Annual Report - 2020 CD - gestetnersl.com

ANNUAL REPORT

19/20

G E S T E T N E R O F C E Y L O N P L C P A G E

02

2019/2020 2018/2019

Results for the year (Rs.Mn)

Group revenue 1,035 909

Pro�t from operations 15 64

Pro�t / (Loss) before tax (13) 56 As at 31st March

Total Assets (Rs Mn) 740 558

Total Liabilities (Rs Mn) 429 245

Current Ratio (times) 1.16 1.91

Per share (Rs.)

Earnings Per share (1.75) 16.14

Dividend per share - 1.25

Net asset value per share as at 31st March 116.83 117.82

Market price per share as at 31st March 91.00 88.00

GROUP HIGHLIGHTS

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CHAIRMAN’SREVIEW

I have pleasure, on behalf of the Board of

Directors, to present you the Annual Report and

Accounts of Gestetner of Ceylon PLC for the year

ended 31st March 2020.

An Overview

The Group’s turnover for the year under review

was Rs. 1,035 million. However, the Group had a

loss of Rs.4.6 million due to increase in other

operating expenses, early stage of operations in

new subsidiary, Fintek Managed Solutions (Pvt)

Ltd as well as the impacts of Covid 19 including

the virtual close down of operations in March

2020 and the impairment adjustments that

were based on the impacted performances over

the post year-end periods.

Dividends

The Directors are not proposing the payment of

any dividends for the year under review.

Conclusion

My sincere thanks are due to the other Directors

for support and assistance and to all the

employees at all levels for their dedicated and

committed service. I also wish to express my

appreciation for the continued support from

our shareholders, overseas principals, bankers,

suppliers and other stakeholders.

S J M Anzsar FCA Chairman

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L R WATAWALANon - Executive Director

S J M ANZSARChairman / Non - Executive Director

Mr. S J M Anzsar was appointed to the Board of Gestetner of Ceylon PLC on 7th January 1997 and as the Chairman on 12th December 1997.

He is a Chartered Accountant with a career span of over thirty-�ve years that included Partnership at an international professional �rm; senior management roles at a UK based conglomerate specializing in Africa. Since the mid nineties he has been engaged in the private equity sector focusing in Africa and Sri Lanka.

Prof. L R Watawala was appointed to the Board of Gestetner of Ceylon PLC on 07th November 1996.

Prof. Watawala is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka (FCA), Fellow of the Institute of Certi�ed Management Accountants of Sri Lanka (FCMA), Fellow of the Chartered Institute of Management Accountants of UK (FCMA UK), Chartered Global Management Accountant (CGMA) and Fellow of the Institute of Chartered Professional Managers of Sri Lanka (FCPM).

He served his articles and as a Quali�ed Assistant at Turquand Youngs & Co.(Ernst & Young), Chairman and Managing Director of the Ceylon Leather Products Corporation, Chairman and Managing Director of the State Mining & Mineral Development Corporation, Chairman of the People’s Bank, Chairman of the People's Merchant Bank, Chairman and Director General of the Board of Investment of Sri Lanka (1991-1993) and (2005-2007), Advisor to the Ministry of Finance, Chairman of Pan Asia Bank Ltd, Director South Asia Informatics Computer Institute Ltd (Singapore), Director Richard Peiris PLC, Abans Electricals PLC and Chairman of the National Insurance Trust Fund.

He currently serves on the Company Directorates of, Lanka IOC PLC, Lake House Printers & Publishers PLC and Sri Lanka Technological Campus (SLTC).

He is the President of the Institute of Certi�ed Management Accountants of Sri Lanka (CMA), President Institute of Chartered Professional Managers of Sri Lanka (CPM), Past President of the Association of Management Development Institutes of South Asia (AMDISA), Past President of the Institute of Chartered Accountants of Sri Lanka and South Asian Federation of Accountants (SAFA), Founder President of the Association of Accounting Technicians of Sri Lanka (AAT) and Past President of the Organization of Professionals Association of Sri Lanka (OPA).

He was installed in the Hall of Fame of the Institute of Chartered Accountants of Sri Lanka.

BOARD OF DIRECTORS

Mr. D M R Phillips, President’s Counsel, was appointed to the Board of Gestetner of Ceylon PLC on 07th November 1996.

He is a Attorney-At-Law and a Solicitor (England & Wales) and holds a Diploma in Intellectual Property (University of London- Queen Mary & West Field College). He currently serves as the Chairman of Intellectual Property Advisory Board and presently serves on the company Directorates of NDB Bank PLC.

D M R PHILLIPSNon - Executive Director

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S A J GOONETILLEKENon - Executive Director

Ms. S A J Goonetilleke was appointed to the Board of Gestetner of Ceylon PLC on 01st October 1997.

Ms. Goonetilleke is a Fellow Member of Chartered Accountants of Sri Lanka, Fellow Member of Chartered Institute of Management Accountants (UK) and holds a MBA from Postgraduate Institute of Management - Sri Jayewardenapura.

She started her career at Ernst & Young and then served in several companies such as Chemanex Ltd, GTE Directories (Pvt) Ltd and presently serves as a Director in Reditune Ceylon (Pvt) Ltd.

B C U PERERANon - Executive Director

Mr. B C U Perera was appointed to the Board of Gestetner of Ceylon PLC on 01st January 2014.

Mr. B C U Perera has over twenty-�ve years of commercial experience in senior management capacity. He Joined the John Keells Group in 1992 seconded to John Keells O�ce Automation (Pvt) Limited and held the positions of Sales & Marketing Manager, Director Sales & Marketing, Director / General Manager and became the CEO / Vice President – John Keells Holdings in the year 2000.

In 2010 he moved from IT to take up a challenging career in the F & B Sector within the same group. Mr. B C U Perera was in-charge of the beverage business where he held the position of Vice President John Keells Holdings / Head of Beverages until he resigned John Keels Group in December 2013. Ceylon Cold Stores a public quoted company which had operated for over one hundred forty years. After joining Gestetner of Ceylon PLC as its Managing Director in January 2014 he served until 5th January 2019 and stepped down from an operational role to continue serving the board as a non-executive Director.

M HAMZA Executive Director / Group Chief Executive

Mr. Muhammed Hamza was appointed to the Board of Gestetner of Ceylon PLC on 9th August 2018. He was appointed as the Group Chief Executive of Gestetner of Ceylon PLC with e�ect from 2nd September 2020.

Mr. Hamza hold a Bachelor of Commerce Degree (B.Com) from University of Peradeniya, Sri Lanka and MBA with a Major in Marketing from the American University, Washington DC. He joined Nestle Lanka as a Management Trainee in 1983 and was with the group till July 2013. During his career spanning 30 years with Nestle, he had held senior Marketing, Sales and General Management positions within Nestle, across Sri Lanka, India, Pakistan and Indonesia.

He Worked as the CEO/Director for Ceylon Pencil Co Ltd (ATLAS) from 2013 to 2018, the market leader for school and o�ce stationery products in Sri Lanka. He has been a Non-Executive Independent Director at Ceylon Cold Stores (Including the JKH Supermarkets) and a member of the Audit Committee from 2015. From July 2018 he has been appointed the Chairman of the Sri Lanka Handicrafts Board.- LAKSALA.

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KEKI WADIA Non - Executive Director

Keki Wadia (commonly known as Kris Wadia) was appointed as a Non-Executive Director with e�ect from 13th August 2019.

Kris has held senior executive roles with Pearson plc in Hong Kong, OCBC Bank in Singapore and global roles with Accenture, the world’s leading technology consultancy and Quintiles, the world’s largest clinical trials outsourcer.

Kris currently serves as a Senior Advisor to CEOs and Boards in Financial Services, BioPharma and Cyber Security. He has lived in 8 countries and travelled to over 70 countries, building a proven track record of successful launches, rapid growth, and transformation of businesses at scale globally.

As an Entrepreneur, he has orchestrated the turnaround of loss-making, mid-size businesses by leveraging his academic training as a UK Chartered Certi�ed Accountant (FCCA).

He is a regular keynote speaker at global conferences on subjects ranging from Leadership, In�uencing Skills, Process Optimization and Technology Innovation.

Kris has been quoted in Bloomberg Businessweek, the Financial Times, CNN, and life sciences journals as a thought leader. He has authored �ve books on technology, marketing and �nance, and is writing his sixth on ‘Humanized Leadership in Virtualized World’ speci�cally for managers in emerging economies.

A R RASIAH Alternate Director to S J M Anzsar

Mr. A R Rasiah was appointed as an alternate Director to Chairman, Mr. S J M Anzsar of Gestetner of Ceylon PLC e�ective from 13th August 2019.

Mr. Rasiah is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka with an illustrious career span of over thirty �ve years. He holds a Bachelor of Science Degree from University of Ceylon.

He started his career with Ernst and Young and later on served Mercantile Group of Companies and Almulla Group of Companies respectively. Finally, he joined Nestle Lanka PLC as Director Finance in 1994 and was with the Group till his retirement 2005. He was the Chairman of Atlas Axillia (Pvt) Ltd till 2017.

At present Mr. Rasiah functions as the Chairman of the Hela Clothing (Pvt) Ltd and Chairman of the Sri Lanka Institute of Directors. He is also a Non Executive Director of EB Creasy Group of Companies, Marawila, Sigiriya and Beruwala Hotels Ltd, Fintek Managed Solutions (Pvt) Ltd, Clindata Lanka (Pvt) Ltd and Sunshine Tea Co (Pvt) Ltd.

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CORPORATE GOVERNANCE

The policy of the Company is to manage its

a�airs in accordance with appropriate

standards for good Corporate Governance.

Implementation of policy and strategy is done

in 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.

The Company currently complies with the

requirements set out in the Code of Best

Practices for Corporate Governance issued by

the Institute of Chartered Accountants of Sri

Lanka and the Rules on Corporate Governance

contained in the Listing Rules of the Colombo

Stock Exchange.

Name Of Director 28th May, 2019 13th August, 2019 13th November, 2019 02nd January, 2020 13th February, 2020

Mr S J M Anzsar - Chairman √ - √ √ √

Mr L R Watawala - Deputy Chairman _ √ _ √ √

Mr D M R Phillips _ _ _ √ _

Ms S A J Goonetilleke √ _ _ _ _

Mr B C U Perera √ _ √ √ √

Mr S T P Kahawela (Resigned with e�ect from 31st August 2020) √ √ √ √ √

Mr M Hamza - Group Chief Executive √ √ √ _ √

Mr K M Wadia _ _ √ √ _(Appointed with e�ectfrom 13th August, 2019)

Mr A M G Gomez √ _ _ _ _(Resigned with e�ect from 29th May, 2019)

BOARD OF DIRECTORS

The Board consists of Six Non-Executive Directors including the Chairman, Mr S J M Anzsar. The other Non-Executive Directors are Messrs. L R Watawala (Deputy Chairman), Dinal Phillips, Ms S A J Goonetilleka, B C U Perera, and Keki Wadia. Mr. M Hamza who is a Director is also the Group Chief Executive. Mr A R Rasiah who is the Alternate Director to the Chairman is a Non-Executive Director.

A brief description of each of the Directors is set out from pages 04 to 06.

The Board meets regularly to take decisions e�ectively and ensure that the operations of the Group are satisfactorily carried out and special Board Meetings are also held whenever necessary. In the year under review �ve (05) meetings were held and Directors’ attendance thereat was as follows :

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Compliance with Rules on Corporate Governance contained in the Listing Rules of the Colombo Stock Exchange:

Subject Requirement Extent of Compliance

Non – Executive At least one third of the Other than Mr. M Hamza, all Directors are Directors total number of Directors Non-Executive Directors. should be Non- Executive Directors

Independent Directors One third of the Mr. Keki Wadia is a Non-Executive Non-Executive Directors Independent Director. All the other Non should be independent Executive Directors except Mr B C U

Perera should be Independent have served on the Board continuously for over nine years and, the Board having taken into consideration all relevant circumstances, is of the opinion that the said Directors are independent since all other criteria for de�ning “independence” set out in the Listing Rules of the Colombo Stock Exchange have been satis�ed.

Mr. B C U Perera who is a Non-Executive Director is not independent as he was employed by the Company during the past two years.

The Non - Executive Directors of the Company have submitted declarations pertaining to their independence/non- independence as required by Listing Rules of the Colombo Stock Exchange.

APPOINTMENTS

At each Annual General Meeting one third of the Directors for the time being, except the Group Chief Executive retire from o�ce. The Directors to retire at each Annual General Meeting are those who being subject to retirement by rotation, have been longest in o�ce since their last election. A retiring Director is eligible for re – election.

RESPONSIBILITY OF THE BOARD

The Company’s business and Group operations are managed under the supervision of the Board and include :

Providing entrepreneurial leadership to the Company.

Evaluating, reviewing and approving corporate strategy and Performance.

Approving and monitoring �nancial reporting of the Company.

Recommending the appointments and fee of the External Auditor.

Ensuring compliance with all relevant laws, regulations and codes of business practice.

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Compliance with Rules of Corporate Governance

Subject Requirement Extent of Compliance

Composition Should comprise of All Members are Non-Executive Directors, Non- Executive Directors except Mr M Hamza. Other members are not majority of whom shall be independent however the Board is of the Independent opinion that such Directors are “ independent”

having taken into consideration all the circumstances relating thereto.

Chairman One Non- Executive Director This requirement has been complied with. should be appointed as the Chairman Membership in The Chairman or one Member Two Members of the Committee are Members a recognized should be a Member of a of the Institute of Chartered Accountants ofAccounting Body recognized Accounting Body Sri Lanka.

FINANCIAL REPORTING

The Company makes available all the �nancial reports to shareholders in a timely manner, providing information as per the Colombo Stock Exchange requirements and prepares the Financial Statements as per Sri Lanka Accounting Standards (LKASs/SLFRSs) and guidelines issued by the Sri Lanka Institute of Chartered Accountants.

Adequate internal control systems are in place to ensure compliance with regulatory requirements.

BOARD AUDIT COMMITTEE

The Board Audit Committee consists of one Executive Director who is Mr M Hamza and two Non - Executive Directors, namely Prof L R Watawala (Chairman) and Ms S A J Goonetilleke.

Mr A M G Gomez ceased to be a member of the Board Audit Committee pursuant his resignation

as a Director of the company with e�ect from 29th May 2019 and he was replaced by Mr. M Hamza.

The Committee examines any matters relating to the �nancial a�airs of the Company, compliance with accounting standards and laws as well as internal control policies and procedures. The Committee is also responsible for the consideration and appointment of External Auditor, the maintenance of a professional relationship with them and reviewing Accounting Principles, Policies and Practices adopted in the preparation of public �nancial information.

