2016/17...notice is hereby given that the fifty second annual general meeting of muller & phipps...

Muller & Phipps (Ceylon) PLC | Annual Report 2016 / 2017 | 1

2016/17 Rs.’000

2015/16 Rs.’000

Group Turnover 898,607 903,252

Group Profit before Taxation 30,754 41,753

Group Profit after Taxation 21,597 31,778

Shareholders' Funds Group 200,700 219,552

Earnings per Share (Rs.) Group 0.08 0.11

Net Assets per Share (Rs.) Group 0.71 0.78

Market Value per Share 1.10 1.20

FINANCIAL HIGHLIGHTS

Group Turnover

Rs. Mn

2015 2014 2013 0

200

400

600

800

1,000

Year2016 2017

Group Profit / (Loss)Before Taxation

2015 2014 20130

20

40

60

80

Year2016 2017

Rs. Mn

Year

Net Assets per Share

2015 2014 2013 0

0.10

0.400.500.600.700.80

0.30 0.20

2016 2017

Rs.

0.02

0.080.100.120.140.160.18

0.060.04

2015 20142013 0 Year

2016 2017

Dividend per Share

Rs.

Return on Equity

5.00%

20.00%25.00%30.00%35.00%40.00%

15.00%10.00%

2015 20142013 0 Year

2016 2017

%

0.02

0.080.100.120.140.160.18

0.060.04

Earnings per Share

2015 20142013 0 Year

2016 2017

Rs.

2 | Muller & Phipps (Ceylon) PLC | Annual Report 2016 / 2017

NOTICE OF MEETING

Notice is hereby given that the Fifty Second Annual General Meeting of Muller & Phipps (Ceylon) PLC will be held at the Grand Oriental Hotel, No. 2, York Street, Colombo 01, on 30th August 2017 at 3.00 p. m. for the following purposes:

1. To receive and consider the Annual Report of the Board of Directors and the Statements of Accounts for the year ended 31st March 2017 with the Report of the Auditors thereon.

2. To re-elect as a Director, Dr. A.M. Mubarak who retires in accordance with Articles 83 & 84 of the Articles of Association.

3. To reappoint Mr. P. Pathmarajah who is over seventy years of age as a Director.

A Special Notice has been received from a shareholder of the intention to pass a Resolution which is set out below in relation to his reappointment (see Note No.4 below).

4. To reappoint Mr. R. N. Bopearatchy who is over seventy years of age as a Director.

A Special Notice has been received from a shareholder of the intention to pass a Resolution which is set out below in relation to his reappointment (see Note No. 5 below).

5. To reappoint Mr. A. R. Rasiah who is over seventy years of age as a Director.

A Special Notice has been received from a shareholder of the intention to pass a Resolution which is set out below in relation to his reappointment (see Note No. 6)

6. To reappoint Mr. S. N. P. Palihena who has attained the age of seventy years as a Director

A Special Notice has been received from a shareholder of the intention to pass a Resolution which is set out below in relation to his reappointment (see Note No. 7)

7. To reappoint as Auditors, KPMG, and authorize the Directors to determine their remuneration.

By Order of the Board

CORPORATE MANAGERS & SECRETARIES (PRIVATE) LIMITED.SecretariesColombo

25th July 2017.

Notes :

1. A member of the Company who is entitled to attend and vote may appoint a proxy to attend and vote instead of him or her. A proxy need not be a member of the Company.

2. A Form of Proxy is enclosed with this Report.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company’s Secretaries at No. 8-5/2, Leyden Bastian Road, York Arcade Building, Colombo 1, not less than forty eight hours before the time fixed for the meeting.

4. A Special Notice has been received by the Company from a shareholder giving notice of the intention to move the following Resolution as an Ordinary Resolution at the Annual General Meeting:

Resolved –

“That Mr. P. Pathmarajah who is seventy three years of age be and is hereby reappointed a Director of the Company and it is further specially declared that the age limit of seventy years referred to in Section 210 of the Companies Act No.7 of 2007 shall not apply to the said Director, Mr. P. Pathmarajah.”


Resolved –

“That Mr. R. N. Bopearatchy, who is seventy six years of age, be and is hereby reappointed a Director of the Company and it is further specially declared that the age limit of seventy years referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Director, Mr. R. N. Bopearatchy.”


Resolved –

“That Mr. A. R. Rasiah who is seventy one years of age, be and is hereby reappointed a Director of the Company and it is further specially declared that the age limit of seventy years referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Director, Mr. A. R. Rasiah.”


Resolved –

“That Mr. S. N. P. Palihena who has attained the age of seventy years, be and is hereby reappointed a Director of the Company and it is further specially declared that the age limit of seventy years referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Director, Mr. S. N. P. Palihena.”


CHAIRMAN’S REVIEW

I have great pleasure in welcoming you to the Fifty Second Annual General Meeting of the company and on behalf of the Board of Directors present the Annual Report and Audited Financial performance of the Company and its subsidiary for the year ended 31st March 2017.

The Group recorded a turnover of Rs. 898.6 Mn for the year under review, reflecting a decrease of 0.5% over the previous year’s turnover of Rs. 903.3 Mn. A profit before tax of Rs. 30.7 Mn was achieved while in the previous year the profit before tax was Rs. 41.7 Mn. The decrease in turnover was mainly due to the ceiling of prices on certain pharmaceutical products imposed by the Government. The Group profits are lower when compared with the previous year due to exchange loses and increase in interest cost.

The Company’s finances continue to be in a strong position. The excess funds available to the Company are judiciously invested to meet the future funding requirements of new agencies that are being negotiated and also to meet other proposed investments in the pharmaceutical sector.

Your Directors have paid an interim dividend of 7 cents. per share for the year ended 31st March 2017, in keeping with the Company’s earnings.

In conclusion, I wish to thank all our employees in the Group for their dedication and hard work and to all our other stakeholders for their continuing support and confidence in the Company. I thank my colleagues on the Board for their invaluable counsel at all times.

S. D. R. ArudpragasamChairman

Colombo25th July 2017


Mr. S. D. R. Arudpragasam – Chairman

FCMA (UK)

S. D. R. Arudpragasam joined the Board and was appointed Chairman in the year 2000. He serves as Chairman of several subsidiaries of The Colombo Fort Land & Building PLC. He holds the positions of Deputy Chairman on the Boards of The Colombo Fort Land & Building PLC (CFLB) and Lankem Ceylon PLC.

Mr. Arudpragasam also functions as Managing Director of E.B. Creasy & Co. PLC in addition to serving on the Boards of other Companies within the CFLB Group.

Mr. P. Pathmarajah – Director

Mr. P. Pathmarajah was appointed to the Board in 1995.He has extensive experience in promoting/marketing pharmaceutical products. From 1993 to 2014 he had been responsible for the operation of the subsidiary Pettah Pharmacy (Private) Limited and now functions as a Director/Consultant for that Company.

Mr. R. C. A. Welikala – Director

Mr. R. C. A. Welikala was appointed to the Board in 2006. He has extensive experience in marketing of fast moving consumer goods and has successfully developed key brands in the E. B. Creasy Group to market leadership positions. He also serves on several Boards of The Colombo Fort Land and Building Group.

Mr. R. N. Bopearatchy – Director

B.Sc. (Cey), Dip. BM, MBA (Univ. of Col.)

Mr. R. N. Bopearatchy was appointed to the Board in 2006. He has considerable expertise in product development, manufacturing and marketing of pesticides, pharmaceuticals and consumer products. Soon after graduation he was employed in Research in the Plant Pathology Division of the Tea Research Institute and subsequently joined Chemical Industries Colombo Limited, and was appointed to its Board.

He also served on the Boards of Crop Management Services (Pvt) Ltd, the Managing Agents for Mathurata Plantations Ltd., CIC Fertilizers Ltd. and Cisco Specialty Packaging (Pvt) Ltd.

He has held office as the President of the Pesticide Association of Sri Lanka, the Toxicological Society of Sri Lanka and the International Mosquito Spiral Manufactures Association (IMSMA). Mr. Bopearatchy currently holds several other Directorships within The Colombo Fort Land & Building Group.

Mr. P. M. A. Sirimane – Director

FCA, MBA

Mr. P. M. A. Sirimane joined the E.B. Creasy Group in October, 2009 and was appointed to the Board of Muller & Phipps (Ceylon) PLC in October, 2011. Amongst other senior positions he has functioned as Managing Director/CEO of Mercantile Leasing Ltd., Group Finance Director of United Tractor & Equipment Ltd., Chief Financial Officer, Sri Lanka Telecom Ltd. and Director SLT Hong Kong Ltd.

He has served as a Member of several Committees of the Institute of Chartered Accountants of Sri Lanka and was an ex-officio member of the International Leasing Association. Mr. Sirimane serves on the Board of E.B. Creasy & Company PLC and some of its subsidiaries. He also holds several other Directorships.

Mr. A. R. Rasiah – Director

B.Sc. (Cey.), FCA

Mr. A. R. Rasiah was appointed to the Board as an Independent Non-Executive Director on 2nd May, 2013. He possesses well over 40 years of experience in Finance at a very senior level both internationally and locally.

He currently serves on certain Boards of the E B Creasy Group and on some of the Boards of the Hotels Sector of The Colombo Fort Land & Building Group, Ceylon Cold Stores PLC, Hela Clothing Co. Ltd. and MTD Walkers PLC.

BOARD OF DIRECTORS


He is a former (retired) Finance Director of Nestle (Lanka) PLC. He has been a past visiting lecturer on Finance and Accounts for Nestle SA for Africa-Asian and Oceanic Regions.

Mr. Rasiah is the Chairman of Ceylon Pencil Company Ltd. and a past lecturer for MBA students on Finance at the Postgraduate Institute of Management (PIM). He is a former President of the Benevolent Society of the Institute of Chartered Accountants of Sri Lanka and Vice President of Sri Lanka Institute of Directors.

Mr. S. N. P. Palihena – Director

FCIB (U.K.), FIB (SL), Post Grad. Dip. Bus. & FA

Mr. S. N. P. Palihena was appointed to the Board as an Independent Non-Executive Director on 2nd May, 2013. In addition to serving on the Board of E.B. Creasy & Company PLC and some of its subsidiaries, he also serves on the Board of a subsidiary of The Colombo Fort Land & Building PLC.

He was a former Chief Executive Officer/General Manager of Bank of Ceylon and has had a distinguished banking career spanning almost forty years at the Bank of Ceylon. He has also worked at the National Development Bank of Sri Lanka for a period of over three years. Mr. Palihena is a former Director of the DFCC Bank.

Dr. A. M. Mubarak - Director

B.Sc. (Hons.) Ph. D. (Cantab)

Dr. A. M. Mubarak was appointed to the Board as an Independent Non – Executive Director on 2nd September 2013. Dr. Mubarak, a former Director and Chief Executive Officer of the Industrial Technology Institute, has more than 25 years of experience in Research & Development.

Dr. Mubarak graduated from the University of Colombo with first class honours in Chemistry and holds a Ph. D. from the University of Cambridge U.K.

He did his Post-doctoral research at the University of Maryland, College Park Campus and Royal Institute of Technology, Stockholm. Dr. Mubarak a Commonwealth Scholar is a former President of the Institute of Chemistry, Ceylon and Past General President of the Sri Lanka Association for the Advancement of Science and the current President of the National Academy of Sciences, of Sri Lanka.

Dr. Mubarak had served in many Presidential and Ministerial Task Forces dealing with Science & Technology and had been an active member of Sri Lanka Delegations in several bilateral discussions with India on S&T co-operation.

He has served on the Boards/Councils of the University of Colombo, Post Graduate Institute of Science, Sri Lanka Institute of Advance Technological Education, National Engineering Research & Development Centre, Sri Lanka Accreditation Board, National Science and Technology Commission and National Authority, Chemical Weapons Convention. Currently he is on the Board of Rehabilitation of Persons, Properties and Industries Authority (REPPIA).


