous year refecting a growth o 175%. The domestic Sales or the year was LKR 2352Mn as against LKR 2512 Mn in the previous year refecting a decline o 6.3%. Also E ports contributed to 33% o thetotal annual turnover in the FY -10 as against 14.4% in the previous year. The growth in e ports was very encouragingand endorsed the con dence reposed by the international customers on PGC products.

pRoDUCtion hiGhLiGhtsWith the ongoing improvements and stabilization o the new plant, the total production in packed tons or FY-10 was61859 tons as against 52348 tons in the previous year. The daily production o glass tonnage drawn rom the urnace hasincreased rom 191 tonnes in FY-09 to 218 tonnes in FY -10, with e ciency too increasing by over 5%. The new urnaceat Horana has a designed capacity o 205 tons per day which can go up to 250 tons per day.

eMpLoYMent The Company employed a total o 384 persons as at 31st March 2010. (2009 was 369)

CApitAL eXpenDitURe AnD inVestMentsThe Company invested a total o LKR 48,411,389 /- at its new plant at Wagawatte, Horana. (2009 was LKR 656,590,656/-).The capital commitments as at the balance sheet date disclosed in Note 4.7 to the Accounts.

shARe CApitALThe Stated capital as at the end o the year was LKR 1,526,407,485/- , consisting o 950,086,080 number o ordinaryshares.

shARe hoLDinGsThere were 11,391 registered shareholders as at 31st March 2010, and the distribution o shares is indicated in page 35.

the post BALAnCe sheet eVents

The Post Balance Sheet events are disclosed in Note 25 to the Accounts. No events have taken place since the BalanceSheet dated which would require any adjustments or disclosures other than the above.



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RepoRt on the AFFAiRsof the Company

the BoARD oF DiReCtoRsVijay Shah – ChairmanDr.C.T.S.B. PereraN.Santhanam (Resigned on 07.10.2009 )

R.M.S. FernandoSanjay Tiwari – CEO / E ecutive DirectorSandeep Arora ( From 07.10.2009)

AppointMent oF neW DiReCtoRMr. Sandeep Umesh Arora was appointed as a Director o the Company during this nancial year.

peRsons Who CeAseD to Be DiReCtoRsMr. N.Santhanam has resigned as Director during this nancial year.

DiReCtoRs’ inteRest ReGisteRThe Directors have made declarations as provided or in section 192 (2) o the Companies Act No. 7 o 2007. The relatedentries were made in the interest register during the year under review. The related party disclosures are re erred to inNote 26 to the Financial Statements. Mr.Vijay Shah, Chairman o the Company is the Managing Director o Piramal GlassLtd. The share ownership o directors is indicated below.

DiReCtoRs’ shARehoLDinGsThe Directors’ and their spouse’s share holdings as at 31st March are :

0 0 009Dr.C.T.S.B.Perera 50,000 50,000

DiReCtoRs’ eMoLUMentsThe remunerations and other bene ts made to the Directors during the year are disclosed in Note 26.3

DonAtionsThe donations made by the company during the year are disclosed in Note 21.

AUDitoRsThe Accounts have been audited by Messrs. Ernst & Young, Chartered Accountants o Sri Lanka , who have indicated theirwillingness to continue in o ce and a resolution relating to their reappointment, will be proposed at the Annual General Meeting. Audit ees and e penses paid to Messrs. Ernst & Young or the FY 10 is LKR 565,325/- (2009 LKR 613,931/-) and

ees and e penses or ta ation services is LKR 177,460 /- (2009 LKR 249,888/-). As ar as the Directors are aware, theauditors do not have any other relationship with the Company or any o its subsidiaries.

Sgd. Mr. Sanjay Tiwari Sgd. Mr. R.M.S. Fernando Sgd. Ms. Sagarika JayasunderaCEO/E ecutive Director Director Company Secretary

21st April 2010



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DiReCtoRs’Responsibilities for the Preparation of Financial Statements

The Auditors’ Report sets out the respective responsibilities o the Directors and Auditors relating to the Financial

Statements and this statement provides additional in ormation. The responsibility o the Auditors, in relation to the

Financial Statements, is set out in the Auditors’ Report on page 13 o the Annual Report.

The e ternal auditors M/s Ernst & Young, appointed in accordance with the resolution passed at the last Annual General

Meeting, were provided with every opportunity to undertake whatever inspections they consider appropriate to enable

them to orm their opinion on the nancial statements.

The directors are required by relevant statutory provisions to prepare Financial Statements or each nancial year which

give a true and air view o the state o a airs o the company or that period. The Financial Statement or the year

2009/2010 prepared and presented in this report are consistent with the underlying books o account and are in con ormity

with the requirements o the Sri Lanka Accounting Standards, Companies Act No. 7 o 2007, Sri Lanka Accounting and

Auditing Standards Act No. 15 o 2000 and the New Listing Rules o the Colombo Stock E change. The responsibilities o the Directors, in relation to the Financial Statements, is set out in the ollowing statement.

Under section 151 (1) o the Companies Act No. 7 o 2007, the Directors o the Company have responsibilities or ensuring

that the Company keeps proper books o account o all the transactions and prepares nancial statements that give a true

and air view o the state o a airs o the Company and the pro t or loss or income and e penditure or the accounting

period ending on that balance sheet date.

The Directors consider that these Financial Statements have been prepared using appropriate accounting policies, applied

consistently, and supported by reasonable and prudent judgments and estimates and is in compliance with applicable

Sri Lanka Accounting Standards and provide the in ormation required by the Companies Act, as relevant. Any change to

accounting policies and reasons or such change, is disclosed in the “Notes to the Financial Statements”.

The Directors are responsible or keeping proper accounting records, and to take reasonable steps as ar as practicable to

ensure the accuracy and reliability o accounting records, to enable the preparation o nancial statements. The Directors

have general responsibilities to take reasonable steps to sa eguard the assets o the Company.

In discharging this responsibility the Directors have instituted a system o internal controls and a system or monitor ing

its e ectiveness. The system o controls provide reasonable and not absolute assurance o sa eguarding o Company’s

assets, maintenance o proper accounting records and the reliability o nancial in ormation.

The Directors believe, a ter reviewing the nancial position and the cash fow o the Company, that the Company has

adequate resources to continue in operation or the oreseeable uture and there ore, these Financial Statements are

prepared on a going concern basis.

By order o the Board

SAGARIKA JAYASUNDERACompany SecretaryPiramal Glass Ceylon PLC

21st April 2010



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DR. C. t. s. B. peReRANon Executive, Independent Director

Appointed to the Board o Piramal Glass Ceylon PLC ( ormerly known as CeylonGlass Company) in 2003. Dr Perera has served as the Managing Director o Piramal Glass Ceylon PLC rom July 1995 to March 2002. He served as rst Chairman o SME Bank. Additional Director General Board o Investment, Sri Lanka. Presentlyserves as Managing Director o Samson Rajarata Tiles and Director on Board o many reputed Companies.

He holds a PhD-CNAA - North Sta ordshire UK, BSc(Hons) CNAA – NorthSta odshire UK , BSc University o Ceylon and Fellow o the Institute o Metal,Materials & Mining (UK), Is, BSc University o Ceylon.

the BoARDof Directors

MR. ViJAY shAhChairmanNon Executive, Non Independent Director

Appointed to the Board in the year 1999. Took over as Chairman o Piramal GlassCeylon PLC ( ormerly known as Ceylon Glass Company) since 2002. Joined Piramal Group in 1988. Since September 1992 he took over as Managing Director o Piramal Glass. Since August 99, Mr. Shah was assigned responsibility as E ecutiveDirector and Chie Operating O cer o Nicholas Piramal India Limited. He was aSenior Associate at Management Structure & Systems Pvt Ltd. - a Management Consultancy organization rom 1982 to 1987. Mr Shah has been instrumental inseveral mergers & acquisitions and consequent integration globally in the Piramal Group. He is a Director in Piramal Glass UK Ltd, Piramal Glass - USA Inc,. AllerganIndia Limited etc.

He holds Bachelor's Degree in Commerce Rank holder and member o "The Instituteo Chartered Accounts o India". Also completed Advance Management programo Harvard Business School Boston, USA in 1981 and Management EducationProgramme rom IIM Ahmedabad in 1987.

MR. sAnJAY tiWARiCEO / Executive Director Executive, Non Independent Director

Appointed to the Board o Piramal Glass Ceylon PLC ( ormerly known as CeylonGlass Company) in December 2005 as CEO and E ecutive Director. Joined Piramal Group in June 2004 as Vice President - Finance & Commercial, heading Accounts,Finance, IT, Logistics and Supply Chain o Piramal Glass Ltd till Nov 2005. Be ore joining the Piramal Group worked with Zydus Cadila Healthcare Ltd and Torrent Group as CFO and General Manager Commercial or 12 years. Diversi ed e periencein various positions in di erent Industries – Te tile, Colour Chemicals, Cables,Pharmaceuticals, Bulk Drugs and Glass.

He holds a Bachelors Degree in Commerce, Fellow member o “The Instituteo Chartered Accountants o India”, completed AFM & GMP programs rom IIMAhmedabad, E ecutive Management Program rom University o Michigan.



9A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

the BoARDof Directors

MR. R. M. s. FeRnAnDoNon Executive, Independent Director

Appointed to the Board o Piramal Glass Ceylon PLC ( ormerly known as Ceylon

Glass Company) on 8th October 2007. Mr. Fernando has worked at the DFCC or 10 years and joined the National Development Bank in 1989 and was the CEO o theNational Development bank rom 1989-2001. He also served as the Secretary tothe Ministry o Investment Promotions, Industrial Policy, and constitutional A airsduring 2002-2004. Mr. Fernando has been an international consultant and advisorto the World Bank and the Asian Development Bank and is a member o the Boardo Trustees in Women’s World Banking, New York.

Member o Chartered Institute o Bankers, United Kingdom, Companion o theChartered Institute o Management in UK and Chartered Institute o Management Accountants UK.

MR. sAnDeep ARoRANon Executive, Non Independent Director

45 years, appointed to the Board o Piramal Glass Ceylon PLC ( ormerly known asCeylon Glass Company) on 07th October 2009. Mr. Sandeep holds a Bachelor Degreein Commerce and is a Member o “The Institute o Char tered Accountants o India”.He is the CFO o Piramal Glass Ltd heading the Finance and Accounts unctions orthe Piramal Glass group business. He was earlier with Piramal Healthcare Ltd. He hasover 20 years o e perience in multiple industries like Industrial yarn, Cosmetics,Food and Healthcare with Indian and Multinational Companies based in India.



