contentsthe chairman of renuka shaw wallace plc, shaw wallace ceylon ltd and the managing director...

01 Profile, Vision, Culture and Values

02 Our Portfolio of Businesses

03 Our Markets & Our Locations

04-05 Financial Highlights

06-07 Profile of Directors

08 Chairman’s Review

09-10 Corporate Governance

11 Audit Committee Report

12 Remuneration Committee Report

13 Risk Management

14 Sustainability Report

15-17 Report of the Directors

18 Statement of Directors’ Responsibility

19 Financial Reports

20 Independent Auditors’ Report

21 Statements of Comprehensive Income

22 Statements of Financial Position

23-24 Statement of Changes of Equity

25 Statement of Cash Flows

26-64 Notes to the Financial Statements

65 Directors of Group

66 Group Structure

67 Real Estate Portfolio

68 Five Year Summary

69-70 Shareholder Information

71 Notice of Meeting

72 Notes

73-74 Form of Proxy

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01Renuka Agri Foods PLC | Annual Report 2013

02 Renuka Agri Foods PLC | Annual Report 2013


Financial highlights

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(2013)(2012)(2011)(2010)(2009)

GroupRevenue &Profit

Profit After TaxRevenue

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(2013)(2012)(2011)(2010)(2009)

GroupTotal Assets &Total Liabilities

Total AssetsTotal Liabilities

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(2013)(2012)(2011)(2010)(2009)

ProfitAfter Tax &Dividend

Profit After TaxDividend

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(2013)(2012)(2011)(2010)(2009)

Total Equity& Long-TermLiability

Long-Term LiabilityTotal Equity


Financial highlights (Contd)

To Government Revenue 0.33%

To Maintain Operations 8.30%

Retained with the Business 55.95%

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(2013)(2012)(2011)(2010)(2009)

Finance Cost& Interest Cover

Finace Cost (Rs.M)Interest Cover

To Employees 25.83%

To Providers of Capital 9.59%

Valu

e Added Distribution


Profile of Directors

Dr. S. R. Rajiyah

Dr. S.R. Rajiyah is the Executive Chairman of the Company. He is also

the Chairman of Renuka Shaw Wallace PLC, Shaw Wallace Ceylon Ltd

and the Managing Director of the Renuka Group. He is a medical doctor

qualified in Sri Lanka and counts over 36 years of corporate experience

in operations, quality management, research and development as well

as in founding and running businesses.

Mrs. I.R. Rajiyah

Mrs. I.R. Rajiyah is the Executive Deputy Chairperson of the Company.

She is qualified in Business Studies from the United Kingdom and is a

fellow of the British Institute of Management. She counts over 40 years

of corporate experience in founding and running businesses. She was

presented with the Best Women Exporter Award in 2009 by the National

Chamber of Exporters Sri Lanka. She is also the Chairperson of Renuka

Holdings PLC and Director of Renuka Shaw Wallace PLC, Shaw Wallace

Ceylon Ltd, Richlife Dairies Ltd and several un-listed companies.

Mr. S. Vasantha Kumara

Mr S.Vasanthakumara is the Chief Operating Officer of the Company. He

holds a Bachelor of Engineering Degree from the Mangalore University.

He counts over 26 years of industrial work experience, out of which, 16

years have been with the Renuka Group. He has extensive experience in

supply chain management and overall general management functions.

He is a Director of Renuka Shaw Wallace PLC, Shaw Wallace Ceylon Ltd

and Richlife Dairies Ltd.

Mr. S.V. Rajiyah

Mr. S.V.Rajiyah is an Executive Director of the Company. He is also an

Executive Director of Renuka Holdings PLC & Renuka Shaw Wallace PLC.

He is the Managing Director of Shaw Wallace Ceylon Ltd, Richlife Dairies

Ltd and Joint Managing Director of McShaw Automotive Ltd. He heads

the Business Development, International Marketing and Investment

Division of the Group. Mr Rajiyah is a graduate in Management from

the Warwick Business School, University of Warwick, United Kingdom.

His direct interest includes corporate strategy, key product and brand

development and portfolio management. He has over 12 year’s

experience in General Management

Ms. A.L. Rajiyah

She holds a BSC (Hons) Accounting and Finance from the University

of Warwick and a MSc Law and Accounting from the London School of

Economics.

She spent 3 years at the investment bank, Morgan Stanley in London

where she was involved in the structuring of credit derivative products

linked to European corporates. She subsequently joined Alcentra Limited

(a subsidiary of Bank of New York Mellon Corporation) which is a USD 18

Bn asset management firm in London, where she was a Vice President

involved in portfolio management, trading and investing in credit

derivative products for Alcentra's structured products platform. She is an

Executive Director of the company Renuka Shaw Wallace PLC and Renuka

Holdings PLC.

Mr. M. Terfloth

Mr M.Terfloth is a Non-Executive Director and holds a MBA from IMD,

Switzerland and a BSc in marketing. After trading financial instruments

in London and New York with Credit Suisse-First Boston, he joined

Terfloth & Kennedy (U.K.) ltd. Since 1991 he has been President and CEO

of B. Terfloth & Cie (Canada) Inc, then also taking over the chairmanship.

His direct interests include international strategic sourcing, key product

and brand development.

Mr. C. J. De S. Amaratunge

Mr. C.J.De.S.Amaratunge is an Independent Non Executive Director of the

Company. He is an Attorney at law and Notary Public and was called to

Bar in 1967. He is the Senior Partner of M/s Dissanayake Amaratunge

Associates, Attorney at Law, Notaries Public and Solicitors. He counts

over 41 year’s experience in all civil branches of the law including

Commercial Corporate Convenyancing and Litigation and Convenyancing.

He serves as a Director on several boards of both private and public

companies.

Mr. L.M. Abeywickrama

Mr. L.M.Abeywickrama is a Non Executive Director of the company. He is

a Management consultant and trainer with over 26 year’s management

experience in the private sector both Sri Lanka and Overseas. He

holds a Bachelors Degree in Science from the University of Colombo,

a Post Graduate Diploma in Marketing from the Chartered Institute of

Marketing and MBA from the American University Washington DC. He

is a fellow of the Chartered Institute of Marketing and a past chairman

of the SIM Sri Lanka region. He serves as a Director on the Boards of

Shaw Wallace Ceylon Ltd, Richlife Dairies Ltd, Renuka Shaw Wallace PLC

& Renuka Holdings PLC.

Mr. P.C.K. Abeykoon

Mr P.C.K Abeykoon is an Independent Non Executive Director experienced

and qualified financial specialist. An associate of the Institute of

Chartered Accountants of Sri Lanka. A fellow member of Society of

Cost Management Accountants of Sri Lanka, having over 17 years

of professional experience in business. He holds a Bachelors’ Degree

in Business Management from the University of Sri Jayewardenepura

and a Master Degree in Business Administration from the Postgraduate

Institute of Management, University of Sri Jayewardenepura.


Mr W.Rajapakshe

Mr.W.Rajapakshe is an attorney at law and a President's counsel. He is

an Independent Non-Executive Director.

Mr J.E. Brennan (Resigned on 31/3/2013)

Mr J.F.Brennan is an Non Executive Director

He has over 40 year’s experience in the food industry in the United

Kingdom specializing in the development, sourcing and marketing of

ethnic and specialty food products.

Mr M.K.A.Ranglin (Appointed on 1/4/2013)

Mr M.K.A. Ranglin joined GraceKennedy in 1980 at Grace Foods

Processors Meat Division in Westmoreland, starting in the position of

Quality Control Technician and moving to General Manager in 1984. Over

the next 20 years he held several senior management positions within

the Foods Division and was promoted to the position of Senior General

Manager – Domestic Business in January 2005. He was appointed Chief

Executive Officer of Grace Foods UK Limited in February 2008 and on 1st

March 2011 he was promoted to CEO for GK Goods Division. He was also

appointed to the Board of Directors of GraceKennedy Ltd. Mr Ranglin

holds a B.Sc. (Hons) in Chemical Engineering from the University of the

West Indies and a MBA in Technology Management.

Profile of Directors (Contd)


Chairman's Review

It is with great pleasure that I welcome all of you, our valued

shareholders, to the 13th Annual General Meeting of Renuka Agri

Foods PLC and present to you the Annual Report and Audited Financial

Statement for the year ended 31st March 2013.

Local and Global Economic Environment

Looking back on the global economy during the financial year under

review, economic growth remained sluggish with uncertainty across the

region largely due to the Chinese leadership transition and reforms in the

Euro Zone. Global growth relied predominantly on emerging economies

which also experienced slower growth as exports were hit by sluggish

performance of the advanced economies. On the local front, interest

rates continued to be high, while the exchange rate was highly volatile

throughout the year making it difficult to effectively take positions in the

currencies we export in.

Industry Performance

The coconut industry saw production increase by 4.7% to 2,940 million

nuts in 2012 largely due to the effect of favourable weather conditions

that prevailed in the major coconut growing areas in 2011. The special

commodity levy introduced for edible oil imports from May 2012 was

increased further from November 2012 which resulted in a 46.2%

increase in coconut oil production and thus increasing prices of our main

raw material. The Coconut Cultivation Board has targeted to increase

national coconut production in Sri Lanka to 3,650 million nuts by the year

2016 and to this effect,the government has distributed over 4 million

seedlings through the Divi Naguma home garden programme, Kaprukai

Sipannai programme and subsidies given to lands less than 5 acres for

new/re-planting/under planting.

As part of its food security drive the government is promoting the

local dairy industry with the objective of meeting the national diary

requirement through domestic liquid production, by the year 2020. Thus

in the dairy industry a slew of measures have been adopted to support

the local industry: among them include price controls and tariffs on

imported milk products, relaxation of duty and other levies on modern

dairy equipment, higher indicated purchasing prices and support for local

dairy farmers to set up dairy farms and milk collecting centers. Apart

from the support rendered to the infrastructure of the local dairy industry

the government has also actively through the media highlighted the

importance in consuming fresh milk. This support has undoubtedly

benefitted the local diary industry as an attitudinal change is needed to

realize the nation’s vision of self-sufficiency in milk.

Company Performance

Year 2012 has been a remarkable year for us, characterised by a stringent

focus on our strategy- by Board, management and staff members at all

levels.

It is with satisfaction that I note that the Group's total revenue has hit a

record high of Rs.2.5 Bn despite a challenging year. The year 2012/13

results show that your company has progressed ever further in top line,

laying the foundation for future growth in bottom line in the years to

come. We have recorded a total comprehensive income Rs.231 Mn.

for the company and Rs. 190 Mn. for the Group during the current

financial year. The Statement of Financial Position has become further

strengthened in the year under review with total assets increasing to

Rs.3.3 Bn.

In the Agri Food Exports sector we successfully commenced exports from

the newly commissioned coconut water tetra pak production line after

the initial setting up and trial productions. We also laid the foundation

for entering a select number of new markets with our brand in the

coming year.

The dairy sector saw a year of investment including the acquisition

of a further 24% in Richlife Dairies Ltd making the company a 100%

group owned entity. During the year we also increased availability of

the Richlife range of dairy products through an increase of coverage

mainly in the general trade. This along with investment in advertising

and promotions resulted in an increase in sales by over 100%.

As an integrated Agri business company, we continued to innovate and

reinvent our food and beverage brands in line with consumer needs;

offering not only the best taste and pleasure but also best nutritional

profile in their respective categories for a healthy diet. At group level we

invested in our brands- Renuka and Richlife where the results of these

investments will be seen in increased turnover and brand recognition in

the years to come. Thus selling and distribution expenses increased by

96% compared to the previous financial year. During the financial year,

we have made investments to expand our product portfolio, increase our

distribution coverage and brand visibility

Rural Economy

Keeping with our strategy of creating shared value is not only our

approach to corporate social responsibility but also the way we do

business; we extended our relationship with farmers across the island.

We procure milk and coconut from over 7000 farmers contributing

approximately Rs 1 billion to the rural economy. Our collection of

coconut and milk have a network comprising out-growers, farmers and

our own farmer societies mainly in the Western, North Western, Central,

North Central and Southern regions who directly supply to the company

through our company owned collection, chilling centers and extension

network.

Acknowledgments

I wish to express my sincere gratitude to my fellow Directors on the

Board for their support, and to my other colleagues in the Group who

have worked tirelessly to add to shareholder value, and to all employees

for their dedication and commitment. I also extend my gratitude to the

shareholders and all other stakeholders as well as to our loyal consumer

base around the world for the support and confidence placed in us.

Sgd.

Dr. S.R. Rajiyah

Chairman

05th August, 2013


Corporate Governance

Renuka Agri Foods PLC is the holding company of subsidiaries namely

Renuka Teas (Ceylon) (Private) Ltd, Renuka Organics (Pvt) Ltd and

Richlife Dairies Ltd.

The Board of Directors

The Company’s business and operations are managed under the

supervision of the Board, which consists of members with experience

and knowledge in the areas of business, in which the company is

engaged with specific acumen in terms of commercial, financial and or

technical expertise.

Board’s Responsibilities

Strategic Direction: The Board provides good stewardship, vision

and strategic direction to the institution whilst transparency and

accountability is maintained. The Board also reviews and monitors the

Company’s activities.

Business Performance: Reviews Business Results on a regular basis

and guides the management on an appropriate direction in achieving

forecast results.

Code of Business Conduct and Ethics: The code of conduct and ethics

are clearly defined from the Board of Directors downwards to every

employee.

Financial Performance of the Company: The Board sits once in

three months to review the financial performance of the company.

The Quarterly Accounts are reviewed by the Audit Committee before

recommending to the Board of Directors to consider for adoption and

release to the public. Final dividends are recommended by the Board

of Directors.

Investor Rights and Relations: The Company communicates regularly

with its shareholders updating them on the company’s position and

performance through the quarterly reports.

The annual report provides a comprehensive assessment of the

company’s performance during the year.

Audit: An independent statutory audit is carried out annually and the

appointment of auditors M/s KPMG, Chartered Accountants for the

ensuing year is recommended to the shareholders at the Annual General

Meeting.

Composition and Attendance at Meetings

The Board of Directors, Audit committee and Remuneration committee

meet quarterly to discharge its duties effectively. The table below shows

the attendance of Directors to the Board meetings and committee

meetings.

Name of Director Board MeetingAudit Committee

Meeting

Dr. S.R. Rajiyah 3/4 -

Mrs. I.R. Rajiyah 3/4 -

Mr. S.V. Rajiyah 4/4 -

Mr. S. Vasanthakumara 3/4 -

Mr. C.J. De S. Amaratunge 4/4 4/4

Mr. P.C.K. Abeykoon - 1/4

Mr. L.M. Abeywickrama 4/4 4/4

Mr. W. Rajapakshe 1/4 -

Mr. J. Brennan

(Resigned 31/3/2013)- -

Mr. M. Terfloth 1/4 -

Ms. A.L. Rajiyah 1/4 -

Mr. M.K.A. Ranglin

(Appointed 01/04/2013)- -

Board of Directors and Independence

Our Board currently has 11 members of which 5 members are Executive

Directors and six members are Non Executive Directors.

There is a Board balance and complies with the Independent Directors

criteria set out under Listing Rules of the Colombo Stock Exchange.

Together, the Directors with their wide experience in both the public and

private sectors and diverse academic backgrounds provide a collective

range of skills, expertise and experience which is vital for the successful

direction of the Group. A brief profile of each Director is presented on

page 06 to 07.

The Board periodically review directors composition with the Companies

that are similarly situated to ensure that board and committee

composition is reasonable and competitive.

Information

The Directors are provided with quarterly reports on performance,

minutes of quarterly meetings and such other reports and documents as

are necessary. The Chairman ensures all Directors are adequately briefed

on issues arising at Meetings.

Re-Election Of Directors

The provisions of the company’s Articles of Association require that

one third of the non executive directors retire at each annual general

meeting and the director who retires are those who have served for the

longest period after their appointment/ reappointment.


Going Concern

The Directors, after making necessary inquiries and reviews including

reviews of capital expenditure requirements, future prospects and

risks, have a reasonable expectation of the Company’s existence in the

foreseeable future. Therefore, the going concern basis is adopted in the

preparation on the Financial Statements.

Internal Control

The Board is responsible for the company’s internal controls and for

reviewing their effectiveness. Internal control is established with

emphasis placed on safeguarding assets, making available accurate and

timely information and imposing greater discipline on decision making.

It covers all controls, including financial, operational and compliance

control and risk management. It is important to state, however that any

system can ensure only reasonable and not absolute, assurance that

errors and irregularities are prevented or detected within a reasonable

time.

Communication with Stakeholders

Shareholders are provided with Quarterly Financial Statements and the

Annual Report, which the Group considers as its principal communication

with them and other stakeholders. These reports are provided to the

Colombo Stock Exchange.

Board Committees

To assist the Board in discharging its duties, various Board Committees

are established. The functions and terms of references of the Board

Committees are clearly defined and where applicable, comply with

the recommendations of the Code of the Best Practice and Corporate

Governance. The audit committee ensures the integrity of financial

information, the effectiveness of the financial controls and the internal

controls and risk management system.

Corporate Governance Disclosure

The Company has published quarterly Financial Statements with the

necessary explanatory notes as required by the rules of the Colombo

Stock Exchange and the Securities and Exchange Commission of Sri Lanka

to all stakeholders. Any other financial and non financial information,

which is price sensitive or warrants the shareholders and stakeholders,

attention and consideration, is promptly disclosed in public.

Major Transactions

There are no transactions during the year review which fall within the

definition of “Major Transactions” in terms of the Companies Act.

Auditors' Report

The Auditors' Report on the Financial Statement is given on page 20 of

this Annual Report

Corporate Governance (Contd)


Audit Committee Report

The Audit Committee appointed by and responsible to the Board of

Directors comprise of three Non Executive Directors. The Managing

Director, Financial Controller and Company Secretary attends the

meetings by invitation.

Meetings

The Audit Committee met four times during the year. The members of

the audit committee are:

Mr. P.C.K. Abeykoon

Mr. C.J. De S. Amaratunge


Financial Reporting System

The Committee reviewed the financial reporting system adopted

by the Group in the preparation of its quarterly and annual Financial

Statements in order to assess reliability of the process and consistency

of accounting policies and their compliance with the Sri Lanka Financial

Reporting Standards/Sri Lanka Accounting Standards (SLFRSs and LKASs)

promulgated by The Institute of Chartered Accountants of Sri Lanka

(ICASL). The Audit Committee obtained Statements of Compliance from

the Business Unit Heads where appropriate.

The Committee reviewed the adequacy of disclosure and the presentation

formats of the published Financial Statements and adequacy of the

content and quality of routine management information forwarded to

its members.

The quarterly and annual Financial Statements are recommended to

the Board of Directors for their deliberation and issuance by the Audit

Committee.

External Audit

The Committee carried out an annual evaluation of the External Auditors

to establish their independence. The Audit Committee has recommended

to the Board of Directors that Messrs. KPMG, Chartered Accountants to be

re-appointed as Auditors for the financial year ending 31st March 2014.

Compliance with Law and Regulations

The Committee reviewed the quarterly compliance reports submitted by

the relevant officers to ensure that the Group complied with all statutory

requirements.

Conclusion

The Audit Committee is satisfied that the Group’s accounting policies,

operational controls and risk management processes provide reasonable

assurance that the affairs of the Group are managed in accordance with

Group policies. Group assets are properly accounted for an adequately

safeguarded.

