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TAL LANKAHOTELS PLCAnnual Report 2020/21

TAL LANKA HOTELS PLCCompany Registration No. PQ 183

Annual Report 2020 / 2021

CONTENTS

Page

Notice of Meeting 02

Corporate Information 04

Review of the Board of Directors 05

Annual Report of the Board of Directors 08

Report on Corporate Governance 11

Report on Audit Committee 14

Report on Related Party Transactions Committee 16

Statement of the Directors' Responsibilities 18

Independent Auditor's Report 19

Statement of Profit or Loss and Other Comprehensive Income 25

Statement of Financial Position 26

Statement of Changes in Equity 27

Statement of Cash Flow 28

Summary of Accounting Policies 29

Notes to the Financial Statements 49

Shareholder Information 78

Six Years Financial Summary & Key Indicators 82

Form of Proxy 85

Registration of Shareholders details (Annexure I) 87

stNotice is hereby given that the Forty First (41 )

Annual General Meeting (“AGM”) of TAL Lanka

Hotels PLC (“Company”) will be held online via a thvirtual platform on Tuesday, 07 September 2021

at 10.00 am and the business to be brought before

the meeting will be as follows:

1. To receive and consider the Annual Report of

the Board of directors and the Statement of stAudited Accounts for the year ended 31 March

2021 with the Report of the Auditors thereon.

2. To propose the following resolution as an

ordinary resolution for the re-appointment of Mr.

Tilak De Zoysa as a director, who has reached

the age of seventy four (74) years.

“IT IS HEREBY RESOLVED that the age limit

referred to in section 210 of the Companies Act

No.07 of 2007 shall not apply to Mr. Tilak De

Zoysa who has reached the age of seventy four

(74) years prior to this AGM and that he be

reappointed as a Director of the Company.

3. To re-elect Mr. B.K. Chaudhary who retires by

rotation as a Director at the AGM in terms of

Article 86 of the Articles of Association of the

Company.

4. To re-elect Mr. V. Govindasamy who retires by

rotation as a Director at the AGM in terms of

Article 86 of the Articles of Association of the

Company.

5. To re-elect Mr. P. Verma who retires by rotation

as a Director, in terms of Article 86 of the Articles

of Association of the Company.

6. To propose the following resolution as an

ordinary resolution:

“IT IS HEREBY RESOLVED THAT KPMG

Chartered Accountants be and are hereby

deemed to be re-appointed as the auditors of

the Company to hold office from the conclusion

of this meeting until the conclusion of the next

AGM to audit the financial statements of the

Company and the Directors of the Company be

and are hereby authorized to fix their

remuneration as the auditors of the Company,

for the aforesaid period.”

7. Any other business.

By Order of the Board,CORPORATE SERVICES (PRIVATE) LIMITEDSecretariesTAL LANKA HOTELS PLCColombo, on this 16th day of August, 2021.

Note:- Any shareholder entitled to attend and vote

at this meeting is entitled to appoint a proxy

to attend and vote / speak in his / her stead

and a form of proxy is sent herewith for this

purpose.

Meeting Guidelines:-

A) The meeting is to be held in line with the

guidelines given by the Colombo Stock

Exchange and the health authorities and as per

the applicable laws:

B) In the interest of protecting public health and

facilitating social distancing in line with the

guidelines issued by the Ministry of Health,

Nutrition and Indigenous Medicine, the Annual

General Meeting will be held in the manner set

out below:

(I) The shareholders who wish to participate at

the meeting will be able to join the meeting

through audio or audio and visual means via

Zoom. These measures have been adopted

to observe social distancing regulations /

requirements to mitigate the danger of

spread of the virus.

(ii) In order for us to forward the access

information necessary for participation at the

meeting, which shall include the meeting

identification number, access password, and

access telephone number, please forward

the duly completed registration form

including your e-mail address and contact

telephone number to the registered address

of the Company not less than 48 hours

before the time appointed for the holding of

NOTICE OF MEETING

TAL LANKA HOTELS PLC

02 TAL LANKA HOTELS PLC ANNUAL REPORT 2020 - 2021

the meeting so that the login information

could be forwarded to the e-mail addresses

so provided. (iii) If the Company is unable to post this Notice

due to any situation beyond its control, then,

this Notice will be published in one issue of

a daily newspaper in the Sinhala, Tamil and

English languages and if the circumstances

permit, in one issue of the Gazette. The

Annual Report, Notice of Meeting, Form of

Proxy and Registration Form will also be

published on the website of the Colombo

Stock Exchange

(https://www.cse.lk/pages/companyprofile/

company-profile.component.

html?symbol=TAJ.N0000) and the website

of the Company

(https://www.tajhotels.com/en-in/taj/taj

samudra-colombo/).

(iv) Proxy forms are forwarded to the

shareholders together with the Notice of

Meeting and Registration form. Proxy forms

have been uploaded to the Company's

website (https://www.tajhotels.com/en-in/

taj/tajsamudra-colombo/meetings-and

events/) and should be duly completed as

per the instructions given therein and sent to

the registered address of the Company or

e-mailed to [email protected] or

[email protected]

not less than 48 hours before the time

appointed for the holding of the meeting and

the proxy so appointed shall participate at

the meeting through audio or audio visual

means only.

(v) The shareholders who are unable to

participate at the Annual General Meeting

via Zoom could send their queries, if any, to

email address [email protected]

or [email protected]

at any time before the meeting time and the

responses to the same will be included in

the minutes of the meeting.

(vi) Voting in respect of the items in specified in

the agenda to be passed will be registered

by using the audio or audio and visual

means (Zoom) or a designated ancillary

online application. All of such procedures

will be explained to the shareholders prior to

the commencement of the meeting.

(vii) For any questions please contact

Ms. Deepa Perera (Confidential Secretary)

on (071 535 7635) during office hours.

NOTICE OF MEETING (Contd)


03TAL LANKA HOTELS PLC ANNUAL REPORT 2020 - 2021

NAME OF THE COMPANY TAL LANKA HOTELS PLC - PQ 183

A listed company with limited liabilityth Incorporated in Sri Lanka on 14 June 1980

BOARD OF DIRECTORS Mr. G. Sanjeevi - Chairman

Mr. B.K. Chaudhary

Mr. R.K. Chaudhary

Mr. V. Govindasamy

Mr. T. De Zoysa

Mr. R. De Mel

Mr. P. Verma

Mr. P.Sampat

Mr. P. Sen Gupta (appointed with effect from 14th July 2020)

COMPANY SECRETARY Corporate Services (Private) Limited

216, De Saram Place, Colombo 10.

REGISTRARS Business Intelligence (Private) Limited

No. 08, Tickell Road, Colombo 08.

AUDITORS Messrs KPMG Sri Lanka.

Chartered Accountants

32 A, Sir Mohamed Macan Markar Mawatha,

Colombo 04.

BANKERS Hatton National Bank

City Office, Colombo 01. Standard Chartered Bank

37, York Street, Colombo 01.

Nations Trust Bank

No. 242, Union Place, Colombo 02.

Commercial Bank

No. 240, Panchikawatta Road, Colombo 10.

LAWYERS Messrs F J & G De Saram

216, De Saram Place, Colombo 10.

REGISTERED OFFICE 25, Galle Face Centre Road, Colombo 03.

Phone: 0094 112446622

Website: www.tajhotels.com

HOTEL MANAGER TAL Hotels and Resorts Ltd,

2001, Central Plaza,

18, Harbour Road,

Wanchai, Hong Kong.


CORPORATE INFORMATION


REVIEW OF THE BOARD OF DIRECTORS

On behalf of the Board of Directors, I am pleased to

present the Annual Report of TAL Lanka Hotels Plc

for the financial year ended March 31, 2021.

ECONOMIC OUTLOOK

Economic Overview

The globe encountered its deepest crisis on record in

March 2020 with the outbreak of COVID-19

pandemic. Strict measures were taken by countries

to curb the spread of the pandemic, due to which both

domestic and international travel came to a standstill.

Foreign tourist arrivals did not exist in the first 3

quarters thus denting the already-battered tourism

sector, a drop-in demand for readymade garments

was also seen, which took a toll on the wider

economy as these being the two largest sources of

foreign exchange in Srilanka.

The manufacturing and services PMIs declined to

fresh record lows in April 2020 as foreign and

domestic demand evaporated. Debt-repayment risks

will remain high in 2020-24 as a result of projected

weak government revenue growth.

Sri Lanka's annual GDP - is expected to grow by 3.4

to 6.0% in 2021.

Rupee depreciation - The Sri Lankan rupee

depreciated against the US dollar by 7.6% to an

indicative rate of LKR 200 as of April 2021.

Inflation - Headline inflation as measured by the

National Consumer Price Index increased to 5.1% in

March 2021.

INDUSTRY PERFORMANCE

Hotels in Colombo recorded an average occupancy

of 4.7% in 2020-21 with an ADR of USD 78.

Stimulating tourism recovery has become a timely

requisite for the destinations while implementing

measures to limit the spread of the pandemic.

The city hotels increased their dependency on the

local market through renewed offering for local

weddings, increased focus on food and beverage

including home deliveries. Non-residential

conferences were attracted through improved

packages, however due to the limited local demand

as comparted to the supply there was noticeable

reduction in the revenue generated from these

avenues.

Tourist arrivals

Following the long pandemic induced closure, since

March 2020, the total tourist arrivals recorded to Sri

Lanka in 2020 was 507,704. This was a decline of

73.5% over last year when 1,913,702 of tourists has

visited the country during the same period and about

2,000,000 tourists in the year before. The figures

reflect the unprecedent health, social and economic

crisis caused by the outbreak of the COVID-19

pandemic. The largest source markets recorded for

the month of March was Kazakhstan, followed by the

Germany, and United Kingdom into the island.

Being the third highest source of revenue with a direct

contribution of 4.3% to GDP (2019-20) tourism can

be identified as a fastest growing sector for Sri Lanka

with lot of potential and positive spillovers. In an effort

to revitalize this crucial industry, Sri Lanka, under the

“Bio Bubble” concept has reopened the country for

tourism while complying to stringent health protocols.

As the first step in resuming tourism, Sri Lanka

Tourism Development Authority together with

Ministry of Tourism, issued the first Operational

Guidelines for the tourism industry in June 2020, in

line with the guidance received from the Ministry of

Health (MoH) and the World Health Organization

(WHO) and subsequent updates have been

introduced.

In an effort to reopen the countries for tourism to

sustain their economies, countries have come up

with various innovative methods and exclusive

partnerships like “Travel Bubbles or Corona

Corridors”. Estonia, Latvia and Lithuania being the



REVIEW OF THE BOARD OF DIRECTORS (Contd)

first trilateral partnership for tourism, have set a

classic example to other countries to reinitiate

tourism which was a flourishing industry prior to the

pandemic.

COMPANY PERFORMANCE

Due to the impact of ongoing COVID 19 pandemic,

the Company's revenues decreased by 80% from

LKR 2,467million in the previous year to LKR 502

million in the current year. The gross margin

decreased by LKR 1037 million as compared to

previous year.

The loss Before Tax for the year was LKR 1062

million in the current year as compared to loss of LKR

232 million in the previous year. The Company's net

Finance cost decreased by LKR 89 million mainly

due to decrease in Foreign Exchange Loss as

compared to the previous year.

CAPITAL DEPLOYMENT

During 2020-21 no any renovation work was

undertaken by the company due to the impact of

COVID 19 pandemic.

FUTURE OUTLOOK

Central Bank articulates a series of strategic

activities to implement Sustainable Finance in Sri

Lanka, while detailing an action plan to be

implemented over the short, medium and long term

by the respective stakeholders. The Central Bank

expects to issue a taxonomy on Sustainable Finance

in collaboration with stakeholders by the end of 2021.

Disclosures by financial institutions and other entities

on material information on sustainability should be

further strengthened giving due consideration to all

ESG aspects.. Accordingly, policymakers across the

globe will focus on ensuring that the recovery from

the pandemic is carried out in a sustainable manner.

Going forward, coordinated policy actions are

needed to ensure enhanced readiness for

Sustainable Finance initiatives across regions and

countries. Accordingly, in the new era of post

pandemic banking, Sustainable Finance will become

an essential lever for achieving social, economic and

environmental goals in an economy.

Due to a shortage of foreign currency, the exchange

rate depreciated by 6.5 percent from January through

March 17, 2021. The CBSL took several measures to

preserve foreign exchange reserves and reduce

pressures on the exchange rate.

The Sri Lanka Development Update (SLDU) notes

that the country, hit with an unprecedented economic

downturn due to the pandemic, is now on the road to

recovery. Sri Lanka's economic growth is expected to

recover to 3.4 percent in 2021, mainly due to foreign

investments as well as normalizing tourism and other

economic activities. However, the slow global

recovery, coupled with continued trade restrictions,

economic scarring from the slowdown, and the high

debt burden may continue to affect growth. A possible

prolonged downturn in the tourism sector and

significant debt repayments due to take place next

year, together with tight credit access, pose

downside risks to the outlook. Focus Economics



panelists project the economy to grow 3.4% in 2021,

which is up 0.5 percentage points from last month's

forecast. In 2022, our panel sees the economy

growing 4.7%.

Through an enhanced focus on an export-oriented

growth model that taps the full potential of private

investment, Sri Lanka could increase its

competitiveness and raise growth in a sustainable

manner.” ( Faris H. Hadad-Zervos, the World Bank

Country Director for Maldives, Nepal and Sri

Lanka.)

With jobs lost and earnings reduced, especially in

urban areas and among private sector employees

and informal workers, the $3.20 poverty rate is

projected to have increased from 9.2 percent in 2019

to 11.7 percent in 2020. The report notes that the

current social protection system could support the

reintegration of those who lost their jobs. It suggests

that a more targeted social safety nets could help the

authorities to scale up support to the poor and

vulnerable quickly and effectively in times of crises.

Investments in digital technologies and literacy can

also help Sri Lankans find new economic

opportunities.

APPRECIATION

On behalf of the Board of Directors, I wish to express

our appreciation of the continued support and co-

operation of the Ministry of Tourism, Ceylon Tourist

Board, the Financial Institutions and other

stakeholders. I also want to thank the shareholders

for their continued support.

In conclusion, on behalf of the Board of Directors, I

extend my sincere thanks to the members of the staff,

at all levels, for their dedicated service and

contribution to the company.

Vish GovindasamyDirector

stDate: 21 April 2021

REVIEW OF THE BOARD OF DIRECTORS (Contd)



1. The Board of Directors present herewith the Annual Report together with the audited financial statements of

TAL Lanka Hotels PLC for the year ended 31 March 2021.

Formation

2. TAL Lanka Hotels PLC is a public limited liability company incorporated in Sri Lanka in 1980 and

re-registered under the provisions of the Companies Act No 7 of 2007. The re-registration number is PQ 183.

The Company is listed in the Diri Savi Board of the Colombo Stock Exchange. The Registered office and

principal place of business is situated at No. 25, Galle Face Centre Road, Colombo 03.

TAL Hotels & Resorts Ltd, which holds 58.14% of the shares, is the parent company of TAL Lanka Hotels

PLC.

Principal and other activities

3. The principal activity of the Company is the hospitality trade and the Company owns the Taj Samudra Hotel.

The Company also manages Airport Garden Hotel from which it earns Management Fees.

Financial statements

4. The financial statements which include the income statement, balance sheet, cash flow statement,

statement of changes in equity, and the notes to the financial statements of the Company for the year ended

31 March 2021 are set out on pages 25 to 77.Independent Auditor's report

5. The auditor's report is set out on pages 19.

Changes in accounting policies

6. The accounting policies adopted in the preparation of the financial statements are given on pages 29 to 48

There were no changes in the accounting policies adopted in the previous year for the Company.

Review of business

7. The state of financial position of the Company as at 31 March 2021 is set out on page 26 An assessment of

the financial performance of the Company is set out in the statement of comprehensive income on page 25.

Dividend

8. No dividends have been declared during the year under review.

Reserves

9. Total reserves and their composition are set out in the statement of changes in equity on page 27 of the

Company's financial statements.

Substantial shareholdings

10. TAL Hotels & Resorts Limited holds 58.14% of the stated capital of the Company. The details of the main shareholders of the Company and the percentages held by each of them are given

below:

Name of shareholder Holding percentage No. of shares

Hotels & Resorts Limited� 58.14 81,181,580TAL

IHOCO BV�US� 24.62� 34,375,640

As at 31 March 2021 the public holds 17.24% of the issued Share Capital of the Company.


Annual Report of the Board of Directors of the Company for the year ended 31 March 2021



Directors

11. The names of the Directors of the Company as at the end of the accounting period:

Mr. G. Sanjeevi - Chairman th (Joined with effect from 15 June 2018)

Mr. B.K. Chaudhary

Mr. R.K. Chaudhary

Mr. V. Govindasamy

Mr. N.I.R. De Mel

Mr. T. De Zoysa

Mr. P.S. Verma

Mr. C.Subramanian

Mr. P.H.Sampat

Mr. P. Sen Gupta

th Mr. C. Subramanian resigned with effect from 6 July 2020 and Mr. Parikshit Sen Gupta was appointed on th14 July 2020.

thMr. T. De Zoysa vacates office on 26 July 2020 and a resolution for his re-appointment will be taken up at the thAGM on the 11 of September 2020.

