CONTENTS

WHO WE ARE, VISION, CULTURE AND VALUES 3

MANUFACTURING & PLANTATIONS 4–6
AT A GLANCE 7
PROFILES OF DIRECTORS 8
CHAIRMAN’S REVIEW 9
MANAGEMENT DISCUSSION ANALYSIS 10–12
REPORT ON THE CORPORATE GOVERNANCE 13–20
AUDIT COMMITTEE REPORT 21–22
RELATED PARTY TRANSACTIONS REVIEW COMMITTEE REPORT 23
REMUNERATION COMMITTEE REPORT 24
NOMINATION COMMITTEE REPORT 25
RISK MANAGEMENT 26–30
SUSTAINABILITY REPORT 31–32
REPORT OF THE DIRECTORS 33–37
STATEMENT OF DIRECTORS RESPONSIBILITY 38

FINANCIAL REPORTS
INDEPENDENT AUDITOR’S REPORT 39–43
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 44
STATEMENT OF FINANCIAL POSITION 45
STATEMENT OF CHANGES IN EQUITY 46–47
STATEMENT OF CASH FLOWS 48
NOTES TO THE FINANCIAL STATEMENTS 49–112

REAL ESTATE PORTFOLIO 113

FIVE YEAR SUMMARY 114
SHAREHOLDER AND INVESTOR INFORMATION 115–117
NOTICE OF MEETING 120
FORM OF PROXY 121

1
2
A PROUD SRI LANKAN
Our brands are household names in Sri Lanka, known and loved by the thousands who have depended on us for
decades. Yet, not everyone knows how our success story has evolved; the deep rooted heritage of a truly home
grown company, the local understanding and strength of our impact on many people’s lives.

WHO In 1990, a seed was planted for a Sri Lankan company that had a
thriving desire to branch out into value addition in our agricultural

WE
sector, drawing on the expertise of Renuka Enterprises since 1975 and
the families’ involvement in agriculture since the last century.

The Company was listed on the Colombo Stock Exchange in 1994.

Through acquisitions the company now traces its roots to 1866
becoming one of Sri Lankans oldest food and beverage corporates.

ARE
Renuka Foods PLC is the parent company of our Food and Beverage
businesses consisting of the segments of Agri Food Exports
(manufacturing, Organic Plantations) and Consumer Brands (Dairy,
,
FMCG manufacturing & distribution).

VISION
To be a leading Sri Lankan food & Beverage company,
making food you love.
,

CULTURE Renuka’s culture reflect more than a structure, it is a statement of values. Our
commitment to a Responsive, Enterprising, Nurturing, Unrelenting,

AND
Knowledgeable and Accountable workplace enables us to build relationships
with clients and with colleagues, on honesty and trust. It drives our ability to
deliver great products and services and to generate superior long-term financial

VALUES
performance for our shareholders.

RENUKA FOODS PLC

Annual Report 2021/22
3
 RENUKA FOODS PLC
4 Annual Report 2021/22
RENUKA FOODS PLC
Annual Report 2021/22
5
 16.53% 16.77% 0.04% 1.88% 60.88% 3.54% 0.36%

MIDDLE EAST

RENUKA FOODS PLC

6 Annual Report 2021/22
 10,695 LKR (Mn.)
12,000,000 10,695 Mn
10,000,000 Revenue in year
8,000,000 2021/22
6,000,000
4,000,000
2,000,000 733 Mn
2018 2019 2020 2021 2022
Profit in year
-2,000,000
Group Revenue Profit after tax
2021/22

Net Profit
733
10,858 Mn
1 0,000,000
LKR (Mn.)
12,000,000
10,000,000 Total Assets
8,000,000 in Year 2021/22
6,000,000
4,000,000

2,000,000
4,953 Mn
-
Total Liabilities
2018 2019
Total Assets
2020 2021
Total Liabilities
2022
in Year 2021/22

10,858

LKR (Mn.)
7,000,000 5,905 Mn
6,000,000 Total Equity
5,000,000 in Year 2021/22
4,000,000
3,000,000
2,000,000 1,169 Mn
1,296 1,000,000
-
2018 2019 2020 2021 2022
Non - Current Liabilities
in Year 2021/22
Total Equity Long Term Liabilities

RENUKA FOODS PLC

Annual Report 2021/22
7
 PROFILE OF DIRECTORS
Dr. S.R Rajiyah Mr. V. Sanmugam Dr. J.A.S. Felix

Dr. S.R Rajiyah is the Executive Mr V. Sanmugam is an Executive Dr J. A. S. Felix is an Independent

Chairman of the Company. He is Director of the Company and he Non-Executive Director of the
also the Group Managing Director holds a Bachelor of Engineering Company. He was awarded LLB
of Renuka Holdings PLC and the Degree from the Mangalore (Honours) degrees by the University
Executive Chairman of Renuka Agri University. He counts over 35 years of Colombo and the University of
Foods PLC. Chairman of Shaw Wallace of industrial work experience, out London in 1994. He was admitted
Ceylon Ltd and Richlife Dairies of which, 24 years have been with and enrolled as an Attorney-at-Law
Ltd and other Companies of the the Renuka Group Companies. He of the Supreme Court of Sri Lanka
Renuka Group. He is medical doctor has extensive experience in New in 1996. He was awarded a PhD
qualified in Sri Lanka and counts over Plant Establishment, Project Planning degree by the University of London
40 years of corporate experience in & Management, Supply Chain/ in 2000. He is a Fellow of the Society
operations, quality management, Inventory Management, Statutory for Advanced Legal Studies of the
research and development as well as & Regulatory Compliance, besides University of London, Fellow of the
in founding and running businesses. others. He is also a Non-Executive Sri Lanka Institute of Taxation (FTII)
Director of Renuka Holdings PLC, and a Fellow of the Royal Society of
Renuka Agri Foods PLC, Shaw Arts, London (FRSA). He is a member
Mrs. I.R Rajiyah Wallace Ceylon Ltd and Richlife of the Taxes Committee, the Human
Dairies Ltd. Rights Law Committee and the Public
Mrs. I.R Rajiyah is the Deputy Executive Law Committee of the International
Chairperson of the Company. She is Mr. M. S. Dominic Bar Association. He is a member of
qualified in Business Studies from the the Society of Legal Scholars of the
United Kingdom and is a fellow of the Mr. M.S. Dominic is an Independent United Kingdom and Ireland.
British Institute Management. She Non-Executive Director and holds
counts over 40 years of corporate a BSc (Hons) degree in Computer
experience in founding and running Science from the University of South
businesses. She is also the Executive Bank, United Kingdom. He has
Chairperson of Renuka Holdings PLC over 38 years of experience in the
and Deputy Executive Chairperson Information Technology field. He is
of Renuka Agri Foods PLC, a Director also Director of Galle Face Properties
of Shaw Wallace Ceylon Ltd, Richlife Ltd, Renuka Foods PLC, Galle Face
Dairies Ltd and Companies of the Capital Partners PLC and Sithijaya
Renuka Group. Fund. He is a trustee of the George
Keyt Foundation.

Mr. S.V. Rajiyah

Mr. T.K. Bandaranayake
Mr. S.V. Rajiyah is the Managing
Director of the Company. He is also Mr. T.K. Bandaranayake is an
the Managing Director of Renuka Independent Non-Executive Director
Holdings PLC and Renuka Agri Foods of the Company. He is a Fellow
PLC, Shaw Wallace Ceylon Ltd , Member of the Institute of Chartered
Richlife Dairies Ltd and Director of Accountants of Sri Lanka. He was
Companies of the Renuka Group. in public practice with Ernst &
He is also the Executive Chairman of Young for 27 years since 1982. He
Shaw Wallace Investments PLC and was a Senior Partner managing a
Galle Face Capital Partners PLC. He is large portfolio of clients. He is also
a graduate in Management from the a Director of Renuka Holding PLC,
Warwick Business School, University Nawaloka Hospitals PLC, Overseas
of Warwick, United Kingdom. He Realty (Ceylon) PLC, Havelock City
has over 20 years of experience in (Pvt) Ltd, Mireka Capital Land (Pvt)
General Management. Ltd, Mireka Homes (Pvt) Ltd, Samson
International PLC, Harischandra Mills
PLC, Micro Holdings Ltd. and Browns
& Company PLC.

RENUKA FOODS PLC

8 Annual Report 2021/22
CHAIRMAN’S REVIEW
RENUKA FOODS to mention that the Sri Lankan Rs. 384 Mn during the previous year.
Government announced a standstill on
On behalf of the Board of Directors all foreign debt in April 2022 in order to A continued commitment to build
I take pleasure in inviting you, our preserve foreign exchange to purchase mutually beneficial partnerships
valued shareholders, to the 32nd essential imports strengthens our relationships
Annual General Meeting of the across our networks. We export to
Company and wish to present to Consumer discretionary spending 52 countries where we have built
you the Annual Report and Audited deteriorated significantly during the strong long-term understandings
Financial Statements for the year calendar year 2021 and worsened with our distributors and direct B2B
ended 31st March 2022. As you already in 2022 due the severe economic customers. Our islandwide network
are aware, the year in review was a conditions, with the central bank of over 70,000 retail outlets backed
period of unprecedented challenges forecasting may inflation may increase by over 160 distributors ensured
to the world at large and especially to to 70%, in the coming year. The financial availability of our products in local
Sri Lanka with an acute economic and year commenced with fuel shortages communities. The retail outlets are
political crisis which is still ongoing at which became severe and disrupted typically microentrepreneurs while the
the time of writing this message which movement of the public and services. distributors include a number of SME’s
is affecting all citizens and businesses thus hampering most of the company’s and we engage with them continuously
in the country. distribution operations as well within to support their growth. Renuka works
Sri Lanka. with small to medium scale farmers
The Sri Lankan Economy to procure its requirement of organic
The Group certified coconut, dairy, corn, rice,
The Sri Lankan economy after one of treacle and spices supporting their
the turbulent years in recent times During the year, the company faced growth through sustained programmes
following the outbreak of the Covid 19 challenges in sourcing key raw for knowledge sharing, financial
rebounded during 2021 expanding 3.7% materials; coconut and milk, stemming assistance and capacity building
after a 3.6% contraction in 2020. The from Covid related restrictions in the
agriculture sector which is the largest second and third quarter, which in turn At Renuka Foods, we see these as
in terms of employment expanded led to an increase in production costs. temporary setbacks and we remain
2.0%, while industry grew 5.3% and Further, the informal restrictions on bullish on the future of Sri Lanka. That is
services grew 3.0%. However, 2022 will the import of canned fish significantly why we made significant investments
be one of the toughest for Sri Lanka, affected our top line. Cost control in FY 2021/22, laying the foundation
as the country faces an acute foreign and cashflow management was a key for the future of our group and aiming
exchange shortage coupled with priority during the year and the Group towards where we believe the country
political instability which is threatening sought to minimize costs whereever is headed. Some of the key group
to bring economic activity to a grinding possible and control debtors to investments were construction of
halt. The instability in Europe, supply manage cashflows. Volatile market an automated integrated coconut
chain disruptions, and a looming global dynamics necessitated a curtailment primary processing unit in its the
recession could aggravate the current of advertising and promotion costs Export Processing Zone, setting up
situation as foreign direct investment, during the year. Meanwhile, we new manufacturing lines in respect of
tourism, and export growth could incurred additional costs to implement cheese and enhancement of the fish
be curtailed. Though annual average stringent health and safety standards canning facility
inflation in 2021 was only 7%, year-on- in ensuring the well-being of our
year inflation at the end of December employees. A detailed scrutiny of costs In Conclusion
was 14%. The Central Bank of Sri Lanka was undertaken by the management to
decided to allow the Sri Lankan rupee identify areas of potential savings. I take this opportunity to express my
to float in March 2022, which led to a sincere gratitude to all our employees
sharp depreciation of the currency. Despite the challenges faced the for their contribution and acknowledge
The rupee which was trading in the Group was able to report a turnover the cooperation and support received
198–200 range to the US dollar during of Rs. 10.7 Bn against the previous year from all my fellow Directors. On behalf
2021 is now trading at 350. The sharp turnover of Rs. 8.7 Bn, reporting a year of the Board of Directors I thank all the
depreciation, rising fuel costs, and on year growth of 23 %. The Group has Shareholders & the Stakeholders for
increasing raw material prices across reported an operating profit of Rs. 805 the trust and confidence placed in the
the world have led to inflation rising to Mn, compared to the operating loss of Company.
45% as at May 2022. With the Central Rs. 284 Mn of the previous year, despite
Bank hiking interest rates by 700bps in the fact that the administration and
early April, it is anticipated that inflation selling & distribution expenses having Sgd.
will start to trend downwards towards increased by 9.46% compared to the Dr.S.R.Rajiyah
the 2nd quarter of the upcoming previous year. The Group reported a Chairman
financial year. It is also noteworthy Profit of Rs.733 Mn against the loss of 12th August 2022

RENUKA FOODS PLC

Annual Report 2021/22
9
 MANAGEMENT DISCUSSION ANALYSIS
Operating Environment measures imposed locally The following aspects were
and internationally, with a discussed pertaining to the primary
• The Sri Lankan economy view to preventing the spread macro – economic variables during
expanded by 3.7% in real terms of COVID-19 and economic the year under review and the
in 2021, against the real GDP condition hampered real resultant impacts on the performance
contracted of 3.61% recorded economic activity across all of Renuka Foods PLC.
in 2020. Mobility restrictions sectors.
and other containment

Movement Cause Impact to Renuka Foods PLC

Economy
GDP has increased by 3.7% for All sectors of the economy has expended Due to the pandemic
the year ended 2021 compared during 2021 (agriculture, forestry and fishing situation and significant
to negative GDP growth of 3.6% by 2.0%, industry by 5.3%, and services by changes in the government
In year 2020. 3%), compared to the previous year. policies, the Agri Food
Exports segment of the
Investment and consumption expenditure Company had to encounter
grew in 2021, while net external demand with constraints in supplies
weakened. Gross capital formation in main raw materials
(27.7% of GDP), which registered a and further resulted in an
contraction of 4.2% in 2020, expanded increase in main raw material
by 23.2% in 2021. Net external demand for prices, also the Consumer
goods and services contracted by 31.6%, Brands segment of the
reflecting the higher growth for import of Company, had to encounter
goods and services than exports. However, with lot of disruptions
consumption expenditure (79.9% of GDP) in manufacturing and
recorded a significant increase of 9.9% in distribution of its products
2021 compared to the growth of 2.0% in 2020 on account of the pandemic
situation.
Inflation
Year-on-year core inflation Inflation accelerated in 2021 driven mainly by The company managed to
based on the CCPI and the global and domestic supply side disturbances, maintain its margins despite
NCPI accelerated to 12.1% and the surge in global commodity prices and rise in raw materials and
14%, respectively, by end 2021, upward revisions to administered prices. Both other Services as a result of
compared to 4.2% and 5.6%, food and non food inflation has accelerated it's pricing strategies.
recorded at the end of 2020, and food inflation accounted for a larger
respectively. share. Several upward revisions made to
energy prices and other administrative prices
reflected the rise in prices in the international
market as well as volatile food prices
stemming from the pandemic related supply
side disruptions and the loss of production
of certain items, mostly contributed to such
acceleration in inflation. Spillover of the
aforementioned revisions alongside external
shock absorption methods, such as the
removal of maximum retail prices also partly
contributed to the rise in inflation.

RENUKA FOODS PLC

10 Annual Report 2021/22
MANAGEMENT DISCUSSION ANALYSIS (Contd...)

Domestic Interest Rates

Due to the tightening monitory To preempt the build-up of excessive Although cost of borrowing
policy stance from August 2021 inflationary pressures over the medium term increased during the year,
by The Central Bank, to overall and to address imbalances in the external the Company was able
interest rates has increased. sector and financial markets, measures were to minimize the impact
taken to commence tightening the monetary due to better Treasury
policy stance from August 2021 onwards. Management.
Accordingly, the key policy interest rates,
i.e., the Standing Deposit Facility Rate (SDFR)
and the Standing Lending Facility Rate (SLFR)
were raised by 50 basis points to 5.00 per
cent and 6.00 per cent, respectively, in mid-
August 2021, and the Statutory Reserve Ratio
(SRR) applicable on all rupee deposit liabilities
of Licensed Commercial Banks (LCBs) was
raised by 2 percentage points to 4.00 per
cent, effective from September 2021.

Exchange Rates
Exchange rate was maintained The external sector imbalances are largely Depreciation of the Rupee
at around Rs. 200 – 203 per US reflected by the dried up liquidity conditions in had negatively impact
dollar during most of 2021 and the domestic foreign exchange market, series on our import payments
until early March 2022. of sovereign rating downgrades along with however this contributed
the precarious level of international reserves positively towards the
that have exerted significant depreciation company’s export turnover
pressures on the exchange rate. While the growth.
exchange rate was maintained at around Rs.
200 – 203 per US dollar during most of 2021
and until early March 2022, mainly through
moral suasion by the Central Bank, a notable
development of parallel markets for foreign
exchange was observed. However, following
the adjustment in the exchange rate in early
March 2022 and subsequent market pressure,
the Sri Lanka rupee depreciated sharply by
33.0 per cent against the US dollar by end
March 2022.
Share Market

The Colombo Stock Exchange This was mainly supported by the improved Due to the improvements
(CSE) recovered from the appetite of domestic investors for equity in the Colombo Stock
significant decline recorded at investment, despite net outflows of foreign Exchange the Share pries
the onset of the pandemic, to investment from the CSE in 2021. of the Company increased
record a notable improvement from the previous year.
since mid-July 2020.

RENUKA FOODS PLC

Annual Report 2021/22
11
 MANAGEMENT DISCUSSION ANALYSIS (Contd...)

Capital Management Review networks which comprises mainly Intellectual Capital

Managing our capital according of small and medium scale farmers. Intellectual Capital is the group
to a structured process is key to In addition we advocate sustainable knowledge assets that are
our continued success. The capital agricultural practices with the attributed to an organisation and
reports below, gives a summary objective of preserving forestry and most significantly contribute to an
description of our capital resources. bio diversity. improved competitive position of
an organisation by adding value
Financial Capital Management of natural capital is to defined stakeholders (Marr &
During the financial year under a critical imperative as it accounts Schiuma, 2001). The Renuka Group
consideration, the revenue of the for significant portion of our total which the Company belongs to,
Group increased from Rs. 8.7 Bn assets. We are heavily dependent on trace its roots to 1866 and gradually
to Rs. 10.7 Bn where the growth is natural resources, water and energy built its solid businesses pillars
22.98%. are significantly impacted by climate owning many brands striving in local
change in our plantations. and export markets. Such a built up
Manufactured Capital knowledge is used in many aspects
We also seek to manage our and able to invest in wider range of
Deriving our revenue mainly from
consumption of materials, water and business operations while growing
manufactured products we are
energy to reduce cost of production the Group as a whole.
conscious of the importance of
and our impact on the environment.
ensuring that our manufacturing
capabilities are expanded, upgraded Our intellectual capital enables us to
Human Capital compete effectively in local and
and maintained according to a
carefully orchestrated plan to deliver The Group strongly believes global markets shaping our brand
growth and future sustainability. in people development and equity.
encourages knowledge sharing. As
Our manufactured capital comprises a result management launched its Outlook
of building, plant & machinery and organization structures and strategy Due to the prevailing economic and
other items including motor vehicles, for 2020 to its senior management political situation lot of challenges
furniture & fittings and tools and team and emphasized the roles that are currently presented. However
equipment. each one of our employee needs with the existing negotiation with
to play in the coming years. Having International Monetary Fund by the
Natural Capital sought insights from internal and government of Sri Lanka , the external
external stakeholders, some of the factors will be normalized to carry
Environmental sustainability is highly
business processes, operations and out the business in the foreseeable
regarded and embedded into the
departments reporting have been future.
corporate governance framework of
revisited and streamlined.
the Renuka group whilst managing
the natural resources and meeting
Social and Relationship Capital
corporate obligations towards
protecting the environment around In today’s dynamic and competitive
us. business environment, Corporate
Sustainability links with social
Focus on energy management, responsibility and the strength of the
waste management, maintaining stakeholder relationships.
clean business environment, water
management are few initiatives The companies in the Group mainly
taken by the Group during the year. depend on the co-ordination
We also embarked on “Net Plus” of the society and surrounding
solar power project at our factories environment. In turn, it benefits all
by installing roof top solar panels the companies in the Group in many
with a view of reducing electricity ways.
consumption within the Group.
At present the Group is entrenched
We have also developed and in the rural economy touching the
integrated our sourcing of milk. lives of families across the nation.
Coconut, corn, soya, rice and spices
with our own plantations and farmer

RENUKA FOODS PLC

12 Annual Report 2021/22
REPORT ON THE CORPORATE GOVERNANCE
Corporate Governance is system of Internal Governance Structure The Board gives leadership in
rules, practices and processes by setting the strategic direction
which a company is directed and Board of Directors and establishing a sound control
controlled. Corporate Governance The Board of Directors are the framework for the successful
essentially involves balancing the ultimate governing body of the functioning of the Company.
interests of the many stakeholders Company with diverse experience,
in a company – these include professionalism and has a wide range The Boards composition reflects a
its shareholders, management, of expertise in various fields as set sound balance of independence.
customers, suppliers, financiers, out on page 8.
government and the community. COMPOSITION OF THE BOARD AND
Since Corporate Governance The Board is responsible for the DIRECTORS INDEPENDENCE
also provides the framework for ultimate supervision of the Group. Composition of the Board of Directors
attaining a company’s objectives, In all action taken by the Board, as at 31st March 2022 consists of 7
it encompasses practically every Directors are expected to exercise members of which
sphere of management, from their business judgment considering • 4 Executive Directors
action plans and internal controls the best interest of the Company. • 3 Non-Executive Independent
to performance measurement and The Directors participate in defining Directors
corporate disclosure. The Company goals, visions, strategies and
holds itself accountable to the business targets. The Independence of the Directors
highest standards of Corporate are measured in accordance with the
Governance and provides public Listing Rules of the Colombo Stock
accessibility to the information of the Exchange and the Independent Non-
Company. Corporate Governance Executive Directors has submitted
has been institutionalized at all signed confirmation of their
levels in the Group through a strong Independence.
set of corporate values which have
been adhered to by the senior Name of Director Executive Non – Executive Independent
management and Board of Directors Dr. S.R. Rajiyah 9
in the performance of their official
Mrs. I.R. Rajiyah 9
duties and in other situations which
could affect the Group image. The Mr. S.V. Rajiyah 9
Group is committed to the highest Mr. V. Sanmugam 9
standards of integrity, ethical Mr. T.K. Bandaranayake 9 9
values and professionalism in all its Mr. M.S. Dominic 9 9
activities. Dr. J.A.S. Felix 9 9
In Renuka Foods Group, we set our
BOARD RESPONSIBILITIES
framework of Corporate Governance
in line with Code of Best Practice on The Board aims at fulfilling its responsibilities by creating value for all
Corporate Governance issued by the stakeholders that is sustainable and beneficial. Under the direction of the
Institute of Chartered Accountants Executive Directors and oversight of the Board, the business of the Company
of Sri Lanka and the rules set out in is conducted by its managers, officers and employees to enhance the long
the Colombo Stock Exchange Listing term value of the Company.
rules and also comply with the
country’s legislative and regulatory
requirements.

RENUKA FOODS PLC

Annual Report 2021/22
13
 REPORT ON THE CORPORATE GOVERNANCE (Contd...)

The Board meets regularly and gives Name of Director Eligible to attend Non – Executive
full consideration to the following:
Dr S.R. Rajiyah (Chairman) 3 3/3
• Review strategic and operational Mrs I.R. Rajiyah 3 3/3
issues Mr. S.V. Rajiyah 3 3/3
• Approve interim and annual
Ms. A.L. Rajiyah 3 0/3
budgets
• Review profit and working Mr. M.S. Dominic 3 3/3
capital forecasts and monthly Mr. T.K. Bandaranayake 3 3/3
management accounts Mr. V. Sanmugam 3 2/3
• Provide advice and guidelines to Dr. J.A.S. Felix 3 3/3
senior managers
Mr. P. Gunathilake (Alternative
• Approve major Investments 3 3/3
director to Ms. A.L.Rajiyah)
• Approve interim and annual
reports Ms. A.L.Rajiyah and Mr. P. Gunathilake alternative director to Ms. A.L.Rajiyah
resigned w.e.f 31/03/2022
BOARD BALANCE
The balance of Executive, Non- Audit Committee attendance for the year was as follows :
Executive and Independent Non-
Executive Directors on the Board Name of Director Eligible to attend Non – Executive
who are professionals/academics/ Mr. T.K. Bandaranayake (Chairman) 4 4/4
business leaders holding senior Mr. M.S. Dominic 4 4/4
positions in their respective Dr. J.A.S. Felix 4 4/4
fields ensures a right balance
between executive expediency
Related Party Transactions Review Committee (RPTRC) attendance for the
and independent judgment as no
year was as follows:
individual Director or small group
of Directors dominate the Board Name of Director Eligible to attend Non – Executive
discussion and decision making. Mr. T.K.Bandaranayake (Chairman) 4 4/4
Mr. M.S.Dominic 4 4/4
Directors are provided with monthly
reports of performance and minutes Mr. J.M.Swaminathan 4 4/4
of the Board Meetings and are
given the specific documentation The Remuneration Committee attendance for the year was as follows :
necessary, in advance of such Name of Director Eligible to attend Non – Executive
meetings. Mr. M.S. Dominic Chairman 1 1/1
Mr. L.M.Abeyawickrama 1 1/1
There is a distinct and clear division
of responsibilities between the Mr. T.K.Bandaranayake 1 1/1
Chairman and the Management to Dr. J.M.Swaminathan - -
ensure that there is a balance of Note : Mr. L. M. Abeyawickrama resigned w.e.f 07/01/2022 and Dr. J. M.
power and authority. The roles of the Swaminathan appointed on 07/01/2022
Chairman and the management are
separated and clearly defined. The
Chairman is responsible for ensuring The Nomination Committee attendance for the year was as follows :
Board effectiveness and conduct Name of Director Eligible to attend Non – Executive
whilst the Management has overall Mr. M.S. Dominic - Chairman 1 1/1
responsibilities over the operating
Mr. T.K.Bandaranayake 1 1/1
units, organizational effectiveness
and implementation of Board policies Mr. L.M.Abeyawickrama 1 1/1
and decisions. Mrs J.J.B.A. Rajiyah - -
Note: Mr.L.M.Abeyawickrama resigned w.e.f 07/01/2022 and Mrs J J B
BOARD MEETINGS AND ATTENDANCE A Rajiyah appointed on 07/01/2022. Mr.M.S. Dominic appointed as Chairman
There were 3 Board Meetings for w.e.f 07/01/2022.
the year ended 31st March 2022
and attendance at meetings was as
follows:

RENUKA FOODS PLC

14 Annual Report 2021/22
REPORT ON THE CORPORATE GOVERNANCE (Contd...)

APPOINTMENT AND RE-ELECTION RELATED PARTY TRANSACTIONS SHAREHOLDER RELATIONS

OF DIRECTORS REVIEW COMMITTEE
The Board considers the Annual
The Company’s Articles of The related Party Transactions review General Meeting as a prime
Association call for one third of the committee was established on 1st opportunity to communicate with
Non- Executive Directors to retire at January 2016 with an objective of shareholders. The Shareholders are
each Annual General Meeting and keeping in line with the Code of Best given the opportunity of exercising
the Director who retires are those Practice on Corporate Governance their rights at the Annual General
who have served for the longest and the requirement of the Listing Meeting. The notice of the Annual
period after their appointment/ re- Rules of Colombo Stock Exchange General Meeting and the relevant
appointment. with a view to ensure that the documents required are published
interests of shareholders as a whole and sent to the shareholders within
PROCEDURE FOR DIRECTORS TO are taken into account by Renuka the statutory period. The Company
OBTAIN PROFESSIONAL ADVICE Foods PLC and its subsidiaries and circulates the agenda for the meeting
The Directors obtain independent are consistent with the Listing and shareholders vote on each
and professional advice with regard Rules of Colombo Stock Exchange issue separately. All shareholders
to decision making in their duties. when entering into Related Party are invited and encouraged to
Transactions and make required participate at the Annual General
BOARD COMMITTEES disclosures in a timely manner. Meeting. The Annual General
Meeting provides an opportunity
To assist the Board in discharging its The Related Party Transactions for shareholders to seek and obtain
duties various Board Committees are review committee of Renuka Foods clarifications and information on the
established. The functions and terms PLC is the same committee of the performance of the Company and to
of references of the Board Committee ultimate parent, Renuka Holdings informally meet the Directors. The
are clearly defined and where PLC appointed with effect from 3rd external Auditors are also present at
applicable, and comply with the August 2016, by and responsible the Annual General Meeting to render
recommendation of the Code of Best to the Board of Directors, The Report any professional assistance that may
Practice on Corporate Governance. of the Related Party Transactions be required. Shareholders who are
Review Committee is presented on not in a position to attend the Annual
AUDIT COMMITTEE page 23. General Meeting in person are
The Audit Committee reviews issues entitled to have their voting rights
of accounting policy and presentation REMUNERATION COMMITTEE exercised by a proxy of their choice.
for external audit function and The Remuneration Committee is
ensures that an objective and The Company publishes
responsible for developing the
professional relationship is interim financial statements in
Group’s remuneration policy and
maintained with the external a timely manner as its principle
determining the remuneration
auditors. Its principal function is to communication with shareholders
packages of executive employees
assist the Board in maintaining a and others. This enables stakeholders
of the Group. The Committee
sound system of internal controls. to make a rational judgment of the
recommends to the Board and its
The Committee has full access to the Company.
subsidiaries the remuneration to be
external auditors who, in turn, have paid to Key Management Personnel.
access at all times to the Chairman INTERNAL AUDIT AND CONTROL
of the Committee. The Committee The Remuneration Committee of The Board is responsible for the
meets with the external auditors Renuka Foods PLC is the same Group’s internal control and its
without any executive present at committee of the ultimate parent, effectiveness. Internal control is
least once a year, in line with good Renuka Holdings PLC appointed established with emphasis placed on
Corporate Governance Practice. by and responsible to the Board of safeguarding assets, making available
Directors, it consists of two Non- accurate and timely information and
The Report of the Audit Committee is Executive Independent Directors imposing greater discipline in
presented on pages 21 and 22 and and one Non-Executive Director. decision making. It covers all
the duties of the Audit Committee The Managing Director may also be controls, including financial,
are included therein. invited to join in the deliberation operational and compliance
as required. The Chairman of the control and risk management. It is
Committee is an Independent Non- important to state, that any system
Executive Director. can ensure only reasonable and

RENUKA FOODS PLC

Annual Report 2021/22
15
 REPORT ON THE CORPORATE GOVERNANCE (Contd...)

not absolute assurance that errors the Audit Committee ensure effective is adopted in the preparation of the
and irregularities are prevented or usage of the expertise of the auditors, Financial Statements.
detected within a reasonable time. whilst maintaining independence, in
order to derive transparent Financial CORPORATE GOVERNANCE
The Group's internal audit function Statements. This Group maintains COMPLIANCE STATEMENT
is headed by the Manager Internal independence from financial and non
Renuka Foods PLC is fully complied
Audit and report of the Internal financial interest between auditors
with the Corporate Governance
Audits together with management and re-assesses the same on a
listing requirement of the Colombo
comments are discussed with the regular basis.
Stock Exchange and adheres to the
Audit Committee. Further at each
different regulating authorities.
meeting follow up issues from MAJOR TRANSACTION
previous meetings are also discussed z Companies Act No.7 of 2007
There are no transactions during the
in order to ensure implementation of z Code of Best Practices on
year under review which fall within
appropriate policies and procedures Corporate Governance issued
the definition of ‘Major Transaction’
as a prevention mechanism. jointly by the CA Sri Lanka
in terms of the Companies Act. No.
and the Securities & Exchange
07 of 2007.
EXTERNAL AUDIT Commission of Sri Lanka
zInland Revenue Act
The Group uses four Professional GOING CONCERN
z Exchange Control Act
Accounting Firms for its external
The Directors, upon making necessary z Board of Investment Regulations
audits. Some of them provide
inquiries and reviews including z Customs Ordinance
nonassurance services to the Group.
reviews of the Group budget for the
The restrictions provided in terms
following year, capital expenditure Extent of Compliance with the
of rulings issued by CSE and other
requirements and available financing Listing Rules set out in Section 7.10
commitments were taken into
facilities, have a reasonable of the Colombo Stock Exchange’s
consideration when entering into
expectation of the Company’s on Corporate Governance, are
engagements with the Group
existence in the foreseeable future. summarized below. (Mandatory
auditor.
Provisions – Fully Complied).
Therefore, the going concern basis COMPLIANCE SUMMARY
The Knowledge and experience of
Extent of Compliance with the Listing Rules set out in Section 7.6 of the Colombo Stock Exchange’s Corporate
Governance and Annual Report Disclosures.
Compliance
CSE Rule
Corporate Governance Principles Status Company’s Extent of Adoption
Reference

(i) Names of persons who were Directors of the entity Compliant Refer Directors’ Report on page
33 to 37 in this Annual Report.
(ii) Principal activities of the entity during the year and Compliant Refer Note 3.1 to Financial
any changes therein Statements.
(iii) The names and the No. of shares held by the 20 Compliant Refer Shareholders and Investor
largest holders of voting and non voting shares and information on pages 118 to 119
the percentage of such shares held to this Annual Report
(iv) The public holding percentage Compliant Refer Shareholders and Investor
information on pages 115 to 119
to this Annual Report
(v) A Statement of each Director’s holdingand Chief Compliant Refer Directors’ Report on pages
Executive Officer’s holding in shares of the entity at 33 to 37 to this Annual Report
the beginning and end of each Financial year
(vi) Information pertaining to material foreseeable risk Compliant Refer Risk management Report
factors of the Entity on pages 26 to 30 to this Annual
Report.
(vii) Details of material issues pertaining to employees Compliant Refer Directors’ Report on pages
and industrial relation of the Entity 33 to 37 to this Annual Report
(viii) Extent, Locations, Valuations and the number of Compliant Refer Note 15 to Financial
buildings of the Entity’s land holding and investment Statements.
properties
RENUKA FOODS PLC
16 Annual Report 2021/22
REPORT ON THE CORPORATE GOVERNANCE (Contd...)

Compliance
CSE Rule
Corporate Governance Principles Status Company’s Extent of Adoption
Reference

(ix) Number of shares representing the Entity’s Stated Compliant Refer Note 27 to Financial
Capital Statements.
(x) A distribution schedule of the number of holders in Compliant Refer Shareholders and Investor
each class of equity securities and the percentage information on pages 115 and 119
of their total holdings to this Annual Report
(xi) Financial ratios and Market Price Information Compliant Refer Five Year Summary given
on page 114 to this Annual Report.
(xii) Significant change in the Company’s fixed assets Not Applicable
and market value of Land, if the value differs
-
substantially from the book value as at the end of
the year
(xiii) Details of funds raised through a public issue, rights Not Applicable -
issue and a private placement during the year
(xiv) Information in respect of Employee Share Ownership Not Applicable -
or Stock Option scheme
(xv) Disclosures pertaining to Corporate Governance Compliant Refer Corporate Governance
practices in terms of Rules 7.10.3, 7.10.5 c. and Report on page 13 to 20 to this
7.10.6.c. of Section 7 of the Listing Rules Annual Report
(xvi) Related Party Transactions exceeding 10 percent of Compliant Refer Note 35 to Financial
the equity or 5 percent of the total assets of the Statements
entity as per Audited Financial Statements, which
ever is lower.

Extent of Compliance with the Listing Rules set out in Section 7.10 of the Colombo Stock Exchange’s on Corporate
Governance, are summarized below. (Mandatory provisions fully complied)

CSE Rule Compliance

Corporate Governance Principles Company’s Extent of Adoption
Reference Status
7.10 COMPLIANCE
a./b./c. Compliance with Corporate Governance This report declares the confirmation
Rules on compliance and refer above
Compliant
for "CORPORATE GOVERNANCE
COMPLIANCE STATEMENT"
7.10.1 NON-EXECUTIVE DIRECTORS (NED)
a. At least 2 members or 1/3 of the Board, Three out of seven Directors are Non-
Compliant
whichever is higher should be NEDs Executive Directors
b. The Total number of Directors are to be Calculation is based on number as at the
calculated based on the number as at the conclusion of the immediately preceding
Compliant
conclusion of the immediately preceding Annual General Meeting
Annual General Meeting
c. Any change occurring to this ratio shall be
rectified within ninety (90) days from the Not Applicable -
date of the change
7.10.2 INDEPENDENT DIRECTORS
a. 2 or 1/3 of NEDs, whichever is higher shall Three out of three Non-Executive
Compliant
be 'independent' Directors are independent

RENUKA FOODS PLC

Annual Report 2021/22
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 REPORT ON THE CORPORATE GOVERNANCE (Contd...)

