tess agro plc · she also a director of the tess (pvt) ltd, tropic fishery (pvt) ltd and tropic...

Annual Report 2016 - 2017TESS AGRO PLC

Photo : Traditional Stilt Fishing in Southern Sri Lanka.

Annual Report

Our Vision

Our Mission

To achieve the country's best practice in the efficient and effective provision of

service to Sri Lanka's Agricultural and Fisheries Sector.

To perform as a vital link to our rural economy and exploit state of the art

technology to ensure consistency and quality of products & services.

Annual Report

Page

Corporate information 01

Notice of the Meeting 03

Chairperson’s Report 04

Board of Directors 05

Corporate Governance 06

Statements of Compliance 09

Directors' Report 12

Directors' Responsibility for Financial Reporting 14

Audit Committee Report 15

Remuneration Committee Report 16

Related Party Transaction Review Committee Report 17

Independent Auditors' Report 18

Statement of Comprehensive Income 19

Statement of Financial Position 21

Statement of Cash Flow 22

Statement of Changes in Equity 23

Accounting Policies 24

Operating Segments 38

Notes to the Financial Statements 40

Financial Review 64

Investor Information 70

Proxy Form 75

Contents

Annual Report

NAME OF COMPANY : TESS AGRO PLC

REGISTERED OFFICE : 87, New Nuge Road, Kelaniya.

TELEPHONE NO : 2910859

FAX NO. : 2910615

E.MAIL ADDRESS : [email protected]

WEB ADDRESS : www.tess.lk

thDATE, PLACE AND THE AUTHORITY : 20 May 1992, Colombo.

OF INCORPORATION Companies Act. No. 07 of 2007

PB 689 PQ

BOARD OF DIRECTORS : Mrs. S.F. Fernando Prof. Arthur H.De O. Bamunuarachchi

Mr. Shiran Fernando

Mr. Roshan Fernando

Mr. Dilshan Fernando

Mr. A.M.A. Cader

SECRETARIES TO THE COMPANY : Industrial Management

Consultants (Pvt) Ltd, 60 2/2, Pradeepa Mawatha, Colombo 10.

AUDITORS : Sarma & Co., Chartered Accountants 60 2/2, Pradeepa Mawatha,

Colombo 10.

1

Corporate Information

Annual Report

LAWYERS : F J & G De Saram

Corporate Law Office

210 De Saram Road

Colombo 10.

BANKERS TO THE COMPANY : Commercial Bank of Ceylon PLC

City Office

98, York Street,

Colombo 01.

National Development Bank PLC

103 A, Dharmapala Mawatha,

Colombo 07.

Seylan Bank PLC

Colombo Fort Branch, Colombo 01.

Hatton National Bank PLC No. 479, T.B. Jaya Mawatha, P.O.Box 837, Colombo 10.

2

Corporate Information

Annual Report

Notice of Meeting

3

th Notice is hereby given that the Twenty Fourth (24 )Annual General Meeting of Tess Agro PLC rd

will be held at the NDB Auditorium, DHPL Building, No.42, 3 Floor, Nawam Mawatha, thColombo 02, on Friday 29 September 2017 at 10.30 AM for the following purposes.

Agenda:

1. To receive and consider the Annual Report of the Board of Directors on the affairs of the st

Company and the Statements of Accounts for the year ended 31 March 2017 and the

Report of the Auditors thereon.

2. To Re-elect Mrs. S.F. Fernando who is over 70 years of age as a Director, by passing the following resolution.

“The age limit stipulated in section 210 of the Companies Act no 07 of 2007 shall not apply to Mrs. S.F. Fernando who has attained 75 years and that she be re-elected a Director of the company”

3. To Re-elect Prof. A.H.O. Bamunuarachchi who is over 70 years of age as a Director, by

passing the following resolution.

“The age limit stipulated in section 210 of the Companies Act no 07 of 2007 shall not apply to Prof. A.H.O. Bamunuarachchi who has attained 73 years and that he be re-elected a Director of the company”

4. To reappoint M/S Sarma & Co, Chartered Accountant as auditors and authorize the

Directors to determine their remuneration.

5. To authorize the Directors to Determine payments for the year 2017/2018 for charitable and other purposes as set out in the Companies Donations Act (Cap 147).

Note:

1. A member is entitled to appoint a proxy to attend and vote in his/her place.

2. A Proxy need not be a member of the Company.

3. A member wishing to vote by proxy at the meeting may use the proxy form enclosed.

4. To be valid, the completed proxy form must be lodged at the registered office of the

Company not less than 48 hours before the time fixed for the meeting.

By Order of the Board of Directors TESS AGRO PLCIndustrial Management Consultants (Pvt) Ltd,SecretariesColombo

th25 August 2017

Annual ReportChairperson's Report

4

On behalf of the Board of Directors I take th

pleasure in inviting you to the 24 Annual General Meeting of your Company and wish to present to you the annual report and audited accounts of Tess Agro PLC for the year ended

st31 March 2017.

During the past two years the company had to face its biggest challenge as the European Union, which was Sri Lanka's most lucrative market decided to ban Sri Lankan fish being imported into the EU.

Now that Sri Lanka is back in business and thwith the recent announcement on the 15 May

2017 effective June 2017, that Sri Lanka was made eligible for GSP plus which gives Sri Lanka preferential market access to the Europe with duty free status will be a huge boost for the fishery sector.

However, as a result of the ban the raw material supply has been affected over the years as many fisherman have abandoned their livelihood due to the inability to sell fish due to inaccessibility to the market , which now has to be encouraged.

We are hoping that this boost and ability to pay higher prices to fisherman will foster their economic development through increased trade with Europe and providing incentives to take tangible measures towards sustainable development of the fisheries sector.

Operations

During the year under review the company continued to carry out its business by importing from other neighbouring countries such as Maldives and Philippines.

However, this resulted in a higher finance cost to the company which resulted in a lower margins.

Financial Performance

The company recorded a turnover of 333 million oppose to 377 million. The gross margin declined by 3% from 45 Million to 31

Million. Due to the rise in costs of fish due to less production and finance costs for sourcing of raw materials resulted, in a loss of Rs 62 million.

Future outlook

With the re-opening of the European markets, , and the re-introduction of the GSP plus where all marine products will receive duty free status, and measures taken to improve raw material supplies, your company is hopeful of posting better results in the future.

Appreciation

In conclusion I wish to express my sincere gratitude and appreciation to the members of the board, our staff and to the shareholders for their loyalty and confidence placed in us

Mrs. S. Faika Fernando

Chairpersonth

25 August 2017

Annual Report

5

Board of Directors

Mrs. S.F.Fernando

Mrs. Sithy Faika Fernando is Non-Executive Non-Independent Chairperson of the company.

She also a Director of the Tess (Pvt) Ltd, Tropic Fishery (Pvt) Ltd and Tropic Frozen Foods (Pvt) Ltd.

Mr.S.Fernando

Mr.Shiran Fernando is an Executive Director – Operations of the company who is having 27 years' experience in management and in the tea trade, and export market ing of agr icul tura l produce.

He is also the CEO of Tess (Pvt) Ltd and Director of Tropic Fishery (Pvt) Ltd and Tropic Frozen Foods (Pvt) Ltd.

Prof. A. BamunuarachchiB.Sc.(SJU),M.Sc.(UCDUSA),Ph.D.(NSW-AUST.) , D.Sc . (Susl), D.Sc. (SJU)

Prof. Arthur Bamunuarachchi is a Non-Executive Independent Director of the company.

He is a registered Consultant with the ADB, and has functioned as consultant to UNIDO, ILO, FAO, WHO and USAID projects. He is the founder head of the department of food science and technology of university of Sri Jayewardenepura and founder Director of Buttala affiliated university college and the founder chairman of the Institute of Post harvest technology of the Ministry of Agriculture.

He also functions as co-chairman of post harvest and food process t e c h n o l o g y c u r r i c u l u m development project of the world food preservation center related to rural development and is responsible for activities in South and South , East Asia region.

He has held memberships of s e v e r e a l i n t e r n a t i o n a l professional institutes in the field of food scicence and technology. Currently he is a member of the Institute of Chemistry of Sri Lanka, Sri Lanka Association of Fisheries and Aquaculture, member of the Institute of food technology Sri Lanka,

Sri Lanka Association for the Advancement of Science, and a Fellow of the National Academy of Science, Sri Lanka.He is also a fellow of the World Food Preservation Center.

Mr D. Fernando. MBA, FCMI (UK)

Mr. Dilshan Fernando is an Executive Director / CEO of the company who is having 26 years' experience in engineering and management. Holds a Masters D e g r e e i n B u s i n e s s Administration and Fellow Member of the Chartered Management Institute of United Kingdom

He is also a Director of Tropic Fishery (Pvt) Ltd, Tropic Frozen Foods (Pvt) Ltd and Director of Tess (Pvt) Ltd as well as E-Global Services (Pvt) Ltd.

Mr.R.Fernando

Mr. Roshan Fernando is an Executive Director who is having 2 6 y e a r s ' e x p e r i e n c e i n management specialized in fish processing and trained at the S o u t h A s i a n F i s h e r i e s Development Centre Singapore on standardization, processing, quality control and packaging of fishery products.

He is the CEO of Tropic Fishery (Pvt) Ltd and Tropic Frozen Foods (Pvt) Ltd as well as Director of Tess (Pvt) Ltd.

Mr. A.M.A. Cader – FCMA, CGMA (LOND), MBS (COL), MSC (SLIIT), PG ECON (COL)

Mr. A M A Cader is a Non-Executive Independent Director of the company.

He is having 25 years (1990-2015) Corporate Advisory, Capital Markets and Fund Management at Merchant Bank of Sri Lanka and Finance PLC. Exposure 40 years including F i n a n c i a l M a n a g e m e n t , Managemen t Accoun t ing , Treasury Management and Investment Banking with Multi-D i s c i p l i n a r y i n F i n a n c e , Economics, Marketing, and Business Administration

Was former Deputy General Manager has a proven track record of 25 years at Merchant Bank of Sri Lanka and Finance PLC, Corporate Advisory, Capital Markets and Fund Management and Islamic Finance. Presently Non-Executive Director Singha Hospitals PLC, Standard Capital PLC Listed in Colombo Stock Exchange.

Specialized in services such as Share Issue Management, Pre-IPO Restructuring & Advisory, Business Plans, Corporate V a l u a t i o n s , P o r t f o l i o Management, Employee Share Option Plans, Debt Syndications, S e c u r i t i z a t i o n s , D i s p u t e R e s o l u t i o n s , M e r g e r s , Acquisitions and delivering training Programs locally and internationally to Corporates and Individuals.

Annual Report

Corporate Governance

6

Corporate Governance is understood as the system by which companies are directed, managed and controlled. The Board of Directors are responsible for the governance of the Company and maintaining a balance between the achievement of corporate objectives, the alignment of corporate behavior with the expectations of society and accountability to the share holders.

The Board of Directors are committed in

upholding the highest of standards integrity and

transparency in the governance company.of the

Shareholder Relations

The Annual General Meeting is the principal means of having a dia logue with the Shareholders. The Directors disclose and Shareholders are kept aware of any major transaction would have which a material implication to the Shareholders.

The Board of Directors

The Board meets frequently to review routine

activities and matters of significance. The board

reviews and directs the Company's performance

and strategies including of the maintenance

Companies internal controls and provides

leadership.

Reasonable steps are taken by the Directors to

safeguard the Company's assets all times. at

Proper internal controls in place detect are to

irregularities and prevent fraud.

Remuneration Policy

The Company believes that it should attract and

retain top proven business executives with

experience and appropriate qualifications.

Remuneration packages for senior executives are formulated with information obtained from other leading companies in the similar trade and from professional to surveys out by firms carried ensure that senior fairly the executives are well rewarded terms of in the of their contributions Company, their and qualifications experience and in line with industry standards.

Internal Control

The Board has the responsibility to design and

implement internal control systems and reviews

its effectiveness. Internal Controls are designed

to cover the risk arising errors omissions from

and mistakes, safeguarding the assets of the

company and to record and maintains proper

books, through proper procedures.

Going Concern

The the Board is of the reviewing opinion after

financial statements that of the Company, the

Company has to continue the adequate resources

business future.in the foreseeable

Audit Committee

The Audit Committee considers matters pertaining financial affairs. to the Company's Accounting and Internal Control policies and practices, all aspects of risk management, and legal Board has and financial compliance. The appointed an Audit Committee consisting of Two Non Directors.- Executive Independent

Mr. A.M.A. Cader - Chairman Prof. Bamunuarachchi A.H. De O.

The by fellow member of Committee is chaired a Chartered Institute of Accountants Management in this financial Committee held four year, the meetings during the year. The meetings are attended by Executive Director, Chief Financial Officer by invitation and and other Directors Executives it is required.when


7

Annual Report

Duties and Responsibilities

Audit

1. Recommend the Board of the appointment and removal of external auditors and review their terms of engagement.

2. Determine with the external auditors, the audit plan and scope and their authority and responsibilities.

3. Oversee and appraise the quality of audits conducted and monitor their effectiveness.

4. Review external audit reports and recommendations and ensure appropriate management response to recommendations.

5. Monitor the relationship between management and the external auditors.

6. Review and assess the independency of the external auditor.

Accounting

Monitor and review the adequacy of the Company's accounting system and internal control environment.

Review the annual and by annual financial statements of the Company, and make recommendations to the Board.

Determine Company - Specific accounting policies within the ambit of the Accounting Standards.

Review significant transactions which are not a normal part of the Company's business.

Risk Management

Identify and assess areas of risks which might impact on the Company and research appropriate mitigation.

Monitor, review and evaluates the adequacy and effectiveness of the Company's risk management controls, both internally and externally.

Evaluate the effectiveness of the Company's business continuity plans.

Evaluate the adequacy of the Company's insurance covers at least annually.

The Audit Committee recommended to the Board of Directors that M/S Sarma & Co., to re-

stappoint as the Auditors for the year ending 31 March 2017 subject to the approval of the shareholders at the next Annual General Meeting.

Remuneration Committee

The Remuneration Committee will be responsible for ensuring the company has and observes coherent remuneration policies and practices which enable it to attract and retain Executives, directors and employees who will create value for shareholders, generate sustained business performance and support Tess Agro PLCs objectives, goals and values.

The Tess Agro PLCs Remuneration Committee consists of Two Non-Executive Independent Directors as follows;

- ChairmanMr. A.M.A. Cader Prof. A.H.O. Bamunuarachchi

The by fellow member Committee is chaired a of Management Chartered Institute of Accountants in this financial year, the Committee held four during the year. meetings The meetings are by Executive attended Director, Chief Financial Officer by invitation and other Directors Executives it is and when required.

The core responsibilities of the Remuneration Committee is

1. To review and approve Remuneration policy of the Company.

2. To advice on structuring Remuneration packages that enable the Company to attract, retain and motivate high caliber individuals with the requisite skills.

3. To recommend to the Board of Directors the Remuneration to be paid to the Executive Directors, Non-Executive Directors, their pre-requisites and allowances.

Related Party Transaction Review Committee

As per Rule 9.2.3 of the Listing Rules of the Colombo Stock Exchange the Related Party Transactions Review Committee of Tess Agro

stPLC functions with effect from 1 March 2016.