The Audit Committee held two (02) meetings during the �nancial year ended 31st March 2020. The detailed Report of the Audit Committee is given on page 11 of the Annual Report.

G E S T E T N E R O F C E Y L O N P L C

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P A G E

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NAME OF THE DIRECTOR CATEGORY 28TH MAY 2019

L R Watawala (Chairman) Deputy Chairman √

S A J Goonetilleke Director √

A M G Gomez Director √

M Hamza Director Not Applicable as he was appointed on 29th May 2019

Compliance with Rule of Corporate Governance

SUBJECT REQUIREMENT EXTENT OF COMPLIANCE

Composition Should comprise of All Members are Non-Executive Directors, except Non- Executive Directors Mr M Hamza. Other members are not independent majority of whom shall be however the Board is of the opinion that such Independent. Directors are “ independent” having taken into

consideration all the circumstances relating thereto.

RREMUNERATION COMMITTEE

The Committee is headed by Prof L R Watawala and the other members are Ms S A J Goonetilleke and Mr M Hamza .

Mr A M G Gomez ceased to be a member of the Remuneration Committee pursuant his resignation as a Director of the Company with e�ect from 29th May 2019 who was replaced by Mr. M Hamza.

The Remuneration Committee reviews the performance of the Group Chief Executive and recommends appropriate remuneration bene�ts and other payments based on the remuneration policy of the Company, which has been formulated on market and industry factors and performance of the Group Chief Executive.

The Committee also approves the remuneration of the members of the Senior Management Committee on the recommendations made by the Group Chief Executive.

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

All Non-Executive Directors receive a fee for serving on the Board and serving on sub-committees. They do not receive any performance related incentive payments. The Directors’ emoluments are disclosed in note 08 on page 52.

The Committee meets as and when the need arises. The Remuneration Committee met once during the year ended 31st March 2020 and Directors’ attendance thereat was as follows :

SENIOR MANAGEMENT

Senior Management meets regularly with Departmental Heads to review progress, discuss and resolve issues concerning the operations of the Company as well as to compare performance with budget and management information that contains explanations for any variances and recommendations.

To the Shareholders of Gestetner of Ceylon PLC Report on the Audit of the Financial Statements

Opinion

We have audited the �nancial statements of Gestetner of Ceylon PLC, (“the Company”), and the consolidated �nancial statements of the Company and its Subsidiaries (“the Group”), which comprise the statement of �nancial position as at 31 March 2020, and the statement of pro�t or loss and other comprehensive income, statement of changes in equity and statement of cash �ows for the year then ended, and notes to the �nancial statements, including a summary of signi�cant accounting policies and other explanatory information set out on pages 25 to 76 of the annual report.

In our opinion, the accompanying �nancial statements give a true and fair view of the �nancial position of the Company and the Group as at 31 March 2020, and of their �nancial performance and cash �ows for the year then ended in accordance with Sri Lanka Accounting Standards.

Basis for Opinion

We conducted our audit in accordance with Sri Lanka Auditing Standards (SLAuSs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by CA Sri Lanka (Code of Ethics), and we have ful�lled our other ethical responsibilities in accordance with the

Code of Ethics. We believe that the audit evidence we have obtained is su�cient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most signi�cance in our audit of the Company �nancial statements and the consolidated �nancial statements of the current period. These matters were addressed in the context of our audit of the Company �nancial statements and the consolidated �nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

01. Impairment assessment of goodwill and investment in subsidiaries

Refer to signi�cant accounting policies in Note 3.2.5 and 3.2.7 and explanatory notes 17 and 17.1(c) of the �nancial statements.

Risk Description

On 28th May 2019, the Company acquired 100% ownership in Fintek Managed Solutions (Private) Limited (“the acquiree”) for a consideration of 100Mn and recognized goodwill on acquisition amounting to Rs. 37,977,635 in the consolidated �nancial statements. Management allocated goodwill to the respective cash-generating unit (CGU) as described in note 17.1(c) to the �nancial statements. The recoverability of the identi�ed CGU has been determined based on the value-in-use calculation.

As at 31st March 2020, the carrying amount of the investment in subsidiaries amounted to Rs. 90,260,525 and the goodwill was carried at Rs. 37,647,802. The Management performed impairment assessment for the subsidiaries with indications of impairment and determined their recoverable amounts based on value-in-use calculation.

The assessment of the existence of any indicators of impairment of the carrying amount of investment in subsidiaries is judgmental. In the event that indicators of impairment are identi�ed, the assessment of the recoverable amounts is also judgmental and requires estimation and the use of subjective assumptions.

The primary risks are identifying impairment indicators, inaccurate models being used for the impairment assessment, and that the assumptions to support the value of the investments are inappropriate. The principal consideration for our determination that the impairment assessment of goodwill and investments in subsidiaries is a key audit matter is the subjectivity in the assessment of the recoverable amounts which requires estimation and the use of assumptions.

Our Audit Procedures Included,

1. Assessing based on the market outlook, performance during the year and net assets from the audited �nancial statements of the subsidiaries, the existence of any indicators of impairment.

2. Obtaining an understanding of management’s impairment assessment process.

3. Assessing the reasonableness of cash�ow projection in calculation of the value-in -use, challenging the reasonableness of the key assumptions such as the revenue growth rate, gross pro�t margin percentage and discount rate based on our knowledge of the business and industry by comparing the assumptions to historical results and published risk free rate and comparing the subsequent period’s actual results with the forecast, and other relevant information.

4. On a sample basis, testing the accuracy and relevance of the input data to supporting evidence, such as approved budgets and considering the reasonableness of these budgets to the historic results and subsequent period actuals.

5. Performing sensitivity analysis in consideration of the potential impact of reasonably possible downside changes in these key assumptions.

6. Assessing the accuracy of the disclosures relating to investments in subsidiaries and goodwill included in notes 17 and 17.1(c) to the �nancial statements.

02. Carrying Value Of Inventories

Refer to signi�cant accounting policies in Note 3.9, and explanatory note in Note 18 of the �nancial statements.

Risk Description

The Group held inventories with an aggregate carrying value of Rs. 192,756,472 as at 31 March 2020.

Changes in economic sentiment or consumer preferences and the introduction

of newer machines with the latest design and technologies could result in inventories on hand no longer being sought after or being sold at a discount below their cost.

Estimating future demand for and the related selling prices of printing machines, air conditioners and spare parts are inherently subjective and uncertain because it involves management estimating the extent of markdown of selling prices necessary to sell the older or slow moving models in the period subsequent to the reporting date.

We identi�ed the carrying value of inventories as a key audit matter because of the exercise of signi�cant judgment by management in determining appropriate carrying value of inventories.


• Assessing whether the inventory provisions at the end of the reporting period were determined in a manner consistent with the Group’s inventory provision policy by recalculating the inventory provisions based on the percentages and other parameters in the Group’s inventory provision policy.

• Assessing, on a sample basis, whether items in the inventory ageing report were classi�ed within the appropriate ageing category by comparing individual items with the underlying goods receipt notes.

• Enquiring of management about any expected changes in plans for markdowns or disposals of slow moving or obsolete inventories and comparing their representations with actual transactions

subsequent to the reporting date and assumptions adopted in determining the inventory provisions.

• Comparing, on a sample basis, the carrying value of inventories with sales prices subsequent to the end of the reporting period.

• Inspecting documentation of management’s full inventory count conducted (which we were unable to attend due to impracticability) and performing a roll back procedure in order to ensure the existence and condition of inventories as at the reporting date.

• Carrying out an independent inventory count for a sample of items on an alternative date subsequent to easing of lockdown restrictions and performing a roll back procedure in order to ensure the existence and condition of inventories as at the reporting date.

03. Recoverability of Trade Receivables

Refer to signi�cant accounting policies in Note 3.4 and explanatory note in Note 19 of the �nancial statements.

Risk Description

The carrying value of trade receivables of the Group was Rs. 204,882,171 as at 31 March 2020.

Assessing the allowance for impairment of trade receivables requires management to make subjective judgements over both the timing of recognition and estimation of the amount required of such impairment.

We identi�ed assessing the recoverability of trade receivables as a key audit matter because of the signi�cance of trade debtors to the �nancial statements as a whole and the assessment of the recoverability of trade receivables is inherently subjective and requires signi�cant management judgement in accordance with SLFRS 09, which increases the risk of error or potential management bias.

The Group measures loss allowances using Simpli�ed Expected Credit Loss (ECL). For this purpose, the Group has established a provision matrix that is based on the historical loss experience. The Group considers reasonable and supportable information that is relevant and available without undue cost or e�ort.


• Reviewing the appropriateness of the provisioning methodology used by management in determining the impairment allowances against the requirements of SLFRS 09.

• Assessing the reasonableness of the assumptions used in the provisioning methodology by comparing them with historical data adjusted for current market conditions.

• Recomputing management’s calculation for the impairment allowance determined based on simpli�ed expected credit loss method.

• Assessing the accuracy of the disclosures and evaluating the appropriateness of the

accounting policies based on the requirements of the accounting standard.

• Assessing, on a sample basis, whether items in the debtors ageing report were classi�ed within the appropriate ageing category by comparing individual items with the underlying invoices.

• Calling for confirmations from major debtors and / or verifying subsequent settlements as an alternative procedure.

Other Information

Management is responsible for the other information. The other information comprises the information included in the annual report but does not include the �nancial statements and our auditor’s report thereon.

Our opinion on the �nancial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the �nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the �nancial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation of �nancial 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 �nancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the �nancial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s and the Group’s �nancial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the �nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SLAuSs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to in�uence the economic decisions of users taken on the basis of these �nancial statements.

As part of an audit in accordance with SLAuSs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the �nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is su�cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the e�ectiveness of the Company and the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signi�cant doubt

on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the �nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the �nancial statements, including the disclosures, and whether the �nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the �nancial information of the entities or business activities within the Group to express an opinion on the consolidated �nancial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signi�cant audit �ndings, including any signi�cant de�ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with ethical requirements in accordance with the Code of Ethics regarding independence, and to communicate with them all relationships and

other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most signi�cance in the audit of the �nancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest bene�ts of such communication.

Report on Other Legal and Regulatory Requirements

As required by section 163 (2) of the Companies Act No. 07 of 2007, we have obtained all the information and explanations that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the Company.

CA Sri Lanka membership number of the engagement partner responsible for signing this independent auditor’s report is 1798.

Chartered AccountantsColombo, Sri Lanka23rd December 2020

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The Audit Committee is responsible to the Shareholders and other stakeholders regarding the integrity of the Company’s Financial Reporting Process in accordance with Sri Lanka Accounting Standards and other legislations. The Audit Committee also ensures the Company’s internal control and procedures and compliance with legal regulatory requirements.

COMPOSITION OF AUDIT COMMITTEE

The Board Audit Committee comprises of one Executive Director and two Non Executive Directors. The Members of the Committee are Prof. L R Watawala (Chairman), Ms S A J Goonetilleke who are Non Executive Directors and Mr. M Hamza, who is an Executive Director. All Directors are individuals with extensive experience and expertise in the �elds of Finance, Corporate Management and Marketing. The quali�cations of the Directors are given from pages 04 to 06 of the Annual Report.

Mr A M G Gomez ceased to be a member of the Board Audit Committee pursuant his resignation as a Director of the Company with e�ect from 29th May 2019 who was replaced by Mr. M Hamza. MEETINGS OF THE AUDIT COMMITTEE

During the year there were two Meetings and attendance of the Members were as follows :

NAME OF THE DIRECTOR CATEGORY 28TH MAY 2019 13TH AUGUST 2019

L R Watawala (Chairman) Deputy Chairman √ √

S A J Goonetilleke Director √ -

A M G Gomez Director √ -

M Hamza Director Not Applicable √ as he was appointed on 29th May 2019

SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR

The main responsibilities of the Audit Committee.

• Reviewing and monitoring the integrity of the Financial Statements

• Reviewing the Management Letter of External Auditor and Management Response

• Reviewing the progress of management actions to resolve highlighted signi�cant internal controls issued by External Auditors

• Reviewing Interim Financial Statements for purpose of quarterly announcement of �nancial results

• Reviewing of Business Risk and Mitigation Plans

• Reviewing and monitoring compliance with Companies Act No 07 of 2007

• Reviewing and monitoring the e�ectiveness of the Internal Controls

• Reviewing and monitoring Statutory and Regulatory Compliance Processes.

EXTERNAL AUDITOR

The Audit Committee evaluates the external audit functions and establishes the independence and objectivity of the external audit functions. The Audit Committee has recommended to the Board that Messrs KPMG, Chartered Accountants, be reappointed as External Auditors of Gestetner of Ceylon PLC for the �nancial year ending 31st March 2021, subject to approval by the Shareholders at the Annual General Meeting.

L R Watawala Chairman - Audit Committee

The Group DGM-Finance, attends these meetings by invitation.

REPORT OF THE BOARD AUDIT COMMITTEE

TERMS OF REFERENCE

The terms of reference clearly de�ne the role, responsibilities and powers of the Audit Committee and ensures that the composition and the activities of the Audit Committee are in line with International Best Practices and Corporate Governance Rules applicable to listed companies.


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ANNUAL REPORT

19/20


12

The Board of Directors of Gestetner of Ceylon PLC is pleased to present the Annual Report together with the Audited Financial Statements of Gestetner of Ceylon PLC and the Audited Consolidated Financial Statements of the Group for the year ended 31st March 2020.

This report contains information required by Section 168 of the Companies Act No.07 of 2007 and other necessary information required by the Listing Rules of Colombo Stock Exchange.

PRINCIPAL ACTIVITIES OF THE GROUP The core business of the Company is the import and sale of Digital Copiers, Digital Duplicators, Laser Printers, Projectors and Laptops.

Nashua Lanka (Pvt) Limited, which is a fully owned subsidiary of the Company, imports and markets Copiers, Consumables and manages a Copy Bureau.

Gestetner Printing Services (Pvt) Limited, which is also a fully owned subsidiary of the Company is engaged in the provision of Outsourced Photocopying / Printing Services and also IT Solutions.

Fintek managed Solutions (Pvt) Limited, which is a fully owned subsidiary of the Company is engaged in Importing and selling of Digital Copiers, laser printers, Air conditioners, provision of Outsourced Photocopying and providing after sales services including services for G&D machines.

Gestetner Manufacturers (Pvt) Limited, the other fully owned subsidiary of the Company was engaged in manufacturing ink and currently it is not operating.

