CONTENTS › cmt › upload_report_file › 663_1378460739.pdf · 2016-09-29 · 7.10.1. (a) Non-Executive Directors Two or one third of the total no. of Directors shall be non-executive

CONTENTS Page

Chairman’s Review 3

Board of Directors 4

Corporate Governance 5

Report of the Remuneration Committee 7

Report of the Audit Committee 8

Annual Report of the Board of Directors on 9the affairs of the Company

Report of the Auditors 13

Statement of Comprehensive Income 15

Statement of Financial Position 16

Statement of Changes in Equity 17

Cash Flow Statement 18

Notes to the Financial Statements 19

Five Year Perfomance Summary 55

Shareholders and Investor Information 56

Notice of Meeting 58

Form of Proxy 59

FINANCIAL CALENDAR 2012/2013INTERIM FINANCIAL STATEMENTS1st Quarter ended 30-06-2012 - (unaudited) on 12th August 2012

2nd Quarter ended 30-09-2012 - (unaudited) on 12th November 2012

3rd Quarter ended 31-12-2012 - (unaudited) on 12th February 2013

4th Quarter ended 31-03-2013 - (unaudited) on 29th May 2013

Annual Reports for the year ended 31st March 2013 will be circulated on 5th September 2013.

22nd Annual General Meeting -28th September 2012

23rd Annual General Meeting – 30th September 2013

Blue Diamonds Jewellery Worldwide PLC - Annual Report - 2013 2

NAME OF THE COMPANYBlue Diamonds Jewellery Worldwide PLC

LEGAL FORMA Public Limited Liability Company incorporated in Sri Lanka and obtained BOI status on 07th March 1991 and listed with Colombo Stock Exchange on 31st March 1992

DATE OF INCORPORATION21st November 1990

COMPANY REGISTRATION NUMBERPQ 94

BOARD OF DIRECTORSJ.H.P.RatnayekeLL.B. (Hons),LL.M. (London)Chairman

W.D.J.R.SilvaMBA,FCMA(U.K.), CGMA,LL.B. (London)Managing Director

B.M.A.L.A.FernandoFCMA(U.K.), CGMA,MHRPDeputy Chairman

W.M.R.B.BandaraDirector

S.A.HettiarachchiACMA(U.K.),CGMA,MBA(W.Sydney)Director

REGISTRARS SSP Corporate Services (Pvt)Ltd 101,Inner Flower Road, Colombo 03 Tel : 2573894/4369305 Fax : 2573609 E-Mail : [email protected]

SECRETARIES Paul Ratnayeke Associates59,Gregory’s Road, Colombo 07 Tel : 2697893/2688844-6 Fax : 2688410 E-Mail : [email protected]

REGISTERED OFFICE/FACTORY 49, Ring Road, Phase 1, I.P.Z, Katunayake. Telephone : 2253496,2253497 Fax : 2253498 E-Mail : [email protected]

AUDITORS M/s. KPMG Chartered Accountants 32 A , Sir Mohamed Macan Marker Mawatha, Colombo 03.

LAWYERS R.D.AlgamaAttorney at LawNo 35, Alwis Place, Colombo 03

Paul Ratnayeke AssociatesNo 59,Gregory’s Road,Colombo 07

BANKERS Nations Trust Bank PLCSeylan Bank PLCHatton National Bank PLC

Corporate InformatIon


ChaIrman’s revIew

I am pleased to inform you that the revenue of the Company grew to Rs 83.09 Million from Rs 71.1Million in the previous year and the Gross Profit of the Company has improved from Rs 18.14 Million to Rs 22.2 Million. Unfortunately the Company reported a loss of Rs 26.22 Million for the year which shows that the level of revenue of the Company has to be substantially enhanced and the cost structure of the Company needing to be reorganized.

The Company has embarked on strategies which would allow the Company to increase orders with existing customers and at the same time to secure new customers. New product lines and concepts are being added to the Company which would assist the Company to increase the revenue substantially.

The administrative costs which show a reduction compared to last year (Rs 41.78 million compared to Rs 55.52million) is targeted to be further reduced by implementing an aggressive cost reduction plan. The Company has appointed a new Managing Director and a Chief Executive Officer who have been entrusted with the task of re-vitalizing the Company to achieve sustainable profitability.

The reduction in the cost structure would enable the Company to be more competitive in pricing and be able to attract new customers and orders.

The Company is making every effort to return to sustainable profitability and believe that the next year would be a ground breaking year for the Company.

We take this opportunity to thank all our loyal shareholders who have kept faith in the Company during difficult times. I would like to thank the Board of Directors and the staff of the Company for their support and dedication during a very difficult period of the Company.

Mr. J.H.P. RatnayekeChairman


BoarD of DIreCtorsMr.J.H.P. Ratnayeke LL.B. (Hons), LL.M. (London)Independent, Non Executive Chairman

Mr. Paul Ratnayeke is a Senior Corporate Lawyer who is also the precedent of Paul Ratnayeke Associates, a leading law firm in Sri Lanka which he founded in 1987 handing all areas of law and international legal consultancy work.Mr. Ratnayeke is a Solicitor of England and Wales and an Attorney-at-law of the Supreme Court of Sri Lanka. He holds a bachelors degree in law with honours and has been awarded a Master’s Degree in Law by the University of London.Currently Mr. Ratnayeke holds directorships in several companies including public quoted companies. He has also been elected /appointed as chairman / deputy Chairman to several of these Companies.

Mr.W. D. J. R. Silva MBA, FCMA(U.K.), CGMA, LL.B. (London)Managing Director

Mr. Ruwan Silva is the Chairman /CEO of eChannelling PLC. He is also the Chairman of British American Technologies (Private) Limited (BAT), Prior to setting up British American Technologies, he was the Chief Financial Officer at Sri Lanka Telecom PLC and Chief Financial Officer for Ericsson Algeria and Sri Lanka. Mr. Ruwan Silva has more than nineteen years of experience, cutting across varied industries such as healthcare, electronics, telecommunications, transportation, IT and banking. He has also worked at Ansell, John Keells Holdings PLC and HSBC. Mr. Silva holds a Masters in Business Administration (University of Colombo), a LL.B. degree with Honours (University of London, U.K.) a Fellow Member of the Chartered Institute of Management Accountants, U.K. (FCMA) and a Chartered Global Management Accountant (CGMA).

Mr.B. M. A. L. A. Fernando FCMA(U.K.), CGMA, MHRPIndependent, Non Executive Deputy Chairman

Mr. Aruna Fernando having a wide network base with government and the private sector holds work experience of over 20 years. Mr. Fernando is the Managing Director of Micronet Information Systems (Pvt) Ltd which is the pioneer in the information technology industry. He also serves as the Director of Micronet Global Services and the Sri Lanka State Plantation Corporation.Mr.Aruna Fernando, is a fellow member of the Chartered Institute of Management Accountant (U.K.) and was the Past President of the CIMA Sri Lanka division and was a member of the Governing Council of National Institute of Business Management (NIBM) and has held several positions in different other organizations.

Mr.W.M.R.B.BandaraIndependent, Non Executive Director

Mr. Raveen Bandara, a marketer by profession is presently working as the Project Manager of e-Channelling PLC and counts over 11 years of experience in the healthcare industry. He has also served in a senior position at IMAC international Association of Sri Lanka. Mr. Bandara is a corporate trainer and consultant who specializes in motivation.

Mr.S.A.Hettiarachchi MBA(W.Sydney), ACMA(U.K.), CGMAIndependent, Non Executive Director

Prior to this appointment, from 2008 to April 2013, he was the Chief Financial Officer at Lanka Hospitals Corporation PLC. Mr. Hettiarachchi has over 18 years of managerial and leadership experience at leading corporate institutions in both service sector and manufacturing operations including Ansell Lanka (Private) Limited, Lankabell Limited and the DCSL Group. Mr. Hettiarachchi holds a Master of Business Administration from the University of Western Sydney, Australia and is an Associate Member of the Chartered Institute of Management Accountants, U.K. (ACMA) and a Chartered Global Management Accountant (CGMA).


Corporate GovernanCe

With a commitment to high ethical standards, Blue Diamonds Jewellery Worldwide PLC operates with a governance structure by complying with adequate regulations and guidelines. We ensure integrity, fairness & transparency in reporting statements of our affairs to our shareholders.

The governance structure fully conforms to the best practices of good corporate governance as published jointly by the Institute of Chartered Accountants of Sri Lanka and the Securities and Exchange Commission together with the provisions of the Companies Act No. 07 of 2007 and the Listing Rules of the Colombo Stock Exchange.

The Board of Directors is responsible for the continued appropriate management of the Company while ensuring that it accomplishes its goals. The Board meets regularly to establish, maintain direction and to provide guidance to ensure the Company’s operating and financial performance.

The Board collectively and Directors individually act in accordance with the Laws of the Country, while all members of the Board take collective responsibility for the management, direction and performance of the organisation.

The following table illustrates how the organisation has adhered to the corporate governance listing rules.

Rule No. Subject Requirement Compliance status

Details

7.10.1. (a) Non-Executive Directors

Two or one third of the total no. of Directors shall be non-executive directors whichever is higher.

Complied with. There are five Directors as at the date of the Annual Report. Out of which four directors are non-executive directors.

7.10.2. (a) Independent Directors

Two or one third of the non-executive directors whichever is higher shall be independent.

Complied with. The Board comprises of four independent non-executive directors as at the date of the Annual Report.

7.10.2. (b) Independent Directors

Each non-executive Director should submit a declaration of independence in the prescribed format.

Complied with. All non-executive directors have submitted their declaration of independence in the prescribed format.

7.10.3. (a) Disclosure relating to Directors

Names of independent Directors should be disclosed in the Annual Report.

Complied with. The names of the Independent directors are disclosed on the page 4of the Annual Report.

7.10.3. (b) Disclosure relating to Directors

In the event a director does not qualify as independent as per rules on corporate governance but if the Board is of the opinion that the Director is nevertheless independent, it shall specify the basis of the determination in the Annual Report.

Complied with. The Board has not been required to perform such determination.

7.10.3 (c) Disclosure relating to Directors

A brief resume of each director should be published in the Annual Report including the area of expertise.

Complied with. A complete profile of directors is provided on page 4 of the Annual Report.

7.10.5 Remuneration Committee

A listed company shall have a Remuneration Committee.

Complied with. Please refer page 7 of the Annual Report for more details on the committee and its functions


Corporate GovernanCe (Cont’D)

7.10.5 (a) The composition of Remuneration Committee

The Remuneration Committee shall comprise a minimum of two Independent non-executive Directors or non-executive Directors, a majority of whom shall be Independent whichever is higher.

Complied with. The committee has three members, who are non executive independent Directors.

7.10.6. Audit Committee A listed company shall have an audit committee.

Complied with. The company has an audit committee comprising of three members.

7.10.6. (a)

Composition of Audit Committee

The Audit Committee shall comprise a two independent non-executive Directors, or non-executive Directors, a majority of whom shall be independent whichever is higher.

Complied with. The committee consists of three members who are non executive independent Directors.

The Chairman of the committee is a fellow member of a recognized accounting body.


report of the remUneratIon CommItteeThe Remuneration Committee is a sub-committee of the main board, and which consists of three non-executive independent Directors.

The Committee was established for the purpose of recommending the remuneration of the Board of Directors including Chairman. In addition, review of the remuneration of the Chief Executive Officer and other senior management is done by the remuneration committee

The Committee has acted within the parameters set by its terms of reference.

The decision on matters relating to remuneration of Directors and senior members of the management team are arrived at in consultation with the Chairman where necessary. No director is involved in determining his/her own remuneration.

The Company’s remuneration policy is designed to reward, motivate and retain the Company’s Executive Team, with market competitive remuneration and benefits, to support the continued success and the creation of shareholders value.

The remuneration packages which are linked to the individual performances are aligned with the Company’s short term and long term strategy.The Committee makes every endeavour to maintain remuneration levels that are sufficient to attract and retain directors and members of the Management Team, to manage the Company successfully.

The Directors’ emoluments are disclosed on page 42.

Sgd.B.M.A.L.A.FernandoChairman - Remuneration Committee


report of the aUDIt CommItteeThe Audit Committee is a sub-committee of the main Board, to which consists of three non-executive independent Directors. The Audit Committee has written terms of references, dealing clearly with its authority and duties and is established for the purpose of assisting the Board in fulfilling their oversight responsibilities regarding the integrity of the Financial Statements, risk management, internal control, and compliance with legal and regulatory requirements, review of external auditor’s performance and independence and the internal audit function.

The following activities were carried out by the audit committee during the year ended 31st March 2013.

Compliance with financial Reporting The Company has prepared these Financial Statements for all periods upto and including the year ended 31st March 2012, in accordance with Sri Lanka Accounting Standards, which were in effect upto that date. Following the convergence of Sri Lanka Accounting Standards with the International Financial reporting Standards (IFRS), all existing / new Sri Lanka Accounting Standards were prefixed as SLFRS and LKAS and with effect from the financial periods beginning on or after1st January 2012, it was mandatory for the Company to comply with the requirments of the said new / revised Sri Lanka Accounting Standards. (SLFRS/LKAS).

The adoption of the new accounting framework required amendments to the basis of recognition,mesurement and disclosure of transactions and balances in the Financial Statements of the Company, which have been duly addressed in the Finacial Statements for the year ended 31st March 2013, and the corresponding details for the years ended 31st March 2012 and 2011 have been adjusted accordinghly.

The review includes• Appropriateness and changes in accounting policies.• Significant estimates and judgment made by the management.• Compliance with relevant accounting standards and applicable regulatory requirements.• Adequacy of provision against possible losses.• Issues arising from the internal and external audit.

Compliance with laws & regulationsThe Audit Committee reviewed the reports submitted by the management and auditors on the state of compliance with applicable laws and regulation, and settlement of statutory payments.

The Audit Committee monitors and reviews• The coverage of the annual audit plan• The follow-up action taken on the recommendation of the external auditors.• The internal audit programms and result of the audit process.• Effectiveness of the internal audit function.

External AuditorsThe Audit Committee reviewed the independence and objectivity of the external auditors, Messrs KPMG, Chartered Accountants.

The Committee reviewed the non-audit services and its impact on the independence of external auditors.

The Audit Committee has approved the extension of the period of engagement of external auditors by one year and recommended to the Board their re-appointment.

Meetings of Audit CommitteeFour Audit Committee meetings were held during the year ended 31st March 2013.