The Tess Agro PLCs Related Party Transaction Review Committee consists of One Non-Executive Independent Director and One Non- Executive Non-Independent Director as follows;

Prof. A.H.O. Bamunuarachchi – Chairman Mrs. S.F. Fernando


8

Annual Report

Mr. Shiran Fernando

Mr. Roshan Fernando

Mr. Dilshan Fernando

Prof. A.H.O. Bamunuarachchi

Mr. A.M.A. Cader

Director

Director

Director/CEO

Non-Executive

Independent Director

Non-Executive Independent Director

5/5

4/5

5/5

3/3

3/3

No

No

No

Member

Chairman

1/4

- 1/4

4/4

4/4

No

No

No

Member

Chairman

-

-

- 1/4

3/3

3/3

No

No

No

No

Chairman

-

-

-

-

3/3

Mrs. S.F. Fernando

Chairperson 4/5 No - No Member 3/3

Member Board

Committee Members

Audit Committee

RemunerationCommittee

Related Party Transaction Review

Committee

Position Attendance Position Attendance Position Attendance Position Attendance

Annual Report

9

Statements of Compliance

Level of compliance with Section 7.10 of the CSE Listing Rules on corporate governance is given in the following table

7.10 a/b Compliance

Compliance with Corporate Government rules

Complied

7.10.1 a Non-executive

Directors

At least one third of the total number of Directors should be Non-Executive

Directors.

Complied

Three of Six Directors are Non-Executive Directors.

7.10.2 a Independent

Directors

Two or one third of Non-

Executive Directors

Whichever is higher shall be Independent.

Complied

Two

of the Three Non-

Executive Directors are independent

7.10.2 b Independent

Directors

Each Non-Executive Director shall submit a declaration of Independence/non-independence in the prescribed format.

Complied

All Independent Non-Executive Directors has submitted signed Confirmations of their independence as at 31st

March 2017.

7.10.3 a Disclosure Relating to

Directors

Name of Independent Directors should be disclosed in the Annual Report.

Complied

Please Refer page 5.

7.10.3 b Disclosure Relating to Directors

The basis for the Board to determine a Director is Independent if criteria specified for independent is not met.

Complied Please refer pages no 5.

7.10.3 c Disclosure Relating to

Directors

A brief resume of each Director

should be included in the Annual Report including the areas of expertise.

Complied

Please refer pages no 5.

7.10.3 d Disclosure

Relating to

Directors

forthwith provide a brief Resume

of new Directors appointed to the Board With details specified in

7.10.3 (a) , (b) and (c) to the

Exchange.

Complied

Resumes of all new directors appointed during the year

Submitted to CSE.

7.10.4 Disclosure

Relating to

Directors

Criteria for defining “Independence’ selection criteria of Independent Directors of a Listed Company

Complied

7.10.5 RemunerationCommittee

A listed Company shall have a remuneration Committee

Complied

7.10.5 a Remuneration

Committee

The Board of Directors should set up a Remuneration Committee

With a Non-executive Director as the Chairman.

Complied

Please refer page

7.

Rule No. Subject Applicable Requirement Compliance Status

Detail

Annual Report

10


7.10.5 b

Function of RemunerationCommittee

The Remuneration Committee shall recommend the remuneration of the Chief Executive officer and Executive Directors

Complied

7.10.5 c

RemunerationCommittee

The names of the members of the Remuneration Committee

Complied

Comprises two Non-Executive Independent Directors Refer page 7.

7.10.6

Audit Committee

A Listed Company shall have an Audit Committee

Complied

Please refer the page number 6.

7.10.6 a

Audit Committee

The listed company shall have an Audit Committee comprising of Non-Executive Directors.

The Chairman or one member of

the Audit Committee should be a member of a recognized

Professional accounting body

Complied

Complied

The names of the members of the Audit committee are stated on page 6.

The Chairman the audit Committee is a Fellow member of Charted Institute ofManagement Accountants

.

7.10.6 b

Audit Committee

The names of the Directors Comprising the Audit Committee to be disclosed.

Complied

Please refer page 6.

The Annual Report shall contain a Report by the Audit Committee setting out the manner of compliance by the entity.

Complied Please Refer page 15.

Unless otherwise determined by the Audit Committee, the Chief Executive Officer and the Chief Financial Officer shall attend Audit Committee Meeting.

Complied

The Chief Executive Officer and the Chief Financial Officer attend Audit Committee meeting

7.10.6 c

Disclosure in Annual Report

1.

The names of the Directors comprising the Audit Committee

2.

Basis of the determination of the independence of the Auditors

3.

Report by the Audit Committee setting out the manner of compliance by the company

Complied

Rule No. Subject Applicable Requirement Compliance

StatusDetail

Annual Report

11


Level of compliance with Section 9.2 of the CSE Listing Rules on Related Party Transactions

9.2.4 Related Party

Transaction Review Committee

Shall meet once

a calendar quarter.

Not Complied

Committee held Three Meetings during the year.

9.3.2 Related Party

Transaction Review Committee-

disclosure in the annual Report

Non-recurrent Related Party

Transactions-if aggregate

value exceeds 10% of the equity or 5% total assets whichever is lower.

Recurrent related party transaction -if aggregate value exceeds 10% Gross revenue /income as per the latest audited accounts Reported by the Related Party Transactions Review Committee.

Complied

Complied

None

None

9.3.2 (c) Reported by the Related Party Transaction Review Committee

Non recurrent Related Party Transactions

Complied

None

9.3.2 (d)

A declaration by the board of Directors.

Complied

None

.

9.2.1& 9.2.3

Related Party Transaction

Review Committee

The Functions of the committee are stated in related party transaction review committee report.

Complied

Refer the page No 17.

9.2.2 Composition

Two Independent Non-Executive Directors and One Executive Director

Complied

Refer the page No 7.

Rule No.

Subject Applicable Requirement ComplianceStatus

Detail

Annual Report

12

The Directors’ Report

The Directors have pleasure in presenting herewith the Report for the year ended 31 March 2017 st

and the Audited Financial Statement of the Company as at date.

Principal ActivitiesThe principal activities of the Company include the provision of Cold Chain Facility for perishables and export of fruits, vegetables & marine products.

Review of OperationsThe review of operations during the year is dealt with in the Chairperson's report.

Internal ControlsPlease refer to the Corporate Governance Practices Statement and the Statement of Directors' Responsibilities on pages & respectively.6 7

Corporate GovernancePlease refer the Corporate Governance Practices on pages 8.6 to

Going ConcernPlease refer the Statement of Directors' Responsibilities on page 6.

Employment PolicyThe company's employment policy is non-discriminatory and practices equal opportunity for all employees irrespective of ethnic origin, religion, political opinion, gender and marital status.

The company is also committed to the development and utilization of skills of the local labour force.

Corporate DonationsThere were no political donations made, other donations granted during the year amounted Rs. 552,500/=

Financial ResultsThe following is a summary of the financial results of the operations of the Company for the year

stended 31 March 2017.

Turnover

Profit/(Loss)before Taxation

Provision for Taxation

Profit/ (Loss) After Taxation

Profit/ (Loss) after Minority Interest

Retained Profit/ (Loss) B/F Profit Available for Appropriation Retained Profit C/F

Company

2017 2016

333,494,558 (74,735,406)

12,291,264 (62,444,141) (62,444,141)

(103,633,763) (227,760,473)

(227,760,473)

377,775,995 (56,855,691)

445,941 (56,409,749) (56,409,749) (44,000,406)

(103,633,762)

(103,633,762)

Annual Report

13

The Directors' Report

Directorate: Prof. Arthur BamunuarachchiMrs. S.F. Fernando Mr. Shiran FernandoMr. Roshan FernandoMr. Dilshan FernandoMr. A.M.A Carder

Capital Expenditure

No capital expenditure incurred on the acquisition of Property, plant and equipment of the Company during the year. Purchase of intangible assets amounted to Rs. 95,000/-.

Property, Plant and Equipment

The details of Property Plant and equipment acquired the year are given in note 12 to the Accounts.

Directors' Shareholdings – Voting Non-Voting 2016/17 2015/16 2016/17 2015/16 Mrs.S.F. Fernando 482,865 482,865 54,926 54,926Mr.Shiran Fernando 400,028 400,028 33,708 33,708Mr.Roshan Fernando 400,028 400,028 33,708 33,708Mr.Dilshan Fernando 633,895 633,895 62,941 62,941Prof.Arthur Bamunuarachchi - - - - Mr.A.M.A Carder - - - -

Directors' Interest in Contracts

The Directors of the Company have no direct or indirect interest in any contract or proposed contracts of the Company, except those disclosed in the Note 31.2 to the Accounts which have been disclosed and declared at the Meetings of the Directors

Share Capital

stAs at 31 March 2017 the company had issued 280,000,000 ordinary shares and 40,000,000 Ordinary Non-Voting Shares the stated capital of the company was Rs. 356,967,698. The total Company

streserves as at 31 March 2017 was Rs.-127,838,257/= (2016 – Rs. -97,772,627/-) this consists of capital reserves of Rs. 99,922,216/- (2016 - Rs. 5,861,135/-) and revenue reserve of Rs.-27,760,473/-. (2015 – Rs. -103,633,763) The movement in these reserves is shown in the statement of changes in equity in page no. 23.

The Accounts for the year have been audited by M/S SARMA & CO., Chartered Accountants who are being eligible offer themselves for re-appointment.

By order of the Board.Industrial Management Consultants (Pvt) Ltd,Secretaries to the Company Colombo

th25 August 2017

Annual ReportDirectors' Responsibility for Financial Reporting

14

The responsibility of the Directors in relation to the financial Statements is set out in Auditors report in page under the caption 18“Respective Responsibilities of Directors and Auditors.”

As per the provisions of the Companies Act No 07, 2007, the Directors are required to prepare financial statements for each financial year giving a true and fair view of the state of affairs of the company as at the end of the financial year.

The Directors are of the view that is preparing these financial statements;

a) Appropriate accounting policies have been selected and applied in a consistent manner and supported by reasonable and prudent judgments and estimates are used, and that all Sri Lankan Accounting standards which they consider applicable are followed.

b) That the company maintains Accounting records which disclose reasonable accuracy the financial position of the Company.

c) The Financial Statements comply with the Companies act no 07 of 2007 and the Sri Lanka Accounting standards.

The Directors are also of the view that the company has adequate resources to continue in operation and have applied the going concern basis in preparing these financial statements.

The Directors have provided the Auditors with every opportunity to take whatever steps and undertake whatever inspections they consider appropriate to express their opinion on the financial statements.

The Directors are of the opinion that the Financial Statements of the Company set out in Pages 18 to 63 have been prepared in accordance with the above requirements and that they have appropriately discharged their responsibilities as set out in this statement.

The Directors also confirm that to the best of their knowledge all taxes and duties payable by the Company and all contributions, levies and taxes payable on behalf of an in respect of the employees of the Company, and all other known statutory obligations including retiring gratuities, as were due as the Balance Sheet date have been pair or provided for in the Financial Statements.

By Order of the Board of DirectorsTESS AGRO PLC.Industrial Management Consultants (Pvt) Ltd.

th25 August 2017.

Annual ReportAudit Committee Report

15

Composition of the Committee

In accordance with the Corporate Governance Guidelines, the Board appointed Audit Committee comprises Two Independent Non - Executive Directors namely Mr. A.M.A. Cader, who functions in the capacity of Chairman, and Prof. Arthur Bamunuarachchi. The Financial knowledge and the business acumen and the independence of the members are brought to bear on the deliberation and judgments on matters that come within their purview.

Role of the Committee

The role and the responsibility of the committee are defined in the Audit Committee Charter, which is reviewed annually to ensure that new developments and other issues are properly addressed. The responsibilities of Committee are – · Review the financial reporting process of

the Tess Agro PLC to ensure accurate and effective financial reporting process is in place

· Review the operation and effectiveness of Internal Control Systems.

· Review the adequacy of disclosures in the Financial Statements in accordance with Sri Lanka Accounting Standards (IFRS), Companies Act and other relevant financial reporting regulations.

· The committee monitors the external audit functions. The internal controls within the company are designed to provide reasonable but not absolute assurance to the Directors and assist them to monitor the financial position of the company.

Appointment of External Auditors

The audit committee makes recommendations to the Board on appointment, reappointment and removal of External Auditors and approvals of terms of engagement and remuneration.

Meetings

The Committee held four meetings during the financial year.

Conclusion

The audit committee is satisfied that the Company accounting policies, operational controls and risk management process provide reasonable assurance that the affairs of the Company is managed in accordance with company policies and that company assets are properly accounted for and adequately safeguarded.

Mr. A.M.A. Cader – FCMA, CGMA (LOND), MBS (COL), MSC (SLIIT), PG ECON (COL)Chairman Audit Committee th25 August 2017

Annual ReportRemuneration Committee Report

16

The Remuneration Committee of Tess Agro PLC is appointed and responsible to its Board of Directors. It comprises of two Independent Non – Executive Directors, namely Mr. A.M.A. Cader who chairs the committee and Prof. A. Bamunuarachchi.

Remuneration Committee is governed by the Remuneration Committee Charter, which has been approved and adopted by the Board of Directors. It is responsible for determining the remuneration policy of the Key Management Personnel of the Company.

Remuneration policy of the Company is based on evaluation of personnel on eight criteria. Annual assessment is carried out and increments and incentives are awarded based on the rating / ranking of each individual.

The Chairman / Managing Director who is responsible for the overall management of the Company assists the committee.

Mr. A.M. A. Cader FCMA, CGMA (LOND), MBS (COL), MSC (SLIIT), PG ECON (COL)Chairman Remuneration Committee

th 25 August 2017

Annual ReportRelated Party Transaction Review Committee

17

Composition

The Board of Directors appointed Related Party Transaction Review Committee comprises of one Independent Non-Executive Director as a capacity of the Chairman to the committee and one Non-Independent Non-Executive Director.

Prof. A. H. O. Bamunuarachchi - ChairmanMrs. S. F. Fernando - Member

Purpose of the Committee

The Purpose of the committee as set out in appendix 9A of the CSE Listing rules is to review all Related Party Transactions except for Transactions set out in rule 9.5,either prior to the transaction being entered into or, if the transaction is expressed to be conditional on such review, prior to completion of the transaction.

Meetings

The Committee has reviewed the transaction in respect of the financial year 2016/17 as required by the applicable rules & regulations and process has been set in the place to facilitate compliance in the future.

Disclosures

As per the existing practice, related party transactions are disclosed to the stakeholders through the Company's Financial Statements and in order to comply with the rules set out in Appendix 9A of the CSE Listing Rules the Committee will establish its functions with a view of further strengthening the internal procedures and pol ic ies with the requirements thereof and relevant disclosures will be made in a timely and detailed manner in future reports. Related Party Transactions entered into without pre-approval of the Committee, shall not be

deemed to violate the Policy, or be invalid or unenforceable, so long as the transaction is brought to the notice of the Committee as promptly as reasonably practical, after it is entered into or after it becomes reasonably evident that the transaction is covered by the Policy.

Prof. A. H. O. Bamunuarachchi ChairmanRelated Party Transaction Review Committee

th25 August 2017

Annual Report

Independent Auditors’ Report

18

Annual Report

19

Statement of Comprehensive Income

stFor the year ended 31 March 2017 2016

(Restated)

Note Rs. Rs.

Revenue 7 333,494,558

377,775,995

Cost of Sales (302,207,752)

(332,502,573)

Gross Profit 31,286,806

45,273,422

Dividend Income 8 17,206

18,591

Other operating Income 9 1,155,253

7,246,929

Distribution Expenses (29,605,712)

(32,390,926)

Administrative Expenses (34,180,806)

(36,198,746)

Other operating Expenses (20,411,373)

(17,620,280)

Results from Operating Activities (51,738,625) (33,671,011)

Finance Cost (23,104,513) (23,428,540)

Finance Income 107,733 243,860

Net Finance Cost (22,996,780)

(23,184,680)

Profit/(Loss) Before Tax 10 (74,735,406)

(56,855,691)

Income Tax Expense 11 12,291,264

445,941

Profit/(Loss) for the year (62,444,141)

(56,409,749)

Rs. Rs.

Earnings per Share - Basic (0.20)

(0.18)

Figures in the brackets indicate deductions

The accounting policies and notes from pages

24 to 63 form an integral part of these financial

statements.

Annual Report

20

Statement of Comprehensive Income

For the year ended 31st March 2017 2016

(Restated) Rs. Rs.