0 A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

CoRpoRAte GoVeRnAnCe Compliance Table (Colombo Stock Exchange Circular No. 02/2009)

Rul n . subj c A l cabl R qu r m C m l a c s a u D a l7.10.1 Non-Executive Directors At least two non-executive directors or; at least Compliant Four out o Five Directors are

one third o the total number o directors whichever Non-Executive Directors.is higher should be Non-Executive Directors.

7.10.2 Independent Directors Two or one third o Non-Executive Directors, Compliant Two o the Four Non-Executivewhichever is higher should be independent. Directors are independent.

7.10.3 Independent Directors Each Non-Executive Director should submit a Compliant Non-Executive Directors havedeclaration o independence / non-independence submitted the declarations.in the prescribed ormat .

7.10.3 (a) Disclosure relating to Directors Names o independent Directors should be disclosed Compliant Please re er page 8-9 in thein the Annual Report. Annual Report.

7.10.3 (c) Disclosure relating to Directors A brie resume o each Director should be included Compliant Please re er page 8-9 in the

in the Annual Report including the area o Expertise. Annual Report.

7.10.5 Remuneration Committee A listed company shall have a Compliant Names o the members o the

Remuneration Committee. Remuneration Committee are availablein page 2.

7.10.5 (a) Composition o Remuneration Shall comprise o Non-Executive Directors a majority Compliant Remuneration Committee consists o Committee o whom can be independent. three Non-Executive Directors o which

two are independent.

7.10.5 (b) Functions o Remuneration The Remuneration Committee shall recommend the Compliant Please re er the RemunerationCommittee remuneration o Chie Executive O cer and Committee Report on page 12.

Executive Directors.

7.10.5 (c) Disclosure in the Annual Report relating to The Annual Report should set out;Remuneration Committee

a) Names o Directors comprising the Compliant Please re er page 2.Remuneration Committee.

b) Statement o Remuneration Policy. Compliant Please re er the RemunerationCommittee Report on page 12

or a brie statement o policy.

c) Aggregate remuneration paid to Compliant Please re er page 34.Executive & Non-Executive Directors.

7.10.6 Audit Committee The Company shall have an Audit Committee. Compliant Names o the members o the Audit Committee are available on page 2.

7.10.6 (a) Composition o Shall comprise o Non-Executive Directors a Compliant Audit Committee consists o threeAudit Committee majority o whom can be independent. Non-Executive Directors o which

two are independent.

Chie Executive O cer and the Chie Financial Compliant CEO/Executive Director and the FinanceO cer should attend Audit Committee Meetings. Controller attend by invitation.

The Chairman o the Audit Committee or one Compliant Chairman o the Audit Committee andmember should be a member o a pro essional one member are members o aaccounting body. pro essional accounting body.

7.10.6 (b) Audit Committee Functions Should be as outlined in the Section 7.10.6(b) o the Compliant Please re er page 12.Listing Rules.

7.10.6 (c) Disclosure in the Annual Report a) Names o the Directors comprising the Compliant Please re er page 2.relating to Audit Committee Audit Committee.

b) The Audit Committee shall make a determination Compliant Please re er Audit Committee Report ono the independence o the Auditors and disclose page 12.

the impacts or such determination.

c) The Annual Report shall contain a Report o the Compliant Please re er Audit Committee Report onAudit Committee setting out the manner o page 12.Compliance o the unctions.



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CoRpoRAte GoVeRnAnCe AttenDAnCe oF DiReCtoRsAt Meetings.

AttenDAnCe oF DiReCtoRs At BoARD MeetinGs.

The Board o the Company met ve (5) times during the nancial year, on the ollowing dates:

(1) 28th April, 2009 (2) 20th July,2009 (3) 07th October, 2009

(4) 25th November, 2009 (5) 19th January, 2010

The attendance o the Directors at the Board Meetings and the last Annual General Meeting held on 21st July, 2009 wereas under:

Board Meetings

Name o Director Held during Attended AGMtheir tenure

Vijay Shah - Chairman 5 5

N.Santhanam (Upto 07th October 2009) 3 0 -Dr.C.T.S.B.Perera 5 5Sanjay Tiwari - CEO 5 5R.M.S.Fernando 5 5 S.U.Arora (From 07th October 2009) 2 2 N.A.

AttenDAnCe oF DiReCtoRs At AUDit CoMMittee MeetinGs.

During the nancial year 2009-10, ve Audit Committee Meetings were held on the ollowing dates:

(1) 28th April, 2009 (2) 20th July,2009 (3) 07th October, 2009

(4) 25th November, 2009 (5) 19th January, 2010

The constitution o the Committee and the attendance o each member o the Committee is given below:

Name o the Director Designation Category Audit Committee Meeting

Held during their tenure Attended

(1) V.K.Shah Chairman Non-E ecutive Director 5 5(2) Dr.C.T.S.B.Perera Member Independent Director 5 5(3) R.M.S.Fernando Member Independent Director 5 5

The Company Secretary is the Secretary to the Committee.

AttenDAnCe oF DiReCtoRs At ReMUneRAtion CoMMittee MeetinGs.

The Remuneration Committee met on 20th July, 2009 or the nancial year 2009-10.

Name o the Director Designation Category Remuneration Committee Meeting

Held during their tenure Attended

(1) V.K.Shah Chairman Non-e ecutive Director 1 1

(2) Dr.C.T.S.B.Perera Member Independent Director 1 1(3) R.M.S.Fernando Member Independent Director 1 1



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REMUNERATION COMMITTEE REPORT A Listed Company shall have a Remuneration Committee incon ormity with the ollowing requirements.

This committee shall comprise o a minimum o two independent non-e ecutive directors(in instances where a company hasonly two directors on its Board); or Non-e ecutive directors,a majority o whom shall be independent, whichever shall be higher. One non-e ecutive director shall be appointed asChairman o the Committee by the Board o Directors.

The Remuneration Committee is a sub-committee o the Boardand the Company’s Remuneration Committee consists o three non-e ecutive directors o which two are independent Directors.

The Remuneration Committee shall recommend the remunerationpayable to the E ecutive Directors and Chie E ecutive O cero the listed company and/or equivalent position thereo , tothe board o the listed company, which will make the nal determination upon consideration o such recommendations.

The Committee has acted within the parameters set by its termso re erence.

The CEO/E ecutive Director attends the Committee meetings byinvitation. However, he does not participate in any discussionpertaining to his remuneration.

The remuneration packages linked to the individual per ormances

are aligned with the Company’s long-term strategy.The Term “remuneration” shall make re erence to cash andall non-cash bene ts whatsoever received in considerationo employment with the listed company(e cluding statutoryentitlements such as Employees Provident Fund and EmployeesTrust Fund).

The aggregate remuneration paid to E ecutive and NonE ecutive Directors are disclosed on page 34 The members o the Remuneration Committee are disclosed in page 2.

Sgd. Mr.Vijay Shah

Chairman

21st April 2010

INDEPENDENT DIRECTORS The independent directors are Dr.C.T.S.B.Perera andMr.R.M.S.Fernando. The board is o the opinion that Dr.C.T.S.B.Perera is an independent director, notwithstanding the act that he has been a director o the Company continuously or aperiod e ceeding nine years. It has been so determined takingto account the e perience, quali cations and the industry

e perience he possess.

CoRpoRAteGovernance

AUDIT COMMITTEE REPORT A Listed Company shall have an Audit Committee. The Audit Committee is established or the purpose o assisting theBoard in ul lling their oversight responsibilities regarding theintegrity o the Financial Statements, risk management, internal control and compliance with legal & regulatory requirements,assessment o the independence and per ormance o the e ternal auditors and internal audit unction, make recommendationsto the board pertaining to appointment, re-appointment andremoval o e ternal auditors and to approve the remunerationand terms o engagement o the e ternal auditors.

The Audit Committee is ormally constituted as a sub-committeeo the Main Board, to which it is accountable.

Audit committee shall comprise o a minimum o twoindependent non-e ecutive directors (in instances where a

company has only two directors on its Board); or Non-e ecutivedirectors, a majority o whom shall be independent, whichevershall be higher. One non-e ecutive director shall be appointedas Chairman o the Committee by the Board o Directors.

The Company’s Audit Committee consists o three non-e ecutivedirectors o which two are independent Directors. The memberso the Audit Committee are disclosed in page 2.

M g Aud C mmFive meetings were held during the year ended 31st March 2010.The Internal Auditors attended all these meetings.

i r al Aud rThe internal audit unction is outsourced to Messrs. SJMSAssociates, a rm o Chartered Accountants. Internal Auditorsdirectly submitted their ndings to Audit Committee quarterlyand their reports are made available to E ternal Auditors.

ex r al Aud rThe Audit committee reviews the independence and objectivityo the e ternal auditors and conducts a ormal review o e ectiveness o the e ternal audit process. The committeereviewed the non audit services and its impact on theindependence o the e ternal auditors. The Audit Committeehas recommended to the Board o Directors that Messers Ernst & Young to be continued as the auditors or the nancial yearending 31st March 2011.

Aud C mm p r rma cThe Annual Per ormance o Audit Committee was evaluated byother members o the Board o Directors and was deemed tobe satis actory.

C cluThe Audit Committee is satis ied that the e ectiveness o the organizational structure o the Company and o theimplementation o the Company’s accounting policies andoperational controls provide reasonable assurance that thea airs o the Company are managed in accordance withCompany’s policies and that Company’s assets are properlyaccounted or and adequately sa eguarded.

Sgd. Mr.Vijay ShahChairman

21st April 2010



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

ApAG/MRh/JJ

i d d Aud r ' R r s ar ld r p ramal Gla C yl pLC

R r F a c al s a m

We have audited the accompanying nancial statements o Piramal Glass Ceylon PLC which comprise the balance sheet as at 31 March2010, and the income statement, statement o changes in equity and cash fow statement or the year then ended, and a summary o signi cant accounting policies and other e planatory notes.

Ma ag m ’ R b l y r F a c al s a mManagement is responsible or the preparation and air presentation o these inancial statements in accordance with Sri LankaAccounting Standards. This responsibility includes: designing, implementing and maintaining internal controls relevant to thepreparation and air presentation o inancial statements that are ree rom material misstatement, whether due to raud or error;selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

sc Aud a d Ba oOur responsibility is to e press an opinion on these nancial statements based on our audit. We conducted our audit in accordance withSri Lanka Auditing Standards. Those standards require that we plan and per orm the audit to obtain reasonable assurance whetherthe nancial statements are ree rom material misstatement.