Interests Register

12. Particulars of entries made in the interests register of the Company during the year under review are as

follows:

(a) Directors' interest in contracts and proposed contracts with the Company

The Director's interest in the contracts of the Company is disclosed under Note 34 to the financial

statements.

(b) Directors' interests in shares of the Company

None of the Directors hold any shares in the Company. (c) Remuneration and other benefits of directors

Please refer Note of the financial statements.� (d) Particulars relating to authorization to disclose, make use of or act on company information.

No entries were made under this heading in the Interests Register.

(e) Particulars of indemnity given, or insurance effected to directors or employees under section

218 of the Companies Act No. 7 of 2007.

No entries were made under this heading in the Interests Register.

Amounts payable to the firm holding office as auditor of the Company as audit fees

13. The remuneration payable by the Company to the independent auditors of the Company as audit fees is

Rs.1,166,000/- (2020 Rs.1,266,000/-).

Amounts payable to the firm holding office as auditor of the Company for non-audit services

14. No remuneration is payable by the Company to the independent auditors of the Company as non-audit fees. Auditor's relationship or any interest with the Company

15. The Directors are satisfied that, based on written representations made by the independent Auditors to the

Board, the Auditors did not have any relationship or any interest with the Company and / or other companies

in the group of companies to which TAL Lanka Hotels PLC belongs, that would impair their independence.

Annual Report of the Board of Directors of the Company for the year ended 31 March 2021 (Contd)



Corporate governance

16. The Directors place great emphasis on instituting and maintaining leading edge, internationally accepted

Corporate Governance practices and principles with respect to the management and operations of the group

of companies to which TAL Lanka Hotels PLC belongs, in order to develop and nurture long-term

relationships with our key stakeholders.

The extent to which the Company has complied with the Corporate Governance Rules set out in the Listing

Rules of the Colombo Stock Exchange has been set out in pages 11 to 17 of this Annual Report.

Statutory payments

17. The Directors confirm that to the best of their knowledge all taxes, duties, levies and all statutory payments by

the Company and all contributions, levies and taxes payable on behalf of and in respect of the employees of

the Company as at Balance Sheet date have been paid, or where relevant provided for.

Environmental protection

18. The Company is sensitive to the needs of the environment and makes every endeavor to comply with the

relevant environmental laws, regulations and best practices applicable in the country.

Donations

19. No donations have been made by the Company during the year.

Going concern

20. The Directors have reviewed the Company's business plans and are satisfied that the Company has

adequate resources to continue as a going concern for the foreseeable future. As such the financial

statements have been prepared on that basis.

Future developments

21. The Company plans to continue with the renovation/ development programs and is committed to enhance

the image and positioning of the hotel in the market especially in view of growing economy and tourist arrivals

in the country.

Post balance sheet events

22. No material events that require adjustments to the financial statements have taken place, subsequent to the

date of the Balance Sheet other than those disclosed, if any, in Note to the financial statements.

Auditors

23. The accounts have been audited by the external Auditors of the Company, Messer's KPMG, Chartered

Accountants.

V. Govindasamy T. De ZoysaDirector�� Director

Corporate Services (Private) LimitedSecretariesColombo

st21 April, 2021

Annual Report of the Board of Directors of the Company for the year ended 31 March 2021 (Contd)



Report on Corporate Governance

Board composition

The Board consists of 9 directors, 5 Non-Executive Non Independent directors, 3 Non-Executive Independent

directors and 1 Executive Non Independent director. Independence of directors has been determined in

accordance with the Listing Rules of the Colombo Stock Exchange and the Board of Directors are of the opinion

that even though Mr. V. Govindasamy and Mr. T. De Zoysa have been on the Board for over ten years, they have

not been directly involved in the management of the Company and continue to exercise objectivity in the

performance of their duties and therefore are independent. All 3 Independent Non-Executive directors have

submitted signed confirmations of their independence.

Mr. G. Sanjeevi

Non - Executive Non - Independent Director

Mr. Giridhar Sanjeevi has built a broad-based career over 34 years across multiple businesses - consumer

businesses, financial services, retail and pharma in Asia and Europe. A Chartered Accountant and an MBA from

IIM Ahmedabad he has won several awards and recently was inducted into the CFO India Hall of Fame for

lifetime of contribution to the world of finance. He has built a broad-based career, both finance and commercial

across multiple businesses, consumer business, financial services, retail and pharma and across multiple

geographies – Asia and Europe. He joined The Indian Hotels Company Limited from Merck and Co., the

American Pharma company, where he was the CFO for South Asia and the Business Head for Pakistan,

Bangladesh, Sri Lanka and Nepal. He started his career in ITC Ltd, where he did a variety of roles across

businesses in India and the Middle East. Subsequently, he was with IL & FS as an investment Banker and head of

M & A. In addition, he was also the Head of the operations at Eastern India.

Mr. Giridhar spent several years with Diageo Plc. He was their Global Business Development Director at London,

covering M&A and strategy. Earlier he was the Finance Director at Singapore for large parts of Asia. Mr. Giridhar

has significant experience in business and financial transformation. At Wockhardt, where he was the Global

CFO, such transformation efforts led to a very visible 18x jump in share price. He has also built experience in

retail through stints in Shoppers Stop and Aditya Birla Group, where he was the CFO.

He has won several awards including Most Influential CFOs of India awards from CIMA in 2015 & 2016, CFO for

the year of Excellence in Finance in Managing a Turnaround given out by IMA (2013). He loves to build High

Performance teams and has led global Finance Director development programs at Merck & Co for high potential

talent. Deeply passionate about Authentic Leadership and committed to Doing Well by Doing Good. He is

associated with some NGO's and has been on the advisory board of United India, Beyond Sight Foundation.

Mr. P. Verma


Mr. Prabhat Verma is overseeing the operations of South India; International hotels and the retail brand

EXPRESSIONS. He joined IHCL in 1990 as a Management Trainee with the flagship Taj Mahal Palace & Towers.

He has been the General Manager of some of the leading hotels of IHCL. Prior to his current role, he was the

Senior Vice President - Operations, South. He is a hotel management graduate from IHMCTAN Kolkata, and has

also attended the Executive Development Program at IIM, Bangalore. He is the recipient of many industry

accolades including the 'International Cooperation between the UK and India Award' (2012) at the House of

Parliament by Asian Voice, PATWA Award.



Report on Corporate Governance (Contd)

Mr. Pankaj Sampat

Executive Non - Independent Director

Mr. Pankaj Sampat completed his Hotel Management graduation from IHM, Ahmedabad and joined IHCL in

1993 at group's flagship property, 'The Taj Mahal Palace and Towers, Mumbai'. During the subsequent decade,

he held multiple roles in the hotel's Food & Beverage function.

In 1998, he completed his Diploma in Business Management from the Narsee Monjee Institute of Management

Studies, Mumbai. In November 2003, Mr. Sampat was promoted to the role of Food & Beverage Manager at Taj

Lands End, Mumbai. He then moved back to the flagship in 2004 to head the largest F&B operations in the

country and subsequently assumed the role of EAM - Food & Beverage in 2006.

Mr. Sampat was promoted as The General Manager of Vivanta President, Mumbai in 2007, after which he was

assigned to open the luxurious Taj Santacruz in 2015. In his current role as the Area Director – TAL & TSL and

General Manager -Taj Samudra, Colombo, he is responsible for the operational excellence & driving profitability

of the hotels, resorts & safari lodges in his portfolio.

Other than TAL Lanka Hotels PL, Mr. Sampat also serves on the boards of Taj Safaris Ltd (TSL), Lanka Island

Resorts Ltd. (LIRL), and TAL Maldives Resorts Pvt. Ltd. (TMPL). He has also been actively involved with the

various industry bodies in Sri Lanka as a board member of the 'Indo Lanka Chamber of Commerce' and the

'Indian CEO forum'.

Mr. B. K. Chaudhary


Mr. Binod K. Chaudhary, a Nepali businessman, industrialist and philanthropist is the Chairman of CG Corp

Global, a multi- dimensional conglomerate, headquarter in Nepal, consisting 160 companies and 123 brands

under 9 different business verticals that cover over 5 continents. Experiencing a rapid global expansion under

the esteemed leadership and vision, he is featured as the first Nepali billionaire as listed by Forbes. With over

15,000 employee CG Corp Global is diversified from stainless steel, departmental arcade, trade, food,

electronics, finance and power to insurance, realty, education, cement, ayurveda, biotech, telecom and of

course, hospitality establishing linkages across verticals.

Mr. R.K. Chaudhary

Non - Executive Non-Independent Director

Mr. Rahul Chaudhary, the Managing Director of CG Corp Global, a multi-dimensional conglomerate with over

160 companies and 123 brands under 9 different business verticals, covering over 5 continents. Rahul

Chaudhary heads CG Hospitality Holding, the hospitality arms of CG Corp Global and CG Capital Partners. CG

Hospitality Holdings is partners with and owns some of the most iconic assets globally with some of the leading

hospitality brands such as Taj, Vivanta, Taj Safari, Jetwing, Radisson, The Farm, Summit, CHC, Fairmont, The

Zinc and The Fern. CG Hospitality portfolio comprises of over 141 hotels & resorts in 12 countries and 91

destinations with over 8,246 keys. By 2025, the portfolio is expected to grow to over 200 hotels and 10,000 keys.

Mr. P Sengupta

Non - Executive Non-Independent Director

Mr. P Sengupta, the global CFO of CG Corp Global. He is qualified Chartered Accountant (Institute of Chartered




Accountants of India – India, Kolkata, 1992). He is Qualified senior management professional with 23 years of

experience in Finance, M&A, Treasury, eCommerce / digital technology, Corporate Governance, Supply chain.

Experience includes VP Finance and Head Supply Chain for Shangri-la Hotels and Resorts with global

responsibilities.

Mr. V. Govindasamy

Non - Executive Independent Director

Mr. V Govindasamy is the Group Managing Director of Sunshine Holdings PLC (CSE: SUN), a diversified

conglomerate listed in the Colombo Stock Exchange, Sri Lanka.

Prior to moving to the Holdings company, he joined Watawala Plantations PLC (CSE:WATA) in 1997 as the CEO.

A diversified Plantation Management company set up via a JV with TATA, having mature Agri assets in Tea, Palm

Oil, and Rubber with a total extent of 12000 HA and a large workforce in excess of 11000 people.

He holds a Bachelor of Science in Electrical Engineering and a MBA from the University of Hartford, USA. Before

moving back to Sri Lanka, he held several leadership roles in both Finance and Management, specializing in the

Educational Institutions in the USA.

At WATA, he was instrumental in turning around the distressed plantation into a successfully navigated

plantation company through volatile times to become the highest capitalized Regional Plantation Company in

the Colombo Stock Exchange (CSE). Further, his vision saw the company move away from being a mono crop to

a diversified crop portfolio in Palm Oil and Rubber. Today in Sri Lanka WATA is the largest producer of Crude

Palm Oil (CPO).

Mr. Govindasamy’s crowning achievement was in 1998 when he drove his company towards downstream

exposure by successfully entering the branded tea segment in Sri Lanka. Today with approximately 3 mil kg’s in

sales, it enjoys Market Leadership position.

His new avatar as the Group Managing Director of the holding company, since 2009, saw him successfully

transform a tightly held family run company in to a respected diversified holdings company.

Mr. Govindasamy’s international experience coupled with his innate managerial capabilities and innovative

business ideas has enabled him to play key leadership roles in the Private Sector in Sri Lanka and has further

cemented his recognition as a dynamic leader in the corporate world.

Mr. T. De Zoysa


A well-known figure in the Sri Lankan business community, Tilak de Zoysa, FCMI (UK) FPRI (SL), Honorary

Consul for Croatia and Global Ambassador for HelpAge International was conferred the title of “Deshabandu” by

His Excellency the President of Sri Lanka in recognition of his services to the Country and was the recipient of

“The Order of the Rising Sun. Gold Rays with Neck Ribbon” conferred by His Majesty the Emperor of Japan.

Recipient of the LMD lifetime achievers' Award 2017.

In addition to being the Chairman of the Supervisory Board (AMW) and Advisor to the Al-Futtaim Group of

Companies in Sri Lanka, he Chairs Carson Cumberbatch PLC, Associated CEAT (Pvt) Ltd., Amaya Hotels and

Resorts USA (Radisson), Jetwing Zinc Journey Lanka (Pvt) Ltd., Trinity Steel (Pvt) Ltd., CG Corp Global Sri

Lanka, HelpAge Sri Lanka and Sasakawa Memorial Sri Lanka Japan Cultural Centre Trust.




He is also the Vice Chairman of CEAT Kelani Holdings (Pvt) Ltd., Orient Insurance Ltd. and serves on the boards

of several listed and private Companies which include TAL Lanka Hotels PLC (Taj), TAL Hotels and Resorts Ltd,

Nawaloka Hospitals PLC, Associated Electrical Corporation Ltd., INOAC Polymer Lanka (Pvt) Ltd., Cinnovation

INC., and Varun Beverages Lanka (Pvt) Ltd. (Pepsi).

Mr. Tilak de Zoysa is a past Chairman of the Ceylon Chamber of Commerce, the National Chamber of Commerce

of Sri Lanka, HelpAge International (UK), Colombo YMBA and served as a Member of the Monetary Board of Sri

Lanka (2003-2009).

Mr. R. De Mel


Mr. Russell De Mel is a professional accountant with over 21 years experience in Developing Banking including

Project Financing, SME Financing and Merchant Banking and around 9 years of experience in Commercial and

Investment Banking. He is a Fellow of the Chartered Institute of Management Accountants of UK (FCMA),

Chartered Global Management Accountant (CGMA) and Fellow of the Certified Management Accountants of Sri

Lanka (FCMA).

Mr. Russell De Mel has served in the National Development Bank (NDB) and Group as the Director / CEO

and the Group CEO . Prior to that he has held the positions of Vice President Group Risk Management and Vice

President of Corporate Banking Group of NDB.

Mr. Russell De Mel has also served on the Boards of over 25 listed and non- listed companies, over a period of 25

years, covering a wide range of sectors, both within and outside NDB Group and within and outside Sri Lanka. He

currently serves on the Boards of Nations Trust Bank PLC and Sunshine Tea Pvt Ltd as well.

Audit Committee

Committee Composition

The Audit Committee comprises of three non-executive independent Directors. The Committee is chaired by Mr.

Vish Govindasamy. The other two committee members comprise of Mr. Tilak De Zoysa and Mr. Russell De Mel.

Mr. Pankaj Sampat, Area Director Sri Lanka, Maldives And Malaysia/ Head Taj Asia Limited & Taj Safaris Ltd and

Mr. Paras Puri, Area Financial Controller Sri Lanka, Maldives & Malaysia / Director of Finance – Taj Samudra,

attend the Audit Committee meetings by invitation.

The Chairman of the Audit committee is Mr. Vish Govindasamy, acclaimed for his professional knowledge and

expertise in corporate finance.

Role of Audit Committee

The Committee has been formed with specific terms of reference as described in the Corporate Governance

Rules of the Colombo Stoke Exchange.

Meetings

The committee met four times during the year under review to discuss the matters within its purview.




Tasks of the Audit Committee

The committee reviewed the financial reporting system adopted by the company in preparation, presentation

and the adequacy of disclosures in the annual / quarterly financial statements to ensure reliability of the process,

consistency of the accounting policies and methods adopted and their compliance with the Sri Lanka Accounting

Standards. The committee also reviewed the company's compliance with financial reporting requirements,

information requirements of the companies Act and other relevant financial reporting related regulations and

requirements. The committee also reviewed the adequacy of the internal controls and risk management and

assessed the independence and performance of the external auditors. The committee recommended the

financial statements to the Board for its approval and issuance.

The fees payable to the external auditors as audit fees and the fees payable to the external auditors for non –

audit services provided by them during the year under review has been set out in items 13 and 14 of the Annual

Report of the Board of Directors. Further to the review of the non – audit services provided by the external

auditors of the company, it was determined by the Audit Committee that the independence of the external auditor

as the auditors of the company had not been compromised.

Internal Audits

The committee reviewed the accounting system and the scope and coverage of the internal audit process to

assess effectiveness of financial controls that have been designed to provide reasonable assurance to the

Directors that assets are safeguarded and that the financial reporting system can be replied upon in preparation

and presentation of Financial Statements. The Internal Audit function is being conducted by a leading audit firm.

Follow – up reviews are scheduled to ascertain that audit recommendations are being acted upon.

Conclusion

The Audit Committee is satisfied that the company's accounting policies and operational controls provide

reasonable assurance that the affairs of the company are managed in accordance with its policies and that the

company's assets are adequately safeguarded.


V GovindasamyChairmanAudit Committee

st21 April, 2021

28.04.2020Director 10.08.2020Eligible

to attendAttended

V Govindasamy

Tilak De Zoysa

Russell De Mel

By Invitation

Soumitra Ray

Paras Puri

Pankaj Sampat

P

P

P

P

-

P

P

P

P

P

-

P

4

4

4

3

1

4

4

4

4

3

1

4

26.01.2021

P

P

P

-

P

P

06.11.2020

P

P

P

P

-

P


Report on Related Party Transaction Review Committee

Related Party Transactions Review Committee (RPTRC) is a board appointed sub- committee. The committee has been established in compliance with the Section 9 of the Continuing Listing requirements of the Colombo Stock Exchange. The objective of the committee is to review all related party transactions other than those transactions explicitly by the rule.