Profit/(Loss) for the year (62,444,141) (56,409,749)

Other Comprehensive Income

Revaluation of Property Plant & Equipment 88,333,175 -

Net Change in Fair Value of

Available for Sale Financial Assets 13,117 (1,437) Acturial gains (losses) on Employee benefit liabilities 401,608 300,701 Other Comprehensive income for the year, net of tax 88,747,900 299,264 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 26,303,758

(56,110,485)

Figures in the brackets indicate deductions

Annual Report

21

Statement of Financial Position

As at 31 st March 2017 2016(Restated)

Note Rs. Rs.ASSETS

Non- Current Assets

Property, Plant & Equipment 12 317,222,607

319,091,400

Leasehold Property 13 170,089,300

90,710,215

Intangible Assets 14 1,311,008

1,394,959

Other Non Current Financial Assets 15 10,337,878

10,324,761

Deferred Tax Assets 27 16,973,814

2,528,078

515,934,606

424,049,412

Current Assets

Inventories 16 1,802,439

2,210,291

Trade & Other Receivables 17 18,603,353

121,743,947

Amount due from Related Parties 18 22,468,604

29,923,117

Other Current Assets 19 22,697,911

40,733,661

Current Investments 20 1,648,945

1,557,699

Cash in Hand and at Bank 21 4,819,924

8,539,769

72,041,176

204,708,483

Total assets 587,975,782

628,757,896

EQUITY & LIABILITIES

Stated Capital 22 356,967,698

356,967,698

Revenue Reseve 23 (227,760,473)

(103,633,763)

Reserves 24 99,922,216

5,861,135

Total equity 229,129,441

259,195,070

Non-Current Liabilities

Interest Bearing Borrowings 25 146,153,772 155,605,265

Employee Benefit Obligations 26 1,638,180 2,119,092 Deferred Tax Liability 27 16,973,814 14,838,485

164,765,766

172,562,842

Current Liabilities

Trade & Other Payables 27 42,145,234

48,825,512

Amount Due to Related Parties 29 16,750,851

24,934,999

Current Portion of Borrowings 25 42,807,950

36,473,550

Short Term Borrowings 25 81,331,520

59,610,681

Other Current Liabilities 30 2,099,857

1,016,667

Bank Overdrafts 21 8,945,163

26,138,574

194,080,576

196,999,983

Total Equity and Liabilities 587,975,782

628,757,896

The above statement of financial position is to be read in conjunction with the accounting policies and notes

to the financial statements on page 24 to 63. st

I certify that the financial statements for the year ended 31 March 2017 are in compliance with the

requirements of Companies Act No 7 of 2007.

Chief Financial Officer

The Board of Directors is responsible for the preparation and presentation of these Financial Statements.

Signed for and on behalf of the Board by,

Chairperson DirectorAugust 14, 2017

Colombo, Sri Lanka.

Annual Report

22

Statement of Cash Flow

For the year ended 31st March 2017 2016

(Restated)

Rs. Rs.

Cash Flow from Operating Activities

Cash Receipt from Customers 406,911,281

406,932,267

Cash Paid to Suppliers and Employees (381,620,019)

(364,401,614)

Cash generated /(used) in Operations 25,291,262

42,530,653

Interest Paid (19,911,798)

(16,345,879)

E.S.C Paid -

(12,528)

Net Cash generated /(used) in Operating Activities 5,379,463

26,172,246

Cash Flow from Investing Activities

Acquisition of Property, Plant & Equipment -

(481,726)

Purchase of intangible assets (95,000) -

Investments made during the year (91,245) (229,760)

Interest Received 107,733 243,860

Proceeds from disposal of Property, Plant and Equipment 640,000 -

Dividend Received 17,206 18,591 Net Cash Flows generated /(used) in Investing Activities 578,693 (449,035)

Cash Flow from Financing Activities

Repayment of Interest Bearing Borrowings (156,721,500) (330,417,074) Proceeds from Interest Bearing Borrowings 164,236,910

319,439,130

Net cash generated / (used) in financing activities 7,515,410

(10,977,944)

Net Increase/(Decrease) in Cash & Cash Equivalents 13,473,566

14,745,267 Cash & Cash Equivalents at the Beginning of the year (17,598,805)

(32,344,072)

Cash & Cash Equivalents at the End of the year (4,125,239)

(17,598,805)

Analysis of Cash and Cash Equivalents

Favorable balances

4,819,924

8,539,769

Unfavorable balancesCash in hand and cash at bank

Bank Overdraft (8,945,163)

(26,138,574)

Total Cash and Cash Equivalents as stated above (4,125,239)

(17,598,805)

Annual Report

23

Statement of Changes in Equity

For

th

e ye

ar e

nd

ed 3

1st M

arch

Sta

ted

Rev

alu

atio

nA

vail

able

for

Cap

ital

Ret

ain

edT

ota

l

Cap

ital

Su

rplu

sS

ale

Res

erve

Res

erve

sE

arn

ings

Rs.

Rs.

Rs.

Rs.

Rs.

Bal

ance

as

at 3

1st

Mar

ch 2

015

356,

967,

698

6,95

2,56

7

392,

017

1,74

7,44

3

(44,0

00,4

06)

322,0

59,3

19

Net

Pro

fit/

(Los

s) f

or t

he y

ear

-

-

-

-

(5

6,4

09,7

49)

(56,4

09,7

49)

Act

uria

l ga

ins

(los

ses)

on

Em

ploy

ee b

enef

it l

iabi

liti

es-

-

-

-

300,7

01

300,7

01

Oth

er C

ompr

ehen

sive

Inc

ome

for

the

Yea

r-

-

(1

,437

)

-

-

(1

,437)

Tot

al C

omp

reh

ensi

ve I

nco

me

for

the

Yea

r-

-

(1

,437

)

-

(56,1

09,0

48)

(56,1

10,4

85)

Pri

or Y

ear

Adj

ustm

ents

-Div

iden

d pa

yabl

e-

-

-

-

(6

,753,7

64)

(6,7

53,7

64)

T

rans

ferr

ed t

o/(f

rom

) re

tain

ed e

arni

ngs

-

(3

,229

,455

)

-

-

3

,229,4

55

-

B

alan

ce a

s at

31s

t M

arch

201

635

6,96

7,69

8

3,72

3,11

2

390,

580

1,74

7,44

3 (1

03,6

33,7

63)

259,1

95,0

70

N

et P

rofi

t/(L

oss)

for

the

yea

r-

-

-

(62,4

44,1

41)

(62,4

44,1

41)

O

ther

Com

preh

ensi

ve I

ncom

e fo

r th

e Y

ear

-

88

,333

,175

13,1

17

-

-

88,3

46,2

92

A

ctur

ial

gain

s (l

osse

s) o

n E

mpl

oyee

ben

efit

lia

bili

ties

-

-

-

-

401,6

08

401,6

08

T

otal

Com

pre

hen

sive

In

com

e fo

r th

e Y

ear

-

88,3

33,1

75

13,1

17

-

(6

2,0

42,5

34)

26,3

03,7

58

P

rior

yea

r ad

just

men

t- H

andl

ing

Cha

rges

-

-

-

-

(56,3

69,3

87)

(56,3

69,3

87)

R

eval

uati

on R

eser

ve-

8,94

4,24

4

-

-

(8,9

44,2

44)

-

T

rans

ferr

ed t

o/(f

rom

) re

tain

ed e

arni

ngs

-

(3,2

29,4

55)

-

-

3,2

29,4

55

-

B

alan

ce a

s at

31s

t M

arch

201

735

6,96

7,69

8

97,7

71,0

76

403,

697

1,74

7,44

3

(227,7

60,4

73)

229,1

29,4

41

Annual Report

24

Accounting Policies

1. REPORTING ENTITY

Tess Agro PLC is a public limited liability company incorporated and domiciled in Sri Lanka and listed on the Colombo Stock Exchange. The Registered Office and principal place of business of the company is located at 87, New Nuge Road, Kelaniya.

The principal activities of the company are export of marine products and provision of Cold Chain facility for perishables.

Tess Agro PLC does not have an identifiable parent.

The notes to the financial statements on pages 40 to 63 form an integral part of the financial statements. The significant accounting policies have been explained below.

2. BASIS OF PREPARATION2.1 Statement of Compliance

The financial statements which comprise the income statement, statement of comprehensive income, statement of financial position, statement of changes in equity and the cash flow statement together with the accounting policies and notes have been prepared in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) as issued by the Institute of Chartered Accountants of Sri Lanka and the requirement of the Companies Act No 7 of 2007.

2.2 Responsibility for financial statements

The Board of Directors of the Company is responsible for the preparation and fair presentation of these financial statements.

2.3 Reporting Date

The financial statements of the company are prepared for each financial year, st

which ends on 31 March.

2.4 Approval of Financial Statements by Directors

stThe financial statements for the year ended 31 March 2017 are authorized for th

issue by the directors on 14 August 2017.

2.5 Basis of Measurement

The Financial Statements are prepared in Sri Lankan rupees, which is the company's functional currency.

Annual Report

25

Accounting Policies

The financial statements referred to are based on historical cost convention, except for property, plant & equipment which has been revalued as explained in accounting policies 3.4.1.1 below.

Financial assets classified as Available for Sale & Held to Maturity are measured at fair value are mentioned in note 15 and 20 to the accounts respectively.

The Company uses the following hierarchy for determining and disclosing the fair value of assets andliabilities by valuation techniques.

Level 1: Quoted (unadjusted)price in active market for identical assets or liabilities

Level 2: Directly or indirectly observable prices in active market for similar assets or Liabilities

Level 3: Inputs that are unobservable that reflect management own assumptions

2.6 Going concern

The Directors have made an assessment as to the company's ability to continue as a going concern and are of the view that the company possess resources to continue in business for the foreseeable future. They further express that there is no intention to liquidate or cease operations of the business. Therefore the financial statements are prepared on the going concern basis.

3. SIGNIFICANT ACCOUNTING POLICIES 3.1. Comparative Information

The presentation and classification of the financial statements of the previous years have been amended, where relevant for better presentation and to comparable with those of the current year.

The accounting policies set out below have been applied consistently for all periods presented in the financial statements by the Company.

3.2 Foreign currency transactions 3.2.1 Foreign currency transactions and balances

All transactions involving foreign exchange are translated at the rate of exchange prevailing at the time the transactions are affected. All monetary assets and liabilities in foreign currency at the year-end are translated at the rate prevailing on the reporting date. The resulting Gains or Losses are dealt with in the statement of comprehensive income.

Non – monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

Foreign currency gains and losses are reported on a net basis in the statement of comprehensive income.

3.2.2 Foreign operations

The operations with the branch office in the overseas are translated in to functional currency at the rate of exchange prevailing at the transaction date and the year end balances are translated at the rate prevailing at the reporting date.

The assets and liabilities of foreign operations are translated to the reporting currency at the rate of exchange prevailing on the reporting date. Income and expenses of the foreign entities are translated at exchange rate approximating to the actual rate at the dates of the transactions.

3.3 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity.

3.4 Assets and bases of their Valuation

3.4.1 Property, Plant and Equipment

3.4.1.1 Recognition and Measurement

Property plant and equipment are recognized if it is probable that future economic benefits associated with the asset will flow to the company and the cost of the asset can be reliably measured.

Property, plant and equipment are stated at cost or valuation less aggregate depreciation. The cost of self- constructed assets includes the cost of materials, direct labor and any other costs directly attributable to brining the assets to the working condition for its intended use, and borrowing cost if the recognition criteria are met

26

Annual Report

Accounting Policies

Annual Report

Capital work in progress represents the accumulated construction cost of the new office premises and the cold room complex at Muthurajawela. Any Items of property, plant and equipment are recognized initially at cost.

The following classes of property, plant & equipment of the company was strevalued on 31 March 2017.

Asset LocationLease hold Land - Peliyagoda, Polonnaruwa, Muthurajawela Machinery - Peliyagoda, Polonnaruwa The revaluation of land and building were carried out by an independent valuer Mr. Arthur Perera a Incorporated Valuers (Sri Lanka).

Any revaluation surplus is recognized in other comprehensive income and accumulated in equity in the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in the income statement, in which case the increase is recognized in the income statement. A revaluation deficit is recognized in the income statement, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.

Accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.

When an item of property, plant and equipment are revalued, the entire class of such asset is revalued at fair value on the date of revaluation. The company has adopted a policy of revaluing assets by professional valuers at least every 5 years.

Borrowing cost that are directly attributable to the acquisition and construction of Muthurajawela project has been capitalized as per LKAS 23.

3.4.1.2 Subsequent cost

The company recognizes in the property, plant and equipment the cost of replacing a part of an item, if it is probable that the future economic benefits embodied in the item will flow to the company and the cost of the items can be measured reliably. The carrying amounts of the parts that are replaced are derecognized from the cost of the asset. The cost of day to day servicing of property, plant and equipment are recognized in the income statement as and when incurred.

Items of property, plant and equipment are derecognized upon replacement, disposal or when no future economic benefit is expected from its use. Any gain

27

Accounting Policies

Annual Report

28

Accounting Policies

or loss arising on derecognizing of the asset is included in the income statement in the year the asset is derecognized.

Upon disposal, any related revaluation reserve is transferred from the revaluation reserve to retained earnings and is not taken in to account in arriving at the gain or loss on disposal.

The carrying values of the property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable.

3.4.1.2 Depreciation

Provision for depreciation is calculated by using a straight line method on the cost or valuation of all property, plant and equipment, in order to write off such amounts over the estimated useful economic life of such assets.

The estimate useful lives of assets are as follows.

Assets Years Leasehold Premises 99 & 30 years Buildings 50 years Plant & Machinery 10 – 20 years

Office Equipment 05 – 10 years Factory Equipment 10 years

Electrical Equipment 05 years Tools 03 years Furniture & Fittings 05 years Motor Vehicles 05 years Factory Utensils 10 years Lab Equipment 10 years Depreciation is provided on the assets when they become available for use.

3.5 Leases

3.5.1 Finance Leases

Leases in items of which the group assumes substantially all the risks and rewards of ownership are classified as finance leases and capitalized & disclosed under property, plant and equipment at their revalued amount & depreciated over the period the company is expected to benefit from them.

The corresponding principal amount payable to the lessor is shown as a liability. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the outstanding balance of the liability. The interest payable over the period of the

Annual Report

29

Accounting Policies

lease is transferred to an interest in suspense account. The interest element of the rental obligations pertaining to each financial year is charged to the income statement over the period of lease.

3.5.2 Lease Hold Property - Land

Lease rentals paid with regards to land usage rights are amortized over the lease term in accordance with the pattern of benefits provided.

Details of such lease rentals are given in note 13 to the Financial Statements.

3.6 Intangible Assets3.6.1 Initial recognition and measurement

The company recognizes intangible assets if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably.

Separately acquired intangible assets are measured on initial recognition at cost. The cost of such separately acquired intangible assets include the purchase price, import duties, non-refundable purchase taxes and any directly attributable cost of preparing the asset for its intended use.

3.6.2 Subsequent Measurement After initial recognition an intangible asset is stated at its costs less any accumulated amortization and any accumulated impairment losses.

3.6.3 Computer SoftwareAll computer software cost incurred, licensed for use by the company, which does not form a integral part of related hardware and which can be clearly identified, reliably measured and it is probable that they will lead to future economic benefits are included under intangible assets and carried at cost less accumulated amortization and any accumulated impairment losses.

3.6.4 AmortizationAmortization is calculated over the cost of the asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in the income statement on a straight line basis over the estimated useful lives of intangible assets, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the Intangible assets are ten (10) years.

3.7 Financial Instruments Financial Instruments are recognized when the company becomes a party to the Contractual Provisions of the instrument.

Financial Instruments are initially measured at fair value.

