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Contents
Page No.
Financial Highlights 02
Chairman’s Review 03
Board of Directors 05
Corporate Governance 07
Report of the Audit Committee 09
Report of the Remuneration Committee 09
MJF Charitable Foundation / Dilmah Conservation 10
Report of the Directors 18
Statement of Directors’ Responsibilities 21
Independent Auditors Report 22
Statement of Financial Position 23
Statement of Comprehensive Income 24
Statement of Changes in Equity 25
Statement of Cash Flows 26
Notes to the Financial Statements 27
Five Year Summary 54
Information to Investors 55
Notice of Meeting 57
Form of Proxy 59
Ceylon Tea Services PLC / Annual Report 2012/2013 1

Financial Highlights
FINANCIAL HIGHLIGHTS
2013 2012 %
CONSOLIDATED Rs.' 000 Rs.' 000 CHANGE
For the year ended 31st March
Turnover 7,084,157 5,839,922 21.3%

Net Profit before Income Tax 1,625,782 1,921,764 -15.4%
Income Tax on Profits (194,895) (234,844) -17.0%
Profit for the Year 1,430,887 1,686,920 -15.2%
Gross Dividends 800,000 800,000 0.0%
As at 31st March
Shareholders' Funds 7,909,271 7,172,370 10.3%

Non-current Liabilities 143,017 117,456 21.8%
Current Assets 6,528,976 6,256,147 4.4%
Current Liabilities 700,610 751,447 -6.8%
Property, Plant & Equipment (Incl. Leasehold) 1,521,026 1,187,395 28.1%
Investment Property 234,064 234,064 0.0%
Intangible Assets 3,075 3,925 -21.7%
Other Financial Assets 465,757 359,742 29.5%
Per Ordinary Share
Earnings (Rs.) 71.54 84.35 -15.2%

Dividends (Rs.) 40.00 40.00 0.0%
Net Current Assets (Rs.) 291.42 275.24 5.9%
Market Value (Rs.) 651.10 650.00 0.2%
Net Assets per Share (Rs.) 395.46 358.62 10.3%
Key Ratios
Return on Average Shareholder Funds (%) 18.98 24.32 -22.0%

Price Earnings Ratio 9.10 7.71 18.1%
Dividend Cover (times) 1.79 2.11 -15.2%
Liquidity (times) 9.32 8.33 11.9%
2 Ceylon Tea Services PLC / Annual Report 2012/2013

Chairman 's Review
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Performance
Sales revenue recorded good growth of 21.3% over the previous year. This is a creditable achievement, especially in
prevailing poor trading conditions.
Important markets, including Europe, Middle East and Asia, continue to offer exciting opportunities for specialty tea
and other innovations to creative minds and serious marketers who believe in tea. No other tea origin offers such great
opportunities as Sri Lanka.
Outlook for Tea

Amidst the gloom and doom most traders speak of, your company reacted to the emphasis by retailers on cheap tea in an
effective manner. Dilmah tea moved in exactly the opposite direction by driving its innovations, rather aggressively and at
much cost. Consumer response has been encouraging.
Dilmah innovations in Tea Gastronomy, education in tea and in taking tea beyond traditional boundaries are shaking the
tea category. The Dilmah School of Tea continues to share knowledge of tea with hospitality and culinary professionals
from around the world, helping them to understand tea and integrate tea as a luxurious addition to their guest experience.
The lack of knowledge of tea in relation to its traditional manufacture, taste and other aspects beyond the conventional
presentation of tea, has compromised the ability of the tea industry to compete with other, less healthy and much less
sophisticated beverages. We are changing that, even on a small scale, by delivering innovation that respects authenticity.
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crafting an unique offering to hospitality operators around the world, and focusing on elevating Ceylon Tea to its deserved
position as a celebrated, natural herbal beverage. The initiatives that Dilmah has launched in the form of its Real High Tea
Challenge, Tea in Five Senses, t-Lounge and other concepts has helped support the emphasis on premium quality and
positioning.
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its commitment in relation to the founding philosophy of making business a matter of human service. The MJF Charitable
Foundation has developed its MJF Centre in Moratuwa to a centre for excellence in the care of differently able children and
established the Rainbow Centre, a facility for children with Down Syndrome, Cerebral Palsy and Autism.
The MJF Charitable Foundation has maintained its emphasis on delivering effective humanitarian support to marginalized
communities across the country by continuing the successful Small Entrepreneur Programme (SEP). The SEP has evolved
as a national scale programme with the extension of its activities to the Northern and Eastern regions and the continuation
of the effort in the Central and Southern parts of Sri Lanka.
The MJF Charitable Foundation collaborated with sister organization Dilmah Conservation in a unique project in
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region, whilst, at the same time addressing environmental priorities and providing sustainable employment for the
community by creating a Heritage Park which attracts a large number of visitors.
Your company is unique in the sincerity and effectiveness of its endeavors in ensuring that the success of Dilmah is shared
with the underprivileged. These and other initiatives of the MJF Charitable Foundation and Dilmah Conservation are
based on principles of sustainability and effectiveness, with the intention of protecting the dignity of recipients of aid and
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The Plight of the Tea Industry

Last year I wrote extensively about reviving the tea industry from its inactivity, lack of progress, forward thinking and
planning. Unfortunately, government too appears to have left tea to its own devices! Stakeholders in the industry show no
vision or initiative towards moving from suppliers to marketers. Tea has remained fossilized in a colonial trading culture
of producer, broker and supplier/exporter, as forced on us over 150 years ago. This is to the detriment of the people of
Sri Lanka as the unimaginative and outdated approach of stakeholders has only caused the industry to lose a plethora of
opportunities to foreign owned brands and other beverages.
Tea Board
Regulations applicable to tea exports established in the 1980’s still prevail although many are irrelevant today, 30 years
later. Application of outdated regulations in the current environment cause serious setbacks to exporters of value
added tea. It is essential that the Tea Board reviews and updates regulations from time to time, an essential element in a
marketing environment. It must be understood that conditions suitable for regulating and guiding traders of bulk tea and
private label are not necessarily appropriate to marketers of value added tea, under Sri Lankan brand names.

Chairman 's Review (Contd...)
Those entrepreneurs who grow, process and pack at origin - in Sri Lanka, under locally owned brand names, should
receive preferential treatment. Especially those who operate successfully in sophisticated markets, where Ceylon Tea is
woefully absent otherwise.
There is no doubt that strict regulations and guidelines are necessary to assist exporters in every possible way and towards
monitoring their activities to ensure compliance. They should however be relevant, focused and, above all, adapted to
conditions in the market place.
Existing regulations applicable from plantations to auctions are adequate, however they are not implemented due to lack
of staff and fear of reprisals. This is weighing heavily on the industry.
The Lion Logo of Ceylon Tea evolved in the UK, provided a wonderful strategy to establish Pure Ceylon Tea. As it turned
out it was a mere strategy to establish and promote a number of foreign brands of “Ceylon Tea”, in fact, containing 50%
tea from other origins. No one then or now, is able to determine what percentage of Ceylon Tea was contained in those
brands. That was a glorious opportunity for foreigners to develop brands and cash in on the Lion Logo, which was heavily
promoted and advertised at the time. In fact there were about 450 brands carrying the Lion Logo then. While the number
of packs increased, exports of Ceylon Tea decreased. I served on the Ceylon Tea Propaganda Board as nominee of the
Ceylon Tea Traders Association for a period of 8 years. During my tenure, I pointed out the long-term impact of this
“strategy” on Ceylon Tea. While tea producers funded the Lion Logo campaign, by the 1980’s they began to disappear.
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enjoying Ceylon Tea. The exploitation of the term Ceylon Tea where the contents are not 100% Ceylon Tea should not be
permitted. This is still happening apace in Russia and other markets. What is worse is that such tea is being re-exported to
other markets with the same deceptive labeling, at half the price of genuine Ceylon Tea exported from Sri Lanka.
Producers are best suited to export their crop therefore present restrictions should be lifted and they should be incentivised
to market their crop direct. Farmers taking their crop to the market are a growing trend and we should take advantage of
it. Consumer interest in this concept is growing dramatically.
Prospects
I do not expect any improvement in global demand for tea this year, however your company’s efforts in driving the quality
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LQQRYDWLRQV,KRSHWRUHSRUWJRRGUHVXOWVLQWKHFXUUHQWÀQDQFLDO\HDU
I wish to place on record my sincere appreciation of shareholders admirable gesture in extending very generous support
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Foundation in various parts of the island and especially at the MJF Centre at Katubedde. You will be touched by what we
do and by our passionate staff members who have dedicated their lives towards bringing hope and happiness to others.
You are a part of these good works.
Dividends
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Rs. 167m due to appreciation of the rupee against the US dollar.
Your Directors propose to pay a Final Dividend of Rs. 10/- per share, which makes a total payment of Rs. 40/- per share
together with the Interim Dividend of Rs. 30/- per share paid previously.
I thank my colleagues, our global distributors and media, for extending their support and co-operation and for their
goodwill.
I would like to thank staff at all levels for their tireless efforts in pursuing our mission to reposition Ceylon Tea at its
rightful place across the globe.
Merrill J Fernando
Chairman
14th June 2013

Board of Directors
Mr. Merrill J. Fernando

Chairman
Merrill J Fernando is the founder of the MJF Group of Companies and the global brand, DILMAH which re-launched Ceylon
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multinational brands to become the respected global brand name for freshness and quality.
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overseas. He showed producers of raw material the way out of the commodity trap.
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prices which would enhance Sri Lanka's foreign exchange earnings substantially if the rest of the industry followed suit.
In his commitment to care and share, Mr. Fernando established the MJF Charitable Foundation, a charity that works to create
better conditions for plantation workers, underprivileged children, elders and society's victims.
His primary objective is to make tea a sustainable industry and to make business a matter of human service.
Mr. Himendra S. Ranaweera

Deputy Chairman/ CEO
Mr. Himendra S Ranaweera worked with the MJF Group of Companies for 22 years and is now its Deputy Chairman. He
was appointed to the Board of Ceylon Tea Services PLC in April 1998. Mr. Ranaweera has over 40 years experience in
Operations Management in Sri Lanka and overseas.
Mr. Malik J. Fernando

Director
Mr. Malik J. Fernando is Director Operations of the MJF Group. He was appointed to the Board of Ceylon Tea Services PLC
in September 1991 as an Executive Director.
Mr. Fernando had his secondary education at Stonyhurst College, England and obtained a B.Sc. in Management from Babson
College, Boston.
He joined the MJF Group as a Management Trainee nearly 28 years ago. As the Director Operations he also oversees the tea
growing and broking activities of the Group. Mr. Fernando spearheads MJF Leisure which is creating a small luxury resort
chain, starting with the award winning Ceylon Tea Trails and next Cape Weligama, a cliff top beach resort.
Mr. Dilhan C. Fernando

Director
Mr. Dilhan C Fernando is Director Marketing of the MJF Group. He was appointed to the Board of Ceylon Tea Services PLC
in September 1991 as an Executive Director. Mr. Fernando had his secondary education at Stonyhurst College, England
and graduated from the London School of Economics with a BSc (Hons) in Economics. He joined the MJF Group as a
Management Trainee nearly 23 years ago. He leads the Marketing Division with a dedicated team.
Ms. Minette Perera

Director
Ms. Minette Perera was appointed to the Board of Ceylon Tea Services PLC in September 2000 as an Executive Director.
She is a Fellow member of the Institute of Chartered Accountants of Sri Lanka, the Chartered Institute of Management
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Finance Director for over 12 years, Ms. Perera retired from her post on 31st March 2013 and continues on the Board as a
Non-Executive Director.
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companies, and she has held board positions before joining the Company.

Board of Directors (Contd...)
Mr. Roshan Tissaaratchy

Director
Mr. Roshan Tissaaratchy, is Director Sales of the MJF Group and was appointed to the Board of Ceylon Tea Services PLC
in April 2005 as an Executive Director. Mr. Tissaaratchy is a Graduate of the University of Colombo and a Member of The
Chartered Institute of Marketing of UK. He also has an MBA from the University of Sri Jayawardenapura. He has over 20
years working experience in all aspects of Sales and Marketing and in a number of industries and in advertising.
Mr. Rajan Asirwatham

Non Executive Director
Mr. Rajan Asirwatham was appointed to the Board of Ceylon Tea Services PLC on 04th September 2008 as a Non Executive
Director. He is a Fellow member of the Institute of Chartered Accountants of Sri Lanka. After a distinguished career at Ford
Rhodes, now known as KPMG, he retired as its Senior Partner and Country Head on 31st March 2008.
Mr. Asirwatham currently is the Chairman of the Financial Systems Stability Committee of the Central Bank of Sri Lanka,
member of the advisory council of the Ceylon Chamber of Commerce and is on the Council of the Colombo University. He is
also a member of the Board of the Post Graduate Institute of Medicine, member of the Advisory Committee - Default Taxes
(Special Provisions) Act No. 16 of 2010, appointed by His Excellency the President, in his capacity as the Minister of Finance.
Mr. Gritakumar E. Chitty

Non Executive Director
Mr. Gritakumar E. Chitty, Attorney-at-Law and Advocate of the Supreme Court since 1968, is a former, Assistant Secretary-
General and founding Registrar of the UN International Law of the Sea Tribunal, Hamburg, in which capacity he was its
Chief Executive and Head of legal affairs (1996 - 2001). He was in law practice in Sri Lanka from 1968, joined the United
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Since 2002 he has been an Adviser to the Sri Lanka Delegation to the UN. Presently he is an adviser to the Inter Ministerial
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before the UN Disputes Tribunal and the UN Appeals Tribunal, and a Trustee of the Weeramantry International Centre for
Peace Education and Research.
Mr. Chitty is a Life Member of the Bar Association of Sri Lanka and Member, American Society of International Law.

Corporate Governance
The Board of Directors of Ceylon Tea Services PLC is committed towards attaining highest standards of Corporate
Governance and Corporate Ethics with the objective of safeguarding the interest of all stakeholders and ensuring future
business sustainability. We resolutely believe the need to balance interests of all stakeholders and endorse the independence
of business and society.
The Board of Directors

The Board, recognize that they are responsible for the formulation and implementation of overall business strategies and
policies, setting standards on a short, medium and long term basis and adopting good governance in the management of
the affairs of the Company.
Composition of the Board

The Board comprises of the Chairman, Deputy Chairman/CEO, four Executive Directors and two Non Executive Independent
Directors. The board is made up of members with substantial experience and knowledge concerning the industry and the
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5 to 6.
The Board has assessed the independence of Non-Executive Directors and is in the view that two of the board members
namely Mr. Rajan Asirwatham & Mr. Gritakumar Chitty are ‘Independent’ as per Listing Rules of the Colombo Stock
Exchange. The Non Executive Directors submit annual declarations of their independence/non-independence as per Listing
Rules.
Responsibilities of the Board

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The Board achieves this through Formulation of Business Strategy and Direction, Establishing Corporate Policy, Budgetary
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safeguard Company’s Assets. The Board in discharging its duties seeks independent professional advice from external parties
when necessary. Formal Board meetings are held once a quarter and special Board meetings are held, when circumstances
arise.
Supply of information
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Board Committees
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the board has appointed two sub committees: the Audit Committee and the Remuneration Committee.
Audit Committee
The Audit Committee is made up of two Non Executive Independent Directors, namely Mr. Rajan Asirwatham (Chairman)
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the Audit Committee is given on page 9.
Remuneration Committee
The Remuneration Committee is made up of two Non Executive Independent Directors, namely Mr. Gritakumar Chitty
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and the report of the Remuneration Committee is given on page 9.
Performance Reviews
Market Review – The individual market performances are evaluated on a monthly and quarterly basis. The actual
performance is compared with the budgets, prior year performance, competitor activities, media communications and
other marketing activities.
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Audit Review – The internal audit function forms an important unit of the Company and the internal auditor carries out
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the system and procedure of the Company and submit their reports.
Corporate Governance (Contd...)
HR Review - The Company carries out an appraisal of each and every employee on a bi-annual basis. The review
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Executive Management Team

The CEO and Operational Directors are responsible for the operational management of the company. They are ably supported
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functional areas.
Systems and Internal Controls

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its assets, and to ensure the compliance with statutory requirements. The Company is ISO 9001: 2008 Quality Management
System, ISO 22000: 2005 and HACCP Food Safety Management System, BRC- Issue 06 : Global Standard for Food Safety
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operational and functional areas of the organization. These PPI’s are monitored monthly and management reviews are held
quarterly.
Risk Review
Evaluation of risk is an ongoing process adopted by the Company. The Board reviews and deliberates on the various risks
the Company may face and takes proactive decisions to ensure that all reasonable steps are taken to reduce or eliminate such
risk.
Financial Reporting
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Relationship with Shareholders

Shareholders are encouraged to be present, actively participate and vote at the Annual General Meeting and the Directors
consider the AGM as an opportunity to constructively communicate with shareholders. The shareholders have the option
of raising any question relating to the performance of the Company and whenever possible the Company implements their
suggestions.

