vision mission - cdn.cse.lk

VisionBuilding Growth

Mission To build growth by being the most desired business venue in the city. To enhance shareholder value by satisfying our customers with modern facilities and quality service by dedicated professionals.

ON’ALLY HOLDINGS PLC

TABLE OF CONTENTS Page

Corporate Information 1

Notice of Annual General Meeting 2

Managing Director’s Review 3

Board of Directors - Profile 4-5

Highlights 6

Annual Report of the Board of Directors on the affairs of the Company 7-11

Audit Committee Report 12

Remuneration Committee Report 13

Related Party Transactions Review Committee Report 14

Statement of the Directors’ Responsibility 15

Report of the Auditors 16

Statement of Comprehensive Income 17

Statement of Financial Position 18

Statement of Changes in Equity 19

Statement of Cash Flows 20

Notes to the Financial Statements 21-47

Six year Review 48

Information to Investors 49

Major Shareholders of the Company 50

Form of Proxy Enclosed

Instruction for Completion of Proxy Enclosed

1 ON’ALLY HOLDINGS PLCAnnual Report 2015/2016

CORPORATE INFORMATION

Directors : Mr. B. V. Selvanayagam (Managing Director) Mrs. Tharsini Sarveshwaran (Deputy Managing Director) Dr. S. A. Gulamhusein Mr. G. T. Fazleabas Mr. M. I. R. Zahir Mr. A.C. Yahiyakhan Mr. A. M. Rakeeb (Resigned w.e.f 02.09.2016) Mr. T. A. Akbarally Mr. S. Selvanayagam(Alternate Director to Mr.B.V.Selvanayagam) Mr. G. Ramanan (Alternate Director to Mr. M.I.R. Zahir)

Registered Office : Unit 603, 4th Floor, Unity Plaza Building, No.2, Galle Road, Colombo-4 Tel: 011 2501622

Secretaries : P W Corporate Secretarial (Pvt) Ltd., 3/17, Kynsey Road, Colombo 8 Tel: 011 4640360-3

Auditors : Messrs PricewaterhouseCoopers, Chartered Accountants, 100, Braybrooke Place, Colombo 2.

Bankers : Bank of Ceylon PLC

Legal Advisors : D M Swaminathan Associates

2ON’ALLY HOLDINGS PLCAnnual Report 2015/2016

NOTICE OF ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the Twenty Ninth (29th) Annual General Meeting of the Company will be held at the Earls Court, Cinnamon Lakeside Colombo, 115, Sir C. A. Gardiner Mawatha, Colombo 2 on 30th September 2016 at 3.30 p.m. for the following purposes;

1 To receive and consider the Annual Report of the Board of Directors on the affairs of the Company and the Statement of Accounts for the year ended 31st March 2016 with the Report of the Auditors thereon.

2 To re-elect Dr. Shabbir Abbas Gulamhusein who retires by rotation in terms of Article 88 of the Articles of Association of the Company, as a Director.

3 To re-elect Mr. Tyeabally Abbasally Akbarally who retires in terms of Article 95 of the Articles of Association of the Company, as a Director.

4 To re-appoint Messrs. PricewaterhouseCoopers, Chartered Accountants, as the Auditors of the Company and to authorize the Directors to fix their remuneration.

5 To authorize the Directors to determine donations for the year ending 31st March 2017 and up to the date of the next Annual General Meeting.

By order of the BoardON'ALLY HOLDINGS PLC

P W CORPORATE SECRETARIAL (PVT) LTDSecretaries

02 September 2016Colombo

Notes

1. A Shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on behalf of him/her.

2. A proxy need not be a Shareholder of the Company.

3. The Form of Proxy is enclosed for this purpose.

4. The completed Form of Proxy must be deposited at the Registered Office of the Company, Unit 603, 4th Floor, Unity Plaza Building, No. 2, Galle Road, Colombo 04 not later than forty seven (47) hours prior to the time appointed for the Meeting.


MANAGING DIRECTOR’S REVIEWI take great pleasure in welcoming you to the 29th Annual General Meeting of On’ally Holdings PLC. During the period under review the company was able to increase its revenue by 5% and profit for the year (exclusive of fair value gain) by 3% respective. This was further boosted by the increase in land prices which has resulted in the Company having a fair value gain of Rs. 378.5 million being reflected in the financial statement. Taking into account the Financial performance of the Company, the Board has declared a higher final dividend of Rs. 2/= per share.

The Company completed the exterior painting of the building and is now engaging with Jones Lang LaSalle and Mihindu Keerthiratne Associates with regard to the next phase of development which includes the interior refurbishment. This is required to ensure improved services to both our tenants who occupy the building and customers who patronize Unity Plaza.

Let me conclude by thanking the Board of Directors including the former Chairman, Mr. Ranjit Fernando, Mr. Nayana Mawilmada, Mr. A. M. Rakeeb and Mr. Iqbal Cassim, of On’ally Holdings PLC for their guidance and support extended during the financial year under review. Thank you to our valued shareholders, Tenants, Bankers, Auditors, Company Secretaries and each and every individual staff member of On’ally Holdings PLC for their dedication to enable the Company achieve its current performance.

Brian SelvanayagamManaging Director02 September 2016


BOARD OF DIRECTORS

Mr. Brian V SelvanayagamManaging DirectorMr. Brian V Selvanayagam was appointed to the Board of On’ally Holdings PLC on 1st November 2008.He is an Associate Member of the Chartered Institute of Management Accountants (UK), Associate Member of the Institute of Chartered Accountants of Sri Lanka, Chartered Marketers and Member of the Chartered Institute of Marketing (UK), Fellow Member of the Certified Management Accountants of Sri Lanka and Member of the Chartered Institute for Securities & Investment.He is experienced in the fields of banking, finance, corporate finance and marketing and had served at Ernst & Young, DFCC Bank PLC, Hongkong and Shanghai Banking Corporation, and Kshathriya Holdings PLC.He is a member of the Audit & Risk Committee of the Chartered Institute of Marketing and is also the Vice Chairman of the Chartered Institute of Marketing Sri Lanka Region.

He is also the Country Manager - Sri Lanka for the Chartered Institute for Securities & Investment.Dr Shabbir A GulamhuseinDirectorDr Shabbir A. Gulamhusein was appointed to the Board of On’ally Holdings PLC in March 2003.He is the Chairman of Ceylon and Foreign Trades PLC, Chairman of Business Chamber of Commerce and the Chairman/Chief Executive of the family owned Adam Group of Companies.Mrs. Tharsini SarveshwaranDeputy Managing DirectorMrs. T Sarveshwaran is a full member of the Association of Business Executives (UK) and she has obtained an Executive Diploma in Accounting and Finance from the Institute of Chartered Accountants of Sri LankaMrs. Sarveshwaran possesses 18 years’ experience in the fields of Accounting and Administration at On’ally Holdings PLC.Mr. Imran ZahirDirectorMr. Imran Zahir has over 16 years of experience in the Investment and Finance industry, regionally and internationally and a Chartered Management Accountant. He presently functions in the Investment and Finance industry in Sri Lanka and Europe. He is a Director of the Adam Investments Group and several public companies in Sri Lanka, and a Director & Head of Investment of the Orchard Capital Group EU/UK. Mr. Gulamhussein T FazleabasDirectorMr. Gulamhussein Fazleabas is a Chartered Engineer by profession and holds a BS in Civil Engineering from the University of Louisiana in Lafayette (USA) and a MS also in Civil Engineering from the University of North Carolina in Charlotte (USA).He is a Member of the Institute of Engineers Sri Lanka and a licensed Professional Engineer in Louisiana and North Carolina, USA.

He has 30 years private sector design engineering and project management experience in both Sri Lanka and USA and is presently the Chairman/Managing Director of Perigon Lanka Private Limited, a company carrying out Project Management, Structural Engineering and Cost Consultancy Services.Mr. Tyeabally A AkbarallyDirectorMr. Tyeabally Akbarally is the Executive Director Akbar Brothers (Private) Limited, Quick Tea (Private) Limited, Falcon Trading (Private) Limited, Land and Building Limited, Flexiprint (Private) Limited and Akbar Pharmaceuticals (Private) Limited.In addition to the above Mr. Akbarally is also Chairman - Amana Takaful Limited and Amana Takaful Maldives Limited and Deputy Chairman of Amana Bank Limited. He also serves as a Member of the advisory panel on Tea sector to the Minister of Plantation Industries.He was Past Chairman of the Colombo Tea traders Association, Spices and Allied products Traders Association and a former Director Sri Lanka Tea Board and former Committee member of the Ceylon Chamber of Commerce.


BOARD OF DIRECTORS (contd)

Mr. Aboobucker Mohamed RakeebDirectorMr. Aboobucker Mohamed Rakeeb is a Law Graduate (LL.B) from University of Colombo and professionally he is an Attorney-at-Law practicing actively in the field of Civil law, Administrative law and Banking law for more than 17 years.Mr Abdul Careem Yahiyakhan [Dip. Sys. Eng, Pg.Dip (India) BA (UK)]DirectorMr. A C Yahiyakhan holds a Bachelor of Arts Degree from the United Kingdom, Post Graduate Diploma in Personnel Management from India and a Diploma in Computer Software Engineering.He is experienced in the fields of administration in computer center management, foreign employment supplier services and was an Advisor to Hon. Mohamed Musthaffa, Deputy Minister of Higher Education in Sri Lanka.He has over 21 years experience in the private sector as a Director and Managing Director both in Sri Lanka and Abroad and is presently the Chairman / Managing Director of M R S Group (Hazmea) providing Computer Centres and Foreign employment Services.Mr. Shehan Selvanayagam(Alternate Director to Mr. B V Selvanayagam)Mr. Shehan Selvanayagam is currently a Director of Loops Solutions (Pvt) Ltd which is a leading Digital Agency in Sri Lanka working with over 45 leading brands in Sri Lanka as well as clients in the Middle East, Europe and AustraliaShehan who hails from an e-commerce background was previously employed at Sri Lankan Airlines handling the online marketing aspects of the Airline, where he was responsible for setting up and running the E-Commerce operation of the airline, from there he joined Nations Trust Bank and was handling the Alternate Channels of Banking within the Bank.He has a Degree in Business Management from the University of Wales, a graduate from the Chartered Institute of Marketing (UK) and holds a Masters in Information Technology from the University of Keele (UK).He regularly conducts seminars on Digital Media for companies as well as functions as a Marketing Consultant for several organizations in Sri Lanka.Mr. Govindasamy Ramanan(Alternate Director to Mr. M.I.R. Zahir)Mr. Ramanan has over 19 years of experience in the investment banking space in Sri Lanka. He was widely involved and continues to be active in business advisory, fund management, commercial banking and investment banking. Mr. Ramanan was the Head of Investment Banking at Hatton National Bank and CEO of HNB Securities, where he was directly involved in handling the full array of investment banking services and executing several landmark transactions. After his successful career in finance Mr. Ramanan has focused on Private Equity investment and deep value investment.Currently he is Executive Director/CEO of Industrial Asphalts (Ceylon) PLC and an Independent Non Executive Director of Adam Investments PLC.Mr. Ramanan is a CFA Charter holder and a Management Accountant, and obtained his MBA from University of Chicago Booth School of Business.


