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Sri Lanka GDP grew by 6.4 % in 2012 compared to a growth of 8.2% in 2011. The Gross Margin per capita GDP reached USD 2,923 from USD 2,836 year ago. The tourist arrivals The overall Gross Profit margin declined to 38.3% which is a 1.8% reduction from last topped the 01 million mark and earnings exceeded USD 01 billion for the first time. year. Again the impact of VAT can be identified as a reason. The non- availability of The overall economic performance had a salutary effect on the topline of Odel. input credits on the inventory carried over on transition date and the limited ability to pass the effect through price were the reasons for the erosion of margin. The financial statements for the year 2012/13 were prepared for the first time in accordance with the provisions of International Financial Reporting Standards adopted Overheads locally by the Institute of Chartered Accountants of Sri Lanka as SLFRS and LKAS. The necessary adjustments and restatements were made to the accounting policies to Distribution expenses were in line with revenue growth as these consist mainly the accommodate the changes required by the new accounting standards which became payments linked to the topline. applicable for the periods commencing after 01 January 2012. These are disclosed in The inflation rate indicated by CCPI annual average change was 7.6% in 2012 up from the notes to the financial statements contained in this Annual Report. 6.7% in 2011. The costs of electricity and energy increased markedly during the year. These costs are major components of Odel operating overheads. The staff costs too Revenue increased during the year. The administration expense increase of 22% consists mostly The revenue reached Rs. 4.5 bn which is a growth of 16% from previous year. The of these items. rising per capita income and increasing tourist arrivals are key determinants of this. But Odel topline growth during the 4th quarter from January - March 13 was marginal The administration costs include impairment of property plant and equipment at 2%. The imposition of VAT on retail trade from 01 January 2013 and the resultant amounting to Rs. 10,913,123. impact was a major reason for the topline growth to decelerate in last quarter of the year. The same store sales growth of 13% for the full financial year is however very Net Finance cost encouraging given the challenge encountered. During 2012 the interest rates charged by lenders increased considerably. The 364 day Treasury Bill rate changed from 9.31% to 11.69% and Average Weighted Prime Revenue by quarters - 2012/2013 Rate rose to 14.4% from 10.77% year ago. These increases were in response to policy Rs. Mn decisions to limit credit growth and also due to limited liquidity during certain periods 1,500 of the year. This steep rise of the costs of finance impacted Odel especially during the

1,200 first nine months of the financial year. 45% increase in the finance cost is mostly due to the increase of market rates. Also the higher volume of business transacted required 900 greater amount of funding.

600 The rights issue of shares in December 2012 infused Rs. 2.5 bn of fresh capital to Odel. These funds were raised to expand the retail space and to settle part of the 300 borrowings. Initially the funds were used to settle short term borrowings attracting higher rates and a major portion is still invested in short term investments until 0 drawdown for expansion become necessary. Q1 Q2 Q3 Q4 The short term investments earned Odel interest income which together with the savings made on settled high rate short term borrowings boosted the earnings of 4th quarter of the financial year.

Revenue Movement of AWPR & Inflation during 2012/2013 Rs. Mn 5,000 % 15 4,000 13

3,000 11 9 2,000 7

1,000 5 Jul-12 Oct-12 Apr-12 Jan-13 Jun-12 Feb-13 Sep-12 Dec-12 Mar-13 Aug-12 Nov-12 0 May-12 2011 2012 2013 INFLATION AWPR

:::2'(//. The rates of interest since has moderated and the expressed policy appears to be to Total Equity and Return bring the rates further down through market mechanism. This augurs well for Odel in Total Equity increased to Rs. 5 bn from Rs. 1.7 bn mainly from the proceeds of Rs. the forthcoming year. 2.5 bn rights issue of shares in the ratio of 1:1 concluded in December 2012. Also the revaluation of land and buildings boosted the equity. Taxes Odel is liable for income tax at 28%. The effective tax rate is higher than nominal rate The return on average equity was 4.6%. The efficient utilization of funds and improved at 31%. The adjustments made for LKAS/SLFRS impact and impairment loss were the operating results will boost the returns in the forthcoming years. main contributors to the higher effective rate. Non Current Assets Comprehensive Income Odel revalued the land and buildings in the financial year 2012/13. The surplus The profit after tax for the year at Rs. 157 mn is a 19.23% reduction from the arising from this amounting to Rs. 750,152,303 increased the carrying value of the previous financial year. The increased costs of operation, margin reduction due to assets by Rs. 739,239,180. A loss of Rs. 10,913,123 was recorded as impairment VAT and the adjustments made to reflect the impact of LKAS/SLFRS were the main of building in relation to assets which previously did not have revaluation surpluses contributors to this. available to offset the same.

The revaluation surplus arising from the valuations made of land and Buildings during Cash Flow the year boosted the other comprehensive income. Together with these the total The cash flow from operation improved due to the profits earned. However the comprehensive income for the year was Rs. 914,292,276 a 381% increase from the investment in inventories increased by 11% to Rs. 1.2 bn. This increase reflects the preceding year. higher volume of business transacted as evident in top line growth. But the average inventory holding period reduced from 5.6 months to 5.2 months compared to Earnings per Share previous year. Due to reduced net profit and the higher number of shares in issue consequent to the rights issue made in December 2012 the EPS declined to Rs. 0.88 from Rs. 1.34 Rs. 88.4 mn was invested in property plant and equipment. These are to supplement in 2011/12. This reflects a price earnings ratio of 24 times as at 31 March 2013 the regular operation. No investments were made to enhance capacity during the year. compared to 15 times year before. The surplus funds from the rights issue of shares made at 1 share for every share held were invested in short term instruments earning attractive returns. These funds would be utilized for the intended purpose of capacity expansion in the future. Market price per share & Net asset per share The equity infusion of Rs. 2.5 bn during the year boosted the financing cash inflows. Rs. The higher rate borrowings which are mostly short term in nature were settled with 40 these funds. Consequently the borrowings reduced to Rs. 670 mn from Rs. 1.25 bn year ago. 30

20

10 31/03/2011 31/03/2012 31/03/2013 Market price per share Net asset per share

Dividends Odel declared dividend of Rs. 0.35 per share compaired to Rs. 0.50 in the preceding year. This translated to a pay out of 40% of the after tax profit in 2012/13. The solvency position was examined prior to such distribution by the Directors and confirmed by the Auditors as per the applicable statutory requirements.

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The Board of Directors has the overall responsibility to manage risks effectively to The ability to source the products efficiently and be able to ensure a range which ensure business continuity and growth. On behalf of the Board the Audit Committee appeals to the Odel customer is an important aspect of managing product risks. reviews the effectiveness of the processes in place. The internal audit function which Maintenance of highest quality standards is synonymous with Odel brand. Odel has a has been expanded recently assists in monitoring the adherence to the systems and diverse and broad base of suppliers and continuously monitors the changes in fashion to procedures and the improvement of the internal controls of the business. ensure the range carried mirrors the latest trends.

Though there are many risks to which a business is exposed some of the key risks The assets are safeguarded physically where relevant and also insured as appropriate impacting Odel PLC are discussed below. to mitigate risks of damage and unintended use. These measures too are reviewed by the internal audit and a comprehensive assessment is made annually of the coverage Changes in Macroeconomic conditions impact Odel. The increase in per capita income of risks through insurance. Also the ability of the underlying ICT systems to scale with and tourist arrivals are catalysts for growth of the target market segment of Odel. expanding business requirements is closely monitored. The continuing business growth The changes in the economic projections and performance are closely monitored to requires support of latest ICT to ensure efficiency and effectiveness of delivery. understand the impact to Odel. The product offer and communication of the value are tailored to recognize the change of customer needs and aspirations.

The ability to fund the business at competitive rates is crucial. The changes in fundamentals which drive interest rates in the market are closely monitored. Also Odel actively develops the relationship with a multitude of lenders and potential sources to broaden the funding options. The leverage to raise debt is strengthened by the infusion of capital in 2012/13 through rights issue of shares.

The quality of service provided by employees and their work ethics and integrity are also important aspect of risk management. The staff are recruited through a screening process and provided with regular training and development opportunities to hone their skills. The environment is created to encourage commitment and participation. The orientation towards defined systems and procedures to be followed in most areas of work and the checks and balances in place to ensure compliance are regularly reviewed and improved where necessary.

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The Directors present their report to the members together with the audited Property, Plant & Equipment Financial Statements of Odel PLC and Consolidated Financial Statements of the The total net capital expenditure on acquisition of Property, plant and equipment during group for the year ended 31 March 2013. the year including finance leased assets amounted to Rs. 88,412,878 (2011/12 - Rs. 297,620,845). The details of Property, plant and equipment are given in Note 9 Principal Activity to the Financial Statements. The principal activity of the Company during the year was fashion retailing offering its customers a total shopping experience. There have been no significant changes in the Statutory Payments activities of the company during the year under review. The Directors, to the best of their knowledge and belief, confirm that all payments in respect of statutory liabilities to Employees and to the Government have been made Going Concern within the stipulated period during the financial year 2012/13. The Board of Directors is satisfied that the Company has the adequate resources to continue its operations in the foreseeable future. Accordingly, the Financial Statements Corporate Donations are prepared based on the Going Concern assumption. The Company has donated Rs. 4,995,443 during the year to Odel Foundation which carries out the CSR activities of the group. Apart from the above the company has Group Revenue made other donations of Rs. 127,263. The revenue of the Group during the year was Rs. 4,533,676,999 (2012 - Rs. 3,912,145,932). An analysis of the revenue is given in Note 3 to the Company Records Financial Statements. The Directors have disclosed the nature and extent of their relevant interest in shares issued by the Company and interest in transactions or proposed transactions with the Group Employment Company during the year, to the Board of the Company and such information have The Group had employed 925 persons as at 31 March 2013. been duly entered in the Interest Register of the Company which is a part and parcel of this Annual Report. All the Company Records that are required to maintain under the Dividends provisions of the Act have also been properly maintained. The Company paid final dividend of Rs. 0.25 per share for the financial year ended 31 March 2012 and an Interim Dividend of Rs. 0.25 per share for the financial year Directorate ended 31 March 2013 to shareholders on 14 June 2012 and 26 November 2012 The Directors of the Company as at 31 March 2013. respectively. Mr. Ruchi Hubert Gunewardene - Chairman/Non Executive Director Statement Of Solvency Ms. Otara Del Gunewardene - Executive Director/CEO Based on the audited Financial Statements for the year ended 31 March 2013 the Mr. Paul Topping - Non Executive Independent Director Board is of the opinion that the company is in a position to pay debts in the normal Mr. Sanjay Sumanthri Kulatunga - Non Executive Independent Director course of business and the value of company’s net assets is in excess of its stated capital. Mr. Atulugamage Damian Eardley Ignatius Perera - Non Executive Independent Director Mr. Datuk Cheng Yoong Choong - Non Executive Non Independent Director Reserves Mr. Raymond Teo Kheng San - Non Executive Non Independent Director Total Group Reserves as at 31 March 2013, amounted to Rs. 2,298,193,518 (2012 - Mr. Koh Huat Lai - Non Executive Non Independent Director Rs. 1,476,205,196) The movements of the reserves during the year are shown in the Mr. Hia Ngee Yeow - Non Executive Non Independent Director Statement of Changes in Equity on page no 69. (Alternate to Director Mr. Datuk Cheng Yoong Choong) Stated Capital Messrs. Datuk Cheng Yoong Choong, Raymond Teo Kheng San, Koh Huat Lai were The Stated Capital of the Company as at 31 March 2012 was Rs.251,925,000 appointed Directors of the Company with effect from 27 August 2012. Mr. Hia Ngee comprising of 144,950,000 ordinary shares. The Company allotted 127,179,431 Yeow was appointed Alternate to Director Mr Datuk Cheng Yoong Choong with effect ordinary shares at Rs.20 per share through a Rights Issue on 17 December 2012. from 27 August 2012. Accordingly the Stated Capital as at 31 March 2013 was Rs.2,795,513,620. Annual declarations as per the format specified have been provided by the Directors The funds were raised through the above rights issue for the purpose of expanding regarding their independence and based on such declarations the Board has determined the retail space and to settle part of the borrowings of the company. The borrowings the above directors to be independent. were settled to the extent it is financially beneficial to do so and the balance funds are invested in short term instruments until the plans for expansion are approved.

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Directors' Shareholdings Name Meetings Meetings The Directors’ holding of number of ordinary shares of the Company as at 31 March held attended 2013 and as at the date of this report is as follows: Mr. Atulugamage Damian Eardley Ignatius Perera - Non Executive Independent Director 6 6 Name of the Director As at 31 As at 31 Mr. Datuk Cheng Yoong Choong* March 2013 March 2012 - Non Executive Non Independent Director 6 1 Mr. Ruchi Hubert Gunewardene 1,000,000 1,000,000 Mr. Raymond Teo Kheng San* Ms. Otara Del Gunewardene 80,833,100 80,833,100 - Non Executive Non Independent Director 6 2 Mr. Paul Topping Nil Nil Mr. Koh Huat Lai* Mr. Sanjay Sumanthri Kulatunga Nil Nil - Non Executive Non Independent Director 6 2 Mr. Atulugamage Damian Eardley Ignatius Perera Nil Nil Mr. Datuk Cheng Yoong Choong Nil Nil Mr. Hia Ngee Yeow* Mr. Raymond Teo Kheng San Nil Nil - Non Executive Non Independent Director Mr. Koh Huat Lai Nil Nil (Alternate to Director Mr. Datuk Cheng Yoong Choong) 6 2 Mr. Hia Ngee Yeow * appointed on 27 August 2012 (Alternate to Director Mr. Datuk Cheng Yoong Choong) Nil Nil Risk Management Directors’ Interest In Contracts As part of governance processes the Board on a continuous basis reviews and evaluates Directors’ interest in contracts of the Company is disclosed in Note 27 to the Financial the internal controls and risks of the company and takes any measures required to Statement, and has been declared at meetings of the Directors and entered in the mitigate the risks. For more details please refer “Risk Management” section in page Interest Register of the Company. The Directors have no direct or indirect interest in any 58 of this report. other contract or proposed contract with the Company. Contingent Liabilities and Commitments Corporate Governance To the best of knowledge and information available to the Board there are no The Board of Directors have acknowledged the responsibility to ensure good contingencies or commitments, except for the items that are listed on Note 26 to governance in conducting the business activities of the company. Further independent the financial statements. directors have been appointed to the Board and Board Committees have been set up as follows. Events After Balance Sheet Date Audit Committee No circumstances have arisen and no material events have occurred during the Mr. Sanjay Sumanthri Kulatunga (Chairman) period between the Balance Sheet date and Directors signing of Accounts that require Mr. Paul Topping disclosure or adjustment to the Financial Statements, except for the information Mr. Koh Huat Lai disclosed in Note 24 to the financial statements. Remuneration Committee Mr. Paul Topping (Chairman) Auditors Mr. A.D.E.I. Perera In accordance with the Companies Act No. 7 of 2007, resolution proposing the Mr. S.S. Kulatunga re-appointment of Messrs. Ernst and Young, Chartered Accountants, as Auditors to the Mr. Raymond Teo Kheng San Company will be submitted at the Annual General Meeting.

The attendance of the members at the board meetings is given below By Order of the Board of

Name Meetings Meetings Odel PLC held attended (sgd.) (sgd.) (sgd.) Mr. Ruchi Hubert Gunewardene 5XFKL*XQHZDUGHQH 2WDUD*XQHZDUGHQH 663&RUSRUDWH6HUYLFHV - Chairman/Non-Executive Director 6 6   3ULYDWH /LPLWHG Ms. Otara Del Gunewardene Chairman Director/CEO Secretaries - Executive Director/CEO 6 6 Mr. Paul Topping 29 May 2013 - Non Executive Independent Director 6 4 Mr. Sanjay Sumanthri Kulatunga - Non Executive Independent Director 6 5

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The responsibility of the Directors in relation to the financial statements is set out in The directors are also responsible for taking reasonable steps to safeguard the assets this statement. The responsibility of the auditors, in relation to the financial statements of the company and of the group and in this regard to give proper consideration to the prepared in accordance with the provisions of the Companies Act No 7 of 2007, is set establishment of appropriate internal control systems with a view to preventing and out in the Report of the Auditors. detecting fraud and other irregularities.

The financial statements comprise of: The directors are required to prepare the financial statements and to provide the auditors t
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on behalf of and in respect of the employees of the company and its subsidiaries, and Companies Act and the Listing Rules of the Colombo Stock Exchange. all other known statutory dues as were due and payable by the company and its subsidiaries as at the balance sheet date have been paid, or where relevant The directors are also required to ensure that the company has adequate resources to provided for. continue in operation to justify applying the going concern basis in preparing these financial statements. (sgd.) Further, the directors have a responsibility to ensure that the company maintains By Order of the Board sufficient accounting records to disclose, with reasonable accuracy the financial position SSP Corporate Services (Pvt) Ltd of the company and of the group. 29 May 2013

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The Remuneration Committee comprises the following Non Executive Directors at the year-end three of whom are independent.

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Remuneration Committee Meetings The Committee meets at least once a year and the minutes of the meetings are circulated to the Board. All members of the Committee attended the Remuneration Committee Meeting held during the year.

The Chief Executive Officer attends these meetings by invitation.

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The aggregate remuneration paid to Directors is disclosed in Note 7 to the financial statement.

