ANNUAL REPORT 2018 Contents

Vision, Mission, Quality Policy,Health, Safety and Environmental Policy 02 Corporate Profile 03 Financial Highlights (Company) 04 The Operational Impact of 365 days 05 Chairman’s Review 06 Managing Director / CEO’s Review 09 Board of Directors 12 Corporate Management 15 Financial Review 18 Corporate Governance 22 Risk Management 27 Shareholder Information 31

Financial Report Financial Calender 2018/2019 35 Annual Report of The Board of Directors on the Affairs of the Company 36 Related Party Transactions Review Committee Report 41 Statement of Directors’ Responsibilities 42 Chief Executive Officer’s and Chief Financial Officer’s Responsibility Statement 43 Independent Auditors’ Report 44 Statement of Profit or Loss and Other Comprehensive Income 48 Statement of Financial Position 49 Statement 0f Changes In Equity 50 Statement of Cash Flows 52 Notes to the Financial Statements 54 Ten Years Financial Summary 102 Notice of Annual General Meeting 103 Form of Proxy 107 Corporate Information Inner Back Cover “As we look back on the year under review, we acknowledge the rough seas that tested our skills and leadership, was instrumental in forging new bonds, and helped us discover ventures that strengthened our company to achieve our targets. We are celebrating our journey while also being grateful to all those who made our big plans become a reality and a resounding step in affirming our capabilities. While we sail to new destinations and unveil one of our largest projects to date, we are hopeful for the future and what it holds in store.

We are on board for a year that will reap much in terms of growth and progress, as we lay the keel for a new course towards more fortuitous waters.” 02 COLOMBO DOCKYARD PLC | Annual Report 2018 • • • Colombo Dockyard PLC shall: location andstrive to protect theenvironment inaccordance with applicableLegal &other requirements. Colombo Dockyard PLC iscommitted to provide ahealthy andsafe working environment at itsevery work Health, Safety andEnvironmental Policy • • We are committed to; Quality Policy • • • • We strive: Mission all our stakeholders inasocially responsible manner. We pursueexcellence andsuperior performance inall what we doto enhance thelong-term interests of Vision

through aneffective management system. Set H reuse of waste. commitments includingreduction of natural resource consumption through reduction, recycle and Minimize pr environmental impacts. Pro Striv effective manner and, Satisfying our management system whilst complying with all applicablestatutory andregulatory requirements. To enhanc To achie To e E To bethemostcompetitive and viable businessentity inSouth Asia inShipbuilding,Shiprepairs, Heavy ngineering andalliedactivities: vide safe machinery, plant, equipment andcompetencies to prevent injury, ill healthand fficiently and effectively manage all our resources: e to exceed their expectations by continually improving theeffectiveness of our quality ealth Safety andEnvironmental objectives, analyse outcomes andcontinually improve processes ve sustainablegrowth: e theinterests of our Stakeholders, andthereby contribute to thepursuitof our vision: obable impactsto theenvironment through pollutionprevention andother specific customers by consistently understandingandmeeting their requirements inacost building techniques andrepairs, that have helpedus carve outour own nicheinthisindustry. This hasresulted inimproving our capabilitiesof effecting difficultandsometimes uniqueprocesses, ahead of thoseestablished intheSouth Asian region. them, pioneeringfeatures inthisregion) as well asour processes, give usacompetitive stance that isfar Company ingoodstead. The emphasisonabsolute quality and theinfusion of green initiatives (someof Colombo Dockyard’s nichepositioninbuildingsomeof the world’s mostunique vessels holdsthe People Focused Environmentally Friendly Being Customer Centric Innovation Flexibility Five core values that have helpedColomboDockyard initsodyssey: the Asian region, our differentiation liesinthe way we dobusiness. empting trends andpreparing for transformation. While theCompany remains mediumscaleship yard in Colombo Dockyard, inexistence for over four decades,continues to keep itseyes onthehorizon, pre- facilities. operates four graving dry docks with amaximumcapacity of 125,000DWT and extensive repair berth conduct both dry dockandafloat operations. ColomboDockyard, asastate of theartengineeringentity, the West, theMiddleEast, theFar East, as well as Africa and Australia, CDPLC hasastrategic advantage to CDPLC isconveniently located within theportof Colombo,thehubof all major shippinglanesconnecting a licensed enterprise of theBoard of Investment of SriLanka. imports respectively. CDPLC isapublicquoted Company listed intheColomboStock Exchange. Itisalso Ltd inSingapore to deal with heavy engineeringfor local customers andasasupply channel for material subsidiaries namely Dockyard General Engineering Services (Pvt)Ltd andCeylon Shipping Agency (Pte) engineering andoffshore engineering with a Japanese collaboration. CDPLC Group includestwo as SriLanka’s largest engineeringfacility leadinginthebusinessof shiprepairs, shipbuilding,heavy Colombo Dockyard PLC (CDPLC) establisheditsoperations way backin1974 andat present operates Corporate Profile 03 COLOMBO DOCKYARD PLC | Annual Report 2018 04 COLOMBO DOCKYARD PLC | Annual Report 2018 Re Interest Cover (Times) Return On Assets (%) R Net Profit after Tax (%) Financial Ratios Market Capitalization Rs.Mn Mark Ne Earnings (Rs.) Inf Ne Share H To Total Assets Financial Employees Salaries&Benefits Local Company Company Ne Tax Pro Gross Pr Local Export Re H Shipbuildings Ship Repairs Revenue Results f Financial Highlights (Company) eturn OnInvestment (%) eavy Engineering tal Liabilities ormation Per Ordinary Share turn OnEquity (%) t Assets (Rs.) t Cash&Equivalents t Profit after Tax fit before Tax ation et Value (Rs.) Value Addition Revenue olders’ Fund

ofit or the Year Position Value Addition % Value Addition venue

Rs. Mn 15,054 124.79 13,169 12,195 6,086 6,870 8,967 55.60 3,995 4,654 5,928 3,942 7,142 4,115 2018 2.01 877 974 145 371 172 0.4 0.3 (27) 1.0 1.6 1.1 33

Rs. Mn 16,7 12,052 122.99 11,614 6,038 8,838 88.50 6,359 7,867 4,642 5,943 6,102 4,193 3,716 (1.98) 1,445 2017 (0.9) (143) (1.6) (1.6) (1.8) 438 (1.2) (69) (73) 05 34 71

Change Rs. Mn (2,364) (1,651) 1,040 1,781 (568) 1,117 3.99 (226) (527) 300 288 536 832 245 (33) 461 581 129 3.2 2.3 2.2 (15) 1.9 1.9 42 (1) 2

200.00 422.54 201.52 191.76 (37 122.22 118.7 (37 (11.35) (39.3.) (6.08) (9.88) 22,64 335.6 10.99 (0.25) (2.94) 207 201.4 13.78 17 122.4 60.9 9.27 1.46 1.46 .18) .17) .04 5.0 % .2 5 Strategic Initiatives deliver Results inKey Operational Highlighting Figures. Commitments to Company Vision andCore Values andSuccessful Execution of 16,000 The Operational Impactof 365days 12,000 8,000 4,000 during 2018. had few employee resignations both locally andglobally, we have Despite many economic downturns last year. against Rs.12.0Bnrecorded for total revenue of Rs.13.2Bnas The Company managedto reach 0 Total Revenue (Rs.Mn) Rs. Employee Retention 99.5 Total Revenue 1514 13 16 17 18 Bn % 600 800 400 400 200 200 0 Profit after tax(Rs.Mn) 1514 generated Shipbuildingrevenue. This represents 100%foreign was over 92.6%of thetotal Revenue. Export earningsgenerated in2018 compared to 145recorded for 2017. ship-repair jobsduringthe year Successfully completed 159 159 Completion of ShipRepairs 16 17 Foreign Revenue 18 93 Repairs 20,000 25,000 10,000 15,000 5,000 % 0 Total Assets (Rs.Mn) 1514 16 17 Rs. 50% local value additions. Company operation generates over 18 Subcontract employees. Project basis, Trainees and employees includingPermanent, employment for over 3,000 The Company provides direct Local ValueAddition Direct Employment 3,000 7,142 12,000 8,000 4,000 Shareholders Funds (Rs.Mn) 0 1514 16 17 Mn 18 05 COLOMBO DOCKYARD PLC | Annual Report 2018 06 COLOMBO DOCKYARD PLC | Annual Report 2018 Chairman’s Review Middle East, Japan, andSouthwest Asia etc.; size LNGstorage facilities inthemarket zone of Europe, mid size passenger boats,coastguard patrol boats,small support vessels, dredgers, and fishing boats etc.), small- support vessels (suchascable laying vessels, anoffshore of new shipbuilding market isaspecial construction/ the docksize restrictions for new shipbuilding. The target vessels with high value addition,small to mid-size dueto CDPLC isaimingatorders for high-density, high-tech the Japanese owner with Japanese currently under construction, isfor The cablelaying vessel, which is wider vessel market needs. chance with accommodating the to 23m,soasto get more business (No.2) was expanded from 18.5m dedicating new shipbuildingdock In 2018,thegate width of the Japan, and Southwest Asia etc. market zone of Europe, MiddleEast, size LNGstorage facilities inthe boats, coastguard patrol boats, small boats etc.), small-mid size passenger support vessels, dredgers, andfishing as cablelaying vessels, anoffshore construction/support vessels (such new shipbuildingmarket isaspecial for new shipbuilding. The target of due to thedocksize restrictions value addition,small to mid-size density, high-tech vessels with high CDPLC isaimingat orders for high- In suchabusinesscircumstance, 2020. regulations to beimplemented from compliance with SOx emissioncontrol the depreciation of oil prices, and the offshore vessel market owing to the USandChina,downturn in due to thetrade frictionbetween Chinese economy was depressed was generally slacked. Becausethe In 2018thenew shipbuildingmarket Strategy and Our New Shipbuilding Global ShipbuildingOutlook General Meeting of theShareholders. December 2018for the36th Annual for thefinancial year ended31st of ColomboDockyard PLC (CDPLC) Report andtheFinancial Statements I ampleasedto present the Annual Dear Shareholders, significant epochintheexport strategy of SriLanka. of CDPLC’s export of high-tech vessel to Japanese customer, will become a vessel reputation would attract the worldwide market attention. Also, thefact and advanced shipbuildingcapability. We are quite confidence that thisnew CDPLC isableto differentiate other competing shipyards by highquality European design.By includingthisnew vessel into our construction record, Norwegian ship-designcompany, which isacutting-edgeandsophisticated flag, required highquality andadvanced function. The shipdesignismadeby facilities to improve the yard efficiency. and vessels are required to respond. We are continuously investing on yard customers. As thespecial works that SOx regulation by IMOisapplied in2020 We will make shiprepair promotion to theMiddle East, Europe and Asia completed 159shiprepairs, andrevenue was Rs.5,928Mn. able to maintain ahighlevel of achievement from 2017 to 2018.In2018,CDPLC The shiprepair sector hasbeenoutof thebad periodfrom 2013to 2016and was Ship-repair Sector Boats for SLPA was signedin1Q2019. 2018, which isscheduledto bedelivered in3Q2020.Contract for Two Pilot contract through the TOYOTA TSUSHO CORPORATION, Japan onMay 2nd, a Pilot Station Vessel for General Company of Ports of Iraq were signedthe construction andto bedelivered mid-2Q 2019. And aBuoy Tender Vessel and The CableLaying Vessel to KOKUSAI CABLE SHIP Co, Japan isnow under Shipbuilding Sector Board hasproposed afinal dividendof Rs.1.50per share. its profits, andthegroup performance. For the year under review, theCDPLC moreover, DGES, thesubsidiary company of CDPLC, hasalsosteadily improved a positive performance dueto theelimination of unprofitable project. And with cancellation of offshore shipsin2015.In2018, we were ableto record CDPLC continued itsdeficit for thethird consecutive year dueto lossesincurred Finance Results andDividend Colombo Dockyard Performances last years. been recorded with positive financial results with growth prospectus over the Ltd) and51%holdingCSA (Ceylon Shipping Agency Pte Ltd -Singapore) have Both fully owned Subsidiary DGES (Dockyard General Engineering Services Pvt Subsidiary Companies its total volume upto Rs.371. the new business area for CDPLC. During 2018, the sector has been able to grow CDPLC delivered theunderwater restaurant structure for Maldives, andthisis Heavy Engineering Sector 07 COLOMBO DOCKYARD PLC | Annual Report 2018 08 COLOMBO DOCKYARD PLC | Annual Report 2018 26th February 2019 Chairman Dr. Toru Takehara globally renowned products andservices. continuous support andcooperation as we continue to channel local efforts into support extended to theCompany duringthe year andIlookforward to their of Directors, Employees, Customers andtheNational Authorities for the I would like to extend my gratitude and warm appreciation to all theBoard Acknowledgements company structure. Responding to suchfuture demandof national projects, DGES will diversify their generation facilities, Airport expansion andColomboPort expansion, etc. proposing projects suchasLight Rail Transit, Renewable Energy, LNGpower The Ministry of Megapolis andother related ministriesandagenciesare Kandy Bus Terminal, damrepairs, floodcontrol, Kelani bridge,etc. projects andrehabilitation of infrastructure. The mainon-goingprojects are the DGES ismainly undertakingdomestic works asgovernment construction Chairman’s Review Managing Director /CEO’s Review like to express my most sincere gratitude to all of them result of tireless efforts by our employees, andI would challenges faced under severe global competition, isa The goodperformance of theCompany, despite many 09 COLOMBO DOCKYARD PLC | Annual Report 2018 10 COLOMBO DOCKYARD PLC | Annual Report 2018 Engineering projects makingthe year grab asignificant scaleof Heavy regional tourism sector, we could the infrastructure inthe country and prevailing businessdevelopments in in September 2018.Under the reputed Japanese client asscheduled the 113mCableLaying Vessel for a Dockyard PLC as well asSriLanka, project undertaken by Colombo prestigious andbiggestshipbuilding with thetimely launchingof the hits. However, we have succeeded with thelow revenue with double reduced the value additiontogether hungry shipyard surrounded, thus also very muchcompetitive with 3 for approximately 1month. It was dock number 4anddry docknumber due to nonoperational periodof dry about 7.5% againsttheprevious year repair turnover inUS$term dropped heavy engineeringsectors. Our ship in newbuilding, afloat repairs and works, but with someimprovements to plannedcritical maintenance a low volume of shiprepairs owing year asImentioned last year, with We have passed another susceptible the year2018 Company Performance during gratitude to all of them. like to express my mostsincere efforts by our employees, andI would competition, isaresult of tireless faced under severe global Company, despite many challenges The goodperformance of the year under review. exchange rate fluctuation over the including theunprecedented gainon contributed to thismoderate result, years downturn. All BusinessUnits with positive financial results after 3 demonstrating asignificant year subsidiaries for the year 2018, performance our Company and I ampleasedto report onthe Managing Director /CEO’s Review years. steady recovery duringthepast3 a marginal profit showing aslow but made pros andcons for endingit with not asexpected, theenvironment company duringthe year 2018 was Though, theperformance of the Services. Dockyard General Engineering support of thesubsidiary company, considered to beenhance with the and Afloat Repair sectors have been sector. Similarly Heavy Engineering steps to develop thefacilities for this and thecompany hastaken few Sector with muchattention today need to lookat Stable ShipRepair was ontop. Therefore, itisacritical high thedemandfor offshore market the bestera when theoil price was shipbuilding sector duringit’s oneof has correctly invested to develop a stabledemand.However, company ship repair israther maintaining with seasonal businesspatterns whereas shipbuilding demandisfluctuating in decades, we have observed that the Going through ahistory of over 4 year. growth compared to thepreceding performed well, achieving amoderate newly developed Afloat repair sector Engineering Sector. Furthermore, the on top since inception of theHeavy could signacontract to buildtwo Cable laying Vessel, thecompany In additionto theexecution of the looked into. therefore new market strategies were Shipbuilding Sector significantly and unpredictable future. This affected our in a vulnerable situation with an badly hitby theoil price isstill The offshore market, which was Shipbuilding Business global clients. boosting strategies to attract the system inthecompany are some and implementation of Japanese 5S processes, training of employees Developments of engineering been enhanced toward same. vessels andmarketing approach has market which looksfor low cost also not neglected theSouthIndian western world inthenear future. Itis create businessopportunitiesto the during the year. Suchefforts will of newbuilds to Japanese clients the supportof successful acquisition penetrate into European market with Special attention hasbeenpaidto the region. now thecompany is very muchupin confidence inthehighendclients and made significant role for earningthe of buildingto theoffshore sector safety standards with theexperience Improvement of the yard’s quality and February 2019. the shipbuildingcontract on1stof competitive tender and we could sign Authority through anInternational Pilot Boats to SriLanka Ports build two numberssophisticated achievement, winning theaward to October 2018. Also it was yet another laying of theprojects were heldin a group company of Toyota. The keel and investing company which isalso Toyota Tsucho Company, atrading Iraq, through themaincontractor the vessels to General Company of Port of avenues for intended implementation forward to bright future with opening facilities inthe world are looking and value addition. All theshiprepair competition andreduced volume the year of 2018 was hit with high Ship Repair sector performance over Ship Repair Business identified therequirement of CDPLC As themanagement hascorrectly as well. creating inthe neighboringcountries plans are to cater thedemands thinking it’s businessdevelopment Control etc. Also themanagement is Supply, Fuel Storage andFlood Fisheries, Agriculture, Irrigation, Water Roads & Transportation, Tourism, in areas suchasPower &Energy, businesses with local developments DGES will have more potential Engineering Services Dockyard General Colombo. to meet low cost repair facilities in with Marine product manufacturers venture agreements will besigned some Indianprivate owners. Joint hull repair capacitiesinorder to attract hydro-blasting andto improve the as well asto spendfor developing expand theafloat repair business in progress. Company is willing to in thecompetitive market isalso facility for enhancingthebusiness Establishing aReconditioning area at Dock4northside. Dolphin Pier andextended working facilities at Dock3,GuidePier 1and crane at Dock4North, enhancing development are installinganew 70T expenditures plannedfor shiprepair during 2019.Someof thecapital improve infrastructure facilities therefore, make arrangements to role players seemto bebusy and available when the world’s bigger has identified theopportunities opportunities to come. Management seriously thought of grabbing the shipbuilding projects, company has in installingsuchsystems in (BMT). While gathering the experience 2020 andBallast Water Management of IMOregulations for Sulphur Cap in SRsector timeto time. engineering projects anddeployment Afloat repairs, shipbuilding,heavy manpower to DEGES andCDPLC for company will support with it’s trained Technical Services (DTS). This formed by thenameof Dockyard subsidiary company to DGES was retain within around, a100%owned trained multi-skilledmanpower to in thefuture. of shipsgoing to bebuiltor operated exact equation of typesandnumbers supply thusnoonecould predict the naturally decidethedemandand on board theships. This trend will renewable energies (solar and wind) use of batteries, duel fuelsandother low fuel consumption, increasing will have to selectmachineries with found it’s asuccess. Shipowners to operate within their portsand already started unmannedships Control Area (ECA). Norway has Design Index (EEDI)andEmission Treatment (BWT), Energy Efficiency be influenced with Ballast Water Future shipbuildingdemandmay in different regions inthe world. controlling theenvironment factor the stringent maritimeregulations low cost of operation andaiming is drastically risingconsidering the Also thedemandfor high-tech ships have controlled thenew shipbuilding. concerned, many oversupply vessels As far asglobal shipbuildingis Global ShippingIndustry the CDPLC with competitive prices. facilitate their product development in Equipment Manufacturers (OEM) to are takingplace with Original local specialized projects. Discussions opportunities while only limiting the sector, specially to lookfor global with theHeavy Engineering CDPLC hasalready commenced Heavy Engineering them. to another productive work year with our loyal customers and lookforward cooperation duringthe year. Ithank Lanka Navy and our bankers for their the Department of Customs, theSri thank theBOI,Ports Authority, including employees. I would like to during the year andall stakeholders Board of Directors, for their guidance Onomichi Dockyard of Japan, andthe specially our mainshareholder the by thanking our shareholders, I would like to conclude my message ships andshippingservices consumption, demandof eco-friendly economic growth, risingenergy to increasing seabornetrade and market by 2%during2019-2013 due be anincrease inglobal shipbuilding Overall, experts thinkthat there will the demand. scrubbers etc are costly solutionsfor and supply terminals, installation of at reasonable costs, LNGstorage Development inlow sulphur fuels proactive measures immediately. are unableto forecast andto take at what isgoingto happenasthey regulations. Poor countries will look IMO Sulphur Cap2020andBMT infrastructure facilities for facing the already done,thedevelopment of countries to plan,somehave It istimefor many developed Colombo 26th February, 2019 Managing Director/ CEO D.V Abeysinghe

COLOMBO DOCKYARD PLC | Annual Report 2018 11 12 COLOMBO DOCKYARD PLC | Annual Report 2018 Director A. WadoodSaadi M. Director K. Utsumi Chairman Dr. Toru Takehara Board of Directors Vice Chairman Sarath DeCosta Director Wickramathilake H. A. R.K. Director Lalith Ganlath Managing Director/CEO D. V.Abeysinghe Director Karunaratne H. A. Director T. Nakabe Society. Member -SriLanka Japan Friendship Lanka Technical Co-operation and Committee, Life Member - Japan Sri Lanka - Japan BusinessCooperation Also serves as Vice President of Sri and Director Waters Edge Limited. Shipping Agency (Pte) Ltd Singapore Industries PLC., Director Ceylon Corporation Japan, Director of Central President Imperial Trading & TIVOLI Group of Companies, and Managing Director of AMANO in June 1993.Present Chairman Appointed to theCDPLC Board in Osaka, Japan. Former Consul General for SriLanka Dip. Foundry Engineering Vice Chairman Sarath DeCosta Singapore. Ceylon Shipping Agency (Pte) Ltd, Engineering Services (Pvt)Ltd and Subsidiaries, Dockyard General September 2014.Director of CDPLC Dockyard PLC (CDPLC) Board on01st He was appointed to theColombo PACECO CORP. inCalifornia, USA. 12 years asthePresident &CEO of Shipbuilding Co.,Ltd, in Japan, and Systems at MitsuiEngineering & Transportation Machinery and the engineer of SeaContainer He has worked over 25 years as University,Osaka Japan. Japan. Bachelor -Engineering Science, Nagaoka University of Technology, Ph.D. inMechanical Engineering, Chairman Dr. Toru Takehara Development Board. Conservation andDirector of Industrial - Ministry of Wild Life Resources Member of Advisory committee Board of Investment of SriLanka, Health), Special Envoy / Advisor- Development Fund (Ministry of Hospital), Trustee -National Health of Neurosurgery Trust (National of SriLanka, Patron -Department Japan for theBoard of Investment Served asaRepresentative in Asia Committee. Committee of NKK andDNV GL South Committee, theIndian Technical a member of LR South Asia Advisory Development Board SriLanka. He is on Boating Industry formed by Export Member of the Advisory Committee Management & Consultancy Services, Singapore, Director of SriLanka Port Director of Ceylon Shipping Agency Engineering Services (Pvt)Ltd, Chairman of Dockyard General Currently holdspositionsasthe Managing Director/CEO. (CDPLC) Board on08/11/2016 asthe Appointed to ColomboDockyard PLC FIE(SL), FRINA(UK),MCPM(SL) B ScEngineering (Hons), CEng., Managing Director/CEO D. V.Abeysinghe Japan. Co., Ltd. Japan, Y MService Co.,Ltd. S.A. Panama, SaikiHeavy Industries Japan, OnomichiZosen International, Co., Ltd. Japan, Japan Steels Co.,Ltd. Co., Ltd. Japan, CosmoShipService Co., Ltd. Japan, Asahi Engineering kaisha Limited Japan, Asahi Sangyo related companies of Asaka Kosan He alsoserves asaDirector inthe date. Dockyard Co.,Ltd from 2009to upto finally asthePresident of Onomichi Managing Director (2007) and Managing Director (2005),Senior Director/Branch Manager (2003), as Deputy Branch Manager (2001), Onomichi Dockyard hehasserved in 2001.Duringhisoverall carrier in Dockyard asDeputy Branch Manager 1994-2001and Joined Onomichi He has worked for Fuji Xerox from Co., Ltd in Japan The President of OnomichiDockyard 2010 . Appointed to CDPLC Board inMarch Mount Ida College, MA,USA TamagawaUniversity, Tokyo,Japan B.A (British American Literature) Director T. Nakabe

COLOMBO DOCKYARD PLC | Annual Report 2018 13 14 COLOMBO DOCKYARD PLC | Annual Report 2018 Migration Facilitators (Pvt)Ltd. Investment Facilitators (Pvt)Ltd., Secretarial Services (Pvt)Ltd, Foreign GANLATHS andChairmanof Ganlaths June 1993andistheProprietor of Appointed to CDPLC Board in Solicitor(ACT Australia) (England and Wales) Barrister and Attorney-at-Law andNP, Solicitor Director Lalith Ganlath with theMercmarine Group. several other companies connected Ltd, Ceylon Eco Fields(Pvt)Ltd and (Pvt) Ltd, Ceylon Eco Spices (Pvt) (Pvt) Ltd, Royali Homes andLands Shipping (Pvt)Ltd, Royali Power Management Ltd, Mercantile Emerald Company PLC, Mercantile Marine 1995. Chairman,Mercantile Shipping Appointed to theCDPLC Board in Academy, Oslo Dip.in ShippingNorwegian Shipping FCA, B.Sc-Public Administration, Director H. A. R.K. Wickramathilake for 5 years upto thisappointment. Machinery &ElectricDesignSection 1989, and worked asthemanager of Dockyard Co.,Ltd. for 29 years since He hasbeenemployed Onomichi (University) in Japan. Hiroshima Institute of Technology Engineering, Faculty of Engineering, Degree inDepartment of Mechanical Mr. UtsumiholdsaBachelor’s Director K. Utsumi Board of Directors Chairman of theInstitute of Bankers Credit Information Bureau and Vice the Central Bank,Chairmanof the Investment Oversight Committee of Oversight Committee, Internal Payments Council,EPF Investment Stability Committee, National Chairman of theFinancial System October 2015.Presently, heisthe of SriLanka from May 2009to Committee of theCentral Bank Committee andMarket Operations Committee, Monetary Policy the Foreign Reserves Management Mr. Karunaratne was aMember of derivative products. to trade futures options andother the Monetary Authority of Singapore which heobtained thelicense from Financial Pte Ltd, Singapore, during President, PrimeRisk Monitoring, Man Refco Singapore Pte Ltd and Vice President, Fixed Income Department, Mr. Karunaratne served asa Vice Lanka. Chief Dealer of theCentral Bankof Sri Domestic Operations Department and of SriLanka, Additional Director, Director, Financial Intelligence Unit International Operations Department, Advisory Audit Committee, Director, Secretary to theMonetary Board and Secretary to theMonetary Board, by himhave been Assistant Governor career someof thekey positionsheld overseas. Duringhisthirty three years services sector inSriLanka and extensive experience inthefinancial the Central Bankof SriLanka andhas functioning astheDeputy Governor of Mr. H A Karunaratne iscurrently Central Bankof SriLanka Deputy Governor Karunaratne H. A. management. forums onreserves andportfolio at various local andinternational Mr. Karunaratne isaregular speaker Chartered Accountants of SriLanka. a Fellow Member of theInstitute of the OhioUniversity, USA. He isalso Lanka andanM A inEconomics from University of Sri Jayawardenapura, Sri Administration degree from the of SriLanka. He holdsaBScBusiness Director A. WadoodSaadi M. Corporation PLC. Corporation Ltd, Lanka Hospitals Leasing PLC, SriLanka Insurance numerous companies includingSMB and functionsasaDirector of Corporate/Civil lawyer inColombo Currently, hepractices asa of Supreme Courtof SriLanka. University of London. Attorney-at-Law LLM (Corporate Law) King’s College, Chief Financial Officer P. D. GihanRavinatha (Ship Buildings) General Manager Lal Hettiarachchi Managing Director/CEO D. V.Abeysinghe Corporate Management Secretary Legal Consultant/Company Manori Mallikarachchi System Implementation) General Manager (Finance & M. Rohan DeSilva Administration) Resource Development & General Manager (Human Mangala DeSilva (New Construction) General Manager Thimira S.Godakumbura Managing Director/CEO (DGES) Ranil Wijeygunawardane Repair Business) General Manager (Ship K. B.P. Fernando (Supply ChainManagement) General Manager R. M. Vajira Rathnayake (Ship Repair Production) General Manager S.G. Senadeera

COLOMBO DOCKYARD PLC | Annual Report 2018 15 16 COLOMBO DOCKYARD PLC | Annual Report 2018 2016. appointing asMD/CEO in November Operating Officer in June 2016before the Senior General Manager/Chief capabilities. He was positionedas Shipbuilding andHeavy Engineering directly contributed for enhancing managerial positionsandhas Engineering divisionholding Shipbuilding andProjects & has served inShipRepair division, In hisoverall carrier in theCompany, Professional Managers, SriLanka. a member of the Institute of Certified of Naval Architectures, UK.He isalso a Fellow Member of Royal Institution Institution of Engineers SriLanka and and aFellow Member of the He isaCharted Mechanical Engineer Innoshima Shipyard Japan. Practical Training at HitachiZosen and Naval Architecture andaShipyard Shipbuilding, Repairing, Maintenance trainings including JICA training on experiences with several overseas He hasacquired qualifications and 02/12/1985. (today, ColomboDockyard PLC) on joined ColomboDockyard (Pvt)Ltd Mechanical Engineering in1985and Moratuwa, SriLanka inthefieldof Graduated from theUniversity of Managing Director/CEO. (CDPLC) Board on08/11/2016 asthe Appointed to ColomboDockyard PLC FIE(SL), FRINA(UK),MCPM(SL) B ScEngineering (Hons), CEng., Managing Director/CEO D. V.Abeysinghe Corporate Management Business) since 2015. of General member (ShipRepair & Commercial. He holdstheposition Repairs, ShipManagement, Invoicing Dockyard Plcinthesectors of Ship Engineer &therest at Colombo had beenat seaasaqualifiedMarine in thisfield.Outof which, 07 years He ishaving over 33 years of exposure II (Singapore) MBA (University of Colombo),DOT Class Business) General Manager (ShipRepair K. B.P. Fernando Japan Problems, under AOTS inNagoya, in Solving Human&Organizational Auditor certifed by LRQA. Trained Executives (UK).Qualifed asaLead of the Association of Business PIM Alumni Association andmember of theBar Association of SriLanka, and Administration. A life member of HumanResource Management Colombo Dockyard Plcinthefeild Has over 28 years of experience at CIM(UK), MABE(UK), Attorney-At -Law MBA (USJ),MLRHRM(Col), Dip.M. Administration) Resource Development & General Manager (Human Mangala DeSilva Institute of Management. Associate Member of theSingapore Advisory Board of thesamefaculty. and alsoamember of theIndustry the University of Kelaniya, SriLanka the Computingand Technology of board member of theFaculty of Currently servingasanexternal Agency (PVT) Ltd., Singapore. Manager of theCeylon Shipping Management. Served 03 Years as in thefieldof theSupply Chain 1996. Has over 22 years of experience Joined ColomboDockyard Plcin Practice) (ICLP &CCC, SriLanka). MBA (Australia), Dip.(ShippingLaw and B.Sc., (SriLanka), GDMM(Singapore), Management) General Manager (Supply Chain R. M. Vajira Rathnayake kothalawala Defense University. Lloyds Register and visiting lecturer of of South Asia Technical Committee of 1999. Currently serves asaMember Onomichi Shipyard Co.,Ltd Japan in Underwent a10months training at as asenior manager. Ship Buildingasanengineer as well fields of ShipRepair, ShipDesignand He hasserved over 24 years inthe MBA (PIM-USJ) B.Sc. Eng (Hons), C.Eng, MIE(SriLanka), General Manager (ShipBuildings) Lal Hettiarachchi (New Construction)since June 2018. his new positionasGeneral Manager during hiscareer inCDPLC before Management &Project Management management positionsinProduction Heavy Engineering, hehasheldsenior field of ShipBuilding,Repair & Gaining over 19 year experience inthe University of Sri Jayewardenepura. Graduate Institute of Management, Administration (MBA) from thePost Obtained Master’s Degree inBusiness Japan and Dry Dock World, UAE. He including inOnomichiDockyard, with local andoverseas training rich experience andknowledge Trainee engineer. He hasgained Dockyard PLC. since 2000as 1999 andstarted career at Colombo University of Moratuwa, SriLanka in Mechanical Engineering from the He obtained BSc.Eng. Degree in C.Eng. MIE(SL),MRINA (UK) B.Sc. Eng. (UoM), MBA (PIM-USJ), Construction) General Manager (New Thimira S.Godakumbura (NUS). at National University of Singapore Trained inGeneral Management of CertifiedProfessional Managers. Business Executives (UK),Member India. Member of the Association of of Chartered Financial Analyst Business Management from Institute Management Accounting. Master of experience inthefieldof Finance and in 1988andhasover 30 years of Joined ColomboDockyard PLC (CIMA),MABE (UK),MCPM MBA University of India,DipMA System Implementation) General Manager (Finance & M. Rohan DeSilva Nippon KaijiKyokai (ClassNK). of theIndian Technical Committee of Kingdom. He isservingasamember Institution of Naval Architects, United a cooperate Member of theRoyal Institution of Engineers SriLanka and and acooperate Member of the He isaCharted Mechanical Engineer Ltd., Singapore. of theCeylon Shipping Agency (PVT) than two years service asManager exposure inthisfieldincludingmore month). He ishaving 24 years of training from JASTECA in Japan (one and got oneof the valuable overseas Maintenance indifferent institutions Ship Repair, ShipBuildingand Yard overseas training related to the successfully completed local & Colombo Dockyard PLC. He has year 1995asa Trainee Engineer at 1995 andstarted career inthesame from theUniversity of Moratuwa in the fieldof Mechanical Engineering He hascompleted hisfirstdegree in Practice, Dip.InPM(UoM) B.Sc. (Eng), Dip.InShippingLaw & Production) General Manager (ShipRepair S.G. Senadeera Jayawardenapura (PIM) of Management, University of Sri MBA from Postgraduate Institute Lanka. He hascompleted his of Chartered Accountants of Sri Fellow member of theInstitute audit sector and8 years at CDPLC. field of Finance, with 8 years at Over 16 years’ experience inthe FCA, MBA (PIM-USJ) Chief Financial Officer P. D. GihanRavinatha University of Singapore (NUS). for Managers conducted by National Sri Lanka/ACCA (2011),BusinessLaw – Study program conducted by CA organized by AOTS Japan (2011),IFRS Corporate Management Program GL –South Asia Committee. Exposure: Advisory Committee, Member of DNV of Lloyd’s Register –South Asia Exporters of SriLanka (NCE),Member Member of National Chamber of Services (Pvt)Ltd. Committee Port Management &Consultancy (Pte) Ltd., andDirector of SriLanka Director of Ceylon Shipping Agency Engineering Services (Pvt)Ltd., PLC, Chairman of Dockyard General Director/CEO of ColomboDockyard Dockyard PLC. Served asManaging of which 20 years at Colombo of Finance &General Management Over 34 Years’ experience inthe field Investment &Risk Management (IBSL) FCA, PDM(Sri J.),Dip in Treasury Managing Director/CEO (DGES) Ranil Wijeygunawardane Compliance. in thefeld of Legal, Secretarial & 22 years of experience at CDPLC Joined CDPLC in1996.Has over Attorney-at-Law &Notary Public Secretary Legal Consultant/Company Manori Mallikarachchi