Composition of the Committee

The Committee is comprised of a combination Two of Non-executive Independent Directors.

The members of the RPTRC are as follows

Mr. V Govindasamy - Chairman Mr. Tilak De Zoysa - Committee Member

Committee Meetings

The Committee met 04 times in the financial year to review related party transactions. Details of individual member is given below.

Policies and procedures adopted by the Committee.

— The Committee identified the key Management Personnel (KMPs) and entities that are related to the reporting entity.

— The committee requires statements of compliance from the KMPs to ensure all related parties and transactions are reported and reviewed in accordance with the rules.

— The committee reviews intercompany transactions related entities for compliance with the rules.

— The Committee ensures that written policies and procedures of the company are in conformity with rules and corporate governing related party transactions. the committee reviews these policies and procedures on annual basis or more frequently when need arises.

— The Committee ensures that any director or key Management Personal who is a related party, does not participate in any decision of a proposed related party transactions unless such person is requested to do so by the committee for the purpose of providing information concerning the related party transactions.

10.08.2020Director 06.11.2020 26.01.2021Eligible

to attendAttended

Vish Govindasamy

Tilak De Zoysa

By Invitation

Russell De Mel

Soumitra Ray

Paras Puri

Pankaj Sampat

P

P

P

-

P

P

P

P

P

-

P

P

P

P

-

P

P

4

4

4

3

1

4

4

4

4

3

1

4

28.04.2020

P

P

P

P

-

P



— The committee also ensures that immediate market disclosure, shareholder approval and annual report disclosure of any related party transactions are made accordance with the applicable rules of the Colombo Stock Exchange.

Declaration by the Board of Directors

During the year the company did not have any related party transactions which required the approval of the shareholders or immediate market disclosure under the rules. The related party transactions are disclosed in Note 34.3 on page 38 of the financial statements.

Vish GovindasamyChairmanRelated Party Transactions Review Committee

Colombo st21 April, 2021

Report on Related Party Transaction Review Committee (Contd)



Statement of the Directors' Responsibilities in relation to the Financial Statements

Statement of the Directors Responsibilities in relation to the Financial Statements.

The responsibilities of the Directors, in relation to the financial statements of the Company, differ from the

responsibilities of the Auditors, which are set out in the Report of the Auditors in pages 19 to 24

As per the provisions of the Companies Act No. 07 of 2007, the Directors are required to prepare financial

statements for each financial year, giving a true and fair view of the state of affairs of the Company as at the end of

the financial year and of the results of its operations for the financial year.

The Directors consider, that in preparing these financial statements set out in pages 29 to 77, appropriate

accounting policies have been selected and applied in a consistent manner and supported by reasonable and

prudent judgement, and that all applicable accounting standards, as relevant, have been followed.

The Directors are also confident that the Company has adequate resources to continue in operation and have

applied the going concern basis in preparing these financial statements. Further, the Directors have a

responsibility to ensure that the Company maintains sufficient accounting records to disclose with reasonable

accuracy, the financial position of the Company and to ensure that the financial statements presented comply

with requirements of the Companies Act, No. 07 of 2007.

The Directors are also responsible for taking reasonable steps to safeguards the assets of the Company and in

this regard, to give proper consideration to the establishment of appropriate internal control systems to prevent

and detect fraud and other irregularities.

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

The Directors also confirm, that to the best of their knowledge, all statutory payments payable by the Company

as at the Balance Sheet date, have been paid where relevant and provided for.

BY ORDER OF THE BOARD

Chief Executive Officer,

Corporate Services (Private) Limited,

Secretaries,

Colombo.th28 July, 2021


INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF TAL LANKA HOTELS PLC


Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of TAL Lanka Hotels PLC ("the Company"), which comprise the ststatement of financial position as at 31 March 2021, and the statement of profit or loss and other comprehensive

income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the

financial statements, including a summary of significant accounting policies and other explanatory information as

set out on pages to .25 77

In our opinion, the accompanying financial statements of the Company give a true and fair view of the financial stposition of the Company as at 31 March 2021, 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 company 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 of the current period. These matters were addressed in the context of our audit

of the company financial statements as a whole, and in forming our opinion thereon, and we do not provide a

separate opinion on these matters.

KPMG(Chartered Accountants)32A, Sir Mohamed Macan Markar Mw.,P.O. Box 186,Colombo 00300, Sri Lanka.

Tel : +94 11 5426426Fax : +94 11 2445872 +94 11 2446058Internet : www.kpmg.com/lk

KPMG, a Sri Lankan partnership and a member firmof the KPMG network of independent member firmsaffiliated with KPMG International Cooperative("KPMG International"). a Swiss entity.

M.R. Mihular FCAT.J.S. Rajakarier FCAMs. S.M.B. Jayasekara ACAG.A.U. Karunaratne FCAR.H. Rajan FCAA.M.R.P. Alahakoon ACA

C.P. Jayatilake FCAMs. S. Joseph FCAS.T.D.L. Perera FCAMs. B.K.D.T.N. Rodrigo FCAMs. C.T.K.N. Perera ACA

P.Y.S. Perera FCAW.W.J.C. Perera FCAW.K.D.C. Abeyrathne FCAR.M.D.B. Rajapakse FCAM.N.M. Shameel ACA

Principals - S.R.I. Perera FCMA(UK), LLB, Attorney-at-Law, H.S. Goonewardene ACA,Ms. P.M.K. Sumanasekara FCA


01. Management assessment of the potential impacts of Coronavirus (COVID-19) on the Company

ability to continue as going concern

Refer Accounting Policies in Note 2.7 and 29 to the financial statements

Risk Description

The Company has incurred a net loss of Rs.1,095 Mn stfor the year ended 31 March 2021, as of that date, the

Company's had net current liability of Rs.835 Mn. As

disclosed in note 2.7, the financial statements have

been prepared on a going concern basis. In adopting

the going concern basis of preparation of the financial

statements, the directors have reviewed the

company's cash flow projections prepared by the

management. The cash flow projections were based

on management's assumptions and estimation of

future cash inflows and outflows, also taking into

consideration the impact of COVID-19 related

estimate uncertainty.

Note 29 to the financial statements, which describes

increased estimation uncertainty in the preparation of

the current year Company financial statements,

specifically as it relates to the impacts of COVID-19 on

the Company's future prospects, performance and

cash flows. Further, the management has described

how they plan to deal with these events and

circumstances as the outbreak is still prevailing as at

the date of this report.

We identified the management assessment of

potential impact of COVID-19 to the Company's ability

to continue as going concern as a key audit matter

because the cash flow projections referred to above

involves consideration of future events and

circumstances which are inherently uncertain, and

effect of those uncertainties may significantly impact

the resulting accounting estimates. Therefore, the

assessment requires the exercise of significant

management judgement in assessing future cash

inflows and outflows which could be subject to

potential management bias.

Our responses

Our audit procedures included

§ Obtaining the Company's cash flow projections

covering period of not less than twelve months

from the reporting period end date and evaluating

these key assumptions used in preparing the

projections.

§ Evaluating the sensitivity of the projected available

cash by considering downside scenarios together

with reasonably plausible changes to the key

assumptions and considering whether there were

any indicators of management bias in the selection

of the assumptions.

§ Inspecting the facility agreements for the

Company's long-term loans to identify any financial

covenants or similar terms and assessing the

implication of these on the Company's liquidity.

§ Assessing the adequacy of disclosures in the

financial statements in relation to the potential

impact of COVID-19 to the Company's ability to

continue as going concern with reference to the

requirements of the prevailing accounting

standards.


02. Revaluation of Freehold Buildings

Refer Accounting Policies in Note 3.4.2 and Note 11 to the financial statements

Our responses


§ Assessing the objectivity, independence,

competence and qualifications of the external

Valuer.

§ With the assistance of our own KPMG valuation

specialists assessing the key assumptions applied

and conclusions made in deriving the fair value of

the Freehold buildings. In addition to that, we have

assessed the valuation methodologies with

reference to recognized industry standards.

§ Assessing the adequacy of disclosures in relation

to fair value of Freehold buildings in the financial

statements in accordance with the relevant

accounting standards.

Risk Description

The Company's Freehold Building are stated in the

financial statements at their fair values which totaled to stRs. 2,981 Mn as at 31 March 2021 and represented

61% of the Company's total assets as at that date. A

revaluation gain, net of tax of Rs.490 Mn was recorded

in the statement of other Comprehensive income for stthe year ended 31 March 2021.

The Company has engaged an independent

professional Valuer with appropriate expertise to

determine the fair value of the freehold buildings in

accordance with recognized industry standards.

We identified this as a key audit matter because of the

magnitude of the Freehold Building and amounts

recognized in the financial statements and because

the valuation can be inherently subjective and requires

the exercise of significant judgments and estimation,

in particular in determining the appropriate valuation

methodology, capitalization rates, which increases the

risk of error or potential management bias.


03. Recoverability of Deferred Tax Assets

Refer Accounting Policies in Note 3.16.2 and Note 9.6 to the financial statements

Other Information

Management is responsible for the other information. The other information comprises the information included

in the annual report, but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we will 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.


Our responses


§ Reviewing the correspondence with the

Company's tax consultant with regard to the ability

to utilize the carried forward tax losses reported in

the tax returns, against the future taxable profits, as

well as assessing the impact of any uncertain tax

positions.

§ Assessing and evaluating the Company's

approach for evaluating the likelihood of the

recoverability of deferred tax assets. This included

evaluating the key assumptions in future taxable

profits forecasts for Company with accumulated

unutilized tax losses by comparing the most

significant inputs used in the forecasts, including

future revenue, margins and operating cost growth

rates, with the historical performance of the entity,

management's forecasts used for other purposes

and our knowledge of the business gained from

other audit procedures.

§ Evaluating sensitivity of key assumptions used and

the impact it would have on the availability of

sufficient taxable profits.

§ Assessing adequacy of the disclosures in the

financial statements.

Risk Description

The Company has recognized deferred tax assets stamounting to Rs. 96.6 Mn as at 31 March 2021.

The Company had recognised significant deferred tax

assets in respect of the future benefit of deductible

temporary differences and accumulated tax losses

that it believes are recoverable. The recoverability of

recognized deferred tax assets is in part dependent on

the Company's ability to generate future taxable profits

sufficient to utilize deductible temporary differences

and tax losses.

We have determined this to be a key audit matter, due

to the inherent uncertainty in forecasting the amount

and timing of future taxable profits and the reversal of

temporary differences.

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

Management is responsible for the preparation of financial statements that give a true and fair view in

accordance with Sri Lanka Accounting Standards, and for such internal control as management determines is

necessary to enable the preparation of financial statements that are free from material misstatement, whether

due to fraud or error.In preparing the financial statements, management is responsible for assessing the Company's ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless management either intends to liquidate the Company or to cease operations,

or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's 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:

Ÿ 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.

Ÿ 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's internal control.

Ÿ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related is closures made by management.

Ÿ Conclude on the appropriateness of management's use of the going concern basis of accounting and,

based on the audit evidence obtained, whether a material uncertainty exists related to events or

conditions that may cast significant doubt on the Company'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 Company to cease to continue as a going concern.

Ÿ 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.


Ÿ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Company to express an opinion on the financial statements. We are

responsible for the direction, supervision and performance of the 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 ethical

requirements in accordance with the Code of Ethics regarding independence , and to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence, and where

applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of

most 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 2618.

CHARTERED ACCOUNTANTSColombo, Sri Lanka

st21 April 2021


Notes Year ended 31 March

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME(All amounts are shown in Sri Lankan Rupees)

2020

Revenue

Direct cost

Gross profit / (Loss)

Other income

Marketing expenses

Administrative expenses

Profit / (Loss) from operations

Finance income

Finance expenses

Net Finance expenses

Loss before tax

Income tax expense

Loss for the year

Other comprehensive income / (expense), net of income taxItem that will not be reclassified subsequently to profit or loss:

Revaluation gain on building, net of tax

Re-measurement gain/(loss) on defined benefit plans, net of tax

Fair value gain / (loss) on investments in equity investments designated as at FVOCI, net of tax

Other comprehensive income for the year, net of tax

Total comprehensive expense for the year

Loss per share

2021


Figures in brackets indicate deductions.

The Notes on pages to are an integral part of these Financial Statements.29 77

484,203,092 0

(1,098,567,886)

(614,364,794)

17,794,888 0

(41,267,357)

(250,977,385)

(888,814,648)

6,992,123 0

(179,860,852)

(172,868,729)

(1,061,683,377)

(33,522,847)

(1,095,206,224)

Other c Item

490,424,0020

(13,451,336) txxxxxxxxxxax

(5,010,635) designa

471,962,0310

(623,244,193)

(7.84)

5

6

7.1

7.2

7

8

9

Item

0

gna

9.3

10

2,391,582,3250

(1,967,811,966)

423,770,359 )

74,006,450 0

(89,677,612)

(378,562,496)

29,536,701 )

1,961,761 0

(263,586,126)

(261,624,365)

(232,087,664)

(27,516,700)

(259,604,364)

Other c Item

-0

5,129,484 0 txxxxxxxxxxax

(747,197) designa

4,382,2870

(255,222,077)

(1.86)


As at 31 March

STATEMENT OF FINANCIAL POSITION(All amounts are shown in Sri Lankan Rupees)

Total liabilities

Total equity and liabilities

Paras Puri - Area Financial Controller Sri Lanka, Maldives & MalaysiaDirector of Finance - Taj Samudra, Colombo

I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act No. 07 of 2007.

Bank Overdraft 20

Date: 21 April, 2021

As at 31 March

The Board of Directors is responsible for the preparation and presentation of these financial statements.Approved and Signed for and on behalf of the Board of Directors of TAL Lanka Hotel PLC.

Notes

15

11

12

16

Non-current assetsProperty, plant and equipment

Intangible assets

Current assets

Inventories

Trade and other receivables

ASSETS

Amounts receivable from related parties

Total assets

EQUITY AND LIABILITIES

Capital and reserves

Stated capital

Revaluation reserve

Fair value reserve

Non-current liabilitiesLoan and borrowings

Retirement benefit obligation

Current liabilitiesTrade and other payablesAmounts payable to related parties

17

21

22

24

25

26

27

Leasehold property - Right to use of land 13

Deposits, prepayments and advances

Cash and cash equivalents

9.12

20

Total equity

Deferred tax liability 9.6

Accumulated losses

2021

Tilak De Zoysa - Director - DirectorV Govindasamy

2020

Current tax asset

Investments classified as FVOCI 14

18

109,175,055

1,051,595,151

4,874,430,744

3,720,218,226 3,627,361

4,658,229,442

55,208,936

35,168,980

81,669,194

1,084,344

4,874,430,744

1,396,374,941

1,472,378,141

1,559,516

2,044,032,333

2,546,160,751

398,529,684

1,276,674,842

119,387,005

778,266,507

85,522,403

23,307,132

216,201,302

420,459,224

, (1,593,637,756)

3,597,755,902

15,909,507

15,820,600

23

19Investments in Fixed Deposits

-

Loan and borrowings 24 424,503,407


The Notes on pages to are an integral part of these Financial Statements. 29 77

Investments in Fixed Deposits 19 140,296,748

33,290,215

870,329,987

4,964,870,226

3,496,121,263 7,140,584

4,316,107,278

71,499,413

146,989,440

80,824,772

1,214,151

4,964,870,226

1,396,374,941

1,077,607,167

6,570,151

1,802,591,772

2,194,621,204

419,792,688

1,899,919,035

106,167,947

791,457,459

103,734,887

245,240,404

648,762,948

311,204,660

, (580,633,224)

3,064,951,191

29,592,986

21,387,972

50,491,667

311,079,137

-


STATEMENT OF CHANGES IN EQUITY(All amounts are shown in Sri Lankan Rupees)

Balance as at 01 April 2019 1,396,374,941

Statedcapital

1,922,291,597

Revaluationreserve

(1,170,842,774)

Accumulatedlosses

2,155,141,112

Total

7,317,348

Fair Valuereserve

1,396,374,941 1,077,607,167 (580,633,224) 1,899,919,035Balance as at 31st March 2020

Total comprehensive income / (expenses)for the year

- (79,836,466) (79,836,466)-Deferred tax relating to revaluation of building

- (95,653,028) 95,653,028 - -Transfer of Depreciation, net ofdeferred tax

1,396,374,941 1,472,378,141 (1,593,637,756) 1,276,674,8421,559,516Balance as at 31 March 2021


6,570,151

- (750,207,551) 750,207,551 - -Transfer of Revaluation Reserve as part ofthe transition adjustment

1,396,374,941 1,172,084,046 (420,635,223) 2,155,141,112Balance as at 01 April 2019 at theinitial application of SLFRS 16

7,317,348

- - (1,095,206,224) -Loss for the year (1,095,206,224)



- 570,260,468 570,260,468-Revaluation gain during the year

- - (13,451,336) (18,461,971)(5,010,635)Other comprehensive income / (expense)

- (94,476,879) 94,476,879 - -Transfer of Depreciation, net ofdeferred tax

- - (259,604,364) -Loss for the year (259,604,364)

- - 5,129,484 4,382,287(747,197)Other comprehensive income / (expense)