CHANGES TO THE NATURE OF THE BUSINESS There were no changes to the principal activities of the Company during the �nancial year ended 31st March 2020.

ANNUAL REPORT OF THE BOARD OF DIRECTORS

2019/2020 2018/2019 Rs. Rs.

Gestetner of Ceylon PLC 828,411,061 886,399,502

Subsidiaries 224,083,512 43,846,673

1,052,494,573 930,246,175

Less: Intra Group Sales (17,513,040) (20,818,919)

1,034,981,533 909,427,256

RESULTS AND APPROPRIATIONS

Gross Pro�t 337,171,189 285,584,921

Other Income 10,493,918 12,353,199

Administrative Expenses (209,047,930) (177,233,831)

Selling & Distribution Expenses (96,615,227) (54,066,456)

Impairment (Charge) / Reversal of Trade Receivables (5,345,596) 813,199

Impairment of Goodwill (329,833) -

Other Operating Expenses (21,308,068) (3,176,349)

Net Finance Cost (27,814,391) (7,995,076)

Pro�t / (Loss) Before Tax (12,795,938) 56,279,607

Income Tax Reversal / (Expense) 8,143,372 (13,393,452)

Pro�t / (Loss) for the Year (4,652,566) 42,886,155Other Comprehensive Income for the Year, net of Tax 5,343,773 (1,859,249)

Accumulated Pro�t B/F 216,189,721 175,162,815

Dividend Paid (3,322,265) -

Pro�t Available for Appropriation 213,558,663 216,189,721

Earnings Per Share (1.75) 16.14

FINANCIAL STATEMENTSThe Financial Statements of the Group and the Company are set out from pages 25 to 76 of the Annual Report.

DIRECTORATE The Board of Directors of the Company as at date is set out in “ Corporate Information”. The Directors of the Company who held o�ce during the year under review and changes thereto are indicated below.

TURNOVER ANALYSIS The turnover of the Group for the year Rs.1,034,981,533/- (2018/19 - Rs. 909,427,256/-) analyzed among the group is as follows.


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19/20


13

In terms of Article 85 of the Articles of Association Messrs

Seyed Jemaldeen Muhammed Anzsar and Dinal Mario Rex

Phillips retire by rotation and being eligible are

recommended by the Board for re-election.

Mr Lakshman Ravendra Watawala who is 72 years of age ,

vacates his o�ce in terms of the provisions of Section 210

of the Companies Act, No. 7 of 2007.

Notice is given by the Company to its Shareholders of the

intention to move an Ordinary Resolution for the

re-appointment of Mr Watawala as a Director of the

Company, in terms of the provisions of Section 211 of the

Companies Act, No. 7 of 2007 and is referred to in the

Notice convening the Annual General Meeting.

Mr Albert Rasakantha Rasiah, Alternate Director to Mr S J M

Anzsar, Chairman, who is 74 years, vacates his o�ce in

terms of the provisions of Section 210 of the Companies

Act, No. 7 of 2007.

Seyed Jemaldeen Muhammed Anzsar Chairman

Lakshman Ravendra Watawala Deputy Chairman

Muhammed Hamza Muhammed Appointed as Group Chief Executive On 02nd September, 2020

Sita Anne Juliana Goonetilleke

Dinal Mario Rex Phillips

Bulathsinghalage Chandima Upul Perera

Shivantha Tissa Perera Kahawela Resigned as Director and Chief Operating O�cer with e�ect from 31st August, 2020

Keki Wadia Appointed with e�ect from 13th August, 2019

Albert Rasakantha Rasiah Appointed as Alternate Director to SJM Anzsar with e�ect from 13th August, 2019

Notice is given by the Company to its

Shareholders of the intention to move an

Ordinary Resolution for the

re-appointment of Mr Rasiah as a

Director of the Company, in terms of the

provisions of Section 211 of the

Companies Act, No. 7 of 2007 and is

referred to in the Notice convening the

Annual General Meeting.

The quali�cations and experience of the

Directors are given from pages 04 to 06

of the Annual Report.

DIRECTORS’ INTEREST IN CONTRACTS

The Company maintains an Interest

Register in compliance with the

requirements of the Companies Act No 7

of 2007. Directors’ Interest in Contracts

are disclosed under related party

transactions in Note 32 to the Financial

Statements.

DIRECTORS’ SHAREHOLDINGS

Shareholdings of Directors of the

Company are as follows,

Name of the As at As at Directors 31.03.2020 31.03.2019

Mr S J M Anzsar 66,070 66,070

Prof L R Watawala 262 1,892

Mr D M R Phillips 326,005 326,005

Ms S A J Goonetilleke 179,139 179,139

Mr B C U Perera 246,501 276,325

Mr M Hamza Nil Nil

Mr K Wadia Nil Nil

Mr A R Rasiah 35,385 35,385


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ANNUAL REPORT

19/20


14

The public shareholding of the Company is 564,255 shares which amounts to 21.23% of the issued capital and the number of public shareholders of the company is 660 as at 31st March 2020.

The applicable option under CSE Rule 7.13.1 on minimum public holding is option 5 and the Float Adjusted Market Capitalization as of 31.03.2020 is Rs.51,347,067/-.

BOARD SUB - COMMITTEES The following Board Sub-Committees have been established by the Company :

Audit Committee Remuneration Related Party Transactions Committee Review Committee

Prof L R Watawala Prof L R Watawala Prof L R WatawalaChairman Chairman Chairman

Ms S A J Ms S A J Ms S A JGoonetilleke Goonetilleke Goonetilleke

Mr M Hamza Mr M Hamza Mr M Hamza

Mr A M G Gomez ceased to be a member of Board Sub Committees pursuant his resignation as a Director of the Company with e�ect from 29th May 2019. Mr M Hamza was appointed as a member of Board Sub Committees on 29th May 2019.

DIRECTORS’ FEE AND EMOLUMENTS Directors’ Fee and Emoluments paid during the �nancial year ended 31st March 2020 amounted to Rs. 7,773,350/-

TWENTY MAJOR SHAREHOLDERS The total shareholder base of the company as at 31st March 2020 is 660 and the twenty (20) Major Shareholders of the Company as at the said date are indicated below:

No. of % Shares

1 Gestetner (Eastern) Ltd 1,240,195 46.66%

2 Mr. D. M. R. Phillips 326,005 12.27%

3 Mr. B. C. U. Perera 246,501 9.27%

4 Mrs. C. S. De Fonseka 211,151 7.94%

5 Mrs. S. A. J. De Fonseka 179,139 6.74%

(Ms. S. A. J. Goonetilleke)

6 Mr. S. J. M. Anzsar 58,195 2.19%

7 Mr. A. R. Rasiah 35,385 1.33%

8 Dr. H. S. D. Soysa 20,177 0.76%

9 Mr. M. N. Mohideen 18,378 0.69%

10 Miss. D. Sivaprakasapillai 17,500 0.66%

11 Mr. J. N. Phillips 16,199 0.61%

12 Mr. M. A. T. Raaymakers 12,552 0.47%

13 Est. of Mr A.A.N de Fonseka 12,100 0.46%

14 Mr. A. Sithampalam 10,989 0.41%

15 Mr. R.V. D. Piyathilake 10,527 0.40%

16 Merchant Bank of Sri Lanka &

Finance PLC 9,400 0.35%

17 Mr. S. J. M. Anzsar 7,875 0.30%

18 Mr. P. L. S. Ariyananda 7,405 0.28%

19 Mrs. E. R. Wikramanayake 6,750 0.25%

20 Mr. K. S. D. Senaweera 6,050 0.23%

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Directors are responsible for preparing and presenting the Financial Statements as set out on page 16. The Financial Statements have been prepared in conformity with the Sri Lanka Accounting Standards as laid down by the Institute of Chartered Accountants of Sri Lanka, Companies Act No. 7 of 2007 and the Listing Rules of the Colombo Stock Exchange.

ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the Financial Statements are given on pages 30 to 50 and these accounting policies have been consistently applied to all the years presented in these Financial Statements.

Except for the changes set out in Note 3.1 of Notes to the Financial Statements, there were no changes in the accounting policies adopted by the Company during the year under review.

PROPERTY, PLANT AND EQUIPMENT

Details of the movement in the Property, Plant and Equipment of the Group and the Company are given in Notes 12 and 13 to the Financial Statements. The carrying value of Property, Plant and Equipment does not signi�cantly di�er from market value.

STATED CAPITAL

Three hundred & seventy nine thousand six hundred & eighty seven (379,687) Shares were Issued by way of a Right Issue on 24th April 2015 in the Proportion of One (1) Share for every Six (6) Shares held.

The current stated capital of the Company is Rs. 91,965,565/- comprising of 2,657,812 Ordinary Shares.

PROVISION FOR TAXATION

Provision for Taxation has been computed at the rates given in Note 9 to the Financial Statements.

STATUTORY PAYMENTS

The Directors to the best of their knowledge and belief are satis�ed that all statutory payments in relation to the Government and the Employees have been made to date.


A description of the Company’s Corporate Governance practices is set out from pages 7 to 10.

RELATED PARTY TRANSACTIONS

The Company’s transactions with Related parties, as detailed in Note 32 to the Financial Statements, have complied with Colombo Stock Exchange Listing Rule 9.3.2 and Code of Best Practices on Related Party Transactions under the Securities Exchange Commission Directive issued under Section 13 ( c ) of the Securities Exchange Commission Act as declared by the Board of Directors.

The Related party transaction review committee report is set out from pages 17 to 18.

GOING CONCERN

The Board of Directors is satis�ed that the Group has adequate resources to continue its operation in the foreseeable future. Accordingly, the Financial Statements are prepared based on the “Going Concern Concept”.

AUDITORS

The Financial Statements for the year have been audited by Messrs. KPMG, Chartered Accountants, who have expressed their willingness to continue as Auditors of the Company and a resolution proposing their reappointment as Auditors and authorizing the Directors to �x their remuneration will be submitted at the forthcoming Annual General Meeting.

Audit fee payable in respect of the Group and Company are Rs. 1,020,000/- and Rs. 590,000/- respectively. (2018/19- Rs.997,000/- (Group) and Rs.640,000/- (Company).

AUDITORS’ RELATIONSHIP WITH THE COMPANY

The Company did not have any relationship with the Auditors other than that of the Auditor, during the �nancial year ended 31st March 2020.

By Order of The Board

M Hamza A R RasiahDirector Director

Jacey & Company- SecretariesSecretary

Colombo23rd December 2020


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ANNUAL REPORT

19/20


15

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Directors are responsible for preparing and presenting the Financial Statements as set out on page 16. The Financial Statements have been prepared in conformity with the Sri Lanka Accounting Standards as laid down by the Institute of Chartered Accountants of Sri Lanka, Companies Act No. 7 of 2007 and the Listing Rules of the Colombo Stock Exchange.

ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the Financial Statements are given on pages 30 to 50 and these accounting policies have been consistently applied to all the years presented in these Financial Statements.

Except for the changes set out in Note 3.1 of Notes to the Financial Statements, there were no changes in the accounting policies adopted by the Company during the year under review.

PROPERTY, PLANT AND EQUIPMENT

Details of the movement in the Property, Plant and Equipment of the Group and the Company are given in Notes 12 and 13 to the Financial Statements. The carrying value of Property, Plant and Equipment does not signi�cantly di�er from market value.

STATED CAPITAL

Three hundred & seventy nine thousand six hundred & eighty seven (379,687) Shares were Issued by way of a Right Issue on 24th April 2015 in the Proportion of One (1) Share for every Six (6) Shares held.

The current stated capital of the Company is Rs. 91,965,565/- comprising of 2,657,812 Ordinary Shares.

PROVISION FOR TAXATION

Provision for Taxation has been computed at the rates given in Note 9 to the Financial Statements.

STATUTORY PAYMENTS

The Directors to the best of their knowledge and belief are satis�ed that all statutory payments in relation to the Government and the Employees have been made to date.


A description of the Company’s Corporate Governance practices is set out from pages 7 to 10.

RELATED PARTY TRANSACTIONS

The Company’s transactions with Related parties, as detailed in Note 32 to the Financial Statements, have complied with Colombo Stock Exchange Listing Rule 9.3.2 and Code of Best Practices on Related Party Transactions under the Securities Exchange Commission Directive issued under Section 13 ( c ) of the Securities Exchange Commission Act as declared by the Board of Directors.

The Related party transaction review committee report is set out from pages 17 to 18.

GOING CONCERN

The Board of Directors is satis�ed that the Group has adequate resources to continue its operation in the foreseeable future. Accordingly, the Financial Statements are prepared based on the “Going Concern Concept”.

AUDITORS

The Financial Statements for the year have been audited by Messrs. KPMG, Chartered Accountants, who have expressed their willingness to continue as Auditors of the Company and a resolution proposing their reappointment as Auditors and authorizing the Directors to �x their remuneration will be submitted at the forthcoming Annual General Meeting.

Audit fee payable in respect of the Group and Company are Rs. 1,020,000/- and Rs. 590,000/- respectively. (2018/19- Rs.997,000/- (Group) and Rs.640,000/- (Company).

AUDITORS’ RELATIONSHIP WITH THE COMPANY

The Company did not have any relationship with the Auditors other than that of the Auditor, during the �nancial year ended 31st March 2020.

By Order of The Board

M Hamza A R RasiahDirector Director

Jacey & Company- SecretariesSecretary

Colombo23rd December 2020


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ANNUAL REPORT

19/20


16

STATEMENT OF DIRECTORS' RESPONSIBILITIES

This Statement of Directors’ Responsibilities is to be read in conjunction with the Auditor’s Report and is made to distinguish the respective responsibilities of the Directors and of the Auditors in relation to the Financial Statements contained in this Annual Report.

The Directors of the Group are required by the Companies Act No. 07 of 2007 to prepare Financial Statements which give a true and fair view of the state of a�airs of the Company and of the Group as at the end of the �nancial year.

The Directors con�rm that the Financial Statements of the Group for the year ended 31st March 2020 presented in the Report have been prepared in accordance with the Sri Lanka Accounting Standards (SLFRs and LKASs) the Companies Act No 07 of 2007 and Listing Rules of Colombo Stock Exchange. In preparing the Financial Statements, the Directors have selected appropriate accounting policies and have applied them consistently to all periods presented in the Financial Statements, unless otherwise indicated. Reasonable and prudent judgments and estimates have been made and applicable Accounting Standards have been followed and the Financial Statements have been prepared on a going concern basis.

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

The Directors have taken all reasonable steps expected of them to safeguard the assets of the Group and to establish appropriate systems of internal controls in order to prevent, deter and detect any fraud, is appropriation or irregularities.