An audit includes e amining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signi cant estimates made by management, as well as evaluating theoverall nancial statement presentation.

We have obtained all the in ormation and e planations which to the best o our knowledge and belie were necessary or the purposeso our audit. We there ore believe that our audit provides a reasonable basis or our opinion.

o

In our opinion, so ar as appears rom our e amination, the Company maintained proper accounting records or the year ended 31March 2010 and the nancial statements give a true and air view o the Company’s state o a airs as at 31 March 2010 and its lossand cash fows or the year then ended in accordance with Sri Lanka Accounting Standards.

R r o r L gal a d R gula ry R qu r mIn our opinion, these nancial statements also comply with the requirements o Section 151(2) o the Companies Act No. 07 o 2007.

Sgd. eRnst & YoUnGChartered AccountantsColombo.21st April 2010

Partners : A D B Talwatte FCA FCMA M P D Cooray FCA FCMA R N De Saram ACA FCMA Ms. Y A De Silva ACA W R H Fernando FCA FCMAW K B S P Fernando FCA ACMA A P A Gunasekera FCA FCMA A Herath FCA D K Hulangamuwa FCA FCMA LLB (Lond)H M A Jayesinghe FCA FCMA Ms. G G S Manatunga ACA Ms. L C G Nanayakkara FCA FCMA B E Wijesuriya ACA ACMA

AUDitoRs’Report

Chartered Accountants

201 De Saram PlaceP.O. Box 101Colombo 10Sri LankaTel : (0) 11 246350 0Fax Gen : (0) 11 2697369

Tax : (0) 1 1 557 [email protected]



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

BALAnCe Sheet as at 31st March, 2010

n 0 0 009LKR LKR

Assetsn -Curr A

Property, Plant and Equipment 4 4,286,090,830 4,587,154,987Leasehold Land 5 24,629,990 25,735,070Investment Property 6 666,130,000 666,130,000Long Term Investment 7 261,359 261,359

4,977,112,179 5,279,281,416

Curr AInventor ies 8 733,910,651 758,653,163Trade and Other Receivables 9 1,018,304,343 950,963,885Income Ta Receivables 13 28,001,636 20,424,232Cash and Bank Balances 18 44,057,834 17,254,280

1,824,274,464 1,747,295,561

t al A6,801,386,643 7,026,576,977

eQUitY AnD LiABiLitiesCa al a d R rvStated Capital 10 1,526,407,485 1,526,407,485Reserves 11 688,535,043 688,535,043Retained Earnings/(Losses) 23,379 61,115,255 t al equ y 2,214,965,907 2,276,057,783

n -Curr L ab l

Interest Bearing Loans and Borrowings 12 1,773,967,786 1,860,550,719De erred Ta Liabilities 14 18,979,577 18,979,577

Retirement Bene t Obligations 15 86,925,218 84,500,270 1,879,872,581 1,964,030,566

Curr L ab lTrade and Other Payables 16 795,077,359 648,777,931Dividends Payable 17 10,860,992 10,881,132Interest Bearing Loans and Borrowings 12 1,900,609,805 2,126,829,565

2,706,548,155 2,786,488,629 t al equ y a d L ab l 6,801,386,643 7,026,576,977

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

Sgd: Mrs. Niloni BotejuFinancial Controller

The Board o Directors is responsible or the preparation and presentation o these Financial statements. Signed or and on behal o the board by.

Sgd: Mr. Sanjay Tiwari Sgd:Mr. R.M.S. FernandoCEO/E ecutive Director Director

The accounting policies and notes on pages 18 through 34 orm an integral part o the nancial statements.

Colombo21st April 2010



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

n 0 0 009LKR LKR

R v u 3 3,518,763,226 2,936,155,203

Cost o Sales (2,614,980,677) (2,345,801,702)

Gross Pro t 903,782,549 590,353,501

Other Operating Income 19 348,023 53,171,591

Distribution Costs (101,339,564) (69,336,041)

Administrative E penses (282,696,893) (176,740,334)

Finance Cost 20 (581,185,991) (658,698,253)

L B r tax ( ,09 , ) ( , 9, )

Income Ta (E pense) / Reversal 13 - 314,127

Loss or the Year (61,091,876) (260,935,410)

Loss Per Share - Basic 22 (0.06) (0.27)

Dividend Per Share 17 - 0.02


inCoMe Statement for the year ended 31st March, 2010



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

stAteMent of Changes in Equity for the year ended 31st March, 2010

s a d o h r R valua R a d t al Ca al R rv R rv ear g /L

Note LKR LKR LKR LKR LKR

Balance as at April 00 1,526,407,485 21,502,500 571,175,000 341,052,387 2,460,137,372

Dividend Paid 17 - - - (19,001,722) (19,001,722)

Surplus on Revaluation of Property Plant & Equipment 11 - - 95,857,543 - 95,857,543

Net Loss for the Year - - - (260,935,410) (260,935,410)

Balance as at March 009 1,526,407,485 21,502,500 667,032,543 61,115,255 2,276,057,783

Net Loss for the Year - - - (61,091,876) (61,091,876)

Balance as at March 00 1,526,407,485 21,502,500 667,032,543 23,379 2,214,965,907




A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

CAshFlows Statement for the year ended 31st March, 2010

0 0 009Ca Fl w r m/(u d ) o ra g Ac v n LKR LKR

Ca Fl w r m o ra g Ac vNet Loss be ore ta (61,091,876) (261,249,537)

Adju m r Depreciation 4 348,571,119 330,330,106Work-in-progress / Asset write o 676,950 12,666,344Amortisation o Leasehold Property 5 1,105,080 1,048,257Provision or Retirement Bene t Obligations 15 5,581,701 13,888,428Investment Income 19 (348,023) (459,423)Gain on Sale o Fi ed Assets - (52,712,168)E change Di erence Adjustment 12 (2,975,387) -Finance Cost 20 581,185,991 658,698,253

o ra g pr f L B r W rk g Ca al C a g 872,705,555 702,210,260

(Increase)/Decrease in Inventories 24,742,512 (291,038,969)(Increase)/Decrease in Trade and Other Receivables (67,340,458) 34,016,879Increase/(Decrease) in Trade and Other Payables 146,299,428 (47,931,969) Ca G ra d r m o ra 976,407,037 397,256,201

Income Ta Paid (7,577,404) (9,229,751)Retirement Bene t Obligations Costs Paid 15 (3,156,752) (7,769,949)Interest Paid 20 (581,185,991) (658,698,253)

Ca Fl w r m o ra g Ac v 384,486,889 (278,441,752)

Ca Fl w r m i v g Ac v Acquisition o Property, Plant and Equipment 4 (48,411,389) (656,590,656)Proceeds rom Sales o Property, Plant and Equipment 227,477 39,546,854Interest Received 19 257,863 369,263Dividend Received 19 90,160 90,160

n Ca Fl w u d i v g Ac v (47,835,890) (616,584,379)

Ca Fl w r m F a c g Ac v Proceeds rom Interest Bearing Loans and Borrowings 12 5,543,400,331 3,221,270,466Principal Payment under Finance Lease Liability 12 (1,934,201) (1,839,170)Dividends Paid 17 (20,141) (18,721,588)Repayment o Bank Loans 12 (5,806,907,792) (2,312,404,787)

n Ca Fl w r m/(u d ) F a c g Ac v (265,461,803) 888,304,922

n i cr a /(D cr a ) Ca a d Ca equ val 71,189,197 (6,721,209)Ca a d Ca equ val a b g g y ar 18 (281,054,017) (274,332,808)

Ca a d Ca equ val a d y ar 18 (209,864,819) (281,054,017)




A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

siGniFiCAnt Accounting Policies year ended 31st March, 2010

. CoRpoRAte inFoRMAtion. G ral

Piramal Glass Ceylon PLC (“Company”) is a public limited liability Company incorporated and domiciled in Sri Lanka andlisted in the Colombo Stock E change. The registered o ce o the Company and pr inciple place o Business is located at 148,Maligawa Road, Borupana, Ratmalana and the production acility is located in Horana.

. pr c al Ac v a d na ur o raDuring the year, the principal activity o the Company was the manu acturing and sale o glass bottles.

. par e r r a d Ul ma par e r rThe Company’s parent undertaking is Piramal Glass Limited, which is incorporated in India.

. Da Au r za r i u The Financial Statements o Piramal Glass Ceylon PLC or the year ended 31 March 2010 were authorized or issue in accordance

with a resolution o the Board o Directors on 21 April 2010.

. Ba pr araThe Financial Statements have been prepared on a historical cost basis, e cept or certain classes o asset categories that havebeen measured at air value. The Financial Statements are presented in Sri Lankan Rupees. The preparation and presentationo these nancial statements is in compliance with the Companies Act. No. 07 o 2007.

. C a g Acc u g p l cThe accounting policies adopted are consistent with those o the previous audited nancial year as described in the annual

nancial statements or the year ended 31 March 2009.

. sUMMARY oF siGniFiCAnt ACCoUntinG poLiCies

. . F r g Curr cy tra laThe nancial statements are presented in Sri Lankan Rupees, which is the Company’s unctional and presentationcurrency. Transactions in oreign currencies are initially recorded at the unctional currency rate ruling at the date o the transaction. Monetary assets and liabilities denominated in oreign currencies are retranslated at the unctional currency rate o e change ruling at the balance sheet date. All di erences are taken to pro t or loss. Non monetaryitems that are measured in terms o historical cost in a oreign currency are translated using the e change rates as at the dates o the initial transactions. Non monetary items measured at air value in a oreign currency are translatedusing the e change rates at the date when the air value was determined.

. . taxaCurr taxThe provision or income ta is based on the elements o income and e penditure as reported in the nancial statementsand computed in accordance with the provisions o the Inland Revenue Act.

Pursuant to agreement dated 19 July 2006 entered into with Board o Investment, the imposition, payment andrecovery o income ta shall not apply or a period o 5 years rom 10 December 2007. This e emption e pires on 9December 2012.

A ter said ta e emption period, the Company would be liable or income ta at the rate o 10% or a period o 2 yearsand at the rate o 20% thereon.

D rr d taxaDe erred income ta is provided, using the liability method, on temporary di erences at the balance sheet datebetween the ta bases o assets and liabilities and their carrying amounts or nancial reporting purposes.

De erred income ta liabilities are recognised or all ta able temporary di erences e cept where the de erred income

ta liability arises rom the initial recognition o an asset or liability in a transaction that is not a business combinationand, at the time o the transaction, a ects neither the accounting pro t nor ta able pro t or loss.