Corporate Governance is the mechanism by which companies are managed and directed with the objective of balancing and attaining the corporate objectives, the alignment of corporate behaviour within the expectations of the law and society and the accountability to shareholders and the responsibility to other recognized stakeholders.

BOARD

CompositionThe Board of Muller & Phipps (Ceylon) PLC comprises of eight Non-Executive Directors including the Chairman and three Independent Directors. They are equipped with a balance of skill and experience and together they provide strategic direction to the Company.

Mr. S. D. R. Arudpragasam - Non-Executive Director (Chairman)

Mr. P. Pathmarajah - Non-Executive Director

Mr. R. C. A. Welikala - Non-Executive Director

Mr. R. N. Bopearatchy - Non-Executive Director

Mr. P. M. A. Sirimane - Non-Executive Director

Mr. A. R. Rasiah - Independent Non-Executive Director

Mr. S. N. P. Palihena - Independent Non-Executive Director

Dr. A. M Mubarak - Independent Non-Executive Director

The Non-Executive Directors have submitted declarations of their Independence/Non Independence to the Board.

Although Messrs. A. R. Rasiah, S. N. P. Palihena and Dr. A. M. Mubarak serve on the Boards of E. B. Creasy & Co. PLC (EBC PLC), Parent Company and some of its subsidiaries and a majority of the Directors of the Company are on the Boards of EBC PLC and its subsidiaries, the Board after taking into consideration all other circumstances listed in the Rules pertaining to the Criteria for defining Independence, is of the opinion that Messrs. A. R. Rasiah, S. N. P. Palihena and Dr. A. M. Mubarak are nevertheless Independent.

Decision Making of the BoardIn addition to Board Meetings, matters are referred to the Board and decided by Resolutions in writing. The interim and annual Financial Statements are approved by the Board. Management Accounts and progress reports are also reviewed and approvals relating to the Annual Budgets, Capital Expenditure and new Investment are granted after consideration.

Appointment and Re-election of DirectorsThe Board as a whole decides on the appointment of Directors in accordance with the Articles of Association of the Company and in compliance with the rules on governance.

Details of new appointments to the Board are made available to the Shareholders by making announcements to the Colombo Stock Exchange.

In terms of the Articles of Association a Director appointed by the Board holds office until the next Annual General Meeting, at which he seeks re-election by the Shareholders. The Articles require that one –third of the Directors retire at each Annual General Meeting. The Directors to retire are those who have been longest in office since their last election. Retiring Directors are eligible for re-election.

Remuneration Committee

The Company’s Remuneration Committee comprises of Mr. A. R. Rasiah, Chairman, Mr. S. N. P. Palihena, Independent /Non-Executive Director and Mr. S. D. R. Arudpragasam, Non-Executive Director.

The Committee is responsible for recommending remuneration packages for the key management and senior management personnel. In addition they lay down guidelines and parameters for the compensation structure of the management staff.

The primary objective of compensation packages is to attract, motivate and retain qualified and experienced personnel and reward performance in a fair manner.

CORPORATE GOVERNANCE


Company Secretaries and Independent Professional Advice

The Company and all the Directors may seek advice from Corporate Managers and Secretaries (Pvt) Ltd., who are qualified to act as Secretaries as per the provisions of the Companies Act No. 7 of 2007. Advice is also sought from independent external professionals whenever the Board deems it necessary.

Independent JudgmentThe Board is committed to exhibit high standards of integrity and independence of judgment. Each Director dedicates the time and effort necessary to carry out his responsibilities.

Financial AcumenThe Directors are from varied business and professional backgrounds. Their expertise enables them to exercise independent judgement and their views carry substantial weight in decision making. The Board includes three finance Professionals who possess the necessary knowledge to offer guidance on matters of finance.

Supply of InformationThe Directors are provided with an Agenda, Minutes and relevant Board Papers prior to Board Meetings. Minutes of all the Meetings are properly recorded and circulated amongst the Directors.

Constructive use of the Annual General Meeting / General MeetingsThe Board considers the Annual General Meeting / General Meetings an opportunity to communicate with Shareholders and encourages their participation. Questions raised by the Shareholders over the content of the Annual Report as well as other matters pertaining to the Company, are answered and an appropriate dialogue is maintained with them.

Major TransactionsThere have been no transactions during the year under review which falls within the definition of ‘Major Transactions’ as set out in the Companies Act.

Financial ReportingThe Board of Directors considers the timely publication of its Annual and Quarterly Financial Statements as a high priority. These publications include financial and non-financial information in order to facilitate the requirements of the existing and potential shareholders. The Financial Statements are prepared in accordance with the Sri Lanka Accounting Standards.

Internal ControlThe Board is satisfied with the effectiveness of the system of internal controls for the period up to the date of signing the Financial Statements.

Audit CommitteeThe Audit Committee comprises of Mr. A. R. Rasiah, Chairman – Independent Non-Executive Director, Mr. S. N. P. Palihena, Independent Non-Executive Director and Mr. A. M. de S. Jayaratne Independent Non-Executive Director of the Parent Company, E. B. Creasy & Company PLC.

The Audit Committee Report is set out on page 8.

Related Party Transaction Review CommitteeThe report of the Related Party Transaction Review Committee Report is set out on pages 10.


The Committee has scrutinized the quarterly accounts and the accounts for the year ended 31st March, 2017.

Meetings and AttendanceThe Audit Committee has met on four occasions during the year ended 31st March, 2017.

The Attendance of the committee was as follows:

Mr. A. R. Rasiah 3/4

Mr. S. N. P. Palihena 4/4

Mr. A. M. de S. Jayaratne 4/4

Other members of the Board and Senior management personnel of the Company were present at discussions where appropriate. The proceedings of the Audit Committee are reported to the Board of Directors.

External AuditThe Company has appointed KPMG as its external Auditor and the service provided by them are segregated between audit/assurance services and other advisory services.

The Audit Committee has determined that KPMG Auditors are independent on the basis that they do not carry out any management related functions of the Company. The Audit Committee also reviews the professional fees of the External Auditors.

The Audit Committee has concurred to recommend to the Board of Directors the re-appointment of KPMG as Auditors for the financial year ending 31st March 2018, subject to the approval of the shareholders at the Annual General Meeting. The Fee to be agreed upon by the Directors.

The audit committee report focuses on the activities of the Company for the year under review, which the committee has reviewed and monitored as to provide additional assurance on the reliability of the Financial Statement through a process of independent and objective views.

CompositionThe Audit Committee comprises of two Independent Non – Executive Directors of the Company and an Independent Non- Executive Director of the Parent Company, E.B. Creasy & Company PLC (EBC PLC)

The names of the members are set out below:

Mr. A. R. Rasiah Chairman (Independent Non-Executive Director - Muller & Phipps (Ceylon) PLC)

Mr. S. N. P. Palihena Member (Independent Non-Executive Director - Muller & Phipps (Ceylon) PLC)

Mr. A. M. de S. Jayaratne Member (Independent Non-Executive Director –E .B. Creasy & Company PLC)

The members have varied experience, financial knowledge and business acumen to carry out their role effectively and efficiently. Two of the members are finance professionals, including the Chairman.

The Company’s Secretaries, Corporate Managers and Secretaries (Pvt) Ltd. functions as the Secretaries to the Audit Committee.

Role of the Audit CommitteeThe Committee provides assistance to the Board of Directors in fulfilling its responsibility to the Shareholders and other Stakeholders relating to the Company’s financial statements and the financial reporting process to ensure that the financial reporting system is in adherence with the Sri Lanka Accounting Standards and other regulatory and statutory requirements. It also reviews the adequacy of internal controls and the business risks.

AUDIT COMMITTEE REPORT


ConclusionThe Audit Committee is of the view that adequate controls are in place to safeguard the Company’s assets and that the financial position and the results disclosed in the audited accounts are free from any material misstatements.

A. R. Rasiah

Chairman

Audit Committee

25th July 2017


RELATED PARTY TRANSACTIONS REVIEW COMMITTEE REPORT

The Related Party Transactions Review Committee is entrusted with the responsibility of ensuring that Shareholders’ interests are protected in all related party transactions.

CompositionThe Related Party Transactions Review Committee of the Parent Company, E.B. Creasy & Company PLC (EBCPLC) functions as the Company’s Related Party Transactions Review Committee which comprises of the following members:

Mr. R. Seevaratnam - Chairman- Independent Non-Executive Director, EBC PLC

Mr. A. M. de S. Jayaratne- Member- Independent Non-Executive Director, EBC PLC

Mr. A. R. Rasiah - Member- Independent Non-Executive Director, EBC PLC

Mr. P. M. A. Sirimane - Member- Executive Director, EBC PLC

The Company’s Secretaries, Corporate Managers & Secretaries (Private) Limited. functions as the Secretaries to the Related Party Transactions Review Committee.

Meetings of the Committee The Related Party Transactions Review Committee has met on 3 occasions in respect of Muller & Phipps (Ceylon) PLC during the year ended 31st March 2017 and the attendance was as follows:

Mr. R. Seevaratnam - 3/3

Mr. A. M. de. S. Jayaratne - 3/3

Mr. A. R. Rasiah - 2/3

Mr. P. M. A. Sirimane - 3/3

Functions of the Committee:* Review all proposed Related Party Transactions

(Except for exempted transactions)

* Direct the transactions for Board approval / Shareholder approval as deemed appropriate

* Obtain updates on previously reviewed Related Party Transactions from Senior Management and approve any material changes

* Establish guidelines for Senior Management to follow in ongoing dealings with related parties.

* Review and assess on an Annual basis the transactions for Compliance against the Committee guidelines.

ConclusionThe Related Party Transactions Review Committee has reviewed the Related Party Transactions entered into during the financial year under review and has communicated it’s comments and observations to the Board of Directors.

Related Party Transactions will be reviewed and disclosed in a manner consistent with the Listing Rules. The Committee is free to seek external professional advice on matters within their purview when necessary.

The Board of Directors have also declared in the Annual Report that there were no recurrent or non-recurrent related party transactions which exceeded the respective thresholds mentioned in Section 9 of the Colombo Stock Exchange Listing Rules and that the Company has complied with the requirements of the Listing Rules on Related Party Transactions.

R. SeevaratnamChairman

Related Party Transactions Review Committee

25th July 2017


ANNUAL REPORT OF THE BOARD OF DIRECTORS

The Board of Directors of Muller & Phipps (Ceylon) PLC present their Report on the Affairs of the Company together with the Audited Financial Statements for the year ended 31st March 2017.

The details set out herein provide the pertinent information required by the Companies Act No. 7 of 2007, and the Colombo Stock Exchange Listing Rules and are guided by recommended best practices.

PRINCIPAL ACTIVITIES / BUSINESS REVIEWThe Company serves as the Holding Company of its wholly owned subsidiary, Pettah Pharmacy (Pvt) Ltd. which is serving as an agent representative in Sri Lanka for foreign Pharmaceutical Companies and operates in importing wholesale and distribution of pharamaceuticals. The Chairman’s Review together with the financial statements reflect the state of affairs of the Company.

The Directors to the best of their knowlege and belief confirm that the Company has not engaged in any activities that contravene laws and regulations.

Financial StatementsThe Financial Statements of the Company are given on pages 15 to 48.

Auditors’ ReportThe Auditors’ Report on the Financial Statements is given on Page 14.

Accounting PoliciesThe Accounting Policies adopted in the preparation of the Financial Statements are given on pages 19 to 29. There were no changes in the Accounting Policies adopted.

INTEREST REGISTER

Directors’ Interest in transactionsThe Directors have made general disclosures as provided for in Section 192(2) of the Companies Act No. 7 of 2007. Arising from this, details of contracts in which they have

an interest are disclosed in Note 29.1 to the financial statements on page 46.

