Contents · Mr. Waruna Indika Arambage - Chairman/Non Independent/Non Executive Director ... faced...

Corporate Information ..............................................................2

Chairman's Review ......................................................................3

Board of Directors.......................................................................4

Risk Management .......................................................................5

Report of the Directors ......................................................6 - 7

Statement of Directors' Responsibilities ............................8

Corporate Governance .................................................... 9 - 10

Audit Committee Report ....................................................... 11

Remuneration Committee Report ..................................... 12

Related Party Transactions Review Committee Report ..........13

Independent Auditor's Report ............................................ 14

Statement of Comprehensive Income ............................. 15

ContentsStatement of Financial Position .......................................... 16

Statement of Changes in Equity ......................................... 17

Statement of Cash Flows ....................................................... 18

Notes to the Accounts ..................................................19 - 47

Ten Year Summary .................................................................. 48

Investor Information ......................................................49 - 51

Election of Independent Directors .................................... 52

Notice of Annual General Meeting ................................... 53

Notes ............................................................................................ 54

Form of Proxy ............................................................................ 55

Instructions to Completion .................................................. 56

2 Standard Capital PLC - Annual Report 2016 /17

Corporate InformationNAME OF THE COMPANY Standard Capital PLC

COMPANY REGISTRATION NO.PQ 206 LEGAL FORMA Public Limited Liability Company initially incorporated under Companies Act No. 17 of 1982 and reregistered under Companies Act No. 7 of 2007.

DIRECTORSMr W. I. Arambage - Chairman, Non Independent / Non-Executive Director Mr S. Gamage - Independent/ Non-Executive DirectorMr A. l. Neama - Non Independent / Non Executive Director Mr S. Kader - Non Independent / Non-Executive Director Mr A. M. A. Cader - Independent / Non-Executive Director

AUDIT COMMITTEEMr A. M. A. Cader - Chairman (Independent / Non Executive) Mr S. Gamage - (Independent / Non Executive)Mr W. I. Arambage - (Non Independent / Non Executive)

REMUNERATION COMMITTEEMr S. Gamage - Chairman (Independent / Non Executive) Mr A. M. A. Cader - (Independent / Non Executive)Mr W. I. Arambage - (Non Independent / Non Executive)

RELATED PARTY TRANSACTIONS COMMITTEEMr A. M. A. Cader - Chairman (Independent / Non Executive) Mr S. Gamage - (Independent / Non Executive)Mr W. I. Arambage - (Non Independent / Non Executive)

COMPANY SECRETARYMessrs. Corporate Advisory Services (Pvt) Ltd No.47, Alexandra Place, Colombo 07

REGISTRARSS S P Corporate Services (Pvt) Ltd 101, Inner Flower Road, Colombo 3

AUDITORSErnst & Young Chartered Accountants201, De Saram Place, Colombo 10

BANKERSCommercial Bank of Ceylon PLC Seylan Bank PLCSampath Bank PLCNational Development Bank PLC

REGISTERED OFFICESNo.187,Ward Place, Colombo 07.

Standard Capital PLC - Annual Report 2016 /17 3

On behalf of the Board of Directors, I have the pleasure of welcoming you to the 31st Annual General Meeting of Standard Capital PLC, and to present you the Annual Report and Financial Statements for the Financial Year ended 31st March 2017. Consequent to the successful Rights Issue in September 2011 and in line with its objectives, the Company continued the investments in the two subsidiaries of the Company.

The Company has a 65% stake of Standard Paints Ltd (SPL), which manufactures paints and wood care products under the trademarks Jemax, Rovex and Standard Paints. Due to adverse market conditions, company witnessed decline in sales and declined in gross profit margin. The Board of Directors have decided to sell the assets of Standard Paints Ltd and concentrate only in solvent trading business.

In August 2013, the Company established its second subsidiary, Standard Industrial Solutions (Pvt) Ltd (SIS). SIS was incorporated to engage in dedicated industrial chemicals trading, which results in substantial synergies with the business of Standard Paints Ltd. During the year under review the turnover from chemical trading witnessed a decline due to the resignation of the sales director of SIS who has later joined a competitor in violation of his employment contract. SIS has initiated legal action to recover damages caused by his violation of the employment contract. During 2015 SIS established another division for wood pellet production, which is a bio fuel made from saw dust, with a view of exporting products. Unfortunately, with the decline of global wood pellet prices which correlate with oil prices, export prices were not attractive. Due to an environmental issue the Board of Directors have decided to close the operation of the company. The commercial high court holden in Colombo on 18th June 2018 made an order to winding up of Standard Industrial Solutions (Pvt) Ltd.

The Board of Directors of the company intend to concentrate on making selective investments in listed equities after sale of assets of the subsidiaries are finalized.

I take this opportunity to extend the appreciation of the Board of Directors of the Company to the shareholders for their continued support and confidence in the Company.

Waruna ArambageChairman

1st July 2019

Chairman’s Review


Board of DirectorsMr. Waruna Indika Arambage - Chairman/Non Independent/Non Executive Director

Mr. Waruna Indika Arambage was appointed to the Board of Standard Capital PLC on 3rd August 2009 as a non-executive Nominee Director of Gulf East Finance Limited, the Major Shareholder of the Company, and appointed as the Chairman on 6th October 2009.

Mr. Arambage is a Member of Chartered Institute of Management Accountants - UK (FCMA, CGMA), Association of Chartered Certified Accountants - UK and Institute of Engineers- Sri Lanka (AMIESL). He holds a BSc (Hons) in Electrical Engineering from the University of Moratuwa and a Masters in Business Administration from the University of Surrey (UK).

He is a Director on the Boards of Equity Investments Lanka Ltd, Standard Paints Ltd, Standard Constructions (Pvt.) Ltd, Standard Logistics (Pvt.) Ltd, Standard Trading Ltd & Sinali Capital (Pvt.) Ltd. He also acts as the financial consultant for several overseas companies with operations in UK, Middle East and Africa.

Mr. Amrit Rajapakse -Non Independent/Non Executive Director

Mr. Rajapakse was appointed to the Board on 18th July 2011, as a Nominee Director of Gulf East Finance Ltd. Mr. Rajapakse is an Attorney-at-Law by profession. He holds an LLB (Hons) degree from the University of Colombo and an LLM in International Business Law from the University of London. Mr. Rajapakse was appointed as Chairman of Standard Industrial Solution (Pvt.) Ltd from 03-12-2015 and as Chairman of Standard Paints Ltd from 10-12-2015. Mr. Rajapakse has resigned as a director with effect from 26/01/2018.

Mr. Sarhank Kader -Non Independent/Non Executive Director

Mr. Sarhank Kader was appointed to the Board of Directors of the Company on 04th November, 2011. He is the Current Chairman of Delta Communication Group of Companies of Middle East and holds a proven track record for creating new businesses and forming profitable partnerships. As a Business Consultant, he advises and assists numerous territories on new media mobile marketing for variety of clients, focusing primarily, although not exclusively, on the strategic use of operations and technology. The services offered by him include, Turnaround Strategy, Business Process Improvements and Advisory Services, Technology Assessments and Systems Selections. As a pioneer in the field, Mr. Kader has over twenty years of experience in business administration, including Property Management, Marketing and Project Financing.

Mr. Kader has a good academic background and he has followed various courses in Economics, Politics and Business Administration at North Trafford College, Woolwich Polytechnics & Manchester Polytechnics in England.

Mr. Ahmed Al Naema -Non Independent/Non Executive Director

Mr. Ahmed was appointed to the Board of Directors on 04th November, 2011. He holds a BA (Hons) in Accounting & Finance from London South Bank University and he is partly qualified in ACCA, UK.

Mr. Ahmed has a proven track record with excellent experience in Project Management and Sales and Finance. His success in the profession is ensured by the clear logical mind with a practical approach to problem solving and a drive to see things through completion. Mr. Ahmed has a strong sense of confidence, competitiveness and persuasive ability proven by previous sales experience mainly in the London Property Market.

Mr. Sudarshan Gamage -Independent/Non Executive Director

Mr. Gamage was appointed to the Board of Directors of the Company, as an Independent, Non executive Director on 02.09.2009. He is an Electrical Engineer by profession and holds a BSc (Hons.) degree in Engineering. He also holds an MBA in Management of Technology (MOT) from the University of Moratuwa, Sri Lanka. Mr. Gamage is a member of The Institute of Engineering and Technology (MIET), UK and an Associate Member of the Institution of Engineers (AMIESL), Sri Lanka."

Mr. A.M.A. Cader -Independent/Non Executive Director

Mr. A M A Cader was appointed to the Board of Directors of the company as an Independent, Non-executive Director on 05th February 2016.

He is specialized by 35 years of industry proficiency, Mr. Cader was the Deputy General Manager (Corporate Advisory & Capital Markets division) of Merchant Bank of Sri Lanka and Finance PLC for 25years (1990 to 2015). During his professional career, Mr Cader has gained experience as a competent investment banker with specialization in services such as IPO's Pre-IPO Restructuring & Advisory, Strategic Business Plans, Corporate Valuations, Portfolio Management, Employee Share Option Plans, Debt Syndications, Securitizations and delivering training Programs.

He is Fellow Member of the Chartered Institute of Management Accountants, UK, a fellow Member Society of Certified management Accountants of Sri Lanka, an Associate Member of the Institute Financial Accountants, London and a Member of Association of Accounting Technicians, Sri Lanka.

Also, he holds a Master of Business Studies from University of Colombo, a M.Sc. in Information Technology from Sri Lanka Institute of Information Technology (SLIIT), a Post Graduate Diploma in Economic Development from University of Colombo, a Post Graduate Diploma in Business Administration from University of Colombo and a Post Graduate Diploma in Information Technology from University of Colombo.

He was trained overseas in Advance Corporate Finance by Citicorp Investment in Singapore and Advanced Capital Markets by Westpac in Australia. SEC-Sri Lanka and SEC- Australia in 1990/91.


Risk ManagementThe Company is of the view that Risk management is a main dynamic to sustain and develop the business, as balancing risks against returns is a crucial trade off decision in making investment decisions. Early identification of risks and timely deployment of necessary actions to reduce or manage such risks will ensure the Company's objectives are achieved. The Board of Directors of the Company has ultimate responsibility for risk management and the risk management process supports,

● Corporate Governance● Quality of Business planning● Audit planning● Building confidence of various stakeholder groups of the Company and the Group.

The risk of the subsidiaries, Standard Paints Limited and Standard Industrial Solutions (Pvt.) Ltd, are reviewed and managed for effective mitigation by the Company, while necessary action plans are created at subsidiary level. These include Liquidity and Cash Management, Interest risk, Credit Risks, Inventory Management, Technology and Quality related risks, Asset Risks, Competitor Risks, Information Systems and Internal Control Risks, Environmental Risks and Legal & Regulatory issues. Each Risk has been categorized under High, Moderate or Low category based on the level of significance to the entity and actions taken accordingly.

The Company is exposed to adverse movements in the securities markets for equity and fixed income investments, which could cause loss of value together with fluctuations in the returns expected from the securities. Market risks are inherent in every security and are hence viewed from the portfolio level which considers the allocations on the portfolio. Market risks affecting a specific class of security are mitigated by replacement/switching to securities that are determined to be less risky.

The Company has developed its own model taking into account exposure limits and parameters to sustain itself when faced with market risks that has an impact on portfolio values. Trading decisions are made if indications are that there is a slowing down of stock market activity or become adverse.


Report of the DirectorsThe Directors have pleasure in presenting to the shareholders, their Report together with the Audited Financial Statements of the Company for the year ended 31st March, 2017.

The details set out herein provide pertinent information required by the Companies Act No. 07 of 2007, the Listing Rules of the Colombo Stock Exchange and are guided by recommended best Accounting Practices.

Principal ActivitiesThe principal activities of the Company are investing in theCapital Market and financial instruments.

Changes to the nature of BusinessThere were no material changes to the nature of the business of the Company during the financial year ended 31st March, 2017

Subsidiary CompaniesStandard Capital PLC owns 65% of the stated Capital of Standard Paints Ltd. The Financial Information pertaining to the said Subsidiary Company is presented in the Consolidated Financial Statements in Note 08 on pages 29 to 31 set out in the Annual Report of the Company.

The Company has a 60% shareholding of Standard Industrial Solutions (Pvt.) Ltd, which company imports and distribute industrial chemicals. The basis for treating this as a subsidiary has been disclosed in Note 08 on pages 29 to 31.

Accounting PoliciesThe Accounting Policies adopted by the Group and the Company are consistent with those of the previous financial year except as required by new or revised standards mandatory to be adopted in the current financial year. A summary of significant Accounting Policies is set out on pages 19 to 25.

Business Review of the YearThe chairman's statement describes in brief the company's affairs and important events during the period under review.

Financial StatementsThe financial statements for the year ended 31st March 2017are set out on pages 14 to 47.

Directors' Responsibility for the Financial StatementsThe Directors are responsible for preparing and presenting the financial statements, which are set-out on pages 14 To 47. The financial statements have been prepared in accordance with the Sri Lanka Accounting Standards as laid down by the Institute of Chartered Accountants of Sri Lanka and also in conformity with the requirements of the Companies Act No. 7 of 2007. A Statement of Directors Responsibilities is set out on page 8 of this Report.

Financial PositionA summary of the key financial information of the group is setOut below

Year ended 31st March 2017 2016

Profit/(Loss) before Tax (69,721,005) (42,103,545)

Profit/(Loss) after Tax (68,701,682) (48,026,289)

Profit/(Loss) After Discontinued Operations (92,174,446) (64,558,255)

Reserves (21,406,934) 95,434,602

Stated Capital 242,411,225 242,411,225

Revaluation Reserve 40,930,843 53,065,302

Retained Earnings (62,714,171) 41,957,211

Auditor's ReportThe Auditors' Report which is an integral part of the financial statements prepared for the accounting period ended 31st March, 2017, is set out on page 14 in the Annual Report.

Property, Plant & EquipmentDetails of the Property, Plant & equipment and the applicable depreciation charge for the year are set out on pages 26 and 27.

Market Value of PropertiesThe revaluation process for the land and building of the Group was carried out by professionally qualified independent valuer. The last revaluation exercise on the property, plants and equipment of the Group was carried out as at 31st March 2017.

Details of property, plants and equipment of the Group are given in Note 04 to the Financial Statements on pages 26 and 27.

