Kegalle Plantations PLC- Annual Report 2010

8/6/2019 Kegalle Plantations PLC- Annual Report 2010

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Year ended 31 March 2011

Kegalle Plantations PLC Annual Report 2010/11




Annual Report 2010/11 Kegalle Plantations PLC



ANNUAL REPORT

2010/11ANNUAL REPORT

2010/11

KegallePlantations PLC

Contents

Overview & Business Perormance

Company Profle 2

Financial Highlights 3

Chairman’s Review 5

Segmental Inormation 8

Our Estates 10

Our People 11

Profle o Directors 12

Governance

Sustainability Report 14

Achievements 19

Financial Review 21

Review o Operations 24

Statement o Value Added 29

Corporate Governance 30

Report o the Audit Committee 33

Report o the Remuneration Committee 35

Risk Management 36

Financials

Financial Calendar 40

Annual Report o the Board o Directors 41

Statement o the Directors’ Responsibility 45

Chie Executive Ocer’s and Chie Financial

Ocer’s Responsibility Statement 46

Independent Auditors’ Report 47Balance Sheet 48

Income Statement 49

Cash Flow Statement 50

Statement o Changes in Equity 52

Notes to the Financial Statements 53

Other Reports

Ten Year Summary 84

Historical Note 85

Shareholder & Investor inormation 87

Defnitions 90

Notice o Meeting 91

Form o Proxy Enclosed

Corporate Inormation back inner cover





he Government o Sri Lanka, as part o its restructuring

plan or the Plantation Industry decided to privatize

this sector and in June 1992 incorporated 22 Regional

However, the Government holds through the Secretary to the

Treasury one share which is called Golden Share and it gives the

Government the title, “Golden Shareholder” o the Company.

The Golden Shareholder has certain special rights than what

is enjoyed by a normal shareholder and these rights are

incorporated in the Articles o Association o the Company. The

Prospectus oered to the public also contained these clauses.

Some o the important clauses are given in this Annual Report

under “Shareholder & Investor Inormation”.

At the time it acquired the 51% stake RPK also invested Rs. 50

Mn in convertible debentures o KPL. In February 1998, these

debentures were converted to 5 million Ordinary Shares o Rs.

10/- each and assigned to RPK, increasing the Share Capital o

the Company to Rs. 250 Mn. In March 2004, Richard Pieris &

Company PLC purchased the balance 50% stake in RPK rom

John Keells Holdings PLC, thereby making RPK, a ully owned

subsidiary. Consequent to the change in the ownership, RPK was renamed as RPC Management Services (Pvt) Limited.

During the year 2008, the ownership o the Company was

transerred rom RPC Management Services (Pvt) Limited to

RPC Plantation Management Services (Pvt) Limited. Currently

RPC Plantation Management Services (Pvt) Limited holds 68%

stake in KPL.

Kegalle Plantations PLC is the largest rubber producing

Company among the Regional Plantation Companies

accounting or 4.5 Mn kgs o average production per annum.

KEGALLE PLANTATIONS PLC 2011

Company Profle

TPlantation Companies. Then the Government assigned these

Companies, Estates that had been previously vested with the

Government and managed by JEDB/SLPC on a 53 year lease.

Separate Managing Agents were also selected to manage each

o these Companies.

Kegalle Plantations PLC (KPL) was one such Company and it

was allotted 21 Estates which in total have a land base o 10,000

Ha in and around Kegalle, Kurunegala Districts and in the

Badulla District. O this land base around 5,400 Ha are Rubber,

1,400 Ha are under Tea and another 500 Ha under Coconut.

The Company produces around 4.5 Mn Kilos o Rubber and 2.8

Mn Kilos o Tea inclusive o bought crop. It has an employee

strength o 7,366.

The Managing Agent appointed by the Government was RPK

Management Services (Pvt) Limited (RPK), which was a 50:50

joint venture Company between Richard Pieris & Company PLC

and John Keells Holdings PLC. The ownership o the Company

changed during the latter part o 1995 when the Government

sold 20% o the shares it held to the public and the majority

stake o 51% to RPK Management Services (Pvt) Limited. It also

gited 10% or 2 Mn shares to over 8,000 eligible employees.

In May 1997 the Government sold urther 19% shares it held

through the Colombo Stock Exchange (CSE), to the public

and thereby, totally exited rom the ownership o Kegalle

Plantations PLC.





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Earning per share

Rs. 35.33 (2010 - Rs. 15.04)

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Net Assets per share

Rs. 97.76 (2010 - Rs. 67.93)

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Profit After Tax

Rs. 883 Mn (2010 - Rs. 376 Mn)

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Turnover

Rs. 2,992 Mn (2010 - Rs. 2,216 Mn)

Financial Highlights

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Return on Average Equity

42.64 % (2010 - 24.69%)

8.50 10.50 13.2522.00 40.00 42.00 60.00

19.0047.00

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Growth in Share Price

Rs. 207.50 (2010 - Rs. 47.00)

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Dividend per share

Rs. 3.00 (2010 - Rs. 3.00)

Revenue - Rs. 2.9 Bn

Growth - 35%

Proft Ater Tax - Rs. 883 Mn

Growth - 135%

Net Assets - Rs. 97.76 per share

Growth - 44%

EPS - Rs. 35.33 per share

Growth - 135%

Interest Cover - 8.78 times

Growth - 41%

Price Earnings - 5.87 times

Growth - 88%





Perormance – Year Ended 31 March 2011 2010 Variance % Turnover 2,991,762 2,216,497

Proft beore Interest and Tax 1,031,593 460,958 123.79

Proft Ater Tax 883,127 376,030 134.86

Gross Dividends 75,000 75,000 -

Capital Expenditure 200,244 183,036 9.40 Financial Position as at 31 March Fixed Assets 1,932,819 1,814,679 6.51

Current Assets 1,999,004 1,325,104 50.86

Total Assets 3,931,823 3,139,783

Current Liabilities 366,372 317,718 15.31

Shareholders’ Funds 2,443,938 1,698,311 43.90

Stated Capital 250,000 250,000 -

Capital Employed 2,815,347 2,103,170 33.86

Financial Highlights Contd….

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 2011

Cropkg/nut '000

RUBBER TEA COCONUT

298

347

405

344

250

300

350

400

450

2008 2009 2 010 2011

BorrowingsRs / Million

552

354

528

894

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400

500

600

700

800

900

1,000

2008 2009 2010 2011

Net Cash Generated from Operations

Rs / Million

1,000

2,000

3,000

4,000

2008 2009 2010 2011

Turnover

Rs / Million

TEA RUBBER

Key Indicators 2011 2010 Variance % Earnings per share Rs 35.33 15.04 134.86

Net Assets per share Rs 97.76 67.93 43.90

Dividends per share Rs 3.00 3.00 -

Market Price per share Rs 207.50 47.00 341.49

Return on Capital Employed % 32.58 18.95 71.90

Market Capitalisation Rs.’000 5,187,500 1,175,000 341.49

Return on Average Equity % 42.64 24.69 72.70

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Chairman’s Review

ith great pleasure, I herewith present the Annual

Report o Kegalle Plantations PLC or the fnancial year

ended 31 March 2011.

The most excellent and proftable year in the recorded history

o Kegalle Plantations PLC was seen this year. By toppling

every single prediction on rubber prices, your Companyetched the highest ever price or Natural Rubber in Sri Lanka

in February 2011. This year saw an unmatchable proft ater

tax o Rs. 883 Mn, a 135% increase in profts in comparison to

last year. Inclement weather in the highest cropping months,

restricted tapping days to a meager 20 days during November

and December 2010, dampened this growth to a considerable

extent.

However, due to the global plunge in rubber production

experienced during the year resulted in greater demand

or Latex, created high prices or natural rubber and value

additions. With sharp strengthening o the currencies o

Malaysia, Indonesia and Thailand, three main rubber-producing

countries with a production o approximately 87% o the world

rubber supply, exerted strong upward pressure on Natural

Rubber prices rom the beginning o February 2011.

Our Perormance and Financial Results

Company recorded an ater tax proft o Rs. 883 Mn in

comparison to Rs. 376 Mn in the previous year. Total Revenue

in the year under review is Rs. 2.9 Bn. 65.7% or Rs. 1.96 Bn o

this revenue was rom Rubber and 30.4% or Rs. 909 Mn o the

Revenue was rom Tea and the balance rom Other crops such as

Coconut, Cardamom, and Other income. Although production

o Tea saw an improvement o 12%, Rubber production had a

signifcant drop o 11% against previous year.

W





Chairman’s Review Contd….

Udapussellawa tea prices continued to be strong during theyear and the dual manuacturing acility assisted the Company

to manuacture and maintain a healthy balance o rotovane

and other low grown type teas to cater to varying demand in

the market. 72% o the revenue o Tea was rom Udapussellawa

/ Uva region and mid grown and low grown teas contributed

28% towards this.

Gross Proft o the Company was Rs. 1.17 Bn in comparison to

Rs. 454 Mn in the previous year. 88% or Rs. 1.03 Bn o the Gross

proft was generated rom Rubber crop.

Rubber production declined by 11% in comparison to last year

and stood at 4,082 Mn kg whilst 87% o the production wasrom estate crop. 2,773 Mn kg o tea was produced during the

year and is a 12% increase rom the previous year. 57% or 1,573

Mn kg was rom estate lea.

Rubber Industry and Our Company

Kegalle Plantations PLC continued to maintain its supremacy as

the largest natural rubber producing Plantation Company in Sri

Lanka with a production o 4,082 MT in spite o a 11% decrease

in production in comparison to previous year. Production was

largely hampered by inclement weather patterns during the

latter part o the 3rd Quarter, where a considerable amount o

crop was lost during the main cropping months.

Revenue generating Rubber extent o the Company was 3,798

hectares in the year under review. Crepe asserted the highest

ever recorded price o Rs. 700.00 per kg in the month o

February 2011.

With the intention o reaping the maximum beneft rom

changing demand in the market, a healthy grade mix o

rubber was maintained since the Company has the strength

and the resources to change the product mix depending on

market demand. An extent o 183 hectares will come into

bearing rom immature plantings with an additional rubbercrop o approximately 175,000 kg during the next fnancial

year. Kegalle Plantations has accelerated its rubber replanting

exceeding the recommended 3%, which ell short during the

economic down turn in the previous years.

High yielding new clones have been replanted which will

undoubtedly contribute to an escalated production when such

extents come in to bearing. Further the Company has escalated

its replanting program supported by proper agricultural

practices with 147 hectares being newly planted this year.

An assessment made by the ANRPC (Association o NaturalRubber Producing Countries) who accounts or 92% o global

exports and 48% o the global consumption o natural rubber

that the supply will rise by 4.8% during 2011, 5.2% during 2012,

6.3% during 2013, 7.0% during 2014 and 7.5% during 2015.

Given the current growth in automobile and tyre manuacturing

industries and the huge potential available in China and India,

the demand or rubber should continue to grow in the ensuing

years.

Tea Industry and Our Company

Kegalle contributed positively towards the increase in national

production during the year. All-time high tea production in SriLanka was recorded during the 2010 calendar year. Despite the

act that there was severe competition in the Udapussellawa

area or Bought Lea, coupled with reasonably good weather,

increased made tea production amounting to 2.7 Mn kg, a 12%

increase rom the previous year contributed towards this. Yield

in tea was 1,221 kg/ha. Revenue extent o Tea in the Company

was 1,289 hectares, with 16 hectares o immature planting

undertaken during the year.

The demand or tea may have an eect with the volatile situation

in Middle Eastern countries and Libya in 2011/12. China and

India with their large population and growing income levels

will contribute to the rise in the world tea consumption since

their increasing population will contribute to increase local

consumption o tea thereby reducing their exportable surplus.

Further sources confrm that all major tea producing countries

including India have recorded shortalls in 2011 to end

February, which could increase demand in 2011.

Investments and Capital Expenditure

The Company continued its endeavours in embracing new

inventions or increased productivity and has been rain

guarding its high yielding rubber extents by investing Rs. 6.9 Mn

in this process. The Company continued its replanting programwith 23 hectares o new tea replanting and 147 hectares o

Rubber and expended Rs. 137 Mn or this purpose. Kegalle

Plantations commenced upgrading Doteloya tea actory with

an investment o Rs. 18 Mn. The Company purchased Computer

Note Books to the Estate Executives in its pursuit o escalating

the speed o the computerization o estates.





Chairman’s Review Contd….

Human Resource Development and Training

The Company’s endeavour in enhancing the quality o

employee perormance has been a continuous process.

Proessional training was given on best Agricultural practices

or Superintendents on Rubber and Tea. Progress made in

computerization o the estates has been encouraging which

will enhance the management inormation ow or speedier

and eective decision making at strategic level. All estate

sta members were given several extensive training sessions

on eective usage o computer and the estate accounting

package and awareness programs to enhance their knowledge

on the package.

In addition, an Awards ceremony was organized to recognize

the top perormers o the Plantations Sector o the Richard

Pieris Group where estate level fnancial perormance, best

agricultural practices, highest crop and yield, best cash

management etc were evaluated and rewarded.

Worker Welare

During the year under review, renovations were made to the

Line Rooms and drains, re-roofng was undertaken in several

estates and estate road development work were undertaken

with the assistance o PHDT. Health camps or replacement

o spectacles, Diabetes Detection and control, Nutritionalprograms were also carried out. This will be discussed in detail

in another statement o this Report.

Financial assistance was given to all estate employees’ children

who have qualifed or University education as done in the

previous years. Four students qualifed or University education

this year under the scheme.

Computerization

The eorts in implementing the General ledger, Check Roll,

Tea Crop Ledger and General Inventory were successul and

proved promising. With the issue o Computer Note Books toall Superintendents reassured their commitment towards this

process. It is expected to computerize the Rubber Crop Ledger

and the Production Module during the next fnancial year.

Future or our Company

Strategizing or the uture had always been challenging in a

volatile global economy despite the act that we have been

experiencing post conict optimism in the country. With the

intention o exploring new avenues, initiatives have been

taken to increase the Company’s presence in its present

operating platorm by value additions to both Tea and Rubber

thus creating competitive advantage with increased customerbase. The scenic beauty o the plantations and the Plantation

Bungalows with old world charm will contribute to the latest

venture o the Group in the leisure sector and the tourism

industry.

Crude Oil price inuences natural rubber market on speculation

o a possible substitution between Natural rubber and Synthetic

Rubber. Synthetic Rubber being a product derived rom

petroleum will become more expensive with rising petroleum

products thus creating better demand or natural rubber.

The geopolitical pressure in the oil producing countries and

major tea buying countries may have an eect on demand orRubber and Tea. The anticipated wage hike will pose a threat to

Plantations as a whole, i negotiations take place without the

viability o the industry in mind. Country’s archaic labour laws,

despite being updated early in the year coupled with political

pressures will continue to hinder productivity and eciencies

in the estates i due attention is not given.

Dividends

The Company declared an interim dividend o Rs. 2.50 per share

during the year. Further, a fnal dividend o 50 cents per share

has been proposed subject to approval o the shareholders.

Acknowledgement

The Company’s strong perormance would not have been

possible i not or the commitment, hard work and dedication

o the Workers, Sta, Superintendents, and Senior Management

o the organization. My sincere appreciation is extended to

them. I take this opportunity to thank all stakeholders whose

contribution has made this Company, the success it is today,

including institutions such as Tea Research Institute, Rubber

Research Institute, PHDT, Tea Brokers, Trade Unions, The

Planters’ Association, Employer’s Federation o Sri Lanka and

the Treasury.

I wish to convey my sincere gratitude to my ellow Board

Members who contributed throughout the year and their

continued support whilst welcoming Dr. Jerry Jayawardene,

our newest member on Board.

Dr. Sena Yaddehige

Chairman

27 May 2011




Annual Report 2010/11 Kegalle Plantations PLC Annual Report 2010/11 Kegalle Plantations PL

0% 20% 40% 60% 80% 100%

2011

2010

Turnover

As a Percentage

Rubber Tea Coconut Others

Segmental Information

68

19

67

0

10

20

30

40

50

60

70

80

Rubber Tea Coconut Others

Cultivated ExtentAs a Percentage

2011

51

26

23

10

20

30

40

50

60

High Grown Low Grown Medium Grown

Tea Mix

As a Percentage

2011

9

27

50

1410

20

30

40

50

60

Sole Crepe Latex Crepe Centrifuged

Latex

Other

Rubber Mix

As a Percentage

2011

47%

30%

3%

20%

Segmental Assets

As a Percentage

Rubber

Tea

Other Crops

Unallocated

4

6

3

5

10

12

26

29

39

30

10

8

8

11

0% 20% 40% 60% 80% 100%

2011

2010

Utilization of ResourcesAs a Percentage

Land Leased Assets

Tangible Assets Plantations

Investments Stocks

Receivables & Others





Segmental Information Contd….

TEA PRODUCTION - kg ‘000 Elevation 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Uva 1,567 1,524 1,865 1,715 1,391 1,340 1,109 1,428

Medium 643 724 696 620 571 496 634 630

Low 822 761 858 789 834 653 736 715

NSA - Rs./kg Elevation 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Uva 126.30 154.20 151.63 180.30 244.34 234.79 324.06 307.23

Medium 152.25 179.99 168.09 205.59 297.08 288.82 361.08 341.69

Low 155.49 184.93 184.73 200.97 302.74 288.27 368.73 356.75 COP - Rs./kg Elevation 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Uva 133.78 163.59 151.10 170.35 225.35 236.13 316.82 289.30

Medium 121.12 146.89 153.35 175.26 224.94 245.74 287.61 285.17

Low 132.61 156.83 161.02 175.15 244.46 254.60 302.14 303.27 YIELD - kg/ha Elevation 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Uva 1,297 1,179 1,410 1,287 1,191 1,178 952 1,126

Medium 1,891 1,874 1,948 1,628 1,649 1,341 1,413 1,573

Low 1,387 1,326 1,372 1,199 1,327 1,133 1,255 1,396 REVENUE EXTENT - ha Elevation 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Uva 977.42 1,000.04 992.04 975.87 972.37 974.36 972.19 956.04

Medium 191.69 189.69 191.69 190.69 188.69 188.69 188.69 183.69

Low 178.83 183.23 186.13 182.23 172.83 160.93 156.58 148.58 RUBBER

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Production - kg ‘000 5,736 5,486 5,688 5,375 5,436 5,102 4,578 4,082

NSA - Rs./kg 113.22 137.74 163.65 225.00 245.66 237.25 279.12 481.15

COP - Rs./kg 76.65 88.56 102.01 126.75 143.01 152.71 177.47 207.24

Yield - kg/ha 1,020 1,021 1,021 984 1,021 1,013 976 936

Revenue Extent - ha 4,231 4,285 4,292 4,280 4,300 4,178 3,971 3,798






Employment Strength Workers Clerical & Technical Executives Total

2010 7,171 393 47 7,611

2011 6,913 406 47 7,3662011 6,913 406 47 7,366

Our Estates

Estate Planting Cultivated Area ( ha ) Total Annual Production Factory Details No. of

District Rubber Tea Coconut Others Total Area Rubber Tea Crop Rated Workers

( ha ) Manfd. kg’000/pa

Allagolla Badulla - 175.78 - 38.61 214.39 243.75 - 209 - - 307

Ambadeniya Kegalle 432.85 2.86 20.60 11.79 468.10 583.25 361 - - - 343

Atale Kegalle 796.46 - 32.16 11.16 838.78 1,150.36 477 - Rubber 950 841

Doteloya Kegalle - 192.10 - 121.17 313.27 572.64 - 629 Tea 660 414

Eadella Kurunegala 349.22 - 335.59 10.00 694.81 801.79 349 - - - 332

Etana Kegalle 373.80 - 1.82 11.21 386.83 483.26 306 - Rubber 228 320

Gampaha Badulla - 213.84 - 62.85 276.69 348.99 - 303 Tea 800 386

Hathbawa Kegalle 261.31 - - 5.00 266.31 477.79 181 - - - 199

Higgoda Kegalle 222.00 - - 0.80 222.80 302.23 155 - - - 162Kirklees Badulla - 246.66 - 92.61 339.27 480.70 - 407 Tea 630 414

Luckyland Badulla - 375.85 - 70.20 446.05 488.75 - 510 Tea 850 789

Madeniya Kegalle 439.13 - - 14.19 453.32 551.92 256 - - 332

Pallegama Kegalle 642.47 - 1.88 3.33 647.68 863.91 421 Rubber 800 557

Parambe Kegalle 472.49 33.02 - 2.52 508.03 795.41 351 32 Rubber 636 450

Udapola Kurunegala 357.15 - 37.36 2.73 397.24 577.78 277 - - - 174

Weniwella Kegalle 498.58 - 13.19 23.20 534.97 709.90 370 - - - 400

Yataderiya Kegalle 137.38 121.20 25.90 7.35 291.83 324.30 63 684 Tea 1,161 438

Udapola CLP Kurunegala - - - - - - 515 - Rubber 5,000 55

4,981.84 1,361.31 468.50 488.72 7,300.37 9,756.73 4,082 2,773 - - 6,913

Rubber 4,981.84

51%

Tea 1,361.31

14%

Coconut 468.50

5%

Other Crops464.23

5%

Uncultivated

2,456.36 25%

TOTAL EXTENT 9,756.73 ha.

