Keels - Products - Annual - Report 2019

Keells Food Products PLC I Annual Report 2020/21
Read the Keells Food Products PLC

Annual Report 2020/21
online at http://www.keellsfoods.com/downloads
At Keells Food Products, we firmly believe that the exceptional
performance achieved this year is the outcome of our dedicated
staff and dynamic strategies. As we leveraged our capabilities and
sharpened our focus to navigate through a challenging year, your
company remained a truly agile and stable entity— ready to serve
and nourish the nation with a wide range of products that combine
the best in taste and nutrition.
This report is a testament to our unchanged focus to meet

every stakeholder need, which has enabled us to strengthen our
processes and deliver products of uncompromised quality and value
all year round.
CONTENTS
OVERVIEW FINANCIAL INFORMATION
About Us 03 Annual Report of the Board of Directors 80
Performance Highlights 04 Audit Committee Report 87
Non-Financial Highlights 05 Statement of Directors’ Responsibility 90
Implications of COVID-19 06 Independent Auditor’s Report 91
Chairman’s Message 07 Income Statement 94
About Our Annual Report 10 Statement of Comprehensive Income 95
Events of the Year 12 Statement of Financial Position 96
Statement of Cash Flows 97

MANAGEMENT DISCUSSION AND ANALYSIS
Statement of Changes in Equity 99
Our Business 15
Index to Notes 100
Our Strategy 18
Notes to The Financial Statements 101
Stakeholder Engagement 22
Your Share in Detail 153
Material Matters 26
Ten Year Information at a Glance 155
Delivering Our Strategy 28
Key Figures and Ratios 156
Financial Capital 30
Real Estate Portfolio 157
Manufactured Capital 33
Glossary of Financial Terminology 158
Intellectual Capital 35
Notice of Annual General Meeting 159
Human Capital 37
Form of Proxy 161
Social and Relationship Capital 41
Notes 163
Natural Capital 45
Corporate Information IBC
GOVERNANCE AND RISK
Corporate Governance 49
Board of Directors 63
Management Team 65
GRI Context Index 66
Enterprise Risk Management 70
2
ABOUT US
Our passion is to deliver pleasure and nutrition

throughout people’s lives, through exciting and superior
VISION products, whenever and wherever they choose to eat
and drink.
Innovation : Changing constantly, reinventing and evolving

In trying new ideas we win or learn, there is no failure.
VALUES Integrity : Doing the right thing always

Transparency is everything, so we just do it right!
Excellence : Constantly raising the bar

We get better every day.
Caring : Fostering a great place to work

We listen, we are thoughtful and we care to make a difference.
Trust : Building strong relationships based on openness

and trust
The foundation we work from.
KEELLS FOOD PRODUCTS PLC

Established in 1982, Keells Food Products PLC (KFP) is the pioneer in processed
meat manufacturing in Sri Lanka with over 39 years of experience. As the market
leader in the processed meat industry, KFP is renowned for its quality, backed by
stringent quality controls and its range of nutritious, tasty and convenient products
developed in house and manufactured using state of the art food processing
facilities.
Our product portfolio of 200+ products reach customers through 30,000+ retail
outlets and we take extensive measures to ensure the right product is available at
the right time at the right price to satisfy their demand.
Keells Food Products PLC | Annual Report 2020/21 3

PERFORMANCE HIGHLIGHTS
FINANCIAL PERFORMANCE 2021 2020 YOY change
Revenue Rs.'000 3,651,241 3,590,579 2%
Gross Profit Rs.'000 1,005,188 966,794 4%
Operating Profit Rs.'000 329,304 207,667 59%
Profit Before Tax Rs.'000 326,241 204,718 59%
Profit After Tax Rs.'000 320,980 150,175 114%
FINANCIAL POSITION 2021 2020 YOY change

Current Assets Rs.'000 1,214,789 997,270 22%
Total Assets Rs.'000 3,068,634 2,886,767 6%
Total Debt Rs.'000 289,903 341,616 -15%
Shareholders' Funds Rs.'000 2,076,382 1,875,990 11%
Debt/ Equity % 13.96 18.21 (4.25)
Debt/ Total Assets % 9.45 11.83 (2.38)
WORKING CAPITAL MANAGEMENT 2021 2020 YOY change

Inventory Days 65 51 14
Receivable Days 56 53 3
Payable Days 20 19 1
Working Capital Cycle Days 101 85 16
Current Asset Ratio Times 1.97 1.90 0.07
Quick Assets Ratio Times 1.09 1.14 (0.05)
PROFITABILITY RATIOS 2021 2020 YOY change

Operating Profit Margin % 9.02 5.78 3.24
Return on Assets % 10.78 5.51 5.27
Return on Equity % 16.24 8.07 8.17
Return on Capital Employed % 14.37 10.12 4.25
INVESTOR RATIOS 2021 2020 YOY change

Earnings per Share Rs. 12.59 5.89 6.70
Net Assets per Share Rs. 81.43 73.57 7.86
Dividend per Share Rs. 7.00 6.00 1.00
Market Price per Share as at 31st March Rs. 162.50 108.20 54.30
Market Capitalisation as at 31st March Rs.'000 4,143,750 2,759,100 50%
Price Earning Ratio Times 12.91 18.37 (5.46)
Cash Earnings per Share Rs. 19.76 11.95 7.81
4
NON-FINANCIAL HIGHLIGHTS
Manufactured Capital Human Capital Natural Capital
4 EMPLOYEES ENERGY CONSUMPTION

Production facilities in Ekala and Pannala 2021: 530 I 2020: 522 -11%
PROPERTY, PLANT AND EQUIPMENT
WATER RECYCLED
GENDER REPRESENTATION
Rs. Mn 29%
15%
2021 CARBON FOOTPRINT
4% Reduction in Emissions
2020
CARBON FOOTPRINT
2019
85% CO2 tCO2/MT
0 500 1,000 1,500 2,000 4,350 0.90
Male Female 4,300 0.89

CAPEX 4,250
0.89
2021: Rs. 90 million 4,200
0.88
EMPLOYEE SATISFACTION RATE 4,150
0.88
77% 4,100
4,050 0.87
Social and 4,000 0.87
TRAINING INVESTMENT 2020 2021
Relationship Capital
2021: Rs. 2 million GHG Emission Emission Intensity
OUR BUSINESS PARTNERS 2020: Rs. 6 million
+200 Suppliers
PER EMPLOYEE
+70 Distributors Net Profit (PAT): Intellectual Capital
+30,000 Retail Outlets Rs. 0.6 million

(2020: Rs. 0.3 million)
LIBRARY OF OVER +500 RECIPES
SUPPLIER PAYMENTS Remuneration:
6 Certifications
19% Rs. 1.03 million
Health and Safety:
(2020: Rs.1.06 million)
ISO 45001:2018
Food Safety Management:

TRAINING HOURS
Hrs.
ISO 22000:2018
81%
6,000
Quality Management:
5,000
Local Suppliers Imports ISO 9001:2015
4,000
SUPPLIER VALUE 3,000 SLS Certifications:

Payments to Suppliers: 2,000 SLS 1218 and SLS 1146
Rs. 2,512 million 1,000
0 Halal Certificate
9 Supplier Audits 2020 2021

IMPLICATIONS OF COVID-19
The outbreak of the COVID-19 pandemic in March 2020 presented unparalleled challenges with broad-based implications on both
demand and supply side dynamics. The Group’s manufacturing operations were temporarily halted for several weeks during the first
lockdown, prior to recommencing operations by mid-April. The Group activated its Business Continuity Plan, implementing stringent
safety measures to safeguard its employees while swiftly adapting to the new market dynamics through an agile strategy. With economic
conditions and consumer demand gradually returning to normalcy, the Group will build on the learnings obtained during this period to
embrace the new realities of the post-pandemic world, while effectively managing short-to-medium term risks.
The implications of COVID-19 on the Group’s operations and our response in addressing these challenges are summarised below and
discussed in further detail in subsequent sections of this Report.
Temporary Sharp contraction Supply Import restrictions Distribution was Liquidity pressure
disruptions to in demand from chain and resultant interrupted due to the and operational
manufacturing the HoReCa and disruptions price increases in restrictions imposed challenges faced
on mobility during the
IMPACTS ON KFP
operations hotel channel several key inputs by distributors

lock down
STRATEGIC RESPONSE
Supported the
Enhanced
commercial
Strategic focus on Relentless focus sales and sustainability
Implementation the Retail market on operating distribution of distributors
of stringent through the general efficiencies, Realignment efficiencies and through extending
health and and modern trade productivity and of product e-commerce credit and flexible
safety measures channels cost controls portfolio platforms terms
• In ensuring the safety of our team, KFP provided suitable Personal Protective Equipment (PPE), implemented stringent safety
guidelines including weekly testing and offered transportation facilities for employees using public transport. Meanwhile, work-from-
home arrangements were facilitated for all office employees.
• KFP is also currently in the process of obtaining the SLS-COVID-19 Safety Management Standard (final audit was conducted in April
2021.)
• Concerted efforts towards driving volume growth in the retail category by deploying additional resources to the general and modern
trade channels, activating consumption building initiatives and driving increased efficiencies in sales and distribution.
• Realigned the product portfolio with increased emphasis on the dry channel to capture emerging opportunities arising from increased
customer prevalence towards convenience.
• Relentless focus on driving operating efficiencies and productivity improvements through better resource optimisation, curtailing
discretionary expenses, weekly cashflow monitoring, spend control towers, line by line scrutiny of overheads, freezing recruitment,
proactive negotiations with banks and suppliers and deferment of non-essential capital expenditure.
6
CHAIRMAN’S MESSAGE
On behalf of the Board of Directors of Keells Food Products PLC prevalence towards convenience. Consequently the retail sausage
(KFP), I am pleased to present the Annual Report and Audited contribution improved to 27% during the year under review from
Financial Statements of your Company for the year ended 31 17% of last year. Meanwhile, chinese rolls, crumbed range and
March 2021. cold meats recorded volume contractions, reflecting the subdued
performance of the HoReCa and hotel channel.
OPERATING ENVIRONMENT
The Sri Lankan economy recorded a contraction in Gross In terms of distribution channels, modern trade accounted for
Domestic Product (GDP) by 3.6% in the calendar year 2020, 38% of total volumes followed by general trade and HoReCa/
a notable slowdown against the 2.3% growth recorded in the hotels which accounted for 36% and 19% respectively. General
calendar year 2019, primarily driven by reduced economic activity trade channel recorded a commendable growth of 12% backed
and dampened sentiment following the COVID-19 outbreak. by the strong volume expansions in retail sausages and meatballs,
Although GDP growth was negative in the first half of the calendar supported through focused improvements in the distribution
year 2020, economic activity rebounded thereafter recording network. The modern trade channel grew by 9%, supported by
1.3% growth in both third and fourth quarters of the calendar year a wider network of outlets and customers’ increasing preference
2020. Consumer discretionary spending deteriorated significantly towards the modern trade channel which extended its services
during the calendar year 2020 due to worsening economic through online platforms during the pandemic, thereby ensuring
conditions, unprecedented volatility and dampened consumer safety and convenience. HoReCa and hotel channel recorded
and investor sentiment on the back of COVID-19. Average annual a de-growth of 40% in the backdrop of the reduction in ‘out of
inflation was recorded at 6.2%, driven by notable increases in the home’ consumption due to lockdowns and restrictions in tourism.
food category.
KFP expanded its product range during the year with the
The financial year commenced with an islandwide lockdown introduction of the ‘Chunky Chicken’ and ‘Frankie’ kid’s range
which gradually eased towards mid May 2020 supporting a to the market which were well received by our consumers. KFP
strong recovery in the second quarter. The onset of the second also diversified and entered the Soya meat range in line with
wave of the pandemic in the third quarter of the financial year its strategy to grow the dry food category. Soya meat being
proved a setback followed by improvement in the last quarter a popular source of plant based protein and a low cost meat
with the roll out of the vaccines in Sri Lanka and the easing of substitute, shows promising prospects for the future. Last year,
restrictions placed on selected areas across the country. A shift in KFP launched a convenient rice pack “KeellsKrest Ezy rice”, a
purchasing and consumption patterns was witnessed, reflecting wholesome rice product offering a ready-to-eat, easy-to-prepare
changes in consumer behavior as a result of the health and safety option at an affordable price. Performance of this product
measures put in place to curtail the spread of the virus. The was below expectations this year, reflecting the reluctance of
‘take home’ consumption recorded a notable increase due to consumers to try new products during the pandemic.
restrictions in mobility during the lockdown, while ‘out of home’
consumption recorded a decline. Understandably the HoReCa During the year, the company faced challenges in sourcing
and hotel channel recorded a sharp decline due to closure of key raw materials; chicken and pork, stemming from import
borders for international tourism, restrictions in movement and restrictions on animal feed, which in turn led to an increase in
consumers’ heightened concerns on health and safety. production costs. The depreciation of the rupee and import
restrictions also contributed towards the escalation in costs.
BUSINESS REVIEW AND STRATEGIC IMPERATIVES Cost control and cashflow management was a key priority during
In a year of extraordinary challenges and shifts in consumer the year and the Group sought to minimise discretionary costs
behaviour, KFP demonstrated agility and resilience to achieve whilst curtailing recruitment and deferring capital expenditure in
strong profit growth while maintaining its market leadership order to manage cashflows and preserve liquidity. Volatile market
position by greater focus towards to the ‘take home’ consumption dynamics necessitated a curtailment of advertising and promotion
segment. Performance was primarily driven by the strong costs during the year. Meanwhile, we incurred additional costs
expansion in the retail sausage segment with a 44% growth to implement stringent health and safety standards in ensuring
and meatballs with a 20% growth which enabled the Group the well-being of our employees. A detailed scrutiny of costs
to contain the overall decline in volumes to 6%. The sausage was undertaken by the management to identify areas of potential
category achieved significant volume, supported by the Group’s savings backed by frequent cashflow reviews and spend control
strategic focus on the retail market and consumers’ increasing towers to ensure that expenses were optimised.

CHAIRMAN’S MESSAGE
The health and safety of our employees was a key priority as during a challenging year by ensuring uninterrupted production
we commenced operations amidst the lockdown in April 2020. while adhering to health and safety standards and working
Throughout the year stringent safety protocols were implemented tirelessly in the market to drive volume was the key contributor
in all business locations and staff who could work from home to the Group’s success. The Group’s ability to attract and retain
were encouraged do so, with the provision of requisite facilities talent, supported by structured development programmes to
to ensure seamless business continuity. Factory employees who unlock their potential continues to be a critical success factor.
were required on site were provided with the necessary personal High levels of engagement with employees have been key to
protective equipment and there was close coordination with enhancing profit per employee by 111% during the reporting year.
public health officials to maintain the highest safety standards
at our work sites. Random PCR testing on a weekly basis was INTEGRATING SUSTAINABILITY
also carried out throughout the year. It is noteworthy that the An island-wide network of over 30,000 retail outlets backed by
operations of the manufacturing plants continued uninterrupted, over 70 distributors ensures availability of our products in local
attesting to the stringent measures adopted to ensure employee communities. The retail outlets are typically microentrepreneurs
safety and minimise the risk of infection spread. while the distributors include a number of SME’s and we
engage with them continuously to support their growth through
A review of distributors was undertaken to identify the additional appropriate capacity building initiatives. A continued commitment
support required during this challenging period to ensure to build mutually beneficial partnerships strengthen our
continued commercial sustainability of the distributors. A new relationships across our distribution network. KFP works with
Distributor Management System (DMS) was rolled out to enhance small to medium scale farmers to procure its requirement of meat,
distribution efficiency through additional controls which also vegetables and spices supporting their growth through sustained
facilitate greater analytical capabilities, real-time performance programmes for knowledge sharing, financial assistance and
dashboards and a range of other value added features. The capacity building. Approximately 80% of raw materials are
5S lean manufacturing methodology which was introduced procured locally, supporting the growth of local suppliers. Product
at the Pannala and Ekala plants continue to drive productivity responsibility and food safety are critical factors which are
improvements, process efficiencies, improved margins and underpinned by compliance with the ISO 22000:2018 standard
enhanced product quality. on Food Safety Management System and ISO 9001:2015
standard on Quality Management Systems.
FINANCIAL PERFORMANCE
KFP recorded a revenue of Rs. 3,651 million in 2020/21, a growth CORPORATE GOVERNANCE
of 2% amidst the extraordinary challenges faced during the I am pleased to state that there were no departures from any
pandemic.The Company’s gross profit margin improved to 28% of the provisions of the Code of Business Conduct and Ethics
in the year under review against 27% in the previous year despite of the Code of Best Practice of Corporate Governance, jointly
the escalating raw material prices, reflecting a better sales mix advocated by the Securities and Exchange Commission of Sri
and stringent cost control mechanisms implemented during the Lanka and the Institute of Chartered Accountants of Sri Lanka. I
year. also wish to affirm our commitment to upholding Group policies,
where emphasis is placed on ethical and legal dealings, zero
Overall, KFP recorded a Profit After Tax of Rs. 321 million in tolerance for corruption, bribery and any form of harassment or
2020/21 compared to Rs. 150 million in previous year recording a discrimination in our workplace and any work-related situations.
commendable 114% growth in the bottom line in a challenging year.
INTEGRATED REPORTING
DIVIDENDS This Report has been prepared in conformance with the
Your Board has recommended the payment of a final dividend of Integrated Reporting Framework of the International Integrated
Rs 2.50 per share, in addition to an interim dividend of Rs. 7.00 Reporting Council (IIRC). The Board of Directors is responsible
per share paid in February 2021 resulting in a total dividend per for ensuring the accuracy and integrity of this Annual Report.
share of Rs. 9.50 for the financial year 2020/21. The total pay-out Every effort has been made to ensure the credibility, reliability and
of dividends from profits earned in 2020/21 amounted to Rs. 242 integrity of the information presented.
million.
LOOKING AHEAD
PEOPLE DEVELOPMENT Even though the recent outbreak of COVID-19 cases in Sri Lanka
The Group’s performance is driven by a committed and motivated has resulted in short term uncertainty in the market, we remain
team of 530 employees who champion the corporate values and optimistic of a sustained recovery in business volumes over the
are ambassadors of our products and brands. Their commitment short-to-medium term, despite the periodic isolation of ‘high-
8
risk’’ areas which could hamper momentum. We envisage the
impact on business to be less pronounced, as organisations
are now better equipped to navigate the ongoing outbreak in
contrast to 2020/21. Demand is also expected to be resilient,
as was evident in fourth quarter where business activity and
movement of consumers was largely normal, despite the increase
in cases during the period. Ensuring the safety of our employees
will remain a key priority and we will leverage on our learnings
from the outbreaks in 2020/21 to navigate the impacts on our
business.
KFP is well positioned to maintain its leadership position in the

processed meat industry with a proven track record of quality
and taste supported by its network of distributors and suppliers.
We will place strategic focus on expanding our product portfolio,
facilitating further penetration through emphasis on convenient
meal options. KFP plans to maintain the growth momentum
seen in general trade and modern trade whilst capitalising on
emerging opportunities in the HoReCa and hotel channel. We
intend to further consolidate our position and drive increased
penetration in our core businesses of retail sausage and meatballs
while continuing to innovate and expand the product range by
strengthening brand building and sales activities. The company’s
strong distributor network, outlet reach and long-standing supplier
relationships will assist us in driving future growth by enabling
easy access to our customers and ensuring a continuous and
uninterrupted supply of raw materials. We will focus initiatives in
the Western Province and grow our dry range of products backed
by awareness and promotional activities.
APPRECIATIONS
I take this opportunity to thank my colleagues on the Board for
their diligence and guidance during the year. I commend the team
for their dedication and commitment which enabled the group to
overcome numerous challenges and deliver the results set out in
this report. On behalf of the Board, I would like to acknowledge
the contribution of our customers, distributors, suppliers,
business partners and shareholders amongst others for their
continued confidence in KFP.
Krishan Balendra
Chairman
20th May 2021

ABOUT OUR ANNUAL REPORT
Our Integrated Annual Report for the financial year ending 31st
Reporting Boundary
March 2021-themed ‘Focused’ aims to provide our stakeholders
the information they require to make an informed assessment
of Keells Food Products PLC’s ability to create value over the
Integrated Reporting Boundary
short, medium and long-term. The content and structure of
this Report reflects matters that are most material to the Group
and articulates how these matters were addressed through our
Financial Reporting
strategy. The Report also provides relevant information on the
Group’s operating environment, corporate governance practices,
risk management and prospects. Our reporting is guided by the
Keells Foods Products PLC
principles and requirements of the Integrated Reporting <IR>
Framework, of the International Integrated Reporting Council.
Subsidiary
Report Scope and Boundary: This Report covers the operations
of Keells Food Products PLC (“KFP” or “the Company”) and its
subsidiary, John Keells Foods India Private Limited (collectively
referred to as “the Group”) for the period from 1st April 2020 to External Opportunities
31st March 2021. The financial and non-financial information Stakeholders and Risks
presented relates to consolidated information, unless otherwise
mentioned. The Group adopts an annual reporting cycle and
this report builds on the Group’s previous report for the financial Navigation Icons
year ending 31st March 2020. There were no significant changes
to the Group’s structure, supply chain or size nor any material Financial Capital
restatements of information provided in the previous Annual
Report. Manufactured Capital
KEY CONCEPTS Human Capital
Social and Relationship Capital
Completeness Conciseness Consistency Balance Intellectual Capital
Natural Capital
Reporting Framework Assurance Mechanism

Financial statements • Sri Lanka Accounting Standards issued by CA Internal assurance is through the Internal Audit
Sri Lanka function and the Audit Committee while external
• Companies Act No. 7 of 2007 assurance is provided by Messrs. Ernst & Young
Integrated report • <IR> Framework -

Sustainability reporting • GRI Standards-in accordance with ‘core’ criteria Integrity of information is assessed by John Keells
Group Sustainability Unit. We have not sought
• ESG (Environmental, Social, and Governance)
external assurance on our sustainability reporting.
Reporting Guidelines issued by the Colombo
Stock Exchange
Governance and • Listing Rules of the Colombo Stock Exchange -
compliance and subsequent revisions to date
• Code of Best Practice on Corporate

Governance issued by CA Sri Lanka (2017)
10
NAVIGATING OUR INTEGRATED REPORT
This Annual Report has been structured to best reflect the impact of the unprecedented operating conditions that prevailed during the year,
how we responded to these dynamics through an agile strategy and how we delivered our strategy despite the conditions that prevailed.
OUR BUSINESS This section provides an overview of our operations and showcases
how we create and convert our capital resources to long-term
Page
Organisational Overview
15
outcomes for our stakeholders.

Value Creation Model
OUR STRATEGY Demonstrates how we determine strategy and how the operating
environment during the year impacted our strategy.
Operating Environment
Page
Stakeholder Engagement
18
Material Matters
Strategic Response
DELIVERING OUR STRATEGY Progress we made in delivering our strategy and the Group’s
Page
performance discussed in relation to the value preserved/ created and

Strategic Progress in 2021
28
eroded.
Performance Capital Management
PRESERVING VALUE The Group’s approach to Corporate Governance and Risk
49 & 70
Pages
Management, with emphasis on the principle risks faced during the

Corporate Governance
year and measures adopted to mitigate these risks.
Risk Management
REPORTING IMPROVEMENTS
This year, we have attempted to improve the quality, readability and meaningfulness of our Annual Report through the following:
• Increased connectivity of information by using navigation icons across the Report

• Adopted revisions to the <IR> Framework published in January 2021
• Presented relevant information on the opportunities and risks that could impact the Group’s value creation
• Demonstrated how the operating conditions impacted the Group’s strategy
• Eliminated duplication of information through cross-referencing and signposting
FEEDBACK
We are committed to consistently enhance the readability and relevance of our reporting and we welcome your suggestions and
comments on our Annual Report. Please direct your feedback to,
Ms. P N Fernando
Chief Financial Officer/ Director
Keells Food Products PLC
E-mail: Nelindra.ccs@keells.com

EVENTS OF THE YEAR
APRIL JULY
Door to Door Distribution Retail Volume Drive Amongst Sales Staff and Distributors
• Distribution commenced from mid March and ramped up Strong focus was given to drive retail category in General
allowing increased market penetration. Trade (GT) through execution and rewards schemes.
• Door-to-Door home delivery was successful during the
lockdown (Volume of 100MT in April). The latest incentive program “KeellsKrest Lions” was
introduced to drive the volumes of retail sausages and
Omnichannel Presence during lockdown meatballs.
KFP expanded its online footprint during the lockdown
maintaining the availability in all key e-commerce and mobile
app-based platforms whilst maintaining door-to-door
deliveries via existing distributors.
MAY AUGUST
Launch of ‘Meat House’ - KFP’s New Online Meat Store Launch of the Frankie Kids’ Range
Launched the first ever direct-to-consumer Route to Market Frankie, KFP’s kids range of sausages was launched under
(RTM) via ‘Meat House’ KFP’s new online meat store. the theme of “So Tasty” with two exciting variants of Chicken
(100g for Rs.150.00) and Cheesy Blast (100g for Rs.
Meat House is a fully owned online platform of Keells Food 190.00).
Products PLC, launched in May to offer a wide range of
premium quality meat of Elephant House and KeellsKrest to
the consumer’s door-step at no added cost in the Western
Province.
JUNE SEPTEMBER
Launch of Chunky Chicken Sausages Sampling Activities

Chunky Chicken is a disruptive value for money product Sampling Activations for KeellsKrest meatballs were conducted
which was launched with the objective of gaining market in selected SMMT outlets and over 1,800 sampling heads
share in the premium sausage segment. were covered from meatballs sampling sessions.
The product was supported by digital awareness and Point Launch of Soya Meat
of Sales Materials (POSM) at all Small & Medium Modern Distribution commenced from September onwards and
Trade (SMMT) and top-end GT outlets. the operation was ramped up to penetrate the market. The
product was made available in GT, MT and SMMT outlets.
The product was supported by digital awareness and

POSMs at all SMMT and top-end GT outlets.
12
OCTOBER JANUARY
Launch of ‘Dhaiya Rice’ BTL Visibility – Raw Meat

A Value For Money (VFM) variant of instant rice was launched Island wide visibility was carried out for newly introduced raw
at MRP of Rs. 65.00. The product targets VFM seekers chicken range to build awareness and to boost the launch.
and the Youth segment with a proposition geared towards POSM were deployed in more than 1,000 SMMT and
innovation in taste with the tag-line of “Sara Wenasakata” farmhouse outlets.
and the experience.
5S Awareness Session at Keells Factory Ja Ela.
KFP has initiated a 5s Awareness session at Ja-Ela as a
journey towards operational excellency by keeping the
continues improvement from employee engagement.
NOVEMBER FEBRUARY
Consumer Promotion in General Trade (GT) Expansion of Elephant House Hot Dog Operation
A special Consumer promo was carried out to boost the GT Expanded the hot dog operation for crowd gathering
retail volumes by focusing on 3 products. A 12.5% price off locations such as One Galle Face/ Bellanwila Park/ Sri Lanka
was offered to the selected products at high volume GT and Foundation Institute (SLFI).
SMMT outlets.
Consumer Promotion in General Trade (GT)
Consumer promotions were carried out in both GT and
SMMT outlets to boost retail volumes by focusing on 2 key
products during February and March.
DECEMBER MARCH
Launch of KeellsKrest Branded Raw Chicken Krest Mobile Operation

Keells
KFP introduced KeellsKrest branded range of raw chicken to KFP has expanded mobile operations while connecting with
the market with the launch of 3 new raw chicken products. more consumers around the country.
SMMT Focus Sampling The team carried out consumer surveys targeting selected
KFP initiated chef model sampling activations for SMMT SMMT outlets in the Western Province to study the
channel to provide assurance on the quality of the product. consumer behaviour associated with Chicken and Dhaiya
Rice.

ON STRATEGY
MANAGEMENT DISCUSSION
AND ANALYSIS
Our Business 15
Our Strategy 18
Stakeholder Engagement 22
Material Matters 26
Delivering Our Strategy 28
Financial Capital 30
Manufactured Capital 33
Intellectual Capital 35
Human Capital 37
Social and Relationship Capital 41
Natural Capital 45
14
OUR BUSINESS
ORGANISATIONAL OVERVIEW
KFP is the pioneer and market leader in Sri Lanka’s processed meat industry with an established track record of nearly four decades. The
Company’s competitive edge is underpinned by its reputation for product and process quality, unmatched product range, state-of-the-
art manufacturing facility and research and development capabilities which have enabled it to respond to emerging customer demands
through innovative offerings. Our products are distributed island-wide through an extensive network of over 70 distributors and over
30,000 retail outlets. The Company has also established a regional presence, through exports to Maldives. KFP is a subsidiary of John
Keells Holdings PLC, Sri Lanka’s premier diversified conglomerate and the most valuable listed entity in Sri Lanka.
PRODUCT AND PROCESS QUALITY

A range of certifications on quality
management and food safety ensure that
we comply with the highest standards in
product and process quality.
RS. 3,651 Mn
INNOVATION
Revenue
Our product innovation is driven by strong
R&D capabilities enabling the Company
to cater to discerning customer needs
RS. 321 Mn through a portfolio of over 200 products.
Profit After Tax
MARKET REACH
Our island-wide customer reach is
RS. 3,069 Mn facilitated by an extensive network of
Total Assets channel - partners and retail outlets.
RS. 2,076 Mn OUR BRANDS

Total Equity The Company’s products are offered under
the three brands of KeellsKrest, Krest and
Elephant House, which are synonymous
with quality, taste and nutrition.
OUR PEOPLE
The Company is powered by a team
of 530 high-performing and dedicated
employees who drive our strategic
aspirations.

OUR BUSINESS
VALUE CREATION MODEL

The Group’s value creation demonstrates how we utilise our resources (Capital Inputs) and relationships, transform these inputs through
our business activities and in turn generate outputs and stakeholder outcomes. This transformation process leads to the creation,
preservation and erosion of our capital inputs and is underpinned by strong Corporate Governance and Risk Management practices. This
value creation process is illustrated below:
CAPITAL INPUTS VALUE TRANSFORMATION
FINANCIAL CAPITAL VISION
The funds obtained through shareholders, banks and other Our passion is to deliver pleasure and nutrition throughout
lenders which allow us to drive our strategic ambitions. people’s lives, through exciting and superior products, whenever
and wherever they choose to eat and drink.
Shareholders’ Funds: Rs. 2,076 million
Borrowings: Rs. 290 million
VALUES
(Page 30)
• Innovation
• Integrity
MANUFACTURED CAPITAL • Excellence
• Caring
State-of-the-art manufacturing facilities through which
we manufacture our products. • Trust
4 Production Facilities
Property, Plant and Equipment: Rs. 1,546 million
(Page 33) STRATEGIC FOCUS AREAS BUSINESS ACTIVITIES
• Sustainable growth (page 26) • Procurement

INTELLECTUAL CAPITAL • Fulfilling the customer • Manufacturing and
promise (page 41) packaging
Represents our brands and extensive recipe library which
underpin our competitive edge as well as our strong R&D • Value chain development • Warehouse and
(page 41)
capabilities. distribution
(Page 35) • Empowered team (page 26)
• Managing customer
• Sustainable and socially relationships
responsible organisation
HUMAN CAPITAL (page 26) • Research and
Development
Our team of 530 employees who provide the competencies
and commitment to support the delivery of our strategic
objectives. (Page 37)
• Processed meat • Financial management
• Crumbed and formed meat • Strategic planning

SOCIAL AND RELATIONSHIP CAPITAL • People management
• Elephant House premium
The relationships we rely on to drive our value creation range • Supply chain management
and which provide our social license to operate.
• Information technology and
Distributors: +70 and Retail partners: +30,000 data analytics
Suppliers: +200
Communities in which we operate
PRODUCT LINES VALUE DRIVERS
(Page 41)
Underpinned by effective Corporate Governance (page 49) and

NATURAL CAPITAL Risk Management practices (page 70)
The natural resources we rely on to manufacture and

distribute our products and manage our operations.
Energy consumption: 26,207 GJ
Water consumption: 93,855 M3 Trends in operating Changes in customer
(Page 45) Macro-economic
landscape sophistication and
conditions
preference
16
OUTPUTS OUTCOMES
FINANCIAL CAPITAL
4,673 MT + Rs. 321 million in profit after tax (114% yoy)
Production Volume
+ Rs. 242 million dividend payout
+ Rs. 13 million paid as interest
+ Share price increased by 50% to RS. 162.50.
627 MT
Solid Waste Generated
MANUFACTURED CAPITAL
+ Rs. 90 million capital expenditure

27,219 M3
+ 5S and Kaizen implementation in Pannala factory
Effluents Discharged
4,106 tCO2e INTELLECTUAL CAPITAL
Carbon Footprint + 15 new product variants added

+ COVID-19 Safety Management System certification from SLSI
(Final audit was conducted in April 2021)
+ Rs. 130 million in brand building initiatives
HUMAN CAPITAL
+ Rs. 547 million in salaries and benefits

+ Rs. 2 million investment in training
+ Stringent health, safety and hygiene measures
- 86% workplace injury
+ 77% employee satisfaction rate
SOCIAL AND RELATIONSHIP CAPITAL
+ Ongoing investment in community projects

+ Rs. 244 million distributor earnings
+ Ensured uninterrupted availability of products to customers
+ Rs. 2,512 million payments to suppliers
NATURAL CAPITAL
- 4,106 tCO2e generated from operations

+ Zero environmental grievances
+ Fully compliant with all relevant environmental regulations
- 627 MT Waste generated
Increased prevalence Religious and
Supply chain - 27,219 M3 Effluents discharged
towards health and
implications cultural values
nutrition

OUR STRATEGY
The Group’s strategy formulation is informed by ongoing scanning of the operating environment and assessment of stakeholder
expectations, which in turn determine the Group’s material matters. While our broader strategic pillars remained unchanged during the
year, strategic focus areas were refined and adapted to address the opportunities and challenges presented by the pandemic.
Strategy Formulation at KFP
Assessment of the Operating Stakeholder Expectations Organisational Strengths and

Environment (Page 18) (Page 22) Weaknesses (Page 21)
Prioritisation and Assessment

of Impacts
Material Topics (Page 26)
Corporate Governance
Risk Management (Page 70) Our Strategy (Page 18)
(Page 49)
Economic Environment
Sri Lanka’s GDP contracted by 3.6% in 2020, as the inevitable economic
toll of the pandemic impacted business activity, aggregate demand and SRI LANKA-ECONOMIC GROWTH
investor sentiment. The economy showed signs of recovery by the third Rs. Mn %
quarter and despite a resurgence of infections in October 2020, the 6,000,000 5
economy grew by 1.3% in the fourth quarter as businesses demonstrated 4
5,000,000
agility in adapting to the new normal. 3
2
4,000,000
1
3,000,000 0
-1
2,000,000
-2
-3
1,000,000
-4
0 -5
2016 2017 2018 2019 2020
Agriculture
Industry
Services
GDP
Source: Central Bank of Sri Lanka
18
Inflation
Inflation was maintained within the 4% - 6% range reflecting subdued FOOD INFLATION: NCPI
demand and impacts on disposable income. The reduction of VAT and a
decrease in telecommunication and data services due to the reduction of %
the telecommunication levy in December 2019, resulted in core inflation 15
being moderate for most part of the year. Food inflation recorded a gradual
increase by mid-2020, prior to easing off by the end of the year. 12
May-20
Aug-20
Sep-20
Nov-20
Dec-20
Feb-21
Jun-20
Oct-20
Jan-21
Apr-20
Jul-20
Source: Central Bank of Sri Lanka
Interest Rates Exchange Rates

The Government adopted an accommodative monetary policy stance The country’s external sector faced considerable pressure
during the year, resulting in market interest rates recording a steady due to the sharp fall in tourism earnings, capital outflows
decline for most part of the year. Accordingly, deposit rates, yields on from the debt and equity markets and a decline in workers’
government securities in the primary and secondary markets and lending remittances in the first half of the year. As a result, the Sri
rates fell sharply by end-2020. Lankan Rupee also experienced a high level of volatility
and significant depreciation pressure. The Rupee fell
sharply in the first few months of 2021, closing at Rs.
200.30 by end-March, a 6% year-on-year decline.
Consumer Spending
Household consumption expenditure was inevitably impacted by the
HOUSEHOLD CONSUMPTION (Y-O-Y GROWTH)
conditions that prevailed and recorded a sharp decline in the second
quarter of 2020, in view of the lockdown and other restrictions on mobility. % y-o-y
Overall household consumption expenditure for the year recorded a 10
contraction of 3% in comparison to 2019. 5
-5
-10
-15
-20
-25
Q1 Q2 Q3 Q4
Source: Department of Census and Statistics

OUR STRATEGY
INDUSTRY ENVIRONMENT
The meat industry is an important part of the country’s livestock sub-sector, contributing 1% of total GDP in 2020. Chicken remains the
most consumed meat in the country, given its perception as a relatively healthy source of protein, widespread availability across the island
and religious and socio-cultural values which often discourage the consumption of beef and pork. Accordingly, the per capita availability of
chicken has recorded consistent growth in recent years, while growth in other meat categories has been somewhat subdued. Meanwhile,
the cost of production and retail prices have also recorded gradual increase in recent years and the historically highest price for chicken
was recorded in the year under review, driven by escalating costs of animal feed and other input materials.
PER CAPITA AVAILABILITY OF MEAT COST OF PRODUCTION AND RETAIL PRICES
Kg Rs/ Kg
12 600
10 480
8
360
6
240
4
120
2
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Chicken Mutton Retail price-chicken

Beef Pork Live weight price-chicken
Live weight price-pork
Source: Dept. of Animal Production and Health
Processed meat: In Sri Lanka, consumption of processed meat is largely limited to urban areas, although rising disposable incomes
and increasing customer sophistication have driven a gradual shift from fresh and frozen meat towards processed products. Supply is
dominated by a few mid to large sized manufacturers who have in recent years enhanced their quality assurance processes, strengthened
innovation capabilities and invested in brand building initiatives to drive increased penetration.
20
OPPORTUNITIES AND RISKS
INCREASING CUSTOMER DEMAND FOR CONVENIENCE INCREASING AWARENESS OF HEALTH RISKS

Consumers, particularly those in urban areas are increasingly As consumers increasingly become health conscious and aware of
demanding ready-to-eat and ready-to cook meat products, the health risks of food, organisations will be compelled to direct
given increasingly busy lifestyles and prevalence for convenience increased focus on nutrition and well-being. The rising prevalence
foods. This, together with the increase in disposable incomes and of non-communicable diseases as well as sedentary lifestyles have
consumer sophistication are likely to be a key factors in driving led to an increased emphasis on healthier diets and alternatives to
demand for processed meats and other convenience foods. traditional meat-based and processed meat products.
How we are responding How we are responding

• Expansion of our dry range (Ezy rice, Soya and Cans) • Portfolio diversification through launch of new
categories such as Soya and Ezy rice
• Ongoing focus on widening the product portfolio through
entry into new categories • Use of natural ingredients
ENVIRONMENTAL IMPLICATIONS OF MEAT PRODUCTION CHANGES IN CONSUMPTION PATTERNS AND

The meat production industry is an energy and water intensive PREFERENCES
sector, with a high carbon footprint and broad-based implications Globally, meat eaters are increasingly pursuing healthier alternatives
on biodiversity and land use. As demand for meat continues to such as plant-based protein options due to health, environmental
increase globally, the parallel increase in production could lead to factors and other values-based beliefs. While globally meat
significant environmental costs. Given the rise of the ethical and consumption is still on the rise, over the longer-term the increasing
environmentally conscious consumer over the long-term, this could popularity of trends such as veganism and vegetarianism could
impact the social and environmental sustainability of the sector. affect demand for meat and processed meat products.
How we are responding

How we are responding
• Strategic emphasis on driving down energy and water
• Launch of Soya and Rice range of products
consumption of our operations

STAKEHOLDER ENGAGEMENT
Our value transformation process is underpinned by our drive to create value for our diverse stakeholders. This shared value generation
necessitates a proactive and deep understanding of the issues that matter most to our stakeholders, thereby enabling the Group to
formulate strategy in a manner that effectively addresses these issues. When selecting which stakeholders to engage with, the Group
considers individuals, organisations, and communities which have the most significant influence over our operations and/ or could be
substantially impacted by our decisions. The results of the Group’s stakeholder engagement for 2020/21 is given below:
Stakeholder Group How We Engage Topics and Concerns Raised in 2020/21

CONSUMERS • Customer satisfaction surveys (periodic) • Product availability
Island wide network of discerning
• Customer hotline (continuous) • Quality
customers who consume our products.
• Social media engagement (continuous) • Taste
• Website • Convenience
• Marketing communications (continuous) • Value for money
• Mystery Shopper audits (periodic)
EMPLOYEES • Employee satisfaction surveys - Voice • Job security

Our team of 530 motivated and skilled of Employee and Great Place to Work
• Rewards and recognition
employees. (annual)
• Training and development
• Performance appraisals (annual)
• Safe working environment
• Work-life balance initiatives
• Opportunities for skill and career
• Open door communication policy
progression
(continuous)
• Freedom of association
• Digital platforms including staff intranet
(continuous)
SHAREHOLDERS • Annual General Meeting and publication • Commercial, social and environmental
John Keells Holdings: 89.95% of Annual Report (annually) sustainability
Other institutional investors: 4.88%
• Interim financial statements (quarterly) • Strategic alignment to operating
Public Shareholders: 5.17%
conditions
• Announcements to the Colombo Stock
Exchange (continuous basis) • Returns commensurate with the risks
undertaken
• Corporate website (continuous basis)
• Timely and transparent communication
• Press releases (continuous basis)
• Robust corporate governance practices
• One-to-one engagement (when
required)
22
Our Response Track Record of Value Creation
Through deploying increased resources to the general
trade and modern trade channels, we ensured product NEW PRODUCTS LAUNCHED
availability despite the challenges that prevailed. We also
realigned our portfolio to focus on convenience, nutrition
and longer-shelf life given the extended lockdowns and 2021
dramatic increase in work-from-home practices.