Sgd.

P.C.K. Abeykoon

Chairman

Audit Committee

05th August, 2013


The Remuneration Committee of Renuka Agri Foods PLC being that

of its ultimate parent company comprises of the three Non-Executive

Directors. It is responsible for determining the remuneration packages of

the key Management Personnel of the Group.

Members are:

Mr. C.J.De.S.Amaratunga

Chairman

Mr M.S.Dominic

Member

Mr L.M.Abeywickrama

Member

The Committee formally met once during the year with Managing

Director attending it by invitation.

The Committee strongly believes that it must formulate policies so as

to ensure that the objectives of the Remuneration Committee Charter

are met. It is also committed to attract, retain and motivate the key

Management Personnel.

The Remuneration Committee also took into consideration the

market rates prevailing at the time of performance evaluation of key

Management Personnel. Individual remuneration packages are designed

to be fair to the company and to its employees.

Sgd.

C.J. De S. Amaratunga

Chairman

Remuneration Committee

05th August, 2013

Remuneration Committee Report


Enterprise Risk Management and issues pertaining to employees and

industrial relations.

The Board has overall responsibility for risk management and internal

control within the context of achieving the Group’s objectives

An effective risk management framework enables us to prioritize and

allocate resources against those risks that underscore the ongoing

sustainability of the organization. Our systematic policies help us to

identify and uncover risks and help us to be cognizant of the same. This

preparedness builds the resilience of the organization and allows us to

put in place procedures for risk mitigation.

The principal risk in achieving the Group objective of enhancing

shareholder value and safeguarding the Group’s assets have been

identified as set out below. The nature and the scope of risks are subject

to change and not all of the factors listed are within the control of your

Company. It should be noted that the other factors besides those listed

may affect the performance of the business.

A dedicated team is demarcated to assist the Board in reviewing risk

factors at regular intervals and monthly risk evaluation meetings ensure

that the focus from effective risk coverage never shifts. The Board is

kept updated on the progress and its opinion sought for mitigating any

challenges that might emerge.

Risk Management

Our Group’s risk management framework takes into account the range

of risks to be managed, the systems and processes in place to deal with

these risks, and the chain of responsibility within the organization to

monitor the effectiveness of our mitigation measures. The risks that we

take into account in the pursuit of our business goals are detailed below.

Credit Risk

Credit risk is where the customer of the Group is unable to meet

his financial obligations. This is a strong possibility in the conduct of

business for any organization and in order to mitigate this, we measure

monitor and manage credit risk for each borrower, having put into place

clear credit approval procedures. We regularly review credit ratings

of customers, constantly updating our records to ensure complete

awareness of the credit status of borrowers, in order to mitigate any ill

effects from this type of risk. We also ensure all are foreign customers

are credit worthy and dealt through letters of credit etc.

Legal and Regulatory Risk

We monitor and review the introduction of new regulation or the

amendments to existing regulation by the government locally and or

internationally which may be adverse to business and complexity in

complying with all regulatory requirements.

Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed

internal processes, people and systems or from external events.

The Group has put in place a structured internal control frame work in

place to mitigate this risk, comprising of a sophisticated MIS system and

insurance policies. Moreover, a clear system is followed whereby any

loss is communicated to all related parties and across the company to

prevent a similar incident in the future. Regular meetings are conducted

to assess these risks. Back up as well as disaster recovery plans are

implemented.

Attraction and Retention of Talent

This is risk arising from the inability to attract and retain skilled staff

at middle to senior management. The migration of skilled workers has

created a brain drain situation and the Group remains at risk of losing

key personnel to better job prospects overseas. To mitigate this risk,

the Group retains its skills and main personnel via above industry

remuneration schemes, skills upgrading room for professional growth

performance based reward systems and other best practices in training

motivation and recognition.

Market Risk

In overall to eliminate loss of market share or market leadership, we

monitor market and customer needs and develop innovations that add

value to our customers. We also enhance productivity and efficiency to

improve price competitiveness and investing in high quality machinery

and equipment.

Product Risk

Product risk implies any negative effect of perceived impact of our

products on stakeholders in general which could bring down our market

share. We employ established operating procedures to review and

approve all raw materials prior to use to ensure that quality control

is maintained. We take into account safety, health and environmental

hazards to cover all avenues of possible negative publicity. Our research

and development team is equipped to field any technical questions

about our product, whilst our marketing and distribution procedures

ensure complete control of the supply chain.

Financial Risk

Financial risk management obligations and policies have been described

in the note No. 37 of the notes to the Financial Statement.

Issues Pertaining to Employees and Industrial Relationship

The Board of Directors reviews all the issues with regard to employees

and Industrial Relation which affect the performance of the Group.

Renuka Agri Foods PLC takes considerable amount of steps to ensure

employees are satisfied at all the levels and their issues are addressed in

order to retain talented employees. A well structured grievance handling

system is in place to handle the grievance of employees at all levels.

We also ensure proper industrial relationships with all the governmental

agencies. There are no issues which affect the company’s performance

to be disclosed.

Risk Management


Sustainability is the key element of our strategy for future growth where

the resource efficient, environmentally responsible manufacturing of

products and provision of services that deliver sustainability benefits can

leverage commercial advantage for the group.

The key business drivers for sustainability are internal operations and

stakeholder engagement. The first focuses on our internal operations

and manufacturing our products and provision of our services more

efficiently using fewer resources. This approach helps us to reduce our

costs and as the same time reduces our impact on the environment.

The second approach focuses on our partnerships with our stakeholders.

Stakeholders are any individual or party that has an interest in our group,

and who are affected by, or can affect our organizational activities.

Partnerships help to build trust among our key stakeholders and to reach

a better understanding on a variety of issues. It can also pave the way

for more successful solutions to problems, concerns and challenges.

Internal Operations

Economic Performance-Implemented IT/ERP systems for the group

which monitors all aspects in providing up to date information and real

time data.

Environmental Impact -Renuka has strived to ensure that all our

manufacturing and production processes will not knowingly harm

people and will minimize the negative impact our business will have on

human life. We maintain in good order the property we are privileged to

use, protecting the environment and our natural resources.

Renuka Work place- At Renuka we have created a work place policy and

created employee awareness for the total group. With an expanding

employee base , creation of a group identity and belongingness is

priority. We also have an open communication policy and implemented

a process to identify corruption within the business units. Effective two

way communication with employees is important and in particular face

to face dialogue. Communication on matters is through in-house email

presentation and team briefings. Employees are also encouraged to

access the corporate websites.

Stakeholder Engagement

Our business partners- We have built lasting business relationships all

over the world and not only centered in Sri Lanka. It is through our

business partners that we co-exist to full fill customer needs and wants.

We also look at our business partners as a resource base to develop

business efficiencies and innovative products.

Our Customers- In meeting their needs, everything we must do must

be of world class quality. We engage our customers through weekly,

monthly and annual meetings, customer visits, International trade fair

participation and corporate websites.

Our Employees- The foundation that our business is built on. Our constant

employee engagement helps us to retain and motivate our employees

and to maintain an organizational culture formed by respect, honesty

and integrity. We pay considerable attention to employee remuneration,

career and progress, health and safety and organizational ethics.

Local Community- Renuka has been actively involved in supporting

the rural farmer network for our coconut division as well as the dairy

division. Renuka procures over Rs 1 Bn worth of produce from our

farmer net work. It also conducts farmer training programmes, medical

camps, veterinary services which assist in improving the livelihood and

wellness of the communities within Sri Lanka.

Renuka considers engagement to be an increasingly important

component of its corporate citizenship strategy. Our engagement efforts

help Renuka identify those issues that are most material to our business

operations and shape our approach to addressing a range of areas

relating to the financial, social and environmental performance of the

organization.

Our Investors/Shareholders- Shareholder engagement is important to

us to have access to growth capital and in the process we must make

a sound profit. In meeting global challenges and evolving consumer

needs we must be geared to be proactive with new ideas and ready

with the output as well. When we operate according to these principles

the shareholders should realize a fair return.

Sustainability Report


The Board of Directors of Renuka Agri Foods PLC is pleased to present

its Report and the Audited Financial Statements of the Company and its

subsidiaries (‘the Group’) for the financial year ended 31st March 2013.

The details set out herein provide the pertinent information required by

the Companies Act No.07 of 2007, the Colombo Stock Exchange Rules

and are guided by recommended best Accounting Practices.

The Principal Activities of the Group and Structure

There were no significant changes in the nature of the principal activities

of the company and its subsidiaries during the financial year under review

where the principal activity of the company to manufacture and export

of Coconut Milk, Coconut Milk Powder, UHT treated Coconut Milk, Coconut

Water and by products derived out of primary processing of Coconut. The

activity of the Group is namely Agri business and companies within each

sub sector and their principal activities are described on page 66 of the

Annual Report.

Review of Business

The review of the performance during the year, with comments on

financial results and future developments is contained in the Chairman’s

statement. These reports form an integral part of the report of the

Directors.

Financial Results

The company recorded a net profit of Rs.231 Mn and Rs.190 Mn at group

level for the year. An abridgment of the performance is presented in the

table below.

Group CompanyFor the year ended 31st March

2013 2012 2013 2012(Rs.'000) (Rs.'000) (Rs.'000) (Rs.'000)

Profit after Taxation 189,690 337,893 230,521 315,180

Profit available for

appropriation 714,865 609,279 748,353 599,687

Auditors' Report

The Auditors' Report on the Financial Statement is given on page 20 of

this Annual Report

Significant Accounting Polices

The accounting policies adopted in the preparation of the Financial

Statements are given on pages 26 to 33 There have been no changes

in the accounting policies adopted by the Group during the year under

review.

Financial Statements

Financial Statements of the Group comprises the Statement of Financial

Position, Statement of Comprehensive Income, changes in equity

and cash flow together with the accounting policies and notes to the

Financial Statements for the year ended 31st March 2013 are set out in

pages 21 to 66.

Statement of Directors’ Responsibilities

The Statement of Director’s Responsibilities for the Financial Statements

is given on page 18.

Board of Directors

The following Directors held office as at the Statement of Financial

Position date. Brief portfolios of the Current Directors are given in pages

06 & 07 of the Annual Report.

Directors ExecutiveNon-

ExecutiveIndependent

Dr S.R.Rajiyah √

Mrs I.R.Rajiyah √

Mr S.V.Rajiyah √

Ms A.L.Rajiyah √

Mr W.Rajapakshe √ √

Mr P.C.K.Abeykoon √ √

Mr S.Vasanthakumara √ - -

Mr C.J.De.S.Amaratunge √ √

Mr L.M.Abeywickrama √ -

Mr J.Brennan √ √

Mr M.Terfloth √ -

All Directors’ held office during the entire year.

The following Directors; served as members of the Audit Committee and


Audit Committee

Mr. P.C.K. Abeykoon




Mr. C.J. De S. Amaratunga

Mr. M.S. Dominic


Report of the Directors


Directors’ Interest

Directors’ interests in contracts or proposed contract with the Company

both direct and indirect are disclosed on pages 49 to 52 of the Annual

Report under related party transactions the above discloses the

transaction with entities where a Director of the either has control or

exercise significant influence. These interests have been declared at

Director’s Meetings.

Directors’ interests in transactions and shares

The Directors have no direct or indirect interest in any other contracts

or proposed contracts in relation to the business of the Company, while

they had the following interest in Ordinary shares of the Company.

As at 31st March 2013 2012

Dr. S.R. Rajiyah 20 -

Dr. & Mrs. I.R.Rajiyah (Jt) 8,426,258 3,300,020

Mr. S.V. Rajiyah 1,404,375 100,111

Mr. P.C.K. Abeykoon -

Mr. W. Rajapakshe -

Mr. C.J. De S. Amaratunge -

Mr. L.M. Abeywickrama 28,000 20,000

Mr. S. Vasanthakumara 1,010 1,010

Mr. J. Brennan - -

Mr. M. Terfloth - -

Ms. A.L. Rajiyah 1,219,483 -

Remuneration of Directors

Directors’ Remuneration, in respect of the Company for the financial year

ended 31st March 2013 is given in Note 07 to the Financial Statements,

on page 34.

Recommendation for re-election

In terms of Article 28 (2) of the Articles of Association of the Company,

Ms. A.L. Rajiyah and Mr. M.K.A. Ranglin retire and being eligible; offer

themselves for re-election at the forthcoming Annual General Meeting.

In terms of Article 30 (1) of the Articles of Association of the Company,

Mr. P.C.K. Abeykoon retires by rotation and is not seeking for

re-appointment at the forthcoming Annual General Meeting.

Mr. C.J. de S. Amaratunge who is above the age of 70 years and a

notice of an Ordinary Resolution has been received from a shareholder

pursuant to Section 211 of the Companies Act No. 07 of 2007, for the

re-appointment of Mr. C.J.de S. Amaratunge at the forthcoming Annual

General Meeting, notwithstanding the age limit of 70 years stipulated

by Section 210 of the Companies Act No. 7 of 2007. The Directors

recommend the adoption of the Ordinary Resolution.

Corporate Donations

During the year donations amounting to Rs.75,000/- were made by the

Group.

Auditors

Company’s Auditors during the year under review were Messrs. KPMG,

Chartered Accountants. Their report on the Financial Statements is given

on page 20 of the Annual Report.

As far as the Directors are aware the Auditors do not have any other

relationship or interest with the Company other than that of an auditor

of the Company.

The retiring auditors have expressed their willingness to continue in

office. A resolution to re-appoint them as Auditors of the Company and

authorizing the Directors to fix their remuneration will be proposed at

the Annual General Meeting.

Corporate Governance

Compliance of corporate governance rules as per the Listing Rules of the

Colombo Stock Exchange (CSE)

Solvency Test

Solvency Test has been carried out by the Board of Directors before the

payment of the final dividend as required by the Companies Act No.7

of 2007.

Dividends

The Board of Directors has recommended a payment of Rs.0.10 per

share payable for 2012/2013 (2011/2012– Rs 0.14 per share) Board

of Directors has obtained the solvency report before deciding that the

company would meet the Solvency Test requirement under section 56

(2) of the companies Act No.7 of 2007 immediately after the proposed

final dividend distribution.

Stated Capital

The stated capital of the Company as at 31st March 2013 was Rs.1.194

Bn consisting of 561,750,000 Ordinary shares

Shareholders Funds

Total Group shareholders funds stood at Rs.1.909 Bn as at 31st March

2013 (2012 Rs.1.162 Bn) comprising of stated capital of Rs.1.194 Bn and

reserves of Rs.0.715 Bn. The movements are shown in the statement of

changes in equity.

Report of the Directors (Contd)


Property, Plant & Equipment

The carrying value of Property, Plant & Equipment for the company and

the group as at 31st March 2013 amounted to Rs.1.386 Bn and Rs.491 Mn

respectively. The total expenditure on the acquisition of property, plant

& equipment during the year in respect of new assets and replacements

by the company and the group amounted to Rs.60 Mn and Rs.358 Mn

(including through acquisition of subsidiaries) respectively.

Statutory Payments

The Directors to the best of their knowledge and belief are satisfied that

all statutory payments have been paid up to date or have been provided

for in these Financial Statements

Going Concern

The Board of Directors is satisfied that the Company has adequate

resources to continue its operations in the foreseeable future.

Accordingly the Financial Statements are prepared based on the going

concern concept.

Events Occurring After the Reporting Date

Subsequent to the reporting date, no material circumstances have

arisen, which would require adjustments to or disclosure in these

Financial Statements other than those disclosed in note 34 to these

Financial Statements.

Share information

Information relating to shareholding earnings dividend, net assets and

market price per share are given on pages 69 to 70 of the Annual Report.

Annual Report

The Board of Directors approved the Company’s Financial Statements

together with the reviews which forms part of the Annual Report, on

05th August, 2013. The appropriate number of copies of the Report would

be submitted to the Colombo Stock Exchange, Sri Lanka Accounting and

Auditing Standard Monitoring Board and the Registrar of Companies

within the given time frames.

Notice of Meeting

The notice of meeting of the 13th Annual General Meeting is given on

page 71.

Public Holding

The percentage of shares held by the public as at 31st March 2013 was

47.94%.

By order of the Board

Sgd. Sgd. Sgd.

Dr. S.R. Rajiyah C.J. De S. Amaratunge Renuka Enterprises

(Private) Limited

Chairman Director Company Secretaries

05th August, 2013

Report of the Directors (Contd)


This Statement of Directors’ Responsibilities is to be read in conjunction

with the Report of the Auditors and is made to distinguish the respective

responsibilities of the Directors and to the Auditors in relation to the

Financial Statements contained in this Annual Report.

The Directors of your Company are required by the Companies Act No.7

of 2007 to prepare Financial Statements which give a true and fair view

of the state of affairs of the Company and of the Group as at the end of

the financial year, and of the income and expenditure of the Company

and of the Group for the financial year.

The Directors confirm that the Financial Statements of the Company for

the year ended 31st March 2013 presented in the Report have been

prepared in accordance with the Sri Lanka Accounting Standards and the

Companies Act of No.7 of 2007. In preparing the Financial Statement,

the Directors have selected appropriate accounting policies and have

applied them consistently. Reasonable and prudent judgment and

estimates have been made and applicable accounting standards have

been followed and the Financial Statements have been prepared on a

going concern basis.

The Directors are of the view that adequate funds and other resources

are available within the company for the company to continue in

operation for the foreseeable future.

The Directors have taken all reasonable steps expected of them to

safeguard the assets of the Company and of the Group and to establish

appropriate systems of internal controls in order to prevent, deter and

detect any fraud, misappropriation or other irregularities.

The Directors have also taken all reasonable steps to ensure that the

Company and its subsidiaries maintain adequate and accurate accounting

books of record which reflect the transparency of transactions and

provide an accurate disclosure of the Company’s financial position.

The Directors are required to provide the Auditors with every opportunity

to take whatever steps and undertake whatever inspection they

consider appropriate for the purpose of enabling them to give their Audit

Report. The Directors are of the view that they have discharged their

responsibilities in this regard.

Compliance Report

The Directors confirm that, to the best of their knowledge all taxes and

levies payable by the Company and all contributions, levies and taxes

payable on behalf of the employees of the Company, and all other

known statutory obligations as at the reporting date have been paid or

provided for in the Financial Statements.

As required by section 56 (2) of the Companies Act No.7 of 2007,

the Board of Directors have confirmed that the Company satisfies the

Solvency test immediately after the distribution, in accordance with

section 57 of the Companies Act No.7 of 2007.

By order of the Board

Sgd.

Renuka Enterprises (Private) Limited

Company Secretaries

05th August, 2013

Statement of Directors Responsibility


Financial

Reports

Contents

20 Independent Auditors' Report

21 Statements of Comprehensive Income

22 Statements of Financial Position

23-24 Statement of Changes of Equity

25 Statement of Cash Flows

26-64 Notes to the Financial Statements


Independent Auditors' Report

KPMG, a Sri Lanka Partnership and a member firmof the KPMG network of independent member firmsaffilliated with KPMG International cooperative(“KPMG International”), a Swiss entity.