CSE Rule Compliance

Corporate Governance Principles Company’s Extent of Adoption
Reference Status
b. Each NED to submit a signed and All Non-Executive Independent Directors
dated declaration annually of his/her Compliant have submitted their confirmation on
independence or non-independence independence
7.10.3 DISCLOSURES RELATING TO DIRECTORS
a./b. The Board assessed the independence
Board shall annually determine the
Compliant declared by Directors and determined
independence or otherwise of NEDs
the Directors who are independent.
c. A brief resume of each Director should be
Refer page 8 for a brief resume of each
included in the annual report including the Compliant
Director
directors' experience
d. Provide a resume of new Directors There are no new appointments during
Not Applicable
appointed to the Board along with details the year ended 31st March 2022.
7.10.4 CRITERIA FOR DEFINING INDEPENDENCE
a. – h. As per 7.10.2 a & b in determining of the
Requirements for meeting the criteria to independence or otherwise of NEDs,
Compliant
be an Independent Director board reviewed the criteria for defining
independence as per 7.10.4 a to h
7.10.5 REMUNERATION COMMITTEE
a.1 The remuneration committee of Renuka
Foods PLC is the same Committee of the
A listed company shall have a Remuneration
Compliant ultimate Parent. Renuka Holdings PLC
Committee
as allowed by Listing Rules of Colombo
Stock Exchange.
Remuneration Committee shall comprise The remuneration Committee comprises
of NEDs, a majority of whom will be Compliant of 3 Non-Executive Directors of whom all
independent are independent.
a.2 One Non-Executive Director shall be Mr. M.S. Dominic is the Chairman of the
appointed as Chairman of the Committee Compliant Committee who is Independent/ Non-
by the board of directors Executive Director.
b. Remuneration Committee shall
Refer Page 24 for Remuneration
recommend the remuneration of the CEO Compliant
Committee scope
and the Executive Directors
c.1 Names of Remuneration Committee Refer page 24 for names of the Committee
Compliant
members members

RENUKA FOODS PLC

18 Annual Report 2021/22
REPORT ON THE CORPORATE GOVERNANCE (Contd...)

CSE Rule Compliance

Corporate Governance Principles Company’s Extent of Adoption
Reference Status
c.2 Statement of Remuneration policy Compliant Refer page 24.
c.3 Aggregate remuneration paid to EDs and
Compliant Refer to note 12 of the financial statements.
NEDs
7.10.6 AUDIT COMMITTEE
a.1 A listed company shall have an Audit The Company has its own Audit
Compliant
Committee. Committee.
Audit Committee shall comprise of NEDs,or The Audit Comprises of three Independent
Compliant
a majority of whom should be independent Non-Executive Directors
a.2 A NED shall be the Chairman of the The Chairman of the Committee is an
Compliant
committee Independent Non-Executive Director
a.3 CEO and CFO should attend Audit
Compliant Refer to pages 21 and 22.
Committee meetings
a.4 The Chairman of the Audit Committee or The Chairman of the Audit Committee
one member should be a member of a Compliant is a Fellow Member of the Institute of
professional accounting body Chartered Accountants of Sri Lanka.
b. Functions of the Audit Committee
b.1 Overseeing of the preparation,
presentation and adequacy of disclosure Refer pages 21 and 22 of Audit Committee
Compliant
in the financial statements in accordance Report
with SLFRS/LKAS
b.2 Overseeing the compliance with financial
reporting requirements, information Refer pages 21 and 22 of Audit Committee
Compliant
requirements as per the laws and Report
regulations
b.3 Ensuring the internal controls and risk
Refer pages 21 and 22 of Audit Committee
management, are adequate, to meet the Compliant
Report
requirements of the SLFRS/LKAS
b.4 Assessment of the independence and
Refer pages 21 and 22 of Audit Committee
performance of the Entity's external Compliant
Report
auditors
b.5 Make recommendations to the Board
pertaining to appointment, re-
appointment and removal of external Refer pages 21 and 22 of Audit Committee
Compliant
auditors and to approve the remuneration Report
and terms of engagement of the external
auditors.
c.1 Names of the Audit Committee members Refer pages 21 and 22 of Audit Committee
Compliant
shall be disclosed Report
c.2 Audit Committee shall make a
Refer pages 21 and 22 of Audit Committee
determination of the independence of the Compliant
Report
external auditors
c.3 Report on the manner in which Audit Refer pages 21 and 22 of Audit Committee
Compliant
Committee carried out its functions Report

RENUKA FOODS PLC

Annual Report 2021/22
19
 REPORT ON THE CORPORATE GOVERNANCE (Contd...)

CSE Rule Compliance

Corporate Governance Principles Company’s Extent of Adoption
Reference Status
9.2 RELATED PARTY TRANSACTIONS
REVIEW COMMITTEE(RPTR)
9.2.1 & Related Party Review Committee Compliant The Functions of the Committee are stated in the
9.2.3 Report of the RPTR Committee on page 23.
9.2.2 Composition Compliant Refer the report of RPTR Committee on page 23.
9.2.4 Meetings Compliant Refer the report of RPTR Committee on page 23.
9.3.1 Immediate Disclosures Compliant Please refer Note 35 of the Notes to the Financial
Statements.
9.3.2 (a) & Disclosure of recurrent and non- Compliant Please refer Note 35 of the Notes to the Financial
(b) recurrent Related Party Transactions Statements.
9.3.2 (c ) Report by the Related Party Compliant Refer the report of RPTR Committee on page 23.
Transactions Review Committee
9.3.2. (d) A declaration by the Board of Compliant Please refer the Annual Report of Board of
Directors Directors for an affirmative statement of
compliance of the Board on pages 33 to 37.

Below summary list, Company compliance with Companies Act No 7 of 2007

Section Companies Act Requirements Compliance Reference
Status
168 (1) (a) The state of the Company's affairs and nature
of the business of the Company or any of its Refer Note 1 – 5 of the Financial
Compliant
subsidiaries together with any change thereof Statements
during the accounting period
168 (1) (b) Signed Financial Statement of the Company
and its subsidiaries for the accounting period Compliant Refer page 45 of the Annual Report
completed
168 (1) (c) Auditors Report on Financial Statements of the Refer page 39 to 43 of the Annual
Compliant
Group and the Company Report
168 (1) (d) Refer Note 1 – 5 of the Financial
Accounting Policies and any changes therein Compliant
Statement
168 (1) (e) Particulars of the entries made in the interests Refer Annual Report of the Board of
Compliant
Register during the accounting period Directors on page 33 – 37
168 (1) (f) Remuneration and other benefits paid to
Refer Note 12 of the Financial
Directors of the Company during the accounting Compliant
Statements
period
168 (1) (g) Corporate donations made by the Company
Compliant Refer page 36 of the Annual Report
during the accounting period
168 (1) (h) Names of the Directors of the Company and its
Subsidiaries at the end of the accounting period Refer page 14 and 100 of the Annual
Compliant
and name of Directors who ceased to hold office Report
during the accounting period
168 (1) (i) Amounts paid/payable to the External Auditor as
Refer Note 12 of the Financial
audit fees and fees for other services rendered Compliant
Statement
during the accounting period
168 (1) (j) Other relationships or any interest of Auditors Refer pages 21 and 22 of the Annual
Compliant
with the Company and its subsidiaries Report, Audit Committee Report
168 (1) (k) Refer pages 33 to 37 of the Annual
Acknowledgment of the content of this report
Compliant Report for Report of the Board of
and signature on behalf of the Board
Directors

RENUKA FOODS PLC

20 Annual Report 2021/22
AUDIT COMMITTEE REPORT
In keeping with the Code of the Best rules on Corporate Governance for Other members of the Board,
Practice on Corporate Governance Listed Companies issued by the Management members as well as
and the requirement of the Securities Colombo Stock Exchange. External Auditors were present at the
and Exchange Commission for Public discussions where it was re-quired.
Listed Companies, Renuka Foods PLC The Chairman of the Committee, The proceedings of the Audit
has established an Audit Committee Mr. T. K. Bandaranayake, an Committee are regularly reported to
whose function, authority and independent Non-Executive Director, the Board of Directors.
duties have been clearly identified is a financial professional with over 28
in the Audit Committee Charter. years in public practice with Ernst & FINANCIAL REPORTING
This Charter integrates all the Young. He is a Fellow Member of the
requirements of the Securities and Institute of Chartered Accountants The Committee oversees the
Exchange Commission and the of Sri Lanka. He currently holds Company’s financial reporting on
Code of Best Practice on Corporate Directorship in number of listed behalf of the Board of Directors,
Governance. companies and audit committees. as part of its responsibility, review
the quarterly and Annual Financial
The role of the Audit Committee is Brief profiles of each member are Statements and recommended them
to oversee the financial reporting given on pages 8 to 9 of this report. to the Board for its deliberations
system of the Company with a view Their individual and collective prior to their issuance.
of safeguarding the interest of all the financial knowledge and business
stakeholders and ensuring that it has acumen and the independence of The Committee reviews the Financial
been extended to its subsidiaries. the Committee are brought to bear Statements to ensure consistence
This includes selecting and on their deliberations and judgments of the accounting policies and
applying appropriate accounting on the matters that come within the their compliance with the Sri Lanka
policies for the purpose of financial Committee’s purview. Accounting Standards.
reporting, ensuring sound internal
control principles and its effective Executive Director, Chief Executive The Committee has also regularly
implementation, ensuring the Officer – Shared Services and Chief discussed the operations of the
integrity of Financial Statements Financial Officer attend meetings of Company and its future prospects
and maintaining an appropriate the Committee by invitation. with the management and is satisfied
independent relationship with the that all relevant matters have been
Company auditors. CHARTER OF THE AUDIT taken into account in the preparation
COMMITTEE of the Financial Statements.
COMPOSITION OF THE AUDIT
COMMITTEE “Rules on Corporate Governance” INTERNAL AUDIT
under the listing rules of Colombo
The Audit Committee appointed Stock Exchange and “Code of Best Internal audits are carried out
by and responsible to the Board Practice on Corporate Governance” internally in line with an agreed
of Directors comprises three Non- issued jointly by Institute of audit plan. Follow up reviews are
Executive Directors of whom all three Chartered Accountants of Sri Lanka scheduled to ascertain that audit
are independent during the year as and the Securities and Exchange recommendations are being acted
follows: Commission of Sri Lanka further upon.
regulate the composition, role and
Mr. T.K. Bandaranayake (IND/NED) functions of the Audit Committee.
Chairman
MEETINGS OF THE AUDIT
Mr. J.A.S. Felix (IND/NED) COMMITTEE

Mr. M.S. Dominic (IND/NED) The attendance of the members

of Audit Committee meeting is
(IND – Independent Director, stated in the table on page 14. The
NED – Non-Executive Director) Committee met four times during
the year.
The composition is in compliance
with the requirement to have a
minimum of two Independent Non-
Executive Directors in terms of the

RENUKA FOODS PLC

Annual Report 2021/22
21
 AUDIT COMMITTEE REPORT (Contd...)

CONTROLS AND RISKS The Audit Committee recommended

to the Board of Directors that M/s
The Committee reviewed the KPMG be appointed as Auditors for
process to assess the effectiveness the financial year ending 31st March
of the internal financial controls 2023 subject to the approval of the
that have been designed to provide shareholders at the Annual General
reasonable assurance to the Directors Meeting.
that assets are safeguarded, and that
the financial reporting system can Conclusion
be relied upon in preparation and
presentation of Financial Statements. The Audit Committee is satisfied that
Further it evaluates compliance with the internal controls and procedures
laws, regulations and established in place for assessing and managing
policies and procedures of the risks are adequately designed and
Company. operate effectively and is of the
view that they provide reasonable
EXTERNAL AUDITORS assurance that the Company’s
assets are safeguarded and that the
The Audit Committee evaluated financial statements of the Company
the independence of the External are reliable. The Company’s External
Auditors and the effectiveness of Auditors have been effective and
the audit process. The Committee independent throughout the year.
discussed the Management letter at
the conclusion of the Audit.
Sgd.
The Committee reviewed the T.K. Bandaranayake
Audited Financial Statements with Chairman
the External Auditors who are 12th August 2022
responsible to expressing an opinion
on its conformity with the Sri Lanka
Accounting Standards. Also the
External Auditors kept the Audit
Committee advised on an on-going
basis regarding any unresolved
matters of significance.

The Audit Committee undertook the

evaluation of the independence and
objectivity of the external auditor and
the effectiveness of the audit process.
As far as the Audit Committee is
aware, Auditors do not have any
relationship (other than of Auditors)
with the Company. In addition, as
required by the Companies Act
No. 07 of 2007, the Committee has
received a declaration from Messrs.
KPMG confirming that they do
not have any relationship with the
Company, which may have a bearing
on their independence.

RENUKA FOODS PLC

22 Annual Report 2021/22
RELATED PARTY TRANSACTIONS REVIEW
COMMITTEE REPORT
The Related Party Transactions Dr. J. M. Swaminathan - Formulate a standard template
Review Committee was established Dr. J. M. Swaminathan is an Attorney-at- to implement in the group to
on 1st January 2016. The objective Law with over 57 years in practice. He follow when documenting RPT
of the Committee is to keep in line was the former Senior Partner of Messrs. and when presenting to RPT
with the Code of Best Practice on Julius & Creasy. He was a Member of committee.
Corporate Governance and the the Office for Reparations Sri Lanka. - Establish proper guide lines
requirement of the Listing Rules of He has served as a Member of the Law to identify recurrent & non-
Colombo Stock Exchange with a Commission of Sri Lanka and Member of recurrent Related party
view to ensure that the interests of the Council of Legal Education and the transactions to follow by the
shareholders as a whole are taken Council of the University of Council. He company and its subsidiaries.
into account by Renuka Foods PLC is also a Member of the Company Law
and its subsidiaries and are consistent Advisory Commission and The Intellectual - Establish a method of having
with the Listing Rules of Colombo Property Law Advisory Commission. He access to adequate knowledge
Stock Exchange when entering into is the Chairman of the Board of Studies or expertise to assess all aspects
Related Party Transactions and made of the Council of Legal Education and of proposed related party
required disclosures in a timely also a Consultant at the Institute of transactions where necessary,
manner. Advanced Legal Studies of the Council of and method of obtaining
Legal Education. He is a Member of the appropriate professional and
Visiting Faculty of the LLM Course of the expert advice from appropriately
Composition of the Related Party University of Colombo. He also serves on qualified persons.
Transactions Review (RPTR) the Boards of several public and private - Periodic review by the
Committee companies. Committee to ensure that
The Related Party Transactions required disclosures have been
Mandate disclosed in the market or
Review Committee is appointed
by and responsible to the Board To ensure on behalf of the Board, annual report as required by the
of Directors. However as from 3rd that all related party transactions of Listing Rules of Colombo Stock
August 2016 the Related Party Renuka Foods PLC and its subsidiaries Exchange.
Transaction Review Committee are consistent with the listing rules of
Colombo Stock Exchange. - The committee communicates
of the Ultimate Parent Company its comments/observations
namely Renuka Holdings PLC which to the Board of Directors after
is a listed legal entity functions as the Number of Committee Meetings
each review of related party
RPTR Committee for Renuka Foods The committee has met four times transactions.
PLC. This is in compliance in terms of during the period from 1st April 2021
the rules on Corporate Governance to 31st March 2022. The attendance CONCLUSION
for Listed Companies issued by the of the members of the Committee is
Colombo Stock Exchange. stated in the table on page 14. The Committee has reviewed the
related Party Transactions presented
Attendance by Invitation to them by the management of the
Related Party Transactions Review The Executive Director – Mr. S.V. Company for the financial year ended
Committee Members Rajiyah, Chief Executive Officer – 31st March 2022. The Activities and
Shared Services and Chief Financial views of the Committee have been
Mr. T.K. Bandaranayake (IND/NED) communicated to the Board of
Officer attended the meetings by
Chairman invitation. Directors through verbal briefing and
Mr. M.S.Dominic (IND/NED) by tabling minutes of the Committee
meetings.
Dr. J.M. Swaminathan (IND/NED)
IND – Independent Director DUTIES AND RESPONSIBILITIES OF
NED – Non-Executive Director THE RPTR COMMITTEE
- Establish the definitions and
Brief profiles of Mr. T.K. Bandaranayake set out the threshold values of
and Mr. M.S.Dominic are given on each related party transaction
pages 8–9 and Dr. J.M. Swaminathan’s as per the Code which require
profile is given below. Their discussion and disclosure. Sgd.
individual and collective financial T. K. Bandaranayake
- Identify related party transactions
knowledge and business acumen Chairman
that need pre-approval from the
and the independence of the 12th August 2022
Board of Directors, immediate
Committee are brought to bear on
market disclosure, transactions
their deliberations and judgments
that need shareholder approval
on the matters that come within the
and disclosure in the Annual
Committee’s purview.
Report.

RENUKA FOODS PLC

Annual Report 2021/22
23
 REMUNERATION COMMITTEE REPORT
companies.
The Remuneration Committee of
Renuka Foods PLC is the same The Remuneration Committee held
Committee of the ultimate parent, a meeting during the year to review
Renuka Holdings PLC appointed Company remuneration policy and
by and responsible for the Board made its recommendations.
of Directors consists of two Non- Independence of the Committee
Executive Independent Directors
(IND/NED) and one Non-Executive The committee is independent from
Director (NED). The Managing the management of the business and
Director may also be invited to join not involve any business operations.
in the deliberations as required.
The scope of the Committee
The Chairman of the Committee is an
Independent Non-Executive Director. - The committee study and
recommends the remuneration
The members are: policy of Directors & Key
Management Personnel
1. Mr. M.S. Dominic (IND/NED)
(Chairman) - Review the performances of
Key Management Personnel on
2. Mr. T.K. Bandaranayake (IND/NED)
periodic basis
3. Dr. J.M. Swaminathan (IND/NED)
- The Committee recommends
4. Mr. L.M. Abeywickrama (NED) the remuneration based on the
prevailing market rates and
(IND – Independent Director, NED – perquisites applicable to the Key
Non-Executive Director) Management personnel of the
Company and makes appropriate
Mr. L. M. Abeywickrama resigned
recommendations to the Board
W.E.F. 07/01/2022 and Dr. J.M.
Swaminathan appointed on of Directors for Approval.
07/01/2022
- The Committee also carries out
The brief profiles of the Directors periodic reviews to ensure that
are given on page 8 & page 9 of the remunerations are in line
the Annual Report and Dr. J.M. with market conditions.
Swaminathan profile is given below.
The Remuneration Policy is to
Dr. J. M. Swaminathan attract and retain best professional
Dr. J. M. Swaminathan is an Attorney-at- managerial talent within the Renuka
Law with over 57 years in practice. He Group and also to motivate and
was the former Senior Partner of Messrs. encourage them to perform at
Julius & Creasy. He was a Member of the highest possible level. The Group
the Office for Reparations Sri Lanka. has a structure and professional
He has served as a Member of the Law methodology in evaluate the
Commission of Sri Lanka and Member of performance of employees. The
the Council of Legal Education and the
policy ensure equality and fairness
Council of the University of Council. He
is also a Member of the Company Law between the various employees is
Advisory Commission and The Intellectual maintained.
Property Law Advisory Commission. He
is the Chairman of the Board of Studies
of the Council of Legal Education and
also a Consultant at the Institute of Sgd.
Advanced Legal Studies of the Council of
Legal Education. He is a Member of the M.S. Dominic
Visiting Faculty of the LLM Course of the Chairman
University of Colombo. He also serves on
12th August 2022
the Boards of several public and private

RENUKA FOODS PLC

24 Annual Report 2021/22
NOMINATION COMMITTEE REPORT
The Nomination Committee of - Make necessary recommendation
ultimate parent, Renuka Holdings to the Board as and when needed
PLC, acts as the Nomination by the Board
Committee of Renuka Foods PLC.
The Scope of the Committee is,
Composition of Nomination - To define and establish the
Committee nomination process for Non-
Executive Directors,
Mr. M.S. Dominic – Chairman
- Lead the process of Board
Mr. T.K. Bandaranayake (Independent
appointments and make
Non-Executive)
recommendations to the Board.
Mrs. J.J.B. A. Rajiyah (Non-Executive)
- The Committee scope out
Mrs. L.M. Abeywickrema the tasks such as assess skills
(Non-Executive) required to be on the Board
Brief profiles of each member are - Periodic review of the extent of
given on pages 8 and 9 of this Annual skills required of the Director
Report and Mrs. J.J.B.A. Rajiyah who represent the Board
profile is given below.
- Review description of role
Mr. L.M. Abeywickrema resigned and capabilities required for a
w.e.f. 07/01/2022 and Mrs. J.J.B.A. particular Board appointment
Rajiyah appointed on 07/01/2022 and Identify and recommend
Mr. M.S. Dominc appointed as suitable candidates to the Board.
Chairman w.e.f. 07/01/2022. Company Secretaries act as the
secretaries to the Committee.

Mrs. J. J. B.A. Rajiyah

Mrs. J. J. B. A. Rajiyah is a Non Sgd.
- Executive Director of Renuka D. S. Dominic
Holding PLC. She has earned her
B.Sc in Law with Management Chairman
from the University of London and 12th August 2022
holds a MBA from the Postgraduate
Institute of Management, University
of Sri Jayawardenepura. She is an
Executive Director on the Board
of The Autodrome PLC since 2004
and serves in the capacity of the
Marketing Director. She is also a
Director of Renuka Group Limited,
Renuka Enterprises (Pvt) Limited,
Galle Face Properties Ltd and other
Companies of the Renuka Group. She
is also a Director of Mercury Ltd., and
Tourama (Pvt) Ltd.
The directives of the Committee are,
- To identify suitable persons
who could be considered to
become Board member as a
Non-Executive Director
- To recommend to the Board the
process of selection of Chairman
and Deputy Chairman

RENUKA FOODS PLC

Annual Report 2021/22
25
 RISK MANAGEMENT
Risk Management is an integral part 2. Operational Risk – is the Develop Risk Management Strategy
of our business, since management potential loss that might arise
of risks against returns is a critical in business operation resulting The Risk management strategies
trade off decision, businesses have from inadequate or failed internal address how Group intend to
to make every day when it comes to processes, people and system or assess risk, respond to risk and
investment and operational decision external events which ultimately making explicit and transparent the
making. affect the day to day activities of risk perceptions that organization
the Group. routinely use in making both
We reviewed and refined our investment and operational
investment and business processes 3. Financial Risk- The likelihood decisions.
balancing objectively with of loss inherent in financing
responsiveness and flexibility. The procedures which may weaken The above concept has been
aim was to lay a sound foundation the ability to deliver adequate embedded with risk mapping in
to integrate our risk management return to the Group. This may order to develop a robust framework
activities as part and parcel of our include liquidity risk, currency to determine an appropriate risk
business operations. risk, and interest rate risk. management strategy as shown
below.
Our Approach to Risk Management The systems and standard operating
procedures and processes are in

High
Our definition for risk is the potential place to deal with these risks, and Mitigate or
Avoid the Risk
occurrence of an external or internal Reduce the Risk
the chain of responsibility within
event that may negatively impact the organization to monitor the
our ability to achieve the Groups’ effectiveness of our mitigation Share or
business objectives. measures. Accept the Risk Transfer the
Risk

The process of embedding risk Enterprise Risk Management Process High

management system within our Risk Identification, Prioritization
groups systems and procedure can and Assessment
be outlined as below:
As the initial step of the risk The Risk Management process in
1. Identify Controls that are already framework, it is important to identify place ensures the clear allocation
operating risks for effective management. and segregation of responsibilities
relating to risk identification,
2. Monitor those controls to ensure Renuka Group identifies all the risks assessment, mitigation, monitoring,
their effectiveness by key stakeholders. We consider risk control and communication. We
identification to be a key component have in place several measures to
3. Improve and refine as per the
of a robust risk management strengthen our risk management
requirement
framework. In the absence of a process which are linked to our
4. Document evidence of proper risk identification process, business processes. These include
monitoring and control operation the organization is incapable policies to mitigate business risks
of effectively managing its key along with the upgrading of the
Group’s risk management framework risks. We evaluate risks according support system that enable easy
takes into account the range of risks to the likelihood of occurrence monitoring and management risks.
to be managed, and summery in to and magnitude of impact. This
below categories. assessment provides a prioritized
risk list, identifying those risks that
1. Strategic Risk – A possible source need the most urgent attention.
of loss that might arise from an
Impact
unsuccessful strategic decision
taken by the organization. These Low Medium High
content strategies related to
Probability

High
growth and strategic positioning
which ultimately affect the Medium
overall mission of the group.
Low

RENUKA FOODS PLC

26 Annual Report 2021/22
RISK MANAGEMENT (Contd...)

The main categories of risks that we take into account in the pursuit of our business goals are detailed below.

RISK IMPACT RISK MANAGEMENT STRATEGIES

STRATEGIC RISK
Competitive Risk
Risks to the group’s Reduced market share and rates Aim to have a broad appeal in price, range and format in
reputation and Brand reducing revenue, cash flow and a way that allows us to compete effectively in different
image profitability. markets.

Increased promotional Formed strategic relationships with a diverse pool of

Expenditure. suppliers, enabling flexibility in pricing contracts and
hedging mechanisms are used wherever possible to
The positive correlation mitigate exposure to commodity price fluctuations.
between cost of resources and
competition. The Group’s service excellence, committed and award
winning staff, uniqueness of properties, innovative
product and service developments and the strength of
its brands enables the group to counter threats from new
and existing players.

Maintaining a positive relationship with employees with a

better remuneration and performance appraisal scheme.
OPERATIONAL RISK
Employee Risk
Risk from not being Reduced productivity. Reduced Significant resources are invested in strengthening
able to attract and quality of service resulting our human capital through the deployment of the
retain skilled and in reduced market share and latest Human Resource Information Systems, regular
experienced staff. Group’s image. staff training & development, succession planning and
fostering a performance-based culture.

Maintaining cordial relationships with labour grade staff

and adopting interest based negotiations for win-win
solutions.

Implemented well structured talent management process

to Identify critical employees and retain them in the long
run.

Periodic employee satisfaction surveys to ensure that

remuneration is in line with the market.

Investments in strengthening employee brand image.

RENUKA FOODS PLC

Annual Report 2021/22
27
 RISK MANAGEMENT (Contd...)

RISK IMPACT RISK MANAGEMENT STRATEGIES

Issue Pertaining Adverse impact on service levels, Review all the issues with regard to employees and
to Employees and expected quality standards, Industrial Regulations which affect the performance of
industrial Relationship operational efficiency and group the Group.
reputation.
Steps taken to ensure employees are satisfied at all the
Loss of revenue. levels and their issues are addressed in order to retain
talented employees.

Maintain cordial relationship with all labour grade staff

and adopting interest-based negotiations for win-win
solutions.

Well structured grievance handling system is in place

to handle the grievance of employees at all levels and
development of a Multi-skilled work force through
structured and focused training programmes.

Ensure proper industrial relationships with all the

government agencies.
IT systems and Inability to obtain timely and "Implementation of effective IT infrastructure and to
infrastructure accurate information due to ensure consistency of delivery,
failures in IT systems.
All relevant staffs are effectively engaged to mitigate IT
Potential disruption to related risks through effective policy and procedures as
operations well as increased awareness.

Significant financial losses. Implementation of a comprehensive IT policy within

the Group, supported by adequate systems and
controls,ensure the safety and security of data.
Contingency plans are in place to mitigate any short term
loss on IT services.

All employees are bound by the code of conduct to

safeguard the Group’s information, irrespective of its
physical form.

A dedicated central IT team is in place to support all IT

related aspects of the group."
Product Risk Product risk implies any effect of In order to eliminate loss of market share or market
perceived impact of our product leadership, we monitor market leadership and customer
on stakeholders in general needs.
which could bring down our
market share. Develop innovation that add value to our customers.
Enhance productivity and efficiency to improve price
competitiveness and investing in high quality machinery
and equipment.

Employ established operating procedures to review and

approve all raw material prior to use to ensure that quality
control is maintained.

Take into account safety, health and environmental

hazards to cover all avenues of possible negative publicity.

Research and development team is equipped to field any

technical questions about our product,

Marketing and distribution procedures ensure complete

control of the supply chain.

RENUKA FOODS PLC

28 Annual Report 2021/22
RISK MANAGEMENT (Contd...)

RISK IMPACT RISK MANAGEMENT STRATEGIES

Supply Chain and "Operational disruption can Consistent engagement with a diverse pool of suppliers
Operational Risk occur due to inadequate to maintain strong relationships
quantity or quality of raw
material supplies, longer lead Structured processes are in place to add value to
time, supply disruption caused our supplier base through livelihood development
by global supply and demand. programmes.

Unable to maintain strong bond Technical support and guidance on enhancing quality.
with critical suppliers over the Manage operational risks by identifying areas of risk,
period. formulating plans for their management, promoting best
practices.
Operational risks cover
the areas of system failure, Implement internal controls, systems and monitoring of
continuity of decision making, compliance.
dealing with contingencies
and ensuring there are no
deficiency in operations,
application of recommended
management practices."
Legal Regulatory Risk of legal action due to "The legal support services to Renuka Group management
Compliance non performance of legal and come through the legal department which ensure all legal
statutory requirements. and regulatory provisions are complied with.

Result high cost of legal and The legal function pro-actively identified and sets up
penalty fees that reduced appropriate system and processes for legal regulatory
profitability compliance in any foreign country that we operate in, and
in such instances through legal council retained in those
Adversely impact to the Groups’ environments.
reputation and brand image.
Internal audit function of the Group ensures the
safeguarding of company assets and recommends
process improvements in areas where process control
failure are noted.

The operations of the Renuka Group come within the rules

and regulations applicable to companies listed on the
CSE and regulations applicable to securities trading set
by the Securities and Exchange Commission of Sri Lanka.
Our systems and processes are structured to satisfy the
criteria set by these regulations and staff are constantly
kept aware of the compliance needs imposed by these
regulation."

RENUKA FOODS PLC

Annual Report 2021/22
29
 RISK MANAGEMENT (Contd...)

RISK IMPACT RISK MANAGEMENT STRATEGIES

Breakdown of Internal Wastage of management time "Regular reviews of the effectiveness of internal controls
Controls and resources. by the corporate internal audit department supplemented
by regular management audits carried out by internal
Possible loss of data. teams within the Group ensures the robustness of
internal controls.
Increased possibility of fraud
and misuse The Company uses comprehensive general and specific
reporting and monitoring systems to identify, assess and
Disruptions to the normal course manage risks.
of operations.
Making each employee accountable for ethical
Lack of ability to track behavior,high standards for business conduct and
performance against budgets, adherence to laws ensures that transactions occur in a
forecasts and schedules reliable way. Staff rotation and special verification audits
across the Group.
Illegal transactions including
theft or misappropriation of Internal auditors are also engaged to carry out special
assets by employees reviews wherever necessary.

The Company uses comprehensive general and specific

reporting and monitoring systems to identify, assess and
manage risks.

Ensuring that only trained, trustworthy, knowledgeable

and competent personnel perform tasks, prevents errors,
irregularities and fraud."
FINANCIAL RISK
Financial risk management obligations and policies have been described in the note No. 42 to the Financial
Statements.

RENUKA FOODS PLC

30 Annual Report 2021/22
SUSTAINABILITY REPORT
Overview on time with increased accuracy. Our Stakeholder Engagement
Group has made substantial Process
We emphasize the importance of investment during the year to
our stakeholders when developing improve value addition to economic z Investors support Renuka
our strategies through the development. These investments business activities
competitiveness in order to achieve have helped to improve resource
a common value. Shareholder engagement is
utilization as well as minimization of
important to us to have access to
waste and pollution.
Sustainability is the key element growth capital and in the process we
of our strategy for future growth Renuka Sustainability Policy and must make a sound return to them.
where the utilization of resources guidelines In meeting global challenges and
efficiently, environmentally responsible evolving consumer needs we must
manufacturing of product and Management identify the be geared to be proactive with new
provision of services that deliver stakeholders and rate them in line ideas and ready with the output as
sustainability benefits which can with the degree of influence and well. When we operate according
leverage commercial advantage for importance. Such stakeholders thus to these principles the shareholders
the group. identified are, should realize a fair return.

The key business drives for * Investors Method of engagement

sustainability are internal operations * Employees
and stakeholder engagement. • We have open doors policy
* Customers
The first focuses on our internal which enables shareholders
operations and manufacturing * Key suppliers and business partners to keep in contact, visit and
our products and provision of our * The society obtain information from the
services more efficiently using fewer * Environment Company Secretaries and
resources. This approach helps us to engage in dialogue.
reduce costs of goods manufactured
Renuka has then formulated • Further e-mail address has
and provision of services and at the
sustainability strategies to been provided for comments
same time reduces our impact on the
create value for those identified and suggestions.
environment. The second approach
stakeholders. We have created
focuses on our partnerships with our
formal and informal channels to • Update with latest financials
stakeholders. Stakeholders are any
develop effective communication for shareholders/investor to
individual or party that has an interest
systems and engagements programs take rational decisions which is
in our group, and who are affected
to involve our stakeholders and very important.
by or can affect out organizational
implement continuous monitoring
activities. Partnerships help to build
systems through the management • We produce company
trust amongst our key stakeholders
team in order to gauge our impact performance in timely and
and to reach better understanding
on the stakeholders. relevant manner through
on a variety of issues. It can also
pave the way for more successful quarterly Financial reports and
ENVIRONMENTAL IMPACT Annual Report published in the
solutions to problems, concerns and
challenges. Colombo Stock Exchange web
Renuka has strived to ensure that all
site.
our manufacturing and production
Reuka impact on economic processes will not knowingly harm
performance • We hold Annual General and
people and will minimize the negative
Extra Ordinary meetings
impact our businesses will have on
In Economic Performance, Group to communicate with our
human life as well as environment. In
focused on operational excellence shareholders.
fact, we promote organic products
across all its business divisions and
to our customers due to health and Our Concern
subsidiaries and value addition to
other environmental benefits. This
economic development. Operational
has created awareness among the Our concern is to increase the
excellence measured in terms of
farmer community of the long term return on investment, sustainable
efficiency and effectiveness of
benefits of sustainable farming. profitability, good governance and
manufacturing process, process
transparency in carrying out group
improvement and reduces waste.
operations.
Further investment in IT/ERP helps
measurement of operational results

RENUKA FOODS PLC

Annual Report 2021/22
31
 SUSTAINABILITY REPORT (Contd...)

z Employees at Renuka work place z Customers Our Concern

At Renuka we have created a work World class quality products and We maintain effective long term
place policy and created employee customer satisfaction is our key relationship with our business
awareness for the total group. with our customers. The group uses partners and suppliers who benefit
With an employee base of over its competencies and decades of from our growth, and knowledge
817 creation of Group identity and experience to identify the needs and sharing.
belongings is priority. We care for wants of our customers in order to
our employees and health and safety provide quality product and services
is priority, giving much attention at creating value-for-money.
z Our society
work place including factories..
Renuka has been actively involved in
Method of engagement Method of engagement supporting the rural farmer network
for our coconut division. Renuka
• We have an open communi- • We engage our customers procures over Rs. 1Bn worth of
cation policy and have imple- through regular meetings, visits produce from our farmer network.
mented a process to identify and web portal.
and report corruption within Method of engagement
the business units. • On going participation for
Industry exhibitions and trade • We conduct farmer training
• We have adopted effective two fairs locally and internationally. programs, medical camps,
way communication system veterinary services which assist
with employees and manage- • We allow buyer inspections and in improving the livelihood and
ment through human resources audits to ensure compliance wellness of the communities
division which has created with global quality standards within Sri Lanka.
short and long term benefits to Our Concern
the group. • Local engagement through
We are concerned about purchasing.
• We also have adopted other the quality of our products Our Concern
communication methods like e- manufactured, are in compliance
mails, presentations and team with global standards. We also We take measures to carryout
briefings on daily operations for create innovative products to cater our operations minimizing carbon
betterment of the organization. to our customer needs. foot print and saving energy by
Employees are also encour- effective utilization of limited
aged to access the corporate z Suppliers and business partners resources while reducing wastage
websites. in order that we have only a minimal
We have built lasting business
relationships all over the world and negative impact on society and
• We organize team building ac-
not only centered in Sri Lanka. It is the environment.
tivities such as get-togethers,
through our business partners that
sports meets and CSR projects.
we co-exist to fulfil customer needs Renuka considers engagement to be
• Factories of the group com- and wants. an increasingly important component
panies are equipped with ad- of its corporate citizenship strategy.
equate safety measures and Method of engagement Our engagement efforts help
have educated the employees Renuka identify those issues that
to minimize accidents • We look at our business are most material to our business
partners as a resource base to operations and shape our approach
Our Concern develop business efficiency and to addressing a range of areas
innovative products. relating to the financial, social and
Our concern is to create a friendly environmental performance of the
• Develop long term purchase organization.
environment to our employees
contracts with our business
who are motivated and talent
partners & suppliers to support
developed to offer effective
responsible supply chain
service.
• Participate in industry
exhibitions and trade fairs

RENUKA FOODS PLC

32 Annual Report 2021/22
REPORT OF THE DIRECTORS
Overview with comment on the financial Group Investments
results and prospects is contained in
The Board of Directors of Renuka the Chairman’s Review on page 10, Investment of the Company and the
Foods PLC have pleasure in as required under Section 168 (1) (a) Group in Subsidiaries, Associates and
presenting the Annual Report of your of the Companies Act. These reports Other long term equity investment
Company together with the Audited form an integral part of the report of amounted to Rs. 4.4 Bn (2021 –
Consolidated Financial Statements the Directors and together with the 3.8Bn). Detailed description of the
for the year ended 31st March 2022. Audited Financial Statement reflect Subsidiaries, Associates, and Other
The details set out herein provide the state of affairs of the company. long term equity investments held
the required information under at the Balance Sheet date are given
Companies Act No. 7 of 2007, the Statement of Directors of in Note 19 and 20 in the Financial
Colombo Stock Exchange Listing Responsibilities Statements.
Rules and the recommended best
practices on Corporate Governance. The Statement of Directors Property, Plant and Equipment
responsibilities for the Financial
Renuka Foods PLC is a public limited Statements is given on page 38. Group has incurred Capital
liability company incorporated in Sri Expenditure during the year on
Lanka under the Companies Act No. Financial Statements of the Property, Plant & Equipment
17 of 1982, quoted on the Colombo Company and Group (including capital work-in-rogress),
Stock Exchange and reregistered as Biological assets, Investment
The Financial Statements of the Properties, Intangible assets
required under the provisions of the
Company and Group are given on amounting to Rs. 702 Mn (2021 – Rs.
Companies Act No. 7 of 2007.
pages 44 to 112. 282Mn).
Principal Activities of the Company
Accounting Policies and Changes Detailed information relating to
and the Group
During the Year capital expenditure on Property,
Renuka Foods PLC is a food and Plant & Equipment (including capital
The accounting policies adopted in
beverages company that owns, work-in-progress), Biological assets,
the preparation and presentation
directly or indirectly, investments Investment Properties, Intangible
of the Financial Statements are
engaged in Agri Business and FMCG assets are given in Note 15, 17, 18 and
given on pages 49 to 63. Further
companies constituting the Renuka 21 to the Financial Statements.
Accounting Standards issued but not
Foods Group. The Group consists
yet effective are disclosed on page Extent, Locations, number of
of a portfolio of diverse business
64. buildings and Valuations of the
operations. The main subsidiaries of
Renuka Foods PLC are listed on Note properties of the Group are given
Group Turnover
19. under Real Estate Portfolio on page
The Turnover of the Group was 113 and the market values of the
The Principle activities of the Group Rs. 10.7 Bn as compared with Rs. 8.7 Land and Buildings owned by the
are categorized into Agri business Bn in the previous year. A detailed Company and Group are included
and FMCG business segments and analysis of the Group Turnover is on the basis of valuation carried out
Segmental reporting is provided given in Note 6 of the Financial by a professionally qualified valuer
in pages 111 and 112 to the annual Statements. is given in Note 15 and 17 to the
report. Financial Statements.
Gross Profit
Vision, Mission and Corporate Stated Capital
conduct The Group Gross Profit for the year
was Rs. 1.8 Bn, compared with the The Stated Capital of the Company as
The Corporate vision and mission are at 31st March 2022 was Rs. 2,242Mn
Group Gross Profit of Rs. 1 Bn for the
provided on the page 3 of this report. comprising of Voting Ordinary
previous year.
In achieving its vision and mission, all Shares of 117,960,106 and Non-Voting
Directors and employees conduct Net Profit Ordinary shares of 4,773,346.
their activities with the highest level
of ethical standards and integrity. The Group Profit after Taxation for Reserves
the year was Rs. 733 Mn, compared
Review of Business and Future with the Group loss after Taxation of Total Group Reserves as at 31st March
Developments Rs. 385 Mn for the previous year. 2022 amounts to Rs. 2.3 Bn (2021 –
Rs. 1.9 Bn) representing Revaluation
The review of the Group Progress
Reserve and Retained Earnings
and Performance during the year

RENUKA FOODS PLC

Annual Report 2021/22
33
 REPORT OF THE DIRECTORS (Contd...)

and the detailed movement of the on pages 114 to 119.