Board of DirectorsThe Board of Directors of the Company as at date is set out on page 02 titled "Corporate Information". The Directors of the Company who held office during the year under review and changes thereto are indicated below:

Mr W I Arambage Chairman, Non Independent / Non Executive Director

Mr S Gamage Independent /Non Executive Director

Mr L A Rajapakse Non Independent / Non Executive Director

Mr A B Al Neama Non Independent / Non Executive Director

Mr S Kader Non Independent / Non Executive Director

Mr A M A Cader Independent /Non Executive Director


Report of the Directors Contd...In terms of Article 85 of the Articles of Association of the Company, Mr. A. M. A. Cader, Director, retires by rotation and being eligible is recommended by the Board of Directors for re-election by the Shareholders, at the Annual General Me Meeting of the Company.

Directors Shareholdings

Name of the Director As At31.03.2017

As At31.03.2016

Mr. W.I. Arambage - -

Mr. S. Gamage - -

Mr L A Rajapakse - -

Mr. Ahmed B Al Naema - -

Mr. S. Kader - -

Mr. A.M.A. Cader 06 06

Directors' Remuneration and other BenefitsDirectors' fees and emoluments for the financial year ended 31st March, 2017, is Rs. 2,773,000.

Interest RegisterThe Company maintains an Interest Register in compliance with the requirements of the Companies Act No 07 of 2007.

Directors' Interest Directors' Interest in contracts are disclosed under related party transactions in Note 29 to the financial statements.

DonationsNo donations have been paid during the year ended 31st March, 2017.

ShareholdersThe total number of shares of the Company as at 31st March, 2017 was 5,540,828 (2016 - 5,540,828). The distribution of the Shareholding and a listing of the 20 Major Shareholders are given under Investor Information on pages 49, 50 and 51.

The market value of the Company's Ordinary Shares as at 31st March, 2017 was Rs. 60/- compared to Rs. 90/- as at 31st March, 2016.

AuditorsThe financial statements for the period under review have been audited by M/s Ernst & Young, Chartered Accountants Rs.225,000/- (2016 - Rs.220,000/-) was payable by the Company as audit fee for the year ended 31st March, 2017.

M/s Ernst & Young, Chartered Accountants, have expressed their willingness to continue in Office and a Resolution to re- appoint them and to authorise the Directors' to determine their remuneration will be proposed at the Annual General Meeting.

Employment PolicyThe Company employs one (1) Person and the group has 81 employees during the year. All services are provided by Standard Paints Limited and Standard Industrial Solutions (Private) Limited, to whom a fee is paid.

Events after Reporting DateThere were no Post Balance Sheet events which would require adjustment or disclosure in the financial statements.

By Order of the Board

Mr. Waruna Arambage Mr Sudarshan GamageChairman Director

Corporate Advisory Services (Pvt) LtdSecretaries

1st July 2019


Statement of Directors’ Responsibilities Directors' Responsibilities for the Preparation of Financial StatementsThis Statement of Directors' Responsibilities is to be read in conjunctions with the Auditors' Report and is made to distinguish the respective responsibilities of the Directors and of the Auditors in relation to the Financial Statements contained in this Annual Report. The Directors of your Company are required by the Companies Act No. 7 of 2007 to prepare Financial Statements which give a true and fair view of the state of affairs of the Company as at the end of the Financial Year, and of the Profit and Loss and of the Cashflows of the Company for the Financial Year.

The Directors confirm that the Financial Statements of the Company for the year ended 31st March, 2017 presented in the Report have been prepared in accordance with the Sri Lanka Accounting Standards and the Companies Act No.7 of 2007. In preparing the Financial Statements, the Directors have selected the appropriate accounting policies and have applied them consistently. Reasonable and prudent judgments and estimates have been made and applicable accounting standards have been followed and the Financial Statements have been prepared on a going concern basis.

The Directors are of the view that adequate funds and other resources are available within the Company for the Company to continue in operation for the foreseeable future.

The Directors have taken all reasonable steps expected of them to safeguard the assets of the Company and to establish appropriate systems of internal controls in order to prevent, deter and detect any fraud, misappropriation or other irregularities. The Directors have also taken all reasonable steps to ensure that the Company maintains adequate and accurate accounting books of record which reflect the transparency of transactions and provide an accurate disclosure of the Company's financial position.

The Directors are required to provide the Auditors with every opportunity to take whatever steps and undertake whatever inspection they consider appropriate for the purpose of enabling them to give their Audit Report. The Directors are of the view that they have discharged their responsibilities in this regard.

Compliance ReportThe Directors confirm that, to the best of their knowledge, all taxes and levies payable by the Company and all contributions, levies and taxes payable on behalf of the employees of the Company, and all other known statutory obligations as at the balance sheet date have been paid or provided for in the Financial Statements.

By Order of the Board

Corporate Advisory Services (Pvt) LtdSecretaries

Colombo1st July 2019


Corporate Governance refers to the systems, principles and process by which a company is governed. It provides the guidelines as to how the company should be directed or controlled in order to fulfill its goals and objectives in a manner that also adds value to all its stakeholders, in the short and long term. Stakeholders of a company would include everyone ranging from the Board of Directors, Management, Shareholders, customers, employees and the society. The Board of Directors of the Company therefore takes upon the role of a trustee for all the stakeholder groups.

As the Board of Directors are responsible for the governance of the Company, to take it forward in the right direction, the Shareholders role in governance is to appoint the Board of Directors and the Auditors and to satisfy themselves that an appropriate governance structure for the Company is in place.

Compliance with the Code of Best PracticeThe Company currently complies with the requirements set out in the Code of Best Practice for Corporate Governance issued by the Institute of Chartered Accountant of Sri Lanka; Rules on Corporate Governance contained in the Listing Rules of the Colombo Stock Exchange.

The financial statements for the year ended 31st March, 2017 of the Company, comply with Sri Lanka Financial Reporting Standards corresponding to International Financial Reporting Standards (IFRS) Board of DirectorsThe Board of Directors of the Company comprises of six (06) Non-Executive Directors.

Following table illustrate details of attendance of each of the Director at the said Three (3) Board Meetings and Audit Committee Meetings of the Company.

Name of the Director Category Attendance

Mr W Arambage Non-Executive / Non-Independent 03

Mr S Gamage Non-Executive / Independent 02

Mr L A Rajapakse Non-executive /Non Independent 03

Mr A B Al Neama (Represented by his Alternate Director L A Rajapakse) Non-executive/Non Independent 03

Mr S Kader (Represented by his Alternate Director L A Rajapakse) Non-Executive / Non Independent 03

Mr A A Cader - Appointed with effect from 05.02.2016 Independent / Non-Executive 03

The Board meets as and when the need arises to and discusses matters pertaining to performance, governance and financial management of the Company and advices and directs the Management on necessary policy implementation and planning in order to enhance the performance of the Company. Three(03) Meetings of the Board of Directors have been convened during the year under review.

A Statement of Directors' Responsibilities for the preparation of Financial Statements is set out on page 8 of this Report.

Board Sub-CommitteesIn accordance with the Listing Rules of the Colombo Stock Exchange, the Board has constituted three sub committees, namely, the Audit, Remuneration and the Related Party Transactions Review Committees.

The Board sub-committees scrutinize and analyze the areas under their purview and make recommendations to the Board on necessary adjustments and modifications to the internal systems of the Company.

The Reports on the Audit, Remuneration and the Related Party Transactions Review Committees are set put on pages 11, 12 and 13 respectively.

The Composition of the Board as at the end of the period under review is set out in the table below, together with a record of the attendance of every Director at Board and Sub Committee Meetings during the period under review.

Corporate Governance

Company SecretariesCorporate Advisory Services (Pvt) Ltd provides Corporate Secretarial Services to the Company. The Company Secretaries play a key role in compliance matters by ensuring that the Company complies with the requirements of the Companies Act No.7 of 2007, the Rules of the Colombo Stock Exchange and other regulatory bodies. The Secretaries also ensure that Board procedures are followed and information is provided to shareholders on a timely basis.

Compliance with Legal RequirementsAll Directors have access to the advice and services of the Company Secretaries as well as to the Financial Information of the Company. The Directors make every endeavor to ensure that the Company Complies with Laws and Regulations.


Corporate Governance Contd... Corporate Governance Report Levels of compliance as per Section 07 of the Listing Rules of the Colombo Stock Exchange

Rule No. Subject Applicable requirement Compliance Status

7.10.1 Non-Executive Directors

At least 1/3 of the total number of Directors should be Non-Executive Directors at the immediately preceding Annual General Meeting

Complied

7.10.2 Independent Directors

At least 1/3 of Non-Executive Directors should be independent.

Two (2) of the Six (06) Non-Executive Directors are independent.

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

Complied

Complied

7.10.3 Disclosure relating to Directors

Names of independent Directors should be disclosed in the Annual Report

The Board shall make a determination annually as to the independence or non-independence of each non-executive Director based on the Declaration

A brief resume of each Director should be included in the Annual Report and should include the Director's areas of expertise

Complied

Complied

Complied

7.10.5 Remuneration Committee

A listed Company shall have a Remuneration Committee and shall comprise of Non-Executive Directors a majority of whom will be independent

Complied

Please refer page 12 of the Annual Report

7.10.6 Audit Committee

A Listed entity shall have an Audit Committee comprising of Non-Executive Directors a majority of whom shall be independent

A non-Executive Director shall be appointed as the Chairman of the Audit Committee

Unless otherwise determined by the Committee the Chief Executive Officer and the Chief Financial Officer shall attend Audit Committee Meetings

The Chairman or one Member of the Committee should be a member of a recognized professional accounting body

Complied

Complied

Complied

Complied

Please refer page11 of the Annual Report


Audit Committee ReportThe scope of the audit committee is to assist the main board in safeguarding the interest of the shareholders and all other stakeholders. The main objectives of the committee are review of annual financial statements, quarterly financial statements, ensuring compliance with all laws and regulations, review of effectiveness of financial and internal control system and follow up independent audit committee reports, recommendations of appointment of independent auditors and their fees and identification of risks that would impact on company's business.

Audit committee consists of 3 non-executive directors who are as follows.

● Mr. A M A Cader - Chairman (Independent / Non Executive)

● Mr. S Gamage - (Independent / Non-Executive)● Mr. W I Arambage - (Non-Independent / Non

Executive)

Relevant financial statements, including quarterly and annual statements and findings of the statutory auditors were reviewed by the committee. Additionally, the impact of the changes in legislation affecting the activities of the company was addressed. The audit committee recommends the re- appointment of Messrs Ernst & Young, Chartered Accountantsas the Independent Auditor for the year 2017 / 2018.

A M A CaderChairman

1st July 2019


Remuneration Committee ReportThe Remuneration Committee consists of 3 Non-Executive Directors, who are as follows

● Mr. S Gamage - Chairman (Independent, Non-Executive)● Mr. A M A Cader - (Independent, Non-Executive)● Mr. W. I. Arambage - (Non Independent, Non-Executive)

The Company remuneration policy focuses on attracting the best possible professional and talented people and encouraging and motivating them to perform at the highest possible standard. The company has a structured performance appraisal scheme which evaluate the performance of the employees. The Company has taken all the possible steps to ensure that remuneration at all levels is in line with that of the industry. Further, general inflationary conditions prevailing within the country are also being considered in formulating remuneration packages.

Mr. S GamageChairman

1st July 2019


Related Party Transactions Review Committee ReportThe Board of Directors of Standard Capital PLC (the Company) adopted the Code of Best Practices on related party transactions issued by the Securities and Exchange Commission of Sri Lanka (SEC) and established the Related Party Transactions Review Committee (RPTRC) on 19th February, 2016. The purpose of the RPTRC is to conduct an independent review approval and oversight of all related party transactions of the Company and to ensure that the Company complies with the rules set out in the Code. The primary objectives of the said rules are to ensure that the interest of the shareholders as a whole are taken into account when entering into related party transactions, and to prevent the Directors, Key Management Personnel or substantial shareholders from taking advantages of their positions. To exercise this purpose the Committee had adopted the related party transaction Policy which contains the Company's Policy governing the review, approval and oversight of related party transactions. The members of the RPTRC during the year were:

● Mr. A. M. A. Cader - Chairman● Mr. S. Gamage - Member● Mr. W. I. Arambage - Member

The proceedings of the Committee are reported to the Board of Directors who will in turn make the final determination based on the recommendations of the Committee.

Mr. A. M. A. Cader Chairman

Related Party Transactions Review Committee

1st July 2019


Independent Auditors' Report

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF STANDARD CAPITAL PLC

Report on the Financial Statements

We have audited the accompanying financial statements of Standard Capital PLC ("Company"), and the consolidated financial statements of the Company and its subsidiary ("Group"), which comprise the Statement of Financial Position as at March 31, 2017, Statement of Profit or Loss, Statement of Other Comprehensive Income, Statement of Changes in Equity and, Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board's Responsibility for the Financial Statements

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

Auditors Responsibility

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.

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 judgement, 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 internal control relevant to the entity's preparation of the 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 Board, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 March 2017, and of 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

As required by Section 163 (2) of the Companies Act No. 7 of 2007, we state the following:

a) The basis of opinion, scope and limitations of the audit are as stated above.

b) In our opinion:- We have obtained all the information and explanations

that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the Company,

- The financial statements of the Company give a true and fair view of its financial position as at March 31, 2017, and of its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards, and

- The financial statements of the Company, and the Group comply with the requirements of Sections 151 and 153 of the Companies Act No. 07 of 2007.

01 July 2019Colombo


Statement of Comprehensive Income Group CompanyFor the year ended 31st March, Note 2017 2016 2017 2016 Rs. Rs. Rs. Rs.