M.R. Mihular FCAT.J.S. Rajakarier FCAMs. S.M.B. Jayasekara ACAG.A.U. Karunaratne ACA

Principals - S.R.I. Perera ACMA, LLB, Attorney-at-law, H.S. Goonewardene ACA

P.Y.S. Perera FCAW.W.J.C. Perera FCAW.K.D.C Abeyrathne ACAR.M.D.B. Rajapakse ACA

C.P. Jayatilake FCAMs. S. Joseph ACAS.T.D.L. Perera ACAMs. B.K.D.T.N. Rodrigo ACA

KPMG Tel : +94 - 11 542 6426(Chartered Accountants) Fax : +94 - 11 244 587232A, Sir Mohamed Macan Markar Mawatha, +94 - 11 244 6058P. O. Box 186, +94 - 11 254 1249 Colombo 00300, +94 - 11 230 7345Sri Lanka. Internet : www.lk.kpmg.com

TO THE SHAREHOLDERS OF RENUKA AGRI FOODS PLC

Report on the Financial Statements

We have audited the accompanying financial statements of Renuka Agri

Foods PLC (“the Company”) and the consolidated financial statements

of the Company and its subsidiaries (“the Group”), which comprise the

statements of financial position as at 31st March 2013, the statements

of comprehensive income, changes in equity and cash flows for the year

then ended, and notes, comprising a summary of significant accounting

policies and other explanatory information set out on pages 26 to 64 of

the annual report.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation

of these financial statements in accordance with Sri Lanka Accounting

Standards. This responsibility includes: designing, implementing

and maintaining internal control relevant to the preparation and

fair presentation of financial statements that are free from material

misstatement, whether due to fraud or error; selecting and applying

appropriate accounting policies; and making accounting estimates that

are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our responsibility is to express an opinion on these financial statements

based on our audit. We conducted our audit in accordance with

Sri Lanka Auditing Standards. Those standards require that we plan and

perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement.

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

amounts and disclosures in the financial statements. An audit also

includes assessing the accounting policies used and significant estimates

made by management, as well as evaluating the overall financial

statement presentation.

We have obtained all the information and explanations which to the

best of our knowledge and belief were necessary for the purposes of our

audit. We therefore believe that our audit provides a reasonable basis

for our opinion.

Opinion - Company

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

maintained proper accounting records for the year ended 31st March

2013 and the financial statements give a true and fair view of the

financial position of the Company as at 31st March 2013, and of its

financial performance and its cash flows for the year then ended in

accordance with Sri Lanka Accounting Standards.

Opinion - Group

In our opinion, the consolidated financial statements give a true and fair

view of the financial position of the Company and its subsidiaries dealt

with thereby as at 31st March 2013 and of its financial performance

and its cash flows for the year then ended in accordance with Sri Lanka

Accounting Standards.

Report on Other Legal and Regulatory Requirements

These financial statements also comply with the requirements of

Sections 153(2) to 153(7) of the Companies Act No. 07 of 2007.

Chartered Accountants

05th August 2013

Colombo


GROUP COMPANY

For the year ended 31st March 2013 2012 2013 2012Note Rs. Rs. Rs. Rs.

Revenue 5 2,564,829,166 1,975,027,640 1,478,635,687 1,626,891,682

Cost of Sales (1,960,021,955) (1,351,955,870) (1,098,168,465) (1,111,179,132)

Gross Profit 604,807,211 623,071,770 380,467,222 515,712,550

Other Operating Income 6 70,402,585 34,886,551 8,604,564 3,565,731

Administration Expenses (223,453,727) (170,449,950) (108,106,893) (84,191,359)

Selling and Distribution Expenses (238,671,197) (121,942,563) (34,144,939) (93,254,212)

Profit from Operations 7 213,084,872 365,565,808 246,819,954 341,832,710

Net Financing Costs 8 (22,214,520) (29,324,799) (10,019,907) (26,688,048)

Profit Before Tax 190,870,352 336,241,009 236,800,047 315,144,662

Taxation 9 (1,179,750) 1,652,845 (6,278,969) 35,405

Profit for the year 189,690,602 337,893,854 230,521,078 315,180,067

Other Comprehensive Income - - - -

Total Comprehensive Income for the Year 189,690,602 337,893,854 230,521,078 315,180,067

Profit Attributable to:

Owners of the Company 200,000,582 316,443,340 230,521,078 315,180,067

Non Controlling Interest (10,309,980) 21,450,514 - -

Profit for the Year 189,690,602 337,893,854 230,521,078 315,180,067

Total Comprehensive Income Attributable to:

Owners of the Company 200,000,582 316,443,340 230,521,078 315,180,067

Non Controlling Interest (10,309,980) 21,450,514 - -

Total Comprehensive Income for the Year 189,690,602 337,893,854 230,521,078 315,180,067

Basic Earnings Per Share 10.1 0.36 0.79 0.41 0.79

Dividend Per Share 10.2 0.14 0.10 0.14 0.10

Figures in brackets indicate deductions

The Financial Statements are to be read in conjunction with the related notes, which form a part of the Financial Statements of the Group set out on pages 26 to 64.

Statements of Comprehensive Income


GROUP COMPANY

As at 31/03/2013 31/03-2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Note Rs. Rs. Rs. Rs. Rs. Rs.

ASSETS

Non-Current AssetsProperty, Plant and Equipment 11 1,385,758,547 1,149,576,596 472,112,990 491,491,390 467,124,997 277,944,658 Biological Assets 12 29,513,248 28,098,711 5,633,879 - - - Intangible Assets 13 8,175,558 10,918,522 - 8,175,558 10,918,522 - Immovable Estate Assets on Lease 14 54,999,984 57,749,988 60,499,992 - - - Premium Paid for Leasehold Premises 15 2,555,532 2,624,602 2,693,672 2,555,532 2,624,602 2,693,672 Investments Property 16 283,495,321 55,089,160 46,274,894 - - - Investment In Subsidiaries 17 - - - 1,353,875,000 670,625,000 146,875,000 Goodwill on Acquisition 18 267,425,254 265,553,003 - - - -

2,031,923,444 1,569,610,582 587,215,427 1,856,097,480 1,151,293,121 427,513,330

Current AssetsInventories 19 356,029,941 317,728,021 250,603,984 232,118,876 241,326,137 207,657,221 Trade and Other Receivables 20 356,570,036 216,781,989 112,294,137 221,064,227 130,806,938 87,473,371 Tax Recoverable 21 25,089,030 18,393,159 19,331,656 13,803,958 8,660,850 4,425,119 Amounts Due from Related Companies 22 376,554,189 56,854,204 30,044,873 91,776,037 177,975,141 122,547,997 Cash and Cash Equivalents 23 109,616,498 77,189,143 158,770,140 30,177,569 40,365,512 129,464,899

1,223,859,694 686,946,516 571,044,790 588,940,667 599,134,578 551,568,607 Total Assets 3,255,783,138 2,256,557,098 1,158,260,217 2,445,038,147 1,750,427,699 979,081,937

EQUITY AND LIABILITIESEquityStated Capital 24 1,194,452,950 552,452,950 552,452,950 1,194,452,950 552,452,950 552,452,950 Retained Earnings 714,865,218 609,279,419 345,798,614 748,352,602 599,686,524 324,631,457

1,909,318,168 1,161,732,369 898,251,564 1,942,805,552 1,152,139,474 877,084,407 Non Controlling Interest 482,739,080 129,697,848 34,987,389 - - -

2,392,057,248 1,291,430,217 933,238,953 1,942,805,552 1,152,139,474 877,084,407

Non-Current LiabilitiesRetirement Benefit Obligations 25 26,028,208 23,514,010 10,749,268 13,658,403 10,893,054 6,358,287 Loans and Borrowings 26.2 161,253,497 117,564,188 13,096,316 130,499,267 108,055,784 13,100,651 Finance Lease Obligations 27 63,304,808 65,486,066 67,000,000 - - - Deferred Tax Liability 28 40,749,482 48,928,708 18,604,475 18,172,990 16,089,215 16,883,651

291,335,995 255,492,972 109,450,059 162,330,660 135,038,053 36,342,589

Current LiabilitiesLoans and Borrowings 26.1 109,924,184 222,699,677 18,219,861 87,783,573 207,019,693 3,208,356 Finance Lease Obligations 27 2,181,258 2,163,702 2,128,079 - - - Trade and Other Payables 29 305,394,597 311,707,187 65,868,240 187,246,980 162,875,611 50,767,917 Amounts Due to Related Companies 30 3,420,232 62,315,463 7,167,052 18,371,751 52,775,357 3,449,314 Dividend Payable 2,075,762 1,993,936 1,350,000 725,762 643,936 - Income Tax Payable 2,170,350 1,114,337 6,454,541 - - - Bank Overdraft 23 147,223,512 107,639,607 14,383,432 45,773,869 39,935,575 8,229,354

572,389,895 709,633,909 115,571,205 339,901,935 463,250,172 65,654,941 Total Liabilities 863,725,890 965,126,881 225,021,264 502,232,595 598,288,225 101,997,530 Total Equity and Liabilities 3,255,783,138 2,256,557,098 1,158,260,217 2,445,038,147 1,750,427,699 979,081,937


I certify that the Financial Statements have been prepared in compliance with the requirement of the Companies Act No. 07 of 2007

Sgd.D.C.F. KaththriarachchigeFinancial Controller

The Board of directors is responsible for preparation and presentation of these Financial Statements. Approved and signed for and on behalf of the Board:

Sgd. Sgd.Dr. S.R. Rajiyah C.J. De. S. AmaratungaChairman Director

05th August, 2013Colombo

Statements of Financial Position


For the year ended 31st March Stated Capital

Retained Earnings

Total Equity

Rs. Rs. Rs.

Company

Balance as at 1st April 2011 as Previously Stated 552,452,950 324,631,457 877,084,407

Impact of Adopting SLFRSs as at 1st April 2011 - - -

Restated Balance as at 1st April 2011 552,452,950 324,631,457 877,084,407

Profit for the Year - 315,180,067 315,180,067

Other Comprehensive Income - - -

Total Comprehensive Income - 315,180,067 315,180,067

Transactions with Owners of the Company, Recognized

Directly in Equity

Dividend Paid - (40,125,000) (40,125,000)

Total Transactions with Owners of the Company - (40,125,000) (40,125,000)

Balance as at 31st March 2012 552,452,950 599,686,524 1,152,139,474

Balance as at 1st April 2012 552,452,950 599,686,524 1,152,139,474

Profit for the Year - 230,521,078 230,521,078


Total Comprehensive Income - 230,521,078 230,521,078


Directly in Equity

Right Issue During the Year 642,000,000 - 642,000,000

Direct Cost on Share Issue - (3,210,000) (3,210,000)

Dividend Paid - (78,645,000) (78,645,000)

Total Transactions with Owners of the Company 642,000,000 (81,855,000) 560,145,000

Balance as at 31st March 2013 1,194,452,950 748,352,602 1,942,805,552



Statement of Changes of Equity


Equity Attributable to Owners

For the year ended 31st March Stated Capital

Retained Earnings

Total Non

Controlling Interest

Total Equity

Rs. Rs. Rs. Rs. Rs.

Group

Balance as at 1st April 2011 as Previously Stated 552,452,950 335,273,890 887,726,840 34,311,901 922,038,741

Impact of adopting SLFRSs as at 1st April 2011 - 10,524,724 10,524,724 675,488 11,200,212

Restated Balance as at 1st April 2011 552,452,950 345,798,614 898,251,564 34,987,389 933,238,953

Profit for the year - 316,443,340 316,443,340 21,450,514 337,893,854

Other Comprehensive Income - - - - -

Total Comprehensive Income - 316,443,340 316,443,340 21,450,514 337,893,854


Directly in Equity

Adjustment due to

- Acquisition of Subsidiary - - - 75,614,841 75,614,841

- Change in Percentage Holdings - (4,073,204) (4,073,204) 4,071,563 (1,641)

Reversal of Revaluation Reserve - (8,764,331) (8,764,331) (2,722,761) (11,487,092)

Dividend Paid - (40,125,000) (40,125,000) (3,703,698) (43,828,698)

Total Transactions with Owners of the Company - (52,962,535) (52,962,535) 73,259,945 20,297,410

Balance as at 31st March 2012 552,452,950 609,279,419 1,161,732,369 129,697,848 1,291,430,217

Balance as at 1st April 2012 552,452,950 609,279,419 1,161,732,369 129,697,848 1,291,430,217

Profit for the year - 200,000,582 200,000,582 (10,309,980) 189,690,602

Other Comprehensive Income - - - - -

Total Comprehensive Income - 200,000,582 200,000,582 (10,309,980) 189,690,602


Directly in Equity

Adjustment due to

- Disposal of Subsidiary - (3,382,855) (3,382,855) 7,211,262 3,828,407

- Acquisition of Subsidiary - - - 448,089,688 448,089,688

- Changes in Percentage Holdings - (9,176,928) (9,176,928) (90,823,072) (100,000,000)

Dividend Paid - (78,645,000) (78,645,000) (1,126,666) (79,771,666)

Right Issue During the Year 642,000,000 - 642,000,000 - 642,000,000

Share Issue Expenses - (3,210,000) (3,210,000) - (3,210,000)

Total Transactions with Owners of the Company 642,000,000 (94,414,783) 547,585,217 363,351,212 910,936,428

Balance as at 31st March 2013 1,194,452,950 714,865,218 1,909,318,168 482,739,080 2,392,057,248



Statement of Changes of Equity (Contd)


GROUP COMPANY

For the year ended 31st March 2013 2012 2013 2012Rs. Rs. Rs. Rs.

Cash Flows Operating Activities


Adjustment For

Depreciation 77,463,171 46,392,103 35,813,662 30,125,398

Fair Value Gain on Biological Assets (1,135,379) (22,023,127) - -

Amortization of Intangible Assets 2,742,964 2,729,631 2,742,964 2,729,631

Amortization of Immovable Estate Assets on Lease 2,750,004 2,750,004 - -

Profit on Disposal of Subsidiary (4,326,758) - - -

Provision for Retirement Benefit Obligation 6,994,232 7,151,165 4,527,149 4,753,767

Provision for impairment Losses on Trade and other Receivables 121,678 7,297,436 - -

Provision for Obsolete Inventories 5,940,464 - 5,940,464 -

Write off of Inventory - - - (2,232,576)

Net Finance Costs 18,713,904 6,284,824 6,308,980 2,087,642

VAT Recoverable Write Off - 1,882,668 - 1,860,522

Dividend Income - - (202,500) (450,000)

(Profit)/Loss on Disposal of Property, Plant and Equipment (36,300) 36,429 - -

Amortization of Prepaid Lease Rent 69,070 69,070 69,070 69,070

Operating Profit Before Working Capital Changes 300,167,402 388,811,212 291,999,836 354,088,116

(Increase)/Decrease in Inventories (65,747,914) (40,825,914) 3,266,797 (31,436,340)

Increase in Trade and Other Receivables (181,404,240) (68,038,378) (90,257,289) (43,333,567)

(Increase)/Decrease in Amounts due from Related Companies 97,300,015 (26,809,331) 86,199,104 (55,427,144)

Increase in Trade and Other Payables 21,378,320 78,249,730 24,371,369 112,107,694

Increase/(Decrease) in Amounts due to Related Companies 21,707,622 55,148,411 (34,403,606) 49,326,043

Cash Generated from operations 193,401,205 386,535,730 281,176,211 385,324,802

Gratuity paid (4,052,731) (1,264,260) (1,761,800) (219,000)

Interest Paid (37,728,705) (10,452,860) (20,038,362) (5,571,914)

Tax Paid (14,762,929) (6,464,548) (9,338,302) (6,855,284)

Net Cash Generated from Operating Activities 136,856,840 368,354,062 250,037,747 372,678,604

Cash flows from Investing Activities

Purchase of Property, Plant and Equipment (108,063,579) (217,242,667) (60,180,055) (219,305,737)

Purchase of Biological Assets (279,158) (441,705) - -

Purchase of Intangible Assets - (13,648,153) - (13,648,153)

Proceeds from Disposal of Investment - 5,000,000 - -

Proceeds from Disposal of Property, Plant and Equipment 36,300 303,571 - -

Investment in Debentures - - (602,000,000) -

Acquisition of Subsidiaries Net of Cash Acquired (Note 35.1) (449,883,677) (555,326,241) (100,000,000) (523,750,000)

Acquisition of Non-Controlling Interest (100,000,000) - - -

Interest Income Received 19,014,801 4,168,036 13,729,382 3,484,272

Proceeds from Disposal of Subsidiary 7,311,650 - 18,750,000 -

Net Cash flow used in Investing Activities (631,863,663) (777,187,159) (729,700,673) (753,219,618)

Cash flows from Financing Activities

Proceeds from Issue of Shares 642,000,000 - 642,000,000 -

Share Issue expenses (3,210,000) - (3,210,000) -

Loans and Borrowings During the Year 330,217,933 306,398,449 234,169,362 301,974,826

Repayment of Loans and Borrowings (399,304,117) (27,051,503) (330,961,999) (3,208,356)

Repayment of Lease Obligations (2,163,702) (2,166,260) - -

Dividend Income - - 202,500 450,000

Payment of Dividend (79,689,841) (43,184,761) (78,563,174) (39,481,064)

Net Cash Flows Generated From Financing Activities 487,850,273 233,995,925 463,636,689 259,735,406

Net Decrease in cash and cash equivalents (7,156,550) (174,837,172) (16,026,237) (120,805,608)Cash and Cash Equivalents at the Beginning of the year (30,450,464) 144,386,708 429,937 121,235,545

Cash and cash equivalents at the end of the year (Note 23) (37,607,014) (30,450,464) (15,596,300) 429,937



Statement of Cash Flows


Notes to the Financial Statements

1. CORPORATE INFORMATION

1.1. Reporting Entity

Renuka Agri Foods PLC is a public quoted Company incorporated

and domiciled in Sri Lanka. The registered office of the Company

is located at No. 69, Sri Jinarathana Road, Colombo 2.

The consolidated Financial Statements of the Company as at

and for the year ended 31st March 2013 comprise the Company

and its subsidiaries (together referred to as the “Group” and

individually as “Group entities”).

The principal activities of the Company and Group entities are

disclosed in Note 39 to the Financial Statements.

1.2. Parent and Ultimate Parent Undertaking

The company's parent undertaking is Renuka Shaw Wallace PLC

and the Company's ultimate parent is Renuka Group Limited.

1.3. Financial Year

Financial Statements of the Company and Group entities ends

on 31st March.

2. BASIS OF PREPARATION

2.1. Statement of Compliance

The Consolidated Financial Statements have been prepared

in accordance with the Sri Lanka Accounting standards issued

by the Institute of Chartered Accountants of Sri Lanka and the

requirements of the Companies Act No. 7 of 2007.

These are the Group’s first Financial Statements prepared in

accordance with Sri Lanka Financial Reporting Standards (SLFRS)

and SLFRS 1, “First-time Adoption of Sri Lanka Accounting

Standards” has been applied. An explanation of how the

transition to SLFRSs has affected the reported financial position

and financial performance of the Group is provided in the

Note 36 to the Financial Statements.

The consolidated Financial Statements were authorized for issue

by the Board of Directors on 05th August, 2013.

2.2. Basis of Measurement

The consolidated Financial Statements have been prepared on

the historical cost basis except for the following material items

in the statement of financial position:

� Biological assets are measured at fair value less costs to sell

� Investment property is measured at fair value

� Liability for defined benefit obligations is carried at the

present value of the defined benefit obligations.