Report of the Audit Committee
The Audit Committee appointed by the Board of Directors of Ceylon Tea Services PLC, comprises of two Non Executive
Directors, both of whom are ‘Independent’ as per the Listing Rules of the Colombo Stock Exchange.
The members of the Committee during the year under review were Mr. Rajan Asirwatham (Chairman) and Mr. Gritakumar
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Finance Director attend the meetings of the Audit Committee by invitation. The Committee held quarterly meetings during
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avenue of communication among the External Auditors, management and the Board.
The committee regularly reviews the scope of the internal audit function and reviews audit programs proposed. The internal
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are being implemented. The committee also assesses the effectiveness of the internal audit function. The committee is of the
view that the internal controls prevalent within the Company are satisfactory and provides reasonable assurance that the
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The Committee has recommended to the Board of Directors that Messrs Ernst & Young be re-appointed the Auditors for the
year ending 31st March 2014 subject to the approval of the shareholders at the Annual General Meeting. The Committee has
reviewed the non audit services provided by the External Auditors to ensure that their independence as Auditors has not
been compromised. The Audit committee has also made its recommendations to the Board of Directors on the fees payable
to the Auditors for approval by the Board.
Sgd.
Chairman – Audit Committee
13th June 2013
Report of the Remuneration Committee
The Remuneration Committee, appointed by and responsible to the Board comprises of two Independent Non Executive
Directors. The members of the Committee during the year under review were Mr. Gritakumar Chitty (Chairman) and Mr.
Rajan Asirwatham. The Committee held two meetings during the year under review.
The remuneration policy of the company is formulated to attract and retain high caliber personnel and motivate them to
develop and implement the business strategy in order to optimize long term share holder value creation.
The committee is responsible for determining the compensation of the senior management and to lay down guidelines and
parameters for the compensation structure of all management staff of the Company. The Deputy Chairman/CEO and the
Finance Director attend the meetings of the Remuneration Committee by invitation and in this decision making process
necessary information and recommendations are obtained from the Deputy Chairman / CEO.
The remuneration packages are aligned to the individual performance and to the strategic priorities.
Sgd.
On behalf of Chairman – Remuneration Committee
13th June 2013

MJF Charitable Foundation
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make his family business a matter of human service. The Foundation utilises part of the revenue from the global sales of
Dilmah to change the lives of the underprivileged in Sri Lanka. Each year, the Foundation works towards providing better
working conditions, improved healthcare facilities, housing, water and sanitation for plantation communities and cares for
their children at its Child Development Centres. The Foundation also nurtures children from marginalised communities
through the MJF Kids Programme, provides empowerment for war affected women, creates employment opportunities
through the Small Entrepreneur Programme and provides care and nutrition for the differently abled. For more details
visit www.mjffoundation.org
MJF Kids Programme

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sharing the success of his Dilmah brand with the underprivileged. It is free for children from underprivileged families,
especially from the vicinity of the MJF Group, where some of the most impoverished urban dwellings in the country’s
capital, Colombo are located.
Today, more than 1000 children form the MJF Kids and are exposed to a life of possibility. The ‘MJF Kids’ are the pride and
joy of the Founder and following its success in Peliyagoda and Maligawatta, the programme has now been replicated in
the Founder’s hometown of Pallansena, in Siyambalanduwa in the Monaragala Districts – one of the least developed areas
in country, in Moratuwa where a comprehensive programme of support for children from marginalised communities is
carried out and in Point Pedro in the Northern Province to help children marginalised as a result of the now concluded
war. These children are guided by caring teachers in arts, crafts, cookery, sewing and IT, and are assisted in their school
curriculum in English, Science and Mathematics. The objective of the programme is to provide these children with
education, life-skills training, and a general exposure to progressive alternatives outside their own limited and often
dreadful life-experiences.
In addition to ongoing day-to-day activities at these MJF Centres, special events as World Environment Day, International
Children’s Day, a New Year programme, a Vesak lantern competition, a Leadership Training programme and the year end
Celebrating Differences programme were conducted during the year under consideration.
Left: Children in the MJF Kids Programme in Point Pedro, Jaffna receiving support on International Children’s Day Centre: MJF Kids from the Moratuwa Programme
performing the Umbrella Thief during the Celebrating Differences event. Right: A SEP recipient busy at his vocation.
Changing Lives
Small Entrepreneur Programme
The success stories that emerged from the distribution of equipment following the December 2004 tsunami, to enable
communities to resume their vocations, prompted the Foundation to develop its Poverty Alleviation Programme – a long-
term, socio-economic relief effort. Central to this scheme is the Small Entrepreneur Programme (SEP), through which
deserving individuals are provided with necessary equipment and funding to launch a vocational-based business, or to
improve their existing business. Up to now, over 800 individuals with promise and skills have been supported under the
scheme. During the year under consideration, SEP recipients included war widows from the north and east and prisoners
on parole who received support under the Prison Reform and Integrate Programme.

MJF Charitable Foundation (Contd...)
The Plantations Programme

Childcare development
Infants and young children of plantation workers are placed in poorly supervised and dilapidated crèches, or in the care
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This often leads to inadequate care resulting in suffering from a lack of nutrition and poor general health. In addressing
this issue, the Foundation has thus far restored 61 crèches cum Child Development Centres (CDCs) and constructed 14
new Centres which provide care and welfare for over 1,500 children of Dilmah tea garden workers daily. These Child
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caring staff manages the daily operations. These Centres are fully-funded by the MJF Charitable Foundation.
Mid-day meal programme in CDCs

The MJF Charitable Foundation ensures that every child attending any one of the Child Development Centres managed by
the Foundation receives one balanced mid-day meal daily. Having commenced on an experimental basis 6 years ago, the
mid-day meal programme proved to be an immense success due to it adding value to the children’s daily stay at the CDCs.
Left: Children enjoying the outdoors at the Somerset Child Development Centre Centre: With their new school bags courtesy of the MJF Charitable Foundation. Right: A
balanced meal for children from the plantations at one of the plantation CDCs.
Thus the programme has evolved today to include over 1,500 children attending 71 Child Development Centres situated in
the Kahawatte Plantations and 19 Centres situated in Talawakelle Tea Estates. At the Centres, the safety and health levels
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enabled parents to go about their work with a peace of mind that their children are being properly cared for.
School bags for plantation children

Every year, children of Dilmah tea garden workers complete their early childhood education in Foundation run Child
Development Centres and enter into government run schools in the area to commence their primary education. As a
gesture of support, the Foundation provides these children with school bags and other necessary stationary items. During
the year under consideration, 800 youngsters who completed their education at these Centres received schoolbags, a water
bottle, lunch box, pencil box and books to embark on the next phase of their education.
MJF Scholarship scheme

The MJF Scholarship scheme which commenced in 2004 to provide better education for plantation children has so far
provided scholarship opportunities to over 245 children from the plantations. Of them, over 100 students have already
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Somerset Estate and one of the early recipients of the scholarship scheme has now completed his medical studies at the
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which he will commence his medical internship at a government run hospital.

Left: Uplifting the standards of education and facilities in plantation schools. Centre: A fully equipped consultation room at the Somerset Health Centre. Right: An eye
camp to screen senior citizens at the Imboolpitiya Estate.
Somerset Health Centre
The refurbished Merrill J. Fernando Health Centre at the Somerset Estate in Talawakelle which was vested on the Estate
and the community last year continued to be used extensively during the year under consideration. The Centre serves a
population of over 3500 plantation workers and their families, Services include emergency care, ECG services, hemoglobin
and blood sugar level testing, natal care, family planning, health education for adolescents, youth and elders, an oral
cancer and TB control programme and is equipped with an ambulance service to handle swift transfer of patients to
Government Hospitals when required.
Medical Camps
The Foundation continued to provide targeted healthcare through medical camps organised islandwide. A special vision
care programme for school children was carried out in 2012 in the Killinochchi District in the North of Sri Lanka where
over 26,000 school children from 81 schools were screened for vision related issues. The programme is a collaboration
between, So Others May See Inc. (SOMS), a US based NGO located in Colombo, the Ministry of Health, Killinochchi Zonal
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1500 school children with vision related issues were provided with eyewear and where necessary referred for further
examination by eye care specialists.
In March 2013, the Foundation worked with Helpage Sri Lanka to carry out an eye clinic at the Imboolpitiya Estate of the
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senior citizens received free eye glasses courtesy of the MJF Charitable Foundation, while 31 persons in need of cataract
surgery have been referred for surgery at the Helpage Centre in Colombo. The latest eye clinic is the second health camp
targeting plantation communities this year. In early January 2013, members of the Australia Sri Lanka Medical Assistance
Team (AuSLMAT) screened and treated over one thousand estate staff and their families during a 2 ½ day medical camp
held in the Kataboola Estate.
Thoppigala – working to build bridges of peace to connect all communities

Dilmah commenced work in the Thoppigala area, in Eastern Sri Lanka in December 2011 as part of the efforts of the
MJF Charitable Foundation’s community outreach programme. During the year under consideration, the work steadily
progressed with the donation of publications for school libraries and the continuation of the donation of uniform materials
for the children. At the end of March 2013, work at the Thoppigala Heritage Park, which contains the Thoppigala
memorial, dedicated to the lives lost during the battles for peace, the Eastern Theatre of the Sri Lanka Army, the Dilmah
Conservation Heritage Centre and a number of facilities for visitors had been completed. The programme to support
community development in Thoppigala is continuing.
MJF CENTRE MORATUWA

The MJF Centre Moratuwa was established in 2011 to support Dilmah Founder Merrill J. Fernando’s vision of sharing the
success of his Dilmah brand with the less fortunate and the poor. During the year under consideration, the MJF Centre
Moratuwa continued to provide services for the betterment of children from marginalised communities, abused women
and children with disabilities.

MJF Kids Moratuwa

At the Centre, over 100 children from low income families in the area receive educational support, classes in puppetry,
cookery, exercises, sewing, art and craft classes and a fully functional woodwork unit where they learn to work together.
As MJF Kids, they receive medical screening and a chance to celebrate special days such as World Environment Day,
International Children’s Day and participate in outdoor excursions. Most importantly, as MJF Kids they are exposed to
a life of possibility and a chance to overcome the poverty they are born into, through education and character building.
Left: Art and craft as a method of therapy for MJF Kids at the MJF Centre Moratuwa. Centre: Drawing to his heart’s content – a young MJF Kid at the Moratuwa Centre.
Right: Youth attending the Curtiss Centre for Design located at the MJF Centre Moratuwa are privy to a life of possibility.
Rainbow Centre for Children with special needs
The Rainbow Centre which commenced operations in January 2012 to treat and care for children with Autism and Down
Syndrome, provides over 35 children with these disabilities the chance of a better life. Programmes include special
education, singing and dancing lessons, hand crafts, painting, sewing, carpentry as well as stretching and breathing
exercises, sign language classes and the opportunity to engage in home gardening at the Dilmah Conservation Sustainable
Agriculture Research Centre situated in the Foundation Centre premises.
The Foundation is working with Cerebral Palsy Lanka Foundation (CPLF) to provide much needed care and education for
children suffering from Cerebral Palsy. This programme commenced at the Rainbow Centre in 2012 catering to nearly 25
children with therapeutical, simulative and sensory integration mechanisms. The Foundation is currently expanding the
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entirely on sensory mechanisms for children with Cerebral Palsy.
Curtiss Centre for Design

Over 145 underprivileged youth have been empowered through vocational training at the Curtiss Centre, which provides
youth from marginaslied backgrounds a chance to receive free courses in graphic design and Microsoft Word. This group
includes several students with physical disabilities, who are now afforded a better future with the training received at the
Centre. During the year under consideration, over 75 youth from marginalised communities graduated from the Centre.
Carpentry facility
In March 2013, to coincide with World Down Syndrome Day, a fully functional carpentry facility was established at the
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in woodwork in the future to give them a mode of livelihood and to enable their integration into society with minimum
dependence on welfare.
Therapy through puppetry

A unique programme using puppetry as therapy, encouraging creativity and helping children overcome their various
disabilities. Puppetry lessons are some of the best attended classes at the MJF Centre Moratuwa.

Dilmah Conservation
Dilmah Conservation was initiated in 2007 by Dilmah to incorporate environmental conservation efforts into the work
of the MJF Charitable Foundation, which focuses on social justice. Dilmah Conservation works towards the sustainable
use of the environment in partnership with other resource partners including the International Union for Conservation of
Nature – IUCN. The pledge made by Dilmah founder Merrill J. Fernando to make business a matter of human service is
deeply ingrained in the work carried out by Dilmah Conservation.
Left: Eco friendly tea gardens are used to gauge water quality and insect diversity in Dilmah estates. Centre: Producing biochar as a fertiliser using tea waste. Right: A
bioregional initiative using connectivity conservation to conserve biodiversity in Dilmah tea estates.
Mainstreaming Sustainability
Eco-friendly tea gardens
Freshwater streams in selected Dilmah tea gardens are used to correlate basic water quality parameters with associated
land based human activities and insect diversity. The data will be collated into an index of aquatic insects applicable to this
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are published they should be applicable to any comparable location in Sri Lanka. The programme has been in operation
since 2011 and work on phase two commenced in February 2013. This is a joint effort between Dilmah Conservation and
the Department of Zoology, University of Colombo. The research is multidisciplinary and ranges from the laboratory scale
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Dilmah’s Bioregional Initiative

The proposed connectivity conservation action plan under Dilmah’s Bioregional Initiative was launched during the IUCN
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undertaken by a private sector tea company in Sri Lanka. Dilmah Conservation is currently working in Dilmah owned
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areas, will play a major role in Sri Lanka’s efforts to conserve its biodiversity. It is estimated that nearly 20 % of the estates
are under natural vegetation or plantation forestry. This translates into nearly 2500 hectares of forests with the potential
for conservation under the Bioregional Initiative. As a major tea estate holder in Sri Lanka, Dilmah’s Bioregional Initiative
is adding immense value to Dilmah tea. The objectives under the action plan include integrating Dilmah’s operations with
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carrying out an awareness campaign segmented and targeted to local, national and global audiences.
Converting tea waste into fertiliser

Agricultural waste is converted into biochar, a soil enhancer that can hold carbon, boost crop yield and decrease fertiliser
usage. Biochar can be an important tool to increase food security and cropland diversity in areas with severely depleted
soils, scarce organic resources, and inadequate water and chemical fertilizer supplies. Dilmah commenced applying biochar
in their Pelmadulla Estate at Kahawatte and Kataboola Estate at Nawalapitiya, chosen for their different agronomic and
climatic conditions. Following the success of the applications, Dilmah Conservation is now pursuing the development
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Peliyagoda and promote sustainable agriculture by producing organic fertiliser using waste generated at Peliyagoda. The
programme is conducted in partnership with the National Engineering Research and Development Centre of Sri Lanka
(NERDC).

Dilmah Conservation (Contd...)
Launch of the Business & Biodiversity Platform

The Sri Lanka Business & Biodiversity Platform was launched during the year under consideration in partnership with
the International Union for Conservation of Nature - IUCN and the Ceylon Chamber of Commerce. The Platform is a tool
to foster dialogue between the private sector and conservation agencies and to facilitate the integration of biodiversity
conservation within a business in order to achieve long term sustainability and minimise environmental damage caused
as a result of rapid development. Dilmah Conservation joined the Ceylon Chamber of Commerce and the IUCN to launch
the Platform and provide valuable services to Sri Lankan businesses that have invested in sustainable development and
conserving the natural resources of our country.
Terrestrial Habitat & Species Conservation

Udawalawe Wildlife Programme
The Terrestrial Habitat & Species Conservation Programme addresses salient issues related to wildlife conservation in
Sri Lanka and includes work in the Udawalawe National Park and adjacent communities. The initiative aims to make
Udawalawe into a model national park with facilities for a worthy experience. This includes support to the Elephant
Transit Home (ETH) established with the sole objective of rehabilitating orphaned elephant calves for ultimate release
back into the wild. The Elephant Information Centre geared to disseminate information to the public was upgraded during
Left: The Udawalawe Wildlife Programme is an initiative to conserve the Asian elephant. Centre: Upgrade the standards of the Udawalawe National Park. Right: Support
the wellbeing of adjacent communities through livelihood support.
the year under consideration with updated information panels. The solar array and ultraviolet sterilizer set up at the
ETH continues to be used extensively to boil water to prepare milk for the 30 baby elephants currently under care. On a
daily basis, the elephants are given 8 feeds of milk, made with baby formula which amounts to over 640 litres. With the
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Mankada – the MJF Centre for Empowerment through Traditional Sri Lankan Art & Craft
Mankada is a project designed to sustainably empower an isolated community in Udawalawe. Traditionally, a community
of brick-makers, they lost their traditional livelihood due to competition and remote location. The MJF Charitable
Foundation, with the support of a master potter, trained, equipped and mentored the community in its transformation
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a kind handmade terracotta kitchenware, replicas of animals, pendants, mugs, teapots, tea bag holders and a variety of
beautiful and original craft. The art is inspired by the Udawalawe National Park in the vicinity, home to many species
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Collection of celebrity chef Jamie Oliver.
Environmental Education and Awareness

Rebuilding Jaffna’s famed Field Research Station
In early 2012, Dilmah Conservation laid the foundation stone to rebuild Jaffna’s famed Thondaimannaru Field Research
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many young and aspiring scientists nurtured their knowledge of science. In February 2013, the newly constructed Field
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and the people of the Northern Province. This landmark event was part of the ‘Reconciliation through Power of Nature’
programme carried out by Dilmah Conservation in partnership with Professor Sarath Kotagama, the Field Ornithology
Group of Sri Lanka (FOGSL) and the Centre for Children’s Happiness, Jaffna (CCH) since the end of the war. With the
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Left7KHQHZO\EXLOW)LHOG5HVHDUFK6WDWLRQLQ7KRQGDLPDQQDUXLQ-DIIQDZLOORQFHDJDLQEHDEOHWRLQFXOFDWHVFLHQWLÀFWKLQNLQJLQWR-DIIQD·V\RXWKCentre: A newly
discovered frog species is part of Dilmah’s Novel Species Discovery programme. Right: Sustainable agriculture to encourage healthy lifestyles and eating habits.
Novel Species Discovery

Dilmah Conservation facilitates discovery of new amphibian species in the country
The discovery of eight new species of frogs from the famed Peak Wilderness Sanctuary (PWS) and one species from
the Gilimale Forest Reserve, a lowland rainforest, is a positive indicator of the diversity of amphibian life in Sri Lanka.
Frogs are an important indicator of ecosystems with biodiversity referring to the number of species in a given area, and
using it to gauge the health of an ecosystem. Dilmah Conservation facilitated this important research through its Novel
Species Discovery initiative. They belong to the Pseudophilautus genus, a genus found in Sri Lanka and nearby India and
the Polypedates genus. The survey covered the range of diverse herpetofauna found at different elevations of the Peak
Wilderness Sanctuary and the Gilimale Forest Reserve, a relatively small but important lowland rainforest in Sri Lanka’s
Ratnapura District.
Sustainable agriculture at the MJF Centre Moratuwa