Reserves shown in the Statement of
Changes in equity in the Financial Ratios and Market Price Information
Statements. The ratios relating to equity as required by the listing requirement of the
Dividend Colombo Stock Exchange are given in page 117 to this report.

The Board of Directors has Equitable Treatment to all Shareholders

recommended a payment of Rs. The company has made every endeavor to ensure the equitable treatment
0.41 per share payable for 2021/22. to all shareholders and adopted adequate measures to prevent information
The Directors are confident that the asymmetry.
Company would meet the solvency
test requirement under Section 57 of Information to Shareholders
the Companies Act of No. 7 of 2007
immediately after the proposed final The Board strives to be transparent and provide accurate information to
dividend distribution. shareholders in all published material. The quarterly financial information
during the year has been sent to the Colombo Stock Exchange in a timely
Solvency Test manner.

Solvency test has been carried out Name of Director Executive Non – Independent
by the Board of Directors before Executive
the payment of the final dividend as
required by the Companies Act No. Dr. S.R. Rajiyah 9
7 of 2007. Mrs. I.R. Rajiyah 9

A solvency certificate has been Mr. S.V. Rajiyah 9

received in respect of the first and Mr. V. Sanmugam 9
final dividend of Rs. 0.41 per share
Ms. A.L. Rajiyah 9
proposed to be paid to the share
holders of the Company. Mr. T.K. Bandaranayake 9 9
Mr. M.S. Dominic 9 9
Major Shareholdings
Dr. J.A.S. Felix 9 9
Details of the twenty largest
shareholders with the percentage of The basis on which Directors are Recommendation for re-election
their respective holdings are given classified as Independent Non-
1. To re-elect Dr J.A.S.Felix as a
on page 118 and 119 together with Executive Directors is discussed in
Director who retires by rotation in
comparative shareholding as at 31st the Corporate Governance Report.
terms of Article 28 (1).
March 2021.
Mr. P. Gunathilake – Alternate Director
Public Holding 2. To re-appoint Dr. S.R. Rajiyah who
for Ms. A. L. Rajiyah (appointed w.e.f
is 72 years of age, as a director
05/05/2021)
There were 3,839 (2021 – 4,032) in terms of Section 211 of the
registered voting shareholders and Ms. A. L. Rajiyah and Mr. P. Gunathilake Companies Act No. 7 of 2007 and
772 (2021–768) registered non-voting ( Alternate Director to Ms. A. L. it is specifically declared that the
shareholders as at 31st March 2022, Rajiyah)resigned w.e.f 31.03.2022 age limit of 70 years referred to in
with the percentage of shares held Section 210 of the Companies Act
by the public, as per the Colombo Directors No. 7 of 2007 shall not apply to the
Stock Exchange Rules, being 25.99% said Dr. S.R. Rajiyah
(2021 – 26.75%) for voting shares The names of the Directors who held
and 68.89%. (2021–68.89%) for non- office during the financial year are 3. To re-appoint Mrs. I.R. Rajiyah who
voting shares. given in the above table. The brief is 71 years of age, as a director
profiles of the Board of Directors in terms of Section 211 of the
Share Holdings /Share Information appear on page 8. Companies Act No. 7 of 2007 and
it is specifically declared that the
Information relating to earnings, age limit of 70 years referred to in
dividend, net assets, market Section 210 of the Companies Act
value per share, share trading and No. 7 of 2007 shall not apply to the
distribution of shareholding is given said Mrs. I.R. Rajiyah

RENUKA FOODS PLC

34 Annual Report 2021/22
REPORT OF THE DIRECTORS (Contd...)

4. To re-appoint Mr. T.K. required by said Act and they have The Directors have no direct or
Bandaranayake who is 79 years been entered into the Interest indirect interest in any other contact
of age, as a director in terms of register. or proposed contract with the
Section 211 of the Companies Act Company.
No. 7 of 2007 and it is specifically Directors’ Interest in Transactions
declared that the age limit of 70 Directors Interest in Shares
The Company carried out
years referred to in Section 210 of
transactions in the ordinary course Directors of the Company and its
the Companies Act No. 7 of 2007
of business with the entities which a Subsidiaries who have relevant
shall not apply to the said Mr. T.K.
Director of the Company is a Director. interest in the shares of their
Bandaranayake.
The transactions with entities where respective companies have
Entries in the Interest Register a Director of the Company either disclosed their shareholdings and
has control or exercises significant any acquisitions/disposals to their
The Company, in compliance with influence have been classified Boards, in compliance with section
the Companies Act No. 7 of 2007, as related party transaction and 200 of the Companies Act.
maintains an Interest Register. The disclosed in Note 35 to Financial
Directors have made the declaration Statements.

Directors’ holdings, in ordinary shares of the Company are given on below table.
Name As at 31st March 2022 As at 31st March 2021
Voting Non Voting Voting Non Voting
Dr. S.R. Rajiyah
- Individually 3,720 - 3,720 -
- Jointly with Mrs. I.R. Rajiyah 11,798,563 - 11,798,563 298
Mrs. I.R. Rajiyah
- Individually 674 - 674 -
- Jointly with Dr. S.R. Rajiyah (refer above) - - - -
Mr. S.V. Rajiyah 940,000 - 40,000 762,579
Mr. L.M. Abeywickrama - - - -
Mr. M.S. Dominic - - - -
Mr. T.K. Bandaranayake - - - -
Ms. A.L. Rajiyah - - - -
Mr. V. Sanmugam - - - -
Dr. J.A.S. Felix - - - -

Share dealing by Directors during Directors Responsibility for Financial Board Committees
the year were disclosed to Colombo Reporting
Stock Exchange. The Board has established
The Directors are responsible for Committees for better monitoring
the preparation of the financial and guidance of different aspects of
Remuneration of Directors
statements of the company to reflect operations and control.
The remuneration of the Directors in a true and fair view of the state of its
respect of the Company for the year affairs. The Directors are of the view Audit Committee
ended 31st March 2022 is given in that these financial statements have
The composition of the Board Audit
Note 12 to Financial Statements. been prepared in conformity with
Committee comprising of Non-
the requirements of the Sri Lanka
Directors Meetings Executive Directors is provided on
Accounting Standards (SLFRS/LKAS)
pages 21 and 22. The Executive
Details of Board meetings and issued by the Institute of Chartered
Directors, CEO- Shared Services,
Board subcommittee meetings are Accountants of Sri Lanka, Companies
Chief Financial Officer External
presented on page 14 of the annual Act No. 7 of 2007, Sri Lanka
auditors attend the meeting by
report. Accounting and Auditing Standards
invitation. Detail scope of Audit
Act No. 15 of 1995 and the Listing
Committee and their work during the
Rules of Colombo Stock exchange.

RENUKA FOODS PLC

Annual Report 2021/22
35
 REPORT OF THE DIRECTORS (Contd...)

year is disclosed in Audit Committee 2021, which required additional Code of Conduct
report given on Pages 21 and 22. disclosures in the Annual Report
The company demand impeccable
of 2021/22 under Colombo Stock
Remuneration Committee standards of conduct from its
Exchange Listing Rule
Directors and employees in the
The composition of the Board performance of their official duties
9.3.2 and Code of Best Practices on
Remuneration Committee and in situations that could affect the
Related Party Transactions under the
comprising of Non-Executive company’s image.
Securities and Exchange Commission
Directors is provided on page 24.
directive issued under Section 13(c)
System of Internal control
The remuneration committee of of the Securities and Exchange
Renuka Foods PLC is the same Commission Act are disclosed under The Board of Directors has put place
committee of the ultimate parent, note 36 in the Financial statements. an effective and comprehensive
Renuka Holdings PLC, appointed system of internal controls
Recurrent Related Party
by and responsible for the Board covering financial, operational
Transactions
of Directors consists of two Non- and compliance controls and have
Executive Independent Directors and All the Recurrent Related Party obtained reasonable assurance of
one Non-Executive Director. Transactions which in aggregate their effectiveness.
value exceeds 10% of the revenue of
The Managing Director may also be Corporate Governance
the Company as per 31st March 2020
invited to join in the deliberations
audited Financial Statements are The Company has complied with
as required . The Chairman of the
disclosed under note 35. If any, to the Corporate Governance rules laid
committee is an independent Non-
the Financial Statements as required down under the listing rules of the
Executive Director.
by Colombo Stock Exchange Listing Colombo Stock Exchange.
Related Party Transactions Review Rules 9.3.2 and Code of Best Practices
Committee on Related Party transactions The Corporate Governance Report
under the Securities and Exchange on pages 13 to 20 discusses this
The composition of the Board Commission directive issued under further in detail.
Related Party Transactions Review Section 13(c) of the Securities and
Committee comprising of Non- Exchange Commission Act. Going Concern
Executive Directors is provided on
Statutory Payments The Directors are in the view that the
page 23. The Executive Directors,
Company has adequate resources
CEO -Shared Services and Chief The Directors, to the best of their to continue in operations and
Financial Officer attend the meeting knowledge and belief are satisfied have applied the going concern
by invitation. Detail scope of that all statutory payments due to basis in preparing these Financial
Related Party Transaction Review the Government, other regulatory Statements.
Committee and their work during institutions and those related to
the year is disclosed in Related Party employees have been made on time. Risk Management
Transactions Review Committee The declaration relating to statutory
report given on page 23. payments is made in the Statement The Board and the management
of Directors Responsibilities on page of the company have put in place a
The company is in compliance with comprehensive risk identification,
38.
Rule 9 of the Listing Rules of the measurement and mitigation
Colombo Stock Exchange pertaining Compliance with Laws and process.
to Related Party Transactions from Regulations
1st January 2016. The Group exposure to risk and
The company has complied with all structure to manage and mitigate
Non – Recurrent Related Party applicable laws and regulations. A risk is discussed in more detail in
Transactions compliance checklist is signed-off Risk Management Report from pages
on a monthly basis by responsible 26to 30.
All Non – Recurrent Related Party
officers and any violations are
transactions of which aggregate Compliance with the transfer
reported to the Board Audit
value exceeds 10% of the equity or pricing regulations
Committee. Refer page 38 for a
5% of the total assets whichever is
statement of compliance.
lower of the Company as per audited All transactions entered into with
Financial Statements of 31st March associated persons during the period
are on an arm’s length basis, and are

RENUKA FOODS PLC

36 Annual Report 2021/22
REPORT OF THE DIRECTORS (Contd...)

comparable with transactions carried Based on the declaration from Colombo Stock Exchange and to the
out with non- associated persons. Messrs. KPMG and as far as Directors Sri Lanka Accounting and Auditing
are aware, the Auditors do not have Standards Monitoring Board.
Event after the Reporting period any other relationship or interest
with the Company or its Subsidiaries Annual General Meeting
No event of material significance that
other than that of an auditor of the
requires adjustment to the Financial Following the issuance of guidelines
Company.
Statements has occurred subsequent by the Colombo Stock Exchange
to the date of the reporting date, (CSE) due to the COVID-19 pandemic
2022 2021
other than those disclosed in Note situation in the county, and in the
38 to the Financial Statements. Audit and 374,000 340,000 interest of protecting public health
Audit related and facilitating compliance with the
Capital Commitments fees Health and Safety guidelines issued
Non audit 297,000 270,000 by the Government of Sri Lanka
No significant capital commitments
fees the 32nd Annual General Meeting
exist as at 31st March 2022 other
of Renuka Foods PLC will be held
than those disclosed in Note 37 to
The retiring auditors have expressed as a virtual meeting at 4.15 p.m. on
the financial statements.
their willingness to continue in office. Wednesday, 07th September 2021.
Contingencies and Outstanding A resolution to re-appoint them
as Auditors of the Company and The Notice of the Annual General
Litigation
authorizing the Directors to fix their Meeting appears on page 120.
In the opinion of the Directors and remuneration will be proposed at the
This Annual report is signed for and
in consultation with the company Annual General Meeting.
on behalf of the Board of Directors
lawyers, litigation currently pending
Auditors Report by:
against the company will not have
a material impact on the reported
Auditors Report on the financial
financial results or future operations
statements is given on page 39 to 43
of the company. Sgd.
of this annual report.
Dr. S.R. Rajiyah
Corporate Donations
Environmental Protection
Donation by the Group for the year
The group effort in minimizing and Sgd.
ended 31st March 2022 is Rs. 412,949.
(2020 – Rs 185,083). No donations conserve scarce and non- renewable Mr. S.V Rajiyah
were made for political purposes. resources as well as environmental
objectives are discussed in detail in
Employees and Industrial Relations Sustainability Report on page 31.
Sgd.
The Group has a structure to Employment Policies Renuka Enterprises (Pvt) Ltd
assess the competencies and
commitment of its employees. There The Group employment policies Company Secretaries
are no material issues pertaining to respect the individuals and offer equal 12th August 2022
employees and industrial relations of career opportunities, regardless of
the entity. sex, race or religion and consider
the relationship with the employees
Auditors to be good. The number of persons
employed in the Company and its
Company’s Auditors during the
subsidiaries as at 31st March 2022
year under review were M/s KPMG,
was 1,296 (2021 – 1,202)
Chartered Accountants. Their report
on the Financial Statements is given Annual Report
on page 39 to 43 of the Annual
Report. The Board of Directors approved the
Consolidated Financial Statement
The fee amount paid/payable for the along with Company Financial
services provided to the company Statements on 12th of August 2022.
during the year, with corresponding The appropriate number of copies
figures for the previous year is of this report will be submitted to
presented below.

RENUKA FOODS PLC

Annual Report 2021/22
37
 STATEMENT OF DIRECTORS’ RESPONSIBILITY
The responsibility of the Directors in The Directors are of the view The Directors are also of the view
relation to the Financial Statements that, in preparing these Financial that the Company has adequate
for the year ended 31st March Statements: resources to continue in operations
2021 which have been prepared and have applied the going concern
and presented in accordance with a) The appropriate accounting basis in preparing these Financial
the requirements of the Sri Lanka policies have been selected and Statements.
Accounting applied in a consistent manner,
material deviations if any have The Directors are also responsible for
Standards, the Listing Rules of the been disclosed and explained; taking reasonable steps to safeguard
Colombo Stock Exchange and the the Assets of the Company and
Companies Act No. 7 of 2007 is set b) All applicable Accounting that of the Group and in this regard
out in the following statement. Standards, in accordance to give proper consideration to the
with the Sri Lanka Accounting establishment of appropriate internal
As per the provisions of the Standards (SLFRS/LKAS) as control systems with a view to
Companies Act No. 7 of 2007, the relevant have been applied; preventing and detecting fraud and
Directors are required to prepare other irregularities.
Financial Statements, for each c) Reasonable and prudent
financial year and presented before judgements have been made COMPLIANCE REPORT
a General Meeting which comprise; so that the form and substance The Directors confirm that to the
of transactions are properly best of their knowledge, all taxes,
a) A statement of profit or loss and reflected; duties and levies payable by the
other comprehensive income of
company, all contributions, levies
the Company and its subsidiaries d) It provide the information and taxes payable on behalf of and in
which present a true and fair required by and otherwise respect of the employees of
view of the profit or loss of the complies with the Companies
Company for the financial year; Act No. 7 of 2007, Listing Rules the company and all other known
of Colombo Stock Exchange statutory dues as were due and
b) A statement of financial position, and requirement of any payable by the company as at the
which presents a true and fair other regulatory authority as reporting date have been paid or
view of the state of affairs of the applicable to the company. where relevant provided for.
Company and its subsidiaries as
at the end of the financial year Further, the Directors have a
together with explanatory notes responsibility to ensure that the By order of the Board
to the financial statements; Company maintains sufficient Renuka Enterprises (Pvt) Ltd
accounting records to disclose,
c) A statement of changes in equity with reasonable accuracy of the
which presents a true and fair financial position of the Company Sgd.
view of the changes in the and of the Group, also to reflect Company Secretaries
Company’s and its subsidiaries the transparency of transactions
retained earnings for the financial 12th of August 2022
and to ensure that the Financial
year; and Statements presented comply with
the requirements of the Companies
d) A statement of cash flow which
Act.
presents a true and fair view of
the flow of cash in and out of The External Auditors, M/s KPMG
the business for the financial who were deemed reappointed in
year for the Company and its terms of the Companies Act No.
Subsidiaries and; notes to the 07 of 2007 were provided with
Financial Statements, and which every opportunity to undertake
comply with the requirements of the inspections they considered
the Act. appropriate to enable them to
form their opinion on the Financial
Statements. The Report of the
Auditors, shown on page 40 set out
their responsibilities in relation to the
Financial Statements.

RENUKA FOODS PLC

38 Annual Report 2021/22
INDEPENDENT AUDITOR’S REPORT

KPMG Tel +94 - 11 542 6426

(Chartered Accountants) Fax +94 - 11 244 5872
32A, Sir Mohamed Macan Markar Mawatha, +94 - 11 244 6058
P. 0. Box 186, Internet www.kpmg.com/lk
Colombo 00300, Sri Lanka.

INDEPENDENT AUDITOR’S REPORT

TO THE SHAREHOLDERS OF RENUKA FOODS PLC

Opinion

We have audited the financial statements of Renuka Foods PLC (“the Company”), and the consolidated financial
statements of the Company and its subsidiaries (“the Group”), which comprise the statements of financial position as
at 31 March 2022, and the statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, and a summary of significant accounting policies and other explanatory information, set
out on pages 49 to 112.

In our opinion, the financial statements of the Company and the Group give a true and fair view of the financial position
of the Company and the Group as at 31 March 2022, and of their financial performance and cash flows for the year then
ended in accordance with Sri Lanka Accounting Standards.

Basis for opinion

We conducted our audit in accordance with Sri Lanka Auditing Standards (“SLAuSs”). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We are independent of the Group in accordance with the Code of Ethics issued by CA Sri Lanka (Code of Ethics)
and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

P. Y. S. Perera FCA C. P. Jayatilake FCA T. J. S. Rajakarier FCA

W. J. C. Perera FCA Ms. S. Joseph FCA Ms. S.M.B. Jayasekara FCA
W. K. D. C. Abeyrathne FCA S. T. D. L. Perera FCA G. A. U. Karunaratne FCA
R.M.D.B. Rajapakse FCA Ms. B.K.D.T.N. Rodrigo FCA R. H. Rajan FCA
KPMG, a Sri Lankan partnership and a member firm of the KPMG M.N.M. Shameel FCA Ms. C.T.K.N. Perera ACA A.M.R.P. Alahakoon ACA
global organization of independent member firms affiliated with Ms. P.M.K. Sumanasekara FCA
KPMG International Limited, a private English company limited by

guarantee. Principals: S.R.I. Perera FCMA(UK), LLB, Attorney-at-Law, H.S. Goonewardene ACA,
W. A. A. Weerasekara CFA, ACMA, MRICS

RENUKA FOODS PLC

Annual Report 2021/22
39
 INDEPENDENT AUDITOR’S REPORT (Contd...)
kpmg
01. Carrying Value of Inventories
Refer to the accounting policies in “Note 4.3 to the Financial Statements: Inventories”, “Note 2.4 to the Financial
Statements: Significant Accounting Judgments and Estimates” and “Note 22 to the Financial Statements: Inventories”.
Risk Description Our responses
The Group has recognized a total inventory provision of Our audit procedures included:
Rs.136 Mn in arriving at carrying value of inventory value
of Rs. 2,048 Mn. • Involving the component auditors of the subsidiary Companies’
and reviewing the work carried out by the component auditors
Therefore judgement is involved with regard to where necessary.
categorization of inventories in to obsolete and/or slow
moving and which should be therefore be considered • Testing the adequacy of the Group’s provision against
for provision. inventory by assessing the assumptions applied by the Group
in providing against aged/obsolete items. We did this by
As a result of the prevailing uncertain and volatile assessing the historical accuracy of the Group provisioning
macro-economic environment and implications of policy.
Covid-19 pandemic, resulted in interruption in business
activities and resulted in loss of income for some of the • As part of our attendance at the year-end inventory counts,
individuals/industries which would adversely affect the we challenged the inventory provisioning in line with our
ability to sell its inventories with a reasonable margin observations of potentially obsolete inventory. We tested a
which would potential impact on the net realizable sample of inventory, comparing the carrying value to recent
value adjustments. sales invoices to ensure provisions were appropriately applied.

We identified assessing the carrying value of inventories • Testing the calculation of labor and production overhead
as a key audit matter because of the inherent risk that absorption by critically assessing the method of calculation
the Group’s inventories may become obsolete or and challenging the levels of overhead absorbed compared
may be sold at prices below their carrying values and to actual overhead costs incurred and in comparison, to prior
because the judgment exercised by management in year levels.
determining the appropriate provision for inventories
involves management’s bias. • On a sample basis, testing of inventory items sales subsequent
to the year end and assessed if they were sold at higher than
the cost.
02. Impairment of investment in subsidiaries and goodwill subsidiaries
Refer to the accounting policies in “Note 3.5.1: Goodwill, Note 3.1.3: Subsidiaries”, “Note 2.4 to the Financial Statements:
Use of Estimates and Judgments” and “Note 19 to the Financial Statements: Investment in subsidiaries”, and “Note 21.1
to the Financial statements: Goodwill”.
Risk Description Our responses
The Company holds investments in subsidiaries Our audit procedures included:
amounting to Rs. 3,293 million as at 31st March 2022
Further, the Group holds goodwill amounting to Rs. 204 • Assessing the impairment indication relates to this asset and
million as at 31st March 2022. obtaining the management’s judgement and estimates
assessment. And test if those assessment involve any
Management performed the impairment assessment management bias.
for subsidiaries with indicators of impairment and
determined their recoverable amounts based on value- • Obtaining an understanding of management’s impairment
in-use calculations. The identification of impairment assessment process.
events and the determination of the impairment charge
require the application of significant judgment by • Obtaining assessment from management and see whether it is
management. Accordingly, the management performed comply with relevant standards.
an impairment assessment on the cash generating units
(“CGUs”) relating to the investment in subsidiaries • Evaluating the reasonableness of the Group’s key assumptions
which had an indication of impairment as individual for its revised cash flow projections such as discount rates,
Cash Generating Units and management allocated cost inflation and business growth with reference to the
goodwill to the respective CGU and the recoverable internally and externally derived sources including the Group
amounts of the identified CGUs have been determined budgetary process and reasonableness of historical forecasts.
based on value-in-use calculation.
• Reviewing of value in use computations for recoverable
We considered the audit of management’s impairment amounts with impairment indications and discussion with
assessment of goodwill and investment in subsidiaries management of the Group.
to be a key audit matter due to the magnitude of the
carrying value and use of significant judgments and • Assessing the disclosure in the financial statements in line
estimates. with the requirements of relevant accounting standards.

RENUKA FOODS PLC

40 Annual Report 2021/22
INDEPENDENT AUDITOR’S REPORT (Contd...)
kpmg
03. Valuation of Investment property
Refer to the accounting policies in “Note 3.8 to the Financial Statements: investment property”, “Note 2.4 to the Financial
Statements: Significant Accounting Judgments and Estimates” and “Note 17. To the Financial Statements: investment
property”.
Risk Description Our responses
The fair value of the Group’s investment properties as Our audit procedures included:
at 31st March 2022 was Rs. 321 Mn and fair value gain
derived from investment properties for the year ended • Assessing the objectivity, independence, competency and
31st March 2022 was Rs. 17 Mn. qualifications of the external Valuers engaged by the Group.

The fair value of the Group’s investment properties was • Obtaining and inspecting the valuation report prepared by
determined by independent external valuer engaged by the Valuer engaged by the management.
the Group.

We identified assessing the valuation of investment • Assessment of key assumptions applied by the external
properties as a key audit matter because of the Valuers in deriving the fair value of prope1ties and comparing
significance of investment properties to the Group and the same with evidence of current market values.
because the valuation of investment properties can
be inherently subjective and requires the exercise of
• Assessing the adequacy of disclosures made in relation to the
significant judgement and estimation, in particular in
fair value of properties in the financial statements, including
determining the appropriate valuation methodology,
the description and appropriateness of the inherent degree of
capitalisation and discount rates and market rents,
subjectivity and key assumptions used in the estimates.
which increases the risk of error or management bias.
04. Recoverability of Trade Receivables
Refer to the “Note 2.4 to the Financial Statements: Significant Accounting Judgments and Estimates” and “Note 23.
To the Financial Statements: trade receivables”.
Risk Description Our responses
Trade receivable balances were significant to the Group Our audit procedures included:
due to the trade receivables from following subsidiary
Involving the component auditors of the subsidiary Companies’
companies;
and reviewing the work carried out by the component auditors
• Shaw Wallace Ceylon Limited
where necessary.
• Renuka Agri Foods PLC
• Renuka Agri Organics Limited
• Testing the aging of the trade receivables and evaluated
• Richlife Dairies Limited
management’s assumptions used to estimate the trade
receivables provision amount, through specific review of
Any impairment of significant trade receivable could
significant overdue individual trade receivables, reviewing
have material impact on the Group’s profitability.
payment history of debtors, checking the bank receipts for
the payment received subsequent to the year end and calling
Recoverability of trade receivables remains one of the
debtor confirmations.
most significant judgment made by the management
particularly in light of the prevailing uncertain and • Assessing the adequacy of the disclosures related to trade
volatile macro-economic environment and implication receivables and the related credit risk in the consolidated
of Covid-19 pandemic as at the reporting date. financial statements.

The Group uses significant judgment, based on the

available facts and circumstances, including but not
limited to, the length of relationship with the customer
and the customer’s repayment history and known
market factors. In addition, trade receivables allowance
assessment requires significant management judgment.
As such, we determined that this is a key audit matter.

RENUKA FOODS PLC

Annual Report 2021/22
41
 INDEPENDENT AUDITOR’S REPORT (Contd...)
kpmg

Other Information
The Directors are responsible for the other information. The other information comprises all the information included in the
annual report, other than the financial statements and our auditor’s report thereon.

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation of the financial statements that give a true and fair view in accordance with
Sri Lanka Accounting Standards, , and for such internal control as the management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SLAuSs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with SLAuSs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company and the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

RENUKA FOODS PLC

42 Annual Report 2021/22
INDEPENDENT AUDITOR’S REPORT (Contd...)
kpmg

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision
and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
in accordance with Code of Ethics regarding independence, and communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

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

CA Sri Lanka membership number of the engagement partner responsible for signing this independent auditor’s report is 3707.

KPMG
Chartered Accountants
12th August 2022

RENUKA FOODS PLC

Annual Report 2021/22
43
 STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
GROUP COMPANY
2022 2021 2022 2021
FOR THE YEAR ENDED 31ST MARCH Note
Rs. Rs. Rs. Rs.

Revenue 6 10,695,305,164 8,667,438,896 12,000,000 77,207,792

Cost of Sales (8,914,518,671) (7,631,156,004) – –
Gross Profit 1,780,786,493 1,036,282,892 12,000,000 77,207,792
Gain on disposal of Investment 7 104,151,964 – 117,783,925 -
Other Income 8 47,622,112 61,815,207 – –
Change in Fair Value of Investment Property 17.1 17,367,549 10,394,526 – –
Administrative Expenses (514,671,307) (529,288,157) (7,204,140) (6,473,048)
Selling & Distribution Expense (630,330,051) (516,859,826) – –
Other Expenses 9 – (346,309,311) – –
Operating Profit/(Loss) 804,926,760 (283,964,669) 122,579,785 70,734,744
Finance Income 10 592,703,439 100,274,085 256,349 34,801
Finance Costs 11 (527,476,794) (230,714,831) (5,628,933) (161,984)
Net Finance Costs 65,226,645 (130,440,746) (5,372,584) (127,183)
Share of profit from Equity Account Investee – 39,699,539 – –
Profit/(Loss) before Tax 12 870,153,405 (374,705,876) 117,207,201 70,607,561
Taxation 13 (136,881,260) (10,151,615) (16,899,144) (8,525,241)
Profit /(Loss) for the year 733,272,145 (384,857,491) 100,308,057 62,082,320

Other Comprehensive Income

Items that will not be re-classified to Profit or Loss
Equity-accounted Investees – Share of OCI – (20,931) – –
Actuarial Gains /(Loss) on Retirement Benefit Plans 31.1 9,835,736 3,965,216 – –
Revaluation of land and buildings 17,100,000 – -- --
Gain on Fair Value of Investment 33,846,317 127,429,195 – –
Tax effect on Reveluation of land and buldings (224,918) 72,198,921 -- --
Tax effect on changes in Fair Value of Investment (7,107,727) (26,760,131) – –
Tax effect on Acturial gain / (loss) (1,314,325) (614,754)
Other Comprehensive Income, Net of Tax 52,135,083 176,197,516 – –

Total Comprehensive Income/(Expenses) 785,407,228 (208,659,975) 100,308,057 62,082,320

Profit /(Loss) Attributable to;

Owners of the Company 554,351,186 (184,603,247) 100,308,057 62,082,320
Non Controlling Interests 178,920,959 (200,254,244) – –
Profit /(Loss) for the year 733,272,145 (384,857,491) 100,308,057 62,082,320

Total Comprehensive Income Attributable to;

Owners of the Company 594,736,259 (22,459,136) 100,308,057 62,082,320
Non Controlling Interests 190,670,969 (186,200,839) – –
Total Comprehensive Income/(Expenses) for the year 785,407,228 (208,659,975) 100,308,057 62,082,320

Basic Earnings/(Loss) per Share 14.1 4.52 (1.50) 0.82 0.51

Diluted Earnings/(Loss) per Share 14.2 4.52 (1.50) 0.82 0.51
Dividend per Share 14.3 – 0.35 - 0.35

Figures in brackets indicate deductions.

The Notes set out on page 49 to 112 form an integral part of these Financial Statements.

RENUKA FOODS PLC

44 Annual Report 2021/22
STATEMENT OF FINANCIAL POSITION
GROUP COMPANY
2022 2021 2022 2021
AS AT 31 MARCH
ST
Note
Rs. Rs. Rs. Rs.
ASSETS
Non-Current Assets
Property, Plant and Equipment 15 4,672,434,663 4,436,758,332 − –
Right of use assets 16 124,533,033 130,980,731 – –
Investment Property 17 320,757,694 303,390,145 – –
Biological Assets 18 120,940,042 109,439,774 – –
Investment in Subsidiaries 19 – – 3,293,149,435 3,238,102,935
Investment in FVTOCI 20 1,140,675,512 559,429,195 – –
Intangible Assets and Goodwill 21 216,108,447 218,906,186 – –
Total Non-Current Assets 6,595,449,391 5,758,904,363 3,293,149,435 3,238,102,935

Current Assets
Inventories 22 1,912,173,981 1,347,086,178 – –
Trade and Other Receivables 23 1,855,027,308 1,517,811,400 331,701 319,204
Current Tax Assets 4,086,246 14,264,083 – –
Amounts Due from Related Companies 24 10,396,913 11,011,495 – –
Cash and Cash Equivalents 26 476,255,688 411,123,161 6,023,672 10,139,941
Assets Held for Sale 25 4,698,806 - - -
Total Current Assets 4,262,638,942 3,301,296,318 6,355,373 10,459,145
Total Assets 10,858,088,333 9,060,200,681 3,299,504,808 3,248,562,080

EQUITY AND LIABILITIES

Equity
Stated Capital 27 2,241,842,234 2,241,842,234 2,241,842,234 2,241,842,234
Revaluation Reserve 28 737,310,185 755,457,294 – –
Retained Earnings 1,616,234,564 1,229,183,377 1,044,018,545 943,710,488
Equity attributable to Owners of the Company 4,595,386,983 4,226,482,905 3,285,860,779 3,185,552,722
Non Controlling Interest 1,309,461,060 788,052,773 – –
Total Equity 5,904,848,043 5,014,535,678 3,285,860,779 3,185,552,722

Non-Current Liabilities
Deferred Tax Liability 29 470,301,364 460,160,494 – –
Interest Bearing Borrowings 30 457,391,950 293,041,890 – –
Lease Liabilities 16.2 139,097,279 102,943,378 – –
Retirement Benefit Obligation 31 101,919,111 113,458,562 – –
Total Non Current Liabilities 1,168,709,704 969,604,324 – –

Current Liabilities
Trade and Other Payables 32 1,432,457,075 885,905,026 2,325,615 2,056,758
Amounts Due to Subsidiary Companies 33 – – – 45,150,682
Amounts Due to Related Companies 33.1 36,900 676,874 – –
Dividend Payable 34 12,107,992 16,823,303 5,088,486 9,775,773
Current Portion of Interest Bearing Borrowings 30 2,079,485,717 1,992,183,745 – –
Lease Liabilities 16.2 23,108,974 24,783,125 – –
Current Tax Payable 87,677,851 26,190,063 6,145,368 5,804,236
Bank Overdraft 26 149,656,077 129,498,543 84,560 221,909
Total Current Liabilities 3,784,530,586 3,076,060,679 13,644,029 63,009,358
Total Liabilities 4,953,240,290 4,045,665,003 13,644,029 63,009,358
Total Equity and Liabilities 10,858,088,333 9,060,200,681 3,299,504,808 3,248,562,080
The Notes set out on page 49 to 112 form an integral part of these Financial Statements.