COLOMBO DOCKYARD PLC | Annual Report 2018 17 18 COLOMBO DOCKYARD PLC | Annual Report 2018 environments. regulation on shippingand currency fluctuations andinternational exploration, shippingfreights charges, economic conditions, oil andgas our businessare global andregional Majority of thekey factors influencing over 25countries. and heavy engineeringservices to activities of shiprepairs, shipbuilding base through itscore business the Group serves aglobal customer (2017 -Rs.18,202.4Mn)as at end 2018, With total assets of Rs.16,989.5Mn sustainable performance. heavy engineeringbusinessto deliver in theshiprepairs, shipbuildingand Colombo Dockyar Working Capital Re Gearing Ra Ne Dividend P Financial R Earning Per Share (Rs.) In Ne Shareholders T Balance Shee Total Assets Pr Gross Pr Revenue Income S For the Year (Rs.Mn) Group Financial Highlights Financial Review otal Liabilities terest bearingborrowings ofit after Tax turn on Total Assets (%) t Assets Per Share (Rs.) t Cash&Equivalent ofit

tatement er Share (Rs.) tion (%) atios

’ Funds t

to Assets (%)

d PLC (CDPLC), is

operations. the profitability of theCompany’s the Group’s financial condition or Management’s opinion,determines locations, noonefactor, inthe customers inmany geographical services to abroad spectrumof providing arange of products and As theGroup’s operations involve increase onMaterials sales. on Shipbuildingrevenue and84% Engineering revenue, 14%increase attributed to 144%increase onHeavy 2,017.5 Mn) againstlast year. mainly 2018 showing agrowth of 15.6%(Rs. 12,929.0 Mn)for thefinancial year of Rs.14,946.5Mn(2017 -Rs. The Group achieved a total revenue Revenue Financial Performance Group

16,989.5 14,946.5 10,220.2 6,692.5 4,914.4 1,344.3 2,712.3 143.4 337.4 2018 0.00 36.6 4.61 1.50 2.0

of 5.0%. to Rs.11,614.0Mnshowing agrowth 2018 was Rs.12,195.0Mncompared Total export revenue recorded for operations. from shipbuildingandshiprepair the revenue generated mainly The group’s export revenue includes Export Revenue compared to 46.7% recorded last year. has become shipbuilding with 43.5% revenue contributor for thegroup subsidiary companies. The major engineering &material salesfrom repairs, shipbuilding,heavy Company’s core activity of ship Group revenue includesthe Group Revenue Segment Contribution to the 12,929.0 18,202.4 9,890.6 5,058.6 3,496.6 1,766.8 8,251.9 138.6 2017 0.00 26.0 0.35 34.8 1.50 0.1

Change (1,212.9) 1,559.4 2,017 (422.5) (144.2) 346.3 784.3 311.4 0.00 4.8 4.3 1.8 1.9 .5 -

1886% 1198% 1217% -24% 22% 16% 19% -7% -3% 0% 0% 5% 3% 3% % growth compared to the year 2017 under review representing a201.1% tax of Rs.144.6 Mnduringthe year The Company recorded aprofit after Profit AfterTax to 2017. sale of steel scrap income compared to theincrease onexchange gainand 449.5% (Rs.853.6Mn) was mainly due This unprecedented improvement of Rs. 190.3Mnrecorded for last year. Rs. 1,024.1Mnduringthe year from interest income hasincreased to Other Income of theGroup excluding Other Income to 2018. Companies performances compared mainly from shiprepair andSubsidiary the positive contribution recorded during 2018 was primarily dueto of Rs.286.6Mn. The improvement year compared to last year’s profit recorded asRs.446.0 Mnduringthe depreciation andamortization The Group’s earningsbefore tax, Depreciation Earnings Before Tax and proceeds. impact ontheconversion of USdollar the SriLankan Rupee continued to The depreciation &appreciation of accounting for 100%of total exports. continued be the USdollar, The dominant currency for export under 2018. of thetotal export shiprepair revenue contribution of 60.6%(Rs.3,590.8.Mn for theshiprepair sector, with a to bethemajor overseas market However, theIndianmarket continued by India with 27.3% (Rs.3,590.8Mn). the total export revenue followed Japan with 49.7% (Rs.6,544.9Mn)of Company duringthe year becomes The major overseas market of the projects. due to cancellation of shipbuilding during 2015-2017 three years periods the continuous lossesrecorded Company was ableto break through loss of Rs.142.5Mn.Duringthe year export earnings. 1.0% to SriLankan annual industrial business entity contributes average Colombo Dockyard PLC asasingle Universities. such asNAIT, ATI, IET andlocal training facilities for National Institutes employments and over 400 on the job Company provides over 3,000direct Mn (53.6%)recorded for 2017. Mn (54.2%)compared to Rs.6,102.0 by the Company was Rs.7,142.1 The local value additiongenerated other non-operating income. ship repairs, heavy engineeringand revenue generated from shipbuilding, Mn). This ismainly comprised of was Rs.4,654.3Mn,(2017- Rs.4,192.8 addition generated by theCompany import substitutes The direct value generated further Rs.974.5 Mnas 12,195.0 Mn(over US$75 Mn)and generated direct foreign revenue of The ColomboDockyard PLC has Economy Contribution to SriLankan movements, therupeedepreciated 2019. Reflecting cross currency during the year upto 28 January by 0.6per cent against theUSdollar The SriLankan rupeeappreciated currencies. depreciating againstother major against theUSdollar while also rupee depreciated by 16.4per cent During the year 2018,theSriLankan Exchange Rates during thisperiod. for theeuro andtheIndianrupee against other major currencies except 2017. 2018 compared to Rs.12,291.3Mnin has reduced to Rs.10,309.7 Mnin Current assets of theCompany too Current Assets Rs. 1,652.1Mn(24.4%)againlast year. Trade andOther Receivable by This reduction ismainly dueto drop in Rs. 16,705.0 Mnrecoded for 2017 . and shows adecrease of 9.8%to from December 2018 were Rs.15,053.6Mn The Company’s total assets asat 31st Total Assets Financial Position investments. productivity improvement related 770.4 Mnin yard development and year. The Group invested atotal of Rs. against Rs.178.0 Mnfor previous was Rs.315.5Mnduring 2018,as Net cashused in investment activities last year. capital changes when compared with previous year, dueto positive working operations increased compared to the previous year. Cashgenerated from compared with Rs.474.7 Mninthe changes stood at Rs.879.2 Mnin2018 operations before working capital Cash generated from theGroup’s Cash flow figure of Rs.5,623.6Mn. Mn under review asagainstlast year during the year to standat Rs.5,065.3 Company shows amarginal reduction The net working capital of the Working Capital

COLOMBO DOCKYARD PLC | Annual Report 2018 19 20 COLOMBO DOCKYARD PLC | Annual Report 2018 Sri Lanka Accounting Standards. The financial reports onpage48to 101 have beenprepared incompliance with and disclosure. reporting with providing themostupdated developments infinancial reporting Colombo Dockyard Plciscommitted to adopting thebestpractices infinancial Financial Reporting of 50.50on25thSeptember February 2018. recorded thehighest price of Rs.93.50on2nd January 2018andlowest of price Stock Exchange asat 2018-12-31 compared with 2017-12-31. The share price of 88.50. A 3.1%declinetrend isnoted in All Share Price Index intheColombo 55.60, showing anegative growth of 37.2% compared to last year’s closingprice The share price of theCompany asat 31stDecember 2018recorded at Rs. Performance of theShare level continues to beat zero level points, from 2013. continued to mainat zero level asat 31stDecember 2018. The Company gearing substantial amount of short-term loansduringthe year. Group’s long-term debts 784.6 Mn)reduction against2017. This was primarily dueto there-payment of Group’s total debt was Rs.2,712.3 Mnasat balance sheet date, a22.4% (Rs. Debt current liabilities(34.3per cent). shareholders funds(60.6 per cent), non-current liabilities(5.1per cent) and compared with Rs.18,202.4Mnintheprevious year. Assets were fundedby Total assets of theGroup standsat Rs.16,989.5Mnasat 31stDecember 2018, Capital Structure compared to Rs.122.99recorded for last year. the Company marginally improved to Rs.124.79 asat 31stDecember 2018 In line with capacity andfacility expansion, thenet assets value per share of Net Assets Value per Share 5,058.6 Mn. was Rs.4,914.6Mn, which isamarginal reduction againstlast year figure of Rs. The Group’s cashandanequivalent at theendof 31stDecember 2018 Financial Review 13,681/- for 2017. 105,327/- againsttheprofit of SGD The CSA recorded anet profit of SGD Rs. 180.0Mnprofit reported for 2017. Rs. 216.7Mn for 2018compared to DGES hasrecorded anet proft of Singapore with 51% holding. Shipping Agency (Pte) Ltd (CSA) 986.9 Mn(SGD8.2Mn)from Ceylon Services (Pvt)Ltd. (DGES), andRs. Dockyard General Engineering from wholly owned Subsidiary of Mn represented by Rs.1,739.8 Mn companies recorded asRs.2,606.9 The total revenue from subsidiary Subsidiaries Performance the company’s performance. holders to make afair assessment of shareholders andall other take comprehensive reporting hasenabled and annual financial statements. Our to timely delivery of both quarterly The Company gives highpriority Our Achievement To R To Go To L To Shar T Value Distribution % Value Distribution - asR - asDepreciation Re To Go To Lenders as Interest T To Employees asRemuneration &Benefits Distributed asF Value Value A Less: Costo purchased from External Sources To Other Inc Opera Hea Shipbuildings Offshore M Ship Repairs Statement of Value Addition (Company) o Employees asRemuneration &Benefits o Shareholders asDividends tal Revenue tained intheBusiness vy Engineering enders asInterest etained intheBusiness vernment Taxes vernment Taxes ting Revenue Addition asa%onRevenue eholders asDividends evenue Reserves ddition ome arine f Materials &Services

ollows:

13,169,000 14,229,224 6,869,782 4,654,389 4,654,389 1,060,224 3,941,926 9,574,835 5,927, 420,086 100,641 107, Rs. 000 371,477 36,195 47, 84.7% 32.7% 2018 9.8% 2.3% 2.2% 1.0% 788 753 741

12,052,628 12,254,444 6,038,106 8,056,225 5,943,130 3,716,520 4,198,219 4,198,219 (250,309) Rs. 000 153,209 107 201,816 411,733 59,278 71,392 88.5% 34.3% 2017 3.6% 3.8% 2.6% ,788 1.4%

COLOMBO DOCKYARD PLC | Annual Report 2018 21 22 COLOMBO DOCKYARD PLC | Annual Report 2018 institutionalized. ethics at workplace have been disclosures, internal controls and towards improving transparency, governance systems andpractices statutory requirements, effective In additionto comply with the and theColomboStock Exchange. Exchange Commissionof SriLanka requirements of theSecuritiesand Chartered Accountant SriLanka, the of BestPractice of theInstitute of 2018 with reference to theCode and activitiesfor thefnancial year corporate governance processes This report outlinestheCompany’s and sustainability. enhancing corporate accountability governance processes play in role that clearly defined corporate Company recognizes theimportant to protect shareholder value. The standards of corporate governance is committed to achieving high Colombo Dockyard PLC (CDPLC) Under theguidance of itsBoard, Overview for itsshareholders. preserve long-term value andreturns concerns that will enableusto and internal controls are prime sound system of policies,practices and employees, supported by a commitment of itsBoard members the professionalism, integrity and value. The Group firmly believes that protecting andenhancingshareholder model to reflect itsstrong belief in maintenance of sustainablebusiness participation, transparency and high standard of accountability, is builtonthecore Principlesof Colombo Dockyard PLC (CDPLC) The Corporate Governance at Corporate Governance Non-Executive Directors. The Board soDetermined Based onthe Annual Declaration Submitted by the Meeting of each year. as they have beenduly reelected by the shareholders at the Annual General independent for thecurrent year, asprovided under theListingRules of CSE, has beenduly ratified anddetermined by theBoard that they are nevertheless except for thefact that they holdoffices over nineconsecutive years, which Directors, Mr. H. A. R.K. Wickramathilake andMr. LalithGanlath are independent Declaration annually to theBoard regarding their independence. Non-Executive Dockyard PLC isalsoanExecutive Director. All Non Executive Directors submita Directors. Mr. D. V. Abeysinghe who istheManaging Director &CEO, of Colombo Directors. The Board’s Chairman, Dr. T. Takehara andMr. Utsumiare Executive The current Board comprises of nineDirectors; sixof themare Non-Executive Governance intheoverall interest of all thestakeholders. and reiterates itscommitment to pursuethehigheststandards of Corporate CDPLC recognizes that goodCorporate Governance isacontinuing exercise included inthisreport. respective roles andresponsibilities of eachof theBoard subCommittees are These committees are primarily madeup with Non-Executive Directors. The Transaction Review Committee. including the Audit Committee, Remuneration Committee andRelated Party oversight of Management, theBoard hasestablishedBoard SubCommittees, ensure theefficient discharge of itsresponsibilities andto provide Independent performance reviews, riskmanagement andcorporate governance practices. To annual budget, major investments, divestment andfundingproposals, financial responsible for theGroup’s overall performance objectives, financial plansand for thecreation of long-term value andreturn for shareholders. The Board is what they reasonably believe to bethebestinterests of theCompany and The core responsibility of thedirectors isto exercise their judgment to actin Board of Directors .V byige- D. V. Abeysinghe aahD ot Member Sarath DeCosta aihGnahMember Lalith Ganlath (FCA) Wickramathilaka H. A. R.K. or ebr ui omte Remuneration Audit Committee Board Members himnCara Chairman Chairman Chairman - Member Member Committee Member Member Member Committee Review Transaction Related Party meeting. Board and/or Board SubCommittee outside theformal environment of the Management or exchanging of views the Group andproviding guidance to as bringingstrategic relationships to can bemadeinmany forms, such Contributions from eachdirector contribution. to anarrow view of adirector’s at formal meetings alonemay lead To focus onadirector’s attendance mutually exclusive. with their respective oversight roles, is Transactions Review Committees, Remuneration andRelated Party and membershipof the Audit, business andexecutive decisions, with itsgreater involvement inkey between thedifferent committees appropriate checksandbalances along with theneedto maintain and appropriate skillsare considered contribution. Diversity of experience foster active participation and effectiveness of theBoard and Board Members to maximize the distribution of responsibilities among Committees ensures anequitable The composition of theBoard Sub H. A .Karunaratne M. S. A. Wadood Director H. A. R.K. Wickramathilake L. Ganlath T. Nakabe K. Utsumi D. V. Abeysinghe Sarath DeCosta Dr. T. Takehara Director Director Director Director Executive/Nominee Director Director Director 08Nov 2016 Managing Director/CEO Vice Chairman Chairman Position ontheBoard Board meeting attendance details are given inbelow table: that are raised for theBoard’s consideration andapproval. The Board membersare free to discussand voice their concerns onproposals shareholder. Mr. Sarath DeCosta, who have beennominated to theBoard by amajor and Mr. LalithGanlath, who are PublicDirectors, andother Directors namely two Directors are independent, namely Mr. H. A. R.K. Wickramatileka, Chairman, The Audit Committee comprises of three Non-Executive Directors of whom Audit Committee Mr. H. A .Karunaratne (App. 07/12/18) Mr. M. S. A. Wadood Mr. C. J. P. Siriwardena Mr. H. A. R.K. Wickremathilake Mr. LalithGanlath Mr. K.Utsumi Mr. T. Nakabe or Alternate Mr. D. V. Abeysinghe Mr. Sarath DeCosta Dr. Toru Takehara Name 7Dc21 Non-executive/Nominee Director Non-executive/Nominee Director 07 Dec2018 08 Nov 2017 Non-executive/Public Director 28 April 1995 Non-executive/Public Director Non-executive/Nominee Director 21 June 1993 Executive/Nominee Director 24 March 2010 28 Sep2017 Non-executive/Nominee Director Executive/Nominee Director 21 June 1993 01 Sep.2014 Appointment of Date (Independent) (Independent) ofNature Appointment Feb                                            ------Mar  - Jun   - Aug  Nov - - Dec  -

COLOMBO DOCKYARD PLC | Annual Report 2018 23 24 COLOMBO DOCKYARD PLC | Annual Report 2018 meeting were presented to theBoard. met on05Occasions andreports on period under review theCommittee to theBoard of Directors. During the accounts before theseare presented quarterly accounts andaudited Committee regularly reviews the In additionto theabove, the • • • services of experts inrelevant Fields. systems were improved by obtaining shortcomings were rectifed and following areas were reviewed and for implementation. As aresult the received were submitted to the Board all theareas andrecommendations reviewed internal control systems of of the Auditors. The Committee has further recommend reappointment independence of the Auditors and with theinformation provided to the External Auditors and satisfed examined theindependence of Governance. The Committee other bestpractices for Corporate with thelaws andregulations and reporting process compliance system of internal control fnancial more transparent. It will focus on improve theexisting system to be Committee will assisttheBoard to Colombo Stock Exchange the Audit In terms of theListingRules of the Committee Report of the Audit Corporate Governance • •

IT Audit planf Terms o Proc Registers, Cyber security) Managemen Transaction Review Committee Committee andRelated Party Remuneration Committee, Audit Subcontractors Audit edure &Control over f reference of or 2019 t Process (Risk Audit Committee meeting attendance details are given inbelow table Lanka Act. Colombo Stock Exchange andSecuritiesExchange Commissionof Sri laws andregulations, includingrequirements of theCompanies Act, Rules of Secretary assiststhe Board onthecompliance with its Articles of Association, ensuring goodinformation flow within theBoard anditsCommittees. The agenda andadministers, attends andprepares minutes of Board proceedings, The Company Secretary assiststheChairman with thepreparation of meeting meeting to address queriestheBoard may have. Implementation) andsenior managersif necessary are alsopresent at the are presented at Board Meetings. The General Manager (Finance andSystem Quarterly financial highlights performance anddevelopments of theGroup present at therelevant timeduringthemeetings. Senior managers who canprovide insight into thematters at hand would be Committee hasaboutthematters. discussion may bemore focused onthequestionsthat theBoard or sub get a better understandingaboutthematters prior to themeeting. Thus the is submitted to Directors at leastfour days before themeeting. Sothat Directors Board onaregular basis. As ageneral rule,thenecessary reports/information managerial andoperational reports andfnancial statements of theGroup to the and resources. The Management of ColomboDockyard PLC provides adequate The Directors are equipped with complete, adequate andtimely information us at these meetings to formulate our recommendation. The Managing Director/CEO andChief Financial Officer onour request assisted Managing Director/CEO to theBoard for final determination. The Committee makes recommendations regarding remuneration of the Report of theRemuneration Committee Policy by amajor shareholder. independent, andMr. Sarath DeCosta, who hasbeennominated to theBoard namely Mr. H. A. R.K. Wickramatileka, Chairman,andMr. L.Ganlath, who are The Remuneration Committee comprises of three NonExecutive Directors, Remuneration Committee Mr. Lalith Ganlath Mr. Sarath DeCosta Mr. H. A. R.K. Wickremathilake Name Feb                u Aug Aug Nov Dec • • The resolutions passedat the AGM were asfollows: March 2018. At the AGM 170 shareholders were present by personor by proxy. The Company’s 35th Annual General Meeting (AGM) was heldon27thday of Annual General Meeting given inbelow table Related party transactions review committee meeting attendance details are transactions were far below therequired norms. of thetransactions were neededto bereferred to theBoard since the value of the related party transactions andfound that duringthe year under review none Committee met on03occasions andtheCommittee discussedandreviewed to theBoard by amajor shareholder. Duringtheperiodunder review the namely Mr. D. V. Abeysinghe, Managing Director/CEO who hasbeennominated nominated to theBoard by amajor shareholder andoneExecutive Director Mr. L.Ganlath, who are independent, andMr. Sarath DeCosta, who hasbeen NonExecutive Directors, namely Mr. H. A. R.K. Wickramatileka, Chairman,and The Related Party Transactions Review Committee comprises of three Related Party Transactions Review Committee are given inNote 08to theFinancial Statements. The aggregate remuneration paidto theexecutive andnon-executive Directors on theremuneration of theManaging Director/CEO. The Committee will have meetings asand when itdeemednecessary to decide cost aspectfor thebenefit of all stakeholders of theCompany. experienced personnel ina very competitive environment while lookingat the formulating theRemuneration Policy with the view to retaining highly qualified, The Committee will assisttheBoard to decideoncertain parameters in Functions •

Mr. D. V. Abeysinghe Mr. LalithGanlath Mr. Sarath DeCosta Mr. H. A. R.K. Wickremathilake Name remuneration. of theCompany for 2018andto authorize theDirectors to approve their Appointmen Re-election o the Report of the Auditors. Company, the Audited Accounts for the year ended31stDecember 2017 and To r Company. eceive the Annual Report of theBoard of Directors ontheaffairs of the t of KPMG, Chartered Accountants asthe External Auditors f Directors interms of the Articles of Association of the Feb                     u Aug Aug Nov Dec • before any important decision is made information andadvice isavailable deemed necessary to ensure that full independent professional advice if Board exercises itsdiscretion to seek corporate governance practices. The implement andstrengthen good is committed to assisttheBoard to The Management of theCompany appropriate. level of compliance inthisreport as Stock Exchange anddisclosesthe of theListingRules of theColombo Governance Rules asper Section7.10 Company Compliance with Corporate means: such companies, by thefollowing and monitors theperformance of Shipping Agency (Pte) Ltd., Singapore Services (Pvt)Ltd., andCeylon Dockyard General Engineering of subsidiary companies namely, its representatives for theBoards Colombo Dockyard PLC. Nominates As themajor shareholder, the Framework Subsidiary Monitoring within theCompany. and efficient businessprocesses as improving andpromoting effective governance responsibilities as well in thedischarge of their corporate assisting theBoard andManagement audits performed are aimedat CEO onall auditmatters. The internal which reports directly to theMD/ Silva &Co,Chartered Accountants, Review) provided by the,B.R.De Audit Staff (Financial &System Company isprovided by theInternal The Internal Audit Function of the Function InternalIndependent Audit

AGM. 2018 andupto thedate of thenext determine donations for the year To authorisetheDir ectors to

COLOMBO DOCKYARD PLC | Annual Report 2018 25 26 COLOMBO DOCKYARD PLC | Annual Report 2018 certificate. the scope detailed ontheapproved Management System –EMS). To ISO 14001:2015(Environmental as meeting therequirements of Register Quality Assurance Limited) been approved by LRQA (Lloyd’s Review, Colombo Dockyard PLC has Following asatisfactory Technical Manager (HRD& A). employees headedby theGeneral representing organization wise Improvement” (HESPI) Committee Environment, Safety andProductivity is theformation of our “Health, sustainability at ColomboDockyard the mostimportant developments of of itseconomic performance. One of this responsibility even at theexpense ensures that itdoesnot compromise and core values. The Company the Company’s corporate priorities process andisprominently placed in execution anddecision-making fundamental aspectof our strategy the environment isregarded asa responsibility towards society and facing our businesstoday. Corporate social andgovernance challenges responding to evolving environmental, identifying, understandingand and continuous improvement in PLC is aboutstrivingfor excellence Sustainability at ColomboDockyard Performance for SustainableBusiness Corporate Responsibility (b) (a) Corporate Governance

are placed before theBoard. contracts entered by subsidiaries significant transactions and A sta Quarterly. Financial Statements Monthly/ The Board o tement containing all f Directors reviews Mumbai office for ISO14001:2015. Lanka to get certified by LRQA PLC isthefirstorganization inSri Accordingly, theColomboDockyard always encourages itsshareholders Board of Directors of theCompany Company to interested persons. The offers macro level information of the cdl.lk) maintained by theCompany the shareholders. The website (www. produced to theCSEandthento and ColomboStock Exchange are Securities &Exchange Commission information andasper therulesof the Quarterly Report produced with group performance. The Annual Report and a better insight into theCompany’s appropriate, to give shareholders performance data isgiven where selective basis.Financial andother Disclosure isnever doneona the ColomboStock Exchange (CSE). is disseminated to itsshareholders via All CDPLC price-sensitive information Shareholders Communication with matters. regulatory authoritiesfor governance between themanagement andthe regulations andistheinterface with applicablestatutory, new responsible to ensure compliance The Company Secretary isprimarily making at themeetings. to thedirectors for effective decision details, documents ismadeavailable ensures that all relevant information, reviewed. The Company secretary procedures are followed andregularly key role inensuringthat theBoard The Company secretary plays a The Company Secretary by shareholders. the AGM to answer any queriesraised Management team to beavailable at have arrange aspecial corporate the AGM. The Board of Directors to attend andactively take partin financial or facilities. 27001, placingequal importance as including ISO9001,OHSAS18001, ISO international management systems an integral partof mostof the Today, riskmanagement hasbecome management deals with them. their major businessrisksandonhow that acompany shouldreport on related lawsuits, promoting discipline rules andregulations, employee- developments, changesinmaritime criterion, with therecent market became aseriousmanagement The concept of riskmanagement ISO 31000:2009onriskmanagement. generic guidelinesprovides under the especial attention theprinciplesand processes andprocedures giving risk management plans,systems, the effectiveness of theGroup’s team who reviews andenhances and theGeneral Management the aboard level subCommittees Board of Directors, supported by overall strategy determined by the The Group managesrisksunder an threats. them, inorder to prevent mostlikely taking appropriate actionsto address likelihood of their occurrence, and identifying potential risksandthe operations of theorganization, Generally, thisinvolves reviewing stability andgrowth of theCompany. that could severely impactthe potential internal &external risks and managingall theexisting and Risk management isidentifying Introduction Risk Management both qualitative andquantitative Risk Assessment caninclude adequate precautionary measures. assessment andto facilitate taking them asInternal andexternal, for businesses andhave categorized exposed, onour core andrelated as existing risks,to which we are following Key Risks are identified prompt actionsto mitigate them. The as reasonably practicable by taking impact, andtake precautions asfar determine their mostprobable to assessall therisksidentified and potential: theobjective being, identifying therisks,both existing value to all our stakeholders by entity, focus onlongterm sustainable Thus, we asaresponsible business external. with highrisks,both internal and dangerous anddifficult.Itis wedded also calledasa3Dindustry, dirty, highly specialized activitiesandis wide meaningof theterm, involves Marine andshippingindustry inthe requirements. in line with thenew ISO9001standard thinking &Risk baseddecisionmaking a training sessiononRisk based South West Asia) of LRQA to conduct Manager (Client training services, that the yard hasinvited General management principals.Inpar with the respective Mangers onnew risk taken several initiatives to educate ISO9001:2015 standard the yard has is incorpor returns. As theriskbasedthinking reduce risk volatility andimprove on acontinuing basis,inorder to process riskmanagement isdone Being anintegral partof thebusiness Our Approach ated to theupcoming

• responses are set outbelow: of suchrisksandtherelated and/or performance. The assessment of theseinterms of cost, schedule various risksoccurring andtheimpact assessments of thelikelihood of the • • • • Operational Risk Management Internal Risks the framework under ISO9001-2015 procedures, isrequired. Inaddition, conventions andregulatory compliance to suchinternational keeping to international standards, Our core businessactivitiesare in financial reporting. which encompasses operational and and aregular reporting framework, delegation of authority guidelines standard operating procedures, put inplace operating manuals, management. The Group hasalso risk management andincident operational riskby focusing on Accordingly, theGroup manages may outweigh thepotential benefits. and that thecost of minimizingit can never beentirely eliminated It isrecognized that operational risk them. processes or thesystems that support failures in internal controls, operational or businessinstability arisingfrom of potential financial lossand/ in all businessactivities,istherisk Operational risk, which isinherent Our Concern

Financial R Product R Mark Management Inf Opera ormation Technological Risk et Risk Management tional Risk Management isk Management isk Management