9A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

siGniFiCAnt Accounting Policies year ended 31st March, 2010 (Contd.)

De erred income ta assets are recognised or all deductible temporary di erences, carry- orward o unused ta assetsand unused ta losses, to the e tent that it is probable that ta able pro t will be available against which the deductibletemporary di erences, and the carry- orward o unused ta assets and unused ta losses can be utilised e cept wherethe de erred income ta asset relating to the deductible temporary di erence arises rom the initial recognition o an asset or liability in a transaction that is not a business combination and, at the time o the transaction, a ectsneither the accounting pro t nor ta able pro t or loss; and

The carrying amount o de erred income ta assets is reviewed at each balance sheet date and reduced to the e tent that it is no longer probable that su cient ta able pro t will be available to allow all or part o the de erred incometa asset to be utilised.

De erred income ta assets and liabilities are measured at the ta rates that are e pected to apply to the per iod whenthe asset is realised or the liability is settled, based on ta rates (and ta laws) that have been enacted or substantivelyenacted at the balance sheet date.

De erred income ta relating to items recognised directly in equity is recognised in equity and not in the income

statement.

The Inland Revenue Act does not apply as stated above under current ta es w.e. 10 December 2007. There ore temporarydi erences do not arise during the year under review.

sal taxRevenues, e penses and assets are recognised net o the amount o sales ta e cept where the sales ta incurred on apurchase o assets or service is not recoverable rom the ta ation authorities in which case the sales ta is recognisedas a part o the cost o the asset or part o the e pense items as applicable and receivable and payable that arestated with the amount o sales ta included. The amount o sales ta recoverable and payable in respect o ta ationauthorities is included as a part o receivables and payables in the Balance Sheet.

. . B rr w g CBorrowing costs are recognised as an e pense in the year in which they are incurred, e cept to the e tent whereborrowing costs that are directly attributable to the acquisition, construction, or production o an asset that takes asubstantial period o time to get ready or its intended use or sale, are capitalized as part o that asset.

. . i v rInventories are valued at the lower o cost and net realizable value, a ter making due allowances or obsolete and slowmoving items. Net realizable value is the price at which inventories can be sold in the ordinary course o business lessthe estimated cost o completion and the estimated cost necessary to make the sale.

The cost incurred in bringing inventories to its present location and conditions are accounted using the ollowingcost ormulae:-

Raw Materials - At actual cost on weighted average basisFinished Goods & Work-in-progress - At the cost o direct materials, direct labour and an appropriate proportion

o ed production overheads based on normal operating capacity.Consumables & Spares - At actual cost on weighted average basisMoulds & Neckring Equipment - At Cost less usage or ProductionGoods in Transit - At actual cost

. . trad a d o r R c vablTrade receivables are stated at the amounts they are estimated to realize net o allowances or bad and doubt ul receivables.

Other receivables and dues rom Related Parties are recognized at cost less allowances or bad and doubt ul receivables.



0 A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. . Ca a d Ca equ valCash and cash equivalents are de ned as cash in hand, demand deposits and short term highly liquid investments,readily convertible to known amounts o cash and subject to insigni cant risk o changes in value.

For the purpose o cash fow statement, cash and cash equivalents consist o cash in hand and deposits in banks net o outstanding bank overdra ts. Investments with short maturities i.e. three months or less rom the date o acquisitionare also treated as cash equivalents.

. . pr r y, pla a d equ mC a d Valua

All items o Property, Plant & Equipment are initially recorded at cost. Where items o Property, Plant and Equipment aresubsequently revalued, the entire class o such assets is revalued. Revaluations are made with su cient regularity toensure that their carrying amounts do not di er materially rom their air values at the balance sheet date. Subsequent to the initial recognition as an asset at cost, revalued Property, Plant and Equipment are carried at revalued amountsless any subsequent depreciation thereon. All other Property, Plant and Equipment are stated at histor ical cost less

depreciation.

When an asset is revalued, any increase in the carrying amount is credited directly to a revaluation surplus unless it reverses a previous revaluation decrease relating to the same asset, which was previously recognized as an e pense.In these circumstances the increase is recognized as income to the e tent o the previous write down. When an asset’scarrying amount is decreased as a result o a revaluation, the decrease is recognized as an e pense unless it reversesa previous increment relating to that asset, in which case it is charged against any related revaluation surplus, to thee tent that the decrease does not e ceed the amount held in the revaluation surplus in respect o that same asset.Any balance remaining in the revaluation surplus in respect o an asset, is trans erred directly to Retained Earningson retirement or disposal o the asset.

Accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount o the asset andthe net amount is restated to the revalued amount o the asset. Upon disposal, any revaluation reserve relating tothe particular asset being sold is trans erred to Retained Earnings.

When each major inspection is per ormed, its cost is recognised in the carrying amount o the plant and equipment as a replacement i the recognition criteria are satis ed.

An item o property, plant and equipment is derecognised upon disposal or when no uture economic bene ts aree pected rom its use or disposal. Any gain or loss arising on derecognition o the asset (calculated as the di erencebetween the net disposal proceeds and the carrying amount o the asset) is included in the income statement in the year the asset is derecognised.

The asset’s residual values, use ul lives and methods o depreciation are reviewed, and adjusted i appropriate, at each nancial year end.

. . L a -C m a y a a lFinance leases, which trans er to the Company substantially all the risks and bene ts incidental to ownership o theleased item, are capitalised at the inception o the lease at the air value o the leased property or, i lower, at thepresent value o the minimum lease payments. Lease payments are apportioned between the nance charges andreduction o the lease liability so as to achieve a constant rate o interest on the remaining balance o the liability.Finance charges are charged refected in the income statement.

Capitalised leased assets are depreciated over the shorter o the estimated use ul li e o the asset and the lease term,i there is no reasonable certainty that the Company will obtain ownership by the end o the lease term.

Operating lease payments are recognised as an e pense in the income statement on a straight line basis over the lease

term.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. .9 L a ld pr r y Prepaid lease rentals paid to acquire land use r ights are amortised over the lease term in accordance with the patterno bene ts provided. Leasehold Property is tested or impairment annually and is written down where applicable.

The impairment loss i any, is recognised in the income statement.

. . 0 i v mL g t rm i v mLong term investments are stated at cost. The cost o the investment is the cost o acquisition inclusive o brokerage

ees, duties and bank ees.

The carrying amount o long term investments is reduced to recognize a decline other than temporary in the value o investments, determined on an individual investment basis.

. . i v m pr rInvestment properties are measured initially at cost, including transaction costs. The carrying amount includes the

cost o replacing part o an e isting investment property at the time that cost is incurred i the recognition criteriaare met; and e cludes the costs o day to day servicing o an investment property.

A ter initial recognition the Company measure all o its investment property in according with requirements in SLAS 18(Revised 2005) Property, Plant and Equipment other than those meets the criteria to be classi ed as held or sale.

Investment properties are derecognised when either they have been disposed o or when the investment property ispermanently withdrawn rom use and no uture economic bene t is e pected rom its disposal. Any gains or losses onthe retirement or disposal o an investment property are recognised in the income statement in the event o retirement or disposal.

Trans ers are made to investment property when, and only when, there is a change in use, evidenced by the endo owner occupation, commencement o an operating lease to another party or completion o construction ordevelopment. Trans ers are made rom investment property when, and only when, there is a change in use, evidencedby commencement o owner occupation or commencement o development with a view to sale.

For a trans er rom investment property to owner occupied property or inventories, the deemed cost o property orsubsequent accounting is its cost at the date o change in use. I the property occupied by the Company as an owneroccupied property becomes an investment property, the Company accounts or such property in accordance with thepolicy stated under property, plant and equipment up to the date o change in use.

. . pr vProvisions are recognized when the company has a present obligation (legal or constructive) as a result o a past event, where it is probable that an outfow o resources embodying economic bene ts will be required to settle theobligation and a reliable estimate can be made o the amount o the obligation.

. . R r m B f obl gaa) D f d B f pla – Gra u y

The Company measures the present value o the promised retirement bene ts o gratuity which is a de ned bene t plan with the advice o an actuary every nancial year using Projected Unit Cost Method. Actuarial gains and lossesare recognized as income or e penses in the period in which it arises. The liability is not unded.

b) D f d C r bu pla – em l y ’ pr v d Fu d & em l y ’ tru Fu dAll employees who are eligible or Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributionsare covered by relevant contribution unds in line with respective statutes and regulations. The Companycontributes 12% and 3% o gross emoluments o employees to Employees’ Provident Fund and Employees’ Trust Fund respectively.

c) n R curr g C L v g All wa c a d r Lum - um aym em l yProvision has been made in the accounts or non recurr ing cost o living allowances payable to employees by thecollective agreement and other lump-sum payments as decided by the management.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. . im a rm AThe company assesses at each reporting date whether there is an indication that an asset may be impaired. I any suchindication e ists, or when annual impairment testing or an asset is required, the company makes an estimate o theasset’s recoverable amount. An asset’s recoverable amount is the higher o an asset’s or cash-generating unit’s airvalue less costs to sell and its value in use and is determined or an individual asset, unless the asset does not generatecash infows that are largely independent o those rom other assets or groups o assets. Where the carrying amount o an asset e ceeds its recoverable amount, the asset is considered impaired and is written down to its recoverableamount.

Impairment losses o continuing operations are recognised in the income statement in those e pense categoriesconsistent with the unction o the impaired asset, e cept or property previously revalued where the revaluationwas taken to equity. In this case the impairment is also recognised in equity up to the amount o any previousrevaluation.

For assets, an assessment is made at each reporting date as to whether there is any indication that previously recognisedimpairment losses may no longer e ist or may have decreased. I such indication e ists, the company makes an estimate

o recoverable amount. A previously recognised impairment loss is reversed only i there has been a change in theestimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. I that is the case the carrying amount o the asset is increased to its recoverable amount. That increased amount cannot "e ceed" the carrying amount that would have been determined, net o depreciation, had no impairment loss beenrecognised or the asset in prior periods. Such reversal is recognised in the income statement unless the asset is carriedat revalued amount, in which case the reversal is treated as a revaluation increase. Impairment losses recognised inrelation to goodwill are not reversed or subsequent increases in its recoverable amount.