I certify that the Financial Statements of the Group comply with the requirement of the Companies Act No, 07 of 2007.

P. Gunathilake
Chief Executive officer / Group Director shared Services

The Board of directors is responsible for preparation and presentation of these Financial Statements. Approved and signed for and on behalf of the Board.

Dr. S. R. Rajiyah V. Sanmugam

Director Director
12th August 2022
Colombo

RENUKA FOODS PLC

Annual Report 2021/22
45
 46
Equity Attributable to Owners of Non Total
the Company Controlling Equity
Interests
Stated Revaluation FVTOCI Retained Total
FOR THE YEAR ENDED 31ST MARCH
Capital Reserve Reserve Earnings
Rs. Rs. Rs. Rs. Rs. Rs. Rs.
GROUP
Balance at 1 April 2020 2,241,842,234 712,167,960 (2,180,638) 1,660,162,815 4,611,992,371 1,194,362,198 5,806,354,569
Profit for the year – – (184,603,247) (184,603,247) (200,254,244) (384,857,491)

Annual Report 2021/22

Other Comprehensive Income, net of tax 65,447,326 – 96,696,785 162,144,111 14,053,405 176,197,516

RENUKA FOODS PLC

Total Comprehensive Income for the year – 65,447,326 -- (87,906,462) (22,459,136) (186,200,839) (208,659,975)
Changes in ownership interest that do not result in loss of control -- (21,825,341) – (298,268,281) (320,093,622) (199,906,378) (520,000,000)
Transactions with the owners
Dividends (Note 13.3) -- -- -- (42,956,708) (42,956,708) (20,202,208) (63,158,916)
Transfers (332,651) 2,180,638 (1,847,987)
Total transactions with the owners – (332,651) -- (44,804,695) (42,956,708) (20,202,208) (63,158,916)
Balance as at 31 March 2021 2,241,842,234 755,457,294 – 1,229,183,377 4,226,482,905 788,052,773 5,014,535,678

Balance as at 1st April 2021 2,241,842,234 755,457,294 – 1,229,183,377 4,226,482,905 788,052,773 5,014,535,678

Profit for the period – – – 554,351,186 554,351,186 178,920,959 733,272,145

Other Comprehensive Income, net of tax 10,588,481 29,796,592 40,385,073 11,750,010 52,135,083
Total Comprehensive Income for the year – 10,588,481 – 584,147,778 594,736,259 190,670,969 785,407,228

Changes in ownership interest that do not result in loss of control (28,289,612) (197,542,569) (225,832,181) 327,952,181 102,120,000
Disposal of a subsidiary – – – – – 2,785,137 2,785,137
Transactions with the owners
Revaluation Transfer (Note A) -- (445,978) -- 445,978 – – –
Total transactions with the owners – (445,978) – 445,978 – – –
STATEMENT OF CHANGES IN EQUITY

Balance as at 31 March 2022 2,241,842,234 737,310,185 -- 1,616,234,564 4,595,386,983 1,309,461,060 5,904,848,043

Figures in brackets indicate deductions.

The Notes set out on page 49 to 112 form an integral part of these Financial Statements
STATEMENT OF CHANGES IN EQUITY (Contd..)

FOR THE YEAR ENDED 31ST MARCH Stated Retained Total

Capital Earnings

Rs. Rs. Rs.

COMPANY
Balance as at 1st April 2020 2,241,842,234 924,584,876 3,166,427,110

Profit for the period

Other Comprehensive Income, net of Tax -- 62,082,320 62,082,320
Total Comprehensive Income for the year -- 62,082,320 62,082,320
Transactions with the owners
Dividends (Note 14.3) -- (42,956,708) (42,956,708)
Total transactions with the owners -- (42,956,708) (42,956,708)

Balance as at 31 March 2021 2,241,842,234 943,710,488 3,185,552,722

Balance as at 1st April 2021 2,241,842,234 943,710,488 3,185,552,722

Profit for the period -- 100,308,057 100,308,057

Other Comprehensive Income, net of Tax -- -- --

Total Comprehensive Income for the year -- 100,308,057 100,308,057

Balance as at 31 March 2022 2,241,842,234 1,044,018,545 3,285,860,779

Figures in brackets indicate deductions.

The Notes set out on page 49 to 112 form an integral part of these Financial Statements.

RENUKA FOODS PLC

Annual Report 2021/22
47
 STATEMENT OF CASH FLOWS
GROUP COMPANY
2022 2021 2022 2021
FOR THE YEAR ENDED 31ST MARCH NOTE
Rs. Rs. Rs. Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Profit / (Loss) from continuing operation 870,153,405 (374,705,876) 117,207,201 70,607,561

Adjustments for :
Depreciation on Property plant and equipments 15 316,366,172 297,796,077 – –
Amortization of Intangible Assets 21 3,726,208 3,657,742 – –
Amortization of ROU Asset 16 17,206,756 16,276,878 – –
Loss on disposal of lease – 6,301,898 – –
Written back of Interest payable on loan – (43,401) – –
Provision for Retiring Gratuity 31 18,528,053 26,123,255 – –
Provision for obsolete inventories 22 (13,538,365) (11,037,337) – –
Provision for doubtful debts 23 22,044,414 – – –
Gain from Change in Fair Value of Investment Properties 17 (17,367,549) (10,394,526) – –
Gain on disposal of subsidiary (42,713,889) - (117,783,925) –
Changes on fair value of Biological Assets 18 722,302 (4,689,040) – –
Loss on disposal of Equity accounted investees – 301,309,311 – –
Exchange loss 16 40,420,584 6,734,260 – –
Profit share of Equity Account Investee – (39,699,539) – –
Interest Expenses 11 186,312,631 126,637,585 5,628,933 161,984
Interest Income 10 (5,554,441) (7,334,027) (256,349) (34,801)
Impairment on Propety, Plant & Equipment – 45,000,000 – –
Gain on disposal of Propety, Plant & Equipment 8 – (11,309,916) – –
Operating Profit Before working Capital Changes 1,396,306,281 370,623,344 4,795,860 70,734,744
Changes in:
Inventories (626,321,370) (86,252,340) – –
Trade & Other Receivables (445,290,394) (450,872,688) (12,500) (23,986)
Amount Due from Related Companies 581,250 (9,151,025) – –
Trade & Other Payables 564,622,051 (35,199,717) (4,418,428) 382,354
Amount Due to Related Companies (633,319) 584,568 (45,150,682) 45,150,682
Cash Generated/(Used in) from Operations 889,264,499 (210,267,858) (44,785,750) 116,243,794
Interest Paid (177,241,624) (117,032,538) (5,628,933) (161,984)
Gratuity Paid 31 (12,881,799) (14,422,204) – –
Taxation Paid (21,966,454) (23,080,443) (16,558,014) (5,536,005)
Net Cash Generated from/(Used in) Operating Activities 677,174,622 (364,803,043) (66,972,697) 110,545,805
CASH FLOW FROM INVESTING ACTIVITIES
Addition to Property, Plant and Equipment and Investment Property 15 (670,098,672) (268,024,575) – –
Addition to Intangible asset 21 (928,469) – – –
Addition to Biological Assets 18 (12,222,570) (13,798,621) – –
Dividend income received – 1,890,000 – –
Interest income received 10 5,554,441 7,334,027 256,349 34,801
Net (Investment) / Disposal in subsidiary 19 198,119,573 – 62,737,428 (36,300,000)
Acquisition of NCI – (520,000,000) – –
Proceeds from partial disposal of a subsidiary 102,120,000 – – –
Proceeds from Disposal of Property, Plant and Equipment – 41,610,907 – –
Acquisition of Available for sale Financial Assets (547,400,000) – – –
Proceeds from Disposal of Investment in Equity Accounted Investees – 578,017,050 – –
Net Cash Generated from/(Used in) Investing Activities (924,855,697) (172,971,212) 62,993,777 (36,265,199)
CASH FLOW FROM FINANCING ACTIVITIES
Lease Rental Paid 16 (25,668,439) (47,087,717) – –
Proceeds from Borrowings 30 7,848,369,477 5,532,690,774 – –
Repayment of Borrowings 30 (7,525,329,659) (4,712,937,381) – –
Dividends Paid (4,715,311) (39,262,733) – (38,080,103)
Dividends Paid to Minority – (20,202,208) – –
Net Cash Generated from/(Used in) Financing Activities 292,656,068 713,200,735 – (38,080,103)
Net Increase/(Decrease) in Cash & Cash Equivalents 44,974,993 175,426,480 (3,978,920) 36,200,503
Cash & Cash Equivalents at the Beginning of the Year 281,624,618 106,198,138 9,918,032 (26,282,471)
Cash & Cash Equivalents at the End of the Year 326,599,611 281,624,618 5,939,112 9,918,032
Note A: Analysis of Cash and Cash Equivalents
Cash at Bank & in Hand 26 476,255,688 411,123,161 6,023,672 10,139,941
Bank Overdraft 26 (149,656,077) (129,498,543) (84,560) (221,909)
326,599,611 281,624,618 5,939,112 9,918,032
Figures in brackets indicate deductions.
The Notes set out on page 49 to 112 form an integral part of these Financial Statements.

RENUKA FOODS PLC

48 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS
1. CORPORATE INFORMATION 2. BASIS OF PREPARATION y Land and bulding are carried
1.1 General 2.1 Statement of compliance at fair value

Renuka Foods PLC (“Company”) The Statement of financial y Assets held for sales are
is a quoted public limited position, Statement of profit or measured at fair value
liability company incorporated loss and other comprehensive y Liability for Defined Benefit
and domiciled in Sri Lanka income, Statement of changes Obligations is recognized
under the Companies Act No. in equity and Statement of cash as the present value of the
17 of 1982, re registered under flows, together with Notes defined benefit obligation.
the Companies Act No. 07 of to the financial statements
2007. The registered office and (“Financial Statements”) of the 2.3 Functional and presentation
the principal place of business Group as at 31st March 2022 and currency
is situated at No. 69. Sri for the year then ended, comply These consolidated financial
Jinarathana Road, Colombo 2. with the Sri Lanka Accounting statements are presented in
Standards (SLFRSs / LKASs) as Sri Lankan Rupees, which is the
In the Annual Report of the Board laid down by the Institute of Company’s functional currency.
of Directors’ and in the financial Chartered Accountants of Sri
statements, “the company” Lanka and the requirements of 2.4 Use of estimates and judgments
refers to Renuka Foods PLC as the Companies Act No. 07 of
the holding company and “the 2007. The preparation of the
Group” refers to the companies consolidated financial
whose accounts have been 2.1.1 Directors’ Responsibility statements in conformity with
consolidated therein. for the Financial Statements Sri Lanka Accounting Standards
requires management to
The Board of Directors is make judgments, estimates
1.2 Principal Activities
responsible for the preparation and assumptions that affect
During the year principal and presentation of these the application of accounting
activities of the Company and Financial Statements as per the policies and the reported
Subsidiaries are given in note provisions of the Companies amounts of assets, liabilities,
3.1. Act No. 07 of 2007 and SLFRS. income and expenses. Actual
results may differ from these
1.3 Parent Enterprise and Ultimate The Board of Directors estimates.
Parent Enterprise acknowledges their
The Company’s immediate responsibility as set out in the Estimates and underlying
parent undertaking is Renuka “Annual Report of the Board assumptions are reviewed on
Agro Exports (Pvt) Ltd. In the of Directors on the Affairs of an ongoing basis. Revisions
opinion of the Directors, the the Company”, “Statement of to accounting estimates are
Company’s ultimate parent Director’s Responsibilities” and recognized in the period in
entity is Renuka Holdings PLC, the “Statement of Financial which the estimates are revised
which is incorporated in Sri Position”. and in any future periods
Lanka. affected.
2.2 Basis of measurement
1.4 Authorization of Financial Information about critical
Statements The financial statements have judgments in applying
The consolidated financial been prepared on the historical accounting policies that have
statements of the Group for cost basis except for the the most significant effect
the year ended 31st March 2022 following material items in the on the amounts recognized
were authorized for issue in statement of financial position: in the consolidated financial
accordance with a resolution statements is included in the
of the Directors on 12th August y Biological assets are following notes:
2022. measured at fair value less
costs to sell y Note 17 – Measurement of
1.5 Financial Year y Investment property is investment property

Financial Statements of the measured at fair value

Information about assumptions
Company and Group entities and estimation uncertainties
ends on 31st March 2022.

RENUKA FOODS PLC

Annual Report 2021/22
49
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

that have a significant risk to be prepared on the going z Ceylon Forestry (Pvt) Ltd
of resulting in a material concern basis. Planting and Managing
adjustment within the next Forestry.
financial year are included in 2.6 Changes in Accounting
the following notes: Policies z Richlife Dairies Ltd
Manufacturing of dairy &
y Note 31- Measurement of The Group has initially adopted fruit juice based products.
defined benefit obligations Definition of a Business
(Amendment to SLFRS 3) from z Shaw Wallace Ceylon Ltd
y Note 36 – Contingencies Manufacturing & distribution
01st April 2020. A number of
y Note 29 – Deferred tax other new standards are also of Fast Moving Consumer
assets effective from 01st April 2020, Goods.
but they do not have a material Shaw Wallace Properties
y Note 40 – Economic effect on the Group's Financial
z
conditions and its impact on (Pvt) Ltd
Statements.
the Finical statement. Providing warehousing
facilities.
Deferred tax assets are 3. SIGNIFICANT ACCOUNTING
recognized in respect of tax POLICIES z Renuka Agri Organics Ltd
losses to the extent that it is Manufacture & export of
probable that future taxable The accounting policies set coconut based products.
profit will be available out below have been applied
against which the losses consistently to all periods z Coco Lanka (Pvt) Ltd
can be utilized. Judgment is presented in these consolidated Plantation.
required to determine the financial statements, unless
amount of deferred tax assets otherwise indicated. 3.1.1 Business combinations
that can be recognized, The Group accounts for
based upon the likely timing The accounting policies have business combinations using
and level of future taxable been applied consistently by the acquisition method when
profits, together with future Group entities. the acquired set of activities
tax-planning strategies and and assets meets the definition
considered any uncertainty 3.1 Basis of consolidation of a business and control is
that could arise due to the transferred to the Group.
Covid Pandemic and Marco The Financial Statements of
In determining whether a
economic conditions the Group represents the
particular set of activities and
consolidation of the Financial
assets is a business, the Group
2.5 Going Concern Statements of the Company and
assesses whether the set of
of its subsidiaries listed below,
The Board of Directors has assets and activities acquired
made an assessment on includes, at a minimum, an
the Company’s ability to z Renuka Agri Foods PLC
input and substantive process
continue as a going concern Manufacture & export and whether the acquired
and is satisfied that it has coconut based products set has the ability to produce
the resources to continue in outputs.
business for the foreseeable z Renuka Developments (Pvt)
future. Furthermore, Board of Ltd.
The Group has an option to
Directors is not aware of any Organic certification licence apply a ‘concentration test’
material uncertainties that may holder and investment in that permits a simplified
cast significant doubt upon the plantation/farm and vertical assessment of whether an
Group’s ability to continue as a integration projects acquired set of activities and
going concern. assets is not a business. The
z Kandy Plantations Ltd optional concentration test is
Such includes management’s Engaged in Organic met if substantially all of the
assessment of the existing Certified Cultivation of fair value of the gross assets
and anticipated effects of Agriculture Produce acquired is concentrated in
COVID-19 on the Company and a single identifiable asset or
its subsidiaries. Therefore, the group of similar identifiable
Financial Statements continue assets.

RENUKA FOODS PLC

50 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

The consideration transferred 3.1.2 Acquisitions of non- controlling gains, but only to the extent
in the acquisition is generally interests that there is no evidence of
measured at fair value, as are Acquisitions of non-controlling impairment.
the identifiable net assets interests are accounted for as
acquired. Any goodwill that 3.1.6 Loss of Significant Influence in
transactions with owners in their
arises is tested annually for Equity Accounted Investee
capacity as owners and therefore
impairment. Any gain on a no goodwill is recognized as When the Group looses
bargain purchase is recognised a result. Adjustments to non- significant influence over an
in profit or loss immediately. controlling interests arising from equity accounted investee, it
Transaction costs are expensed transactions that do not involve derecognizes the investment
as incurred, except if related the loss of control are based on a in equity accounted investee.
to the issue of debt or equity proportionate amount of the net Any resulting gain or loss is
securities. assets of the subsidiary. recognized in profit or loss. Any
interest retained in the former
The consideration transferred 3.1.3 Subsidiaries
equity accounted investee
does not include amounts Subsidiaries are entities is measured at fair value and
related to the settlement of controlled by the Group. recorded under FVTOCI.
pre-existing relationships. The financial statements of
Such amounts are generally subsidiaries are included in the 3.2 Foreign Currency
recognised in profit or loss. consolidated financial statements
from the date that control 3.2.1 Foreign currency transactions
Any contingent consideration commences until the date that All transactions in foreign
is measured at fair value at control ceases. The accounting currencies are translated at the
the date of acquisition. If an policies of subsidiaries have rate of exchange prevailing at
obligation to pay contingent been changed when necessary the time the transaction was
consideration that meets to align them with the policies effected. All monetary assets and
the definition of a financial adopted by the Group. liabilities in foreign currencies at
instrument is classified as the year-end are translated at the
equity, then it is not remeasured 3.1.4 Loss of control rate prevailing on the Reporting
and settlement is accounted for On the loss of control, the Group date. Non monetary assets and
within equity. Otherwise, other derecognizes the assets and liabilities which are carried in
contingent consideration is liabilities of the subsidiary, any terms of historical cost or fair
remeasured at fair value at each non-controlling interests and value denominated in foreign
reporting date and subsequent the other components of equity currencies are translated using
changes in the fair value of the related to the subsidiary. Any the exchange rate at the date of
contingent consideration are surplus or deficit arising on the transaction. Non monetary assets
recognised in profit or loss. loss of control is recognized in and liabilities denominated
profit or loss. in foreign currencies that are
If share-based payment awards stated at fair value are translated
(replacement awards) are required 3.1.5 Transactions eliminated on to reporting currency using the
to be exchanged for awards held consolidation exchange rate that was prevailing
by the acquiree’s employees Intra-group balances and on the date the fair value was
(acquiree’s awards), then all or transactions, and any unrealized determined. The resulting gains
a portion of the amount of the income and expenses arising or losses on translations are
acquirer’s replacement awards from intra-group transactions, dealt with in the Statements of
is included in measuring the are eliminated in preparing Comprehensive Income.
consideration transferred in the consolidated financial
the business combination. This statements. Unrealized gains
determination is based on the arising from transactions with
market-based measure of the equity-accounted investees
replacement awards compared are eliminated against the
with the market-based measure investment to the extent of the
of the acquiree’s awards Group’s interest in the investee.
and the extent to which the
replacement awards relate to Unrealized losses are eliminated
pre-combination service. in the same way as unrealized

RENUKA FOODS PLC

Annual Report 2021/22
51
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

3.3 Financial instruments As measured at amortised cost FVOCI category are measured
A financial instrument is any A financial asset is measured initially as well as at each
contract that gives rise to a at amortised cost if both of the reporting date at fair value. Fair
financial asset of one entity following conditions are met and value movements are recognized
and financial liability or equity is not designated as at FVTPL: in the other comprehensive
instrument of another entity. income (OCI).However, the
Receivables and debt securities z it is held within a business company recognizes interest
issued are initially recognised model whose objective is income and impairment losses in
when they are originated. to hold assets to collect the statement of profit and loss.
All other financial assets and contractual cash flows; and
financial liabilities are initially Fair value through profit or
recognised when the Company z its contractual terms give loss (FVTPL).
becomes a party to the rise on specified dates to All financial assets not classified
contractual provisions of the cash flows that are solely as measured at amortised cost
instrument. payments of principal and or FVOCI as described above are
interest on the principal measured at FVTPL. This includes
Financial Assets – Recognition amount outstanding. all derivative financial assets.
and initial measurement SLFRS 9
The Group financial assets On initial recognition, the
A financial asset (unless it is
classified and measured at Company may irrevocably
a trade receivable without a
amortized cost are limited to designate a financial asset
significant financing component)
its other receivables, short term that otherwise meets the
or financial liability is initially
investments, amounts due from requirements to be measured at
measured at fair value plus, for
related party and cash & cash amortised cost or at FVOCI as
an item not a FVTPL, transaction
equivalent. at FVTPL if doing so eliminates
costs that are directly attributable
or significantly reduces an
to its acquisition or issue. A trade
Fair value through other accounting mismatch that would
receivable without a significant
comprehensive income otherwise arise.
financing component is initially
(FVOCI)
measured at the transaction
The Financial assets is measured Equity instruments included
price.
at FVOCI if it meets both of the within the FVTPL category are
following conditions and is not measured at fair value with
On initial recognition, a financial
designated as at FVTPL: all changes recognized in the
asset is classified as below:
statement of profit and loss.
- As measured at amortised z it is held within a business
model whose objective is Financial assets – Subsequent
cost
achieved by both collecting measurement and gains and
- Fair value through other contractual cash flows and losses
comprehensive income selling financial assets; and Financial assets at amortised
(FVOCI) cost
z its contractual terms give
- Fair value through profit or rise on specified dates to These assets are subsequently
loss (FVTPL). cash flows that are solely measured at amortised cost using
payments of principal and the effective interest method.
Financial assets are not The amortised cost is reduced
interest on the principal
reclassified subsequent to their by impairment losses. Interest
amount outstanding.
initial recognition unless the income, foreign exchange gains
Company changes its business and losses and impairment are
On initial recognition of an
model for managing financial recognised in profit or loss. Any
equity investment that is not
assets, in which case all affected gain or loss on derecognition is
held for trading, the Company
financial assets are reclassified on recognised in profit or loss.
may irrevocably elect to present
the first day of the first reporting
subsequent changes in the
period following the change in
investment’s fair value in OCI.
the business model.
This election is made on an
investment by investment basis.

RENUKA FOODS PLC

52 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

Debt investments at FVOCI Classification and subsequent same lender on substantially

These assets are subsequently measurement of financial different terms, or the terms of an
measured at fair value. Interest liabilities existing liability are substantially
income calculated using the modified, such an exchange or
The Group classifies financial
effective interest method, foreign modification is treated as the
liabilities as described below:
exchange gains and losses and derecognition of the original
impairment are recognised in - Financial liabilities at fair liability and the recognition of
profit or loss. value through profit or loss a new liability. The difference in
(FVTPL) the respective carrying amounts
Other net gains and losses is recognised in the statement of
are recognised in OCI. On - Financial liabilities at profit and loss.
derecognition, gains and amortised cost
losses accumulated in OCI are Non-derivative financial
The subsequent measurement
reclassified to profit or loss. liabilities Measurement
of financial liabilities depends on
their classification. A financial liability is classified
Equity investments at FVOCI
as at Fair Value through Profit or
These assets are subsequently Financial liabilities at FVTPL Loss if it is classified as held-for-
measured at fair value. Dividends trading or is designated as such
Financial liabilities at fair
are recognised as income in on initial recognition. Directly
value through profit and loss
profit or loss unless the dividend attributable transaction costs
include financial liabilities
clearly represents a recovery of are recognised in profit or loss
held for trading and financial
part of the cost of the investment. as incurred. Financial liabilities at
liabilities designated upon initial
FVTPL are measured at fair value
recognition as at fair value
Other net gains and losses are and changes therein, including
through profit and loss.
recognised in OCI and are never any interest expense, are
reclassified to profit or loss. recognised in profit or loss. The
Gains or losses on liabilities held Group classifies non derivative
for trading are recognised in the financial liabilities in to other
Financial assets at FVTPL
profit and loss. financial liability category. The
These assets are subsequently Group derecognises a financial
measured at fair value. Net Financial liabilities at amortised liability when its contractual
gains and losses, including any cost obligations are discharged,
interest or dividend income, are cancelled or expired. The Group
The financial liabilities which
recognised in profit or loss. has the following nonderivative
are not designated at FVTPL are
classified as financial liabilities at financial liabilities: trade and
Derecognition – Financial assets other payables, bank overdrafts,
amortised cost.
Financial Assets derecognise loans and borrowings
when the contractual rights to After initial recognition, and financial guarantees.
the cash flows from the asset such financial liabilities are Such financial liabilities are
expire, or it transfers the rights subsequently measured at recognised initially at fair value
to receive the contractual cash amortised cost using the EIR plus any directly attributable
flows in a transaction in which method. Amortised cost is transaction costs. Subsequent
substantially all of the risks and calculated by taking into account to initial recognition, these
rewards of ownership of the any discount or premium on financial liabilities are measured
financial asset are transferred, acquisition and fees or costs that at amortised cost using the
or it neither transfers nor retains are an integral part of the EIR. effective interest method.
substantially all of the risks
and rewards of ownership and Derecognition – Financial 3.3.4. Determination of Fair Value
does not retain control over the Liability Fair value is the price that would
transferred asset. Any interest be received to sell an asset or
A financial liability is derecognised
in such derecognised financial paid to transfer a liability in an
when the obligation under
assets that is created or retained orderly transaction between
the liability is discharged or
by the Group is recognised as a market participants at the
cancelled or expires. When
separate asset or liability. measurement date.
an existing financial liability is
replaced by another from the

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The fair value measurement is Level 2 initial recognition, the financial

based on the presumption that instrument is initially measured
If a market for a financial
the transaction to sell the asset at the transaction price and
instrument is not active, then
or transfer the liability takes any difference between this
the Group establishes fair value
place either: price and the value initially
using a valuation technique.
obtained from a valuation
In the principal market for Valuation techniques include
z model is subsequently
the asset or liability or using recent transactions
recognised in profit or loss
between knowledgeable,willing
on an appropriate basis over
z In the absence of a principal parties (if available), reference
the life of the instrument
market, in the most to the current fair value of other
but not later than when the
advantageous market for instruments that are substantially
valuation is supported wholly
the asset or liability. the same, discounted cash flow
by observable market data or
analyses, credit models, option
All assets and liabilities for which the transaction is closed out.
pricing models and other
fair value is measured or disclosed relevant valuation models. The
in the financial statements are Level 3
chosen valuation technique
categorized within the fair value makes maximum use of Certain financial instruments
hierarchy, described as follows, market inputs, relies as little as are recorded at fair value using
based on the lowest level input possible on estimates specific valuation techniques in which
that is significant to the fair value to the Company, incorporates current market transactions
measurement as a whole: all factors that market or observable market data are
participants would consider not available. Their fair value is
z Level 1 – Quoted (unadjusted) in setting a price, and is determined by using valuation
market prices in active consistent with accepted models that have been tested
markets for identical assets economic methodologies for against prices or inputs to
or liabilities pricing financial instruments. actual market transactions and
Inputs to valuation techniques also using the best estimate
z Level 2 – Valuation techniques reasonably represent market
for which the lowest level of the most appropriate
expectations and measures of model assumptions. Models
input that is significant to the risk-return factors inherent
the fair value measurement are adjusted to reflect the
in the financial instrument. spread for bid and ask prices
is directly or indirectly The Group calibrates valuation
observable to reflect costs to close
techniques and tests them out positions, credit and
z Level 3 – Valuation techniques for validity using prices from debit valuation adjustments,
for which the lowest level observable current market liquidity spread and
input that is significant to transactions in the same limitations in the models. Also,
the fair value measurement is instrument or based on other profit or loss calculated when
unobservable available observable market such financial instruments
data. The best evidence of are first recorded (‘Day 1’
Level 1 the fair value of a financial profit or loss) is deferred and
instrument at initial recognition recognised only when the
When available, the Group is the transaction price, i.e. the inputs become observable
measures the fair value of an fair value of the consideration or on derecognition of the
instrument using active quoted given or received, unless the instrument.
prices or dealer price quotations fair value of that instrument
(assets and long positions are is evidenced by comparison 3.3.3 Stated capital
measured at a bid price; liabilities with other observable current
and short positions are measured market transactions in the 3.3.3.1 Ordinary shares
at an asking price), without any same instrument, i.e. without
deduction for transaction costs. modification or repackaging, Ordinary shares are classified
A market is regarded as active or based on a valuation as equity. Incremental costs
if quoted prices are readily and technique whose variables directly attributable to the
regularly available and represent include only data from issue of ordinary shares are
actual and regularly occurring observable markets. When recognized as a deduction
market transactions. transaction price provides the from equity, net of any tax
best evidence of fair value at effects.

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3.3.4 Financial instruments (part of revalued, the entire class of such management. Depreciation of
equity) assets is revalued at fair value on an asset ceases at the earlier
the date of revaluation. of the date that the asset is
Financial instruments issued classified as held for sale in
by the Group comprise - Valuations are performed accordance with SLFRS 5
convertible debentures that can every 3–5 years (or frequently and the date that the asset
be converted to share capital enough) to ensure that the fair is derecognised. Therefore,
at the option of the issuer. value of a revalued asset does depreciation does not cease
The value of these convertible not differ materially from its when the asset becomes idle or
debentures is treated as part carrying amount. is retired from active use unless
of equity of the issuer and the asset is fully depreciated.
parent or the subsidiary holding Any revaluation surplus
these instruments accounts as is recognised in other Capital expenditure incurred in
investments. comprehensive income and relation to fixed assets which
accumulated in equity in the are not completed as at the
3.4 Property, plant and equipment asset revaluation reserve, except reporting date are shown as
to the extent that it reverses a capital work-in-progress and is
3.4.1 Recognition and revaluation decrease of the same stated at cost. On completion,
measurement asset previously recognised in the related assets are
Plant and equipment is stated the income statement, in which transferred to property, plant
at cost, net of accumulated case the increase is recognised and equipment. Depreciation
depreciation and/or in the income statement. A on capital work-in-progress
accumulated impairment losses, revaluation deficit is recognised commences when the assets
if any. Such cost includes the in the income statement, except are ready for their intended use.
cost of replacing part of the to the extent that it offsets an
Property, plant and equipment existing surplus on the same An item of property, plant and
when that cost is incurred, if asset recognised in the asset equipment and any significant
the recognition criteria are revaluation reserve. part initially recognised is
met. When significant parts of derecognised upon disposal
property, plant and equipment Accumulated depreciation or when no future economic
are required to be replaced at as at the revaluation date is benefits are expected from its
intervals, the Group recognises eliminated against the gross use or disposal. Any gain or
such parts as individual assets carrying amount of the asset loss arising on derecognition
with specific useful lives and and the net amount is restated of the asset (calculated as the
depreciates them accordingly. to the revalued amount of difference between the net
Likewise, when a major the asset. Upon disposal, any disposal proceeds and the
inspection or maintenance revaluation reserve relating to carrying amount of the asset)
activity is performed, its cost the particular asset being sold is is included in the income
is recognised in the carrying transferred to retained earnings. statement when the asset is
amount of the property, plant derecognised.
and equipment as a replacement Depreciation is calculated by
if the recognition criteria using a straight line method Purchased software that is
are satisfied. All other repair on the cost or valuation of all integral to the functionality
and maintenance costs are property, plant and equipment, of the related equipment is
recognised in the statements other than freehold land, in order capitalized as part of that
of comprehensive income as to write off such amounts over equipment.
incurred. the estimated useful economic
life of such assets. When parts of an item of
Land and buildings are property, plant and equipment
measured at fair value less Depreciation of an asset begins have different useful lives, they
accumulated depreciation when it is available for use, are accounted for as separate
on buildings and impairment i.e. when it is in the location and items (major components) of
charged subsequent to the date condition necessary property, plant and equipment.
of the revaluation. Where land
and buildings are subsequently for it to be capable of operating Gains and losses on disposal
in the manner intended by of an item of property, plant

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

and equipment are determined The annual rates used for this is presented with intangible
by comparing the proceeds purpose which for the current assets. For the measurement of
from disposal with the carrying and comparative periods are as goodwill at initial recognition,
amount of property, plant and follows: refer note 3.1.1
equipment, and are recognized %
net within other income in profit Subsequent measurement
Buildings 2.5
or loss.
Motor Vehicles 20 Goodwill is measured at cost
3.4.2 Subsequent costs less accumulated impairment
Plant, Machinery & Others 10
losses. In respect of equity
The cost of replacing a part of Office Equipment 10 accounted investees, the
an item of property, plant and
carrying amount of goodwill
equipment is recognized in the Depreciation of an asset begins
is included in the carrying
carrying amount of the item when it is available for use
amount of the investment, and
if it is probable that the future whereas depreciation of an
an impairment loss is allocated
economic benefits embodied asset ceases at the earlier of the
to the carrying amount of the
within the part will flow to date that the asset is classified
equity- accounted investee as a
the Group, and its cost can be as held for sale and the date
whole.
measured reliably. The carrying that the asset is derecognized.
amount of the replaced part
3.5.2 Computer Software
is derecognized. The costs of Depreciation methods, useful
the day-to-day servicing of lives and residual values are Acquired computer software
property, plant and equipment reviewed at each reporting date licenses are capitalized on the
are recognized in profit or loss and adjusted if appropriate. basis of the cost incurred to
as incurred. acquire and bring to use the
3.4.4 Reclassification to investment specific software.
3.4.3 Depreciation property
Depreciation is calculated over 3.5.3 Other intangible assets
When the use of a property
the depreciable amount, which changes from owner-occupied Other intangible assets,
is the cost of an asset, or other to investment property, the including trademarks and trade
amount substituted for cost, property is remeasured to license that are acquired by the
less its residual value. fair value and reclassified Group and have finite useful
accordingly. Any gain arising lives are measured at cost less
Depreciation is recognized in on this re-measurement is accumulated amortisation and
profit or loss on a straight- line recognised in profit or loss to any accumulated impairment
basis over the estimated useful the extent that it reverses a losses.
lives of each part of an item of previous impairment loss on
property, plant and equipment, the specific property, with any 3.5.4 Subsequent expenditure
since this most closely reflects remaining gain recognised Subsequent expenditure
the expected pattern of in OCI and presented in the is capitalized only when it
consumption of the future revaluation reserve. Any loss is increases the future economic
economic benefits embodied recognised in profit or loss. benefits embodied in the
in the asset. specific asset to which it
However, to extent that an relates. All other expenditure,
Leased assets are depreciated amount is included in the including expenditure on
over the shorter of the lease revaluation surplus for the internally generated goodwill
term and their useful lives unless property, the loss is recognised and brands, is recognized in
it is reasonably certain that the on OCI and reduces the profit or loss as incurred.
Group will obtain ownership by revaluation surplus with in
the end of the lease term. Land equity 3.5.5 Amortization
is not depreciated.
Except for goodwill, intangible
3.5. Intangible assets and goodwill assets are amortized on a
3.5.1 Goodwill straight line basis in profit or
loss over their estimated useful
Goodwill that arises upon the lives, from the date that they are
acquisition of subsidiaries available for use, since this most

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56 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

closely reflects the expected at fair value with any change Where the Group companies
pattern of consumption of therein recognized in profit or occupy a significant portion of
the future economic benefits loss. the investment property of a
embodied in the asset. subsidiary such as investment
Cost includes expenditure properties, are treated as
The estimated useful lives for that is directly attributable property, plant and equipment
the current and comparative to the acquisition of the in the consolidated Financial
years are as follows: investment property. The cost Statements, Accounted for
of self- constructed investment in accordance with LKAS 16 –
- Software – 5 years. property includes the cost of Property, Plant and Equipment.
materials and direct labor, any
- Trade Mark and Trade
other costs directly attributable 3.9 Inventories
License subject to testing for
to bringing the investment
impairment. The cost of each category of
property to a working condition
inventory of the Company and
Amortization methods, useful for their intended use and
its subsidiaries are determined
lives and residual values are capitalized borrowing costs.
on the following basis.
reviewed at each reporting date
and adjusted if appropriate. Any gain or loss on disposal
of an investment property y Raw Material – At cost
(calculated as the difference determined at the factory
3.6 Premium paid on Leasehold
between the net proceeds on weighted average cost
premises
from disposal and the method.
The premium paid by the
carrying amount of the item) y Finished Goods – At factory
subsidiary for leasehold
is recognized in profit or loss. cost of direct materials,
premises represents prepaid
When an investment property direct labor and appropriate
rental charges which are
that was previously classified as proportion of fixed
amortized over 50 years,
property, plant and equipment production overheads at
commencing from the second
is sold, any related amount normal operating capacity.
year of operation with initial
included in the revaluation y Goods in transit – At the
adoption of SLFRS 16 – Leases,
reserve is transferred to actual cost
the premium paid on Leasehold
retained earnings.
Premises have been transferred y Packing Material – At cost
to Right of Use Assets. determined at the factory
When the use of a property
on weighted average cost
3.7 Biological assets changes such as that it is
method
reclassified as property, plant,
Biological assets are measured y Harvested Crops – Inventory
equipment, its fair value at
at fair value less costs to of harvested crop sold has
the date of reclassification
sell, with any change therein been valued at realized
becomes its cost for subsequent
recognized in profit or loss. price. Unsold harvested
accounting.
Costs to sell include all costs crop have been valued
that would be necessary at estimated realizable
When the use of a property
to sell the assets, including value net of direct selling
changes from owner-occupied
transportation costs. expenses. This basis has
to investment property, the
property is re measured to been adopted to recognize
3.8 Investment property the profit/loss on perennial
fair value and reclassified as
Investment property is properly investment property. Any gain crops in the financial period
held either to earn rental arising on re measurement is of harvesting.
income, for capital appreciation recognized in profit or loss to Net realizable value is
or for both, but not for sale in the extent that it reverses a the estimated selling
the ordinary course of business, previous impairment loss on price in the ordinary
use in the production or supply the specific property, with any course of business, less
of goods or services or for remaining gain recognized in the estimated costs
administrative purposes. other comprehensive income of completion and selling
and presented in the revaluation expenses.
Investment property is
measured at cost on initial reserve in equity. Any loss is
recognition and subsequently recognized immediately in
profit or loss.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

