sri lanka telecom

iSamSon international PlC annual report 2013/14

Evolution of the Company

Samson International Plc is a subsidiary of the DSI Samson Group (Pvt) Ltd. The parent Company was founded in 1962. DSI Samson Group has an export turnover of more than 1% of the countrys total export

turnover and has a workforce of 8,500 employees. The majority of their factories are located in remote rural

areas. Samson International PLC is one of them.

Samson International Plc started its business on 14th October 1988 at a time the open economic policies

had got firmly established in the country with a great tendency among the business community to commence

export-oriented projects. Accordingly, this Company was intended to produce rubber-based products largely

for export markets.

Samson International Plc now manufactures and exports molded and extruded rubber products such as hot

water bottles, jar sealing rings, rubber mats, rubber floorings, beadings and mud flaps mainly to international

markets. Samson International Plc has 324 employees and the main factory is situated at Bogahagoda, Galle.

Milestones

1988SamsonInternationalLtd.wasincorporatedasaPrivateCompanyon14th October, 1988

1992-Ordinarysharesof theCompanywere listed in theColomboStockExchange and became a public quoted company as Samson International Plc

on 24th July, 1992

1994-WasawardedthefirstISO9001:2008qualitymanagementcertificate among the rubber-related product manufacturing companies in

Sri Lanka

2007-InvestedinthefirstmicrowavecontinuouslinemachineinSriLanka.(This is the only microwave machine in South Asia)

2009-PurchasedallassetsofAkselRubberMatCompany,Kalutara

2012-WasawardedtheGoldExportAwardfromtheNationalChamberofExporters of Sri Lanka

2013WasawardedtheGoldExportAwardfromtheNationalChamberofExporters of Sri Lanka for the second consecutive year when the Company

celebrated its Silver Jubilee

2014-PurchasedassetsofOktaPVCLanka(Private)Ltd.,Baddegama,andsteppedintomanufacturingPVCproducts

cOntents

Page

1) Financial highlights 01

2) OurCorporateVision,Mission,ValuesandourAim 02

3) Chairmans review In English 03 - 06

4) ChairmansreviewinSinhala 07-09

5) ManagingDirectorsoperationalreview 10-13

6) Corporate information 14 - 15

7) TheBoardofDirectors 16-17

8) Profi les of Directors 18 - 19

9) Executive management 20 - 23

10) Managementdiscussion&analysis 24-52

11) Corporate governance 53 - 58

12) Riskmanagement 59-64

13) ReportoftheBoardofDirectors 65-70

14) StatementofDirectorsresponsibilities 71

15) AuditCommitteeReport 72-73

16) RemunerationCommitteeReport 74

17) FinancialReview 75-76

18) AuditorsReport 77

19) FinancialStatement 78-107

20) SustainabilityReport 108-121

21) GlobalReportingInitiative 122-126

22) InvestorInformation 127-130

23) Four-Quarter Financial Summary 131

24) Ten- year Economic Summary 132

25) Ten-year Financial Summary 133

26) Foreign Currency Financial Statement 134

27) GlossaryofFinancialTerms 135

28) NoticeoftheAGM 136

29) DirectiontothevenueoftheAGM 137

30) Notes 138

31) Form of Proxy Enclosed

SamSon international PlC annual report 2013/14

Profit Before Tax (Rs.000) Finance Cost (Rs.000)

NetAssetsPerShare(Rs.) FixedAssetTurnoverRatio(Times)

(7,608)

(55,980)

19,123

51,077

64,841

(80,000) (60,000) (40,000) (20,000)

-

20,000

40,000

60,000

80,000

2009/10 2010/11 2011/12 2012/13 2013/14

17,161

21,922

10,106 9,900

3,780

-

5,000

10,000

15,000

20,000

25,000

2009/10 2010/11 2011/12 2012/13 2013/14

102.87

88.27 91.75 104.00

117.00

-

20

40

60

80

100

120

140

2009/10 2010/11 2011/12 2012/13 2013/14

3.44 7.71

4.95

5.31 5.45

-

1

2

3

4

5

6

2009/10 2010/11 2011/12 2012/13 2013/14

Profit before tax increased by 27% or Rs. 13.7mnFinance cost decreased by 62% or Rs. 6.0mnFinancial investments increased by Rs. 50mn

Profit before tax increased by 27% or Rs. 13.7mnFinance cost decreased by 62% or Rs. 6.0mnFinancial investments increased by Rs. 50mn

1SamSon international PlC annual report 2013/14

2013/14 2012/13 Variance %

Operating Results

Revenue Rs.000 952,561 973,858 (21,297) (2)

Profitbeforetax Rs.000 64,841 51,077 13,764 27

Taxonprofit Rs.000 8,491 (4,438) 12,929 291

Profitaftertax Rs.000 56,350 55,515 835 1.5

Exportsearnings inUS$000 4,753 5,235 (482) (9)

Valueadditions Rs.000 227,496 199,631 27,865 14

Interest cover times 18.15 6.15

ROCE % 12.5 13.8 (1.3)

Gross profit to Sales % 15.2 15.3 (0.1)

Valueadditionsperemployee Rs/month 58,512 55,085 3,427 6.2

Manpower Nos. 324 302 22 7.3

Financial Position

Dividendcover times 7.3 7.2

Currentratio times 2.37 2.39

Gearing % 6.8 13.2 (6.4)

Financecost Rs.000 3,780 9,900 (6,120) (62)

FinancialInvestments Rs.000 50,354 - 50,354

Totalassets Rs.000 654,125 593,108 61,017 10.2

Cashgeneratedfromoperations Rs.000 136,204 17,785 118,419 666

Shareholder information

Dividendpershare Rs. 2.00 2.00 - -

Marketpricepershare-Closing Rs. 88.20 82.20 6.00 7

Earningspershare Rs. 14.64 14.43 0.21 1.5

Netassetspershare Rs. 116.82 104.18 12.64 12

Numberofsharesissued Nos. 3,847,974 3,847,974 - -

NumberofShareholders Nos. 1,125 1,127 (2) (0.2)

Marketcapitalization Rs.000 339,391 316,303 23,088 7

ShareholdersFunds Rs.000 449,558 400,904 48,654 12

Price earnings ratio times 6.02 5.69 0.33 5.8

Financial HighlightsFinancial Highlights


Our Vision

To be a leading Polymer Product manufacturer in the region.

Our Mission

To become a versatile manufacturer of diversified polymer products in the globalmarketbyutilizingmoderntechnologywhileprovidingoptimum

value to Stakeholders.

Our Values

Contributing to the Socio-economic development,Respecting national and religious heritage,Protecting and safeguarding our environment,Enhancing disciplined human resources based on the family concept.

Our Aim

Aiming at versatility in all polymer products

During the last 25 years, we have maintained a benchmark for having arguably the widest product range among the rubber products manufacturing companies in Sri Lanka.

WearemovingonbeyondourSilverJubilee,determinedtoexpandourpolymerproducts

range and invest in modern technology aimed at versatility.

Wealsocontinuetobecommittedtocontributetothenationaleconomy,servingtherural

areas in the Southern Province by using local raw materials, opening direct employment

avenues for neighbouring villages, generating foreign exchange and nurturing our

indigenousheritageasasociallyresponsiblecorporatecitizenwhileaimingatversatilityandmovingforwardinthedirectionofourVision.

Our cOrpOrateVision, Mission, Values and aim


cHairMans review

It is observed that currently, more than half of

Sri Lankan exports are still centered on the US

and EU markets. We would be severely affected

if the economies in both the US and EU decline.

To minimize the risk, the right mixture of exports

has to be identifi ed. In view of this, we all have to

develop the Chinese, Japanese and South Asian

markets

ItismypleasuretopresenttheAnnualReportofSamsonInternationalPlcfortheyearended31stMarch2014.As

you are aware, Samson International Plc was incorporated on

14th October 1988 and we celebrated our silver jubilee this

fi nancial year.

Global Economic outlookIn 2013, the global economic growth was estimated at 3

percent which is a marginal drop from 3.2 percent recorded

in2012.AsprojectedintheIMFforecast,globalgrowthwill

strengthen from 3 percent in 2013 to 3.6 percent in 2014 and

3.9 percent in 2015.

6

5.2

3.93.2 3

3.63.9

5

4

2

3

1

02010 2011 2012 2013 2014 2015

5.2

2010

3.9

2011

3.2

2012

3

2013

3.6

2014

3.9

2015

World Economic Output Growth (%)%

Source : IMF World Economic Outlook Report of April 2014


Whenwelookattheforeigncurrencytrends,forsome

currencies the foreign exchange market was highly volatile. The

Japanese Yen recorded 18.1 percent depreciation against the

dollar where currencies such as the Euro, Sterling Pound and

theSouthAfricanRandsignificantlyappreciatedagainstthe

dollar. Infl ation remained stable in many economies in 2013

while a few developed economies faced defl ationary pressures.

Sri Lankan Economic OutlookTheSriLankaneconomyrecordeda7.3percentgrowthin

2013 while infl ation remained at single digit levels for the fi fth

consecutiveyear,steadilydecliningtomidsingledigitlevels

by the end of 2013. Though remaining at a low level of 4.4

percent in 2013, the unemployment level recorded a slight

increase of 0.4 percent compared to the previous year due to

new job seekers entering the labour market. Infl ation trended

downward in 2013, averaging 6.9% in the year. Economic

growth was broad based with contributions from all sectors,

supported by favorable weather conditions.

The Sri Lankan economy was projected to accelerate further

in the medium term to an annual growth rate of 8 percent.