. . i c m s a m

R v u R c gRevenue is recognized to the e tent that it is probable that the economic bene ts will fow to the Company and therevenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the airvalue o the consideration received or receivable net o trade discounts and sales ta es. The ollowing speci c criteriaare used or the purpose o recognition o revenue.

a) sal G dRevenue rom sale o goods is recognized when the signi cant risks and rewards o ownership o the goods havenot passed to buyer; with the Company retaining neither continuing managerial involvement to the degree usuallyassociated with ownership, nor e ective control over the goods sold.

b) i rInterest Income is recognized as the interest accrued unless collectability is in doubt.

c) D v d dDividend income is recognized on cash basis.

d) o rOther income is recognized on an accrual basis

Net Gains and losses o a revenue nature on the disposal o Property, Plant & Equipment have been accountedor in the income statement, having deducted rom proceeds on disposal, the carrying amount o the assets and

related selling e penses. On disposal o revalued Property, Plant and Equipment, amount remaining in RevaluationReserve relating to that asset is trans erred directly to Retained Earnings.

Gains and losses arising rom incidental activities to main revenue generating activities and those ar ising roma group o similar transactions which are not material, are aggregated, reported and presented on a net basis.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

. FUtURe ChAnGes in ACCoUntinG poLiCies

s a dard i u d bu y e c v :

e c sr La ka Acc u g s a dard u d bu y c v :

The ollowing standards have been issued by the Institute o Chartered Accountants o Sri Lanka and are e ective or theaccounting periods on the dates speci ed below.

a) sr La ka Acc u g s a dard - F a c al i rum ; pr a (sLAs ) a d sr La ka Acc us a dard - F a c al i rum ; R c g & M a ur m (sLAs )

SLAS 44 and 45 become e ective or nancial years beginning on or a ter 1 January 2011. Accordingly, the nancial Statements or the year ending 31 March 2012 will adopt SLAS 44 and 45, or the rst time.

These two standards together provide comprehensive guidance on identi cation, classi cation, measurement and

presentation o nancial instruments (including Derivatives) into nancial assets, nancial liabilities and equityinstruments.

In order to comply with the requirements o these standards, the Company is in the process o setting up animplementation plan in assessing the e ect o adoption o the a oresaid two standards. Due to the comple natureo the e ect o these standards the impact o adoption is not estimable as at the date o publication o these nancial statements.

b) sr La ka Acc u g s a dard 9 - s ar Ba d paym (sLAs 9)

SLAS 39 Share based payments, e ective or periods beginning on or a ter 1st January 2010 will be rst adopted inthe year ending 31 March 2011. This standard require an e pense to be recognized where the Company buys goods orservices in e change or shares or rights over shares (equity –settled transactions), or in e change or other assetsequivalent in value to a given number o shares or rights over shares ( cash- settled transactions). For equity-settledshare-based payment transactions, the Company is required to apply SLAS 39 to grants o shares, share options orother equity instruments that were granted a ter 1 January 2010.

The Company is in the process o evaluating to impact o this standard, and the impact o the same is not currentlyestimable as at the date o the publication o these nancial statements.




A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

notes to the Accounting - year ended 31st March, 2010

ReVenUe 0 0 009LKR LKR

. summary

Revenue (3.2) 3,518,763,226 2,936,155,203 3,518,763,226 2,936,155,203

. s gm al i rma Local Sales 2,352,476,608 2,511,908,251

E port Sales 1,166,286,618 424,246,952

3,518,763,226 2,936,155,203

. pRopeRtY, pLAnt AnD eQUipMent Bala c Add / tra r / Wr o Bala c

. A C a a tra r D al a a

0 .0 . 009 .0 . 0 0LKR LKR LKR LKR LKR

Buildings 1,254,468,987 15,155,109 - - 1,269,624,096Plant and Machinery 1,542,468,177 21,433,283 (33,638,074) (98,363,364) 1,431,900,022Electrical Power Installation 609,102,859 7,745,817 33,638,074 (4,948,271) 645,538,479Furnace 780,349,624 4,511,045 - - 784,860,669Motor Vehicles 51,533,907 312,892 (350,000) - 51,496,799Tools and Implements 8,019,162 1,142,815 - (954,943) 8,207,034O ce Equipment 128,262,485 1,826,174 (84,000) (24,695,817) 105,308,842Gas Station 21,116,708 - - - 21,116,708

4,395,321,909 52,127,135 (434,000) (128,962,395) 4,318,052,648

A Valua Freehold Land 132,870,000 - - - 132,870,000Buildings 90,292,720 - - - 90,292,720Plant and Machinery 867,280,845 - - - 867,280,845Electrical Power Installation 97,186,780 - - - 97,186,780

1,187,630,345 - - - 1,187,630,345

A F a c L aPlant and Machinery 14,335,027 - - - 14,335,027

14,335,027 - - - 14,335,027 Total Value o Assets 5,597,287,281 52,127,135 (434,000) (128,962,395) 5,520,018,020

4.2 i C ur C rucBala c i curr d tra r Wr o Bala c

a a Dur g a a0 .0 . 009 r d .0 . 0 0

LKR LKR LKR LKR LKR

Capital Work-in-Progress 5,276,156 12,324,022 (16,039,768) - 1,560,410 5,276,156 12,324,022 (16,039,768) - 1,560,410

t al Gr Carry g Am u 5,602,563,437 64,451,157 (16,473,768) (128,962,395) 5,521,578,431



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

notes to the Accounting - year ended 31st March, 2010

. pRopeRtY, pLAnt AnD eQUipMent (C d..)

. D r c a Bala c C arg d r D al / Wr o Bala ca a y ar tra r a a

0 .0 . 009 .0 . 0 0A C LKR LKR LKR LKR LKRBuildings 38,754,241 29,038,374 - - 67,792,615Plant and Machinery 110,901,609 113,402,742 (17,037,825) (98,175,624) 109,090,902Electrical Power Installation 43,804,524 34,330,607 17,037,825 (4,928,279) 90,244,677Furnace 116,746,388 89,383,676 - - 206,130,064Motor Vehicles 31,342,653 4,590,144 (122,523) - 35,810,274Tools and Implements 4,577,653 737,957 - (951,288) 4,364,323O ce Equipment 69,412,651 17,826,292 (84,000) (24,230,254) 62,924,689Gas Station 2,689,380 511,174 - - 3,200,554

418,229,100 289,820,966 (206,523) (128,285,445) 579,558,097

A Valua

Buildings 29,895,287 2,478,172 - - 32,373,459Plant and Machinery 507,456,986 51,579,355 - - 559,036,341Electrical Power Installation 50,331,038 3,707,094 - - 54,038,132

587,683,311 57,764,621 - - 645,447,932

A o F a c L aPlant And Machinery 9,496,038 985,533 - - 10,481,571

9,496,038 985,533 - - 10,481,571 Total Depreciation 1,015,408,449 348,571,119 (206,523) (128,285,445) 1,235,487,601

. n B k Valu 0 0 009

LKR LKRA CBuildings 1,201,831,481 1,215,714,746Plant and Machinery 1,322,809,120 1,431,566,568Electrical Power Installation 555,293,801 565,298,335Furnace 578,730,605 663,603,236Motor Vehicles 15,686,525 20,191,254Tools and Implements 3,842,711 3,441,508O ce Equipment 42,384,153 58,849,834Gas Station 17,916,154 18,427,328

3,738,494,551 3,977,092,809

A Valua /C i curr d c La R valua

Freehold Land 132,870,000 132,870,000Buildings 57,919,261 60,397,433Plant and Machinery 308,244,504 359,823,859Electrical Power Installation 43,148,648 46,855,742

542,182,413 599,947,034

o F a c L aPlant and Machinery 3,853,456 4,838,989

4,284,530,420 4,581,878,832

In the Course o Construction 1,560,410 5,276,156 t al Carry g Am u pr r y, pla a d equ m 4,286,090,830 4,587,154,987



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

notes to the Accounting - year ended 31st March, 2010 (Contd.)

. pRopeRtY, pLAnt AnD eQUipMent (C d..)

. t ra d r c a ma d a ll w .0 0 009

Buildings and Gas Station 2.5% on cost 2.5% on cost

Plant and Machinery 10% on cost 10% on cost Plant and Machinery - New Project 7.5% on cost 7.5% on cost New Project – Furnace – Steel 7.5% on cost 7.5% on cost New Project – Re ectories 12.5% on cost 12.5% on cost Electric Power Installation 15% on cost 15% on cost Electric Power Installation - New Project 05% on cost 05% on cost O ce Lab and Equipment

- Computer Systems 25% on cost 25% on cost - Others 10% on cost 10% on cost

Tools and Implements 10% on cost 10% on cost Motor Vehicles 15% on cost 15% on cost

. Lands and Buildings,Plant & Machinery, Electrical Installation were revalued during the nancial year ended 31st March 1991

by Messrs Development Finance Corporation o Ceylon. Further, reehold land has been valued during the year 1995 by Mr.

D.S.A. Senevirathne (A.I.V) . The resulting surpluses o LKR 93,473,350/- on the revaluation in nancial year 90/91 and LKR97,417,177/- on the revaluation in nancial year 94/95 had been trans erred to the revaluation reserve, which was ully utilisedor subsequent issues o bonus shares.

The reehold lands have been again revalued again by Mr. K.T.D. Tissera (Chartered Valuation Surveyor) in September 2007 and inMarch 2009. The resulting revaluation surplus reported amounted to LKR 571,175,000/- and LKR 95,857,543/- respectively.

The carrying amount o revalued assets that would have been included in the nancial statements had the assets been carriedat cost less depreciation is as ollows:

Cumula v n nD r c a Carry g Carry gi a w r Am u Am u

Cla A C carr d a c0 0 0 0 009

LKR LKR LKR LKRFreehold Land 11,651,585 - 11,651,585 11,651,585Buildings 12,831,883 6,095,144 6,736,739 7,057,535Plant and Machinery 66,199,323 66,199,323 - -Electrical Power Installation 7,876,358 7,482,539 393,819 787,635

. During the year the Company acquired Property, Plant and Equipment to the aggregate value o LKR 48,411,389/- (2009 - LKR656,590,656/-) or cash.

