DIESEL & MOTOR ENGINEERING PLC

Transcription

1 DIESEL & MOTOR ENGINEERING PLC INTERIM FINANCIAL STATEMENTS -YEAR ENDED 31ST MARCH 2017

2 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Group Unaudited Audited Unaudited Unaudited Year ended Year ended Variance 3 months to 3 months to Variance % % Rs.'000 Rs.'000 Rs.'000 Rs.'000 Revenue 44,492,990 37,749,750 18% 10,891,829 9,114,258 20% Sales taxes (221,157) (245,170) (10%) (63,866) (53,029) 20% Net revenue 44,271,833 37,504,580 18% 10,827,963 9,061,229 19% Cost of sales (36,874,214) (30,967,983) 19% (8,917,482) (7,407,199) 20% Gross profit 7,397,619 6,536,597 13% 1,910,481 1,654,030 16% Other operating income 173,403 86, % 120,025 31, % Selling and Distribution expenses (1,029,667) (1,081,710) (5%) (334,131) (384,432) (13%) Administrative expenses (4,848,990) (3,909,740) 24% (1,326,436) (1,086,004) 22% Operating profit 1,692,365 1,631,288 4% 369, ,787 72% Finance income 207, ,079 (5%) 58,492 86,799 (33%) Finance costs (856,183) (470,308) 82% (238,039) (130,278) 83% Net finance Costs (648,973) (251,229) 158% (179,547) (43,479) 313% Profit before tax 1,043,392 1,380,059 (24%) 190, ,308 11% Income tax (expense)/reversal (386,601) (433,453) (11%) (164,574) 35, % Profit for the period 656, ,606 (31%) 25, ,370 (87%) Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit obligation (40,795) (24,719) 65% (40,795) (24,719) 65% Deferred tax charge on actuarial loss 11,423 6,921 65% 11,423 6,921 65% Items that are or may be reclassified subsequently to profit or loss (29,372) (17,798) (29,372) (17,798) Net fair value gains on remeasuring financial assets-available-for-sale % (24) (272) (91%) (24) (272) Total other comprehensive income, net of tax (28,830) (17,336) 66% (29,396) (18,070) 63% Total comprehensive income for the period 627, ,270 (32%) (3,578) 188,300 (102%) Basic and diluted earnings per share (Rs.) Figures in brackets indicate deductions Page 1 of 10

3 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Company Unaudited Audited Unaudited Unaudited Year ended Year ended Variance 3 months to 3 months to Variance % % Rs.'000 Rs.'000 Rs.'000 Rs.'000 Revenue 41,563,559 35,403,232 17% 9,886,821 8,252,864 20% Sales taxes (174,697) (208,378) (16%) (46,413) (38,053) 22% Net revenue 41,388,862 35,194,854 18% 9,840,408 8,214,811 20% Cost of sales (34,802,483) (29,408,729) 18% (8,183,965) (6,844,828) 20% Gross profit 6,586,379 5,786,125 14% 1,656,443 1,369,983 21% Other operating income 269, , % 191,979 36, % Selling and Distribution expenses (941,391) (993,134) (5%) (304,679) (368,083) (17%) Administrative expenses (4,358,235) (3,530,638) 23% (1,196,714) (970,230) 23% Operating profit 1,556,391 1,365,500 14% 347,029 68, % Finance income 198, ,578 2% 50,538 78,116 (35%) Finance costs (848,378) (468,036) 81% (235,274) (132,943) 77% Net finance Costs (649,989) (273,458) 138% (184,736) (54,827) 237% Profit before tax 906,402 1,092,042 (17%) 162,293 13, % Income tax expense/(reversal) (313,370) (352,319) (11%) (123,252) 75, % Profit for the period 593, ,723 (20%) 39,041 88,711 (56%) Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of defined benefit obligation (39,213) (22,565) 74% (39,213) (22,565) 74% Deferred tax charge on actuarial loss 10,980 6,318 74% 10,980 6,318 74% Items that are or may be reclassified subsequently to profit or loss (28,233) (16,247) (28,233) (16,247) Net fair value gains on remeasuring financial assets-available-for-sale % (22) (269) (92%) (22) (269) Total other comprehensive income, net of tax (27,689) (15,781) 75% (28,255) (16,516) 71% Total comprehensive income for the period 565, ,942 (22%) 10,786 72,195 (85%) Basic and diluted earnings per share (Rs.) Figures in brackets indicate deductions Page 2 of 10