2.3. Functional and Presentation Currency

These consolidated Financial Statements are presented in

Sri Lanka rupees, which is the Company’s functional currency.

All financial information presented has been rounded to the

nearest rupee unless otherwise indicated

2.4. Use of Estimates and Judgments

The preparation of the Financial Statements in conformity with

SLFRSs 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. Actual results may differ from these estimates.

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 and in any

future periods affected.

Information about critical judgments in applying accounting

policies that have significant effect on the amounts recognized

in the Financial Statements is included in the respective notes to

the Financial Statements.

Information about assumptions and estimation uncertainties

that have a significant risk of resulting in a material adjustment

within the next financial year are included in respective notes to

the Financial Statements

2.5. Going Concern

The Board of Directors has made an assessment of the Group’s

ability to continue as a going concern in the foreseeable future

and they do not intend to liquidate or cease trading.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied

consistently to all periods presented in these consolidated

Financial Statements and in preparing the opening SLFRS

statement of financial position at 1st April 2011 for the purposes

of the transition to SLFRSs, unless otherwise indicated. The

accounting policies have been applied consistently by Group

entities.

3.1. Basis of Consolidation

The consolidated Financial Statements include the Financial

Statements of the company, its subsidiaries and other

companies over which it has control. The group’s Financial

Statements comprise of the consolidated Financial Statements

of the company which have been prepared in compliance with

the group’s accounting policies.

3.1.1. Business Combinations

Business combinations are accounted for using the acquisition

method as at the acquisition date which is the date on which

control is transferred to the Group. Control is the power to

govern the financial and operating policies of an entity so as

to obtain benefits from its activities. In assessing control, the

Group takes into consideration potential voting rights that

currently are exercisable.


Notes to the Financial Statements (Contd)

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.

3.1.2 Non-Controlling Interests

Acquisitions of non-controlling interests are accounted for

as transactions with owners in their capacity as owners and

therefore no goodwill is recognized and as a result, adjustments

to non controlling interests arising from transactions that do not

involve the loss of control are based on a proportionate amount

of the net assets of the subsidiary

3.1.2. Subsidiaries

Subsidiaries are entities controlled by the Group. The Financial

Statements of subsidiaries are included in the consolidated

Financial Statements from the date that control commences

until the date that control ceases. The accounting policies of

subsidiaries have been changed when necessary to align them

with the policies adopted by the Group.

3.1.3. Loss of Control

On 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. If the Group retains any interest in the previous

subsidiary, then such interest is measured at fair value at the

date that control is lost. Subsequently it is accounted for as an

equity accounted investee or as an available-for-sale financial

asset depending on the level of influence retained.

3.1.4. Transactions Eliminated on Consolidation

Intra-group balances and transactions, and any unrealized

income and expenses arising from intra-group transactions, are

eliminated in preparing the consolidated Financial Statements.

Unrealized losses are eliminated in the same way as unrealized

gains, but only to the extent that there is no evidence of

impairment.

3.2. 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 at 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 at the date that 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.

Foreign currency differences arising on re-translation are

generally recognized in profit or loss.

3.3. Financial Instruments

3.3.1. Non-Derivative Financial Assets

The Group initially recognizes loans and receivables and deposits

on the date that they are originated. All other financial assets

are recognized initially on the trade date at which the Group

becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial asset when the contractual

rights to the cash flows from the asset expire, or it transfers

the rights to receive the contractual cash flows on the financial

asset in a transaction in which substantially all the risks and

rewards of ownership of the financial asset are transferred. Any

interest in transferred financial assets that is created or retained

by the Group is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount

presented in the statement of financial position when, and only

when, the Group has a legal right to offset the amounts and

intends either to settle on a net basis or to realize the asset and

settle the liability simultaneously.

The group classifies non derivative financial assets into the

following categories;

� Loans and Receivables

(a) Loans and Receivables

Loans and receivables are financial assets with fixed or

determinable payment that are not quoted in an active market.

Such assets are recognized at fair value plus any directly

attributable transaction costs. Subsequent to initial recognition

loans and receivables are measured at amortized cost using the

effective interest method, less any impairment losses.

Loans and receivables comprise of trade receivables, other

receivables, and cash & cash equivalents.


Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances and call

deposits with maturities of three months or less from the

acquisition date that are subject to an insignificant risk of

changes in their fair value and are used by the Group in the

management of its short-term commitments.

3.3.2. Non-Derivative Financial Liabilities

The Group initially recognizes debt securities issued and

subordinated liabilities on the date that they are originated. All

other financial liabilities are recognized initially on the trade

date at which the Group becomes a party to the contractual

provisions of the instrument.

The Group derecognizes a financial liability when its contractual

obligations are discharged or cancelled or expire. Financial

assets and liabilities are offset and the net amount presented

in the statement of financial position when, and only when, the

Group has a legal right to offset the amounts and intends either

to settle on a net basis or to realize the asset and settle the

liability simultaneously.

The Group classifies non-derivative financial liabilities into the

other financial liabilities category. Such financial liabilities are

recognized initially at fair value plus any directly attributable

transaction costs. Subsequent to initial recognition these

financial liabilities are measured at amortized cost using the

effective interest method.

Other financial liabilities comprise loans and borrowings, debt

securities issued, bank overdrafts, and trade and other payables.

Bank overdrafts that are repayable on demand and form an

integral part of the Group’s cash management are included as

a component of cash and cash equivalents for the statement of

cash flows.

3.3.3. Stated Capital

3.3.3.1 Ordinary Shares

Ordinary shares are classified as equity. Incremental costs

directly attributable to the issue of ordinary shares are

recognized as a deduction from equity, net of any tax effects.

3.4. Property, Plant and Equipment

3.4.1. Recognition and Measurement

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. The cost of self-constructed assets

includes the cost of materials and direct labor, any other costs

directly attributable to bringing the assets to a working condition

for their intended use, the costs of dismantling and removing

the items and restoring the site on which they are located.

Purchased software that is integral to the functionality of the

related equipment is capitalized as part of the equipment.

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.

Any 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 in profit

or loss.

3.4.2. Reclassification to Investment Property

When the use of a property changes from owner-occupied to

investment property, the property is re measured to fair value

and reclassified as investment property. Any gain arising on re

measurement is recognized in profit or loss to the extent the gain

reverses a previous impairment loss on the specific property,

with any remaining gain recognized in other comprehensive

income and presented in the revaluation reserve in equity.

Any loss is recognized in other comprehensive income and

presented in the revaluation reserve in equity to the extent

that an amount had previously been included in the revaluation

reserve relating to the specific property, with any remaining

loss recognized immediately in profit or loss.

3.4.3. 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

derecognized. The costs of the day-to-day servicing of property,

plant and equipment are recognized in profit or loss as incurred.

3.4.4. Depreciation

Items of property, plant and equipment are depreciated from

the date they are available for use or, in respect of self-

constructed assets, from the date that the asset is completed

and ready for use.

Depreciation is calculated to write off the cost of items of

property, plant and equipment less their estimated residual

values using the straight-line basis over their estimated useful

lives. Depreciation is generally recognized in profit or loss,

unless the amount is included in the carrying amount of another

asset. Leased assets are depreciated over the shorter of the

lease term and their useful lives unless it is reasonably certain

that the Group will obtain ownership by the end of the lease

term. Land is not depreciated.



The estimated useful lives for the current and comparative

years of significant items of property, plant and equipment are

as follows:

Class of Assets Useful Lifetime (Years)

Factory Buildings 40

Plant and machinery 10-20

Electrical Installation 10

Spare Parts and Tools 10

Laboratory Equipment 10

Factory Equipment 10

Office Equipment 10

Furniture and Fitting 10

Motor vehicles 05

3.5. Intangible Assets and Goodwill

3.5.1. Goodwill

Goodwill that arises upon the acquisition of subsidiaries is

included in intangible assets. Goodwill is measured at initial

recognition in accordance with accounting policy 3.1.1.

3.5.1.1 Subsequent Measurement

Goodwill is measured at cost less accumulated impairment

losses. In respect of equity accounted, investees, the carrying

amount of goodwill is included in the carrying amount of the

investment, and any impairment loss on such investment is not

allocated to any asset, including goodwill, that forms part of the

carrying amount of the equity accounted investee.

3.5.2. Other Intangible Assets

Other intangible assets that are acquired by the Group and

have finite useful lives are measured at cost less accumulated

amortization and accumulated impairment losses.

3.5.3. Subsequent Expenditure

Subsequent expenditure is capitalized only when it increases

the future economic benefits embodied in the specific asset to

which it relates. All other expenditure, including expenditure on

internally generated goodwill and brands, is recognized in profit

or loss as incurred.

3.5.4 Amortization

Except for goodwill, intangible assets are amortized on a

straight-line basis in profit or loss over their estimated useful

lives from the date that they are available for use.

Class of Assets Useful Lifetime (Years)

Computer Software 5 years

Amortization methods, useful lives and residual values are

reviewed at each reporting date and adjusted if appropriate.

3.6 Biological Assets

Biological assets are measured at fair value less costs to sell,

with any change therein recognized in profit or loss. Costs to

sell include all costs that would be necessary to sell the assets,

including transportation costs.

3.7 Investment Property

Investment property is a property held either to earn rental

income or for capital appreciation or for both, but not for sale in

the ordinary course of business, use in the production or supply

of goods or services or for administrative purposes.

3.7.1 Basis of Recognition

Investment property is recognized if it is probable that future

economic benefits that are associated with the investment

property will flow to the Group and cost of the investment

property can be reliably measured.

3.7.2 Measurement

An investment property is measured initially at its cost. The cost

of a purchased investment property comprises of its purchase

price and any directly attributable expenditure. The cost of a self

constructed investment property is its cost at the date when the

construction or development is complete.

The Group applies the fair value model for investment properties

in accordance with Sri Lanka Accounting Standard 40 (LKAS

40) “Investment Property”. Accordingly, land and buildings

classified as investment properties are stated at its fair value

and the resulting gain or loss arising from the change in fair

value of the investment property is recognized in profit or loss.

3.7.3. Derecognition

Investment properties are derecognised when disposed of, or

permanently withdrawn from use because no future economic

benefits are expected. Transfers are made to and from

investment properties only when there is a change in use.

Any gain or loss on disposal of an investment property

(calculated as the difference between the net proceeds from

disposal and the carrying amount of the item) is recognized in

profit or loss. When an investment property that was previously

classified as property plant and equipment is sold, any related

amount included in the revaluation reserve is transferred to

retained earnings. When the use of a property changes such

that it is reclassified as property plant and equipment, its

fair value at the date of reclassification becomes its cost for

subsequent accounting.

3.8. Leased Assets

Leases in terms of which the Group assumes substantially all

the risks and rewards of ownership are classified as finance



leases. Upon initial recognition the leased asset is measured at

an amount equal to the lower of its fair value and the present

value of the minimum lease payments. Subsequent to initial

recognition, the asset is accounted for in accordance with the

accounting policy applicable to that asset. Other leases are

operating leases and, except for investment property, the

leased assets are not recognized in the Group’s statement of

financial position.

3.9. Inventories

Inventories are measured at the lower of cost and net realizable

value.

The cost of inventories includes expenditure incurred in

acquiring the inventories, production or conversion costs and

other costs incurred in bringing them to their existing location

and condition. In the case of manufactured inventories and work

in progress, cost includes an appropriate share of production

overheads based on normal operating capacity.

Cost incurred in bringing inventories to the present location and

condition is recognized as follows

� Raw Material - At cost determined at the factory on

weighted average cost method.

� Finished Goods - At factory cost of direct materials, direct

labor and appropriate proportion of fixed production

overheads at normal operating capacity.

� Goods in transit - At the actual cost

� Packing Material - At cost determined at the factory on

weighted average cost method

Net realizable value is the estimated selling price in the ordinary

course of business, less the estimated costs of completion and

selling expenses.

3.10 Impairment

3.10.1 Financial Assets

A financial asset not carried at fair value through profit or loss

is assessed at each reporting date to determine whether there

is objective evidence that it is impaired. A financial asset is

impaired if objective evidence indicates that a loss event has

occurred after the initial recognition of the asset, and that the

loss event had a negative effect on the estimated future Cash

flows of that asset that can be estimated reliably. Objective

evidence that financial assets (including equity securities)

are impaired can include default or delinquency by a debtor,

restructuring of an amount due to the Group on terms that the

Group would not consider otherwise, indications that a debtor or

issuer will enter bankruptcy, or the disappearance of an active

market for a security. In addition, for an investment in an equity

security, a significant or prolonged decline in its fair value below

its cost is objective evidence of impairment.

The Group considers evidence of impairment for receivables

at both a specific asset and collective level. All individually

significant receivables are assessed for specific impairment. All

individually significant receivables found not to be specifically

impaired are then collectively assessed for any impairment

that has been incurred but not yet identified. Receivables that

are not individually significant are collectively assessed for

impairment by grouping together receivable with similar risk

characteristics.

Losses are recognised in profit or loss and reflected in an

allowance account against loans and receivables. When an

event occurring after the impairment was recognised causes

the amount of impairment loss to decrease, the decrease in

impairment loss is reversed through profit or loss.

3.10.2 Non-Financial Assets

The carrying amounts of the Group’s non-financial assets, other

than biological assets, investment properties, inventories and

deferred tax 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. For goodwill, and intangible assets that have

indefinite useful lives or that are not yet available for use, the

recoverable amount is estimated each year at the same time.

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, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate

that reflects current market assessments of the time value of

money and the risks specific to the asset. For the purpose of

impairment testing, assets that cannot be tested individually

are grouped together into the smallest group of assets that

generates cash inflows from continuing use that are largely

independent of the cash inflows of other assets or groups

of assets. For the purposes of goodwill impairment testing,

goodwill acquired in a business combination is allocated to the

group of CGUs that is expected to benefit from the synergies

of the combination. This allocation is subject to an operating

segment ceiling test and reflects the lowest level at which

that goodwill is monitored for internal reporting purposes. The

Group’s corporate assets do not generate separate cash inflows.

If there is an indication that a corporate asset may be impaired,

then the recoverable amount is determined for the CGU to which

the corporate asset belongs. An impairment loss is recognized if

the carrying amount of an asset or its CGU exceeds its estimated

recoverable amount. Impairment losses are recognized in profit

or loss.

Impairment losses recognized in respect of CGUs are allocated

first to reduce the carrying amount of any goodwill allocated to

the units, and then to reduce the carrying amounts of the other

assets in the unit (group of units) 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.

3.10 Employee Benefits

3.10.2 Defined Contribution Plan-Gratuity

A defined benefit plan is a post-employment benefit plan other

than a defined contribution plan. The Group’s net obligation in

respect of defined benefit plans is calculated by estimating the

amount of future benefit that employees have earned in return

for their service in the current and prior periods; that benefit is

discounted to determine its present value.

The retirement benefit obligation of the group is based on the

actuarial valuation using Projected Unit Credit (PUC) methods

as recommended by Sri Lanka Accounting Standard (LKAS 19)

Employee Benefits. The calculation is performed by independent

actuary using the projected unit credit method. The assumptions

based on which the results of the actuarial valuation was

determined, are included in Note 25 to the Financial Statements.

The Group recognizes all actuarial gains and losses arising

from the defined benefits plans immediately in the statement

of comprehensive income. The liability is disclosed under

non-current liabilities in the statement of financial position and

not externally funded.

However, as per the Payment of Gratuity Act No. 12 of 1983 the

liability to an employee arises only on completion of 5 years of

continued service.

3.10.3 Defined Contribution Plan-Employee Provident Fund and

Employee Trust Fund

All employees who are eligible for Employees Provident Fund

contribution and Employees Trust Fund contribution are covered

by relevant contribution funds in line with respective statutes

and regulations. The Company contributes 12 % and 3% of gross

emoluments of employees to Employees’ Provident Fund and

Employees’ Trust Fund respectively.

3.11 Provisions

A provision is recognized if, as a result of a past event, the

Group 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. Provisions are

determined by discounting the expected future cash flows at

a pre-tax rate that reflects current market assessments of the

time value of money and the risks specific to the liability. The

unwinding of the discount is recognized as finance cost.

3.11.4 Commitments and Contingent Liabilities

Contingent Liabilities are possible obligations whose existence

will be confirmed only by occurrence or non-occurrence of

uncertain future events not wholly within the control of the

Company or present obligations where the transfer of economic

benefits is not probable or cannot be reliably measured. Capital

Commitment and Contingent Liabilities of the Company and

the group are disclosed in the respective notes to the Financial

Statements.

3.3.3 Events After the Reporting Period

The materiality of the events after the reporting period has been

considered and appropriate adjustments and provisions have

been made in the Financial Statements wherever necessary.

3.12 Revenue

3.12.2 Sale of Goods

Revenue from the sale of goods in the course of ordinary

activities is measured at the fair value of the consideration

received or receivable, net of returns, trade discounts and

volume rebates.

Revenue is recognized when significant risks and rewards of

ownership have been transferred to the customer, recovery of

the consideration is probable, the associated costs and possible

return of goods can be estimated reliably, there is no continuing

management involvement with the goods, and the amount of

revenue can be measured reliably.

If it is probable that discounts will be granted and the amount

can be measured reliably, then the discount is recognized as a

reduction of revenue as the sales are recognized.

3.12.3 Rental Income

Rental income from investment property is recognized in profit

or loss on a straight-line basis over the term of the lease. Lease

incentives granted are recognized as an integral part of the total

rental income, over the term of the lease. Rental income from

subleased property is recognized as other income.

3.13 Finance Income and Finance Costs

Finance Income comprises interest income on funds invested

recognized in profit or loss using the effective interest method.

Borrowing costs that are not directly attributable to the

acquisition, construction or production of a qualifying asset are

recognized in profit or loss using the effective interest method.



Foreign currency gains and losses on financial assets and

financial liabilities are reported on a net basis as either finance

income or finance cost depending on whether foreign currency

movements are in a net gain or net loss position.

3.14 Income Tax

Tax expense comprises current and deferred tax. Current tax and

deferred tax is recognized in profit or loss except to the extent

that it relates to a business combination, or items recognized

directly in equity or in other comprehensive income.

3.14.2 Current Tax

Current tax is the expected tax payable or receivable on the

taxable income or loss for the year, using tax rates enacted or

substantively enacted at the reporting date, and any adjustment

to tax payable in respect of previous years. Current tax payable

also includes any tax liability arising from the declaration of

dividends.

3.14.3 Deferred Tax

Deferred tax is recognized in respect of temporary differences

between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for taxation

purposes. Deferred tax is not recognized for:

� Temporary differences on the initial recognition of assets or

liabilities in a transaction that is not a business combination

and that affects neither accounting nor taxable profit or

loss;

� Temporary differences related to investments in

subsidiaries, associates and jointly controlled entities to the

extent that the Group is able to control the timing of the

reversal of the temporary differences and it is probable that

they will not reverse in the foreseeable future; and

� Taxable temporary differences arising on the initial

recognition of goodwill.

The measurement of deferred tax reflects the tax consequences

that would follow the manner in which the Group expects, at

the end of the reporting period, to recover or settle the carrying

amount of its assets and liabilities. For investment property that

is measured at fair value, the presumption that the carrying

amount of the investment property will be recovered through

sale has not been rebutted.