Directors’ Interest in SharesDirectors of the Company who have an interest in the shares of the Company are required to disclose their shareholdings and any acquisitions/ disposals to the Board in compliance with Section 200 of the Companies Act No. 7 of 2007. However none of the Directors held any shares during the period under review nor in the previous year.

Directors’ RemunerationKey Management Personnel Compensation in respect of the Company and the Group for the financial year 2016/ 2017 is detailed in Note 29.1.2 to the Financial Statements on page 46 .

DirectorateThe names of the Directors who held office during the financial year are given below and profiles on page 4 &5.

Mr. S. D. R. Arudpragasam - Chairman

Mr. P. Pathmarajah - Director

Mr. R. C. A. Welikala - Director

Mr. R. N. Bopearatchy - Director

Mr. P. M. A. Sirimane - Director

Mr. A. R. Rasiah - Director

Mr. S. N. P. Palihena - Director

Dr. A. M. Mubarak - Director

In terms of Article 83 & 84 of the Articles of Association Dr. A.M. Mubarak retires by rotation and being eligible offers himself for re-election.

Mr. P. Pathmarajah who is over seventy years of age offers himself for reappointment under and virtue of a Special Notice received from a shareholder of the Company which is referred to in the Notice of Meeting.

Mr. R. N. Bopearatchy who is over seventy years of age offers himself for reappointment under and virtue of


ANNUAL REPORT OF THE BOARD OF DIRECTORS Contd.

a Special Notice received from a shareholder of the Company which is referred to in the Notice of Meeting.

Mr. A. R. Rasiah who is over seventy years of age offers himself for reappointment under and virtue of a Special Notice received from a shareholder of the Company which is referred to in the Notice of Meeting.

Mr. S. N. P. Palihena who has attained the age of seventy years, offers himself for reappointment under and by virtue of a Special Notice received from a shareholder of the Company which is referred to in the Notice of Meeting.

AUDITORSThe Financial Statements of the Company for the year have been audited by Messrs KPMG the retiring Auditors who have expressed their willingness to continue as Auditors of the Company and are recommended for reappointment. A resolution to reappoint them and to authorize the Directors to determine their remuneration will be proposed at the Annual General Meeting.

The Auditors, KPMG were paid Rs.266,000/- (2016 – Rs.248,000/-) as audit fees & fees for audit related services by the Company during the year under review. In addition the Group Companies are engaged with other audit firms. Audit fees in respect of these firms amounted to Rs. 555,400/- during the year under review (2016 – Rs. 505,000/-). Further, those other Auditors were paid Rs. 124,200 as the Non Audit Services fee during the year (2016- Rs. 112,900/-).

As far as the Directors are aware the Auditors do not have any relationship (other than that of an Auditor) with the Company. The Auditors do not have any interests in the Company.

REVENUEThe revenue of the Group for the year was Rs. 898.6 million. (2015/2016 – Rs. 903.3 million)

RESULTSThe Group made a Profit before Tax Expense of Rs.31 million, against a Profit of Rs. 41.8 million in the previous year. The detailed results are given in the Income Statement on page 15.

DIVIDENDSAn Interim Dividend of Rs. 0.07 per share was paid on 29th March, 2017.

The Board of Directors confirmed that the Company satisfied the Solvency test requirement under Section 56 of the Companies Act No. 07 of 2007 and obtained a Solvency Certificate from the Auditors in respect of the above Dividend.

PROPERTY, PLANT & EQUIPMENTInformation relating to movement in Property, Plant & Equipment is given in Note 12 to the Financial Statements.

STATED CAPITAL In compliance with the Companies Act No. 7 of 2007, the Financial Statements reflect the Stated Capital of the Company. The stated capital is the total of all amounts received by the Company in respect of the issue of shares.

The Stated Capital of the Company as at 31st March 2017 is Rs. 83,000,000/- and is represented by 283,000,000 Ordinary Shares.

RESERVESThe total reserves of the Group as at 31st March 2017 amounted to Rs. 117.7 Million comprising General Reserves of Rs. 5 Million, Capital Reserves of Rs. 0.4 Million, AFS Reserves of Rs. 5.1 million and Retained Earnings of Rs. 107.1 million.

The movements are shown in the Statement of Changes in Equity in the Financial Statements on page 17.

TAXATIONThe 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 provision of the Inland Revenue Act No. 10 of 2006 and amendments thereto. Relevant details have been disclosed in Note 09 to these Financial Statements.


RELATED PARTY TRANSACTIONSDuring the financial year there were no re-current or non-recurrent related party transactions which exceeded the respective thresholds mentioned in Section 9 of Colombo Stock Exchange Listing Rules on Related Party Transactions. The Related Party Transactions presented in the financial statements are disclosed in Note 19 on page 38.

SHARE INFORMATIONInformation relating to earnings, dividend, net assets, market value per share and share trading is given on pages 49 and 50.

EVENTS OCCURRING AFTER THE REPORTING DATENo circumstances have arisen since the reporting date that would require adjustments to or disclosures in the Financial Statements.

CAPITAL COMMITMENTS AND CONTINGENT LIABILITIESCapital expenditure commitments and contingent liabilities as at the date of the Balance Sheet have been disclosed in Note 27and 30 in the Financial Statements.

EMPLOYMENT POLICYThe Company recruitment and employment policy is non – discriminatory. The number of persons employed by the Company at the year end was 82 (2015/16– 78).

SHAREHOLDERSThe Company has made all endeavours to ensure equitable treatment to all shareholders.

STATUTORY PAYMENTSThe Directors to the best of their knowledge and belief are satisfied that all statutory payments of the Company due in relation to employees and the Government have been made.

ENVIRONMENTAL PROTECTIONThe Company’s business activities can have direct and indirect effects on the environment. It is the Company’s policy to minimize any adverse effects its activities have on the environment and promote co-operation and compliance with the relevant authorities and regulations. We confirm that the Company has not undertaken any activities which have caused or are likely to cause detriment to the environment.

GOING CONCERNAs noted in the Financial Statement on page 19 the Directors have adopted the going concern basis in preparing Financial Statements.

For and on behalf of the Board,

R. N. Bopearatchy R. C. A. WelikalaDirector Director

By Order of the Board

Corporate Managers & Secretaries (Private) Limited.Secretaries25th July 2017


TO THE SHAREHOLDERS OF MULLER & PHIPPS (CEYLON) PLC

Report on the Financial StatementsWe have audited the accompanying financial statements of Muller & Phipps (Ceylon) PLC, (“the Company”), and the consolidated financial statements of the Company and its subsidiary (“the Group”), which comprise the statement of financial position as at 31st March 2017, and the statement of profit or loss and other comprehensive income, statement of changes in equity and, statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information set out on pages 15 to 48 of the annual report.

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

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Sri Lanka Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

of accounting estimates made by the Board, as well as evaluating the overall presentation of the consolidated financial statements.

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

OpinionIn our opinion, the consolidated financial statements give a true and fair view of the financial position of the Company and its subsidiary dealt with thereby as at 31st March 2017, and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

Report on Other Legal and Regulatory RequirementsAs required by section 163 (2) of the Companies Act No. 07 of 2007, we state the following:

a) The basis of opinion and scope and limitations of the audit are as stated above.

b) In our opinion:

- we have obtained all the information and explanations that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the Company,

- The financial statements of the Company give a true and fair view of its financial position as at 31st March 2017, and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards,

- The financial statements of the Company, and the Group comply with the requirements of sections 151 and 153 of the Companies Act No. 07 of 2007.

Chartered Accountants Colombo

25th July 2017

INDEPENDENT AUDITORS’ REPORT


Group Company

For the year ended 31st March, 2017 2016 2017 2016

Notes Rs.'000 Rs.'000 Rs.'000 Rs.'000

Revenue 5 898,607 903,252 2,000 2,000

Cost of Sales (726,099) (727,370) - -

Gross Profit 172,508 175,882 2,000 2,000

Other Income 6 15,835 8,488 23,842 171

Administrative Expenses (122,833) (116,713) (4,295) (4,476)

Distribution Expenses (16,655) (16,963) - -

Profit from Operations 48,855 50,694 21,547 (2,305)

Finance Income 7.1 13,068 10,058 14,035 13,366

Finance Expenses 7.2 (31,312) (8,599) - -

Other Financial Items 7.3 143 (10,400) - -

Net Financing Income / (Expenses) 7.4 (18,101) (8,941) 14,035 13,366

Profit Before Income Tax Expense 8 30,754 41,753 35,582 11,061

Income Tax Expense 9 (9,157) (9,975) (816) (650)

Profit for the Year 21,597 31,778 34,766 10,411

Other Comprehensive Income

Remeasurement of Retirement Benefit Obligation 293 (78) - -

Net Change in Fair Value of Available for Sale Financial Asset (1,040) 1,154 (1,034) 1,166

Deferred Tax on Remeasurement of Retirement Benefit Obligation (82) 14 - -

Total Other Comprehensive Income for the Year, net of tax (829) 1,090 (1,034) 1,166

Total Comprehensive Income for the Year 20,768 32,868 33,732 11,577

Earnings per Share (Rs.) 10 0.08 0.11 0.12 0.04

Dividend per Share (Rs.) 11 0.14 0.07 0.14 0.07

The Accounting Policies and Notes form an intergral part of these Financial Statements.

Figures in brackets indicate deductions.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


Group CompanyAs at 31st March, 2017 2016 2017 2016

Notes Rs.'000 Rs.'000 Rs.'000 Rs.'000 ASSETS Non-Current AssetsProperty, Plant & Equipment 12 5,305 5,734 - 38 Intangible Assets 13 136 182 - - Investments in Subsidiaries 14 - - 38,897 38,897 Financial Assets Available for Sale 15 78,096 79,454 61,488 62,522 Deferred Tax Asset 16 771 647 - - Total Non-Current Assets 84,308 86,017 100,385 101,457 Current AssetsInventories 17 232,334 221,811 - - Trade and Other Receivables 18 327,406 313,339 20 20Amounts due from Related Companies 19 61,724 55,597 77,550 70,910Financial Assets Held to Maturity 20 - 5,005 - - Income Tax Recoverable 2,316 - - -Cash and Cash Equivalent 21 3,177 3,925 1,258 3,092 Total Current Assets 626,957 599,677 78,828 74,022 Total Assets 711,265 685,694 179,213 175,479 EQUITY AND LIABILITIES EquityStated Capital 22 83,000 83,000 83,000 83,000 Reserves 23 117,700 136,552 84,960 90,848 Equity Attributable to Equity Holders of the Company 200,700 219,552 167,960 173,848 Non-Current LiabilitiesRetirement Benefit Obligations 24 6,917 6,118 - -Total Non-Current Liabilities 6,917 6,118 - -Current LiabilitiesTrade and Other Payables 25 8,828 5,634 1,666 1,512Income Tax payable 179 1,165 179 119 Interest Bearing Borrowings 26 422,470 430,228 - - Bank Overdraft 21 72,171 22,997 9,408 - Total Current Liabilities 503,648 460,024 11,253 1,631 Total Equity & Liabilities 711,265 685,694 179,213 175,479

The Accounting Policies and Notes form an integral part of these Financial Statements. I Certify that the Financial Statements of the Company have been prepared in compliance with the requirements of the Companies Act No. 07 of 2007.

P. M. A. SirimaneChief Financial Officer

The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Approved and signed for and on behalf of the Board of Muller & Phipps (Ceylon) PLC.