4 ASSETS STATEMENT OF FINANCIAL POSITION Group Company Unaudited Audited Unaudited Audited as at as at as at as at Rs.'000 Rs.'000 Rs.'000 Rs.'000 Property, plant and equipment 8,299,035 7,929,828 8,298,487 7,945,833 Lease rentals paid in advance 22,321 24,526 22,321 24,526 Intangible assets 24,051 19,577 24,044 19,559 Investments in subsidiaries ,289 23,350 Financial assets-available-for-sale 7,825 7,179 7,804 7,156 Deferred tax assets 4,034 1, Total non-current assets 8,357,266 7,982,821 8,375,945 8,020,424 Inventories 8,941,711 7,607,292 8,574,365 7,326,211 Trade and other receivables 4,276,799 3,877,074 3,243,893 3,092,234 Other current assets 895, , , ,502 Current tax asset 6, Amounts due from subsidiaries ,319 53,714 Cash and cash equivalents 281, , , ,243 Total current assets 14,402,152 12,349,823 12,991,579 11,232,904 TOTAL ASSETS 22,759,418 20,332,644 21,367,524 19,253,328 EQUITY AND LIABILITIES EQUITY Stated capital 425, , , ,297 Other components of equity 2,839,898 2,839,356 2,839,885 2,839,341 Revenue reserves 6,899,747 6,725,026 5,981,889 5,869,788 Total equity attributable to the equity holders of the Company 10,164,942 9,989,679 9,247,071 9,134,426 Long-term borrowings 590, , , ,030 Employee benefits 626, , , ,525 Deferred tax liabilities 247, , , ,161 Deferred income 335, , , ,313 Total non-current liabilities 1,799,759 1,944,451 1,530,237 1,716,029 Trade payables 1,681,344 1,645,819 1,563,181 1,565,629 Other current liabilities 1,302,970 1,109,719 1,091, ,637 Current portion of long term-borrowings 319, , , ,101 Current tax liability 18,286 65,010 14,990 23,004 Short-term borrowings 7,472,692 5,179,865 7,406,351 5,147,647 Amounts due to subsidiaries , ,855 Total current liabilities 10,794,717 8,398,514 10,590,216 8,402,873 TOTAL EQUITY AND LIABILITIES 22,759,418 20,332,644 21,367,524 19,253,328 It is certified that the Financial Statements have been prepared in accordance with the requirements of the Companies Act No.7 of (Sgd.) E.D.C.Kodituwakku General Manager - Finance & Controlling / Member - Group Management Committee The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board. (Sgd.) A.R.Pandithage Chairman, Managing Director 23rd May 2017 (Sgd.) B.C.S.A.P.Gooneratne Director Page 3 of 10

