ELPL_2009_10

Elpitiya plantations plc annual REpoRt 2009/102

Financial HigHligHts

Year ended 31st March 2010 2009 %

Rs.000’ Rs.000’ increase/

(Decrease)

Turnover 2,215,126 1,556,182 42

Gross Profit 241,211 89,528 169

Profit / (Loss) before Tax 63,817 (61,705) 203

Income Tax (Expense) / Income - - -

Profit/(Loss) after Tax 63,817 (61,705) 203

Non-Current Assets 2,910,616 2,699,843 8

Current Assets 774,102 271,273 185

Current Liabilities 888,019 1,201,788 (26)

Shareholders’ Fund 1,017,997 609,944 67

Capital Expenditure 268,524 277,835 (3)

Earnings per Share (Rs.) 2.46 (2.47) 200

Dividend per Share (Rs.) 0.50 - 100

Net assets per Share (Rs.) 27.94 24.44 14

Stated Capital 694,236 350,000 98

Net Assets 1,017,997 609,944 67

Return on Equity (%) 6.27 (10.12) 162

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2006 2007 2008 2009 2010

Tea Rubber Oil palm & Other Crops

-

100

200

300

400

500

600

700

800

900

1,000

1,100

2006 2007 2008 2009 2010

Shareholders' Funds(Rs. Million)

(80)(60)(40)(20)-20406080

100120140160180

2006 2007 2008 2009 2010

Net Profit After Tax ( Rs.Million )

Turnover( Rs.Million )

21Elpitiya plantations plc annual REpoRt 2009/10

auDitoRs’ RePoRt

inDePenDent auDitoRs’ RePoRt

to tHe sHaReHolDeRs oF elPitiYa Plantations Plc

Report on the Financial statements

We have audited the accompanying Financial Statements of

Elpitiya Plantations PLC which comprise the Balance Sheet as at

March 31, 2010 and the Income Statement, Statement of

Changes in Equity and Cash Flow Statement for the year then

ended, and a summary of significant Accounting Policies and

other explanatory notes.

Management’s Responsibility for the Financial

statements

Management is responsible for the preparation and fair

presentation of these Financial Statements in accordance with

Sri Lanka Accounting Standards. This responsibility includes:

designing, implementing and maintaining internal control

relevant to the preparation and fair presentation of Financial

Statements that are free from material misstatement, whether

due to fraud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that are

reasonable in the circumstances.

scope of audit and Basis of opinion

Our responsibility is to express an opinion on these Financial

Statements based on our audit. We conducted our audit in

accordance with Sri Lanka Auditing Standards. Those standards

require that we plan and perform the audit to obtain reasonable

assurance whether the Financial Statements are free from

material misstatements.

An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the Financial Statements. An

audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating

the overall Financial Statement presentation.

We have obtained all the information and explanations which to

the best of our knowledge and belief were necessary for the

purpose of our audit. We therefore believe that our audit provides

a reasonable basis for our opinion.

opinion

In our opinion, so far as appears from our examination, the

Company maintained proper accounting records for the year

ended March 31, 2010, and the Financial Statements give a true

and fair view of the Company’s state of affairs as at March 31,

2010 and its profit and cash flows for the year then ended in

accordance with Sri Lanka Accounting Standards.

Report on other legal and Regulatory Requirements

In our opinion, these Financial Statements also comply with the

requirements of Section 151(2) of the Companies Act No. 07 of

2007.

Colombo

20 May 2010

Chartered Accountants201 De Saram PlaceP. O. Box 101Colombo 10Sri Lanka.Tel : (0) 11 2463500Fax Gen : (0) 11 2697369Tax : (0) 11 [email protected]

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


note 2010 2009 Rs. Rs.assets non current assets Leasehold Property 3 185,452,948 190,719,372 Immovable estate assets on finance lease (other than leasehold property) 4 218,180,073 233,727,627 Tangible assets other than immature/mature plantations 5 458,614,117 411,592,471 Immature/mature plantations 6 1,971,092,682 1,816,991,871 Long Term Investment - (Unquoted) 7 77,276,420 46,811,767 2,910,616,240 2,699,843,108 current assets Inventories 8 190,036,643 100,089,943 Trade and other receivables 9 140,072,753 82,265,407 Amounts due from related companies 10 54,932,532 55,805,025 ESC Recoverable 18,040,934 12,505,326 Cash and Bank balances 371,019,291 20,607,486 774,102,153 271,273,187 total assets 3,684,718,393 2,971,116,295 eQuitY anD liaBilities capital and Reserves Stated Capital 11 694,236,120 350,000,010 Accumulated Profits 323,760,772 259,943,978 Total Equity 1,017,996,892 609,943,988 non current liabilities & Deferred income Interest Bearing Loans & Borrowings 12 953,671,551 490,788,596 Retirement Benefit Obligations 13 448,410,122 326,727,983 Deferred Income 14 186,516,926 149,175,914 Net liability to the Lessor payable after one year 15 190,104,072 192,691,664 1,778,702,671 1,159,384,157 current liabilities Interest Bearing Loans & Borrowings (Including Overdraft) 12 312,805,411 457,173,021 Net liability to the Lessor payable within one year 15 2,587,592 2,488,069 Trade and other payables 16 246,761,117 323,789,479 Amounts due to related companies 17 325,864,710 418,337,581 888,018,830 1,201,788,150 Total Equity and Liabilities 3,684,718,393 2,971,116,295 These Financial Statements are in compliance with the requirements of the Companies Act No. 07 of 2007.

Chief Financial Officer The board of directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the board by. DIRECTOR MANAGING AGENT

1 1

2 2 The accounting policies and notes on pages 26 through 50 form an integral part of the Financial Statements. Colombo, 20 May 2010

Balance sHeetAs at 31st March 2010


note 2010 2009

Rs. Rs.

REVENUE 18 2,215,126,092 1,556,182,199

COST OF SALES (1,973,914,603) (1,466,653,724)

GROSS PROFIT 241,211,489 89,528,475

OTHER INCOME AND GAINS 19 81,097,740 53,794,876

ADMINISTRATION EXPENSES (143,037,064) (91,039,695)

MANAGEMENT FEE & WORKERS PROFIT SHARE (10,202,236) (13,380,935)

FINANCE COST 20 (144,075,445) (114,547,946)

SHARE OF PROFIT/ (LOSS) OF JOINT VENTURES 38,822,310 13,940,610

PROFIT/(LOSS) BEFORE TAXATION 21 63,816,794 (61,704,615)

INCOME TAX (EXPENSE) / INCOME 22 - -

NET PROFIT/(LOSS)FOR THE YEAR 63,816,794 (61,704,615)

BASIC EARNINGS / (LOSS) PER SHARE 23 2.46 (2.47)

The accounting policies and notes on pages 26 through 50 form an integral part of the Financial Statements.

incoMe stateMentYear Ended 31st March 2010


Year Ended 31st March 2010

stated capital accumulated total

Profit/(Loss)

Rs Rs Rs

Balance as at 31 March 2008 350,000,010 321,648,593 671,648,603

Net Profit/(Loss) for the year - (61,704,615) (61,704,615)

Balance as at 31 March 2009 350,000,010 259,943,978 609,943,988

Rights Shares Issued 344,236,110 - 344,236,110 (11,474,537 @ 30/- per share)

Net Profit/(Loss) for the year - 63,816,794 63,816,794

Balance as at 31 March 2010 694,236,120 323,760,772 1,017,996,892

The accounting policies and notes on pages 26 through 50 form an integral part of the Financial Statements.

stateMent oF cHanges in eQuitY


note 2010 2009 Rs. Rs. casH Flows FRoM oPeRating activities NetProfit/(Loss)beforeTaxation 63,816,794 (61,704,615) aDJustMents FoR Depreciation/Amortization 21 88,215,186 77,794,266 Provision for Defined Benefit Plans 13 172,695,485 48,879,446 Amortization of Grants 14.1 (7,539,513) (5,539,082)Share of Profit/ (Loss) of Joint Ventures (38,822,310) (13,940,610)Finance Cost 20 144,075,445 110,163,939 Deferred Income from Sublease 14.2 (11,005,541) (11,005,943)Profit/(Loss) on disposal of Scraps Items 19 - (1,582,609)Provision for Doubtful Debtors 7,576,810 - OperatingProfitbeforeWorkingCapitalChanges 419,012,356 143,064,792

(Increase)/Decrease in Trade and other Receivables (56,460,037) (2,615,593)(Increase)/Decrease in Amounts due from Related Companies (4,933,110) 5,958,631 (Increase)/Decrease in Inventories (89,946,700) 143,552,471 Increase/(Decrease) in Trade and Other Payables (77,770,634) 36,451,911 Increase/(Decrease) in Amounts due to Related Companies (92,472,871) 36,806,886 cash generated from operations 97,429,004 363,219,098 Cash Received as Sublease of Land 13,330,819 8,829,397 Finance Cost Paid (119,830,419) (103,078,630)Defined Benefit Plan Cost Paid 13 (51,013,346) (27,599,993)Grants Received 14.1 42,046,975 18,585,305 Economics Service Charges Paid (3,817,432) (3,490,555)net cash from operating activities (21,854,399) 256,464,622 casH Flows FRoM investing activities Profit/(Loss) on disposal of Scraps 19 - 1,582,609 Field Development Expenditure 6 (185,232,716) (139,739,261)Purchase of Property, Plant & Equipment (83,290,950) (138,095,380)Dividend Received 8,357,661 - Right Issue on Ordinary Shares 344,236,110 - net cash used in investing activities 84,070,105 (276,252,032) casH Flows FRoM Financing activities Payment of Government Lease Rentals (27,383,428) (17,787,618)Proceeds from Loans 860,150,198 202,991,793 Settlement of Loan (399,877,135) (176,852,190)Other Lease Rental Paid (10,442,841) (7,085,308)net cash (used in) / from Financing activities 422,446,794 1,266,677 net increase/(Decrease) in cash & cash equivalents 484,662,500 (18,520,733) a. cash & cash equivalents at the beginning of the year (152,036,150) (133,515,417)B. cash & cash equivalents at the end of the year 332,626,350 (152,036,150) note a Cash & Cash Equivalents at the beginning of the year Cash & Bank Balances 20,607,486 18,532,615 Bank Overdrafts (Note 12) (172,643,636) (152,048,032) (152,036,150) (133,515,417)note B Cash & Cash Equivalents at the end of the year Cash & Bank Balances 371,019,291 20,607,486 Bank Overdrafts (Note 12) (38,392,941) (172,643,636) 332,626,350 (152,036,150) The accounting policies and notes on pages 26 through 50 form an integral part of the Financial Statements.

casH Flow stateMentYear Ended 31st March 2010


1. coRPoRate inFoRMation

Domicile and legal Form

Elpitiya plantations PLC is a limited liability Company incorporated and domiciled in Sri Lanka, under the Companies Act No. 17 of 1982 (The Company re-registered under the Companies Act No. 07 of 2007) in terms of the provisions of the conversion of public Corporations or Government Owned Business undertakings into public Companies Act No. 23 of 1987. The registered office of the Company is located at No. 305, Vauxhall Street, Colombo – 02, and Plantations are situated in the planting districts of Nuwera Eliya and Galle.