COLOMBO DOCKYARD PLC | Annual Report 2018 27 28 COLOMBO DOCKYARD PLC | Annual Report 2018 continuous training, andsystematic training, ongoodhousekeeping, equipment etc Inaddition,employee guards, fire prevention andcontrol Department, development of fire Analysts of the Government Analyst and third party inspectors; i.e.,the gases, both usingCompany Experts fire risks,checkingoncombustible measures such as identifying potential is mitigated by takingproactive Risk of fire andpotential damage the Organization. Management of what isbeingdonein giving soundcontrol to the integrated management System, all operational procedures to an prudent framework for encompassing of Quality Assurance provides a Agency; namely, Lloyd’s Register certified by anaccredited International Management System audited and under ISO9001:2015Quality 18001. Inaddition,theframework we envisage to conform to OHSAS Safety Management System that and prudent implementation of a through systematic education, training international shipyards are inculcated second to any of thedeveloped and aSafety Culture that isnot considered asaprimeresponsibility employees and visitors are Safety andHealth of all our Our Response concern”. operations andtheprincipleof “going a seriousnegative impactto its promptly andprudently will have Failure to address theserisks Our Impact Compliance with therequirements. systematically review andensure at various levels inCDPLC to QMS provides for management Risk Management these processes andtransparency. improving theoverall control over independent, competent auditors Systems Procedures are subjectto Thus, both theQuality Management accountability. taken to improve transparency and audit to athird party isanother step The assignment of theinternal sustainable industrial harmony. transparency, resulting increating decision makingprocess and debate anddiscussion,consensus way communication process, free organization culture that allows atwo- special attention to inculcate an the CDPLC Management pays very amongst different groups andlevels, in creating better understanding identified asanimportant aspect Prudent Communication being the operational activities. consciousness andaccountability in framework, creating awareness and guidelines andaregular reporting authority, work system permits, & machinery, delegation of functionality of tools, equipment regularly ontheaccuracy of operating procedures, checking operating manuals&standard The measures taken are: updating taken, with continuous upgrading. preventive management approach is outweigh thepotential benefits, a and that thecost of elimination may can never beentirely eliminated Acknowledging that operational risk environment. taken to create arisk-free working monitoring andcontrol measures are is now ingrained into eachindividual. Committee, theimportance of which Environment &Safety Advisory carried outby our own Health, education, compliance andaudits, this thoroughly, with thecontinuous our primeconcern and we address the yard, includingour visitors, are Safety &Health of all engagedin insurance. by risktransfer mechanismssuchas risk mitigation actionsare supported In addition, where applicable,the Our Concern Management Information Technological Risk & month. Disaster Recovery Examination every conduct ICT BusinessContinuity and to eFuture, where they identified to strategy for 2014- 2018asRoad Map ICT Department hasformulated a safeguard unforeseen losses.Our etc. Insurance cover isalsotaken to servers, regularized maintenance of daily backups,standby file This hasbeenaddressed by way Our Response losses. and perhaps would leadto financial impact to theCompany operations applications, may have anegative a system, infrastructure and Any disruption or failures of such Our Impact timely decisionmaking. Information System for prudent and through anIntegrated Management on accurate information generated Company sustainability depends refundable, on demand. eventually, thepayments madeare the prospective customers, where instruments, satisfying andeasing the company, iscovered by financial completely beyond thecontrol of by thesecurity situation, though price. The country risk,attributed generation of business volumes and other local contenders too affect the on Heavy Engineering businessby local market andsevere competition The absence of protectionism inthe generation. have aseriousimpactonbusiness Engineering market share too will repairs, ShipbuildingandOffshore price competition on our Ship The pressure from international Our Impact amongst others. costs andGovernment subsidies structure, comparatively low energy flexible labor laws, supportive tariff with efficiency andproductivity), from lower wage costs (incomparison our competitors continue to benefit services, irrespective of thefact that providing competitive products and is essential that CDPLC focuses on view of thesemarket pressures, it on theupper levels of thepricing.In which are larger players, canimpact addition, both DubaiandSingapore, Malaysia, Vietnam and Thailand. In from China,India,Pakistan, Indonesia, Today, severe competition isfaced perhaps more specifically regional. our competition too isglobal and from theforeign market. Accordingly, businesses are mainly generated Both our Shiprepair andShipbuilding Our Concern Management Market (Strategic) Risk & External Risks conquering thespace limitations. opportunities asmuchpossible, in thepipeline,to attract available Focused yard expansion projects are segments andnew channels. geographical markets, new market strategies focusing onnew We are adopting new marketing on competitive advantage. position itself inanichemarket, based diversify itsproducts portfolio and Company hasadopted strategies to forecasts, globally andregionally, the circumstances anditsfuturistic Capitalizing onthecurrent market Our Response effects onfluctuating interest rates. structure to minimize theadverse an efficient optimal interest cost The Group’s objective isto maintain Our Concern Interest Rate Risk and liquidity as well ascredit risk. interest rates, foreign exchange rates financial risks,includingchangesin activities are exposed to a variety of are reviewed periodically The Group’s policies andfinancial authority limits To managetheserisks,theGroup’s price risks. currency risks,interest rate riskand mitigate credit risks,liquidity risks, to meet financial obligations and Financial risksrelates to our ability Financial Risk Management profitability. earnings, costs, cashflow and Impacts theCompany’s interest Our Impact extent, inour favor. negotiated to themostfeasible interest rates are always being activities. Borrowing andinvesting operational, financingandinvestment to interest rate risksarisingfrom instruments to manageexposures The Group utilizes various financial Our Response minimizing thepotential risks. executed onabasket of currencies, Where feasible, contracts are same currency andamount. matching assets or liability of the by matching salesor purchase of exposures or hedgednaturally of actual or forecasted currency exchange contracts inrespect currency: either by forward foreign This riskisminimized by hedgingthe Our Response in final profitability. and cost structure leadingto changes substantial impactonboth revenue Exchange rates fluctuations make Our Impact the Singapore dollar, ishigh. primarily by theUSdollar, Euros and on salesandpurchases, denominated Risk onforeign-currency fluctuation Our Concern Foreign Exchange Risk maintained within thecredit facilities Working capital requirements are expected cash flow of theGroup. to theoperating environment and healthy level of liquidity appropriate to minimize thecost andmaintain a capital requirements with the view The Group managesits working Our Concern Liquidity Risk 29 COLOMBO DOCKYARD PLC | Annual Report 2018 30 COLOMBO DOCKYARD PLC | Annual Report 2018 standards. acceptable quality andto international offshore andheavy engineering,isto building ships,repairing ships, Our core businessoperations, of Our Concern Product Risk Management high value transactions. agreements madefor long-term & procedures andcontractual within thepre-determined approval monitored. Credit given isreviewed Group credit exposure isclosely Our Response doubtful debts andcost increases. Possibility of incurringbadand Our Impact counter party. to salesandtrade with any single concentration oncredit riskexposure The Group, hasnosignificant Our Concern Credit Risk from financial institutions. secured committed fundingfacilities of cashandequivalents and operating cashflow, maintains alevel Company closely monitors itsnet To measure liquidity risk,the Our Response to thebottom line. lead to unnecessary financingcosts Inadequate net working capital would Our Impact obligations. available to theGroup to meet its established andare adequate and Risk Management Mor evolving market. overseas to remain competitive inan relevant employees are trained Innovation isgiven highpriority and • • • • • • Classifcation Societies, suchas the approval andcertification by and services are strictly subjectto Assurance. Further, all our products certified by Lloyd’s Register of Quality 2015 Quality Management System, services: through theISO9001- levels of quality inour products and approach, which ensures required have adopted aquality assurance To mitigate thepotential risk, we Our Response changing themarket preference. factors would immediately leadto Failure andnon-compliance of above Our Impact services acceptable. for our products to bemarketable and requirements, rulesandregulations, developments andother continually with new technological As such, we have to alignourselves

Class NK Bureau Lloy American Bureau o Indian Regist Det N Lloyd of Shipping(DNV-GL) eover, Product & Technological d’s Register of ShippingLtd. orske Veritas-Germanischer Veritas er of Shipping f Shipping commitments to society. concerned aboutitsstatutory Further, thecompany is very much enabling themto prepare inadvance. given together with the Annual Report Meeting (AGM) adequate notice is shareholders at the Annual General Encouraging thefull participation of the Annual Report etc. interviews with media,publication of announcements, press releases and disclosures like quarterly financial continued to provide, timely, accurate during the year 2018theCompany and other investors too. Thus, communication with itsshareholders CDPLC iscommitted to have aproper the Group’s businessactivities. analysts andaddress their querieson relationships with the investors and assigned to maintain long-term Secretary have beendedicatedly The Legal Consultant/Company transparency. of corporate governance and its commitment to highstandards is animportant andintegral partof The Group’s investor relationship Investor Communication strategies. understanding of itsbusinessand improve theinvesting community’s with investors, theGroup aimsto timely andopencommunications and adopting apolicy of regular, fair, shareholders access to management retail shareholders, by providing reaching outto itsinstitutional and takes aproactive approach in Colombo Dockyard PLC (CDPLC) Our Shareholders Shareholder Information the Balance Sheet date. year 31stDecember 2018hasbeenmadeavailable to CSE within sixmonths of Thus, theCompany audited theFinancial Statement andBalance Sheet for the Shareholders Information both quarterly andannual financial performances to theshareholders. CDPLC iscommitted to adopting thebestpractices infinancial reporting for Financial Reporting Payout Ratio was 74% during2018(2017 :-75%). As per ColomboStock Exchange ListingRule No: 7.6 (xi),Company Dividend Dividend Pay OutRatio 1.50). Directors have approved afirstandfinal dividendof Rs.1.50per share (2017 –Rs. Dividend Approved 8,838.3 Mn). Loss Rs.142.5Mn)leaving theshareholders’ value with Rs.8,967.4 Mn(2017 -Rs. 13,169.0 Mn(2017 -Rs.12,052.6Mn)andnet Profit of Rs.144.6Mn.(2017 –Net During the year under review, theCompany achieved total revenue of Rs. Financial Performance Share Capital Total Assets hrhles ud8508338488978978,838 8,967 8,967 8,438 8,333 8,550 Shareholders’ Fund rftatrTx(6)(1)154315(143) 145 423 105 (217) (166) Profit after Tax Gross Profits Class of Shares Revenue Voting Rights Number of Shareholders Number of Shares Stated Capital Rs. Quarter s nR.M s nR.M s nRs.Mn Rs.Mn Rs.Mn Rs.Mn Rs.Mn Rs. Mn 7021,4 5741,5 50316,705 15,053 15,053 15,764 13,544 17,022 ,5 ,7 ,0 ,3 31912,053 13,169 4,238 3,502 3,071 2,358 3 3 6 4 7 1,445 877 341 167 136 233 1st Quarter 2nd 1 Vote per Share Ordinary Share Quarter 718,589,242 2018-12-31 3rd 71,858,924 5,008 Quarter 4th 1 Vote per Share Ordinary Share 082017 2018 718,589,242 71,858,924 207-12-31 4,922

COLOMBO DOCKYARD PLC | Annual Report 2018 31 32 COLOMBO DOCKYARD PLC | Annual Report 2018 (As per Rule No: 7.6 (x)of theListingRules of theColomboStock Exchange) Distributing of Shareholding asat 31stDecember 2018 Shareholder Information As per Rule No: 7.6 (iii)of ListingRules of theColomboStock Exchange, twenty largest shareholders: List of Largest 20Shareholders asat 31stDecember 2018 0Askold (Private) Ltd 20 9Harnam Holdings SDNBHD 19 8Deutsche Bank AG as Trustee for JB Vantage Value Equity 18 17 E.W.Balasuriya &Co(Pvt)Ltd 16 5Mercantile Investments andFinance PLC 15 4Associated Electrical Corporation Ltd 14 3Mr. SMBObeysekera andMrs.CNObeysekera 13 2Lanka MilkFoods (CWE) Limited 12 1Star Packaging (Pvt)Ltd 11 0Bankof Ceylon No. 2 Account 10 Mellon BankN.A.FloridaRetirement System 9 Bankof Ceylon No. 1 Account 8 National Savings Bank 7 Employees Trust Fund Board 6 SriLanka Ports Authority 5 SriLanka Insurance Corporation Ltd -Life-Fund 4 SriLanka Insurance Corporation Ltd –General Fund 3 Employees Provident Fund 2 OnomichiDockyard Company Ltd 1 From Fund DFCC BankPLC A/C 1 Name 1,000,001 above 0,0 1,000,000 100,001 001100,000 10,001 ,0 10,000 1,001 1,000 1 To No of Share Holders 5,008 3,952 899 134 16 7 081-1%21-23 % 2017-12-31 % 2018-12-31 6680151.000 36,648,051 1740916.343 11,744,009 ,9,9 5,000 3,592,998 ,3,4 4.922 3,536,548 ,3,6 2.417 1,736,660 ,3,0 1.718 1,234,706 ,8,9 3.042 2,186,191 0,0 0.278 200,000 6,0 0.223 160,000 3,0 0.327 235,000 5,0 0.209 150,000 3,0 0.467 335,900 6,5 0.235 169,050 7,0 0.659 473,300 5,2 0.209 150,026 9,2 1.249 897,622 1,4 0.306 219,948 5,3 0.212 152,532 6,2 0.230 165,123 7,1 0.244 175,210 No of Shares 60,679,163 71,858,924 2,823,965 3,863,971 3,816,012 675,813 6680151.000 36,648,051 1740916.343 11,744,009 ,9,9 5.000 3,592,998 ,3,6 2.417 1,736,660 ,9,4 4.999 3,592,548 ,3,0 1.718 1,234,706 ,8,9 3.042 2,186,191 0,0 0.278 200,000 8,8 0.669 480,580 6,0 0.223 160,000 6,0 0.371 266,700 3,0 0.327 235,000 3,0 0.467 335,900 6,5 0.235 169,050 9,2 1.249 897,622 1,4 0.306 219,948 5,1 0.215 154,210 - - - - - 100.00 84.44 0.94 5.38 3.93 5.31 % negative growth of 37.1% (Rs.32.90) compare to theprevious year’s closingprice. the endof the year 2018,theshare price of Colombo Dockyard PLC recorded a As per Rule No: 7.6 (xi)of theListingRules of theColomboStock Exchange, at Market Value per Share which is1.74% increase compared to 4,922asat 31stDecember 2017 The total number of shareholders of CDPLC is5,008asat 31stDecember 2018, Composition of Shareholding Relations, andSocial Inclusiveness are our mainbusinessconcerns. Thus Economic Progress, Environmental Concern, Customer andSupplier The level of Stakeholder Satisfaction isthe yardstick of our future sustainability. number of ordinary shares inissueduringthe year. dividing thenet profit attributable to shareholders by the weighted average of 202%compare to thelast year EPS value of Rs.-1.98) EPSiscalculated by The Earning per share (EPS) of Rs.2.01inthe year 2018recorded agrowth Earnings per Share 0.14% (2017 –0.21%)of thetotal market capitalization. 31st December 2018asRs.3,995.3Mn.(2017 –Rs.6,359.5Mn.).CDPLC represent CDPLC hasrecorded itsmarket capitalization asat thebalance sheet date of Market Capitalization No of Transaction Shares Trading As at endof the year Lowest duringthe year Highest duringthe year Market price per Share Local Individuals Category Value of Share traded (Rs.) No of Shares traded Local Institutions Foreign Individuals Foreign Institutions Total Shareholders 50.50 (25/09/2018) 93.50 (02/01/2018) 55.60 (31/12/2018) sa 11-08As at 31-12-2016 As at 31-12-2018 sa 081-1As at 31/12/2017 As at 2018-12-31 69,676,041.20 ,0 18894100.00 71,858,924 5,008 No ofNo ,0 ,6,7 7.60 5,461,072 4,708 1 8398539.44 28,339,835 212 659780.71 509,738 76 23,4,7 52.25 37,548,279 12 972,891 1,834 oo hrs% No of Shares 110.00 (26/07/2017) 88.50 (31/12/20217) 65.30 (21/02/2017) 313,523,478.06 3,674,381 4,766 Exchange. Listing Rules of theColomboStock reference to ruleno.7.6 (iv) of the 2018 was Rs.1,955,411,301/- with capitalization asat 31stDecember The float adjusted market Capitalization FloatMarket Adjusted 31st December 2018 was 5,000. Number of publicshareholders asat 2018 is48.94%(2017 –48.94%). held by thePublicasat December Stock Exchange, percentage of shares As per Rule No: 7.6 (iv) of theColombo Public Shareholding

COLOMBO DOCKYARD PLC | Annual Report 2018 33 Financial Calender 2018/2019 35 Annual Report of The Board of Directors on the Affairs of the Company 36 Related Party Transactions Review Committee Report 41 Statement of Directors’ Responsibilities 42 Chief Executive Officer’s and Chief Financial Officer’s Responsibility Statement 43 Independent Auditors’ Report 44 Statement of Profit or Loss and Other Comprehensive Income 48 Statement of Financial Position 49 Statement 0f Changes In Equity 50 Statement of Cash Flows 52 Notes to the Financial Statements 54 Ten Years Financial Summary 102 Financial Calender 2018/2019 Financial Year-end Interim Report -3rd Quarter-2019 Interim Report -2ndQuarter-2019 Interim Report -1stQuarter-2019 36th Annual General Meeting -2018 Payment of Dividend Ex-Dividend Date Despatch of Annual Report -2018 Interim Report -4thQuarter-2018 Approval of Financial Statements 2019 Financial Year-end Interim Report -3rd Quarter-2017 Interim Report -2ndQuarter-2017 Interim Report -1stQuarter-2017 35th Annual General Meeting -2017 Payment of Dividend Ex-Dividend Date Despatch of Annual Report -2017 Interim Report -4thQuarter-2017 Approval of Financial Statements 2018 oebr1,2019 November 15, eebr3,2019 December 31, oebr1,2018 November 15, eebr3,2018 December 31, eray2 2019 February,26 eray2 2019 February,28 eray2 2018 February,28 eray2 2018 February,27 uut1,2019 August 15, uut1,2018 August 15, ac,82019 March,08 ac,62018 March,06 ac,92018 March,09 ac,52019 March,05 ac,62019 March,26 ac,02018 March,20 ac,72018 March,27 ac,92019 March,19 a 5 2019 May 15, a 5 2018 May 15,

COLOMBO DOCKYARD PLC | Annual Report 2018 35 36 COLOMBO DOCKYARD PLC | Annual Report 2018 to 101 of this Annual Report. No. 07 of 2007 are given onpage48 in complying with theCompanies Act together with theCompany Secretary Officer and approved by two Directors duly certified by theChief Financial year ended31stDecember 2018are Company andtheGroup for the The Financial Statement of the Financial Statements Review (page09to 11). and theManaging Director/CEO’s Chairman’s Review (page06to 08), of theCompany iscovered inthe An overview of thefuture prospects Future Developments the Report of theDirectors’. These reports form anintegral part of on page09to 11inthis Annual Report. and Managing Director/CEO’s Review Chairman’s Review onpage06to 08 future developments are stated inthe and results of thoseoperations and Company duringthefinancial year A review of theoperation of the Review of Business Colombo Stock Exchange. Accountants of SriLanka andthe issued by theInstitute of Chartered practices onCorporate Governance guided by therecommended best Colombo Stock Exchange andare to bemadeunder ListingRules of the includes certain disclosures required on 26hFebruary 2019. The report also approved by theBoard of Directors Statements were accepted and Accounting Standards. The Financial Act No. 07 of 2007 andSriLanka requirements of theCompanies December 2018,conforming to the of thegroup for the year ended31st Consolidated Financial Statements of ColomboDockyard PLC and the audited Financial Statements to thememberstogether with The Directors present their report Affairs of theCompany Annual Report of The Board of Directors onthe Company Principal Business Activities of theCompany andtheGroup duringthefinancial year under review. of 2007. There were no significant changes in the nature of the principal activities following therequirement by the section168(1)(a)of theCompanies Act No. 07 The principleactivitiesof theCompany andGroup are presented below Principal Activities required by Section168(1)(d) of theCompanies Act the Company andtheGroup are given onpage54to 66 of the Annual Report as The Accounting Policies adopted inthepreparation of Financial Statements of Accounting Policies andChanges the Section168(1)(c) of theCompanies Act No. 07 of 2007. issued thereon isgiven onpage44to 47 of this Annual Report asrequired by Statements for the year end31stDecember 2018,andthe Auditors’ Report Company Auditors, KPMG,performed theauditonConsolidated Financial Auditors’ Report 67 to 68of this Annual Report. Analysis of therevenue isgiven in Note 05to theFinancial Statement onpages Mn), while theCompany’s revenue was Rs.13,169Mn(2017 -Rs.12,053)Mn. The revenue of theGroup duringthe year was Rs. 14,947 Mn(2017 -Rs.12,929 Gross Income Financial Statements are prepared basedontheGoingConcern Basis. resources to continue itsoperations intheforeseeable future. Accordingly, the The Board of Directors are satisfied that theCompany hastheadequate Going Concern Singapore Ceylon Shipping Agency (Pte) Ltd, Services (Pvt)Ltd Dockyard General Engineering Subsidiaries Colombo Dockyard PLC Company Company as well asother clients engineering items to theparent Supply channel for high-tech appropriate andaccepted standards. and services incompliance with the to procure Highquality products opportunity for discerning clients areas while Providing excellent mechanical and electrical engineering infrastructure development incivil, To cater to thecountry’s needs in engineering heavy engineering,andoffshore the shiprepairs, shipbuilding, the Company continued to be The core businessactivitiesof Business ActivitiesPrincipal Rs. 144.6Mn(2017 -Loss Rs. 142.5Mn). The Profit of thecompany attributable to theequity holdersof thecompany was less liabilitiesandstated capital was Rs.8,253Mn(2017 -Rs. 8,124Mn). was Rs.5,065Mn (2017 –Rs.5,324Mn)and the value of theCompany’s assets At thebalance sheet date, theCompany was solvent andthenet current assets accounting practices. the Company asdetermined by reference to thestatute andasacceptable provided always however that thesameisfrom andoutof theprofits of without theneedfor approval by anordinary resolution of theshareholders, from timeto timeapprove thepayment of dividends, whether interim or final, As provided inthe Articles of Association of theCompany, theDirectors may 1.50). Dividend of Rs.1.50per share for the year ended31stDecember 2018(2017 –Rs. The Board of Directors have authorisedthepayment of thefirstandfinal Dividends on page71. the amounts usedfor taxpurposes.Further details are given intaxation note 09 carrying amounts of assets andliabilitiesfor financial reporting purposesand method, ontemporary differences at the balance sheet date between the It istheCompany policy to provide for deferred taxation basedontheliability Taxation Annual Report. year are shown intheStatements of ChangesinEquity onpages50to 51onthis to Rs.9,391Mn(2017 -Rs.9.149Mn). The movements of theReserves duringthe Total Group Retained Earning Reserves at 31stDecember 2018, was amounted Reserves Affairs of theCompany Annual Report of The Board of Directors onthe Retained Profit C/F Dividends Paid Available for salesof financial assets Retained Profit B/F Other Comprehensive Income Colombo Dockyard PLC Profit attributable to theShareholders of Amount attributable to Minority Interest Group post-taxprofit Profit for the year: 9,133,691 9,391,113 (107,788) 331,600 337,475 s00Rs’000 Rs’000 (5,875) 33,610 2018 - 9,149,286 9,162,035 (50,455) 26,094 25,354 12,352 2017 (740) - 107.8 Mn(2017 –Rs.107.8 Mn). earnings for dividendhasbeenRs. Amount set asideoutof retained Statements onpage74. are given inNote 11to theFinancial of Property, plant andequipment perch) recorded at cost. The details date is1,103.7 perch (2016-1,103.7 the Group asat thebalance sheet extent of thefreehold landsheldby to Rs.770 Mn(2017 -Rs.209Mn). The Equipment duringthe year amounted on acquisition of Property, Plant and The Group’s total capital expenditure Property, Plant &Equipment from pages31to 33. and market value per share isgiven in dividends, andnet assets per share Information relating to earnings, Shareholder Information financial year 2018. the stipulated periodduringthe Government have beenmade within liabilities to Employees andthe all payments inrespect of statutory knowledge andbelief, confirmed that The Directors, to thebestof their Statutory Payments statement. are given inNote 11of thefinancial freehold landsowned by theGroup December 2017. The details of Group’s freehold landsasat 31st market value assessment of the Licensed Surveyors carriedouta An Independent Chartered Valuer/ 3,912 Mn). accounts at Rs.4,247 Mn(2017 -Rs. 31st December 2018isincludedinthe properties owned by theGroup asat The net book value of freehold Properties Market Value of Freehold

COLOMBO DOCKYARD PLC | Annual Report 2018 37 38 COLOMBO DOCKYARD PLC | Annual Report 2018 the requirement of theSriLanka been prepared inconformity with appearing onpages48to 101have Accounting Policies and Note thereto the view that Financial Statements, state of affairs. The Directors are of to reflect thetrueandfair view of the the year ended31stDecember 2018 of theCompany andtheGroup for preparation of Financial Statements The Directors are responsible for the for Financial Reporting The Directors’ Responsibility for publicinspection. provisions of the Act are alsoavailable required to maintain under the All theCompany Records that are under theprovisions of the Act. and isavailable for publicinspection part andparcel of this Annual Report Register of theCompany which isa has beenduly entered intheInterest the Company andsuchinformation accounting period,to theBoard of the Company duringthesubject or proposed transactions with Company andinterest intransactions interest inshares issuedby the nature andextent of their relevant The Directors have disclosedthe Company Records last Annual General Meeting terms of theresolution passedat the 242,500/- (2017 -Rs.706,290/-) in during the year was amounted to Rs. Total donations madeby thegroup Corporate Donations or itsfuture operations. the financial positionof theCompany and will not have amaterial impacton Note 35of theFinancial Statements against theCompany isdisclosedin Company Lawyer, pendinglitigation In theopinionof theDirectors andthe Pending Litigation Affairs of theCompany Annual Report of The Board of Directors onthe Colombo Stock Exchange. of 2007 andListingRules of the LKASs), Companies Act No. 07 Accounting Standards (SLFRSs/ • report isasfollows. from thedate of thelastreport to this Report. The changeinthedirectorate are given onpage12of the Annual Dockyard PLC asat thedate of report The Board of Directors of Colombo Directorate Mr. K.Kanaya Alternate Directors Mr. H.A.Karunaratne Mr. M.S. Abdul Wadood Mr. H. A. R.K. Wickramathilake Mr. LalithGanlath Mr. T. Nakabe Mr. Sarath DeCosta- Vice Chairman Non-Executive Directors Mr. Kiyohide Utsumi Director/CEO Mr. D. V. Abeysinghe -Managing Dr. T. Takehara -Chairman Executive Directors pages 12to 14of this Annual Report. date andtheir profiles appear on held office asat theBalance Sheet experience. The following Directors and Commercial knowledge and of Engineering, Financial,Legal 9) Directors with a wide range Company consist of Nine(2017- The Board of Directors of the The Board of Directors

11/01/2018. alternate director with effect from in place of Mr. N.Danjoas his Kumpei Kanaya was appointed resigned on11/01/2018 andMr. to Mr. T. Nakabe on20/01/2016 appointed asanalternate director Mr. N orihiro Danjo who was to holdoffice. M.S.A. Wadood respectively continue namely Mr. H A Karunaratne andMr. Sri Lanka Insurance Corporation Ltd of Employees Provident Fund and K. UtsumiandtheNominee Directors Costa, D.V. Abeysinghe, T. Nakabe and Dr. Toru Takehara, Messrs. Sarath de Dockyard Company Limited namely The Nominee Directors of Onomichi offered themselves for re-election. being eligiblefor re-election, have close of the Annual General Meeting, Wickramathilake, who retire at the Lalith Ganlath andH. A. R.K. In terms of Article 87, Messrs. • Annual Report. under Corporate Governance of this attendances isgiven inpage22to 26 three Board subcommittees and The Board of Directors have formed Board Sub-Committees

in place of Mr. Siriwardana. Director effective from 07/12/2018 appointed asitsnew Nominee Central Bankof SriLanka was Karunaratne, Deputy Governor, and Mr. Harankaha Arachchillage Sri Lanka retired on30/10/2018 Provident Fund of Central Bankof Director of theEmployees Mr. C J P Siriwardana, Nominee Financial Statement onpage100,andhasbeendeclared at meetings of the Directors’ interest in contracts of theCompany isdisclosedinNote 37 to the Directors’ Interest inContracts andRelated Party Transactions the scope detailed ontheapproved certificate. requirements of ISO14001:2015(Environmental Management System –EMS) to approved by LRQA (Lloyd’s Register Quality Assurance Limited) asmeeting the Following asatisfactory Technical Review, Colombo Dockyard PLC hasbeen activity, which isdetrimental to theenvironment. The Company andGroup, to thebestof itsknowledge have not engagedin Environmental Protection 2019. systematic working environment andit will beconcluded at theendof March We introduced 5Smethodology to theorganization to develop cleanand internationally competitive workforce inCDPLC through NVQ framework. with National Vocational Qualification (NVQ) framework and we develop trainees (welder, fabricator, machinist,electricianetc.) to thenation. We comply students etc. Annually we contribute approximately 450qualifiedcraftsmanship to NAITA, VTA, ATI, CGTTI, CINEC, NDT, COT andlocal andforeign university Commission (TVEC) as A+ training center and we are providing training facility CDPLC training center isaccredited by the Tertiary & Vocational Education for future success of theCompany. to ensure that itsemployees are developing theskillsandknowledge required build anefficient andeffective workforce aligned with corporate objectives and implement effective humanresource practices andpoliciesto develop and The Company continued to invest inHumanCapital Development and Human Resources the year under review have beenduly entered asrequired. Companies Act No. 07 of 2007 andDeclarations madeby all Directors during The Interest Register ismaintained by theCompany asrequired under the Interest Register Company asat 31stDecember 2018: The Directors’ andtheir spouses’ holdingof number of ordinary shares of the Director’s Share Holdings M. S. Abdul Wadood H. A. R.K. Wickramathilake L. Ganlath D. V Abeysinghe 081-12017-12-31 2018-12-31 1,103 578 733 231 1,103 578 733 - proposed contract with theCompany. interest inany other contract or Directors have nodirect or indirect Register of theCompany. The Directors andentered intheInterest Annual Report. presented onpages22to 26this Transaction Review Committees are Committees andRelated Party the Audit Committee, Remuneration Board subCommittee meetings of comprise of Board Meetings, and Details of Directors’ meetings which Directors’ Meetings Financial Statements. disclosed intheNote 35to the commitments other thanthose There are nocontingencies or Commitments Contingent Liabilitiesand given onpage32of thisreport. by eachasat 31stDecember 2018are Company andthepercentage held The twenty major shareholders of the Substantial Share Holdings date of this Annual Report. Colombo Stock Exchange asat the Corporate Governance Rules of the confirms thecompliance with the of this Annual Report. The Company Governance Statement onpage22 are explained intheCorporate policies followed by theCompany today’s corporate culture. The practices; anessential factor in the adoption of goodgovernance Company have acknowledged The Board of Directors of the Corporate Governance 39 COLOMBO DOCKYARD PLC | Annual Report 2018 40 COLOMBO DOCKYARD PLC | Annual Report 2018 Colombo, SriLanka 26th February 2019 Company Secretary/Legal Consultant Manori Mallikarachchi Managing Director/CEO D. V.Abeysinghe Chairman Dr. T. Takehara Colombo Dockyard PLC For andonbehalf of theBoard, Company will besubmitted at the Annual General Meeting. the reappointment of Messrs. KPMGChartered Accountants, as Auditors to the In accordance with theCompanies Act No. 07 of 2007, resolution proposing Auditors Meeting isgiven onpage103. 10.00 a.m.onthe26thday of March 2019. The Notice to the Annual General Grand Ballroom, GaladariHotel, No. 64,Lotus Road, Colombo01,SriLanka at The Annual General Meeting of ColomboDockyard PLC, will beheldat the Annual General Meeting Report. disclosed intheNote 38to theFinancial Statements onpage101of this Annual disclosure or adjustment to theFinancial Statements together with those the Balance Sheet date andDirectors signingof Accounts, that require Please refer Note 38for circumstances have arisenduringtheperiodbetween Events after theReporting Period Subsidiaries asat 31stDecember 2018 was asfollows: The number of personsemployed by ColomboDockyard PLC andits Group Employment Affairs of theCompany Annual Report of The Board of Directors onthe Colombo Dockyard PLC Group