R. N. Bopearatchy R. C. A. WelikalaDirector Director

25th July 2017, Colombo

STATEMENT OF FINANCIAL POSITION


Stated Capital

General Reserve

Capital Reserve

AFS Reserve

Retained Earnings

Total

Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000

Group

Balance as at 1st April 2015 83,000 5,000 401 5,011 113,082 206,494

Profit for the Year - - - - 31,778 31,778

Other Comprehensive Income for the Year - - - 1,154 (64) 1,090

Dividend Paid - - - - (19,810) (19,810)

Balance as at 31st March 2016 83,000 5,000 401 6,165 124,986 219,552


Other Comprehensive Income for the Year - - - (1,040) 211 (829)

Dividend Paid - Final 2015/16 - - - - (19,810) (19,810)

Dividend Paid - Interim 2016/17 - - - - (19,810) (19,810)


Company

Balance as at 1st April 2015 83,000 5,000 401 3,702 89,978 182,081


Other Comprehensive Income for the Year - - - 1,166 - 1,166

Dividend Paid - - - - (19,810) (19,810)



Other Comprehensive Income for the Year - - - (1,034) - (1,034)

Dividend Paid - Final 2015/16 - - - - (19,810) (19,810)

Dividend Paid - Interim 2016/17 - - - - (19,810) (19,810)


The Accounting Policies and Notes form an integral part of these Financial Statements.


STATEMENT OF CHANGES IN EQUITY


Group CompanyFor the year ended 31st March, 2017 2016 2017 2016

Note Rs.'000 Rs.'000 Rs.'000 Rs.'000 Cash Flows from Operating ActivitiesProfit Before Taxation 30,754 41,753 35,582 11,061 Adjustments for : Depreciation on Property, Plant & Equipment 1,168 1,184 38 5 Amortization of Intangible Assets 197 46 - - Provision for Retirment Benefit Obligation 1,879 1,691 - - Interest Expense 31,312 8,599 - - Gain / Loss on Conversion of Foreign Currency (143) 10,400 - - Interest Income (13,068) (10,058) (14,035) (13,366)Loss on Available for sale Financial Assets 319 669 - -Loss / (Profit) on Sale of Property, Plant & Equipment (8) 28 - - Dividend Income (217) (171) (23,842) (171)Operating Profit / (Loss) Before Working Capital Changes 52,193 54,141 (2,257) (2,471)(Increase) / Decrease in Inventories (10,523) (53,408) - - (Increase) / Decrease in Trade & Other Receivables (14,067) (177,803) - - (Increase) / Decrease in Amount Due from Related Companies (6,127) 16,431 (6,641) 1,118 Increase / (Decrease) in Trade & Other Payables 2,886 (8,978) (298) (26)Increase / (Decrease) in Amount Due to Related Companies - (1) - (1)Cash Generated from / (Used in) Operations 24,362 (169,618) (9,197) (1,380)WHT Paid (2,625) (25) - -Interest Paid (31,312) (8,599) - - Gratuity Paid (787) - - - Income Tax Paid (10,039) (18,365) (756) (797)Net Cash Inflows / (Outflows) from Operating Activities (20,402) (196,607) (9,953) (2,177)Cash Flows from Investing ActivitiesPurchase of Property, Plant & Equipment (780) (883) - - Purchase of Intangible Assets (153) - - -Proceeds from Sale of Property, Plant & Equipment 48 192 - - Dividend Received 217 171 23,842 171 Interest Received 13,068 10,042 14,035 13,350 Investments / Disposal in Financial Assets 5,005 (6,002) - (3,986)Net Cash Inflows / (Outflows) from Investing Activities 17,405 3,520 37,877 9,535 Cash Flows from Financing ActivitiesNet Proceeds from Borrowings (7,758) 218,677 - - Dividend Paid (39,167) (19,394) (39,167) (19,393)Net Cash Inflows / (Outflows) from Financing Activities (46,925) 199,283 (39,167) (19,393)Increase / (Decrease) in Cash & Cash Equivalent (49,922) 6,196 (11,243) (12,035)Cash & Cash Equivalent at the Beginning of the Year (19,072) (25,268) 3,092 15,127 Cash & Cash Equivalent at the End of the Year 21 (68,994) (19,072) (8,150) 3,092

The Accounting Policies and Notes form an integral part of these Financial Statements.


STATEMENT OF CASH FLOWS


1. REPORTING ENTITY

Muller and Phipps (Ceylon) PLC is incorporated and domiciled in Sri Lanka and listed on the Colombo Stock Exchange. The registered office and principle place of business is situated at No: 98, Sri Sangaraja Mw., Colombo-10.

The consolidated Financial Statements of the Company as at and for the year ended 31st March 2017 comprise of the Company and its subsidiary (together referred to as the “Group”)

The Company serves as the holding Company of its wholly owned subsidiary; Pettah Pharmacy (Pvt) Ltd which is serving as an agent representative in Sri Lanka for foreign pharmaceutical Companies and operates in importing, whole selling and distribution of pharmaceuticals.

The Company’s immediate and ultimate parent companies are E.B. Creasy & Company PLC and Colombo Fort Land and Building PLC respectively.

2. BASIS OF PREPARATION

2.1 Statement of ComplianceThe Consolidated Financial Statements of the Group and the separate Financial Statements of the Company comprises the Statement of Financial Position, Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows together with the accounting policies and notes to the Financial Statements. These Financial Statements have been prepared in accordance with Sri Lanka Accounting Standards (SLFRSs/ LKASs) as promulgated by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the requirements of the Companies Act No. 07 of 2007.

The Consolidated Financial Statements were authorized for issue by the Board of Directors on 25th July 2017.

2.2. Basis of MeasurementThese Consolidated Financial Statements have been prepared on the basis of historical cost basis except for Non-derivative financial instruments measured at amortized cost and Available-for-sale financial assets measured at fair value.

The Directors have made an assessment of the Company’s ability to continue as a going concern in the foreseeable future and they do not foresee a need for liquidation or cessation of trading.

2.3. Functional and Presentation CurrencyThese Consolidated Financial Statements are presented in Sri Lankan Rupees which is the Company’s functional currency.

2.4. Use of Estimates and JudgmentsThe preparation of these Consolidated Financial Statements in conformity with Sri Lanka Accounting Standards (SLFRSs/LKASs) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Judgments and estimates are based on historical experience and other factors including expectations that are believed to be reasonable under the circumstances. Hence actual experience and results may differ from these judgments and estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period and any future periods affected.

3. Significant Accounting PoliciesThe accounting policies set out below have been applied consistently to all periods presented in these Consolidated Financial Statements and certain comparative amounts have been reclassified to conform to the current year’s presentation.

NOTES TO THE FINANCIAL STATEMENTS


3.1. Basis of ConsolidationThe Consolidation Financial Statements (referred to as the “Group”) comprise the Financial Statements of the Company and its subsidiaries. The Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions/ events in similar circumstances and where necessary, appropriate adjustments have been made in the Consolidated Financial Statements.

3.1.1. Business CombinationsBusiness combinations are accounted for using the acquisition method as at the acquisition date - i.e. when control is transferred to the Group. Control is achieved when the group is exposed, or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Group measures goodwill at the acquisition date as:

• The fair value of the consideration transferred; plus

• The recognized amount of any non-controlling interests in the acquiree; plus

• If the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less

• The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss. Transactions costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

3.1.2. SubsidiariesSubsidiaries are entities controlled by the Group. The Financial Statement of Subsidiaries are included in the Consolidated Financial Statement from the date, that control commences until the date that control ceases.

3.1.3. Non-controlling InterestThe total profit and loss for the year of the Company and its subsidiaries included in consolidation are shown in the Consolidated Statement of Profit or Loss with the proportion of profit and loss after taxation pertaining to minority shareholders of subsidiaries being deducted as “Non-controlling interest”. All assets and liabilities of the Company and of its subsidiaries included in consolidation are shown in the Consolidated Statement of Financial Position. The interest of minority shareholders of subsidiaries in the fair value of net assets of the Group are indicated separately in the Consolidated Statement of Financial Position under the heading “Non-controlling interest”.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners, in their capacity as owners. Adjustments to non-controlling interest is based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognized in profit or loss.

3.1.4. Loss of ControlOn the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss.

3.1.5. Transactions Eliminated on ConsolidationIntra-group balances and transactions, and any unrealized income and expenses arising from intra group transactions, are eliminated in preparing the Consolidated Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS Contd.


3.2. Foreign Currency

3.2.1 Foreign Currency Transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate on that date.

The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities that are measured at fair value in a foreign currency are retranslated to the functional currency at the exchange rate on the date the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

3.3 Assets and Bases of their ValuationAssets classified as current assets in the Statement of Financial Position are cash and bank balances and those which are expected to be realized in cash during the normal operating cycle of the Company’s business, or within one year from the reporting date, whichever is shorter. Assets other than current assets are those which the Company intends to hold beyond a period of one year from the reporting date.

3.3.1 Financial Instruments

3.3.1.1 Financial Assets

a) Initial Recognition and Measurement

Financial assets are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. The Group determines the classification of its financial assets at initial recognition.

All financial assets are recognized initially at fair value plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs.

Purchase or sale of financial assets that require delivery of asset within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, I.e., the date that Group commits to purchase or sell the asset.

The Group’s financial assets include cash and short-term deposits, trade and other receivables, amounts due from related party, quoted and unquoted equity investments and debenture investments.

b) Subsequent Measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial Assets at Fair Value through Profit or Loss

A financial asset at fair value through profit or loss includes financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with changes in fair value recognized in finance income or finance costs in the Statement of Profit or Loss.

The Group has not designated any financial assets upon initial recognition at fair value through profit or loss.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method (EIR), less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit or Loss. The losses arising from


impairment are recognized in the statement of profit or loss.

Held-to-Maturity Investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit or Loss. The losses arising from impairment are recognized in the statement of profit or loss.

Available-for-Sale Financial Investments Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealized gains or losses recognized as other comprehensive income. Interest income on available-for-sale debt securities is calculated using the effective interest method and is recognized in the statement of profit or loss.

The Group evaluates its available-for-sale financial assets to determine whether the ability and intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management’s intention to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent

and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held-to-maturity category is permitted only when the entity has the ability and intention to hold the financial asset accordingly.

c) Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when:

• The rights to receive cash flows from the asset have expired.

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

3.3.1.2. Impairment of Financial Assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

3.3.1.3. Financial Liabilities

a) Initial Recognition and Measurement

Financial liabilities within the scope of LKAS 39 are classified as financial liabilities at fair value through profit or loss or loans and borrowings, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.



All financial liabilities are recognized initially at fair value plus, in the case of loans and borrowings, transaction costs that are directly attributable to the acquisition or issue of such financial liability.

The Group’s financial liabilities include trade and other payables, amounts due to related companies, loans and borrowings and bank overdrafts.

b) Subsequent Measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial Liabilities at Fair Value Through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term.

Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.

The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.

Loans and Borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the statement of profit or loss, when the liabilities are derecognized as well as through the effective interest rate method (EIR) amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit or loss.

c) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired.

3.3.1.4. Fair value of Financial Instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.

3.3.1.5. Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

3.3.2 Property, Plant and Equipment

Property, Plant and Equipment are tangible items that are held for use in the production or supply of goods or services, or for administrative purposes and are expected to be used during more than one period.

3.3.2.1. Recognition and Measurement

Property, Plant and Equipment are recognized if it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be reliably measured. Items of Property, Plant and Equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. When parts of an item of Property, Plant and Equipment have different useful lives, they are accounted for as separate items (major components) of Property, Plant and Equipment.


3.3.2.2. Owned Assets

The cost of an items of Property, Plant & Equipment comprise of its purchase price plus any attributable costs of bringing the asset to work condition for its intended to use. The cost of self-constructed assets included the cost of material, direct labor, and any other cost attributable to bringing the asset to the working condition for its intended use.