1.2 Principal activities and nature of operations

During the year, the principal activities of the Company were cultivation, manufacture and sale of black Tea, Rubber, Oil Palm and other crops.

1.3 Parent enterprise

The Company’s parent undertaking is Aitken Spence Plantation Managements Limited.

1.4 Date of authorisation for issue

The Financial Statements of Elpitiya Plantations PLC for the year ended 31 March 2010 were authorised for issue in accordance with a resolution of the Board of Directors on 20 May 2010.

2.1 Basis oF PRePaRation

These financial statements presented in Sri Lanka Rupees have been prepared on a historical cost basis except for certain Property, Plant and Equipment which are stated at revalued amounts. The Financial Statements are prepared in Sri Lankan rupees and all values are rounded to the nearest rupee.

2.1.1 statement of compliance

The Financial Statements of Elpitiya Plantations PLC have been prepared in accordance with the Sri Lanka Accounting Standards (SLAS) adopted by the Institute of Chartered Accountants of Sri Lanka (ICASL) and also in compliance with the requirements of the Companies Act No 07 of 2007.

2.1.2 going concern

The Directors have made an assessment of the Company’s ability to continue as a going concern and they do not intend either to liquidate or to cease trading.

2.1.3 comparative information

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year unless otherwise stated.

2.2 signiFicant accounting JuDgMents, estiMates anD assuMPtions

Judgments

In the purpose of applying the company’s accounting policies , management has made the following judgments , apart from those involving estimations , which has the most significant effect on the amounts recognized in the financial statements.

notes to tHe Financial stateMentsYear Ended 31st March 2010


inventory valuation – Produce stock

Company has valued part of unsold produce stock at since realized prices. The balance unsold stock remained as at the balance

sheet date valued at an estimated selling prices based on most recent selling prices available subsequent to the year end.

estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date , that have

a significant risk of causing a material adjustments to the carrying amounts of assets and liabilities within the next financial year

are discussed below.

impairment of goodwill

The company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the “value in

use” of the cash generating units to which the goodwill is allocated .Estimating a value in use amount requires management to

make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount rate in

order to calculate present value of those cash flows. However, at present company does not have any recorded Goodwill balance

as at the balance sheet date.

Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available

against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax

assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning

strategies. The carrying value of the unrecognised deferred tax assets at 31 March 2010 was Rs.471,116,273/-(2009.

Rs. 474,951,083/-).

DefinedBenefitPlans

The cost of defined benefit pension plan is determined using actuarial valuations. The actuarial valuation involves making

assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension

increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. The net employee

liability at 31 March 2010 is Rs. 448,410,122/- (2009 Rs. 326,727,983/-). Further details are given in Note 13.

2.3 suMMaRY oF signiFicant accounting Policies

2.3.1 Foreign currency translation

The financial statements are presented in Sri Lankan rupees, which is the Company’s functional and presentation currency.

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange

ruling at the balance sheet date. All differences are taken to profit or loss with the exception of differences on foreign currency

borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal

of the net investment, at which time they are recognised in profit or loss. Tax charges and credits attributable to exchange

differences on those borrowings are also dealt with in equity. Non monetary items that are measured in terms of historical cost in

a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non monetary items measured

at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Any

goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and

liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.



2.3.2 taxation

a) current taxes

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered

from or paid to the Commissioner General of Inland Revenue. The tax rates and tax laws used to compute the amount are those

that are enacted or substantively enacted by the balance sheet date.

The provision for income tax is based on the elements of income and expenditure as reported in the financial statements and

computed in accordance with the provisions of the Inland Revenue Act.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement

b) Deferred taxation

Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the

tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

l except where the deferred income tax liability arises from goodwill amortisation or the initial recognition of an asset or

liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting

profit nor taxable profit or loss; and

l in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint

ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the

temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and

unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary

differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:

l except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition

of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither

the accounting profit nor taxable profit or loss; and

l in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint

ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse

in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no

longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is

realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance

sheet date.

Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.



2.3.3 Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset that takes a substantial period of time to get ready for its intended use or sale is capitalised as part of that asset. The amount of borrowing costs eligible for capitalisation is determined in accordance with SLAS 20-Borrowing Costs – Allowed Alternative Treatment. The capitalisation rate of 22% (2009– 13%) percent was used.

Borrowing costs amounting to Rs. 97,507,174/= (previous year Rs. 83,767,823/=) incurred on borrowings obtained to meet expenses relating to immature plantations have been capitalised as part of the cost of the immature plantations.

2.3.4 intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. Following the initial recognition of the intangible assets, the cost model is applied requiring the assets to be carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs are not capitalised and expenditure is reflected in the income statement in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. Amortisation was commenced when the assets were available for use.

As at the balance sheet date, company does not have any intangible assets with finite lives.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.

Intangible assets that are not yet available for sale are tested for impairments at each financial year end, even if there is no indication that the asset is impaired.

As at the balance sheet date, company does not have any intangible assets with indefinite lives.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

Research and Development costs Research costs are expensed as incurred. An intangible assets arising from development expenditure on an individual project is

recognised only when the company can demonstrate the technical feasibility of completing the intangible assets so that it will be available for use or sale , its intention to complete and its ability to use or sell the assets , how the assets will generate future economic benefits , the availability of recourses to complete the assets and the ability to measure reliably the expenditure during the development.



During the period of development, the assets is tested for impairment annually, Following the initial recognition of the development

expenditure, the cost model is applied requiring the assets to be carried at cost less any accumulated amortisation and accumulated

impairment losses . Amortisation of the assets begins when development is complete and the asset is available for use. It is

amortised over the period of expected future sales. During the period of which the asset is not yet in uses it is tested for impairments

annually.

2.3.5 Deferred expenditure

Expenditure which is deemed to have a benefit or relationship to more than one financial year is classified as deferred expenditure.

Such expenditure is written off over the period to which it relates, on a straight-line basis.

2.3.6 inventories

Inventories other than produce stocks are valued at the lower of cost and estimated net realisable value, after making due

allowances for obsolete and slow moving items. Net realisable value is the price at which Inventories can be sold in the ordinary

course of business after allowing for cost of realisation and / or cost of conversion from their existing state to saleable

condition.

The cost incurred in bringing inventories to its present location and condition are accounted using the following cost formula.

input Material At average cost.

growing crop-nurseries At the cost of direct materials, direct labour and an appropriate proportion of directly

attributable overheads.

Produce stocks Valued at estimated selling prices or since realised prices.

consumables & spares At actual cost.

2.3.7 trade and other Receivables

Trade receivables are stated at the amounts they are estimated to realise net of provisions for bad and doubtful receivables.

Other receivables and dues from related parties are recognised at cost less provision for bad and doubtful receivables.

2.3.8 cash and cash equivalents

Cash and Cash Equivalents are defined as cash in hand, demand deposits and short term highly liquid investments readily

convertible to known amounts of cash and subject to insignificant risk of changes in value.

For the purpose of Cash Flow Statement Cash and Cash Equivalents consist of cash in hand and deposits in banks net of

outstanding bank overdrafts. Investments with short term maturities i.e. three months or less from the date of acquisitions are also

treated as Cash Equivalents.

Interest paid is classified as operating Cash Flows.

The Cash Flow Statement is reported based on indirect method.



2.3.9 Property, Plant and equipment

a) cost

Property, Plant & Equipment is recorded at cost less accumulated depreciation and less any impairment in value.

b) cost and valuation

All items of Property, Plant & Equipment are initially recorded at cost. Where items of Property, Plant and Equipment are

subsequently revalued, the entire class of such assets is revalued. Revaluations are made with sufficient regularity to ensure

that their carrying amounts do not differ materially from their fair values at the balance sheet date. Subsequent to the initial

recognition as an asset at cost, revalued Property, Plant and Equipment are carried at revalued amounts less any subsequent

depreciation thereon. All other Property, Plant and Equipment are stated at historical cost less depreciation.

When an asset is revalued, any increase in the carrying amount is credited directly to a revaluation surplus unless it reverses

a previous revaluation decrease relating to the same asset, which was previously recognised as an expense. In these

circumstances the increase is recognised as income to the extent of the previous written down. When an asset’s carrying

amount is decreased as a result of a revaluation, the decrease is recognised as an expense unless it reverses a previous

increment relating to that asset, in which case it is charged against any related revaluation surplus, to the extent that the

decrease does not exceed the amount held in the revaluation surplus in respect of that same asset. Any balance remaining

in the revaluation surplus in respect of an asset, is transferred directly to accumulated profits or loss on retirement or disposal

of the asset.

c) Restoration costs

Expenditure incurred on repairs or maintenance of property, plant and equipment in order to restore or maintain the future

economic benefits expected from originally assessed standard of performance, is recognized as an expense when incurred.

d) Depreciation

The provision for depreciation is calculated on the cost or valuation of all property, plant and equipment other than freehold

land, in order to write off such amounts over the estimated useful lives by equal instalments as follows:

Buildings 2.5 %

Plant & machinery 7.5 %

Furniture & fittings 10 %

Vehicles 20 %

Equipment 12.5 %

Water Sanitation 5 %

Mature Plantations

- Tea 3 %

- Rubber 5 %

- Oil Palm 5 %

- Coconut 2 %

- Cinnamon 5 %

The leasehold rights are being amortised in equal amounts over the following periods.



Bare Land - Over 53 years Mature Plantations - Over 30 years Buildings - Over 25 years Machinery - Over 15 years Improvements to Land - Over 53 years Other Vested Assets - Over 53 years Unimproved Land - Over 53 years

The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

e) Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised.

2.3.10 immature and Mature Plantations

The cost of Replanting and New Planting are classified as immature plantations up-to the time of harvesting the crop.

Further, the general charges incurred on the plantation are apportioned based on the labour days spent on respective Replanting and New Planting, and capitalised on the immature areas. The remaining portion of the general charges is expensed in the accounting period in which it is incurred.

The cost of areas coming into bearing are transferred to mature plantations and depreciated over their useful life period.

2.3.11InfillingCost

Where infilling results in an increase in the economic life of the relevant field beyond its previously assessed standard of performance, the costs are capitalised in accordance with Sri Lanka Accounting Standard No. 32 and depreciated over the useful life at rates applicable to mature plantation.

Infilling costs that are not capitalised have been charged to the Income Statement in the year in which they are incurred.