2020
0 3 6 9 12 15
No. of products
Products available through +30,000 outlets island-wide

Compliance with leading quality and food safety certifications
Foremost priority placed on ensuring the health and

SALARIES AND BENEFITS PAID
safety of employees through stringent measures while
maintaining ongoing engagement. Rs. Mn
600
500
400
300
200
100
0
2019 2020 2021
Remuneration per Employee: Rs.1.03 million (per annum)
We proactively and continuously assessed the impact of

SHAREHOLDER RETURNS
the market conditions on the Group’s performance and
liquidity profile. Rs. Mn %
350 16
300 14
12
250
10
200
8
150
6
100
4
50 2
0 0
2019 2020 2021
Profit after tax

Return on equity (%)

STAKEHOLDER ENGAGEMENT
Stakeholder Group How We Engage Topics and Concerns Raised in 2020/21

DISTRIBUTORS • Distributor Management and Sales • Opportunities for mutual growth
Islandwide network of over 70 distributors Force Automation (continuous)
• Continuous supply of products despite
who drive market access.
• Distributor conventions (annual) conditions that prevailed
• Audits and site visits (periodic) • Ease of transaction
• Trade monitoring surveys on freezer • Equitable terms and conditions

utilisation (periodic)
• Sales team engagement with retailers

on an on-going basis
SUPPLIERS • Site visits and audits (periodic) • Opportunities for mutual growth
We engage with over 200 suppliers through
• Supplier selection process (as required) • Responsible procurement practices
whom we procure pork, poultry, vegetables
and spices among others. • Ongoing dialogue through formal • Timely payments
meetings, telephone and electronic
• Equitable terms of trade
communication
• Support in obtaining clearance to
• Training programmes (ongoing)
operate during the pandemic
REGULATORS • On-site surveillance and factory visits • Compliance with relevant regulations
The Group’s key regulators are Department (periodic) and guidelines
of Inland Revenue, Central Environment
• Directives and circulars (continuous) • Payment of taxes in full and timely basis
Authority, Consumer Affairs Authority, Sri
Lanka Customs, Securities and Exchange • One-to-one engagement (when • Contributions towards community
Commission, Central Bank, Ministry of required) development
Health etc.
• Press releases (continuous) • Minimising adverse environmental
impacts
COMMUNITIES • Community engagement initiatives • Livelihood development

The communities in and around our (continuous)
• Meaningful CSR projects
operating locations.
• Public events (continuous)
• Creation of employment
• Social media interactions and press
• Minimising adverse environmental
releases (continuous)
impacts of operations
• CSR projects in partnership with John
Keells Foundation
24
Our Response Track Record of Value Creation
We further enhanced our distributor network during the Financial assistance granted to distributors
year and engaged proactively with them to increase
distribution frequency and efficiency. Investments in freezers: Rs. 14 million
We supported suppliers by obtaining curfew passes and PAYMENTS TO SUPPLIERS

other legal clearances to operate during the pandemic,
thereby ensuring continued value creation across our Rs. Mn
2,800
network.
2,600
We also facilitated early settlement of payables, thereby
allowing suppliers to better manage cashflows.
2,400
2,200
2,000
2020 2021
The Group was fully compliant with all relevant regulations

TAX PAYMENTS
during the year and continued to engage with regulators
and industry stakeholders to ensure continuity of Rs. Mn
1,000
operations.
800
600
400
200
0
2019 2020 2021
Despite the challenges that prevailed we continued to

CSR PAYMENTS
engage with communities, supporting their well-being
during the pandemic. Rs. Mn
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2019 2020 2021

MATERIAL MATTERS
Material matters represent the issues that could potentially have the most significant impact on our ability to create value and are a
key determinant in strategy formulation and resource allocation. As illustrated on pages 18 to 25, the process for determining material
issues follows ongoing assessment of the operating environment, stakeholder considerations and the Group’s inherent strengths and
weaknesses. The unprecedented operating conditions that prevailed during the year resulted in several changes to the Group’s material
matters as demonstrated below. We have also refined our list of material topics during the year to better reflect current dynamics and
provide improved clarity and readability.
The outcomes of the materiality assessment for 2020/21 are illustrated below:
High
15 13 12 1 4 7 6
Influence on Stakeholder Decisions
8 10
11
9 3 1
14 2 5
Low
Low Significance of Impacts High
Sustainable Empowered Quality and Channel and Supplier Sustainability

Growth Team Innovation Relationships
Sustainability Change in materiality Corresponding GRI topic Page reference for

compared to 2019/20 further information
(1) Employee health and safety  GRI 403: Occupational health and safety
(2) Efficiency and cost management 
(3) Macro-economic conditions and policy
New topic
developments
(4) Financial performance and stability Topics combined GRI 201: Economic Performance
(5) Market share -
(6) Responsible production and marketing Topics combined GRI 417: Marketing and labeling
(7) Superior quality - GRI 416: Customer health and safety
(8) Optimising distribution channels 
(9) Manufacturing capabilities -
(10) Innovation -
(11) Talent management GRI 401: Employment
Topics combined GRI 404: Training and education
GRI 402: Labour management relations
(12) Organisational culture and Topic broadened to cover GRI 307: Environmental Compliance
compliance compliance GRI 419: Socioeconomic compliance
(13) Supplier relationships - GRI 204: Procurement practices
(14) Managing environmental impacts GRI 301: Raw materials
GRI 302: Energy
Topics combined GRI 303: Water
GRI 305: Emissions
GRI 306: Waste & effluents
(15) Community engagement - GRI 413: Local communities
26
STRATEGIC RESPONSE
The operating conditions that prevailed during the year, compelled the organisation to revisit and refine its strategy to suit emerging
dynamics. The Group’s long-term strategy focuses on 5 key pillars and while these remained broadly unchanged, the strategic focus areas
were adapted to effectively address the risks and capitalise on the opportunities stemming from the pandemic. Our strategic response is
given below:
SUSTAINABLE INNOVATION AND SUSTAINABILITY

GROWTH QUALITY
EMPOWERED CHANNEL AND SUPPLIER

TEAM RELATIONSHIPS
Strategic Response to the Operating Conditions in 2020/21
Increased focus on retail Offered flexible working Realigned portfolio Enhanced distribution Ongoing efforts on
category. solutions and maintained through increased focus frequency, efficiency and driving resource
proactive engagement. on the dry channel. productivity. efficiency and minimise
adverse environmental
impacts.

DELIVERING OUR STRATEGY
STRATEGIC PROGRESS IN 2021
Sustainable Growth Empowered Team

Implications of COVID-19 • Drastic drop in volumes from the • Heightened health and safety risks,
HoReCa and hotel channel particularly factory-level employees
• Increased household consumption

of convenience products including
processed meats
Strategic focus areas in 2020/21 and • Increased penetration of the retail • Implementation of stringent health and
measures taken to ensure resilience category through directing focus on the safety mechanisms including regular
amid pandemic general and modern trade channels PCR testing and transport facilities
• Efficiency and cost rationalisation • Proactive engagement with trade

measures through 5S and Kaizen unions
implementation
• Continued training initiatives through
• Consumption building initiatives digital platforms
including advertising and promotions
Resources allocated • Incentive schemes for sales and • Investment in training: Rs. 2 million
distributor staff
KPIs • Remarkable performance of the retail • Employee satisfaction rate: 77%

sausage category which recorded a
• Employee retention: 88%
volume growth of 44%
• Training: 399 permanent employees
• 20% volume growth in meatballs
trained through 3,367 training hours
category
• Operating profit margin widened to 9%

(2020: 6%)
• Uninterrupted availability of products

Way forward As economic conditions gradually return We have embraced the new realities of the
to normalcy, we will drive several brand post-pandemic workplace and will continue
building initiatives to further strengthen our to focus on safety, productivity and
market position and drive penetration in the engagement to create a workplace in which
retail segment. employees can thrive.
28
Innovation and Quality Channel and Supplier Relationships Sustainability
• Increased focus on convenience and • Disruptions to distribution channels
ease of preparation during the lockdown
• Liquidity pressure faced by distributors
• Challenges faced in sourcing

ingredients both local and imported
• Expansion of the dry channel, including • Extension of credit across distribution • Formulation of environmental targets
launch of the Soya meat category channels to ensure commercial survival to drive sustained reductions in energy,
of distributor/ retail partners water and carbon footprint
• Launch of ‘Chunky Chicken’ and
‘Frankie Kids range’ in the processed • Efforts to increase daily outlet • Improve monitoring and visibility of
meat category productivity and frequency of electricity consumption through sub-
distribution metering
• Continued compliance with stringent
quality and food safety standards • Launch of Surge - the Group’s new • Responsible disposable of solid waste
distribution management system and effluents
• Introduced two new variants under the
dry range (Dhaiya rice and Chicken • Continued investment in deploying
rice) freezers
• Increased focus on local suppliers
• Looking for alternative materials

without compromising the quality of the
products
• Investment in Research and • Credit extended to distributors: Rs. • Investment in environmental initiatives:
Development: Rs. 2.7 million 175 million Rs. 18.8 million
• Payments to Supplier: Rs. 2,512 million

• Maintained market leadership status • 9 supplier audits conducted during the • 11% reduction in energy consumption
year.
• 16% increase in water consumption
• 4.2% reduction in Green House Gas

(GHG) emissions
• 27% of water recycled
Continuous investment in research and We will continue to work with supply chain Having set 2025 targets to drive the
development. and distribution partners in driving our reduction of energy, water and carbon
growth agenda and pursuing opportunities footprint, we will strive to achieve annual
for mutual expansion. reductions through systematic and proactive
efforts.

FINANCIAL CAPITAL
The Group’s financial capital is key to delivering its stakeholder outcomes as the
achievement of its strategic objectives is determined by the Group’s ability to
deploy funds in an effective and timely manner.
FINANCIAL CAPITAL OUTPUTS/OUTCOMES VALUE ADDING CAPITAL CONNECTIVITY

INPUTS 114% INITIATIVES & TRADE-OFFS
Equity: increase in Profit After Tax • Relentless focus on The Group curtailed its
Rs. 2,076 million cost efficiencies capital expenditure in a bid
Doubling of Earnings to preserve liquidity amid the
• Increased focus on
Borrowings: per Share to trying operating conditions.
retail channels
Rs. 290 million Rs. 12.59 • Effective working Intellectual capital
capital management strengthened through smart
cost management and new
ways of working
KFP delivered a year of commendable growth, demonstrating

agility and resilience in a challenging year to record 114% increase REVENUE AND GROWTH
in profit after tax. Performance during the year was upheld by
Rs. Mn %
the Group’s strategic focus on driving volume growth across its
4,000 14
general trade and modern trade channels, relentless focus on
3,500 12
maintaining profitable product mix, operating efficiencies, stringent
cost control and effective working capital management. 3,000
10
2,500
REVENUE 8
2,000
Consolidated revenue recorded a growth of 2% to Rs. 3,651 million 6
1,500
during the year under review, a commendable achievement given
4
the extremely challenging operating environment that prevailed. 1,000
The expansion in revenue reflects the Group’s concerted efforts to 500 2
drive increased penetration in the in-home consumption, through
0 0
directing focus on the general and modern trade channels, 2017 2018 2019 2020 2021
which resultantly offset the sharp decline in the HoReCa and
hotel channel. The retail sausage category recorded phenomenal Revenue
growth with volumes increasing by 44% to deliver record revenue. Revenue growth (%)
Meatballs volumes also recorded a healthy growth of 20% during
the year. Volume growth in retail category was also supported by
consumption building initiatives including proactive advertising,
promotions and other customer engagement initiatives.
30
GROSS PROFIT to Rs. 329 million. Operating profitability in the processed meat
The Group’s gross profit increased despite the escalation of raw category achieved record growth during the year with the overall
material prices and accelerated at a faster rate of 4% to operating profit margin widened to 9% from 6% the year before
Rs. 1,005 million reflecting higher profit margins stemming from and was a key driver of the Group’s profitability during the year.
the general and modern trade channels. This improvement
was supported primarily by retail sausage and meatballs in the COST MANAGEMENT
processed meat category, where we placed relentless focus
on managing costs and preserving profitability. Resultantly, the
Group’s gross profit margin widened from 27% in 2019/20 to
Other operating
28% during the year under review. expenses
OPERATING PROFIT
A key achievement during the year was the Group’s ability drive Administrative
productivity and efficiency improvements, which in turn led to expenses
considerable cost savings. Despite the additional expenditure

arising from the need for more stringent health and safety Selling and
protocols, the Group’s administrative expenses remained relatively distribution
expenses
unchanged while other operating expenses decreased by 38%
during the year, attesting to the success of many efficiency 0 100 200 300 400 500
Rs. Mn
initiatives such as Kaizen and 5S and also due to the removal of 2020
Nation Building Tax which was applicable in 2019/20. Meanwhile, 2021
the Group’s selling and distribution expenses also reduced by
11% as we sought to optimise resources and drive more focused,
impactful engagements. PRE-AND POST-TAX PROFIT
Consolidated finance costs increased marginally to Rs. 3 million
PROFIT AND PROFITABILITY TREND during the year. Meanwhile, the Group’s pre-tax profit recorded a
commendable growth of 59% to Rs. 326 million during the year.
Rs. Mn %
Value created to the government in the form of income taxes
400 14
amounted to Rs. 5 million during the year, which in turn resulted
350 12 in the Group generating a profit-after-tax of Rs. 321 million, an
300
10
increase of 114% compared to the previous year.
250
8 FINANCIAL POSITION AND STABILITY
200
6 Assets
150 Total assets expanded by 6% to Rs. 3 billion by end-March
4
100 2021, reflecting increased working capital requirements as the
50 2 Group made conscious efforts to build up buffer stocks given the
conditions that prevailed and the need to ensure adequacy of
0 0
2017 2018 2019 2020 2021 stocks in the event that manufacturing was halted. Accordingly,
investment in working capital increased by 27% to Rs. 596
Operating profit million. Resultantly, the asset composition also tilted towards
Operating profit margin (%) current assets, accounting for 40% of total assets, compared to
35% the previous year. The Group did not engage in any major
capital expenditure given the conditions that prevailed during the
Cost management was also supported by line by line scrutiny of
year.
overheads, recruitment freeze and optimisation of human capital
resources. Overall, the Group’s overhead expenses recorded
a decline of 11%, resultantly the operating profit grew by 59%

FINANCIAL CAPITAL
and decreased further to 12% from 15% the year before. Total
ASSET COMPOSITION
current liabilities increased by 18% during the year, mainly due to
Rs. Mn an increase in trade and other payables as the Group negotiated
3,500 extended repayment terms with its suppliers.
3,000 CASHFLOW
2,500 The Group’s cashflow position strengthened during the year,
reflecting improved operating cashflows and a decline in capital
2,000
expenditure. Net cash inflow from operations increased by 28%
1,500 in view of the overall improvement in performance while net
outflow from investing activities fell to Rs. 90 million from Rs. 427
1,000
million the previous year. Net cash outflow from financing activities
500 increased to Rs. 217 million, due to dividend payments during
0
the year. Resultantly, the Group’s net change in cash and cash
2019 2020 2021 equivalents amounted to a positive Rs. 5 million during the year
(2019/20: outflow of Rs. 196 million)
PPE and right of use assets Current assets
Intangible assets Cash in hand and at bank
Other non-current assets Other current assets SHAREHOLDER VALUE
Despite the extremely challenging industry conditions that
prevailed, the Group continued to deliver on its shareholder
Liabilities
commitments. Earnings per share nearly doubled to Rs. 12.59
The Group’s funding profile remains healthy with equity funding
while dividend per share amounted to Rs. 7.00. Continued asset
more than 66% of the Group’s total assets. Equity increased by
expansion resulted in the Group’s net asset per share increasing
11% to Rs. 2,076 million during the year supported by increased
by 11% to Rs. 81.43 by end-March 2021.
profit generation and retention. The Group reduced its exposure to
borrowings during the year, through paring down long-term debt
which led to a 15% reduction in borrowings to Rs. 290 million. The Shareholder Return Metric 2021 2020 2019
Group’s gearing ratio (defined as debt/debt+equity) remains low Earnings per Share (Rs.) 12.59 5.89 10.48
Dividend per Share (Rs.) 7.00 6.00 8.00
CAPITAL AND LIABILITIES
Net Asset Value per Share 81.43 73.57 72.44
(Rs.)
Return on Equity (%) 16.24 8.07 14.87
23%
Closing Share Price (Rs.) 162.50 108.20 124.80
68%
9%
Equity
Borrowings
Other liabilities
32
As a manufacturing organisation, the Group’s production facilities, machinery,

equipment and other physical infrastructure are vital for the continued delivery
of high-quality, innovative products in an efficient manner. Manufactured capital
represents 50% of the Group’s total assets.
MANUFACTURED OUTPUTS/OUTCOMES VALUE ADDING CAPITAL CONNECTIVITY &

CAPITAL INPUTS 4% volume growth in INITIATIVES TRADE-OFFS
4 manufacturing facilities total sausage category CAPEX: The quality of our manufactured
Rs. 90 million capital directly correlates to product
Quality Assurance quality and customer satisfaction
• Increased focus on
laboratory
efficiency through Strengthen intellectual capital
R&D laboratory 5S and Kaizen through efficiency focus
implementation
Adverse environmental implications
• Commenced in-house through consumption of natural
chicken deboning resources, wastage and emissions
operation
OUR MANUFACTURED CAPITAL

The Group operates state-of-the-art manufacturing facilities, which are designed to ensure compliance with a range of quality and food
safety standards and certifications. We have continued to invest in upgrading our manufacturing technology, R&D capabilities and quality
infrastructure. A brief overview of the Group’s Manufactured Capital is presented below:
Location Contribution to Value Creation Certifications/ Standards

Pannala • Manufacture of a range of chicken and fish- • ISO 22000:2018 - Food Safety Management
based products
• ISO 9001:2015 - Quality Management
• Annual capacity of 5,400 MT
• ISO 45001:2018 - Occupational Health and Safety
Pannala Rice • Manufacture of Ezy rice
• Halal certified as per the Halal Accreditation Council
Plant
• Annual capacity of 540 MT
Ja-Ela: Plant 1 • Crumbed range of products including formed

meat, Chinese rolls, toppings and sauces

Location Contribution to Value Creation Certifications/ Standards

Ja-Ela: Plant 2 • Manufacture of the Elephant House range of • ISO 22000:2018 - Food Safety Management
processed meats and value-added raw meats
• ISO 45001:2018 - Occupational Health and safety
Quality • Ensures that all production batches are • ISO 22000:2018 - Food Safety Management
Assurance tested in line with the requirements of the
Laboratory certifications.
R&D Lab • R&D laboratory equipped with state-of-the-art • ISO 22000:2018 - Food Safety Management
(Test Kitchen) food technology which is used to formulate,
test and analyse recipes.
INVESTMENTS IN MANUFACTURED CAPITAL OPERATIONAL EXCELLENCE

Given the conditions that prevailed during the year, the Group In recent years, the Group has placed strategic focus on driving
deferred major capital expansion plans. Total value addition to operational efficiencies and productivity improvements through
manufactured capital in the form of capex amounted to Rs. 90 the implementation of 5S and Kaizen systems. This has led to
million and consisted of the following: considerable improvements in safety and quality, enhanced
productivity of the manufacturing line and generated sustainable
• New molding machine enabling the production of a 70gm
improvements in cost management. Ongoing awareness and
pack for processed meat, which is also expected to result in a
training engagements associated with these programs have also
30% reduction in waste.
contributed towards nurturing a safety conscious, quality-oriented
• Investment in a peeler machine for the Frankie Kids range of culture, in which employee suggestions for improvement are given
products. due consideration.
• Investment in a chicken deboning operation (Rs. 12 million).
• Investments in efficiency Improvement projects (Rs. 10 million). PROPERTY PLANT AND EQUIPMENT
• Investments in Freezers (Rs. 14 million).
Rs. Mn
800
CAPITAL EXPENDITURE
700
Rs. Mn
600
60
500
50 400
40 300
200
30
100
20 0
Land and
building
Plant and
machinery
Furniture,
fittings
and equipment
Freezers
Other
assets
10
0
Land and
building
Plant and
machinery
Furniture,
fittings
and equipment
Freezers
Other
assets
34
INTELLECTUAL CAPITAL
KFP’s Intellectual Capital is key to retaining its competitive edge which is the
foundation of the Group’s strengths in research and development, innovation and
quality. Intellectual capital is nurtured through a culture of learning and knowledge
sharing, which has enabled the Group to build a unique base of tacit knowledge.
INTELLECTUAL OUTPUTS/OUTCOMES VALUE ADDING CAPITAL CONNECTIVITY &

CAPITAL INPUTS 15 new products INITIATIVES TRADE-OFFS
R&D capabilities launched Investment in R&D: A quality and safety conscious
Standards, systems and Rs. 3 million culture has allowed the Group
processes, Brand Retention of market to strengthen its brand and drive
leadership position Culture of learning and customer loyalty.
knowledge sharing
Compliance with standards,
systems and processes has
nurtured a culture of quality and
safety, thereby enhancing our
human capital.
RECIPE LIBRARY
Our library of over 500 recipes has been key in building brand loyalty and inspiring confidence among customers. As the pioneer in the
industry, our recipe library also provides an effective launch pad for new products, facilitating better market reception. The Group’s best-
in-class R&D capabilities and strategic emphasis on product quality and innovation have driven the continued expansion of the Group’s
recipe library, which forms a significant portion of KFP’s intangible value.
Recipes in Recipes in the

+200 processed meat +200 crumbed and +50 Recipes in the
dry range
range formed meat range
During the year under review, the Group formulated 50 new recipes of which 20 were tested and 10 were introduced to the market.

INTELLECTUAL CAPITAL
RESEARCH AND DEVELOPMENT (R&D) CAPABILITIES

At KFP driving innovation is an organisation-wide process which combines inputs from the Group’s marketing, quality assurance, R&D
and finance teams. Research capabilities are supported by best-in-class technology, infrastructure and a highly skilled research team
which have enabled the Group to consistently introduce innovative and exciting products which cater to the rapidly changing needs of
our customers. The Group’s quality assurance laboratory and test kitchen also enable stringent quality assurance, thereby ensuring the
highest standards of product quality, health and safety as well as compliance to regulatory requirements. Our track record of innovation is
presented below:
FRANKIE KIDS RANGE DHAIYA & CHICKEN RICE
CHUNKY CHICKEN SOYA RAW CHICKEN
The Group’s R&D efforts are designed to cater to emerging STANDARDS, SYSTEMS AND PROCESSES
market dynamics, and the conditions that prevailed during the The systems and certifications obtained by the Group have
year necessitated increased focus on convenience, longer shelf enabled it to strengthen its internal processes, thereby ensuring
life and ease of preparation. Accordingly, we directed increased quality, safety and high standards of product responsibility. The
focus on the Group’s dry range, testing 06 new products and Group has also implemented Kaizen and 5S in its manufacturing
launching the soya range during the year. facilities, which in turn have driven the creation of a safety,
quality and productivity conscious organisational culture.
This is underpinned by the Group’s internal policy framework,
which provides a solid foundation for ensuring robust systems,
Rs.3 20 procedures and processes.
million
BRAND
The group has three main brands “Krest”, “KeellsKrest” and
Investment in R&D New products tested
“Elephant House”. The Group’s premium products are sold
under the Elephant House brand- a much-loved, household
brand which frequently ranks among the country’s top consumer
NEW PRODUCTS LAUNCHED
brands. While the ownership of the brand lies with the Group’s
• Chunky Chicken • Frankie Kids Range sister company, Ceylon Cold Stores PLC, KFP benefits from the
• Soya Range • Dhaiya & Chicken Rice brand loyalty and attributes of quality and trust which are often
• Raw Chicken associated with Elephant House. During the year, Elephant House
was ranked as the country’s 15th most valuable brand by Brand
Finance, with an estimated brand value of Rs. 11 billion.
Assurance on ability to control food Assurance on processes implemented Product quality and safety Product quality and
safety hazards, ensuring suitability for ensuring the highest standard of standards for comminuted safety standards for
for human consumption quality across all operational aspects meat products ham products
ISO 22000:2018 ISO 9001:2015 SLS 1218 SLS 1146
KFP Quality Policy

KFP Food Safety Policy
Quality, safety, convenience and nutrition
THE WAY Manufacturing facilities
Timely delivery
WE WORK Food safety practices
Continuous improvement
Employee training compliance
Competency development
Food Act No. 26 of 1980 Consumer Affairs Authority Act
36
HUMAN CAPITAL
Our people are a key source of competitive edge, playing a vital role in the
Group’s innovation, understanding customers and delivering our strategic
aspirations. We in turn, offer a dynamic and rewarding environment in which
employees can thrive.
HUMAN CAPITAL OUTPUTS/ OUTCOMES VALUE ADDING CAPITAL CONNECTIVITY &

INPUTS 77% employee INITIATIVES TRADE-OFFS
530 employees satisfaction rate Ensuring employee Investments in Personal Protective
health and safety Equipment, awareness sessions and
other health and hygiene measures had
15% female 111% increase in net Ongoing investment in
an adverse impact on financial capital,
representation rate profit per employee training and development
although supporting human capital.
Measuring employee
Average age of
satisfaction Ongoing investments in training have
37 years affected financial capital over the short-
Engagement through
term. However this has supported the
digital platforms
nurturing of organisational capital.
Strategic Relevance
• Quality and Innovation • Channel & Supplier Relationships • Sustainability
PEOPLE MANAGEMENT AT KFP

Our approach to managing our human capital is aligned to the overall aspirations relating to people, of our parent entity John Keells
Holdings, which is among the country’s most preferred employers. Clearly defined governance structures and robust policy frameworks
ensure the consistent and equitable treatment of all employees. The Group also strives to nurture an agile and conducive organisational
culture, which served it well in the unprecedented conditions that prevailed during the year. Key elements of our employee value proposition
include attractive reward schemes, opportunities for career and skill development and a safe working environment among others.
Our HR Policy Framework
Attracting the right talent Developing talent pipelines A fair and inclusive culture
• Recruitment policy • Training and development policy • Equal opportunity policy
• Non-discrimination policy

HUMAN CAPITAL
TEAM KFP
Our talent pool comprises 399 permanent employees and 131 contract staff, who operate in 4 production facilities. The team is diverse in
its gender and age representation, with a female representation rate of 15% and an average age of 37 years. Despite the conditions that
prevailed during the year, the Group retained all its permanent staff, while recruitment was limited. Retention levels remained healthy, with
an overall employee retention rate of 88%. The profile of our team is presented below:
EMPLOYEES BY CATEGORY AND GENDER EMPLOYEES BY CONTRACT AND GENDER

%
Nos.
Contract
Personnel
64
Non-Executive
18
Staff
Contract
Permanent
Executive
Staff
381 67
Managers
and Above
0 20 40 60 80 100
Male Male
Female
Female
Team Movements
New Recruits by Age New Recruits by Gender Turnover by Age Turnover by Gender
18 to 30 years 46 Male 64 18 to 30 years 24 Male 52
30-55 years 23 Female 5 30-55 years 31 Female 3
Above 56 years 0 Above 56 years 0
Total 69 Total 69 Total 55 Total 55
New Recruits by Region Turnover by Region

Western 22 Western 23
Central 12 Central 12
Southern 10 Southern 9
Northern 0 Northern 0
Eastern 2 Eastern 3
North Central 4 North Central 6
North Western 9 North Western 1
Sabaragamuwa 4 Sabaragamuwa 1
Uva 6 Uva 0
Total 69 Total 55
38
PRIORITISING HEALTH REMUNERATION
The pandemic conditions that prevailed during the year necessitated
strategic emphasis on implementing stringent health and hygiene Rs. Mn Rs. Mn per Employee
measures to ensure the safety of our employees. In minimising the 600 1.6
risk of cross infection, KFP introduced work-from-home facilities and 1.4
500
job rostering for all executive employees. Stringent guidelines were
1.2
introduced in the manufacturing facilities including random testing, 400
1.0
temperature monitoring, contact tracing and collecting information
of infected persons, safety audits and awareness sessions, among 300 0.8
others. We also provided transport facilities for employees, thereby 0.6
200
minimising their exposure to public transport. It is noteworthy that
0.4
despite the diagnosis of several COVID-19 infected employees in 100
0.2
the factory, there were zero infections among first level contacts,
attesting to the stringency of the procedures implemented. 0 0.0
2017 2018 2019 2020 2021
The Group also successfully obtained the ISO 45000:2018 -

Total remuneration
Occupational Health and Safety Management System during the
Remuneration per employee
year, further strengthening its health and safety framework.
During the year, total remuneration paid to employees declined by

2021 2020
1% with the previous year of Rs. 551 million, while remuneration
Total number of injuries 1 7 per employee amounted to Rs. 1.03 million. Salary cuts were
Injury rate 0 0 imposed on executive and above employees, in the immediate
aftermath of the pandemic outbreak. Subsequently however,
Lost days 2 28
bonuses and increments were provided despite the challenges
that prevailed.
REWARDS AND RECOGNITION
The Group’s rewards and remuneration structures are aligned to
Employee recognition: The BRAVO reward scheme is an
that of its parent entity and they aim to attract and retain high-
initiative of the John Keells Group which aims to recognise high-
performing individuals and nurture a performance-driven culture.
performing employees who contribute towards the achievements
All permanent employees’ remuneration comprises both fixed
of the Group’s strategic agenda. During the year, we expanded
and performance-based elements, and the latter is determined
the scope of the awards to reflect commendable behaviour
following a performance appraisal. Meanwhile, the sales team
in the time of crisis and 11 employees were awarded BRAVO
receives a monthly performance incentive which is linked to
certificates.
pre-determined targets. Other benefits provided to permanent
employees are listed below:
Retirement Benefits Insurance Allowances/ Incentives Other
Medical insurance for

Festival advances
Contributions of 12% both inpatient and OPD
Productivity and
and 3% to EPF and ETF
attendance incentives
respectively
Workmen’s
compensation for Company products at
serious injury (non- discounted prices
Retirement gratuity for executive)
employees who have
Special allowances
served more than 5 Personal accident cover Free transportation for
years for executive employees factory staff

HUMAN CAPITAL
ENGAGEMENT Training Program No. of

The conditions that prevailed during the year compelled the Participants
organisation to curtail its face-to-face engagement activities,
General training for factory employees on fire
which were subsequently shifted to digital platforms. In addition
safety, technical skills, health and hygiene among 188
to the engagement mechanisms listed on pages 22 to 23 of this
others which are prerequisites in obtaining
Report, we carried out the following initiatives online to maintain
certain ISO and SLSI Certifications
employee morale and team spirit.
Competency training by John Keells Group HR 52
• Art competition for employees and children. Coaching and motivational sessions for sales force 14
Field coaching for sales staff 65
• Keells Food Got Talent: A virtual talent show was launched
during the year, encouraging employees and their families to TRAINING RECORD FOR 2020/21
submit videos of themselves demonstrating any form of talent.
TRAINING RECORD
Winners will be judged by an acclaimed actor and announced
in the ensuing months. Rs. Mn Hrs.
12 10,000
• Employee satisfaction survey.
10
8,000
QUARTERLY SATISFACTION SURVEY 8
The Group conducts a bi-annual employee satisfaction 6,000
survey covering 100% of employees of executive carder. Key 6
criteria considered include, 4,000
4
• Work environment
2,000
2
• Rewards and recognition
• Opportunities for training 0 0
2017 2018 2019 2020 2021
77% Employee Satisfaction Rate Investment in training Training hours
Average Training Hours per Head

Meanwhile, KFP participated in the Great Place to Work Survey
conducted last year, recording an overall satisfaction score of By Category By Gender
68% and achieving significant improvements across all indicators. Managers and Above 14.5 Male 8.4
Executive Staff 12.4 Female 8.4
TRAINING AND DEVELOPMENT Non-Executive Staff 6.7
The Group’s training proposition centres on equipping employees
with the skills required to drive its strategic ambitions while FREEDOM OF ASSOCIATION
addressing competency gaps. Training needs are identified We recognise our employees’ right for association and collective
through the annual performance appraisal and are addressed bargaining and 34% of our total employees are represented by
through a range of internal, external and on-the-job training a trade union. Relations with the trade union are cordial and
opportunities. During the year under review, raising awareness on proactive, and during the year we collaborated closely with the
health and safety issues was a strategic imperative and the Group union in formulating work practices and implementing measures
conducted numerous programs through both physical and virtual to ensure employee safety.
platforms. Other training initiatives carried out during the year
include: EMPLOYEE PRODUCTIVITY
While factory level productivity is measured through production-
related metrics, the Group’s overall employee productivity is
assessed through revenue and net profit per employee. Despite
the adverse market conditions that prevailed, the Group’s
relentless focus on operational efficiencies and cost management
resulted in an improvement in productivity with net profit per
employee increasing by 111% during the year.
40
The relationships we have nurtured with our diverse stakeholders including

customers, channel partners, suppliers and communities provide us our social
license to operate, facilitating shared value creation and opportunities for mutual
growth.
SOCIAL & OUTPUTS/ OUTCOMES VALUE ADDING CAPITAL CONNECTIVITY &

RELATIONSHIP Continued sales INITIATIVES TRADE-OFFS
CAPITAL INPUTS generation and retention • Strengthening retail While adversely affecting financial
Islandwide network of of market share category capital, our investments in skill and
customers capacity building of business partners
• Ongoing investment in have contributed towards enhancing
Payments to Suppliers:
+70 distributors and Rs. 2,512 million
supplier and channel S&R capital
partner development
+30,000 retail outlets The intellectual capital nurtured
Distributor Incentives: • Continued compliance through our standards and
+200 suppliers with quality certifications have supported S&R
Rs. 244 million certifications capital through better customer
Communities in which
we operate satisfaction and loyalty
CUSTOMER VALUE
Our customer base comprises individuals and families as well as hotels, restaurants and catering establishments. Our value proposition to
customers centres on key attributes of quality, trust, innovation and convenience and is founded on the Group’s Food Safety and Quality
Policies which set out the standards that underpin our production and delivery.
Delivering Our Customer Value Proposition in 2020/21

INNOVATION QUALITY AND TRUST
Our best-in-class R&D capabilities and unique base of tacit The Group’s internal policies on food safety and quality (described
knowledge have enabled the Group to persistently innovate and below), as well as continued compliance with a range of
deliver products which cater to the changing and diverse needs of certifications provide assurance to customers and other third
our discerning customers. parties on the robust processes, we have in place to ensure the
highest standard of quality.
Progress in 2020/21
• Launch of the ‘Chunky Chicken’ and ‘Frankie Kids’ range of Progress in 2020/21
processed meat. • Continued compliance with ISO 22000:2018, ISO 9001:2015,
• The ‘Chunky Chicken’ proposition aims to provide customers Halal certification, GMP and HACCP
with a similar consumption experience to that of a brockwurst,
at a more affordable price.
• Entry into the soya meat category

Delivering Our Customer Value Proposition in 2020/21

AVAILABILITY RESPONSIBLE MARKETING/LABELLING
Product availability is ensured through an islandwide network of Our product marketing and labelling is regulated by the Food
over 70 distributors and over 30,000 retail outlets. A Distributor Act No.26 of 1980, Food (labelling and advertising) Regulations
Management System called “Surge” which is in place to monitor the 2005 and the Consumer Affairs Authority Act No.9 of 2003. Our
sales redistribution provides access to real-time data on sales, stock marketing communications are also guided by the ICC Code
availability and ordering, thereby minimising the risk of stock-outs of Advertising and Marketing Communications-a self-regulatory
across our network. framework which promotes high standards of ethics in advertising.
Progress in 2020/21 Our product labels include information pertaining to the product, date
• Increased focus on general trade and modern trade channels, of manufacture, expiry date, weight and ingredients, among others.
enabling better efficiencies in distribution, thereby enhancing
availability. During the year, there were no instances of non-compliance
• The Group also launched Meat House-an online platform to pertaining to any regulations/ voluntary codes on product and
directly engage and transact with customers. service labelling and marketing communications among others.
Listening to our customers: Customer satisfaction is assessed year, we further expanded our reach with the addition of 5 new
through satisfaction surveys, social media interaction, mystery distributor partners and +500 new retail outlets to our network,
shopper audits and the customer hotline among others. which now covers approximately 95% of the country’s districts.
CHANNEL PARTNERS 2020/21

Our network of distributors and retail outlets are a critical part Western 34
of our value chain, facilitating connectivity to the customer and South 3
ensuring product accessibility across our network. With the Sabaragamuwa 7
HoReCa and hotel channel significantly impacted by the sharp Uva 1
downturn in tourism and physical distancing measures, the Group East 2
increased focus on the General trade and Modern trade channels, North 5
deploying additional resources to drive volumes. North Central 5
North Western 7
Over the years, we have nurtured mutually-value adding
Central 8
relationships with our channel partners, offering a holistic value
Total 72
proposition focusing on their commercial sustainability. During the
Distributor Value Creation in 2020/21
The Distributor Management Software “Surge” provides access to deep insights on market behaviour
Sharing Market
including demand trends, availability and sales information. Access to these insights allow distributors to
Insights forecast cash flows more effectively and optimise resource allocation to maximise returns.
KFP conducts audits to ensure that distributors comply with the criteria and
Distributor Screening 01 requirements of the distributor policy and process guideline. This encourages
and Audits Audit distributors to adopt best practices, which in turn would drive improved
profitability and ensure long-term commercial sustainability.
02 We also conduct capacity building workshops for distributors and retailers on

Education and food safety, hygiene and environmental considerations with the aim of enhancing
Education
Capacity Building their business management skills and operational capabilities.
Programs
We provide infrastructure such as freezers and cold chain temperature loggers to

Sharing Market Rs.14 million ensure that appropriate temperatures are maintained throughout the distribution
Insights Investment process.
42
Given the conditions that prevailed during the year, the Group VALUE CREATION TO DISTRIBUTORS
focused on supporting its distributors through extending credit,
sharing market insights, paying distributor allowances and %
enhancing incentive schemes, which in turn allowed the Group to 1%
record strong growth and wider profit margins- particularly in the 16%
processed meat category.
4%
DISTRIBUTOR EARNINGS
Rs. Mn No. of Distributors

300 80 79%
70
250
60
200
50 Distributor earnings Training and development
150 40 Business promotions Infrastructure investments
30
100
20 farmers and out-growers. Nearly 81% of the Group’s inputs
50
10 materials are sourced locally.
0 0
2017 2018 2019 2020 2021 Supplier screening and audits: Stringent guidelines and
Standard Operating Procedures (SOPs) as well as certification
No. of distributors requirements ensure that suppliers comply with the highest
Distributor earnings standards of quality. In addition to product specifications
and quality, our supplier screening criteria includes social
and environmental factors, which allow KFP to propagate its
SUPPLIERS
sustainability aspirations across a broader network. Meanwhile,
The Group injects value across its supply chain through procuring
supplier audits are conducted regularly in order to ensure
materials from more than 200 out-growers and other suppliers.
compliance with all relevant criteria and to provide an opportunity
As a sizable manufacturer, we are cognizant of the role we can
for the Group to suggest continuous improvements. The
play in supporting the development of small and medium scaled
assessment criteria includes policies on child labour and forced
suppliers through consistent demand, fair pricing and capacity
labour and during the year under review, we found zero instances
building opportunities. We adopt a 2-tiered structure for supply
of suppliers at significant risk of employing child and/or forced
chain management, with the Tier 1 represented by corporates
labour. During the year we screened 6 new suppliers and
and large-scale farmers and Tier II consisting of small-scale
conducted 9 audits for existing suppliers.
Supply Chain
19 pork suppliers and 9 poultry suppliers
1 large-scale vegetable supplier
+8 Spice suppliers
Packing material suppliers

Supplier Value Creation in 2020/21
Product Volume Procured and Payments Supplier Support in 2020/21 Certifications Required/
Management Frameworks
Pork Rs. 219 million for 393 MT Technical support including facilitating Standard operating procedure
engagement with veterinarians.
Poultry Rs. 629 million for 2,113 MT Audits are conducted at least once in ISO 22000 ISO 9000 and Halal
6 months. Due to the sharp reduction Certification
in hotel waste, poultry farmers faced
challenges in sourcing feed, which we
addressed through facilitating alternative
avenues to obtain feed, such as rice mills.
Vegetables Rs. 36 million for 216 MT Standard operating procedure
Spices Rs. 84 million for 112 MT
In addition to the above, the Group supported the continuity of in close proximity to the KFP factory. This contribution is expected
suppliers’ operations during the lockdown through engaging to have benefited over 150 front-line healthcare sector workers
with authorities and obtaining licenses, distribution of Personal including staff in the Makandura hospital and Seeduva hospitals,
Protective Equipment (PPE) and providing guidance on health and Ja-ela and Pannala MOH Office staff as well as police station
hygiene standards in partnership with the Department of Animal staff.
Health and Production.
Waste management project: Conducted as an ongoing project,
COMMUNITY KFP continued to support the Makandura Vidyayathana Vidyalaya
Given the market conditions that prevailed during the year and and Nalawalana Kanishta Vidyalaya in Gonawila, which are in
restrictions on social gatherings, the Group was compelled to close proximity to the factory, by establishing and maintaining
curtail its community engagement activities. We instead focused waste management systems. In addition to its environmental
on supporting our communities to combat the pandemic, and benefit, this initiative has raised awareness among students on
distributed PPE to healthcare personnel in Makandura Hospital the responsible disposal of waste.
and Medical Officers of Health (MOH) Office in Pannala- which are
44
NATURAL CAPITAL
As a manufacturing organisation, we remain acutely aware of our environmental

impacts and are deeply committed to reducing the adverse consequences of our
operations in a strategic and holistic manner. Our efforts have focused on reducing
our energy, water consumption and our carbon footprint as well as responsibly
managing waste and effluents generated from our operations.
NATURAL CAPITAL OUTPUTS/ OUTCOMES VALUE ADDING CAPITAL CONNECTIVITY &

INPUTS Energy intensity INITIATIVES TRADE-OFFS
Target setting and action plan to
Energy consumption: decreased by 9% • Formulation of
environmental targets reduce the environmental footprint,
26,207 GJ Water intensity increased for 2025 will nurture an eco-conscious culture
over the medium-term.
by 19% • Enhanced energy
Water consumption:
Carbon intensity reduction monitoring with the Investments in renewable energy will
93,855 M3 installation of sub- entail an erosion of financial capital
of 2%
Renewable input meters over the short-term, although they will
materials including help in preserving natural capital and
vegetables and spices lead to cost savings over the medium
to long-term.
MANAGING OUR ENVIRONMENTAL IMPACTS

KFP’s approach to environmental management is aligned to its parent entity, John Keells Holdings and is clearly articulated and actioned
through an approved policy framework, defined processes and procedures and regular reporting to the Senior Management and Board of
Directors. During the year under review, KFP along with other entities in the JKH Group, committed towards driving sustained reductions
in its environmental footprint by 2025 through proactive efforts to reduce energy and water consumption and Green House Gas (GHG)
emissions.
Environmental compliance: As a manufacturing organisation, we are governed by the requirements of the Central Environment Authority,
which also form the baseline in setting our internal standards. All our facilities have obtained and annually review the Environmental
Protection License, while compliance with all environmental regulations is ensured through internal audits and compliance reporting.
During the year under review, there were no instances of non-compliance with environmental regulations and/ or voluntary standards.