Forestry 24.490%

Our Estates - Land Base / UtillisationOur Estates - Locations

Employment Strength

Rubber

Tea




Kegalle Plantations PLC Annual Report 2010/11Kegalle Plantations PLC Annual Report 2010/11

Our People

Name o the Postal Name o the Name o the

Estate Address Superintendent Asst. Superintendent

Allagolla Udapussellawa Mr. Vinoda de Silva -

Ambadeniya Aranayake Mr. A S de Wijethunge Mr. B P Waidyatilleke

Atale Atale Mr. G L D Amarathunge Mr. D L S M Peiris

Mr. S M Cooray

Doteloya Dolosbage Mr. L M C Priyashantha Mr. Buddika Kodagoda

Eadella Polgahawela Mr. A C S Munaweera Mr. D S R Jayasinghe

Mr. C A Jayaratne

Etana Warakapola Mr. S D Munasinghe -

Gampaha Udapussellawa Mr. D V M De Runn Mr. B P D Mahesh

Hathbawe Rambukkana Mr. M W Liyanasekera -

Higgoda Undugoda Mr. H S B Aluvihare -

Kirklees Udapussellawa Mr. S R Aluwihare Mr. W M T C Wedisinghe

Luckyland Udapussellawa Mr. I S Doranegama Mr. P D D S GunawardhanaMr. V S Athauda

Madeniya Warakapola Mr. U D Liyanage -

Pallegama Niyadurupola Mr. B M J A Moonamale Mr. U M U L P Udagedara

Mr. D W Gunawardena

Parambe Undugoda Mr. S A A P Jayathilake Mr. N A M O M Navaratne

Udapola Polgahawela Mr. N B Ranathunge Mr. M R Vaidyakularatne

Centriuged Latex Polgahawela Mr. N B Ranathunge Mr. C N Wickremasinghe

Project - Udapola (Quality Control Ocer)

Weniwella Alawwa Mr. V C Hewage Mr. D A Kurukulasooriya

Yataderiya Undugoda Mr. U K Wanniarachchi Mr. G M B Samaranayake

Middle Management

Head Oce Nawinna Mr. M J Fajr Deen

Maharagama Mr. E S D D Perera

Mr. U P Jayasinghe

Mrs. Maleeha Amit

Mr. E Ranjan

Mr. S Katugaha





3URÀOHRI'LUHFWRUV

Dr. Sena Yaddehige

Chairman

Mr. J H P Ratnayeke

Deputy Chairman

Dr. Sena Yaddehige is a Sri Lankan born British Scientist/Engineer and a UK based industrialist.He is the Managing Director o an European Company, which is a part o a group involved in the

development o high technology, automated manuacturing, and export o automotive components

and systems to Europe, China and the United States. He holds a large number o worldwide patents

on radiation processing, contactless sensors and drive by wire systems along with a Sri Lankan patent

or slow release ertilizer.

He is the Founder, Chairman and Director o numerous Companies in Sri Lanka and abroad.

Dr. Yaddehige is the Chairman o the Richard Pieris Group o Companies comprising 5 Listed

Companies and almost over 45 companies wholly or majority owned by Richard Pieris and Company

PLC. He was appointed to the Board o Directors o National Development Bank PLC in December

2007 and was in the directorate until his resignation rom the Bank in November 2010.

Dr. Yaddehige was conerred with Doctor o Science (D.Sc.) in consideration o his original research

work in the felds o Radiation, Radiation processing, Electromechanical Sensor technology, noncontact sensor technology and automotive pedal systems a long with numerous patents in the above

felds.

Mr. Paul Ratnayeke is a Senior Corporate Lawyer who is also the precedent partner o Paul Ratnayeke

Associates, a leading law frm in Sri Lanka which he ounded in 1987 handling all areas o law and

international legal consultancy work.

Mr. Ratnayeke is a Solicitor o England and Wales and an Attorney-at-Law o the Supreme Court o Sri

Lanka. He holds a bachelors degree in law with honours and has been awarded a Masters Degree in

Law by the University o London.

Currently Mr. Ratnayeke holds directorships in several Companies o which 8 are public quoted

Companies. He has also been elected/appointed as Chairman/Deputy Chairman to several o these

Companies.

At Paul Ratnayeke Associates, he specializes in corporate and commercial areas o law including

mergers and acquisitions, aviation, insurance and maritime law.

Mr. Sunil Poholiyadde has over 35 years experience in the Plantation Industry, commencing his career

as an Assistant Superintendent. He has been a Senior Superintendent and joined the corporate

management o Kegalle Plantations PLC in 1997 and holds the position o Chie Executive Ocer

since 2009. He also took over the position o Chie Executive Ocer o Namunukula Plantations

PLC with eect rom July 2010. He is a Director o the Boards o Kegalle Plantations, Namunukula

Plantations, Richard Pieris Natural Foams Ltd, Exotic Horticulture Ltd and AEN Oil Palm Processing

(Pvt) Ltd. In addition, he is a member o the Board o Directors o the Rubber Research Board, Wages

Board or the Rubber Growing and Manuacturing Trade, Advisory Committee on Rubber and Plastic

o the Sri Lanka Export Development Board and holds the position o Vice Chairman o the Colombo

Rubber Traders’ Association since 2007.

Mr. S S Poholiyadde

Chie Executive Ocer




Kegalle Plantations PLCAnnual Report 2010/11

3URÀOHRI'LUHFWRUV&RQWG«

Dr. S S B D G Jayawardena obtained his B.Sc. Degree on Agriculture with Honours rom University o

Ceylon. His M.Sc. on Agronomy was obtained in Kyoto, and his Ph.D. on Agronomy & Physiology rom

University o Kyoto.

Dr. Jayawardena is the Chairman o the Tea Research Board and a member o the Governing Boards

o Sri Lanka Tea Board, Tea Small Holdings Development authority, Tea Shakthi. In addition, he is amember o the National Salaries & Cadre Commission o the Government, the National Science

Foundation National Committee and the Advisory Committee on Plantation Industry appointed by the

Honorable Minister o Plantation Industries. In August 2010 he was appointed as a Director to the Board

o Directors o Kegalle Plantations PLC.

He has joined the Department o Agriculture as a Research Ocer in 1968 and was promoted as

the Deputy Director (Research) in 1997. Director General o Agriculture, Director, Tea Research

Institute, Chairman, Coconut Research Institute, Advisor to the Honorable Minister o Plantation

Industries, Advisor to the Honorable Minister o Agriculture, Chairman, National Institute o Plantation

Management, Chairman, Tea Research Board in 2006.

In addition to the above, Dr. Jayawardena was the FAO Consultant to the Consultative Group in

International Agriculture Research on Bio-diversity and JICA Consultant to the Government o Ghana

on Horticulture Sector Development.

He has over 40 years proessional experience covering agricultural research and development

activities, human resource development, development o oreign unded projects, direct involvement

in ood security and poverty, alleviation programs o the country. He has more than 100 co-authored

publications.

He has participated in more than 75 International Conerences related to agriculture, development,

research management, ood security, bio-diversity, environmental etc., in many countries in the world.

Prof. R C W M R A Nugawela

Director

Dr. S S B D G Jayawardena

Director

Pro. Nugawela joined the Rubber Research Institute in the capacity o an Assistant Botanist in 1980. Hewas awarded a Colombo Plan Scholarship in 1981 to read or his Masters Degree and in 1982 he suc-

cessully completed it in the ield o Applied Plant Sciences at the University o London. He has extensive

experience over 31 years in the capacities o a Botanist, Head o Plant Science Department, Deputy Direc-

tor Research (Biology) and as a Director in Rubber Research Institute. In January 2011, Pro. Nugawela

resigned rom the post o Director o Rubber Research Institute to assume duties as a Proessor in the

Department o Plantation Management, Wayamba University o Sri Lanka.

In 1985 he was oered a scholarship by the Food and Agricultural Organization o the United Nations to

obtain his proessional qualiications. For his research work on Plant Physiology and Bio Productivity in

Hevea brasiliensis (the natural rubber plant) he was awarded a PhD rom the University o Essex, UK in 1989.

His thrust areas o research and development were on nursery and planting practices, exploitation, use

o yield stimulants and rain guards. He has more than 120 publications in both local and oreign research

journals and has addressed many local and international conerences on natural rubber.

Pro. Nugawela was appointed to the Board o Kegalle Plantations PLC with eect rom 26 May 2008.





Sustainability Report

ustainability can be reerred to as, taking the long-term view o how our actions aect uture generations and

making sure we don’t deplete natural resources, or cause pollution at rates aster than the earth is able to renew

them. Kegalle Plantations PLC recognized that living sustainably is subsisting within the means o the natural

The Company continued to maintain its responsibility towards

the welare o all stakeholders, irrespective o boundaries

in our areas o operation. We believe that establishing and

adhering to priorities, Corporate Social Responsibility should

be extended towards our employees, shareholders, customers

and communities in which we operate.

Social Equity

Economy

Environment

Sustainability

Reporting

Kegalle Plantations PLC

Estate Skill Development - Employees

The Company continued training o Workers, Sta and

Executives on productivity, quality manuacture and

agricultural practices, leadership, teamwork, career growth and

development.

The Company provided in-house training on Inormation

Technology to Sta Members. All estate sta who are involved

in Accounting were trained specifcally on the in-house built

computer package at several regions o the Plantation.

Training Session to employees at Atale Estate by “Social Dialogue & Work Place Co-operation Unit” o Department o Labour, Colombo 05.

Ssystems that belong to nature and developing and meeting up the needs o the present without compromising the ability

o uture generations to meet their needs. Company also believes that, as a corporate entity, owes the community and its

stakeholders, assurance on how this eorts have benefted them. In Sustainability Reporting we capture how the Company

endeavored to match human well-being and nature together with our responsibility to our stakeholders.





Sustainability Report Contd….

Community Development

As a measure o assistance to the Government, in their Village

expansion programs, an extent o 25 Acres o land was released

rom Hathbawe Estate. In addition, clearing o surroundings

and renovation o wards are undertaken annually at the

Government Hospitals.

Health and Welare

Anti Natal & Post Natal Clinic programs were conducted with

the assistance o the Plantation Human Development Trust

together with the sta attached to the Health and Welare

Division o our estates. Activities in the development o worker

housing, medical care, welare and crèche activities were also

carried out with the assistance o the PHDT with a view to uplit

the housing, childcare, health, and sanitation levels in our

estates.

Health camps were also organised on estates in collaboration

with the PHI o area, Health Department, MOH Ocials and

various other organisations paying much attention to health

o the workers, specially maternal & child health. The Health

Development Sta in the estates with the assistance o

Plantation Human Development Trust make concerted eort

in conducting these camps to be o use to all concerned.

The assistance given to the workers/sta towards medical

acilities, welare activities, cultural and religious unctions,

sports etc during the year included providing necessary goods/

materials and technical inputs.

Some o these Health camps conducted were on the ollowingsubjects:-

Awareness Programmes on HIV, AIDS

Diabetic

Oral Cancer

Dental Clinic

Blood Donation

Eye Clinics providing spectacles

Anti Natal/Poly clinics to pregnant mothers

Health Camp at Doteloya Estate

Celebration o Annual Samikumbudu Festival at Luckyland Estate with the

presence o DGM Administration o the Company

Maintaining a Community Hospital at Kirklees Estate

Alms Giving Ceremony at Luckyland Estate






Child Development and Welare

Child Care Centres were maintained to provide better care

and maintenance or workers’ and on some estates the Village

children. Mid-day meals and/or Milk, “Kola Kenda” are provided

in most o our estates.

Children’s Day and various other programs were conducted in

some o our estates organized by sta welare societies o the

estates participated by the children o the resident workers and

in some instances, children o the villagers.

To educate the workers and employees on child rights and the

parents’ responsibility, estates conducted programs with the

assistance o the Divisional Secretary o the area.

The sta and workers o the estates participate in ‘Shramadana’

campaigns in cleaning and repairing village roads, cleaning o

wards o the government hospitals and donating unds, goods

etc.

Identifed and rewarded the best rubber harvesters

Employment Opportunities

As a policy o the Company, whenever an employment

opportunity arises both in Estates and Head Oce, priority

is given to children o the existing employees beore outside

recruitments are made.

Sports Activities

The annual Inter-estate Volley Ball and Cricket tournaments

were conducted, with the participation o the workers and sta

o estates.

Assistance or Higher Studies

The Company continues to assist the children o the employees

who pursue higher studies in the national universities. A

fxed monthly scholarship is awarded to all the benefciaries

throughout the period o their higher education. Several

children have been benefted by this scheme and those who

have completed their studies are gainully employed at present.

Co-operative movements

The Estate Workers Co-operative Societies with the enrolment

o the workers in the Society continues to unction. The workersenjoy the acility o obtaining goods and equipment on easy

payment schemes through Co-operative Society. In addition

various types o fnancial assistance including short-term

loans as distress and housing loan etc. with minimum security

requirement are given.

Doteloya and Eadella Estate Celebrations o Pre-School Children

Employee Saety

All the actories in the estates and other work places are

equipped with necessary implements to maintain the

saety standards required. Educational programs have been

conducted to enlighten the employees o the need to take

precautionary measures and to become more aware o the

various issues relating to the saety o the work place.






Forestry Management

The Company’s orest management plans ormulated or

the sustainable management o orest plantation blocks and

harvestable timber extents on estates continued to be in orce.

Guidelines have been issued to the Superintendents pertaining

to the selection o land, species, cultivation practices and the

need to preserve the environment, having in mind the need to

protect the environment. Planting o dendroid thermal orestry

on very steep or inaccessible land have been prohibited. As

a Company that is engaged in Plantation Agriculture, we

are deeply involved in orestry conservation. The Company

manages rubber plantations in an extent o 5,400 ha; itsel are inact a orest cover. Rivers and stream banks are in conservation

orestry in perpetuity. The same principle applies to sources o

water or industrial and domestic purposes. We are conscious

o the importance o preventing accidental or deliberate orest;

frst and extreme vigilance is being exercised.

Harvesting o Timber

All operations including elling, clearing, extraction &

transportation o timber is undertaken in conormity to

the environmental standards stipulated under the National

Environmental Act with all precautionary measures planned out

to minimize soil erosion and runo uctuation o the ground

water table. It is also mandatory on the part o the Company

to replant the harvested extents almost immediately during

the succeeding monsoon, in addition to the establishment o

conservation orest extents in vulnerable areas. All operations

including elling, clearing, extraction & transportation o timber

Kegalle’s eorts in “Protecting the Environment”

Forest Stewardship

Council Certifcation

ISO 9001:2008 Certifcation

Dotelo ya Estate

K irklees Estate





is undertaken in conormity to the environmental standardsstipulated under the National Environmental Act with all

precautionary measures planned out to minimize soil erosion

and runo uctuation o the ground water table.

The Inter-Ministerial Committee under the patronage o the

Minister o Plantation Industry together with the Conservator

o Forests regulates all orms o tree harvesting on estates. Clear

elling o trees in extents exceeding 2 ha, elling o wind belts or

any orm o elling o trees in catchments areas or in lands with

high gradients are totally avoided.

Soil Conservation

Soil conservation methods, such as prolieration o leguminous

cover crops, terracing including “live terraces” and draining

have been undertaken in all extents replanted and in other

areas on an annual basis.

Environment Protection - Treatment o Euent

We have commissioned Euent Treatment Plants in our rubber

actories to treat the toxic waste beore it leaves our estates

boundaries. The operating cost o these treatment plants

amounts to an average o over Rs 1/- per kg rubber produced.


U d a pol a C LP F a c t or y

At a l e E s t a t e

Euent Treatment Plant or a Friendly Environment

Trucco Energy Ecient Heater at Kirklees Estate to bring down uel

consumption substantially by way o higher thermal and optimum heat transer

Energy Eciency

It is widely known that power generation leads to

environmental pollution. Hence our commitment or energy

ecient machinery reduces this environmental threat.





Achievements

uman component in an organization is considered themost important resource to that entity. When employed,

how employees’ perormance is monitored, evaluated

them to achieve the goal o the Company as well as theirs. Duringthe year, Kegalle Plantations had many instances, whereby the

top perorming employees were recognized and rewarded.

Richard Pieris Plantations honours

“Exceptional People – Traditional Champions”

Following are the award winners or Kegalle Plantations PLC

1) Lowest Waste Tea Sector – Luckyland Estate - Mr Saman Doranegama

Rubber Sector - Parambe Estate - Mr Asanka Jayathilake

2) Lowest COP Tea Sector – Yataderiya Estate - Mr UK Wanniarachchi

3) Manuacturing Eiciency Rubber – Pallegama Estate - Mr BMJA Moonamale

4) Elevational Average Tea Sector – Gampaha Estate - Mr D V M De Runn

Rubber – Atale Estate - Mr A C Bertus

Special Award - Centriuged Latex Project - Udapola Estate - Mr NB Ranathunge

5) Labour Eiciency Madeniya Estate - Mr UD Liyanage

6) Agricultural Practices Tea Sector – Doteloya Estate - Mr LM Chandana Priyashantha

Rubber Sector – Eadella Estate - Mr Lakshman Amarathunge

7) Total Proitability Doteloya Estate - Mr LM Chandana Priyashantha

8) Best Cash Flow Improvement Yataderiya Estate - Mr UK Wanniarachchi

9) Overall Best Contribution Second Runner-up –Eadella Estate - Mr Lakshman Amarathunge

Overall Best Contribution

2nd Runner-up

Mr. Lakshman Amarathunge,

Former Superintendent

Eadelle Estate o Kegalle

Plantations PLC

Hand rewarded, plays a pivotal role in motivation to encourage





Achievements Contd….