3.10 Impairment there has been a significant flows are discounted to their
increase in the credit risk present value using a pre-tax
3.10.1 Financial assets
since initial recognition. If discount rate that reflects
A financial asset not carried credit risk has not increased current market assessments of
at fair value through profit significantly, 12-month the time value of money and
or loss is assessed at each ECL is used to provide for the risks specific to the asset.
reporting date to determine impairment loss. However, For the purpose of impairment
whether there is objective if credit risk has increased testing, assets that cannot
evidence that it is impaired. significantly, lifetime ECL be tested individually are
A financial asset is impaired if is used. If, in a subsequent grouped together into the
objective evidence indicates period, credit quality of the smallest group of assets
that a loss event has occurred instrument improves such that that generates cash inflows
after the initial recognition of there is no longer a significant from continuing use that are
the asset, and that the loss increase in credit risk since largely independent of the
event had a negative effect initial recognition, then the cash inflows of other assets or
on the estimated future Cash entity reverts to recognising groups of assets.
flows of that asset that can be impairment loss allowance
estimated reliably. based on 12-month ECL. For the purposes of goodwill
impairment testing, goodwill
Objective evidence that acquired in a business
Lifetime ECL are the expected
financial assets (including combination is allocated to
credit losses resulting from all
equity securities) are the Group of CGUs that is
possible default events over
impaired can include default expected to benefit from the
or delinquency by a debtor, the expected life of a financial
instrument. The 12-month ECL synergies of the combination.
restructuring of an amount
due to the Group on terms is a portion of the lifetime ECL
This allocation is subject
that the Group would which results from default
to an operating segment
not consider otherwise, events that are possible within
ceiling test and reflects the
indications that a debtor or 12 months after the reporting
lowest level at which that
issuer will enter bankruptcy, date.
goodwill is monitored for
or the disappearance of an internal reporting purposes.
active market for a security. In 3.10.2. Non-financial assets
The Group’s corporate assets
addition, for an investment in The carrying amounts of do not generate separate
an equity security, a significant the Group’s non-financial cash inflows. If there is an
or prolonged decline in its fair assets, other than biological indication that a corporate
value below its cost is objective assets, investment property, asset may be impaired, then
evidence of impairment. inventories and deferred tax the recoverable amount is
assets, are reviewed at each determined for the CGU to
The Group follows ‘simplified
reporting date to determine which the corporate asset
approach’ for recognition of
whether there is any indication belongs.
impairment loss allowance on
of impairment. If any such
Trade Receivables.
indication exists, then the An impairment loss is
asset’s recoverable amount recognized if the carrying
The application of simplified
is estimated. For goodwill, amount of an asset or its
approach does not require
and intangible assets that CGU exceeds its estimated
the Group to track changes
have indefinite useful lives or recoverable amount.
in credit risk. Rather, it
that are not yet available for Impairment losses are
recognises impairment loss
use, the recoverable amount recognized in profit or loss.
allowance based on lifetime
is estimated each year at the Impairment losses recognized
expected credit losses (ECLs)
same time. The recoverable in respect of CGUs are
at each reporting date, right
amount of an asset or cash- allocated first to reduce
from its initial recognition.
generating unit is the greater the carrying amount of any
of its value in use and its goodwill allocated to the
For recognition of impairment
fair value less costs to sell. units, and then to reduce the
loss on other financial assets
In assessing value in use, carrying amounts of the other
and risk exposure, the Group
the estimated future cash assets in the unit (group of
determines that whether

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58 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

units) on a pro rata basis. An Provident Fund and Employees’ The present value of
impairment loss in respect Trust Fund respectively. defined benefit obligation is
of goodwill is not reversed. determined by discounting the
In respect of other assets, 3.11.2 Defined benefit plan- Gratuity estimated future cash flows
impairment losses recognized using the interest rates of high
A defined benefit plan is a
in prior periods are assessed quality corporate bonds that
post employment benefit
at each reporting date for are denominated in currency
plan other than a defined
any indications that the loss in which the benefits will be
contribution plan. The Group’s
has decreased or no longer paid, and that have terms to
net obligation in respect
exists. An impairment loss is maturity approximating to the
of defined benefit plans is
reversed if there has been a terms of the related retirement
calculated separately by
change in the estimates used obligations.
estimating the amount of
to determine the recoverable
future benefit that employees
amount. An impairment loss The key assumptions used in
have earned in return for their
is reversed only to the extent the computation are stated in
service in the current and
that the asset’s carrying the Note 32 to the Financial
prior periods; that benefit is
amount does not exceed the Statements.
discounted to determine its
carrying amount that would
present value. The retirement
have been determined, net of However, according to the
benefit plan adopted is as
depreciation or amortization, Payment of Gratuity Act No.12
required under the Payment of
if no impairment loss had of 1983, the liability for gratuity
Gratuity Act No.12 of 1983.
been recognized. payment to an employee arises
Provision for gratuity on the only after the completion of
3.11 Employee benefits employees of the Company and five years continued service
Group are based on actuarial with the Company.
3.11.1. Defined contribution plan
EPF and ETF valuation as recommended by
Sri Lanka Accounting Standard This liability is not externally
A defined contribution plan No. 19 ‘Employee Benefits’ funded nor actuarially valued.
is a post-employment benefit (LKAS – 19). The actuarial The item is grouped under
plan under which an entity valuation was carried out by non-current liabilities in the
pays fixed contributions into professionally qualified firm of Statement of Financial Position.
a separate entity and will actuaries, as at 31 March 2022.
have no legal or constructive The valuation method used by 3.11.3 Short-term Employee
obligation to pay further the actuary is ‘Projected Unit Benefits
amounts. Obligations for Credit Method’. Short-term employee benefit
contributions to defined
obligations are measured on
contribution pension plans are The Group recognizes any an undiscounted basis and
recognized as an employee actuarial gains & losses are expensed as the related
benefit expense in profit or arising from defined benefit service is provided. A liability
loss in the periods during plan immediately in other is recognized for the amount
which services are rendered comprehensive income. expected to be paid under
by employees.
short-term cash bonus if the
When the benefits of a plan company has a present, legal
All employees who are eligible
are changed or when a plan is or constructive obligation to
for Employees Provident Fund
curtailed the resulting change pay this amount as a result of
contribution and Employees
in benefits that relates to past service provided by the
Trust Fund contribution
Past service or gain or loss employee, and the obligation
are covered by relevant
an curtailment is recognized can be estimated reliably.
contribution funds in line
immediately in Profit or loss.
with respective statutes and
The Company recognizes gain 3.12 Bills Payable
regulations.
or loses on the settlement
of a defined plan when the The Group account for
The Company contributes 12% the liability on receipt of
settlement occurs.
and 3% of gross emoluments documents for clearance.
of employees to Employees’

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3.13 Grants between two or more parties 3.1.6 As a Lessee

that create enforceable rights
Grants received in relation to At commencement or on
and obligations and sets out the
assets are deducted from the modification of a contract that
criteria for each of those rights
cost of the assets. Thus this contains a lease component, the
and obligations.
grant is recognized as income Group allocate the consideration
over the useful life of the Step 2: Identify the performance in the contract to each lease
depreciable assets by way of obligations in the contract: component on the basis of its
a reduced deprecation charge. A performance obligation in a relative stand- alone prices.
Export rebates received as contract is a promise to transfer a However, for the lease of
rewards are recognized as good or service to the customer property the Group has elected
income to profit or loss. that is distinct. not to separate non- lease
components and account for the
3.14 Provisions Step3: Determine the transaction lease and non-lease components
price: Transaction price is the as a single lease component.
A provision is recognized if
amount of consideration to which
as a result of a past event the
the entity expects to be entitled The Group recognized a right
Group has a present legal or
to in exchange for transferring of use asset and a lease liability
constructive obligation that
the promised goods and services at the lease commencement
can be estimated reliably
to a customer, excluding amounts date. The right of use assets is
and it is probable that an
collected from third parties. initially measured at cost which
outflow of economic benefit
comprises the initial amount of
will be required to settle the
Step 4: Allocate the transaction the lease liability adjusted for
obligation.
price to the performance any lease payments made at
obligations in the contract: For or before the commencement
Provisions are determined
a contract that has more than date, plus any initial direct cost
by discounting the expected
one performance obligation, the incurred and an estimates of
future cash flows at a pre-
entity will allocate the transaction costs to dismantle and remove
tax rate that reflects current
price to each performance the underlying asset or to restore
market assessments of the
obligation in an amount that the underlying asset or the site
time value of money and the
depicts the consideration to on which it is located, less any
risks specific to the liability.
which the entity expects to be lease incentive received
The unwinding of the discount
entitled in exchange for satisfying
is recognized as finance cost.
each performance obligation. The right of use asset is
subsequently depreciated using
3.15 Revenue Step 5: Recognise revenue when straight-line method from the
3.15.1 Revenue Recognition (or as) the entity satisfies a commencement date to the
performance obligation end of the lease term, unless
SLFRS 15 “Revenue
from Contracts with the lease transfers ownership
a) Dividend income
Customers” outlines a single of the underlying asset to the
Dividend income is Group by the end of lease term
comprehensive model of
recognized when the or the cost of the right of use
accounting for revenue
groups right to receive the asset reflects that the Group will
arising from contracts with
dividend is established. exercise a purchase option. In
customers and supersedes
current revenue recognition that case the right of use asset
b) Provision of Accounting will be depreciated over the
guidance found across several
Services useful life of the underlying asset,
Standards and Interpretations
within SLFRS. It establishes a Revenue from accounting which is determined on the
new five-step model that will services rendered is same basis as those of property
apply to revenue arising from recognized in profit or and equipment. In addition, the
contracts with customers. loss in proportion to the right if use asset is periodically
stage of completion of the reduced by impairment losses,
Step 1: Identify the contract(s) transaction at the reporting if any, and adjusted for certain
with a customer: A contract date. re-measurements of the lease
is defined as an agreement liability.

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60 Annual Report 2021/22
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The Lease liability is initially measured termination option or if there is a 3.17.1 Borrowing Cost
at the present values of the lease revised in-substance fixed lease
Borrowing costs are interest
payments that are not paid at the payments.
and other costs that an entity
commencement date, discounted
incurs in connection with the
using the interest rate implicit in the When the lease liability is
borrowing of funds.
lease or, if that rate cannot be readily remeasured in this way, a
determined, the Group’s incremental corresponding adjustment is
Borrowing costs may include:
borrowing rate. Generally, the Group made to the carrying amount
uses its incremental borrowing rate as of the right of use asset or is (a) Interest expense calculated
the discount rate. recorded is profit or loss if the using the effective interest
carrying amount of the right of method.
The Group determines its incremental use asset has been reduced to
borrowing rate by obtaining interest zero. (b) Finance charges in respect
rates from various external financing of finance leases recognised
sources and makes certain adjustments The Group presents right of use in accordance with LKAS 17
to reflect the terms of the lease and assets that do not meet the Leases; and
type of the assets leased. definition of investment property
in ‘Right-of-Use-Assets’ in lease (c) Exchange differences arising
Lease payments included in the liabilities in the statement of from foreign currency
measurement of the lease liability financial position. borrowings to the extent
comprise the following: that they are regarded as an
Short term leases and leases of adjustment to interest costs.
- fixed payments, including in- low-value assets
substance fixed payments; Group capitalizes borrowing
The Group has elected not to
costs that are directly
recognize right of use assets
- Variable lease payments that attributable to the acquisition,
and lease liabilities of leases of
depend on a n index or a rate, construction or production of
low-value assets and short-term
initially measured using the index a qualifying asset as part of the
leases. The Group recognize the
or rate as at commencement date; cost of that as- set. Then Group
lease payments associated with
recognizes other borrowing
these leases as an expense on a
- amounts expected to be payable costs as an expense in the period
straight-line basis over the lease
under residual value guaranteed; in which it incurs them.
term.
and
3.18 Income tax
3.17. Finance income and finance
- the exercise price under a purchase costs Income tax expense comprises
option that the Group is reasonably current and Deferred Tax. It
certain to exercise, lease payments Finance income and finance
is recognized in profit or loss
in an optional renewal period if Costs Finance income comprises
except to the extend that it
the Group is reasonably certain interest income on funds
relates to a business combination
to exercise and extension option, invested. Interest income is
or items recognized directly in
and penalties for early termination recognized as it accrues in
equity or OCI.
of a lease unless the Group is profit or loss, using the effective
reasonably certain not to terminate interest method. Finance costs
The Group has determined that
early. comprise interest expense on
interest and Penalties related
borrowings, bank loans and
to income taxes, including
The lease liability is measured at leases.
uncertain tax treatments, do not
amortized cost using effective interest meet the definition of contingent
method. It is remeasured when Borrowing costs that are not
Liabilities and contingent Assets.
there is a change in future lease directly attributable to the
payments arising from a change in an acquisition, construction or
Current tax
index or ratee, if there is a change in production of a qualifying asset
the Group’s estimate of the amount are recognized in profit or loss Current income tax assets and
expected to be payable under a using the effective interest liabilities for the current and
residual value guarantee, if the Group method. Foreign currency gains prior period are measured at
changes its assessment of whether it and losses are reported on a net the amount expected to be
will exercise a purchase, extension or basis.

RENUKA FOODS PLC

Annual Report 2021/22
61
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

recovered from or paid to the divisions. The strategic divisions 3.21 Earnings per share
taxation authorities. The tax offer different products and
The Group presents basic and
rates and the tax laws used to services and are managed
diluted earnings per share (EPS)
compute the amount are those separately because they require
data for its ordinary shares. Basic
that are enacted or substantively different technology and
EPS is calculated by dividing
enacted by the Reporting Date. marketing strategies. For each
the profit or loss attributable
of the strategic divisions, the
to ordinary shareholders of
The provision for income tax group’s CEO (the chief operating
the Company by the weighted
is based on the elements of decision maker) reviews internal
average number of ordinary
the income and expenditure management reports on at least
shares outstanding during the
as reported in the financial a quarterly basis. The Group’s
period, adjusted for own shares
statements and computed in reportable segments are as
held. Diluted EPS is determined
accordance with the provision follows;
by adjusting the profit or
of the Inland Revenue Act No. loss attributable to ordinary
24 of 2017 and its subsequent y Agri Foods
shareholders and the weighted
amendments thereto. y Consumer Brands average number of ordinary
shares outstanding, adjusted
Deferred tax 3.20 Discontinued operation for own shares held, for the
Deferred tax is provided using A discontinued operation is effects of all dilutive potential
the balance sheet liability a component of the Group’s ordinary shares, which comprise
method, providing for the tax business, the operations and convertible notes and share
effect of temporary differences cash flows of which can be options granted to employees.
between the carrying amounts of clearly distinguished from the
assets and liabilities for financial rest of the Group and which: 4. DETERMINATION OF FAIR VALUES
reporting purposes and the tax A number of the Group’s
base of assets and liabilities, - represents a separate
accounting policies and
which is the amount attributed major line of business
disclosures require the
to those assets and liabilities or geographic area of
determination of fair value, for
for tax purposes. The amount of operations;
both financial and non- financial
de-ferred tax provided is based assets and liabilities. Fair values
on the expected manner of - is part of a single have been determined for
realization or settlement of the coordinated plan to dispose measurement and/or disclosure
carrying amount of assets and of a separate major line of purposes based on the following
liabilities, using tax rates enacted business or geographic area methods.
by the reporting date. of operations; or
- is a subsidiary acquired When applicable, further infor-
Deferred tax assets including mation about the assumptions
those related to temporary tax exclusively with a view to
resale. made in determining fair values
effects of income tax losses and isdisclosed in the notes specific-
credits available to be carried to that asset or liability.
forward, are recognized only Classification as a discontinued
to the extent that it is probable operation occurs at the earlier of
disposal or when the operation The fair value of immature timber
that future taxable profits will plantations is based on the
be available against which the meets the criteria to be classified
as held-for-sale. present value of the net cash
asset can be utilized. Deferred flows expected to be generated
tax assets are reviewed at each by the plantation at maturity.
reporting date and are reduced When an operation is classified
to the extent that it is no longer as a discontinued operation, the
comparative statement of profit 4.2 Investment property
probable that the related tax
benefit will be realized. or loss and OCI is re-presented An external, independent valu-
as if the operation had been ation company, having appro-
3.19 Segment Reporting discontinued from the start of priate recognized professional
the comparative year. qualifications and recent expe-
The Group has two reportable rience in the location and cat-
segments, as described below egory of property being valued,
which are the Group’s strategic values the Group’s investment

RENUKA FOODS PLC

62 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

property portfolio once a year. 4.3 Inventories The Group has not early adopted
The fair values are based on new Standards in preparing
The fair value of inventories these Financial Statements.
market values, being the esti-
acquired in a business
mated amount for which a prop-
erty could be exchanged on the
combination is determined - SLFRS 17 – Insurance
based on the estimated selling contracts
date of the valuation between
price in the ordinary course
a willing buyer and a willing - Amendments to SLFRS
of business less the estimated
seller in transaction after proper 16 – COVID – 19 related rent
costs of completion and sale,
marketing where- in the parties concessions beyond June
and a reasonable profit margin
had each acted knowledgeably 2021
based on the effort required to
and willingly.
complete and sell the inventories. - Onerous Contracts – Costs
In the absence of current of fulfilling a contract –
4.4 Equity and debt securities amendments to LKAS 37
prices in an active market, the
valuations are prepared by The fair value of equity and debt - Amendments to references
considering the aggregate of the securities is determined by to the conceptual
estimated cash flows expected reference to their quoted closing framework in SLFRS
to be received from renting out bid price at the reporting date, standards
the property. A yield that reflects or if unquoted, determined using
the specific risks inherent a valuation technique. Valuation - Property, plant and
in the net cash flows then is techniques employed include equipment: Proceeds
applied to the net annual cash market multiples and discounted before intended Use –
flows to arrive at the property cash flow analysis using expected amendments to LKAS 16
valuation. Valuations reflect, future cash flows and a market-
when appropriate, the type of
- Amendments to LKAS 1:
related discount rate.
Classification of liabilities as
tenants actually in occupation
current or non-current
or responsible for meeting lease 5. ACCOUNTING STANDARDS
commitments or likely to be in ISSUED BUT NOT EFFECTIVE AS - Deferred Tax related to
occupation after letting vacant AT REPORTING DATE Assets and Liabilities arising
accommodation, the allocation from a single transaction
of maintenance and insurance The Institute of Chartered
(Amendments to LKAS 12)
responsibilities between the Accountants of Sri Lanka has
Group and the lessee, and the issued the following new Sri - Annual Improvements to
remaining economic life of the Lanka Accounting Standard SLFRS standards (2018-
property. When rent reviews which will become applicable for 2020)
or lease renewals are pending financial periods beginning on or
with anticipated reversionary after 1 April 2022. - Disclosure of Accounting
increases, it is assumed that all Policies (Amendments to
notices, and when appropriate Accordingly, these standards LKAS 1)
counter-notices, have been have not been applied in
served validly and within the preparing these consolidated - Definition of Accounting
appropriate time. Financial Statements. Estimates (Amendments to
LKAS 8)

RENUKA FOODS PLC

Annual Report 2021/22
63
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

GROUP COMPANY
FOR THE YEAR ENDED 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.

6. Revenue
Export Sales 5,067,610,465 4,301,462,192 – –
Local Sales 5,620,523,000 4,364,233,135 – –

Dividend Income 232,956 – 12,000,000

77,207,792
Rental Income 6,938,743 1,743,569 – –
10,695,305,164 8,667,438,896 12,000,000 77,207,792

7. Gain on disposal of Investment 104,151,964 – 117,783,925 –

104,151,964 – 117,783,925 –

8. Other Income
Profit on disposal of Propety, Plant & Equipment – 11,309,916 – –
Rental Income 26,265,466 29,738,054 – –
Change in fair value of Biological Assets (722,302) 4,689,040 – –
Written back of Interest payable on loan – 43,400 – –
Sundry Income 22,078,948 16,034,797 – –
47,622,112 61,815,207 – –

9. Other Expenses
Impairment on Propert plant and equitment – 45,000,000 – –
Loss disposal / partly disposal of Equity
– 301,309,311 – –
accounted investees (Note 22.5)
– 346,309,311 – –

10. Finance Income

Interest Income 5,554,441 7,334,027 256,349 34,801
Exchange Gain 587,148,998 92,940,058 – –
592,703,439 100,274,085 256,349 34,801

11. Finance Costs

Interest on Bank Overdrafts 2,655,787 4,614,969 – 11,302
Interest on Borrowings 174,390,925 112,112,893 – 150,682
Interest on leases liability 9,071,007 9,605,047 – –
Exchange Losses 341,164,163 104,077,246 – –
Others 194,912 304,676 – –
Intercompany Interest – – 5,628,933 –
527,476,794 230,714,831 5,628,933 161,984
Net Finance Costs 65,226,645 (130,440,746) (5,372,584) (127,183)

RENUKA FOODS PLC

64 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

GROUP COMPANY
FOR THE YEAR ENDED 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
12. Profit/(Loss) Before Taxation
Profit before Taxation is stated after charging all expenses including the followings;

Directors Remuneration and Fees 64,230,110 79,910,680 240,00 160,000

Auditors' Remuneration
Audit Services 4,250,575 3,741,392 695,400 340,000
Non Audit services 795,186 875,196 346,556 270,000
Provision / (Reversal) on Obsolete Stocks (4,568,351) 21,827,627 –
Depreciation 316,366,172 297,796,077 – –
Amortisation of right of use assets 17,206,756 16,276,878 – –
Amortization of Intangible Assets 3,726,208 3,657,742 –
Personnel Cost ( Note 12.1) 1,000,608,285 734,439,890 –

12.1 Personnel Cost

Salaries, Wages and Other related costs 828,344,082 651,499,918 – –
Defined Benefit Plan Cost- Retirement Gratuity 18,528,053 26,123,255 – –
Defined Contribution Plan Cost – EPF & ETF 153,736,150 56,816,717 – –
1,000,608,285 734,439,890 – –

13. Taxation
Income Tax charged for the year 96,461,254 45,210,239 16,899,144 9,885,059
Capital Gain Tax on Disposal of Investment. 65,000 – – –
Under/Over provision in respect of previous years (2,886,768) 23,447,985 – (1,359,818)
Origination and Reversal of Temporary Differences 43,241,774 (58,506,609) – –
136,881,260 10,151,615 16,899,144 8,525,241

13.1 Current Tax

13.1.1 Company
Income tax has been computed in accordance with the provisions of the Inland Revenue Act No. 24 of 2017 and
amendments thereto.

According to Third Schedule –(Exempt Amounts) item (h) of the Income Tax Act No. 24 of 2017, profit earned
on sale of shares on which share transaction levy under Section 7 of the Finance Act No.05 of 2005, is paid,
exempt from income tax. Interest and other Income are liable to Income Tax at 24% (2021- 24%).

13.2 Subsidiary companies enjoying tax holidays at concessionary rates of tax

13.2.1 Renuka Agri Foods PLC
In terms of the agreement with the Board of investment of Sri Lanka (BOI), business profit of the Company is
exempted from income tax for a period of 12 years from the date of commencement of its business, which
came to an end in the year of assessment 2011/12. Subsequently the said exemption period was extended for
another two years of assessments ending 2014/15 by a supplemantay agreement. After the expiration of said
tax exemption period, the Company will be liable for taxation at rate of 12%.

Dividend paid by Company out of exempt profits during the 12 year tax holiday period or within one year
thereafter is exempted from tax. Other Income is liable for income tax at the rate of 24%.

RENUKA FOODS PLC

Annual Report 2021/22
65
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

13.2.2 Renuka Developments (Private) Limited

According to the agreements entered into with Board of Investment of Sri Lanka, the profit and income of the
Company were exempted from income tax for a period of five (5) years. This tax holiday period expired on
31st March 1999.

From the year of assessments 2006/2007, under section 16 of the Inland Revenue Act No. 10 of 2006, the
Company’s profit was exempted from income tax for a period of five years. This tax holiday period expired
on 31st March 2011. The Company is liable to income tax at 12% on profit from agriculture from the year of
assessment 2011/2012.

The Company is liable to income tax at the rate of 24% (2021 – 24%).

13.2.3 Renuka Agri Organics Limited

The enterprise shall be entitled for a tax exemption period of 4 years in terms of the Inland Revenue Act
No.10 of 2006 as amended by the Inland Revenue (amendment) Act No. 8 of 2012 (Section 16C). The year of
assessment shall be reckoned from the year in which the enterprise commences to make profits or any year
of assessment not later than 2 years reckoned from the date of commencement of commercial operations,
whichever comes first as Mdetermined by the commissioner General of Inland Revenue.

This tax exemption period ended by year of assessment 2017/2018.

According to the recent amendments (notice No. PM/IT/2020–03 (Revised) dated 8 April 2020) to the Inland
Revenue Act, No 24 of 2017 Profit from Export business income, Local Business income and other income liable
for income tax at the rate of 14%, 18% & 24% respectively.

13.2.4 Renuka Teas Ceylon (Private) Limited

According to the recent amendments (notice No. PM/IT/2020–03 (Revised) date 8 April 2020) to the Inland
Revenue Act, No 24 of 2017 Profit from Export business income, Local Business income and other income liable
for income tax at the rate of 14%, 18% & 24% respectively.

13.2.5 Shaw Wallace Ceylon Limited

The Company is liable to income tax at the rate of 24% (2021 – 24%).

13.2.6 Ceylon Botanicals (Private) Limited

The Company is liable to income tax at the rate of 24% (2021 – 24%).

13.2.7 Ceylon Forestry (Private) Limited

In accordance with the provisions of section 17 of the Board of Investment of Sri Lanka law No. 4 of 1978, the
Company is entitled to the following exemptions/benefits with regard to income tax;

(i) For a period of eight (08) years reckoned from the year of assessment as may be determined by the
BOI, the profits and income of the Company is exempted from tax. For the above purpose, the year
of assessment shall be reckoned from the year in which the Company commences to make profits or
any year of assessment not later than two (02) years reckoned from the date of commencement of
commercial operations whichever year is earlier, as specified in a certificate issued by the BOI, Sri lanka.

(ii) After the expiration of the aforesaid tax exemption period, referred to in sub clause (i) above, the profits
and income of the Company shall for each year of assessment be charged at the rate of ten per centum
(10%) for a period of two (2) years (“concessionary period”) immediately succeeding the last date of the
tax exemption period during which the profits and income of the Company is exempted from it.

(iii) After the expiration of the aforesaid concessionary period referred to in sub clause (ii) above, the profits
and income of the Company shall be charged for any year of assessment at the rate of 20%.

RENUKA FOODS PLC

66 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

The Departments of Inland Revenue has issued a notice No. PM/IT/2020–03 (Revised) dated 8 April 2020,
proposing to amend the existing Inland Revenue Act, No 24 of 2017 effective from 1 January 2020. Proposed
notice also provides concessionary tax rate and income tax exemptions to agro-processing & manufacturing
and agro-farming respectively.

However, other income would be liable to Income Tax at the rate of 24% for the year.

13.2.8 Kandy Plantations Limited

According to the agreement with the BOI of Sri Lanka, the Profits and Income of Kandy Plantations Ltd were
exempt for a period of 5 years from the year of assessment in which the enterprise commence to make profit
(i.e. 2003/2004). Accordingly, the said tax holiday period was expired on 31st March 2008.

However, the profit from agriculture of the Company continued to be exempted from income tax for further
3 year of assessments ending 2010/2011, under section 16 of the Inland Revenue Act No. 10 of 2006. This tax
holiday was expired on 31st March 2011.

The Departments of Inland Revenue has issued a notice No. PM/IT/2020–03 (Revised) dated 8 April 2020,
proposing to amend the existing Inland Revenue Act, No 24 of 2017 effective from 1 January 2020. Proposed
notice also provides concessionary tax rate and income tax exemptions to agro-processing & manufacturing
and agro-farming respectively.

However, other income would be liable to Income Tax at the rate of 24% for the year.

13.2.9 Coco Lanka (Private) Limited

The Departments of Inland Revenue has issued a notice No. PM/IT/2020–03 (Revised) dated 8 April 2020,
proposing to amend the existing Inland Revenue Act, No 24 of 2017 effective from 1 January 2020. Proposed
notice also provides concessionary tax rate and income tax exemptions to agro-processing & manufacturing
and agro-farming respectively.

However, other income would be liable to Income Tax at the rate of 24% for the year.

13.2.10 Richlife Dairies Ltd

The Company is liable to income tax at 18% (2021 – 14%).

13.2.11 Bois Bros & Co. (Pvt) Ltd

The Company is liable to income tax at 24% (2021 – 24%).

13.2.12 Shaw Wallace Properties (Pvt) Ltd

In terms of an agreement entered into with the Board of Investment of Sri Lanka, under section 17 of the Board
of Investment of Sri Lanka (BOI) Law No. 04 of 1978, the Company is exempted from income tax for a period
of five years commencing 01 April 2009. After the expiration of the said tax exemption period the profits and
income of the Company shall be charged at the rate of 10% for a period of two years immediately succeeding
the last date of the tax exemption period. After the expiration of the aforesaid concessionary tax rate of 10%,
the profits and income of the Company shall for any year of assessment be charged at the rate of 20% under
transitional provisions to the new Inland Revenue Act No. 24 of 2017

RENUKA FOODS PLC

Annual Report 2021/22
67
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

GROUP COMPANY
FOR THE YEAR ENDED 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
13.3 Reconciliation between Taxable Profit and the
Accounting Profits
Profit /(Loss) Before Tax 870,153,405 (374,705,876) 117,207,201 70,607,561
Other Consolidation Adjustments 93,832,453 285,076,489 –
Profit /(Loss) Before Income Tax Before
963,985,858 (89,629,387) 117,207,201 70,607,561
Adjustments
Aggregate Disallowable Expenses 491,914,478 479,948,235 709,899 –
Aggregate Allowable Expenses (567,302,404) (393,524,933) – –
Aggregate Other income (11,082,413) (11,646,705) – –
Exempt Income (54,359,590) (16,865,967) (42,504,000) –
Adjusted Business Profit/(Loss) 823,155,929 (31,718,757) 75,413,100 –
Taxable Aggregate Other Income 10,850,915 14,457,808 – –
Total Statutory Income 834,006,844 (17,260,949) 75,413,100 70,607,561
Brought Forward Loss Claimed during the Year (233,382,488) (7,294,150) – –
Tax losses incurred during the year – 194,694,613 – –
Taxable Income / (Loss) 600,624,356 170,139,514 75,413,100 70,607,561
Income Tax at 24% 16,353,294 13,091,100 15,219,144 –
Income Tax at 18% 25,019,872 13,150,719 – –
Income Tax at 14% 55,088,088 5,954,720 1,680,000 9,885,059
ESC Write off – 13,013,700 – –
Income Tax on Current year Profits 96,461,254 45,210,239 16,899,144 9,885,059

13.4 Tax Losses

Tax Losses Brought Forward 696,539,217 509,138,754 – –
Adjustment for the Tax Loss 993,047 – – –
Tax Losses incurred/(reversal) during the year – 194,694,613 – –
Tax Losses Utilised (233,382,488) (7,294,150) – –
Tax Losses Carried Forward 464,149,776 696,539,217 – –

RENUKA FOODS PLC

68 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

14. BASIC EARNINGS/(LOSS) PER SHARE

14.1 The Computation of Basic of Earnings/(Loss) per Share is based on the profit/(Loss) for the year attributable
to ordinary shareholders for the year divided by the weighted average number of shares outstanding during
the year and calculated as follows.
GROUP COMPANY

FOR THE YEAR ENDED 31ST MARCH 2022 2021 2022 2021

Profit attributable to the Ordinary Shareholders

554,351,186 (184,603,247) 100,308,057 62,082,320
(Rs.)
Weighted Average Number of Ordinary Shares
122,733,452 122,733,452 122,733,452 122,733,452
as at year end
Earnings Per Share (Rs.) 4.52 (1.50) 0.82 0.51

14.2 Basic earnings/(Loss) per share

Diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary
shareholders by the number of ordinary shares outstanding during the year after adjustment for the effects of
all dilutive potential ordinary shares.
As at 31 March 2022 & as at 31 March 2021 there were no dilutive potential ordinary shares. Hence, diluted
earnings per share is same as basic earnings per share.

14.3 Dividend Per Share

The dividend per share is based on the dividend paid during the year and the number of ordinary shares
outstanding as at that date.
GROUP COMPANY

FOR THE YEAR ENDED 31ST MARCH 2022 2021 2022 2021

Dividend paid during the year – 42,956,708 – 42,956,708

Number of Ordinary Shares as at distribution 122,733,452 122,733,452 122,733,452 122,733,452

Dividend per Share (Rs.) – 0.35 – 0.35

RENUKA FOODS PLC

Annual Report 2021/22
69
 70
15. PROPERTY, PLANT AND EQUIPMENT

15.1 Group

AS AT 31ST MARCH 2021

Freehold Leasehold Land Buildings Plant & Electrical Furniture Motor Land Capital
Land Machinery Installation Fittings & Vehicles Development Work In TOTAL
Equipment Cost Progress
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Cost/ Valuation
As at 01st of April 2020 1,097,927,705 183,483,421 1,771,229,227 2,320,709,242 154,363,494 484,485,197 138,909,806 15,883,564 34,724,224 6,201,715,880
Adjustments – – (87,002,585) – – 101 (2,598,113) – – (89,600,597)

Annual Report 2021/22

Adjusted balance As at 01 of April 2020 1,097,927,705 183,483,421 1,684,226,642 2,320,709,242 154,363,494 484,485,298 136,311,693 15,883,564 34,724,224 6,112,115,283

RENUKA FOODS PLC

Additions – – 28,810,187 140,358,591 19,001,383 62,552,739 – – 17,301,675 268,024,575
Impairment – – (45,000,000) – – – – – (45,000,000)
Disposals / Transfers – – – (23,886,305) – (1,018,578) (17,758,834) – (16,105,677) (58,769,394)
As at 31 March 2021 1,097,927,705 183,483,421 1,668,036,829 2,437,181,528 173,364,877 546,019,459 118,552,859 15,883,564 35,920,222 6,276,370,464

As at 01 of April 2021
Adjustments
Adjusted balance As at 01 of April 2021 1,097,927,705 183,483,421 1,668,036,829 2,437,181,528 173,364,877 546,019,459 118,552,859 15,883,564 35,920,222 6,276,370,464
Additions – – 292,791,716 236,092,900 31,918,441 109,771,929 646,500 – 19,469,505 690,690,991
Revaluation 17,100,000 – – – – – – – – 17,100,000
Disposal of subsidiary (115,000,000) – – (42,481,043) – (9,615,386) (16,098,913) – – (183,195,342)
Disposals / Transfers (4,698,806) – – – – – – – (20,592,319) (25,291,125)
As at 31 March 2022 995,328,899 183,483,421 1,960,828,545 2,630,793,385 205,283,318 646,176,002 103,100,446 15,883,564 34,797,408 6,775,674,988

Accumulated Depreciation
As at 01 of April 2020 – 4,758,541 89,198,033 1,056,537,010 29,738,667 348,166,939 127,710,156 3,775,714 – 1,659,885,060
Reclassification – – (87,002,585) – – 6,788,793 (9,386,810) – – (89,600,602)
As at 1st April 2020 – 4,758,541 2,195,448 1,056,537,010 29,738,667 354,955,732 118,323,346 3,775,714 – 1,570,284,458
Charge for the year – – 45,353,801 180,761,138 14,939,905 45,322,727 10,175,673 1,242,833 – 297,796,077
Disposals / Transfers – – – (9,690,990) – (1,018,578) (17,758,835) – – (28,468,403)
As at 31 March 2021 – 4,758,541 47,549,249 1,227,607,158 44,678,572 399,259,881 110,740,184 5,018,547 – 1,839,612,132

As at 01 of April 2021
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

Adjustments
As at 1st April 2021 – 4,758,541 47,549,249 1,227,607,158 44,678,572 399,259,881 110,740,184 5,018,547 – 1,839,612,132
Charge for the year – – 49,582,035 201,353,024 16,521,266 44,059,206 4,822,457 28,184 – 316,366,172
Disposal of subsidiary – – – (30,195,076) – (6,443,990) (16,098,913) – – (52,737,979)
As at 31 March 2022 – 4,758,541 97,131,284 1,398,765,106 61,199,838 436,875,097 99,463,728 5,046,731 – 2,103,240,325

Carrying Amount
As at 31 March 2022 995,328,899 178,724,880 1,863,697,261 1,232,028,279 144,083,480 209,300,905 3,636,718 10,836,833 34,797,408 4,672,434,663

As at 31 March 2021 1,097,927,705 178,724,880 1,620,487,580 1,209,574,370 128,686,305 146,759,578 7,812,675 10,865,017 35,920,222 4,436,758,332
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

15.1.1 Based on the assessment carried out internally, by the Board Of Directors no provision was required for the potential
impairment of fixed assets as at 31 March 2022.