NATURAL CAPITAL
ste ent Co Mat

ns eri
Wa gem um al
na pti
Ma on Environmental Targets
for 2025
1.5%
Consumption
Management
Compliance with CEA Reduction in water consumption

Effluent
Water
regulations and internal SCRUM
standards PROCESS 1.5%
Reduction in energy consumption
1%
C Reduction in carbon footprint
Fo arbo y n
otp n erg tio
rin En mp
u
t ns
Co
Materials offered better visibility and granularity of energy consumption

Key materials input into our manufacturing process comprise information, thereby facilitating improved monitoring and decision
poultry, pork, vegetables, spices, other additives and packaging making.
materials. As described on page 44 of this Report, suppliers
are screened for environmental criteria while requirements to The Company energy consumption for the year under review
obtain certifications ensure that environmental consciousness is presented below; total energy consumption for the year
is propagated across our supply chain. The Group’s materials decreased by 11%, reflecting a decline in volumes in view of the
are primarily renewable in nature while we are exploring avenues prevalent market conditions. Energy intensity (defined as energy
to reduce polythene usage in our packing materials. Material consumption per operational intensity factor) also reduced by 9%
consumption during the year is given below: reflecting ongoing efforts to enhance energy efficiency.
Water
Material Type Weight (MT)
Given the critical importance of hygiene and cleanliness
Pork 393 associated with food processing, our water consumption is
Poultry 2,113 relatively high, stemming primarily from the cleaning of raw
materials, machines and ancillary equipment as well as cooling
Vegetables 216
and heating purposes. The Group relies on both ground water
Spices 112 and municipal line sources and usage is proactively monitored to
identify areas for increasing efficiency.
Energy
Our operations are relatively energy intensive, and the Company’s Effluents and Waste
primary energy sources are furnace oil, diesel, gas and electricity. Solid waste: The factories generate several types of solid waste
Energy is monitored consistently and concerted efforts are made from their operations and mechanisms are in place to ensure
to identify avenues for increasing energy efficiency. In line with their responsible disposal. We proactively seek to eliminate landfill
the Group’s aspiration to reduce energy consumption by 1.5% waste through recycling, re-use and driving increased efficiencies
by 2025, during the year under review we directed investments in material consumption. The waste disposable information for the
towards strengthening our energy monitoring mechanism by year is presented below:
installing 10 sub-metering units across all operations. This has
46
Plastic consumption: KFP has also committed to Plasti-Cycle,
Type of Waste Disposal Method Volume of Waste
the John Keells Group’s plastic recycling initiative, which aims to
(Tons)
drive significant reductions in plastic waste through widespread
Organic waste- Incinerated at the 412 recycling. The following measures have been adopted to reduce
Meat and Company’s own the use of polythene/plastics in business:
Vegetables incineration facility
• Adhere to zero waste day (every month).
Packaging Sent to 3rd party 18.5
waste- Paper and recyclers • Investment in a new molding machine to reduce the
Cardboard consumption of packing material of 70g pack of chicken
sausages.
Sediments Sent to 3rd party 196.9
recyclers Carbon Footprint
The implications of climate change have continued to intensify,
Effluents: In Ja-Ela, water discharge is tested to ensure with serious repercussions on communities and businesses across
compliance with mandated water quality requirements prior to the world. For KFP, the risks from climate change arise from
being sent to the sewerage lines for disposal. Meanwhile, at impacts on agricultural supply chains, which in turn can adversely
the Pannala facility, water discharge is treated at the Effluent affect the cost of raw materials. As a responsible corporate citizen,
Treatment Plant (ETP) and re-used for gardening and cleaning KFP is committed to driving sustained reductions in the carbon
purposes. During the year, 29% of water consumed was recycled footprint of its operations and has aligned with its parent entity in
and re-used. aspiring to cut the emission intensity by 1% by 2025. Ongoing
efforts to enhance energy efficiency and increase reliance on
Environmental Scorecard renewable energy through solar power generation are expected to
drive a gradual reduction of the emission intensity, given that 90%
Energy Consumption of the emissions stem from electricity.
2021 2020 Change
WATER
Furnace Oil (Liters) 176,561 241,299 (27%)
Diesel (Liters) 17,808 65,030 (73%) M3 M3/MT
100,000 25
Electricity (kwh) 5,019,233 5,163,384 (3%)
LPG (KG) 3,851 6,768 (43%) 80,000 20
Total Energy 26,207 29,415 (11%)

Consumption (GJ) 60,000 15
40,000 10
ENERGY
20,000 5
GJ GJ/MT
30,000 8
0 0
2017 2018 2019 2020 2021
25,000
6
Water consumption Effluent discharged
20,000
Water intensity ratio
15,000 4
10,000 16% increase in water consumption during the year

5,000
2
38% increase in effluents discharged
0 0
2017 2018 2019 2020 2021
11% reduction in energy consumption during the year
Energy consumption 9% reduction energy per MT
Energy intensity ratio

NATURAL CAPITAL
EMISSION WASTE
GJ M3/MT MT MT/MT
5,000 1,000 8
4,000 800
6
3,000 600
0.5 4
2,000 400
2
1,000 200
0 0.0 0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Emissions Total waste

Emission intensity ratio Wasted per MT produced
4% reduction in carbon footprint 7% reduction in solid waste generated

2% reduction in emission per MT 5% reduction in waste per MT
48
CORPORATE GOVERNANCE
In furtherance of John Keells Group’s sustainability and digitisation efforts, coupled with the need to strike
a balance between the principles of conciseness and completeness in Integrated Reporting, the KFP Group
has used a variety of reporting formats to meet diverse stakeholder requirements. Whilst the section that
ensues discusses the key highlights for the year under review and the mandatory disclosures required under
various regulatory frameworks, the Corporate Website entails a detailed and comprehensive discussion of the
Corporate Governance Framework.
Visit www.keellsfoods.com for detailed Corporate Governance Commentary.
The John Keells Group’s robust and comprehensive corporate governance framework, endeavours to create an enabling environment
for growth in a structured, predictable and sustainable manner. The Group’s corporate governance philosophy is institutionalised across
all its business units, and it is this philosophy that has continuously created value for all its stakeholders, notwithstanding the external
environment and macro conditions.
Keells Food Products PLC (KFP or Company) and it’s subsidiary John Keells Food India (Private) Limited (collectively KFP Group) as
members of the John Keells Group have their own set of internal policies, processes and structures, aimed at meeting accepted best
practice, in addition to the “triggers” which ensure compliance with mandatory regulatory requirements. This framework is regularly
reviewed and updated to reflect global best practice, evolving regulations, and dynamic stakeholder needs, while maintaining its
foundational principles of accountability, participation, integrity and transparency.
COMPLIANCE SUMMARY
Regulatory Benchmarks
Standard/ Principle / Code Adherence
The Companies Act No.7 of 2007 and regulations Mandatory provisions - fully compliant
Listing Rules of the Colombo Stock Exchange (CSE) Mandatory provisions - fully compliant
Securities and Exchange Commission of Sri Lanka Act No. 36 of 1987, Mandatory provisions - fully compliant
including applicable directives and circulars
Code of Best Practices on Related Party Transactions (2013) advocated by Mandatory provisions - fully compliant
the Securities and Exchange Commission of Sri Lanka (SEC)
Code of Best Practices on Corporate Governance (2013) jointly issued by the Voluntary provisions - fully compliant
SEC and the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka)
Code of Best Practices on Corporate Governance (2017) issued by the CA Voluntary provisions - compliant with almost the full 2017 code to
Sri Lanka the extent of business exigency and as applicable to the KFP Group
KEY INTERNAL POLICIES

• Articles of Association of the Company • Disciplinary procedure
• Recruitment and selection policies • Policy on grievance handling
• Learning and development policies • Policies on anti-fraud, anti-corruption and anti-money
• Policies on equal opportunities, non-discrimination, career laundering and countering the financing of terrorism
management and promotions • Policy on communications and ethical advertising
• Rewards and recognition policy • Ombudsperson policy
• Leave, flexi-hours, tele-working and agile working policies • Group accounting procedures and policies
including health and safety enhancements and protocols in • Policies on enterprise risk management
light of the COVID-19 pandemic • Policies on fund management and foreign exchange risk mitigation
• Code of conduct, which also includes policies on gifts, • IT policies and procedures, including data protection,
entertainment, facilitation on payments, proprietary and classification and security
confidential information • Group environmental and economic policies
• Gender policy • Whistleblower policy
• Policy against sexual harassment • Policies on energy, emissions, water and waste management
• Policies on forced, compulsory and child labour and Child • Policies on products and service
Protection adopted by the Group

KEY CORPORATE GOVERNANCE HIGHLIGHTS FOR THE in place at the time enabled a seamless transfer with minimal
YEAR 2020/21 impact on business operations. In order to further strengthen
the IT frameworks in place the Group continued with its
• Given the unprecedented challenges and operating conditions
migration to cloud-based identity management, consolidated
arising from the COVID-19 pandemic, in March 2020, John
the Security Operations Centre, protocols, augmented data
Keells Group evaluated the resilience of its businesses under
classification and management while migrating applications to
multiple scenarios, including extreme operating conditions. The
the cloud and adopting digital platforms.
businesses continued to proactively evaluate their operational
performance and financial health during the year under review • To amplify the JKH Group’s emphasis on creating an inclusive,
with many measures implemented from March 2020 onwards, diverse and equitable work environment, the Group’s first
including the following; Diversity and Inclusion (D&I) team was established with the
aim of increasing female participation in the workforce by
• Stringent measures were introduced at all KFP
implementing identified initiatives such as gender goals,
manufacturing facilities, including workplace safety
employer supported childcare solutions, change agent
procedures such as random PCR testing, temperature
networks and, training and development. Some key initiatives
monitoring, contact tracing and provision of personal
in this regard included extension of maternity and paternity
protective equipment, safety audits and awareness
leave, introduction of adoption leave and institution of a
sessions, among others. Transport facilities were also
Gender Policy. The JKH Group also established a goal of
provided to ensure safe commute for employees.
increasing female participation up to 40 per cent by the end
• Adopted weekly dashboards, which cover financial of 2025/26 [2020/21: 30 per cent], as a first step towards
and non-financial KPIs and revised targets, including achieving gender parity in the employee cadre.
monitoring of weekly cash and collections targets.
• The Group embarked on a journey of strengthening its
• Established ‘cash war rooms’ and ‘spend control towers’ internal audit and process review framework by further
to critically review each spend item, prioritise payments, augmenting, through automation, its holistic approach
and impose clear reporting metrics. Although such to internal audits and process reviews. This framework is
initiatives were institutionalised primarily in response to expected to encourage auditors to report on value added
the COVID-19 pandemic, the Group will continue to recommendations, based on independent assessments
implement select measures to ensure an agile, efficient and their knowledge of leading industry best practices and
and productive business model. access to global knowledge bases; it will also held ascertain
the degree of alignment between process controls and IT
• A freeze on all non-essential capital expenditure.
functional facilitation of these processes; expand its database
• Enforced stringent expense control measures, including of known types of fraud; and maintain a central repository of
a reduction in executive staff remuneration ranging from data sets to undertake retrospective forensic data analysis
5 to 60 per cent across the Group, which was reinstated and to steer audit scoping going forward.
from July 2020 onwards in tandem with the recovery in
• The integrated fraud deterrent and investigation framework,
performance.
which was initiated with the aim of driving and delivering
• Group companies applied for relief measures, where continuous improvements of its assurance related initiatives,
relevant, extended by the Government and Central Bank ran its first full cycle of operations during the year under review.
which eased the financial position further. As envisaged, the framework integrated the management of
all aspects of fraud and stakeholder assurance, reinforced
• The Group introduced an improved and augmented Agile uniformity across common processes in matters relating to
Working Policy with the intention of encouraging and fraud and employed a data-driven approach to the continuous
unlocking new talent pools and adopting new ways of assessment of control efficacy while enabling better monitoring
working, particularly in adapting to the evolving and dynamic and refining audit trails.
environment. Whilst this policy facilitates current working
arrangements with greater clarity, the primary purpose of this • Independence of the Group’s whistle-blower channels was
policy is to ensure a greater degree of employee involvement maintained by the appointment of a new Ombudsperson
and flexibility in work arrangements, which will help increase effective 1 December 2020. This individual is an attorney-at-
retention and motivation of existing employees while law by profession.
expanding the talent pool and enabling greater participation of • For the year under review, the KFP Board declared and paid
women in the workforce. an interim dividend of Rs. 7.00 per share in February 2021.
• With the onset of the COVID-19 pandemic, the Group The staggered payments were reflective of the cognizance
transitioned to Work from Home (WFH) arrangements, where of the Board of the potential for an uncertain business
possible. The Group’s robust technology and digital platforms environment due to the pandemic, although improved
50
business performance paved the way to continue with the • On the gender diversity front, since female comprise a
declaration of dividends as witnessed. significant proportion of the stakeholder population, every
effort is made to attract appropriately qualified female to the
• A new Distributor Management System (DMS) was rolled
Company’s Board. In furtherance of these initiatives, Ms. N
out to enhance distribution efficiency through better visibility
Fernando was appointed to the Board of Directors during
and to further strengthen internal controls. The system also
the year under review, increasing female representation in the
leverages on greater analytical capabilities to provide real-time
Board to 25%.
data, historical analysis and forward projections, performance
dashboards, and online target monitoring, among others.
The Corporate Governance System
Internal Governance Integrated Assurance Regulatory

Level
Structure Governance Mechanisms Benchmarks
Board of Directors and Senior Integrated
Management Committees Governance Systems
and Procedures
Human Companies Act No.07

Related Party Strategy of 2007
Resources and Transaction Formulation and JKH Code
Compensation Review
Committee of Decision Making of Conduct Mandatory compliance
Committee of Process
JKH JKH
Listing Rules of the Colombo
Board of Stock Exchange (CSE)
Directors Project Risk
Audit Senior Mandatory compliance
Assessment Human Resource
Committee Independent
Group
Committee of Governance
JKH Director
Securities and Exchange
Nominations Commission of Sri Lanka Act
Committee of No. 36 of 1987, including
JKH directives and circulars
Integrated Risk Board
Management Committee Mandatory compliance
Chairman Code of best practices on

Related Party Transactions
(2013) advocated by
Securities and Exchange
Group Executive Committee (GEC) Employee Commission (SEC)
Group + IT Governance
Participation
Industry/ Mandatory compliance
Function
Group Operating Committee (GOC)
The Code of Best Practice
on Corporate Governance
Industry/ Internal (2013) as published by the
Group Management Committee (GMC) Tax Governance Securities and Exchange
Function Control
Commission and the
Institute of Chartered
Sector/ Accountants, Sri Lanka
Function/ Sector Committee (SC)
Voluntary compliance
Sub- sector Stakeholder
Management
Ombudsperson
and Effective Code of Best Practice on
Chief Executive Officer (CEO) Communication Corporate Governance
(2017) issued by CA Sri
Business/ Lanka
Function/
Management Committee Voluntary compliance with
BU /
Sustainability External almost the full 2017 Code
Department to the extent of business
Governance Assurance
exigency and as required
Employee Empowerment by the John Keells Group

The above diagram illustrates the key components of the Corporate Governance System of the John Keells Group. It depicts the internal
governance structure, from the Board of Directors cascading down to employee level, the integrated governance systems and procedures
within the John Keells Group, the Assurance Mechanisms in place and the various regulatory frameworks the John Keells Group is
compliant with from a Governance standpoint.
• Except the Audit Committee, the other four Boards Sub-Committees of JKH are chaired by Independent Directors appointed by the JKH
Board. The Audit committee is appointed by the KFP Board.
• The Chairman is present at all Human Resources and Compensation Committee meetings unless the Chairman’s performance assessment or
remuneration is under discussion. The Deputy Chairman/ Group Finance Director is invited as necessary.
• Audit Committee meetings are attended by the President overseeing the Consumer Foods industry group of JKH, Chief Financial Officer and
the Head of Group Business Process Review, Internal and External Auditors are regular attendees.
• The GOC acts as the binding agent to the various businesses within the KFP Group towards identifying and extracting KFP Group synergies.
• Due to space constraints only the key components are depicted in the diagram.
THE BOARD OF DIRECTORS

Board Composition
As at 31st March 2021, the Board comprised of 8 Directors, with 4 of them being Non-Executive Independent (NED/ID), 4 of them being
Non-Executive Non-Independent (NED/NID). The Group policy is to maintain a healthy balance between Non-Executive Directors (NED)
and Independent Directors (ID), in keeping with the applicable rules and codes, with the NED/NIDs bringing in deep knowledge of the
businesses and the NED/IDs bringing in experience, objectivity and independent oversight.
Ms. P N Fernando was appointed to the Board of Keells Food Products PLC as a Non-Executive Non-Independent Director with effect
from 01st of January 2021.
Managing Conflicts of Interest and Ensuring Independence

The Group takes necessary steps to ensure that Directors avoid situations in which they have, or could have, a direct or indirect interest
which conflicts with, or might possibly conflict with, the interests of the Group.
In order to avoid such potential conflicts or biases, the Directors make a general disclosure of interests, as illustrated below, at
appointment, at the beginning of every financial year and during the year as required. Such potential conflicts are reviewed by the Board
from time to time to ensure the integrity of the Board’s independence. Details of companies in which Board members hold Board or Board
Committee membership are available with the Company Secretary for inspection by shareholders, on request.
PRIOR TO APPOINTMENT
• Nominees are requested to make known their various interests
ONCE APPOINTED
• Directors obtain Board clearance prior to:
- Accepting a new position
- Engaging in any transaction that could create or potentially create a conflict of interest
• All NEDs are required to notify the Chairman of any changes to their current Board representations or interests and a new
declaration is made annually.
DURING BOARD MEETINGS

• Directors who have an interest in a matter under discussion:
- Excuse themselves from deliberations on the subject matter
- Abstain from voting on the subject matter (abstention from decisions are duly minuted)
52
The independence of all its Independent Non-Executive Directors was reviewed on the basis of criteria summarised below.
Criteria for Defining Independence Status of Conformity of NEDs

1. Shareholding carrying not less than 10 per cent of voting None of the individual NED/NIDs or NED/IDs shareholdings exceed 1
rights per cent
2. Director of another company* None of the NED/IDs are Directors of another related party company
as defined
3. Income/ non-cash benefit equivalent to 20 per cent of the NED/ID income/ cash benefits are less than 20 per cent of an
Director’s income individual Director’s income
4. Employment at KFP and/or material business relationship None of the NED/IDs are employed or have been employed at KFP
with KFP, currently or in the two years immediately Group or any of its subsidiaries or JKH Group
preceding appointment as Director
5. Close family member is a Director or a Key Management No family member of the NED/NIDs or NED/IDs is a Director of a
Personnel related party company
6. Has served on the Board continuously for a period No NED/ID has served on the Board for more than nine years
exceeding nine years from the date of the first appointment
7. Is employed, has a material business relationship and/or None of the NED/IDs are employed, have a material business
significant shareholding in other companies*. Also entails relationship or a significant shareholding of another related party
other companies that have significant shareholding in KFP company as defined
Group and/ or KFP Group has a business connection with
*Other companies in which a majority of the other Directors of the listed company are employed or are Directors or have a significant
shareholding or have a material business relationship
None of the NED/IDs has a conflict of interest as per the criteria for independence outlined above.
BOARD MEETINGS
During the financial year under review, there were four (4) pre-scheduled Board meetings. The Directors were provided with necessary
information, well in advance, by way of electronic Board papers and proposals, as relevant, for all Board meetings held during the year to
ensure robust discussion, informed deliberation and effective decision making. In addition, where issues of strategic importance requiring
extensive discussions are considered, the Board of Directors communicated regularly as and when required.
The attendance at the Board meetings held during the financial year 2020/21 is given below:
Name of the Directors Board Meeting Attendance

Year of 20/04/2020 17/07/2020 26/10/2020 19/01/2021 Eligibility Attended
Appointment
Independent Non-Executive
Mr. P D Samarasinghe 2016     4 4
Ms. S De Silva 2016     4 4
Mr. A E H Sanderatne 2016     4 4
Mr. I Samarajiva 2016     4 4
Non-Independent Non-Executive
Mr. K N J Balendra 2018     4 4
Mr. J G A Cooray 2018     4 4
Mr. D P Gamlath 2017     4 4
Ms. P N Fernando* 2021 N/A N/A N/A  1 1
*Ms. P N Fernando who is the Chief Financial Officer of the Keells Food Products PLC was appointed to the Board as a Non-Executive
Non-Independent Director with effect from 01st of January 2021.

BOARD SUB-COMMITTEES
The Board has delegated certain functions to the Board Sub-Committees, while retaining final decision rights. Members of these Sub-
Committees focus on their designated areas of responsibility and impart knowledge and oversight in areas where they have greater
expertise.
The five (5) Board Sub-Committees are as follows:

i. Audit Committee
ii. Human Resources and Compensation Committee of the Parent Company – JKH
iii. Nominations Committee of the Parent Company – JKH
iv. Related Party Transactions Review Committee of the Parent Company – JKH
v. Project Risk Assessment Committee of the Parent Company – JKH
Audit Committee
No. of meetings four (4) (Attendance of members indicated in the Audit Committee Report)
All members to be Non-Executive Independent Directors, with at least one member having significant, recent
and relevant financial management and accounting experience and a professional accounting qualification.
COMPOSITION
The Industry Group President, Industry Group Chief Financial Officer and Head of Group Business Process
Review of JKH are permanent invitees for all Committee meetings.
Review the quarterly and annual financial statements, including quality, transparency, integrity, accuracy and
compliance with accounting standards, laws and regulations.
Assess the adequacy and effectiveness of the internal control environment in the Group and ensure
appropriate action is taken on the recommendation of the internal auditors.
SCOPE Evaluate the competence and effectiveness of the risk management systems of the Group and ensure
robustness and effectiveness in monitoring and controlling risks.
Review the adequacy and effectiveness of internal audit arrangements.
Recommend the appointment, re-appointment and removal of the External Auditors including their
remuneration and terms of engagement by assessing qualifications, expertise, resources and independence.
The KFP Group’s Audit Committee comprise of four (4) Non-Executive Independent Directors with one of them having current membership
of a reputed accountancy body. The KFP Group’s Audit Committee had four (4) meetings during the year and attendance of the Audit
Committee members is indicated in the Audit Committee Report.
The Audit Committee consisted of the following members;
Members
• Mr. P D Samarasinghe -Chairman
• Mr. I Samarajiva
• Ms. S De Silva
• Mr. A E H Sanderatne
54
Human Resources and Compensation Committee of the Parent Company – JKH
No. of meetings – 01
Committee to comprise exclusively of NED, a majority of whom shall be independent.

The Chairman of the Committee must be NED.
COMPOSITION The Chairman and Deputy Chairman/ Group Finance Director of JKH are present at all Committee meetings
unless the Chairman or Executive Director remuneration is under discussion respectively.
The Deputy Chairman/Group Finance Director, is the Secretary of the Committee.
Review and recommend overall remuneration philosophy, strategy, policies and practice and performance-
based pay plans for the John Keells Group including the KFP Group.
Determine and agree with the Board a framework for the remuneration of the Chairman and Executive
SCOPE Directors based on performance targets, benchmark principles, performance related pay schemes, industry
trends and past remuneration.
Succession planning of Key Management Personnel.
Determining compensation of NEDs are not under the scope of this Committee.
The Human Resources and Compensation Committee as of 31st March 2021 consisted of the following members;
Members
• Mr. D A Cabraal - Chairman
• Mr. M A Omar
• Dr. S S H Wijayasuriya
By Invitation
• Mr. K N J Balendra
• Mr. J G A Cooray
DIRECTOR REMUNERATION
Non-Executive Director Remuneration
Compensation of NEDs is determined in reference to fees paid to other NEDs of comparable companies and is adjusted where necessary
in keeping with the complexity of the KFP Group. The fees received by NEDs are determined by the Board and reviewed annually. NEDs
do not receive any performance/ incentive payments and are not eligible to participate in any of the John Keells Group’s ESOPs. NEDs
fees are not subject to time spent or defined by a maximum/ minimum number of hours committed to the KFP Group per annum, and
hence are not subject to additional/ lower fees for additional/ lesser time devoted. Directors fees applicable to NEDs nominated by
JKH are paid directly to JKH and not to individuals. The Human Resources and Compensation Committee operates in conformity with
applicable rules and regulations.
Total aggregate of NED remuneration for the financial year 2020/21 was Rs. 6.5 million. (2019/2020 - Rs. 7.2 million)

Nominations Committee of the Parent Company – JKH

No. of meetings - 02
Majority of the members of the Committee shall be NEDs together with the Chairman.
COMPOSITION The Chairman of the Committee must be a NED/ID.
The Secretary to the Board is the Secretary of the Committee.
Assess skills required on the Board given the needs of the businesses.
From time to time assess the extent to which the required skills are represented at the Board.
Prepare a clear description of the role and capabilities required for a particular appointment.
Identify and recommend suitable candidates for appointments to the Board.
SCOPE Ensure, on appointment to Board, NEDs receive a formal letter of appointment specifying clearly expectation
in terms of time commitment, involvement outside of the formal Board meetings, participation in Committees,
amongst others.
Ensure that every appointee undergoes an induction to the Group.
The appointment of the Chairperson and Executive Directors is a collective decision of the Board.
Nominations Committee as at 31st March 2021 consists of following Members;
Members
• Mr. M A Omar - Chairman
• Dr. S S H Wijayasuriya
• Mr. K N J Balendra
• Ms. M P Perera
Related Party Transactions Review Committee of the Parent Company – JKH

No. of meetings - 04
The Chairman must be a NED.

COMPOSITION
May include one Executive Director.
The JKH has broadened the scope of the Committee to include senior decision makers in the list of key
management personnel, whose transactions with John Keells Group companies also get reviewed by the
Committee, in addition to the requisitions of the CSE.
Develop and recommend for adoption by the Board of Directors of JKH and its listed subsidiaries, a Related
Party Transaction Policy which is consistent with the operating model and the delegated decision rights of the
SCOPE John Keells Group.
Update the Board on related party transactions of each of the listed companies of the John Keells Group on a
quarterly basis.
Define and establish the threshold values for each of the subject listed companies in setting a benchmark for
related party transactions, related party transactions which have to be pre-approved by the JKH Board, related
party transactions which require to be reviewed annually and similar issues relating to listed companies.
56
REPORT OF THE RELATED PARTY TRANSACTION REVIEW COMMITTEE 2020/21
The following Directors served as members of the Committee during the financial year:
Ms. M P Perera
Mr. A N Fonseka
Mr. D A Cabraal
The Chairman, Deputy Chairman/Group Finance Director, and Group Financial Controller attended meetings by invitation. The Head of Group
Business Process Review served as the Secretary to the Committee.
The objective of the Committee is to exercise oversight on behalf of the Board of John Keells Holdings PLC and its listed Subsidiaries, to
ensure compliance with the Code on Related Party Transactions, as issued by the Securities and Exchange Commission of Sri Lanka (“The
Code”) and with the Listing Rules of the Colombo Stock Exchange (CSE). The Committee has also adopted best practices as recommended
by the Institute of Chartered Accountants of Sri Lanka.
The Committee in discharging its functions primarily relied on processes that were validated from time to time and periodic reporting by the
relevant entities and Key Management Personnel (KMP) with a view to ensuring that:
• there is compliance with “the Code “and Listing Rules of the CSE
• shareholder interests are protected; and
• fairness and transparency are maintained.
The Committee reviewed and pre-approved all proposed non-recurrent Related Party Transactions (RPTs) of the parent, John Keells Holdings
PLC, and all its listed subsidiaries, namely: John Keells PLC, Tea Smallholder Factories PLC, Asian Hotels and Properties PLC, Trans Asia
Hotels PLC, John Keells Hotels PLC, Ceylon Cold Stores PLC, Keells Food Products PLC, and Union Assurance PLC. Recurrent RPTs were
reviewed annually by the Committee. Furthermore, guidelines were introduced to facilitate requisite disclosures and assurances by senior
management of the aforementioned listed companies, in relation to Recurrent RPTs so as validate compliance with sec 9.5(a) of the listing
rules and thus exclusion from review and pre-approval by the Committee.
Other significant transactions of non-listed subsidiaries were also presented to the Committee for information.
In addition to the Directors, all Presidents, Executive Vice Presidents, Chief Executive Officers, Chief Financial Officers and Financial
Controllers of respective companies/ sectors have been designated as KMPs in order to increase transparency and enhance good
governance. Annual disclosures from all KMPs setting out any RPTs they were associated with, if any, were obtained and reviewed by the
Committee.
The Committee held four meetings during the financial year. Information on the attendance at these meetings by the members of the
Committee is given alongside. The activities and views of the Committee have been communicated to the Board of Directors, quarterly,
through verbal briefings, and by tabling the minutes of the Committee’s meetings.
M P Perera
Chairperson of the Related Party Transactions Review Committee
20th May 2021
Related Party Transactions Review Committee as of 31st March 2021 consists of the following members;
Members
• Ms. M P Perera - Chairperson
• Mr. D A Cabraal
• Mr. A N Fonseka
By Invitation
• Mr. G Cooray
• Mr. K Balendra
• Mr. M Thanthirige

Project Risk Assessment Committee of the Parent Company – JKH

(No Meetings held during the year)
Should comprise of a minimum of four (4) Directors.

Must include the Chairman and Group Finance Director.
COMPOSITION
Must include two NEDs.
The Chairman must be a NED.
Review and assess risk associated with large-scale investments and the mitigatory plans thereto, if mitigation
is possible and identify risk that cannot be mitigated.
Ensure stakeholder interest are aligned, as applicable, in making investment decision.
SCOPE Where appropriate, obtain specialised expertise from external sources to evaluate risks, in consultation with
the Group Finance Director.
Recommend to the board, necessary action required, to mitigation risks that are identified in the course of
evaluating a project in order to ensure that those risks are captured by the Group Risk Matrix for monitoring
and mitigation.
Note that the Committee shall convene only when there is a need In the wake of corporate disintegrations, the pursuit of continuous
to transact in business as per the terms of its mandate. improvement in governance, emphasis on environmental and
social considerations and a call for increased accountability and
The Project Risk Assessment Committee as of 31st March 2021 transparency continue to influence and shape the role of board
consists of the following members; governance aspects. The primary areas of focus and challenges,
amongst many others, being recurrently addressed by KFP Group
Members are as follows:
• Dr. S S H Wijayasuriya - Chairman • Board Diversity
• Ms. M P Perera • Board Independence
• Mr. K N J Balendra • Increasing emphasis on Environmental, Social and
• Mr. J G A Cooray Governance (ESG) aspects
• Continual Strengthening of Internal Controls
Outlook and Emerging Challenges • Digital Oversight and Cyber Security
The need for maintaining a well-grounded corporate governance
• Data Protection, Information Management and Adoption
framework has become vital in operating in an environment
of dynamic corporate change and global volatility. A strong • Greater Employee Involvement in Governance
governance mechanism is pivotal in enhancing accountability
to diverse stakeholders, ensuring corporate fairmindedness
and creating sustainable value. In this light, the KFP Group will
continue to stay abreast of governance best practice, and assess A detailed discussion of each of the above components is found
its level of preparedness and its capability in meeting these on the corporate website www.keellsfoods.com.
evolving external challenges.
58
Statement of Compliance under Section 7.6 of the Listing Rules of the Colombo Stock Exchange (CSE) on Annual Report Disclosure
MANDATORY PROVISIONS - FULLY COMPLIANT
Rule Compliance Reference in Annual Report

Status
(i) Names of persons who were Directors of the Entity Yes Board of Directors
(ii) Principal activities of the entity and its subsidiaries during the year, and Yes Management Discussion and
any changes therein Analysis, Annual Report of Board of
Directors and Financial Statements
(iii) The names and the number of shares held by the 20 largest holders of Yes Your Share in Detail
voting and non-voting shares and the percentage of such shares held
(iv) The float adjusted market capitalisation, public holding percentage Yes Your Share in Detail
(%), number of public shareholders and under which option the Listed
Entity complies with the Minimum Public Holding requirement
(v) A statement of each Director’s holding and Chief Executive Officer’s Yes Annual Report of the Board of
holding in shares of the Entity at the beginning and end of each Directors
financial year
(vi) Information pertaining to material foreseeable risk factors of the Entity Yes Enterprise Risk Management Report
(vii) Details of material issues pertaining to employees and industrial Yes During the year 2020/21, there were
relations of the Entity no material issues pertaining to
employees and industrial relations of
the Group
(viii) Extents, locations, valuations and the number of buildings of the Yes Group Real Estate Portfolio
Entity’s land holdings and investment properties
(ix) Number of shares representing the Entity’s stated capital Yes Your Share in Detail
(x) A distribution schedule of the number of holders in each class of Yes

Your Share in Detail
equity securities, and the percentage of their total holdings
(xi) Financial ratios and market price information Yes Your Share in Detail and Key Figures
and Ratios
(xii) Significant changes in the Company’s or its subsidiaries’ fixed assets, Yes Notes to the Financial Statements
and the market value of land, if the value differs substantially from the
book value as at the end of the year
(xiii) Details of funds raised through a public issue, rights issue and a N/A
private placement during the year
(xiv) Information in respect of Employee Share Ownership or Stock Option Yes Annual Report of the Board of
Schemes Directors and Notes to the Financial
Statements
(xv) Disclosures pertaining to Corporate Governance practices in terms of Yes Corporate Governance report
Rules 7.10.3, 7.10.5 c. and 7.10.6 c. of Section 7 of the Listing Rules
(xvi) Related Party transactions exceeding 10 per cent of the equity or Yes The Notes to the Financial
5 per cent of the total assets of the Entity as per audited financial Statements and Annual Report of
statements, whichever is lower the Board of Directors

Statement of Compliance under Section 7.10 of the Listing Rules of the CSE on Corporate Governance
CSE Rule Compliance Reference in Annual Report

Status
7.10 Compliance
a./b./c. Compliance with Corporate Yes KFP Group is in compliance with the Corporate Governance Rules
Governance Rules and any deviations are explained where applicable.
7.10.1 Non-Executive Directors (NED)
a./b./c. At least 2 members or 1/3 of the Yes All Board members are NEDs. The KFP Group is conscious of the
Board, whichever is higher should be need to maintain an appropriate mix of skills and experience in the
NEDs Board and to refresh progressively its composition over time.
7.10.2 Independent Directors
a. 2 or 1/3 of NEDs, whichever is higher Yes 4 out of the 8 NEDs are Independent.
shall be “independent”
b. Each NED to submit a signed Yes Independence of the Directors has been determined in accordance
and dated declaration of his/her with CSE Listing Rules and the 4 Independent NEDs have submitted
independence or non-independence signed confirmation of their independence.
7.10.3 Disclosures relating to Directors
a./b. Board shall annually determine the Yes Each NED discloses a formal declaration to the Board of all their
independence or otherwise of NEDs interests on an annual basis
c. A brief resume of each Director should Yes Board of Directors section of the Annual Report
be included in the annual report
including the directors’ experience
d. Provide a resume of new Directors Yes Board of Directors section of the Annual Report, Detailed resumes
appointed to the Board along with of the new NEDs appointed are submitted to the CSE. It is noted
details that there was one new appointment to the KFP Board, during
the year under review. (Refer the Board of Directors section of this
Annual Report).
7.10.4 Criteria for defining independence
a. to h. Requirements for meeting the criteria Yes Corporate Governance - Section - Managing Conflicts of Interests
to be an Independent Director and Ensuring Independence
7.10.5 Remuneration Committee
a.1 Remuneration Committee shall Yes The Human Resources and Compensation Committee of the Parent
comprise of NEDs, a majority of Company (equivalent of the Remuneration Committee with a wider
whom will be independent scope) only comprises of Independent NEDs.
a.2 One NED shall be appointed as Yes The Senior Independent NED is the Chairman of the Committee.
Chairman of the Committee by the
Board of Directors
b. Remuneration Committee shall Yes The remuneration of the Chairman and the Executive Directors are
recommend the remuneration of the determined as per the remuneration principles of the JKH Group,
Chairman and the Executive Directors and as recommended by the Human Resources and Compensation
Committee.
c.1 Names of Remuneration Committee Yes Corporate Governance Report – The Human Resources and
members Compensation Committee
60
CSE Rule Compliance Reference in Annual Report
Status
c.2 Statement of Remuneration policy Yes Corporate Governance Report – The Human Resources and
Compensation Committee
c.3 Aggregate remuneration paid to EDs Yes Annual Report of Board of Directors and Financial Statements
and NEDs
7.10.6 Audit Committee
a.1 Audit Committee (AC) shall comprise Yes The Audit Committee comprises only of Independent NEDs.
of NEDs, a majority of whom should
be independent
a.2 A NED shall be the Chairman of the Yes Chairman of the Audit Committee is an Independent NED.
committee
a.3 CEO and CFO should attend AC Yes The Industry Group President, Chief Financial Officer and CEO are
meetings permanent invitees to all Audit Committee meetings.
a.4 The Chairman of the AC or one Yes The Chairman of the AC is a member of a recognised professional
member should be a member of a accounting body.
recognised professional
accounting body
b. The Functions of the Audit Committee Yes The Audit Committee carries out all the functions prescribed in this
section.
b.1 Overseeing of the preparation, Yes Refer the Report of the Audit Committee
presentation and adequacy of
disclosures in the financial statements
in accordance with SLFRS/LKAS
b.2 Overseeing the compliance with Yes Refer the Report of the Audit Committee
financial reporting requirements,
information requirements as per laws
and regulations
b.3 Overseeing the process to ensure Yes Refer the Report of the Audit Committee
the internal and risk management
controls, are adequate, to meet the
requirements of the SLFRS/LKAS
b.4 Assessment of the independence and Yes Refer the Report of the Audit Committee
performance of the Entity’s External
Auditors
b.5 Make recommendations to the Board Yes Refer the Report of the Audit Committee
pertaining to External Auditors
c.1 Names of the Audit Committee Yes Refer the Report of the Audit Committee
members shall be disclosed
c.2 Audit Committee shall make a Yes Refer the Report of the Audit Committee
determination of the independence of
the external auditors
c.3 Report on the manner in which the Yes Refer the Report of the Audit Committee
Audit Committee carried out its
functions.