Annual Report Awards 2010

The Institute o Chartered Accountants o Sri Lanka

Kegalle Plantations PLC was able to obtain awards o excellence

in the presentation o Annual Reports, conrred by the the

Institute o Chartered Accountants since 1997 and are pleased

to report that the Bronze Award has been awarded to our Annual

Report or the year 2010 in the Plantations Sector category. ANNUAL RUGBY SEVENS

BOWL CHAMPIONSHIP - MARCH 2011

Kegalle Plantations Rugby Team emerged victors in the Bowl

Championship o the Annual Rugby Sevens which was organized

by Dickoya & Maskeliya Cricket Club at Dickoya in March 2011.

Annual Report Award 2010 - Plantations Sector - Bronze Award

– The Institute o Chartered Accountants o Sri Lanka

Mr. S S Poholiyadde, Chie Executive Ocer o Kegalle Plantations PLC,

receiving the Bronze Award rom Vice President o ICASL

Mr. S Rajapakse (FCA).

Rugby Team – Kegalle Plantations PLC

Best Contribution - Total Proftability Mr. Chandana Priyashantha, theSuperintendent o Doteloya Estate





Financial Review

he Financial Review discusses an overview o theCompany’s Financial Perormance reected in the

Financial Statements o the Company, which orms

a part o this Annual Report, setting out the fnancial

perormance and the fnancial position o the Company.

Revenue

The Turnover o the Company was Rs 2.99 Bn, an increase o

35% compared to the Turnover o Rs. 2.22 Bn recorded in the

previous year. Turnover contribution o both rubber and tea

increased by 54% & 5% compared to the previous season

respectively.

Proftability

The Gross Proft (GP) Margin or rubber increased rom 29%

to 53% compared to last year whilst the GP margin or tea

remained at 4%, same as last year. Gross Proft or Rubber

achieved 3 times more than the last season.

Total revenue contribution rom Rubber, Tea and Coconut was

65.65%, 30.39% and 1.25% respectively. 2.73% o the Revenue

was rom Other crops and Sale o old Rubber Trees.

RUBBER

The Company produced 4,082 Mt o Rubber and generated a

Revenue o Rs. 1.96 Mn or the year. Gross Proft rom Rubber

was Rs. 1,033 Mn, an increase o almost 3 times in comparison

to that o the previous year. Rubber Production details have

been explained in the Operational Review on Page 24 o this

Report.

TEA

Total revenue generated rom Tea was Rs. 909 Mn arriving

at a Gross Proft o Rs. 40 Mn or the year under review. Total

production was 2.77 Mn kg out o which 43% or 1,199 Mn kg o

made tea was rom Bought Lea operations.

Accordingly, The fnancial perormance o the Company was

exceptional or the year with Proft Ater Tax o Rs. 883 Mn (2010

- Rs. 376 Mn) reecting a growth o 135% compared to the last

fnancial year and also the highest ever proft recorded in the

history o the Company.

Financial Position

The Balance Sheet o the Company has been urther

strengthened during the fnancial year under review. Non

current assets and current assets increased by Rs. 118 Mn

and Rs. 672 Mn respectively. The Company spent Rs. 200 Mn

on capital expenditure. As at the Balance Sheet date the

Company’s long term and short term borrowings decreased by

8% to Rs. 371 Mn rom Rs. 405 Mn rom the previous year.

1002003004005006007008009001,000

500

1,000

1,500

2,000

2,500

3,000

3,500

07 08 09 10 11

P A T - R s . ' 0 0 0

T u r n o v e r - R s . ' 0 0 0

Year

Turnover Vs. Profir After Tax

Turnover Profit After Tax

0%

10%

20%

30%

40%

50%

60%

2008 2009 2010 2011

Gross Profit Margin

In Percentage

Rubber Tea

(500)

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2008 2009 2010 2011

Total Assets & Borrowings

In Rupees Million

Total Assets

Net Borrowings

T





1 , 3

6 1

1 , 7

9 8

8 2 2

1 , 5

8 0

5 , 5

5 9

1,000

2,000

3,000

4,000

5,000

6,000

07 08 09 10 11Year

Enterprise ValueRs. / Mn.

Earnings Per Share

Basic Earnings per share increased to Rs. 35.33 against Rs. 15.04

and was due to 135% increase in profts over last year.

Net Assets Per Share

Net assets per share at the end o the year was Rs. 97.76, an

increase o Rs. 29.83 per share compared to the previous year.

Financial Review Contd….

Cash Flows

The cash generated rom operations amounted to Rs. 1,008 Mn

as against a Rs. 618 Mn in the previous year. Interest, Dividend

and Income tax payments during the year amounted to Rs. 51

Mn, Rs. 137 Mn and Rs. 29.5 Mn respectively.

Payments relating to the lease rental amounted to Rs. 67.4

Mn. The resultant surplus o Rs. 531 Mn was used to reduce

overdrats and to gain rom short term investments.

Return on Capital Employed

Return on Capital Employed was 32.58% (2010 - 18.95%) which

is a 14% additional return over previous year.

Market Capitalisation

The Company’s Market Capitalization as at 31 March 2011

stands at Rs. 5.2 Bn as against Rs. 1.2 Bn as o 31 March 2010.

During the year under review the share o the Company traded

in the range o Rs. 47.50 to Rs. 280.00.

200 400 600 800 1,000 1,200

Inflow 2010

Inflow 2011

Outflow 2010

Outflow 2011

Cash FlowIn Rupees Million

Inflow Outflow

Inflows from Operations Capital Expenditure & Investments

Proceeds from Loan Loan Repayment/Rentals/Finance Cost

Other Receipts Other

1 , 8

1 9

2 , 1

6 3

1 , 9

2 8

2 , 2

1 6

2 , 9

9 2942

1,2201,347

1,698

2,444

500

1,000

1,500

2,000

2,500

3,000

500

1,000

1,500

2,000

2,500

3,000

3,500

07 08 09 10 11Year

Turnover Vs. Shareholders' Fund

Turnover - Rs.Mn. Shareholders' Fund - Rs.Mn.

1 2 . 4 5

1 7 . 1 0

7 . 1 0

1 5 . 0 4

3 5 . 3 3

5

10

15

20

25

30

35

40

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

Earning per share

Rs. 35.33 (2010 - Rs. 15.04)

1 ,

8 1 9

2 ,

1 6 3

1 ,

9 2 8

2 ,

2 1 6

2 , 9

9 2 394

482

351

410

1,032

200

400

600

800

1,000

1,200

-

500

1,000

1,500

2,000

2,500

3,000

3,500

07 08 09 10 11

Year

Turnover Vs. EBIT

Turnover - Rs.Mn. EBIT - Rs.Mn.





QUARTERLY PERFORMANCE AT A GLANCE

Finacial Year 2010/11

Rs. ‘000 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER TOTAL

Revenue 630,602 743,620 716,578 900,962 2,991,762

GP 167,569 283,473 299,875 422,853 1,173,770

PBI & T 150,336 244,916 259,963 376,378 1,031,593

PBT 134,787 228,514 239,520 314,302 917,123

PAT 130,890 219,886 232,200 300,151 883,127

EPS 5.24 8.80 9.29 12.01 35.33

Last Traded MP/Share 80.75 168.40 161.80 207.50 207.50

Financial Review Contd….

-

0.60

1.20

1.80

2.40

3.00

3.60

4.20

4.80

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Estate Crop

In Million Kilogramms

Rubber Tea

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2007 2008 2009 2010 2011

Turnover & Cost of Sales

In Rupees Million

Turnover Cost of Sales

-

10

20

30

40

50

60

70

80

Field Dev. Factory Mod. Equipment Social Other

Capital Expenditure

In Percentage

2010 2011

2 7 9

5 5 2

3 5 4

5 2 8

8 9 4

-100

200

300

400

500

600

700

800

900

1,000

07 08 09 10 11

Year

Operational Cash Flow

Rs.'000

3 1 1

2 9 8

3 4 8

4 0 5

3 7 1

70

4660

66

117

-

20

40

60

80

100

120

140

-

100

200

300

400

500

07 08 09 10 11

Year

Finance Cost - Rs.Mn.

Total Debt Vs. Finance Cost

Total Debt - Rs.Mn.

50

100

150

07 08 09 10 11

V a l u e - R s . / M n .

Finance Cost Vs. Interest Income

Finance Cost Interest Income





- 200 400 600 800 1,000

2007

2008

2009

2010

2011

Profit Before Tax - Rs. Mn.

Profit Before Tax

Review of Operations

e have pleasure in reporting that the Company wasable to increase both its productivity and proftability

with an all-time record proft margin. Our perormance

in the stock market saw an all-time high per share price o

Rs. 285.00, an increase o 5.5 times in comparison to the

previous year.

Revenue

Starting rom a somewhat bleak phase, tea prices declined in

the frst hal o the year under review and gradually increased

in the second hal. In contrast, the prices or rubber remained

steady and healthy throughout the year. The Company

continued to establish its direct export market by trading Sole

crepe rubber to world amous manuacturers o Clarks Shoes

Company where attractive prices linked to RSS were etched. The Company also monitored the Grade Mix o Rubber to suit

the demand in the market with its exible manuacturing

capability.

The proft recorded or the year ater tax is Rs. 883 Mn where

the growth rate is over 135% compared to last year. Gross

Profts generated rom Rubber, Tea, Coconut and other Crops

recorded healthy margins amounting to Rs. 1.17 Bn.

Kegalle Plantations earned Rs. 80 Mn rom Sale o Rubber trees

and Rs. 74 Mn as income derived rom interest.

Forest Management Certifcate was obtained or 7 Rubber

Estates and Ethical Tea Partnership was awarded to Doteloya

Estate or tea manuacture.

The Company is in the process o obtaining ISO 22000

certifcation or all fve tea manuacturing actories and will be

completed by May 2011.

Rubber

Production

The climate patterns experienced were not conventional but

peculiar. The erotic pattern o rain with heavy downpours,

common to all over the country, interrupted the production

during peak production periods. The rainall recorded during

the period under review was 4,588 mm experienced in 181

days as against the decennial average o 3,211 mm in 149

days. However, the Company has maintained its position

as the largest natural rubber producer o the Country with

a production o 4,082 MT during the year, which is a drop o

around 11% against last fnancial year. Revenue bearing extent

was reduced by 172 ha compared to last season.

50.00

100.00

150.00

200.00

250.00

300.00

2006/07 2007/08 2008/09 2009/10 2010/111

Share Price

880

900

920

940

960

980

1,000

1,020

1,040

1,000

2,000

3,000

4,000

5,000

6,000

07 08 09 10 11 Y i e l d K g / H e c t a r e

C r o p - K g . ' 0 0 0

Year

Crop Vs. Yield

Rubber

Crop Yield

-

50.00

100.00

150.00

200.00

250.00

300.00

A p r - 1 0

M a y - 1 0

J u n - 1 0

J u l - 1 0

A u g - 1 0

S e p - 1 0

O c t - 1 0

N o v - 1 0

D e c - 1 0

J a n - 1 1

M a r - 1 1

Share Price

W





157.49210.35

247.07 236.78

360.38

543.86

162.68

254.91 243.34 244.43

341.53

594.75

100

200

300

400

500

600

700

05/06 06/07 07/08 08/09 09/10 10/11

Colombo Auction Averages - Rubber

In Rupees per kg

RSS1 LC-1X

Review of Operations Contd….

Small Holder Latex

Small Holders experienced the eect on similar weather

patterns, which in turn inuenced their preerence to sell

processed sheet rubber instead o feld liquid latex since

processed product yielded higher prices. This situation also

made rubber manuacturers to ace sti competition to

purchase feld latex rom the Small Holders. Nevertheless, the

Company was able to collect a quantity o only 526,000 kg rom

the Small Holders, at competitive prices.

Cost o Production

The Cost o Production o estates increased by 9% compared

to last season. The larger extents ertilized during the year,

increase in prices o chemicals and other material are the

main reasons or increase in the COP. Further, 4,055 hectares o

rubber were ertilized during the year in comparison to 2,249

hectares in the previous year.

Product Mix

The product mix or the period under review is given below:

2009/10 2010/11

Centriuged Latex 57% 50%

Latex Crepe 19% 27%

Sole Crepe 9% 9%

Skim & Scrap 15% 14%

Market Outlook

The market trend or processed rubber remained steady and

healthy throughout the year. Pale Crepe Rubber etched high

prices in the market and the highest price ever o Rs. 700/-

per kg was recorded in the month o February 2011. Kegalle

Plantations was able to etch higher prices or Sole Crepe Rubber

by way o direct export to the World amous manuacturers o

Clarks Shoes Company. The production o Centriuged Latex,

though below last season, remained highest with a share o 50% and was sold through the Brokers and to Messrs. Richard

Pieris Natural Foams Ltd, our long-standing customer.

Parambe Estate obtained top prices in the Auctions on 15

occasions while Atale and Pallegama estates recorded one top

price each.

NSA FOR RUBBER

The Company achieved an overall Net Sale Average o Rs.

481.15 per kg or Rubber, which is an increase o 72% over

last season. This is due to the stable market conditions or

rubber throughout the season and also due to the changing o

product/grade mix to suit the Market.

100

200

300

400

500

600

07 08 09 10 11

NSA Vs. COP - Rubber

Rs. / kg.

NSA COP

0.74 0.60 0.83 1.111.28

1.551.93

2.28

2.122.29

4.89

0.88 0.63 1.001.27 1.47

1.602.34

2.242.20 2.33

5.34

0.00

1.00

2.00

3.00

4.00

5.00

6.00

0 0 / 0 1

0 1 / 0 2

0 2 / 0 3

0 3 / 0 4

0 4 / 0 5

0 5 / 0 6

0 6 / 0 7

0 7 / 0 8

0 8 / 0 9

0 9 / 1 0

1 0 / 1

Rubber Market Prices

$/kg

LC 1XRSS 1

0

100

200

300

400

500

600

700

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Colombo Auction Rubber Prices - LC.1X

In Rupees per kg

2011 2010






TEA

The production o tea in Sri Lanka in the year 2010 increasedover 2009 recording 331 Mn kg, an increase o 12% over last

season. The Company’s total tea production was 2,773 Mn kg

o made tea and is equivalent to a 12% increase rom previous

year.

This year too the weather condition in Udapussellawa was

errotic, but despite the act that adverse weather conditions

had an eect on the supply o bought lea, 43% o the total

production consisted o bought lea. In the season 2010/11

Udapussellawa region estates achieved 351,463 kg compared

to 183,511 kg last season.

200

400

600

800

1,000

1,200

1,400

500

1,000

1,500

2,000

2,500

3,000

3,500

07 08 09 10 11

Y i e l d K g / H e c t a r e

C r o p - K g . ' 0 0 0

Year

Crop Vs. Yield

Tea

Crop Yield

NSA FOR TEA

Tea ectched a reasonable good NSA o Rs. 327.64 per kg which

is a 6% drop in comparison to previous year.

TOP PRICES

Gampaha Factory obtained 86 top prices, whilst

Luckyland 35 top prices,

Doteloya 25 top prices,

Kirklees 12 top prices and

Yataderiya 01 top price, during the season under review.

364

313

351

297

350

150

200

250

300

350

400

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

Direct Exports - Rubber

In metric tons

50

100

150

200

250

300

350

400

07 08 09 10 11

NSA Vs. COP - Tea

Rs. / kg.

NSA COP

1.521.48 1.43

1.701.71

1.972.16 2.23 2.41

2.86 2.80

1.37 1.33 1.31

1.561.62

1.70

2.172.34

2.483.03 2.95

1.73 1.68 1.671.88 1.98

1.97

2.74

2.953.29

3.52 3.56

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

Tea Market Prices$/kg

High Medium Low

0

100

200

300

400

500

600

700


Colombo Auction Rubber Prices - RSS1

In Rupees per kg

2011 2010





100

200

300

400

500


ColomboAuction Tea Price

In Rupees per kg

2010/11 2009/10


COCONUT

Company produced 1.4 Mn nuts during the year, which is a 10%

drop in production rom last year. Average price etched during

the year was Rs. 26.45 per nut, a 47% increase rom previous

year’s Rs. 17.99 per nut. This resulted in a proft o Rs. 17.9 Mn in

comparison to Rs. 9.5 Mn in the last year.

Factory Development

This year too extensive actory development to oors and roos

was undertaken during the period. Flooring has improved

the hygienic conditions o the actory and as a result has

improved the end product. Further, Doteloya actory capacity

was increased to 18,000 kg by building a new lot with fve new

troughs to increase bought lea intake.

Investments

Replanting o rubber was undertaken in an extent o 147 ha

during the year under review. Company has replanted an

extent o 970 Hectare since the replanting was resumed in year

2004. Subsidy due or Replanting rom the Rubber Cess Fund

has been claimed appropriately.

The Company also increased the crop by installing rain guards

in Atale, Parambe, Madeniya and Udapola Estates at a cost o

Rs. 6.9 Mn during the year.

Euent Treatment Plants commissioned in all our Rubber

Factories were maintained by treating the toxic waste within

the estate boundaries, in keeping with our Environmental

Policy.

Worker Welare

The Company continued to extend fnancial assistance o Rs.

1,500/- per month to each student who qualifed or University

Education and our Children o Workers’ rom Atale and

Pallegama Estates have benefted rom this scheme during the

year.

Estate/Village Integration

An extent o 25 Acres o land was released rom Hathbawe

Estate or village expansion ater obtaining approval rom the

Ministry o Plantation Industries and the Golden Share Holder.

Training & Development

The Company continued training o Workers, Sta and

Executives on productivity, quality manuacture and

agricultural practices, leadership teamwork, career growth and

Development.

1,000

2,000

3,000

4,000

5,000

6,000

200400600800

1,0001,2001,4001,6001,8002,000

07 08 09 10 11

Y i e l d n u t / h a .

C r o p - n u t . ' 0 0 0

Year

Crop Vs.Yield

Coconut

Crop Yield

123

74

74

61

70

107

94

119

166 183

200

0

50

100

150

200

250

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

Capital Expenditure

In Rupees Million

5

10

15

20

25

30

07 08 09 10 11

NSAVs. COP - Coconut

Rs. / nut

NSA COP






The ollowing Programs were undertaken during the periodunder review.

Workers Tapping & other agricultural practices

Plucking & other agricultural practices

Rubber Manuacture & Factory practices

Low Grown tea manuacture

Inter Cropping & Cultivation o export

agriculture Institutional Development

(Leadership Team & Attitude)

Fire Protection

Bud Grating

Personal Hygiene

Sta Leadership Teamwork & Tapping

Managing Occupational Stress

Skill Development

Energy Saving Methods

Fire Protection

Executives Personal Development and Career Growth

Leadership Development Competencies

Forestry Management or SGS Certifcation

58%

39%

1%0% 2%

Revenue Drivers

%

Rubber

Tea

Coconut

Other Crops

Sale of Rubber Trees

2010

66%

30%

1%0% 3%

Revenue Drivers

%

Rubber

Tea

Coconut

Other Crops

Sale of Rubber Trees

2011

Revenue Drivers - Rs. Mn. 2011 2010

Rubber 1,964 1,278

Tea 909 864

Coconut 37 28

Other Crops 1 1

Sale o Rubber Trees 80 45

Total 2,992 2,216







Corporate Governance

oard o Directors is committed to adopt the bestpractices in every sphere o business activity and

complies with the rules listed in the Colombo Stock

Main responsibilities o the Board o Directors are as ollows:

i. Setting the Company’s overall short term and long

term Strategic Goals and Direction and monitor

implementation

ii. Ensuring that a sound and eective internal control

system exists and that all statutory obligations are met.

iii. Approval o the Company’s key matters such as Strategic

Plans, Annual Operating Plans / Budgets and Monitoring

operating and fnancial perormance

iv. Identiy and manage business risks.

v. Succession planning including appointment and training

Senior Management

vi. Appointment and fxing remuneration o the Managing

Agent

vii. Approve the Interim and fnal fnancial statements o the

Company

viii. Sanction all material transactions, contracts, acquisition

or disposal o assets and approve all capital expenditure

The Board collectively decides on the appointment o Directors.