HIGHLIGHTS

OPERATING RESULTS 2015/16 2014/15 Increased (Rs.000’) (Rs.000’) (Decreased) %

Turnover 122,784 116,957 4.98

Operating Profit 86,568 82,844 4.50Interest income 15,451 15,015 2.90Fair value gain on investment properties 378,523 3,640 10,298.98

Profit before tax 480,542 101,499 373.45Tax (150,089) (11,794) 1,172.59

Profit after tax 330,453 89,705 268.38Other comprehensive income - net of tax 1,946 345 464.06Profit brought forward 1,120,741 1,077,296 4.03

Profit available for appropriation 1,453,140 1,167,346 24.48Transfer from reserve 721 2,397 (69.92)Dividends paid (51,627) (49,002) 5.36

Profit carried forward 1,402,234 1,120,741 25.12

KEY INDICATORS

KEY INDICATORSEarnings per share (Rs) 18.88 5.13 268.03Earnings per share(exclusive fair value gain) (Rs) 5.13 4.98 3.01Dividend per share (Rs) 2.95 2.80 5.36Net assets per share (Rs) 92.41 75.58 22.27Market price per share as at 31 March (Rs) 50.20 64.00 (21.56)

020406080

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2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016Year

Turnover Profit After Taxtation Dividends

82.4

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88.7

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145.

38

36.4

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98.3

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105.

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265.

83

45.5

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116.

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78

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8


ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANYThe Directors of On’ally Holdings PLC have pleasure in presenting their Annual Report with the Audited Financial Statements of the Company for the year ended 31st March 2016.

General

On’ally Holdings PLC is a public limited liability Company which was incorporated under the Companies Ordinance No.51 of 1938 as a public limited company on the 25th June 1982 which obtained the certificate to commence business on 20th August 1982, listed on the Colombo Stock Exchange on 25th April 1991 and re-registered as per the Companies Act, No 7 of 2007 on 13th December 2007 under the new Number PQ 107.

Principal activities of the Company and review of performance during the year

The Company’s principal activities, which remained unchanged during the year, are Property Development / Real Estate.

A review of the business of the Company, its performance during the year and its future prospects

are contained in the Managing Director’s Review, which forms and integral part of this Report.

This Report and the Financial Statements reflect the state of affairs of the Company.

Financial Statements

The complete Financial Statements of the Company, duly signed by two Directors on behalf of the Board of Directors and the Auditors are given on pages 17 to 47.

Accounting Policies

The accounting policies adopted by the Company in the preparation of the Financial Statements are given on pages 21 to 31 which are consistent with those of the previous period.

Board of Directors and Relevant Interest in Shares

The Board consists of eight Directors, comprising of two Executive Directors and six Non Executive Directors, five of whom are Independent.

The Names of the Directors and their relevant interests in shares are given below.

} }Names of Directors Designation No. of

shares As at 31.03.2016

No. of shares As at 31.03.2015

Mr. B V Selvanayagam Executive Director

125 125

Shares held jointly with Mr. S G Selvanayagam & Mrs.L Selvanayagam

937,5001,131,181

937,5001,131,181

Shares held by Mrs. L Selvanayagam

193,556 193,556

Dr. Shabbir Abbas Gulamhusein

Non Executive Director

Shares held in the following mannerDr. S A Gulamhusein 31,250 31,250Waldock Mackenzie Ltd/Dr. S A Gulamhusein

463,128 463,427

Assetline Leasing Company Ltd./Dr.S.A. Gulamhusein

1,000508,590

-504,739

Sampath Bank PLC/ Dr.S.H.A.Gulamhusein

1,160 -

Commercial Bank of Ceylon PLC/Dr. S A Gulamhusein

12,052 10,062

} }


ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY

The profiles of all the Directors detailing their areas of expertise, are included on pages 4 to 5 of the Annual Report.

Retirement of Directors

In terms of Article 88 of the Articles of Association of the Company, Dr Shabbir Abbas Gulamhusein will retire by rotation and being eligible is recommended for re-election.

In terms of Article 95 of the Articles of Association of the Company, Mr. Tyeabally Abbasally Akbarally who was appointed as a Director since the last Annual General Meeting will retire and being eligible is recommended for re-election.

Changes in the Directorate

During the period under review and upto the date of this Report the following resignations / cessation of office of Directors were effected:

-Mr. N. N. Mawilmada resigned on 12th May 2016.-Mr. R M S Fernando resigned on 24th August 2016.-Mr. A. M. Rakeeb resigned on 02nd September 2016

Mr. Iqbal Cassim, Alternate Director to Mr. M. I. R. Zahir resigned from the Board of Directors on 10th March 2016 and Mr. G. Ramanan was appointed as Alternate Director to Mr. Zahir on 23rd March 2016 in terms of Article 121 of the Articles of Association of the Company.

Independence of Directors

The Independence of the Non Executive Directors was determined according to the Listing Rules of the Colombo Stock Exchange and each of the Directors has declared their independence and submitted signed declarations to that effect.

Declaration of Interests of Directors

The Company maintains an interest Register in terms of the Companies Act No. 7 of 2007 which is deemed to form part of this Annual Report and is available for inspection upon request.

All related party transactions which encompass the transactions of Directors who were directly

Names of Directors Designation No. of shares As at 31.03.2016

No. of shares As at 31.03.2015

Mrs. T Sarveshwaran Executive Director 57,316 57,316Mr. G T Fazleabas Independent Non

Executive Director374 374

Mr. M I R Zahir Independent Non Executive Director

Nil Nil

Mr. Aboobucker Mohamed Rakeeb (Resigned w.e.f 02.09.2016)

Independent Non Executive Director

Nil Nil

Mr Abdul Careem Yahi-yakhan

Independent Non Executive Director

Nil Nil

Mr. T A Akbarally IndependentNon Executive Director

Nil Nil

Mr. Shehan Selvanayagam - (Alternate Director to Mr.B V Selvanayagam )

Alternate Director Nil Nil

Mr. G. Ramanan-(Alternate Director to Mr.M.I.R.Zahir-Appointed w.e.f. 23.03.2016)

Alternate Director Nil Nil


or indirectly interested in a contract or a related party transaction with the Company during the accounting period is recorded in the Interest Register in compliance with the applicable law.

The Directors have declared their interests in contracts and their relevant interests in shares, at meetings of the Directors.

Remuneration of Directors

The total remuneration paid to the Directors for the financial year was Rs. 5,635,784/-

Corporate Governance

The Board of Directors is committed to the highest standards of governance designed to protect the interest of the shareholders while promoting integrity, transparency and accountability. The Board ensures that the Company is in compliance with applicable legal and regulatory requirements including meeting the requirements of the Listing Rules of the Colombo Stock Exchange, The Companies Act No. 7 of 2007 and all other applicable laws and regulations.

Duties of the Board

The Board is responsible for the formulation and implementation of the Company’s short term, medium term and long term strategies. The Board also ensures that the Senior Management team has the requisite skills, expertise and knowledge to implement these strategies.

The Board ensures that all Company decisions are in compliance with laws and regulations of the country and that each decision meets the ethical standards.

The Board through the Audit Committee ensures that the Company follows accounting standards as set out by the Sri Lanka Financial Reporting Standards (SLFRS) and all financial statements are in compliance with financial regulations.

The Board, in addition to keeping all shareholder interests a priority when considering corporate decisions, also keeps the Colombo Stock Exchange and the public informed of all significant decisions.

Delegation of Authority

The Board has delegated the authority of the day to day management of the Company to the Managing Director who is responsible for delivering services according to the strategic plan, within the policies and budgets approved by the Board.

Delegation to Board Members

The Board has delegated certain functions and duties to sub committees that comprises of Board members. The functions and duties of each subcommittee namely, the Audit Committee, Remuneration Committee and the Related Party Transactions Review Committee are detailed in the respective reports.

The Board is also encouraged to seek independent professional advice when necessary, at the Company’s expense and also have access to the Company Secretary to obtain advice and services as necessary.

Remuneration Committee

The Remuneration Committee comprises of three Non Executive Directors of whom two are Independent;

Dr. S A Gulamhusein (Chairman)Mr. A C YahiyakhanMr. A M Rakeeb (Resigned w.e.f 02.09.2016)

The Remuneration Committee is responsible to ensure that the Company’s remuneration policies are adequate to attract and retain top talent. The aggregated remuneration of the Board of Directors is disclosed in the notes to the financial statements and in this Report on page 13.

Audit Committee

The Audit Committee comprises of four Independent Non Executive Directors;

Mr. M I R Zahir (Chairman)Mr. G T FazleabasMr.A C YahiyakhanMr. T A Akbarally



The Report of the Audit Committee is given separately in the Annual Report detailing the functions and duties of the Committee and the specific objectives met in the financial year under review.

Related Party Transactions Review Committee

The Related Party Transactions Review Committee comprises of three Independent Non Executive Directors and the Managing Director;

Mr. G T FazleabasMr.A C YahiyakhanMr. T A AkbarallyMr. B V Selvanayagam

The Report of the Related Party Transactions Review Committee is given separately in the Annual Report detailing the functions and duties of the Committee.

Internal Controls

The Board through delegation to the Audit Committee ensures that the Company maintains a sound system of Internal Controls to safeguard investments and Company assets. Therefore, the Audit Committee conducts a review of the effectiveness of the Company’s system of internal controls.

Company Secretary

The Company Secretary ensures that Board procedures are followed and that applicable rules and regulations are complied with. The Company Secretary also liaises with the CSE on all of the Company’s communications. The Company Secretary is also responsible for informing of the General Meetings to the Shareholders and for accurate recording of proxy voting.

Major Transactions

The Board of Directors is required to act in accordance with section 185 of the Companies Act in regard to ‘major transactions’ as per the said section 185. There were no major transactions entered into by the Company, during the year.

Dividends

A final dividend of Rs. 2/- per share was approved by the Directors for the year under review and the said dividend would be paid on 19th September 2016.

An interim dividend of Rs 1.10 per share was paid on 28th December 2015.

Accordingly, the total dividend for the year under review amounts to Rs.3.10 per share (Rs 2.95 per share for the year ended 31st March 2015).

Auditors

Messrs PriceawaterhouseCoopers, Chartered Accountants served as the Auditors during the year under review and being eligible are recommended for re-appointment as the Auditors of the Company, at the Annual General Meeting. The Auditors do not have any other relationship with the Company other than as Auditors of the Company who have also provided certain non audit services.