Deferred tax is measured at the tax rates that are expected to

be applied to temporary differences when they reverse, using

tax rates enacted or substantively enacted at the reporting date.

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 taxes levied by the same tax authority on the

same taxable entity, or on different tax entities, but they intend

to settle current tax liabilities and assets on a net basis or their

tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax

credits and deductible temporary differences to the extent that

it is probable that future taxable profits will be available against

which they can be utilized. Deferred tax assets are reviewed at

each reporting date and are reduced to the extent that it is no

longer probable that the related tax benefit will be realized.

3.15 Statement of Cash Flows

The Statement of Cash Flows has been prepared using the

“indirect method”.

Interest paid are classified as operating cash flows, interest

received is classified as investing cash flows for the purpose of

presenting Statement of Cash Flows.

3.16 Earnings Per Share

The Company 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.

3.17 Related Party Transactions

Disclosure 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 charged.

3.18 Segment Reporting

Segments results that are results to the group’s CEO (the chief

operating decision maker) include items directly attributable

to a segment as well as those that can be allocated on a

reasonable basis. Unallocated items comprise mainly corporate

assets, head office expenses and tax assets and liabilities.

3.19 Determination of Fair Values

A number of the Group’s accounting policies and disclosures

require the determination of fair value, for both financial

and non-financial assets and liabilities. Fair values have been

determined for measurement and/or disclosure purposes based

on the following methods.

When applicable, further information about the assumptions

made in determining fair values is disclosed in the notes specific

to that asset or liability.

3.19.1 Biological Assets

The fair value of younger standing timber is based on the

present value of the net cash flows expected to be generated

by the plantation at maturity, in its most relevant market, and

includes the potential additional biological transformation and

the related risks associated with the asset.



3.19.2 Investment Property

An external, independent valuation company, having

appropriate recognized professional qualifications and recent

experience in the location and category of property being

valued, values the Group’s investment property portfolio. The

fair values are based on market values, being the estimated

amount for which a property could be exchanged on the date

of the valuation between a willing buyer and a willing seller in

an arm’s length transaction after proper marketing wherein the

parties had each acted knowledgeably and willingly.

In the absence of current prices in an active market, the

valuations are prepared by considering the aggregate of the

estimated cash flows expected to be received from renting out

the property. A yield that reflects the specific risks inherent in

the net cash flows then is applied to the net annual cash flows

to arrive at the property valuation.

3.19.3 Inventories

The fair value of inventories acquired in a business combination

is determined based on the estimated selling price in the

ordinary course of business less the estimated costs of

completion and sale, and a reasonable profit margin based on

the effort required to complete and sell the inventories.

4. ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE AS AT

REPORTING DATE

The Institute of Chartered Accountants of Sri Lanka has issued

the following new Sri Lanka Accounting Standards which is not

applicable for the current financial period..

Accordingly these Standards have not been applied in preparing

these Financial Statements.

� Sri Lanka Accounting Standards –SLFRS 10 “Consolidated

Financial Statements”.

The objective of this SLFRS is to establish principles for the

presentation and preparation of consolidated Financial

Statements when an entity controls one or more other entities.

An investor is expected to control an investee if and only if the

investor has all the following:

(a) Power over the investee;

(b) Exposure, or rights, to variable returns from its involvement

with the investee ; and

(c) The ability to use its power over the investee to affect the

amount of the investor’s returns

This Standard will require the Company to review the group

structure in the context of the new Standard and its requirements.

Accordingly adoption of this standard is expected to have an

impact on the Group structure, and consolidated reporting.

SLFRS 10 will become effective from 1 April 2014 for the Group

with early adoption permitted. This SLFRS will supersede the

requirements relating to consolidated Financial Statements in

LKAS 27”Consolidated and Separate Financial Statements

� Sri Lanka Accounting Standards –SLFRS 11 “Joint

Arrangements”

The objective of this SLFRS is to establish principles for financial

reporting by entities that have an interest in arrangements that

are controlled jointly (ie joint arrangements).


with early adoption permitted. This SLFRS will supersede the

requirements relating to consolidated Financial Statements in

LKAS 31” Interests in Joint Ventures.

� Sri Lanka Accounting Standard - SLFRS 12 ”Disclosure of

Interests in Other Entities”


with early adoption permitted

� Sri Lanka Accounting Standard - SLFRS 13, “Fair Value

Measurement”

This SLFRS defines fair value, sets out in a single SLFRS

framework for measuring fair value; and requires disclosures

about fair value measurements.

This SLFRS will become effective for the Group from 1 April

2014. Earlier application is permitted.

This SLFRS shall be applied prospectively as of the beginning of

the annual period in which it is initially applied. The disclosure

requirements of this SLFRS need not be applied in comparative

information provided for periods before initial application of this

SLFRS.

� Sri Lanka Accounting Standard – SLFRS 9 “Financial

Instruments”

The objective of this SLFRS is to establish principles for the

financial reporting of financial assets and financial liabilities that

will present relevant and useful information to users of Financial

Statements for their assessment of the amounts, timing and

uncertainty of an entity’s future cash flows.

An entity shall apply this SLFRS to all items within the scope of

LKAS 39 Financial Instruments: Recognition and Measurement.

This SLFRS will become effective for the group from 1st April

2015. Earlier application is permitted for the financial period

beginning on or after 01 January, 2013. However, if the

Group elects to apply this SLFRS early, it must apply all of the

requirements in this SLFRS at the same time



GROUP COMPANY


5. REVENUE

Export Sales 1,369,414,564 1,522,384,047 1,299,176,541 1,483,778,251

Local Sales 1,194,511,672 451,923,593 179,459,146 143,113,431

Rent Income 902,930 720,000 - -

2,564,829,166 1,975,027,640 1,478,635,687 1,626,891,682

6. OTHER OPERATING INCOME

Insurance Claim 320,434 199,580 135,629 72,667

Fair Value Gain on Biological Assets 1,135,379 22,023,127 - -

Profit on Disposal of Property, Plant and Equipment 36,300 - - -

Profit on Disposal of Subsidiary 4,326,758 - - -

Dividend Income - - 202,500 450,000

Packing Material Rebate (Note 29.1) 46,064,355 - - -

Write Back of Payables 6,877,951 - 6,877,951 -

Sundry Income 11,641,408 12,663,844 1,388,484 3,043,064

70,402,585 34,886,551 8,604,564 3,565,731

7. PROFIT BEFORE TAX

Is stated after charging all expenses including the followings;

Director's & Key Management Personnel Remuneration 10,935,000 4,105,000 5,535,000 4,105,000

Auditor's Remuneration

Audit 1,108,750 1,145,796 500,000 430,000

Non Audit Services 172,500 150,000 172,500 150,000

Other Auditor's fees 217,500 600,172 217,500 600,172

Impairment Loss on Trade Receivables 121,678 7,297,436 - -

Depreciation on Property, Plant and Equipment 77,463,171 59,908,416 35,813,662 30,125,398

Amortization on Intangible Assets 2,742,964 2,729,631 2,742,964 2,729,631

Provision for Obsolete Inventories 5,940,464 - 5,940,464 -

VAT Recoverable Written Off - 1,882,668 - 1,860,522

Personnel Costs (Note 7.1) 211,718,666 185,171,252 127,675,239 132,194,868

7.1 PERSONNEL COSTS

Salaries, Wages and Related Expenses 190,699,970 164,757,539 115,562,126 118,712,899

Defined Contribution Plan Costs - EPF and ETF 14,024,464 13,262,548 7,585,964 8,728,202

Defined Benefit Plan Costs - Retirement Benefit Obligation 6,994,232 7,151,165 4,527,149 4,753,767

211,718,666 185,171,252 127,675,239 132,194,868



GROUP COMPANY


8. NET FINANCING COSTS

Finance Income

Interest on - Call Deposit 1,633,174 2,052,762 880,782 1,433,242

- Foreign Currency Accounts 189,146 1,194,706 135,029 1,115,322

- Fixed Deposits 13,037,230 853,656 8,558,320 935,708

- Repo Investments 4,155,251 66,912 4,155,251 -

19,014,801 4,168,036 13,729,382 3,484,272

Finance Costs

Interest on - Bank Loans 17,099,307 4,199,464 7,913,912 3,241,828

- Bank Overdraft 10,911,091 4,557,944 3,068,859 1,167,427

- Lease 62,204 20,429 - -

- Packing Credit Loans 9,129,841 1,675,023 9,055,591 1,162,659

- Other 526,262 - -

Exchange Loss 3,500,616 23,039,975 3,710,927 24,600,406

41,229,321 33,492,835 23,749,289 30,172,320

(22,214,520) (29,324,799) (10,019,907) (26,688,048)

9. TAXATION

Income Tax Charge for the Year (Note 9.1) 8,987,211 3,650,370 4,195,194 759,031

Under Provision in Respect of Previous Years 371,765 101,663 - -

Deferred Tax Provision/(Reversal) for the Year (Note 28) (8,179,226) (5,404,878) 2,083,775 (794,436)

1,179,750 (1,652,845) 6,278,969 (35,405)

9.1 Reconciliation Between Accounting Profit and Taxable Income


Aggregate Disallowable Expenses 89,971,167 78,315,851 43,534,493 38,967,041

Aggregate Allowable Expenses (110,445,966) (36,477,530) (41,610,322) (24,689,527)

Aggregate Other Income (16,438,577) (6,743,504) (15,185,337) (2,710,826)

Aggregate Exempt Income (270,656) (859,975) (270,656) (773,445)

Adjusted Business Profit 153,686,320 370,475,851 223,268,225 325,937,905

Exempted Business Profit (223,268,225) (325,937,905) (223,268,225) (325,937,905)

Taxable Business Profit/( Loss) (69,581,905) 44,537,946 - -

Taxable Aggregate Other Income 18,315,020 3,397,247 14,982,837 2,710,826

Income Tax at 28% 5,764,563 1,992,387 4,195,194 759,031

Income Tax at 12% 2,148,993 712,396 - -

Income Tax at 10% 1,073,655 945,587 - -

8,987,211 3,650,370 4,195,194 759,031



9. TAXATION (Continued)

9.2 Income tax rates applicable to the company and subsidiaries

9.2.1 Company

In terms of the agreement with the Board of investment of Sri Lanka (BOI), business profit of the Company was exempted from income tax for a

period of 10 years from the date of commencement of its business, which came to an end in the year of assessment 2011/12. Subsequently the

said exemption period was extended for another two years of assessments ending 2013/14 by a supplementary agreement. After the expiration

of said tax exemption period, the Company will be liable for taxation at rate of 12%.

Dividend paid by Company out of exempt profits during the 12 year tax holiday period or within one year thereafter is exempted from tax. Other

Income is liable for income tax at the rate of 28%.

9.2.2 Subsidiaries

a) Renuka Teas (Ceylon) (Private) Limited

The Company's export profit is liable to income tax at a concessionary rate of 12%. However, local sales and other income is liable to income tax

at 28%.

b) Renuka Organics (Private) Limited

According to the agreements entered into with the Board of Investment of Sri Lanka, the Profit and Income of the Company were exempt from

income tax for a period of 5 Years. This tax holiday period expired on 31st March 1999.

From the Year of Assessments 2006/2007,under Section 16 of the Inland Revenue Act No.10 of 2006, the Company's Profit was exempt from

income tax for a period of five years. This tax holiday period expired on 31st March 2011. The Company is liable to income tax at 10% on profit

from Agriculture from the year of assessment 2011/2012.

Company's other income is liable for income tax at the rate of 28%.

c) Campbell Teas (Private) Limited

From the Year of Assessment 1999/2000, according to Section 52 of the Inland Revenue Act No. 10 of 2006, the Company's export profit is liable

to income tax at a concessionary rate of 12%. The Company's other income is liable to income tax at the rate of 28%.

d) Renuka Trading (Private) Limited

The Company is liable to income tax at the rate of 28%.

e) Ceylon Botanicals (Private) Limited


f) Ceylon Forestry (Private) Limited

In accordance with the Section 17 of the Board of Investment of Sri Lanka law No. 4 of 1978, the Company is entitled to the following exemptions/

benefits with regard to income tax:

(i) For a period of eight (08) years reckoned from the Year of Assessment as may be determined by the BOI, Sri Lanka. For the above purpose,

the year of assessment shall be reckoned from the year in which the Company commences to make profits or any year of assessment not

later than two (02) years reckoned from the date of commencement of commercial operations whichever year is earlier, as specified in a

certificate issued by the BOI, Sri lanka.

(ii) After the expiration of the aforesaid tax exemption period, referred to in subclause (i) above, the profits and income of the Company shall for

each year of assessment be charged at the rate of ten per centum (10%) for a period of two (2) years ("concessionary period") immediately

succeeding the last date of the tax exemption period during which the profits and income of the Company is exempted from the income tax.

(iii) After the expiration of the aforesaid concessionary period referred to in subclause (ii) above, the profits and income of the Company shall be

charged for any year of assessment at the rate of 20%.

However, other income would be liable to Income Tax @ 28% for the year.



9. TAXATION (Continued)

g) Kandy Plantations Limited

According to the Agreement entered into with the Board of Investment of Sri Lanka, the Profits and Income of Kandy Plantations Limited were

exempt for a period of 5 years from the year of assessment in which the Enterprises commence to make profit (i.e. 2003/2004). Accordingly the

said tax holiday period was expired on 31st March 2008.

However, the profit from Agriculture of the Company continued to be exempt from income tax for further 3 years of assessments ending

2010/2011, under Section 16 of the Inland Revenue Act No. 10 of 2006. This tax holiday was expired on 31st March 2011. The Company is liable

to income tax at 10% on profit from Agriculture from the year 2011/2012.

The other income of the Company is liable to income tax at 28%. The profit from export sales is liable to income tax at 12%.

h) Richlife Diaries Limited

The profits and the income of the Company (Agricultural Income) is liable at the rate of 10% and the other income, interest income is liable to income tax at the rate of 28%.

i) Renuka Trading (Private) Limited


j) Renuka Developments Limited


10.1 Basic Earnings Per Share

The computation of the basic earnings per share is based on the profit after tax attributable to ordinary shareholders for the year divided by the

weighted average number of ordinary shares outstanding during the year and calculated as follows:

GROUP COMPANY2013 2012 2013 2012

Profit After Tax attributable to Ordinary Shareholders (Rs.) 200,000,582 316,443,340 230,521,078 315,180,067

Weighted Average number of Ordinary Shares 529,650,000 401,250,000 529,650,000 401,250,000

Basic Earnings per Share (Rs.) 0.37 0.79 0.43 0.79

10.2 Dividend Per Share

Dividend Declared and Paid During the Year (Rs.) 78,645,000 40,125,000 78,645,000 40,125,000

Weighted Average number of Ordinary Shares 529,650,000 401,250,000 529,650,000 401,250,000

Dividend per Share (Rs.) 0.14 0.10 0.14 0.10



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10,

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4,2

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Bala

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Bala

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2011

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2 1

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9,9

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,475

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Bala

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15,

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2011

75,

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180

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-

277

,944

,658



GROUP COMPANY

As at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011Rs. Rs. Rs. Rs. Rs. Rs.

12. BIOLOGICAL ASSETS

Immature Plantation

Balance as at the beginning 28,098,711 5,633,879 5,633,879 - - -

Additions During the Year 279,158 441,705 - - - -

Gain on Fair Value During the Year 1,135,379 22,023,127 - - - -

Balance at the end 29,513,248 28,098,711 5,633,879 - - -

Biological assets as at 31st March 2013 consist of investment made in immature coconuts plants by the subsidiary, Ceylon Forestry (Private)

Limited. The fair valuation of these assets had not been carried out as at 1st April 2011 as those assets were not mature enough in order for

valuation being carried out reliably.

In arriving at the valuation of the biological assets for the year ended 31st March 2012 and 2013, subsidiary has obtained the professional services

of Messrs K.T.D Tissera, accredited chartered valuer (UK).

GROUP COMPANY


13. INTANGIBLE ASSETS

Balance at the beginning 10,918,522 - - 10,918,522 - -

Additions during the year - 13,648,153 - - 13,648,153 -

Amortization during the year (2,742,964) (2,729,631) - (2,742,964) (2,729,631) -

Balance at the end 8,175,558 10,918,522 - 8,175,558 10,918,522 -

As stated in note 3.5, all computer software costs incurred by the company which are not integrally related to associated hardware have been

classified as intangible assets.

GROUP COMPANY


14. IMMOVABLE ESTATE ASSETS ON LEASE

Balance as at the beginning 57,749,988 60,499,992 82,500,000 - - -

Amortization during the year (2,750,004) (2,750,004) (22,000,008) - - -


Kandy Plantations Limited - Immovable Estate Assets on Lease

Leases have been executed for 3 estates (Primarily coconut) comprising 33 contiguous allotments of Land called and known as "Giriulla Estate"

by Mr. L.H. Croos Dabrera. This contiguous allotments of Land comprise a total extent of 640A-3R-32P. This lease has been executed for a period of

30 years under 2 separate lease agreements. The first lease agreement relates to 10 years period from 1st April 2003 to 31st March 2013 and the

second lease agreement relates to the next 20 years commencing from 1st April 2013 and ending on 31st March 2033.

A valuation report dated 11th October 2003 prepared by Mr. Leon M.P. Perera Dip.In.Val. F.I.V. indicates the method of ascertaining the maximum

amount payable to the owner of the Estate for the 30 years period which was Rs. 88,000,000/-. The agreed amount payable of Rs. 82.5 Mn. had

been capitalised on the basis that it represents the value of immovable assets taken over by the Company.

GROUP COMPANY31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011

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

15. PREMIUM PAID FOR LEASEHOLD PREMISES

Balance at the beginning 2,624,602 2,693,672 2,762,742 2,624,602 2,693,672 2,762,742

Amortization during the year (69,070) (69,070) (69,070) (69,070) (69,070) (69,070)

Balance at the end 2,555,532 2,624,602 2,693,672 2,555,532 2,624,602 2,693,672

This represents the premium paid to the Board of Investment of Sri Lanka for the acquisition of leasehold land in 2006 and it is amortized over the

leasehold period of 50 years with effect from the year 2006.



GROUP COMPANY


16. INVESTMENT PROPERTY

Balance at the Beginning 55,089,160 46,274,894 - - - -

Transfer/Additions During the Year - 8,814,266 46,274,894 - - -

Additions due to the Acquisition of Subsidiary 228,406,161 - -


Renuka Trading (Private) Limited

The investment properties of the group include land and buildings held by Renuka Trading (Private) Limited. The Property has been valued by

Professional Valuer, Mr .Leon M.P. Perera D.I.V on 30th March 2012. The Property has been valued based on the market value of the adjoining

Properties. The Directors are of the opinion that the market value of Rs 110Mn stated in the valuation report as at 31st March 2012 has not changed

significantly during the year 2012/2013 and valuers opinion's has been obtained with respect to this as at 31st March 2013.

Renuka Development Limited

The investment properties of the group consist of investment property held by Renuka Developments Limited. The Property has been valued by

Professional Valuer, Mr. M.P. Perera D.I.V on 31st March 2012. The Property has been valued based on the market value of the lands in that areas.

The Directors are of the opinion that the market value of Rs.218,966,788 as at 31st March 2012 has not changed significantly during the year and

the valuers opinion has been obtained with respect to this as at 31st March 2013.