Statement of Compliance under Section 9.3.2 of the Listing Rules of the CSE on Corporate Governance

Status
(a) Details pertaining to Non-Recurrent Related Party Yes Annual Report of the Board of Directors
Transactions (RPT) and Notes to the Financial Statements
(b) Details pertaining to Recurrent Related Party Transactions Yes Annual Report of the Board of Directors
and Notes to the Financial Statements
(c) Report of the Related Party Transactions Review Yes Corporate Governance, Report of the
Committee Related Party Transactions Review
Committee
(d) Declaration by the Board of Directors in the Annual Report Yes Annual Report of the Board of Directors
as an affirmative statement of compliance with the rules
pertaining to RPT, or a negative statement otherwise
Statement of Compliance pertaining to Companies Act No. 7 of 2007


Status
168 (1) (a) The nature of the business together with any change Yes Notes to the Financial Statements
thereof
168 (1) (b) Signed financial statements of the Group and the Yes Financial Statements
Company
168 (1) (c) Auditors’ Report on Financial Statements Yes Independent Auditors’ Report
168 (1) (d) Accounting policies and any changes therein Yes Notes to the Financial Statements
168 (1) (e) Particulars of the entries made in the Interests Register Yes Annual Report of Board of Directors
168 (1) (f) Remuneration and other benefits paid to Directors of the Yes Notes to the Financial Statements
Company
168 (1) (g) Corporate donations made by the Company Yes Notes to the Financial Statements
168 (1) (h) Information on the Directorate of the Company and its Yes Annual Report of Board of Directors
subsidiaries during and at the end of the accounting
period
168 (1) (i) Amounts paid/ payable to the External Auditor as audit Yes Notes to the Financial Statements
fees and fees for other services rendered
168 (1) (j) Auditors’ relationship or any interest with the Company Yes Report of the Audit Committee
and its Subsidiaries
168 (1) (k) Acknowledgement of the contents of this Report and Yes Financial Statements/ Annual Report of
signatures on behalf of the Board the Board of Directors
62
BOARD OF DIRECTORS
KRISHAN BALENDRA DAMINDA GAMLATH
Non-Independent – Non-Executive Director, Chairman Non-Independent – Non-Executive Director
Mr. Balendra was appointed to the Board of Keells Food Products Mr. Gamlath was appointed to the Board of Keells Food Products
PLC from the 1st of January 2018. PLC from the 1st of November 2017.
Krishan Balendra is the Chairman of John Keells Holdings PLC. Daminda Gamlath is the President of the Consumer Foods
He is a Director of the Ceylon Chamber of Commerce and the industry group and has been with the John Keells Group since
Hon. Consul General of the Republic of Poland in Sri Lanka. He is 2002. He was the Sector Financial Controller for the Information
a former Chairman of Nations Trust Bank and the Colombo Stock Technology sector and then the Consumer Foods sector before
Exchange. Krishan started his career at UBS Warburg, Hong he was appointed as the Head of Beverages in 2013 and the
Kong, in investment banking, focusing primarily on equity capital Sector Head in 2017. Prior to joining the John Keells Group,
markets. He joined JKH in 2002. Krishan holds a law degree he worked at the Hayleys Group. Daminda holds a B.Sc. in
(LLB) from the University of London and an MBA from INSEAD. Engineering from the University of Moratuwa, an MBA from the
University of Colombo and is a passed finalist of the Chartered
GIHAN COORAY Institute of Management Accountants (UK).
Non-Independent – Non-Executive Director
Mr. Cooray was appointed to the Board of Keells Food Products PRAVIR SAMARASINGHE
PLC from the 1st of January 2018. Independent – Non-Executive Director
Mr. Samarasinghe was appointed to the Board of Keells Food
Gihan Cooray is the Deputy Chairman/Group Finance Director Products PLC from 10th of June 2016 and is the Chairman of the
and has overall responsibility for the Group’s Finance and Audit Committee.
Accounting, Taxation, Corporate Finance and Strategy, Treasury,
Information Technology function and John Keells Research. He He has over 30 years of professional and commercial experience
is the Chairman of Nations Trust Bank PLC. Gihan holds an MBA and serves on the Board of Directors of several Public Listed and
from the Jesse H. Jones Graduate School of Management at Unlisted Companies.
Rice University, Houston, Texas. He is a Fellow member of the
Chartered Institute of Management Accountants, UK, a certified He is a Member of the Institute of Chartered Accountants of Sri
management accountant of the Institute of Certified Management Lanka and Chartered Institute of Management Accountants UK
Accountants, Australia and has a Diploma in Marketing from the and holds a Master’s Degree in Business Administration.
Chartered Institute of Marketing, UK. He serves as a committee
member of The Ceylon Chamber of Commerce. He is a Board member of the Ceylon Chamber of Commerce and
Sri Lanka Accounting and Auditing Standards Monitoring Board.
AMAL SANDERATNE He was the Past Chairman of the Sri Lanka Institute of Directors,
Independent – Non-Executive Director Employers’ Federation of Ceylon, Industrial Association of Sri
Mr. Sanderatne was appointed to the Board of Keells Food Lanka and Condominium Developers Association of Sri Lanka. He
Products PLC from the 10th of June 2016 and is a member of the was the Past President of the Chartered Institute of Management
Audit Committee. Accountants Sri Lanka Division and former Council Member,
CIMA (UK).
He is the founder and CEO of Frontier Research a provider of time
efficient economic, industry and company research and curated SHEHARA DE SILVA
information services. Frontier was founded in 2003. Prior to Independent – Non-Executive Director
founding Frontier Research, he worked as a consultant for DFCC Ms. De Silva was appointed to the Board of Keells Food Products
bank as the senior transaction advisor for the Sri Lanka Telecom PLC from the 10th of June 2016 and is a member of the Audit
IPO in 2002. Committee.
He was the Head of Research of JP Morgan/Jardine Fleming She is an international branding and communication specialist
in Sri Lanka. He was later transferred to Singapore and headed with a track record of market development in East Asia and Sri
JP Morgan’s Asia Pacific ADR research and also managed the Lanka. She has worked with Omnicom related companies as the
research of the Hong Kong based Access Products Group. He is Director Planning Naga DDB in Kuala Lumpur and later as the
a graduate in Economics from the London School of Economics Managing Director of Interbrand Malaysia and Group Director
and is a CFA Charterholder.

BOARD OF DIRECTORS
Strategy of Foetus International. She was the Deputy Director

General of the Board of Investment Sri Lanka and GM Marketing
and Sales of Janashakthi Insurance. She has consulted for the
UN/ ILO and USAID, GiZ , PLAN international and NORAD, and
Internews on gender, competitiveness and reconciliation.
She is a trustee of the Neelan Tiruchelvam Trust, and on the

boards of Sarvodaya Development Finance ,Optima design ,
Informatics Institute of Technology and Quickshaws Travel (Pvt)
Ltd. She was previously on the Boards of The Environment
Foundation the Arthur C Clarke Institute of Modern Technologies
and Eagle Fund Management.
INDRAJIT SAMARAJIVA
Independent – Non-Executive Director
Mr. Samarajiva was appointed to the Board of Keells Food
Products PLC from the 10th of June 2016 and is a member of the
Audit Committee.
He is a writer at www.indi.ca. Mr. Samarajiva co-founded and

sold YAMU one of Sri Lanka’s leading food content platforms to
PickMe in 2019. At PickMe, Mr. Samarajiva launched their delivery
product PickMe Food. He has experience moving organisations
online, something he has helped to do at Dialog Axiata, The
Sunday Leader, and Sarvodaya. He studied Cognitive Science at
McGill University in Montreal, Canada.
NELINDRA FERNANDO
Non-Independent – Non-Executive Director
Ms. Fernando was appointed to the Board of Keells Food
Products PLC from the 01st of January 2021.
Nelindra Fernando is the Chief Financial Officer for the Consumer

Foods industry group. Nelindra has been with the John Keells
Group since 2013. Prior to joining the JKH Group, she worked
at the MAS group for 12 years and Ernst & Young, Chartered
Accountants for 4 years. Nelindra serves on the Board of Ceylon
Cold Stores PLC as an Executive Director. She is a member of the
Chartered Institute of Management Accountants of UK and the
Institute of Chartered Accountants of Sri Lanka.
64
MANAGEMENT TEAM
CHIEF EXECUTIVE OFFICER Procurement
Mr. S I Thanthirigoda Mr. S V R Boteju
Vice President Manager - Purchasing
Chief Executive Officer
Engineering
SALES AND MARKETING Mr. E A K Fernando
Sales Manager - Engineering
Mr. N M Adams
Assistant Vice President Logistics
Head of Sales & Distribution Mr. T H M A K Tennakoon
Manager - Logistics
Mr. S Nanayakkara
Manager - Sales Administration HUMAN RESOURCES
Ms. S M S N K Paranayapa
Mr. G W C G B Gonigoda Vice President
Channel Manager Head of Human Resources - Consumer Foods Industry Group
Mr. M A W S S Maddumaarachchi Mr. Dulan Abeyweera

Channel Manager Assistant Manager - Human Resources
Mr. S T B S Kumara FINANCE

Channel Manager Ms. P N Fernando
Director/ Executive Vice President
Mr. S A S D Subasinghe Chief Financial Officer - Consumer Foods Industry Group
Channel Manager
Mr. D V T Abeygunawardane
Marketing Assistant Vice President
Mr. R D J Valentine Financial Planning and Analysis - Consumer Foods Industry Group
Brand Manager
Ms. J L N S Liyanage
SUPPLY CHAIN Assistant Vice President
Production Head of Tax - Consumer Foods & Retail Sector
Mr. W A V Boteju
Head of Manufacturing Mr. A C Morris
Manager - Management Accounting
Mr. K A V Fernando
Factory Manager - Pannala Mr. D M N D W B Dissanayake
Manager - Finance
Mr. C N Soza
Factory Manager - Ekala
Research and Development and Quality Assurance

Mr. A A N Lalantha
Assistant Vice President
Head of Quality Assurance and Research & Development
Mr. B M G M Basnayake
Manager - Quality Assurance and Development Projects

GRI CONTEXT INDEX
GRI Standard Disclosure Page number Omission

GRI 101: Foundation 2016 (does not include any disclosures)
General Disclosures
GRI 102: 102-1 Name of Organisation 10
General 102-2 Activities, brands, products and services 15
Disclosures
2016 102-3 Location of headquarters 101
102-4 Location of operations 15
102-5 Ownership and legal form 101
102-6 Markets served 42
102-7 Scale of the organisation 4
102-8 Information on employees and other workers 38
102-9 Supply chain 43
102-10 Significant Changes to the organisation and its supply 10
chain
102-11 Precautionary principle 45
102-12 External initiatives 10
102-14 Statement from senior decision maker 7
102-16 Values, principles, norms and standards of behaviour 3
102-18 Governance Structure 51
102-40 List of stakeholder groups 22
102-41 Collective bargaining agreements 40
102-42 Identifying and selecting stakeholders 22
102-43 Approach to stakeholder engagement 22
102-44 Key topics and concerns raised 22
102-45 Entities included in the consolidated financial 101
statements
102-46 Defining report content and topic boundary 10
102-47 Material topics 26
102-48 Restatement of Information 10
102-49 Changes in reporting 10
102-50 Reporting period 10
102-51 Date of most recent report 10
102-52 Reporting cycle 10
102-53 Contact point for questions regarding Report 11
102-54 Claims of reporting in accordance with GRI Standards 10
102-55 GRI context index 66
102-56 External assurance N/A Company has not obtained
External assurance on this report
66
Economic Performance
GRI 103: 103-1 Explanation of material topics and its boundaries 26
Management 103-2 The Management Approach and its components 45
Approach
103-3 Evaluation of the Management Approach 45
201-2 Financial Implications and other risks and opportunities 45
due to climate change
Procurement practices
Approach
GRI 204: 204-1 Proportion of spending on local suppliers 44
Procurement
practices
Materials
Approach
GRI 301: Raw 301-1: Raw materials used by weight or volume 46
materials
Energy
Approach
GRI 302: Energy 302-1 Energy consumption within the organisation 47
2016 302-4 Reduction of energy consumption 47
Water
Approach
GRI 303: Water 303-1 Water withdrawal by source 47
2016 303-3 Water recycled and reused 47
Emissions
Approach
GRI 305 GRI 305-1 Direct (Scope 1) GHG emissions 48
Emissions 2016 GRI305-2 Energy Indirect ( Scope 2) GHG emissions 48
GRI 305-5 Reduction in GHG emissions 48

GRI CONTEXT INDEX

Effluents and waste
Approach
GRI 306 : GRI 306-1 Water discharge by quality and destination 47
Effluents and GRI 306-2 Waste by type and disposal method 47
Waste
Environmental Compliance
Approach
GRI 307: 307-1 Non-compliance with environmental laws and 45
Environmental regulations
Compliance
2016
Employment
Approach
GRI 401: 401-1 Employee hires and turnover 38
Employment
2016
Labour Management Relations
GRI 103: 103-1 Explanation of material topics and its boundaries 26 -
Management 103-2 The Management Approach and its components 40 -
Approach
103-3 Evaluation of the Management Approach 40 -
GRI 402: Labour 402-1 Minimum notice periods regarding operational changes 40 -
Management
Relations
Occupational Health and Safety
Approach
GRI 403: Health 403-4 Health and safety topics covered in formal agreements 39 -
and Safety 2016 with trade unions
Training and Education
Approach
68
GRI 404: 404-1 Average hours of training per year per employee 40 -
Training and 404-2 Programs for upgrading skills and transition assistance 40 -
education programmes
404-3 Percentage of employees receiving regular performance 40 -
and career development reviews
Local communities
Approach
GRI 413: Local 413-1 Operations with local community engagement, impact 44 -
communities assessments and development programmes
Customer Health and Safety
Approach
GRI 416: 416-2 Incidents of non-compliance concerning the health and 42
Customer Health safety impacts of products and services
and Safety
Marketing and Labelling
Approach
GRI 417: 417-2 Incidents of non-compliance concerning product and 42
Product and service information and labelling
Service labelling 417-2 Incidents of non-compliance concerning marketing 42
communications
Socio economic Compliance
Approach
GRI 419: Socio 419-1 Non-compliance with laws and regulations in the social 42 -
economic and economic area
compliance

ENTERPRISE RISK MANAGEMENT
The underlying principle of enterprise risk management comprehensively assess, rate and set mitigation plans for any
practiced at KFP is to balance risk and reward dynamics and structural, operational, financial, and strategic risks relevant to
thereby deliver shared, sustainable value to all stakeholders of each Business Unit, based on past information and assessment
the Company. Like any other business, KFP faces uncertainty of the operating landscape.
and challenges stemming from both its external and internal
operating landscapes. The management determines the degree The Sector Committee (SC) and the Company’s Board of
to which such uncertainty should be accepted and managed Directors are the ultimate owners of its risks and are responsible
as the Company drives its strategic aspirations. Uncertainties for ensuring the effective management of risks. This is actioned
present risks as well as opportunities, with the potential to through quarterly review of the Risk Control Self-Assessment
erode or enhance value. Enterprise risk management enables (RCSA) forms and ongoing monitoring. Identified risks are
the Company to effectively identify, measure and manage the revalidated at the SC on a quarterly basis and presented to
uncertainties and associated risks, whilst optimising value the Audit Committee on a bi-annual basis. The Company risk
through effectively deploying resources to capitalise emerging register is given due consideration by the JKH ERM division
opportunities. in consolidating risks for the John Keells Group. The risk
management cycle is concluded with the presentation of a Group
KFP’s approach to risk management is aligned with the John Risk Report containing risk profiling and analysis to the John
Keells Group’s Enterprise Risk Management (JKH ERM) Keells Group Audit Committee.
Framework. The Enterprise Risk Management cycle begins in the
first quarter of the year with the annual risk review of all Business The risk management process and information flow adopted by
Units by the JKH ERM Division. The Division assists the heads JKH Group is depicted below in table 1.
of Business Units and the respective heads of Departments to
Table 1 - JKH Group Risk Management Process
John Keells Risk Business

External Business Organisation Analysis and Technology Sustainability
Universe Headline Strategies and
Environment Process and People Reporting and Data and CSR
Risks Policies
JKH PLC Audit Committee JK Group

Review Risk
Risk Presentation
Report
Group Executive Committee (GEC) and Action
Listed Company Audit Committee BU Review and

Risk Validation
Sector Risk Report
Risk and Control Review Team
and Action
Group Management Committee (GMC)
Sustainability Integration
Risk Management Team
Integrated Risk
Sector Committee (SC)
Management BU Risk
Report and
Business Unit Action
Risk Identification
Operational Units Report Content
70
The ERM Framework adopted by the John Keells Group and implemented by the Company and the Subsidiary involves the following:
1. Identification of Types of Risk

Risk Event- Any event with a degree of uncertainty which, if it occurs, may result in the Organisation or Business Unit failing to meet
its stated objectives.
Core Sustainability Risks- Core Sustainability Risks are defined as those risks having a catastrophic impact to and from the
organisation but may have a very low or nil probability of occurrence.
2. Establishment of a Risk Register with Likelihood of Occurrence and Severity of Impact

Using Group guidelines, a risk grid is established for the Company. Every risk is analysed in terms of Likelihood of Occurrence and
Severity of Impact and assigned a score ranging from 1 (low probability/impact) to 5 (high probability/ impact) to signify the probability
of occurrence and the level of impact to the organisation. Please see Table 2 for further details.
3. Establishment of Level of Risk

Based on the values assigned for each individual risk, using the matrix given in Table 2, a level of risk is established by multiplying the
Likelihood of Occurrence with Severity of Impact.
Table 2 -Guideline for Rating Risk
5 Catastrophic/ Extreme Impact 5 10 15 20 25

Impact / Severity
4 Major/ Very High Impact 4 8 12 16 20
3 Moderate/ High Impact 3 6 9 12 15
2 Minor Impact 2 4 6 8 10
1 Low/ Insignificant Impact 1 2 3 4 5
Rare/ Remote Unlikely to Possible Likely Almost Certain

to Occur Occur to Occur to Occur to Occur
1 2 3 4 5
Occurrence/ Likelihood
The Colour Matrix implies the following;
Priority level 5 4 3 2 1
Colour code Ultra High High Medium Low Insignificant

Score 13-25 10-12 7-9 3-6 1-2
QUARTERLY REVIEW OF THE RISK IDENTIFIED USING RISK FRAMEWORK BY THE COMPANY
It is the responsibility of the Chief Executive Officer (CEO) and the Company Risk Management team to ensure that each risk item is
tracked over the course of the year (reviewed on a quarterly basis) and to ensure that the mitigation actions identified during the risk review
process are being carried out adequately. This ensures that the Company has a ‘living’ document that is updated based on internal and
external conditions, on a quarterly basis through the Group’s online Enterprise Risk Management IT platform, facilitating a relevant and
timely dynamic risk register.

RISK UNIVERSE
The identified risks are broadly classified into the Risk Universe as identified by the John Keells Group. The Risk Universe for KFP is given
in Table 3.
Table 3 - Keells Food Products PLC - Risk Universe
RISK UNIVERSE
Headline External Business Business Organisation Analysing and Technology Sustainability
Risk Environment Strategies and Process and People Reporting and Data and CSR
Policies
Political Reputation & Internal Business Leadership/ Performance Technology Sustainability
Brand Image Process Talent Pipeline Measurement Infrastructure/ Strategy
& Reporting Architecture
Competitor Governance Operations Training & Budgeting/ Technology Biodiversity &
– Planning, Development Financial Reliability & Climate Change
Production, Planning Recovery
Process
Catastrophic Capital & Operations – Human Resource Accounting/ Data relevance, Natural/
Loss Finance Technology, Policies & Tax Processing & Sustainable
Design, Procedures Integrity Resource
Execution, Utilisation
Continuity
Stakeholder Strategy & Interdependency Ethics Internal/ Cyber Security Community
Expectations Planning External Investment &
Related Risks
Reporting & Philanthropy

Disclosures
Macro Business/ Customer Fraud & Abuse IT processes Financing & Tax
Economic Product Portfolio Satisfaction
Foreign Organisation Legal, Regulatory Attrition Cloud Oversight/
Exchange & Structure Compliance & computing Monitoring/
Interest Rates Privacy Compliance
Weather & Innovation & Property & Knowledge Goal
Climate R&D Equipment & Intellectual Congruence/
Damage & Capital Dependence
Breakdown
Investment, Vendor/ Partner Employee
Mergers, Reliance Relations &
Acquisitions & Welfare/ H & S
Divestments
Treasury, Performance
Hedging & Management &
Insurance Compensation
SUSTAINABLE RISK MANAGEMENT

The Company’s risk management strategy is closely interwoven with its sustainability management framework and corporate social
responsibility (CSR) functions, enabling a holistic approach towards the identification, management and mitigation of risk. Risk
Management therefore extends beyond managing the operational and financial risks faced by the Company, to encompass broader
environmental, community, employee, value chain and other non-financial risks related to the triple bottom-line approach of the Company,
providing a foundation for productive engagements with internal and external stakeholders.
72
RISK MANAGEMENT DURING THE REPORTING YEAR
The outbreak of the COVID-19 pandemic in 2020 led to dramatic shifts in the Company’s risk landscape. The World Health Organisation
(WHO) declared COVID-19 as a global public health emergency and subsequently a pandemic in January 2020. With the initial outbreak of
the pandemic in Sri Lanka in March 2020, the Government took drastic measures to contain the spread of the virus. Keeping in line with
the actions taken by the Government, the Company also took immediate precautionary measures to ensure the safety of its employees
while successfully facing the emerging threats to the business operations from COVID-19. In response to the crisis, the Company also
strengthened its risk identification, analysis, and evaluation processes in order to respond better to emerging and new risks, communicate
to stakeholders, and better connect risk management with strategy. In addition, the crisis has underscored the importance of treating ERM
not just as a required regulatory requirement but as part of the strategic process that generates value for an organisation.
Any high-level risks or core risks were reviewed by the SC headed by the President of the Industry Group as a means of validating the risk
process at Business Unit level. The significant risk areas that impact the achievement of the strategic business objectives of the Company
and the measures taken to address these risks are discussed below.
Risk factor Impact on value creation Risk mitigation actions Risk Rating
2019/20 2020/21
Risks Increased vulnerability to • Executed the operational guidelines on preparedness and
associated health and safety risks of response to COVID-19 outbreak at workplaces issued by
with the employees, particularly in our Ministry of Health since April 2020 in both factory and field level.
COVID-19 manufacturing facilities and in
Pandemic the field. • Developed a company-specific, comprehensive standard
operating procedure (SOP) on COVID-19 proactive and
Implications on consumer reactive measures to be practiced by all the stakeholders in
demand, given the impacts the factory premises. Similar guidelines were implemented for
on disposable income and field staff operations as well.
disruptions to distribution
channels. Meanwhile, raw • Initiated process to obtain SLS 1672: 2020- COVID-19
material costs also escalated Safety Management System (final audit was conducted in
due to import restrictions and April 2021), thereby obtaining third party assurance on the
weakening of the exchange stringency of our safety precautions. Final audit of KFPL to be
rate. done in April 2021.
Pandemic induced pressure • Conducted random PCR tests on a sample of employees

on liquidity stemming from covering all personnel categories/ work groups within the
reduced operational activity organisation, on a weekly basis.
during the lockdown due to
disruptions to operations. • Improved infrastructure and workplace arrangements to
facilitate the main preventive measures such as provision of
Liquidity crises and operating personal protective equipment (PPE), social distancing, hand
challenges faced by distributor washing, surface sanitation, etc.
partners due to lower volumes
and restriction to mobility. • Appointed a safety champion for each operational area and
implemented a daily self-assessment of conformity by the
In the event of factory or field champions using a checklist.
staff contracting the virus,
the brand could be adversely • Conducted daily progress reviews and status update
impacted thereby affecting meetings with the participation of senior management.
business growth.
• Weekly walk-through audits by the senior management.
• Continuous awareness programs for shop floor employees

and staff to improve their knowledge on the existing situation.

2019/20 2020/21
• Weekly awareness for executive and above grades on the
theme: ‘NO ONE IS SAFE UNTIL EVERYONE IS SAFE’.
• Providing immune boosting herbal drinks to factory employees

on daily basis.
• Facilitating Work From Home (WFH) arrangements for office

employees.
• Maintain updated daily attendance sheet of all grades of

employees.
• Premises restricted for visitors and access is given only for

any essential services, with prior approvals based on their
health declarations.
• Working in close coordination with area MOH offices and

following their directions on any areas of concern.
• Freezing capital expenditure except for maintenance and

replacements and re-negotiation with suppliers on prices and
credit periods, Extensions of Payments terms.
• Re-negotiations with all contractors for better prices and

credit terms.
• Cash flow projections on frequent basis – Cashflow

Monitoring War Room.
• Reviewed possibility of local substitutes, to capture savings

from local raw materials.
Macro- Macro-economic fundamentals • Continuous review of macro- economic developments and
Economic such as inflation, GDP growth, consumer behavior through market surveys.
Environment, interest rates, exchange rates,
• Develop local suppliers to substitute imported raw materials.
Changes duties and taxes directly
in Interest impact the fixed and variable • Proactively engaging with the government to create a
Rates, costs of the Company as conducive industry environment along with other leading
Exchange well as consumer spending retailers and suppliers.
Rates, Taxes which in turn impacts sales
• Interest rate risk is managed by using a mix of fixed and
and Tariffs volumes. The Company’s
variable rate and forward booking for imports to hedge
cost of production is largely
against exchange rate risks.
dependent on the cost of raw
materials sourced from local
suppliers, as well as the raw
materials imported where the
depreciation of the Rupee and
changes in duties and taxes
have a significant impact which
cannot be readily passed on
to the customer and such
changes affect the profitability
of the company.
74
2019/20 2020/21
Volatility of The Company is exposed to • Entering into long-term contracts with suppliers at guaranteed
raw material price volatility in the market, terms.
prices and especially in the pork and
• Supporting suppliers through the provision of financial
inconsistency chicken categories which are
assistance at concessionary rates.
in supply of two of the key raw materials of
raw materials the Company. During the year, • Diversifying supplier base and, monitoring of raw material
the Company was adversely prices on a continuous basis.
impacted by unexpected
• Started an inhouse chicken deboning operation to mitigate
changes in raw material
the impact due to price volatility in the chicken market.
prices which cannot be readily
passed on to the customer,
thereby impacting profit
margins.
Unfavorable weather • Backward integration for selected raw materials.
conditions and the spread
• Implementation of sustainable sourcing initiatives.
of various diseases impact
the supply of chicken and • Capacity development of local farmers to share industry best
pork in the market. Given practices.
limitations in supply, this could
directly impact the Company’s
production levels.
The cost of imported materials • Developing at alternative suppliers and exploring alternative
has increased due to the raw materials.
depreciation of the Rupee
against foreign currencies
and restrictions on imports
by the Government during
the COVID-19 pandemic
period. Further, the cost of
locally sourced materials also
escalated in the short term due
to constraints in production
due to the operational
challenges stemming from the
pandemic.
Vulnerabilities As the Company increasingly • Installing stringent access controls, firewalls, security software
from IT relies on IT and digital services, and dedicated user ID’s.
related risks it is inevitably exposed to risks
• Comprehensive disaster recovery plan is in place to ensure
(Cyber Risk) stemming from data privacy,
continuity of business operations.
cyber-crime and other ICT
risks. • Availability of a dedicated Information Security and the use of
appropriate software.
• Maintain up to date virus definition files and firewalls.
• Obtain daily, weekly, and monthly “on site” and“off-site” data

backups, cloud storage for all users.

2019/20 2020/21
Following the pandemic, • The anti-virus security systems are in place and up to date.
employees were given the
• An open DNS security system (Umbrella Roaming Client) are
opportunity to work from home
installed.
which in turn has escalated
potential risks pertaining to • Continuous training to employees on information security.
network security, information
leakage and device stability.
Business The Company has identified • External assurance on the manufacturing processes including
process Business Process and certifications such as ISO 9001:2015 and ISO 22000: 2018,
and product Product Liability as a core risk SLS and Halal Certificate.
liability risk which can arise due to any
defect in the product and/ or • Adherence to Good Manufacturing Practice (GMP) and Food
manufacturing process such Safety standards.
as food contamination and
• Fully compliant with rules and regulations which are imposed
poisoning.
by the Consumer Affairs Authority’s and other statutory
bodies.
• Established a Complaint Management System (CMS).
• Implemented new test kits methods which are certified under

AOAC and ISO certification which provides results within 24
hours with a greater accuracy.
• Deployed “Physical Quality Checkers” in the manufacturing

facilities whose preliminary responsibility is to observe the
entire manufacturing processes to ensure production is
carried out according to the stipulated regulations and
standards.
Meeting The food manufacturing • The Company has put in place a quality assurance
quality industry is subject to general system powered by qualified specialists using international
expectations, risks of food spoilage or benchmarks, which considers all product and process
change in contamination, consumer innovations to avoid any regulatory, health and nutrition related
customer preferences with respect to concerns.
expectations nutrition and health related
concerns, governmental • Validating all nutritional standards of the products with respect
regulations and consumer to Government regulations.
liability claims. These risks
• Use of high-quality ingredients which satisfy international and
if materialised, may impact
local regulatory standards.
Company reputation leading
to loss of market share and • Ensure compliance with the ISO 22000:2018 (food safety
possible litigation. standard).
• Continued monitoring of customer preferences and

development of products to suit these emerging requirements.
76
2019/20 2020/21
In order to proactively • Upgrading certain recipes of Chicken meat balls and Skinless
understand and meet Chicken sausages category.
emerging customer
• Two new variants (Chicken Flavored Rice and Dhaiya Rice)
expectations, the Company is
were added to the Ezy Rice range.
required to monitor and keep
up to date with market trends • The dry range was extended by adding Soya meat into the
to ensure a satisfied and loyal portfolio in two flavours (Chicken and Curry) in two pack sizes.
customer base and retain the
• Launched an online sales platform called “Meat House”
competitive edge.
(www.meathouse.lk) to serve the customers who prefer the
e-marketing.
Human Key Human Resource areas • Maintaining ongoing dialogue on a proactive basis with
Resources, such as recruitment, career unionised employees to maintain cordial industrial relations.
Labour development, performance
• Embedded various personnel development programs to
Relations, management, training and
develop skills and capabilities.
Talent development, competency
Management, frameworks, coaching and • Obtained the OHSAS 18001:2007 certification, streamlining
Health and mentoring, talent management, organisational processes with continuous monitoring and
Safety reward and recognition, process improvement to ensure safe working conditions for its
compensation and benefits have employees.
been reviewed and revised to
• For enhancing safety, the Company has obtained the ISO
align with JKH Group policies
45001:2018 System certification related to OHSMS.
and industry best practice.
• Immediate actions to implement safety and hygiene protocols
The Company has 530 to ensure a safe working environment.
employees in its human cadre
• Comply with all the regulations which were imposed by the
and 34% of total staff are
Government of Sri Lanka to mitigate and control COVID-19.
represented by unions. For
KFP, weakening of labour • The factories are registered with district factory inspecting
relations could result in a engineer office to be comply with the new law introduced in
significant increase in labour 2019.
costs, disruption to operations,
increase in production down
time and could impact the
image of the Company.
Environmental As a manufacturing • KFP disposes the waste water of the Ja-Ela manufacturing
implications organisation, KFP has the facility directly to the Central Waste-water Treatment plant
arising from potential to adversely impact which is maintained by National Water Supply and Drainage
effluent water, the environment through Board.
gas leaks and water discharge, incinerator
• The waste water of the Pannala manufacturing facility is
incinerator fumes, disposal of waste, and
treated through an Effluent Treatment Plant within the factory
fumes the possibility of gas or fuel
before being irrigated in the land of the factory premises.
leaks that could escape to
the surrounding environment. • A dissolved Air Flotation system (DAF) was installed in Pannala
These impacts can affect the facility which separates the solid waste and reduce the
Company’s reputation which amount of effluent treated.
can have a prolonged adverse
• Waste water quality checks are done on a fortnightly basis
impact on operations.
through accredited laboratories to ensure the treated water
conforms to the COD and BOD levels that are stipulated
under the EPL.

2019/20 2020/21
Natural Natural disasters such as • Obtaining adequate insurance covers on all properties.
disaster and earthquakes, storms, floods
• Implemented Business Continuity Plan (BCP) and Disaster
fire and fire give rise to major
Recovery Plan (DCP) with regular drills.
adverse events which could
be beyond a controllable • The Company has factories in two separate locations, which
proportion and can significantly can also serve as an alternative in the case of an emergency
affect the Company’s business due to the occurrence of natural disasters or a fire.
process by way of loss of life,
• The Company has obtained “The Means of Escape” certificate
loss and damage to property
from factory inspecting engineer which is a legal requirement
and disruption of operations.
that needs to be fulfilled according to the section no 39 of the
factory ordinances No. 45 of 1942.
• Also, BCP is supported by an Occupational Health & Safety

Management System (OHSMS). KFP obtained the ISO
45001:2018, which is integrated with our daily operations
and OHSMS is supported by awareness, training and system
audits. KFP has also developed and trained the Emergency
response plan (ERP) for employees.
• The Company is registered with the fire brigade.

Breakdown A set of robust internal controls • Implementing a comprehensive authorisation matrix, clearly
of internal ensures a smooth continuity defining the authorities and responsibilities of each employee.
controls of operations thereby limiting
• Segregation of duties, definition of authority limits, operating
any opportunity to take undue
manuals, detective and preventive controls and internal and
advantage.
external audit procedures.
Credit Risk Credit facilities are offered to • Continuous evaluation of credit worthiness to set up credit limits.
the Company’s customers and
• Holding of bank guarantees.
distributors in keeping with the
business environment. Hence, • Granting approval on additional credit facilities by adequately
the Company is exposed to safeguarding exposures with sufficient asset backed securities.
the risk of defaulting payments
• Close monitoring of debtors and frequently ensuring the
and increase in cost of
outstanding are settled on time despite of the contraction of
operations due to bad debts.
the economic activities due to COVID-19 epidemic.
Terrorism, In an act of terrorism, the • Systematic review of contingency planning and scenario
breakdown of Company will be equally modelling with external professionals have enabled a firm BCP
law and order. impacted as any other business for the manufacturing business.
in the industry. The economic
and social distress in the world • Company will ensure enhanced security measures done in
or in the country caused by consultation with officials and security experts.
such disaster will also have a
significant negative impact on
the overall operations of the
Group. The business disruption
during such an event and
the weakening of consumer
sentiment in the aftermath can
be catastrophic for the business.
High Medium Low
78
ON PERFORMANCE
FINANCIAL INFORMATION
Annual Report of the Board of Directors 80
Audit Committee Report 87
Statement of Directors’ Responsibility 90
Independent Auditor’s Report 91
Income Statement 94
Statement of Comprehensive Income 95
Statement of Financial Position 96
Statement of Cash Flows 97
Statement of Changes in Equity 99
Index to Notes 100
Notes to the Financial Statements 101
Your Share in Detail 153
Ten Year Information at a Glance 155
Key Figures and Ratios 156
Real Estate Portfolio 157
Glossary of Financial Terminology 158
Corporate Information Inner Back Cover
Financial Calendar Date

First Quarter Released on 20th July 2020
Second Quarter Released on 27th October 2020
Third Quarter Released on 20th January 2021
Fourth Quarter Released on 20th May 2021
Annual Report 2020/2021 Released on 20th May 2021
Thirty Ninth Annual General Meeting on 23rd June 2021

ANNUAL REPORT OF THE BOARD
OF DIRECTORS
The Board of Directors of Keells Food Products PLC (Company) and Analysis sections of this Annual Report. These reports form
has pleasure in presenting the 39th Annual Report of your an integral part of the Annual Report of the Board of Directors
Company which covers the Audited Financial Statements of the and together with the Audited Financial Statements provide a fair
Company and its Subsidiary John Keells Foods India (Private) review of the performance of the Company and its Subsidiary
Limited (Subsidiary), Chairman’s Review, Corporate Governance during the financial year ended 31st March 2021.
Commentary, Management Discussion and Analysis, Risk
Management and all other relevant information for the year ended FINANCIAL STATEMENTS AND AUDITOR’S REPORT
31st March 2021. The Financial Statements for the year ended 31st March 2021
has been prepared, in accordance with SLFRSs/ LKASs, the
The content of this Annual Report has also considered the Accounting Standards issued by The Institute of Chartered
requirements of the Companies Act No.07 of 2007 (Companies Accountants of Sri Lanka (CA Sri Lanka) to converge with
Act), the relevant Listing Rules of the Colombo Stock Exchange International Financial Reporting Standards (IFRS) and
(CSE) and recommended best practices on reporting. International Accounting Standards (IAS). The Financial
Statements of the Company and KFP Group duly signed by the
The Company was incorporated on the 5th November 1982 as a Directors are provided on pages 94 to 152.
Public Limited Liability Company and the shares of the Company
were listed on the Colombo Stock Exchange. Subsequently ACCOUNTING POLICIES
in pursuant to the requirements of the Companies Act, the All the significant accounting policies based on the Accounting
Company was re-registered and given a new Company number Standards (SLFRS/ LKAS) issued by the CA of Sri Lanka are
PQ 3 on 15th June 2007. provided in detail, in the notes to the Financial Statements on
pages 101 to 152. There have been no changes in the accounting
CORPORATE CONDUCT AND VISION policies adopted by the KFP Group during the year under review
The business activities of the Company and its Subsidiary other than disclosing note 6 to the financial statements.
(collectively KFP Group) are conducted in accordance with the
highest levels of ethical standards with a view of achieving the GOING CONCERN
Company’s vision which is elaborated on page 3 of this Annual In determining the basis of preparing the Financial Statements for
Report. the year ended 31 March 2021, based on available information,
the management has assessed the prevailing and anticipated
PRINCIPLE ACTIVITIES effects of COVID-19 on the Group Companies and the
Company appropriateness of the use of the going concern basis.
The principal activity of the Company is the manufacture and sale
of processed meats, raw meats, crumbed products and other It is the view of the management there are no material
convenient food products, which remained unchanged during the uncertainties that may cast significant doubt on the Groups’ ability
year. to continue to operate as going concern due to the improved
operating environment despite the ongoing effects of the
Subsidiary pandemic and the operationalisation of risk mitigation initiatives
John Keells Foods India (Private) Limited. and continuous monitoring of business continuity and response
The principal activity of John Keells Foods India (Private) Limited plans at each business unit level along with the financial strength
(JKFI) is the marketing of processed meat products in India. JKFI of the Group. The management have formed judgment that the
was incorporated on the 7th of April 2008. JKFI did not carry out Company and its subsidiary have adequate resources to continue
any commercial operations during the year ended 31st March in operational existence for the foreseeable future and continue to
2021. adopt the going concern basis in preparing and presenting these
financial statements.
Ultimate Parent
The Company’s ultimate Parent and controlling entity is John In determining the above significant management judgements,
Keells Holdings PLC (JKH or Parent Company), which is estimates and assumptions, the impact of the COVID-19
incorporated in Sri Lanka. pandemic has been considered as of the reporting date and
specific considerations have been disclosed under the relevant
REVIEW OF BUSINESS notes in the Financial Statements. Having presented the outlook
A review of the financial and operational performance of the for the Group to the Board of Directors who are satisfied that the
Company during the year and future business development is Company and its subsidiary has adequate resources to continue
given in the Chairman’s Review and the Management Discussion in operational existence for the foreseeable future and hence
80
adopting the going concern basis in preparing and presenting REVENUE
these financial statements. The Revenue generated by the Company and the KFP Group for
the financial year amounted to Rs. 3,651 million (Rs. 3,591 million
STATED CAPITAL in 2019/20). An analysis of the Revenue is given in Note 13 to the
The total Stated Capital of the Company as at 31st March Financial Statements.
2021 was Rs. 1,295 million (Rs. 1,295 million as at 31st March
2020) details of which are provided in Note 31 to the Financial DIVIDENDS
Statements. An Interim Dividend of Rs. 7.00 per share for the financial year
2020/21 (Rs. 4.00 - 2019/20) was paid on the 16th of February 2021.
FUTURE DEVELOPMENTS AND IMPACT OF COVID-19
PANDEMIC The Board of Directors has now approved a final dividend of Rs.
Information on future developments and an assessment, to the 2.50 per share for the financial year 2020/21 to be paid on the 2nd
extent possible considering the current volatile and evolving of June 2021 to those shareholders on the register as of the 31st
landscape relating to the COVID-19 pandemic, are contained May 2021. In accordance with Sri Lanka Accounting Standard 10,
in the Chairman’s Message and Management Discussion and events after the reporting period, the declared dividend has not been
Analysis sections of this Annual Report. recognised as a liability as at 31st March 2021.
FINANCIAL RESULTS AND APPROPRIATIONS As required by Section 56(2) of the Companies Act, the Board of
The Profit After Tax of the KFP Group attributable to equity Directors has confirmed that the Company satisfies the solvency test
holders of the Parent Company for the year was Rs. 321 million in accordance with section 57 of Companies Act and a certificate
(Rs. 150 million 2019/20). A Synopsis of the KFP Group’s has been obtained from the Auditors, prior to declaring all dividends.
performance is presented below.
Dividend per share has been computed for all periods based on
For the year ended 31st March Group the number of shares in issue at the time of the dividend payout.
In Rs. ‘000s 2021 2020 The dividends are paid out of taxable profits of the Company and
Profit from Operating Activities 329,304 207,667 will be subjected to a withholding tax at the rate prevailing on the
Finance Cost (12,581) (12,234) date of payment.
Finance Income 9,518 9,285
PROVISION FOR TAXATION
Profit Before Tax 326,241 204,718
Provision for taxation has been computed at the rates given in
Taxation (Charge) including (5,261) (54,543)
Note 19 to the Financial Statements.
Deferred Tax
Profit After Tax 320,980 150,175
SEGMENT REPORTING
Other Comprehensive Income/ (loss) (5,591) 2,428 A segmental analysis of the activities of the KFP Group is given in
Unappropriated profit brought 285,844 286,241 Note 7 to the Financial Statements.
forward from the previous year
Profit available for Appropriation 601,233 438,844 RELATED PARTY TRANSACTIONS
Less Appropriations; The Company did not engage in any Non-Recurrent Related Party
Final dividend paid for the previous - (51,000) Transactions during the year under review. Recurrent Related
year Party Transactions exceeding 10% of the consolidated revenue as
per the Audited Financial Statements as at 31st March 2020 have
Interim dividend paid (178,500) (102,000)
been disclosed in the table below;
Balance Carried Forward 422,733 285,844
Name of Related Relationship Nature of the Aggregate Value Aggregate Value Terms and
Party Transactions of Related Party of Related Party Conditions of the
Transactions entered into Transactions as a Related Party
During the Financial Year % of Net Revenue Transactions
Jaykay Marketing Company under Sale of goods Rs.1,105,066,873.88 30.78 Ordinary course
Services (Private) common control of business on an
Limited arm’s length basis

