Annual Report 2016/2017

Transcription

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2 ON ALLY HOLDINGS PLC Vision Building Growth Mission To build growth by being the most desired business venue in the city. To enhance shareholder value by satisfying our customers with modern facilities and quality service by dedicated professionals.

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4 TABLE OF CONTENTS Page Corporate Information 1 Notice of Annual General Meeting 2 Chairman s Review 3 Board of Directors - Profile 4-6 Highlights 7 Annual Report of the Board of Directors on the affairs of the Company 8-12 Audit Committee Report 13 Remuneration Committee Report 14 Related Party Transactions Review Committee Report 15 Statement of the Directors Responsibility 16 Report of the Auditors 17 Statement of Comprehensive Income 18 Statement of Financial Position 19 Statement of Changes in Equity 20 Statement of Cash Flows 21 Notes to the Financial Statements Six year Review 49 Information to Investors 50 Major Shareholders of the Company 51 Form of Proxy Instruction for Completion of Proxy Enclosed Enclosed

5 1 ON ALLY HOLDINGS PLC CORPORATE INFORMATION Directors : Dr.Jagath Munasinghe (Chairman) Mrs. Tharsini Sarveshwaran (Deputy Managing Director) Mr. B. V. Selvanayagam Mr. G. T. Fazleabas Mr. M. I. R. Zahir Mr. A. C. Yahiyakhan Mr. T. A. Akbarally Mr. W. L. D. P. V. Jayawardene Mr. S. S. P. Rathnayake Mr. S. Selvanayagam (Alternate Director to Mr.B.V.Selvanayagam) Registered Office : Unit 603, 4th Floor, Unity Plaza Building, No.2, Galle Road, Colombo-4 Tel: Secretaries : P W Corporate Secretarial (Pvt) Ltd., 3/17, Kynsey Road, Colombo 8 Tel: Auditors : Messrs PricewaterhouseCoopers, Chartered Accountants, 100, Braybrooke Place, Colombo 2. Bankers : Bank of Ceylon Legal Advisors : D M Swaminathan Associates

6 ON ALLY HOLDINGS PLC 2 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Thirtieth (30th) Annual General Meeting of the Company will be held at Waters Edge, Battaramulla on Saturday, 30 th September 2017 at a.m. for the following purposes; 1. ROUTINE BUSINESS 1.1 To receive and consider the Annual Report of the Board of Directors on the affairs of the Company and the Statement of Accounts for the year ended 31st March 2017 with the Report of the Auditors thereon. 1.2 To re-elect Mr. Mohamed Imran Rasheed Zahir who retires by rotation in terms of Article 88 of the Articles of Association of the Company, a Director. 1.3 To re-appoint Messrs. PricewaterhouseCoopers, Chartered Accountants, as the Auditors of the Company and to authorize the Directors to fix their remuneration. 1.4 To authorize the Directors to determine donations for the year ending 31st March 2018 and up to the date of the next Annual General Meeting. 2. SPECIAL BUSINESS 2.1 To consider and if thought fit to pass the following Special Resolution: IT IS HEREBY RESOLVED to amend the Articles of Association of the Company, (a) by the addition of the words not being a Director appointed in terms of Articles 80 (A) to Article 87 (iv) (v), so that the said Articles shall read as follows:- 87 (iv) If [not being a Director appointed in terms of Articles 80 (A)]he be absent from Meetings of the Directors for three months without leave, and the Directors resolve that his office be vacated. 87 (v) If [not being a Director appointed in terms of Articles 80 (A)]he be requested in writing by all his co-directors to resign, (b) by the addition of the words and the Directors appointed in terms of Articles 80 (A) to Article 88 (i), so that the said Article shall read as follows:- 88. Subject to the provisions of Article 80 (A) at each Annual General Meeting (i) By order of the Board ON ALLY HOLDINGS PLC One-third of the Directors for the time being, or if their number is not a multiple of three the number nearest to (but not greater than) one-third shall retire from office. Provided that a Director appointed to the office of Chairman, Managing Director or Joint Managing Director and the Directors appointed in terms of Article 80 (A) shall not, while holding that office or a Director vacating office in terms of 88 (ii), be subject to retirement by rotation or be taken into account in determining the Directors to retire in each year; P W CORPORATE SECRETARIAL (PVT) LTD Secretaries 10 August 2017 Colombo Notes 1. A Shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on behalf of him/her. 2. A proxy need not be a Shareholder of the Company. 3. The Form of Proxy is enclosed for this purpose. 4. The completed Form of Proxy must be deposited at the Registered Office of the Company, Unit 603, 4th Floor, Unity Plaza Building, No. 2, Galle Road, Colombo 04 not later than forty seven (47) hours prior to the time appointed for the Meeting.