Annual Report

30

Accounting Policies

3.7.1 Non- Derivative Financial Assets

3.7.1.1 Initial recognition and measurement

Financial assets are classified at their fair value through profit or loss, loans and receivables, held to maturity financial assets and available for sale financial assets.

The company recognizes loans and receivables and deposits on the day the transaction is originated. All other financial assets are recognized initially on the trade date at which the company becomes a party to the contractual provision of the instrument.

3.7.1.2 Financial assets at fair value through profit or loss

Financial assets are recognized at fair value through profit or loss, if it is classified as held for trading in the near future or is designated as such upon initial recognition.

3.7.1.3 Loans and Receivables

Loans and Receivables are initially recognized at fair value plus any directly attributable transaction cost.

Loans and receivables include cash and cash equivalents and trade and other receivables.

3.7.1.4 Held -to - maturity financial assets

Held to maturity financial assets are recognized initially at fair value plus any directly attributable significant transaction costs.

During the year the company has designated fixed deposits as held to maturity investments.

3.7.1.5 Available for sale financial assets

Available for sale financial assets are non- derivative financial assets that are designated as available for sale or are not classified in any of the previous categories. Available sale financial assets are recognized initially at fair value plus any directly attributable transaction costs.

Annual Report

3.7.2 Impairment of 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 is impaired. A financial asset is impaired if, there is objective evidence as a result of one or more events that has occurred after the initial recognition of the financial asset (an incurred 'loss event') and the estimated future cash flows of the investment have been affected.

3.7.3 Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading are recognized in the income statement. The Company has not designated any financial liabilities upon initial recognition as at fair value through profit or loss.

3.7.4 Other financial liabilities

All financial liabilities other than those at fair value through profit and loss are classified as other financial liabilities.

3.7.5 Derecognition of financial assets

The Company derecognizes a financial asset when;

The right to receive cash flows from the asset have expired or the entity has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement and either.

The entity has transferred substantially all the risks and rewards of the asset, or

All other financial liabilities are recognized initially at fair value plus directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest rate method. The financial liabilities include trade and other payables, bank overdrafts, loans and borrowings and financial guarantee contracts.

3.7.7 Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

31

Accounting Policies

Annual Report

32

Accounting Policies

3.8 Investments

Investment in Non-Quoted equity shares are treated as other investment and measured at cost less impairment and treated as other investments in the company's financial statement.

3.9 Inventories

Inventories are stated at lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. The inventories are valued on a first in first out basis. The cost of inventories included cost of acquiring and brining inventories to their present location and condition. Where production is involved cost of inventories included and appropriate proportion of production overheads based on normal based operating capacity.

3.10 Cash and Cash Equivalents

Cash & cash equivalents in the cash flow statement comprise cash at bank and in hand net of outstanding bank overdrafts.

3.11 Impairment

3.11.1 Non Financial Assets

The carrying amounts of the company's non-financial assets other than inventories and deferred tax are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amounts are estimated.

An impairment loss is recognized if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets. Impairment losses are recognized in the income statement.

3.12 Income Tax Expenses

3.12.1 Current Taxes

Provision for income tax is based on the elements of income and expenditure as reported in the financial statements and is computed in accordance with the provision of the relevant tax statutes.

3.12.2 Deferred Tax

Deferred taxation is the tax attributable to the temporary differences that arise when taxation authorities recognize and measure assets and liabilities with rules that differ from those of the financial statements of the company.

Annual Report

33

Accounting Policies

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 measured at the tax rate that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted by the reporting date.

Deferred tax assets and liabilities recognized by the individual companies are disclosed separately as assets and liabilities in the company statement of financial position and are not offset against each other.

3.13 Economic Service Charge

As per the provision of the Economic Service Charge Act No.13 of 2006, economic service charge is payable on the liable turnover at the rate of 0.5%. Economic Service Charge is deductible from the income tax liability. Any unclaimed liability is carried forward and set off against the income tax payable subject to provisions of the Act.

3.14 Provisions and Liabilities

Liabilities are recognized in the statement of financial position when there is a present obligation arising from a past event, the settlement of which is expected to result in an out flow of resources embodying economic benefits. Obligations payable at the demand of the creditor or within one year of the statement of financial position date are treated as current liabilities in the statement of financial position. Liabilities payable after one year from the reporting date are treated as non -current liabilities in the statement of financial position.

All known liabilities have been accounted for in preparing the financial statements.

3.15 Employee Benefits

3.15.1 Short Term Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus if the Company has a present legal or constructive obligation to pay this amount as a result of past service rendered by the employee and the obligation can be measured reliably.

Annual Report

34

Accounting Policies

3.15.2 Post Employee Benefits

3.15.2.1 Defined Benefit Plan – Retiring Gratuity

A defined benefit plan is a post- employment benefit plan other than a Defined contribution plan.

The defined benefit obligation has been calculated based on the projected unit credit method of LKAS 19 employee benefits. All assumptions are reviewed at each reporting date. Details of the key assumptions used in the estimates are contained in Note 26 in the Financial Statements.

Provision has been made in the financial statements for retiring gratuities from the first year of service for all employees in conformity with LKAS 19 on Retirement Benefit Costs.

However, according to the payment of Gratuity Act No 12 of 1983, the liability for payment to an employee arises only after the completion of 5 years continued service.

The liability is not externally funded.

3.15.2.2 Defined Contribution Plans – Employees' Provident Fund and Employees' Trust Fund

All the employees are eligible for Employees' Provident Fund and Employees' Trust Fund Contributions. The Company contributes the defined percentages of earnings of the employees to Employees' Provident Fund managed by Central Bank of Sri Lank and Employees' Trust Fund managed by Employees' Trust Fund Board respectively.

3.15.2.2.1 Employee Provident Fund and Employee Trust Fund

The company contributes a sum equivalent to 12% of the gross emoluments of employees employed in Sri Lanka as provident fund benefit and 3% as trust fund benefit.

3.16 Events after the reporting date

No circumstances have arisen since the reporting date, which would require adjustments to, or disclosure in the accounts.

Annual Report

35

Accounting Policies

4. INCOME STATEMENT

4.1 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured on accrual basis net of trade discounts and value added taxes.

4.2 Loss

The Loss incurred by the company as shown in the income statement is after making provision for impairment, all known liabilities and depreciation of property, plant & equipment.

4.3 Dividend

Dividend income is recognized on cash basis.

4.4 Other Income

Other income is recognized on an accrual basis.

4.5 Finance Income and Expenses

Finance income comprises interest income of funds invested in fixed deposits. Finance expenses comprised of interest expenses on borrowings and leases. Borrowing costs that are not directly attributable to the acquisition, construction or production of qualifying assets are recognized in the income statement.

4.6 Borrowing Cost

Borrowing cost that is not directly attributable to the acquisition, construction or production of qualifying assets is recognized as an expense.

4.7 Expenditure Recognition

Expenses are recognized in the income statement on the basis of a direct association between the cost incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant and equipment to keep them in good condition has been charged to the income statement.

For the purpose of presentation of the income statement, the “expenses by function” method has been adopted, on the basis that it presents fairly the elements of the company performance.

Annual Report

36

Accounting Policies

4.8 Turnover Based Taxes

Turnover based taxes include Value Added Tax, Economic Service Charge and Nation Building Tax.

4.9 Movement of reserves

Movements of reserves are disclosed in the Statement of Changes in Equity.

4.10 Cash Flow

The cash flow of the Company has been presented using the direct method in accordance with LKAS 7 – Statement of Cash Flow.

4.11 Segmental Information

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Companies' other components. All operating segments' operating results are reviewed regularly by the Companies' CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

4.11.1 Primary and Secondary Segments

The Company in the international fish industry and cannot segment its products and services. The Company manages fish trading in two principal geographical areas, Sri Lanka and Europe. In presenting segmental information segment revenue and expenses are based on the geographical locations of the earned or incurred. The primary segment is considered to be the geographical segments based on the Companies' management and internal reporting structure.

I) Segmental information analyzed by geographical segments is disclosed in Note 6 to the financial statements.

ii) All transfers made between the geographical areas in the Company are based on normal market price.

Annual Report

37

Accounting Policies

4.12 Earnings per Share

Basic Earnings per Share is calculated by dividing the net profit for the year attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the year. The weighted average number of ordinary shares in issue during the previous year is adjusted for events that changed the number of ordinary shares in issue without a corresponding change in the resources.

The following data has been used in the computation of the Basic Earnings per share:

st For the year ended 31 March 2017 2016 Rs. Rs. (Restated) Basic Earnings per Share (0.20) (0.18)

Amount used as the Numerator Net Profit /(loss) attributable to Ordinary Shareholders of the Company (62,444,141) (56,409,749)

Amount used as the Denominator Weighted average number of Ordinary Shares in issue 320,000,000 320,000,000

5. New accounting standards issued but not effective as at the reporting date

The Institute of Chartered Accountants of Sri Lanka has issued the following standards which become effective for accounting periods beginning after the current financial year. Accordingly these standards have not been applied in preparing these Financial Statements. The Company expects that these standards when applied will have substantial impact on the financial performance, financial position and disclosures. The Company will be adopting these standards when they become effective.

SLFRS 9 - Financial Instruments- effective for accounting periods beginning on or stafter 1 of January 2018.

SLFRS 15–Revenue from Contract with Customers-- effective for accounting st

periods beginning on or after 1 of January 2018.

stSLFRS 16 – Leases – effective for accounting periods beginning on or after 1 of January 2019

Annual Report

38

Operating Segments

6.1

An

aly

sis

of

Geo

gra

ph

ical

Seg

men

tal

Res

ult

s -

Rev

enu

e

2016

/17

2015

/16

2016

/17

2015

/16

Rs.

Rs.

Rs.

Rs.

Sri

Lan

kan

Sec

tor

Fis

h-

-

-

-

Oth

er7,

740

40

,283

-

-

Tot

al

Sri

Lan

kan

Sec

tor

7,74

0

40,2

83

-

-

Euro

pean

Sec

tor

Fis

h33

3,48

6,81

9

377,

735,

712

-

-

Tot

al

333,

494,

558

37

7,77

5,99

5

-

-

6.1

.1 A

nal

ysis

of

Geo

gra

ph

ical

Seg

men

tal

Res

ult

s -

Rev

enu

e

Rs.

Rs.

Rs.

Rs.

Sal

e of

Fis

h

Oth

erS

ale

of F

ish

O

ther

Ital

y31

6,80

2,04

9

-

30

4,24

9,52

2

-

Bel

giu

m1,

767,

407

-

16

,712

,195

-

Den

mar

k7,

983,

984

-

-

-

UK

6,93

3,37

9

-

56,7

73,9

95

-

S

ri L

anka

-

7,74

0

-

40,2

83

Tot

al

333,

486,

819

7,74

0

377,

735,

712

40,2

83

Ext

ern

alIn

tra

Gro

up

2016

/17

2015

/16

Annual Report

39

Operating Segments

6.2

Ana

lysi

s of

Geo

grap

hica

l Seg

men

tal R

esul

ts -

Ope

rati

onal

Inc

omes

, E

xpen

ses

& P

rofi

ts

2016

/17

2015

/16

2016

/17

2015

/16

2016

/17

2015

/16

2016

/17

2015

/16

Rev

enue

Sale

of F

ish

222,

416,

733

27

7,92

1,84

9

39,9

15,4

43

93,2

01,6

40

71,1

54,6

42

6,61

2,22

3

333,

486,

819

377,

735,

712

Oth

er S

ales

-

-

-

-

7,

740

40,2

83

7,74

0

40,2

83

222,

416,

733

27

7,92

1,84

9

39,9

15,4

43

93,2

01,6

40

71,1

62,3

82

6,65

2,50

6

333,

494,

558

377,

775,

995

Les

s: C

ost o

f Sal

es

Stoc

k as

at b

igin

ing

of th

e ye

ar-

-

-

-

--

3,11

7,06

8

3,

117,

068

Add

: Pur

chas

es16

6,36

5,85

5

188,

256,

531

33

,626

,334

83

,733

,354

59

,521

,299

3,

985,

826

25

9,51

3,48

8 2

75,9

75,7

11

Oth

er O

pera

ting

Exp

ense

s28

,788

,037

32,6

08,6

55

1,37

7,75

0

4,62

6,18

7

12,5

28,4

77

16,1

74,9

51

42,6

94,2

64 53

,409

,793

195,

153,

892

22

0,86

5,18

6

35,0

04,0

84

88,3

59,5

41

73,8

52,2

15

25,4

88,1

36

304,

010,

191

334,

712,

864

Les

s: S

tock

as

at e

nd o

f the

yea

r-

-

-

-

--

--

Cos

t of S

ales

195,

153,

892

22

0,86

5,18

6

35,0

04,0

84

88,3

59,5

41

72,0

49,7

76

23,2

77,8

45

302,

207,

752

332,

502,

573

Gro

ss P

rofi

t / O

pera

ting

Pro

fit

27,2

62,8

41

57,0

56,6

63

4,91

1,35

9

4,84

2,09

9

(887

,394

)

(16,

625,

339)

31,2

86,8

06

45

,273

,422

Gro

ss P

rofi

t Rat

io %

12.2

6

20.5

3

12.3

0

5.20

(1.2

5)

(249

.91)

9.38

11.9

8

Mal

dive

sP

hilip

pine

sSr

i Lan

kaTo

tal

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Annual Report

40

Notes to the Financial Statements


Rs. Rs.

7. REVENUE

Fish - Exports 333,486,819

377,735,712

-Local Sales -

-

Gel Ice 7,740

40,283

333,494,558

377,775,995

7.1 Geographical Segment Analysis

Sale of fish

-Sri Lanka -

-

-Europe 333,486,819

377,735,712

333,486,819

377,735,712

Other Local Sales 7,740

40,283

Total 333,494,558

377,775,995

8. DIVIDEND INCOME

Dividend Received 17,206 18,591

17,206 18,591

9. OTHER OPERATING INCOME

Exchange Gain-Revenue Nature - 3,490,197 Creditors Written Back 894,198 31,859 Reversal for Impairment of Trade Receivable - 3,183,765 Insurance Claims Receivable 252,955

-

Dividend Payable Written Back -

541,108 Sundry Income 8,100

-

1,155,253

7,246,929

10. PROFIT/ (LOSS) BEFORE TAX

Profit before tax is stated after charging all expenses & crediting all the income including the

followings.

Depreciation of Property, Plant and equipment 7,550,426

7,886,719

Amortization of Leasedhold Land 2,465,791

2,465,791

Amortization of Intangible Assets 178,951

174,370

Remuneration to directors 4,140,000

4,140,000

Staff expenses 6,862,342

7,657,060

Defined benefit plan cost - Gratuity 264,195

384,653

Defined contribution plan cost- EPF and ETF 769,035

906,743

Auditors' Remuneration 394,000

324,588

Donations 552,500

582,638

Annual Report

41


For the year ended 31st

March 2017 2016

Rs. Rs.

