Elpl 2009 10

Financial HigHligHts
Turnover ( Rs.Million )
2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 2006 2007 2008 2009 2010
Net Profit After Tax ( Rs.Million )
180 160 140 120 100 80 60 40 20 (20) (40) (60) (80)
Shareholders' Funds (Rs. Million)

1,100 1,000 900 800 700 600 500 400 300 200 100 -
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
Tea
Rubber
Oil palm & Other Crops
Year ended 31st March
2010 Rs.000
2009 Rs.000
% increase/ (Decrease)
Turnover Gross Profit Profit / (Loss) before Tax Income Tax (Expense) / Income Profit/(Loss) after Tax Non-Current Assets Current Assets Current Liabilities Shareholders Fund Capital Expenditure Earnings per Share (Rs.) Dividend per Share (Rs.) Net assets per Share (Rs.) Stated Capital Net Assets Return on Equity (%)
2,215,126 241,211 63,817 63,817 2,910,616 774,102 888,019 1,017,997 268,524 2.46 0.50 27.94 694,236 1,017,997 6.27
1,556,182 89,528 (61,705) (61,705) 2,699,843 271,273 1,201,788 609,944 277,835 (2.47) 24.44 350,000 609,944 (10.12)
42 169 203 203 8 185 (26) 67 (3) 200 100 14 98 67 162
Elpitiya plantations plc annual REpoRt 2009/10
auDitoRs RePoRt
Chartered Accountants 201 De Saram Place P. O. Box 101 Colombo 10 Sri Lanka. Tel : (0) 11 2463500 Fax Gen : (0) 11 2697369 Tax : (0) 11 5578180 eysl@lk.ey.com
inDePenDent auDitoRs RePoRt to tHe sHaReHolDeRs oF elPitiYa Plantations Plc Report on the Financial statements We have audited the accompanying Financial Statements of Elpitiya Plantations PLC which comprise the Balance Sheet as at March 31, 2010 and the Income Statement, Statement of Changes in Equity and Cash Flow Statement for the year then ended, and a summary of significant Accounting Policies and other explanatory notes. Managements statements Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with Sri Lanka Accounting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of Financial Statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. scope of audit and Basis of opinion Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with Sri Lanka Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the Financial Statements are free from material misstatements.
Partners :
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall Financial Statement presentation. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. We therefore believe that our audit provides a reasonable basis for our opinion. opinion for the Financial In our opinion, so far as appears from our examination, the Company maintained proper accounting records for the year ended March 31, 2010, and the Financial Statements give a true and fair view of the Companys state of affairs as at March 31, 2010 and its profit and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards. Report on other legal and Regulatory Requirements In our opinion, these Financial Statements also comply with the requirements of Section 151(2) of the Companies Act No. 07 of 2007.
Responsibility
Colombo 20 May 2010
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 FCMA W K B S P Fernando FCA ACMA A P A Gunasekera FCA FCMA A Herath FCA D K Hulangamuwa FCA FCMA LLB (Lond) H MA Jayesinghe FCA FCMA Ms. G G S Manatunga ACA Ms. L C G Nanayakkara FCA FCMA B E Wijesurya ACA ACMA
21
Balance sHeet
As at 31st March 2010
note assets non current assets Leasehold Property Immovable estate assets on finance lease (other than leasehold property) Tangible assets other than immature/mature plantations Immature/mature plantations Long Term Investment - (Unquoted) current assets Inventories Trade and other receivables Amounts due from related companies ESC Recoverable Cash and Bank balances total assets eQuitY anD liaBilities capital and Reserves Stated Capital Accumulated Profits Total Equity non current liabilities & Deferred income Interest Bearing Loans & Borrowings Retirement Benefit Obligations Deferred Income Net liability to the Lessor payable after one year current liabilities Interest Bearing Loans & Borrowings (Including Overdraft) Net liability to the Lessor payable within one year Trade and other payables Amounts due to related companies Total Equity and Liabilities 3 4 5 6 7
2010 Rs.
2009 Rs.
185,452,948 218,180,073 458,614,117 1,971,092,682 77,276,420 2,910,616,240 190,036,643 140,072,753 54,932,532 18,040,934 371,019,291 774,102,153 3,684,718,393
190,719,372 233,727,627 411,592,471 1,816,991,871 46,811,767 2,699,843,108 100,089,943 82,265,407 55,805,025 12,505,326 20,607,486 271,273,187 2,971,116,295
8 9 10
11
694,236,120 323,760,772 1,017,996,892
350,000,010 259,943,978 609,943,988
12 13 14 15
953,671,551 448,410,122 186,516,926 190,104,072 1,778,702,671 312,805,411 2,587,592 246,761,117 325,864,710 888,018,830 3,684,718,393
490,788,596 326,727,983 149,175,914 192,691,664 1,159,384,157 457,173,021 2,488,069 323,789,479 418,337,581 1,201,788,150 2,971,116,295
12 15 16 17
These Financial Statements are in compliance with the requirements of the Companies Act No. 07 of 2007.
Chief Financial Officer The board of directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the board by. DIRECTOR 1 2 MANAGING AGENT 1 2
The accounting policies and notes on pages 26 through 50 form an integral part of the Financial Statements. Colombo, 20 May 2010 22
incoMe stateMent
Year Ended 31st March 2010
note
2010 Rs.
2009 Rs. 1,556,182,199 (1,466,653,724) 89,528,475 53,794,876 (91,039,695) (13,380,935) (114,547,946) 13,940,610 (61,704,615) (61,704,615) (2.47)
REVENUE COST OF SALES GROSS PROFIT OTHER INCOME AND GAINS ADMINISTRATION EXPENSES MANAGEMENT FEE & WORKERS PROFIT SHARE FINANCE COST SHARE OF PROFIT/ (LOSS) OF JOINT VENTURES PROFIT/(LOSS) BEFORE TAXATION INCOME TAX (EXPENSE) / INCOME NET PROFIT/(LOSS)FOR THE YEAR BASIC EARNINGS / (LOSS) PER SHARE
18
2,215,126,092 (1,973,914,603) 241,211,489
19
81,097,740 (143,037,064) (10,202,236)
20
(144,075,445) 38,822,310
21 22
63,816,794 63,816,794
23
2.46
The accounting policies and notes on pages 26 through 50 form an integral part of the Financial Statements.
23
stateMent oF cHanges in eQuitY

Year Ended 31st March 2010 stated capital Rs accumulated Profit/ ( Loss ) Rs Rs total
Balance as at 31 March 2008 Net Profit/(Loss) for the year Balance as at 31 March 2009 Rights Shares Issued (11,474,537 @ 30/- per share) Net Profit/(Loss) for the year Balance as at 31 March 2010
350,000,010 350,000,010 344,236,110
321,648,593 (61,704,615) 259,943,978 -
671,648,603 (61,704,615) 609,943,988 344,236,110
694,236,120
63,816,794 323,760,772
63,816,794 1,017,996,892
24
casH Flow stateMent

note casH Flows FRoM oPeRating activities Net Profit/(Loss) before Taxation aDJustMents FoR Depreciation/Amortization Provision for Defined Benefit Plans Amortization of Grants Share of Profit/ (Loss) of Joint Ventures Finance Cost Deferred Income from Sublease Profit/(Loss) on disposal of Scraps Items Provision for Doubtful Debtors Operating Profit before Working Capital Changes (Increase)/Decrease in Trade and other Receivables (Increase)/Decrease in Amounts due from Related Companies (Increase)/Decrease in Inventories Increase/(Decrease) in Trade and Other Payables Increase/(Decrease) in Amounts due to Related Companies cash generated from operations Cash Received as Sublease of Land Finance Cost Paid Defined Benefit Plan Cost Paid Grants Received Economics Service Charges Paid net cash from operating activities casH Flows FRoM investing activities Profit/(Loss) on disposal of Scraps Field Development Expenditure Purchase of Property, Plant & Equipment Dividend Received Right Issue on Ordinary Shares net cash used in investing activities casH Flows FRoM Financing activities Payment of Government Lease Rentals Proceeds from Loans Settlement of Loan Other Lease Rental Paid net cash (used in) / from Financing activities net increase/(Decrease) in cash & cash equivalents a. cash & cash equivalents at the beginning of the year B. cash & cash equivalents at the end of the year note a Cash & Cash Equivalents at the beginning of the year Cash & Bank Balances Bank Overdrafts (Note 12) note B Cash & Cash Equivalents at the end of the year Cash & Bank Balances Bank Overdrafts (Note 12) 21 13 14.1 20 14.2 19
2010 Rs. 63,816,794 88,215,186 172,695,485 (7,539,513) (38,822,310) 144,075,445 (11,005,541) 7,576,810 419,012,356 (56,460,037) (4,933,110) (89,946,700) (77,770,634) (92,472,871) 97,429,004 13,330,819 (119,830,419) (51,013,346) 42,046,975 (3,817,432) (21,854,399) (185,232,716) (83,290,950) 8,357,661 344,236,110 84,070,105 (27,383,428) 860,150,198 (399,877,135) (10,442,841) 422,446,794 484,662,500 (152,036,150) 332,626,350
2009 Rs. (61,704,615) 77,794,266 48,879,446 (5,539,082) (13,940,610) 110,163,939 (11,005,943) (1,582,609) 143,064,792 (2,615,593) 5,958,631 143,552,471 36,451,911 36,806,886 363,219,098 8,829,397 (103,078,630) (27,599,993) 18,585,305 (3,490,555) 256,464,622 1,582,609 (139,739,261) (138,095,380) (276,252,032) (17,787,618) 202,991,793 (176,852,190) (7,085,308) 1,266,677 (18,520,733) (133,515,417) (152,036,150)
13 14.1
19 6
20,607,486 (172,643,636) (152,036,150) 371,019,291 (38,392,941) 332,626,350
18,532,615 (152,048,032) (133,515,417) 20,607,486 (172,643,636) (152,036,150)
25
notes to tHe Financial stateMents