7 3 ON ALLY HOLDINGS PLC CHAIRMAN S REVIEW On behalf of the Board of Directors of On ally Holdings PLC, I have great pleasure in welcoming you to the 30th Annual General meeting of the Company and to present the Annual report and the Statement of Accounts for the financial year ended 31st March I am pleased to announce that we have just completed a challenging year, in a vibrant business environment with remarkable progress made by the Company during the year under review. Operating Results By recognizing the responsibility placed on us to ensure the success of our business, the On ally Holdings PLC was able to sustain a strong growth during the financial year 2016/2017, through registering a profit before tax of Rs Million excluding the gain on revaluation of investment properties of Rs 164 Million. It is a 17 % increase compared to the previous year. In the year under review, turnover of the company grew by 11.8 % to reach Rs Million, compared with the turnover of Rs Million in 2015/2016. The revision of rentals of existing tenants during the financial year and increased interest rates on investments were the major reasons for this increase in turnover and the profitability. We are happy to announce that the Directors of the company have approved a final Dividend of Rs per share whilst an Interim Dividend was paid of Rs per share. Therefore, the total Dividend for the year under review was Rs per share, by registering the largest payout to shareholders since the inception of the Company. The total dividend paid to the shareholders of the On ally Holdings PLC for the year under review was Rs. 54 Million. It is a 5 % increase compared to the previous year. quality office space in the area my vision is to develop it to its full potential. I am mindful that there are a few challenges that we need to face in doing that. Providing adequate parking space improving the existing vertical accessibility along with facilities for disabled are the main ones. Further, the cost involved for an overall refurbishment would be very high. Yet, I m sure we will be able to overcome all hurdles and achieve our aim within next year. I m happy to keep you informed that the Board of Management has been making good contacts with parties those who are still interested in having office space at a higher rent and such occupations will elevate the image of the property, without necessarily breaking away from the recognition that it presently has in computer and IT related businesses. Dr. Shabbir Hussein Abbas Gulamhusein was a Director of On ally holdings PLC from 24 March 2003 to 09 June Although I did not have the opportunity to associate him closely I am aware that he had contributed immensely for the success of the Company. Therefore, I, myself on behalf of the Board of Directors wish to place on record our appreciation for the services rendered by him. Let me conclude this message by thanking my colleagues on the Board of Directors for their guidance and support exercised during the financial year under review. Also I would like to extend my appreciation to all of our valued share holders, customers, Bankers, Company Secretaries and Auditors for their continued support. I trust that all shareholders will join with me in appreciating the Managing Director, management team and the staff of the On ally Holding PLC, for their dedication to achieve the company s current performance. Our Focus The Unity Plaza Building, which is the main source of income of On ally holdings, is situated in a prime location. Its location in Bambalapitiya is such that it has lot of potential to be developed mainly as a high-end office complex. As there is a dearth of good Dr. Jagath Munasinghe Chairman 10 August 2017

8 ON ALLY HOLDINGS PLC 4 BOARD OF DIRECTORS Dr. Jagath Nandana Munasinghe Chairman Dr Jagath Munasinghe is a Chartered Architect and a Town Planner by profession and the present Chairman of the Urban Development Authority of Sri Lanka, in addition to his duties as the Director General of the National Physical Planning Department. He has obtained Bachelors Degree in Built Environment and Masters Degrees in Architecture and Town Planning from the University of Moratuwa and a Doctorate in Urban Planning and Design from National University of Singapore. He has been a senior academic in the University of Moratuwa since 1999 and a visiting faculty member of the Sabaragamuwa University, University of Sri Jayawardanepura and the Institute of Surveying and Mapping Sri Lanka. He held many responsible positions in the University of Moratuwa, Institute of Town Planners, Sri Lanka Institute of Architects, etc. As a practicing Architect and a Town Planner he has immensely contributed to several national and international development projects and authored several publications. Mr. Priya Jayawardene Director Mr. Priya Jayawardene currently serves as the Deputy Director General (Finance) of the Urban Development Authority. He has extensive experience in business and finance, both in Sri Lanka and overseas. Mr. Jayawardene was the Head of Finance at the Sri Lanka State Plantations Corporation prior to joining the Fiji Sugar Corporation, Fiji as the Chief Accountant. After completion of his assignment in Fiji, he joined Amrind (Pvt) Ltd, Melbourne, Australia as the Financial Controller. Thereafter he served as Deputy General Manager (Finance) of the Employees Trust Fund Board, Sri Lanka. Mr. Jayawardene then moved to Singapore and joined BT Aero Services Pvt. Ltd as the Chief Financial Officer. Mr. Jayawardene is a Member of the Institute of Chartered Accountants of Sri Lanka and is also a Member of the Chartered Institute of Management Accountants, London. Mr. Sampath Sumedha Pujitha Rathnayake Director Mr. S. S. P. Rathnayake is the Director General of the Urban Development Authority, an Institution at the forefront of the Sri Lanka s emerging urban transformation. He is a Chartered Civil Engineer having vast experience in implementation of multi-disciplinary Major Civil Construction Contracts. He has extensive experience in planning facilitating and managing large scale urban development, real estate and infrastructure initiatives in the country. Mr. S. S. P. Rathnayake worked as the Divisional Engineer at the Road Construction and Development Company (Pvt.) Ltd., Planning Engineer at the M/S Hyundai Development & Engineering (Pvt.) Ltd., Senior Project Manager at the International Construction Consortium, and the General Manager at the RR Construction (Pvt.) Ltd. He has graduated from the University of Moratuwa, Bachelor of Science in Engineering (Civil) Hons. with a Second Class Upper Division and also having a Postgraduate Diploma in Highway and Traffic Engineering from the University of Moratuwa. Mr. Brian V Selvanayagam Director Mr. Brian V Selvanayagam was appointed to the Board of On ally Holdings PLC on 1st November He is an Associate Member of the Chartered Institute of Management Accountants (UK), Fellow Member of the Institute of Chartered Accountants of Sri Lanka, Chartered Marketers and Fellow Member of the Chartered Institute of Marketing (UK), Fellow Member of the Certified Management Accountants of Sri Lanka and Chartered Member of the Chartered Institute for Securities & Investment. (UK). He is a member of the Audit & Risk Committee of the Chartered Institute of Marketing (UK) and Chairman of the Chartered Institute of Marketing Sri Lanka, Director of Vision One Private Limited, and Renuka Capital PLC. He counts over 20 years of work experience in fields covering banking, corporate finance and finance, business development and education and has served at Ernst & Young, DFCC Bank, HSBC Sri Lanka and Dunamis Capital PLC. He is also a Justice of the Peace for the whole island.