081-12017-12-31 2018-12-31 1,596 1,549 1,585 1,553 Related Party Transactions. the board of directors onmonitoring accordance with theguidelinesset by The Committee operates in Scope of Operations Terms of Reference and required. the committee proceedings when of theCompany to participate in summoned other relevant officials In addition,theCommittee Company Secretary Ms. Manori P. Mallikarachchi - Chief Financial Officer Mr. P. D. GihanRavinatha - sittings onaregular basis. (KMPs) of theCompany who attend following Key Management Personnel The Committee isassisted by the Mr. D. V. Abeysinghe -(MD/CEO) Mr. Sarath DeCosta Mr. LalithGanlath Chairman Mr. H. A. R.K. Wickramathilake - as follows: The Compositionof theCommittee is (SEC). Exchange Commissionof SriLanka Code”) issuedby theSecuritiesand Related Party Transactions (“the of theCodeof BestPractices on Committee covers therequirements Party Transactions”. The scope of the January 2016,to review “Related Committee with effect from 1st (the Committee”) asaBoard Sub Party Transactions Review Committee The Company constituted theRelated Composition The Committee &its Transactions Practices onRelated Party Adoption of the Codeof Best Related Party Transactions Review Committee Report to Related Party Transactions Regulatory responsibilities with regard Committee to conduct itsStatutory & appropriate to facilitate the Audit Committee asnecessary and information with theBoard Audit addition, theCommittee will share & Auditors (External &Internal). In and explanation from Management the power to call for clarification has theright of access as well as transactions. Further theCommittee authorities insuchfields,to review & technical advice from competent resorts to obtaining legal,financial Wherever necessary, theCommittee consideration. any favorable nor preferential Related Parties have not received Transactions, to determine that for comparable Non Related Party benchmarked criteria applicable Related Party Transactions with review iscarriedoutby comparing the responsible Directors/KMPs. This available Declarations, signedoff by of Related Parties basedonlatest sourced via acomprehensive list Related Party Transactions data the integrity of periodically reportable adhere to. The Committee relies on which theCompany isobligedto statutory andregulatory requirements dealings are instrictconformity with to ascertain that their transactions and customers of theCompany as well as a vis theother shareholders and nor preferential consideration vis they have not received any favorable Code with a view to determining that other related partiesasdefined inthe Companies of theCompany andsuch Subsidiaries and Associate (KMPs), substantial shareholders, Directors, Key Management Personnel Related Party Transactions with Committee are thescrutiny of all The principal functionsof the 26th February 2019 Colombo, SriLanka Committee Related Party Transaction Review Chairman H. A. R.K. Wickramathilake Functions Self-Appraisal of Committee given inthepage25. the Code. Attendance details are Company hadbeencompliant with the periodunder review andthe more favorable or preferential during with therelated partiesthat were Committee there were no transactions and review. Intheopinionof the Board of Directors for their information the minutes were circulated to the 2018, 5suchmeetings were heldand Meetings are heldmandatory, during Meetings operational requirements. review basedonregulatory as well as Transactions issubjectto periodic The TOR/Policy on“Related Party” Reviewof TOR continues to operate effectively. review concluded that theCommittee at theoutset of thisReport andthe CEO, participating KMPsreferred to the committee, Managing Director/ assessments by themembersof with contributions from theindividual by the Chairmanof theCommittee of theCommittee was conducted A self-evaluation of theeffectiveness

COLOMBO DOCKYARD PLC | Annual Report 2018 41 42 COLOMBO DOCKYARD PLC | Annual Report 2018 of theinternal controls are monitored safeguarding assets. The applications controls andaccounting records for taken proper andsufficient internal Stock Exchange. Company has of theListingRules of theColombo 07 Continuing ListingRequirements all the requirements under the Section to confirm that theCompany has met Further, theBoard of Directors wishes Stock Exchange • • • on: Financial Statements, which are based each of theGroup andCompany’s also confirms compliance inpreparing Financial Statements presented and for theintegrity andobjectivity of the The Directors accept the responsibility financial position. reasonable accuracy to disclosethe Company anditssubsidiaries, with to maintain accounting records of the The Directors are equally responsible Financial Statements. preparing theCompany’s andGroup laws andother regulations in Act No 07 of 2007 andapplicable with theprovisions of theCompanies responsible to ensure compliance The Directors of theCompany are Statement of Directors’ Responsibilities •

Requir Estima selected andappliedconsistently. Appropria LKASs). Accountants of Sri Lanka (SLFRSs/ issued by the Institute of Chartered Sri Lanka Stock Exchange Listing Rules of theColombo the Financial Statements. to reflect thetrueandfair view of on aprudent andreasonable basis to theFinancial Statements made ed information by the tes andjudgments relating Accounting Standards te accounting policies in relation to theFinancial Statements. page 44,set outtheir responsibilities The report of the Auditors, given on Financial Statements. them to form their opiniononthe considered appropriate to enable undertake required inspectionthey were provided with free access to the last Annual General Meeting with theresolution passedat KPMG, appointed inaccordance Company external auditors Messrs Stock Exchange. of theListingRules of theColombo on Continuing ListingRequirements required by theRule No. 7.5 (a)and(b) within thestipulated periodof timeas a CDcontaining the Annual Report to other shareholders asoft copy in their desire to receive ahard copy or the Company, who have expressed thereof issent every shareholder of in timeandensured that acopy have prepared this Annual Report and 167(1)of theCompany Act, they that, as required by theSection166(1) The Board also wishes to confirm Chartered Accountants. contracted with B.R.DeSilva &Co, Management System Review Team through aindependent Financial & Note No. 35to theFinancial. where relevant except asspecifiedin date have beenpaidor provided subsidiaries asat theBalance Sheet and payable by theCompany andits and all other known statutory dues of theCompany anditssubsidiaries, of andinrespect of theemployees levies andtaxes payable on behalf and itsSubsidiaries,all contributions, and levies payable by theCompany of their knowledge, all taxes, duties The Directors confirm that to the best Compliance Report By order of theBoard as set outinthisstatement. have discharged their responsibilities The Directors are of the view that they preparing theFinancial Statements. adopting theGoingConcern basisin operation for theforeseeable future adequate resources to continue in Company anditssubsidiariespossess reasonable expectation that the other factors, theDirectors have market environment, regulatory and position, operational conditions, considering theCompany’s financial The Directors further confirm that after on page99. Statements onContingent Liabilities Colombo, SriLanka 26th February 2019 Company Secretary Manori P. Mallikarachchi state of affairs. Inorder to ensure reasonably present theCompany’s and substance of transactions and in atrueandfair manner, theform the Financial Statements reflect and reasonable basis,inorder that Statements were madeonaprudent judgments relating to theFinancial Statements. The estimates and and objectivity of these Financial accept responsibility for theintegrity management of theCompany The Board of Directors andthe applied. appropriate andare consistently the Financial Statements are most policies usedinthepreparation of in their adoption. The accounting prescribed accounting standards There are nodepartures from the • • • • compliance with thefollowing: are prepared andpresented in (Group) asat 31stDecember 2018 of theCompany anditsSubsidiaries Consolidated Financial Statements Dockyard PLC (Company) andthe The Financial Statements of Colombo Officer’s Responsibility Statement Chief Executive Officer’s andChief Financial • •

the Company/Group. extent applicableto theaffairs of Other applicablesta Listing Rules o Code of Companies A Standards Act No: 15of 1995, Sri Lanka of SriLanka, Institute of Chartered Accountants (SLFRSs/LKASs) issuedby The Sri Lanka Stock Exchange, and Commission of SriLanka, the SecuritiesandExchange Accountants of SriLanka and jointly by The Institute of Chartered Corporate Governance issued BestPractices on Accounting and Auditing Accounting Standards ct No. 07 of 2007, f theColombo tutes to the have beencomplied with. confirmed that all theother guidelines compliance isrequired. Itisfurther listed companies where mandatory with theguidelinesfor theauditof ensured compliance by the Auditor the Company hascomplied with and It isalsodeclared andconfirmed that matter of substance. the Audit Committee to discussany and free access to themembersof and theInternal Auditors have full independence, theExternal Auditors reporting issues. To ensure complete auditing, internal control andfinancial their responsibilities andto discuss which theseauditors are performing Auditors to review themanner in meets periodically with theInternal The Audit Committee of theCompany Auditors. Accountants, theCompany’s External audited by Messrs KPMGChartered The Financial Statements were followed. of theCompany were consistently established policiesandprocedures provide reasonable assurance that the have beenconducted periodically to Director/CEO. All auditactivities their findingsdirectly to theManaging Chartered Accountants, who reports provided by the,BRDeSilva &Co., Team (Financial &System Review) carried outby theInternal Audit Audit functionof theCompany is on anongoingbasis. The Internal reviewed, evaluated andupdated well asother irregularities, which is preventing anddetecting fraud as for safeguarding assets andfor maintaining accounting records, in enablinginternal controls and taken proper andadequate interest such compliance, theCompany has • We confirm that: • • Colombo, SriLanka 26th February 2019 Chief Financial Officer P. D. GihanRavinatha Managing Director/CEO D. V.Abeysinghe

there ar there ar the Company Statements inthe Annual Report. the Note No. 35to theFinancial other thanthosedisclosedin that are pendingagainsttheGroup compliances; and requirements; laws, regulations andprudential have complied with all applicable e nomaterial litigations e nomaterial non anditsSubsidiaries 43 COLOMBO DOCKYARD PLC | Annual Report 2018 44 COLOMBO DOCKYARD PLC | Annual Report 2018 opinion onthesematters. the consolidated financial statements asa whole, andinforming our opinionthereon, and we donot provide aseparate consolidated financial statements of thecurrent period. These matters were addressed inthecontext of our auditof Key auditmatters are thosematters that, inour professional judgment, were of mostsignificance inour auditof the KeyMatters Audit evidence we have obtained is sufficient andappropriate to provide abasisfor our opinion. and we have fulfilledour other ethical responsibilities inaccordance with theCodeof Ethics. We believe that theaudit report. We are independent of theGroup inaccordance with theCodeof Ethics issuedby CA SriLanka (Code of Ethics), standards are further describedinthe Auditor’s Responsibilities for the Audit of theFinancial Statements sectionof our We conducted our auditinaccordance with SriLanka Auditing Standards (SLAuSs). Our responsibilities under those Basis for Opinion flows for the year thenendedinaccordance with SriLanka Accounting Standards. financial positionof theCompany andtheGroup asat 31stDecember 2018,andof their financial performance andcash In our opinion,theaccompanying financial statements of the Company andtheGroup give atrueandfair view of the accounting policiesandother explanatory information set outinpages48to 101of this Annual Report. and statement of cashflows for the year thenended,andnotes to thefinancial statements, andasummary of significant December 2018,andthestatement of profit or lossandother comprehensive income, statement of changesinequity statements of theCompany anditssubsidiaries(“theGroup”), which comprise thestatement of financial positionasat 31st We have audited thefinancial statements of ColomboDockyard PLC (“theCompany”) andtheconsolidated financial Opinion Report onthe Audit of theFinancial Statements To theShareholders of ColomboDockyard PLC Independent Auditors’Report LKR 6,870 Mn.for the year ended31stDecember 2018. revenue from shipconstruction contracts amounting to A major component of Group’s revenue comprise of Risk Description Refer note 05 to theconsolidated financial statements 01. Revenue recognition onshipconstruction contracts • Our Audit procedures included, Our Response

SLFRS 15–Revenue from Contracts with Customers. recognising revenue isinline with therequirements of Understanding whe ther themanagement’s process of error or potential management bias. forecasting future taxable profits which could besubjectto management judgement andestimation required in the consolidated financial statements andsignificant as akey auditmatter becauseof itssignificance to We identified therecognition of deferred taxassets existing taxable temporary differences. taxable profit beinggenerated andfuture reversals of future taxable profits andtheprobability of suchfuture management inrespect of assessingthesufficiency of relies ontheexercise of significant judgement by December 2018. The recognition of deferred taxassets accumulated taxlossesof LKR2,721 Mn.asat 31st to LKR125Mnontemporary differences which includes The Group hasrecognised deferred taxassets amounting Risk Description Refer note 16to theconsolidated financial statements 02. Recoverability of Deferred Tax Asset estimates could give riseto material variances. Group upto thereporting date andchangesto these revenue andassociated profit to berecognised by the management judgment inestimating theamount of because there isahighdegree of riskandassociated relating to thestageof completion asakey auditmatter We considered theestimations madeby themanagement reporting date againsttheestimated total contract cost. contract cost incurred for work performed at each was measured with reference to theproportion of the The stageof completion onshipconstruction contracts • Our Audit procedures amongothers included, • • • • • • Our Response

Gr Financial Statements. of contract accounting and thekey risksrelating to Inspecting asampleof Analy For requirements of theprevailing accounting standards. deferred taxasset balances appropriately re judgement inestimating recognized andunrecognized consolidated financial statements of theapplication of Assessing Ev Ev Assessing theadequac key terms have beenappropriately re to identify key terms andassessing whether these agreements with customers andsubcontractors subsequently. company thesameagainstactual cost incurred appropriateness of theestimations madeby the of thestageof completion, by challengingthe estimated by thecompany inthe determination the reasonableness of thesame. reports andother relevant correspondence to evaluate on asamplebasis,to contracts, invoices, project status determination of thestageof completion, we checked, performance andestimates. the Group’s financial projections againsthistorical business andtheindustry in which theGroup operates. by management with our understandingof theGroup’s taxable profits by comparing theassumptions adopted by management inrespect of theforecasts of future amounts recognised inthefinancial statements. oup’s deferred taxposition with reference to the aluating thekey assumptions underpinning aluating theassumptions andjudgements exercised actual cost incurred by thecompany usedinthe sing theendof jobforecasts cost to complete whether theGroup’s disclosures inthe project budgets, contract y of thedisclosures inrespect f ect ed inthe f ect the 45 COLOMBO DOCKYARD PLC | Annual Report 2018 46 COLOMBO DOCKYARD PLC | Annual Report 2018 • • throughout theaudit. We also: As partof anauditinaccordance with SLAuSs, we exercise professional judgment andmaintain professional skepticism decisions of userstaken onthebasisof thesefinancial statements. considered material if, individually or intheaggregate, they could reasonably beexpected to influence theeconomic SLAuSs will always detect amaterial misstatement when itexists. Misstatements canarisefrom fraud or error andare Reasonable assurance isahighlevel of assurance, butisnot aguarantee that anauditconducted inaccordance with material misstatement, whether dueto fraud or error, andto issueanauditor’s report that includesour opinion. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from Auditor’s Responsibilities for the Audit of theFinancial Statements process. Those charged with governance are responsible for overseeing theCompany’s andtheGroup’s financial reporting so. unless management either intends to liquidate the Group or to cease operations, or hasnorealistic alternative butto do concern, disclosing, asapplicable,matters related to goingconcern and usingthegoingconcern basisof accounting In preparing thefinancial statements, management isresponsible for assessingtheGroup’s ability to continue asagoing preparation of financial statements that are free from material misstatement, whether dueto fraud or error. Sri Lanka Accounting Standards, andfor suchinternal control asmanagement determines isnecessary to enablethe Management is responsible for thepreparation of financial statements that give atrueandfair view inaccordance with Statements Responsibilities of Management and Those Charged with Governance for theFinancial are required to report that fact. We have nothing to report inthisregard. If, basedonthe work we have performed, we conclude that there isamaterial misstatement of thisother information, we in theauditor otherwise appearsto bematerially misstated. consider whether theother information ismaterially inconsistent with thefinancial statements or our knowledge obtained In connection with our auditof thefinancial statements, our responsibility isto read theother information and,indoingso, assurance conclusion thereon. Our opiniononthefinancial statements doesnot cover theother information and we donot express any form of annual report, butdoesnot includethefinancial statements andour Auditor’s report thereon. Management isresponsible for theother information. The other information comprises theinformation includedinthe Other Information Independent Auditors’Report

Obtain anunderstandingo override of internal control. for oneresulting from error, asfraud may involve collusion, forgery, intentional omissions,misrepresentations, or the to provide abasisfor our opinion. The riskof not detecting amaterial misstatement resulting from fraud ishigher than and perform auditprocedures responsive to thoserisks,andobtain auditevidence that issufficient andappropriate Iden Company and theGroup’s internal control. appropriate inthecircumstances, butnot for thepurposeof expressing anopinion ontheeffectiveness of the tify andassesstherisksof material misstatement of thefinancial statements, whether due to fraud or error, design f internal control relevant to the auditinorder to design audit procedures that are 26th February 2019 Colombo, SriLanka CHARTERED ACCOUNTANTS 2618. CA SriLanka membershipnumber of theengagement partner responsible for signingthisindependent auditor’s report is the Company. that were required for theauditand,asfar asappearsfrom our examination, proper accounting records have beenkept by As required by section163(2) of theCompanies Act No. 07 of 2007, we have obtained all theinformation andexplanations Report onOther Legal andRegulatory Requirements • • • • communication. the adverse consequences of doingso would reasonably be expected to outweigh thepublicinterest benefits of such when, inextremely rare circumstances, we determine that amatter shouldnot becommunicated inour report because describe thesematters inour auditor’s report unlesslaw or regulation precludes publicdisclosure aboutthematter or significance intheauditof thefinancial statements of thecurrent periodandare therefore thekey audit matters. We From thematters communicated with thosecharged with governance, we determine thosematters that were of most matters that may reasonably bethought to bear onour independence, and where applicable,related safeguards. accordance with theCodeof Ethics regarding independence, andto communicate with themall relationships andother We alsoprovide thosecharged with governance with astatement that we have complied with ethical requirements in audit. the auditandsignificant auditfindings,includingany significant deficiencies ininternal control that we identify duringour We communicate with thosecharged with governance regarding, amongother matters, theplannedscope andtimingof

Obtain sufficien presentation. whether thefinancial statements represent theunderlying transactions and events inamanner that achieves fair Ev concern. date of our auditor’s report. However, future events or conditions may causetheGroup to cease to continue asagoing disclosures are inadequate, to modify our opinion.Our conclusions are basedontheauditevidence obtained upto the are required to draw attention inour auditor’s report to therelated disclosures inthefinancial statements or, if such doubt ontheGroup’s ability to continue asagoingconcern. If we conclude that amaterial uncertainty exists, we audit evidence obtained, whether amaterial uncertainty exists related to events or conditions that may castsignificant Conclude ontheappropria disclosur Evaluate theappropriateness of accounting policiesusedandthereasonableness of accounting estimates andrelated supervision andperformance of thegroup audit. We remain solely responsible for our auditopinion. within theGroup to express anopinionontheconsolidated financial statements. We are responsible for thedirection, aluate theoverall presentation, structure andcontent of thefinancial statements, includingthedisclosures, and es madeby management. t appropriate auditevidence regarding thefinancial information of theentities or businessactivities teness of management’s useof thegoingconcern basisof accounting and,basedonthe

COLOMBO DOCKYARD PLC | Annual Report 2018 47 48 COLOMBO DOCKYARD PLC | Annual Report 2018 The A (Figures inbrackets indicate deductions) Earnings/(Loss) per T Non -Con Owners of theCompany T Pr N Pr To Owners of theCompany Other It Cash flo Foreign currency translation differences -foreign operations Tax onOther F Defined benefit planactuarial gains/(losses) Items that will not bereclassified to profit or loss Other Comprehensive Income Profit/(Loss) for the Year Income Profit/(Loss) beforeProfit/(Loss) Tax N Other Oper Administr Distribution Expenses Other Inc Gross Profit Cost of Revenue

For the Year Ended 31stDecember, Statement of Profit or Loss andOther Comprehensive Income otal Comprehensive Income/(Expense) for the year otal Comprehensive Income attributable to; air value changeof investments valued at FVOCI ems that are or may bereclassified subsequently to profit or loss on -Controlling interests et Finance Income ofit/(Loss) for the year ofits/(Losses) attributable to; tal Comprehensive Income/(Expense) for the year Comprehensive Income for the year, net of tax ccounting Policies andExplanatory Notes onpages54to 101form anintegral partof theseFinancial Statements. Sales Tax Expenses w hedges-changesinfair value

ome ative Expenses trolling interests ating Income/(Expenses)

Comprehensive Income -Reversal/(Expenses)

Share (Rs.)

No 10.1 te 6 8 9 5 7

(13,602,250) 14,946,583 (2,187, 1,344,333 1,024,141 (Rs.’000 460,889 308,500 469,675 469,675 453,036 (123,414) 331,600 132,200 337,47 337,47 (29,429) 16,639 74,833 21,967 37,307 (3,697) 5,875 1,095 1,790 2018 4.61 751) 5 5 )

Group

12,929,096 (11,162,224) (2,050,177) 1,766,872 (Rs. (109,57 289,767 190,033 135,664 (30,859) (58,920) (18,040) (37 (29,972)

(11,599) 26,094 26,094 (11,599) 25,354 11,633 8,465 6,441 ’000) 1,129 2017 ,693) 0.35 740 0) -

13,169,000 (12,292,132) (1,967,067) 1,060,224 (Rs. 876,868 252,486 252,486 252,486 220,631 107,829 144,657 144,657 144,657 (26,909) 171,566 (20,185) 33,968 74,833 (2,762) 1,095 1,790 ’000) 2018 2.01 - - - Compan

(10,607 12,052,630 (1,866,251) 1,445,487 (192,804) (Rs. (192,804) (192,804) (142,520 (142,520) (142,520) 201,816 (50,284) (60,252) 197 (29,972) (69,41 (73,103) (21,814) y 8,839 ’000) (1.98) 1,129 2017 ,631 ,143) 7) - - - - ) Dr. Toru Takehara Approved andsignedfor andonbehalf of the Board of Directors of ColomboDockyard PLC. The Board of Directors isresponsible for thepreparation and presentation of theseFinancial Statements. Chief Financial Officer P.D. GihanRavinatha Property, Plant andEquipment Non-Current Assets Assets As at 31stDecember, Statement of Financial Position Chairman In Colombo, SriLanka. 26th February 2019 Intangible Inv Inv Def Other Financial Assets IncludingDerivatives

Curr Inventories Trade andOther Receivables Other Financial Assets IncludingDerivatives Amounts duefr Inv Cash andE

Stated Capital EquityLiabilities And To Exchange E F Cash flow R N Equity Attributable to Equity holdersof theParent T Deferred Tax Liability Non-Curr E

Curren Interest BearingBorrowings Other Financial T Amounts duet Income Dividend P Bank Over

These Financial Statements have beenprepared incompliance with therequirements of theCompanies Act No.7 of 2007. The Accounting Policies andExplanatory Notes onpages54to 101form anintegral partof theseFinancial Statements. Total Equity andLiabilities rade andOther Payables otal Equity air Value Through OCIReserve mployee Benefits etained Earnings on-Controlling Interest vestment Property tal Assets estment inSubsidiaries estments ClassifiedasFair Value through OCI estments ClassifiedasFair Value through Profit or Loss erred Tax Asset ent Assets t Liabilities Tax Payable

ent Liabilities Hedge Reserve Assets drafts ayable

qualization Reserve

o Related Parties LiabilitiesincludingDerivatives om Related Parties

quivalents

D. Managing Dir V.Abeysinghe

ector/CEO

No 20 26 28 29 25 24 27 23 16.1 22 22.1 22.2 22.3 18 19 16.2 19 15.1 14 15.2 te 13 17 12 21.1 21.2 11

Manori Company 16,989,584 16,989,584 12,039,360 10,220,207 10,296,719 3,008,839 4,246,805 4,914,690 4,950,224 5,820,339 5,823,456 2,712,300 9,391,113 (Rs.’000 859,965 125,088 872,526 821,934 714,396 236,125 243,155 549,117 83,968 74,833 21,993 76,512 17,872 12,561 17,981 11,233 15,152 2018 P.Mallikarachchi 80 Secretary - - - - - )

Group 13,676,007 18,202,420 18,202,420 5,060,826 9,890,554 9,950,427 3,494,446 9,149,286 3,912,488 7,335,83 4,526,413 3,778,412 7,1 (Rs.

465,689 525,685 107 164,764 714,396 916,156 745,516 915,103 25,039 59,873 16,082 10,7 34,623 79,216 26,152 16,191 2,204 ’000) 1,053 2017 ,006 90 7 ------

10,309,701 15,053,651 15,053,651 4,048,7 8,967,432 8,967,432 4,7 5,244,387 5,103,343 8,160,331 2,712,300 4,115,043 2,351,434 (Rs. 702,603 125,088 534,837 714,396 841,832 841,832 241,473 147,238 164,571 43,950 74,833 17,872 17,981 15,152 2,865 9,677 4,7 ’000) 2018 930 56 47 ------Compan

16, 16, 12,291,322 6,967, 8,838,329 3,806,437 8,838,329 3,494,446 6,7 4,642,295 4,413,769 3,333,156 8,107 (Rs. 899,062 899,062 454,568 705,091 705,091 647 107 159,999 714,396 y 86,052 22,886 113,271 55,487 16,082 26,152 16,191 2,865 3,816 ’000) 2017 ,006 ,489 ,851 700 675 ------49 COLOMBO DOCKYARD PLC | Annual Report 2018 50 COLOMBO DOCKYARD PLC | Annual Report 2018 - De - Actuarial gain/(loss)onRetirement Benefit Obligations Other comprehensive income Profit for the year A To Adjustmen Balance asa Balance asa Transactions - DividendsPaid Balance asat 31st December 2018 - Inv - Actuarial gain/(loss)onRetirement Other c - For - DividendsPaid T - Cashflow - F - F - De Profit for the year To - Fair

Retirement Benefit Obligation Retirement Benefit Obligation Benefit Obligations Balance asat 01st January 2017 Group Statement 0f ChangesInEquity ransactions with owners of the Company Contributions by anddistributions djusted Balance asat 01st January 2018 tal Comprehensive income for the year tal Comprehensive income for the year air Value gain/(loss)of Investments valued at FVOCI oreign Currency translation differences -Foreign operations ferred taxeffect on Actuarial gain/(loss)on ferred taxeffect on Actuarial gain/(loss)on estments valued at FVOCI -reclassified to profit or loss eign Currency translation differences -Foreign operations Value gain/(loss)of Investments valued at FVOCI

omprehensive income t oninitial application of SLFRS9(Note 32) hedges-changesinfair value t 01st January 2018,aspreviously reported t 31stDecember 2017 with owners of theCompany Contributions by anddistributions

(Rs. 714,396 714,396 714,396 714,396 714,396 Capital Sta ’000) ted ------

9,149,286 9,149,286 9,162,035 9,133,691 Re Earnings 9,391,113 (Rs. (107 331,600 (58,920) Attributable t (15,595) tained 37,307 25,354 (3,697) 12,352 8,465 ’000) ,788) ------

Fair Through (Rs. Reserv 16,082 16,082 16,082 (12,352) 27,305 Value 17,872 o equity holdersof parent 1,790 ’000) 1,129 OCI e ------

Eq Exchange ualization (Rs. Reserv 10,790 10,790 10,790 21,993 11,203 4,857 5,933 ’000) e ------

Cash Flo (Rs. Reserv Hedge 74,833 74,833 ’000) w e ------

10,220,207 9,908,593 9,890,554 9,890,554 9,87 (Rs. (107 331,600 (58,920) (15,595) 74,833 37,307 25,354 11,203 (3,697) 8,465 4,959 5,933 1,790 ’000) T 1,129 ,788) otal - -

Contr (Rs. Int 59,873 59,873 59,873 10,764 76,512 53,432 olling 5,875 erest ’000) 5,7 Non 740 01 ------

10,296,719 9,962,025 9,950,427 9,950,427 9,934,832 (Rs. (107 337,47 (58,920) (15,595) 26,094 74,833 21,967 37,307 equity (3,697) 11,634 8,465 1,790 ’000) T 1,129 ,788) otal 5 - - Balance asat 31stDecember 2018 - DividendsPaid Transactions with owners of theCompany Contributions by anddistributions - Cashflow hedges-changes infair value - Fair Value gain/(loss) of Investments valued at FVOCI - De Other - Actuarial Gain/(Loss) onRetirement Benefit Obligation T Profit/(Loss) for the year A A Balance asa Balance asa - DividendsPaid Transactions - Fair - De - Actuarial gain/(Loss) onRetirement Benefit Obligation Other Profit/(Loss) for the year To

Balance asat 01st January 2017 (Figures inbrackets indicate deductions) The Accounting Policies andExplanatory Notes onpages54to 101form anintegral partof theseFinancial Statements. Company otal Comprehensive income for the year djusted Balance asat 01st January 2018 djustment oninitial application of SLFRS9(Note 32) tal Comprehensive income for the year ferred taxeffect on Actuarial gain/(loss)onRetirement Benefit Obligation ferred taxeffect on Actuarial gain/(loss)onRetirement Benefit Obligation Value gain/(loss)of Investments valued at FVOCI comprehensive income comprehensive income

t 01st January 2018,aspreviously reported t 31stDecember 2017 with owners of theCompany Contributions by anddistributions

(Rs. 714,396 714,396 714,396 714,396 714,396 Capital Sta ’000) ted ------

8,092,256 8,301,784 8,160,331 Re 8,107,851 8,107,851 Earnings (Rs. (107 (142,520) 144,657 (60,252) (15,595) 33,968 tained (2, 8,839 ’000) ,788) 762) - - - -

Through

Fair (Rs. Reserv 16,082 16,082 16,082

14,953 17,872 Value 1, ’000) 1,129 790 OCI e ------

Cash (Rs. Reserv Hedge 74,833 7 4,833 ’000) Flow e ------

8,838,329 8,838,329 8,967 8,822,734 9,031,133 (Rs. (107 (142,520) 144,657 (60,252) (15,595) 33,968 7 (2, 8,839 4,833 1, ’000) To 1,129 ,788) ,432 790 762) tal -

COLOMBO DOCKYARD PLC | Annual Report 2018 51 52 COLOMBO DOCKYARD PLC | Annual Report 2018 Ne Tax/ESC paid Gratuity Paid Interest Paid Cash Generat Incr Incr (Increase)/Decrease Amounts Duefrom Related Parties (Increase)/Decrease in Trade andOther Receivables (Increase Operating Profit/(Loss) Before Working Capital Changes Int Dividend Income In Amortization o Bad deb (Pr Ne Pro (Pr Pr Pro Pr (Excluding Actuarial Gains/Losses) Impairmen Amortiza Adjustmen Depreciation of Property, Plant andEquipment Profit/(Loss) Before Tax Cash Flow from Operating Activities For the Year Ended 31stDecember Statement of CashFlows terest Income ovision for/(Reversal) of Obsolete Stocks ovision for Retirement Benefit Obligations erest Expenses ofit) onsaleof investments valued at FVOCI ofit)/Loss onDisposal of Property, Plant andEquipment t CashGenerated from/(used in)Operating Activities t ChangeinFair Value of Financial Instruments vision for/(Reversal) of Warranty Provision vision/(Reversal) for BadandDoubtful Debts ease/(Decrease) Amounts Dueto Related Parties ease/(Decrease) Trade andOther Payables ts written off tion of Intangible assets )/Decrease inInventory t of Property, Plant andEquipment ts for,

ed from/(used in)Operating Activities f Corporate Guarantees

1,072,449 1,354,843 1,365,552 (269,958) (Rs.’000 (815,959) 460,889 (168,727) 150,896 895,523 432,7 (84,404) (68,852) (39,972) (47,417) 13,806 39,972 37,368 75, (7,566) (1,610) 2,473 8,153 2018 765 (10) 59 - - - - )

Group

6,499,697 6,851,872 1,723,0 4,118,199 (320,886) (Rs. (146,202) 535,808 135,664 420,232 (114,185) 47 148,128 (91,788)

(34,372) 91,788 13,883 29,101 (5,244) (7,825) (3,614) 6,861 1,076 4,792 ’000) 2017 73 - - - - -

1,148,224 1,617,591 (998,932) (Rs. (210,540) 406,880 (168,727) 593,482 891,779 145,465 171,566 (39,965) (35,970) (54,031) (61,186) 68,636 (19,573) (47, 39,965 51,300 13,209 (1,608) 17,210 (1,083) ’000) 2018 (67 753) 5) - - - Compan