The Dilmah Conservation Sustainable Agriculture Research Centre, which comprises of the DC farm and Research
Centre, was established at the MJF Centre Moratuwa to carry out research of high yield crops, to grow organic vegetables
and to provide a place where practical training and information could be provided on home gardening and sustainable
agricultural practices to school children and adults. The MJF Centre was established in 2011 by Dilmah Founder Merrill
J. Fernando to provide a better life for children from marginalised backgrounds and underprivileged adults living in and
around Moratuwa, one of the most populous cities in the Colombo District where a large number of people dwell in urban
slums. The DCSARC is Dilmah’s attempt to introduce healthy eating habits and sustainable lifestyles amongst urban
communities to create healthier generations in future.
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which includes several native endemic species. The Garden has been designed to provide a safe haven for these species,
whose natural life cycles are threatened by the loss of habitat and host plants in many environments around the country.
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Habitat enrichment in Thoppigala

Dilmah Conservation continued its habitat enrichment activities in Thoppigala in Sri Lanka’s Eastern Province during
the year under consideration. Working with the Sri Lanka Army Eastern Command, Dilmah Conservation established
the Dilmah Conservation Heritage Centre at the Thoppigala Heritage Park, where the environment of Sri Lanka and its
biodiversity is presented in 3D models. Conservation work in Thoppigala commenced with the planting of 20,000 native
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The Thoppigala Heritage Park also consists of the Thoppigala memorial, the Eastern Theatre of the Sri Lanka Army, a
visitor centre offering facilities for visitors, a souvenir shop and a campsite.
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enrichment and information dissemination in Thoppigala. Right: Conserving threatened marine habitats in Northern and Eastern Sri Lanka.
Marine Habitat & Species Conservation

Marine programme and dugong conservation
Dilmah Conservation worked during the year under consideration to protect fragile marine ecosystems and its diverse
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mapping and demarcation of the Kayankerni Reef as a marine sanctuary is one project while the other is a questionnaire
survey which was carried out in collaboration with IUCN Sri Lanka, UNEP, the Ministry of Environment and the
Department of Wildlife Conservation which will eventually lead to the core area occupied by the dugong in Sri Lankan
water being demarcated and declared a marine sanctuary.
The dugong (Dugong dugon) is the only representative of the order of mammals known as Sirenia in Sri Lanka. Although
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Pooneryn to gather valuable information on dugong habitats, their feeding patterns, local hunting practices etc. In the
ensuing months Dilmah Conservation will carry out a series of programmes to highlight the plight of this gentle creature
and establish a more accurate estimation of their numbers in the wild.
Culture and Indigenous Communities Programme

Documenting the lives of indigenous communities
A publication documenting the lives of the Veddahs of Sri Lanka titled ‘Indigenous Communities in Sri Lanka: The Veddahs’
was published during the year under consideration. The publication was based on the research carried out by Dilmah
Conservation through their Culture and Indigenous Communities programme which helps them preserve their unique
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the traditional lives that the Veddahs lead, sometimes forcing members of the younger generation to choose between their
old ways or to embrace modernity. The colourful lifestyles of the nomadic Ahikuntaka community was documented and
collated into a publication to be published this year. This includes information based on a comprehensive socio-economic
survey carried out by the Economics Department of the University of Colombo to ascertain their living standards. The
cultural centre built with assistance from Dilmah Conservation has been completed in Thambuttegama, in the North
Central Province.

Report of the Directors
For the Year Ended 31st March 2013
The Board of Directors of Ceylon Tea Services PLC have pleasure in presenting their 32nd Annual Report together with the
Audited Financial Statements of the Company for the year ended 31st March 2013, prepared in accordance with Section
152 of the Companies Act no 7 of 2007, the relevant Listing Rules of the Colombo Stock Exchange and recommended best
accounting practices.
Principal activities of the Group

The principal activity of the company is to manufacture, export and market tea bags and packets under the brand name
“Dilmah”. The principal activity of the Subsidiary Company is to manufacture, export and market tea in the form of liquid
tea concentrate and ready to drink tea.
Review of the year

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strategies and prospects are contained in the Chairman’s review (pages 3 to 4).
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Group results and appropriations

For the year ended 31st March 2013 2012
Rs.'000 Rs.'000
Revenue 7,084,157 5,839,922
3URÀWIRUWKH<HDU
Balance from previous year 6,852,293 6,215,373
Final dividend for last year (200,000) (450,000)
Interim dividend for the current year (600,000) (600,000)
Balance to be carried forward 7,483,180 6,852,293
3URSRVHGÀQDOGLYLGHQG 2,200,000 2,200,000
Dividends
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,Q'HFHPEHUDQG0DUFKWKH&RPSDQ\DIWHUKDYLQJFRQÀUPHGWKHVWDWXVRIVROYHQF\SDLGWZRLQWHULPGLYLGHQGV
of Rs.20/- and Rs. 10/- respectively per share. Therefore the total dividend for the year ended 31st March 2013 amounts to
5VSHUVKDUHFRPSDUHGWR5VSHUVKDUHSDLGIRUWKHODVWÀQDQFLDO\HDU
Corporate Donations
We continue with the Company philosophy that business is a matter of human service, which was explained in the last
couple of Annual General Meetings. For the current year, the Company made a donation of Rs. 150.0 million (2011/2012 Rs.
160.0 million) to the MJF Charitable Foundation. The activities of the Foundation are given on pages 10 to 17 of this Annual
Report. Other Donations by the Company during the year amounted to Rs. 1,812,668/- (2011/12 - Rs. 950,338/-).
Taxation
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IURPH[SRUWVRISURGXFWVZLWKPLQLPXPGRPHVWLFYDOXHDGGLWLRQRIVL[W\ÀYHSHUFHQWDQGZLWK6UL/DQNDQEUDQGQDPHLV
taxed at a concessionary rate of 10%.
Other income is liable to tax at 28%.
Employment
As at 31st March 2013, 693 persons were employed by the Group (31st March 2012 - 538)
Statutory Payments
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relation to employees have been made promptly on the due dates.
Compliance with Laws & Regulations

To the best of the knowledge and belief of the Directors, the Group has not engaged in any activities contravening the laws
& regulations of the country.
Property, Plant & Equipment

The expenditure incurred in the acquisition of Property, Plant & Equipment during the year under review was Rs. 508.0
million (2011/12 - Rs. 133 million). The details are shown in Note 6.1 of the Notes to the Accounts. The market value of
Property, Plant & Equipment is considered not materially different to the values stated.

Report of the Directors (Contd...)
Investments
Investments made by the company are detailed in Notes 7 and 9 of the Notes to the Accounts.
Stated Capital
The Stated Capital of the Company is Rs. 200,000,000/- divided into 20,000,000 Ordinary Shares. There was no change in the
Stated Capital during the year.
Shareholding
As at 31st March 2013, there were 807 (718 as at 31st March 2012) registered shareholders and their distribution is shown on
page 55.
The twenty major shareholders as at 31st March 2013 and the number of shares held and their percentage shareholding are
given on page 56.
Reserves
The total reserves as at 31st March 2013 stand at Rs. 7,709 million (2011/12 – Rs. 6,972 million) including the Available for
Sale Reserve of Rs. 226 million (2011/12 – Rs.120 million).
Going Concern
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resources to continue business operations. Accordingly the Directors consider that it is appropriate to adopt the going
FRQFHUQEDVLVLQSUHSDULQJWKHÀQDQFLDOVWDWHPHQWV
Events occurring after the Balance Sheet Date

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Statements.
Directorate
The Directors of the Group are listed on the rear cover page of the report.
Mr. Merrill J Fernando retires` in terms of Section 210 of the Companies Act No.7 of 2007. A resolution is proposed to re-
appoint Mr. Merrill J. Fernando in terms of Section 211 (1) of the said Companies Act No.7 of 2007.
Mr. Gritakumar E Chitty retires` in terms of Section 210 of the Companies Act No.7 of 2007. A resolution is proposed to re-
appoint Mr. Gritakumar E Chitty in terms of Section 211 (1) of the said Companies Act No.7 of 2007.
Mr. Rajanayagam Asirwatham retires` in terms of Section 210 of the Companies Act No.7 of 2007. A resolution is proposed
to re-appoint Mr. Rajanayagam Asirwatham in terms of Section 211 (1) of the said Companies Act No.7 of 2007.
Mr. Roshan Tissaaratchy retires by rotation in terms of section 24 of the Articles of Association of the Company and being
eligible offers himself for re-election at the Annual General Meeting.
Interests Register
The Group maintains an Interests Register in terms of the Companies Act, No. 7 of 2007. Relevant disclosures made by
the Directors on contracts and proposed contracts with the Group/Company appear under Note no 33 in Related Party
Disclosure to the Financial Statements on pages 50 to 52 of the Report. These interests have been declared at Directors’ meetings.
Directors’ Emoluments
During the year under review, total remuneration of the Executive Directors amounted to Rs. 84,693,653/- and Non Executive
Directors amounted to Rs. 1,200,000/- (2011/12 – Executive Directors Rs. 78,494,732/-, Non Executive Directors Rs. 1,200,000/-)

Report of the Directors (Contd...)
Directors’ Shareholding
The direct shareholdings of Directors together with that of their spouses & dependent children are as follows:
As at 31st March 2013 2012

Mr. Merrill J Fernando 200 200
Mr. Malik J Fernando 24,200 24,200
Mr. Dilhan C Fernando 24,200 24,200
Mr. Himendra S Ranaweera 20,084 20,084
Ms. Minette Perera 200 200
Mr. Roshan Tissaaratchy 4,000 4,000
Mr. Rajanayagam Asirwatham 4,800 4,800
Mr. Gritakumar E Chitty - -
The indirect shareholdings of Directors together with that of their spouses & dependent children are as follows:
As at 31st March 2013 2012

Mr. Merrill J Fernando, Mr. Malik J Fernando & Mr. Dilhan C Fernando
MJF Teas (Private) Limited 13,075,382 13,075,382
MJF Exports (Private) Limited 4,256,712 4,256,712
Merrill J Fernando & Sons (Private) Limited 25,300 25,300
Corporate Governance
The Directors are responsible for the formulation and implementation of overall business strategies, policies and setting
standards in the short, medium and long term basis adopting good governance in the management of the affairs of the
Company. A separate report on Corporate Governance Practices adopted by the Company is given on pages 7 to 8 of the report.
Group Auditors
Ernst & Young, Chartered Accountants, served as the Group Auditors during the year under review and the Auditors’
5HSRUWLVJLYHQRQSDJHRIWKHUHSRUW7KH$XGLWRUVKDYHFRQÀUPHGWKDWWKH\KDYHQRLQWHUHVWLQRUUHODWLRQVKLSZLWKWKH
&RPSDQ\RULW·V6XEVLGLDU\RWKHUWKDQWKDWRI$XGLWRUV7KH\FRQÀUPWKDWWKH\DUHLQGHSHQGHQWLQDFFRUGDQFHZLWKWKH&RGH
of Ethics of the Institute of Chartered Accountants of Sri Lanka.
The Audit Fees payable and fees for other services rendered are noted hereunder:-
)HHVSD\DEOHWR$XGLWRUVIRUWKHFXUUHQWÀQDQFLDO\HDU5V²5V
Fees payable for other services rendered Rs. 918,920/- (2011/12 – Rs. 1,176,530/-)
$XGLWRUV(UQVW <RXQJKDYHH[SUHVVHGWKHLUZLOOLQJQHVVWRFRQWLQXHLQRIÀFH$UHVROXWLRQWRUHDSSRLQWWKHPDV$XGLWRUV
DQGWRDXWKRUL]HWKH'LUHFWRUVWRÀ[WKHLUUHPXQHUDWLRQZLOOEHSURSRVHGDWWKH$QQXDO*HQHUDO0HHWLQJ
Annual General Meeting

The Annual General Meeting will be held at 4.00 p.m. on 31st July 2013 at No.111, Negombo Road, Peliyagoda. The Notice
of the Annual General Meeting appears on page 57.
For and on Behalf of the Board,
Sgd. Sgd. Sgd.

Mr. Himendra S. Ranaweera Mr. Malik J. Fernando Ms. Minette Perera
Deputy Chairman/CEO Director Secretary
13th June 2013

Statement of Directors’ Responsibilities in Relation to the Preparation
of Financial Statements
The following statement sets out the responsibility of Directors, in relation to the Financial Statements. This should be read
in conjunction with the Auditors responsibility in relation to the Financial Statements, set out in the report of the Auditors
on page 22 of this report.
The Companies Act No. 07 of 2007 requires the Directors to prepare Financial Statements for each year giving a true and fair
YLHZRIWKHVWDWHRIWKHDIIDLUVRIWKH&RPSDQ\DVDWHQGRIWKHÀQDQFLDO\HDUDQGWKHÀQDQFLDOSHUIRUPDQFHIRUWKH\HDU7KH
Directors are also responsible to ensure that proper accounting books and records are maintained, to prepare the Financial
Statements with reasonable accuracy.
The Board accepts the responsibility for the integrity and objectivity of the Financial Statements and the Directors are
responsible to ensure that in preparing the Financial Statements, appropriate accounting policies have been selected and
applied in a consistent manner and that material departures, if any, have been disclosed and explained.
It is the responsibility of the Directors to ensure that the Financial Statements have been prepared in conformity with LKAS/
SLFRS and that all assumptions and estimates, which have been used in the preparation of the Financial Statements, are
based on reasonable and prudent judgment taken with due care and consideration. The Directors are required to prepare
these Financial Statements on a going concern basis, unless it is inappropriate to presume that the Company will continue
as a going concern.
The Directors are required to take reasonable steps to safeguard the assets of the Company and to ensure the implementation
RIDSSURSULDWHDQGVXIÀFLHQWLQWHUQDOFRQWUROVWRSUHYHQWÀQDQFLDODQGRWKHULUUHJXODULWLHV
The Directors are of the opinion that the Financial Statements presented in the report from pages 23 to 53 have been prepared
in accordance with the above and that they discharged their duties as set out in this statement.
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undertake whatever inspections they considered necessary to enable them to form their opinion on the Financial Statements.
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contributions, levies and taxes payable on behalf of and in respect of the employees of the Company and all other known
statutory dues as were due and payable by the Company as at the Balance Sheet date have been paid, or where relevant
provided for.
By Order of the Board,

Minette Perera
Secretary
13th June 2013

Independent Auditors’ Report
to the Shareholders of Ceylon Tea Services PLC
Report on the Financial Statements
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VWDWHPHQWVRIWKH&RPSDQ\DQGLWVVXEVLGLDU\ZKLFKFRPSULVHWKHVWDWHPHQWRIÀQDQFLDOSRVLWLRQDVDW0DUFKDQG
WKHVWDWHPHQWRIFRPSUHKHQVLYHLQFRPHVWDWHPHQWRIFKDQJHVLQHTXLW\DQGVWDWHPHQWRIFDVKÁRZVIRUWKH\HDUWKHQHQGHG
DQGDVXPPDU\RIVLJQLÀFDQWDFFRXQWLQJSROLFLHVDQGRWKHUH[SODQDWRU\QRWHV
Management’s Responsibility for the Financial Statements

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Lanka Accounting Standards. This responsibility includes: designing, implementing and maintaining internal control
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GXH WR IUDXG RU HUURU VHOHFWLQJ DQG DSSO\LQJ DSSURSULDWH DFFRXQWLQJ SROLFLHV DQG PDNLQJ DFFRXQWLQJ HVWLPDWHV WKDW DUH
reasonable in the circumstances.
Scope of Audit and Basis of Opinion

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accordance with Sri Lanka Auditing Standards. Those standards require that we plan and perform the audit to obtain
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$QDXGLWLQFOXGHVH[DPLQLQJRQDWHVWEDVLVHYLGHQFHVXSSRUWLQJWKHDPRXQWVDQGGLVFORVXUHVLQWKHÀQDQFLDOVWDWHPHQWV
$QDXGLWDOVRLQFOXGHVDVVHVVLQJWKHDFFRXQWLQJSROLFLHVXVHGDQGVLJQLÀFDQWHVWLPDWHVPDGHE\PDQDJHPHQWDVZHOODV
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We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purposes of our audit. We therefore believe that our audit provides a reasonable basis for our opinion.
Opinion
In our opinion, so far as appears from our examination, the Company maintained proper accounting records for the year
HQGHG0DUFKDQGWKHÀQDQFLDOVWDWHPHQWVJLYHDWUXHDQGIDLUYLHZRIWKH&RPSDQ\·VÀQDQFLDOSRVLWLRQDVDW
0DUFKDQGLWVÀQDQFLDOSHUIRUPDQFHDQGFDVKÁRZVIRUWKH\HDUWKHQHQGHGLQDFFRUGDQFHZLWK6UL/DQND$FFRXQWLQJ
Standards.
,QRXURSLQLRQWKHFRQVROLGDWHGÀQDQFLDOVWDWHPHQWVJLYHDWUXHDQGIDLUYLHZRIWKHÀQDQFLDOSRVLWLRQDVDW0DUFK
DQGWKHÀQDQFLDOSHUIRUPDQFHDQGFDVKÁRZVIRUWKH\HDUWKHQHQGHGLQDFFRUGDQFHZLWK6UL/DQND$FFRXQWLQJ6WDQGDUGV
of the Company and its subsidiary dealt with thereby, so far as concerns the shareholders of the Company.
Report on Other Legal and Regulatory Requirements

7KHVHÀQDQFLDOVWDWHPHQWVDOVRFRPSO\ZLWKWKHUHTXLUHPHQWVRI6HFWLRQVDQGWRRIWKH&RPSDQLHV$FW
No. 07 of 2007.
Sgd.
Ernst & Young
Chartered Accountants
Colombo
13th June 2013