A total amount of Rs. 372,300/-is payable by the Company to the auditors for the year under review, comprising Rs 295,800 as audit fees and Rs 76,500 for non audit services. The details of the fee payable to the Auditors have been set out under the Note 7 to the financial statements.

Donations

During the year under review, the Company did not make any donations.

Statutory Payments

The Directors confirm that, to the best of their knowledge, all taxes, duties and levies payable by the company, all contribution, levies and taxes payable on behalf of and in respect of the employees of the company and all other known statutory dues as at the reporting period have been paid or, were relevantly provided for.

Contingent Liabilities

There were no material contingent liabilities as at the reporting period, except as disclosed in Note 27 to financial statements on page 45.

Events occurring after the reporting period

No event has occurred since the reporting date up to the date of the Auditors Report which would require adjustment to, or disclosure in the financial statements, except as disclosed under Note 31 to the financial statements on page 47.



Annual General Meeting

The Annual General Meeting of the Company will be held on 30th September 2016 at 3.30 p.m. The notice of the Annual General Meeting appears on page 2.

Mr. Brian Selvanayagam Managing Director

Ms. T SarveshwaranDeputy Managing Director

P W Corporate Secretarial (Pvt) Ltd.Secretaries

02 September 2016



AUDIT COMMITTEE REPORT

The composition of the Audit Committee during the year and up to 12th May 2016 was as follows;

Mr. Imran Zahir -Chairman-Independent Non Execuitve DirectorMr. Nayana Nadeesha Mawilmada (resigned w.e.f. 12th May 2016)-Non Executive DirectorMr. Gulamhussein T. Fazleabas-Independent Non Executive Director

The Audit Committee was reconstituted on 17th May 2016 and the Committee now comprise of the following:

Mr. Imran Zahir - Chairman-Independent Non Executive DirectorMr. Gulamhussein T. Fazleabas-Independent Non Executive DirectorMr. Abdul Careem Yahiyakhan-Independent Non Executive DirectorMr. Tayebally Akbarally-Independent Non Executive Director

Mr. Imran Zahir is a Member of the Chartered Institute of Management Accountants, U.K

The Managing Director, Deputy Managing Director together with the Accountant attend meetings of the Committee by invitation. The External Auditors are requested to be present when required.

Financial Reporting

The Committee oversees the Company’s financial reporting on behalf of the Board of Directors as part of its responsibility and have reviewed the Annual Financial Statements and recommended them to the Board prior to their issuance. The management ensures compliance with relevant accounting standards when preparing the Financial Statements.

Compliance with Laws & Regulations

The Committee has reviewed the reports submitted by the management on the state of Compliance with applicable laws and regulations and statutory payment made by the Company and ensured that all requirements are adhered to.

External Auditors

The Committee held meetings with the External Auditors to discuss the nature, scope and the approach of the annual audit. The Committee also held discussions on matters raised on management letters issued by the Auditors. Necessary actions have been taken by the Company in response to the issues raised by the Auditors. The Committee has also reviewed the other services provided by the Auditors to ensure that the independence of the Auditors has not been impaired.

Risk Management

The Committee has held discussions with the Sectional Heads to discuss the policies and practices related to risk management. The Committee has also reviewed different types of risks attached to the Company’s business and its operations during the year under consideration with a view to taking appropriate corrective action.

Re-appointment of Auditors

The Committee has recommended to the Board of Directors that Messrs PricewaterhouseCoopers be re-appointed the Auditors for the year ending 31st March 2017 subject to the approval of the shareholders at the Annual General Meeting. The Audit Committee has also made its recommendations to the Board of Directors on the fees payable to the Auditors for approval by the Board.

Imran Zahir

Chairman - Audit Committee

02 September 2016


REMUNERATION COMMITTEE REPORT

The Company's remuneration policy is an indiscriminative policy irrespective of race, religion or gender which has been developed to attract, motivate and retain good qualitative staff to achieve the goals and objectives of the Company.

The Remuneration Committee comprises of the following members:

Dr. Shabbir A Gulamhusein - Chairman Non Executive DirectorMr. Abdul Careem Yahiyakhan Independent Non Executive DirectorMr. Aboobucker Mohamed Rakeeb Independent Non Executive Director (Resigned w.e.f 02.09.2016)

During the year the committee carried out the following functions:

* Reviewing the remuneration of the Executive and Non-Executive Directors.

* Evaluating the performance of key positions of the senior management against set goals and determining the basis for revising remuneration and other benefits.

* Recommending the policy governing annual increments to staff.

* Reviewing of salary structure and payment of bonus to the staff.

Dr. Shabbir A GulamhuseinChairman - Remuneration Committee

02 September 2016


RELATED PARTY TRANSACTIONS REVIEW COMMITTEE REPORTTHE ROLE AND RESPONSIBILITIES

The Related Party Transactions Review Committee (“the Committee”) is tasked with reviewing all Related Party Transactions of the Company in Compliance with section 9 of the Listing Rules of the Colombo Stock Exchange.

The Committee reviews and pre-approves all proposed non-recurrent Related Party Transactions of the Company. Further, the Committee reviews all recurrent Related Party Transactions on a quarterly basis to ensure compliance with the limits and reporting guidelines specified by the Listing Rules.

RELATED PARTY TRANSACTIONS REVIEW COMMITTEE COMPOSITION

The Committee comprises of three (03) Independent Non-Executive Directors and one(01) Executive Director. The members of the Related Party Transactions Review Committee are

Mr. T A Akbarally - Chairman - Independent Non-Executive DirectorMr. G T Fazleabas - Member- Independent Non-Executive DirectorMr. A C Yahiyakhan - Member -Independent Non-Executive DirectorMr. B V Selvanayagam- Member - Managing Director.

KEY ACTIVITIES OF THE RELATED PARTY TRANSACTIONS REVIEW COMMITTEE:

• Review and pre-approve all non-recurrent related party transactions of the Company prior to approval by the Board of Directors.

• Review all related party transactions to ensure that they are in the best interests of the Company.

• Ensure that all reporting requirements of the Listing Rules are met.

• Update the Board of Directors on the Related Party Transactions of the Company.

• Ensure that all transactions with related parties are in the best interest of all shareholders and adequate transparency is maintained.

• Establish guidelines and policies for the management and reporting of related party transactions.

T. A . AkbarallyChairmanRelated Party Transactions Review Committee

02 September 2016


STATEMENT OF DIRECTORS’ RESPONSIBILITY FOR PREPARATION OF FINANCIAL STATEMENTSThe Directors are required by the Companies Act, No.7 of 2007 to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Company as at the end of the financial year and the income and expenditure of the Company for the financial year.

The Directors are also responsible to ensure that the financial statements comply with the regulations made under the Companies Act, which specifies the form and content of financial statements and any other requirements which apply to the Company’s financial statements under any other law.

The Directors ensure that the financial statements presented in this Annual Report have been prepared using appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates and in compliance with the Sri Lanka Accounting Standards (SLFRS and LKAS) issued by the Institute of Chartered Accountants of Sri Lanka, Companies Act, No.7 of 2007 and the Sri Lanka Accounting and Auditing Standards Act No.15 of 1995.

The Directors are responsible for ensuring that the Company keeps sufficient accounting records, which discloses the financial position of the Company with reasonable accuracy, which will enable them to have the financial statements prepared and presented as aforesaid.

They are also responsible for taking measures to safeguard the assets of the Company and in that context to have proper regard to the establishment of appropriate systems of internal control with a view to prevention and detection of fraud and other irregularities.

The Board of Directors is of the opinion that it has discharged its responsibilities as set out above.

The Directors are also confident that the Company has adequate resources to continue in operation and have applied the going concern basis in preparing the financial statements.

By Order of the BoardON’ALLY HOLDINGS PLC

Brian SelvanayagamManaging Director

02 September 2016Colombo


Independent Auditor's ReportTo the Shareholders of On'ally Holdings PLCReport on the financial statements

1 We have audited the accompanying financial statements of On’ally Holdings PLC, which comprise the statement of financial position as at 31 March 2016, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information as set out in pages 17 to 47.

Management’s Responsibility for the Financial Statements

2 Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

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

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

Opinion

6 In our opinion the financial statements give a true and fair view of the financial position of On’ally Holdings PLC as at 31 March 2016, and its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

Report on other Legal and Regulatory Requirements

7 These financial statements also comply with the requirements of Section 151 (2) of the Companies Act, No. 07 of 2007.

02 September 2016COLOMBO


STATEMENT OF COMPREHENSIVE INCOME

Note Year ended 31 March 2016 2015

Revenue 5 122,784,299 116,957,020

Other operating income 6 24,512,238 23,426,560

Operating expenses 7 (60,728,339) (57,539,821)

Operating profit 86,568,198 82,843,759

Finance income 9 15,451,181 15,014,931

Fair value gain on investment property 15 378,523,032 3,640,563

Profit before tax 480,542,411 101,499,253

Tax 10 (150,089,550) (11,793,721)

Profit for the year 330,452,861 89,705,532

Other Comprehensive Income

Items that will not be reclassified to profit or loss

Actuarial gain on remeasurements of

post employment benefit obligations 24 2,358,722 392,319

Gains on revaluation of building 22 16,553,685 1,783,660

Tax on other comprehensive income 10 (3,309,671) (261,117)

Total other comprehensive income for the year - net of tax 15,602,736 1,914,862

Total comprehensive income for the year 346,055,597 91,620,394

Earnings per share 11 18.88 5.13

Earnings per share - basic (exclusive of fair value gain) 11 5.13 4.98

The Notes on pages 21 to 47 form an integral part of these financial statements.

Independent Auditors’ report on page 16.

(all amounts in Sri Lanka Rupees)


STATEMENT OF FINANCIAL POSITION

ASSETS Non-current assetsProperty, plant and equipment 13 47,450,823 32,084,614Intangible assets 14 328,927 -Investment property 15 1,681,000,000 1,298,154,296 1,728,779,750 1,330,238,910Current assetsInventories 17 - 8,883Trade and other receivables 18 15,256,871 9,749,534Short term Investments 19 - 197,630,699Cash and cash equivalents 20 264,974,225 27,173,151 280,231,096 234,562,267Total assets 2,009,010,846 1,564,801,177

EQUITY AND LIABILITIESCapital and reservesStated capital 21 175,007,700 175,007,700Revaluation reserve 22 39,990,241 27,054,828Retained earnings 1,402,234,497 1,120,741,585 1,617,232,438 1,322,804,113Non-current liabilitiesTrade and other payables 23 56,308,176 24,481,302Retirement benefit obligations 24 5,460,526 7,096,129Deferred income tax liability 25 300,696,433 158,367,606 362,465,135 189,945,037Current liabilitiesTrade and other payables 23 26,961,997 48,881,003Income tax payables 26 2,351,276 3,171,024 29,313,273 52,052,027Total liabilities 391,778,408 241,997,064Total equity and liabilities 2,009,010,846 1,564,801,177

(all amounts in Sri Lanka Rupees)

Note As at 31 March 2016 2015

The Board of Directors is responsible for the preparation and presentation of these financial statements. These financial statements were authorised for issue by Board of Directors on 02 September 2016.