(sgd.) Paul Topping Chairman - Remuneration Committee

29 May 2013

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Composition of the audit committee Summary of activities The Audit Committee, appointed by and responsible to the Board of Directors, comprises three Non-Executive Directors, two of whom are independent. The Committee is made Financial reporting up of members who bring their varied expertise and knowledge to effectively carry out The Committee reviewed the Financial Reporting System to ensure the accuracy and their duties. Members of the Committee are; timeliness of the Financial Statements published. The Committee also reviewed the interim and year-end Financial Statements prior to publication, in order to ensure that Mr. Sanjay Sumanthri Kulatunga -Chairman the statutory requirements have been complied with and the Company’s Accounting Mr. Paul Topping Policies have been consistently applied. Mr. Koh Huat Lai Internal audit Mr. R.H. Gunewardene resigned from the committee and Mr.Koh Huat Lai was appointed The Committee monitored the effectiveness of the Internal Audit Function and the to the committee with effect from 5 November 2012. implementation of the recommendations made by Internal Audit.

The functions of the Audit Committee are governed by an Audit Committee Charter, External audit which is reviewed annually. The Committee met the external auditors prior to approving the Annual Financial Statements to satisfy that they were provided adequate access to information needed Objectives and role of the audit committee for their audit. The committee also reviewed the status of their independence. The main objective of the Audit Committee is to assist the Board of Directors to perform its duties effectively and efficiently. Accordingly, the objectives of the Audit Committee Conclusion can be described in detail as follows: Based on the review of reports submitted by the External and Internal Auditors, the information obtained by the Committee and having examined the adequacy and t

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effectiveness of the internal controls which have been designed to provide a reasonable timely financial information to the Board of Directors, regulators and shareholders but not absolute assurance to Directors that the assets of the company are safeguarded, and these are prepared in accordance with Sri Lanka Accounting Standards (SLFRS/ the Audit committee is satisfied that the financial position of the company is regularly LKAS), Companies Act No. 07 of 2007 and other relevant laws and regulations. monitored and that steps are being taken to continuously improve the control t

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The attendance of the members at these meetings is given below.

Name Meeting Attended Mr. Sanjay Sumanthri Kulatunga -Chairman 3 Mr. Paul Topping 3 Mr. Koh Huat Lai 1 Mr.R.H. Gunewardene 2

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Results Date Authorized Interim Report for Six months ended 30 September 2012 5 November 2012 Interim Report for Nine months ended 31 December 2012 01 February 2013 Annual Report 2012/2013 29 May 2013

Dividends Date Paid Final Dividend 2011/2012 14 June 2012 Interim Dividend 2012/2013 26 November 2012 Final Dividend 2012/2013 (Declared on 29 May 2013)

Shares Date of Allotment Rights Issue of 1 for 1 share held 17 December 2012

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INDEPENDENT AUDITOR’S REPORT Opinion TO THE SHAREHOLDERS OF ODEL PLC In our opinion, so far as appears from our examination, the Company maintained proper accounting records for the year ended 31 March 2013 and the financial statements Report on the financial statements give a true and fair view of the Company’s financial position as at 31 March 2013 and We have audited the accompanying financial statements of Odel PLC (“Company”), the its financial performance and cash flows for the year then ended in accordance with Sri consolidated financial statements of the Company and its subsidiaries which comprise Lanka Accounting Standards. the statements of financial position as at 31 March 2013, and the income statements, statements of comprehensive income, statements of changes in equity and statements In our opinion, the consolidated financial statements give a true and fair view of the of cash flows for the year then ended, and a summary of significant accounting policies financial position as at 31 March 2013 and its financial performance and cash flows and other explanatory notes. for the year then ended, in accordance with Sri Lanka Accounting Standards, of the Company and its subsidiaries dealt with thereby, so far as concerns the shareholders of Management’s responsibility for the financial statements the Company. Management is responsible for the preparation and fair presentation of these financial statements in accordance with Sri Lanka Accounting Standards. This responsibility Report on other legal and regulatory requirements includes: designing, implementing and maintaining internal control relevant to the These financial statements also comply with the requirements of Sections 151(2) and preparation and fair presentation of financial statements that are free from material 153(2) to 153(7) of the Companies Act No. 07 of 2007. misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Scope of audit and basis of opinion Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Sri Lanka Auditing Standards. Those 29 May 2013 standards require that we plan and perform the audit to obtain reasonable assurance Colombo. whether the financial statements are free from material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. We therefore believe that our audit provides a reasonable basis for our opinion.

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Company Group For the year ended 31 March 2013 2012 2013 2012 Note LKR LKR LKR LKR

Revenue 3 4,532,970,765 3,910,023,528 4,533,676,999 3,912,145,932 Cost of sales (2,799,776,756) (2,338,913,867) (2,798,202,812) (2,341,807,702) Gross profit 1,733,194,009 1,571,109,661 1,735,474,187 1,570,338,230 Other operating income 4 9,010,423 3,768,836 12,327,213 6,253,281 Distribution expenses (231,367,278) (229,629,247) (231,510,016) (229,793,619) Administrative expenses (1,263,329,603) (1,040,118,913) (1,214,372,188) (984,745,065) Operating profit 247,507,551 305,130,337 301,919,196 362,052,827 Finance costs 5 (160,882,255) (110,577,428) (160,882,255) (110,612,841) Finance income 6 90,634,478 2,649,564 90,634,478 2,649,564 Profit before tax 7 177,259,774 197,202,473 231,671,419 254,089,550 Income tax expense 8 (64,903,823) (58,819,727) (74,349,206) (59,292,280) Profit for the year 112,355,951 138,382,746 157,322,213 194,797,270

Attributable to: Owners of the parent 157,322,213 194,797,270 Non controlling interest - - 157,322,213 194,797,270

Earning per share Basic, profit for the year attributable to ordinary equity holders of the parent 23 0.88 1.34

The accounting policies and notes on page 71 through 109 form an integral part of the financial statements.

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Company Group For the year ended 31 March 2013 2012 2013 2012 Note LKR LKR LKR LKR

Profit for the year 112,355,951 138,382,746 157,322,213 194,797,270 Other comprehensive income Actuarial gains/(losses) on defined benefit plan 477,158 (3,921,677) 2,126,559 (4,688,488) 477,158 (3,921,677) 2,126,559 (4,688,488) Revaluation of land and buildings 9 507,514,023 - 750,152,302 - Income tax effect 4,691,202 - 4,691,202 - 512,205,225 - 754,843,504 - Other comprehensive income for the year, net of tax 512,682,383 (3,921,677) 756,970,063 (4,688,488) Total comprehensive income for the year, net of tax 625,038,334 134,461,069 914,292,276 190,108,782

Attributable to: Equity holders of the parent 625,038,334 134,461,069 914,292,276 190,108,782 Non-controlling interests - - - -

The accounting policies and notes on page 71 through 109 form an integral part of the financial statements.

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Company Group For the year ended 31 March 2013 2012 01 April 2011 2013 2012 01 April 2011 Note LKR LKR LKR LKR LKR LKR

ASSETS Non-Current Assets Property, plant and equipment 9 2,058,589,402 1,593,825,762 1,385,726,086 2,846,025,862 2,124,113,208 1,904,875,544 Intangible assets 10 - - 2,196,055 11,057,183 13,359,024 12,147,445 Investment in subsidiaries 11 378,101,040 379,101,030 389,101,030 - - - Other financial assets 12 30,754,314 25,274,617 12,428,428 30,754,314 25,274,617 12,428,428 Goodwill - - - - - 68,485 2,467,444,756 1,998,201,409 1,789,451,599 2,887,837,359 2,162,746,849 1,929,519,902

Current Assets Inventories 13 1,204,746,779 1,054,722,776 993,246,649 1,218,865,762 1,093,969,251 1,037,004,930 Trade and other receivables 14 179,771,409 191,165,273 134,936,736 189,821,373 196,735,831 138,730,297 Amounts due from related parties 15 62,250,041 46,156,663 141,297,971 - - - Income tax refund due - 13,358,199 - - 13,969,437 - Other financial assets 12 2,008,684,191 5,795,429 2,884,881 2,008,684,191 5,795,429 2,884,881 Cash and bank balances 22 108,188,942 23,092,334 19,132,477 109,418,232 25,148,137 25,286,470 3,563,641,362 1,334,290,674 1,291,498,714 3,526,789,558 1,335,618,085 1,203,906,578 Total Assets 6,031,086,118 3,332,492,083 3,080,950,313 6,414,626,917 3,498,364,934 3,133,426,480

EQUITY AND LIABILITIES Equity Stated capital 16 2,795,513,620 251,925,000 251,925,000 2,795,513,620 251,925,000 251,925,000 Revaluation surplus 953,398,616 442,768,163 443,918,263 1,318,247,516 570,415,036 573,566,440 Retained earnings 770,050,714 749,407,393 685,823,963 979,946,002 905,790,160 784,557,713 Total Equity 4,518,962,950 1,444,100,556 1,381,667,226 5,093,707,138 1,728,130,196 1,610,049,153

Non-Current Liabilities Interest bearing borrowings 17 427,452,823 301,112,670 322,411,942 427,452,823 301,112,670 322,411,942 Deferred tax liabilities 8.2 34,587,979 25,821,192 33,464,581 33,835,627 25,755,004 33,516,914 Retirement benefit liability 18 33,176,448 30,078,721 22,342,036 37,008,874 33,685,050 24,519,265 495,217,250 357,012,583 378,218,559 498,297,324 360,552,724 380,448,121

Current Liabilities Trade and other payables 19 515,306,223 403,604,238 435,604,737 524,064,732 426,531,060 444,498,762 Amounts due to related parties 20 206,342,399 144,623,752 190,075,999 - - - Income tax payable 6,253,343 - 67,176,092 9,553,770 - 70,222,744 Interest bearing borrowings 17 242,488,577 950,853,266 607,266,413 242,488,577 950,853,266 607,266,413 Deferred liability 21 46,515,376 32,297,688 20,941,287 46,515,376 32,297,688 20,941,287 1,016,905,918 1,531,378,944 1,321,064,528 822,622,455 1,409,682,014 1,142,929,206 Total Equity and Liabilities 6,031,086,118 3,332,492,083 3,080,950,313 6,414,626,917 3,498,364,934 3,133,426,480

These Financial Statements are in compliance with the requirements of the Companies Act No. 07 of 2007.

(sgd.) Ruwan Wijeratne Chief Finance 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

(sgd.) (sgd.) R. H. Gunewardene O. D. Gunewardene Chairman Director/CEO The accounting policies and notes on page 71 through 109 form an integral part of the financial statements.

29 May 2013 Colombo

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For the year ended 31 March 2013 Company Revaluation Stated Retained Total Reserve Capital Earnings Equity LKR LKR LKR LKR

As at 1 April 2011 443,918,263 251,925,000 685,823,963 1,381,667,226 Net profit for the year - - 138,382,746 138,382,746 Other comprehensive income - - (3,921,677) (3,921,677) 443,918,263 251,925,000 820,285,032 1,516,128,295 Dividends - - (72,475,000) (72,475,000) Deferred tax impact on revaluation reserve - building 447,261 - - 447,261 Revaluation surplus transferred to retained earnings (1,597,361) - 1,597,361 - At 31 March 2012 442,768,163 251,925,000 749,407,393 1,444,100,556 Adjustment in respect of previous year - - (2,926,143) (2,926,143) As at 1 April 2012 442,768,163 251,925,000 746,481,250 1,441,174,413 Net profit for the year - - 112,355,951 112,355,951 Other comprehensive income 512,205,225 - 477,158 512,682,383 954,973,388 251,925,000 859,314,359 2,066,212,747 Dividends paid - - (72,475,000) (72,475,000) Revaluation surplus transferred to retained earnings (1,574,772) - 1,574,772 - Rights issue - 2,543,588,620 - 2,543,588,620 Cost of right issue - - (18,363,417) (18,363,417) At 31 March 2013 953,398,616 2,795,513,620 770,050,714 4,518,962,950

Group Attributable to equity holders of the parent Revaluation Stated Retained Total Reserve Capital Earnings Equity LKR LKR LKR LKR

As at 1 April 2011 573,566,440 251,925,000 784,557,713 1,610,049,153 Net profit for the year - - 194,797,270 194,797,270 Other comprehensive income - - (4,688,488) (4,688,488) 573,566,440 251,925,000 974,666,495 1,800,157,935 Dividends - - (72,475,000) (72,475,000) Deferred tax impact on revaluation reserve - building 447,261 - - 447,261 Revaluation surplus transferred to retained earnings (3,598,665) - 3,598,665 - At 31 March 2012 570,415,036 251,925,000 905,790,160 1,728,130,196 Adjustment in respect of previous year - - (2,926,143) (2,926,143) As at 1 April 2012 570,415,036 251,925,000 902,864,017 1,722,277,910 Consolidation adjustments - - 1,460,606 1,460,606 570,415,036 251,925,000 904,324,623 1,726,664,659 Net profit for the year - - 157,322,213 157,322,213 Other comprehensive income 754,843,504 - 2,126,559 756,970,063 1,325,258,540 251,925,000 1,063,773,395 2,640,956,935 Dividends - - (72,475,000) (72,475,000) Revaluation surplus transferred to retained earnings (7,011,024) - 7,011,024 - Rights issue - 2,543,588,620 - 2,543,588,620 Cost of right issue - - (18,363,417) (18,363,417) At 31 March 2013 1,318,247,516 2,795,513,620 979,946,002 5,093,707,138

The accounting policies and notes on page 71 through 109 form an integral part of the financial statements.

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Company Group For the year ended 31 March 2013 2012 2013 2012 Note LKR LKR LKR LKR

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES Net profit before Income tax expense 177,259,774 197,202,473 231,671,419 254,089,550 Adjustments for Depreciation 9 84,362,680 67,179,838 101,406,760 78,383,185 Intangible assets amortization - 798,404 7,775,289 6,361,078 Finance costs 5 160,510,150 110,077,189 160,510,150 110,112,602 Finance income 6 (90,634,478) (2,649,564) (90,634,478) (2,649,564) Impairment of property plant and equipment 10,913,123 - 10,913,123 -
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(6,294,643) (29,923) (6,247,192) (29,923) Amortization of goodwill - - - 68,485 Impairment of investment 1,000,000 - - - Impairment of receivable 2,937,444 - - - Loss/(profit) on disposal of subsidiary - 458,500 - - Lease interest 5 372,105 500,238 372,105 500,238 Dividend income - (1,684,353) - - Provision for define benefit plans 7,724,659 5,530,827 9,680,208 6,221,166 Operating profit before working capital changes 348,150,814 377,383,629 425,447,384 453,056,817 Decrease/(Increase) in inventories (150,024,003) (61,476,127) (124,896,511) (56,964,320) Decrease/(Increase) in trade and other receivables 11,393,864 (60,628,877) 6,771,455 (62,405,872) Decrease/(Increase) in dues from related parties (19,030,822) 113,833,235 - - Decrease/(Increase) in other current financial assets (2,001,668,459) - (2,001,668,459) - (Decrease)/Increase in dues to related parties 61,718,647 (45,452,246) - - (Decrease)/Increase in trade and other payables 111,701,985 (32,000,498) 97,533,672 (17,967,702) (Decrease)/Increase in deferred liability 14,217,688 - 14,217,688 - Cash generated from operations (1,623,540,286) 291,659,116 (1,582,594,771) 315,718,923 Finance costs paid 5 (160,510,150) (110,077,189) (160,510,150) (110,112,602) Defined benefit plan costs paid (4,149,774) (1,715,819) (4,229,825) (1,743,869) Income tax paid 8 (31,834,292) (146,550,146) (36,450,565) (150,799,112) Net cash flows from/(used in) operating activities (1,820,034,502) 33,315,962 (1,783,785,311) 53,063,340 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
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 (56,714,938) (293,971,439) (88,412,878) (297,620,845) Investment in equity shares of subsidiaries (10) - - - Acquisition of intangible assets 10 - (3,152,332) (5,473,448) (7,572,656) Dividend received - 1,684,353 - - Finance income 83,934,478 2,649,564 83,934,478 2,649,564 Proceed from disposal of investment - 9,541,500 - - Proceed from disposal of intangible assets - 4,549,983 - - Proceed from disposal of fixed assets 7,558,018 29,923 7,653,692 29,922 Net cash flows from/(used in) investing activities 34,777,548 (278,668,448) (2,298,156) (302,514,015) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Repayment of interest bearing borrowings 17 (946,924,330) (1,845,690,372) (946,924,330) (1,845,690,372) Net proceeds from right issue 2,525,225,203 - 2,525,225,203 - Lease rental paid (1,219,603) (1,330,476) (1,219,603) (1,330,476) Proceeds from interest bearing borrowings 17 729,023,836 2,076,185,193 729,023,836 2,076,185,193 Dividends paid (72,475,000) (72,475,000) (72,475,000) (72,475,000) Net cash flows from financing activities 2,233,630,106 156,689,345 2,233,630,106 156,689,345 Net increase/(decrease) in cash and cash equivalents 448,373,152 (88,663,141) 447,546,639 (92,761,330) Cash and cash equivalents at the beginning of the period (430,461,573) (341,798,432) (428,405,770) (335,644,439) Cash and cash equivalents at the end of the period 22 17,911,579 (430,461,573) 19,140,869 (428,405,770)

The accounting policies and notes on page 71 through 109 form an integral part of the financial statements.