Statement of Financial Position
STATEMENT OF FINANCIAL POSITION As at 31st March 2013
As
As at
at 31
31 March
March 2013
2013
STATEMENT OF FINANCIAL POSITION
As at 31 March 2013
Group
Group Company
Company
Note
Note 2013
2013 2012
2012 1 April
1 April 2011
2011 2013
2013 2012
2012 1 April
1 April 2011
2011
ASSETS Rs. '000 Group
Rs. '000 Rs. '000 Rs. '000 Company
Rs. '000
'000 Rs. '000
ASSETS Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. Rs. '000
Non-Current
Non-Current Assets
Assets Note 2013 2012 1 April 2011 2013 2012 1 April 2011
ASSETS Plant
Property,
Property, Plant and
and Equipment
Equipment 66 Rs. '000
1,521,026
1,521,026 Rs. '000
1,187,395
1,187,395 Rs. '000
1,182,716
1,182,716 Rs. '000
1,359,256
1,359,256 Rs. '000
1,009,458
1,009,458 Rs. '000
984,859
984,859
Non-Current
Investment Assets
Property
Investment Property 77 234,064
234,064 234,064
234,064 -- 234,064
234,064 234,064
234,064 --
Property, Plant
Intangible
Intangible and Equipment
Assets
Assets 886 1,521,026
3,075
3,075 1,187,395
3,925
3,925 1,182,716
3,525
3,525 1,359,256
3,050
3,050 1,009,458
3,872
3,872 984,859
3,212
3,212
Investment
Investment Property
in Subsidiary
in Subsidiary 799 234,064
-- 234,064-- -- 234,064
148,227
148,227 234,064
148,227
148,227 179,901
179,901-
Intangible
Other AssetsAssets
Other Financial
Financial Assets 10
10 8 3,075
465,757
465,757 3,925
359,742
359,742 3,525
525,388
525,388 3,050
465,757
465,757 3,872
359,742
359,742 3,212
525,388
525,388
Investment in Subsidiary 9 2,223,922
2,223,922- 1,785,126
1,785,126 - 1,711,629
1,711,629 - 148,227
2,210,354
2,210,354 148,227
1,755,363
1,755,363 179,901
1,693,360
1,693,360
Other Financial
Current
Current Assets Assets
Assets 10 465,757 359,742 525,388 465,757 359,742 525,388
Inventories
Inventories 11
11 2,223,922
1,018,515
1,018,515 1,785,126
905,076
905,076 1,711,629
996,386
996,386 2,210,354
1,015,783
1,015,783 1,755,363
903,237
903,237 1,693,360
993,974
993,974
Current
Trade
Trade andAssets
and Other
Other Receivables
Receivables 12
12 2,690,067
2,690,067 2,580,610
2,580,610 2,075,332
2,075,332 2,681,653
2,681,653 2,575,532
2,575,532 2,070,054
2,070,054
Inventories
Advances
Advances & Prepayments
& Prepayments 11
13
13 1,018,515
160,309
160,309 905,076
318,161
318,161 996,386
305,738
305,738 1,015,783
159,094
159,094 903,237
317,161
317,161 993,974
304,803
304,803
Trade and
Income
Income TaxOther
Tax Receivables
Recoverable
Recoverable 12 2,690,067
1,424
1,424 2,580,610
-- 2,075,332
-- 2,681,653
1,424
1,424 2,575,532
-- 2,070,054
--
AdvancesDue
Amounts
Amounts & Prepayments
Due from Related
from Related Party
Party 13
14
14 160,309
-- 318,161
-- 305,738
-- 159,094
27,379
27,379 317,161
-- 304,803
26,545
26,545
Income
Cash andTax
Cash and Recoverable
Cash
Cash Equivalents
Equivalents 21
21 1,424
2,658,661
2,658,661 -
2,452,300
2,452,300 -
2,334,111
2,334,111 1,424
2,646,807
2,646,807 -
2,449,616
2,449,616 -
2,331,828
2,331,828
Amounts Due from Related Party 14 -
6,528,976
6,528,976 6,256,147
6,256,147- 5,711,567
5,711,567- 27,379
6,532,140
6,532,140 6,245,546
6,245,546- 26,545
5,727,204
5,727,204
Totaland
Cash
Total Cash Equivalents
Assets
Assets 21 2,658,661
8,752,898
8,752,898 2,452,300
8,041,273
8,041,273 2,334,111
7,423,196
7,423,196 2,646,807
8,742,494
8,742,494 2,449,616
8,000,909
8,000,909 2,331,828
7,420,564
7,420,564
6,528,976 6,256,147 5,711,567 6,532,140 6,245,546 5,727,204
Total Assets
EQUITY
EQUITY AND
AND LIABILITIES
LIABILITIES 8,752,898 8,041,273 7,423,196 8,742,494 8,000,909 7,420,564
Capital
Capital and
and Reserves
Reserves
EQUITY
Stated AND LIABILITIES
Stated Capital
Capital 15
15 200,000
200,000 200,000
200,000 200,000
200,000 200,000
200,000 200,000
200,000 200,000
200,000
Available forReserves
Capital
Availableand
for Sale
Sale Reserve
Reserve 16
16 226,091
226,091 120,077
120,077 283,418
283,418 226,091
226,091 120,077
120,077 283,418
283,418
Stated Capital
Retained Earnings
Retained Earnings 15 200,000
7,483,180
7,483,180 200,000
6,852,293
6,852,293 200,000
6,215,373
6,215,373 200,000
7,476,378
7,476,378 200,000
6,813,203
6,813,203 200,000
6,214,624
6,214,624
Available
Total
Total for Sale Reserve
Equity
Equity 16 226,091
7,909,271
7,909,271 120,077
7,172,370
7,172,370 283,418
6,698,791
6,698,791 226,091
7,902,469
7,902,469 120,077
7,133,280
7,133,280 283,418
6,698,042
6,698,042
Retained Earnings 7,483,180 6,852,293 6,215,373 7,476,378 6,813,203 6,214,624
Total Equity Liabilities
Non-Current
Non-Current Liabilities 7,909,271 7,172,370 6,698,791 7,902,469 7,133,280 6,698,042
Deferred Tax
Deferred Tax Liabilities
Liabilities 17
17 54,466
54,466 39,429
39,429 37,593
37,593 54,466
54,466 39,429
39,429 37,593
37,593
Non-Current
Other
Other DeferredLiabilities
Deferred Liabilities
Liabilities 18
18 87,934
87,934 75,715
75,715 63,583
63,583 86,326
86,326 74,503
74,503 62,688
62,688
Deferred
Interest Tax Liabilities
Interest Bearing Loans
Bearing Loans and
and Borrowings
Borrowings 17
19
19 54,466
617
617 39,429
2,312
2,312 37,593
6,481
6,481 54,466
617
617 39,429
2,312
2,312 37,593
6,481
6,481
Other Deferred Liabilities 18 87,934
143,017
143,017 75,715
117,456
117,456 63,583
107,657
107,657 86,326
141,409
141,409 74,503
116,244
116,244 62,688
106,762
106,762
Interest
CurrentBearing
Current Loans and Borrowings
Liabilities
Liabilities 19 617 2,312 6,481 617 2,312 6,481
Trade and
Trade and Other
Other Payables
Payables 20
20 143,017
698,915
698,915 117,456
574,626
574,626 107,657
576,134
576,134 141,409
696,921
696,921 116,244
574,564
574,564 106,762
575,146
575,146
CurrentBearing
Interest
Interest Liabilities
Bearing Loans and
Loans and Borrowings
Borrowings 19
19 1,695
1,695 4,061
4,061 3,901
3,901 1,695
1,695 4,061
4,061 3,901
3,901
Trade
Incomeand
Income Tax
TaxOther Payables
Liabilities
Liabilities 20 698,915
-- 574,626
172,760
172,760 576,134
36,713
36,713 696,921
-- 574,564
172,760
172,760 575,146
36,713
36,713
Interest Bearing Loans and Borrowings 19 1,695
700,610
700,610 4,061
751,447
751,447 3,901
616,748
616,748 1,695
698,616
698,616 4,061
751,385
751,385 3,901
615,760
615,760
IncomeEquity
Total
Total Tax Liabilities
Equity and
and Liabilities
Liabilities -
8,752,898
8,752,898 172,760
8,041,273
8,041,273 36,713
7,423,196
7,423,196 -
8,742,494
8,742,494 172,760
8,000,909
8,000,909 36,713
7,420,564
7,420,564
700,610 751,447 616,748 698,616 751,385 615,760
Total Equity
These
These financialand
financial Liabilities
statements
statements are
are in
in compliance
compliance with
with the 8,752,898
the requirements
requirements of the 8,041,273
of the Companies 7,423,196
Companies Act
Act No.
No. 07
07 of 8,742,494
of 2007.
2007. 8,000,909 7,420,564
These financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.
Sgd.
Sgd.
Shiron
Shiron Gooneratne
Gooneratne
Sgd. Financial
Chief
Chief Financial Officer
Officer
Shiron Gooneratne
Chief
The Financial
The Board
Board of Officer is
of Directors
Directors is responsible
responsible for
for the
the preparation
preparation and
and presentation
presentation of
of these
these financial
financial statements.
statements.
Signed for
Signed for and
and on
on behalf
behalf of
of the
the Board
Board by,
by,
The Board of Directors is responsible for the preparation and presentation of these financial statements.
Signed
Sgd. for and on behalf of the Board by,
Sgd. Sgd.
Sgd.
Himendra S Ranaweera
Himendra S Ranaweera Minette
Minette Perera
Perera
Sgd.
Deputy Chairman/ Chief Executive Officer
Deputy Chairman/ Chief Executive Officer Sgd.
Director
Director
Himendra S Ranaweera Minette Perera
Deputy
The
The Chairman/
accounting
accounting Chiefand
policies
policies Executive
and notes onOfficer
notes on pages 27
pages 27 through
through 53
53 form
form an
an integral
integral part
part of
of these
these financial Director
statements.
The accounting policies and notes on pages 27 through 53 form an integral part of these financial statements.
Colombo
Colombo
13th
13th June
June 2013
2013 -2-
-2-
Colombo Ceylon Tea Services PLC / Annual Report 2012/2013 23
13th June 2013
-2-
Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE
Year ended 31st March 2013 INCOME
Year ended 31 March 2013
Group Company
Note 2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Revenue 22 7,084,157 5,839,922 7,076,291 5,835,114
Cost of Sales (4,000,362) (3,241,859) (3,957,588) (3,208,953)
Gross Profit 3,083,795 2,598,063 3,118,703 2,626,161
Other Income and Gains 23 27,942 9,946 19,864 8,662
Administrative Expenses (686,800) (582,333) (681,307) (647,293)
Selling and Distribution Costs (1,162,669) (973,894) (1,162,522) (973,575)
Foreign Exchange Gain 166,765 767,372 166,765 766,857
Finance Cost 24.1 (676) (1,482) (674) (1,481)
Finance Income 24.2 197,425 104,092 197,241 104,092
Profit Before Tax 25 1,625,782 1,921,764 1,658,070 1,883,423
Income Tax Expense 26 (194,895) (234,844) (194,895) (234,844)
Profit for the Year 1,430,887 1,686,920 1,463,175 1,648,579
Other Comprehensive Income, Net of Tax

Net Gain/(Loss) on Available-for-Sale Financial Assets 16 106,014 (163,341) 106,014 (163,341)
Total Comprehensive Income, Net of Tax 1,536,901 1,523,579 1,569,189 1,485,238
Basic Earnings Per Share 27 71.54 84.35
Dividend Per Share 28 40.00 40.00

-3-
Statement of Changes in Equity
STATEMENT OF CHANGES IN EQUITY Year ended 31st March 2013
Group Note Stated Available for Retained Total

Capital Sale Reserve Earnings
Rs. '000 Rs. '000 Rs. '000 Rs. '000
As at 01 April 2011 200,000 283,418 6,215,373 6,698,791
Profit for the Year - - 1,686,920 1,686,920
Other Comprehensive Income, Net of Tax - (163,341) - (163,341)
Final Dividend - 2011 28 - - (450,000) (450,000)
Interim Dividend - 2012 28 - - (600,000) (600,000)
As at 31 March 2012 200,000 120,077 6,852,293 7,172,370
Other Comprehensive Income, Net of Tax - 106,014 - 106,014
Final Dividend - 2012 28 - - (200,000) (200,000)
As at 31 March 2013 200,000 226,091 7,483,180 7,909,271
Company Note Stated Available for Retained Total

Capital Sale Reserve Earnings
Rs. '000 Rs. '000 Rs. '000 Rs. '000
As at 01 April 2011 200,000 283,418 6,214,624 6,698,042
Other Comprehensive Income, Net of Tax - (163,341) - (163,341)
Final Dividend - 2011 28 - - (450,000) (450,000)
As at 31 March 2012 200,000 120,077 6,813,203 7,133,280
Other Comprehensive Income, Net of Tax - 106,014 - 106,014
Final Dividend - 2012 28 - - (200,000) (200,000)
200,000 226,091 7,476,378 7,902,469

-4-
Statement of Cash Flows
STATEMENT OF CASH
Year ended 31st March 2013 FLOWS
Group Company
Note 2013 2012 2013 2012
Cash Flows From / (Used in) Operating Activities Rs. '000 Rs. '000 Rs. '000 Rs. '000
Profit before Income Tax Expense 1,625,782 1,921,764 1,658,070 1,883,423
Adjustments for
Depreciation and Amortisation 165,152 129,900 144,409 109,601
Foreign Exchange Gain (166,765) (392,239) (166,765) (392,126)
Interest Expenses 24.1 676 1,482 674 1,481
Dividend Income 23 (5,771) (104) (5,771) (104)
Interest Income 24.2 (197,425) (104,092) (197,241) (104,092)
Profit on disposal of Property, Plant and Equipment 23 (5,108) (5,984) (3,729) (4,702)
Profit on disposal of Long Term Investments 23 - (3,026) - (3,026)
Provision for Doubtful Debts 25 65 - 65 38,342
Provision for fall in value of Investments 25 - - - 31,674
Provision for Defined Benefit Plans 18 17,351 15,212 16,522 14,769
Operating Profit before Working Capital Changes 1,433,957 1,562,914 1,446,234 1,575,240
(Increase)/ Decrease in Inventories (113,438) 91,310 (112,546) 90,737

Increase in Trade and Other Receivables (36,928) (234,235) (33,376) (234,379)
Increase in Amounts Due from Related Party - - (27,379) (11,797)
Increase/ (Decrease) in Trade and Other Payables 125,213 (11,156) 123,281 (10,230)
Cash Generated from Operations 1,408,804 1,408,833 1,396,214 1,409,571
Defined Benefit Plan Costs Paid 18 (9,000) (3,079) (8,565) (2,954)

Cash inflow on transfer of gratuity liability from affiliate 18 3,866 - 3,866 -
Interest Paid 24 (676) (1,482) (674) (1,481)
Income Tax Paid (297,879) (93,294) (297,879) (93,294)
Net Cash Flows From Operating Activities 1,105,115 1,310,978 1,092,962 1,311,842
Cash Flows From / (Used in) Investing Activities

Acquisition of Property, Plant and Equipment 6 (497,318) (132,943) (492,318) (132,314)
Acquisition of Investment Property 7 - (234,064) - (234,064)
Acquisition of Intangible Assets 8 (1,735) (3,359) (1,735) (3,359)
Proceeds from disposal of Other Investments - 5,331 - 5,331
Proceeds from disposal of Property, Plant and Equipment 3,711 7,307 1,879 5,515
Dividend Received 23 5,771 104 5,771 104
Interest Received 183,762 96,879 183,577 96,878
Net Cash Flows Used in Investing Activities (305,809) (260,745) (302,826) (261,909)
Cash Flows Used in Financing Activities

Dividend Paid 28 (800,000) (1,050,000) (800,000) (1,050,000)
Principal Payment under Finance Lease Liabilities 19.1 (4,061) (4,009) (4,061) (4,009)
Net Cash Flows Used in Financing Activities (804,061) (1,054,009) (804,061) (1,054,009)
Effect of Exchange Rate Changes on Cash and Cash Equivalents 211,116 121,965 211,116 121,864
Net Increase in Cash and Cash Equivalents 206,361 118,189 197,191 117,788
Cash and Cash Equivalents at the beginning of the year 21 2,452,300 2,334,111 2,449,616 2,331,828
Cash and Cash Equivalents at the end of the year 21 2,658,661 2,452,300 2,646,807 2,449,616

-5-
Notes to the Financial Statements
Year ended 31st March 2013
1. CORPORATE INFORMATION
1.1 General
Ceylon Tea Services PLC is a public limited liability Company incorporated and domiciled in Sri Lanka and listed
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at No. 111, Negombo Road, Peliyagoda.
1.2 Principal Activities and Nature of Operations

Company
The principal activities of the Company are to manufacture, export and market tea bags and packets under the brand name “Dilmah”.
Subsidiary – MJF Beverages (Pvt) Ltd

The principal activities of the subsidiary Company are to manufacture, export, and market tea in the form of liquid
tea concentrate and ready to drink tea.
1.3 Parent Enterprise and Ultimate Parent Enterprise

The Company’s parent undertaking is MJF Teas (Pvt) Ltd. In the opinion of the Directors, the Company’s ultimate
parent undertaking and controlling party is MJF Holdings Limited, which is incorporated in Sri Lanka.
1.4 Date of Authorization for Issue

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authorized for issue in accordance with a resolution of the Board of Directors on 13th June 2013.
2. GENERAL ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION

2.1.1 Statement of Compliance
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ÀQDQFLDO VWDWHPHQWV RI WKH &RPSDQ\ DQG LWV 6XEVLGLDU\ KDYH EHHQ SUHSDUHG LQ DFFRUGDQFH ZLWK WKH 6UL /DQND
Accounting and Auditing Standards Act No. 15 of 1995, which requires compliance with Sri Lanka Accounting
Standards (SLFRS’s and LKAS’s) promulgated by the Institute of Chartered Accountants of Sri Lanka (ICASL), and
with the requirements of the Companies Act No. 7 of 2007.
For all periods up to and including the year ended 31st March 2012, the Group prepared its Financial Statements
in accordance with the previous Sri Lanka Accounting Standards (SLAS). These Financial Statements for the year
HQGHG0DUFKDUHWKHÀUVWWKH*URXSKDVSUHSDUHGLQDFFRUGDQFHZLWK6UL/DQND$FFRXQWLQJ6WDQGDUGVDV
applicable for periods beginning on or after 1 January 2012 (SLFRS/LKAS). Refer to Note 5 for information on how
the Group adopted SLFRS and LKAS.
2.1.2 Basis of Measurement

The Financial Statements have been prepared on the historical cost basis, except for Available-for-Sale Financial
Assets which are measured at fair value.
2.1.3 Functional and Presentation Currency

The Financial Statements are presented in Sri Lankan Rupees, which is also the Group’s functional currency.
2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