6,449,329 6,7 4,163,77 1,733,132 (Rs. 333,996 (244,911) 557 401,376 143,602 (143,71 (54,360) (59,278) (12,958) (73,103) (91,7 44,064 (18,617) 10,469 29,972 91,7 13,357 (5,659) y 3,686 6,150 ’000) 2017 (639) ,053 40 40) 7) 4 - - - The (Figures inbrackets indicate deductions.) Cash andEquiv Cash andEquivalents at thebeginningof theperiod(Note 21) Equivalents duringtheperiod Ne Ne Dividend Paid Repa Short Terms Loans Obtained duringtheperiod Cash Flow N Dividend R A Pr Pr Inv S Sta In Proc Acquisitions of Property, Plant andEquipment Cash Flow from Investing Activities For the Year Ended 31stDecember taff Loans recovered duringthe year cquisition of Intangible Assets et CashGenerated from/(used in)Investing Activities terest Received oceeds onMaturity of investments valued at FVOCI oceeds onMaturity of FVTPL Financial Assets estments inFVTPL Financial Assets t Increase/(Decrease) inCashand t CashGenerated from/(used in)Financing Activities ff Loans granted duringthe year Accounting Policies andExplanatory Notes onpages54to 101form anintegral partof theseFinancial Statements. eeds from Disposal of Property, Plant andEquipment yment of Short Term Loans from Financing Activities eceived

alents at theendof theperiod(Note 21)

(7,534,334) 5,058,622 6,7 4,914,610 (900,934) (300,829) (770,462) (Rs.’000 (118,788) (144,012) (315,527) 221,978 213,843 317,402 52,188 2,531 2018 10 - - - )

Group

(10,404,7 (3,915,336) 2,406,269 5,058,622 6,489,451 2,652,353 (Rs. (208,97 (178,092) (361,673) (248,851) 284,369 186,249 163,918

7,5 ’000) 2017 (709) (39) 48) 79 4) - -

(7,534,334) 4,642,295 6,7 4,115,043 (900,934) (649,538) (298,354) (Rs. (518,097) (118,788) (527,252) 180,430 211,444 35,970 52,188 ’000) 1,951 2018 - - - - Compan

(10,404,7 (3,915,336) 4,642,295 2,109,540 6,489,451 2,532,7 (Rs. (169,432) 208,394 (241,357) 183,694 11,788 y (1,238) 5,675 ’000) 2017 (39) 48) 55 - - - -

COLOMBO DOCKYARD PLC | Annual Report 2018 53 54 COLOMBO DOCKYARD PLC | Annual Report 2018 with theaccounting policiesand statement of cashflows, together of changes in equity andthe of financial position,statement comprehensive income, statement which comprise of thestatement of financial statements of theCompany of theGroup andtheseparate The consolidated financial statements 2.1. 2. 31st December. common financial year, which endson All thecompanies inthegroup have a company of ColomboDockyard PLC. incorporated in Japan istheparent Onomichi Dockyard Co.Ltd, Singapore). (Private) Limited (incorporated in holding of Ceylon Shipping Agency (incorporated inSriLanka) and51% Engineering Services (Private) Limited holding of Dockyard General Group, theCompany has100% Of thetwo subsidiaries within the works. shipbuilding andheavy engineering services with regard to shiprepairs, The Group provides a vast variety of (together referred asthe“Group”). the Company anditsSubsidiaries ended 31stDecember 2018comprise of theCompany asat andfor the year The consolidated financial statements situated inPort of Colombo. The Company’s registered office is on theColomboStock Exchange. and domiciledinSriLanka andlisted limited liability company incorporated Colombo Dockyard PLC isapublic 1. Notes to theFinancial Statements

BASIS OF PREPARATION REPORTING ENTITY Statement of Compliance Standards (SLFRSs/(LKASs). of 2007 andtheSriLanka Accounting provisions of Companies Act No, 07 Company anditssubsidiariesasper of theFinancial Statements of the for thepreparation andpresentation The Board of Directors isresponsible Act No, 07 of 2007. the requirements of theCompanies (CA SriLanka) andincompliance with Chartered Accountants of SriLanka LKASs) asissuedby The Institute of Accounting Standards (SLFRSs/ in accordance with theSriLanka have beenprepared andpresented notes (the“financial statements”) • • • Statement of Financial Position. except for thefollowing items inthe and under thehistorical cost basis been prepared onanaccrual basis Group andtheCompany haven The financial statements of the 2.2. Sri Lankan Rupees hasbeenrounded All financial information presented in economic environment (SeeNote 33). is different asitoperates in adifferent subsidiary whose functional currency currency, except for theforeign which istheGroup’s functional are presented inSriLankan Rupees The consolidated financial statements Curr 2.3. •

measured at fair value actuarial valuation. (LKAS 19) obligation recognised basedon Liability f Financial asse amortised cost. instruments measured at Non deriv Deriva value through OCI.

ency Basis of Functional andPresentation tive financial instruments or defined benefit ative financial Measurement ts measured at fair otherwise. to thenearest thousand,unlessstated 3.1.1. statements. made intheconsolidated financial appropriate adjustments have been circumstances and where necessary, for like transactions/events insimilar using uniform accounting policies statements have beenprepared The consolidated financial Company anditssubsidiaries. the Financial Statements of the (referred to asthe “Group”) comprise The consolidated financial statements 3.1. stated. and itssubsidiaries,unlessotherwise applied consistently by theCompany Financial Statements and have been all theperiodspresented inthese have beenappliedconsistently to The accounting policiesset outbelow AC 3. of thesubsidiaries to transfer fundsto There are norestrictions ontheability the date that control ceases. the Company andcommences until date on which control istransferred to Subsidiaries are consolidated from the twelve months ending 31st December. the parent company which isfor the for thesame reporting periodas statements of subsidiariesprepared a controlling interest. All financial of the voting rights or otherwise has shareholding of more thanonehalf policies generally accompanying a to govern the financial andoperating which theCompany hasthepower Subsidiaries ar

COUNTING POLICIES

SIGNIFICANT Basis Of Consolida Subsidiaries e all entities over tion assets andliabilitiesdenominated in At eachreporting date, monetary transactions. rates prevailing at thedates of the currencies usingtheexchange are recorded inthefunctional functional currency (foreign currency) in currencies other thantheentity’s of theindividual entities, transactions In preparing theFinancial Statements Transactions 3.2.2. Company’s functional currency. Lankan Rupees, which isalsothe statements are presented inSri currency’). The consolidated financial the entity operates (‘thefunctional economic environment in which using thecurrency of theprimary each entity in the Group are measured The individual Financial Statements of Pr 3.2.1. 3.2. evidence of impairment. but only to theextent that there isno the same way asunrealised gains, Unrealised lossesare eliminated in of theGroup’s interest intheinvestee. against theinvestment to theextent accounted investees are eliminated from transactions with equity statements. Unrealised gainsarising preparing theconsolidated financial transactions are eliminated in expenses arisingfrom inter group and any unrealised income and Inter group balances andtransactions consolidation 3.1.2 loans andadvances. of cashdividendsor repayment of the Company (TheParent) intheform esentation Currency

Foreign Currency For Functional Currency and Transactions elimina eign Currency ted on income statement. foreign operation isrecognised inthe income relating to that particular recognise inother comprehensive the deferred cumulative amount On disposal of aforeign entity, to other comprehensive income. on thetranslation are taken directly The exchange differences arising respectively. annual rate of exchange for theperiod reporting date andat theaverage of exchange prevailing asat the to SriLankan Rupees at therate foreign operations are translated subsidiary which isdeemedto be and income statement of overseas The statement of financial position Subsidiaries 3.2.3. in other comprehensive income. the differences which are recognised profit or lossfor theperiodexcept for carried at fair value are includedin translation of non-monetary items Exchange differences arisingonthe in foreign operations/subsidiaries. except for theGroup’s net investment included inprofit or lossfor theperiod the translation of monetary items, are settlement of monetary items, andon Exchange differences arisingonthe transaction. the rates prevailing onthedate of at historical cost are translated at Non-monetary items measured value was determined. prevailing onthedate when thefair fair value are translated at therates Non-monetary items measured at the closingrate. foreign currencies are translated at

For eign Operations/ 3.2.4. the income statement. equity isimmediately transferred to gain or lossthat was reported in expected to occur, thecumulative forecast transaction isnolonger in theincome statement. When the transaction isultimately recognised and isrecognised when theforecast equity at that timeremains inequity cumulative gainor lossexisting in criteria for hedgeaccounting, any when ahedgenolonger meets the instrument expires or issold,or affects profit or loss. When ahedging the periods when thehedgeditem are reclassified to profit or lossin Amounts accumulated inequity immediately intheincome statement. the ineffective portionisrecognised (OCI). The gainor lossinrelation to comprehensive income statement hedges isrecognised intheother designated andqualify ascashflow the fair value of derivatives that are The effective portionof changesin 3.2.5. income or finance cost respectively. the income statement under finance changes infair value are recognised it date. Gainsandlossesarisingfrom are fair valued at eachreporting Foreign exchange forward contract contracts date. period of one year from thereporting Company intends to holdbeyond a current assets are those which the whichever isshorter. Assets other than one year from thereporting date, of theCompany’s business,or within during thenormal operating cycle are expected to berealised incash, cash, bankbalances andthose which the statement of financial positionare Assets classifiedascurrent assets in Their 3.3.

Valuation Assets andtheBasesof Cash flow For eign exchange forward hedge

COLOMBO DOCKYARD PLC | Annual Report 2018 55 56 COLOMBO DOCKYARD PLC | Annual Report 2018 the useof property changesfrom property ismeasured at cost. When administrative purposes.Investment supply of goodsor services or for of business, usingtheproduction of not for saleintheordinary course capital appreciation or for both, but either to earnrental income or for Investment property isproperty held 3.3.1.3. qualifying assets. that are directly attributable to the they are located andborrowing costs and restoring inthesite on which dismantling andremoving theitems use. This alsoincludescost of the working condition for itsintended attributable to bringingtheasset to labour, andany other costs directly includes thecost of materials, direct cost of self-constructed assets condition for itsintended use. The costs of bringingtheasset to working price andany directly attributable and equipment comprise itspurchase The cost of anitem of property, plant 3.3.1.2. property, plant andequipment. separate items (Major components) of useful lives, they are accounted for as plant andequipment have different When partsof anitem of property, impairment losses,if any. depreciation andaccumulated stated at cost lessaccumulated Property, Plant andEquipment are measured. the cost of theasset canbereliably the asset will flow to theGroup and economic benefit associated with recognised if itisprobable that future Property, plant andequipment are Measurement 3.3.1.1. 3.3.1. Notes to theFinancial Statements

Inv Owned Asse Rec Property, Plant &Equipment estment Property ognition and ts The c 3.3.1.6. profit andloss when theasset is derecognised. from itsuseor disposal.Gainsor lossesonderecognition are recognised inthe derecognised ondisposal or when nofuture economic benefits are expected The carryingamount of anitem of property, plant andequipment is 3.3.1.5. recognised inprofit or lossasincurred. The costs of theday to day servicingof property, plant andequipment are derecognised. cost canbemeasured reliably. The carryingamount of thereplaced partis economic benefits embodied within thepart will flow to thecompany andits recognised inthecarryingamount of theitem if itisprobable that thefuture 3.3.1.4. plant &equipment. investment property to owner occupied property itisreclassified asproperty, Company –ColomboDockyard PLC The estimated useful lives anddepreciation rates are asfollows: benefits embodiedintheasset. Landisnot depreciated. closely reflects theexpected pattern of consumption of thefuture economic lives of eachpartof anitem of property, plant andequipment, since thismost is recognised inprofit or lossonastraight linebasisover theestimated useful asset, or other amount substituted for cost, lessitsresidual value. Depreciation Depreciation iscalculated over the depreciable amount, which isthecost of an Dry-docks Asset Category Roadways Buildings Electrical Installations Plant & Machinery Furniture, Fittings & Office Equipment Motor Vehicles Boats &Launches Inventory Items Loose Tools ost of replacing partof anitem of property, plant andequipment is

Der Subsequent Costs Depr ecognition eciation Useful Life (Years) 0-4 10%-2.5% 10 -40 25-50 20-25 6.6 6.6 6.6 10 10 5 2 Depreciation Rate (%) 5% -4% 4% -2% 50% 20% 10% 10% 15% 15% 15% expenditure isrecognised inprofit or loss asincurred. economic benefits embodiedinthespecific asset to which itrelates. All other Subsequent expenditure iscapitalisedonly when itincreases thefuture 3.3.2.2 financial positionunder thecategory of intangible assets. that they will leadto future economic benefits, are includedinthestatement of hardware, which canbeclearly identified, reliably measured anditsprobable All computer software cost incurred, which are not internally related to associate 3.3.2.1 impairment losses. are measured at cost lessaccumulated amortisation andaccumulated measured reliably. Intangible assets that are acquired by theGroup/Company attributable to theassets will flow to theentity andcost of theassets canbe An Intangible Assets isrecognised if itisprobable that economic benefits are 3.3.2 financial year endandadjusted prospectively, when appropriate, if any. Depreciation method, useful lives andresidual values are reviewed at each sale andthedate that theasset isderecognised. an asset ceases at theearlier of thedate that theasset isclassifiedasheldfor Depreciation of anasset begins when itisready for use whereas depreciation of Ceylon Shipping Agency (Private) Limited Group –Dockyard General Engineering Services (Private) Limited Office Renovation Furniture andFittings Computers Office Equipment Asset Category Office andComputer Equipment Loose Tools Furniture, Fittings & Office Equipment Motor Vehicles Plant &Machinery Buildings Asset Category

Subsequent Expenditur So Intangible A ftware ssets e Useful Life Useful Life (Years) (Years) 6.6 6.6 10 10 10 10 5 4 3 2 Depreciation Rate Depreciation Rate 33.3% 50% 20% 25% 10% 10% 10% 10% 15% 15% (%) (%) 3.3.2.3 as follows: useful lives andamortization rates are embodied intheasset. The estimated of thefuture economic benefits expected pattern of consumption since thismostclosely reflects the date that they are available for use, assets, other thangoodwill,from the estimated useful lives of intangible or lossonastraight linebasisover the Amortisation is recognised in the profit value. substituted for cost, lessitsresidual cost of theasset, or other amount Amortisation iscalculated over the formulas. individual costs andfirst-in-first out using specificidentification of their cost of theinventories isassignedby necessary to make thesales. The completion and theestimated costs business lesstheestimated costs of selling price intheordinary course of realisable value istheestimated present location andcondition. Net in bringingtheinventories to their conversion andother costs incurred of all costs of purchase, costs of The cost of inventories iscomprised lower of cost and net realisable value. Inventories are measured at the 3.3.3 prospectively, where necessary. each financial year endandadjusted and residual values are reviewed at Amortisation methods, useful lives Software Computer Category Asset

Amortisa In ventories (Years) Useful tion Life 333.3% 03 Amortization Rate (%)

COLOMBO DOCKYARD PLC | Annual Report 2018 57 58 COLOMBO DOCKYARD PLC | Annual Report 2018 (b) price. initially measured at thetransaction significant financingcomponent is issue. A trade receivable without a attributable to itsacquisition or transaction costs that are directly value plus,for anitem not at FVTPL, liability isinitially measured at fair financing component) or financial receivable without asignificant A financial asset (unless itisatrade instrument. the contractual provisions of the the Company becomes aparty to liabilities are initially recognised when All other financial assets andfinancial recognised when they are originated. Trade receivables are initially (a) 3.4. the cashflow statement. cash equivalents for thepurposeof included asacomponent of cashand that are repayable ondemandare of changesin value. Bankoverdrafts cash andsubjectto insignificant risk convertible to known amounts of liquid investments which are readily deposits andshortterm highly cash balances, call deposits,demand Cash andcashequivalents comprise 3.3.4 value goods-intransit. are madefor unpaidbillsinorder to transit. Insuchsituations, estimates reporting date are treated asgoods-in received by theCompany asat the Inventory items shipped,butnot Notes to theFinancial Statements from 1 January 2018 Financial assets -Policy applicable

Classification andsubsequen measur Recognition andinitial measurement

Financial Instrumen Cash andEquiv ement ts alents t the Company may irrevocably elect investment that isnot heldfor trading, On initial recognition of anequity • FVTPL: conditions andisnot designated asat FVOCI if itmeets both of thefollowing A debt investment ismeasured at • • • designated asat FVTPL: the following conditions andisnot amortised cost if itmeets both of A financial asset ismeasured at model. following thechangeinbusiness first day of thefirstreporting period financial assets are reclassified onthe assets, in which caseall affected business model for managing financial unless theCompany changesits subsequent to their initial recognition Financial assets are not reclassified - equity investment; or FVTPL. cost; FVOCI -debt investment; FVOCI is classified as measured at: amortised On initial recognition, afinancial asset

amount outstanding. and interest ontheprincipal are solely payments of principal its con f it isheld within abusinessmodel amount of outstanding. and interest ontheprincipal are solely payments of principal its con and it isheld within abusinessmodel and both collecting contractual cash whose objective isachieved by specified dates to cash to collect contractual cash whose objective isto holdassets specified dates to cash o ws andsellingfinancial assets; tractual terms give riseon tractual terms give riseon f f o o ws that ws that f o ws;

• considered includes: to management. The information managed andinformation isprovided best reflects the way thebusinessis held at aportfolio level becausethis model in which afinancial asset is of theobjective of thebusiness The Company makes anassessment assessment: Financial assets -Businessmodel otherwise arise. an accounting mismatch that would eliminates or significantly reduces or at FVOCI asat FVTPL if doingso to bemeasured at amortisedcost otherwise meets therequirements designate afinancial asset that the Company may irrevocably financial assets. Oninitial recognition, at FVTPL. This includesall derivative as describedabove are measured measured at amortisedcost or FVOCI All financial assets not classifiedas by-investment basis. election ismadeonaninvestment- the investment’s fair value inOCI. This to present subsequent changesin •

or expected cashout duration of any related liabilities of thefinancial assets to the rate profile, matching theduration maintaining aparticular interest contractual interest income, strategy focuses onearning include whether management’s of thosepoliciesinpractice. These for theportfolio andtheoperation how realising cash the stat to theGroup’s management; portfolio isevaluated andreported sale of theassets; theperformance of the ed policiesandobjectives f o ws through the f o ws or • • • principal andinterest, theCompany cash flows are solely payments of In assessing whether thecontractual profit margin. administrative costs), as well asa risks andcosts (e.g. liquidity riskand of timeandfor other basiclending outstanding duringaparticular period associated with theprincipal amount of money andfor thecredit risk consideration for thetime value recognition. ‘Interest’ isdefined as value of thefinancial asset oninitial ‘principal’ isdefined asthefair For thepurposesof thisassessment, January 2018 interest: Policy applicablefrom 1 solely payments of principal and whether contractual cashflows are Financial assets - Assessment value basisare measured at FVTPL. performance isevaluated onafair trading or are managed and whose Financial assets that are heldfor continuing recognition of theassets. consistent with theCompany’s considered salesfor thispurpose, qualify for derecognition are not parties intransactions that donot Transfers of financial assets to third

the frequenc collected; and how and how thoserisksare managed; held within that businessmodel) model (andthefinancial assets performance of thebusiness the risksthat a sales activity. and expectations aboutfuture periods, thereasons for suchsales of salesof financial assets inprior or thecontractual cash fair value of theassets managed compensation isbasedonthe are compensated -e.g., whether managersof thebusiness y, volume andtiming ffect the f o ws applicable from 1 January 2018 Financial assets -Subsequent measurement andgainslosses:Policy the fair value of theprepayment feature isinsignificant at initial recognition. compensation for early termination) istreated asconsistent with thiscriterion if (but unpaid)contractual interest (which may alsoincludereasonable additional amount that substantially represents thecontractual par amount plusaccrued its contractual par amount, afeature that permitsor requires prepayment at an contract. Additionally, for afinancial asset acquired at adiscount or premium to may includereasonable additional compensation for early termination of the amounts of principal andinterest ontheprincipal amount outstanding, which interest criterion if theprepayment amount substantially represents unpaid A prepayment feature isconsistent with thesolely payments of principal and • • • • condition. Inmakingthisassessment, theCompany considers: timing or amount of contractual cashflows suchthat it would not meet this whether thefinancial asset contains acontractual term that could changethe considers thecontractual terms of theinstrument. This includesassessing

at FVOCI Equity investments FVOCI Debt investments at amortised cost Financial assets at FVTPL Financial assets at non-recourse features). terms tha prepa features; terms tha con tingent events that would changetheamount or timingof cash yment andextension features; and t limittheGroup’s claimto cash t may adjustthecontractual coupon rate, including variable-rate to profit or loss. losses are recognised inOCIandare never reclassified part of thecost of theinvestment. Other net gainsand unless thedividendclearly represents arecovery of Dividends are recognised asincome inprofit or loss These assets are subsequently measured at fair value. are reclassified to profit or loss. derecognition, gainsandlossesaccumulated inOCI Other net gainsandlossesare recognised inOCI.On and impairment are recognised inprofit or loss. interest method, foreign exchange gainsandlosses value. Interest income calculated usingtheeffective These assets are subsequently measured at fair derecognition isrecognised in profit or loss. are recognised inprofit or loss. Any gainor losson foreign exchange gainsandlossesimpairment cost isreduced by impairment losses.Interest income, cost usingtheeffective interest method. The amortised These assets are subsequently measured at amortised income, are recognised inprofit or loss. Net gainsandlosses,includingany interest or dividend These assets are subsequently measured at fair value. f o ws from specifiedassets (e.g., f o ws; 59 COLOMBO DOCKYARD PLC | Annual Report 2018 60 COLOMBO DOCKYARD PLC | Annual Report 2018 contractual cashflows in atransaction in which substantially all of therisksand cash flows from thefinancial asset expire, or ittransfers therights to receive the The Company derecognises afinancial asset when thecontractual rights to the Financial assets (c) or loss. Any gainor lossonderecognition isalsorecognised inprofit or loss. Interest expense andforeign exchange gains andlossesare recognised inprofit subsequently measured at amortisedcost usingthe effective interest method. interest expense, are recognised inprofit or loss.Other financial liabilitiesare at FVTPL are measured at fair value andnet gainsandlosses,includingany a derivative or itisdesignated assuchoninitial recognition. Financial liabilities financial liability isclassified asat FVTPL if itisclassifiedasheld-for-trading, itis Financial liabilitiesare classifiedasmeasured at amortisedcost or FVTPL. A losses Financial liabilities-Classification, subsequent measurement andgains applicable prior to 1 January 2018 Financial assets -Subsequent measurement andgainslosses:Policy . . . • • • • The Company classifieditsfinancial assets into oneof thefollowing categories: Financial assets -Policy applicableprior to 1 January 2018 Notes to theFinancial Statements

financial assets Available-for-sale receivables Loans and financial assets Held-to-maturity FVTPL Financial assets at

Der at FVTPL, and av held to ma loans andrec ailable for sale;and ecognition - designat - deriva - heldfor turity; tive hedginginstruments; or eivables; trading within thiscategory as: ed asat FVTPL profit or loss. gain or lossaccumulated inequity was reclassified to reserve. When theseassets were derecognised, the recognised inOCIandaccumulated inthefair value currency differences ondebt instruments, were than impairment losses,interest income andforeign Measured at fair value andchangestherein, other method. Measured at amortisedcost usingtheeffective interest method. Measured at amortisedcost usingtheeffective interest profit or loss. any interest or dividendincome, were recognised in Measured at fair value andchangestherein, including simultaneously. realise the asset andsettle theliability to settle themonanet basisor to the amounts anditintends either a legally enforceable right to set off when, theCompany currently has of financial position when, andonly amount presented inthestatement liabilities are offset andthenet Financial assets andfinancial Offsetting loss. assumed) isrecognised inprofit or cash assets transferred or liabilities consideration paid(includingany non- carrying amount extinguished andthe liability, thedifference between the On derecognition of afinancial value. modified terms isrecognised at fair a new financial liability basedonthe substantially different, in which case cash flows of themodified liability are when itsterms are modifiedandthe also derecognises afinancial liability cancelled, or expire. The Company obligations are discharged or financial liability when itscontractual The Company derecognises a Financial liabilities derecognised. the transferred assets are not transferred assets. Inthesecases, all of therisksandrewards of the but retains either all or substantially in itsstatement of financial position, whereby it transfers assets recognised The Company enters into transactions retain control of thefinancial asset. rewards of ownership anditdoesnot retains substantially all of therisksand the Company neither transfers nor asset are transferred or in which rewards of ownership of thefinancial after thereporting date (or ashorter that are possible within the12months ECLs that result from default events 12-month ECLs are theportionof instrument. over theexpected life of afinancial result from all possibledefault events Lifetime ECLs are theECLs that • asset to beindefault when: The Company considers afinancial past due. significantly if itismore than365days risk onafinancial asset hasincreased The Company assumesthat thecredit including forward-looking information. and informed credit assessment and the Company’s historical experience information andanalysis, basedon both quantitative andqualitative undue cost or effort. This includes is relevant andavailable without and supportableinformation that Company considers reasonable and when estimating ECLs, the significantly since initial recognition risk of afinancial asset hasincreased When determining whether thecredit (ECL). equal to lifetime Expected Credit Loss is always measured at anamount Loss allowances for trade receivables assets Financial instruments andcontract Non-derivative financial assets January 2018 Impairment policy: applicablefrom 1 •

days pastdue. the financial asse the borro realising security (if any isheld);or Company to actions suchas in full, without recourse by the credit obligations to theCompany wer isunlikely to pay its t ismore than180 • • observable data: credit-impaired includesthefollowing Evidence that afinancial asset is financial asset have occurred. estimated future cashflows of the that have adetrimental impactonthe impaired’ when oneor more events impaired. A financial asset is‘credit- securities at FVOCI are credit- carried at amortisedcost anddebt assesses whether financial assets At eachreporting date, theCompany Credit-impaired financial assets interest rate of thefinancial asset. ECLs are discounted at theeffective expects to receive). and thecashflows that theCompany entity inaccordance with thecontract between thecashflows dueto the all cashshortfalls (i.e.thedifference are measured asthepresent value of estimate of credit losses.Credit losses ECLs are aprobability-weighted Measurement of ECLs credit risk. which theCompany isexposed to maximum contractual periodover when estimating ECLs isthe The maximumperiodconsidered instrument islessthan12months). period if theexpected life of the • •

it isprobable tha the restructuring o a breach o significant financial borrower or issuer; reorganisation; or enter bankruptcy or other financial consider otherwise; terms that the Company would not advance by theCompany on days pastdue; default or beingmore than180 f contract suchasa t theborrower will f aloanor difficulty of the indicates that alossevent has asset isimpaired if objective evidence evidence that itisimpaired. A financial determine whether there isobjective assessed at eachreporting date to fair value through profit or lossis A financial asset not carriedat receivables) Financial assets (including to 1 January 2018 Impairment Policy: applicableprior due. procedures to recovery of amounts order to comply with theCompany’s subject to enforcement activitiesin that are written off could still be written off. However, financial assets significant recovery from theamount recovery. The Company expects no there isareasonable expectation of amount of write-off basedon whether with respect to thetimingand individually makes anassessment corporate customers, theCompany of recoveries of similar assets. For due basedonhistorical experience the financial asset is180days past off thegross carryingamount when the Company hasapolicy of writing thereof. For individual customers, asset initsentirety or aportion expectations of recovering afinancial the Company hasnoreasonable financial asset is written off when The gross carryingamount of a Write-off amount of theassets. deducted from thegross carrying measured at amortisedcost are Loss allowances for financial assets the statement of financial position Presentation of allowance for ECL in •

the disappearanc financial difficulties. market tor asecurity becauseof e of anactive

COLOMBO DOCKYARD PLC | Annual Report 2018 61 62 COLOMBO DOCKYARD PLC | Annual Report 2018 financial asset measured at amortised An impairment lossinrespect of a by historical trends. to begreater or lessthansuggested such that theactual lossesare likely economic andcredit conditions are judgment asto whether current incurred, adjusted for management’s of recoveries andthe amount of loss of theprobability of default, timing the Company useshistorical trends In assessingcollective impairment similar riskcharacteristics. by grouping together receivables with collectively assessedfor impairment that are not individually significant are but not yet identified. Receivables impairment that hasbeenincurred are thencollectively assessedfor any found not to bespecifically impaired All individually significant receivables are assessedfor specificimpairment. All individually significant receivables a specificasset andcollective level. impairment for receivables at both The Company considers evidence of evidence of impairment. fair value below itscost isobjective significant or prolonged declineinits an investment inanequity security, a market for asecurity. Inaddition,for or thedisappearance of anactive debtor or issuer will enter bankruptcy, consider otherwise, indications that a terms that theCompany would not of anamount dueto theCompany on delinquency by adebtor, restructuring are impaired canincludedefault or assets (includingequity securities) Objective evidence that financial can beestimated reliably. future cashflows of that asset that a negative effect ontheestimated the asset, andthat thelossevent had occurred after theinitial recognition of Notes to theFinancial Statements other assets. independent of the cashinflows of from continuing usethat are largely assets that generates cashinflows together into thesmallestgroup of be tested individually are grouped impairment testing, assets that cannot to theasset. For thepurposeof value of money andtherisksspecific market assessments of thetime discount rate that reflects current their present value usingapre-tax future cashflows are discounted to assessing value inuse,theestimated its fair value lesscosts to sell.In is thegreater of its value inuseand The recoverable amount of anasset each year at thesametime. the recoverable amount isestimated or that are not yet available for use, assets that have indefinite useful lives amount isestimated. For intangible exists, thentheasset’s recoverable impairment. If any suchindication whether there isany indication of at eachreporting date to determine than deferred taxassets, are reviewed Company’s non-financial assets, other The carryingamounts of the assets Impairment Policy: Non-financial reversed through profit or loss. the decrease inimpairment lossis of impairment lossto decrease, subsequent event causestheamount unwinding of thediscount. When a to berecognised through the on theimpaired asset continues account againstreceivables. Interest loss andreflected inanallowance Losses are recognised inprofit or asset’s original effective interest rate. future cashflows discounted at the the present value of theestimated between itscarryingamount and cost iscalculated asthedifference impairment losshadbeenrecognised. of depreciation or amortisation, if no would have beendetermined, net exceed thecarryingamount that asset’s carryingamount doesnot reversed only to theextent that the amount. An impairment lossis used to determine therecoverable has beenachangeintheestimates impairment lossisreversed if there decreased or nolonger exists. An for any indications that thelosshas is assessedat eachreporting date assets, recognised inprior periods An impairment lossinrespect of other recognised inprofit or loss. amount. Impairment lossesare exceeds itsestimated recoverable if thecarryingamount of anasset An impairment lossisrecognised incurred. recognised in profit or loss when method. Any gainor lossesare using theprojected unitcredit (PUC) according to theformula method, obligation at thereporting date, present value of thedefined benefit statement of financial positionisthe The liability recognised inthe Local Subsidiary comprehensive income. immediately recognise inother Any actuarial gainsor lossesarise projected unitcredit (PUC)method. the advice of anactuary, usingthe obligation at thereporting date, with present value of thedefined benefit statement of financial positionisthe The liability recognised inthe Compan 3.5.1. 3.5.