Revenue 20 212,166,519 170,061,748 349,734 791,556

Cost of Sales (180,401,345) (137,972,545) - -

Gross Profit 31,765,174 32,089,203 349,734 791,556

Other Income and Gains 21 10,079,038 1,818,782 37,299 1,335,431

Administrative Expenses (38,128,844) (25,460,951) (5,583,312) (6,113,533)

Selling and Distribution Expenses (60,401,890) (36,052,381) - -

Other Expenses 22 - (11,689,246) (79,301,011) (12,008,271)

Finance Income 24 717,790 3,253,866 14,224,228 14,159,235

Finance Cost 23 (13,752,273) (6,062,818) (301,459) (941,876)

Profit/ (Loss) Before Tax from Continuing Operations 26 (69,721,005) (42,103,545) (70,574,521) (2,777,458)

Income Tax (Expense)/ Reversal 27 1,019,323 (5,922,744) (3,854,615) (1,989,502)

Profit/ (Loss) for the year from Continuing Operations (68,701,682) (48,026,289) (74,429,136) (4,766,960)

Discontinued OperationsProfit/ (Loss) After Tax for the year from Discontinued Operations 25 (23,472,764) (16,531,966) - -Profit/ (Loss) for the year (92,174,446) (64,558,255) (74,429,136) (4,766,960)

Other Comprehensive Income

Other Comprehensive Income to be classified to Profit or Loss in subsequent years (net of tax)

Net Losses on Available for Sale - Reserve (35,695) (147,094) (35,695) (147,094)

Other Comprehensive Income not to be classified to Profit or Loss in subsequent years (net of tax)

Re-measurement Gain/(Loss) on Employee Defined Benefit Liabilities (258,691) 1,136,039 (17,952) 164,359Deferred Tax Attributable to re-measurement Gain on Employee Defined Benefit Liabilities (12,644) (55,763) - (46,021)Revaluation Gain/(Loss) on Property, Plant and Equipment - 76,107,391 - -Deferred Tax on Revaluation - (14,344,229) - -Derecognition of Revaluation surplus against Impairment Loss (18,837,082) - - -Deferred Tax attributable to Impairment Loss on Property, Plant and Equipment 140,828 - - -

Total Other Comprehensive Income for the Year (19,003,284) 62,696,344 (53,647) (28,756)Total Comprehensive Income for the Year (Net of Tax) (111,177,730) (1,861,911) (74,482,783) (4,795,716)

Profit/(Loss) attributable to:Equity Holders of the Parent Company (61,858,397) (27,005,199)Non Controlling Interest (30,316,049) (37,553,056) (92,174,446) (64,558,255)

Total Comprehensive Income Attributable to:Equity Holders of the Parent Company (74,212,827) 4,289,877Non Controlling Interest (36,964,903) (6,151,788) (111,177,730) (1,861,911)

Earnings/(Losses) Per Share - Basic 28 (11.16) (4.87) (13.43) (0.86)

Earnings/(Losses) per share for continuing operations - Basic 28 (8.62) (3.68) - -

The Accounting Policies and Notes on pages 19 through 47 form an integral part of the financial statements.


Statement of Financial Position Group CompanyAs at 31st March Note 2017 2016 2017 2016 Rs. Rs. Rs. Rs.

ASSETSNon-Current AssetsProperty, Plant and Equipment 4 72,141,783 126,117,855 791,589 1,084,189Investment Property 5 133,000,000 125,000,000 - -Leasehold Property 6 14,888,719 15,329,758 - -Intangible Assets 7 6,737,940 8,225,675 - -Investments in Subsidiary 8 - - 100,000,000 132,000,000Available-For-Sale Financial Assets 9 1,576,394 1,612,089 1,576,394 1,612,089Amounts Due from Related Parties 13 - - 191,398,810 173,913,547Deferred Tax Asset 27.3 - 1,265,806 - 1,265,806Total Non Current Assets 228,344,836 277,551,183 293,766,793 309,875,631

Current AssetsInventories 10 29,266,271 47,644,687 - -Trade and Other Receivables 11 94,026,666 121,870,649 1,235,687 1,264,390Fair Value Through Profit or Loss Financial Assets 12 2,519,500 3,734,426 2,519,500 3,734,426Amounts Due From Related Parties 13 705,000 - - 27,302,882Income Tax Receivable - 48,417 - -Bank Balances and Cash 14 10,926,007 65,113,163 567,537 54,744,164 137,443,444 238,411,342 4,322,724 87,045,862Assets Held for Sale 25 23,212,351 - - -Total Current Assets 160,655,795 238,411,342 4,322,724 87,045,862Total Assets 389,000,632 515,962,525 298,089,517 396,921,493

EQUITY AND LIABILITIESCapital and ReservesStated Capital 15 242,411,225 242,411,225 242,411,225 242,411,225Revaluation Reserve 40,930,843 53,065,302 - -Available for Sale - Reserve 376,394 412,089 376,394 412,089Retained Earnings (62,714,171) 41,957,211 49,165,354 123,612,442Total Equity Attributable to Equity Holders of Parent 221,004,291 337,845,827 291,952,973 366,435,756Non Controlling Interest (10,114,452) 2,221,743 - -Total Equity 210,889,840 340,067,570 291,952,973 366,435,756

Non-Current LiabilitiesInterest Bearing Loans and Borrowings 16 2,948,128 20,923,166 - -Deferred Tax Liability 27.3 - 5,669,623 - -Defined Benefit Liabilities 17 1,299,467 593,585 266,531 205,339Total Non Current Liabilities 4,247,595 27,186,374 266,531 205,339

Current LiabilitiesTrade and Other Payables 18 41,000,225 34,478,404 1,986,381 1,649,723Amounts Due to Related Parties 19 7,569,405 20,000 - -Income Tax Liabilities 3,884,681 1,335,562 3,883,633 1,294,824Interest Bearing Loans and Borrowings 16 93,759,993 112,874,615 - 27,335,851 146,214,304 148,708,581 5,870,014 30,280,398Liabilities towards Assets Held for Sale 25 27,648,893 - - -Total Current Liabilities 173,863,197 148,708,581 5,870,014 30,280,398Total Equity and Liabilities 389,000,632 515,962,525 298,089,517 396,921,493

These financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.

Finance Manager

The Board of Directors are responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the Board by,

Director Director

The Accounting Policies and Notes on pages 19 through 47 form an integral part of the financial statements.01 July 2019Colombo


Statement of Changes in EquityFor the year ended 31st MarchGroup Attributable to owners of the parent Stated Revaluation AFS Financial Retained Total Non Controlling Total Capital Reserve Asset Reserve Earnings Interest Rs. Rs. Rs. Rs. Rs. Rs. Rs. Balance as at 01st April 2015 242,411,225 22,219,934 559,183 68,365,608 333,555,950 8,373,531 341,929,481Profit/ (Loss) for the Year - - - (27,005,199) (27,005,199) (37,553,056) (64,558,255)Other Comprehensive Income - 30,845,368 (147,094) 596,802 31,295,076 31,401,268 62,696,344Total Comprehensive Income for the Year - 30,845,368 (147,094) (26,408,397) 4,289,877 (6,151,788) (1,861,911)

Balance as at 01st April 2016 242,411,225 53,065,302 412,089 41,957,211 337,845,827 2,221,743 340,067,570Profit/ (Loss) for the Year - - - (61,858,397) (61,858,397) (30,316,049) (92,174,446)Other Comprehensive Income - (12,134,459) (35,695) (184,277) (12,354,430) (6,648,854) (19,003,284)Total Comprehensive Income for the Year - (12,134,459) (35,695) (62,042,673) (74,212,827) (36,964,903) (111,177,730)

Transactions with Equity Owners, Recorded Directly in EquityAmount transferred due to the Change in Holding - - - (42,628,708) (42,628,708) 24,628,708 (18,000,000)Total Transactions with Equity Holders - - - (42,628,708) (42,628,708) 24,628,708 (18,000,000)Balance as at 31st March 2017 242,411,225 40,930,843 376,394 (62,714,171) 221,004,291 (10,114,452) 210,889,840

Company Stated Available for Retained Total Capital sale financial Earnings Asset Reserve Rs. Rs. Rs. Rs.

As at 01 April 2015 242,411,225 559,183 128,261,064 371,231,472Net Profit / (Loss) for the Year - - (4,766,960) (4,766,960)Other Comprehensive Income - (147,094) 118,338 (28,756)

As at 31st March 2016 242,411,225 412,089 123,612,442 366,435,756Net Profit / (Loss) for the Year - - (74,429,136) (74,429,136)Other Comprehensive Income - (35,695) (17,952) -As at 31st March 2017 242,411,225 376,394 49,165,354 291,952,973



Statement of Cash Flow Group CompanyFor the year ended 31st March Note 2017 2016 2017 2016 Rs. Rs. Rs. Rs.

Cash Flows From Operating ActivitiesProfit before Income Tax Expense from Continuing Operations (69,721,005) (42,103,545) (70,574,521) (2,777,458)Profit before Income Tax Expense from Discontinuing Operations 25 (24,002,689) (15,432,358) - -Profit before Income Tax Expense 27 (93,723,694) (57,535,903) (70,574,521) (2,777,458)

Adjustments for Gain on Disposal of Property Plant & Equipment 21 - (253,296) - - Loss of Disposal of Intangible Assets 22 - (8,271) - (8,271) Depreciation 4 20,727,259 15,212,191 292,600 292,600 Impairment Loss on Property Plant and Equipment 4 6,664,290 - - - Amortisation of Lease Hold Property 6 441,039 437,549 - - Amortisation of Intangible Assets 7 1,487,735 1,599,657 - 4,375 Interest Expense 23 15,747,499 9,198,857 301,459 941,876 Interest Income 24 717,790 (3,372,458) (14,224,228) (14,159,235) Provision for Impairment of Investment in Subsidiary 22 - - 50,000,000 12,000,000 Provision for Inventory 10 5,352,110 (416,731) - - Provision for Retirement Benefits 17 467,488 145,373 43,240 9,698 Provision for Trade Debtors 11.1 (828,747) 11,680,975 - - Impairment of amounts due from Related Parties 22 - - 29,301,011 - Net Change in Fair Value of Investment Properties 21 (8,000,000) - - - Changes in Fair Value of Fair Value through Profit or Loss Financial Assets 12 117,881 (1,335,431) 117,881 (1,335,431)Operating Profit/(Loss) before Working Capital Changes (50,829,350) (24,647,488) (4,742,558) (5,031,846)

(Increase) / Decrease in Trade and Other Receivables 25,500,814 (2,628,762) 28,703 (329,556) (Increase) / Decrease in Inventory 10,695,981 (11,012,825) - - (Increase) / Decrease in Amounts due from Related Parties (705,000) (1,151,475) (19,483,392) (35,750,385) Increase / (Decrease) in Amounts due to Related Parties 7,914,740 - - - Increase / (Decrease) in Trade and Other Payables 11,716,031 (4,057,504) 336,659 324,746Cash Generated from Operations 4,293,216 (43,498,054) (23,860,588) (40,787,041)

Finance Costs Paid 23 (15,747,499) (7,798,857) (301,459) (941,876) Defined Benefit Obligations Paid 17 - (55,999) - - Income Tax Paid (89,159) (923,026) - (816,356)Net Cash Flows From Operating Activities (11,543,441) (52,275,936) (24,162,047) (42,545,273)

Cash Flows From Investing Activities

Proceeds from Sale of Property, Plant and Equipment 4,273,372 4,319,256 - - Acquisition of Property, Plant and Equipment 4 (9,027,788) (8,654,648) - - Proceeds from Sale of Intangible Assets 7 - 19,221 - - Acquisition of Intangible Assets 7 - (414,748) - - Acquisition of additional shares in Subsidiaries 8 - - (18,000,000) - Interest Received 24 (717,790) 3,372,458 14,224,228 14,159,235 Net Changes in Group (18,000,000) - - - Net Movement in Investment in Equity Shares 12.1 1,097,045 3,361,455 1,097,045 3,361,455Net Cash Flows from Investing Activities (22,375,161) 2,002,994 (2,678,727) 17,520,690

Cash Flows from Financing Activities

Capital Repayments under Finance Lease Liabilities 16.1.1 (5,960,460) (6,120,865) - - Import Loans obtained /(Repayment Made) during the Year 16.1.2 7,260,159 14,117,529 - - Term Loans obtained /(Repayment Made) during the Year 2,900,339 - - -Net Cash Flows from/(Used in) Financing Activities 4,200,038 7,996,664 - -

Net Increase/(Decrease) in Cash and Cash Equivalents (29,718,564) (42,276,278) (26,840,774) (25,024,583)

Cash and Cash Equivalents at the beginning of the year 14 2,104,669 44,380,947 27,408,313 52,432,896Cash and Cash Equivalents at the end of the year 14 (27,613,895) 2,104,669 567,539 27,408,313



Notes to the Financial Statements 1. CORPORATE INFORMATION

1.1 General

Standard Capital PLC ("Company") is a limited liability company incorporated and domiciled in Sri Lanka. The registered office and the principal place of business are situated at 1st floor, No 187, Ward Place, Colombo 07.

The financial statements comprise "the Company" referring to Standard Capital PLC as the holding company and "the Group" referring to the companies that have been consolidated therein.

All financial information in the financial statements in Sri Lankan Rupees unless otherwise stated

1.2 Principal Activities and Nature of Operations

During the period, Standard Capital PLC has acted as the Holding company for the subsidiaries of Standard Industrial Solutions Private Limited and Standard Paints Limited. The company throughout the period has been the funds supplier to the subsidiaries for carrying out their day to day operations.

1.3 Authorization of Financial Statements

The consolidated financial statements of the Group for the period ended 31 March 2017 were authorized for issue in accordance with a resolution of the Board of Directors on 01 July 2019.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation and Statement of Compliance

The financial statements of the Group comprise the statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows together with accounting policies and notes.

These financial statements are prepared in accordance with Sri Lanka Accounting Standards (LKAS) and Sri Lanka Financial Reporting Standards (SLFRS)

These financial statements have been prepared on the historical cost basis and presented in Sri Lanka Rupees (LKR), which is the Group's functional and presentation currency. These financial statements are prepared as at and for the period ended 31 March 2017.

2.2 Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiary as at the reporting date. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.Specifically, the Group controls an investee if and only if the Group has:

● Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

● Exposure, or rights, to variable returns from its involvement with the investee, and

● The ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

● The contractual arrangement with the other vote holders of the investee

● Rights arising from other contractual arrangements● The Group's voting rights and potential voting

rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the special purpose interim consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the non-controlling interest, even if this results in the non-controlling interest having a deficit balance. The financial statements of the subsidiary is prepared for the same reporting period as the parent company. All intra-group assets, liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated full on consolidation.

If the Group losses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recongnised in the consolidated statement of profit or loss.

The total profits and losses for the period of the Company and of its subsidiary included in consolidation are shown in the consolidated statement of profit or loss and consolidated statement of other comprehensive income and all assets and liabilities of the Company and of its subsidiary included in consolidation are shown in the consolidated statement of financial position.


Notes to the Financial Statements Contd... Non-controlling interest which represents the portion of profit or loss and net assets not held by the Group, are shown as a component of profit or loss for the period in the consolidated statement of profit or loss and consolidated statement of other comprehensive income and as a component of equity in the consolidated statement of financial position, separately from equity attributable to the shareholders of the parent.

The financial statements of the subsidiary is prepared for the same reporting period as the holding company. The accounting policies set out below have been applied consistently by the Group entities to all periods presented in these special purpose interim financial statements.