2.3.12 leases

a) Finance leases - where the company is the lessee

Property, plant and equipment on finance leases, (which effectively transfer to the company substantially all of the risks and benefits incidental to ownership of the leased item) are capitalised at their cash price, and depreciated/amortised over the period the company is expected to benefit from the use of the leased assets.

The corresponding principal amount payable to the lessor is shown as a liability.

The finance charges allocated to future periods are separately disclosed under Notes 12.5 & 15.

The interest element of the rental obligation applicable to each financial year is charged to the Income Statement over the period of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.



The cost of improvements to or on leased property is capitalised, and depreciated over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is shorter.

b) Assets leased to third parties under agreements that transfer substantially all the risks and rewards associated with ownership other than legal title, are classified as finance leases. Lease rentals receivable from the lessee shown in the balance sheet.

c) operating leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term are classified as operating leases.

Lease payments (excluding costs for services such as insurance and maintenance) paid under operating leases are recognised as an expense in the income statement on a straight-line basis over the lease term

d) leasehold Property

Leasehold property comprising of land use rights obtained on a long term basis, is stated at the recorded carrying values as at the effective date of Sri Lanka Accounting Standard 19 – Leases in line with Ruling of the Urgent Issues Task Force of The Institute of Chartered Accountants of Sri Lanka. Such carrying amounts are amortised over the remaining lease term or useful life of the leased property whichever is shorter.

2.3.13 investment in Joint venture

The company have interest in joint ventures which are jointly controlled entities. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, and a jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venturer has an interest. The company recognises its interest in the joint venture using the equity method.

Under the equity method, the investment in the joint venture is carried in the balance sheet at cost plus post acquisition changes in the company’s share of net assets of the associate. Goodwill relating to a joint venture is included in the carrying amount of the investment and is not amortised. The income statement reflects the share of the results of operations of the joint venture. Where there has been a change recognised directly in the equity of the joint venture, the company recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Profits and losses resulting from transactions between the company and the joint venture are eliminated to the extent of the interest in the joint venture.

The reporting dates of the joint venture and the company are identical and the joint venture’s accounting policies conform to those used by the company for like transactions and events in similar circumstances

2.3.14 Provisions

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense.

2.3.15RetirementBenefitObligation

a) DefinedBenefitPlans–Gratuity

The Company measures the present value of the promised retirement benefits of gratuity which is a defined benefit plan with the advice of an actuary every two years using projected benefits valuation method. Actuarial gains and losses are recognised as income or expenses over the expected average remaining working lives of the participants of the plan. The key assumptions used by the actuary include the following:



i) Rate of Discount 11.5% (per annum)

ii) Rate of Salary Increase - Workers 9% (per annum)

- Staff 10% (per annum)

iii) Retirement Age - Workers 55 years

- Staff 55 years

iv) The company will continue as a going concern.

The actuarial present value of the accrued benefits as at 31st March 2010 is Rs. 448,410,122/- This item is grouped under

retirement benefit obligations in the balance sheet. The liability is not externally funded.

b) DefinedContributionPlans–Employees’ProvidentFund&Employees’TrustFund

Employees are eligible for Employees’ Provident Fund Contributions and Employees’ Trust Fund Contributions in line with

the respective statutes and regulations. The Company contributes 12% and 3% of gross emoluments of employees to the

Employees’ Provident Fund and to the Employees’ Trust Fund respectively.

2.3.16 grants and subsidies

Grants and subsidies are recognised at their fair value where there is reasonable assurance that the grant/subsidy will be received

and all attaching conditions, if any, will be complied with. When the grant or subsidy relates to an income item it is recognised as

income over the periods necessary to match them to the costs to which it is intended to compensate on a systematic basis.

Grants and subsidies related to assets, including non-monetary grants at fair value are deferred in the balance sheet and credited

to the income statement over the useful life of the asset.

2.3.17 impairment of non Financial assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication

exists, or when annual impairment testing for an asset is required, the company makes an estimate of the asset’s 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 is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of

those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is

considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money

and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These

calculations are corroborated by valuation multiples, quoted share prices or other available fair value indicators.

Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with

the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In this case

the impairment is also recognised in equity up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously

recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company makes an

estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the

estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. 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 recognised for the asset in prior years. Such

reversal is recognised in the income statement unless the asset is carried at revalued amount, in which case the reversal is treated

as a revaluation increase. Impairment losses recognised in relation to goodwill are not reversed for subsequent increases in its

recoverable amount.

The following criteria are also applied in assessing impairment of specific assets:

goodwill

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount of the cash-generating unit (group of cash-generating units) to which goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to Goodwill cannot be reversed in future periods. The company performs its annual impairment test of goodwill as at 31 December. However, at present company does not have any recorded Goodwill as at the balance sheet date.

intangible assets

Intangible assets with indefinite useful lives are tested for impairment annually as of 31 March either individually or at the cash generating unit level, as appropriate. However, at present company does not have any recorded intangible assets as at the balance sheet date.

2.3.18 income statement

Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the purpose of recognition of revenue

(a) sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods.

(b) interest

Interest Income is recognised as the interest accrued (taking into account the effective yield on the asset) unless collectibility is in doubt.

(c) Dividends

Dividend income is recognised on a cash basis.

(d) Rental income

Rental income is recognised on an accrual basis.



3. leaseHolD PRoPeRtY Although leases of all JEDB/SLSPC estates handed over to the company have not been executed todate, leases have been executed

for Fernlands,Harrow, New Peacock, Nayapana, North Meddakumbura, Sheen, Talgaswella, Igallkanda, Gallinda, Elpitiya, Katandola, Lelwela, Diviturai, Gulugahakanda and Habarakada Estates. Leases remains to be executed for Nagoda and Mapalagama estates. All of these leases will be retroactive on 22 June, 1992, the date of formation of the Company. The leasehold right to the land on all of these estates have been taken into the books of the Company on June 22, 1992 immediately after formation of the Company, in terms of the ruling obtained from the Urgent Issue Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanka. For this purpose the Board decided at its meeting on 8 March 1995 that this bare land would be revalued at the value established for this land by valuation specialist, D.R. Wickramasinghe just prior to the formation of the company. The value taken into the 22 June 1992, Balance Sheet and the amortisation of the leasehold rights to 31 March 2010 are as follows.

The above mentioned leasehold right to bare land comprising of land use rights obtained on a long term basis is re-classified as leasehold property and stated at the recorded carrying values as at the effective date of Sri Lanka Accounting Standard 19 Leases, in line with revised Ruling of the Urgent Issues Task Force of the Institute of Chartered Accountants of Sri Lanka. Such carrying amounts are amortized over the remaining lease term or useful life of the leased property whichever is shorter. The leasehold right to land is disclosed under non current assets under leasehold property. The revised UITF ruling does not permit further revaluation of Leasehold Property. The values taken into the 22 June 1992 balance sheet and amortization of the leasehold property up to 31 March 2010 are as follows.

accumulated accumulated Revaluation Balance amortization amortisation amortization written Down written Down as at as at as at for the as at value as at value as at 22.06.92 Disposals 01.04.2009 01.04.2009 year 31.03.2010 31.03.2010 31.03.2009 Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Leasehold property 280,058,758 (938,279) 279,120,479 88,401,107 5,266,424 93,667,531 185,452,948 190,719,372

280,058,758 (938,279) 279,120,479 88,401,107 5,266,424 93,667,531 185,452,948 190,719,372

The leasehold rights to bare land are being amortised by equal amounts over 53 year period.

(e) others

Other income is recognised on an accrual basis

Net Gains and losses of a revenue nature on the disposal of property, plant & equipment and other non current assets including investments have been accounted for in the income statement, having deducted from proceeds on disposal, the carrying amount of the assets and related selling expenses. On disposal of revalued property, plant and equipment, amount remaining in Revaluation Reserve relating to that asset is transferred directly to Accumulated Profit / (Loss).

Gains and losses arising from incidental activities to main revenue generating activities and those arising from a group of similar transactions which are not material, are aggregated, reported and presented on a net basis.

expenditure Recognition

a) Expenses are recognised in the income statement on the basis of a direct association between the cost incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant & equipment in a state of efficiency has been charged to income in arriving at the Profit/ (Loss) for the year.

b) For the purpose of presentation of the Income Statement the directors are of the opinion that function of expenses method presents fairly the elements of the Company’s performance, and hence such presentation method is adopted.



4. iMMovaBle estate assets on Finance lease (otHeR tHan leaseHolD PRoPeRtY)

As morefully explained in Note 3 all JEDB/SLSPC estates leases have been executed as at the Balance Sheet date, in terms of the

ruling of the UITF of Institute of Chartered Accountants of Sri Lanka all immovable assets in these estates under finance leases

have been taken into the books of the Company retroactive to 22 June 1992. For this purpose the Board decided at its meeting on

March 8, 1995 that these assets would be taken at their book values as they appear in the books of the JEDB/SLSPC,on the day

immediately preceding the date of formation of the Company. These assets are taken into the 22 June 1992 Balance Sheet and

amortised as follows:

immature improvement other vested unimproved Mature Plant &

Plantations to land assets lands Plantations Buildings Machinery total

Rs. Rs. Rs. Rs Rs. Rs. Rs. Rs.

Revaluation as at 22.06.1992 283,368,199 4,214,618 4,028,217 1,564,267 95,362,391 73,002,143 47,785,047 509,324,882

Transferred to mature (283,368,199) 283,368,199 -

- 4,214,618 4,028,217 1,564,267 378,730,590 73,002,143 47,785,047 509,324,882

Acquired by Government 2002/2003 - - - - (1,389,400) (3,390,250) - (4,779,650)

Balance as at 31.03.2010 - 4,214,618 4,028,217 1,564,267 377,341,190 69,611,893 47,785,047 504,545,232

Accumulated amortisation as at 01.04.2009 - 1,719,498 1,277,640 361,556 172,664,573 47,009,290 47,785,047 270,817,604

Amortisation during the year - 79,521 76,004 29,514 12,578,040 2,784,476 - 15,547,555

Accumulated amortisation as at 31.03.2010 - 1,799,019 1,353,644 391,070 185,242,613 49,793,766 47,785,047 286,365,159

written down value as at 31.03.2010 - 2,415,599 2,674,573 1,173,197 192,098,577 19,818,127 - 218,180,073

written down value as at 31.03.2009 - 2,495,120 2,750,577 1,202,711 204,676,617 22,602,603 - 233,727,628

These assets are being amortised in equal annual amounts over the following periods:

Mature plantations 30 years

Buildings 25 years

Machinery 15 years

Other vested assets/ Unimproved land 53 Years

Investment in plantation assets which were immature at the time of handing over to the company by way of estate leases are shown

under immature plantation (revalued as at 22nd June 1992). Further, investment in such immature plantation to bring them to

maturity are shown under Note No 6. When these plantations become mature the additional investment to bring them to maturity

will be moved from the category immature plantations to mature plantations under Note 6 and a corresponding move from

immature plantations to mature plantations will be made in the above note.