11. INCOME TAX EXPENSE

11.1 Tax Recognized in Statement of Comprehensive Income

Current Tax Expenses

Tax on Current Year Profit 11.2 19,143

42,787

Deferred Tax Expenses/ (Income)

Deferred Tax Expenses/ (Income) 11.3 (12,071,690)

(488,728)

(12,052,547)

(445,941)

11.2 Reconciliation of Accounting profit to taxable income.

Profit/(Loss) before Taxation (74,735,406)

(56,855,691)

Profits and income not liable for income tax (19,758)

(27,359)

Aggregate other income Considered separately (105,181)

-

Non - taxable receipts / Gains -

(3,959,965)

Aggregate disallowed expenses 26,873,565

29,475,981

Capital Allowances (10,904,700)

(11,354,114)

Aggregate allowable expenses (343,500)

-

Other Income liable for income tax 105,181

235,092

Utilization of Tax Losses (36,813)

(82,282)

Current year tax losses not utilized 59,234,979

42,721,147

Taxable Income/ (Tax Loss) 68,367

152,810

Income tax charged at:

Concessionary rate of 12% - -

Standard rate 28% 19,143 42,787 19,143 42,787

11.3 Deferred Tax Expenses/ (Income)

Deferred Tax origination/ (Reversal) of temporary difference arising from,

Property Plant and Equipment 2,135,329

(488,260)

Employee Benefit Obligation 134,656

(23,506)

Tax Losses Carried Forward (14,341,674)

23,038

(12,071,690)

(488,728)

11.4 Tax Losses carried forward

Unabsorbed adjusted loss

Tax losses brought forward 6,909,758

6,992,040

Tax losses arising during the year 59,234,979

-

Utilization of tax losses (36,813)

(82,282)

66,107,923

6,909,758

Loss during exempt period

Tax losses brought forward 149,988,271

107,267,124

Tax losses arising during the year -

42,721,147

149,988,271

149,988,271

Annual Report

42


12. PROPERTY, PLANT AND EQUIPMENT

As at Additions Revaluation Transferred Disposal As at

COST/ VALUE 01.04.2016 during the Surplus/ from during the 31.03.2017

year Deficit Acc. Dep. year

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

Building 145,846,405

-

-

-

-

145,846,405

Machinery 50,394,225

-

6,488,299

(10,056,610)

-

46,825,914

Office Equipment 10,099,587

-

-

-

-

10,099,587

Factory Equipment 5,706,238

-

-

-

-

5,706,238

Electrical Equipment 1,029,122

-

-

-

-

1,029,122

Tools 214,827

-

-

-

-

214,827

Furniture & Fittings 1,377,501

-

-

-

-

1,377,501

Motor Vehicles 15,977,714

-

-

-

(2,200,000)

13,777,714

Lab Equipment 537,757

-

-

-

-

537,757

Software -

-

-

-

-

-

Capital Work in Progress 122,984,884

-

-

-

-

122,984,884

Total 354,168,260

-

6,488,299

(10,056,610)

(2,200,000)

348,399,949

As at Charge Transferred Disposal As at

ACCUMULATED DEPRECIATION 01.04.2016 for the to during the 31.03.2017

year Cost year

Rs. Rs. Rs. Rs. Rs.

Building 7,151,308

2,916,928

-

-

10,068,236

Machinery 7,536,899

2,519,711

(10,056,610)

-

-


682,690

-

-

7,015,710

Factory Equipment 4,370,391 304,603 - - 4,674,994

Electrical Equipment 561,485 3,400 - - 564,885 Tools 208,761 5,782 - - 214,543 Furniture & Fittings 1,313,282

19,489

-

-

1,332,771


1,044,047

-

(1,393,334)

7,085,845


53,776

-

-

220,359

Software -

-

-

-

-

Total 35,076,860

7,550,426

(10,056,610)

(1,393,334)

31,177,343

As at As at As at As at

CARRYING VALUE 01.04.2016 31.03.2017 01.04.2016 31.03.2017

Building 138,695,097

135,778,169

-

-

Machinery 42,857,326

46,825,914

-

-


3,083,878

3,339,122

3,520,961

Factory Equipment 1,335,847

1,031,244

2,654,317

2,660,207

Electrical Equipment 467,637

464,237

371,357

1,012,122

Tools 6,066

284

135,943

135,943

Furniture & Fittings 64,219

44,730

1,084,658

1,084,658


6,691,869

10,757,480

8,557,480


317,398

-

-

Software -

-

-

-


122,984,884

-

-

Total 319,091,400 317,222,607 18,342,877 16,971,371

Full Depreciated Assets

Annual Report

43


st As at 31 March 2017 2016

Rs. Rs.

CARRYING VALUE

At Cost 7,749,124

7,725,038

At Valuation 309,473,483

311,366,362

Total 317,222,607

319,091,400

The carrying amount of revalued assets that would have been included in the financial statements

had the assets been carried at cost less depreciation.

Building Constructed 117,804,728

120,470,108


122,846,394

Machinery 5,161,564

5,347,402

Cool Room Equipment 8,743,977

11,896,600


5,283,315

256,212,207

265,843,819

13. LEASEHOLD PROPERTY

Leasehold Land

Cost/ Value

Balance at the beginning of the year 98,107,588 98,107,588

Transferred from Acc. Amortization (9,863,164) - 88,244,424 98,107,588

Revaluation Surplus/(Deficit) 81,844,876 - 170,089,300

98,107,588

Accumulated Amortization

Balance at the beginning of the year (7,397,373)

(4,931,582) Amortized during the year (2,465,791)

(2,465,791)

Transferred to Cost/ Value 9,863,164

-

Balance at the end of the year -

(7,397,373)

Carring amount at the end of the year 170,089,300

90,710,215

The carrying amount of revalued lands that would have been included in the financial statements

had the assets been carried at cost less depreciation.

Land 29,432,321

31,509,907

29,432,321

31,509,907

Prepaid lease rentals paid to acquire land use rights have been classified as leasehold property

and are amortized over the lease term in accordance with the pattern of benefits provided.

Annual Report

44


st13.1. Details of Leasehold Land as at 31 March 2017

Leasehold Extent of Period Amount

Property Land of amortized

Rs. A - R - P Lease annually

2017

Rs.

Land at New Nuge Road,

Peliyagoda 123,250,000

0 - 1 - 1.26 99 years 709,393

Land at Polonnaruwa 5,089,300

9 - 3 - 20.8 30 years 395,200

Land at Muthurajawela 41,750,000

1 - 0 - 0 30 years 1,361,198

170,089,300

2,465,791

13.2. Unexpired Lease periods of leasehold land:

Location of the property Unexpired Lease periodsst

as at 31 March 2017 (in years)

Land at New Nuge Road, Peliyagoda 68

Land at Polonnaruwa 5

Land at Muthurajawela 24

13.3. Assets carried at revalued amounts (Relevant to Note 12 and 13)

Assets Category Last Carrying Remaining Carrying

Revaluation Value revaluation Value

date as at Surplus at Cost

31.03.2017

Rs. Rs. Rs.

Land (Leasehold)

Land at New Nuge Road,

Peliyagoda 31st March 2017 123,250,000

72,652,707

50,597,293

Land at Polonnaruwa 31st March 2017 5,089,300

2,718,100

2,371,200

Land at Muthurajawela 31st March 2017 41,750,000

6,967,726

34,782,274

Machinery 31st March 2017 46,825,914

6,488,299

40,337,615

Building 31st March 2013 135,778,169

8,944,244

126,833,925

Annual Report

45


As at 31 st March 2017 2016Note Rs. Rs.

14. INTANGIBLE ASSETS

Computer Software

Cost/ Valuation

Balance as at 1st April 2016 1,743,699

1,743,699

Additions during the year 95,000

-

Balance as at 31st March 2017 1,838,699

1,743,699

Accumulated amortization / impairment

Balance as at 1st April 2016 348,740

174,370

Amortization 178,951

174,370

Balance as at 31st March 2017 527,691 348,740

Carrying value as at 31st March 2017 1,311,008 1,394,959 Carrying value as at 31st March 2016 1,394,959 1,569,329

15. OTHER NON CURRENT FINANCIAL ASSETS

Quoted Equity Investment 15.1 537,878

524,761

Non-Quoted Equity Investment 15.2 9,800,000

9,800,000

10,337,878

10,324,761

Number ofShares

15.1 Quoted Equity Investment

Merchant Bank of Sri Lanka Ltd 230

2,484

2,346

Seylan Bank Ltd 1,786

155,382

153,596

Vanic Incorporation Ltd 687

-

-

Bairaha Farms Ltd 300

48,060

43,200

Lanka Milk Foods Ltd 300

35,100

34,350

Chemical Industries (Colombo) Ltd 338

21,091

24,167

Browns Beach Hotel Ltd 300

6,390

9,750

Galadari Hotel Ltd 1,000

9,200

8,700

Richard Peries & Co. Ltd 500

104,500

105,600

Royal Ceramics Ltd 176

20,944

17,618

Sierra Cables 9,900

29,700

28,710

Dialog Telecom Ltd 4,020

45,426

41,004

Nation Trust Bank 400

29,600

29,680

Odel Ltd 1,200

30,000

26,040

Market Value as at 31st March 537,878

524,761

15.2 Non-Quoted Equity InvestmentTropic Fishery (Pvt) LtdBalance at the end of the year 9,800,000

9,800,000

9,800,000

9,800,000

16. INVENTORIES

Packing Materials 1,802,439

2,210,291

1,802,439

2,210,291

17. TRADE & OTHER RECEIVABLES

Trade Receivables 18,183,968 121,260,387Less: Provision for Impairment - -

18,183,968 121,260,387Other Receivables 398,552 441,934Staff Loans 20,833 41,625

18,603,353 121,743,947

Annual Report

46


As at 31 st March 2017 2016

Note Rs. Rs.

18. AMOUNT DUE FROM RELATED PARTIES

Tess (Pvt) Ltd 20,956,195

28,410,708

Tropic Ice (Pvt) Ltd 1,512,409

1,512,409

22,468,604

29,923,117

19. OTHER CURRENT ASSETS

Deposits, Advance & Prepayments 1,091,729

5,973,901

Income Tax Refundable 19.1 597,683

481,203

Tax Recoverable 19.2 21,008,499

34,278,557

22,697,911

40,733,661

19.1 Income Tax Refundable

At the beginning of the year 481,203

464,712

Provision During the Year (19,143)

(30,022)

WHT Paid 10,338

16,491

Income Tax Payments, ESC Recovered 125,285

30,022.00

At the end of the year 597,683 481,203

19.2 Tax Recoverable

VAT Recoverable 19,318,000 31,319,292 ESC Recoverable 1,690,499 2,959,265

21,008,499 34,278,557 20. CURRENT INVESTMENTS

Short Term Investment 1,648,945

1,557,699

1,648,945

1,557,699

21. CASH AND CASH EQUVIVALENTS

Cash in Hand 2,237,087

2,865,471

Cash at Bank 2,582,837

5,674,298

Bank Overdrafts (8,945,163)

(26,138,574)

Cash and Cash Equivalents in the Statement of Cash Flows (4,125,239)

(17,598,805)

22. STATED CAPITAL

Balance at the end of the year 356,967,698

356,967,698

356,967,698

356,967,698

No. of No. of

shares shares

Balance at the beginning of the year 320,000,000

320,000,000

Balance at the end of the year 320,000,000

320,000,000

Annual Report

47


As at 31st

March 2017 2016Note Rs. Rs.

23. REVENUE RESERVE

Revenue Reserves 23.1 (227,760,473) (103,633,763)

(227,760,473)

(103,633,763)

23.2 Revenue Reserves

The revenue reserve relates to retained earnings set aside by the company.

2017 2016Rs. Rs.

24. RESERVES

Available for Sale Reserve 24.1 403,697

390,580

Revaluation Surplus 24.2 97,771,076

3,723,112

Capital Reserves 24.3 1,747,443

1,747,443

99,922,216

5,861,135

24.1 Available for Sale Reserve

This represent the fair value movement of assets categorised as Available for Sale in the Statement of

Financial Position.

24.2 Revaluation Reserve

The revaluation reserve relates to Property Plant & Equipment which has been revalued by the Company.

24.3 Capital Reserves

The capital reserve represent the difference of exchange transaction of land of the company.

25. INTEREST BEARING BORROWINGS

Long Term Total TotalLoan 2017 2016Rs. Rs. Rs.

As at the beginning of the year 192,078,815

192,078,815

167,839,373

Obtained during the year 20,900,000

20,900,000

187,188,500 Repaid during the year (30,984,275)

(30,984,275)

(174,369,527)

Adjustments/ Exchange Differences 6,967,182

6,967,182

11,420,469

188,961,722

188,961,722

192,078,815

Repayable within one year (42,807,950)

(42,807,950)

(36,473,550)

Repayable after one year 146,153,772

146,153,772

155,605,265

Short Term Total Total

Loan 2017 2016Rs. Rs. Rs.

As at the beginning of the year 59,610,681

59,610,681

74,073,135

Obtained during the year 143,336,910

143,336,910

132,250,629

Prior Year Adjustment -

-

6,701,416

Repaid during the year (125,737,225)

(125,737,225)

(156,047,547)

Adjustments/ Exchange Differences 4,121,154

4,121,154

2,633,047

81,331,520

81,331,520

59,610,681

Repayable within one year (81,331,520)

(81,331,520)

(59,610,681)

25.1 Interest bearing liabilities analyzed by lending institution 2017 2016Rs. Rs.

Commercial Bank 67,086,261 54,605,576

National Development Bank 203,206,982 197,083,920

270,293,243 251,689,496

Annual Report

25

.2 S

ecu

rity

an

d R

epa

ym

ent

term

s

As

at

31

st M

arc

h2

01

72

01

6R

s.R

s.L

end

ing

Natu

re o

f In

tere

st

Rep

aym

ent

inst

itu

tion

faci

lity

rate

term

s

Com

mer

cial

T

erm

Loan

6.5

%120 m

onth

s8

9,0

00

1,3

59

,00

0

Ban

k

Com

mer

cial

T

erm

Loan

PL

R +

2.5

% 60 m

onth

s-

-

Ban

k

Pri

mar

y R

egis

tere

d M

ort

gag

e B

ond N

o 1

171

for

Rs.

7 m

illi

on o

ver

lea

sehold

rig

hts

of

the

Com

mer

cial

T

erm

Loan

PL

R +

2.5

%

com

pan

y o

n t

he

pro

per

ty n

o 8

9 n

ew n

uge

60 m

onth

s-

-

Ban

k

road

Pel

iyag

oda

ow

ned

by T

ess

Agro

PL

C

Com

mer

cial

T

erm

Loan

AW

PL

R +

3%

52 m

onth

s1

9,9

00

,00

0

-

Ban

k

Sec

ondar

y M

ort

gag

e B

ond N

o 1

226 f

or

Rs.

2.0

m o

ver

above

pro

per

ty.

Com

mer

cial

T

erm

Loan

AW

PL

R +

3%

Ter

tiar

y M

ort

gag

e B

ond 1

784 f

or

Rs.

3.0

m54 m

onth

s1

4,0

00

,00

0

16

,25

0,0

00

Ban

kover

the

above

pro

per

ty.

Com

mer

cial

T

erm

Loan

AW

PL

R +

3%

54 m

onth

s1

7,0

00

,00

0

19

,25

0,0

00

B

ank

Quat

ernar

y M

ort

gag

e B

ond n

o 2

885 f

or

Rs.

10.0

m o

ver

the

above

pro

per

ty

Com

mer

cial

T

erm

Loan

PL

R +

4%

24 m

onth

s-

-

Ban

k

Fif

th M

ort

gag

e B

ond n

o 8

4 f

or

Rs.

9 m

Com

mer

cial

F

CB

U L

oan

LIB

OR

+ 6

%

over

the

above

pro

per

ty.

60 d

ays

-

10

,24

2,1

83

B

ank

Com

mer

cial

P

re E

xport

Loan

LIB

OR

+ 6

%

Six

th M

ort

gag

e B

ond n

o. 600 f

or

Rs.

28 m

60 d

ays

16

,09

7,2

61

7,5

04

,39

3

Ban

k

over

the

above

pro

per

ty.