The Notes on pages 21 to 47 form an integral part of these financial statements.Independent Auditor’s report on page 16.

Managing Director Deputy Managing Director 02 September 2016 02 September 2016

I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act, No. 07 of 2007.

Accountant 02 September 2016


STATEMENT OF CHANGES IN EQUITY(all amounts in Sri Lanka Rupees)

Note Stated Revaluation Retained Total capital reserve earnings

Balance at 1 April 2014 175,007,700 27,882,263 1,077,295,912 1,280,185,875

Profit for the year - - 89,705,532 89,705,532

Other comprehensive income for the year - 1,569,621 345,241 1,914,862

Total comprehensive income for the year - 1,569,621 90,050,773 91,620,394

Depreciation transfer 22 - (2,397,056) 2,397,056 -

Dividends paid - 2014 12 - - (29,751,309) (29,751,309) - 2015 12 - - (19,250,847) (19,250,847)

Total transactions with owners, recognised directly in equity - (2,397,056) (46,605,100) (49,002,156)

Balance as at 31 March 2015 175,007,700 27,054,828 1,120,741,585 1,322,804,113

Balance at 1 April 2015 175,007,700 27,054,828 1,120,741,585 1,322,804,113

Profit for the year - - 330,452,861 330,452,861

Other comprehensive income for the year - 13,656,790 1,945,946 15,602,736

Total comprehensive income for the year - 13,656,790 332,398,807 346,055,597

Depreciation transfer 22 - (721,377) 721,377 -

Dividends paid - 2015 12 - - (32,376,425) (32,376,425) - 2016 12 - - (19,250,847) (19,250,847)

Total transactions with owners, recognised directly in equity - (721,377) (50,905,895) (51,627,272)

Balance at 31 March 2016 175,007,700 39,990,241 1,402,234,497 1,617,232,438

The Notes on pages 21 to 47 form an integral part of these financial statements.Independent Auditor’s report on page 16.


STATEMENT OF CASH FLOWS(all amounts in Sri Lanka Rupees)

31 March Note 2016 2015

Cash flows from operating activities

Cash generated from operations 29 93,875,494 92,476,344Interest received 15,266,727 17,557,295Tax paid 26 (11,890,142) (8,298,071)Retirement benefit obligations paid 24 (418,400) (67,500)Net cash generated from operating activities 96,833,679 101,668,068

Cash flows from investing activities

Purchase of property, plant and equipment 13 (339,120) (109,728)Purchase of intangible assets 14 (374,240) -Upgrading expenses of investment property 15 (4,322,672) (107,290)Net investments in fixed deposits 197,630,699 (33,739,481)Net cash generated from investing activities 192,594,667 (33,956,499)

Cash flows from financing activities

Dividends paid 12 (51,627,272) (49,002,156)Net cash used in financing activities (51,627,272) (49,002,156)

Increase in cash and cash equivalents 237,801,074 18,709,413

Movement in cash and cash equivalents

At beginning of the year 27,173,151 8,463,738Increase 237,801,074 18,709,413At end of the year 20 264,974,225 27,173,151

The Notes on pages 21 to 47 form an integral part of these financial statements.Independent Auditors’ report on page 16.


NOTES TO THE FINANCIAL STATEMENTS(In the notes all amounts are shown in Sri Lanka Rupees unless otherwise stated)

1 General information

The Company is a public limited liability Company which was incorporated under the Companies Ordinance No.51 of 1938 as a public limited Company on the 25th June 1982, which obtained the certificate to commence business on 25 th August 1982. The Company listed on the Colombo Stock Exchange on 25th April 1991 and re - registered as per the Companies Act, No7 of 2007 on 13th December 2007 under the new number PQ 107. The registered office of the Company is situated at Unit 603, 4th Floor, No. 02, Galle Road, Colombo 4.

The principal activity of the Company is property development / real estate.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated.

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS), which comprises Sri Lanka Financial Reporting Standards (SLFRSs), Sri Lanka Accounting Standards (LKASs), relevant interpretations of the Standards Interpretations Committee (SIC) and International Financial Reporting Interpretations which are collectively referred to as SLFRSs. The Company has consistently applied the accounting policies throughout all periods presented, as if these policies had always been in effect.

These financial statements have been prepared under the historical cost convention, except for the measurement of investment property and the building under property, plant and equipment at fair value and retirement benefit obligation at the present value of the obligation.

2.2 Changes in accounting policy and disclosures

(a) New accounting standards, amendments and interpretations adopted in 2015

The following standards have been adopted by the Company and the Group for the first time with effect from financial year beginning on 1 April 2015.

(i) Amendment to LKAS 1 - ‘Financial Statement Presentation’, regarding other comprehensive income. The main change resulting from these amendments is a requirement for entities to group items presented in ‘Other Comprehensive Income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments).

(ii) Amendment to SLFRS 13 - ‘Fair value measurement’, confirms that short-term receivables and payables can continue to be measured at invoice amounts if the impact of discounting is immaterial. SLFRS 13 also clarifies that the portfolio exception in the standard (measuring the fair value of a group of financial assets and financial liabilities on a net basis) applies to all contracts within the scope of LKAS 39 - ‘ Financial Instruments: Recognition and Measurement’.

(iii) Amendment to LKAS 24 - ‘Related Party Disclosures’, where an entity receives management personnel services from a third party (a management entity), the fees paid for those services must be disclosed by the reporting entity, but the compensation paid by the management entity to its employees or directors.

(iv) Amendment to LKAS 19 - ‘Employee Benefits’, clarifies the accounting for defined benefit plans that require employees or third parties to contribute towards the cost of the benefits. The amendment distinguishes between contributions that are linked to service


NOTES TO THE FINANCIAL STATEMENTS (contd.)

only in the period in which they arise and those linked to service in more than one period. The objective of the amendment is to simplify the accounting for contributions that are independent of the number of years of employee service. Entities with plans that require contributions that vary with service will be required to recognise the benefit of those contributions over employee’s working lives.

(v) Amendment to LKAS 16 - ‘Property, plant and Equipment’ and LKAS - 38 - ‘Intangible Assets’, clarify how the gross carrying amount and accumulated depreciation are treated where an entity measures its assets at revalued amounts.

(b) New accounting standards, amendments and interpretations issued but not yet adopted

(i) SLFRS 9 - ‘Financial Instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of SLFRS 9 was issued in July 2014. It replaces the guidance in LKAS 39 that relates to the classification and measurement of financial instruments. SLFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through OCI and fair value through profit or loss. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in LKAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements

for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under LKAS 39. The standard is effective for accounting periods beginning on or after 1 April 2018. Early adoption is permitted. The Company and the Group is yet to assess the full impact of SLFRS 9.

(ii) SLFRS 15 - ‘Revenue from Contracts with Customers’, deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces LKAS 18 and LKAS 11 and related interpretations. This standard will be effective for annual periods beginning on or after 1 April 2018 and earlier application is permitted.

(iii) Amendments to LKAS 16 - ‘Property, Plant and Equipment’ and LKAS 38, ‘Intangible Assets’, clarify that a revenue-based method of depreciation or amortisation is generally not appropriate. The amendments are effective for accounting periods beginning on or after 1 January 2016.

(iv) Amendments to LKAS 19 - ‘Employee Benefits’, clarify that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important and not the country where they arise. The amendments are effective for accounting periods beginning on or after 1 January 2016.

(v) Amendments to LKAS 1 - ‘Presentation

of Financial Statements’, amendments



are made in the context of the IASB’s Disclosure Initiative, which explores how financial statement disclosures can be improved. The amendments provide clarifications on a number of issues, including: materiality, disaggregation and subtotals, notes to the financial statements and OCI arising from investments accounted for under the equity method. The amendments are effective for accounting periods beginning on or after 1 January 2016.

There are no other standards or IFRIC interpretations that are not yet effective that would be expected to have a material impact to the Company.

2.3 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of the Company is measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The financial statements are presented in Sri Lankan Rupees, which is the Company’s functional and presentation currency.

2.4 Property, plant and equipment

2.4.1 Recognition and measurement

Property, plant and equipment are recognised if it is probable that future economic benefits associated with the assets will flow to the Company and the cost of the asset can be measured reliably. All property, plant and equipment are initially recorded at cost. The cost includes expenditure that is directly attributable to the acquisition of assets. Buildings are subsequently shown at market value, based on the valuation done by an external independent valuer, less subsequent depreciation for such property. Valuations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. The self-constructed assets includes the cost of materials, direct labour and any other costs directly attributable to

bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.

Increases in the carrying amount arising on revaluation of land and buildings are credited to other comprehensive income and shown as other reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged in other comprehensive income and debited against other reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement, and depreciation based on the asset’s original cost is transferred from ‘other reserves’ to ‘retained earnings’.

2.4.2 Subsequent costs

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

2.4.3 Derecognition

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit. When revalued assets are sold, the amounts included in other reserves are transferred to retained earnings.

2.4.4 Depreciation

Depreciation is calculated on the straight-line method to write off the cost of each asset to their residual values over their estimated useful lives.

Depreciation of an asset begins when it is available for use and ceases at the earlier of the



date that the asset is classified as held for sale and the date that the asset is discontinued.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

Buildings 8 - 25 years Machinery 4 - 12 years Office equipment and tools 4 years Furniture and fittings 4 years Motor vehicles 4 years

These assets’ residual values and useful lives are reviewed and adjusted if appropriate. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

2.5 Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property.

Investment property is measured initially at its cost, including related transaction costs. After initial recognition, investment property is carried at fair value, based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset, determined annually by the Board of Directors with the assistance of an independent qualified valuer. The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions.

Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property replaced, the carrying amount of the replaced part is derecognised.

Changes in fair values are recognised in the Statement of comprehensive income.

Investment properties are derecognised when they have been disposed. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognized in the Statement of Comprehensive income. Rental income from investment property is accounted for as described in note 2.21 (a).

When an item of property, plant and equipment is transferred to investment property following a change in its use, any differences between the carrying amount and the fair value of the item arising at the date of transfer is recognised directly in equity if it is a gain. Upon disposal of the item, the gain is transferred to retained earnings. Any loss arising in this manner is recognized immediately in the Statement of comprehensive income.

If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment and its fair value at the date of reclassification becomes its cost for subsequent accounting purposes. Investment property that is being redeveloped for continued future use as investment property continues to be measured at fair value and is not reclassified as property, plant and equipment during the redevelopment.

2.6 Impairment of non-financial assets

Assets that have an indefinite useful life or assets not ready to use are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units).

2.7 Financial assets

2.7.1 Classification

The Company classifies its financial assets in the following categories: at fair value through



profit or loss, loans and receivables, available for sale and held to maturity. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date. At the reporting date there were no financial assets at fair value through profit or loss and available for sale investments.