. Property, Plant and Equipment includes ully depreciated assets having a gross carrying amounts o LKR 83,517,539/-

. LeAsehoLD pRopeRtY 0 0 009LKR LKR

Balance at the beginning o the year 25,735,070 26,783,327Amortisation during the year (1,105,080) (1,048,257)

Balance at the end o the year 24,629,990 25,735,070

. inVestMent pRopeRtY 0 0 009LKR LKR

Balance at the beginning o the year 666,130,000 703,142,457Trans ers during the year or owner occupation purposes - (37,012,457) Balance at the end o the year 666,130,000 666,130,000

. During the year 2007/2008 the Company relocated its production acility rom Rathmalana to Horana. Due to the relocation the landpreviously utilised or the production has been classi ed under Investment Property as per SLAS 40 as held or “un determined utureuse”. No Management decision had been taken on the uture intended utilisation o this land as at the date o the balance sheet.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. LonG teRM inVestMent

. i v m equ y s cur - Qu dn s ar 0 0 009

Carry g Mark Carry g MarkValu Valu Valu Valu0 0 009 LKR LKR LKR LKR

DFCC Bank 18,032 18,032 261,359 3,259,284 261,359 1,226,176

0 0 009. inVentoRies LKR LKR

Raw Materials 289,285,900 249,410,127Work in Progress 15,481,230 6,938,141Finished Goods 125,367,411 262,985,198Consumables and Spares 308,588,437 243,471,685Less: Allowance or obsolete and slow moving inventory (4,812,327) (4,151,988)

733,910,651 758,653,163

9. tRADe AnD otheR ReCeiVABLes

0 0 0099. summary LKR LKR

Trade Debtors 951,999,304 737,788,476Less : Allowance or Doubt ul Debts (39,424,906) (33,915,474)

912,574,398 703,873,002Other Debtors 44,088,707 207,122,595Advances and Prepayments 55,054,186 29,691,156Loans to Company O cers (9.2) 6,587,052 10,277,132

1,018,304,343 950,963,885 9. L a C m a y o fc r

Balance as at the beginning o the year 10,277,132 16,139,350Loans granted during the year 2,897,000 2,980,000

13,174,132 19,119,350Less: Repayments (6,587,080) (8,842,218) Balance at the end o the year 6,587,052 10,277,132

0. stAteD CApitAL 0 0 009numb r numb r

Ordinary Shares 950,086,080 950,086,080

LKR LKROrdinary Shares 1,526,407,485 1,526,407,485

0. R g , pr r c a d R r c Cla Ca al The holders o ordinary shares con er their r ight to receive dividends as declared rom time to time and are entitled to one voteper share at a meeting o the Company. All shares rank equally with regard to the Company’s residual assets.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. otheR ReseRVes 0 0 009LKR LKR

General Reserve (11.1) 21,502,500 21,502,500Revaluation Reserve (11.2) 667,032,543 667,032,543

688,535,043 688,535,043

. G ral R rv w c a r v u r rv r r am u a d by d r c r r g ral a l c

. R valua R rv 0 0 009LKR LKR

o : pr r y, pla a d equ mAs at 1 April 667,032,543 571,175,000Revaluation surplus during the year - 95,857,543 As at 31 March 667,032,543 667,032,543

The above revaluation surplus consists o net surplus resulting rom the revaluation o Property, Plant and Equipment as describedin Note 4.6. The unrealised amount cannot be distributed to shareholders.

. inteRest BeARinG LiABiLities

0 0 009 Am u Am u Am u Am u

R ayabl R ayabl R ayabl R ayablW Y ar A r Y ar t al W Y ar A r Y ar t al

LKR LKR LKR LKR LKR LKR

Finance Leases (12.1) 1,174,113 - 1,174,113 1,934,202 1,174,112 3,108,314Syndicated Project Loan (12.2) 690,354,337 1,319,985,457 2,010,339,794 831,000,000 1,269,000,000 2,100,000,000Project Loan (12.3) 151,474,698 453,982,329 605,457,026 141,648,333 590,376,607 732,024,940Short Term Loans (12.4) 803,684,005 - 803,684,005 853,938,733 - 853,938,733

Bank Overdra ts (18.2) 253,922,653 - 253,922,653 298,308,297 - 298,308,297 1,900,609,805 1,773,967,786 3,674,577,591 2,126,829,565 1,860,550,719 3,987,380,284

. F a c L aA A n w L a R aym A A

0 .0 . 009 ob a d .0 . 0 0LKR LKR LKR LKR

Finance Leases 3,240,735 - (2,046,780) 1,193,955 3,240,735 - (2,046,780) 1,193,955

Gross Liability 3,240,735 1,193,955Finance Charge allocated to uture period (132,421) (19,842) Net Liability 3,108,314 1,174,113

. sy d ca d pr j c L aA A n w L a R aym exc a g A A

0 .0 . 009 ob a d D r c .0 . 0 0Adju m

LKR LKR LKR LKR LKRDFCC Bank 550,000,000 - (15,277,788) - 534,722,212Bank o Ceylon 500,000,000 - (16,567,862) (1,012,883) 482,419,255Hatton National Bank PLC 525,000,000 - (28,065,945) (994,175) 495,939,880Sampath Bank PLC 525,000,000 - (26,773,224) (968,329) 497,258,447

2,100,000,000 - (86,684,819) (2,975,387) 2,010,339,794



9A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. inteRest BeARinG LiABiLities (C .)

L d g i u na ur Fac l y i r Ra R aym t rm ou a d g A A .UsD LKR

sy d ca d L aU n v mb r 009 DFCC Bank Syndicated Loan in LKR 1st Instalment o - -

Rs. 507 Million andBank o Ceylon Syndicated Loan in LKR the balance is payable in - -

59 equal instalments a terHatton National Bank PLC Syndicated Loan in LKR

AWDR + 4%a grace period o - -24 months rom the date

Sampath Bank PLC Syndicated Loan in LKR o rst disbursement. - -

A r n v mb r 009 DFCC Bank Syndicated Loan in LKR *5 Installments equalent - 127,458,332

o 1/72 payable romBank o Ceylon Syndicated Loan in LKR

AWDR + 4%

January 2010 Balance - 90,000,000

Payable in June 2010Hatton National Bank PLC Syndicated Loan in LKR - 121,527,776

Sampath Bank PLC Syndicated Loan in LKR - 121,527,776

DFCC Bank Syndicated Loan in LKR AWPLR - 0.25% Repayable by 20 monthly - 407,263,880installments o Rs.1,454,514/-commencing rom August 2009to March 2011 and 52 monthlyinstallments o Rs.7,496,341/-commencing rom April 2011 toJuly 2015 therea ter.

Bank o Ceylon Syndicated Loan Repayable by 2 monthly 3,436,366 392,419,255Granted in USD installments o USD 12,300/-

commencing rom December 2009ollowed by 8 quarterly

installments o USD 144,000/-and 12 quarterly installment o USD 200,000/- therea ter.

Hatton National Bank PLC Syndicated Loan LIBOR + 4.5% Repayable by 3 monthly 3,278,680 374,412,104Granted in USD foor Interest installments o USD 12,131/-

Rate o 6.5% commencing rom December 2009ollowed by 8 quarterly installments

o USD 142,528/- and 11quarterly installments o USD 207,314/- therea ter.

Sampath Bank PLC Syndicated Loan Repayable by 8 quarterly 3,290,226 375,730,671Granted in USD installment o US$ 145,000/-

and 12 quarterly installment o US$ 193,350/- therea ter.

10,005,272 2,010,339,794



0 A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. inteRest BeARinG LiABiLities (C .)

. pr j c L aA A n w L a R aym A A

0 .0 . 009 ob a d .0 . 0 0LKR LKR LKR LKRDFCC Bank 233,333,332 - (54,166,671) 179,166,661Hatton National Bank PLC (HNB) 248,691,608 - (33,811,885) 214,879,723Sampath Bank PLC 250,000,000 - (38,589,358) 211,410,642

732,024,940 - (126,567,914) 605,457,026

L d g i u na ur Fac l y i r Ra R aym t rm ou a d g A A .0 . 0UsD LKR

U n v mb r 009 Bank o Ceylon Project Loan Granted in LKR Repayable by 60 monthly - -

installments a ter a grace

Hatton National Bank PLC Project Loan Granted in LKR AWPLR + 1% period o 12 months rom the - -date o rst disbursement.

Sampath Bank PLC roject Loan Granted in LKR - -

A r n v mb r 009 DFCC Bank Project Loan Granted in LKR AWPLR + 1% Repayable by 60 monthly

installments a ter a graceperiod o 12 months rom thedate o rst disbursement. - 179,166,661

Sampath Bank PLC Project Loan Granted in USD 52 monthly installments

LIBOR + 4.5%, o USD 37,558/- eachfoor Interest and a nal installment rate o 6.5% o USD 10,954/- 1,851,296 211,410,642

Hatton National Bank PLC Project Loan Granted in USD 55 monthly installments o USD 36,186/-. 1,881,675 214,879,723

3,732,971 605,457,026

. s r t rm L aA A n w L a R aym A A

0 .0 . 009 ob a d .0 . 0 0LKR LKR LKR LKR

Commercial Bank o Ceylon PLC 66,500,000 528,591,017 (480,315,277) 114,775,740People's Bank 81,763,168 418,795,228 (419,585,017) 80,973,37Citi Bank NA 423,425,565 3,876,832,313 (3,910,257,878) 390,000,001Standard Chartered Bank 282,250,000 719,181,773 (783,496,887) 217,934,886

853,938,733 5,543,400,331 (5,593,655,059) 803,684,005

. inCoMe tAX 20 0 009LKR LKR

. Bala c (payabl ) / R c vabl a a B g g y ar 20,424,232 10,880,354Under/(Over) Provision o current ta es in respect o prior years (13.3) - 1,127,857(Provision) / Reversal Made During the year (13.3) - (813,730)Payments Made During the year 7,577,404 9,229,751 Balance as at the end o the year 28,001,636 20,424,232



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. inCoMe tAX (C .)

. Pursuant to agreement dated 19 July 2006 entered into with Board o Investment, the imposition, payment and recovery o income ta shall not apply or a period o 5 years rom 9th December 2007. This e emption e pires on 9 December 2012.

A ter the said e emption period, the Company would be come liable or income ta at the rate o 10% or a period o 2 yearsand at the rate o 20% thereon.With the commencement o the ta e emption period the Company is liable to pay income ta on the ta able income derived

rom other sources e cluding rom manu acturing operations.

Income ta payments made during the year represents payments made in respect o Economic Services Charge in accordancewith the Economic Service Charge Act No. 13 o 2006 and amendments thereon.

. Curr i c m tax 0 0 009LKR LKR

Current Ta E pense on Ordinary Activities or the Year - -Current Ta E pense on Other Income or the Year - 813,730Under/(Over) Provision o current ta es in respect o prior Years - (1,127,857)

D rr d i c m tax De erred Ta ation Charge/(Reversal) - -

i c m ax x r r d i c m s a m - (314,127)

. DeFeRReD tAX 0 0 009LKR LKR

Balance as at Beginning o the Year 18,979,577 18,979,577Provision/(Reversal) Made During the Year - -

Balance as at the end o the Year 18,979,577 18,979,577

Due to the ta e emption period or 5 years commencing w.e. 10th December 2007, the De erred Ta has been computed up to9th December 2007 and the reversal arising has been recognised in the Income Statement. The de erred ta reversal that arisesduring the ta e emption period amounting to Rs. 71,595,544/- was recognised under Retained Earnings in 2007/08.