1.
coRPoRate inFoRMation Domicile and legal Form Elpitiya plantations PLC is a limited liability Company incorporated and domiciled in Sri Lanka, under the Companies Act No. 17 of 1982 (The Company re-registered under the Companies Act No. 07 of 2007) in terms of the provisions of the conversion of public Corporations or Government Owned Business undertakings into public Companies Act No. 23 of 1987. The registered office of the Company is located at No. 305, Vauxhall Street, Colombo 02, and Plantations are situated in the planting districts of Nuwera Eliya and Galle.
1.2
Principal activities and nature of operations During the year, the principal activities of the Company were cultivation, manufacture and sale of black Tea, Rubber, Oil Palm and other crops.
1.3
Parent enterprise The Companys parent undertaking is Aitken Spence Plantation Managements Limited.
1.4
Date of authorisation for issue The Financial Statements of Elpitiya Plantations PLC for the year ended 31 March 2010 were authorised for issue in accordance with a resolution of the Board of Directors on 20 May 2010.
2.1
Basis oF PRePaRation These financial statements presented in Sri Lanka Rupees have been prepared on a historical cost basis except for certain Property, Plant and Equipment which are stated at revalued amounts. The Financial Statements are prepared in Sri Lankan rupees and all values are rounded to the nearest rupee.
2.1.1 statement of compliance The Financial Statements of Elpitiya Plantations PLC have been prepared in accordance with the Sri Lanka Accounting Standards (SLAS) adopted by the Institute of Chartered Accountants of Sri Lanka (ICASL) and also in compliance with the requirements of the Companies Act No 07 of 2007. 2.1.2 going concern The Directors have made an assessment of the Companys ability to continue as a going concern and they do not intend either to liquidate or to cease trading. 2.1.3 comparative information The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year unless otherwise stated. 2.2 signiFicant accounting JuDgMents, estiMates anD assuMPtions Judgments In the purpose of applying the companys accounting policies , management has made the following judgments , apart from those involving estimations , which has the most significant effect on the amounts recognized in the financial statements.
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inventory valuation Produce stock Company has valued part of unsold produce stock at since realized prices. The balance unsold stock remained as at the balance sheet date valued at an estimated selling prices based on most recent selling prices available subsequent to the year end. estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date , that have a significant risk of causing a material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below. impairment of goodwill The company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash generating units to which the goodwill is allocated .Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount rate in order to calculate present value of those cash flows. However, at present company does not have any recorded Goodwill balance as at the balance sheet date. Deferred tax assets Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The carrying value of the unrecognised deferred tax assets at 31 March 2010 was Rs.471,116,273/-(2009. Rs. 474,951,083/-). Defined Benefit Plans The cost of defined benefit pension plan is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. The net employee liability at 31 March 2010 is Rs. 448,410,122/- (2009 Rs. 326,727,983/-). Further details are given in Note 13. 2.3 suMMaRY oF signiFicant accounting Policies
2.3.1 Foreign currency translation The financial statements are presented in Sri Lankan rupees, which is the Companys functional and presentation currency. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss. Tax charges and credits attributable to exchange differences on those borrowings are also dealt with in equity. Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.
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2.3.2 taxation a) current taxes Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the Commissioner General of Inland Revenue. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. The provision for income tax is based on the elements of income and expenditure as reported in the financial statements and computed in accordance with the provisions of the Inland Revenue Act. Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement b) Deferred taxation Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences:
l
except where the deferred income tax liability arises from goodwill amortisation or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised: except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.
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2.3.3 Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset that takes a substantial period of time to get ready for its intended use or sale is capitalised as part of that asset. The amount of borrowing costs eligible for capitalisation is determined in accordance with SLAS 20-Borrowing Costs Allowed Alternative Treatment. The capitalisation rate of 22% (2009 13%) percent was used. Borrowing costs amounting to Rs. 97,507,174/= (previous year Rs. 83,767,823/=) incurred on borrowings obtained to meet expenses relating to immature plantations have been capitalised as part of the cost of the immature plantations. 2.3.4 intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. Following the initial recognition of the intangible assets, the cost model is applied requiring the assets to be carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs are not capitalised and expenditure is reflected in the income statement in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. Amortisation was commenced when the assets were available for use. As at the balance sheet date, company does not have any intangible assets with finite lives. Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis. Intangible assets that are not yet available for sale are tested for impairments at each financial year end, even if there is no indication that the asset is impaired. As at the balance sheet date, company does not have any intangible assets with indefinite lives. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised. Research and Development costs Research costs are expensed as incurred. An intangible assets arising from development expenditure on an individual project is recognised only when the company can demonstrate the technical feasibility of completing the intangible assets so that it will be available for use or sale , its intention to complete and its ability to use or sell the assets , how the assets will generate future economic benefits , the availability of recourses to complete the assets and the ability to measure reliably the expenditure during the development.
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During the period of development, the assets is tested for impairment annually, Following the initial recognition of the development expenditure, the cost model is applied requiring the assets to be carried at cost less any accumulated amortisation and accumulated impairment losses . Amortisation of the assets begins when development is complete and the asset is available for use. It is amortised over the period of expected future sales. During the period of which the asset is not yet in uses it is tested for impairments annually. 2.3.5 Deferred expenditure Expenditure which is deemed to have a benefit or relationship to more than one financial year is classified as deferred expenditure. Such expenditure is written off over the period to which it relates, on a straight-line basis. 2.3.6 inventories Inventories other than produce stocks are valued at the lower of cost and estimated net realisable value, after making due allowances for obsolete and slow moving items. Net realisable value is the price at which Inventories can be sold in the ordinary course of business after allowing for cost of realisation and / or cost of conversion from their existing state to saleable condition. The cost incurred in bringing inventories to its present location and condition are accounted using the following cost formula. input Material growing crop-nurseries Produce stocks consumables & spares 2.3.7 trade and other Receivables Trade receivables are stated at the amounts they are estimated to realise net of provisions for bad and doubtful receivables. Other receivables and dues from related parties are recognised at cost less provision for bad and doubtful receivables. 2.3.8 cash and cash equivalents Cash and Cash Equivalents are defined as cash in hand, demand deposits and short term highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purpose of Cash Flow Statement Cash and Cash Equivalents consist of cash in hand and deposits in banks net of outstanding bank overdrafts. Investments with short term maturities i.e. three months or less from the date of acquisitions are also treated as Cash Equivalents. Interest paid is classified as operating Cash Flows. The Cash Flow Statement is reported based on indirect method. At average cost. At the cost of direct materials, direct labour and an appropriate proportion of directly attributable overheads. Valued at estimated selling prices or since realised prices. At actual cost.
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2.3.9 Property, Plant and equipment a) cost Property, Plant & Equipment is recorded at cost less accumulated depreciation and less any impairment in value. b) cost and valuation All items of Property, Plant & Equipment are initially recorded at cost. Where items of Property, Plant and Equipment are subsequently revalued, the entire class of such assets is revalued. Revaluations are made with sufficient regularity to ensure that their carrying amounts do not differ materially from their fair 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 amounts less any subsequent depreciation thereon. All other Property, Plant and Equipment are stated at historical 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 recognised as an expense. In these circumstances the increase is recognised as income to the extent of the previous written down. When an assets carrying amount is decreased as a result of a revaluation, the decrease is recognised as an expense unless it reverses a previous increment relating to that asset, in which case it is charged against any related revaluation surplus, to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same asset. Any balance remaining in the revaluation surplus in respect of an asset, is transferred directly to accumulated profits or loss on retirement or disposal of the asset. c) Restoration costs Expenditure incurred on repairs or maintenance of property, plant and equipment in order to restore or maintain the future economic benefits expected from originally assessed standard of performance, is recognized as an expense when incurred. d) Depreciation The provision for depreciation is calculated on the cost or valuation of all property, plant and equipment other than freehold land, in order to write off such amounts over the estimated useful lives by equal instalments as follows: Buildings Plant & machinery Furniture & fittings Vehicles Equipment Water Sanitation Mature Plantations - Tea - Rubber - Oil Palm - Coconut - Cinnamon 3% 5% 5% 2% 5% 2.5 % 7.5 % 10 % 20 % 12.5 % 5%
The leasehold rights are being amortised in equal amounts over the following periods.
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Bare Land Mature Plantations Buildings Machinery Improvements to Land Other Vested Assets Unimproved Land
Over 53 years Over 30 years Over 25 years Over 15 years Over 53 years Over 53 years Over 53 years
The assets residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end. e) Derecognition An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised. 2.3.10 immature and Mature Plantations The cost of Replanting and New Planting are classified as immature plantations up-to the time of harvesting the crop. Further, the general charges incurred on the plantation are apportioned based on the labour days spent on respective Replanting and New Planting, and capitalised on the immature areas. The remaining portion of the general charges is expensed in the accounting period in which it is incurred. The cost of areas coming into bearing are transferred to mature plantations and depreciated over their useful life period. 2.3.11 Infilling Cost Where infilling results in an increase in the economic life of the relevant field beyond its previously assessed standard of performance, the costs are capitalised in accordance with Sri Lanka Accounting Standard No. 32 and depreciated over the useful life at rates applicable to mature plantation. Infilling costs that are not capitalised have been charged to the Income Statement in the year in which they are incurred. 2.3.12 leases a) Finance leases - where the company is the lessee Property, plant and equipment on finance leases, (which effectively transfer to the company substantially all of the risks and benefits incidental to ownership of the leased item) are capitalised at their cash price, and depreciated/amortised over the period the company is expected to benefit from the use of the leased assets. The corresponding principal amount payable to the lessor is shown as a liability. The finance charges allocated to future periods are separately disclosed under Notes 12.5 & 15. The interest element of the rental obligation applicable to each financial year is charged to the Income Statement over the period of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
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The cost of improvements to or on leased property is capitalised, and depreciated over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is shorter. b) Assets leased to third parties under agreements that transfer substantially all the risks and rewards associated with ownership other than legal title, are classified as finance leases. Lease rentals receivable from the lessee shown in the balance sheet. operating leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term are classified as operating leases. Lease payments (excluding costs for services such as insurance and maintenance) paid under operating leases are recognised as an expense in the income statement on a straight-line basis over the lease term d) leasehold Property Leasehold property comprising of land use rights obtained on a long term basis, is stated at the recorded carrying values as at the effective date of Sri Lanka Accounting Standard 19 Leases in line with Ruling of the Urgent Issues Task Force of The Institute of Chartered Accountants of Sri Lanka. Such carrying amounts are amortised over the remaining lease term or useful life of the leased property whichever is shorter. 2.3.13 investment in Joint venture The company have interest in joint ventures which are jointly controlled entities. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, and a jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venturer has an interest. The company recognises its interest in the joint venture using the equity method. Under the equity method, the investment in the joint venture is carried in the balance sheet at cost plus post acquisition changes in the companys share of net assets of the associate. Goodwill relating to a joint venture is included in the carrying amount of the investment and is not amortised. The income statement reflects the share of the results of operations of the joint venture. Where there has been a change recognised directly in the equity of the joint venture, the company recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Profits and losses resulting from transactions between the company and the joint venture are eliminated to the extent of the interest in the joint venture. The reporting dates of the joint venture and the company are identical and the joint ventures accounting policies conform to those used by the company for like transactions and events in similar circumstances 2.3.14 Provisions Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. 2.3.15 Retirement Benefit Obligation a) Defined Benefit Plans Gratuity The Company measures the present value of the promised retirement benefits of gratuity which is a defined benefit plan with the advice of an actuary every two years using projected benefits valuation method. Actuarial gains and losses are recognised as income or expenses over the expected average remaining working lives of the participants of the plan. The key assumptions used by the actuary include the following:
c)
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i) ii)
Rate of Discount Rate of Salary Increase - Workers - Staff - Workers - Staff
11.5% (per annum) 9% (per annum) 10% (per annum) 55 years 55 years
iii) Retirement Age
iv) The company will continue as a going concern. The actuarial present value of the accrued benefits as at 31st March 2010 is Rs. 448,410,122/- This item is grouped under retirement benefit obligations in the balance sheet. The liability is not externally funded. b) Defined Contribution Plans Employees Provident Fund & Employees Trust Fund Employees are eligible for Employees Provident Fund Contributions and Employees Trust Fund Contributions in line with the respective statutes and regulations. The Company contributes 12% and 3% of gross emoluments of employees to the Employees Provident Fund and to the Employees Trust Fund respectively. 2.3.16 grants and subsidies Grants and subsidies are recognised at their fair value where there is reasonable assurance that the grant/subsidy will be received and all attaching conditions, if any, will be complied with. When the grant or subsidy relates to an income item it is recognised as income over the periods necessary to match them to the costs to which it is intended to compensate on a systematic basis. Grants and subsidies related to assets, including non-monetary grants at fair value are deferred in the balance sheet and credited to the income statement over the useful life of the asset. 2.3.17 impairment of non Financial assets The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the company makes an estimate of the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices or other available fair value indicators. Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In this case the impairment is also recognised in equity up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. If that is the case the
34

carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment losses recognised in relation to goodwill are not reversed for subsequent increases in its recoverable amount. The following criteria are also applied in assessing impairment of specific assets: goodwill Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount of the cash-generating unit (group of cash-generating units) to which goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to Goodwill cannot be reversed in future periods. The company performs its annual impairment test of goodwill as at 31 December. However, at present company does not have any recorded Goodwill as at the balance sheet date. intangible assets Intangible assets with indefinite useful lives are tested for impairment annually as of 31 March either individually or at the cash generating unit level, as appropriate. However, at present company does not have any recorded intangible assets as at the balance sheet date. 2.3.18 income statement Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the purpose of recognition of revenue (a) sale of goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods. (b) interest Interest Income is recognised as the interest accrued (taking into account the effective yield on the asset) unless collectibility is in doubt. (c) Dividends Dividend income is recognised on a cash basis. (d) Rental income Rental income is recognised on an accrual basis.
35

(e) others Other income is recognised on an accrual basis Net Gains and losses of a revenue nature on the disposal of property, plant & equipment and other non current assets including investments have been accounted for in the income statement, having deducted from proceeds on disposal, the carrying amount of the assets and related selling expenses. On disposal of revalued property, plant and equipment, amount remaining in Revaluation Reserve relating to that asset is transferred directly to Accumulated Profit / (Loss). Gains and losses arising from incidental activities to main revenue generating activities and those arising from a group of similar transactions which are not material, are aggregated, reported and presented on a net basis. expenditure Recognition a) Expenses are recognised in the income statement on the basis of a direct association between the cost incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant & equipment in a state of efficiency has been charged to income in arriving at the Profit/ (Loss) for the year. For the purpose of presentation of the Income Statement the directors are of the opinion that function of expenses method presents fairly the elements of the Companys performance, and hence such presentation method is adopted.
b)
3. leaseHolD PRoPeRtY Although leases of all JEDB/SLSPC estates handed over to the company have not been executed todate, leases have been executed for Fernlands,Harrow, New Peacock, Nayapana, North Meddakumbura, Sheen, Talgaswella, Igallkanda, Gallinda, Elpitiya, Katandola, Lelwela, Diviturai, Gulugahakanda and Habarakada Estates. Leases remains to be executed for Nagoda and Mapalagama estates. All of these leases will be retroactive on 22 June, 1992, the date of formation of the Company. The leasehold right to the land on all of these estates have been taken into the books of the Company on June 22, 1992 immediately after formation of the Company, in terms of the ruling obtained from the Urgent Issue Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanka. For this purpose the Board decided at its meeting on 8 March 1995 that this bare land would be revalued at the value established for this land by valuation specialist, D.R. Wickramasinghe just prior to the formation of the company. The value taken into the 22 June 1992, Balance Sheet and the amortisation of the leasehold rights to 31 March 2010 are as follows. The above mentioned leasehold right to bare land comprising of land use rights obtained on a long term basis is re-classified as leasehold property and stated at the recorded carrying values as at the effective date of Sri Lanka Accounting Standard 19 Leases, in line with revised Ruling of the Urgent Issues Task Force of the Institute of Chartered Accountants of Sri Lanka. Such carrying amounts are amortized over the remaining lease term or useful life of the leased property whichever is shorter. The leasehold right to land is disclosed under non current assets under leasehold property. The revised UITF ruling does not permit further revaluation of Leasehold Property. The values taken into the 22 June 1992 balance sheet and amortization of the leasehold property up to 31 March 2010 are as follows. accumulated accumulated Balance amortization amortisation amortization written Down written Down as at as at for the as at value as at value as at 01.04.2009 01.04.2009 year 31.03.2010 31.03.2010 31.03.2009 Rs. Rs. Rs. Rs. Rs. Rs. 279,120,479 279,120,479 88,401,107 88,401,107 5,266,424 5,266,424 93,667,531 93,667,531 185,452,948 185,452,948 190,719,372 190,719,372
Revaluation as at 22.06.92 Rs. Leasehold property 280,058,758 280,058,758
Disposals Rs. (938,279) (938,279)
The leasehold rights to bare land are being amortised by equal amounts over 53 year period.
36

4.
iMMovaBle estate assets on Finance lease (otHeR tHan leaseHolD PRoPeRtY) As morefully explained in Note 3 all JEDB/SLSPC estates leases have been executed as at the Balance Sheet date, in terms of the ruling of the UITF of Institute of Chartered Accountants of Sri Lanka all immovable assets in these estates under finance leases have been taken into the books of the Company retroactive to 22 June 1992. For this purpose the Board decided at its meeting on March 8, 1995 that these assets would be taken at their book values as they appear in the books of the JEDB/SLSPC,on the day immediately preceding the date of formation of the Company. These assets are taken into the 22 June 1992 Balance Sheet and amortised as follows: immature improvement other vested unimproved Plantations Rs. Revaluation as at 22.06.1992 Transferred to mature 283,368,199 (283,368,199) Acquired by Government 2002/2003 Balance as at 31.03.2010 Accumulated amortisation as at 01.04.2009 Amortisation during the year Accumulated amortisation as at 31.03.2010 written down value as at 31.03.2010 written down value as at 31.03.2009 4,214,618 4,214,618 1,719,498 79,521 1,799,019 2,415,599 2,495,120 4,028,217 4,028,217 1,277,640 76,004 1,353,644 2,674,573 2,750,577 1,564,267 1,564,267 361,556 29,514 391,070 1,173,197 1,202,711 to land Rs. 4,214,618 assets Rs. 4,028,217 lands Rs 1,564,267 Mature Plantations Rs. 95,362,391 283,368,199 378,730,590 (1,389,400) 377,341,190 172,664,573 12,578,040 185,242,613 192,098,577 204,676,617 73,002,143 (3,390,250) 69,611,893 47,009,290 2,784,476 49,793,766 19,818,127 22,602,603 47,785,047 47,785,047 47,785,047 47,785,047 Buildings Rs. 73,002,143 Plant & Machinery Rs. 47,785,047 total Rs. 509,324,882 509,324,882 (4,779,650) 504,545,232 270,817,604 15,547,555 286,365,159 218,180,073 233,727,628
These assets are being amortised in equal annual amounts over the following periods:
Mature plantations Buildings Machinery Other vested assets/ Unimproved land
30 years 25 years 15 years 53 Years
Investment in plantation assets which were immature at the time of handing over to the company by way of estate leases are shown under immature plantation (revalued as at 22nd June 1992). Further, investment in such immature plantation to bring them to maturity are shown under Note No 6. When these plantations become mature the additional investment to bring them to maturity will be moved from the category immature plantations to mature plantations under Note 6 and a corresponding move from immature plantations to mature plantations will be made in the above note.
37

5. tangiBle assets otHeR tHan iMMatuRe/MatuRe Plantations cost Buildings Motor Vehicles Plant & Machinery Furniture & Fittings Equipment Water Sanitation assets on sheen Mini Hydro Project Plant & Machinery Equipment Motor Vehicles Civil Construction & Others assets acquired on Finance lease Motor Vehicles Plant & Machinery
Balance as at 31.03.2009 Rs. 17,864,592 60,425,016 117,007,660 10,099,250 42,742,194 134,564,547 382,703,259 56,414,421 4,098,854 99,889 60,613,164 19,359,784 70,201,074 89,560,858 532,877,281 Balance as at 31.03.2009 Rs. 3,471,562 59,078,664 74,132,228 5,442,211 24,466,646 37,828,126 204,419,437 1,762,951 209,592 1,972,543 5,283,035 16,680,227 21,963,262 228,355,242 304,522,039 Balance as at 31.03.2009 Rs.
additions for the year Rs. 2,109,830 961,500 3,278,628 130,763 4,515,300 68,387,021 79,383,042 1,038,726 81,380,332 82,419,058 3,079,520 3,079,520 164,881,620 charge for the Year Rs. 507,925 1,024,008 7,279,665 543,415 3,088,249 7,539,513 19,982,775 4,278,268 512,357 19,978 2,034,508 6,845,111 3,871,957 5,569,461 9,441,418 36,269,304 additions for the Year Rs. 5,445,908
Disposals during the Year Rs. accumulated depreciation on disposals Rs. capitalised during the Year Rs. 87,036,578
Balance as at 31.03.2010 Rs. 19,974,422 61,386,516 120,286,288 10,230,013 47,257,494 202,951,568 462,086,301 57,453,147 4,098,854 99,889 81,380,332 143,032,222 19,359,784 73,280,594 92,640,378 697,758,901 Balance as at 31.03.2010 Rs. 3,979,487 60,102,672 81,411,893 5,985,626 27,554,895 45,367,639 224,402,212 6,041,219 721,949 19,978 2,034,508 8,817,654 9,154,992 22,249,688 31,404,680 264,624,546 433,134,355 Balance as at 31.03.2010 Rs. 25,479,762 458,614,117
Depreciation Buildings Motor Vehicles Plant & Machinery Furniture & Fittings Equipment Water Sanitation assets on sheen Mini Hydro Project Plant & Machinery Equipment Motor Vehicles Civil Construction & Others assets acquired on Finance lease Motor Vehicles Plant & Machinery written Down value
capital work-in-Progress total wRitten Down value
107,070,432 411,592,471
The assets shown above are those movable assets vested in the Company by gazette notification at the date of formation of the company (22 June 1992) and all investments in tangible assets by the company since its formation. The assets taken over by way of estate leases are set out in Notes 3 & 4. Further, the valuation of immovable JEDB / SLSPC estate assets on finance lease (other than leasehold property) and tangible assets other than immature / mature plantations taken over as at 22 June 1992 is based on net book values obtained from the state plantations corporation and Janatha Estate Development Board as at such date. These values were not made available to us by individual asset. 38