(a) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Company’s financial assets consist of loans and receivables. Financial assets recognised in the statement of financial position as trade and other receivables, investments in fixed deposits with maturity of more than three months and less than twelve months are classified as loans and receivables. They are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment.

2.7.2 Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date, i.e. the date on which the Company commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

2.8 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

2.9 Impairment of financial assets

Assets carried at amortised cost

The Company assesses at the end of each reporting period whether there is an objective

evidence that financial assets are impaired. A financial asset is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

Evidence of impairment may include indications that the debtors or group of debtors are experiencing significant financial difficulty, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the income statement.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised in the income statement.

2.10 Financial liabilities

The Company’s financial liabilities consist of trade and other payables. Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

All financial liabilities are recognised initially at their fair values and subsequently measured at amortised cost, using the effective interest method, unless the effect of discounting would be insignificant, in which case they are stated at cost.



2.11 Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined by the first-in, first- out (FIFO) method. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.12 Trade receivables

Trade receivables mainly consist of rental amounts due from customers in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.13 Cash and cash equivalents

In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.

2.14 Share capital

Ordinary shares are classified as equity. Dividend distributed to the Company’s shareholders is recognised as a liability in the period in which the dividends are approved by the Company’s directors as empowered by the Articles of Association of the Company.

2.15 Trade payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Company obtains deposits from tenants as a guarantee for returning the property at the end of the lease term in a specified good condition amounting to rental payments for a period of 6 months. Such deposits are treated as financial liabilities in accordance with LKAS 39 - ‘Financial instruments Recognition

and Measurement’, and they are initially recognised at fair value. The deposit is subsequently measured at amortised cost.

2.16 Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

2.17 Current income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions here appropriate on the basis of amounts expected to be paid to the tax authorities.

2.18 Deferred income tax

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted



for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.19 Employee benefits

2.19.1 Defined contribution plans

Defined contribution plan is a post employment plan under which an entity pays fixed contribution into a separate entity and will have no legal or constructive obligation to pay a further amount. Obligations for contributions to defined contribution plans are recognised as an expense in the income statement as and when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(i) Employees’ Provident Fund contributions

All employees of the Company are members of the Employees’ Provident Fund to which the Company contributes 15% of the salary of each employee.

(ii) Employees’ Trust Fund contributions

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

2.19.2 Defined benefit plan - Gratuity

Defined benefit plans define an amount of benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The Company has adopted a defined benefit plan as required under the Payment of Gratuity Act No. 12 of 1983 for all eligible employees.

The liability recognised in the statement of financial position in respect of defined benefit plans is the present value of the defined benefit obligation as at the date of the Statement of financial position. The defined benefit obligation is calculated annually by the Company using the projected unit credit method prescribed in LKAS 19 - ‘Employee Benefits’. The present value of the defined benefit obligation is determined by discounting the estimated future cash flows using the interest rates of Government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

The current service cost of the defined benefit plan, recognised in the Statement of income in employee benefit expense, except where included in the cost of an asset, reflects the increase in the defined benefit resulting from employee service in the current year, benefits changes, curtailments and settlements.

Past service costs are recognised immediately in the Statement of income.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligations. This cost is included in employee benefit expense in the Statement of income.

Acturials gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.

Under the Payment of Gratuity Act No.12 of 1983, the liability to an employee arises only on completion of 5 years of continued service.



2.20 Segment information

Management has determined renting of investment property as one whole operating segment, and accordingly these financial statements do not provide information by segment.

2.21 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents an amount receivable for goods supplied, services performed and stated net of discounts, taxes and levies. The Company recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity and when specific criteria have been met for Company’s activities as described below:

(a) Rental income

Rental income earned from commercial units rented to tenants are recognised on an accrual basis.

(b) Other income

Other income is recognised on an accrual basis.

2.22 Interest income

Interest income is recognised using the effective interest method.

2.23 Dividend

Dividends are recognised when they become legally payable. Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the Company’s directors as empowered by the Articles of Association of the Company. If the dividends are declared after the reporting period but before the financial statements are authorised for issue, the dividends are not recognised as a liability at the end of the reporting period. The details of dividends are detailed in Note 12.

2.24 Comparatives

Where necessary, comparative figures have been adjusted to conform with change in presentation in the current year.

3 Financial Risk Management

3.1 Financial risks factors

The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The risk management function within the Company is carried out in respect of financial risks. Financial risks are risks arising from financial instruments to which the Company is exposed during or at the end of the reporting period. Financial risk comprises market risk arising from interest rate risk, credit risk and liquidity risk. The primary objectives of the financial risk management function are to establish risk limits, and then ensure that exposure to risks stays within these limits.

The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. The Board of Directors involve in the risk management and provides the principles for overall risk management covering specific areas, such as interest rate risk, credit risk and investing excess liquidity.

3.1.1 Market risks

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company’s market risks arise only from the open positions in interest-bearing assets, to the extent that these are exposed to general and specific market movements.

Management sets limits on the exposure to interest rate risk that may be accepted, which are monitored on a monthly basis. However, the use of this approach does not prevent losses outside of these limits in the event of more significant market movements.



Sensitivities to interest risks included below are based on a change in one factor while holding all other factors constant. In practice, this is unlikely to occur, and changes in some of the factors may be correlated.

(i) Foreign exchange risk

The Company has no exposure to foreign exchange risk as it does not hold any foreign currency denominated assets or liabilities.

(ii) Price risk

The Company has no exposure to price risk as it does not hold any equity securities or commodities.

(iii) Cash flow and fair value interest rate risk

As the Company’s interest-bearing assets generate significant amounts of interest, changes in market interest rates have significant direct effect on the Company’s income. The Company’s interest rate risk principally arises from the fixed interest bearing investments in fixed deposits.

The Company does not have any interest bearing borrowings.

3.1.2 Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has significant concentrations of credit risk in relation to the receivables from tenants. Credit risk arises from cash and cash equivalents and fixed deposits held at banks and trade receivables, including rental receivables. Credit risk arising from the rent receivables is subject to monthly review and also to minimise the exposure to risk of default, a refundable deposit is taken at the award of the contract. The Company has policies in place to ensure that rental contracts are entered into only with tenants with an appropriate credit history, and the Company monitors the credit quality of receivables on an ongoing basis. Cash balances are held and investments in

fixed deposits are agreed only with financial institutions with a credit rating’s of “BB+” or better. The credit quality is further analysed in Note 16.

3.1.3 Liquidity risks

Prudent liquidity risk management implies maintaining sufficient cash to meet the financial commitments. The table below analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.



The maturity analysis of financial liabilities at 31 March 2016 and 2015 are as follows:

At 31 March 2016 From 1 Less than month to From 3 to 12 1 month 3 months months 1 to 2 years 2 to 5 yearsRental deposits - - 19,272,353 56,308,176 -Trade and otherpayables [excludingstatutory liabilities] 2,697,593 - 3,481,142 - - 2,697,593 - 22,753,495 56,308,176 -

At 31 March 2015 From 1 Less than month to From 3 to 12 1 month 3 months months 1 to 2 years 2 to 5 yearsRental deposits - - 42,069,721 24,481,302 -Trade and otherpayables [ excludingstatutory liabilities] 2,048,328 - 3,303,108 - - 2,048,328 - 45,372,829 24,481,302 -

3.1.4 Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

Consistent with others in the industry, the

company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non current borrowings’ as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position plus net debt.

The Company was operated as a non geared company in the financial year 2015 and 2016.

31 March 2016 2015

Total borrowings - -Less - investments in fixed deposits [Note 19] - (197,630,699)Less - cash and cash equivalents [Note 20] (264,974,225) (27,173,151)Net debt - -Total equity 1,617,232,438 1,322,804,113Total capital 1,617,232,438 1,322,804,113Gearing ratio - -



3 Financial Risk Management (contd)

3.2 Fair value estimation

“The table below analyses financial instru-ments carried at fair value, by valuation method. The different levels are defined as follows:”

(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

(b) “Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).”

(c) “Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).”

4 Critical Accounting Estimates and judgments

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.

4.1 Investment property

The fair value of investment properties is determined by using valuation techniques. Further details of the judgements and assumptions made are disclosed in Note 15.

4.2 Income taxes

The Company is subject to income taxes in Sri Lanka. Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

4.3 Defined benefit obligations

The present value of the pension obligations depends on a number of factors that are determined on the projected unit credit method using a number of assumptions. The assumption used in determining the net cost (income) for pensions include the discount rate. Any change in this assumption will impact the carrying amount of pension obligations.

The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Company considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in Note 24.

4.4 Management’s estimation of fair value

The valuation was determined principally using discounted cash flow projections based on estimates of future cash flows, supported by the terms of any existing lease and other contracts and by external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows. The future rental rates were estimated depending on the actual location, type and quality of the properties, and taking into account market data and projections at the valuation date. Investment properties do not include the investment properties under construction or development and no such estimations were made.



5 Revenue Revenue solely consists of rental income and is shown net of taxes.

6 Other operating income

Year ended 31 March 2016 2015

Rental on hoardings and sign boards 9,364,850 9,562,070 Hire of premises 2,084,200 2,092,875 Electricity fee 1,547,630 1,494,344 Other miscellaneous income 2,730,083 1,904,206 Maintenance services 385,000 360,000 Service charges 8,400,475 8,013,065 24,512,238 23,426,560

7 Operating expenses by nature

The following items have been charged in arriving at operating profit:

Year ended 31 March 2016 2015 Directors’ emoluments [Note 30 (iv)] 5,635,784 7,447,941 Depreciation on property, plant and equipment [Note 13] 1,526,596 2,410,195 Amortisation on intangible assets [Note 14] 45,313 - Auditors’ remuneration - Audit fee 295,800 270,000 - Certification fee 76,500 73,300 Electricity charges 7,795,138 8,302,601 Janitorial services 7,648,316 6,358,798 Management fees [Note 30 (ii)] 1,224,480 1,224,480 Repairs and maintenance expenditure - Investment property 6,428,354 2,133,092 - Building and office equipment 164,095 740,021 Security services 5,260,070 5,701,760 Staff costs [Note 8] 15,548,360 15,625,835 Other expenses 9,079,533 7,251,798 Total 60,728,339 57,539,821

8 Employee salaries and benefit expenses Year ended 31 March 2016 2015 Salaries and wages 9,921,566 9,981,500 Staff Bonus 2,866,549 2,960,960 Defined contribution plan 1,618,726 1,601,890 Defined benefit obligation [Note 24] 1,141,519 1,081,485 15,548,360 15,625,835 Average number of persons employed during the year: - Permanent 23 25



9 Finance income

Year ended 31 March 2016 2015 Interest income 15,451,181 15,014,931 Interest income consists of interest on investments made in short term fixed deposits made in the course

of the business of the Company out of:

(a) rent deposits held by the Company which are payable on the termination of tenancy; and

(b) balance profits after distribution of dividends invested for the future maintenance and development of the assets of the Company.