2.3 Current versus Non-Current Classification

The Group presents assets and liabilities based on current/non-current classification. An asset is classified as current when it is:

● Expected to be realised or intended to be sold or consumed in normal operating cycle

● Held primarily for the purpose of trading● Expected to be realised within twelve months after

the reporting period, or● Cash or cash equivalent unless restricted from being

exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

● It is expected to be settled in normal operating cycle● It is held primarily for the purpose of trading● It is due to be settled within twelve months after the

reporting period, or● There is no unconditional right to defer the

settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

2.4 Foreign Currency

2.4.1 Foreign Currency Transactions and Balances

The financial statements of the Group are presented in Sri Lankan Rupees. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date. All differences are taken to the statement of profit or loss. Non-monetary items that are measured in terms of historical cost in foreign currency are translated using the exchange rates as at the dates of the initial transactions.

2.4.2 Foreign Operations

Assets and liabilities of foreign operations are translated into the functional currency at the rate prevailing on the reporting date and the statement of profit or loss and statement of other comprehensive income are translated using average exchange rates during the period.

The exchange differences, on consolidation, are recognised in consolidated statement of other comprehensive income. Upon disposal of a foreign operation, it is recycled to consolidated statement of profit or loss.

2.5 Comparative Figures

Certain comparatives figures have been reclassified in order to conform to the presentation for the current period. Such reclassifications were made to improve the quality of presentation and do not affect previously reported profit or equity.

2.6 Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation. Capital work-in-progress is stated at cost. When the asset is ready for its intended use, it is transferred from capital work-in-progress to the appropriate category under property, plant and equipment and depreciated in accordance with the Group's policies.

Subsequent costs are included in the assets carrying amount or recognised as separate assets, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Group and the cost can be reliably measured. Other costs are charged to the statement of profit or loss during the period in which they are incurred.

Property, plant and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives of the Group's assets for the calculation of depreciation are as follows:

Buildings 20 YearsComputers and Others 4 yearsHandling equipment 5 yearsOffice equipment 5 yearsFurniture and fittings 5 yearsMotor vehicles 5 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount being the higher of their fair value less costs to sell and their value in use.


Notes to the Financial Statements Contd... An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of profit or loss in the period the item is derecognised.

The assets residual value, useful lives and methods of depreciation of property, plant and equipment are reviewed at each reporting period end, and adjusted prospectively, if appropriate.

2.7 Intangible Assets

Computer software acquired separately are measured on initial recognition at cost. Following initial recognition, computer software are carried at cost less accumulated amortization.

Computer software is amortized over the useful economic life and assessed for impairment whenever there is an indication that the computer software may be impaired. The useful economic life of the computer software for the current and comparative periods are 4 years. The amortization period and for the amortization method are reviewed at each reporting period end, and adjusted prospectively, if appropriate.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.

2.8 Inventories

Inventories are valued at the lower of purchase cost and net realizable value. Costs are those expenses incurred in bringing each product to its present location and condition and are accounted for first-in first-out (FIFO) basis.

Provision for inventory obsolescence is estimated on a systematic basis and deducted from the gross carrying value of the inventory.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of selling expenses.

2.9 Impairment of Non-Financial Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash generating

unit's ("CGU") fair value less costs to sell and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior periods. Such reversal is recognised in the statement of profit or loss.

Goodwill is tested for impairment at each reporting date and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

2.10 Financial Instruments - Initial Recognition and Subsequent Measurement

2.10.1 Financial Assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through


Notes to the Financial Statements Contd...profit or loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. The Group's financial assets comprise of bank balances and cash, trade receivables, other receivables and amounts due from related parties.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as described below:

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss.

Trade and Other Receivables

Trade and other receivables are stated at original invoice amount less allowance for impairment. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off when there is no possibility of recovery.

Cash and Cash Equivalents

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash in hand and bank balances.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

● The rights to receive cash flows from the asset have expired or

● The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment of financial assets

The Group assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

2.10.2 Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recongnision, as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group’s financial liabilities include trade payables, other payables, amounts due to related parties and interest bearing loans and borrowings.

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as described below:


Notes to the Financial Statements Contd... Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.

Trade and Other Payables

Trade and other payables are recognised for amounts to be paid in the future for goods, assets or services received, whether billed by the supplier or not.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.11 Employee Benefits

2.11.1 Employee Defined Benefit Plan – Gratuity

The liability recognised in the statement of financial position is the present value of the defined benefit obligation at the reporting date using the projected unit credit method based on the formula prescribed in Sri Lanka Accounting Standards 19 - “Employee Benefits”. Any actuarial gains or losses arising are recognized immediately in the statement of other comprehensive income. The companies are liable to pay gratuity in terms of the relevant statute. The gratuity liability is not externally funded.

2.11.2 Employee Contribution Plan – EPF and ETF

Employees are eligible for Employees’ Provident Fund contributions and Employees’ Trust Fund contributions in line with respective statutes and regulations. The companies contribute the defined percentages of gross emoluments of employees to the Employees’ Provident Fund and to the Employees’ Trust Fund respectively, which are externally funded.

2.12 Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.

2.13 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and sales taxes. The specific recognition criteria described below must also be met before revenue is recognised.

Sale of Goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the amount of revenue can be measured reliably.

Gains and Losses

Net gains and losses of a revenue nature arising from the disposal of property, plant and equipment and other noncurrent assets, including investments in subsidiaries, are accounted in the statement of profit or loss, after deducting the carrying amount from proceeds on disposal of such assets and the related selling expenses.

Gains and losses arising from activities incidental to the main revenue generating activities and those arising from a group of similar transactions, which are not material are aggregated, reported and presented on a net basis.

Interest income

Interest income is recorded as it accrues using the effective interest method.

Dividend income

Dividend income is recognised when the Company’s right to receive the payments is established.

Others

Other income is recognized on an accrual basis.


Notes to the Financial Statements Contd...2.14 Expenses

Expenses are recognised in the statement of profit or loss on the basis of a direct association between the cost incurred and the earning of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant and equipment in a state of efficiency has been charged to the statement of profit or loss.

For the purpose of presentation of the statement of profit or loss, the “function of expenses” method has been adopted, on the basis that it presents fairly the elements of the Company’s and Group’s performance.

Finance Costs

Finance costs comprise interest expense on bank loans and bank overdrafts. Interest expense is recorded as it accrues using the effective interest method.

Operating Leases

Operating lease payments are charged to the statement of profit or loss on a straight-line basis over the period of the lease.

Others

Other expenses are recognized on an accrual basis.

2.15 Taxes

Current Income Tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recongnised for all taxable temporary differences except where the differed tax liability arising from the initial recognition of goodwill.

Deferred tax assets are recognised for all deductible temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each

reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the statement of profit or loss is recognised outside the statement of profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in statement of profit or loss or statement of other comprehensive income.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity.

Sales Tax

Sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

The estimates and underlying assumptions are reviewed regularly. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period or in the period of the revision and future periods, if the revision affects both current and future.

Impairment of trade receivables

An estimate of the collectible amount of trade receivables is made when collection of the full amount is no longer probable. For individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually significant, but which are past due, are assessed collectively and a


Notes to the Financial Statements Contd...provision applied according to the length of time past due, based on historical recovery rates.

At the end of reporting date, no allowance for impairment of trade receivables was made.

Impairment of inventories

Inventories are held at the lower of cost and net realisable value. When inventories become old or obsolete, an estimate is made of their net realisable value. For individually significant amounts this estimation is performed on an individual basis. Amounts which are not individually significant, but which are old or obsolete, are assessed collectively and a provision applied according to the inventory type and the degree of ageing or obsolescence, based on historical selling prices.

At the end of reporting date, no provision for obsolete and slow moving inventories were made.

Useful lives of property, plant and equipment

The management determines the estimated useful lives of its property, plant and equipment for calculating depreciation. This estimate is determined after considering the expected usage of the asset or physical wear and tear. Management reviews the residual value and useful lives annually and future depreciation charge would be adjusted where the management believes the useful lives differ from previous estimates.

Employee Defined Benefit Plan – Gratuity

The employee benefit liability of the Group is based on the projected unit credit method based on the formula prescribed in Sri Lanka Accounting Standards 19 - “Employee Benefits”. The projected unit credit method based on the formula involves making assumptions about discount rates and future salary increases. The complexity of the valuation, the underlying assumptions and its long term nature, the defined benefit obligation is highly sensitive to changes in these assumptions. Management reviews all assumptions at each reporting date and revised assumptions where appropriate.

Going concern

The management has made an assessment of the Group’s ability to continue as a going concern and is satisfied that the Group has the resources to continue in business for the foreseeable future. Furthermore, the management is not aware of any material uncertainties that may cast significant doubt upon the Group’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on a going concern basis.


Notes to the Financial Statements Contd...

4.

PRO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T

M

otor

veh

icle

s

4.1

Gro

up

Build

ing

Com

pute

rs

Plan

t Le

ase

Non

Lea

se

Fact

ory

Offi

ce

Furn

iture

Ca

pita

l WIP

To

tal

&

Oth

ers

& M

achi

nery

Eq

uipm

ent

Equi

pmen

t &

Fitt

ings

Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

. Rs

.

Cost

Ba

lanc

e as

at 1

Apr

il 20

16

59,6

85,5

00

4,45

1,36

8 38

,143

,618

25

,734

,000

8,

196,

875

2,59

6,48

2 1,

343,

321

6,90

8,97

5 1,

028,

285

148,

088,

424

Ad

ditio

ns

1,27

9,14

5 19

0,80

0 1,

440,

904

4,49

0,00

0 4,

386,

300

2,30

8,10

0 45

,000

1,

045,

800

- 15

,186

,049

Re

valu

atio

n/ Im

pairm

ent

(17,

611,

195)

-

(6,7

84,5

22)

- -

- -

- -

(24,

395,

717)

Tr

ansf

ers/

Disp

osed

-

- (3

,050

,000

) 7,

930,

000

(8,1

16,3

00)

(2,1

59,8

76)

(22,

950)

(1

,593

,081

) (1

,028

,285

) (8

,040

,492

)

Tran

sfer

to A

sset

s hel

d fo

r Sal

e -

(1,3

03,2

45)

(10,

000,

000)

(1

0,63

0,00

0)

(110

,000

) -

(118

,726

) (2

1,16

5)

- (2

2,18

3,13

6)

Bala

nce

as a

t 31

Mar

ch 2

017

43,3

53,4

50

3,33

8,92

3 19

,750

,000

27

,524

,000

4,

356,

875

2,74

4,70

6 1,

246,

645

6,34

0,52

9 -

108,

655,

128

D

epre

ciat

ion

Ba

lanc

e as

at 1

Apr

il 20

16

- 2,

987,

940

- 11

,342

,192

2,

015,

856

1,03

4,26

1 57

4,80

9 4,

015,

511

- 21

,970

,569

D

epre

ciat

ion

for t

he p

erio

d 2,

727,

155

679,

894

8,98

4,52

9 5,

741,

638

69,2

10

782,

151

173,

381

1,56

9,30

1 -

20,7

27,2

59

Reva

luat

ion/

Impa

irmen

t (2

,726

,698

) -

818,

567

2,77

5,85

9 -

237,

927

- -

- 1,

105,

655

Tr

ansf

ers/

Disp

osed

(4

57)

(45,

201)

(5

3,09

6)

1,93

4,02

3 (1

,955

,358

) (1

,309

,633

) (1

,689

) (1

,307

,424

) -

(2,7

38,8

35)

Tr

ansf

er to

Ass

ets h

eld

for S

ale

- (7

12,7

56)

- (3

,778

,523

) (1

6,50

0)

- (3

5,09

9)

(8,4

26)

- (4

,551

,304

)

Bala

nce

as a

t 31

Mar

ch 2

017

- 2,

909,

877

9,75

0,00

0 18

,015

,189

11

3,20

8 74

4,70

6 71

1,40

2 4,

268,

962

- 36

,513

,345

N

et c

arry

ing

amou

nts

Ba

lanc

e as

at 1

Apr

il 20

16

59,6

85,5

00

1,46

3,42

8 38

,143

,618

14

,391

,808

6,

181,

019

1,56

2,22

1 76

8,51

2 2,

893,

464

1,02

8,28

5 12

6,11

7,85

5

Bala

nce

as a

t 31

Mar

ch 2

017

43,3

53,4

50

429,

046

10,0

00,0

00

9,50

8,81

1 4,

243,

667

2,00

0,00

0 53

5,24

3 2,

071,

567

- 72

,141

,783

4.1.

1 D

urin

g th

e fin

anci

al p

erio

d, th

e Gr

oup

acqu

ired

prop

erty

, pla

nt a

nd e

quip

men

t to

the

aggr

egat

e va

lue

of R

s. 14

,157

,764

(201

6: R

s. 15

,726

,115

). Ca

sh p

aym

ents

am

ount

ing

to R

s. 9,

667,

764/

- (2

016

- Rs.

8,65

4,64

8/-)

wer

e m

ade

durin

g th

e pe

riod

for p

urch

ase

of p

rope

rty, p

lant

and

equ

ipm

ent.

4.1.

2 Pr

oper

ty, p

lant

and

equ

ipm

ent i

nclu

des f

ully

dep

reci

ated

ass

ets h

avin

g gr

oss c

arry

ing

amou

nts o

f Rs.

3,94

1,14

1 (2

016

- Rs.

1,52

5,95

0) a

nd c

ontin

ue to

be

in u

se b

y th

e Gr

oup.

4.1.

3 D

urin

g th

e fin

anci

al y

ear,

The

grou

p ha

s rec

ogni

zed

an im

pairm

ent l

oss o

f Rs.

6,66

4,28

0/- r

epre

sent

s writ

e do

wn

of c

erta

in p

rope

rty, p

lant

and

equ

ipm

ent w

hich

was

show

n in

the

stat

emen

t of

profi

t and

loss

und

er a

dmin

istra

tive

expe

nse.



4.

PRO

PERT

Y, P

LAN

T A

ND

EQ

UIP

MEN

T (C

ontd

...)

4.2

Com

pany

Co

mpu

ters

O

ffice

Fu

rnitu

re

Tota

l

&

Oth

ers

Equi

pmen

t &

Fitt

ings

Rs.

Rs.

Rs.

Rs.