6.
iMMatuRe/MatuRe Plantations
immature Plantations Rs.
Mature Plantations Rs. 775,717,005 248,980,923 1,024,697,928 total Rs. 1,955,318,849 185,232,716 2,140,551,565
cost At the beginning of the year Additions Transfers At the end of the year Depreciation At the beginning of the year Charge for the year At the end of the year written Down value - as at 31.03.2010 written Down value - as at 31.03.2009 1,115,853,637 1,179,601,844 138,326,978 31,131,905 169,458,883 855,239,045 637,390,027 138,326,978 31,131,905 169,458,883 1,971,092,682 1,816,991,871 1,179,601,844 185,232,716 (248,980,923) 1,115,853,637
These are investments in immature/ mature plantations since the formation of the Company. The assets (including plantation assets) taken over by way of estate leases are set out in Notes 3 and 4. Further investment in immature plantations taken over by way of these leases are shown in the above note. When such plantations become mature, the additional investments since take over to bring them to maturity, will be moved from immature to mature under this note. Borrowing costs amounting to Rs. 97,507,174/= (2009 - Rs. 83,767,823/=) incurred on borrowings obtained to meet expenses relating to immature plantations have been capitalised as part of the cost of the immature plantations. 7. long teRM investMents 2010 Rs. AEN Palm Oil Processing (Pvt) Ltd. (7.1) Meddecombra Power Company (Pvt) Ltd. Tea Country Home (Pvt) Ltd. Water Villas (Pvt) Ltd. New Peacock Cottage (Pvt)Ltd. 7.1 aen PalM oil PRocessing (Pvt) ltD Balance B/F Gross Interim Dividend-2009/10 Share of Profit/ (Loss) of Joint venture Total Carrying Value of Investment 46,811,727 (8,357,637) 38,822,310 77,276,400 32,871,117 13,940,610 46,811,727 77,276,400 10 10 77,276,420 2009 Rs. 46,811,727 10 10 10 10 46,811,767
The above investment represents the amount invested in AEN Palm Oil Processing (Pvt) Ltd. which is a joint venture company established with Namunukula Plantations PLC and Agalawatta Plantations PLC. 7.2 Companys investment in Elpitiya Lifestyle Solutions (Pvt) Ltd recorded at Zero value due to losses of that Company.
39

8.
inventoRies
2010 Rs. 16,514,478 158,345,882 15,176,283 190,036,643 73,214,543 22,126,476 21,544,294 21,278,251 3,504,949 141,668,513 (1,595,760) 140,072,753 2010 Rs. 70,910 3,949,905 29,043,062 17,762,909 213,562 168,006 3,750,040 637,597 5,142,144 60,738,135 (5,805,603) 54,932,532
2009 Rs. 7,737,058 70,022,378 22,330,507 100,089,943 23,715,417 5,031,981 17,314,373 32,751,664 3,547,732 82,361,167 (95,760) 82,265,407 2009 Rs. 70,911 12,501,981 23,009,978 10,658,895 201,563 140,237 3,719,396 609,828 4,892,236 55,805,025 55,805,025
Growing Crop - Nurseries Produce Stock Consumables & Spares 9. tRaDe anD otHeR ReceivaBles Produce debtors Advances & Prepayments Employee Related Debtors Other debtors VAT Recoverable Provision for doubtful debtors
10.
aMount Due FRoM RelateD coMPanies
Elpitiya Tea Farmers (Pvt) Ltd. AEN Palm Oil Processing (Pvt ) Ltd. Elpitiya Lifestyle Solutions (Pvt) Ltd. - Current Account Elpitiya Lifestyle Solutions (Pvt) Ltd. - Loan Dunsinane Power Company (Pvt) Ltd. New Peacock (Pvt)Ltd. Water Villas (Pvt) Ltd. Meddecombra Power Co. (Pvt) Ltd. Tea Country Homes (Private) Ltd.
Less:Provision for Dobutful Receivables 11. stateD caPital issued and Fully Paid number of shares Ordinary Shares Including one golden share held by the Treasury which has Special rights value of issued and Fully Paid shares B/F Ordinary Shares Including one golden share held by the Treasury which has Special rights Right Shares Issued during the year
36,433,215
24,958,678
350,000,010 344,236,110 694,236,120
350,000,010 350,000,010
Stated Capital represents the amount paid to the company in respect of issuing 36,433,215 ordinary shares including one Golden share which has special rights. During the year, the Board of Directors of the Company, offered one (01) Ordinary Share of Rs. 30/- each for two (02) Ordinary Shares held in the capital of the Company by way of a Right Issue to the holders of the issued shares of the Company. As a result, Company has raised Rs. 344,236,110/- by issuing 11,474,537 additional ordinary shares during the year under review.
40

12. inteRest BeaRing loans anD BoRRowings 2010 Repayable 1 year Rs. 12.1. Long Term Loans (ADB Loans through DFCC) 12.2. Term Loans 12.3. Short Term Loans 12.4 Tea Securitising Loan 12.5. Finance leases 12.6 Guaranteed Redeemable Debentures Bank Overdraft 39,566,736 76,675,097 104,035,576 43,800,000 10,335,061 38,392,941 312,805,411 108,249,253 138,732,182 461,400,000 10,727,912 75,000,000 794,109,347 1,163,390 48,983,722 108,900,000 515,092 159,562,204 148,979,379 264,391,001 104,035,576 614,100,000 21,578,065 75,000,000 38,392,941 1,266,476,962 40,138,164 25,565,665 147,798,000 60,566,800 10,460,756 172,643,636 457,173,021 136,674,725 41,160,302 87,200,000 18,624,332 283,659,359 490,788,596 2010 Repayable after 05 years Rs. 1,163,390 1,163,390 30,598,000 18,373,922 11,800 48,983,722 total as at 31.03.2010 Rs. 54,610,674 47,760,141 2,877,825 1,714,284 2,708,329 1,227,096 38,081,030 148,979,379 7,750,000 6,930,000 6,333,326 90,700,000 52,212,121 61,965,554 10,000,000 28,500,000 264,391,001 total as at 31.03.2009 Rs. 73,100,124 59,490,685 3,966,759 4,380,948 5,624,991 2,548,584 49,995,168 199,107,259 4,033,414 25,583 18,000,000 15,270,000 2,500,000 8,333,330 117,038,507 11,360,000 176,560,834 41 (XI) (XII) (XIII) (XIV) (IX) (X) (VII) (VIII)
36monthly installement of Rs 750,000 33monthly installement of Rs 695,000 and final installement of Rs 675,000 60monthly installement of Rs 166,000 83 equal Monthly installments commencing from September 2011 24 monthly installements 83 equal Monthly installments commencing from September 2011 59 monthly installment of Rs 166,670/and final instalment of Rs 166,470 /60monthly installement of Rs 500,000/-
2010 Repayable after 05 years Rs. 2010 total Rs. Repayable 1 year Rs.
2009 Repayable than 05 years Rs. within after 1 year less
2009 Repayable after 05 years Rs. 2009 total Rs.
Repayable than 05 years Rs.
within after 1 year less
22,294,370 109,834,867 75,000,000 207,129,237
199,107,259 176,560,834 147,798,000 147,766,800 29,085,088 75,000,000 172,643,636 947,961,617
953,671,551 12.1 long term loans 2010 Repayable 1 year Rs. aDB loans (through DFcc) Loan - 1 Loan - 2 Loan - 3 Loan - 5 Loan - 6 Loan - 7 (DFCC Wardana) 12.2 term loans Sampath Bank(93065000225) Peoples Bank H.N.B (66061001) H.N.B (66061101) H.N.B (66060801) H.N.B-(E friends Loan) Seylan Bank Seylan Bank Bank of Ceylon NDB (0920500305) Sampath Bank-Marketing Sampath Bank (39365000406) 7,750,000 6,930,000 2,000,004 7,649,000 36,592,322 7,756,131 1,997,640 6,000,000 76,675,097
2010 Repayable than 05 years Rs. 38,762,574 37,705,389 1,944,453 208,333 94,392 29,534,112 108,249,253 4,333,322 52,453,000 15,619,799 35,835,501 7,990,560 22,500,000 138,732,182
Rate of interest
terms of Repayment
within after 1 year less
15,848,100 10,054,752 933,372 1,714,284 2,499,996 1,132,704 7,383,528 39,566,736
(I) (II) (III) (IV) (V) (VI)
120 equal monthly installments commencing from 30.09.2003 120 equal monthly installments commencing from 13.12.2004 96 equal monthly installments commencing from 13.04.2005 48 equal monthly installments commencing from 30.09.2002 84 equal monthly installments commencing from 13.04.2004 84 equal monthly installments commencing from 13.04.2004 78 equal monthly installments commencing from 20.12.2006

12.3 short term loans
2010 2010 Repayable Repayable within after 1 year less 1 year than 05 years Rs. Rs. -
2010 Repayable after 05 years Rs. -
total as at 31.03.2010 Rs. 100,000,000 4,035,576 104,035,576
total as at 31.03.2009 Rs. 100,000,000 17,498,000 13,300,000 12,000,000 5,000,000 147,798,000
Rate of interest
terms of Repayment
HNB Money Market Loan 100,000,000 Marketing Development Tempory Loan 4,035,576 HNB -Marketing Pan Asia Bank Sampath Bank 104,035,576 12.4 tea securitising loans Deutsche Bank National Development Bank National Development Bank National Development Bank National Development Bank National Development Bank State Bank of India-through NDB 12.5 Finance leases Gross Liability Less: Finance charges allocated to future periods Net liability
(XV) (XVI)
Payable within 03 months Payable within 03 months
25,900,000 4,500,000 8,600,000 3,000,000 1,800,000 43,800,000 13,843,639 (3,508,578) 10,335,061
23,200,000 45,500,000 106,400,000 112,500,000 173,800,000 461,400,000 13,381,831 (2,653,919) 10,727,912
34,500,000 74,400,000 108,900,000 648,411 (133,319) 515,092
49,100,000 50,000,000 115,000,000 150,000,000 250,000,000 614,100,000 27,873,881 (6,295,816) 21,578,065
16,666,800 56,100,000 72,766,800 38,316,722 (9,231,634) 29,085,088
(XVII) (XVIII) (XIX) (XX)
12.6 guaranteed Redeemable Debentures (Rs.75,000,000/-) The above balance represents 03 Guaranteed Redeemable Debenture, for the value of Rs. 25,000,000/- each at the par value of Rs. 25,000,000/each (principal sum) payable to plantations Trust Fund. The rate of interest will be 13.08% per annum is payable semi-annually on or before 30 June and 31 December until the said debenture shall have been redeemed on 04 December 2012. Debentures shall mandatorily be converted to ordinary shares if Company fails to adhere to the conditions stated in the debenture invested agreement. (I) (II) (III) (IV) (V) (VI) (VII) (IX) (X) (XI) (XII) 15.75% per annum. 4% reduction on timely payments. 17.6% per annum. 4% reduction on timely payments. 18.33% p.a 4% reduction on timely payments 18 % per annum. 4% reduction on timely payments. 18% per annum, 4%, reduction on timely payments. AWPR+ 2 per annum AWPLR + 3% (reviewed monthly) 6.5% {untill refinance funds are received at AWPLR+3% (reviewed monthly)} 16% per annum. AWPLR + 2.5% with a floor rate of 21.0% p.a 16.44% per annum. (XV) Short term money market rate.
(XVI) 18% per annum. (XVII) 18.43% per annum. (XVIII) AWPLR + 1.95% per annum. (XIX) AWPLR of 11.48% per annum. (XX) AWPLR + 2.25% per annum.
(VIII) AWPLR + 3% (reviewed monthly)
(XIII) AWPLR +2.0% with a floor rate of 16% p.a (XIV) AWPLR +2.0% with a floor rate of 19% p.a 42