The Directors have also taken all reasonable steps to ensure that the Group maintain adequate and accurate accounting books of

record which re�ect the transparency of transactions and provide an accurate disclosure of the Group’s �nancial position.

The Directors are required to provide the auditors with every opportunity to take whatever steps and undertake whatever inspection they consider appropriate for the purpose of enabling them to give their Audit Report.

As per the provisions of the new Companies Act No. 07 of 2007 the Board of Directors of the Group shall cause the Notice of Meeting to be sent to every shareholder of the Group not later than �fteen working days before the date �xed for holding the Annual General Meeting.

The Directors are of the view that they have discharged their responsibilities as set out in this statement.

COMPLIANCE REPORT

The Directors con�rm that, to the best of their knowledge, all taxes and levies payable by the Group and all contributions, levies and taxes payable on behalf of the employees of the Group, and all other known statutory obligations as at the reporting date have been paid or provided for in the Financial Statements.

By Order of the Board

Secretary JACEY & COMPANY - Secretaries

Colombo. 23rd December 2020


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19/20


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RELATED PARTY TRANSACTIONS REVIEWCOMMITTEE REPORT

The Board established the Related Party Transactions Review Committee in terms of the code of best practice on related party transactions issued by the Securities and Exchange Commission of Sri Lanka and the Section 9 of the Listing Rules of the Colombo Stock Exchange (CSE). The primary purpose of the Committee is to evaluate and consider all transactions with related parties of the Group, in order to ensure that related parties are treated on par with other shareholders and constituents of the Group.

As per the Section 9.2.2 of the Listing Rule of Colombo Stock Exchange, the Related Party Transactions Review Committee should comprise of a combination of Non Executive and Independent Directors. Accordingly the Related Party Transactions Review Committee of the Company comprises of one Executive Director who is Mr M Hamza and two Non Executive Directors, namely, Mr L R Watawala (Chairman) and Ms S A J Goonetilleke who are not independent. The Board is of the opinion that such Directors are “independent” having taken into consideration all relevant circumstances pertaining thereto.

Mr A M G Gomez ceased to be a member of the Related Party Transactions Review Committee pursuant his resignation as a Director of the Company with e�ect from 29th May 2019.

During the year Committee held only two (02) Meetings since there were no matters to be discussed/determined by the said Committee.

Name of Category 28th May 13th August Director 2019 2019

L R Watawala Deputy Chairman √ √ (Chairman)

S A J Goonetilleke Director √ -

A M G Gomez Director √ -

M Hamza Director Not Applicable √ as he was appointed on 29th May 2019

SCOPE OF THE COMMITTEE :

• Reviewing in advance all proposed Related Party Transactions of the Group.

• Adopting policies and procedures to review Related Party Transactions of the Group and reviewing and overseeing existing policies and procedures.

• Determining whether Related Party Transactions that are to be entered into by the Group require the approval of the Board or Shareholders of the Group.

• If Related Party Transactions are ongoing (Recurrent Related Party Transactions) the Committee establishes guidelines for senior management to follow in its ongoing dealings with the relevant related party.

• Ensuring that no Director of the Group shall participate in any discussion of a proposed Related Party Transaction for which he or she is a related party, unless such Director is requested to do so by the Committee for the express purpose of providing information concerning the Related Party Transaction to the Committee.

• If there is any potential conflict in any Related Party Transaction, the Committee may recommend the creation of a special committee to review and approve the proposed Related Party Transaction.

• Ensuring that immediate market disclosures and disclosures in the Annual Report as required by the applicable rules/ regulations are made in a timely and detailed manner.

The Committee is entrusted with evaluating and considering all transactions with related parties of the Group except the exempted transactions as per the Listing Rules of the CSE in order to ensure the related parties are treated on par with other shareholders and constituents of the Group and related party transactions are evaluated according to the applicable rules and regulations. To this end the Committee shall ensure that necessary processes are in place to identify, approve, disclose and monitor Related Party Transactions according to the provisions contained in the Related Party Transactions Policy pertaining to the Group and its subsidiaries. The Committee is required to carry out the aforementioned approval of the related parties and Related Party Transactions in line

with the regulations issued by the Colombo Stock Exchange and Securities and Exchange Commission of Sri Lanka.

During the year under review, the Committee reviewed and pre-approved all proposed Related Party Transactions. The activities and views of the Committee, have been communicated to the Board of Directors.

There were no recurrent or Non recurrent Related Party Transactions that exceeded the respective thresholds mentioned in the Listing Rules of the Colombo Stock Exchange requiring disclosure in the Annual Report.

Details of other Related Party Transactions entered into by the Group during the �nancial year is disclosed in note 32 to the �nancial statements.

L R Watawala ChairmanRelated Party Transactions Review Committee


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19/20


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SCOPE OF THE COMMITTEE :

• Reviewing in advance all proposed Related Party Transactions of the Group.

• Adopting policies and procedures to review Related Party Transactions of the Group and reviewing and overseeing existing policies and procedures.

• Determining whether Related Party Transactions that are to be entered into by the Group require the approval of the Board or Shareholders of the Group.

• If Related Party Transactions are ongoing (Recurrent Related Party Transactions) the Committee establishes guidelines for senior management to follow in its ongoing dealings with the relevant related party.

• Ensuring that no Director of the Group shall participate in any discussion of a proposed Related Party Transaction for which he or she is a related party, unless such Director is requested to do so by the Committee for the express purpose of providing information concerning the Related Party Transaction to the Committee.

• If there is any potential conflict in any Related Party Transaction, the Committee may recommend the creation of a special committee to review and approve the proposed Related Party Transaction.

• Ensuring that immediate market disclosures and disclosures in the Annual Report as required by the applicable rules/ regulations are made in a timely and detailed manner.

The Committee is entrusted with evaluating and considering all transactions with related parties of the Group except the exempted transactions as per the Listing Rules of the CSE in order to ensure the related parties are treated on par with other shareholders and constituents of the Group and related party transactions are evaluated according to the applicable rules and regulations. To this end the Committee shall ensure that necessary processes are in place to identify, approve, disclose and monitor Related Party Transactions according to the provisions contained in the Related Party Transactions Policy pertaining to the Group and its subsidiaries. The Committee is required to carry out the aforementioned approval of the related parties and Related Party Transactions in line

with the regulations issued by the Colombo Stock Exchange and Securities and Exchange Commission of Sri Lanka.

During the year under review, the Committee reviewed and pre-approved all proposed Related Party Transactions. The activities and views of the Committee, have been communicated to the Board of Directors.

There were no recurrent or Non recurrent Related Party Transactions that exceeded the respective thresholds mentioned in the Listing Rules of the Colombo Stock Exchange requiring disclosure in the Annual Report.

Details of other Related Party Transactions entered into by the Group during the �nancial year is disclosed in note 32 to the �nancial statements.

L R Watawala ChairmanRelated Party Transactions Review Committee


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ANNUAL REPORT

19/20


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INDEPENDENT AUDITOR’S REPORTCode of Ethics. We believe that the audit evidence we have obtained is su�cient and appropriate to provide a basis for our opinion.

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19/20

P A G E

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19/20


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STATEMENT OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOME

All amounts are in Sri Lankan Rupees

GROUP COMPANY

For the Year Ended 31st March, Note 2020 2019 2020 2019

Revenue 4 1,034,981,533 909,427,256 828,411,061 886,399,502

Cost of Sales (697,810,344) (623,842,335) (578,069,809) (610,399,874)

Gross Pro�t 337,171,189 285,584,921 250,341,252 275,999,628

Other Income 5 10,493,918 12,353,199 9,945,837 12,651,860

Administrative Expenses (209,047,930) (177,233,831) (158,926,526) (171,118,595)

Selling & Distribution Expenses (96,615,227) (54,066,456) (67,314,034) (52,764,990)

Impairment (Charge) / Reversal of Trade and Other Receivables 19.1 (5,345,596) 813,199 (3,851,394) 1,033,364

Impairment of Investment in Subsidiary 17 - - (9,739,475) -

Impairment of Goodwill (329,833) - - -

Other Operating Expenses 6 (21,308,068) (3,176,349) (11,248,917) (3,177,420)

Results from Operating Activities 15,018,453 64,274,683 9,206,743 62,623,847

Finance Expenses 7 (28,619,381) (17,750,418) (22,281,362) (17,753,557)

Finance Income 7 804,990 9,755,342 3,860,545 9,755,342

Net Finance Cost (27,814,391) (7,995,076) (18,420,817) (7,998,215)

Pro�t / (Loss) Before Tax 8 (12,795,938) 56,279,607 (9,214,074) 54,625,632

Income Tax Reversal / (Expense) 9 8,143,372 (13,393,452) (2,764,313) (13,365,815)

Pro�t / (Loss) for the Year (4,652,566) 42,886,155 (11,978,387) 41,259,817

Other Comprehensive Income Items that will not be reclassi�ed to Pro�t or Loss

Remeasurement of de�ned bene�t liability / (assets) 27 2,864,251 (2,582,290) 1,910,890 (2,582,290)

Equity investment at FVOCI - Net change in fair value 17.2 4,890,946 - 4,890,946 -

Tax on Other Comprehensive Income (2,411,424) 723,041 (1,904,514) 723,041

Other Comprehensive Income for the Year, net of Tax 5,343,773 (1,859,249) 4,897,322 (1,859,249)

Total Comprehensive Income Attributable to Owners of the Company 691,207 41,026,906 (7,081,065) 39,400,568

Earnings / (Loss) Per Share 10 (1.75) 16.14 (4.51) 15.52

Figures in brackets indicate deductions. The accounting policies and notes from pages 30 to 76 form an integral part of these Financial Statements.


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26

As at 31st March, GROUP COMPANY Note 2020 2019 2020 2019ASSETSNon Current AssetsProperty, Plant & Equipment 12/13 178,199,842 115,251,942 106,873,967 109,241,794 Intangible Assets 14/15 43,713,370 2,256,913 4,189,293 2,063,614 Right-of-Use Assets 16 29,419,129 - 27,317,425 - Investments In Subsidiary Companies 17 - - 117,260,485 26,999,960 Other Investment 17.2 40,687,746 35,796,800 40,687,746 35,796,800 Amounts Due from Related Companies 20 - - 25,000,000 - Deferred Tax Assets 24 12,389,800 - - - Total Non-Current Assets 304,409,887 153,305,655 321,328,916 174,102,168 Current Assets Inventories 18 192,756,472 108,785,748 158,744,941 106,686,500 Trade & Other Receivables 19 237,648,238 229,747,205 181,574,805 210,819,024 Amounts Due from Related Companies 20 - - 33,582,523 - Cash & Cash Equivalents 21 4,962,394 65,917,266 2,775,678 64,700,449 Total Current Assets 435,367,104 404,450,219 376,677,947 382,205,973 Total Assets 739,776,991 557,755,874 698,006,863 556,308,141 EQUITY Stated Capital 22 91,965,565 91,965,565 91,965,565 91,965,565 General Reserve 23 5,000,000 5,000,000 5,000,000 5,000,000 Retained Earnings 213,558,663 216,189,721 192,571,513 202,974,843 Total Equity Attributable to Owners of the Company 310,524,228 313,155,286 289,537,078 299,940,408 LIABILITIES Non-Current Liabilities Deferred Tax Liabilities 24 - 10,914,824 5,318,472 10,887,187Deferred Income 25 - 7,792,521 - 7,792,521Lease Liability 26 23,091,870 256,549 23,091,870 256,549Amounts Due to Related Companies 30 16,000,000 - - - De�ned Bene�t Obligation 27 14,517,831 13,893,062 13,941,923 13,893,062Total Non-Current Liabilities 53,609,701 32,856,956 42,352,265 32,829,319Current Liabilities Lease Liability 26 8,070,291 969,090 5,889,064 969,090Trade & Other Payables 28 217,235,827 146,907,485 204,129,766 144,534,816Short-Term Borrowings 29 31,998,748 35,355,462 26,832,711 35,355,462Amounts Due to Related Companies 30 562,664 - 50,344,862 18,570,092Current Tax Liabilities 31 7,054,018 11,302,316 6,787,371 11,323,120Bank Overdrafts 21 110,721,514 17,209,279 72,133,746 12,785,834Total Current Liabilities 375,643,062 211,743,632 366,117,520 223,538,414Total Liabilities 429,252,763 244,600,588 408,469,785 256,367,733Total Equity & Liabilities 739,776,991 557,755,874 698,006,863 556,308,141Net Assets Per Share (Rs.) 116.83 117.82 108.94 112.85

STATEMENT OF FINANCIAL POSITIONAll amounts are in Sri Lankan Rupees

The accounting policies and notes from pages 30 to 76 form an integral part of these Financial Statements.I certify that these Financial Statements have been prepared and presented in compliance with the requirements of the Companies Act No. 07 of 2007

Head of Finance - A P G A P GeethanjaleeThe Board of Directors is responsible for the preparation and presentation of these Financial Statements.Signed and approved for and on behalf of the Board by;

Director - M Hamza Director - A R Rasiah 23rd December 2020Colombo.


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27

For the Year Ended 31st March,

GROUP Stated Capital General Reserve Retained Earnings Total Balance as at 1st April 2018 91,965,565 5,000,000 175,162,815 272,128,380Comprehensive Income for the Year Pro�t for the year - - 42,886,155 42,886,155 Other Comprehensive Income (net of tax) - - (1,859,249) (1,859,249)Total Comprehensive Income for the Year - - 41,026,906 41,026,906Transactions with owners of the Companyrecognized directly in equityBalance as at 31st March 2019 91,965,565 5,000,000 216,189,721 313,155,286Balance as at 1st April 2019 91,965,565 5,000,000 216,189,721 313,155,286Comprehensive Income for the YearLoss for the year - - (4,652,566) (4,652,566)Other Comprehensive Income (net of tax) - - 5,343,773 5,343,773Total Comprehensive Income for the Year - - 691,207 691,207Transactions with owners of the Company recognized directly in equityDividend paid - (2018/19) - - (3,322,265) (3,322,265)Balance as at 31st March 2020 91,965,565 5,000,000 213,558,663 310,524,228

COMPANY Stated Capital General Reserve Retained Earnings Total

Balance as at 1st April 2018 91,965,565 5,000,000 163,574,275 260,539,840Comprehensive Income for the YearPro�t for the year - - 41,259,817 41,259,817Other Comprehensive Income (net of tax) - - (1,859,249) (1,859,249)Total Comprehensive Income for the Year - - 39,400,568 39,400,568Transactions with owners of the Companyrecognized directly in equityBalance as at 31st March 2019 91,965,565 5,000,000 202,974,843 299,940,408Balance as at 1st April 2019 91,965,565 5,000,000 202,974,843 299,940,408Comprehensive Income for the YearLoss for the year - - (11,978,387) (11,978,387)Other Comprehensive Income (net of tax) - - 4,897,322 4,897,322Total Comprehensive Income for the Year - - (7,081,065) (7,081,065)Transactions with owners of the Companyrecognized directly in equityDividend paid - (2018/19) - - (3,322,265) (3,322,265)Balance as at 31st March 2020 91,965,565 5,000,000 192,571,513 289,537,078

Figures in brackets indicate deductions.The accounting policies and notes from pages 30 to 76 form an integral part of these Financial Statements.