5 STATEMENT OF CHANGES IN EQUITY Group For the year ended 31st March 2016 Stated Capital Other Components of Equity Revaluation Reserve Available-for- Sale Reserve Revenue Reserves General Reserve Retained Earnings Total Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 As at 1st April ,297 2,833,277 5,617 4,342,290 1,631,457 9,237,938 Profit for the year , ,606 Other comprehensive income, net of tax (17,798) (17,336) Total comprehensive income , ,270 Transactions with owners of the Company - contributions and distributions Dividends to equity owners 2014/15 First and final dividend (177,529) (177,529) Transfer during the year ,000 (275,000) - Total contributions and distributions ,000 (452,529) (177,529) As at 31st March ,297 2,833,277 6,079 4,617,290 2,107,736 9,989,679 For the year ended 31st March 2017 As at 1st April ,297 2,833,277 6,079 4,617,290 2,107,736 9,989,679 Profit for the year , ,791 Other comprehensive income, net of tax (29,372) (28,830) Total comprehensive income , ,961 Transactions with owners of the Company - contributions and distributions Dividends to equity owners 2015/16 First and final dividend (239,664) (239,664) 2016/17 Interim dividend (213,034) (213,034) Transfer during the year ,000 (400,000) - Total contributions and distributions ,000 (852,698) (452,698) As at 31st March ,297 2,833,277 6,621 5,017,290 1,882,457 10,164,942 Other Components of Equity Revenue Reserves Stated Capital Revaluation Reserve Available-for- Sale Reserve General Reserve Retained Earnings Total Company For the year ended 31st March 2016 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 As at 1st April ,297 2,833,277 5,598 4,079,464 1,244,377 8,588,013 Profit for the year , ,723 Other comprehensive income, net of tax (16,247) (15,781) Total comprehensive income , ,942 Transactions with owners of the Company - contributions and distributions Dividends to equity owners 2014/15 First and final dividend (177,529) (177,529) Transfer during the year ,000 (250,000) - Total contributions and distributions ,000 (427,529) (177,529) As at 31st March ,297 2,833,277 6,064 4,329,464 1,540,324 9,134,426 For the year ended 31st March 2017 As at 1st April ,297 2,833,277 6,064 4,329,464 1,540,324 9,134,426 Profit for the year , ,032 Other comprehensive income, net of tax (28,233) (27,689) Total comprehensive income , ,343 Transactions with owners of the Company - contributions and distributions Dividends to equity owners 2015/16 First and final dividend (239,664) (239,664) 2016/17 Interim dividend (213,034) (213,034) Transfer during the year ,000 (300,000) - Total contributions and distributions ,000 (752,698) (452,698) As at 31st March ,297 2,833,277 6,608 4,629,464 1,352,425 9,247,071 Figures in brackets indicate deductions. Page 4 of 10

6 Cash flows from operating activities Group Company Unaudited Audited Unaudited Audited as at as at as at as at Rs.'000 Rs.'000 Rs.'000 Rs.'000 Profit before taxation 1,043,392 1,380, ,402 1,092,042 Adjustments for: Depreciation on property, plant and equipment 326, , , ,150 Amortisation of intangible assets and lease rentals 17,625 16,783 17,614 16,190 Amortisation of deferred income (18,860) 181,512 (49,694) 34,729 Provision for impairment of investments in subsidiaries Gain on sale of property, plant and equipment (17,302) (16,225) (17,901) (17,572) Derecognition of capital work-in-progress 389 3, ,132 Interest expenses 856, , , ,036 Interest income (13,536) (23,496) (12,397) (21,060) Dividend income (298) (298) (88,545) (11,368) Foreign currency loan translation variance - 22,542-22,542 Provision for impairment of trade receivables 77, ,012 50, ,552 Provision for slow moving inventories 143,855 6, ,333 16,423 Provision for employee benefit obligation excluding actuarial loss 97,439 78,492 88,755 71,859 Changes in working capital 2,512,704 2,637,901 2,204,659 2,167,655 Increase in inventories (1,478,274) (2,834,932) (1,388,487) (2,746,534) (Increase)/decrease in trade and other receivables (477,188) 24,640 (202,478) 164,018 (Increase)/decrease in other current assets (206,133) 114,831 (227,944) 143,212 Increase in amounts due from subsidiaries - - (25,605) (34,763) Increase/(decrease) in trade payables 35,525 (335,363) (2,448) (316,759) Increase in other current liabilities 192, , , ,845 Increase/(decrease) in amounts due to subsidiaries - - (187,706) 286,734 Cash generated from/(used in) operating activities 579,408 (59,670) 374,997 (124,592) Interest paid (856,412) (453,594) (848,607) (451,322) Employee benefits paid (12,581) (18,353) (12,581) (16,563) Income tax paid (365,173) (305,199) (244,959) (262,395) Net cash from /(used in) operating activities (654,758) (836,816) (731,150) (854,872) Cash flows from investing activities Net proceeds from sale of property, plant and equipment 46,921 37,156 46,715 37,001 Dividends received ,441 11,368 Interest received 13,536 23,496 12,397 21,060 Acquisition and construction of property, plant and equipment and capital work-in-progress (724,381) (284,079) (701,114) (268,639) Acquisition of intangible assets (21,082) - (21,082) - Net cash used in investing activities (684,812) (223,129) (574,643) (199,210) Cash flow from financing activities STATEMENT OF CASH FLOWS Proceeds from long-term borrowings - 800, ,000 Repayment of long-term borrowings (394,900) (1,117,662) (394,900) (1,117,662) Dividends paid (452,698) (177,529) (452,698) (177,529) Net cash used in financing activities (847,598) (495,191) (847,598) (495,191) Net decrease in cash and cash equivalents (2,187,168) (1,555,136) (2,153,391) (1,549,273) Cash and cash equivalents as at 1st April (5,003,725) (3,448,589) (4,983,404) (3,434,131) Cash and cash equivalents as at 31st March (Note-A ) (7,190,893) (5,003,725) (7,136,795) (4,983,404) Note-A Analysis of Cash and Cash Equivalents as at 31st March Cash and bank balances 281, , , ,243 Short-term borrowings (7,472,692) (5,179,865) (7,406,351) (5,147,647) Cash and cash equivalents (7,190,893) (5,003,725) (7,136,795) (4,983,404) Page 5 of 10