Total comprehensive income / (expenses)for the year

(before initial application of SLFRS 16)

-

-


Year ended 31 March

STATEMENT OF CASH FLOWS (All amounts are shown in Sri Lankan Rupees)

Provision for defined benefit plans

Decrease in inventories

Impairment of trade receivables

Impairment of inventoriesInterest income

Unrealised exchange lossOperating (loss) / profit before working capital changes

(Increase)/ decrease in trade and other receivables

(Increase)/ decrease in amounts receivable from related companies

(Increase)/ decrease in deposits, prepayments and advances

Investment in plan assets

Net cash (used in) / generated from operating activities

Cash flows from Investing activities Net proceeds from disposal of property, plant and equipmentPurchase of property, plant and equipment

Net cash used in investing activities

Cash flows from financing activities Borrowings obtained

Repayment of borrowings

Payment of lease liability

Net cash generated from / (used in) financing activities

Net (decrease) / increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

Cash and cash equivalents at the end of the yearCash and cash equivalents

Interest receivedAcquisition of intangible assets

(Investment) / Withdrawal in Fixed Deposits

Taxes paid

Receivables from AGH written off during the year

8.2.1

16.1

15.17.1

19.& 24.1

25.3

11

24.1

24.1

12

19

8

Notes

20

20

Cash flows from Operating activities,

Loss before tax

Gain on disposal of property, plant and equipment

Depreciation on property, plant and equipment

Adjustments for

Amortisation of leasehold property

2021 2020

Interest expense


Amortisation of intangible asset

Economic service charge write-off / (written back)

18,212,484

(472,768,191)

16,290,477

(31,000,000)

184,917,676

16,203,334

-

- (6,992,123)

91,519,746

108,248,699129,807

(380,242,006)

54,000 (21,589,824)

(102,493,782)

184,917,676 -

-

(297,818,112)

211,950,189

(85,867,923)

(85,867,923)

(85,867,923)

(1,061,683,377)

(54,000)

367,753,328

13,190,952

87,883,747

5,892,042

3,513,223

-

(86,850,000)

12,256,321

Interest paid (11,311,337)

Increase/ (decrease) in trade and other payables

Increase/ (decrease) in amounts payable to related companies

Cash (used in) / generated from operations

(21,263,003)13,219,058

(337,930,669)

-

Net proceeds from De-recognition of CWIP -



3,640,658

6

11

13

7.2

12

8

11

(27,438,525)

451,846,343

9,301,745

(80,000,500)

(37,020,635)

25,080,578

2,531,019

3,868,909 (1,961,761)

139,021,202

(6,449,650) (69,312)

229,674,944

34,800 (57,582,395)

(79,910,726)

250,000,000 (285,020,635)

(2,000,000)

112,743,583

99,206,606

211,950,189

211,950,189

211,950,189

(232,087,664)

(27,000)

377,537,867

13,190,952

123,871,792

1,470,094

4,566,389

(1,408,573)

(50,000,000)

(3,745,940)

(123,511,375)

5,555,43716,118,258

448,864,296

(15,677,477)

27,575,348

-


1 Corporate information

1.1 Reporting entity

TAL Lanka Hotels PLC (formerly known as Taj Lanka Hotels PLC) is a limited liability company domicile

and incorporated in Sri Lanka in 1980 and listed on the Colombo Stock Exchange in 1982. The registered

office and principal place of business is situated at No. 25, Galle Face Centre Road, Colombo 03.

1.2 Principal activities and nature of operations

TAL Lanka Hotels PLC is engaged in the hospitality trade. The company owns the Taj Samudra Hotel

located in Colombo.

1.3 Parent enterprise

The company's parent company is TAL Hotels & Resorts Limited, Hong Kong (formerly known as Taj Asia

Limited).

1.4 Responsibilities for financial statements and approval of financial statements

The board of directors are responsible for preparation and presentation of the financial statements of the

Company as per the provision of Companies Act No. 07 of 2007 and Sri Lanka Accounting Standards. The stdirectors' responsibility over financial statements for the year ended 31 March 2021 is set out in detail in

the statement of directors' responsibility.

st The financial statements of the Company of the year ended 31 March 2021 were authorized for issue in staccordance with resolution of the Board of Directors on 21 April 2021.

2 Basis of preparation

2.1 Statement of compliance

The financial statements of the Company comprise the statement of financial position, the statement of

profit or loss and other comprehensive income, statement of changes in equity and statement of cash flow

together with the notes to the financial statements.

The financial statements have been prepared in accordance with Sri Lanka Accounting Standards

prefixed both SLFRS (corresponding to IFRS) and LKAS (corresponding to IAS), promulgated by The

Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and complies with the requirements of the

Companies Act No. 07 of 2007.

2.2 Basis of preparation

The financial statements have been prepared on a historical cost basis, except for the following line items

in the statement of financial position:

- other financial investments are measured at fair value through other comprehensive income.

- defined benefit plans are measured at the present value based on actuarial valuation.

- buildings under property, plant and equipment have been measured at revalued amounts.

All assets and liabilities are classified as current and non-current as per company's normal operating

cycle of 12 months which is based on the nature of business of the Company. Current Assets do not

include elements which are not expected to be realized within 1 year and Current Liabilities do not include

items which are due after 1 year, the period of 1 year being reckoned from the reporting date.

Summary of accounting policies for the year ended 31 March 2021(Contd.)



2.3 Functional and presentation currency

The financial statements are presented in Sri Lankan Rupees, which is the Company's functional

currency and presentation currency. All financial information presented in Sri Lanka Rupees is rounded

to the nearest rupee unless otherwise stated.

2.4 Use of estimates and judgments

The preparation of the financial statements in conformity with LKAS/SLFRS requires management to

make judgments, estimates and assumptions that affect the application of accounting policies and the

reported amounts of assets, liabilities, income and expenses. Actual results may differ from these

estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are

recognized prospectively.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a

material adjustment in amounts recognized in the Financial Statements included in following notes.

− Deferred taxation - utilization of tax losses (Note 9.6)

− Defined benefit Obligation and Plan Assets (Note 25)

− Current taxation (Note 09)

− Measurement of ECL allowance for trade receivables (Note16)

2.5 Measurement of fair values

A number of the Company's accounting policies and disclosures require the measurement of fair values,

for both financial and non- financial assets and liabilities.

Company regularly reviews significant unobservable inputs and valuation adjustments. If third party

information is used to measure fair values, Company assesses the evidence obtained from the third

parties to support the conclusion that such valuations meet the requirements of SLFRS, including the

level in the fair value hierarchy in which such valuations should be classified. When measuring the fair

value of an asset or a liability, the Company uses observable market data as far as possible. Fair values

are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation

techniques as follows.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data. (Unobservable

inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value

hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value

hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting

period during which the change has occurred.

Summary of accounting policies for the year ended 31 March 2021 (Contd.)



2.6 Materiality and aggregation

In compliance with LKAS 01 on presentation of financial statements, each material class of similar items

is presented separately in the financial statements. Items of dissimilar nature or functions too are

presented separately, if they are material.

2.7 Going Concern

The TAL Lanka Hotels PLC operates in the tourism sector that has been significantly affected by the

COVID – 19 outbreak.

The global spread of the virus, and severe counter measures taken by the Government of Sri Lanka in the

forms of travel restrictions, quarantine, and curfew periods forced all the hotels to be temporarily shut

down. These measures required the Company to establish new strategic ways to continue its operations.

In preparing these financial statements, based on available information, the management has assessed

judgements, estimates, assumptions, existing and anticipated effects of COVID-19 on the Company in

determining the appropriateness of the use of the going concern basis. Further, in determining the going

concern, the management performed multiple stress tested scenarios considering cost management

practices, ability to secure additional funding to finance the adverse effects to the cash flows, ability to

secure required human resources, expected revenue streams, credit and collection management

practices and ability to defer non-essential capital expenditures.

Management has determined that there is no material uncertainty that casts doubt on the entity's ability to

continue as a going concern. Accordingly, the Directors are satisfied that the Company has sufficient

funds to continue its operations for the foreseeable future. Therefore, the Financial Statements of the

Company continued to be prepared on a going concern basis.

2.8 Comparative Information

The accounting policies have been consistently applied by the company with those of the previous

financial year in accordance with LKAS 01 - presentation of financial statements.

2.9 Offsetting

Financial assets and financial liabilities are offset, and the net amount reported in the Statement of

Financial Position, only when there is a legally enforceable right to offset the recognised amounts and

there is an intention to settle on a net basis or to realise the assets and settle the liabilities simultaneously.

Income and expenses are not offset in the Income Statement, unless required or permitted by an

Accounting Standard or Interpretation (issued by the International Financial Reporting Interpretations

Committee and Standard Interpretation Committee) and as specifically disclose in the accounting

policies of the Company.

3. Significant accounting policies

The company have consistently applied the accounting policies to all periods presented in these financial

statements.

3.1 Foreign currency

3.1.1 Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Company

entities at exchange rates as at the dates of the transactions.




Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to

the functional currency at the exchange rate as at that date. Non-monetary assets and liabilities that are

measured at fair value in a foreign currency are translated into the functional currency at the exchange

rate when the fair value was determined. Non-monetary items that are measured based on historical cost

in a foreign currency are translated at the exchange rate at the date of the transaction.

Foreign currency differences arising on translation are generally recognized in profit or loss.

3.2 Financial instruments

3.2.1 Recognition and initial measurement

Trade receivable and debt securities issues are initially recognized when they are originated. All other

financial assets and financial liabilities are initially recognized when the company become a party to the

contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial

liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly

attributable to its acquisition or issue. A trade receivable without a significant financing component is

initially measured at the transaction price.

Financial Assets

3.2.2 Classification and subsequent measurement

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI – debt

investment; FVOCI – equity investment; or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the company change its

business model for managing financial assets, in which case all affected financial assets are reclassified

on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not

designated as at FVTPL.

- It is held within a business model whose objective is to hold assets to collect contractual cash flows;

and

- Its contractual terms give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding.

The company's financial assets classified under amortised cost includes trade and other receivable,

investment in fixed deposits and cash and cash equivalents.

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

as at FVTPL.

- It is held within a business model whose objective is achieved by both collecting contractual cash

flows and selling financial assets; and

- Its contractual terms give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the company may irrevocably

elect to present subsequent changes in the investment's fair value in OCI. This election is made on an

investment-by-investment basis.




All financial assets not classified as measured at amortised cost or FVOCI as described above are

measured at FVTPL. This includes all derivative financial assets. On initial recognition, the company may

irrevocably designate a financial asset that otherwise meets the requirements to be measured at

amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting

mismatch that would otherwise arise.

Financial assets – Business model assessment

The company make an assessment of the objective of the business model in which a financial asset is

held at a portfolio level because this best reflects the way the business is managed, and information is

provided to management. The information considered includes:

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

include whether management's strategy focuses on earning contractual interest income, maintaining a

particular interest rate profile, matching the duration of the financial assets to the duration of any related

liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

- How the performance of the portfolio is evaluated and reported to the company's management;

- The risks that affect the performance of the business model (and the financial assets held within that

business model) and how those risks are managed;

- How managers of the business are compensated – e.g. whether compensation is based on the fair

value of the assets managed or the contractual cash flows collected; and

- The frequency, volume and timing of sales of financial assets in prior periods, the reasons for such

sales and expectation about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not

considered sales for this purpose, consistent with the company's continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair

value basis are measured at FVTPL.

Financial Assets – Assessment whether contractual cash flows are solely

payments of principal and interest

For the purpose of this assessment, 'principal' is defined as the fair value of the financial asset on initial

recognition. 'Interest' is defined as consideration for the time value for money and for the credit risk

associated with the principal amount outstanding during a particular period of time and for other basic

lending risks and costs. (e.g. liquidity risk and administrative costs), as well as a profit margin,

In assessing whether the contractual cash flows are solely payments of principal and interest, the

company consider the contractual terms of the instrument. This includes assessing whether the financial

asset contains a contractual cash flows such that it would not meet this condition. In marking this

assessment, the company consider:

- Contingent events that would change the amount or timing of cash flows;

- Terms that may adjust the contractual coupon rate, including variable-rate features;

- Prepayment and extension features; and

- Terms that limit the company's claim to cash flows from specified assets (e.g. non-recourse

features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the

prepayment amount substantially represents unpaid amounts of principal and interest on the principal






amount outstanding, which may include reasonable additional compensation for early termination of the

contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par

amount, a feature that permits or requires prepayment at an amount that substantially represents the

contractual par amount plus accrued (but unpaid) contractual interest (which may also include

reasonable additional compensation for early termination) is treated as consistent with this criterion if the

fair value of the prepayment feature is insignificant at initial recognition.

Financial assets – subsequent measurement and gains and losses:

Financial assets These assets are subsequently measured at fair value. Net gains and losses, including

at FVTPL any interest or dividend income, are recognised in profit or loss.

Financial assets These assets are subsequently measured at amortised cost using the effective

at amortised cost interest method. The amortised cost is reduced by impairment losses. Interest income,

foreign exchange gains and losses and impairment are recognized in profit or loss.

Any gain or loss on derecognition is recognized in profit or loss.

Debt investments These assets are subsequently measured at fair value. Interest income calculated

at FVOCI using the effective interest method, foreign exchange gains and losses and

impairment are recognized in profit or loss. Other net gains and losses are recognized

in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to

profit or loss.

Equity These assets are subsequently measured at fair value. Dividends are recognized as

investments income in profit or loss unless the dividend clearly represents a recovery of part of the

at FVOCI cost of the investment. Other net gains and losses are recognized in OCI and are

never reclassified to profit or loss.

3.2.3 Derecognition

3.2.3.1 Financial asset

The company derecognize a financial asset when the contractual rights to the cash flows from the

financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in

which substantially all of the risks and rewards of ownership of the financial asset are transferred in which

the company neither transfer nor retain substantially all of the risks and rewards of ownership and it does

not retain control of the financial asset.

The company enter into transactions whereby they transfer assets recognized in its statement of

financial position but retain either all or substantially all of the risks and rewards of the transferred assets.

In these cases, the transferred assets are not derecognized.

3.2.3.2 Financial liabilities

The company derecognize a financial liability when its contractual obligation are discharged or

cancelled, or expire. The company derecognize a financial liability when its terms are modified and the

cash flows of the modified liability are substantially different, in which case a new financial liability based

on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the

consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in

profit or loss.


3.2.4 Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of

financial position when, and only when, the company currently have a legally enforceable right to set off

the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability

simultaneously.

3.2.5 Impairment

3.2.5.1 Non-derivative financial assets

The company recognise loss allowances for ECLs on financial assets measured at amortised cost.

The company measure loss allowances at an amount equal to lifetime ECLs. Loss allowances for trade

receivables are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial

recognition and when estimating ECLs, the company consider reasonable and supportable information

that is relevant and available without undue cost or effort. This includes both quantitative and qualitative

information and analysis, based on the company's historical experience and informed credit assessment

and including forward-looking information.

Credit-impaired financial assets

At each reporting date, the company assess whether financial assets carried at amortised cost are credit

impaired. A financial asset is 'credit impaired' when one or more events that have a detrimental impact on

the estimated future cash flows of the financial asset have occurred.

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

- Significant financial difficulty of the borrower or issuer;

- a breach of contract such as a default or being more than 90 days past due;

- The restructuring of a loan or advance by the company on terms that the company would not

consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial reorganisation.

3.2.5.2 Non-financial assets

The carrying amount of the Company's non-financial assets other than inventories and deferred tax

assets are reviewed at each reporting date to determine whether there is any indication of impairment. If

any such indication exists, or when annual impairment testing for an asset is required, then the asset's

recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates

cash inflows from continuing use that are largely independent of the cash inflows of other assets or

CGUs. An impairment loss is recognized if the carrying amount of an asset or cash generating unit (CGU)

exceeds its recoverable amount. Goodwill arising from a business combination is allocated to CGUs or

groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to

sell. In assessing value in use, the estimated future cash flows are discounted to their present value

using a pre-tax discount rate that reflects current market assessments of the time value of money and the

risks specific to the asset or CGU.




An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated

recoverable amount.

Impairment losses are recognized in Profit or Loss. Impairment losses recognized in respect of CGUs

are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs),

and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata

basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is

reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that

would have been determined, net of depreciation or amortization, if no impairment loss had been

recognized.

3.3 Stated capital

Ordinary shares

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the

period in which they are approved.

3.4 Property, plant and equipment

3.4.1 Recognition and measurement

Property, Plant, and Equipment are recognized if it is probable that future economic benefits associated

with the asset will flow to the Company and the cost can be reliably measured.

All property, plant and equipment are initially recorded at cost. Cost includes expenditure that is directly

attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of

materials and direct labour and any other costs directly attributable to bringing the assets to a working

condition for their intended use.

If a significant part of an item of property, plant and equipment has different useful lives, then they are

accounted for as separate items (major components) of property, plant and equipment.

3.4.2 Subsequent Measurement

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will flow to the

Company and the cost of the item can be measured reliably. All other repairs and maintenance are

charged to the profit or loss during the financial period in which those are incurred.

Buildings are subsequently shown in the statement of financial position at market value, based on

valuations done by external independent valuers, being the fair value at the date of revaluation, less any

subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations

are performed with sufficient regularity such that the carrying amounts do not differ materially from those

that would be determined using fair value at the end of reporting date every 5 years.

Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to

other comprehensive income and accumulated in equity, except to the extent that it reverses a

revaluation decrease for the same asset previously recognised in profit or loss, in which case the

increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in the

carrying amount arising on the revaluation is charged to profit or loss to the extent that the loss exceeds

the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset. Each

year the difference between depreciation based on the revalued carrying amount of the asset and

depreciation based on the asset's original cost is transferred from revaluation reserve to retained

earnings/ accumulated losses.






All other classes of assets included under property, plant and equipment are stated at cost less

accumulated depreciation and accumulated impairment losses, if any. An asset's carrying amount is

written down immediately to its recoverable amount if the asset's carrying amount is greater than its

estimated recoverable amount.

3.4.3 Subsequent cost

Subsequent cost is capitalized only if is probable that the future economic benefits associated with the

expenditure will flow to the Company. The costs of day-to-day servicing of property, plant and equipment

is recognized in profit or loss as incurred.

3.4.4 Depreciation

Depreciation is charged to profit or loss so as to write off the cost or valuation of assets, over the

estimated useful lives, using the straight-line method. The estimated useful lives, residual values and

depreciation method are reviewed at each year end, with the effect of any changes in such estimates

accounted for prospectively.

The estimated useful lives for the current and comparative years of significant items of property, plant and

equipment are as follows;

No of Years1 - 10

Landscaping 93 years from 19871 - 10

Buildings 3 - 401 - 10

Hotel equipment 1 - 101 - 10

Plant, machinery and equipment 1 - 10

Hotel furniture and fittings 1 - 10

Office furniture and equipment 5 - 10

Motor vehicle 4

Depreciation of an asset begins when it is available for use or, in respect of self-constructed assets, from

the date that the asset is completed and ready for use.

Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and

the date that the asset is derecognized.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted

if appropriate.

3.4.5 Derecognition

An item of property, plant and equipment is derecognized upon disposal of or when no future economic

benefits are expected from its use or disposal. The gains or losses arising on derecognition (disposal or

retirement) of an item of property, plant and equipment are determined by comparing the proceeds from

disposal with the carrying amount of the property, plant and equipment and are recognized net within

'other income' in the Statement of profit or loss. When revalued assets are sold, the amounts included in

the revaluation reserve are transferred to retained earnings.


3.4.6 Capital work-in-progress

Capital work-in-progress represents the accumulated cost of materials and other costs directly related to

the construction of an asset. Capital work-in- progress is transferred to the respective asset accounts at

the time it is substantially completed and ready for its intended use.

3.5 Right to use of Assets

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract

is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period

of time in exchange for consideration. To assess whether a contract conveys the right to control the use of

an identified assets, the Company uses the definition of a lease in SLFRS 16.

3.5.1 As a lessee

At commencement or on modification of a contract that contains a lease component, the Company

allocates the consideration in the contract to each lease component on the basis of its relative stand-

alone prices. However, for the leases of property the Company has elected not to separate non-lease

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

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The

right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability

adjusted for any lease payments made at or before the commencement date, plus any initial direct costs

incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the

underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the

commencement date to the end of the lease term, unless the lease transfers ownership of the underlying

asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the

Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the

useful life of the underlying asset, which is determined on the same basis as those of property and

equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and

adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be

readily determined, and the Company's incremental borrowing rate. Generally, the Company uses its

incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external

financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset

leased.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate

as at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise,

lease payments in an optional renewal period if the Company is reasonably certain to exercise an

extension option, and penalties for early termination of a lease unless the Company is reasonably

certain not to terminate early.






The lease liability is measured at amortised cost using the effective interest method. It is remeasured

when there is a change in future lease payments arising from a change in an index or rate, if there is a

change in the Company's estimate of the amount expected to be payable under a residual value

guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or

termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying

amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use

asset has been reduced to zero.

The Company presents right-of-use assets that do not meet the definition of investment property in

'property, plant and equipment' and lease liabilities in 'loans and borrowings' in the statement of financial

position.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value

assets and short-term leases, including IT equipment. The Company recognises the lease payments

associated with these leases as an expense on a straight-line basis over the lease term.

3.6 Intangible assets

3.6.1 Recognition and measurement

An Intangible Asset is recognised if it is probable that future economic benefits that are attributable to the

asset will flow to the Company and the cost of the asset can be measured reliably. Software acquired by

the Company is stated at cost less accumulated amortisation and accumulated impairment losses.

Expenditure on internally developed software is recognised as an asset when the Company is able to

demonstrate its intention and ability to complete the development and use the software in a manner that

will generate future economic benefits and can reliably measure the costs to complete the development.

The capitalised costs of internally developed software include all costs directly attributable to developing

the software and capitalised borrowing costs and are amortised over its useful life. Internally developed

software is stated at capitalised cost less accumulated amortisation and impairment.

3.6.2 Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in

the specific asset to which it relates. All other expenditure, including expenditure on internally generated

goodwill and brands, are recognized in profit or loss as incurred.

3.6.3 Amortization

Amortization is recognised in profit or loss on a straight-line basis over the estimated useful life of the

software, from the date that it is available for use since this most closely reflects the expected pattern of

consumption of the future economic benefits embodied in the asset. The estimated useful life of software

is five years.

The estimated useful lives for the current and comparative years are as follows;

No of Years

Software licenses 5

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted

if appropriate.


3.6.4 Derecogniton

Gains or losses arising from derecognition of an intangible asset are measured as the difference

between the net disposal proceeds and the carrying amount of the assets and are recognized in profit or

loss when the asset is derecognized.

3.7 Inventories

Stock of food and beverages, other consumables and engineering supplies are carried at the lower of

cost (computed on a Weighted Average basis) or net realisable value. Net realisable value is the

estimated selling price in the ordinary course of business less the estimated costs of completion and

selling expenses. Cost includes the cost of fair value of consideration paid including duties and taxes

(other than those refundable), inward freight, and other expenditure directly attributable to the purchase.

Trade discounts and rebates are deducted in determining the cost of purchase.

3.8 Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value and are used by the Company in the management of its short-term commitments.

3.9 Employee retirement benefits

3.9.1 Short-term employee benefits

The costs of all short-term employee benefits (that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service) are recognised during the period in which the employee renders the related service. The accruals for employee entitlements to benefits such as salaries, bonuses and annual leave represent the amounts which the Company has a present obligation to pay as a result of the employee's services and the obligation can be measured reliably. The accruals have been calculated at undiscounted amounts based on current salary levels at the reporting date.

3.9.2 Defined contribution plans - Employees’ Provident Fund and Employees’ Trust Fund

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in the profit or loss as in the periods during which services are rendered by employees.

All employees of the Company are members of the Employees' Provident Fund and the Employees Trust Fund, to which the Company contributes 12% and 3% respectively of such employees' basic or consolidated wage or salary.

3.9.3 Defined benefit plans

The Company has a Gratuity Cash Accumulation Policy with Life Insurance Corporation (Lanka)Limited to cover its employee's gratuity liability. The Defined Benefit Plans are administrated by LIC (Lanka) covering its employees. When an employee retires or exits from the company, LIC (Lanka) Ltd will pay his/ her Gratuity to the employee on the date of payment of gratuity/exit. Gratuity of the employee is guaranteed for the past service of the employee subject to the available fund balance with them as contributed by the company.




One of the salient features of the policy is that in the event of any unfortunate death of an employee during his/her employment with the company, LIC (Lanka) will pay the applicable gratuity for the pending years of service of the employee with the company from its own fund against a payment of a nominal premium by considering the future balance period of service of the employee.

The Defined Benefit Obligation recognized in the statement of financial position represents the present value of the Defined Benefit Obligation as reduced by the fair value of plan assets.

However, under the Payment of Gratuity Act No. 12 of 1983, the liability to an employee arises only on completion of five years of continued service. Liabilities are computed on the basis of half a month's salary for each year of completed service. The company's obligations under the said Act is determined based on an actuarial valuation using the projected unit credit method carried out by a professional actuary.

The company recognizes all actuarial gains and losses arising from defined benefit plans immediately in the other comprehensive income.

3.9.4 Termination benefits

Termination benefits are recognized as an expense when the Company and the Company is demonstrably committed, without a realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense if the Company and the Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.

3.10 Borrowings

Bank and other borrowings are initially recognised at the fair value of the consideration received less

directly attributable transaction costs. They are subsequently measured at amortised cost. Finance

charges, including the transaction costs and any discount or premium on issue, are recognised in the

profit or loss using the effective interest rate method.

Borrowings are classified as non-current when the repayment date is more than 12 months from the

period-end date or where they are drawn on a facility with more than 12 months to expiry.

3.10.1 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset

that normally takes a substantial period of time to get ready for their intended use or sale, are added to the

cost of those assets, until such time the assets are substantially ready for their intended use or sale.

Income earned from temporarily investing specific borrowings pending their expenditure on a qualifying

asset is deducted from the borrowing costs eligible to be added to the carrying amount. All other

borrowing costs are recognized in profit or loss in the year in which they are incurred.

3.11 Provisions

Provisions are recognised when the Company has a binding present obligation. This may be either legal

because it derives from a contract, legislation or other operation of law, or constructive because the

Company created valid expectations on the part of third parties by accepting certain responsibilities. To

record such an obligation, it must be probable that an outflow of resources will be required to settle the

obligation and a reliable estimate can be made for the amount of the obligation. The amount recognized




as a provision and the indicated time range of the outflow of economic benefits are the best estimate

(most probable outcome) of the expenditure required to settle the present obligation at the reporting

date, considering the risks and uncertainties surrounding the obligation. Non-current provisions are

discounted if the impact is material.

3.12 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence will be

confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the

control of the Company or a present obligation that is not recognized because it is not probable that an

outflow of resources will be required to settle the obligation.

A contingent liability also arises in extremely rare cases where there is a liability that cannot be

recognized because it cannot be measured reliably. The Company does not recognize a contingent

liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by

the occurrence or non-occurrence of one or more uncertain future events beyond the control of the

Company. The Company does not recognize contingent assets but discloses its existence where inflows

of economic benefits are probable, but not virtually certain. In the acquisition of subsidiaries by the

Company under business combinations, contingent liabilities assumed are measured initially at their fair

value at the acquisition date, irrespective of the extent of any minority interest.

3.13 Revenue recognition

3.13.1 Revenue from operations

Revenue is measured at the fair value of the consideration received or receivable. Revenue comprises

sale of room nights, food and beverages and rental income.

To determine whether to recognise revenue, the Company follows a 5 'step process:

1. Identifying the contract with a customer.

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the

5. Recognising revenue when/as performance obligation(s) are satisfied.

Revenue is recognised upon rendering of the service, provided persuasive evidence of an arrangement

exists, tariff / rates are fixed or are determinable and collectability is reasonably certain. Revenue from

sale of goods or rendering of services is net of indirect taxes, returns and discounts. Following are the

criteria of recognition of difference type of income sources,




Type of service Nature and timing of the satisfaction of performance obligation

Provision of The main obligation in the customer contract is to provide rooms for

accommodation guests accommodation. This is represented in the Room Revenue

reported in the financial statements. Revenue under this segment is

recognised on the rooms occupied on a daily basis over the period of the

stay. Invoice is raised to customer on completion of the duration of the stay.

Provision of Food and The following services are rendered under this performance obligation:

beverage i) Provision of BB/HB/FB meal for guests occupying the hotels which is part

and partial of the contract entered into. Revenue is recognized at the time of

sale and invoice to the customers on the completion of the duration of the

stay.

ii) Provision of extra food and beverages Revenue is recognised at the time

of sale and invoice to the customers at the time of consumption.

Provision of Laundry, These services are provided to customers as they are implied as business

Telephone, Water practices in the industry and create a valid expectation of the customer.

sports, etc Revenue is recognised at the time of provision of service and invoice is

raised at the time of service is consumed.

Management fee Management fees earned from hotels managed by the Company is usually

under long-term contracts with the hotel owner and are recognised when

earned in accordance with the terms of the contract when collectability is

certain.

Rental income Rental income is recognized on a straight-line basis over the term of the

lease.

3.14 Expenditure recognition

Expenses are recognized in the profit or loss on the basis of a direct association between the cost

incurred and the earning of specific items of income. All expenditure incurred in running the business and

in maintaining property, plant and equipment in a state of efficiency has been charged to the profit or loss.

For the purpose of presentation in profit or loss, the “function of expenses” method has been adopted, on

the basis that it presents fairly the elements of the Company's performance.

3.15 Finance income and finance costs

Finance income comprises interest income on funds invested. Interest income is recognized as it

accrues in profit or loss, using the effective interest method.

Finance expenses comprise interest expense on borrowings classified as debt. Borrowing costs that are

not directly attributable to the acquisition, construction or production of a qualifying asset are recognized

in income statement using the effective interest method.

Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis

as either finance income or finance cost depending on whether foreign currency movements are in a net

gain or net loss position.

3.16 Income tax expense

Current and deferred taxes are recognised in profit or loss, except when they relate to items that are

recognised in other comprehensive income or directly in equity, in which case, the current and deferred

tax are also recognised in other comprehensive income or directly in equity respectively.




3.16.1Current taxation

Current Tax expenses are accounted in the same period to which the revenue and expenses relate.

Provision for current income tax is made for the tax liability payable on taxable income after considering

tax allowances, deductions and exemptions determined in accordance with the provisions of the Inland

Revenue Act No. 24 of 2017 and its subsequent amendments.

3.16.2Deferred taxation

Deferred Tax is recognised by providing for temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred Tax is not recognised for, Temporary differences on the initial recognition of assets or liabilities

in a transaction that is not a business combination and that affects neither accounting nor taxable profit or

loss.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary

difference to the extent that it is probable that future taxable profit will be available against which they can

be used. Future taxable profits are determined based on the reversal of relevant taxable temporary

difference is insufficient to recognised a differed tax asset in full, then future taxable profits, adjusted for

reversal of existing temporary differences, are considered, based on the business plans. Differed tax

assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that

the related tax benefit will be realised; such reduction are reversed when the probability of future taxable

profits improves.

Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent

that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when

they reverse, using tax rates in enacted or substantively enacted at the reporting date. The measurement

of deferred tax reflects the tax consequences that would follow from the manner in which the Company

expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

3.16.3Tax exposures

In determining the amount of current and deferred tax, the Company considers the impact of uncertain

tax positions and whether additional taxes and interest may be due. This assessment relies on estimates

and assumptions and may involve a series of judgments about future events.

New information may become available that causes the Company to change its judgment regarding the

adequacy of existing tax liabilities; such changes to tax liabilities will impact the tax expense in the period

that such a determination is made.

3.17 Related Party Transactions

Disclosure has been made in respect of the transactions in which one party has the ability to control or

exercise significant influence over the financial and operating policies decisions of the other, irrespective

of whether a price is charged.

3.19 Statement of cash flows

Cash flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the

effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or

payments, as stipulated in LKAS 7- statement of cash flows. Cash flows for the year are classified by

operating, investing and financing activities Cash and cash equivalents comprise of cash in hand, cash

at bank and bank overdrafts.




3.19 Earnings per Share

The company presents basic Earnings Per Share (EPS) based on profit or loss attributable to the

ordinary shareholders. Basic EPS is calculated by dividing the profit or loss attributable to ordinary

shareholders by the weighted average number of ordinary shares outstanding during the period.

3.20 Dividends on ordinary shares

Dividends on ordinary shares are recognized as a liability and deducted from equity when they are

approved by the Company's shareholders. Interim dividends are deducted from equity when they are

declared and are no longer at the discretion of the Company.

3.21 Segment reporting

A segment is a distinguishable component engaged in providing services and that is subject to risks and

returns that are different to those of other segments. The company does not have distinguishable

components to be identified as a segment as all operations are treated as one segment.

3.22 Significant accounting judgments, estimates and assumptions

The preparation of financial statements requires the application of certain critical accounting

assumptions relating to the future. Further, it requires the management of the company to make

judgments, estimates and assumptions that affect the reported amounts of income, expenses, assets

and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However,

uncertainty about these assumptions and estimates could result in outcomes that require a material

adjustment to the carrying amount of the asset or liability in future periods. Hence, actual experience and

results may differ from these judgments and estimates.

In the process of applying the company's accounting policies, management has made the following

judgments, estimates and assumptions which have the most significant effect on the amounts

recognized in the financial statements:

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period in which the estimate is revised and future periods

affected.

3.22.1 Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and tax

credits to the extent it is probable that taxable profits will be available against which these credits/losses

can be utilised. The Company estimates deferred tax assets and liabilities based on current tax laws and

rates and in certain cases, business plans, including management's expectations regarding the manner

and timing of recovery of the related assets. Changes in these estimates may affect the amount of

deferred tax liabilities or the valuation of deferred tax assets and the tax charges in the profit or loss.

3.22.2 Fair value of property, plant and equipment

The fair value of buildings is determined based on the valuations carried out by independent valuers.

When current market prices of assets of similar nature are available, such evidence is taken into account

in determining the fair values of such assets. The fair value changes are determined every five years.