5. tangiBle assets Balance additions Disposals Balance otHeR tHan iMMatuRe/MatuRe as at for the during the as at Plantations 31.03.2009 year Year 31.03.2010 Rs. Rs. Rs. Rs. cost Buildings 17,864,592 2,109,830 - 19,974,422 Motor Vehicles 60,425,016 961,500 - 61,386,516 Plant & Machinery 117,007,660 3,278,628 - 120,286,288 Furniture & Fittings 10,099,250 130,763 - 10,230,013 Equipment 42,742,194 4,515,300 - 47,257,494 Water Sanitation 134,564,547 68,387,021 - 202,951,568 382,703,259 79,383,042 - 462,086,301 assets on sheen Mini Hydro Project Plant & Machinery 56,414,421 1,038,726 - 57,453,147 Equipment 4,098,854 - - 4,098,854 Motor Vehicles 99,889 - - 99,889 Civil Construction & Others - 81,380,332 - 81,380,332 60,613,164 82,419,058 - 143,032,222 assets acquired on Finance lease Motor Vehicles 19,359,784 - - 19,359,784 Plant & Machinery 70,201,074 3,079,520 - 73,280,594 89,560,858 3,079,520 - 92,640,378 532,877,281 164,881,620 - 697,758,901 Balance charge accumulated Balance as at for the depreciation as at 31.03.2009 Year on disposals 31.03.2010 Rs. Rs. Rs. Rs. Depreciation Buildings 3,471,562 507,925 - 3,979,487 Motor Vehicles 59,078,664 1,024,008 - 60,102,672 Plant & Machinery 74,132,228 7,279,665 - 81,411,893 Furniture & Fittings 5,442,211 543,415 - 5,985,626 Equipment 24,466,646 3,088,249 - 27,554,895 Water Sanitation 37,828,126 7,539,513 - 45,367,639 204,419,437 19,982,775 - 224,402,212 assets on sheen Mini Hydro Project Plant & Machinery 1,762,951 4,278,268 - 6,041,219 Equipment 209,592 512,357 - 721,949 Motor Vehicles - 19,978 - 19,978 Civil Construction & Others - 2,034,508 - 2,034,508 1,972,543 6,845,111 - 8,817,654 assets acquired on Finance lease Motor Vehicles 5,283,035 3,871,957 - 9,154,992 Plant & Machinery 16,680,227 5,569,461 - 22,249,688 21,963,262 9,441,418 - 31,404,680 228,355,242 36,269,304 - 264,624,546 written Down value 304,522,039 433,134,355 Balance additions capitalised Balance as at for the during the as at 31.03.2009 Year Year 31.03.2010 Rs. Rs. Rs. Rs. capital work-in-Progress 107,070,432 5,445,908 87,036,578 25,479,762 total wRitten Down value 411,592,471 458,614,117

The assets shown above are those movable assets vested in the Company by gazette notification at the date of formation of the company (22 June 1992) and all investments in tangible assets by the company since its formation. The assets taken over by way of estate leases are set out in Notes 3 & 4.

Further, the valuation of immovable JEDB / SLSPC estate assets on finance lease (other than leasehold property) and tangible assets other than immature / mature plantations taken over as at 22 June 1992 is based on net book values obtained from the state plantations corporation and Janatha Estate Development Board as at such date. These values were not made available to us by individual asset.



6. iMMatuRe/MatuRe Plantations immature Mature

Plantations Plantations total

Rs. Rs. Rs.

cost

At the beginning of the year 1,179,601,844 775,717,005 1,955,318,849

Additions 185,232,716 - 185,232,716

Transfers (248,980,923) 248,980,923 -

At the end of the year 1,115,853,637 1,024,697,928 2,140,551,565

Depreciation

At the beginning of the year - 138,326,978 138,326,978

Charge for the year - 31,131,905 31,131,905

At the end of the year - 169,458,883 169,458,883

written Down value - as at 31.03.2010 1,115,853,637 855,239,045 1,971,092,682

written Down value - as at 31.03.2009 1,179,601,844 637,390,027 1,816,991,871

These are investments in immature/ mature plantations since the formation of the Company. The assets (including plantation

assets) taken over by way of estate leases are set out in Notes 3 and 4. Further investment in immature plantations taken over by

way of these leases are shown in the above note. When such plantations become mature, the additional investments since take over

to bring them to maturity, will be moved from immature to mature under this note. Borrowing costs amounting to Rs. 97,507,174/=

(2009 - Rs. 83,767,823/=) incurred on borrowings obtained to meet expenses relating to immature plantations have been capitalised

as part of the cost of the immature plantations.

7. long teRM investMents 2010 2009

Rs. Rs.

AEN Palm Oil Processing (Pvt) Ltd. (7.1) 77,276,400 46,811,727

Meddecombra Power Company (Pvt) Ltd. - 10

Tea Country Home (Pvt) Ltd. 10 10

Water Villas (Pvt) Ltd. 10 10

New Peacock Cottage (Pvt)Ltd. - 10

77,276,420 46,811,767

7.1 aen PalM oil PRocessing (Pvt) ltD

Balance B/F 46,811,727 32,871,117

Gross Interim Dividend-2009/10 (8,357,637) -

Share of Profit/ (Loss) of Joint venture 38,822,310 13,940,610

Total Carrying Value of Investment 77,276,400 46,811,727

The above investment represents the amount invested in AEN Palm Oil Processing (Pvt) Ltd. which is a joint venture company

established with Namunukula Plantations PLC and Agalawatta Plantations PLC.

7.2 Company’s investment in Elpitiya Lifestyle Solutions (Pvt) Ltd recorded at Zero value due to losses of that Company.



8. inventoRies 2010 2009

Rs. Rs.

Growing Crop - Nurseries 16,514,478 7,737,058

Produce Stock 158,345,882 70,022,378

Consumables & Spares 15,176,283 22,330,507

190,036,643 100,089,943

9. tRaDe anD otHeR ReceivaBles

Produce debtors 73,214,543 23,715,417

Advances & Prepayments 22,126,476 5,031,981

Employee Related Debtors 21,544,294 17,314,373

Other debtors 21,278,251 32,751,664

VAT Recoverable 3,504,949 3,547,732

141,668,513 82,361,167

Provision for doubtful debtors (1,595,760) (95,760)

140,072,753 82,265,407

10. aMount Due FRoM RelateD coMPanies 2010 2009

Rs. Rs.

Elpitiya Tea Farmers (Pvt) Ltd. 70,910 70,911

AEN Palm Oil Processing (Pvt ) Ltd. 3,949,905 12,501,981

Elpitiya Lifestyle Solutions (Pvt) Ltd. - Current Account 29,043,062 23,009,978

Elpitiya Lifestyle Solutions (Pvt) Ltd. - Loan 17,762,909 10,658,895

Dunsinane Power Company (Pvt) Ltd. 213,562 201,563

New Peacock (Pvt)Ltd. 168,006 140,237

Water Villas (Pvt) Ltd. 3,750,040 3,719,396

Meddecombra Power Co. (Pvt) Ltd. 637,597 609,828

Tea Country Homes (Private) Ltd. 5,142,144 4,892,236

60,738,135 55,805,025

Less:Provision for Dobutful Receivables (5,805,603) -

54,932,532 55,805,025

11. stateD caPital

issued and Fully Paid number of shares

Ordinary Shares Including one golden share held by the Treasury which 36,433,215 24,958,678

has Special rights

value of issued and Fully Paid shares

B/F Ordinary Shares Including one golden share held by the Treasury which 350,000,010 350,000,010

has Special rights

Right Shares Issued during the year 344,236,110 -

694,236,120 350,000,010

Stated Capital represents the amount paid to the company in respect of issuing 36,433,215 ordinary shares including one Golden

share which has special rights. During the year, the Board of Directors of the Company, offered one (01) Ordinary Share of

Rs. 30/- each for two (02) Ordinary Shares held in the capital of the Company by way of a Right Issue to the holders of the issued

shares of the Company. As a result, Company has raised Rs. 344,236,110/- by issuing 11,474,537 additional ordinary shares

during the year under review.



12. inteRest BeaRing loans anD BoRRowings

2010 2010 2009 2009

Repayable Repayable Repayable Repayable Repayable Repayable

within after 1 year less after 2010 within after 1 year less after 2009

1 year than 05 years 05 years total 1 year than 05 years 05 years total

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

12.1. Long Term Loans

(ADB Loans through DFCC) 39,566,736 108,249,253 1,163,390 148,979,379 40,138,164 136,674,725 22,294,370 199,107,259

12.2. Term Loans 76,675,097 138,732,182 48,983,722 264,391,001 25,565,665 41,160,302 109,834,867 176,560,834

12.3. Short Term Loans 104,035,576 - - 104,035,576 147,798,000 - - 147,798,000

12.4 Tea Securitising Loan 43,800,000 461,400,000 108,900,000 614,100,000 60,566,800 87,200,000 - 147,766,800

12.5. Finance leases 10,335,061 10,727,912 515,092 21,578,065 10,460,756 18,624,332 - 29,085,088

12.6 Guaranteed Redeemable Debentures - 75,000,000 - 75,000,000 - - 75,000,000 75,000,000

Bank Overdraft 38,392,941 - - 38,392,941 172,643,636 - - 172,643,636

312,805,411 794,109,347 159,562,204 1,266,476,962 457,173,021 283,659,359 207,129,237 947,961,617

953,671,551 490,788,596

12.1 long term loans 2010 2010 2010 Rate of terms of

Repayable Repayable Repayable total total interest Repayment

within after 1 year less after 05 years as at as at

1 year than 05 years 31.03.2010 31.03.2009

Rs. Rs. Rs. Rs. Rs.

aDB loans (through DFcc)

Loan - 1 15,848,100 38,762,574 - 54,610,674 73,100,124 (I)

Loan - 2 10,054,752 37,705,389 - 47,760,141 59,490,685 (II)

Loan - 3 933,372 1,944,453 - 2,877,825 3,966,759 (III)

Loan - 5 1,714,284 - - 1,714,284 4,380,948 (IV)

Loan - 6 2,499,996 208,333 - 2,708,329 5,624,991 (V)

Loan - 7 1,132,704 94,392 - 1,227,096 2,548,584

(DFCC Wardana) 7,383,528 29,534,112 1,163,390 38,081,030 49,995,168 (VI)

39,566,736 108,249,253 1,163,390 148,979,379 199,107,259

12.2 term loans

Sampath Bank(93065000225) - - - - 4,033,414

People’s Bank - - - - 25,583

H.N.B (66061001) 7,750,000 - - 7,750,000 18,000,000 (VII)