ConclusionThe Audit Committee is satisfied that the effectiveness of the organisation structure of the Company and of the implementation of the Company’s accounting policies and operational controls provide reasonable assurance that the affairs of the Company are managed in accordance with company policies, and that the Company assets are properly accounted for and adequately safeguarded.

Sgd. B.M.A.L.A.FernandoChairman – Audit Committee


report of the DIreCtors on the state of affaIrs of the CompanY

The Directors of the Company have pleasure in submitting their Report together with the Audited Financial Statements of the Company for the year ended 31st March 2013.

1. REVIEW OF THE YEARReview of the Company’s business and its performance during the year, with comments on financial results and future strategic developments are contained in the Chairman’s review. (page 3 of the Annual Report)

2. THE PRINCIPAL ACTIVITY The principal activity of the Company is manufacturing and exporting of diamonds studded gold jewellery.

3. FINANCIAL STATEMENTSThe Financial Statements of the Company are given on pages 15 to 54 of the Annual Report.

4. GOING CONCERNThe Directors are satisfied that the Company has adequate resources to continue its operations in the foreseeable future. The Financial Statements of the Company have accordingly been prepared on a going concern basis.

5. AUDITORS REPORTThe Auditors’ Report on the Financial Statements of the Company is given on pages 13 & 14 of the Annual Report.

6. ACCOUNTING POLICIESThe Company has prepared these Financial Statements for all periods upto and including the year ended 31st March 2012, in accordance with Sri Lanka Accounting Standards, which were in effect upto that date. Following the convergence of Sri Lanka Accounting Standards with the International Financial reporting Standards (IFRS), all existing / new Sri Lanka Accounting Standards were prefixed as SLFRS and LKAS and with effect from the financial periods beginning on or after1st January 2012, it was mandatory for the Company to comply with the requirments of the said new / revised Sri Lanka Accounting Standards. (SLFRS/LKAS).

The adoption of the new accounting framework required amendments to the basis of recognition,mesurement and disclosure of transactions and balances in the Financial Statements of the Company, which have been duly addressed in the Finacial Statements for the year ended 31st March 2013, and the corresponding details for the years ended 31st March 2012 and 2011 have been adjusted accordinghly.

7. TAXATIONProvision for taxation has been computed at the rates given in Note 9 to the Financial Statements.

8. DIVIDENDSThe Directors do not recommend a dividend on ordinary shares for the year ended 31st March 2013.

9. BOARD OF DIRECTORSThe Directors of the Company as at 31st March 2013 were as follows;

Mr.J.H.P.Ratnayeke - Chairman (Independent, Non-Executive)

Mr.B.M.A.L.A.Fernando - Deputy Chairman (Independent, Non- Executive)

Mr.W.M.R.B.Bandara - Independent, Non- Executive Director

Mr. B.B.T.A.Perera - Executive Director

Mr. P.B.V.Kumar - Executive Director

Blue Diamonds Jewellery Worldwide PLC - Annual Report - 2013 1 0

report of the DIreCtors on the state of affaIrs of the CompanY (Cont’D)

Appointments to the Board of Directors

Mr. W. D. J. R. Silva was appointed with effect from 16th May 2013.

Mr. S. A. Hettiarachchi was appointed with effect from 16th May 2013.

Resignations from / cessations in the Board of Directors

Mr. K. V. D. D. A. Dias ceased to be a director with effect from 28th September 2012.

Mr. M. M. N. Priyantha ceased to be a director with effect from 28th September 2012.

Mr. W. Ravishankar resigned with effect from 6thFebruary 2013.

Mr. K. L. Dias resigned with effect from 12th February 2013.

Mr. B. B. T. A. Perera resigned with effect from 16th May 2013.

Mr. P. B. V. Kumar resigned with effect from 16th May 2013.

Re-election

Mr. B.M.A.L.A.Fernando and Mr. W.M.R.B. Bandara have been re-elected on 28th September 2012 (on the same date) being one-third of the total number of Directors excluding the Chairman and the Managing Director, therefore Mr. W.M.R.B. Bandara will come up for election in terms of Article 86 of the Articles of Association of the Company.

Mr. W. D. J. R. Silva and Mr. S. A. Hettiarachchi will come up for election in terms of Article 92 of the Articles of Association of the Company.

Directors Interest In Contracts

There are no other interests in contract or proposed contracts with the Company by the Directors other than those specified in Note No. 28.1 to the Financial Statements.

10. COMPANY SECRETARIESMessrs. P. R. Secretarial Services (Private) Limited was appointed as Secretaries to the Company with effect from 31st December 2012 while Messrs. S. S. P. Corporate Services (Private) Limited resigned as Secretaries to the Company with effect from 31st December 2012. Further thereafter the mentioned Messrs. S. S. P. Corporate Services (Private) Limited will continue the functions of the Registrar.

11. CORPORATE GOVERNANCEThe Company has put in place systems and procedures to ensure the implementation of sound corporate governance principles. An overview of such practices adopted with the Company is given on page 05 & 06 of the Annual Report.

The Board of Directors confirms that the Company is compliant with Rule 7.10 of the Listing Rules of Colombo Stock Exchange.

An Audit Committee and a Remuneration Committee function as Board Sub Committees with Directors who possess the requisite qualifications and experience. The composition of the said committees are as follows:

Audit Committee

Mr. B.M.A.L.A. Fernando

Mr. W.M.R.B. Bandara

Mr. S.A. Hettiarachchi

The Report of the Audit Committee is given on page 8 of the Annual Report.


report of the DIreCtors on the state of affaIrs of the CompanY(Cont’D)

Remuneration Committee Mr. B.M.A.L.A. Fernando

Mr. W.M.R.B. Bandara

Mr. S.A. Hettiarachchi

The Report of the Remuneration Committee is given on page 7 of the Annual Report.

12. CAPITAL EXPENDITURE There are no material capital commitments that would require disclosures in the Financial Statements.

13. PROPERTY, PLANT AND EQUIPMENTThe details of the property, plant and equipment are given in Note No. 11 of the Financial Statements.

14. DONATIONSThe Company has not made any donations during the year.

15. STATED CAPITALThe stated capital of the Company as at 31st March 2013 is Rs.208,401,543/- representing 103,300,891 ordinary voting shares and153,369,800 non-voting shares.

16. SHAREHOLDERSAn analysis of the distribution of the ordinary shareholders is given on pages 56 & 57 of the Annual Report.

The list of 20 largest ordinary shareholders of the Company is given on pages 56 & 57 of the Annual Report.

17. DIRECTOR’S HOLDINGS OF SECURITIES OF THE COMPANY

As at 31st March Voting No. of shares Non-voting No. of shares

2013 2012 2013 2012

Mr.J.H.P.Ratnayeke Nil Nil Nil Nil

Mr.B.M.A.L.A.Fernando Nil Nil Nil Nil

Mr.W.M.R.B.Bandara Nil Nil Nil Nil

Mr.W.D.J.R.Silva 1 1,537,100 Nil Nil

Mr.S.A.Hettiarachchi Nil Nil Nil Nil

18. DIRECTORS’ RESPONSIBILITY FOR FINANCIAL REPORTINGThe Directors are responsible for the preparation of the Financial Statements of the Company to reflect a true and fair view of its state of affairs. The Directors are of the view that these Financial Statements have been prepared in conformity with the Sri Lanka Accounting Standards and the Companies Act No. 07 of 2007. The Directors are accordingly satisfied that the Financial Statements presented herein give a true and fair view of the state of affairs of the Company as at 31st March 2013 and the loss for the year then ended.

19. STATUTORY PAYMENTSThe Directors are satisfied that to the best of their knowledge and belief, all statutory payments due to the government and to the employees of the Company have been made up to date.

20. EVENTS AFTER THE REPORTING DATENo events have occurred after the reporting date which would require adjustments to or disclosure in the Financial Statements, other than those given in Note No. 30 of the Financial Statements.


21. AUDITORSThe accounts for the period under review have been audited by Messrs. KPMG, Chartered Accountants. A sum of Rs. 780,500/- was paid as professional fee for the year under review. Further a sum of Rs.150,000/-was paid for non-audit related work such as agreed upon engagements. Based on the declaration made by Messrs. KPMG and as far as the Directors are aware, the Auditors do not have any relationship or interest other than statutory auditor.

The Directors recommend the re-appointment of Messrs. KPMG as the Auditors of the Company for the ensuing year.

22. NOTICE OF MEETINGNotice of meeting relating to the 23rd Annual General Meeting is given on page 58 of the Annual Report.

For and on behalf of the Board

Director Director

SECRETARIES P. R. SECRETARIAL SERVICES (PRIVATE) LIMITED Colombo 22nd August 2013

report of the DIreCtors on the state of affaIrs of the CompanY (Cont’D)


report of the aUDItors

INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS OF BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

Report on the Financial Statements

We have audited the accompanying financial statements of Blue Diamonds Jewellery Worldwide PLC (the “Company”) which comprise the statements of financial position as at 31st March 2013, and statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory notes as set out on page 15 to 54 of this Annual Report.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Sri Lanka Accounting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Sri Lanka Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

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 ended 31st March 2013 and the financial statements give a true and fair view of the financial position of the Company as at 31st March 2013 and of its financial performance and its cash flow for the year then ended in accordance with Sri Lanka Accounting Standards.

Emphasis of matter

Without qualifying our opinion, we draw attention to Notes 29 and 33 to these financial statements.

•Asdescribed inNote29 to thesefinancial statements, theCompanyobtaineda credit facilityofUS$2,750,000 from Seylan Bank PLC in previous years by pledging inventory of Jewellery as security. During the year ended 31st March 2005, the Directors resolved to write back the balance outstanding to the said bank in respect of the credit facility on the basis that the Company handed over jewellery in lieu of the said credit facility as full and final settlement of the balance due to the bank and there is no further liability due on the said credit facility. Accordingly, a net amount of Rs. 203.5 Mn was written back to income statement during that financial year.


report of the aUDItors (Cont’D.)However,thesaidbankbyletterdated4thDecember2009demandedasumofUS$4,320,906togetherwithinterest being the total outstanding sum due on the said facilities from the Company.

The Company and Seylan Bank PLC agreed to appoint Arbitrator in accordance with the agreement signed by the Company and the Bank on 21st November 2003 in respect of the sale of jewellery that was acquired by Seylan Bank in 1999 in lieu of the credit facilities obtained. The Arbitration process has commenced with Seylan Bank PLC and it is at the trial stage.

The ultimate outcome of the arbitration process cannot currently be determined and hence the effect on the financial statements is uncertain. Accordingly, no provision for any liability that may result has been made in these financial statements.

•AsexplainedinNote33tothesefinancialstatements,theCompanyhasincurredalossofRs.26,218,206/-during the year ended 31st March 2013 and as at that date the Company’s accumulated losses amounted to Rs. 59,622,476/-. Although this condition indicates the existence of uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern, considering steps and the future plans as described in Note 33 to these financial statements, the Board is confident of that the Company will continue as a going concern. Accordingly, no adjustments have been made in these financial statements.

Report on Other Legal and Regulatory Requirements

These financial statements also comply with the requirements of Section 151(2) of the Companies Act No. 07 of 2007.

CHARTERED ACCOUNTANTS

Colombo

22nd August 2013


statement of ComprehensIve InCome 2013 2012 For the year ended 31st March Note Rs Rs

Revenue 5 83,090,610 71,157,686 Cost of sales (60,870,608) (53,016,710) Gross profit 22,220,002 18,140,976 Other income 6 895,139 43,475,994

Selling and distribution expenses (13,372,629) (13,857,582)

Administrative expenses (41,784,939) (55,519,716)

Loss from operations 7 (32,042,427) (7,760,327)

Net finance income 8 6,048,033 22,014,835

Share of profit of associate (net of tax) 14 310,516 367,896

(Loss)/ profit before income tax (25,683,878) 14,622,404

Income tax expense 9 (534,328) (2,701,781)

(Loss)/ profit for the year (26,218,206) 11,920,623 Other comprehensive income Net changes in the fair value of financial assets available-for-sale 15 (76,078) (55,061)

Total comprehensive income for the year (26,294,284) 11,865,562

Basic (loss)/ earnings per share 10 (0.10) 0.05

The Notes to the Financial Statements from pages 19 to 54 form an integral part of these Financial Statements. Figures in the brackets indicate deductions.


Note 2013 2012 01 Apr 2011As at 31st March Rs Rs RsASSETSNon-current assets Property, plant and equipment 11 44,157,151 45,524,547 32,929,585 Leasehold property 12 2,598,146 2,257,110 2,284,227 Intangible assets 13 625,094 60,416 160,416 Investment in associate 14 6,608,140 6,297,624 551,578 Financial assets available-for-sale 15 139,350 105,429 160,490 Loan receivable from associate 18 4,414,876 4,600,728 4,900,572 Total non-current assets 58,542,757 58,845,854 40,986,868

Current assets Inventories 16 141,363,845 170,716,035 139,450,507 Trade receivables 17 20,322,938 15,187,212 21,918,507 Related party receivable 18 524,486 581,922 4,320,483 Other receivables 19 3,077,498 6,256,018 8,324,382 Cash and cash equivalents 20 96,086,580 112,662,548 176,342,252 Total current assets 261,375,347 305,403,735 350,356,131 Total assets 319,918,104 364,249,589 391,342,999

EQUITY AND LIABILITIES EquityStated capital 21 208,401,543 1,064,853,543 1,064,853,543 General reserves 135,000,000 135,000,000 135,000,000 Revaluation reserve 17,530,951 17,530,951 17,530,951 Financial assets available-for-sale reserve (155,149) (79,071) (24,010)Accumulated losses (59,622,476) (889,856,270) (901,776,893)Total equity 301,154,869 327,449,153 315,583,591

Non-current liabilities Employee benefits 22 5,100,875 8,005,634 9,226,759 Debenture issued 23 - - 1,391,667 Total non-current liabilities 5,100,875 8,005,634 10,618,426

Current liabilities Trade payables 3,878,836 3,989,260 3,228,879 Amount due to Ceylinco Investment Company Limited 24 - - 19,376,991 Interest bearing loans and borrowings 25 - - 38,868,610 Current tax payable 533,728 2,701,181 9,698 Related party payables 26 175,693 - - Other payables and accruals 27 9,074,038 22,104,298 3,648,623 Bank overdraft 20 65 63 8,181 Total current liabilities 13,662,360 28,794,802 65,140,982 Total liabilities 18,763,235 36,800,436 75,759,408 Total equity and liabilities 319,918,104 364,249,589 391,342,999

Net assets per share

1.17 1.28 1.48

The Notes to the Financial Statements from pages 19 to 54 form an integral part of these Financial Statements. These Financial Statements have been prepared in compliance with the requirements of Companies Act No.7 of 2007.