9 5 ON ALLY HOLDINGS PLC BOARD OF DIRECTORS (contd) Mrs. Tharsini Sarveshwaran Deputy Managing Director Mrs. T Sarveshwaran is a full member of the Association of Business Executives (UK) and she has obtained an Executive Diploma in Accounting and Finance from the Institute of Chartered Accountants of Sri Lanka Mrs. Sarveshwaran possesses 19 years experience in the fields of Accounting and Administration at On ally Holdings PLC. Mr. Gulamhussein T Fazleabas Director Mr. Gulamhussein Fazleabas is a Chartered Engineer by profession and holds a BS in Civil Engineering from the University of Louisiana in Lafayette (USA) and a MS also in Civil Engineering from the University of North Carolina in Charlotte (USA). He is a Member of the Institute of Engineers Sri Lanka and a licensed Professional Engineer in Louisiana and North Carolina, USA. He has over 30 years private sector design engineering and project management experience in both Sri Lanka and USA and is presently the Chairman/Managing Director of Perigon Lanka Private Limited, a company carrying out Project Management, Structural Engineering and Cost Consultancy Services. Mr. Imran Zahir Director Mr. Imran Zahir has over 16 years of experience in the Investment and Finance industry, regionally and internationally and a Chartered Management Accountant. He presently functions in the Investment and Finance industry in Sri Lanka and Europe. He is a Director of the Adam Investments Group and several public companies in Sri Lanka, and a Director & Head of Investment of the Orchard Capital Group EU/UK. Mr. Abdul Careem Yahiyakhan [Dip. Sys. Eng, Pg.Dip (India) BA (UK)] Director Mr. A C Yahiyakhan holds a Bachelor of Arts Degree from the United Kingdom, Post Graduate Diploma in Personnel Management from India and a Diploma in Computer Software Engineering. He is experienced in the fields of administration in computer center management, foreign employment supplier services and was an Advisor to Hon. Mohamed Musthaffa, Deputy Minister of Higher Education in Sri Lanka. He has over 21 years experience in the private sector as a Director and Managing Director both in Sri Lanka and abroad and is presently the Chairman / Managing Director of M R S Group (Hazmea) providing Computer Centres and Foreign employment services. Mr. Tyeabally A Akbarally Director Mr. Tyeabally Akbarally is the Executive Director Akbar Brothers (Private) Limited, Quick Tea (Private) Limited, Falcon Trading (Private) Limited, Land and Building Limited, Flexiprint (Private) Limited and Akbar Pharmaceuticals (Private) Limited. In addition to the above Mr. Akbarally is also Chairman - Amana Takaful Limited and Amana Takaful Maldives Limited and Deputy Chairman of Amana Bank Limited. He also serves as a Member of the advisory panel on Tea sector to the Minister of Plantation Industries. He was Past Chairman of the Colombo Tea traders Association, Spices and Allied products Traders Association and a former Director Sri Lanka Tea Board and former Committee member of the Ceylon Chamber of Commerce.

10 ON ALLY HOLDINGS PLC 6 BOARD OF DIRECTORS (contd) Mr. Shehan Selvanayagam (Alternate Director to Mr. B V Selvanayagam) Mr. Shehan Selvanayagam is currently a Director of Loops Solutions (Pvt) Ltd which is a leading Digital Agency in Sri Lanka working with over 45 leading brands in Sri Lanka as well as clients in the Middle East, Europe and Australia Shehan who hails from an e-commerce background was previously employed at Sri Lankan Airlines handling the online marketing aspects of the Airline, where he was responsible for setting up and running the E-Commerce operation of the airline, from there he joined Nations Trust Bank and was handling the Alternate Channels of Banking within the Bank. He has a Degree in Business Management from the University of Wales, a graduate from the Chartered Institute of Marketing (UK) and holds a Masters in Information Technology from the University of Keele (UK). He regularly conducts seminars on Digital Media for companies as well as functions as a Marketing Consultant for several organizations in Sri Lanka.

11 7 ON ALLY HOLDINGS PLC HIGHLIGHTS OPERATING RESULTS 2016/ /16 Increased (Rs.000 ) (Rs.000 ) (Decreased) % Turnover 139, , Operating Profit 88,221 86, Interest income 31,502 15, Fair value gain on investment properties 164, ,523 (56.67) Profit before tax 283, ,542 (40.96) Tax 33,146 (150,089) (122.08) Profit after tax 316, ,453 (4.11) Other comprehensive income - net of tax (9) 1,946 (100.48) Profit brought forward 1,402,234 1,120, Profit available for appropriation 1,719,094 1,453, Transfer from reserve 1, Dividends paid (54,252) (51,627) 5.08 Forfeited dividend Profit carried forward 1,666,560 1,402, KEY INDICATORS Earnings per share (Rs) (4.08) Earnings per share(exclusive fair value gain) (Rs) (10.33) Dividend per share (Rs) Net assets per share (Rs) Market price per share as at 31 March (Rs) (8.96) Value (Rs Million) / / / / / /2017 Year Turnover Profit After Taxtation Dividends