The Directors so appointed retire at the next Annual General

Meeting ollowing their appointments and seek re-election

rom the shareholders along with the other Directors.

The Board o Directors continues to meet every other month or

more requently, i required.

Meetings o the Board o Directors

Five Board Meetings were held during the year. Prior to each

Board Meeting, Directors are provided with all relevantmanagement inormation and background material relevant

to the Agenda to enable inormed decisions. Board Papers

are submitted in advance on Company’s perormance, new

proposals and investments, capital projects and other issues,

which require attention and approval o the Board.

Appoint

SHAREHOLDERS

Board of Directors

CEO

Corporate Management

Management System

(Decision Making,Information Sharing)

Corporate Governance

ExternalAuditors

Compliance, Audit, &

Remuneration

Committees

Appoint

Consults

InternalReporting

System

Audits

Audits

InternalAuditors

Appoints

Advises/Recommendations

BExchange, being a public quoted Company. Kegalle Plantations

PLC is also guided by the principles included in the Code o

Best Practice on Corporate Governance issued jointly by the

Institute o Chartered Accountants o Sri Lanka and Securities

and Exchange Commission o Sri Lanka.

The Board o Directors takes responsibility to maintain highest

standards o Corporate Governance. This Statement describes

the manner in which Kegalle Plantations PLC applied principles

o Corporate Governance practices during the year.

The Board o Directors

The names and a brie profle o the members o the Board are

given under “Profle o Directors” section o this report on Pages

12 & 13.

According to the Directorate the Company has 03 Non

Independent Executive Directors and 02 Independent Non

Executive Directors.

The Directors possess vast experience and expertise in

operating and managing Plantations, marketing agricultural

crops produced by the Company and other relevant subjects

to drive a highly motivated management team to achieve the

Company’s strategic goals. Composition o the Board members

amalgamates a wealth o skills, experience, and diverse

perspectives o the business.

Corporate Governance Structure

The Company’s Governance Framework is depicted in the

ollowing diagram.





Meetings o Management Committee

The Management Committee comprises o the Senior

Managers o the Company. The Chie Executive Ocer o

the Company chairs the Committee which meets every

month and more oten, i necessary. It reviews in detail the

individual perormance o the Estates and the Company as a

whole against the Plan/Budget and makes recommendations

as ound necessary. Management Committee exercises its

authority within the policy ramework established by the Board

o Directors, best practices, and generally accepted norms

inherent to the plantations sector.

Further, all capital expenditure/project proposals etc., are

reviewed by this Committee beore they are recommended

to the Board or approval. No Capital Expenditure is incurred

without the Board approval.

Compliance Statement

Corporate Governance Requirements listed under Section 7 o

the Listing Rules issued by the Colombo Stock Exchange (CSE);

CSE Section Requirement Status o Kegalle

Reerence Plantations PLC

7.10.1 (a) to (c) Non Executive Directors In Compliance

7.10.2 Independent Directors In Compliance

7.10.3 Disclosures relating to Directors In Compliance

7.10.5 Remuneration Committee In Compliance

7.10.6 Audit Committee In Compliance

Strategic Direction and Corporate Structure

The Company strongly pursues the strategic direction identifed

and laid down in its Corporate Plan taking the current business

and political environment into account. The Corporate

Structure enables smooth ow o inormation both upward

and downward and its policy decision approval process.

Employees

All appointments o executive sta are subject to approval by

the Board o Directors. This process entails employment o sta

with high standards o ethics and integrity.

Internal Control

Functions relating to various operations are clearly defned

and ocers are assigned to undertake these unctions in

such a manner so that one single ocer does not carry a

single operation in ull. Procurement o both minor and major

inputs and capital items are executed the Group’s Commercial

Division. Disposal o Sundry/Redundant items, reuse tea etc.,

are all handled by independent Tender Committees set up at

the Head Oce.

Payments to all major suppliers, who provide input materials

and services to the Estates are made rom the Head Oce.

Proceeds rom sale o produce are collected at the Head Oce

through a well streamlined, Auction Prompt Collection method.

Audit Committee

Kegalle Plantations is one o the Group Companies o the

Richard Pieris & Company. Richard Pieris & Company is also the

majority shareholder and as such the Group Audit Committee

acts as the Audit Committee o the Company. Audit Committee

Report on Page 33 to 34 describes the activities carried out

during the Financial Year.

Corporate Governance Contd….

Attendance o the Directors are given below:

Name of Directors Executive Non-Executive Independent No. of

Meeting

Attended

Dr. Sena Yaddehige - - 3

Mr. J H P Ratnayeke - - 3

Mr. S S Poholiyadde - - 5

Mr. R L Kumararatne- Ceased to be a Director w.e.. 08.02.2011 - - - 1

Mr. P D Samarasinghe-Resigned w.e.. 15.02.2011 - - - 5

Mr. L N De S Wijeyeratne-Resigned w.e.. 01.07.2010 - - - 1

Pro. R C W M R A Nugawela - 5

Dr. S S B D G Jayawardena-Appointed w.e.. 16.08.2010 - 3







Internal Audit and Risk Management

The Internal Audit Programme was reviewed by the Committee

to ensure that it covered the major business units o the

Company.

The Chie Internal Auditor was invited to be present at all Audit

Committee deliberations. He presented a summary o the

salient fndings o all internal audits and investigations carried

out by his department or the period. The responses rom the

Chie Executive Ocer o the Company to the internal audit

fndings were reviewed and where necessary corrective action

was recommended and implementation monitored.

Internal Controls

During its meetings, the Committee reviewed the adequacy

and eectiveness o the internal control systems and the

Company’s approach to its exposure to the business and

fnancial risks. Processes are in place to saeguard the assets

o the organisation and to ensure that the fnancial reporting

system can be relied upon in the preparation and presentation

o Financial Statements. A comprehensive Management Report

and Accounts are produced at month end highlighting all key

perormance criteria pertaining to the Kegalle Plantation PLCand its Subsidiary which is reviewed by the Senior Management

on a monthly basis.

Board o Directors review perormance on a quarterly basis or

more oten, i required.

Financial Statements

The Committee reviewed the Company’s Quarterly Financial

Statements, the Annual Report and Accounts or reliability,

consistency and compliance with the Sri Lanka Accounting

Standards and other statutory requirements, including theCompanies Act No 7 o 2007, prior to issuance. It also reviewed

the adequacy o disclosure in published Financial Statements.

External Auditors

The Audit Committee has reviewed the other services provided

by the External Auditors to the Company to ensure their

independence as Auditors has not been compromised.

Report of the Audit Committee

he Audit Committee Charter, approved by the Board o Directors defnes the purpose, authority, composition,

meeting, and responsibilities o the Committee.T The purpose o the Audit Committee is to:

1. Assist the Board o Directors in ulflling its overall

responsibilities or the fnancial reporting process

2. Review the system o internal control and risk

management

3. Monitor the eectiveness o the internal audit unction

4. Review the Company’s process or monitoring

compliance with laws and regulations.

5. Review the independence and perormance o the

external auditors

6. To make recommendations to the board on the

appointment o external auditors and recommend their

remuneration and terms o engagement

The Audit Committee consisted o two independent and Non

Executive Directors o the Richard Peiris & Company PLC, theUltimate Parent Company, namely Pro. Lakshman R. Watawala

and Pro. Susantha Pathirana. The Chairman o the Committee

is a Senior Chartered Accountant. The Company Secretary

unctions as Secretary to the Audit Committee.

The principal activities o the Committee are detailed below.

Meetings

The Audit Committee held our meetings during the year under

review.

The Group Chie Financial Ocer, Group Internal Audit

Manager, Chie Executive Ocer and Chie Financial Ocer

o the Company were invited i deemed necessary or Audit

Committee meetings.

Meetings were held with the external auditors regarding the

scope and the conduct o the annual audits.





The Committee reviewed the Management Letters issued bythe External Auditors, the Management response thereto and

also attended to matters specifcally addressed to them. The

The Audit Committee is satisfed that the control environment

prevailing in the organisation provides reasonable assurance

regarding the reliability o the fnancial reporting o the

Company, the assets are saeguarded and that the Listing Rules

o the Colombo Stock Exchange have been met.

Pro. Lakshman R Watawala

Chairman

27 May 2011

Report of the Audit Committee Contd….

External Auditors kept the Audit Committee inormed on an

ongoing basis o all matters o signifcance. The Committee met

with the Auditors and discussed issues arising rom the audit

and corrective action taken where necessary.

The Audit Committee has recommended to the Board o

Directors that Messrs. Ernst & Young be re-appointed as

Auditors or the fnancial year ending 31 March, 2012 subject

to the approval o the shareholders at the next Annual General

Meeting.

Conclusion





Report of the Remuneration Committee

he Remuneration Committee, o the Ultimate ParentCompany acted as the Remuneration Committee o

Kegalle Plantations PLC.

The Remuneration Committee consists o two independent

Non Executive Directors o Richard Pieris & Company, the

ultimate holding Company, namely Pro. Lakshman R Watawala

and Pro. Susantha Pathirana. The Committee is chaired by

Pro. Lakshman R. Watawala. The Committee met on several

occasions during the fnancial year.

The Remuneration Committee has reviewed and recommended

the ollowing to the Board o Directors:

1. Policy on remuneration o the Executive Sta

2. Specifc remuneration package or the Executive

Directors

In a highly competitive environment attracting and retaininghigh caliber executives is a key challenge. In this context,

the Committee took into account, competition, market

inormation and business perormance in declaring the overall

remuneration policy.

Pro. Lakshman R. Watawala

Chairman

27 May 2011

T





Risk Management

egalle Plantations PLC is exposed to a multitude o risks associated with the cultivation and processing

o Tea and Rubber and the economic environment

Risk Management Process

The Company’s risk management process comprises o risk

assessment, risk minimization, risk monitoring, risk reporting,

and risk evaluation o uncertainty in business decision-making.

The diagram below shows the above steps o risk management

in the overall context o Kegalle Plantations PLC.

Key Risk Areas and Risk Exposure

Financial Risk Management:

Risk Exposure Company Objectives Risk Minimisation Strategies

1. Liquidity O Capitalize on opportunities to O Funding o long term assets through

& Cash raise unds at lowest possible cost. Equity and Long Term Loans.

Management O Maximum utilization o the O Ensure availability and eective

concessionary unding available utilization o short term acilities

to Plantation Companies. where necessary.

O Ensuring proper management o

working capital.

O To ensure a strong liquidity

position.

2. Interest O To minimize adverse eects O Structuring the loan portolio to

Rate Risk o interest rate volatility and combine oreign currency and local.

currency denominated borrowings.

O To ensure cost o borrowing O Eective utilization o hedging

is at the optimum level techniques such as interest rate swaps.

with the assistance o Group Treasury.

O Maximum utilization o the

concessionary unding available to

Plantation Companies.

3. Currency Risk O To minimize risk associated O Export proceeds exceeding the import

with the uctuation in oreign payments and oreign currency debt

currency rates in relation to through various hedging techniques

export proceeds, import

payments and oreign currency

debt transactions.

O Ensuring eective utilization by

coordinating with treasury operations

payments act as a natural hedge.

such as orward bookings, orward

sales, swaps etc.

Risk

Assessment

Risk

Evaluation

Risk

Minimization

Risk

Monitoring

Risk

Reporting

K in which it operates. The Board o Directors thereore places

special emphasis on the management o business risks and

together with the management Committee, ensures that a

sound system o controls including fnancial, operational and

compliance are in place, to saeguard shareholder investment

and assets and reviews regularly the eectiveness o such

controls.





Risk Management Contd….

Business Risk Management:


1. Credit Risk O To minimize risks associated O Obtaining insurance covers or

with debtor deaults. export debtors.

O Work towards obtaining collaterals

rom major local customers with

high outstanding.

O Follow stringent assessment

procedures to ensure credit

worthiness o the customers prior

to the granting o credit.

2. Asset Risk O To minimize risks rom fre, O Obtaining comprehensive insurance

thet and machinery & covers or all tangible assets.

equipment breakdown. O Adoption o stringent procedures with

regard to the moving o assets rom

one location to another.

O Carrying out mandatory preventive

maintenance programs.

O Carrying out requent employee

training programs in areas such as fre

prevention.

3. Internal O To maintain a sound system O Carrying out o system audits and

Controls o internal control to saeguard other control mechanisms such as

shareholders wealth and inventory counts and cash counts

Company’s assets. throughout the estates by the Central

Internal Audit Department o the main

Group.

4. Reputation O To prevent the causes that O Having in place a budgetary process

Risk damages our reputation. & a budgetary control mechanism on a

monthly basis to ensure that the

Company’s perormance is continuously

in line with its targets.

O Adopting stringent quality assurance

policies with regard to raw and packingmaterials bought out rom third parties.

O Ensure quality in manuacturing process

and compliance with the standards.

Work towards obtaining at least

HACCP standard in every actory.

O Ensuring eective communication with

various stakeholders such as

employees, bankers, regulators,

customers, suppliers and the

shareholders.







5. Human O To ensure a smooth ow O Maintaining healthy relationships with

Capital & Labour o operations without any trade unions through regular dialogues.

Risk undue disruptions. O Entering in to collective agreements

with trade unions.

O Ensure compliance with all regulatory

requirements with regard to the

benefts applicable to workers at estates.

O To protect oursel as a human

employer being successul in motivating,

developing, retaining and attracting the

best o human capital. O Improving employee benefts by way o

fnancial incentives and welare activities.

O Arrange in-house and external training

in order to develop the human resources.

6. Technological O To keep pace with the current O The continuous investments in new

Risk technological developments and machineries and experiments on new

saeguard against obsolescence. methods.

O Mechanization o estate unctions up to

the highest possible extent.

O Investing in Research & Development

activities whenever necessary.

O

Implementation o the new computersystem in head oce and the estates.

O Investing in hardware resources.

7. Procurement O To minimize risk associated O Continuous replanting activities o both

Risk with price and availability. tea and rubber.

O Establishing relationships with many

suppliers or latex and bought lea in

order to reduce over-dependency on a

single supplier.

O Entering into orward contracts or

purchases o certain raw material items.

8. InventoryO

To reduce stock obsolescenceO

Adopting a monthly declaration policy.and manage stock holding costs. O Identiying slow moving stocks and

O Reducing the risk associated eectively laying out a channel or these

with thet and shrinkage. to be sold o.

9. Risk o O To maximize our market share O Ensuring high standards o quality in

Competition and maintain leadership in the the eyes o the customer.

respective industries. O Increasing productivity and eciency in

order to ensure an adequate margin

despite increasing wage, energy and

transportation cost.

O Carrying out Research & Development

activities whenever necessary in order

to identiy key areas to be ocused.






10. Capital O To minimise risk o not meeting O Adopting a stringent approval

Investments Risk proft expectations. procedure or Capital expenditure

based on the level o investment and

the expected pay back.

11. Inormation O To minimise risk associated O Maintaining o spare servers mirroring

Systems Risk with security, Hardware o hard disks with critical data.

communication and sotware. O Data back-ups stored in o site

locations.

O Vendor agreements or support service

and maintenance.

O Regular updating o Virus scanners,

Firewalls etc.

O Compliance with statutory

requirements or environmental

preservations.

12.Environmental O To minimise the negative O Ensure compliance with all regulatory

& Political Risk & Regulatory Risk external impact rom changes in the

environment which are beyond requirements.

our control.






a epor t 2010/11 Kegalle Pl n ati ns PLC

Financial Calender 2010/2011

INTERIM QUARTERLY REPORTS

Quarter 2010/11 2009/10

1st Quarter 30 July 2010 07 August 2009

2nd Quarter 03 November 2010 10 November 2009

3rd Quarter 08 February 2011 03 February 2010

4th Quarter 27 May 2011 19 May 2010

MEETINGS

Annual Report Published Meetings Date

1999/00 15 May 2000 7th Annual General Meeting 19 July 2000

2000/01 15 May 2001 8th Annual General Meeting 27 June 2001




2004/05 26 May 2005 12th

Annual General Meeting 27 June 2005




2008/09 09 June 2009 16th Annual General Meeting 28 July 2009







$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUV

he Directors o Kegalle Plantations PLC have pleasurein presenting to the Members, their report together

with the Audited Financial Statements o the Company

Turnover

The Turnover o the Company was Rs. 2,991,761,775/- (2010

- Rs. 2,216,496,942/-) which is a 35% increase over last year,

Composition o the Revenue is given in Note 21 to the Accounts.

Financial Results

Year Ended 31 March 2011 2010

Proft rom Operations ater

deducting all expenses,

depreciation and all

known liabilities 917,123,184 398,561,523

Taxation (33,996,358) (22,531,328)

Proft Ater Tax 883,126,826 376,030,195

Un-appropriated Proft

Brought orward 1,223,311,403 872,281,208

Proft available or

distribution 2,106,438,229 1,248,311,403

Appropriation

Dividends paid (137,500,000) (25,000,000)

Un-appropriated ProftCarried orward 1,968,938,229 1,223,311,403

Results and Dividends

The Company has paid an interim dividend amounting to

Rs. 2/50 per share and we are pleased to recommend a fnal

dividend o 50 cents per share (2010 - Rs. 3/-) or the year under

review payable subject to approval at the AGM on the 30 June

2011. The dividend will be subject to a 10% withholding tax

deduction.

Investments

Inormation relating to the movement o the investment is

given in Note 7 to the Accounts.

The Board o Directors o Hamea Kegalle (Pvt) Ltd decided to

discontinue commercial operations with eect rom April 2009

and inormation relating to the discontinued operations o this

Company is given in Note 28 to the Accounts.

Tand its subsidiary or the year ended 31 March 2011 and the

Auditors’ Report thereon.

The Board o Directors approved this report at the Board

meeting held on 27 May 2011.

The details set out herein provide pertinent inormation

required by the Companies Act No. 7 o 2007, Listing Rules

o the Colombo Stock Exchange, Securities and Exchange

Commission and are guided by recommended best Accounting

Practices. The Company’s new registration number is PQ 135.

Principal Activities and Operational Review

The principal activity o Kegalle Plantations PLC is cultivation

and processing o Tea, Rubber, Coconut and other crops and

remains unchanged rom the previous year. The number o

estates manage remained the same as last year - 17 estates

with a total extent cultivated being 6,880 Ha (6,878 Ha in 2010).

The Company continues to be managed by RPC Plantation

Management Services (Pvt) Ltd. The basis o computation o

Management Fees was same as that o the previous year andwas in accordance with the Agreement signed between both

parties.

Future Development

Proound changes take place in the global commodity market.

In order to stay ahead o its competitors, the strategic direction

o the Company is regularly monitored by the Board o Directors

in the key areas o operations and fnancial management, in

pursuit o improving yields, value addition, diversifcation and

product dierentiation to reduce price sensitivity , to improve

quality and get the best return on investment.

Review o the Company Perormance

The Chairman’s Review, Review o Operations, the Financial

Review and other reports attached, briey describe the

perormance o the Company and the Group in the current

fnancial year. These Reports together with the Financial

Statements reect results and the state o aairs o the

Company and its subsidiary.





Property, Plant and Equipment

The total capital expenditure incurred on the acquisition o

fxed assets during the year amounted to Rs. 200,243,722/-

(2010 - Rs. 183,036,169/-), out o which expenditure

on Replanting and Field Development amounts to Rs.