H.N.B (66061101) 6,930,000 - - 6,930,000 15,270,000 (VIII)

H.N.B (66060801) - - - - 2,500,000

H.N.B-(E friends Loan) 2,000,004 4,333,322 - 6,333,326 8,333,330 (IX)

Seylan Bank 7,649,000 52,453,000 30,598,000 90,700,000 117,038,507 (X)

Seylan Bank - - - - 11,360,000

Bank of Ceylon 36,592,322 15,619,799 - 52,212,121 - (XI)

NDB (0920500305) 7,756,131 35,835,501 18,373,922 61,965,554 - (XII)

Sampath Bank-Marketing 1,997,640 7,990,560 11,800 10,000,000 - (XIII)

Sampath Bank (39365000406) 6,000,000 22,500,000 - 28,500,000 - (XIV)

76,675,097 138,732,182 48,983,722 264,391,001 176,560,834

120 equal monthly installments commencing from 30.09.2003 120 equal monthly installments commencing from 13.12.200496 equal monthly installments commencing from 13.04.200548 equal monthly installments commencing from 30.09.200284 equal monthly installments commencing from 13.04.200484 equal monthly installments commencing from 13.04.200478 equal monthly installments commencing from 20.12.2006

36monthly installement of Rs 750,000

33monthly installement of Rs 695,000 and final installement of Rs 675,000

60monthly installement of Rs 166,000

83 equal Monthly installmentscommencing from September 2011

24 monthly installements

83 equal Monthly installmentscommencing from September 201159 monthly installment of Rs 166,670/-and final instalment of Rs 166,470 /-60monthly installement of Rs 500,000/-



12.3 short term loans 2010 2010 2010 Rate of terms of Repayable Repayable Repayable total total interest Repayment within after 1 year less after 05 years as at as at 1 year than 05 years 31.03.2010 31.03.2009

Rs. Rs. Rs. Rs. Rs.

HNB Money Market Loan 100,000,000 - - 100,000,000 100,000,000 (XV)

Marketing Development Tempory Loan 4,035,576 - - 4,035,576 17,498,000 (XVI)

HNB -Marketing - - - - 13,300,000

Pan Asia Bank - - - - 12,000,000

Sampath Bank - - - - 5,000,000

104,035,576 - - 104,035,576 147,798,000

12.4 tea securitising loans

Deutsche Bank - - - - 16,666,800

National Development Bank - - - - 56,100,000

National Development Bank 25,900,000 23,200,000 - 49,100,000 -

National Development Bank 4,500,000 45,500,000 - 50,000,000 - (XVII)

National Development Bank 8,600,000 106,400,000 - 115,000,000 - (XVIII)

National Development Bank 3,000,000 112,500,000 34,500,000 150,000,000 - (XIX)

State Bank of India-through NDB 1,800,000 173,800,000 74,400,000 250,000,000 - (XX)

43,800,000 461,400,000 108,900,000 614,100,000 72,766,800

12.5 Finance leases

Gross Liability 13,843,639 13,381,831 648,411 27,873,881 38,316,722

Less: Finance charges (3,508,578) (2,653,919) (133,319) (6,295,816) (9,231,634)

allocated to future periods

Net liability 10,335,061 10,727,912 515,092 21,578,065 29,085,088

12.6 guaranteed Redeemable Debentures (Rs.75,000,000/-)

The above balance represents 03 Guaranteed Redeemable Debenture, for the value of Rs. 25,000,000/- each at the par value of Rs. 25,000,000/-

each (principal sum) payable to plantations Trust Fund. The rate of interest will be 13.08% per annum is payable semi-annually on or before 30

June and 31 December until the said debenture shall have been redeemed on 04 December 2012. Debentures shall mandatorily be converted to

ordinary shares if Company fails to adhere to the conditions stated in the debenture invested agreement.

(I) 15.75% per annum. 4% reduction on timely payments.

(II) 17.6% per annum. 4% reduction on timely payments.

(III) 18.33% p.a 4% reduction on timely payments

(IV) 18 % per annum. 4% reduction on timely payments.

(V) 18% per annum, 4%, reduction on timely payments.

(VI) AWPR+ 2 per annum

(VII) AWPLR + 3% (reviewed monthly)

(VIII) AWPLR + 3% (reviewed monthly)

(IX) 6.5% {untill refinance funds are received at AWPLR+3% (reviewed monthly)}

(X) 16% per annum.

(XI) AWPLR + 2.5% with a floor rate of 21.0% p.a

(XII) 16.44% per annum.

(XIII) AWPLR +2.0% with a floor rate of 16% p.a

(XIV) AWPLR +2.0% with a floor rate of 19% p.a

Payable within 03 monthsPayable within 03 months

(XV) Short term money market rate.

(XVI) 18% per annum.

(XVII) 18.43% per annum.

(XVIII) AWPLR + 1.95% per annum.

(XIX) AWPLR of 11.48% per annum.

(XX) AWPLR + 2.25% per annum.



13. RetiRing BeneFit oBligations 2010 2009 Rs. Rs.

At the beginning of the year 326,727,983 305,448,530 Provisions for the year 172,695,485 48,879,446 Payments for the year (51,013,346) (27,599,993) At the end of the year 448,410,122 326,727,983

The actuarial valuation had been carried out as at 31 March 2010 which amounts to Rs. 448,410,122/=. If the company had provided for gratuity on the basis of fourteen days wages and half a month salary for each completed year of service, the liability would have been Rs. 480,996,585/=. Hence there is a contingent liability of Rs.32,586,463/= which would crystallise only if the company ceases to be a going concern.The provision made in the current year, comprised with current service cost, interest cost and acturial losses amounting to Rs. 17,611,562/-, Rs. 36,297,614/- and Rs. 118,786,309/- respectively.

14. DeFeRReD incoMe 2010 2009 Rs. Rs.

14.1 Deferred Grants and Subsidies 128,301,074 93,793,612 14.2 Sub Lease Income 58,215,852 55,382,302 186,516,926 149,175,914 14.1 DeFeRReD gRants anD suBsiDies At the beginning of the year 93,793,612 80,747,389 Add : Grants received for the year - Monitory 42,046,975 18,585,305 Less : Amortisation for the year (7,539,513) (5,539,082) At the end of the year 128,301,074 93,793,612

The Company has received funding from the Plantation Housing and Social Welfare Trust and Asian Development Bank for the develop-ment of workers facilities such as re-roofing of line rooms, latrines, water supply and sanitation etc. The amounts spent are included under the relevant classification of Property, Plant & Equipment and the grant component is reflected under Deferred Grants and Subsidies. Further this includes the C.T.C. Machinery Subsidy which represents the funds received from Sri Lanka Tea Board in relation to C.T.C. Project.

14.2 suB lease incoMe 2010 2009 Rs. Rs.

At the beginning of the year 55,382,302 57,558,848 Add: Cash received for the year 13,839,091 8,829,397 Less : Amortisation for the year (11,005,541) (11,005,943) At the end of the year 58,215,852 55,382,302

15. net liaBilitY to tHe lessoR oF slsPc / JeDB estates 2010 2009 Rs. Rs. Repayable after 5 years Gross liability 312,492,594 322,802,594 Less : finance charges (133,816,159) (141,099,043) Net liability 178,676,435 181,703,551 Repayable after1 year less than 5 years Gross liability 41,240,000 41,240,000 Less : finance charges (29,812,363) (30,251,887) Net liability 11,427,637 10,988,113 Repayable after1 year 190,104,072 192,691,664 Repayable within1 year Gross liability 10,310,000 10,310,000 Less : finance charges (7,722,408) (7,821,931) Net liability 2,587,592 2,488,069 total 192,691,664 195,179,733



The lease of the estates have been amended, with effect from 22nd June, 1996 to an amount substantially higher than the previous lease rental of Rs. 500/- per estate per annum. The first rental payable under the revised basis is Rs. 10.31 million from 22nd June 1996 to 21 June 1997. This amount is to be inflated annually by the Gross Domestic Product (GDP) deflator, and is in the form of a contingent rental.

In accordance with the agreement signed by the company and Ministry of Plantations Industries, the Secretary to the Ministry of Plantations Industries has agreed to freeze the lease rental based on the applicable lease rental of the year 1999 (GDP of 4.4% ) which is determined on the extent of the Rubber cultivation of the company. The contingent rental charged in the income statement based on the above agreement which will be valid for the period from 22 June 2002 to 21 June 2008 amounted to Rs. 5,073,428 /=.

The above relief was granted to the company on the basis of following conditions.

Company Undertakes,

1. To cap the management fee for a period of 05 years from the year commencing 01st April 2003. 2. To comply with all laws, by - laws, statutory provisions and other regulations of the Government of Sri Lanka. 3. To diversify the crops to ensure the optimum usage of land. 4. To invest the difference between the frozen lease rental and the actual amount payable for capital expenditure. 5. To settle the outstanding payments according to an agreed time schedule with the Treasury. If the company defaults the payment of lease rental or violates any of the terms and conditions of this agreement, then in such case the Secre-tary reserves the right to withdraw the loan and grant assistance which is provided to the company under the Plantation Development Project after holding an inquiry. In addition, the company is liable to pay an amount equal to the short fall in investment as additional lease rental, if the company unable to fulfill the above fourth condition.

The above agreement has expired on 21 June 2008. and the Ministry of Plantations Industries is in the process of finalising a new agreement. Negotiations are underway to enhance the lease rental with effect from June - 2008. However, finality of the negotiation has not been reached yet. Hence, the management fee is computed and paid on the basis of item 01 above.

16. tRaDe anD otHeR PaYaBles 2010 2009 Rs. Rs.

Trade creditors 68,727,198 120,985,135 Employee related creditors 67,997,768 55,571,099 Others 110,036,151 147,233,245 246,761,117 323,789,479 17. aMounts Due to RelateD coMPanies Relationship 2010 2009 Rs. Rs. Aitken Spence Plantation Managements Ltd. - Current Account Parent Company 63,939,223 61,579,211 - Interest Free Loan Parent Company 200,000,000 200,000,000 Aitken Spence Plantation Managements Ltd. (Short Term Loan) Parent Company - 44,166,662 Aitken Spence & Co. PLC (Other Expenditure) Group Company 27,189,134 53,843,382 Aitken Spence & Co. PLC (Short Term Loan) Group Company * 8,000,000 38,000,000 Aitken Spence & Co. PLC (Interest Payable) Group Company 26,736,353 20,748,326 325,864,710 418,337,581

* This amount represent the Short Term Loan due to Aitken Spence & Co. PLC for which interest is computed on daily basis at a variable rate ( between 9% - 16.5% ) on the balance outstanding.