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1. CORPORATE INFORMATION Subsidiaries 1.1 General Odel Apparels (Pvt) Ltd Odel PLC is a limited liability company incorporated and domiciled in Sri During the year, the principal activities of the Company were to manufacture Lanka whose shares are publicly traded in the Colombo Stock Exchange. The and supply of the Garments to the group. registered office of Odel PLC is located at No 475/32, Kotte Road, Rajagiriya and the details of subsidiary companies are as follows. Odel Properties (Pvt) Ltd During the year, the principal activities of the Company were to carry out real Subsidiaries estate activities in relation to retail business Odel Apparels (Pvt) Ltd Odel Apparels (Pvt) Ltd is a limited liability company incorporated and Odel Lanka (Pvt) Ltd domiciled in Sri Lanka. The registered office of the Company is located at Principal activities of the Company are to operate a shopping complex/ retail No.475/32, Kotte Road, Rajagiriya and the principal place of business is mall and the operations have not yet commenced. situated at No. 71/3, Kamatawatte Road, Rajagiriya. Odel Information Technology Services (Pvt) Ltd Odel Properties (Pvt) Ltd., During the year, the principal activities of the Company were to provide Odel Properties (Pvt) Limited is a limited liability company incorporated and information technology infrastructure and maintenance services for the group domiciled in Sri Lanka. The registered office and principle place of business of companies. the Company is located at No. 475/32, Kotte Road Rajagiriya. BSL International (Pvt) Ltd Odel Lanka (Pvt) Ltd. During the year, the principal activities of the Company were to import and Odel Lanka (Pvt) Limited is a limited liability company incorporated and export of fashion accessories. domiciled in Sri Lanka. The registered office of the Company is located at No.475/32, Kotte Road, Rajagiriya and the principal place of business is Greenfield Trading (Pvt) Ltd situated at 271, Kaduwela Road, Thalangama, Battaramulla. Principal activity of the Company is to trade retail fashion items and the operations has not yet commenced. Odel Information Technology Services (Pvt) Ltd Odel Information Technology Services (Pvt) Ltd is a limited liability company 1.3 Date of Authorization for issue incorporated and domiciled in Sri Lanka. The registered office and principle The consolidated financial statements of Odel PLC and its Subsidiaries place of business of the Company is located at No.475/32, Kotte Road, (Collectively, the Group) for the year ended 31 March 2013 were authorized Rajagiriya. for issue in accordance with a resolution of the directors on 29 May 2013.

BSL International (Pvt) Ltd 2. STATEMENT OF COMPLIANCE BSL International (Pvt) Ltd is a limited liability company incorporated and The consolidated financial statements of the Group have been prepared in domiciled in Sri Lanka. The registered office of the Company is located at accordance with Sri Lanka Accounting Standards. No.38 Dickmens Road, Colombo 05, and the principal place of business is situated at Export Processing Zone, Katunayake. 2.1 Basis of preparation and adoption of Sri Lanka Accounting Standards effective for the financial period beginning on or after 01 January 2012 Greenfield Trading (Pvt) Ltd For all periods up to and including the year ended 31 March 2012, the Group Greenfield Trading (Pvt) Ltd is a limited liability company incorporated prepared its financial statements in accordance with SLASs effective up to and domiciled in Sri Lanka. The registered office and the principle place of 31 March 2012. business is situated at 475/32, Kotte Road, Rajagiriya. These financial statements for the year ended 31 March 2013 are the first 1.2 Principal Activities and Nature of Operations the Group has prepared in accordance with Sri Lanka Accounting Standards During the year, the principal activities of the group were as follows; ( SLFRS/LKAS) effective for the periods beginning on or after 01 January 2012. ( Refer Note 2.5 for an explanation of the transition). Parent Company During the year, the principal activities of the Company were to carry out Subject to certain transition elections disclosed in Note 2.5, the Group has fashion retail activities. consistently applied the accounting policies used in preparation of its opening SLFRS statement of financial position as at 01 April 2011 through all periods presented, as if such policies had always been in effect.

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Note 2.5 discloses the impact of the transition to SLFRS on the Group’s Pending a full study of these standards, the financial impact is not yet known and Company’s reported financial position including the nature and effect and reasonably estimable. of significant changes in accounting policies from those used in the Group’s consolidated financial statements for the year ended 31 March 2012 2.2 Basis of consolidation prepared under SLASs. The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 March 2013. The consolidated financial statements have been prepared on a historical cost basis, except for land and buildings and Financial Instruments that have been Subsidiaries are fully consolidated from the date of acquisition, being the date measured at fair value. The preparation and presentation of these financial on which the Group obtains control, and continue to be consolidated until the statements are in compliance with the Companies Act No.07 of 2007. date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using Consolidated financial statements are presented in Sri Lankan Rupees (LKR) consistent accounting policies. except when otherwise indicated. All intra-group balances, transactions, unrealized gains and losses resulting 2.1.1 Standards issued but not yet effective from intra-group transactions and dividends are eliminated in full. The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group financial statements are disclosed below. A change in the ownership interest of a subsidiary, without a loss of control, The Group intends to adopt these standards, if applicable, when they become is accounted for as an equity transaction. effective. If the Group loses control over a subsidiary, it: SLFRS 9 - Financial Instruments: Classification and Measurement SLFRS 9 as issued reflects the first phase of work on replacement of LKAS t
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:::2'(//. taxes pending the issue of tax guidelines on the treatment of the adoption Useful life for property, plant and equipment of SLFRS in the financial statements and the taxable profit for the purpose of The property, plant and equipment in the Group are estimated to carry imposition of taxes. Uncertainties exist, with respect to the interpretation of economic useful lives lasting over year. Remaining useful lives are assessed the applicability of tax laws, at the time of the preparation of these financial annually and changed when necessary to reflect their remaining lives in statements. light of prospective economic utilization and physical condition of the assets concerned. Principal depreciation rates used are discussed under Note 2.4.7. The Group recognized assets and liabilities for current deferred and other taxes based on estimates of whether additional taxes will be due. Where the 2.4 Summary of significant accounting policies final tax outcome of these matters is different from the amounts that were The following are the significant accounting policies applied by the Group in initially recorded, such differences will impact the income, deferred and tax preparing its consolidated financial statements: amounts in the period in which the determination is made. 2.4.1 Business combinations and goodwill Estimates and assumptions Business combinations are accounted for using the acquisition method. The The key assumptions concerning the future and other key sources of cost of an acquisition is measured as the aggregate of the consideration estimation uncertainty at the reporting date, that have a significant risk of transferred, measured at the acquisition date fair value and the amount of causing a material adjustment to the carrying amounts of assets and liabilities any non-controlling interest in the acquiree. For each business combination, within the next financial year, are described below. The Group based its the Group elects whether to measure the non-controlling interest in the assumptions and estimates, on parameters available when the consolidated acquiree at fair value or at the proportionate share of the acquiree at the financial statements were prepared. Existing circumstances and assumptions fair value or at the proportionate share of the acquiree’s identifiable net about future developments, however, may change due to market changes assets. Acquisition-related costs are expensed as incurred and included in or circumstances arising beyond the control of the Group such changes are administrative expenses. reflected in the assumptions when they occur. When the Group acquires a business, it assesses the financial assets and Revaluation of property, plant and equipment liabilities assumed for appropriate classification and designation in accordance The Group measures land and buildings at revalued amounts with changes with the contractual terms, economic circumstances and pertinent conditions in fair value being recognized in other comprehensive income. The Group as at the acquisition date. This includes the separation of embedded engaged an independent valuation specialist to assess fair value of such derivatives in host contracts by the acquiree. assets as at 31 March 2013. Land and buildings were valued by reference to market-based evidence, using comparable prices adjusted for specific market If the business combination is achieved in stages, the previously held equity factors such as nature, location and condition of the property. interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss. Any contingent consideration to be Defined benefit plans – Gratuity transferred by the acquirer will be recognised at fair value at the acquisition The cost of gratuity is determined using actuarial valuations. An actuarial date. Contingent consideration which is deemed to be an asset or liability valuation involves making various assumptions which may differ from actual that is a financial instrument and within the scope of LKAS 39 Financial developments in the future. These include the determination of the discount Instruments: Recognition and Measurement, is measured at fair value rate, future salary increases, staff withdrawals, and mortality rates. Due to with changes in fair value either in profit or loss or as a change to other the complexity of the valuation; the underlying assumptions and its long-term comprehensive income (OCI). If the contingent consideration is not within the nature, the defined benefit obligation is highly sensitive to changes in these scope of LKAS 39, it is measured in accordance with the appropriate SLFRS. assumptions. All assumptions are reviewed at each reporting date. Contingent consideration that is classified as equity is not remeasured and Fair value of financial instruments subsequent settlement is measured at fair value with changes in fair value When the fair value of financial assets and financial liabilities recorded in the either in a profit or loss or as a change to the other comprehensive income statement of financial position cannot be derived from active markets, their (OCI). If the contingent consideration is not within the scope of LKAS 39,it is fair value is determined using valuation techniques including the discounted measured in accordance with the appropriate SLFRS. Contingent consideration cash flow model. The inputs to these models are taken from observable that is classified as equity is not remeasured and subsequent settlement is markets where possible, but where this is not feasible, a degree of judgment accounted for within equity. is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions Goodwill is initially measured at cost, being the excess of the aggregate of about these factors could affect the reported fair value of financial the consideration transferred and the amount recognised for non-controlling instruments. interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognised in profit or loss.

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After initial recognition, goodwill is measured at cost less any accumulated Sale of goods impairment losses. For the purpose of impairment testing, goodwill acquired Revenue from the sale of goods is recognised when the significant risks and in a business combination is, from the acquisition date, allocated to each rewards of ownership of the goods have passed to the buyer, usually on of the Group’s cash- generating units that are expected to benefit from the delivery of the goods. combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Loyalty points scheme The Group operates a loyalty points programme, which allows customers to Where goodwill has been allocated to a cash-generating unit and part of the accumulate points when they purchase products in the Group’s retail stores. operation within that unit is disposed of, the goodwill associated with the The points can then be redeemed for free products. Consideration received operation disposed of is included in the carrying amount of the operation is allocated between the products sold and the points issued, with the when determining the gain or loss on disposal of the operation. Goodwill consideration allocated to the points equal to their fair value. disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit Fair value of the points is determined by applying a statistical analysis. The retained. fair value of the points issued is deferred and recognised as revenue when the points are redeemed or at the expiry of points awarded. 2.4.2 Foreign currency translation The Group’s consolidated financial statements are presented in Sri Lankan Interest income Rupees, which is also the parent company’s and its subsidiary companies For all financial instruments measured at amortised cost and interest bearing functional currency. financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate (EIR), which is the rate that Transactions and balances exactly discounts the estimated future cash payments or receipts through Transactions in foreign currencies are initially recorded by the Group entities the expected life of the financial instrument or a shorter period, where at their respective functional currency spot rate at the date the transaction appropriate, to the net carrying amount of the financial asset or liability. first qualifies for recognition. Interest income is included in finance income in the income statement.

Monetary assets and liabilities denominated in foreign currencies are Dividends retranslated at the functional currency spot rate of exchange ruling at the Revenue is recognised when the Group’s right to receive the payment is reporting date. established.

Differences arising on settlement or translation of monetary items are Rental income recognised in profit or loss. Rental income arising from long term operating leases on shop space provided to tenants is accounted for on a straight-line basis over the lease Non-monetary items that are measured in terms of historical cost in a foreign terms. currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency 2.4.4 Expenditure recognition are translated using the exchange rates at the date when the fair value is a) Expenses are recognized in the income statement on the basis of a determined. The gain or loss arising on translation of non-monetary measured direct association between the cost incurred and the earning of specific at fair value is treated in line with the recognition of gain or loss on change items of income. All expenditure incurred in the running of the business in fair value in the item (i.e., the translation differences on items whose fair BOE
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value gain or loss is recognised in other comprehensive income (OCI) or profit efficiency has been charged to income in arriving at the profit for the or loss are also recognised in OCI or profit or loss, respectively). year.

2.4.3 Revenue recognition b) For the purpose of presentation of the Consolidated Income Statement Revenue is recognised to the extent that it is probable that the economic the Directors are of the opinion that the function of expenses method benefits will flow to the Group and the revenue can be reliably measured, presents fairly the elements of the Company’s performance, and hence regardless of when the payment is being made. Revenue is measured at the such presentation method is adopted. fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The 2.4.5 Taxes Group assesses its revenue arrangements against specific criteria in order to Current income tax determine if it is acting as principal or agent. The Group has concluded that Current income tax assets and liabilities for the current period are measured it is acting as a principal in all of its revenue arrangements. The following at the amount expected to be recovered from or paid to the taxation specific recognition criteria must also be met before revenue is recognised: authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

:::2'(//. Current income tax relating to items recognised directly in equity is Deferred tax relating to items recognised outside profit or loss is recognised recognised in equity and not in the income statement. Management outside profit or loss. Deferred tax items are recognised in correlation to the periodically evaluates positions taken in the tax returns with respect to underlying transaction either in other comprehensive income or directly in situations in which applicable tax regulations are subject to interpretation and equity. establishes provisions where appropriate. Deferred tax assets and deferred tax liabilities are offset if a legally Deferred tax enforceable right exists to set off current tax assets against current income Deferred tax is provided using the liability method on temporary differences tax liabilities and the deferred taxes relate to the same taxable entity and the at the reporting date between the tax bases of assets and liabilities and their same taxation authority. carrying amounts for financial reporting purposes. 2.4.6 Sales tax Deferred tax liabilities are recognised for all taxable temporary differences, Revenues, expenses and assets are recognised net of the amount of sales except: tax, except: t
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timing of the reversal of the temporary differences can be controlled included the net amount of sales tax recoverable from, or payable to, and it is probable that the temporary differences will not reverse in the the taxation authority is included as part of receivables or payables in foreseeable future. the statement of financial position.

Deferred tax assets are recognised for all deductible temporary differences, The net amount of sales tax recoverable from, or payable to, the taxation carry forward of unused tax credits and unused tax losses, to the extent that authority is included as part of receivables or payables in the statement of it is probable that taxable profit will be available against which the deductible financial position. temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except: 2.4.7 Property, plant and equipment Property, plant and equipment is stated at cost, net of accumulated t
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depreciation and/or accumulated impairment losses, if any. Such cost difference arises from the initial recognition of an asset or liability in includes the cost of replacing component parts of the property, plant and a transaction that is not a business combination and, at the time of equipment and borrowing costs for long-term construction projects if the the transaction, affects neither the accounting profit nor taxable profit recognition criteria are met. or loss. When significant parts of property, plant and equipment are required to t
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be replaced at intervals, the Group derecognises the replaced part, and investments in subsidiaries, associates and interests in joint ventures, recognises the new part with its own associated useful life and depreciation. deferred tax assets are recognised only to the extent that it is probable Likewise, when a major inspection is performed, its cost is recognised in that the temporary differences will reverse in the foreseeable future and the carrying amount of the plant and equipment as a replacement if the taxable profit will be available against which the temporary differences recognition criteria are satisfied. All other repair and maintenance costs are can be utilised. recognised in the income statement as incurred.

The carrying amount of deferred tax assets is reviewed at each reporting date The present value of the expected cost for the decommissioning of the asset and reduced to the extent that it is no longer probable that sufficient taxable after its use is included in the cost of the respective asset if the recognition profit will be available to allow all or part of the deferred tax asset to be criteria for a provision are met. utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future Land and buildings are measured at fair value less accumulated depreciation taxable profits will allow the deferred tax asset to be recovered. on buildings and impairment losses recognised after the date of the revaluation. Valuations are performed with sufficient frequency to ensure that Deferred tax assets and liabilities are measured at the tax rates that are the fair value of a revalued asset does not differ materially from its carrying expected to apply in the year when the asset is realised or the liability amount. is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

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A revaluation surplus is recognised in other comprehensive income and Group as a lessee accumulated in equity in the asset revaluation reserve, except to the Finance leases which transfer to the Group substantially all the risks and extent that it reverses a revaluation decrease of the same asset previously benefits incidential to ownership of the leased item, are capitalised at the recognised in the income statement, in which case the increase is recognised commencement of the lease at the fair value of the leased property or, if in the income statement. A revaluation deficit is recognised in the income lower, at the present value of the minimum lease payments. Lease payments statement, except to the extent that it offsets an existing surplus on the are apportioned between finance charges and reduction of the lease liability same asset recognised in the asset revaluation reserve. so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the income An annual transfer from the asset revaluation reserve to retained earnings is statement. made for the difference between depreciation based on the revalued carrying amount of the assets and depreciation based on the assets original cost. A leased asset is depreciated over the useful life of the asset. However, if Additionally, accumulated depreciation as at the revaluation date is eliminated there is no reasonable certainty that the Group will obtain ownership by against the gross carrying amount of the asset and the net amount is the end of the lease term, the asset is depreciated over the shorter of the restated to the revalued amount of the asset. Upon disposal, any revaluation estimated useful life of the asset and the lease term. reserve relating to the particular asset being sold is transferred to retained earnings. Operating lease payments are recognised as an operating expense in the income statement on a straight-line basis over the lease term. Depreciation is calculated on a straight-line basis commencing from the date it is available for use over the estimated useful lives of the assets as follows: Group as a lessor Leases in which the Group does not transfer substantially all the risks and t

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QFSJPE occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic 2.4.10 Investment properties benefits are expected from its use or disposal. Any gain or loss arising on Investment properties are measured initially at cost, including transaction derecognition of the asset (calculated as the difference between the net costs. Subsequent to initial recognition, investment properties are stated disposal proceeds and the carrying amount of the asset) is included in the at fair value, which reflects market conditions at the reporting date. Gains income statement when the asset is derecognised. or losses arising from changes in the fair values of investment properties are included in the income statement in the period in which they arise. Fair The assets’ residual values, useful lives and methods of depreciation are values are evaluated annually by an accredited external, independent valuer, reviewed at each financial year end and adjusted prospectively, if appropriate. applying a valuation model recommended by the International Valuation Standards Committee. 2.4.8 Leases The determination of whether an arrangement is, or contains, a lease is Investment properties are derecognised when either they have been disposed based on the substance of the arrangement at the inception date, whether of or when the investment property is permanently withdrawn from use fulfilment of the arrangement is dependent on the use of a specific asset or and no future economic benefit is expected from its disposal. The difference assets or the arrangement conveys a right to use the asset, even if that right between the net disposal proceeds and the carrying amount of the asset is is not explicitly specified in an arrangement. recognised in the income statement in the period of derecognition.