12 ON ALLY HOLDINGS PLC 8 ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY The Directors of On ally Holdings PLC have pleasure in presenting their Annual Report with the Audited Financial Statements of the Company for the year ended 31st March General On ally Holdings PLC is a public limited liability Company which was incorporated under the Companies Ordinance No.51 of 1938 as a public limited company on the 25th June 1982 which obtained the certificate to commence business on 20th August 1982, listed on the Colombo Stock Exchange on 25th April 1991 and re-registered as per the Companies Act, No 7 of 2007 on 13th December 2007 under the new Number PQ 107. Principal activities of the Company and review of performance during the year The Company s principal activities, which remained unchanged during the year, are Property Development / Real Estate. A review of the business of the Company, its performance during the year and its future prospects The Names of the Directors and their relevant interests in shares are given below. are contained in the Chairman s Review, which forms and integral part of this Report. This Report and the Financial Statements reflect the state of affairs of the Company. Financial Statements The complete Financial Statements of the Company, duly signed by two Directors on behalf of the Board of Directors and the Auditors are given on pages 18 to 48. Accounting Policies The accounting policies adopted by the Company in the preparation of the Financial Statements are given on pages 22 to 33 which are consistent with those of the previous period. Board of Directors and Relevant Interest in Shares The Board consists of 9 Directors, comprising of one Executive Director and 8 Non Executive Directors, of whom 4 are Independent. Names of Directors Designation No. of shares As at No. of shares As at Dr. J N Munasinghe Mr. B V Selvanayagam Shares held jointly with Mr. S G Selvanayagam & Mrs. L Selvanayagam Shares held by Mrs. L Selvanayagam Dr. Shabbir Abbas Gulamhusein Shares held in the following manner Non Executive Director Non Executive Director Non Executive Director Nil ,500 Nil } } 1,131, , , ,556 } } Dr. S A Gulamhusein 31,250 31,250 Waldock Mackenzie Ltd/ 465, ,128 Dr. S A Gulamhusein Assetline Leasing Company Ltd./Dr. S A Gulamhusein 1, ,717 1,000 Sampath Bank PLC/ 254,160 1,160 Dr. S H A Gulamhusein Commercial Bank of Ceylon 17,179 12,052 PLC/Dr. S A Gulamhusein 1,131, ,590

13 9 ON ALLY HOLDINGS PLC ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY Names of Directors Designation No. of shares As at No. of shares As at Mrs. T Sarveshwaran Executive Director 57,316 57,316 Mr. G T Fazleabas Independent Non Executive Director Mr. M I R Zahir Independent Non Nil Nil Executive Director Mr Abdul Careem Yahiyakhan Mr. Shehan Selvanayagam- Independent Non Executive Director Alternate Director Nil Nil Nil Nil (Alternate Director to Mr. B V Selvanayagam) Mr. T A Akbarally Independent Nil Nil Non Executive Director Mr. G Ramanan-(Alternate Director to Mr.M.I.R.Zahir- Resigned w.e.f ) Alternate Director Nil Nil Mr. W L D P V Jayawardene Mr. S S P Rathnayake Non Executive Director Non Executive Director Nil Nil Nil Nil The profiles of all the Directors detailing their areas of expertise, are included on pages 4 to 6 of the Annual Report. Retirement of Directors In terms of Article 88 of the Articles of Association of the Company, Mr. M I R Zahir will retire by rotation and being eligible is recommended for re-election. Changes in the Directorate Dr. S A Gulamhusein, who served as a Non Executive Director of the Company since May 2003, passed away on 9th June, Mr. G Ramanan, Alternate Director to Mr. Imran Zahir resigned on 24th July, Independence of Directors The Independence of the Non Executive Directors was determined according to the Listing Rules of the Colombo Stock Exchange and each of the Directors has declared their independence and submitted signed declarations to that effect. Declaration of Interests of Directors The Company maintains an interest Register in terms of the Companies Act No. 7 of 2007 which is deemed to form part of this Annual Report and is available for inspection upon request. All related party transactions which encompass the transactions of Directors who were directly or indirectly interested in a contract or a related party transaction with the Company during the accounting period is recorded in the Interest Register in compliance with the applicable law.