13. RetiRing BeneFit oBligations At the beginning of the year Provisions for the year Payments for the year At the end of the year
2010 Rs. 326,727,983 172,695,485 (51,013,346) 448,410,122
2009 Rs. 305,448,530 48,879,446 (27,599,993) 326,727,983
The actuarial valuation had been carried out as at 31 March 2010 which amounts to Rs. 448,410,122/=. If the company had provided for gratuity on the basis of fourteen days wages and half a month salary for each completed year of service, the liability would have been Rs. 480,996,585/=. Hence there is a contingent liability of Rs.32,586,463/= which would crystallise only if the company ceases to be a going concern.The provision made in the current year, comprised with current service cost, interest cost and acturial losses amounting to Rs. 17,611,562/-, Rs. 36,297,614/- and Rs. 118,786,309/- respectively. 14. DeFeRReD incoMe 14.1 Deferred Grants and Subsidies 14.2 Sub Lease Income 14.1 DeFeRReD gRants anD suBsiDies At the beginning of the year Add : Grants received for the year - Monitory Less : Amortisation for the year At the end of the year 93,793,612 42,046,975 (7,539,513) 128,301,074 80,747,389 18,585,305 (5,539,082) 93,793,612 2010 Rs. 128,301,074 58,215,852 186,516,926 2009 Rs. 93,793,612 55,382,302 149,175,914
The Company has received funding from the Plantation Housing and Social Welfare Trust and Asian Development Bank for the development of workers facilities such as re-roofing of line rooms, latrines, water supply and sanitation etc. The amounts spent are included under the relevant classification of Property, Plant & Equipment and the grant component is reflected under Deferred Grants and Subsidies. Further this includes the C.T.C. Machinery Subsidy which represents the funds received from Sri Lanka Tea Board in relation to C.T.C. Project. 14.2 suB lease incoMe At the beginning of the year Add: Cash received for the year Less : Amortisation for the year At the end of the year 15. net liaBilitY to tHe lessoR oF slsPc / JeDB estates Repayable after 5 years Gross liability Less : finance charges Net liability Repayable after1 year less than 5 years Gross liability Less : finance charges Net liability Repayable after1 year Repayable within1 year Gross liability Less : finance charges Net liability total 2010 Rs. 55,382,302 13,839,091 (11,005,541) 58,215,852 2010 Rs. 312,492,594 (133,816,159) 178,676,435 41,240,000 (29,812,363) 11,427,637 190,104,072 10,310,000 (7,722,408) 2,587,592 192,691,664 2009 Rs. 57,558,848 8,829,397 (11,005,943) 55,382,302 2009 Rs. 322,802,594 (141,099,043) 181,703,551 41,240,000 (30,251,887) 10,988,113 192,691,664 10,310,000 (7,821,931) 2,488,069 195,179,733
43

The lease of the estates have been amended, with effect from 22nd June, 1996 to an amount substantially higher than the previous lease rental of Rs. 500/- per estate per annum. The first rental payable under the revised basis is Rs. 10.31 million from 22nd June 1996 to 21 June 1997. This amount is to be inflated annually by the Gross Domestic Product (GDP) deflator, and is in the form of a contingent rental. In accordance with the agreement signed by the company and Ministry of Plantations Industries, the Secretary to the Ministry of Plantations Industries has agreed to freeze the lease rental based on the applicable lease rental of the year 1999 (GDP of 4.4% ) which is determined on the extent of the Rubber cultivation of the company. The contingent rental charged in the income statement based on the above agreement which will be valid for the period from 22 June 2002 to 21 June 2008 amounted to Rs. 5,073,428 /=. The above relief was granted to the company on the basis of following conditions. Company Undertakes, 1. 2. 3. 4. 5. To cap the management fee for a period of 05 years from the year commencing 01st April 2003. To comply with all laws, by - laws, statutory provisions and other regulations of the Government of Sri Lanka. To diversify the crops to ensure the optimum usage of land. To invest the difference between the frozen lease rental and the actual amount payable for capital expenditure. To settle the outstanding payments according to an agreed time schedule with the Treasury.
If the company defaults the payment of lease rental or violates any of the terms and conditions of this agreement, then in such case the Secretary reserves the right to withdraw the loan and grant assistance which is provided to the company under the Plantation Development Project after holding an inquiry. In addition, the company is liable to pay an amount equal to the short fall in investment as additional lease rental, if the company unable to fulfill the above fourth condition. The above agreement has expired on 21 June 2008. and the Ministry of Plantations Industries is in the process of finalising a new agreement. Negotiations are underway to enhance the lease rental with effect from June - 2008. However, finality of the negotiation has not been reached yet. Hence, the management fee is computed and paid on the basis of item 01 above. 16. tRaDe anD otHeR PaYaBles 2010 Rs. 68,727,198 67,997,768 110,036,151 246,761,117 Relationship 2010 Rs. 63,939,223 200,000,000 27,189,134 8,000,000 26,736,353 325,864,710 2009 Rs. 120,985,135 55,571,099 147,233,245 323,789,479 2009 Rs. 61,579,211 200,000,000 44,166,662 53,843,382 38,000,000 20,748,326 418,337,581
Trade creditors Employee related creditors Others
17. aMounts Due to RelateD coMPanies
Aitken Spence Plantation Managements Ltd. - Current Account - Interest Free Loan Aitken Spence Plantation Managements Ltd. (Short Term Loan) Aitken Spence & Co. PLC (Other Expenditure) Aitken Spence & Co. PLC (Short Term Loan) Aitken Spence & Co. PLC (Interest Payable)
Parent Company Parent Company Parent Company Group Company Group Company * Group Company
This amount represent the Short Term Loan due to Aitken Spence & Co. PLC for which interest is computed on daily basis at a variable rate ( between 9% - 16.5% ) on the balance outstanding.
18. Revenue Sale of Produce Tea Rubber Coconut Oil Palm & Other Crops
2010 Rs. 1,766,738,751 254,683,950 737,093 192,966,298 2,215,126,092
2009 Rs. 1,202,811,450 193,663,728 772,276 158,934,745 1,556,182,199
44

18a segment information industry 2010 Rs. Revenue Revenue Expenditure Depreciation / Amortization Gratuity Segment Results Other Income Unallocated Expenses Management Fees Finance cost Share of Profit/ (Loss) of Joint Ventures Profit/ (Loss) for the year
tea 2009 Rs. 2010 Rs.
Rubber 2009 Rs. 2010 Rs. 737,093 1,013,389 (650,685) (1,273,820) (174,023)
coconut 2009 Rs. 772,276 286,454 (562,882) (354,097) 141,751
oil Palm & other crop 2010 2009 Rs. Rs. 192,966,298 (49,437,107) (15,507,754) (30,358,935) 97,662,502
total 2010 Rs. 2009 Rs.
1,766,738,751 1,202,811,450 254,683,950 193,663,728 (1,529,612,239) (1,156,038,148) (134,967,976) (146,232,059) (52,027,061) (46,273,441) (20,029,686) (18,583,502) (101,851,381) (28,439,289) (39,211,348) (11,690,493) 83,248,070 (27,939,428) 60,474,940 17,157,674
158,934,745 2,215,126,092 1,556,182,199 (37,024,898) (1,713,003,933) (1,339,008,651) (13,345,803) (88,215,186) (78,765,628) (8,395,566) (172,695,484) (48,879,445) 100,168,478 241,211,489 89,528,475 81,097,740 (143,037,064) (10,202,236) (144,075,445) 38,822,310 63,816,794 53,794,876 (91,039,695) (13,380,935) (114,547,946) 13,940,610 (61,704,615)
18b segment assets Non Current Assets Cost 2,058,758,510 1,916,490,908 792,366,805 787,808,833 613,042,418 Accumulated Depreciation / Amortization (467,113,031) (401,938,061) (179,831,941) (165,224,032) (139,232,812) 1,591,645,479 1,514,552,847 612,534,864 622,584,801 473,809,606 Current Assets 112,078,753 79,679,739 43,148,742 15,027,961 33,407,417 1,703,724,232 1,594,232,586 655,683,606 637,612,762 507,217,023 unallocated Non Current Assets Cost Accumulated Depreciation / Amortization Current Assets Total Non Current Assets Total Current Assets total assets 18c segment liabilities Non Current Liabilities
23,862,216 (5,004,528) 18,857,688 217,818 19,075,506
102,998,862 565,767,541 3,567,166,595 3,293,929,498 (5,842,023) (118,656,190) (792,019,807) (690,822,811) 97,156,839 447,111,351 2,775,146,788 2,603,106,687 1,401,731 5,164,425 190,036,643 100,089,943 98,558,570 452,275,776 2,965,183,431 - 2,703,196,630
157,565,761 134,564,547 (22,096,309) (37,828,126) 135,469,452 96,736,421 584,065,510 171,183,244 719,534,962 267,919,665 2,910,616,240 2,699,843,108 774,102,153 271,273,187 3,684,718,393 2,971,116,295
264,460,824 190,098,546 264,460,824 190,098,546 523,730,799 703,767,600
101,813,694 101,813,694 201,628,985
78,143,504 78,143,504 289,296,615
78,828,082 78,828,082 6,550,122
2,366,916 2,366,916 8,762,606
3,307,521 3,307,521 156,108,924
56,119,018 448,410,121 56,119,018 448,410,121 199,961,328
326,727,984 326,727,984
Current Liabilities unallocated Non Current Liabilities Total Non Current Liabilities Capital and Reserve Total Equity and Liabilities 18d segment capital expenditure Cost
888,018,830 1,201,788,149
1,330,292,550
832,656,174
2,666,721,501 1,159,384,158 1,017,996,892 609,943,988 3,684,718,393 2,971,116,295
27,573,393
20,550,710
97,686,646
90,584,259
136,884,104
166,699,670
262,144,143
277,834,639
45