For arrangements entered into prior to 1 April 2011, the date of inception is Transfers are made to or from investment property only when there is a deemed to be 1 April 2011 in accordance with the SLFRS 1. change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change. If owner-occupied property becomes an investment property,

:::2'(//. the Group accounts for such property in accordance with the policy stated All financial assets are recognised initially at fair value plus transaction cost, under property, plant and equipment up to the date of change. except in the case of assets recorded at fair value through profit or loss, directly attributable transaction costs. 2.4.11 Intangible assets Intangible assets acquired separately are measured on initial recognition at Purchases or sales of financial assets that require delivery of assets within cost. The cost of intangible assets acquired in a business combination is their a time frame established by regulation or convention in the marketplace fair value as at the date of acquisition. Following initial recognition, intangible (regular way trades) are recognised on the trade date, i.e., the date that the assets are carried at cost less accumulated amortisation and accumulated Group commits to purchase or sell the asset. impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected The Group’s financial assets include cash and short-term deposits, trade and in the income statement in the year in which the expenditure is incurred. other receivables, quoted and unquoted financial instruments.

The useful lives of intangible assets are assessed as either finite or indefinite. Subsequent measurement The subsequent measurement of financial assets depends on their Intangible assets with finite lives are amortised over their useful economic classification as follows: lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the Financial assets at fair value through profit or loss amortisation method for an intangible asset with a finite useful life is Financial assets at fair value through profit or loss includes financial assets reviewed at least at the end of each reporting period. Changes in the held for trading and financial assets designated upon initial recognition at expected useful life or the expected pattern of consumption of future fair value through profit or loss. Financial assets are classified as held for economic benefits embodied in the asset is accounted for by changing the trading if they are acquired for the purpose of selling or repurchasing in the amortisation period or method, as appropriate, and are treated as changes near term. This category includes derivative financial instruments entered in accounting estimates. The amortisation expense on intangible assets with into by the Group that are not designated as hedging instruments in hedge finite lives is recognised in the income statement in the expense category relationships as defined by LKAS 39. Derivatives, including separated consistent with the function of the intangible assets. embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Amortization is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Financial assets at fair value through profit and loss are carried in the
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:FBST statement of financial position at fair value with changes in fair value recognised in finance income or finance costs in the income statement. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit The Group evaluates its financial assets held for trading, other than level. The assessment of indefinite life is reviewed annually to determine derivatives, to determine whether the intention to sell them in the near term whether the indefinite life continues to be supportable. If not, the change is still appropriate. When the Group is unable to trade these financial assets in useful life from indefinite to finite is made on a prospective basis. Gains due to inactive markets and management’s intention to sell them in the or losses arising from derecognition of an intangible asset are measured as foreseeable future significantly changes, the Group may elect to reclassify the difference between the net disposal proceeds and the carrying amount these financial assets in rare circumstances. The reclassification to loans and of the asset and are recognised in the income statement when the asset is receivables, available-for-sale or held to maturity depends on the nature of derecognised. the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation. 2.4.12 Financial instruments Initial recognition and subsequent measurement Loans and receivables i) Financial assets Loans and receivables are non-derivative financial assets with fixed or Initial recognition and measurement determinable payments that are not quoted in an active market. After initial Financial assets within the scope of LKAS 39 are classified as financial assets measurement, such financial assets are subsequently measured at amortised at fair value through profit or loss, loans and receivables, held-to-maturity cost using the effective interest rate method (EIR), less impairment. investments, available-for-sale financial assets, or as derivatives designated Amortised cost is calculated by taking into account any discount or premium as hedging instruments in an effective hedge, as appropriate. The Group on acquisition and fees or costs that are an integral part of the IR. The EIR determines the classification of its financial assets at initial recognition. amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement in finance costs.

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Derecognition which an impairment loss is, or continues to be, recognised are not included A financial asset (or, where applicable a part of a financial asset or part of a in a collective assessment of impairment. group of similar financial assets) is derecognised when: If there is objective evidence that an impairment loss has been incurred, the t

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future expected credit losses that have not yet been incurred). The present asset or has assumed an obligation to pay the received cash flows value of the estimated future cash flows is discounted at the financial in full without material delay to a third party under a ‘pass-through’ asset’s original effective interest rate. If a loan has a variable interest rate, arrangement; and either (a) the Group has transferred substantially the discount rate for measuring any impairment loss is the current effective all the risks and rewards of the asset, or (b) the Group has neither interest rate. transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. When the Group has transferred its rights to receive cash flows from an asset Interest income continues to be accrued on the reduced carrying amount or has entered into a pass-through arrangement, and has neither transferred and is accrued using the rate of interest used to discount the future cash nor retained substantially all of the risks and rewards of the asset nor flows for the purpose of measuring the impairment loss. The interest income transferred control of it, the asset is recognised to the extent of the Group’s is recorded as part of finance income in the income statement. Loans continuing involvement in it. together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or In that case, the Group also recognises an associated liability. The transferred has been transferred to the Group. If, in a subsequent year, the amount of asset and the associated liability are measured on a basis that reflects the the estimated impairment loss increases or decreases because of an event rights and obligations that the Group has retained. occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. Continuing involvement that takes the form of a guarantee over the If a future write-off is later recovered, the recovery is credited to finance costs transferred asset is measured at the lower of the original carrying amount of in the income statement the asset and the maximum amount of consideration that the Group could be required to repay. iii) Financial liabilities Initial recognition and measurement ii) Impairment of financial assets Financial liabilities within the scope of LKAS 39 are classified as financial The Group assesses at each reporting date whether there is any objective liabilities at fair value through profit or loss, loans and borrowings, or as evidence that a financial asset or a group of financial assets is impaired. A derivatives designated as hedging instruments in an effective hedge, as financial asset or a group of financial assets is deemed to be impaired if, and appropriate. The Group determines the classification of its financial liabilities only if, there is objective evidence of impairment as a result of one or more at initial recognition. events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future All financial liabilities are recognised initially at fair value and, in the case cash flows of the financial asset or the group of financial assets that can be of loans and borrowings, carried at amortised cost. This includes directly reliably estimated. Evidence of impairment may include indications that the attributable transaction costs. debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability The Group’s financial liabilities include trade and other payables, bank that they will enter bankruptcy or other financial reorganisation and where overdrafts, loans and borrowings. observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that Subsequent measurement correlate with defaults. The measurement of financial liabilities depends on their classification as follows: Financial assets carried at amortised cost For financial assets carried at amortised cost, the Group first assesses Financial liabilities at fair value through profit or loss whether objective evidence of impairment exists individually for financial Financial liabilities at fair value through profit or loss include financial assets that are individually significant, or collectively for financial assets that liabilities held for trading and financial liabilities designated upon initial are not individually significant. If the Group determines that no objective recognition as at fair value through profit or loss. Financial liabilities are evidence of impairment exists for an individually assessed financial asset, classified as held for trading if they are acquired for the purpose of selling in whether significant or not, it includes the asset in a group of financial assets the near term. This category includes derivative financial instruments entered with similar credit risk characteristics and collectively assesses them for into by the Group that are not designated as hedging instruments in hedge impairment. Assets that are individually assessed for impairment and for relationships as defined by LKAS 39. Separated embedded derivatives are

:::2'(//. also classified as held for trading unless they are designated as effective 2.4.13 Impairment of non-financial assets hedging instruments. The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual Gains or losses on liabilities held for trading are recognised in the income impairment testing for an asset is required, the Group estimates the asset’s statement. The Group has not designated any financial liabilities upon initial recoverable amount. An asset’s recoverable amount is the higher of an asset’s recognition as at fair value through profit or loss. or cash-generating unit (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate Loans and borrowings cash inflows that are largely independent of those from other assets or After initial recognition, interest bearing loans and borrowings are groups of assets. Where the carrying amount of an asset or CGU exceeds its subsequently measured at amortised cost using the effective interest rate recoverable amount, the asset is considered impaired and is written down to method. Gains and losses are recognised in the income statement when its recoverable amount. In assessing value in use, the estimated future cash the liabilities are derecognised as well as through the effective interest rate flows are discounted to their present value using a pre-tax discount rate that method (EIR) amortisation process. Amortised cost is calculated by taking reflects current market assessments of the time value of money and the risks into account any discount or premium on acquisition and fees or costs that specific to the asset. In determining fair value less costs to sell, recent market are an integral part of the EIR. The EIR amortisation is included in finance transactions are taken into account, if available. If no such transactions can costs in the income statement. be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded Derecognition subsidiaries or other available fair value indicators. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is The Group bases its impairment calculation on detailed budgets and forecast replaced by another from the same lender on substantially different terms, or calculations which are prepared separately for each of the Group’s cash- the terms of an existing liability are substantially modified, such an exchange generating units to which the individual assets are allocated. These budgets or modification is treated as a derecognition of the original liability and the and forecast calculations are generally covering a period of five years. For recognition of a new liability, and the difference in the respective carrying longer periods, a long term growth rate is calculated and applied to project amounts is recognised in the income statement. future cash flows after the fifth year. iv) Offsetting of financial instruments Impairment losses of continuing operations, including impairment on Financial assets and financial liabilities are offset and the net amount inventories, are recognised in the income statement in those expense reported in the consolidated statement of financial position if, and only if, categories consistent with the function of the impaired asset, except for there is a currently enforceable legal right to offset the recognised amounts a property previously revalued where the revaluation was taken to other and there is an intention to settle on a net basis, or to realise the assets and comprehensive income. In this case, the impairment is also recognised in settle the liabilities simultaneously. other comprehensive income up to the amount of any previous evaluation. v) Fair value of financial instruments For assets excluding goodwill, an assessment is made at each reporting date The fair value of financial instruments that are traded in active markets at as to whether there is any indication that previously recognised impairment each reporting date is determined by reference to quoted market prices or losses may no longer exist or may have decreased. If such indication exists, dealer price quotations (bid price for long positions and ask price for short the Group estimates the asset’s or cash-generating unit’s recoverable amount. positions), without any deduction for transaction costs. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount For financial instruments not traded in an active market, the fair value is since the last impairment loss was recognised. The reversal is limited so that determined using appropriate valuation techniques. Such techniques may the carrying amount of the asset does not exceed its recoverable amount, include; nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior Using recent arm’s length market transactions; years. Such reversal is recognised in the income statement unless the asset is carried at a revalued amount, in which case the reversal is treated as a reference to the current fair value of another instrument that is substantially revaluation increase. the same; a discounted cash flow analysis or other valuation models.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 12.

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2.4.14 Inventories The cost of providing benefits under gratuity is determined using the projected Inventories are valued at the lower of cost and net realisable value, after unit credit method. Actuarial gains and losses are recognised in full in the making due allowances for obsolete and slow moving items. Net realisable period in which they occur in the statement of comprehensive income. The value is the estimated selling price in the ordinary course of business, less defined benefit liability comprises the present value of the defined benefit estimated costs of completion and the estimated costs necessary to make obligation using a discount rate based on market yields at the end of the sale. reporting period on government bonds of a similar tenure as the estimated term of the gratuity obligation. Costs incurred in bringing each product to its present location and condition is accounted for as follows: The gratuity benefit of the Group is unfunded. t

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DPTU Employees are eligible for Employees’ Provident Fund Contributions and 2.4.15 Cash and short-term deposits Employees’ Trust Fund Contributions in line with the respective statutes and regulations. The Company contributes 12% and 3% of gross emoluments Cash and short-term deposits in the statement of financial position comprise of employees to Employees’ Provident Fund and Employees’ Trust Fund cash at banks and on hand and short-term deposits with a maturity of three respectively. months or less. 2.5 First-Time adoption of SLFRS/LKAS For the purpose of the consolidated statement cash flows, cash and cash equivalents consist of cash and short-term deposits as defined above, net of These financial statements, for the year ended 31 March 2013, are the first outstanding bank overdrafts. the Group has prepared in accordance with SLFRS. For periods up to and including the year ended 31 March 2012, the Group prepared its financial 2.4.16 Provisions statements in accordance with Sri Lanka Accounting Standards (SLAS) which were effective up to 31 March 2012. General

Provisions are recognised when the Group has a present obligation (legal Accordingly, the Group has prepared financial statements which comply with or constructive) as a result of a past event, it is probable that an outflow SLFRS applicable for periods ending on or after 31 March 2013, together of resources embodying economic benefits will be required to settle the with the comparative period data as at and for the year ended 31 March obligation and a reliable estimate can be made of the amount of the 2012, as described in the accounting policies. In preparing these financial obligation. statements, the Group’s opening statement of financial position was prepared as at 1 April 2011, the Group’s date of transition to SLFRS. This Where the Group expects some or all of a provision to be reimbursed, note explains the principal adjustments made by the Group in restating its the reimbursement is recognised as a separate asset but only when the statement of financial position as at 1 April 2011 and its previously published reimbursement is virtually certain. The expense relating to any provision is SLAS financial statements as at and for the year ended 31 March 2012. presented in the income statement net of any reimbursement. Exemptions applied If the effect of the time value of money is material, provisions are discounted SLFRS 1 First-Time Adoption of Sri Lanka Financial Reporting Standards using a current pre-tax rate that reflects, where appropriate, the risks specific allows first-time adopters certain exemptions from the retrospective to the liability. Where discounting is used, the increase in the provision due to application of certain SLFRS. the passage of time is recognised as a finance cost.

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Defined benefit plan - Gratuity: subsidiaries, which are considered businesses for SLFRS, or of interests Gratuity is a post employment benefit plan. Provisions have been made in associates and joint ventures that occurred before 1 April 2011. for retirement gratuities from the first year of service for all employees in conformity with LKAS 19. However under the Gratuity Act No. 12 of 1983, t
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the liability to an employee arises only on completion of five years of the previous GAAP must be used in the opening SLFRS statement of continued service, The Company is liable to pay gratuity in terms of relevant financial position (apart from adjustments for goodwill impairment and statute. In order to meet this liability the Group uses an actuarial valuation recognition or derecognition of intangible assets). In accordance with method in accordance with LKAS 19. SLFRS 1, the Group has tested goodwill for impairment at the date of transition to SLFRS. No goodwill impairment was deemed necessary at 1 April 2011.

:::2'(//. 2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.1 SLFRS transition reconciliations 2.5.1.1 Company/Group reconciliation of equity as at 1 April 2011, showing the effect on equity at the date of transition

Company Group Remeasure- SLFRS/LKAS Remeasure- SLFRS/LKAS SLAS ments 01 April 2011 SLAS ments 01 April 2011 Note LKR LKR LKR LKR LKR LKR

ASSETS Non-Current Assets
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Intangible assets 2,196,055 - 2,196,055 12,147,445 - 12,147,445 Investment in subsidiaries 389,101,030 - 389,101,030 - - - Other financial assets K - 12,428,428 12,428,428 - 12,428,428 12,428,428 Goodwill - - - 68,485 - 68,485 1,777,023,171 12,428,428 1,789,451,599 1,917,091,475 12,428,428 1,929,519,903 Current Assets Inventories 993,246,649 - 993,246,649 1,037,004,930 - 1,037,004,930 Trade and other receivables A 150,280,383 (15,343,647) 134,936,736 154,073,944 (15,343,647) 138,730,297 Amounts due from related parties 141,297,971 - 141,297,971 - - - Other financial assets K - 2,884,881 2,884,881 - 2,884,881 2,884,881 Cash and bank balances 19,132,477 - 19,132,477 25,286,470 - 25,286,470 1,303,957,480 (12,458,766) 1,291,498,714 1,216,365,344 (12,458,766) 1,203,906,578 Total Assets 3,080,980,651 (30,338) 3,080,950,313 3,133,456,819 (30,338) 3,133,426,481

EQUITY AND LIABILITIES Equity Stated capital 251,925,000 - 251,925,000 251,925,000 - 251,925,000 Revaluation surplus 443,918,263 - 443,918,263 573,566,440 - 573,566,440 Retained earnings 700,099,064 (14,275,101) 685,823,963 797,870,800 (13,313,087) 784,557,713 Total Equity 1,395,942,327 (14,275,101) 1,381,667,226 1,623,362,240 (13,313,087) 1,610,049,153 Non-Current Liabilities and Deferred Income Long term interest bearing borrowings 322,411,942 - 322,411,942 322,411,942 - 322,411,942 Deferred tax liabilities J 39,328,142 (5,863,561) 33,464,581 39,380,475 (5,863,561) 33,516,914 Retirement benefit liability 23,174,999 (832,963) 22,342,036 26,314,242 (1,794,977) 24,519,265 384,915,083 (6,696,524) 378,218,559 388,106,659 (7,658,538) 380,448,121 Current Liabilities Trade and other payables 435,604,737 - 435,604,737 444,498,762 - 444,498,762 Amounts due to related parties 190,075,999 - 190,075,999 - - - Income tax payable 67,176,092 - 67,176,092 70,222,745 - 70,222,745 Current portion of interest bearing borrowings 607,266,413 - 607,266,413 607,266,413 - 607,266,413 Deferred liability B - 20,941,287 20,941,287 - 20,941,287 20,941,287 1,300,123,241 20,941,287 1,321,064,528 1,121,987,920 20,941,287 1,142,929,207 Total Equity and Liabilities 3,080,980,651 (30,338) 3,080,950,313 3,133,456,819 (30,338) 3,133,426,481

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2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.2 Company/Group reconciliation of equity as at 31 March 2012, showing the effect on equity at the date of transition

Company Group Remeasure- SLFRS/LKAS Remeasure- SLFRS/LKAS SLAS ments 31.03.2012 SLAS ments 31.03.2012 Note LKR LKR LKR LKR LKR LKR