This economic growth target is expected to be supported by

infrastructure expansion in transport, telecommunication, ports

and growth of tourism. The services sector made the largest

contributiontogrowthin2013.Rapidgrowthinwholesale

and retail trade, hotels and restaurants, transport, banking,

insurance and real estate enhanced performance in the large

service sector to 6.4% from 4.6% a year earlier. Industry grew

by 9.9%, slightly less than a year earlier, as slower growth

in mining and quarrying and in construction offset a pickup

in manufacturing and utilities. Favourable weather helped

maintainagriculturegrowthatarelativelyfavourable4.7%.

Whenwelookfurther,foodinflationwasatabout12%during

the fi rst quarter as the drought late in 2012 had disrupted

domestic food supplies, but then dropped markedly to 0.9%

inFebruary2014.Non-foodinflationwasalsoloweroverthe

yearbutincreasedto7.1%inJanuary2014.

cHairMans statement (contd...)

-6

-4

-2

0

2

4

6

8

10

12

14

16

2005 2005 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015

Emergind and Devoloping Emergind and Devoloping Emergind and Devoloping Emergind and Devoloping Asia Asia Asia India India India India China China China China

Economic Growth (%) Economic Growth (%) Economic Growth (%) Source : World Economic Source : World Economic Outlook Apr 2014 Outlook Apr 2014

-6

-4

-2

0

2

4

6

2005 2005 2005 2005 2006 2007 2008 2008 2008 2008 2008 2008 2008 2009 2010 2020111111 2012 2013 2014 2015 2015

United States United States United States United States Japan Japan Advanced Economies Advanced Economies Advanced Economies Advanced Economies

Economic Growth (%) Source : World Economic Source : World Economic Outlook Apr 2014

AccordingtoIMFWorldEconomicOutlookReportofApril

2014, the USA, Euro area ( Germany, France, Italy and Spain),

Japan,UKandCanadahaveadvancedeconomies.The

economic activities in these countries struggled in the fi rst half

but grew fi rmly in the second half of the year and recorded

1.4 percent growth in 2013 compared to 1.3 percent in 2012.

In these countries, growth is expected to increase to about

2.2percentin2014.Keydriversofsuchgrowthwillbea

reduction in fi scal tightening (except in Japan) while pursuing

accommodative monetary measures . Growth will be strongest

in the United States at about 2.8 percent while in the Euro area

growth is projected to be positive but varied area depending on

the extent of debt and fi nancial fragmentation.

-6

-4

-2

0

2

4

6

2005 2005 2005 2006 2007 2008 2008 2008 2008 2009 2010 2011 2012 2012 2012 2013 2013 2013 2014 2015 2015

Euro Euro Area France France Germony Germony Germony Germony

Economic Growth (%) Source : World Economic Outlook Apr 2014 Outlook Apr 2014

Economic activity in many emerging market economies ( i.e.,

China,India,Indonesia,Malaysia,Philippines,Thailandand

Vietnam)hasbeendisappointinginalessfavorableexternal

fi nancial environment, although they continue to contribute

more than two-thirds of global growth. Some emerging

economies slowed in growth due to weaker domestic demand

than anticipated and the growth recorded by emerging

economieswas4.7percent,whichisa0.2percentdrop

fromthepreviousyear.AccordingtoIMF,inChinagrowthis

projectedtoremainatabout7.5percentin2014.

%

%

%





The 2013 fi scal defi cit is estimated at 5.8% of GDP in keeping

with the target. The target was achieved notwithstanding

unexpectedly weak revenues by reducing current expenditure.

Capital expenditure was largely sustained but was again

slightly below the target of 6% of GDP. The ratio of

governmentdebttoGDPfellto78.4%inSeptember2013

from79.1%in2012.

There was a turnaround in external demand during the

secondhalfofthefinancialyear2013/14withthegradual

improvement in the advanced economies including the United

States and the European Union, which are Sri Lankas major

export destinations. Currently, more than half of Sri Lankan

exportsarestillcentredontheUSandEUmarkets.Wewould

be severely affected if the economies of both the US and the

EUdecline.Tominimizetherisk,therightmixtureofexports

has to be identifi ed. In view of this, we have all to develop the

Chinese, Japanese and South Asian markets.

Withtheflexibleexchangeratepoliciesofthegovernment

the rupee remained less volatile against the dollar and the

currencies of some of the major emerging economies. By the

endof2013,therupeehadexchangedatarateof130.75

againsttheUSdollarrecordingadepreciationof2.75percent

compared to the previous year.

In 2013, many key infrastructure projects were completed,

namely, the countrys second international airport, harbour

and port development projects, the Expressway and highway

developmentprojects,theNorthernrailwayprojectandpower

projects, with some more due to be completed in the future.


12.0

10.0

8.0

6.0

4.0

2.0

0.0200920092009

AgricultureAgriculture IndustryIndustry

%

ServicesServices GDPGDP

20102010 20112011 201220122012 201320132013

Industry PerformanceThe rubber industry of the country faced two major challenges

during the year. Firstly, the signifi cant decline in production was

due to a drop in tapping days during the adverse weather in the

firstninemonths.Rubberproductiondeclinedby14.2percent

compared to 2012. Secondly, declining world market prices of

natural rubber due to high stocks levels maintained in China

and Japan, which affected rubber prices in Sri Lanka too.

Despite these challenges the output of rubber products

increased at a moderate rate of 4.6 percent with the increase

in international demand for rubber-based products in the

latter part of 2013. Earnings from exports of rubber products

recorded a 3.3 percent growth in 2013, which was the second

largest contributor to the growth in industrial exports of the

country.

Future prospects for the industry will be more favourable with

the governments master plan in respect of the rubber industry

looking to generate USD 5 bn worth of rubber exports by

2022. In achieving this goal we could expect the authorities

to extend their support towards improving testing laboratory

facilities, developing infrastructure and regulating the industry.

Companys PerformanceDuringtheyearended31stMarch2014,theCompany

recordedaturnoverofRs.953mnasagainstRs.974mnin

the previous year. The reduced turnover was caused by the

signifi cant depreciation of the currency of India, South Africa

and Japan, our customers. However, the profi t before taxation

inthecurrentyearisRs.64.8mnascomparedtoRs51.0mn

inthepreviousyear,whichisanincreaseby27%.

Wecontinuetomanufacturetotheinternationalstandards

required of many ISO certifi ed products. In the future, we

will focus on widening our global presence with a wide

productrange.Wewillcontinuetofocusonhighcontributing

products.Wastageandscraplevelswillbefurtherminimized

withpropercontrols.Weneedtofurtherimproveourquality

levels and delivery times from their current position in order to

differentiate our products from Chinese products.

Source :Central Bank Annual Report 2013


1200

1000

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Turn Over (Rs. Mn)Turn Over (Rs. Mn)Turn Over (Rs. Mn)

800

600

400

200

0

Tu

I am happy to inform you that Samson International Plc

purchasedtheassetsofOktaPVCLanka(Pvt)Ltd.on14th

July2014bymovingforwardinthedirectionofourVision.We

willbeabletowidenourproductrangefurtherwiththePVC-

related products.

Movingforwardinthe

directionofourVision

DividendsThe Board of Directors decided to recommend a dividend of

Rs.2.00persharefortheyearunderreview(Rs.2.00pershare

in2012/13).

AppreciationAs we complete our Silver Jubilee this year, I would like to

especially thank our invaluable and loyal customers. Further, I

would like to thank the Board of Directors, the management

and every employee of the company for their dedication and

commitment extended to the company.

I would also like to thank our bankers and all our suppliers for

theirsupport.Wedeeplyappreciateourshareholdersfortheir

faith in our Company and we assure them of a bright future.

Dr D. S. RajapaksaChairman

Colombo

1st August 2014

Turnover Last Ten Financial Years (Rs.Mn)



ManaGinGDirectors Operational review

During the year we improved many aspects of

our operational effectiveness through investing

in advanced technology, improving the working

capital, minimizing waste, maintaining higher levels

of capacity utilization in most of the products and

controlling all overheads

We, Samson International Plc, cater to sophisticated international markets as well as the local market.

However, we continued to maintain satisfactory profi t levels

in the recent past notwithstanding macroeconomic pressures,

which were challenges to face in the face of slightly lower

global economic growth (3.0 % in 2013 compared to 3.2%

in 2012), adverse movements in exchange rates of some

currencies that we dealt with ( India, South Africa and

Japan) and continuous increases in energy prices.

However, in a more positive light, an increase in exports

as well as local demand could be expected as advanced

economies are picking up, domestic demand in emerging

economies is increasing, and the rupee continues to be

stable against some major currencies and continues domestic

demand in infrastructure developments.

WiththeKatunayaka-Colombohighwaynowopen,our

customerscanreachuswithintwohoursfromtheKatunayaka

International Airport. Although our factory is located 100

km from Colombo in the South of Sri Lanka , the Southern

Expressway has brought us closer to Colombo. Anyone can

reach us now in a one-hour journey from Colombo and 15

Profi t Before Tax (Rs.Mn)

80

60

40

20

0

-20 2004/052004/05

PBT (Rs.Mn)

2006/072005/06 2007/08 2008/09 2009/102009/102009/102009/10 2010/11 2011/122011/12 2012/13 2013/142013/14

-40

-60

-80

PBP


minutesfromMatara.Thegovernmentsmassiveinfrastructure

projects certainly help our business.

Weareplanningtobecome

bigger and bigger

year by year

During the year we improved many aspects of operational

effectiveness by investing in advanced technology, improving

ourworkingcapital,minimizingwaste,maintaininghigher

levelsofcapacityutilizationandcontrollingalloverheads.