15.1.2 Property, Plant and Equipment include fully depreciated assets having a gross amount of Rs. 692,838,362 as at 31
March 2022. (Rs. 547,180,813 as at 31 March 2021)

15.1.3 There were no restrictions on the title of the Property, Plant and Equipment as at 31 March 2022 other than disclosed
in Note 30.

15.1.4 There were no items of Property, Plant and Equipment pledged as security as at 31 March 2022 other than disclosed
in Note 30.

15.1.5 There were no temporary idle items of Property, Plant and Equipment as at 31 March 2022.

15.1.6 The capital work in progress represents project in progress.

15.1.7 During the year under review, the Group has not capitalized any borrowing cost.

15.1.8 During the financial year, the Group has acquired property, plant & equipment to the aggregate value of
Rs. 690,690,991 (2021 – Rs. 268,024,575) cash payments amounting to Rs. 690,690,991 (2021 – Rs. 268,024,575) were
made during the year for purchase of property, plant & equipment.

15.1.9 The carried amount of the revalued assets that would have been included in the Financial Statements had the
assets being carried at cost are as follows.

Group As at 31.03.2022
Accumulated
Cost Carrying Amount
Depreciation
Rs. Rs. Rs.
Land 308,504,874 – 308,504,874
Building 1,368,913,081 234,098,986 1,134,814,095

15.2 Company
Motor TOTAL TOTAL
AS AT 31ST MARCH 2022
Vehicles 2022 2021
Rs. Rs. Rs.
Cost
As at 01 April 2021 2,598,113 - 2,598,113
As at 31 March 2022 2,598,113 - 2,598,113

Accumulated Depreciation
As at 01 April 2021 2,598,113 - 2,598,113
As at 31 March 2022 2,598,113 - 2,598,113

Carrying Value
As at 31 March 2022 - - -
As at 31 March 2021 - - -

15.2.1 Property, Plant and equipment of the Company include fully depreciated asset having a gross amount of Rs.
2,598,113 as at 31 March 2022. (Rs. 2,598,113 as at 31 March 2021)

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15.3 Revaluation of Land & Building – Method of Valuation

"The Land and buildings of the companies were revalued as at 31st March 2020. The results of such revaluations
were incorporated in these financial statements from its effective date, which is 31st March 2020. Fair value of the
Land & Building was ascertained by an independent valuation carried out by Mr.A.A.M.Fathihu-FIV (Sri Lanka) as at
31st March 2020. Valuation was carried out in reference to Sri Lanka Accounting Standard LKAS 16 Property, Plant
& Equipment together with SLFRS 13 – Fair Value Measurement. All revaluations are based on market values and
based on the aforesaid valuations. The Directors are of the view that market values as at 31st March 2022 have not
materially changed from the values determined as at 31st March 2020."

The Market value has been used as the fair value of the property. In determining the revaluation, the current
condition of the properties and future usability have been considered. Also Value has made reference to market
evidence of transaction price for similar properties, with appropriate adjustment for size, usage and location.
Accordingly, the land and buildings were valued on an open market value on existing use basis.

Fair Value No of Level of

as at 31.03.2022 Buildings Fair Value
Company Location Last revaluation Land Extent (Rs.) Hierarchy
Land Buildings
Unagahadeniya 31st March 2020 0A-1R-30.40P 21,120,000 903,000 1 Level 3
Renuka Agri Foods PLC Wathupitiwala /
31st March 2020 - - 367,715,965 11 Level 3
Giriulla
Renuka Developments (Pvt) Ltd Unagahadeniya 31st March 2020 1A-3R-23.30P 75,825,000 24,077,876 7 Level 3
Nalla, Diuldeniya 31st March 2020 - - 8,524,350 4 Level 3
Kandy Plantations Ltd
Matale 31st March 2022 20A-2R-4.70P 77,300,000 - Level 3
Cocowatte Estate,
Coco Lanka (Pvt) Ltd 31st March 2020 165A-1R-05P 180,448,000 10,454,750 5 Level 3
Puttalam
Renuka Agri Organics Ltd Wathupitiwala 31st March 2020 - - 262,973,228 3 Level 3
Danister De Silva
Mawatha, 31st March 2020 0A-1R-0P 320,000,000 588,921,750 1 Level 3
Colombo – 8
Karishue Place,
31st March 2020 0A-0R-4.7P 18,800,000 – – Level 3
Shaw Wallace Ceylon Ltd Colombo – 9
Gamunu Mawatha,
31st March 2020 0A-1R-19.8P 29,900,000 47,585,241 11 Level 3
Ekala,
Samagi Mawatha,
31st March 2020 1A-1R-14.75P 107,375,000 31,531,739 3 Level 3
Ekala
Pirivena Road,
Richlife Diaries Ltd 31st March 2020 5A-2R-06P 158,568,000 184,495,295 1 Level 3
Molligoda, Wadduwa
New Nuge Road,
Shaw Wallace Properties (Pvt) Ltd 31st March 2020 0A-2R-12.59P 394,793,573 182,970,652 2 Level 3
Peliyagoda

* Kandy Plantations Ltd has revalued Matale land as at 31st March 2022. ( Valuation carried out by Mr.A.A.M. Fathihu –
FIV (Sri Lanka))

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Valuation technique and significant unobservable inputs

Valuation techniques Significant Inter -relationship between Significant

unobservable inputs unobservable inputs and fair value
measurement
Market comparable method ; this method Price per perch for Land Estimated fair value would Increase/
considers the selling price of a similar Price per square fact (decrease) if
property within a reasonably recent period Depreciation rate Price per perch increases/(decreases)
of time in determining the fair value of Price per square foot increases/
the property being revalued. This involves (decreases) Depreciation rate for
evaluation of recent active market prices building increases/(decreases)
if similar assets, making appropriate
adjustments for differences in size, nature,
location, condition of specific property in
this process outlier transactions, indicative
of particulary motivated buyers of sellers are
too compensated for since the price may not
adequately reflect the fair market value.
Investment method ; This method involves Gross Monthly Rental Estimated fair value would Increase/
capitalisation of the expected rental income Years Purchase (Present (decrease) if
at an appropriate rate for years since value of 1 unit per Gross annual rental increases/
purchased, currently characterised by the for period void Period) (decreases) Years Purchase increases/
rental property market. (decreases) Void Period increase/
(decrease)

Land Building
Company Location Market Extent Per Increase Decrease Market Increase Decrease
Value as Perch +10% -10% Value +10% -10%
at 31st Value as at
March 31st
2022 March
2022
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Unagahadeniya 21,120,000 0A-1R-30.40P 300,000 2,112,000 (2,112,000) 903,000 90,300 (90,300)
Renuka Agri Foods PLC
Wathupitiwala / Giriulla -- -- -- -- – 367,715,965 36,771,597 (36,771,597)
Renuka Developments
Unagahadeniya 75,825,000 1A-3R-23.30P 250,000 7,582,500 (7,582,500) 24,077,876 2,407,788 (2,407,788)
(Pvt) Ltd
Nalla, Diuldeniya -- -- -- -- – 8,524,350 852,435 (852,435)
Kandy Plantations Ltd
Matale 77,300,000 20A-2R-4.70P 17,627 7,730,000 (7,730,000) -- -- –
Cocowatte Estate,
Coco Lanka (Pvt) Ltd 180,448,000 165A-1R-05P 6,824 18,044,800 (18,044,800) 10,454,750 1,045,475 (1,045,475)
Puttalam
Renuka Agri Organics Ltd Wathupitiwala -- -- -- -- – 262,973,228 26,297,323 (26,297,323)
Danister De Silva
320,000,000 0A-1R-0P 8,000,000 3,200,000 (3,200,000) 588,921,750 58,892,175 (58,892,175)
Mawatha, Colombo – 8
Karishue Place,
Shaw Wallace Ceylon Ltd 18,800,000 0A-0R-4.7P 4,000,000 1,880,000 (1,880,000) -- – –
Colombo – 9
Gamunu Mawatha, Ekala, 29,900,000 0A-1R-19.8P 500,000 2,990,000 (2,990,000) 47,585,241 4,758,524 (4,758,524)
Samagi Mawatha, Ekala 107,375,000 1A-1R-14.75P 500,000 10,737,500 (10,737,500) 31,531,739 3,153,174 (3,153,174)
Pirivena Road,
Richlife Dairies Ltd 158,568,000 5A-2R-06P 178,971 15,856,800 (15,856,800) 184,495,295 18,449,530 (18,449,530)
Molligoda, Wadduwa
Shaw Wallace Properties New Nuge Road,
394,793,573 0A-2R-12.59P 4,263,430 39,479,357 (39,479,357) 182,970,652 18,297,065 (18,297,065)
(Pvt) Ltd Peliyagoda

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16. RIGHT OF USE ASSET/LEASE LIABILITY

The Group has leased factory/office premises and estates. The Lease typically run for period of two to Fifty
years, with an option to renew the lease after the date. Lease payments are renegotiated every 3–5 years to
reflect the market rentals. Some leases provide for additional rent payments that are based on changes in local
price indices.
The leases arrangements were entered into many year ago as combined leases of land and buildings. Previously
these leases were classified as operating leases under LKAS 17.
Information about leases for which the Group is a lessee presented below.
Renuka Agri Foods PLC – BOI Land Wathupitiwala, Head Office Building, Colombo 2
Kandy Plantations Ltd – Giriulla Estate
Ceylon Forestry (Pvt) Ltd – Wiharagama Estate
Renuka Agri Organics Ltd – BOI Land Wathupitiwala, Land and Building Dankotuwa and Unagahadeniya.

16.1 The carrying amounts of right-of-use assets recognised and its movements during the year:

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Cost
Balance as at 01st April 206,539,854 171,035,525 -- --
Additions during the year 11,311,433 58,233,635 -- --
Disposals / write-offs during the year – (22,729,306) -- --
Disposal of subsidiary (8,193,035) – -- --
Cost as at 31st March 209,658,252 206,539,854 -- --

Accumulated amortisation
Balance as at 1st April 75,559,123 60,203,703 -- --
Disposals / write-offs during the year – (921,458) -- --
Charge for the year 17,206,756 16,276,878 -- --
Disposal of subsidiary (7,640,660) -- -- --
Accumulated amortisation as at 31st March 85,125,219 75,559,123 -- --
Net book value as at 31st March 124,533,033 130,980,731 -- --

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16.2 The carrying amounts of lease liability (included under current and non current liabilities) and its movements
during the year:

GROUP COMPANY
AS AT 31 MARCH
ST
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Balance as at 01 April 2021 127,726,502 115,747,227 – –
Disposals / write-offs during the year – (15,505,950) – –
Disposal of subsidiary (893,998) – – –
Additions during the year 11,550,596 58,233,635 – –
Accretion of interest 9,071,007 9,605,047 – –
Payments (25,668,439) (47,087,717) – –
Exchange gain 40,420,584 6,734,260 – –
Balance as at end of the year 162,206,252 127,726,502 – –

Current 23,108,974 24,783,125 – –

Non- current 139,097,279 102,943,378 – –
Balance as at end of the year 162,206,253 127,726,503 – –

16.3 Amount recognized in profit or loss

Interest on lease liabilities 9,071,007 9,605,047 – –
Amortization of Right to Use Asstes 17,206,756 16,276,878 – –

16.4 Amount recognized in Statement of cash flows

Total cash outflow for leases 25,668,439 47,087,717 – –

17. INVESTMENT PROPERTY

17.1 Group Land Building 2022 2021

Rs. Rs. Rs. Rs.
Balance as at the Beginning of the Year 190,229,693 113,160,452 303,390,145 292,995,619
Changes in Fair Value 15,147,295 2,220,254 17,367,549 10,394,526
Balance as at the end of the year 205,376,988 115,380,706 320,757,694 303,390,145

17.1.1 The Subsidiarie’s Investment Property has been accounted for as property, plant and equipment in the Financial
Statements of the Group in view of it being owner occupied property from the Group’s point of view, and
thereby changes in fair value adjusted respectively.

17.2 Rental Income earned from Investment Property by the group amounted to Rs. 5,649,979 (2020/21
Rs. 1,743,569 ) and Rs. 265,263 Operating Expenses incurred in relation to the Investment Property during the
year (2020/21 – Rs 2,799,188 )

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17.3 Fair value of the Investment Property is ascertained by annual independent valuation carried out by L.M.P
Perera- F.I.V (Sri Lanka) as at 31 March 2022

The Market value has been used as the fair value in determining the fair value. The current condition of the
properties and future usability have been considered. Also valuer has made reference to market evidence of
transaction prices for similar properties, with appropriate adjustments for size, usage an location.

Rented Out Warehouse

Company Location Market Extent Per SF / Increase Decrease
Value as at Perch Value +10% -10%
31st March
2022
Rs. Rs. Rs. Rs.
Shaw Wallace Building 115,380,706 SF 35747 3,228 11,538,071 (11,538,071)
New Nuge Road,
Properties Land
Peliyagoda 205,376,988 Perch 123 1,669,732 20,537,699 (20,537,699)
(Pvt) Ltd

18 . BIOLOGICAL ASSETS

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Balance as at 01 April 109,439,774 90,952,113 – –
Additions during the year 12,222,570 13,798,621
Gain/(Loss) on changes in Fair Value (722,302) 4,689,040 – –
Balance as at 31st March 120,940,042 109,439,774 – –

2022 2021 2022 2021

Represented by
Rs. Rs. Rs. Rs.
Biological Assets at fair value (Note 18.1) 62,331,124 62,026,150 – –
Biological Assets at cost less (Note 18.2) 56,221,752 45,395,534 – –
Immature pepper plantation 2,387,166 2,018,090 – –
120,940,042 109,439,774 – –

18.1 Biological Assets at Fair value

Biological Assets at Fair value as at 31st March 2022 consists of Ceylon Forestry (Pvt) Limited’s investment
made for Teak Plants and Coco Lanka (Private) Limited’s, Investments made for timber plants.

18.1.1 Ceylon Forestry (Private) Limited

The biological asset is on the land owned by Ceylon Botanicals (Private) Limited (a subsidiary company of
the Group), for which rent has been paid by Ceylon Forestry (Private) Limited. The total extent of the land is
67-A-3R-03.00P. The planted area is 42 acres. Number of trees are 13,896.
Managed trees include commercial teak timber plantations cultivated on the estates in Matale. The cost of
immature trees up to 5 years from planting are treated as approximate fair value particularly on the grounds
of little biological transformation has taken place and impact of the biological transformation on price is not
material.
When such plantation become mature, the additional investment since taken over to bring them to maturity
are transferred from immature to mature.

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The fair value of managed trees was ascertained in accordance with LKAS 41 – “Agriculture” which is applicable
only for managed agricultural activity in terms of the ruling issued by the Institute of Chartered Accountants of
Sri Lanka. The Valuation was carried out by an independent Chartered Valuation Surveyor Mr. W.M. Chandrasena
FIV(SL)MRICS (UK) using Discounted Cash Flows (DCF) method. Valuation of biological assets are considered
as a level III valuation, and details of the valuation are given below.
18.1.2 Coco Lanka (Private) Limited
The biological assets is on the land acquired by Coco Lanka (Private) Limited. The total extent of the lad
is 165 Acres. Managed trees include commercial Teak timber plantations and coconut nursery on the estate
in Puttalam. The cost of immature trees up to 5 years from planting are treated as approximate fair value
particularly on the grounds of little biological transformation has taken place and impact of the biological
transformation on price is not material.
When such plantation become mature, the additional investment since taken over to bring them to maturity
are transferred from immature to mature.
The fair value of managed trees was ascertained in accordance with LKAS 41 – “Agriculture” which is applicable
only for managed agricultural activity in terms of the ruling issued by the Institute of Chartered Accountants of
Sri Lanka. The Valuation was carried out by an independent Chartered Valuation Surveyor Mr. W.M. Chandrasena
FIV(SL)MRICS (UK) using Discounted Cash Flows (DCF) method. Valuation of biological assets are considered as
a level III valuation, and details of the valuation are given below.
18.1.3 Key assumptions used in valuation are as follows

Variable Comment
Timber Content Estimated based on the girth (range between 15 to 72 inch), height (range between 16
to 35 nears) and considering the growth and present age of the trees of each species
in different geographical regions, factoring all the prevailing statutory regulations
enforced against harvesting of timber coupled with forestry plan of the Company
approved by the Forestry Department.
Economic Useful Life Estimated based on normal life (25–35 years) span of each species by factoring the
forestry plan of the Company approved by the Forestry Department.
Sellilng Price Estimated based on prevailing Sri Lankan market prices (Rs. 675–825 per cubic ft.)
factoring all the conditions to be fulfilled in bringing the trees in to salable condition.
Discount Rate Future cash flows are discounted at the rate of 14.5% (2021 – 13%)

The valuations, as presented in the external valuation models based on net present values, take into account
the long-term exploitation of the timber plantation. Because of the inherent uncertainty associated with the
valuation at fair value of the biological assets due to the volatility of the variables, their carrying value may differ
from their realizable value. The Board of Directors retains their view that commodity markets are inherently
volatile and that long-term price projections are highly unpredictable. Hence, the sensitivity analysis regarding
selling price and discount rate variations as included in this note allows every investor to reasonably challenge
the financial impact of the assumptions used in the LKAS 41 against his own assumptions.

The estimated average future sales price of timber may

Inter-relationship between key unobservable increase or decrease within a +10% to -10% range.
inputs and fair value measurement: The risk-adjusted discount rate of 14% may stimulate an
increase or a decrease between the ranges +1% to -1%

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18.1.3 Sensitivity Analysis

Sensitivity variation on sales price
Values as appearing in the Statement of Financial Position are very sensitive to price changes with regard to
the average sales prices applied. Simulations made for timber, shows that an increase or a decrease by 10% of
the estimated future selling price has the following effect on the net present value of biological assets:

Sales price fluctuation 10% 0 -10%

Manage Timber Rs. Rs. Rs.
As at 31st March 2022 68,564,235 62,331,124 56,098,010
As at 31st March 2021 68,228,765 62,026,150 55,823,536

Sensitivity variation on discount rate

Values as appearing in the Statement of Financial Position are very sensitive to changes of the discount rate
applied. Simulations made for timber, shows that an increase or a decrease by 1% of the estimated discount
rate has the following effect on the net present value of biological assets:

Discount rate fluctuation 1% 0 -1%

Manage Timber Rs. Rs. Rs.
As at 31st March 2022 56,589,874 62,331,124 68,783,759
As at 31st March 2021 55,603,164 62,026,150 69,327,561

18.2 Biological Assets at cost less depreciation include coconut nursery. The nursery is for replant vacant areas of
the plantation held by Kandy Plantations Limited and Coco Lanka (Private) Limited. During the year, Kandy
Plantations Limited has incurred Rs.1,423,555 (2020/21 – Rs.1,954,682) in planting coconut nursery. The asset
is carried out at the cost as at the reporting date, since the nursery has just started its operation and the
expected useful life is extimated to be 5 years.

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78 Annual Report 2021/22
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19. INVESTMENT IN SUBSIDIARIES

Effective Effective Company

Holding Holding
31/03/2022 31/03/2021 31/03/2022 31/03/2021
% % Rs. Rs.
Direct-Subsidiaries
Renuka Agri Foods PLC 65.12% 70.03% 791,047,245 850,663,245
Renuka Agri Organics Ltd 79.07% 82.02% 152,499,000 152,499,000
Renuka Teas (Ceylon) (Pvt) Ltd -- 100.00% – 118,437,500
Shaw Wallace Ceylon Ltd 85.03% 88.51% 1,244,603,190 1,343,003,190
Richlife Dairies Ltd 100.00% 96.55% 1,105,000,000 773,500,000

Sub-Subsidiaries
Renuka Developments (Pvt) Ltd 65.12% 70.03% – –
Bois Brothers (Pvt) Ltd -- 100.00% – –
Kandy Plantation Ltd 63.04% 67.80% – –
Ceylon Forestry (Pvt) Ltd 37.82% 40.68% – –
Ceylon Botanicals (Pvt) Ltd -- 54.24% – –
Shaw Wallace Properties Limited 85.03% 88.51% – –
Coco Lanka (Pvt) Ltd 63.61% 68.47% – –
Matale Valley Plantations (Pvt) Ltd -- 67.79% – –
3,293,149,435 3,238,102,935

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CEYLON BOTANICALS (PVT) LTD

The group has decided to derecognize the investment in ceylon botanicals (pvt) ltd, a 100% owned sub
subsidiary of Kandy plantations (pvt) Ltd group, on 18th August 2021 For a consideration of rs. 26,300,000/-.
Tabulated below is summarised the net impact of the transaction.

Following table summarised the total identifiable assets and liabilities as at disposal date.

Assets
Property, plant and equipment 20,001,062
Amounts due from related company 33,332
Cash at bank 5,009,438
25,043,832
Liabilities
Deferred tax liability (4,745,800)
Amounts due to related company (6,655)
Other payables (77,332)
(4,829,787)
Total identifiable net assets as at disposal date
Tabulated below is the net impact of the transactions outlined in above. 20,214,045

Cash consideration 26,300,000

Impact on NCI (2,785,137)
23,514,863
Carrying value of net asset (20,214,045)
Gain on disposal of subsidiary 3,300,818

Cash flow as a result of disposal of subsidiary

Consideration received 26,300,000
Cash and cash equivalent as at dispsal date
Cash and Cash Equivalents (5,009,438)
Net cash inflow as a result of disposal 21,290,562

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Renuka Teas Ceylon (Pvt) Ltd and Bois Brothers (Pvt) Ltd
The Group has decided to derecognize the investment in Renuka Teas Ceylon (Pvt) Ltd and Bois Brothers (Pvt)
Ltd, on 28.08.2022 for a consideration of Rs. 193,717,425/-. Tabulated below is summarised the net impact of
the transaction.
Following table summarised the total identifiable assets and liabilities as at disposal date.

Renuka Teas Bois

Ceylon Brothers Total
(Pvt) Ltd (Pvt) Ltd RS.
RS. RS.
Assets
Property, plant and equipment 15,456,301 95,000,000 110,456,301
Right of use Assets 552,375 – 552,375
Inventories 74,771,932 – 74,771,932
Trade Receivables and Other Receivables 74,904,329 478,062 75,382,391
Other Current Assets 10,043,876 603,805 10,647,681
Cash & Cash Equivalents 11,308,574 5,579,840 16,888,414
187,037,387 101,661,707 288,699,094
Liabilities
Retirement Benifit Obligation (7,349,969) – (7,349,969)
Lease Liability (893,998) – (893,998)
Deferred Tax Liability (229,417) (34,700,054) (34,929,471)
Trade & Other Payables (16,537,893) (85,002) (16,622,895)
Other Current Liabilities (1,130,611) – (1,130,611)
Income Tax Payable (2,080,010) – (2,080,010)
Interest Bearing Borrowings (71,387,786) – (71,387,786)
(99,609,684) (34,785,056) (134,394,740)
Total identifiable net assets as at disposal date 87,427,703 66,876,651 154,304,354

Tabulated below is the net impact of the transactions outlined in above.

Cash consideration 193,717,425

193,717,425
Carrying value of net asset (154,304,354)
Gain on disposal of subsidiary 39,413,071

Cash flow as a result of disposal of subsidiary

Consideration received 193,717,425
Cash and cash equivalent as at dispsal date
Cash and Cash Equivalents (16,888,414)
Net cash inflow as a result of disposal 176,829,011

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19.1 GROUP INVESTMENTS IN SUBSIDIARIES

The Following are the group Investments during the year.

Richlife Dairies Ltd

On 23.06.2021 Renuka Foods PLC purchased 4,058,000 ordinary shares of Richlife Dairies Ltd at Rs.27.23
each from Shaw Wallace Ceylon Ltd for Rs.110,500,000

On 29.06.2021 Renuka Foods PLC purchased 8,116,000 ordinary shares of Richlife Dairies Ltd at Rs.27.23 each
from Shaw Wallace Ceylon Ltd for Rs.221,000,000

Coco Lanka (Pvt) Ltd

On 16.08.2021 Coco Lanka (Pvt) Ltd has Issued 200,000 new ordinary shares at Rs.100 each to
Kandy Plantations Ltd for Rs.20,000,000

Ceylon Botanicals (Pvt) Ltd

On 16.08.2021 Kandy Plantations Ltd disposed 1,250,000 ordinary shares of Ceylon Botanicals (Pvt) Ltd at
Rs.10.52 per share to Renuka Group Ltd for Rs.13,150,000

On 16.08.2021 Ceylon Forestry (Pvt) Ltd disposed 1,250,000 ordinary shares of Ceylon Botanicals (Pvt) Ltd at
Rs.10.52 per share to Renuka Group Ltd for Rs.13,150,000

Renuka Teas Ceylon (Pvt) Ltd

On 20.08.2021 Renuka Foods PLC disposed 3,000,000 ordinary shares of Renuka Teas Ceylon (Pvt) Ltd at
Rs.64.57 per share to Renuka Group Ltd for Rs.193,717,425

Renuka Developments (Pvt) Ltd

On 25.01.2022 Renuka Agri Foods PLC purchased 838,360 right issue ordinary shares at Rs.110 per share from
Renuka Developments (Pvt) Ltd for Rs.92,219,600

Shaw Wallace Ceylon Ltd

On 28.01.2022 Renuka Developments (Pvt) Ltd purchased 15,000,000 ordinary voting shares of
Shaw Wallace Ceylon Ltd at Rs.6.56 per share from Renuka Foods PLC for Rs.98,400,000

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82 Annual Report 2021/22
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19.2 PRINCIPAL SUBSIDIARIES

Following table summarised the total identifiable assets and liabilities as at disposal date.

As at 31st March 2022 As at 31st March 2021

Company and Non-
Class of Proportion Group Non- Proportion Group
Country of Principal controlling
Shares of class Interest controlling of class Interest
Incorporation/ Activities interest
Held held (%) interest (%) held (%)
Operation (%)
Renuka Agri Manufacture & Ordinary 65.12% 65.12% 34.88% 70.03% 70.03% 29.97%
Foods PLC export of coconut
based products
Renuka Agri Manufacture & Ordinary 79.07% 79.07% 20.93% 82.02% 82.02% 17.98%
Organics export of coconut
Limited based products
Renuka Teas Export bulk tea & Ordinary 0.00% 0.00% 0.00% 100.00% 100.00% 0.00%
Ceylon (Pvt) value added tea
Ltd products
Shaw Wallace Manufacturing & Ordinary 85.03% 85.03% 14.97% 88.51% 88.51% 11.49%
Ceylon Ltd distribution of Fast
Moving Consumer
Goods
Richlife Dairies Manufacturing of Ordinary 100.00% 100.00% 0.00% 96.55% 96.55% 3.45%
Ltd dairy & fruit juice
based products
Renuka Organic Ordinary 65.12% 65.12% 34.88% 70.03% 70.03% 29.97%
Developments certification
(Pvt) Ltd licence holder
and investment
in plantation /
farm & vertical
integration
projects
Bois Bros & Providing Ordinary 0.00% 0.00% 0.00% 100.00% 100.00% 0.00%
Co. (Pvt) Ltd warehousing
facilities
Kandy Engaged in Ordinary 63.04% 63.04% 36.96% 67.80% 67.80% 32.20%
Plantations organic certified
Limited cultivation of
agriculture
Ceylon Planting and Ordinary 37.82% 37.82% 62.18% 40.68% 40.68% 59.32%
Forestry (Pvt) managing of
Ltd Forestry
Ceylon Investment in Ordinary 0.00% 0.00% 0.00% 54.24% 54.24% 45.76%
Botanical (Pvt) Agricultural
Ltd property
Shaw Wallace Providing Ordinary 85.03% 85.03% 14.97% 88.51% 88.51% 11.49%
Properties warehousing
(Pvt) Ltd facilities
Coco Lanka Ordinary 63.61% 63.61% 36.39% 68.41% 68.41% 31.59%
Plantation
(Pvt) Ltd

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Non-controlling interest represent the equity in subsidiaries that are not attributable, directly or indirectly
to the parent Company. Profit or loss and each component of other comprehensive income are attributed
to the Company and non-controlling interests. Losses are attributed to non-controlling interests even if the
noncontrolling interests balance reported in the consolidated statement of financial position in negative.

Non-controlling interests are directly recognized as the difference between the proceeds received and the
carrying amount of the acquired interests. The difference is recorded as a reduction or increase in equity
under transactions with non-controlling interests. Upon disposal of rights in a subsidiary that does not result in
a loss of control, an increase or decrease in equity is recognized as the difference between the consideration
received by the Group and the carrying amount of the non-controlling interests in the subsidiary adjusted for
the disposal of goodwill in the subsidiary, if any, and amounts recognized in other comprehensive income, if
any. Transaction costs in respect of transaction with non-controlling interests as also recorded in equity.

Significant inter group balances and transaction and gain or loss resulting from intergroup transactions are
eliminated in full in the consolidated financial statements.

The financial statement of the Company and of the consolidated investees are prepared as of the same date
and period. The accounting policies in the financial statements of those investees are applied consistently
and uniformly with the policy applied in the financial statement of the Company.

19 .3 NON CONTROLLING INTERESTS (NCI)

The following table summarises the information relating to the Group's subsidiaries that have material NCI.

Renuka Agri Renuka Agri Shaw Wallace

Foods PLC Organics Ltd Ceylon Ltd
NCI Percentage 34.88% 20.93% 14.97%
Amount (Rs.) Amount (Rs.) Amount (Rs.)
Non Current Assets 3,804,243,049 474,591,184 2,599,823,608
Current Assets 2,285,236,904 522,416,097 548,639,114
Non Current Liabilities (677,429,317) (93,130,580) (148,925,091)
Current Liabilities (2,084,167,217) (425,752,800) (810,428,192)
Net Assets 3,327,883,419 478,123,901 2,189,109,439
Net Assets attributable to NCI 1,160,844,711 100,072,747 327,622,545

Revenue 4,692,400,458 1,003,024,319 2,334,476,258

Profit for the year 431,213,227 70,553,627 126,956,501
Other Comprehensive Income/ (Expenses) 3,817,902 2,773,323 25,267,216
Total Comprehensive Expenses 435,031,129 73,326,950 152,223,717
Profit allocated to NCI 150,417,407 14,767,083 19,000,335
OCI allocated to NCI 1,331,775 580,465 3,781,496

Cash flows from / (used in) operating activities 80,123,946 19,013,669 137,016,871
Cash flows from / (used in) investment activities (59,120,200) (27,608,352) (232,822,326)
Cash flows from / (used in) finance activities 520,112,467 (51,171,103) 97,682,628

RENUKA FOODS PLC

84 Annual Report 2021/22
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20. INVESTMENT IN FVTOCI

GROUP COMPANY
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Shaw Wallace & Hedges
1,140,675,512 559,429,195 – –
(Private) Limited
1,140,675,512 559,429,195

The Group designated the investments shown above as equity securities at FVOCI because these equity
securities represent investments that the Group intends to hold for the long term for strategic purpose."

"No strategic investments were disposed of during 2022/21, and there were no transfers of any cumulative
gain or loss within equity relating to these investments"

20.1 Investment in Fair Value Through Other Comprehensive Income consists of the following,
Holding No. of Amount
AS AT 31ST MARCH 2022 % Shares (Rs.)
Non – voting ordinary shares of Shaw Wallace &
10% 47,000,000 1,140,675,512
Hedges Ltd
21. INTANGIBLE ASSETS

GROUP COMPANY
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Goodwill (Note 21.1) 203,598,916 203,598,916 – –
Computer Software (Note 21.2) 1,912,743 1,700,482 – –
Trade Marks (Note 21.3 , 21.4) 10,596,788 13,606,788 – –
216,108,447 218,906,186 – –

21.1 GOODWILL
GROUP COMPANY
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Balance as at the beginning of the year 203,598,916 203,598,916 – –
Balance as at the end of the year 203,598,916 203,598,916 - -

THE GROUP GOODWILL HAS BEEN ALLOCATED TO THE FOLLOWING CASH GENERATING UNITS, FOR
21.1
IMPAIRMENT TESTING.

2022 2021
AS AT 31ST MARCH 2022 Rs. Rs.
Renuka Agri Foods PLC 28,455,402 28,455,402
Richlife Dairies Ltd 133,024,682 133,024,682
Shaw Wallace Ceylon Ltd 40,062,623 40,062,623
Ceylon Forestry (Pvt) Ltd 1,519,005 1,519,005
537,204 537,204
203,598,916 203,598,916

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

21.1.1.1 Renuka Agri Foods PLC

The recoverable amount of this CGU was based on fair value less cost of disposal, estimated using market
value. The fair value measurement was categorised as a Level 1 fair value. As at 31st March 2022, the market
price of share is Rs. 3.60.

21.1.1.2 Richlife Dairies Limited

The recoverable amount of this CGU was based on fair value less costs of disposal, estimated using
discounted cash flows. The fair value measurement was categorised as a Level 3 fair value based on the
inputs in the valuation technique used.

The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned
to the key assumptions represent management’s assessment of future trends in the relevant industries and
have been based on historical data from both external and internal sources.

%
Discount rate 14%
Budgeted EBITDA growth rate Year 2 to Year 4 – 10% & 1% thereafter

21.1.1.3 Shaw Wallace & Hedges Limited

The recoverable amount of this CGU was based on fair value less costs of disposal, estimated using
discounted cash flows. The fair value measurement was categorised as a Level 3 fair value based on the
inputs in the valuation technique used.

The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned
to the key assumptions represent management’s assessment of future trends in the relevant industries and
have been based on historical data from both external and internal sources.

%
Discount rate 14%
Budgeted EBITDA growth rate Year 2 to Year 4 – 10% & 1% thereafter

21.1.1.4 Ceylon Forestry (Private) Limited

The recoverable value of Ceylon Forestry (Private) Limited was based on value in use and this is mainly
consisting of Cash Generating Units (CGU’s) of biological assets, which is at fair value, where in aggregate
with other related CGU’s carrying a value more than the aggregation of the original investment plus goodwill.
Unobservable inputs – Future sale price of timber, risk adjusted discount rate.

21.1.1.5 Kandy Plantations Limited

The recoverable value of Kandy Plantations Limited was based on value in use and this is mainly consisting
of Cash Generating Units (CGU’s) of land and building, which is at fair value, where in aggregate with
other related CGU’s carrying a value more than the aggregation of the original investment plus goodwill.
Unobservable inputs – Price per perch and Square feet.

RENUKA FOODS PLC

86 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

21.2 COMPUTER SOFTWARE

GROUP COMPANY
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Balance as at the Beginning of the Year 1,700,482 2,469,878 – –
Additions made during the year 928,469 – – –
Amortization during the year (716,208) (769,396) – –
Balance as at the End of the Year 1,912,743 1,700,482 – –

21.3 MR. POP TRADE MARK (NOTE 21.3.1)

Balance as at the Beginning of the Year 3,256,791 4,420,137 – –
Amortization during the year (1,500,000) (1,163,346) – –
Balance as at the End of the Year 1,756,791 3,256,791 – –

21.3.1 Shaw Wallace Ceylon Limited has acquired the "Mr. POP" Trade Mark for a sum of Rs. 15 Million during
2012/13. The management is of the opinion that the trade mark has a usefull economic life of 10 years.