Post-Employment Benefits Defined Benefit Plan y through itsregular assessments. identify theimpairment ininventory made when theCompany/Group Provision for slow moving stocks are Stocks 3.6.2. The estimates are revised annually. made based on historical experiences. provision for Ship repair services is estimated figures. However, warranty on thecontractual andprojects for all construction contracts based Provision for warranty jobsismade 3.6.1. financial statements. accounted for inpreparing the All known provisions have been required to settle theobligation. outflow of economic benefit will be reliably, anditisprobable that an obligation that canbeestimated has apresent legal or constructive result of apastevent theGroup A provision isrecognised if, asa 3.6. incurred. as anexpense inprofit or loss when contribution plans are recognised contributions to thedefined with therelevant statutes. Employer’s relevant contributions fundsinline Fund Contributions are covered by Contributions andEmployees’ Trust for Employees’ Provident Fund All employees who are eligible Employee TrustFund – Employees’ Provident Fund and 3.5.2. force, inthecountry of incorporation. respective legislative enactments in statements inaccordance with the Provisions are madeinthefinancial Foreign Subsidiary

Provisions Pro Pro Defined Con vision for Slow Moving forvision Warranty tribution Plans revenue. used for the purposeof recognition of The following specificcriteria are revenue recognition will not occur. reversal intheamount of cumulative highly probable that asignificant recognised to theextent that itis Under SLFRS15,revenue is judgment. point intimeor over time–requires timing of thetransfer of control –at a goods or services –Determining the a customer obtain control of the SLFRS 15,revenue isrecognise when when revenue recognised. Under determining whether, how muchand comprehensive framework for SLFRS 15establisheda Note 32. applying SLFRS15isdescribedin been re-stated. The effect of initially comparative information have not on adoption of thisstandards there was nosignificant impact SLFRS 15from 1 January 2018. As The company hasinitially applied 2018 customers – Applicable from 1 Jan Revenue from contract with Revenue recognition 3.7.1.1. the Group. material salesto customers outside repairing, heavy engineeringand revenue from shipbuilding, 3.7.1. 3.7. The Group r

Income Statement Re Revenue venue Recognition evenue represents 3.7.1.1.1. reported onanet basis. Foreign currency gainsandlossesare expenses. value of theassets andtherelated proceeds ondisposal,thecarrying recognised having deducted from property, plant andequipment Profits or lossesfrom disposal of payment isestablished. when thegroup’s right to receive the Revenue from dividends is recognised 3.7.1.1.2. the estimated total costs. for work performed to date bear to to theproportion that, costs incurred Completion ismeasured by reference expense immediately. The Stage of the expected lossisrecognised asan total cost will exceed total revenue, recoverable. When itisprobable that of cost incurred that are likely to be revenue isrecognised to theextent contract cannot beestimated reliably, outcome of aconstruction /service of-Completion Method). When the respective project (Percentage- to thestageof completion of the comprehensive income by reference reliably, revenue isrecognised inthe / service contract canbeestimated When theoutcome of aconstruction Engineering Offshore EngineeringandHeavy 3.7.1.1.3. usually ondelivery of thegoods. the goodshave passedto thebuyer, risks andrewards of ownership of is recognised when thesignificant Revenue from thesaleof goods

Ship Repairs, ShipB Other Sale o Income f Goods uilding, 63 COLOMBO DOCKYARD PLC | Annual Report 2018 64 COLOMBO DOCKYARD PLC | Annual Report 2018 between thefinance expense andthe under finance leasesare apportioned Minimum leasepayments made expense, over theterm of thelease. an integral partof thetotal lease received may berecognised as term of thelease.Lease incentives loss onastraight-line basisover the leases are recognised inprofit or Payments madeunder operating 3.7.2.3. made. is more thantheprovision already or lossonly if theactual cost incurred customers are charged to theprofit the terms of warranty entered with the Costs incurred by theCompany under 3.7.2.2. property, plant andequipment. known liabilitiesanddepreciation on assets, slow moving stocks, all been madefor impairment of financial loss for the year. Provisions have also statement inarrivingat theprofit or has beencharged to theincome equipment inastate of efficiency maintaining theproperty, plant and operations of thebusinessandin All expenses incurred inday to day 3.7.2.1. 3.7.2. accrual basis. Other income isrecognised onan over theleaseterm. accounted for onastraight-line basis leases oninvestment properties is Rental income arisingfrom operating goods. buyer, usually ondelivery of the the goodshave beenpassedto the risks andrewards of ownership of recognised when thesignificant Income from scrap salesare Notes to theFinancial Statements

Lease P Warran Opera Expenditure R ting Expenses ty Claims/Provisions ayments ecognition amount includedindetermination expense/(reversal) is theaggregate – LKAS 12on‘Income taxes’, tax As per SriLanka Accounting Standard 3.7.4. effective interest method. recognised inprofit or lossusingthe receivable). Interest expenses are financial assets (Other thantrade impairment lossesrecognised on at fair value through profit or loss, in thefair value of financial assets discount onprovisions, changes ‘Borrowing Costs’), unwinding of the (Not capitalisedunder LKAS –23 interest expenses onborrowings Finance costs comprises of effective interest method. recognised asitaccrues, usingthe profit or loss.Interest income is financial assets at fair value through loans, andchangesinthefair value of income onfundsinvested andstaff Finance income comprises of interest (Expenses) 3.7.3. borrowing of funds. Group incursinconnection with the consist of interest andother costs that period they occur. Borrowing costs borrowing costs are expensed inthe of therespective assets. All other are capitalisedaspartof thecost get ready for itsintended useor sale takes asubstantial periodof timeto production of assets that necessarily to acquisition, construction or Borrowing costs directly attributable 3.7.2.4. of theliability. of interest ontheremaining balance as to produce aconstant periodicrate each periodduringtheleaseterm so The finance expense isallocated to reduction of theoutstandingliability.

Borro T Ne axation t Finance Income/ wing Costs 3.7.4.1 such determination ismade. as appropriate intheperiod which and/deferred taxassets/liabilities the current year’s income taxcharge Such differences will beadjusted in amounts that were initially recorded. of thesematters may differ from the income, where thefinal taxoutcome taxes, basedonestimates of taxable recognises liabilitiesfor anticipated Comprehensive Income. The group directly inequity or inOther extent itrelates to items recognised comprehensive income except to the (reversal) isrecognised inthe deferred tax.Income taxexpense/ Therefore, itconsists of current and respect of current anddeferred taxes. of profit or lossfor theperiodin Statements. (Note 09and28) the respective notes to theFinancial The relevant details are disclosedin carried out. the countries in which operations are with therelevant statutes inforce in overseas operations inaccordance Income taxhasbeenprovided on provisions of theInlandRevenue Act. and computed inaccordance with the reported intheFinancial Statements elements of income andexpenditures Lankan operation isbasedonthe The provision for income taxonSri reporting date. or substantively enacted by the amount are thosethat are enacted and taxlaws usedto compute the of InlandRevenue. The taxrates paid to theCommissioner General expected to be(recovered from) or are measured at theamount for thecurrent andprior periods Current Income taxliabilities(assets)

Curren t Taxes available. which discrete financial information is assess itsperformance, andfor be allocated to thesegment and make decisions aboutresources to chief operating decision-maker) to management committee (being the are reviewed regularly by theGroup components, whose operating results with any of theGroup’s other expenses that relate to transactions expenses, includingrevenues and which itmay earnrevenues andincur engages inbusinessactivitiesfrom component of theGroup that An operating segment isa 3.8. reporting date. or substantively enacted asat the tax laws) that have beenenacted is settled, basedontaxrates (and the asset isrealised or theliability expected to apply to the year when measured at thetaxrates that are Deferred taxassets andliabilities are tax benefit will berealised. is nolonger probable that therelated date andreduced to theextent that it assets isreviewed at eachreporting The carryingamount of deferred tax can beutilised. forward of unusedtaxlosses/credits temporary differences andcarry available against which thedeductible that future taxable profits will be to theextent that itisprobable Deferred taxassets are recognised for financial reporting purposes. liabilities andtheir carryingamounts between thetaxbasesof assets and differences at thereporting date the liability method, onall temporary De 3.7.4.2 ferred taxation isprovided, using

Segmental Deferred Taxation Information Statements. the respective notes to theFinancial The relevant details are disclosedin allocated onareasonable basis. segment as well asthosethat canbe items directly attributable to a adopted. Segment results include to transaction with third partiesis arm’s lengthbasisinmanner similar on fair market prices where the Inter-segment transfers are based Statement. purpose of presentation of CashFlow the operating cashflows for the and interest paidisclassifiedunder classified asfinancingcashflows cash flows, while dividendpaidis received are classifiedasinvesting Interest received anddividends change in value. and subjectto an insignificant riskof convertible to known amount of cash term investments that are readily in hand,cashat bankandshort and cashequivalent comprise cash ‘Statement of CashFlows’. Cash Accounting Standard -LKAS 7on in accordance with SriLanka prepared usingthe‘indirect method’ The cashflow statement hasbeen 3.10. Statements. the respective notes to theFinancial The relevant details are disclosedin price hasbeingcharged or not. the other, irrespective of whether a and operating policies/decisions of significant influence over thefinancial has theability to control or exercise of thetransactions in which oneparty Disclosure hasbeenmadeinrespect 3.9.

Cash Flow PartyRelated Transactions Statement Statement of CashFlows. cash equivalent for thepurposeof the included asacomponent of cashand of theGroup’s cashmanagement are demand andforming anintegral part borrowings that are re payable on Bank overdrafts andshortterm R 3.12. outstanding duringtheperiod. weighted average number of shares shareholders of theCompany by the profit or lossattributable to ordinary Basic EPS is calculated by dividing the 3.11. become effective. adopt thosestandards when they statements. The Group intends to applied inpreparing thesefinancial Accounting Standards have not been Statements. Accordingly, these applied inpreparing theseFinancial the Reporting date have not been issued butnot yet effective asat to standards which have been New standards andamendments Not YetEffective S 3.13. where necessary. made intheFinancial Statements, adjustments to or disclosures are is considered andappropriate occurring after thereporting period The materiality of theevents are authorisedfor issue. date when thefinancial statements end of thereporting periodandthe unfavourable that occur between the are thoseevents favourable and Events after thereporting period tandards (SLFRS) Issued But eporting Period

Events Occurring After the Earnings Per Sri Lanka AccountingSri Share 65 COLOMBO DOCKYARD PLC | Annual Report 2018 66 COLOMBO DOCKYARD PLC | Annual Report 2018 -IFRS 17 Insurance Contracts Effective Date -1 January 2022 -Amendments to SLFRS3 -Amendments to LKAS 1andLKAS 8 -Amendments to References to Conceptual Framework inSLFRSstandards Effective Date -1 January 2020 Arrangements, LKAS12 Income Taxes. - Annual Improvements to SLFRS3-Businesscombinations, SLFRS11– Joint - Annual Improvements to SLFRS Standards 2015-2017 Cycle- various standards. - Plan Amendment, Curtailment or settlement (Amendment to LKAS 19). 28). - Long- term interests in Associates and Joint Ventures (Amendments to LKAS - Prepayment features with negative compensation (Amendments to SLFRS9). - IFRIC23Uncertainty over Tax Treatments. Effective Date -1 January 2019 have asignificant impactontheGroup’s consolidated financial statements. The following amendedstandards andtheinterpretations are not expected to 3.13.1 Notes to theFinancial Statements income andexpenses. Actual results may differ from theseestimates. application of accounting policiesand thereported amounts of assets, liabilities, management to make judgments, estimates andassumptions that affect the The preparation of financial statements inconformity with SLFRSsrequires 4. SFS1 essSLFRS16eliminates the SLFRS16Leases Standard New or amended

CRITICAL ACCOUNTINGESTIMATES JUDGMENTS AND

Other standar on or after 1 January 2019. reporting periods beginning SLFRS 16iseffective for lease accounting similar to current finance accounting model that is single On-Balance Sheet Instead, there will bea Sheet operating leases. leases andOff-Balance On-Balance Sheet finance distinguishes between model for leases which current dual accounting Requirement Summary of the ds Group. financial statements of the significant impactonthe expected to have a 16. This standard isnot application of SLFRS resulting from the its Financial Statements the potential impacton The Group isassessing statements consolidated financial Possible impacton below: statements are includedinthetable material adjustment inthefinancial a significant riskof resulting ina estimates uncertainties that have Information aboutassumptions and affected. are revised andinany future periods in theperiod which theestimates accounting estimates are recognised an ongoingbasis.Revisions to assumptions are reviewed on Estimates andunderlying readily apparent from other sources. of assets andliabilitiesthat are not judgments aboutthecarryingamount which form thebasisof makingthe under thecircumstances, theresults that are believed to bereasonable experience and various other factors assumptions are basedonhistorical Estimates andunderlying claims for warranty Provision benefits Employee liabilities tax assets / Deferred assets Intangible equipment plant and Property, expense Income tax judgement estimate/ accounting Critical Note 6188 26.1 971-73 09 585-87 25 680-81 16 378 13 11 Disclosure reference 74-77 Page

Suppl P Specialized Shipbuilding Others Resear Bulk Carriers Barge Offshore Support Mo Cement Carriers Na Dredgers Gross Profit/Segmental Results (Note 5.3) LPG Tugs Less: Costo T Fishing T Turno Gr Passenger Ma Container H General Cargo Shipbuilding Tankers Ship Repair 5.1 Ship Repair 5. For the year Ended 31stDecember, otal Revenue assenger Vessels eavy Engineering

oss Revenue (Note 5.1,5.2) vel Vessels

terial &Other Sales tor Yacht Tankers

REVENUE ver Tax y Vessels

Project Types Segment Revenue (BusinessSegment)

ch Vessel

rawlers

Carriers Vessels

Vessels f Sales

Vessels

(13,602,250) 14,963,676 14,946,583 6,869,782 6,869,782 6,544,284 1,767 1,548,136 1,344,333 5,927, 5,927, (Rs.’000 (Rs.’000 692,699 268,032 344,087 325,498 491,850 403,243 129,630 618,017 147,839 186,431 116,186 510,137 610,121 121,724 (17,093) 43,545 47,287 47,461 2018 2018 ,469 741 741 - ) )

Group Group

12,929,096 12,934,989 (11,162,224) 6,038,107 6,038,107 5,285,395 1,042,965 1, 1,17 5,943,131 5,943,131 (Rs. (Rs.’000 678,680 649,084 308,505 502,020 766,872 678,952 578,832 173,880 891,203 199,165 275,0 116,426

96,488 59,308 73,530 13,999 10,256 53,816 71,720 (5,893) 5,695 ’000) 2017 2017 71 )

13,169,000 13,169,000 (12,292,132) 6,869,782 6,869,782 6,544,284 1,767 5,927, 5,927, (Rs. (Rs. 876,868 692,699 268,032 344,087 325,498 491,850 403,243 129,630 147,839 186,431 116,186 371,477 510,137 610,121 121,724 43,545 47,287 47,461 ’000) ’000) 2018 2018 ,469 741 741 - - - Compan Compan

(10,607 12,052,630 12,052,630 6,038,107 6,038,107 5,285,395 1,042,964 1,445,487 1,17 5,943,131 5,943,131 (Rs. (Rs. 649,084 308,505 502,020 678,952 578,832 173,880 891,203 199,165 116,426 96,488 59,308 73,530 13,999 10,256 53,816 71,720 71,392 y y 5,695 ’000) ’000) 2017 2017 ,143) - - 67 COLOMBO DOCKYARD PLC | Annual Report 2018 68 COLOMBO DOCKYARD PLC | Annual Report 2018

Others Qa P N Pakistan Belgium Cyprus No Sey US Hong K Greec German Japan

Singapore Ma Sales Srilanka Po U Repairs &M Ma Iraq China Services Hea Maldives Heavy Fabrication Heavy Engineering Shipbuilding France For the year Ended 31stDecember, Notes to theFinancial Statements Ship repairs 5.3 India 5.2 Geographical Segement Revenue oland AE etherlands wer Generation tar A rway terial &Other Sales terial Sales

chelles

vy Engineering

e Segmental

ong

y

aintenance

Results

14,963,676 14,963,676 6,544,973 1,483,770 3,590,811 1,548,136 1,344,333 1,77 1,121,189 (Rs.’000 102,908 160,629 376,455 730,277 141,680 289,551 618,017 541,108 175,284 168,412 98,608 60,945 97,906 56,563 22,905 82,952 40,120 21,082 40,145 18,925 37,445 62,317 15,081 4,104 2018 - - - )

Group 12,934,989 12,934,989 5,349,456 1,766,872 4,097 1,552,17 1,262,110 (Rs.’000 678,680 106,07 383,405 405,801 160,284 578,831 184,543 136,223 275,0 121,650 201,301 116,190 147 118,918

50,940 117 69,325 45,033 29,482 50,281 12,410 83,113 2017 ,720 ,015 ,745 520 71 0 5 - - - - - )

13,169,000 13,169,000 6,544,973 3,590,811 (Rs. 876,868 496,827 102,908 270,7 966,371 730,277 141,680 289,551 371,478 541,108 98,608 60,945 42,030 56,563 58,657 22,905 82,952 40,120 21,082 84,274 40,145 18,925 37,445 62,317 15,081 ’000) 2018 50 41 - - - - - Compan

12,052,630 12,052,630 5,334,362 4,097 1,445,487 1,262,110 (Rs. 106,07 383,405 684,910 578,831 184,543 136,223 121,650 116,190 147 50,940 117 15,600 69,325 45,033 29,482 50,281 26,310 71,392 12,410 y (1,166) ’000) 2017 ,720 ,015 ,745 520 0 ------

Pro Miscellaneous Income Lease R Amortization o Managemen

Ne Pro Amortization of Pre paidstaff cost (Note 19.2) Dividend Income Other Interest Income Scr Interest Income from Investments Interest Income production of aqualifyingasset aspartof project cost andnot asaninterest cost, andcharge to theCostof Sales. assets’. Company treated interest cost onsuchloans, which were directly attributable to theacquisition, construction or (2017 -Rs.61.47 Mn) which was related to theshipbuildingprojects which were fallen under thedefinition of ‘qualifying 7.1 Interest onBankOverdrafts andShort Term Loans (Note 7.1) Interest Expense 7. Exchange Gain(both realized andunrealized) 6. For the year Ended 31St December,

t Changeinfair value of financial instrument at FVTPL ap Sales fit onsaleof investments valued at fair value through OCI fit/(Loss) ondisposal of Property, Plant andEquipment NET FINANCEINCOME/(EXPENSE) OTHER INCOME In accordance with LKAS 23Borrowing cost, Company hasincurred aninterest costs amounting to Rs.60.67Mn ental

t Fees

f Corporate Guarantees

1,024,141 (Rs.’000 308,500 847,369 348,472 214,658 135,075 (39,972) (39,972) 55,300 40,077 31,097 47,417 1,610 2018 10 - - - - )

Group

(Rs. 190,033 289,767 272,924 381,555

(91,788) (91,788) 90,478 26,297 76,572 47 34,372 14,125 5,244 3,614 ’000) 2017 ,962 - - - -

1,060,224 (Rs. 260,596 847,369 220,631 156,106 134,691 (39,965) (39,965) 30,483 35,970 54,434 19,573 37,242 1,608 ’000) 2018 1,7 675 918 51 - Compan

(Rs. 201,816 289,371 197 197 89,693 (91,7 (91,7 76,572 25,843 13,626 12,958 47, 18,617 y 5,659 ’000) 2017 1,7 ,207 ,631 639 704 918 40) 40) 51 - 69 COLOMBO DOCKYARD PLC | Annual Report 2018 70 COLOMBO DOCKYARD PLC | Annual Report 2018 Amortization o

- Defined Con - Defined Benefit PlanCost-Gratuity Sta - Salariesand Wages - - Obsole Pr - BadandDoubtful Debts Impairmen Bad deb Dona Amortiza Deprecia Business Promo - A Audit Directors’ Emoluments Is stated after charging all expenses includingthefollowing; 8. For the year Ended 31St December, Notes to theFinancial Statements Warranty Claims ovision for/(Reversal of)

ff Related Cost PROFIT ors Remuneration -Onstatutory audit tions t written-off te andSlow Moving Stocks tion of Intangible Assets tion onProperty Plant &Equipment

t lossonProperty Plant &Equipment tribution PlanCost- f Pre-paid Staff Cost BEFORE TAX tion Expenses

udit related services

ETF EPF

3,698,186 (Rs.’000 150,896 180,553 432,7 25,663 13,806 29,429 37,368 75, 31,097 45,138 (7,566) 3,963 2,473 8,153 2018 765 243 59 75 )

Group

3,459,492 (Rs. 420,232 148,128 17

30,859 25,530 26,297 42,729 13,883 29,101 (7,825) 3,690 1,076 0,917 ’000) 3,17 2017 706 75 5 -

3,520,515 (Rs. 406,880 170,882 145,465 68,636 30,483 20,185 13,209 42,721 17,210 17,013 (1,083) 2,345 ’000) 2018 243 75 - - Compan

3,347 (Rs. 164,593 401,376 143,602 16,880 25,843 29,972 13,357 41,148 21,814 y 6,150 2,190 ’000) 2017 ,162 706 75 - - - To De Tax expense on Total Comprehensive Income Def Unr Under/( instances where recoverability isnot possibledueto thetaxstatus, sumspaidare written off to theprofit or loss. Economic Service Charge (ESC) paidby Companies operating within SriLanka isavailable asIncome Tax Credit. In 9.2 has beenmadeintheaccounts accordingly. Ceylon Shipping Agency (Pte) Ltd. Singapore (CSA) isliablefor taxation at therate of 17% onitstaxable profit andprovision (ii) As per theInlandRevenue Act, theCompany isliableto pay income taxat 28%onprofits from construction contracts. Dockyard General Engineering Services (Pvt)Ltd Group Tax losses-carryingf Deduction of Inv Business income As per theInlandRevenue Act No. 24of 2017 theCompany isliableto pay income taxat following rates: Compan (i) 9.1 On theCurrent years Profit (Note 9.3) 9. For the year Ended 31St December,

tal Tax expense onprofit/(loss) ferred taxonOther Comprehensive Income estment income

Income Income Tax inSriLanka erred Taxation (Note 16.3) ecoverable ESC INCOME TAXEXPENSE Economic Service Charge Taxation onProfits Over) Provision inprevious year y Tax onOverseas Operations taxlossesagainsttotal statutory income

orward

(Rs.’000 123,414 86,266 127,111 47, (3,697) (6,57 2018 (334) 753 4) )

Group

(Rs. 109,57 101,105

28,066 39,255 41,947 (8,163) 8,465 ’000) 2017 0

14% -28% 14% -28% 6 y (Rs. 100% (18,082) ears 26,909 29,671 47, (2,762) ’000) 2018 753 - - Compan

(Rs. 60,578 20,7 39,255 69,417 y 8,839 ’000) 2017 533 90 -

COLOMBO DOCKYARD PLC | Annual Report 2018 71 72 COLOMBO DOCKYARD PLC | Annual Report 2018 Pro T T Tax a Tax Tax lossclaimedduringthe Other S General Engineering Services (Pvt)Ltd S Tax L Statutory Profit/(Loss) from Business S Inland Revenue Act no24of 2017 Unclaimable T Pro Adjustmen Allowable Expensesfor Taxation Se Disallow T Int General Engineering Services (Pvt.)Ltd. asat 31stDecember 2018. The deferred taxasset isarrived at by applying the income taxrate of 28% to thetemporary differences of Dockyard Dockyard General Engineering Services (Pvt)Ltd. Subsidiaries applicable is15.04%.(2017 -14.67%) the income taxrates of 28%and14%applicablefor different sources of profit. The effective taxrate (Weighted Average) Since the Company’s income isliablefor income taxat different rates, thedeferred taxasset is arrived at by applying Company 9.5 Tax Loss Brought Forward 9.4 Profit/(Loss) before tax 9.3 For the year Ended 31St December, Notes to theFinancial Statements ax at theRate of 28% ax at theRate of 17% ax Loss for the year of assessment tatutory Profit/(Loss) from Ceylon Shipping Agency (Pte) Ltd tatutory Profit/(Loss) from Dockyard tatutory Profit/(Loss) from ColomboDockyard PLC er group adjustments toff againstthecurrent taxable income

vision for Taxation onCurrent Year Profit

able Income fit Exempt from Tax t theRate of 14% oss CarriedForward sources of Income Deferred Taxation Reconciliation of Tax Loss Reconciliation between current taxexpense andtheaccounting profit able Expensesfor Taxation t for theprevious year of assessment ax Losses resulting dueto

year

2,720, 2,720, (Rs.’000 460,889 (432,437) (432,437) (439,7 496,849 306,043 693,939 (113,831) 432,437 432,437 751,043 86,266 35,960 85,692 12,563 2018 765 765 574 45) - - - - - )

Group

(1,045,625) 3,867,663 2,720, (Rs. (166,976) (385,432) (314,097) (534,222) (414,344) 158,567 135,664 135,664 160,472 314,097 617

39,7 41,947 (1,026) (1,026) 2,246 ’000) 2,931 2017 ,015 765 01 - - -

2,720, 2,720, (Rs. (432,437) (432,437) 636,202 (375,331) 432,437 432,437 432,437 171,566 171,566 ’000) 2018 765 765 ------Compan

(1,045,625) 3,867,663 2,720, (Rs. (314,097) (314,097) (414,344) (312,392) (517 588,7 314,097 (73,103) (73,103) (1,026) (1,026) y 1,905 ’000) 2,931 2017 ,348) 765 533 533 46 - - - - - transactions andbalances. *Company average number of shares in2018 Earnings/(L Japanese Number Number of Ordinary Shares Danish Kroners Pr Colombo Dockyard PLC (Rs.’000) Singapor N E Profit/(Loss) for theperiod(Rs.’000) Amount usedastheNumerator U The principleexchange rates used for conversion of foreign currency transactions andbalances are asfollows; 10.2 calculated asfollows : shareholders of Company/Group by the weighted average number of ordinary shares inissueduringthe year and The calculation of theearnings/(loss)per share hasbeen derived by dividingprofit/(loss) attributable to equity 10.1 10. December 2018. The deferred taxliability isarrived at by applying theincome taxrate of 17% to thetemporary differences of CSA asat 31st Ceylon Shipping Agency (Pte) Ltd. (CSA) uro . S.Dollar on Controlling Interest (Rs.’000) ofit Attributable to Equity Shareholders of

EARNINGS/(LOSS) PERSHARE ForeignCurrency Translations Earnings/(Loss) P of Ordinary Shares usedastheDenominator e Dollars Yen usesexchange rates (average) publishedby Bankof Ceylon (BOC),for theconversion of foreign currency

oss) Per Share (Rs.)basedon weighted

er Share

AND FOREIGN CURRENCY TRANSLATIONS

71,858,924 (Rs.’000 331,600 337,47 189.82 119.53 161.01 (5,875) 25.53 2018 2018 (Rs.) 4.61 1.46 Av 5 erage Rate )

Group

71,858,924 (Rs.

26,094 25,354 172.98 152.45 111.06 23.29 ’000) 2017 2017 (Rs.) 0.35 (740 1.36

)

71,858,924 (Rs. 144,657 144,657 209.24 183.00 134.08 28.06 Closing Ra ’000) 2018 2018 (Rs.) 1.66 2.01 - Compan

71,858,924 (Rs. te (Spot) (142,520) (142,520) 152.78 187.27 114.38 y ’000) 24.52 (1.98) 2017 2017 (Rs.) 1.36 -

COLOMBO DOCKYARD PLC | Annual Report 2018 73 74 COLOMBO DOCKYARD PLC | Annual Report 2018 Notes to theFinancial Statements 11. PROPERTY, PLANT AND EQUIPMENT 11.1 Group FREEHOLD

Drydocks Land Road Building Plant Electrical Motor Inventory Office Loose Boats & Capital Total

ways Machinery Installation Vehicles Items Equipment Tools Launches Work

& Furniture In

Equipment & Fittings Progress

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

COST

Balance as at 01st January 2018 1,159,195 62,950 14,190 1,319,244 5,099,869 293,893 238,090 75,633 397,345 317,827 6,494 83,989 9,068,718

Additions during the year - - - 20,742 170,993 4,831 3,667 4,335 24,659 33,068 - 550,084 812,379

Transfers/Adjustments during the year - - - 30,902 93,082 3,932 (8,670) 8,670 (467) - - (169,366) (41,917)

Disposals during yearthe - - - - (23,111) - (1,969) (14) (12,717) (30,953) - - (68,764)

Exchange Gain /Loss ------475 - - 78 553

Balance ast 31sta December 2018 1,159,195 62,950 14,190 1,370,888 5,340,833 302,656 231,118 88,624 409,295 319,942 6,494 464,785 9,770,969

ACCUMULATED DEPRECIATION

Balance as at 1st January 2018 628,372 - 10,136 584,163 2,855,369 260,962 143,918 54,674 307,460 304,803 6,308 66 5,156,230

Chargeor f the year 23,750 - 1,042 52,810 271,618 9,802 27,033 4,343 27,731 14,444 186 - 432,759

Disposals - - - - (23,102) - (1,969) (10) (12,345) (30,417) - - (67,843)

Exchange Gain/Loss ------467 - - 78 545

Balance ast 31sta December 2018 652,122 - 11,178 636,973 3,103,885 270,764 168,982 59,007 323,313 288,830 6,494 144 5,521,691

IMPAIRMENT (Note A)

Balance as at 01st January 2018 ------

Impairment lossor thef year - - - - 2,327 - - - 136 10 - - 2,473

Balance as at 31st December 2018 - - - - 2,327 - - - 136 10 - - 2,473

CARRYING AMOUNT

As at 31st December 2018 507,073 62,950 3,012 733,915 2,234,621 31,892 62,136 29,617 85,846 31,102 - 464,641 4,246,805

As at 31st December 2017 530,823 62,950 4,054 735,081 2,244,500 32,931 94,172 20,959 89,885 13,024 186 83,923 3,912,488 Note A Impairment of Property, Plant and Equipment During the year ended 31st December 2018, Dockyard General Engineering Services (Pvt) Ltd recognised an impairment loss amounting to Rs. 2,474,087/- for items of Property, Plant and Equipment found to be damaged in the site situated in Mahawatte, Colombo 14, as follows:

Cost Carrying BeforeImpairment Value

(Rs.’000) (Rs.’000)

Plant, Machinery and Equipment 6,626 2,327

LooseTools 461 10

Office quipment,E Furniture and Fittings 975 136

8,062 2,473

11.2 Company FREEHOLD

Drydocks Land Road Building Plant Electrical Motor Inventory Office Loose Boats & Capital Total

ways Machinery Installation Vehicles Items Equipment Tools Launches Work

& Furniture In

Equipment & Fittings Progress

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

Balance as at 01st January 2018 1,159,195 45,785 14,190 1,295,644 5,031,293 294,199 181,218 75,636 379,387 272,946 6,495 64,784 8,820,768

Additions during the year - - - - 130,394 4,524 3,350 4,374 21,255 19,350 - 508,213 691,455

Transfers/Adjustments during the year - - - 30,902 93,082 3,932 (8,670) 8,670 (467) - - (169,366) (41,917)

Disposals during yearthe - - - - (23,067) - (1,969) (14) (12,668) (27,550) - - (65,268)

Balance as at 31st December 2018 1,159,195 45,785 14,190 1,326,546 5,231,702 302,655 173,920 88,666 387,507 264,746 6,495 403,631 9,405,038

ACCUMULATED DEPRECIATION

Balance as at 01st January 2018 628,372 - 10,136 566,042 2,816,152 260,961 109,087 54,667 294,765 267,839 6,310 - 5,014,331

Chargeor f the year 23,750 - 1,042 52,810 261,938 9,802 18,856 4,343 25,867 8,287 185 - 406,880

Transfers/Adjustments during the year ------(6,930) 6,930 - - - - -

Disposals during theear y - - - - (23,067) - (1,969) (10) (12,329) (27,550) - - (64,925)

Balance as at 31st December 2018 652,122 - 11,178 618,852 3,055,023 270,763 119,044 65,930 308,303 248,576 6,495 - 5,356,286

CARRYING AMOUNT

As at 31st December 2018 507,073 45,785 3,012 707,694 2,176,679 31,892 54,876 22,736 79,204 16,170 - 403,631 4,048,756

As at 31st December 2017 530,823 45,785 4,053 729,590 2,215,141 33,237 72,131 20,964 84,635 5,107 187 64,785 3,806,437

COLOMBO DOCKYARD PLC | Annual Report 2018 75 76 COLOMBO DOCKYARD PLC | Annual Report 2018 Valua Cost No. of Buildings (f) Valua Cost No. of Buildings Extent of theLand (e) Ext Valua Cost No. of Buildings (d) Valua Cost No. of Buildings Extent of theLand ( Valuation Cost No. of Buildings Extent of theLand (b) Valua Cost No. of Buildings Extent of theLand (a) owned by theGroup. Valuation details of thelandsof theGroup are asfollows, Ltd, asat 31stDecember 2017. This valuation hadbeencarriedoutfor thepurposeof disclosingthemarket value of lands The landsof theGroup have beenrevalued by anindependent chartered valuation firm,Sunil Fernando & Associates (Pvt) 11.3 Valuation of Land Notes to theFinancial Statements Extent of theLand Extent of theLand c)

ent of thebuildingisabove freehold lands25,134sqm(2014-sqm) Land depicted asL The landisusedfor Land depicted as L Land depicted asL Executiv Land depicted asL Company isbuiltonthisland. Land depicted asallo situated within thePort of Colombo,adjoiningtheSriLanka Port Authority. Land depicted asL spaces. Services (Private) Limited asanoperating lease.

tion tion tion tion tion

e quarters of theCompany isbuiltonthisland.

ot No.01 inplanNo.LS/P/223 at ColomboDockyard PLC, Port of Colombo,Colombo15. This landis ot No. 3BinplanNo. 2579 at Colombo 15. This landiskept for thepurpose of constructing office ot No isplanNo. 3347 at No. 2,Srimath Bandaranayaka Mawatha, Colombo12. ot No.01 inPlanNo. 250at Colombo14,thislandisleasedto Dockyard General Engineering ot A inPlanNo.1347 dated 6th June 1981at Colombo15. Dockyard General Engineering Services (Private) Limited’s Materials SalesCenter.

tment of landinPlanNo.562 dated 27th August 1960at Nuwara Eliya Holiday Bungalow of the Rs. 27,600,000/- Rs. 19,829,000/- 01 12.69 Per Rs. 35,800,000/- Rs. 14,300,000/- 01 7.15 P Rs. 77,800,000/- Rs.2,865,000/- 02 103.7 Rs. 85,100,000/- Rs.3,219,000/- 01 89.62 Per Rs. 60,784,000/- Rs.1,807 01 37 Rs. 3,836,250,000/- Rs.20,931,444/- 02 852.5 Per .99 Perches 5 Perches erches ,000/- ches ches ches

As at 31stDecember, Boats/Launches Office E Inv Mo Electrical Installa Plan Roadw Fr Valua Cost No. of Buildings Extent of theLand Ltd., asat 31stDecember 2017. Valuation details of thelandisasfollows, Services (Pvt.)Limited, has beenrevalued by anindependent Chartered Valuation firm,Sunil Fernando & Associates (Pvt.) Land depicted asL Freehold Drydocks Land rented to Dockyard General Engineering Services (Pvt)Ltd 12. As at 31stDecember, 11.4 eehold Buildings entory Items tor Vehicles

t, Machinery andEquipment

INVESTMENT PROPERTY tion Gross carryingamount of fully depreciated Property Plant andEquipment. ays quipment, Furniture andFittings

tion

ot No.01 inPlanNo.250 at Mahawatte, Colombo14, which isleasedto Dockyard General Engineering

Rs. 77,800,000/- Rs. 2,865,000/- 02 103.7

5 Perches

2,040,168 2,983,522 (Rs.’000 (Rs.’000 320,276 236,952 206,122 122,728 41,782 6,495 3,784 5,215 2018 2018 - ) )

Group Group 2,210,056 1,492,392 (Rs. (Rs. 190,094 156,999 225,185

94,840 38,830 3,784 ’000) ’000) 5,215 2,71 2017 2017 7 -

2,032,487 2,925,912 (Rs. (Rs. 232,207 206,122 302,121 95,699 41,782 6,495 2,865 3,784 ’000) ’000) 5,215 2018 2018 Compan Compan

2,157 1,486,252 (Rs. (Rs. 190,094 218,920 138,844 38,830 72,411 y y 2,865 3,784 ’000) ’000) 5,215 2,71 2017 2017 ,067 7

COLOMBO DOCKYARD PLC | Annual Report 2018 77 78 COLOMBO DOCKYARD PLC | Annual Report 2018

Carrying Amount Balanc

Charge f Balance at thebeginningof the year Amortiza Balanc Ceylon Shipping

A Company A Balance at thebeginningof the year Cost 13. As at 31stDecember, Notes to theFinancial Statements Dockyard General Engineering Services (Private) Limited attributable for the respective investments. The Board of Directors’ assessedthefair value of investments insubsidiariesas follows basedonthenet assets 14.1 Ceylon Shipping Agency (Private) Limited Services (Private) Limited Dockyard General Engineering 14. dd: Fair Value of Financial Guarantees dditions duringthe year

INTANGIBLE ASSETS INVESTMENTS INSUBSIDIARIES The Direct e at theendof the year e at the endof the year or the year

tion Agency (Pte) Ltd

or’s assessment of thefair value of investments.