In the fi nancial year under review, we invested in a fully

automatedflashlesspressforVstrap,amill,anotherpress

line for hot water bottles and an additional cutter for jar

sealingrings.Wecontinuetoinvestmoreandmorein

Research&Development.OurGroupsignedanagreement

withthePolymerUnitoftheUniversityofMoratuwafor

researchactivitiesfor3yearsbyinvestingRs.15mnfrom

which the major contribution will come to Samson Intentional

Plc.Wearelookingforwardtothefuturewithmuchpositive

hope.Wewillcontinuouslyengageinproductdevelopment,

processautomationandcreatingsynergies.Weareplanning

to become bigger and bigger year by year.

Ourworkingcapitalcycleisasfollows:

2013/2014 2012/2013 Variance

DebtCollectionPeriod(Days) 65 79 (14)

RMHoldingPeriod(Days) 23 18 5

WIPHoldingPeriod(Days) 14 11 3

FG Holding Period (Days) 19 58 (39)

Credit Settlement Period (Days) (54) (38) (16)

CashOperatingCycle(Days) 67 128 (61)

OperatingCycle(Days) 56 87 (31)

Our measures to improve quality in compliance with

international standards and continuous in-house and

overseas laboratory tests will ensure a solid market share

forourproducts.Wehaveachievedsignificantinternational

recognitionintermsofproductquality.Wearethefirst

rubber- related product manufacturing company to receive

theISO9001:2008QualityManagementCertificate.Since

ManaGinG Directors Operational review (contd...)1994, we have enjoyed ISO status. Further, we have been

awardedBritishStandard(BS1970:2006),TUVCertification

andFSCCertificationforhotwaterbottles.Wealsohavethe

FireRetardantCertificateforrubbersmatsandflooringsand

theElectricalResistantCertificateforrubbermats.Allraw

materials are used to manufacture our products by conforming

totheReachregulationsofEurope.

Wearethefirst

rubber- related product

manufacturing company to

receivetheISO9001:2008

QualityManagement

Certifi cate

Above all, our main focus is contributing to the rural

communities by offering them many more employment

opportunitiesandupliftingtheirlivingstandards.Weasa

company are committed to protecting our cultural heritage

and customs. Our years of experience prove that customs and

rituals tie generations with bonds that cannot be broken.

WearepleasedtoinformyouthatyourCompanyreceiveda

coupleofawardsduringtheyear:firstlyNationalChamber

of Commerce Gold Awards for the last two consecutive years

in recognition of our export growth and volume; secondly a

CertificateofRecognitionawardedbytheInstituteofChartered

AccountantswasreceivedforlastyearsAnnualReportinthe

manufacturing category.

As you are aware, Samson International Plc produces more

than 40 types of rubber products under four different

product segments.

a) Medical Items: These include hot water bottles, fi nger

exercises and power web.

b) Food Grade Items: These include jar sealing rings.

c) Household & Industry Items: This segment includes

rubber mats ,rubber fl ooring and rubber hoses,

continuous rubber rolls, bath mats, staircase mats, vehicle


ManaGinG Directors Operational review (contd...)

Business Segment2013/14 2012/13 2013/14 2012/13 2013/14 2012/13 2013/14 2012/13 2013/14 2012/13

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Export Sales 208,861 212,328 284,583 285,912 67,717 99,166 52,092 58,635 613,250 656,041 Local Sales 635 1,343 2,081 5,338 40,561 39,389 296,034 271,747 339,311 317,817

209,496 213,671 286,664 291,250 108,275 138,555 348,126 330,382 952,561 973,858 Profit/(Loss) on Fixed Asset Disposal 82 291 81 291 88 292 81 292 332 1,166 Other Income 472 328 472 214 472 24 535 16 1,951 582

210,050 214,290 287,217 291,755 108,835 138,871 348,742 330,690 954,844 975,606

Segmental Expense (200,558) (201,821) (256,869) (261,225) (105,064) (136,291) (344,589) (322,209) (907,080) (921,546)

Operating Profit/(Loss) 9,492 12,469 30,348 30,530 3,771 2,580 4,153 8,481 47,764 54,060

Medical Items Food Grade Items Household Items Others Company

mats, entrance mats, industry mats and also specialty mats

such as fi re retardant mats, oil resistant mats, antistatic

mats and fabric mats.

4) Other products: These include beadings, footwear

components, road humps, mud fl aps, D- fenders and

other items which do not belong to the above three

categories.

Turnover Mix in (Rs. Mn.)

348.12 330.38

213.67

138.55 291.25

209.49

2013/14 2012/13

286.66108.27

Medical Items

Food Grade Item

House Hold ItemHouse Hold ItemHouse Hold Item

other

Me

FooFoo

Ho

othoth

30

9 5

4

31

12

10

3 -

5

10

15

20

25

30

35

Food Grade Items Food Grade Items Food Grade Items Medical Items Others Others Household Items Household Items

2013/14 2013/14 2013/14 2013/14 2013/14 2013/14 2013

2012/13 2012/13 2012/13

Operating Profi t (Rs. Mn.)

The segmental profi t analysis is given below.


ManaGinG Directors Operational review (contd...)Wehadasalesgrowthof7%fromlocalsales.However,

export sales decreased by 6.5 %. During the year overheads

were controlled effectively. Finance costs decreased by 62%

fromRs.9.9mninthepreviousyeartoRs.3.7mninthe

currentfinancialyear.WeinvestedRs50.3mninTreasuryBills,

Tax free Debentures and Fixed Deposits this year. Administration

overheads and selling and distribution overheads too are under

control.ExchangegainincomeincreasedfromRs6.1mnin

thepreviousyeartoRs17.7mninthecurrentyear,whichwas

mainly due to the favourable exchange rate of the Euro that

prevailed during the year. However, we also lost some revenue

due to unfavorable exchange rates that prevailed in Japan,

India and South Africa in the same period. The net profi t

beforetaxincreasedby27%toRs.64.8mninthecurrent

financialyearcomparedtoRs.51.0mninthepreviousyear.

WeinvestedRs50mn

in Treasury Bills, Tax free

Debentures and Fixed

Deposits this year

It is important that we maintain excellent rapport with our

neighbors, villagers and employees. At present our rapport

with our neighbors and villagers seem to be constructive and

improving. Our relationship with our employees too seems

sound and pleasant at present.

Currently we produce more than 40 products out of rubber

using moulding , extruding, microwaving and injection

moulding. Your company has now reached versatility in

manufacturing rubber products. In the future we will focus

on reaching versatility in other polymer products such as

PVCtoo.IamhappytoinformyouthatSamsonInternational

PlcpurchasedtheassetsoftheOktaPVCLanka(Pvt)Ltd.

on 14th July 2014 by moving forward in the direction of

ourVision.Wewillbeabletowidenourproductrangeand

turnoverfurtherwhenweaddtoitPVC-relatedproducts.

I would like to thank all the members of management and

every employee of the company for their dedication and

commitment extended to the company during the year.

D. K. RajapaksaManaging Director

Colombo

1st August 2014


cOrpOrate informationName of the Company : SamsonInternationalPlc

Legal Form : Apublicquotedcompanywithlimitedliability,incorporatedon14thOctober 1988 and re-registeredundertheCompaniesActNo.7of2007on3rdSeptember2008.

Company Registration number : PQ192

Stock Exchange listing : TheordinarysharesoftheCompanywerelistedintheColombo Stock Exchange of Sri Lanka on 24th July 1992 and the Company was converted to a public quoted company.

Principal line of business : Manufactureandexportofrubber-basedproductsfortheinternationalandlocalmarkets.

Registered Offi ce : No.110,KumaranRatnamRoad,Colombo02. Te:(011)4728800,Fax(011)2440890 Email:[email protected]

Galle Factory : AkuressaRoad,Bogahagoda,Galle. Te(091)3094469-72,Fax(091)2224036 Email:[email protected]

Kalutara Factory : No.57/B,FullertonIndustrialZone,Nagoda,Kalutara. Te (034) 5622688

Email:[email protected]

Baddegama Factory : GilcroftEstate,Kiribathwila,Ampegama,Baddegama (Purchased on 14th July 2014)

Te (091) 2293801, Fax (091) 2233020

Email:[email protected]

Directors : DrD.S.Rajapaksa(Chairman) MrD.K.Rajapaksa(ManagingDirector) MrD.R.Rajapaksa MrD.M.Rajapaksa MrC.Cumaranatunge MrR.H.Nandajeewa(Resignedon8/8/2013) MrG.H.A.Wimalasena MrT.K.Bandaranayake MrB.L.P.Jayawardena MrD.G.P.S.Abeygunawardana(Director/GeneralManager)Appointed-on8/8/2013asDirector

Secretaries : PWCorporateSecretarial(Pvt)Ltd. No.3/17,KynseyRoad,Colombo08

Parent Company : DSISamsonGroup(Pvt)Ltd.

Auditors : MessrsHLBEdirisinghe&Company Chartered Accountants,

No.45,BraybrookStreet,Colombo02.

Bankers : BankofCeylon HattonNationalBank Commercial Bank

NationTrustBank DFCCVardhanaBank Peoples Bank


1. Dr. D. Samson Rajapaksa

2. Mr. D. Kulatunga Rajapaksa

3. Mr. D. Ranatunga Rajapaksa

4. Mr. D. Mahinda Rajapaksa

13

5

7 8624

tHe BOarD of Directors


5. Mr. G. H. Ananda Wimalasena

6. Mr. Tissa K. Bandaranayake

7. Mr. B. Lalith P. Jayewardene

8. Mr. D. G. Priyantha S. Abeygunawardana

Note : Mr. C. Cumaranatunga was absent as he is based in Germany


1. Dr. D. Samson Rajapaksa M.B.B.S (Cey), F.R.C.O.G. (U.K.), M.S. (S.L.)

Chairman

DrSamsonRajapaksaisamedicalpractitionerbyprofessionand counts over three decades of experience with DSI Group.