STATEMENT OF CHANGES IN EQUITYAll amounts are in Sri Lankan Rupees

For the Year Ended 31st March,


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28

Figures in brackets indicate deductions.

The accounting policies and notes from pages 30 to 76 form an integral part of these Financial Statements.

STATEMENT OF CASH FLOWSAll amounts are in Sri Lankan Rupees

For the Year Ended 31st March, GROUP COMPANY Note 2020 2019 2020 2019

Operating Activities (A)

Cash Generated from Operations 74,463,345 17,806,843 61,843,327 20,969,943

Exchange Loss (2,524,175) (4,331,122) (2,518,611) (4,405,381)

Interest Paid (28,302,977) (13,261,019) (15,527,370) (13,189,899)

Employee Bene�ts Paid (1,501,530) (4,048,664) (1,501,530) (4,048,664)

Tax Paid (15,040,525) 14,222,837) (14,773,291) (13,841,178)

Net Cash Generated From Operating Activities 27,094,138 (18,056,799) 27,522,525 (14,515,179)

Investing Activities

Loans Granted (90,250,923) - (90,250,923) -

Purchase of Property, Plant & Equipment & Intangible Assets (73,608,567) (43,486,380) (51,590,035) (41,757,308)

Interest Received 7,466,672 9,755,342 3,860,545 9,755,342

Proceeds from Disposal of Property, Plant & Equipment 7,612,597 2,332,421 3,134,336 2,332,421

Cash acquired on investment (17,466,893) - - -

Net Cash Used in Investing Activities (166,247,114) (31,398,617) (134,846,077) (29,669,545)

Financing Activities

Lease Rentals Paid (11,991,866) (1,042,059) (10,626,866) (1,042,059)

Dividend Paid (3,322,265) - (3,322,265) -

Net Cash from / (Used) in Financing Activities (15,314,131) (1,042,059) (13,949,131) (1,042,059)

Increase / (Decrease) in Cash & Cash Equivalents (154,467,107) (50,497,475) (121,272,683) (45,226,783)

Movements in Cash & Cash Equivalents

As at the Beginning of the Year 48,707,987 99,205,462 51,914,615 97,141,398

Increase in Cash & Cash Equivalents (154,467,107) (50,497,475) (121,272,683) (45,226,783)

Cash & Cash Equivalents as at 31st March 21 (105,759,120) 48,707,987 (69,358,068) 51,914,615


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29

STATEMENT OF CASH FLOWSAll amounts are in Sri Lankan Rupees

For the Year Ended 31st March GROUP COMPANY

(A) CASH GENERATED FROM OPERATIONS 2020 2019 2020 2019

Pro�t / (Loss) Before Tax (12,795,938) 56,279,607 (9,214,074) 54,625,632

Adjustments;

Depreciation of PPE & Amortisation of Intangible Assets 71,927,501 49,784,508 50,648,865 48,114,821

Depreciation of Right-of-Use Assets 8,328,961 - 7,102,967 -

Impairment of Investment in Subsidiary - - 9,739,475 -

Gain on Disposal of PPE (2,428,474) (41,863) (2,224,630) (41,863)

Provision for Related Party Receivables - - 75,875 91,580

Exchange Loss 2,524,175 4,331,122 2,518,611 4,405,38

Other Non-Current Liabilities (7,792,521) (11,074,927) (7,792,521) (11,074,927)

Interest Income (7,466,672) (9,755,342) (3,860,545) (9,755,342)

Interest Expenses 32,756,887 13,419,296 19,762,751 13,348,175

Impairment Charge / (Reversal) of Trade Receivables 5,406,502 (813,199) 3,851,394 (1,033,364)

Impairment of Goodwill 329,833 - - -

Write o� of Trade Receivables 233,599 216,477 - 216,477

Provision for Inventories 10,715,732 1,988,578 2,589,211 1,898,069

Write o� of Inventories 10,141,784 599,977 8,427,784 599,977

Employee Bene�ts 3,199,359 3,367,529 3,461,281 3,367,529

WHT (340,091) - - -

Changes in Working Capital

- Trade & Other Receivables 41,297,058 (104,594,718) 25,392,825 (99,340,150)

- Inventories (73,423,265) (60,843,992) (63,075,436) (60,112,443)

- Trade & Other Payables 47,687,372 38,525,427 59,594,950 38,242,673

- Short-Term Borrowings (40,034,970) 35,355,462 (8,522,751) 35,355,462

- Related Party (15,803,487) 1,062,900 (36,632,705) 2,062,256

Cash Generated from Operations 74,463,345 17,806,843 61,843,327 20,969,943

CASH & CASH EQUIVALENTS

For the purpose of the Statement of Cash Flows, the year end cash equivalents comprise the following Cash & Cash Equivalents.

Cash & Bank Balances 21 4,962,394 65,917,266 2,775,678 64,700,449

Bank Overdrafts 21 (110,721,514) (17,209,279) (72,133,746) (12,785,834)

(105,759,120) 48,707,987 (69,358,068) 51,914,615

GROUP COMPANY

2020 2019 2020 2019

Figures in brackets indicate deductions.

The accounting policies and notes from pages 30 to 76 form an integral part of these Financial Statements.


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P A G E

30

NOTES TO THE FINANCIAL STATEMENTSAll amounts are in Sri Lankan Rupees

1 REPORTING ENTITY

1.1 Domicile and Legal form

Gestetner of Ceylon PLC (the “Company”) is a Quoted Public Company with limited liability incorporated in Sri Lanka under the provisions of the Companies Act No. 17 of 1982 and re-registered under the new Companies Act No. 7 of 2007. The registered o�ce and the principal place of business of the Company is situated at Gestetner Centre, No. 248, Vauxhall Street, Colombo 02.

The consolidated �nancial statements, as at and for the year ended 31st March 2020 comprises the Company and its Subsidiaries (together referred to as the "Group" and individually as “Group entities”).

1.2 Principal Activities and Nature of Operations

The Group is primarily involved in importing and selling of Digital Copiers, Digital Duplicators, Duplicators, Laser Printers, Laptops, G&D machines and air conditioners, provision of outsourced Photocopying / Printing Services, IT Solutions, managing a Copy Bureau and providing after sales services.

The Group acquired Fintek Managed Solutions (Private) Limited on 28th May 2019, its principal activities are set out in Note 3.2.2.

There were no signi�cant changes in the nature of principal activities of the Group during the �nancial year under review.

2 BASIS OF PREPARATION

2.1 Statement of Compliance

The Consolidated Financial Statements of the Group and separate Financial Statements of the Company, as at 31st March 2020 and for the year then ended, have been prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRSs and LKASs), laid down by the Institute of Chartered Accountants of Sri Lanka and in compliance with the requirements of the Companies Act No. 07 of 2007, and the Listing Rules of the Colombo Stock Exchange.

These Financial Statements include the following components:

• Statement of Profit or Loss and Other Comprehensive Income providing the information on the �nancial performance of the Company and the Group for the year under review;

• Statement of Financial Position providing the information on the �nancial position of the Company and the Group as at the year-end;

• Statement of Changes in Equity depicting all changes in shareholders‘ equity of the Company and the Group during the year under review;

• Statement of Cash Flows providing the information to the users, on the ability of the Company and the Group to generate cash and cash equivalents and the needs to utilise those cash �ows ;and

• Notes to the Financial Statements comprising Accounting Policies and other explanatory information.

This is the �rst set of the Group’s annual �nancial statements in which SLFRS 16 Leases has been applied. The related changes to signi�cant accounting policies are described in Note 3.1.

2.2 Basis of Measurement

The Financial Statements have been prepared on the historical cost basis except for the following material items in the Statement of Financial Position.

The de�ned bene�t liability is recognized at the present value of the de�ned bene�t obligation computed using the Projected Unit Credit Method in accordance with Sri Lanka Accounting Standard 19 (LKAS 19) - “Employee Bene�ts”.

2.3 Directors’ Responsibility Statement

The Board of Directors is responsible for the preparation and presentation of these Financial Statements as per the provisions of the Companies Act No. 07 of 2007 and SLFRSs and LKASs.

The Financial Statements for the year ended 31st March 2020 were authorized for issue by the Board of Directors on 23rd December 2020.

2.4 Functional and Presentation Currency

The �nancial statements are presented in Sri Lankan Rupees, which is the Group’s functional currency. All �nancial information presented in Sri Lankan Rupees have been rounded to the nearest Rupee.

2.5 Use of Estimates and Judgments

The preparation of the �nancial statements in conformity with Sri Lanka Accounting Standards requires management to make judgments, estimates and assumptions that a�ect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may di�er from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods a�ected.

Information about critical judgments in applying accounting policies that have the most signi�cant e�ect on the amounts recognized in the �nancial statements is included in the following notes;

• Note 12/13 - Useful lives of property plant and equipment - review of the residual values, useful lives and methods of depreciation at each reporting date.

• Note 24 - Deferred tax asset/liability - availability of future taxable pro�ts against which carry forward tax losses can be used.

• Note 27 - Measurement of defined benefit obligation - key assumptions underlying the measurement of employee bene�ts liability.

• Note 17.1 - Acquisition of subsidiary – fair value of the consideration transferred, and fair value of the assets acquired, and liabilities assumed.

• Note 17.1(c) - Impairment test of goodwill: key assumptions underlying recoverable amounts.

2.5.1 Impact of COVID 19

The ongoing COVID-19 pandemic has increased the estimation uncertainty in the preparation of these Financial Statements. The estimation uncertainty is associated with:

• the extent and duration of the disruption to business arising from the actions by governments, businesses and consumers to contain the spread of the virus;

• the extent and duration of the expected economic downturn. This includes the disruption to capital markets, deteriorating credit, liquidity concerns, increasing unemployment, declines in consumer discretionary spending, reductions in production because of decreased demand, and other restructuring activities; and

• the effectiveness of government and central bank measures that have and will be put in place to support businesses and consumers through this disruption and economic downturn.

2.6 Going Concern

The management has made an assessment of its ability to continue as a going concern and is satis�ed that it has the resources to continue in business for a foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast signi�cant doubt upon the Group’s ability to continue as a going concern. Therefore, the Financial Statements continue to be prepared on the going concern basis. The impact of COVID 19 on the entity’s going concern is disclosed in Note 38.

2.7 Materiality & Aggregation

In compliance with the Sri Lanka Accounting Standard - LKAS 01 on ‘Presentation of Financial Statements’, each material class of similar items is presented separately in the Financial Statements. Items of dissimilar nature or functions too are presented separately, unless they are immaterial.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in the Financial Statements of the Company, except as indicated in 3.1.

3.1 Changes to Signi�cant Accounting Policies

The Group applied SLFRS 16 with a date of initial application of 01 April 2019. As a result, the Group has changed its accounting policy for lease contracts as detailed below. A number of other new standards are also e�ective from 01 April 2019 but they do not have a material e�ect on the Group's �nancial statements.

The Group applied SLFRS 16 using the modi�ed retrospective approach, at the date of initial application under which no cumulative e�ect of initial application is recognized in retained earnings at 01 April 2019. Accordingly, the comparative information presented for 2018/19 is not restated i.e. it is presented as previously reported under LKAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below, additionally the disclosure requirements in SLFRS 16 have not generally been applied to comparative information.

3.1.1 De�nition of Lease

Previously, the Group determined at contract inception whether an arrangement is or contains a lease under International Financial Reporting Interpretations Committee 4 (IFRIC 4). Under SLFRS 16, the Group assesses whether a contract is or contains a lease based on the de�nition of a lease, as explained in Note 3.7.

On transition to SLFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied SLFRS 16 only to contracts that were previously identi�ed as leases. Contracts that were not identi�ed as leases under LKAS 17 and IFRIC 4 were not reassessed for whether there is a lease under SLFRS 16. Therefore, the de�nition of lease under SLFRS 16 was applied only to contracts entered into or changed on or after 1 April 2019.

3.1.2 As a Lessee

As a lessee, the Group previously classi�ed leases as operating, or �nance leases based on its assessment of whether the lease transferred signi�cantly all of the risks and rewards incidental to ownership of the underlying asset to the Group. Under SLFRS 16, the Group recognises right-ofuse assets and lease liabilities for most leases - i.e. these leases are on-balance sheet.

At commencement or on modi�cation of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone price.

However, for leases of property the Group has elected not to separate non lease

components and account for the lease and associated non lease components as a single lease component.

Leases classi�ed as operating leases under

LKAS 17

On transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group's incremental borrowing rate as at 01 April 2019. Right-of-use assets are measured at an amount equal to lease liability adjusted by the amount of any prepayments.

The Group has tested its right of use assets for impairment on the date of transition and has concluded that there is no indication that the right of use assets is impaired.

The Group used the following practical expedient when applying SLFRS 16 to leases previously classi�ed as operating leases under LKAS 17.

- did not recognize right of use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application;

- used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

3.1.3 As a Lessor

The Group leases out a number of items of machinery. The Group is not required to make any adjustments on transition to SLFRS 16 for leases in which it acts as a lessor, except for a sub-lease.

The Group sub leases its leased property. Under LKAS 17, the head lease and sub lease

contracts were classi�ed as operating leases. On transition to SLFRS 16, the right of use assets recognized from the head lease is presented under “Right of Use Assets” and measured at fair value at that date. The Group assessed the sub lease contracts and concluded that they do not meet the de�nition of operating leases under SLFRS16.

3.1.4 Impact on the Financial statements

On transition to SLFRS 16, the Group recognised additional right-of-use assets and additional lease liabilities. The impact on transition to the Statement of Financial Position on 1 April 2019 is summarised below.

3.2 Basis of consolidation

3.2.1 Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identi�able net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in pro�t or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

3.2.2 Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to a�ect those returns through its power over the entity. The �nancial statements of subsidiaries are included in the consolidated �nancial statements from the date on which control commences until the date on which control ceases.

The Directors have concluded that the Group controls all subsidiaries as it has majority control and voting rights over its subsidiaries.