10 Income tax expense According to Section 59B (1), item 33 of the fifth schedule to the Inland Revenue (Amendment) Act No. 22 of 2011, the Company is liable to pay income tax at the rate of 12%, based on lower turnover threshold. The charge for income tax recognised in Statement of income consists of:

Year ended 31 March 2016 2015 Current tax Current tax on profits for the year 11,070,394 11,020,195 Deferred tax recognised in the statement of income [Note 25] 139,019,156 773,526 Taxes included in income for the year 150,089,550 11,793,721 Deferred tax recognised in other comprehensive income [Note 25] 3,309,671 261,117 Total tax charge 153,399,221 12,054,838 Tax is calculated using tax rates enacted for the year of assessment. The profits are taxed at a principle

rate of 12%. Reconciliation between current tax expenses and the accounting profit:

Year ended 31 March 2016 2015 Profit before tax 480,542,411 101,499,253 Tax calculated - on profit and income at a tax rate of 12% (2015 - 12%) 57,665,089 12,179,911 57,665,089 12,179,911 Income not subject to tax - (305,195) Expenses not deductible for tax purposes (8,686) (80,995) Impact due to the change in future tax rates from 12% to 17.5% 92,433,147 - Deferred tax recognised in other comprehensive income [Note 25] 3,309,671 261,117 Total tax charge 153,399,221 12,054,838



11 Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to the shareholders of the company by the weighted average number of shares in issue during the year.

Year ended 31 March 2016 2015 Net profit attributable to shareholders 330,452,861 89,705,532 Weighted average number of shares in issue 17,500,770 17,500,770 Earnings per share (Rs) 18.88 5.13 Earnings per share (Rs - exclusive of fair value gain) 5.13 4.98

12 Dividends

Calculation of dividend per share

Year ended 31 March 2016 2015 Interim dividend [Refer “a” below] 19,250,847 19,250,847 Final dividend [Refer “b” below] 32,376,425 29,751,309 51,627,272 49,002,156 Number of ordinary shares 17,500,770 17,500,770

Dividend per share 2.95 2.80

a) During the year the Directors paid a final dividend of Rs 1.85 per share amounting to Rs 32,376,425 in respect of 2015 (the final dividend paid during the year ended 31 March 2015 amounting to

Rs. 29,751,309 at Rs. 1.70 per share was in respect of 2014).

b) The Directors paid an interim dividend of Rs 1.10 per share amounting to Rs 19,250,847 for the year ended 31 March 2016 (interim dividend of Rs 1.10 per share amounting to Rs 19,250,847 was paid for the year ended 31 March 2015 during that period).

c) The Directors have approved a final dividend of Rs 2.00 per share amounting to Rs. 35,001,540 for the year ended 31 March 2016 on 25 August 2016.


13

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13 Property, plant and equipment (contd)

(ii) If the building was stated on the historical cost basis, the amounts would be as follows:

As at 31 March 2016 2015 Cost 12,544,615 12,544,615 Accumulated depreciation (6,286,484) (5,785,945) 6,258,131 6,758,670

14 Intangible assets

Software Total Licence At 1 April 2015

Opening net book amount - - Additions 374,240 374,240 Amortisation (45,313) (45,313) Closing net book amount 328,927 328,927

At 31 March 2016 Cost 374,240 374,240 Accumulated amortisation (45,313) (45,313) Closing net book amount 328,927 328,927 Intangible assets consists of software licences for accounting software, payroll processing software and

the office package.


15 Investment property

As at 31 March 2016 2015 At beginning of year 1,298,154,296 1,294,406,443 Upgrading expenses 4,322,672 107,290 Change in fair value during the year 378,523,032 3,640,563 At 31 March 1,681,000,000 1,298,154,296

The Company’s investment property was valued by Mr C S G Atukorala an independent professionally quali-fied valuer having recent experience in the location and category of the investment property being valued. For the investment property, the current use equates to the highest and best use. As at 31 March 2016, the investment property was revalued for Rs 1,681,000,000 (2015 - Rs 1,298,154,296) and the resulting gain was recognised in the statement of income.

At each financial year end the finance department: - verifies all major inputs to the independent valuation report; - assesses property valuation movements when compared to the prior year valuation report; - holds discussions with the independent valuer.


As per LKAS 40 - ‘Investment Property’, the Directors have adopted the fair value model for accounting for investment property as at 1 April 2005.

Valuation methods underlying management’s estimation of fair value For the investment property in the location with a total carrying value of 1,681,000,000 (2015 - Rs

1,298,154,296), the valuation was determined using discounted cash flow (“DCF”) projections based on significant unobservable inputs. These inputs include:

Future rental cash inflows Based on the actual location, type and quality of the properties and supported by the terms of any existing

lease, other contracts or external evidence such as current market rents for similar properties;

Estimated vacancy rates Based on current and expected future market conditions after expiry of any current lease;

Maintenance costs Including necessary investments to maintain functionality of the property for its expected useful life;

Capitalisation rates Based on actual location, size and quality of the properties and taking into account market data at the

valuation date;

The investment property of the Company is the Unity Plaza building situated at No. 02, Galle Road, Colombo 4.

The floor area of the Unity Plaza building (excluding Bank of Ceylon premises) is in the extent of 130,985 Sq.ft.

Land extent (excluding Bank of Ceylon premises) is 78.56 perches.

Income earned from investment property Total rent income earned by the Company from the investment property during the year was Rs 122,784,299

(2015 - Rs 116,957,020).

Expenses incurred on investment property Total repair and maintenance expenses incurred on the investment property was Rs 6,428,354 (2015 - Rs

2,133,092).

Information about fair value measurements using significant unobservable inputs (Level 3) for 2016 are as follows:

Valuation Technique - Investment method Capitalisation rate - 5.5 % Maintenance cost - 40 % Estimated vacancy rate - 0 %

15 Investment property (contd)



Present value of Change in the investment property assumption Increase in Decrease in assumption assumption

Capitalisation rate 0.5% 158,292,928 (131,620,859) Sales price 5% 49,707,651 (49,707,651) Maintenance cost 10% 263,531,633 (263,531,633) Estimated vacancy rate 5% - (55,197,761)

15 Investment property (contd)

Sensitivity analysis

In order to illustrate the significance of the capitalisation rate assumed in this valuation as at 31 March 2016, a sensitivity analysis was carried out assuming the following capitalisation rates :

Assets and liabilities not carried at fair value but for which fair value is disclosed are as follows: The following table analyses within the fair value hierarchy the Group’s assets and liabilities (by class) not

measured at fair value at 31 March 2016 but for which fair value is disclosed.

The assets and liabilities included in the above table are carried at amortised cost; their carrying values are a reasonable approximation of fair value.

Trade receivables include the contractual amounts for settlement of trades and other obligations due to the Company. Trade and other payables and Borrowings represent contract amounts and obligations due by the Company.

As at 31 March 2016 Level 1 Level 2 Level 3 Total

Assets Trade receivables - 15,256,871 - 15,256,871 Cash and cash equivalents 264,974,225 - - 264,974,225 Total 264,974,225 15,256,871 - 280,231,096

Liabilities Trade and other payables - 83,270,173 - 83,270,173 Total - 83,270,173 - 83,270,173

As at 31 March 2015 Level 1 Level 2 Level 3 Total

Assets Trade receivables - 9,749,534 - 9,749,534 Cash and cash equivalents 27,173,151 - - 27,173,151 Total 27,173,151 9,749,534 - 36,922,685

Liabilities Trade and other payables - 73,362,305 - 73,362,305 Total - 73,362,305 - 73,362,305



In accordance with the LKAS 39 on ‘Financial Instruments Recognition and Measurement’ financial liabilities have been classified as follows:

As at 31 March 2016 2015 Liabilities as per statement of financial position Other financial liabilities at amortised cost Trade and other payables (excluding non financial liabilities) 81,759,264 71,902,459 Total other financial liabilities at amortised cost 81,759,264 71,902,459 Total financial liabilities 81,759,264 71,902,459 Credit quality of financial assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference

to external credit ratings (if available) or to historical information about counterparty default rates;

(i) Cash at bank As at 31 March Rating 2016 2015 Counterparties with external credit rating (Fitch Ratings)

Cash at bank and short term bank deposits (more than 3 months maturity)

Bank of Ceylon AA + - 197,630,699

Total - 197,630,699

Cash at bank and short term bank deposits (less than 3 months maturity)

Bank of Ceylon AA + 18,974,225 15,148,152 Nations Trust Bank PLC A 181,500,000 - Union Bank PLC BB+ 62,000,000 -

Risk free 2,500,000 12,024,999 Total 264,974,225 27,173,151 Total short term bank deposits and cash and cash equivalents 264,974,225 224,803,850

16 Financial instruments by category (contd)

16 Financial instruments by category

In accordance with the LKAS 39 - ‘Financial Instruments Recognition and Measurement’ financial assets have been classified as follows:

As at 31 March 2016 2015 Assets as per statement of financial position Loans and receivables Trade and other receivables 8,477,357 5,825,109 (excluding prepayments and deposits) Investment in fixed deposits [Note 19] - 197,630,699 Cash and cash equivalents [Note 20] 264,974,225 27,173,151 Total loans and receivables 273,451,582 230,628,959 Total financial assets 273,451,582 230,628,959



16 Financial instruments by category (contd)

(ii) Trade receivable

As at 31 March 2016 2015 New customers and related parties 365,403 - Existing customers with no defaults in the past 2,091,854 517,041 2,457,257 517,041

As at 31 March 2016 2015 - Upto 30 days 2,206,006 517,041 - 30 to 90 days overdue 251,251 - Total past due but not impaired 2,457,257 517,041 Above related to a number of independent customers for whom there is no recent history of credit default

and the total trade receivables were fully performing.

17 Inventories Inventories consist of consumables.

18 Trade and other receivables

As at 31 March 2015 2014

Trade receivables 2,457,257 517,041 Other receivables and deposits [Note (i) below] 8,238,868 8,034,190 Prepayments [Note (ii) below] 4,560,746 1,198,303 15,256,871 9,749,534 (i) Other receivables mainly consist of deposits for services of Rs 2,218,768 (2015 - Rs 1,649,268) and

interest receivable on fixed deposits of Rs 3,902,108 (2015 - Rs 828,210).

(ii) Pre - payments and accrued income mainly comprise insurance pre-paid expenses of Rs 62,193 (2015- Rs 929,182) and Advance to contractors of Rs 3,792,164 (2015 - Rs 321,450).

As of 31 March 2016, trade receivables of Rs 2,457,257 were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The age analysis of theses trade receivables is as follows;



19 Short term Investments

As at 31 March 2016 2015 Treasury bills - 162,130,699 Fixed deposit - 34,000,000 Repo - 1,500,000 - 197,630,699

20 Cash and cash equivalents

As at 31 March 2016 2015 Cash at bank and in hand 18,974,225 15,173,152 Short term investments 246,000,000 11,999,999 264,974,225 27,173,151

For the purposes of the cash flow statement, the year end cash and cash equivalents comprise only the above.