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assumptions that effect the reported amounts of assets, liabilities, income and expense and the disclosure of
contingent liabilities at the reporting date. The key judgments, estimates and associated assumptions are assessed
on an ongoing basis and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
The following key judgments, estimates and assumptions addresses amongst others that require subjective and
complex judgment.
a) Judgment
Inventories
The Group reviews the existence and usability of inventories based on a perpetual inventory count. An impairment
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Notes to the Financial Statements (Contd...)
Allowance for Doubtful Debts

The Group reviews at each reporting date all receivables to assess whether an allowance should be recorded in
the statement of comprehensive income for irrecoverable receivables. Management uses judgment in estimating
such allowance considering the duration of outstanding and any other factors management is aware of that
indicates uncertainty in recoverability.
b) Estimates
Depreciation of Property, Plant and Equipment
Management assigns useful lives to property, plant and equipment based on the intended use of assets and
the economic lives of these assets. Subsequent changes in circumstances such as technological advances or
utilization of the assets concerned could result in the actual useful lives or residual values differing from initial
estimates. Management reviews annually the residual values and useful lives of major items of property, plant
and equipment.
c) Assumptions
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valuation is based on assumptions concerning the rate of interest, rate of salary increase, special premium,
retirement age and going concern of the Group. Due to the long term nature of the plan, such estimates are
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2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.3.1 Basis of Consolidation
The Consolidated Financial Statements (referred to as “Group”) comprise the Financial Statements of the Company
and its subsidiary.
(a) Subsidiary
Subsidiaries are those entities controlled by the Group. Control exists when the Group has the power to govern
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the Group controls the composition of the Board of Directors of the entity or holds more than 50% of the issued
shares of the entity or 50% of the voting rights of the entity or entitled to receive more than half of every dividend
IURPVKDUHVFDUU\LQJXQOLPLWHGULJKWWRSDUWLFLSDWHLQGLVWULEXWLRQRISURÀWVRUFDSLWDO
7KHFRQVROLGDWHGÀQDQFLDOVWDWHPHQWVRI&H\ORQ7HD6HUYLFHV3/&DQGLWVVXEVLGLDU\DUHSUHSDUHGDVDW0DUFK
HDFK \HDU 7KH ÀQDQFLDO VWDWHPHQWV RI WKH VXEVLGLDU\ DUH SUHSDUHG IRU WKH VDPH UHSRUWLQJ \HDU DV WKH SDUHQW
Company using consistent accounting policies.
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transactions are eliminated in full.
The subsidiary is consolidated from the date the Parent obtains control until such time as control ceases.
(b) Country of Incorporation

The subsidiary is incorporated in Sri Lanka.
2.3.2 Foreign Currency Translations

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presentation currency. Transactions in foreign currencies are initially recorded at the functional currency rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at
the functional currency rate of exchange ruling at the reporting date. All differences are taken to the Statement of
Comprehensive Income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined.

2.3.3 Taxation
a) Current Taxes
Company
Current income 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 by the reporting date.
According to Section 59A of the Inland Revenue (Amendment) Act No. 22 of 2011, commencing on or after April
SURÀWVIURPH[SRUWRISURGXFWVKDYLQJGRPHVWLFYDOXHDGGLWLRQLQH[FHVVRIVL[W\ÀYHSHUFHQWXPDQG6UL
Lankan brand name with patent rights reserved in Sri Lanka are taxed at a concessionary rate of 10%.
7KHSURYLVLRQIRULQFRPHWD[LVEDVHGRQWKHHOHPHQWVRILQFRPHDQGH[SHQGLWXUHDVUHSRUWHGLQWKHÀQDQFLDO
statements and computed in accordance with the provisions of the Inland Revenue Act.
Subsidiary
MJF Beverages (Pvt) Ltd has entered into an agreement registered under the terms of section 17 (2) of the Board
RI,QYHVWPHQW/DZ1RRIZLWKWKH%RDUGRI,QYHVWPHQW6UL/DQNDXQGHUZKLFKWKHVXEVLGLDU\·VSURÀWDQG
income are exempted from Income Tax for a period of 5 years from the year in which the subsidiary commences
WRPDNHSURÀWVRUDQ\\HDURIDVVHVVPHQWQRWODWHUWKDQ\HDUVUHFNRQHGIURPWKHGDWHRIFRPPHQFHPHQWRI
commercial operations or production whichever is earlier.
b) Deferred Taxation
Deferred income tax is provided, using the liability method, on all temporary differences at the reporting date
EHWZHHQWKHWD[EDVHVRIDVVHWVDQGOLDELOLWLHVDQGWKHLUFDUU\LQJDPRXQWVIRUÀQDQFLDOUHSRUWLQJSXUSRVHV
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
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the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
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income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
2.3.4 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
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EHHQDVVHVVHGWRKDYHÀQLWHXVHIXOOLYHV
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there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation
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&KDQJHVLQWKHH[SHFWHGXVHIXOOLIHRUWKHH[SHFWHGSDWWHUQRIFRQVXPSWLRQRIIXWXUHHFRQRPLFEHQHÀWVHPERGLHG
in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as
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statement of comprehensive income in the expense category consistent with the function of the intangible assets.
2.3.5 Inventories
Inventories are valued at the lower of cost and net realisable value, after making due allowances for obsolete and
slow moving items. Net realisable value is the price at which inventories can be sold in the ordinary course of
business less the estimated cost of completion and the estimated cost necessary to make the sale.
The cost incurred in bringing inventories to its present location and conditions are accounted using the following
cost formulae:-

Raw Materials
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Manufactured Tea Stock At actual cost on weighted average basis
Packing Material At actual cost on weighted average basis
Finished Goods and WIP At the cost of direct materials, including appropriate production over heads.
Consumables and Spares At actual cost on weighted average basis
Goods in Transit At actual cost
2.3.6 Cash and Cash Equivalents

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UHDGLO\FRQYHUWLEOHWRNQRZQDPRXQWVRIFDVKDQGVXEMHFWWRLQVLJQLÀFDQWULVNRIFKDQJHVLQYDOXH
)RUWKHSXUSRVHRIFDVKÁRZVWDWHPHQWFDVKDQGFDVKHTXLYDOHQWVFRQVLVWRIFDVKLQKDQGDQGGHSRVLWVLQEDQNV
net of outstanding bank overdrafts. Investments with short maturities i.e. three months or less from the date of
acquisition are alo treated as cash equivalents.
2.3.7 Property, Plant and Equipment

a) Owned Assets
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. The cost of property, plant and equipment includes expenditure that are directly attributable
to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour,
any other costs directly attributable to bringing the asset to a working condition for its intended use, and the
costs of dismantling and removing the items and restoring the site on which they are located. Purchased software
that is integral to the functionality of the related equipment is capitalised as a part of that equipment. When parts
of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
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adjusted prospectively, if appropriate.
b) Restoration Costs
Expenditure incurred on repairs or maintenance of Property, Plant and Equipment in order to restore or maintain
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expense when incurred.
c) Depreciation
The provision for depreciation is calculated by using a straight line method on the cost of all Property, Plant
and Equipment other than leasehold land, in order to write off such amounts over the estimated useful lives as
follows:
Buildings Over 40 years

Plant and Machinery Over 10 to 25 years
Furniture and Fittings Over 6.67 years
2IÀFHDQG6WRUHV(TXLSPHQW 2YHU\HDUV
Computer Hardware Over 3 years
Motor Vehicles Over 5 years
d) Derecognition
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are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement
of Comprehensive Income in the year the asset is derecognised.
2.3.8 Leases
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leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the
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reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
)LQDQFHFKDUJHVDUHFKDUJHGUHÁHFWHGLQWKHVWDWHPHQWRIFRPSUHKHQVLYHLQFRPH

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease
term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. The
depreciation policy for depreciable leased assets is consistent with that for depreciable asset that are owned as
described in Note 2.3.6.
2.3.9 Investment Property

Investment property is property held either to earn rental income or for capital appreciation or both, but not for
sale in the ordinary course of business, use in the production or supply of goods or services or for administrative
purposes. Investment property is measured at its cost less accumulated depreciation and accumulated impairment
losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the investment property.
The cost of self- constructed investment property includes the cost of materials and direct labour, any other
costs directly attributable to bringing the investment property to a working condition for their intended use and
capitalised borrowing costs.
Investment properties are derecognised when either they have been disposed of or when the investment property
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between the net disposal proceeds and the carrying amount of the asset is recognised in the Statement of
Comprehensive Income in the period of derecognition.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment
property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of
change in use. If owner-occupied property becomes an investment property, the Group accounts for such property
in accordance with the policy stated under property, plant and equipment up to the date of change in use.
2.3.10 Impairment of Non Financial Assets

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there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
2.3.10.1 Recoverable Amount

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less
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SUHWD[GLVFRXQWUDWHWKDWUHÁHFWVFXUUHQWPDUNHWDVVHVVPHQWVRIWKHWLPHYDOXHRIPRQH\DQGWKHULVNVVSHFLÀFWR
WKHDVVHW$FDVKJHQHUDWLQJXQLWLVWKHVPDOOHVWLGHQWLÀDEOHDVVHWJURXSWKDWJHQHUDWHVFDVKÁRZVWKDWDUHODUJHO\
independent from other assets and groups.
2.3.10.2 Impairment/ Reversal of Impairment

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
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then to reduce the carrying amount of the other assets in the unit on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation,
if no impairment loss had been recognised.
2.3.11 Financial Instruments – Initial Recognition and Subsequent Measurement

2.3.11.1 Financial Assets
Initial Recognition and Measurement
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assets at initial recognition.
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convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.

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assets.
Subsequent Measurement
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derivatives designated as hedging instruments in an effective hedge.
Available-for-Sale Financial Investments

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unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the
investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or
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Loans and Receivables

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using the effective interest rate method (EIR) , less impairment. 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
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recognised in the statement of comprehensive income.
Derecognition
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derecognised when:
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and either
a) the Group has transferred substantially all the risks and rewards of the asset, or
b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
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arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of
the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. In that case, the
Group also recognises an associated liability. The transferred asset and the associated liability are measured on a
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Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required
to repay.
Impairment of Financial Assets

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if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial
recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash
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reorganisation and when observable data indicate that there is a measurable decrease in the estimated future cash
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Financial Assets Carried at Amortised Cost

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credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective
assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the
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rate for measuring any impairment loss is the current EIR.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is
recognised in the statement of comprehensive income.
Available-for-Sale Financial Assets

The Group assesses at each reporting date whether there is objective evidence that an investment or a group of
investments is impaired.
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cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost.
When there is evidence of impairment, the cumulative loss – measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that investment previously recognised in the available
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are recognised directly in other comprehensive income.
2.3.11.2 Financial Liabilities

Initial Recognition and Measurement
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or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as
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attributable transaction costs.
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Subsequent Measurement
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hedging instruments in an effective hedge.
Loans and Borrowings

After initial recognition, loans and borrowings are subsequently measured at amortised cost using the EIR method.
Gains and losses are recognised in the statement of comprehensive income when the liabilities are derecognised as
well as through the EIR amortisation process.
Derecognition
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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 comprehensive income.
2.3.11.3 Fair Value of Financial Instruments

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reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short
positions), without any deduction for transaction costs.

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techniques.
2.3.12 Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past
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obligation and a reliable estimate can be made of the amount of the obligation.
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plan with the advice of an independent professional actuary.
The key assumptions used by the Actuary, include the following:
2013 2012
Discount Rate 10% 10%

Future Salary Increase 10% 10%
Withdrawal Rate 17.5% 23%
Retirement Age 55 Years 55 Years
The gratuity liability is not externally funded. This item is grouped under “Other Deferred Liabilities” in the
Statement of Financial Position.
However, as per the payment of Gratuity Act No. 12 of 1983 this liability only arises upon completion of 5 years
of continued service.
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Employees are eligible for Employees' Provident Fund Contributions and Employees' Trust Fund Contributions
in line with the respective statutes and regulations. The Group contributes 12% and 3% of gross emoluments of
employees to Employees' Provident Fund and Employees' Trust Fund respectively.
2.3.14 Statement of Comprehensive Income

Revenue Recognition
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revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair
value of the consideration received or receivable net of trade discounts, value added taxes, and other sales taxes.
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a) Sale of Goods
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passed to the buyer, with the Group retaining neither continuing managerial involvement to the degree usually
associated with ownership, nor effective control over the goods sold.
b) Turnover Based Taxes

Turnover based taxes include Value Added Tax, Nation Building Tax and Economic Service Charge. The
Company and its subsidiary pay such taxes in accordance with the respective statutes.
c) Interest
Interest income is recognized as it accrues in the Statement of Comprehensive Income.
d) Dividend
Dividend income is recognised when the shareholders’ right to receive the payment is established (on net basis).
e) Others
Other income is recognised on an accrual basis.

Gains and losses arising from incidental activities to 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.
3. BUSINESS SEGMENT REPORTING

A business segment is distinguishable component of an enterprise that is engaged in providing an individual
product or service or a group of related products or services that is subject to risk and returns that are different from
those of other business segments. The accounting policies adopted for segment reporting are the same accounting
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An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. All operating segments’ operating results are reviewed regularly by the Chairman to make
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information is available.
Segment results that are reported to the Chairman include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis.
4. STANDARDS ISSUED BUT NOT YET EFFECTIVE

The following SLFRS have been issued by the Institute of Chartered Accountants of Sri Lanka that have an effective
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HIIHFWRQWKHDFFRXQWLQJSROLFLHVFXUUHQWO\DGRSWHGE\WKH*URXSDQGPD\KDYHDQLPSDFWRQWKHIXWXUHÀQDQFLDO
statements.
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on or after 01 January 2015.
SLFRS 13-Fair Value Measurement

SLFRS 13 establishes a single source of guidance under SLFRS for all fair value measurements. SLFRS 13 provides
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period beginning on or after 01 January 2013 and early application was allowed. However effective date has been
deferred subsequently.
However use of principles of measurement in these standards are recommended.
In addition to the above, following standards were also issued with an original effective date of 01 January 2013,
which were also deferred subsequently.
SLFRS 10-Consolidated Financial Statements
SLFRS 11-Joint Arrangements
SLFRS 12-Disclosure of Interests in Other Entities

NOTES TO31THE
Year ended st
FINANCIAL
March 2013 STATEMENTS
As at 31 March 2013
5. FIRST TIME ADOPTION OF SRI LANKA FINANCIAL REPORTING STANDARDS
These financial statements, for the year ended 31 March 2013, are the first the Group has prepared in accordance with SLFRS. For periods
up to and including the year ended 31 March 2012, the Group prepared its financial statements in accordance with the previous Sri Lanka
Accounting Standards (SLAS).
Accordingly, the Group has prepared financial statements which comply with SLFRS applicable for periods ending on or after 31 March
2013, together with the comparative period data as at and for the year ended 31 March 2012, as described in the accounting policies. In
preparing these financial statements, the *URXS¶V opening statement of financial position was prepared as at 1 April 2011, the *URXS¶V date
of transition to SLFRS.
Notes 5.1 to 5.4 explain the principal adjustments made by the Group in restating its SLAS statement of financial position as at 1 April 2011
and its previously published SLAS financial statements as at and for the year ended 31 March 2012.
5.1 Reconciliation of equity as at 1 April 2011 (Date of transition to SLFRS)
Group Company
SLAS Re- SLFRS SLAS Re- SLFRS
Notes 01.04.2011 measurement 01.04.2011 01.04.2011 measurement 01.04.2011
ASSETS Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Non-current Assets
Property, Plant and Equipment 5.4 (A) 888,957 293,759 1,182,716 691,100 293,759 984,859
Intangible Assets 3,525 - 3,525 3,212 - 3,212
Investment in Subsidiary - - - 179,901 - 179,901
Other Financial Assets 5.4 (C) 241,970 283,418 525,388 241,970 283,418 525,388
1,134,452 577,177 1,711,629 1,116,183 577,177 1,693,360
Current Assets
Inventories 996,386 - 996,386 993,974 - 993,974
Trade and Other Receivables 5.4 (D) 2,381,070 (305,738) 2,075,332 2,374,857 (304,803) 2,070,054
Advances and Prepayments 5.4 (D) - 305,738 305,738 - 304,803 304,803
Amounts Due from Related Party - - - 26,545 - 26,545
Cash and Cash Equivalents 2,334,111 - 2,334,111 2,331,828 - 2,331,828
5,711,567 - 5,711,567 5,727,204 - 5,727,204
Total Assets 6,846,019 577,177 7,423,196 6,843,387 577,177 7,420,564
EQUITY AND LIABILITIES

Capital and Reserves
Stated Capital 200,000 - 200,000 200,000 - 200,000
General Reserves 5.4 (F) 1,900,000 (1,900,000) - 1,900,000 (1,900,000) -
Available for Sale Reserve 5.4 (C) - 283,418 283,418 - 283,418 283,418
Retained Earnings 5.4 (A,B,F) 4,050,990 2,164,383 6,215,373 4,050,241 2,164,383 6,214,624
Total Equity 6,150,990 547,801 6,698,791 6,150,241 547,801 6,698,042
Non-current Liabilities
Deferred Tax Liabilities 5.4 (B) 8,217 29,376 37,593 8,217 29,376 37,593
Other Deferred Liabilities 63,583 - 63,583 62,688 - 62,688
Interest Bearing Loans and Borrowings 6,481 - 6,481 6,481 - 6,481
78,281 29,376 107,657 77,386 29,376 106,762
Current Liabilities
Trade and Other Payables 576,134 - 576,134 575,146 - 575,146
Income Tax Liabilities 36,713 - 36,713 36,713 - 36,713
616,748 - 616,748 615,760 - 615,760
Total Equity and Liabilities 6,846,019 577,177 7,423,196 6,843,387 577,177 7,420,564
-18-