3.3.2.3. Subsequent Costs

The cost of replacing a part of an item of Property, Plant and Equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of Property, Plant and Equipment are recognised in profit or loss as incurred.

3.3.2.4. Leased Assets

Finance Lease

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risk and rewards of ownership of the leased asset. Where the company is a lessee in this type of arrangement, the related asset is recognized at the inception of the lease at the fair value of the lease asset or, if lower, the present value of the lease payment plus incidental payments, if any. A corresponding amount is recognized as finance lease liability. Lease of land and buildings are classified separately and are split into a land and building element, in accordance with the relative fair values of the leasehold interests at the date the asset is recognized initially.

Operating Lease

All other leases are treated as operating leases. Where the company is lessee, payment on operating lease agreements are recognized as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.

3.3.2.5. Derecognition

The carrying amount of an item of Property, Plant and Equipment are derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of Property, Plant and Equipment is included in profit or loss when the item is derecognised. When replacement costs are recognised in the carrying amount of an item of Property, Plant and Equipment, the remaining carrying amount of the replaced part is derecognized.

3.3.2.6. Gains and Losses on Disposal

Gains and losses on disposal of an item of Property, Plant and Equipment are determined by comparing the proceeds from disposal with the carrying amount of Property, Plant and Equipment, and are recognized net within “other income / other expenses” in profit or loss.

3.3.2.7. Depreciation

Depreciation is based on the cost or other amount substituted for cost, less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Depreciation is recognised in the Statement of Profit or Loss on a straight method over the estimated useful lives of each part of an item of Property, Plant and Equipment.

Estimated useful life of each type of assets are as follows;

Parent (Years)

Subsidiary (Years)

Furniture & Fittings 10 8

Computers & Software 10 5

Office Equipment 10 6

Motor Vehicles 5 4

Plant & Machinery - 10



Depreciation of an asset begins when it is available for use and ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognised.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over the term of the lease, if shorter.

3.3.3. Intangible Assets

Intangible Assets are recognised if it is probable that future economic benefits attributable to the asset will flow to the entity and the cost of the asset can be reliably measured. Intangible assets that are acquired by the Group/Company are measured at cost less accumulated amortization and accumulated impairment losses.

Amortization

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

3.3.4. Impairment of Assets

The carrying amounts of the Company’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, 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. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit and loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the group of other assets in the unit on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

3.3.5. Inventories

Inventories are measured at the lower of cost and net realizable value after making due allowances for obsolete & slow moving items.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

3.3.6. Cash and Cash Equivalent

Cash and cash equivalents comprise cash balances and short term deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows.


3.4. Liabilities and ProvisionsLiabilities classified as Current Liabilities on the Statement of Financial Position are those which fall due for payment on demand or within one year from the reporting date.

Non-Current Liabilities are those balances that fall due for payment after one year from the reporting date.

All known liabilities have been accounted for in preparing these Financial Statements.

3.4.1. Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

3.4.2. Employee Benefits

3.4.2.1 Short-term Employee Benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

3.4.2.2 Defined Contribution Plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligation for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees.

(a) Employees’ Provident Fund

The Group and employees contribute 12% and 8% respectively on the salary of each employee to the Employees’ Provident Fund.

(b) Employees’ Trust Fund

The Group contributes 3% of the salary of each employee to the Employees’ Trust Fund.

3.4.2.3 Defined Benefit Plan – Gratuity

Provision has been made in the Financial Statements for retiring gratuities which may fall due for payment under the Payment of Gratuity Act No. 12 of 1983 in respect of all employees including those who have less than 5 years continued service.

The cost of retiring gratuities is determined by the Group using Projected Unit Credit method. Actuarial gains and losses are recognized in other Comprehensive Income.

The liability recognized in the Statement of Financial Position for defined benefit plans is the present value of the defined benefit obligation at the reporting date.

Management estimates the Defined Benefit Obligation annually. This is based on standard rates of inflation, medical cost trends and mortality. It also takes into account the Company’s specific anticipation of future salary increases. Discount factors are determined close to each year-end by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.

Past service costs are recognized immediately in profit or loss, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortized on a straight-line basis over the vesting period.



However, as per the payment of Gratuity Act No. 12 of 1983 this liability only arises upon completion of 5 years of continued service.

3.5. Statement of Profit or Loss

3.5.1 Revenue

The Group revenue derived from the provision of services, which fall within the Company’s ordinary activities net of turnover related taxes.

3.5.1.1. Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue and the 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, and after eliminating sales within the Group.

3.5.1.2 Revenue Recognition - Subsidiary

Revenue arises from the sale of goods. It is measured at the fair value of consideration received or receivable, excluding sales taxes, rebates and trade discounts. The following specific criteria are used for the purpose of recognition of revenue.

a) Sale of Goods

Sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer, generally when the customer has taken undisputed delivery of goods.

b) Dividend Income

Dividend income is recognized in the Statement of Profit or Loss when the right to receive payment is established.

c) Interest Income

Interest Income and expenses are reported on an accrual basis using the effective interest method.

d) Other Income

Other Income is recognized on accrual basis. Gains / losses on the disposal of investments held by the Group have been accounted for as other income in the Statement of Comprehensive Income.

3.5.2. Expenditure Recognition

3.5.2.1. Operating Lease Payment

Where the company has the use of assets under operating leases, payments made under the leases are recognized in the Statement of Profit or Loss on a straight line basis over the term of the lease. Lease incentives received are recognized in the Statement of Profit or Loss as an integral part of the total lease expenses over the term of the lease. Contingent rentals are charged to the Statement of Profit or Loss in the accounting period in which they are incurred.

3.5.2.2. Finance Costs

Finance costs comprise of interest expenses on borrowings and impairment losses recognised on trade receivables, and amounts due from related companies.

Borrowing costs directly attributable to acquisition, construction or production of qualifying assets are capitalized.

Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or fiancé cost depending on whether foreign currency movement finance are in a net gain or net loss position.

3.5.2.3. Taxation

Income tax expense comprises current and deferred tax. Income tax is recognised in the Statement of Profit or Loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.


Current TaxCurrent tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred Tax

Deferred tax is recognized using the Statement of Financial Position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The principal temporary differences arise from depreciation on Property, Plant and Equipment; tax losses carried forward and defined benefit obligation. Deferred tax assets relating to the carry forward of unused tax losses are recognized to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend is recognized.

3.6. Statement of Cash FlowsThe Statement of cash flows has been prepared using the “indirect method”.

Interest paid is classified as operating cash flow. Dividend and interest income are classified as cash flows from investing activities.

For the purpose of Statement of Cash Flows, cash and cash equivalent consist of cash in hand and deposits in banks net of outstanding bank overdraft.

3.7. Related Party TransactionsDisclosure has been made in respect of the transactions in which one party has the ability to control or exercise significant influence over the financial and operating policies/decisions of the other, irrespective of whether a price is being charged or not.

The relevant details are disclosed in the respective notes to the Financial Statements.

3.8. Earnings Per ShareThe Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

3.9. Events Occurring after the Reporting DateAll material post reporting date events have been considered and where appropriate adjustments or disclosures have been made in respective notes to the Financial Statements.



3.10. Commitments and ContingenciesContingencies are possible assets or obligations that arise from a past event and would be confirmed only on the occurrence or non-occurrence of uncertain future events, which are beyond the Company’s control. Contingent Liabilities and Commitments are disclosed in Note 28 & 31 to the Financial Statements.

4. New Standards and Interpretation Not Yet EffectiveStandard issued but not yet effective up to the date of issuance of the Company’s Financial Statements are listed below. This listing is of standards issued, which the Company reasonably expects to be applicable at a future date. The group intends to adopt those standards when they become effective.

a) SLFRS 9 – Financial InstrumentsSLFRS 9 as issued reflects the replacement of LKAS 39 and applies to the classification and measurement of financial assets and financial liabilities as defined in LKAS 39. This standard becomes effective for annual periods beginning on or after January 01, 2018. The adoption of SLFRS 9 will have an impact on classification and measurement of Group`s financial assets.

b) SLFRS 15 – Revenue from Contracts with CustomersSLFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces the existing revenue recognition guidance including LKAS 18 Revenue and LKAS 11 Construction Contracts.

SLFRS 15 is effective for annual reporting periods beginning on or after 01st January 2018, with early adoption permitted.

The Company is currently in the process of evaluating the potential effect of these standards on its financial statements and the impacts of the adoption of these standards have not been quantified as at the reporting date.


Group Company2017 2016 2017 2016

5. REVENUE Rs.'000 Rs.'000 Rs.'000 Rs.'000 Pharmaceuticals 898,607 903,252 - - Management Fee - - 2,000 2,000

898,607 903,252 2,000 2,000

The Company has suspended its pharmaceutical operations since April 1993 and continues with its investment holding activities.

6. OTHER INCOMESundry Income 47 44 - - Commission Income 15,563 8,273 - - Profit on Sale of Property, Plant & Equipment 8 - - -Dividend Income 217 171 23,842 171

15,835 8,488 23,842 171

7. NET FINANCE INCOME / (EXPENSES)7.1 Finance Income Interest Income from Related Companies 5,413 2,335 6,741 6,038 Interest Income from Others 111 140 - - Interest Income Call Deposits 70 15 - - Interest Income HTM - Fixed Call Deposits 180 240 - - Interest Income from Debentures 7,294 7,328 7,294 7,328

13,068 10,058 14,035 13,366

7.2 Finance ExpensesInterest on Short Term Borrowings (25,501) (5,480) - - Interest on Bank Overdraft (5,811) (3,119) - -

(31,312) (8,599) - -

7.3 Other Financial ItemsGain / (Loss) on Conversion of Foreign Currencies 143 (10,400) - -

143 (10,400) - - 7.4 Net Financing Income / (Expenses) (18,101) (8,941) 14,035 13,366



8. PROFIT BEFORE TAXATIONThis is stated after charging all expenses including the following:


Rs.'000 Rs.'000 Rs.'000 Rs.'000 Director's Emoluments 12,584 12,142 6,920 6,778Statutory Audit Fee - KPMG 266 248 266 248 Statutory Audit Fee - Other 555 505 - - Non-Audit Services - Other 124 53 124 53 Depreciation and Amortization 1,367 1,230 38 5 Loss on sale of Property, Plant & Equipment - 28 - - Rent Expenses 10,830 12,760 - - Loss on Available for Sale Financial Asset 319 669 - -Staff Cost (8.1) 60,337 45,754 - -

8.1 Staff CostStaff remuneration 51,658 37,844 - - Defined Benefit Plan Costs - Retiring Gratuity 1,879 1,691 - - Defined contribution Plan Costs - EPF and ETF 6,800 6,219 - -

60,337 45,754 - -

Number of Employees at year end 82 78 - -


9. INCOME TAX EXPENSE9.1 Reconciliation Accounting Profit / (Loss) to Income Tax Expense


Rs.'000 Rs.'000 Rs.'000 Rs.'000

Profit Before Income Tax Expense 30,754 41,753 35,582 11,061Inter-Company Eliminations 23,625 - - -

54,379 41,753 35,582 11,061

Non Business Income - Gross (23,842) (171) (23,842) (171)Exempt Income (7,294) (7,328) (7,294) (7,328)Aggregate Disallowable Expenses 2,404 5,545 38 9 Allowable Expenses (8) (1,425) - - Tax Loss claimed during the year (Note 9.2) (1,570) (1,250) (1,570) (1,250)Taxable Income 24,070 37,124 2,914 2,321

Income Tax charged Income Tax @ 28% 6,738 10,394 816 650WHT on Dividend 2,625 - - -Current Tax Expense 9,363 10,394 816 650

9.2 Reconciliation of Tax Loss Tax Loss Brought Forward 95,288 96,538 95,288 96,538 Tax Loss claimed during the year (1,570) (1,250) (1,570) (1,250)Tax Loss Carried Forward 93,718 95,288 93,718 95,288

9.3 In terms of the Inland Revenue Act No. 10 of 2006 and subsequent amendments thereto, Muller and Phipps (Ceylon) PLC and its subsidiary is liable to income tax at the rate of 28%.