14 ON ALLY HOLDINGS PLC 10 ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY The Directors have declared their interests in contracts and their relevant interests in shares, at meetings of the Directors. Remuneration of Directors The total remuneration paid to the Directors for the financial year was Rs.6,324,480/- Corporate Governance The Board of Directors is committed to the highest standards of governance designed to protect the interest of the shareholders while promoting integrity, transparency and accountability. The Board ensures that the Company is in compliance with applicable legal and regulatory requirements including meeting the requirements of the Listing Rules of the Colombo Stock Exchange, The Companies Act No. 7 of 2007 and all other applicable laws and regulations. Duties of the Board The Board is responsible for the formulation and implementation of the Company s short term, medium term and long term strategies. The Board also ensures that the Senior Management team has the requisite skills, expertise and knowledge to implement these strategies. The Board ensures that all Company decisions are in compliance with laws and regulations of the country and that each decision meets the ethical standards. The Board through the Audit Committee ensures that the Company follows accounting standards as set out by the Sri Lanka Financial Reporting Standards (SLFRS) and all financial statements are in compliance with financial regulations. The Board, in addition to keeping all shareholder interests a priority when considering corporate decisions, also keeps the Colombo Stock Exchange and the public informed of all significant decisions. Delegation of Authority The Board has delegated the authority of the day to day management of the Company to the Deputy Managing Director who is responsible for delivering services according to the strategic plan, within the policies and budgets approved by the Board. Delegation to Board Members The Board has delegated certain functions and duties to sub committees that comprises of Board members. The functions and duties of each subcommittee namely, the Audit Committee, Remuneration Committee and the Related Party Transactions Review Committee are detailed in the respective reports. The Board is also encouraged to seek independent professional advice when necessary, at the Company s expense and also have access to the Company Secretary to obtain advice and services as necessary. Appraisal of Board Performance The Board is aware that appraising their own performance periodically would enhance the understanding of individual performance of the Board as a whole. However, though there is no formal system in place, the Board members ensure that Board responsibilities are satisfactorily discharged. Remuneration Committee The Remuneration Committee comprises of three Non Executive Directors of whom one is Independent; Mr. S S P Ratnayake (Chairman) Mr. A C Yahiyakhan Mr. W L D P V Jayawardene The Remuneration Committee is responsible to ensure that the Company s remuneration policies are adequate to attract and retain top talent. The aggregated remuneration of the Board of Directors is disclosed in the notes to the financial statements and in this Report. Audit Committee The Audit Committee comprises of the four Non Executive Directors of whom three are Independent. Mr. W L D P V Jayawardene (Chairman) Mr. M I R Zahir Mr. A C Yahiyakhan Mr. T A Akbarally The Report of the Audit Committee is given separately in the Annual Report detailing the functions and

15 11 ON ALLY HOLDINGS PLC ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY duties of the Committee and the specific objectives met in the financial year under review. Related Party Transactions Review Committee The Related Party Transactions Review Committee comprises of three Independent Non Executive Directors and one Non Executive Director; Mr. T A Akbarally(Chairman) Mr.A C Yahiyakhan Mr. G T Fazleabas Mr. B V Selvanayagam The Report of the Related Party Transactions Review Committee is given separately in the Annual Report detailing the functions and duties of the Committee. Internal Controls The Board through delegation to the Audit Committee ensures that the Company maintains a sound system of Internal Controls to safeguard investments and Company assets. Therefore, the Audit Committee conducts a review of the effectiveness of the Company s system of internal controls. Company Secretary The Company Secretary ensures that Board procedures are followed and that applicable rules and regulations are complied with. The Company Secretary also liaises with the CSE on all of the Company s communications. The Company Secretary is also responsible for informing of the General Meetings to the Shareholders and for accurate recording of proxy voting. Major Transactions The Board of Directors is required to act in accordance with section 185 of the Companies Act in regard to major transactions as per the said section 185. There were no major transactions entered into by the Company, during the year. Dividends A final dividend of Rs per share was approved by the Directors for the year under review and the said dividend would be paid on 24th August Accordingly, the total dividend for the year under review amounts to Rs per share (Rs per share for the year ended 31st March 2016). Auditors Messrs. PriceawaterhouseCoopers, Chartered Accountants served as the Auditors during the year under review and being eligible are recommended for re-appointment as the Auditors of the Company, at the Annual General Meeting. The Auditors do not have any other relationship with the Company other than as Auditors of the Company who have also provided certain non audit services. A total amount of Rs.389,050/-is payable by the Company to the auditors for the year under review, comprising Rs.310,000/- as audit fees and Rs.79,050/- for non audit services. The details of the fee payable to the Auditors have been set out under the Note 7 to the financial statements. Donations During the year under review, the Company did not make any donations. Statutory Payments The Directors confirm that, to the best of their knowledge, all taxes, duties and levies payable by the company, all contribution, levies and taxes payable on behalf of and in respect of the employees of the company and all other known statutory dues as at the reporting period have been paid or, were relevantly provided for. Contingent Liabilities There were no material contingent liabilities as at the reporting period, except as disclosed in Note 26 to financial statements on page 46. Events occurring after the reporting period No event has occurred since the reporting date which would require adjustment to, or disclosure in the financial statements, except as disclosed under Note 30 to the financial statements on page 48. An interim dividend of Rs 1.10, per share was paid on 10th, January 2017.

16 ON ALLY HOLDINGS PLC 12 ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF THE COMPANY Amendments to the Articles of Association The Board resolved to place the Special Resolution set out in the Notice of Meeting under Special Business in order to clearly set out the provisions pertaining to the Directors nominated by the Urban Development Authority. Annual General Meeting The Annual General Meeting of the Company will be held on Saturday 30th September 2017 at a.m. The notice of the Annual General Meeting appears on page 2. Dr. Jagath Munasinghe Chairman Ms. T Sarveshwaran Deputy Managing Director P W Corporate Secretarial (Pvt) Ltd. Secretaries 10 August 2017