ND

BT

erm

Loan

5.5

%53 m

onth

s1

09

,31

5,0

08

12

0,8

16

,15

0

ND

BT

erm

Loan

5.5

%P

rim

ary m

ort

gag

e over

sto

ck

28 m

onth

s-

-

and b

ook d

ebts

for

US

D 3

15,0

00/-

,

ND

BT

erm

Loan

5.5

%en

han

ced t

o U

SD

630,0

00/-

via

pri

mar

y 53 m

onth

s1

4,4

77

,04

8

17

,36

2,8

00

mort

gag

e bond N

o.3

06

ND

BT

erm

Loan

5.5

%53 m

onth

s1

4,1

80

,66

7

17

,04

0,8

65

Corp

ora

te G

uar

ante

e fr

om

Tro

pic

Fis

her

y

ND

BS

hort

Ter

m L

oan

5.7

5%

(Pvt)

Lim

ited

for

US

D 9

80,0

00/-

90 d

ays

65

,23

4,2

60

41

,86

4,1

05

ND

BT

erm

Loan

5.5

%P

erso

nal

Guar

ante

e fr

om

Mr.

Dil

shan

60 m

onth

s-

-

Fer

nan

do f

or

US

D 1

,545,0

00/-

27

0,2

93

,24

32

51

,68

9,4

96

Sec

uri

ty

48


Annual Report

49


25.3 Interest bearing liabilities Analyzed by Currency Equivalent in Rupees

% Rs. % Rs.

United States Dollars 81.14

219,304,243

85.36

214,830,496

Sri Lankan Rupees 18.86

50,989,000

14.64

36,859,000

100.00 270,293,243 100.00 251,689,496

25.4 Interest bearing liabilities Analyzed by Capital Repayment

Bank/ Institution Less than Payable Payable Payable Total

3 months within within within

3-12 months 1-2 years 2-5 years

Rs. Rs. Rs. Rs. Rs.

Commercial Bank 19,361,261

8,386,000

13,533,000

25,806,000

67,086,261

National Development Bank 74,353,660

22,038,550

37,997,500

68,817,272

203,206,982

93,714,921

30,424,550

51,530,500

94,623,272

270,293,243

2017 2016

Annual Report

50


As at 31 st March 2017 2016Rs. Rs.

26. EMPLOYEE BENEFIT OBLIGATIONS

Obligation as at the beginning of the year 2,119,092

2,035,141

Current Service Cost 152,574

233,832

Benefit paid (343,500)

-

Interest Cost on Benefit Obligation 111,621

150,821

(Gain)/ Loss arising from changes in assumptions

or due to (over)/under provision in the previous year (401,608)

(300,701)

Obligation at the end of the year 1,638,180

2,119,092

The retirement benefit obligation of the company is based on the projected unit credit method of

LKAS 19 Employee Benefits.

The Principal assumptions used in determining the cost of employee benefits were:

Discount rate 8% 8%

Future Salary Increments rate 5.0% 0.0%

26.1 Expenses recognised in the income statementExpenses recognised in the income statementCurrent service cost 152,574

233,832

Interest cost 111,621

150,821

Expenses recognised in other comprehensive incomeNet actuarial (gains)/losses (401,608)

(300,701)

Total (137,412)

83,952

26.2 Sensitivity Analysis

The following table demonstrate the sensitivity to a reasonable possible change in the key assumptions

employed with all other variables held constant in the employment benefit liability measurement, in respect

of the year 2016/17.The sensitivity of the Comprehensive Income and Statement of Financial Position is the effect of the

assumed changes in discount rate and salary increment rate on the profit or loss for the year and

employment benefit obligations as at 31st March 2017.Effect on Effect on

comprehensive employmentincome benefit liability

(reduction)/increase (reduction)/increase

Increase/(decrease) in discount rate

-1% (16,424)

16,424

+1% 16,112

(16,112)

Increase/(decrease) in salary escalation rate

-1% 16,726

(16,726)

+1% (16,737)

16,737

26.3 The principal actuarial assumptions used in determining the liability were:

(i) Discount rate of 8% ( 2015/16 - 8%)(ii) Salary increment rate - for executive staff and non - executive staff - 5% ( 2015/16 - 0%)(iii) Retirement age of 55 years.(iv) The Company will continue in business as a going concern.(v) Staff turnover rates 93% ( 2015/16 - 98%)

Annual Report

51


As at 31 st March 2017 2016

Rs. Rs.

27. DEFERRED TAX LIABILITY

27.1 Movement in Deferred Tax Liabilities

Balance at the beginning of the year 12,310,407

12,799,135

Origination of temporary differences transferred

to / (from) income statement (12,310,407)

(488,728)


12,310,407

27.2 Composition of Deferred Tax Liabilities

Property Plant and Equipment 16,973,814

14,838,485

27.3 Composition of Deferred Tax Assets

Employee Benefit Obligation & Tax Losses (16,973,814)

(2,528,078)

-

12,310,407

28. TRADE AND OTHER PAYABLES

Accrued Charges 3,909,094 1,423,898 Trade Creditors 38,236,140 47,401,614

42,145,234 48,825,512

29. AMOUNT DUE TO RELATED PARTIES

Directors

Mrs.S.F.Fernando 3,400,000

1,750,000 Mr. Dilshan Fernando 3,259,915

4,650,012

Companies

Tropic Frozen Foods (Pvt) Ltd 3,055,600

3,055,600

Tropic Fishery (Pvt) Ltd 7,035,336

15,479,387

16,750,851

24,934,999

30. OTHER CURRENT LIABILITIES

Other Tax Payables

VAT Payable 2,092,452

1,009,262

ESC 7,405

7,405

2,099,857

1,016,667

Annual Report

52


31. RELATED PARTY TRANSACTIONS

The company carries out transaction in the ordinary course of business with parties who are defined as related parties as per Sri Lanka Accounting Standard LKAS 24 – Related Party Disclosures.

31.1 Parent and ultimate controlling party Company does not have an identifiable parent of its own.

31.2 Transaction with key management personnel The company considers its board of directors as the key management personnel.

There were no loans given to directors of the company during the financial year or as at the year end.

Compensation paid to/ on behalf of key management personnel of the company as follows.

Rs. Short term employee benefits 4,140,000

No post employment benefits were paid to key management personnel of the company during the year. The company did not have any material transactions with its key management personnel or the close family members during the year.

Mrs. S.F. Frenando Chairperson of the company is also Director of the Tess (Pvt) Ltd, Tropic Fishery (Pvt) Ltd & Tropic Frozen (Pvt) Ltd.

Mr S. Fernando a Director of company is also a Director of the Tess (Pvt) Ltd, Tropic Fishery (Pvt) Ltd & Tropic Frozen (Pvt) Ltd.

Mr. D. Fernando a Director of the company is also a Director of the Tess (Pvt) Ltd, Tropic Fishery (Pvt) Ltd & Tropic Frozen (Pvt) Ltd.

Mr. R. Fernando a Director of the company is also a Director of the Tess (Pvt) Ltd, Tropic Fishery (Pvt) Ltd & Tropic Frozen (Pvt) Ltd

Transaction carried out by the company with those companies which mentioned above are disclosed in note no. 18 & 29.

Details of transaction carried out by the company with related parties & outstanding balances with the related parties are given in note no. 31.3.

Annual Report

53


31.3

D

etai

ls o

f tr

ansa

ctio

ns

carr

ied

ou

t w

ith

Rel

ated

Com

pan

ies.

Nam

e of

th

e R

elat

ion

ship

Nat

ure

of

Ter

ms

of t

he

Rel

ated

Par

tytr

ansa

ctio

ntr

ansa

ctio

n2

016/

1720

15/1

6

Rs.

Rs.

Tes

s (P

vt)

Ltd

Rel

ated

Com

pany

Rei

mbu

rsem

ents

Sho

rt T

erm

s5,

287,

599

10

,025

,490

Set

tlem

ent

of A

dvan

ces

Mar

ket

Ter

ms

3,18

4,50

0

-

Sho

rt T

erm

Adv

ance

sS

hort

Ter

ms

(1,0

17,5

86)

9,

663,

000

Tro

pic

Fis

hery

(P

vt)

Ltd

Rel

ated

Com

pany

Pur

chas

e of

fis

hM

arke

t T

erm

s-

(1

5,59

0,92

6)

Set

tlem

ent

of A

dvan

ces

Sho

rt T

erm

s(8

,444

,051

)

-

31.4

A

mou

nt

du

e fr

om/

(to)

Rel

ated

Par

ties

Nam

e of

th

e R

elat

ed P

arty

31.0

3.20

1731

.03.

2016

Rs.

Rs.

Tes

s (P

vt)

Ltd

20,9

56,1

95

28,4

10,7

08

T

ropi

c Ic

e (P

vt)

Ltd

1,51

2,40

9

1,51

2,40

9

T

ropi

c F

ishe

ry (

Pvt

) L

td(7

,035

,336

)

(15,

479,

387)

Tro

pic

Fro

zen

Foo

ds (

Pvt

) L

td(3

,055

,600

)(3

,055

,600

)

Tra

nsa

ctio

n w

ith

Tes

s A

gro

PL

C

Ba

lan

ce w

ith

Tes

s A

gro

PL

C

Annual Report

54

Notes to the Financial Statements32.

Fore

ign

Cu

rren

cy T

ran

slati

on

The

Pri

nci

ple

exch

ange

rate

s use

d f

or

tran

slat

ion o

f as

sets

and l

iabil

itie

s as

at

the

report

ing d

ate

is a

s fo

llow

s:

31.0

3.2

017

31.0

3.2

016

US

Doll

ars

151.9

9

144.6

9

GB

Pound

189.9

6

207.9

0

Euro

162.3

6

163.9

5

33.

Fin

an

cial

Inst

rum

ents

Fin

anci

al a

sset

s an

d f

inan

cial

lia

bil

itie

s ar

e m

easu

red o

n a

n o

ngoin

g b

asis

at

eith

er f

air

val

ue

or

amort

ised

cost

. T

he

foll

ow

ing t

able

anal

yse

the

carr

yin

g a

mount

of

finan

cial

ass

ets

and l

iabil

itie

s by c

ateg

ory

as

def

ined

in L

KA

S 3

9 -

Fin

anci

al I

nst

rum

ents

: R

ecognit

ion

and m

easu

rem

ent

under

hea

din

gs

report

ed i

n t

he

Sta

tem

ent

of

Fin

anci

al P

osi

tion:

Note

sF

inan

cial

Fin

an

cial

Fin

an

cial

Fin

an

cial

Tota

lA

sset

sA

sset

sA

sset

sL

iab

ilit

ies

Avail

ab

le f

or

Loan

s &

Hel

d t

oO

ther

Sale

s R

ecei

vab

les

Matu

rity

Fin

an

cial

Lia

bil

itie

sF

inan

cial A

sset

sR

s.R

s.R

s.R

s.R

s.

Oth

er N

on C

urr

ent

Fin

anci

al A

sset

s15

10,3

37,8

78

-

-

-

10,3

37,8

78

Tra

de

& O

ther

Rec

eivab

les

17

-

18,6

03,3

53

-

-

18,6

03,3

53

Am

ount

due

from

Rel

ated

Par

ties

18

-

22,4

68,6

04

-

-

22,4

68,6

04

Short

Ter

m I

nves

tmen

t20

-

-

1,6

48,9

45

-

1,6

48,9

45

Cas

h i

n H

and a

nd at

Ban

k

21

-

4,8

19,9

24

-

-

4

,819,9

24

Tota

l fi

nan

cial A

sset

s-

Tota

l non-c

urr

ent

10,3

37,8

78

-

-

-

10,3

37,8

78

- T

ota

l cu

rren

t-

45,8

91,8

81

1,6

48,9

45

-

47,5

40,8

26

10,3

37,8

78

45,8

91,8

81

1,6

48,9

45

-

57,8

78,7

04

Fin

an

cial

Lia

bil

itie

s

Inte

rest

Bea

ring B

orr

ow

ings

25

-

-

-

146,1

53,7

72

146,1

53,7

72

Em

plo

yee

Ben

efit

Obli

gat

ion

26

-

-

-

1,6

38,1

80

1,6

38,1

80

Tra

de

& O

ther

Pay

able

s28

-

-

-

42,1

45,2

34

42,1

45,2

34

Am

ount

Due

to R

elat

ed P

arti

es29

-

-

-

16,7

50,8

51

16,7

50,8

51

Short

Ter

m B

orr

ow

ings

25

-

-

-

124,1

39,4

70

124,1

39,4

70

Ban

k O

ver

dra

ft21

-

-

-

8,9

45,1

63

8,9

45,1

63

Tota

l F

inan

cial

Lia

bil

itie

s-

Tota

l non-c

urr

ent

--

-147,7

91,9

52

147,7

91,9

52

- T

ota

l cu

rren

t-

--

191,9

80,7

19

191,9

80,7

19

--

-339,7

72,6

71

339,7

72,6

71

2016/2

017

Annual Report

55

Notes to the Financial Statements33

.F

inan

cial

In

stru

men

ts (

con

tnd

…)

Not

esF

inan

cial

F

inan

cial

F

inan

cial

F

inan

cial

T

otal

Ass

ets

Ass

ets

Ass

ets

Lia

bil

itie

sA

vail

able

for

L

oan

s &

Hel

d t

oO

ther

Sal

es R

ecei

vab

les

Mat

uri

tyF

inan

cial

L

iab

ilit

ies

Rs.

Rs.

Rs.

Rs.

Rs.

Fin

anci

al A

sset

s

Oth

er N

on C

urre

nt F

inan

cial

Ass

ets

1510

,324

,761

-

-

-

10,3

24,7

61

Tra

de &

Oth

er R

ecei

vabl

es17

-

121,

743,

947

-

-

121,

743,

947

Am

ount

due

fro

m R

elat

ed P

arti

es18

-

29,9

23,1

17

-

-

29,9

23,1

17

Sho

rt T

erm

Inv

estm

ent

20-

-

1,

557,

699

-

1,55

7,69

9

Cas

h in

Han

d an

d a

t B

ank

21

-

8,53

9,76

9

-

-

8,

539,

769

Tot

al f

inan

cial

Ass

ets

- T

otal

non

-cur

rent

10,3

24,7

61

-

-

-

10,

324,

761

- T

otal

cur

rent

-

160,

206,

832

1,

557,

699

-

16

1,76

4,53

1 10

,324

,761

160,

206,

832

1,

557,

699

-

17

2,08

9,29

2

Fin

anci

al L

iab

ilit

ies

Inte

rest

Bea

ring

Bor

row

ings

25-

-

-

155,

605,

265

15

5,60

5,26

5 E

mpl

oyee

Ben

efit

Obl

igat

ion

26-

-

-

2,11

9,09

2

2,

119,

092

T

rade

& O

ther

Pay

able

s28

-

-

-

48,8

25,5

12

48,8

25,5

12

Am

ount

Due

to

Rel

ated

Par

ties

29-

-

-

24,9

34,9

99

24,9

34,9

99

Sho

rt T

erm

Bor

row

ings

25-

-

-

96,0

84,2

31

96,0

84,2

31

Ban

k O

verd

raft

21-

-

-

26,1

38,5

74

26,1

38,5

74

Tot

al F

inan

cial

Lia

bil

itie

s-

Tot

al n

on-c

urre

nt-

-

-

157,

724,

357

157,

724,

357

- T

otal

cur

rent

-

-

-

195,

983,

316

195,

983,

316

-

-

-

353,

707,

673

353,

707,

673

2015

/201

6

Annual Report

56


34. Fair values measurementThe fair value of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position as at the reporting date are as follows:

Carrying Fair Value Carrying Fair ValueFinancial Assets Amount Amount

Other Non Current Financial Assets- Quoted equity investments 537,878

537,878

524,761

524,761

Trade & Other Receivables 18,603,353

18,603,353

121,743,947

121,743,947

Amount due from Related Parties -

-

-

-


1,648,945

1,557,699

1,557,699

Cash in Hand and at Bank 4,819,924

4,819,924

8,539,769

8,539,769

Total Financial Assets 25,610,100

25,610,100

132,366,176

132,366,176

Financial Liabilities

Interest Bearing Borrowings 188,961,722

188,961,722

192,078,815

192,078,815

Employee Benefit Obligation 1,638,180

1,638,180

2,119,092

2,119,092

Trade & Other Payables 42,145,234

42,145,234

48,825,512

48,825,512

Short Term Borrowings 81,331,520

81,331,520

59,610,681

59,610,681

Amount Due to Related Parties -

-

-

-

Bank Overdraft 8,945,163

8,945,163

26,138,574

26,138,574

Total Financial Liabilities 323,021,820

323,021,820

328,772,675

328,772,675

2016/2017 2015/2016

A number of the Companies' 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 disclosure purposes based on the following methods:

Property plant and equipment The fair value of freehold land is determined based on market values.