Inc orporated Singapore Sri Lanka in

Shares

25,500 61,999 No o f 2018

Per

centage Holding 100% (Rs.’000 51% 85,620 85,620 60,581 13,806 74,387 11,233

2018

(Rs. - )

Group 3,460 ’000) 4,7 Cost 930 357 47 (Rs.

46,698 85,620 25,039 60,581 13,883 84,911 ’000) 2017 709 Shares 25,500 61,999 No o

f

1,176,850 1,257,012 Per (Rs. (Rs.’000 58,880 72,089 80,162 81,766 81,766 13,209 2017 centage 9,677 Holding ’000) 2018 2018 100% - ) Compan

51%

1,055,535 (Rs. (Rs. 992,690 (Rs. 58,880 22,886 62,845 81,766 81,766 45,523 13,357 y ’000) ’000) 2017 2017 ’000) 2,785 3,816 Cost 6 357 7 5 - Group Company As at 31st December, 2018 2017 2018 2017 No of Cost Fair No of Cost Fair No of Cost Fair No of Cost Fair Shares Value Shares Value Shares Value Shares Value / Units (Rs.’000 (Rs.’000) / Units (Rs.’000) (Rs.’000) / Units (Rs.’000) (Rs.’000) / Units (Rs.’000) (Rs.’000) 15. OTHER INVESTMENTS 15.1 Investments Classified as Fair Value through OCI 15.1.1 Investments in shares Sri Lanka Port Management and Consultancy Services Limited 1,002 10 15,880 1,002 10 14,591 1,002 10 15,880 1,002 10 14,591 Associated Newspapers of Ceylon Limited 10,000 100 2,101 10,000 100 1,600 10,000 100 2,101 10,000 100 1,600 110 17,981 110 16,191 110 17,981 110 16,191

15.2 Investments Classified as Fair Value through Profit or Loss Group Company 2018 2017 2018 2017 No of Cost Fair No of Cost Fair No of Cost Fair No of Cost Fair Shares Value Shares Value Shares Value Shares Value (Rs.’000 (Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000)

15.2.1 Investment in Unit Trusts NDB Wealth Money Plus 2,953,621 54,109 56,633 6,214,384 100,000 106,838 ------First Capital oneyM Market Fund 15,760 23,082 23,342 131,012 132,054 140,303 ------CapitalAlliance Money Market Fund 3,592,269 50,000 57,855 3,592,269 50,000 51,524 ------127,191 137,830 282,054 298,665 - - - -

15.2.2 Investment in Quoted Debentures Sampath Bank PLC 500,000 50,000 50,475 500,000 50,000 50,630 ------Citizens Development Business Finance PLC 500,000 50,000 47,820 1,500,000 150,032 146,961 ------Merchant Bank of Sri Lanka & Finance PLC - - - 140,800 14,326 14,254 ------People’s Leasing & Finance PLC - - - 150,000 15,262 15,175 ------100,000 98,295 229,620 227,020 - - - - 227,191 236,125 511,673 525,685 - - - - 79 COLOMBO DOCKYARD PLC | Annual Report 2018 80 COLOMBO DOCKYARD PLC | Annual Report 2018

T Tempor Tempor Tempor Tempor

Temporary Difference onProperty Plant &Equipment Group Balanc recognized inComprehensive Income Pro T recognized inOther Comprehensive Income Pro T Balanc T Transferred from Deferred Tax liability recognized inProfit/(Loss) Provision/(Reversal) duringthe year 16.3 Pr Balance at thebeginningof the year 16.2 (Provision)/Reversal duringthe year (Note No. 16.3) Balance at thebeginningof the year 16.1 16. As at 31stDecember, Notes to theFinancial Statements emporary Difference on Tax Losses carriedforward ransferred from Deferred Tax Asset ransferred to Deferred Tax Asset ransferred to Deferred Tax liability ovision/(Reversal) duringthe year (Note No. 16.3) vision/(Reversal) duringthe year vision/(Reversal) duringthe year

DEFERRED TAXA (Provision)/Reversal for the year Deferred TaxLiability DeferredTax Asset e at the endof the year e at theendof the year ary Difference onProvision for BadandDoubtful Debts ary Difference on Warranty Provision ary Difference onStock Provision ary Difference onRetirement Benefit Obligations

TION

Temporary Differ (3,039,477) 2,720, (Rs.’000 (Rs.’000 859,966 107,006 787,083 125,088 68,636 83,407 18,082 93,787 11,508 12,561 10,271 (3,697) 6,574 1,053 ence 2018 765 - - - - ) )

Group

2018 Temporary Differ Eff (Rs. (Rs. 409,080 (471,230

107 (28,066) (28,066) 134,019 112,527 131,651

(36,531) 10,320 19,248 ect on 13,458 8,465 1,053 1,053 1,053 ence ’000) ’000) 2017 ,006 T ax - - - -

)

T Differ emporary (3,071, 2,720, (Rs. (Rs. 107,006 725,667 125,088 915,103 88,368 20,844 18,082 18,082 73,181 (2,762) ence ’000) ’000) 2018 765 749) ------Compan

2017 T Diff emporary Eff (Rs. (Rs. (459,467) 107 136,380 105,953 399,125 127, (20,7 (20,7 (29,629) erence ect on 15,493 14,422 y 8,839 ’000) ’000) 2017 ,006 796 Tax 90) 90) ------

As at, 31stDecember, at 31stDecember 2018,inaccordance with LKAS 12paragraph 46. Management has measured thedeferred taxasset by applying thetaxrates asper InlandRevenue Act No. 24of 2017 as T Tempor T Tempor Tempor Less: Pr Temporary Difference onProperty Plant &Equipment Company Goods in Balanc Amoun Pro Balance at the beginningof the year 17.1 Raw Materials 17. emporary Difference on Tax Losses carriedforward emporary Difference on Warranty Provision

vision/(Reversal) madeduringthe year

INVENTORIES Movement inProvision for Inventories e at theendof the year ts written off duringthe year ovision for Inventories (Note 17.1) ary Difference onProvision for BadandDoubtful Debts ary Difference onStock Provision ary Difference onRetirement Benefit Obligations Transit

Temporary Differ (2,929,711) 2,720, (Rs.’000 (Rs.’000 883,288 831,949 905,341 841,832 821,934 (83,407) 68,636 88,368 54,090 83,407 22,053 76,337 (7,566) 2,605 ence 2018 765 ) )

Group

2018 Temporary Differ Eff (440,496) (Rs. (Rs. 409,080 833,884 125,088

126,573 7 (88,368) 652,17 181,7

88,368 10,320 62,7 ect on 45,516 11,478 29,101 (3,440) 8,133 ence ’000) ’000) 2017 T 09 07 ax 5

T Differ (3,005,325) emporary 2,720, (Rs. (Rs. 899,062 702,603 778,940 756,887 729,428 (76,337) 22,053 76,337 77,420 37 77,420 (1,083) ence ’000) ’000) 2018 ,505 765 - - Compan

2017 T Diff emporary Eff (440,869) (Rs. (Rs. 724,909 647 107 399,125 131,889 181,692 543,217 erence 50,888 (77,420 ect on 29,972 77,420 (3,440) 11,357 y 5,502 ’000) ’000) 2017 ,006 ,489 Tax - )

COLOMBO DOCKYARD PLC | Annual Report 2018 81 82 COLOMBO DOCKYARD PLC | Annual Report 2018

Other Forward exchange contracts usedfor hedging Curr Pre paidS Ec Non Curr Balance at theendof the year Loans given to employees (Note No. 19.1) Deposits andPrepa Curren Tr Forw VAT Recoverable L Pr Ac Less: Pr Loans Gr Balance at the beginningof the year 19.1. Loans given to employees (Note No. 19.1) Non Current 19. Balanc Bad deb R Pr Balance at thebeginningof the year 18.1 Trade Receivables 18. As at, 31stDecember, Notes to theFinancial Statements oans Recovered duringthe year eversals madeduringthe year ansfer to Pre Paid Staff Benefits e paidStaff Benefits (Not No. 19.2) ovision madeduringthe year onomic Service Charges crued Revenue

ent

Other Financial Assets IncludingDerivatives TRADE AND OTHER RECEIVABLES ard exchange contracts usedfor hedging Receivables Loans given to employees Movement inProvision for BadandDoubtful Debts e at theendof the year t

ovision for BadandDoubtful Debts (Note No 18.1) ts written off duringthe year anted duringthe year ent taff Benefits (Note No. 19.2)

yments

2,978,692 5,823,456 2,891,502 1,555,398 (Rs. (213,843) 300,829 467,400 467,400 630,453 578,399 628,344 160,944 160,944 336,901 222,507 238,7 792,272 (89,095) 243,155 717,439 549,117 (87,190 66,003 23,092 75, 87,190 19,578 59,119 15,714 (8,153) ’000) 2018 765 49 -

)

Group

3,843,301 1,986,7 7,1 1,967,1 (Rs. (186,249) 465,689 630,453 630,453 239,652 207 145,309 145,309 164,764 357 560,122 248,851 567,851 563,271 414,813 414,813

(19,578) 50,876 (70,331) 30,578 19,578 79,216 19,455 (9,035) (3,17 ’000) 1,210 2017 ,883 ,935 52 74 5) - -

2,710,069 1,230,843 5,103,343 2,641,433 (Rs. (211,444) 558,001 298,354 159,836 159,836 534,837 614,567 614,857 238,7 776,310 455,021 455,021 (68,636) 701,477 (86,620) 221,303 241,473 213,014 68,636 68,636 64,102 22,518 59,119 15,714 ’000) 2018 49 - - - Compan

6,7 1,825,528 1,825,528 3,697 (Rs. (183,694) 546,656 556,904 454,568 159,999 614,568 239,652 404,337 404,337 542,052 614,567 206,471 244,163 241,357 142,319 142,319 55,487 (67 17 50,231 y ’000) 2017 ,680 ,621 ,911) ------

Ceylon Shipping Dockyar Colombo Dockyard PLC Cash inHand The loansgiven to employees are secured andinterest ischarged at thefollowing rates: Cash at Bank Curren Call N Balance a Repur Amortization Fixed Deposits 21.1 21. Dockyard General Engineering Services (Pvt)Ltd 20. Additions duringthe Balance at thebeginningof the year 19.2. As at 31stDecember, on Current

Deposits

CASH AND CASH EQUIVALENTS AMOUNTS DUEFROMRELATED P chase Agreements Favourable Balances Prepaid Staff Benefits t

d General Engineering Services (Private) Limited t theendof the year

Agency (Private) Limited year

ARTIES

R elationship Subsidiary

4,914,690 1,039,469 3,533,727 (Rs.’000 (Rs.’000 288,097 (31,097) 66,003 44,000 89,095 23,092 49,861 70,331 9,397 2018 2018 - - ) )

Group Group

5,060,826 6.5% -7 4,455,960 Housing (Rs. (Rs. 400,051 177 (26,297)

50,876 54,096 19,000 42,532 19,455 70,331 L ’000) ’000) 8,417 oans 2017 2017 3.0% ,398 7.5% .5% - -

1,039,469 2,975,187 4,115,043 (Rs. (Rs. Vehicle 147,238 147,238 (30,483) 86,620 64,102 91,647 49,192 22,518 L 67,911 8,7 ’000) ’000) oans 2018 2018 10% 10% 40 - - Compan Compan

4,642,295 W 4,141,394 (Rs. (Rs. 400,051 edding (25,843) 86,052 86,052 93,167 17 50,231 52,591 L 41,163 67,911 y y 7,683 ’000) ’000) oans 2017 2017 ,680 0% - - - 83 COLOMBO DOCKYARD PLC | Annual Report 2018 84 COLOMBO DOCKYARD PLC | Annual Report 2018

As at 31stDecember, per individual present at meeting of theshareholders or one vote per share inthecaseof apoll. The holderso of theCashFlow Statement Cash andE forecast sales,againstthefuture exchange rate movements. Risk management strategy - To secure the value of USDto bereceived by bankonconversion of JPY denominated Hedged item - JPY denominated forecast salesto incur till Feb. 2020 Hedging instrument -Forward agreement to sell JPY andbuy USD cumulative gainor losspreviously recognised inOther Comprehensive Income istransferred to theIncome Statement. transaction occurs (when theforecast revenue isrealised). If theforecast transaction isnolonger expected to occur, the The amount recognised inOther Comprehensive Income istransferred to theIncome Statement when thehedge rates associated with the Japanese Yen (JPY) denominated forecast sales. The riskmanagement objective of thecashflow hedgeisto hedgetheriskof variation intheforeign currency exchange 22.4 measured at fair value through OCI. Fair value through OCIreserve includeschangesof fair value of financial instruments designated asfinancial assets 22.3 assets. Available-for-sale reserve includeschangesof fair value of financial instruments designated asavailable for salefinancial 22.2 Ceylon Shipping(Pte.) Ltd. Exchange Equalization Reserve includestheexchange differences arisingontranslation of theGroup’s foreign operation - 22.1 71,858,924 Ordinary Shares (2017-71,858,924) Issued andFully paid 22. Bank Overdrafts 21.2 As at 31stDecember, Notes to theFinancial Statements

STATED CAPITAL Cash Flow Fair Value Through OCIReserve Available-For-Sale Reserve Exchange Equalization Reserve Unfavourable Balances f Ordinary shares are entitled to receive dividendsasdeclared from timeto timeandare entitled to one vote

quivalents for thepurpose Hedge Reserve

4,914,610 (Rs.’000 (Rs.’000 714,396 2018 2018 (80) ) )

Group Group

5,058,622 (Rs. (Rs. 714,396

(2,204) ’000) ’000) 2017 2017

4,115,043 (Rs. (Rs. 714,396 ’000) ’000) 2018 2018 - Compan Compan

4,642,295 (Rs. (Rs. 714,396 y y ’000) ’000) 2017 2017 - R Unrec Pr Fair T As at 31stDecember, 3 to 6months. Majority of working capital facilities have beencollateralized againststock intrade. No Balance a Presen Balance a Actuarial (gain)/loss recognized inOther Comprehensive Income Adjustmen Present value of unfunded obligations 25.1 Pa Pro Balance at the beginningof the year 25. Corporate Guarantees Current 24. Loan r Loans obtained duringthe year Balance at thebeginningof the year 23.1 Short Term Loans (Note No. 23.1) Payable within one year 23. As at 31stDecember, otal present value of obligations ecognized liability for defined benefit obligations esent value of net obligations yments madeduringthe year te: Shortterm loanshave beenobtained for working capital financingfrom commercial banksandare repayable within vision madeintheprofit/(loss) duringthe year (Note No. 25.3) value of plan assets

EMPLOYEE BENEFITS OTHER FINANCIAL LIABILITIES INCLUDING DERIVATIVES INTERES ognized net actuarial gains/(losses) The amount r Short Term epayments duringthe year t value of fundedobligations t theendof the year t theendof the year (Note Nos. 25.1,25.2) t inrespect of Exchange Rate Fluctuations T BEARINGBORROWINGS Loans

ecognized intheStatement of Financial Position are asfollows;

(7,892,012) 3,494,446 6,7 2,712,300 2,712,300 2,712,300 (Rs.’000 (Rs.’000 (168,727) 859,965 859,965 859,965 859,965 859,965 150,896 357,678 915,103 (37,307) 52,188 2018 2018 - - - - - ) )

Group Group

(10,510,164) 3,494,446 3,494,446 3,494,446 6,489,451 7,409, (Rs. (Rs. (146,202) 854,257 915,103 105,416 915,103 915,103 915,103 915,103 148,128

58,920 ’000) ’000) 2017 2017 743 - - - - -

(7,892,012) 3,494,446 6,7 2,712,300 2,712,300 2,712,300 (Rs. (Rs. 899,062 (168,727) 357,678 841,832 841,832 841,832 841,832 841,832 145,465 (33,968) 52,188 ’000) ’000) 2018 2018 930 930 - - - Compan Compan

(10,510,164) 3,494,446 3,494,446 3,494,446 6,489,451 7,409, (Rs. (Rs. 899,062 899,062 899,062 899,062 899,062 838,925 143,602 (143,71 105,416 60,252 y y ’000) ’000) 2017 2017 675 675 743 7) - - - 85 COLOMBO DOCKYARD PLC | Annual Report 2018 86 COLOMBO DOCKYARD PLC | Annual Report 2018 -Female Re Sta Ra arriving at theretirement benefit liability under Projected UnitCredit (PUC)method. Dockyard General Engineering Services (Pvt)Ltd, appliedtheformula method andusedthefollowing key assumptions in Dockyar R -Female Re Liability f Sta Int Ra Current service costs Ra Int Benefit paidb R December 2018amounting to Rs.842Mnandusedthefollowing key assumptions. The actuarial valuations carriedoutby M/s Piyal SGoonetileke and Associates for retiring gratuity for employees asat 31st Colombo Docky 25.4 Current service costs 25.3 Actuarial Liability for defined benefit obligations asat 1st January 25.2 As at 31stDecember, Notes to theFinancial Statements ate of Interest ate of Interest erest Cost erest onobligation te of Salary Increment te of COLA Increment te of Salary Increment tiring Age (Years) -Male tiring Age (Years) -Male ff Turnover Factor ff Turnover Factor

Gain/(Loss) r Expense rec Movement inthepresent value of defined benefit obligations d General Engineering Services (Pvt)Ltd (gains)/losses or defined benefit obligations asat 31stDecember

y theplan

ard PLC ognized inProfit or Loss for the year ended,

ecognized inOther Comprehensive Income

(Rs.’000 (168,727) 859,965 150,896 915,103 (37,307) 96,019 96,019 54,877 54,877 37,307 2018 )

Group

(Rs. (146,202) 854,257 915,103 (58,920) 148,128

58,920 53,957 53,957 94,171 94,171 ’000) 2017

(Rs. 899,062 (168,727) 841,832 145,465 (33,968) 10.00% 10.50% 33,968 94,402 94,402 11.00% 51,063 51,063 8.00% ’000) 2018 2018 2018 6% 60 1% 1% 50 50 55 Compan

(Rs. 899,062 838,925 143,602 (143,71 (60,252) 10.50% 10.50% 13.00% 92,987 92,987 60,252 50,615 50,615 y ’000) 2017 2017 2017 6% 8% 60 50 50 1% 1% 55 7) benefit obligation asaresult of reasonable changesinkey assumptions occurring at theendof thereporting period. The sensitivity anal Decrease by onepercentage point Increase b As per thecurrent assumptions The sensitivity anal Effect ontheEmployee Benefit Obligation below: A quantitative sensitivity analysis for significant assumptions usedby theCompany asat 31stDecember 2018isasshown Dockyard General Engineering Services (Pvt)Ltd benefit obligation asaresult of reasonable changesinkey assumptions occurring at theendof thereporting date. Decrease b Increase b As per thecurrent assumptions Effect ontheEmployee Benefit Obligation below: A quantitative sensitivity analysis for significant assumptions usedby theCompany asat 31stDecember 2018 is asshown Colombo Dockyard PLC 25.5

Sensitivity o y onepercentage point y onepercentage point y onepercentage point ysis above have beendetermined basedonamethod that extrapolates theimpactonemployee ysis above have beendetermined basedonamethod that extrapolates theimpactonemployee f Assumptions Used

Discoun Discoun (Rs. (Rs. 888,848 799,549 841,832 18,992 17 18,134 ’000) ’000) Ra Ra ,403 te te t t

Escalation Escalation (Rs. (Rs. 800,599 886,811 841,832 Salary Salary 17 16,391 18,134 ’000) ’000) Rat Rat ,889 e e 87 COLOMBO DOCKYARD PLC | Annual Report 2018 88 COLOMBO DOCKYARD PLC | Annual Report 2018

VA ESC P Other P Accrued ExpensesandOther Provisions Balance a As at 31stDecember, Pro E Progress Bills Balance a T Under/( Dockyar Subcon P Dividends declared duringthe Balance at thebeginningof the year 29. Pr Balance at the beginningof the year 28. Ceylon Shipping Agency (Pvt)Ltd 27. Balance a Claims madeduringthe y Pro Balance at thebeginningof the year 26.1 Trade Payables 26. As at 31stDecember, Notes to theFinancial Statements ax paidduringthe year SC Setoff ayments during the year ovision for Income Tax oncurrent year’s profits T Payable vision for Warranty Claims(Note 26.1) vision/(Reversals) madeduringthe year

INCOME TAXPAYABLE AMOUNTS DUE T TRADE AND OTHER PAYABLES DIVIDEND PA ayable Provision for Warranty Claims ayables tract Payables Over) provision of Income Tax inrespect of prior year d General Engineering Services (Pvt)Ltd t theendof the year t theendof the year t theendof the year

YABLE

ear O RELATED PARTIES

year

3,008,839 (Rs.’000 (Rs.’000 (118,788) 594,346 274,050 425,450 950,221 107, 631,527 (36,651) (16,762) 83,968 86,330 39,458 34,623 93,787 93,787 37,368 26,152 73,181 15,152 2018 2018 (334) 788 - - - - - ) )

Group Group

2,023,905 3, (Rs. (Rs. 244,630 778,412 509,731 541,655 357

(55,447) 56,286 34,623 26,810 75,023 26,152 41,947 73,181 26,191 73,181 (8,163) (2,918) 1,076 ’000) ’000) 2017 2017 ,932 568 (39) - - - - -

2,351,434 (Rs. (Rs. (118,788) 425,450 950,221 107, 431,455 378,125 121,790 164,571 54,090 54,090 39,458 72,635 37,505 26,152 42,781 15,152 17,210 ’000) ’000) 2018 2018 (625) 788 ------Compan Compan

2,023,905 3,333,156 (Rs. (Rs. 382,586 108,264 396,154 357 113,271 26,810 37 37 26,152 34,273 99,131 26,191 14,140 y y (2,918) 6,150 ’000) ’000) 2017 2017 ,505 ,505 ,932 (533) 533 (39) ------

Bank ov To Dividend pa Income Amoun Other financial Tr To Loans andborrowings -Current SOFP LineItem: Other Financial Liabilities Financial Liabilities Cash andcashequiv To Unquot Fair Investment insubsidiaries SOFP LineItem: To Amounts duefr Other financial assets includingderivatives -Current Tr Other financial assets includingderivatives -Non Current SOFP LineItem: Amortised c T Investments classifiedasfair value through profit or loss SOFP LineItem: Fair Financial Assets The Financial Instruments recognize intheStatement of Financial Position are asfollows: 30.1 30. As at 31stDecember, otal ade andother payables ade andother receivables tal tal tal tal value through other comprehensive income value through profit andloss

FINANCIAL INS

Financial Instrumen ts dueto related parties ed share investments erdrafts Tax payable yable ost liabilitiesincludingderivatives -Current om related parties

alents

TRUMENTS

ts -Statement of Financial Position (SOFP)

No 20 26 28 29 27 24 23 18 19 19 15 15.2 14 te 21 21

4,830,660 4,830,580 4,020,675 4,914,690 3,228,403 2,019,160 2,712,300 9,189,471 (Rs.’000 236,125 236,125 243,155 549,117 83,968 17,981 17,981 15,152 2018 80 - - - - )

Group 5,060,826 3,088,525 5,035,954 3,494,446 8,691,228 5,033,7 2,458,072 1,478,529 (Rs. 465,689 525,685 525,685 164,764

34,623 26,152 16,191 16,191 2,204 ’000) 2017 50 - - - -

4,254,708 4,254,708 2,854,447 2,712,300 7,915, 3,777 4,115,043 1,361,7 (Rs. 534,837 241,473 164,571 147,238 22,728 17,981 15,152 4,7 ’000) 2018 ,995 766 930 55 47 - - - - Compan

4,668,385 4,668,385 3,494,446 2,056,97 4,642,295 7 2,7 1,033,841 (Rs. ,419,895 454,568 159,999 20,007 86,052 113,271 57,593 26,152 16,191 y 3,816 ’000) 2017 675 4 - - - - 89 COLOMBO DOCKYARD PLC | Annual Report 2018 90 COLOMBO DOCKYARD PLC | Annual Report 2018 Rs. 227Mn)andInvestment inUnit Trusts amounting to Rs.138Mn(2017 -Rs.299Mn) F Corpor Financial Liabilities

Fair Unquoted equity investments -Unquoted shares Financial Assets As a

Corporate Guarantee Financial Liabilities

Fair value through profit or lossinvestments A Unquoted equity investments -Unquoted shares Financial Assets

Level 03: Level 02: Level 01: techniques. The Group usesthefollowing hierarchy to determine anddisclosethefair value of financial instruments by valuation 30.2 Notes to theFinancial Statements air value through Profit or Loss investments consists of Investment inQuoted Debentures amounting to Rs.98Mn(2017 - s at 31.12.2018 value through profit or lossinvestments t 31.12.2017

Financial Instrumen ate Guarantee

Techniques tha either dir Other t Quot observable market data. ed (unadjusted) prices inactive market for assets or liabilities.

echniques for which all inputs with significant effect ontherecorded fair values are observable ectly or indirectly. ts Carriedat Fair Value t useinputsthat have significant effect ontherecorded fair value that are not basedon

(Rs. ‘000) Le vel 01 ------

(Rs. ‘000) Le 525,685 525,685 236,125 236,125 Group vel 02 ------

(Rs. ‘000) Le vel 03 17 17 16,191 16,191 ,981 ,981 ------

(Rs. ‘000) Le vel 01 ------

(Rs. ‘000) Compan Le vel 02 ------y

(Rs. ‘000) Le vel 03 17 17 16,191 16,191

,981 ,981 930 930 675 675 - - Group’s objectives, policies andprocedure for measuring andmanagingrisks. This note represents qualitative andquantitative information abouttheGroup’s exposure to eachof theabove risks,the short term borrowings, trade andother payables andother financial liabilities. other comprehensive income andenter into derivative transactions. The Group’s principal financial liabilitiescomprise of term investments that arisedirectly from itsoperations. The Group alsoholdsinvestments valued at fair value through The Group hastrade andother receivables, other financial assets including loansgiven to employees and cashshort • • • including: In thecourse of itsbusiness,theGroup isexposed to anumber of risksarisingfrom itsuseof financial instruments, 31. significant unobservable inputs,holdingother inputsconstant, onProfit &Loss. unobservable inputsused,includingasensitivity analysis onpossiblechangesat thereporting date to oneof the Following tableshows the valuation techniques usedinmeasuringlevel 1,2&3fair value as well asthesignificant 30.3

Type 01. Unquoted 02. Investment in 03. Investment

(ii) (i) —Mark ——Liquidity R Credit R instruments equity Unit Trusts Debentures in Quoted

FINANCIAL RISK

Valuation techniques andsignificant unobservable inputs et Risk Int Currenc erest Rate risk isk isk y risk Valuation Technique above method. investments have been valued using valuation technique, theunquoted In theabsence of any other appropriate Net Assets per share Basis for Unittrustsasat 31stDecember 2018 Available quoted market trading prices Debenture issuedate. unavailability of subsequent trades after similar treasury bond’s yield, dueto adjusted usingaprice formula using for Debentures asat 31stDecember 2018 Available quoted market trading prices MANAGEMENT inputs unobservable Significant o plcbeNtApial Not Applicable Not Applicable Not Applicable o plcbeNtApial Not Applicable Not Applicable Not Applicable o plcbeNtApial Not Applicable Not Applicable Not Applicable measurement fair value inputs and unobservable significant between Inter relationship Decrease Increase Profit/(Loss)