17 13 ON ALLY HOLDINGS PLC AUDIT COMMITTEE REPORT The composition of the Audit Committee during the year and up to 22nd January, 2017 was as follows; Mr. Imran Zahir - Chairman -Independent Non Executive Director Mr. Gulamhussein T. Fazleabas -Independent Non Executive Director Mr. Abdul Careem Yahiyakhan -Independent Non Executive Director Mr. Tayebally Akbarally -Independent Non Executive Director The Audit Committee was reconstituted on 23rd January, 2017 and the Committee now comprise of the following: Mr. W L D P V Jayawardene - Chairman -Non Executive Director Mr. Imran Zahir -Independent Non Executive Director Mr. Abdul Careem Yahiyakhan -Independent Non Executive Director Mr. Tayebally Akbarally -Independent Non Executive Director Mr. Jayawardene is a Member of the Institute of Chartered Accountants of Sri Lanka and is also a Member of the Chartered Institute of Management Accountants, London. The Deputy Managing Director together with the Accountant attend meetings of the Committee by invitation. The External Auditors are requested to be present as and when required. External Auditors The Committee held meetings with the External Auditors to discuss the nature, scope and the approach of the annual audit. The Committee also held discussions on matters raised on management letters issued by the Auditors. Necessary actions have been taken by the Company in response to the issues raised by the Auditors. The Committee has also reviewed the other services provided by the Auditors to ensure that the independence of the Auditors has not been impaired. Risk Management The Committee has held discussions with the Sectional Heads to discuss the policies and practices related to risk management. The Committee has also reviewed different types of risks attached to the Company s business and its operations during the year under consideration with a view to taking appropriate corrective action. Re-appointment of Auditors The Committee has recommended to the Board of Directors that Messrs PricewaterhouseCoopers be reappointed the Auditors for the year ending 31st March 2018 subject to the approval of the shareholders at the Annual General Meeting. The Audit Committee has also made its recommendations to the Board of Directors on the fees payable to the Auditors for approval by the Board. Financial Reporting The Committee oversees the Company s financial reporting on behalf of the Board of Directors as part of its responsibility and have reviewed the Annual Financial Statements and recommended them to the Board prior to their issuance. The management ensures compliance with relevant accounting standards when preparing the Financial Statements. W L D P V Jayawardene Chairman - Audit Committee 10 August 2017 Compliance with Laws & Regulations The Committee has reviewed the reports submitted by the management on the state of Compliance with applicable laws and regulations and statutory payment made by the Company and ensured that all requirements are adhered to.

18 ON ALLY HOLDINGS PLC 14 REMUNERATION COMMITTEE REPORT The Company s remuneration policy is an indiscriminative policy irrespective of race, religion or gender which has been developed to attract, motivate and retain good qualitative staff to achieve the goals and objectives of the Company. The composition of the Remuneration Committee during the year and up to 9th June, 2017 was as follows; Dr. Shabbir A. Gulamhusein (deceased on ) Mr. Abdul Careem Yahiyakhan Mr. W L D P V Jayawardene Chairman /Non Executive Director Independent Non Executive Director Independent Non Executive Director The Remuneration Committee was reconstituted on 3rd July, 2017 and the Committee now comprise of the following members: Mr. S S P Rathnayake Mr. Abdul Careem Yahiyakhan Mr. W L D P V Jayawardene Chairman /Non Executive Director Independent Non Executive Director Independent Non Executive Director During the year, the Committee carried out the following functions: * Reviewing the remuneration of the Executive and Non-Executive Directors. * Evaluating the performance of key positions of the senior management against set goals and determining the basis for revising remuneration and other benefits. * Recommending the policy governing annual increments to staff. * Reviewing of salary structure and payment of bonus to the staff. S S P Rathnayake Chairman - Remuneration Committee 10 August 2017

19 15 ON ALLY HOLDINGS PLC REPORT OF THE RELATED PARTY TRANSACTIONS REVIEW COMMITTEE THE ROLE AND RESPONSIBILITIES The Related Party Transactions Review Committee ( the Committee ) is tasked with reviewing all Related Party Transactions of the Company and ensuring that it complies with the requirements of the SEC Code of Best Practices on Related Party Transactions ( the Related Party Code ) and other relevant statutes and regulations. The Committee reviews and pre-approves all proposed non-recurrent Related Party Transactions of the Company. Further, the Committee reviews all recurrent Related Party Transactions on a quarterly basis and annually to ensure compliance with the limits and reporting guidelines specified by the Related Party Code. RELATED PARTY TRANSACTIONS REVIEW COMMITTEE COMPOSITION The Committee comprises of three (03) Independent Non-Executive Directors and one(01)non- Executive Director. The members of the Related Party Transactions Review Committee are ; Assess the adequacy of related party reporting systems along with the advice of the External and Internal Auditors. Ensure that all transactions with related parties are in the best interest of all shareholders and adequate transparency is maintained. Establish guidelines and policies for the management and reporting of related party transactions. T. A. Akbarally Chairman Related Party Transactions Review Committee 10 August 2017 Mr. T A Akbarally - Chairman - Independent Non- Executive Director Mr. G T Fazleabas - Member - Independent Non- Executive Director Mr. A C Yahiyakhan - Member -Independent Non- Executive Director Mr. B V Selvanayagam - Member - Non- Executive Director. KEY ACTIVITIES OF THE RELATED PARTY TRANSACTIONS REVIEW COMMITTEE: Review and pre-approve all non-recurrent related party transactions of the Company prior to approval by the Board of Directors. Review all related party transactions to ensure that they are in the best interests of the Company. Ensure that all reporting requirements of the Related Party Code and other statutes are met. Update the Board of Directors on the Related Party Transactions of the Company.