19. otHeR incoMe anD gains
2010 Rs. 19,563,117 7,539,513 42,682,150 11,005,541 307,419 81,097,740 2010 Rs. 25,281,629 176,631,810 7,821,931 5,073,428 5,938,293 20,687,713 147,815 241,582,619 (97,507,174) 144,075,445 2010 Rs. 1,217,000 88,215,186 172,695,485 108,636,657 736,803,732 1,019,000 235,988
2009 Rs. 8,804,942 1,582,609 5,539,082 26,862,300 11,005,943 53,794,876 2009 Rs. 28,603,830 124,218,141 7,917,626 5,073,427 7,137,179 25,365,566 198,315,769 (83,767,823) 114,547,946 2009 Rs. 1,058,000 77,794,266 48,879,446 95,462,186 613,711,758 -
Profit from Refuse Tea Project Profit on Sale of Scrap Iron Amortisation of Capital Grants Others Income from Sub Lease Written back sundry creditors
20. Finance cost
Overdraft Interest Term Loan Interest Interest on Government Lease Variable Lease Rental Lease Interest Interest Paid to related Companies Exchange Loss Amount Capitalised
21. PRoFit BeFoRe taXation is stateD aFteR cHaRging
Auditors fees Depreciation/Amortisation Defined Benefit Plan Costs Defined Contributions Plan Costs - EPF & ETF Others - Staff Costs (Including Estate Employees) Director fees Donation 22. incoMe taX eXPense
The Company is liable for income tax at the rate of 35% on its profit from manufacture & exempt on profit from agriculture. The carried forward tax losses of the Company as at 31 March 2010, amounts to Rs.1,337,847,971/- (provisional) 2008/2009 Rs.1,306,885,724/-. current tax (expense) / income Current Income Tax Expense Rs. Rs. -
46

22.1 Reconciliation between current tax (expense) / income and the product of Accounting Profit Multiplied by the Statutory Tax rate of (35%) as follows.
2010 Rs. 24,994,484 8,748,069 96,934,759 (142,531,534) (36,848,706) -
2009 Rs. (75,645,225) (26,475,829) 48,140,192 (51,141,263) (29,476,900) -
Accounting Profit / (Loss) before Tax and Joint Venture Profit Tax effect on Accounting Profit / (Loss) Tax effect on Aggregate Disallowed items Tax effect on Aggregate Allowable items Taxable Profit / (Loss) Tax effect on exempt Income - Agriculture Tax Losses Brought Forward & Utilized SRL Taxable Profit/(Loss) Provided in the accounts 23. eaRnings PeR sHaRe
The calculation of the basic earnings per share has been done based on profit after tax for the year divided by the weighted average number of ordinary shares outstanding during the year. The following reflects the income and share data used in the basic earnings per share computations. 2010 Rs. amount used as the numerator Net profit /(loss) for the year 63,816,794 amount used as the denominator Weighted average number of ordinary shares outstanding during the year 25,914,889 (61,704,615) 24,958,678 2009 Rs.
47

24. secuRities PleDgeD Following assets have been pledged as security for liabilities. name of Bank loan Facility Rs. 75,000,000 security nature of liability carrying amount Pledged 2010 2009 Rs. Rs. 57,572,458 31,194,704
Bank of Ceylon
Primary mortgage over estate produce consisting of Tea, Rubber, Oilpalm, Coffee, Coconuts, Clove & Paddy on estate. Primary floating mortgage bond for Rs. 25 Mn. over stock of estate produce consisting of Tea, Rubber, Oil Palm and Coconut stored at Dunsinane, Sheen, Fernlands and Medecombra Estates at Pundaluoya. Additional mortgage of 20.184 Mn over estate produce consisting of Tea, Rubber, Oilpalm, Coffee, Coconuts, Clove & Paddy on estate. Corporate Guarantee of M/S Aitken Spence Plantation Management Ltd Primary floating mortgage bond for Rs. 10 Mn. over leasehold property at Talgaswella Estate in Galle. Corporate Guarantee of Aitken Spence Plantation Managements Ltd. Primary floating mortagage bond for Rs. 25 Mn. over lease hold property Gallinda Estate at Mapagala, Galle. Primary floating mortgage bond for Rs. 100 Mn. over leasehold property at Fernlands Estate Pundaluoya,Nuwara Eliya. 25 Mn. Over Stock in Trade Leeway available on the primary floating mortagage band for Rs. 50 Mn over leasehold property Harrow Estate situated at Pundaluoya, Nuwara Eliya. Leeway available on the primary floating mortagage band for Rs. 50 Mn over leasehold property Harrow Estate situated at Pundaluoya, Nuwara Eliya Primary mortgage over leasehold rights to the land and Buildings of Elpitiya and Bentota Estates. Primary mortgage over leasehold rights to the land and buildings of Nayapane, Deviturai & Newpeacock estates. Further mortgage over leasehold rights to the land and the buildings of Nayapane, Deviturai & Newpeacock estates. Further mortgage over leasehold rights to the land and the buildings of Nayapane, Deviturai & Newpeacock estates. Secondary mortgage over the leasehold rights of Sheen estate together with buildings & machinery situated at Kadorapitiya. Secondary mortgage over the leasehold rights of Sheen estate together with buildings & machinery situated at Kadorapitiya. Loan Agreement of 30 Mn. Existing Primary Mortgagae Bond for Rs. 31 Mn. over leasehold rights of Sheen Estate situted in Pundaluoya , Nuwara Eliya. Existing Corporate Guarantee of Aitken Spence Plantation Managements Ltd. For Rs. 67 Mn. Loan Agreement of 10 Mn. Existing Primary Mortgagae Bond over leasehold rights of Sheen Estate situted in Pundaluoya , Nuwara Eliya. Existing Corporate Guarantee of Aitken Spence Plantation Managements Ltd. For Rs. 67 Mn. Primary Mortgage over lealehold rights of Lelwela Estate. Corporate Guarantee of Aitken Spence Plantation Managements Ltd. Primary Mortgage over lealehold rights of Ketandola Estate & Gulugahakanda Estate. Further mortgage over future Tea receivables. Further Mortgage over leasehold rights of Lelwela Estate. Primary Mortgage over lealehold rights of Dunsinane Estate & Meddacombra Estate. Securitising of future Tea Sales. Securitising of future Tea Sales. Securitising of future Tea Sales.
Overdraft
Bank of Ceylon
73,184,644
Term Loan
20,184,644
Hatton National Bank
50,000,000
Overdraft
15,808,105
16,256,929
Hatton National Bank Hatton National Bank Hatton National Bank Hatton National Bank Hatton National Bank Seylan Bank DFCC Bank DFCC Bank DFCC Bank DFCC Bank DFCC Bank Sampath Bank
10,000,000 100,000,000 25,000,000 30,000,000 10,000,000 90,700,000 158,481,886 124,014,728 25,429,000 47,000,000 18,000,000 30,000,000
E-Friends Loan Money Market Loan Term Loan Short Term Loan Short Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan
15,808,105 7,293,951 25,000,000 12,301,274 12,301,274 27,986,152 38,574,938 38,574,938 38,574,938 11,910,540 11,910,540 11,910,540
16,256,929 7,501,040 25,000,000 12,650,532 12,650,532 38,877,491 76,152,691 76,152,691 76,152,691 28,764,457 28,764,457 -
Sampath Bank
10,000,000
Term Loan
11,910,540
NDB NDB State Bank of India NDB NDB NDB
80,000,000 150,000,000 250,000,000 75,000,000 115,000,000 50,000,000
Tea Securitising Loan Tea Securitising Loan Tea Securitising Loan Tea Securitising Loan Tea Securitising Loan Tea Securitising Loan
5,551,443 19,424,611 36,164,640
Securitising of future Tea Sales Securitising of future Tea Sales Securitising of future Tea Sales
48

25. caPital coMMitMents Followings are the capital commitments as at the balance sheet date. Approved by Board & Contracted for Approved by Board & not Contracted for 26. contingencies
2010 Rs. (Mn) 167
2009 Rs. (Mn) 149
No known contingent liabilities exist as at the balance sheet date other than the matters disclosed in Notes 13 & 15 to the Financial Statements and few legal matters pending as at the year end of which the outcome is not determinable. 27. Post Balance sHeet events There have been no material events occurring after the balance sheet date that require adjustment or disclosure in the financial statements. 28. RelateD PaRtY DisclosuRes The details of the significant related party disclosures are as follows. 28.1 transactions with the Parent and Related entities. company name of Director Relationship nature of transaction Management Fees Executive Staff Salaries & Expenses Short Term Loan Interest Loan Repayment charged/(credited) 2010 2009 Rs. Rs. 9,019,066 15,445,311 9,622,863 44,166,662 13,435,509 16,734,328 11,688,528 -
Aitken Spence Plantation Managements Ltd.
Mr. J.M.S. Brito Parent Company Dr. R.M. Fernando Mr. Merrill J. Fernando Mr. Malik J. Fernando Mr. D.V.H.de Mel Mr. D.A.de S.Wickremanayake Dr. R.D.Bandaranaike Mr. A.L.W.Goonawardena Mr. D.H.S.Jayawardena Group Company Mr. J.M.S. Brito Dr. R.M. Fernando Mr. G.C.Wickremasinghe Mr. G.M.Perera Mr. C.H.Gomez Mr. N.J. de Silva Deva Adithya Mr. V.M.Fernando Dr. P Dissanayake Mr. R N Asirwatham Mr. J.M.S. Brito Group Company Dr. R.M. Fernando Mr. A.L.W.Goonawardena Mr. Malik J. Fernando Mr. D.A.de S.Wickremanayake Mr. J.M.S. Brito Group Company Dr. R.M. Fernando Mr. Merrill J. Fernando Mr. Malik J. Fernando Mr. D.V.H.de Mel Mr. D.A.de S.Wickremanayake Mr. A.L.W.Goonawardena Mr. J.M.S. Brito Group Company Dr. R.M. Fernando Mr. Merrill J. Fernando Mr. Malik J. Fernando Mr. D.V.H.de Mel Mr. D.A.de S.Wickremanayake Mr. A.L.W.Goonawardena
Aitken Spence PLC
Interest on Current Account & Short Term Loans Services & Sundries
11,180,749 3,359,345
13,518,827 3,186,006
Tea Country Homes (Pvt) Ltd.
Professional & Secretarial Charges
249,908
171,094
New Peacock Cottage (Pvt) Ltd.
Professional Charges
27,769
24,794
Water Villas (Pvt) Ltd.
Professional Charges & Secretarial Fees
30,644
34,078
49

28. RelateD PaRtY DisclosuRes (cont.) company name of Director Relationship nature of transaction charged/(credited) 2010 2009 Rs. Rs. 361,423 209,884
AEN Palm Oil Processing (Pvt) Ltd.
Mr. J.M.S. Brito Dr. R.M. Fernando Mr. F. L. Fonseka Dr. C.N.A.Nonis Mr. P.D.Samarasinghe Mr. J.H.P. Ratnayake
Group Company
Expenditure Incurred
Elpitiya Lifestyle Solutions (Pvt) Ltd.
Mr. S. Pathiratne Dr. R.M. Fernando Mr. Malik J. Fernando
Group Company
Expenditure Incurred USD Loan & Interst
6,033,084 17,876,941
4,219,578 10,658,895
Mr. D.A.de S.Wickramanayake Ms. D. Piyaratne Mr. A.Kanthasamy Meddecombra Power Company (Pvt) Ltd. Mr. J.M.S.Brito Dr. R.M.Fernando Mr. Malik J Fernando Mr. D.A.de S.Wickremanayake HNB Bank Related Company Loan Receipts Loan Repayment Finance Lease Repayment Finance Lease Obtained DFCC Vardhana Related Company Loan Receipt Loan Repayment DFCC Bank Related Company Loan Receipts ADB Loans Repayment 28.2 transactions with the Key Management Personnel of the company and parent There are no transactions with the key management personnel of the company and its parent. Further there were no key management compensation paid during the year. 29. RelateD PaRtY tRansactions There are no related party transactions other than those disclosed in Notes 7, 10, 17, 20, 24 & 28 to the Financial Statements. 49,852,428 10,964,386 928,836 11,914,138 50,000,000 88,213,742 37,459,000 45,083,670 10,839,216 10,293,676 22,584,286 6,077,787 27,295,530 Group Company Professional Fees & Secretarial Charges 27,769 24,794
50
value aDDeD stateMent