NOTES TO THE FINANCIAL STATEMENTS Year ended 31st March 2013
As at 31 March 2013
5. FIRST TIME ADOPTION OF SRI LANKA FINANCIAL REPORTING STANDARDS (Contd.)
5.2 Reconciliation of equity as at 31 March 2012
Group Company
Notes 31.03.2012 measurement 31.03.2012 31.03.2012 measurement 31.03.2012
ASSETS Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Non-current Assets
Property, Plant and Equipment 5.4 (A,E) 1,109,611 77,784 1,187,395 931,674 77,784 1,009,458
Investment Property 5.4 (E) - 234,064 234,064 - 234,064 234,064
Intangible Assets 3,925 - 3,925 3,872 - 3,872
Investment in Subsidiary - - - 148,227 - 148,227
Other Financial Assets 5.4 (C) 239,665 120,077 359,742 239,665 120,077 359,742
1,353,201 431,925 1,785,126 1,323,438 431,925 1,755,363
Current Assets
Inventories 905,076 - 905,076 903,237 - 903,237
Trade and Other Receivables 5.4 (D) 2,898,771 (318,161) 2,580,610 2,892,693 (317,161) 2,575,532
Advances and Prepayments 5.4 (D) - 318,161 318,161 - 317,161 317,161
Amounts Due from Related Party - - - - - -
Cash and Cash Equivalents 2,452,300 - 2,452,300 2,449,616 - 2,449,616
6,256,147 - 6,256,147 6,245,546 - 6,245,546
Total Assets 7,609,348 431,925 8,041,273 7,568,984 431,925 8,000,909
EQUITY AND LIABILITIES

Capital and Reserves
Stated Capital 200,000 - 200,000 200,000 - 200,000
General Reserves 5.4 (F) 1,900,000 (1,900,000) - 1,900,000 (1,900,000) -
Available for Sale Reserve 5.4 (C) - 120,077 120,077 - 120,077 120,077
Retained Earnings 5.4 (A,B,F) 4,671,630 2,180,663 6,852,293 4,632,540 2,180,663 6,813,203
Total Equity 6,771,630 400,740 7,172,370 6,732,540 400,740 7,133,280
Non-current Liabilities
Deferred Tax Liabilities 5.4 (B) 8,244 31,185 39,429 8,244 31,185 39,429
Other Deferred Liabilities 75,715 - 75,715 74,503 - 74,503
86,271 31,185 117,456 85,059 31,185 116,244
Current Liabilities
Trade and Other Payables 574,626 - 574,626 574,564 - 574,564
Income Tax Liabilities 172,760 - 172,760 172,760 - 172,760
751,447 - 751,447 751,385 - 751,385
Total Equity and Liabilities 7,609,348 431,925 8,041,273 7,568,984 431,925 8,000,909
-19-Report 2012/2013
Ceylon Tea Services PLC / Annual 37
NOTES TO
Year ended 31stTHE FINANCIAL
5.3 Reconciliation of total comprehensive income for the year ended 31 March 2012
Group Company
Note
31.03.2012 measurement 31.03.2012 31.03.2012 measurement 31.03.2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Revenue 5,839,922 - 5,839,922 5,835,114 - 5,835,114
Cost of Sales 5.4 (A) (3,259,948) 18,089 (3,241,859) (3,227,042) 18,089 (3,208,953)
Gross Profit 2,579,974 18,089 2,598,063 2,608,072 18,089 2,626,161
Other Income and Gains 9,946 - 9,946 8,662 - 8,662
Administrative Expenses (582,333) - (582,333) (647,293) - (647,293)

Selling and Distribution
Selling and Distribution Cost (973,894) - (973,894) (973,575) - (973,575)
Foreign Exchange Gain 767,372 - 767,372 766,857 - 766,857
Finance Cost (1,482) - (1,482) (1,481) - (1,481)
Finance Income 104,092 - 104,092 104,092 - 104,092
Profit Before Tax 1,903,675 18,089 1,921,764 1,865,334 18,089 1,883,423
Income Tax Expense 5.4 (B) (233,035) (1,809) (234,844) (233,035) (1,809) (234,844)
Profit for the Year 1,670,640 16,280 1,686,920 1,632,299 16,280 1,648,579
Other Comprehensive
Income, Net of Tax
Net Gain/(Loss) on
Available-for-Sale Financial
Assets
5.4 (C) - (163,341) (163,341) - (163,341) (163,341)
Total Comprehensive
Income, Net of Tax 1,670,640 (147,061) 1,523,579 1,632,299 (147,061) 1,485,238
38 Ceylon Tea Services PLC / Annual

-20-Report 2012/2013
5.4 Notes to the reconciliation of equity as at 1 April 2011 and 31 March 2012 and total comprehensive income for the
year ended 31 March 2012
5.4 (A) As part of the Group's transition to SLFRS/LKAS, the Group evaluated the useful lives of assets recorded in the financial
statements in assessing whether the depreciation period was representative of the useful lives of the assets. Accordingly,
appropriate adjustments were carried out including the reinstatement of fully depreciated assets based on their estimated
remaining useful life resulting in the carrying amount of Plant and Machinery to increase in both the Group and Company
by Rs. 293,758,902/- as of the transition date. (2012 - Rs. 311,847,788/-). The corresponding adjustments have been made
in retained earnings.
The adjustment resulted a reduction in depreciation being recorded in the Group/Company's Statement of Comprehensive
Income for the year ended 31 March 2012 amounting to Rs. 18,088,886/-.
5.4 (B) Consequent to the adjustment made above, the remeasurement of the carrying value of the items of Property, Plant and
Equipment resulted in the need to recalculate the Group/Company's calculation of its deferred tax liability. Accordingly, an
additional deferred tax liability of Rs. 29,375,890/- was recognized as of the date of transition (31 March 2012 ² Rs.
31,184,779).
The resultant increase in the deferred tax expense recorded in the Group/Company's statement of comprehensive income
for the year ended 31 March 2012 amounted to Rs. 1,808,889/-.
5.4 (C) Previously the Group's practice included recognizing the long term investment at the lower of cost or market value on a
portfolio basis for marketable investments. Under SLFRS/LKAS, the Group has designated such investments as Available
for Sale Financial Assets which are required to be measured at fair value in the statement of financial position.
Accordingly, as at the date of transistion, the fair value of Available for Sale Investments in the Group/Company amounted
to Rs. 525,388,623/- (2012 - 359,742,520/-) and their previous SLAS carring amount was Rs. 241,970,342/- (2012 -
239,665,143/-). The difference of Rs. 283,418,280/- (2012 - Rs.120,077,377/-) has been recognised as a separate
component of equity, in the available-for-sale reserve.
The net gain/(loss) on available for sale investments for the year ended 31 March 2012 has been included in Other
Comprehensive Income.
5.4 (D) Under SLAS, the Group/ Company categorized Receivables, Advances and Prepayments as "Trade and Other
Receivables". Under SLFRS, Advances and Prepayments do not fall within the definition of Financial Assets as defined in
LKAS 39. Advances and prepayments has therefore been disclosed separately in the Statement of Financial Position as
such presentation would facilitate a better understanding of the entity's financial position.
5.4 (E) As part of the Group's transition to SLFRS/LKAS, the Group evaluated the classification of Non Current Assets in the
Financial Statements as to whether such represents an appropriate reflection of the assets concerned. In the previous year,
the Group/Company classified a land which was rented out to a third party as Property, Plant and Equipment. However, the
mentioned land was identified as being more appropriately reflected as Investment Property, based on which a
reclassification has been made in the financial statements.
5.4 (F) Previously, the financial statements of the group contained a separate reserve within equity titled "General Reserve" which
has been transferred to Retained Earnings as part of the Company's transition to SLFRS/LKAS.
-21-

NOTES
Year endedTO
31stTHE FINANCIAL
6. PROPERTY, PLANT AND EQUIPMENT
6.1 Group
6.1.1 Gross Carrying Amounts As at Additions/ Disposals/ As at Additions/ Disposals/ As at

01.04.2011 Transfers Write offs 31.03.2012 Transfers Write offs 31.03.2013
At Cost Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Buildings on Leasehold Land 67,474 - - 67,474 - - 67,474

Plant and Machinery 1,565,805 25,389 - 1,591,194 425,303 (15,039) 2,001,458
Furniture and Fittings 5,143 673 - 5,816 235 (3) 6,048
Office and Stores Equipment 38,070 1,633 (1,379) 38,324 4,596 (1,897) 41,023
Computer Hardware 38,419 4,107 (2,179) 40,347 6,521 (70) 46,798
Motor Vehicles 109,186 101,142 (6,921) 203,407 71,393 (1,584) 273,216
1,824,097 132,944 (10,479) 1,946,562 508,048 (18,593) 2,436,017
6.1.2 Assets on Finance Lease

Motor Vehicles 17,665 - - 17,665 - (10,730) 6,935
17,665 - - 17,665 - (10,730) 6,935
Total Gross Carrying

Amount 1,841,762 132,944 (10,479) 1,964,227 508,048 (29,323) 2,442,952
6.1.3 Depreciation Balance Charge for Disposals Balance Charge for Disposals Balance
As at the year As at the year As at
01.04.2011 31.03.2012 31.03.2013
Buildings on Leasehold Land 4,121 1,822 - 5,943 1,822 - 7,765

Plant and Machinery 522,781 89,388 - 612,169 112,726 (15,039) 709,856
Furniture and Fittings 4,127 407 - 4,534 521 (1) 5,054
Motor Vehicles 63,347 26,876 (5,669) 84,554 36,488 8,444 129,486
654,356 124,797 (9,156) 769,996 159,033 (8,490) 920,539

Motor Vehicles 4,690 2,146 - 6,836 3,533 (8,982) 1,387
4,690 2,146 - 6,836 3,533 (8,982) 1,387
Total Depreciation 659,046 126,943 (9,156) 776,832 162,566 (17,472) 921,926
2013 2012 2011

Rs. '000 Rs. '000 Rs. '000
6.1.5 Net Book Value 1,521,026 1,187,395 1,182,716
6.1.6 During the financial year, the Group acquired Property, Plant and Equipment to the aggregate value of Rs. 497,894,206/- (2012 - Rs.
367,007,464/-). Cash payments amounting to Rs. 497,894,206/- (2012 - Rs. 367,007,464/-) were made during the year for purchase of Property,
6.1.7 Property, Plant and Equipment include fully depreciated assets still in use having a gross carrying amounts of Rs. 204,401,376/- (2012 - Rs.
171,416,211/-).
6.1.8 Motor Vehicles held on Finance Lease which has a gross carrying amount of Rs. 1,748,000/- has been transfered to assets held at cost due to
completion of lease period.
6.1.9 The Group has entered in to a long-term operating lease agreement with Kahawatte Plantations PLC from 01 January 2006 to 14 June 2045 for
the use of land situated at Rilhena Estate. Buildings on leasehold land as reflected above represent buildings constructed by the group on the said
leased land.

-22-
NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 March 2013 Year ended 31st March 2013
6. PROPERTY, PLANT AND EQUIPMENT (Contd.)
6.2 Company
6.2.1 Gross Carrying Amounts As at Additions/ Disposals/ As at Additions/ Disposals/ As at

01.04.2011 Transfers Write offs 31.03.2012 Transfers Write offs 31.03.2013
Plant and Machinery 1,398,536 24,802 - 1,423,338 425,303 (15,039) 1,833,602

Furniture and Fittings 4,732 673 - 5,405 235 - 5,640
Motor Vehicles 107,986 101,141 (6,321) 202,806 66,513 (984) 268,335
1,581,353 132,315 (9,879) 1,703,789 503,048 (17,848) 2,188,989

Motor Vehicles 17,665 - - 17,665 - (10,730) 6,935
17,665 - - 17,665 - (10,730) 6,935
Total Gross Carrying

Amount 1,599,018 132,315 (9,879) 1,721,454 503,048 (28,578) 2,195,924
6.2.3 Depreciation Balance Charge for Disposals Balance Charge for Disposals Balance
As at the year As at the year As at
01.04.2011 31.03.2012 31.03.2013
Plant and Machinery 485,226 71,541 - 556,767 95,941 (15,039) 637,669

Furniture and Fittings 3,988 345 - 4,333 460 - 4,793
Motor Vehicles 63,177 26,756 (5,579) 84,354 35,675 8,643 128,672
609,469 104,757 (9,066) 705,160 138,320 (8,198) 835,282

Motor Vehicles 4,690 2,146 - 6,836 3,532 (8,982) 1,386
4,690 2,146 - 6,836 3,532 (8,982) 1,386
Total Depreciation 614,159 106,903 (9,066) 711,996 141,852 (17,180) 836,668
2013 2012 2011

Rs. '000 Rs. '000 Rs. '000
6.2.5 Net Book Value 1,359,256 1,009,458 984,859
6.2.6 During the financial year, the Company acquired Property, Plant and Equipment to the aggregate value of Rs. 492,896,550/- (2012 - Rs.
366,378,404/-). Cash payments amounting to Rs. 492,896,550/- (2012 - Rs. 366,378,404/-) were made during the year for purchase of
Property, Plant and Equipment.
6.2.7 Property, Plant and Equipment include fully depreciated assets still in use having a gross carrying amounts of Rs. 204,186,376/- (2012 -
Rs. 172,060,781/-).
6.2.8 Motor Vehicles held on Finance Lease which has a gross carrying amount of Rs. 1,748,000/- has been transffered to assets held
at cost due to completion of lease period.
-23-
Group Company
7. INVESTMENT PROPERTY 2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Freehold Land 234,064 234,064 - 234,064 234,064 -

234,064 234,064 - 234,064 234,064 -
7.1 Investment Property of the Company relates to land acquired by the company in February 2012. The land with an extent of 2 Acres,
3 Roods and 23 Perches is situated at No 480, Handala, Wattala. The land has currently been rented out to Multimodel Container
Terminal Limited.
8. INTANGIBLE ASSETS Group Company

Computer Software 2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
8.1 At Cost
As at 1 April 22,331 18,972 28,345 21,374 18,015 27,388
Acquired during the year 1,735 3,359 1,771 1,735 3,359 1,771
Derecognized during the year - - (11,144) - - (11,144)
Total Gross Carrying Amount as at 31 March 24,066 22,331 18,972 23,109 21,374 18,015
8.2 Amortisation
As at 1 April 18,405 15,447 22,816 17,502 14,803 22,525
Amortisation for the year 2,586 2,959 3,775 2,557 2,699 3,422
Derecognized during the year - - (11,144) - - (11,144)
As at 31 March 20,991 18,406 15,447 20,059 17,502 14,803
8.3 Net book value 3,075 3,925 3,525 3,050 3,872 3,212
8.4 During the financial year, the Group acquired Intangible Assets to the aggregate value of Rs. 1,734,502/- (2012- Rs. 3,359,268/-)
and Company - Rs. 1,734,502/- (2012 - Rs. 3,359,268/-). Cash payments amounting to Group - Rs. 1,734,502/-(2012- Rs.
3,359,268/-) and Company - Rs. 1,734,502/- (2012- Rs. 3,359,268/-) were made during the year for purchase of Intangible Assets
8.5 Computer Software are amortised over an estimated useful life of 3 years.
8.6 Intangible Assets include fully amortised assets still in use having a gross carrying amounts of Rs. 17,506,081/- (2012 - Rs.
15,696,188/-) in the Group and Rs. 16,646,511/- (2012 - Rs. 14,836,618/-) in the Company.
9. INVESTMENT IN SUBSIDIARY
Company
Holding Holding Holding
% % % Value Value Value
2013 2012 2011 2013 2012 2011
Non-quoted Rs. '000 Rs. '000 Rs. '000
MJF Beverages (Pvt) Ltd. 100 100 100 300,750 300,750 300,750
Less - Provision for fall in value of Investments (152,523) (152,523) (120,849)
148,227 148,227 179,901
42 Ceylon Tea Services PLC / Annual-24-

Report 2012/2013
10. OTHER FINANCIAL ASSETS

Group/Company 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000
Available for Sale Investments
Quoted Investments (Note 10.1) 440,757 334,742 500,388
Unquoted Investments (Note 10.2) 25,000 25,000 25,000
465,757 359,742 525,388
10.1 Quoted Investments

No. of Shares Value Value Value
2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000
Renuka City Hotels PLC 17,500 17,500 17,500 4,200 3,831 5,822
Maskeliya Plantation PLC 800 800 800 10 14 22
Watawala Plantation PLC 6,000 6,000 6,000 67 60 15
Hapugastenna Plantation PLC 100 100 100 4 4 7
Kahawatte Plantation PLC 12,571,800 12,571,800 12,707,400 436,241 330,637 494,318
John Keells Holdings PLC 950 950 713 235 196 204
440,757 334,742 500,388
The fair value of quoted equity shares is determinned by reference to published prices in the Colombo Stock Exchange.
10.2 Unquoted Investments

No. of Shares Value Value Value
2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000
Rainforest Ecolodge (Pvt) Ltd. 2,500,000 2,500,000 2,500,000 25,000 25,000 25,000
10.3 Fair Value Hierarchy
The Group/ Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market
data.
All quoted investments of the Group as reflected in Note 10.1 have been designated as Level 1 and the Group's unquoted investment
in Rainforest Ecolodge (Pvt) Ltd as reflected in Note 10.2 has been designated as Level 3.
During the year ended 31 March 2013, there were no transfers of investments made between the designated levels for fair value
measurement and there has been no movement in the fair value of Level 3 designated financial instruments of the Group during the
year.
11. INVENTORIES Group Company

2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Raw Materials 600,933 583,935 730,523 598,971 582,428 728,789

Work-in-progress 48,866 58,669 93,072 48,866 58,669 93,072
Finished Goods 244,243 132,915 90,632 243,473 132,583 89,954
Goods in Transit 20,212 49,549 20,738 20,212 49,549 20,738
Consumables and Spares 104,261 80,008 61,421 104,261 80,008 61,421
1,018,515 905,076 996,386 1,015,783 903,237 993,974
-25-
12. TRADE AND OTHER RECEIVABLES

Group Company
2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Trade Debtors 2,652,928 2,566,482 2,055,387 2,648,970 2,566,256 2,053,367

Other Debtors 37,139 14,128 19,945 32,683 9,276 16,687
2,690,067 2,580,610 2,075,332 2,681,653 2,575,532 2,070,054
12.1 The Group has not impaired nor provided for trade receivables as at 31 March 2013.
12.2 As at 31 March, the ageing analysis of trade receivables (stated in Rs. Thousands) is as follows. In preparing the age analysis, past due
days relate to debtors outstanding in excess of the granted credit period.
Neither Past
Total
Due nor Past due but not impaired
Rs. '000
Impaired < 30 Days 30 - 60 days 61 - 90 days > 90 days
2013 2,114,513 204,630 279,630 46,310 7,845 2,652,928
2012 2,230,175 267,616 60,651 370 7,670 2,566,482
See Note 34 on credit risk of trade receivables to understand how the Group manages and measures credit quality on trade receivables
that are neither past due nor impaired.
13. ADVANCES AND PREPAYMENTS Group Company

