ANL RPRT - FLC [2013]_Final_5th sep

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Contents
Corporate Information
Financial Highlights
Chairman’s Review
Managing Director / CEO’s Review
Board of Directors
Human Resource
Corporate Governance
Risk Management
Directors’ Report
Audit Committee Report &
Remuneration Committee Report
Statement of Directors’ Responsibilities
Independent Auditors’ Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Cash Flow Statement
Notes to the Financial Statements
Details of Leasehold Land & Buildings
and Additions to Buildings
Statement of Value Addition
Historical Financial Information
Shareholders Analysis
Subsidiaries, Joint Ventures & Associates
Glossary of Financial Terms
Notice of the Annual General Meeting
Form of Proxy
02
03-04
05
07-09
10-13
14
15-16
17-18
19-21
22
23
24
25
26
27
28
29-94
95-97
98
99
100-101
102
103-104
105
107-108
ANNUAL REPORT 2012/13
FLC HOLDINGS PLC
Legal Form
A Public Company with limited liability, registered under
Companies Act No. 7 of 2007 and quoted on the Diri Savi Board
of the Colombo Stock Exchange
Date of Incorporation
22nd May 2008
Company No.
PV 64165 PB/PQ
Directors
Mr. K Aloysius
Non-Executive Director
Chairman
Mr. G A Aloysius
Managing Director/ CEO
Mr. G J Aloysius
Executive Director
Mr. I C Nanayakkara
Executive Director
Resigned w.e.f. 31st Dec. 2012
Mr. J M S de Mel
Executive Director
Mr. D S K Amarasekera
Mr. N M Prakash
Mr. P R Saldin
Mr. D C Wimalasena
Independent, Non-Executive Director
Mr. A I Fernando
02
Secretaries & Registrars
S S P Corporate Services (Pvt) Ltd
No. 101, Inner Flower Road,
Colombo 03.
Tel : +94 11 2573894 & +94 11 2576871
Fax : +94 11 2573609
Registered Office
Level 03, Prince Alfred Tower,
No. 10, Alfred House Gardens,
Colombo 03.
Tel : +94 11 4523643 & +94 11 4523635
Fax : +94 11 4523653
E-mail: [email protected]
Website: www.freelankacapital.com
Business Address
No. 168, Negombo Road,
Peliyagoda.
Tel : +94 11 7891014
Fax : +94 11 7891013
Auditors
Messrs BDO Partners, Chartered Accountants,
No. 65/2, Sir Chittampalam A. Gardiner Mawatha,
Colombo 02.
Tel : +94 11 2421878 & +94 11 2421879
Fax : +94 11 2336064
Bankers
Pan Asia Banking Corporation PLC, Colombo 06.
Seylan Bank PLC, Millennium Branch
FLC HOLDINGS PLC
Financial Highlights
Net Assets Per Share
Total Equity
Rs.4.70
Rs.13.5Bn
Profit After Taxation
Debt to Equity Ratio
Rs.990Mn
11%
Year ended 31st March
2012/13
2011/12
Change
6,243,257
933,322
203,078
1,151,443
989,523
5,719,356
561,656
173,252
467,438
361,749
9.2%
66.2%
17.2%
146.3%
173.5%
2,568,000
7,070,242
2,412,228
7,235,977
5,742,386
2,866,173
19,105,944
3,769,465
1,833,899
13,502,580
2,568,000
6,748,454
2,020,672
6,749,481
5,546,870
3,096,448
18,226,318
3,911,024
1,383,078
12,932,216
4.8%
19.4%
7.2%
3.5%
-7.4%
4.8%
-3.6%
32.6%
4.4%
0.41
0.20
6.16
4.70
8.80
5.30
14.95
15.85
1.56
1.21
11.46
0.03
58.88
4.52
0.74
2.00
9.82
6.32
2.24
1.83
12.77
1094.8%
-89.5%
4.0%
1093.5%
164.4%
52.2%
150.6%
-30.2%
-33.9%
-10.2%
OPERATING RESULTS
Group Revenue
Gross Profit
Finance Costs
Profit before Taxation
Profit for the Year
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
FINANCIAL POSITION
Stated Capital
Non Controlling Interests
Property, Plant and Equipment
Bearer Biological Assets
Consumable Biological Assets
Current Assets
Total Assets
Non-current Liabilities
Current Liabilities
Total Equity
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
(Rs.'000)
FINANCIAL INDICATORS
Basic Earnings per Share
Dividend per Share
Price Earnings Ratio
Net Assets per Share
Return on Average Shareholders' Funds
Return on Total Assets
Gross Profit Ratio
Net Profit Ratio
Current Ratio
Quick Ratio
Debt to Equity Ratio
(Rs)
(Rs)
(Times)
(Rs)
(%)
(%)
(%)
(%)
(Times)
(Times)
(%)
03
FLC HOLDINGS PLC
Financial Highlights CONTD
Revenue (Rs.'000)
Segmental Revenue - Group
Group
7,000,000
6,000,000
5,000,000
Tea
4,000,000
Rubber
3,000,000
Hydro Power
2,000,000
Other
1,000,000
2008/09
2009/10
2010/11
2011/12
2012/13
Total Assets
Group
Company
Profit before Tax (Rs.'000)
2,500,000
Net Assets (Rs.'000)
Total Liabilities
25,000,000
2,000,000
20,000,000
1,500,000
15,000,000
1,000,000
10,000,000
500,000
5,000,000
2008/09
2009/10
2010/11
2011/12
-
2012/13
(500,000)
2008/09
Group
Company
Total Assets (Rs.'000)
2009/10
2010/11
2011/12
2012/13
Return on Average Shareholders' Funds (%)
Group
80.00
25,000,000
70.00
20,000,000
60.00
50.00
15,000,000
40.00
10,000,000
30.00
20.00
5,000,000
10.00
-
2008/09
2009/10
2010/11
2011/12
04
-
2008/09
Group
Net Assets Per Share (Rs.)
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
-
2012/13
2009/10
2010/11
2011/12
2012/13
Group
Interest Cover (Times)
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
-
2008/09
2009/10
2010/11
2011/12
2012/13
2008/09
2009/10
2010/11
2011/12
2012/13
FLC HOLDINGS PLC
Chairman’s Review
I welcome you to the fifth Annual General Meeting of F L C
Holdings PLC and have pleasure in presenting to you the Annual
Report and Audited Financial Statements of the Company for the
year ended 31st March 2013.
It is encouraging to see a substantial growth in the profitability of
the Company and also the Group during the year under review
surpassing the previous year’s achievements. The substantial
improvement in the profitability from the tea segment has paved
the way for excellent results of the Group during the current year.
Our Group primarily on plantations is operating in a very
challenging environment to maintain its Group bottom line in the
ensuing years. However, the exceptional commitment shown by
the Group to ensure long term sustainability in the plantation
sector under each segment of the Group as detailed in the
Managing Director/CEO’s Review is commendable. The Group
has taken an initiative to strengthen its marketing focus with
Ceylon Estate Teas (Pvt) Ltd having joined the Group during the
year.
We as a Group are mindful about our responsibility towards the
environment we do business in. This thought which is at the core
of our Group and our efforts year on year to make a positive
contribution to our natural environment keeps driving us
forward. The Group presently manages 7,582 hectares in Tea and
5,853 hectares in Rubber having plans to expand its core crops
further in the coming years. The Group has already commenced
planting Cinnamon in the low grown region. The Group expects
future market demand on cinnamon in value addition form and
anticipates its revenue contribution to the Group from the year
2016. The demand for timber produced in a sustainable manner
is increasing, which gives us a clear indication in the long term
profitability from timber. The continuous timber cultivation with
replanting will significantly increase the Group’s asset base in
the years to come and will make a substantial contribution to the
Group’s financial results in the future. The Group is gradually
increasing its hydro power generation capacity with the
commissioning of two more hydro power plants towards the end
of next financial year.
The Company was awarded with the “Certificate of
Compliance” for its Annual Report of 2011/12 at the Annual
Report Awards competition conducted by the Institute of
Chartered Accountants of Sri Lanka. The increase in profits of
the Company enabled the Directors to declare and pay an interim
dividend of Rs. 0/15 per Ordinary share for the year 2012/13 as
detailed in the Note 12 to the Financial Statements.
The immense support extended to the Group by Mr. I C
Nanayakkara during his tenure as a Board Member until his
resignation effective from 31st December 2012 is very much
appreciated.
In conclusion, I would like to express my sincere gratitude to all
our stakeholders for their valuable support extended to the
Group during the year.
K Aloysius
Chairman
22nd August 2013
Colombo
The construction of the Office Complex is nearing its
completion towards end of the calendar year which will ensure
steady returns commencing from the next financial year.
Whether it is hydro power or sustainable tourism, our Group’s
business expansion has stayed within the concept of nature and
green as much as possible. Our Group continues to focus on
driving profitably with responsibility.
05
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FLC HOLDINGS PLC
Managing Director / CEO’s Review
On behalf of the Board of Directors I have pleasure in presenting
the performance review of your Company and the Group for the
st
year ended 31 March 2013.
AGRICULTURE
Tea
The national tea production of the calendar year 2012 recorded a
marginal drop due to the adverse weather conditions that
prevailed in the first half of the year. The national tea production
in High Grown region was down by 7% compared to the last
year. The tea prices at the Colombo Auction in all three
elevations improved during the calendar year 2012 by 8.79%.
The shortage of global black tea supply helped significantly for
the increase in tea prices.
The Group manages 7,346 hectares of Tea in bearing and 236
hectares under immature with a total extent of 7,582 hectares of
tea located in thirty three estates. The Group’s annual Tea
production recorded a growth of 4% despite difficult growing
conditions experienced with extreme weather fluctuations while
the average tea prices derived from sale of Orthodox and CTC
teas increased by 16.69% over the last year. The current year’s
turnover of tea which represents 77.70% of the Group’s total
turnover surpassed last year’s turnover impressively by Rs.
855,111,360/-. Despite the increase in input cost the Group was
able to contain its cost with a very marginal increase of 1.30%
over the last year. The contribution to the Group’s gross profits
by the tea segment has significantly improved by Rs.
624,642,700/- over the last year’s comparatives. The Group has
invested Rs. 111,100,410/- in new/re planting of Tea during the
year compared to Rs. 134,949,309/- in the previous year.
Ceylon Estate Teas (Pvt) Ltd (CETL), a tea marketing company
commenced its operations in 2009, joined the Group as a sub
subsidiary during the current year. CETL established a range of
products through its strategic partners, agents and
representatives catering largely to the overseas market over a
short period of time. With experience and marketing expertise of
CETL the Group will be able to concentrate focusing on a wide
portfolio of products within the Group.
The increase in daily wage for plantation workers granted under
the Collective Agreement signed with major Trade Unions
st
effective from 01 April 2013 is expected to have a substantial
impact on the profitability of the plantation sector of the Group
in the years ahead. The Group maintains industrial relations,
encourages cordial relationships with all the Trade Unions and
did not report any material issues pertaining to its employees and
industrial relations during the year under review.
In compliance with the Sri Lanka Accounting Standard, LKAS
41, Agriculture the Group has adopted a cost model for tea using
LKAS 16, Property, Plant & Equipment due to the
impracticability of carrying out a proper fair valuation for the tea
crop.
Rubber
The national rubber production of the calendar year 2012
recorded a decline by 3.90% against the previous year
consequent to the reduction in tapping days due to unfavorable
weather conditions and in response to the drop in prices of
natural rubber. The domestic consumption of natural rubber
reduced by 1.50% over the previous year due to less demand
from industries involved in exports. Significant drop in rubber
prices were noted at the Rubber Auction compared with the
previous year.
The Group was able to produce 3,336,210 kgs of rubber during
the year compared with 3,492,787 kgs in the last year and
recorded a drop of 4.48% in production. However, Maturata
Plantations Ltd, a sub subsidiary of the Group recorded the
highest yield per hectare of 1,230 kgs amongst all Regional
Plantation Companies. The decline in rubber prices was mainly
due to weak global market conditions. The Group’s Rubber
turnover has declined significantly by 21.26% consequent to the
drop in production and prices over the last year. The contribution
to the Group’s gross profits by the rubber sector over the last year
has declined by 34.00%.
The Group manufactures and sells variety of rubber such as sole
crepe, latex crepe, RSS, UFUB and raw latex in different grades
to optimize sale averages in volatile market conditions.
Pussellawa Plantations Ltd, a sub subsidiary of the Group
achieved two awards at the National Plantation Awards
Ceremony - 2012 under the patronage of His Excellency the
President Hon. Mahinda Rajapakse for the Highest Rate of
Replanting and Highest Crop Productivity of Rubber of
Regional Plantation Companies (RPC) Sector.
The Group claims for 3,220 hectares of Rubber in bearing and
another 2,633 hectares under immature with a total area of 5,853
hectares in Rubber. Both Plantation Companies of the Group are
continuing to expand its rubber cultivation extent by undertaking
rubber new planting and re-planting programs. The investment
made in new/re planting of rubber during the year under review
amounted to Rs. 389,489,725/- as against Rs. 359,868,491/incurred last year. The Group adopted fair value model for
rubber plantations in compliance with LKAS 41 - Agriculture
and recorded a gain of Rs. 107,233,447/- for the year under
review.
Timber
Group has continued its eco-friendly activities despite a set back
in the commercial timber planting programmes, hampered by
the delay in obtaining harvesting approvals as scheduled due to
the lengthy and time consuming procedures to be followed for
obtaining harvesting approval. According to the new procedures
laid down by the authorities, it has to follow 4 stages involving
number of institutions including Plantation Management
Monitoring Division (PMMD) of the Ministry of Plantation
Industries (MPI), Forest Department (FD), Divisional Secretary
of the area, Central Environmental Authority (CEA) and District
Environmental Committee.
07
FLC HOLDINGS PLC
Managing Director / CEO’s Review CONTD
Although replanting programs were delayed as a result of delay
in clearing lands, Estates have planted marginal and under
utilized lands with commercial Timber species such as
Eucalyptus grandis and Eucalyptus microcorys which will yield
long term financial benefits. These two species, due to their fast
growing habit and excellent properties as construction timber are
gaining popularity in the local timber market competing with
imported timber species. They have been grown over a period of
time in upcountry Estates of both Maturata and Pussellawa
Plantations Ltd which will generate a healthy asset value to the
Group since prices of construction timber is increasing with the
construction boom of the country.
In addition to the commercial timber planting programs, Estates
have continued their efforts of safeguarding and restoration of
Water Sheds by undertaking various programs such as planting
Bamboo on stream banks and water sheds as well as undertaking
recommended soil conservation methods to arrest soil erosion.
The Consumable Biological Assets of the Group which
represents timber in two plantation companies namely Maturata
and Pussellawa Plantations Ltd has been fair valued and
recorded a gain of Rs. 199,489,062/- for the year under review.
Its carrying value as at 31st March 2013 amounted to Rs.
5,742,386,263/-.
Hydro Power
The demand for Energy is on the increase year on year with the
rapid development programs of the country. The Group is
exploring all the possibilities to utilize water resources available
within the Group as a priority. Prolonged drought conditions
prevailed particularly in the second quarter of the financial year
limited the Group’s hydro power generation of the two plants
with an installed capacity of 1.60 Mw each at Sanquhar and
Delta than anticipated. The Group has recorded a gross loss of
Rs. 11,626,602/- for the year compared with a gross profit of Rs.
11,129,032/- in the last year which is mainly due to the reduction
of tariff rate by the Ceylon Electricity Board in the current year
by 7%.
The Group expects to commission two more Mini Hydro Power
Plants in the second half of next financial year 2013/14 with an
installed capacity of 0.94 Mw and 0.83 Mw in Pussellawa and
Kuruwita respectively. Another seven Mini Hydro Power
Projects having a total anticipated power generation capacity of
7.45 Mw are progressing at various stages in obtaining approvals
and sorting out issues with respective Governmental Authorities
and Parties. The Group together with other renewable energy
developers is presently lobbying with Sustainable Energy
Authority and also with the Ministry of Power & Energy to
address the issues being encountered in the approval process.
The balance IPO funds allocated for the seven Hydro Power
Projects amounting to Rs. 585.87 Mn as at 31st March 2013 have
been invested in short term deposits and the Group will continue
such deposits until its intended utilization.
08
Tourism & Leisure
The Tea Leaf Resort Holdings (Pvt) Ltd, a Joint Venture
Company of the Group was initially formed to undertake the
development of two boutique style hotels in estates of
Pussellawa Plantations Ltd namely Geragama in Kandy and Ayr
Estate in Padukka.
In respect of the proposed boutique style hotel at Geragama,
Kandy, the preliminary scoping meeting for granting
environmental clearance was held and the views of the relevant
institutions have been called for the preparation of Terms of
Reference based on which the Environment Impact Assessment
(EIA) Report will be prepared for the approval of the Central
Environmental Authority.
The hotel project at Ayr Estate, Padukka has been proved
financially less attractive and alternatively the Group is looking
for a more suitable location with a better return on investment.
The balance IPO funds allocated for the above mentioned two
projects amounting to Rs. 243,904,460/- are in short term
deposits as at 31st March 2013.
Commercial Building Complex
The Company has invested Rs. 541,414,263/- for the
construction of a multi storeyed office complex located at No.
19, Dudley Senanayake Mawatha, Colombo 08 as at 31st March
2013 through its fully owned subsidiary of F L C Properties (Pvt)
Ltd (FLCPL). The investment by the Company for the
Commercial Building Complex through its subsidiary will be
limited to Rs. 600,000,000/- in the form of ordinary shares in
FLCPL. The balance funding requirement for the project will be
raised by Bank borrowings. Apart from the delay in obtaining the
Development Permit from the Colombo Municipal Council for
12 storeyed (G+11) Building, the progress of the construction
also got significantly affected than anticipated due to its prime
location in the city centre limiting the construction working
hours mostly to be within the day-time period. Having
considered the provisions given in the Revised Regulations
approved by the Planning Committee of the Urban Development
Authority (UDA), UDA granted approval for an additional floor
to the approved plan. In compliance with the requirements of Sri
Lanka Accounting Standard LKAS 40, FLCPL has fair valued its
investment Property representing the land with an extent of
49.50 perches for Rs. 272,000,000/- as at 31st March 2013 and
recorded a gain of Rs. 90,326,000/- for the current year. The cost
of construction of multi storeyed office complex in progress as at
31st March 2013 was Rs. 293,052,016/-. FLCPL is confident to
commence its commercial operations in the last quarter of the
current year and to be within the Project Implementation Period
in compliance with the conditions stipulated in the Agreement
entered into with the Board of Investment of Sri Lanka. FLCPL
qualifies for a tax holiday of seven years in terms of Gazette
Extraordinary No. 1708/34 dated 03rd June 2011 under Section
17A of the Inland Revenue Act. No 10 of 2006.
FLC HOLDINGS PLC
Managing Director / CEO’s Review CONTD
FINANCIAL PERFORMANCE
Company
During the year the Company has released Rs. 184,317,418/towards the construction of Office Complex Building through its
fully owned subsidiary of F L C Properties (Pvt) Ltd. The total
amount of short term deposits including unutilized IPO funds as
at 31st March 2013 amounted to Rs. 1,117,906,526/-.
The revenue received as dividends from subsidiaries for the year
under review was Rs. 93,500,000/- against Rs. 67,649,999/- in
the last year. The interest income earned on the short term
deposits during the year increased by Rs. 69,245,244/- to Rs.
199,043,852/-. The Company has recorded a total
comprehensive income of Rs. 221,761,383/- for the year ended
31st March 2013 compared to Rs. 153,584,431/- in the last year.
In addition to the payment of first & final dividend of Rs. 0/05
per Ordinary Share for the year 2011/12 approved at the last
Annual General Meeting, the Directors of the Company
recommended and declared an interim dividend of Rs. 0/15 per
Ordinary Share in the month of March 2013 out of profits as
detailed in the Note 12.2 to the financial statements.
The fair value model adopted by the Group for the investment
properties and biological assets contributed positively for the
Group’s profitability for the year. The Group recorded a total
comprehensive income of Rs. 954,128,700/- for the year ended
31st March 2013 against Rs. 429,201,972/- in the previous year.
The basic earnings per ordinary share for the current year
improved significantly to Rs. 0/406 from Rs. 0/034 in the last
year.
I wish to place on record my sincere appreciation to all the
stakeholders of the group for their support and understanding
and also for all the members of the Board for their valuable
guidance extended during the year.
G A Aloysius
Managing Director/ Chief Executive Officer
22nd August 2013
Colombo
Group
The group’s revenue recorded an overall increase mainly due to
the improved tea prices and also its production volume over the
last year. The gross profits earned from tea during the year was
Rs. 363,353,816/-. However, rubber plantations could not
perform well during the current year due to the drop in rubber
prices and decline in the production as a result of unfavorable
weather conditions. Hydro Power sector was able to generate
5,382,940 kWh during the year which is almost similar to that of
the previous year. Nevertheless, hydro power sector recorded a
negative result at the gross profits level after having written off a
drastic reduction in the value of the Carbon Credit Unit.
09
FLC HOLDINGS PLC
Board of Directors
Mr. K Aloysius
Mr. G A Aloysius
Chairman
Non Executive Director
Managing Director / CEO
Executive Director
Mr. K Aloysius is the founder and Chairman of Free Lanka Group
of Companies. His business career spans over 60 years and
continues to contribute in an executive capacity towards various
Subsidiaries of the Group. Apart from F L C Holdings PLC, he is
also the Chairman of Pussellawa Plantations Ltd., Maturata
Plantations Ltd., Free Lanka Management Co. (Pvt) Ltd., Free
Lanka Plantations Co. (Pvt) Ltd., F L C Hydro Power PLC,
Thebuwana Hydro Power (Pvt) Ltd., Stellenberg Hydro Power
(Pvt) Ltd. and F L C Properties (Pvt) Ltd.
Mr. G A Aloysius started his career in 1995 as a Director of Free
Lanka Group and presently he is the Deputy Chairman of
Pussellawa Plantations Ltd. and Free Lanka Management Co.
(Pvt) Ltd. He is the Joint Managing Director of Free Lanka
Plantations Co. (Pvt) Ltd. and Melfort Green Teas (Pvt) Ltd. and
the Managing Director/CEO of F L C Hydro Power PLC. He is
serving on the Board of a number of Subsidiary Companies of the
Group.
He is the immediate past Chairman of Ceylon Oxygen PLC before
the divesture of Norsk Hydro and is a Board Director of Ceylon
Agro Industries, a subsidiary Company of Prima Singapore.
He holds a Bachelor’s Degree in Finance from Northeastern
University, Boston, Massachusetts and a MBA from Brunel
University, West London.
Mr. K Aloysius's interest to develop the Mini Hydro Power
potential in the plantation sector began shortly after the Group
succeeded in getting the managing rights for Pussellawa
Plantations Ltd. in 1992. He is also partly responsible for making F
L C Hydro Power PLC, one of the few Mini Hydro Companies to
be accredited for Carbon Credits (CDM) under the UNFCCC
Scheme.
Mr. G J Aloysius
Executive Director
Mr. G J Aloysius holds a BSc. in Business Administration (USA)
and started his career in 1981. He served as the Project Director for
Free Lanka Granite & Marbel Exports (Pvt) Ltd. Currently, Mr.
Aloysius is a Director of Pussellawa Plantations Ltd., F L C Hydro
Power PLC and serves as the Director Projects for Free Lanka
Trading Co. (Pvt) Ltd. & Free Lanka Granite (Pvt) Ltd. He is
serving on the Board of a number of subsidiary Companies of the
Group.
He counts over 32 years experience, of which 15 years have been
in the Plantation Sector.
10
FLC HOLDINGS PLC
Board of Directors CONTD.
Mr.Nanayakkara is focused on the immense opportunities
presented by the leisure sector. With the acquisitions of some of
the leading hotels in the Southern coast alongside key properties in
the North and East, development plans are underway for the
leisure subsidiaries of LOLC Group and Browns Group - Eden
Hotel Lanka PLC, Palm Garden Hotels PLC, Tropical Villas Pvt
Ltd, Riverina Resorts Pvt Ltd and Dickwella Resorts Pvt Ltd,
Samudra Beach Resort in Kosgoda and Green Paradaise Agri Eco
Hotel in Dambulla.
Mr. I C Nanayakkara
Executive Director
Mr. Ishara Nanayakkara is an astute businessman who holds
Directorial positions in many corporates and conglomerates in Sri
Lanka.
He ventured into the arena of financial services with the strategic
investment in LOLC PLC and was appointed to the Board in 2002.
He has an exposure to an array of financial services through his
stewardship in two flagship finance companies in the group –
Lanka ORIX Finance PLC and Commercial Leasing and Finance
PLC (CLC) where he is involved as an Executive Director and
Chairman respectively.
Mr.Nanayakkara is the Executive Chairman of Brown and
Company PLC, the holding company of Browns Group, a
conglomerate with leading market position in trade, leisure,
manufacturing, consumer appliances and agriculture equipment.
He is also the Chairman of Browns Investments PLC, the
investing arm of the Browns Group. Mr. Nanayakkara’s
involvement in multifaceted business fields is conclusive proof of
his perpetual interest on the growth sectors of the Sri Lankan
economy.
He holds a Diploma in Business Accounting from Australia.
He is also involved in both life and general insurance through
LOLC Insurance Company and in stock broking through LOLC
Securities Company, factoring through LOLC Factors and deeply
involved in micro finance and Islamic finance. He is recently
appointed as the Deputy Chairman of Seylan Bank, reinstating his
expertise in the banking sector.
His interest in Micro Finance is evident through his recurrent
contribution to PRASAC, the largest microfinance Company in
Cambodia and in his own initiative, LOLC Micro Credit Ltd, one
of the largest private sector microfinance institutions in Sri Lanka,
where he currently serves as the Chairman. This commitment is
further extended through his newest venture in LOLC Myanmar
Micro Finance Company Ltd, where he is the founding chairman.
He was instrumental in the recent joint venture of BRAC and
LOLC.
His passion for Renewable energy is reflected through the energy
portfolio of the LOLC Group - comprising of hydro power, agri
waste and bio- mass – a promising source of alternate energy. The
sustainable investments of the LOLC Group companies are poised
to offer their share to the environment.
Mr Nanayakkara is also conversant in sustainable Forestry and
Plantation through group companies - Maturata, Pussellawa and
Gal Oya Plantations. The Agstar Fertilizers Ltd, a leading agri
input provider in the country, has further enhanced the Group’s
contribution to the agriculture & plantation sectors.
The participation in Sierra Constructions Pvt Ltd, one of the
largest construction companies in the country is timely,
considering the contribution of the construction sector to the post
war development.
Mr. J M S de Mel
Executive Director
Mr. Manik de Mel is a Fellow of the Institute of Chartered
Management Accountants, UK and holds a MBA from the Post
Graduate Institute of Management [ PIM ] of the University of Sri
Jayawardenapura.
Mr. de Mel functioned as the Finance Director of Sri Lanka State
Plantations Corporation and Janatha Estates Development Board
[JEDB] prior to privatization of state owned plantations. He
joined the Free Lanka Group in 1992 and has held several key
positions, initially as the Finance Director and thereafter as the
Managing Director / CEO of Pussellawa Plantations Ltd.
Currently Mr. de Mel is the Managing Director of Maturata
Plantations Ltd. and Free Lanka Management Co. (Pvt) Ltd., the
Jt. Managing Director of Free Lanka Plantations Co. (Pvt) Ltd.
and a Director of Pussellawa Plantations Ltd. and F L C Hydro
Power PLC. He is serving on the Board of a number of
subsidiaries in the Group. In addition, he functions as the Finance
Director of the Free Lanka Group.
11
FLC HOLDINGS PLC
Mr. Murali Prakash
Mr. P R Saldin
Mr. Prakash holds a MBA from University of Southern
Queensland and is also a Certified Professional Marketer (Asia
Pacific) and a Certified Management Accountant (Aust.). He also
holds an Executive Diploma in Business Administration from the
University of Colombo and is an Alumni of National University of
Singapore & Asian Institute of Management, Manila. He is a
Fellow of Chartered Management Institute (London) and
Certified Professional Managers Sri Lanka.
Mr. Rimoe Saldin is a Fellow of the Institute of Chartered
Accountants of Sri Lanka. He is also a Fellow of the Chartered
Institute of Management Accountants in the United Kingdom and
a Certified Management Accountant, Australia. He is an Alumni
of the Asian Institute of Management, Manila.
He served as the Sales Director for Singer (Sri Lanka) PLC, a
multinational company involved in retailing of durables. Mr.
Prakash has also served as the Deputy Credit Director and Credit
Manager for many years handling the marketing and management
of hire purchase and related credit portfolios at Singer. He also
served in the Boards of Singer (Sri Lanka) Ltd, Singer Finance
Lanka Ltd and Singer Industries (Ceylon) Ltd.
At Present, he is the Chairman of Galoya Holdings (Pvt) Ltd,
having served as the Group Managing Director / Chief Executive
Officer of Browns Group of Companies, a public quoted
conglomerate involved in trading, manufacturing, finance, travel
& tours, plantations and investments until July 2013.
He has over 20 years of experience at top management level in the
areas of Finance, Human Resource Development, General
Management and Operations.
Presently Mr. Saldin serves as the Group Chief Operating Officer
of the Browns Group of Companies and Director/Chief Executive
Officer of Browns Investments PLC. He also serves on the Board
of Directors of a number of listed and unlisted companies.
He was previously Country Controller for Royal Dutch Shell in
Sri Lanka and Finance Director of Shell Gas Lanka Ltd and Shell
Terminal Lanka Ltd. Mr. Saldin also served as Group Finance
Director and Commercial Director of CIC Holdings PLC. He also
served on the Board of Directors of number of listed and unlisted
companies in CIC Group.
Mr. Amarasekera is a member of the Institute of Chartered
Accountants of Sri Lanka and is an Attorney-at-Law of the
Supreme Court of Sri Lanka. He also holds a degree in Business
Administration from the University of Sri Jayawardenapura and
began his career in the year 1998.
12
Mr. Amarasekera is an eminent Tax Consultant and the Senior Tax
and Legal Partner of Amarasekera & Company, a leading tax
consultancy firm in the country. He is serving on the Board of a
number of listed companies including Kelani Tyres PLC, Browns
Investments PLC, F L C Hydro Power PLC, Lanka Milk Foods
(CWE) PLC, Madulsima Plantations PLC, Balangoda Plantations
PLC, Eden Hotel Lanka PLC, Confifi Hotel Holdings PLC, Palm
Garden Hotels PLC, Environmental Resource PLC, etc.
FLC HOLDINGS PLC
Mr. A I Fernando
Mr. D C Wimalasena
Mr. Fernando is a Professional Accountant in Business and has
several years of experience in business and profession. He was
President ICA Sri Lanka (2004/2005), Member of International
Federation of Accountant (IFAC) Developing Nations Committee
(2006/2007), President-South Asian Federation of Accountants (2007), Advisor/ Chairman-SAFA Committee on improving
Transparency, Accountability and Governance (CiTAG),
President - Confederation of SAARC Apex Bodies of Sri Lanka
2009/2012.
Mr. Wimalasena is a Graduate of the University of Ceylon. He
served as the Chairman at Ceylon Petroleum Corporation, Lanka
Tankers, Colombo Gas & Water Co. and Lanka Marine Services.
He previously served on the Board of Pussellawa Plantations Ltd,
Maturata Plantations Ltd, Free Lanka Management Co. (Pvt) Ltd
and Free Lanka Plantations Co. (Pvt) Ltd.
He is a fellow member of the ICA‐SL and CIMA-UK; MBA
holder-US-Australia; Fellow-member of CMA-Sri Lanka; Senior
Member-CPA-Maldives; Member of CISI, serves The Advisory
Committee member of Sri Lanka; serves as a Non-Executive
Director, Chairman of the Audit Committee and the Integrated
Risk Management Committee of several companies.
He is the Managing Director and Chief Executive Officer of
Bartleet Trans Capital Ltd. In addition, he serves on the Board of
Bartleet Finance Ltd., Strategic Research Ltd., and Stromme
Microfinance Asia (Guarantee) Ltd. He also serves in several
statutory committees of companies listed in the CSE including
Audit and Risk.
13
FLC HOLDINGS PLC
Human Resource
The company continues to focus on its most valuable asset - HR.
Continuous learning and development within the group at all
levels has been a closely monitored and evaluated and the
management continues to emphasize on training. So has been the
focus on the welfare of the employees. A happy mind in the
working environment is necessary to keep the productivity up to
reach the demanding goals set forth by the management.
Training and Development
Continuous education, development of skills and innovative
capabilities to maintain competitiveness in the respective
industrial sectors of our employees is considered fundamental.
Our group recognized good agricultural practices, quality
manufacturing in compliance with food safety requirements, on
leadership and teamwork. We recognize that the assurance of
safety at the work places is prerequisite.

Recognition of employees commitment/ achievements and
rewarding them

Respect them

Provision of welfare activities, medical, Housing, sanitary
facilities and maintenance of those activities

Industrial peace

Improvement of living standards

Due attention for employees issues & providing solutions

Provided scholarships for employees’ children
Health and Welfare
The health and welfare of the employees are of paramount
importance to achieve the sustainable productivity in particular
in the plantation sector of the group. The group allocated
reasonable amount of funds for the wellbeing of the employees
to improve and increase their living standard. The Group
continued its Social Welfare activities and on worker amenities.
14
FLC HOLDINGS PLC
The Board of Directors is committed to upholding the highest
standards of business integrity, transparency, accountability and
professional ethics as the good corporate governance practices
towards rewarding all its stakeholders with greater creation of
values within the Group. Directors and employees of the Group
at all levels are expected to display ethical and transparent
behavior through their communication and role modeling in
keeping with acceptable business practices.
The Board ensures the compliance with the Code of Best
practices on Corporate Governance issued by the Institute of
Chartered Accountants of Sri Lanka and the Listing Rules of the
Colombo Stock Exchange on Corporate Governance.
Our Corporate Governance framework which has been
effectively communicated to all levels of management and staff
in the performance of their official duties are set out below.
The Board of Directors
Composition and Independence
The present Board of Directors comprise of ten Directors
including the Chairman as follows;

04 Executive Directors

04 Non Executive Directors

02 Independent, Non Executive Directors
The details of Company’s directors and their capacity are given
in the Board of Directors Report on pages 10 to 13.
The Board comprises Directors with varied experience and
skills. The Profiles of the Chairman and each Director served in
the Board during the year, with their experience in businesses
and professionalism is set out in pages 10 to 13 Independence of
the Directors have been determined in terms of the prevailing
CSE listing rules and the Code of Best Practice on Corporate
Governance issued jointly by the Securities and Exchange
Commission of Sri Lanka and the Institute of Chartered
Accountants of Sri Lanka. The two Independent, Non Executive
members have submitted signed confirmations of their
independence.
Apart from the determination of independence, each director has
a continuing responsibility to determine whether he or she has a
potential or actual conflict of interest arising from external
associations, interests or personal relationships in material
matters. All directors make a formal declaration of all their
interests on an annual basis.
The Board of Directors is accountable to the shareholders for the
governance of the company. All the directors are accountable for
the proper stewardship of the company’s affairs and share a
responsibility in ensuring the highest standards of disclosure and
reporting, ethics and integrity across the Group.
All the Directors have access to the Company Secretaries/
Registrar, SSP Corporate Services (Pvt) Ltd who are responsible
to the Board in ensuring that the proper Board procedures are
followed and that applicable rules and regulations are complied
with.
Board Meetings
Annually four Board Meetings are scheduled for the following
purposes;

Review strategic and operational issues

Approve interim and annual financial statements of the
Company and the Group recommended by the Audit
Committee

Sanction material investments

Adopt annual report before they are circulated
In addition, ad-hoc meetings are scheduled to discuss and review
specific matters.
Re-appointment and Re-election of Directors
The Articles of Association of the Company provides the basis of
Directors to retire at each Annual General meeting. Accordingly
and also in compliance with the Companies Act No. 07 of 2007,
the names of Directors submitted for re-appoint and re-election
are given in the Agenda of the Annual General Meeting on page
105.
Audit Committee
The composition of committee is as follows;
Mr. A I Fernando
Chairman
Independent, Non Executive Director
Mr. D C Wimalasena
Independent, Non Executive Director
The Committee invites the Directors of the Company and Senior
Managers of the Group to be present at the meeting when
necessary. The Chief Financial Officer of the Company
functions as the Secretary to the Committee.
The Audit Committee Meetings are held every quarter of the
year.
The committee members together with the invitees meet with the
Group’s External Auditors to discuss matters in relation to the
scope and significant matters arising from the group audits for
the year. The terms of reference of the Audit Committee are
available in the Company’s web site.
Audit Committee report is available on page 22 and the
Independent Auditors’ report is given on page 24.
15
FLC HOLDINGS PLC
Corporate Governance CONTD.
Remuneration Committee
The Remuneration Committee consists of two independent, Non
executive directors as follows;
Mr. A I Fernando
(Independent, Non Executive Director)
Chairman
Mr. D C Wimalasena
(Independent, Non executive Director)
The Secretary of the Company shall function as the secretary to
the Remuneration Committee. The Chief Executive Officer of
the Company shall be invited to attend meetings and shall be
consulted on the performance and remuneration of executive
directors.
The Remuneration Committee report is available on page 22.
Internal Controls
The Board has established effective internal control systems to
safeguard the Company’s assets. The Company has appointed
M/s. SJMS Associates, Chartered Accountants, as the Group’s
Internal Auditors to review and report the adequacy and the
effectiveness of the internal controls in order to strengthen the
systems and controls of the Group.
Report to the Shareholders & Public
The Board considers the Annual General Meeting as a prime
opportunity to communicate with shareholders and encourage
their participation. A Form of Proxy accompanies each Notice of
Meetings giving opportunity to those who are unable to attend, to
cast their vote.
The Company published through the Colombo Stock Exchange
and its company’s web site the Quarterly Interim and Annual
Financial Statements as its principal communications with
shareholders and others enabling the stakeholders to make a
rational judgment of the Company and the Group.
The directors have taken all reasonable steps in ensuring the
accuracy and timeliness of published information and in
presenting an honest and balanced assessment of results in the
interim and annual financial statements. The Notice of the
Annual General Meeting and the relevant documents are
published and dispatched to the shareholders fifteen working
days prior to the meeting as required by the Companies Act No. 7
of 2007.
Going concern and Financial Reporting
The directors are satisfied that the company has sufficient
resources to continue in operation for the foreseeable future. The
company has adopted the going concern principle in preparing
the financial statements. All statutory and material declarations
are highlighted in the Directors' Report.
16
The Board ensures that the quarterly and annual Financial
Statements of the Company are prepared and published in
compliance with the requirements of the Companies Act No. 7 of
2007, Sri Lanka Accounting Standards and Colombo Stock
Exchange.
The statement of Directors’ Responsibilities in relation to
financial reporting is given on page 23. The directors’ interests in
contracts of the company are disclosed in note 43 to the Financial
Statements.
Major Transactions
There were no major transactions during the year as defined by
Section 185 of the Companies Act No. 07 of 2007 which
materially affect the net asset base of the Company or Group.
Corporate Social Responsibilities
The Group recognizes sensitively the need to look after the rights
and claims of non-shareholder groups such as employees,
consumers, suppliers, lenders, government etc. The Group is
mindful when making corporate decisions, of the outcome
affecting the stakeholder groups.
We consider the natural environment as one of the key and
important stakeholders and make deliberate efforts to take care
of it in the best possible manner. Taking care of the natural
environment is the foundation on which the Group is built on.
Our business units including the plantations, tea and rubber
manufacturing, boutique hotels and hydro power generation
adhere to stringent eco-friendly practices which ensure outputs
that contribute towards a sustainable environment.
FLC HOLDINGS PLC
Risk Management
Our group, a diversified group operating within Sri Lanka is
exposed to variety of risks by the nature of respective business.
The risk associated with business activities can not be eliminated
completely. The group through a risks management process
identifies key risks facing the group. The group recognizes the
complexity and the diversity of risks that surrounds its
operational activities to maximize opportunities within an
effective risk management process in the effort to optimize use
of available capital.
The identified principal risks associated within the group in
order to enhance the value of shareholder investment and
safeguarding assets are set out below;
TYPE OF RISK AND ITS EFFECT
STRATEGIES AND MITIGATING ACTIONS
Environmental Risk
Investments in Biological Assets are exposed to high risks with
the changes in weather patterns. Unfavorable weather has a
direct impact on the agricultural production and survival of
immature plants.