ASSETS Non-Current Assets
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Intangible assets - - - 13,359,024 - 13,359,024 Investment in subsidiaries 379,101,030 - 379,101,030 - - - Other financial assets K - 25,274,617 25,274,617 - 25,274,617 25,274,617 Goodwill ------1,972,926,789 25,274,617 1,998,201,406 2,137,472,228 25,274,617 2,162,746,845 Current Assets Inventories 1,054,722,776 - 1,054,722,776 1,093,969,250 - 1,093,969,250 Trade and other receivables A 222,775,649 (31,610,376) 191,165,273 228,346,205 (31,610,376) 196,735,829 Amounts due from related parties 46,156,663 - 46,156,663 - - - Income tax refund due 13,358,198 - 13,358,198 13,969,437 - 13,969,437 Other financial assets K - 5,795,429 5,795,429 - 5,795,429 5,795,429 Cash and bank balances 23,092,332 - 23,092,332 25,148,135 - 25,148,135 1,360,105,618 (25,814,947) 1,334,290,671 1,361,433,027 (25,814,947) 1,335,618,080 Total Assets 3,333,032,407 (540,330) 3,332,492,077 3,498,905,255 (540,330) 3,498,364,925

EQUITY AND LIABILITIES Equity Stated capital 251,925,000 - 251,925,000 251,925,000 - 251,925,000 Revaluation surplus 442,768,163 - 442,768,163 570,415,036 - 570,415,036 Retained earnings 776,290,767 (26,883,379) 749,407,388 931,003,061 (25,212,905) 905,790,156 Total Equity 1,470,983,930 (26,883,379) 1,444,100,551 1,753,343,097 (25,212,905) 1,728,130,192

Non-Current Liabilities and Deferred Income Long term interest bearing borrowings C 576,112,670 (275,000,000) 301,112,670 576,112,670 (275,000,000) 301,112,670 Deferred tax liabilities J 34,864,545 (9,043,353) 25,821,192 34,798,357 (9,043,353) 25,755,004 Retirement benefit liability 26,990,007 3,088,714 30,078,721 32,266,810 1,418,240 33,685,050 637,967,222 (280,954,639) 357,012,583 643,177,837 (282,625,113) 360,552,724

Current Liabilities Trade and other payables 403,604,239 - 403,604,239 426,531,057 - 426,531,057 Amounts due to related parties 144,623,752 - 144,623,752 - - - Income tax payable ------Current portion of interest bearing borrowings C 675,853,264 275,000,000 950,853,264 675,853,264 275,000,000 950,853,264 Deferred liability B - 32,297,688 32,297,688 32,297,688 32,297,688 1,224,081,255 307,297,688 1,531,378,943 1,102,384,321 307,297,688 1,409,682,009 Total Equity and Liabilities 3,333,032,407 (540,330) 3,332,492,077 3,498,905,255 (540,330) 3,498,364,925

:::2'(//. 2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.3 Company/Group reconciliation of total comprehensive income for the year ended 31 March 2012, showing the effect on profit of the previous year

Company Group Remeasure- SLFRS/LKAS Remeasure- SLFRS/LKAS SLAS ments 31-03-2012 SLAS ments 31-03-2012 Note LKR LKR LKR LKR LKR LKR

Revenue D 3,816,515,346 93,508,182 3,910,023,528 3,818,637,750 93,508,182 3,912,145,932 Cost of sales (2,338,913,868) - (2,338,913,868) (2,341,807,704) - (2,341,807,704) Gross profit 1,477,601,478 93,508,182 1,571,109,660 1,476,830,046 93,508,182 1,570,338,228 Other income E 97,664,657 (93,895,821) 3,768,836 100,149,102 (93,895,821) 6,253,281 Distribution expenses F (229,688,072) 58,825 (229,629,247) (229,852,444) 58,825 (229,793,619) Administrative expenses G (1,025,931,774) (14,187,139) (1,040,118,913) (972,033,198) (12,711,867) (984,745,065) Operating profit 319,646,289 (14,515,953) 305,130,336 375,093,506 (13,040,681) 362,052,825 Finance costs (110,577,427) - (110,577,427) (110,612,840) - (110,612,840) Finance income H - 2,649,564 2,649,564 - 2,649,564 2,649,564 Profit before tax 209,068,862 (11,866,389) 197,202,473 264,480,666 (10,391,117) 254,089,549 Income tax expense I (61,999,519) 3,179,792 (58,819,727) (62,472,071) 3,179,792 (59,292,279) Profit for the year 147,069,343 (8,686,597) 138,382,746 202,008,595 (7,211,325) 194,797,270 Other comprehensive income Actuarial gains and (losses) on defined benefit plans L (i) - (3,921,677) (3,921,677) - (4,688,488) (4,688,488) - (3,921,677) (3,921,677) - (4,688,488) (4,688,488) Other comprehensive income (loss) for the year, net of tax - (3,921,677) (3,921,677) - (4,688,488) (4,688,488) Total comprehensive income for the year, net of tax 134,461,069 190,108,782

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2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.4 Notes to the reconciliation of equity as at 1 April 2011 and 31 March 2012.

A Trade and other receivables Under the previous standards which were effective up to 31 March 2012, refundable rent deposits were not considered as a financial asset and carried at their cost. But with the implementation of LKAS 32 and LKAS 39, this balance has been recognized as a financial asset classified under loans andreceivables. Carrying value of the balance has been re- measured at amortized cost.

As of Company Group As of Company Group

Balance as per previous SLAS 31-03-2011 150,280,383 154,073,944 31-03-2012 222,775,649 228,346,205 Trade debtors 4,596,835 4,678,838 26,821,332 27,227,363 Other debtors 21,453,634 21,981,676 24,819,889 25,076,796

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Remeasurement (15,343,647) (15,343,647) (31,610,376) (31,610,376) Trade debtors - - - - Other debtors (5,822,916) (5,822,916) (7,940,420) (7,940,420)

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   Balance as per new SLFRS/LKAS 01-04-2011 134,936,736 138,730,297 31-03-2012 191,165,273 196,735,831 Trade debtors 4,596,835 4,678,838 26,821,330 27,227,361 Other debtors 15,630,718 16,158,760 16,879,471 17,136,379

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B Deferred Liabilities. i) Customer loyalty program Fair value of the points awarded on the sale of goods has been transferred to deferred revenue and the fair value of the points redeemed has been transferred to the revenue from the deferred revenue.

ii) Operating lease LKAS 17 requires recognizing the operating lease expense on straight line basis and up to 31 March 2012 the group has recognized the expense on actual basis. Impact on the change in the accounting policy has been charged to retain earnings and the corresponding entry has been recognized under differed liability.

As of Company Group As of Company Group

Balance as per previous SLAS 31-03-2011 - - 31-03-2012 - - i) Deferred revenue - - - - ii) Deferred expenditure - - - - Remeasurement 20,941,287 20,941,287 32,297,688 32,297,688 i) Customer loyalty - - 1,219,859 1,219,859 ii) Operating lease 20,941,287 20,941,287 31,077,829 31,077,829 Balance as per new SLFRS/LKAS 01-04-2011 20,941,287 20,941,287 31-03-2012 32,297,688 32,297,688 i) Deferred revenue - - 1,219,859 1,219,859 ii) Deferred expenditure 20,941,287 20,941,287 31,077,829 31,077,829

C Interest bearing borrowings In 2012, a loan of Rs. 275,000,000 which had been classified as non current is reclassified as current portion of interest bearing borrowings.

Non current portion of interest bearing borrowings Current portion of interest bearing borrowings As of Company Group As of Company Group

Balance as per previous audit 31-03-2012 576,112,670 576,112,670 31-03-2012 675,853,264 675,853,264 Reclassification total (275,000,000) (275,000,000) 275,000,000 275,000,000 Balance as per new classification 31-03-2012 301,112,670 301,112,670 31-03-2012 950,853,264 950,853,264

:::2'(//. 2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.4 Notes to the reconciliation of total comprehensive income for the year ended 31 March 2012

D Revenue recognition Under SLAS, the points redemptions are accounted as marketing and promotion expense. However as per SLFRS/LKAS the fair value of the points awarded is deferred and recognised as revenue when the points are redeemed. And as per previous SLAS Rent income, Advertising income, Commission income, Service income have been classified under other operating income. Under SLFRS/LKAS these have been reclassified in revenue. Company Group Year ended 31 March 2012 Year ended 31 March 2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Amount 3,816,515,346 93,508,182 3,910,023,528 3,818,637,750 93,508,182 3,912,145,932

From - Other operating income To - Revenue Reclassification total 94,786,865 94,786,865 Rental income 73,969,446 73,969,446 Advertising income 12,277,841 12,277,841 Commission income 240,445 240,445 Management fee - - Service income 8,299,133 8,299,133

Remeasurement total - (1,278,683) (1,278,683) - (1,278,683) (1,278,683) Loyalty points awarded - (1,278,683) (1,278,683) - (1,278,683) (1,278,683)

E Other operating income As per previous SLAS Rent income, Advertising income, Commission income, Service income have been classified under other operating income. Under SLFRS/LKAS these have been reclassified in revenue. Company Group Year ended 31 March 2012 Year ended 31 March 2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Amount 97,664,657 (93,895,821) 3,768,836 100,149,102 (93,895,821) 6,253,281

From - Other operating income To - Revenue Reclassification total (94,786,865) (94,786,865) Rental income (73,969,446) (73,969,446) Advertising income (12,277,841) (12,277,841) Commission income (240,445) (240,445) Management fee - - Service income (8,299,133) (8,299,133)

From - Other operating income To - Administrative expenses Reclassification total 910,105 910,105 Exchange gain/(loss) 910,105 910,105

From - Other operating income To - Finance income Reclassification total (19,061) (19,061) Interest income (19,061) (19,061)

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2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.4 Notes to the reconciliation of total comprehensive income for the year ended 31 March 2012

F Distribution expenses Under SLAS, the loyalty points redemptions are accounted as marketing and promotion expense. However as per SLFRS/LKAS the fair value of the points issued is deferred and recognised as revenue when the points are redeemed. Company Group Year ended 31 March 2012 Year ended 31 March 2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Amount 229,688,072 (58,825) 229,629,247 229,852,444 (58,825) 229,793,619

Remeasurement total 58,825 (58,825) - 58,825 (58,825) - Loyalty points redeedemed 58,825 (58,825) - 58,825 (58,825) -

G Administrative expenses Under previous SLAS, staff loans and refundable rent deposits are accounted at cost. As per SLFRS/LKAS company has recognized these balances as financial assets. Difference between the carring values as per SLAS and SLFRS/LKAS has been recognized as pre paid employee compansation and deposit amortization. Further LKAS 17 requires recognizing the operating lease expense on straight line basis and up to 31 March 2012 the group has recognized the expense on actual basis. Impact on the change in the accounting policy has been charged to retain earnings and the corresponding entry has been recognized under differed liability. Company Group Year ended 31 March 2012 Year ended 31 March 2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Amount 1,025,931,774 14,187,139 1,040,118,913 972,033,198 12,711,867 984,745,065

From - Other operating income To - Administrative expenses Reclassification total 910,105 910,105 Exchange gain/(loss) 910,105 910,105 Remeasurement total 5,530,827 13,277,034 18,807,861 7,696,437 11,801,762 19,498,199 Pre paid employee compensation - 725,842 725,842 - 725,841 725,841 Rent amortisation - straight line - 10,136,541 10,136,541 - 10,136,541 10,136,541 Deposits amortisation - 2,414,651 2,414,651 - 2,414,651 2,414,651 G (i) Acturial (gain)/Loss 5,530,827 - 5,530,827 7,696,437 (1,475,271) 6,221,166

H Finance income Under previous SLAS, staff loans and refundable rent deposits are accounted at cost. As per SLFRS/LKAS company has recognized these balances as financial assets and classified as loans and recievables and remeasured at amortized cost. Difference between the carring values as per SLAS and SLFRS/LKAS has been recognized as the reversal of day 1 difference - staff Loan and interest income - refundable deposits. Company Group Year ended 31 March 2012 Year ended 31 March 2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Amount - 2,649,564 2,649,564 - 2,649,564 2,649,564 Reclassification From - Other operating income To - Finance income Reclassification total 19,061 19,061 Interest income 19,061 19,061 Remeasurement total - 2,630,503 2,630,503 - 2,630,503 2,630,503 Reversal of day 1 difference - staff loan - 725,840 725,840 - 725,840 725,840 Interest Income - refundable deposits - 1,904,663 1,904,663 - 1,904,663 1,904,663 :::2'(//. 2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.4 Notes to the reconciliation of total comprehensive income for the year ended 31 March 2012

I Income tax expense The company/Group has assesed the impact of new SLFRS/LKAS and the deferred tax impact arrising on that has been reocognized in the income tax expense

Company Group Year ended 31 March 2012 Year ended 31 March 2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Balance 61,999,519 (3,179,792) 58,819,727 62,472,072 (3,179,792) 59,292,280

Remeasurement total - (3,179,792) (3,179,792) - (3,179,792) (3,179,792) Deferred tax - Loyalty points - (341,561) (341,561) - (341,561) (341,561) Deferred tax - Operating leases - (2,838,232) (2,838,232) - (2,838,232) (2,838,232)

J Deferred tax liabilities The company/Group has assesed the impact of SLFRS/LKAS and the deferred tax impact arrising on that has been reocognized in the deferred tax liability as of transitional date and the comparative date. Company Group 31-03-2012 31-03-2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Balance 34,864,545 (9,043,353) 25,821,192 34,798,357 (9,043,353) 25,755,004

Remeasurement total - (9,043,353) (9,043,353) - (9,043,353) (9,043,353) Deferred tax - Loyalty points - (341,561) (341,561) - (341,561) (341,561) Deferred tax - Operating leases - (8,701,792) (8,701,792) - (8,701,792) (8,701,792)

01-04-2011 01-04-2011 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Balance 39,328,142 (5,863,561) 33,464,581 39,380,475 (5,863,561) 33,516,914

Remeasurement total - (5,863,561) (5,863,561) - (5,863,561) (5,863,561) Deferred tax - Operating leases - (5,863,561) (5,863,561) - (5,863,561) (5,863,561)

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2.5 First-Time adoption of SLFRS/LKAS (Contd.) 2.5.4 Notes to the reconciliation of total comprehensive income for the year ended 31 March 2012

K Other financial assets - Current / Non current Under the previous standards which were effective up to 31 March 2012, refundable rent deposits were not considered as a financial asset and carried at their cost. But with the implementation of LKAS 32 and LKAS 39 this balance has been recognized as a financial asset classified under loansnd a receivables. Carrying value of the balance has been re- measured at amortized cost.

Company Group 31-03-2012 31-03-2012 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Balance - 31,070,046 31,070,046 - 31,070,046 31,070,046

Total current - 5,795,429 5,795,429 - 5,795,429 5,795,429 Total non current - 25,274,617 25,274,617 - 25,274,617 25,274,617 Remeasurement total - 31,070,046 - - 31,070,046 - Staff loan - 6,937,819 6,937,819 - 6,937,819 6,937,819 Refundable deposit - 24,132,227 24,132,227 - 24,132,227 24,132,227

01-04-2011 01-04-2011 As per Remeasurement/ As per As per Remeasurement/ As per SLAS Reclassification SLFRS/LKAS SLAS Reclassification SLFRS/LKAS

Balance - 15,313,309 15,313,309 - 15,313,309 15,313,309

Total current - 2,884,881 2,884,881 - 2,884,881 2,884,881 Total Non current - 12,428,428 12,428,428 - 12,428,428 12,428,428 Remeasurement total - 15,313,309 - - 15,313,309 - Staff loan - 4,916,774 4,916,774 - 4,916,774 4,916,774 Refundable deposit - 10,396,535 10,396,535 - 10,396,535 10,396,535

L Retirement benefit liability As per LKAS 19 retirement benefit obligation has been remeasured as at 31 March 2013 together with 31 March 2012 and 01 April 011.2

As of Company Group As of Company Group

Balance as per previous SLAS 31-03-2011 23,174,999 26,314,242 31-03-2012 26,990,007 32,266,810

Remeasurement total - (832,963) (1,794,977) - 3,088,714 1,418,240 Actuarial (gain)/loss for the period - (832,963) (1,794,977) - 3,921,677 4,688,488

L (i) Actuarial (gain)/loss at transitional date - - - - (832,963) (1,794,977)

G (i) Actuarial (gain)/loss - - - - - (1,475,271) Balance as per SLFRS/LKAS 01-04-2011 22,342,036 24,519,265 31-03-2012 30,078,721 33,685,050

:::2'(//. 3. REVENUE Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

Sale of goods Sales - local 4,468,406,242 3,851,871,651 4,468,860,139 3,853,994,055 Sales - Exports 985,407 4,154,557 1,237,744 4,154,557 4,469,391,649 3,856,026,208 4,470,097,883 3,858,148,612

Less: Sales tax (44,615,356) (40,789,545) (44,615,356) (40,789,545) Sales of goods total 4,424,776,293 3,815,236,663 4,425,482,527 3,817,359,067 Rental income 84,869,738 73,969,446 84,869,738 73,969,446 Advertising income 13,856,166 12,277,841 13,856,166 12,277,841 Commission income 138,701 240,445 138,701 240,445 Service income 9,329,867 8,299,133 9,329,867 8,299,133 4,532,970,765 3,910,023,528 4,533,676,999 3,912,145,932

4. OTHER OPERATING INCOME Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

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6,294,643 29,923 6,247,192 29,923 Sundry income 2,715,780 2,513,060 6,066,251 6,291,843 Unclaimed creditors written back - - 13,770 - Gain/(loss) on disposal of shares of subsidiaries - (458,500) - - Amortisation of goodwill - - - (68,485) Dividend income - 1,684,353 - - 9,010,423 3,768,836 12,327,213 6,253,281

5. FINANCE COSTS Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

Interest expense on overdrafts 57,203,443 40,832,319 57,203,443 40,867,732
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103,306,707 69,244,871 103,306,707 69,244,871 Lease interest 372,105 500,238 372,105 500,238 160,882,255 110,577,428 160,882,255 110,612,841