144,914,598/- (2010 - Rs. 114,438,844/-). Further inormation

relating to the movement o Fixed Assets is given in Notes 5

to 6 o the Accounts. Capital expenditure has been fnanced

by either long or short term borrowings depending on

the pay- back period and or internally generated unds.

Loans & Borrowings

A breakdown o the total loan outstanding as at the Balance

Sheet date is given in Note 13 to the Accounts.

Stated Capital

The Stated Capital o the Company as at 31 March 2011 was Rs.

250,000,010/-. Details o the Stated Capital is given in Note 12

to the Financial Statements.

Reserves

The Reserves o the Company as at 31 March 2011 was Rs.1,968,938,229/- (2010 - Rs. 1,448,311,403/-). The details are

given in the Statement o Changes in Equity on Page 52 to the

Financial Statements.

Donations

The Donations made during the year by the Company

amounted to Rs. 1,148,850/- (2010 – Rs. 89,800/-).

Taxation

As per the Inland Revenue Act, the Company is exempt on itsprofts rom agricultural activities. All other sources o income

will be liable to income tax at the rate o 35%. Further details o

Taxation are given in Note 27 to the Financial Statements.

Share Inormation

Inormation on Earnings, Dividend, Net Assets and Market

Value per share is given on Pages 87 to 89 o this report.

Major Shareholders

The twenty largest shareholders o the Company as at 31

March 2011 together with percentages held are given under

the caption “Shareholder & Investor Inormation” on Page 88.

Directors

The Names o the Directors who held Oce during the year are

given below. Their brie profle appears on Pages 12 to 13.

Name

Dr. Sena Yaddehige Chairman

J H P Ratnayeke Deputy Chairman

S S Poholiyadde Director

P D Samarasinghe (Resigned w.e.. 15.02.2011) Director

R L Kumararatne (Ceased to be a Director w.e.. 08.02.2011) Director

L N De S Wijeyeratne (Resigned w.e..01.07.2010) Director

Pro. R C W M R A Nugawela Director

Dr. S S B D G Jayawardena (Appointed w.e.. 06.08.2010) Director

In accordance with the Provisions o the Article 92 o the Articles

o Association o the Company, Mr. J H P Ratnayake who retires

by rotation at the AGM will oer himsel or re-election.

In accordance with the Provisions o Article 98 o the Articles o

Association o the Company, Dr. Gerry Jayawardena who retires

at the AGM will oer himsel or election.

Directors’ Interest in Contracts

Directors’ interest in Contracts in relation to transactions with

related entities, transactions with Key Management Personnel

and other related disclosures are stated in Note 34 (Related

party disclosures) to the Financial Statements. In addition,

the Company carried out transactions in the ordinary course

o business with the ollowing entities having one or more

directors in common is shown in Page 43.

Interest Register

As required by the Companies Act No. 7 o 2007, an Interest

Register is maintained by the Company.

$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUV&RQWG«







Board Committees

Inormation on Board Committees is given in Pages 30 to

32 under Corporate Governance. Audit Committee and

Remuneration Committee Reports are given on Pages 33 to 35

respectively.

Corporate Governance and Internal Control

The policies adopted by the Company in relation to Best

Practices and Good Corporate Governance are given on Page

30 to 32.

The Board has overall responsibility or the Group’s system

o Internal Financial Control. Although no system o Internal

Control can provide absolute assurance against material

misstatement or loss the Group’s internal control system

has been designed to provide the Directors with reasonable

assurance that assets are saeguarded, transactions authorized

and properly recorded and material errors and irregularities

either prevented or detected within a reasonable period o

time.

Directors’ Responsibility or Financial Reporting

The Statement o Directors’ Responsibility is given on Page 45o this report.

Compliance with Laws and Regulations

The Directors, to the best o their knowledge and belie,

confrm that the Company has not engaged in any activity

that contravene the Laws and the regulations applicable in Sri

Lanka. Financial Statements are published quarterly in line with

the Listing Rules o the Colombo Stock Exchange.

Auditors

The Financial Statements or the year ended 31 March 2011

have been audited by Messrs. Ernst & Young, Chartered

Accountants. The Auditors Report is given on Page 47.

In accordance with the Companies Act No. 7 o 2007, aresolution proposing their re-appointment as Auditors to the

Company and authorizing the Directors o the Company to

fx their remuneration will be proposed at the Annual General

Meeting.

The Audit Fee o Messrs. Ernst & Young or the current year was

Rs.1,744,000/- (2010 Rs.1,627,000/-). In addition Rs. 568,708/-

(2010 Rs. 298,004/-) was paid by the Company or non-audit

related work which consists mainly o certifcations issued to

Inland Revenue Department and Tax related work. As ar as the

Directors were aware the Auditors do not have any relationship

other than that o an Auditor with the Company.

Annual General Meeting

The Annual General Meeting will be held on 30 June 2011 at

the registered oce o the Company at 310, High Level Road,

Nawinna, Maharagama. The notice o the Annual General

Meeting is on Page 91 o the report.

On behal o the Board,

S S Poholiyadde J H P Ratnayeke

Director Director

Mrs. R J Siriweera

Company Secretary

Richard Pieris Group Services (Pvt) Ltd

Secretaries

310, High Level RoadNawinna

Maharagama.

27 May 2011

$QQXDO5HSRUWRIWKH%RDUGRI'LUHFWRUV&RQWG«





6WDWHPHQWRI'LUHFWRUV·5HVSRQVLELOLW\

n keeping with the provisions under the CompaniesAct No.7 o 2007, the Directors o Kegalle Plantations

PLC, acknowledge their responsibility in relation to

and transactions properly authorized and recorded, so thatmaterial misstatements and irregularities are either prevented

or detected within a reasonable period o time.

The Directors are o the view that the Company and its

subsidiary have adequate resources to continue operations

in the oreseeable uture, as a going concern. Accordingly, the

Directors have continued to use the going-concern basis in the

preparation o these Financial Statements.

The Directors have provided the Auditors Messrs. Ernst & Young,

Chartered Accountants, with every opportunity to carry out

reviews and tests that they consider appropriate and necessary

or the perormance o their responsibilities. The Company’s

Auditors, Messrs. Ernst & Young, Chartered Accountants have

examined the Financial Statements together with all fnancial

records and related data and express their opinion which

appears as reported by them on page 47 o this report. In

arriving at their opinion, they have carried out reviews and

sample checks on the system o internal controls.

On behal o the Board,

S S Poholiyadde

Director

J H P Ratnayeke

Director

Colombo

27 May 2011

Ifnancial reporting o both, the Company and that o its Group.

These responsibilities dier rom those o its Auditors, Messrs.

Ernst & Young, which are set out in their report, appearing on

Page 47 o this report.

The Financial Statements o the Company and its subsidiary

or the year ended 31 March 2011 included in this report

have been prepared and presented in accordance with the Sri

Lanka Accounting Standards. They provide the inormation

as required by the Companies Act No. 7 o 2007, Sri Lanka

Accounting Standards and the Listing Rules o the Colombo

Stock Exchange. The Directors confrm that suitable accounting

policies have been used and applied consistently and that all

applicable accounting standards have been ollowed in the

preparation o the Financial Statements given on pages rom

48 to 83 inclusive. All material deviations rom these standards

i any have been disclosed and explained. The judgments

and estimates made in the preparation o these Financial

Statements are reasonable and prudent.

The Directors confrm their responsibility or ensuring that all

Companies within the Group maintain adequate accounting

records, which are sucient enough to prepare FinancialStatements that disclose with reasonable accuracy, the

fnancial position o the Company and its subsidiary. They also

confrm their responsibility towards ensuring that the Financial

Statements presented in the Annual Report give a true and air

view o the state o aairs o the Company and its subsidiary as

at 31 March 2011 and that o the proft or the year then ended.

The overall responsibility or the Company’s internal control

systems lies with the Directors. Whilst recognizing the act that

there is no single system o internal control that could provide

absolute assurance against material misstatements and raud,

the Directors confrm that the prevalent internal control

systems instituted by them which comprise internal checks,

internal audit, fnancial and other controls are so designed that,

there is reasonable assurance that all assets are saeguarded





&KLHI([HFXWLYH2IÀFHU·VDQG&KLHI)LQDQFLDO2IÀFHU·V5HVSRQVLELOLW\6WDWHPHQW

he Financial Statements are prepared in conormitywith requirements o the Sri Lanka Accounting

Standards issued by The Institute o Chartered

The Financial Statements were audited by Messrs. Ernst &Young, Chartered Accountants, Independent Auditors.

The Audit Committee meets periodically with the internal

auditors and the independent auditors to review the manner in

which these auditors are preorming their responsibilities, and

to discuss auditing, internal control and reporting issues. To

ensure complete independence, the independent auditors and

the internal auditors have ull and ree access to the members

o the audit committee to discuss any matter o substance.

S S Poholiyadde

Director/CEO

L C Herath

Chie Financial Ocer

27 May 2011

TAccountants o Sri Lanka, Companies Act No. 7 o 2007, Sri Lanka

Auditing Standards, the Listing Rules o the Colombo Stock

Exchange and Code o Best Practice on Corporate Governance

issued jointly by the Institute O Chartered Accountants o Sri

Lanka and Securities and Exchange Commission o Sri Lanka.

The Board o Directors and the management o our Company

accept responsibility or the integrity and objectivity o these

Financial Statements. The estimates and judgments relating

to the Financial Statements were made on a prudent and

reasonable basis, in order that the Financial Statements reect in

a true and air manner, the orm and substance o transactions,

and reasonably present the Company’s state o aairs. To

ensure this, the Company has taken proper and sucient care

in installing a system o internal control and accounting records,

or saeguarding assets, and or preventing and detecting rauds

as well as other irregularities, which is reviewed, evaluated

and updated on an ongoing basis. Our internal auditors have

conducted periodic audit to provide reasonable assurance that

the established policies and procedures o the Company were

consistently ollowed. However, there are inherent limitations

that should be recognized in weighing the assurances provide

by any system o internal controls and accounting.





INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS OF KEGALLE PLANTATIONS PLC

Report on the Financial Statements

We have audited the accompanying Financial Statements

o Kegalle Plantations PLC and the consolidated FinancialStatements o the Company and its subsidiary which comprise

the Balance Sheets as at March 31, 2011 and the Income

Statements, Statements o Changes in Equity and Cash

Flow Statements or the year then ended, and a summary o

signifcant Accounting Policies and other explanatory notes.

Management’s Responsibility or the Financial Statements

Management is responsible or the preparation and air

presentation o these fnancial statements in accordance with

Sri Lanka Accounting Standards. This responsibility includes:

designing, implementing and maintaining internal control

relevant to the preparation and air presentation o Financial

Statements that are ree rom material misstatement, whether

due to raud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that are

reasonable in the circumstances.

Scope o Audit and Basis o Opinion

Our responsibility is to express an opinion on these fnancial

statements based on our audit. We conducted our audit

in accordance with Sri Lanka Auditing Standards. Those

standards require that we plan and perorm the audit to obtain

reasonable assurance whether the fnancial statements are reerom material misstatements.

An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the fnancial statements. An

audit also includes assessing the accounting principles used

and signifcant estimates made by management, as well as

evaluating the overall fnancial statement presentation.

We have obtained all the inormation and explanations which

to the best o our knowledge and belie were necessary or

the purpose o our audit. We thereore believe that our audit

provides a reasonable basis or our opinion.

Opinion

Company

In our opinion, so ar as appears rom our examination, the

Company maintained proper accounting records or the year

ended March 31, 2011, and the fnancial statements give a true

and air view o the Company’s state o aairs as at March 31,

2011 and its proft and cash ows or the year then ended in

accordance with Sri Lanka Accounting Standards.

Group

In our opinion, the consolidated fnancial statements give a

true and air view o the state o aairs as at March 31, 2011 and

the proft and cash ows or the year then ended, in accordance

with Sri Lanka Accounting Standards, o the Company and

its subsidiary dealt with thereby, so ar as concerns the

shareholders o the Company.

Report on Other Legal and Regulatory Requirements

In our opinion, these fnancial statements also comply with the

requirements o Section 151(2) and 153 (2) to 153 (7) o the

Companies Act No. 07 o 2007.

(Sgd.)

Colombo

27 May 2011

Independent Auditors’ Report




Balance Sheet

Company Group

2011 2010 2011 2010ASSETS Note Rs.’000 Rs.’000 Rs.’000 Rs.’000Non Current Assets Leasehold Property 3 168,036 172,944 168,036 172,944Immovable estates assets on Finance Lease

(other than leasehold Property) 4 135,259 146,179 135,259 146,179Tangible assets other than Immature/Mature Plantations 5 388,585 371,493 460,851 450,778Immature/Mature Plantations 6 1,015,940 899,063 1,015,940 899,063Long Term Investments 7 225,000 225,000 183,307 225,000

1,932,820 1,814,679 1,963,393 1,893,964Current Assets Inventories 8 391,655 247,714 393,378 249,462Trade and Other Receivables 9 230,410 263,662 235,878 269,122VAT Recoverable 20,004 20,188 28,282 28,473Amounts due rom Related Companies 10 57,177 52,862 12,897 9,414

Short Term Investment 11 1,289,494 719,993 1,289,494 719,993Cash and Bank Balances 10,263 20,685 10,307 22,988

1,999,003 1,325,104 1,970,236 1,299,452TOTAL ASSETS 3,931,823 3,139,783 3,933,629 3,193,416

EQUITY AND LIABILITIES Capital and ReservesStated Capital 12 250,000 250,000 250,000 250,000General Reserve 12.1 225,000 225,000 225,000 225,000Retained Proft / (Loss) 1,968,938 1,223,311 1,934,489 1,234,239Shareholders’ Fund 2,443,938 1,698,311 2,409,489 1,709,239

Non Current Liabilities & Deerred Income Interest Bearing Loans & Borrowings 13 303,089 343,570 303,089 343,570Retirement Beneft Obligations 14 335,025 316,754 335,120 316,849Deerred Income 15 196,738 172,656 219,722 199,992Net liability to the lessor payable ater one year 16 286,660 290,773 286,660 290,773

1,121,512 1,123,753 1,144,591 1,151,184Current Liabilities Interest Bearing Loans & Borrowings 13 68,319 61,288 68,319 61,288Net liability to the lessor payable within one year 16 4,113 3,955 4,113 3,955Trade and Other Payables 17 260,034 198,191 264,532 202,688Dividend Payable 18 1,225 1,129 1,225 1,129Amounts due to Related Companies 20 15,798 39,828 24,476 50,605Income Tax Payable 27.2 16,884 13,328 16,884 13,328

366,373 317,719 379,549 332,993TOTAL EQUITY AND LIABILITIES 3,931,823 3,139,783 3,933,629 3,193,416

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

L C Herath

Chie Financial Ocer

The Board o Directors is responsible or the preparation and presentation o these Financial Statements.

Signed or and on behal o the Board o Directors o Kegalle Plantations PLC.

S S Poholiyadde J H P RatnayekeDirector Director

The Accounting Policies and notes on Pages 53 through 83 orm an integral part o the Financial Statements.

Colombo

27 May 2011

As at 31 March 2011





Income Statement

Company Group

2011 2010 2011 2010

Note Rs.’000 Rs.’000 Rs.’000 Rs.’000

Continuing Operations

Revenue 21 2,991,762 2,216,497 2,991,762 2,216,497

Cost o Sales (1,817,992) (1,762,417) (1,817,992) (1,762,417)

Gross Proft 1,173,770 454,080 1,173,770 454,080

Other Income 22 105,951 82,629 105,951 82,629

Administration Expenses (54,636) (44,516) (54,636) (44,516)

Management Fee (193,492) (82,193) (193,492) (82,193)

Finance Cost 23 (114,470) (62,396) (114,470) (62,396)

Reversal / (Provision) For Doubtull Receivables 24 - 50,958 - 50,958

Proft From Operations 25 917,123 398,562 917,123 398,562

Share o Result o Associate 26 - - (41,676) -

Proft Beore Taxation 917,123 398,562 875,447 398,562

Income Tax Expenses 27 (33,996) (22,532) (34,014) (22,532)

Proft or the year rom Continuing Operations 883,127 376,030 841,434 376,030

Discontinued Operations

Loss ater tax or the year rom discontinued operations 28 - - (3,684) (10,396)

Proft / (Loss) or the year 883,127 376,030 837,750 365,634

Basic Earnings Per Share 29 35.33 15.04 33.51 14.63

Basic Earnings Per Share rom Continuing Operations 35.33 15.04 33.66 15.04






Company Group2011 2010 2011 2010

Note Rs.’000 Rs.’000 Rs.’000 Rs.’000

CASH FLOWS FROM / (USED IN) OPERATING ACTIVITIES

Net Proft/(Loss) beore Taxation rom continuing Operations 917,123 398,562 875,447 398,562

Net Proft/(Loss) beore Taxation rom discontinuing Operations - - (3,684) (10,396)

ADJUSTMENTS FOR

Interest Income 22 (74,240) (55,145) (74,240) (55,145)

Depreciation / Amortization 25 82,104 78,058 82,104 78,058

Provision or Defned Beneft Plan Costs 14 52,223 114,914 52,223 114,914Amortization o Grants 15 (5,758) (5,280) (10,109) (9,631)

Finance Costs 23 114,470 62,396 114,470 62,396

Impairement o Property, Plant & Equipment - - 7,019 13,092

Share o Result o Associate - - 41,676 -(Reversal) / Provision or Bad & Doubtul Receivables 24 - (50,958) - (50,958)

Operating Proft beore Working Capital Changes 1,085,922 542,547 1,084,906 540,892

(Increase)/Decrease in Trade & Other Receivables 33,435 58,000 33,435 60,112

(Increase)/Decrease in Inventories (143,940) (101,341) (143,917) (99,813)

(Increase)/Decrease in amounts due rom Related Companies (4,315) 13,299 (4,315) 13,299

Increase/(Decrease) in Trade & Other Payables 60,882 66,227 60,882 63,575

Increase/(Decrease) in amounts due to Related Companies (24,029) 39,522 (25,294) 41,990Cash Generated rom / (used in) Operations 1,007,955 618,254 1,005,697 620,055

Defned Beneft Plan Costs paid 14 (33,952) (31,637) (33,952) (31,637)

ESC Paid (7,140) (4,772) (7,140) (4,772)

Finance Cost Paid (50,988) (45,442) (50,988) (45,442)

Income Tax Paid (22,341) (8,046) (22,341) (8,046)Net Cash rom / (used in) Operating Activities 893,534 528,357 891,276 530,158

CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES

Investments - (144,703) - (144,703)

Interest Received 74,240 55,145 74,240 55,145

Grant Received 15 29,839 29,843 29,839 29,843Field Development Expenditure Note A (144,915) (114,438) (144,915) (114,438)

Purchase o Property, Plant & Equipment Note B (55,329) (68,597) (55,329) (68,597)

Net Cash rom / (used in) Investing Activities (96,165) (242,750) (96,165) (242,750)

CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Dividend Paid (137,404) (24,611) (137,404) (24,611)

Payment o Government Lease Rentals (63,482) (16,955) (63,482) (16,955)

Payment o Government Lease Rentals - Capital (3,955) (3,803) (3,955) (3,803)

Proceeds rom Loans - 137,323 - 137,323

Repayment o Loans (61,288) (80,005) (61,288) (80,005)

Net Cash rom / (used in) Financing Activities (266,129) 11,949 (266,129) 11,949

Net Increase/(Decrease) in Cash & Cash Equivalents 531,241 297,555 528,982 299,357

Cash & Cash Equivalents at the beginning o the year Note C 740,678 443,123 742,981 443,624

Cash & Cash Equivalents at the end o the year Note D 1,271,919 740,678 1,271,963 742,981


Cash Flow Statement





Cash Flow Statement Contd....