Adoption of accepted agricultural practices depending on
the circumstance in order to minimize adverse impacts.

The
threat of damages caused by natural disasters will be
mitigated to some extent by insurance covers.
Extreme weather conditions such as prolonged droughts and
natural disasters are detrimental to hydro power generation.
Land Acquisition Risk
Two Plantations companies in the group are exposed to the risk
of leasehold land being acquired for Public purpose and also revesting.

Discuss and negotiate with the relevant authorizes to solve
the issues amicably. Undertake cultivation in bear lands with
suitable crops. Claim of compensations and follow up.

Effective working capital management
Interest Rate Risk
Impacts the group earnings and investment decisions due to
unexpected changes.

Optimize output in financially productive areas.

Effective management of borrowings.

Draw up Forestry Management Plan in compliance with new
Legal & Regulatory Risk
Changes in regulation by Environmental Authorities on forestry
resources affect the future programmes on planting and
harvesting.
rules and regulations.

Concentrate timber planting in areas where restrictions are
unlikely to be imposed.

Environmentally sensitive areas will be planted with species
having less restrictions for harvesting.
Liquidity Risk
Inadequate funds would lead to resorting to costly funding
alternatives.

Effective working capital management.
Affects daily operational activities.
Inability to meet statutory requirements.

Focus on highly financially productive areas of operations.

Capitalize on group’s synergy.

Minimize dependence on external lenders.
17
FLC HOLDINGS PLC
Risk Management CONTD.
Credit Risk
Possibility of loss of funds owing to default by debtors or
substantial delay in receiving funds.
Most of the agricultural produces are sold through the

Brokers who guarantee the payment within a stipulated time
period.
Credit risks are assessed effectively.

Bank/Corporate guarantees are obtained.

Introduction of “retention” policy.

Hydro Power is based on the standard Power Purchase

Agreements signed with CEB.
Investment Risk
Unexpected cost overruns due to increase in input costs.
Profitability and funds of the group.
Credit ratings are monitored in respect of deposits.

Diversify deposits to minimize possible losses.

Carry out financial analysis in depth if necessary with the

assistance of experts, with realistic assumptions prior to
investments.
Monitor the progress of projects periodically in regard to the

budget and time limits.
IT Risk
Dependence on MIS & Monthly Financials.
Loss of data.
Unauthorized access.
Inadequacy of technology
Introduction of back up procedures.

Implement and monitor access control policy.

Upgrade technology/Invest in hardware.

Worker availability risk
Loss of workers due to retirement and migration.
Social Stigma.
Frequent absentees.
Carry out identified social & welfare programs with a view

to retain workers.
Undertake continuous training & awareness programs to

improve productivity and skill.
Mechanize all the possible activities.

Encourage incentives on attendance.

18
FLC HOLDINGS PLC
Directors' Report
ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE GROUP & COMPANY
The Board of Directors of F L C Holdings PLC have the pleasure
of submitting their report together with the audited consolidated
financial statements for the year ended 31st March 2013 and the
Auditors’ Report thereon to the members of the Company.
The details set out herein provide the pertinent information
required by the Companies Act No. 7 of 2007, Listing Rules of
the Colombo Stock Exchange and recommended best
accounting practices.
Principal Activities
F L C Holdings PLC is a diversified holding company that has
interests in the Plantation sector, Power sector, Leisure sector
and Real estate sector through its Subsidiaries, Joint Ventures,
Associates and Sub Subsidiary Companies. The principal
activities of the Companies within the Group are contained in the
Managing Director/CEO’s Review on pages 07 to 09 of the
Annual Report.
There have been no significant changes in the nature of the
activities of the Group and the Company during the financial
year under review.
The Financial Highlights and Historical Financial Information
for the last five years of the Group are available on page 03 and
on page 99 respectively.
Revenue
The Revenue of the Company and Group improved during the
year by Rs. 25,850,001/- and Rs. 523,900,320/- respectively
compared with the last year.
The details of the contribution to Group revenue from different
business segments with the comparative figures are provided in
Note 4.1 to the financial statements on page 85.
Gross Profit
The Group recorded a significant improvement in the current
year’s Gross Profits by Rs. 371,665,608/- over the last year.
Investments by the Group
The details of Capital Expenditure of the Group during the year
are available in Notes 15(b), 15(c), 16 & 17 to the financial
statements.
Investments by the Company
The Company has invested the balance IPO funds in short term
deposits and marketable equity securities. The details are
available in Notes, 26 and 27 to the financial statements.
Market Value of Investment Property
The Investment Property represents the land value of 49.50
perches recorded at fair value carried out by an independent
valuer as detailed in Note 14 to the financial statements.
The cost of construction of the Office Complex in progress has
been classified under Property, Plant and Equipment under Note
15(c) 1.
Stated Capital
The Stated Capital of the Company as at 31st March 2013
amounting to Rs. 2,568,000,000/- consists of 1,368,000,000
Ordinary Shares. There was no change in the Stated Capital of
the Company during the year under review.
Utilization of IPO Funds
The Company has not changed its objective of utilizing the
proceeds of the Initial Public Offer as mentioned in the
Prospectus.
The current progress of the Projects is described in the Managing
Director/CEO’s Review.
Reserves
The total Group reserves as at 31st March 2013 amounted to
Rs.6,432,337,842/- (last year - Rs.6,183,761,901/-). The
movements & composition of reserves is detailed in the
Statement of Changes in Equity.
Taxation
The Company has provided Rs.49,638,491/- for income taxes
(last year Rs.28,169,411/-) and the Group has provided Rs.
161,919,655/- (last year Rs.105,689,247/-). The details are given
in Note 10 to the financial statements.
Shareholdings/Share Information
An analysis of shareholders based on shares held, the
distribution of ownership category, shareholdings of Directors
and the list of top twenty shareholders together with the last
year’s comparatives are provided on pages100 and 101.
Events after the Financial Position Date
Subsequent to the Financial Position Date, no circumstances
have arisen that require adjustments to or disclosures in the
financial statements other than matters disclosed in Note 40.
Contingent Liabilities
The details of contingent liabilities are given in Note 41 to the
Financial Statements.
The Corporate Governance practice followed by the Group is set
out in the Corporate Governance Statement on pages 15 to 16.
19
FLC HOLDINGS PLC
Directors' Report CONTD.
Group Internal Auditors
SJMS Associates, Chartered Accountants functions as the
Group’s Internal Auditors providing independent assurance on
the overall system of internal controls and in recommending
policies and procedures of the Group.
2012/13
Rs.
2011/12
Rs.
Profits before Taxation
271,399,874
181,753,842
Board Committees
Less: Taxation
(49,638,491)
(28,169,411)
Audit Committee
The following members serve on the Audit Committee:

Mr. A I Fernando - Chairman

Mr. D C Wimalasena

Profit for the year
221,761,383
153,584,431
Retained earnings brought
forward
155,217,754
1,633,323
Profits before distribution &
transfers
376,979,137
155,217,754
(273,600,000)
-
103,379,137
155,217,754
The report of the Audit Committee is given on page 22 of the
Annual Report.
The members of the Remuneration Committee are as follows;

Mr. A I Fernando - Chairman

Mr. D C Wimalasena
The report of the Remuneration Committee is given on page 22
of the Annual Report.
Going Concern
The Directors, after making necessary inquiries and reviews
have a reasonable expectation that the Company has adequate
resources to continue for the foreseeable future. The “Going
Concern Basis” has been adopted in the preparation of the
Financial Results
The audited results of the Group and of the Company for the
financial year ended 31st March 2013 and its last year’s
comparatives are as follows;
For Group Shareholders
For the year ended
31st March
2012/13
Rs.
2011/12
Rs.
Profits before Taxation
1,151,442,739
467,438,422
Less: Taxation
(161,919,655)
(105,689,247)
Profit for the year from
Continuing Operations
989,523,084
361,749,175
Add/(Less); Other
Comprehensive Income
(35,394,384)
67,452,797
Total Comprehensive Income
954,128,700
429,201,972
Equity Holders of the Company
527,494,929
78,468,978
Non Controlling Interest
426,633,771
350,732,994
Total Comprehensive Income
attributable to:
20
For Company Shareholders
For the year ended
31st March
Dividends for the year
Retained earnings
carried forward
Accounting Policies
The Financial Statements for the year ended 31st March 2013 and
its comparatives have been prepared in accordance with the new
Sri Lanka Accounting Standards (SLFRS/LKAS) and in
compliance with the Companies Act No. 07 of 2007. The
explanatory notes of the transition from SLAS to SLFRS/LKAS
with its impact are provided in the Note 46.
Dividends
In addition to the final dividend of Rs. -/05 per ordinary share in
respect of the year ended 31st March 2012, the Company has paid
an interim dividend of Rs. 0/15 per ordinary share out of the
Retained earnings as at 31st March 2012 and also out of the
profits for the year ended 31st March 2013. Refer Note 12 to the
Financial Statements for more details. The Directors do not
recommend any further dividend for the year ended 31st March
2013.
Directorate
The names and resume of each Director who served as Directors
of the Company during the year under review are given in pages
10 to 13.
Resignation of Directors
Mr. I C Nanayakkara, an Executive Director has resigned from
the Board of Directors with effect from 31st December 2012.
Re-Election of Director
In accordance with the provisions of the Articles of Association
of the Company, the following members of the Board of
Directors of the Company retire by rotation and being eligible
offer themselves for re-election.