B.B.T.A. Perera(Chief Accountant)

The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the board:

B.M.A.L.A. Fernando W.M.R.B.Bandara(Deputy Chairman)

(Director)

22nd August 2013 Colombo

statement of fInanCIaL posItIon


For the year ended 31st March 2013 Stated Capital Revaluation Reserve

General Reserve Financial Assets Available-for-sale Reserve

Accumulated Losses

Total Equity

Rs Rs Rs Rs Rs Rs

Balance as at 31st March 2011 1,064,853,543 - 135,000,000 - (902,693,191) 297,160,352

Adjustmenst on transition to LKAS/SLFRS - 17,530,951 - (24,010) 916,298 18,423,239

Balance as at 01st April 2011 1,064,853,543 17,530,951 135,000,000 (24,010) (901,776,893) 315,583,591

Profit for the year - - - - 11,920,623 11,920,623

Other comprehensive income for the year - - - (55,061) - (55,061)

Total comprehensive income for the year - - - (55,061) 11,920,623 11,865,562

Balance as at 31st March 2012 1,064,853,543 17,530,951 135,000,000 (79,071) (889,856,270) 327,449,153

Balance as at 01st April 2012 1,064,853,543 17,530,951 135,000,000 (79,071) (889,856,270) 327,449,153

Loss for the year - - - - (26,218,206) (26,218,206)

Other comprehensive income for the year - - - (76,078) - (76,078)

Total comprehensive income for the year - - - (76,078)

(26,218,206) (26,294,284)

Transactions with equity owners of the Company, recognised directly in equity

Capital reduction during the year (Note 21) (856,452,000) - - - 856,452,000 -

Balance as at 31st March 2013 208,401,543 17,530,951 135,000,000 (155,149) (59,622,476) 301,154,869

The Notes to the Financial Statements from pages 19 to 54 form an integral part of these Financial Statements. Figures in the brackets indicate deductions. Note A: The General Reserve was created in 1994/95 by transfering Rs.135 Mn from retained earnings as a reserve against doubtful debts. Note B : The Available for Sale Reserve includes the net gain/(loss) on changes in fair value of Investments in equity shares classified as Available-for-Sale.

statement of ChanGes In eQUItY


Cash fLow statement

For the year ended 31st March 2013 2012 Rs Rs

Cash flow from operating activitiesProfit/(loss) before income tax (25,683,878) 14,622,404

Adjustments for:Creditors not payable written back - (43,245,601)Depreciation on Property, plant & equipment 3,390,957 2,896,192 Amortization of intangible assets 228,641 100,000 Amortization of lease hold land 31,814 27,117 Provision/ (reversal of provision) for bad & doubtful debts (539,010) 3,788,985Reversal of provision of slow moving inventories (4,697,045) (9,947,816)Provision for retiring gratuity 463,506 571,336 Unrealised exchange (Gain)/loss (539,710) (3,860,557)FV adjustment of term loan granted to Associate (63,932) (68,778)Share of profit of associate (net of tax) (310,516) (367,896)Reversal of excess interest accrued on redeemed debentures - (66,667)Interest income (8,166,859) (12,772,454)Operating loss before working capital changes (35,886,032) (48,323,735)

(Increase)/ Decrease in trade & other receivables (960,204) 8,871,231 Decrease / (Increase) in inventories 34,049,232 (25,385,712)Increase/ (Decrease) in trade & other payables (13,058,961) 19,216,057 Increase in related party payable 175,693 - (Increase)/ Decrease in related party receivables (33,376) 3,775,492 Net cash used in operations (15,713,648) (41,846,667)

Retiring gratuity paid (3,368,265) (1,792,461)Income taxes paid (2,701,781) (10,298)Net cash flow used in operating activities (21,783,694) (43,649,426)

Cash flow from investing activitiesInterest received 8,166,859 12,841,232 Purchase and construction of property, plant & equipment (2,023,560) (15,491,154)Payment for leasehold right against land (372,850) - Acquisition of intangible assets (793,319) - Loan recovery 340,595 331,691 Investment in unquoted shares (110,000) - Investment in Associate - (1,378,927)Net cash flow generated from / (used in) investing activities 5,207,725 (3,697,160)

Cash flow from financing activitiesRedeem of debentures - (1,325,000)Term loan repayment - (15,000,000)Net cash used in financing activities - (16,325,000)

Net decrease in cash and cash equivalents (16,575,969) (63,671,586)Cash & cash equivalents at the beginning of the year 112,662,484 176,334,070 Cash & cash equivalents at the end of the year (Note 20) 96,086,515 112,662,484

The Notes to the Financial Statements from pages 19 to 54 form an integral part of these Financial Statements.


1. REPORTING ENTITY1.1 Domicile and legal formBlue Diamonds Jewellery Worldwide PLC (“the Company”) is a public limited liability company incorporated and domiciled in Sri Lanka on 21st November 1990. The registered office of the Company and the principal place of business is situated at No.49, Ring Road, Phase 1, IPZ, Katunayake. The ordinary shares of the Company are listed in the Colombo Stock Exchange.

The Company has an associate Fior Drissage Jewellers Ltd.

Ultimate parentThere is no identifiable ultimate parent for the Company.

1.2 Principal activities and nature of operationsThe principal activities of the Company are manufacturing and exporting of diamond studded gold jewellery.

There were no significant changes in the nature of the principal activities of the Company during the financial year under review.

1.3 Number of employeesThe number of employees of the Company as at 31st March 2013 was 64 (2012 – 59)

1.4 Date of authorization for issue The Financial Statements of the Company for the year ended 31st March 2013 were authorised for issue in accordance with a resolution of the Board of Directors on 22nd August 2013.

2. BASIS OF PREPARATION2.1 Statement of complianceThe Financial Statements of the Company, which comprise the Statement of Financial Position, Statement of Comprehensive Income, Changes in Equity and Cash Flow Statement, together with the notes, (the “Financial Statements”) of the Company as at 31st March 2013 and for the year then ended have been prepared in accordance with new Sri Lanka Accounting Standards (SLAS) prefixed both SLFRS (corresponding to IFRS) and LKAS (corresponding to IAS), promulgated by the Institute of Chartered Accountants of Sri Lanka and complies with the requirements of the Companies Act No 07 of 2007.

These are the Company’s first Financial Statements prepared in accordance with Sri Lanka Accounting Standards prefixed SLFRS and LKAS and SLFRS 01 First-time Adoption of Sri Lanka Accounting Standards has been applied.

An explanation of how the transition to new SLAS’s has affected the reported financial position, financial performance and cash flows of the Company is provided in Note 31.

2.2 Basis of measurement The Financial Statements have been prepared on the historical cost basis and applied consistently which no adjustments being made for inflationary factors affecting the Financial Statements, except for the following material items in the Statement of Financial Position:

• Available for sale financial assets are measured at fair value;

• Land and building are measured at revalued amounts; and

• Liability for employee benefits is recognized as the present value of the defined benefit obligation plus unrecognized actuarial gains, less unrecognized past service cost and unrecognized actuarial losses.

2.3 Comparative figuresWhere necessary, comparative figures have been rearranged to conform with the current year’s presentation.

2.4 Functional and presentation currencyAll values presented in the Financial Statements are in Sri Lankan Rupees (Rs.) unless otherwise indicated.

notes to the fInanCIaL statements


2.5 Use of estimates and judgmentsThe preparation of these Financial Statements in conformity with SLAS’s requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the Financial Statements is included in the following notes:

• Current taxation (Note 3.2 (a))

• Deferred taxation and utilization of tax losses (Note 3.2 (b))

• Measurement of Employee benefits (Note 3.11)

• Provisions and contingencies (Note 3.13 and 3.14)

• Going concernThe management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Company’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on a going concern basis.

2.6 Materiality and aggregationEach material class of similar items is presented separately. Items of dissimilar nature or function are presented separately unless they are immaterial.

3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements and in preparing the opening SLAS Statement of Financial Position as at 01 April 2011 for the purposes of the transition to new SLASs, unless otherwise indicated. The accounting policies have been applied consistently by the Company.

3.1 Foreign currency translationTransactions in foreign currencies are translated to the functional currency at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date.

The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available for- sale equity instruments, which are recognised in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

3.2 Income tax expenseIncome tax expenses comprise of current tax expenses recognized in the Statement of Comprehensive Income.

(a) Current taxThe Company’s liability to taxation has been computed in accordance with the provisions of the Inland Revenue Act No 10 of 2006 and amendments thereto.

The Company’s export income from gold, gems or jewellery is exempt from income tax as per Section 13(i) of the Inland Revenue Act No.10 of 2006.



(b) Deferred taxDeferred tax is provided on the balance sheet liability method for all temporary differences as at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts of assets and liabilities for financial reporting purposes. The balance in the deferred taxation account represents income tax applicable to the difference between the written down values for tax purpose of the assets on which tax depreciation has been claimed and the net book value of such asset, offset by the provision for employee benefit which is deductible for tax purpose only on payment.

Deferred tax assets, including those related to temporary tax effect of income tax losses and credits available to be carried forward are recognized only to the extent that it is probable that future taxable profit will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

3.3 Events occurring after the reporting dateThe materiality of the events occurring after the reporting date have been considered and appropriate adjustments to or disclosure have been made in the Financial Statements where necessary.

ASSETS AND BASES OF VALUATIONAssets classified as current assets on the Statement of Financial Position are cash and bank balances and those which are expected to be realized in cash during the normal operating cycle or within one year from the reporting date whichever is shorter. Assets other than the current assets are those, which the Company intends to hold beyond a period of one year from the reporting date.

3.4 Property, plant and equipmenta) Cost and valuationAn item of Property, Plant & Equipment that qualifies for recognition as an asset is initially measured at its cost.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, 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. Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment.

Cost modelThe Company applies the Cost Model to all Property, Plant & Equipment except buildings and records at cost of purchase together with any incidental expenses thereon, less accumulated depreciation and any accumulated impairment losses.

Revaluation modelThe Company applies the Revaluation Model for the entire class of Buildings for measurement after initial recognition. Such properties are carried at revalued amounts, being their fair value at the date of revaluation, less any subsequent accumulated depreciation on buildings and any accumulated impairment losses charged subsequent to the date of valuation. Building of the Company are revalued every three years or more frequently if the fair values are substantially different from their carrying amounts to ensure that the carrying amounts do not do not differ from the fair values at the Reporting date.

On revaluation of an asset, any increase in the carrying amount is recognized in Other Comprehensive Income and presented in Revaluation Reserve in equity or used to reverse a previous loss on revaluation of the same asset, which was charged to the Statement of Comprehensive Income. In this circumstance, the increase is recognised as income only to the extent of the previous write down in value. Any decrease in the carrying amount is recognised as an expense in the Statement of Comprehensive Income or charged in Other Comprehensive Income and presented in Revaluation Reserve in equity only to the extent of any credit balance existing in the Revaluation Reserve in respect of that asset. Any balance remaining in the revaluation reserve in respect of an asset, is transferred directly to Retained Earnings on retirement or disposal of the asset.

b) Derecognition Items of property, plant and equipment are derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or losses rising on de-recognition of the asset is included in the Statement of Comprehensive Income the year the asset is derecognized.



c) Change in accounting policy The Company had been applying cost model for freehold buildings upto the year ended 31 March 2012. The Company changed it’s policy to revaluation model on transition to LKAS/SLFRSs from 1 April 2011, which was the date of transition. As explained in LKAS 8 “Accounting policies, Change in Accounting estimate and errors”, the policy change has to be applied prospectively from the transition date.

d) Subsequent costExpenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately, including major inspection and overhaul costs, is capitalized. Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of property, plant and equipment. All other expenditure is recognized in the Statement of Comprehensive Income as an expense as incurred.

e) DepreciationDepreciation is charged to the Statement of Comprehensive Income on a straight-line basis over the estimated useful lives of items of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives for the current and comparative periods are as follows.

Plant & Machinery 20 years

Buildings 22, 27 and 29 years (Based on the valuers recommendation)

Furniture & Fittings 4 years

Equipment 4 years

Motor Vehicles 4 years

Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) and the date that the asset is derecognized.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Depreciation of an asset begins when it is available for use whereas depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized.

f) Impairment of property, plant and equipment

The carrying value of property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying value exceed the estimated recoverable amount the assets are written down to their recoverable amount. Impairment losses are recognized in the Statement of Comprehensive Income unless it reverses a previous revaluation surplus for the same asset.

3.5 Leasehold property Leasehold property comprises of land use right and stated at cost.

The lease hold rights under operating leases are charged to the in Statement of Comprehensive Income on a straight- line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

The cost of improvements to or on leased property is capitalized, and depreciated over the unexpired period of the lease or the estimated useful lives of improvements, whichever is shorter.

Lease hold land is amortized over the lease period of 99 years and 50 years.

3.6 Leased assets Finance leases Leased in terms of which the Company assumes substantially all of the risks and rewards of ownership are



classified as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to property, plant and equipment.

Operating leases Other leases are operating leases and are not recognized in the Company’s Statement of Financial Position.

3.7 Intangible AssetsAn intangible asset is an identifiable non monitory asset without physical substance held for use in the production or supply goods or other services, rental to others or for administrative purposes.

Basis of recognition An intangible asset is initially recognized at cost, if it is probable that future economic benefit will flow to the enterprise, and the cost of the asset can be measured reliably. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

Computer software All computer software costs incurred, licensed for use by the Company, which are not integrally related to associated hardware, which can be clearly identified, reliably measured and it’s probable that they will lead to future economic benefits, are included in the Balance Sheet under the category intangible assets and carried at cost less accumulated amortization and any accumulated impairment losses.

Amortization Intangible assets with finite lives are amortized over the estimated useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangible assets are amortized on a straight line basis in the Statement of Comprehencive Income from the date on which the asset was available for use, over the best estimate of its useful life. The estimated useful life of software is 4 years. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at each financial year-end.

Derecognition An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal.

3.8 Investments in associatesAssociates are those entities in which the Company has significant influence, but not control, over the financial and operating activities.

Associates are accounted for using the equity method (equity accounted investees) and are initially recognized at cost. The cost of the investment includes transaction costs.

The Financial Statements include the Company’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Company, from the date that significant influence commences until the date that significant influence ceases.