7 NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Corporate information (the Company) is a public limited liability Company listed on the Colombo Stock Exchange, incorporated and domiciled in Sri Lanka. The Company and its subsidiaries have the registered office at No. 65, Jetawana Road, Colombo 14. The ordinary shares of the Company are being listed in the Colombo Stock Exchange. 2. Basis of preparation The interim condensed financial statements have been prepared in accordance with Sri Lanka Accounting Standard - LKAS 34 Interim Financial Reporting. These interim condensed financial statements should be read in conjunction with the annual financial statements for the year ended 31st March These financial statements provide the information as required in terms of Rule 7.4 of the Colombo Stock Exchange. 3. Operating Segment Information The operating business segments are organised and managed separately according to the nature of the products and services provided. The primary segment reporting format is determined based on products and services offered as the Group's risk and returns are affected predominantly by differences in the products and services offered. 4. Other information 4.1 Contingent liabilities The Contingent Liabilities as at 31st March 2017, on guarantees given by the Company in respect of bid bonds, performance bonds and advance payments amounted to Rs 1,326.3 mn. (Rs mn as at 31st March 2016). 4.2 Income tax assessments Assessments were received in July 2012, December 2013 and July 2015 respectively based on normal tax rates. Appeals were lodged against the taxes assessed by the Department of Inland Revenue and the status of each of the appeals are as follows. 2009/ The appeal was determined in favour of the Commissioner General of Inland Revenue by the Tax Appeals Commission, and a case stated has been filed with the Court of Appeal by an application made by the company. 2010/ An appeal made by the Company is currently with the Tax Appeals Commission. 2012/ An appeal has been lodged with the Department of Inland Revenue within the stipulated time period for the assessment raised. Having discussed with the independent legal and tax expert and based on information available, the contingent liability as at 31st March 2017 is estimated to be Rs mn (2016 Rs mn as at 31st March 2016). 4.3 Capital expenditure commitments Capital expenditure contracted by the Company for which a provision has not been made in the Financial Statements amounted to approximately Rs mn.( 2015/16 Rs. 1,004.3 mn) 4.4 Comparative Information Where necessary comparative figures have been reclassified to conform with the current year's presentation. 4.5 Events Occurring after the reporting period There were no material events that occurred after the reporting date that require adjustments or disclosure to the Financial Statements. Page 6 of 10