Mr. P R Saldin

Mr. G J Aloysius
FLC HOLDINGS PLC
Directors' Report CONTD.
In accordance with Section 210 of the Companies Act No. 7 of
2007 Mr. K Aloysius, Mr. D C Wimalasena and Mr. J M S de Mel
retire and offer themselves for re-election. Special notices have
been received pursuant to Section 145 and 211 of the Companies
Act No. 7 of 2007 of the intention to propose an ordinary
resolution for such re-elections notwithstanding the age limit of
70 years stipulated by Section 210 of the said Companies Act.
Directors’ Indemnity & Insurance
The Company has obtained a Directors’ and Officers’ Liability
insurance cover for its Directors and Officers. This Insurance
cover indemnifies the Directors to the extent permitted by Law
and the Articles of Association of the Company in respect of all
losses arising out of or in connection with the execution of their
powers, duties and responsibilities.
The Board of Directors’ commitments in maintaining effective
Corporate Governance Practices are described in the Corporate
Governance Report set out on pages 15 to 16.
The Audit Report is found in the financial report section of the
Annual Report. The involvements of the Audit Committee with
the work of the Auditors are set out in the Audit Committee
Report.
The fees paid to Auditors are disclosed in Note 9 to the Financial
Statements. As far as the Directors are aware, the Auditors do not
have any relationship with the Company or any of its
Subsidiaries other than that of an Auditor. The Auditors also do
not have any interest in the Company or any of its Group
Companies.
For and on behalf of the Board
Mr. G A Aloysius
Managing Director/CEO
Mr. J M S de Mel
Director
Remunerations of Directors
The remunerations paid to the Directors of the Company and its
Subsidiaries are disclosed in Note 9 to the financial statements.
The Company has paid Rs. 480,000/- during the year (Last year Rs. 520,000/-) as remunerations to Non Executive Directors.
Subsidiaries, Joint Ventures and Associate Companies and
its Directors
The Directors of Subsidiary, Joint Venture and Associate
Companies as at 31st March 2013 are given on page 102 of the
Annual Report.
S S P Corporate Services (Private) Ltd
Secretaries
22nd August 2013
Colombo
Annual Report
The Board of Directors approved the consolidated financial
statements on 3rd August 2013. The appropriate number of copies
of this report will be submitted to Colombo Stock Exchange and
to the Sri Lanka Accounting and Auditing Standards Monitoring
Board on or before 31st August 2013.
Annual General Meeting
The Fifth Annual General Meeting will be held on 26th
September 2013, at 10.30 a.m. at Park Premier Banquet Hall,
Excel World, No. 338, T.B. Jayah Mawatha, Colombo 10. The
Notice of Meeting appears on page 105.
Auditors
In accordance with Section 154(1) of the Companies Act No. 7 of
2007 a resolution for the appointment of Messrs. KPMG
Chartered Accountants as Auditors of the Company for the
ensuing year will be proposed at the Annual General Meeting. In
terms of Section 155(a) of the Companies Act No. 7 of 2007 a
resolution authorizing the Directors to fix the remuneration of
the Auditors Messrs. KPMG Chartered Accountants for the
ensuing year will be proposed at the Annual General Meeting.
21
FLC HOLDINGS PLC
Audit Committee Report & Remuneration Committee Report
AUDIT COMMITTEE REPORT
The Audit Committee of the Company formed in compliance
with the section 7.10 of CSE listing rules, functions as per the
terms of reference approved by the Board of Directors. The
terms of reference is available on the company’s website
www.freelankacapital.com
The composition of the committee is as follows;
Mr. A I Fernando
Chairman
Mr. D C Wimalasena
ACA, LLB, BA
The Managing Director, Other Directors and the Chief Financial
Officer attend meetings of the Committee by invitation. The
other Senior Managers, Group Internal Auditors and External
Auditors are requested to be present when required. The Chief
Financial Officer functions as the Secretary to the Committee.
Meetings
The Audit Committee had four meetings during the financial
year under review. The minutes of the Audit Committee are
circulated among the members of the Audit Committee.
The Committee assists the Board of the Company on fulfilling its
corporate governance and oversees responsibilities for the
system of internal control, internal audit processes, risk
management and monitor compliance with laws and regulations.
The Committee oversees the Consolidated Financial Reporting
on behalf of the Board of Directors as part of its responsibility
and reviews the Quarterly Interim and Annual Financial
Statements and recommends them to the Board for its
deliberations prior to their issuance.
External Auditors
The Committee meets with the External Auditors in relation to
the scope and significant matters arising from the audit and also
discusses the Company’s Management Letter at the conclusion
of audit. The External Auditors consults with the Audit
Committee the matters of significant importance pertaining to
the audit. The Audit Committee evaluates the independence of
the External Auditors and makes recommendations to the board
pertaining to the appointment, re-appointment and removal of
external auditors.
Mr. A I Fernando
Chairman
Audit Committee
22nd August 2013
Financial Reporting
The Committee reviews the Financial Statements to ensure
consistency of the accounting policies and their compliance with
the Sri Lanka Accounting Standards and other statutory
requirements.
REMUNERATION COMMITTEE REPORT
The composition of the Remuneration Committee is as follows;
The company had no employees during the year under
consideration and remuneration paid to the Directors during the
year under consideration has been duly approved by the Board
and disclosed in the Directors’ Report.
Mr. A I Fernando
Non-Executive Independent Director)
Chairman
Mr. D C Wimalasena
Non-Executive Independent Director)
The Committee is responsible for setting up the remuneration
policies and making recommendations to the Board.
22
Mr. A I Fernando
Chairman
22nd August 2013
FLC HOLDINGS PLC
Statement of Directors’ Responsibilities
The responsibility of the Directors in relation to the Financial
Statements for the year ended 31st March 2013 which have been
prepared and presented in conformity with the requirements of
the Sri Lanka Accounting Standards, the Listing Rules of the
Colombo Stock Exchange and the Companies Act No. 7 of 2007,
is set out in the following statement.
The External Auditors, M/s. BDO Partners Chartered
Accountants were provided with all the information and
explanations which were necessary enabling them to form their
opinion on the Financial Statements. The Report of the Auditors’
shown on page 24 sets out their responsibilities in relation to the
As per the provisions of the Companies Act No. 7 of 2007, the
Directors are required to prepare Financial Statements for each
financial year and place before a general meeting which
comprise;
The Directors are of the view that they have discharged their
responsibilities as set out in this statement.
1.Statement of Comprehensive Income which presents a true
and fair view of the profit or loss of the Company and its
Subsidiaries, Joint Ventures, Associates and Sub Subsidiaries for
the financial year and;
Compliance Report
The Directors confirm that to the best of their knowledge, all
taxes, duties and levies payable by the Company and its
Subsidiaries, Joint Ventures, Associates and Sub Subsidiaries as
at the date of the Statement of Financial Position have been paid
or, where relevant provided for.
2.Statement of Financial Position which presents a true and fair
view of the state of affairs of the Company and its subsidiaries,
Joint Ventures, Associates and Sub Subsidiaries as at the end of
the financial year which comply with the requirements of the
Companies Act No. 7 of 2007.
By order of the Board.
The Directors are of the view that, in preparing these
Financial Statements:
G A Aloysius
22nd August 2013
1. The appropriate accounting policies have been selected and
applied consistently. Material deviations, if any have been
disclosed and explained;
2. All applicable Accounting Standards as relevant have been
followed;
3. Judgments and estimates used are reasonable and prudent.
The Directors are of the opinion based on their knowledge of the
Company that the Company has adequate resources to continue
in operation and have applied the going concern basis in
preparing these Financial Statements.
Further, the Directors have a responsibility to ensure that the
Company maintains sufficient accounting records to disclose,
with reasonable accuracy the financial position of the Company
and of the Group, and to ensure that the Financial Statements
presented comply with the requirements of the Companies Act
No. 7 of 2007.
The Directors are also responsible for taking reasonable steps to
safeguard the Assets of the Company and that of the Group and in
this regard to give proper consideration to the establishment of
appropriate internal control systems with a view to preventing
and detecting fraud and other irregularities.
23
FLC HOLDINGS PLC
Independent Auditors’ Report
Tel
Fax
E-mail
Website
: +94-11-2421878-79-70
+94-11 -2387002-03
: +94-11-2336064
: [email protected]
: www.bdo.lk
Report on the Financial Statements
We have audited the accompanying financial statements of F L C
Holdings PLC and consolidated financial statements of the
company and its subsidiaries as at 31st March, 2013 which
comprise the statement of financial position as at 31st March, 2013
and the statement of comprehensive income, statement of changes
in equity and cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory
Notes as set out on pages 29 to 94.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance with Sri
Lanka Accounting Standards. This responsibility includes:
designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due
to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in
the circumstances.
Chartered Accountants
"Charter House"
65/2, Sir Chittampalam A Gardiner Mawatha
Colombo 02
Sri Lanka
We have obtained all the information and explanations which to
the best of our knowledge and belief were necessary for the
purposes of our audit. We therefore believe that our audit provides
a reasonable basis for our opinion.
Opinion - Company
In our opinion, so far as appears from our examination, the
Company maintained proper accounting records for the year
ended 31st March 2013 and the financial statements give a true and
fair view of the Company’s state of affairs as at 31st March, 2013
and its profit and cash flows for the year then ended in accordance
with Sri Lanka Accounting Standards.
Opinion - Group
In our opinion, the consolidated financial statements give a true
and fair view of the state of affairs as at 31st March, 2013 and the
profit and cash flows for the year then ended, in accordance with
Sri Lanka Accounting Standards, of the company and its
subsidiaries dealt with thereby so far as concerns the shareholders
of the Company.
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with Sri Lanka Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material
misstatement.
Report on Other Legal and Regulatory Requirements
These financial statements also comply with the requirements of
Section 153(2) to 153(7) of the Companies Act No. 07 of 2007.
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.
CHARTERED ACCOUNTANTS
3rd August 2013
Colombo
BDO Partners, a Sri Lankan Partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international
BDO network of independent member firms.
Partners
Consultant
24
: S. Rajapakse FCA, MBA. Ms. M.S.E. Raymond FCA. S. G. Ranjith ACA. Tishan H. Subasinghe FCA, CISA
H.S. Rathnaweera ACA. Ashane J.W. Jayasekara ACA. MBA. H.M. Saman Siri Lal ACA
: V. Sinnadorai FCA
FLC HOLDINGS PLC
Statement of Comprehensive Income FOR THE YEAR ENDED 31
ST
MARCH 2013
Company
Group
Notes
Revenue
Cost of Sales
Gross Profit
Other Operating Income
Gain on Bargain Purchase
Gain on Fair Value of Investment Properties
Gain on Changes in Fair Values of Biological Assets
4.1
4.2
4.3
5
6
7
Administrative Expenses
Results from Operating Activities
Finance Costs
Share of Results of Equity Accounted Investees (Net of Tax)
Income Tax Expense
8
9
10
Profit for the Year from Continuing Operations
Other Comprehensive Income
Defined Benefit Plan Acturial Gains/(Losses)
Income Tax on Other Comprehensive Income
Other Comprehensive Income/Loss for the Year (Net of Tax)
Total Comprehensive Income for the Year
34(b)
10.2 (a)
Profit Attributable to
Profit/(Loss)for the Year
2012/13
Rs.
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
6,243,256,730 5,719,356,410
(5,309,934,635) (5,157,699,923)
933,322,095
561,656,487
93,500,000
93,500,000
67,649,999
67,649,999
353,681,065
1,718,774
90,326,000
307,501,148
275,416,122
136,973,070
208,411,705
-
131,015,744
-
(340,863,693)
1,345,685,389
(330,696,881)
643,348,798
(16,223,267)
285,688,438
(10,840,497)
187,825,246
(203,077,596)
8,834,946
1,151,442,739
(161,919,655)
(173,251,596)
(2,658,780)
467,438,422
(105,689,247)
(14,288,564)
271,399,874
(49,638,491)
(6,071,404)
181,753,842
(28,169,411)
989,523,084
361,749,175
221,761,383
153,584,431
(42,431,867)
7,037,483
(35,394,384)
954,128,700
78,585,751
(11,132,954)
67,452,797
429,201,972
221,761,383
153,584,431
558,188,933
431,334,151
989,523,084
49,512,290
312,236,885
361,749,175
221,761,383
221,761,383
153,584,431
153,584,431
527,494,929
426,633,771
954,128,700
78,468,978
350,732,994
429,201,972
221,761,383
221,761,383
153,584,431
153,584,431
Total Comprehensive Income Attributable to
Basic Earnings per Ordinary Share (Rs.)
11.1
0.406
0.034
0.162
0.112
Diluted Earnings per Ordinary Share (Rs.)
11.3
0.406
0.034
0.162
0.112
12
0.20
-
0.20
-
Dividend per Ordinary Share (Rs.)
Figures in brackets indicate deductions
The Significant Accounting Policies and notes on pages 29 to 94 form an integral part of these financial statements.
Colombo
3rd August 2013
25
FLC HOLDINGS PLC
Statement of Financial Position AS AT 31
ST
MARCH 2013
Company
Group
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
13
14
15
16
17
18
493,472,323
272,000,000
2,412,227,679
7,235,977,184
5,742,386,263
-
508,800,727
181,674,000
2,020,672,004
6,749,481,040
5,546,869,672
-
524,129,099
181,674,000
1,887,704,102
5,861,857,548
5,970,698,114
-
14,205,495
1,434,250,000
9,065,350
1,434,250,000
1,084,250,000
19
20
19,388,511
53,825,106
16,229,277,066
70,878,672
41,000,000
15,119,376,115
12,793,703
33,000,000
14,471,856,566
1,448,455,495
1,443,315,350
1,084,250,000
21
10,494,000
10,494,000
10,494,000
-
-
22
23
24
25
26
27.(a)
645,286,651
498,746,771
2,077,238
769,445,606
950,616,727
2,866,172,993
19,105,944,060
561,781,652
535,680,423
12,841,273
841,233,302
1,144,911,323
3,096,447,973
18,226,318,088
695,605,647
424,111,472
15,736,228
271,113,642
1,953,665,019
3,360,232,008
17,842,582,574
212,550,000
199,522,036
258,262,143
865,574,602
1,535,908,781
2,984,364,276
83,426,800
12,357,981
352,758,940
951,403,581
1,399,947,302
2,843,262,652
111,382
74,157,787
1,588,386,598
1,662,655,767
2,746,905,767
28
29
2,568,000,000
120,733,042
3,743,604,800
2,568,000,000
122,346,390
3,493,415,511
2,568,000,000
86,889,815
3,394,844,940
2,568,000,000
103,379,137
2,568,000,000
155,217,754
2,568,000,000
1,633,323
6,432,337,842
7,070,241,868
13,502,579,710
6,183,761,901
6,748,453,912
12,932,215,813
6,049,734,755
6,490,868,286
12,540,603,041
2,671,379,137
2,671,379,137
2,723,217,754
2,723,217,754
2,569,633,323
2,569,633,323
31.(b)
34
32
35
921,550,722
1,410,924,343
915,141,531
521,848,421
3,769,465,017
1,122,904,882
1,376,597,007
873,981,112
537,541,144
3,911,024,145
927,561,186
1,383,818,898
947,465,737
489,715,289
105,000,000
3,853,561,110
-
-
-
36
37
38
39
1,141,656,602
2,225,919
63,606,936
183,766,225
-
822,999,427
3,514,719
27,900,596
131,701,715
-
939,019,105
120,000,000
2,006,121
52,266,021
60,000,000
1,500,000
219,306,285
9,613,174
21,515,680
-
12,657,114
150,357,268
14,766,999
9,193,985
-
26,574,549
340,627
-
253,320,060
189,323,591
1,833,899,333
5,603,364,350
19,105,944,060
261,343,163
135,618,510
1,383,078,130
5,294,102,275
18,226,318,088
183,685,307
89,941,869
1,448,418,423
5,301,979,533
17,842,582,574
62,550,000
312,985,139
312,985,139
2,984,364,276
83,426,800
120,044,898
120,044,898
2,843,262,652
177,272,444
177,272,444
2,746,905,767
4.70
4.52
4.42
1.95
1.99
1.88
Notes
ASSETS
Non-Current Assets
Leasehold Property
Investment Property
Investments in Subsidiaries
Investments in Equity Accounted
Investees
Long Term Investments
Total Non-Current Assets
Goodwill on Consolidation
Current Assets
Inventories
Trade and Other Receivables
Loans to Related Parties
Amounts Due From Related Parties
Short Term Investments/Deposits
Cash and Cash Equivalents
Total Current Assets
Total Assets
EQUITY AND LIABILITIES
Stated Capital and Reserves
Stated Capital
Revaluation Surplus
Retained Earnings
Total Equity attributable to Equity
Holders of the Company
Non Controlling Interests
Total Equity
Non-Current Liabilities
Interest Bearing Borrowings
Retirement Benefit Obligations
Deferred Tax Liability
Deferred Income
Loans from Related Parties
Total Non-Current Liabilities
Current Liabilities
Trade and Other Payables
Amounts Due To Related Parties
Income Tax Payable
Short Term Borrowings
Rescheduled Debentures
Current Portion of Interest Bearing
Borrowings
Bank Overdrafts
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
Net Assets per Ordinary Share (Rs.)
30
33
31.(a)
27 (b)
Figures in brackets indicate deductions. The Significant Accounting Policies and notes on pages 29 to 94 form an integral part of these financial statements.
These Financial Statements are prepared and presented in compliance with the requirements of the Companies Act No.7 of 2007.
………………………………………..
U.P.C.Fernando
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
………………………………………..
G. A. Aloysius
Colombo, 3rd August 2013,
26
………………………………………..
J. M. S. de Mel
Director
FLC HOLDINGS PLC
Statement of Changes in Equity FOR THE YEAR ENDED 31
Stated
Capital
Ordinary
Shares
Revaluation
Surplus
Retained
Earnings
Rs.
Rs.
2,568,000,000
ST
MARCH 2013
Total
Non
Controlling
Interests
Total
Equity
Rs.
Rs.
Rs.
Rs.
86,889,815
3,394,844,940
6,049,734,755
-
34,955,879
2,033,894
36,989,773
41,818,329
78,808,102
-
-
-
-
(60,519,000)
(60,519,000)
-
500,696
424,552
925,248
(3,109,884)
(2,184,636)
-
-
(10,494,980)
31,186,655
(10,494,980)
31,186,655
10,494,980
25,516,354
56,703,009
Profit for the Year
Total Other Comprehensive Income
Dividends Paid by Subsidiaries
Preference Share Dividends
Balance as at 31st March 2012
2,568,000,000
122,346,390
49,512,290
28,956,689
(3,048,529)
3,493,415,511
49,512,290
28,956,689
(3,048,529)
6,183,761,901
312,236,885
361,749,175
38,496,108
67,452,797
(110,396,675) (110,396,675)
3,048,529
6,748,453,912 12,932,215,813
-
(1,613,348)
-
(657,111)
558,188,933
(30,694,004)
(273,600,000)
(3,048,529)
(1,613,348)
(657,111)
558,188,933
(30,694,004)
(273,600,000)
(3,048,529)
(1,823,951)
(742,889)
431,334,151
(4,700,380)
(105,327,504)
3,048,529
2,568,000,000
120,733,042
3,743,604,800
6,432,337,842
7,070,241,868 13,502,579,710
Stated
Capital
Ordinary
Shares
Retained
Earnings
Total
Equity
Rs.
Rs.
Rs.
Balance as at 01st April 2011
Profit for the Year
Profit for the Year
Dividends
2,568,000,000
2,568,000,000
-
1,633,323
153,584,431
155,217,754
221,761,383
(273,600,000)
2,569,633,323
153,584,431
2,723,217,754
221,761,383
(273,600,000)
2,568,000,000
103,379,137
2,671,379,137
Group
Balance as at 01st April 2011
Deferred Tax on Revaluation-HPPLC
Decrease in the share of
Non Controlling Interest in PPL
Adjustments for Effective
Holdings of HPPLC
Adjustments for Effective
Holdings of FLMC
Deferred Tax on Revaluation HPPLC
Cost of Share issue
Profit for the Year
Total Other Comprehensive Income
Company Dividends
Subsidiaries Dividends
Preference Share Dividends
Company
6,490,868,286 12,540,603,041
-
(3,437,299)
(1,400,000)
989,523,084
(35,394,384)
(273,600,000)
(105,327,504)
-
Figures in brackets indicate deductions
The Significant Accounting Policies and notes on pages 29 to 94 form an integral part of these financial statements.
Colombo
3rd August 2013
27
FLC HOLDINGS PLC
Cash Flow Statement FOR THE YEAR ENDED 31
ST
MARCH 2013
Company
Group
Notes
2012/13
Rs.
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
1,151,442,739
467,438,422
271,399,874
181,753,842
176,923,036
195,520,814
(307,501,148)
(17,153,197)
6,258,126
203,077,597
(258,426,363)
14,175,000
(1,718,766)
(90,326,000)
(8,834,946)
(2,418,249)
(157,500)
1,060,861,143
217,738,667
215,785,208
(136,973,070)
(19,596,079)
173,251,595
(179,991,327)
(6,930,000)
2,658,780
(4,596,590)
728,785,606
2,539,354
14,288,564
(199,043,852)
-
1,011,900
6,071,404
(129,798,608)
-
89,183,940
59,038,538
Working Capital Changes
- (Increase)/Decrease in Inventories
- (Increase)/ Decrease in Trade and Other Receivables
- (Increase)/Decrease in Loans to Related Parties
- (Increase)/Decrease in Amounts Due From Related Parties
- Increase/(Decrease) in Trade and Other Payables
- Increase/(Decrease) in Amounts Due To Related Parties
Cash Generated From/(Used In) Operations
(68,864,443)
118,471,869
190,648
(11,981,562)
296,551,474
(1,134,977)
1,394,094,152
133,823,995
(111,568,951)
2,894,955
(116,019,678)
1,508,598
639,424,525
(150,000,000)
(187,164,055)
206,649,170
(5,153,825)
(46,484,770)
111,382
(21,626,994)
(137,700,154)
(11,807,550)
(111,984,778)
Income Tax /ESC/SRL Paid
Retiring Gratuity Paid
Interest Paid
Net Cash Generated From/(Used In) Operating Activities
(80,812,097)
(185,848,402)
(192,107,832)
935,325,821
(135,864,147)
(146,374,807)
(143,676,763)
213,508,808
(37,316,795)
(14,288,564)
(98,090,129)
(19,316,053)
(6,071,404)
(137,372,235)
(523,927,385) (288,566,392)
(538,069,642) (511,286,514)
3,428,185
1,460,473
179,991,327
258,426,363
8,711,607
1,708,357
(34,832,024)
(10,819,841)
156,704,149
142,007,885
58,256,391 (542,358,944)
1,220,142
6,007,500
(604,949,899) (1,026,988,464)
(7,679,500)
199,043,852
94,496,798
285,861,150
(350,000,000)
(10,077,250)
129,798,608
(352,758,940)
(583,037,582)
Cash Flows From Operating Activities
Adjustments for
- Provision for Retirement Benefit Obligations - Gratuity
- Depreciation/Amortization
Gain on Changes in fair value of Biological assets
- Deferred Income Amortized
Written off
- Finance Costs
- Interest Income
- Provision for fall/(Increase) in value of investments
- Gain on a Bargain Purchase
- Gain on Changes in Value of Marketable Securities
Share of results of Equity Accounted Investees (Net of Tax)
- Gain on Disposal of Property, Plant & Equipment
- Dividend Income
Operating Profit Before Working Capital Changes
Cash Flows From Investing Activities
Acquisition/Investments in Subsidiaries
Acquisition & Construction of Property, Plant & Equipment
Investments in Biological Assets - Net of Immature Grants
Capital Grants Received
Interest Income Received
Proceeds from Sale of Property, Plant & Equipment
Proceeds from Sale of Bearer/Consumable Biological Assets
Short Term Investments
Dividend Income
Net Cash Generated From/(Used In) Investing Activities
18
Cash Flows From Financing Activities
Repayment of Finance Lease Liabilities
Term & Other Loans Repaid
Term & Other Loans Received
Repayment of Short Term Borrowings - ( Net of Receipts )
Settlement of Rescheduled Debentures
Cost of Share Issue
Dividends
Net Cash Flows Generated From/(Used In) Financing Activities
(57,732,400)
(193,030,211)
52,064,517
(1,400,000)
(378,277,504)
(578,375,598)
(64,366,704)
(466,346,187)
532,855,732
71,703,590
(1,500,000)
(113,297,111)
(40,950,680)
(273,600,000)
(273,600,000)
83,426,800
83,426,800
Net Increase/(Decrease) in Cash & Cash Equivalents
Cash & Cash Equivalents at beginning of the Year
Cash & Cash Equivalents at End of the Year
A
(247,999,676)
1,009,292,813
761,293,137
(854,430,336)
1,863,723,149
1,009,292,813
(85,828,979)
951,403,581
865,574,602
(636,983,017)
1,588,386,598
951,403,581
Cash & Cash Equivalents at End of the Year
A
950,616,728
(189,323,591)
761,293,137
1,144,911,323
(135,618,510)
1,009,292,813
865,574,602
865,574,602
951,403,581
951,403,581
Cash in Hand & Banks
Bank Overdrafts
Figures in brackets indicate deductions. The Significant Accounting Policies and notes on pages 29 to 94 form an integral part of these financial statements.
Colombo
3rd August 2013
28
FLC HOLDINGS PLC
Notes to the Financial Statements
SIGNIFICANT ACCOUNTING POLICIES
1
1.1
Domicile and Legal Form of Reporting Entity
F L C Holdings PLC was incorporated as a limited liability
Company on 22nd May 2008 under the Companies Act No.
07 of 2007 of Sri Lanka and domiciled in Sri Lanka and is
quoted on the Diri Savi Board of the Colombo Stock
Exchange.
The Registered Office of the Company is located at Level
3, Prince Alfred Tower, No 10, Alfred House Gardens,
Colombo 03.
The Consolidated Financial Statements of the Company
for the year ended 31st March 2013 includes the Company,
its Subsidiaries, Jointly Controlled Entities (together
referred to as the “Group”) and the Group's interest in
Associates.
1.3
Principal Activities and Nature of Operations
F L C Holdings PLC is a diversified holding Company
making investments through its Subsidiaries in
Plantations, Mini Hydro Power, Tourism & Leisure and
Real Estate Property Sectors.
1.4
Authorization for Issue
The financial statements of F L C Holdings PLC for the 12
Months ended 31st March 2013 were authorized for issue
on 3rd August 2013 in accordance with a resolution of the
Board of Directors of the company.
2
BASIS OF PREPARATION
2.1
Statement of Compliance
The Financial Statements have been prepared in
accordance with the Sri Lanka Accounting and Auditing
Standards Act, No. 15 of 1995 (SLFRS & LKAS) adopted
by the Institute of Chartered Accountants of Sri Lanka and
in compliance with the Companies Act No. 07 of 2007. The
Financial Statements for the year ended 31st March 2013
are the Company's first financial statements prepared in
accordance with SLFRS & LKAS.
All Companies in the Group are limited liability
companies incorporated and domiciled in Sri Lanka and
their financial statements are prepared for a common
financial year, April to March.
1.2
The Financial Statements of the Group for the year ended
31st March 2013 are the first set of Financial Statements
prepared in accordance with SLFRS & LKAS.
Name Changes of the Company & Other Companies
within the Group
The name of the Company, Free Lanka Capital Holdings
PLC was changed to F L C Holdings PLC with effect from
13th March 2013.
Explanatory notes of the transition from SLAS to
SLFRS/LKAS and its impact on the reported financial
position and financial performance of the Company and its
Group from the date of transition are provided in Note 46.
The names of following Companies within the Group have
been changed as follows;
Present Name
Former Name
Effective Date
F L C Properties
(Pvt) Ltd
Free Lanka Capital
Properties (Pvt) Ltd
21.03.2013
Thebuwana Hydro
Power (Pvt) Ltd
Hydro Power Free
Lanka 2 (Pvt) Ltd
20.12.2012
Stellenberg Hydro
Power (Pvt) Ltd
Hydro Power Free
Lanka 3 (Pvt) Ltd
20.12.2012
F L C Power
Holdings (Pvt) Ltd
Free Lanka Power
Holdings (Pvt) Ltd
05.02.2013
Halgranoya Hydro
Power (Pvt) Ltd
Free Lanka Power 1
(Pvt) Ltd
02.01.2013
Dolekanda Power
(Pvt) Ltd
Free Lanka Power 2
(Pvt) Ltd
20.12.2012
Enselwatte Power
(Pvt) Ltd
Free Lanka Power 3
(Pvt) Ltd
19.12.2012
F L C Hydro Power
PLC
Hydro Power Free
Lanka PLC
03.04.2013
2.2
Basis of measurement
These financial statements have been prepared on the
historical cost basis with no adjustments being made for
inflationary factors affecting the Financial Statements,
except for the following material items in the Group's
statement of financial position.
Bearer biological assets namely Rubber and Coconut are
measured at fair value
Consumable biological assets are measured at fair value.
Defined benefit plan is measured using projected benefit
valuation method.
Hydro Power Buildings, Equipment and Penstock Pipe
Lines
The Financial Statements of the Company are presented in
Sri Lankan Rupees, and all values are rounded to nearest
Rupee.
29
FLC HOLDINGS PLC
Notes to the Financial Statements CONTD.
2.3
Use of Estimates and Judgements
The preparation of financial statements in conformity with
SLFRS requires management to make judgments,
estimates and assumptions that affect the application of
accounting policies and the reported amount of assets,
liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are based on
historical experience and various other factors that are
believed to be reasonable under the circumstances, the
results form the basis of making the judgments about the
carrying amount of assets and liabilities that are not readily
apparent from other sources.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revision to accounting estimates are
recognized in the period in which the estimate is revised
and in any future period affected.
2.5
Materiality and Aggregation
Each material class of similar items is presented separately
in the financial statements. Items of a dissimilar nature or
function are presented separately unless they are
immaterial.
2.6
Offsetting
Assets and liabilities, and income and expenses, are not
offset unless required or permitted by SLFRSs.
2.7
Going Concern
The Board of Directors is satisfied that the Company has
adequate resources to continue its operations in the
foreseeable future and going-concern basis has been
adopted in preparing the Financial Statements of the
Company and its Group.
2.8
Directors' Responsibilities for the Financial
Statements
The Board of Directors is responsible for the preparation
and fair presentation of these financial statements in
accordance with Sri Lanka Accounting and Auditing
Standards Act. No 15 of 1995 and as per the provisions of
the Companies Act No. 07 of 2007. Those responsibilities
includes: designing, implementing and maintaining
internal controls 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.
2.9
New Accounting Standards issued but not effective at
the date of Statement of Financial Position
Application of SLFRS 9 - Financial Instruments, SLFRS
10-Consolidated Financial Statements, SLFRS 11-Joint
venture Arrangements, SLFRS 12 - Disclosure of Interest
in other entities & SLFRS 13-Fair value Measurement.
Information about critical judgments in applying
accounting policies that have the most significant effect on
the amounts recognized in the Group's financial
statements are included in the following notes;
Critical accounting estimates /
Judgements
Disclosure
reference
Note
Bearer Biological Assets Rubber & Coconut
16.1.2
17
34
Useful lives of Property, Plant and
Equipment
15 (b)
Changes to the Estimates
The Group is using a material value of fully-depreciated
assets in commercial operations. This indicates objective
evidence that those estimates were in error in terms of
LKAS 8. The Plant & Machinery and Motor Vehicles are
identified as the class of assets which contributes to a
major part of fully- depreciated assets.
The Group revisited the useful lives residual values of
freehold plant & machinery and motor vehicles and
adjusted prospectively.
2.4
30
Comparative Information
Previous period figures and Notes have been reclassified
wherever necessary to conform to the current year's
presentation of the Company and Group.
The International Accounting Standard Board has issued
SLFRS 10, 11, 12 & 13 with effect from 1st January 2013.
The Institute of Chartered Accountants of Sri Lanka
decided to defer the application of above standards of
SLFRS 10, 11, 12 & 13.
2.9.1 SLFRS 9 - Financial Instruments
ICASL published the SLFRS 9 - Financial Instruments,
which will supersede the provisions of LKAS 39 Financial
Instruments: Recognition and Measurement on
classification and measurement of financial assets and
requirements with respect to the classification and
measurement of financial liabilities, the de-recognition of
financial assets and financial liabilities and how to
measure fair value were added to SLFRS 9. Most of these
requirements have been carried forward without
substantive amendment from LKAS 39.
FLC HOLDINGS PLC
2.9.2 SLFRS 10 - Consolidated Financial Statements
ICASL published SLFRS 10 Consolidated Financial
Statements, which supersedes LKAS 27 Consolidated and
Separate Financial Statements and SIC-12 ConsolidationSpecial Purpose Entities. Additionally, the ICASL
published SLFRS - 12 Disclosure of Interests in Other
Entities and LKAS 27 Separate Financial Statements.
The following are the main changes from LKAS 27
and SIC-12
!
!
!
!
!
!
!
!
A single control model is applied to determine whether
an investee should be consolidated.
De facto control is explicitly included in the model.
Control involves power over the relevant activities of
the investee, exposure to variability of returns, and a
link between power and returns.
Guidance is provided for assessing whether the
investor is a principal or an agent in respect of its
relationship with the investee. A principal could
consolidate an investee whereas an agent would not
because the linkage between power and returns is not
present.
Control assessment includes consideration of
substantive potential voting rights as opposed to
currently exercisable potential voting rights.
Exposure or right to variability in returns replaces and
is broader than the concept of benefits.
Protective rights are defined and explicit guidance on
'kick-out' rights is introduced.
Enhanced disclosures about involvement with
consolidated and unconsolidated entities are required.
SLFRS 10 is effective for annual periods beginning on or
after 1st January 2013. Early adoption is permitted
provided that the entire suite of consolidation standards is
adopted at the same time. However, an entity is permitted
to provide the additional information required by SLFRS
12 without having to early adopt the remaining standards.
2.10 Withdrawal of UITF Rulings
The Urgent Issue Task Force (UITF) rulings issued prior to
1st January 2012 have been superseded by the Sri Lanka
Accounting Framework with effect from 1st January 2012.
Consequently it is now required to treat transactions which
any of UITF rulings applied, in accordance with Sri Lanka
Accounting Framework effective from 1st January 2012.
3.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements and in preparing the opening SLFRS
statement of financial position at 1st April 2011 for the
purposes of the transition to SLFRSs, unless otherwise
indicated.
3.1
Business Combinations
Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured
at acquisition date fair value and the amount of any noncontrolling interest in the acquiree. For each business
combination, the Group elects whether it measures the
non-controlling interest in the acquiree either at fair value
or at the proportionate share of the acquiree's identifiable
net assets. Acquisition costs incurred are expensed and
included in administrative expenses.
When the Group acquires a business, it assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with the
contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the
separation of embedded derivatives in host contracts by
the acquiree.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer's previously held
equity interest in the acquiree is remeasured to fair value at
the acquisition date through profit or loss.
After the control of an entity is obtained, changes in
ownership interest that do not result in a loss of control are
accounted as equity transactions and gain or loss from
these changes are not recognised in Income Statement.
Any contingent consideration to be transferred by the
acquirer will be recognised at fair value at the acquisition
date. Subsequent changes in the fair value of the
contingent consideration which is deemed to be an asset or
liability, will be recognised in accordance with LKAS 39
either in profit or loss or as a change to other
comprehensive income.
3.1.1 Subsidiaries
Subsidiaries are those entities controlled by the Group.
Control exists when the Group has the power, directly or
indirectly, to govern the financial and operating policies of
an entity so as to obtain benefits from its activities which is
evident when the Group controls the composition of the
Board of Directors of the entity or holds more than 50% of
the issued shares of the entity or 50% of the voting rights of
the entity or entitled to receive more than half of every
dividend from shares carrying unlimited right to
participate in distribution of profits or capital.
The Financial Statements of subsidiaries are included in
the Consolidated Financial Statements from the date on
which control effectively commences, until the date that
control effectively ceases. Subsidiaries are disclosed in
Note 43 to the Financial Statements.
31
FLC HOLDINGS PLC
3.1.2 Transaction with Non-Controlling Interest
The profit or loss and net assets of a subsidiary attributable
to equity interests that are not owned by the Parent,
directly or indirectly, through Subsidiaries, is disclosed
separately under the heading 'Non-Controlling Interest'
under equity in the statement of financial position.
The Group applies a policy of treating transactions with
non-controlling interests as transactions with parties
external to the Group.
3.1.3 Associates
Associates are those entities in which the Group has
significant influence, but no control over financial and
operating policies. Significant influence is presumed to
exist when the Group holds between 20% and 50% of the
voting power of the entity. Associates are accounted for
using the equity method and are initially recognised at
cost. The Consolidated Financial Statements include the
Group’s share of income and expenses and equity
movements of equity accounted investees, from the date
that significant influence commences until the date of
significant influence ceases. When the Group’s share of
losses exceeds its investment in an equity accounted
investee, the carrying amount of that interest is reduced to
nil and the recognition of further losses is discontinued
except to the extent that the Group has incurred
obligations or has made payments on behalf of the
investee.
The Financial Statements of the associate are prepared for
the same reporting period as the Group. Where necessary,
adjustments are made to bring the accounting policies in
line with those of the Group.
Upon loss of significant influence over the associate, the
Group measures and recognises any retaining investment
at its fair value. Any difference between the carrying
amount of the associate upon loss of significant influence
and the fair value of the retaining investment and proceeds
from disposal is recognised in the statement of
3.1.4 Transactions Eliminated on Consolidation
Intra-group balances, transactions and any unrealised
income and expenses arising from intra-group
transactions, are eliminated in preparing the Consolidated
Financial Statements. Unrealised gains arising from
transactions with equity accounted investees are
eliminated against the investment to the extent of the
Group's interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to
the extent that there is no evidence of impairment.
32
3.2
Assets and Bases of Their Valuation
3.2.1 Property, Plant and Equipment
a) Cost
Property, plant and equipment is recorded at cost,
excluding the cost of day to day servicing, less
accumulated depreciation and accumulated impairment in
value.
b) Cost and Valuation
All items of property, plant and equipment are initially
recorded at cost. Where items of property, plant and
equipment are subsequently revalued, the entire class of
such asset is revalued. Revaluations are made with
sufficient intervals to ensure that their carrying amounts do
not differ materially from their values at the Statement of
Financial Position date. Subsequent to the initial
recognition as an asset at cost, revalued property, plant and
equipment are carried at revalued amounts and 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 recognized as an
expense. In these circumstances, the increase is
recognized as income to the extent of the previous written
down value. When asset's carrying amount is decreased as
a result of a revaluation, the decrease is recognized 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 asset. Any balance remaining in the
revaluation surplus in respect of an asset is transferred
directly to Retained Earnings on retirement or disposal of
such asset.
c) Subsequent Costs
The cost of replacing part of an item of property, plant and
equipment is recognized in the carrying amount of the item
if it is probable that the future economic benefits embodied
within the part will flow to the Company and its cost can be
measured reliably. The carrying amount of the replaced
part is de-recognized. The costs of the day-to-day
servicing of property, plant and equipment are recognized
in the statement of comprehensive income as incurred.
d) Depreciation/Amortization
Depreciation
Depreciation is based on the cost of an asset less its
residual value. Significant components of individual
assets are assessed and if a component has a useful life that
is different from the remainder of that asset, that
component is depreciated separately.
FLC HOLDINGS PLC
Depreciation is recognized in the statement of
comprehensive income on a straight-line basis over the
estimated useful life of each component of an item of
property, plant and equipment other than freehold land.
Assets held under finance leases are depreciated over the
shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by
the end of the lease term.
Depreciation of an asset begins when it is available for use
and ceases at the earlier of the date that the asset is
classified as held for sale and the date that the asset is derecognized.
The estimated useful lives for the current and comparative
year are as follows:
Property, Plant &
Equipment
No. of Years
Range
Buildings
20 to 40 years
Plant & Machinery
5 to 15 years
Motor Vehicles
1 to 15 years
Equipment
8 to 20 years
Computers
4 to 8 years
Furniture & Fittings
5 to 10 years
Ergonomic Equipment
25 years
Water, Sanitations & Others
20 years
Roads & Bridges
50 years
Penstock Pipeline
20 years
Security Fences
3 years
Rate Range
2.50 % to 5 %
6.66% to 20%
6.66% to 100%
5% to 12.50%
12.50% to 25%
10% to 20%
4%
5%
2%
5%
33.33%
The cost of areas coming into bearing are transferred to
mature plantations and depreciated as follows. No
depreciation is provided for immature plantations.
Bearer Biological
Assets
No. of Years
Range
Rate Range
Tea
30 to
33.33 years
3% to 3.33%
10 to 15 years
6.66% to 10%
Mixed/Other Crops
Amortization
The leasehold rights are being amortized in equal amounts
over the shorter of lease term and the expected useful life
of the assets as follows.
Class of Asset
No. of Years
Range
Rate
Range
Bare land
Mature Plantations - Tea
Other Crops
Buildings
Machinery
Water & sanitation
Other Vested Assets
Permanent Land
Development
Improvements to Lands
53 years
30 years
15 years
25 years
15 years
15 to 20 years
15 to 30 years
1.89%
3.33%
6.67%
4%
6.67%
6.67% to 5%
6.67% to 3.33%
53 years
30 years
1.89%
3.33%
3.2.2 Bearer Biological Assets
a) Bearer Biological Assets - At Cost
The Group recognizes Tea and Other Crops except for
Rubber and Coconut, at cost in accordance with the new
ruling issued by the Institute of Chartered accountants of
Sri Lanka dated 2nd March 2012, due to the impracticability
of carrying out a proper fair valuation. New ruling
provides the option to measure bearer biological assets
using LKAS16 - Property, Plant and Equipment. The
Group measures Tea and Other Crops at their cost less any
accumulated depreciation and any accumulated
impairment losses at the end of the financial period.
New/Replanting
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 capitalized on the
immature areas. The remaining portion of the general
charges is expensed in the accounting period in which it is
incurred.
Infilling Costs
Where infilling results in an increase in the economic life
of the relevant field beyond its previously assessed
standard of performance, such cost are capitalized.
Infilling costs that do not result in an increase in the
economic life of the relevant field is not capitalized and
charged to the Statement of Comprehensive Income in the
year in which they are incurred.
The cost of areas coming into bearing is transferred to
mature plantations at end of the financial year.
Growing Crop Nurseries
Nursery cost includes the cost of direct materials, direct
labour and an appropriate proportion of directly
attributable overheads.
33
FLC HOLDINGS PLC
b) Bearer Biological Assets - At Fair Value
The Group recognizes the Rubber and Coconut plantations
at fair value less estimated point-of-sale-of-costs, in
accordance with LKAS 41- Agriculture. Point-of-salescosts include all the costs that would be necessary to sell
the assets, including costs necessary to get the assets to
market. In respect of Rubber and Coconut Plants having
below six years of age as at the date of financial position,
have been taken at cost.
The Group has engaged an Independent Chartered
Valuation Surveyor Mr. K.T.D. Tissera in determining the
fair value of Rubber and Coconut Bearer Biological
Assets. The valuer has valued the latex component of
Rubber, and also Coconut using the forecasted crop, prices
and cost of production based on past statistics. The scrap
value, being the timber component of trees is valued by
using the available log prices in city centers less point-ofsale-costs. All other assumptions are given in Note 16. The
Group measured the Rubber and Coconut plantations at
fair value less estimated-point-of-sale-costs as at each date
of Statement of Financial Position and the gain or loss on
changes in fair value is recognized in the Statement of
3.2.3. Consumable Biological Assets
Consumable biological asset is stated at fair value less
estimated point-of-sale-of-costs in terms of LKAS 41 Agriculture. Point-of-sales-costs include all the costs that
would be necessary to sell the assets, including costs
necessary to get the assets to market.
The company has engaged an Independent Chartered
Valuation Surveyor Mr. K.T.D. Tissera in determining the
fair value of managed Timber Plantation. The valuer has
valued the Timber Plantation per tree valuation basis by
using available log prices in city centers less point-of-salecosts. The timber plants having less than three years old
have not been taken in to the valuation and hence, the cost
of such plants has been added to the valuation. All other
assumptions are given in Note 17. The Group measures the
Timber Plantation at fair value less estimated-point-ofsale-costs as at each date of Statement of Financial
Position. The gain or loss on changes in fair value of
Timber Plantation is recognized in the Statement of
34
3.2.4 Borrowing Cost
Borrowing costs that are directly attributable to
acquisition, construction or production of a qualifying
asset, which takes a substantial period of time to get ready
for its intended use or sale, are capitalized as a part of the
asset.
Borrowing costs that are not capitalized are recognized as
expenses in the period in which they are incurred and
charged to the Statement of Comprehensive Income.
The amounts of the borrowing costs which are eligible for
capitalization are determined in accordance with LKAS 23
- 'Borrowing Costs'.
Borrowing costs incurred in respect of specific loans that
are utilized for field development activities have been
capitalized as a part of the cost of the relevant immature
plantation. The capitalization will cease when the crops
are ready for commercial harvest.
The amount so capitalized and the capitalization rates are
disclosed in the Notes to the Financial Statements.
3.2.5 Permanent Land Development Costs
Permanent land development costs are those costs
incurred making significant infrastructure development
and building new access roads on leasehold lands.
These costs have been capitalized and amortized over the
remaining lease period.
3.2.6 Leases
a) Finance Leases
Property, Plant and Equipment on finance leases, which
effectively transfer to the Group substantially the entire
risk and rewards incidental to ownership of the leased
items, are disclosed as finance leases at their cash price and
depreciated over the period the Group 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 in the Note 31.
The interest element of the rental obligation applicable to
each financial year is charged to the Statement of
Comprehensive Income 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.
The cost of improvements to or on leased property is
capitalized, and depreciated over the unexpired period of
the lease or the estimated useful lives of the improvements,
whichever is shorter.
FLC HOLDINGS PLC
b) 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 paid under operating leases are
recognized as an expense in the Statement of
Comprehensive Income.
c) Leasehold Rights to Bare Land of JEDB/SLSPC
Estate Assets and Immovable (JEDB/SLSPC) Estates
Assets on Finance Lease
The Institute of Chartered Accountants of Sri Lanka has
issued a Statement of Recommended Practice (SoRP) on
19th December 2012 to be effective from 01st January 2012
in respect of the “Right-to-use of Land on Lease”. Since
the SoRP has not been finalized the Group has continued
applying UITF rulings on “Leasehold Property”
3.2.7 Impairment of Assets
The Group assesses at each reporting date whether there is
an indication that an asset may be impaired. If such
indication exists or when annual impairment testing for an
asset is required the Group makes an estimate of the assets
recoverable amount. An asset's recoverable amount is the
higher of an asset's or cash generating unit's fair value less
costs to sell and its value in use and 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 risk specific to the asset.
These calculations are collaborated by valuation
multiples, quoted share prices or other available fair value
indicators.
Impairment losses of continuing operations are recognized
in the Statement of Comprehensive Income 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 recognized in equity upto 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 recognized impairment losses may no
longer exist or may have decreased. If such indication
exists, the Group makes an estimate of recoverable
amount. A previously recognized impairment loss is
reversed only if there has been a change in the estimates
used to determine the asset's recoverable amount since the
last impairment loss was recognized.
If that is the case, the 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 recognized for
the asset in prior years. Such reversal is recognized in the
Statement of Comprehensive Income unless the asset is
carried at revalued amount, in which case the reversal is
treated as a revaluation increase.
3.2.8 Financial Instruments
3.2.8.1Non derivative financial instruments
a) Recognition
The Group/Company initially recognizes loans and
advances, deposits on the date at which they are
originated. All the financial assets and liabilities other than
regular way purchases and sales are recognized on the
trade at which the Group/Company becomes a party to the
contractual provisions of the instruments.
b) De-recognition
The Group/Company derecognizes a financial asset when
the contractual rights to the cash flows from the financial
asset expire, or when it transfers the financial asset in a
transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred or in
which the Group/Company neither transfers nor retains
substantially all the risks and rewards of ownership and it
does not retain control of the financial asset. Any interest
in transferred financial assets that qualify for derecognition that is created or retained by the
Group/Company is recognized as a separate asset or
liability in the statement of financial position.
On de-recognition of a financial asset, the difference
between the carrying amount of the asset (or the carrying
amount allocated to the portion of the asset transferred),
and the sum of (i) the consideration received (including
any new asset obtained less any new liability assumed)
and (ii) any cumulative gain or loss that had been
recognized in other comprehensive income is recognized
in profit or loss.
The Group/Company enters into transactions whereby it
transfers assets recognized on its statement of financial
position, but retains either all or substantially all of the
risks and rewards of the transferred assets or a portion of
them. If all or substantially all risks and rewards are
retained, then the transferred assets are not derecognized.
35
FLC HOLDINGS PLC
In transactions in which the Group/Company neither
retains nor transfers substantially all the risks and rewards
of ownership of a financial asset and it retains control over
the asset, the Group/Company continues to recognize the
asset to the extent of its continuing involvement,
determined by the extent to which it is exposed to changes
in the value of the transferred asset. The Group/Company
derecognizes a financial liability when its contractual
obligations are discharged or cancelled or expire.
c) Offsetting
Financial assets and liabilities are offset and the net
amount presented in the statement of financial position
when, and only when, the Group/Company has a legal
right to offset the amounts and intends either to settle on a
net basis or to realize the asset and settle the liability
simultaneously.
d) Amortized cost measurement
The amortized cost of a financial asset or liability is the
amount at which the financial asset or liability is measured
at initial recognition, minus principal repayments, plus or
minus the cumulative amortization using the effective
interest method of any difference between the initial
amount recognized and the maturity amount, minus any
reduction for impairment.
e) Fair value measurement
Fair value is the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable,
willing parties in an arm's length transaction on the
measurement date.
When available, the Group/Company measures the fair
value of an instrument using quoted prices in an active
market for that instrument. A market is regarded as active
if quoted prices are readily and regularly available and
represent actual and regularly occurring market
transactions on an arm's length basis.
f) Identification and measurement of impairment
At each reporting date the Group/Company assesses
whether there is objective evidence that financial assets
not carried at fair value through profit or loss are impaired.
A financial asset or a group of financial assets is (are)
impaired when objective evidence demonstrates that a loss
event has occurred after the initial recognition of the
asset(s), and that the loss event has an impact on the future
cash flows of the asset(s) that can be estimated reliably.
Objective evidence that financial assets are impaired can
include significant financial difficulty of the debtors or a
group of debtors, default or delinquency by a borrower,
indicates that they will enter bankruptcy or other financial
reorganization and where observable data indicate that
there is a measurable decrease in the estimated future cash
flows.
36
Impairment losses on assets carried at amortized cost are
measured as the difference between the carrying amount
of the financial asset and the present value of estimated
future cash flows discounted at the asset's original
effective interest rate. Impairment losses are recognized in
profit or loss. When a subsequent event causes the amount
of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.
Impairment losses on available-for-sale investment
securities are recognized by transferring the cumulative
loss that has been recognized in other comprehensive
income to profit or loss as a reclassification adjustment.
The cumulative loss that is reclassified from other
comprehensive income to profit or loss is the difference
between the acquisition cost, net of any principal
repayment and amortization, and the current fair value,
less any impairment loss previously recognized in profit or
loss. Changes in impairment provisions attributable to
time value are reflected as a component of interest income.
Any subsequent recovery in the fair value of an impaired
available-for-sale equity security is recognized in other
3.2.8.1.1 Financial Assets
Financial assets are within the scope of LKAS 39 are
classified appropriately as Fair value through profit or loss
(FVTPL), loans and receivables (L&R), held to maturity
(HTM), available-for-sale (AFS) at its initial recognition.
All the financial assets are recognized at fair value at its
initial recognition.
a) Financial assets at fair value through profit or loss
A financial asset is classified at fair value through profit or
loss if it is classified as held for trading or is designated as
such upon initial recognition. Financial assets are
designated at fair value through profit or loss if the
Group/Company manages such investments and makes
purchase and sale decisions based on their fair value in
accordance with the Group/Company's documented risk
management or investment strategy. Upon initial
recognition, transaction costs are recognized in profit or
loss as incurred.
Financial assets at fair value through profit or loss are
measured at fair value, and subsequent changes are
recognized in profit or loss.
b) Loans and receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active
market. Such assets are recognized initially at fair value
plus any directly attributable transaction costs.
Subsequent to initial recognition loans and receivables are
measured at amortized cost using the effective interest
method, less any impairment losses.
FLC HOLDINGS PLC
Loans and receivables of the Group/Company comprise of
the following;
f) Inventories
Agricultural Produce harvested from Biological Assets
Agricultural produce harvested from an entity's Biological
Assets is measured at its fair value less cost to sell at the
point of harvest. Such measurement is deemed to be the
cost at the time of transferring the harvested crop to
inventories.
(b.1)Trade and other Receivables
Trade and other receivables are stated at the amounts they
are estimated to realize, net of provisions for bad and
doubtful receivables. A provision for doubtful debts is
made where as there is objective evidence that the
Group/Company will not be able to recover all amounts
due according to the original terms of receivables. Bad
debts are written-off when identified.
Finished/Semi finished Agricultural Produce of
Biological Assets
Finished and Semi Finished Agricultural Produce are
valued adding the cost of conversion depending on the
existing state of conversion as at the date of financial
position and thereafter value at the lower of cost or net
realizable value.
Other receivable balances are stated at estimated amounts
receivable after providing for doubtful receivables.
c) Held-to-maturity financial assets
If the Group/Company has the positive intent and ability to
hold debt securities to maturity, then such financial assets
are classified as held-to-maturity. Held-to-maturity
financial assets are recognized initially at fair value plus
any directly attributable transaction costs. Subsequent to
initial recognition held-to-maturity financial assets are
measured at amortized cost using the effective interest
method, less any impairment losses.
Net realizable value is the estimated selling price at which
stocks can be sold in the ordinary course of business after
allowing for cost of realization and/or cost of conversion
from their existing state to saleable condition.
Input material, Spares and Consumables
At actual cost on weighted average basis.
Any sale or reclassification of a more than insignificant
amount of held-to-maturity investments not close to their
maturity would result in the reclassification of all held-tomaturity investments as available-for-sale, and prevent the
Company/Group from classifying investment securities as
held-to-maturity for the current and the following two
financial years.
Certified Emission Reduction
Carbon credit units as at the balance sheet date have been
valued at their estimated net realizable value as
inventories and disclosed in the financial statements as
Certified Emission Reduction.
g) Short Term Investments
Short term investments are measured at fair value since
their carrying values are almost equal to its fair value.
d) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative
financial assets that are designated as available for- sale
and that are not classified in any of the previous categories.
h) Cash and Cash Equivalents
Cash and cash equivalents comprise of cash in hand and
cash at banks and other highly liquid financial assets
which are held for the purpose of meeting short-term cash
commitments with original maturities of less than three
months which are subject to insignificant risk of changes
in their fair value.
Subsequent to initial recognition, these are measured at
fair value and changes therein, other than impairment
losses are recognized in other comprehensive income and
presented within equity in the fair value reserve. When an
investment is derecognized, the cumulative gain or loss in
other comprehensive income is transferred to profit or
loss.
e) Current Assets
Assets classified as current assets in the Statement of
Financial Position are those expected to realize during the
normal operating cycle of business or within one year from
the Statement of Financial Position date, whichever is
longer and cash balances. Assets other than current assets
are those which the Group/Company intends to hold
beyond one year period from the Statement of Financial
Position date.
Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included
as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
3.3
Financial Liabilities
The Group initially recognizes debt securities and Loans
& Borrowings on the date that they are originated. All
other financial liabilities are recognized at initially on the
trade date, which is the date that the Company becomes
party to the contractual provisions of the instruments.
37
FLC HOLDINGS PLC
The Group derecognizes a financial liability when its
contractual obligations are discharged, cancelled or
expired.
The Group classifies non-derivative financial liabilities
into the other financial liabilities category. Such financial
liabilities are recognized initially at fair value plus any
directly attributable transaction cost. Subsequent to initial
recognition, these financial liabilities are measured at
amortized cost using effective interest rate method.
Other financial liabilities comprise of Loans &
Borrowings, bank overdraft and debentures issued.
3.3.1 Accounts Payables and Accrued Expenses
Trade and other payables are stated at cost.
The calculation is performed every two years by a
qualified actuary using the projected benefit valuation
method as recommended by LKAS 19 on Employee
Benefits. The key assumptions used by the actuary for
actuarial valuation as at 31st March, 2013 include the
following.
i) Rate of Discount
- 10.5% per annum
3.3.2 Provisions
Provisions are made for all obligations existing as at the
date of Statement of Financial Position when it is probable
that such an obligation will result in an outflow of
resources and a reliable estimate can be made of the
quantum of the outflow. All contingent liabilities are
disclosed as a note to the Financial Statements unless the
outflow of resources is remote. Contingent assets are
disclosed, where inflow of economic benefit is probable.
iv) The Group will continue as a going concern
3.3.3 Employee benefits
v) Daily Wage Rate
3.3.3.1 Defined contribution plans - Provident and Trust
Fund
A Defined Contribution Plan is a post-employment benefit
plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive
obligation to pay further amounts. Obligations for
contributions to Defined Contribution Plans are
recognized as an employee benefit expense in the
Statement of Comprehensive Income in the periods during
which services are rendered by employees.
When the benefits of a plan are improved, the portion of
the increased benefit related to past service by employees
is recognized in profit or loss on a straight-line basis over
the average period until the benefits become vested. To the
extent that the benefits vest immediately, the expense is
recognized immediately in profit or loss.
3.3.3.2 Employees' Provident Fund (EPF), Ceylon
Plantation Provident Society (CPPS) and Estate Staff
Provident Society (ESPS)
The Group contributes 12% on the salary of each
employee to the above mentioned funds.
ii) Rate of Salary Increase
- For Staff
- 7.5 % per annum
- For Workers
- 15 % once in two years
iii) Retirement Age
- Workers
- Staff
- 60 years
- 60 years
- Rs. 380/-
The Group recognizes all actuarial gains and losses arising
from the defined benefit plan in other comprehensive
income (OCI). This retirement benefit obligation is not
externally funded.
F L C Hydro Power PLC and Stellenberg Hydro Power
(Pvt) Ltd
The above Sub subsidiaries of the Group measured the
present value of the retirement benefits of gratuity which is
recommended by LKAS 19 using formula method.
3.3.3.3 Employees' Trust Fund (ETF)
The Group contributes 3% of the salary of each employee
to the Employees' Trust Fund.
The key assumptions used for the calculations are as
follows;
3.3.3. Defined benefits plans
i) Rate of Discount
-
10.50% per annum
ii) Rate of Salary and
Wage Increase
-
12% per annum
iii) Retirement Age
-
55 years
Maturata Plantations Ltd & Pussellawa Plantations
Ltd
A defined benefit plan is a post-employment benefit plan
other than a defined contribution plan.
38
The Group's net obligation in respect of defined benefit
pension plans of two Sub Subsidiaries mentioned above is
calculated by estimating the amount of future benefit that
employees have earned in return for their service in the
current and prior periods; that benefit is discounted to
determine its present value. Any unrecognized past service
costs are deducted.
FLC HOLDINGS PLC
3.3.4 Tax Expense
Tax expense comprises of current, deferred tax and other
statutory taxes. Income tax expense is recognized in
Statement of Comprehensive Income except to the extent
that it relates to items recognized directly in the statement
of changes in equity.
3.3.4.1 Current Tax
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted
or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Current tax payable also includes any tax liability arising
from the tax on dividend income.
The provision for income tax is based on the elements of
income and expenditure as reported in the Financial
Statements and computed in accordance with the
provisions of the Inland Revenue Act. No 10 of 2006 and
subsequent amendments thereto.
Current 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.
3.3.4.2 Deferred Tax
Deferred tax is recognized in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognized
for:
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be
realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax
credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be
available against which they can be utilized. Deferred tax
assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax
benefits will be realized.
Deferred tax assets and liabilities are not discounted.
The net increase in the carrying amount of deferred tax
liability net of deferred tax asset is recognized as deferred
tax expense and conversely any net decrease is recognized
as reversal to deferred tax expense, in the Statement of
Comprehensive Income.
3.3.4.3 Economic Service Charge (ESC)
As per the provisions of Economic Service Charge Act No.
13 of 2006 amendments thereto, ESC is payable on the
liable turnover at specified rates. ESC is deductible from
the income tax liability. Any unclaimed amount can be
carried forward and set off against the income tax payable
within the five subsequent years as per the relevant
provision in the Act.
!
Temporary differences on the initial recognition of assets
or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit or loss;
!
Temporary differences related to investments in
subsidiaries and jointly controlled entities to the extent
that it is probable that they will not reverse in the
foreseeable future; and
3.3.5 Grants and Subsidies
Grants related to property, plant and equipment are
initially deferred and allocated to Statement of
Comprehensive Income on a systematic basis over the
useful life of the related property, plant and equipment.
Grants related to assets, including non-monetary grants at
fair value, are deferred in the Statement of Financial
Position and credited to the Statement of Comprehensive
Income over the useful life of the related asset.
!
Taxable temporary differences arising on the initial
recognition of goodwill.
Relevant assets are presented in the financial statements
without setting off against the relevant grants.
!
Taxable temporary differences arising on subsidiaries,
associates or joint ventures who have not distributed their
entire profits to the parent or investor.
Grants related to income are recognized in the Statement
of Comprehensive Income in the period in which they are
receivable.
Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively
enacted by the reporting date.
39
FLC HOLDINGS PLC
STATEMENT OF COMPREHENSIVE INCOME
3.4
Revenue
3.4.1 Revenue Recognition
Revenue is recognized to the extent that it is probable that
the economic benefits will flow to the Group, 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.
3.4.1.1 Sale of Goods
Revenue from the sale of goods in the course of ordinary
activities is measured at the fair value of the consideration
received or receivable, brokerage, public sale expenses
and other levies related to turnover. Revenue is recognized
when persuasive evidence exists, usually in the form of an
executed sales agreement, that the significant risks and
rewards of ownership have been transferred to the
customer, recovery of the consideration is probable, the
associated costs and possible return of goods can be
estimated reliably, there is no continuing management
involvement with the goods, and the amount of revenue
can be measured reliably.
If it is probable that discounts will be granted and the
amount can be measured reliably, then the discount is
recognized as a reduction of revenue as the sales are
recognized. The timing of the transfer of risks and rewards
varies depending on the individual terms of the sales
agreement.
3.4.1.2 Other Income
Gain on disposal of property, plant and equipment and
other non-current assets held by the Group have been
accounted for in the Statement of Comprehensive Income,
after deducting from the net sales proceeds on disposal of
the carrying amount of such 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 Retained
Earnings.
3.4.1.3 Sale and Leaseback Transactions
Any excess of sales proceeds over the carrying amount of
an asset in respect of a sale and leaseback transaction that
results in a finance lease is deferred and amortized over the
lease term.
3.4.1.4 Interest Income
Interest income is recognized as the interest accrued on a
time basis (taking into account the effective yield on the
asset) unless collectability is in doubt.
40
3.4.1.5 Dividend Income
Dividend income is recognized in the Statement of
Comprehensive Income on the date the entity's right to
receive payment is established.
3.4.1.6 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.
3.4.1.7 CER Income
CER income is recognized on accrual basis.
3.4.1.8 Amortization of Government Grants Received
An unconditional government grant related to a biological
asset is recognized in the Statement of Comprehensive
Income as other income when the grant becomes
receivable.
Other government grants are recognized initially as
deferred income at fair value when there is reasonable
assurance that they will be received and the Group will
comply with the conditions associated with the grant and
are then recognize in the Statement of Comprehensive
Income as other income on a systematic basis over the
useful life of the asset.
Grants that compensate the Group for expenses incurred
are recognized in the Statement of Comprehensive
Income as other income on a systematic basis in the same
periods in which the expenses are recognized.
3.4.2 Expenses Recognition
Expenses are recognized in the Statement of
Comprehensive Income 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 the
Statement of Comprehensive Income in arriving at the
profit for the year.
For the purpose of presentation of the Statement of
Comprehensive Income the Directors are of the opinion
that function of expenses method presents fairly the
elements of the Group's performance and hence such
presentation method is adopted.
Preliminary and pre-operational expenditure is recognized
in the Statement of Comprehensive Income.
Repairs and renewals are charged to the Statement of
Comprehensive Income in the year in which the
expenditure is incurred.
FLC HOLDINGS PLC
3.4.3 The Group & Company Profits are stated after:

Providing for all impairment losses and depreciation
of property, plant and equipment.