When the Company’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on behalf of the investee. Associate Companies of the Company which have been accounted for under the equity method of accounting are disclosed under Notes to these Financial Statements.

The Company’s Associate Company has a common financial year end which ends on 31st March.

3.9 Inventories Inventories are valued at lower of cost or Net Realizable Value, after making due allowance for obsolete and slow moving items. Net Realizable Value is the price at which inventories can be sold in the normal course of business after allowing for cost of realization and / or cost of conversion from their existing state to saleable condition.

The cost of each category of inventories is determined as follow:

• All inventory items except Finished Products, Work-in-Progress (WIP) and Gold Frames - WIP



are stated at weighted average cost and include expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.

• Finished Products and WIP based on the standard costing which included all direct expenditure and production overheads.

• Gold, and Gold frames - WIP stock are valued based on cost or net realizable value whichever is lower.

• The Net Realizable Value (NRV) of inventories is determined through comparison of cost with international market values of metals and stones, Valuation from a certified valuer and use management assessments;

The following factors are considered in determining NRV by management:

• Determination of the raw material costs of products for finished goods;

• The inventory movements and future use. (consumable stocks/gemstones);

• The market patterns(based on actual event taken place);

• The process losses; and

• The cost of disposing efforts (commissions cost of trade fairs etc).

When NRV cannot be determined a provision will be determined, based on the past data and historical events.

3.10 Financial instruments a) Non-derivative financial assetsThe Company initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Company has the following non-derivative financial assets: available for sale and loans and receivables.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivables comprise trade and other receivables, including service concession receivables.

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Companies cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are designated as available for-sale and that are not classified in any of the previous categories. The Company’s investments in equity securities and certain debt securities are classified as available-for-sale financial assets.

Available for sale financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, are recognised in other comprehensive income and presented within equity in the fair value reserve. When an investment is derecognised,



the cumulative gain or loss in Other Comprehensive Income is transferred to profit or loss.

3.11 Impairment of assets 3.11.1 Non derivative financial assets A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

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

Financial assets measured at amortized cost The Company considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment the Company uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognized through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Available for sale financial assets Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised in Other Comprehensive Income, and presented in the fair value reserve in equity, to profit or loss. The cumulative loss that is removed from Other Comprehensive Income and recognised in profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised in profit or loss. Changes in impairment provisions attributable to time value are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in Other Comprehensive income.

3.11.2 Non-financial assetsThe carrying amounts of the Company’s non-financial assets inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets.

The Company’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.



An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

LIABILITIES AND PROVISIONSLiabilities classified as Current Liabilities on the Statement of financial position are those obligations payable on demand or within one year from the Statement of financial Position. Items classified as non current liabilities are those obligations, which expire beyond a period of one year from the Statement of Financial Position date.

All known liabilities have been accounted for in preparing the Financial Statements. Provision and liabilities are recognized when the Company has a legal or constructive obligation as a result of past events and it is probable that an outflow of economic benefits will be required to settle the obligation.

3.12 Employee benefits 3.12.1 Defined contribution plan - Employees’ Provident Fund & Employees’ Trust FundA defined contribution plan is a post- employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company contributes 12% and 3% of gross emoluments of employees as Provident Fund and Trust Fund contribution respectively.

3.12.2 Defined benefit plans – Retirement gratuityA defined benefit plan is a post-employment benefit plan other than a defined contribution plan.

As required by the Sri Lanka Accounting Standards 19 - Employee Benefits (LKAS 19), the Company applies the actuarial valuation method to contribute for Retirement Gratuity based on Projected Unit Credit method as recommended by LKAS 19.

However, under the Payment of Gratuity Act No. 12 of 1983, the liability to an employee arises only on completion of 5 years of continued service.

The liability is not externally funded.

Actuarial gains and losses All actuarial gains or losses are recognized immediately in profit or loss applying the faster recognition approach.

3.12.3 Short term benefits Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided.

3.13 Non derivative financial liabilities The Company initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Company has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.



3.14 Provisions A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

3.15 Contingencies and capital commitments All material Capital Commitments and Contingent Liabilities of the Company are disclosed in the respective notes to the Financial Statements.

STATEMENT OF COMPREHENSIVE INCOME3.16 Revenue Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and that 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 and sales taxes.

The following specific criteria are used for the purpose of recognition of revenue.

Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates.

Revenue is recognized when significant risks and rewards of ownership have been transferred to the customers.

Dividend income Dividend income is recognized in profit or loss on the date that the Group’s right to receive payment is established.

Other income Other income is recognized on an accrual basis.

Net gains and losses of a revenue nature on the disposal of property, plant and equipment and other noncurrent assets including investments have been accounted for in the assets.

3.17 Expenditure recognition Operating expensesAll expenditure incurred in the running of the business and in maintaining the property, plant and equipment in a state of efficiency has been charged to the Statement of Comprehensive Income in arriving at the profit or loss for the year.

Finance income and expenseInterest income and expenses are recognised in profit or loss using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash receipts or payments through the expected life of the financial asset or liabilities (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liabilities. When calculating the effective interest rate, the Company estimates future cash flows considering all contractual terms of the financial instrument, but not future credit losses.

The calculation of the effective interest rate includes all transaction costs and fees and points paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or liability.

Borrowing costAll borrowing costs are recognised as an expense in the period in which they are incurred except those that are directly attributable to the construction or development of property, plant and equipment which are capitalized as a part of the cost of that asset during the period of construction or development.

Lease paymentsPayments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.



Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

3.18 Segment reporting An operating segment is a component of the Company 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 Company’s other components. All operating segments’ operating results are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

There are no distinguishable components to be identified as segments for the Company.

3.19 Related party disclosureDisclosures has been made in respect of the transactions in which one party has the ability to control or exercise significant influence over the financial and operating policies/ decisions of the other, irrespective of whether a price is charged.

3.20 Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares.

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

3.21 Cash flow statement The Cash Flow Statement has been prepared using the Indirect Method of preparing Cash Flows in accordance with the Sri Lanka Accounting Standard (LKAS) 7, Cash Flow Statements.

Cash and cash equivalents comprise short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. The cash and cash equivalents include cash in-hand, balances with banks and short term deposits with banks.

For cash flow purposes, cash and cash equivalents are presented net of bank overdrafts.

4. NEW ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE AS AT BALANCE SHEET DATEThe Institute of Chartered Accountants of Sri Lanka has issued the following new Sri Lanka Accounting Standards which will become applicable for financial periods beginning on or after 1st January 2014/ 2015.

Accordingly, these Standards have not been applied in preparing these Financial Statements.

• Sri Lanka Accounting Standards –SLFRS 10 “Consolidated Financial Statements”

The objective of this SLFRS is to establish principles for the presentation and preparation of consolidated Financial statements when an entity controls one or more other entities.

SLFRS 10 will become effective for the Company from 1 April 2014. This SLFRS will supersede the requirements relating to consolidated Financial Statements in LKAS 27 “Consoliadated and Separate Financial Statements”

• Sri Lanka Accounting Standards –SLFRS 11 “Joint Arrangements”

The objective of this SLFRS is to establish principles for financial reporting by entities that have an interest in arrangements that are controlled jointly (ie joint arrangements).

SLFRS 11 will become effective for the Company from 1 April 2014. This SLFRS will supersede the requirements relating to consolidated Financial Statement in LKAS 31 ‘‘Interests in Joint Ventures”



• Sri Lanka Accounting Standard-SLFRS 12 ”Disclosure of Interests in Other Entities”

SLFRS 10 will become effective for the Company from 1 April 2014

• Sri Lanka Accounting Standard - SLFRS 13, “Fair Value Measurement”

This SLFRS defines fair value, sets out in a single SLFRS a framework for measuring fair value; and requires disclosures about fair value measurements.

This SLFRS will become effective for the Company from 1 April 2014. This SLFRS shall be applied prospectively as of the beginning of the annual period in which it is initially applied. The disclosure requirements of this SLFRS need not be applied in comparative information provided for periods before initial application of this SLFRS.

• Sri Lanka Accounting Standard – SLFRS 9 “Financial Instruments”

The objective of this SLFRS is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of Financial Statements for their assessment of the amounts, timing and uncertainty of an entity’s future cash flows.

An entity shall apply this SLFRS to all items within the scope of LKAS 39 Financial Instruments: Recognition and Measurement.

This SLFRS will become effective for the Company from 1 April 2015.



2013 2012Rs Rs

5. REVENUEExport sales 83,206,894 65,990,736 Local sales 218,972 7,135,892

83,425,866 73,126,628 Less: Sales return (335,256) (1,968,942)Net sales 83,090,610 71,157,686 Total value of export sales (Inclusive of raw materials) - Note 5.1 148,528,182 154,154,163

5.1 The Company receives the raw materials from most of their customers. Therefore, the Company charges a margin only on labour cost and does not consider the cost of raw material for their product costing and pricing. The said margins are reported under export sales. Accordingly no revenue is recognized. Such export sales are not included in the export revenue reported in Note 5.

6. OTHER INCOMESundry income (Note 6.3) 717,220 85,850 Royalty income (Note 6.1) 177,919 144,543 Amount payable to Creditors written back (Note 6.2) - 43,245,601

895,139 43,475,994

6.1 The Company has entered into an agreement with its Associate, Fior Drissage Jewellers Ltd, on 24th June 2011, to receive a royalty fee for providing technical knowledge to manufacture of jewellery.

6.2 Amount payable to creditors written back The Board of Directors had decided to write back long outstanding amount payable to the following companies to the income statement during the year ended 31 March 2012 . The details are as follow:

Ceylinco Investment Company Limited (Note 24) - 19,376,991The Finance Company PLC (Note 25) - 23,868,610

- 43,245,601

Based on the internal assessmenet carried out by the Board of Directors during the year ended 31 March 2013, no adjustments were required for the above mentioned write backs.

6.3 The Company had sold the sand in the factory during the year, which had not been done in previous year.

7. LOSS FROM OPERATIONS Loss from operations is stated after charging/(reversing) expenses including the following: Auditors’ remuneration - Audit fee 780,500 700,000 - Non audit fee 150,000 200,000 Depreciation and amortization 3,651,412 3,023,310 Provision / (reversal) of provision for doubtful debts (539,010) 3,788,985 Personal cost (Note 7.1) 31,419,931 39,386,437 Reversal of slow moving inventory provision (4,697,044) (9,947,816)Registrars and secretarial fees 597,932 476,286 Legal fees 2,876,548 16,013,112

7.1 Personal cost

Salaries and wages 27,602,833 35,863,225 Defined contribution plan cost - EPF & ETF 3,353,592 2,951,876 Defined benefit plan cost - Retiring gratuity 463,506 571,336

31,419,931 39,386,437

notes to the fInanCIaL statementsFor the year ended 31st March


For the year ended 31st March 2013 2012 Rs Rs8. NET FINANCE INCOME

Finance incomeInterest on call / fixed deposits 7,461,831 7,425,415 Interest on repo - 4,595,409 Interest on term loan 705,028 751,629 Net gain on translation of foreign currency - 9,175,715 Reversal of excess interest accrued on redeemed debentures - 66,667 Total finance income 8,166,859 22,014,835

Finance expensesNet loss on translation of foreign currency (2,118,826) - Total finance expenses (2,118,826) -

Net finance Income 6,048,033 22,014,835

9. INCOME TAX EXPENSE9.1 Income tax

Current tax expenseCurrent tax on profits for the year (Note 9.3) 533,728 2,701,781 Under provision for the prior years 600 -Total income tax expense 534,328 2,701,781

9.2 As per the agreement under Section 17 of BOI Law No.4 of 1978, the tax exemption period ended on 31st March 2004. However, the Company’s export income of gold, gems or jewellery are exempted from income tax as per Section 13 (i) of the Inland Revenue Act No.10 of 2006 and amendments thereto. Local sales are liable for income tax.

9.3 Reconciliation of accounting profit/(loss) and taxable income(Loss)/ profit before income tax (25,683,878) 14,622,404 Non business income (4,567,893) (10,608,853)Disallowed expenses and provisions 4,755,127 7,851,416 Allowable expenses (16,187,920) (19,161,958)Statutory loss from business (32,548,778) (7,296,991)

Non business income 4,567,893 10,608,853 Utilisation of tax losses from local sales (120,156) (959,635)Taxable income (4,447,737) 9,649,218

Current tax on non business income for the year at 12% (2012 - 28%) 533,728 2,701,781

9.4 Tax loss analysisTax loss brought forward - - Tax loss for the year (120,156) (959,635)Tax loss utilised 120,156 959,635 Tax loss carried forward - -

9.5 Deferred taxNo deferred tax has been provided since there are no material tax effects on temporary differences due to the fact that the Company’s export income is exempted from income tax as mentioned above, as mentioned in note 9.2.



2013 2012Rs Rs

10. BASIC EARNINGS/ (LOSS) PER SHAREBasic earnings/(loss) per share is calculated by dividing the net profit/(loss) for the year attributable to ordinary shareholders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

The followings reflect the profit/(loss) and share data used in the basic earnings per share computation: (Loss)/Pofit attributable to ordinary shareholders (26,218,206) 11,920,623 Weighted average number of ordinary shares 256,670,691 256,670,691

Basic earnings/(loss) per share (0.10) 0.05

10.1 There was no potential dilution as at year end. Therefore, diluted earnings/ (loss) per share is the same as basic earnings/ (loss) per share shown above.

notes to the fInanCIaL statementsFor the year ended 31st March


11. PROPERTY, PLANT & EQUIPMENT

Buildings Plant & Machinery

Furniture & Fittings

Office & Factory

Equipment

Total 2013 Total 2012 Total 2011

Rs Rs Rs Rs Rs Rs RsCost/RevaluationAs at 01st April 20,400,000 165,534,750 4,728,287 27,989,772 218,652,809 203,161,655 198,170,033

Additions 634,500 23,500 29,173 1,336,388 2,023,561 15,491,154 2,014,978

Revaluation - - - - - - 6,237,551

Disposal - - - - - (3,260,907)

Balance as at 31st March 21,034,500 165,558,250 4,757,460 29,326,160 220,676,370 218,652,809 203,161,655

DepreciationAs at 01st April 710,518 142,926,942 4,697,387 24,793,415 173,128,262 170,232,070 181,612,874

Charge for the year 728,576 1,440,978 23,465 1,197,939 3,390,957 2,896,192 3,173,503

Removal of accumulated depreciation on building revaluation

- - - - - - (11,293,400)

Disposal - - - - - - (3,260,907)

Balance as at 31st March 1,439,094 144,367,920 4,720,852 25,991,354 176,519,219 173,128,262 170,232,070

Carrying amountAs at 31st March 2013 19,595,407 21,190,330 36,608 3,334,806 44,157,151

As at 31st March 2012 19,689,481 22,607,807 30,900 3,196,357 45,524,547

As at 1st April 2011 20,400,000 11,560,839 75,172 893,574 32,929,585

11.1 As explained in Note 3.4.(c) the Company adopted the application of revlaution model for its freehold buildings from 1 April 2011, being the date of trasition to the new Sri Lanka accounting Standards. The revalued amount has been considered as deemed cost of the building on the date of transition (01 April 2011) according to SLFRS-1 “First time adoption of International Financial Reporting Standards “and incorporated in the Financial Statements from its effective date which is 01 April 2011.