GROUP COMPANY


17. INVESTMENT IN SUBSIDIARIES

Investment in Shares

Renuka Products (Private) Limited - - - - 18,750,000 -

Renuka Organics (Private) Limited - - - 50,000,000 50,000,000 50,000,000

Renuka Teas (Ceylon) (Private) Limited - - - 96,875,000 96,875,000 96,875,000

Richlife Diaries Limited - - - 605,000,000 505,000,000 -

751,875,000 670,625,000 146,875,000

Investment in which Debentures

Renuka Organics (Private) Limited - - - 350,000,000 - -

Richlife Diaries Limited - - - 252,000,000 - -

602,000,000 - -

1,353,875,000 670,625,000 146,875,000

The Company has invested in debentures of the following Companies.

Renuka Organics (Private) Limited

The Company invested in 2,500,000 convertible debentures which has a par value of Rs.140 per share in Renuka Organics (Private) Limited during

the year. These debentures are convertible to ordinary shares, at the option of the issuer within a period of 5 years from the date of issue. The

convertible debentures were issued on 1st March 2013.

Richlife Diaries Limited

The Company invested in 18,000,000 convertible debentures which has a par value of Rs.14 per share in Richlife Diaries Limited during the year.

These debentures are convertible to ordinary shares, at the option of the issuer within a period of 5 years from the date of issue. The convertible

debentures were issued on 2nd February 2013.



17. Investment in Subsidiaries (Continued)

% Holding No. of SharesAs at 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011

Renuka Products (Private) Limited (Note 17.2) - 37.5% - - 150,000 -

Renuka Organics (Private) Limited 100% 100% 100% 500,000 500,000 500,000

Renuka Teas (Ceylon) (Private) Limited 100% 100% 100% 2,500,000 2,500,000 2,500,000

Richlife Diaries Limited(Note 17.1)

100% 76% - 20,290,000 15,420,400 -

17.1 Acquisition of Non-Controlling Interests

During the year, the Company has acquired additional 4,869,600 shares in Richlife Dairies Limited from the non-controlling interests for a

consideration of Rs.100 Mn increasing its ownership from 76% to 100%.

17.2 Disposal of Subsidiary

The Company disposed its holding in Renuka Products (Private) Limited for Rs.18.75 Mn during the year.

GROUP COMPANY


18. GOODWILL ON ACQUISITION

At the Beginning of the Year 265,553,003 - - - - -

Additions During the Year (Note 35) 1,872,251 265,553,003 - - - -

At the End of the Year 267,425,254 265,553,003 - - - -

18.1 Goodwill on Acquisition Consist of Following Companies

Richlife Diaries Limited 265,553,003 265,553,003 - - - -

Renuka Developments Limited 1,872,251 - - - - -

267,425,254 265,553,003 - - - -

19. INVENTORIES

Raw Materials and Consumables 45,957,110 39,851,984 33,616,941 24,641,947 24,087,664 19,453,485

Finished Goods 136,936,871 136,088,733 134,888,616 109,695,026 116,388,929 126,845,275

Packing Materials and Consumables 119,538,698 81,765,231 73,831,503 55,164,529 48,288,457 58,024,697

Machinery Spare Parts 16,918,565 9,631,321 2,210,376 16,591,540 9,051,260 2,169,844

Goods in Transit 3,257,284 11,338,625 4,491,580 3,836,064 11,338,625 4,485,866

Work in progress 40,451,247 40,141,497 4,886,914 29,219,604 33,260,572 -

363,059,775 318,817,391 253,925,930 239,148,710 242,415,507 210,979,167

Less : Provision for the Obsolete Inventories (Note 19.1) (7,029,834) (1,089,370) (3,321,946) (7,029,834) (1,089,370) (3,321,946)

356,029,941 317,728,021 250,603,984 232,118,876 241,326,137 207,657,221

19.1 Provision for Obsolete Inventories

Balance at the Beginning 1,089,370 3,321,946 1,777,849 1,089,370 3,321,946 1,777,849

Provision Made During the Year 5,940,464 - 1,544,097 5,940,464 - 1,544,097

Write off During the Year - (2,232,576) - - (2,232,576) -

Balance at the end 7,029,834 1,089,370 3,321,946 7,029,834 1,089,370 3,321,946



GROUP COMPANY


20. TRADE AND OTHER RECEIVABLES

Trade Debtors 266,960,154 115,671,877 84,038,702 132,033,599 42,973,992 74,711,745

Staff Loans and Advances 1,584,102 2,320,336 177,970 1,555,197 2,297,836 145,871

Other Receivables 2,941,644 15,663,877 15,092,182 296,437 2,213,296 835,603

Pre-Payments 2,680,269 8,367,505 167,200 1,738,071 1,064,743 -

Deposit and Advances 88,727,874 82,392,071 12,318,503 85,440,923 82,257,071 11,780,152

Sundry Debtors 1,033,083 255,334 1,099,580 - - -

363,927,126 224,671,000 112,894,137 221,064,227 130,806,938 87,473,371

Provision for Impairment Losses (Note 20.1) (7,357,090) (7,889,011) (600,000) - - -

356,570,036 216,781,989 112,294,137 221,064,227 130,806,938 87,473,371

20.1 Provision for Impairment Losses

Balance at the Beginning 7,889,011 600,000 - - - -

Acquisition of Subsidiary - 13,706,373 - - - -

Provision Made During the Year 121,678 7,297,436 600,000 - - -

Write off During the Year (653,599) (13,714,798) - - - -

Balance at the year end 7,357,090 7,889,011 600,000 - - -

21. TAX RECOVERABLES

VAT Recoverable 6,270,720 5,057,546 8,220,520 - - 1,730,636

NBT Recoverable 1,257,893 2,341,139 1,210,876 1,257,893 2,348,024 1,210,876

Income Tax 4,446,061 3,957,791 429,661 - - -

Notional Tax 415,525 - - 415,525 - -

WHT Recoverable 88,077 582,832 325,982 88,077 582,832 325,982

ESC Recoverable 12,610,754 6,453,851 9,144,617 12,042,463 5,729,994 1,157,625

25,089,030 18,393,159 19,331,656 13,803,958 8,660,850 4,425,119

22. AMOUNTS DUE FROM RELATED COMPANIES

Campbell Teas (Private) Limited - - - - 1,652,708 1,652,709

Renuka Enterprises (Private) Limited - 7,800,000 1,800,000 - 7,800,000 1,800,000

Renuka Agro Exports Limited - 285,051 6,158,359 - - -

Kandy Plantation Limited - - - 3,865,963 737,003 539,155

Renuka Shipping and Travel (Private) Limited - 5,904,500 2,054,500 - 5,900,000 2,050,000

Renuka Organics (Private) Limited - - - 14,747,831 13,068,050 20,981,940

Renuka Shaw Wallace PLC 207,000 - 17,532,014 207,000 - 17,532,014

Renuka Teas (Ceylon) (Private) Limited - - - 53,608,054 57,467,882 45,920,821

Shaw Wallace Ceylon Limited - 27,138,648 - - - -

Renuka Holdings Limited 357,000,000 211,140 2,500,000 - 211,140 2,500,000

Renuka Products (Private) Limited - - - - 25,042,120 29,571,358

Richlife Diaries Limited - - - - 50,581,373 -

Shaw Wallace Food Services (Private) Limited 19,347,189 15,514,865 - 19,347,189 15,514,865 -

376,554,189 56,854,204 30,044,873 91,776,037 177,975,141 122,547,997



GROUP COMPANY


23. CASH AND CASH EQUIVALENTS

Short-Term Deposits 8,940,169 15,137,510 119,528,683 715,768 3,354,356 106,033,894

Call Deposits 29,773,925 15,813,684 9,016,763 10,413,327 2,619,900 6,075,082

Cash at Bank and in Hand 70,902,404 46,237,949 30,224,694 19,048,474 34,391,256 17,355,923

109,616,498 77,189,143 158,770,140 30,177,569 40,365,512 129,464,899

Bank Overdraft (147,223,512) (107,639,607) (14,383,432) (45,773,869) (39,935,575) (8,229,354)

Cash and Cash Equivalent for Cash Flow Purpose (37,607,014) (30,450,464) 144,386,708 (15,596,300) 429,937 121,235,545

24. STATED CAPITAL

Ordinary Shares

Balance as at the beginning (401,250,000 shares) 552,452,950 552,452,950 552,452,950 552,452,950 552,452,950 552,452,950

Issued During the year (160,500,000 shares) 642,000,000 - - 642,000,000 - -

Balance at the year end (561,750,000 shares) 1,194,452,950 552,452,950 552,452,950 1,194,452,950 552,452,950 552,452,950

25. RETIREMENT BENEFIT OBLIGATIONS

Balance at the beginning of the year 23,514,010 10,749,268 5,272,026 10,893,054 6,358,287 5,272,026

Adjustment due to Acquisition/ (Disposal) of Subsidiary (427,303) 6,877,837 3,845,681 - - -

Provision Made During the Year 6,994,232 7,151,165 2,659,936 4,527,149 4,753,767 1,418,517

Payment During the Year (4,052,731) (1,264,260) (1,028,375) (1,761,800) (219,000) (332,256)

Balance at the year end 26,028,208 23,514,010 10,749,268 13,658,403 10,893,054 6,358,287

An actuarial valuation of retirement benefit obligation was carried out as at 31st March 2013 by Mr. M. Poopalanathan, Actuarial and Management

Consultants (Private) Limited. The valuation methods used by the actuary to value the benefit is the "Projected unit credit method", the method

recommended by the Sri Lanka Accounting Standards No 19 ( LKAS 19) "Employee Benefits". The principal assumptions used were as follows and

those had been uniformly applied to all the companies in the group.

1. Retirement age 55

2. Discount rate 11%

3. Salary increment rate 10%

4. Demographic Assumption A 67/70 Mortality Table

25.1 Movement in the Present Value of the Retirement Benefit Obligations

GROUP COMPANY


Balance at the Beginning of the Year 23,514,010 10,749,268 5,272,026 10,893,054 6,358,287 5,272,026

Acquisition/(Disposal) of Subsidiary (427,303) 6,877,837 3,845,681 - - -

Interest Cost for the Year 2,289,564 926,693 754,696 974,016 762,994 632,643

Current Service Cost for the Year 3,975,822 1,970,691 1,203,568 2,000,285 1,729,557 1,069,615

Provision Made During the Year - 1,275,319 927,950 - - -

Payments Made During the Year (4,052,731) (1,264,260) (1,028,375) (1,761,800) (219,000) (332,256)

Actuarial (Gain)/Loss for the Year 728,846 2,978,462 (226,278) 1,552,848 2,261,216 (283,741)

Balance at the Year End 26,028,208 23,514,010 10,749,268 13,658,403 10,893,054 6,358,287



GROUP COMPANY


26. LOANS AND BORROWINGS

Balance at the Beginning of the Year 340,263,865 31,316,177 - 315,075,477 16,309,007 19,250,000

Acquisition of Subsidiary - 29,600,742 - - - -

Borrowings During the Year 330,217,933 306,398,449 33,292,632 234,169,362 301,974,826 -

Repayment During the Year (399,304,117) (27,051,503) (1,976,455) (330,961,999) (3,208,356) (2,940,993)

Balance at the Year End 271,177,681 340,263,865 31,316,177 218,282,840 315,075,477 16,309,007

26.1 Repayment Due within One Year 109,924,184 222,699,677 18,219,861 87,783,573 207,019,693 3,208,356

26.2 Repayment Due After One Year 161,253,497 117,564,188 13,096,316 130,499,267 108,055,784 13,100,651

271,177,681 340,263,865 31,316,177 218,282,840 315,075,477 16,309,007

26.3 Details of Loans and Borrowings of the Company

Nameof Bank

FacilityObtained

OutstandingBalance

InterestRate

RepaymentTerms

AssetsPledged

Rs.

DFCC Bank Boiler Loan 9,830,876 AWPR +6.5% p.a To be paid in 72 installment with

a grace period of 24 months

starting from July 2008 a monthly

installment of Rs. 267,363/-

Primary Mortgage over leasehold

rights of an allotted plot of land

depicted on lot no.28, Yatadawala

HSBC Limited Packing Credit Loan

25,822,783 1 or 3 months

LIBOR+ 3.5% p.a

Repayable on Demand Corporate guarantee of USD

1,000,000/- from Renuka Shaw

Wallace PLC and LKR 25,000,000/-

from Richlife Dairies Ltd.

National Development Bank PLC

Medium Term Loan

124,191,524 1 year LIBOR+ 3.75% p.a

24 equal monthly installments of USD 40,581 each

(a) Primary mortgage over stock

and book debt for USD 740,000/-

Packing Credit Loan

58,437,657 Repayable on Demand (b) Agreement to mortgage over

stocks and book debts for USD

1,180,000/-

(c) Corporate guarantee from

Renuka Agro Exports Ltd. for USD

940,000/-

218,282,840



26.4 Details of Loans and Borrowings of the Group

Nameof Bank

FacilityObtained

OutstandingBalance

InterestRate

RepaymentTerms

AssetsPledged

Rs.

DFCC Bank Boiler Loan 9,830,876 AWPR +6.5% p.a To be paid in 72 installment with

a grace period of 24 months

starting from July 2008 a monthly

installment of Rs. 267,363/-

Primary Mortgage over leasehold

rights of an allotted plot of land

depicted on lot no.28, Yatadawala

DFCC Bank Term Loan 35,000,000 AWPR +3% p.a To be paid in 48 installment

with a grace period of 12

a monthly installment of

Rs.729,167/-

Corporate Guarantee

Import Loan Facility

782,438 AWPR +2% p.a 3 Months Corporate Guarantee

HSBC Limited Packing Credit Loan

25,822,783 1 or 3 months

LIBOR+ 3.5% p.a

Repayable on Demand Corporate guarantee of USD

1,000,000/- from Renuka Shaw

Wallace PLC and LKR 25,000,000/-

from Richlife Dairies Ltd


Medium Term Loan

124,191,524 1 year LIBOR+ 3.75% p.a

24 equal monthly installments of USD 40,625 each

(a) Primary mortgage over stock

and book debt for USD 740,000/-

Packing Credit Loan

58,437,657 Repayable on Demand (b) Agreement to mortgage over

stocks and book debts for USD

1,180,000/-

(c) Corporate guarantee from

Renuka Agro Exports Ltd. for USD

940,000/-

Bank of Ceylon Long Term Loan 9,508,403 6.5% p.a Repayable over 96 equal monthly installments

Property held at, Pirivena Road,

Moligoda, Wadduwa for Rs.426

Mn.

Import Loan 7,604,000 16.5% p.a 3 Months

271,177,681



GROUP COMPANY


27. FINANCE LEASE OBLIGATION

Balance as at the Beginning of the year 67,759,864 69,128,079 71,347,643 - - -

Addition Due to Acquisition of Subsidiary - 798,045 -

Repayments During the Year (2,217,104) (2,166,260) (2,219,564) - - -

65,542,760 67,759,864 69,128,079

Interest in Suspense (56,694) 110,096 - - - -

Balance as at the End of the Year 65,486,066 67,649,768 69,128,079 - - -

Balance Payable as at year end 65,486,066 67,649,768 69,128,079 - - -

Lease Rental Payable within One Year (2,181,258) (2,163,702) (2,128,079) - - -

Lease Rental Payable After One Year 63,304,808 65,486,066 67,000,000 - - -

27.1 Analysis by Company

Kandy Plantations Limited (Note 27.2) 65,000,000 67,000,000 69,128,079 - - -

Richlife Dairies Limited (Note 27.3) 486,066 649,768 - - - -

65,486,066 67,649,768 69,128,079 - - -

27.2 Kandy Plantations Limited

Land

Balance as at the beginning of the Year 67,000,000 69,000,000 71,000,000 - - -

Repayments During the Year (2,000,000) (2,000,000) (2,000,000) - - -

Balance as at the Year End 65,000,000 67,000,000 69,000,000 - - -

Lease Rental Payable within One Year (2,000,000) (2,000,000) (2,000,000) - - -

Lease Rental Payable After One Year 63,000,000 65,000,000 67,000,000 - - -

Motor Vehicle

Balance as at the beginning of the Year - 128,079 347,643 - - -

Repayments During the Year - (128,079) (219,564) - - -

Balance as at the year end - - 128,079 - - -

Lease Rental Payable within One Year - - 128,079 - - -

Lease Rental Payable After One Year - - - - - -

27.3 Richlife Dairies Limited

Plant and Machinery

Balance at the Beginning 759,864 - -

Additions Due to Acquisition of Subsidiary - 798,045 -

Repayments During the Year (217,104) (38,181) -

542,760 759,864 -

Interest in Suspense (56,694) (110,096)

486,066 649,768

Lease Rental Payable within One Year 181,258 163,702 -

Lease Rental Payable After One Year 304,808 486,066 -



GROUP COMPANY


28. Deferred Taxation

Balance at the beginning 48,928,708 16,575,254 20,487,969 16,089,215 16,883,651 18,767,145

Addition Due to Acquisition of Subsidiary - 37,758,332 - - - -

Provision Made/(Reversed) During the Year (8,179,226) (5,404,878) (1,883,494) 2,083,775 (794,436) (1,883,494)

Balance at the Year End (Note 28.1) 40,749,482 48,928,708 18,604,475 18,172,990 16,089,215 16,883,651

28.1 Provision for Deferred Taxation is attributable to the followings.

2013 2012 2011

Temporary Differences

Tax Effects


Tax Effects


Tax Effects


a. Company

On Property, Plant and Equipment 165,100,018 19,812,000 144,969,842 17,396,381 147,055,381 17,646,645

On Retirement Benefit Obligation (13,658,403) (1,639,010) (10,893,054) (1,307,166) (6,358,287) (762,994)

151,441,615 18,172,990 134,076,788 16,089,215 140,697,094 16,883,651

b. Group

On Property, Plant and Equipment 144,117,512 58,728,934 545,772,700 64,569,244 147,055,381 19,367,469

On Accumulated Tax Losses (53,877,014) (15,085,564) (109,740,817) (13,168,898) - -

On Retirement Benefit Obligation (26,028,208) (2,893,888) (23,514,010) (2,471,638) (6,358,287) (762,994)

64,212,290 40,749,482 412,517,873 48,928,708 140,697,094 18,604,475

GROUP COMPANY 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011


29. TRADE AND OTHER PAYABLES

Trade Creditors 110,576,294 79,905,145 43,115,600 64,756,368 41,989,121 36,189,405

Accrued Expenses 76,496,354 13,268,969 13,431,606 11,858,125 9,154,441 10,932,477

Packing Material Rebate (Note 29.1) - 46,064,355 - - - -

Other Payables 118,321,949 172,468,718 9,321,034 110,632,487 111,732,049 3,646,035

305,394,597 311,707,187 65,868,240 187,246,980 162,875,611 50,767,917

29.1 This balance represent a packing material rebate to be granted by Tetra Pak South East Asia (Private) Limited to the Company on timely settlement

of overdue amount on Capital Equipment payable to Tetra Pak South East Asia (Private) Limited by 31st March 2012. The Company has fully granted

above rebate during current financial year and settled off against its purchases made from Tetra Pak Asia (Private) Limited. This benefit recognized

under other income in financial statements.