Co

st

Bala

nce

as a

t 1 A

pril

2016

57

,250

2,

959

1,38

9,73

0 1,

449,

939

Ad

ditio

ns

- -

- -

Tr

ansf

ers/

Disp

osed

-

- -

-

Bala

nce

as a

t 31

Mar

ch 2

017

57,2

50

2,95

9 1,

389,

730

1,44

9,93

9

Dep

reci

atio

n

Bala

nce

as a

t 1 A

pril

2016

17

,795

52

1 34

7,43

4 36

5,75

0

Dep

reci

atio

n fo

r the

per

iod

14,3

13

341

277,

946

292,

600

Tr

ansf

ers/

Disp

osed

-

- -

-

Bala

nce

as a

t 31

Mar

ch 2

017

32,1

08

862

625,

380

658,

350

N

et c

arry

ing

amou

nts

Ba

lanc

e as

at 1

Apr

il 20

16

39,4

55

2,43

8 1,

042,

296

1,08

4,18

9

Bala

nce

as a

t 31

Mar

ch 2

017

25,1

42

2,09

7 76

4,35

0 79

1,58

9

4.2.

1 D

urin

g th

e fin

anci

al y

ear,

the

Com

pany

has

not

acq

uire

d pr

oper

ty, p

lant

and

equ

ipm

ent.

(201

6 - n

il)

4.2.

2 Pr

oper

ty, p

lant

and

equ

ipm

ent o

f the

Com

pany

doe

s not

incl

ude

any

fully

dep

reci

ated

ass

ets a

s at t

he re

porti

ng d

ate.

4.3

The

follo

win

g pr

oper

ties a

re fa

ir va

lued

and

reco

rded

und

er fr

eeho

ld la

nd a

nd b

uild

ings

. Fai

r val

ue m

easu

rem

ent d

isclo

sure

for r

eval

ued

land

and

bui

ldin

gs b

ased

on

un-o

bser

vabl

e in

puts

as f

ollo

ws:

Co

mpa

ny

Loca

tion

Exte

nt

Inde

pend

ent V

alue

r Ef

fect

ive

Date

of

Sign

ifica

nt u

nobs

erva

ble

Rang

e Fa

ir va

lue

Valu

atio

n in

put (

Leve

l 3)

mea

sure

men

t

Rs

. St

anda

rd

No 4

5, Fu

llerto

n In

dustr

ial Es

tate

, 9,1

37 S

quar

e Fe

et

R.W

.M.S.

B. R

ajapa

kse

31-M

ar-1

7 bu

ildin

g va

lue

per s

quar

e fe

et

Rs. 1

,000

- Rs.

4,000

24

,600,0

00

Pain

ts Na

goda

, Kalu

thar

a, Sr

i Lan

ka

Limite

d

7,358

Squ

are

Feet

R.

W.M

.S.B.

Raja

paks

e 31

-Mar

-17

build

ing

valu

e pe

r squ

are

feet

Rs

. 1,50

0 - R

s. 2,5

00

18,75

0,000

79

4/2,

3rd

Lane

, Gall

e Ro

ad,

83.16

per

ches

Sir

i Niss

anka

31

-Mar

-17

land

price

per

per

ch

Rs. 8

00,00

0 66

,500,0

00

M

ollig

oda,

Wad

duwa

794/

2, 3r

d La

ne, G

alle

Road

, 16

,831

Squa

re Fe

et

Siri N

issan

ka

31-M

ar-1

7 bu

ildin

g va

lue

per s

quar

e fe

et

Rs. 3

,750

- Rs.

5,250

66

,500,0

00

M

ollig

oda,

Wad

duwa

4.3.

1 Pl

ant a

nd M

achi

nery

of S

tand

ard

Pain

ts L

imite

d w

ere

reva

lued

by

Mr.

Siri

Niss

anka

as a

t 31s

t Mar

ch 2

017.

4.3.

2 Pl

ant a

nd M

achi

nery

of S

tand

ard

Indu

stria

l Sol

utio

ns (P

rivat

e) L

imite

d w

ere

reva

lued

by

Mr.

K.C.

B. C

onde

gam

a as

at 3

1 M

arch

201

7.

4.3.

3 Th

e su

rplu

s aris

ing

from

the

reva

luat

ion

net o

f def

erre

d ta

x is

reco

gnize

d in

the

Oth

er C

ompr

ehen

sive

Inco

me

and

trans

ferre

d to

Rev

alua

tion

Rese

rve

in E

quity

.

4.3.

4 Si

gnifi

cant

incr

ease

s (de

crea

ses)

in e

stim

ated

pric

e pe

r per

ch/ b

uild

ing

valu

e pe

r squ

are

feet

in is

olat

ion

wou

ld re

sult

in a

sign

jifica

ntly

hig

her (

low

er) f

air v

alue

.


Notes to the Financial Statements Contd...5. INVESTMENT PROPERTY Group Balance as at Gain on Change Balance as at 01.04.2016 in Fair Value 31.03.2017 Rs. Rs. Rs. Land 62,300,000 4,200,000 66,500,000 Building 62,700,000 3,800,000 66,500,000 125,000,000 8,000,000 133,000,000

5.1 The fair value of land and buildings as at 31 March 2017 have been arrived at on the basis of valuation carried out by Mr. Siri Nisanka, independent external valuer. The fair values are based on market values, being the estimated amounts for which a land and building could be exchanged on the date of valuation between a willing buyer and a willing seller in a commercial transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value hierarchy of the land and buildings are under Level 3 Category. Details of land and buildings stated in Note 4.

6. LEASEHOLD PROPERTY Group

2017 2016 Rs. Rs. Balance as at 1 April 2016 15,329,758 15,767,307 Amortisation Charged for the period (441,039) (437,549) Balance as at 31 March 2017 14,888,719 15,329,758

6.1 Standard Paints Limited had entered into lease agreement for lease of two land areas (extent of land is OA-2R-00.00P Lot 562 and OA-3R-23.00P Lot Y) situated at No.45, Fullerton Industrial Estate, Nagoda, Kaluthara. Sri Lanka.

The lease periods are 44 years and 35 years respectively and that land is amortised over the lease period. Remaining lease period as at reporting date was 40 years and 33 years respectively.

7. INTANGIBLE ASSETS Group Trade Mark Computer Total software Rs. Rs. Rs. Cost Balance as at 1 April 2016 13,000,000 1,248,748 14,248,748 Additions - - - Write-off - - - Balance as at 31 March 2017 13,000,000 1,248,748 14,248,748 Amortization Balance as at 1 April 2016 5,200,000 823,073 6,023,073 Charge for the period 1,300,000 187,735 1,487,735 Write-off - - - Balance as at 31 March 2017 6,500,000 1,010,808 7,510,808 Net book value as at 31 March 2016 7,800,000 425,675 8,225,675 Net book value as at 31 March 2017 6,500,000 237,940 6,737,940


Notes to the Financial Statements Contd...8. INVESTMENT IN SUBSIDIARY 2017 2016 2017 2016 Holding % Holding % Rs. Rs. Standard Paints Limited 65% 50% 165,000,000 150,000,000 Standard Industrial Solutions (Private) Limited 60% 40% 7,000,000 4,000,000 172,000,000 154,000,000 Less: Provision for Impairment of Investment (72,000,000) (22,000,000) 100,000,000 132,000,000

8.1 Standard Paints Limited (“Company”) is a limited liability Company, incorporated and domiciled in Sri Lanka. The registered office and principal place of business is located at 1st floor, No 187, Ward Place, Colombo 07. The factory premises of the company is situated at No 45, Fullerton Industrial Estate, Nagoda and Kaluthara. During the period, the principle activity of the subsidiary was Manufacturing and distribution of paints and allied products.

8.2 Standard Industrial Solutions (Private) Limited (“Company”) is a limited liability Company, incorporated and domiciled in Sri Lanka. The registered office and principal place of business is located at 1st floor, No 187, Ward Place, Colombo 07. The factory premises of the Company is situated at Molligoda, Wadduwa. During the year, principal activities of the Company were distribution of industrial raw materials and chemicals to the local market and manufacturing and distribution of wood pallets and supplying of saw dust to the customer under a supply agreement.

8.3 Additional Investment in Subsidiary

8.3.1 On 16th June 2016 (the “Acquisition Date”), the Group acquired another 15% ownership of Standard Paints Limited (the “Partly Owned Subsidiary”) for consideration of Rs. 15,000,000.

8.3.2 On 16th June 2016 (the “Acquisition Date”), the Group acquired another 20% ownership of Standard Industrial Solutions Private Limited (the “Partly Owned Subsidiary”) for consideration of Rs. 3,000,000.

8.4 Shares Portfolio 20178.4.1 Standard Paints Limited Ordinary Preference Shares Shares Total No of Shares 6,500,000 10,000,000 16,500,000 Value 65,000,000 100,000,000 165,000,000 2016 Ordinary Preference Shares Shares Total No of Shares 5,000,000 10,000,000 15,000,000 Value 50,000,000 100,000,000 150,000,000

8.4.1.1 This represents the 8% cumulative preference shares issued by Standard Paints Limited, subsidiary of the company, which will be redeemed at the option of standard Paints Limited after the period commencing from 01 April 2017. The dividend on cumulative preference shares shall be paid subject to satisfying solvency test as required by the Act. Accordingly no accrual has been made for the said dividend amounting to Rs. 8,000,000 for the year ended 31 March 2017 (2016 - Rs. 8 Mn ) in the company's financial Statements.

20178.4.2 Standard Industrial Solutions Private Limited Ordinary Shares Total No of Shares 750,000 750,000 Value 7,000,000 7,000,000 2016 Ordinary Shares Total No of Shares 500,000 500,000 Value 4,000,000 5,000,000


Notes to the Financial Statements Contd...8. INVESTMENT IN SUBSIDIARY (Contd...)

8.5 An impairment assessment on investments in Standard Paints Limited and Standard Industrial Solutions (private) Limited were carried out by the Board of Directors as the carrying value of the investment exceeds the net assets attributable of the subsidiary as at 31 March 2017.

Based on that assessment, a provision of Rs. 43 Mn (2016 - 10 Mn) was made during the year against the investment in Standard Paints Limited. The Board is confident that a provision of Rs. 43 Mn is adequate against the investment in the said Subsidiary.

In addition, a provision of Rs. 7 Mn (2016 - Rs. 2 Mn) was made during the year against the investment in Standard Industrial Solutions (private) Limited. The Board is confident that a provision of a Rs. 7 Mn is adequate against the investment in the said subsidiary.

8.6 Material Partly - Owned Subsidiaries Financial information of subsidiaries that have material non-controlling interests is provided below: Proportion of Equity Interest held by Non controlling Interest 2017 2016 Company Name Standard Paints Limited 65% 50% Standard Industrial Solutions (Private) Limited 60% 40% Although the company had 40% shareholding in Standard Industrial Solutions (Private) Limited, the board of directors of the

company has determined that the company controls Standard Industrial Solutions (Private) Limited, considering the voting rights and board composition of the said company. All three board of directors of Standard Industrial Solutions (Private) Limited are also board of directors of the company and there is no indication that the other shareholders would exercise their votes collectively.

Accumulated Balances of Material Non - Controlling Interest 2017 2016 Rs. Rs. Company Name Standard Paints Limited (3,326,502) 5,786,724 Standard Industrial Solutions (Private) Limited (12,577,249) (3,564,984) Total Comprehensive Income allocated to Material Non - Controlling Interest 2017 2016 Rs. Rs. Company Name Standard Paints Limited (27,443,951) 3,535,082 Standard Industrial Solutions (Private) Limited (9,520,952) (9,686,870


Notes to the Financial Statements Contd...8. INVESTMENT IN SUBSIDIARY (Contd...)

8.6 Material Partly - Owned Subsidiaries (Contd...) Standard Standard Industrial Paints Solutions Limited (Pvt) Ltd Rs. Rs. Summarised Statement of Total Comprehensive Income for year ended 31 March 2017:

Revenue 211,816,785 14,725,989 Cost of sales (180,401,345) (25,691,028) Loss for the year (59,791,268) (23,472,764) Total Comprehensive Income for the Year (78,411,289) (23,802,380) Attributable to Non-controlling Interests (27,443,951) (9,520,952) Summarised Statement of Total Comprehensive Income for year ended 31 March 2016:

Revenue 171,856,951 45,607,747 Cost of sales (14,319,047) (46,772,206) Profit for the year (55,267,755) (16,531,966) Total Comprehensive Income for the Year 7,070,163 (16,144,784) Attributable to Non-controlling Interests 3,535,082 (9,686,870)

Summarised Statement of Financial Position as at 31 March 2017:

Current Assets 133,735,925 5,580,519 Non-Current Assets 225,976,854 17,631,832 Current Liabilities 331,743,100 25,844,965 Non-Current Liabilities 3,981,064 2,410,808 Total equity 23,988,615 (5,043,422) Attributable to: Equity holders of parent 27,315,117 7,533,827 Non-controlling Interest (3,326,502) (12,577,249) Summarised Statement of Financial Position as at 31 March 2016:

Current Assets 157,624,851 22,108,958 Non-Current Assets 250,309,131 23,279,968 Current Liabilities 114,598,303 32,198,218 Non-Current Liabilities 181,762,232 19,132,348 Total equity 111,573,447 (5,941,640) Attributable to: Equity holders of parent 5,786,724 (2,376,656) Non-controlling Interest 5,786,724 (3,564,984)


Notes to the Financial Statements Contd...9. AVAILABLE FOR SALES FINANCIAL ASSETS

9.1 Group/Company 2017 2016 No of Cost Fair Value No of Cost Fair Value Shares Rs. Rs. Shares Rs. Rs. Investment in Equity 100,000 1,200,000 1,576,394 100,000 1,200,000 1,612,089 Investment Lanka Limited 100,000 1,200,000 1,576,394 100,000 1,200,000 1,612,089 2017 2016 Rs. Rs.

9.2 Carrying Value as at 01 April 2016 1,612,089 1,759,183 Fair Value Adjustment (35,695) (147,094) Carrying Value as at 31 March 2017 1,576,394 1,612,089 * Fair value determined based on adjusted Net Asset Value.

10. INVENTORIES Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Raw Materials 24,788,879 26,686,967 - - Finished Goods 7,514,715 22,300,684 - - Work In Progress 401,903 467,530 - - 32,705,497 49,455,181 - - Less: Provision For Impairment (3,439,226) (1,810,494) - - 29,266,271 47,644,687 - -

11. TRADE AND OTHER RECEIVABLES Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Trade Debtors (Note 11.1) 87,833,181 111,380,002 - - Prepayments and Deposits 4,401,325 3,689,132 634,860 756,360 Advances to Suppliers 15,000 2,968,191 15,000 - Other Receivable 1,777,160 3,833,324 585,827 508,030 94,026,666 121,870,649 1,235,687 1,264,390

11.1 Trade Debtors Group 2017 2016 Rs. Rs. Trade Debtors 115,519,221 140,164,670 Less: Provision For Impairment (27,686,040) (28,784,668) 87,833,181 111,380,002

11.2 Unimpaired trade receivables are expected, on the basis of past experience, to be fully recoverable. No collateral is obtained over trade receivables.