The Buildings were revalued by Messrs A.A.M. Fathihu - F.I.V. (Sri Lanka) Incorporated valuer. Such assets were valued on depreciated replacement cost method , the surplus arising from the revaluation was transferred to the revaluation reserve. Accordingly, the depreciation charge on buildings have been revised based on the revalued amount from year 2012 onwards .

11.2 Revluation surplus as at 1 April 2011 Rs Revalued amount (Note 11.3) 20,400,000Carrying value of the building before revalutaion 2,869,049 Revluation surplus 17,530,951 Reversal of accumulated depreciation 11,293,400 Revalutaion recognised against cost 6,237,551 Total revaluation surplus reconginised to Equity through OCI in 2011 17,530,951



notes to the fInanCIaL statements11.3 Company Properties

Company Properties Method of Valuation

Date of Valuation

1-Apr-11Next

date of Valuation

Revalued amount Fair value

(Rs.' 000) (Rs.' 000)Buildings at No:49, Ring road, phase I,

Industrial promotion Zone, Katunayake.Depreciated

replacement cost31.03.2011 20.4 Mn 20.4 Mn 31.03.2014

The fair value of the same buildings as at 31.03.2013 amounted to Rs 21Mn. As the Company’s policy on revaluing of its building is in every three years and the fair value of the buidling is not significantly different from the carrying value of Rs. 19.6 Mn /= as at that date , the fair value has not been incorporated in these Financial Statements.

11.4 The carrying amount of Company’s revalued buildings that would have been included in the financial statements had the buildings been carried at cost less depreciation is as follows:

2013 (Rs) 2012 (Rs) 1/4/2011 (Rs)

Class of assets CostAccumulated depreciation

Carrying value

CostAccumulated depreciation

Carrying value

CostAccumulated depreciation

Carrying value

Buildings 14,796,949 12,240,383 2,556,566 14,162,449 11,744,987 2,417,462 14,162,449 11,293,400 2,869,049

11.5 During the financial year, the Company acquired Property, Plant and Equipment to the aggregate value of Rs. 2 Mn and payments amounting to Rs 2 Mn were made during the year for purchase of Property, Plant and Equipment.

11.6 Plant and machinary includes fully depreciated assets with the cost of Rs. 136.7Mn (2012 Rs 137Mn), which are being used in the normal business activities. These assest could not be valued due to the complexity in valueing such specialised machinery

2013 2012 1st April 2011 Rs. Rs. Rs.

12. LEASEHOLD RIGHT OVER LAND Balance at the beginning of the year 2,257,110 2,284,227 2,311,344 Additions during the year 372,850 - - Amortized during the year (31,814) (27,117) (27,117)Balance at the end of the year 2,598,146 2,257,110 2,284,227

12.1 Leasehold land has been obtained from Government of Sri Lanka on a 99 years lease. This lease commenced on 7th March 1991. The remaining lease period as at 31 March 2013 was 77 years.

13. INTANGIBLE ASSETSComputer software Note 13.1 625,094 60,416 160,416 Technological rights Note 13.2 - - -

625,094 60,416 160,416

13.1 Computer softwareCostBalance at the beginning of the year 11,927,500 11,927,500 11,927,500 Additions during the year 793,319 - - Balance at the end of the year 12,720,819 11,927,500 11,927,500

Accumulated AmortizationBalance at the beginning of the year 11,867,084 11,767,084 11,667,084 Charge for the year 228,641 100,000 100,000 Balance at the end of the year 12,095,725 11,867,084 11,767,084

Carrying amountAs at 31st March 625,094 60,416 160,416


notes to the fInanCIaL statements2013 2012 2011

Rs Rs Rs.13.2 Technological rights

Technological rights purchased value 229,731,188 229,731,188 229,731,188 Provision made during the financial year 2000/2001 (229,731,188) (229,731,188) (229,731,188)Carrying amount as at 31st March - - -

The Company entered into an understanding with Energen Holding Company Limited, Mauritius, in 1997/98, to develop solar chimney technology to generate power. The Company subcontracted this development work to a foreign Company and purchased the technological rights at a cost of Rs. 229,731,188/- from the foreign Company. Former deputy Chairman had undertaken to sell the technological rights at the AGM held in 1997/98. However the sales didn’t take place. The Board of Directors of the Company decided to make full provision against the investment in 2000/01 due to the uncertainty regarding future economic benefits from the investment. The said investment has not been written off against the provision as at the balance sheet date, as the Board of Directors is still in the process of evaluating any possibility of recovering the said investment as mentioned in the Note 15.3.

14. INVESTMENT IN ASSOCIATE Fior Drissage Jewellers Ltd

2013 2012 1st April 2011

% Holding Cost

Directors Valuation

% Holding Cost

Directors Valuation

% Holding Cost

Directors Valuation

Rs. Rs. Rs. Rs. Rs. Rs. Balance at the beginning of the year (at cost)

40% 5,934,728 16.66% 556,578 -

Investment made during the year

- 5,378,150 5,000

Company's share of the associate company's retained profit/ (loss) as at 1st April

362,896 (5,000) -

Current year's share of profit/(loss) after tax

310,516 367,896 (5,000)

FV Adjustment on term loan granted (Note 18.2)

- - 551,578

Balance at the end of the year

30.80% 6,608,140 6,608,140 40% 6,297,624 6,297,624 16.66% 551,578 551,578

The Company has invested on Fior Drissage Jewellers Ltd (FDJ) in the year 2011 and acquired 16.66% of FDJ with the intention to enter in the local market. The said investment was incerased to 40% during the year ended 31 March 2012. During the year the Company’s shareholding percentage in FDJ has come down to 30.80% as the Company did not subscribe for the rights issue of shares during the year.As at 31st March, 2013 2012 1st April 2011

Audited Audited Audited Rs. Rs. Rs.

Summaries of the financial information of the Associate.

Balance SheetTotal assets 34,509,550 23,160,229 31,668,251 Total liabilities 14,973,725 8,665,223 31,510,885 Net assets 19,535,825 14,495,006 157,366

Revenue and profitsRevenue 28,866,168 29,438,788 13,599,489 Profit/(loss) 1,008,498 919,740 (42,294)

As at 31st March



Rs Rs Rs.15. FINANCIAL ASSETS - AVAILABLE FOR SALE

Quoted Investments (Note 15.1) 100,800 91,938 139,734 Non-quoted Investments (Note 15.2) 38,550 13,491 20,756

139,350 105,429 160,490

15.1 Quoted Investments

2013 2012 1st April 2011No of shares

Cost Market Value

No of shares

Cost Market Value

No of shares

Cost Market Value

Rs. Rs. Rs. Rs. Rs. Rs.

Renuka City Hotel PLCBalance at the beginning of the year 420 12,000 91,938 420 12,000 139,734 420 12,000 12,000

Net changes in the FV during the year - - 8,862 - - (47,796) - - 127,734

Balance at the end of the year 420 12,000 100,800 420 12,000 91,938 420 12,000 139,734

15.2 Non-quoted Investments

2013 2012 1st April 2011No of shares

Cost Directors valuation

No of shares


No of shares


Rs. Rs. Rs. Rs. Rs. Rs.

MBSL Savings Bank Ltd

Balance at the beginning of the year 30,000 172,500 13,491 30,000 172,500 20,756 15,000 150,000 150,000

Purchased during the year - - - - - - 15,000 22,500 22,500

Subscribed for the rights issue of shares 200,000 110,000 110,000 - - - - - -

Net changes in the FV during the year - - (84,940) - - (7,265) - - (151,744)

Balance at the end of the year 230,000 282,500 38,550 30,000 172,500 13,491 30,000 172,500 20,756

Energen Holding Company Ltd (Note 15.4)

5,000,000 287,500,000 - 5,000,000 287,500,000 - 5,000,000 287,500,000 -

287,782,500 38,550 287,672,500 13,491 287,672,500 20,756

15.3 Net changes in the FV of AFS investments during the year

Quoted Investments 8,862 (47,796) 127,734 Unquoted Investments (84,940) (7,265) (151,744)

(76,078) (55,061) (24,010)

15.4 The Company holds an investment of Rs. 287.5 Mn in Energen Holding Company Ltd. Based on the internal assessment and opinion of the Directors there will be no future economic benefit to the Company from this investment. Accordingly a full provision was made against the said investment during the year 2000/2001. The Board of Directors is still in the process of evaluating any possibility of recovering a disposal income of technological rights stated above (Note 13.2). Therefore, the Company will continue to disclose the investment made in Energen Holdings Company Ltd and technological rights to be sold to Energen International Limited in 2012/13 financial statements at zero value.

As at 31st March

2013 2012 2011Rs Rs Rs.



Rs Rs Rs16. INVENTORIES

Diamonds 59,491,187 62,692,220 31,695,720 Gems 4,839,919 6,544,001 1,928,160 Raw gold 16,106,421 39,047,627 1,989,220 Gold frames WIP - 4,350 14,148,144 Work in progress 5,638,927 5,278,419 342,000 Finished goods 61,711,248 49,452,188 84,023,884 Consumables 8,183,439 8,152,099 7,870,660 Stocks on consignment basis 2,504,241 2,523,319 14,515,985 Stocks on sample basis 338,463 19,168,856 15,031,594

158,813,845 192,863,079 171,545,367 Impairment provision on net realizable value of inventories - - Provision for slow moving inventories (6,450,000) (22,147,044) (32,094,860)

141,363,845 170,716,035 139,450,507

A valuation has been carried out on the Gem and Diamond stocks by Mr. Mervyn Nanayakkara a Gemologist, Diamond appraiser, Jewellery valuer, and the market values as at 31 March 2013 are as follow:

Category Market value (Rs)Diamond 75,284,218 Gems 5,249,947

17. TRADE RECEIVABLESTrade receivables 47,851,601 43,254,885 46,197,195 Less: Impairment provision (27,528,663) (28,067,673) (24,278,688)Carrying value of trade receivables 20,322,938 15,187,212 21,918,507

18. RELATED PARTY RECEIVABLEFior Drissage Jewellers Ltd Loan receivable (Note 18.1) 4,761,443 5,038,107 5,301,020 Other receivables 177,919 144,543 3,920,035

4,939,362 5,182,650 9,221,055

Loan receivableBalance at the beginning of the year 5,038,107 5,301,020 - Loans granted during the year (Note 18.2) - 5,892,850 FV Adjustment on term loan granted 63,932 68,778 (540,596)

5,102,039 5,369,798 5,352,254 Repayments (340,595) (331,691) (51,234)Balance at the end of the year 4,761,444 5,038,107 5,301,020

Receivable within one year 524,486 581,922 4,320,483 Receivable after one year 4,414,876 4,600,728 4,900,572

4,939,362 5,182,650 9,221,055

18.2 As the the loan granted to the Associate was at a concessionery interest rate, a Fair value adjustement has been made as required by LKAS 39 -”Financial Instruments -Recognition & Measurement” . Accordingly, the the initial FV adjustment has been recognised as an investment in the Associate (Note 14) and subsequently through finance income (Note 8).

As at 31st March

2013 2012 2011Rs Rs Rs

18.1


notes to the fInanCIaL statementsAs at 31st March 2013 2012 1st April 2011 Rs. Rs. Rs. 19. OTHER RECEIVABLES

Loans and advances to employees (Note 19.1) 1,036,000 2,168,179 1,979,923 Deposits and advances 828,008 2,436,593 5,089,406 Value added tax recoverable 761,892 651,311 1,087,483 WHT receivable 451,598 328,063 6,163 Notional tax receivable - 636,981 161,407 Economic service charge recoverable - 34,891 -

3,077,498 6,256,018 8,324,382

19.1 Loans and advances to employeesLoan given to Director - 525,059 821,600 Loans and advances to employees (Note 19.2) 1,036,000 1,643,120 1,158,323 1,036,000 2,168,179 1,979,923

19.2 Loans and advances given to employees are short term and the tenure period is equal or less than ten months.

20. CASH AND CASH EQUIVALENTSCash at bank 18,087,566 3,938,227 5,971,360 Call deposits 10,299,480 585,000 585,000 Margin on guarantees 902,500 902,500 902,500 Fixed deposits 66,449,719 105,233,753 1,473,283 Saving account 317,423 - - Treasury bills - - 1,934,399 REPO - 2,003,068 165,475,710 Cash on hand 29,891 - - Cash and cash equivalents 96,086,580 112,662,548 176,342,252 Bank overdraft (65) (63) (8,181)Cash and cash equivalents as per the cash flow statement 96,086,515 112,662,485 176,334,071


notes to the fInanCIaL statements21. STATED CAPITAL

No. of shares Value2013 2012 1st April

20112013 2012 1st April

2011Rs. Rs. Rs.

Voting

As at beginning of the year 103,300,891 103,300,891 59,033,947 732,596,729 732,596,729 621,929,369

Capital reduction during the year (Note 21.2)

- - - (589,221,000) - -

Rights issue of shares during the year (Note 21.1)

- - 44,266,944 - - 110,667,360

As at end of the year 103,300,891 103,300,891 103,300,891 143,375,729 732,596,729 732,596,729

Non voting

As at beginning of the year 153,369,800 153,369,800 102,202,114 332,256,814 332,256,814 255,505,285

Capital reduction during the year (Note 21.2)

- - - (267,231,000) - -

Rights issue of shares during the year (Note 21.1)

- - 51,167,686 - - 76,751,529

As at end of the year 153,369,800 153,369,800 153,369,800 65,025,814 332,256,814 332,256,814

208,401,543 1,064,853,543 1,064,853,543

21.1 During the financial year ended 31 March 2011, the Company raised Rs.187,418,889 via rights issue of ordinary shares to the shareholders of the Company. This resulted in 44,266,944 new ordinary voting shares and 51,167,686 non-voting shares being issued in the proposition of one new ordinary voting and non-voting share for every one ordinary voting and non-voting share held by the respective shareholder of the Company as at 18th November 2010 at a consideration of Rs 2.50 and 1.50 per share respectively.