18. Revenue 2010 2009 Rs. Rs. Sale of Produce Tea 1,766,738,751 1,202,811,450 Rubber 254,683,950 193,663,728 Coconut 737,093 772,276 Oil Palm & Other Crops 192,966,298 158,934,745 2,215,126,092 1,556,182,199



18a segment information industry tea Rubber coconut oil Palm & other crop total 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

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



19. otHeR incoMe anD gains 2010 2009

Rs. Rs.

Profit from Refuse Tea Project 19,563,117 8,804,942

Profit on Sale of Scrap Iron - 1,582,609

Amortisation of Capital Grants 7,539,513 5,539,082

Others 42,682,150 26,862,300

Income from Sub Lease 11,005,541 11,005,943

Written back sundry creditors 307,419 -

81,097,740 53,794,876

20. Finance cost 2010 2009

Rs. Rs.

Overdraft Interest 25,281,629 28,603,830

Term Loan Interest 176,631,810 124,218,141

Interest on Government Lease 7,821,931 7,917,626

Variable Lease Rental 5,073,428 5,073,427

Lease Interest 5,938,293 7,137,179

Interest Paid to related Companies 20,687,713 25,365,566

Exchange Loss 147,815 -

241,582,619 198,315,769

Amount Capitalised (97,507,174) (83,767,823)

144,075,445 114,547,946

21. PRoFit BeFoRe taXation is stateD aFteR cHaRging 2010 2009

Rs. Rs.

Auditors fees 1,217,000 1,058,000

Depreciation/Amortisation 88,215,186 77,794,266

Defined Benefit Plan Costs 172,695,485 48,879,446

Defined Contributions Plan Costs - EPF & ETF 108,636,657 95,462,186

Others - Staff Costs (Including Estate Employees) 736,803,732 613,711,758

Director fees 1,019,000 -

Donation 235,988 -

22. incoMe taX eXPense

The Company is liable for income tax at the rate of 35% on its profit from manufacture & exempt on profit from agriculture. The carried

forward tax losses of the Company as at 31 March 2010, amounts to Rs.1,337,847,971/- (provisional) 2008/2009 Rs.1,306,885,724/-.

current tax (expense) / income Rs. Rs.

Current Income Tax Expense - -

- -



22.1 Reconciliation between current tax (expense) / income and the product of AccountingProfitMultipliedbytheStatutoryTaxrateof (35%)asfollows. 2010 2009 Rs. Rs. Accounting Profit / (Loss) before Tax and Joint Venture Profit 24,994,484 (75,645,225) Tax effect on Accounting Profit / (Loss) 8,748,069 (26,475,829) Tax effect on Aggregate Disallowed items 96,934,759 48,140,192 Tax effect on Aggregate Allowable items (142,531,534) (51,141,263) Taxable Profit / (Loss) (36,848,706) (29,476,900) Tax effect on exempt Income - Agriculture - - Tax Losses Brought Forward & Utilized - - SRL - - Taxable Profit/(Loss) - - Provided in the accounts - -

23. eaRnings PeR sHaRe

The calculation of the basic earnings per share has been done based on profit after tax for the year divided by the weighted average number of ordinary shares outstanding during the year.

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

2010 2009 Rs. Rs. amount used as the numerator Net profit /(loss) for the year 63,816,794 (61,704,615) amount used as the denominator Weighted average number of ordinary shares outstanding during the year 25,914,889 24,958,678



24. secuRities PleDgeD Following assets have been pledged as security for liabilities.

name of Bank loan security nature of liability carrying amount Pledged Facility 2010 2009 Rs. Rs. Rs.

Bank of Ceylon 75,000,000 Overdraft 57,572,458 31,194,704

Bank of Ceylon 73,184,644 Term Loan 20,184,644 -

Hatton National Bank 50,000,000 Overdraft 15,808,105 16,256,929

Hatton National Bank 10,000,000 E-Friends Loan 15,808,105 16,256,929

Hatton National Bank 100,000,000 Money Market Loan 7,293,951 7,501,040

Hatton National Bank 25,000,000 Term Loan 25,000,000 25,000,000

Hatton National Bank 30,000,000 Short Term Loan 12,301,274 12,650,532

Hatton National Bank 10,000,000 Short Term Loan 12,301,274 12,650,532

Seylan Bank 90,700,000 Term Loan 27,986,152 38,877,491

DFCC Bank 158,481,886 Term Loan 38,574,938 76,152,691



DFCC Bank 47,000,000 Term Loan 11,910,540 28,764,457 DFCC Bank 18,000,000 Term Loan 11,910,540 28,764,457 Sampath Bank 30,000,000 Term Loan 11,910,540 - Sampath Bank 10,000,000 Term Loan 11,910,540 -

NDB 80,000,000 Tea Securitising Loan 5,551,443 - NDB 150,000,000 Tea Securitising Loan 19,424,611 -

State Bank of India 250,000,000 Tea Securitising Loan 36,164,640 -

NDB 75,000,000 Tea Securitising Loan Securitising of future Tea Sales



Primary mortgage over estate produce consisting of Tea, Rubber, Oilpalm, Coffee, Coconuts, Clove & Paddy on estate.Primary floating mortgage bond for Rs. 25 Mn. over stock of estate produce consisting of Tea, Rubber, Oil Palm and Coconut stored at Dunsinane, Sheen, Fernlands and Medecombra Estates at Pundaluoya.

Additional mortgage of 20.184 Mn over estate produce consisting of Tea, Rubber, Oilpalm, Coffee, Coconuts, Clove & Paddy on estate.Corporate Guarantee of M/S Aitken Spence Plantation Management Ltd

Primary floating mortgage bond for Rs. 10 Mn. over leasehold property at “Talgaswella Estate” in Galle. Corporate Guarantee of Aitken Spence Plantation Managements Ltd.

Primary floating mortagage bond for Rs. 25 Mn. over lease hold property “Gallinda Estate” at Mapagala, Galle.

Primary floating mortgage bond for Rs. 100 Mn. over leasehold property at “Fernlands Estate” Pundaluoya,Nuwara Eliya.

25 Mn. Over Stock in Trade

Leeway available on the primary floating mortagage band for Rs. 50 Mn over leasehold property “Harrow Estate” situated at Pundaluoya, Nuwara Eliya.

Leeway available on the primary floating mortagage band for Rs. 50 Mn over leasehold property “Harrow Estate” situated at Pundaluoya, Nuwara Eliya

Primary mortgage over leasehold rights to the land and Buildings of Elpitiya and Bentota Estates.

Primary mortgage over leasehold rights to the land and buildings of Nayapane, Deviturai & Newpeacock estates.

Further mortgage over leasehold rights to the land and the buildings of Nayapane, Deviturai & Newpeacock estates.

Further mortgage over leasehold rights to the land and the buildings of Nayapane, Deviturai & Newpeacock estates.

Secondary mortgage over the leasehold rights of Sheen estatetogether with buildings & machinery situated at Kadorapitiya.

Secondary mortgage over the leasehold rights of Sheen estatetogether with buildings & machinery situated at Kadorapitiya.

Loan Agreement of 30 Mn. Existing Primary Mortgagae Bond for Rs. 31 Mn. over leasehold rights of Sheen Estate situted in Pundaluoya , Nuwara Eliya.Existing Corporate Guarantee of Aitken Spence Plantation Managements Ltd. For Rs. 67 Mn.

Loan Agreement of 10 Mn. Existing Primary Mortgagae Bond over leasehold rights of Sheen Estate situted in Pundaluoya , Nuwara Eliya.Existing Corporate Guarantee of Aitken Spence Plantation Managements Ltd. For Rs. 67 Mn.

Primary Mortgage over lealehold rights of Lelwela Estate.Corporate Guarantee of Aitken Spence Plantation Managements Ltd.

Primary Mortgage over lealehold rights of Ketandola Estate & Gulugahakanda Estate.Further mortgage over future Tea receivables.Further Mortgage over leasehold rights of Lelwela Estate.Primary Mortgage over lealehold rights of Dunsinane Estate & Meddacombra Estate.

Securitising of future Tea Sales.





25. caPital coMMitMents 2010 2009 Followings are the capital commitments as at the balance sheet date. Rs. (Mn) Rs. (Mn) Approved by Board & Contracted for - - Approved by Board & not Contracted for 167 149

26. contingencies

No known contingent liabilities exist as at the balance sheet date other than the matters disclosed in Notes 13 & 15 to the Financial Statements and few legal matters pending as at the year end of which the outcome is not determinable.

27. Post Balance sHeet events

There have been no material events occurring after the balance sheet date that require adjustment or disclosure in the financial statements.

28. RelateD PaRtY DisclosuRes

The details of the significant related party disclosures are as follows.

28.1 transactions with the Parent and Related entities.

company name of Relationship nature of charged/(credited) Director transaction 2010 2009 Rs. Rs.

Aitken Spence Plantation Mr. J.M.S. Brito Parent Company Management Fees 9,019,066 13,435,509 Managements Ltd. Dr. R.M. Fernando Executive Staff Salaries & Expenses 15,445,311 16,734,328 Mr. Merrill J. Fernando Short Term Loan Interest 9,622,863 11,688,528 Mr. Malik J. Fernando Loan Repayment 44,166,662 - Mr. D.V.H.de Mel Mr. D.A.de S.Wickremanayake Dr. R.D.Bandaranaike Mr. A.L.W.Goonawardena Aitken Spence PLC Mr. D.H.S.Jayawardena Group Company Interest on Current Account & Short 11,180,749 13,518,827 Mr. J.M.S. Brito Term Loans Services & Sundries 3,359,345 3,186,006 Dr. R.M. Fernando Mr. G.C.Wickremasinghe Mr. G.M.Perera Mr. C.H.Gomez Mr. N.J. de Silva Deva Adithya Mr. V.M.Fernando Dr. P Dissanayake Mr. R N Asirwatham Tea Country Homes (Pvt) Ltd. Mr. J.M.S. Brito Group Company Professional & Secretarial Charges 249,908 171,094 Dr. R.M. Fernando Mr. A.L.W.Goonawardena Mr. Malik J. Fernando Mr. D.A.de S.Wickremanayake New Peacock Cottage (Pvt) Ltd. Mr. J.M.S. Brito Group Company Professional Charges 27,769 24,794 Dr. R.M. Fernando Mr. Merrill J. Fernando Mr. Malik J. Fernando Mr. D.V.H.de Mel Mr. D.A.de S.Wickremanayake Mr. A.L.W.Goonawardena Water Villas (Pvt) Ltd. Mr. J.M.S. Brito Group Company Professional Charges & Secretarial Fees 30,644 34,078 Dr. R.M. Fernando Mr. Merrill J. Fernando Mr. Malik J. Fernando Mr. D.V.H.de Mel Mr. D.A.de S.Wickremanayake Mr. A.L.W.Goonawardena



28. RelateD PaRtY DisclosuRes (cont.)

company name of Relationship nature of charged/(credited)

Director transaction 2010 2009

Rs. Rs.