Set out below are the group’s principal subsidiaries as at 31 March 2020.

3.2.3 Non-controlling interest

NCI are measured initially at their proportionate share of the acquiree’s identi�able net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

3.2.4 Loss of control

When the Group loses control over a subsidiary, it derecognises the asset and liabilities of the subsidiary and any related NCI (If applicable) and other components of equity. Any resulting gain or loss is recognised in pro�t or loss. Any interest in the former subsidiary is measured at fair value when the control is lost.

3.2.5 Goodwill

Goodwill recognized in a business combination is an asset representing the

future economic bene�ts arising from other assets acquired in a business combination that are not individually identi�ed and separately recognized.

Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net amount of the identi�able assets, liabilities and contingent liabilities acquired.

Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate that the carrying value may be impaired.

3.2.6 Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising

from intra-group transactions, are eliminated.

3.2.7 Accounting for Investment in subsidiaries

When separate �nancial statements are prepared, investments in subsidiaries are accounted for using the cost method. Investments in subsidiaries are stated in the Company’s Statement of �nancial position at cost less accumulated impairment losses.

3.3 Foreign Currency Translation

Transactions in foreign currencies are translated to Sri Lanka Rupees at the exchange rates prevailing at the date of transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Sri Lankan Rupees at the exchange rates at that date.

Non-monetary assets and liabilities which are stated at historical cost denominated in foreign currencies are translated to Sri Lankan Rupees at the exchange rate at the date of the transactions.

Foreign exchange di�erences arising on translation are recognized in the Statement of Pro�t and Loss.

3.4 Financial Instruments

3.4.1 Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other �nancial assets and �nancial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument. A �nancial asset (unless it is a trade receivable

without a signi�cant �nancing component) or �nancial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a signi�cant �nancing component is initially measured at the transaction price.

3.4.2 Classi�cation and subsequent measurement

On initial recognition, a �nancial asset is classi�ed as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassi�ed subsequent to their initial recognition unless the Group changes its business model for managing �nancial assets, in which case all a�ected �nancial assets are reclassi�ed on the �rst day of the �rst reporting period following the change in the business model. A �nancial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• It is held within a business model whose objective is to hold assets to collect contractual cash �ows; and

• Its contractual terms give rise on specified dates to cash �ows that are solely payments of principal and interest on the principal amount outstanding.

The Group’s �nancial assets classi�ed under amortised cost includes trade and other receivable, amounts due from related companies and cash and cash equivalents.

A debt investment is measured at FVOCI if it meets both of the following conditions and it not designated as at FVTPL:

• It is held within a business model whose objective is achieved by both collecting contractual cash �ows and selling �nancial assets; and


On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

The Group’s �nancial assets classi�ed under FVOCI includes equity investment in Vauxhall Beira Properties (Pvt) Limited.

All �nancial assets not classi�ed as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a �nancial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or signi�cantly reduces an accounting mismatch that would otherwise arise.

Financial assets - Business model assessment:

The Group makes an assessment of the objective of the business model in which a �nancial asset is held at a portfolio level because this best re�ects the way the business is managed and information is provided to management. The information considered may include:

• The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether

management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate pro�le, matching the duration of the �nancial assets to the duration of any related liabilities or expected cash out�ows or realising cash �ows through the sale of the assets;

• The risks that affect the performance of the business model (and the �nancial assets held within that business model) and how those risks are managed;

• How managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash �ows collected; and

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial Assets - Assessment whether contractual cash �ows are solely payments of principal and interest:

For the purpose of this assessment, ‘principal’ is de�ned as the fair value of the �nancial asset on initial recognition. ‘Interest’ is de�ned as consideration for the time value-for-money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a pro�t margin.

In assessing whether the contractual cash �ows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the �nancial asset contains a contractual cash �ows such that it would not meet this condition.

3.4.3 Financial Liabilities - Classi�cation, Subsequent Measurement and Gains and Losses

Financial liabilities are classi�ed as measured at amortised cost or FVTPL. A �nancial liability is classi�ed as at FVTPL if it is classi�ed as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in pro�t or loss. Other �nancial liabilities are subsequently measured at amortised cost using the e�ective interest method. Interest expense and foreign exchange gains and losses are recognised in pro�t or loss. Any gain or loss on derecognition is also recognised in pro�t or loss.

Financial liabilities measured at amortised cost include “Interest Bearing Borrowings”, “Trade and Other Payables”, “Short Term Borrowings”, “Amounts due to Related Companies” and “Bank Overdrafts”.

3.4.4 Derecognition

Financial assets

The Group derecognises a �nancial asset when the contractual rights to the cash �ows from the �nancial asset expire, or it transfers the rights to receive the contractual cash �ows in a transaction in which substantially all of the risks and rewards of ownership of the �nancial asset are transferred in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the �nancial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of �nancial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

Financial liabilities

The Group derecognises a �nancial liability when its contractual obligation are discharged or cancelled, or expired. The Group derecognises a �nancial liability when its terms are modi�ed and the cash �ows of the modi�ed liability are substantially di�erent, in which case a new �nancial liability based on the modi�ed terms is recognised at fair value. On derecognition of a �nancial liability, the di�erence between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in pro�t or loss.

3.4.5 O�setting �nancial instruments

Financial assets and �nancial liabilities are o�set and the net amount presented in the statement of �nancial position when, and only when, the Group currently has a legally enforceable right to set o� the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

3.4.6 Impairment of �nancial assets

A �nancial asset not carried at fair value through pro�t or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A �nancial asset is impaired if objective

evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative e�ect on the estimated future cash �ows of that asset that can be estimated reliably.

Objective evidence that �nancial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indicates that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security.

The Group uses simpli�ed approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade and other receivables. The Group uses its historical credit loss experience adjusted as appropriate considering current observable data to re�ect the e�ects of current conditions and its forecasts of future conditions.

When determining whether the credit risk of a �nancial asset has increased signi�cantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or e�ort.

3.4.6.1 Credit-impaired �nancial assets

At each reporting date, the Group assesses whether �nancial assets carried at amortised cost are credit-impaired. A �nancial asset is ‘credit impaired’ when one or more events that have a detrimental impact on the estimated future cash �ows of the �nancial asset have occurred.

Evidence that a �nancial asset is credit-impaired includes the following observable data:

• Significant financial difficulty of the borrower or issuer;

• adverse changes in the payment status of the debtor; and

• It is probable that the borrower will enter bankruptcy or other �nancial reorganisation.

3.4.6.2 Presentation of Allowance for ECL in the Statement of Financial Position

Loss allowances for �nancial assets

measured at amortised cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a �nancial asset is written o� when the Group has no reasonable expectations of recovering a �nancial asset in its entirely or a portion thereof.

3.4.7 Determination of Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• in the principal market for the asset or liability or

• in the absence of a principal market, in the most advantageous market for the asset or liability.

All assets and liabilities for which fair value is measured or disclosed in the �nancial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is signi�cant to the fair value measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 - Valuation techniques for which the lowest level input that is signi�cant to the fair value measurement is directly or indirectly observable

• Level 3 - Valuation techniques for which the lowest level input that is signi�cant to the fair value measurement is unobservable

Level 1

When available, the Group measures the fair value of an instrument using active quoted prices or dealer price quotations (assets and long positions are measured at a bid price; liabilities and short positions are measured at an ask price), without any deduction for transaction costs. A market is regarded as active if transactions for asset or liability take place with su�cient frequency and volume to provide pricing information on an ongoing basis.

Level 2

If a market for a �nancial instrument is not active, then the Group establishes fair value using a valuation technique. Valuation techniques include using recent arm’s length transactions between knowledgeable, willing parties (if available), reference to the current fair value of other instruments that are substantially the same, discounted cash �ow analyses, credit

models, option pricing models and other relevant valuation models. The chosen valuation technique makes maximum use of market inputs, relies as little as possible on estimates speci�c to the Group, incorporates all factors that market participants would consider in setting a price, and is consistent with accepted economic methodologies for pricing �nancial instruments. Inputs to valuation techniques reasonably represent market expectations and measures of the risk-return factors inherent in the �nancial instrument.

The best evidence of the fair value of a �nancial instrument at initial recognition is the transaction price, i.e. the fair value of the consideration given or received, unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument, i.e. without modi�cation or repackaging, or based on a valuation technique whose variables include only data from observable markets.

When transaction price provides the best evidence of fair value at initial recognition, the �nancial instrument is initially measured at the transaction price and any di�erence between this price and the value initially obtained from a valuation model is subsequently recognised in pro�t or loss on an appropriate basis over the life of the instrument but not later than when the valuation is supported wholly by observable market data or the transaction is closed out.

Level 3Inputs that are unobservable. This category includes all instruments for

which the valuation technique includes

inputs not based on observable data and the unobservable inputs have a signi�cant e�ect on the instrument’s valuation.

This category includes instruments that are valued based on quoted prices of similar instruments for which signi�cant unobservable adjustments or assumptions are required to re�ect di�erence between the instruments.

Valuation techniques include net present value and discounted cash �ow models, comparison with similar instruments for which observable market prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, risk premiums in estimating discount rates, bond and equity prices, foreign exchange rates, expected price volatilities and corrections.

3.5 Stated Capital

Ordinary Shares are classi�ed as equity. Incremental costs directly attributable to the issue of Ordinary Shares are recognized as a deduction from equity, net of any tax e�ects.

3.6 Property, Plant and Equipment

Recognition and Measurement

Items of Property, Plant and Equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and

removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets.

When parts of an item of Property, Plant and Equipment have di�erent useful lives, they are accounted for as separate items (major components) of Property, Plant and Equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of Property, Plant and Equipment, and are recognized net within other income in pro�t or loss.

Subsequent Costs

The cost of replacing a part of an item of Property, Plant and Equipment is recognised in the carrying amount of the item if it is probable that the future economic bene�ts embodied within the part will �ow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in pro�t or loss as incurred.

De-recognition

Property, Plant and Equipment are de-recognized on disposal or when no future economic bene�ts are expected from its use. Any gain or loss arising on de-recognition of the asset (calculated as the di�erence between the net disposal proceeds and the carrying amount of the asset) is recognised in ‘Other income' in the Statement of Pro�t or Loss in the year the asset is de-recognised.

Depreciation

The Group provides depreciation from the date the assets are available for use up to the date of disposal, at the following rates on a straight line basis over the periods appropriate to the estimated useful lives based on the pattern in which the asset’s future economic bene�ts are expected to be consumed by the Group of the di�erent types of assets, except for which are disclosed separately.

Depreciation of an asset ceases at the earlier of the date that the asset is classi�ed as held for sale or the date that the asset is derecognized. Depreciation does not cease when the assets become idle or is retired from active use unless the asset is fully depreciated.

The estimated depreciation rates for the current and comparative years of signi�cant items of property, plant and equipment are as follows;

Asset Category Basis 2019/20

Plant & Machinery No of units produced or over the useful life (3-5 years)

Furniture & Equipment 05

Motor Vehicles 05

Impairment of non-�nancial assets

The carrying amounts of the Group’s non-�nancial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value

in use and its fair value less costs to sell. In assessing value in use, the estimated future cash �ows are discounted to their present value using a pre-tax discount rate that re�ects current market assessments of the time value of money and the risks speci�c to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest Group of assets that generates cash in�ows from continuing use that are largely independent of the cash in�ows of other assets or groups of assets (the “cash generating unit, or CGU”).

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in pro�t or loss. Impairment losses recognized in respect of CGUs are allocated �rst to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

3.7 Leases

The Group has applied SLFRS 16 using the modi�ed retrospective approach and therefore the comparative information has not been restated and continues to be reported under LKAS 17 and IFRIC 4. The details of accounting policies under LKAS 17 and IFRIC 4 are disclosed separately as they are di�erent from those under SLFRS 16 and the impact of changes is disclosed in Note 3.1.4.

3.7.1 Policy applicable from 01 April 2019

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identi�ed asset for a period of time in exchange for consideration.

To assess whether a contract conveys the right to control the use of an identi�ed asset, the Group assesses whether:

- the contract involves the use of an identi�ed asset – this may be speci�ed explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identi�ed;

- the Group has the right to obtain substantially all of the economic bene�ts from use of the asset throughout the period of use; and

- the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases

where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if either: the Group has the right to operate the asset; or

- the Group designed the asset in a way that predetermines how and for what purpose it will be used.

3.7.2 As a Lessee

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

However, for the leases of buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of

right-of-use assets are determined on the same basis as those of Property, Plant and Equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease payments included in the measurement of the lease liability comprise the following:

- �xed payments, including in-substance �xed payments;

- variable lease payments that depend on a rate, initially measured using the rate as at the commencement date; and

- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the e�ective interest method. It is remeasured when there is a change in future lease payments arising from a change in a rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of

whether it will exercise a purchase, extension or termination option or if there is a revised in-substance �xed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in pro�t or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets in ‘Right-of-use Assets’ and lease liabilities in ‘Lease Liability’ in the statement of �nancial position.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

3.7.3 As a Lessor

When the Group acts as a lessor, it determines at lease inception whether each lease is a �nance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a �nance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it

accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classi�cation of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classi�es the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Company applies SLFRS 15 to allocate the consideration in the contract.

The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘Service Income’.

Generally, the accounting policies applicable to the Group as a lessor in the comparative period were not di�erent from SLFRS 16 except for the classi�cation of the sub-lease entered into during current reporting period that resulted in a �nance lease classi�cation.

3.7.4 Policy applicable before 01 April 2019

For contracts entered into before 01 April 2019, the Group determined whether the arrangement was or contained a lease based on the assessment of whether:

- ful�lment of the arrangement was dependent on the use of a speci�c asset or assets; and

- the arrangement had conveyed a right to use the asset. An arrangement conveyed the right to use the asset if one of the following was met:

- the purchaser had the ability or right to operate the asset while obtaining or controlling more than an insigni�cant amount of the output;

- the purchaser had the ability or right to control physical access to the asset while obtaining or controlling more than an insigni�cant amount of the output; or

- facts and circumstances indicated that it was remote that other parties would take more than an insigni�cant amount of the output, and the price per unit was neither �xed per unit of output nor equal to the current market price per unit of output.

3.7.5 As a Lessee

In the comparative period, as a lessee the Group classi�ed leases that transferred substantially all of the risks and rewards of ownership as �nance leases. When this was the case, the leased assets were measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Minimum lease payments were the payments over the lease term that the lessee was required to make, excluding any contingent rent. Subsequent to initial recognition, the assets were accounted for in accordance with the accounting policy applicable to that asset.