The market value of land is the estimated amount for which a property could be exchanged on the date of 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.

Other Investments in Unquoted and quoted equity Shares The fair value investments in quoted equity shares for which there is an active share market is determined using the closing market prices. Investments in non quoted shares are determined based on cost.

Trade and other receivablesFair value of trade receivables is determined at amount estimated to be realized after making provision for impairment which is computed based on a loss rate using past three years debtors data.

Fair value of other receivables are determined based on the amount estimated to be reasonably realized.

Annual Report

57


35. FAIR VALUE MEASUREMENT

The company uses the following hierarchy for determining and disclosing the fair value of assets and

liabilities by valuation techniques.

Level 1: Quoted (unadjusted) price in active market for identical assets or liabilities

Level 2: Directly or indirectly observable prices in active market for similar assets or liabilities

Level 3: Inputs that are unobservable that reflect management own assumptions

35.1. Fair value measurement hierarchy - Company

stAs at 31 March 2017 Level 1 Level 2 Level 3 Total

Rs. Rs. Rs. Rs.

Recurring fair value measurement

Assets measured at fair value

Other non current financial assets

Quoted equity investments 537,878

-

-

537,878

Non - Quoted equity investments -

-

9,800,000

9,800,000

537,878

-

9,800,000

10,337,878

Liabilities measured at fair value

Long term Interest bearing liabilities -

188,961,722

-

188,961,722

Short term Interest bearing liabilities -

81,331,520

-

81,331,520

Bank Overdraft -

8,945,163

-

8,945,163

-

279,238,406

-

279,238,406

Financial LiabilitiesFair value of interest bearing borrowings, Trade and other payable and short term bank borrowings are determined based on the amount estimated to be reasonably incurred in the foreseeable future.

Annual Report

58


36. FINANCIAL RISK MANAGEMENT

The company is subject to market risk, credit risk and liquidity risk and the financial impact that would arise from those risks are mentioned below.

36.1 Market Risk

Market Risk is the risk that the fair value of future expected cash flows of financial instruments will differ from actual cash flows due to impact of external factors such as fluctuation in market interest rates and exchange rates.

Market risk comprise of the following type of risks:

* Interest rate risk* Foreign exchange risk* Equity price risk

36.1.1 Interest Rate Risk

Interest rate risk is the risk that the fair value of the future cash flows of a financial instruments willfluctuate because of changes in market interest rate. The companies' expotion to the risk of changes in market interest rate associate with long term debt obligation with floating interest rate.

stThe Companies' exposure to interest rate risk as at 31 March 2017 and sensitivity analysis to Profit & loss if interest rate increased/decrease by 1% for Rupee loans and 1% for USD loans.

Year 2016/2017 Increase/Decrease Effect on ProfitInterest Rate before Tax

Rs.

Sri Lankan Rupee Loans 1.00% (828,670) USD Loans 1.00% (2,759,627) (3,588,297)

Sri Lankan Rupee Loans -1.00% 245,402

USD Loans -1.00% 1,714,971

1,960,373

Total interest bearing liabilities of the company denominated in USD amounted to Rupees 219.3 million.

Annual Report

59


FINANCIAL RISK MANAGEMENT (CONTND…)

36.1.2 Foreign Exchange Risk

Profit & LossForeign Currency exposure for 2016/2017

EURO GBP TOTAL

Foreign currency denominated income 2,016,237 35,104 2,051,341 Foreign currency denominated Expense 1,569,865 30,255 1,600,120 Net exposure - in foreign currency 446,372

4,849

451,221

Avg conversion rate used for the year 2016/2017 163.16

198.93

Net exposure - in Rs 72,827,776

964,653

73,792,430

Sensitivity AnalysisAvg conversion rate with Rs. 1.00 increase 164.16

199.93

Avg conversion rate with Rs. 1.00 decrease 162.16

197.93

Net exposure - in SLR with Rs. 1.00 increase in the average conversion rate - in Rs 73,274,148

969,503

74,243,651

Net exposure - in SLR with Rs. 1.00 decrease in the average conversion rate - in Rs 72,381,405

959,804

73,341,209

Impact to Profit & Loss

with Rs. 1.00 increase in the average conversion rate - in Rs 446,372

4,849

451,221

with Rs. 1.00 decrease in the average conversion rate - in Rs. (446,372)

(4,849)

(451,221)

The Group being involved in selling fishing internationally and is exposed to foreign exchange risk arising from various currency exposures. Most of the sales transactions are entered into in foreign currencies and invoiced in Euro and Pound.

The company engaged in export in marine products to Europe. Therefore the company is exposed to foreign exchange rate arising from variance currency exposures.

Foreign currency risk is the risk that the fair value of the net cash flows of financial instruments denominated in foreign currency will fluctuate because of changes in foreign exchange rates. The company has business spread across the world and transacts in a multitude of currencies. Therefore the company is exposed to revenue generation and borrowings.

The trade receivables denominated in foreign currency amounted to Rupees 35.4 million.

stThe Companies' exposure to foreign currency risk as at 31 March 2017 and sensitivity analysis to Profit & loss and Equity if exchange rate increase/ decrease by Rs.1/-.

Annual Report

60



36.1.3 Equity Price Risk

The company's listed and unlisted equity securities are susceptible to market price risk arising from

uncertainties about future values of the investment securities.

stThe Companies' exposure to equity price risk as at 31 March 2017 and sensitivity analysis to

Profit & loss and Equity if market price increase/ decrease by Rs.1/-.

Sensitivity Analysis

Total number of quoted equity shares 21,137

Market price with Rs. 1.00 increase 21,137

Market price with Rs. 1.00 decrease 20,450

Impact to Comprehensive Income

with Rs. 1.00 increase in the Market price - in Rs 21,137

with Rs. 1.00 decrease in the Market price - in Rs. 20,450

36.2 Liquidity Risk

Liquidity refers to the ability to meet future liability of a business as and when they become due. The

company has ensured that it maintains sufficient liquid assets to meet all its funding requirements

by closely monitoring and forecasting future funding needs.

stAs at 31 March 2017 Carrying Current Non- Current Payable on

Amount Demand

Rs. Rs. Rs. Rs.

Financial Liabilities

Interest Bearing Borrowings 188,961,722

42,807,950

146,153,772

-

Trade Payables 38,236,140

38,236,140

-

-

Other Provisions and Payables 3,909,094

3,909,094

-

-

Short term Bank Borrowings 90,276,684

81,331,521

-

8,945,163

Total 321,383,640

166,284,705

146,153,772

8,945,163

Annual Report

61



36.3 Credit Risk

Credit risk refers to the risk faced by the company due to the risk of counterparty defaulting on

its contractual obligation in relation to a financial instrument or customer contract. The company

is exposed to credit risk from its operating activities due to wide spread of customer base across

the globe.

stAs at 31 March 2017 Balance Allocation

Rs. %

Financial Assets

Available for sale Investments

Quated Equity Investments 537,878

1.52%

Non-Quated Investments 9,800,000

27.68%

Loans & Receivables

Trade & Other Receivables 18,603,353

52.54%


4.66%

Cash in Hand and at Bank 4,819,924

13.61%

Total credit exposure 35,410,100

100.00%

Credit exposure on Receivables

Trade Receivables

The Companies' maximum exposure to credit risk on trade receivables as at the year end based

on the carrying value in the statement of financial position is given below:

stAs at 31 March 2017 Note Rs.

Trade Receivables 17 18,183,968

Total 18,183,968

Cash At Banks

The Companies' maximum exposure to credit risk on Cash at Bank as at the year end based

on the carrying value in the statement of financial position is given below:

st As at 31 March 2017 Balance Allocation

Rs. %

Government owned Banking Institutions - - Commercial Banks 2,582,837

100

Total 2,582,837

100

Annual Report

62



Maximum exposure to credit risk for trade receivables at the reporting date by type of

counterparty

The below table gives an overview of the Companies' credit exposure related to trade receivables by

counterparty.

stAs at 31 March 2017 Balance Allocation

Rs. %

Operators - Local -

0.00%

Operators - Foreign 18,183,968

100.00%

Related -

0.00%

Total 18,183,968

100.00%

Impairment Loss for Trade Receivables

stAs at 31 March 2017 Balance

Rs.

Less than 30 days 10,215,351

30 - 60 days 997,821 60 - 90 days - 90 -180 days - 180 - 365 days 6,970,796 More than 365 days -

18,183,968 Less: Impairment of Trade Receivables - Carrying Value of Trade Receivables 18,183,968

The movement in the allowance for impairment in respect of trade receivables during the year was:

stAs at 31 March 2017 Balance

Rs.

Balance at the beginning of the year -

Impairment provision recognised -

Reversal of Impairment provision -


Annual Report

63


37. CAPITAL MANAGEMENT

The company objective when managing capital are to safeguard the companies ability to

continue as a going concern in order to provide returns for shareholders and benefits for

other stakeholders and to maintain an optimal capital structure to reduce the cost of the

capital.

The capital of the company consist of the following:

Equity Capital

- Ordinary share capital

Ordinary share capital (Voting)

Ordinary share capital (Non Voting)

Debt

- Long term borrowings

- Short term borrowings

The company monitor capital on the basis of the debt equity ratio. This ratio is calculated

based on the long term interest bearing debt divided by total equity capital. Total debt

consist of total non current borrowings and total equity consist of total ordinary share capital

and total reserves. The following factors are also objectively taken into consideration in

managing capital of the group.

1. Maintain sufficient capital to meet minimum regulatory requirements. (Companies Act)

2. Maintain strong equity base as opposed to debt capital

3. Companies future developments, investments and business strategies

4. Company cash flow projections and ability to pay higher returns to shareholders

Annual Report

64

Financial Review

STATEMENT OF VALUE ADDED

stAs at 31 March 2017 2016

Company Company

Rs '000 Rs '000

Net Sales 333,495

377,776

Add: Other Income 1,155

7,247

334,650

385,023

Less: Cost of Materials & Services (355,130)

(401,820)

(20,481) (16,797)

Distributed as follows:

To Employees (Salaries & other costs) 12,036 13,088 To Lenders of Capital (Interest on loan capital & minority interest) 19,912 16,346 Depreciation 10,016

10,178

Dividends -

-

Retained for Reinvestment & Future Growth / (Loss) (62,444)

(56,410) (20,481)

(16,797)

Annual Report

65

Financial Review

QUARTERLY STATISTICS

INCOME STATEMENT

For the three months endedth

30th

30 st

31 st

31 June September December March2016 2016 2016 2017

Revenue 74,538,436

108,340,073

79,965,997

70,650,052

Cost of Sales (61,986,012)

(95,831,970)

(70,289,962)

(65,017,975)

Gross Profit 12,552,424

12,508,103

9,676,035

5,632,077

Dividend Income 7,816

3,326

1,050

5,014

Other operating Income - - - -

Distribution Expenses (1,445,379) (2,880,671) (5,052,168) (2,782,374)

Administrative Expenses (8,522,878)

(9,315,047)

(10,278,759)

(9,777,019)

Other operating Expenses (1,162,084)

61,885

-

(2,437,079) Results from Operating Activities 1,429,899

377,596

(5,653,842)

(9,359,381)

Finance Cost (4,980,889)

(5,966,471)

(6,131,512)

(2,724,951)

Finance Income -

-

-

107,733

Net Finance Cost (4,980,889)

(5,966,471)

(6,131,512)

(2,617,218)

Profit/(Loss) Before Tax (3,550,990)

(5,588,875)

(11,785,354)

(11,976,599)

Income Tax Expense -

-

-

-

Profit/(Loss) for the year (3,550,990)

(5,588,875)

(11,785,354)

(11,976,599)

Annual Report

66

Financial Review

QUARTERLY STATISTICS

STATEMENT OF FINANCIAL POSITION

As atth 30 th30 st31 st31

June September December March2016 2016 2016 2017

ASSETS

Non- Current Assets 418,746,295

418,093,899

415,601,930

413,014,968

Current Assets 185,499,371

200,091,481

181,341,425

169,752,807

Total assets 604,245,666

618,185,380

596,943,355

582,767,775

EQUITY & LIABILITIES

Total equity 250,225,018

250,055,207

238,269,851

226,283,114

Non-Current Liabilities 185,336,273

176,195,902

167,617,538

160,712,159

Current Liabilities 168,684,375 191,934,271 191,055,966 195,772,503

Total Equity and Liabilities 604,245,666 618,185,380 596,943,355 582,767,775

SHARE INFORMATION

As at th 30 th30 st31 st31 June September December March2016 2016 2016 2017

No. of Ordinery Shares 320,000,000

320,000,000

320,000,000

320,000,000

Earnings / (Loss) Per Ordinary Share (0.01)

(0.02)

(0.04)

(0.04)

Net Asset Value Per Share 0.78

0.78

0.74

0.71

Market Price Per Share (Voting) Highest 2.00

1.70

1.70

1.60

Lowest 1.10

1.40

1.30

0.90

Closing 1.40

1.60

1.30

1.00

Market Price Per Share (Non Voting) Highest 1.90

1.50

1.40

1.40

Lowest 1.00

1.20

1.20

0.80

Closing 1.20

1.40

1.20

1.00

Annual Report

67

Financial Review

FIV

E Y

EA

RS

SU

MM

AR

Y

stY

ear

end

ed 3

1 M

arch

2013

2014

2015

201

62

01

7

(Res

tate

d)

(Res

tate

d)

Op

erat

ing

Res

ult

s

Rev

enue

507

,506

,402

365,

067,

568

444,

929,

422

377,

77

5,9

95

33

3,4

94

,55

8

Cos

t of

sal

es(4

66,

481

,988

)

(328

,958

,864

)

(434

,071

,511

)

(332

,50

2,5

73

)

(30

2,2

07

,75

2)

Gro

ss P

rofi

t41

,024

,414

36,1

08,7

04

10

,857

,911

45,2

73

,42

2

3

1,2

86

,80

6

Net

Pro

fit

/ (L

oss)

Bef

ore

Tax

atio

n(1

5,8

08,2

89)

(18,

465,

385)

(49,

558,

581)

(56,

85

5,6

91

)

(74

,73

5,4

06

)

Les

s: P

rovi

sion

for

Tax

atio

n-

-

(1

,240

,058

)

4

45

,94

1

1

2,2

91

,26

4

N

et P

rofi

t /

(Los

s) f

or t

he

year

(15

,808

,289

)

(18,

465,

385)

(50,

798,

639)

(56,

40

9,7

49

)

(62

,44

4,1

41

)

Sh

areh

old

er's

Fu

nd

s

Sta

ted

Cap

ital

204

,967

,698

356,

967,

698

356,

967,

698

356,

96

7,6

98

35

6,9

67

,69

8

Res

erve

s an

d R

etai

ned

Ear

ning

s12

4,5

35,2

46

26,8

03,7

29

(3

4,90

8,37

9)

(97,

77

2,6

28

)

(12

7,8

38

,25

7)