3.22.3 Useful life-time of the property, plant and equipment and intangible assets

The Company has estimated useful life of each class of assets based on the nature of assets, the

estimated usage of the asset, the operating condition of the asset, past history of replacement,

anticipated technological changes, etc. The Company reviews the useful life of property, plant and




equipment and Intangible assets as at the end of each reporting period. This reassessment may result in

change in depreciation expense in future periods.

3.22.4 Impairment losses on property, plant and equipment and intangible assets

Property, plant and equipment and Intangible assets that are subject to amortisation / depreciation are

tested for impairment when events occur or changes in circumstances indicate that the recoverable

amount of the cash generating unit is less than its carrying value. The recoverable amount of cash

generating units is higher of value-in-use and fair value less cost to sell. The calculation involves use of

significant estimates and assumptions which includes turnover and earnings multiples, growth rates and

net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic

and market conditions.

3.22.5 Defined benefit plans

The cost of the defined benefit plans and the present value of the defined benefit obligation are based on

Actuarial valuation using the projected unit credit method. An actuarial valuation involves making various

assumptions that may differ from actual developments in the future. These include the determination of

the discount rate; future salary increases and mortality rates.

Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is

highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, the management considers the interest rates of Sri Lanka

Government Bonds. The mortality rate is based on publicly available mortality tables. Future salary

increases is based on expected future inflation rates and expected future salary increase rate of the

company.

3.22.6 Impairment Measurement of Financial Investments

The measurement of impairment losses under SLFRS 9 across all categories of financial assets requires

judgement, in particular, the estimation of the amount and timing of future cash flows and collateral

values when determining impairment losses.

4 NEW STANDARDS AND CHANGES TO ACCOUNTING STANDARDS NOT

EFFECTIVE AS AT THE REPORTING DATE

A number of new standards and amendments to standards are effective for annual periods beginning stafter 1 January 2021 and earlier application is permitted; however, the Company has not early adopted

the new or amended standards in preparing these financial statements.

· COVID-19-Related Rent Concessions (Amendment to SLFRS 16).

The amendments provide relief to lessees from applying SLFRS 16 guidance on lease modification

accounting for rent concessions arising as a direct consequence of the COVID-19 Pandemic. A lessee

that applies the practical expedient is not required to assess whether eligible rent concessions are lease

modifications, and accounts for them in accordance with other applicable guidance. The resulting

accounting will depend on the details of the rent concession.

The practical expedient will only apply if

- the revised consideration is substantially the same or less than the original consideration;

- the reduction in lease payments relates to payments due on or before 30 June 2021; and

- no other substantive changes have been made to the terms of the lease




st The amendment applies to annual reporting periods beginning on or after 01 June 2020. The Company

does not anticipate this amended to have a significant impact on the Company's financial statements.

· Interest Rate Benchmark Reform – Phase 2 (Amendments to SLFRS 9, LKAS 39, SLFRS 7,

SLFRS 4 and SLFRS 16)

The amendments address issues that might affect financial reporting as a result of the reform of an

interest rate benchmark, including the effects of changes to contractual cash flows or hedging

relationships arising from the replacement of an interest rate benchmark with an alternative benchmark

rate. The amendments provide practical relief from certain requirements in SLFRS 9, LKAS 39, SLFRS

7, SLFRS 4 and SLFRS 16 relating to:

- changes in the basis for determining contractual cash flows of financial assets, financial liabilities

and lease liabilities; and

- hedge accounting.

The amendments will require the Company to disclose additional information about the entity's exposure

to risks arising from interest rate benchmark reform and related risk management activities. The

Company is in the process of assessing the impact of this standard on its accounting and reporting. This stamendment is effective for annual periods beginning on or after 1 January 2021.

· Property, Plant and Equipment: Proceeds before Intended Use (Amendments to LKAS 16).

This amendment prohibits deducting from the cost of an item of property, plant and equipment any

proceeds from selling items produced while bringing that asset to the location and condition necessary

for it to be capable of operating in the manner intended by management. Instead, an entity recognizes

the proceeds from selling such items, and the cost of producing those items, in profit or loss. st The amendment applies to annual reporting periods beginning on or after 1 January 2022.

· Onerous contracts – Cost of Fulfilling a Contract (Amendments to LKAS 37)

The amendments specify which costs an entity includes in determining the cost of fulfilling a contract for

the purpose of assessing whether the contract is onerous. The amendments apply for annual reporting stperiods beginning on or after 1 January 2022 to contracts existing at the date when the amendments are

first applied. At the date of initial application, the cumulative effect of applying the amendments is

recognised as an opening balance adjustment to retained earnings or other components of equity, as

appropriate. The Company does not anticipate this amended to have a significant impact.

· Annual Improvements to SLFRS Standards 2018–2020.

As part of its process to make non-urgent but necessary amendments to accounting Standards, the IASB

International Accounting Standards Board (the Board) has issued the Annual Improvements to IFRS

Standards 2018–2020. The amendments are effective for annual reporting periods beginning on or after

1 January 2022. Key Aspects covered is as follow:

I. SLFRS 1 First-time Adoption of International Financial Reporting Standards

This amendment simplifies the application of SLFRS 1 for a subsidiary that becomes a first-time

adopter of SLFRS Standards later than its parent

II. SLFRS 9 Financial Instruments

This amendment clarifies that – for the purpose of performing the ''10 per cent test' for derecognition of

financial liabilities – in determining those fees paid net of fees received, a borrower includes only fees

paid or received between the borrower and the lender, including fees paid or received by either the

borrower or lender on the other's behalf




· Classification of Liabilities as Current or Non-current (Amendments to LKAS 1).

The amendments in Classification of Liabilities as Current or Noncurrent (Amendments to LKAS 1) affect

only the presentation of liabilities in the statement of financial position not the amount or timing of

recognition of any asset, liability income or expenses, or the information that entities disclose about

those item

The Key amendments are as follows:

- the classification of liabilities as current or non-current should be based on rights that are in

existence at the end of the reporting period. The classification is unaffected by expectations about

whether an entity will exercise its right to defer settlement of a liability. The standard also clarifies that

settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or

services.

st The amendment applies to annual reporting periods beginning on or after 1 January 2023




5 Revenue

Revenue (net of applicable taxes) is derived from the provision of the following services :

Accommodation

Food & Beverage

Banquet other income

Rent income

Laundry income

Telephone income

Others

6 Other Income

Write back of payables

Other income from scrap sales

7.1 Finance income

Interest income

Gain on disposal of property, plant and equipment

For the year ended 31 March

2021

2020

Management fees from Airport Garden Hotel

Insurance claim for business losses

Consideration payable to customers

67,870,626

349,175,434

32,936,860

21,540,971

716,467

11,634

11,951,100

484,203,092

6,992,123

6,992,123

-

17,794,888

686,987

54,000

-

17,053,901

-

1,961,761

1,961,761


Notes to the Financial Statements (Contd.)(All amounts are shown in Sri Lankan Rupees)

1,185,956,943

1,094,975,503

49,765,312

27,789,318

6,065,618

349,978

26,961,167

2,391,582,325

(281,514)

57,293,028

74,006,450

907,588

27,000

15,778,834

-

7 Net finance expense

7.1 Finance expenses

Interest expenses on Intercompany borrowings

Exchange loss

1,724,976

91,977,105

179,860,852

Interest expenses on bank borrowings 86,158,771

-

139,714,334

263,586,126

123,871,792

172,868,729 261,624,365Net Finance Expense


Defined contribution plans

Defined benefit plans (Note 8.2.1)

8.1 Staff costsSalary cost

8 Loss before tax

loss before tax for the year is stated after chargingall expenses including the following :

Directors' fees

Staff costs (Note 8.1)

Management fee

Legal fees

Depreciation on property, plant and equipment

Amortisation of leasehold property

Repairs and maintenance of property, plant and equipment

Auditors' remuneration - Audit

Impairment Provision for Inventories

9 Income Tax Expense

2021


2020

9.1 Applicable Rates of Income Tax

Amortisation of intangible assets

Receivables from AGH written off during the year

Economic service charge write-off/ (written back)

Return on plan assets

Interest cost

8.2 Defined benefit plan cost

Current service cost

8.2.1 Amount recognized in profit or loss statement

Remeasurement loss /(gain) of plan assets

Actuarial loss /(gain) on retirement benefit obligation

483,013,723

16,203,334

42,809,676

542,026,733

758,576

542,026,733

367,753,328

14,422,136

796,427

13,190,952

32,997,417

1,166,000

-

3,513,223

3,640,65812,256,321

9,344,234

14,525,457

(7,666,357)

16,203,334

13,491,614

2,149,474

15,641,088

8.2.2 Amount recognized in other comprehensive income



-Non Audit

Impairment Provision for Trade Receivables -

440,675

805,823,738

377,537,866

123,926,625

3,531,310

13,190,952

89,332,238

1,266,000

3,868,909

4,566,389

- (3,745,940)

125,000

4,784,296

730,014,299

25,080,578

50,728,861

805,823,738

8,784,019

18,126,231

(1,829,672)

25,080,578

(6,596,867)

632,351

(5,964,516)


The company is liable for taxation at the rate of 14% as per the first schedule of the Inland Revenue Act,

No 24 of 2017, on its profits derived from “promotion of tourism”. Income Tax for any other income is

computed at 24%.

2021


2020

In respect of the current year (Note 9.4)

9.2 Income tax expense recognized in the Income Statement

Income Tax Expense

Origination of deferred tax assets

Deferred tax expense (Note 9.8)

Total Income tax expense recognised in the Income Statement

Under provision of previous year

1,240,553

1,358,259

49,977,560

33,522,847

117,706

29,569,241

27,516,700

Net ofTax

Actuarial gains / (losses) arising fromretirement benefit obligations (13,451,336) 5,129,484

31 - 03 - 2020

9.3 Income tax expense recognised in other comprehensive income

(835,032)

Tax (Expense)/income

5,964,516

Beforetax

31 - 03 - 2021

Net ofTax

Tax (Expense)/income

2,189,752

Beforetax

(15,641,088)

Deferred taxItems that will not be reclassified toprofit or loss

Fair value (loss) / gain on investments inequity investments designated as at FVOCI 83,022

Total income tax recognised in othercomprehensive income 471,962,031 4,382,287(752,010)5,134,297 (77,089,977) 549,052,008

(5,567,372) 556,737 (5,010,635) (830,219) (747,197)



9.4 Reconciliation of Accounting Profit to Tax on current year

2021


2020

Accounting loss before income tax expense

(-) Other Sources of Income

Assessable Interest Income

Total Assessable Income

(+) Aggregate disallowed expenses

Assessable Income from Business

(-) Utilisation of tax losses

Taxable Income

(-) Aggregate allowable deductions

Income Tax Expense

(1,061,683,377)

(6,992,123)

608,094,934

5,168,969

5,168,969

(747,654,770)

-

5,168,969

(287,074,204)

1,240,553

(232,087,664)

(1,961,761)

683,870,526

1,961,761

124,506,271

122,544,510

(124,506,271)

-

(327,276,591)

-

Revaluation gain on building 490,424,002 --- (79,836,466) 570,260,468

Reversal of deferred tax Liability

(17,812,972) (19,821,458)

Deferred taxation

32,164,588 9,747,783

-

17,768,917

17,768,917




2021 2020

9.5 Tax Losses Carried Forward

Tax Losses brought forward

Adjustments to prior year tax liability and tax losses arisingduring the year

Tax Losses During the Year

Utilisation of tax losses

862,879,925

106,451,319

747,654,770

1,716,986,014

-

Tax Losses carried forward

1,081,186,914

(93,800,718)

-

862,879,925

(124,506,271)

9.6 Deferred Tax Liability

The following is the analysis of deferred tax liabilities/(assets) presentedin the Company's statement of financial position:

2021 2020

Deferred tax assets (96,572,465) (144,360,273)

Deferred tax liabilities 517,031,689 455,564,933

420,459,224 311,204,660

9.7 Analysis of recognised deferred tax assets / liabilities in the Statement of Financial Position

Deferred tax assets on,

Inventory provision

Loss allowance for trade receivables


Carry forward tax losses

Deferred tax liabilities on,

Property, plant and equipment

Right to use land - Revalued

Financial assets measured at FVOCI

Net recognised deferred tax liability

Temporary Tax effect Temporary Tax effectdifference difference

11,457,436 1,604,041 11,457,436 1,604,041

4,454,364 623,611 4,454,364 623,611

161,683,595 22,635,703 152,353,079 21,329,431

512,207,922

71,709,110

862,879,925

120,803,190

689,803,317 96,572,465 1,031,144,804 144,360,273

2,968,235,190 415,552,927 2,510,911,759 351,527,646 723,610,592 101,305,482 737,909,071 103,307,270

1,732,800

173,280

7,300,172

730,017

3,693,578,582 517,031,689 3,256,121,002 455,564,933

3,003,775,265 420,459,224 2,224,976,198 311,204,660

20202021


As at 31 March As at 31 March

9.8 Movement of deferred tax assets and liabilities

31-Mar-21



Inventory provision



Tax losses


31-Mar-20



Inventory provision



Tax losses


Opening

balance

Recognized

in P&L

Recognized in

OCI and Equity Closing balance

351,527,646 (15,811,184) 79,836,466 415,552,927

103,307,270 (2,001,788) - 101,305,482

(1,604,041) - - (1,604,041)

(623,611) - - (623,611)

(21,329,431) 883,480 (2,189,752) (22,635,703)

(120,803,190) 49,094,080 - (71,709,110)

730,017 - (556,737) 173,280

311,204,660 32,164,588 77,089,977 420,459,224

Opening

balance

Recognized

in P&L

Recognized in

OCI Closing balance

369,627,317 (18,099,671) - 351,527,646

105,029,057 (1,721,787) - 103,307,270

(1,062,394) (541,647) - (1,604,041)

(269,268) (354,343) - (623,611)

(22,066,716) (97,747) 835,032 (21,329,431)

(151,366,168) 30,562,978 - (120,803,190)

813,039 - (83,022) 730,017

300,704,868 9,747,783 752,010 311,204,660

9.9 Use of Judgements and Estimates

Deferred Tax Asset / Assessment of Recoverability

The Board of Directors carefully analysed the availability of the future taxable profits against which the unused

tax losses can be utilised. In this assessment the Company estimated the profitability using recently prepared

internal budgets and plans after considering the potential impact of COVID 19 and going concern in a very

conservative manner. In this assessment, directors note the composition of the carried forward tax loss as

given in the note 9.5 current estimated duration of recoverability of deferred tax asset is 03 years until March

2024. Further the management carried out sensitivity analysis to enhance the assumption of recoverability of

the deferred tax assets and based on the sensitivity analysis performed internally, the Company will be able to

utilise the tax losses amounting to Rs. 512 Mn within 03 years from the reporting date until March 2024.

According to provision of act, the Company can claim tax losses until Y/A 2023/24 in legal terms.

Deferred tax is an estimate computed based on the assumptions on available information as at the reporting

date. Hence these estimates are subject to change if there are further developments to any information, which

the assumptions are based at the time of estimation (i.e. further clarifications to the new IRD act). Such

changes to the estimates will be adjusted during the period the change occurs.

The Company recognized a Deferred Tax asset consequent to the changes in the Inland Revenue No. 24 of

2017. As per the new Inland Revenue act No. 24 of 2017 which is effective from 1st April 2018, 100% of taxable

income is allowed to be deducted against the tax losses incurred. According to the transitional provisions of

the new act, the brought forward tax loss can be claimed against taxable income for a period of 6 years

commencing from the year of assessment 2018/19.




9.11 Unrecognised Deferred Tax assets on Tax Losses

The Company has not recognized deferred tax asset amounting to Rs. 168,668,933/- arising on carriedforward tax losses amounting to Rs. 1,204,778,092/- as it is not probable that the future taxable profits willbe adequate to utilize the available tax losses in the foreseeable future (2019/2020 Nil).



2021 2020

Tax losses brought forward

9.10 Analysis of Tax LossesThe composition of tax losses is as follows

Adjustment to prior years

862,879,925

106,451,319

1,081,186,914

(93,800,718)

Tax losses utilised against taxable income - (124,506,271)

Tax loss during the year 747,654,770 -

Total carried forward tax losses as at 31st March 1,716,986,014 862,879,925

Unrecognized tax loss for deferred tax (1,204,778,092) -

Carried forward tax losses for deferred tax 512,207,922 862,879,925

Economic service charges and withholding taxes

9.12 Current Tax Assets and Liabilities

Current tax assets

15,909,507

15,909,507

29,592,986

29,592,986

15,909,507

29,592,986

Income tax payable

Current tax liabilities

- -

Loss attributable to shareholders (Rs.)

Weighted average number of shares in issue during the year

10 Earnings / (loss) per share - Basic

Basic earnings/ (loss) per share is calculated by dividing the profit/ (loss) attributable to the shareholdersby the weighted average number of ordinary shares in issue during the year.

Basic loss per share

(1,095,206,224)

139,637,494

(7.84)

10.1 Diluted Earning per share

There were no potential dilutive ordinary shares outstanding of any time during the year. Therefore,diluted Earnings per share is the same as Basic Earnings per share shown above.