. RetiReMent BeneFit oBLiGAtions

. ex D f d B f pla 0 0 009LKR LKR

Current Service Cost 7,225,702 8,080,704Interest Cost on Bene t Obligation 8,450,027 7,054,361Net Actuarial (Gain)/ Loss (10,094,028) (1,057,758) t al ex 5,581,701 14,077,307

D f d B f obl gaBala c a a b g g y ar Balance as at 1 April 84,500,270 78,381,791Current Service Cost 7,225,702 8,080,704Interest Cost on Bene t Obligation 8,450,027 7,054,361Actuarial Losses/(Gain) on Obligation (10,094,028) (1,057,758)Bene t Paid (3,156,752) (7,958,828) Balance as at 31 March 86,925,218 84,500,270

. Messrs. K.A.Pandit, Actuaries, carried out an actuarial valuation o the de ned bene t plan - gratuity on 31st March 2010.Appropriate and compatible assumptions were used in determining the cost o retirement bene ts. The principal assumptionsused as at 31.03.2010 are as ollows:

0 0 009Discount rate assumed (%) 10% 9%Further salary increase (%) 8.5% + salary scales 8% + salary scalesMethod o actuarial valuation Projected Unit Cost method Projected Unit Cost method



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. tRADe AnD otheR pAYABLes 0 0 009LKR LKR

Trade Payable - Related Party (16.1) 10,615,304 8,968,261- Others 260,039,772 256,044,740

Other Paybles - Related Party (16.2) 359,217,720 236,495,850Sundry Creditors including Accrued E penses 165,204,563 147,269,079 795,077,359 648,777,931

. trad Du R la d par y

R laR laPiramal Glass Limited - India Parent Company 10,615,304 8,968,261

10,615,304 8,968,261

. o r payabl - R la d par y R la

Piramal Glass Limited - India Parent Company 359,217,720 236,495,850

359,217,720 236,495,850

. DiViDenDs pAYABLe 0 0 009LKR LKR

Unclaimed Dividends 10,860,992 10,881,132

10,860,992 10,881,132

. D v d d pa d 0 0 009LKR LKR

Declared and paid during the yearFinal dividends or 2008 - Rs. 0.02 per share - 19,001,722

. CAsh AnD CAsh eQUiVALents 0 0 009LKR LKR

. Fav urabl Ca a d Ca equ val Bala cCash and Bank Balances 44,057,834 17,254,280

44,057,834 17,254,280

. U av urabl Ca a d Ca equ val Bala cBank Overdra t (Note 12) (253,922,653) (298,308,297) Cash and cash equivalents or the purpose o Cash Flow Statement (209,864,819) (281,054,017)

9. otheR opeRAtinG inCoMe 0 0 009LKR LKR

Income rom Investments - Quoted 90,160 90,160Gain on Sales o Fi ed Assets - 52,712,168Interest Income 257,863 369,263

348,023 53,171,591

0. FinAnCe Cost 0 0 009LKR LKR

Interest E pense on Overdra ts 42,234,799 55,724,561Finance Charges on Lease Liabilities 112,578 207,616Interest E pense on Short Term Loans 127,376,761 151,953,405Interest E pense on Project Loan 411,461,853 450,812,671

581,185,991 658,698,253



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. Loss BeFoRe tAX 0 0 009LKR LKR

i clud g C sali clud g C salDepreciation 343,112,285 324,948,916

Personnel Costs including the ollowing;- De ned Bene t Plan Costs -Gratuity 4,622,665 11,114,249- De ned Contribution Plan Costs - EPF & ETF 14,392,625 12,401,226]

i clud g Adm ra exDirectors’ Fees and Emoluments 31,085,545 28,321,427Auditors’ Remuneration - Fees and E penses 565,325 613,931Technical Fee* 173,629,747 72,773,868Depreciation 5,458,834 5,381,189Personnel Costs including the ollowing;- De ned Bene t Plan Costs -Gratuity 959,035 2,774,179- De ned Contribution Plan Costs - EPF & ETF 1,557,370 2,242,595

Donations 128,885 521,428E change (Gain) / Loss 4,972,544 (7,900,055)

i clud g s ll g a d D r bu CAdvertising Costs 112,201 252,086Allowance or Doubt ul Debts 32,024,632 27,918,746

*Technical Fee represents the amount payable to Piramal Glass Limited - India or the technical advises and assistance providedduring the per iod as per the agreement entered into between the two companies. As per the agreement, i Manu actured Pro t be ore Interest, Depreciation and Ta (PBIDT) is 30% or more the amount payable is 5 % o the Manu actured bottle turnover,else 12.5% o the PBIDT or Manu actured Bottles as in 2009.

. Loss peR shARe

. Basic Loss Per Share is calculated by dividing the net loss or the year attributable to ordinary shareholders by the weightedaverage number o ordinary shares outstanding dur ing the year. The weighted average number o ordinary shares outstandingduring the year and the previous year are adjusted or events that have changed the number o ordinary shares outstanding,without a corresponding change in the resources such as a bonus issue.

. The ollowing refects the income and share data used in the basic Loss Per Share computations.

Am u U d a num ra r: 0 0 009

LKR LKR Net Loss Attributable to Ordinary Shareholders or basic Loss Per Share (61,091,876) (260,935,410)

0 0 009numb r ord ary s ar U d a D m a r: numb r numb r

Weighted Average number o Ordinary Shares in issue 950,086,080 950,086,080

. CoMMitMents AnD ContinGenCies

. Ca al ex d ur C mm mThe Company does not have signi cant capital commitments as at the balance sheet date.

. C g L ab l There are no signi cant contingent liabilities as at the balance sheet date.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0


. Assets pLeDGeD The ollowing assets have been pledged as security or liabilities.

Carry g Am u pl dg d

na ur a na ur L ab l y 0 0 009 i clud d u d r R M . R M .

Immovable Properties First / secondary Mortgage 4,666 4,461 Property, Plant or Loans and Borrowings & Equipment

4,666 4,461

. eVents oCCURRinG AFteR the BALAnCe sheet DAte There have been no material events occurring a ter the Balance Sheet date that require adjustments to or disclosure in the

nancial statements.

. ReLAteD pARtY DisCLosUResDuring the year the Company entered into transactions with the ollowing Related Parties.

. tra ac w Gr u C m anam C m a y R laPiramal Glass Limited Parent Company

0 0 009na ur tra ac LKR LKRna ur tra ac LKR LKRLKR LKRPurchasing o Bottles 34,608,390 44,392,475Purchasing o Moulds 5,724,690 -Technical Fees 173,629,747 72,773,868

. The amounts payable to the above related party as at 31 March 2010 and 31 March 2009 are disclosed in Notes 16.1 and 16.2.

. tra ac w D r c r / K y Ma ag m p r l *

0 0 009LKR LKREmoluments and Fees Including Other Bene ts 31,085,545 28,321,427 Total compensation paid to key management personnel 31,085,545 28,321,427

* Key Management personnel include the Board o Directors and the Managing Director o the Company.



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

. stoCK eXChAnGe ListinGIssued Ordinary Shares o Piramal Glass Ceylon PLC are listed with Colombo Stock E change o Sri Lanka.

. oRDinARY shARe hoLDeRs As At .0 . 0 0

Fr m t n . h ld r n . s ar % 1 1,000 1,285 626,216 0.07

1,001 10,000 8,485 25,160,574 2.6510,001 100,000 1,290 43,439,467 4.57

100,001 1,000,000 290 77,904,967 8.20Over 1,000,001 41 802,954,856 84.51

11,391 950,086,080 100.00

Ca g r s ar h ld r

Local Individuals 11,158 162,703,742 17.13Local Institutions 187 193,096,200 20.32

Foreign Individuals 41 27,357,458 2.88Foreign Institutions 5 566,928,680 59.67 11,391 950,086,080 100.00

Percentage o shares held by the public - 43.54%

. 0 MAJoR shARehoLDeRs

nam s ar ld r n . s ar %

1 Piramal Glass PLC 536,331,880 56.4512 DFCC Vardhana Bank Ltd/ Mr. R F T Perera 50,000,000 5.2633 Employees Provident Fund 39,857,142 4.1954 Mr. L M S H Alnaqib 25,000,000 2.631

5 Elgin Investments Limited 23,191,700 2.4416 DFCC Bank A/C 1 12,981,852 1.3667 Sri Lanka Insurance Corporation Ltd - General Fund 10,539,428 1.1098 Symphony Capital Ltd 10,063,600 1.0599 Mr. D K Subasinghe & Mrs. S N Subasinghe 8,000,000 0.842

10 J B Cocoshell (PVT) Ltd 7,481,500 0.78711 Aviva NDB Insurance PLC A/C No 03 6,900,400 0.72612 Bangkok Glass Industry Company Limited 6,280,000 0.66113 Aviva NDB Insurance PLC A/C No 07 5,337,500 0.56214 Freudenberg Shipping Agencies Limited 5,156,571 0.54315 Mr. M K Chandrasiri 5,000,000 0.52616 Alpe Marine (PVT) Ltd 5,000,000 0.52617 The Ceylon Chamber o Commerce Account No 02 4,678,000 0.49218 Mr. A J Tissera 3,850,500 0.40519 Dr. T Senthilverl 3,481,200 0.36620 Bank o Ceylon No. 1 Account 2,521,200 0.265

Sub Total 771,652,473 81.219Others 178,433,607 18.781 Grand Total 950,086,080 100.00