Notes to the Financial Statements Contd...12. FAIR VALUE THROUGH PROFIT OR LOSS FINANCIAL ASSETS Group/Company No of Shares 2017 2016 2017 2016 Carrying Fair Carrying Fair Value value Value value Rs. Rs. Rs. Rs. CIC Holdings PLC 10,000 10,000 576,045 624,000 576,045 715,000 Sri Lanka Telecom PLC 10,000 10,000 350,000 333,000 350,000 388,000 Central Industries PLC - 11,389 - - 1,097,045 977,176 Hayleys PLC 2,500 2,500 677,500 662,500 677,500 614,250 Renuka Foods PLC 50,000 50,000 1,225,000 900,000 1,225,000 1,040,000 2,828,545 2,519,500 3,925,590 3,734,426 Group/Company12.1 Movement in Fair Value through Profit and Loss Financial Assets 2017 2016 Rs. Rs. Balance as at 1 April 2016 3,734,426 5,760,450 Purchased during the Year - 3,349,545 Disposed during the Year (1,097,045) (6,711,000) Change in Value of Quoted Equity Securities (117,881) 1,335,431 Balance as at 31 March 2017 2,519,500 3,734,426

13. AMOUNTS DUE FROM RELATED PARTIES Relationship Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Non- Current Standard Paints Limited Subsidiary - - 191,398,810 173,913,547 - - 191,398,810 173,913,547 Current Standard Industrial Solutions (Private) Limited Subsidiary - - - 27,302,882 Standard Logistics (Private) Limited Affiliate 705,000 - - - 705,000 - - 27,302,882 Transactions with related parties are disclosed in Note 28.

14. CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the statement of cash flows include the following statement of financial position

amounts: Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Cash in hand 379,417 55,440 5,646 8,988 Cash at bank 10,546,590 65,057,723 561,891 54,735,176 10,926,007 65,113,163 567,537 54,744,164 Bank Overdrafts (38,552,522) (63,008,494) - (27,335,851) Cash and Bank balances for the purpose of Cash Flow Statement (27,626,515) 2,104,669 567,537 27,408,313

15. Stated Capital 2017 2016 2017 2016 Group/Company Number Number Rs. Rs. Fully Paid Ordinary Shares 5,540,828 5,540,828 242,411,225 242,411,225


Notes to the Financial Statements Contd...16. INTEREST BEARING LOANS AND BORROWINGS

16.1 Group 2017 2016 Maturity Rs. Rs. Finance Leases (Note 16.1.1) Various 3,877,572 9,171,758 Import Loans (Note 16.1.2) Various 51,377,688 44,117,529 Term Loans (Note 16.1.3) Various 2,900,339 - Redeemable Preference Shares (ii) Dec 2017 - 17,500,000 Bank Overdrafts (Note 14) On Demand 38,552,522 63,008,494 96,708,121 133,797,781 Presented in the statement of financial position as follows: Current portion 93,759,993 112,874,615 Non-current portion 2,948,128 20,923,166 96,708,121 133,797,781 (i) Finance Leases contained leaseing facilities obtained from different Banks such as National Development Bank PLC. (ii) Redeemable Preference Shares

During 2015, 1,750,000 redeemable preference shares of standard Industrial Solutions (Private) Limited were issued as fully paid with a par value of Rs 10 per share. The redeemable preference shares shall be redeemed between period commencing from 31 December 2016 and ending on 31 December 2017. The Company is obliged to pay holders of these shares bi-annual fixed cumulative interest of 8% per annum. During the period the company had accrued Rs. 1,400,000 as interest.

Redeemable preference shares do not carry the right to vote. Holders of redeemable preference shares participate in the

Company's residual assets only to the extent of the face value of the shares plus dividend accrued if any.

16.1.1 Movement in Finance Lease Liability: Group 2017 2016 Rs. Rs. Balance as at 1 April 2016 9,171,757 14,109,623 New Leases Obtained 5,129,976 1,183,000 Repayments (5,960,460) (6,120,865) Transferred to liabilities towards Assets Held for Sale (4,463,701) - Balance as at 31 March 2017 3,877,572 9,171,758

16.1.2 Movement in Import Loans Group 2017 2016 Rs. Rs. Balance as at 1 April 2016 44,117,529 30,000,000 New Loans Obtained 93,201,468 96,117,529 Repayments (85,941,309) (82,000,000) Balance as at 31 March 2017 51,377,688 44,117,529


16. INTEREST BEARING LOANS AND BORROWINGS (Contd...)

16.1.3Movement in Term Loans Group

2017 2016 Rs. Rs. Balance as at 1 April 2016 - 30,000,000 New Loans Obtained 3,185,000 96,117,529 Repayments (284,661) (82,000,000) Balance as at 31 March 2017 2,900,339 44,117,529

16.1.4 Loan Details The company has mortgaged its freehold Property at Molligoda in Wadduwa as Primary mortgage to obtain import loan

facility from commercial Bank.

16.2 Company 2017 2016

Rs. Rs. Bank Overdrafts (Note 14) - 27,335,851 Presented in the statement of financial position as follows: Current portion - 27,335,851 Non-current portion - - - 27,335,851

17. EMPLOYEE DEFINED BENEFIT LIABILITIES Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. At the beginning of the period 593,585 1,640,250 205,339 360,000 Current service cost 397,742 145,373 19,113 9,698 Interest cost 69,746 - 24,127 - Re-measurement (gain)/Loss 258,691 (1,136,039) 17,952 (164,359) Benefits paid - (55,999) - - Transferred to liabilities towards Assets Held for Sale (20,297) - - - At the end of the period 1,299,467 593,585 266,531 205,339


Notes to the Financial Statements Contd...17. EMPLOYEE DEFINED BENEFIT LIABILITIES (Contd...)

17.1 Messrs. Actuarial and Management Consultants (Private) Limited, Actuaries, carried out an actuarial valuation for Standard Capital PLC, Standard Paints Limited and Standard Industrial Solutions (Private) Limited of the defined benefit plan gratuity as at 31 March 2017. Appropriate and compatible assumptions were used in determining the cost of retirement benefits. The principal assumptions used are as follows:

Principal Actuarial Assumptions 2017 2016 Discount Rate 11% 11.75% Salary Increase Rate 2%-5% 5%-20% Staff Turnover Rate 10% 40%-56% The demographic assumptions underlying the valuation are retirement age of 55 years. The Average duration of the Company's defined benefit plan Obligation at the end of the reporting period is 1 years - 1.16

Years.

17.2 In order to illustrate the significance of the salary escalation rates and discount rates assumed in this valuation a sensitivity analysis of all employees in Standard Capital PLC and It's Subsidiaries including Standard Paints Limited and Standard Industrial Solutions (Private) Limited is as follows;

Group 2017 2016 Discount Rate as at 31 March Rs. Rs. Effect on Retirement Benefit Obligation due to 1% increase in discount rate (50,009) (9,439) Effect on Retirement Benefit Obligation due to 1% decrease in discount rate 55,029 9,802 Salary Escalation Rate as at 31 March Effect on Retirement Benefit Obligation due to 1% increase in salary escalation rate 60,073 7,103 Effect on Retirement Benefit Obligation due to 1% decrease in salary escalation rate (55,400) (6,974)

17.3 In order to illustrate the significance of the salary escalation rates and discount rates assumed in this valuation a sensitivity analysis of all employees in Standard Capital PLC is as follows;

Company 2017 2016 Discount Rate as at 31 March Rs. Rs. Effect on Retirement Benefit Obligation due to 1% increase in discount rate (3,569) (740) Effect on Retirement Benefit Obligation due to 1% decrease in discount rate 3,770 757 Salary Escalation Rate as at 31 March Effect on Retirement Benefit Obligation due to 1% increase in salary escalation rate 4,015 143 Effect on Retirement Benefit Obligation due to 1% decrease in salary escalation rate (3,882) (137)

18. TRADE AND OTHER PAYABLES Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Trade payables 24,818,222 17,200,236 - - Accrued expenses 1,546,172 620,023 1,546,172 1,090,480 Other payables 14,635,831 16,658,145 440,209 559,242 41,000,225 34,478,404 1,986,381 1,649,722

19. AMOUNT DUE TO RELATED PARTIES Group 2017 2016 Relationship Rs. Rs. Standard Constructions (Private) Limited Affiliate 7,569,405 20,000 7,569,405 20,000


Notes to the Financial Statements Contd...20. REVENUE Group Company 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs. Revenue 212,166,519 170,061,748 349,734 791,556 212,166,519 170,061,748 349,734 791,556

21. OTHER INCOME Group Company 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs. Exchange Gain Differences - (32) - - Scrap Sales - 198,407 - - Disposal of Property Plant and equipment - 253,296 - - Net Change in Fair Value of Shares 37,299 1,335,431 37,299 1,335,431 Net Change in Fair Value of Investment Properties 8,000,000 - - - Miscellaneous Income 2,041,739 31,680 - - 10,079,038 1,818,782 37,299 1,335,431

22. OTHER EXPENSES 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs. Impairment Provision for Trade Debtors - 11,680,975 - - Impairment Provision for Investment in Subsidiaries - - 50,000,000 12,000,000 Impairment Provision for amounts due from Related Party - - 29,301,011 - Loss on Disposal of Payroll Software - 8,271 - 8,271 - 11,689,246 79,301,011 12,008,271

23. FINANCE COST 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs. Interest on Import Demand Loan 5,990,348 1,642,486 - - Interest on Lease 1,690,571 1,477,807 - - Interest Expense on Bank Overdraft 4,766,307 2,932,233 301,459 941,876 Factoring Charges 1,143,378 - - - Interest on Term Loans 161,669 - - - Other Finance Expense - 10,292 - - 13,752,273 6,062,818 301,459 941,876

24. FINANCE INCOME 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs. Interest Income from Savings Account 278,496 289,004 2,645 5,398 Interest from Intercompany Loans - - 13,782,289 11,070,384 Interest Income from Fixed Deposits 439,294 2,964,862 439,294 3,083,453 717,790 3,253,866 14,224,228 14,159,235


Notes to the Financial Statements Contd...25. DISCONTINUED OPERATIONS On 17 June 2018, the court has ordered to wind up Standard Industrial Solutions (Private) Limited, a subsidiary, and has

appointed a liquidator. The liquidation of Standard Industrial Solutions (Private) Limited is expected to be completed within a year from the reporting date. At 31 March 2017, Standard Industrial Solutions (Private) Limited was classified as a disposal group held for sale and as a discontinued operation. The results of Standard Industrial Solutions (Private) Limited for the year are presented below:

2017 2016 Rs. Rs. Revenue 14,725,989 45,607,747 Other Income 428,539 694,037 Expenses (37,161,991) (58,716,695) Operating profit/(loss) (22,007,463) (12,414,911) Finance Costs (1,995,226) (3,136,039) Finance Income - 118,592 Profit/(loss) before tax from a discontinued operations (24,002,689) (15,432,358) Tax reversal/(expense) 529,925 (1,099,608) Profit/(loss) for the year from discontinued operations (23,472,764) (16,531,966) The major classes of assets and liabilities of Standard Industrial Solutions (Private) Limited classified as held for sale as at 31

March 2017 are, as follows: 2017 Rs. Assets Property, Plant and Equipment 17,631,832 Inventories 2,330,325 Trade and Other Receivables 3,171,918 Cash and Cash Equivalents 78,276 Assets held for Sale 23,212,351 Liabilities Interest Bearing Loans and Borrowings (22,029,356) Retirement Benefit Obligations (20,297) Trade and Other Payables (3,520,923) Provisions and Accrued Expenses (1,673,287) Amounts Due to Related Parties (365,335) Income Tax Payable (39,695) Liabilities directly associated with Assets held for Sale (27,648,893) Net assets directly associated with disposal group (4,436,542) The net cash flows incurred by Standard Industrial Solutions (Pvt) Ltd are as follows: Net Cash Flows From Operating Activities (1,287,461) Net Cash Flows from Investing Activities (782,800) Net Cash Flows from/(Used in) Financing Activities 373,083 Net (Decrease)/Increase in Cash and Cash Equivalents (1,697,178) Earnings per Share Basic Earnings/(Losses) Per Share from discontinued operations (22.46)


Notes to the Financial Statements Contd...26. PROFIT/(LOSS) BEFORE TAX Profit before tax is stated after charging all expenses including the following: 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Included in Cost of Sales Depreciation Expenses 10,554,027 5,995,010 - - Employee Benefits including the following: 10,501,840 17,188,053 - - - Defined Contribution Plan Costs - EPF and ETF 857,322 952,557 - - Salaries and Allowances 9,644,518 9,564,168 - - Included in Administrative Expenses Employee Benefits including the following: 3,406,461 6,580,660 1,941,173 3,642,901 - Defined Benefit Plan Costs -Gratuity 442,443 145,373 43,240 9,698 - Defined Contribution Plan Costs - EPF and ETF 1,230,747 623,554 164,662 293,543 Salaries and Allowances 6,139,001 880,000 1,803,652 220,000 Directors' emoluments 2,773,000 1,580,000 973,000 - Audit Fees 863,457 - 363,457 282,976 Depreciation Expenses 6,226,143 6,176,742 292,600 292,600 Legal Fee and Donations 619,953 314,500 50,350 5,000 Amortization Expenses 1,487,736 1,599,657 - 4,375 Impairment Provision for investment in Subsidiaries - - 50,000,000 12,000,000 Exchange Loss 127,158 - - - Write-off of VAT Receivable - 1,235,586 - - Write-off of Inventory 236,654 - - - Write-off of NBT Receivables - 552,817 - - Included in Selling and distribution Costs Employee benefits including the following 10,826,501 8,979,618 - - Defined Contribution Plan Costs-EPF and ETF 600,115 760,951 - - Advertising Expenses 458,712 937,247 - - Impairment of Trade Debtors 25,592,468 14,489,774 - -

27. INCOME TAX EXPENSE Group Company 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs. Current Income Tax Current Tax Expenses on Ordinary Activities for the Year (Note 27.1) 2,638,273 1,340,890 2,588,809 1,294,824 Under Provision of Current Income Tax in respect of prior years - - - - 2,638,273 1,340,890 2,588,809 1,294,824 Deferred Income Tax Deferred Taxation (Reversal)/ Charge (Note 27.2) (3,657,596) 4,581,854 1,265,806 694,678 Income Tax Expense/ (Reversal) in the Income Statement (1,019,323) 5,922,744 3,854,615 1,989,502


Notes to the Financial Statements Contd...27. INCOME TAX EXPENSE (Contd. Group Company 2017 2016 2017 2016 Restated Rs. Rs. Rs. Rs.