COLOMBO DOCKYARD PLC | Annual Report 2018 91 92 COLOMBO DOCKYARD PLC | Annual Report 2018 payment statistics asat every reporting date. decided to assess eachreceivable separately based onthesegment, ageof customer relationship, historical data of is different, developing anallowance matrix asa whole would beimpracticable. Therefore theBoard of Directors has respect of Trade Receivables. Since the Company andGroup operates inanenvironment where eachcustomer contract The Company andtheGroup establishesanallowance for impairment that represents itsestimate of expected lossesin Impairmen T Inv Amount duefr Cash a Inv Other financial assets includingderivatives T As at 31stDecember, the reporting date was asfollows; The carryingamount of financial assets represents themaximumcredit exposure. The maximumexposure to credit riskat 31.1.1 amounts asat statement of financial positiondate. the financial assets, without considering collateral (if any) of theCompany andtheGroup are approximately their carrying liquid assets with thecounter partiesthat have anexisting businessrelationship. The maximum credit riskexposure of Group’s exposure to baddebt isnot significant. The Group limitsitsexposure to credit riskby investing only inshortterm an ongoingbasis(approval procedures) andobtaining bankguarantees from third parties when required, result that the The Group trades only with recognized, creditworthy third parties.Itisthegroup policy that all balances are monitored on including trade receivables, shortterm investments andother financial assets. to incur afinancial loss. The Group isexposed to credit riskfrom itsoperating activitiesandfrom itsfinancingactivities, Credit riskisthethat oneparty to afinancial instrument will fail to discharge anobligation andcausetheother party 31.1 in which all employees understandtheir roles andobligations. training andmanagement standards andprocedures, aimsto maintain adisciplinedandconstructive control environment systems are reviewed regularly to reflect changesinmarket conditions andtheGroup’s activities. The Group, through its to set appropriate risklimitsandcontrols, andto monitor risksandadherence to limits.Risk management policiesand Framework. The Group’s riskmanagement policiesare establishedto identify andanalyse theriskfaced by theGroup, The board of directors hastheoverall responsibility of establishingandoverlooking theGroup’s Risk Management Risk Management Framework Notes to theFinancial Statements otal exposure to thecredit risk rade andother receivables estments classifiedasfair value through OCI estments classifiedasfair value through profit or loss

Credit Risk t bankandinhand Exposure t t Losses om related parties o credit risk

4,914,690 3,228,403 (Rs. ‘000) 9,189,471 792,272 236,125 17,981 2018 -

Group 5,060,827 2,458,072 8,691,228 (Rs. ‘000) 630,453 525,685

16,191 2017 -

2,854,447 7,915, (Rs. ‘000) 4,115,043 776,310 147,238 22,728 2018 766 - Compan

2,056,97 4,642,295 (Rs. ‘000) 7,419,895 614,567 20,007 86,052 y 2017 4 -

Bank ov Other

Financial F

Bank overdrafts Mor Other 181-365 Days Within 180Da Financial and control market riskexposures within acceptable parameters while optimizing thereturns. Group’s income or the value of itsholdingof financial instruments. The objective of market riskmanagement isto manage Market riskisthe that changes inmarket prices, suchasforeign exchange rates, interest rates etc.; will affect the 31.3 Followings are thecontractual maturity of financial liabilitiesasat 31stDecember 2018: cash equivalents andsecured committed fundingfacilities from financial institutions. To measure andmitigate liquidity risk,theGroup monitor itsnet operating cashflow, maintain asufficient level of cashand liabilities that are settled by delivering cashor another financial asset. Liquidity riskisthethat theGroup will encounter difficulty inmeeting theobligation associated with itsfinancial 31.2 Age The agingof Trade receivables at thereporting date was: ollowing are thecontractual maturity of financial liabilitiesasat 31stDecember 2017: e than365Days

financial liabilities financial liabilities Market Risk Liquidity R erdrafts Liabilities Liabilities

ys

isk

4,830,660 Less than Less than 4,830,580 2,978,692 5,035,954 5,033,7 1,060,7 (Rs. ‘000) (Rs. ‘000) (Rs. ‘000) 1,825,342 one year one year Amoun 92,610 Gross 2,204 80 50 40 t

Mor Mor Expect (Rs. ‘000) (Rs. ‘000) (Rs. ‘000) Group Group one year one year Losses (87,190 (19,028) (67 e than e than Credit Group ,975) (187) ed

------

)

4,830,660 4,830,580 5,035,954 5,033,7 2,891,502 (Rs. ‘000) (Rs. ‘000) (Rs. ‘000) 1,825,155 1,041,712 Amoun 24,635 2,204 To To Ne 80 tal 50 tal t t

Less than Less than 4,668,385 4,668,385 1,580,067 4,254,708 2,710,069 4,254,7 (Rs. ‘000) (Rs. ‘000) (Rs. ‘000) one year one year 1,051,310 Amoun 78,692 Gross 08 - - t

Mor Mor Company Expect Company (Rs. ‘000) (Rs. ‘000) (Rs. ‘000) one year one year Compan (68,636) Losses (19,028) (49,421) e than e than Credit (187) ed ------

y

4,668,385 4,668,385 4,254,708 1,57 4,254,7 (Rs. ‘000) 2,641,433 (Rs. ‘000) (Rs. ‘000) 1,032,282 Amoun 29,271 9,880 To To Ne 08 tal tal - - t t 93 COLOMBO DOCKYARD PLC | Annual Report 2018 94 COLOMBO DOCKYARD PLC | Annual Report 2018 borrowings or investments asat thereporting date, which results material interest rate risk. short term debt obligation andinvestments with variable interest rates. Group doesnot have any variable rate longterm in market interest rates. The group exposed to therisk of changesinmarket interest rates relates primarily to theGroup’s Interest rate riskisthethat thefair value of thefuture cashflows of financial instruments fluctuate becauseof changes (ii) Singapore Dollars Eur U. S.Dollar A Singapor E U. S.Dollar A Sensitivity Anal (5% movement) Increase/(Decrease) inPrincipal Exchange rates end of thereporting period. The analysis assumesthat all other variables, inparticular interest rates, remain constant. analysis isbasedonforeign currency exchange rate variances that theGroup considered to bereasonably possibleat the December 2018 would have increased/(decreased) theequity andprofit or lossby theamounts shown below. This A strengthening or weakening of SriLankan Rupees asindicated below, againstthemajor foreign currencies asat 31st Japanese Danish Kroners Singapor E U as follows : The principal exchange rates usedby theGroup for conversion of foreign currency balances andtransactions, for the year the samecurrency andamounts. forecasted currency exposures or hedgenaturally by amatching salesandpurchases or matching assets andliabilitiesof The riskisminimized by hedging thecurrency either by forward foreign exchange contracts inrespect of actual or currency other thanthefunctional currency which isSriLankan Rupees (LKR). rates. The Group isexposed to currency riskonsales,purchases, borrowings andinvestments that are denominated ina The risktha (i) Notes to theFinancial Statements uro uro s at 31.12.2017 s at 31.12.2018 . S.Dollar

o Int Currency Risk

erest Rate Risk e Dollars e Dollars Yen

t thefair value or future cashflows of afinancial instrument fluctuation dueto changesinforeign exchange

ysis

189.82 119.53 161.01 25.53 2018 (Rs.) 1.46 Av erage Rate

172.98 152.45 111.06 23.29 2017 (Rs.) 1.36

Eff Str ect onProfit before Tax (Rs. ‘000) engthen 270,839 108,262 24,486 209.24 183.00 134.08 (3,656) (5,240) 28.06 Closing Ra 8,901 2018 (Rs.) 1.66

Weak (Rs. ‘000) (270,839) te (Spot) (108,262) (24,486) 152.78 (8,901) 187.27 114.38 ening 3,656 5,240 24.52 2017 (Rs.) 1.36

As a On Variable Rate Instruments

A On Variable Rate Instruments profit or lossandOCIstatement of cashflows for the year thenended31stDecember 2018. have any material impact ontheGroup’s statement of financial positionasat 31stDecember 2018anditsstatement of changes to theexisting revenue recognition criteria of theCompany andGroup. Therefore adopting SLFRS 15doesnot However basedontheImpact Analysis carriedoutby theBoard of Directors they are of the view that there won’t beany comparative information. 11 andrelated interpretations. Additionally, thedisclosure requirements inSLFRS15have not generally beenappliedto the information presented for 2017 hasnot beenrestated- i.e.itispresented, aspreviously reported, under LKAS 18,LKAS the effect of initially applying thisstandard recognised at thedate of initial application (i.e.01st January 2018). Accordingly, The Company andGroup hasadopted SLFRS15usingthecumulative effect method (without practical expedients), with a point intimeor over time-requires judgement. recognized when acustomer obtains control of thegoodsor services. Determining thetimingof thetransfer of control- at It replaced LKAS 18Revenue, LKAS 11ConstructionContract andrelated interpretations. Under SLFRS15,revenue is SLFRS 15establishesacomprehensive framework for determining whether, how muchand when revenue isrecognised. 32.1.1 throughout thesefinancial statements hasnot beenrestated to reflect therequirements of thenew standards. Due to thetransition methods chosenby theCompany andGroup inapplying thesestandards, comparative information Group’s financial statements. other standards are alsoeffective from 01st January 2018butthey donot have amaterial effect ontheCompany and The Company andGroup hasinitially appliedSLFRS15(32.1.1)and9(32.1.2)from 01st January 2018. A number of 32.1 32. (100 BasisPoints movement) Increase/(Decrease) in Variable Interest Rates variables heldconstant, of theProfit before tax: The following tabledemonstrates theGroup sensitivity to areasonably possiblechangeininterest rates, with all other instruments. The Group utilise various financial instruments to manageexposures to interest rate risksarisingdueto financial s at 31.12.2018

t 31.12.2017 INITIAL

Impact on A SLFRS 15-Re APPLICATION OF SLFRS15 AND SLFRS9 doption of New Standards venue from Contracts with Customers

- Eur - USD - Eur - USD o o

Eff ect onProfit before Tax (Rs. ‘000) Increase 26,335 (9,989) 12,346 -

Decrease (Rs. ‘000) (26,335) (12,346) 9,989 - 95 COLOMBO DOCKYARD PLC | Annual Report 2018 96 COLOMBO DOCKYARD PLC | Annual Report 2018 impairment requirements. The effect of adopting SLFRS9onthecarryingamounts of financial assets at 01st January 2018relates solely to thenew liabilities asat 01st January 2018. the new measurement categories under SLFRS9for eachclassof theGroup/Company’s financial assets andfinancial The following tableandtheaccompanying notes below explain theoriginal measurement categories under LKAS 39and 32.1.2.1 December 2018. December 2018anditsstatement of profit or lossandOCIstatement of cashflows for the year thenended31st Therefore adopting SLFRS9doesnot have any material impacton the Group’s statement of financial positionasat 31st whole isassessedfor classification. the hostisafinancial asset inthescope of thestandard are never separated. Instead, thehybrid financial instrument asa held to maturity, loansandreceivables andavailable for sale.Under SLFRS9,derivatives embeddedincontracts where asset is managedanditscontractual cashflow characteristics. SLFRS9eliminates theprevious LKAS 39categories of FVTPL. The classification of financial assets under SLFRS9isgenerally basedonthebusinessmodel in which afinancial SLFRS 9contains three principleclassification categories for financial assets: measured at amortisedcost, FVOCI and buy or sell non-financial items. The standard replaces LKAS 39Financial Instruments: Recognition andMeasurement. SLFRS 9sets outrequirements for recognising andmeasuringfinancial assets, financial liabilitiesandsomecontracts to 32.1.2 Notes to theFinancial Statements Trade andother payables derivatives Other financial liabilitiesincluding Financial Liabilities Total Financial assets derivatives Other financial assets including mut u rmrltdprisLasadrcial Amortisedcost Loans andreceivable Amounts duefrom related parties Trade andother receivables Financial assets

Classification andmeasur SLFRS 9-Financial Instrumen ement of financial assets andfinancial liabilities ts te iaca iblte Other financial Other financial liabilities te iaca iblte Other financial Other financial liabilities on n eevbeAotsdcs 3,5 630,453 630,453 Amortisedcost Loans andreceivable on n eevbeAotsdcs ,5,7 2,458,072 2,458,072 Amortisedcost Loans andreceivable under LKAS 39 Original classification liabilities liabilities under SLFRS9 classification New under LKAS ,7,2 1,478,529 1,478,529 ,7,7 3,174,577 3,174,577 carrying amount Original 60286,052 86,052 675 39 New carrying under SLFRS amount 675 9

retained earnings The following tablesummarisestheimpact,net of tax,of transition to SLFRS9ontheopeningbalance of reserves and The Company hasdetermined theapplication of theimpairment requirements of SLFRS9at 01st January 2018. under LKAS 39. model appliesto financial assets measured at amortisedcost. Under SLFRS9,credit lossesare recognised earlier than SLFRS 9replaces the‘incurred loss’ model inLKAS 39 with an‘expected credit loss’ (ECL) model. The new impairment 32.1.2.2

Impact asat 01st Impairment loss Re Impact asat 01st IFRS 9for financial assets at amortisedcost Recognition of expected impairment lossunder Impairment of Trade Receivables Total Financial liabilities Dividend payable Income Tax payable Amounts dueto Related Parties Loans andborrowings tained earnings

Impairment o

January 2018 January 2018 f financial assets

te iaca iblte Other financial Other financial liabilities te iaca iblte Other financial Other financial liabilities te iaca iblte Other financial Other financial liabilities te iaca iblte Other financial Other financial liabilities under LKAS 39 Original classification

liabilities liabilities liabilities liabilities under SLFRS9 classification New

No 18 te under LKAS

,9,4 3,494,446 3,494,446 ,4,9 5,147,696 5,147,696 carrying amount Original 1,7 113,271 113,271 46334,623 34,623 61226,152 26,152 39

opening New carrying under SLFRS

SLFRS 9on Impact of adopting amount balance 15,595 15,595 15,595 15,595 9 97 COLOMBO DOCKYARD PLC | Annual Report 2018 98 COLOMBO DOCKYARD PLC | Annual Report 2018 Ne N Non-curr Curren Non-current assets To Curren To Other Pro 34. 33. Notes to theFinancial Statements Profit Revenue 31st eliminations. adjustments onacquisition anddifferences intheGroup’s accounting policies. The information isbefore intercompany The following issummarized financial information of Ceylon Shipping Agency (Private) Limited, modifiedfor fair value elnSipn gny(rvt)LmtdSingapore Ceylon Shipping Agency (Private) Limited et asset tal comprehensive income tal comprehensive income attributable to Non Controlling Interest t asset attributable to Non Controlling Interest fit attributable to Non Controlling Interest

December, NON-CONTROLLING INTERE LIST OF SUBSIDIARIES

comprehensive income t liability t assets

ent liability

Dockyard General Engineering Services

(Private) Limited -SriLanka 100% Percentage of Holding 2018

ST 100% 2017 Colombo Dockyard PLC

business Principal place of

Ceylon Shipping Agency (Pte) Ltd.

segment Operating Trading agent Percentage of Holding 2018 51%

- Singapore 2017 Non Controlling Interest Ownership interest heldby 51%

(Rs.’000 986,943 (102,271) 258,387 156,147 16,639 33,957 21,967 11,990 76,512 082017 2018 49% 5,875 2018 31 - )

(Rs. 17 517 (53,904) 122,191 59,873 11,633 13,144 5,983 6,441 ’000) 2017 1,511 ,998 49% 740 112 - N Dividend paidto N Cash flow Cash flow Therefore noprovision ismadefor contingent liabilitiesinthefinancial statements. The company’s legal professionals are of theopinionthat theCompany will beableto defend againstthethesecases. I (c) II (a) 35. Cash flow from operating activities 31st (b)

Dockyard General Engineering Services (Private) Limited Name of theCompany Bank Bank of Ceylon PLC National Development BankPLC Commercial BankPLC Standard Chartered Bank et increase/(decrease) incashandequivalents

(Pending Proceedings) Appeals filedagainsttheHighCourtorder Action filedt Legal process dueto oil spillagePending Proceedings -Fixed for trial -DMR1420/2017 amounting to Rs.6,209,312,000/- (2017 -Rs.451,075,000/-) asat thereporting date. On behalf o Colombo Dockyar (2017- Rs.527,000,000/-) asat thereporting date.

December, CONTINGENT LIABILITIES Cases from financingactivities from investing activities f ColomboDockyard PLC, bankshave given BankGuarantees to theCompany’s suppliers/customers

o recover thecost incurred by thecompany from NMK Warehouse &Logistics (Pvt)Ltd duringcleanup on Controlling Interest duringthe year d PLC hasissuedCorporate Guarantees behalf of itsSubsidiary amounting to Rs.1,077,000,000/-

to Supreme Courtinrespect of termination of employment -SC49/2015

Letter of R.00 R.00 R.00 (Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000) 2,1 4,8 ,4,0 6,209,312 5,943,109 142,084 124,119 2,1 2762,7 212,798 25,973 62,706 124,119 Credit

- 79,378 - - Subsidiary Miscellaneous Relationship Performance & BidBonds

12011,200 11,200 - ,0,3 5,905,936 5,905,936 - Miscellaneous

,7,0 1,077,000 1,077,000 ,7,0 1,077,000 1,077,000 R.00 (Rs.’000) (Rs.’000) Bonds (Rs.’000 57,252 57,337 2018 79,378 - 85 - - )

(Rs. (39,386) (39,463) Total Total ’000) 2017 77 - - 99 COLOMBO DOCKYARD PLC | Annual Report 2018 100 COLOMBO DOCKYARD PLC | Annual Report 2018 being incompliance with Section9of theCSEListingRule. nature, theaggregate of which didnot exceed thethreshold of 10%of thegross consolidated revenue or income, thereby During the year ended31stDecember 2018,theGroup only carriedoutrelated party transactions which were recurrent in 9 of theCSEListingRules. financial year have beenreviewed by theRelated Party Transaction Review Committee andare incompliance with Section The Board of Directors are of theopinionthat therelated party transactions of theCompany andGroup duringthe This note shouldberead inconjunction with Note Nos. 14,20,27, and37(A) to theseFinancial Statements. 37. There was nocontracted capital expenditure approved by theBoard of Directors asat 31stDecember 2018. 36. Notes to theFinancial Statements nmciDcyr opn t Mr. T. Nakabe Onomichi Dockyard Company Ltd elnSipn gny(t)LdD.Tr aeaaSbiir Purchase of Material Subsidiary Dr. Toru Takehara Ceylon Shipping Agency (Pte) Ltd Services (Pvt)Ltd Dockyard General Engineering Company

TRANSACTIONS WITH RELATED PARTIES CAPITAL COMMITMENTS Mr. C.S.W. DeCosta Mr. D.V. Abeysinghe Mr. K.Utsumi Mr. D. V. Abeysinghe Dr. Toru Takehara Directors Name of Common Parent usdayPurchase of Material Subsidiary Interest Nature of Technical services Transportation Bond Handling Dividend Received Heavy Engineering Subcontractor Services Lease Rental Received Management Services Dealings Particulars of Financial Transaction (Rs.’000’) Value of 836,310 96,607 35,960 35,460 71,378 4,704 1,300 1,751 918 102 Financial Statements. There were noother transactions with Key Managerial Personnel other thanthosedisclosedinNote 37(A) to these (iii) To Short Term Employment Benefit year’s classification. To facilitate comparison, relevant balances pertainingto theprevious year have beenre-classified to conform to current 39. COMPARATIVE INFORMATION Financial Statements, other than which are mentioned above. Subsequent to thereporting date, nocircumstances have arisen which would require adjustment to or disclosure inthe amounting to Rs.107,788,386/- for the year ended31stDecember 2018at themeeting heldon26thFebruary 2019. The Directors of theCompany have approved the payment of dividendof Rs1.50/-per share onordinary shares 38. For the year Ended 31stDecember, (ii) No loanshave beengranted to theDirectors of theCompany. (i) the Company/Group. Company who are inthe very next level to theBoard of Directors have beenclassifiedasKey Management Personnel of of Directors (includingExecutive andNon-Executive Directors), Chief Executive Officer andtheGeneral Managers of the having authority andresponsibility for planning,directing andcontrolling theactivitiesof theentity. Accordingly, theBoard A (A) ccording to SriLanka Accounting Standard LKAS 24-Related Party Disclosures, Key Management personnel, are those

tal Employment Benefit

Other Transactions With Key Managerial Personnel

EVENTS OCCURRED Compensation paidt Loans t Transactions with Key Management Personnel o theDirectors

o Key Management Personnel AFTER THE REPORTING PERIOD

Rs.’000 65,567 73,546 2018

Rs. 60,607 55,268 2017 ’000 101 COLOMBO DOCKYARD PLC | Annual Report 2018 102 COLOMBO DOCKYARD PLC | Annual Report 2018

Bank Over Dividends Pa Income Int Tr Curren Final Dividends/

Issue o Def R Profit available for Appropriation N Int Re Share H Ne Re Av Tax Stated Capital E Pro To Ne

Pro Cash &Short-term funds Other Inc T Pro Inv Curren Other Expenses

Gross Profit Inv Cost of Sta Property Plant &Equipment Assets As a Revenue Sta

Other For the year ended31stDecember Ten Years Financial Summary rade &Other Receivables quity &Liabilities etirement benefit Obligation on-Current Liabilities ade &Other Payables tal Assets erest bearingBorrowings erest bearingBorrowings ailable for Re-sale Reserves venue Reserves taind Profit b/f entories estments & Taxes t Profit For The Year t Finance Income tement of Financial Position tement of Profit or Loss andOther Comprehensive Income fit before Tax ation fit From Operation fit before Other Income erred Taxation t 31stDecember t Liabilities t Assets f BonusShares Production Comprehensive income Tax Payable olders Fund (Net Worth)

ome draft

yable

(12,292) Rs. Mn 10,309 15,053 15,053 13,169 (1,987) 8,967 4,049 1,060 8,160 8,108 8,160 8,252 5,244 (1,110) 2,516 5,491 4,7 2,713 4,115 2018 2018 695 842 842 703 877 144 714 221 171 (50) (92) (27) 93 44 15 - - - - -

(10,607) Rs. Mn 16,705 16,705 12,052 12,291 6,968 3,806 8,838 8,302 (1,918) 8,108 3,448 8,108 3,494 7,002 4,642 8,159 1,445 4,414 2017 2017 (473) 608 899 899 (143) (271) 647 202 197 714 (69) (74) (51) 26 16 - - - - -

Rs. Mn 18,982 18,982 14,350 11,005 (8,736) (1,828) 8,290 4,038 8,302 8,302 9,973 4,632 1,676 9,031 8,722 7,410 1,235 2016 1,237 2016 9,112 2,110 (448) (438) (432) (591) 839 839 594 714 143 26 10 15 12 6 - - - - -

Rs. Mn (13,616) 17,209 17,209 14,407 12,358 6,888 9,646 8,938 9,503 4,507 4,328 8,722 1,870 8,722 (1,714) 2,332 9,451 4,851 2014 2015 (708) (694) (923) (753) (216) 870 870 985 523 17 791 714 (14) 40 59 15 0 9 - - -

(12,508) Rs. Mn 16,440 16,440 10,37 13,7 11,639 (1,607) 9,646 9,646 5,208 8,052 9,933 9,724 1,958 4,801 2,631 4,281 1,199 3,221 2014 2014 (408) (287) 956 209 857 857 520 220 347 281 714 (61) 07 (11) 27 15 5 2 - - -

(14,246) Rs. Mn 16,228 16,228 10,484 15,861 10,331 11,549 (1,697) 9,507 4,928 2,760 4,679 9,7 9,7 3,329 7,467 4,147 1,615 2013 2013 2,141 (57 536 824 279 454 816 816 733 753 532 714 (82) 56 56 23 91 14 4 5) - - -

(13,028) 10,086 Rs. Mn 17,539 17,539 15,728 3,900 6,47 13,117 3,864 9,362 4,548 1,880 2,7 1,889 9,273 7,829 8,051 1,903 9,718 1,289 4,422 1,202 1,7 (1,411) 2012 2012 983 47 (411) 522 931 714 144 (34) 00 (14) 59 52 16 10 19 0 0 7

Rs. Mn (10,164) 14,214 14,214 12,195 3,000 6,684 4,568 11,214 3,920 8,376 6,937 3,892 (1,193) 8,522 7,829 7,829 1,396 1,439 2,031 1,47 2,514 1,124 2011 2011 (547) 684 963 486 638 838 538 641 161 (83) 46 47 43 17 9 9 -

(10,978) Rs. Mn 14,057 11,808 14,193 14,193 6,830 6,830 5,667 (1,57 3,07 5,363 5,933 1,500 2,385 4,732 2,254 2,014 1,647 7,3 5,251 2010 2010 7,514 1,012 1,821 (547) 684 897 624 951 193 147 17 131 77 23 61 15 9) 9 4 - -

Rs. Mn 13,690 13,690 13,160 (9,7 11,527 6,048 3,880 (1,349) 6,893 6,047 6,763 5,363 5,363 5,842 3,362 2009 2009 2,324 2,051 2,013 2,163 2,125 3,71 2,141 (47 (199) 880 786 684 305 754 183 128 315 112 98) 94 82 13 9) 7 - Please bring your National Identity Card when attending themeeting. 04) 03) 02) 01) Notes Colombo, SriLanka 26th February 2019 Company Secretary Manori Mallikarachchi COLOMBO DOCKYARD PLC By order of theBoard 3. 2. 1. the following purposes. Grand Ballroom, GaladariHotel, No.64, Lotus Road, Colombo1,SriLanka at 10.00a.m.onthe26thday of March 2019for NOTICE ISHEREBY GIVENthat the Thirty Sixth Annual General Meeting of ColomboDockyard PLC will beheldat the P.O. Box 906,Graving Docks,Port of Colombo, Colombo15 (Company Registration No. PQ50) COLOMBO DOCKYARD PLC Notice of Annual General Meeting 5. 4.

Colombo, Colombo15,SriLanka, not later than45hoursprior to thetime appointed for theholdingof themeeting. The comple The Form o A pr Any Meeting. To authoriz To r To r To r 31st December 2018andtheReport of the Auditors. To r e-elect Mr. LalithGanlath interms of Article 87of the Articles of Association of theCompany. eceive theReport of theBoard of Directors onthe Affairs of thecompany, the Audited Accounts for the year ended e-appoint Messrs. KPMG,theretiring Auditors andauthorize theDirectors to fixtheir remuneration. e-elect Mr. H A RK Wickramathilake interms of Article 87of the Articles of Association of theCompany. member, entitled to attend and vote, isentitled to appoint aproxy to attend and vote instead of him/her. oxy neednot beamember of theCompany. e theDirectors to determine donations for the year 2019andupto thedate of thenext Annual General f Proxy isenclosedfor thispurpose. ted Form of Proxy mustbedeposited at theRegistered Office of theCompany Graving Docks,Port of 103 COLOMBO DOCKYARD PLC | Annual Report 2018 104 COLOMBO DOCKYARD PLC | Annual Report 2018 Notes 105 COLOMBO DOCKYARD PLC | Annual Report 2018 106 COLOMBO DOCKYARD PLC | Annual Report 2018 Notes Instructions asto completion appear overleaf. * Delete what isnot applicable Notes: Signature ...... In witness my/our* handsthis...... day of ...... Two Thousand Nineteen. which may betaken inconsequence thereon. Meeting of theCompany to beheldon26thMarch 2019at 10.00a.m.andat any adjournment thereof andat every poll as my/our Proxy to represent andspeak vote for me/us* andonmy/our behalf at the Thirty Sixth Annual General Mr. M.S. A. Wadood Mr. H A Karunaratne Mr. H.A.R.K. Wickramathilake Mr. LalithGanlath Mr. K Utsumi Mr. T. Nakabe Mr. D. V. Abeysinghe Mr. Sarath deCosta Dr. T. Takehara (or failing him/her) ...... o being a member/ members of Colombo Dockyard PLC, hereby appoint, ...... (NIC No.) ...... of ...... I/We ...... P.O. Box 906,Graving Docks,Port of Colombo, Colombo15 (Company Registration No. PQ50) COLOMBO DOCKYARD PLC Form of Proxy

f ...... of of of of of of of of of Colombo(or failing him) Colombo(or failing him) Colombo(or failing him) Colombo(or failing him) Colombo Colombo(or failing him) Colombo(or failing him) Colombo(or failing him) Colombo(or failing him) 107 COLOMBO DOCKYARD PLC | Annual Report 2018 108 COLOMBO DOCKYARD PLC | Annual Report 2018 Jointly with Address Name 3. 2. 1. Instructions for Completion Share Certificate No./CDS Account No Please fill thedetails : 5. 4.

If If If Colombo, Colombo15,SriLanka onor before forty five hoursbefore thetimeappointed for themeeting. The comple b Kindly perfect theForm of Proxy by fillinginlegibly your full name,address andtheNational Identity Card number and Association/Statute. registration if suchPower of Attorney hasnot already beenregistered with theCompany. relevant details at thespace provided (above thenamesof theBoard of Directors) ontheProxy Form. theappointor isaCompany/incorporated body, thisForm mustbeexecuted inaccordance with the Articles of theForm of Proxy issignedby an Attorney, therelative Power of Attorney should accompany theForm of Proxy for you wish to appoint apersonother thantheChairman or aDirector of theCompany as your proxy, pleaseinsertthe y signinginthespace provided andfillinginthedate of signature.

ted Form of Proxy shouldbedeposited at theRegistered Office of theCompany, Graving Docks,Port of

: ...... : ...... : ...... : ...... Corporate Information

Name of Company Related Party Transaction Accounting Year End Colombo Dockyard PLC Committee 31st December H. A. R. K Wickramathilake (Chairman) Legal Form Lalith Ganlath Registrars A Public Quoted Company with Sarath de Costa P & W Corporate Secretarial (Pvt) Ltd, Limited Liability. Incorporated and D. V. Abeysinghe No.3/17, domiciled in Sri Lanka. Kynsey Road, Company Secretary Colombo 8. Company Registration Mrs. Manori P. Mallikarachchi Number Graving Docks, Port of Colombo, Subsidiary Companies PQ 50 Founded 1974 Colombo 15, Sri Lanka Dockyard General Engineering Services (Pvt) Ltd. BOI Registration Number Corporate Management 223, Jayantha Mallimarachchi A Licensed Enterprise under section D. V. Abeysinghe Mawatha, Colombo 14, Sri Lanka. 17 of the Board of Investment of Sri – Managing Director/CEO www.dges.lk Lanka (formerly GCEC) Law No. 4 of K.B.P Fernando 1978 Registration No. 91/17/03/1983. – General Manager (Ship Repair Ceylon Shipping Agency (Pte) Ltd Business) No. 35, Selegie Road # 09-16, Tax Registration Numbers W. M. De Silva Parklane Shopping Mall VAT - 124085896-7000 – General Manager (Human Recourse Singapore – 188307. SVAT - SVAT 000846 Redevelopment & Administration) Income tax - 124085896-0000 R. M. V. Rathnayake Bankers ESC - 124085896-8000 - General Manager (Supply Chain Bank of Ceylon NBT - 124085896-9000 Management) People’s Bank Lal Hettiarachchi Commercial Bank of Ceylon PLC Directors - General Manager (Ship Building) State Bank of India T. Takehara M. Rohan De Silva Sampath Bank PLC – Chairman - General Manager (Finance & National Development Bank PLC Sarath de Costa System Implementation) Hatton National Bank PLC - Vice-Chairman T. S. Godakumbura Standard Chartered Bank D. V Abeysinghe – General Manager (New Construction) – Managing Director/CEO Contact Details T. Nakabe S. G. Senadheera – General Manager (Ship Repair P O Box 906 Port of Colombo K. Utsumi Production) Colombo 15 Sri Lanka Lalith Ganlath P. D. Gihan Ravinatha H. A. R. K Wickramathilake – Chief Financial Officer Tele: 94 112429000, H. A. Karunaratne Manori P. Mallikarachchi Fax: 94 11 2446441, M. S. A. Wadood – Legal Consultant/Company 94 11 2471335 K. Kanaya Secretary Email: [email protected] - Alternate Director Internet: www.cdl.lk Auditors Audit & Remuneration KPMG Committee Chartered Accountants H. A. R. K Wickramathilake (Chairman) 32A, Sir Mohamed Macan Markar Lalith Ganlath Mawatha, Colombo 3, Sri Lanka. Sarath de Costa www.cdl.lk