T

otal

Sh

areh

old

er's

Fu

nd

s32

9,5

02,9

44

383,

771,

427

322,

059,

319

259,

19

5,0

70

22

9,1

29

,44

1

Lia

bil

itie

s

Inte

rest

Bea

ring

Bor

row

ings

76,7

34,3

58

152,

189,

909

130,

278,

604

155,

60

5,2

65

14

6,1

53

,77

2

Em

ploy

ee B

enef

it O

blig

atio

ns1

,728

,594

1,88

5,79

2

2,03

5,14

1

2,11

9,0

92

1,6

38

,18

0

O

ther

Def

erre

d L

iabi

liti

es81

7,02

9

196,

829

-

-

-

Def

erre

d T

ax L

iabi

lity

-

-

15,3

26,7

45

14,8

38

,48

5

16

,97

3,8

14

Tra

de &

Oth

er P

ayab

les

28,3

30,2

37

34,4

59,9

42

37,1

44,1

58

48,8

25

,51

2

42

,14

5,2

34

Am

ount

Due

to

Rel

ated

Par

ties

3,1

05,5

90

3,30

9,53

1

3,34

6,55

0

24,9

34

,99

9

16

,75

0,8

51

Cur

rent

Por

tion

of

Bor

row

ings

56,3

21,8

30

38,7

33,7

09

37,5

60,7

70

36,4

73

,55

0

42

,80

7,9

50

Sho

rt T

erm

Bor

row

ings

94,2

61,8

55

47,6

22,0

09

74,0

73,1

35

59,6

10

,68

1

81

,33

1,5

20

Oth

er C

urre

nt L

iabi

liti

es1

,861

,620

1,24

3,54

1

1,02

8,78

9

1,01

6,6

67

2,0

99

,85

7

Ban

k O

verd

raft

s24

,261

,956

2,15

4,10

2

37,6

00,0

12

26,1

38

,57

4

8,9

45

,16

3

Tot

al E

qu

ity

and

Lia

bil

itie

s61

6,9

26,0

12

665,

566,

791

660,

453,

222

628,

75

7,8

96

58

7,9

75

,78

2

Annual Report

68

Financial Review

FIV

E Y

EA

RS

SU

MM

AR

Y (

CO

NT

ND

…)

stA

s at

31

Mar

ch20

1320

1420

1520

1620

17

(Res

tate

d)

(Res

tate

d)

Ass

ets

Pro

pert

y, P

lant

& E

quip

men

t33

7,94

1,59

0

284,

596,

249

32

7,89

1,35

1

319,

091,

400

31

7,22

2,60

7

Lea

sehol

d P

rope

rty

9,93

7,29

0

95

,641

,797

93,1

76,0

06

90

,710

,215

170,

089,

300

Inta

ngib

le A

sset

s-

-

-

1,39

4,95

9

1,31

1,00

8

Oth

er N

on C

urre

nt

Fin

anci

al A

sset

s-

10,1

65,6

07

10

,328

,757

10,3

24,7

61

10

,337

,878

Def

erre

d T

ax A

sset

s-

-

2,

527,

610

2,52

8,07

8

16,9

73,8

14

Inven

tori

es9,

172,

819

7,72

7,82

6

5,

635,

552

2,21

0,29

1

1,80

2,43

9

Tra

de &

Oth

er R

ecei

vab

les

182,

731,

012

17

7,43

7,20

0

144,

349,

107

12

1,74

3,94

7

18,6

03,3

53

A

moun

t du

e fr

om

Rel

ated

Par

ties

25,7

62,5

08

27

,359

,974

32,0

35,0

62

29

,923

,117

22,4

68,6

04

O

ther

Curr

ent A

sset

s39

,891

,851

31,4

63,8

33

37

,925

,900

40,7

33,6

61

22

,697

,911

Curr

ent

Inve

stm

ents

1,17

9,51

6

1,

179,

516

1,32

7,93

9

1,

557,

699

1,

648,

945

C

ash i

n H

and

and

at B

ank

10,3

09,4

26

29

,994

,789

5,25

5,93

9

8,

539,

769

4,

819,

924

T

ota

l as

sets

616,

926,

012

66

5,56

6,79

1

660,

453,

222

62

8,75

7,89

6

587,

975,

782

Cash

Flo

w

Cas

h F

low

fro

m O

pera

ting

Act

ivit

ies

(81,

506,

908)

12,3

62,6

63

25,9

42,4

86

26,1

72,2

46

5,37

9,46

3

C

ash F

low

fro

m I

nve

stin

g A

ctiv

itie

s(1

6,90

7,34

5)

(53,

199,

477)

(219

,275

)

(449

,035

)

578,

693

Cas

h F

low

fro

m F

inan

cing

Act

ivit

ies

103,

434,

955

82,6

30,0

31

(10,

977,

944)

(10,

977,

944)

7,51

5,41

0

N

et C

ash

In

crea

se/(

Dec

rease

) 5,

020,

703

41,7

93,2

17

14,7

45,2

67

14,7

45,2

67

13,4

73,5

66

Annual Report

69

Financial Review

FIV

E Y

EA

RS

SU

MM

AR

Y (

CO

NT

ND

…)

2013

2014

2015

201

620

17

(Res

tate

d)

(Res

tate

d)

KE

Y I

ND

ICA

TO

RS

Un

its

Div

iden

d p

er S

har

eR

s.-

-

-

-

-

Div

iden

d G

row

th R

ate

%-

-

-

-

-

Div

iden

d C

over

Tim

es

-

-

-

-

-

Ear

ning

s pe

r S

hare

R

s.(0

.09)

(0.0

6)

(0

.16)

(0.1

8)

(0

.23)

Ear

ning

s G

row

th R

ate

%(1

.90)

0.02

(5.8

8)

0.00

(1

8.59

)

Ret

urn

on S

hare

s H

old

er's

Fun

ds%

(0.0

5)

(0

.05)

(0.1

6)

(0.2

2)

(0

.27)

Net

Ass

ets

per

Sha

re

Rs.

1.83

1.

20

1.

00

0.81

0.

72

Mar

ket

Val

ue p

er S

hare

R

s.2.

00

1.30

1.30

1.10

1.

00

Pri

ce/E

arnin

gs R

atio

Rat

ione

gati

vene

gati

vene

gati

ve

neg

ativ

ene

gati

ve

Cur

rent

Rat

ioT

imes

1.

29

2.16

1.19

1.04

0.

37

Inte

rest

Cov

erT

imes

(1

.05)

0.13

(1.7

7)

(1.7

4)

(2

.45)

Deb

t/ E

qui

ty

%0.

31

0.62

0.76

0.97

1.

18

Annual Report

70

Investor Information

1. Financial Results


Rs. Rs.

Revenue 333,494,558 377,775,995

Profit / (Loss) before Tax (74,735,406) (56,855,690)

Income Tax Expense 12,291,264 445,941

Profit / (Loss) for the period (62,444,141)

(56,409,749)

Retained Profit/(Loss) B/F (103,633,763)

(44,000,406)

Profit / (Loss) available for Appropriation (227,760,473)

(103,633,763)

Retained Profit / (Loss) C/F (227,760,473)

(103,633,763)

Annual Report

71


2. Stock Exchange st

The Income Statement for the year ended 31 March 2017 and the Balance Sheet of Company, has been submitted to the Colombo Stock Exchange within three Months of the Balance sheet date.

st3. Ordinary voting shareholders as at 31 March 2017.

Range No of Shareholders No of Shares % Holding

1-500 1552 190,337

0.1%501-1,000 341 272,409

0.1%

1,001-10,000 1570 6,051,915

2.2%10,001-50,000 673 15,413,221

5.5%

50,001-100,000 147 10,911,605

3.9%100,001-500,000 155 32,297,071

11.5%

500,001-1,000,000 15 10,860,872 3.9%1,000,001-10,000,000 22 51,560,861 18.4%

Over-10,000,000 3 152,441,709 54.4%4478 280,000,000 100.0%

- st4. Analysis of Ordinary voting shareholders as at 31 March 2017.

Individuals / InstitutionsNo of Shareholders As a % No of Shares As a%

Individuals 4,443

99.22% 152,868,574

54.60%Institutions 35

0.78% 127,131,426

45.40%

4,478

100% 280,000,000.000

100%

Resident / Non Resident No of Shareholders As a % No of Shares As a%

Resident 4,464

99.69% 278,812,678

99.90%Non Resident 14

0.31% 1,187,322

0.10%4,478

Share Held by Public No of Public Shareholders

124,357,1894,470

44.41%

Annual Report

72


st5. The twenty largest voting shareholders of the Company as at 31 March 2017.

1 TESS (PRIVATE) LIMITED 105,791,456 37.78%2 GAJANTHAN K. MR. 35,993,806

12.85%3 DE SILVA S.A. MRS. 10,656,447 3.81%4 TROPIC FROZEN FOODS LTD 7,940,733 2.84%5 TRANZ DOMINION,L.L.C. 4,500,045 1.61%6 WALDOCK MACKENZIE LTD/MR.S.A.GULAMHUSEIN 4,040,145

1.44%

7 EGLOBAL SERVICES (PVT) LTD 4,000,000

1.43%8 AYNKARAN S. MR. 2,706,448

0.97%

9 SAMSUDEEN M.I. MR. 2,300,000 0.82%10 THURSTAN INVESTMENT LTD 2,163,130 0.77%11 PEIRIS T.A. MR. 2,162,475 0.77%12 RATHNASIRI B.M.G. MR. 2,073,124 0.74%13 THASSIM F.S. RS. 2,066,914 0.74%14 IMTIAZ T.L.M. MR. 2,042,351 0.73%15 ANANDAWANSA W.L.T. MR. 2,000,000

0.71%

16 PIYASIRI P.G. MR. 1,813,923

0.65%17 JAYASINGHE D.R. MR. 1,806,708

0.65%

18 JAYAKUMAR S.P. MR. 1,646,373

0.59%19 DE SILVA R.P.K.N. MR. 1,400,000

0.50%20 DE SILVA G.R.U. MR. 1,336,101 0.48%

st31 March 2017

st31 March 2016

Earning Per Share (0.23)

(0.18)

Net Assets Per Share 0.72

0.81

Market Value Per Share 1.00

1.10

Highest During the year 2.00

1.70

Lowest during the year 0.90

0.80

Value at end of the year 1.00

1.10

Major Shareholders No. of Shares %

Annual Report

73


st6. Ordinary Non voting shareholders as at 31 March 2017.

Range No of Shareholders No of Shares % Holding

1-500 186 23,927

0.1%

501-1,000 65 57,812

0.1%

1,001-10,000 175 740,156

1.9%

10,001-50,000 113 2,995,310

7.5%

50,001-100,000 33 2,584,427

6.5%

100,001-500,000 33 8,282,115

20.7%

500,001-1,000,000 11 8,066,675

20.2%

1,000,001-10,000,000 6 17,249,578

43.1%

Over-10,000,000 -

-

0.0%

622 40,000,000

100.0%

st7. Analysis of Ordinary Non voting shareholders as at 31 March 2017.

Individuals / InstitutionsNo of Shareholders As a % No of Shares As a%

Individuals 616 99.04% 38,734,706 96.84%

Institutions 6 0.96% 1,265,294 3.16%

622

100% 40,000,000

100%

Resident / Non Resident No of Shareholders As a % No of Shares As a%

Resident 619

99.52% 39,948,500

99.87%

Non Resident 3

0.48% 51,500

0.13%

622 40,000,000

Shares held by Public

No of Public Shareholders

28,613,998

616

71.53%

Annual Report

74


st8. The twenty largest Non-voting shareholders of the Company as at 31 March 2017.

1 COMMERCIAL BANK OF CEYLON PLC/P.L.S. PETER 6,711,922

16.78%

2 DAYARATNE K.D.D.H.MR. 4,488,797

11.22%

3 DE SARAM W.A.S.P.MR. 2,753,167

6.88%

4 PETER P.L.S.MR. 1,133,230

2.83%

5 PEOPLE'S LEASING & FINANCE PLC/ MR. W.M.H.B.SENEVI 1,100,000

2.75%

6 GOONATILAKE P.C.L.DR. 1,062,462

2.66%

7 AMERASINGHE M.Y.MRS. 1,000,000

2.50%

8 PEOPLE'S LEASING & FINANCE PLC/K.L.UDAYANANDA 1,000,000 2.50%

9 WEERAMAN A.B.K.MR. 1,000,000 2.50%

10 DE SILVA S.A. MRS. 819,998 2.05%

11 KAMIL M.H.A.MR. 781,483 1.95%

12 TRANZ DOMINION,L.L.C. 650,000

1.63%

13 RANASINGE H.A.W.C.D.MR. 626,000

1.57%

14 WIJESINGHE K.G.A.N.MR. 579,200

1.45%

15 RUPADEWA G.MR. 557,322

1.39%

16 BANSEI SECURITIES CAPITAL (PVT) LTD/D.R.HERAT 534,085

1.34%

17 SUMANAWATHIE E.A.MISS 518,587

1.30%

18 PEOPLE'S LEASING & FINANCE PLC / MR.W.M.S.BANDA 500,000

1.25%

19 SUBASINGHE H.C.MR. 500,000

1.25%

20 BALASUNDARAM S.P.MR. 491,890

1.23%

st31 March 2017 st31 March 2016

Highest During the year 1.90

1.50

Lowest during the year 0.80

0.80

Value at end of the year 1.00

1.10

Major Shareholders No. of Shares %

Annual Report

75

Proxy Form

Tess Agro PLC

I/We…………………………………………………………………………………of

………………………………………………………………………………………being a

member / members of Tess Agro PLC, hereby appoint.01. ..………………………………………………………………………………………....

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

02. Mrs. Sithy Faika Fernando (Chairperson of the Company) of Colombo or failing her one

of the Director of the company as my / our / proxy to vote as indicated hereunder for me /

us and on my /our behalf at the Twenty Forth Annual General Meeting of the company to th

be held on 29 September 2017 and at every poll which may be taken in consequence of

the aforesaid meeting and at any adjournment thereof. For Against

i. To adopt the report of the directors and the statement ofst

Accounts for the year ended 31 March 2017 with

the report of the auditors thereon

ii. To reelect Mrs. S.F Fernando who is over 70 years of age as a Director, by passing the following resolution. “The age limit stipulated in section 210 of the Companies Act no 07 of 2007 shall not apply to Mrs. S.F. Fernando who has attained 75 years and that she be re-elected a Director of the company”

iii. To Re-elect Prof. A.H.O. Bamunuarachchi who is over 70 years

of age as a Director, by passing the following resolution. “The age limit stipulated in section 210 of the Companies Act no 07 of 2007 shall not apply to Prof. A.H.O. Bamunuarachchi who has attained 73 years and that he be re-elected a Director of the company”

iv. To re-appoint M/S Sarma & Co, Chartered Accountants as auditors and authorize the Directors to determine their remuneration

The proxy my vote as he thinks fit on any other resolution brought before the meeting

Dated this ……………………….day of …………………………………2017

Witness

………………………………………..

…………………….............................. ........................................ Signature of Shareholder Note: 01. A proxy need not be a member of the company

02. Instruction regarding completion appear on the reverse hereof

Annual Report

76

Instruction as to Completion:

· To be valid this form of proxy must be deposited at the Registered Office of the

Company No 87, New Nuge Road, Keleniya not later than forty eight (48) hours prior

or the time appointed for the holding of the meeting.

· In perfecting the form please ensure that all details are legible.

· Please indicate with an X in the space provided how your proxy is to vote on each

resolution. If no indication given or the indication in not clear, the proxy in his

discretion, will vote as he thinks fit. Please delete (') if you do not wish your proxy to

vote as he think fit on any other resolution brought before the meeting.

· In the case of Company/Corporation, the proxy must be under its common seal which

should be affixed and attested in the manner prescribed in the Article of Association.

· On the case of a proxy signed by an attorney, the power of attorney must be deposited at

the Registered Office for registration.

TESS AGRO PLCNo. 87, New Nuge Road, Kelaniya, Sri Lanka.

Phone : +94 11 2910859 (10 Auto Lines) Fax : +94 11 2910615E-mail : [email protected] Website : www.tess.lk

tess agro plc · she also a director of the tess (pvt) ltd, tropic fishery (pvt) ltd and tropic...

Documents