Assets held under other leases were classi�ed as operating leases and were not recognised in the Group’s statement of �nancial position. Payments made under operating leases were recognized in pro�t or loss on a straight-line basis over the term of the lease. Lease incentives received were recognised as an integral part of the total lease expense, over the term of the lease.

3.7.6 As a Lessor

When the Group acted as a lessor, it determined at lease inception whether each lease was a �nance lease or an operating lease.

To classify each lease, the Group made an overall assessment of whether the lease transferred substantially all of the risks and rewards incidental to ownership of the underlying asset. If this was the case, then the lease was a �nance lease; if not, then it was an operating lease. As part of this assessment, the Group considered certain indicators such as whether the lease was for the major part of the economic life of the asset.

3.8 Intangible Assets

An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future economic bene�ts that are attributable to it will �ow to the Group in accordance with the Sri Lanka Accounting Standard- LKAS 38 on ‘Intangible Assets’. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are stated in the Statement of Financial Position at cost less any accumulated amortisation and any accumulated impairment losses if any.

Subsequent expenditure

Subsequent expenditure is capitalized if only it increases the future economic bene�ts embodied in the speci�c asset to which it relates. All other expenditure is recognized in pro�t or loss as incurred.

Amortization

Intangible assets are amortised on a straight-line basis in pro�t or loss over their estimated useful lives, from the date that they are available for use.

The estimated useful lives for the current and comparative years of Intangible assets are as follows:-

Asset Category Useful Life (Years)

Software 05

3.9 Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the �rst-in �rst-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.

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

3.10 Liabilities and Provisions

A provision is recognized in the Statement of Financial Position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an out�ow of economic bene�ts will be required to settle the obligation.

3.11 Employee Bene�ts

De�ned Contribution Plans

A de�ned contribution plan is a post-employment bene�t plan under which an entity pays �xed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

Obligations for contributions to de�ned contribution plans are recognized as an employee bene�t expense in pro�t or loss in the periods during which services are rendered by employees.

Mercantile Service Provident Fund

The Group and employees except for Fintek Managed Solutions (Private) Limited contribute 12% and 10% respectively on the salary of each employee to the Mercantile Service Provident Fund.

Employee’s Provident Fund

Fintek Managed Solutions (Private) Limited and their employees contribute 12% and 8% respectively on the salary of each employee to the Employee’s Provident Fund.

Employees’ Trust Fund

The Group contributes 3% of the salary of each employee to the Employees’ Trust Fund.

De�ned Bene�t Plan- Gratuity

A de�ned bene�t plan is a post-employment bene�t plan other than a de�ned contribution plan. The Group’s obligation in respect of de�ned bene�t plans is calculated by estimating the amount of future bene�t that employees have earned in return for their service in the current and prior periods; that bene�t is discounted to determine its present value.

Provision has been made for retirement gratuity from the �rst year of service for all employees in conformity with LKAS 19. However, under the payment of Gratuity Act No.12 of 1983, the liability to an employee arises only on completion of 5 years of continued services.

The liability is not externally funded. The de�ned bene�t obligation is calculated by a quali�ed actuary as at the current reporting

date using the Projected Unit Credit (PUC) method as recommended by LKAS 19 – “Employee bene�ts”. The Group recognises all actuarial gains and losses arising from de�ned bene�t plans immediately in statement of other comprehensive income and all expenses related to de�ned bene�t plans in administrative expenses in Pro�t or Loss.

3.12 Revenue

Disaggregation of revenue

SLFRS 15 requires an entity to disaggregate revenue from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash �ows are a�ected by economic factors. The Group’s contracts with customers are similar in nature and revenue from these contracts are not signi�cantly a�ected by economic factors apart from exports sales. The Group believes objective of this requirement will be met by using types of goods or service as per Note No 4.

3.12.1 Sale of goods

The Group’s revenue comprises only the revenue from contracts with customers. Revenue principally comprises sales of Digital Copiers, Digital Duplicators, Duplicators, Laser Printers, Air conditioners, Laptops, G&D machines, Spares and Consumables to external customers. Revenue excludes duty, other taxes collected on behalf of third parties, rebates, and discounts. The Group considers sales and delivery of products as one performance obligation and recognises revenue when it transfers control to a customer.

3.12.2 Sale of services

The Group provides Outsourced Photocopying / Printing Services, IT Solutions, manages a Copy Bureau, imports and distributes o�ce automation products.

The Group recognizes revenue at the time services are rendered, when the performance obligation is satis�ed.

3.13 Other Income

Net gains and losses of a revenue nature arising from the disposal of property, plant & equipment and other non-current assets, including investments, are accounted for in the Statement of pro�t or loss, after deducting from the proceeds on disposal, the carrying amount of such assets and the related selling expenses.

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

Dividend income is recognized in the Statement of pro�t or loss on the date that the Group’s right to receive the payment is established. Foreign Currency gains and losses are reported on a net basis.

3.14 Expenditure

All expenditure incurred in running of the business and in maintaining the capital assets in a state of e�ciency has been charged to pro�t or loss in arriving at the pro�t for the year.

Expenditure incurred for the purpose of acquiring, expanding or improving assets of a permanent nature by means of which to carry on the business or for the purpose of increasing the earning capacity of the business has been treated as capital expenditure.

3.15 Finance Income and Finance Costs

Finance income comprises interest income on funds invested recognized as it accrues in pro�t or loss, using the e�ective interest method.

Finance costs comprise interest expense on borrowings recognized in pro�t or loss using the e�ective interest method.

3.16 Income Tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in pro�t or loss except to the extent that it relates to items recognized directly in equity or in other comprehensive income.

3.16.1 Current Tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

The amount of current tax payable is the best estimate of the tax amount expected to be paid that re�ects uncertainty related to income taxes, if any.

Provision for taxation is based on the pro�t for the year adjusted for taxation purposes in accordance with the provisions of the Inland Revenue Act No. 24 of 2017 and the amendments.

3.16.2 Deferred Tax

Deferred tax is recognized in respect of temporary di�erences between the carrying amounts of assets and liabilities for �nancial reporting purposes and the amounts used for taxation purposes.

Deferred tax is measured at the tax rates that are expected to be applied to temporary di�erences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are o�set if there is a legally enforceable right to o�set current tax liabilities and assets, and they relate to income taxes levied by the same

tax authority on the same taxable entity, or on di�erent tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary di�erences, to the extent that it is probable that future taxable pro�ts will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax bene�t will be realized.

3.17 Events after the Reporting Date

The materiality of the events after the reporting date has been considered and appropriate adjustments and provisions have been made in the �nancial statements wherever necessary.

3.18 Basic Earnings Per Share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the pro�t or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the year.

3.19 Contingent Liabilities

Contingent liabilities are possible obligations whose existence will be con�rmed only by uncertain future events or present obligations where the transfer of economic bene�ts is not probable or cannot be readily measured as de�ned in the Sri Lanka Accounting Standard- LKAS 37 on ‘Provisions, Contingent Liabilities and Contingent Assets’. Contingent liabilities are not recognised in the Statement of Financial Position but are disclosed unless its occurrence is remote.

3.20 Segmental Reporting

The Group operates in two geographical segments-domestic and export sales.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. The chief operating decision-makers, who are responsible for making the strategic decisions, allocating resources and assessing performance of the operating segments, have been identi�ed as the Group Chief Executive and Board of Directors.

However operating segments are not presented as exports makes up less than 1% of the sales turnover.

3.21 Statement of Cash Flows

The Statement of Cash Flows has been prepared using the “Indirect Method” of preparing Cash Flows in accordance with the Sri Lanka Accounting Standard LKAS- 07 “Cash Flow Statements”. Cash and cash equivalents comprise short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insigni�cant risk of changes in value. The cash and cash equivalent include cash in hand and balances with banks.

3.22 New Accounting Standards issued but not e�ective as at reporting date

The Institute of Chartered Accountants of Sri Lanka has issued the following new Sri Lanka Accounting Standards which will become applicable for �nancial periods beginning on or after 01st January 2020. Accordingly, the Group has not applied the following

new standards in preparing these �nancial statements.

The following amended standards are not expected to have a signi�cant impact on the Group’s Financial Statements.

3.22.1 Amendments to references to conceptual framework in Sri Lanka Financial Reporting Standards

These amendments are e�ective on or after 1 January 2020 and include limited revisions of de�nitions of an asset and a liability, as well as new guidance on measurement and derecognition, presentation and disclosure. The concept of prudence has been reintroduced with the statement that prudence supports neutrality.

3.22.2 De�nition of a business (Amendments to SLFRS 3)

To be considered a business, an acquisition would have to include an input and a substantive process that together signi�cantly contribute to the ability to create outputs. The new guidance provides a framework to evaluate when an input and a substantive process are present. These amendments are e�ective on or after 1st January 2020.

3.22.3 De�nition of material (Amendments to LKAS 1 and LKAS 8)

Amendments to LKAS 1 Presentation of Financial Statements and LKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (the amendments) to align the de�nition of ‘material’ across the standards and to clarify certain aspects of the de�nition.

ANNUAL REPORT

19/20


31

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


32

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee





Leases classi�ed as operating leases under LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


33

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee





Leases classi�ed as operating leases under LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets




















Loss allowances for �nancial assets measured at amortised cost are deducted from the gross carrying amount of the assets.








• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or

liabilities



Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor



When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classi�cation of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classi�es the sub-lease as an operating lease.











3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


34

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






When measuring the lease liabilities for leases that were classi�ed as operating leases, the Group discounted lease payments using its incremental borrowing rate at 1 April 2019. Incremental borrowing rate applied is 14%.

At 1 April 2019 Group Company Rs. Rs. Operating lease commitments 50,505,000 46,800,000 as at 31 March 2019

Discounted using the (13,030,522) (12,653,220)incremental borrowing rate

Lease liabilities due to initial 37,474,478 34,146,780application of SLFRS 16, recognised as at 1 April 2019

At 1 April 2019 Note Group Company

Rs. Rs.

Right-of-use assets 16 37,474,478 34,146,780

Lease liabilities 26 37,474,478 34,146,780




3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2



The best evidence of the fair value of a �nancial instrument at initial recognition is the transaction price, i.e. the fair value of the consideration given or received, unless the fair value of that instrument is evidenced by comparison with other observable current

market transactions in the same instrument, i.e. without modi�cation or repackaging, or based on a valuation technique whose variables include only data from observable markets.







3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


35

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























Name of entity Place of business % of Ownership Principal Activities interest held by the group

Gestetner Printing Services Colombo/Sri Lanka 100% Provision of Outsourced (Pvt) Limited photocopying/ printing services and also IT Solution

Nashua Lanka (Pvt) Limited Colombo/Sri Lanka 100% Imports and markets copiers and consumables and manage a Copy Bureau

Gestetner Manufacturers Colombo/Sri Lanka 100% The Company was engaged in (Pvt) Limited manufacturing ink and currently it is

not operating. The board of directors of the company evaluating various business opportunities, and the company has ready access to �nancial resources from its parent entity and other related Companies.

Fintek Managed Solutions Colombo/Sri Lanka 100% Importing and selling of Digital (Pvt) Limited Copiers, laser printers, Air conditioners,

provision of Outsourced Photocopying and providing after sales services including services for G&D machines.

ANNUAL REPORT

19/20


36

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


37

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases





- the contract involves the use of an identi�ed asset – this may be speci�ed explicitly or implicitly, and should be physically distinct

or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identi�ed;





3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


38

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee



The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease

liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.













3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in pro�t or loss.

Financial assets at amortised cost These assets are subsequently measured at amortised cost using the e�ective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in pro�t or loss. Any gain or loss on derecognition is recognised in pro�t or loss.

Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income calculated using the e�ective interest method, foreign exchange gains and losses and impairment are recognised in pro�t or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassi�ed to pro�t or loss.

Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in pro�t or loss unless the dividend clearly represents a recover y of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassi�ed to pro�t or loss.

Financial assets - subsequent measurement, gain and losses:

ANNUAL REPORT

19/20


39

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor

When the Group acts as a lessor, it

determines at lease inception whether each lease is a �nance lease or an operating lease.













3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax





























ANNUAL REPORT

19/20

P A G E

40

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee

In the comparative period, as a lessee the Group classi�ed leases that transferred substantially all of the risks and rewards of ownership as �nance leases. When this was the case, the leased assets were measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Minimum lease

payments were the payments over the lease term that the lessee was required to make, excluding any contingent rent. Subsequent to initial recognition, the assets were accounted for in accordance with the accounting policy applicable to that asset.


3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


41

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


42

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


43

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


44

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


45

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor














3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


46

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


47

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


48

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


49

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax





























ANNUAL REPORT

19/20

P A G E

50

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor









3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets
































Level 1


Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























ANNUAL REPORT

19/20


51

1 REPORTING ENTITY








































2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






GROUP COMPANYFor the Year Ended 31st March, 2020 2019 2020 2019 Rs. Rs. Rs. Rs.4 REVENUE

Machine Sales 372,392,459 346,628,592 312,627,165 346,628,592

Spares Sales 115,725,460 117,549,191 97,258,862 117,549,191

Consumables Sales 241,370,729 232,155,393 211,320,932 232,155,393

Export Income 7,465,591 9,141,398 7,465,591 9,141,398

Service Income 290,975,349 180,924,928 199,738,511 180,924,928

1,027,929,588 886,399,502 828,411,061 886,399,502

4.1 Other Subsidiaries

Gestetner Printing Services (Pvt) Limited 9,170,584 19,868,132 - -

Nashua Lanka (Pvt) Limited 15,394,401 23,978,541 - -

Inter Group Sales (17,513,040) (20,818,919) - -

1,034,981,533 909,427,256 828,411,061 886,399,502

5 OTHER INCOME

Gain on Sale of Property, Plant & Equipment 2,428,474 41,863 2,224,630 41,863

Sundry Income 1,059,155 6,502,430 894,258 6,801,091

Provision for taxation written back 3,058,261 - 3,058,261 -

EPF / ETF Payable balance written back 179,340 - - -

Dividend Income 715,936 - 715,936 -

Pro�t of KPO (Note No : 6.1) - 1,536,184 - 1,536,184

Incentive for Target Achievement 3,052,752 4,272,722 3,052,752 4,272,722

10,493,918 12,353,199 9,945,837 12,651,860

6 OTHER OPERATING EXPENSES




Write o� of Lease Receivables 60,906 - - -


Nation Building Tax 156,047 371,317 156,047 371,317

21,308,068 3,176,349 11,248,917 3,177,420

6.1 Pro�t of Knowledge Process Outsource (KPO)

Other Income - 3,565,288 - 3,565,288

Administrative Expenses - (2,025,363) - (2,025,363)

Finance Cost - (3,741) - (3,741)

- 1,536,184 - 1,536,184

Knowledge Process Outsource (KPO) Project, was an outsourced operational project carried out by Gestetner of Ceylon PLC along with Argyle X (Pvt) Limited for the purpose of providing data processing services to Quintiles, South Africa, one of the global contract pharmaceutical research organization. Gestetner of Ceylon PLC and Argyle X (Pvt) Limited shared revenue and expenses relating to the KPO project based on agreed percentages of both Companies. The agreement was terminated pursuant to the project discontinuation in June 2018.