27.1 A Reconciliation between Tax Expense and the Product of Accounting Profit Accounting Profit/ (Loss) (69,721,005) (42,103,545) (70,574,521) (2,777,458) Income from other sources (14,500,079) (3,381,158) (14,224,228) (3,078,055) Aggregate Disallowed items 469,023 49,901,725 469,023 12,312,111 Aggregate Allowable Expenses (14,904,506) (59,248,284) (14,904,506) (293,245) Dividend Income (349,734) (205,556) (349,734) (205,556) Exempt Profits-Profit on Share Disposal - (586,000) - (586,000) Adjustment to Change in Fair Value 37,299 (1,335,431) 37,299 (1,335,431) Impairment on Investment - - 50,000,000 - Transactions Adjusted in Consolidation - 35,704,844 - - Operating Losses Incurred During the year - 38,662,963 - - Adjusted Business Profit/ (Loss) (98,969,002) 17,409,558 (49,546,667) 4,036,366 Income from Other Sources 14,500,079 3,381,158 14,224,228 3,078,055 Total Statutory Income 14,500,079 20,790,716 14,224,228 7,114,421 Less: Deductions Under Section 32 - Losses claimed upto 35% of Total Statutory Income (5,073,604) (2,620,141) (4,978,480) (2,490,047) Assessable Income 9,426,475 18,170,575 9,245,748 4,624,374 Less: Qualifying Payments - - - - Donations Made to Approved Charities - - - - Qualifying Payment Relief - - - - Taxable Profit/ (Loss) 9,426,475 18,170,575 9,245,748 4,624,374 Tax on Taxable Profit from Business at 28% (2016 -28 % ) - 396,543 - 432,969 Tax on Interest Income at 28% (2016 -28% ) 2,638,273 944,347 2,588,809 861,855 Current Income Tax 2,638,273 1,340,890 2,588,809 1,294,824

27.2 Tax Losses Brought Forward 204,753,990 163,706,905 4,536,135 7,026,182 Adjustment on finalization of the brought forward tax losses (20,821,669) 5,005,113 - - Adjustments associated with discontinued operations (45,797,877) - - - Tax Losses Incurred During the Year 84,468,923 38,662,113 35,322,439 - Tax Losses Utilized During the Year (5,073,604) (2,620,141) (4,978,480) (2,490,047) Tax Losses Carried Forward 217,529,762 204,753,990 34,880,094 4,536,135



27.3 Deferred tax (liability)/asset

27.3.1 Group Statement of Statement profit or loss and of financial other comprehensive position income 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Capital allowances for tax purpose - (21,987,269) 21,987,269 (21,987,269) Revaluation Surplus on Property, Plant and Equipment - (13,453,430) 13,453,430 - Employee defined benefit liabilities - 108,709 (108,709) 108,709 Brought Forward Unused Tax Losses - 29,662,368 (29,662,368) 29,662,368 Deferred tax (charge) reversal 5,669,622 7,783,808 Net deferred tax liability - (5,669,622) The closing deferred tax asset and liability relates to the following. Deferred tax (charge)/ reversal during the period recognised in profit or loss 4,923,402 5,659,879 Deferred tax (charge)/ reversal during the period recognised in other comprehensive income 128,184 14,399,993 Adjustments associated with discontinued operations 618,036 - 5,669,622 20,059,872

27. INCOME TAX EXPENSE (Contd...)

27.3.2 Company Statement of Statement profit or loss and of financial other comprehensive position income 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Capital allowances for tax purpose - 61,807 (61,807) 180 Employee defined benefit liabilities - (57,495) 57,495 (43,306) Brought Forward Unused Tax Losses - (1,270,118) 1,270,118 (697,213) Deferred tax (charge) reversal 1,265,806 (740,339) Net deferred tax liability - (1,265,806) The closing deferred tax asset and liability relates to the following. Deferred tax (charge) reversal during the period recognised in profit or loss (1,265,806) 694,678 Deferred tax (charge) reversal during the period recognised in other comprehensive income - 45,661 (1,265,806) 740,339

27.3.3 Deferred Tax has been computed considering the prevailing tax rate industries at 28%.

27.3.4 The total tax losses as at the reporting date was Rs. 304,525,101/- (2016 - Rs. 204,753,990/-) resulting in a deferred tax asset of Rs. 85,134,676/- (2016 - Rs. 57,331,381/-) as at 31 March 2017. However based on an assessment carried out, Group recognised a deferred tax asset of Rs. 2,665,515/- (2016 - Rs. 30,932,486) from tax losses and a deferred tax asset amounting to Rs. 82,469,161/- (2016 - Rs. 26,938,895) has not been recognized on the said carried forward tax losses.


Notes to the Financial Statements Contd...28. EARNINGS PER SHARE

28.1 Basic earnings per share Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary equity holders of the

parent by the weighted average number of ordinary shares outstanding during the period. Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Losses attributable to equity holders of the Company - Continuing operations (47,774,738) (20,392,413) (74,429,136) (4,766,960) - Discontinuing operations (14,083,658) (6,612,786) - - Losses attributable to equity holders of the Company for basic earnings (61,858,397) (27,005,199) (74,429,136) (4,766,960) Weighted average number of ordinary shares 5,545,215 5,545,215 5,540,828 5,540,828

28.2 Diluted earnings per share Diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary equity holders of the

company by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares in to ordinary shares.

There were no dilutive potential ordinary shares as at reporting date. Hence, diluted earnings per share is same as basic

earnings per share.


Notes to the Financial Statements Contd...29. RELATED PARTY DISCLOSURES Details of significant related party disclosures are as follows.

29.1 Transactions with Parent and Related Entities

29.1.1 Company Subsidiaries Standard Paints Standard Industrial Limited Solutions (Private) Limited Total 2017 2016 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Rs. Rs. Balance as at 01 April 2016 173,913,547 144,730,472 27,302,882 20,735,572 201,216,429 165,466,044 Repayment of Temporary Finance (8,000,000) (19,580,000) - (470,000) (8,000,000) (20,050,000) Obtained and Fund Transfers 13,700,000 39,180,000 173,605 5,450,000 13,873,605 44,630,000 Interest Charges on Funds Transfers 11,957,763 9,583,075 1,824,526 1,487,310 13,782,289 11,070,385 Rent expenses (172,500) - - - - - Expenses Reimbursed - - - 100,000 - 100,000 Provision for Impairment - - (29,301,013) - - Balance as at 31 March 2017 191,398,810 173,913,547 - 27,302,882 191,398,810 201,216,429

29.1.2 Group Standard Industrial Solutions (Private) Limited Standard Constructions Private Limited) 2017 2016 Rs. Rs. Balance as at 01 April 2016 (20,000) (480,467) Repayment or Fund Transfer 2,340,000 1,507,861 Obtained and Fund Transfers - (1,000,000) Sales of Goods or Services (2,700,000) Services Obtained - - Expenses Incurred 14,665 (47,394) Balance as at 31 March 2017 (365,335) (20,000) Standard Paints Limited Standard Constructions (Private Limited) 2017 2016 Rs. Rs. Balance as at 01 April 2016 - (691,008) Repayment of Temporary Finance 18,212,737 29,826,008 Obtained and Fund Transfers (26,021,443) (29,125,000) Sales of Goods or Services 874,161 - Expenses Reimbursed (634,860) (10,000) Balance as at 31 March 2017 (7,569,405) -


Notes to the Financial Statements Contd...29. RELATED PARTY DISCLOSURES (Contd...) Standard Logistics (Private Limited) 2017 2016 Rs. Rs. Balance as at 01 April 2016 - - Obtained and Fund Transfers 705,000 - Balance as at 31 March 2017 705,000 -

29.2 Transactions with Key Management Personnel of the Company The key management personnel of the Company are the members of its Board of Directors. Key Management Personnel Compensation Key Management Personnel include the Board of Directors of the Company and its subsidiary companies. Short-term employee benefits and post-employment benefits paid to Key Management Personnel are recognised under

Director's emoluments in note 25 of the financial statements.

30. COMMITMENTS AND CONTINGENCIES

30.1 Capital Expenditure Commitments The Group doesn’t have significant capital commitment as at the reporting date.

30.2 Contingencies The Group doesn’t have significant contingent liabilities as at the reporting date.

31. ASSETS PLEDGED

31.1 Company The Company does not have pledged any assets as at the reporting date to any outside party.

31.2 Group The Following Assets and Liabilities have been pledged as security for liabilities Group Carrying Amount Pledged Nature of Assets Nature of Liability 2017 2016 Rs. Rs. Freehold Land Primary Mortgage Over Import Loan 66,500,000 62,300,000 Building Primary Mortgage Over Import Loan 66,500,000 67,300,000

32. EVENTS OCCURRING AFTER THE STATEMENT OF REPORTING DATE There have been no material events occurring after the statement of reporting date that require adjustments to or disclosure

in the financial statements.


Notes to the Financial Statements Contd...33. FINANCIAL RISK MANAGEMENT Objectives and policies The Group’s principal financial liabilities comprise trade payables, other payables, amounts due to related parties, and

interest bearing loans and borrowings. The main purpose of these financial liabilities is to finance the Group’s operations. The Group's principal financial assets include bank balances and cash, trade receivables, other receivables and amounts due from related parties that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

33.1 Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to of changes in

market prices. Market risk of the Group comprises interest rate risk and currency risk. Credit risk

33.1.1 Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to of changes

in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s financial assets and liabilities with floating interest rates.

The Group’s financial assets and liabilities that are subject to interest rate risk comprise interest bearing loans and borrowings amounting to Rs. 118,264,789/- (2016: Rs. 133,797,781).

As at the reporting date the interest rate profile of the Company’s interest-bearing financial instruments were:

As at 31 March Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Variable Rate Instruments (a) Financial Liabilities - Bank Overdraft 38,552,522 63,008,494 - 27,335,851 -Import Loans 51,377,688 44,117,529 - - 89,930,210 107,126,023 - 27,335,851 Fixed Rate Instruments (b) Financial Liabilities - Lease liability 3,877,572 9,171,758 - - - Long term borrowings - 17,500,000 - 2,904,806 3,877,572 26,671,758 - 2,904,806

33.1.2 Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to of

changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities.


Notes to the Financial Statements Contd...33. FINANCIAL RISK MANAGEMENT (Contd..)

33.2 Credit risk Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract,

leading to a financial loss. The Group is exposed to credit risk from its operating activities primarily trade receivables and from its financing activities, including deposits with banks and other financial assets.

The Group trades only with recognised creditworthy third parties. It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant.

With respect to credit risk arising from the deposits with banks, the Group's exposure to credit risk arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these assets in the statement of financial position. Exposures are considered of good credit standing and management believes there is a minimal risk of default thus, expected credit loss is insignificant but being monitored for significant changes in credit risk.

The carrying amount of these financial instruments as at reporting date as follows:

Effect on profit for the period Group Company 2017 2016 2017 2016 Rs. Rs. Rs. Rs. Bank balances 10,926,007 60,542,195 567,537 54,735,176 Trade receivables 115,519,221 140,163,783 - - Other receivables 6,193,485 10,490,647 1,235,687 1,264,690 Amounts due from related parties 705,000 - 191,398,810 173,913,547 Available for Sale Financial Assets - Investment In Unquoted Shares 1,576,394 1,612,089 1,576,394 1,612,089 Fair Value through Profit or Loss Financial Assets 2,519,500 3,734,426 2,519,500 3,734,426 137,439,607 216,543,140 197,297,928 235,259,928 Less : Provision for impairment (27,686,040) (28,784,668) - - 109,753,567 187,758,472 197,297,928 235,259,928

33.3 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet obligations as they fall due. The Group’s approach to managing

liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or destructing the Group’s operations.

The Group's objective is to maintain a balance between continuity of funding and flexibility through use of the Group’s own reserves, funds from the shareholders and bank facilities.

The table below summarises the maturity profile of the Group’s financial liabilities as at reporting date, based on contractual undiscounted payments.

Group 2017 On Demand Less than 1 to 5 Total 1 year years Rs. Rs. Rs. Rs. Trade payables 24,818,222 - - 24,818,222 Other payables 16,182,003 - - 16,182,003 Amounts due to related parties 7,569,405 - - 7,569,405 Interest bearing loans and borrowings 38,552,522 55,207,471 2,948,128 96,708,121 62,303,930 55,207,471 2,948,128 145,277,751 2016 On Demand Less than 1 to 5 Total 1 year years Rs. Rs. Rs. Rs. Trade payables 17,200,236 - - 17,200,236 Other payables 17,178,168 - - 17,178,168 Amounts due to related parties 20,000 - - 20,000 Interest bearing loans and borrowings 63,008,494 49,866,121 20,923,166 133,797,781 97,406,898 49,866,121 20,923,166 168,196,185


Notes to the Financial Statements Contd...33. FINANCIAL RISK MANAGEMENT (Contd..) Company 2017 On Demand Less than 1 to 5 Total 1 year years Rs. Rs. Rs. Rs. Trade payables - - - Other payables 1,986,381 - - 1,986,381 - - - 2016 On Demand Less than 1 to 5 Total 1 year years Rs. Rs. Rs. Rs. Trade payables - - - - Other payables 1,649,722 - - 1,649,722 1,649,722 - - 1,649,722 Capital management The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to

shareholders through the optimisation of the debt and equity balance. The Group makes adjustments to its capital structure, in light of changes in economic and business conditions. To maintain

or adjust the capital structure, the Group may issue new shares or adjust dividend payments to shareholders. No changes were made in the objectives, policies or processes during the nine months years ended 31 March 2017 and 2016.

Capital, which includes Stated Capital, Revaluation Reserve, AFS Reserve and Retained Earnings is measured at

Rs. 218,109,350/- as at 31 March 2017 (2016 - Rs. 337,845,827/-).

34. FAIR VALUES OF FINANCIAL INSTRUMENTS Financial instruments comprise of financial assets and financial liabilities. Financial instruments consist of financial assets and financial liabilities. Financial assets consist of cash and bank balances,

trade receivables, other receivables and amounts due from related parties, Available for sale financial Assets and Fair value through Profit and loss.