21.2 During the financial year ended 31 March 2013, the stated capital of the Company amounting to rupees one billion sixty four million eight hundred and fifty three thousand five hundred and fourty three (Rs.1,064,853,543/-) comprising of 103,300,891 fully paid ordinary voting shares and 153,369,800 fully paid non-voting shares was reduced to rupees two hundred and eight million four hundred and one thousand five hundred and forty three (Rs.208,401,543/-) represented by 103,300,891 fully paid ordinary voting shares and 153,369,800 fully paid non-voting ordinary shares in accordance with the provisions of Section 59 of the Companies Act No 07 of 2007. An EGM was held on 4th May 2012 to effect the said reduction.

The holders of the ordinary shares are entitled to receive dividends as declared from time to time and voting ordinary shares are entitled to one vote per share at meetings of the Company.

22. EMPLOYEE BENEFITS22.1 Defined Contribution Plan

Following contributions have been made to Employees’ Provident Fund and Employees’ Trust Fund during the year.

2013 2012 2011 Rs. Rs. Rs.Employees’ Provident Fund Employers’ contribution 2,682,873 2,361,501 1,908,824 Employees’ contribution 1,788,582 1,574,334 1,272,549

Employees’ Trust Fund 670,718 590,375 477,206



22. Employee Benefits (Cont.)22.2 Defined benefit plan As at 31st March 2013 2012 1st April 2011 Rs. Rs. Rs.

Balance as at the beginning of the year 8,005,634 9,226,759 8,194,220Provision during the year 463,506 571,336 2,937,602 Payments made during the year (3,368,265) (1,792,461) (1,905,063)Balance at the end of the year 5,100,875 8,005,634 9,226,759

Acturial valuation for defined benefit obligation was carried out as at 31st March 2013 by Mr. Poopalanathan, AIA, of M/s Acturial & Management Consultants (Pvt) Limited., a firm of professional actuaries. The valuation method used by the actuaries to value the obligation is the “Projected Unit Credit Method”, a method recommended by the Sri Lanka Accounting Standard - LKAS 19 on “Employee Benefits”.

22.3 Provision recognised in the Statement of Comprehensive Income Current service cost 449,807 898,574 634,693 Interest cost 800,563 922,676 819,422 Actuarial (Gain)/Loss (786,864) (1,249,914) 1,483,487 463,506 571,336 2,937,602

22.4 As explained in Note 3.12.2, the Company applies faster recognition basis. Accordingly, actuarial gains and losses are recognised to profit or loss immediately.

22.5 The principal assumptions used in determining the cost of employees benefits were:Discount rate 10% 10% 10%Future salary increment rate 8% 8.5% 8%Staff turnover rate 20% 20% 20%

23. DEBENTURES ISSUED Debentures Issued - Millennium Developers Ltd (Formerly known as Ceylinco Developers Ltd) - - 1,391,667 - - 1,391,667

24. AMOUNT DUE TO CEYLINCO INVESTMENT COMPANY LIMITED

Balance at the beginning of the year - 19,376,991 23,876,991 Written back during the year (Note 6.2) - (19,376,991) (4,500,000)Balance at the end of the year - - 19,376,991

The Board of Directors of the Company has decided to write back the balance payable to Ceylinco Investments Company Limited in two installments due to the non existence of liability. The first installment of Rs 4.5Mn was written back in 2010/2011 and the balance Rs 19.4 Mn was written back during the year ended 31 March 2012. Further, the Company has obtained a legal advice, on 23rd August 2012 on the write back of the amount due to Ceylinco Investment Company Limited and the lawyers have confirmed that there will be no future claim on the said outstanding payable.

25. INTEREST BEARING LOANS AND BORROWINGS

Term loan: The Finance Company PLC Balance at the beginning of the year - 38,868,610 35,712,807 Interest on loan - - 3,155,803 - 38,868,610 38,868,610Repayments during the year - (15,000,000) - Written off during the year (Note 6.2) - (23,868,610) -Balance at the end of the year - - 38,868,61

Term loans payable after one year - - - Term loans payable within one year - - 38,868,610 - - 38,868,610



The Company had obtained a credit facility from The Finance Company PLC for a sum of Rs.10 Mn (Ten million) in 99/2000. The outstanding balance of the said facility remained at Rs.38,868,610/- with accrued interests as at the financial year end 31st March 2011. On 20th June 2011, The Finance Company PLC agreed to accept Rs.15 Mn (Fifteen million) from the Company as full and final settlement for the credit facility and Company has settled the same on 24th June 2011. Accordingly the balance Rs 23,868,610/- has been written back to the income statement as other income during the year ended 31 March 2012.

2013 2012 1st April 2011 Rs. Rs. Rs. 26. RELATED PARTY PAYABLES

PR Associates 175,693 - -

27. OTHER PAYABLES AND ACCRUALS Accrued expenses 3,268,050 4,187,078 3,204,399 Advance received on export sales 5,391,384 5,391,385 - Payable on settlement of legal cases - 12,000,000 - Other payables 414,604 525,835 444,224 9,074,038 22,104,298 3,648,623

28. RELATED PARTY DISCLOSURE

28.1 Transactions with key management personnel of the company Key Management Personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly.

Close Family Members (CFM) of a KMP are those family members who may be expected to influence, or be influenced by, that KMP in their dealings with the Company. They may include KMPs domestic partner and children, children of the KMPs domestic partner and dependants of the KMP or the KMPs domestic partner. Accordingly, the Company has identified the Board of Directors (including Executive and Non-Executive Directors) and their close family members as the KMP of the Company.

28.1.a Directors appointments / resignations (cessations) during the year.

Name of the Director Date of appointment to the board

Date of resignation / cessation

Duration

Mr. J. H. P. Ratnayeke 28th September 2012 - As at date

Mr. B. M. A. L. A. Fernando 28th September 2012 - As at date

Mr. W. M. R. B. Bandara 28th September 2012 - As at date

Mr. B. B. T. A. Perera 28th September 2012 16th May 2013 7 months and 18 days

Mr. P. B. V. Kumar 28th September 2012 16th May 2013 7 months and 18 days

Mr. K. V. D. D. A. Dias 11th November 2005 28th September 2012 6 years 10 months and 17 days

Mr. M. M. N. Priyantha 11th November 2005 28th September 2012 6 years 10 months and 17 days

Mr. W. Ravishankar 07th October 2011 6th February 2013 1 year 3 months and 30 days

Mr. K. L. Dias 07th October 2011 12th February 2013 1 year 4 months and 5 days

Mr. W. A. D. V. Perera 07th October 2011 31st August 2012 10 months and 24 days

Mr. W. W. M. R. K. W. B. Dela 07th October 2011 27th August 2012 10 months and 20 days

Mr. G. de. Kretser resigned from the Board with effect from 31st July 2012.


28.1.b Compensation paid to/on behalf of key management personnel of the companies are as follow:

2013 2012 2011 Rs. Rs. Rs.

Short term employment benefits 6,225,473 11,382,800 8,488,768 Post employment benefits 3,459,350 8,309,532 350,730 9,684,823 19,692,332 8,839,498

The KMP classification has been applied to the directors from the date of their appointment to the board up to date of their resignation / retirement from the company.

28.1.c Loans to directorsDuring the year under review the Company has recovered in full Rs.525,060/- from a loan given to a director of the Company.

Loans given to directors are disclosed in Note 19.1.

28.2 Transactions with related entities The directors of the Company are also directors of the following companies as set out below and with transactions have been carried out.

Name of the related party

Relationship Name of the director

Nature/Rational of transaction

Fior Drissage Jewellers Ltd

Associate - - Royalty income. - Term loan as disclosed in Note 18.

PR Associates Chairman Mr.J.H.P.Ratnayeke - Legal and secretarial services.

28.3 The aggregate value of transactions are as follow:

Name of the related party Nature of transaction

Value of transactions during the year (Rs) Balance as at

2013 2012 31-Mar-13

Fior Drissage Jewellers Ltd Consignment goods sent

- 7,184,657 4,939,362

Loan repayment 340,595 331,691

Sales made - 7,184,657

Roalty Income 177,919 144,543

PR Associates Legal and secreterial services

490,043 - (175,693)




29. CONTINGENT LIABILITIES The following cases have been filed against the Company or claims have been made in reconvention. No provision is made in the financial statements as the lawyers are of the opinion that the outcome of the potential liability on any of these cases can not be assessed with reasonable certainity at this stage. LT NEGOMBO No 21/ADD/1152/2013(M.M.N. PRIYANTHA Vs BLUE DIAMONDS JEWELLERY WORLDWIDE PLC)An application made by M.M.N. Priyantha (complainant) for his unlawful termination of service claiming sum of Rs. 31,632,480/- together with cost and other reliefs as compensation.

Since the Counsel appearing for BDJW raised a preliminary objection with respect to the jurisdiction of the Labour Tribunal to determine the matter, Tribunal directed both parties to file their respective written submission in this regard. Written submissions of parties were filed in the Labour Tribunal and order with regard to these written submissions is due. Next date is 12th September 2013.

LT NEGOMBO No 21/ADD/1153/2013(AJANTHA DIAS Vs BLUE DIAMONDS JEWELLERY WORLDWIDE PLC)An application made by K.V.D.D.A Dias (complainant) for his unlawful termination of service claiming sum of Rs. 28,761,600/- together with cost and other reliefs as compensation.

Since the Counsel appearing for BDJW raised a preliminary objection with respect to the jurisdiction of the Labour Tribunal to determine the matter, Tribunal directed both parties to file their respective written submission in this regard. Written submissions of parties were filed in the Labour Tribunal and order with regard to these written submissions is due. Next date is 12th September 2013.

ARBITRATION MATTER BETWEEN SEYLAN BANK PLC AND BLUE DIAMONDS JEWELLERY WORLDWIDE PLCTheCompanyobtainedacreditfacilityofUS$2,750,000fromSeylanBankPLCinpreviousyearsbypledginginventory of jeweler as security. During the year ended 31st March 2005, the Directors resolved to write back the balance outstanding to the Bank in respect of the credit facility on the basis that the Company handed over jeweler in lieu of the said credit facility as full and final settlement of the balance due to the Bank and there is no further liability due on the said credit facility. Accordingly, a net amount of Rs.203.5Mn was written back to profit and loss during that financial year. The said bankby letter dated 4thDecember 2009has demanded a sumofUS$ 4,320,906 (togetherwithfurther interest at 8% per annum) being the total outstanding due on the said facilities from the Company. The Company and Seylan Bank PLC agreed to appoint a panel of Arbitrator in accordance with the agreement signed by the Company and the Bank on 21st November 2003 in respect of reworking the jewllery that was acquired by Seylan Bank. The Arbitration process has commenced and its in the trial stage. Next date of hearing are 02nd September 2013. Accroding to the lawyers evaluation, it is not possible to comment or assess the outcome of the case at this stage.

PAYABLE TO GOLDEN KEY COMPANY LIMITEDThe Company has been informed unofficially by the Committee of Chartered Accountants to settle the payment due to Golden Key Company Ltd amounting to Rs 2.45Mn. However, at the Board of Directors meetings held on 25th May 2011 and 10th August 2011, the Directors of the Company have decided that the Company would honor the payment only upon a formal request being made for such liability by the Committee of Chartered Accountants and after determining the existence of the liability. The Board having reviewed the existance of liability, is satisfied that no liability of this nature exists as at 31st March 2013.

30. EVENTS AFTER THE REPORTING DATE Following events had occurred subsequent to the reporting date of the Financial year 2012/13.


notes to the fInanCIaL statements30.1 Resignations/appointment of Directors

Subsequent to the reporting date the following changes have been taken place at Board level:

1.) Mr. B.B.T Asela Perera and Mr. P.B. Vinoth Kumar who served as Directors of the Company have resigned from the Board of Directors of the Company with effect from 16th May 2013.

2.) Mr. W.D.J. Ruwan Silva and Mr. S. Arunapriya Hettiarachchi were appointed as Directors to the Board of Directors of the Company with effect from 16th May 2013. Further Mr. W.D.J. Ruwan Silva has been again appointed as Managing Director of the Company with effect from 15th August 2013.

3.) Mr. Darshan Jayanetti has been appointed as Chief Executive Officer of the Company with effect from 01st July 2013.

Other than those disclosed above, no circumstances have arisen subsequent to the reporting date which require adjustments to or disclosures in the Financial Statements.

31 EXPLANATION OF TRANSITION TO NEW SLASs As stated in Note 2.1, these are the Company’s first Financial Statements prepared in accordance with new Sri Lanka Accounting Standards prefixed both SLFRS (corresponding to IFRS) and LKAS (corresponding to IAS), promulgated by the Institute of Chartered Accountants of Sri Lanka (ICASL). The accounting policies amended as per new SLASs have been applied in preparing the Financial Statements for the year ended 31 March 2013, the comparative information presented in these Financial Statements for the year ended 31 March 2012 and in the preparation of an opening SLAS Statement of Financial position at 1 April 2011 (the entity’s date of transition). In preparing its opening new SLAS Statement of Financial Position, the company has adjusted amounts reported previously in Financial Statements prepared in accordance with previous SLASs. An explanation of how the transition from previous SLASs to new SLASs has affected the financial position, financial performance of the company is set out in the following tables and the notes that accompany the tables.


notes to the fInanCIaL statements31.1 Reconciliation of financial position

As at 31st March 2012 01st April 2011

Previous SLASs

Effect of transition to

new SLASs

New SLASs Previous SLASs

Effect of transition to

new SLASs

New SLASs

Note Rs. Rs. Rs. Rs. Rs. Rs.