Charging all expenses incurred in the day-to-day
operations of the business and in maintaining the
property, plant and equipment in a state of efficiency.
3.4.4 Earnings per Share
Earnings per Share represent basic and diluted earnings
per share for its ordinary shares. Basic earnings per share
is calculated by dividing the profit or loss attributable to
ordinary shareholders of the Group & Company by the
weighted average number of ordinary shares outstanding
during the year.
3.4.4
3.7
Earningsreporting
per Share
Segment
Earnings
per Share
represent
and diluted
per share
An
operating
segment
is abasic
component
of earnings
the Group
that
for its ordinary
shares. Basic
earnings
perwhich
share isitcalculated
by
engages
in business
activities
from
may earn
dividing the profit or loss attributable to ordinary shareholders of
revenues and incur expenses. All operating segments
the Group & Company by the weighted average number of
operating
results
are reviewed
regularly
by group's
Board
ordinary shares
outstanding
during
the year. Diluted
earnings
per
ofshare
Directors
to
make
decisions
about
resources
to beto
is determined by adjusting the profit or loss attributable
allocated
the segment
andtheto assess
its performance,
andof
ordinary to
shareholders
and
weighted
average number
for
whichshares
discrete
financialfor
information
available.
ordinary
outstanding,
the effects ofisall
dilutive potential
ordinary shares.
3.5
Accordingly, the segment comprises of Tea, Rubber,
StatementHydro
of CashPower,
Flow Timber, Real Estate, Investment
Coconut,
The Statement of Cash Flow has been prepared using the 'Indirect
Income
and others as described in Note 45.
Method' of preparing Cash Flows in accordance with the LKAS 7
- 'Statement of Cash Flow'.
Diluted earnings per share is determined by adjusting the
profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding,
for the effects of all dilutive potential ordinary shares.
Segment results, assets and liabilities include items
directly
to a segment as well as those that can
Relatedattributable
Party Disclosures
be allocated on a reasonable basis. Segment capital
3.6.1 expenditure
Transactionsiswith
Parties
the Related
total cost
incurred during the period to
The Group
carriesassets
out transactions
in the ordinary
its
acquire
segment
that are expected
to becourse
usedoffor
business
more
thanwith
one parties
period.who are defined as related parties in Sri
Statement of Cash Flow
The Statement of Cash Flow has been prepared using the
'Indirect Method' of preparing Cash Flows in accordance
with the LKAS 7 - 'Statement of Cash Flow'.
3.6.2
3.6
3.5
Lanka Accounting Standard 24. The Pricing applicable to such
transactions is based on the assessment of the risk and pricing
Expenses that cannot be directly identified to a particular
model of the Group and is comparable with what is applied to
segment
allocated
onandbases
decided
by the
transactionsare
between
the Group
its unrelated
Customers.
management and applied consistently throughout the year.
3.8
3.6
Related Party Disclosures
3.6.1 Transactions with Related Parties
The Group carries out transactions in the ordinary course
of its business with parties who are defined as related
parties in Sri Lanka Accounting Standard 24. The Pricing
applicable to such transactions is based on the assessment
of the risk and pricing model of the Group and is
comparable with what is applied to transactions between
the Group and its unrelated Customers.
3.6.2 Transactions with Key Management Personnel
According to Sri Lanka Accounting Standard 24 “Related
Party Disclosures”, Key management personnel, are those
having authority and responsibility for planning, directing
and controlling the activities of the entity. Accordingly, the
Board of Directors (including executive and nonexecutive Directors) and their immediate family members
have been classified as Key Management Personnel of the
Company.
The immediate family member is defined as spouse or
dependent. Dependent is defined as anyone who depends
on the respective Director for more than 50% of his/her
financial needs.
3.9
3.7
Transactions with Key Management Personnel
According
tothe
Sri Date
Lankaof
Accounting
Standard
24 “Related
Party
Events
after
Statement
of Financial
Position
Disclosures”,
Key management
personnel, date
are those
All
material events
since the reporting
have having
been
authority and
for planning,
directing and
considered
andresponsibility
where appropriate
adjustments
or
controlling the
activities
of thein
entity.
Accordingly,
the Board
disclosures
have
been made
the respective
Notes
to theof
Directors (including executive and non-executive Directors) and
their immediate family members have been classified as Key
Management Personnel of the Company.
Contractual Commitments and Contingencies
All
risks are
accounted
forasinspouse
determining
the
Thediscernible
immediate family
member
is defined
or dependent.
amount
of all
known as
liabilities.
Contingent
Liabilities
are
Dependent
is defined
anyone who
depends on
the respective
Director for
more than 50%
of his/her
financial
possible
obligations
whose
existence
willneeds.
be confirmed
only by uncertain future events or present obligations
Segment
where
thereporting
transfer of economic benefit is not probable or
An operating segment is a component of the Group that engages
cannot be reliably measured. Contingent Liabilities are not
in business activities from which it may earn revenues and incur
recognized
in the Statement of Financial Position but are
expenses. All operating segments operating results are reviewed
disclosed
unless
theyBoard
are remote.
regularly by group's
of Directors to make decisions about
resources to be allocated to the segment and to assess its
3.10 Financial
Riskand
Management
performance,
for which discrete financial information is
available.
3.10.1 Overview
Accordingly,
the segment
Rubber, Coconut,
The
Group/Company
hascomprises
exposureoftoTea,
the following
risks
Hydro
Real
Estate, Investment Income and others
from
itsPower,
use ofTimber,
financial
instruments:
as described in Note 45.

Credit risk
Segment
results, assets and liabilities include items directly

Liquidityto
risk
attributable
a segment as well as those that can be allocated on a

Market risk
reasonable
basis. Segment capital expenditure is the total cost
incurred
duringrisk
the period to acquire segment assets that are