8 NOTES TO THE FINANCIAL STATEMENTS OPERATING SEGMENT INFORMATION The Group comprises of the following main business segments. Segment Vehicles Sales Vehicles After Services Marketing and Distribution Product & Services Sale of Brand new Passenger Vehicles, Commercial Vehicles, Agri Machinery, Special Purpose Vehicles and Pre-owned Passenger Vehicles. Repair and service of Vehicle included in the Vehicles - Sale Segment, Sale of Franchised Vehicle Spare Parts, Accessories and Components. Sale and services of Power Tools and Accessories, Lamps, Batteries, Lighting Controls, Switchgear, Fittings and Accessories, Tyres, Original Equipment Spare Parts and Auto Components. Construction & Material Handling Equipment Electro-Mechanical, Bio-Medical and Marine Engineering Sales and Services of Earth Moving Machinery, Road Construction Machinery, Material Handling Machinery, Forklifts, Storage Systems, Dock Levellers, Car Parking Systems and Gondolas. Sale, Installation, Commissioning and Maintenance of Medical Equipment, Generating Sets, Diesel Engines for Marine Propulsion and Rail Traction, Building Management Systems, Fluid Management Systems, Industrial Refrigeration Systems and Power Engineering Equipment and Systems. For the year ended 31st March Vehicles Sales Vehicles After Services Marketing and Distribution Construction & Material Handling Equipment Electro-Mechanical, Bio Medical and Marine Engineering Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 TOTAL Business Segment Turnover & Results Total segment revenue 31,528,735 27,323,634 4,469,690 3,699,413 4,440,746 3,934,088 2,666,122 1,602,575 2,750,667 2,188,449 45,855,960 38,748,159 Inter-segment revenue (118,844) (40,754) (1,002,417) (819,969) (126,259) (73,286) (85,285) (43,689) (30,165) (20,711) (1,362,970) (998,409) Total external revenue 31,409,891 27,282,880 3,467,273 2,879,444 4,314,487 3,860,802 2,580,837 1,558,886 2,720,502 2,167,738 44,492,990 37,749,750 Segment results 1,944,224 1,946, , , , , , , , ,605 3,245,130 3,144,490 Unalocated other income ,403 86,141 Unallocated expenses (1,726,168) (1,599,343) Finance costs - net (648,973) (251,229) Income tax expense (386,601) (433,453) Profit for the period , ,606 Business Segment Assets & Liabilities Segment assets 7,291,220 6,280,762 1,871,498 1,654,312 2,317,840 2,466,779 1,419,580 1,132,248 1,913,840 1,644,984 14,813,978 13,179,085 Unallocated assets 7,945,440 7,153,559 Total assets 22,759,418 20,332,644 Segment liabilities 5,137,551 2,641, , , , , , , , ,318 6,998,333 4,273,300 Unallocated liabilities 5,596,143 6,069,665 Equity 10,164,942 9,989,679 Total equity and liabilities 22,759,418 20,332,644 Other Information Capital expenditure 81,263 27,792 94,312 63,364 18,189 10,320 6,295 4,487 15,535 15, , ,539 Unallocated capital expenditure , ,540 Depreciation and amortisation 29,487 25, ,265 97,039 10,309 12,762 5,547 5,412 9,555 8, , ,727 Unallocated depreciation and amortisation , ,977 Page 7 of 10

9 INVESTOR INFORMATION Market Value of Shares The market value of an ordinary share of is as follows: Quarter to Quarter to 31-Mar Mar-16 Rs. Rs. Highest Price per Share January 24, January 07,2016 Lowest Price per Share March 28, March 09,2016 Last Traded Price per Share March 31, March 31,2016 Market Capitalisation as at 31-Mar-17 as at 31-Mar-16 Market Capitalisation (Rs.'000) 4,969,917 4,879,377 Ratios Group Company 31-Mar Mar Mar Mar-16 E.P.S. Rs* Net asset value per share* 1, , , , Quick asset ratio Interest cover (times) * Earnings & net assets per share are based on 8,876,437 shares in issue as at 31st March The stated capital consists of 8,876,437 Ordinary shares. Page 8 of 10