NOTE A Tea Rubber Other Crops Unallocated Total

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

Investment in Field Development Expenditure

Investment in Immature Plantations 2010/11 33,619 103,773 1,967 5,555 144,915

Investment in Immature Plantations 2009/10 18,134 86,963 2,197 7,145 114,438

NOTE B

Investment in Property, Plant & Equipment

Investment in Property, Plant & Equipment 2010/11 (Company) 29,240 25,151 - 938 55,329

Investment in Property, Plant & Equipment 2010/11 (Group) 29,240 25,151 - 938 55,329

Investment in Property, Plant & Equipment 2009/10 (Company) 34,954 30,575 - 3,068 68,597

Investment in Property, Plant & Equipment 2009/10 (Group) 34,954 30,575 - 3,068 68,597

Company Group

2011 2010 2011 2010

NOTE C Rs.’000 Rs.’000 Rs.’000 Rs.’000

Cash & Cash Equivalents at the beginning o the year

Cash in Hand & at Bank 20,685 64,033 22,988 64,534

Investment in Treasury Bills, Repo & Others 719,993 379,090 719,993 379,090

740,678 443,123 742,981 443,624

NOTE D

Cash & Cash Equivalents at the end o the year

Cash in Hand & at Bank 10,263 20,685 10,307 22,988

Bank Overdrat (27,838) - (27,838) -

Investment in Treasury Bills, Repo & Others 1,289,494 719,993 1,289,494 719,993

1,271,919 740,678 1,271,963 742,981





Statement of Changes in Equity

Company Stated Capital General Accumulated TotalReserve Proft/(Loss)

Rs’000 Rs’000 Rs’000 Rs’000

Balance as at 31 March 2009 250,000 225,000 872,281 1,347,281

Net proft or the year - - 376,030 376,030

Dividends paid - - (25,000) (25,000)

Balance as at 31 March 2010 250,000 225,000 1,223,311 1,698,311


Dividends paid - - (137,500) (137,500)


Group Stated Capital General Accumulated Total

Reserve Proft/(Loss)

Rs’000 Rs’000 Rs’000 Rs’000

Balance as at 31 March 2009 250,000 225,000 893,605 1,368,605


Dividends paid - - (25,000) (25,000)



Dividends paid - - (137,500) (137,500)







1. CORPORATE INFORMATION

1.1 Domicile and Legal Form

Kegalle Plantations PLC is a Limited Liability Company

incorporated and domiciled in Sri Lanka, under the

Companies Act No. 17 o 1982 (The Company re-registered

under the Companies Act No. 07 o 2007) in terms o the

provisions o the Conversion o Public Corporations or

Government Owned Business Undertaking into Public

Companies Act No. 23 o 1987. The registered oice o

the Company is located at 310, High Level Road, Nawinna,

Maharagama, and Plantations are situated in the plantingdistricts o Kegalle, Kurunegala & Badulla.

1.2 Principal Activities and Nature o Operations

During the year, the principal activities o the Company

were the cultivation, manuacture and sale o Tea, Rubber,

Coconut, Cardamom & other agricultural produce.

1.3 Parent Enterprise and Ultimate Parent Enterprise

The Company’s parent undertaking is RPC Plantation

Management Services (Pvt) Ltd. In the opinion o the

Directors, the Company’s ultimate parent undertaking

and controlling party is Richard Pieris & Co. PLC., which

is incorporated in Sri Lanka.

1.4 Date o Authorization or issue

The Financial Statements o Kegalle Plantations PLC or

the year ended 31 March 2011 were authorized or issue

in accordance with a resolution o the board o directors

on 27 May 2011.

2. BASIS OF PREPARATION

2.1. These Financial Statements have been prepared on a

historical cost basis except or certain Property, Plant

and Equipment which are stated at revalued amounts.

The Financial Statements are presented in Sri Lankan

Rupees and all values are rounded to the nearest Rupee.

2.1.1 Statement o Compliance

The Financial Statements o Kegalle Plantations PLC

have been prepared in accordance with the Sri Lanka

Accounting Standards (SLAS) adopted by the Instituteo Chartered Accountants o Sri Lanka (ICASL) and also

in compliance with the requirements o the Companies

Act No 07 o 2007.

2.1.2 Going Concern

The Directors have made an assessment o the Company’s

ability to continue as a going concern and they do not

intend either to liquidate or cease trading.

2.1.3 Comparative Inormation

The accounting policies have been consistently applied

by the Company and are consistent with those used in

the previous year unless otherwise stated.

2.1.4 Consolidation Policy

Subsidiary – Hamea Kegalle (Pvt) Ltd

2.1.4.1 Kegalle Plantations PLC own 100% ordinary shares o

Hamea Kegalle (Pvt) Ltd which is incorporated in Sri

Lanka.

2.1.4.2 The Consolidated Financial Statements include results,assets & liabilities o Kegalle Plantations PLC and its

subsidiary, Hamea Kegalle (Pvt) Ltd.

2.1.4.3 All companies in the Group have a common inancial

year end on 31 March.

2.1.4.4 Goodwill arising on the acquisition o the subsidiaries

written o to the Income Statements.

Associate - Richard Pieris Natural Foams Ltd

2.1.4.5 Associates are those investments over which the grouphas signiicant inluence and holds 20% to 50% o its

equity.

2.1.4.6 Associates are accounted or using the equity method

and are recognized initially at cost.

2.1.4.7 The Consolidated Financial Statements include the

Group’s share o income and expenses and equity

movements o associates, rom the date on which

signiicant inluence commences until the date on which

signiicant inluence ceases. When the Group’s share o

Notes to the Financial Statements





losses in an associate equals or exceeds the interest in theundertaking, the group does not recognize urther losses

unless it has incurred obligations or made payments on

behal o the entity. The group ceases to use the equity

method o accounting on the date rom which it no

longer has signiicant inluence in the associate.

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES

AND ASSUMPTIONS

Judgments

In the purpose o applying the Company’s accounting

policies, management has made the ollowing judgments,

apart rom those involving estimations, which has the

most signiicant eect on the amounts recognized in

the Financial Statements.

Inventory valuation – Produce stock

Company has valued part o unsold produce stock at

since realized prices. The balance unsold stock remained

as at the Balance Sheet date valued at estimated selling

prices based on most recent selling prices available

subsequent to the year end.

Estimates and Assumptions

The key assumptions concerning the uture and other

key sources o estimation uncertainty at the Balance

Sheet date, that have a signiicant risk o causing a

material adjustment to the carrying amounts o assets

and liabilities within the next inancial year are discussed

below.

Impairment o Goodwill

The Company determines whether goodwill is impairedat least on an annual basis. This requires an estimation o

the “value in use” o the cash generating units to which

the goodwill is allocated. Estimating a value in use

amount requires management to make an estimate o

the expected uture cash lows rom the cash generating

unit and also to choose a suitable discount rate in order to

calculate present value o those cash lows. However, at

present company does not have any recorded Goodwill

balance as at the Balance Sheet date.

Deerred Tax Assets

Deerred tax assets are recognised or all unused tax

losses to the extent that it is probable that taxable

proit will be available against which the losses can be

utilised. Signiicant management judgment is required

to determine the amount o deerred tax assets that

can be recognised, based upon the likely timing and

level o uture taxable proits together with uture

tax planning strategies. The carrying value o the

unrecognised deerred tax assets as at 31 March 2011

was Rs. 27,695,860/- (2010 – Rs. 133,661,865/-).

Deined Beneit Plans

The cost o Deined Beneit Pension Plan is determined

using actuarial valuations. The actuarial valuation

involves making assumptions about discount rates,

expected rates o return on assets, uture salary increases,

mortality rates and uture pension increases. Due to

the long term nature o these plans, such estimates are

subject to signiicant uncertainty. The net employee

liability as per actuary as at 31 March 2011 is Rs.

335,025,357 /- (2010 – Rs. 316,754,295 /-). Further details

are given in Note 14.

2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.3.1 Foreign Currency Translation

The Financial Statements are presented in Sri Lankan

rupees, which is the Company’s unctional and

presentation currency. Transactions in oreign currencies

are initially recorded at the unctional currency rate

ruling at the date o the transaction. Monetary assets

and liabilities denominated in oreign currencies are

retranslated at the unctional currency rate o exchange

ruling at the Balance Sheet date. All dierences aretaken to proit or loss with the exception o dierences

on oreign currency borrowings that provide a hedge

against a net investment in a oreign entity. These are

taken directly to equity until the disposal o the net

investment, at which time they are recognised in proit

or loss. Tax charges and credits attributable to exchange

dierences on those borrowings are also dealt with in

equity. Non monetary items that are measured in terms

o historical cost in a oreign currency are translated

using the exchange rates as at the dates o the initial

transactions. Non monetary items measured at air value

Notes to the Financial Statements Contd...





in a oreign currency are translated using the exchangerates at the date when the air value was determined. Any

goodwill arising on the acquisition o a oreign operation

and any air value adjustments to the carrying amounts

o assets and liabilities arising on the acquisition are

treated as assets and liabilities o the oreign operation

and translated at the closing rate.

2.3.2 Taxation

a) Current Taxes

Current income tax assets and liabilities or the current

and prior periods are measured at the amount expected

to be recovered rom or paid to the Commissioner

General o Inland Revenue. The tax rates and tax laws

used to compute the amount are those that are enacted

or substantively enacted by the Balance Sheet date.

The provision or income tax is based on the elements

o income and expenditure as reported in the Financial

Statements and computed in accordance with the

provisions o the Inland Revenue Act.

Current income tax relating to items recognised directlyin equity is recognised in equity and not in the Income

Statement.

b) Deerred Taxation

Deerred income tax is provided, using the liability

method, on all temporary dierences at the Balance

Sheet date between the tax bases o assets and liabilities

and their carrying amounts or inancial reporting

purposes.

Deerred income tax liabilities are recognised or alltaxable temporary dierences:

rom goodwill amortisation or the initial recognition o

an asset or liability in a transaction that is not a business

combination and, at the time o the transaction, aects

neither the accounting proit nor taxable proit or loss;

and

with investments in subsidiaries, associates and interests

in joint ventures, except where the timing o the reversalo the temporary dierences can be controlled and it is

probable that the temporary dierences will not reverse

in the oreseeable uture.

Deerred income tax assets are recognised or all

deductible temporary dierences, carry-orward o

unused tax assets and unused tax losses, to the extent

that it is probable that taxable proit will be available

against which the deductible temporary dierences, and

the carry-orward o unused tax assets and unused tax

losses can be utilised:

to the deductible temporary dierence arises rom the

initial recognition rom an asset or liability in a transaction

that is not a business combination and, at the time o

the transaction, aects neither the accounting proit nor

taxable proit or loss; and

with investments in subsidiaries, associates and interests

in joint ventures, deerred tax assets are only recognised

to the extent that it is probable that the temporary

dierences will reverse in the oreseeable uture andtaxable proit will be available against which the

temporary dierences can be utilised.

The carrying amount o deerred income tax assets is

reviewed at each Balance Sheet date and reduced to the

extent that it is no longer probable that suicient taxable

proit will be available to allow all or part o the deerred

income tax asset to be utilised.

Deerred income tax assets and liabilities are measured

at the tax rates that are expected to apply to the year

when the asset is realised or the liability is settled, basedon tax rates (and tax laws) that have been enacted or

substantively enacted at the Balance Sheet date.

Deerred income tax relating to items recognised directly

in equity is recognised in equity and not in the Income

Statement.

2.3.3 Borrowing Costs

Borrowing costs are recognised as an expense in the

period in which they are incurred, except to the extent









decreased as a result o a revaluation, the decrease isrecognised as an expense unless it reverses a previous

increment relating to that asset, in which case it is

charged against any related revaluation surplus, to the

extent that the decrease does not exceed the amount

held in the revaluation surplus in respect o that same

asset. Any balance remaining in the revaluation surplus in

respect o an asset, is transerred directly to accumulated

proits or loss on retirement or disposal o the asset.

c) Restoration Costs

Expenditure incurred on repairs or maintenance o

property, plant and equipment in order to restore

or maintain the uture economic beneits expected

rom originally assessed standard o perormance, is

recognised as an expense when incurred.

d) Depreciation

The provision or depreciation is calculated on the cost

or valuation o all property, plant and equipment other

than reehold land, in order to write o such amounts

over the estimated useul lives by equal instalments as

ollows:

Buildings Over 40 years

Plant & Machinery Over 13 years

Furniture & Fittings Over 10 years

Vehicles Over 05 years

Equipments Over 08 years

Sanitation, Water Supply & Electricity Over 20 years

Computers/Computer Sotware Over 08 years

Lines & Latrines Over 40 years

Replanting and New Planting

Tea Over 33 yearsRubber Over 20 years

Coconut Over 50 years

The leasehold rights are being amortised in equal

amounts over the ollowing periods.

Leasehold Property Over 53 years

Mature Plantations Over 30 years

Buildings Over 25 years

Machinery Over 15 years

Improvements to Land Over 30 years

The asset’s residual values, useul lives and methods o depreciation are reviewed, and adjusted i appropriate,

at each inancial year end.

e) Derecognition

An item o property, plant and equipment is derecognised

upon disposal or when no uture economic beneits

are expected rom its use or disposal. Any gain or loss

arising on derecognition o the asset (calculated as the

dierence between the net disposal proceeds and the

carrying amount o the asset) is included in the Income

Statement in the year the asset is derecognised.

2.3.10 Immature and Mature Plantations

The cost o Replanting and New Planting are classiied as

immature plantations up to the time o harvesting the

crop.

The cost o areas coming into bearing are transerred to

mature plantations and depreciated over their useul lie

period.

2.3.11 Inilling Cost

Where inilling results in an increase in the economic

lie o the relevant ield beyond its previously assessed

standard o perormance, the costs are capitalised in

accordance with Sri Lanka Accounting Standard No. 32

and depreciated over the useul lie at rates applicable

to mature plantation.

Inilling costs that are not capitalised have been charged

to the Income Statement in the year in which they are

incurred.

2.3.12 Leases

a) Finance leases - where the company is the lessee

Property, plant and equipment on inance leases, (which

eectively transer to the company substantially all o the

risks and beneits incidental to ownership o the leased

item) are capitalised at their cash price, and depreciated/

amortised over the period the company is expected to

beneit rom the use o the leased assets.






The corresponding principal amount payable to thelessor is shown as a liability.

The inance charges allocated to uture periods are

separately disclosed under Note 16.

The interest element o the rental obligation applicable

to each inancial year is charged to the Income Statement

over the period o the lease so as to produce a constant

periodic rate o interest on the remaining balance o the

liability or each period.

The cost o improvements to or on leased property

is capitalised, and depreciated over the unexpired

period o the lease or the estimated useul lives o the

improvements, whichever is shorter.

b) Operating Leases

Leases where the lessor eectively retains substantially

all the risks and beneits o ownership over the leased

term are classiied as operating leases.

Lease payments (excluding costs or services such as

insurance and maintenance) paid under operating leases

are recognised as an expense in the Income Statementon a straight-line basis over the lease term.

c) Leasehold Property

Leasehold property comprising o land use rights

obtained on a long term basis, is stated at the recorded

carrying values as at the eective date o Sri Lanka

Accounting Standard 19 – Leases in line with Ruling o

the Urgent Issues Task Force o The Institute o Chartered

Accountants o Sri Lanka. Such carrying amounts are

amortised over the remaining lease term or useul lie

o the leased property whichever is shorter.

2.3.13 Investments

a) Initial Recognition:

Cost o investment includes purchase cost and

acquisition charges such as brokerages, ees, duties

and bank regulatory ees. The Company distinguishes

and presents current and non current investment in the

Balance Sheet.

b) Measurement

Current Investment:

Current investments are carried at the lower o cost and

market value, determined on the basis o aggregate

portolio.

Unrealized losses arising rom reduction to market

value and reversals o such reduction required to state

current investments at lower o cost and market value

are included in Income Statement.

Long Term Investments

Long term investments are stated at cost. Carrying

amounts are reduced to recognize a decline other than

temporary, determined or each investment individually.

These reductions or other than temporary declines in

carrying amounts are charged to Income Statement.

Disposal o Investment

On disposal o an investment, the dierence between net

disposal proceeds and the carrying amount is recognised

as income or expense.

2.3.14 Provisions

Provisions are recognized when the Company has a

present obligation (legal or constructive) as a result

o a past event, where it is probable that an outlow

o resources embodying economic beneits will be

required to settle the obligation and a reliable estimate

can be made o the amount o the obligation. I the

eect o the time value o money is material, provisions

are determined by discounting the expected uture

cash lows at a pre-tax rate that relects current marketassessments o the time value o money and, where

appropriate, the risks speciic to the liability. Where

discounting is used, the increase in the provision due to

the passage o time is recognized as an interest expense.

2.3.15 Retirement Beneit Obligation

a) Deined Beneit Plans –Gratuity

The Company measures the present value o the

promised retirement beneits o gratuity which is a














5. TANGIBLE ASSETS OTHER THAN Balance Additions Disposals/Transers BalanceIMMATURE/MATURE PLANTATIONS as at or the during the as at01.04.10 year year 31.03.11

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

Cost Buildings 44,156 7,402 - 51,558Motor Vehicles 81,067 - - 81,067Furniture & Fittings 5,442 - - 5,442Equipment 55,876 233 - 56,109Water Sanitation 2,150 - - 2,150Computer & Computer Sotware 12,429 1,890 - 14,319Plant & Machinery 245,140 40,912 - 286,052Other Assets on Grants 203,575 6,991 - 210,566

649,835 57,428 - 707,263

Balance Charged Disposals/Transers Balanceas at or the during the as at

01.04.10 year year 31.03.11Depreciation Rs.’000 Rs.’000 Rs.’000 Rs.’000

Buildings 6,321 1,040 - 7,361Motor Vehicles 70,259 5,134 - 75,393Furniture & Fittings 2,970 338 - 3,308Equipment 42,158 3,766 - 45,924Water Sanitation 1,406 120 - 1,526Computer & Computer Sotware 10,159 982 - 11,141Plant & Machinery 122,317 18,625 - 140,942Other Assets on Grants 36,220 7,601 - 43,822

291,811 37,606 - 329,417

WRITTEN DOWN VALUE 358,024 377,846

Assets Acquired on Finance LeasesCostPlant & Machinery 8,417 - - 8,417

8,417 - - 8,417Depreciation

Plant & Machinery 4,435 631 - 5,0664,435 631 - 5,066


Balance Additions Capitalised Balanceas at or the during the as at

01.04.10 Year Year 31.03.11Capital Work-in-Progress Rs.’000 Rs.’000 Rs.’000 Rs.’000

Capital Work-in-Progress 9,487 2,459 (4,558) 7,389

TOTAL WRITTEN DOWN VALUE 371,493 388,585

The assets shown above are those movable assets vested in the Company by gazette notifcation on the date o ormationo the Company (22 June 1992) and all investments in tangible assets by the Company since its ormation. The assets takenover by way o estate leases are set out in Notes 3 & 4.

Further, the valuation o immovable JEDB estate assets on fnance lease (other than leasehold property) and tangible assetsother than immature/mature plantations taken over as at June 22, 1992 is based on net book value as at such date. Thesevalues were not available to us by individual asset.