GroupFor the year ended 31st March, 2017 2016

Rs. '000 Rs. '000Current tax expensesMuller & Phipps (Ceylon) PLC 816 650Subsidiary Company 5,922 9,744WHT On Dividend 2,625 -

9,363 10,394 Deferred Tax reversalSubsidiary Company (206) (419)

9,157 9,975



10. EARNINGS PER SHAREThe Calculation of Earnings per Share is based on the Profit after tax attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the year.


Profit After Tax Attributable to Ordinary Shareholders (Rs. '000) 21,597 31,778 34,766 10,411 Weighted Average Number of Ordinary Shares in issue ('000) 283,000 283,000 283,000 283,000 Basic / Diluted Earnings per Share (Rs.) 0.08 0.11 0.12 0.04

11. DIVIDEND PER SHAREThe calculation of Dividend per share is based on the dividend for the year and the weighted average number of ordinary shares in issue during the year.


Dividend Paid During the Year (Rs. '000)Final Dividend* 19,810 19,810 19,810 19,810Interim Dividend 19,810 - 19,810 -Total Dividends 39,620 19,810 39,620 19,810Weighted Average Number of Ordinary Shares in Issue (‘000) 283,000 283,000 283,000 283,000 Dividend per Share (Rs.) 0.14 0.07 0.14 0.07

* Dividend paid out of previous year’s profits.

12. PROPERTY, PLANT & EQUIPMENT 12.1 Group

Motor Vehicles

Rs.'000

Computers &Software

Rs.'000

Furniture &FittingsRs.'000

OfficeEquipment

Rs.'000

Total2017

Rs.'000

Total2016

Rs.'000 Cost or ValuationBalance as at 1st April 4,519 7,936 1,640 1,983 16,078 15,734 Additions During the Year - 274 - 506 780 883 Disposals During the Year - - - (132) (132) (539)Balance as at 31st March 4,519 8,210 1,640 2,357 16,726 16,078

Accumulated DepreciationBalance as at 1st April 4,300 4,300 952 997 10,344 9,479 Charge for the year 194 704 106 164 1,168 1,184 Charge on Disposals - - - (91) (91) (319)Balance as at 31st March 4,289 5,004 1,058 1,070 11,421 10,344

Carrying Amount as at 31st March 230 3,204 582 1,287 5,305 5,734


12.2 Company Motor Vehicles Rs.'000

Computers & Software

Rs.'000

Furniture &Fittings Rs.’000

Office Equipment

Rs.'000

Total2017

Rs.'000

Total2016

Rs.'000 Cost or ValuationBalance as at 1st April 300 814 378 54 1,546 1,546 Additions - - - - - - Balance as at 31st March 300 814 378 54 1,546 1,546

DepreciationBalance as at 1st April 300 795 378 35 1,508 1,503 Charge for the year - 19 - 19 38 5 Balance as at 31st March 300 814 378 54 1,546 1,508

Carrying Amount As at 31st March - - - - - 38

12.3 Gross Carrying amount of fully depreciated Property Plant and EquipmentThe gross Carrying amount of fully depreciated Property Plant and Equipment of the Group, Which are still in use as at 31st March 2017 is Rs. 1.5 Mn.(31st March 2016 - Rs. 1.3 Mn)

13. INTANGIBLE ASSETSGroup Company

For the year ended 31st March, 2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Computer Software Cost or Valuation At the beginning of the year 690 690 - - Acquired during the year 153 - - - At the end of the year 843 690 - -

Amortization At the beginning of the year 508 462 - - Amortized during the year 199 46 - - At the end of the year 707 508 - - Carrying Amount 136 182 - -



14. INVESTMENTS IN SUBSIDIARIES Group Company

% 2017 2016 2017 2016Holding Rs.'000 Rs.'000 Rs.'000 Rs.'000

14.1 Investment in SubsidiaryPettah Pharmacy (Private) Limited 100 - - 38,897 38,897

- - 38,897 38,897

Principal ActivityPettah Pharmacy (Private) Limited imports and sells drugs and pharmaceuticals.

15. FINANCIAL ASSETS AVAILABLE FOR SALE Group Company

2017 2016 2017 2016Cost Value Value Cost Value Value

15.1 Investment in Shares Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Hemas Holding PLC (155,355 Shares) (Note 15.1.1) 7,674 16,887 12,522 7,674 16,887 12,522 Dutch Dairy International (Private) Limited 5,400 5,400 5,400 5,400 5,400 5,400 Beruwela Resorts PLC (30,000 shares) 45 30 36 - - - Colombo Fort Hotels Limited (31,880,000 Shares) 31,880 16,578 16,896 - - - Provision for Fall in Value of Investment - (5,400) (5,400) - (5,400) (5,400)

44,999 33,495 29,454 13,074 16,887 12,522

Group/Company2017 2016

No. of Shares

Cost Value No. of Shares

Cost Value

15.1.1 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Hemas Holding PLC 155,355 7,674 16,887 155,355 7,674 12,522

Group Company2017 2016 2017 2016

Cost Value Value Cost Value Value 15.2 Investments in Debentures Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Kotagala Plantations PLC (Note 15.2.1) 50,000 44,601 50,000 50,000 44,601 50,000

50,000 44,601 50,000 50,000 44,601 50,000

Total Investments in Available for Sale - Financial Assets 78,096 79,454 61,488 62,522 Net Change in Fair Value of Available for Sale-Financial AssetsRecognized to Profit or Loss (319) (669) - -Recognized in Other Comprehensive Income (1,040) 1,154 (1,034) 1,166



15.2.1 During the year 2014/2015 Company has subscribed to 500,000 rated secured listed redeemable debentures of Kotagala Plantations PLC of Rs. 100 each having the following maturities and interest rates.

Category No.of Debentures Terms of Debentures Interest Rate (per annum payable semi annually)

Type A 125,000 04 Years 14.25% (AER of 14.76%)

Type B 125,000 05 Years 14.50% (AER of 15.03%)

Type C 125,000 06 Years 14.75% (AER of 15.29%)

Type D 125,000 07 Years 15% (AER of 15.56%)

16. DEFERRED TAX ASSETSGroup Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Balance at the Beginning of the Year 647 214 - - Amount reversed during the year - Profit or Loss 206 419 - - Amount recognised / (reversed) during the year - Other Comprehensive Income

(82) 14 - -

Balance as the end of the year 771 647 - -

Composition of Deferred Tax Assets On Property, Plant & Equipment (1,165) (1,067) - - On Retirement Benefit Obligations 2,018 1,700 - -

853 633 - - On Remeasurement of Retirement Benefit Obligation (82) 14 - -

771 647 - -

Deferred Tax is provided using the liability method in respect of temporary differences between the value of assets and liabilities for the financial reporting purpose and the amount used for taxation purpose by applying the effective tax rate of 28% as at 31st March 2017.

16.1 Unrecognised Deferred Tax AssetUnrecognized Deferred Tax Asset as at 31st March 2017 is made up as follows;

Group Company2017 2016 2017 2016

Composition of Unrecognised Deferred Tax Assets Rs.'000 Rs.'000 Rs.'000 Rs.'000 Property, Plant & Equipment - (11) - (11)Carried Forward Tax Loss 26,241 26,681 26,241 26,681Unrecognised Deferred Tax Assets 26,241 26,670 26,241 26,670

Deferred Tax asset has not been recognised by the Company as the management is of the opinion that the reversal of the deferred tax asset will not be crystalized in the foreseable future.


17. INVENTORIESGroup Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Trading Stocks 232,334 221,811 - - 232,334 221,811 - -

18. TRADE AND OTHER RECEIVABLESGroup Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Trade Receivables 138,207 207,501 - - 138,207 207,501 - -

Other Debtors, Deposits & Prepayments (Note 18.1) 190,085 106,724 906 906 Provision for Bad & Doubtful Debts (886) (886) (886) (886)

189,199 105,838 20 20 327,406 313,339 20 20

18.1 Other Debtors, Deposits & Prepayments Prepayments 454 1,584 - - Advances-Non Financial Assets 624 - - - Reimbursements Due from Principal 183,577 103,141 - - Deposits and Prepayments 967 967 906 906 Staff Loans (Note 18.1.1) 959 375 - - Advances 11 463 - - Others 3,493 194 - -

190,085 106,724 906 906

Reimbursements due from principal are, selling and distribution costs to be reimbursed by Janssen and Macleod’s to Pettah Pharmacy (Pvt) Ltd.

18.1.1 Staff LoansBalance Brought Forward 375 1,886 - - Loans Granted During the Year 2,620 1,850 - - Recoveries During the Year (2,036) (3,361) - - Balance Carried Forward 959 375 - -


19. AMOUNTS DUE FROM RELATED COMPANIES Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

19.1 ParentE.B. Creasy & Company PLC 59,921 53,779 59,921 53,779

59,921 53,779 59,921 53,779

19.2 Subsidiary Pettah Pharmacy (Private) Limited - - 15,826 15,313

- - 15,826 15,313

19.3 OtherYork Hotel Management Services Limited 120 120 120 120 Provision for Bad and Doubtful Debts (120) (120) (120) (120)Kotagala Plantations PLC 1,803 1,818 1,803 1,818

1,803 1,818 1,803 1,818 61,724 55,597 77,550 70,910

Interest will be charged at the rate of AWPLR +2% per annum.

20. FINANCIAL ASSETS HELD TO MATURITY Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Fixed Deposits - 5,005 - - - 5,005 - -

21. CASH AND CASH EQUIVALENT Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Cash in Hand 100 101 - - Cash at Bank 3,077 3,824 1,258 3,092

3,177 3,925 1,258 3,092 Bank Overdraft (72,171) (22,997) (9,408) - Cash and Cash Equivalents in the Statement of Cash Flows (68,994) (19,072) (8,150) 3,092



22. STATED CAPITAL Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Issued and Fully Paid No. of Shares ('000) Ordinary Shares At the Beginning of the Year 283,000 283,000 283,000 283,000 At the End of the Year 283,000 283,000 283,000 283,000

Value of Ordinary Shares At the Beginning of the Year 83,000 83,000 83,000 83,000 At the End of the Year 83,000 83,000 83,000 83,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per individual present at meeting of the shareholders or one vote per share in the case of a poll.

23. RESERVES Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Capital Reserves 401 401 401 401

Revenue ReservesGeneral Reserves (Note 23.1) 5,000 5,000 5,000 5,000AFS Reserves 5,125 6,165 3,834 4,868Retained Earnings 107,174 124,986 75,725 80,579

117,700 136,552 84,960 90,848

23.1 General Reserve is the reserve set aside for the general purpose.

24. RETIREMENT BENEFIT OBLIGATIONS Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Present Value of Unfunded Retirement Benefit Obligation 6,917 6,118 - - Total Present Value of the Obligation 6,917 6,118 - -

24.1 Provision for Retirement Benefit Obligation At the Beginning of the Year 6,118 4,349 - - Current Service Cost 1,308 1,217 - - Interest Cost 571 474 - - Remeasurement of Retirement Benefit Obligation (293) 78 - -

7,704 6,118 - - Payments during the Year (787) - - - At the End of the Year 6,917 6,118 - -


24.2 Expense Recognized in the Statement of Profit or Loss

Group Company 2017 2016 2017 2016

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Current Service Cost 1,308 1,217 - - Interest Cost 571 474 - -

1,879 1,691 - -

24.3 Remeasurment of Retirement Benefit Obligation recognised in Other Comprehensive Income

Remeasurment of Retirement Benefit Obligation (293) 78 - - (293) 78 - -

The subsidiary; Pettah Pharmacy Private Limited applied the Projected Unit Credit (PUC) method to determine the present value of the Retirement Benefit Obligation as at the year end. The following key assumptions were made in arriving at the Retirement Benefit Obligation.