AEN Palm Oil Processing (Pvt) Ltd. Mr. J.M.S. Brito Group Company Expenditure Incurred 361,423 209,884

Dr. R.M. Fernando

Mr. F. L. Fonseka

Dr. C.N.A.Nonis

Mr. P.D.Samarasinghe

Mr. J.H.P. Ratnayake

Elpitiya Lifestyle Solutions (Pvt) Ltd. Mr. S. Pathiratne Group Company Expenditure Incurred 6,033,084 4,219,578

Dr. R.M. Fernando USD Loan & Interst 17,876,941 10,658,895

Mr. Malik J. Fernando

Mr. D.A.de S.Wickramanayake

Ms. D. Piyaratne

Mr. A.Kanthasamy

Meddecombra Power Company (Pvt) Ltd. Mr. J.M.S.Brito Group Company Professional Fees 27,769 24,794

Dr. R.M.Fernando & Secretarial Charges

Mr. Malik J Fernando

Mr. D.A.de S.Wickremanayake

HNB Bank Related Company Loan Receipts - 37,459,000

Loan Repayment 49,852,428 45,083,670

Finance Lease Repayment 10,964,386 10,839,216

Finance Lease Obtained 928,836 10,293,676

DFCC Vardhana Related Company Loan Receipt - 22,584,286

Loan Repayment 11,914,138 6,077,787

DFCC Bank Related Company Loan Receipts 50,000,000 -

ADB Loans Repayment 88,213,742 27,295,530

28.2 transactions with the Key Management Personnel of the company and parent

There are no transactions with the key management personnel of the company and its parent. Further there were no key management

compensation paid during the year.

29. RelateD PaRtY tRansactions

There are no related party transactions other than those disclosed in Notes 7, 10, 17, 20, 24 & 28 to the Financial Statements.



value aDDeD stateMent

Figures in Rs.000’ Year ended as a Year ended as a 31.03.10 % 31.03.09 %

Value Added

Turnover 2,215,126 1,556,182

Other Income 81,098 53,795

2,296,224 100 1,609,977 100

Purchase of goods and Services (1,218,494) (53) (707,838) (44)

Total Value Added 1,077,730 47 902,139 56

Distributed as follows

To Employee,

as remuneration 845,440 78.45 709,797 78.68

To Government,

as lease rental 12,895 1.20 12,991 1.44

To Lenders,

as interest on short &

long term borrowings 131,180 12.17 101,557 11.26

Retained for re-investment and 88,215 8.18 77,794 8.62

future growth

Depreciation 88,215 8.18 77,794 8.62

Reserves - - - -

1,077,730 100.00 902,139 100

Distribution of Value Added 2009/2010

Depreciation 8.18%

Government 1.20%

Lenders 12.17%

Remuneration 78.45%

Distribution of Value Added 2008/2009

Remuneration 78.68%

Lenders 11.26%

Government 1.44%

Depreciation 8.62%


nuwaRaeliYa DistRict Dunsinane 577.75 - - 51.75 629.50 790.00 911 - - Tea 1,061

Sheen 302.00 - - 66.25 368.25 517.25 472 - - Tea 699

Fernlands 382.99 - - 37.25 420.24 484.25 463 - - Tea 809

Meddecombra 480.50 - - 211.04 691.54 890.00 565 - - Tea 1,021

KanDY DistRict New Peacock 293.24 - - 164.79 458.03 535.73 665 - - Tea 575

Nayapane 268.15 - - 190.00 458.15 576.50 403 - - Tea 483

galle DistRict Devitura 102.84 244.51 177.04 66.10 590.49 896.22 313 159 1,809 Tea 558 Rubber

Talgaswella 54.34 187.83 422.55 80.97 745.69 1,033.85 290 139 4,353 Tea 423 Rubber Gulugahakanda 68.73 60.01 58.13 16.86 203.73 418.18 102 32 447 - 162 Lelwala 68.81 42.28 - 21.00 132.09 240.35 180 26 - Tea 235 Ketandola 65.35 127.08 55.48 10.16 258.07 832.69 189 66 460 Tea 247 Bentota - 353.45 10.00 32.25 395.70 684.06 52 242 - Rubber 263

Elpitiya - 342.50 139.63 18.53 500.66 952.44 30 249 1,380 Rubber 305

2,664.70 1,357.66 862.83 966.95 5,852.14 8,851.52 4,635 913 8,449 6,841 2009/2010 2008/2009

tea Rubber oil Palm tea Rubber oil Palm

Total Crop (Kg.000’s) 4,635 913 8,449 4,353 981 7,931

Total NSA (Rs/Kg) 344.87 278.86 21.39 261.42 199.11 18.06

Y P H 1,367 878 10,785 1,269 868 10,177

estate tea Rubber oil Palm others total (ha.) tea Rubber oilPalm Manfd.

cultivated area (ha.) annula ProductionKg’000

Factory Detailscrop

no. ofworkers

totalarea

inFoRMation on estates

employment strength totalworkers clerical & technical executives

2009 7,138 390 86 7,614

2010 6,841 384 82 7,307

Year Ended 31st March 2010


ten YeaR suMMaRY

Year ended 31st March 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000 Rs.’ 000

tRaDing Results Revenue 2,215,126 1,556,182 1,883,109 1,281,922 1,046,338 1,214,280 1,022,891 1,103,657 999,283 998,132 Other Income 81,098 53,795 44,757 35,718 30,681 31,101 78,264 41,268 67,229 30,000 GrossProfit 241,211 89,528 362,925 199,722 93,149 163,512 70,719 113,773 110,087 160,609 Finance Cost (144,075) (114,548) (120,717) (107,420) (80,009) (56,360) (55,536) (57,034) (68,701) (51,625)

Profit/(Loss)BeforeTax 63,817 (61,705) 166,317 11,286 (29,284) 52,534 31,128 30,178 40,167 65,153 Income Tax (Expense) / Income - - 3,919 (3,391) (8,327) - - - - - Profit/(Loss)AfterTax 63,817 (61,705) 170,237 7,895 (37,610) 52,534 31,128 30,178 40,167 65,153 Balance sHeet Funds employed Stated Capital 694,236 350,000 350,000 - - - - - - - Share Capital - - - 249,587 249,587 249,587 249,587 249,587 200,000 200,000 Share Premium - - - 100,413 100,413 100,413 100,413 100,413 - - Revenue Reserves 323,761 259,944 321,649 151,412 (25,501) 12,110 (40,424) (71,552) (101,730) (141,897)Negative Goodwill - - - - 169,017 183,102 197,187 211,271 225,356 239,441 total equity 1,017,997 609,944 671,649 501,412 493,517 545,212 506,763 489,719 323,626 297,544 convertible Debentures - - - - - - - - 150,000 150,000 Redeemable Debentures 75,000 75,000 75,000 - - - - - 20,000 20,000 Deferred Income 186,517 149,176 138,306 116,943 93,758 91,661 87,205 77,741 60,954 45,251 Retirement Benefit Obligations 448,410 326,728 305,449 264,845 230,658 243,149 240,858 231,722 217,313 205,003 Net Liability to Lessor 190,104 192,692 195,180 197,570 199,872 202,084 204,211 206,256 208,624 210,314 Interest Bearing Borrowings 878,672 415,789 394,491 254,478 326,363 368,747 383,173 367,509 368,673 345,136 non-current liabilities 1,778,703 1,159,384 1,108,426 833,836 850,651 905,641 915,447 883,227 875,564 825,704 2,796,700 1,769,328 1,780,074 1,335,248 1,344,168 1,450,853 1,422,210 1,372,947 1,349,190 1,273,247

assets employed

Non-Current Assets 2,910,616 2,699,843 2,485,862 2,318,057 2,231,841 2,120,496 1,951,754 1,806,591 1,675,196 1,515,304

Current Assets 774,102 271,273 416,094 314,884 219,897 233,766 224,927 226,801 194,092 190,539

Current Liabilities (888,019) (1,201,788) (1,121,882) (1,297,693) (1,107,571) (903,410) (754,471) (660,445) (520,098) (432,596)

2,796,700 1,769,328 1,780,074 1,335,248 1,344,168 1,450,853 1,422,210 1,372,947 1,349,190 1,273,247 Key indicators EPS (basic) (Rs.) 2.46 (2.47) 6.82 0.32 (1.51) 2.10 1.25 1.28 2.01 3.26Dividend per Share (Rs.) 0.50 - - - - - - - - - Net Assets Per Share (Rs.) 27.94 24.44 26.91 20.09 19.77 21.84 20.30 19.62 16.18 14.88 Market Price Per Share (Rs.) 34.00 39.00 80.50 34.50 30.00 9.75 12.00 10.00 * * Price Earnings Ratio 14 (16) 12 109 (20) 5 10 8 * * Current Ratio 0.87 0.23 0.37 0.24 0.20 0.26 0.30 0.34 0.37 0.44 Return on Shareholder’s Funds % 6.27 (10.12) 25.35 1.57 (7.62) 9.64 6.14 6.16 12.41 21.90 * Shares had not been traded during this period


sHaReHolDeR & investoR inFoRMation

sHaReHolDing BReaKDown as at 31 - MaRcH - 2010

Category No. of Shareholders No. of Shares %

1 - 1,000 10,032 1,789,170 4.91

1,001 - 5,000 163 307,692 0.84

5,001 - 10,000 42 272,819 0.75

10,001 - 50,000 22 358,110 0.98

50,001 - 100,000 2 130,900 0.36

100,001 - 500,000 4 609,301 1.67

500,001 - 1,000,000 0 0.00 0.00

1,000,001 - above 3 32,965,223 90.48

all Holdings 10,268 36,433,215 100.00

sHaRes tRaDeD DuRing tHe YeaR april 1, 2009 to March 31, 2010

suMMaRY oF sHaReHolDings as at 31 - MaRcH - 2010

Total no of shares 36,433,215 Less: Holding by the parent co (ASPM) 25,158,677 (69.05%)Less: Shareholder exceeding 10% (Secretary to the Treasury) 7,806,546 (21.43%)Public holding 3,467,992 (9.52%)

category no. of shares no. of %

shareholders

Nationals 36,148,215 10,264 99.22Non Nationals 285,000 04 0.78Residents 36,308,203 10,266 99.66Non Residents 125,012 02 0.34Individuals 3,250,982 10,244 8.92Institutions 33,182,233 24 91.08

Number of share transactions 3879Number of shares 1,171,200Total Value 58,341,700.00Highest Price Traded (Rs) 67.00 16.06.2009Lowest Price Traded (Rs) 33.00 28.01.2010Value of Shares as at the end of financial year (Rs) 34.00

PuBlic HolDing:as at 31 - MaRcH - 2010

Excludes:

* Parent, subsidiary or associate companies

* Subsidiaries or associates of the parent company

* Directors, CEO, their spouses & children under 18 & their nominees

* Co. in which a Director’s holding exceeds 50% of the equity or where the Director controls the composition of the Board

* Shareholders whose holding exceeds 10% of the issued capital


shareholder iD name of the shareholder shareholding %

1 8842 AITKEN SPENCE PLANTATION MANAGEMENTS LTD 25,158,677 69.054

2 16360 SECRETARY TO THE TREASURY 7,806,546 21.427

3 19704 N.S. NILES 210,101 0.577

4 25764 T.T. AL - NAKIB 156,200 0.429

5 23675 TRANZ DOMINION,L.L.C. 125,000 0.343

6 21003 S.N.C.W.M.B.C. KANDEGEDARA 118,000 0.324

7 6796 K.S.D. SENAWEERA 80,600 0.221

8 24364 FIRST CAPITAL MARKETS LIMITED/MR.L.K.N.K.KULAWARDENA 50,300 0.138

9 3758 W.S. PERERA 40,100 0.110

10 25649 H.M.C.M. PERERA 40,050 0.110

11 21126 M.A.U. GNANATILAKE 29,100 0.080

12 25539 C.R. SANDANAYAKE 24,013 0.066

13 23996 S.H.T.L. AMARASINGHE 22,600 0.062

14 1413 U.I. SURIYABANDARA 18,782 0.052

1 5 24278 H.M. ARIYADASA 18,350 0.050

16 524 J.R.B. NEDURANA 17,100 0.047

17 22494 A.R. IBRAHIM 13,500 0.037

18 20273 P.A. DAYANANDA 13,200 0.036

19 25794 PRIME LANDS (PVT) LTD 13,150 0.036

20 1451 H.H. ANSARY 11,500 0.032

total no. of shares 33,966,869 93.231

20 MaJoR sHaRe HolDeRs HolDing as at31st March 2010

sHaReHolDeR & investoR inFoRMation (contD.)

golden shareholder

The Golden Share has been allotted to the Secretary to the Treasury for and on behalf of the State of Democratic Socialist Republic of Sri Lanka. The rights attached to the Golden Share are set out in the Articles of Association which are as follows:

1) The Golden Share shall only be held by the Secretary to the Treasury in his official capacity

2) The Golden Shareholder ’s prior written concurrence is required

(a) to amend the definition of the words Golden Share or Golden Shareholder and the Articles setting out specific rights attached to such share

(b) to sub-lease, cede or assign the rights in part or all of the lands assigned to the Company

3) The Golden Shareholder is entitled to

(a) call upon the Directors once in every three months if desired to meet with him or his nominees to discuss matters of the Company of interest to the State

(b) inspect the books of accounts of the Company either by himself or by his nominees with due notice (c) receive within 60 days of the end of every quarter, a quarterly report relating to the performance of the Company(d) receive within 90 days from the end of each financial year, information relating to the Company in a pre-specified

format.


DeFinitions

FINANCIAL TERMS

Accounting policies

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

Borrowings

All interest bearing liabilities.

Capital employed

Total assets less interest free liabilities and provisions.

Cash equivalents

Liquid investments with original maturities of three months or less.

Contingent Liabilities

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

Current ratio

Current assets divided by current liabilities.

Earnings Per Share

Profits attributable to ordinary shareholders divided by the number of ordinary shares in issue.

Effective Tax Rate

Income tax expenses divided by profit from ordinary activities before tax.

Equity

Shareholders’ funds, i.e. stated capital and reserves.

Net Assets Per Share

Shareholders’ funds divided by the number of ordinary shares.

Price Earnings Ratio

Market price of a share divided by earnings per share.

Related parties

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

Return on Shareholder’s Funds

Attributable profits to the shareholders divided by shareholders funds.

Segment

Constituent business units grouped in terms of nature and similarity of operations.

SLAS

Sri Lanka Accounting Standards.

UITF

Urgent Issues Tasks Force of The Institute of Chartered Accountants of Sri Lanka.

Working capital

Capital required to finance the day - to -day operations (current assets minus current liabilities).

NON - FINANCIAL TERMS

COP

The Cost of Production. This generally refers to the Cost of producing a Kilo of produce. (Tea / Rubber / Oil Palm).

Crop

The total produce harvested over a given period of time (usually during a financial year).

Extent in bearing

The extent of land from which crop is being harvested. Also see “mature Plantation”.

Field

An unit extent of land. Estates are divided in to fields in order to facilitate management..

Immature plantation.

The extent of plantation that is under development and not being harvested.

Infilling

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.

Mature plantation

The extent of plantation from which crop is being harvested. Also see “Extent in Bearing”.

NSA

The Net Sales Average. This is the average sale price obtained (over a period of time) after deducting Brokerage fees and cost of Gratis teas.

Replanting

A method of field development where an entire unit of land is taken out of “bearing” and developed by way of uprooting the existing trees, bushes and replanting with new trees / bushes.

Yield

The average crop per unit extent of land over a given period of time (usually kgs.per hectare per year).

Financial teRMs

accounting Policies

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

Borrowings

All interest bearing liabilities.

capital employed

Total assets less interest free liabilities and provisions.

cash equivalents

Liquid investments with original maturities of three months or less.

contingent liabilities

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

current Ratio

Current assets divided by current liabilities.

earnings Per share

Profits attributable to ordinary shareholders divided by the number of ordinary shares in issue.

effective tax Rate

Income tax expenses divided by profit from ordinary activities before tax.

equity

Shareholders’ funds, i.e. share capital and reserves.

net assets Per share

Shareholders’ funds divided by the number of ordinary shares.

Price earnings Ratio

Market price of a share divided by earnings per share.

Related Parties

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

Return on shareholder’s Funds

Attributable profits to the shareholders divided by shareholders funds.segment

Constituent business units grouped in terms of nature and similarity of operations.

slas

Sri Lanka Accounting Standards.

uitF

Urgent Issues Tasks Force of The Institute of Chartered Accountants of Sri Lanka.

working capital

Capital required to finance the day - to -day operations (current assets minus current liabilities).

non - Financial teRMs

coP

The Cost of Production. This generally refers to the Cost of producing a Kilo of produce. (Tea / Rubber / Oil Palm).

crop

The total produce harvested over a given period of time (usually during a financial year).

extent in Bearing

The extent of land from which crop is being harvested. Also see “Immature Plantation”.

Field

An unit extent of land. Estates are divided in to fields in order to facilitate management..

immature Plantation.

The extent of plantation that is under development and is not being harvested.

Infilling

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.

Mature Plantation

The extent of plantation from which crop is being harvested. Also see “Extent in Bearing”.

nsa

The Net Sales Average. This is the average sale price obtained (over a period of time) after deducting Brokerage fees and cost of Gratis teas.

Replanting

A method of field development where an entire unit of land is taken out of “bearing” and developed by way of uprooting the existing trees, bushes and replanting with new trees / bushes.

Yield

The average crop per unit extent of land over a given period of time (usually kgs.per hectare per year).


September 29, 2009 17th Annual General Meeting

November 19, 2009 Half-yearly Accounts as at September 30, 2009 were published

May 20, 2010 Accounts for the year ended March 31, 2010 were published.

August 27, 2010 18th Annual General Meeting

Financial calenDaR 2009/2010


notice oF Meeting

NOTICE is hereby given that the Eighteenth Annual General Meeting of ELPITIYA PLANTATIONS PLC., will be held at the

Auditorium of the Ceylon Chamber of Commerce, No.50 Nawam Mawatha, Colombo 2, at 3.00 p.m. on Friday August 27th, 2010,

for the following purposes:-

v To receive and consider the Annual Report of the Board of Directors together with the Financial Statements of the Company

for the year ended 31st March 2010 and the report of the Auditors thereon.

v To declare a First and Final Dividend as recommended by the Directors

v To re-elect Mr. Malik J Fernando who retires by rotation in terms of Article 92 of the Articles of Association.

v To re-elect Mr. J M S Brito who retires by rotation in terms of Article 92 of the Articles of Association.

v To re-elect Mr. Merrill J Fernando who is over 70 years, as a Director by passing the following resolution.

“That the age limit stipulated in Section 210 of the Companies Act No 7 of 2007 shall not apply to Mr Merrill J Fernando

who has attained the age of 80 years and that he be re-elected a Director of the Company”

v To re-appoint the retiring Auditors, Messrs. Ernst & Young, and authorize the Directors to determine their remuneration.

By order of the Board

Sgd.

aitKen sPence coRPoRate Finance (Pvt) ltD.,

Secretaries

August 2, 2010

Colombo

note:

1. A member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote in his/her stead and a

Form of Proxy is enclosed for this purpose. A Proxy need not be a member of the Company.

2. The completed Form of Proxy must be deposited at the registered office No. 305, Vauxhall Street, Colombo 2, forty – eight

hours before the time fixed for the meeting.

3. Any member or Proxy holder attending the meeting is kindly requested to bring this report.

FoRM oF PRoXY

I/We …………………………………………………………………………………………………………………………..……………......

of……………………………………………………………………………..…………………………….........…..……………………….........

being a member / members of ELPITIYA PLANTATIONS PLC., hereby appoint ...........................................................................................

…………………………………………..……………………..………………………………………….………………........…………………

of ………………………………………….…………………………………….…………………………..................….……… (whom failing)

Joseph Michael Suresh Brito of Colombo (whom failing)

Rohan Marshall Fernando of Colombo (whom failing)

Merrill Joseph Fernando of Colombo (whom failing)

Malik Joseph Fernando of Colombo (whom failing)

Devan Vasantha Hareen de Mel of Colombo (whom failing)

Sumitha Anura Bandara Ekanayake of Colombo (whom failing)

Lalit Nihal de Silva Wijeyeratne of Colombo (whom failing)

Jayamaha Hittihamilage Jayatilaka Jayamaha of Colombo

as my / our Proxy to vote for me/us and on my /our behalf at the Annual General Meeting of the Company to be held on 27th August 2010,

and at any adjournment thereof and at every poll which may be taken in consequence thereof.

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

.....................................

Signature

Note: Instructions as to completion are noted on the reverse hereof.

instRuctions as to coMPletion

Kindly perfect the form of proxy by filling in legibly your full name and address, signing in the

space provided and filling in the date of signature.

If the proxy form is signed by an Attorney, the relative power of attorney should also accompany

the proxy form for registration, if such power of attorney has not already been registered with the

Company.

In the case of a Company/Corporation, the proxy must be under its Common Seal (if required),

which should be affixed and attested in the manner prescribed by its Articles of Association.

The completed form of proxy should be deposited at the Registered Office of the Company,

No. 305 Vauxhall Street, Colombo 2 by 2.00 p.m. on 25th August 2010 being 48 hours before the

time appointed for the holding of the meeting.

ELPL_2009_10

Documents

Transcript of ELPL_2009_10