Operational
expected to be used for more than one period.
This note presents information about the exposure to each
that cannot
identified
to a particular
segment
ofExpenses
the above
risks, be
thedirectly
Group's
objectives,
policies
and
are allocated on bases decided by the management and applied
processes for measuring and managing risk, and the
consistently throughout the year.
management of capital.
41
FLC HOLDINGS PLC
Further quantitative disclosures are included throughout
these financial statements.
3.4.4
Earnings per Share
Earnings per Share represent basic and diluted earnings per share
for its ordinary shares. Basic earnings per share is calculated by
dividing the profit or loss attributable to ordinary shareholders of
the Group & Company by the weighted average number of
ordinary shares outstanding during the year. Diluted earnings per
share is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of
ordinary shares outstanding, for the effects of all dilutive potential
ordinary shares.
3.5
Statement of Cash Flow
The Statement of Cash Flow has been prepared using the 'Indirect
Method' of preparing Cash Flows in accordance with the LKAS 7
- 'Statement of Cash Flow'.
3.6
3.6.1
Transactions with Related Parties
The Group carries out transactions in the ordinary course of its
business with parties who are defined as related parties in Sri
Lanka Accounting Standard 24. The Pricing applicable to such
transactions is based on the assessment of the risk and pricing
model of the Group and is comparable with what is applied to
transactions between the Group and its unrelated Customers.
3.6.2
Transactions with Key Management Personnel
According to Sri Lanka Accounting Standard 24 “Related Party
Disclosures”, Key management personnel, are those having
authority and responsibility for planning, directing and
controlling the activities of the entity. Accordingly, the Board of
Directors (including executive and non-executive Directors) and
their immediate family members have been classified as Key
Management Personnel of the Company.
3.10.2 Risk management framework
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management
framework. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions
and it's activities.
3.10.3 Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to financial instruments fails to
meet its contractual obligations. Credit risk is mainly
arising from receivables from customers.
3.10.4 Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or
another financial asset.
The Group's approach to managing liquidity is to ensure,
as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due without incurring
unacceptable losses or risking financial position while
maintaining regulatory requirements and debt covenants
agreed with the fund providers. The Group/Company
treasury manages the liquidity position as per the treasury
policies and procedures.
3.10.5 Market risk
The Group's exposes to the market risk due to changes in
market risk such as Foreign exchange rates and Interest
rates.
The immediate family member is defined as spouse or dependent.
Dependent is defined as anyone who depends on the respective
Director for more than 50% of his/her financial needs.
3.7
Segment reporting
An operating segment is a component of the Group that engages
in business activities from which it may earn revenues and incur
expenses. All operating segments operating results are reviewed
regularly by group's Board of Directors to make decisions about
resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is
available.
Accordingly, the segment comprises of Tea, Rubber, Coconut,
Hydro Power, Timber, Real Estate, Investment Income and others
as described in Note 45.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on a
reasonable basis. Segment capital expenditure is the total cost
incurred during the period to acquire segment assets that are
expected to be used for more than one period.
Expenses that cannot be directly identified to a particular segment
are allocated on bases decided by the management and applied
consistently throughout the year.
42
FLC HOLDINGS PLC
Company
Group
2012/13
Rs.
4
4.2
Industry Segment (Revenue)
Tea
Rubber
Coconut
Hydro Power
Others
4.3
Gross Profit
4.4
Industry Segment Gross Profit/(Loss)
Tea
Rubber
Coconut
Hydro Power
Others
6
2011/12
Rs.
6,523,236,786 5,968,863,023
(279,980,056) (249,506,613)
6,243,256,730 5,719,356,410
93,500,000
93,500,000
67,649,999
67,649,999
4,850,875,035 3,995,763,675
1,270,305,563 1,613,335,837
12,861,154
10,495,102
51,370,938
73,085,542
57,844,040
26,676,254
6,243,256,730 5,719,356,410
93,500,000
93,500,000
67,649,999
67,649,999
4,487,521,219 4,257,052,559
735,819,146
803,591,768
8,272,277
7,790,623
62,997,540
61,956,510
15,324,453
27,308,463
5,309,934,635 5,157,699,923
-
-
-
Cost of Sales
4.2.1 Industry Segment (Cost of Sales)
Tea
Rubber
Coconut
Hydro Power
Others
5
2012/13
Rs.
Revenue
Total Revenue
Less : Inter Group Revenue
4.1
2011/12
Rs.
Amortization of Capital Grants
Profit on Sale of Property, Plant and Equipment
Sundry Income
Loss on disposal of Unit Trust
Gain on Changes in Fair Value of Money Market Investments
Dividend Income
Interest Income
363,353,816
534,486,417
4,588,877
(11,626,602)
42,519,587
933,322,095
(261,288,884)
809,744,069
2,704,479
11,129,032
(632,209)
561,656,487
93,500,000
93,500,000
67,649,999
67,649,999
17,153,197
2,418,249
68,900,041
(1,164,971)
7,775,290
157,500
258,441,759
353,681,065
19,596,079
4,596,590
63,084,990
8,147,136
179,991,327
275,416,122
2,757,534
(1,164,971)
7,775,290
199,043,852
208,411,705
1,217,136
129,798,608
131,015,744
1,718,774
1,718,774
-
-
-
Acquisitions of Ceylon Estate Teas (Pvt) Ltd (Subsubsidiary)
Free Lanka Management Co. (Pvt) Ltd, a subsidiary of the Group acquired 99.99% of the voting shares of Ceylon Estate Teas (Pvt) Ltd during the
year.
7
Gain on Changes in Fair Values of Biological Assets
108,012,086
199,489,062
307,501,148
546,680,172
(409,707,101)
136,973,071
-
-
43
FLC HOLDINGS PLC
Company
Group
8
Finance Costs
Interest on Bank Overdrafts
Lease Interest to JEDB/SLSPC
Lease Interest to Others
Interest on Debentures
Interest on Short Term Loans
Interest on Other Loans
Less : Finance Costs capitalized during the Year
9
2012/13
Rs.
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
18,833,053
44,004,961
3,761,051
38,292,974
163,884,471
268,776,510
(65,698,914)
203,077,596
20,220,451
38,204,880
10,327,587
139,682
16,010,437
144,388,251
229,291,288
(56,039,692)
173,251,596
14,288,564
14,288,564
14,288,564
6,071,404
6,071,404
6,071,404
33,651,117
33,192,248
480,000
520,000
8,685,063
195,520,814
90,326,000
307,501,148
7,168,113
215,785,208
136,973,070
445,536
2,539,354
-
401,696
1,011,900
-
3,089,735,346 2,811,648,959
-
-
Profit/(Loss) before tax is stated after charging all expenses including the following.
Directors' Emoluments
Auditors' Remuneration
- Audit Service
Depreciation/Amortization
Gain on Fair Value of Biological Assets
Staff Costs
-Salaries & Wages
-Defined Contribution Plan Costs
EPF, ETF, CPPS and ESPS
- Defined Benefits Plan Costs-Gratuity
- Gratuity Surcharge for the Year
10
395,408,285
217,738,667
13,085,244
-
-
105,223,106
59,283,453
42,975,272
23,725,086
10,696,068
1,082,909
44,917,572
161,919,655
12,417,654
39,797,619
(5,809,479)
105,689,247
6,770,219
(107,000)
49,638,491
4,444,325
28,169,411
(7,037,483)
(7,037,483)
11,132,954
11,132,954
-
-
3,437,299
3,437,299
(78,808,102)
(78,808,102)
-
-
Income Tax Expense
10.1 Current Income Tax Expense
Current Income Tax Expense
Withholding Tax on Dividend from
Associates/Subsidiaries
Income Tax (Over)/Under Provision
Deferred Tax Expenses/(Reversal)
Income Tax Expense
10.2 Deferred Tax Expenses/(Reversal)
a)
Statement of Comprehensive Income
Deferred Tax Expense/(Reversal)
b)
420,628,101
176,923,036
4,860,711
Revaluation of Property, Plant & Equipment
Deferred Tax for the year has been computed at rates applicable to respective subsidiaries of the Group ranging from 12% to 15.62%.
44
FLC HOLDINGS PLC
10.3 Numerical Reconciliation between the Tax Expense/(Income) and the Product of Accounting Profit/(Loss).
Company
Group
2012/13
Rs.
Accounting Profit before Taxation
Less : Exempt Income
(Gain)/Loss on Change in Fair Value of Biological Assets
CER Income
Gain/(Loss) on Disposal of Unit Trust
Gain/(Loss) on Changes in Fair Value of Money Market
Other Exempt Income
Adjustment from SLFRS/LKAS
(Income)/Loss exempt from taxation according to Sec.17 A
by Inland Revenue Act as amended
Aggregate Disallowable Expenses
Aggregate Allowable Expenses
Aggregate Non-Business Income
Aggregate Interest Income
Aggregate Interest Income considered seperately
Aggregate Loss from the business
Aggregate Deductions under Section 32
Taxable Income
Income Tax Expense/(Income) at 10%
Income Tax Expense at 28% (2012/13) & 35% (2011/12)
Dividend Tax on Dividend received from Subsidiaries
Current Income Tax Expense/(Income)
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
467,438,422
(136,973,072)
18,681,575
(207,486,570)
141,635,790
271,399,874
1,164,971
(7,775,290)
(107,040,765)
-
181,753,842
(1,217,136)
(75,377,047)
(122,576)
1,769,212
4,355,445
-
-
703,004,352
287,651,590
157,748,790
105,037,083
550,489,271
(970,414,917)
104,997,626
289,359,709
(289,359,709)
35,826,978
(96,989,430)
326,913,880
549,015,467
(832,394,025)
(70,767,210)
506,492,964
(113,622,120)
27,004,692
(82,689,285)
270,692,073
22,818,611
82,404,495
10,696,068
115,919,174
27,861,301
31,422,152
12,417,654
71,701,107
1,151,442,739
2,210,504
(307,501,149)
20,464,038
(165,380,992)
-
2,549,354
2,449,000
(44,813)
(19,312)
199,043,851 129,676,033
(199,043,851) (129,676,033)
14,482,214
- (32,772,214)
160,253,331
89,176,771
42,975,272
6,770,219
49,745,491
23,725,086
4,444,325
28,169,411
The Group tax expense is based on the Taxable Profits of the individual companies within the Group. At present, tax laws of Sri Lanka do not provide for
the group Taxation.
Company
Group
10.4 Tax Losses Carried Forward
2012/13
Rs.
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
Tax Losses Brought Forward
Less: Adjustments on Finalization of Tax Liability
2,478,243,364
-
2,231,744,116
4,167,475
-
18,290,000
-
Utilization of Tax Losses
(12,063,829)
2,466,179,535
214,704,456
2,680,883,991
(82,718,814)
2,153,192,777
325,050,58
2,478,243,364
-
(18,290,000)
-
Add: Tax Losses for the Year
10.5 Applicable Rates of Income Tax
In terms of section 46 - 1 of the Inland Revenue (Amendment) Act No. 22 of 2011, any undertaking with an annual turnover not exceeding Rs.
300,000,000/- other than buying and selling activities would be liable for Income Tax rate at 10%.
In terms of section 48A-14A of the Inland Revenue (Amendment) Act No. 22 of 2011, "Specified Profit from Agriculture undertaking" would be
liable for Income Tax rate at 10%. The corporate tax rate applicable to manufacture and Other Income is 28%.
The tax liability of Resident Companies of the Group have been computed at the standard rates except for the following companies which
enjoy full or partial tax exemptions and concessions.
F L C Properties (Pvt) Ltd
Thebuwana Hydro Power (Pvt) Ltd
Stellenberg Hydro Power (Pvt) Ltd
-
Subsidiary
Sub subsidiary
Sub subsidiary
45
FLC HOLDINGS PLC
11
Earnings/(Loss) per Ordinary Share
11.1 Basic Earnings/(Loss) per Ordinary Share
The computation of the Basic Earnings/(Loss) per Ordinary Share has been done based on Net Profit/(Loss) attributable to ordinary shareholders
for the year divided by weighted average number of ordinary shares in issue as at the Balance Sheet date and calculated as follows.
Company
Group
2012/13
Rs.
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
555,140,404
46,463,761
221,761,383
153,584,431
1,368,000,000
1,368,000,000
0.406
0.034
0.162
0.112
558,188,933
(3,048,529)
555,140,404
49,512,290
(3,048,529)
46,463,761
221,761,383
221,761,383
153,584,431
153,584,431
Amounts used as the Numerator
Net Profit Attributable to
Ordinary Shareholders (11.2)
Amount used as the Denominator
Weighted Average Number of
Ordinary Shares in Issue
Basic Earnings per Ordinary Share (Rs.)
1,368,000,000 1,368,000,000
11.2 Net Profit Attributable to Ordinary Shareholders
Net Profit as per Statement of Comprehensive Income
Less: Dividends on Cumulative Preference Shares
11.3 Diluted Earnings/(Loss) Per Ordinary Share
The calculation of Diluted Earnings/(Loss) per Ordinary Share is based on Net Profit attributable to ordinary shareholders and weighted average
number of ordinary shares outstanding after adjustment for the effect of all dilutive potential ordinary shares. There were no potentially dilutive shares
outstanding at any time during the year/previous year.
12
Dividend per Ordinary Share
Company
Group
12.1 First & Final Dividends for 2011/12
At Rs.05 per ordinary Share out of Profit of 2011/12
12.2 Interim Dividends for 2012/13
At Rs.0.05 per ordinary share out of profits as at 31st March,
2012 and at Rs. 0.10 per ordinary share out of profits
for the year ended 31st March 2013
Dividend Per Ordinary Share (Rs.)
46
2012/13
Rs.
2011/12
Rs.
2012/13
Rs.
2011/12
Rs.
68,400,000
-
68,400,000
-
205,200,000
273,600,000
-
205,200,000
273,600,000
-
0.20
-
0.20
-
FLC HOLDINGS PLC
13
Leasehold Property
Lease agreements of all JEDB/SLSPC estates handed over to the Company's Sub Subsidiaries have been executed to date. All of these lease are
retroactive to 15th/22nd June 1992, the dates of formation of the Company's Sub Subsidiaries. The leasehold rights to the bare land on all of these
estates have been taken into the books of the Company's Sub Subsidiaries on 15th/22nd June 1992, immediately after formation of the Company's
Sub Subsidiaries, 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, Board of the company's Sub Subsidiaries decided at its meetings that lease bare land would be revalued at the value established
for this land by Valuation Specialist Dr. Wickramasinghe just prior to the formation of the Company's Sub Subsidiaries. The values as at 22nd June
1992 and 15th June 1992 were taken in to the books of Maturata Plantations Limited and Pussellawa Plantations Limited
respectively.
Company
Group
13 (a).1 Capitalized Value
(15th/22nd June 1992 )
Leasehold Rights Acquired/
Revalued
Balance as at 31st March
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
642,856,059
642,856,059
642,856,059
-
-
-
684,781,696
684,781,696
684,781,696
684,781,696
684,781,696
684,781,696
-
-
-
175,980,969
160,652,597
145,506,416
-
-
-
13 (a).2 Accumulated Amortization
Accumulated Amortization at the
beginning of the Year
Add :
Amount amortized during the Year
Accumulated Amortization
at the end of the Year
15,328,404
15,328,372
15,146,181
-
-
-
191,309,373
175,980,969
160,652,597
-
-
-
13 (a).3 Total Net Carrying Value
493,472,323
508,800,727
524,129,099
-
-
-
The Leasehold Rights to Bare Land of JEDB/SLSPC Estates is being amortized by equal amounts over a 53 year period and the unexpired period of
the lease as at the Financial Position date is 32.25 years.
13 (b) Maturata Plantations Limited
Since the fair value of revalued assets differs materially from its carrying amount, the Board of Directors of Maturata Plantations Limited, a
company's Sub-subsidiary, on 20th December 2005 has decided a further revaluation to be carried out as at 31st December 2005. The net amounts
have been restated to the new valuation carried out by an independent and qualified valuer, Mr.K.Arthur Perera. The values of Bare land which was
not subjected to a land survey has been based on the current freehold bare land values which varies from District to District and estate to estate
depending on demand. The freehold values have been converted into leasehold value depending on the balance period of the lease. The revised
UITF ruling does not permit further revaluation of Leasehold lands.
47
FLC HOLDINGS PLC
13 (c) Carrying Value of Revalued Leasehold Property of Maturata Plantations Limited (MPL) at Cost Model-Group
The carrying value of Leasehold Right to bare Land of JEDB/SLSPC Estates of MPL that would have been included in the Financial Statements
as at 31st March 2013 had the asset been carried at initial valuation less accumulated amortization is as follows.
W.D.V
As at
31.03.2013
Rs.
Leasehold Right to Bare Land of JEDB/SLSPC Estates
200,207,631
200,207,631
W.D.V
As at
31.03.2012
Rs.
W.D.V
As at
01.04.2011
Rs.
206,420,633 212,633,635
206,420,633 212,633,635
13 (d) Maturata Plantations Ltd/Pussellawa Plantations Ltd
Leasehold Rights to Bare Land of JEDB/SLSPC Estate Assets and Immovable (JEDB/SLSPC) Estates Assets on Finance Lease
Leasehold Rights to Bare Land of JEDB/SLSPC Estate Assets and Immovable (JEDB/SLSPC) Estates Assets on Finance Lease obtained on a
long term basis, are stated at the recorded carrying values as at the effective date of Sri Lanka Accounting Standard No.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 amortized over the
remaining lease term or useful life of such asset whichever is shorter.
The Institute of Chartered Accountants of Sri Lanka (ICASL) has issued a Statement of Recommended Practice (SORP) to be effective from
01st January, 2012 for "Right-to-use of Land" on Lease on 19th December, 2012.
The Group followed "Urgent Issue Task Force (UITF) rulings" issued prior to 01st January, 2012 since SORP issued by ICASL has not been
finalized as at the date of the audit report which has however been superseded by Sri Lanka Accounting Framework effective from 01st January,
2012.
13(e) Land Acquired/ in the Process of being Acquired by the Government & Divested as at 31st March 2013
Maturata Plantations Limited
The Government of Sri Lanka has already acquired a total land extent of 223.1445 hectares and also in the process of being acquired a further
land extent of 877.3567 hectares.
Land divested is totalling to 822.00 hectares.
No adjustments have been made to the Financial statements in respect of the land acquired as the compensation receivable on the major
acquisitions are not known and the transactions pertaining to those acquisitions have been incomplete as at the date of statement of financial
position.
Pussellawa Plantations Ltd
The Government has acquired 50.3285 Hect of Pitipana Estate, Homagama under the Section 2 of the Urban Development Authority
[Special Projects] act through section 38[a] for town development by Extra Ordinary Gazette notification no.1539/9 dated 03rd March 2008.
Pussellawa Plantations filed a fundamental Rights case against the Minister of Lands and Land Development at Supreme Courts stating that the
Gazette notification is illegal, null and void which is pending as at the date of statement of financial position. No adjustments have been made to
the written down book value in respect of the acquisitions referred above as the compensation is receivable by the company on the land
acquired as per the Lease Agreement.
48
FLC HOLDINGS PLC
14
Investment Property
Company
Group
Land
Balance as at 01st April
Add: Addition
Gain on fair value of
investment properties
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
181,674,000
-
181,674,000
-
181,674,000
-
-
-
90,326,000
272,000,000
181,674,000
181,674,000
-
-
-
This represents the property owned by F L C Properties (Pvt) Ltd a fully owned subsidiary of the Group having a land extent of 49.50 perches and
bearing Assessment No. 19, Dudley Senanayake Mawatha, Colombo 08. The Group has adopted Fair Value Model for Investment Property as per
the Sri Lanka Accounting Standard LKAS 40. The group has engaged an Independent Valuer Mr.W. M .Chandrasena, a member of the Institute of
Valuers of Sri Lanka in determining the fair value as at 31st March' 2013 of the said Investment Property.
15
Company
Group
Notes
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As At
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
Immovable ( JEDB/SLSPC )
Assets on Finance Lease
(Other than Bare Land)
15 (a)
23,590,021
28,504,755
33,942,282
-
-
-
Tangible Assets other than
Biological Assets
15 (b)
1,703,383,213
1,758,815,602
1,779,259,777
14,205,495
9,065,350
-
Capital Work-In-Progress
15 (c)
685,254,445
233,351,647
74,502,043
-
-
-
2,412,227,679
2,020,672,004
1,887,704,102
14,205,495
9,065,350
-
49
50
15 (a)
888,869
888,869
888,869
888,869
As at 01st April 2011
As at 31st March 2012
334,502
364,131
15 (a) .4Written Down Value as at
31st March 2012
01stApril 2011
554,367
29,629
583,996
Charges for the year
304,873
554,367
31st March 2013
524,738
29,629
Charge for the Year
15 (a) .2 Amortization
888,869
2,583,421
2,355,290
2,127,160
4,488,635
228,130
4,716,765
4,488,635
4,260,504
228,131
6,843,925
6,843,925
6,843,925
6,843,925
6,843,925
Rs.
Rs.
15 (a) .1Capitalized Value
(15th/22nd June 1992)
Improvements
To Land
Vested
Unimproved
Land
28,404,822
23,870,173
19,335,524
89,496,052
4,534,649
94,030,701
89,496,052
84,961,403
4,534,649
113,366,225
113,366,225
113,366,225
113,366,225
113,366,225
Rs.
Buildings
-
-
-
27,872,377
27,872,377
27,872,377
27,872,377
-
27,872,377
27,872,377
27,872,377
27,872,377
27,872,377
Rs.
Machinery
601,630
112,972
97,128
16,270,070
15,844
16,285,914
16,270,070
15,781,412
488,658
16,383,042
16,383,042
16,383,042
16,383,042
16,383,042
Rs.
323,409
313,960
304,511
186,819
9,449
196,268
186,819
177,370
9,449
500,779
500,779
500,779
500,779
500,779
Rs.
488,282
445,739
403,174
830,895
42,565
873,460
830,895
788,352
42,543
1,276,634
1,276,634
1,276,634
1,276,634
1,276,634
Rs.
Permanent
Water
Land
Roads
Sanitation Development and Bridges
1,176,587
1,072,119
1,017,651
3,385,399
54,468
3,439,867
3,385,399
3,280,931
104,468
4,457,518
4,457,518
4,457,518
4,457,518
4,457,518
Rs.
Other
Vested
Assets
33,942,282
28,504,755
23,590,021
143,084,614
4,914,734
147,999,348
143,084,614
137,647,087
5,437,527
171,589,369
171,589,369
171,589,369
171,589,369
171,589,369
Rs.
Total
Immovable (JEDB/SLSPC) Assetes on Finance Lease (Other than Bare Land)-Group
As more fully explained in Note 13, all JEDB/SLSPC estate lease deeds have been executed to date. In terms of the ruling of the UITF of the Institute of Chartered Accountants of Sri Lanka, all
th
nd
immovable assets in the JEDP/SLSPC estates under finance leases have been taken into the books of the Company's Subsidiaries retroactive to 15 /22 June 1992. For this purpose, the Board
of Company's Subsidiaries decided at their meetings, that these assets be revalued 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's Subsidiaries. These assets are taken into the Statement of Financial Position of Company's Subsidiaries as at 15th/22nd June 1992 and depreciated as follows:
51
-
Transferred In/(Out)
875,850,946
-
15 (b).1.2
Assets on
Finance Leases
Additions
Disposals
15 (b).1.3 Total Gross
Carrying Amount
761,582,904
875,850,946
775,952,904
26,926,000
(12,556,000)
14,370,000
52,457,979
(25,531,979)
26,926,000
748,304,176
10,746,793
(10,024,065)
12,556,000
-
849,287,436
26,545,510
18,000
-
Additions
written off
Disposals
Acquisitions through
Sub-subsidiary
690,328,399
32,443,798
25,531,979
748,304,176
799,732,330
49,555,106
849,287,436
Rs.
Rs.
Additions
Transferred In/ (Out)
Disposals
15 (b).1.1 At Cost
Plant and
Machinery
Land
and
Buildings
15 (b).1 Gross Carrying Amount
15 (b) Tangible Assets other than Biological Assets-Group
432,667,869
27,810,600
(5,250,000)
22,560,600
27,083,600
3,512,000
(2,785,000)
27,810,600
320,937
410,107,269
384,334,655
21,742,276
5,250,000
(1,540,599)
365,952,293
27,876,449
(9,494,087)
384,334,655
Rs.
Motor
Vehicles
380,886,551
-
-
462,174
380,886,551
378,456,185
4,826,729
(18,000)
(2,840,537)
374,107,596
4,397,857
(31,443)
(17,825)
378,456,185
Rs.
Rs.
-
-
8,891,393 38,441,145
-
-
- 1,315,168
8,891,393 38,441,145
7,665,593 36,296,225
1,225,800 1,264,583
- (434,831)
7,139,542 28,965,465
526,051 7,299,338
31,422
7,665,593 36,296,225
Rs.
Equipment Computers
Rs.
-
-
8,755,028 46,721,126
-
-
8,755,028 46,721,126
8,664,928 45,134,753
90,100 1,586,373
-
8,499,728 44,538,639
165,200
596,114
8,664,928 45,134,753
Rs.
Furniture
Water
and Ergonomic Sanitations
Fittings Equipment and Others
Rs.
Rs.
Penstock
Pipe
Line
-
-
-
-
60,809,638 144,666,386 153,312,150
-
-
60,809,638 144,666,386 153,312,150
60,482,149 140,966,675 153,312,150
327,489
3,699,711
-
58,658,067 137,581,890 152,000,000
1,824,082
3,384,785
1,312,150
60,482,149 140,966,675 153,312,150
Rs.
Land
Development Roads and
Costs
Bridges
3,096,862
-
-
3,096,862
3,096,862
-
2,761,000
335,862
3,096,862
Rs.
Security
Fences
2,930,051,998
54,736,600
(17,806,000)
36,930,600
79,541,579
3,512,000
(2,785,000)
(25,531,979)
54,736,600
2,098,279
2,893,121,398
2,816,001,787
72,055,364
(10,024,065)
17,806,000
(4,815,967)
2,670,264,949
129,716,792
25,531,958
(9,511,912)
2,816,001,787
Rs.
Total
52
Depreciation
146,831,352
729,019,594
727,063,536
701,054,507
Charge for the Year
Total Depreciation
15 (b).3 Written Down
Value as at
31st March 2013
15(b).4 Written
Down Value as at
31st March 2012
15 (b).5Written Down
Value as at
01st April 2011
335,910,729
327,836,223
298,476,403
6,427,162
(4,108,075)
1,063,850
3,382,937
477,476,501
104,764,068
92,222,023
93,259,018
11,864,980
(3,412,500)
5,302,390
13,754,870
339,408,851
7,544,160
(1,578,167)
5,898,987
11,864,980
149,342
16,209,643
325,653,981
308,058,252
(2,175,756)
3,412,500
280,727,644
(6,594,104)
33,924,712
308,058,252
Rs.
Motor
Vehicles
268,778,211
247,164,591
227,375,856
153,510,695
-
180,587
25,069,556
153,510,695
131,291,594
(3,031,042)
-
105,329,385
(9,624)
(21,894)
25,993,727
131,291,594
Rs.
Rs.
-
1,804,211
9,787,149
1,281,932 14,732,114
1,382,989 14,426,090
7,508,404 24,015,055
-
383,753
1,124,743 2,383,379
7,508,404 24,015,055
6,383,661 21,564,111
- (316,188)
-
5,335,331 19,178,316
21,894
1,048,330 2,363,901
6,383,661 21,564,111
Rs.
Equipment Computers
Rs..
-
3,631,454 22,903,489
2,389,394 20,549,525
1,266,373 20,153,731
7,488,655 26,567,395
-
1,213,121 1,982,167
7,488,655 26,567,395
6,275,534 24,585,228
-
4,868,274 21,635,150
1,407,260 2,950,078
6,275,534 24,585,228
Rs.
Furniture
Water
and Ergonomic Sanitations
Fittings Equipment and Others
12,240,557
-
2,765,917
12,240,557
9,474,640
-
6,411,479
3,063,161
9,474,640
Rs.
22,887,477
-
7,665,608
22,887,477
15,221,869
-
7,600,000
7,621,869
15,221,869
Rs.
Penstock
Pipe
Line
54,978,804 131,170,411 144,400,000
55,676,731 131,492,035 138,090,281
54,855,440 132,425,829 130,424,673
5,954,198
-
-
1,148,780
5,954,198
4,805,418
-
3,679,263
1,126,155
4,805,418
Rs.
Land
Development Roads and
Costs
Bridges
76,744
317,217
317,217
2,779,645
-
2,779,645
2,779,645
-
2,684,256
95,389
2,779,645
Rs.
Security
Fences
1,779,259,777
1,758,815,602
1,703,383,213
18,292,142
(7,520,575)
6,366,240
17,137,807
1,226,668,785
21,504,598
(10,413,253)
(1,578,167)
8,778,964
18,292,142
713,682
118,446,067
1,209,530,978
1,093,630,643
(5,525,861)
(5,254,128)
7,520,575
949,042,132
(6,603,728)
10,413,253
140,778,986
1,093,630,643
Rs.
Total
15 (b).6 Land Land represents an extent of 345.0 purches with a cost of Rs. 8,762,694/= belonging to Pussellawa Plantations Ltd a Sub-Subsidiary, located at Thebuwana, Keragalla, Kuruwita.
The useful lives of Plant & Machinery and Motor Vehicles have been reassessed as set out in the accounting policies 3.2.1 on Depreciation and Amortisation, as required by the SLFRS.
The cost of fully depreciated Property, Plant & Equipment of the Company's Sub Subsidiaries which are still in use as at the date of the statements of financial position is Rs. 514,585,543/= (2012/11- Rs. 474,980,847/=)
These Immovable/Movable assets vested in the Company's Sub Subsidiaries namely Maturata Plantations Ltd and Pussellawa Plantations Ltd by Gazette Notification on the date of formation of the Company's Sub
Subsidiaries and all the investments made in the tangible assets by the Company's Sub Subsidiaries since their formation have been classified as above. The assets taken over by way of finance leases by the Company's Sub
Subsidiaries are set out in Notes 13 and 15(a).
-
On Disposals
Charge for the Year
13,960,438
(10,413,253)
2,879,977
6,427,162
34,272,826
474,093,564
24,610,327
146,831,352
15 (b).2.2Assets on Finance Leases
440,966,791
(5,254,128)
4,108,075
122,223,900
(2,875)
-
On Disposals
Written off
Acquisitions through
Sub-subsidiary
Charge for the Year
392,915,211
10,413,253
37,638,327
440,966,791
Rs.
Plant and
Machinery
98,677,823
23,546,077
122,223,900
Rs.
Land
and
Buildings
As at 1 April 2011
On Disposals
Charge for the Year
st
15 (b).2.1 At Cost
15 (b).2
FLC HOLDINGS PLC
Tangible Assets other than Biological Assets - Company
15 (b).7
Gross Carrying Amount
Motor
Vehicles
Rs.
Computers
Rs.
Total
Rs.
Additions
10,000,000
10,000,000
77,250
77,250
10,077,250
10,077,250
Additions
10,000,000
7,577,500
17,577,500
77,250
102,000
179,250
10,077,250
7,679,500
17,756,750
15 (b).7.2 Total Gross Carrying Amount
17,577,500
179,250
17,756,750
15 (b).8.1 At Cost
Charge for the Year
1,000,000
1,000,000
11,900
11,900
1,011,900
1,011,900
Charge for the Year
1,000,000
2,505,167
3,505,167
11,900
34,188
46,088
1,011,900
2,539,355
3,551,255
15 (b).8.2 Written Down Value as at 31st March 2013
14,072,333
133,162
14,205,495
15 (b).8.3 Written Down Value as at 31st March 2012
9,000,000
65,350
9,065,350
-
-
-
15 (b).7.1 At Cost
15 (b).8
Depreciation
15 (b).8.4 Written Down Value as at 01st April 2011
Group
15 (c)
Capital Work-In-Progress
Add: Amount Incurred during the Year
Less: Amount Capitalized during the Year
15 (c).1
15 (d)
Class of Asset-wise Break-up
Buildings
Plant and Machinery
Commercial Building Complex
Water Sanitation
Roads and Bridges
Mini Hydro Power
Others
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
233,351,647
485,985,677
719,337,324
(34,082,879)
685,254,445
74,502,043
230,943,794
305,445,837
(72,094,190)
233,351,647
24,152,600
293,052,016
396,393
14,074,879
352,946,810
631,747
685,254,445
20,125,823
737,670
48,911,744
388,323
16,179,463
143,810,194
3,198,430
233,351,647
Property, Plant and Equipment Pledged as Collaterals
Property, Plant and Equipment pledged by the group as collaterals to obtain financial assistance from various financial institutions have
been disclosed in Note 44 to the financial statements.
53
FLC HOLDINGS PLC
As at 31.03.2013
16
Bearer Biological Assets-Group
16.1.1
At Cost
As at 31.03.2012
Tea
Rs.
Others
Rs.
Total
Rs.
Tea
Rs.
Others
Rs.
Total
Rs.
371,934,362
371,934,362
-
371,934,362
371,934,362
371,934,362
371,934,362
-
371,934,362
371,934,362
226,639,232
12,250,193
238,889,425
-
226,639,232
12,250,193
238,889,425
214,344,048
12,295,184
226,639,232
-
214,344,048
12,295,184
226,639,232
-
133,044,937
145,295,130
-
145,295,130
334,351,001
111,100,410
(70,694,252)
374,757,159
13,791,038
45,592,637
(1,488,189)
57,895,486
348,142,040
156,693,047
(70,694,252)
(1,488,189)
432,652,646
392,675,035
134,949,309
(193,273,343)
334,351,001
5,834,383
8,448,401
(491,745)
13,791,038
398,509,418
143,397,710
(193,765,088)
348,142,040
Mature Plantations
st
Balance as at 01 April
Transfer In
st
Balance as at 31 March
1,199,243,855
70,694,252
1,269,938,107
3,499,889
3,499,889
1,202,743,743
70,694,252
1,273,437,995
1,005,970,512
193,273,343
1,199,243,855
3,008,144
491,745
3,499,889
1,008,978,656
193,765,088
1,202,743,743
Depreciation
st
Charge for the year
st
269,112,574
37,377,574
306,490,148
713,840
837,603
1,551,443
269,826,414
38,215,177
308,041,591
236,037,429
33,075,145
269,112,574
622,811
91,029
713,840
236,660,241
33,166,174
269,826,414
Written Down Value as at
st
31 March
1,338,205,118
59,843,932
1,398,049,050
1,264,482,282
16,577,087
1,281,059,369
16.1.1.3 Growing Crop Nurseries
st
Increase/(Decrease)
14,633,538
(469,852)
14,163,686
7,415,514
(6,191,157)
1,224,357
22,049,052
(6,661,009)
15,388,043
9,403,856
5,229,682
14,633,538
2,732,407
4,683,107
7,415,514
12,136,263
9,912,789
22,049,052
16.1.1.1 On Finance Lease
st
Amortisation
st
Amortisation for the year
st
st
Written Down Value as at 31 March 133,044,937
16.1.1.2 Investments by the Group
Immature Plantations
st
Additions
Transfer Out
Written off
st
As at 31.03.2013
16.1.2
As at 31.03.2012
At Fair Value
Rubber
Rs.
Coconut
Rs.
Total
Rs.
Rubber
Rs.
Coconut
Rs.
Total
Rs.
1,580,572,367
(99,106,922)
(42,884,739)
1,438,580,706
26,003,869
(350,000)
1,573,975
27,227,844
1,606,576,236
(99,456,922)
(41,310,764)
1,465,808,550
1,388,373,519
(99,887,333)
292,086,181
1,580,572,367
25,133,617
870,252
26,003,869
1,413,507,136
(99,887,333)
292,956,433
1,606,576,236
16.1.2.2 Investments by the Group
3,657,946,033
Additions
389,489,725
Grants Received on Immature Rubber (10,625,350)
Gain/(Loss) on Fair valuation
150,118,186
st
Carrying value as at 31 March
4,186,928,594
28,690,844
162,546
(795,336)
28,058,054
3,686,636,876
389,652,271
(10,625,350)
149,322,850
4,214,986,647
3,071,533,851
359,868,491
(26,640,866)
253,184,557
3,657,946,033
27,738,818
412,844
539,182
28,690,844
3,099,272,669
360,281,334
(26,640,866)
253,723,739
3,686,636,876
7,864,376
835,581
8,699,957
-
7,864,376
835,581
8,699,957
8,523,333
(658,957)
7,864,376
-
8,523,333
(658,957)
7,864,376
5,634,209,257
55,285,898
5,689,495,154
5,246,382,776
54,694,713
5,301,077,488
7,119,622,997
116,354,187
7,235,977,184
6,670,793,725
78,687,314
6,749,481,039
5,798,032,991
63,824,557
5,861,857,548
16.1.2.1 On Finance Lease
st
Decrease due to sale
Gain/(Loss) on Fair Valuation
Fair value as at 31st March
16.1.2.3 Growing Crop Nurseries
st
Increase/(Decrease)
st
st
Carrying Value as at 31 March
(Note 16.1.2.4)
st
st
Carrying value as at 01 April 2011
54
FLC HOLDINGS PLC
As at 31.03.2013
Rubber
Rs.
16.1.2.4 Carrying Value as per the Valuation
3,878,564,794
Report as at 31st March
Add: Cost of Plants below six
years of age as at 31st March not
1,746,944,506
considered for Valuation
8,699,957
Carrying Value as at 31st March 5,634,209,257
As at 31.03.2012
Coconut
Rs.
Total
Rs.
Rubber
Rs.
Coconut
Rs.
Total
Rs.
55,285,898
3,933,850,692
3,865,732,742
50,573,629
3,916,306,371
55,285,898
1,746,944,505
8,699,957
5,689,495,154
1,372,785,658
7,864,376
5,246,382,776
4,121,084
54,694,713
1,376,906,742
7,864,376
5,301,077,488
Maturata Plantations Ltd/Pussellawa Plantations Ltd
16.2
Borrowing Costs amounting to Rs 65,698,914/= ( Previous Year - Rs 56,039,692/= ) incurred on borrowings obtained to meet expenses relating
to bearer biological Assets have been capitalized.
Capitalization of borrowing costs will cease when the bearer biological Assets are ready for bearing.
16.3
Bearer biological assets, namely Rubber and Coconut plantations are recognized at its fair value less cost to sell under LKAS 41 - Agriculture.
However, the Group's Sub Subsidiaries measure Tea and Other Bearer Biological Assets at cost using LKAS 16 - Property Plant & Equipment in
accordance with the new ruling issued by the Institute of Chartered Accountants of Sri Lanka dated 2nd March 2012, due to the impracticability of
carrying out proper fair valuation.
16.4
Rubber and Coconut plantations as at 31st March 2013 of the Group's Sub Subsidiaries were valued by Mr K.T.D. Tissera, an independent
Chartered Valuation Surveyor as per the Valuation Report dated 15th April 2013 having separately valued latex/crop and timber components
st
based on the physically verified statistics on a field by field basis. Rubber and Coconut plantations were retrospectively valued as at 31 March
st
2012 and 31 March 2011 by the same Chartered valuation Surveyor on a field by field basis.
16.5
The valuation has been prepared in respect of each estate separately for the latex/nuts and the timber component of the Rubber/ Coconut
plantation.
15.6
The Rubber and Coconut plants having below six years of age as at the date of financial position have been taken at cost.
16.7
The valuer has valued the latex/nuts component of Rubber, and Coconut using the forecast crop, prices and cost of production based on past
statistics on the basis of net present value of expected future cash flows using a discount rate of 20% per annum (i.e. 8% Risk Free Rate plus 4%
Risk Premium plus 8% Inflation). The scrap value, being the timber component of trees is valued by using the available log prices in city centers
less point-of-sale-costs on the basis of net present value of expected future cash flows using a discount rate of 12% per annum.
16.8
In valuing the Rubber and Coconut plantations, under-mentioned factors have been taken into consideration.
1 The present age of trees and yields of each separate field.
2 Maturity age of the trees.
3 Number of years remaining to harvest.
4 Rubber/Coconut Plants having below six years of age have not been taken into the valuation.
5 Past prices of latex and Coconut for forecasting future price trend and the current market price of timber as per the available
log prices in city centers less point-of-sale-costs to determine the value of timber component.
6 Field level cost to determine the cost of production of latex and Coconut.
7 Annual yield level is estimated and derived based on last year's yield.
16.9
The significant assumptions used in the valuation of Rubber and Coconut plantations are as follows:
a) Future cash flows of timber component of Rubber and Coconut are determined by references to current timber prices without considering
the inflationary effect.
b) The ongoing cost of growing trees which are deducted in determining the net cash flows are constant in real terms.
c) Rubber/Coconut Plants have been valued working out the period that would take for those trees to be harvested.
d) Due consideration has been given for cost of felling and transport.
55
FLC HOLDINGS PLC
16.10 Sensitivity Analysis-Group
Sensitivity Variation on Sales Price
Values as appearing in the Statement of Financial Position are very sensitive to price changes with regard to the average sales prices
applied. Simulations made for rubber show that a rise or decrease by 10% of the estimated future selling price has the following effect
on the net present value of biological assets:
Rubber
Variance
Rs.
Variance
Rs.
-10%
(387,856,471)
+10%
387,856,471
Sensitivity Variation on Discount Rate
Values as appearing in the Statement of Financial Position are very sensitive to changes of the discount rate applied. Simulations made
for rubber show that a rise or decrease by 1% of the estimated future discount rate has the following effect on the net present value of
biological assets:
st
As at 31 March 2013
Rubber
56
Rs.
Rs.
-1%
186,067,545
+1%
(169,996,203)
FLC HOLDINGS PLC
17
Consumable Biological Assets-Group
st
Increase due to New Planting
Decrease due to Sale
Increase/(Decrease) in Growing Crop Nurseries
Gain/(Loss) on Fair Valuation
st
The carrying value of Timber Stocks as at year end has been computed as follows.
Carrying Value of Timber Stocks as per the Valuation Report as at 31st March
Add: Cost of Timber Plants below three years of age
st
as at 31 March not considered for Valuation
st
Carrying Value as at 31 March
As at
31.03.2013
Rs.
As at
31.03.2012
Rs
5,546,869,672
38,726,075
(42,550,963)
(147,582)
5,542,897,202
199,489,061
5,742,386,263
5,970,698,114
42,604,408
(56,816,816)
91,066
5,956,576,772
(409,707,100)
5,546,869,672
5,680,782,310
5,427,385,321
59,713,119
1,890,834
5,742,386,263
117,445,935
2,038,416
5,546,869,672
17.1 Maturata Plantations Ltd/Pussellawa Plantations Ltd
st
The Consumable Biological Assets as at 31 March 2013 of the Group was valued by Mr K.T D Tissera, an independent
Chartered Valuation Surveyor as per the Valuation Report dated 24th April 2013 prepared on the physically verified timber
st
statistics on a tree by tree basis. The timber trees were valued as at 31 March 2012 by the same Chartered valuation Surveyor on a
tree by tree basis. The value of trees transferred after three years, from cost to fair value have been valued on field / block basis by
discounting the value of expected timber content of trees at the time of harvest. It is expected that only 60% of the presently
available trees will remain on the field at the time of final harvest.
The Group has valued the Consumable Biological Assets consisting of trees over 3 years of age, which have been properly
established in the fields at fair value less estimated point-of-sale-costs. The direct cost attributable to new/ re-planting pertaining
to trees having three years or less have been added to the Consumable Biological Assets.
Timber Trees namely Eucalyptus Torariyana, Albezzia, Graveelia, Eucalyptus Grandis, Astonia, Pinus, Toona, Mahogany, Teak,
Jack, Turpentine, Nadun, Mango, Pellen, Hora, Lunumidella, Mara etc. available on the plantations have been taken into
consideration in this valuation of Timber Trees.
In valuing the Consumable Biological Assets, under-mentioned factors have been taken into consideration.
1
Present age of trees
2
Maturity age of tree.
Maturity of tree is based on the variety of the species of the tree.
3
Annual marginal increase in timber content.
4
Number of years to harvest
5
Timber content of harvestable trees on maturity.
6
Timber Plants having below three years of age have not been taken into the valuation.
7
The timber content of immature trees at an estimated future harvestable year
8
The current price of species of timber per cubic foot at the relevent year.
Trees have been valued as per the current timber prices in the domestic market based on the price list of the State Timber
Corporation and prices of timber trees sold by estates and prices of logs and sawn timber in the popular timber traders in Sri
Lanka. The fair value is determined on the basis of net present value of expected future cash flows using a discount rate of
12% per annum.
57
FLC HOLDINGS PLC
The significant assumptions used in the valuation of Consumable Biological Assets are as follows:
a)
Future cash flows are determined by references to current timber prices without considering the inflationery effect.
b)
The ongoing cost of growing trees which are deducted in determining the net cash flows are constant in real terms.
c)
Timber Trees that have not come upto a harvestable size are valued working out the period that would take for those trees
to grow up to a harvestable size.
d)
The Present Value of Trees is worked out based on the projected size and the estimated number of years it would take to
reach the size. This is worked out on the basis of an annual marginal increase of Timber content which normally ranges
from 0.50 to 1.50 cm per year for trees of diameter girth over 10 cm.
e)
The value of each matured species of timber is worked out on the price of a cubic foot of timber in the market of the
species and the available cubic content of timber in the tree.
f)
Due consideration has been given for cost of felling, transport, sawing, cost to sell including obtaining of approval for
felling.
17.2 Sensitivity Analysis-Group
Sensitivity Variation on Sales Price
Values as appearing in the Statement of Financial Position are very sensitive to price changes with regard to the average sales
prices applied. Simulations made for timber show that a rise or decrease by 10% of the estimated future selling price has the
following effect on the net present value of biological assets:
Managed Timber
Variance
Rs.
Variance
Rs.
-10%
(568,078,231)
+10%
568,078,231
Values as appearing in the Statement of Financial Position are very sensitive to changes of the discount rate applied.