He serves as the Chairman of DSI Holdings (Pvt) Ltd. and is the

Chairman of DSI Samson Group (Pvt) Ltd. He is also a Director

of D. Samson Industries (Pvt) Ltd., D. Samson and Sons (Pvt)

Ltd.,andSamsonReclaimRubbers(Pvt)Ltd.

In addition to being on the DSI Samson Group (Pvt) Ltd.

Board, he is a Consultant Obstetrician and Gynecologist in the

private sector.

Dr.SamsonRajapaksaservesasaCommitteeMemberoftheYoungMembersBuddhistAssociationandoftheSriLankaMedicalLibrary.

2. Mr. D. Kulatunga Rajapaksa B.Sc (Hons) (Cey)

Managing Director

MrKulatungaRajapaksaistheManagingDirectorofDSISamson Groups (Pvt) Ltd. He has over 48 years of experience

in the manufacture of footwear and rubber products.

HehasservedasaCouncilMemberofseveraluniversities.MrKulatungaRajapaksaisapastpresidentoftheNationalChamber of Exporters of Sri Lanka and also was the past

presidentoftheSriLankaAssociationofManufacturersandExporterofRubberproductsandisthecurrentpresidentoftheSriLankaFootwear&LeatherProductsManufacturersAssociation.

HeisalsotheChairmanoftheWellassaRubberCompanyLimitedandalsoaDirectoroftheMawbimaLankaFoundation.

3. Mr. D. Ranatunga Rajapaksa Dip. In Technology

Non- Executive Director

MrRanatungaRajapaksaistheManagingDirectorofSamsonRubberIndustries(Pvt)Ltd.,acompanythatspecializesinthedesigning,manufacturingandexportingoftyresandtubes.HeisalsotheManagingDirectorofMountspringWater(Pvt)Ltd.,SamsonReclaimRubbersLtd.SamsonRubberProducts(Pvt)Ltd.,SamsonBikes(Pvt)Ltd.,DSI Tyre India (Pvt) Ltd. and several other subsidiary companies

of the DSI Samson Group.

Mr.RanatungaRajapaksaplaysamajorroleinexpandingthe Groups overseas business and has more than 43 years of

experience with DSI Group.

4. Mr. D. Mahinda Rajapaksa B.Sc Eng. (Hons), MBIM, CEng, MIMechE (UK), FIE (SL)

Non -Executive Director

Mr.MahindaRajapaksaisaCharteredEngineerbyprofessionand has more than five years experience working as an

EngineerinUKandSriLanka.

In addition to being a Director of Samson International Plc,

Mr.MahindaRajapaksaistheManagingDirectorofSamson(Exports) Ltd. and is a Director of DSI Samson Group (Pvt) Ltd.,

D. Samson Industries (Pvt) Ltd. and several other subsidiary

companies of the DSI Samson Group.

Mr.MahindaRajapaksahasover35yearsofmanagerialexperience within the DSI Samson Group.

5. Mr. Chula Cumaranatunge M.Sc. (Econ) (Lond.)

Non -Executive Director

MrChulaCumaranatungehasover28yearsexperienceinthe rubber industry.

MrChulaCumaranatungeisalsoaDirectorofGlovetex(Pvt)Ltd.andofCentralRubber(Pvt)Ltd.

6. Mr. G. H. Ananda Wimalasena B.Sc, Higher Diploma in Management (London College of

Printing, U.K.)

Independent, Non Executive Director

MrAnandaWimalasenawastheFounder-ManagingDirectorof Asiri Hospital Group of Companies from 1980 to 2006.

MrAnandaWimalasenahasexperienceandextensiveexposureinManagementandHealthservices.Healsoservesas a Director of Hemas Hospitals (Pvt) Ltd. He is Chairman in

ITMC(Pvt)Ltd.andalsoChairmanoftheRiskManagement&Audit Committee of Hemas Hospitals (Pvt) Ltd.

7. Mr. Tissa K. Bandaranayake B.Sc. (Cey), FCA

Independent, Non Executive Director

MrTissaBandaranayakehasmorethan46yearscommercialand professional experience and was a Senior Partner of Ernst

&Youngfromwhereheretiredafter27years,havingserviceda large portfolio of clients, both local and multinational in

various industries.

He currently serves as a Director Laugfs Gas Plc, Overseas

Realty(Ceylon)Plc,RenukaHoldingsPlc,RenukaShawWallacePlc,MicroHoldings(Pvt)Ltd.,HarischandraMillsPlc,WatersEdgeLtd.andNawalokaHospitalsPlc.Healso

prOFiles of the Directors


servesasanAdvisor/ConsultanttotheBoardofDirectorsofNoritakeLankaPorcelain(Pvt)Ltd.

He serves as Chairman of the Quality Assurance Board

established by the Institute of Chartered Accountants of

Sri Lanka comprising senior members of the accounting

profession as well as representatives of public sector

regulatorybodiessuchastheSEC,SLAASMB,CBSL,etc.

MrTissaBandaranayakeisaPastChairmanoftheAuditFaculty of the Institute of Chartered Accountants of Sri Lanka.

8. Mr. B. Lalith P. Jayawardena MBA, BCom (Sp)

Executive Director

MrLalithJayawardenahasover24yearsexperienceinSamson International Plc and has served the company from its

inception. He is also a Director of Samson Group Corporate

Services(Pvt)Ltd.,SamtessiBrushManufacturers(Pvt)Ltd.andMicroMinerals(Pvt)Ltd.,asubsidiaryoftheRichardPeirisGroup.Inaddition,MrLalithJayawardenaservesastheGroupTreasurer of the DSI Samson Group.

He is the Secretary of the Sri Lanka Association of

Manufacturers&ExporterofRubberProducts(SLAMERP).MrLalithJayawardenaisalsoamemberoftheRubberAdvisoryCouncil of the Sri Lanka Export Development Board and of

theMinistryofIndustryandCommerce.HeisapastTreasurerofthePlasticandRubberInstituteofSriLanka.

9. Mr. D. G. Priyantha S. Abeygunawardana MBA, LLM, LLB, FCA, FCMA, FCCA, MCIM, Attorney-at- Law

Director / General Manager

Mr.PriyanthaAbeygunawardanaisatriple-qualifiedAccountantholdingthefellowshipofChartered,CIMAandACCA.HealsoholdstwoMastersdegreesintwodifferentfields,namely,MBAfromtheUniversityofSriJayewardenepuraspecializinginFinanceandLLMfromUniversity of Colombo in Company Law, Labour Law and

Banking Law.

He obtained his LLB degree from the Open University of Sri

Lanka and took his oaths as an Attorney-at- Law in 2004

having passed the requisite examinations held by the Sri Lanka

Law College.

HeisalsomemberofCharteredInstituteofMarketingofUK.

PreviouslyhewasatFord,Rhodes,Thornton&Company,Hayleys,AbansandfinallyatRichardPiersExportsPlcwhereheworkedasGeneralManagerforsixyears.HejoinedSamson International Plc in February 2012.

prOFiles of the Directors (contd...)

Analysis of Directors Professional Background:

Professionally qualified area No. of Directors on the Board

1 Medical 1

2 Science 3

3 Engineering 2

4 Finance 3

5 Economics 1

6 Law 1

7 Marketing 1

8 Management 3


executiVe Management

Mr. Kulatunga Rajapaksa

B.Sc (Hons) (Cey)

Managing Director

Mr. Priyantha Abeygunawardana

MBA, LLM, LLB, FCA, FCMA, FCCA, MCIM, Attorney-at -Law

Director/ General Manager

Research&Development

Mr. Sunil KariyawasamDip. in Rubber Technology (NDT)

Deputy General Manager Research

& Development

Mr. Wimal Siriwardana Dip. in Rubber Technology,

Certifi cate in Hydraulic Technology

Executive Research and Development

Mr. P K Sameera TharangaB.Sc Engineering (Hons)

Process Engineer


executiVe Management (contd...)

Marketing

Supplies HumanResources

Mr Naveendra KumaraMBA, MAAT, Dip in Business Mgt.

Manager - Marketing

Mr. M. A. P. JanakanthaDip. in Engineering Science, Dip. in Rubber

Technology

Executive- Production, Galle Factory

Ms. Piumangani SeneviratneBMS (Sp), Dip. in Mgt

Manager - Supplies

Ms. Nishanthi PadmakumariDip. in Human Resources Management

Executive - Human Resources

Mr. Sanjeewa WeerakkodiBA ( Hons) (Economics), Dip in

Marketing ( UK)

Assistant Manager - Marketing

Mr. Asanka Dimuth EdirisingheDip. in Engineering Science

Executive- Production, Kalutara

Factory

Production



Analysis of Educational and Professional qualifi cations of the Executives :

CATEGORY Number of educational Number of professional

qualifi cations qualifi cations

MastersDegrees 4 -

BachelorsDegrees 7 -

Diplomas 11 -

Professionally qualifi ed in Accountancy 3

Professionally qualifi ed in Law 1

ProfessionallyqualifiedinMarketing 2

Total 22 6

Quality Assurance

Finance

Engineering

Welfare

Mr. Namal NishanthaB.Sc, Dip. in Rubber Technology

Executive- Quality Assurance

Mr. Thilina Promod Kahanda Gamage B.Sc Finance Management (Sp)

Executive- Finance

Mr. Nilantha JayalalDip. in Technology

Executive Engineering

Mr. G. ParanavithanaDip. in Commerce

Executive- Welfare


cOrpOrateGovernance

Board of Directors gives its top priority to

attain a high standard of corporate governance

practices as specified by regulatory bodies

TheBoardrecognizestheinterestsoftheCompanysshareholders, employees, customers, suppliers, consumers,

and communities in which it operates and who are all essential

for the Companys success. The Companys corporate

governance framework is expected to ensure a transparent

and good governance system leading towards enhancing

profitability and long-term sustainability. The Directors are

committed to maintaining the highest standards of corporate

governance in the interest of stakeholders having regard to

the requirements of the Securities and Exchange Commission

of Sri Lanka, Colombo Stock Exchange and the Institute of

Chartered Accountants of Sri Lanka and to this end, inter

alia, have established internal control systems, including a

comprehensive risk identification, measurement and mitigation

process which is in place designed to carry out the business

of the Company in an orderly manner, to safeguard its assets

and secure as far as possible, the accuracy and reliability of the

records and protect the rights and interests of shareholders

and be accountable to them for the overall management of

the Company. The corporate governance of the Company

is reflected in its strong belief in protecting and enhancing

stakeholder value in a sustainable manner, supported by a

sound system of policies and practices.