2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Deposits, Advances and Prepayments 160,309 318,161 305,738 159,094 317,161 304,803
160,309 318,161 305,738 159,094 317,161 304,803
14. AMOUNTS DUE FROM RELATED PARTY 2013 2012 2011

Company Rs. '000 Rs. '000 Rs. '000
MJF Beverages (Pvt) Ltd. 65,721 38,342 26,545
Less: Provision for Doubtful Debt (38,342) (38,342) -
27,379 - 26,545
15. STATED CAPITAL
Group / Company 2013 2012 2011
Number - '000 Rs. '000 Number - '000 Rs. '000 Number - '000 Rs. '000
Fully Paid Ordinary Shares 20,000 200,000 20,000 200,000 20,000 200,000
16. RESERVES
16.1 Available for Sale Reserve

The available for sale reserve records fair value changes on available for sale financial assets.
Reconciliation of Available for Sale Reserve Group Company

2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Increase/(decrease) in fair value of investments held 106,014 (163,341) 106,014 (163,341)
Realised gain/(loss) transferred to profit/loss during the year - - - -

Net gain/(loss) on available-for-sale financial assets 106,014 (163,341) 106,014 (163,341)
Balance as at the beginning of the year 120,077 283,418 120,077 283,418

Balance as at the end of the year 226,091 120,077 226,091 120,077
-26-Report 2012/2013
Ceylon Tea Services PLC / Annual
44
17. DEFERRED TAX LIABILITIES Statement of Financial Position Statement of

Comprehensive Income
Group/Company 2013 2012 2011 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Deferred Tax Liability
Accelerated depreciation for Tax Purposes 63,099 46,879 43,862 16,219 3,018
Deferred Tax Assets

Defined Benefit Plans (8,633) (7,450) (6,269) (1,182) (1,181)
Deferred Income Tax Charge 15,037 1,837

Net Deferred Tax Liability 54,466 39,429 37,593
18. OTHER DEFERRED LIABILITIES Group Company

Retirement Benefits Obligation - Gratuity 2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
As at 1st April 75,715 63,583 42,270 74,503 62,688 41,658

Interest Cost 7,572 6,358 5,068 7,450 6,269 4,999
Current Service Cost 8,404 6,343 5,774 7,809 6,108 5,560
Actuarial Loss 1,377 2,510 11,987 1,263 2,392 11,987
Benefits Paid (9,000) (3,079) (1,516) (8,565) (2,954) (1,516)
Liability transferred from Fellow
Subsidiary 3,866 - - 3,866 - -
As at 31st March 87,934 75,715 63,583 86,326 74,503 62,688
During the year several employees formerly employed with an affiliated company, MJF Travel and Trucking (Pvt) Limited
were transferred to Ceylon Tea Services PLC. The arrangement between the Companies was that the employees would
contine an unbroken service period from their respective initial recruitment into the group. The gratuity liability of all
employees as of the date of transfer was calculated as per group policy and was paid to the Company in return for assuming
the liability of the transferred employees.
The Group measures the present value of the promised retirement benefits of gratuity, which is a defined benefit plan with
the advice of an independent professional actuary. Refer Note 2.3.13 for key assumptions used by the Actuary.
19. INTEREST BEARING LOANS AND BORROWINGS 2013 2012 2011

Group/Company (Note 19.1) Rs. '000 Rs. '000 Rs. '000
Repayable Within 1 Year 1,695 4,061 3,901
Repayable After 1 Year 617 2,312 6,481
2,312 6,373 10,382
19.1 Finance Leases As At New Leases Repayment As At New Leases Repayment As At

01.04.2011 Obtained 31.03.2012 Obtained 31.03.2013
Motor Vehicles Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Gross Liability 16,794 - 5,460 11,334 - 7,572 3,762

Finance Charges allocated to future
periods (6,412) - (1,451) (4,961) - (3,511) (1,450)
Net liability 10,382 - 4,009 6,373 - (4,061) 2,312

Notes to the
NOTES TO THE Financial STATEMENTS(Contd...)
FINANCIALStatements
Year ended
Year ended 3131
st
March
March 20132013
20. TRADE AND OTHER PAYABLES Group Company

2013 2012 2011 2013 2012 2011
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
An amount of Rs. ____________ of
Trade Payables 283,377 206,029 179,378 282,696 206,029 179,378
Sundry Creditors including Accrued Expenses 415,538 368,597 396,756 414,225 368,535 395,768
698,915 574,626 576,134 696,921 574,564 575,146
21. CASH AND CASH EQUIVALENTS

Group Company
2013 2012 2011 2013 2012 2011
Components of Cash and Cash Equivalents Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Favourable Cash and Cash Equivalents Balances

Fixed and Call Deposits 1,924,135 1,673,786 1,433,232 1,924,135 1,673,786 1,430,949
Cash and Bank Balances 734,526 778,514 900,879 722,672 775,830 900,879
2,658,661 2,452,300 2,334,111 2,646,807 2,449,616 2,331,828
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods of
between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-
term deposit rates.
22. REVENUE Group Company

2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Export Sales 7,083,371 5,839,709 7,076,291 5,835,114

Local Sales 786 213 - -
7,084,157 5,839,922 7,076,291 5,835,114
Group Company
23. OTHER INCOME AND GAINS 2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Dividend from Equity Securities 5,771 104 5,771 104

Rent Income from Investment Property 5,850 - 5,850 -
Profit on Disposal of Property, Plant and Equipment 5,108 5,984 3,729 4,702
Profit on Disposal of Investments - 3,026 - 3,026
Other Income 11,213 832 4,514 830
27,942 9,946 19,864 8,662
9,945,904
24. FINANCE COST AND INCOME Group Company
2013 2012 2013 2012
24.1 Finance Cost Rs. '000 Rs. '000 Rs. '000 Rs. '000
Interest Expense on Overdraft 22 31 20 30

Finance Lease Charges 654 1,451 654 1,451
676 1,482 674 1,481
(1,481,557)
24.2 Finance Income
Income from Investments :

-Interest on Deposits and Saving Accounts 196,557 104,092 196,557 104,092
-Other Interest 868 - 684 -
197,425 104,092 197,241 104,092
-28-

25. PROFIT B EEFORE TAX Group Company

Stated after Charging 2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Included in Cost of Sales
Employee Benefits including the following 323,501 254,778 310,976 245,120
- Defined Benefit Plan Costs -Gratuity 8,378 6,599 7,550 6,189
- Defined Contribution Plan Costs - EPF and ETF 27,586 20,120 26,313 19,052
Depreciation 115,357 91,297 97,476 73,450
Product Development Expenses 1,330 1,346 1,258 1,322
Included in Administrative Expenses

Employee Benefits including the following 209,335 165,952 209,335 165,951
- Defined Benefit Plan Costs -Gratuity 8,972 8,310 8,972 8,310
- Defined Contribution Plan Costs - EPF and ETF 14,989 10,872 14,989 10,872
Depreciation 46,635 35,645 43,802 33,453
Amortisation of Intangible Assets 2,614 2,959 2,586 2,699
Donations - Approved Charities 150,000 160,100 150,000 160,100
- Other Donations 1,813 850 1,813 842
Auditors Remuneration 750 645 690 580
Provision for Fall in Value of Investments - - - 31,674
Provision for Doubtful Debts 65 - 65 38,342
Included in Selling and Distribution Costs

Export Promotion 913,086 812,927 913,086 812,927
26. INCOME TAX EXPENSE Group Company

2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Current Income Tax
Current Tax Expense on Ordinary Activities for the Year (Note 26.1) 182,019 235,182 182,019 235,182
Over provision of current taxes in respect of prior years (2,161) (2,175) (2,161) (2,175)
Deferred Income Tax
Deferred Taxation Charge (Note 26.2) 15,037 1,837 15,037 1,837
194,895 234,844 194,895 234,844
26.1 Reconciliation between Current Tax Expense and the product of Accounting Profit.
Group Company
2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000
Accounting Profit (Profit before Tax) 1,625,781 1,921,765 1,658,069 1,883,422
Aggregate Disallowed Items 352,730 498,710 352,730 498,578
Aggregate Allowable Expenses (233,997) (149,091) (266,285) (110,616)
Aggregate Allowable Income (9,500) (111,924) (9,500) (111,924)
Qualifying Payments (99,514) (500) (99,514) (500)
Exempted Profit - - - -
Taxable Profit 1,635,500 2,158,960 1,635,500 2,158,960
Statutory Tax Rate 10% (2012 - 10%) 1,532,896 2,051,816 1,532,896 2,051,816
Statutory Tax Rate 28% (2012 - 28%) 102,604 107,144 102,604 107,144
1,635,500 2,158,960 1,635,500 2,158,960
Estimated Current Tax Expense for the Year 182,019 235,182 182,019 235,182
Group Company
26.2 Deferred Tax Expense 2013 2012 2013 2012
Deferred Tax Expense arising due to Rs. '000 Rs. '000 Rs. '000 Rs. '000
- Origination and reversal of Timing Differences 15,037 1,837 15,037 1,837

Notes to the
NOTES TO THEFinancial
FINANCIALStatements
STATEMENTS(Contd...)
Yearended
Year ended3131 March
March 20132013
st
27. EARNINGS PER SHARE
27.1 Basic Earnings Per Share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the year.
27.2 The following reflects the income and share data used in the basic Earnings Per Share computation
2013 2012
Amount Used as the Numerator: Rs. '000 Rs. '000
Profit for the year 1,430,887 1,686,920
2013 2012
Number of Ordinary Shares Used as the Denominator: Number - '000 Number - '000
Weighted Average number of Ordinary Shares in issue 20,000 20,000
28. DIVIDEND PER SHARE 2013 2012

Dividend Dividend
Declared and paid during the year Per Share Per Share
Equity Dividend on Ordinary Shares: Rs. Rs. '000 Rs. Rs. '000
Final Dividend - 2011 - - 22.50 450,000

Interim Dividend - 2012 - - 30.00 600,000
Final Dividend - 2012 10.00 200,000 - -
Interim Dividend - 2013 30.00 600,000 - -
800,000 1,050,000
Proposed for approval at AGM (not recognised as a liability as at the statement of financial position date)
Equity Dividend on Ordinary Shares:

Final Dividend for 2013 10.00 200,000 10.00 200,000
-30- Report 2012/2013

Ceylon Tea Services PLC / Annual
48
29. SEGMENTAL INFORMATION
The Group does not have seperately distinguishable components within the enterprise that is engaged in providing individual products or
services or a group of related products or services that is subject to risk and returns that are different from those of other business
For management purposes, the Group monitors the sales and the costs associated with the different product types offered in evaluating the
profitability of the same as follows;
29.1 Business Segment - Group

Tea Bags Tea Packets Other* Total
2013 2012 2013 2012 2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Revenue 5,885,707 4,960,265 650,771 608,339 547,678 271,318 7,084,157 5,839,922

Cost of Sales (3,056,017) (2,586,115) (469,965) (420,988) (474,379) (234,757) (4,000,362) (3,241,859)
Segment Gross Profit 2,829,690 2,374,150 180,806 187,351 73,299 36,561 3,083,795 2,598,063
29.2 Business Segment - Company

Tea Bags Tea Packets Other* Total
2013 2012 2013 2012 2013 2012 2013 2012
Revenue 5,885,707 4,960,265 650,771 608,339 539,813 266,510 7,076,291 5,835,114

Cost of Sales (3,054,742) (2,586,115) (469,965) (420,988) (432,882) (201,850) (3,957,588) (3,208,953)
Segment Gross Profit 2,830,965 2,374,150 180,806 187,351 106,931 64,660 3,118,703 2,626,161
*Other Sales include Bulk Tea and Other Value Added Teas.
Management considers that there is no suitable basis for allocating assets, related liabilities and operating expenses to business segments.
Accordingly, segment assets, segment liabilities, segment operating expenses and other segment information by business segment is not
disclosed.
-31-

30. COMMITMENTS AND CONTINGENCIES
30.1 Capital Expenditure Commitments

The Company has purchase commitments for acquisition of Property, Plant and Equipment and Intangible assets incidental to the ordinary course
of business as follows,
2013 2012
Contracted but not Provided for Rs. '000 Rs. '000
- Tea Bagging Machines - 167,654
2013 2012
30.2 Contingencies Rs. '000 Rs. '000
Letters of Guarantee 55,203 75,487
Letters of Credit 26,242 19,797
31. ASSETS PLEDGED
There are no Assets Pledged as at the statement of financial position date.
32. EVENTS OCCURRING AFTER THE STATEMENT OF FINANCIAL POSITION DATE
There have been no material events occurring after the Statement of Financial Position date that require adjustments to or disclosure in the
33. RELATED PARTY DISCLOSURES

Details of significant related party disclosures are as follows:
33.1 Group
33.1.1 Transactions with the parent and related entities
Parent Other * Total
MJF Teas (Pvt) Ltd.
2013 2012 2013 2012 2013 2012
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Export Sales - - 3,054,717 2,812,898 3,054,717 2,812,898

Local Sales - 1,558 213 1,558 213
Transfer of Tea and Packing Material 1,240,239 1,053,108 332,718 204,848 1,572,957 1,257,956
Purchase of Packing Material - - (937,531) (698,656) (937,531) (698,656)
Fixed Asset Transfers - - 40,900 - 40,900 -
Rent Paid - - (44,389) (43,674) (44,389) (43,674)
Transport Charges Paid - - (4,331) (18,271) (4,331) (18,271)
Vehicle Hire Income 1,608 - 1,163 - 2,771 -
Gratuity Liability transferred - - 3,866 - 3,866 -
Donations Paid - - (150,000) (160,000) (150,000) (160,000)
*Transactions carried out with other companies under common control or under significant influence of the Ultimate Parent Enterprise.
2013 2012
Company Name Receivable/ Receivable/
(Payable) (Payable)
Rs. '000 Rs. '000
Dilmah Australia (Pty) Limited 1,692,566 1,759,471

Forbes & Walkers (Pvt) Ltd. 280 (177)
Packages Lanka (Pvt) Ltd. (7,938) (4,637)
Print Care PLC (8,727) (10,098)
Timber Concepts (Pvt) Ltd. (7,331) (3,314)
Printcare Universal (Pvt) Ltd. (19,557) (22,007)
1,649,293 1,719,238
33.1.2 Transactions with Key Management Personnel of the entity or parent
The Group considers the members of its Board of Directors as the key management personnel.
2013 2012
Rs. '000 Rs. '000
Key Management Personnel Compensation
Short-term Employee Benefits 85,894 79,695
Post Employment Benefits 13,588 14,280
-32- 99,482 93,975

As reported
The
During
As previously:
presentation
the
moreyear
fully
changes
and
described
classification
wereinmade
Noteofin
37,
following
thetheidentification
Company
items commenced
inand
these
expenses
financial
accounting
to segments.
statements
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However
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have
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33. RELATED PARTY DISCLOSURES (Contd.)
33.2 Company
33.2.1 Transactions with the parent and related entities

Parent Subsidiary Other * Total
MJF Teas (Pvt) Ltd. MJF Beverages (Pvt)
Ltd.
2013 2012 2013 2012 2013 2012 2013 2012
Export Sales - - - - 3,054,717 2,812,898 3,054,717 2,812,898

Transfer of Tea
& Packing
Material 1,240,239 1,053,108 - - 332,718 204,848 1,572,957 1,257,956
Fund Transfers - - (27,608) (11,590) - - (27,608) (11,590)
Purchase of
Packing
Material - - - - (937,531) (698,656) (937,531) (698,656)
Purchase of Tea - - (772) (3,397) - - (772) (3,397)
Fixed Asset
Transfers - - - - 40,900 - 40,900 -
Rent Paid - - - - (42,738) (41,969) (42,738) (41,969)
Transport
Charges - - - - (4,331) (18,179) (4,331) (18,179)
Vehicle Hire
Income 1,609 - 23 - 1,163 - 2,795 -
Donation Paid - - - - (150,000) (160,000) (150,000) (160,000)
Gratuity
Liability
transferred - - - - 3,866 - 3,866 -
Reimbursement
of Expenses
Incurred - - 213 471 - - 213 471
*Transactions carried out with other companies under common control or under significant influence of the Ultimate Parent
Enterprise.
Amounts due from Related Party is disclosed under Note 9, whilst the following amounts have been disclosed under Trade
Receivable and Payables in the Statement of Financial Position
2013 2012
Company Name Receivable/ Receivable/
(Payable) (Payable)
Rs. '000 Rs. '000
Dilmah Australia (Pty) Limited 1,692,566 1,759,471

Forbes & Walkers (Pvt) Ltd. 280 (177)
Packages Lanka (Pvt) Ltd. (7,938) (4,637)
Print Care PLC (8,727) (10,098)
Timber Concepts (Pvt) Ltd. (7,331) (3,314)
Printcare Universal (Pvt) Ltd. (19,557) (22,007)
MJF Beverages (Pvt) Ltd 27,379 -
1,676,672 1,719,238
-33-
NOTES
Year TO
ended 31stTHE FINANCIAL
33. RELATED PARTY DISCLOSURES (Contd.)
33.2.2 Transactions with Key Management Personnel of the entity or parent
The Company considers the members of its Board of Directors as the key management personnel.
Key Management Personnel Compensation 2013 2012