Figures in Rs.000 Value Added Turnover Other Income Purchase of goods and Services Total Value Added Distributed as follows To Employee, as remuneration To Government, as lease rental To Lenders, as interest on short & long term borrowings Retained for re-investment and future growth Depreciation Reserves 88,215 1,077,730 8.18 100.00 77,794 902,139 8.62 100 131,180 88,215 12.17 8.18 101,557 77,794 11.26 8.62 12,895 1.20 12,991 1.44 845,440 78.45 709,797 78.68 2,215,126 81,098 2,296,224 (1,218,494) 1,077,730 100 (53) 47 1,556,182 53,795 1,609,977 (707,838) 902,139 100 (44) 56 Year ended 31.03.10 as a % Year ended 31.03.09 as a %
Distribution of Value Added 2009/2010

Government 1.20% Depreciation 8.18% Remuneration 78.45%
Lenders 12.17%
Distribution of Value Added 2008/2009

Government 1.44%
Depreciation 8.62%
Remuneration 78.68% Lenders 11.26%
51
inFoRMation on estates
Year Ended 31st March 2010 cultivated area (ha.) estate tea Rubber oil Palm others total total area (ha.) annula Production Factory Details no. of workers crop Kg000 tea Rubber oilPalm Manfd.
nuwaRaeliYa DistRict Dunsinane Sheen Fernlands Meddecombra KanDY DistRict New Peacock Nayapane galle DistRict Devitura 102.84 244.51 177.04 66.10 590.49 896.22 313 159 1,809 Tea Rubber Tea Rubber Tea Tea Rubber Rubber 558 293.24 268.15 164.79 190.00 458.03 458.15 535.73 576.50 665 403 Tea Tea 575 483 577.75 302.00 382.99 480.50 51.75 66.25 37.25 211.04 629.50 368.25 420.24 691.54 790.00 517.25 484.25 890.00 911 472 463 565 Tea Tea Tea Tea 1,061 699 809 1,021
Talgaswella Gulugahakanda Lelwala Ketandola Bentota Elpitiya
54.34 68.73 68.81 65.35 -
187.83 60.01 42.28 127.08 353.45 342.50
422.55 58.13 55.48 10.00 139.63 862.83
80.97 16.86 21.00 10.16 32.25 18.53
745.69 1,033.85 203.73 132.09 258.07 395.70 500.66 418.18 240.35 832.69 684.06 952.44
290 102 180 189 52 30 4,635
139 32 26 66 242 249 913
4,353 447 460 1,380 8,449
423 162 235 247 263 305 6,841
2,664.70 1,357.66
966.95 5,852.14 8,851.52 2008/2009
2009/2010 tea Total Crop (Kg.000s) Total NSA (Rs/Kg) YPH employment strength 2009 2010 4,635 344.87 1,367 Rubber 913 278.86 878 workers 7,138 6,841 oil Palm 8,449 21.39 10,785 tea 4,353 261.42 1,269
Rubber 981 199.11 868
oil Palm 7,931 18.06 10,177 executives 86 82 total 7,614 7,307
clerical & technical 390 384
52
ten YeaR suMMaRY
Year ended 31st March
2010 Rs. 000
2009 Rs. 000
2008 Rs. 000
2007 Rs. 000
2006 Rs. 000
2005 Rs. 000
2004 Rs. 000
2003 Rs. 000
2002 Rs. 000
2001 Rs. 000
tRaDing Results Revenue Other Income Gross Profit Finance Cost Profit / (Loss) Before Tax Income Tax (Expense) / Income Profit / ( Loss) After Tax Balance sHeet Funds employed Stated Capital Share Capital Share Premium Revenue Reserves Negative Goodwill total equity convertible Debentures Redeemable Debentures Deferred Income Retirement Benefit Obligations Net Liability to Lessor Interest Bearing Borrowings non-current liabilities assets employed Non-Current Assets Current Assets Current Liabilities
2,215,126 81,098 241,211 (144,075) 63,817 63,817
1,556,182 53,795 89,528 (114,548) (61,705) (61,705)
1,883,109 44,757 362,925 (120,717) 166,317 3,919 170,237
1,281,922 35,718 199,722 (107,420) 11,286 (3,391) 7,895
1,046,338 30,681 93,149 (80,009) (29,284) (8,327) (37,610)
1,214,280 31,101 163,512 (56,360) 52,534 52,534
1,022,891 78,264 70,719 (55,536) 31,128 31,128
1,103,657 41,268 113,773 (57,034) 30,178 30,178
999,283 67,229 110,087 (68,701) 40,167 40,167
998,132 30,000 160,609 (51,625) 65,153 65,153
694,236 323,761 1,017,997 75,000 186,517 448,410 190,104 878,672 1,778,703 2,796,700 2,910,616 774,102 (888,019) 2,796,700
350,000 259,944 609,944 75,000 149,176 326,728 192,692 415,789 1,159,384 1,769,328 2,699,843 271,273 (1,201,788) 1,769,328
350,000 321,649 671,649 75,000 138,306 305,449 195,180 394,491 1,108,426 1,780,074 2,485,862 416,094 (1,121,882) 1,780,074
249,587 100,413 151,412 501,412 116,943 264,845 197,570 254,478 833,836 1,335,248 2,318,057 314,884 (1,297,693) 1,335,248
249,587 100,413 (25,501) 169,017 493,517 93,758 230,658 199,872 326,363 850,651 1,344,168 2,231,841 219,897 (1,107,571) 1,344,168
249,587 100,413 12,110 183,102 545,212 91,661 243,149 202,084 368,747 905,641 1,450,853 2,120,496 233,766 (903,410) 1,450,853
249,587 100,413 (40,424) 197,187 506,763 87,205 240,858 204,211 383,173 915,447 1,422,210 1,951,754 224,927 (754,471) 1,422,210
249,587 100,413 (71,552) 211,271 489,719 77,741 231,722 206,256 367,509 883,227 1,372,947 1,806,591 226,801 (660,445) 1,372,947
200,000 (101,730) 225,356 323,626 150,000 20,000 60,954 217,313 208,624 368,673 875,564 1,349,190 1,675,196 194,092 (520,098) 1,349,190
200,000 (141,897) 239,441 297,544 150,000 20,000 45,251 205,003 210,314 345,136 825,704 1,273,247 1,515,304 190,539 (432,596) 1,273,247
Key indicators EPS (basic) (Rs.) Dividend per Share (Rs.) Net Assets Per Share (Rs.) Market Price Per Share (Rs.) Price Earnings Ratio Current Ratio Return on Shareholders Funds %
2.46 0.50 27.94 34.00 14 0.87 6.27
(2.47) 24.44 39.00 (16) 0.23 (10.12)
6.82 26.91 80.50 12 0.37 25.35
0.32 20.09 34.50 109 0.24 1.57
(1.51) 19.77 30.00 (20) 0.20 (7.62)
2.10 21.84 9.75 5 0.26 9.64
1.25 20.30 12.00 10 0.30 6.14
1.28 19.62 10.00 8 0.34 6.16
2.01 16.18 * * 0.37 12.41
3.26 14.88 * * 0.44 21.90
* Shares had not been traded during this period

53
sHaReHolDeR & investoR inFoRMation

sHaReHolDing BReaKDown
as at 31 - MaRcH - 2010
Category 1 1,001 5,001 10,001 50,001 100,001 500,001 1,000,001 all Holdings 1,000 5,000 10,000 50,000 100,000 500,000 1,000,000 above
No. of Shareholders 10,032 163 42 22 2 4 0 3 10,268
No. of Shares 1,789,170 307,692 272,819 358,110 130,900 609,301 0.00 32,965,223 36,433,215
% 4.91 0.84 0.75 0.98 0.36 1.67 0.00 90.48 100.00
suMMaRY oF sHaReHolDings
as at 31 - MaRcH - 2010 category no. of shares no. of shareholders %
Nationals Non Nationals Residents Non Residents Individuals Institutions
36,148,215 285,000 36,308,203 125,012 3,250,982 33,182,233
10,264 04 10,266 02 10,244 24
99.22 0.78 99.66 0.34 8.92 91.08
sHaRes tRaDeD DuRing tHe YeaR

april 1, 2009 to March 31, 2010
Number of share transactions Number of shares Total Value Highest Price Traded (Rs)
3879 1,171,200 58,341,700.00 67.00 16.06.2009 Lowest Price Traded (Rs) 33.00 28.01.2010 Value of Shares as at the end of financial year (Rs) 34.00
PuBlic HolDing:
as at 31 - MaRcH - 2010
Excludes: * * * * * Parent, subsidiary or associate companies Subsidiaries or associates of the parent company Directors, CEO, their spouses & children under 18 & their nominees Co. in which a Directors holding exceeds 50% of the equity or where the Director controls the composition of the Board Shareholders whose holding exceeds 10% of the issued capital 36,433,215 25,158,677 7,806,546 3,467,992 (69.05%) (21.43%) (9.52%)
Total no of shares Less: Holding by the parent co (ASPM) Less: Shareholder exceeding 10% (Secretary to the Treasury) Public holding
54
sHaReHolDeR & investoR inFoRMation (contD.)