Board of Directors The Board comprising professional and experienced business

leaders of high repute is entrusted with, and is responsible for

providing strategic direction to the company in an honest, fair,

diligent and ethical manner. The Board of Samson International

Plc comprises three executive directors and six non-executive

directors.Theirprofilesappearonpages18&19ofthisAnnual

Report.

RoleoftheBoardofDirectors The Board of the Company is responsible for formulating

company policy and overall business strategy. The

implementation of policy and strategy is done within a

framework that requires compliance with existing laws and

regulations as well as establishing best practices in dealing with

employees, customers, suppliers and the community at large.

It is the Companys policy to hold regular Board meetings.

Information relevant to these Board meetings was distributed

in a timely manner with ample time given for members to

assimilateandanalyzeinformationinordertomakewell-

informed decisions at Board meetings. In the furtherance of

his duties, provisions have been made to allow a director to

acquire independent professional advice at the expense of the

company. The Board approves all material contracts, projects,

investments, acquisitions and disposal fixed assets and annual

capital&revenuebudgets.

cOrpOrate Governance (contd...)To protect the untarnished reputation of the company, the

Board ensures that its members and employees maintain the

highest possible ethical standards.

TheBoardhasdelegatedresponsibilitytotheManaging

Director who is also the Chief Executive Officer for planning

and guiding the business towards meeting set objectives. There

is a clear demarcation of responsibilities and authority between

theChairmanandtheChiefExecutiveOfficer/Managing

Director, which ensures a balance of power.

Appointment&Re-electionofDirectors The Board of Directors collectively decides on the new

appointment of directors as per the Articles of Association of

the Company. Formal and transparent procedures are followed

inmakingsuchappointments.TheAnnualGeneralMeeting

is considered to be the ideal forum for this, with sufficient

biographic data on directors seeking appointment or re-election

accompanying their names so that shareholders can make

informed voting decisions.

BoardMeetingsThe Board held five meetings during the period under review

and their attendance is given below.

Name of Director Status 27th May 08thAugust 11thNovember 13thFebruary 26thMay No of

2013 2013 2013 2014 2014 Attendance

DrDSRajapaksa NE 5/5

MrDKRajapaksa E x 4/5

MrDMRajapaksa NE 5/5

MrDRRajapaksa NE 5/5

MrRHNandajeewa(Resignedon8/8/2013) E - - - 2/2

MrCCumaranatunga(BasedinGermany) NE x x x x x 0/5

MrTKBandaranayake NE/I 5/5

MrGHAWimalasena NE/I x x 3/5

MrBLPJayawardena E x x x 2/5

Mr.DGPSAbeygunawardana(Appointedon8/8/2013) E - 4/4

DirectorsattendanceattheBoardMeetingsofSamsonInternationalPLC

Note1:Understatuscolumn,E=Executive,NE=Non-ExecutiveandI=Independent

Note2:MrCumaranatungeisbasedinGermanyandallproceedingsoftheBoardmeetingshavebeensenttohim.


cOrpOrate Governance (contd...)

CommitteesSpecificresponsibilitieshavebeendelegatedtotheBoardCommittees,namely,AuditCommitteeandRemunerationCommittee.

Audit Committee

TheAuditCommitteeconsistsofthreeNon-ExecutiveDirectors:

MrT.K.BandaranayakeChairman Independent,Non-ExecutiveDirector

MrG.H.Wimalasena Independent,Non-ExecutiveDirector

MrD.M.Rajapaksa Non-ExecutiveDirector

PleaserefertheAuditCommitteeReportonpages72and73forthefunctionsandresponsibilitiesoftheCommittee.TheInternal

AuditfunctionoftheCompanyiscarriedoutbyMs.Ernst&Young,CharteredAccountants.TheydirectlyreporttotheChairmanof

the Audit Committee. The Audit Committee Charter gives guidelines on audit-related matters.

Name of Director Status 27th May 08thAugust 11thNovember 13thFebruary 26thMay No of

2013 2013 2013 2014 2014 Attendance

MrTKBandaranayake

(Chairman) NE/I 5/5

MrGHAWimalasena NE/I x x 3/5

MrDMRajapaksa NE 5/5

AttendanceofMembersoftheAuditCommittee

RemunerationCommittee

TheRemunerationCommittee,appointedbytheBoardofDirectors,consistsofthreeNon-ExecutiveDirectors:

MrG.H.A.WimalasenaChairman IndependentNon-ExecutiveDirector

MrT.K.Bandaranayake IndependentNon-ExecutiveDirector


TheyrecommendtheremunerationpackagesofDirectors,ManagersandExecutivesoftheCompany.

Compliance and Disclosure of InformationTheCompanyscompliancewithitsstatutoryobligationsisregularlymonitoredbyManagementandaStatementofCompliance

is presented to the Board on a regular basis. The Board of Directors requires that the Financial Statements of the Company are

prepared in accordance with the Sri Lanka Accounting Standards and in accordance with the requirements of the Colombo Stock

ExchangeandCompaniesAct,7of2007.Maximuminformationisprovidedtoshareholdersandfulldisclosureismadesubjectonly

to consideration of any sensitive information, which could directly impact on the business of the Company.

TheStatementofComplianceunderSection7.10oftherulesofColomboStockExchangeonCorporateGovernanceisshowninthe

Table below. All these mandatory provisions have been fully complied with.


cOrpOrate Governance (contd...)CSE Rule No. Subject Applicable Requirement Compliance Status

7.10.1(a) Non-ExecutiveDirectors Atleast1/3ofthetotalnumberof Compliant

DirectorsshouldbeNon-ExecutiveDirectors 6 out of the 9 Board

members are

Non-Executives.

7.10.2(a) IndependentDirectors 2or1/3ofNon-ExecutiveDirectors, Compliant

whichever is higher should be independent There are 2 Independent

Directors and 6

Non-ExecutiveDirectors.

7.10.2(b) IndependentDirectors EachNon-ExecutiveDirectorshouldsubmit Compliant

adeclarationofindependence/ Independence of Directors

non-independence has been determined in

accordance with CSE.

7.10.3(a) DisclosurerelatingtoDirectors a. TheBoardshallmakeadetermination Compliant

annually as to the independence or All Independent,

non independence of each Non-ExecutiveDirectors

Non-ExecutiveDirector have submitted declarations

for their independence.

b.NamesofindependentDirectors Compliant

shouldbedisclosedintheAnnualReport This has been disclosed.

7.10.3(b) DisclosurerelatingtoDirectors IntheeventaDirectordoesnotqualifyas NotApplicable

independent, but if the Board is of the opinion

that the Director is nevertheless independent,

shall specify the criteria not met and the basis

forthedeterminationintheAnnualReport

7.10.3(c) DisclosurerelatingtoDirectors AbriefresumeofeachDirectorshouldbe Compliant

includedintheAnnualReportincluding Please refer the Profile of the

the area of expertise Directors in the Annual

Reportonpages18,19.

7.10.3(d) DisclosurerelatingtoDirectors UponappointmentofanewDirector Compliant

to the Board, a brief resume of each A brief resume of the new

Director should be provided to the CSE. Director was provided to the

CSE in August 2013.

7.10.5 RemunerationCommittee AlistedCompanyshallhavea Compliant

RemunerationCommittee

7.10.5(a) CompositionofRemuneration ShallcompriseNon-ExecutiveDirectors, Compliant

Committee a majority of whom shall be independent 2out3Non-Executive

directors are independent.


CSE Rule No. Subject Applicable Requirement Compliance Status

7.10.5(b) ReportofRemuneration TheRemunerationCommitteeshall Compliant

recommend the remuneration

of Chief Executive Officer and

Executive Directors

7.10.5(c) DisclosureintheAnnualReport TheAnnualReportshouldsetout:

relatingtoRemuneration a. NamesofDirectorscomprising Compliant

Committee theRemunerationCommittee

b. Statement of remuneration policy Compliant

c. Aggregate remuneration paid to Compliant

Executive&Non-ExecutiveDirectors Plseepage74

7.10.6 AuditCommittee TheCompanyshallhaveanAuditCommittee Compliant

Rule No. Subject Applicable Requirement Compliance Status

7.10.6.(a) Thecompositionof a. ShallCompriseNon-ExecutiveDirectors, Compliant

Audit Committee a majority of whom can be independent 2out3Non-Executive

directors are independent.

b. Chief Executive officer and the chief Compliant

Financial Officer should attend Audit

committee meetings

c. The Chairman of the Audit committee or Chairman is a member of

One member should be a member of a Institute of Chartered

professional Accounting body Accountants of Sri Lanka

7.10.6.(b) AuditCommitteefunctions Overseeingofthe Compliant

(i) Preparation, Presentation and adequacy of Audit Committee oversees

disclosures in the financial statements in the integrity of the

accordance with Sri Lanka Accounting financial statement.