21.4 TRADE MARK (NOTE 21.4.1)

GROUP COMPANY
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Balance as at the Beginning of the Year 10,349,997 – – –
Additions made during the year – 12,074,997 – –
Amortization during the year (1,510,000) (1,725,000) – –
Balance as at the End of the Year 8,839,997 10,349,997 – –

21.4.1 Mayfair Foods (Pvt) Ltd has acquired the "Mayfair" trade mark for a sum of Rs. 15Mn during the year
2016/17. The Management is of the opinion that the trade mark has a useful economic life of 10 years.
With the amalgamation with Shaw Wallace Ceylon Limited, the same is reflected in Shaw Wallace Ceylon
Limited.

Total Intangible Assets 216,108,447 218,906,186 – –

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22. INVENTORIES
GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Raw Materials & Consumables 279,824,989 220,851,616 – –
Finished Goods 960,155,654 660,739,059 – –
Spares & Consumables 307,651,721 239,127,653 – –
Packing Material & Chemicals 349,507,731 283,015,337 – –
Work in Progress 97,883,910 70,111,543 – –
Goods in Transit 53,335,298 22,964,657 – –
2,048,359,303 1,496,809,865 – –
Provision for obsolete Inventory (136,185,322) (149,723,687) – –
1,912,173,981 1,347,086,178 – –

23. Trade & Other Receivables

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Trade Debtors & Bills Receivable 1,434,765,170 1,072,658,376 – –
VAT Recoverable 4,147,692 12,587,113 – –
Deposits & Pre-Payments 346,650,214 367,371,307 180,000 180,000
Taxes Recoverable 82,030 82,030 82,030 82,030
WHT Recoverable 450,958 43,179 33,186 33,186
Advances Payments 38,958,806 10,242,248 – 23,988
Staff Loan and Advances 5,398,390 2,193,256 – –
Other Receivables 58,987,634 65,003,060 36,485 –
1,889,440,894 1,530,180,569 331,701 319,204
Provision for doubtful debts (34,413,583) (12,369,169) – –
1,855,027,308 1,517,811,400 331,701 319,204

RENUKA FOODS PLC

88 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

24. Amounts due from Related Companies

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Renuka Enterprises (Pvt) Ltd 22,496 – – –
Renuka Agro Exports Limited 10,374,417 11,011,495 – –
10,396,913 11,011,495 – –

25. ASSETS HELD FOR SALE

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Kandy Plantations Limited
Land – transfer from property plant and
4,698,806 – – –
equipment
Balance as at 31st March 4,698,806 – – –

Fair value of the land was ascertained by an Independent valuation carried out by Mr. A.A.M. Fathihu-F.I.V (Sri
Lanka) as at 31st March 2022. The management has intention to sale this land during the next financial year.

26. CASH & CASH EQUIVALENTS

26.1 Favorable Balances
GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Call Deposits 2,857,842 1,309,681 – –
Cash at bank & in hand 473,397,846 409,813,480 6,023,672 10,139,941
476,255,688 411,123,161 6,023,672 10,139,941

26.2 Unfavorable Balances

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Bank Overdraft (149,656,077) (129,498,543) (84,560) (221,909)
Cash & Cash Equivalents for Cashflow Purpose 326,599,611 281,624,618 5,939,112 9,918,032

Cash and cash equivalents include bank overdrafts that are repayable on demand and form an integral part of
the Group’s cash management.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
27. Stated Capital
Number of Shares Issued
Voting Shares
At the Beginning of the year 117,960,106 117,960,106 117,960,106 117,960,106
At the End of the year 117,960,106 117,960,106 117,960,106 117,960,106

Non Voting Shares

At the Beginning of the year 4,773,346 4,773,346 4,773,346 4,773,346
At the End of the year 4,773,346 4,773,346 4,773,346 4,773,346

122,733,452 122,733,452 122,733,452 122,733,452

The holders of ordinary shares are entitled to receive dividends as declared from time to time and only voting
shareholders are entitled to one vote per individual present of meetings of the shareholders or one vote per
share in the case of a poll.

27.1 Value of Issued and Fully Paid Ordinary Shares

GROUP COMPANY
AS AT 31ST MARCH
2022 2021 2022 2021

Rs. Rs. Rs. Rs.

At the Beginning of the year 2,241,842,234 2,241,842,234 2,241,842,234 2,241,842,234
At the End of the year 2,241,842,234 2,241,842,234 2,241,842,234 2,241,842,234

28. Reserves
GROUP COMPANY
AS AT 31ST MARCH
2022 2021 2022 2021

Rs. Rs. Rs. Rs.

Revaluation Reserve (Note 28.1) 737,310,185 755,457,294 – –
737,310,185 755,457,294 – –

28.1 Revaluation Reserve

GROUP COMPANY
AS AT 31ST MARCH
2022 2021 2022 2021

Rs. Rs. Rs. Rs.

Balance as at Beginning of the Year 755,457,294 712,167,960 – –

During the Year Movement (18,147,109) 43,289,334 -- --
Balance as at the End 737,310,185 755,457,294 – –
Revaluation reserve relates to the revaluation of land and buildings.

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90 Annual Report 2021/22
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

GROUP COMPANY
AS AT 31ST MARCH 2021 2020 2021 2020
Rs. Rs. Rs. Rs.
29. Deferred Tax Liability
Balance As at 1st April 460,160,494 563,491,142 – –
Disposal of Subsidiary (41,522,956) – – –
Provision Made/( Reversal) during the year 51,663,826 (103,330,648) – –
Balance as at the End of the Year 470,301,364 460,160,494 – –

29.1 Provision for Deferred Tax is attributable to the followings.

2022 2021
AS AT 31ST MARCH Temporary Tax Effect Temporary Tax Effect
Differences Differences
Rs. Rs. Rs. Rs.
Group
On Property Plant and Equipment 1,830,778,851 265,067,158 1,722,831,488 309,345,412
On Right of use Asset 151,031,553 21,692,560 142,214,528 21,220,528
On Investment properties 496,194,205 104,200,783 – –
Fair Value Gain on Investment 161,275,514 33,867,858 127,327,193 26,738,714
Revaluation of Land & Building 1,016,049,175 198,237,911 1,357,538,207 291,071,723
On Retirement Benefit Obligation (113,191,710) (16,583,158) (108,632,627) (17,302,941)
On Carried Forward Tax Losses (388,418,984) (82,701,490) (622,030,982) (122,318,254)
On lease liabiliity (174,863,528) (25,054,385) (124,940,050) (19,639,737)
On Provision for bad debts/ Stocks (186,969,802) (28,425,873) (179,856,177) (28,954,951)
Balance as at the End 2,791,885,273 470,301,364 2,314,451,580 460,160,494

29.2 Reconciliation of Deferred Tax Provision

Recognized in Profit or Loss (41,169,171) 58,506,609 – –
Recognized in OCI (8,646,970) 44,824,039 – –
Tax Effect (49,816,141) 103,330,648 – –

29.3 The Group has not recognized the deferred tax asset on tax losses arising from Kandy Plantations Limited,
Ceylon Forestry (Pvt) Limited, and Coco Lanka (Pvt) Limited amounting to Rs. 74,508,235, as these companies
are exempted from income tax under agro forming for five years of assessments commencing from 1st April
2021 as per the Inland Revenue Act No. 24 of 2017 and subsequent amendments thereto. Further in relation
to these companies related other temporary differences also not recognized, as the management is of the
opinion that the realization of the same is remote.

29.4
Renuka Agri Foods PLC, Renuka Agri Organics Ltd, have applied the effective tax rate of 14% (2020/21 – 14%)
whereas, 24%(2020/21 – 24%) was applied by Renuka Developments (Pvt) Ltd. 18% and 20% rates applied
for Richlife Dairies Ltd and Shaw Wallace Properties (Pvt) Ltd respectively for the calculation of deferred tax
liability as at the reporting date.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

30. Interest Bearing Borrowings

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Balance as at the Beginning of the year 2,285,225,635 1,465,515,643 – –
Addititon During the year 7,848,369,477 5,532,690,774 – –
Disposal of subsidiairy (71,387,786) – – –
Written Back during the year – (43,400) – –
Payments During the year (7,525,329,659) (4,712,937,382) – –
2,536,877,667 2,285,225,635 – –

Payable within one year 2,079,485,717 1,992,183,745 – –

Payable after one year 457,391,950 293,041,890 – –
2,536,877,667 2,285,225,635 – –

30.1 Renuka Agri Foods PLC

Details of loans obtained by the Company are set out below.
Financial Institution Facility Obtained Outstanding Balance Repayment Assets Pledged
2022 2021
Lodgment
Hatton National Bank Repayable on
Packing Credit Loan – 209,430,177 of confirmed
PLC demand
orders
Hatton National Bank Repayable on
Short Term Loan 660,000,000 450,000,000 -
PLC demand
Negative pledge
Hatton National Bank Commencing over Coconut
Term Loan 300,000,000 293,420,381
PLC from March 2021 milk processing
plant for UHT
71 monthly Rs. 200 mn.
installements of Corporate
Commercial Bank PLC Term Loan 200,000,000 – Rs. 2,777,800/- & Guarantee from
Rs. 2,776,200 as Renuka Foods
final. PLC
Lodgment
National Development Packing Credit Repayable on
549,213,643 – of confirmed
Bank PLC Loan demand
orders
National Development Repayable on
Short Term Loan 60,000,000 535,000,000
Bank PLC demand
60 monthly Term Loan
Nations Trust Bank
Term Loan – 69,514,727 installements of agreement for
PLC
usd 10,250/- USD 327,903/=
1,769,213,643 1,557,365,285

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92 Annual Report 2021/22
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

30.2 Shaw Wallace Ceylon Ltd

Details of loans obtained by the Company are set out below.
Financial Facility Assets Pledged/
Outstanding Balance Repayment
Institution Obtained Securities
2022 2021
Hatton
Short Term Payable within 120 days from
National Bank 302,000,000 75,000,000
Loan draw down date.
PLC

National Board Resolution

Short Term Payable within 90 days from
Development 50,000,000 210,000,000 dated 12th August
Loan draw down date.
Bank PLC 2021

Board Resolution
Nations Trust Short Term Payable within 90 days from
69,244,928 27,300,000 Dated 21st January
Bank PLC Loan draw down date.
2020
421,244,928 312,300,000

30.3 Renuka Teas Ceylon (Private) Ltd

Details of loans obtained by the Company are set out below.
Financial Facility
Outstanding Balance Repayment Assets Pledged/Securities
Institution Obtained
2022 2021
National Payable within 18
Development Term Loan – 22,200,000 Monthly Installments
Bank PLC w.e.f February 2021
– 22,200,000

30.4 Kandy Plantations Ltd

Details of loans obtained by the Company are set out below.
Assets
Financial Facility
Outstanding Balance Repayment Pledged/
Institution Obtained
Securities
2022 2021
Interest to be paid during the Grace
Period of 6 months. Thereafter it
Commercial is repayable in 17 equal monthly
Term Loan 7,130,154 10,000,000
Bank PLC instalments of Rs.555,600/- and a
final instalment of Rs.554,800/- plus
interest
7,130,154 10,000,000

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30.5 Renuka Agri Organics Ltd

Details of loans obtained by the Company are set out below.
Facility
Financial Institution Outstanding Balance Repayment Assets Pledged
Obtained
2022 2021
Hatton National Bank Packing Repayable on Lodgment of confirmed
– 122,902,151
PLC Credit Loan Demand orders
Packing Repayable on Lodgment of confirmed
Peoples Bank – 183,409,200
Credit Loan Demand orders
Rs. 25 mn. Corporate
Commercial Bank of 24 Monthly
Term Loan 5,539,492 22,220,000 Guarantee from Renuka
Ceylon PLC Installment
Foods
Rs. 300 mn. Corporate
Commercial Bank of 56 Monthly
Term Loan 19,305,000 29,829,000 Guarantee from Renuka
Ceylon PLC Installment
Foods
Rs. 250 mn. Corporate
Commercial Bank of Short Term
50,000,000 – 90 days Guarantee from Renuka
Ceylon PLC Loan
Foods
Short Term Lodgment of confirmed
Seylan Bank PLC 245,000,000 – 90 days
Loan orders
319,844,492 358,360,351

30.6 Richlife Dairies Limited

Details of loans obtained by the Company are set out below.
Financial Assets Pledged/
Facility Obtained Outstanding Balance Repayment
Institution Securities
2022 2021

Peoples Bank Term Loan 19,444,450 25,000,000 24 Monthly Installment

19,444,450 25,000,000

Total 2,536,877,667 2,285,225,635

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
31. RETIREMENT BENEFIT OBLIGATION
At the beginning of the year 113,458,562 105,722,727 – –
Charge to Profit or Loss 18,528,053 26,123,255 – –
Charge to OCI (9,835,736) (3,965,216) – –
Payment made during the year (12,881,799) (14,422,204) – –
Disposal of subsidiary (7,349,969) – -- --
101,919,111 113,458,562 – –

RENUKA FOODS PLC

94 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
31.1 Movement in the Present Value of Defined Benefit Obligation

Provision for PV – DBO as at 01 April 113,458,562 105,722,727 – –

Interest Cost for the period 8,338,758 11,100,886 – –
Current Service Cost for the period 12,244,399 15,022,369 – –
Past Service Cost (2,055,104) -- --
Payments during the year (12,881,799) (14,422,204) – –
Acturial (Gain) / Loss on PV-DBO (9,835,736) (3,965,216) – –
Disposal of subsidiary (7,349,969) – -- --
Benefit obligation as at 31 March 101,919,111 113,458,562 – –

During 2021/22, the pension arrangements was adjusted to reflect new legal requirements as per minimum
retirement age of workers Act no. 28 of 2021 regarding the retirement age. As a results of the plan
amendment, the Group and defined benefit obligation decrease by Rs. 2,055,104. A corresponding post
service credit was recognized in profit or loss during the 2021/22

31.2 Gratuity Liability is based on the Actuarial Valuation carried out by Mr Poopalanathan, M/S. Actuarial and
Management Consultants (Pvt) Limited. Actuaries, on 31 March 2022, as per the LKAS 19 Employee Benefits.
The Principal assumptions used in the 2022 actuarial valuation are as follows;

2022 2021
Retirement Age 60 55
Discounting Rate 13.5% 7.00%
Salary Increment Rate 10% 8%
Demographic Assumptions A67/70 Mortality A67/70 Mortality

The above rates were changed to reflect the market rates.

The Future working life time of an individual, as per the assumption made as at 31 March 2022 is 4.40 for
Group

31.3 Sensitivity of assumptions employed in Actuarial Valuation

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding
other assumptions constant, would affect the defined benefit obligation by the amounts shown below.

GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Discount Rate – (1% Increase) 99,056,090 109,963,282 – –
Discount Rate – (1% decrease) 104,997,822 117,241,842 – –
Salary Increment Rate – (1% Increase) 105,581,853 117,720,056 – –
Salary Increment Rate – (1% decrease) 98,454,679 109,442,337 – –

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GROUP COMPANY
AS AT 31ST MARCH 2022 2021 2022 2021
Rs. Rs. Rs. Rs.
32. TRADE AND OTHER PAYABLES
Trade Creditors 723,028,776 455,636,395 – –
Staff Creditors 133,585 16,987 – –
Advance Received from Customer – 933,825 – –
Accrued Expenses 429,039,402 284,072,888 2,325,615 1,032,356
Other Payables 280,255,312 145,244,931 – 1,024,402
1,432,457,075 885,905,026 2,325,615 2,056,758

33. AMOUNTS DUE TO SUBSIDIARY COMPANIES

Shaw Wallace Ceylon Ltd – – – 45,150,682
– – – 45,150,682

33.1 AMOUNT DUE TO RELATED COMPANIES

Renuka Enterprises (Pvt) Ltd – 676,874 – –
Renuka Teas (Ceylon) Pvt Ltd 36,900
36,900 676,874 – –

34. DIVIDEND PAYABLE

Unclaimed Dividends 12,107,992 16,823,303 5,088,488 9,775,773
12,107,992 16,823,303 5,088,488 9,775,773

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96 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

35. RELATED PARTY DISCLOSURE

Related Party Transactions
The Company Carries out transactions with parties who are defined as related parties in Sri Lanka Accounting
Standard 24 Related Party Disclosures’,the details of which are reported below.
The related party transactions are carried out at the terms and conditions indicated below for the respective
transactions.

35.1 Parent and Ultimate Control Party

The immediate parent of the Company is Renuka Agro Exports (Pvt) Ltd and the Ultimate Parent of the Company
is Renuka Holdings PLC.

35.2 Transactions With Related Companies

35.2.1 Transactions with Related Companies – Recurring Transactions – Company

AGGREGATE VALUE
AMOUNT RECEIVED / (PAID) OF RELATED PARTY TERMS AND
RELATED
NAME OF THE COMMON NATURE OF (Rs.) CONDITIONS OF
COMPANY/ TRANSACTIONS AS A
DIRECTORS TRANSACTIONS THE RELATED PARTY
RELATIONSHIP % OF NET REVENUE/
TRANSACTION
2022 2021 INCOME

Renuka Enterprises Dr.S.R.Rajiyah Net of Fund 3,793,350 3,448,500 0.04% Actual Basis
(Pvt) Ltd (Received) /
Payments
Mr.S.V.Rajiyah
Mrs.I.R.Rajiyah Reimbursement (3,793,350) (3,448,500) 0.04% Comparable
of Expenses Uncontrolled Price

Shaw Wallace Dr.S.R.Rajiyah Net of Fund 50,779,614 (45,000,000) 0.59% Actual Basis
Ceylon Limited (Received) /
Payments
Mrs.I.R.Rajiyah Interest (5,628,932) (150,682) 0.06% Interest @ AWPLR
Expenses
Mr.S.V.Rajiyah
Mr.S.Vasanthakumar
Net of Fund
Renuka Agri Foods
Dr. S. R. Rajiyah (Received) / – 12,165,354 - Actual Basis
PLC
Payments
Interest
Mrs. I. R. Rajiyah – (1,610,000) - Interest @ AWPLR
Expenses
Mr. S. V. Rajiyah
Mr. S. Vasanthakumar

35.2.2 Transactions with Related Companies – Recurring Transactions as per CSE listing rules 9.3.2
There were no recurring transactions where aggregate value of related party transactions exceeded 10% of net
revenue during the financial year 2021/2022, which need to be disclosed as per CSE listing rules 9.3.2.

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 98
35.2.3 Transactions with Related Companies – Non Recurring Transactions

AGGREGATE
AGGREGATE VALUE
VALUE OF THE
OF RELATED PARTY
RELATED PARTY THE RATIONALE
TRANSACTIONS TERMS AND CONDITIONS
TRANSACTIONS FOR ENTERING
REPORTING ENTITY RELATED COMPANY / PARTY AS A % OF OF THE RELATED PARTY
ENTERED IN TO INTP THE
TRANSACTION
DURING THE TRANSACTIONS
FINANCIAL YEAR TOTAL
EQUITY
Rs. ASSETS

Annual Report 2021/22

Shaw Wallace Ceylon Ltd

RENUKA FOODS PLC

Renuka Foods PLC 110,500,000 2.6% 1.2% Based on Valuation Investment

Shaw Wallace Ceylon Ltd

Renuka Foods PLC 331,500,000 7.8% 3.7% Based on Valuation Investment

Coco Lanka (Pvt) Ltd Based on Net Assets

Kandy Plantations Ltd 20,000,000 0.5% 0.2% Investment
Value per share
Renuka Group Ltd Based on Net Assets
Kandy Plantations Ltd 13,150,000 0.3% 0.1% Divestment
Value per share
Renuka Group Ltd Based on Net Assets
Ceylon Forestry (Pvt) Ltd 13,150,000 0.3% 0.1% Divestment
Value per share
Renuka Group Ltd
Renuka Foods PLC 193,717,425 4.6% 2.2% Based on Valuation Divestment

Shaw Wallace & Hedges Ltd

Shaw Wallace Ceylon Ltd 224,910,000 5.3% 2.5% Based on Valuation Investment

Shaw Wallace & Hedges Ltd

Shaw Wallace Ceylon Ltd 427,329,000 10.1% 4.8% Based on Valuation Investment

Shaw Wallace & Hedges Ltd

Shaw Wallace Ceylon Ltd 486,829,000 11.5% 5.5% Based on Valuation Investment

Renuka Developments (Pvt) Ltd

Renuka Agri Foods PLC 92,219,600 2.2% 1.0% Based on Valuation Investment
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

Renuka Foods PLC

Renuka Developments (Pvt)
98,400,000 2.3% 1.1% Based on Valuation Investment
Ltd

Shaw Wallace Ceylon Ltd Shaw Wallace & Hedges Ltd 547,400,000 13.0% 6.2% Based on Valuation Investment
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

35.2.4 Transactions with Related Companies – Non Recurring Transactions as per CSE Listing Rules 9.3.2

AGGREGATE AGGREGATE
VALUE OF THE VALUE OF
TERMS AND THE RATIONALE
RELATED PARTY RELATED PARTY
CONDITIONS
TRANSACTIONS TRANSACTIONS FOR ENTERING
REPORTING ENTITY RELATED COMPANY OF THE
ENTERED IN TO AS A % OF INTP THE
RELATED PARTY
DURING THE TRANSACTIONS
TOTAL TRANSACTION
FINANCIAL YEAR EQUITY
ASSETS
RS
Based on
Shaw Wallace Ceylon Ltd Shaw Wallace & Hedges Ltd 427,329,000 10.1% 4.8% Investment
Valuation
Based on
Shaw Wallace Ceylon Ltd Shaw Wallace & Hedges Ltd 486,829,000 11.5% 5.5% Investment
Valuation
Based on
Shaw Wallace Ceylon Ltd Shaw Wallace & Hedges Ltd 547,400,000 13.0% 6.2% Investment
Valuation
35.2.5 Transactions with Related Entities – Group
AGGREGATE
VALUE OF THE
RELATED PARTY
NAME OF THE TERMS AND CONDITIONS
NAME OF THE NATURE OF TRANSACTIONS
COMMON RELATIONSHIP OF THE RELATED PARTY
COMPANY / PARTY TRANSACTION ENTERED IN TO
DIRECTOR/S TRANSACTION
DURING THE
FINANCIAL YEAR
Rs.
Rent Comparable
Mrs. I R Rajiyah Mrs.I.R.Rajiyah Director (11,520,000)
Expenses Uncontrolled Price
Renuka Mr.S.V.Rajiyah Common Royalty Comparable
(12,455,976)
International Ltd Mrs..A.L..Rajiyah Director Payment Uncontrolled Price
Renuka Group Dr.S.R.Rajiyah Common Royalty (23,607,282) Comparable
Ltd Mrs.I.R.Rajiyah Director Payment Uncontrolled Price
Mr.S.V.Rajiyah
Mrs.J.J.B.A..Rajiyah

35.3 Transactions with Key Management Personnel (KMP)

According to Sri Lanka Accounting Standards 24 – Related Party Disclosures, Key Management Personnel, are
those having authority and responsibility for planning, directing and controlling the activities of the entity.
Accordingly, the Board of Directors (including Executive & Non-Executive Directors) of the Company has been
classified as Key Management Personnel of the Company. The transactions with Key Management Personnel are
as follows.
AS AT 31ST MARCH GROUP COMPANY
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Short Term Employee Benefits 64,230,110 79,910,680 240,000 160,000
Rent 11,520,000 11,520,000 – –
Total Compensation Paid to KMP 75,750,110 91,430,680 240,000 160,000
35.3.1 Transactions, Arrangements and Agreements Involving KMP and their Close Family Members (CFM)
CFM of a KMP are those family members who may be expected to infuence, or be influenced by, that KMP
in their dealings with the entity. They may include KMP’s domestic partner and children, children of the KMP
domestic partner and dependants of the KMP or the KMP domestic partner. CFM are related parties to the
Group. There were no transaction carried out with above parties.
The Board of Directors declared that no related party transactions falling within the scope of the code was
entered into by the Company during the financial year 2021/22 other than those disclosed in note 34 of the
financial statements above.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

DIRECTORS OF GROUP COMPANIES

Directors of Group Companies RF RAF RAO RDL KPL COCO CFL RLDL SWCL SWPL
Mrs. I.R.Rajiyah √ √ √ √ √ √ √ √ √ √
Dr. S.R.Rajiyah √ √ √ √ √ √ √ √ √ √
Mr.S.V.Rajiyah √ √ √ √ √ √ √ √ √ √
Mrs.J.J.B.A.Rajiyah - - √ - - - - √ √ -
Mr. S.Vasanthakumara √ √ √ √ √ √ √ √ √ √
Mr.P.Gunathilake - - √ √ √ √ √ √ √ √
Mr R F N Jayasooriya - - - - √ √ √ √ √ -
Mrs. S T R E Wijesuriya - √ - - - - - - - -
Mr T A P Peiris - - - - √ √ √ - - -
Mr. N. D. Nalliah - - - - - - √ -
Mr.T.K.Bandaranayake √ - - - - - - - - -
Mr.M.S.Dominic √ - - - - - - - - -
Mr.J.M.Swaminathan - - - - - - - - - -
Dr.J.A.S.Felix √ - - - - - - - - -
Mr.B. V. Selvanayagam - √ - - - - - - - -
Mr.D.S.Arangala - √ - - - - - - - -
Mr K Liyanagamage - √ - - - - - - - -

RF Renuka Foods PLC COCO Coco Lanka (Pvt) Ltd

RAF Renuka Agri Foods PLC CFL Ceylon Forestry (Pvt) Ltd
RAO Renuka Agri Organics Ltd RLDL Richlife Dairies Limited
RDL Renuka Developments (Private) Limited SWCL Shaw Wallace Ceylon Limited
KPL Kandy Plantations Limited SWPL Shaw Wallace Properties Limited

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100 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

36. CONTINGENT LIABILITIES

There were no significant contingent liabilities as at the reporting date which require adjustments or disclosures
in the Financial Statements other than the following;

Kandy Plantations Limited

Land Reform Commission has filed a case in the District Court of Attanagalla against the Trustees of John Leo
De Cross Trust for which Kandy Plantation is a respondent. In the opinion of the Lawyers, that there is a strong
likelihood of the outcome of this case being in favour of the trustees The John Leo De Croos Trust.

37. CAPITAL COMMITMENTS

There were no material commitments as at the reporting date that require disclosure in the Financial Statements.

38. EVENTS OCCURRING AFTER THE REPORTING PERIOD

There have been no material events occurring after the reporting period that require adjustments to and/or
disclosures in the Financial Statements.

Value Added Tax

In accordance with the Gazette No 2282/26 enacted on 31st May 2022, Value Added Tax (“VAT”) charged
based on the Value Added Tax Act No 14 of 2002 as amended by Act No 6 of 2005, has been increased from
8% to 12% effective from 1st June 2022.

DIVIDEND
The Board of Directors has recommended a payment of Rs. 0.41 per share payable for 2021/22. The Directors
are confident that the Company would meet the solvency test requirement under Section 57 of the Companies
Act of No. 7 of 2007 immediately after the proposed final dividend distribution.

39. COMPARATIVE INFORMATION

The previous year's figures have been re-arranged wherever necessary to confirm to the current year's
presentation and disclosure.

40. ECONOMIC CONDITIONS AND ITS IMPACT ON THE FINANCIAL STATEMENTS

The country’s current economic crisis presents the most significant threat in our immediate risk landscape. We
are aware of the inevitable short-term pressures that will arise from these conditions and have taken corrective
measures to minimize these impacts.
As at end March 2022 inflation rate was 18.7%. However, it has been escalated up to 55% at the end June 2022.
Exchange rates also observed a notable fluctuation after the balance sheet date and has not adjusted in the
current year financial statements since the conditions that gave rise to the gain/(loss) did not exist as of 31st
March 2022.
The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to increase the Standing Deposit Facility
Rate (SDFR) and the Standing Lending Facility Rate (SLFR). The depletion of foreign reserves has put restrictions
on imports and affected supplies.
The Group has taken the following measures to ensure it continuity of its operations as a going concern.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

INCREASE OF INTEREST RATE

Increase of Interest rates have impacted to the organization working capital. Finance cost for short term loans
have increased and has impacted to the net profits of the company.
The Group is in the process of taking steps to minimizing the above impact by obtaining advances from customers,
reduce debtors outstanding and negotiating credit terms with its suppliers.

FLUCTUATIONS IN FOREIGN CURRENCY

Rupee depreciation has impacted negatively for the imports of the Group while positively impact to the company
exports. As the organization is having favorable USD position, current exchange fluctuations has a minimum
impact to its profitability.
Over the medium-to-long term, we are confident that Sri Lanka’s economy will stabilize as a result of fiscal
consolidation measures, structural reforms and an IMF engagement. We are firm in our belief that Sri Lankan
businesses will demonstrate their characteristic resilience in responding to the challenges presented by the
economic fallout and will emerge as stronger, resilient and more agile organizations.
The Group held cash at bank and in hand of Rs. 476 million as at March 31, 2022 (Rs. 411 million respectively in
2021) which represents its maximum credit exposure on these assets.

41. GOING CONCERN OF SUBSIDIARIES

The Management has made an assessment on the Company’s and Group’s 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 my cast significant doubt upon the Company’s and
Group’s ability to continue as a going concern.

42. FINANCIAL RISK MANAGEMENT

Overview
The Group has exposure to the following risks arising from financial instrument:
(i) Market risk
(ii) Credit risk
(iii) Liquidity risk

The note presents information about the Group’s exposure to each of the above risk, the Group’s objectives, policies
and processes for measuring and managing risk, and the group’s management of capital.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group,
through its training and management standards and procedures, aims to develop a disciplined and constructive
control environment in which all employees understand their roles and obligations.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced
by the Group.

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102 Annual Report 2021/22
NOTES
NOTESTO
TOTHE
THEFINANCIAL
FINANCIALSTATEMENTS
STATEMENTS(Contd...)
(Contd...)

(i) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers
and investment securities. The Group considers financial instruments to be in default when the debtors are
unlikely to its obligations in full.

Exposure to Credit Risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was as follows:

Carrying Amount
2022 2021
Rs. Rs.
Trade and other Receivables 1,493.752,804 1,137,661,436
Amount due from Related Companies 10,396,913 11,011,495
1,504,149,717 1,148,672,931

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, Management also considers the demographics of the Group’s customer base, including the default
risk of the industry and country in which customers operate, as these factors may have an influence on credit
risk.

Each new customer is analyzed individually for creditworthiness before the Group’s standard payment and
delivery terms and conditions are offered. Customers that fail to meet the Group’s benchmark creditworthiness
may transact with the Group only on a prepayment basis.

Write – Off

The gross carrying amount of a financial asset it written off when the Group has no reasonable exceptions of
recovering a financial asset in its entirety or a portion thereof, based on historical experience of recoveries of
similar assets. For corporate customers, the Group individually makes an assessment with respect to the timing
and amount of write-off based on whether there is a reasonable exceptions of recovery due.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

2022 2021
Gross Loss Gross Loss Net
Net Amount
Amount Allowance Amount Allowance Amount
Rs. Rs. Rs. Rs. Rs. Rs.
Company
Not Credit Impaired - - - - - -
Credit Impaired - - - - - -
- - - - - -
Group
Not Credit Impaired 1,493,752,804 – 1,493,752,804 1,137,661,436 – 1,137,661,436
Credit Impaired 34,413,583 (34,413,583) – 12,369,169 (12,369,169) –
Due more than one year 1,528,166,387 (34,413,583) 1,493,752,804 1,148,672,931 (12,369,169) 1,137,661,436

Impairment Losses
The Group establishes an allowance for impairment that represents its estimate for incurred losses in respect of
trade & other receivable. The main components of this allowance are a specific component that relate to individually
significant exposures, and a collective loss component established for Groups of similar assets in respect of losses
that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of
payment statistics for similar financial assets.

The maximum exposure to credit risk for trade & other receivables at the reporting date by geographic region was as
follows.

Carrying Amount
2022 2021
Rs. Rs.
Domestic 1,078,631,322 505,077,639
Europe 243,192,282 360,381,633
Middle East 7,617,609 3,338,230
Asia 2,007,825 28,647,869
United States 162,303,765 204,108,782
Africa – 7,231,848
Australia – 28,875,435
1,493,752,803 1,137,661,436

Cash and Cash Equivalents

The Group held cash and cash equivalents of Rs. 476,255,688 at 31st March 2022 (Rs. 411,123,161 as at 31st March 2021)
and thees balances are with licensed Commercial Banks of Sri Lanka, which represents its maximum credit exposure
on these assets.

Respective credit ratings of banks which company cash balances held are as follows:
Hatton National Bank PLC – AA-(lka)
People's Bank- AA- (lka)
Commercial Bank of Ceylon PLC-AA-(lka)
National Development Bank PLC – A+(lka)
Seylan Bank PLC – A(lka)
Nations Trust Bank PLC – A(lka)

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104 Annual Report 2021/22
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

(ii) Liquidity Risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.

Carrying Total 0–12 More than

Amount Months 1 year
Rs. Rs. Rs. Rs.
As at 31st March 2022
Financial Liabilities (Non-Derivate)
Interest Bearing Borrowings Short Term 1,985,458,571 1,985,458,571 1,985,458,571 –
Interest Bearing Borrowings Long Term 551,419,097 670,825,644 244,421,160 426,404,484
Lease Obligation 162,206,252 406,125,835 46,609,258 359,516,577
Amount due to Related Companies 10,396,913 10,396,913 10,396,913 –
Trade and other Payables 1,432,457,078 1,432,457,078 1,432,457,078 –
Bank Overdrafts 149,656,077 149,656,077 149,656,077 –
4,291,593,988 4,654,920,118 3,868,999,057 785,921,061
As at 31st March 2021
Financial Liabilities (Non-Derivate)
Interest Bearing Borrowings Short Term 1,845,241,528 1,845,241,528 1,845,241,528 –
Interest Bearing Borrowings Long Term 439,984,107 553,112,256 291,134,856 261,977,400
Lease Obligation 127,726,503 299,329,708 42,166,008 257,163,700
Amount due to Related Companies 676,874 676,874 676,874 --
Trade and other Payables 885,905,026 885,905,026 885,905,026 –
Bank Overdrafts 129,498,543 129,498,543 129,498,543 –
3,429,032,581 3,713,763,935 3,194,622,835 519,141,100

The following table sets out a maturity analysis of interest bearing borrowings and lease liability.

GROUP
Interest Bearing Borrowings Lease Liability
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Less than one year 2,079,485,717 1,992,183,745 23,108,974 24,783,125
One to Two years 119,708,754 125,225,763 15,895,338 9,640,557
Two to Three years 108,333,600 105,124,102 15,895,338 6,797,665
Three to Four years 108,333,600 62,692,025 13,045,083 6,865,122
Four to Five years 121,015,996 – 8,695,338 6,843,840
More than five years – – 85,566,182 72,796,194
Total 2,536,877,667 2,285,225,635 162,206,253 127,726,503

The gross inflows /(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative
financial liabilities held for risk management purposes and are which are usually not closed out prior to contractual maturity. The
disclosure shows net cash flow amounts for derivatives that are net cash settled and are gross cash inflows and outflow amounts for
derivatives that have simultaneous gross cash settlements, e.g. forward exchange contracts.
It is not expected that the cash flows included in the maturity analysis would not occur significantly earlier or at significantly different
amounts.

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

(iii) Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimizing
the return.
a. Currency Risk
The risk that the fair value or future cash flows of financial instruments fluctuates due to changes in foreign
exchange rates.

The Group is exposed to currency risk on sales, purchases that are denominated in a currency other than Sri
Lankan Rupees (LKR). The currencies in which these transactions primarily are denominated is US Dollars.

Exposure to currency risk

The Company’s exposure to foreign currency risk was as follows based on notional amounts.

The Company and the Group involves with foreign exchange transactions and are exposed to foreign exchange
risk arising from various currency exposures, primarily with respect to the US Dollar. Foreign exchange risk
arises when future commercial transactions or recognized assets or liabilities are denominated in a currency
that is not the entity’s functional currency.

Carrying Amount
2022 2021
USD USD
Trade and other Payables (501,804) (479,965)
Trade and other Receivables 1,412,602 2,828,319
Cash and cash equivalets 1,209,324 654,391
Gross Statement of Financial Position Exposure 2,120,122 3,002,745

The following significant exchange rates were applicable during the year
Average Rate Reporting Date Spot Rate
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
US Dollars 208.28 188.79 293.87 199.83

Sensitivity Analysis
A strengthening of the LKR, as indicated below, against the US Dollar and at 31st March 2022 would have
increased/ (decreased) the equity and profit or loss by the amounts shown below. This analysis is based on
foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of
the reporting date. The analysis assumes that all other variables, in particular interest rates, remain constant

Strengthing Weakening
Profit or Loss Profit or Loss
Rs. Rs.
31st March 2022 93,456,050 (93,456,050)
USD (15% movement)
31st March 2021
USD (10% movement) 60,003,853 (60,003,853)

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106 Annual Report 2021/22
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

b. Interest rate risk

The Market risk is that the fair value or future cash flows of a financial instrument will fluctuate due to changes
in market interest rates at the reporting date, the Group’s and the Company’s interest-bearing financial
instruments were as follows;

Carrying Amount – Group Carrying Amount – Company

2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Fixed Rate Instruments
Financial Assets
Bank Deposits 476,255,688 411,123,161 6,023,672 10,139,941

Variable Rate Instruments

Financial Liabilities
Loans & Borrowings (2,536,877,667) (2,285,225,635) – –
Bank Overdrafts (149,656,077) (129,498,543) (84,560) (221,909)
(2,210,278,056) (2,003,601,017) 5,939,112 9,918,032

Cash flow sensitivity analysis for variable rate instruments

A recoverable possible change of 800 basis points in interest rates at the reporting date would have increase/
(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variable, in
particular foreign currency exchange rates,remain constant.