6. FINANCE INCOME Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

Interest income 83,934,478 2,649,564 83,934,478 2,649,564 Income from investment in Unit Trust 6,700,000 - 6,700,00 - 90,634,478 2,649,564 90,634,478 2,649,564

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

7. PROFIT BEFORE TAX Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

Administration Expenses Directors’ emoluments 29,875,000 24,500,000 29,875,000 24,500,000 Depreciation 84,362,680 67,179,838 101,406,760 78,383,184 Amortisation of intangible assets - 798,404 7,775,289 6,361,078 Personnel costs includes - - Gratuity 7,724,659 5,530,827 9,680,208 6,221,166


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40,806,674 34,114,787 44,896,192 37,909,778 - Other staff costs 367,676,319 280,868,696 403,799,358 314,158,940 Donations 5,122,706 4,143,211 5,122,706 4,143,211 Audit Fee 1,507,671 1,708,686 2,065,631 2,189,128

Selling and Distribution Expenses Transport cost 9,610,282 23,916,981 9,610,282 23,916,981
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8. INCOME TAX EXPENSE Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

INCOME STATEMENT Current income tax Current tax expense 57,729,380 71,332,315 65,778,258 71,938,505 Under/(over) provision of current taxes in respect of prior year (6,283,546) (5,316,460) (5,804,487) (5,331,576)

Deferred income tax Deferred taxation charge /(reversal) 13,457,989 (7,196,128) 14,375,435 (7,314,649) Income tax expense/(income) reported in the income statement 64,903,823 58,819,727 74,349,206 59,292,280

STATEMENT OF COMPREHENSIVE INCOME Deferred income tax related to items charged or credited directly to equity during the year. Company Group 2013 2012 2013 2012 LKR LKR LKR LKR

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:::2'(//. 8.1 A reconciliation between tax expenses and the product of accounting profit multiplied by the statutory tax rate is as follows Company Group For the year ended 31 March For the year ended 31 March 2013 2012 2013 2012 LKR LKR LKR LKR

Accounting profit before tax 177,259,774 197,202,473 231,671,419 254,089,550 Transitional adjustment - 11,866,389 - 11,866,389 177,259,774 209,068,862 231,671,419 265,955,939

Income tax rate of 28% (2012 : 28%) 49,632,737 58,539,281 49,632,737 77,055,766 Income tax rate of 10% ( 2012: 10%) - - 4,923,493 - Income tax rate of 20% ( 2012: 20%) - - 1,703,018 183,679 Current income tax of previous year (6,283,546) (5,316,460) (5,804,487) (5,331,014) Tax on export sales - 15% (4,448) (43,757) (4,448) (43,757) Allowable expenses (37,891,937) (25,551,656) (39,271,708) (25,551,656) Income exempt from tax (1,263,718) (471,619) (1,616,596) (18,988,103) Non deductible expenses 47,249,007 38,581,292 50,477,903 38,728,368 Effect on deferred tax 13,457,989 (4,016,336) 14,375,435 (4,134,858) Other 7,738 278,774 (66,141) 553,647 64,903,823 61,999,519 74,349,206 62,472,072

The effective income tax rate 36.62% 31.44% 32.09% 24.59%

Income tax expense reported previously 64,903,823 61,999,519 74,349,206 62,472,072 Transitional adjustment - (3,179,792) - (3,179,792) Income tax expense reported 64,903,823 58,819,727 74,349,206 59,292,280

8.2 Deferred tax assets ,liabilities and income tax relates to the followings; Company Group Balance Sheet Balance Sheet 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR Deferred tax liability Capital allowances for tax purposes 51,309,682 32,375,836 34,482,561 50,493,167 32,576,272 34,340,200 Revaluation of property, plant and equipments 6,196,117 10,887,320 11,334,581 6,196,117 10,887,320 11,334,581 57,505,799 43,263,156 45,817,142 56,689,284 43,463,592 45,674,781

Deferred tax assets Defined benefit plans (9,289,405) (7,557,202) (6,489,000) (9,225,242) (7,823,826) (6,294,306) Lease rent (604,109) (841,409) - (604,109) (841,409) - Deferred revenue (2,521,333) (341,561) - (2,521,333) (341,561) - Operating lease (straight line) (10,502,972) (8,701,792) (5,863,561) (10,502,972) (8,701,792) (5,863,561) (22,917,820) (17,441,964) (12,352,561) (22,853,657) (17,708,588) (12,157,867)

Net deferred tax liability 34,587,979 25,821,192 33,464,581 33,835,627 25,755,004 33,516,914

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

8. INCOME TAX EXPENSE (Contd.) 8.2 Deferred tax assets ,liabilities and income tax relates to the followings; Company Group Income Statement Income Statement 2013 2012 2013 2012 LKR LKR LKR LKR

Capital allowances for tax purposes 18,933,847 (2,106,725) 17,916,896 (2,044,035) 18,933,847 (2,106,725) 17,916,896 (2,044,035)

Deferred tax assets Defined benefit plans (1,732,203) (1,068,202) (1,401,416) (1,529,520) Lease rent 237,300 (841,409) 237,300 (841,409) Deferred revenue (2,179,773) (341,561) (2,179,773) (341,561) Operating lease (straight line) (1,801,180) (2,838,231) (1,801,180) (2,838,231) Accumulated tax losses - - 1,603,609 280,106 Deferred income tax (income)/expense 13,457,990 (7,196,128) 14,375,435 (7,314,650)

9. PROPERTY, PLANT & EQUIPMENT Balance Additions Disposals/ Balance As at Acquisitions/ Revaluations Transfers As at 01-04-2011 Transfers 31-03-2012 LKR LKR LKR LKR LKR

9.1 Company 9.1.1 Gross carrying amounts At cost Land - 38,359,210 - - 38,359,210 Land scaping 884,560 - - - 884,560 Building - at cost 400,000 82,276,047 - - 82,676,047 Building - lease hold 57,416,334 36,202,303 - (12,174,164) 81,444,473 Office equipment 124,436,840 33,209,147 - (159,235) 157,486,752 Fixtures - other 75,192,806 - - - 75,192,806 Fixtures - air conditions 12,915,663 - - - 12,915,663 Furniture 65,801,502 14,372,403 - - 80,173,905 Computer equipments 42,861,817 4,400,458 - (47,262,275) - Office equipment- other 5,431,661 - - - 5,431,661 Shop fittings - fixtures 150,632,794 83,179,208 - - 233,812,002 Shop fittings - mobiles 25,037,761 2,216,053 - - 27,253,814 Motor vehicles 18,736,590 - - (82,100) 18,654,490 Motor vehicles -lease 4,718,750 - - - 4,718,750 584,467,079 294,214,830 - (59,677,774) 819,004,135 At valuation Land - At valuation 946,119,000 - - 946,119,000 Building - At valuation 97,150,000 - - - 97,150,000 1,043,269,000 - - - 1,043,269,000 9.1.2 In the course of constructions Balance As at Incurred Reclassified/ Disposals/ Balance As at 01-04-2011 During the year Transferred Written off 31-03-2012 LKR LKR LKR LKR LKR

Building work in progress - - - Capital work in progress 19,367,144 277,867,857 (278,111,246) - 19,123,755 19,367,144 277,867,857 (278,111,246) - 19,123,755

Total gross carrying amount 1,647,103,223 572,082,687 (278,111,246) (59,677,774) 1,881,396,889

:::2'(//. 9. PROPERTY, PLANT & EQUIPMENT (Contd.) Balance Additions/ Charge for Disposals/ Balance as at Transfers/ the year/ Transfers as at 01-04-2011 Acquisitions Transfers 31-03-2012 LKR LKR LKR LKR LKR

9.1.3 Depreciation At Cost Land scaping 884,560 - - - 884,560 Building - at cost 16,667 - 1,705,249 - 1,721,915 Building - lease hold 13,983,090 - 9,792,104 (1,669,296) 22,105,898 Office equipment 50,563,105 - 13,031,495 (161,246) 63,433,354 Fixtures - other 48,748,341 - 7,219,787 - 55,968,128 Fixtures - air conditions 11,218,146 - 417,407 - 11,635,552 Furniture 15,591,118 - 7,259,939 - 22,851,056 Computer equipments 37,974,239 - 1,098,967 (39,073,206) - Office equipment- other 1,647,218 - 271,853 - 1,919,071 Shop fittings - fixtures 44,908,593 - 19,155,195 - 64,063,788 Shop fittings - mobiles 14,354,980 - 2,341,284 - 16,696,264 Motor vehicles 15,533,397 - 707,713 (82,100) 16,159,009 Motor vehicles -lease 1,101,042 - 943,750 - 2,044,792 256,524,495 - 63,944,741 (40,985,847) 279,483,388

At valuation Land - At valuation - - - - - Building - At valuation 4,852,643 - 3,235,095 - 8,087,738 4,852,643 - 3,235,095 - 8,087,738

Total 261,377,137 - 67,179,836 (40,985,847) 287,571,126

Balance Additions Disposals/ Balance As at Acquisitions/ Revaluations Transfers As at 01-04-2012 Transfers 31-03-2013 LKR LKR LKR LKR LKR 9.2 Company 9.2.1 Gross carrying amounts At cost Land 38,359,210 - - (38,359,210) - Land scaping 884,560 - - - 884,560 Building - at cost 82,676,047 - - (82,676,047) - Building - lease hold 81,444,473 10,641,280 - - 92,085,753 Office equipment 157,486,753 17,410,343 - (596,700) 174,300,396 Fixtures - other 75,192,805 - - - 75,192,805 Fixtures - air conditions 12,915,663 - - - 12,915,663 Furniture 80,173,905 3,004,495 - (110,440) 83,067,960 Office equipment- other 5,431,661 - - - 5,431,661 Shop fittings - fixtures 233,812,002 17,662,640 - (666,675)250,807,967 Shop fittings - mobiles 27,253,814 4,056,731 - -31,310,545 Motor vehicles 18,654,490 17,175,000 - (7,023,994) 28,805,496 Motor vehicles -lease 4,718,750 - - - 4,718,750 819,004,133 69,950,489 - (129,433,066) 759,521,556 At valuation Land - At valuation 946,119,000 38,359,210 506,641,790 - 1,491,120,000 Building - At valuation 97,150,000 58,920,889 (10,040,889) - 146,030,000 1,043,269,000 97,280,099 496,600,901 - 1,637,150,000

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

9. PROPERTY, PLANT & EQUIPMENT (Contd.) Balance Incurred Balance As at during Reclassified / Disposal / As at 01-04-2012 the year Transferred Written off 31-03-2013 LKR LKR LKR LKR LKR 9.2.2 In the course of constructions Building work in progress - - - - - Capital work in progress 19,123,754 57,241,816 (64,397,759) - 11,967,811 19,123,754 57,241,816 (64,397,759) - 11,967,811

Total gross carrying amount 1,881,396,887 224,472,404 432,203,142 (129,433,066) 2,408,639,367

Balance Additions/ Charge for Disposals/ Balance as at Transfers/ the year/ Transfers* as at 01-04-2012 Acquisitions Transfers 31-03-2013 LKR LKR LKR LKR LKR 9.2.3 Depreciation At cost Land scaping 884,560 - - - 884,560 Building - at cost 1,721,915 - 2,084,690 (3,806,605) - Building - lease hold 22,105,898 - 14,258,254 - 36,364,152 Office equipment 63,433,354 - 14,682,149 - 78,115,503 Fixtures - other 55,968,128 - 6,304,631 - 62,272,759 Fixtures - air conditions 11,635,552 - 417,407 - 12,052,959 Furniture 22,851,056 - 7,864,992 - 30,716,048 Computer equipments - - - - - Office equipment- other 1,919,071 - 271,617 - 2,190,688 Shop fittings - fixtures 64,063,788 - 28,556,989 - 92,620,777 Shop fittings - mobiles 16,696,264 - 2,689,367 - 19,385,631 Motor vehicles 16,159,009 - 2,938,023 (7,023,994) 12,073,038 Motor vehicles -lease 2,044,792 - 943,750 - 2,988,542 279,483,387 - 81,011,869 (10,830,599) 349,664,657

At valuation Land - At valuation - - - - - Building - At valuation 8,087,738 3,230,605 3,350,811 (14,283,846) 385,308 8,087,738 3,230,605 3,350,811 (14,283,846) 385,308

Total 287,571,125 3,230,605 84,362,680 (25,114,445) 350,049,965

* This transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against the gross carrying amount of the revalued assets.

:::2'(//. 9. PROPERTY, PLANT & EQUIPMENT (Contd.) 2013 2012 01 April 2011 LKR LKR LKR

9.2 Company 9.2.4 Net book value At cost Land - 38,359,210 - Land scaping - - - Building - 80,954,132 383,333 Building - lease hold 55,721,601 59,338,575 43,433,244 Office equipment 96,184,893 94,053,399 73,873,735 Fixtures - other 12,920,046 19,224,677 26,444,465 Fixtures - air conditions 862,704 1,280,111 1,697,518 Furniture 52,351,912 57,322,849 50,210,385 Computer equipments - - 4,887,578 Office equipment- other 3,240,973 3,512,590 3,784,443 Shop fittings - fixtures 158,187,190 169,748,214 105,724,200 Shop fittings - mobiles 11,924,914 10,557,550 10,682,781 Motor vehicles 16,732,458 2,495,481 3,203,194 Motor vehicles -lease 1,730,208 2,673,958 3,617,708 409,856,899 539,520,746 327,942,585

At valuation Land 1,491,120,000 946,119,000 946,119,000 Building 145,644,692 89,062,262 92,297,358 1,636,764,692 1,035,181,262 1,038,416,357

9.2.5 In the course of constructions Capital work in progress 11,967,811 19,123,754 19,367,144 Total gross carrying amount 11,967,811 19,123,754 19,367,144 Total 2,058,589,402 1,593,825,762 1,385,726,086

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Building 138,011,529 19,668,316 118,343,213 50,178,979 51,816,713 Land 569,706,011 - 569,706,011 531,346,801 531,346,801

9.2.7 Land and buildings with a carrying value of Rs. 1,483,686,771 (2012 - Rs. 1,090,407,101 and 2011 - Rs. 978,949,541) have been pledged as security for term loans obtained, details of which are disclosed in Note 25.

9.2.8 The carrying value of motor vehicles under finance lease contracts at 31 March 2013 was Rs. 1,730,208 (2012 - Rs. 2,673,958, 0112 - Rs. 3,617,708). No additions during the year (2012 - Nil, 2011 - Nil) of mortor vehicles under finance lease contracts. Leased assets are pledged as security for the related finance lease liabilities.

9.2.9 The extent and the location of the entity’s land and buildings (Company) are shown below Address Land/ Building Valuation Extent

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9. PROPERTY, PLANT & EQUIPMENT (Contd.) Balance Additions Disposals/ Balance As at Acquisitions/ Revaluations Transfers As at 01-04-2011 Transfers 31-03-2012 LKR LKR LKR LKR LKR 9.3 Group 9.3.1 Gross carrying amounts At cost Land 270,194,557 38,359,210 - - 308,553,767 Land scaping 884,560 - - - 884,560 Building - at cost 400,000 82,276,047 - - 82,676,047 Building - lease hold 57,416,334 36,202,303 - (12,174,164) 81,444,473 Office equipment 124,517,449 33,351,006 - (161,245) 157,707,210 Fixtures - other 76,338,767 275,208 - - 76,613,974 Fixtures - air conditions 12,915,663 - - - 12,915,663 Furniture 74,061,874 14,499,452 - - 88,561,326 Computer equipments 62,018,293 10,829,511 - - 72,847,808 Office equipment- other 9,974,725 1,497,238 - - 11,471,963 Shop fittings - fixtures 150,632,794 83,179,208 - - 233,812,002 Shop fittings - mobiles 25,037,761 2,216,053 - - 27,253,814 Motor vehicles 20,488,797 - - (82,100) 20,406,697 Motor vehicles -lease 4,718,750 - - - 4,718,750 889,600,325 302,685,236 - (12,417,509) 1,179,868,056

At valuation Land - At valuation 1,059,619,000 - - - 1,059,619,000 Building - At valuation 219,150,000 - - - 219,150,000 1,278,769,000 - - - 1,278,769,000

Balance Incurred Balance As at During Reclassified/ Disposal/ As at 01-04-2011 the year Transferred Written off 31-03-2012 LKR LKR LKR LKR LKR 9.3.2 In the course of constructions Building work in progress - 5,683,866 - - 5,683,866 Capital work in progress 19,367,144 277,867,857 (278,111,246) - 19,123,755 Total gross carrying amount 19,367,144 283,551,724 (278,111,246) - 24,807,621 Total 2,187,736,468 586,236,959 (278,111,246) (12,417,509) 2,483,444,677 Balance Additions/ Charge for Disposals/ Balance As at Transfers/ the year/ Transfers As at 01.04.2011 Acquisitions Transfers 31.03.2012 LKR LKR LKR LKR LKR 9.3.3 Depreciation At cost Land scaping 884,560 - - - 884,560 Building - at cost 16,667 - 1,705,249 - 1,721,915 Building - lease hold 13,983,090 - 9,792,104 (1,669,296) 22,105,898 Office equipment 50,578,353 - 13,040,464 (161,246) 63,457,571 Fixtures - other 49,479,510 - 7,384,849 - 56,864,360 Fixtures - air conditions 11,218,146 - 417,407 - 11,635,552 Furniture 20,866,071 - 8,085,133 - 28,951,204 Computer equipments 44,552,261 - 6,397,213 - 50,949,473 Office equipment- other 3,336,495 - 1,265,789 - 4,602,284 Shop fittings - fixtures 44,908,593 - 19,155,195 - 64,063,788 Shop fittings - mobiles 14,354,980 - 2,341,284 - 16,696,264 Motor vehicles 17,285,604 - 707,713 (82,100) 17,911,216 Motor vehicles -lease 1,101,042 - 943,750 - 2,044,792 272,565,371 - 71,236,149 (1,912,642) 341,888,879 At valuation Land - At valuation - - - - - Building - At valuation 10,295,553 - 7,147,035 - 17,442,588 10,295,553 - 7,147,035 - 17,442,588 Total 282,860,924 - 78,383,184 (1,912,642) 359,331,467