ASSETS

Non-current assets

Property, plant and equipment

a 28,252,527 17,272,020 45,524,547 15,398,634 17,530,951 32,929,585

Leasehold property 2,257,110 - 2,257,110 2,284,227 - 2,284,227

Intangible assets 60,416 - 60,416 160,416 - 160,416

Investment in associate b 5,746,046 551,578 6,297,624 - 551,578 551,578

Financial assets available-for-sale

c 184,500 (79,071) 105,429 184,500 (24,010) 160,490

Loan receivable from associate

b 5,136,478 (535,750) 4,600,728 5,509,945 (609,373) 4,900,572

Total non-current assets 41,637,077 17,208,776 58,845,854 23,537,722 17,449,146 40,986,868

Current assets

Inventories 170,716,035 - 170,716,035 139,450,507 - 139,450,507

Trade receivables 15,187,212 - 15,187,212 21,918,507 - 21,918,507

Related party receivable b 144,543 437,379 581,922 3,920,035 400,448 4,320,483

Loan receivable from associate

b 373,447 (373,447) - 331,671 (331,671) -

Other receivables d 8,490,736 (2,234,718) 6,256,018 9,865,333 (1,540,951) 8,324,382

Cash and cash equivalents d 107,427,690 5,234,858 112,662,548 173,895,985 2,446,267 176,342,252

Total current assets 302,339,663 3,064,072 305,403,735 349,382,038 974,093 350,356,131

Total assets 343,976,740 20,272,848 364,249,589 372,919,760 18,423,239 391,342,999


notes to the fInanCIaL statementsAs at 31st March 2012 01st April 2011

Previous SLASs

Effect of transition to new SLASs

New SLASs Previous SLASs Effect of transition to new SLASs

New SLASs

EQUITY AND LIABILITIES Note Rs. Rs. Rs. Rs. Rs. Rs.

Stated capital 1,064,853,543 - 1,064,853,543 1,064,853,543 - 1,064,853,543

General reserves 135,000,000 - 135,000,000 135,000,000 - 135,000,000

Revaluation Reserve a - 17,530,951 17,530,951 - 17,530,951 17,530,951

Available-for-sale reserve c - (79,071) (79,071) - (24,010) (24,010)

Accumulated loss a,b&c (892,677,239) 2,820,968 (889,856,270) (902,693,191) 916,298 (901,776,893)

Total equity 307,176,304 20,272,848 327,449,153 297,160,352 18,423,239 315,583,591

Non-current liabilities

Employee benefits 8,005,634 - 8,005,634 9,226,759 - 9,226,759

Debenture issued - - 1,391,667 - 1,391,667

Total non-current liabilities 8,005,634 - 8,005,634 10,618,426 - 10,618,426

Current liabilities

Trade payables 3,989,260 - 3,989,260 3,228,879 - 3,228,879

Amount due to Ceylinco Investment Company Limited

- - - 19,376,991 - 19,376,991

Interest bearing loans and borrowings

- - - 38,868,610 - 38,868,610

Current tax payable 2,701,181 - 2,701,181 9,698 - 9,698

Other payables and accruals 22,104,298 - 22,104,298 3,648,623 - 3,648,623

Bank overdraft 63 - 63 8,181 - 8,181

Total current liabilities 28,794,802 - 28,794,802 65,140,982 - 65,140,982

Total liabilities 36,800,436 - 36,800,436 75,759,408 - 75,759,408

Total equity and liabilities 343,976,740 20,272,848 364,249,589 372,919,760 18,423,239 391,342,999



31 Explanation of transition to new SLASs (cont.) 31.2 Reconciliation of comprehensive income for the year ended 31 March 2012

Previous SLASs

Effect of transition

to new SLASs

New SLASs

Note Rs. Rs. Rs.

Revenue 71,157,686 - 71,157,686

Cost of Sales (53,016,710) - (53,016,710)

Gross Profit 18,140,976 - 18,140,976

Other Operating Income 43,475,994 - 43,475,994

Selling and distribution expenses (13,857,582) - (13,857,582)

Administrative Expenses a (55,260,785) (258,932) (55,519,716)

Loss from operations (7,501,396) (258,932) (7,760,328)

Finance Income b,d 19,851,234 2,163,601 22,014,836

Share of profit of associate (net of tax) 367,896 - 367,896

Profit before income tax 12,717,734 1,904,669 14,622,404

Income tax expense (2,701,781) - (2,701,781)

Profit for the year 10,015,953 1,904,6769 11,920,623

Net changes in the fair value of financial assets available-for-sale c - (55,061) (55,061)

Total comprehensive income for the year 10,015,953 1,849,608 11,865,562

a) Property, plant and equipment The Buildings were revalued and the revalued amount considered as deemed cost of the building on the date of transition (01 April 2011) according to IFRS-1 “First time adoption” and incorporated in the Financial Statements from its effective date which is 01st April 2011.

The impact arising from the change is summarised as follows:

1st April ‘11 31st March ‘12 Rs. Rs.Statement of comprehensive income Re-measurement Additional depreciation on revalued buildings (258,932) Statement of financial position Re-measurement Revaluation surplus - net of depreciation 17,530,951 17,272,019

b) Investment in associate

According to LKAS 39, “Financial Instruments-Recognition and Measurement”, the loan given to associate Company shall be recognized initially at fair value. The “difference” between the loan amount and its fair value shall be recorded as component of the overall investment in associate. The fair value of the loan is estimated by discounting the future loan repayments using a rate based on the rate that the associate would pay to an unrelated lender for a loan with similar conditions (amount, term, security, etc.).



notes to the fInanCIaL statements 1st April ‘11 31st March ‘12 Rs. Rs.Statement of comprehensive incomeRe-measurementAdditional interest income 68,777

Statement of financial position Re-measurementInvestment in associate 551,578 551,578 Related party receivable 400,448 437,379 Loan receivable from associate - non-current (609,373) (535,750)

Re-classificationLoan receivable from associate transferred to related party - current (331,671) (373,447)

c) Financial assets available-for-sale

The Company’s investments comprise term deposits and unquoted shares. Investments in unquoted shares and term deposits were measured at cost according to the previous SLASs.

The Company has categorize investments as required by LKAS 39, “Financial Instruments-Recognition and Measurement” and subsequent measurement of investments have changed according to the categorization as shown below:

Type of instrument Measurement under previous SLASs

Classification under LKAS 39

Subsequent measurement under LKAS 39

Investments in equity shares

Cost Available For Sale Fair value through Other Comprehensive Income (OCI)


1st April ‘11 31st March ‘12 Rs. Rs.Statement of comprehensive incomeRe-measurementNet change in the fair value (55,061)

Statement of financial positionRe-measurementFinancial assets available-for-sale (24,010) (79,072)


notes to the fInanCIaL statements31 Explanation of transition to new SLASs (cont.)

d) Cash and cash equivalent According to LKAS 39, “Financial Instruments-Recognition and Measurement”, the amortised cost of financial asset includes the cumulative amortisation using the effective interest methord. Accordingly, the interst recevable has been added to the carrying value of the financial assets. The impact arising from the change is summarised as follows

The impact arising from the change is summarised as follows: 1st April ‘11 31st March ‘12 Rs. Rs.Statement of comprehensive incomeRe-measurement EIR Adjustment 2,094,824

Statement of financial positionRe-classificationInterest receivable on investments reclassified from other recievables 1,540,951 2,234,718

Re-measurement EIR Adjustment 17,816 2,112,640 1,558,767 4,347,358Restatement of comparative figures (Note 34) 887,500 887,500 2,446,267 5,234,858

32 Financial risk management

32.1 Introduction and overview The Company has exposure to the following risks from its use of financial instruments:

1. Credit risk

2. Liquidity risk

3. Market risk

4. Interest rate risk

5. Operational risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout this Financial Statement.

32.2 Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board is responsible for developing and monitoring the Company’s risk management policies.

32.3 Financial risk management objectives and policies The objective of the financial risk management strategy of the group is to minimize the impact of risks that arise due to the use of financial instruments. The risks that are unmanaged can potentially result in the group being unable to achieve its budgeted profits in a given financial year. Hence, importance is given by the Company to manage financial risk.

32.4 Market risk management Market risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate due to the change in market factors such as exchange rates and interest rates. Such risks could affect Company’s income and expenses and could have a potentially adverse impact on the profits attributable to the shareholders. The objective of market risk management is to manage and control market risk exposure within acceptable limits while optimizing returns.


notes to the fInanCIaL statements32.5 Credit risk

Credit risk refers to the risk carried out by the Company owing to a counter party defaulting on its contractual obligations in relation to a financial instrument or customer contract. The total carrying amount of the credit risk pertaining to the group as at 31st March 2013 is the summation of balances under the following categories of financial assets.

The maximum credit risk of the Company is limited to the carrying value of these financial assets as at 31st March 2013.

As at 31st March 2013 Amount (Rs.)Trade receivable 20,322,938 Other receivable 3,077,498 Financial assets available-for-sale 139,350 Related party receivable 524,486 Loan receivable from associate 4,414,876 Cash & Short term deposits 96,086,580

The credit risk arising from the deposits made in financial institutions are managed by the Company policy directions provided by the Board of Directors

Blue Diamond Jewellery Worldwide PLC transacts only with a limited number of institutions all of which have stable credit ratings. The Company exposure and credit rating of counterparties are continuously monitored and appropriate provisioning policy has been implmeneted to mitigate any exposure risk .

The majority of the trade receivable are due to settlement within 90 days comprising 34% of the total receivable as at the end of the financial year. The credit policy of Company’s are prepared subsequent to analyzing the credit profile of a customer. In this regard factors such as the credit history, legal status, market share, and industry information are considered.

As at 31 March 2013 Amount (Rs.) Less than 30 days 8,608,484 More than 30 days but less than 60 days 332,929More than 60 days but less than 90 days 6,884,853 More than 90 days but less than 180 days - More than 180 days but less than 365 days 4,496,672 More than 365 days 27,528,663 Total Gross Trade receivable 47,851,601 Impairment provision for Trade receivable (27,528,663)Total Net Trade receivable 20,322,938

32.6 Liquidity riskThe liquidity risk of the Company arises from having insufficient cash resources to meet its obligations as they arise. Insufficient liquidity resources could have an adverse impact on the Company’s operations while impairing investor, customer and supplier confidence thereby weakening its competitive position. The Company had adopted a number of strategies in order to ensure that sufficient cash resources are available to meet both operational and investment liquidity whilst meeting its debt servicing obligations.

The Company monitors cash inflows and outflows to ensure matching of cash flows wherever possible.

The Company has sufficient approved banking facilities in reserve and had over Rs. 22 million undrawn facilities as at the end of the financial year, which could be utilized at a short notice. The Company evaluates its funding requirements at frequent intervals and access debt and capital markets at appropriate times. The details of bank facilities are as follow:


notes to the fInanCIaL statements32.6.a Bank Overdraft

Facility Facility Available Utilised Rs. Rs. Nations Trust Bank PLC 22,000,000 -

The Company ensures its liquidity is maintained by investing in short, medium and long term financial instruments to support operational and other funding instruments.

As at 31st March 2013 On Demand Less than 3 Months

3 – 12 Months 1 – 2 Years

Rs. Rs. Rs. Rs.

Bank Overdraft 65 - - -

Trade Payable 3,878,838 - - -

Other Payables 9,074,038 - - -

32.7 Currency riskCurrency risk is the risk that the value of fianancial instruments will fluctuate due to changes on foreign exchange rates. The Company monitors the fluctuations in foreign currencies with appropriate strategies to minimize risk. The Company’s exposure to foreign currency risk is as follows;

As at 31st March 2013 USD Rs. Total Trade receivable 20,322,938 - 20,322,938 Other receivable - 3,077,498 3,077,498 Financial assets available-for-sale - 139,350 139,350 Related party receivable - 524,486 524,486 Loan receivable from associate - 4,414,876 4,414,876 Cash & short term deposits 39,250,335 56,836,245 96,086,580 Trade payable (3,878,836) - (3,878,836) 55,694,437 64,992,455 120,686,892

Foreign currency sensitivityAn estimation of the impact of the currency risk with respect of financial instruments with a 5% change in US Dollar exchange rate is given below. In calculation of risk it is assumed that all other variable factors are held constant. The calculation of sensitivity has been performed only on the assets and liabilities denominated in foreign currency of the Company as at 31st March 2013.

Effect on profit or loss Effect on equityAs at 31st March 2013 Rs. Rs. LKR depreciated against USD by 5% 2,784,722 2,784,722 LKR appreciated against USD by 5% (2,784,722) (2,784,722)

32.8 Interest rate riskInterest rate risk is the risk that the fair value of the cash flows of financial instruments will fluctuate because of changes in market interest rates; interest rate risk arises on interest bearing financial instruments recognized in the statement of financial position.

The interest rate risk of the Company arises from financial instruments which are exposed to variable or fixed interest rates. Variable interest rates expose the Company to cash flow due to the impact on the quantum of interest payable. Financial instruments with fixed interest rates are subject to variations in fair values due to market interest movements.

The Company monitors market interest rate movements and takes steps to minimize the interest rate risk associated with financial instruments with rates.



32 Financial risk management (cont).32.8 Interest rate risk (cont)

ProfileAt the end of the reporting period the interest rate profile of the Company’s interest bearing financial instruments was as follows,

As at 31st March 2013 Carrying amount (Rs.) 2013 2012Fixed rate instruments Financial assets - Fixed deposits (Note 20) 66,449,719 105,233,753 - Call deposits 10,299,480 585,000 - Loan receivable from associate company (Note 18.1) 4,761,443 5,038,107 81,510,642 110,856,860 Variable rate instrumentsFinancial assets - Savings deposits (Note 20) 317,423 - Financial liabilities - Bank overdraft (Note 20) (65) (63) 317,358 (63)

Fair value sensitivity analysis for fixed rate instrumentsThe Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss. A change of 100 basis points in interest rate would have increased or decresed equity by Rs. 815,106 (31st March 2012: Rs. 1,108,569) as at 31st March 2013.

Cash flow sensitivity analysis for variable rate instrumentsA change of 100 basis points in interest rate at the en of the reporting period would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currecy rates, remain constant.

Profit or loss Equity

31st March 2013 100 bp increase 100 bp decrease 100 bp increase 100 bp decrease

Variable rate instruments 3,174 (3,174) 3,174 (3,174)

31st March 2012

Variable rate instruments (1) 1 (1) 1

32.9 Operational riskOperational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the Company’s operations.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each business unit.


notes to the fInanCIaL statements33 GOING CONCERN

The Company has incurred a loss of Rs.26,218,206/- during the year ended 31 March 2013 and as at that date the Company’s accumulated losses amounted to Rs. 59,622,476/-. However, the Board of Directors are of the view that the Company is financially viable to meet its financial obligations in the ensuring the financial year considering the liquid assets of the Company and the future plans. The Company has achieved full factory capacity subsequent to the financial year with the introduction of new buyers and has obtained satisfactory new orders. Further, the overdependence on limited customers has been reduced with the expansion of customer base.

During the year the Company has also been able to settled major portion of pending legal cases. Further as explained in Note 21, the Stated Capital of the Company has been reduced with the approval of shareholders at the EGM held on 04th May 2012 in order to recoup the accumulated losses.