The Company has converted all the short term investments (more than 3 months) amounting to Rs 197,630,699 in to 3 months or less than 3 months fixed deposits and repurchase agreements during the year.

21 Stated capital

Number of Value shares (Rs) At 1 April 2015 17,500,770 175,007,700 At 31 March 2016 17,500,770 175,007,700

22 Revaluation reserve

As at 31 March 2016 2015 At beginning of year 27,054,828 27,882,263 Revaluation surplus 16,553,685 1,783,660 Deferred tax on revaluation (2,896,895) (214,039) Depreciation transfer (721,377) (2,397,056) At end of year 39,990,241 27,054,828



23 Trade and other payables

As at 31 March 2016 2015 Non-current Rental deposits payable to outside parties [Note (i) below] 55,837,836 23,653,482 Rental deposit payable to related parties [Note 30 (iii)] 470,340 827,820 56,308,176 24,481,302 Current Rental deposits payable to outside parties [Note (i) below] 18,236,633 41,599,381 Rental deposit payable to related party [Note 30 (iii)] 1,035,720 470,340 Accounts payable 2,262,911 1,885,351 Other payables [Note (ii) below] 3,685,926 3,085,781 Accruals and provisions [Note (iii) below] 1,740,807 1,820,150 26,961,997 48,861,003 83,270,173 73,362,305

(i) As per rent agreements, the Company obtains rental deposits of 6 months as security. Based on the remaining agreement period as at the date of the statement of financial position, rental deposits are classified as current liabilities if deposits are due within one year or less. If not they are presented as non-current liabilities.

(ii) Other payables mainly consist of Value Added Tax (VAT) payable of Rs 1,251,653 (2015 - Rs 1,226,997) and unclaimed dividend payable of Rs 1,637,135 ( 2015 - Rs 1,359,757).

(iii) Accruals and provisions mainly consist of professional fees payable of Rs 286,779 (2015 - Rs 268,026) and miscellaneous accruals amounting to Rs 1,454,028 (2015 - Rs 1,552,124).

24 Retirement benefit obligations

The amounts recognised in the statement of financial position are determined as follows:

As at 31 March 2016 2015 Present value of unfunded obligation 5,460,526 7,096,129 Liability in the statement of financial position 5,460,526 7,096,129

At beginning of year 7,096,129 6,474,463 Current service cost 286,798 432,697 Interest cost 854,721 648,788 Actuarial gain (2,358,722) (392,319) Benefits paid (418,400) (67,500) At the end of the year 5,460,526 7,096,129



24 Retirement benefit obligations (contd)

Present value of defined Change in the benefit obligation assumption Increase in Decrease in assumption assumption

Discount rate per annum 1% Decreased by Increased by 5.99% 6.49% Annual Salary increment rate 1% Increased by Decreased by 6.74% 6.31%

Year ended 31 March 2016 2015 Current service cost 286,798 432,697 Interest cost 854,721 648,788 Total included in the staff costs [Note 8 ] 1,141,519 1,081,485

Actuarial gain on post employment benefit obligation (2,358,722) (392,319) Total recognised in the comprehensive income (1,217,203) 689,166

The following assumptions and data were used in valuing the defined benefit obligation by the actuarial valuer:

Year ended 31 March 2016 2015 Discount rate 12.92% 10.14% Future salary increases 8% 10% Staff turn over rate 7% 5% Retiring age 60 years 60 years

Sensitivity analysis

In order to illustrate the significance of the salary / wage escalation rate and the discount rate assumed in this valuation as at 31 March 2016, a sensitivity analysis was carried out for all employees assuming the following salary/wage escalation rate and discount rate.

The amounts recognised in the statement of comprehensive income are determined as follows:



25 Deferred income tax liability Deferred income taxes are calculated on all temporary differences under the liability method using a

principal tax rate of 17.5% (2015 - 12%). The movement in deferred income tax account is as follows:

As at 31 March 2016 2015 At beginning of year 158,367,606 157,332,963 Recognised in the statement of income[Note 10] 139,019,156 773,526 Recognised in the statement of other comprehensive income [Note 10] 3,309,671 261,117 At the end of the year 300,696,433 158,367,606

Deferred tax is calculated on temporary differences between carrying value of fixed assets and tax written down value of such assets, as analysed by each taxable activity.

The reconciliation of tax effect arising from the timing differences related to carrying amounts of assets and liabilities of the statement of financial position is as follows:

Deferred Deferred Net tax tax deferred asset liability tax Property plant and equipment - (8,287,551) (8,287,551) Investment property - (293,364,474) (293,364,474) Defined benefit obligations 955,592 - 955,592 Asset / (liability) as at 31 March 2016 955,592 (301,652,025) (300,696,433)

Deferred Deferred Net tax tax deferred asset liability tax Property plant and equipment - (3,770,413) (3,770,413) Investment property - (155,448,728) (155,448,728) Defined benefit obligations 851,535 - 851,535 Asset / (liability) as at 31 March 2015 851,535 (159,219,141) (158,367,606)

26 Current tax payable

As at 31 March 2016 2015 As at 01 April 3,171,024 448,900 Charge for the year [Note 10] 11,070,394 11,020,195 Tax paid during the year (11,890,142) (8,298,071) As at 31 March 2,351,276 3,171,024



27 Contingencies

The Company has contingencies in respect of the following:

a) A former employee of the Company has filed a complaint in the Department of Labour alleging, inter alia, that the Company had failed to implement the Order of the Labour Tribunal case which was concluded in 2005. The Commissioner of Labour has referred this matter to an arbitrator to be resolved by arbitration. The arbitration proceeding have not been concluded.

It is not anticipated that any material liability will arise from the above legal claim.

b) A tenant has filed a case against the termination notice issued by the Company for Vacating the premises after the expiry of the lease. The case will be called on 10th October 2016 for answer of the Defendant.

It is not anticipated that any material liability will arise from the above legal claim.

c) Contingent liability amounting to Rs.13,183,556 on the outcome of the appeal against the assessment for the year 2011/12, separately charging income tax at 28% on the interest income of the Company may arise on respect of the subsequent years of assessments:

Financial year Amount

2011 / 2012 1,391,181 2012 / 2013 2,884,518 2013 / 2014 3,957,343 2014 / 2015 2,478,325 2015 / 2016 2,472,189 13,183,556

The Company has appealed against the assessment on the basis that it is chargeable on the aggregate “profits and income” of its business undertaking at the rate at which it is chargeable under section 59B of the Inland Revenue Act No.10 of 2006 and that there is no provision to apply different rates of tax on the its “profits” and of its “income”.

28 Commitments

(a) Capital commitments

As per the service agreement entered into with Jones Lang Lasalle Property Consultants (India) Private Limited for obtaining the services of Retail Advisory for Unity Plaza subsequent to the year end, the commitment to pay professional fees of US Dollar 25,000 and out of pocket expenses with a maximum limit which is US Dollar 5,500 through out the service period.

(b) Financial commitments

The Company pays management fees of Rs 1,224,480 annually for the services rendered by the Urban Development Authority (“UDA”). UDA reserves the right to revise the management fees.



29 Cash generated from operations Reconciliation of profit before tax to cash generated from operations:

Year ended 31 March 2016 2015 Profit before tax 480,542,411 101,499,253 Adjustments for: Depreciation [Note 13] 1,526,596 2,410,195 Amortisation [Note 14] 45,313 - Interest income [Note 9] (15,451,181) (15,014,931) Fair value gain [Note 15] (378,523,032) (3,640,563) Loss on disposal of property, plant and equipment - 81,287 Movement in rental deposits - non current portion [Note 23] 31,826,874 (11,786,484)

Changes in working capital:

- inventory 8,883 657,789 - trade and other receivables (5,322,883) (433,038) - trade and other payables (21,919,006) 17,621,351 Retirement benefit obligation [Note 24] 1,141,519 1,081,485 93,875,494 92,476,344

30 Related party transactions

Urban Development Authority and Ceylon and Foreign Trades PLC had shareholding of 48% and 24% respectively of the Company, during the year and as at the date of the statement of financial position.

Mr Ranjit Michael Samuel Fernando was the Former Chairman (resigned on 24 August 2016), Mr Nayana Nadeesha Mawilmada was the Former Director General (resigned on 12 May 2016) of the Urban

Development Authority as at the date of the Statement of Financial Position .

Dr S A Gulamhusein, Director and Shareholder of the Company is also the Chairman of Ceylon and Foreign Trades PLC with whom no transactions had been entered into by the Company during the year.

The Company has a lease agreement with Network Communications (Private) Limited which occupies premises rented by the Company. Dr. A A shabbir , son of Dr S A Gulamhusein is a Director of Network Communications (Private) Limited.



30 Related party transactions (contd)

The Company has carried out the following transactions during the year with related parties:

Year ended 31 March

a) Rendering of Services 2016 2015

(i) Rent income received from Network Communications (Private) Limited 3,103,575 3,676,055

b) Purchase of Services

(ii) Management fees paid to Urban Development Authority [Note 28 (b)] 1,224,480 1,224,480Outstanding balances arising from above transactions; Rental deposit payable to Network Communications (Private) Limited [Note 23] - Current 1,035,720 470,340 - Non-current 470,340 827,820 1,506,060 1,298,160

Transactions with related parties disclosed above were made on terms equivalent to those that prevail in arm’s length transactions.

The Directors have disclosed the nature of their interests in contracts and proposed contracts with the company at meetings of the Directors.

(iv) Key management compensation Key management includes directors (executive and non executive). The compensation paid or

payable to key management for employee services is shown below:

Year ended 31 March 2016 2015 Salaries and other short-term employee benefits 5,635,784 7,447,941 5,635,784 7,447,941

31 Events after the reporting period

The following events have occurred after the reporting period;

(i) Changes in composition of the Board of Directors

Mr N.N.M Mawilmada was resigned on 12 May 2016. Mr R.M.S Fernando was resigned on 24 August 2016. Mr. A. M. Rakeeb was resigned on 02 September 2016

(ii) The Directors have approved a final dividend of Rs 2.00 per share amounting to Rs. 35,001,540 for the year ended 31 March 2016 on 25 August 2016.

No other events have occurred except to the above since the date of the statement of financial position, which require adjustment to, or disclosure in, the financial statements.