:::2'(//. 9. PROPERTY, PLANT & EQUIPMENT (Contd.) Balance Additions Disposals/ Balance As at Acquisitions/ Revaluations Transfers* As at 01-04-2012 Transfers 31-03-2013 LKR LKR LKR LKR LKR 9.4 Group 9.4.1 Gross carrying amounts Land 308,553,767 - - (308,553,767) - Land scaping 884,560 - - - 884,560 Building - at cost 82,676,047 - - (82,676,047) - Building - lease hold 81,444,473 10,641,280 - - 92,085,753 Office equipment 157,707,211 17,410,343 - (596,700) 174,520,854 Fixtures - other 76,613,973 553,001 - - 77,166,974 Fixtures - air conditions 12,915,663 - - - 12,915,663 Furniture 88,561,326 3,148,935 - (110,440) 91,599,821 Computer equipments 33,774,602 6,488,130 - (134,500) 40,128,232 Office equipment- other 11,471,963 1,540,007 - (71,500) 12,940,470 Shop fittings - fixtures 233,812,002 17,662,640 - (666,675) 250,807,967 Shop fittings - mobiles 27,253,814 4,056,731 - - 31,310,545 Motor vehicles 20,406,697 17,175,000 - (7,023,994) 30,557,703 Motor vehicles -lease 4,718,750 - - - 4,718,750 1,140,794,848 78,676,067 - (399,833,623) 819,637,292 At valuation Land - At valuation 1,059,619,000 308,553,767 609,047,233 - 1,977,220,000 Building - At valuation 219,150,000 58,920,889 119,859,111 - 397,930,000 1,278,769,000 367,474,656 728,906,344 - 2,375,150,000 Balance Incurred Balance As at During Reclassified / Disposal / As at 01-04-2012 the year Transferred Written off 31-03-2013 LKR LKR LKR LKR LKR 9.4.2 In the course of constructions Building work in progress 5,683,866 22,972,362 - - 28,656,228 Capital work in progress 19,123,754 57,241,816 (64,397,759) - 11,967,811 24,807,620 80,214,178 (64,397,759) - 40,624,039 Total gross carrying amount 2,444,371,468 526,364,901 664,508,585 (399,833,623) 3,235,411,331

Balance Additions/ Charge for Disposals/ Balance As at Transfers/ the year/ Transfers* As at 01-04-2012 Acquisitions Transfers 31-03-2013 LKR LKR LKR LKR LKR 9.4.3 Depreciation At Cost Land scaping 884,560 - - - 884,560 Building - at cost 1,721,915 - 2,084,690 (3,806,605) - Building - lease hold 22,105,898 - 14,258,254 - 36,364,152 Office equipment 63,457,571 - 14,694,810 - 78,152,381 Fixtures - other 56,864,360 - 6,555,155 - 63,419,515 Fixtures - air conditions 11,635,552 - 417,407 - 12,052,959 Furniture 28,951,204 - 8,707,311 - 37,658,515 Computer equipments 11,876,267 - 7,411,157 (34,275) 19,253,149 Office equipment- other 4,602,284 - 1,677,149 (28,600) 6,250,833 Shop fittings - fixtures 64,063,788 - 28,556,989 - 92,620,777 Shop fittings - mobiles 16,696,264 - 2,689,367 - 19,385,631 Motor vehicles 17,911,216 - 2,938,023 (7,023,994) 13,825,245 Motor vehicles -lease 2,044,792 - 943,750 - 2,988,542 302,815,671 - 90,934,062 (10,893,474) 382,856,259 At valuation Land - At valuation - - - - - Building - At valuation 17,442,589 3,230,605 10,472,698 (24,616,682) 6,529,210 17,442,589 3,230,605 10,472,698 (24,616,682) 6,529,210

Total 320,258,260 3,230,605 101,406,760 (35,510,156) 389,385,469 * This transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against the gross carrying amount of the revalued assets.

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

9. PROPERTY, PLANT & EQUIPMENT (Contd.) 2013 2012 01 April 2011 LKR LKR LKR

9.4 Group 9.4.4 Net book value At cost Land - 308,553,767 270,194,557 Land scaping - - - Building - 80,954,132 383,333 Building - lease hold 55,721,601 59,338,575 43,433,244 Office equipment 96,368,473 94,249,640 73,939,096 Fixtures - other 13,747,459 19,749,613 26,859,256 Fixtures - air conditions 862,704 1,280,111 1,697,518 Furniture 53,941,306 59,610,122 53,195,803 Computer equipments 20,875,083 21,898,335 17,466,032 Office equipment- other 6,689,637 6,869,679 6,638,231 Shop fittings - fixtures 158,187,190 169,748,214 105,724,200 Shop fittings - mobiles 11,924,914 10,557,550 10,682,781 Motor vehicles 16,732,458 2,495,481 3,203,193 Motor vehicles -lease 1,730,208 2,673,958 3,617,708 436,781,033 837,979,177 617,034,954

At valuation Land 1,977,220,000 1,059,619,000 1,059,619,000 Building 391,400,790 201,707,411 208,854,447 2,368,620,790 1,261,326,411 1,268,473,447

9.4.5 In the course of constructions Building work in progress 28,656,228 5,683,866 - Capital work in progress 11,967,811 19,123,754 19,367,144 Total gross carrying amount 40,624,039 24,807,620 19,367,144

Total 2,846,025,862 2,124,113,208 1,904,875,544

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Cumulative depreciation Net carrying Net carrying Net carrying If assets were amount amount amount Class of asset Cost carried at cost 2013 2012 01 April 2011 LKR LKR LKR LKR LKR

Building 202,436,963 35,908,894 166,528,069 100,108,689 104,967,695 Land 887,794,134 - 887,794,134 579,240,367 579,240,367

9.4.7 Land and buildings with a carrying value of Rs. 2,215,542,870 (2012 - Rs. 1,586,746,807 and 2011 - Rs. 1,479,201,187) have been pledged as security for term loans obtained, details of which are disclosed in Note 25.

9.4.8 The carrying value of motor vehicles under finance lease contracts at 31 March 2013 was Rs. 1,730,208 (2012 - Rs. 2,673,958, 0112 - Rs. 3,617,708). No additions during the year (2012 - Nil, 2011 - Nil) of mortor vehicles under finance lease contracts. Leased assets are pledged as security for the related finance lease liabilities.

9.4.9 The extent and the location of the entity’s land and buildings (Group)

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:::2'(//. 10. INTANGIBLE ASSETS Computer software Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR

Cost As at 1 April - 9,123,885 8,145,862 43,357,186 35,784,530 31,073,845 Additions (subsequent expenditure) - 3,152,333 978,024 5,473,448 7,572,656 4,820,685 Transferred from under development ------Impairment during the year ------Disposals/Transfers - (12,276,218) - - - (110,000) Total gross carrying amount - - 9,123,886 48,830,634 43,357,186 35,784,530 Amortization As at 1 April - 6,927,831 5,635,841 29,998,162 23,637,084 17,547,231 Amortized during the year - 798,404 1,291,990 7,775,289 6,361,078 6,128,812 Disposals/Transfers - Amortization - (7,726,235) - - - (38,958) Cumulative amortization - - 6,927,831 37,773,451 29,998,162 23,637,085

Net book value - - 2,196,055 11,057,183 13,359,024 12,147,445

11. INVESTMENT IN SUBSIDIARIES Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 Holding LKR LKR LKR LKR LKR LKR

Odel Properties (Pvt) Ltd. 100% 108,100,000 108,100,000 108,100,000 - - - Odel Information Technology Services (Pvt) Ltd 100% 10 10 10 - - - Odel Lanka (Pvt) Ltd 100% 270,000,020 270,000,020 270,000,020 - - - Otone (Pvt) Ltd. 100% - - 10,000,000 - - Odel Apparels (Pvt) Ltd 100% 1,000 1,000 1,000 - - - BSL International (Pvt) Ltd 100% 1,000,000 1,000,000 1,000,000 - - - Greenfield Trading (Pvt) Ltd 100% 10 - - - - - 379,101,040 379,101,030 389,101,030 - - - Impairment of investment (1,000,000) - - - - - 378,101,040 379,101,030 389,101,030 - - -

12. OTHER FINANCIAL ASSETS Company/ Group 2013 2012 01 April 2011 LKR LKR LKR Financial assets at fair value through profit and loss Investment in Unit Trust 2,006,700,000 - -

Loans and receivables Staff loan 6,219,254 6,937,819 4,916,774 Refundable deposit 26,519,251 24,132,227 10,396,535 2,039,438,505 31,070,046 15,313,309

Total current 2,008,684,191 5,795,429 2,884,881 Total non current 30,754,314 25,274,617 12,428,428 Financial assets from fair value through profit or loss is an investment in Unit Trust made by the management as they intend to use the investment as a funding option for upcoming investment project.

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

12.1 Fair values The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged ina current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: Investment in Unit Trust, Cash and short-term deposits, staff loans, refundable deposits, trade receivables, trade payables and other current liabilities approximate their carrying amounts. The fair value of loans from banks, obligations under finance leases, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. Set out below is a comparison by class of the carrying amounts and fair value of the Group’s interest bearing loans and borrowings that are carried in the financial statements.

Carrying Amount Fair value As at As at Interest bearing loans and borrowings 2013 2012 1 April 2011 2013 2012 1 April 2011 Finance lease 2,157,533 3,005,031 3,835,269 2,072,497 3,187,313 4,221,288 Floating/Fixed rate borrowings 577,506,504 795,406,998 564,912,177 571,832,756 798,126,620 564,912,177 Bank overdrafts 90,277,363 453,553,907 360,930,909 90,277,363 453,553,907 360,930,909 669,941,400 1,251,965,936 929,678,355 664,182,617 1,254,867,840 930,064,374

12.2 Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observablemarket data As at 31 March 2013, the Group held the following financial instruments carried at fair value in the statement of financial position:

Assets measured at fair value 2013 Level 1 Level 2 Level 3 LKR LKR LKR LKR Financial assets at fair value through profit and loss Investment in Unit Trust 2,006,700,000 2,006,700,000 - -

:::2'(//. 13. INVENTORIES Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR Finished goods 1,202,019,779 1,079,095,932 1,028,490,085 1,216,138,762 1,118,342,407 1,072,248,366 Goods in transit 18,713,382 10,841,619 13,625,431 18,713,382 10,841,619 13,625,431 Provision for obsolete and slow moving items (15,986,382) (35,214,775) (48,868,867) (15,986,382) (35,214,775) (48,868,867) Total inventories at the lower of cost and NRV 1,204,746,779 1,054,722,776 993,246,649 1,218,865,762 1,093,969,251 1,037,004,930

During 2013 Rs. 5,207,545 was recognised as expenses for inventories carried at net realisable value.

14. TRADE AND OTHER RECEIVABLES Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR Trade debtors 37,487,794 26,821,330 4,596,835 37,542,894 27,227,361 4,678,838 Other debtors 18,062,858 16,879,471 15,630,718 18,611,300 17,136,379 16,158,760
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124,220,757 147,464,472 114,709,183 133,667,179 152,372,091 117,892,699 179,771,409 191,165,273 134,936,736 189,821,373 196,735,831 138,730,297

Trade receivables are non-interest bearing and is due for less than 30 days.

15. AMOUNTS DUE FROM RELATED PARTIES Amount due from subsidiary companies Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR Odel Properties (Pvt.) Ltd. - - 18,041,006 - - - Odel Apparels (Pvt) Ltd 27,317,626 35,598,441 68,095,252 - - - Odel Lanka (Pvt) Ltd 80,033,821 55,249,471 48,145,750 - - - Odel IT Services (Pvt) Ltd - - 52,199,018 - - - Greenfield Trading (Pvt) Ltd 81,649 - - - - - BSL International (Pvt) Ltd 2,937,444 491,806 - - - - 110,370,540 91,339,718 186,481,026 - - - Less:Provision for doubtfull debt (48,120,499) (45,183,055) (45,183,055) - - - 62,250,041 46,156,663 141,297,971 - - -

16. STATED CAPITAL 2013 2012 01 April 2011 Number LKR Number LKR Number LKR Fully Paid Ordinary Shares 272,129,431 2,795,513,620 144,950,000 251,925,000 144,950,000 251,925,000 272,129,431 2,795,513,620 144,950,000 251,925,000 144,950,000 251,925,000

The stated capital of the company as at 31 March 2012 was Rs.251,925,000 comprising of 144,950,000 ordinary shares. The company allotted 127,179,431 ordinary shares at Rs.20 per share through a rights issue on 17 December 2012. Accordingly the stated capital as at 31 March 2013 was Rs.2,795,513,620

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

17. INTEREST BEARING LOANS AND BORROWINGS (Company/Group)

2013 2013 2012 2012 Repayable Repayable 2013 Repayable Repayable 2012 Within 1 year After 1 year Total Within 1 year After 1 year Total Note LKR LKR LKR LKR LKR LKR Bank loan (17.1) 151,019,712 426,486,792 577,506,504 496,340,989 299,066,009 795,406,998 Lease creditors (17.2) 1,191,502 966,031 2,157,533 958,370 2,046,661 3,005,031 Bank overdraft (22.2) 90,277,363 - 90,277,363 453,553,907 - 453,553,907 242,488,577 427,452,823 669,941,400 950,853,266 301,112,670 1,251,965,936

INTEREST BEARING LOANS AND BORROWINGS (Company/Group) Repayable Repayable 01 April 2011 Within 1 year After 1 year Total LKR LKR LKR Bank loan 245,505,268 319,406,909 564,912,177 Lease creditors 830,236 3,005,033 3,835,269 Bank overdraft 360,930,909 - 360,930,909 607,266,413 322,411,942 929,678,355

17.1 Bank loans 01.04.2012 Obtained Repayment 31.03.2013 LKR LKR LKR LKR Short term working capital loans 380,000,000 454,000,000 (834,000,000) - Medium term project loans 415,406,998 275,023,836 (112,924,330) 577,506,504 795,406,998 729,023,836 (946,924,330) 577,506,504

17.1.1 Terms of the loan Lending Institution Year Loan Nature of Security Repayment Term Amount facility Union Bank 2011/2012 105 mn Short term Loan Property at No.10, Ward Place, Colombo 3 Months 07. Bank of Ceylon 2012/2013 275 mn Medium term Property at 475/32, Kotte Road, Rajagiriya. 6 Years loan Hatton National 2011/2012/ 2013 200 mn Medium term Property at 271-271F,Kaduwela Road, Over a period of 06 years in 59 Bank loan Thalangama, Battaramulla, owned by Odel equal monthly installments Lanka (Pvt) Ltd DFCC Bank 2011/2012 400 mn Medium term Property at 15, C.W.W Kannangara Mw. 96 equal monthly installments after loan Colombo 07. a grace period of 24 months from the date of first disbursement DFCC Bank 2011/2012/2013 200 mn Medium term Property at 15, C.W.W Kannangara Mw. 57 equal monthly loan Colombo 07. installments(Capital) after a grace period of 03 months DFCC Bank 2012/2013 96 mn Medium term Property at 15, C.W.W Kannangara Mw. 84 equal monthly installments loan Colombo 07 and 29 A,Jayathilaka Mw. (capital) after a grace period of Panadura. 12 months from the date of first disbursement

:::2'(//. 17. INTEREST BEARING LOANS AND BORROWINGS ( Contd.) 17.2 Long term finance lease commitments - Company/Group 2013 2013 2012 2012 Repayable Repayable 2013 Repayable Repayable 2012 Within 1 year After 1 year Total Within 1 year After 1 year Total LKR LKR LKR LKR LKR LKR Future minimum lease payment 1,441,349 997,856 2,439,205 1,330,476 2,328,332 3,658,808 Finance cost allocated to future period (249,847) (31,825) (281,672) (372,106) (281,671) (653,777) Net liability 1,191,502 966,031 2,157,533 958,370 2,046,661 3,005,031

Long term finance lease commitments - Company/Group 2011 2011 Repayable Repayable 01 April 2011 within 1 year after 1 year Total LKR LKR LKR Future minimum lease payment 1,330,476 3,658,810 4,989,286 Finance cost allocated to future period (500,240) (653,777) (1,154,017) Net Liability 830,236 3,005,033 3,835,269

18. RETIREMENT BENEFIT LIABILITY Company Group Defined benefit plan costs - gratuity 2013 2012 01 April 2011 2013 2012 01 April 2011 Note LKR LKR LKR LKR LKR LKR Defined benefit plan costs - gratuity As at the beginning of the year 30,078,721 22,342,036 29,361,667 33,685,050 24,519,265 31,731,182 Balance transferred from new subsidiaries ------Charge for the year 18.1 7,724,659 5,530,827 4,890,639 9,680,208 6,221,166 5,493,809 Payment made during the year (4,149,774) (1,715,819) (518,443) (4,229,825) (1,743,869) (602,548) Actuarial loss/(gain) on obligation (477,158) 3,921,677 (11,391,827) (2,126,559) 4,688,488 (12,103,178) Defined benefit obligation as at the end of the year 33,176,448 30,078,721 22,342,036 37,008,874 33,685,050 24,519,265

18.1 Charge for the year Current service cost 4,416,000 2,768,652 2,542,641 5,974,854 3,219,497 2,945,358 Interest cost 3,308,659 2,762,175 2,347,998 3,705,354 3,001,669 2,548,451 7,724,659 5,530,827 4,890,639 9,680,208 6,221,166 5,493,809

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

18. RETIREMENT BENEFIT LIABILITY (Contd.)

18.2 The Retirement benefit liability of Odel PLC is valued by Mr. Piyal Goonatilleke, who is a fellow member of the society of actuaries (USA) and a member of the American Academy of Actuaries. Defined liability is valued as at 31 March 2013 and the principal actuarial assumptions used are as follows.

Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 Principal actuarial assumptions LKR LKR LKR LKR LKR LKR Discount rate 12.25% p.a. 11% p.a. 11% p.a. 12.25% p.a. 11% p.a. 11% p.a. Salary increases 10% p.a 09% p.a. 09% p.a. 10% p.a 09% p.a. 09% p.a. Staff turnover Age Turnover Turnover Turnover Turnover Turnover Turnover 20 30% 30% 30% 30% 30% 30% 25 30% 30% 30% 30% 30% 30% 30 20% 20% 20% 20% 20% 20% 35 10% 10% 10% 10% 10% 10% 40 5% 5% 5% 5% 5% 5% 45 2% 2% 2% 2% 2% 2% Retirement age 55 Years 55 Years 55 Years 55 Years 55 Years 55 Years

19. TRADE AND OTHER PAYABLES Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR Trade payables 265,830,646 237,194,181 290,969,880 265,554,900 253,124,580 298,155,916 Sundry creditors including accrued expenses 249,475,577 166,410,057 144,478,172 258,509,832 173,406,480 146,186,161 Odel Foundation Trust - - 156,685 - - 156,685 515,306,223 403,604,238 435,604,737 524,064,732 426,531,060 444,498,762

20. AMOUNTS DUE TO RELATED PARTIES Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 Amount due to subsidiary companies LKR LKR LKR LKR LKR LKR Odel Properties (Pvt) Ltd 66,767,018 54,980,045 72,243,107 - - - Odel Information Technology Services (Pvt) Ltd 132,028,131 86,233,602 84,216,088 - - - Otone (Pvt) Ltd - - 9,000,000 - - - Odel Apparels (Pvt) Ltd 7,547,250 3,410,105 24,616,804 - - - 206,342,399 144,623,752 190,075,999 - - -

:::2'(//. 21. DEFERRED LIABILITY Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 LKR LKR LKR LKR LKR LKR 21.1 Deferred revenue Loyalty programe As at 1 April 1,219,859 - - 1,219,859 - - Deferred during the year 10,365,099 1,278,682 - 10,365,099 1,278,682 - Released to the income statement (2,580,196) (58,823) - (2,580,196) (58,823) - As at 31 March 9,004,763 1,219,859 - 9,004,763 1,219,859 -

21.2 Deferred expenditure Operating lease As at 1 April 31,077,829 20,941,287 16,770,333 31,077,829 20,941,287 16,770,333 Charged to the income statement net of payments 6,432,785 10,136,541 4,170,955 6,432,785 10,136,541 4,170,955 As at 31 March 37,510,613 31,077,829 20,941,287 37,510,613 31,077,829 20,941,287 Total deferred liability 46,515,376 32,297,688 20,941,287 46,515,376 32,297,688 20,941,287

22. CASH AND CASH EQUIVALENTS Company Group 2013 2012 01 April 2011 2013 2012 01 April 2011 Components of cash and cash equivalents LKR LKR LKR LKR LKR LKR 22.1 Favorable cash & cash equivalents balance
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Bank overdraft (90,277,363) (453,553,907) (360,930,909) (90,277,363) (453,553,907) (360,930,909) 17,911,579 (430,461,573) (341,798,432) 19,140,869 (428,405,770) (335,644,439)

23. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit/(loss) for the year attributable to equity holders of parentby the weighted average number of ordinary shares outstanding during the year. The weighted average number of ordinary shares outstanding during the year and the previous year are adjusted for events, that have changed the number of ordinary shares outstanding, without a corresponding change in the resources.

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

Amounts used as the numerators: 2013 2012 LKR LKR Net profit 157,322,213 194,797,270 Net profit attributable to ordinary shareholders for basic earnings per share 157,322,213 194,797,270

Number of ordinary shares used as denominators: Weighted average number of ordinary shares in issue applicable to basic earnings per share 178,051,496 144,950,000 Earnings per share 0.88 1.34

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

24. DIVIDENDS PAID AND PROPOSED Declared and paid during the year 2013 2012 LKR LKR Dividends on ordinary shares: Final dividend for 2012: 25 cents per share (2011: 25 cents per share) 36,237,500 36,237,500 Interim dividend for 2013: 25 cents per share (2012: 25 cents per share) 36,237,500 36,237,500

Proposed A final dividend of 10 cents per share for the year 2012/13 has been declared on 29 May 2013.

25. ASSETS PLEDGED - (Company/Group) The following assets have been pledged as security for liabilities.

Nature of asset Mortgage type Address Lending Institution 2013 2012 2011 Land Primary No. 10, Ward Place, Colombo 07. Union Bank 310 mn 310 mn 310 mn Land Primary No. 15, C.W.W. Kannangara Mawatha, Colombo DFCC Bank 281 mn 681 mn 640 mn 07. Land Primary No 29A, Jayathilaka Mawatha, Panadura DFCC Bank 55 mn 55 mn - -BOE

#VJMEJOH Primary No. 475/32, Kotte Road, Rajagiriya BOC 275 mn 275 mn - -BOE

#VJMEJOH Primary No 271-271F,Kaduwela Road, Thalangama, HNB 200 mn 200 mn 200 mn Battaramulla owned by Odel Lanka (Pvt) Ltd Stock in trade Primary Sampath Bank 50 mn 50 mn 50 mn Stock in trade Concurrent HNB 250 mn 250 mn 250 mn Stock in trade Secondary DFCC Bank 135 mn 135 mn 135 mn

26. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES There were no significant capital commitments and contingent liabilities as of the balance sheet date except for the letters of credit executed for Rs.54,404,088 (USD 427,772) for foreign purchases.

Operating lease commitments - Group as lessee The group has entered into commercial leases for properties to operate its outlet network. These leases have an average life of between 4 to 8 years. There are no restrictions placed upon the group by entering into these leases.

Future minimum rentals payable under cancellable operating leases are as follows:

2013 2012 01 April 2011 LKR LKR LKR Within one year 150,580,383 181,578,956 149,948,262 After one year but not more than five years 342,454,950 431,450,089 596,438,806 More than five years 61,550,845 101,968,932 139,726,329 554,586,178 714,997,977 886,113,397

:::2'(//. 27. RELATED PARTY DISCLOSURES The financial statements include the financial statements of the group and the subsidiaries listed in the following table:

% of equity interest Name 2013 2012 2011 Odel Apparels (Pvt) Ltd 100% 100% 100% Odel Information Technology Services ( Pvt) Ltd 100% 100% 100% Odel Properties ( Pvt) Ltd 100% 100% 100% Odel Lanka ( Pvt) Ltd 100% 100% 100% BSL International (Pvt) Ltd 100% 100% 0% Greenfield Trading (Pvt) Ltd 100% 100% 0%

Note 27.1 provides the total amount of transactions that have been entered into with the above related parties for the relevant financial year and the information regarding outstanding balances at 31 March 2013 and 2012, (For 1 April 2011 balance, refer to Notes)

27.1 Transactions with the parent and related entities Fellow Subsidiaries 2013 2012 Nature of transaction LKR LKR Balance as at 1 April 49,893,883 (8,359,313) Purchase of goods/services 262,383,569 247,960,193 Settlement of liabilities on behalf of the company (223,832,843) (189,706,996) Balance as at 31 March 88,444,609 49,893,883

Above balances are included in the amount due to/due from related parties

27.2 Odel PLC entered into a licensing agreement with Studiotara (Pvt) Ltd, which owns “Embark” trade mark and Otara Del Gunewardene, who is the sole shareholder of Studiotara (Pvt) Ltd, on 31 January 2013, whereby Odel PLC is granted exclusive rights to use “Embark” trade mark in its products for a nominal sum of Rs. 5,000.

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27.3 Transactions with key management personnel of the company or its parent The key management personnel of the company are the members of its board of directors and that of its parent .

a) Key management personnel compensation 2013 2012 LKR LKR Short-term employee benefits 32,425,000 26,900,000 32,425,000 26,900,000

b) Other transactions 2013 2012 LKR LKR Rent paid by the company for the premises owned by key management personnel Nil 1,500,000

Amounts outstanding in respect of key management personnel Nil Nil

:::2'(//. 127(6727+(),1$1&,$/67$7(0(176

28. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The group’s principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations.

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The group’s senior management oversees the management of the financial risks. The board of directors reviews and agrees policies for managing each of these risks which are summarized below.

Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The group’s exposure to the risk of changes in market interest rates arise due to the borrowings with floating interest rates. The movementof rates are closely monitored and refinancing options are available to manage this risk.

Interest rate sensitivity The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings. With all other variables held constant, the group’s profit before tax is affected through the impact on floating rate borrowings, as follows:

Increase/decrease in basis points Effect on profit before tax 2013
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The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatil- ity than in prior years.

Credit risk Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, eadingl to a financial loss. The group has minimal exposure to credit risk from operating activities due to nature of business. The risk from its financing activities, including epositsd with banks and financial institutions is managed by dealing with institutions carrying high credit rating.

Capital management The group’s objectives when managing capital are: > to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and > to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The group sets the amount of capital in proportion to risk. The group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Refer Note 16 for the group’s current capital structure.

:::2'(//. Liquidity Risk The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and finance leases. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders.

The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.

Year ended 31 March 2013 Less than On demand 3 months 3 to 12 months 1 to 5 years > 5 years Total Interest-bearing loans and borrowings - 38,127,750 114,109,549 425,144,133 2,282,629 579,664,062 Bank overdrafts 90,277,363 - - - - 90,277,363 Trade and other payables - 248,396,102 13,329,359 4,105,186 - 265,830,646 90,277,363 286,523,852 127,438,908 429,249,319 2,282,629 935,772,071

Year ended 31 March 2012 Less than On demand 3 months 3 to 12 months 1 to 5 years > 5 years Total Interest-bearing loans and borrowings - 136,946,072 81,913,074 563,555,099 15,997,785 798,412,030 Bank overdrafts 453,553,907 - - - - 453,553,907 Trade and other payables - 202,181,470 29,451,268 5,561,443 - 237,194,181 453,553,907 339,127,542 111,364,342 569,116,542 15,997,785 1,489,160,118

As at 1 April 2011 Less than On demand 3 months 3 to 12 months 1 to 5 years > 5 years Total Interest-bearing loans and borrowings - 163,222,866 83,112,788 322,412,030 - 568,747,684 Bank overdrafts - 360,930,909 - - - 360,930,909 Trade and other payables - 210,026,327 65,805,290 22,324,299 - 298,155,916 - 734,180,102 148,918,078 344,736,329 - 1,227,834,509

29. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE There have been no material events occurring after the balance sheet date that require adjustments to or disclosure in the financial statements, other than for the information disclosed in Note 24 of the Financial Statements.

:::2'(//. 6+$5(+2/'(5$1',19(6725,1)250$7,21

1. SHAREHOLDERS

There were 6,981 (2012 - 7,910) Ordinary shareholders as at 31 March 2013, distributed into different categories as follows:

Share Analysis at 31 March 2013

No. of shares No. of Holders No. of shares Holdings % 1 - 1,000 5,970 1,750,363 0.64 1,001 - 10,000 879 2,870,653 1.06 10,001 - 100,000 111 3,117,348 1.15 100,001 - 1,000,000 15 3,817,870 1.40 Over 1,000,000 6 260,573,197 95.75 Total 6,981 272,129,431 100.00

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Category No. of Holders No. of shares Holdings % Individuals 6,800 134,458,507 49.40 Institutions 181 137,670,924 50.60 Total 6,981 272,129,431 100.00 Residents 6,944 136,289,009 50.08 Non-residents 37 135,840,422 49.92 Total 6,981 272,129,431 100.00

:::2'(//. 2. TWENTY LARGEST SHAREHOLDERS - ORDINARY SHARES AS AT 31 MARCH 2013 No. Name No. of Shares Percentage % 1 Parkson Retail Asia Limited 129,150,864 47.46 2 Ms. O.D. Gunewardene 80,833,100 29.70 3 Mr. A.D. Gunewardene 39,416,900 14.48 4 Dr. T. Senthilverl 5,097,956 1.87 5 Northern Trust Company S/A HNC Opportunities 4,606,967 1.69 Master Fund, SPC 6 Pershing LLC S/A Chambers Street Global Fund,LP 1,467,410 0.54 7 Mr. R.H. Gunewardene 1,000,000 0.37 8 Mrs. E.B.H.A. Perera / Mr D.C. De L ST. D Perera 527,000 0.19 9 Mercantile Investment and Finance PLC 300,000 0.11 10 Tangerine Tours (Pvt) Limited 225,600 0.08 11 Bank of Ceylon No.1 Account 197,400 0.07 12 Mr. M.A Junaid 194,720 0.07 13 Dee Investments (Pvt) Ltd 190,400 0.07 14 Mr. M.M Salahudeen 180,000 0.07 15 Mrs. F.S. Sabry 162,000 0.06 16 First Capital Markets Limited/Mr I.P. Galhenage 155,550 0.06 17 Gold Investment Limited 150,200 0.06 18 Mr. I.M. Dabah 150,200 0.06 19 Mr. M. A. Valabji 150,200 0.06 20 Mr. M. H.M. Nazeer 123,600 0.05

3. DIVIDENDS AND MARKET VALUE

Dividends per share 35 Cents Dividend pay out 40% Net asset value per share Rs. 18.72

Share Price 31 March 2013 LKR As at the end of the year 21.00 Highest price traded 26.90 Lowest price traded 16.00

:::2'(//. 127,&(2)0((7,1*

Notice is hereby given that the Annual General Meeting of Odel PLC will be held at the Notes : Sri Lanka Foundation Institute, No. 100, Independence Square, Colombo 7 on Tuesday, 1. A member entitled to attend and vote at the meeting is entitled to appoint a Proxy 6 August 2013 at 11.00 a.m. to attend and vote instead of him/her. Such Proxy need not be a member of the Company. AGENDA 1. To receive and consider the Annual Report of the Board of Directors on the State of 2. A Form of Proxy accompanies this notice. Affairs of the Company and the Audited Consolidated Financial Statements for the year ended 31 March 2013 with the Report of the Auditors thereon. 3. The completed Form of Proxy should be deposited at the Registered Office of the Company, No.475/32, Kotte Road, Rajagiriya not later than 48 hours before 
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the time appointed for the meeting. Company and authorise the Directors to determine their remuneration.

3. To authorise the directors to determine contributions to charities.

By Order of the Board of Directors of Odel PLC

S S P CORPORATE SERVICES (PRIVATE) LIMITED SECRETARIES

Colombo 29 May 2013

:::2'(//. 127(6

:::2'(//. 127(6

:::2'(//. )2502)352;<

I/We* ...... (please indicate full name) bearing NIC No...... of ...... being a member/*members of Odel PLC hereby appoint.

Mr. Ruchi Hubert Gunewardene of Colombo or failing him Ms. Otara Del Gunewardene of Colombo or failing her Mr. Sanjay Sumanthri Kulatunga of Colombo or failing him Mr. Paul Topping of Colombo or failing him Mr. Atulugamage Damian Eardley Ignatius Perera of Colombo or failing him Mr. Datuk Cheng Yoong Choong of Malaysia or failing him Mr. Raymond Teo Kheng San of Malaysia or failing him Mr. Koh Huat Lai of Malaysia or failing him Mr. Hia Ngee Yeow of Malaysia or failing him (Alternate to Director Mr. Datuk Cheng Yoong Choong)

Mr/Ms...... (please indicate full name) bearing NIC No...... of ...... as my/*our Proxy to represent me/*us and to vote as indicated below on my/*our behalf at the Annual General Meeting of the Company to be held on the 6 August 2013 and at any adjournment thereof and at every poll which may be taken in consequence of the aforesaid Meeting.

FOR AGAINST

1. To receive and consider the Annual Report of the Board of Directors on the State of Affairs of the Company and the Audited Consolidated Financial Statements for the year ended 31 March 2013 with the Report of the Auditors thereon.


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Directors to determine their remuneration.

3. To authorise the Directors to determine contributions to charities.

As witness my/our hand/this ...... day of ...... Two Thousand and Thirteen.

Signature ......

Note: Instructions as to completion appear on the reverse hereto. Please delete the inappropriate words, and mark ‘X’ in the appropriate cages to indicate your instructions as to voting.

A proxy need not be a member of the Company.

:::2'(//. INSTRUCTIONS AS TO COMPLETION OF FORM OF PROXY 1. Kindly perfect the Form of Proxy by filling in legibly your full name and address, your instructions as to voting, by signing in the space provided and filling in the date of signature.

2. Please indicate with a ‘X’ in the cages provided how your proxy is to vote on the Resolutions. If no indication is given the Proxy in his/her discretion may vote as he/she thinks fit.

3. The completed Form of Proxy should be deposited at the Registered Office of the Company, No.475/32, Kotte Road,Rajagiriya not less than 48 hours before the time appointed for holding the meeting.

4. If the form of proxy is signed by an attorney, the relative power of attorney should accompany the completed form of proxy for registration if such power of attorney has not already been registered with the Company.

Note: If the shareholder is a Company or body corporate, Section 138 of the Companies Act No. 07 of 2007 applies to shareholders of Odel PLC and Section 138 provides for representation of Companies at meeting of other Companies. A corporation, whether a Company within the meaning of this Act or not, may where it is a member of another corporation, being a company within the meaning of this Act, by resolution of its Directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company. A person authorised as aforesaid shall be entitled to exercise the same power on behalf of the Corporation which it represents as that Corporation could exercise if it were an Individual shareholder of that other Company.

:::2'(//.