(259,604,364)

139,637,494

(1.86)


As at 31 March As at 31 March

11 P

rop

erty

, p

lan

t an

d e

qu

ipm

ent

TA

L L

AN

KA

HO

TE

LS

PL

C

Not

es t

o th

e F

inan

cial

Sta

tem

ents

(C

ontd

.)(A

ll a

mou

nts

are

show

n in

Sri

Lan

kan

Rup

ees)

Ho

tel

Off

ice

Cap

ital

furn

itu

re &

furn

itu

re &

wo

rk in

fitt

ing

seq

uip

men

tp

rog

ress

As

at

31

Ma

rch

20

21

Co

st/

va

lua

tio

n

Accu

mu

late

d d

ep

recia

tio

n

Ca

rry

ing

va

lue

6,2

09

,97

0

8

,98

2,5

86

(2

,77

2,6

16

)

-

13

,00

0,0

00

(1

3,0

00

,00

0)

2,9

81

,00

0,0

00

2,9

81,0

00,0

00 -

35

6,3

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,20

5

1,2

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(9

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,40

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51

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0

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(4

36

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8,2

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(9

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Ad

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tion

Depre

cia

tion c

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e for

the y

ear

-

-

-

2,5

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,00

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23

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17

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1,6

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6,1

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2 -

(1

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)

- --

1,8

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de

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1 M

arc

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Ad

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r fr

om

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in

pro

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ss

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6,3

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Depre

cia

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the y

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-

(9

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2,7

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1,6

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3,3

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0

2,5

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(17

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39

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(7

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(4

6,4

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28

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9,5

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30

4,3

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3 -

23

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(69

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7,8

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)

1,0

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8 -

1,0

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2 -

-

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(1

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)

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- -

38

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33

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3,5

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1,4

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0

31

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2,1

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3,6

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2

31

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(7

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2

01

,10

0 -

(6

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3,9

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)

Bu

ild

ing

sL

an

dscap

ing

Pla

nt

&H

ote

l

mach

inery

eq

uip

men

t

Mo

tor

veh

icle

11.1

Due to the d

isco

ntin

uance

of th

e p

ropose

d M

ixed U

se P

roje

ct, th

e e

xpense

s in

curr

ed b

y TA

L L

anka

Hote

ls P

LC

during the p

ast

years

for

the p

roje

ct

appearing a

s C

WIP

was

reim

burs

ed in

full

by

TA

L H

ote

ls &

Reso

rts

Lim

ited d

uring th

e y

ear 2

01

9/2

0.

- C

ost

- C

ost

-

(3

67

,75

3,3

29

)

(8

35

,82

9)

83

5,8

29

2

1,5

89

,82

4 -

1,2

39

,57

1

(3

77

,53

7,8

66

)

57

,58

2,3

95

(1

,24

7,3

71

)

To

tal

De

-re

co

gn

itio

n o

f C

WIP

(N

ote

11

.1)

-

--

-

-

-

(27

,57

5,3

48

)

- (2

7,5

75

,37

8)

-R

evalu

ation s

urp

lus d

uring the y

ear

5

70

,26

0,4

68

-

-

-

-

-

-

57

0,2

60

,46

8


11.2 Property, plant and equipment under construction

Capital work in progress represents the amount of expenditure recognised under property, plant and

equipment during the construction of capital assets.

11.3 Title restriction on property, plant and equipment

There are no restrictions that existed on the title of the PPE of the Company as at the reporting date

except assets disclosured under note 11.9.

11.4 Acquisition of property, plant and equipment during the year

During the financial year, the Company acquired PPE to the aggregate value of Rs. 21 million (2019/2020

- Rs. 57 million) by means of cash.

11.5 Capitalisation of borrowing cost

There were no capitalised borrowing costs related to the acquisition of property, plant and equipment

during the year 2020/2021 (2019/2020 – Nil).

11.6 Temporarily Idle property, plant and equipment

There are no temporarily idle property, plant or equipment as at the reporting date. (2019/2020 - Nil)

11.7 Impairment of property, plant and equipment

The Board of Directors has assessed the potential impairment loss of PPE as at 31 March 2021 by

considering the impact from the COVID-19 pandemic as well. Based on the assessment, no impairment

provision is required to be made in the Financial Statements as at the reporting date in respect of PPE

(2019/2020 - Nil).

11.8 Fully depreciated property, plant and equipment in use

Property, plant and equipment includes fully depreciated assets with a cost of Rs. 1,536,459,770 (31

March 2020 - Rs. 1,502,458,651) which were in use during the year.

11.9 Property, plant and equipment pledged as security for liabilities

The value of the property, plant and equipment pledged as security against borrowings are disclosed in

Note 32.

11.10 Valuation of Property, Plant and Equipment

The Company uses the revaluation model of measurement for buildings. The Company engaged P. B.

Kalugalagedera & Associates, an accredited independent valuer, to determine the fair value of its

buildings. Fair value is determined by reference to market-based evidence. Valuations are based on

open market rates, adjusted for any difference in the nature, location or condition of the specific property.

The date of the most recent valuation was 31st March 2021.




TA

L L

AN

KA

HO

TE

LS

PL

C

Not

es t

o th

e F

inan

cial

Sta

tem

ents

(C

ontd

.)(A

ll a

mou

nts

are

sho

wn

in S

ri L

anka

n R

upe

es)

11.1

2 F

air

valu

e m

easu

rem

en

t

(a

) F

air

valu

e h

iera

rch

y

The fair v

alu

e o

f th

e B

uild

ing w

as

dete

rmin

ed b

y an e

xtern

al i

ndependent pro

pert

y va

luer,

havi

ng a

ppro

priate

reco

gniz

ed p

rofe

ssio

nal q

ualif

icatio

ns

and

exp

erience

in the c

ate

gory

of th

e p

ropert

y bein

g v

alu

ed. T

he v

alu

er

pro

vides

the fair v

alu

e o

f th

e p

ropert

y. B

ase

d o

n the v

alu

atio

n tech

niq

ues

use

d it

has

been c

lass

ified u

nder L

eve

l 3 in

fair v

alu

e h

iera

rchy.

(b

) V

alu

ati

on

tech

niq

ues a

nd

sig

nif

ican

t un

ob

serv

ab

le in

pu

ts u

sed

in m

easu

rin

g fa

ir v

alu

e

The fo

llow

ing ta

ble

show

s th

e v

alu

atio

n te

chniq

ues

use

d in

measu

ring fa

ir v

alu

e, a

s w

ell

as

the s

ignifi

cant u

nobse

rvable

inputs

use

d.

Valu

ati

on

tech

niq

ues

S

ign

ific

an

t u

no

bserv

ab

le

Ra

ng

e o

f E

sti

ma

tes

In

terr

ela

tio

ns

hip

be

twe

en

ke

y

in

pu

ts

for

un

ob

se

rva

ble

u

no

bs

erv

ab

le i

np

uts

& f

air

inp

uts

v

alu

e m

ea

su

rem

en

ts

Dir

ect

cap

ital co

mp

ari

so

n

Est

imate

d c

onst

ruct

ed

Rs.

5,0

00

- R

s. 9

,00

0

Po

sitiv

e c

orr

ela

tion

se

nsi

tivity

meth

od

co

st p

er

square

feet

(Est

ima

ted

Price

pe

r E

stim

ate

d f

air v

alu

e w

ou

ld

T

he v

alu

atio

n m

eth

od c

onsi

ders

th

e c

ost

of

pro

duci

ng s

ubst

itute

squ

are

fe

et

incr

ea

se/

(de

cre

ase

) if

price

pe

r

p

ropert

y w

ith e

qual u

tility

, by

calc

ula

ting t

he c

urr

ent

cost

of

S

qu

are

Fo

ot

wo

uld

incr

ea

se /

(d

ecr

ea

se).

repla

cing the s

ubje

ct im

pro

vem

ents

and s

ubtr

act

ing a

n

appro

xim

ate

am

ount fo

r depre

ciatio

n.

11.1

3

If p

rop

erty

, p

lan

t a

nd

eq

uip

men

t w

ere

sta

ted

on

th

e h

isto

rica

l co

st b

asi

s, t

hen

net

bo

ok

am

ou

nts

wo

uld

be

as

foll

ow

s

Ho

tel

Off

ice

furn

itu

re &

furn

itu

re &

fitt

ing

se

qu

ipm

en

t

Co

st

As

at

31

Ma

rch

20

21

Accu

mu

late

d D

ep

recia

tio

n

Ca

rry

ing

va

lue

8,9

82,5

86

(2,7

72

,61

6)

6,2

09,9

70

2,3

65,9

98,6

59

(1,4

31

,46

2,0

56

)

934,5

36,6

03

1,2

65,7

40,1

24

(90

9,4

06

,91

9)

356,3

33,2

05

609,6

99,8

52

(43

6,8

48

,29

2)

172,8

51,5

60

1,1

57,7

38,3

95

(98

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39

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176,1

99,1

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103,9

73,2

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(78

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7,6

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419,7

86,7

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602,7

56,4

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206,9

90,9

88

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51,6

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236,1

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103,3

88,9

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42,5

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58,5

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12 Intangible assets

Cost

Balance at the beginning of the year

Addition

Balance at the end of the year

As at 31 March

26,555,844

-

26,555,844

2021

As at 31 March

2020

Accumulated amortization and impairment losses


Amortization


Carrying value 3,627,361

3,513,223

19,415,260

22,928,483

13 Right to use of Assets

Valuation

Accumulated amortizationBalance at the beginning of the year

13.1 If the leasehold land was stated at historical cost, the net book value would be as follows :

Leasehold land

Cost

Accumulated depreciation

Carrying value

Amortization during the year


Carrying value

The Company obtained leasehold rights to the land situated at No. 25, Galle Face Centre Road, Colombo 3, for 99 years from the Urban Development Authority on 9 April 1981. The remaining lease period as at 31 March 2021 was 59 years. Based on the then Ruling 11 of the Urgent Issues Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanka, it was stated at revalued amounts. As per the statement of Recommended Practice for Right-to-use of Land on Lease issued by the Institute of Chartered Accountants of Sri Lanka, the carrying value inclusive of revalued amounts of the leased property is amortized over the remaining lease period. However with the adoption of SLFRS 16 Leases and the Application Guidance Notes on SLFRS 16 issued by the The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) the prevailing SoAT has been withdrawn on going forward as per the guidance for initial application of SLFRS 16 at transition.

83,000,000

52,655,915

( )30,344,085

778,266,507

412,547,341

1,204,004,800

13,190,952 425,738,293

26,555,844

1,408,573

25,147,271

7,140,584

4,566,389

14,848,871

19,415,260

83,000,000

53,548,388

(29,451,612)

791,457,459

399,356,389

1,204,004,800

13,190,952 412,547,341


The Company designated the investments shown below as equity securities at FVOCI because these equity secrities represent investments that the Company intends to hold for the long term for strategic purposes.

The investment in ordinary shares of Lanka Island Resorts Ltd has been measured at fair value on a net assets value (Rs. 11.23 per share) basis and the fair value gain / (loss) has been classified as fair value reserve.

14 Investments clasified as FVOCI

15 Inventories

Food, beverages and tobacco

Engineering items

Other consumables

Less : Provision for impairment of inventories (Note 15.1)

14.1 Investment in ordinary shares of Lanka Island Resorts Ltd.

Investments in ordinary shares of Lanka Island Resorts Ltd -(Note 14.1)


Notes to the Financial Statements (Contd.)( All amounts are shown in Sri Lankan Rupees)

15.1 Provision for impairment of inventories


Provision during the year


16 Trade and other receivables

Trade receivables

Less : Impairment Provision for trade receivables (Note 16.1)

Trade receivables - net

Receivables from Airport Garden Hotel Limited

Other receivables

As at 31 March

2021

As at 31 March

2020

21,526,929

5,000,170

40,139,273

66,666,372

(11,457,436)

55,208,936

15,820,600

15,820,600

11,457,436

-

11,457,436

26,130,456

35,168,980

( )4,454,364

21,676,092

11,449,986

2,042,902

21,387,972

21,387,972

Balance as at the beginning of the year

Fair value gain / (loss) on investments

Balance as at the end of the year

21,387,972

(5,567,372)

15,820,600

22,218,191

( )830,219

21,387,972

29,698,710

6,244,007

47,014,132

82,956,849

(11,457,436)

71,499,413

7,588,527

3,868,909

11,457,436

132,722,893

146,989,440

(4,454,364)

128,268,529

16,540,088

2,180,823



As at 31 March

2021

As at 31 March

2020

16.1 Impairment Provision for trade receivables



Impairment Provision recognized during the year

Write-off of loss allowance of trade receivables

4,454,364

-

-

4,454,364

4,454,364

4,784,296

( )2,253,277

1,923,345

17 Amounts receivable from related parties

18 Deposits, prepayments and advances

Deposits

Prepayments

Advances (Note 18.1)

Lanka Island Resorts Limited

-

85,522,403

8,371,790

39,712,255

37,428,358

776,800

PIEM Hotels Limited

TAL Maldives Resort (Pvt) Limited

1,084,344

42.071

1,042,273

1,214,151

42,071

395,280

103,734,887

17,260,873

49,045,656

37,428,358

18.1 The Company has recorded Supplier Advances , Staff Advances and festival Advances under the Advances.

19 Investment in Fixed Deposits


Total Investment in Fixed Deposits

Investment during the year

Withdrawals during the year

140,296,748

136,850,000

(50,000,000)

50,000,000

50,491,667

50,000,000

-

-

Exchange gain/(loss) 1,855,000 -

Balance at the end of the year 138,705,000 50,000,000

Interest Receivable 1,591,748 491,667

140,296,748 50,491,667

Non current Assets 140,296,748 -

Current Assets - 50,491,667




20 Cash and cash equivalents

Cash at bank

Short term investments - Fixed deposits (3 Months)

Cash in hand - Main cash

- Petty cash


As at 31 March

As at 31 March

20202021

20,041,175

-

278,467

2,072,000

23,307,132

Cheques in hand 915,490

Bank Overdraft (109,175,055)

Cash and Cash Equivalent for the purpose of cash flow statement (85,867,923)

89,901,640

150,000,000

1,011,038

2,072,000

245,240,404

2,255,726

(33,290,215)

211,950,189

21 Stated Capital Issued and fully paid

139,637,494 Ordinary Shares 1,396,374,941 1,396,374,941

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

22 Revaluation reserve (net of tax)

Balance at the beginning of year

Balance at the end of year

Depreciation transfer

1,077,607,167

1,472,378,141

(95,653,028)

Transfer of Revaluation Reserve as part of the transition adjustment -

The revaluation reserve relates to lease hold building which has been revalued by the Company

Deferred Tax relating to revaluation of building (79,836,466)

Revaluation gain during the year 570,260,468

1,922,291,597

1,077,607,167

(94,476,879)

(750,207,551)

-

-

23 Fair value reserve



Changes in fair value (Note 23.1)

Deferred tax relating to changes in fair value

6,370,151

1,559,516

(5,567,372)

556,737

This represents the cumulative net change in fair value of equity securities designated at FVOCI untilthe investments are derecognized.

7,317,348

6,570,151

(830,219)

83,022

23.1 The amounts which represented in the fair value reserves are unrealized gain on level 3 hierarchy of equity investments.




24 Loans and Borrowings

Current

Bank borrowings

Lease payment in respect of leasehold land

Non-current

Bank borrowings

Total borrowings

As at 31 March

2021

As at 31 March

2020

422,503,407

2,000,000

424,503,407

134,917,676

2,468,535,740

2,044,032,333

1,909,114,657

Related party borrowings - TAL Hotels and Resorts Limited

309,079,137

2,000,000

311,079,137

-

2,113,670,909

1,802,591,772

1,802,591,772

24.1 Movement in Loans and Borrowings


Loans received during the year

Loan repayments during the year

2,466,535,740

184,917,676

-

2,111,310,492

2,111,670,909

250,000,000

(285,020,635)

2,007,309,925

Effect of movement in exchange rates 93,374,745 139,021,202

Balance at the end of the year 2,389,602,913 2,111,310,492

Interest Payable on Loan 76,932,827 360,417

2,466,535,740 2,111,670,909

Current 422,503,407 309,079,137

Non Current 2,044,032,333 1,802,591,772

24.2 Maturity Analysis of Loans and Borrowings

Within 1 year

Between 2 and 5 years

Lease payments in respect of leasehold land

Not later than 1 year

Later than 1 year and not later than 5 years

Between 1 and 2 years

422,503,407

1,377,891,233

2,466,535,740

2,000,000

-

2,000,000

666,141,100

309,079,137

1,185,154,332

2,111,670,909

2,000,000

-

2,000,000

617,437,440


24.3 The interest rate exposure on the bank borrowings as at the reporting date are as follows :

- Hatton National Bank (Loan 1 - USD 4.00 Mn.)



3 months LIBOR

+3.6%

3 months LIBOR

+3.6%

3 months LIBOR

+3.6%

- Hatton National Bank (Loan 4 - LKR 250 Mn.) 3.46% Per Annum

3 months LIBOR

+3.6%

3 months LIBOR

3 months LIBOR

+3.6%

- Hatton National Bank (Loan 5 - LKR 25 Mn.) 4% Per Annum -

+3.6%

3.46% Per Annum

- Hatton National Bank (Loan 6 - LKR 25 Mn.) 4% Per Annum -

- Loan From TAL Hotels and Resorts Limited(Loan 7- USD 700 Mn) 6% Per Annum -



Hatton National Bank has initially provided a capital and interest moratorium of 6 months based on the guide lines issued by the Central Bank of Sri Lanka, effective from 1st April 2020. This is subsequently extended by further 12 months until 30th September 2021.