. shARe pRiCe

Mark r c r ar r y ar

A a Da A a Da/0 / 0 0 /0 / 009

Highest Price - LKR2.60 18/02/2010 LKR2.70 28/04/2008

Lowest Price - LKR1.30 17/04/2010 LKR1.20 30/03/2009

Closing Price - LKR2.20 LKR1.30

shARehoLDeRs’and Investor Information



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

Marc 00 00 00 00 00 00 00 009 009 0 0LKR.’000 LKR.’000 LKR.’000 LKR.’000 LKR.’000 LKR.’000 LKR.’000 LKR.’000 LKR.’000 LKR.’000

trad g R ulRevenue 787,661 844,665 920,209 1,261,291 1,274,173 1,555,783 1,857,186 2,014,128 2,936,155 3,518,763Pro t/(Loss) be ore Ta 80,248 140,628 140,959 159,752 338,558 272,558 184,082 49,174 (261,250) (61,092)Ta E pense/(Reversal) 15,183 50,947 46,030 46,948 106,547 102,458 80,076 14,031 (314) -Pro t/(Loss) a ter Ta 65,065 89,681 94,928 112,804 232,011 170,129 104,006 35,142 (260,935) (61,092)

shARe CApitALAnD ReseRVesShare Capital 277,108 277,108 277,108 277,108 554,217 554,217 554,217 - - -Share Premium 497,148 497,148 497,148 497,148 220,039 220,039 220,039 - - -Stated Capital - - - - - - - 1,526,407 1,526,407 1,526,407Other Reserves (30,696) (24,148) 34,757 47,801 163,427 251,569 338,949 933,730 749,651 688,558

Shareholders’ Funds 743,560 750,108 809,013 822,057 937,683 1,025,825 1,113,205 2,460,137 2,276,058 2,214,965

Assets LessLiABiLities

Current Assets 535,297 496,143 512,898 599,861 667,724 774,195 1,188,304 1,462,651 1,747,296 1,824,274Current Liabilities (246,723) (117,384) (276,358) (257,760) (355,987) (466,535) (636,205) (1,947,622) (2,786,489) (2,706,548)

Net Current Assets(Liabilities) 288,574 378,759 236,540 342,101 311,737 307,660 552,099 (484,971) (1,039,193) (882,274)Long Term Assetsand Investments 567,883 518,420 884,565 848,040 1,038,296 1,001,577 1,194,012 4,888,629 5,279,281 4,977,112

Total Assets LessCurrent Liabilities 856,457 897,179 1,121,105 1,190,141 1,350,033 1,309,237 1,746,111 4,403,658 4,240,088 4,094,838

Long Term &De erred Liabilit ies (112,897) (147,071) (312,692) (368,084) (412,350) (283,413) (632,906) (1,943,521) (1,964,031) (1,879,873)

n A 743,560 750,108 809,013 822,057 937,683 1,025,825 1,113,205 2,460,137 2,276,057 2,214,965

Ra & o r i rma

Earning/(Loss) Per Share 2.35 3.24 3.43 2.04 0.45 0.31 0.17 0.05 (0.27) (0.06)Dividend Per Share - 3.00 3.00 3.60 0.18 0.15 0.03 0.15 0.02Market value per share 7.50 17.00 20.25 27.00 47.75 2.50 2.50 2.00 1.30 2.20Price Earning Ratio 3.19 5.25 5.90 13.24 11.40 8.06 14.71 40.00 (4.81) (36.66)Interest Cover 7.32 25.74 19.02 7.00 13.56 9.57 8.06 1.22 0.60 0.89Current Ratio 2.17 4.22 1.85 2.33 1.88 1.66 1.87 0.75 0.63 0.67Liquid Ratio 1.21 2.27 1.13 1.32 1.01 0.93 1.29 0.51 0.35 0.40Total Debt/Total Assets 0.33 0.26 0.42 0.43 0.45 0.43 0.53 0.61 0.68 0.67Gearing Ratio 0.11 0.04 0.23 0.20 0.20 0.07 0.41 0.96 1.25 1.18Net Asset per share 26.80 27.07 29.19 29.66 16.92 1.85 2.01 2.59 2.40 2.33

ten Year Financial Review



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

Earning Per share : Net Pro t A ter Ta ation / Number o Shares

Dividend Per share : Dividends paid during the year / Number o Shares

Price Earning Ratio : Market Value as at year end / Earning Per Share

Interest Cover : Pro t Be ore Interest / Interest

Current Ratio : Current Asset / Current Liabilities

Liquid Ratio : (Current Asset - Stocks) / Current Liabilities

Total Debt/Total Assets : Total Liabilities / Total Assets

Gearing Ratio : Long Term Loans / Shareholders’ Fund

Net Asset per share : Shareholders Funds / Number o Shares

GLossARY of Financial Terminology



A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

notiCe of Meeting

NOTICE IS HEREBY GIVEN that the Fi ty Fi th (55th) Annual General Meeting o the Company will be held on the 06th o September 2010, at 9.30 am at Mount Lavinia Hotel,100, Hotel Road, Mount Lavinia or the ollowing purposes.

oRDinARY BUsiness1. To receive and consider the Annual Report o the Board and the Financial Statements o the Company or the year

ended 31st March 2010, together with the Report o the Auditors thereon.2. To re-appoint Messrs, Ernst & Young, Chartered Accountants as Auditors o the Company until the ne t Annual General

Meeting and to authorize the Directors to their remuneration.3. To re-elect as a Director Mr.R.M.S.Fernando, who retires by rotation in terms o Article 98 o the Articles o Association

o the Company and being eligible has o ered himsel or re-election.4. To re-elect as a Director Mr.S.U.Arora who having been appointed by the Board as a Director in terms o Article 103 o

Article o Association o the company and being eligible has o ered himsel or re-election.5. To approve the donations and contributions made by the Directors during the year under review and to authorise the

Board to determine donations and contributions or the ensuing year.

speCiAL BUsiness6. To consider and pass the ollowing resolutions or amending the “Articles o Association” in accordance withs c

A C l mb s ck exc a g L g Rul a adv d by C rcular n : / 009 da d 0 . . 009issued by theColombo Stock E change.

(i) s c al R lu : “i r by r lv d athe present Article 50(b) be deleted and the ollowing Article be inserted in its place

as Article 50(b):50(b) “Notwithstanding any provision in these Articles suggesting the contrary, shares listed on the Colombo Stock

E change shall be reely trans erable and registration o the trans er o such listed shares shall not be subject toany restriction, save and e cept to the e tent required or compliance with statutory requirements.”

(ii) s c al R lu :“i r by r lv d athe present Article 163 be deleted and instead the ollowing Article be inserted inits place as Article 163:

163. “ Where notice is given by an advertisement, such advertisement, shall be published in Sinhala, Tamil and Englishnational daily newspapers.”

(iii) s c al R lu : “i r by r lv d athe ollowing new Article as “Article 171” be inserted immediately a ter the e isting

Article 170. “CoMpLiAnCe With RULes ”.171. “Notwithstanding anything to the contrary contained in the Articles o Association o the Company, so long as the

Company is listed on the Colombo Stock E change, the Company shall comply with the Rules o the Colombo StockE change and the Central Depository System, which shall be in orce rom time to time.”

n :Any shareholder entitled to attend and vote is entitled to appoint a pro y to attend and vote instead o him.A pro y need not be a shareholder. Instruments appointing pro ies must be lodged with the Company not less than 48hours be ore the meeting.

By Order o the Board

Ms. Sagarika JayasunderaCOMPANY SECRETARY PIRAMAL GLASS CEYLON PLC.148, Maligawa Road, Borupana,Ratmalana.

Colombo on this 08th day o June 2010.



9A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

. nam pr xy h ld r

Being a member/members o the Piramal Glass Ceylon PLC hereby appoint:

AnnUAL GeneRAL MeetinG

. na al id y Card numb r s ar ld r

. Addr s ar ld r

. na al id y Card numb r pr xy h ld r

. Full nam s ar ld r

“Failing him, Mr.Vijay Shah, the Chairman o Piramal Glass Ceylon PLC, or ailing him, Dr.C.T.S.B.Perera or ailing him, Mr.R.M.S. Fernandoor ailing him, Mr. S.U.Arora or ailing him, Mr.Sanjay Tiwari as my/our pro y to speak/vote or me/us on me/our behal at the 55th Annual General Meeting o the Company to be held on the 06th o September 2010 at Mount Lavinia Hotel and at any adjournment thereo andat every poll which may be taken in connection with such meeting and to vote as indicated below.”

oRDinARY BUsiness F r Aga1. To receive and consider the Annual Report o the Board and the Financial Statements o the

Company or the year ended 31st March 2010, together with the Report o the Auditors thereon.

2. To re-appoint Messrs, Ernst & Young, Chartered Accountants as Auditors o the Company until thene t Annual General Meeting and to authorize the Directors to their remuneration.

3. To re-elect as a Director Mr.R.M.S.Fernando, who retires by rotation in terms o Article 98 o theArticles o Association o the Company and being eligible has o ered himsel or re-election.

4. To re-elect as a Director Mr.S.U.Arora who having been appointed by the Board as a Directorin terms o Article 103 o Article o Association o the company and being eligible has o eredhimsel or re-election.

5 To approve the donations and contributions made by the Directors during the year under reviewand to authorise the Board to determine donations and contributions or the ensuing year.

speCiAL BUsiness

6. To consider and pass the ollowing resolutions or amending the “Articles o Association” in accordance with Section 6A o Colombo Stock E change Listing Rules as advised by Circular No: 12/2009 dated 07.12.2009 issued by the Colombo Stock E change.

(i) The Special Resolution No.6(1) as contained in the Notice o Meeting.

(ii) The Special Resolution No.6(2) as contained in the Notice o Meeting.

(iii) The Special Resolution No.6(3) as contained in the Notice o Meeting.

AttenDAnCe sLip

SHAREHOLDER - PLACE YOUR SIGNATURE ONLY IN THE SPACE PROVIDEDPROxYHOLDER - PLACE YOUR NAME, NIC NO., SIGNATURE IN THE SPACE PROVIDED

SIGNATURE SHAREHOLDER

SIGNATURE PROxYHOLDER

PROxYHOLDER’S FULL NAME

PROxYHOLDLER’S NIC NUMBER

Important: Please br ing your National Identity Card when you attend the Meeting.

FoRMof Proxy

. Addr pr xy h ld r

7. Number o Shares held Central Depository System Non Central Depository System

8. Signature o ShareholderDate



0 A n n u a l R e p o r t 2 0 0 9 / 2 0 1 0

A Pro y need not be a member o the Company.

instRUCtions FoR the CoMpLetion oF the FoRM oF pRoXY

Shareholders are requested to:

1. Forward the completed orm o pro y to the Registered O ce o the Company, Piramal Glass Ceylon PLC at No.148,

Maligawa Road, Borupana, Ratmalana, not less than 48 hours be ore the time appointed or the holding o the

meeting.

2. Per ect the orm o pro y by lling in all necessary details legibly, signing and dating.

3. Complete the orm in capital letters.

I the Shareholder is a Company or a Corporate body the orm o the pro y should be e ecuted under the common

seal in accordance with its Articles o Association.

FoRMof Proxy





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PIRAMAL GLASS CEYLON PLC - Annual Report 2009-2010

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