Group (Rs.) Company (Rs.)

2022 2021 2022 2021
Variable Rate Instruments 800 bp increase (2,762,848) (20,042,010) 7,424 99,180
800 bp decrease 2,762,848 20,042,010 (7,424) (99,180)

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 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

(iv) Capital management risk

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Capital consists of the ordinary shares, retained earnings
and non controlling interest of the Group. The Board of Directors monitors the return on capital as well as the
level of dividends to the ordinary shareholders.
The Group’s net debt to adjusted equity ratio at the reporting date was as follows
The following significant exchange rates were applicable during the year
Group Company
2022 2021 2022 2021
Rs. Rs. Rs. Rs.
Net Debt 2,848,739,997 2,542,450,681 – –
Total Equity 5,904,848,043 5,014,535,678 3,285,860,777 3,185,552,720
Net Debt to Equity Ratio 48.24% 50.70% 0.00% 0.00%

(v) Operational risk

Operational 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. This responsibility is supported by the development of overall Company
standards for the management of operational risk in the following areas:
. Requirements for appropriate segregation of duties, including the independent authorisation of transactions
. Requirements for the reconciliation and monitoring of transactions
. Documentation of controls and procedures
. Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and
procedures to address the risks identified
. Development of contingency plans
. Training and professional development

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108 Annual Report 2021/22
 43. FINANCIAL INSTRUMENTS

43.1 Group
Financial assets and liabilities by categories
Financial assets and liabilities in the tables below are split into categories in accordance with SLFRS 09.

As at 31 March Financials Assets by Categories Financial liabilities by categories

Measured at Amortised Cost Fair Value through OCI Total Measured at Amortised Cost
2022 2021 2022 2021 2022 2021 2022 2021
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Financial instruments in non-current assets/non-current liabilities
Non-current financial assets – – 1,140,675,512 559,429,195 1,140,675,512 559,429,195 – –

Interest-bearing loans and borrowings – – – – – – 457,391,905 293,041,890

Financial instruments in current assets/current

liabilities
Trade & other receivables/Payables 1,855,027,308 1,517,811,400 – – 1,855,027,308 1,517,811,400 1,432,457,078 885,905,026
Amounts due from/due to related parties 10,396,913 11,011,495 – – 10,396,913 11,011,495 36,900 676,874
Cash in hand and at Bank 476,255,688 411,123,161 – – 476,255,688 441,123,161 – –
Interest-bearing loans & borrowings – – – – – – 2,079,485,717 1,992,183,745
Bank overdraft – – – – – – 149,656,077 129,498,543
2,341,679,909 1,939,946,056 1,140,675,512 559,429,195 3,482,355,421 2,499,375,251 4,119,027,777 3,301,306,078

43.1.1 The fair value of loans and receivables is not significantly different from the value based on amortised cost methodology.
The management assessed that, cash and short-term investments, trade receivables, trade payables, bank overdrafts, Short term borrowings and other current financial
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

43.2 Company

Financial assets and liabilities by categories

Financial assets and liabilities in the tables below are split into categories in accordance with SLFRS 09.
As at 31 March Financials Assets by Categories Total Financial liabilities by categories
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

Measured at Amortised Cost Fair Value through P&L Measured at Amortised Cost
2022 2021 2022 2021 2022 2021 2022 2021
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Financial instruments in non-current assets/non-current
liabilities
Non-current financial assets – – – – – – – –
Interest-bearing loans and borrowings – – – – – – – –

Financial instruments in current assets/current liabilities

Trade & other receivables/Payables 331,701 319,204 – – 331,701 319,204 2,325,615 2,056,758
Amounts due from/due to related parties - - -
Cash in hand and at Bank 6,023,672 10,139,941 – – 6,023,672 10,139,941 84,560 221,909

Annual Report 2021/22

RENUKA FOODS PLC
Bank overdraft – – – –
6,355,373 10,459,145 – – 6,355,373 10,459,145 2,410,175 2,278,667

109
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

43.2.1 The fair value of loans and receivables is not significantly different from the value based on amortised cost methodology.

The management assessed that, cash and short-term investments, trade receivables, trade payables, bank overdrafts, Short term
borrowings and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of
these instruments.

43.3 Fair Value Hierarchy

43.3.1 Non financial assets – Group

Level 1 – Quoted (unadjusted) Market prices in active markets for identical assets or liabilities

Level 2 – Valuation technique for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable

Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

LEVEL 1 LEVEL 2 LEVEL 3

2022 2021 2022 2021 2022 2021
Asset measured at Fair value
Land & Buildings – – – – 3,037,751,040 2,897,140,165
Investment property – – – – 320,757,694 303,390,145
Investment in fair value
– – – – 1,140,675,512 559,429,195
through OCI

In determining the fair value, highest and best use of the property including the current condition of the properties,
future usability and associated redevelopment requirements have been considered. Also, the values have made reference
to market evidence of transaction prices for similar properties, with appropriate adjustments for size and location. The
appraised fair values are rounded within the range of values.

Investment in fair value through the OCI was based on the net assets value adjusted for the effect of the non-marketability
of the investments, by discounting the net assets value of the Company. The net assets value per share of the Company
was Rs. 11.90 as at 31st March 2022, prior to the discounting.

Discount rate 20% – 25%

43.3.2 Non financial assets – Company

Level 1 – Quoted (unadjusted) Market prices in active markets for identical assets or liabilities

Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable

Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

LEVEL 1 LEVEL 2 LEVEL 3

2022 2021 2022 2021 2022 2021
Asset measured at Fair
– – – – – –
value

In determining the fair value, highest and best use of the property including the current condition of the properties,
future usability and associated redevelopment requirements have been considered. Also, the values have made reference
to market evidence of transaction prices for similar properties, with appropriate adjustments for size and location. The
appraised fair values are rounded within the range of values.

RENUKA FOODS PLC

110 Annual Report 2021/22
NOTES TO THE FINANCIAL STATEMENTS (Contd...)

44. OPERATING SEGMENTS

Segment Information is presented in respect of the group’s operating segments. Operating Segments are
based on the Group’s management and Internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis.

Segment Capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than a period of one year.

The Group comprises the following main operating segments:

Agri Food Exports – Manufacture and export of agri based products.
Consumer Brands – Manufacture and distribution of consumer brands.

AGRI FOOD EXPORTS CONSUMER BRANDS GROUP TOTAL

For the year ended 31st March 2022 2021 2022 2021 2022 2021
Rs. Rs. Rs. Rs. Rs. Rs.
Revenue 5,884,887,814 4,821,661,163 5,442,854,652 4,275,763,132 11,327,742,466 9,097,424,295
Inter Segment Revenue (597,912,501) (335,245,660) (34,524,801) (94,739,739) (632,437,302) (429,985,399)
Segment Revenue 5,286,975,313 4,486,415,503 5,408,329,851 4,181,023,393 10,695,305,164 8,667,438,896
Cost of Sales (4,934,308,196) (4,360,525,499) (4,570,512,976) (3,610,038,890) (9,504,821,172) 7,970,564,389
Segment Revenue 528,450,802 58,033,548 61,851,699 281,374,837 590,302,501 339,408,385
Gross Profit 881,117,119 183,923,552 899,668,574 852,359,340 1,780,786,493 1,036,282,892

Other Income 12,613,476 22,367,727 139,160,600 39,447,480 151,774,076 61,815,207

Administrative Expenses (321,071,620) (308,910,885) (193,599,687) (220,377,272) (514,671,307) (529,288,157)
Change in Fair Value of Investment
– – 17,367,549 10,394,526 17,367,549 10,394,526
Properties
Selling & Distribution Expense 94,266,053 (85,686,340) (536,063,998) (431,173,486) (630,330,051) (516,859,826)
Other Expenses – (346,309,311) – – – (346,309,311)
Operating Profit 478,393,722 (534,615,257) 326,533,038 250,650,588 804,926,760 (283,964,669)

Finance Income 590,581,578 99,537,701 2,121,861 736,384 592,703,439 100,274,085

Finance Costs (489,609,661) (188,437,047) (37,867,133) (42,277,784) (527,476,794) (230,714,831)
Profit / (Loss) from discontinued
– – – – – –
operation
Profit share of Equity Accounted
– – – 39,699,539 – 39,699,539
Investees
Profit before Tax 579,365,639 (623,514,603) 290,787,766 248,808,727 870,153,405 (374,705,876)

Income Tax Expense (74,277,309) (19,227,352) (62,603,951) 9,075,737 (136,881,260) (10,151,615)

Profit/(Loss) 505,088,330 (642,741,955) 228,183,815 257,884,464 733,272,145 (384,857,491)

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Annual Report 2021/22
111
 NOTES TO THE FINANCIAL STATEMENTS (Contd...)

44. OPERATING SEGMENTS (CONTD.)

AGRI FOOD EXPORT CONSUMER BRANDS GROUP TOTAL

2022 2021 2022 2021 2022 2021

AS AT 31ST MARCH
Rs. Rs. Rs. Rs. Rs. Rs.
Property, Plant and Equipment 2,347,216,698 1,924,800,005 2,325,217,965 2,511,958,327 4,672,434,663 4,436,758,332
Right of use assets 116,145,490 111,921,925 8,387,543 19,058,806 124,533,033 130,980,731
Investment Property 1,733,289 1,844,238 319,024,405 301,545,907 320,757,694 303,390,145
Segment Property, Plant and Equipment,
2,465,095,477 2,038,566,168 2,652,629,913 2,832,563,040 5,117,725,390 4,871,129,208
Right of Use Assets & Investment Property

Biological Assets 80,065,095 78,542,795 40,874,947 30,896,979 120,940,042 109,439,774

Investment in FVOCI – – 1,140,675,512 559,429,195 1,140,675,512 559,429,195
Intangible Assets and Goodwilll 31,432,201 – 184,676,246 218,906,186 216,108,447 218,906,186
Segment Other Non Current Assets 111,497,296 78,542,795 1,366,226,705 809,232,360 1,477,724,001 887,775,155

Segment Total Non Current Assets 2,576,592,773 2,117,108,963 4,018,856,618 3,641,795,400 6,595,449,391 5,758,904,363

Inventories 1,220,335,269 906,865,208 691,838,712 440,220,970 1,912,173,981 1,347,086,178

Trade and Other Receivables 1,183,745,250 1,057,134,835 671,282,058 460,676,566 1,855,027,308 1,517,811,401
Current Tax Assets 4,086,246 4,075,760 – 10,188,323 4,086,246 14,264,083
Amounts Due from Subsidiary Companies 22,496 11,011,495 10,374,417 – 10,396,913 11,011,495
Amounts Due from Related Companies 4,698,806 – – – 4,698,806 –
Cash and Cash Equivalents 360,128,243 273,028,617 116,127,445 138,094,544 476,255,688 411,123,161
Segment Current Assets 2,773,016,310 2,252,115,915 1,489,622,632 1,049,180,403 4,262,638,942 3,301,296,318

Total Segment Assets 5,349,609,083 4,369,224,878 5,508,479,250 4,690,975,803 10,858,088,333 9,060,200,681

–
Deferred Tax Liability 162,553,476 155,578,475 307,747,888 304,582,019 470,301,364 460,160,494
Interest Bearing Borrowings 449,058,600 293,041,890 8,333,350 – 457,391,950 293,041,890
Lease Liabilities 138,423,978 94,004,740 673,301 8,938,638 139,097,279 102,943,378
Retirement Benefit Obligation 61,039,742 70,501,070 40,879,369 42,957,492 101,919,111 113,458,562
Segment Non Current Liabilities 811,075,796 613,126,175 357,633,908 356,478,149 1,168,709,704 969,604,324

Trade and Other Payables 762,773,107 392,067,040 669,683,968 493,837,986 1,432,457,075 885,905,026
Amounts Due to Related Companies 36,900 676,874 – – 36,900 676,874
Dividend Payable 5,353,584 5,381,610 6,754,408 11,441,693 12,107,992 16,823,303
Current Portion of Interest Bearing
1,647,129,690 1,654,883,745 432,356,027 337,300,000 2,079,485,717 1,992,183,745
Borrowings
Lease Liabilities 23,036,376 14,476,940 72,598 10,306,185 23,108,974 24,783,125
Current Tax Payable 75,806,619 18,218,191 11,871,232 7,971,872 87,677,851 26,190,063
Bank Overdraft 2,510,093 53,447,961 147,145,984 76,050,582 149,656,077 129,498,543
Segment Current Liabilities 2,516,646,369 2,139,152,361 1,267,884,217 936,908,318 3,784,530,586 3,076,060,679

Total Segment Liabilities 3,327,722,165 2,752,278,536 1,625,518,125 1,293,386,467 4,953,240,290 4,045,665,003

RENUKA FOODS PLC

112 Annual Report 2021/22
 LAND
EXTENT BUILDING ORIGINAL
LAND/ CLASSIFICATION CLASSIFICATION WDV AS AT
COMPANY LOCATION (PERCHES) COST OF
BUILDING COMPANY GROUP 31.03.2022
FREE HOLD/ NO OF BUILDING PURCHASE
LEASEHOLD BUILDINGS IN SQ .FT
Land 70.4 -- -- PPE PPE 21,428,000 21,120,000
Unagahadeniya
Building -- 1 968 PPE PPE -- 903,000
Renuka Agri Foods PLC
EPZ, Wathupitiwela Building -- 9 111,379 PPE PPE 158,452,264 618,657,314
Giriulla Building -- 2 8,031 PPE PPE -- 16,062,000

Renuka Developments Land 303.3 -- -- PPE PPE 22,702,880 75,825,000

Unagahadeniya
(Pvt) Ltd Building -- 7 17,789 PPE PPE 23,851,270 23,380,751
"Mahawatta Estate,
Indigolla Estate,
Building -- 4 10,598 PPE PPE 15,927,250 11,692,496
Kandy Plantation Ltd Kurundugolla Estate, at
Nalla Diuldeniya"
Matale Land 3,217.92 -- -- PPE PPE 57,900,000 72,601,194
Land 26,445 -- -- PPE PPE 127,482,760 180,448,000
Coco Lanka (Pvt) Ltd Cocowatta Estate, Puttalam
Building -- 5 6,447 PPE PPE 9,904,501
Export Processing Zone, Building -- 3 69,225 PPE PPE 74,073,652 262,973,228
Renuka Agri Organics Ltd
Wathipitiwala
REAL ESTATE PORTFOLIO

Karishue Place, Colombo -9 Land 4.7 -- -- PPE PPE 17,500,000 18,800,000

Danister De Silva Mawatha Land 40 -- -- PPE PPE 114,699,000 320,000,000
Danister De Silva Mawatha Building -- 1 66,828 PPE PPE 289,341,098 588,921,750
Shaw Wallance Ceylon Ltd Gamunu Mawatha,Ekala Land 59.8 -- -- PPE PPE 16,445,000 29,900,000
Gamunu Mawatha,Ekala Building -- 2 10,185 PPE PPE 36,555,000 47,585,241
Samagi Mw, Ekala Ja-Ela Land 214.75 -- -- PPE PPE 104,691,840 107,375,000
Samagi Mw, Ekala Ja-Ela Building -- 11 40,698 PPE PPE 9,721,060 31,531,739

Shaw Wallance Properties New Nuge Road, Land 215.59 IP PPE 95,000,000 394,793,573
(Pvt) Ltd Peliyagoda Building 3 62,714 IP PPE 119,980,471 182,970,652
Land 886 128,552,000 158,568,000
Richlife Dairies Ltd Private Road, Wadduwa
Building 6 63,986 PPE PPE 194,843,169 184,495,295

Annual Report 2021/22

RENUKA FOODS PLC
113
 FIVE YEAR SUMMARY
2022 2021 2020 2019 2018
Year Ended 31st March
Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000
a) Summery of Operation
Revenue 10,695,305 8,674,439 7,815,364 8,179,476 7,551,205
Gross Profit 1,780,786 1,036,283 1,838,558 1,923,848 ,396,198
Profit / (Loss) before finance cost and tax 804,926 (283,965) 416,786 664,101 146,735
Profit before taxation 870,153 (355,567) 270,716 519,907 43,066
Taxation (136,881) (10,152) 4,989 (207,615) (148,436)
Loss from discontinued operation – – (36,850) (1,469) –
Profit after tax 733,272 (384,857) 238,855 313,760 (105,370)
Profit / (Loss) attributable to equity holders of 554,351 (184,603) 136,285 181,840 (92,847)
the company
b) Summery of Financial Position
Capital and reserves
Stated Capital 2,241,842 2,241,842 2,241,842 2,241,842 2,241,842
Capital reserve 737,310 755,457 709,987 408,802 337,290
Retained earnings 1,616,234 1,229,183 1,660,163 1,609,094 1,068,030
Shareholders' Fund 4,595,386 4,226,483 4,611,992 4,259,738 3,647,163
Minority interest 1,309,461 788,052 1,194,362 1,047,639 1,487,420
Total Equity 5,904,848 5,014,535 5,806,355 5,307,377 5,134,593

Liabilities
Non-Current Liabilities 1,168,710 969,604 1,233,707 834,070 817,385
Current Liabilities 3,784,531 3,076,061 2,422,688 2,672,297 2,491,676
Total Liabilities 4,953,240 4,045,665 3,656,395 3,506,367 3,309,061

Total Equity and Liabilities 10,858,088 9,060,200 9,462,749 8,813,744 8,443,654

Assets
Property,plant and equipment 4,672,435 4,436,758 4,541,831 3,895,851 3,691,354
Investment properties 320,758 303,390 292,996 276,660 276,660
Investments 1,140,676 559,429 1,273,538 1,460,134 1,252,533
Other non-Current assets 461,580 459,327 572,116 455,544 468,261
Current assets 4,262,639 3,301,296 2,782,268 2,725,555 2,754,846
Total Assets 10,858,088 9,060,200 9,462,749 8,813,744 8,443,654

c) Key Indicators
Earnings per share (Rs.) 4.52 (1.50) 1.11 1.48 -0.76
Net profit margin (%) 6.86% -4.26% 3.05% 3.83% -1.40%
Net assets value per share (Rs.) 48.11 34.43 37.57 34.71 29.72
Dividends per share (Rs.) - 0.35 0.35 – –
Dividends payout (Rs.) - -23.33% 31.53% – –
Dividend cover (times) - (4.28) 3.17 – –
Interest cover (times) 4.4 (1.20) 2.01 4.61 1.42
Current ratio (times) 1.13 1.07 1.15 1.01 1.08
Gearing ratio (%) 30.50% 32.50% 18.20% 24.81% 26.76%
Return on equity (%) 9.38 (3.68) 1.70% 1.92% -2.05%

RENUKA FOODS PLC

114 Annual Report 2021/22
SHAREHOLDER AND INVESTOR
INFORMATION
SHARE INFORMATION
2022 2021
Voting Non Voting Voting Non Voting
Total No of Shareholders 3,839 772 4,032 768
Total No of Shares 117,960,106 4,773,346 117,960,106 4,773,346

PUBLIC SHARE HOLDING

The percentage of Shares held by the Public 2022 2021
Voting 25.99% 26.75%
Non Voting 68.89% 68.89%

SHARE TRADING INFORMATION – VOTING

31st March 2022 31st March 2021
No of No of
No of Shares Held No of Shares % No of Shares %
Shareholders Shareholders
1–1,000 3,133 818,586 0.69% 3,144 861,344 0.73%
1,001–10,000 529 1,944,144 1.65% 675 2,584,608 2.19%
10,001–100,000 141 4,220,597 3.58% 181 4,809,997 4.07%
100,001–1,000,000 29 7,369,141 6.25% 25 6,096,519 5.17%
1,000,001 & Over 7 103,607,638 87.83% 7 103,607,638 87.84%
Total 3,839 117,960,106 100.00% 4,032 117,960,106 100.00%

31st March 2022 31st March 2021

No of Shares Held No of No of Shares % No of No of Shares %
Shareholders Shareholders
Individuals 3,685 22,984,057 19.48% 3,872 23,119,818 19.60%
Institutions 154 94,976,049 80.52% 160 94,840,288 80.40%
Total 3,839 117,960,106 100.00% 4,032 117,960,106 100.00%

31st March 2022 31st March 2021

No of Shares Held No of No of Shares % No of No of Shares %
Shareholders Shareholders
Resident 3,824 89,493,780 75.87% 4,011 88,404,684 74.94%
Non Resident 15 28,466,326 24.13% 21 29,555,422 25.06%
Total 3,839 117,960,106 100.00% 4,032 117,960,106 100.00%

31st March 2022 31st March 2021

No of Shares Held No of No of Shares % No of No of Shares %
Shareholders Shareholders
Renuka Foods PLC & Affiliate 1 59,358,578 50.32% 1 59,358,578 50.32%
Companies
Directors and Spouses 6 13,145,735 11.14% 6 12,245,735 10.38%
Holding of 10% or more 1 14,803,147 12.55% 1 14,803,147 12.55%
Public 3,831 30,652,646 25.99% 4,024 31,552,646 26.75%
Total 3,839 117,960,106 100.00% 4,032 117,960,106 100.00%

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Annual Report 2021/22
115
 SHAREHOLDER AND INVESTOR INFORMATION (Contd...)

SHARE TRADING INFORMATION – NON VOTING

31st March 2022 31st March 2021
No of No of No of
No of Shares Held % No of Shares %
Shareholders Shares Shareholders
1–1,000 531 122,895 2.57% 513 120,002 2.51%
1,001–10,000 188 748,936 15.69% 202 756,331 15.85%
10,001–100,000 44 27.31% 44 1,300,577 27.25%
1,303,660
100,001–1,000,000 9 54.42% 9 2,596,436 54.40%
2,597,855
1,000,001 & Over – – - – – -
Total 772 4,773,346 100.00% 768 4,773,346 100.00%

31st March 2022 31st March 2021

No of Shares Held No of No of % No of No of Shares %
Shareholders Shares Shareholders
Individuals 717 2,946,587 61.73% 725 3,796,260 79.53%
Institutions 55 1,826,759 38.27% 43 977,086 20.47%
Total 772 4,773,346 100.00% 768 4,773,346 100.00%

31st March 2022 31st March 2021

No of Shares Held No of No of % No of No of Shares %
Shareholders Shares Shareholders
Resident 758 4,250,321 89.04% 756 4,277,665 89.61%
Non Resident 14 523,025 10.96% 12 495,681 10.39%
Total 772 4,773,346 100.00% 768 4,773,346 100.00%

31st March 2022 31st March 2021

No of Shares Held No of No of % No of No of Shares %
Shareholders Shares Shareholders
Renuka Foods PLC & Affiliate Companies – – – – – –
Directors and Spouses 1 762,877 15.98% 2 762,877 15.98%
Holding of 10% or more 1 722,284 15.13% 2 722,284 15.13%
Public 770 3,288,185 68.89% 764 3,288,185 68.89%
Total 772 4,773346 100.00% 768 4,773,346 100.00%

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116 Annual Report 2021/22
SHAREHOLDER AND INVESTOR INFORMATION (Contd...)

SHARE INFORMATION
2022 2021
Voting Non Voting Voting Non Voting
Highest 27.20 20.90 21.00 16.00
Lowest 12.10 11.20 12.20 7.70
As at 31st March 13.40 11.60 12.70 10.40

SHARE INFORMATION
Market Capitalization 2022 2021
Voting Non Voting Voting Non Voting
As at 31st March (Rs) 1,636,036,234 1,547,736,144
Float Adjusted Market Capitalization (Rs) 448,888,402 434,938,894
No.of Trades 9,662 3,993 7,594 2,280
No.of Shares Traded 17,762,926 5,070,759 11,311,291 2,522,630
Value of Shares Traded (Rs) 319,345,649 70,719,892 192,932,431 32,578,532

Option the Listed Entity complies with the Minimum Public Holding requirement

The Company complied with option 5 of the listing rules 7.13.1 (a) – which requires a minimum public Holding of 20% for
a company having a float adjusted market capitalization of less than Rs.2.5Bn.

The company has over 20% public shareholding and over 500 public shareholders meeting the minimum thresholds
for compliance on minimum public holding, under option 5 as per the directive issued in terms of section 13(c) and
13(cc) of the Securities & Exchange Commission of Sri Lanka Act No.36 of 1987(as amended).

RENUKA FOODS PLC

Annual Report 2021/22
117
 RENUKA FOODS PLC –
TOP 20 MAJOR SHAREHOLDERS
Voting as at Voting as at
31.03.2022 31.03.2021
No. Name
No. of No. of
% %
Shares Shares
1 Renuka Agro Exports Ltd 59,358,578 50.32% 59,358,578 50.32%
2 C.J. Patel & Company Limited 14,803,147 12.55% 14,803,147 12.55%
3 Eagle View Management Limited 13,385,159 11.35% 13,385,159 11.35%
4 Dr. S.R Rajiyah & Mrs I.r Rajiyah (Jt) 11,798,563 10.00% 11,798,563 10.00%
5 Mr. K.C Vignarajah 1,592,061 1.35% 1,592,061 1.35%
6 Mrs. S. Vignarajah 1,467,068 1.24% 1,467,068 1.24%
7 Renuka Hotels Plc 1,203,062 1.02% 1,203,062 1.02%
8 Mr. S.V. Rajiyah 940,000 0.80% – –
9 Mercantile Fortunes (Private) Limited 662,302 0.56% – –
10 Mrs. N. Muljie 480,208 0.41% 480,208 0.41%
11 People's Leasing & Finance Plc/Mr D.m.p Disanayake 460,091 0.39% 608,375 0.52%
12 United Motors Lanka Plc 401,253 0.34% 457,001 0.39%
13 Mrs. J.J.B.A Rajiyah 4 0 0,0 0 0 0.34% 400,000 0.34%
14 Unimo Enterprises Ltd 359,999 0.31% 388,211 0.33%
15 Hatton National Bank Plc/Mushtaq Mohamed Fuad 301,434 0.26% – –
16 Hatton National Bank Plc/ A. P. L. Fernando 300,000 0.25% 238,052 0.20%
17 Renuka Consultants & Services Limited. 280,000 0.24% 280,000 0.24%
18 Mr. N.A. Kalupathirana 235,190 0.20% – –
19 Tranz Dominion L.l.c 2 2 0,0 0 0 0.19% 220,000 0.19%
20 Crescent Launderers And Dry Cleaners Pvt Limited 195,428 0.17% 195,428 0.17%
108,843,543 92.29% 106,874,913 90.62%

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118 Annual Report 2021/22
RENUKA FOODS PLC – TOP 20 MAJOR SHAREHOLDERS (Contd...)

Non-Voting as at Non-Voting as at
31.03.2022 31.03.2021
No. Name
No. of No. of
% %
Shares Shares
1 Renuka Group Limited 762,583 15.98% 762,579 15.98%
2 Mr. K.C Vignarajah 722,384 15.13% 722,284 15.13%
3 Best Real Invest Co Services (Private) Limited 295,086 6.18% 295,086 6.18%
4 Amana Bank Plc/Mr. Abdul Majeed Mohammadu Risvi 172,328 3.61% 172,328 3.61%
5 Mr. M.D.S.Goonathilleke 146,315 3.07% – –
6 Mrs. S.Vignarajah 141,109 2.96% 141,109 2.96%
7 Miss. N Harnam & Mrs. J.k.P Singh (Jt) 138,450 2.90% 138,450 2.90%
8 Tranz Dominion,L.I.C. 115,000 2.41% 110,000 2.30%
9 Mrs. J.K.P Singh 104,600 2.19% 104,600 2.19%
10 Hatton National Bank PLC/Sivalingam Gobinath 93,595 1.96% – –
11 Dialog Finance Plc/E.M.S.T. Ekanayake 85,000 1.78% – –
12 Mr. V.T.H. Vitharana 84,822 1.78% – –
13 Mr. R. Gautam 80,500 1.69% 65,000 1.36%
14 Mr. Y.H Abdulhussein 76,498 1.60% 76,498 1.60%
15 Mr. N.V. Chaminda 61,800 1.29% – –
16 Mr. S. U. Abeysooriya & T.B.M De Silva (JT) 52,074 1.09% 52,000 1.09%
17 Askold (Private) Limited 51,230 1.07% 51,230 1.07%
18 Mrs. S. Umeshwary 50,922 1.07% 50,922 1.07%
19 Deutsche Bank Ag Singapore A/C 2 (Dcs Clt Acc For 42,175 0.88% – –
Deutsche Bank Ag Singapore- Pwm Wm Client)
20 People's Leasing & Finance PLC/Mr. P.A. Premajayantha 40,396 0.85% – –
3,316,867 69.49% 2,742,086 57%

RENUKA FOODS PLC

Annual Report 2021/22
119
 NOTICE OF MEETING
Notice is hereby given that the 32nd Annual General Meeting of the Company will be held virtually on Wednesday,
7th September 2022 at 4.15p.m. for the following purposes :-

1. To receive and consider the Report of the Directors and the Statement of the Audited Financial Statements for
the year ended 31st March 2022 with the Report of the Auditors thereon.

2. To re-elect Dr J.A.S.Felix as a Director who retires by rotation in terms of Article 28 (1).

3. To re-appoint Dr. S.R. Rajiyah who is 72 years of age, as a director in terms of Section 211 of the Companies
Act No. 7 of 2007 and it is specifically declared that the age limit of 70 years referred to in Section 210 of the
Companies Act No. 7 of 2007 shall not apply to the said Dr. S.R. Rajiyah

4. To re-appoint Mrs. I.R. Rajiyah who is 71 years of age, as a director in terms of Section 211 of the Companies
Act No. 7 of 2007 and it is specifically declared that the age limit of 70 years referred to in Section 210 of the
Companies Act No. 7 of 2007 shall not apply to the said Mrs. I.R. Rajiyah

5. To re-appoint Mr. T.K. Bandaranayake who is 79 years of age, as a director in terms of Section 211 of the
Companies Act No. 7 of 2007 and it is specifically declared that the age limit of 70 years referred to in Section
210 of the Companies Act No. 7 of 2007 shall not apply to the said Mr. T.K. Bandaranayake.

6. To declare a dividend of Rs.0.41 per Share.

7. To authorise the Directors to determine the contribution to charity.

8. To re-appoint M/s KPMG, Chartered Accountants as the Auditors and authorise the Directors to determine
their remuneration

By Order of the Board,

Sgd.
Renuka Enterprises (Pvt) Ltd
Company Secretaries
12th August 2022

Note:-

(i) A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy to attend and vote
instead of the member, such proxy need not be a member.

(ii) A Form of Proxy is enclosed with this Annual Report.

(iii) The completed Form of Proxy should be deposited at the Registered Office of the Company at “Renuka
House”, No. 69, Sri Jinaratana Road, Colombo 2, on or before 4.15 p.m. on 05th September 2022, being not
less than 48 hours before the time appointed for the holding of the Meeting.

RENUKA FOODS PLC

120 Annual Report 2021/22
120
FORM OF PROXY
I / We ................................................................................................................................................................................. 0f

…………………………………………………………………………………………...............................................................……. being a member/

members of Renuka Foods PLC, hereby appoint; ..........................................................................................................…….

………………………………………….…………….................................................................... (NIC No. …….………………………………………..)

of ……………………........................................................................................................................................ Or failing her/him

Dr. S.R. Rajiyah or failing him

Mrs. I.R. Rajiyah or failing her
Mr. S.V. Rajiyah or failing him
Mr. V. Sanmugam or failing him
Mr. T.K. Bandaranayake or failing him
Mr. M.S. Dominic or failing him
Dr. J.A.S. Felix or failing him

as my/ our proxy to represent me / us and to speak and to vote on my / our behalf at the Annual General Meeting of
the Company to be held on the 07th day of September 2022 and at any adjournment thereof and at every poll which
may be taken in consequence thereof.
For Against
1. To receive and consider the Report of the Directors and the
Statement of the Audited Financial Statements for the year ended
31st March 2022 with the Report of the Auditors thereon.

2. To re-elect Dr. J.A.S.Felix as a Director

3. To re-appoint Dr. S.R. Rajiyah as a Director

4. To re-appoint Mrs. I.R. Rajiyah as a Director

5. To re-appoint Mr. T.K. Bandaranayake as a Director

6. To declare a dividend of Rs. 0.41 per Share.

7. To authorise the Directors to determine the contribution to charity.

8. To re-appoint M/s KPMG, Chartered Accountants as Auditors

to the Company and authorise the Directors to determine their
remuneration.

Dated this …………………………. day of ……………………………. 2022.

…………………………….
Signature of Shareholder

Note:
(a) A proxy need not be a member of the Company.
(b) Instructions regarding completion appear overleaf.

RENUKA FOODS PLC

Annual Report 2021/22
121
 INSTRUCTIONS AS TO COMPLETION OF THE FORM OF PROXY

1. To be valid, the completed Form of Proxy should be deposited at

the Registered Office of the Company, at “Renuka House”, No. 69, Sri
Jinaratana Road, Colombo 2, on or before 4.15 p.m. on 05th September
2022 being not less than 48 hours before the time appointed for the
holding of the Meeting.

2. In perfecting the Form of Proxy, please ensure that all the details are
legible.

3. Please indicate with an ‘X’ in the space provided how your proxy to vote
on each resolution. If no indication is given the proxy, in his discretion,
will vote, as he thinks fit.

4. In the case of a Company / Corporation, the proxy must be under

its Common Seal which should be affixed and attested in the manner
prescribed by its Articles of Association.

5. In the case of proxy signed by the Attorney, the Power of Attorney must
be deposited at the Registered Office at “Renuka House”, No. 69, Sri
Jinaratana Road, Colombo 2, for registration.

RENUKA FOODS PLC

122 Annual Report 2021/22
CORPORATE INFORMATION
Name of the Company Ultimate Parent Company
Renuka Foods PLC Renuka Holding PLC

Registration No. Registered Office

PQ 216
“Renuka House”
69 Sri Jinaratana Road,
Legal Form
Colombo 2, Sri Lanka.
Quoted Public Company With Limited Liability
Telephone: 00941–11–2314750–5
Fax: 00941 11–2445549
Main Subsidiaries
Email: [email protected]
Renuka Agri Foods PLC
Renuka Agri Organics Ltd
Postal Address
Richlife Dairies Ltd
P.O. Box 1403, Colombo, Sri Lanka.
Shaw Wallace Ceylon Ltd
Stock Exchange Listing
Sub Subsidiaries
Colombo Stock Exchange
Renuka Developments (Pvt) Ltd
Ceylon Forestry (Pvt) Ltd
Audit Committee
Coco Lanka (Pvt) Ltd
Mr. T.K.Bandaranayake – Chairman
Kandy Plantations Ltd
Dr. J.A.S.Felix
Shaw Wallace Properties (Pvt) Ltd
Mr. M.S.Dominic
Activity
Related Party Transaction Review Committee*
It is the holding company for subsidiaries engaged
in the business of Agri Food and Consumer Brands. Mr. T.K.Bandaranayake – Chairman
Dr. J.M.Swaminathan
Board Of Directors – Company Mr. M.S.Dominic
Dr. S.R.Rajiyah – Chairman
Mrs. I.R.Rajiyah Remuneration Committee*
Mr. S.V.Rajiyah Mr. M.S.Dominic – Chairman
Mr. T.K.Bandaranayake Mr. T.K.Bandaranayake
Mr. V.Sanmugam Dr. J.M.Swaminathan
Dr. J.A.S.Felix
Mr. M.S.Dominic Nomination Committee*
Mr M.S.Dominic – Chairman
Company Secretaries Mr. T.K.Bandaranayake
Renuka Enterprises (Pvt) Ltd Mrs. J.J.B.A.Rajiyah
No.69 Sri Jinaratana Road,
Colombo 2 Auditors
KPMG Chartered Accountants
Registrar
S S P Corporate Services (Pvt) Ltd
546 Galle Road, Legal Consultant
Colombo 3. Nithya Partners- Attorneys at Law

*Related Party Transaction Review Committee, Bankers

Remuneration Committee and Nomination Committee Commercial Bank of Ceylon PLC
are represented by Parent Company Directors. Habib Bank Limited
Immediate Parent Company Hatton National Bank PLC
Renuka Agro Exports (Pvt) Ltd National Development Bank PLC
Nations Trust Bank PLC
Sampath Bank PLC
Seylan Bank PLC

RENUKA FOODS PLC

Annual Report 2021/22
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 RENUKA FOODS PLC
124 Annual Report 2021/22