GROUP COMPANY 31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011


30. AMOUNTS DUE TO RELATED COMPANIES

Renuka Group Limited - - 5,000 - - 5,000

Shaw Wallace Food Services Limited - 3,398,109 - - - -

Renuka Shaw Wallace PLC - 44,000,188 2,788,208 - 44,000,188 -

Shaw Wallace Ceylon Limited - 1,417,503 - - 1,417,504 -

Renuka Shipping & Travel (Private) Limited - 4,800 4,800 - - -

Richlife Dairies Limited - - - 14,951,519 - -

Renuka Agro Exports Limited 3,420,232 13,494,863 4,369,044 3,420,232 7,357,665 3,444,314

3,420,232 62,315,463 7,167,052 18,371,751 52,775,357 3,449,314



31.

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100

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31.1

Tran

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Rel

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Com

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ies

(Con

tin

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Nam

e of

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Rs.

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is B

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the

rel

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to t

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Sta

tem

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31.2

Tran

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s w

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Key

Man

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Pers

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el

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the

Com

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For

the

year

end

ed 3

1st

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ch20

1320

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s.Rs

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Shor

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Ben

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5,

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Fee

3,73

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3,

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12,8

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32. CONTINGENT LIABILITIES

There are no material contingent liabilities as at the reporting date which require adjustment to or disclosure in the Financial Statements.

33 CAPITAL COMMITMENTS

There were no significant capital commitments as at the reporting date.

34 EVENTS OCCURRING AFTER REPORTING DATE

The Directors have proposed the payment of a final dividend of Rs.0.10/- per share for the year ended 31st March 2013. In accordance LKAS-10

"Events Occurring after Reporting date" the final dividend has not been recognized as a liability in the financial statement at the year end.

35 NET ASSETS ACQUIRED OR DISPOSED DUE TO ACQUISITION/DISPOSAL OF SUBSIDIARIES

35.1 Acquisition of Subsidiaries

The Group has acquired, 50% shareholding of Renuka Developments Limited on 19th December 2012. This acquisition had the following effect on the group's assets and liabilities.

Net Identifiable Assets and Liabilities

Amount

Rs.

Property, Plant and Equipment 249,999,950

Investment Property 228,406,161

Trade and other receivables 697,080

Amounts Due from Related Parties 417,000,000

Cash and Cash Equivalents 116,323

Trade and other payables (199,920)

Income tax Receivable 235,905

896,255,499

Net Assets Acquired (50% of Total Net Identifiable Assets and Liabilities) 448,127,750

Goodwill on acquisition 1,872,250

Total cash consideration 450,000,000

Cash consideration paid on acquisition of subsidiary 450,000,000

Cash and Cash Equivalents at the date of acquisition (116,323)

Net Cash outflow on acquisition of Subsidiary 449,883,677

35.2 Disposal of Subsidiaries

The company disposed its holding in Renuka Products (Private) Limited for a consideration of Rs.18,750,000. The assets and liabilities as at the date of disposal were as follows.

AmountRs.

Assets

Property, Plant and Equipment 44,418,407

Inventory 21,505,530

Trade and Other Receivables 46,135,598

Total Assets 112,059,535

Liabilities

Retirement Benefit Obligations 427,303

Trade and Other Payables 27,890,830

Amounts Due to related Companies 80,602,853

Cash and Cash Equivalents 11,438,350

Total Liabilities 120,359,336

Total Identifiable Net Assets (8,299,801)



36. EXPLANATION OF TRANSITION TO SLFRSs - Company

In preparing opening SLFRS statements of financial position and statement of comprehensive income the company has not made any adjustments

to the amounts reported under previous SLASs. Since there were no material differences between the amounts reported under previous SLASs and

the amounts derived by applying new accounting polices under SLFRS/LKASs set out in the notes to the financial statements.

36.1 Reconciliation of Equity - Group

GROUP

As at 1st April 2011As perSLAS

Effect of Transition to SLFRS/LKASs

As per SLFRS/ LKASs

Note Rs. Rs. Rs.

Non-Current Assets

Property, Plant and Equipment a 464,825,832 7,287,158 472,112,990

Biological Assets b - 5,633,879 5,633,879

Immovable Estate Assets on Lease 60,499,992 - 60,499,992

Premium Paid Leasehold Premises 2,693,672 - 2,693,672

Investments Property 46,274,894 - 46,274,894

574,294,390 12,921,037 587,215,427

Currents Assets

Inventories 250,603,984 - 250,603,984

Trade and Other Receivables 112,294,137 - 112,294,137

Tax Recoverable c 18,901,996 429,660 19,331,656

Amounts Due from Related Companies 30,044,873 - 30,044,873

Cash and Cash Equivalents 158,770,140 - 158,770,140

570,615,130 429,660 571,044,790

Total Assets 1,144,909,520 13,350,697 1,158,260,217

EQUITY AND LIABILITIES

Equity

Stated Capital 552,452,950 - 552,452,950

Retained Earnings d 335,273,890 10,524,724 345,798,614

887,726,840 10,524,724 898,251,564

Non Controlling Interests e 34,311,901 675,488 34,987,389

922,038,741 11,200,212 933,238,953

Non-Current Liabilities

Retirement Benefit Obligations 10,749,268 - 10,749,268

Loans and Borrowings 13,096,316 - 13,096,316

Finance Lease Obligation 67,000,000 - 67,000,000

Deferred Tax Liability f 16,883,651 1,720,824 18,604,475

107,729,235 1,720,824 109,450,059

Current Liabilities


Finance Lease Obligation 2,128,079 - 2,128,079

Trade and Other Payables 65,868,240 - 65,868,240

Amounts Due to Related Companies 7,167,052 - 7,167,052

Dividend Payable 1,350,000 - 1,350,000

Income Tax Payable g 6,024,880 429,660 6,454,541

Bank Overdraft 14,383,432 - 14,383,432

115,141,544 429,661 115,571,205

Total Equity and Liabilities 1,144,909,520 13,350,697 1,158,260,217



36.2 Reconciliation of Equity - Group

GROUP

As at 31st March 2012 As perSLAS


As per SLFRS/ LKASs

Note Rs. Rs. Rs.

Non-Current Assets

Property, Plant and Equipments a 1,157,432,650 (7,856,055) 1,149,576,596

Biological Assets b - 28,098,711 28,098,711

Intangible Assets 10,918,522 - 10,918,522

Immovable Estate Assets on Lease 57,749,988 - 57,749,988

Premium Paid for Leasehold Premises 2,624,602 - 2,624,602

Investments Property 55,089,160 - 55,089,160

Goodwill on Acquisition 265,553,003 - 265,553,003

1,549,367,925 20,242,657 1,569,610,582

Currents Assets

Inventories 317,728,021 - 317,728,021

Trade and Other Receivables 216,781,989 - 216,781,989

Tax Recoverable 18,393,159 - 18,393,159

Amounts Due from Related Companies 56,854,204 - 56,854,204

Cash and Cash Equivalents 77,189,143 - 77,189,143

686,946,516 - 686,946,516

Total Assets 2,236,314,441 20,242,657 2,256,557,098

EQUITY AND LIABILITIES

Equity

Stated Capital 552,452,950 - 552,452,950

Retained Earnings d 601,019,154 8,260,265 609,279,419

1,153,472,104 8,260,265 1,161,732,369

Non-Controlling Interests e 116,900,550 12,797,298 129,697,848

Total Equity 1,270,372,654 21,057,563 1,291,430,217

Non-Current Liabilities

Retirement Benefit Obligations 23,514,010 - 23,514,010


Finance Lease Obligations 65,486,066 - 65,486,066

Deferred Tax Liability f 49,743,615 (814,907) 48,928,708

256,307,878 (814,907) 255,492,972

Current Liabilities


Finance Lease Obligations 2,163,702 - 2,163,702

Trade and Other Payables 311,707,187 - 311,707,187

Amounts Due to Related Companies 62,315,463 - 62,315,463

Dividend Payable 1,993,936 - 1,993,936

Income Tax Payable 1,114,337 - 1,114,337

Bank Overdraft 107,639,607 - 107,639,607

709,633,909 - 709,633,909

Total Equity and Liabilities 2,236,314,441 20,242,656 2,256,557,098



36.3 Reconciliation of Comprehensive Income - Group

GROUP

For the year ended 31st March As perSLAS


As per SLFRS/ LKASs

Note Rs. Rs. Rs.

Revenue h 1,972,627,482 2,400,158 1,975,027,640

Cost of Sales i (1,348,228,266) (3,727,605) (1,351,955,870)

Gross Profit 624,399,216 (1,327,447) 623,071,770

Other Operating Income j 12,863,424 22,023,127 34,886,551

Administration Expenses k (171,748,235) 1,298,285 (170,449,950)

Selling and Distribution Expenses (121,942,563) - (121,942,563)

Profit from Operations 343,571,843 21,993,965 365,565,808

Net Financing Costs l (28,026,514) (1,298,285) (29,324,799)

Profit Before Tax 315,545,329 20,695,680 336,241,009

Taxation m 1,146,335 506,510 1,652,845

Profit for the Year 316,691,664 21,202,190 337,893,854


Total Comprehensive Income for the Year 316,691,664 21,202,190 337,893,854

a Property, Plant & Equipment

The Group elected to reassess remaining useful life of the certain items of PPE as at the transition date and the carrying values were adjusted

accordingly.

GROUP 31/03/2012 01/04/2011

Rs. Rs.

Impact on the carrying value of Property Plant & Equipments due to re assessment of useful life of assets (1,780,471) 12,921,037

Reclassification of biological assets from Property Plant and Equipment (Note b) (6,075,584) (5,633,879)

Effect of Transition to SLFRS/LKASs (7,856,055) 7,287,158

b Biological Assets

This represents the reclassification of biological assets which was previously classified under property, plant and equipment and the fair valuation

of biological assets as at the year end as per LKAS 41.

GROUP 31/03/2012 01/04/2011

Rs. Rs.

Reclassification of Biological Assets from Property, Plant and Equipment 6,075,584 5,633,879

Gain on Fair Value of Managed Agricultural Activities as per LKAS 41 22,023,127 -

Effect of Transition to SLFRS/LKASs 28,098,711 5,633,879



c Income Tax Recoverable

This represents the reclassification of income tax receivable balance which was previously classified under income tax payable.

GROUP 31/03/2012 01/04/2011

Rs. Rs.

Reclassification of Income Tax Receivable - 429,660

Effect of Transition to SLFRS/LKASs - 429,660

d Retained Earnings

The net effect of adoption of SLFRS as of the transition date of 1st April 2011 and 31st March 2012 is recorded through “Retained Earnings”

GROUP Note 31/03/2012 01/04/2011

Rs. Rs.

Adjustment of net impact on accumulated depreciation of Property Plant and Equipment

through Retained Earnings due to re assessment of useful life of Certain assets. a (1,780,461) 12,921,037

Adjustment of net Impact on deferred Tax through Retained Earnings due to re assessment of

Property, Plant & Equipment. f 814,897 (1,720,824)

Impact on fair valuation of managed agricultural activities as per LKAS 41 to accommodate the fair values as at the date of transition. b 22,023,127 -

Reclassification of profit share between Equity Holders & Non Controlling Interest. e (12,797,298) (675,488)

Effect of Transition to SLFRS/LKASs 8,260,265 10,524,724

e Non Controlling Interest

GROUP 31/03/2012 01/04/2011

Rs. Rs.

Reclassification of profit share between Equity Holders & Non Controlling Interest 12,797,298 675,488

Effect of Transition to SLFRS/LKASs 12,797,298 675,488

f Deferred Tax

This represents the effect on deferred tax due to reassessment of Property, Plant & Equipment.

GROUP 31/03/2012 01/04/2011

Rs. Rs.

Net Impact on differed Tax due to re assessment of Property, Plant & Equipment (814,907) 1,720,824

Effect of Transition to SLFRS/LKASs (814,907) 1,720,824

g Income Tax payable

This represents the reclassification of Income Tax receivable balance which was previously classified under Income Tax payable .

GROUP 31/03/2012 01/04/2011

Rs. Rs.

Reclassification of Income Tax Receivable - 429,660

Effect of Transition to SLFRS/LKASs - 429,660



h Revenue

Revenue recognition on Harvested Crop was based on the financial period of harvesting in terms of previous SLAS 32. Thus the unsold stocks were treated

as a part of revenue. However, with the implementation of SLFRSs, the revenue recognition was based on the LKAS 18. Accordingly, the revenue is

recognized based on the date of auction where the recognition criteria are met and therefore the quantity which is sold at auction is treated as the sales.

“This classification does not effect on the net assets for the Statement of Financial position as at 01 April 2011, 31st March 2012. The turnover in

the Statement of Comprehensive Income for the year ended 31st March 2012 was decreased by Rs.2.4Mn.

GROUP 31/03/2012

Rs.

Impact of recognition of harvest income as per LKAS 18 2,400,158

Effect of Transition to SLFRS/LKASs 2,400,158

i Cost of Sales

Recognition of the cost of sales has been changed simultaneous to the changes to the revenue recognition. Thus, cost of sales consist of the directly

attributable cost of goods sold. Accordingly cost of opening stocks and the closing stocks were adjusted to the cost of production in arriving this.

Further, the measurement of unsold harvested crop have been changed.

Further effect of transition to SLFRS/LKAS include the effect on depreciation in 2011/2012 arising on reassessment of Property Plant & Equipment.

GROUP 31/03/2012

Rs.

Impact of recognition of harvesting expenses as per LKAS 18 2,400,158

Depreciation effect on re assessment of useful life of certain Plant & Machinery 1,327,447

Effect of Transition to SLFRS/LKAS 3,727,605

j Other Operating Income

GROUP 31/03/2012

Rs.

Gain on share value and Managed Agricultural Activities as per LKAS 41 22,023,127


k Administrative Expenses

Finance expenses which was previously classified under administration expenses has been reclassified to Finance Cost.

GROUP 31/03/2012

Rs.

Net effect on Reclassification of Finance Cost from Administrative Expenses (1,298,285)

Effect of Transition to SLFRS/LKASs (1,298,285)

l Net Finance Income/cost

Finance expenses which was previously classified under administration expenses has been reclassified to finance cost.

GROUP 31/03/2012

Rs.

Net effect on reclassification of Finance cost from Administrative Expenses 1,298,285




m Taxation

This represents effect on deferred tax adjustments due to reassessment of Property, Plant & Equipment.

GROUP 31/03/2012

Rs.

Net effect on Deferred Tax adjustment due to reassessment of Property, Plant and Equipment 506,510

Effect of transition to SLFRS/LKASs 506,510

37. FINANCIAL RISK MANAGEMENT

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and

controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market

conditions and the Group’s activities.

The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment

in which all employees understand their roles and obligations. The Group Audit Committee oversees how management monitors compliance with

the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced

by the Group.

Financial Risk Factors

The activities of the Company’s and the Group exposed to variety of financial risks:

1. Market Risk - Currency Risk,

- Interest Rate Risk

- Price Risk

2. Credit risk

3. Liquidity risk

The Company’s and the Group’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks to

minimize potential adverse effects on the financial performance of the Company and the Group. Financial risk management is carried out through

risk reviews, internal control systems, insurance programmes and adherence to the Company’s and the Group’s financial risk management policies.

The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risk



1. Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s and the Group's

income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk

exposures within acceptable parameters, while optimizing the return.

a. Currency Risk

The risk that the fair value or future cash flows of a financial instrument fluctuation due to changes in foreign exchange rates. The Company is

exposed to currency risk on sales, purchases that are denominated in a currency other than Sri Lankan Rupees (LKR). The foreign currencies in

which these transactions primarily denominated is US Dollars.

Exposure to Currency Risk

The Group’s exposure to foreign currency risk was as follows based on notional amounts.

The Company and the Group involves with foreign exchange transactions and are exposed to foreign exchange risk arising from various currency

exposures, primarily with respect to the US Dollar. Foreign exchange risk arises when future commercial transactions or recognized assets or

liabilities are denominated in a currency that is not the entity’s functional currency.

31st March 2013 31st March 2012Rs. US Dollars Rs. US Dollars

Trade and Other Payables 16,958,431 135,559 11,433,769 86,567

Trade and Other Receivables 133,901,661 1,070,357 94,768,324 717,507

Cash and Cash Equivalents 29,175,322 233,216 28,933,841 219,063

Gross Statement of Financial Position exposure 146,118,552 1,168,014 112,268,396 850,003

The following significant exchange rates were applicable during the year

Average Rate Reporting Date Spot Rate2013 2012 2013 2012

Rs. Rs. Rs. Rs.

US Dollars 128.14 114.39 125.10 132.08

Sensitivity Analysis

A strengthening of the Rs. as indicated below, against the US Dollar as at 31st March 2013 would have increased/(decreased) the equity and

profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be

reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant.

Strengthening WeakeningProfit or Loss Equity Profit or Loss Equity

Rs. Rs. Rs. Rs.

31st March 2013

USD (10% movement) 14,611,855 - (14,611,855) -

31st March 2012

USD (10% movement) 11,226,840 - (11,226,840) -



b. Interest Rate Risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates

At the reporting date, the Group’s interest-bearing financial instruments were as follows

Carrying Amount 31/03/2013 31/03/2012

Rs. Rs.

Fixed Rate Instruments

Financial Assets

Bank Deposits 38,714,094 30,951,194

Variable Rate Instruments

Financial Liabilities

Bank Overdrafts (147,223,512) (107,639,607)

(117,449,587) (91,825,923)

c. Price Risk

Risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors

specific to the individual instrument or its issuer or factors affecting all instrument traded in the market.

2. Credit risk

Risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Credit risk is

managed on the Company and the Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits

with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables (net of deposits held). Individual

risk limits are set, based on internal or external ratings. The utilization of credit limits is regularly monitored. The Company and the Group place its

cash and cash equivalents with a number of creditworthy financial institutions. The Company’s and the Group’s policy limits the concentration of

financial exposure to any single financial institution. The maximum credit risk exposure of the financial assets of the Company and the Group are

approximately their carrying amounts as at statement of financial position date.

Exposure to Credit Risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows

Carrying Amount2013 2012

Rs. Rs.

Trade and Other Receivables 356,570,036 216,781,989

Amount due from Related Companies 376,554,189 56,854,204

Balances with Banks 109,616,498 77,189,143

842,740,723 350,825,336

Impairment Losses

The Company and the Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of Trade and

Other Receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a

collective loss component established for groups of similar assets in respect of losses that have been incurr but not yet identified. The collective

loss allowance is determined based on historical data of payment statistics for similar financial assets.



The aging of Trade and Other Receivables at the reporting date was as follows;

As at 31/03/2013 As at 31/03/2012 As at 01/04/2011

GrossBalance

GrossBalance

GrossBalance

Rs. Rs. Rs.

Past due 0-30 356,217,909 222,011,515 108,290,644

Past due 31-160 7,709,127 2,659,485 4,603,493

363,927,126 224,671,000 112,894,137

The maximum exposure to credit risk for Trade and Other Receivables as at the reporting date by geographic areas as follows;

Carrying Amount31/03/2013 31/03/2012

Rs. Rs.

Domestic 230,025,436 129,902,628

Europe 36,478,036 24,042,728

Middle East 43,208,744 47,808,141

Asia 1,500,323 20,168,507

United States 5,099,037 2,748,996

Canada 15,031,998 -

Caribbean 32,583,552 -

363,927,126 224,671,000

Cash and Cash Equivalents

The Company held cash and cash equivalents of Rs.109,616,498 at 31st March 2013 (Rs.77,189,143 as at 31st March 2012) which represent its

maximum credit exposure on these assets.