Simulations made for timber show that a rise or decrease by 1% of the estimated future discount rate has the following effect
on the net present value of biological assets:
Managed Timber
58
Rs.
Rs.
-1%
334,111,193
+1%
(281,478,870)
59
Maturata Plantations Ltd.,
Non-redeemable and Non-voting 8%
Cumulative Preference Shares
at Rs.10/= each
1,535,581
1,535,581
254,348,419
5,500,000
92,052,838
100,000,000
10,000,000
250,000
10,000,000
35,010,000
252,812,838
1,535,581
1,535,581
254,348,419
5,500,000
92,052,838
100,000,000
10,000,000
250,000
10,000,000
35,010,000
252,812,838
Nos.
Nos.
1,535,581
1,535,581
219,348,419
5,500,000
92,052,838
100,000,000
10,000,000
250,000
10,000,000
10,000
217,812,838
Nos.
01.04.2011
30.28%
55.00%
95.34%
100.00%
100.00%
50.00%
100.00%
100.00%
%
31.03.2013
30.28%
55.00%
95.34%
100.00%
100.00%
50.00%
100.00%
100.00%
%
31.03.2012
30.28%
55.00%
95.34%
100.00%
100.00%
50.00%
100.00%
100.00%
%
01.04.2011
Company and
Group Holding %
4,000,000
4,000,000
1,434,250,000
600,000,000
357,650,000
100,000,000
10,000,000
2,500,000
10,000,000
350,100,000
1,430,250,000
Rs.
31.03.2013
Carrying
Value
4,000,000
4,000,000
1,434,250,000
600,000,000
357,650,000
100,000,000
10,000,000
2,500,000
10,000,000
350,100,000
1,430,250,000
Rs.
31.03.2012
Carrying
Value
4,000,000
4,000,000
1,084,250,000
600,000,000
357,650,000
100,000,000
10,000,000
2,500,000
10,000,000
100,000
1,080,250,000
Rs.
01.04.2011
Carrying
Value
18.3
A concurrence of the Golden Shareholder should be obtained to sub-lease estate lands and amend the Articles of Association of the Company in which the Golden Shareholder's rights are
given.
The Golden Shareholder, or his nominee, has the right to examine the books of accounts of the Company.
The Company is required to submit a detailed quarterly report to the Golden Shareholder.
The Golden Shareholder can request the Board of Directors of the Company to meet him.
Refer Note 1.2 for the changes in names of the Companies in the Group
b)
c)
d)
a)
The Golden share of Rs. 10/- each held by the Secretary to the Treasury in two plantation Companies enjoys the following special rights:
18.2. Maturata Plantations Ltd, a Subsidiary of Free Lanka Plantations Co.(Pvt) Ltd & Pussellawa Plantations Ltd, a Subsidiary of Free Lanka Management Co. (Pvt) Ltd
st
A Golden Share has been allotted to the Secretary to the Treasury by capitalization of revaluation reserve on 1 August, 1995. Articles of Association of the plantation companies embody the specific
rights assigned to the Golden Shareholder on behalf of the State of Democratic Socialist Republic of Sri Lanka.
Maturata Plantations Limited has been incorporated under the Companies Act No.07 of 2007 in terms of the Provisions contained in the Conversion of Public Corporations or Government Owned
Business undertakings into Public Companies Act No.23 of 1987 and domiciled in Sri Lanka.
18.1.3 Country of Incorporation
Except for Maturata Plantations Limited, all the other companies have been incorporated under the Companies Act No.07 of 2007 and domiciled in Sri Lanka.
a)
18.1.2 Preference Shares
18.1.1 Ordinary Shares
Free Lanka Management Co. (Pvt) Ltd
Free Lanka Plantations Co. (Pvt) Ltd
F L C Power Holdings (Pvt) Ltd
Enselwatte Power (Pvt) Ltd
The Tea Leaf Resort Holdings (Pvt) Ltd
Dolekanda Power (Pvt) Ltd
18.1 Unquoted
18
31.03.2012
31.03.2013
No.of Shares
COMPANY
60
16.92%
Rain Forest Eco Lodge (Pvt) Ltd (RFELL)
Less : Adjustments for Effective Holdings
Transfer to long term Investments
Equity Value of Investment as at 31st March
Less : Dividends Received
Opening Balance
Add : Investments during the Year
Add : Share of Profit/(Loss) after taxation
57,960,046
(2,134,780)
55,825,266
57,960,046
53,822,466
53,822,466
2,640
(53,825,106)
-
63,993,750
(6,033,704)
Rs.
RFELL
2011/12
55,825,266
(2,002,800)
Rs.
2012/13
20.00%
46.43%
%
-
-
Rs.
2010/11
-
46.43%
%
As at
As at
31.03.2012 01.04.2011
Group Holding %
19.2Equity Value of Investments in Associates as at 31st March - Group
46.43%
%
As at
31.03.2013
Melfort Green Teas (Pvt) Ltd (MGTL)
19.1
19 Investments in Equity Accounted Investees
25,888,511
(6,500,000)
19,388,511
19,388,511
15,053,406
10,835,105
Rs.
2012/13
6,399,375
650,000
Nos.
As at
31.03.2013
18,303,406
(3,250,000)
15,053,406
15,053,406
12,793,702
5,509,704
Rs.
MGTL
2011/12
6,399,375
650,000
Nos.
As at
31.03.2012
No. of Shares
19,305,235
(6,500,000)
12,805,235
(11,533)
12,793,702
11,260,647
8,044,588
Rs.
2010/11
-
650,000
Nos.
As at
01.04.2011
79,710,977
(6,500,000)
73,210,977
2,640
(53,825,106)
19,388,511
70,878,672
8,832,305
Rs.
Total
2012/13
76,263,452
(3,250,000)
73,013,452
(2,134,780)
70,878,672
12,793,702
63,993,750
(524,000)
Rs.
Total
2011/12
12,793,702
19,305,235
(6,500,000)
12,805,235
(11,533)
11,260,647
8,044,588
Rs.
Total
2010/11
FLC HOLDINGS PLC
FLC HOLDINGS PLC
19.3
st
Equity Value of Investment in Associates as at 31 March - Group (Contd..)
st
Summarized last audited financial statements of Associates as at 31 March are as follows:
RFELL
As at
As at
31.03.2013
31.03.2012
Rs.
Rs.
19.3.1
Income Tax Expenses
Deferred Tax
2,173,892
(1,245,102)
928,790
928,790
(10,942,790)
(10,014,000)
-
780,686
(539,752)
240,934
3,725,678
3,966,612
(33,672,918)
(29,706,306)
(462,212)
-
148,892,109
(105,418,755)
43,473,354
3,530,481
47,003,835
(20,742,516)
26,261,319
(3,300,000)
375,831
116,966,848
(90,198,425)
26,768,423
3,313,386
30,081,809
(17,065,479)
13,016,330
(1,400,000)
250,725
Profit/(Loss) after Taxation
(10,014,000)
(30,168,518)
23,337,150
11,867,055
As at 31st March
Current Assets
Non -Current Assets
Total Assets
40,461,087
354,228,250
394,689,337
45,131,838
341,052,749
386,184,587
57,421,152
4,430,816
61,851,968
33,831,822
10,041,831
43,873,653
Current Liabilities
Total Liabilities
42,066,259
83,497,549
125,563,808
25,343,500
81,714,754
107,058,254
17,891,935
2,200,162
20,092,097
10,539,745
911,187
11,450,932
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
41,000,000
(41,000,000)
-
33,000,000
8,000,000
41,000,000
53,825,106
53,825,106
-
53,825,106
41,000,000
Revenue
Cost of Sale
Other Income
Expenses
19.3.2
20
20.1
Ceylon Estate Teas (Pvt) Ltd
As at 01st April
Additions
Transfer out on acquisition of Controlling Interest
20.2
20.3
MGTL
As at
As at
31.03.2013
31.03.2012
Rs.
Rs.
Rain Forest Eco Lodge (Pvt) Ltd
As at 01st April
Transfer in from Associates
Total
This investment represents an advance paid to acquire ordinary shares in CETL and subsequently transfer out on acquisition of ordinary
shares.
Maturata Plantations Ltd (MPL) a sub Subsidiary of the Group received 20% of issued Ordinary Shares of Rs. 10/- each of (6,399,375 No of
Ordinary Shares) Rain Forest Eco Lodge (Pvt) Ltd incorporated to promote eco tourism in lieu of releasing the leasehold rights of 488
Hectares from Enselwatte Estate, Deniyaya. As per the agreement entered into with RFELL, MPL is also entitled to receive 1.50 % of the
annual total turn over of RFELL.
However due to the Rights issue by RFELL in August 2012, MPL's share hoding percentage has come down from 20% to 16.92% and 'Equity
Accounted' treatment of accounting ceased to exist consequently. The carrying amount has been subsequently recognised as a long term
investment with effect from 01st October 2012.
61
FLC HOLDINGS PLC
Company
Group
21
Add : Additional payment on
Acquisition of HPPLC
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
10,494,000
10,494,000
516,000
-
-
-
10,494,000
10,494,000
9,978,000
10,494,000
-
-
-
The Goodwill represents the excess of net assets of F L C Hydro Power PLC (HPPLC)., acquired by F L C Power Holdings (Pvt) Ltd.
Company
Group
22
Inventories
Input Materials
Harvested Crop
- Tea
- Rubber
- Coconut
- Others
Certified Emission Reduction (CER)
Produce tea for Exports
Consumables and Spares
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
49,959,304
60,403,228
60,511,476
-
-
-
510,185,548
45,052,060
367,321
2,481,250
1,938,501
11,964,657
23,338,010
645,286,651
389,184,764
51,814,858
420,488
8,166,814
22,402,539
29,388,961
561,781,652
449,782,897
95,928,651
2,033,953
18,394,752
41,084,114
27,869,804
695,605,647
-
-
-
22.1 CER has been valued at 0.40 Euro at the prevailing Exchange rate at Rs. 162.12 as at 31st March 2013. (Previous Year at 5 Euro at the
prevailing Exchange rate at Rs.170.66)
23
Produce Trade Receivable
Withholding Tax Recoverable
Economic Service Charge Recoverable
Other Debtors
Advances and Prepayments
24
242,989,678
9,358,298
23,174,135
82,449,509
140,775,151
498,746,771
173,814,750
4,715,117
21,181,014
108,352,948
227,616,594
535,680,423
201,465,930
1,770,455
22,706,002
119,968,440
78,200,645
424,111,472
-
111,382
111,382
-
-
-
115,000,000
115,000,000
(31,573,200)
83,426,800
-
-
83,426,800
150,000,000
233,426,800
(20,876,800)
212,550,000
Maturity Analysis
Amount receivable within One Year
-
-
-
212,550,000
212,550,000
83,426,800
83,426,800
-
Related Party wise Summary
Maturata Plantations Ltd
-
-
-
212,550,000
212,550,000
83,426,800
83,426,800
-
Master Summary
st
Add :New Loans granted during the year
Less: Repayments during the year
st
62
-
-
-
FLC HOLDINGS PLC
Company
Group
25 Amounts Due From Related Parties
Free Lanka Trading (Pvt) Ltd
Free Lanka Trading Liquor (Pvt) Ltd
Melfort Green Teas (Pvt) Ltd
F L C Joint Venture Co. (Pvt) Ltd
Perpetual Holdings Ltd
FLMC Sudima Timber Products (Pvt) Ltd
Browns Investments PLC
Tea Leaf Resort Holding (Pvt) Ltd
Rain forest Eco lodge (Pvt) Ltd
Ceylon Ayurvedic Teas (Pvt) Ltd
F L C Estate Bungalows (Pvt) Ltd
Sierra Construction (Pvt) Ltd
26 Short Term Investments
Investments in Marketable Equity
Securities (Refer Note 26.1)
Savings/Other Deposits
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
27,000
62,857
330,000
522,706
238,342
812,815
83,518
2,077,238
9,773,778
7,247
651,062
1,948,960
253,181
16,398
190,647
12,841,273
5,863,985
154,297
7,890,840
655,388
577,304
594,414
15,736,228
681,083
3,517,632
191,314,263
330,000
3,595,540
83,518
199,522,036
895,778
6,996,845
1,948,960
2,500,000
16,398
12,357,981
15,656,681
56,674,000
655,388
577,304
594,414
74,157,787
276,217,143
283,347,136
-
258,262,143
251,217,136
-
493,228,463
769,445,606
557,886,166
841,233,302
271,113,642
271,113,642
258,262,143
101,541,804
352,758,940
-
26.1 Investments in Marketable Equity Securities - Group
Investments in Units
Cey Bank Money Market Fund
Gaurdian Acuity Asset Management Limited
National Asset Management Ltd
Investments in Shares
Agstar Fertilizers PLC-(Investments in Quoted Companies)
Total
No. of
Units / Shares
Unit
Price Shares
Rs.
7,253,384.9
7,129,277.56
9,737,097.49
10.42
11.36
10.44
3,150,000
5.70
No.of
Units /Shares
Investments in Units
National Asset Management Ltd
Investments in Shares
Agstar Fertilizers PLC-(Investments in Quoted Companies)
Total
Cost
Rs.
Fair Value
Rs.
75,000,000
75,000,000
100,000,000
250,000,000
25,200,000
275,200,000
75,580,270
80,988,593
101,693,281
258,262,144
17,955,000
276,217,144
Unit
Price Shares
Cost
Rs.
Rs.
Fair Value
Rs.
24,342,745.80
10.32
250,000,000
251,217,136
3,150,000
10.20
25,200,000
275,200,000
32,130,000
283,347,136
2,995,288
275,000,000
14,038,276
1,661,631,455
1,953,665,019
20,000
859,644,383
5,910,219
865,574,602
15,000
944,949,421
6,439,160
951,403,581
1,588,386,598
1,588,386,598
27 Cash and Cash Equivalents
27.(a) Favourable Balances
Cash in Hand
Short Term Deposits
Cash in Transit
Cash at Banks
3,391,455
879,032,457
6,980,279
61,212,536
950,616,727
965,997
1,092,814,319
7,860,325
43,270,682
1,144,911,323
The investments with short term maturities with three months or less from the date of ac quisitions are treated as cash equivalents.
Company
Group
27 (b) Unfavourable Balances
Bank Overdrafts
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
189,323,591
189,323,591
135,618,510
135,618,510
89,941,869
89,941,869
-
-
-
63
FLC HOLDINGS PLC
Company
Group
As at
31.03.2013
As at
31.03.2012
As at
01.04.2011
As at
31.03.2013
As at
31.03.2012
As at
01.04.2011
Nos.
Nos.
Nos.
Nos.
Nos.
Nos.
1,368,000,000
1,368,000,000
1,368,000,000
1,368,000,000
1,068,000,000
300,000,000
1,368,000,000
1,368,000,000
1,368,000,000
1,368,000,000
1,368,000,000
1,068,000,000
300,000,000
1,368,000,000
28 .2Value of Shares
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
st
2,568,000,000
2,568,000,000
2,568,000,000
2,568,000,000
1,068,000,000
1,500,000,000
2,568,000,000
2,568,000,000
2,568,000,000
2,568,000,000
2,568,000,000
1,068,000,000
1,500,000,000
2,568,000,000
28 Stated Capital
28 Ordinary Shares
28.1 Number of Shares
Add : Issue of Shares during the Year
st
Add : Issue of Shares during the Year
st
28 .3 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the
Company.
Group
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
122,346,390
(1,613,348)
120,733,042
86,889,815
35,456,575
122,346,390
29 Revaluation Surplus
Add/(Less): Amortization
This represents the Group's share of the surplus on revaluation of Freehold Buildings, Electrical Equipment and Penstock Pipe Lines owned by F L C
Hydro Power PLC., a Sub Subsidiary of the Group.
30 Non Controlling Interests
The Non Controlling interests relates to the Net Assets of the Group which is not represented by the Parent Company's investments.
64
FLC HOLDINGS PLC
Company
Group
31 Interest Bearing Borrowings
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
Term Loans
Net Liability to Lessor of
JEDB/SLSPC Estates
Other Finance Leases
31.1.1
863,321,880
1,056,352,091
764,842,545
62,550,000
83,426,800
-
31.2.3
31.3.3
300,227,338
11,321,564
1,174,870,782
304,780,145
23,115,809
1,384,248,045
309,157,845
37,246,102
1,111,246,492
62,550,000
83,426,800
-
242,309,857
245,020,543
162,276,861
62,550,000
83,426,800
-
4,734,919
6,275,284
253,320,060
4,516,161
11,806,459
261,343,163
4,366,777
17,041,669
183,685,307
62,550,000
83,426,800
-
621,012,023
811,331,548
602,565,685
-
-
-
295,492,419
5,046,280
921,550,722
300,263,984
11,309,350
1,122,904,882
304,791,067
20,204,434
927,561,186
-
-
-
31.1.1 Master Summary
1,056,352,091
Add : New Loans Obtained during the Year
1,056,352,091
(193,030,211)
Less : Repayments during the Year
st
863,321,880
764,842,545
532,855,732
1,297,698,277
(241,346,186)
1,056,352,091
813,293,808
115,000,000
928,293,808
(163,451,263)
764,842,545
83,426,800
83,426,800
(20,876,800)
62,550,000
115,000,000
115,000,000
(31,573,200)
83,426,800
-
242,309,857
245,020,543
162,276,861
62,550,000
83,426,800
-
621,012,023
863,321,880
701,082,318
110,249,230
1,056,352,091
455,782,972
146,782,713
764,842,546
62,550,000
83,426,800
-
42,468,201
7,654,664
372,819,250
81,809,000
160,760,765
62,550,000
135,260,000
863,321,880
67,024,973
19,245,956
390,687,242
103,925,000
242,042,120
83,426,800
150,000,000
1,056,352,091
91,581,745
30,837,248
188,521,626
126,041,000
177,860,927
150,000,000
764,842,546
62,550,000
62,550,000
83,426,800
83,426,800
-
31.(a) Amount Payable within One Year
Term Loans
31.1.2
JEDB/SLSPC Estates
31.2.4
31.3.4
31.(b) Amount Payable after One Years
Term Loans
31.1.2
31.2.4
JEDB/SLSPC Estates
31.3.4
31.1 Term Loans
31.1.2 Maturity Analysis
Amount Payable within One Year
Amount Payable after one Year &
less than five Years
Amount Payable after five Years
31.1.3 Lender-wise Summary
Bank of Ceylon
National Development Bank PLC
Lanka Orix Leasing Co PLC
Sampath Bank PLC
Seylan Bank PLC
Lanka Orix Finance Co PLC
Commercial Bank of Ceylon PLC
31.2 Net Liability to Lessor of JEDB/SLSPC Estates
Net liability to lessor is the Net Present Value of annual lease rentals over the lease period of estate leases. This is made up as follows.
Company
Group
31.2.1 Gross Liability
st
st
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
556,085,911
(16,744,000)
539,341,911
572,829,912
(16,744,001)
556,085,911
589,611,770
(16,781,858)
572,829,912
-
-
-
-
-
31.2.2 Finance Charges allocated to future Periods
st
251,305,766
Less : Finance Charges Written Off
during the Year
(12,191,193)
st
239,114,573
263,672,067
276,221,699
-
(12,366,301)
251,305,766
(12,549,632)
263,672,067
-
-
-
300,227,338
304,780,145
309,157,845
-
-
-
31.2.3 Net Liability
65
FLC HOLDINGS PLC
Group
31.2.4 Maturity Analysis
a)
Net Liability to Lessor of JEDB/SLSPC Estates payable within One Year
Less : Finance Charges allocated to future Periods
b) Net Liability to Lessor of JEDB/SLSPC Estates payable within Two to Five Years
Amount Payable within two to five Years
c)
Net Liability to Lessor of JEDB/SLSPC Estates payable after Five Years
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
16,744,000
(12,009,081)
4,734,919
16,744,000
(12,227,839)
4,516,161
16,744,000
(12,377,223)
4,366,777
66,976,000
(46,065,073)
20,910,927
66,976,000
(48,556,902)
18,419,098
66,976,000
(50,160,537)
16,815,463
455,621,911
(181,040,419)
274,581,492
472,365,911
(190,521,025)
281,844,886
489,109,911
(201,134,307)
287,975,604
Maturata Plantations Ltd/Pussellawa Plantations Ltd
The lease rentals have been amended, with effect from 15th/21st June, 1996 to a substantially higher amounts than the previous nominal lease rentals of Rs.
500/- per estate per annum.
The basic rental payable under the revised basis is Rs.16,744,000/- per annum and this amount is to be inflated annually by the Gross Domestic Production
(GDP) Deflator and is in the form of contingent lease rental. Consequently, contingent lease rentals charged for the current year in the statement of
comprehensive income amounts to Rs 31,813,768/- ( 2011/12 - Rs 28,265,071/-)
The lease agreements were further amended on 15th/21st June 2002, freezing annual lease rental at Rs.22,928,105/- for a period of six years commencing
st
st
from 15th/21 June, 2002. Hence, the GDP Deflator adjustment has been frozen at Rs.6,184,105/- per annum until 15th/ 21 June, 2008.
Lease rental has been revised by the Ministry of Finance after the relief period of 2002-2008. The rental has been computed in accordance with Amendment
of Leases
1) Future liability on annual lease payment of Rs. 16,744,000/= would continue until year 2045. The Net Present Value of this liability at 4% discounting
rate (as recommended by UITF) would result in a liability of Rs. 300,227,338/=.(2011/12-Rs.304,780,145/=)
2) The Net Present Value of Rs. 300,227,338/= is presented by gross liability of Rs.539,341,911/- (Rs.16,744,000/- x 32 1/4 years) and interest in
suspense of Rs. 239,114,573/=.
3) The Charge to the Statement of Comprehensive Income during the current year is Rs.12,191,193/= ( 2011/12 - Rs.12,366,301/= ).
Group
31.3 Other Finance Leases
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
28,265,924
47,670,828
67,847,086
14,060
28,279,984
(15,125,537)
13,154,447
4,846,560
52,517,388
(24,251,464)
28,265,924
10,556,256
78,403,342
(30,732,514)
47,670,828
31.3.1 Gross Liability
Add : Acquisitions through Subsidiary
New Leases Obtained during the Year
66
FLC HOLDINGS PLC
Group
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
Less : Finance Charges Written Off during the Year
st
5,150,115
1,861
5,151,976
(3,319,093)
1,832,883
10,424,726
1,334,559
11,759,285
(6,609,170)
5,150,115
18,010,658
2,181,256
20,191,914
(9,767,188)
10,424,726
31.3.3
Present Value of Lease Creditors
11,321,564
23,115,809
37,246,102
31.3.4
Maturity Analysis
a)
Lease Payable within One Year
Less :Finance Charges allocated to future Periods
7,499,687
(1,224,403)
6,275,284
15,125,543
(3,319,084)
11,806,459
22,579,887
(5,538,218)
17,041,669
5,654,760
(608,480)
5,046,280
12,048,149
(1,798,383)
10,249,766
25,090,941
(4,886,507)
20,204,434
-
1,092,232
(32,648)
1,059,584
-
510,861
4,398,440
3,276,380
4,968,766
13,154,447
1,348,459
431,928
7,037,504
5,242,208
541,946
13,663,879
28,265,924
7,383,676
1,727,712
9,676,568
8,222,996
3,793,622
16,866,254
47,670,828
31,735
389,510
563,674
847,964
1,832,883
11,321,564
190,845
22,832
979,339
1,323,753
18,395
2,614,951
5,150,115
23,115,809
285,477
1,116,392
1,836,262
2,364,065
588,820
4,233,710
10,424,726
37,246,102
31
Other Finance Leases (Contd..)
31.3.2
Finance Charges allocated to future Periods
st
Add : Acquisitions through Subsidiary
On New Leases Obtained during the Year
b)
c)
31.3.5
Lease Payable Two to Five Years
Amount Payable Two to Five Years
Less :Finance Charges allocated to future Periods
Lease Payable after five Years
Amount Payable after five years
Lender-wise Summary
31.3.5.1 Gross Liability
Peoples Leasing Finance PLC
SMB Leasing PLC
Hatton National Bank PLC
Lanka Orix Leasing Co. PLC
Orient Financial Services PLC.,
Merchant Bank of Sri Lanka PLC
31.3.5.2 Finance Charges allocated to future Periods
Peoples Leasing Finance PLC
SMB Leasing PLC
Hatton National Bank PLC
Orient Financial Services PLC.,
Merchant Bank of Sri Lanka PLC
31.3.5.3 Net Liability
67
FLC HOLDINGS PLC
32
Deferred Tax Assets and Liabilities
32.1
Deferred Tax Liabilities
Deferred Tax Assets are attributable to the originations of following temporary differences:
Group
31.03.2013
Rs.
31.03.2012
Rs.
(334,019,366)
(210,724,159)
100,953,820
784,692,610
574,238,627
915,141,532
915,141,531
(293,994,983)
(200,971,400)
87,681,905
726,578,623
554,686,967
873,981,112
873,981,112
873,981,110
37,751,718
3,437,299
(185,562)
156,966
915,141,531
947,465,736
5,161,252
(78,808,102)
162,224
873,981,112
3,437,299
44,917,571
(7,037,483)
41,317,387
(78,808,102)
(5,809,479)
11,132,954
(73,484,627)
st
As at 31 March
Unutilized Tax Losses
Net Deductible Temporary Difference
Total Recognized Deferred Tax Liability
32.2
Movement in recognised deferred tax liabilities
st
For the year ended 31 March
Balance as at the Beginning of the Year
Originations / Reversal
Directly Charged to the Equity
Impact due to rate change
Acquisitions through Subsidiary
Balance as at the end of the Year
Breakup of Deferred Tax Expense
Directly Charged to the Equity
Deferred Tax Expense on Comprehensive Income
Deferred Tax Expense on Other Comprehensive Income
68
FLC HOLDINGS PLC
Company
Group
33
33.1 Employees' Trust Fund Board
Less :Settlement of Debentures
st
Maturity Analysis
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
-
1,500,000
(1,500,000)
-
-
-
-
-
-
-
33.2 Interest Rate Applicable
Interest rate applicable to Rescheduled Debentures is one year weighted average Treasury Bill gross rate ( before 10% withholding tax ) which prevails
immediately prior to 11th November every year.
Company
Group
34
34(a) Movement in the present value of the defined benefit obligations
st
Benefits paid by the plan
Expenditure regognized in the Statement of Comprehensive Income
Expenditure regognized in the Statement of Other Comprehensive Income
Transfer to Capital Work-In- Progress :Mini Hydro Power
Acquisitions through Subsidiary-CETL
st
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
1,376,597,007 1,383,818,898
(185,848,403) (146,374,808)
217,738,668
176,923,036
(78,585,751)
42,431,866
30,782
790,052
1,410,924,343 1,376,597,007
1,410,924,343 1,376,597,007
-
-
34(b) Expenditure recognized in the Statement of Comprehensive Income & Other Comprehensive Income
Company
Group
For the year ended 31st March
Current service costs
Interest Costs
Acturial Gains/(Losses)
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
74,983,530
101,939,506
42,431,867
219,354,903
86,892,335
130,846,333
(78,585,751)
139,152,917
-
-
As required by the Sri Lanka Accounting Standard( LKAS 19), "Employee Benefits" the Group measures its benefit obligation together with following
subsidiaries using actuarial valuations carried out by Messers Actuarial & Management Consultants (Pvt) Ltd.
34(c) If the Group had provided for gratuity on the basis of fourteen days wages for workers and half month's salary for staff each completed year of service in
line with the Payment of Gratuities Act No. 12 of 1983, the liability would have been as follows:
Company
Group
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
809,368,785 1,060,828,491
674,384,139
703,717,104
1,483,752,924 1,764,545,595
-
-
There is a group contingent liability of Rs. 221,624,542/= (Previous Year - Rs. 390,225,257/=) which would crystalize only if the Group ceases to be a
going concern.
69
FLC HOLDINGS PLC
34
Retirement Benefit Obligations (Contd..)
34(d)
The Principal assumptions used by the Group
The Principal assumptions used by the Group in determining the cost of employees benefits using actuarial valuations are
disclosed in Note 3.2.3.4. Principal actuarial assumptions used are as follows;
Discount rate
Future salary increases Retirement Age
-
34(e)
For staff
For Workers
For staff
For Workers
10.50%
7.50%
15.00%
60 Yrs
60 Yrs
Per annum
Per annum
Once in two years
The Gratuity Liability of Employees of F L C Hydro Power PLC & Stellenberg Hydro Power (Pvt) Ltd
During the current year,the above Companies in the group measured the present value of the retirement benefits of gratuity
which is recommended by LKAS 19 using formula Method.
The key assumptions used for the calculation are as follows;
i.
ii.
iii.
iv.
v.
vi
Rate of Discount
Rate of Salary and Wage Increament
Retirement Age
Staff Turnover Factor
Daily wage Rate
The Company would continue as a going concern
10.50% Per annum
12.00% Per annum
55 yrs
5.00%
Rs.380/-
This Liability is not externally funded.
34.(f)
Sensitivity Analysis-Group
Sensitivity Variation on Rate of wage increment
Values appearing in the Financial Statements are very sensitive to the changes of financial and non-financial assumptions
used. Simulations made for retirement obligation computed on actuarial valuations show that a rise or decrease by 1% of the
rate of wage increment has the following effect on the retirement benefit obligation:
Staff
Workers
Total
Variance
Rs.
Variance
Rs.
-1%
(8,970,638)
(47,227,810)
(56,198,448)
+1%
10,055,889
49,981,035
60,036,924
Values as appearing in the Statement of Financial Position are very sensitive to changes of the discount rate applied.
Simulations made for retirement obligation computed on actuarial valuations show that a rise or decrease by 1% of the
estimated future discount rate has the following effect on the retirement benefit obligation:
Staff
Workers
Total
70
Rs.
-1%
Rs.
+1%
10,752,454
98,489,663
109,242,117
(9,425,057)
(85,671,396)
(95,096,453)
FLC HOLDINGS PLC
Group
35
Deferred Income
Capital Grants
PHDT Lease Rentals
Note 35 (a)
Note 35 (b)
Note 35 (c)
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
455,246,251
6,631,613
59,970,557
521,848,421
468,541,066
7,168,348
61,831,730
537,541,144
482,010,205
7,705,084
489,715,289
35(a)
Capital Grants
35(a).1
Total Capital Grants Received
Add :Total Grants Received during the Year
630,490,843
1,460,474
631,951,317
627,062,658
3,428,185
630,490,843
597,601,389
29,461,269
627,062,658
Total Amortisation
Add : Amount Amortized during the Year
161,949,777
14,755,289
176,705,066
145,052,453
16,897,324
161,949,777
125,069,092
19,983,361
145,052,453
Total Unamortized Capital Grants as at 31st March
455,246,251
468,541,066
482,010,205
35(a).2
35(a).3
The above represents the followings.
i) The funds received from the Plantation Housing and Social Welfare Trust (PHSWT), MTIP, PDP and PHDT for the development of
workers' welfare facilities and improvement to institutional facilities.
ii) The funds received from the Plantation Reform Project for the development of Forestry Plantations.
The amount spent is capitalised under the relevant classification of Property, Plant and Equipment and corresponding grant component is
reflected under Deferred Grants and Subsidies and is being amortized over the useful life span of the related asset.
Grant related to the Biological Assets which are measured at fair value less point to sell cost is directly charged to the carrying value of such
assets in accordance with the applicable financial framework.
Group
35 (b)
PHDT Lease Rentals
Less : Amount Amortized during the Year
35(b).1
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
7,168,348
(536,735)
6,631,613
7,705,084
(536,736)
7,168,348
8,241,819
(536,735)
7,705,084
Premises at St. Andrew's Drive in Nuwara Eliya has been leased out to Plantation Human Development Trust (PHDT) for a period of 20 years
commencing from August 2005 at a total lease rental of Rs.10,734,696/=.
Lease Rentals received are deferred and amortized over the lease period commencing from August 2005.
Group
35 (c)
Add: Value of Ordinary Shares received
Less : Amount Amortized during the Year
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
61,831,730
(1,861,173)
59,970,557
63,993,750
(2,162,020)
61,831,730
-
71
FLC HOLDINGS PLC
This represents the value of 6,399,375 nos. of Ordinary Shares received by Maturata Plantations Ltd equivalent to 20% of the issued Ordinary
Shares of RFELL at Rs. 10/- each in lieu of releasing the leasehold rights of 488 Hectares in Enselwatte Estate, Deniyaya for Eco Tourism
Project. The value of Ordinary Shares are deferred and amortized over the unexpired balance lease period.
However,due to the rights issue the share holding percentage has come down from 20% to 16.92%. Referance is made to the Note 19 to the
financial statements.
Group
Maturity Analysis
PHDT Lease Rentals
Not later than one year
Later than one year and not later than five years
Later than five years
Not later than one year
Later than one year and not later than five years
Later than five years
72
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
536,735
2,146,939
3,947,940
6,631,614
536,735
2,146,939
4,484,674
7,168,348
536,735
2,146,939
5,021,410
7,705,084
1,861,173
7,444,691
50,664,693
59,970,557
1,861,173
7,444,691
52,525,866
61,831,730
-
FLC HOLDINGS PLC
Company
Group
36 Trade and Other Payables
Trade Payables
VAT Payable
Accrued Charges
Employees' Profit Share
Payable on Share Acquisition
Retentions
Other payables
Refundable excess Funds of Initial Public Offer
37 Loans From Related Parties
Master Summary
Add :New Loans obtained during the Year
Less: Repayments during the Year
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
As at
31.03.2013
Rs.
As at
31.03.2012
Rs.
As at
01.04.2011
Rs.
385,763,528
36,290,371
59,952,778
48,538,940
11,650,000
29,305,202
570,155,783
-
323,415,178
33,050,589
54,840,716
60,944,546
11,650,000
339,098,398
-
345,634,142
37,876,720
50,096,742
59,589,192
11,650,000
331,573,365
102,598,944
80,024
11,650,000
207,576,260
-
79,206
11,650,000
927,908
-
11,650,000
36,108,324
102,598,944
1,141,656,602
822,999,427
939,019,105
219,306,284
12,657,114
150,357,268
- 225,000,000
- 225,000,000
- (225,000,000)
-
225,000,000
225,000,000
225,000,000
-
-
-
-
-
120,000,000
-
-
-
-
-
105,000,000
225,000,000
-
-
-
-
-
225,000,000
225,000,000
-
-
-
1,217,729
8,190
1,000,000
2,225,919
2,305,547
8,190
1,200,982
3,514,719
1,997,931
8,190
2,006,121
217,729
-
217,729
-
27,900,596
105,223,106
(483,646)
52,266,017
59,283,453
-
10,696,068
1,082,909
144,419,033
(40,387,050)
(4,611,309)
(27,567,060)
(8,246,678)
63,606,936
12,417,654
39,797,619
163,764,743
(87,857,105)
(11,501,214)
(21,747,579)
(14,758,249)
27,900,596
Maturity Analysis
Amount Payable after one Year &
less than five Years
Related Party wise Summary
Ishara Traders (Pvt) Ltd
38 Amounts Due To Related Parties
Name of Related Party
Free Lanka Trading Company Ltd.,
Cricket Club Café (Pvt) Ltd
Sierra Civil Engineering (Pvt) Ltd
Dolenkanda Power (Pvt) Ltd
39
Income Tax Payable
Add : Current Income Tax Expense
SRL
Acquisitions through Subsidiary
Withholding Tax on Dividend from
Associates/ Subsidiaries
Income Tax (over)/ Under provision
Less : Self Assessment Taxes Paid
ESC Set Off
Withholding Taxes Set Off
Balance Tax Payments
9,395,445
9,613,174
5,000,000
9,549,270
14,766,999
217,729
1,282,820
10,000,000
5,000,000
74,000
10,000,000
26,574,549
34,173,028
112,530,218
502,372
-
9,193,985
42,975,272
-
340,627
23,725,086
-
340,627
-
147,205,618
(27,266,045)
(35,005,950)
(9,019,924)
(23,647,682)
52,266,017
6,770,219
(107,000)
58,832,476
(8,931,272)
(22,297,404)
(6,088,120)
21,515,680
4,444,325
28,510,038
(5,596,346)
(13,719,707)
9,193,985
340,627
340,627
73
FLC HOLDINGS PLC
40
Events after the financial Position Date
41.2.2 Pussellawa Plantations Ltd,
The Company has entered into an agreement to obtain Rs.
80,000,000/- loan from Sampath Bank PLC on 30th April 2013 to
complete the balance construction of power plant.
(a) Harvesting of Pinus Trees - Delta Estate
Forest Department has imposed Rs. 50.8 Mn as the stumpage
payable to the Government by Pussellawa Plantations Ltd for
harvesting of Forest Department Pinus Trees at Delta estate by
the Timber Lake Company. However, the company has requested
Forest Department to reconsider the stumpage calculation, as the
said fee is more than the market value of the timber and is not
keeping in line with the Supreme Court judgement. Therefore, the
amount of liability and the date of liability are uncertain and will
depend on the response of the Forest Department.
Pussellawa Plantations Ltd/Maturata Plantations Ltd
Increase in wage Rate
A revised wage collective agreement of plantation workers in
respect of wages and other relevant payments was signed on 04th
April 2013 with retrospective effective from 01st April 2013 to
31stMarch 2015 subject to re-negotiation of certain provisions.
The matter was filed by the Attorney General on behalf of the
Forest Convertor General against Pussellawa Plantations Ltd. and
Tiberluke International Company Ltd claiming the recovery of a
sum of Rs.50.8mn allegedly due and owing to the plaintiff as
unpaid stumpage fees.
There have been no other material events occurred between
reporting date and the date on which the financial statements are
authorized for issue that require adjustments to or disclosures in the
financial statements.
41
(b) District Court Of Colombo - (Case No-34588/MR) - Justin
Batepola Vs Pussellawa Plantations Ltd.
This is an action filed by Mr. Justin Batepola against Pussellawa
Plantations Ltd seeking to recover loss and damages in a sum of
Rs.6mn purportedly caused to him by taking him into custody by
police and by instituting actions in the Magistrates Court
maliciously and without reasonable or probable cause.
Contingent Liabilities and Assets
Contingent Liabilities
41.1 Company
The company does not anticipate any contingent liabilities to arise
out of any contingent event as at the Financial Position date other
than the contingent Liability on the Corporate Guarantee referred in
Note 44.2.1 ( C )
The order in this matter was delivered on 23rd April, 2013 in
favour of our client. This order has now been appealed by the
plaintiff. However, only a notice of appeal has been filed in the
High Court of civil appeals as of date.
41.2 Group
41.2.1 Maturata Plantations Ltd.,
a) The contingencies in respect of pending litigations before
labour tribunals are not expected to crystallize in a material
liability to the Company and no other contingent liability exists as
at the date of statement of financial position other than those
disclosed in Note 34 to the financial statements.
b) Debenture issued on 19th June, 1997 to the value of Rs. 150 Mln
have been converted to ordinary shares on 22nd June 2002 as
stipulated in the agreement. The basis and or ratio of conversion
has been contested by the golden share holder in year 2008. The
details of conversion are as follows.
i Basis of Conversion
Nos. 4.575000732 Ordinary Shares at par value of Rs.10/- each
per debenture of par value of Rs.10/- each.
ii Number of Shares Resulting from the above Conversion
Nos.15,000,000 Ordinary Shares (ie. 21% incremental
shareholding to the group from 51% to 72%).
iii Possible Impact on Group Shareholding of Maturata
Plantations Ltd.,
The number of shares resulting from the above conversion would
be reduced from Nos.15,000,000 to 3,278,688 Ordinary Shares in
the event the conversion is made as suggested by the Golden
Shareholder. (i.e. incremental shareholding to the group would be
reduced from 72% to 57.90%)
c) The 8% cumulative preference dividends computed upto 31st
March, 2013, of the non controlling interests amounted to
Rs.17,866,591/- (2012: Rs.15,409,660). However, this amount
has not been accrued as payable in the financial statements as this
has been classified under Stated Capital. However, due provision
has been made in the statement of equity at the Group level.
74
41.2.3 F L C Properties (Pvt) Ltd
The company has issued an indemnity in favour of Colombo
Municipal Council against any claims or demands for any
damages to the adjacent structures and movable and immovable
properties due to the construction and also relating to boundry
disputes and/or ownership disputes including access roads and
service lines and issues relating to the height or number of floors
issues at the property at No 19, Dudley Senanayake Mawatha.,
Colombo 08.
41.2.4 The Group does not anticipate any other contingent liabilities to
arise out of any contingent event as at the Financial Position date,
other than those disclosed in the financial statements.
41.3
Contingent Assets
There is no contingent assets as at the Financial Position date
other than those disclosed below.
41.3.1 Pussellawa Plantations Ltd,(Sub Subsidiary)
Supreme Court Fundamental - Rights Case No : SC(FR)
257/2008
In 2011 Pussellawa Plantations Ltd took on lease an estate called
Hewagama estate in Homagama on 53 years lease from the JEDB.
In March 2008 at the request of UDA, the Ministry of Land
proceeded to acquire the land. This case is to declare such
acquisition as void.
Formal inquiry to ascertain the entitlement to compensation is yet
to be held by the Hogama Divisional Secretary.
FLC HOLDINGS PLC
42
Contractual Commitments
42.1 Company
There have been no capital commitments contracted but not
provided for, or authorized by the board but not contracted for,
outstanding as at the Financial Position date.
The company is required to invest Rs. 600.000,000/- in equity of
FLC Properties (Pvt) Ltd a fully owned subsidiary, out of IPO
Proceeds to finance the Office Building Complex at No. 19,
Dudley Senanayake Mawatha, Colombo 08. The Investment in
Ordinary Shares and advances released by the Company as at 31st
March 2013 is Rs. 475,100,000/=.
As per the Objective of its IPO, the Company is expected to invest
Rs. 600.000,000/- towards new Mini Hydro Power Projects out of
which the Company has invested Rs. 20,000,000/= in Ordinary
Shares of two fully owned Subsidiaries namely Dolekanda Power
(Pvt) Ltd and Enselwatte Power (Pvt) Ltd. as at 31st March 2013.
As per the Objective of its IPO, the Company is expected to invest
40% in equity of The Tea Leaf Resort Holdings (Pvt) Ltd
amounting to Rs. 250,000,000/= towards the development of two
boutique style hotels. The investment as at 31st March 2013 is
Rs.6,095,540/-.
42.2 Group
42.2.1 Maturata Plantations Ltd (Sub Subsidiary)
The company has entered into a Joint Venture Agreement with Ms.
Whight & Company Ceylon (Private) Limited (WCCL) for a
period from 01st April, 2003 to June, 2045 in respect of the
followings;
a) To hand over the possession of “C” category fields
(uneconomical) not less than 50 hectares per estate and in addition
uncultivated land not less than 50 hectares per estate of Alma,
Bramley, Gonapitiya, High Forest, Kabaragalla, Mahacoodagalla,
Maha Uva and Maturata Estates in High Grown region for the
purpose of growing coffee plantations as a Mono Crop and Inter
Planting. MPL is entitled for an annual audited net profit share of
20%.
b) To hand over the possession of an abandoned tea factory called
Merigold Factory” to WCCL for the operation of Coffee Project for
an annual rental of Rs. 300,000/- subject to 10% increase once in
every 10 years. The repairs and improvements to the factory will be
at the expense of WCCL.
c) To rent out Superintendent’s Bungalow of Mahacoodagalla
Estate to WCCL for an annual rental of Rs. 180,000/- for the
operation of Coffee Project subject to 10% increase once in every
10 years. The repairs and improvements to the bungalow will be at
the expense of WCCL.
42.2.2 Tea Leaf Resort Holdings (Pvt) Ltd (TLRHL)
TLRHL, a joint venture of the Group has entered into an agreement
with Sierra Construction (Pvt) Ltd for Rs. 850,000,000/- for the
construction of two boutique style hotels as detailed below;
Tea Leaf, Geragama Estate
Tea Leaf, Ayr Estate
Rs.
494,261,681
355,738,319
42.2.3 Thebuwana Hydro Power (Pvt) Ltd (Sub Subsidiary)
Company has entered into contracts to construct Mini Hydro
Power Projects as detailed below;
Description
Civil Constructions
Purchase of Electromechanical Equipment
Installation of Penstock
Construction of Power House
Total
Rs.
7,096,551
4,349,772
34,025,570
39,742,260
85,214,153
Thebuwana Hydro Power (Pvt) Ltd has entered into a joint venture
agreement with Pussellawa Plantations Ltd to carry out
Thebuwana Mini Hydro Power Project at Keragala Estate which
belongs to Pussellawa Plantations Limited by paying a sum of
Rs.300,000/= annually from the date of commencement of
commercial production.
42.2.4 Stellenberg Hydro Power (Pvt) Ltd (Sub Subsidiary)
Company has entered into contracts to construct Mini Hydro
Power Projects as detailed below;
Description
Installation of Penstock
Purchase of Electromechanical Equipment
Building Bungalow
Construction of Power House
Total
Rs.
30,341,799
4,349,520
51,307
14,068,118
48,810,744
Stellenberg Hydro Power (Pvt) Ltd has entered into a joint venture
agreement with Pussellawa Plantations Ltd to carry out
Stellenberg Mini Hydro Power Project at Stellenberg Hellbodde &
Delta Estates which belongs to Pussallawa Plantations Ltd, by
paying a sum of Rs. 640,000/- annually from the date of
commencement of Commercial Production.
42.2.5 F L C Properties (Pvt) Ltd (Subsidiary)
The Company has entered into an agreement with Sierra Civil
Engineering (Pvt) Ltd., as designing and building contractor to
construct a multi storied office complex comprising Ground Floor
plus twelve Floors at No. 19, Dudley Senanayake Mawatha,
Colombo 08.
A lump sum type of contract was signed on 20th May, 2011
between the Company and Sierra Civil Engineering (Pvt) Ltd for
the construction of a multi storied office complex for a lump sum
contarct price of Rs. 625.0 Mn plus taxes.
The Company has committed to incur additional cost of
Rs.9,190,638/= for the constructions of aluminium doors and
windows and new improvement to the grand entrance of the
building.
The Company has already issued 35,010,000 ordinary shares at Rs.
10/- to its parent Company, F L C Holdings PLC and expects to
issue balance ordinary shares of 24,990,000 at Rs.10/- to fund the
said project up to Rs. 600.0 Mn
The Company has entered into an agreement with the Board of
Investment on 08th March, 2012. Accordingly the minimum
investment in the project will be USD 7,000,000 or its equivalent
in Sri Lankan rupees.
Other than as disclosed above, there have been no commitment
contracted for but not provided for, authorized by the Group but not
contracted for, outstanding as at the date of the statement of
financial position.
75
FLC HOLDINGS PLC
Name of the Director
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. I C Nanayakkara *
Mr. J M S de Mel
Mr. N M Prakash
Mr. P R Saldin
Mr. D C Wimalasena
Mr. A I Fernando
√
√
√
√
√
√
√
√
√
√
√ √ √ √ √ √ √ √ √ √ √ √ √ √
√
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
√ √ √ √ √ √ √ √ √ √ √
√ √ √
√ √
√ √ √
√
√ √
√
√
√
√ √
√
√
√
* Mr. I C Nanayakkara has tendered his resignation with effect from 31st December 2012
Name of the Company
F L C Holdings PLC
F L C Joint Venture Co. (Pvt) Ltd