Standards.

(ii) Compliance with financial reporting Compliant

requirements, information requirements of Audit Committee oversees

the Companies Act and other relevant the requirement of the

financial reporting related regulations Companies Act and

and requirements other regulations.

(iii) Processes to ensure that the internal Compliant

controls and risk management are Audit Committee oversees

adequate, to meet the requirements of effectiveness of internal

the Sri Lanka Auditing Standards. control and risk

management,




Rule No. Subject Applicable Requirement Compliance Status

(iv) Assessment of the independence and Compliant

performance of the external auditors. Audit Committee oversees

independence and

performance of the external

auditors.

(v)Makerecommendationtotheboard Compliant

pertaining to appointment, re-appointment Audit Committee

and removal of external auditors and to makes such

approve the remuneration and terms of recommendations.

engagement of the external auditors

7.10.6.(c) DisclosureintheAnnualReport a. NamesofDirectorscomprisingtheAudit Compliant

relating to Audit Committee Committee.

b. The Audit Committee shall make a Compliant

determination of the independence of

the Auditors and disclose the basis

for such determination.

c. TheAnnualReportshallcontainaReport Compliant

of the Audit Committee setting out the

manner of compliance of the function. Plseepage72,73.

The Code of Best Practice of Corporate Governance issued jointly by the Securities Exchange Commission of Sri Lanka and the

Institute of Chartered Accountants of Sri Lanka, which are voluntary provisions, has been also been fully complied with.

Internal Controls TheInternalAuditfunctionoftheCompanycontinuestobeoutsourcedandisbeingcarriedoutbyMsErnst&Youngand

Company, Chartered Accountants. They assess the strengths and weaknesses of the Companys Internal Control System and liaise

closely with the Audit Committee on a quarterly basis in making recommendations on improving these systems. Controls are in

place to safeguard the Companys assets, physical or otherwise, and ensure that proper records of each Companys transactions are

maintained. Directors are responsible for establishing appropriate systems of internal control in the Company and reviewing the

effectiveness of the system of internal controls constantly.

Going ConcernTheDirectorshavecontinuedtousetheGoingconcernbasisinthepreparationofFinancialStatements,aftercarefulreviewofthe

financial position and cash flow status of the Company. The Board of Directors believes that the Company has adequate resources

to continue in operation for the foreseeable future.

Secretary to the BoardPWCorporateSecretarial(Pvt)Ltd.actsasSecretariestothecompany.TheyadvisetheBoardonappropriateproceduresforthe

management of its meetings and duties, as well as the compliance of corporate governance in the Company.


risk ManagementThe Company ensures the minimization of

risks by adopting many strategies for smooth

Company operations

TheRiskManagementPolicyofSamsonInternationalPlc is to proactively manage risk to ensure continued

growth of our business and to protect our employees, assets

and reputation. Our ongoing assessment process takes into

account the likelihood of an event, its potential impact on the

business, the need for mitigation and to take corrective action.

Weneedtohaveaneffectiveriskmanagementsystemwhile

maintainingbusinessflexibility.Wewillidentifyandassess

material risks associated with our business, monitor, manage

and mitigate these risks.

Managingbusinessandfinancialrisksisoffundamental

importance in maintaining sustainable growth and making

steady progress towards the achievement of corporate

goals and objectives. The risk management process has

been designed to ensure identification of any situation or

circumstance that would adversely affect the achievement

of the Companys objectives. The company has a proactive

approach to business, aimed at enhancing shareholder value.

The company reviews and assesses significant risks on a regular

basis and has implemented an oversight programme to ensure

that there is a system of internal control in place. The Audit

Committee reviews and monitors internal controls. The Audit

ReportsarereviewedbytheAuditCommitteealongwiththe

RiskReportsandComplianceReportsonaquarterlybasis.

The potential risks are identified through risk workshops, risks

reviews, essential control checklists and risks reporting. The

Board also reviews its strategies, processes, procedures and

guidelines on a continuous basis to effectively identify, assess

and respond to risks.


risk Management (contd...)TheRiskManagementTablebelowexplainsthetypeofrisk,riskexposure,mitigatingactionandriskrankingoftheCompany.

Risk Risk exposure Mitigating action Risk Ranking

Financial Related risks

1) CreditRisk Riskarisingduetodefaultof ThishasbeenexplainedunderNote5ofthe Medium

payment. Higher credit risk may Financial Statement on pages 92 and 93.

adversely impact both liquidity

and profitability.

2) Operational Internalprocessfailures, ThishasbeenexplainedunderNote5ofthe Medium

processRisk fraud,pilferageandbreakdown FinancialStatementonpages92and93.

of internal controls

3) Financing Inabilitytosatisfydebt ThishasbeenexplainedunderNote5ofthe Low

and Interest repayments and obtain Financial Statement on pages 92 and 93.

rate risk the best interest rates.

4) Foreign Depreciationoftherupeevalue ThishasbeenexplainedunderNote5ofthe Medium

Exchange and loss of exchange in Financial Statement on pages 92 and 93.

rateRisk conversioninrelationtoexport

proceeds, import payments and

foreign currency debt

transactions.

5) Project Newprojects/Capital ThishasbeenexplainedunderNote5ofthe Medium

Managementexpendituresinvolve FinancialStatementonpages92and93.

Risks highrisksanduncertainties

in terms of delays and cost

overruns. Failure of major

projects will affect profitability,

capital structure and reputation.


risk Management (contd...)


Non-Financial Related risks

6) Reputation Adverseimpactonthe a)Maintenanceofhighestethicalstandardsat Low

Risk corporateimageandbrand alltimesinallbusinessactivitiesandmake

which is likely to diminish compliance audit as part of internal audit scope.

shareholder value.

This will finally lead to a b) Proper adherence to the statutory, health and

decline in market share safety concerns by obtaining appropriate

and customer base. quality certification standards.

c) Continuous review of customer comments in order

to exceed customer expectations and ensure quality

standards are adhered to and improved upon.

d)TheCompanyplaysacorporatecitizenrole

throughCSRinitiatives.

7) Human Riskoflosingskilledand a)Providefocusedandstructuredtraining medium

Resources trainedhumancapital tostaffatalllevelstoaidpersonal

Risk andprofessionaldevelopment.

b) Establish career development programmes and

succession plans in order to retain and motivate them.

c)Maintaininggoodrelationshipswithemployees

through regular dialogue.

d) Top priority is given to automation of manual work.

8) Technological Riskoflowproductivityand a)Frequentvisitsofoverseasexhibitionsandcontinuous medium

Risk highmaintenancecosts investmentinmodernmachinery.

compared to the products

manufactured by competitors. b) Continuous competitor analysis is carried out.

c) InvestinginResearchandDevelopmentactivities

throughout the year.

d)InvestinginERPsystem,hardwareand

developing software in-house.

9) Procurement Riskofnon-availability a)Establishingrelationshipswithmanyglobalandlocal medium

Risk ofrawmaterialsand suppliersforrawmaterialsandcommodities

excessive prices. in order to reduce over dependency

onasinglesupplier/brand.

b) Store raw materials when the prices are low and

enter into forward contracts for raw material purchases.

a) Consume energy in the most efficient way.




10) Inventory Riskofhavingnon-moving a) Identifyingslow-movingstocksandsellthemin medium

Risk stock adifferentmarket.

b) Re-orderlevelandeconomicorderquantity

are established.

11) Riskof Riskoflosingourmarket a) Ensuringhighstandardsofqualityin High

Competition share and sales growth to the eyes of the customer and branding all our products.

Chinese low quality products

and to other substitute b) Participate in trade fairs both local and

products,e.g.PVC-Related foreigntoattractnewcustomers.

Products

c) Identify the products which are in the decline stage

of the Product Life cycle and take corrective action.

d) Sourcing new markets and developing new products.

e) Makenecessaryinvestmentstoupgradethefacilities.

f) Corporate plan is prepared every three years and

monitored closely.

g) Increasing productivity and efficiency in order to

ensure our prices remain competitive.

h)CarryingoutResearchandDevelopmentactivitiesto

identify needs.

i) The provision of various value added services for

our key customers.

j) ManufacturePVC-relatedproductswherethereis

highdemand,e.g.,PVChoses

12) StatutoryandRiskofnon-compliance a) Createawarenessofstatutoryobligationsatalllevels. Low

Regulatory withchangesinlegal

Risk andregulatoryenvironment, b) Seekadvicefromexternalconsultantson

taxation, labour and other all matters relating to litigation and contracts.

laws will result in judiciary

actions. c) Product liability insurance is taken for hot water bottles.

d) Have a central record room to keep all our important

documents for 10 years.

e) Continuous dialogue with statutory bodies to meet

updated reporting requirements.




13) Fire and Fire and natural disasters can a) Obtaining comprehensive insurance cover for Low

natural halt or cease operations fire and natural disasters.

disaster risk

b) Fire safety drills and training is given to ensure

the occurrence of fire is kept to a minimum.

The company is equipped with firefighting equipment

at all strategic locations in the factory.

14) Information Tominimizeriskassociated a) Databack-upsstoredinoffsitelocations. Low

systems risk with data security, hardware

&communicationandsoftware. b) Maintainingofspareservers.

c) Vendoragreementsforsupportserviceand

regular maintenance.

Statutory and Regulatory Risk

Low


RiskMinimizationStrategiesappliedtothenewbusinesslineofPVCInordertoandtominimizethecurrentbusinessriskandalso

tomoveforwardinthedirectionofourVision,weinvestedina

PVCfactoryrecently.Priortotakingoverthisfactory,Samson

International Plc faced many risks, namely,

1) In the past we lost a significant market share for our

rubberhosesastherearePVChoseswithabetterfinish

and lower price. So we faced a Risk of Competition.