Financial liabilities consist of trade payables, other payables, amounts due to related parties and interest bearing loans and

borrowings. The fair values of financial Assets contained Available for sale financial assets which are materially different from their

carrying values and reflected in Note 9. The fair values of financial Assets contained Fair value through Profit and loss financial assets which are materially different

from their carrying values and reflected in Note 12.


Ten Year SummaryY

ear

End

ed 3

1st

M

arch

20

17

20

16

20

15

20

14

20

13

20

12

20

11

20

10

20

09

20

08

Rev

enu

e21

2,16

6,51

917

0,06

1,74

822

2,45

4,30

118

2,76

2,32

213

8,63

1,78

018

,529

,054

2,40

0,00

01,

345,

667

1,16

0,05

899

6,01

5

Pro

fit

/( L

oss

) fro

m

Op

erat

ion

s(6

9,7

21

,00

5)

(42,

103,

545)

(30,

117,

100)

(671

,596

)(2

3,91

9,69

5)(8

,900

,610

)14

2,09

5(1

,317

,102

)58

5,90

8(1

,212

,179

)

Net

Fin

ance

Co

st(1

3,0

34

,48

3)

(2,8

08,9

52)

(7,2

64,1

68)

(6,7

38,8

08)

1,84

0,40

5(7

2,62

9)(2

,967

)4,

633

12,0

954,

709

Net

Pro

fit/

( Lo

ss)

fro

m c

on

tin

uin

g

op

erat

ion

s(6

8,7

01

,68

2)

(48,

026,

289)

(33,

331,

279)

286,

024

(13,

423,

639)

(2,8

40,5

23)

139,

128

(1,3

21,7

35)

(598

,003

)(1

,216

,888

)

EQU

ITY

&

LIA

BIL

ITIE

S

Stat

ed C

apit

al2

42

,41

1,2

25

242,

411,

225

242,

411,

225

242,

411,

225

242,

411,

225

242,

411,

225

13,8

52,0

7013

,852

,070

13,8

52,0

7013

,852

,070

Res

erve

s(2

1,4

06

,93

4)

95,4

34,6

0222

,779

,117

5,17

3,36

24,

899,

317

77,4

23,3

9233

,924

,886

33,9

24,8

8633

,924

,886

33,9

24,8

86

Acc

um

ula

ted

P

rofi

t/(L

oss

)(6

2,7

14

,17

1)

41,9

57,2

1268

,365

,608

72,7

89,7

3346

,203

,313

47,5

81,9

7661

,395

,120

(16,

167,

400)

(15,

101,

873)

(14,

503,

870)

No

n C

urr

ent

Liab

iliti

es4

,24

7,5

95

27,1

86,3

7427

,531

,408

18,2

40,7

827,

926,

018

379,

746

118,

509

122,

750

888,

816

849,

988

Cu

rren

t Li

abili

ties

17

3,8

63

,19

714

8,70

8,58

191

,188

,044

140,

334,

849

38,6

92,8

387,

440,

120

3,54

1,95

93,

344,

132

2,21

8,19

31,

745,

212

ASS

ETS

Inve

stm

ent

Pro

per

ty1

33

,00

0,0

00

125,

000,

000

125,

000,

000

125,

000,

000

82,2

00,0

0082

,200

,000

77,1

30,7

7077

,069

,379

33,3

79,9

9433

,912

,772

Un

qu

ote

d

Inve

stm

ent

1,5

76

,39

41,

612,

089

1,75

9,18

31,

474,

045

1,20

0,00

01,

200,

000

1,20

0,00

01,

160,

000

1,12

2,00

01,

013,

000

Cu

rren

t A

sset

s1

60

,65

5,7

95

238,

411,

342

233,

577,

345

194,

792,

522

180,

126,

668

183,

285,

772

429,

576

345,

564

1,28

0,09

794

2,52

3

2


2

Investor Information

1 SHAREHOLDING AND DISTRIBUTIONNo. of Share

HoldersCategory of

HoldingsTotal

HoldingsPercentage ofHoldings (%)

979 1 - 1,000 99,710 1.80

62 1,001 - 10,000 187,742 3.39

8 10,001 - 100,000 313,102 5.65

6 100,001 - 1,000,000 2,140,274 38.63

1 Over 1,000,000 2,800,000 50.53

1,056 5,540,828 100.00

2 RESIDENT SHAREHOLDING AND DISTRIBUTIONNo. of Share

HoldersCategory of

HoldingsTotal


976 1 - 1,000 99,155 1.79

61 1,001 - 10,000 186,242 3.36

8 10,001 - 100,000 313,102 5.65

3 100,001 - 1,000,000 1,135,658 20.50

0 Over 1,000,000 0 0

1,048 1,734,157 31.30

3 NON RESIDENT SHAREHOLDING AND DISTRIBUTIONNo. of Share

HoldersCategory of

HoldingsTotal


3 1 - 1,000 555 0.01

1 1,001 - 10,000 1,500 0.03

3 100,001 - 1,000,000 1,004,616 18.13

1 Over 1,000,000 2,800,000 50.53

8 3,806,671 68.70

4 COMPOSITION OF SHAREHOLDERSCategories of Shareholders

No. of Shareholders No. of Share

Individual 1,024 773,889

Institutional 32 4,766,939

Total 1,056 5,540,828

6 Share Price

Highest Rs. 100.00

Lowest Rs. 54.00

As at 31st March 2017 Rs. 60.00

Standard Capital PLCInformation to Shareholders & Investors

5 Public Holdings Number of Shareholders represent the Public holdings - 1,052 The public Shareholdings percentage - 38.41%


Investor Information Contd... 7 Details of Twenty Major Shareholders as at 31st March 2017

No. of As a Shares Percentage (%)

1 Gulf East Finance Ltd 2,800,000 50.53

2 Sinali Capital (Pvt) Ltd 560,000 10.11

3 Eastern Ocean Investments Ltd 528,987 9.55

4 Best Real Invest Co Services (Pvt) Ltd 293,521 5.30

5 Mr. Kangasu Chelvadurai Vignarajah 282,137 5.09

6 Standard Chemical Corporation Pte.Ltd 270,000 4.87

7 Amina Investments Limited 205,629 3.71

8 Mrs. Sarojini Navaratnam 64,930 1.17

9 Mrs. Kamala Gunarartnam 64,930 1.17

10 Commercial Bank of Ceylon PLC/Sinali Capital (Pvt) Limited 52,614 0.95

11 Mr. Sithambaram Pillai Jayakumar 35,685 0.64

12 Ms. Nishma Ruhi Fonseka 31,343 0.57

13 Mrs. Sarathathevy Vignarajah 27,329 0.49

14 Mr. Nawooroonne Waduge Navaratne Jayasiri 23,015 0.42

15 Mrs.Packeerally Gnei Yasmin 13,256 0.24

16 Mr. Sathasivam Govindasamy 10,000 0.18

17 Mr. Udayakumar Govindasamy 10,000 0.18

18 Mrs. Kalyani Sathasivam 10,000 0.18

19 Mr.Mohamed Reza Aniff 8,064 0.15

20 Mrs. Mary Lourdes Kamala Jayarathnam. 7,500 0.14

TOTAL 5,298,940 95.64


Investor Information Contd...7 Details of Twenty Major Shareholders as at 31st March 2016 No. of As a Shares Percentage (%)

1 Gulf East Finance Ltd 2,800,000 50.532 Sinali Capital (Pvt) Ltd 560,000 10.113 Eastern Ocean Investments Ltd 528,987 9.554 Best Real Invest Co Services (Pvt) Ltd 293,521 5.305 Mr. Kangasu Chelvadurai Vignarajah 280,563 5.066 Standard Chemical Corporation Pte. Ltd 270,000 4.877 Amina Investments Limited 205,629 3.718 Mrs. Sarojini Navaratnam 64,930 1.179 Mrs. Kamala Gunarartnam 64,930 1.1710 Commercial Bank of Ceylon PLC/ Sinali Capital (Pvt) Ltd 52,614 0.9511 First Capital Market Ltd/Mr. S P Jayakumar 35,685 0.6412 Ms. Nishma Ruhi Fonseka 31,343 0.5713 Mrs. Sarathathevy Vignarajah 27,136 0.4914 Mr. Nawooroonne Waduge Navaratne Jayasiri 23,015 0.4215 Mrs.Packeerally Gnei Yasmin 13,256 0.2416 Mr. Sathasivam Govindasamy 10,000 0.1817 Mr. Udayakumar Govindasamy 10,000 0.1818 Mrs. Kalyani Sathasivam 10,000 0.1819 Mr. Galle Hewage Sunil Senarathna 8,970 0.1620 Mr.Mohamed Reza Aniff 8,064 0.15 Total 5,298,643 95.63


Election of Independent Directors in terms of Article 75(3) of the Articles of Association

In terms of Article 75(3) of the Articles of Association, the Minority Shareholder Group is entitled to elect two Independent Directors to the Board of Directors of the Company.

Any shareholder or shareholders belonging to the Minority Shareholder Group (defined in Article 2) may in terms of Article 89, by written notice left at the registered office of the Company not less than fourteen and not more than twenty eight days before the date of the AGM, propose a person to be elected as an Independent Director at the AGM.

Such notice should be accompanied by a copy of National Identity Card or copy the Pages of Passport. A signed curriculum vitae of the person to be proposed together with a declaration in writing signed by the person to be proposed in the form given below.

Form of declaration by person to be proposed as an Independent Director of the Company.

M/s. Standard Capital PLC, No.187,First Floor,Ward Place, Colombo 07.

Dear SirsI hereby declare my willingness to be elected as an Independent Director of the Company. Signed copies of my curriculum vitae, National Identity Card or pages of the Passport that will confirm and identity me, my nationality and residential address, is enclosed. I further declare that I am not disqualified from being a Director under any provisions of the Companies Act or of the Articles of Association.

I further declare that I do not have any interest conflicting withthe interests of the Company or Group

Yours faithfully (Signed)


Notice of Meeting NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of Standard Capital PLC will be held on 31st October 2019 at Colombo City Hotel, No. 33, Level 03, Canal Row, Fort, Colombo 01 at 12.30 pm for the following purposes:

1. To receive and consider the Report of the Directors and the Statement of Accounts for the year ended 31st March 2017 with the report of the Auditors thereon.

2. To re-elect Mr. Aznayn Mohiadeen Abdul Cader who retires by rotation at the Annual General Meeting in terms of Article 86 of the Company’s Articles of Association.

3. To re-appoint the retiring Auditors M/s Ernst & Young, Chartered Accountants to hold office until the conclusion of the next Annual General Meeting and to authorize the Directors to determine their remuneration.

4. Any other matters

BY THE ORDER OF THE BOARD STANDARD CAPITAL PLC

Signed illegibly

CORPORATE ADVISORY SERVICES (PRIVATE) LIMITED SECRETARIES Colombo

9th August 2019

A Shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on his/her behalf. A Proxy need not be a member of the Company.

A Form of Proxy is enclosed for this purpose. The instrument of appointing a proxy must be deposited at the Registered Office of the Company, No 187 Ward Place, Colombo 07 not less than forty eight hours before the time fixed for the meeting


Notes………............................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

...................................................................................................................................................................................................................................................................................................

………............................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

...................................................................................................................................................................................................................................................................................................

………............................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

...................................................................................................................................................................................................................................................................................................

………............................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

...................................................................................................................................................................................................................................................................................................

………............................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

...................................................................................................................................................................................................................................................................................................

………............................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................

......................................................................................................................................................................................................................................................................................................


Form of ProxyI/We* the undersigned …………………………….…………………………………………………………………………………………………....................................………….

Of………………………………………………………………………………………….………………………………………………………………………being a

member/members of STANDARD CAPITAL PLC hereby appoint

Mr. W. I. Arambage or failing himMr. S. Gamage or failing him Mr. A. B. Al-Neama or failing himMr. S. Kader or failing himMr. A.M.A. Cader or failing him

………………………………………………………………….......................................………………………………………………………………………………………………………….

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

as my/our* proxy to vote as indicated hereunder for me/us* and on my/our* behalf at the Annual General Meeting of the Company to be held on 31st October 2019 at the Colombo City Hotel, No. 33, Level 03, Canal Row, Fort, Colombo 01 at 12.30 pm and at any adjournment thereof, and at every poll which may be taken in consequence thereof.

Please indicate your preference by placing an ‘X’ against the Resolution No.

1. To receive and consider the Report of the Directors and the Statement of Accounts for the year ended 31st March 2017 with the report of the Auditors thereon.

2. To re-elect Mr. Aznayn Mohiadeen Abdul Cader who retires by rotation at the Annual General Meeting in terms of Article 86 of the Company’s Articles of Association.

3. To re-appoint the retiring Auditors M/s Ernst & Young, Chartered Accountant to hold office until the conclusion of the next Annual General Meeting and to authorize the Directors to determine their remuneration.

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

……………………............……. Signature of Shareholder

Shareholders NIC/PP/Co. Reg. No.

* Please delete the inappropriate words

Notes:

1. If you wish your Proxy to speak at the Meeting you should insert the words “ to speak and” in the place indicated with an asterisk and initial such insertion.

2. Please indicate with an “x” in the space provided how your Proxy is to vote. If there is in the view of the Proxy holder doubt (by reason of the way in which the instructions contained in the Proxy have been completed) as to the way in which the Proxy holder should vote, the Proxy holder shall vote as he thinks fit.

3. A Proxy holder need not be a member of the Company.

4. Instructions as to completion appear on the reverse hereof.

For Against


Instructions for Completion

Instructions for completion

1. Kindly complete the Form of Proxy by filling in legibly your full name and address, and your instructions as to voting, by signing in the space provided and filling in the date of signature.

2. Please indicate with an “X” in the cages provided how your proxy is to vote on the Resolution If no indication is given or if there is any doubt as to how the Proxy should vote by reason of the manner in which the instructions are carried out, the proxy in his/her discretion may vote as he/she thinks fit.

3. The completed Form of Proxy should be deposited at the Registered Office of the Company at No 187, Ward Place, Colombo 07 not less than 48 hours before the time appointed for holding the meeting.

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

Note: If the shareholder is a Company or body Corporate, Section 138 of the Companies Act No. 7 of 2007 applies to corporate

shareholders of Standard Capital, PLC

Please furnish the following information:

Shareholder OR Proxy holder

NIC No. / Passport No. …………………… ……………. Nationality …………………… …………….

Share Certificate No. …………………… …………….

No. of Shares: …………………… …………….

Contents · Mr. Waruna Indika Arambage - Chairman/Non Independent/Non Executive Director ... faced...

Documents

Transcript of Contents · Mr. Waruna Indika Arambage - Chairman/Non Independent/Non Executive Director ... faced...