2017 2016 Discount rate 11% 11% Salary Increment Rate 10% 10% Retirement Age 55 Years 55 Years Staff Turnover ratio 15% 15%

25. TRADE AND OTHER PAYABLES Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Accrued Expenses 7,655 4,857 507 805Dividend Payable 1,159 707 1,159 707Other Payable 14 70 - -

8,828 5,634 1,666 1,512



26. INTEREST BEARING BORROWINGS Group Company

2017 2016 2017 2016Rs.'000 Rs.'000 Rs.'000 Rs.'000

Due within one year Trust Receipt Loan 249,084 141,740 - - Bills Payable 173,386 288,488 - -

422,470 430,228 - -

Trust Receipt Loans and Bills Payable to banks by the subsidiary; Pettah Pharmacy Private Limited, is secured over the stocks of pharmaceuticals and book debts.

27. CONTINGENT LIABILITIESThere were no material contingent liabilities outstanding as at the reporting date.

28. FINANCIAL INSTRUMENTS28.1 Financial Instruments - Statement of Financial Position (SOFP)The Financial Instruments recognized in the Statement of Financial Position are as follows:

Group Company 2017 2016 2017 2016

Notes Rs.'000 Rs.'000 Rs.'000 Rs.'000 Financial AssetsAvailable for Sale 15 78,096 79,454 61,488 62,522 Held to Maturity 20 - 5,005 - - Trade & Other Receivables 18 327,406 313,339 20 20Amounts due from Related Companies 19 61,724 55,597 77,550 70,910

467,226 453,395 139,058 133,452

Cash & Cash Equivalents 21 3,177 3,925 1,258 3,092

Total Financial Assets 470,403 457,320 140,316 136,544

Financial Liabilities

Current LiabilitiesInterest Bearing Borrowings 26 422,470 430,228 - - Trade & Other Payables 25 8,828 5,634 1,666 1,512 Bank Overdraft 21 72,171 22,997 9,408 - Total Financial Liabilities 503,469 458,859 11,074 1,512


28.2 Finanacial Instruments Carried at Fair ValueThe Group and the Company uses the following hierarchy to determine and disclose the fair value of fianancial instruments by valuation techniques.

Level 01: Quoted (unadjusted) prices in active market for identical assets or liabilities.

Level 02: Other techniques for which all inputs with significant effect on the recorded fair values are observable either directly or indirectly.

Level 03: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The Group and the company held the following financial instruments carried at fair value in the Statement of Financial Position.

Group Level 01 Level 02 Level 03 TotalRs. '000 Rs. '000 Rs. '000 Rs. '000

As at 31st March 2017Available for sale financial assets 16,917 44,601 16,578 78,096

As at 31st March 2016Available for sale financial assets 62,558 - 16,896 79,454

CompanyAs at 31st March 2017Available for sale financial assets 16,887 44,601 - 61,488

As at 31st March 2016Available for sale financial assets 62,522 - - 62,522

28.2.1 Transfer Between Level 01 and 02

At 31st March 2017, available for sale corporate debt securities with a carrying amount of 45 Million were transferred from level 1 to level 2 because quoted prices in the market for such debt securities were no longer regularly available. To determine the fair value of such debt securities, management used a valuation technique in which all significant inputs were based on observable market data.

28.2.2 Level 03 Fair ValuesThe Subsidiary; Pettah Pharmacy (Pvt) Ltd has measured the fair value of the investment made in shares of Colombo Fort Hotels Ltd, which is an unquoted investment using Net Asset Value per Share.

28.3 Financial Risk ManagementThe company has exposure to the following risks from its use of financial instruments:

- Credit Risk

- Liquidity Risk

- Market Risk (including currency risk and interest rate risk)



28.3.1 Credit RiskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Group Company 2017 2016 2017 2016

Rs. '000 Rs. '000 Rs. '000 Rs. '000Available for Sale 78,096 79,454 61,488 62,522 Held to Maturity - 5,005 - - Trade & Other Receivables 327,406 313,339 20 20Income Tax Recoverable 2,316 - - - Amount Due from Related Companies 61,724 55,597 77,550 70,910 Cash & Cash Equivalents 3,177 3,925 1,258 3,092

472,719 457,320 140,316 136,544

The ageing of Trade & Other Receivables at the reporting date was: Group

Gross Impairment Gross Impairment2017 2017 2016 2016

Past due 0-365 days 327,386 - 313,319 - More than one year 906 886 906 886

328,292 886 314,225 886

CompanyGross Impairment Gross Impairment2017 2017 2016 2016

Past due 0-365 days - - - - More than one year 906 886 906 886

906 886 906 886

The ageing of amount due from affiliated companies at the reporting date was: Group

Gross Impairment Gross Impairment 31.03.2017 31.03.2017 31.03.2016 31.03.2016

Past due 0-365 days 61,724 - 55,597 - More than one year 120 120 120 120

61,844 120 55,717 120

CompanyGross Impairment Gross Impairment

31.03.2017 31.03.2017 31.03.2016 31.03.2016 Past due 0-365 days 77,430 - 70,790 - More than one year 120 120 120 120

77,550 120 70,910 120

Based on historic default rates, the Group and the Company believes that, apart from the above, no impairment allowance is necessary in respect of Trade and Other Receivables and Amounts due from Related Companies not past due, past due 0 - 365 days and past due by more than 1 year.


28.3.2 Liquidity RiskThe following are the contractual maturities of financial liabilities, including estimated interest payments and excluding of netting agreements.

As at 31st March 2017, Group CompanyCarrying amount

Contractual cash flows

Less than one year

More than one year

Carrying amount


Less than one year

More than one year

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Non-derivative Financial LiabilitiesInterest Bearing Borrowings 422,470 422,470 422,470 - - - - - Income Tax Payable 179 179 179 - 179 179 179 - Trade & Other Payables 8,828 8,828 8,828 - 1,666 1,666 1,666 - Bank Overdraft 72,171 72,171 72,171 - 9,408 9,408 9,408 -

Total 503,648 503,648 503,648 - 11,253 11,253 11,253 -

As at 31 March 2016, Group CompanyCarrying amount


Less than one year

More than one year

Carrying amount


Less than one year

More than one year

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000Non-derivative Financial LiabilitiesInterest Bearing Borrowings 430,228 430,228 430,228 - - - - -

Income Tax Payable 1,165 1,165 1,165 - 119 119 119 -

Trade & Other Payables 5,634 5,634 5,634 - 1,512 1,512 1,512 -

Amounts due to Related Companies - - - - - - - -

Bank Overdraft 22,997 22,997 22,997 - - - - - Total 460,024 460,024 460,024 - 1,631 1,631 1,631 -

28.3.3 Market RiskMarket risk is the risk that changes in market prices, such as foreign exchange rates, Interest rates etc; will affect the Group’s income or the value of its holdings of financial instruments. The objective of the market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the returns.

28.3.3.1 Currency Risk

The Company is not exposed to currency risk as at the reporting date.

The Subsidiary; Pettah Pharmacy (Pvt) Ltd is exposed to currency risk on purchases and borrowings that are denominated in a currency other than the functional currency which is Sri Lankan Rupees.



To mitigate the exposure to foreign currency risk, some of the non-LKR cash flows are monitored and forward exchange contracts are entered into in accordance with it’s risk management policies.

Forward exchange contracts are mainly entered into in respect of short term bills payable on imports.

Foreign Currency denominated financial assets and liabilities which expose the Subsidiary Company to currency risk are disclosed below.

USD Exposure31st March 2017 Rs. '000Financial Assets 183,577 Financial Liabilities (173,386)Total Exposure 10,191

The following table illustrates the sensitivity of profit in regards to the Group’s financial liabilities and the USD/LKR exchange rate ‘all other things being equal’. It assumes a +/-4% change of the LKR/USD exchange rate for the year ended at 31 March 2017. This percentage has been determined based on the average market volatility in exchange rates in the previous 12 months.

If LKR had strengthened against the USD 4%, then it would have had the following impact:

Profit for the Year USD

RS.'000 31st March 2017 (408)

If LKR had weakened against USD by 4% then it would have had the following impact:

Profit for the Year USD

RS.’000 31st March 2017 (408)

Exposures to foreign exchange rates vary during the year depend on the volume of overseas transactions.

Nonetheless, the analysis above is considered to be representative of the group’s exposure to currency risk.


28.3.3.2 Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instruments fluctuate because of changes in market interest rates. The exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligation and Investments with floating Interest rates.

However the company does not have material long term floating rate borrowings or deposits as at the reporting date which results in a material interest rate risk.

The Subsidiary; Pettah Pharmacy (Private) Limited’s investment in Fixed Deposits all pay fixed interest rates. The following table illustrates the sensitivity of profit to a reasonably possible change in interest rates of +/-1% These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

Profit for the Year

Rs. '000 Rs.'000

+1% -1%

31st March 2017 4,852 (4,852)

29. RELATED PARTY TRANSACTIONS

29.1 Transactions with Key Managements Personnel According to Sri Lanka Accounting Standard LKAS-24 ‘Related Party Disclosures’, Key Management Personnel, are those having authority and responsibility for planning,directing and controlling the activities of the entity.Accordingly the Board of Directors (including Executive and Non executive Directors) have been classified as key management personnel.

29.1.1 Loans to DirectorsNo loans have been given to the Directors by the Group/Company.

29.1.2 Key Management Personnel CompensationDuring the year the Group paid Rs. 12,584,335/- (2015/16 – Rs. 12,141,603/-) and the Company paid Rs. 6,920,335/- (2015/16 – Rs. 6,777,603/-) as directors’ emoluments..

29.2 The Group has a related party relationship with its related group companies. The following trascations were carried out with related parties during the year ended 31st March 2017 by the Parent and its Subsidiary.



29.2.1 Related Party Transactions Carried Out by the Parent

Name of the Company Name of Directors Name of Transactions Value Rs. '000

Corporate Managers &

Secretaries Limited

P. Pathmarajah Secretarial Charges

Registrar’s Fees

1,635

44

Pettah Pharmacy (Private) Limited S. D. R. Arudpragasam

P. Pathmarajah

R. C. A. Welikala

R. N. Bopearatchy

P. M. A. Sirimane

A. R. Rasiah

S. N. P. Palihena

A. M. Mubarak

Interest income

Management fee

Management fee Received

Interest Received

1,329

2,000

(1,500)

(1,314)

E.B. Creasy & Company PLC S. D. R. Arudpragasam

P. M. A. Sirimane

R. C. A. Welikala

R. N. Bopearatchy

A. R. Rasiah

S. N. P. Palihena

A. M. Mubarak

Loan granted during the year

Loan settled during the year

Interest Income

Interest Received

Re-imbursement of Expenses

22,000

(20,000)

5,410

(1,206)

8

29.2.2 Related Party Transactions Carried Out by the SubsidiaryInterest paid during 2016/2017 Rs. 1,329,000 (2015/16 - Rs. 6,037,700/-). The loans represent short terms loan lent for related companies where repayment terms are less than 12 months.

There are no related party transactions other than those disclosed above.

This Note should be read in conjunction with Notes 19 to the Financial Statements.

30. CAPITAL COMMITMENTS

There were no any material capital commitments as at the reporting date.

31. EVENTS OCCURRING AFTER THE REPORTING PERIOD

There have been no material events occuring after the reporting date that require adjustments to or disclosure in the Financial Statements.



32. COMPARATIVE INFORMATIONTo facilitate comparison and where relevant, balances pertaining to the previous year have been reclassified.