10 Statement of share holding of Directors (Including Spouses) 31ST MARCH' 2017 NAME SHARES % MR A R PANDITHAGE 1,929, % MR A N ALGAMA 213, % MR S C ALGAMA 574, % MR A G PANDITHAGE 570, % MR A M PANDITHAGE 224, % MR M V BANDARA 1, % 3,515, % Dr.H.Cabral, Mr.B.C.S.A.P Gooneratne, Mr.P.K.W.Mahendra, Mr.S.R.W.M.C.Ranawana, Mr.R.Seevaratnam, Mr.A.D.B.Talwatte & Mr.R.C.Weerawardane who are Directors of the Company did not hold any shares of the Company as at 31st March Mar Mar-16 PUBLIC HOLDING % 46.54% 46.57% No of Public Shareholders 1,813 1,753 Twenty Major Shareholders 31ST MARCH' 2017 NAME SHARES % EMPLOYEES PROVIDENT FUND 1,765, % MR. A R PANDITHAGE 991, % MRS. J C PANDITHAGE 938, % A & G INVESTMENTS PVT LIMITED 630, % MR. S C ALGAMA 567, % MR. A G PANDITHAGE 525, % ALMAR TRADING CO (PVT) LTD 310, % MR. A N ALGAMA 213, % MR. T G H PERIES 193, % MR. A M PANDITHAGE 182, % DR D.JAYANNTHA 160, % MISS T.R.N.C PERIES 148, % MR. L P ALGAMA 134, % DEUTSCHE BANK AG AS TRUTEE FOR JB VANTAGE VALUE FUND 123, % ESTATE OF THE LATE N.U. ALGAMA 118, % UNITED MOTORS LANKA PLC 109, % THE TRUSTEE, BANK OF CEYLON ACCOUNT NO 1 77, % PAN ASIA BANKING CORPORATION/ALMAR INTERNATIONAL (PVT) LTD 62, % MRS. I S SALGADO 46, % MRS. H S PANDITHAGE 45, % 7,346, % Page 9 of 10

11 CORPORATE INFORMATION Name of the Company. Legal Form A Quoted Public Company with Limited Liability, incorporated in Sri Lanka in Company Registration Number PQ 146 Board of Directors Group Management Committee A. R. Pandithage (Chairman) A. G. Pandithage S. C. Algama M.V. Bandara B. C. S. A. P. Gooneratne R. K. J. Gunasekera E. D. C. Kodituwakku D.N.K.Kurukulasuriya P. K. W. Mahendra A. R. Pandithage - Dipl. Ing (Chairman, Managing Director) N.Mudannayake A. G. Pandithage - FCMA (Chief Executive Officer) C. R. Pandithage A. N. Algama S.R.W.M.C.Ranawana S. C. Algama - FIED (SL) R. C. Weerawardane M.V. Bandara - Postgraduate Certificate (USQ-Aus) Dr. H. Cabral- PC, PhD Bankers B. C. S. A. P. Gooneratne - FCA, MBA (Sri.J) Bank of Ceylon P. K. W. Mahendra - B.Eng (University of Greenwich-UK) Commercial Bank of Ceylon PLC A. M. Pandithage DFCC Vardhana Bank S. R. W. M. C. Ranawana - MBA (Warnborough University-UK) Hatton National Bank PLC R. Seevaratnam- FCA, B.Sc (Lon), FCA (E&W) Hong Kong & Shanghai Banking Corporation Ltd. A. D. B. Talwatte - FCMA, FCA, MBA (Sri.J) Nations Trust Bank PLC R. C. Weerawardane NDB Bank PLC People's Bank Company Secretary Sampath Bank PLC B. C. S. A. P. Gooneratne - FCA, MBA(Sri.J) Auditors Registrars KPMG Jacey and Company Chartered Accountants, NO.9/5, Thambiah Avenue, P.O. Box 186, off Independence Avenue, No.32A, Sir Mohamed Macan Markar Mawatha, Colombo 07, Sri Lanka Colombo 03, Sri Lanka Audit Committee Lawyers A. D. B. Talwatte (Chairman) Julius & Creasy R. Seevaratnam Attorneys-at-law & Notaries Public Dr. H. Cabral P.O.Box 154, A. M. Pandithage No 41, Janadhipathi Mawatha Colombo 01, Sri Lanka Remuneration Committee Dr. H. Cabral (Chairman) Registered Office A. M. Pandithage P.O. Box 339, No. 65, Jetawana Road, Colombo 14, R. Seevaratnam Sri Lanka A. D. B. Talwatte Telephone: , Facsimile: Nomination Committee http: // Dr. H. Cabral (Chairman) dimo@dimolanka.com A. R. Pandithage A. M. Pandithage R. Seevaratnam A. D. B. Talwatte Related Party Transactions Review Committee R. Seevaratnam (Chairman) Dr. H. Cabral A. M. Pandithage A. D. B. Talwatte Page 10 of 10