2) FurtherweusealotofPVC-relateditemsasraw

materialsforourfinishedproducts,e.g.,PVCstoppersfor

hot water bottles. These are imported from China and

there are frequent complaints about the quality of these

stoppers from our customers (Operational Risk).

3) Wehaveexperiencedthatevery3-4years,rubberprices

sky rocket. During this time, sales of rubber-related

products decrease. Therefore during such times, we can

makesomeofourproductsoutofPVC,e.g.,PVChot

waterbottles,PVCjarsealingrings,PVCbathmats,etc,

which can be competitive in the market. Therefore we

could eliminate the Business Risk.

Therefore in order to eliminate above risks, we decided to step

intomanufacturingPVCproductsandpurchasedassetsof

OktaPVCLanka(Private)Ltd.,Baddegama,

WhenwenegotiatedthepriceforPVCbusiness,we

eliminatedtheriskinthefollowingmanner:

a) Wesearchedforafactoryclosetoourcurrent

factory. This eliminates some operational risks and

we found a suitable factory.

b) Weeliminatedtheriskoftransferringoldtax

liabilitiesandpenaltiestous.Weacceptedtheir

liabilities but excluded tax liabilities. Therefore, the

finance and legal risks were eliminated.

c) Weeliminatedtheriskofpaymentsmadeto

unknown creditors and accrued expenses in the

future. This has to be settled by the current owner

asperourlegalagreement.Weeliminatedfinance

risk.

d) Weeliminatedtheriskofbaddebts.Duesfrom

debtors have to be collected by the previous owner.

The previous owner has to collect all dues from

debtors and it is part of his purchase consideration.

e) Weeliminatedtheriskofchequesinhandbeing

dishonoured.Wegavethesechequestotheprevious

owner as part of purchase consideration.

f) Weobtainedtheservicesofoldemployeesby

giving them new letters of appointment. Therefore

no old EPF, ETF and gratuity issues and penalties will

be faced by our Company.

g) Wedecidedtopayelectricity,insuranceand

telephonebillstominimizetheoperational risk.

h) Wedidadiligenceauditbygivingittoareputed

Audit Firm. This eliminated all financial risk.

i) AvaluationreportforLand&Buildingswas

obtained.

j) A title deed search was done and a survey plan was

carried out.

k) Physical verification of assets was carried out.

l) RequiredBoardresolutionswerepassedafterwe

obtainedtheapprovaloftheAuditCommittee.We

checked whether it was under major transactions

under Section 185 of the Companies Act.

m) Informed the Colombo Stock Exchange. There is no

legal risk.

n) MarketresearchwascarriedoutforPVCproducts

before we invested in them. Therefore there is no

market risk.

o) Negotiatedbankingfacilitiesforthenewbusiness

in advance. Therefore there is no business and

finance risk.



repOrt of the Board of Directors

The Directors of Samson International Plc have pleasure in

presenting their report together with the audited financial

statementsoftheCompanyfortheyearended31stMarch

2014, which was approved by the Directors at a meeting held

on 1st August 2014.

GeneralSamson International Plc is a public limited liability Company,

incorporated in Sri Lanka on 14th October 1988 and re-

registeredundertheCompaniesActNo.7of2007on3rd

September 2008 under registration number PO 192. The

ordinary shares of the Company were listed in the Colombo

Stock Exchange of Sri Lanka on 24th July 1992 and the

Company was converted into a public quoted company.

ThisReportprovidestheinformationasrequiredbythe

CompaniesActNo.07of2007,theListingRulesofthe

Colombo Stock Exchange and recommended best practices on

Corporate Governance.

The Principal Activities of the CompanyThe principal activity of the Company is the manufacture of

unhardenedvulcanizedrubberproductsfortheinternational

and local market. There have been no significant changes in the

nature of the Companys principal activities during the year.

Accounting PoliciesA summary of the significant accounting policies adopted in the

preparation of the Financial Statements is given on page 83 of

thisReportasrequiredbySection168(1)(d)oftheCompanies

ActNo.7of2007.Thepoliciesadoptedareconsistentwith

those adopted in the previous financial year.

ReviewoftheyearTheChairmansreviewandtheManagingDirectorsoperational

review together with the Financial Statements highlight the

Companys performance during the period under review and

thestateofaffairsasat31stMarch2014.

SegmentReporting Segment-wise products contribution to the Companys revenue,

results,assetsandliabilitiesisprovidedinNote28tothe

FinancialStatementsonpage107.

TurnoverTurnoveroftheCompanyisRs.953mnin2013/14as

comparedtoRs.974mninthelastyear.

Turnoverbysegment:

2013/2014 2012/2013

Medicalitems 209,496 213,671

Food grade items 286,664 291,250

Householditems 108,275 138,555

Footwear components 348,126 330,381

Totalturnover 952,561 973,857

Rs in 000


Profits: 2013/2014 2012/2013

Profitfortheyear 64,841 51,077

(after payment of all expenses, making provision for known liabilities and

depreciation on property, plant and equipment)

Tax on profits (8,491) 4,438

Profit after taxation 56,350 55,515

Retainedprofitsbroughtforward 185,152 137,333

Profitsavailableforappropriation/distributions 241,502 192,848

Proposedfirst&finaldividends (7,696) (7,696)

Retainedprofitscarriedforward 233,806 185,152

repOrt OF tHe Board of Directors (contd...)

TaxationUnderSection52oftheInlandRevenueActNo10of2006,taxprofitonexportsales,taxprofitonlocalsales,interestincomeand

agriculture income of the Company are taxed at the rate of 12%, 28%, 28% and 10 % respectively.

InvestmentsinProperty,Plant&EquipmentDuringtheyear2013/2014,theCompanyinvestedRs.25.8mninproperty,plant&equipment.Thetotalinvestmentsinproperty,

plant&equipmentasat31stMarch2014amountedRs.500mnasopposedtoRs.474mnasat31stMarch2013.Theinformation

relatingtothemovementinproperty,plant&equipmentisgiveninNote13totheFinancialStatementonpage97.

StatedCapital&ReservesThe movement of the Stated capital is as follows.

2013/2014 2012/2013

Statedcapital-Rs 105,752 105,752

No.ofOrdinaryshares 3,847,974 3,847,974

DetailsoftheStatedcapitalaregiveninNote21totheFinancialStatementsonpage102ofthisAnnualReport.Therightsand

obligations attaching to the ordinary shares are set out in the Articles of Association of the Company, a copy of which can be

obtained from the Secretaries upon request.

ReservesTheGroupreservesasat31stMarchwereasfollows.

2013/2014 2012/2013

General reserves 110,000 110,000

Revenuereserves 233,806 185,152

Total reserves 343,806 295,152


DirectorateThe names of the Directors who held office at the end of the financial year are given below and their brief profiles appear on pages

18 and 19.

1) DRD.S.Rajapaksa(Chairman)

2) MrD.K.Rajapaksa(ManagingDirector)

3) MrD.R.Rajapaksa(Non-ExecutiveDirector)

4) MrD.M.Rajapaksa(Non-ExecutiveDirector)

5) MrC.Cumaranatunge(Non-ExecutiveDirector)

6) MrG.H.A.Wimalasena(Independent,Non-ExecutiveDirector)

7) MrT.K.Bandaranayake(Independent,Non-ExecutiveDirector)

8) MrB.L.P.Jayawardena(ExecutiveDirector)

9) MrD.G.P.S.AbeygunawardanaDirector/GeneralManager

(appointedon8/8/2013asDirector)

10) MrR.H.NandajeewaDirector

(Resignedon8/8/2013)

IntermsofArticle88(i)oftheArticlesofAssociation,MrD.R.RajapakseandunderSection210oftheCompaniesActNo.7of

2007,MrT.K.BandaranayakeandMrG.H.A.Wimalasenaareavailableforre-election.

Directors interest in sharesDirectors holdings of ordinary shares in the Company are given below.

No of Shares as at No of shares as at

31.03.2014 31.03.2013

DrD.S.Rajapaksa 7,156 7,156

Mr.D.K.Rajapaksa 9,931 9,931

Mr.D.R.Rajapaksa 10,319 10,319

Mr.D.M.Rajapaksa 9,295 9,295

Mr.C.Cumaranatunge 2,244 2,244

Mr.G.H.A.Wimalasena Nil Nil

Mr.T.K.BandaranayakeNil Nil

Mr.B.L.P.Jayawardena Nil Nil

Mr.D.G.P.S.Abeygunawardana(appointedon8/8/2013) 100 -

Mr.R.H.Nandajeewa(retiredon8/8/2013) - 132

Total 39,045 39,077



The Directors of the Company who have relevant interests in

the shares of the Company have disclosed their shareholdings

in compliance with Section 200 of the Companies Act.

DirectorsRemunerationandOtherBenefits The details of the Directors remuneration and other benefits,

in respect of the Company for the financial year ended 31

March2014isgiveninNote8.1totheFinancialStatements

onpage94ofthisReport,asrequiredbySection168(1)(f)of

theCompaniesActNo.07of2007.Directorsremuneration

forthefinancialyear2013/14isRs.8,376,395(lastyear

Rs.8,057,195).

Directorsinterestintransactions:The Directors of the Company have made a disclosure as

requiredunderSection192(2)oftheCompaniesActNo.07of

2007.Note27tothefinancialstatementsdealingwithrelated

party disclosures include their interests in transactions under

note27.3onpage105.

InterestRegisterTheInterestsRegisterismaintainedbytheCompany,asper

theCompaniesAct,No.7of2007.AllDirectorshavemade

declarationsasprovidedforinSection192(1)&(2)ofthe

Companies Act aforesaid. The related entries were made in the

InterestsRegisterduringtheyearunderreview.TheInterests

RegisterisavailableforinspectionasrequiredbySection119

(1)(d)oftheCompaniesActNo.07of2007.