ANNUAL REPORT OF THE BOARD OF DIRECTORS
The Directors confirm that transactions with Related Parties in detailed movement of Reserves is given in the Statement of
terms of the Sri Lanka Accounting Standard LKAS 24- Related Changes in Equity on page 99 of this Annual Report.
Party Disclosures have been detailed in Note 38 to the Financial
Statements, as well as that the requirements as per the listing EVENTS OCCURRING AFTER THE REPORTING PERIOD
rules of the CSE has been complied with. There have been no events subsequent to the reporting period,
which would have any material effect on the Company or KFP
DONATIONS Group other than those disclosed in Note 41 to the Financial
Total donations made by the KFP Group during the year Statements.
amounted to Rs. 3.9 million (Rs. 1.5 million in 2019/20). The KFP
Group made this donation to the John Keells Foundation which is CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
funded by JKH and its Subsidiaries and handles most of the JKH There were no material Contingent Liabilities or Capital
Group’s CSR initiatives and activities. Commitments as at 31st March 2021 except those disclosed in
Notes 39 to 40 to the Financial Statements.
PROPERTY PLANT AND EQUIPMENT AND INTANGIBLE
ASSETS OUTSTANDING LITIGATION
The value of Property Plant and Equipment as at the reporting In the opinion of the Directors and in consultation with the
date amounted to Rs. 1,546 million (Rs. 1,584 million 2019/20) Company lawyers, litigation currently pending against the
for the Company and its Subsidiary. The details of Property, Plant Company will not have a material impact on the reported financial
and Equipment and their movements are shown in Note 20 to the results or future operations of the Company.
Financial Statements. The details of Intangible assets are shown
in Note 22 to the Financial Statements. HUMAN RESOURCES (HR)
The Group has an equal opportunity policy and these principles
CAPITAL EXPENDITURE are enshrined in specific selection, training, development and
The total capital expenditure on acquisition of Property, Plant promotion policies, ensuring that all decisions are based on merit.
and Equipment and Intangible Assets of the Company and its The KFP Group practices equality of opportunity for all employees
subsidiary amounted to Rs. 90 million (Rs. 427 million in 2019/20) irrespective of ethnic origin, religion, political opinion, gender,
details of which are given in Note 20 and 22 to the Financial marital status or physical disability.
Statements. Capital expenditure approved but not provided in
the Financial Statements, is given in Note 40 to the Financial The number of persons directly employed by the Company as at
Statements. 31st March 2021 was 399 (383 as at 31st March 2020).
MARKET VALUE OF FREEHOLD PROPERTIES There were no material issues pertaining to employees and
The Land and Buildings owned by the Company were revalued by industrial relations during the year under review.
a professionally qualified independent valuer as at 31st December
2020. The valuation was carried out by Mr. P B Kalugalagedera EMPLOYEE SHARE OPTION SCHEME (ESOP)
Chartered Valuation Surveyor. The Directors are of the opinion • The Company does not offer its shares under an ESOP
that the re-valued amounts are not in excess of the current scheme.
market values of such properties.
• The ESOP scheme made available to the senior executives of
the Company is of the Parent Company JKH.
The details of the re-valued land and buildings of the Company
as well as the extent of land, location and the number of buildings • The Company has not directly or indirectly provided funds to
along with the relevant accounting policies are given in Note 20 its employees to purchase shares under the ESOP scheme.
of the Financial Statements and the Real Estate Portfolio on page
157 of this Annual Report. SYSTEM OF INTERNAL CONTROLS
The Directors acknowledge their responsibility for the system
INVESTMENTS of Internal Control and having conducted a review of internal
Details of investments held by the Company are disclosed in Note controls covering financial, operational, compliance controls and
23 to the Financial Statements. risk management, have obtained reasonable assurance of their
effectiveness and successful adherence for the period up to the
RESERVES
date of signing the Financial Statements.
Total reserves as at 31st March 2021 for the KFP Group
amounted to Rs. 782 million (Rs. 581 million in 2019/20). The
82
CORPORATE GOVERNANCE Mr. P D Samarasinghe (Chairman), Ms. S De Silva, Mr. A E H
Corporate Governance practices and principles with respect to Sanderatne and Mr. I Samarajiva
the management and operations of the KFP Group are set out
on pages 49 to 62 of this Annual Report. The Directors confirm The report of the Audit Committee is given on pages 87 to 89 of
that the KFP Group is in compliance with the rules on Corporate this Annual Report. The Audit Committee has reviewed all other
Governance as per the listing rules of the CSE. services provided by the External Auditors to the Group to ensure
that their independence as Auditor has not been compromised.
The Directors declare that:
Human Resources and Compensation Committee
• The Company and its Subsidiary have not engaged in any
As permitted by the Listing Rules of the CSE, the Human
activities, which contravene laws and regulations.
Resources and Compensation Committee of JKH, the Parent
Company of Keells Food Products PLC, functions as the Human
• The Directors have declared all material interests in contracts
Resources and Compensation Committee of the Company.
involving the Company and its Subsidiary and refrained from
The mandate and the scope of the Human Resources and
voting on matters in which they were materially involved.
Compensation Committee is set out in page 55 of this Annual
Report.
• The Company has made all endeavours to ensure the
equitable treatment to all shareholders.
The Human Resources and Compensation Committee of Parent
Company JKH comprises of three Independent Non- Executive
• The Company, being listed on the CSE, is compliant with the
Directors:
rules on Corporate Governance under the Listing Rules of the
CSE with regard to the composition of the Board and its Sub
Mr. D A Cabraal (Chairman), Mr. M A Omar and Dr. S S H
Committees.
Wijayasuriya.
• A review of internal controls covering financial, operational

Mr. K Balendra and Mr. G Cooray attended meetings by invitation.
and compliance controls and risk management has been
conducted, and the Directors have obtained a reasonable
The Remuneration Policy of the Company is detailed in the
assurance of their effectiveness and successful adherence.
Corporate Governance Report of this Annual Report.
• The Company is in compliance with the Code of Best Practice

Nominations Committee
on Corporate Governance (2013) jointly issued by the
The Nominations Committee of JKH, the Parent Company
Securities and Exchange Commission of Sri Lanka (SEC) and
of Keells Food Products PLC, functions as the Nominations
CA Sri Lanka.
Committee of the Company. The mandate and the scope of
the Nominations Committee is set out in page 56 of this Annual
The Board of Directors is committed to maintaining an effective
Report.
Corporate Governance structure and process. A full report on
Corporate Governance is found on pages 49 to 62.
The Nominations Committee members of the Parent Company
JKH are as follows;
RISK MANAGEMENT
The Board and the Management of the Company have put in
Mr. M A Omar (Chairman), Dr. S S H Wijayasuriya, Ms. M P Perera
place a comprehensive risk identification, measurement and
and Mr. K N J Balendra
mitigation process. The Risk Management process is an integral
part of the annual strategic planning cycle. A detailed overview of
Related Party Transactions Review Committee
the process is outlined in the Enterprise Risk Management Report
As permitted by the Listing Rules of the CSE, the Related Party
on pages 70 to 78.
Transactions Review Committee of JKH, the Parent Company
of Keells Food Products PLC, functions as the Related Party
BOARD SUB-COMMITTEES
Transactions Review Committee of the Company and its
Audit Committee
Subsidiary.
The Audit Committee of Keells Food Products PLC consists of
four (4) Non-Executive Independent Directors:

The Related Party Transactions Review Committee members of EQUITABLE TREATMENT TO ALL SHAREHOLDERS
the Parent Company are as follows; The Company has made every endeavour to ensure the equitable
treatment to all shareholders and has adopted adequate
Ms. M P Perera (Chairman), Mr. A N Fonseka and Mr. D A Cabraal measures to prevent information asymmetry.
Mr. K Balendra, Mr. G Cooray and Mr. M Thanthirige attended SUBSTANTIAL SHAREHOLDINGS
meetings by invitation. The list of the top twenty shareholders is given on page 154 of
this report.
The mandate and the scope of the Related Party Transactions
Review Committee is set out in pages 56 to 57 of this Annual INFORMATION TO SHAREHOLDERS
Report. The Board strives to be transparent and provide accurate
information to shareholders in all published material. The quarterly
Project Risk Assessment Committee financial information during the year has been sent to the CSE in a
Project Risk Assessment Committee of JKH, the Parent Company timely manner.
of Keells Food Products PLC, functions as the Project Risk
Assessment Committee of the Company and its Subsidiary. This DIRECTORATE
Committee was appointed on 26th July 2018. The Project Risk The Board of Directors of the Company who served during the
Assessment committee members of the Parent Company are as year and as at the end of the Financial Year are given below:
follows;
• Mr. K N J Balendra (Non-Executive, Non-Independent)
Dr. S S H Wijayasuriya (Chairman), Mr. K N J Balendra, Mr. J G A • Mr. J G A Cooray (Non-Executive, Non-Independent)
Cooray and Ms. M P Perera • Mr. D P Gamlath (Non-Executive, Non-Independent)
• Ms. P N Fernando (Non-Executive, Non-Independent)*
The Project Risk Assessment Committee policy is set out in page
• Mr. P D Samarasinghe (Non-Executive, Independent)
58 of this Annual Report.
• Ms. S De Silva (Non-Executive, Independent)
SHARE INFORMATION • Mr. I Samarajiva (Non-Executive, Independent)
An Ordinary Share of the Company was quoted on the CSE at Rs. • Mr. A E H Sanderatne (Non-Executive, Independent)
162.50 as at 31st March 2021 (Rs. 108.20 as at 31st March 2020).
*Ms. P N Fernando was appointed to the board w.e.f 01st of
Information relating to earnings, dividends, net assets and market January 2021.
value per share is given in the Ten-Year Information at a Glance
section on page 155, Key Figures and Ratios are given on page No other Director held office during the period under review.
156 of this report.
Brief Profiles of the Directors as at 31st March 2021, appear on
SHAREHOLDINGS pages 63 to 64 of this Annual Report.
There were 1,290 registered shareholders, holding ordinary voting
shares as at 31st March 2021 (1,295 registered shareholders as The Board of Directors of John Keells Foods India (Private)
at 31st March 2020). The distribution of shareholdings including Limited who served during the year and as at the end of the
the percentage held by the public is given on page 153 of this Financial Year are given below. No other Director held office
report. The Company is listed in the Diri Savi Board of CSE. during the period under review.
• Mr. J R Gunaratne*
FLOAT ADJUSTED MARKET CAPITALISATION
As at 31 March 2021 Keells Food Products PLC had a float • Mr. D P Gamlath
adjusted market Capitalisation of Rs. 416 million, 10.05% Public • Ms. P N Fernando**
shareholding which includes 1,288 Public shareholders. Thus, the
Company is compliant under option 2 of the minimum threshold *Mr. J R Gunaratne resigned from the Board on 31st December 2020.
requirements for the Diri Savi Board of the CSE, as per section **Ms. P N Fernando was appointed to the Board w.e.f 01st of
7.6 of the listing rules of the CSE. January 2021.
84
DIRECTORS INTEREST IN SHARES DIRECTORS’ MEETINGS
Shareholding of Directors and of their spouses in the Company is Details of Directors’ meetings is presented on page 53 of this
as follows; report.
Name of the Directors 31/03/2021 31/03/2020 INTERESTS REGISTER

No. of No. of The Company has maintained an Interests Register as
Shares Shares contemplated by the Companies Act. In compliance with the
Mr. K N J Balendra - Chairman - - requirements of the Companies Act this Annual Report contains
particulars of entries made in the Interests Register.
Mr. J G A Cooray - -
Mr. D P Gamlath - - Particulars of entries in the Interests Register for the Financial Year
Mr. P D Samarasinghe - - 2020/21;
Ms. S De Silva - -
Interests in Contracts
Mr. A E H Sanderatne - - The Directors have all made a General Disclosure to the Board of
Mr. I Samarajiva - - Directors as permitted by Section 192 (2) of the Companies Act
Ms. P N Fernando - - and no additional interests have been disclosed by any Director.
Indemnities and Remuneration

CEO’S INTEREST IN SHARES
Ms. P N Fernando was appointed as a Non-Executive Director of
CEO 31/03/2021 31/03/2020 the Company with effect from 1st January 2021 at the standard
No. of No. of Non-Executive fees approved by the Board for Non-Executive
Shares Shares Directors (if applicable) which fees are commensurate with the
Mr. S I Thanthirigoda - - market complexities of the Company.
RETIREMENT OF DIRECTORS BY ROTATION OR DIRECTORS’ RESPONSIBILITY FOR FINANCIAL

OTHERWISE AND THEIR RE-ELECTION REPORTING
Ms. P N Fernando retires in terms of Article 90 of the Articles of The Directors are responsible for the preparation of the Financial
Association of the Company and being eligible offers herself for Statements of the Company and the Group to reflect a true and
re-election. fair view of the state of its affairs. The Directors are of the view
that these Financial Statements have been prepared in conformity
Mr. J G A Cooray and Mr. D P Gamlath who retire by rotation in with the requirements of the Sri Lanka Accounting Standards,
terms of Article 83 of the Articles of Association of the Company Companies Act No.07 of 2007, Sri Lanka Accounting and
and being eligible offer themselves for re-election. Auditing Standards Act No. 15 of 1995 and the Listing Rules of
the CSE and code of Best Practice on Corporate Governance
REMUNERATION TO DIRECTORS (2013) jointly issued by the SEC and CA Sri Lanka.
Directors’ remuneration is established within a framework
approved by the Board of KFP and the Human Resources COMPLIANCE WITH LAWS AND REGULATIONS
and Compensation Committee of JKH. The Directors are of The Company and the Group has complied with all applicable
the opinion that the framework assures appropriateness of laws and regulations. A compliance checklist is signed on a
remuneration and fairness for the Company. The remuneration quarterly basis by responsible officers and any violations are
of the Non- Executive Directors is determined according to reported to the Audit Committee and Board of Directors.
scales of payment decided upon by the Board previously.
Details of Directors’ fees and emoluments paid during the year STATUTORY PAYMENTS
are disclosed in the Note 16 and Note 38.5 to the Financial The Directors confirm to the best of their knowledge that all taxes,
Statements. duties and levies payable by the KFP Group and all contributions,
levies and taxes payable on behalf of and in respect of the

employees of the Group and all other known statutory dues as ANNUAL GENERAL MEETING
were due and payable by the KFP Group as at the date of the The Notice of Meeting relating to the 39th Annual General Meeting
Statement of Financial Position have been paid or where relevant is given on page 159 of the Annual Report.
provided.
This Annual Report is signed for and on behalf of the Board of
SUSTAINABILITY Directors by:
The KFP Group pursues its business goals based on a model of
stakeholder governance. Findings of the continuous stakeholder
engagements have enabled the Company to focus on material
issues such as the conservation of natural resources and the

environment and material issues highlighted by other stakeholders
D P Gamlath J G A Cooray
such as the employees and the community. These steps have
Director Director
been encapsulated in a sustainability initiative which has seen
continuous progress over the last few years.
SUPPLIER POLICY
The Company applies an overall policy of agreeing and clearly Keells Consultants (Pvt) Limited
communicating terms of payment as part of the commercial Secretaries
agreements negotiated with suppliers, and endeavours to pay
20th May 2021
for its purchases in accordance with these agreed terms. As at
31st March 2021 the trade and other payables of the KFP Group
amounted to Rs. 367 million (Rs. 286 million 2019/20).
AUDITORS
The Financial Statements for the year has been audited by
Messrs. Ernst & Young, Chartered Accountants. The retiring
Auditors, Messrs. Ernst & Young has intimated their willingness to
continue in office and a resolution to re-appoint them as Auditors
and authorising the Directors to determine their remuneration; will
be proposed at the Annual General Meeting.
The Audit Committee reviews the appointment of the Auditor,

its effectiveness, independence and its relationship with the
Company, including the level of audit and non- audit fees paid to
the Auditors.
The details of fees paid to the Auditors for the Company and it’s
Subsidiary are set out in Note 16 to the Financial Statements.
As far as the Directors are aware, the Auditors have no other
relationship with the Company and it’s Subsidiary.
INDEPENDENT AUDITOR’S REPORT

The Auditor’s Report of the Financial Statements is given on
pages 91 to 93 of this Annual Report.
APPROVAL OF THE FINANCIAL STATEMENTS

The Audited Financial Statements for the financial year ended
31st March 2021 were approved by the Board of Directors on
20th May 2021.
86
AUDIT COMMITTEE REPORT
The powers and responsibilities of the Audit Committee are relating to the Company’s internal control over financial reporting,
governed by the Audit Committee Charter which is approved and key judgments and estimates in the preparation of Financial
adopted by the Board. The terms of reference comply with the Statements and the processes that support certification of the
requirements of the Corporate Governance Rules as per Section Financial Statements by the Directors and the CFO.
7.10 of the Listing Rules of the Colombo Stock Exchange (CSE).
The Audit Committee’s functions and scope are in compliance COMPOSITION OF THE AUDIT COMMITTEE
with the requirements of the Code of Best Practice on Audit The Audit Committee is a sub-committee of the Board of
Committees and conducted it’s affairs in compliance with the Directors, appointed by and responsible to the Board of Directors.
requirements of the Code of Best Practice on Audit Committees.
The Audit Committee consists of four Independent, Non-
The Committee is tasked with assisting the Board in fulfilling Executive Directors in conformity with the Listing Rules of The
its oversight responsibility to the shareholders, potential Colombo Stock Exchange.
shareholders, the investment community and other stakeholders
in relation to the integrity of the Financial Statements of the • Mr. P D Samarasinghe – Chairman
Group, ensuring that a good financial reporting system is in place • Ms. S De Silva
and is well managed in order to give accurate, appropriate and • Mr. A E H Sanderatne
timely information, that it is in accordance with the Companies Act
• Mr. I Samarajiva
and other legislative reporting requirements and that adequate
disclosures are made in the Financial Statements in accordance The Audit Committee comprises of individuals with extensive
with the Sri Lanka Accounting Standards. experience and expertise in the fields of Finance, Corporate
Management and Marketing. The Chairman of the Audit
The Audit Committee reviews the design and operational
Committee is a Chartered Accountant.
effectiveness of internal controls and implement changes where
required and ensures that the risk management processes are A brief profile of each member of the Audit Committee is given
effective and adequate to identify and mitigate risks. on pages 63 and 64 of this report under the section the Board of
Directors.
The Audit Committee also ensures that the conduct of the
business is in compliance with applicable laws and regulations MEETINGS OF AUDIT COMMITTEE
and policies of the Group. The Audit Committee meets as often as may be deemed
necessary or appropriate in its judgment and at least quarterly
The Audit Committee also assesses the Group’s ability to
each year. During the year under review there were four (4)
continue as a going concern in the foreseeable future.
meetings and the attendance of the committee members are
given in the table below.
The Committee evaluates the performance and the independence
of the Internal Auditors and the External Auditors. The Committee
The Chief Executive Officer, the industry group President, the
is also tasked with the responsibility of recommending to the
Chief Financial Officer and the Head of JKH Group Business
Board the re-appointment and change of External Auditors and to
Process Review attended such meetings by invitation and
recommend their remuneration and terms of engagement.
briefed the committee on specific issues. The External Auditors
and the Internal Auditors were also invited to attend meetings
In fulfilling its purpose, it is the responsibility of the Audit
when necessary. The proceedings of the Audit Committee are
Committee to maintain a free and open communication with the
reported to the Board of Directors by the Chairman of the Audit
Independent External Auditors, the outsourced Internal Auditors
Committee.
and the management of the Company and to ensure that all
parties are aware of their responsibilities.
Audit Committee Attendance
The Audit Committee is empowered to carry out any Members 29/4/2020 16/7/2020 22/10/2020 15/1/2021
investigations it deems necessary and review all internal control Mr. P D Samarasinghe    
systems and procedures, compliance reports, risk management
Ms. S De Silva    
reports etc. to achieve the objectives as stated above. The
Committee has reviewed and discussed with management and Mr. A E H Sanderatne    
Internal and External Auditors, the Audited Financial Statements, Mr. I Samarajiva    
the quarterly unaudited Financial Statements as well as matters

AUDIT COMMITTEE REPORT
SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR RISK AND CONTROL REVIEW
Oversight of Company and Consolidated Financial The Audit Committee has reviewed the Business Risk
Statements Management Process and Procedures adopted to manage and
On the 29th April 2021 the committee along with the Independent mitigate the effects of such risks and observed that the risk
External Auditors, who are responsible for expressing an opinion analysis exercise has been conducted. The key risks that could
on the truth and fairness of the Financial Statements reviewed impact operations have been identified and wherever necessary,
the Financial Statements of the Company and the Group and appropriate action has been taken to mitigate their impact to the
their conformity with the Sri Lanka Financial Reporting Standards minimum extent.
(SLFRS) and the Sri Lanka Accounting Standards (LKAS).
EXTERNAL AUDIT
The Committee also reviewed the Accounting Policies of the The External Auditors of the Company Messrs. Ernst & Young
Company and such other matters as are required to be discussed Chartered Accountants submitted a detailed audit plan for the
with the Independent External Auditors in compliance with financial year 2020/21, which specified, inter alia, the areas
Sri Lanka Auditing Standard 260 – Communication of Audit of operations to be covered in respect of the Company. The
Matters with those charged with Governance. The quarterly audit plan specified ‘areas of special emphasis’ which had
Financial Statements were also reviewed by the Committee and been identified from the last audit and from a review of current
recommended their adoption to the Board. operations. The Audit committee had meetings with the External
Auditor to review the scope, timelines of the audit plan and
The Committee also evaluated the process to assess the approach for the audits.
effectiveness of the internal financial controls that have been
designed to provide reasonable assurance to the Directors that The areas of special emphasis have been selected due to the
the Financial Reporting System can be relied upon in preparation probability of error and the material impact it can have on the
and presentation of the Financial Statements of the Company and Financial Statements. At the conclusion of the audit, the External
the Group. Auditors met with the Audit Committee to discuss and agree on
the treatment of any matter of concern discovered in the course
INTERNAL AUDIT of the audit and also to discuss the Audit Management Letters.
The Committee monitors the effectiveness of the internal audit
function and is responsible for approving their appointment Actions taken by the Management in response to the issues
or removal and for ensuring they have adequate access to raised were discussed with the Audit Committee. There were no
information required to conduct their audits. issues of significant importance during the year under review.
The internal audit function of the Company has been outsourced The Audit Committee also reviewed the audit fees of the External
to Messrs. PricewaterhouseCoopers (PWC) Private Limited, a firm Auditors of the Company and recommended its adoption by
of Chartered Accountants. The Audit Committee has agreed with the Board. It also reviewed the other services provided by the
the Internal Auditor as to the frequency of audits to be carried out, Auditors in ensuring that their independence as Auditors was not
the scope of the audit, the areas to be covered and the fee to be compromised.
paid for their services.
The Audit Committee has received a declaration from Messrs.
During the year under review, the Audit Committee has met Ernst & Young, as required by the Companies Act No.07 of 2007,
the Internal Auditors to consider their reports, management confirming that they do not have any relationship or interest in
responses and matters requiring follow up on the effectiveness of the Company, which may have a bearing on their independence
the internal controls and audit recommendations. within the meaning of the Code of Conduct and Ethics of The
Institute of Chartered Accountants of Sri Lanka.
The internal audit frequency depends on the risk profile of each
area, higher risk areas being on a shorter audit cycle. The Audit The Audit Committee has proposed to the Board of Directors
Committee is of the opinion that the above approach provides an that Messrs. Ernst & Young, Chartered Accountants, be
optimal balance between the need to manage risk and the costs recommended for re-appointment as Auditors of the Company for
thereof. the financial year commencing 1st April 2021, at the next Annual
General Meeting.
88
COMPLIANCE WITH FINANCIAL REPORTING AND
STATUTORY REQUIREMENTS
The Audit Committee receives a quarterly declaration from the
President and the Chief Financial Officer, listing any departures
from financial reporting, statutory requirements and Group
policies. Reported exceptions, if any, are followed up to ensure
that appropriate corrective action has been taken.
With the view of ensuring uniformity of reporting, the Group has

adopted the standardised format of Annual Financial Statements
developed by the ultimate Parent Company.
POTENTIAL FINANCIAL IMPLICATIONS ARISING FROM

COVID-19 PANDEMIC ON THE COMPANY
The Audit Committee reviewed the risk and going concern
assessment carried out by the Board after considering the
existing and potential financial implications of COVID-19 in the
annual plans, cash flow projections and funding arrangements.
The Committee is satisfied that the Company and its subsidiaries
are able to continue as a going concern. Further, the Committee
is also satisfied that the Company has made adequate
disclosures in the financial statements in relation to the above.
SUPPORT TO THE COMMITTEE

The Committee received excellent support and timely information
at all times from the Management during the year to enable them
to carry out its duties and responsibilities effectively.
EVALUATION OF COMMITTEE
The Audit Committee formally evaluated the performance of the
Committee as well as the individual contribution of each member.
Steps have been taken to address the matters highlighted
following such evaluation.
CONCLUSION
The Audit Committee is satisfied that the effectiveness of the
organisational structure of the Group in the implementation
of the accounting policies and operational controls, provide
reasonable assurance that the affairs of the Group are managed
in accordance with accepted policies and that assets are properly
accounted for and adequately safeguarded. The Committee is also
satisfied that the Group’s Internal and External Auditors have been
effective and independent throughout the period under review.
P D Samarasinghe
Chairman, Audit Committee
20th May 2021

STATEMENT OF DIRECTORS’
RESPONSIBILITY
The responsibility of the Directors, in relation to the Financial The Directors are required to prepare the Financial Statements
Statements, is set out in the following statement. The and to provide the Auditors with every opportunity to take
responsibility of the Auditors, in relation to the Financial whatever steps and undertake whatever inspections they may
Statements prepared in accordance with the provisions of the consider being appropriate to enable them to give their audit
Companies Act No. 07 of 2007 (‘Companies Act’), is set out in opinion.
the Independent Auditors Report.
Further, as required by section 56(2) of the Companies Act,
As per the provisions of the Companies Act No. 07 of 2007 the the Board of Directors confirm that the Company, satisfies the
Directors are required to prepare, for each financial year and place solvency test in accordance with Section 57 of the Companies
before a general meeting, Financial Statements which comprise Act, and has obtained a certificate from the Auditors, prior to
of; declaring the final dividend of Rs. 2.50 per share as well as for all
the dividend paid during the year ended 31st March 2021.
• A Statement of Income, which presents a true and fair view of
the profit or loss of the Company for the financial year; and
The Directors are of the view that they have discharged their
• A Statement of Other Comprehensive Income; and responsibilities as set out in this statement.
• A Statement of Financial Position, which presents a true and

COMPLIANCE REPORT
fair view of the state of affairs of the Company as at the end of
The Directors confirm that to the best of their knowledge,
the financial year.
all taxes, duties and levies payable by the Company and its
Subsidiary, all contributions, levies and taxes payable on behalf of
The Directors have ensured that, in preparing these Financial
the employees of the Company and its Subsidiary, and all other
Statements:
known statutory dues as were due and payable by the Company
• Appropriate accounting policies, have been selected and and its Subsidiary as at the date of the Statement of Financial
applied in a consistent manner and material departures, if any Position have been paid or, where relevant provided for except
have been disclosed and explained; and as specified in Note 39 to the Financial Statements covering
contingent liabilities.
• All applicable accounting standards as relevant have been
applied; and
By Order of the Board
• Reasonable and prudent judgements and estimates have
been made so that the form and substance of transactions
are properly reflected; and
• Provides the information required by and otherwise comply

with the Companies Act and the Listing Rules of the Colombo Keells Consultants (Private) Limited
Stock Exchange. Secretaries
The Directors are also required to ensure that the Company and 20th May 2021
its Subsidiary have adequate resources to continue in operation
to justify applying the going concern basis in preparing these
Financial Statements.
Further, the Directors have a responsibility to ensure that the

Company and its Subsidiary maintain sufficient accounting
records to disclose, with reasonable accuracy of the Financial
Position of the Company and of the Group.
The Directors are also responsible for taking reasonable steps to

safeguard the assets of the Company and its Subsidiary, and in
this regard to give a proper consideration to the establishment of
appropriate internal control systems with a view to preventing and
detecting fraud and other irregularities.
90
INDEPENDENT AUDITOR’S REPORT TO independent of the Group in accordance with the Code of Ethics
THE SHAREHOLDERS OF KEELLS FOOD PRODUCTS PLC issued by CA Sri Lanka (Code of Ethics) and we have fulfilled
Report on the audit of the Financial Statements our other ethical responsibilities in accordance with the Code of
Opinion Ethics. We believe that the audit evidence we have obtained is
We have audited the financial statements of Keells Food Products sufficient and appropriate to provide a basis for our opinion.
PLC (“the Company”) and the consolidated financial statements
of the Company and its subsidiary (“the Group”), which comprise Key Audit Matters
the statement of financial position as at 31 March 2021, and the Key audit matters are those matters that, in our professional
income statement and the statement of comprehensive income, judgment, were of most significance in our audit of the financial
statement of changes in equity and statement of cash flows statements of the current period. These matters were addressed in
for the year then ended, and notes to the financial statements, the context of our audit of the financial statements as a whole, and
including a summary of significant accounting policies. in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of
In our opinion, the accompanying financial statements of the how our audit addressed the matter is provided in that context.
Company and the Group give a true and fair view of the financial
position of the Company and the Group as at 31 March 2021, We have fulfilled the responsibilities described in the Auditor’s
and of their financial performance and cash flows for the year then responsibilities for the audit of the financial statements
ended in accordance with Sri Lanka Accounting Standards. section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures
Basis for opinion designed to respond to our assessment of the risks of material
We conducted our audit in accordance with Sri Lanka Auditing misstatement of the financial statements. The results of our audit
Standards (SLAuSs). Our responsibilities under those standards procedures, including the procedures performed to address the
are further described in the Auditor’s responsibilities for the matters below, provide the basis for our audit opinion on the
audit of the financial statements section of our report. We are accompanying financial statements.
Key Audit Matter How our audit addressed the Key Audit Matter
Valuation of Land and Buildings Our audit procedures included the following amongst
Property, Plant and Equipment include Land and Buildings carried at fair value. others;
The fair values of land and buildings were determined by an external valuer • We assessed the competency, capability and
engaged by the Group. objectivity of the external valuer engaged by the
Assessing the carrying value of Land and Buildings was a key audit Group.
matters due to: • We read the external valuer’s report and understood
• Materiality of the reported Land and Buildings balances which amounted the key estimates made and the approach taken by
to Rs. 709 Mn and represent 23% of the total assets as at 31/3/2021. the valuer in determining the valuation of land and
buildings.
• The degree of assumptions, judgements and estimates associated
with valuation of Land and Buildings amplified by the impact of • We engaged our internal specialised resources
COVID-19. The valuation contains estimates as there were fewer to assist us in assessing appropriateness of the
market transactions which are ordinarily a strong source of evidence valuation techniques used and the reasonableness of
regarding fair value. the significant judgements and assumptions such as,
per perch price and value per square foot.
Key areas of significant judgments, estimates and assumptions included
the following: We have also assessed the adequacy of the disclosures
• Estimate of per perch value of the land made in Note 20 to the financial statements relating to the
significant judgements, valuation technique and estimates.
• Estimate of the per square foot value of the buildings

Key Audit Matter How our audit addressed the Key Audit Matter
Assessment of Impairment of Rice Plant Assets Our audit procedures included the following amongst
As at 31st March 2021, the group held Rs. 144Mn of assets under the others;
Rice Plant which commenced operations in November 2019.
• Assessed the appropriateness of forecast revenue
and gross margin growth rates with comparable
As described in Note 20 to the financial statements, the Group has
market products and with reference to historical
estimated the recoverable amount of the Rice plant assets based on their
forecasting accuracy considering the impact of
value in use, derived from the value in use computation prepared by the
COVID-19 on those forecasts.
management.
• Evaluated the appropriateness and completeness
An impairment loss was not recognised subsequent to this assessment. of the information included in the value in use
calculation based on our cumulative knowledge
Assessment of Impairment of Rice plant assets was a key audit matter due of the business driven by our review of strategic
to the degree of underlying assumptions coupled with estimates that arise initiative and minutes of executive committee
when deriving the estimated cashflows used for value in use calculations. meetings.
• Assessed the appropriateness of the reasonableness

Key areas of significant judgments, estimates and assumptions included
of the significant judgements estimates and
the following:
assumptions such as volume growth rates and
• Future revenue growth and changes in gross margin including the discount rates applied with the support from our
potential impact from COVID-19 internal specialised resources.
• Long term growth rates
We have also assessed the adequacy of the disclosures
• Discount rate made in Note 20 to the financial statements.
OTHER INFORMATION INCLUDED IN THE GROUP’S management determines is necessary to enable the preparation
2020/21 ANNUAL REPORT of financial statements that are free from material misstatement,
Other information consists of the information included in the whether due to fraud or error.
Annual Report, other than the financial statements and our
auditor’s report thereon. Management is responsible for the other In preparing the financial statements, management is responsible
information. for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
Our opinion on the financial statements does not cover the using the going concern basis of accounting unless management
other information and we do not express any form of assurance either intends to liquidate the Group or to cease operations, or
conclusion thereon. has no realistic alternative but to do so.
In connection with our audit of the financial statements, our Those charged with governance are responsible for overseeing
responsibility is to read the other information and, in doing so, the Company’s and the Group’s financial reporting process.
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE
audit or otherwise appears to be materially misstated. If, based on FINANCIAL STATEMENTS
the work we have performed, we conclude that there is a material Our objectives are to obtain reasonable assurance about whether
misstatement of this other information, we are required to report the financial statements as a whole are free from material
that fact. We have nothing to report in this regard. misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
RESPONSIBILITIES OF MANAGEMENT AND THOSE is a high level of assurance, but is not a guarantee that an audit
CHARGED WITH GOVERNANCE conducted in accordance with SLAuSs will always detect a
Management is responsible for the preparation of financial material misstatement when it exists. Misstatements can arise
statements that give a true and fair view in accordance with Sri from fraud or error and are considered material if, individually or
Lanka Accounting Standards, and for such internal control as in the aggregate, they could reasonably be expected to influence
92
the economic decisions of users taken on the basis of these the Group to express an opinion on the consolidated financial
financial statements. statements. We are responsible for the direction, supervision
and performance of the group audit. We remain solely
As part of an audit in accordance with SLAuSs, we exercise responsible for our audit opinion.
professional judgment and maintain professional skepticism
throughout the audit. We also: We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
• Identify and assess the risks of material misstatement of the and significant audit findings, including any significant deficiencies
financial statements, whether due to fraud or error, design in internal control that we identify during our audit.
and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate We also provide those charged with governance with a statement
to provide a basis for our opinion. The risk of not detecting that we have complied with ethical requirements in accordance
a material misstatement resulting from fraud is higher than with the Code of Ethics regarding independence, and to
for one resulting from error, as fraud may involve collusion, communicate with them all relationships and other matters that
forgery, intentional omissions, misrepresentations, or the may reasonably be thought to bear on our independence, and
override of internal control. where applicable, related safeguards.
• Obtain an understanding of internal control relevant to the

From the matters communicated with those charged with
audit in order to design audit procedures that are appropriate
governance, we determine those matters that were of most
in the circumstances, but not for the purpose of expressing
significance in the audit of the financial statements of the current
an opinion on the effectiveness of the internal controls of the
period and are therefore the key audit matters. We describe these
Company and the Group.
matters in our auditor’s report unless law or regulation precludes
• Evaluate the appropriateness of accounting policies used public disclosure about the matter or when, in extremely rare
and the reasonableness of accounting estimates and related circumstances, we determine that a matter should not be
disclosures made by management. communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
• Conclude on the appropriateness of management’s use of
interest benefits of such communication.
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists
REPORT ON OTHER LEGAL AND REGULATORY
related to events or conditions that may cast significant doubt
REQUIREMENTS
on the Group’s ability to continue as a going concern. If we
As required by section 163 (2) of the Companies Act No. 07 of
conclude that a material uncertainty exists, we are required to
2007, we have obtained all the information and explanations
draw attention in our auditor’s report to the related disclosures
that were required for the audit and, as far as appears from our
in the financial statements or, if such disclosures are
examination, proper accounting records have been kept by the
inadequate, to modify our opinion. Our conclusions are based
Company.
on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the
CA Sri Lanka membership number of the engagement partner
Group to cease to continue as a going concern.
responsible for signing this independent auditor’s report is 2097.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the 20th May 2021
financial information of the entities or business activities within Colombo

INCOME STATEMENT
Group Company
For the year ended 31st March Note 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Continuing operations
Goods transferred at a point in time 13.1 3,651,241 3,590,579 3,651,241 3,590,579
Revenue from contracts with customers 3,651,241 3,590,579 3,651,241 3,590,579
Cost of sales (2,646,053) (2,623,785) (2,646,053) (2,623,785)
Gross profit 1,005,188 966,794 1,005,188 966,794

Other operating income 14.1 2,381 3,620 2,366 2,203
Selling and distribution expenses (441,215) (496,432) (441,215) (496,432)
Administrative expenses (189,961) (190,225) (188,883) (188,814)
Other operating expenses 14.2 (47,089) (76,090) (47,082) (76,343)
Results from Operating Activities 329,304 207,667 330,374 207,408
Finance cost 15.1 (12,581) (12,234) (12,581) (12,234)

Finance income 15.1 9,518 9,285 9,366 9,124
Net finance cost (3,063) (2,949) (3,215) (3,110)
Profit before tax 16 326,241 204,718 327,159 204,298
Tax expense 19.1 (5,261) (54,543) (5,261) (54,543)

Profit for the year 320,980 150,175 321,898 149,755
Attributable to:
Equity holders of the parent 320,980 150,175
320,980 150,175
Earnings per share

Basic 17.1 12.59 5.89
Diluted 17.2 12.59 5.89
Dividend per share 18.1 7.00 6.00
Figures in brackets indicate deductions.