Rs. '000 Rs. '000
Short-term Employee Benefits 85,894 79,695

Post Employment Benefits 13,588 14,280
99,482 93,975
34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group has exposure to Market risk, Credit risk and Liquidity risk from its use of financial instruments as follows;
Group
2013 2012 2011
Financial Assets Rs. '000 Rs. '000 Rs. '000
Cash and Cash Equivalents 2,658,661 2,452,300 2,334,111
Trade and Other Receivables 2,690,067 2,580,610 2,075,332
Other Financial Assets 465,757 359,742 525,388
Financial Liabilities
Interest Bearing Loans and Borrowings 2,312 6,373 10,382
Trade and Other Payables 698,915 574,626 576,134
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework
which is summarized below.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will
affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimizing the return.
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 *URXS¶V exposure to the risk of changes in foreign exchange rates relates primarily to the *URXS¶V
operating activities.
The summary of quantitative data about the Group's exposure to foreign currency was as follows. (USD in Millions)
Group Company
31.03.2013 31.03.2012 01.04.2011 31.03.2013 31.03.2012 01.04.2011
Trade receivables 22.38 22.65 21.58 22.30 22.60 21.52
Cash and cash equivalents 20.98 19.16 21.15 20.88 19.14 21.13
Trade payables 5.50 4.48 5.22 5.49 4.48 5.21

-34-
34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Coontd.)
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 *URXS¶V exposure to the risk of changes in market interest rates relates primarily to the *URXS¶V short term
currency deposits .
Interest rate management decisions on term deposits require approval from the Board of Directors.
Equity Price Risk

The *URXS¶V listed equity securities are susceptible to market-price risk arising from uncertainties about future values of the
LQYHVWPHQWVHFXULWLHV5HSRUWVRQWKHHTXLW\SRUWIROLRDUHVXEPLWWHGWRWKH*URXS¶VVHQLRUPDQDJHPHQWRQDUHJXODUEDVLV
Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing
activities, including deposits with banks.
Trade Receivables
Customer credit risk is managed by each business unit subject to the *URXS¶V established policy, procedures and control relating to
customer credit risk management. Credit quality of the customer is assessed based on an extensive credit rating assessment and
individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and
any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.
No provisions have been made on trade or other receivables as the receivable balances were not impaired.
Cash Deposits
Group limits its credit risk on cash deposits by investing only in short term deposits and repos with selected bankers with Board
approval.
Liquidity Risk
The Group's approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group's short and medium term fund requirements are regularly reviewed and managed by the Treasury Division. The Group has
no interest bearing long term loans as at 31st March 2013 and finance leasing arrangements are shown under Current
and Non Current Liabilities as at 31st March 2013.
-35-
Five Year Summary - Company
For the
FIVEyear ended
YEAR 31st March
SUMMARY - COMPANY
For the year ended 31 March
2013 2012 2011 2010 2009
TRADING RESULTS (Rs. '000)

Turnover 7,076,291 5,835,114 5,783,664 4,940,755 4,428,780
Operating Expenses 5,801,417 4,829,821 4,881,220 4,337,025 3,960,052
Other Income 383,870 879,611 493,361 734,229 103,413
Interest Expense 674 1,481 1,860 1,867 2,444
Profit before Income Tax 1,658,070 1,883,423 1,393,945 1,336,092 569,697
Income Tax on Profits 194,895 234,844 80,062 78,639 49,930
Profit for the Year 1,463,175 1,648,579 1,313,883 1,257,453 519,767
SHAREHOLDERS' FUNDS (Rs.'000)

Stated Capital 200,000 200,000 200,000 200,000 200,000
Reserves 7,702,469 6,933,280 6,498,042 5,236,358 3,966,335
NET ASSETS 7,902,469 7,133,280 6,698,042 5,436,358 4,166,335
ASSETS (Rs.'000)
Property , Plant & Equipment 1,359,256 1,009,458 984,859 761,240 483,632
Investment Property 234,064 234,064 - - -
Intangible Assets 3,050 3,872 3,212 4,863 8,227
Other Financial Assets / Investments 613,984 507,969 705,289 398,175 531,487
Current Assets 6,532,140 6,245,546 5,727,204 4,868,259 3,686,411
LIABILITIES (Rs.'000)
Non-current Liabilities 141,409 116,244 106,762 61,627 49,914
Current Liabilities 698,616 751,385 615,760 534,552 493,508
NET ASSETS 7,902,469 7,133,280 6,698,042 5,436,358 4,166,335
Market Price Per Share (Rs.) 651.10 650.00 800.00 480.00 270.00
Dividend Per Share (Rs.) 40.00 40.00 35.00 30.00 25.00
Total Dividend Rs.' 000 (Gross) 800,000 800,000 700,000 600,000 500,000
No of Shares * 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000
RATIOS
Return on Average Shareholders Funds (%) 19.46 23.84 21.66 26.19 11.73
Earnings Per Share (Rs) 73.16 82.43 65.69 62.87 25.99
Dividend Cover (times) 1.83 2.06 1.88 2.10 1.04
Liquidity (times) 9.35 8.31 9.30 9.11 7.47
* The information above for 2012 and 2013 are based on new Sri Lanka Accounting Standards applicable for the financial periods beginning 01st
January 2012

Information to Investors
As at 31st March 2013
INFORMATION TO INVESTORS
1. STOCK EXCHANGE LISTING

The issued ordinary shares of Ceylon Tea Services PLC are listed on the Colombo Stock Exchange.
2. ORDINARY SHAREHOLDERS
Number of
Number of Shares Total Holding % Holding
Shareholders
1 - 1,000 695 65,463 0.33%
1,001 - 5,000 59 160,241 0.80%
5,001 - 10,000 24 173,600 0.87%
10,001 - 50,000 23 533,732 2.67%
50,001 - 100,000 2 124,965 0.62%
100,001 - 500,000 1 156,020 0.78%
500,001 - 1,000,000 - - 0.00%
1,000,001 - Over 3 18,785,979 93.93%
Total 807 20,000,000 100.00%
3. ANALYSIS OF SHAREHOLDERS
Number of
Number of Shares Total Holding % Holding
Shareholders
Individuals 748 2,427,084 12.14%
Institutions 59 17,572,916 87.86%
Total 807 20,000,000 100.00%
2,552,196 (12.76%) shares were held by the public as at 31st March 2013
4. SHARE TRADING
2013 2012 2011 2010 2009

No of Transactions 794 251 74 211 106
No of Shares Traded 95,136 76,441 1,466,000 73,900 36,300
Value of Shares Traded 60,177,965 51,652,450 956,821,140 26,780,550 10,863,400
5. DIVIDENDS
2013 2012 2011 2010 2009

Interim-per share Rs. 30/00 Rs. 30/00 Rs. 12/50 Rs. 12/50 Rs. 25/00
Final-per share Rs. 10/00 Rs. 10/00 Rs. 22/50 Rs. 17/50 Nil
Amount (Rs.000's) Gross 800,000 800,000 700,000 600,000 500,000
6. EARNINGS (restated on current number of shares)
2013 2012 2011 2010 2009

Earnings/share Rs. 71.54 84.35 70.04 60.77 24.36
P/E Ratio 9.10 7.71 11.42 7.90 11.09

Information to Investors (Contd...)
7. MARKET VALUES (Rs.)
2013 2012 2011 2010 2009

Highest 749.00 994.00 1,000.00 550.00 350.00
Lowest 575.00 530.00 650.00 300.00 255.00
Year End 651.10 650.00 800.00 480.00 270.00
The weighted average trading price for the year was Rs.632.55
8. MARKET CAPITALIZATION (Rs.Million)
2013 2012 2011 2010 2009

Capital & Reserves 7,909 7,172 6,699 5,350 4,122
Market Capitalization 13,022 13,000 16,000 9,600 5,400
13,022 13,000 16,000 9,600 5,400
ST
9 TOP 20 SHAREHOLDINGS AS AT 31 MARCH 2013
31.03.13 31.03.12
SHAREHOLDER NAME
TOTAL SHARES % TOTAL SHARES %
M.J.F. Teas (Pvt) Ltd 13,075,382 65.38% 13,075,382 65.38%
M.J.F. Exports (Pvt) Ltd 4,256,712 21.28% 4,256,712 21.28%
Dr. T.Senthilverl 1,453,885 7.27% 1,477,094 7.39%
Mrs.S.T.Fernando 156,020 0.78% 156,020 0.78%
The Gilpin Fund Ltd 69,700 0.35% 68,700 0.34%
Mr.H.A.Van Starrex 55,265 0.28% 47,000 0.24%
Mrs.S.T.F.Ortiz 42,854 0.21% 42,854 0.21%
Mr.M.P.Wanniarachchi 39,598 0.20% 43,842 0.22%
Mr.A.W.Atukorala 36,600 0.18% 36,600 0.18%
Mr.M.W.De Silva 34,830 0.17% 34,830 0.17%
Mr.J.W.Burton 32,270 0.16% 29,570 0.15%
Aardwolf Limited 30,000 0.15% 0.00%
Merrill J Fernando & Sons (Pvt) Ltd 25,300 0.13% 25,300 0.13%
Mrs.A.S.Fernando 24,284 0.12% 24,284 0.12%
Mr.D.C.Fernando 24,200 0.12% 24,200 0.12%
Mr.M.J.Fernando 24,200 0.12% 24,200 0.12%
Dr.K.Poologasundram 23,808 0.12% 23,808 0.12%
Mr.H.R.Peries 21,200 0.11% 21,200 0.11%
Mr.H.S.Ranaweera 20,084 0.10% 20,084 0.10%
Amalgamated Graphite (Pvt) Ltd 20,000 0.10% 20,000 0.10%
Bartleet Finance Limited/Hans Anton Van Starrex 19,000 0.10%
Estate of Late D.P.M.Fernando 19,000 0.10%
19,466,192 97.33% 19,489,680 97.45%

Notice of Meeting
Notice is hereby given that the 32nd Annual General Meeting of Ceylon Tea Services PLC will be held at 111, Negombo
Road, Peliyagoda on 31st July 2013 at 4.00 p.m. for the following purposes:
1. To pass the ordinary resolution set out below to re-elect Mr. Merrill J Fernando who is 83 years of age, as a Director of
the Company.
“IT IS HEREBY RESOLVED that Mr. Merrill J Fernando who is 83 years of age be and is hereby re-elected a Director of
the Company and it is hereby declared as provided for in section 211 of the Companies Act. No.7 of 2007 that the age
limit of 70 years referred to in section 210 of the said Companies Act shall not apply to Mr. Merrill J Fernando”
2. To pass the ordinary resolution set out below to re-elect Mr. Gritakumar E. Chitty who is 74 years of age, as a Director
of the Company.
“IT IS HEREBY RESOLVED that Mr. Gritakumar E. Chitty who is 74 years of age be and is hereby re-elected a Director
of the Company and it is hereby declared as provided for in section 211 of the Companies Act. No.7 of 2007 that the age
limit of 70 years referred to in section 210 of the said Companies Act shall not apply to Mr. Gritakumar E. Chitty”
3. To pass the ordinary resolution set out below to re-elect Mr. Rajanayagam Asirwatham who is 70 years of age, as a
Director of the Company.
“IT IS HEREBY RESOLVED that Mr. Rajanayagam Asirwatham who is 70 years of age be and is hereby re-elected a
Director of the Company and it is hereby declared as provided for in section 211 of the Companies Act. No.7 of 2007
that the age limit of 70 years referred to in section 210 of the said Companies Act shall not apply to Mr. Rajanayagam
Asirwatham”
4. To re-elect as a Director, Mr. Roshan Tissaaratchy who retires by rotation under section 24 of the Articles of Association.
5. To receive and adopt the Report of the Directors and statement of accounts for the year ended 31st March 2013 along
with the Report of the Auditors thereon.
6. To declare a Final Dividend as recommended by Directors.
7. To authorize the Directors to make donations.
8. To re-appoint Ernst & Young, Chartered Accountants, as Auditors of the Company and to authorize the Directors to
determine their remuneration.
9. Any other business of which due notice has been given.
By order of the Board,

Minette Perera
Secretary.
Colombo
13th June 2013
Note
A member is entitled to appoint a proxy to attend and vote instead of himself, for which purpose a form of proxy is enclosed
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hours before the time for the Meeting.

Notes

Form of Proxy
Ceylon Tea Services PLC
5HJLVWHUHG2IÀFH1HJRPER5RDG3HOL\DJRGD6UL/DQND
I/We ....................................................................................................................................................................................
of ..........................................................................................................................................................................................
...............................................................................................................................................................................................
being member/s of CEYLON TEA SERVICES PLC hereby appoint:
............................................................................................................................................................................................of
...............................................................................................................................................................or failing him/her
Mr. Merrill Joseph Fernando of Colombo or failing him
Mr. Malik Joseph Fernando of Colombo or failing him
Mr. Dilhan Chrishantha Fernando of Colombo or failing him
Mr. Himendra Somasiri Ranaweera of Colombo or failing him
Ms. Minette Delicia Anne Perera of Colombo or failing her
Mr. Roshan Conrad Tissaaratchy of Colombo or failing him
Mr. Rajanayagam Nalliah Asirwatham of Colombo or failing him
Mr. Gritakumar Edmund Chitty
As my / our Proxy to attend and vote for me / us on my / our behalf at the Thirty Second Annual General Meeting
of the Company to be held on the 31st July 2013 at 4.00 p.m. and any adjournment thereof and at every poll which
may be taken in consequence of the aforesaid meeting.
As Witness my hand / our hands this ........................... day of ...................... 2013
Signature: ................................
N.B. 1. Please delete the inappropriate words

2. Instructions as to completion are noted on the reverse hereof.
3. A Proxy need not be a member of the Company.

Instructions as to Completion
.LQGO\SHUIHFWWKH3UR[\E\ÀOOLQJOHJLEO\\RXUIXOOQDPHDQGDGGUHVVDQGE\VLJQLQJLQWKHVSDFHSURYLGHGDQG
ÀOOLQJLQWKHGDWHRIVLJQDWXUH
,QWKHFDVHRIFRUSRUDWHPHPEHUVWKHSUR[\IRUPPXVWEHXQGHUWKHVHDORUKDQGRIDQDXWKRUL]HGRIÀFHURU
attorney.
3. If the proxy form is signed by an attorney, the relevant Power of Attorney should accompany the proxy form
for registration, if such Power of Attorney has not already been registered with the Company.
7KHFRPSOHWHGSUR[\IRUPVKRXOGEHGHSRVLWHGDWWKHUHJLVWHUHGRIÀFHRIWKH&RPSDQ\DWWKHDGGUHVVJLYHQ
below not less than 48 hours before the time appointed for the Meeting.
CEYLON TEA SERVICES PLC

111, Negombo Road
Peliyagoda

Corporate Information
LEGAL FORM : Quoted Public Company with Limited Liability
Incorpoarated in Sri Lanka in 1981
COMPANY REGISTRATION NUMBER : PQ 209
REGISTERED OFFICE : 111, Negombo Road, Peliyagoda, Sri Lanka.

Telephone: (94 11) 4 822000
Facsimile: (94 11) 4 822001
E-mail : info@dilmahtea.com
Website : www.dilmahtea.com
STOCK EXCHANGE LISTING : The Ordinary Shares are listed on the Colombo
Stock Exchange
SUBSIDIARY : MJF Beverages (Private) Limited
BOARD OF DIRECTORS : Chairman

Merrill J. Fernando
Deputy Chairman / Chief Executive Officer

Himendra S. Ranaweera
Directors
Malik J. Fernando – B.Sc.
Dilhan C. Fernando - B.Sc.
Minette Perera – FCA, FCMA, FCCA
Roshan Tissaaratchy – B.A, MBA, DipM MCIM
Rajan Asirwatham – FCA
Gritakumar E. Chitty – Attorney at Law
SECRETARY : Minette Perera
BANKERS : Bank of Ceylon

Commercial Bank of Ceylon PLC
National Development Bank PLC
Standard Chartered Bank
The Hongkong & Shanghai Banking Corporation
Limited
AUDITORS : Ernst & Young

201, De Saram Place,
Colombo 10.

489 1373284812858

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Contents

Report of the Audit Committee 09

Report of the Remuneration Committee 09

MJF Charitable Foundation / Dilmah Conservation 10

Report of the Directors 18

Statement of Directors’ Responsibilities 21

Independent Auditors Report 22

Statement of Financial Position 23

Statement of Comprehensive Income 24

Statement of Changes in Equity 25

Statement of Cash Flows 26

Notes to the Financial Statements 27

Five Year Summary 54

Ceylon Tea Services PLC / Annual Report 2012/2013 1

For the year ended 31st March

Turnover 7,084,157 5,839,922 21.3%

Shareholders' Funds 7,909,271 7,172,370 10.3%

Per Ordinary Share

Earnings (Rs.) 71.54 84.35 -15.2%

Return on Average Shareholder Funds (%) 18.98 24.32 -22.0%

2 Ceylon Tea Services PLC / Annual Report 2012/2013

Outlook for Tea

The Plight of the Tea Industry

Ceylon Tea Services PLC / Annual Report 2012/2013 3

4 Ceylon Tea Services PLC / Annual Report 2012/2013

Mr. Merrill J. Fernando

Mr. Himendra S. Ranaweera

Mr. Malik J. Fernando

Mr. Dilhan C. Fernando

Ms. Minette Perera

Ceylon Tea Services PLC / Annual Report 2012/2013 5

Mr. Roshan Tissaaratchy

Mr. Rajan Asirwatham

Mr. Gritakumar E. Chitty

6 Ceylon Tea Services PLC / Annual Report 2012/2013

The Board of Directors

Composition of the Board

Responsibilities of the Board

Executive Management Team

Systems and Internal Controls

Relationship with Shareholders

8 Ceylon Tea Services PLC / Annual Report 2012/2013

Report of the Remuneration Committee

Ceylon Tea Services PLC / Annual Report 2012/2013 9

MJF Kids Programme

10 Ceylon Tea Services PLC / Annual Report 2012/2013

The Plantations Programme

Mid-day meal programme in CDCs

School bags for plantation children

MJF Scholarship scheme

Ceylon Tea Services PLC / Annual Report 2012/2013 11

Thoppigala – working to build bridges of peace to connect all communities

MJF CENTRE MORATUWA

12 Ceylon Tea Services PLC / Annual Report 2012/2013

MJF Kids Moratuwa

Rainbow Centre for Children with special needs

Curtiss Centre for Design

Therapy through puppetry

Ceylon Tea Services PLC / Annual Report 2012/2013 13

Dilmah’s Bioregional Initiative

Converting tea waste into fertiliser

14 Ceylon Tea Services PLC / Annual Report 2012/2013

Launch of the Business & Biodiversity Platform