3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1

When available, the Group measures the fair value of an instrument using active quoted prices or dealer price quotations (assets and long positions are measured at a bid price;

liabilities and short positions are measured at an ask price), without any deduction for transaction costs. A market is regarded as active if transactions for asset or liability take place with su�cient frequency and volume to provide pricing information on an ongoing basis.

Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor












- the purchaser had the ability or right to control physical access to the asset while

obtaining or controlling more than an insigni�cant amount of the output; or


3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























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2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






7 NET FINANCE INCOME / (COST)

FINANCE INCOME

Interest Income 804,990 9,755,342 3,860,545 9,755,342

TOTAL FINANCE INCOME 804,990 9,755,342 3,860,545 9,755,342

FINANCE COST

Interest Cost on Lease Liabilities (4,453,910) (158,277) (4,235,381) (158,277)

Loss on Translation of Foreign Currency (2,659,846) (4,331,122) (2,518,611) (4,405,381)

Finance Cost on Bank Charges & Bank Overdraft (21,505,625) (13,261,019) (15,527,370) (13,189,899)

TOTAL FINANCE COST (28,619,381) (17,750,418) (22,281,362) (17,753,557)

NET FINANCE COST (27,814,391) (7,995,076) (18,420,817) (7,998,215)

GROUP COMPANYFor the Year Ended 31st March, 2020 2019 2020 2019 Rs. Rs. Rs. Rs.

GROUP COMPANYFor the Year Ended 31st March, 2020 2019 2020 2019 Rs. Rs. Rs. Rs.


Directors' Emoluments 7,773,350 22,703,129 7,773,350 22,703,129

Auditor's Remuneration - Statutory Audit 1,020,000 997,000 590,000 640,000

- Non Audit services - 500,000 - 500,000

Depreciation & Amortisation 71,927,501 49,784,508 50,648,865 48,114,821

Depreciation on Right-of-use Asset 8,055,349 - 6,829,355 -





De�ned Bene�t Plan Cost -Employee Bene�ts 4,133,519 3,367,529 3,461,281 3,367,529

De�ned Contribution Plan Cost (MSPS/EPF/ETF) 17,307,275 12,840,857 12,967,546 12,316,368

Salaries & Wages 130,518,139 95,024,792 96,697,309 91,454,285

Number of Employees 218 145 157 145

8 PROFIT / (LOSS) BEFORE TAX

Pro�t / Loss before tax is stated after charging all expenses including the following;




3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1



Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























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2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






GROUP COMPANYFor the Year Ended 31st March, 2020 2019 2020 2019 Rs. Rs. Rs. Rs. 9.1 Current Tax Expenses

Current Tax (Note 9.2) 10,524,993 13,897,161 10,237,542 13,897,161

Origination of Temporary Di�erences (Note 24.2) (18,668,365) (503,709) (7,473,229) (531,346)

Total Tax Expenses recognized in Pro�t or Loss (8,143,372) 13,393,452 2,764,313 13,365,815

9.2 Reconciliation between Accounting Pro�t and Taxable Pro�t

Pro�t / (Loss) Before Income Tax Expense (12,795,938) 56,279,607 (9,214,074) 54,625,632

Consolidation Adjustments 8,255,228 - - -

Pro�t / (Loss) After Adjustments (4,540,710) - - -

Aggregate Disallowable Expenses 149,352,732 60,024,727 94,468,588 57,920,175

Aggregate Allowable Expenses (104,168,696) (74,786,218) (54,943,983) (71,690,588)

Income from other sources 9,858,245 11,447,612 6,252,118 8,777,499

50,501,571 52,965,728 36,562,649 49,632,718

Less: Tax Loss Utilized (Note 9.3) (12,912,311) (3,333,009) - -

Taxable Income for the Year 37,589,260 49,632,719 36,562,649 49,632,718

Income Tax at 28% 10,524,993 13,897,161 10,237,542 13,897,161

Current Tax Expense 10,524,993 13,897,161 10,237,542 13,897,161

9.3 Reconciliation of Tax Losses

Tax Loss Brought Forward 34,203,014 37,429,444 - -

Adjustment to the brought forward Tax Loss (55,348) - - -

Acquisition Through Business Combination 19,008,270 - - -

Tax Loss Utilized (12,912,311) (3,333,009) - -

Tax Loss for the Year 27,108,062 106,579 - -

Tax Loss Carried Forward 67,351,687 34,203,014 - -

For the Year Ended 31st March, GROUP COMPANY 2020 2019 2020 2019

Pro�t / (Loss) Attributable to Ordinary Shareholders (Rs.) (4,652,566) 42,886,155 (11,978,387) 41,259,817

Weighted Average Number of Shares 2,657,812 2,657,812 2,657,812 2,657,812

Earnings / (Loss) Per Share (Rs.) (1.75) 16.14 (4.51) 15.52

There were no potentially dilutive ordinary shares outstanding at the end of the year, hence, the dilutive Earnings Per Share is equal to basic Earnings Per Share for the year.


9 INCOME TAX EXPENSE The Group is liable for taxation at the rate of 28% on its taxable income in accordance with Inland Revenue Act No. 24

of 2017. The composition of income tax expenses is as below.

10 EARNINGS / (LOSS) PER SHARE

Basic earnings per share is calculated by dividing the pro�t for the year attributable to Ordinary Shareholders of Gestetner of Ceylon PLC, by weighted average number of Ordinary Shares outstanding during the period.




3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1



Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























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3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






12 PROPERTY, PLANT & EQUIPMENT - GROUP

As at 31st March 2020 Plant & Furniture & Motor Lease TOTAL TOTAL Machinery Equipment Vehicles Asset 2020 2019 Rs. Rs. Rs. Rs. Rs. Rs.CostAs at 01st of April 304,960,711 22,280,635 214,347 4,104,162 331,559,855 292,243,462 Transfers to Right Of Use Asset (Note 16) - - - (4,104,162) (4,104,162) -Adjusted balance as at 1st April 304,960,711 22,280,635 214,347 - 327,455,693 292,243,462 Acquisition Through Business Combination 85,607,687 4,106,986 962,000 - 90,676,673 - Additions 61,662,033 8,629,978 - - 70,292,011 43,189,339Disposal (11,822,471) (2,373,133) - - (14,195,604) (3,872,946)As at 31st March 440,407,960 32,644,466 1,176,347 - 474,228,773 331,559,855Accumulated DepreciationAs at 01st of April 194,291,243 18,861,008 214,347 2,941,315 216,307,913 169,252,192Transfers to Right Of Use Asset (Note 16) - - - (2,941,315) (2,941,315) -Adjusted balance as at 1st April 194,291,243 18,861,008 214,347 - 213,366,598 169,252,192Acquisition Through Business Combination 21,212,731 823,331 40,083 - 22,076,145 - Charge for the Year 67,448,183 2,837,719 200,417 - 70,486,319 48,732,994Disposal (7,547,470) (2,352,661) - - (9,900,131) (1,677,273)As at 31st March 275,404,687 20,169,397 454,847 - 296,028,931 216,307,913Written Down ValueAs at 31st March 165,003,273 12,475,069 721,500 - 178,199,842 115,251,942

13 PROPERTY, PLANT & EQUIPMENT - COMPANY

As at 31st March 2020 Plant & Furniture & Motor Lease TOTAL TOTAL Machinery Equipment Vehicles Asset 2020 2019 Rs. Rs. Rs. Rs. Rs. Rs. CostAs at 01st of April 255,264,945 21,018,941 214,347 4,104,162 280,602,395 242,811,599 Transfers to Right Of Use Asset (Note 16) - - - (4,104,162) (4,104,162) - Adjusted balance as at 1st April 255,264,945 21,018,941 214,347 - 276,498,233 242,811,599 Additions 42,259,501 6,212,095 - - 48,471,596 41,663,742 Disposal - (2,373,132) - - (2,373,132) (3,872,946)As at 31st March 297,524,446 24,857,904 214,347 - 322,596,697 280,602,395Accumulated DepreciationAs at 01st of April 150,501,271 17,703,668 214,347 2,941,315 171,360,601 125,964,393 Transfers to Right Of Use Asset (Note 16) - - - (2,941,315) (2,941,315) -Adjusted balance as at 1st April 150,501,271 17,703,668 214,347 - 168,419,286 125,964,393 Charge for the Year 47,825,968 1,830,137 - - 49,656,105 47,073,481 Disposal - (2,352,661) - - (2,352,661) (1,677,273)As at 31st March 198,327,239 17,181,144 214,347 - 215,722,730 171,360,601 Written Down ValueAs at 31st March 99,197,207 7,676,760 - - 106,873,967 109,241,794

11 DIVIDEND PER SHARE

For the Year Ended 31st March, GROUP COMPANY 2020 2019 2020 2019 Rs. Rs. Rs. Rs.

Dividend for the Year (Rs.) - 3,322,265 - 3,322,265

Dividend Per Share (Rs.) - 1.25 - 1.25





3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1



Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























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2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






14 INTANGIBLE ASSETS - GROUP As at 31st March 2020 Computer Goodwill TOTAL TOTAL Software 2020 2019 Rs. Rs. Rs. Rs. Cost

As at 01st of April 7,524,151 - 7,524,151 7,379,308

Acquisition Through Business Combination 2,365,720 37,977,635 40,343,355 -

Additions 3,316,556 - 3,316,556 297,041

Disposal - - - (152,198)

As at 31st March 13,206,427 37,977,635 51,184,062 7,524,151

Amortisation

As at 01st of April 5,267,238 - 5,267,238 4,273,036

Acquisition Through Business Combination 432,439 - 432,439 -

Amortization Charge for the Year 1,441,182 1,441,182 1,051,514

Impairment Charge for the Year 329,833 329,833

Disposal - - - (57,312)

As at 31st March 7,140,859 329,833 7,470,692 5,267,238

Written Down Value

As at 31st March 6,065,568 37,647,802 43,713,370 2,256,913

15 INTANGIBLE ASSETS - COMPANY As at 31st March 2020 Computer TOTAL TOTAL Software 2020 2019 Rs. Rs. Rs.Cost As at 01st of April 7,093,649 7,093,649 7,152,281Additions 3,118,439 3,118,439 93,566Disposal - - (152,198)As at 31st March 10,212,088 10,212,088 7,093,649AmortisationAs at 01 of April 5,030,035 5,030,035 4,046,007Charge for the Year 992,760 992,760 1,041,340Disposal - - (57,312)As at 31st March 6,022,795 6,022,795 5,030,035 Written Down ValueAs at 31st March 4,189,293 4,189,293 2,063,614

Fully depreciated assets of the Group as at the year end is Rs. 113,669,175/- (2019 - 94,570,226/-) and that of the Company is Rs. 108,185,413/- (2019- Rs. 86,118,122/-).

The temporarily idle Property, Plant and Equipment without a carrying value amounts to Rs. 34,186,706/- as at 31st March 2020

No Property, Plant & Equipment has been pledged as collateral as at 31st March 2020.

NOTES TO THE FINANCIAL STATEMENTSAll amounts ares in Sri Lankan Rupees




3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1



Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























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2.6 Going Concern












3.1.2 As a Lessee






LKAS 17






3.1.3 As a Lessor






As at 31st March, GROUP COMPANY 2020 2019 2020 2019 Rs. Rs. Rs. Rs.

Cost

Balance as at 01st April - - - -

E�ect of adoption of SLFRS 16 as at 01st April 37,474,478 - 34,146,780 -

Transfer from PPE 4,104,162 - 4,104,162 -

Adjusted Balance as at 01st April 41,578,640 - 38,250,942 -

Disposal (4,104,162) - (4,104,162) -

Balance as at 31st March 37,474,478 - 34,146,780 -

Accumulated Depreciation

Balance as at 01st April - - - -

Transfer from PPE 2,941,315 - 2,941,315 -

Adjusted Balance as at 01st April 2,941,315 - 2,941,315 -

Charge for the year 8,328,961 - 7,102,967 -

Disposal (3,214,927) - (3,214,927) -

Balance as at 31st March 8,055,349 - 6,829,355 -

Net Book Value as at 31st March 29,419,129 - 27,317,425 -

16 RIGHT-OF-USE ASSETS SLFRS 16 – “Leases”, requires lessee to recognise all leases on their Statement of Financial Position

as lease liabilities with the corresponding right-of-use assets with e�ect from 01st April 2019. Set out below are the carrying amounts of right-of use assets recognised and the movements during the year.

17 INVESTMENTS IN SUBSIDIARIES COMPANY

As at 31st March, Percentage 2020 2019 Holding Rs. Rs.

Gestetner Manufacturers (Pvt) Ltd-99,996 Shares @ Rs.10/- 100% 999,960 999,960

Gestetner Printing Services (Pvt) Ltd-999,996 Shares @ Rs.10/- 100% 9,999,960 9,999,960

Nashua Lanka (Pvt) Ltd-1,700,000 Shares @ Rs.10/- 100% 17,000,000 17,000,000

Fintek Managed Solutions (Pvt) Ltd - 10,000,000 Shares @ Rs.10/- 100% 100,000,000 -

Impairment of Investment in Fintek Managed Solutions (Pvt) Ltd (9,739,475) -

Provision for Investment in Gestetner Manufactures (Pvt) Ltd 100% (999,960) (999,960)

117,260,485 26,999,960





3.2.2 Subsidiaries








3.2.5 Goodwill











































3.4.4 Derecognition

Financial assets































Level 1



Level 2










3.5 Stated Capital









Subsequent Costs


De-recognition


Depreciation







Motor Vehicles 05








3.7 Leases










3.7.2 As a Lessee
















3.7.3 As a Lessor















3.7.5 As a Lessee



3.7.6 As a Lessor







Amortization




Software 05

3.9 Inventories




















3.12 Revenue








3.13 Other Income




3.14 Expenditure






3.16 Income Tax


3.16.1 Current Tax




3.16.2 Deferred Tax




























Annual Report - 2020 CD - gestetnersl.com

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