The accounting policies and notes as set out in pages 101 to 152 form an integral part of these Financial Statements.
94
STATEMENT OF COMPREHENSIVE INCOME
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Profit for the year 320,980 150,175 321,898 149,755
Other comprehensive income

Other comprehensive income to be reclassified to
Income Statement in subsequent periods
Currency translation of foreign operations (68) (1,642) - -
Net other comprehensive loss to be reclassified to (68) (1,642) - -
Income Statement in subsequent periods
Other comprehensive income not to be reclassified
to Income Statement in subsequent periods
Revaluation of land and buildings 20.1 32,460 36,562 32,460 36,562
Re-measurement gain/ (loss) on defined benefit plans 35.3 (6,418) 3,373 (6,418) 3,373
Net other comprehensive income not to be 26,042 39,935 26,042 39,935
reclassified to Income Statement in subsequent
periods
Tax on other comprehensive income 19.2 29,357 (11,182) 29,357 (11,182)
Other comprehensive income for the year, net of tax 55,331 27,111 55,399 28,753
Total comprehensive income for the year, net of tax 376,311 177,286 377,297 178,508
Attributable to:
Equity holders of the parent 376,311 177,286
376,311 177,286


STATEMENT OF FINANCIAL POSITION
Group Company
As at 31st March Note 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
ASSETS
Non-current assets
Property, plant and equipment 20.1 1,546,009 1,583,519 1,546,009 1,583,519
Right of use assets 21.1 8,898 9,396 8,898 9,396
Intangible assets 22.1 244,678 242,308 244,678 242,308
Investment in subsidiary 23.1 - - 1,894 1,894
Non-current financial assets 24 45,140 42,530 45,140 42,530
Other non-current assets 25 9,120 11,744 9,120 11,744
1,853,845 1,889,497 1,855,739 1,891,391
Current assets
Inventories 26 543,139 399,214 543,139 399,214
Trade and other receivables 27 463,473 397,952 463,473 397,952
Amounts due from related parties 38.1 162,819 127,600 162,819 127,600
Income tax refund 19.3 - 7,801 - 7,801
Other current assets 28 14,865 23,334 14,865 23,334
Short term investments 29 514 1,795 - -
Cash in hand and at bank 30 29,979 39,574 29,406 39,331
1,214,789 997,270 1,213,702 995,232
Total assets 3,068,634 2,886,767 3,069,441 2,886,623
EQUITY AND LIABILITIES

Equity attributable to equity holders of the parent
Stated capital 31 1,294,815 1,294,815 1,294,815 1,294,815
Revenue reserves 32 422,733 285,844 420,363 282,556
Other components of equity 33 358,834 295,331 364,156 300,585
Total equity 2,076,382 1,875,990 2,079,334 1,877,956
Non-current liabilities
Interest-bearing loans and borrowings 34.1 85,668 121,881 85,668 121,881
Lease liabilities 21.1 8,720 8,864 8,720 8,864
Deferred tax liabilities 19.4 158,007 251,240 158,007 251,240
Employee benefit liabilities 35.1 121,361 102,766 121,361 102,766
373,756 484,751 373,756 484,751
Current liabilities
Trade and other payables 36 366,811 285,633 364,666 283,587
Amounts due to related parties 38.2 9,279 13,390 9,279 13,390
Income tax liabilities 19.3 19,273 - 19,273 -
Lease liabilities 21.1 1,041 960 1,041 960
Other current liabilities 37 17,857 6,308 17,857 6,244
Bank overdrafts 30 160,780 176,280 160,780 176,280
618,496 526,026 616,351 523,916
Total equity and liabilities 3,068,634 2,886,767 3,069,441 2,886,623
I certify that the Financial Statements comply with the requirements of the Companies Act No. 07 of 2007.

P N Fernando
Chief Financial Officer/ Director
The Board of Directors is responsible of these Financial Statements.
J G A Cooray D P Gamlath
Director Director
20th May 2021


96
STATEMENT OF CASH FLOWS
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before working capital changes A 518,246 364,730 519,316 364,471
(Increase) / Decrease in inventories (149,919) (63,961) (149,919) (63,961)

(Increase) / Decrease in trade and other receivables (65,523) 19,400 (65,523) 19,400
(Increase) / Decrease in amounts due from related parties (35,219) 13,564 (35,219) 13,564
(Increase) / Decrease in other current assets 8,469 25,340 8,469 25,251
(Increase) / Decrease in other non-current assets 2,624 (169) 2,624 (169)
(Increase) / Decrease in non-current financial assets 1,520 2,546 1,520 2,546
Increase / (Decrease) in trade and other payables 81,178 8,830 81,079 8,914
Increase / (Decrease) in amounts due to related parties (4,111) 5,059 (4,111) 5,059
Increase / (Decrease) in other current liabilities 11,549 (24,352) 11,613 (24,320)
Cash generated from operations 368,814 350,987 369,849 350,755
Finance income received 5,388 4,417 5,236 4,256

Finance cost paid (11,440) (11,025) (11,440) (11,025)
Tax paid 19.3 (42,063) (99,380) (42,063) (99,380)
Gratuity paid/transfers 35.3 (9,251) (1,640) (9,251) (1,640)
Net cash flow from operating activities 311,448 243,359 312,331 242,966
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Purchase and construction of property, plant and equipment 20.1 (87,694) (426,895) (87,694) (426,895)
Purchase of intangible assets 22.1 (2,410) - (2,410) -
Proceeds from sale of property, plant and equipment 154 12 154 12
Net cash flow used in investing activities (89,950) (426,883) (89,950) (426,883)
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Dividend paid 18.1 (178,500) (153,000) (178,500) (153,000)
Proceeds from long term interest bearing loans and borrowings 34.1 - 176,226 - 176,226
Repayment of long term interest bearing loans and borrowings 34.1 (36,213) (34,037) (36,213) (34,037)
Payment of lease liability 21.1 (2,093) (2,064) (2,093) (2,064)
Net cash flow used in financing activities (216,806) (12,875) (216,806) (12,875)
NET INCREASE/ (DECREASE) IN CASH AND CASH 4,692 (196,399) 5,575 (196,792)
EQUIVALENTS

STATEMENT OF CASH FLOWS
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
CASH AND CASH EQUIVALENTS AT THE BEGINNING (134,911) 63,130 (136,949) 59,843
Effect of exchange rate changes (68) (1,642) - -
CASH AND CASH EQUIVALENTS AT THE END (130,287) (134,911) (131,374) (136,949)
ANALYSIS OF CASH AND CASH EQUIVALENTS

Favourable balances
Short-term investments 29 514 1,795 - -
Unfavourable balances
Bank overdrafts 30 (160,780) (176,280) (160,780) (176,280)
Cash and cash equivalents (130,287) (134,911) (131,374) (136,949)
Note A
Profit before working capital changes
Profit before tax 326,241 204,718 327,159 204,298
Adjustments for:
Finance income* 15.1 (9,518) (9,285) (9,366) (9,124)
Finance cost 15.1 12,581 12,234 12,581 12,234
Depreciation of property, plant and equipment 20.1 156,832 129,790 156,832 129,790
Amortisation of right of use assets 21.1 1,387 1,283 1,387 1,283
Amortisation of intangible assets 22.1 40 73 40 73
Loss on sale of property, plant and equipment 16 678 606 678 606
Employees benefit provisions and related costs 35.2 21,428 18,330 21,428 18,330
Provision made on slow moving inventory 5,994 1,864 5,994 1,864
Provision for impairment of trade receivable 2 588 2 588
Share based payment expense 33.3 2,581 4,529 2,581 4,529
518,246 364,730 519,316 364,471
*Finance income from other financial instruments includes, notional interest pertaining to executive loans granted and interest on lease
liability which have been adjusted in the cashflow.
Cash and non-cash changes in liabilities arising from financing activities are disclosed in Note 34.1.
Cash and cash equivalents in the Statement of Financial Position comprises of cash at banks and in hand and short-term deposits with a
maturity of three months or less. For the purpose of the Cash Flow Statement, cash and cash equivalents consists of cash and short-term
deposits as defined above, net of outstanding bank overdrafts.

98
STATEMENT OF CHANGES IN EQUITY
Group Stated Revaluation Foreign Other Revenue Total

capital reserve currency capital reserves equity
translation reserve
reserve
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
As at 1st April 2019 1,294,815 218,141 (3,612) 51,590 286,241 1,847,175
Profit for the year - - - - 150,175 150,175
Other comprehensive income/(loss) - 26,325 (1,642) - 2,428 27,111
Total comprehensive income/ (loss) - 26,325 (1,642) - 152,603 177,286
Share based payments - - - 4,529 - 4,529
Final dividend paid - 2018/19 - - - - (51,000) (51,000)
Interim dividend paid -2019/20 - - - - (102,000) (102,000)
As at 31st March 2020 1,294,815 244,466 (5,254) 56,119 285,844 1,875,990
Profit for the year - - - - 320,980 320,980
Other comprehensive income/(loss) - 60,990 (68) - (5,591) 55,331
Total comprehensive income/(loss) - 60,990 (68) - 315,389 376,311
Share based payments - - - 2,581 - 2,581
Interim dividend paid -2020/21 - - - - (178,500) (178,500)
As at 31st March 2021 1,294,815 305,456 (5,322) 58,700 422,733 2,076,382
Company Stated Revaluation Other Revenue Total

capital reserve capital reserves equity
reserve
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
As at 1st April 2019 1,294,815 218,141 51,590 283,373 1,847,919
Profit for the year - - - 149,755 149,755
Other comprehensive income - 26,325 - 2,428 28,753
Total comprehensive income - 26,325 - 152,183 178,508
Share based payments - - 4,529 - 4,529
Final dividend paid - 2018/19 - - - (51,000) (51,000)
Interim dividend paid -2019/20 - - - (102,000) (102,000)
As at 31st March 2020 1,294,815 244,466 56,119 282,556 1,877,956
Profit for the year - - - 321,898 321,898
Other comprehensive income/ (loss) - 60,990 - (5,591) 55,399
Total comprehensive income - 60,990 - 316,307 377,297
Share based payments - - 2,581 - 2,581
Interim dividend paid -2020/21 - - - (178,500) (178,500)
As at 31st March 2021 1,294,815 305,456 58,700 420,363 2,079,334


INDEX TO NOTES
CORPORATE AND GROUP INFORMATION

1 Corporate information 101
2 Group information 101
BASIS OF PREPARATION AND OTHER SIGNIFICANT ACCOUNTING POLICIES

3 Basis of preparation 101
4 Summary of significant accounting policies 102
5 Significant accounting judgements, estimates and assumptions 103
6 Changes in accounting standards and standards issued but not yet effective 104
GROUP BUSINESS, OPERATION AND MANAGEMENT

7 Operating segment information 104
8 Basis of consolidation 105
9 Business combinations and goodwill 106
10 Financial risk management objectives and policies 107
11 Fair value measurement and related fair value disclosures 115
12 Financial instruments and related policies 116
NOTES TO INCOME STATEMENT, STATEMENT OF COMPREHENSIVE

INCOME AND STATEMENT OF FINANCIAL POSITION
13 Revenue from contracts with customers 120
14 Other operating income and other operating expenses 121
15 Net finance income 122
16 Profit before tax 123
17 Earnings per share 123
18 Dividend per share 124
19 Taxes 124
20 Property, plant and equipment 129
21 Leases 134
22 Intangible assets 136
23 Investment in subsidiary 138
24 Non-current financial assets 139
25 Other non-current assets 139
26 Inventories 140
27 Trade and other receivables 140
28 Other current assets 141
29 Short-term investments 141
30 Cash in hand and at bank 142
31 Stated capital 142
32 Revenue reserves 142
33 Other components of equity 142
34 Interest-bearing loans and borrowings 145
35 Employee benefit liabilities 145
36 Trade and other payables 148
37 Other current liabilities 148
38 Related party transactions 149
OTHER DISCLOSURES
39 Contingent liabilities 152
40 Capital and other commitments 152
41 Events after the reporting period 152
100
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE AND GROUP INFORMATION in Equity and the Statement of Cash Flows, together
with the accounting policies and notes (the “Financial
1. CORPORATE INFORMATION
Statements”) have been prepared in accordance with Sri
Reporting entity
Lanka Accounting Standards (SLFRS/ LKAS) as issued by
Keells Food Products PLC (PQ3) is a Public Liability
the Institute of Chartered Accountants of Sri Lanka (CA Sri
Company incorporated and domiciled in Sri Lanka and
Lanka) and in compliance with the Companies Act No.07
is listed in the Colombo Stock Exchange. The registered
of 2007.
office of the Company is at No.117, Sir Chittampalam A.
Gardiner Mawatha, Colombo 2, and the principal place
2. GROUP INFORMATION
of business is at no. 16, Minuwangoda Road, Ekala, Ja
Parent Enterprise and Ultimate Parent Enterprise
Ela. The Company also has a manufacturing facility at the
The Company’s Parent undertaking is John Keells
Makandura Industrial Estate in Pannala.
Holdings PLC. The Directors are of the opinion that the
Company’s Ultimate Parent undertaking and controlling
The issued ordinary shares of the Company are listed on
party is John Keells Holdings PLC which is incorporated
the Colombo Stock Exchange.
in Sri Lanka.
Consolidated Financial Statements
The Financial Statements for the year ended 31st March
BASIS OF PREPARATION AND OTHER
2021, comprise "the Company" referring to Keells Food
SIGNIFICANT ACCOUNTING POLICIES
Products PLC as the Holding Company and "the Group" 3. BASIS OF PREPARATION
referring to the Subsidiary whose accounts have been The Consolidated Financial Statements have been
consolidated therein. prepared on an accrual basis and under the historical
cost convention except for Land and Buildings that has
Approval of Consolidated Financial Statements been measured at fair value.
The Consolidated Financial Statements of the Group for
the year ended 31st March 2021 were authorised for Presentation and functional currency
issue by the Directors on the 20th May 2021. The Consolidated Financial Statements are presented in
Sri Lankan Rupees, which is the Group’s functional and
Principal activities and nature of operations presentation currency, which is the primary economic
Company environment in which the holding Company operates.
The principal activities of the Company were manufacture Each entity in the Group uses the currency of the primary
and sale of processed meats and other convenient food economic environment in which they operate as their
products which remained unchanged during the year. functional currency.
Subsidiary Each material class of similar items is presented

The principal activity of John Keells Foods India (Private) cumulatively in the Financial Statements. Items of
Limited is marketing of processed and formed meat dissimilar nature or function are presented separately
products, which remained unchanged during the year. unless they are immaterial as permitted by the Sri Lanka
Accounting Standard-LKAS 1 on ‘Presentation of
The Subsidiary did not carry out any commercial Financial Statements’.
operation during the year ended 31st March 2021.
All financial information presented in Sri Lankan Rupees
Responsibility for Financial Statements has been rounded to the nearest rupees thousand (LKR
The responsibility of the Board of Directors in relation to ‘000) except when otherwise indicated.
the Financial Statements is set out in the Statement of
Directors’ Responsibility report in the Annual report. Comparative information
The presentation and classification of the Financial
Statements of compliance Statements of the previous years have been amended if
The Financial Statements which comprise the Income necessary, where relevant for better presentation and to
Statement, Statement of Comprehensive Income, be comparable with those of the current year.
Statement of Financial Position, Statement of Changes

Going Concern • expected to be realised or intended to be sold or

In determining the basis of preparing the financial consumed in normal operating cycle
statements for the year ended 31 March 2021, based
• held primarily for the purpose of trading
on available information, the management has assessed
the prevailing and anticipated effects of COVID-19 on the • expected to be realised within twelve months after the
Group Companies and the appropriateness of the use of reporting period, or
the going concern basis.
• cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
It is the view of the management there are no material
twelve months after the reporting period
uncertainties that may cast significant doubt on
the Groups’ ability to continue to operate as going
All other assets are classified as non-current.
concern due to the improved operating environment
despite the ongoing effects of the pandemic and the
A liability is current when:
operationalisation of risk mitigation initiatives and
continuous monitoring of business continuity and • it is expected to be settled in normal operating cycle
response plans at each business unit level along with the • it is held primarily for the purpose of trading
financial strength of the Group. The management have
formed judgment that the Company and its subsidiary • it is due to be settled within twelve months after the
have adequate resources to continue in operational reporting period, or
existence for the foreseeable future and continue to adopt • there is no unconditional right to defer the settlement
the going concern basis in preparing and presenting these of the liability for at least twelve months after the
financial statements. reporting period.
In determining the above significant management The Group classifies all other liabilities as non-current.
judgements, estimates and assumptions, the impact of
the COVID-19 pandemic has been considered as of the Deferred tax assets and liabilities are classified as non-
reporting date and specific considerations have been current assets and liabilities accordingly.
disclosed under the relevant notes.
Foreign currency translation, foreign currency
4. SUMMARY OF SIGNIFICANT ACCOUNTING transactions and balances
POLICIES The Group’s Financial Statements are presented in
Summary of significant accounting policies have been Sri Lanka rupees, which is the Group’s functional and
disclosed along with the relevant individual notes in the presentation currency.
subsequent pages.
The functional currency is the currency of the primary
Those accounting policies presented with each note, have economic environment in which the entities of the Group
been applied consistently by the Group. operate.
Other Significant accounting policies not covered with All foreign exchange transactions are converted to
individual notes functional currency, at the rates of exchange prevailing at
Following accounting policies which have been applied the time the transactions are affected.
consistently by the Group, are considered to be significant
but are not covered in any other sections. Monetary assets and liabilities denominated in foreign
currency are retranslated to functional currency
Current versus non-current classification equivalents at the spot exchange rate prevailing at the
The Group presents assets and liabilities in the Statement reporting date.
of Financial Position based on current/ non-current
classification. An asset is considered as current when it is:
102
Non-monetary items that are measured in terms of The exchange rates applicable during the period were as follows:
historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial Statement of Income
transactions. Non-monetary assets and liabilities are Financial Position Statement
translated using exchange rates that existed when the Currency Closing rate as at Average
values were determined. The gain or loss arising on 31st March rate
translation of non-monetary items is recognised in line 2021 2020 2020/21 2019/20
with the gain or loss of the item that gave rise to the Rs. Rs. Rs. Rs.
translation difference.
Indian Rupee 2.73 2.51 2.55 2.53
Foreign operations
5. SIGNIFICANT ACCOUNTING JUDGEMENTS,
The Statement of Financial Position and Income
ESTIMATES AND ASSUMPTIONS
Statement of the overseas Subsidiary which is deemed
The preparation of the Financial Statements of the Group
to be foreign operation is translated to Sri Lanka rupees
require the management to make judgments, estimates
at the rate of exchange prevailing as at the reporting date
and assumptions, which may affect the amounts of
and at the average annual rate of exchange for the period
income, expenditure, assets , liabilities and the disclosure
respectively.
of contingent liabilities, at the end of the reporting period.
The exchange differences arising on the translation

Uncertainty about these assumptions and estimates could
are taken directly to Other Comprehensive Income.
result in outcomes that require a material adjustment
On disposal of a foreign entity, the deferred cumulative
to the carrying amount of assets or liabilities affected in
amount recognised in Other Comprehensive Income
future periods. In the process of applying the Group’s
relating to that particular foreign operation is recognised in
accounting policies , management has made various
the Income Statement.
judgements. Those which management has assessed
to have the most significant effect on the amounts
Any goodwill arising on the acquisition of a foreign
recognised in the Consolidated Financial Statements
operation subsequent to 1st April 2012 and any fair
have been discussed in the individual notes of the related
value adjustments to the carrying amounts of assets and
Financial Statement line items.
liabilities arising on the acquisition are treated as assets
and liabilities of the foreign operation and translated at the
The key assumptions concerning the future and other
closing rate.
key sources of estimation uncertainty at the reporting
date , that have a significant risk of causing a material
Prior to 1st April 2012, the date of transition to SLFRS/
adjustment to the carrying amounts of assets and
LKAS, the Group treated goodwill and any fair value
liabilities within the next financial year, are also described
adjustments to the carrying amounts of assets and
in the individual notes to the Financial Statements.
liabilities arising on the acquisition as assets and liabilities
The Group has based its assumptions and estimates
of the parent. Therefore, those assets and liabilities are
on parameters available when the financial statements
non-monetary items already expressed in the functional
were prepared. Existing circumstances and assumptions
currency of the parent and no further translation
about future developments, however ,may change due to
differences occur.
market changes or circumstances arising that are beyond
the control of the Group. Such changes are reflected in
During the year the extent of fluctuation in the Sri Lankan
the assumptions when they occur.
Rupee exchange rate to the Indian Rupee can be
observed by looking at the two extremes in the exchange
The line items which have most significant effect on
rates that prevailed during the year which is the highest
accounting, judgements, estimate and assumptions are
and lowest rate set during the year. This is especially
as follows;
important when deducing the potential foreign currency
translation impact that could affect the Group’s Financial
Statements.

5. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONTD.)

a) Valuation of property, plant and equipment - Note 20.2
b) Impairment of non-financial assets - Note 23 and 22.2
c) Taxes - Note 19
d) Employee benefit liability - Note 35
e) Share based payments - Note 33.3
f) Goodwill - Note 22.2
g) Provision for expected credit losses of trade receivables and contract assets - Note 10.1.5
h) Leases - Estimating the incremental borrowing rate - Note 21
i) Going Concern- Note 3
6. CHANGES IN ACCOUNTING STANDARDS AND STANDARDS ISSUED BUT NOT YET EFFECTIVE
6.1 Changes in accounting standard
The following amendments and improvements do not expect to have a significant impact on the Group’s financial statements.
• Amendments to SLFRS 3: Definition of a Business
• Amendments to SLFRS 7 and SLFRS 9 Interest Rate Benchmark Reform
• Amendments to LKAS 1 and LKAS 8 Definition of Material
• Conceptual Framework for Financial Reporting
• Amendments to SLFRS 16 COVID-19 Related Rent Concessions
7. OPERATING SEGMENT INFORMATION

Accounting Policy
The Group’s internal organisation and management is structured based on individual products and services which are similar in
nature and process and where the risks and returns are similar. The operating segments represent the Groups’ business structure.
There are two segments identified as Manufacturing and Trading, these operating segments are monitored and strategic decisions
are made on the basis of each segment’s operating results.
The measurement policies the Company uses for segment reporting under SLFRS 8 are the same as those used in its Financial Statements.
Segment information
Segment information has been prepared in conformity with the Accounting Policies adopted for preparing and presenting the
Financial Statements of the Group.
7.1 BUSINESS SEGMENT ANALYSIS -GROUP

2021 2020
For the year ended 31st March Manufacturing Trading Total Manufacturing Trading Total
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Disaggregation of revenue - Timing of
revenue recognition
Goods transferred at a point in time 3,393,188 258,053 3,651,241 3,342,480 248,099 3,590,579
Total segment revenue from contracts with 3,393,188 258,053 3,651,241 3,342,480 248,099 3,590,579
customers
Segment Results 933,295 71,893 1,005,188 898,859 67,935 966,794
Other operating income 2,381 - 2,381 3,620 - 3,620
Selling and distribution expenses (435,947) (5,268) (441,215) (491,581) (4,851) (496,432)
Administrative expenses (187,152) (2,809) (189,961) (187,541) (2,684) (190,225)
Other operating expenses (46,291) (798) (47,089) (74,191) (1,899) (76,090)
Operating profit 266,286 63,018 329,304 149,166 58,501 207,667
104
2021 2020
Manufacturing Trading Total Manufacturing Trading Total
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Finance cost (12,581) - (12,581) (12,234) - (12,234)
Finance income 9,518 - 9,518 9,285 - 9,285
Net finance cost (3,063) - (3,063) (2,949) - (2,949)
Profit before tax 263,223 63,018 326,241 146,217 58,501 204,718
Tax expense (688) (4,573) (5,261) (51,605) (2,938) (54,543)
Profit after tax 262,535 58,445 320,980 94,612 55,563 150,175
Segment Assets 3,003,376 65,258 3,068,634 2,841,036 45,731 2,886,767

Segment Liabilities 964,940 27,312 992,252 1,010,701 76 1,010,777
Purchase and construction of PPE* 87,694 - 87,694 426,895 - 426,895
Addition to IA** 2,410 - 2,410 - - -
Depreciation of PPE* 156,832 - 156,832 129,790 - 129,790
Amortisation of IA** 40 - 40 73 - 73
Amortisation of ROUA*** 1,387 - 1,387 1,283 - 1,283
Employees benefit provisions and related costs 21,428 - 21,428 18,330 - 18,330
PPE* - Property plant and equipment IA** - Intangible assets ROUA*** - Right of use assets
Non-current assets have not been allocated to the trading segment.
8. BASIS OF CONSOLIDATION
Accounting Policy
The Consolidated Financial Statements comprise the Financial Statements of the Company and its Subsidiary as at 31st March
2021. Control is achieved when the Group is exposed or has right, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee.
Specially, the Group controls an investee if, and only if, the Group has:
• Power over the investee (i.e, existing right that give it the current ability to direct the relevant activities of the investee)
• Exposure, or right, to variable return from its involvement with the investee
• The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
• T he contractual arrangement with the other vote holders of the investee

• Right arising from other contractual arrangements
• The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a Subsidiary begins when the Group obtains control over the Subsidiary
and ceases when the Group loses control of the Subsidiary. Assets, liabilities, income and expenses of a Subsidiary acquired or
disposed of during the year are included in the Consolidated Financial Statements from the date the Group gains control until the
date the Group ceases to control the Subsidiary.

8. BASIS OF CONSOLIDATION (CONTD.)

Profit or loss and each component of Other Comprehensive Income (OCI) are attributed to the equity holders of the Parent of the
Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
Subsidiary
A Subsidiary is an enterprises controlled by the Parent.
The following Company has been consolidated under section 152 of the Companies Act No.7 of 2007, where the Company
controls the composition of the Board of Directors of this Company.
John Keells Foods India (Private) Limited 100%
John Keells Foods India (Private) Limited was incorporated in India on the 7th of April 2008.
A Subsidiary is fully consolidated from the date of acquisition or incorporation, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases.
The Financial Statement of the Subsidiary is prepared for the same reporting period as the Parent Company, which is 12 months
ending 31st March, using consistent accounting policies.
The total profits and losses for the year of the Company and of its Subsidiary included in consolidation are shown in the
Consolidated Income Statement and Consolidated Statement of Comprehensive Income and all assets and liabilities of the
Company and of its Subsidiary included in consolidation are shown in the Consolidated Statement of Financial Position.
The Consolidated Statements of Cash Flows includes the Cash Flows of the Company and the Subsidiary. A change in the
ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a Subsidiary, it:

• Derecognises the assets (including goodwill) and liabilities of the subsidiary.
• Derecognises the carrying amount of any non-controlling interest.
• Derecognises the cumulative translation differences, recorded in equity.
• Recognises the fair value of the consideration received.
• Recognises the fair value of any investment retained.
• Recognises any surplus or deficit in profit or loss.
• Reclassifies the Parent’s share of components previously recognised in Other Comprehensive Income to profit or loss or
retained earnings, as appropriate.
Non-controlling interest which represents the portion of profit or loss and net assets not held by the Group, are shown as a
component of profit for the year in the Consolidated Income Statement and Statement of Comprehensive Income and as a
component of equity in the Consolidated Statement of Financial Position, separately from Parent’s shareholders’ equity.
9. BUSINESS COMBINATIONS AND GOODWILL

Accounting Policy
Acquisitions are accounted for using the acquisition method of accounting. The Group measures goodwill is measured at the
acquisition date as the fair value of the consideration transferred less the recognised amount (generally fair value) of the identifiable
assets acquired, all measured as of the acquisition date.
Transaction costs incurred in connection with a business combination are expensed as incurred.
106
Goodwill is initially measured at cost being the excess of the consideration transferred over the Company’s identifiable assets
acquired. If this consideration is lower than the fair value of the acquired assets, the difference is recognised in the Income Statement.
After 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 maybe impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the
Group’s cash generating unit that is expected to benefit from the combination, irrespective of whether other assets or liabilities of
the acquire are assigned to those units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where
the recoverable amount of the cash generating unit is less than the carrying amount, an impairment loss is recognised. The
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets
pro-rata to the carrying amount of each asset in the unit.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss
on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation
disposed of and the portion of the cash-generating unit retained.
10 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company and its subsidiary has loans and other receivables, trade and other receivable and cash and short-term deposits
that arise directly from its operations.
The Company and its subsidiary's principal financial liabilities, comprise of loans and borrowings, trade and other payables. The
main purpose of these financial liabilities is to finance the Company and its subsidiary's operations and to provide guarantees to
support it's operations.
The financial risk governance framework provides assurance to the senior management that the financial risk activities are governed
by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group's
policies and risk objectives. The Company and its subsidiary are exposed to market risk, credit risk and liquidity risk.
10.1 Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to
a financial loss. The Company and its subsidiary is exposed to credit risk from its operating activities (primarily trade receivables)
and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other
financial instruments.
The Company and its subsidiary trades only with recognised, creditworthy third parties. It is the Company and its subsidiary's
policy that all clients who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis with the result that the Company and its subsidiary's exposure to bad debts is not
significant.
With respect to credit risk arising from the other financial assets of the Company and its subsidiary, such as cash and cash
equivalents the Company and its subsidiary's exposure to credit risk arises from default of the counterparty. The Group manages
its operations to avoid any excessive concentration of counterparty risk and the Company and its subsidiary takes all reasonable
steps to ensure the counterparties, fulfil their obligations.
The Group’s exposure to credit risk is influenced by the individual characteristics of each customer. The individual receivable balances
were re-assessed, specific provisions were made wherever necessary, existing practice on the provisioning of trade receivables were
re-visited and adjusted to reflect the rearrangement of homogeneous groups which the COVID-19 outbreak has affected different
types of customers. Receivable balances are monitored on an ongoing basis to minimise bad debt risk and to ensure default rates are
kept very low whilst the improved operating environment itself during the financial year has resulted in improved collections.

10.1.1 Credit risk exposure

The maximum risk positions of financial assets which are generally subject to credit risk are equal to their carrying amounts
(without consideration of collateral, if available).
Following table shows the maximum risk positions;
As at 31st March 2021

Group Note Non-current Cash in Trade Short-term Amounts due Total % of
financial hand and at and other investments from related allocation
assets bank receivables parties
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Government securities 10.1.2 - - - - - - -
Deposits with bank 10.1.3 - - - 514 - 514 -
Loans to executives 10.1.4 45,140 - 17,790 - - 62,930 9
Trade and other
receivables 10.1.5 - - 445,683 - - 445,683 64
Amounts due from
related parties 10.1.6 - - - - 162,819 162,819 23
Cash in hand and at
bank 10.1.7 - 29,979 - - - 29,979 4
Total credit risk
exposure 45,140 29,979 463,473 514 162,819 701,925 100

Group Note Non-current Cash in Trade Short-term Amounts due Total % of
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Deposits with bank 10.1.3 - - - 1,795 - 1,795 -
Trade and other
receivables 10.1.5 - - 381,138 - - 381,138 63
Amounts due from
related parties 10.1.6 - - - - 127,600 127,600 21
Cash in hand and at
bank 10.1.7 - 39,574 - - - 39,574 6
Total credit risk
exposure 42,530 39,574 397,952 1,795 127,600 609,451 100
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Company Note Non-current Cash in Trade Short-term Amounts due Total % of
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Trade and other
receivables 10.1.5 - - 445,683 - - 445,683 64
Amounts due from
related parties 10.1.6 - - - - 162,819 162,819 23
Cash in hand and at
bank 10.1.7 - 29,406 - - - 29,406 4
Total credit risk
exposure 45,140 29,406 463,473 - 162,819 700,838 100

Company Note Non-current Cash in Trade Short-term Amounts due Total % of
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Trade and other
receivables 10.1.5 - - 381,138 - - 381,138 63
Amounts due from
related parties 10.1.6 - - - - 127,600 127,600 21
Cash in hand and at
bank 10.1.7 - 39,331 - - - 39,331 6
Total credit risk
exposure 42,530 39,331 397,952 - 127,600 607,413 100
10.1.2 Government securities

As shown in table in 10.1.1, for the Group and for the Company doesn’t held investments in government securities as at 31st
March 2021 and 2020. Government securities are usually referred to as risk free due to the sovereign nature of the instrument.


10.1.3
Deposits with bank
Deposits with banks mainly consist of fixed and call deposits as at 31st March 2021.
As at 31st March 2021, fixed and call deposits for the Group comprise of 100% rated “AAA” (2019/20-100% rated “A+”) and for
the Company does not have any deposits with banks.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. ‘000 Rating % Rs. ‘000 Rating % Rs. ‘000 Rating % Rs. ‘000 Rating %
of total of total of total of total
AAA* 514 100 - - - - - -
A+* - - 1,795 100 - - - -
Total 514 100 1,795 100 - - - -
* Rating agency-Fitch
10.1.4
Loans to executives
Loans to executives is made up of vehicle loans which are given to staff at assistant manager level and above. The Company has
obtained the necessary Power of Attorney/promissory notes as collateral for the loans granted.
10.1.5 Trade and other receivables

Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Neither past due nor impaired
01–60 days 414,298 314,146 414,298 314,146
Past due but not impaired
61–90 days 29,463 38,483 29,463 38,483
91–120 days 1,922 28,172 1,922 28,172
121–180 days - 337 - 337
Allowance for expected credit losses 1,222 1,224 1,222 1,224
Gross carrying value 446,905 382,362 446,905 382,362
Less: Allowance for expected credit losses
Individually assessed Allowance for expected credit losses (1,222) (1,224) (1,222) (1,224)
Total 445,683 381,138 445,683 381,138
The requirement for an impairment is analysed at each reporting date on an individual basis for major customers. Additionally,
a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The
calculation is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
The Company has obtained bank guarantees from all distributors as collateral by reviewing their past performance and credit
worthiness. The requirement for an impairment is analysed at each reporting date on an individual basis for major clients.
Additionally, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively.
The calculation is based on actual incurred historical data.
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10.1.6 Amounts due from related parties
The balance consists of amounts due from the Parent, Companies under common control, Joint Ventures and Associates of the Parent.
10.1.7 Credit risk relating to cash and cash equivalents

In order to mitigate the concentration, settlement and operational risks related to cash and cash equivalents, the Group consciously
manages the exposure to a single counterparty taking into consideration, where relevant, the rating or financial standing of the
counterparty, where the position is reviewed as and when required, the duration of the exposure in managing such exposures and
the nature of the transaction and agreement governing the exposure. The Group held a negative cash and cash equivalents of Rs.
130 Mn as at 31st March 2021 (2019/20 negative cash and cash equivalents of Rs. 135 Mn). The Company held a negative cash
and cash equivalents of Rs. 131 Mn as at 31 March 2021 (2019/20 negative cash and cash equivalents of Rs.137 Mn).
10.2 Liquidity risk

The policy is to hold cash and undrawn committed facilities at a level sufficient to ensure that there is available funds to meet its
medium term capital and funding obligations, including organic growth and acquisition activities, and to meet any unforeseen
obligations and opportunities. The Group holds cash and undrawn committed facilities to enable the Company and its subsidiary
to manage its liquidity risk.
The Group monitors its risk to a shortage of funds using a daily cash management process. This process considers the maturity of
the Group’s financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows
from operations.
The objective is to maintain a balance between continuity of funding and flexibility through the use of multiple sources of funding
including bank loans and overdrafts.
The Group continued to place emphasis on ensuring that cash and undrawn committed facilities are sufficient to meet the short,
medium and long-term funding requirements, unforeseen obligations as well as unanticipated opportunities. Constant dialogue
between Group companies and banks regarding financing requirements, ensures that availability within each single borrower limit
is optimised by efficiently reallocating under-utilised facilities within the Group.
The daily cash management processes at the business units include active cash flow forecasts and matching the duration and
profiles of assets and liabilities, thereby ensuring a prudent balance between liquidity and earnings.
10.2.1 Net debt/ (Cash)

Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Total liquid Assets 30,493 41,369 29,406 39,331
Interest-bearing borrowings - non current 34.1 85,668 121,881 85,668 121,881
Interest-bearing borrowings - current 34.1 43,455 43,455 43,455 43,455
Bank overdrafts 30 160,780 176,280 160,780 176,280
Total liquid liabilities 289,903 341,616 289,903 341,616
Net debt 259,410 300,247 260,497 302,285
When calculating the net debt position of the Company and Group the lease liabilities of Rs 9.8 Mn is excluded
10.2.2 Liquidity risk management

Group has implemented a mixed approach that combines elements of the cash flow matching approach and the liquid assets
approach. The Group attempt to match cash outflows in each time bucket against the combination of contractual cash inflows
plus other inflows that can be generated through the sale of assets or other borrowings.

10.2 Liquidity risk (Contd.)

Maturity analysis
The table below summarises the maturity profile of both the Group's and Company's financial liabilities based on contractual
undiscounted (principle plus interest) payments.
Group
31st March 2021 Within Between Between Between Between More than Total
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Interest-bearing loans and
borrowings 50,941 47,962 43,749 - - - 142,652
Lease liability 1,109 1,331 1,584 1,871 879 13,545 20,319
Trade and other payables 366,811 - - - - - 366,811
Amounts due to related
9,279 - - - - - 9,279
parties
Bank overdrafts 160,780 - - - - - 160,780
588,920 49,293 45,333 1,871 879 13,545 699,841
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
borrowings 55,856 52,150 48,443 36,309 - - 192,758
Lease liability 3,168 3,050 2,918 2,770 2,604 15,016 29,526
13,390 - - - - - 13,390
parties
Bank overdrafts 176,280 - - - - - 176,280
534,327 55,200 51,361 39,079 2,604 15,016 697,587
Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
borrowings 50,941 47,962 43,749 - - - 142,652
Lease liability 1,109 1,331 1,584 1,871 879 13,545 20,319
9,279 - - - - - 9,279
parties
Bank overdrafts 160,780 - - - - - 160,780
586,775 49,293 45,333 1,871 879 13,545 697,696
112
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
borrowings 55,856 52,150 48,443 36,309 - - 192,758
Lease liability 3,168 3,050 2,918 2,770 2,604 15,016 29,526
13,390 - - - - - 13,390
parties
Bank overdrafts 176,280 - - - - - 176,280
532,281 55,200 51,361 39,079 2,604 15,016 695,541
10.3 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices.
Market risk comprises of the following risks:

* Interest rate risk
* Currency risk
The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
The sensitivity analysis in the following sections relate to the position as at 31 March in 2021 and 2020.
The analysis excludes the impact of movements in market variables on; the carrying values of other post-retirement obligations;
provisions; and the non-financial assets and liabilities.
The following assumptions have been made in calculating the sensitivity analyses;
The sensitivity of the relevant Income Statement item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at 31st March 2021 and 2020.
10.3.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s and
Company’s long-term debt obligations with floating interest rates.
Most lenders grant loans under floating interest rates.
The global outbreak of the COVID-19 pandemic has resulted in reductions in policy rates and monetary easing policies by Central
Bank of Sri Lanka which has resulted in a sharp reduction in lending rates. The Group has managed the risk of increased interest
rates by having a balanced portfolio of borrowings at fixed and variable rates.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held
constant, of the Group’s and the Company’s profit before tax. (through the impact on floating rate borrowings).


10.3.1 Interest rate risk (Contd.)
Rupee borrowings Increase/ (decrease) Group Company

in basis points Rs. '000 Rs. '000
2021 +100 1,383 1,383

-100 (1,383) (1,383)
2020 +320 4,614 4,614

-320 (4,614) (4,614)
The assumed spread of basis points for the interest rate sensitivity analysis is based on the currently observable market
environment changes to base floating interest rates.
10.3.2 Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Group has exposure to foreign currency risk where it has cash flows in overseas operations and
foreign currency transactions which are affected by foreign exchange movements. Group treasury (JKH) analyses the market
condition of foreign exchange and provides market updates to the Senior Management, with the use of external consultants’
advice. Based on the suggestions made by John Keells Group treasury, the Senior Management takes decisions on whether to
hold, sell, or make forward bookings of foreign currency.
The Sri Lankan Rupee witnessed significant volatility during 2020/21 on the back of the COVID-19 pandemic and macro-economic
pressures. The Group adopted prudent measures, as and when required, to manage the financial impacts arising from currency
fluctuations by matching liabilities with corresponding inflows and entering into forward exchange rate agreements, where
applicable.
10.3.2.1 Effects of currency translation.

For purposes of Keells Food Products PLC’s Consolidated Financial Statements, the income and expenses and the assets and
liabilities of the subsidiary located outside Sri Lanka are converted into Sri Lankan Rupees (LKR). Therefore, period-to-period
changes in average exchange rates may cause translation effects that have a significant impact on, for example, revenue, segment
results (earnings before interest and taxes –EBIT) and assets and liabilities of the Group. Unlike exchange rate transaction risk,
exchange rate translation risk does not necessarily affect future cash flows. The Group’s equity position reflects changes in book
values caused by exchange rates.
Group
Exchange rate Increase/ (decrease Effect on profit Effect on
in exchange rate before tax (Rs.) equity (Rs.)
2021
INR 5.73% (52,604) (59,061)
-5.73% 52,604 59,061
2020
INR 0.35% (4,268) (156)
-0.35% 4,268 156
Assumptions
The assumed movement, in the spread of the exchange rate sensitivity analysis, is based on the current observable market
environment.
114
10.4 Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong financial position and healthy
capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure, and makes adjustments to it, in the light of changes in economic conditions. To maintain
or adjust the capital structure, the Group may issue new shares, have a rights issue or buy back of shares.