In addition to above, the Company has also taken steps to move on to the new products such as traditional jewellery, plain gold jewellery to enhance the product range and the Company is currently operating at a zero debt basis.

Based on the above analysis, the Board of Directos is of the view that the Company will continue as a going concern.

34 COMPARATIVE FIGURESRestatement of comparative figures A margin on gurantee amounting to Rs. 887,500 has not been recognised in Financial Statements in previous years erroniously. Hence the Company has decided to restate the comparative figures for the years 2012 and 2011 to correct that effect.

Summary of the effects of the restatements from the corrections of the above mentioned error on the previously issued figures are as follows.

2012 2011 Rs. Rs.Increase in cash and cash equivalent 887,500 887,500Decrease in accumulated losses (887,500) (887,500)

Other than the above, the comparative information has been reclassified according to the current year classification wherever, necessesary in order to provide a better presentation.

35 FAIR VALUE OF FINANCIAL INSTRUMENTS

35.1 The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction, other than in a forced liquidation or sale. Classes of financial instruments that are not carried at fair value and at which carrying amounts are a reasonable approximation of fair value Current trade receivables (Note 17), related party receivables (Note 18), cash and cash equivalents (Note 20), other payables and accruals (Note 27), related party payables (Note 26).

The carrying amounts of these financial assets and liabilities are a reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near as at the reporting date.

Fair value of financial instruments by classes that are not carried at fair value and of which carrying amounts are not reasonable approximation of fair value The fair value of financial assets and liabilities by classes that are not carried at fair value and of which carrying amounts are not reasonable approximation of fair value are as follows:



2013 2012Carrying Amount Fair Value

Carrying Amount Fair Value

Rs.'000 Rs.'000 Rs.'000 Rs.'000Financial Assets

Other Receivable 3,077,498 3,077,498 6,256,018 6,256,018

Loan receivable from associate 4,414,876 4,414,876 4,600,728 4,600,728

Fair value information has not been disclosed for these financial instruments carried at cost because fair value cannot be measured reliably.

35.2 The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:

Quoted prices in active markets

for identical

Significant other observable

inputsSignificant

unobservable Total

As at 31 March 2013

Financial assets:

Available-for-Sale Investment 139,350 - - 139,350

35.3 Fair value of financial instruments that are carried at fair valueFair value hierarchyThe table below analyses financial instruments carried at fair value, by the levels in the fair value hierarchy. The different levels have been defined as follows.

Level 1:. quoted prices (unadjusted) in active markets for identical assets or liabilitiesLevel 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Methods and assumptions used to determine fair values The methods and assumptions used by the management to determine the fair values of financial instruments other than those carrying amounts reasonably approximate their fair values as mentioned in Note are as follows:

Instrument Category Fair Value Basis Fair Value HierarchyInvestment in unquoted share Net assets value Level 1

Fair value of financial instruments by classes that are not carried at fair value and of which carrying amounts are reasonable approximation of fair value Current trade and other financial receivables and payables, current and non-current loans and borrowings at floating rate, other bank deposits and cash and bank balances. The carrying amounts of these financial assets and liabilities are a reasonable approximation of fair value, either due to their shortterm nature or that they are floating rate instruments that are re-priced to market interest rates on or near the balance.

36 DIRECTORS RESPONSIBILITY FOR FINANCIAL REPORTING The Board of Directors is responsible for preparing and presenting these Financial Statements in accordance with the Sri Lanka Accounting Standards laid down by the Institute of Chartered Accountants of Sri Lanka and the requirement of the companies Act No 07 of 2007.


Rs.’000For the year ended 31st March 2009 2010 2011 2012 2013Revenue 116,664 6,427 55,039 71,158 83,091 Gross Profit 34,298 102 21,904 18,141 22,220 Profit/(loss) before taxation (18,915) (20,007) (13,510) 14,622 (25,683)Profit/(loss) for the year (19,379) (20,087) (14,214) 11,921 (26,218)

Financial PositionTotal Assets 238,373 209,355 391,343 364,249 319,918

238,373 209,355 391,343 364,249 319,918 Equity 144,043 123,955 315,584 327,449 301,281 Total liabilities 94,330 85,400 75,759 36,800 18,763

238,373 209,355 391,343 364,249 319,918

Other informationEarnings/ (loss) per Share (Rs.) (0.23) (0.11) (0.07) 0.05 (0.10)Net assets per Share (Rs.) 1.72 1.68 1.48 1.28 1.17 Current ratio (Times) 3.62 3.52 5.37 10.60 19.13 Market price per Share (Voting) as at 31st March (Rs.)

1.50 1.90 3.00 6.10 3.00

Market price per Share (Non-voting) as at 31st March (Rs.)

0.40 0.80 1.60 2.70 1.50

Highest price per share during the year (Voting) (Rs.)

3.10 4.40 13.00 13.10 6.30

Highest price per share during the year (Non-Voting) (Rs.)

0.90 1.30 2.60 4.40 2.90

Lowest price per share during the year (Voting) (Rs.)

1.30 1.30 1.90 3.00 2.80

Lowest price per share during the year (Non-Voting) (Rs.)

0.30 0.30 0.70 1.60 1.40

fIve Year performanCe sUmmarY


sharehoLDer InformatIonDISTRIBUTION OF SHAREHOLDING -VOTING ORDINARY SHARES AS AT 31ST MARCH 2013

Shareholdings No of shareholders Total No of shares %

1 - 1,000 10,042 2,441,309 2.36%1,001 - 10,000 2,588 9,123,417 8.83%

10,001 - 100,000 617 19,482,868 18.86%100,001 - 1,000,000 99 25,101,395 24.30%1,000,001 and above 10 47,151,902 45.65%

Total 13,356 103,300,891 100.00%

Categories of Shareholders No of shareholders Total No of shares Individual 13,042 57,788,293 Institutional 314 45,512,598 Total 13,356 103,300,891

Name of Share Holder

No. of shares as at 31st

March 2013 %

No. of shares as at 31st March

2012 %

ECL Soft (Private) Ltd 18,314,791 17.73% 11,336,471 10.97%Sri Lanka Insurance Corporation Ltd - General Fund

10,559,100 10.22% 10,865,900 10.52%

Mr M.I.Samsudeen 3,815,357 3.69% 877,530 0.85%Mr S. Gurusinghe 2,917,540 2.82% 2,867,540 2.78%Ms D.D.J.Lokuge 2,811,156 2.72% - -Ceylinco Insurance Company Ltd (Life Fund) 2,400,300 2.32% 2,400,300 2.32%Ceylinco Insurance Company Ltd (General Fund)

2,400,300 2.32% 2,400,300 2.32%

Mr B.T. Samaraweera 1,418,739 1.37% 686,284 0.66%The Finance Portfolio Management Company Ltd

1,300,000 1.26% 1,300,000 1.26%

PCH Holdings PLC 1,214,619 1.18% - -S & L Investments (Private) Ltd 966,900 0.94% 966,900 0.94%Mr W.S.V.J.W.W.De Silva 899,999 0.87% 1,633,988 1.58%The Finance Co Ltd 838,770 0.81% 838,770 0.81%Mr J.L.B.Kotelawala 819,916 0.79% 819,916 0.79%SMB Leasing PLC 778,280 0.75% 778,280 0.75%Mr R.A.M.M.Ranasinghe 644,533 0.62% - -Mr T.E.I.Wickramasinghe 616,000 0.60% 616,000 0.60%Finance & Guarantee Property Developers (Pvt) Ltd

510,232 0.49% 510,232 0.49%

The Golden Key Credit Card Company Limited 500,000 0.48% 500,000 0.48%Mr A.W.L.R.Silva 480,698 0.47% - -TOTAL 54,207,230 52.48% 39,398,411 38.13%

2013 2012PUBLIC HOLDING 72.05% 78.50%


sharehoLDer InformatIonDISTRIBUTION OF SHAREHOLDING -NON VOTING ORDINARY SHARES AS AT 31ST MARCH 2013

Shareholding No of shareholders Total No of shares % 1 - 1,000 2,262 885,474 0.58%1,001 - 10,000 2,143 9,866,257 6.43%

10,001 - 100,000 1,084 37,077,032 24.18%100,001 - 1,000,000 213 59,621,651 38.87%1,000,001 and above 13 45,919,386 29.94%

Total 5,715 153,369,800 100.00%

Categories of Shareholders No of shareholders Total No of shares Individual 5,598 119,049,173 Institutional 117 34,320,627 Total 5,715 153,369,800

Name of Share Holder


2013 %


2012 %

Seraka Investments Ltd 16,560,000 10.80% 16,560,000 10.80%Mr. K.K. Chandrasena 8,131,295 5.30% 7,237,300 4.78%J.B.Cocoshell (Pvt) Ltd 5,434,414 3.54% - -The Golden Key Credit Card Company Ltd 2,325,000 1.52% 2,325,000 1.52%Mr R.E.Rambukwelle 2,050,000 1.34% 1,650,000 1.08%Mr K.M.A.R.K.Allmuhairi 2,048,600 1.34% 2,048,600 1.34%Mr Nihal Radella 1,861,125 1.21% - -Mr D.Jayawikrama 1,700,000 1.11% - -Mr E.A.Sumanasiri 1,300,000 0.85% 1,300,000 0.85%Mr H.M.C.B.Mavilmada 1,200,000 0.78% - -Dr M.M.Rinoza 1,195,952 0.78% - -Mr M.M Nazeer 1,065,000 0.69% 1,036,000 0.68%Mr H.K.Pushpakumara 1,048,000 0.68% 1,038,000 0.68%Mr U.C.Bandaranayake 1,000,000 0.65% 1,000,000 0.65%Mr M.I.Samsudeen 997,690 0.65% - -Ceylinco Capital Investment Co. (Pvt) Ltd 987,906 0.64% 987,906 0.64%Mr U.L.M.Nowfar 980,307 0.64% - -Mr S.H.M.Sajahan 930,000 0.61% - -Mr E.J.A.G.Fernando 857,000 0.56% - -The Finance & Guarantee Company Limited 840,000 0.55% 840,000 0.55%TOTAL 52,512,289 34.24% 36,022,806 23.56%

2013 2012PUBLIC HOLDING 89.20% 89.20%


NOTICE IS HEREBY GIVEN that the Twenty Third Annual General Meeting of Blue Diamonds Jewellery Worldwide PLC will be held at YMCA International Hotel, No. 1374, Negombo Road, Kurana, Katunayake on Monday 30th September 2013 at 9.00 a.m.

AGENDA

1. To receive and consider the Report of the Directors and the Statements of Accounts for the year ended 31st March 2013 together with the Report of the Auditors thereon.

2. To re-elect Mr. W.M.R.B. Bandara, who retires in terms of Article 86 of the Articles of Association of the Company.

3. To re-elect Mr. W. D. J. R. Silva in terms of Article 92 of the Articles of Association of the Company.

4. To re-elect Mr. S. A. Hettiarachchi in terms of Article 92 of the Articles of Association of the Company.

5. To re-appoint Messrs. KPMG, Chartered Accountants as the Auditors of the Company and to authorize the Board of Directors to determine their remuneration for the ensuing financial year ending 31st March 2014.

By Order of the Board of

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

SECRETARIES P. R. SECRETARIAL SERVICES (PRIVATE) LIMITED Colombo 22nd August 2013

NOTE:

*A member of the Company is entitled to appoint a proxy to attend and vote on his or her behalf.*A proxy need not be a member.*A proxy form which is enclosed should be deposited at the registered office of the Company not less than

48 hours before the meeting.

notICe of annUaL GeneraL meetInG


form of proXYI/ We ……………………………………………………………………………………… of …………………………………………………………………………………………… being a member/ members of Blue Diamonds Jewellery Worldwide PLC hereby appoint…………………………………………………………………………… of……………………………………………………………… or failing him/her

Mr.J.H.P. Ratnayeke of Colombo failing him

Mr.B.M.A.L.A.Fernando of Colombo failing him

Mr.W.M.R.B.Bandara of Kandana failing him

Mr. W. D. J. R. Silva of Nawala failing him

Mr. S. A. Hettiarachchi of Nugegoda failing him

as my/ our proxy to represent me/us to vote for me/us and on my/ our behalf at the 23rd Annual General Meeting of the Company to be held on 30th September 2013 and at any adjournment thereof and at every poll which may be taken in consequence thereof.

Agenda Items For Against

1. To receive and consider the Report of the Directors and the Statements of Accounts for the year ended 31st March 2013 together with the Report of the Auditors thereon.

2. To re-elect Mr. W.M.R.B. Bandara, who retires in terms of Article 86 of the Articles of Association of the Company.

3. To re-elect Mr. W. D. J. R. Silva in terms of Article 92 of the Articles of Association of the Company.

4. To re-elect Mr. S. A. Hettiarachchi, who retires in terms of Article 92 of the Articles of Association of the Company.

5. To re-appoint Messrs. KPMG, Chartered Accountants as the Auditors of the Company and to authorize the Board of Directors to determine their remuneration for the ensuing financial year ending 31st March 2014.

Signed this ……………………………………………….. day of ………………………………… 2013.

……………………………………………………

Signature of shareholder

NOTE *Instructions as to completion are noted on the reverse hereof.


InstrUCtIons to CompLetIon of form of proXY

1. Kindly perfect the Form of Proxy by legibly filling your full name and address, signing in the space provided, and filling in the date of signature.

2. If the Proxy Form is signed by an Attorney, the relative Power of Attorney should also accompany the Proxy Form for registration, if such Power of Attorney has not already been registered with the Company.

3. In the case of Company/ Corporation, the Proxy must be filled and attested in the legally prescribed manner.

4. The completed Form of Proxy should be deposited at the office of the Company Registrars, Messrs. S. S. P. Corporate Services (Private) Limited, No. 101, Inner Flower Road, Colombo 3, not less than 48 hours before the meeting.

5. A shareholder appointing a proxy (other than a Director of the Company) to attend the meeting should indicate the Proxy holder’s National Identity Card (NIC) number on the Form of Proxy and request the Proxy holder to bring his/her National Identity Card with him/her.

Please provide the following details

Shareholder’s NIC No. …………………………………

No. of shares held ………………………………………

Proxy holder’s NIC No. (If not a Director of the Company)

………………………………………………………….

Documents

CONTENTS › cmt › upload_report_file › 663_1378460739.pdf · 2016-09-29 · 7.10.1. (a) Non-Executive Directors Two or one third of the total no. of Directors shall be non-executive