F L C Hydro Power PLC

Halgranoya Hydro Power (Pvt) Ltd

Stellenberg Hydropower(Pvt) Ltd

Brown & Company PLC

Free Lanka Trading Co Ltd

Sierra Civil Engineering (Pvt) Ltd

F L C Estate Bungalows (Pvt) Ltd

Agstar Fertilizers PLC

Ishara Traders (Pvt) Ltd

LOLC Factors Ltd

Commercial Leasing & Finance PLC

Lanka Orix Finance Co. PLC

76
LOFCL
CLCL
LOLCFL
ITR
√ √ √ √ √ √
√
√
√ √
√
AFL
√
√
√ √
√ √ √ √ √ √ √ √ √ √ √ √ √
√ √ √ √ √ √ √ √
√ √ √ √
√ √
√
√
√
LOLC
FLEBL
SCEL
STPL
FLTC
PHL
BIPLC
BCPLC
RFELL
MGTL
TLRHL
CETL
SHPL
THPL
HHPL
HPPLC
FLCPL
EPL
DPL
FLCPHL
PPL
MPL
FLMCL
FLPCL
FLCJVL
The Directors of F L C Holdings PLC are also the Directors of the following related Companies.
FLCH
43
43.1
Abbreviations
Nature of the Relationship
FLCH
FLCJVL
FLPCL
FLMCL
MPL
PPL
FLCPHL
DPL
EPL
FLCPL
HPPLC
HHPL
THPL
SHPL
CETL
TLRHL
MGTL
RFELL
BCPLC
BIPLC
PHL
FLTC
STPL
SCEL
FLEBL
LOLC
AFL
ITR
LOLCFL
CLCL
LOFCL
Parent Company
Ultimate Parent Company
Subsidiary
Subsidiary
Sub Subsidiary
Sub Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Sub Subsidiary
Sub Subsidiary
Sub Subsidiary
Sub Subsidiary
Sub Subsidiary
Joint Venture
Associate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
Other Affiliate
FLC HOLDINGS PLC
43
Related Party Disclosures (Contd…)
43.4
43.2
Substantial Shareholding and Ultimate Parent Company
The company's ultimate parent company is F L C Joint Venture Co
(Pvt) Ltd which holds 54.65% of the issued Ordinary Shares of
the company as at the date of Statement of Financial Position.
43.3
Key Management Personnel Information
According to Sri Lanka Accounting Standard 24 " Related Party
Disclosures", key management personnel are those having
authority and responsibility for planning, directing and
controlling activities of the entity. Accordingly, the Board of
Directors has been classified as Key Management Personnel of
the Company.
Related Party Transactions
Transactions with Companies in which Directors of the
Company hold Other Directorships
The Company has carried out transactions with entities where the
Chairman or a Director of the Company is the Chairman or a
Director of such entities as detailed below.
Transaction with Immediate Parent Company.
Name of Immediate
Description of Transaction
F L C Joint Venture Co. (Pvt)
Ltd.,(FLCL)
The Company has incurred Rs.330,000/= on behalf of the Immediate Parent Company
(Previous Year Rs.1,948,960/=).
43.4.2 Transactions with Other Related Companies
43.4.2.1 Company
Name of Related Company
Maturata Plantations Ltd.,(MPL)
The Company has granted a loan of Rs.150,000,000/= to MPL during the year (Previous
Year Rs.115,000,000 /=) and received Rs.20,876,800/= (Previous Year Rs.31,573,200/=)
from MPL in part settlement of loan.The Company has earned Rs.30,981,600/= as loan
interest (Previous Year Rs.9,791,809/=). Amount receivable as at 31st March 2013 is
Rs.212,550,000/= (Previous year Rs.83,426,800/=).
The Company has granted a Corporate Guarantee on behalf of Maturata Plantations Ltd to
Lanka Orix Leasing Co. PLC for Rs. 275,000,000/=. In return, a Counter Guarantee was
received from MPL for the same amount.
The Company received Rs.2,757,504/= as guarantee fees from MPL. Amount receivable as
at 31st March 2013 is Rs.681,083/= (Previous Year Nil)
Free Lanka Management Co.(Pvt)
Ltd.,(FLMCL)
The company has earned Rs.93,500,000/= from FLMCL as Dividends (Previous Year
Rs.67,649,999/=) from FLMCL as Dividends for Investment made by the Company.
F L C Properties (Pvt) Ltd.,(FLCPL)
FLCH has settled Rs.2,583,607/= for operational expenses and financial charges on behalf
of FLCPL (Previous year - Rs. 10,396,845/=).
Amount receivable as at 31st March 2013 is Rs.191,314,263/= (Previous Year
Rs.6,996,845/=)
Enselwatte Power (Pvt) Ltd (EPL)
Amount receivable as at 31
Rs.895,778/=).
st
March 2013 is Rs.3,517,632/= (Previous year
(TRLHL)
Amount receivable as at 31
Rs.2,500,000/=).
st
Dolekanda Power (Pvt) Ltd (DPL)
Amount payable as at 31
Rs.9,549,270/=).
F L C Estate Bungalows (Pvt) Ltd (FLEBL)
The Company has Paid Rs.83,518/= (Previous year Rs.16,398/=) on behalf of FLEBL as
Administrative expenses.
st
77
FLC HOLDINGS PLC
Lanka Orix Finance Co. PLC (LOFCL)
The company has earned Rs.35,791,740/= as Gross Interest Income for the Short Term
Deposits made in LOFCL during the year. (Previous year Rs.25,845,387/-). The Short
Term Deposits as at 31st March 2013 amounted to Rs.175,000,000/= (Previous year Rs.250,000,000/=).
The Company has obtained a revised Speed Draft Facility of Rs.80,000,000/= (Originally
Rs.115,000,000/=) and repaid Rs. 20,876,800/= during the year (Previous year Rs.31,573,200/=). The interest paid for the loan during the Year was Rs.14,288,564/=
(Previous year- Rs.6,071,404/=).
Commercial Leasing & Finance PLC
(CLCL)
The company has earned Rs. 42,717,187/= as Gross Interest Income for the Short Term
Deposits made in CLCL during the year (Previous year Rs.11,200,235/=). The Short Term
Deposits as at 31st March 2013 amounted to Rs.110,000,000/= (Previous year Rs.154,868,525/=).
Lanka Orix Leasing Co PLC (LOLC)
The company has earned Rs. 37,646,233/= as Gross Interest Income for the Short Term
Deposits made in LOLC during the year (Previous year Rs.14,687,52/=). The Short Term
Deposits as at 31st March 2013 amounted to Rs. 250,000,000/= (Previous year Rs.250,000,000/=).
LOLC Factors Ltd (LOLCFL)
The company has earned Rs.25,202,877/= as Gross Interest Income for the Short Term
Deposits made in LOLCFL during the year (Previous year Rs.10,430,340/=). The Short
Term Deposits as at 31st March 2013 amounted to Rs.100,000,000/= (Previous year Rs.300,000,000/=)
43.4.2.2 Free Lanka Management Co. (Pvt) Ltd., (FLMCL) with other Related Parties
Pussellawa Plantations Ltd (PPL)
FLMCL has received Rs. 208,930,806/=
Rs.208,657,052/=).
as Management fees (Previous year
FLMCL has received Rs. 39,435,109/= as Dividends on investment in (Previous year
Rs.50,566,151/=).
Ceylon Estate Teas (Pvt) Ltd (CETL)
FLMCL granted a loan to CETL amounting to for Rs.21,500,000/=(Previous year
Rs.4,000,000/=) and received loan interest of Rs. 602,603/= (Previous year Nil)
FLMCL has invested in shares for Rs.45,500,000/= in ordinary shares (Previous year
Nil).
78
Agstar Fertilizers PLC (AFL)
FLMCL has received Rs.157,500/= as Dividends (Previous year Nil).
(STPL)
FLMCL has incurred Rs. 269,525/= as Preliminary Expenses on behalf of STPL (Previous
year Rs.253,181/=).
Melfort Green Teas (Pvt) Ltd.
FLMCL has received Rs. 5,850,000/= as Dividends (Previous year Rs 2,925,000/=).
FLC HOLDINGS PLC
43.4.2.3 Pussellawa Plantations Ltd (PPL) with other Related Parties
Maturata Plantations Ltd (MPL)
PPL has paid Rs.3,359,664/= on behalf of MPL as Office Rent, Refurnishing cost and
Other services (Previous year Rs.2,563,576/=).
PPL has paid Rs. 149,773/= to MPL as Vehicle Maintenance & Hiring Charges (Previous
year Rs.97,742/=).
PPL has received Rs.149,431/= as reimbursement of Vehicle Maintenance & Hiring
Charges from MPL (Previous year Rs.109,638/=).
PPL has received Rs. 2,159,664/= as Office Rent from MPL (Previous year Nil).
PPL has received Rs.706,603/= as reimbursement of Other Services from MPL (Previous
year Rs.956,768/=).
PPL has paid Rs.754,344/= to MPL as Communication and Other Expenses (Previous year
Rs.713,952/=).
Melfort Green Teas (Pvt) Ltd (MGTL)
PPL has earned Rs.8,324,335/= for lent Labour and others to MGTL (Previous year Rs.
8,731,366/=).
PPL has received Rs.8,280,410/= as reimbursement of Lent labour and other charges
from MGTL (Previous year Rs.7,027,687/=).
PPL has earned Rs.84,836/= for supply of Teas to MGTL (Previous year Rs. 27,763/=).
PPL has incurred Rs.2,064,590/= for tea purchased from MGTL (Previous year
Rs.3,371,335/=).
PPL has received Rs.200,000/= as reimbursement of Office refurnishing costs from
MGTL (Previous year Nil).
PPL has received Rs.2,423,200/= as reimbursement of Office Expenses and Factory rent
from MGTL (Previous year Nil).
PPL has received Rs. 260,375/= as reimbursement of Communication and other
Expenses from MGTL (Previous year Rs.124,644/=).
PPL has paid Rs.1,500,000/= for Ten Purchases (Previous Year Nil).
(TLRHL)
PPL has received Rs.996,040/= as reimbursement of Valuation fee for Geragama, Ayr
Bungalow Hotel Project (Previous Year Nil).
PPL has received Rs. 99,500/= as reimbursement of survey fee with Cost of plan for Hotel
Project (Previous Year Nil).
PPL has earned Rs.74,500/= for supply of Teas to CETL (Previous year Rs. 859,426/=).
PPL has paid Rs. 239,013/= as Communication and Other Expenses (Previous year
Rs.1,293,908/=).
PPL has received Rs. 591,180/= as reimbursement of Communication and Other
Expenses from CETL (Previous year Rs.220,610/=).
PPL has received Rs. 928,000/= as reimbursement of Office rent from CETL (Previous
year Nil).
79
FLC HOLDINGS PLC
PPL has received Rs. 208,583/= as reimbursement of Tea sales from CETL (Previous year
Rs 35,450/=).
PPL has received Rs.117,160/= as reimbursement of Survey and labour charges from
CETL (Previous year Nil).
F L C Hydro Power PLC (HPPLC)
PPL has paid Rs. 768,779/= as Office refurnishing cost, Communication and other services
(Previous year Rs.1,198,788/=).
PPL has received Rs.769,066/= as reimbursement of Communication and other services
from HPPLC (Previous year Rs. 801,888/=).
PPL has received Rs.354,255/= as reimbursement of cost of labour and transport charges
from HPFPLC (Previous year Rs.290,501/=).
PPL has paid Rs.7,546/= as survey charges on behalf of Thebuwana Hydro Power (Pvt)
Ltd.(Previous Year Nil)
Free Lanka Trading Company Ltd (FLTC)
PPL has paid Rs 157,658/= as Communication and Traveling Expenses (Previous year Rs
164,977/=).
PPL has received Rs.228,977/= as reimbursement of Communication and Travelling
Expenses (Previous year Rs.247,974/=).
PPL has paid Rs 2,700,000/= as Vehicle hiring Charges (Previous year Rs. 900,000/=).
PPL has earned Rs.124,525/= for supply of Teas to FLTC (Previous year Rs. 55,375/=).
PPL has settled vehicle hiring charges of Rs.3,600,000/= (Previous Year Nil)
Lanka Orix Leasing Co,PLC (LOLC)
PPL has repaid loan capital of Rs.9,642,444/= to LOLC (Previous year Rs.9,038,871/=).
PPL has incurred an Inerest expenses of Rs. 4,370,982/= on the loan obtained from LOLC
Browns & Company PLC (BCPLC)
PPL has incurred an expenses of Rs. 876,063/= for the Consumables (Previous year Rs
905,186/=).
PPL has incurred an expenses of Rs.36,757,662/= for the fertilizer purchased during the
year (Previous year Rs 38,250,261/=).
43.4.2.4 Free Lanka Plantations Co. (Pvt) Ltd., (FLPCL) with Other Related Parties
80
Management fee of Rs. 42,364,544/= has been charged for the current year (Previous Year
Nil). Amount receivable as at 31st March 2013 is Rs.72,739,923/= (Previous Year
Rs.38,360,014/=)
FLC HOLDINGS PLC
43.4.2.5 Maturata Plantations Ltd., (MPL) with Other Related Parties
Lanka Orix Leasing Co,PLC (LOLC)
MPL has obtained a revolving fund facility of Rs.275,000,000/- during the year and of
which Rs.262,605,732/- is utilized at the end of the date of statement of financial position.
Amount Payable as at 31st
March 2013 is Rs.262,605,732/- (Previous Year
Rs.262,605,732/-)
MPL has paid off Rs. 12,405,888/= in settlement of Commercial Loans & loans obtained
under ADB Plantation development Project through LOLC (Previous Year Rs.18,528,342/=). Amount Payable as at 31st March 2013 is Rs.51,970,778/- (Previous
Year Rs.64,376,666/=).
Loan obtained for Beverly Factory operation was increased by Rs.4,180,296/= to
Rs.26,447,185/= during the year (Previous Year Rs.22,266,890/=).
MPL has incurred an interest expense of Rs. 75,343,752/= for loans obtained from LOLC
(Previous Year Rs.18,678,793/=).
MPL has paid off Rs.1,965,828/= (excluding input VAT) in settlement of loans obtained
under finance leasing arrangements from LOLC (Previous Year Rs.1,040,312/=). Amount
Payable as at 31st March 2013 is Rs.2,712,706/= (Previous year Rs.3,918,455/=).
Free Lanka Trading Co,Ltd (FLTC)
MPL has incurred a vehicle rent expense of Rs. 1,200,000/= for obtaining vehicles on rent
(Previous year Rs.900,000/=). Amount Payable as at 31st March 2013 is Rs.1,000,000/=
(Previous year Rs.1,300,000/=)
Brown & Company PLC. (BCPLC)
MPL has paid Rs.1,430,869/= for buying toners & servicing photocopy machines,
generator repair & servicing, repairing vehicle, machinery repair and other items (Previous
year Rs. 4,624,262/=).
MPL has incurred an expense of Rs.62,238,014/= for the fertilizer purchased during the
year (Previous year - Rs.35,362,679/=). Amount payable as at 31st March 2013 is
Rs.19,362,170/=.
MPL has incurred Rs. 6,352,363/= for the green leaf bought from RFELL (Previous year
Rs.4,516,218/=).
MPL has earned Rs.6,270,363/= ) as reimbursement of expenses met by the company on
behalf of RFELL (Previous year Rs.6,432,679/=).
43.4.2.6 F L C Properties (Pvt) Ltd., (FLCPL) with Other Related Parties
Sierra Civil Engineering (Pvt) Ltd (SCEL)
SCEL has billed for the value of worked done amounting to Rs. 244,140,272/= during the
year (Previous year Rs. 48,911,744/=).
81
FLC HOLDINGS PLC
43.4.2.7 F L C Hydro Power PLC (HPPLC) with other Related Parties
(HHPL)
HPPLC has incurred total expenses amounting to Rs.5,988,355/= for capital expenses and
finance charges on behalf of HHPL (Previous Year Rs.1,580,307/=).
HPPLC has settled Promissiory Note worth of Rs.10,000,000/= to HHPL during the
year.
HPPLC has settled the due of MPL amounting to Rs. 33,697/= for operational expenses
Dolekanda Power (Pvt) Ltd (DPL)
HPPLC has incurred total expense amounting to Rs.132,111/= for capital expenses and
finance charges (Previous Year Rs.193,412/=).
Company has fully settled the due amount of F L C Hydro Power PLC amounting to
Rs.132,111/= during the year (Previous Year Nil).
Enselwatte Power (Pvt) Ltd (EPL)
HPPLC has incurred total expense amounting to Rs.202,061/- (Previous Year Rs.4,831,093/-) for capital expenses and finance charges on behalf of the company.
(FLCPHL)
HPPLC has incurred total expense amounting to Rs.99,389/- (Previous Year - Rs.159,947/)
for capital expenses and finance charges on behalf of the company.
Company has fully settled the due amount of Hydro Power Free Lanka PLC amounting to
Rs. 99,389 (Previous Year Rs.489,569/-) during the year.
Pussellawa Plantations Limited has incurred total expenses amounting to Rs.3,355,348/(Previous Year Rs.1,168,459/-) on behalf of the Company.
Pussellawa Plantations Limited (PPL)
HPPLC has settled Rs.3,326,087/- (Previous Year
year.
44
Rs.1,128,958/-) during the
Assets Pledged as Collaterals
44.1 Assets Pledged as Collaterals by the Company
Name of the
Financial Institution
a) Lanka Orix Finance
Co PLC
82
Nature of the
Facility
Speed Draft
Facility
Granted
Rs.
80,000,000
Balance
Outstanding
As at
31.03.2013
Securities Pledged
Rs.
62,550,000
Fixed Deposit Certificate for
Rs. 100.0 Mn
FLC HOLDINGS PLC
44.2 Assets Pledged as Collaterals by the Group of Companies
44.2.1 Maturata Plantations Limited (Sub Subsidiary)
Name of the
a) Seylan Bank PLC
b) Lanka Orix Leasing Co
PLC
Nature of the
Facility
Facility
Granted
Rs.
Balance
Outstanding
As at
31.03.2013
Rs.
Securities Pledged
Term Loan
(Tea Relief I)
100,000,000
35,396,000
Mortgage over leasehold rights of
Bramley Estate for Rs.13.0 Mn.
Term Loan
(Tea Relief II)
Term Loan III
13,000,000
5,416,667
150,000,000
110,000,000
Primary Mortgage for Rs.36.0 Mn &
Secondary Mortgage bond for Rs.50 Mn
over leasehold rights of Gonapitiya
Estate.
Bank Overdrafts
125,000,000
125,000,000
Temporary Overdraft
40,000,000
9,105,779
-
Term Loan (PSRP II)
(ADB)
24,567,597
2,493,097
Mortgage over leasehold rights of estate
land,buildings, fixed and floating assets
of Ragala Estate for Rs.120.0Mn.
Term Loan (PSRP IV)
(ADB)
13,400,000
2,800,000
land, buildings, fixed and floating assets
of Maha Uva Estate for Rs.19.50Mn.
Term Loan (PSRP V)
(ADB)
16,990,750
4,655,000
land, buildings, fixed and floating assets
of Enselwatte Estate for Rs.160.25Mn.
482,958,347
294,866,543
4,427,148
1,803,596
PDP Loan under ADB
Plantation Development
Project
Mortgage over leasehold rights of Alma
Estate for Rs.26.0Mn.
Primary Continuing mortgage bond for
Rs.42.93 Mn over the unexpired
leasehold rights over the land called
Anningkanda and Panilkanda Estates in
Deniyaya.
Corporate Guarantee of M/s F L C Joint
Venture Co. (Pvt) Ltd for Rs.36.11 Mn
- do -
38,506,166
13,163,700
- do -
59,205,582
37,003,482
17,759,000
26,447,185
On demand promissory note for
Rs.17.759Mn
275,000,000
262,605,732
Corporate Guarantee of M/s F L C
Holdings PLC for Rs. 275.00 Mn
Loan-Beverly Factory
Revolving Credit Facility
Primary continuing mortgage bond on
all unexpired leasehold rights over
Land, Estate and Premises called "Hayes
Group" in Deniyaya/Rathnapura.
A counter guarantee was given by MPL
for Rs. 275.0 Mn in favor of F L C
Holdings PLC on the same terms and
conditions with 1% guarantee fee.
On demand promissory note for
Rs.275.0Mn
394,897,896
341,023,695
83
FLC HOLDINGS PLC
44
Assets Pledged as Collaterals (Contd..)
Name of the
Nature of the
Facility
Facility
Granted
Rs.
Balance
Outstanding
As at
31.03.2013
Rs.
Securities Pledged
c) People's Leasing
Finance PLC
Finance Lease
2,785,000
496,801
Absolute ownership of the
asset on finance lease.
d) Merchant Bank of Sri
Lanka PLC
Finance Lease
23,132,000
4,968,766
- do -
e) Lanka Orix Leasing
Company PLC
Finance Lease
5,988,600
3,276,380
- do -
44.2.2 Pussellawa Plantations Limited (Sub Subsidiary)
Name of the
a)Bank of Ceylon
Nature of the
Facility
70,000,000
40,472,800
8,081,868
4,514,487
Mortgage over Leasehold right of
Stellenberg Estate
Hellbodde and Stellenberg Estates
ADB - Term Loan
48,576,000
6,072,000
Pussella Estate
ADB - Term Loan
74,714,400
11,642,018
Melfort and Mooloya Estates
ADB - Term Loan
82,425,105
20,239,488
316,188,305
50,549,861
Kaloogalla, Mooloya & Geragama
Estates
70,000,000
33,326,486
150,000,000
81,809,000
220,000,000
115,135,486
10,000,000
(33,743,781)
Hemingford and Keragala Estates
Overdraft
ADB - Term Loan
84
Securities Pledged
Overdraft
ADB - Term Loan
Total
b)Sampath Bank PLC
Facility
Granted
Rs.'000
Balance
Outstanding
As at
31.03.2013
Rs.'000
Beaumont Estate
Primary mortgage over Leasehold rights
together with Factory building therein
of Halpe Estate
c)People's Bank
Overdraft
d)National Development
Bank PLC
ADB - Term Loan
117,944,080
7,654,664
Delta,Ayr, Siriniwasa Pambegama and
Elston Estates
e)Lanka Orix Leasing
Company PLC
ADB - Term Loan
67,441,673
31,795,511
Sogama Estate
f)Commercial Bank of
Ceylon PLC
ADB - Term Loan
150,000,000
135,260,000
Primary mortgage over Leasehold rights
together with Factory building therein
of Rothchild and Sanquhar Estates
85
GROUP
-
102,662,597
-
637,149,014
637,149,014
-
-
-
(261,288,884)
-
(261,288,884)
b) Depreciation/
Ammortization
45.1.4 Segmental Capital
Expenses
a) Capital
Expenditure
45.1.3 Segmental Liabilities
Current Liabilities
45.1.2 Segmental Assets
Non-current Assets
Current Assets
134,343,479
146,518,980
1,740,666,100
1,364,428,189
3,105,094,289
2,699,850,551
656,638,639
3,356,489,190
Other Comprehensive
Income
Defined benefit plan
acturial gains/(Losses)
Income tax on other
comprehensive income
Othe Comprehensive
Income for the Year, net of tax
Total Comprehensive
Income for the Year
363,353,816
-
-
Add: Other Income
Gain on Fair Value of
Investment Properties
Gain on Changes in Fair
Values of Biological Assets
Share of Results of Equity
Accounted Investees (Net of Tax)
Less: Expenses
Profit/(Loss)
before Taxation
363,353,816
Less: Taxation
Net Profit/(Loss)
for the Year
363,353,816
-
637,149,014
-
(261,288,884)
152,266,717
214,759,879
1,816,493,420
1,102,984,309
2,919,477,729
20,312,167
391,621,985
164,341,154
71,911,969
236,253,123
6,107,249,622
124,491,505
6,231,741,127
-
-
2,698,415,830
596,971,347
3,295,387,177
-
-
(735,819,146)
534,486,417
(4,257,052,559)
(261,288,884)
1,270,305,563
31.03.2013
Rs.
(4,487,521,219)
363,353,816
31.03.2012
Rs.
31.03.2012
Rs.
27,443,995
358,629,219
159,143,198
78,137,559
237,280,757
5,722,793,014
149,271,781
5,872,064,795
1,345,603,307
-
-
-
1,345,603,307
1,345,603,307
-
535,859,238
-
-
(803,591,768)
809,744,069
1,613,335,837
Rubber
3,995,763,675
Tea
4,850,875,035
Revenue
Revenue
Expenditure
Gross Profit/(Loss)
31.03.2013
Rs.
SEGMENTAL ANALYSIS
Primary Segments (Business Segments)
45.1.1 Segmental Results
45
45
28,297,713
219,334,546
43,881,817
17,708,779
61,590,596
796,855,997
42,205,936
839,061,933
(11,626,602)
-
-
-
(11,626,602)
(11,626,602)
-
-
-
(62,997,540)
(11,626,602)
51,370,938
31.03.2013
Rs.
28,371,197
122,970,859
40,047,762
7,163,879
47,211,641
607,391,084
255,492,037
862,883,121
11,129,032
-
-
-
11,129,032
11,129,032
-
-
-
(61,956,510)
11,129,032
73,085,542
31.03.2012
Rs.
Hydro Power
-
-
-
-
31.03.2012
Rs.
-
-
-
-
90,326,000
-
90,326,000
90,326,000
-
90,326,000
-
-
-
31.03.2013
Rs.
-
38,726,075
-
29,405,742
29,405,742
-
-
42,604,425 244,140,272
-
267,276,705
-
-
-
267,276,705
267,276,705
8,834,946
-
258,441,759
-
-
31.03.2013
Rs.
177,332,547
-
-
-
177,332,547
177,332,547
(2,658,780)
-
179,991,327
-
-
31.03.2012
Rs.
Investment Income
-
48,911,744
7,213,506
7,213,506
2,539,355
-
312,985,139
312,985,139
1,011,900
-
120,044,898
120,044,898
230,585,744
116,138,264 1,123,836,745 1,399,947,302
346,724,008 1,123,836,745 1,399,947,302
-
-
-
-
-
-
-
-
-
31.03.2012
Rs.
Real Estate
5,742,386,263 5,546,869,672 565,052,016
- 83,668,688
5,742,386,263 5,546,869,672 648,720,704
204,409,911 (400,295,600)
-
-
-
204,409,911 (400,295,600)
204,409,911 (400,295,600)
-
204,409,911 (400,295,600)
-
-
-
-
31.03.2013
Rs.
Timber
31.03.2013
Rs.
1,409,434
-
95,424,795
-
307,501,148
90,326,000
353,681,065
1,718,774
67,452,797
(11,132,954)
10,028,100
45,077,894
429,201,972
67,452,797
(11,132,954)
78,585,751
361,749,175
467,438,422
(105,689,247)
(2,658,780)
(503,948,477)
136,973,070
-
275,416,122
-
6,691,400
7,690,694
195,520,814
802,555,905
215,785,209
752,963,895
3,911,024,145
1,383,078,130
5,294,102,275
313,319,271 16,239,771,067 15,129,870,115
578,627,242 2,866,172,993 3,096,447,973
891,946,513 19,105,944,060 18,226,318,088
954,128,700
(35,394,384)
7,037,483
(42,431,867)
989,523,084
1,820,575,946 1,895,339,765 3,769,465,017
37,459,515
67,533,393 1,833,899,333
1,858,035,461 1,962,873,158 5,603,364,350
328,376,618
835,331,480
1,163,708,098
(598,478,918) (443, 278,428)
(35,394,384)
7,037,483
78,585,751
(563,084,534) (510,731,225)
(401,164,879) (405,041,978) 1,151,442,739
(161,919,655) (105,689,247) (161,919,655)
(42,431,867)
5,719,356,410
31.03.2012
Rs.
(35,099,086) (5,309,934,635) (5,157,699,923)
2,072,270
933,322,095
561,656,487
37,171,356 6,243,256,730
31.03.2012
Rs.
Total
8,834,946
(543,941,289) (503,948,477) (543,941,289)
428,640
-
95,239,306
(23,596,730)
47,108,464
70,705,194
31.03.2013
Rs.
Unallocated
FLC HOLDINGS PLC
45
SEGMENTAL ANALYSIS
COMPANY
Unallocated
Investment Income
45.2.1
31.03.2013
Rs.
31.03.2012
Rs.
31.03.2013
Rs.
31.03.2012
Rs.
31.03.2013
Rs.
31.03.2012
Rs.
Revenue
Revenue Expenditure
Gross Profit/(Loss)
93,500,000
93,500,000
67,649,999
67,649,999
-
-
93,500,000
93,500,000
67,649,999
67,649,999
208,411,705
301,911,705
(49,638,491)
252,273,214
131,015,744
198,665,743
(28,169,411)
170,496,332
(30,511,831)
(30,511,831)
(30,511,831)
(16,911,901)
(16,911,901)
(16,911,901)
208,411,705
(30,511,831)
271,399,874
(49,638,491)
221,761,383
131,015,744
(16,911,901)
181,753,842
(28,169,411)
153,584,431
Add : Other Income
Less : Expenses
Profit/(Loss) before Taxation
Less : Taxation
Net Profit/ (Loss) for the Year
45.2.2
Total
Segmental Results
Segmental Assets
Non-current Assets
Current Assets
1,448,455,495 1,443,315,350
1,117,906,526
6,439,160
2,566,362,021 1,449,754,510
- 1,448,455,495 1,443,315,350
418,002,255 1,393,508,142 1,535,908,781 1,399,947,302
418,002,255 1,393,508,142 2,984,364,276 2,843,262,652
45.2.3 Segmental Liabilities
Current Liabilities
45.2.4
86
-
-
312,985,139
312,985,139
120,044,898
120,044,898
312,985,139
312,985,139
120,044,898
120,044,898
a) Long Term Investments
-
350,000,000
-
-
-
350,000,000
b) Depreciation
-
-
2,539,354
1,011,900
2,539,354
1,011,900
Segmental Capital Expenses
FLC HOLDINGS PLC
46
Explanations for the transition from SLAS to SLFRS/LKAS
To comply with the SLFRS 1, the group provides explanations to the transition to SLFRS/LKAS from SLAS. The explanations includes a
background and quantification of the changes, this also includes reconciliation of Group’s equity as at the date of transition, ie. 1st April 2011 and
end of latest comparative reporting period 31st March 2012. Reconciliation for total comprehensive income includes only for the latest
comparative financial year ended 31st March 2012.
46.1
Reconciliation of Total Comprehensive Income for the Year Ended 31st March 2012
Company
Group
SLFRS/LKAS
2011/12 Remeasurements
SLAS SLFRS/LKAS
2011/12
2011/12 Remeasurements
SLAS
2011/12
Notes
Rs.
Continuing Operations
Revenue
Cost of Sales
Gross Profit/ (Loss)
Gain on Changes in Fair Value of
Biological Assets
Results from operating activities
Finance Costs
Share of Results of Equity
Accounted Investees (Net of Tax)
Profit/(Loss) Before Taxation
Income Tax Expense
A
B
C
D
E
F
Rs.
Rs.
Rs.
5,719,356,410
135,239,947 5,584,116,463
(5,157,699,923) (141,101,994) (5,016,597,929)
561,656,487
567,518,534
(5,862,047)
67,649,999
67,649,999
4,444,325
4,444,325
63,205,674
63,205,674
423,801,431
56,703,009
131,015,744
-
1,339,712
-
129,676,032
-
136,973,070
(330,696,881)
643,348,798
191,741,511 (54,768,441)
27,138,972 (357,835,853)
635,418,680
7,930,118
(10,840,497)
187,825,246
5,784,037
(10,840,497)
182,041,209
(173,251,596)
- (173,251,596)
(6,071,404)
-
(6,071,404)
275,416,122 (148,385,309)
- (56,703,009)
G
(2,658,780)
467,438,422
1,162,161
9,092,279
(3,820,941)
458,346,143
181,753,842
5,784,037
175,969,805
H
(105,689,247)
(10,015,441)
(95,673,806)
(28,169,411)
4,444,325
(23,725,086)
361,749,175
(923,162)
362,672,337
153,584,431
10,228,362
152,244,719
I
78,585,751
78,585,751
-
-
-
-
J
(11,132,954)
(11,132,954)
-
67,452,797
67,452,797
-
-
-
-
429,201,972
66,529,635
362,672,337
153,584,431
10,228,362
152,244,719
Profit/(Loss) for the year from
continuing operations
Defined benefit plan acturial
gains/(losses)
Tax on other comprehensive
income
for the year, net of tax
Total Comprehensive Income for
the year
Rs.
Rs.
87
FLC HOLDINGS PLC
46
Explanations for the transition to SLFRS (Contd.)
46.2
Reconciliation of Statement of Financial Position as at 31st March 2012
Company
Group
SLFRS/LKAS
31.03.2012 Remeasurements
Rs.
Notes
Rs.
ASSETS
Non-Current Assets
Leasehold Property
Investment Property
Investees
K
L
M
N
O
Current Assets
Inventories
Amounts Due From Related
Parties
Total Assets
Stated Capital
Revaluation Surplus
Retained Earnings
Total equity attributable to
equity holders of the Company
Non-controlling Interests
Total Equity
Deferred Income
Current Liabilities
Income Tax Payable
Borrowings
Bank Overdrafts
88
p
Q
R
S
T
U
Y
V
W
X
SLAS SLFRS/LKAS
31.03.2012
31.03.2012 Remeasurements
Rs.
Rs.
Rs.
508,800,727
508,800,727
181,674,000
181,674,000
2,020,672,004 (3,566,249,111) 5,586,921,115
9,065,350
6,749,481,040 6,749,481,040
5,546,869,672 (2,008,472,670) 7,555,342,342
- 1,434,250,000
70,878,672
71,222,484
(343,812)
41,000,000
41,000,000
15,119,376,115 1,215,415,447 13,903,960,668 1,443,315,350
SLAS
31.03.2012
Rs.
9,065,350
- 1,434,250,000
1,443,315,350
10,494,000
-
10,494,000
-
-
-
561,781,652
535,680,423
-
(83,494,941)
(55,500,125)
(4,000,000)
645,276,593
591,180,548
4,000,000
83,426,800
(14,500,125)
-
14,500,125
83,426,800
4,000,000
8,841,273
12,841,273
12,357,981
841,233,302
857,451,000 352,758,940
(16,217,698)
1,144,911,323
13,080,897 1,131,830,426 951,403,581
3,096,447,973 (142,131,867) 3,238,579,840 1,399,947,302
18,226,318,088 1,073,283,580 17,153,034,508 2,843,262,652
12,357,981
2,758,940 350,000,000
13,080,897 938,322,684
1,339,712 1,398,607,590
1,339,712 2,841,922,940
2,568,000,000
122,346,390
3,493,415,511
- 2,568,000,000 2,568,000,000
204,631,800
(82,285,410)
(236,443,289) 3,729,858,800 155,217,754
- 2,568,000,000
1,339,712 153,878,042
6,183,761,901
6,748,453,912
12,932,215,813
(318,728,699) 6,502,490,600 2,723,217,754
664,443,912 6,084,010,000
345,715,213 12,586,500,600 2,723,217,754
1,339,712 2,721,878,042
1,339,712 2,721,878,042
1,122,904,882
1,376,597,007
873,981,112
537,541,144
3,911,024,145
822,999,427
3,514,719
27,900,596
131,701,715
- 1,122,904,882
- 1,376,597,007
33,762,164
840,218,948
652,221,583
(114,680,439)
725,538,509 3,185,485,636
-
-
-
822,999,427
3,514,719
25,870,738
131,701,715
12,657,114
83,426,800
14,766,999
9,193,985
-
-
12,657,114
83,426,800
14,766,999
9,193,985
-
2,029,858
-
261,343,163
261,343,163
135,618,510
135,618,510
2,029,858 1,381,048,272 120,044,898
1,383,078,130
18,226,318,088 1,073,283,580 17,153,034,508 2,843,262,652
- 120,044,898
1,339,712 2,841,922,940
FLC HOLDINGS PLC
46
Explanations for the transition from to SLFRS/SLAS/LKAS (Contd.)
46.3 Reconciliation of the Statement of Financial Position as at 01st April 2011
Group
Note
ASSETS
Non-Current Assets
Leasehold Property
Investment Property
Investees
K
L
M
N
O
Current Assets
Inventories
Amounts Due From Related
Parties
Short Term
Investments/Deposits
Total Assets
Stated Capital
Revaluation Surplus
Retained Earnings
Total equity attributable to
equity holders of the Company
Non-controlling Interest
Total Equity
Deferred Income
Current Liabilities
Income Tax Payable
Borrowings
Bank Overdrafts
p
Q
S
U
Y
V
W
Company
SLFRS/LKAS
1/4/2011 Remeasurements
Rs.
Rs.
SLAS SLFRS/LKAS
1/4/2011
1/4/2011 Remeasurements
Rs.
Rs.
Rs.
524,129,099
524,129,099
181,674,000
181,674,000
1,887,704,102 (3,161,445,432) 5,049,149,535
5,861,857,548 5,861,857,547
5,970,698,114 (1,596,808,261) 7,567,506,375
1,084,250,000
12,793,703
(1,506,297)
14,300,000
33,000,000
33,000,000
14,471,856,566 1,135,097,557 13,336,759,009 1,084,250,000
SLAS
1/4/2011
Rs.
- 1,084,250,000
-
1,084,250,000
10,494,000
-
10,494,000
-
-
-
695,605,647
424,111,472
(93,458,739)
(33,000,000)
789,064,386
457,111,472
111,382
-
-
111,382
-
15,736,228
-
15,736,228
74,157,787
-
74,157,787
271,113,642
1,953,665,019
3,360,232,008
17,842,582,574
(50,909,768)
322,023,410
- 1,953,665,019 1,588,385,598
(177,368,507) 3,537,600,515 1,662,654,767
957,729,050 16,884,853,524 2,746,904,767
- 1,588,385,598
- 1,662,654,767
- 2,746,904,767
2,568,000,000
86,889,815
3,394,844,940
- 2,568,000,000 2,568,000,000
(82,270,731)
169,160,546
(286,191,860) 3,681,036,800
1,632,323
- 2,568,000,000
1,632,323
6,049,734,755
6,490,868,286
12,540,603,041
(368,462,591) 6,418,197,346 2,569,632,323
588,686,478 5,902,181,808
220,223,887 12,320,379,154 2,569,632,323
- 2,569,632,323
- 2,569,632,323
927,561,186
1,383,818,898
947,465,737
489,715,289
105,000,000
3,853,561,110
939,019,105
120,000,000
2,006,121
52,266,021
60,000,000
1,500,000
183,685,307
89,941,869
1,448,418,423
17,842,582,574
927,561,186
- 1,383,818,898
825,544,736
121,921,001
(88,039,573)
577,754,862
105,000,000
737,505,163 3,116,055,947
-
-
-
939,019,105
120,000,000
2,006,121
52,266,021
60,000,000
1,500,000
150,357,268
26,574,549
340,627
-
-
150,357,268
26,574,549
340,627
-
183,685,307
89,941,869
- 1,448,418,423
177,272,444
-
177,272,444
-
957,729,051 16,884,853,524 2,746,904,767
- 2,746,904,767
89
FLC HOLDINGS PLC
46 Explanations for the transition from SLAS to SLFRS/LKAS (Contd..)
46.4 Notes to the Remeasurements
Nature of Adjustment
A
Company
Rs.
(500,740,458)
635,980,405
135,239,947
4,444,325
4,444,325
Revenue
Profit & loss of the perennial crop has been recognised in the financial period of harvesting in terms of SLAS 32.
Thus the unsold produce stocks were treated as a part of revenue. The scope of revenue recognition was changed as
per LKAS 18. Accordingly, the revenue is recognised on the date of sale. The unsold produce stocks as at the date of
financial position is excluded from revenue.
Removal of unsold produce stock as at the date of financial position from Revenue
Inclusion of previous year's unsold produce stocks sold during the year
Dividend Tax Adjustment
Total
B
Group
Rs.
Cost of sales
B.1 Matching the Cost of Sales against Revenue
The recognition of cost of sales has been changed simultaneously with the changes to the revenue recognition criteria. The cost of sale consists of the
costs that are directly attributable to goods sold. The cost of opening and closing produce stocks were adjusted to the cost of production. In addition, the
basis of measurement of unsold tea and rubber produce stocks have been changed in terms of LKAS 2 and LKAS 41. Refer Note P for the details of
changes in valuation method of inventory.
B.2 Classification of actuarial gain/(loss) of defined benefit plan under OCI
Gain/(Loss) on actuarial valuation of defined benefit plan is reclassified from cost of sale to OCI.
B.3 Reversal of Depreciation/Amortization due to fair valuation of bearer biological assets namely rubber & coconut
Depreciation and ammortization charged under SLAS on berarer biological assets was reversed with the adoption of fair value model as per LKAS 41.
Group
Rs.
Add opening produce stock at Lower of deemed cost or NRV
Deduct closing produce stock at Lower of deemed cost or NRV
Reversal of Dep. / Ammr. Charges during the year ended 31st March 2012 for
Rubber and Coconut due to Fair Valuation
Transfer of Acturial Gain to OCI for the Year ended 31st March 2012
Total
Company
Rs.
(565,127,613)
449,197,360
-
53,414,010
(78,585,751)
(141,101,994)
-
C Other Income
C.1 Sale of trees
Proceeds from sale of trees recognized under other income is transferred to respective bearer biological assets measured at fair value under LKAS 41.
C.2 Interest Income
Loans granted to employees below the market rates are measured at fair value as per LKAS 39 and the increase is added to other income.
C.3 Gain on Money Market Investments
The impact in fair valuation of investments as per LKAS 39 is recognized under other income.
Reversal of Proceeds from Sale of Trees
Increase in Interest Income due to measurement at Market Rate
Gain on Money Market Investments
Total
D
E
Gain on Bargain Purchase previously recognized in the Income Statement transferred to the
Total
Company
Rs.
(156,704,149)
171,704
8,147,136
(148,385,309)
122,576
1,217,136
1,339,712
(56,703,009)
(56,703,009)
-
546,680,172
(354,938,661)
191,741,511
-
Gain/(Loss) on Changes in Fair Value of Biological Assets
Rubber, Coconut and timber plantations are recognized at fair valuation in accordance with LKAS 41.
The gain/(loss) on changes in fair value during the year is recognized accordingly.
Gain/(Loss) on Fair Valuation of Bearer Biological Assets
Gain/(Loss) on Fair Valuation of Consumable Biological Assets
Total
90
Group
Rs.
FLC HOLDINGS PLC
46
Explanations for the transition from SLAS to SLFRS/LKAS (Contd..)
46.4 Notes to the Remeasurements (Contd.)
F
Amortization of pre paid staff cost (Refer C.2)
Derecognition of loss on fair value of Money Market Securities
Total
G
H
I
J
Group
Rs.
Company
Rs.
(49,128)
27,188,100
27,138,972
-
1,162,161
1,162,161
-
(10,015,441)
(10,015,441)
4,444,325
4,444,325
78,585,751
78,585,751
-
(11,132,954)
(11,132,954)
-
Share of profit/(loss) of equity accounted investees (net of tax)
Increse in Profits in Equity Accounted Investee due to IFRS convergence in Melfort Green Teas (Pvt) Ltd
Total
Income Tax Expense
Increase in provision due to the changes in previously reported Profit/(Loss) for the year
Dividend Tax Adjustment
Total
Defined benefit plan acturial gains
Reclasification of Acturial gain under OCI
Total
Tax on other comprehensive income
Deferred tax on reclasification of Acturial gain under OCI
Total
Company
Group
st
31 March,
2012
Rs.
K
st
st
st
1 April,
2011
Rs.
31 March,
2012
Rs.
1 April,
2011
Rs.
(237,925,063) (257,955,608)
(3,384,000,779) (2,958,468,628)
55,676,731
54,978,804
(3,566,249,111) (3,161,445,432)
-
-
K.1 Transfer to Bearer Biological Assets previously recognized in Property,
Plant and Equipment under SLAS.
K.2 Re-classify Land Development Cost under Property, Plant and
Equipment.
Immovabale(JEDB/SLSPC)Assets on Finance Lease (Other than Bare
Land)
Immature/Mature Plantations reclassified under Bearer Biological Assets
Re-classify Land Development Cost
Total
L
L.1 Tea, Rubber, Coconut and Other Crops are categorized under Bearer Biological Assets.
L.2 Tea and Other Crops are recorded at cost due to practical dificulties to adopt fair value model. Rubber and Coconut Crops are recorded at fair value as
per LKAS 41.
L.3 The components of Bearer Biological Assets previously recognized under Property, Plant and Equipment and Timber Stocks are transferred to
Bearer Biological Assets.
L.4 Nurseries of Tea, Rubber and Other Crops were previously classified as
Bearer/Consumable Biological Assets as per LKAS 41.
inventory under SLAS which has to be re-classified under
91
FLC HOLDINGS PLC
46
Company
Group
st
st
31 March,
2012
Rs.
1 April,
2011
Rs.
st
1 April,
2011
Rs.
-
-
-
-
-
-
20,659,597
1,119,490,692
-
-
42,284,655
42,284,655
(103,789,686)
(77,148,820)
6,749,481,040 5,861,857,547
-
-
(2,008,472,670) (1,596,808,261)
(2,008,472,670) (1,596,808,261)
-
-
Transfer of value of timber component from Consumable to Bearer
Biological Assets - Rubber
1,674,376,714 1,598,755,611
Biological Assets - Coconut
30,626,451
Land Development Cost (Refer K.2)
(55,676,731)
(54,978,804)
Immovable (JEDB/SLSPC) Mature/Immature Plantations reclassified under
240,779,549
254,325,989
Mature/Immature Plantations reclassified under Bearer Biological Assets
3,424,859,645 2,958,468,628
Growing Crop Nurseries' of Bearer Biological Assets reclassified under
Impact on Fair Valuation of Bearer Biological Assets
Reversal of Depreciation/ Ammortisation charged on Mature Plantations Rubber and Coconut
Reversal of Grant Received on Rubber Replanting
Total
M
O
29,913,428
1,466,107,016
Biological Assets - Rubber & Coconut
Total
N
st
31 March,
2012
Rs.
Investments in Equity Accounted Investees
Revaluation of Stocks in Melfort Green Teas (Pvt) Ltd due to IFRS
convergence
Total
(343,812)
(343,812)
(1,506,297)
(1,506,297)
-
-
41,000,000
41,000,000
33,000,000
33,000,000
-
-
Reclassification of share advances under Long Term Investments
Total
p
Inventories
p.1 The prduce stock of biological assets ie. tea and rubber were valued at their estimated realizable values, net of direct selling expenses as per SLAS 32.
With the adoption of SLFRS, the agricultural products that are harvested from biological assets ie. green leaf and latex are required to measure at its fair
value less cost to sell at the point of harvest. Therefore, it is scoped under LKAS 2 and its fair value is the cost at the date of applying this standard. The
cost of semi-finished and finished products are estimated through attributing the direct manufacturing cost into the fair value of biological product's cost
of conversion, depending on the existing state of conversion as at the date of financial position. Subsequently, the measurement of inventory is carried at
the lower of cost and estimated net realizable value in accordance with LKAS 2.
Company
Group
st
Removal of produce stock valuation as per SLAS
Inclusion of produce stock valuation as per SLFRS
Growing Crop Nurseries' reclassified under Biological Assets (Refer L.4)
Total
92
st
31 March,
2012
Rs.
1 April,
2011
Rs.
31 March,
2012
Rs.
1 April,
2011
Rs.
(492,573,644)
441,030,547
(31,951,844)
(83,494,941)
(617,584,653)
546,732,861
(22,606,947)
(93,458,739)
-
-
st
st
FLC HOLDINGS PLC
46
Company
Group
Q
(33,000,000)
(33,000,000)
(14,500,125)
(14,500,125)
-
(4,000,000)
(4,000,000)
-
-
-
(16,217,698)
(16,217,698)
(50,909,768)
(50,909,768)
2,758,940
2,758,940
-
13,080,897
13,080,897
-
13,080,897
13,080,897
-
(82,285,410)
(82,285,410)
(82,270,731)
(82,270,731)
-
-
(293,994,983)
(200,743,733)
234,366,566
545,904,130
554,686,967
840,218,948
(254,086,255)
(200,889,937)
213,932,021
469,519,095
597,069,812
825,544,736
-
-
(10,890,753)
(103,789,686)
(114,680,439)
(10,890,753)
(77,148,820)
(88,039,573)
-
-
2,029,858
2,029,858
-
-
-
Revaluation Surplus
Re-computation of Revaluation Surplus
Total
V
(55,500,125)
(55,500,125)
Re-classification of Cash & Cash Equivalents
Total
U
1st April,
2011
Rs.
Re-classification of Short Term Deposits
Total
T
31st March,
2012
Rs.
Reclassified under short term Investments
Total
S
1st April,
2011
Rs.
Trade & Other Receivable
Reclassified under short term investments
Share advance reclassified under Long term Investments.
Total
R
31st March,
2012
Rs.
Deferred tax Liability
V.1 The deferred tax effect arises due to the increase of the taxable temporary
difference mainly as a result of fair valuation of biological assets. The
liability as at 1st April 2011 and 31st March 2012 has been increased as
analysed below.
V.2 This measurement effects on the net assets in the Statement of Financial
Position as at 1st April 2011, 31st March 2012 and CI for the year ended 31st
March 2012 as follows.
Unutilized Tax Losses
Employee benefits
Property, Plant & Equipment
Total
W Deferred Income
Grants relating to replanting of biological assets was recognised as deferred
income and ammrotised over the usful life under SLAS. Under LKAS 24
grant related to immature plantations are deducted from the carrying value
of the immature plantations since immature plantations is carried at cost.
Reversal of grants received on timber plantations
Reversal of grants received on Immature Rubber plantations
Total
X
Income Tax Payable
93
FLC HOLDINGS PLC
46
Y
Changes in Equity
st
st
31 March 2012 01 April 2011
Rs.
Rs.
Reversal of produce stock valuation under SLAS
Produce stock valuation according to SLFRS (Lower of cost or NRV)
Deferred tax charges/Reversal
Impact on Fair Valuation of Bearer Biological Assets
Crop Diversification
Removal of Amortisation charges on Crop Diversification for the year
Adjustment to produce stock opening balances
Reversal on Previously Recognized fair valuation Loss of HPPLC
Inventory Valuation of Equity Accounted Investee - MGTL
Grant Received for Biological Assets-Timber
Revaluation Adjustment
Adjustments for Effective Holdings of HPPLC
Gain on Money Market Investments
Adjustment made to Effective Holding of Associates-Dividend Tax
Cumulative impact to the Equity carried forward from previous year
94
Net Assets as at
Net Assets as at
Nature of Adjustment
(492,573,644)
441,030,547
(14,674,212)
82,079,075
6,372,289
70,851,792
27,188,100
1,162,161
(2,184,636)
8,269,712
(2,029,858)
220,223,887
345,715,213
(617,584,653)
546,732,862
(825,544,736)
1,161,775,348
(3,629,619)
(1,506,333)
10,890,753
(34,758,735)
(16,151,000)
220,223,887
st
st
31 March 2012 01 April 2011
Rs.
Rs.
1,339,712
1,339,712
-
FLC HOLDINGS PLC
Details of Leasehold Land & Buildings and Additions to Buildings
Maturata Plantations Ltd (Sub Subsidiary)
LANDS
ESTATE
TOTAL
LOCATION
CROP
EXTENT
(HECT)
LEASEHOLD LANDS - W.D. V
31.03.2013
31.03.2012
BUILDINGS
NO. OF
UNITS
ADDITIONS TO BUILDINGS- W.D. V
LEASEHOLD BUILDINGS- W.D. V
After 22.06.1992
31.03.2013
31.03.2012
31.03.2013
31.03.2012
HIGH GROWN
Alma
631.25
Kandapola
Tea
18,982,595
19,571,203
115
517,879
640,364
3,919,636
4,058,119
Bramley
224.49
Kandapola
Tea
6,538,177
6,740,911
86
608,866
752,872
1,239,441
1,280,087
Gonapitiya
716.00
Kandapola
Tea
22,285,158
22,976,171
98
1,329,898
1,644,437
4,585,853
4,747,299
High Forest
628.00
Kandapola
Tea
18,664,177
19,242,911
225
1,100,729
1,361,067
16,447,212
16,978,876
Kabaragalla
473.00
Padiyapalalla
Tea
10,307,753
10,627,373
119
174,859
216,215
6,579,584
6,435,510
Liddesdale
639.00
Halgaranoya
Tea
19,211,203
19,806,899
198
820,872
1,015,039
8,101,483
8,368,913
Mahacoodagalla
252.00
Halgaranoya
Tea
7,388,924
7,618,038
89
487,853
603,206
6,312,605
6,481,000
Maha Uva
397.25
Walapane
Tea
11,728,386
12,092,057
146
425,111
525,656
3,834,973
3,966,244
Maturata
544.74
Kandapola
Tea
16,329,114
16,835,443
152
441,130
545,464
2,702,263
2,271,479
Ragalla
640.75
Halgaranoya
Tea
19,174,462
19,769,019
110
885,730
1,095,218
8,971,412
9,262,646
St Leonards
355.65
Halgaranoya
Tea
10,507,785
10,833,608
152
380,773
470,831
3,458,943
3,568,491
161,117,734 166,113,633
1490
7,173,700
8,870,369
66,153,406
67,418,664
SUB TOTAL
5,502.13
LOW GROWN
Andapana
348.95
Anningkanda
620.00
Deniyaya
Beverely
388.00
Diddenipotha
7,164,399
7,386,551
14
137,858
170,464
615,487
638,216
Tea
8,487,057
8,750,222
168
838,150
1,036,384
6,791,021
7,016,068
Deniyaya
Tea
15,961,709
16,456,646
171
1,447,235
1,789,526
2,235,341
2,321,112
677.31
Mulatriyana
Tea/Rubber/
Coconut
13,202,089
13,611,456
128
827,690
1,023,450
2,306,201
2,426,804
2,207.53
Deniyaya
Tea/ Rubber
44,517,247
45,897,627
330
2,703,127
3,342,464
6,553,293
6,766,596
Hayes
895.75
Deniyaya
Tea
33,699,209
34,744,146
233
295,022
364,799
8,976,207
9,204,715
Lankaberiya
400.40
Ithakanda
Tea
7,552,215
6,144,937
22
270,566
334,559
1,920,899
1,991,338
Wilpita
510.50
Akurassa
Tea/Rubber/
Coconut
5,960,127
7,786,391
27
215,891
266,952
1,124,887
1,168,282
6,735,539
8,328,598
30,523,338
31,533,131
307,554
384,937
96,984,298
99,336,732
Enselwatta
SUB TOTAL
6,048.44
Kamburupitiya Tea/ Rubber/
Coconut
136,544,052 140,777,976
1
Regional Office
TOTAL
1093
11,550.57
297,661,786 306,891,609
2584
13,909,239
17,198,967
95
FLC HOLDINGS PLC
Details of Leasehold Land & Buildings and Additions to Buildings CONTD.
Pussellawa Plantations Ltd (Sub Subsidiary)
BUILDINGS
LANDS
ESTATE
TOTAL
HIGH GROWN
LOCATION
CROP
EXTENT
(HECT)
31.03.2013
31.03.2012
NO. OF
UNITS
After 22.06.1992
31.03.2013
31.03.2012
31.03.2013
31.03.2012
Mooloya
588.00
Hewaheta
Tea
8,959,529
9,237,701
243
65,344
80,871
19,998,056
19,041,320
Hellbodde
498.25
Katukitula
Tea
12,817,266
13,215,216
250
713,071
882,513
33,541,279
32,434,802
21,776,795
22,452,917
493
778,415
963,384
53,539,336
51,476,122
SUB TOTAL
1,086.25
MID GROWN
Beaumont
145.85
Pupuressa
Tea
5,216,190
5,378,144
113
229,268
276,957
7,428,324
6,880,094
Delta
655.10
Pupuressa
Tea
10,664,632
10,995,746
139
156,136
193,235
41,272,430
40,482,037
Kaloogalla
203.70
Pussellawa
Tea
3,710,993
3,826,211
74
189,288
234,267
7,392,625
6,757,901
Melfort
253.23
Pussellawa
Tea
4,589,967
4,732,475
85
74,874
92,659
15,044,969
15,314,180
Rothschild
516.25
Pussellawa
Tea
4,746,758
4,894,135
57
7,103
8,791
27,724,367
26,183,705
Sogama
470.61
Pussellawa
Tea
7,740,891
7,981,229
72
43,784
54,102
13,914,906
14,125,495
Stellenberg
367.16
Pupuressa
Tea
6,335,828
6,532,542
185
338,329
418,723
12,389,510
11,948,687
Sanquhar
259.86
Paradeka
Tea/Rubber
4,234,795
4,366,292
124
41,046
50,779
20,488,698
20,046,009
Geragama
517.83
Pilimatalawa
Tea/Rubber
9,112,732
9,395,663
314
248,877
308,016
28,948,686
28,189,608
56,352,787
58,102,438
1,163
SUB TOTAL
3,389.59
1,328,705
1,637,530 174,604,513 169,927,717
LOW GROWN
Hemingford
307.98
Parakaduwa
Tea/Rubber
6,115,636
6,305,514
146
134,417
166,358
23,746,406
23,882,258
Keragala
501.84
Kuruwita
Tea/Rubber
8,467,128
8,730,015
125
-
-
15,614,409
15,348,842
Pambegama
900.75
Parakaduwa
Tea/Rubber
11,757,809
12,128,372
196
199,966
253,583
53,391,071
54,011,573
Siriniwasa
422.61
Waga
Tea/Rubber
7,339,619
7,567,499
121
382,440
473,317
12,073,867
11,929,198
Ayr
460.50
Padukka
Rubber
7,742,273
7,981,228
102
295,339
365,522
26,391,578
26,394,139
Durampitiya
336.00
Getahetta
Rubber
5,857,144
6,038,995
56
-
-
8,512,700
8,763,454
Eheliyagoda
517.25
Eheliyagoda
Rubber
7,843,708
8,087,239
120
-
-
13,759,385
13,788,826
Elston
810.89
Puwakpitiya
Rubber
11,849,515
12,217,417
180
550,548
684,633
26,913,996
26,375,895
Halpe
744.52
Tummodara
Rubber
11,311,691
11,662,894
137
968,331
1,181,572
33,774,750
32,718,109
Penrith
652.00
Avissawella
Rubber
9,766,021
10,069,235
334
424,882
495,754
24,637,689
23,172,979
Pussella
563.03
Parakaduwa
Rubber
8,978,293
9,247,823
147
-
-
15,747,428
15,349,523
Salawa
614.66
Hanwella
Rubber/
Coconut
9,988,830
117
363,243
449,552
11,800,805
10,441,894
5,470,108
5,639,944
110
-
-
7,282,576
6,995,106
112,487,775
115,978,376
-
-
Sunderland
322.51
Eheliyagoda
Rubber
SUB TOTAL
7,154.54
-
-
H/O - Tea Villa
-
Hanwella
Tea
11,630.38
-
-
TOTAL
96
10,302,200
190,617,357 196,533,730
1,891
14
3,561
3,319,166
5,426,285
4,070,291 273,646,660 269,171,796
-
17,898,642
18,204,775
6,671,206 519,689,151 508,780,410
FLC HOLDINGS PLC
Details of Leasehold Land & Buildings and Additions to Buildings CONTD.
F L C Hydro Power PLC (Sub Subsidiary)
BUILDINGS
LANDS
ESTATE
TOTAL
LOCATION
CROP
EXTENT
(HECT)
31.03.2013
NO. OF
UNITS
31.03.2012
After 22.06.1992
31.03.2013
31.03.2012
31.03.2013
31.03.2012
Hydro Power
Plant
Hydro Power
Plant
12.47
TOTAL
12.47
GRAND TOTAL
23,193.42
Pupuressa/
Paradeka
Hydro
Power
5,193,180
5,375,388
3
-
-
112,346,145 118,946,394
5,193,180
5,375,388
3
-
-
112,346,145 118,946,394
493,472,323 508,800,727
6,148
19,335,524
23,870,143
720,256,900 718,300,842
97
FLC HOLDINGS PLC
Statement of Value Addition
Company
Group
2012/2013
Rs.'000
2011/2012
Rs.'000
Value Added
Revenue
6,243,257
Other Income
445,726
Gain on Change in Fair Value of Biological Assets
307,501
Cost of goods and services provided
(1,759,156)
5,719,356
275,416
136,973
(1,850,474)
5,237,328
4,281,271
3,687,286
3,089,735
3,424,796
2,811,649
420,628
176,923
395,408
217,739
Value allocated to providers of funds
Interest on Loans
Interest on Finance Lease
203,078
155,312
47,766
173,252
124,719
48,532
Value allocated to Government as taxes
Income Tax
161,920
161,920
Distribution of Value Added
Value allocated to employees
Wages and Salaries
Defined Contribution Plan Cost EPF, ETF, CPPS & ESPS
Defined Benefit Plan Cost - Retiring Gratuity
Value allocated to expansion and growth
Retained Income
Minority Interest
Depreciation and Amortization
Group 2012/2013
98
%
2012/2013
Rs.'000
2011/2012
Rs.'000
%
93,500
208,412
(16,223)
67,650
131,016
(10,840)
22%
285,688
187,825
52%
8%
-
-
0%
-
-
17%
14,289
14,289
6,071
6,071
-
135%
105,689
105,689
53%
49,638
49,638
28,169
28,169
76%
1,185,044
558,189
431,334
195,521
577,534
49,512
312,237
215,785
105%
221,761
221,761
-
153,584
153,584
-
44%
5,237,328
4,281,271
22%
285,688
187,825
52%
Group 2011/2012
70% To employees
80% To employees
04% To providers of funds
04% To providers of funds
03% To Government as taxes
23% To expansion and growth
02% To Government as taxes
13% To expansion and growth
FLC HOLDINGS PLC
Historical Financial Information YEAR ENDED 31
Results
Group Revenue
Profit from operations
Finance Costs
Share of results of equity accounted investees
Tax Expense
Profit after Tax
Attributable to:
Profit attributable to FLCH
Non-Controlling Interest
Funds Employed
Stated Capital
Capital Reserves
Revenue Reserves
Shareholders' Funds
Non-Controlling Interest
Total Equity
Total Debt (short & long term)
Assets Employed
Non-current Assets
Current Assets
Current liabilities(net of Borrowings)
Provisions
Deferred Income
Capital Employed
Cash Flow
Net cash inflow/(outflow) From Operating Activities
Net cash inflow/(outflow) From Investing Activities
Net cash inflow/(outflow) From Financing Activities
Increase/(Decrease) in Cash & Cash Equivalents
during the year
Key Indicators
Earnings per Share (Rs.)**
Net Assets per Share (Rs.)***
Return on Average Shareholders' Funds (%)
Return on Average Capital Employed (%)
Interest Cover (times covered)
Current Ratio (times)
Turnover to Capital Employed (times)
Property, Plant and Equipment to Shareholders' Funds (%)
Debt to Equity Ratio (%)
Equity to Total Assets Ratio (%)
ST
MARCH
2012/13*
Rs.'000
2011/12*
Rs.'000
2010/11
Rs.'000
2009/10
Rs.'000
(Restated)
2008/09
Rs.'000
6,243,257
1,345,685
(203,078)
8,835
1,151,443
(161,920)
989,523
5,719,356
643,349
(173,252)
(2,659)
467,438
(105,689)
361,749
6,494,783
1,534,982
(192,092)
9,551
1,352,441
(109,471)
1,242,970
4,885,741
464,509
(170,448)
34,319
328,380
(37,782)
290,598
2,224,419
2,224,419
558,189
431,334
(35,394)
49,512
312,237
67,453
477,475
765,495
-
73,729
216,869
-
2,224,419
-
2,568,000
120,733
3,743,605
6,432,338
7,070,242
13,502,580
1,547,961
15,050,540
2,568,000
122,346
3,493,416
6,183,762
6,748,454
12,932,215
1,651,568
14,583,784
2,568,000
169,158
3,681,036
6,418,195
5,902,181
12,320,376
1,487,688
13,808,064
1,068,000
221,993
2,468,530
3,758,523
5,634,738
9,393,261
1,616,998
11,010,259
900,000
2,224,419
3,124,419
4,987,576
8,111,995
1,543,046
9,655,041
16,239,771
2,866,173
(1,207,489)
(2,326,066)
(521,848)
15,050,540
15,129,870
3,096,448
(854,415)
(2,250,578)
(537,541)
14,583,784
13,347,246
3,537,597
(993,286)
(1,505,739)
(577,754)
13,808,064
12,595,087
914,206
(746,537)
(1,204,965)
(547,532)
11,010,259
10,861,366
619,354
(631,440)
(740,828)
(453,411)
9,655,041
935,326
(604,950)
(578,376)
(248,000)
213,509
(1,026,988)
(40,951)
(854,430)
1,145,094
(852,479)
1,653,631
1,946,246
532,505
(615,844)
115,418
32,079
48
(1,014,650)
900,000
(114,602)
0.41
4.70
8.80
9.14
6.67
1.56
0.41
37.50
11.46
70.67
0.03
4.52
0.74
4.51
3.70
2.24
0.39
32.68
12.77
70.95
0.44
4.69
9.29
12.45
8.04
2.44
0.47
28.61
12.08
72.97
0.08
3.52
2.06
4.83
2.93
0.83
0.44
51.20
17.21
69.53
2.47
3.47
71.19
23.04
0.56
56.49
19.02
70.66
The figures are derived from financial statements prepared in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) for the years ended 31st
March 2012/13 and 2011/12. Figures for the remaining periods are derived from financial statements prepared in accordance with previous version of Sri
Lanka Accounting Standards (SLAS).
** Earnings per share has been computed on weighted average number of shares outstanding during the year.
*** Net Assets per share has been computed on total number of shares in issue as at 31st March.
Ɨ
Previous period Financial Information have been reclassified wherever necessary to conform to the current year’s presentation.
*
99
FLC HOLDINGS PLC
Shareholder Analysis
Analysis of Shareholders according to the number of shares held
1-1,000
1,001-10,000
10,001-100,000
100,001-1,000,000
Over 1,000,000
Total
st
Shares Held
No. of
Shareholders
No. of Shares
1,837
As at 31 March 2012
%
No. of
Shareholders
No. of Shares
%
962,978
0.07
1,633
999,874
0.07
14,948
61,376,719
4.49
16,857
69,701,003
5.10
3,517
80,420,491
5.88
4,127
95,768,836
7.00
401
113,875,094
8.32
396
113,501,840
8.30
92
1,111,364,718
81.24
94
1,088,028,447
79.53
20,795
1,368,000,000
100.00
23,107
1,368,000,000
100.00
Analysis of Shareholders according to the category
Shares Held
No. of
Shareholders
No. of Shares
%
No. of
Shareholders
No. of Shares
%
Individuals
Institutions
20,394
401
341,548,907
1,026,451,093
24.97
75.03
22,688
419
337,276,730
1,030,723,270
24.65
75.35
Total
20,795
1,368,000,000
100.00
23,107
1,368,000,000
100.00
Shares Held
No. of
Shareholders
No. of Shares
%
No. of
Shareholders
No. of Shares
%
Resident
Non Resident
20,717
78
1,339,848,037
28,151,963
97.94
2.06
23,023
84
1,343,295,408
24,704,592
98.19
1.81
Total
20,795
1,368,000,000
100.00
23,107
1,368,000,000
100.00
Directors' Shareholdings
Name of Director
Mr. P R Saldin
Mr. D C Wimalasena
Mr. J M S de Mel
100
Nos.
Nos.
12,800
11,400
11,000
12,800
11,400
11,000
FLC HOLDINGS PLC
Shareholder Analysis CONTD.
20 Major Shareholders as at 31st March
Name of Shareholder
No. of Shares
F L C Joint Venture Co (Pvt) Ltd
% Held
No. of Shares **
% Held
747,600,000
54.65
747,600,000
54.65
43,978,217
3.21
43,978,217
3.21
43,953,090
3.21
43,953,090
3.21
Ms. M D Bollagala
20,543,327
1.50
12,472,200
0.91
Carlines Holdings (Pvt) Ltd
13,100,032
0.96
-
-
Bartleet Finance PLC
10,638,297
0.78
10,638,297
0.78
Mr. A L Devasurendra
8,249,097
0.60
8,249,097
0.60
Commercial Bank of Ceylon PLC/Capital Trust Holdings (Pvt) Ltd
7,893,299
0.58
-
0.51
Mr. S V Somasunderam
7,000,000
0.51
7,000,000
Mr. C G Van Twest
6,682,000
0.49
-
-
Mr. H D A D Perera
6,000,000
0.44
-
-
Ms. G D S N Perera
5,815,000
0.43
-
-
Lexinton Holdings (Pvt) Ltd
5,767,000
0.42
5,767,000
0.42
Thurston Investments Ltd
5,325,000
0.39
5,325,000
0.39
Hi-Line Trading (Pvt) Ltd
5,320,000
0.39
5,320,000
0.39
Amaya Leisure PLC
5,320,000
0.39
5,320,000
0.39
DFCC Vardhana Bank Ltd/A. Sithampalam
5,004,500
0.37
5,004,500
0.37
Vallibel Finance PLC
4,980,000
0.36
4,980,000
0.36
Seylan Bank PLC-Jayantha Dewage
4,582,800
0.34
4,282,800
0.31
Timex Garments (Pvt) Ltd
4,514,900
0.33
4,514,900
0.33
962,266,559
70.34
914,405,101
66.84
Total
** Comparative Shareholdings as at 31st March 2012 of twenty largest shareholders as at 31st March 2013.
Details of Shares held by Public
Category
Shares held by Public
No. of Shares
% Held
No. of Shares
% Held
619,955,800
45.32%
619,955,800
45.32%
Market Performance of Ordinary Shares of the Company
Share Price during the year
Closing
Highest
Lowest
2012/13
Rs./Share
2011/12
Rs./Share
2.50
3.40
1.30
2.00
6.00
1.80
101
FLC HOLDINGS PLC
Subsidiaries, Joint Ventures & Associates
Directors as at 31st March 2013
Name of Company
102
Reg. No. PV 4027
Subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Mr. G D Seaton
Mr. C J Chaytor
Mr. A J Chaytor
Mr. H. Ramasamy
Reg. No. PV 18888
Subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
(Formerly Free Lanka Power Holdings (Pvt) Ltd)
Reg. No. PV 70021
Subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Mr. U K Devasurendra
(Formerly Free Lanka Power 2 (Pvt) Ltd)
Reg. No. PV 70023
Subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Reg. No. PV 70025
Subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
(Formerly Free Lanka Capital Properties (Pvt) Ltd)
Reg. No. PV 75864
Subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. J M S de Mel
Mr. N M Prakash
Mr. P R Saldin
Mr. G J Aloysius
The Tea Leaf Resort Holding (Pvt) Ltd
Reg. No. PV 72507
Joint Venture
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Mr. N M Prakash
Mr. W A P Perera
Mr. D S Panditha
Reg. No. PB 951
Sub subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Mr. G D Seaton
Mr. M P D U K Mapa Pathirana
Reg. No. PB 214
Sub subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. J M S de Mel
F L C Hydro Power PLC
(Formerly Hydro Power Free Lanka PLC)
Reg. No. PV 7385 PB/PQ
Sub subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Mr. N M Prakash
Dr. T Senthilverl
Reg. No. PV 68774
Sub subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
(Formerly Hydro Power Free Lanka 2 (Pvt) Ltd)
Reg. No. PV 70022
Sub subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
(Formerly Hydro Power Free Lanka 3 (Pvt) Ltd)
Reg. No. PV 70024
Sub subsidiary
Mr. K Aloysius
Mr. G A Aloysius
Mr. G J Aloysius
Mr. J M S de Mel
Ceylon Estates Teas (Pvt) Ltd
Reg. No. PV 5528
Sub subsidiary
Mr. K Aloysius
Mr. G J Aloysius
Mr. G A Aloysius
Mr. A Wickramasuriya
Reg. No. PV 8588
Associate
Mr. K Aloysius
Mr. G A Aloysius
Mr. H D A D Perera
Mrs. R V Perera
Mr. L T D Peiris
Mr. J M S de Mel
FLC HOLDINGS PLC
Glossary for Financial and Non Financial Terms
FINANCIAL TERMS
Accrual Basis : Recognizing the effects of transactions and other events
when they occur without waiting for receipt or payment of cash or cash
equivalent.
Cash Equivalents : Cash Equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of change in value.
Foreign Currency Transactions : The realized gain recorded when
assets or liabilities denominated in foreign currencies are translated into
Sri Lankan Rupees on the financial position date at prevailing rates
which differ from those rates in force at inception or on the previous
financial position date.
Impairment : This occurs when recoverable amount of an asset is less
than its carrying amount.
Group : A group is a parent and all its subsidiaries.
Parent : A parent is an entity that has one or more subsidiaries.
Subsidiary : A subsidiary is an entity, including an unincorporated
entity such as a partnership, that is controlled by another entity (known as
the parent).
Joint Control : Joint control is the contractually agreed sharing of the
control over an economic activity, and exists only when the strategic
financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control.
Joint Venture : A joint venture is a contractual arrangement whereby
two or more parties undertake an economic activity that is subject to joint
control.
Associate : An associate is an entity, including an unincorporated entity
such as a partnership, over which the investor has significant influence
and that is neither a subsidiary nor an interest in a joint venture.
Cost Method : Cost method is a method of accounting for investment
whereby the investment is recognized at cost. The investor recognizes
income from the investment only to the extent that the investor receives
distributions from accumulated profits of the investee arising after the
date of acquisition. Distributions received in excess of such profits are
regarded as a recovery of investment and are recognized as a reduction of
the cost of the investment.
Equity Method : The equity method is a method of accounting whereby
the investment is initially recognized at cost and adjusted thereafter for
the post-acquisition changes in the investor’s share of net assets of the
investee. The profit or loss of the investor includes the investor’s share of
the profit or loss of the investee.
Significant Accounting Policies : The specific principles, bases,
conventions, rules, and practices adopted by an enterprise in preparing
and presenting Financial Statements.
Net Assets : Total assets minus current liabilities minus long term
liabilities minus non controlling interest.
Net Asset Value Per Share : Shareholders’ funds divided by the number
of ordinary shares in issue.
Capital Employed : Shareholders’ funds plus non controlling interest
and debt.
Shareholders’ Funds : Total of issued and fully paid share capital,
capital reserves and revenue reserves.
Total Debt : Long term loans plus short term loans and overdrafts.
EBITDA : Abbreviation for Earnings before Interest, Tax, Depreciation
and Amortization.
Return On Average Equity (ROE) : Net income, less preferred share
dividends if any, expressed as a percentage of average ordinary
shareholders’ equity.
Return On Average Assets (ROA) : Net income expressed as a
percentage of average total assets, used along with ROE, as a measure of
profitability and as a basis of intra-industry performance comparison.
Earnings Per Share (EPS) : Profits attributable to ordinary
shareholders divided by the weighted average number of ordinary shares
in issue during the period.
Total Equity : Shareholders’ funds plus minority interest.
Capital Reserves : Reserves identified for specific purposes and
considered not available for distribution.
Revenue Reserve : Reserves considered as being available for
distribution and investments.
Working Capital : capital required financing day to day operations
computed as the excess of current assets over current liabilities.
Interest Cover : Profit before tax plus net finance cost divided by net
finance cost. Measure of an entity’s debt service ability.
Deferred Tax : Sum set aside in the financial statements for taxation that
may become payable/receivable in a financial year other than the current
financial year.
Effective Tax Rate : Provision for taxation excluding deferred taxation
divided by the profit before tax.
OCI : Other Comprehensive Income
Intangible Asset : An identifiable non-monetary asset without physical
substance held for use in the production / supply of goods / services or for
rental to others or for administrative purposes.
Amortization : The systematic allocation of the depreciable amount of
an intangible asset over its useful life.
IFRS : International Financial Reporting Standards
SLAS : Sri Lanka Accounting Standards.
Fair Value : Fair value is the amount for which an asset could be
exchanged between a knowledgeable, willing buyer and a
knowledgeable, willing seller in an arm’s length transaction.
SLFRS : Sri Lanka Financial Reporting Standards.
SoRP : Statement of Recommended Practices issued by the Institute of
Chartered Accountants of Sri Lanka.
UITF : Urgent Issues Task Force of the Institute of Chartered
Accountants of Sri Lanka.
General Provisions : General provisions are established for Trading
transactions and others for anticipated losses.
Provision for Bad and Doubtful Debts : Provisions are established to
reduce the book value of specific assets (primarily debtors) to estimated
realizable values.
103
FLC HOLDINGS PLC
Glossary for Financial and Non Financial Terms CONTD
Key Management Personnel : The management personnel are those
persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly.
Related Parties : Parties who could control or significantly influence
the financial and operating policies of the business.
Value Addition : The quantum of wealth generated by the activities of
the Group measured as the difference between turnover and the cost of
materials and services bought in.
NON FINANCIAL TERMS
GSA : The Gross Sales Average. This is the average sales price obtained
(over a period of time, for a kilo of produce) before any deductions such
as Brokerage, etc.
NSA : The Net Sales Average. This is the average sale price obtained
(over a period of time) after deducting Brokerage fees, etc.
COP : The Cost of Productions. This generally refers to the cost of
producing per kilo of produce (Tea /Rubber /Coconut).
Retirement Benefits