Group Company
2021 2020 2021 2020
Debt/ Equity 13.96% 18.21% 13.94% 18.19%
11 FAIR VALUE MEASUREMENT AND RELATED FAIR VALUE DISCLOSURES

Fair value related disclosures for financial instruments and non-financial assets that are measured at fair value or where fair values
are only, disclosed and are reflected in this note. Besides this note, additional fair value related disclosures, including the valuation
methods, significant estimates and assumptions are also provided in:
• Investment in Subsidiary- Note 23.1

• Property, Plant and Equipment under revaluation model -Note 20
• Financial instruments and related policies (including those carried at amortised cost) -Note 12
Accounting Policy
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
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits
by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest
and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Financial Statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant 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 significant to the fair value measurement is directly or
indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

11 FAIR VALUE MEASUREMENT AND RELATED FAIR VALUE DISCLOSURES (CONTD.)

For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
The Group determines the policies and procedures for both recurring fair value measurement, such as investment properties and
unquoted financial assets fair value through Other Comprehensive Income, and for nonrecurring measurement, such as assets
held for sale in discontinued operations.
External valuers are involved for valuation of significant assets, such as land and buildings, and significant liabilities. Selection
criteria for external valuers include market knowledge, reputation, independence and whether professional standards are
maintained. The Group decides after discussion with the external valuers, which valuation techniques and inputs to used for
individual assets and liabilities.
At each reporting date, the Group analyses the movements in the values of assets and liabilities which are required to be
remeasured or re-assessed as per the Group’s accounting policies. For this analysis, the Group verifies the major inputs applied in
the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
The Group, in conjunction with the Group’s external valuers, also compares the change in the fair value of each asset and liability
with relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Fair Value Hierarchy

11.1 Non Financial Assets -Group and Company
As at 31st March 2021 Note Level 1 Level 2 Level 3

Rs. ’000 2021 2020 2021 2020 2021 2020
Assets measured at fair value
Land and buildings on freehold 20.1 - - - - 394,744 371,781
land
Buildings on leasehold land 20.1 - - - - 314,805 313,616
Total - - - - 709,549 685,397
In determining the fair value, highest and best use of the property has been considered including the current condition of the
properties, future usability and associated redevelopment requirements have been considered. Also, the valuers have made
reference to market evidence of transaction prices for similar properties, with appropriate adjustments for size and location. The
appraised fair values are rounded within the range of values.
12 FINANCIAL INSTRUMENTS AND RELATED POLICIES

Accounting Policy
Financial instruments - initial recognition and subsequent measurement
Financial Assets Initial recognition and measurement
Financial assets within the scope of SLFRS 9 are classified as amortised cost, fair value through other comprehensive income
(OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and
the Group’s business model for managing them. This assessment is referred to as the SPPI test and is performed at an instrument
level. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial
assets, or both. With the exception of trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price.
116
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
The Group’s financial assets include cash and short-term deposits, trade and other receivables, loans and other receivables and
unquoted financial instruments.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories;
• Financial assets at amortised cost

• Financial assets at fair value through OCI with recycling of cumulative gains and losses
• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition
• Financial assets at fair value through profit or loss
Financial assets at amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortised cost. The Group measures financial assets at amortised cost if both of the following conditions
are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows
And
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding"
100 percent of instruments belongs to this category. Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.
The Group’s financial assets at amortised cost have been disclosed under note 12.1.
Financial assets-de-recognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the group has transferred substantially all the risks and rewards of ownership.
Impairment of financial assets

From 1 April 2018, the group assesses on a forward looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the group applies the simplified approach permitted by SLFRS 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Financial liabilities-Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

12 FINANCIAL INSTRUMENTS AND RELATED POLICIES (CONTD.)

Financial liabilities-Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below;
Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in
hedge relationships as defined by SLFRS 9. Separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
Loans and borrowings

This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
Financial liabilities-de-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position
if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
12.1 Financial assets and liabilities by categories

Financial assets and liabilities in the tables below are split into categories in accordance with SLFRS 9
Financial assets by categories Financial assets at amortised cost

Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Financial instruments in non-current assets
Non-current financial assets 24 45,140 42,530 45,140 42,530
Financial instruments in current assets

Trade and other receivables 27 463,473 397,952 463,473 397,952
Amounts due from related parties 38.1 162,819 127,600 162,819 127,600
656,785 566,921 655,698 564,883
Total 701,925 609,451 700,838 607,413
118
Financial liabilities by categories Financial liabilities measured at amortised cost
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Financial instruments in non-current liabilities
Lease liabilities 21.1 8,720 8,864 8,720 8,864
94,388 130,745 94,388 130,745
Financial instruments in current liabilities

Trade and other payables 36 366,811 285,633 364,666 283,587
Amounts due to related parties 38.2 9,279 13,390 9,279 13,390
Current Portion of Interest-bearing loans and 34.1 43,455 43,455 43,455 43,455
borrowings
Lease liabilities 21.1 1,041 960 1,041 960
Bank overdrafts 30 160,780 176,280 160,780 176,280
581,366 519,718 579,221 517,672
Total 675,754 650,463 673,609 648,417
The following methods and assumptions were used to estimate the fair values;
The fair value of loans and receivables is not significantly different from the value based on amortised cost methodology.
The management assessed that cash and short term deposits, trade receivables, trade payables, bank overdrafts and other
current financial liabilities approximate their carrying amounts largely due to short-term maturities of these instruments.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in ordinary transaction between market
participants at the measurement date.
Fair value of the unquoted ordinary shares has been estimated using a Discounted Cash Flow (DCF) model. The valuation requires
management to make certain assumptions about the model inputs, including forecast cash flows, the discount rate, credit risk and
volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management’s
estimate of fair value for these unquoted equity investments.
Accounting judgements, estimates and assumptions

Fair value of financial instruments
Where the fair value of financial assets and financial liabilities recorded in the Statement of Financial Position cannot be derived
from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The input
to these models are taken from observable markets where possible. Where this is not feasible, a degree of judgment is required in
establishing fair values. The judgement include consideration of input such as liquidity risk, credit risk and volatility.

13 REVENUE FROM CONTRACTS WITH CUSTOMERS

Accounting Policy
Contracts with customers
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an
amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
Goods transferred at a point in time

Under SLFRS 15, revenue is recognised upon satisfaction of performance obligation. The revenue recognition occurs at a point in
time when control of the asset is transferred to the customer, generally on delivery of the goods.
Services transferred over time

Under SLFRS 15, the Group determines at contract inception whether it satisfies the performance obligation over time or at a
point in time. For each performance obligation satisfied overtime, the Group recognises the revenue over time by measuring the
progress towards complete satisfaction of that performance obligation.
Turnover based taxes

Turnover based taxes include Value Added Tax and Nation Building Tax.Company pays such taxes in accordance with the
respective statutes.
Group Company
For the year ended 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
13.1 Revenue from contracts with customers 3,651,241 3,590,579 3,651,241 3,590,579
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
13.2 Disaggregation of Revenue
Geographical segment analysis (by location of
customers)
Sri Lanka 3,617,388 3,552,416 3,617,388 3,552,416
Others 33,853 38,163 33,853 38,163
Total revenue 3,651,241 3,590,579 3,651,241 3,590,579
13.3
Reconciliation of revenue
Reconciliation between Revenue from contracts with customers and revenue information that is disclosed for each reportable
segment has been provided in the operating segment information section.
13.4 Contract balances

Contract assets
Contract assets are Group’s right to consideration in exchange for goods or services that the Group has transferred to a customer,
with rights that are conditioned on some criteria other than the passage of time. Upon satisfaction of the conditions, the amounts
recognised as contract assets are reclassified to trade receivables. The Group has not held contact assets at the reporting date.
120
Contract liabilities
Contract liabilities are Group’s obligation to transfer goods or services to a customer for which the group has received consideration
(or the amount is due) from the customer. Contract liabilities include long-term advances received to deliver goods and services,
short-term advances received to render certain services. The Group has not held contact liabilities at the reporting date.
13.5 Performance obligations and significant judgements

The Group’s performance obligations and significant judgements are summarised below:
Manufacturing and Trading

Manufacturing and Trading segments focuses on manufacturing of a wide range of processed meat products. Revenue is
recognised at the point in time when the control of the asset is transferred to the customer, which is generally upon delivery of the
goods. Revenue is measured based on actual sales, and therefore the output method is used for revenue recognition.
14 OTHER OPERATING INCOME AND OTHER OPERATING EXPENSE

Accounting Policy
Gains and losses
Net gains and losses of a revenue nature arising from the disposal of property, plant and equipment and other non-current assets
are accounted for in the income statement, 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.
Other income and expense

Other income and expenses are recognised on an accrual basis.
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
14.1 Other operating income
Exchange gain 15 1,417 - -
Unclaimed dividend 258 119 258 119
Sundry income 2,108 2,084 2,108 2,084
2,381 3,620 2,366 2,203

Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
14.2 Other operating expenses
Nation Building Tax (NBT) - 45,381 - 45,381
Spoilage and wastage 44,669 29,930 44,669 29,930
Bank charges 977 779 970 773
Exchange loss 765 - 765 259
Loss on disposal of property, plant & equipment 678 - 678 -
47,089 76,090 47,082 76,343

15 NET FINANCE INCOME

Accounting Policy
Finance income
Finance income comprises interest income on funds invested, dividend income, fair value gains on financial assets at fair value
through profit or loss, gains on the remeasurement to fair value of any pre-existing interest in an acquiree that are recognised in the
income statement.
Finance income from financial instruments includes, notional interest pertaining to loan granted to executive staff.
Interest income is recorded as it accrues using the Effective Interest Rate (EIR), which is the rate that exactly discounts the
estimated future cash receipt though the expected life of the financial instrument or a shorter period, where appropriate to the net
carrying amount of the financial asset. Interest income is included under finance income in the Income Statement.
Finance cost
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, fair value losses on financial
assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables) that are
recognised in the income statement.
Interest expense is recorded as it accrues using the effective interest rate (EIR), which is the rate that exactly discounts the
estimated future cash payments through the expected life of the financial instrument or a shorter period, where appropriate, to the
net carrying amount of the financial liability.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other
borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that the Group incurs
in connection with the borrowing of funds.
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
15.1 Finance Income
Interest income 2,363 1,388 2,211 1,227

Finance income from other financial instruments 7,155 7,897 7,155 7,897
Total finance income 9,518 9,285 9,366 9,124
Finance cost
Interest expense on borrowings
Long-term (10,626) (9,228) (10,626) (9,228)
Short-term (1,955) (3,006) (1,955) (3,006)
Total finance cost (12,581) (12,234) (12,581) (12,234)
Net finance Cost (3,063) (2,949) (3,215) (3,110)
122
16 PROFIT BEFORE TAX
Accounting Policy
Expenditure recognition
Expenses are recognised in the Income Statement on the basis of a direct association between the cost incurred and the earning
of specific items of income. All expenditure incurred in the running of the business and in maintaining the property, plant and
equipment in a state of efficiency has been charged to the Income Statement.
For the purpose of presentation of the income statement, the “function of expenses” method has been adopted, on the basis that
it presents fairly the elements of the Company’s and Group’s performance.
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Profit before tax
Profit before tax is stated after charging all expenses
including the following;
Remuneration to Non- Executive Directors 6,480 7,200 6,480 7,200
Auditors’ Fees and expenses - Audit Service 869 841 719 692
- Non Audit Service 1,259 1,206 515 127
Costs of defined employee benefits
Employee benefit provisions and related cost 21,428 18,330 21,428 18,330
Defined contribution plan cost - EPF and ETF 40,167 39,532 40,167 39,532
Staff expenses 479,460 486,303 479,460 486,303
Depreciation of Property, Plant and Equipment 156,832 129,790 156,832 129,790
Amortisation of right of use assets 1,387 1,283 1,387 1,283
Amortisation of intangible assets 40 73 40 73
Donations 3,933 1,548 3,933 1,548
Loss on disposal of Property, Plant and Equipment 678 606 678 606
17 EARNINGS PER SHARE (EPS)

Accounting Policy
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit attributable to
ordinary equity holders of the parent (after adjusting for outstanding share options) by the weighted average number of ordinary
shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares.
Group
For the year ended 31st March Note 2021 2020
17.1 Basic earnings per share
Profit attributable to equity holders of the parent (Rs.'000) 320,980 150,175
Weighted average number of ordinary shares (No.'000) 17.3 25,500 25,500
Basic earnings per share (Rs.) 12.59 5.89

Group
For the year ended 31st March Note 2021 2020
17.2 Diluted earnings per share
Profit attributable to equity holders of the parent (Rs. '000) 320,980 150,175
Adjusted weighted average number of ordinary shares (No. '000) 17.3 25,500 25,500
Diluted earnings per share (Rs.) 12.59 5.89
Group
For the year ended 31st March 2021 2020
No. '000 No. '000
17.3 Amount used as denominator
Ordinary shares at the beginning of the year 25,500 25,500
Ordinary shares at the end of the year 25,500 25,500
Weighted average number of ordinary shares outstanding during the year 25,500 25,500
Adjusted Weighted average number of ordinary shares* 25,500 25,500
* There are no effects of dilution to the Weighted average number of shares at present.
18 DIVIDEND PER SHARE (DPS)

Equity dividend on ordinary shares
Group
For the year ended 31st March 2021 2020
Rs. Rs. '000 Rs. Rs. '000
18.1 Declared and paid during the year
Final dividend* - - 2.00 51,000
Interim dividend 7.00 178,500 4.00 102,000
Total dividend 7.00 178,500 6.00 153,000
*Previous years’ final dividend paid in the current year.
19 TAXES
Accounting Policy
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity, is recognised in equity and for items recognised in other
comprehensive income is recognised in Other Comprehensive Income and not in the Income Statement. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions, where appropriate.
124
The management has used its judgement on the application of tax laws including transfer pricing regulations involving identification
of associated undertakings, estimation of the respective arm’s length prices and selection of appropriate pricing mechanism.
The Group has conformed with the arm’s length principles relating to Transfer Pricing, as prescribed in the Inland Revenue Act,
and has complied with the related Gazette Notifications issued by the Minister of Finance.
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application
of LKAS 12 Income Taxes. The Group applies significant judgement in identifying uncertainties over income tax treatments. Since
the Group operates in a complex environment, it assessed whether the Interpretation had an impact on its consolidated financial
statements. Group determined that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by
the taxation authorities. The Interpretation did not have an impact on the consolidated financial statements of the Group.
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences, and unused tax credits and tax losses carried forward,
to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the
unused tax credits and tax losses carried forward can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at tax rates that are
expected to apply to the year when the asset is realised or liability is settled, based on the tax rates and tax laws that have been
enacted or substantively enacted as at the reporting date.
Deferred tax relating to items recognised outside the Income Statement is recognised outside the Income Statement. Deferred tax
items are recognised in correlation to the underlying transaction either in Other Comprehensive Income or directly in Equity.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against
current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would
be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated
as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or
loss.
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
• W
here the sales tax incurred on a purchase of an asset or service is not recoverable from the taxation authority, in which case
the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable and;
• Where receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the Statement of Financial Position.

Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
19.1 Tax expense
Income tax
Tax charge for the period 19.5 69,726 58,435 69,726 58,435
Over provision for previous years 19.5 (589) (427) (589) (427)
69,137 58,008 69,137 58,008
Deferred Tax
Relating to origination and reversal of 19.2 (63,876) (3,465) (63,876) (3,465)
temporary differences
5,261 54,543 5,261 54,543
Applicable Rates of Income Tax

The tax liability of the company is computed at the standard rate of 24%, 18% and 14% (2019/20 -28%, 24%, 18% and 14%).
The Inland Revenue (Amendment) Bill, to amend the Inland Revenue Act, No. 24 of 2017, incorporating announcements
implemented by the Inland Revenue Circular Nos. PN/IT/2020-03 (Revised) and PN/IT/2021-01 was Gazetted on 18 March 2021.
As the Bill has been Gazetted and also printed by order of Parliament as of the reporting date, the Group’s management, having
applied significant judgment have concluded the provisions of the Inland Revenue (Amendment) Bill to be substantially enacted,
and have relied upon the income tax rates specified therein to calculate the income tax liability and deferred tax provision for the
2020/21 financial year of the Group.
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
19.2 Deferred tax expense
Income statement
Deferred tax expense arising from;
Accelerated depreciation for tax purposes (64,532) (681) (64,532) (681)
Employee benefit liability 656 (2,784) 656 (2,784)
Deferred tax Reversal directly to income statement (63,876) (3,465) (63,876) (3,465)
Other comprehensive income

Deferred tax expense arising from;
Actuarial gain/ (loss) (827) 945 (827) 945
Revaluation of building (8,842) 2,653 (8,842) 2,653
Capital gain in relation to revalued land (19,688) 7,584 (19,688) 7,584
Deferred tax charge/ (reversal) directly to other (29,357) 11,182 (29,357) 11,182
comprehensive income
Total deferred tax charge/ (reversal) (93,233) 7,717 (93,233) 7,717
Deferred tax has been computed at the rate of 18% (2019/20 - 28%).
126
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
19.3 Income tax payables/ (receivable)
At the beginning of the year (7,801) 33,571 (7,801) 33,571

Charge for the year 19.5 69,137 58,008 69,137 58,008
Payments during the year (42,063) (99,380) (42,063) (99,380)
At the end of the year 19,273 (7,801) 19,273 (7,801)
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
19.4 Deferred tax liabilities
At the beginning of the year 251,240 243,523 251,240 243,523

Charge/ (reversal) for the year 19.2 (93,233) 7,717 (93,233) 7,717
At the end of the year 158,007 251,240 158,007 251,240
The closing deferred tax asset and liability

balances relate to the following;
Accelerated depreciation for tax purposes 105,832 155,920 105,832 155,920
Employee benefit liability (15,538) (923) (15,538) (923)
Revaluation gained in relation to buildings 19,400 28,242 19,400 28,242
Capital gain in relation to revalued land 48,313 68,001 48,313 68,001
Accounting judgement, estimates and assumptions

The Group is subject to income tax and other taxes including VAT. Significant judgment was required to determine the total
provision for current, deferred and other taxes due to uncertainties that exist, with respect to the interpretation of the applicability
of tax laws, at the time of the preparation of these Financial Statements.
Uncertainties also with respect to the interpretation of complex tax regulations and the amount and timing of future taxable
income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual
agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions,
could necessitate future adjustments to tax income and expense already recorded. Where the final tax outcome of such matters
is different from the amounts that were initially recorded, such differences will impact the income and deferred tax amounts in the
period in which the determination is made.

Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
19.5 Reconciliation between current tax charge and the
accounting profit
Profit before tax 326,241 204,718 327,159 204,298
Income not liable for income tax (923) - (923) -
Other consolidated adjustments 918 (420) - -
Adjusted accounting profit chargeable to income taxes 326,236 204,298 326,236 204,298
Disallowable expenses 199,728 166,545 199,728 166,545
Allowable expenses (144,499) (142,235) (144,499) (142,235)
Taxable income 381,465 228,608 381,465 228,608
Income tax charged at;

Standard rate of 28% & 24% 4,813 48,699 4,813 48,699
Other concessionary rates 18% 64,420 9,634 64,420 9,634
Other rates 14% 493 102 493 102
Over provision for previous years (589) (427) (589) (427)
Current tax charge 69,137 58,008 69,137 58,008
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
19.6 Reconciliation between tax expense and the product
of accounting profit
Adjusted accounting profit chargeable to income taxes 326,236 204,298 326,236 204,298
Tax effect on chargeable profits 59,785 52,207 59,785 52,207

Tax effect on non deductible expenses 2,043 3,048 2,043 3,048
Over provision for previous years (589) (427) (589) (427)
Tax effect on gratuity transfers 141 154 141 154
Tax effect on deductions claimed (1,344) (2,349) (1,344) (2,349)
Net tax effect on rate differentials (55,686) - (55,686) -
Net tax effect of unrecognised deferred tax assets for the 911 1,910 911 1,910
year
Tax expense 5,261 54,543 5,261 54,543
19.7 Income tax rates of off-shore subsidiary

Country of incorporation Company Rate
India John Keells Foods India (Pvt) Ltd 30.9%
128
20 PROPERTY, PLANT AND EQUIPMENT
Accounting Policy
Basis of recognition
Property, plant and equipment are recognised if it is probable that future economic benefits associated with the asset will flow to
the Company and the cost of the asset can be reliably measured.
Basis of measurement
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment loss. Such cost includes
the cost of replacing component parts of the plant and equipment and borrowing costs for long-term construction projects if the
recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Company
derecognises the replaced part, and recognises the new part with its own associated useful life and depreciation. Likewise, when
a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in the income statement as incurred. The
present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset
if the recognition criteria for a provision are met.
Land and buildings are measured at fair value less accumulated depreciation on buildings and impairment charged subsequent to
the date of the revaluation.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
Any revaluation surplus is recognised in Other Comprehensive Income and accumulated in Equity in the asset revaluation reserve,
except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the Income Statement,
in which case the increase is recognised in the Income Statement. A revaluation deficit is recognised in the Income Statement,
except to the extent that it offsets an existing surplus on the same asset recognised in the asset revaluation reserve.
Accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net
amount is restated to the revalued amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset
being sold is transferred to retained earnings. Where land and buildings are subsequently revalued, the entire class of such
assets is revalued at fair value on the date of revaluation. The Company has adopted a policy of revaluing Land and Building by a
professional valuer at least once every 5 years.
Derecognition
An item of property, plant and equipment is derecognised upon replacement, disposal or when no future economic benefits are
expected from its use. Any gain or loss arising on derecognition of the asset is included in the Income Statement in the year the
asset is derecognised.
Depreciation
Depreciation is calculated by using a straight-line method on the cost or valuation of all property, plant and equipment, other than
freehold land, in order to write off such amounts over the estimated useful economic life of such assets.
Depreciation commences in the month following the purchase/commissioning of the assets and ceases in the month of disposal/
scrapped.
The estimated useful life of assets is as follows:
Assets Years Assets Years

Buildings on Freehold Land 30 Motor vehicles 5
Buildings on Leasehold Land 20-27 Freezers 10-12
Plant and Machinery 2-20 Office Equipment 6
Computer Equipment 5 Other Equipment 2
Furniture and fittings 8

20 PROPERTY, PLANT AND EQUIPMENT (CONTD.)

The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each financial year end.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the assets. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest and other costs that the Group incurs in connection with the
borrowing of funds.
Impairment of property, plant and equipment

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists,
or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use and is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups
of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down
to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses are recognised in the Income Statement, except that, impairment losses in respect of property, plant and equipment
previously revalued are recognised against the revaluation reserve though the Statement of Other Comprehensive Income to the extent
that it reverses a previous revaluation surplus.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased if such indication exists the recoverable amount is estimated. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment
loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount
cannot exceed the carrying amount that would have been determined, net of depreciation had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in the Income Statement unless the asset is carried at revalued amount, in which case
the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the
asset's revised carrying amount, less any residual value on a systematic basis or its remaining useful life.
The company has carried out an impairment test on the Rice Plant. The recoverable amount of the assets under the Rice Plant CGU
has been determined based on the value in use calculation as per the approved financial budgets. Value in use calculation is based on
a discounted cash flow model. The recoverable amount is sensitive to the discount rate used for the discounted cash flow model as
well as the expected future cash inflows and the growth rate used for extrapolation purposes. There was no impairment recognised for
the assets in the Rice Plant CGU as the recoverable amount of the assets were higher than the carrying value of the assets.
Gross margins
The basis used to determine the value assigned to the budgeted gross margins, is the gross margins achieved in the year preceding
the budgeted year adjusted for projected market conditions.
Discount rates
The discount rate used is the risk-free rate, adjusted by the addition of an appropriate risk premium.
Inflation
The basis used to determine the value assigned to the budgeted cost inflation are inflation rates ranges, based on projected economic
conditions.
Volume growth
A volume growth has been budgeted on a reasonable and realistic basis by taking into account the growth rates of one to four years
immediately subsequent to the budgeted year based on industry growth rates. Cash flows beyond the five-year period are extrapolated
using 0% growth rate.
The Group has not determined Impairment as at the reporting date due to the COVID-19 pandemic as each business unit implemented
its business continuity plans which were operationalised during the early days of the pandemic. Businesses also developed and
instituted COVID-19-specific response plans and teams to enable smooth and uninterrupted functioning of businesses and operations
to the extent possible, whilst maintaining strict adherence to Government directives and health and safety considerations in situations
where normal operations are disrupted.
130
20 PROPERTY, PLANT AND EQUIPMENT (CONTD.)
Land and Buildings Plant and Furniture, Motor Freezers Other Capital Total Total
buildings on leasehold machinery fittings and vehicles assets work in 2021 2020
land equipment progress
As at 31st March Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
20.1 Group and Company
Cost or valuation
At the beginning of the year 373,219 316,572 1,432,572 62,520 674 108,407 25,659 3,262 2,322,885 1,883,684
Additions 445 9,103 56,485 3,120 - 13,540 5,001 - 87,694 426,895
Disposals - - (1,125) (178) - (4,128) - - (5,431) (9,558)
Transfers* - - 3,262 - - - - (3,262) - -
Transfers on revaluation (5,776) (11,914) - - - - - - (17,690) (14,698)
Revaluations/Impairment 28,336 4,124 - - - - - - 32,460 36,562
At the end of the year 396,224 317,885 1,491,194 65,462 674 117,819 30,660 - 2,419,918 2,322,885
Accumulated
depreciation
At the beginning of the year (1,438) (2,956) (642,327) (40,936) (674) (34,932) (16,103) - (739,366) (633,214)
Charge for the year (5,818) (12,038) (116,298) (6,302) - (10,471) (5,905) - (156,832) (129,790)
Disposals - - 631 178 - 3,790 - - 4,599 8,940
Transfers on revaluation 5,776 11,914 - - - - - - 17,690 14,698
At the end of the year (1,480) (3,080) (757,994) (47,060) (674) (41,613) (22,008) - (873,909) (739,366)
Carrying value
As at 31st March 2021 394,744 314,805 733,200 18,402 - 76,206 8,652 - 1,546,009 -
As at 31st March 2020 371,781 313,616 790,245 21,584 - 73,475 9,556 3,262 - 1,583,519
*These transfers relating to transfers between asset classes and transfers from capital work-in progress.
Keells Food Products PLC | Annual Report 2020/21

131
20.2 Revaluation of land and buildings

The Company uses the revaluation model of measurement of land and buildings. The Company engaged independent expert
valuers to determine the fair value of its land and buildings. Fair value is determined by reference to market-based evidence of
transaction prices for similar properties. Valuations are based on open market prices, adjusted for any difference in the nature,
location, or condition of the specific property. These valuation techniques that are appropriate in the circumstances and for which
sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs. The date of the most recent revaluation was carried out on 31st December 2020.
The changes in fair value is recognised in the Statement of Other Comprehensive Income and in the Statement of Equity. The
valuer has used valuation techniques such as open market values where there was a lack of comparable market data available
based on the nature of the property.
The valuations as of 31st December 2020 contained a higher estimation uncertainty as there were fewer market transactions
which are ordinarily a strong source of evidence regarding fair value. The value reflected represents the best estimate based
on the market conditions that prevailed, which in valuers’ considered opinion, meets the requirements in SLFRS-13 Fair Value
Measurement.
Details of Land and Building stated at valuation are indicated below;
Property Location Method of Effective date of Independent Valuer

valuation valuation
Land and Building at Keells Messrs. P.B
Food Products PLC Ja Ela Open market value 31st December 2020 Kalugalagedera
Land and Building at Keells Chartered Valuation
Food Products PLC Pannala Open market value 31st December 2020 Surveyor
Type of Asset Valuation technique* Significant Estimates for Sensitivity of

unobservable inputs unobservable inputs fair value to
unobservable inputs
Land- Ekala Open market value Estimated price per Rs. 550,000/-
perch
Land- Pannala Open market value Estimated price per Rs. 62,500/-
perch Positively correlated
Buildings on freehold land Open market value Estimated price per Rs. 400/- sensitivity
square feet Rs. 3,150/-
Buildings on leasehold land Open market value Estimated price per Rs.400/-
square feet** Rs.10,000/-
*Open Market Value method (OMV)
Open market value method uses prices and other relevant information generated by market transactions involving identical or
comparable assets, liabilities or a group of assets and liabilities, such as a business.
**The impact of the lease on the land, has been adjusted in arriving at the final valuation of building on leasehold land at Pannala.
132
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
20.3 Carrying value of total assets
At cost 836,460 898,122 836,460 898,122
At valuation 709,549 685,397 709,549 685,397
1,546,009 1,583,519 1,546,009 1,583,519
20.4 Land and building

At valuation 709,549 685,397 709,549 685,397
709,549 685,397 709,549 685,397
20.5 The carrying amount of revalued buildings if they were carried at cost less depreciation, would be as follows;
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Cost 388,998 379,451 388,998 379,451
Accumulated Depreciation (108,667) (93,173) (108,667) (93,173)
280,331 286,278 280,331 286,278
20.6 Property, plant and equipment with a cost of Rs.182 Mn (2019/20 -Rs.176 Mn) have been fully depreciated and continue to be in
use by the Group and the Company.
20.7 During the financial year, the Group and the Company acquired property, plant and equipment to the aggregate value of Rs. 88 Mn
(2019/20 -Rs. 427 Mn) cash payments amounting to Rs. 88 Mn (2019/20 -Rs. 427 Mn) were made during the year for purchase of
property, plant and equipment.
20.8 During the year, borrowing costs had not been capitalised.
Group and Company

For the year ended 31st March Year Borrowing cost Borrowing cost
incurred Capitalised
Rs. ‘000 Rs. ‘000
Construction of new manufacturing unit at Pannala 2020/21 - -
2019/20 12,266 4,303

21 LEASES
Accounting policy
Set out below are the new accounting policies of the Group upon adoption of SLFRS 16, which have been applied from the date
of initial application:
Right of use assets

The Group recognises right of use assets when the underlying asset is available for use. Right of use assets are measured at cost,
less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of
the leased asset at the end of the lease term, the recognised right of use assets are depreciated on a straight-line basis over the
shorter of its estimated useful life or the lease term. Right of use assets are subject to impairment.
The Group has not determined Impairment as at the reporting date due to the COVID-19 pandemic as each business unit
implemented its business continuity plans which were operationalised during the early days of the pandemic. Businesses also
developed and instituted COVID-19-specific response plans and teams to enable smooth and uninterrupted functioning of
businesses and operations to the extent possible, whilst maintaining strict adherence to Government directives and health and
safety considerations in situations where normal operations are disrupted.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. In calculating the present value of lease payments, the Group uses the incremental borrowing
rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
The Group uses 6 months AWPLR based plus margin when calculating the incremental borrowing rate which reflects the average
rate of borrowings in the Group. Quarterly calculated incremental borrowing rates were used to discount new leases obtained
during the year.
Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the
commencement date. It also applies the lease of low-value assets recognition exemption to leases of office equipment that are
considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a
straight-line basis over the lease term.
134
21.1 Amounts recognised in the statement of financial position and income statement
Set out below, are the carrying amounts of the Group and company’s right of use assets and the movements for the period ended
31 March.
Group and Company

As at 31st March 2021 2020
Rs. '000 Rs. '000
Lease hold properties - Right of Use Assets
Cost
At the beginning of the year 10,679 5,440
Additions 889 5,239
At the end of the year 11,568 10,679
Accumulated amortisation and impairment

At the beginning of the year (1,283) -
Amortisation (1,387) (1,283)
At the end of the year (2,670) (1,283)
Carrying value 8,898 9,396
Set out below are the carrying amounts of lease liabilities and the movements for the period ended 31st March.
Group and Company

Rs. '000 Rs. '000
Lease hold properties - Lease Liabilities
At the beginning of the year 9,824 5,440
Additions 889 5,239
Interest expense 1,141 1,209
Payments (2,093) (2,064)
At the end of the year 9,761 9,824
Payable within one year 1,041 960

Payable after one year 8,720 8,864
Total lease liability 9,761 9,824
The following are the amounts recognised in Income Statement for the year ended
Amortisation expense of right-of-use assets 1,387 1,283
Interest expense on lease liabilities 1,141 1,209
Total amount recognised in profit or loss 2,528 2,492
During the year the company hasn’t recongised expenses relating to short term leases and leases of low value assets in Income
Statements.
The maturity analysis of lease liabilities are disclosed in Note 10.2.2

22 INTANGIBLE ASSETS
Accounting Policy
Basis of recognition
An Intangible asset is recognised if it is probable that future economic benefits associated with the asset will flow to the Company
and the cost of the asset can be reliably measured.
Basis of measurement
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is the fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated
impairment losses.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised, and expenditure is charged
against Income Statement in the year in which the expenditure is incurred.
Useful economic lives, amortisation and impairment

The useful lives of intangible assets are assessed as either finite or indefinite lives. Intangible assets with finite lives are amortised
over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least
at each financial year-end and treated as accounting estimates. The amortisation is calculated by using straight-line method on
the cost of all the intangible assets and the amortisation expense on intangible assets with finite lives is recognised in the income
statement.
Intangible assets with indefinite useful lives and good will are not amortised but tested for impairment annually, or more frequently
when an indication of impairment exists either individually or at the cash-generating unit level. The useful life of an intangible asset
with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the
change in the useful life assessment from indefinite to finite is made on a prospective basis.
Purchased software
Purchased software is recognised as an intangible asset and is amortised on a straight line basis over its useful life.
Software license
Software license costs are recognised as an intangible asset and amortised over the period of the related license.
A summary of the policies applied to the Company’s intangible assets are as follows;
Intangible Assets Useful life Acquired/ Impairment testing

Internally generated
Purchased Software 4-6 years Acquired When indicators of impairment
Software License 4-6 years Acquired exists, the amortisation
method is reviewed at each
financial year end.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the Income Statement when the asset is derecognised.

136
As at 31st March Software Goodwill 2021 2020
Purchased
Rs. '000 Rs. '000 Rs. '000 Rs. '000
22.1 Intangible assets
Group and Company
Cost
Additions / transfers 2,410 - 2,410 -
Disposals/ Derecognition (3,577) - (3,577) -
Accumulated amortisation and impairment

At the beginning of the year (4,802) - (4,802) (4,729)
Amortisation (40) - (40) (73)
Disposals 3,577 - 3,577 -
At the end of the year (1,265) - (1,265) (4,802)
Carrying value
As at 31st March 2021 2,410 242,268 244,678 -
As at 31st March 2020 40 242,268 - 242,308
Group and Company

As at 31st March Net carrying value of Net carrying value of
goodwill goodwill
2021 2020
Rs. '000 Rs. '000
22.2 Goodwill 242,268 242,268
Goodwill acquired through business combination is due to the purchase of the manufacturing facility (CGU) of D&W Food Products
(Pvt) Ltd and goodwill is tested for impairment as follows;

Impairment of Goodwill
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher
of its fair value and its cost to sell or its Value In Use (VIU) the fair value and cost to sell calculation is based on available data from
an active market, in an arm’s length transaction, of similar assets or observable market prices less incremental cost from disposing
of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget
for the next five years and do not include the restructuring activities that the Company is not yet committed to or significant future
investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most
sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth
rate used for extrapolation purposes. Goodwill is tested for impairment annually and when circumstances indicate that the carrying
value may be impaired.

22.2 Goodwill (contd.)

Cash Generating Unit (CGU)
The recoverable amount of the CGU has been determined based on the Value In Use (VIU) calculation.
Key assumptions used in the VIU calculations

Gross margins
The basis used to determine the value assigned to the budgeted gross margins, is the gross margins achieved in the year
preceding the budgeted year adjusted for projected market conditions.
Discount rates
The discount rate used of 12% is the risk free rate adjusted by the addition of an appropriate risk premium.
Inflation
The basis used to determine the value assigned to the budgeted cost inflation are between 5%-7%, which are inflation rates based
on projected economic conditions.
Volume growth
A volume growth of 8% has been budgeted on a reasonable and realistic basis by taking into account the growth rates of one to
four years immediately subsequent to the budgeted year based on industry growth rates. Cash flows beyond the five year period
are extrapolated using 0% growth rate.
23 INVESTMENT IN SUBSIDIARY
Accounting Policy
Investment in subsidiaries are initially recognised at cost in the Financial Statements of the company. Any transaction cost relating
to acquisition of an investment in subsidiaries are immediately recognised in the Income Statement. Following initial recognition,
Investment in subsidiary is carried at cost less any accumulated impairment losses.
Company
Rs. '000 Rs. '000
23.1 Carrying value
Investments in subsidiary 220,292 220,292
Less
Allowance for impairment of investment (218,398) (218,398)
1,894 1,894
Effective holding % 100% 100%
The Subsidiary Company John Keells Foods India (Private) Limited was restructured in June 2010. In the above context it was
considered prudent and appropriate to impair the investment in John Keells Foods India (Private) Limited.

138
24 NON-CURRENT FINANCIAL ASSETS
Accounting Policy
Non-current financial assets within the scope of SLFRS 9 are classified as financial assets at initial recognition.
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Loans to executives 24.1 45,140 42,530 45,140 42,530
45,140 42,530 45,140 42,530
24.1 Loans to executives

Loans granted 24,723 36,025 24,723 36,025
Recoveries (21,137) (32,859) (21,137) (32,859)
Receivable within one year 17,790 16,814 17,790 16,814
Receivable after one year

Receivable between one and five years 45,140 42,530 45,140 42,530
62,930 59,344 62,930 59,344
25 OTHER NON-CURRENT ASSETS

Accounting Policy
Group classifies all non-financial non current assets that are not expected to be realised to be realised within twelve months under
non-current assets.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Pre-paid staff cost 9,120 11,744 9,120 11,744
9,120 11,744 9,120 11,744
Prepaid staff cost represents the prepaid potion of the loans granted to the staff.

26 INVENTORIES
Accounting Policy
Inventories are valued at the lower of cost or net realisable value. Net realisable value is the estimated selling price less estimated
costs of completion and the estimated costs necessary to make the sale.
The costs incurred in bringing inventories to its present location and condition, are accounted for as follows:
Raw materials,machinery spare parts and At actual cost on weighted average basis
other inventories
Manufactured finished goods, retail At the actual cost of direct materials, direct labour and an appropriate portion of
inventories and work-in-progress fixed production overheads based on normal operating capacity but excluding
borrowing cost
Work-in-progress At the cost of direct materials (excluding packing material) and appropriate portion
of direct labour of fixed production overheads based on percentage completed
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Inventories
Raw materials 153,279 135,054 153,279 135,054
Work-in-progress 33,086 19,748 33,086 19,748
Finished goods 220,540 160,460 220,540 160,460
Spare parts 146,317 88,042 146,317 88,042
Other inventories 552 551 552 551
553,774 403,855 553,774 403,855
Provision for slow-moving items (10,635) (4,641) (10,635) (4,641)
543,139 399,214 543,139 399,214
During the year ended 31st March 2021, Rs. 16.6 Mn (2019/20- Rs. 2.4 Mn) was recognised as an expense for inventories carried
at net realisable value. This is recognised in other operating expenses.
27 TRADE AND OTHER RECEIVABLES

Accounting Policy
Trade receivables are recognised at fair value less provision for impairment. Provision for impairment of trade receivables is
established when there is objective evidence that the Group will not be able to collect all amounts due according to the original
terms of the receivables.
140
Trade receivables are classified as current assets if payment is due within one year.
A receivable represents the Group’s right to an amount of consideration that is unconditional. Trade receivables are non-interest
bearing and are generally on terms of 30 to 90 days. In 2020/21, Rs.1,221,807/- (2019/20 Rs.1,223,858/-) was recognised as
provision for expected credit losses on trade receivables.
A detail note for actions taken to mitigate credit risk on Trade receivables due to COVID-19 pandemic is discussed in the credit risk
section (Note 10.1)
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Trade and other receivables 446,905 382,362 446,905 382,362
Less: Allowance for expected credit losses (1,222) (1,224) (1,222) (1,224)
Loans to executives 24.1 17,790 16,814 17,790 16,814
463,473 397,952 463,473 397,952
28 OTHER CURRENT ASSETS

Accounting Policy
Group classifies all non financial current assets under other current assets.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Pre-payment and non-cash receivables 14,865 23,334 14,865 23,334
14,865 23,334 14,865 23,334
29 SHORT TERM INVESTMENTS

Accounting Policy
Group’s investments in government securities and term deposits with a maturity of 12 months or less are classified, under short
term investments.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Fixed and call deposits 514 1,795 - -
Reported for statement of cash flows 514 1,795 - -

Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
30 CASH IN HAND AND AT BANK
Cash in hand 1,007 1,067 1,007 1,067
Cash at bank 28,972 38,507 28,399 38,264
Cash in hand and at bank - favourable 29,979 39,574 29,406 39,331
Bank overdraft (160,780) (176,280) (160,780) (176,280)
Cash in hand and at bank - unfavourable (160,780) (176,280) (160,780) (176,280)
Security and repayment terms of borrowings - Group and Company
Type of Nature of Facility amount Security Repayment

facility facility Rs. ’000 terms
Short term Bank overdraft 100,000 Clean basis On demand
2021 2020
As at 31st March Number of Value of Number of Value of
shares shares shares shares
No. '000 Rs. '000 No. '000 Rs. '000
31 STATED CAPITAL
Fully paid ordinary shares
At the beginning of the year 25,500 1,294,815 25,500 1,294,815
At the end of the year 25,500 1,294,815 25,500 1,294,815
The issued ordinary shares of the Company are listed on the Colombo Stock Exchange.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
32 REVENUE RESERVES
Accumulated profit 422,733 285,844 420,363 282,556
422,733 285,844 420,363 282,556
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
33 OTHER COMPONENTS OF EQUITY
Revaluation reserve 33.1 305,456 244,466 305,456 244,466
Foreign currency translation reserve 33.2 (5,322) (5,254) - -
Employee share option reserve 33.3 58,700 56,119 58,700 56,119
358,834 295,331 364,156 300,585
142
33.1 Revaluation reserve consists of the surplus on the revaluation of property, plant and equipment net of deferred tax effect.
33.2 Foreign currency translation reserve comprises the net exchange movement arising on the currency translation of the foreign
subsidiary into Sri Lanka rupees.
33.3 Share-based payment plans

Accounting Policy
Employee Share Option Plan- Equity-settled transactions
Employees receive remuneration in the form of share-based payment transactions, whereby employees render services as
consideration for equity instruments (equity-settled transactions). The cost of the employee services received in respect of the
shares or share options granted is recognised in the Income Statement over the period that employees provide services, from the
time when the award is granted up to the vesting date of the options. The overall cost of the award is calculated using the number
of share options expected to vest and the fair value of the options at the date of grant.
In accounting for employee remuneration in the form of shares, SLFRS 2- Share Based Payments, is effective for the Company,
from the financial year beginning 2013/14.
The employee remuneration expense resulting from the John Keells Group’s Employees share option (ESOP) scheme to the
employees of Keells Food Products PLC is recognised in the Income Statements of the Company. This transaction does not result
in a cash outflow and the expense recognised is met with a corresponding Equity reserve increase, thus having no impact on the
Statement of Financial Position (SOFP).
The fair value of the options granted is determined by using an option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in other capital reserves in equity,
over the period in which the performance and service conditions are fulfilled. The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the
Group’s best estimate of the number of equity instruments that will ultimately vest. The Income Statement expense or credit for a
period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in
the share based payment plan.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional
upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and service conditions are satisfied.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognised is the expense as if the
terms had not been modified, if the original terms of the award are met. An additional expense is recognised for any modification
that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured
at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of
either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a
replacement award on the date that it is granted, the cancelled award and the new award are treated as if they were a modification
of the original award, as described in the previous paragraph.