Group Company

Reclassified

Rs’000

As per Audited

AccountsRs’000

Change

Rs’000

Reclassified

Rs’000

As per Audited

AccountsRs’000

Change

Rs’000

2016

Amounts due from Related Companies 55,597 53,779 1,818 70,910 69,092 1,818

Trade and Other Receivables 313,339 315,157 (1,818) 20 1,838 (1,818)


DISTRIBUTION OF SHAREHOLDINGS

31st March 2017 31st March 2016No. of Total No. of Total

Shareholdings Shareholders Shareholdings % Shareholders Shareholdings %1 - 1,000 1,239 497,556 0.18 1,234 505,630 0.18 1,001 - 10,000 1,042 4,803,267 1.70 1,051 4,858,703 1.72 10,001 - 100,000 421 14,351,184 5.07 430 14,786,149 5.22 100,001 - 1,000,000 87 25,391,232 8.97 83 25,001,958 8.83 Over 1,000,000 7 237,956,761 84.08 8 237,847,560 84.05 Total 2,796 283,000,000 100.00 2,806 283,000,000 100.00

Categories of Shareholders

Individuals 2,715 44,140,402 15.60 2,725 43,603,089 15.41

Institutions 81 238,859,598 84.40 81 239,396,911 84.59

Total 2,796 283,000,000 100.00 2,806 283,000,000 100.00

MARKET VALUEThe market value of an ordinary share of Muller & Phipps (Ceylon) PLC

2016/2017 Rs.

2015/2016 Rs.

Highest Price 1.50 1.60Lowest Price 0.90 1.20 Year End Price 1.10 1.20

FINANCIAL STATISTICSEarning / (Loss) per Share 0.08 0.11 Net Assets per Share 0.71 0.78 Dividend per Share 0.14 0.07

PUBLIC HOLDINGThe percentage of shares held by the public as at 31st March 2017 was 48.58% ( 31st March 2016 - 48.60% )

PUBLIC SHAREHOLDERSNumber of Public Shareholders as at 31st March 2017 were 2789 (31st March 2016 - 2,799).

SHARE INFORMATION


TWENTY MAJOR SHAREHOLDERS

31st March 2017 31st March 2016

NAME No. of Shares % No. of Shares %

1. E. B. CREASY & COMPANY PLC 145,061,773 51.26 145,061,773 51.26

2. SAMPATH BANK PLC / DR. T. SENTHILVERL 74,592,100 26.36 74,592,100 26.36

3. HEXAGON HOLDINGS (PRIVATE) LTD 4,850,000 1.71 4,850,000 1.71

4. FIRST CAPITAL MARKETS LIMITED / MR. S. S. S. DE FONSEKA 4,555,000 1.61 3,100,000 1.10

5. GETZ BROS. & CO. INC. 3,675,000 1.30 3,675,000 1.30

6. MR. AJITH KRISHANTHA PALLIYA GURUGE DON 3,606,050 1.27 3,406,050 1.20

7. DR. ABDUL RAHUMAN MOHAMED 1,616,838 0.57 1,112,637 0.39

8. MR. HARSHAKA CHAMUPATHIE SUBASINGHE 1,000,000 0.35 1,000,000 0.35

9. MR. BUWANEKA TISSA PRATHAPASINGHE AND MRS.UMA KUMARI PRATHAPASINGHE

1,000,000 0.35 1,000,000 0.35

10. MR. ATAPATTU MUDIYANSELAGE CHANDRASOMA SUNIL ATAPATTU 894,110 0.32 - -

11. MR. ASIRI DILHAN DE SILVA 797,993 0.28 800,863 0.28

12. MR. RAVINDRA ERLE RAMBUKWELLE 767,092 0.27 674,942 0.24

13. MR. SAJID HUSSEIN MAKEEN 702,800 0.25 702,800 0.25

14. MR. HIKKADUWAGE PRASANNA DESAPRIYA FERNANDO 700,000 0.25 700,000 0.25

15. MR. ABHAYAGUNAWARDHANALAGE NILANTHA PRADEEP ABHAYAGUNAWARDHANA

680,200 0.24 680,200 0.24

16. MR. MOHAMED SUBAIR FOUZAL HAQQUE AND MRS. SITHTHI ISAMA HAQQUE

658,426 0.23 150,000 0.05

17. MACKSONS HOLDINGS ( PVT ) LTD. 610,837 0.22 610,837 0.22

18. WALDOCK MACKENZIE LIMITED / MR.S.S.THANGARAJAH 586,643 0.21 100,000 0.04

19. MR. ANURA NEILAN WILLIAM 500,000 0.18 500,000 0.18

20. ARUNA ENTERPRISES ( PVT ) LIMITED 500,000 0.18 500,000 0.18

21. MR. HILARY AYOMAL FERNANDO 500,000 0.18 500,000 0.18

Total 247,854,862 87.58 243,717,202 86.13

SHARE INFORMATION Contd.


2

007/

08

Rs.’

000

200

8/09

R

s.’00

0 2

009/

10

Rs.’

000

201

0/11

R

s.’00

0 2

011/

12

Rs.’

000

201

2/13

R

s.’00

0 2

013/

14

Rs.’

000

201

4/15

R

s.’00

0 2

015/

16

Rs.’

000

201

6/17

R

s.’00

0Tr

adin

g Re

sults

Turn

over

2

94,3

89

306

,110

3

40,5

24

383

,232

4

27,2

57

529

,823

5

73,2

52

755

,482

9

03,2

52

898

,607

Pr

ofit

/ (Lo

ss) B

efor

e Ta

x 8

,270

3

1,96

4 3

1,04

0 3

8,34

3 5

1,92

9 4

3,74

4 1

8,31

6 5

7,39

5 41

,753

30,7

54Ta

xatio

n (5

,381

) (1

1,29

6) (1

1,70

0) (1

3,76

4) (9

,019

) (1

2,05

0) (6

,338

) (1

5,76

6) (9

,975

) (9

,157

)Pr

ofit

/ (Lo

ss) A

fter T

ax

2,8

89

20,

669

19,

340

24,

579

42,

910

31,

694

11,

978

41,

629

31,7

7821

,597

Asse

ts E

mpl

oyed

Pr

oper

ty, P

lant

& E

quip

men

t 6

,308

5

,984

6

,066

4

,491

6

,093

9

,224

7

,255

6

,255

5

,734

5

,305

In

vest

men

ts

12,

000

25,

230

27,

039

20,

077

74,

983

79,

454

78,

096

Net

Cur

rent

Ass

ets (

Liab

ilitie

s)

33,

034

53,

993

72,

897

93,

995

116

,704

1

36,2

72

149

,863

1

29,1

63

139

,653

12

3,30

9

Shar

ehol

ders

’ Fun

ds

Stat

ed C

apita

l 1

89,5

72

189

,572

1

89,5

72

83,

000

83,

000

83,

000

83,

000

83,

000

83,

000

83,

000

Rese

rves

(2

74,2

05)

(253

,536

) (2

34,1

96)

23,

533

60,

299

86,

913

91,

273

123

,494

1

36,5

52

117

,700

Non

-Cur

rent

Lia

bilit

ies

124

,749

1

24,9

46

124

,587

6

,377

6

,961

3

,311

3

,366

4

,349

6

,118

6

,917

Fina

ncia

l Rat

ios

Pre-

Tax P

rofit

: Tur

nove

r (%

) 2

.81

10.

00

9.1

1 1

0.01

1

2.15

8

.26

3.1

9 7

.60

4.62

3.4

6 Pr

e-Ta

x Pro

fit: S

hare

hold

ers’

Fu

nds

(4.8

2) (1

5.00

) (0

.70)

0.3

6 0

.36

0.2

6 0

.10

0.2

8 0

.19

0.1

5

Liqu

idity

Cu

rren

t Ass

ets:

Cur

rent

Lia

bilit

ies

1.2

9 2

.00

1.5

9 1

.68

2.0

2 2

.02

2.2

8 1

.49

1.3

0 1

.24

Oth

ers

Earn

ings

Per

Sha

re (R

s.)

0.0

4 0

.15

0.1

4 0

.09

0.1

5 0

.11

0.0

4 0

.15

0.1

1 0

.08

Net

Ass

ets P

er S

hare

(Rs.

) 1

.20

(0.4

5) (0

.31)

0.3

8 0

.51

0.6

0 0

.62

0.7

3 0

.78

0.7

1 M

arke

t Val

ue P

er S

hare

(Rs.

) 1

.00

0.5

0 1

.00

2.4

0 1

.90

1.5

0 1

.20

1.2

0 1

.20

1.1

0 M

arke

t Cap

italiz

atio

n 7

0,55

5 1

41,5

72

189

,572

6

79,2

00

537

,700

4

24,5

00

339

,600

3

39,6

00

339

,600

3

11,3

00

TEN YEAR SUMMARY - GROUP


NOTES


I/We ............................................................................................................................................................................................................... of

...................................................................................................................................................................... being a member/members of

MULLER & PHIPPS (CEYLON) PLC hereby appoint ……............................................................................................... of ......................

............................................... or failing him

1. SRI DHAMAN RAJENDRAM ARUDPRAGASAM of Colombo or failing him2. PONNAMBALAM PATHMARAJAH of Colombo or failing him3. RANJIT NOEL BOPEARATCHY of Colombo or failing him4. ROHAN CHRISANTHA ANIL WELIKALA of Colombo or failing him5. PARAKRAMA MAITHRI ASOKA SIRIMANE of Colombo or failing him6. ALBERT RASAKANTHA RASIAH of Colombo or failing him7. SHANTHIKUMAR NIMAL PLACIDUS PALIHENA of Colombo or failing him8. AZEEZ MOHAMED MUBARAK of Colombo

as my/our* proxy to represent me/us* and to vote on my/our* behalf at the Annual General Meeting of the Company to be held on 30th August 2017, and at any adjournment thereof and at every poll which may be taken in consequence of the aforesaid meeting.

For Against 1. To receive and consider the Annual Report of the Board of Directors and the Statement of Accounts for the year ended 31st March 2017, with the Report of the Auditors thereon ........... ..................

2. To re-elect Dr. A. M. Mubarak as a Director ........... ..................

3. To re-appoint Mr. P. Pathmarajah as a Director ........... ..................

4. To re-appoint Mr. R. N. Bopearatchy as a Director ........... ..................

5. To re-appoint Mr. A. R. Rasiah as a Director ........... ..................

6. To re-appoint Mr. S. N. P. Palihena as a Director ........... ..................

7. To re-appoint as Auditors, Messrs KPMG and authorize the Directors to determine their remuneration. ........... ..................

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

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

Signature of Shareholder(s)

Instructions as to completion are stated on the reverse hereof.

*Note: Please delete the inappropriate words.A proxy need not be a member of the Company. If no words are deleted or there is in the view of the proxy doubt (by reason of the way in which instructions contained in the proxy form have been completed) as to the way in which the proxy should vote, the proxy will vote as he thinks fit.

FORM OF PROXY


INSTRUCTIONS AS TO COMPLETION1. Please perfect the Form of Proxy, after filling in legibly your full name and address by signing in the space provided

and filling in the date of signature.

2. In the case of Company/Corporation, this Form of Proxy must be executed either under its Common Seal or by its Attorney or by an Authorized Officer on behalf of such Company/Corporation duly authorized in writing.

3. In the case of a proxy signed by an Attorney, the relative Power of Attorney should also accompany the completed Form of Proxy for registration, if such Power of Attorney has not been Registered with the Company.

4. The completed Form of Proxy should be deposited at the Registered Office of the Company’s Secretaries, Corporate Managers and Secretaries (Pvt) Limited 8-5/2 Leyden Bastian Road, Colombo 1, not less than 48 hours before the time appointed for the holding of the meeting.

2016/17...notice is hereby given that the fifty second annual general meeting of muller & phipps...

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