Present value of a defined benefit obligation : Present value of a
defined benefit obligation is the present value of expected future
payments required to settle the obligation resulting from employee
service in the current and prior periods.

Current Service Cost : Is the increase in the present value of the
defined benefit obligation resulting from employee service in the
current period.
Extent In Bearing : The extent of land, from which crop is being
harvested.
Crop : The total produce harvested during a financial year
Field : An unit extent of land. Estates are divided into fields in order to
facilitate management.
Immature Plantations : The extent of plantation that is underdevelopment and is not being harvested.

Interest Cost : Is the increase during a period in the present value of a
defined benefit obligation which arises because of the benefits are one
period closer to settlement.
Mature Plantations : The extent of plantation from which crop is being
harvested.

Actuarial gains and losses : Are the effects of difference between the
In Filling : 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 to be harvested.
previous actuarial assumptions and what has actually occurred and the
effects of changes in actuarial assumptions.
Market Capitalization : Number of Shares issues multiplied by the
market value of each share at the year end.
Market Risk : This refers to the possibility of loss arising from changes
in the value of a financial instrument as a result of changes in market
variables such as interest rates, exchange rates, credit spreads and other
asset prices.
Segment Reporting
Segment reporting indicates the contribution to the revenue derived from
business segments such as Tea, Rubber, Hydro Power, Real Estate,
Timber, Investments.
Contingent Liability : A possible obligation that arises from past events
whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the
control of the enterprise.
Gross Profit Ratio : Gross profit divided by net sales.
Net Profit Ratio : Net profit(after tax) divided by net sales.
Current Ratio : Current assets divided by current liabilities.
Quick Ratio : Current assets less inventories, divided by current
liabilities.
Biological Assets : Is a living plant or an animal.
Consumable Biological Assets : The biological assets are those that are
to be harvested as agricultural produce or sold as biological assets.
Bearer Biological Assets : The biological assets other than the
consumable biological assets.
104
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 (YPH) : The average crop per unit extent of land over a given
period of time (usually Kgs. Per hectare per year)
CER : Certified Emission Reduction. Carbon credit units as at the
Financial Position date have been valued at their estimated net realizable
value as inventories and disclosed in the financial statements as Certified
Emission Reduction.
FLC HOLDINGS PLC
Notice of the Annual General Meeting
NOTICE is hereby given that the Fifth Annual General Meeting of
F L C Holdings PLC will be held on 26th September 2013 at 10.30 a.m., at
Park Premier Banquet Hall, Excel World, No. 338, T.B.Jayah Mawatha,
Colombo 10.
5
To re-elect as a Director, Mr. Prawira Rimoe Saldin who retires by
rotation in terms of Article 23 (6) of the Articles of Association of the
Company.
6
To re-elect as a Director, Mr. Geoffrey Joseph Aloysius who retires
by rotation in terms of Article 23 (6) of the Articles of Association of
the Company.
7
To appoint M/s KPMG, Chartered Accountants as Auditors of the
Company in place of the existing Auditors M/s BDO Partners,
Chartered Accountants and authorize the Directors to determine
their remuneration.
8
To authorize the Directors to determine contributions to charities
and other donations for the financial year 2013/14.
THE BUSINESS TO BE BROUGHT BEFORE THE MEETING
WILL BE;
1
To receive and consider the Annual Report of the Board of Directors
on the affairs of the Company and the Financial Statements for the
year ended 31st March 2013 and the Report of the Auditors thereon.
2
To re-appoint as a Director, Mr. Kattar Aloysius who has attained the
age of 83 years. The Company has received notice of intention to
pass the under noted as an Ordinary Resolution in compliance with
Section 211 of the Companies Act No. 07 of 2007.
Ordinary Resolution
By Order of the Board of
F L C HOLDINGS PLC
S S P CORPORATE SERVICES (PRIVATE) LIMITED
“That Mr. Kattar Aloysius who has attained the age of 83 years be
and is hereby re-appointed as a Director of the Company and it is
hereby declared as provided for in Section 211 of the Companies Act
No.07 of 2007 that the age limit of 70 years referred to in section 210
of the said Companies Act shall not apply to Mr. Kattar Aloysius.”
3
To re-appoint as a Director, Mr. Dahamkith Chandramani
Wimalasena who has attained the age of 76 years. The Company has
received notice of intention to pass the under noted as an Ordinary
Resolution in compliance with Section 211 of the Companies Act
No. 07 of 2007.
SECRETARIES
Colombo
26th August 2013
Ordinary Resolution
“That Mr. Dahamkith Chandramani Wimalasena who has attained
the age of 76 years be and is hereby re-appointed as a Director of the
Company and it is hereby declared as provided for in Section 211 of
the Companies Act No 07 of 2007 that the age limit of 70 years
referred to in section 210 of the said Companies Act shall not apply
to Mr. Dahamkith Chandramani Wimalasena.”
4
To re-appoint as a Director, Mr. Jayasiri Manik Sumithra de Mel
who has attained the age of 71 years. The Company has received
notice of intention to pass the under noted as an Ordinary Resolution
in compliance with Section 211 of the Companies Act No. 07 of
2007.
Ordinary Resolution
“That Mr. Jayasiri Manik Sumithra de Mel who has attained the age
of 71 years be and is hereby re-appointed as a Director of the
Company and it is hereby declared as provided for in Section 211 of
the Companies Act no. 07 of 2007 that the age limit of 70 years
referred to in Section 210 of the said Companies Act shall not apply
to Mr. Jayasiri Manik Sumithra de Mel ”.
105
FLC HOLDINGS PLC
106
FLC HOLDINGS PLC
Form of Proxy
I/We,………..………………………………………………………………………………………………………………………….........................…...
of…….………………………......………………………………………………….....……… being a member / members of F L C Holdings PLC hereby
appoint Mr./Mrs./Ms ………………………..……………......………………..…...............................................................…..…......................................
(NIC No…......…….……...........….…) of ……...................………………………...............................................................................
Mr. Kattar Aloysius of Colombo,
Mr. Godfrey Anton Aloysius of Colombo
Mr. Jayasiri Manik Sumithra de Mel of Panadura
Mr. Don Soshan Kamantha Amarasekera of Colombo
Mr. Nadarajah Murali Prakash of Colombo
Mr. Prawira Rimoe Saldin of Ratmalana
Mr. Geoffrey Joseph Aloysius of Colombo
Mr. Dahamkith Chandramani Wimalasena of Kotte
Mr. Asela Indrajith Fernando of Colombo
whom failing,
failing him,
failing him,
failing him,
failing him,
failing him,
failing him,
failing him,
failing him,
th
as my /our proxy to represent me/us and vote on my/our behalf at the Fifth Annual General Meeting of the Company to be held on 26 September 2013 at
Park Premier Banquet Hall, Excel World, No. 338, T. B. Jayah Mawatha, Colombo 10. at 10.30 a.m. and at any adjournment thereof.
FOR
1.
To receive and consider the Annual Report of the Board of Directors on the affairs of the Company
and the Financial Statements for the year ended 31st March 2013 and the Report of the Auditors
thereon.
2.
To Pass the following Ordinary Resolution in terms of Section 210 & 211 “That Mr. Kattar Aloysius, who has attained the age of 83 years be and is hereby re-appointed as a
Director of the Company and it is hereby declared as provided for in Section 211 of the Companies
Act No.07 of 2007 that the age limit of 70 years referred to in section 210 of the said Companies Act
shall not apply to Mr. Kattar Aloysius.”
3.
To Pass the following Ordinary Resolution in terms of Section 210 & 211
“That Mr. Dahamkith Chandramani Wimalasena, who has attained the age of 76 years be and is
hereby re-appointed as a Director of the Company and it is hereby declared as provided for in Section
211 of the Companies Act No 07 of 2007 that the age limit of 70 years referred to in section 210 of the
said Companies Act shall not apply to Mr. Dahamkith Chandramani Wimalasena”.
4.
To Pass the following Ordinary Resolution in terms of Section 210 & 211
“That Mr. Jayasiri Manik Sumithra de Mel, who has attained the age of 71 years be and is hereby reappointed as a Director of the Company and it is hereby declared as provided for in Section 211 of the
Companies Act No 07 of 2007 that the age limit of 70 years referred to in section 210 of the said
Companies Act shall not apply to Mr. Jayasiri Manik Sumithra de Mel.”
5.
To re-elect Mr. Prawira Rimoe Saldin, who retires by rotation in terms of Article 23 (6) of the
Articles of Association of the Company.
6.
To re-elect Mr. Geoffrey Joseph Aloysius, who retires by rotation in terms of Article 23 (6) of the
Articles of Association of the Company.
7.
To appoint M/s KPMG, Chartered Accountants as Auditors of the Company in place of the existing
Auditors M/s BDO Partners, Chartered Accountants and authorize the Directors to determine their
remuneration.
8.
To authorize the Directors to determine contributions to charities and other donations for the
financial year 2013/14.
AGAINST
Signed this..………………….…….. day of ………………………. Two Thousand and Thirteen.
…………..………………………………….…..
NIC Number/P.P.No /Co. Reg. No
…………………………….
(Signatures)
107
FLC HOLDINGS PLC
Form of Proxy
INSTRUCTIONS FOR THE COMPLETION OF THE FORM OF PROXY:
108
1.
Please complete the Form of Proxy after filling in legibly your full name, NIC number and address and by signing in the space provided.
2.
To be valid, this Form of Proxy must be deposited at the Registered Office of the Company, F L C Holdings PLC, Level 3, Prince Alfred Tower, No.
10, Alfred House Gardens, Colombo 03 not less than 48 hours before the time appointed for holding the meeting.
3.
Please indicate clearly how your proxy is to vote on the resolution. If no indication is given, the proxy in his discretion may vote as he/she thinks fit.
4.
If the shareholder is a Company or body corporate, a form of Corporate Representation executed under its Common Seal in accordance with its
Articles of Association or Constitution should be submitted.
5.
Where the Form of Proxy is signed under a Power of Attorney (POA) which has not been registered with the Company, the Original POA together
with a photocopy of same or a copy of certified by a Notary Public must be lodged with the Company along with the Form of Proxy.
6.
Any Shareholder/Proxy attending the Annual General Meeting is kindly requested to bring with him/her the National Identity Card or any other
form of valid identification and produce same at the time of registration.
FLC
HOLDINGS PLC
F L C Holdings PLC
Level 3, Prince Alfred Tower,
No. 10, Alfred House Gardens, Colombo 03, Sri Lanka.
www.freelankacapital.com