20 ON ALLY HOLDINGS PLC 16 STATEMENT OF DIRECTORS RESPONSIBILITY FOR PREPARATION OF FINANCIAL STATEMENTS The Directors are required by the Companies Act, No.7 of 2007 to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Company as at the end of the financial year and the income and expenditure of the Company for the financial year. The Directors are also responsible to ensure that the financial statements comply with the regulations made under the Companies Act, which specifies the form and content of financial statements and any other requirements which apply to the Company s financial statements under any other law. The Directors ensure that the financial statements presented in this Annual Report have been prepared using appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates and in compliance with the Sri Lanka Accounting Standards (SLFRS and LKAS) issued by the Institute of Chartered Accountants of Sri Lanka, Companies Act, No.7 of 2007 and the Sri Lanka Accounting and Auditing Standards Act No.15 of The Directors are responsible for ensuring that the Company keeps sufficient accounting records, which discloses the financial position of the Company with reasonable accuracy, which will enable them to have the financial statements prepared and presented as aforesaid. They are also responsible for taking measures to safeguard the assets of the Company and in that context to have proper regard to the establishment of appropriate systems of internal control with a view to prevention and detection of fraud and other irregularities. The Board of Directors is of the opinion that it has discharged its responsibilities as set out above. The Directors are also confident that the Company has adequate resources to continue in operation and have applied the going concern basis in preparing the financial statements. By Order of the Board ON ALLY HOLDINGS PLC Dr. Jagath Munasinghe Chairman Tharsini Sarveshwaran Deputy Managing Director 10 August 2017 Colombo

21 17 ON ALLY HOLDINGS PLC Independent Auditor s Report To the Shareholders of On ally Holdings PLC Report on the financial statements 1 We have audited the accompanying financial statements of On ally Holdings PLC, which comprise the statement of financial position as at 31 March 2017, and the statement of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information as set out in pages 18 to 48. Management s Responsibility for the Financial Statements 2 Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility 3 Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Sri Lanka Auditing Standards. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 4 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 5 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion 6 In our opinion the financial statements give a true and fair view of the financial position of On ally Holdings PLC as at 31 March 2017, and its financial performance and cash flows for the year then ended in accordance with Sri Lanka Accounting Standards. Report on other Legal and Regulatory Requirements 7 These financial statements also comply with the requirements of Section 151 (2) of the Companies Act, No. 07 of August 2017 COLOMBO CHARTERED ACCOUNTANTS

22 ON ALLY HOLDINGS PLC 18 STATEMENT OF COMPREHENSIVE INCOME (all amounts in Sri Lanka Rupees) Note Year ended 31 March Revenue 5 139,669, ,868,499 Other operating income 6 21,226,005 22,428,038 Operating expenses 7 (72,674,864) (60,728,339) Operating profit 88,220,988 86,568,198 Finance income 9 31,502,209 15,451,181 Fair value gain on investment property ,000, ,523,032 Profit before tax 283,723, ,542,411 Tax 10 33,146,181 (150,089,550) Profit for the year 316,869, ,452,861 Other comprehensive income Items that will not be reclassified to profit or loss Actuarial (loss) / gain on remeasurements of post employment benefit obligations 24 (10,700) 2,358,722 Gains on revaluation of building 13 2,621,386 16,553,685 Tax on other comprehensive income 10 (313,282) (3,309,671) Total other comprehensive income for the year - net of tax 2,297,404 15,602,736 Total comprehensive income for the year 319,166, ,055,597 Earnings per share Earnings per share - basic (exclusive of fair value gain) The Notes on pages 22 to 48 form an integral part of these financial statements. Independent Auditor s report on page 17.

23 19 ON ALLY HOLDINGS PLC STATEMENT OF FINANCIAL POSITION (all amounts in Sri Lanka Rupees) Note As at 31 March ASSETS Non-current assets Property, plant and equipment 13 48,020,168 47,450,823 Intangible assets , ,927 Investment property 15 1,845,000,000 1,681,000,000 1,893,283,680 1,728,779,750 Current assets Trade and other receivables 18 19,910,027 15,256,871 Short term Investments ,234, ,000,000 Cash and cash equivalents 20 16,255,872 18,974, ,400, ,231,096 Total assets 2,233,684,413 2,009,010,846 EQUITY AND LIABILITIES Capital and reserves Stated capital ,007, ,007,700 Revaluation reserve 22 41,039,468 39,990,241 Retained earnings 1,666,559,600 1,402,234,497 1,882,606,768 1,617,232,438 Non-current liabilities Trade and other payables 23 33,830,160 56,308,176 Retirement benefit obligations 24 6,364,432 5,460,526 Deferred income tax ,028, ,696, ,223, ,465,135 Current liabilities Trade and other payables 23 55,390,354 26,961,997 Income tax payables 29,464,276 2,351,276 84,854,630 29,313,273 Total liabilities 351,077, ,778,408 Total equity and liabilities 2,233,684,413 2,009,010,846 I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act, No. 07 of Accountant 02 August 2017 The Board of Directors is responsible for the preparation and presentation of these financial statements. These financial statements were authorized for issue by Board of Directors on 02 August Chairman Deputy Managing Director 02 August August 2017 The Notes on pages 22 to 48 form an integral part of these financial statements Independent Auditor s report on page 17.