TANGIBLE ASSETS OTHER THAN Balance Additions Disposals/Transers BalanceIMMATURE/MATURE PLANTATIONS as at or the during the as at

01.04.10 year year 31.03.11

Group Rs.’000 Rs.’000 Rs.’000 Rs.’000

Cost

Buildings 84,706 7,402 - 92,107

Motor Vehicles 81,067 - - 81,067

Furniture & Fittings 5,519 - - 5,519

Equipment 56,549 233 - 56,782

Water Sanitation 2,150 - - 2,150

Computer & Computer Sotware 12,806 1,890 - 14,696

Plant & Machinery 314,171 40,912 - 355,083

Other Assets on Grants 203,575 6,991 - 210,566

760,543 57,428 - 817,971

Balance Charged (Disposals)/Impairment loss Balance

as at or the during the as at

01.04.10 year year 31.03.11

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

Buildings 14,695 1,040 1,609 17,344

Motor Vehicles 70,259 5,134 - 75,393

Furniture & Fittings 2,997 338 - 3,335

Equipment 42,313 3,766 - 46,079

Water Sanitation 1,406 120 - 1,526

Computer & Computer Sotware 10,555 982 - 11,537

Plant & Machinery 144,789 18,625 5,410 168,823Other Assets on Grants 36,220 7,601 - 43,822

323,234 37,606 7,019 367,859


Assets Acquired on Finance Leases

Cost

Plant & Machinery 8,417 8,417

8,417 8,417

Depreciation

Plant & Machinery 4,435 631 - 5,066

4,435 631 - 5,066


Balance Additions Capitalised Balance

as at or the during the as at

01.04.10 Year Year 31.03.11

Capital Work-in-Progress Rs.’000 Rs.’000 Rs.’000 Rs.’000

Capital Work-in-Progress 9,487 2,459 (4,558) 7,389

TOTAL WRITTEN DOWN VALUE 450,778 460,851

Balanceas at

31.03.11

Rs.’000

92,107

81,067

5,519

56,782

2,150

14,696

355,083

210,566

817,971

Balance

as at

31.03.11

Rs.’000

17,344

75,393

3,335

46,079

1,526

11,537

168,82343,822

367,859

450,112

8,417

8,417

5,066

5,066

3,350

Balance

s at

31.03.11

Rs.’000

7,389

460,851






6. IMMATURE/MATURE PLANTATIONS - COMPANY/GROUP

Immature Plantations Mature Plantations Total

Tea Rubber Coconut Others Tea Rubber Coconut Others

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

Cost

As at 01.04.10 66,478 340,206 35,092 42,706 115,404 467,717 1,741 11,883 1,081,228

Additions 31,779 105,613 1,967 5,555 - - - - 144,915

Transers (9,135) (59,341) - - 9,135 59,341 - - -

As at 31.03.11 89,122 386,478 37,059 48,262 124,539 527,059 1,741 11,883 1,226,143

Depreciation

As at 01.04.10 - - - - 26,270 152,576 245 3,075 182,166

Charge or the year - - - - 3,577 23,891 33 537 28,038

As at 31.03.11 - - - - 29,847 176,467 279 3,611 210,203

Net Book Value

as at 31.03.11 89,122 386,478 37,059 48,262 94,693 350,592 1,462 8,272 1,015,940

Net Book Value

as at 31.03.10 66,478 340,206 35,092 42,706 89,134 315,141 1,496 8,809 899,063

Note: These are investments made in immature/mature plantations since the ormation o the Company. The assets

(including plantations assets) taken over by way o estate leases are set out in Notes 3 and 4. Further, investments made

in immature plantations taken over by way o these leases are shown in the above note all o which have been transerred

to mature plantations as at the Balance Sheet date. Borrowing costs amounting to Rs. 2,963,681/- incurred on long term

loans obtained to meet expenses relating to immature plantations have been capitalised as part o the cost o the immature

plantations.

7. LONG TERM INVESTMENTS

7.1 Investments in Subsidiaries

Company

Unquoted Investments

Hamea Kegalle (Pvt) Ltd

Initial Investment in Hamea Kegalle (Pvt) Ltd stated at cost o Rs. 14 Mn. Since it was provided or diminishing in value o

Rs.14 Mn upto 2008, the carrying amount o investment shows no balance at the end o the year.






7.2 Investments in Associates % Holding No o Shares Value - Rs.’000 31.03.2011 31.03.2010 31.03.2011 31.03.2010 31.03.2011 Movement 31.03.2010

Company

Unquoted Investments

Richard Pieris Natural Foams Ltd 35.11 35.11 22,500,000 22,500,000 183,307 (41,693) 225,000

Company investments in associates

(at cost) 35.11 35.11 22,500,000 22,500,000 183,307 (41,693) 225,000

Summarised Inormation o Associate Value - Rs. ‘000

Richard Pieris Natural Foams Ltd 31.03.2011 31.03.2010

Revenue 806,200 636,216

Proft / (Loss) Beore Tax (118,700) (33,095) Total Assets 612,322 629,532

Total Liabilities 584,727 483,186

7.3 Other Long Term Investments % Holding No o Shares Value - Rs.’000

31.03.2011 31.03.2010 31.03.2011 31.03.2010 31.03.2011 Movement 31.03.2010

Maskeliya Tea Garden Ceylon Ltd - - 1 1 - - -

Exotic Horticulture (Pvt) Ltd - - 1 1 - - -

Total Investment - - 2 2 - - -

Long Term Investments - Total 183,307 (41,693) 225,000

Company Group8. INVENTORIES 2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Input Materials 26,403 37,917 34,126 45,665

Growing Crop - Nurseries 6,605 4,877 6,605 4,877

Produce Stock 356,376 201,465 356,376 201,465

Spares and Consumables 2,271 3,455 2,271 3,455

391,655 247,714 399,378 255,462

( - ) Provision or slow moving stocks - - (6,000) (6,000)

391,655 247,714 393,378 249,462

Company Group

9. TRADE & OTHER RECEIVABLES 2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Produce Debtors - Related Companies (9.1) 117,749 93,544 117,749 93,544

- Others 48,831 104,881 48,831 104,882

Advances & Prepayments 10,802 9,064 10,802 9,064

Other Debtors 53,028 56,173 58,496 61,632

230,410 263,662 235,878 269,122

011

Rs.’000

26,403

6,605

356,376

2,271

391,655

-

391,655

31.03.2011

5.11

35.11

31.03.2011

22,500,000

22,500,000

31.03.2011

806,200

(118,700)612,322

584,727

31.03.2011

183,307

183,307

011

Rs.’000

117,749

48,831

10,802

53,028

230,410

2011

Rs.’000

34,126

6,605

356,376

2,271

399,378

(6,000)

393,378

2011

Rs.’000

117,749

48,831

10,802

58,496

235,878






Company Group9.1 TRADE RECEIVABLES FROM RELATED COMPANIES 2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Relationship

Richard Pieris Natural Foams Ltd Associate Company 93,465 62,434 93,465 62,434

Arpico Natural Latex Foam (Pvt) Ltd Related Company 32,055 32,055 32,055 32,055

Richard Peiris Export PLC Related Company 21,878 24,808 21,878 24,808

Richard Peiris Rubber Products Ltd Related Company 2,406 4,351 2,406 4,351

Arpico Flexioam (Pvt) Ltd Related Company - 1,950 - 1,950

149,804 125,599 149,804 125,599

( - ) Provision or doubtul receivables (32,055) (32,055) (32,055) (32,055)

117,749 93,544 117,749 93,544

Company Group

10. AMOUNTS DUE FROM RELATED COMPANIES 2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Relationship

Namunukula Plantations PLC Related Company 2,389 - 2,389 -

Maskeliya Plantations PLC Related Company 2,319 3,771 2,319 3,771

Hamea Kegalle (Pvt) Limited Subsidiary Company 99,171 98,338 - -

Richard Peiris & Company PLC Ultimate Parent Company 7,789 5,411 7,789 5,411

RPC Management Services (Pvt) Ltd Related Company 400 233 400 233

112,068 107,753 12,897 9,414

( - ) Provision or doubtul receivables (54,891) (54,891) - -

57,177 52,862 12,897 9,414

Company Group

11. SHORT TERM INVESTMENT 2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Investment in Treasury Bills, Repo & Others 1,289,494 719,993 1,289,494 719,993

1,289,494 719,993 1,289,494 719,993

Company Group

12. STATED CAPITAL 2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Issued and Fully Paid Number o Shares

Ordinary Shares Including one Golden

Share held by the Treasury which

has Special rights 25,000,001 25,000,001 25,000,001 25,000,001

Value o Issued and Fully Paid Shares

Ordinary Shares Including one Golden

Share held by the Treasury which

has Special rights 250,000 250,000 250,000 250,000

Note : Stated Capital represents the amount paid to the Company in respect o issuing 25,000,001 ordinary shares including

one Golden Share which has special rights.

011

Rs.’000

93,465

32,055

21,878

2,406

149,804

(32,055)

117,749

2011

Rs.’000

93,465

32,055

21,878

2,406

-

149,804

(32,055)

117,749






1 2

. 1 G e n e r a l R e s e r v e

G e n e r a l R e s e r v e r e p r e s e n t s a m o u n t s s e t - a s i d e r o m t i m e t o t i m e b y t h e D i r e c t o r s o t h

e C o m p a n y o r p u r p o s e o g e n e r a l a p p l i c a t i o n .

T h e s e h a v e b e e n a p p r o p r i a t e d b y t h e B o a

r d i n c o m p l i a n c e w i t h t h e A r t i c l e s , w h i c h p r o v i d e s o r s u c h a m o u n t s b e i n g s e t - a s i d e o r

u t u r e a n d u t i l i z e d a t e r a p p r o p r i a t e B o a r d A p p r o v a l s .

1 3

.

I N T E R E S T B E A R I N G L O A N S & B O R R O W I N G S -

C O M P A N Y / G R O U P

2 0 1 1

2 0 1 1

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b l e

T o t a l R e p a y a b l e

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T o t a l

w i t h i n

w i t h i n

a f t e r

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1 3

. 1 .

L O N G T E R M L O A N S ( S e c u r e d )

A s i a n D e v e l o p m e n t B a n k C r e d i t L i n e

2 0 1 1

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a y a b l e


w i t h i n

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22. OTHER INCOMECompany Group

2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Interest Income - Related Parties - - - -

- Others 74,240 55,145 74,240 55,145

Amortisation o Capital Grants 5,758 5,280 5,758 5,280

Sundry Income 25,953 21,304 25,953 21,304

Sale o Property, Plant & Equipment - 900 - 900

105,951 82,629 105,951 82,629

23. FINANCE COST

Company Group

2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Overdrat Interest 16 24 16 24

Interest paid to Related Parties 4 357 4 357

Interest on Government Lease 11,789 11,941 11,789 11,941

Variable Lease Rental 14,376 5,014 14,376 5,014

Arrears on Lease Rental 37,317 - 37,317 -

Term Loan Interest 53,932 48,618 53,932 48,618

117,434 65,954 117,434 65,954

Less : Interest Capitalised (2,964) (3,558) (2,964) (3,558)

114,470 62,396 114,470 62,396

24. REVERSAL / (PROVISION) FOR DOUBTFUL RECEIVABLES

This represented a reversal o a provision or doubtul debts totalling Rs. 50,958,056/- being made in respect o Richard

Pieris Natural Foams Ltd and Arpico Natural Latex Foam (Pvt) Ltd, amounting to Rs. 50,000,000/- and Rs. 958,056/-

respectively or the year 2009/10.

25. PROFIT BEFORE TAXATION IS STATED AFTER CHARGING

Company Group

2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Auditors’ Remuneration 1,744 1,627 1,744 1,627

Depreciation / Amortization 82,104 78,058 82,104 78,058

Directors’ Remuneration 1,701 4,058 1,701 4,058

Defned Beneft Plan Cost 52,223 114,914 52,223 114,914

Defned Contribution Plans - Provident Funds & ETF 92,266 75,211 92,266 75,211

Others - Sta Cost 898,850 735,426 898,850 735,426








27.2 Income Tax Payable Company Group2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Income Tax Payable 14,329 11,445 14,329 11,445

ESC Payable 2,276 1,750 2,276 1,750

SRL Payable 279 133 279 133

16,884 13,328 16,884 13,328

28. Discontinued Operations

During the year 2009/10 the group has discontinued the operation o its subsidiary Hamea Kegalle (Pvt) Ltd.

2011 2010Rs.’000 Rs.’000

Revenue - 1,140

Cost o sales - (461)

Gross Proft - 679

Other Income 4,349 3,910

Expenses (999) (1,886)

Provision or impairment loss (7,019) (13,092)

Finance cost (15) (7)

Loss rom discontinued operations (3,684) (10,396)

Taxation - -

Loss or the year rom discontinued operations (3,684) (10,396)

Earnings / (Loss) per share - Basic (1.32) (3.71)

Operating and investing cash ows or the year are presented below:

2011 2010

Rs.’000 Rs.’000

Net cash ows rom / (used in) operating activities (2,258) 1,802

Net cash ows rom investing activities - -

Assets and Liabilities

The Financial Statements o the Hamea Kegalle (Pvt) Ltd stated above have been prepared on a basis other than on a going

concern reecting the closure o operations. The aggregated amount o assets and liabilities o the above company as at

31 March 2011 are as allows;

Total Assets - Rs. 88,710,066/-

Total Liabilities - Rs. 112,442,778/-

Accordingly, adjustments have been made or the diminution in value o all property plant & equipment so as to reduce

their carrying value to their estimated realisable amount, and or any urther liabilities which will arise.

2011

Rs.’000

14,329

2,276

279

16,884

2011

Rs.’000

14,329

2,276

279

16,884

2011Rs.’000

-

-

-

4,349

(999)

(7,019)

(15)

(3,684)

-

(3,684)

(1.32)

2011

Rs.’000

(2,258)

-








30. SECURITIES PLEDGED

The ollowing assets have been pledged as securities or liabilities.

Name o Bank Loan Security Nature o Carring Amount Pledged

Facility Liability 2011 2010

Rs. Mn. Rs.’000 Rs.’000

Bank o Ceylon 35.0 Mn Primary mortgage over leaseholdrights o Gampaha Estate. Overdrat 87,940 78,390

Hatton National Bank PLC 50.0 Mn Primary mortgage over leaseholdrights o Luckyland Estate. Overdrat

Hatton National Bank PLC 15.8 Mn Existing primary mortgage over 133,353 128,172

leasehold rights o Luckyland Estate. Term Loan

Asian Development 526.7 Mn Corporate Guarantee by RichardBank / National Pieris and Company PLC or Rs. 33Mn.Development Primary and secondary mortgage overBank PLC leasehold rights o Atale, Pallegama,

Parambe, Weniwella, and YataderiyaEstates. Primary mortgage overleasehold rights o Etana, Doteloya,Kirklees, and urther mortgage overPallegama, Parambe, Weniwella, andYataderiya Estates. Term Loan 869,112 801,166

Asian Development Bank / 55.7 Mn Primary mortgage over leasehold

Seylan Bank PLC rights o Eadella Estate. Term Loan 114,361 109,692

Hatton National Bank PLC 100.0 Mn Board Resolution. Term Loan - -

Lanka Orix Leasing 10.6 Mn Pledged over a Colour SorterCompany PLC o Luckyland Estate. Term Loan 9,580 11,497

National Development 44.0 Mn Securitised Sales Proceeds. Term Loan - -Bank PLC

* Corporate Guarantee by Kegalle Plantations PLC or Rs. 25 Mn given to Maskeliya Tea Gardens Ceylon Ltd.

31. CAPITAL COMMITMENTS

Following are the capital commitments as at the Balance Sheet date;

Company Group2011 2010 2011 2010Rs.’000 Rs.’000 Rs.’000 Rs.’000

Approved by the Board & Contracted or Nil Nil Nil NilApproved by the Board & not Contracted or 408,848 374,839 408,848 374,839

408,848 374,839 408,848 374,83932. CONTINGENT LIABILITIES

No known contingent liabilities exist as at the Balance Sheet date, other than those disclosed in Notes 14 & 16 to theFinancial Statements.

33. POST BALANCE SHEET EVENTS

Final Dividend o Rs. 12.5 Mn (50 cents per share) has been declared ater the Balance Sheet date.

2011

Rs.’000

87,940

133,353

869,112

114,361

-

9,580

-

2011Rs.’000

Nil408,848408,848

011Rs.’000

Nil408,848408,848






34. Related Party Disclosures

34.1 Transaction with related entities

Nature o Transactions Company Group

2011 2010 2011 2010

Rs.’000 Rs.’000 Rs.’000 Rs.’000

34.1.1 Parent Company

Amount Receivable as at 31 March - - - -

Amount Payable as at 31 March (15,473) (36,629) (15,473) (36,629)

Managing Agent’s Fee (195,503) (82,802) (195,503) (82,802)

Settlement o Management Fee 218,463 41,800 218,463 41,800

Recovery o Expenses (1,804) (3,682) (1,804) (3,682)

34.1.2 Subsidiaries

Amount Receivable as at 31 March 99,171 98,338 - -

Amount Payable as at 31 March - - - -

Sale o Rubber Logs - 1,964 - -

Other Administration Expenses 833 131 - -

34.1.3 Associates

Amount Receivable as at 31 March 93,465 62,434 93,465 62,434

Amount Payable as at 31 March - - - -Investment in Ordinary Shares - (150,000) - (150,000)

Sale o Rubber 559,729 363,368 559,729 363,368

Settlement Amount (528,698) (343,241) (528,698) (343,241)

Reversal/(Provision) or Doubtul Receivable - 50,000 - 50,000

34.1.4 Related Companies

Amount Receivable as at 31 March 69,235 72,579 69,235 72,579

Amount Payable as at 31 March (324) (3,198) (9,003) (13,975)

Recovery o Expenses - (4,569) - (4,569)

Salaries, Rent, Vehicle Repairs & Other Expenses (2,800) (987) (2,800) (987)

Purchase o Goods (81,720) (58,070) (81,720) (58,445)

Settlement o Dues 87,189 55,932 89,287 55,932

Sale o Goods 262,253 138,150 262,253 138,150

Sales Cash Receipts (269,079) (127,663) (269,079) (127,663)

Secretarial Fees (200) (200) (200) (200)

Freight Charges (2,471) (2,446) (2,471) (2,446)

Repo Interest Receivable 68,357 49,905 68,357 49,905

Repo Interest Settlement (62,000) (49,900) (62,000) (49,900)

Reversal/(Provision) or Doubtul Receivable - 958 - 958






34.1.5 Terms and conditions

Transactions with related parties are carried out in the ordinary course o business. Outstanding balances at the year end

are unsecured and net settlement occurs in cash.

34.2 Transactions with key management personnel o the Company

There were no transactions with the key management personnel o the Company and its parent or the year ended 31

March 2011. Further there were no key management compensation paid during the year other than those disclosed in

Note 25.

34.3 Other related party disclosures

Legal ees amounting to Rs. 369,675/- (2010 - Rs. 407,339/-) by the Company was paid to an entity in which a key

management personnel was a partner.

34.4 Related Party Transactions

There are no related party transactions other than those disclosed in Notes 7,9.1,10,13,20,22,23,24,26,28,30 & 34 to the

Financial Statements.