SIX YEAR REVIEW

Year ended 31 March 2011 2012 2013 2014 2015 2016 Rs. Rs. Rs. Rs. Rs. Rs.OPERATING RESULTS

Turnover 82,478,010 88,705,349 98,356,729 105,387,820 116,957,020 122,784,299

Operating profit 50,542,138 56,022,537 62,233,131 66,894,611 82,843,759 86,568,198Interest income 6,639,742 7,047,351 15,995,112 21,970,169 15,014,931 15,451,181Loss on disposal of fixed assets Nil Nil (6,554,000) Nil Nil NilFair value gain on investment properties 47,211,507 100,558,461 Nil 235,489,597 3,640,563 378,523,032

Profit before Tax 104,393,387 163,628,349 71,674,243 324,354,377 101,499,253 480,542,411Tax (20,022,636) (18,246,647) (6,647,736) (58,527,468) (11,793,721) (150,089,550)

Profit after tax 84,370,751 145,381,702 65,026,507 265,826,909 89,705,532 330,452,861Other comprehensive income -net of tax Nil 107,637 450,292 (1,468,637) 345,241 1,945,946Profit brought forward 784,344,408 758,103,146 833,846,923 857,981,597 1,077,295,912 1,120,741,585Profit available for appropriation 868,715,159 903,592,485 899,323,722 1,122,339,869 1,167,346,685 1,453,140,392Transfer (to)/from reserves (76,310,504) 3,147,794 1,534,761 458,045 2,397,056 721,377Capitalization of Reserves and related direct cost Nil (36,491,754) Nil Nil Nil NilDividends paid (34,301,509) (36,401,602) (42,876,886) (45,502,002) (49,002,156) (51,627,272)

Profit carried forward 758,103,146 833,846,923 857,981,597 1,077,295,912 1,120,741,585 1,402,234,497

ASSETS

Non-current assetsProperty, plant & equipment 25,133,219 25,832,687 24,277,479 32,682,708 32,084,614 47,450,823Intangible assets Nil Nil Nil Nil Nil 328,927Investment properties 942,109,111 1,050,917,229 1,053,115,654 1,294,406,443 1,298,154,296 1,681,000,000Current assets 105,644,320 121,653,220 147,492,948 184,880,488 234,562,267 280,231,096

Total assets 1,072,886,650 1,198,403,136 1,224,886,081 1,511,969,639 1,564,801,177 2,009,010,846

EQUITY AND LIABILITIES

Stated capital 140,006,160 175,007,700 175,007,700 175,007,700 175,007,700 175,007,700Revaluation reserve 23,572,551 20,824,064 19,289,303 27,882,263 27,054,828 39,990,241Retained earnings 758,103,146 833,846,923 857,981,597 1,077,295,912 1,120,741,585 1,402,234,497

Non - current liabilities 113,241,490 144,518,264 133,723,178 200,075,212 189,945,037 362,465,135current liabilities 37,963,303 24,206,185 38,884,303 31,708,552 52,052,027 29,313,273

Total equity & liabilities 1,072,886,650 1,198,403,136 1,224,886,081 1,511,969,639 1,564,801,177 2,009,010,846

KEY INDICATORS

Earnings per share 6.03 8.31 3.72 15.19 5.13 18.88Earnings per share(exclusive fair value gain) 2.65 2.56 3.72 4.58 4.98 5.13Dividend per share 2.45 2.35 2.45 2.60 2.80 2.95Net Assets per share 65.83 58.84 60.13 73.15 75.59 92.41Market price per share 72.40 59.00 48.00 46.20 64.00 50.20

OTHERS

Number of shareholders 613 841 809 801 808 868Dividend cover (Times) 2.46 3.53 1.52 5.84 1.83 6.40Dividend cover((Times)exclusive of fair value gain) 1.08 1.09 1.52 1.76 1.78 1.74Dividend pay out ratio 0.41 0.28 0.66 0.17 0.55 0.16Dividend pay out ratio (exclusive of fair value gain) 0.92 0.92 0.66 0.57 0.56 0.58


INFORMATION TO INVESTORS

DISTRIBUTION OF SHAREHOLDINGS AS AT 31ST MARCH 2016

From To No. of Holders No. of Shares % 1 - 1,000 712 105,200 0.60 1,001 - 10,000 121 340,012 1.94 10,001 - 100,000 28 780,082 4.46 100,001 - 1,000,000 3 1,594,184 9.11 Over 1,000,000 4 14,681,292 83.89 868 17,500,770 100.00

ANALYSIS OF SHAREHOLDERS AS AT 31ST MARCH 2016

Category No. of Shareholders No. of Shares % Local Individuals 802 4,064,241 23.22 Local Institutions 59 13,386,663 76.49 Foreign Individuals 6 9,866 0.06 Foreign Institutions 1 40,000 0.23 868 17,500,770 100.00

31.03.2016 31.03.2015 Rs. Rs.Market price per shareHighest during the period Rs.76.00 (12/06/2015) Rs.72.50 (02/10/2014)Lowest during the period Rs.50.00 (15/03/2015) Rs.45.00 (17/04/2014)As at end of the period 50.20 Rs.64.00

PUBLIC HOLDING

The percentage of shares held by the public as at 31st March 2016 is 18.63% comprising of 854 shareholders.

PER SHARE DATA AS AT 31 MARCH

2016 2015Earnings per share (Rs) 18.88 5.13Earnings per share(exclusive fair value gain) (Rs) 5.13 4.98Dividend per share (Rs) 2.95* 2.80**Net assets per share (Rs) 92.41 75.58Market price per share as at 31 March (Rs) 50.20 64.00

* Final dividend of Rs 1.85 per share paid for the year ended 31/03/2015 and interim dividend of Rs 1.10 per share paid for the year ended 31/03/2016.

** Final dividend of Rs 1.70 per share paid for the year ended 31/03/2014 and interim dividend of Rs 1.10 per share paid for the year ended 31/03/2015.


MAJOR SHAREHOLDERS OF THE COMPANY

Name As at 31/03/2016 As at 31/03/2015 No. of Shares (%) No. of Shares (%)

1 Urban Development Authority 8,333,332 47.617 8,333,332 47.617 2 Pan Asia Banking Corporation PLC/ 2,799,450 15.996 2,799,450 15.996 Ceylon Foreign Trades PLC 3 Mr. O Gulamhusein (Deceased) 2,143,035 12.245 2,143,035 12.245 4 Commercial Bank of Ceylon PLC/ 1,405,475 8.031 1,405,475 8.031 Ceylon and Foreign Trades PLC 5 Mr.B V Selvanayagam , Mr.S G Selvanayagam 937,500 5.357 937,500 5.357 & Mrs.L Selvanayagam 6 Waldock Mackenzie Ltd/ 463,427 Mr S A Gulamhusein Commercial Bank of Ceylon PLC/ 12,052 508,590 2.906 504,739 2.884 Dr. S A Gulamhusein Dr. S H A Gulamhusein 31,250 Assetline Leasing Company Ltd/ 1,000 Dr.S A Gulamhusein Sampath Bank PLC/ 1,160 Dr. S A Gulamhusein 7 Mrs. L Selvanayagam 193,556 1.106 193,556 1.106 8 Majestic Investments (Pvt) Ltd 79,768 0.456 72,336 0.413 9 Nanayakkara Management Services (Private) Limited 69,371 0.396 65,247 0.373 10 Mr.W R H Perera 63,843 0.365 63,843 0.365 11 Mrs. T Sarveshwaran 57,316 0.328 57,316 0.328 12 Merrill J Fernando & Sons (Pvt) Limited 49,040 0.280 49,040 0.280 13 Mrs.K S Cooray 41,665 0.238 41,665 0.238 14 Tranz Dominion,L L C 40,000 0.229 40,000 0.229 15 Asha Financial Services Limited/ 38,871 0.222 35,841 0.205 Mr. C N Pakianathan 16 Dee Sanda Holdings Pvt Limited 35,840 0.205 51,476 0.294 17 Mr.K Gnanenthiran 31,250 0.179 31,250 0.179 18 Mr.A A Noordeen 27,375 0.156 27,375 0.156 19 Anwarnet (Private) Limited 23,783 0.136 22,053 0.126 20 Mr. K S A Ramchandani 21,750 0.124 21,750 0.124 16,900,810 96.572 16,896,279 96.546 599,960 3.428 604,491 3.454 17,500,770 100.000 17,500,770 100.000

}

In witness my/our* hands this ……………. day of ……………. Two Thousand and Sixteen *Please delete as appropriate

…………………………….. Signature of Shareholder/s

Notes: 1. A proxy need not be a Shareholder of the Company. 2. Instructions as to completion appear below.

FORM OF PROXY

I/We..………………………………………………………………………(NIC No. ……………………) of .………………………………………………………………………………………………….. being a Shareholder/Shareholders of ON’ALLY HOLDINGS PLC hereby appoint .........…………………………………………………………………………………………………………………………………………………………………………………………………(NIC No.…………………………….) of ….…..………………………………………………………………………………………………(or failing him/her).

Dr. S A Gulamhusein or failing him* Mr. B V Selvanayagam or failing him* Mrs.T Sarveshwaran or failing her * Mr. G T Fazleabas or failing him* Mr. M I R Zahir or failing him* Mr. A C Yahiyakhan or failing him* Mr. T A Akbarally or failing him*

as my/our* proxy to represent and speak and vote for me/us* and on my/our* behalf at the Twenty Ninth (29th) Annual General Meeting of the Company to be held on 30th September 2016 and at any adjournment thereof and every poll which may be taken in consequence of the aforesaid meeting.

I/We,* the undersigned, hereby authorize my/our proxy to speak and vote for me/us* and on my /our* behalf in accordance with the preference as indicated below;

For Against

1 To receive and consider the Annual Report of the Board of Directors and the Statements of Accounts for the year ended 31st March 2016 with the Report of the Auditors thereon

2 To re-elect Dr. S A Gulamhusein, who retires by rotation in terms of Article 88 of the Articles of Association of the Company, as a Director

3 To re-elect Mr. T A Akbarally who retires in terms of Article 95 of the Article of Association of the Company, as a Director

4 To re-appoint Messrs PricewaterhouseCoopers, Chartered Accountants, as Auditors of the Company and to authorize the Directors to fix their remuneration.

5 To authorize the Directors to determine donations for the year ending 31st March 2017 and up to the date of the next Annual General Meeting.

ON’ALLY HOLDINGS PLC

FORM OF PROXY (contd.)

INSTRUCTIONS FOR COMPLETION

1. Kindly perfect the Form of Proxy by filling in legibly your full name address and the National Identity Card number and signing in the space provided and filling in the date of signature.

2. The completed Form of Proxy should be deposited at the Registered Office of the Company, Unit 603, 4th Floor, Unity Plaza Building, No. 2, Galle Road, Colombo 04 not later than forty seven (47) hours prior to the time appointed for the Meeting.

3. If you wish to appoint a person other than the Chairman or a Director of the Company as your Proxy, please insert the relevant details in the space provided (above the names of the Board of Directors) on the Proxy Form..

4. If the Form of Proxy is signed by an Attorney, the relative Power of Attorney should accompany the Form of Proxy for registration if such Power of Attorney has not already been registered with the Company.

5. If the appointer is a Company / Incorporated body this Form must be executed in accordance with the Articles of Association / Statute.

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