24 ON ALLY HOLDINGS PLC 20 STATEMENT OF CHANGES IN EQUITY (all amounts in Sri Lanka Rupees) Note Stated Revaluation Retained Total capital reserve earnings Balance at 1 April ,007,700 27,054,828 1,120,741,585 1,322,804,113 Profit for the year ,452, ,452,861 Other comprehensive income for the year - 13,656,790 1,945,946 15,602,736 Total comprehensive income for the year - 13,656, ,398, ,055,597 Depreciation transfer 22 - (721,377) 721,377 - Dividends paid (32,376,425) (32,376,425) (19,250,847) (19,250,847) Total transactions with owners, recognised directly in equity - (721,377) (50,905,895) (51,627,272) Balance at 31 March ,007,700 39,990,241 1,402,234,497 1,617,232,438 Balance at 1 April ,007,700 39,990,241 1,402,234,497 1,617,232,438 Profit for the year ,869, ,869,378 Other comprehensive - 2,306,820 (9,416) 2,297,404 income for the year Total comprehensive income for the year - 2,306, ,859, ,166,782 Depreciation transfer 22 - (1,257,593) 1,257,593 - Dividends paid (35,001,540) (35,001,540) (19,250,847) (19,250,847) Forfieted dividend , ,935 Total transactions with owners, recognised directly in equity - (1,257,593) (52,534,859) (53,792,452) Balance at 31 March ,007,700 41,039,468 1,666,559,600 1,882,606,768 The Notes on pages 22 to 48 form an integral part of these financial statements. Independent Auditor s report on page 17.

25 21 ON ALLY HOLDINGS PLC STATEMENT OF CASH FLOWS (all amounts in Sri Lanka Rupees) Year ended 31 March Note Cash flows from operating activities Cash generated from operations 28 97,361,786 93,875,494 Interest received 26,793,608 15,266,727 Tax paid (14,722,111) (11,890,142) Retirement benefit obligations paid 24 (112,350) (418,400) Net cash generated from operating activities 109,320,933 96,833,679 Cash flows from investing activities Purchase of property, plant and equipment 13 (12,000) (339,120) Purchase of intangible assets 14 - (374,240) Upgrading expenses of investment property 15 - (4,322,672) Net investments in fixed deposits (58,234,834) (48,369,301) Net cash used in investing activities (58,246,834) (53,405,333) Cash flows from financing activities Dividends paid 12 (54,252,387) (51,627,272) Forfeited dividend 459,935 - Net cash used in financing activities (53,792,452) (51,627,272) Decrease in cash and cash equivalents (2,718,353) (8,198,926) Movement in cash and cash equivalents At beginning of the year 18,974,225 27,173,151 Decrease (2,718,353) (8,198,926) At end of the year 20 16,255,872 18,974,225 The Notes on pages 22 to 48 form an integral part of these financial statements. Independent Auditors report on page 17.

26 ON ALLY HOLDINGS PLC 22 NOTES TO THE FINANCIAL STATEMENTS (In the notes all amounts are shown in Sri Lanka Rupees unless otherwise stated) 1 General information The Company is a public limited liability Company which was incorporated under the Companies Ordinance No.51 of 1938 as a public limited Company on the 25th June 1982, which obtained the certificate to commence business on 25 th August The Company listed on the Colombo Stock Exchange on 25th April 1991 and re - registered as per the Companies Act, No7 of 2007 on 13th December 2007 under the new number PQ 107. The registered office of the Company is situated at Unit 603, 4th Floor, No. 02, Galle Road, Colombo 4. The principal activity of the Company is property development / real estate. 2 Summary of significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. 2.1 Basis of preparation The financial statements of the Company have been prepared in accordance with Sri Lanka Accounting Standards, which comprise Sri Lanka Financial Reporting Standards ( SLFRS s), Sri Lanka Accounting Standards ( LKAS s), relevant interpretations of the Standing Interpretations Committee ( SIC ) and International Financial Reporting Interpretations Committee ( IFRIC ). These financial statements have been prepared under the historical cost convention except for financial assets and liabilities which are measured at fair value. The preparation of financial statements in conformity with Sri Lanka Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the Company s financial statements are disclosed in note 4 to the financial statements. (a) New accounting standards, amendments and interpretations adopted in 2016 The following amendments to the Sri (i) Lanka Accounting Standards that are relevant for the preparation of the financial statements have been adopted by the Company for the first time with effect from financial year beginning on 1 April LKAS 16, Property, Plant and Equipment and LKAS 38, Intangible Assets, clarify that a revenue-based method of depreciation is generally not appropriate. LKAS 38 Intangible Assets now includes a rebuttable presumption that the amortisation of intangible assets based on revenue is inappropriate. This presumption can be overcome if either The intangible asset is expressed as a measure of revenue (ie where a measure of revenue is the limiting factor on the value that can be derived from the asset), or It can be shown that revenue and the consumption of economic benefits generated by the asset are highly correlated. (ii) LKAS 19, Employee Benefits, clarify that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important and not the country where they arise. (iii) LKAS 34, Interim Financial Reporting, clarify what is meant by the reference in the standard to information disclosed elsewhere in the interim financial report and adds a requirement to crossreference from the interim financial statements to the location of that information. (iv) LKAS 1, Presentation of Financial Statements, amendments is made in the context of the IASB s Disclosure Initiative, which explores how financial statement disclosures can be improved. LKAS 1 provide clarifications on a number of issues, including: materiality, disaggregation and subtotals, notes to the financial statements and OCI arising from investments accounted for under the equity method. According to the