20 MaJoR sHaRe HolDeRs HolDing as at
31st March 2010
shareholder iD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 8842 16360 19704 25764 23675 21003 6796 24364 3758 25649 21126 25539 23996 1413 24278 524 22494 20273 25794 1451
name of the shareholder AITKEN SPENCE PLANTATION MANAGEMENTS LTD SECRETARY TO THE TREASURY N.S. NILES T.T. AL - NAKIB TRANZ DOMINION,L.L.C. S.N.C.W.M.B.C. KANDEGEDARA K.S.D. SENAWEERA FIRST CAPITAL MARKETS LIMITED/MR.L.K.N.K.KULAWARDENA W.S. PERERA H.M.C.M. PERERA M.A.U. GNANATILAKE C.R. SANDANAYAKE S.H.T.L. AMARASINGHE U.I. SURIYABANDARA H.M. ARIYADASA J.R.B. NEDURANA A.R. IBRAHIM P.A. DAYANANDA PRIME LANDS (PVT) LTD H.H. ANSARY total no. of shares
shareholding 25,158,677 7,806,546 210,101 156,200 125,000 118,000 80,600 50,300 40,100 40,050 29,100 24,013 22,600 18,782 18,350 17,100 13,500 13,200 13,150 11,500 33,966,869
% 69.054 21.427 0.577 0.429 0.343 0.324 0.221 0.138 0.110 0.110 0.080 0.066 0.062 0.052 0.050 0.047 0.037 0.036 0.036 0.032 93.231
golden shareholder
The Golden Share has been allotted to the Secretary to the Treasury for and on behalf of the State of Democratic Socialist Republic of Sri Lanka. The rights attached to the Golden Share are set out in the Articles of Association which are as follows: 1) 2) The Golden Share shall only be held by the Secretary to the Treasury in his official capacity The Golden Shareholder s prior written concurrence is required (a) to amend the definition of the words Golden Share or Golden Shareholder and the Articles setting out specific rights attached to such share (b) to sub-lease, cede or assign the rights in part or all of the lands assigned to the Company 3) The Golden Shareholder is entitled to (a) call upon the Directors once in every three months if desired to meet with him or his nominees to discuss matters of the Company of interest to the State (b) inspect the books of accounts of the Company either by himself or by his nominees with due notice (c) receive within 60 days of the end of every quarter, a quarterly report relating to the performance of the Company (d) receive within 90 days from the end of each financial year, information relating to the Company in a pre-specified format.
55
DeFinitions
Financial teRMs FINANCIAL TERMS Accounting policies accounting Policies Specific principles, bases, conventions, rules and practices adopted by an Specific principles, bases, conventions, financial practices adopted by an enterprise in preparing and presenting rules and statements. enterprise in preparing and presenting financial statements. Borrowings Borrowings All interest bearing liabilities. All interest bearing liabilities. Capital employed capital employed Total assets less interest free liabilities and provisions. Cash assets less interest free liabilities and provisions. Total equivalents Liquid investments with original maturities of three months or less. cash equivalents Contingent Liabilities Liquid investments with original maturities of three months or less. Conditions or situations at the Balance Sheet date, the financial effect of which are toliabilities contingent be determined by future events which may or may not occur. Conditions or Current ratio situations at the Balance Sheet date, the financial effect of which are to be determined by future events which may or may not Current assets divided by current liabilities. occur. Earnings Per Share current Ratio Profits attributable to ordinary shareholders divided by the number of Current shares in issue. ordinary assets divided by current liabilities. Effective Tax Rate earnings Per share Income tax expenses divided by profit from ordinary activities before tax. Profits attributable to ordinary shareholders divided by the number of ordinary Equity shares in issue. Shareholders funds, i.e. stated capital and reserves. effective tax Rate Net Assets Per Share Income tax expenses divided by profit from ordinary activities before tax. Shareholders funds divided by the number of ordinary shares. equity Price Earnings Ratio Shareholders funds, i.e. share capital and reserves. Market price of a share divided by earnings per share. net assets Per Related parties share Parties who could control by the number of ordinary the financial and Shareholders funds divided or significantly influence shares. operating policies of the business. Price earnings Ratio Return on Shareholders Funds Market price of a share divided by earnings per share. Attributable profits to the shareholders divided by shareholders funds. Segment Parties Related Constituent business units grouped in terms of nature and similarity of Parties who operations. could control or significantly influence the financial and operating policies of the business. SLAS Return on shareholders Funds Sri Lanka Accounting Standards. Attributable profits to the shareholders divided by shareholders funds. segment UITF Urgent Issues Tasks Force of The Institute of Chartered Accountants of Sri Constituent business units grouped in terms of nature and similarity of Lanka. operations. Working capital slas Capital required to finance the day - to -day operations (current assets minus current liabilities). Sri Lanka Accounting Standards. uitF NON - FINANCIAL TERMS Urgent COP Issues Tasks Force of The Institute of Chartered Accountants of Sri Lanka. The Cost of Production. This generally refers to the Cost of producing a working capital Kilo of produce. (Tea / Rubber / Oil Palm). Capital Crop required to finance the day - to -day operations (current assets minus current liabilities). The total produce harvested over a given period of time (usually during a non - Financial teRMs financial year). coP in bearing Extent The extentof Production.which generally refers to the Cost of see mature The Cost of land from This crop is being harvested. Also producing a Kilo of produce. (Tea / Rubber / Oil Palm). Plantation. crop Field The total produce harvested over adividedperiod of timeorder to facilitate An unit extent of land. Estates are given in to fields in (usually during a financial year). management.. extent in plantation. Immature Bearing The extent of plantation that is under harvested. Also see not being The extent of land from which crop is being development and Immature Plantation. harvested. Field Infilling An unit extent of land. Estates are dividedplanting of in order to plants is A method of field development whereby in to fields individual facilitate management.. increase the yield of a given field, whilst allowing the field done in order to to be harvested. immature Plantation. Mature plantation The extent of plantation that is under development and is not being harvested. The extent of plantation from which crop is being harvested. Also see Extent in Bearing. Infilling NSA A method of field development whereby planting of individual plants is done in order to increase the yield of a given field, whilst allowing the field The Net Sales Average. This is the average sale price obtained (over a to be harvested. period of time) after deducting Brokerage fees and cost of Gratis teas. Mature Plantation Replanting The extent of plantation from which crop is being harvested. Also see A method of field development where an entire unit of land is taken out of Extent in Bearing. bearing and developed by way of uprooting the existing trees, bushes and replanting with new trees / bushes. nsa Yield The Net Sales Average. This is the average sale price obtained (over a period of time) after deducting Brokerage fees and cost of Gratis teas. The average crop per unit extent of land over a given period of time (usually kgs.per hectare per year). Replanting A method of field development where an entire unit of land is taken out of bearing and developed by way of uprooting the existing trees, bushes and replanting with new trees / bushes. Yield The average crop per unit extent of land over a given period of time (usually kgs.per hectare per year).
56
Financial calenDaR 2009/2010
September 29, 2009
17th Annual General Meeting
November 19, 2009
Half-yearly Accounts as at September 30, 2009 were published
May 20, 2010
Accounts for the year ended March 31, 2010 were published.
August 27, 2010
18th Annual General Meeting
57
notice oF Meeting
NOTICE is hereby given that the Eighteenth Annual General Meeting of ELPITIYA PLANTATIONS PLC., will be held at the Auditorium of the Ceylon Chamber of Commerce, No.50 Nawam Mawatha, Colombo 2, at 3.00 p.m. on Friday August 27th, 2010, for the following purposes:v To receive and consider the Annual Report of the Board of Directors together with the Financial Statements of the Company for the year ended 31st March 2010 and the report of the Auditors thereon. v v v v To declare a First and Final Dividend as recommended by the Directors To re-elect Mr. Malik J Fernando who retires by rotation in terms of Article 92 of the Articles of Association. To re-elect Mr. J M S Brito who retires by rotation in terms of Article 92 of the Articles of Association. To re-elect Mr. Merrill J Fernando who is over 70 years, as a Director by passing the following resolution. That the age limit stipulated in Section 210 of the Companies Act No 7 of 2007 shall not apply to Mr Merrill J Fernando who has attained the age of 80 years and that he be re-elected a Director of the Company v To re-appoint the retiring Auditors, Messrs. Ernst & Young, and authorize the Directors to determine their remuneration.
By order of the Board Sgd. aitKen sPence coRPoRate Finance (Pvt) ltD., Secretaries August 2, 2010 Colombo
note: 1. A member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote in his/her stead and a Form of Proxy is enclosed for this purpose. A Proxy need not be a member of the Company. 2. The completed Form of Proxy must be deposited at the registered office No. 305, Vauxhall Street, Colombo 2, forty eight hours before the time fixed for the meeting. 3. Any member or Proxy holder attending the meeting is kindly requested to bring this report.
58
FoRM oF PRoXY
I/We ........
of...................... being a member / members of ELPITIYA PLANTATIONS PLC., hereby appoint ........................................................................................... ............. of ..................... (whom failing) Joseph Michael Suresh Brito of Colombo Rohan Marshall Fernando of Colombo Merrill Joseph Fernando of Colombo Malik Joseph Fernando of Colombo Devan Vasantha Hareen de Mel of Colombo Sumitha Anura Bandara Ekanayake of Colombo Lalit Nihal de Silva Wijeyeratne of Colombo Jayamaha Hittihamilage Jayatilaka Jayamaha of Colombo (whom failing) (whom failing) (whom failing) (whom failing) (whom failing) (whom failing) (whom failing)
as my / our Proxy to vote for me/us and on my /our behalf at the Annual General Meeting of the Company to be held on 27th August 2010, and at any adjournment thereof and at every poll which may be taken in consequence thereof.
Signed this .............................day of .........................Two Thousand and Ten
..................................... Signature
Note: Instructions as to completion are noted on the reverse hereof.
instRuctions as to coMPletion
Kindly perfect the form of proxy by filling in legibly your full name and address, signing in the space provided and filling in the date of signature.
If the proxy form is signed by an Attorney, the relative power of attorney should also accompany the proxy form for registration, if such power of attorney has not already been registered with the Company.
In the case of a Company/Corporation, the proxy must be under its Common Seal (if required), which should be affixed and attested in the manner prescribed by its Articles of Association.
The completed form of proxy should be deposited at the Registered Office of the Company, No. 305 Vauxhall Street, Colombo 2 by 2.00 p.m. on 25th August 2010 being 48 hours before the time appointed for the holding of the meeting.
61
62

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Financial HigHligHts

Net Profit After Tax ( Rs.Million )

180 160 140 120 100 80 60 40 20 (20) (40) (60) (80)

Shareholders' Funds (Rs. Million)

Oil palm & Other Crops

Year ended 31st March

42 169 203 203 8 185 (26) 67 (3) 200 100 14 98 67 162

Elpitiya plantations plc annual REpoRt 2009/10

Colombo 20 May 2010

Elpitiya plantations plc annual REpoRt 2009/10

694,236,120 323,760,772 1,017,996,892

350,000,010 259,943,978 609,943,988

2,215,126,092 (1,973,914,603) 241,211,489

81,097,740 (143,037,064) (10,202,236)

Elpitiya plantations plc annual REpoRt 2009/10

stateMent oF cHanges in eQuitY

350,000,010 350,000,010 344,236,110

321,648,593 (61,704,615) 259,943,978 -

671,648,603 (61,704,615) 609,943,988 344,236,110

Elpitiya plantations plc annual REpoRt 2009/10

casH Flow stateMent

20,607,486 (172,643,636) (152,036,150) 371,019,291 (38,392,941) 332,626,350

18,532,615 (152,048,032) (133,515,417) 20,607,486 (172,643,636) (152,036,150)

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Rate of Discount Rate of Salary Increase - Workers - Staff - Workers - Staff

iii) Retirement Age

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Revaluation as at 22.06.92 Rs. Leasehold property 280,058,758 280,058,758

Disposals Rs. (938,279) (938,279)

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

Mature plantations Buildings Machinery Other vested assets/ Unimproved land

30 years 25 years 15 years 53 Years

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

capital work-in-Progress total wRitten Down value

notes to tHe Financial stateMents

immature Plantations Rs.

Elpitiya plantations plc annual REpoRt 2009/10

notes to tHe Financial stateMents

aMount Due FRoM RelateD coMPanies

350,000,010 344,236,110 694,236,120