3. Liquidity Risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by

delivering cash or another financial asset. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have

sufficient liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group’s reputation.

Prudent liquidity risk management implies maintaining sufficient liquid funds to meet its financial obligations. In the management of liquidity

risk, the Company and the Group monitor and maintain a level of cash and cash equivalents deemed adequate by the management to finance

the Company’s and the Group’s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying

business, the Company and the Group aim at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available.



CarryingAmount

0-12Months

More than 1 Year

Rs. Rs. Rs.

As at 31st March 2013

Financial Liabilities (Non-Derivative)

Interest Bearing Borrowings 271,177,681 109,924,184 161,253,497

Amounts Due to Related Companies 3,420,232 3,420,232 -

Trade and Other Payables 305,394,597 289,890,646 15,503,951

Bank overdraft 147,223,512 147,223,512 -

Total 727,216,022 550,458,574 176,757,448

As at 31st March 2012

Financial Liabilities (Non-Derivative)

Interest Bearing Borrowings 340,263,865 222,699,677 117,564,188

Amounts Due to Related Companies 62,315,463 62,315,463 -

Trade and Other Payables 311,707,187 308,117,631 3,589,556

Bank overdraft 107,639,607 107,639,607 -

Total 821,926,122 700,772,378 121,153,744

4. Capital Management

The primary objective of the Company’s and the Group’s capital management is to ensure that it maintains a strong credit rating and healthy

capital ratios in order to support its business and maximize shareholder value. The Company and the Group manage its capital structure and make

adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company and the Group may or may

not make dividend payments to shareholders, return capital to shareholders or issue new shares or other instruments. Consistent with others in

the industry, the Company and the Group monitor capital on the basis of the Net Debt to Equity Ratio. This ratio is calculated as Net Debt by total

equity. Net Debt includes non-current and current borrowings as shown in the statements of financial position. Total equity is calculated as ‘Total

equity’ in the statements of financial position.

The Net Debt to Equity Ratio as at 31st March was as follows:

GROUP COMPANY

31/03/2013 31/03/2012 01/04/2011 31/03/2013 31/03/2012 01/04/2011


Total Liabilities 863,725,890 965,126,881 225,021,264 502,232,595 598,288,225 101,997,530

Cash & Cash Equivalents (109,616,498) (77,189,143) (158,770,140) (30,177,569) (40,365,512) (129,464,899)

Net Debt 754,109,392 887,937,738 66,251,124 472,055,026 557,922,713 (27,467,369)

Total Equity 1,909,318,168 1,161,732,369 898,251,564 1,942,805,552 1,152,139,474 877,084,407

Net Debt to Equity Ratio 39% 76% 7% 24% 48% (3%)

5. Operational Risk

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel,

technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory

requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the Company’s operations.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management.

This responsibility is supported by the development of overall Company standards for the management of operational risk in the following areas:



z Requirements for appropriate segregation of duties, including the independent authorization of transactions

z Requirements for the reconciliation and monitoring of transactions

z Requirements for the reconciliation and monitoring of transactions

z Documentation of controls and procedures

z Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks

identified

z Development of contingency plans

z Training and professional development

38. OPERATING SEGMENTS

Segment information is presented in respect of the group's operating segments. Operating Segments are based on the Group's management and

internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment Capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than a

period of one year.

The Group Comprises the following main operating segments:

- Agri Food Exports

- Dairy Production

Agri Food Exports

DairyGroupTotal

As at 31st March 31/03/2013 31/03/2012 31/03/2013 31/03/2012 31/03/2013 31/03/2012


Total Revenue 1,733,258,633 1,872,393,991 831,570,533 102,633,649 2,564,829,166 1,975,027,640

Profit from Operation 255,858,663 361,388,251 (42,773,791) 4,177,557 213,084,872 365,565,808

Net Finance Income/(Cost) (8,729,335) (27,346,893) (13,485,185) (1,977,906) (22,214,520) (29,324,799)

Profit before Taxation 247,129,328 334,041,358 (56,258,976) 2,199,651 190,870,352 336,241,009

Total Assets 2,486,485,922 1,640,973,555 769,297,216 615,583,543 3,255,783,138 2,256,557,098

Fixed Assets Including Investment Property 1,238,362,872 792,940,224 526,135,318 511,117,355 1,764,498,190 1,304,057,579

Non Interest Bearing Liabilities

Deferred Taxation 19,423,673 17,525,859 21,325,809 31,402,849 40,749,482 48,928,708

Retirement Benefit Obligations 19,257,183 16,481,216 6,771,025 7,032,794 26,028,208 23,514,010

Trade & Other Payable 198,752,731 218,713,877 106,641,866 92,993,310 305,394,597 311,707,187



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Group Structure


Classification Name of the Company Location Land PerchesNo. of

BuildingsBuilding in

Sq. ftValue (Rs.000)Cost/Valuation

Lease Hold

Free Hold

Property, Plant& Equipment

Kandy Plantations Ltd. Diwuldeniya 102,552 4 8,094 72,683

Ceylon Botanicals (Pvt) Ltd. Matale 10,842 20,000

Renuka Trading (Pvt) Ltd. Colombo 09 37.80 3 34,706 55,089

Renuka Developments Ltd. Colombo 09 96.36 2 7,507 250,000

Renuka Agri Foods PLC Wathupitiwala 670 8 81,364 103,622

Richlife Dairies Ltd. Wadduwa 681.50 6 57,550 322,187

Investment PropertiesRenuka Trading (Pvt) Ltd. Colombo 09 37.81 55,089

Renuka Developments Ltd. Colombo 09 88.04 228,406

Real Estate Portfolio


2013 2012 2011 2010 2009Year ended 31st March Rs'000 Rs'000 Rs'000 Rs'000 Rs'000

A) Summary of the Operation

Revenue 2,564,829 1,975,028 1,220,656 1,090,513 1,086,298

Gross Profit 604,807 623,072 221,006 311,651 274,145

Profit from Operation 213,085 365,566 148,031 197,078 196,587

Profit before Taxation 190,870 336,241 146,429 187,209 168,842

Taxation (1,180) 1,652 (2,824) (6,014) (3,047)

Profit/(Loss) after Tax 189,691 337,894 143,605 181,195 165,795

Profit attributable to Equity Holders of the Company 200,001 316,443 144,009 181,195 165,795

B) Summary of Financial Position

Capital and Reserves

Stated Capital 1,194,453 552,453 552,453 552,453 282,453

Retained Earnings 714,865 609,279 345,799 242,432 88,861

Shareholders' Fund 1,909,318 1,161,732 898,252 794,885 371,314

Minority Interest 482,739 129,698 34,987 - -

Total Equity 2,392,057 1,291,430 933,239 794,885 371,314

Liabilities

Non-Current Liabilities 291,336 255,493 109,450 40,442 72,644

Current Liabilities 572,390 709,634 115,571 78,564 128,296

Total Liabilities 863,726 965,127 225,021 119,006 200,940

Total Equity and Liabilities 3,255,783 2,256,557 1,158,260 913,891 572,254

Assets

Property, Plant and Equipments 1,450,198 1,207,326 532,613 298,761 288,639

Investment Properties 274,056 55,089 46,275 - -

Other Non-Current Assets 307,669 307,195 8,327 - -

Current Assets 1,223,860 686,946 571,045 615,130 283,615

Total Assets 3,255,783 2,256,557 1,158,260 913,891 572,254

C) Key Indicators

Earnings per share (Rs.) 0.36 0.79 0.36 0.57 0.59

Net Profit Margin (%) 7.40% 17.11% 11.76% 16.62% 15.26%

Net Assets per Share (Rs.) 3.40 2.90 2.24 1.98 1.32

Dividends Paid per share (Rs.) 0.14 0.10 0.10 0.10 -

Dividends Payout (%) 23.27% 27.94% 22.14% 16.96% 0.00%

Dividend Cover (Times) 4.30 3.58 4.52 5.89 -

Interest Cover (Times) 6.06 33.17 92.36 19.97 8.16

Current Ratio (Times) 2.14 .97 4.94 7.83 2.21

Gearing Ratio on Long-Term Debts (%) 8.56% 12.41% 7.90% 2.02% 12.30%

Return on Equity (%) 7.93% 26.16% 15.39% 22.80% 44.65%

Five Year Summary


The issued ordinary shares of Renuka Agri Foods PLC are listed on the Main Board of the Colombo Stock Exchange (CSE).

2013 2012

No of shareholders 3233 2990

No of Shares Listed 561,750,000 401,250,000

Ordinary Shareholders as at 31-03-2013

No ofshares Held

No ofShareholders

TotalShareholding

% No ofShareholders

TotalShareholding

%

2013 2013 2012 2012

1 1,000 1189 547,714 0.10 1112 589,463 0.15

1,001 10,000 1325 5,988,488 1.07 1303 6,185,950 1.54

10,001 100,000 602 16,461,343 2.93 495 12,823,413 3.19

100,001 1,000,000 80 24,793,915 4.41 59 17,608,152 4.39

1,000,001 & Over 37 513,958,540 1.49 21 364,043,022 90.73

Total 3,233 561,750,000 100 2,990 401,250,000 100

Analysis ofShareholders

No ofShareholders

No ofShares

% No ofShareholders

No ofShares

%

2013 2012

Individuals 3113 417,792,724 74.37 2893 367,431,863 91.57

Institutions 120 143,957,276 25.63 97 33,818,137 8.43

Total 3,233 561,750,000 100 2,990 401,250,100 100

Analysis ofShareholders

No ofShareholders

No ofShares

% No ofShareholders

No ofShares

%

2013 2012

Resident 3,176 393,049,551 69.97 2947 271,398,978 67.64

Non-Resident 57 168,700,449 30.03 43 129,851,022 32.36

Total 3,233 561,750,000 100 2,990 401,250,000 100

Public Shareholding

The percentage of share held by public: 47.94 % as at 31st March 2013 (2012- 49.05%)

Share Trading Information

2013 2012Rs. Rs.

Market Value

Highest 6.80 7.10

Lowest 4.00 5.90

As at 31st March 4.10 6.00

No of Trades 6,498 22,018

No of Shares Traded 63,988,740 228,649,436

Value of Share Traded (Rs.) 305,644,521 1,577,472,876

Dividend

Proposed/Paid(Rs.) 56,175,000 78,645,000

(Rs.00.10 per share)

(Rs.00.14 per share)

Shareholder Information


Top 20 Shareholders

As at 31st March 2013 As at 31st March 2012

Name No of Shares % No of Shares %

Renuka Shaw Wallace PLC 281,400,000 50.09% 201,000,000 50.09%

Mr. Talib Tawfiq Al Nakib 46,772,635 8.32% 41,744,167 10.41%

Greven Holdings Ltd 34,735,743 6.19% 25,987,500 6.48%

Grace Foods UK Ltd 22,500,000 4.01% 22,500,000 5.61%

Mr. Abeer Talib Tawfiq Talib Al-Nakib 14,855,280 2.64% - -

Mr. Loay Mahmoud Sayed Hamed Al Naqib 12,500,000 2.23% 6,510,400 1.62%

GraceKennedy Ltd. 12,255,555 2.18% 12,255,555 3.05%

Dr. S.R.Rajiyah & Mrs I.R.Rajiyah (Jt) 8,426,258 1.50% 3,300,000 0.82%

Deutsche Bank As Trustee for Namal Acuity Value Fund 8,220,240 1.46% 5,871,600 1.46%

Deutsche Bank AG National Equity Fund 7,515,480 1.34% 5,368,200 1.34%

Mr. Wayne Dusford 7,000,000 1.25% 5,000,000 1.25%

Mr. Peiris Henry Anthony 5,342,770 0.95% 3,377,500 0.84%

Mr. Kangasu Chelvadura Vignarajah 5,251,540 0.93% 4,447,600 1.11%

Mr. Aasiri Manmohan Iddamalgoda 4,351,095 0.77% 2,605,700 0.65%

Mr. Hashim Ahmed AlSayid Hashim AlGharabally 4,277,237 0.76% - -

Distilleries Co. of Sri Lanka A/c No.2 3,668,560 0.65% 2,620,400 0.65%

Mr. Raheel Ijaz & Mr Anenah A.Raheel (Jt) 3,479,500 0.62% 3,479,500 0.87%

Waldock Mackenzie Ltd. / Mr. Chamila Damion Kohombawickramage 3,350,000 0.60% - -

Mr. Tambi Lebbe Mohamed Imtiaz 3,079,461 0.55% 2,305,300 0.57%

Standard Chartered Bank Singapore S/A HL Bank Singapore Branch 3,000,000 0.53% - -

491,981,354 87.57% 348,373,422 86.82%

Shareholder Information (Contd)


Notice of Meeting

Notice is hereby given that the 13th Annual General Meeting of the Company will be held at the Sri Lanka Foundation Institute No.100 Independence

Square, Colombo 7 on the 25th September, 2013 at 9.00 a.m. for the following purposes.

1. To receive and consider the report of the Directors and the Statement of the Audited Financial Statement for the year ended 31st March 2013

with the report of the Auditors thereon.

2. To Re-elect Ms. A.L. Rajiyah as a Director who retires in terms of Article No.28 (2).

3. To Re-elect Mr. M.K.A. Ranglin as a Director who retires in terms of Article No.28 (2).

4. Mr. P.C.K.Abeykoon retire by rotation in terms of Article 30 (1) and is not seeking re-appointment.

5. To re-elect Mr. C.J. De S. Amaratunge who is above 70 years of age as a director in terms of section 211 of the Companies Act No.7 of 2007

and it is specifically declared that the age limit of 70 years referred to in section 210 of the Companies Act No.7 of 2007 shall not apply to the

said C.J. De S. Amaratunge.

6. To declare a dividend of Rs.0.10 per share.

7. To authorize the directors to determine the contribution to charity.

8. To re- appoint M/s KPMG Chartered Accountants as the auditors & authorize the Directors to determine their remuneration.

By Order of the Board

Sgd.

Renuka Enterprises (Pvt) Ltd.

Company Secretaries

05th August, 2013

NOTE:

a) A member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote instead of the member, such

proxy need not be a member.

b) A form of proxy is enclosed to this report.

c) The completed form of proxy should be deposited at the registered office of the company, “Renuka House” No.69, Sri Jinaratana Road, Colombo

2 on or before 9.00 a.m. on 23rd September, 2013 being not less than 48 hours before the time of the meeting.


Notes


Form of Proxy

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

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

being a member/members of Renuka Agri Foods PLC, hereby appoint:

Dr. S.R. Rajiyah (or failing him)

Mrs. I.R. Rajiyah (or failing her)

Mr. P.C.K. Abeykoon (or failing him)

Mr. L.M. Abeywickrama (or failing him)

Mr. S.V. Rajiyah (or failing him)

Mr. C.J. De S. Amaratunge (or failing him)

Mr. S. Vasanthakumara (or failing him)

Mr. W. Rajapakshe (or failing him)

Ms. A.L. Rajiyah (or failing her)

Mr. M. Terfloth (or failing him)

Mr. M.K.A. Ranglin (or failing him)

………………………………………………..........................................................…(NIC No……..……….........................................................................…………..) of

……………………………………………….................................................................................................................................……………………………….as

my/our proxy to represent me/us and to speak and to vote on my/our behalf at the Annual General Meeting of the Company to be held on

25th September 2013 and at any adjournment thereof and at every poll which may be taken in consequence thereof.

1. To receive & consider the report of the Directors and the Statement of the Audited Financial

Statements for the year ended 31st March 2013 with the report of the Auditors thereon.

2. To re-elect Ms. A.L. Rajiyah as a Director.

3. To re-elect Mr. M.K.A. Ranglin as a Director.

4. To re-elect Mr. C.J. De S. Amaratunge as a Director.

5. To declare a dividend of Rs.00.10 per share.

6. To authorize the Directors to determine the contribution to charity.

7. To re-appoint KPMG, Chartered Accountants as Auditors & authorize the Directors to

determine their remuneration.

Dated this……….............................................…..day of………..............................................2013

……………..........................………………

Signature of Shareholder

(a) A proxy need not be a member of the Company

(b) Instructions regarding completion appear overleaf

For Against


INSTRUCTIONS AS TO COMPLETION OF TH FORM PROXY

1. To be valid, the completed form of proxy should be deposited at the Registered Office of the

Company at “Renuka House” No.69, Sri Jinaratana Road, Colombo 2, not less than 48 hours

before the time of the meeting.

2. In perfecting the form of proxy, please ensure that all the details are legible.

3. Please indicate with an “X” in the space provided how your proxy to vote on each resolution.

If no indication is given, the proxy in his discretion will vote as he thinks fit.

4. In the case of a Company/Corporation, the proxy must be under its Common Seal which

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

5. In the case of a proxy signed by the Attorney, the Power of Attorney must be deposited at the

Registered Office at “Renuka House” No.69, Sri Jinaratana Road, Colombo 2, for registration.

Form of Proxy (Contd)

Name of Company Parent Company

Renuka Agri Foods PLC Renuka Shaw Wallace PLC

Registration No. Registered Office

PB 1108/PQ “Renuka House”

69, Sri Jinaratana Road,

Legal Form Colombo 2, Sri Lanka.

Quoted Public Company with Limited Liability Telephone: 0094-11-2314750-5

Email: [email protected]

Principal Activity Fax: 0094-11-2445549

Agri Business

Postal Address

Subsidiaries P.O. Box 961, Colombo

Renuka Organics (Pvt) Ltd.

Renuka Teas (Ceylon) (Pvt) Ltd. Stock Exchange Listing

Richlife Dairies Ltd. Colombo Stock Exchange

Kandy Plantations Ltd.

Renuka Developments Ltd. Audit Committee

Renuka Trading (Pvt) Ltd. Mr. P.C.K. Abeykoon

Ceylon Forestry (Pvt) Ltd. Mr. C.J. De S. Amaratunge

Ceylon Botanicals (Pvt) Ltd. Mr. L.M. Abeywickrama

Board of Directors Remuneration Committee

Dr. S.R. Rajiyah - (Chairman) Mr. C.J. De S. Amaratunge

Mrs. I.R. Rajiyah Mr. M.S. Dominic

Mr. P.C.K. Abeykoon Mr. L.M. Abeywickrama


Mr. S.V. Rajiyah Auditors

Mr. L.M. Abeywickrama KPMG, Chartered Accountants

Mr. W. Rajapakshe

Mr. M. Terfloth Legal Consultants

Mr. S. Vasantha Kumara Nithya Partners - Attorneys at Law

Ms. A.L. Rajiyah

Mr. M.K.A. Ranglin Bankers


Company Secretaries Hong Kong & Shanghai Banking Corporation Ltd.

Renuka Enterprises (Pvt) Ltd. Commercial Bank of Ceylon PLC

69, Sri Jinaratana Road, DFCC Bank PLC

Colombo 2 DFCC Vardhana Bank PLC

Registrars

S.S.P. Corporate Services (Pvt) Ltd.

546, Galle Road,

Colombo 3.

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contentsthe chairman of renuka shaw wallace plc, shaw wallace ceylon ltd and the managing director...

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