33.3 Share-based payment plans (contd.)

Employee Share Option Scheme
Under the John Keells Group’s Employees share option scheme (ESOP), share options of the Parent Company are granted to
Senior Executives with more than 12 months of service. The exercise price of the share options is equal to the 30 day volume
weighted average market price of the underlying shares on the date of grant. The share options vest over a period of four years
and is dependent on a performance criteria and a service criteria. The performance criteria being a minimum performance
achievement of "Met Expectations" and service criteria being that the employee has to be in employment at the time the share
options vest. The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into
account the terms and conditions upon which the share options were granted.
The contractual term for each option granted is five years. There are no cash settlement alternatives. The Group does not have a
past practice of cash settlement for these share options.
The expense recognised for employee services received during the year is shown in the following table:
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Expense arising from equity-settled share-based 2,581 4,529 2,581 4,529
payment transactions
Total expense arising from share-based 2,581 4,529 2,581 4,529
payment transactions
Movements in the year

The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in, share options
during the year:
Group Company
2021 2021 2021 2021
No. WAEP Rs. No. WAEP Rs.
ESOP PLAN 8
Outstanding at the beginning of the year 685,951 153.13 685,951 153.13
Granted during the year 60,100 132.86 60,100 132.86
Transfer in/ (Out) (8,700) 142.83 (8,700) 142.83
Lapses/ forfeited (188,727) 152.33 (188,727) 152.33
Outstanding at the end of the year 548,624 151.34 548,624 151.34
Vested as at 31st March 356,443 153.81 356,443 153.81
Fair value of the share option and assumptions

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the
terms and conditions upon which the share options were granted.
The valuation takes into account factors such as stock price, expected time to maturity, exercise price, expected volatility of share
price, expected dividend yield and risk free interest rate.
144
34 INTEREST - BEARING LOANS AND BORROWINGS
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
34.1 Movement
Interest- bearing loans and borrowings
Cash changes
Loans obtained - 176,226 - 176,226
Repayments (36,213) (34,037) (36,213) (34,037)
Non-cash changes - - - -
Repayable within one year

Interest- bearing loans and borrowings 43,455 43,455 43,455 43,455
Repayable after one year (Repayable between one and

five years)
Interest- bearing loans and borrowings 85,668 121,881 85,668 121,881
Total Interest -bearing loans and borrowings 129,123 165,336 129,123 165,336
Security and repayment terms-Group and Company
Nominal Year of Nature of Repayment 2021 2020

Interest rate Maturity Facility Terms Rs. '000 Rs. '000
One month Cost of December 2023 Project loan 60 monthly installments commencing 129,123 165,336
Funds+Margin from February 2019
35 EMPLOYEE BENEFIT LIABILITIES

Accounting Policy
Defined contribution plan - Employees’ Provident Fund and Employees’ Trust Fund
Employees are eligible for Employees’ Provident Fund contributions and Employees’ Trust Fund contributions in line with
respective statutes and regulations. The Company contribute the defined percentages of gross emoluments of employees to an
approved Employees’ Provident Fund and to the Employees’ Trust Fund respectively, which are externally funded.
Employee defined benefit plan - gratuity

The liability recognised in the statement of financial position is the present value of the defined benefit obligation as at the
reporting date using the projected unit credit method. Any actuarial gains or losses arising are recognised immediately in other
comprehensive income. Under the Payment of Gratuity Act No. 12 of 1983, the liability to an employee arises only on completion
of 5 years of continued service. The obligation is not externally funded.

35 EMPLOYEE BENEFIT LIABILITIES (CONTD.)

Other long term employee benefits
A new Long-Term Incentive Plan (LTI) has been launched for senior employees of the Group. The overall incentive will be paid in
cash as a lump sum payment upon achievement of key performance indicators linked to the five year strategic plan in place.
The Liability recognised in respect other long term employee benefits are measured as the present value of the estimated future
cash outflows expected to be made by the Group in relation to the performance and the services of the relevant employees, up to
the reporting date.
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
35.1 Total employee liabilities
Employee defined benefit plan- gratuity 35.3 114,130 98,497 114,130 98,497
Other long-term employee benefits 35.4 7,231 4,269 7,231 4,269
Group Company
Rs. '000 Rs. '000 Rs. '000 Rs. '000
35.2 Employee benefit provisions and related costs
Employee defined benefit plan- gratuity 35.3 18,466 15,484 18,466 15,484
Other long-term employee benefits 35.4 2,962 2,846 2,962 2,846
21,428 18,330 21,428 18,330
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
35.3 Employee defined benefit plan - gratuity
Current service cost 7,631 6,241 7,631 6,241
Interest cost on benefit obligation 10,835 9,243 10,835 9,243
18,466 15,484 18,466 15,484
Transfers 141 (602) 141 (602)
Payments (9,392) (1,038) (9,392) (1,038)
(9,251) (1,640) (9,251) (1,640)
(Gain)/ loss arising from changes in assumptions 6,418 (3,373) 6,418 (3,373)
The expenses are recognised in the Income
Statement in the following line items;
Cost of sales 12,276 10,246 12,276 10,246
Selling and distribution expenses 1,984 1,694 1,984 1,694
Administrative expenses 4,206 3,544 4,206 3,544
18,466 15,484 18,466 15,484
146
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
35.4 Other long term employee benefits
Current service cost 2,962 2,846 2,962 2,846
The employee benefit liabilities of the Group is based on the actuarial valuations carried out by Messrs. Smiles Global (Pvt) Ltd.

Employee Benefit Liability
The employee benefit liability of the Group and Company is based on the actuarial valuation carried out by Independent Actuarial
Specialists. The actuarial valuations involve making assumptions about discount rates and future salary increases. The complexity
of the valuation, the underlying assumptions and its long term nature, the defined benefit obligation is highly sensitive to changes in
these assumptions. All assumptions are reviewed at each reporting date.
The principal assumptions used in determining the cost of employee benefits were: 2021 2020
Discount rate 8% p.a 11% p.a
Future salary increases 7% - 8% p.a 8% - 10% p.a
Retirement age 55 Years 55 Years

35.5 Sensitivity of assumptions used
A percentage point change in the discount rate and salary increment rate would have the following effects on employee benefit liabilities;
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Discount rate
1% Increase (4,593) (3,911) (4,593) (3,911)
1% Decrease 4,972 4,225 4,972 4,225
Salary increment rate
1% Increase 4,998 4,303 4,998 4,303
1% Decrease (4,699) (4,048) (4,699) (4,048)
Maturity analysis of the payments

The following payments are expected on employee benefit liabilities in future years;

35.5 Sensitivity of assumptions used (Contd.)
Group and Company

Rs. '000 Rs. '000
Within the next 12 months 3,959 7,127
Between 1and 2 years 6,515 3,306
Between 2 and 5 years 59,874 44,121
Between 5 and 10 years 43,782 43,943
Total expected payments 114,130 98,497
Weighted average duration of the defined benefit plan obligation in years 6.32 6.91
36 TRADE AND OTHER PAYABLES

Accounting Policy
Trade payables are aggregate amount of obligations to pay for goods or services, that have been acquired in the ordinary course
of business.
Trade and other payables are normally non-interesting bearing and settled within one year. For further explanation on the Group’s
liquidity risk management process refer note 10.2.2.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Trade payables 184,591 101,710 184,591 101,710
Sundry creditors including accrued expenses 182,220 183,923 180,075 181,877
366,811 285,633 364,666 283,587
37 OTHER CURRENT LIABILITIES

Accounting Policy
Group and Company classifies all non-financial related liabilities under other current liabilities.
These include non refundable deposits and other tax payables. These liabilities are recorded at amounts expected to be set-off at
the reporting date.
Group Company
As at 31st March 2021 2020 2021 2020
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Other taxes payable 17,857 6,308 17,857 6,244
17,857 6,308 17,857 6,244
148
38 RELATED PARTY TRANSACTIONS
Terms and conditions of transactions with related parties
Transactions with related parties are carried out in the ordinary course of the business on an arm’s length basis. Outstanding
current account balances as at year end are unsecured, interest free and settlement occurs in cash. There are no related party
transactions other than that, which have been disclosed below;
Non-recurrent related party transactions

There were no non-recurrent related party transactions which in aggregate value exceeds 10% of the equity or 5% of the
total assets whichever is lower of the Company as per 31 March 2020 audited financial statements, which required additional
disclosures in the 2020/21 Annual Report under Colombo Stock Exchange listing Rule 9.3.2 and Code of Best Practices on
Related Party Transactions under the Securities and Exchange Commission Directive issued under Section 13(c) of the Securities
and Exchange Commission Act.
Recurrent related party transactions

Recurrent related party transactions which have an aggregate value exceeding 10% of the Consolidated revenue of the Group as
per the audited Financial Statements as at 31st March 2020 which required additional disclosures in the 2020/21 Annual Report
under Colombo Stock Exchange listing Rule 9.3.2 and Code of Best Practices on Related Party Transactions under the Securities
and Exchange Commission Directive issued under Section 13(c) of the Securities and Exchange Commission Act.
Name of related party :- Jaykay Marketing Services (Pvt) Ltd

Relationship :- Company under common control
Nature of the transaction :- Sale of goods
Aggregate value of related party transactions
entered into during the financial year :- Rs.1,105 Mn
Aggregate value of related party transactions
as a % of net revenue :- 30.78%
Terms and Conditions of the related party transaction :- Ordinary course of business on an arm’s length basis
The Group and Company carried out transactions in the ordinary course on an arm’s length basis with the following related entities.
Group and Company

As at 31st March Note 2021 2020
Rs. '000 Rs. '000
38.1 Amounts due from related parties 38.3
Ultimate Parent - -
Subsidiary - -
Companies under common control 162,819 127,600
Equity accounted investees of the Parent - -
162,819 127,600
The Company has not recognised a expected credit losses on amounts due from related parties.

Group and Company

As at 31st March Note 2021 2020
Rs. '000 Rs. '000
38.2 Amounts due to related parties 38.3
Ultimate Parent 3,947 4,342
Subsidiary - -
Companies under common control 5,245 9,027
Equity accounted investees of the Parent 87 21
9,279 13,390
Group and Company

As at 31st March Amounts due from Amounts due to
2021 2020 2021 2020
Rs. ‘000 Rs. ‘000 Rs. ‘000 Rs. ‘000
38.3 Details of due from/ due to related parties
Ultimate Parent
John Keells Holdings PLC - - 3,947 4,342
Subsidiary
John Keells Foods India (Pvt) Ltd - - - -
Companies under common control

Ceylon Cold Stores PLC 345 2,636 3,822 2,667
InfoMate (Pvt) Ltd - - 354 357
Jaykay Marketing Services (Pvt) Ltd 162,474 124,665 - 5,236
John Keells Information Technology (Pvt) Ltd - - - 216
John Keells Office Automation (Pvt) Ltd - - 216 68
John Keells PLC - - 155 295
John Keells Properties Ja - Ela (Pvt) Ltd - - - 8
Keells Consultants (Pvt) Ltd - - 144 180
Kandy Walk Inn Ltd - - 304 -
Mack International Freight (Pvt) Ltd - - 250 -
The Colombo Ice Company (Pvt) Ltd - 299 - -
Equity accounted investees of the Parent

Fairfirst Insurance Ltd - - 87 21
162,819 127,600 9,279 13,390
150
Group Company
Rs.'000 Rs.'000 Rs.'000 Rs.'000
38.4 Transactions with related parties
Ultimate Parent Company - John Keells Holdings PLC
Receiving of services (38,554) (35,364) (38,554) (35,364)
Companies under common control

Sales of Goods 1,105,067 986,688 1,105,067 986,688
Purchase of goods (309) (302) (309) (302)
Subsidiary - - - -
Equity accounted investees of the Parent

Sale of Goods - - - -
Interest received - - -
Key management personnel (KMP)

Sales of goods - - - -
Close family members of KMP

Sales of goods - - - -
Companies controlled / jointly controlled / significantly - - - -

influenced by KMP and their close family members
Post Employment Benefit

Contribution to provident fund (2,681) (2,935) (2,681) (2,935)
Governance structure, nature of the entity’s relationships, principal place of business and the country of incorporation have been
disclosed in the “Report of the Related Party Transaction Review Committee” and Group directory.
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions.

38.5 Compensations to Key Management Personnel

Key management personnel include members of the Board of Directors of Keells Food Products PLC and its Subsidiary and the
Parent Company John Keells Holdings PLC.
Group Company
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Short-term employee benefits 6,480 7,200 6,480 7,200
39 CONTINGENT LIABILITIES
Accounting Policy
Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
All contingent liabilities are disclosed as a note to the financial statements unless the outflow of resources is remote. A contingent
liability recognised in a business combination is initially measured at its fair value. Subsequently, it is measured at the higher of:
• The amount that would be recognised in accordance with the general guidance for provisions above (LKAS 37) or
• T
he amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with the guidance
for revenue recognition (SLFRS 15)
Contingent assets are disclosed, where inflow of economic benefit is probable.
There were no contingent liabilities for the Group at the end of reporting period.
40 CAPITAL AND OTHER COMMITMENTS

40.1 Capital Commitment
Capital Commitments approved but not provided for as at the reporting date is as follows;
Group Company
As at 31st March 2021 2020 2021 2020
Rs.'000 Rs.'000 Rs.'000 Rs.'000
Approved and contracted but not provided for 35,373 52,454 35,373 52,454
Approved, not contracted and not provided for - - - -
35,373 52,454 35,373 52,454
41 EVENTS AFTER THE REPORTING PERIOD

There have been no material events occurring after the Statement of Financial Position date that require adjustments to or
disclosure in the Financial Statements other than the following:
Dividends
The Board of Directors has approved the payment of the final dividend of Rs. 2.50 per share to be paid on 2nd June 2021.
As required by section 56(2) or the Companies Act No.07 of 2007, the board of Directors has confirmed that the Company
satisfies the solvency test in accordance with section 57 of the Companies Act No. 07 of 2007, and has obtained a certificate from
the Auditors, prior to approving the final dividend.
152
YOUR SHARE IN DETAIL
ORDINARY SHAREHOLDING
Number of Ordinary Shares - 25,500,000
Distribution of Shareholders
As at 31st March 2021 As at 31st March 2020
No. of No. of % No. of No. of %
Shareholding Range Shareholders Shares Held Shareholders Shares Held
Less than or equal to 1000 1,114 178,409 0.70 1,096 190,940 0.75
1,001 to 10,000 139 422,690 1.66 157 477,055 1.87
10,001 to 100,000 30 924,466 3.62 36 1,257,337 4.93
100,001 to 1,000,000 5 1,037,185 4.07 4 637,418 2.50
Over 1,000,001 2 22,937,250 89.95 2 22,937,250 89.95
1,290 25,500,000 100.00 1,295 25,500,000 100.00

No. of No. of % No. of No. of %
Categories of Shareholders Shareholders Shares Held Shareholders Shares Held
John Keells Holdings PLC and Subsidiaries 2 22,937,250 89.95 2 22,937,250 89.95
Directors and Spouses - - - - - -
CEO and Spouse - - - - - -
Shareholders holding more than 10% - - - - - -
Public 1,288 2,562,750 10.05 1,293 2,562,750 10.05
Total 1,290 25,500,000 100.00 1,295 25,500,000 100.00
Sri Lankan Residents 1,272 25,262,726 99.07 1,273 25,251,747 99.03

Non-Residents 18 237,274 0.93 22 248,253 0.97
Total 1,290 25,500,000 100.00 1,295 25,500,000 100.00
The Company had a float adjusted market Capitalisation of Rs. 416 million, 10.05% public shareholding which includes 1,288 public
shareholders. Therefore, the Company is compliant under option 2 of the minimum threshold requirements for the Diri Savi Board of the
CSE, as per section 7.6 of the listing rules of the CSE.
NET ASSET PER SHARE MARKET PRICE PER SHARE
Rs. Rs.
100 200
80
150
60
100
40
50
20
0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

YOUR SHARE IN DETAIL

No. of Shares % of Issued No. of Shares % of Issued
Top 20 Shareholders Held Capital Held Capital
John Keells Holdings PLC 20,364,054 79.86 20,364,054 79.86

John Keells PLC 2,573,196 10.09 2,573,196 10.09
Usui Lanka (Pvt) Ltd 350,000 1.37 - -
People's Leasing & Finance PLC/Mr. L P Hapangama 220,712 0.87 235,783 0.92
Hatton National Bank PLC/ R N Machado 220,000 0.86 40,000 0.16
People's Leasing & Finance PLC/Mr. L H L M P Haradasa 141,753 0.56 149,753 0.59
Mr. J B Hirdaramani 104,720 0.41 104,720 0.41
Mrs. J M Blackler 90,000 0.35 90,000 0.35
Mr. A N Esufally 82,951 0.33 82,951 0.33
Miss. N Harnam 82,844 0.32 60,000 0.24
Mr. R Vasudevan 50,065 0.20 50,065 0.20
Mr. N Muhunthan 49,500 0.19 1,000 0.00
Deutsche Bank AG Singapore A/C 2 47,469 0.19 47,469 0.19
T R L Holdings (Pvt) Ltd 41,111 0.16 77,388 0.30
Mr. A H Munasinghe 35,000 0.14 - -
People's Leasing & Finance PLC/ L H L Noris De Silva & Son (Pvt) Ltd 33,273 0.13 33,273 0.13
Mrs. G J E S De Fonseka 33,240 0.13 33,240 0.13
Mr. A J M Jinadasa 30,675 0.12 - -
Mr. D H N Kandamudali 29,371 0.12 27,600 0.11
Merchant Bank of Sri Lanka & Finance PLC 27,500 0.11 39,058 0.15
Share Prices - (Rs.) 2021 2020

Beginning of the year (As at 01st April) 108.20 124.80
Highest for the year 175.00 (09-03-2021) 132.00 (10-07-2019)
Lowest for the year 97.00 (28-08-2020) 98.80 (20-03-2020)
End of the year (As at 31st March) 162.50 108.20
MARKET CAPITALISATION SHAREHOLDERS FUNDS
Rs. Mn Rs. Mn
5,000 2,500
4,000 2,000
3,000 1,500
2,000 1,000
1,000 500
0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
154
For the year ended 31st March 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Revenue 3,651,241 3,590,579 3,429,791 3,118,976 3,048,594 3,030,204 2,617,980 2,280,142 2,197,482 2,328,752
Profit/ (loss) from operating activities 329,304 207,667 362,892 338,884 380,354 426,782 338,353 (33,593) 64,959 184,177
Net finance (cost)/ income (3,063) (2,949) 14,892 10,521 11,460 6,606 (6,938) 21,639 50,255 (3,534)
Profit/ (loss) before Tax 326,241 204,718 377,784 349,404 391,814 433,388 331,415 (11,954) 115,214 180,644
Income Tax (expense)/ reversal (5,261) (54,543) (110,651) (105,801) (116,395) (98,682) (70,126) 12,421 (24,331) (51,005)
Net profit after tax 320,980 150,175 267,133 243,603 275,419 334,706 261,289 467 90,883 129,639
As at 31st March 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
WHAT WE OWNED
Property, plant and equipment 1,546,009 1,583,519 1,250,470 1,183,804 1,183,711 1,160,902 1,152,592 1,158,501 878,975 189,236
Non-Current assets (Including Goodwill) 307,836 305,978 294,164 293,376 298,659 273,156 276,403 274,063 278,858 33,959
Short term investments 514 1,795 37,466 108,095 137,558 285,561 263,452 100,568 766,592 7,237
Inventories 543,139 399,214 337,117 309,081 294,587 234,182 224,170 198,199 253,657 291,549
Trade and other receivable including dues from 626,292 525,552 559,104 446,172 446,986 401,885 356,254 309,624 275,479 287,210
related parties
Other current assets (Including income tax 44,844 70,709 89,970 91,574 46,921 56,555 45,633 50,388 38,447 9,622
refunds)
Total Assets 3,068,634 2,886,767 2,568,291 2,432,102 2,408,422 2,412,241 2,318,504 2,091,343 2,492,008 818,812
WHAT WE OWED
Stated capital 1,294,815 1,294,815 1,294,815 1,294,815 1,294,815 1,294,815 1,294,815 1,294,815 1,294,815 274,815
Revenue reserves 422,733 285,844 286,241 220,510 128,747 279,707 230,807 101,092 154,356 85,780
Other components of equity 358,834 295,331 266,119 231,538 246,567 196,616 173,184 153,623 148,445 91,832
Total equity 2,076,382 1,875,990 1,847,175 1,746,863 1,670,129 1,771,138 1,698,806 1,549,530 1,597,616 452,427
Non-current liabilities 373,756 484,751 351,490 325,922 306,688 317,639 285,806 254,454 324,108 57,841
Interest bearing borrowings - current 43,455 43,455 4,629 33,495 50,000 50,000 50,000 51,102 18,331 -
Lease liabilities - current 1,041 960 - - - - - - - -
Bank overdrafts 160,780 176,280 15,632 1,332 39,471 10,435 28,661 12,561 13,070 86,820
Trade and other payables including dues to 393,947 305,331 315,794 282,080 276,642 240,658 255,231 223,696 538,883 216,221
related parties and other current liabilities
Income tax payable 19,273 - 33,571 42,410 65,492 22,371 - - - 5,504
Total equity and liabilities 3,068,634 2,886,767 2,568,291 2,432,102 2,408,422 2,412,241 2,318,504 2,091,343 2,492,008 818,812
The above indicates the simplified income Statement and the Statement of Financial Position of the Group.
TEN YEAR INFORMATION AT A GLANCE
The Statement of Financial Position is categorised in to its key Assets and Liabilities.
Keells Food Products PLC | Annual Report 2020/21

All figures given in Rs.000’s unless otherwise stated.
155
For the year ended 31st March 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
156
KEY INDICATORS
(A) PROFITABILITY & RETURN TO SHAREHOLDERS
Net profit ratio % 8.79 4.18 7.79 7.81 9.03 11.05 9.98 0.02 4.14 5.57
Earnings per share Rs. 12.59 5.89 10.48 9.55 10.80 13.13 10.25 0.02 4.82 14.56
Return on equity % 16.24 8.07 14.87 14.26 16.01 19.29 16.09 0.03 8.87 33.44
Return on capital employed % 14.37 10.12 19.79 18.96 20.51 22.31 18.25 (1.84) 5.41 34.73
Dividend per share - paid Rs. 7.00 6.00 8.00 6.00 16.75 11.00 5.00 2.00 2.00 -
Debt/ equity ratio % 13.96 18.21 2.10 1.99 7.38 8.14 12.51 15.94 16.57 19.19
Shareholder equity ratio* % 67.66 64.99 71.92 71.83 69.35 73.42 73.27 74.09 64.11 55.25
(B) LIQUIDITY
Current ratio Times 1.97 1.90 2.77 2.66 2.15 3.02 2.66 2.29 2.34 1.93
Quick ratio Times 1.09 1.14 1.86 1.80 1.46 2.30 1.99 1.60 1.89 0.99
Interest cover Times 26.17 16.97 229.63 42.47 30.38 31.70 17.25 (0.94) 2.46 24.36
(C) INVESTORS RATIOS

Price earnings ratio Times 12.91 18.37 11.91 13.60 13.43 12.95 10.57 2,750 14.52 6.87
Dividend cover Times 1.80 0.98 1.31 1.59 0.64 1.19 2.05 0.01 2.41 -
Dividend payout % 55.61 101.88 76.37 62.81 155.08 83.80 48.80 10,911.61 18.71 -
Dividend yield % 5.55 6.41 4.62 11.55 6.47 4.62 3.64 2.86 -
KEY FIGURES AND RATIOS
4.31
Earnings yield % 7.75 5.44 8.40 7.35 7.45 7.72 9.46 0.04 6.89 14.56
Net assets per share Rs. 81.43 73.57 72.44 68.50 65.50 69.46 66.62 60.77 62.65 17.74
(D) SHARE VALUATION

Market value per share Rs. 162.50 108.20 124.80 129.90 145.00 170.00 108.30 55.00 70.00 100.00
(E) OTHER INFORMATION

No. of Permanent Employees No 399 383 352 339 343 322 301 299 448 453
Turnover per Permanent employee Rs.'000 9,151 9,375 9,744 9,201 8,888 9,411 8,698 7,126 4,905 5,141
Value added per employee Rs.'000 3,726 4,097 4,803 4,536 3,844 3,887 3,593 2,683 1,824 2,028
The above ratio are based on the Income Statement and the Statement of Financial Position of the Group.
The Financial Statement have been prepared adopting SLFRS/LKAS since year ended 31st March 2012
*Also know as Equity assets ration

REAL ESTATE PORTFOLIO
Net Book Value
Number of Buildings in Land in Acres 2021 2020

Location Buildings Sq. Feet Freehold Leasehold Rs. '000 Rs. '000
KEELLS FOOD PRODUCTS PLC
16, Minuwangoda Road, Ekala, Ja-Ela 5 44,578 3.00 - 351,197 329,776
16, Minuwangoda Road, Ekala, Ja-Ela 3 8,120 - 1.00 10,697 13,628
Industrial Estate, Makadura, Gonawila, Pannala 4 41,166 - 4.08 304,108 299,988
Industrial Estate, Makadura, Gonawila, Pannala - - 3.86 - 43,547 42,005
709,549 685,397

GLOSSARY OF FINANCIAL TERMINOLOGY
ACCRUAL BASIS MARKET CAPITALISATION
Recording Revenues and Expenses in the period in which they Number of Shares in issue at the end the of period multiplied by the
are earned or incurred regardless of whether cash is received or share price at end of the period .
disbursed in that period.
NET ASSETS
CAPITAL EMPLOYED Total Assets minus Current Liabilities minus Long Term Liabilities
Shareholders’ Fund plus Debt. minus Minority interest.
CASH EARNINGS PER SHARE NET ASSET PER SHARE

Profit After Tax attributable to Ordinary Shareholding adjusted for Net Assets divided by number of Ordinary Shares in issue at the end
non-cash items over by weighted average number of shares in issue of the period.
during the year.
NET DEBT
CONTINGENT LIABILITIES Debt minus Cash and Short Term Deposit.
A condition or situation existing at the end of the reporting period
due to past events, where the financial effect is not recognised NET TURNOVER PER PERMANENT EMPLOYEE
because: Net Turnover over average number of permanent employees.
1. The obligation is crystallised by the occurrence or non occurrence
of one or more future events or, PRICE EARNINGS RATIO
Market Price of Share over Earnings per Share.
2. A probable outflow of economic resources is not expected
or,
QUICK RATIO
3. It is unable to be measured with sufficient reliability. Cash plus Short-Term Investments plus Receivables over Current
Liabilities.
CURRENT RATIO
Current Assets over Current Liabilities. RETURN ON ASSETS
Profit After Tax over Average Total Assets.
DEBT/ EQUITY RATIO (GEARING)
Debt as a percentage of Shareholders’ Funds. RETURN ON CAPITAL EMPLOYED
Earnings Before Interest and Tax as a Percentage of Average of
DIVIDEND COVER Shareholders’ Funds plus Average Total Debt.
Earnings per Share over by Dividend per Share.
RETURN ON EQUITY
DIVIDEND PAYOUT RATIO Consolidated Profit after Tax as a Percentage of Average
Total Dividend as a percentage of Profit After Tax. Shareholders’ Funds .
DIVIDEND YIELD SHAREHOLDERS’ FUND

Dividend per Share as a percentage of Market Price of Share at the Stated Capital, Other Components of Equity and Revenue Reserves.
end of the period.
SHAREHOLDERS’ EQUITY RATIO/ EQUITY ASSETS RATIO
EARNINGS PER SHARE (EPS) Total Equity over Total Assets.
Profit After Tax attributable to Ordinary Share holding over weighted
average number of shares in issue during the period. TOTAL ASSETS
Fixed Assets plus Investment plus Non-Current Assets plus Current
ENTERPRISE VALUE Assets.
Market Capitalisation plus Debt and minus Total Cash and Cash
Equivalents. TOTAL DEBTS
Long-Term Loans plus Short-Term Loans and Overdraft.
EARNINGS YIELD
Earnings per Share as a percentage of Market Price per Share at the *The Lease Liabilities are excluded from Total Debt
end of the period.
TOTAL DEBTS/ TOTAL ASSETS
EFFECTIVE RATE OF TAXATION Total Debts over Total Assets.
Income Tax including Deferred Tax over Profit Before Tax.
TOTAL VALUE ADDED
INTEREST COVER The difference between Revenue (Including Other Income) and Expenses,
Profit Before Interest and Tax over Finance Expenses. Cost of Materials and Services purchased from External Sources.
158
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 39th Annual General Meeting (Meeting) of Keells Food Products PLC (Company) will be held as a virtual
meeting on Wednesday, 23rd June 2021 at 2.00 p.m.
The business to be brought before the Meeting will be:
1. To read the Notice convening the Meeting.
2. To receive and consider the Annual Report and Financial Statements for the Financial Year ended 31 March 2021 with the Report of
the Auditors thereon.
3. To re-elect as a Director, Ms. P N Fernando who retires in terms of Article 90 of the Articles of Association of the Company. A brief
profile of Ms. P N Fernando is contained in the Board of Directors’ section in the Annual Report.
4. To re-elect as a Director, Mr. J G A Cooray who retires in terms of Article 83 of the Articles of Association of the Company. A brief
profile of Mr.J G A Cooray is contained in the Board of Directors’ section in the Annual Report.
5. To re-elect as a Director, Mr. D P Gamlath who retires in terms of Article 83 of the Articles of Association of the Company. A brief profile
of Mr. D P Gamlath is contained in the Board of Directors’ section in the Annual Report.
6. To re-appoint the Auditors and to authorise the Directors to determine their remuneration.
7. To consider any other business of which due notice has been given in terms of the relevant laws and regulations.
The Annual Report and Financial Statements of the Company are available on the:
(1) Corporate Website - https://www.keellsfoods.com/downloads and

(2) The Colombo Stock Exchange Website - https://www.cse.lk/Search Company - Keells Food Products PLC
Members may also access the Annual Report and Financial Statements on their electronic devices by scanning the following QR code.
By Order of the Board

Keells Food Products PLC
Keells Consultants (Private) Limited

Secretaries
20th May 2021

NOTICE OF ANNUAL GENERAL MEETING
For clarifications on how to download and/or access the Annual Report and Financial Statements, please contact Mr. Nalinda Dissanayake
on +94 11 2236317 during normal office hours (8.30 a.m. to 4.30 p.m.) or email nalinda.kfp@keells.com.
Should Members wish to obtain a hard copy of the Annual Report, they may send a written request to No.148, Vauxhall Street, Colombo
2 or fax number +94 11 2447422 by filling the request form attached to the Form of Proxy. A printed copy of the Annual Report will be
forwarded by the Company within eight (8) market days from the date of receipt of the request.
Notes:
a. A member unable to attend is entitled to appoint a Proxy to attend and vote in his/her place.
b. A proxy need not be a member of the Company.
c. A member wishing to vote by Proxy at the meeting may use the Form of Proxy enclosed.
d. Members are encouraged to vote by Proxy through the appointment of a member of the Board of Directors to vote on their behalf and
to include their voting preferences on the resolutions to be taken up at the Meeting in the Form of Proxy.
e. In order to be valid, the completed Form of Proxy must be lodged at the registered office of the Company or forwarded to the email
address: keellsconsultants@keells.com or Fax No. +94 11 2439037 not less than 48 hours before the meeting.
f. A vote can be taken on a show of hands or by a poll. , If a poll is demanded, each share is entitled to one vote. Votes can be cast
in person, by proxy or corporate representatives. In the event an individual member and his/her proxy holder are both present at the
meeting, only the member’s vote is counted. If the proxy holder’s appointor has indicated the manner of voting, only the appointor’s
indication of the manner to vote will be used.
g. Instructions as to attending the virtual meeting are attached.
160
FORM OF PROXY
I/We..........................................................................................................................................................................................................of
..................................................................................................................................................being a member/s of Keells Food Products
PLC, hereby appoint: ................................................................................................................................................................................of
......................................................................................................... or failing him/her
Mr. Krishan Niraj Jayasekera Balendra or failing him

Mr. Joseph Gihan Adisha Cooray or failing him
Mr. Daminda Prabhath Gamlath or failing him
Ms. Shehara De Silva or failing her
Mr. Pravir Dhanoush Samarasinghe or failing him
Mr. Amal Eran Herath Sanderatne or failing him
Mr. Indrajit Samarajiva or failing him
Ms. Payagalage Nelindra Fernando
as my/our proxy to represent me/us and vote on my/our behalf at the Thirty Ninth Annual General Meeting of the Company to be held
on Wednesday, 23rd June 2021 at 2.00 p.m. and at any postponement or adjournment thereof, and at every poll which may be taken in
consequence thereof.
I/We, the undersigned, hereby direct my/our proxy to vote for me/us and on my/our behalf on the specified Resolution as indicated by the
letter “X” in the appropriate cage:
FOR AGAINST
To re-elect as a Director, Ms. P N Fernando, who retires in terms of Article 90 of the Articles of
Association of the Company.
To re-elect as a Director, Mr. J G A Cooray, who retires in terms of Article 83 of the Articles of
Association of the Company.
To re-elect as a Director, Mr. D P Gamlath, who retires in terms of Article 83 of the Articles
of Association of the Company.
To re-appoint the Auditors and to authorise the Directors to determine their remuneration.
Signed on this ………………… day of …………………… Two Thousand and Twenty One.
...........................................................
Signature/s of shareholder/s
NOTE: INSTRUCTIONS AS TO COMPLETION OF THE FORM OF PROXY ARE NOTED ON THE REVERSE

FORM OF PROXY
INSTRUCTIONS AS TO COMPLETION OF PROXY
1. Please perfect the Form of Proxy by filling in legibly your full name and address, signing in the space provided and filling in the date of
signature.
2. The completed Form of Proxy should be deposited at the Registered Office of the Company at No. 117, Sir Chittampalam A. Gardiner
Mawatha, Colombo 2, or forwarded to the email address: keellsconsultants@keells.com or Fax No. +94 11 2439037 no later than 48
hours before the time appointed for the holding of the Meeting.
3. If the Form of Proxy is signed by an Attorney, the relevant Power of Attorney should accompany the completed Form of Proxy for
registration, if such Power of Attorney has not already been registered with the Company.
4. If the appointor is a company or corporation, the Form of Proxy should be executed under its Common Seal or by a duly authorised
officer of the company or corporation in accordance with its Articles of Association or Constitution.
5. If this Form of Proxy is returned without any indication of how the person appointed as Proxy shall vote, then the Proxy shall exercise
his/her discretion as to how he/she votes or, whether or not he/she abstains from voting.
Please fill in the following details:
Name : ………………………………………………………………………………….………………………………….…………………
Address : ……………………………………………………………………………………………………….……………………………
Jointly with : …………………………………………………………………………….………………………………….………………...
Share Folio No/ CDS Account No : ………………………………………………………………………………………………….…….
National Identity Card No. :………………………………………………………………………………………………...……..………..
162
NOTES

NOTES
164
CORPORATE INFORMATION
NAME OF COMPANY AUDIT COMMITTEE
Keells Food Products PLC Mr. P D Samarasinghe (Chairman)
Ms. S De Silva
COMPANY REGISTRATION NUMBER Mr. A E H Sanderatne
PQ 3 Mr. I Samarajiva
LEGAL FORM SECRETARIES & REGISTRARS

Public Limited Liability Company Established in 1982 Keells Consultants (Pvt) Ltd
No. 117, Sir Chittampalam A. Gardiner
REGISTERED OFFICE OF THE COMPANY Mawatha, Colombo 02, Sri Lanka.
No. 117, Sir Chittampalam A, Gardiner Tel: +94 11 2306245
Mawatha, Colombo 02, Sri Lanka. Fax: +94 11 2439037
Tel: +94 11 2421101
AUDITORS
EKALA FACTORY Ernst & Young, Chartered Accountants,
No.16, Minuwangoda Road, 201, De Saram Place, Colombo 10,
Ekala, Ja-Ela, Sri Lanka. Sri Lanka.
Tel: +94 11 2236317
Fax: +94 11 2236359 BANKERS
E-mail: foods@keells.com Bank of Ceylon
Web: www.keellsfoods.com Commercial Bank of Ceylon PLC
Deutsche Bank AG
PANNALA FACTORY DFCC Bank
P.O. Box 14, Industrial State, Makadura, Hongkong & Shanghai Banking Corporation Ltd
Gonawila (NWP), Sri Lanka. Nation Trust Bank PLC
Tel: +94 037 4933248-51
Fax: +94 031 2298195 STOCK EXCHANGE LISTING
The Ordinary Shares of the Company are Listed with the
BOARD OF DIRECTORS Colombo Stock Exchange of Sri Lanka
Mr. K N J Balendra (Chairman)
Mr. J G A Cooray SUBSIDIARY COMPANY
Mr. D P Gamlath John Keells Foods India (Pvt) Ltd
Ms. S De Silva
Mr. P D Samarasinghe
Mr. I Samarajiva
Mr. A E H Sanderatne
Ms. P N Fernando
Designed & produced by
Printed by Printel (Pvt) Limited.

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Keells Food Products PLC I Annual Report 2020/21

Read the Keells Food Products PLC

This report is a testament to our unchanged focus to meet

Performance Highlights 04 Audit Committee Report 87

Non-Financial Highlights 05 Statement of Directors’ Responsibility 90

Implications of COVID-19 06 Independent Auditor’s Report 91

Chairman’s Message 07 Income Statement 94

About Our Annual Report 10 Statement of Comprehensive Income 95

Events of the Year 12 Statement of Financial Position 96

Statement of Cash Flows 97

GRI Context Index 66

Enterprise Risk Management 70

Our passion is to deliver pleasure and nutrition

Innovation : Changing constantly, reinventing and evolving

VALUES Integrity : Doing the right thing always

Excellence : Constantly raising the bar

Caring : Fostering a great place to work

Trust : Building strong relationships based on openness

KEELLS FOOD PRODUCTS PLC

Keells Food Products PLC | Annual Report 2020/21 3

FINANCIAL POSITION 2021 2020 YOY change

WORKING CAPITAL MANAGEMENT 2021 2020 YOY change

PROFITABILITY RATIOS 2021 2020 YOY change

INVESTOR RATIOS 2021 2020 YOY change

Manufactured Capital Human Capital Natural Capital

4 EMPLOYEES ENERGY CONSUMPTION

Male Female 4,300 0.89

OUR BUSINESS PARTNERS 2020: Rs. 6 million

+30,000 Retail Outlets Rs. 0.6 million

Food Safety Management:

SUPPLIER VALUE 3,000 SLS Certifications:

Keells Food Products PLC | Annual Report 2020/21 5

operations hotel channel several key inputs by distributors

Keells Food Products PLC | Annual Report 2020/21 7

KFP is well positioned to maintain its leadership position in the

20th May 2021

Keells Food Products PLC | Annual Report 2020/21 9

KEY CONCEPTS Human Capital

Social and Relationship Capital

Completeness Conciseness Consistency Balance Intellectual Capital

Reporting Framework Assurance Mechanism

Integrated report • <IR> Framework -

• Code of Best Practice on Corporate

outcomes for our stakeholders.

performance discussed in relation to the value preserved/ created and

Management, with emphasis on the principle risks faced during the

• Increased connectivity of information by using navigation icons across the Report

Keells Food Products PLC | Annual Report 2020/21 11

Launch of Chunky Chicken Sausages Sampling Activities

The product was supported by digital awareness and

Launch of ‘Dhaiya Rice’ BTL Visibility – Raw Meat

Launch of KeellsKrest Branded Raw Chicken Krest Mobile Operation

Keells Food Products PLC | Annual Report 2020/21 13

PRODUCT AND PROCESS QUALITY

RS. 2,076 Mn OUR BRANDS

Keells Food Products PLC | Annual Report 2020/21 15

VALUE CREATION MODEL

CAPITAL INPUTS VALUE TRANSFORMATION

FINANCIAL CAPITAL VISION

• Sustainable growth (page 26) • Procurement

• Crumbed and formed meat • Strategic planning

Underpinned by effective Corporate Governance (page 49) and

The natural resources we rely on to manufacture and