Year Ended 3/31/11 3/31/10 3/31/09 3/31/08 3/31/07 3/31/06 3/31/05 3/31/04 3/31/03 3/31/02

Rs ‘000

Operating Results

Turnover 2,991,762 2,216,497 1,927,762 2,163,030 1,819,020 1,513,578 1,294,220 1,112,598 850,368 693,832

Operating Proft beore Mgt Fee 1,225,085 492,193 423,185 589,392 480,736 333,147 228,324 189,315 97,584 10,861

Proft beore Interest and tax 1,031,593 410,000 351,436 481,984 393,599 250,466 173,789 127,866 60,695 (16,545)

Proft/ (Loss) ater Tax 883,127 376,030 177,411 427,597 311,323 191,447 125,217 80,656 (69,489) (56,170)

Dividends 75,000 75,000 25,000 125,000 75,000 62,500 37,500 37,500 nil nil

Capital Expenditure 200,244 183,036 165,940 119,209 94,448 107,168 69,958 61,228 73,540 79,631

Financial Position

Fixed Assets 1,932,820 1,814,679 1,564,998 1,466,538 1,333,664 1,295,555 1,224,646 1,193,426 1,841,541 1,151,144

Investments 225,000 225,000 80,298 75,000 2,401 8,709 12,828 12,908 - 257,543

Current Assets 1,999,003 1,325,104 946,549 863,732 674,825 516,227 350,715 231,085 189,072 156,799

Current Liabilities 366,373 317,718 196,801 214,234 269,562 422,592 310,681 248,562 245,721 359,843

Shareholders’ Funds 2,443,938 1,698,311 1,347,281 1,219,870 942,273 692,118 538,171 450,454 369,798 439,287

Stated Capital 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000

Reserves 2,193,938 1,448,311 1,097,281 969,870 692,273 442,118 288,171 200,454 119,798 189,287

Key Financial Indicators

Current Ratio (Times) 5.46 4.17 4.81 4.03 2.50 1.22 1.13 0.93 0.77 0.44

Quick Asset Ratio (Times) 4.39 3.39 4.07 3.09 1.73 0.82 0.70 0.53 0.43 0.22

Debt Equity Ratio (Times) 0.13 0.19 0.21 0.19 0.25 0.38 0.41 0.44 0.49 0.52

Interest Cover (Times) 8.78 6.22 5.90 10.53 5.65 4.01 2.96 2.10 0.98 0.96Equity /Asset Ratio (Times) 0.62 0.54 0.54 0.52 0.47 0.38 0.34 0.31 0.27 0.28

Earnings per Share (Rs.) 35.33 15.04 7.10 17.10 12.45 7.66 5.01 3.23 (2.78) (2.25)

Market Price o a Share (Rs.) 207.50 47.00 19.00 60.00 42.00 40.00 22.00 13.25 10.50 8.50

Price Earning Ratio (Times) 5.87 3.12 2.68 3.51 3.37 5.22 4.39 4.10 (3.78) 39.71

Dividend Cover (Times) 11.78 5.01 7.10 3.42 4.15 3.06 3.34 2.15 n/a -

Dividend Pay Out Ratio (%) 8.49 19.95 14.08 29.24 24.10 32.64 29.94 46.44 - -

Annual Production

Rubber - kg ‘000 4,082 4,578 5,102 5,436 5,375 5,688 5,486 5,736 5,378 5,434

Tea - kg ‘000 2,773 2,479 2,492 2,797 3,126 3,422 3,021 3,034 2,568 2,596

Coconut - nuts ‘000 1,413 1,572 1,610 1,472 1,788 1,406 1,230 1,392 1,243 1,381

Ten Year Summary

10 20 30 40 50 60 70 80 90 100

Funding

Assets

Assets & FundingIn percentage

In flow Out flow

Current Liabilities LandDeferred Income Other Fixed Assets

Long term Liabilities InvestmentsShareholders' Funds Current Assets

0

500

1,000

1,500

2,000

2,500

3,000

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

Shareholders' Funds

Rs. '000





Historical Note

ATALE ESTATE - KEGALLE

Atale estate, planted in 1904, was one o the estates originally

owned by Messrs. Grand Central (Ceylon) Rubber Estates Ltd,

which owned 43,000 acres and was managed by Messrs. Carson

Cumberbatch & Company Limited. This estate consisted o six

divisions in Atale, Maboda, Boyagoda, Dickhena, New and Old

Arandara and in 1972 two neighbouring estates namely Dorpet

and Myland, managed by proprietors themselves were handed

over to Messrs. Carson Cumberbatch & Company Limited or

management who amalgamated the estates with Atale Estate

or management purposes and thereater the number o

divisions increased to eight. In the year 1974 the ownership o

Atale Estate was vested with Messrs. Upali Group.

With the implementation o Land Reorm Act in 1976, this estatewas vested with the Government and was managed by one o

the Statutory Boards, the Janatha Estates Development Board

(JEDB) and was under the Kegalle Regional Board o the JEDB.

With the privatization o estates on the 22 June 1992 the estate

was vested with Kegalle Plantations PLC. Ater privatization,

Pindenioya Estate, situated bordering Atale was amalgamated

with Atale Estate or administrative reasons and the present

extent o the estates is 1,150 ha.

Thus Atale Estate becomes the largest Rubber estate in Sri

Lanka situated in Kegalle District o Sabaragamuwa Province

covering seven (7) Gramaniladhari divisions, viz; Atale,

Arandara, Udugama, Bisowela, Nadeniya, Holombuwa and

Bambaragama.







1. Stock Exchange

The issued Ordinary Share o Kegalle Plantations PLC, are listed with Colombo Stock Exchange (CSE) o Sri Lanka. The

Audited Financials o the Company or the year ended 31 March, 2011 have been submitted to the Colombo Stock Exchange

within two months o the Balance Sheet date.

2. Distribution o Shareholders 2011 2010

No o Shares Held No o Share

Holders No o Shares % Holdings % Holdings

1 - 1,000 9,191 2,077,991 8.31% 7.95%

1,001 - 5,000 265 705,785 2.82% 2.37%5,001 - 10,000 59 434,922 1.74% 1.63%

10,001 - 50,000 56 1,153,603 4.61% 4.75%

50,001 - 100,000 20 1,541,900 6.17% 2.61%

100,001 - 500,000 9 1,441,900 5.77% 10.35%

500,001 - 1,000,000 1 628,800 2.52% 2.29%

1,000,001 - & above 1 17,015,100 68.06% 68.06%

Total 9,602 25,000,001 100.00% 100.00%

Resident 9,554 24,248,893 96.99% 96.37%

Non Resident 48 751,108 3.01% 3.63%

Total 9,602 25,000,001 100.00% 100.00%

Individuals 9,460 4,221,420 16.89% 16.98%Company 142 20,778,581 83.11% 83.02%

Total 9,602 25,000,001 100.00% 100.00%

Related Parties 1 17,015,100 68.06% 68.06%

General Public including Employees 9,601 7,984,901 31.94% 31.94%

Total 9,602 25,000,001 100.00% 100.00%

Public Holding : The percentage o shares held by the public is 31.94% o the issued Share Capital o the Company.

3. Dividends

Final dividend o 50 cents per share has been proposed in addition to the Interim Dividend o Rs. 2.50 per share pad inMarch 2011 (2010 – Rs. 3/-).

4. The Golden Shareholder

The Golden Share o Rs.10/- is currently held by the Secretary to the Treasury and should be owned either directly by

the Government o Sri Lanka or by a 100% Government owned public Company. In addition to the rights o the normal

ordinary shareholder, the Golden Shareholder has the ollowing rights;

1) The concurrence o the Golden Shareholder will be required or the Company to sublease any o the estate land leased/to

be leased to the Company by the Janatha Estate Development Board/Sri Lanka State Plantations.

2) The concurrence o the Golden Shareholder will be required to amend any clause in the article o association o the

Shareholder & Investor Information





Company which grants special rights to the Golden Shareholder.3) The Golden Shareholder or his nominee will have the right to examine the books and accounts o the Company at any time

with two weeks o written notice.

4) The Company will be required to be submitted a detailed quarterly accounts report to the Golden Shareholder in a specifed

ormat within 60 days o the end o each quarter. Additional inormation relating to the Company in a specifed ormat must

be submitted to the Golden Shareholder within 90 days o the end o each fnancial year.

5) The Golden Shareholder can request the Board o Directors o the Company to meet with him/his Nominee, once in every

quarter to discuss issues related to the Company’s operation o interest to the Government.

5. Share Inormation

Market Value 2011 2010

Highest Price - Rs. 285.00 (08 February 2011) 52.00 (02 February 2010)

Lowest Price - Rs. 47.50 (01 April 2010) 19.00 (06 April 2009)

Closing Price - Rs. 207.50 (31 March 2011) 47.00 (31 March 2010)

Share Trading

No. o Shares Traded 18,287,600 6,905,600

No. o Trades 11,488 3,961

Value o Shares Traded - Rs. 2,561,497,450 244,069,325

Key Ratios

Earnings per Share 35.33 15.04

Net Assets per Share 97.76 67.93

Dividends per SHare 3.00 3.00

6. Twenty Largest Shareholders

As at 31 March 2011 31 March 2010

Number o % o the Number o % o theShares Holding Shares Holding

RPC Plantation Management Services (Pvt) Ltd 17,015,100 68.06% 17,015,100 68.06%

J B Cocoshell (Pvt) Ltd 628,800 2.52% 362,500 1.45%

Almar Trading Co. (Pvt) Ltd 221,300 0.89% 77,300 0.31%

HSBC International Nominees Ltd-SSBT-Deustche Bank 200,000 0.80% 205,000 0.82%

Tranz Dominion, L.L.C 185,000 0.74% 185,000 0.74%

Commercial Bank O Ceylon PLC / D.R. Costa 154,600 0.62% - -

Cocoshell Activated Carbon Company Limited 153,500 0.61% 146,100 0.58%

Commercial Bank O Ceylon PLC / D.S.J.V. Costa 140,500 0.56% - -

Mrs. N. Muljie 135,100 0.54% 135,100 0.54%

Waldock Mackenzie Ltd /Hi - Line Towers (Pvt) Ltd 129,600 0.52% - -

Mas Capital (Private) Ltd 122,300 0.49% 99,800 0.40%

Deutsche Bank AG As Trustee or Namal Acuity 100,000 0.40% - -Deutsche Bank AG - National Equity Fund 100,000 0.40% - -

Pershing LLC S/A Averbach Grauson & Co. 95,600 0.38% 296,800 1.19%

Janashakthi Insurance Co. Ltd (Policy Holders) 94,800 0.38% - -

Mr. P. Subasinghe 92,400 0.37% - -

Mr. M.M. Fuad 92,300 0.37% - -

Ceylon Guardian Investment Trust PLC A/C No. 01 87,900 0.35% - -

Mr. M. J. Fernando 85,500 0.34% - -

Askold (Pvt) Ltd. 85,000 0.34% - -

Sub Total 19,919,300 79.68% - -

Balance held by 9,582 Shareholders

(2009/10 - 9,349 Shareholders) 5,080,701 20.32% 4,406,600 18.00%

Total Shares 25,000,001 100.00% 25,000,001 100.00%

Shareholder & Investor Information Contd....





Shareholder & Investor Information Contd....

8. Other Share Inormation

The perormance o Kegalle Plantations PLC’s share is as ollows compared to the perormances o Plantations Sector Index

(PLT), Milanka Price Index (MPL), and All Share Price Index (ASI) in the Share Market during the year.

Kegalle Plantations PLC’s share inormation rom Colombo Stock Exchange (CSE) website:

- Log on to Colombo Stock Exchange - website: www.cse.lk

- Enter Company code(KGAL.N000) in the search box at the top right hand corner o

CSE home page and go to the Company description.

7. Exchange Rates - US $ (Selling)2011 2010 2009 2008

As at 31 March (Rs.) 111.33 114.84 115.50 107.75

Share Volume Share Price

-

50

100

150

200

250

-

500

1,000

1,500

2,000

2,500

3,000

3,500

A p r - 1

0

M a y - 1 0

J u n - 1

0

J u l - 1

0

A u g - 1 0

S e p - 1 0

O c t - 1

0

N o v - 1 0

D e c - 1 0

J a n - 1 1

F e b - 1 1

M a r - 1 1

S h a r e P r i c e ( R s . )

S h a r e V o l u m e ( ' 0 0 0 )

KPL Share Price & Transaction Volume

0

100

200

300

400

500

600

A p r - 1 0

A p r - 1 0

A p r - 1 0

M a y - 1 0

M a y - 1 0

J u n - 1 0

J u n - 1 0

J u l - 1 0

J u l - 1 0

J u l - 1 0

A u g - 1 0

A u g - 1 0

A u g - 1 0

S e p - 1 0

S e p - 1 0

O c t - 1 0

O c t - 1 0

O c t - 1 0

N o v - 1 0

N o v - 1 0

D e c - 1 0

D e c - 1 0

D e c - 1 0

J a n - 1 1

J a n - 1 1

F e b - 1 1

F e b - 1 1

M a r - 1 1

M a r - 1 1

I n d e x V a l u e

KPL Share Price Vs Market Indices

KPL Share PriceMPI

PLT

ASI

17.02

7.98

Shareholder Structure As At March 2011

No of Shares with %

RPC Plantation

Management

Services (Pvt) Ltd

Public Holding

68.06%

31.94%





'HÀQLWLRQV

ANRPCAssociation o Natural Rubber Producing Countries.

Borrowing CostsBorrowing Costs are interest and other costs incurred by anenterprise in connection with borrowing o unds.

Capital Employed The sum o Shareholders’ Funds, Long Term & Short Term Interestbearing Borrowings.

COPCost o Production. Generally reers to the cost o producing onekilo o produce.

Contingent Liabilities

Condition or situations at the Balance Sheet date, the fnancialeects o which are to be determined by uture events, which mayor may not occur.

Current RatioCurrent Assets divided by Current liabilities.

Dividend CoverProfts ater tax divided by Dividends.

Equity/Assets RatioShareholders Funds divided by Long Term Assets plus CurrentAssets.

Earnings Per ShareProft ater Tax divided by weighted average number o OrdinaryShares outstanding during the period.

Enterprise ValueMarket Capitalization plus net debt.

GearingLong Term Interest bearing Borrowings/Liabilities as a percentageo Shareholders’ Funds plus Long Term Interest bearing Borrowings/Liabilities.

HACCPHazard Analysis and Critical Control Point System, Internationallyaccepted ood saety standard.

ISO

International Standards Organization.

Interest CoverProft beore Tax plus Interest Charges divided by Interest Charges,including Interest Capitalized.

Inflling A method o feld development whereby planting o individualplants is done in order to fll the vacancies o existing revenuefelds.

Net AssetsSum o Fixed Assets and Current Assets less Total Liabilities.

Net price Per ShareNet Assets at the end o period divided by the number o OrdinaryShares issued.

Market CapitalizationNumber o shares in issue, multiplied by the market value o eachshares at the year end.

Price Earning RatioMarket price o a share divided by Earnings per Share.

Related PartiesParties who could control or signifcantly inuence the fnancialand operating policies o the Company.

Return on Average Equity

Net income expressed as a percentage o Average Shareholders’Funds.

Return on Capital Employed (ROCE)Proft ater Tax plus Interest on Loans divided by the Equity Funds,Long Term Loans and Short Term Loans.

General ReserveReserve available or distribution and investment.

RSS-1Ribbed Smoked Sheet - Grade 1

ReplantingA method o feld development where an entire unit o land istaken out o “bearing” and developed by way o uprooting theexisting trees/bushes and replanting with new trees/bushes.

Turnover per EmployeeConsolidated turnover o the Company or the year divided by thenumber o employees at the year end.

GSAGross Sale Average. Average sale price obtained (over a periodo time, or a kilo o produce) beore any deductions such asbrokerage, etc.

NSANet Sales Average per kilo.

Shareholders’ Funds

Funds attributable to Shareholders which consist o Share Capital,Reserves and Retained Proft.

SLASSri Lanka Accounting Standards.

UITFUrgent Issues Task Force o the Institute o Chartered Accountants.

Value Addition The quantum o wealth generated by the activities o the Companyand its application.

Yield (YPH)Average yearly output o produce rom a hectare o plantation.





Notes







OTICE IS HEREBY GIVEN that the Eighteenth (18th) Annual General Meeting o Kegalle Plantations PLC will be held atthe Registered Oce, No. 310, High Level Road, Nawinna, Maharagama on Thursday, 30 June 2011 at 10.00 a.m. and the

business to be brought beore the meeting will be as ollows;

1. To consider the Report o the Directors and the Statement o Accounts or the year ended 31 March 2011 with the

Report o the Auditors thereon.

2. To declare a dividend as recommended by the Directors.

3. To re-elect Mr. J H P Ratnayeke, who retires by rotation in terms o Article 92 at the Annual General Meeting, a Director

4. To elect Dr. Gerry Jayawardena, who retires in terms o Article 98 at the Annual General Meeting, a Director

5. To re - appoint Messrs. Ernst & Young, Chartered Accountants as Auditors o the Company and to authorize the Directors

to determine their remuneration.

6. To authorize the Directors to determine contributions to charities

7. To consider any other business o which due notice has been given.

To consider and i thought ft pass the ollowing Special Resolutions in order to amend the Articles o Association o the Company

in the manner ollowing;

SPECIAL RESOLUTION NO. I

I. That Interpretation o Article No. 2 o the word “Directors “ be amended as ollows;

2. INTERPRETATION

Director a Director o the Company, whether an Appointed Director, Elected Director or an Alternate

Director, Nominee Director

SPECIAL RESOLUTION NO. II

II. That Interpretation o Article No. 2 be amended including the words “Nominee Director “ as ollows

2. INTERPRETATION

Nominee Director a Director o the Company, appointed by nomination

SPECIAL RESOLUTION NO. III

III That the ollowing Article 78 (h) be included immediately ollowing the existing Article 78 (g) to read as ollows,

(a) A shareholder who is holding more than 60% shares in the Stated Capital o the Company shall be entitled to nominate

Directors to the Board o Directors o the Company and Directors so appointed shall in these rules be reerred to as

Nominee Directors.

Notice of Meeting

N





Notice of Meeting Contd....

SPECIAL RESOLUTION NO. IV

IV. That the existing Article No. 91 be deleted in its entirety and be substituted by the ollowing in its place,

(91) The oce o Director shall, ipso acto, be vacated i the Director —

(a) resigns oce by giving notice in writing to the Company

(b) is removed rom oce in accordance with the provisions o the Act or these articles

(c) becomes disqualifed rom being a director pursuant to section 202 o the Act

(d) dies or

(e) vacates oce pursuant to subsection (2) o section 210 o the Act , on the ground o his age

( ) i being a nominee Director the nomination is revoked by the person (s)/ entity nominating such a director

(g) i requested in writing by a majority o his co-directors to resign

(h) shall or more than six months have been absent without permission o the Directors rom meetings o theDirectors held during that period

(i) being an Appointed Director the appointment o such directors is revoked in writing to the Company by the

Secretary to the Treasury or person authorized to do so in writing by the Secretary to the Treasury

(j) is or becomes a director in any other Company that carries on inter alia the business o managing plantations and

i all other directors constituting the Board o Directors resolve that such director should vacate his position as a

director o the Company

SPECIAL RESOLUTION No. V

V. That the ollowing Article 111 (c) be included immediately ater the existing Article 111(b) to read as ollows,

(c) The Directors who are holding any executive oce in the Company will cease to be a director, consequent on thetermination o his appointment in the Company.

By Order o the Board

(Sgd.)

Richard Pieris Group Services (Private) Limited

Secretaries

No. 310, High Level Road, Nawinna, Maharagama

27 May 2011

Note:

a) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead o him/her.

b) A proxy need not be a member o the Company. The orm o proxy will be ound inserted in the Annual Report.

c) The completed orm o proxy should be deposited at No. 310, High Level Road, Nawinna, Maharagama., not less than 48

hours beore the time appointed or the holding o the meeting.










Documents

Kegalle Plantations PLC- Annual Report 2010