Board committeesThe Board while assuming the overall responsibility and

accountability in the management of the company has also

appointed Board Committees to ensure oversight and control

over certain affairs of the Company, conforming to the

corporate governance code and adopting the best practices.

Accordingly, the following Committees have been constituted

bytheBoard:

AuditCommittee:MrT.K.BandaranayakeChairman, Independent,

Non-ExecutiveDirector

MrG.H.Wimalasena Independent,



repOrt OF tHe Board of Directors (contd...)TheReportoftheAuditCommitteeisgivenonpages72and

73,whichformspartoftheAnnualReport.

RemunerationCommittee:MrG.H.A.WimalasenaChairman, Independent,


MrT.K.Bandaranayake Independent,


Mr.D.M.Rajapaksa Non-ExecutiveDirector

TheReportoftheRemunerationCommitteeisgivenonpage

74,whichformsapartoftheAnnualReport.

Employment Policies The Company continues to invest in human resource

development and implements effective practices to develop and

build an efficient and effective workforce to ensure optimum

contribution toward the achievement of its corporate goals.

The Company employment policies are based on recruiting

the best people, providing them training to enhance their

skills, and recognition of the innate skills and competencies

of each individual while offering equal career opportunities

regardless of gender, race or religion and to retain them with

the Company as long as possible. The number of persons

employed by the Company at year-end was 324 (last year 302).

System of internal controlsThe Board of Directors has established an effective and

comprehensive system of internal controls to ensure that proper

controls are in place to safeguard the assets of the Company,

to detect and prevent fraud and irregularities, to ensure that

proper records are maintained and Financial Statements

presentedarereliableandaccurate.MonthlyManagement

Accounts are prepared, giving management relevant, reliable

and up -to-date Financial Statements and key performance

indicators. The Statement on Directors responsibility for

financialreportingoftheCompanyissetoutonpage71ofthis

Report.

The Audit Committee reviews, on a regular basis, the reports,

policies and procedures to ensure that a comprehensive internal

control framework is in place.


DonationsThetotalamountofdonationswasRs.39,519intheyear

2013/14(20012/13Rs44,500).Thishasnotexceededthe

amount approved by shareholders at the last Annual General

Meeting.Nodonationwasmadeforpoliticalpurposes.

MajorTransactionsThere have been no transactions during the year under review

whichfallwithinthedefinitionofMajorTransactionsin

termsofSection185oftheCompaniesAct,No.07of2007.

ThetotalassetsoftheCompanyisRs.654mnand50%of

thetotalassetsisRs.327mn.TheCompanyhasnotbought

anyassetsorundertakenanyliabilitiesgreaterthanRs.327mn

during the year under review.

Share informationThe information pertaining to earnings per share, dividend

per share, net assets per share and market value per share is

given in the financial highlights on page 01 and in the Ten-year

summaryonpage133ofthisAnnualReport.

The twenty major shareholders and percentages held by each

oneofthemasat31stMarch2014aregivenonpage130of

theAnnualReport.

Public holding of shares in the CompanyAsat31stMarch2014,thepublicheld43.04%(in2012/2013-

13.91%) of the shares of the Company. This significant

difference arose due to changes in the interpretation of

thedefinitionofPublicHoldingbytheColomboStock

Exchange.

Statutory PaymentsThe Directors, to the best of their knowledge and belief, are

satisfied that all statutory payments due to the government,

other regulatory institutions and in relation to employees

have been made within the stipulated period and have been

accounted for during the financial year.

Compliance with laws and regulationsTo the best of the knowledge and belief of the Directors, the

Company has not engaged in any activities contravening the

laws and regulations of the country.


Social and Environmental ResponsibilityAs a responsible corporate body, the Company has taken

allnecessarystepsandprecautionstominimizeanyadverse

impactoftheCompanysactivitiesontheenvironment.When

introducing new business, products, methods and machines,

maximum care is taken to ensure that these conform to

accepted environmental and safety regulations and standards.

The Directors, to the best of their knowledge and belief, are

satisfied that the Company has not engaged in any activities

which have caused adverse effects on the environment and it

has complied with the relevant environmental regulations.

SustainabilityReportingSustainability practices have been built into every aspect of our

businesses and we consider sustainability goals along with our

operationalandfinancialgoals.ThisSustainabilityReportison

pages108to121ofthisAnnualReport.

Corporate GovernanceThe Company maintains and practices high principles of good

corporate governance. The Directors are responsible for the

formulation and implementation of overall business strategies,

policies and setting standards in the short, medium and long-

term adopting good governance in managing the affairs of the

Company. The practices adopted by the Company in relation

to corporate governance are set out on pages 53 to 58 of this

Report.

AuditorsReportTheCompanysexternalauditor,Messrs.HLBEdirisinghe&

Company, performed the audit on the Financial Statements

fortheyearended31March2014.TheAuditorsReporton

theFinancialStatementsisgivenonpage77ofthisReportas

required by Section 168 (1) (c) of the Companies Act.

Appointment of AuditorsTheretiringAuditorsHLBEdirisinghe&Company,Chartered

Accountants, have expressed their willingness to continue

in office. A resolution to re-appoint them as auditors and

authorizetheDirectorstofixtheirremunerationwillbe

proposedattheAnnualGeneralMeetingintermsofthe

CompaniesAct,No.7of2007.


AuditorsRemunerationandIndependenceThe Company paid audit fees to the external auditors for the

year2013/14amountingtoRs.282,900(2013-Rs.265,200).

BasedonthedeclarationprovidedbyMs.HLBEdirisinghe&

Company and as far as the Directors are aware, the Auditors do

not have any relationship with or interests in the Company that

may have a bearing on their independence, within the meaning

of the Code of Professional Conduct and Ethics issued by the

Institute of Chartered Accountants of Sri Lanka.

Outstanding litigationIn the opinion of the Directors, in consultation with the

Company lawyers, there is no litigation currently pending

against the Company which will have a material impact on the

reported financial results or future operations of the Company.

Post Balance sheet eventsIn the opinion of the Directors, no item, transaction or event of

an unusual nature has taken place between the financial year-

end and the date of this report that would materially affect

the results of the Company for the financial year in respect of

which this report is made.

On14thJuly2014,theCompanyinvestedinaPVCfactory,

OktaPVCLanka(Pvt)Ltd.,Baddegama,whowereengagedin

manufacturingPVCpipe&fittingsunderSLS.Thetotalassets

valueandLiabilitiestakenbyusareRs.137,167,655and

Rs.113,339,588respectively.Theamountpaidtotheowner

wasRs.23,828,067.ThecompanyinformedtheColombo

Stock Exchange prior to investing in this business line.

Going ConcernThe Board of Directors has reviewed the Companys business

and corporate plans and are satisfied that the Company has

adequate resources to continue its operations in the

foreseeable future. After considering the financial position,

operating conditions, regulatory and other factors and such

matters required to be addressed in The Corporate Governance

Code, the Directors have a reasonable expectation that

the Company possesses adequate resources to continue in

operation for the foreseeable future. For this reason, they

continue to adopt the Going Concern basis in preparing the

Financial Statements.


Financial Statements of the Company The Financial Statements of the Company, duly certified by the

Head of Finance and approved by two Directors in compliance

withSections152,153and168oftheCompaniesActNo.7of

2007,aregivenfrompages78to107oftheAnnualReport.

SecretariesPWCorporateSecretarial(Pvt)Ltd.continuestoworkas

Secretaries to the Company.

DividendsThe Directors recommend a dividend of 2.00 per share for the

yearended31stMarch2014(2.00persharein2012/13).

NoticeofMeetingDetailsoftheAnnualGeneralMeetingaregivenintheNotice

ofMeetingonpage136.

22ndAnnualGeneralMeetingThe22ndAnnualGeneralMeetingoftheCompanywillbeheld

onMondaythe19thdayofSeptember2014attheSriLanka

CollegeofObstetriciansandGynecologistsSamsonRajapaksa

AuditoriumatNo112,ModelFarmRoad,Colombo08,which

was the same venue for the previous year.

On behalf of the Board

D.K. Rajapaksa D. G. P. S Abeygunawardana

ManagingDirector Director/GeneralManager

P W Corporate Secretarial (Pvt) Ltd.

Secretaries

Colombo

1st August 2014.


stateMentof Directors responsibility

The following statement, which should be read in conjunction with the Auditors responsibilities, as set out

in their report, is made with a view to distinguish between the

respective responsibilities of the Directors and the Auditors, in

relation to Financial Statements.

TheDirectorsarerequiredbytheCompaniesAct,No07of

2007,toprepareFinancialStatementsforeachfinancialyear,

which give a true and fair view of the state of affairs of the

Company as at the end of the financial year and of the profit

and loss for the financial year. The Directors are required to

prepare these Financial Statements on the going concern basis,

unless it is not appropriate.

Since the Directors are satisfied that the Company has the

resources to continue its business for the foreseeable future,

the Financial Statements continue to be prepared on the said

basis.

The Directors consider that in preparing the Financial

Statements, the Company has used appropriate accounting

policies, consistently applied, and supported by reasonable

and prudent judgments and estimates, and that all accounting

standards which they consider to be applicable have been

followed.

The Directors are responsible for ensuring that the Company

keeps accounting records which disclose with reasonable

accuracy the financial position of the Company, and which

enable them to ensure that the Financial Statements comply

withtheCompaniesAct,No.07of2007.

The Directors have general responsibility for taking such steps

as are reasonably open to them to safeguard the assets of

the Company and to prevent and detect fraud and other

irregularities.

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