24.4 Debt Moratoriums

As at 31 March

2021

As at 31 March

2020

25 Retirement benefit obligations

Present value of defined benefit obligation (Note 25.2)

Fair value of plan assets (Note 25.3)

Net retirement benefit obligation

Shortfall

25.1 Net retirement benefit obligations

161,683,595

80,014,401

81,669,194

81,669,194

152,353,079

71,528,307

80,824,772

80,824,772

25.2 Movement of the retirement benefit obligations


Current service cost


Interest cost

Actuarial (gain)/ losses on obligation - Due to change in Financialassumptions

Actuarial (gain)/ losses on obligation - Due to Experience

Payments during the year

152,353,079

9,344,234

161,683,595

14,525,457

2,621,585

10,870,029

(28,030,789)

157,619,398

8,784,019

152,353,079

18,126,231

(5,673,587)

(923,280)

(25,579,702)




As at 31 March

2021

As at 31 March

202025.3 Movement of the plan asset

Net Contribution paid into the plan

Fair value of the plan asset at the end of the year

Benefit paid by the plan

Return on plan asset

Fair value of the plan asset at the beginning of the year

31,000,000

80,014,401

(28,030,789)

7,666,357

71,528,307

Remeasurement loss /(gain) of plan assets (2,149,474)

80,000,500

71,528,307

(25,579,702)

1,829,672

15,910,188

(632,351)

Retirement benefit obligation of Tal Lanka Hotels PLC is partly funded externally through an employees'

group gratuity plan at Life Insurance Corporation (Lanka) Limited.

25.4

An actuarial valuation was carried out by an independent professional valuer, Messer's Navin V Iyer,

Fellow, Institute of Actuaries of India on 31 March 2021, to ascertain the full liability arising in terms of the

Payment of Gratuity Act No 12 of 1983, in respect of all employees of the Company as at 31 March 2021.

25.5

The following payments are expected on employee benefit liabilities in future years from the fund.

25.6 Maturity analysis of the payments

4th following year

Sum of years 6 to 10

5th following year

1st following year

3rd following year

2nd following year

20,424,270

63,043,933

19,642,363

29,929,790

23,145,238

26,504,297

Years 11 and above 51,464,300

19,853,049

65,739,294

18,138,760

37,010,344

22,138,386

23,936,161

57,966,718

Discount rate per annum

Annual Salary increment rate

Employee turnover rate

The principal assumptions used for this purpose are as follows : 25.7

Assumption regarding future mortality are based on A67-70 Mortality table, issued The Institute of

Actuaries, London, United Kingdom.

25.8

Retirement age

7.00%

3.00%

10.00%

55 years

10.50%

6.00%

10.00%

55 years


The investment Portfolio of Life Insurance Corporation (Lanka) Limited as follows

25.9 The composition of Insurance Plan Assets

T Bonds

Fixed Deposits

Corporate Debts

48%

22%

9%

Equities 8%

Loans 6%

Property 7%

48%

22%

9%

8%

6%

7%



Sensitivity analysis is an analysis which will give the movement in liability if the assumption were not

proved to be true on different count. This only signifies the change in the liability if the difference between

assumed and the actual is not following the parameters of the sensitivity analysis.

25.9

Sensitivity analysis

Delta effect of -1% change in rate of salary increase

Project benefit obligation on current assumption

Delta effect of +1% change in rate of discounting

Delta effect of +1% change in rate of salary increase

Delta effect of -1% change in rate of discounting

(7,163,513)

161,683,595

(6,843,312)

7,718,266

7,491,674

(5,136,663)

152,353,079

(4,891,171)

5,494,905

5,313,403

As at 31 March

2021

As at 31 March

2020

26 Trade and other payablesTrade payables

Social security and other taxes payable

Deposits and advances obtainedOther payables

Accrued expenses

131,616,679

55,968,393

108,854,284

398,529,684

91,950,608

10,139,720

27 Amounts payable to related parties

The Indian Hotels Company Limited

TAL Hotels and Resorts Limited - Management fee

TAL Hotels and Resorts Limited - Interest on loan

4,482,221

1,724,976

113,003,576

119,387,005

Lanka Island Resorts Limited 176,232

139,670,802

63,529,429

116,109,815

419,792,688

86,513,068

13,969,574

3,487,513

-

102,680,434

106,167,947

-

28 Events after the reporting period

There have been no events occurring after the reporting date that require adjustments to or disclosure in

the Financial Statements.

29 Impact of Covid-19 Pandemic to the Financial Statements

The Company has assessed the possible impact of COVID-19 in preparation of the financial statements,

including but not limited to its assessment of liquidity and going concern assumption, recoverable values

of its financial and non-financial assets and impact on revenues and costs. The Company has

considered internal and external sources of information and has performed sensitivity analysis on the

assumptions used and based on current estimates, expects to recover the carrying amount of the assets.

The impact of Covid-19 may be different from that estimated as at the date of these financial results and

the Company will continue to closely monitor any material changes to future economic conditions.

The business has been impacted during the period on account of COVID-19. The Company witnessed

softer revenues due to the lockdown imposed during the first two months of the year and the Company’s

hotel had to be shut down. With the unlocking of restrictions, the Company’s hotel have been opened and


business is expected to gradually improve . During the final quarter, the Company witnessed some signs

of recovery of demand, as compared to previous quarters.

The Management is confident that the Company will have sufficient resources to continue for a future

period. Management concluded that the range of possible outcomes considered at arriving at this

judgment does not give rise to material uncertainties related to events or conditions that may cast

significant doubt on the Company’s ability to continue as a going concern.

The Company has evaluated implications to financial statements due to the COVID-19 outbreak

considering the key areas in the Financial Statements for the year ended 31 March 2021 as disclosed

below.

• Financial instruments

• Impairment of assets

• Recognition of deferred taxes

• Going concern – (Refer Note 2.7)

29.1 Financial instruments

29.1.1 Impairment of financial assets (ECL)

The Company considered the Probability of Default (PD), Loss Given Default (LGD) and Macro

Economic Factors in order to estimate the Expected Credit Loss (ECL) as at 31 March 2021. There were

no material changes to the existing impairment model compared to previous year though it was

realigned to reflect the revised credit ratings of the instruments.

29.1.2 Credit risk

To respond the credit risk under COVID-19 pandemic, the management has established following credit

risk policy,

• Internal Limits were set on limiting investments rated below BBB+

29.1.3 Liquidity risk

The Company has taken action to mitigate the impact on liquidity due to COVID-19 pandemic, including

reducing capital expenditure and operating expenditure. Further the Company revisited its investment

strategy and provide guideline to make investments in low-risk investments. In addition to that the

Company regularly monitor cash inflows and outflows through cash flow matching approach. The

Company holds cash to manage the Company’s liquidity risk.

29.1.4 Interest rate risk

The global outbreak of the novel COVID-19 epidemic has resulted in consecutive reductions in policy

rates and monetary easing policies by Central Bank of Sri Lanka.

The Company monitors its interest rate risk exposure through periodic reviews of asset and liability

positions. Additionally, estimates of cash flows and the impact of interest rate fluctuations are modelled

and reviewed every quarter.

29.1.5 Foreign exchange risk

The Sri Lankan Rupee witnessed a sharp depreciation against the US Dollar from March 2020 on the

back of economic turmoil in global, regional, and local markets resulting from the COVID-19 pandemic.

The Company exposed to foreign currency-denominated transactions are adversely impacted due to

fluctuations in exchange rates.




The Company regularly analyses the market condition of foreign exchange and analyse the utilisation of

cash flows.

Further the Company regularly reviews the timing of foreign currency cash in flows and outflows and

takes decisions on whether to reinvest the foreign cash flows or utilise to make the foreign currency

payments.

29.2 Impairment of non-financial assets

This assessment has become more critical with the COVID-19 condition and measurement of

recoverable amount involves certain level of estimates and judgment. The Board of Directors has

assessed the potential impairment loss on non-financial assets due to COVID-19 pandemic. The

assessment was carried out through multiple scenario basis, up to date available information and

business continuity plan. Based on the assessment, the Company has not identified any indications of

Impairment due to impact on COVID-19 pandemic as at the reporting date.

29.3 Recognition of deferred taxes

COVID-19 could have impacted the entity’s future profits and in turn impact the amount of deferred tax

assets and recoverability. Therefore, the Board of Directors assess the effect of changes in COVID-19

environment on the recoverability of deferred tax assets. In this assessment, the Board of Directors

considered potential impact from COVID-19 in a very conservative manner and performed sensitivity

analysis to assess the impact on recoverability within the specified period.

30 Assets pledged as security

The following assets have been pledged as security for the borrowings :

Nature of assets Nature of liability Value of pledged assets Included Under

All machinery and equipment, leasehold land, buildings,fixtures and fittings

Primary concurrentmortgage against loansobtained from HNB

6,141,793,014 6,319,803,228 Property, plantand equipmentand leaseholdproperty

2021

31 March

2020

31 March

Leasehold land and building Overdraft facility 30,000,000 32,000,000 Property, Plantand equipment andLeasehold Property

Leasehold land and building Credit facility 4,000,000 4,000,000 Property, Plantand equipment andLeasehold Property

Fixed deposit with HNB Overdraft facility 136,850,000 - Investments inFixed Deposits






32 Contingent liabilities

The amount disclosed represents the bank guarantees obtained by the Company. The extent to which an outflow of funds will be required is dependent on the future operations of the Company being more or less favorable than currently expected.

One bank guarantee was issued by Hatton National Bank for Rs. 3.6 Mn for the purpose of refundable deposits against tax appeal on behalf of Tal Lanka Hotels PLC on 22 March 2018. This will be effective from 22 March 2018 to 22 December 2018 and then it was further extended till 23 September 2021.

One bank guarantee was issued by Hatton National Bank for Rs. 3.0 Mn to Airport and Aviation Services (Sri Lanka) Limited on behalf of Tal Lanka Hotels PLC on 6 November 2019. This will be effective from 6 November 2019 to 31 December 2021.

6.6 Mn. 6.6 Mn.Guarantees outstanding

As at31 March 2021

As at31 March 2020

In the normal course of business, the Company makes various commitments and certain contingent liabilities

with legal recourse to its third parties. No material losses are anticipated as a result of such transactions.

31 Capital management policies and procedures

The Company's capital management objectives are:- to ensure the Company’s ability to continue as a going concern- to provide an adequate return to shareholders by pricing products and services in a way that reflects the level

of risk involved in providing those goods and services.

The Company monitors capital on the basis of the carrying amount of equity plus its subordinated loan, less

cash and cash equivalents as presented in the statement of financial position.

Management assesses the Company’s capital requirements in order to maintain an efficient overall

financing structure while avoiding excessive leverage. This takes into account the subordination levels of

the Company’s various classes of debt. The Company manages the capital structure and makes

adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying

assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of

dividends paid to shareholders or re-lease the property to reduce debt.

32.1 Pending litigations

a) There are ten cases filed by the Colombo Municipal Council at the Maligakanda Magistrate Court for operating a restaurant without obtaining a requisite license in the years 2010 (14148/M), 2011 (15619/M), 2012 (18608/M), 2013 (28129/14), 2014 (16019/15), 2015 (15737/16), 2016 (15725/17), 2017 (15588/18), 2018 (15264/19) and 2019 (5216/20).

The Hon. Magistrate delivered judgment finding the hotel guilty of the offence and ordering a fine of LKR. 100/- for each case (Total of LKR 1000/-), which has already been paid, on the direction of the Hon. Magistrate.

An appeal has been filed for each case challenging the Judgment and the same is awaiting listing before the High Court.

Rs. Rs.




b) The writ application (759/2010) was filed by the Company challenging, inter alia, the decision taken by Colombo Municipal Council to levy license fees equivalent to 1% of the annual turnover as a pre-condition to issue Annual Trade License for years 2008, 2009 and 2010 in respect of the restaurant operated at the hotel premises.

Their Lordships of the Court of Appeal gave Judgment on 19th September 2019 dismissing the application, and ordering costs. Costs have not been quantified by their Lordships in the Judgment.

An appeal has been filed challenging the Judgment of the Court of Appeal to the Supreme Court. The matter is pending support of the same.

33 Commitments

Financial commitments

There were no material financial commitments outstanding at the end of the reporting period.

Capital commitments

Capital expenditure contracted for, at the end of the reporting period but not recognized in the financialstatements is as follows:

- 24,402,851Property, plant and equipment

As at31 March 2021

As at31 March 2020



34 Related party disclosures

Related Parties include Key Management Personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the company. Key Management Personnel include members of the Board of Directors of the Company. The directors during the year are as follows :

- Mr. G. Sanjeevi - Chairman (Appointed with effect from 15th June 2018)

- Mr. B. K. Chaudhary

- Mr. R. De Mel

- Mr. R. K. Chaudhary

- Mr. T. De Zoysa

- Mr. V. Govindasamy

- Mr. P. Verma

- Mr. P. Sampat

- Mr. C Subramanian (Resign with effect from 06th July 2020)

- Mr. P Sengupta (appointed with effect from 14th July 2020)

Mr. B.K. Chaudhary, Mr. R.K. Chaudhary, Mr. V. Govindasamy, Mr. T. De Zoysa are Directors and Mr. P. Sampat

is the Area Director of TAL Hotels & Resorts Limited with whom TAL Lanka Hotels PLC has entered into a Hotel

Operating Agreement. The Management Fees comprising of a Basic Fee of Rs. 14,593,436 /- (2020 - Rs

71,520,073/-) and an Incentive Fee of Nil (2020 - Rs. 52,406,552/-) are payable to TAL Lanka Hotels & Resorts

Limited for the period under review.

Mr. V. Govindasamy who is the Director of the Company is also a Director of Watawala Tea Ceylon Limited.

During the year the Company has purchased tea from Watawala Tea Ceylon Limited for Rs. 840,883/-

(2019/2020 –Rs.2,221,501/-). He is also a Director in Tata Communications Lanka Limited from whom we have

received rental income of Rs. 12,718,320/- (2019/2020 - Rs.12,585,587/- ). Mr. V. Govindasamy is also a

Member of Colombo Club Limited from where we have rental income of 7,875,000/- (2019/2020 –

Rs.6,696,150/-) and F & B income of 10,026,487/- (2019/2020 – Rs 14,648,702/- ).

34.1 Key Management Personnel

758,576 440,675Directors' Fees

34.2 Key management personnel compensation

2021 2020Year ended 31st March





34.3 Related party transactions

Related Company

The Indian HotelsCompany Ltd

Lanka Island Resorts Ltd

PIEM Hotels Limited

TAL Hotels and ResortsLimited

Relationship

Parent Company

Group Company

Group Company

Parent Company

Nature ofTransactions

Reimbursement Expenses

Re Charged Expenses

Redemptions - TIC

Business Promotions - TIC

Reimbursement expenses

Management fee -Basic

Management fee -Incentive

Net Transactionsduring the year(This includes theeffect of forexfluctuations)

(14,593,436)

-

-

Balance as at31March 2021

(176,232)

42,071

(113,003,576)

Balance as at31 March 2020

Debit/(Credit) Debit/(Credit) Debit/(Credit)

Transactions with related parties are carried out in the ordinary course of business have been reviewed and

approved by the Related Party Transaction Review Committee of the company. All these transactions were entered

into with these related parties on an arm's length basis under normal commercial terms & conditions. Outstanding

related parties account balances at the year-end are unsecured, interest free. No expense has been recognized in

the current or prior year for bad and doubtful debts in respect of the amount owed by related parties. No guarantees

were given or received for the transactions. There are no related parties or related party transactions other than

those in note 34 in the financial statements.

(1,363,373)

736,498

59,852

(427,685)

Re Charged Expenses

(1,149,175)

196,143

Loan received 134,917,676 134,917,676

Interest payable onunsecured loan (1,724,976) 1,724,976

(4,482,221)

TAL Maldives Resort(Pvt) Limited

Group Company Re Charged Expenses1,042,273

Reimbursement expenses

3,895,807

(3,248,814)

776,800

(42,071)

(102,680,434)

-

-

(3,487,513)

395,280

Reimbursement expenses 4,270,294

-

-

-

-



35 Financial instruments - fair values and risk management

35.1 Accounting classification and fair value of financial instruments

Financial instruments measured subsequently on the ongoing basis either at fair value or amortized cost. The summary of significant accounting policies describes how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognized.

The following is a description of how fair values are determined for financial instruments that are recorded at fair value using valuation techniques. These incorporate the company’s estimate of assumptions that a market participant would make when valuing the instruments. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques.

Level 1 : category of financial assets that are measured in whole or in party by reference to published quotes in an active market

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The table below shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information of financial assets and financial liabilities not measured at fair value if the carrying amount is reasonable approximation of fair value.

As at 31 March 2021 Carrying amount Fair value

Level 1 Level 2 Level 3

Financial assets

- Financial assets measured at FVOCI

Investments in Lanka Island Resorts Limited 15,820,600 15,820,600- -

- Assets carried at amortised cost

Trade and other receivables 35,168,980 - - -

Amounts due from related parties 1,084,344 - - -

Deposits 37,438,358 - - -

Investment in Fixed Deposits 140,296,748 - - -

Cash and cash equivalents 23,307,132 - - -

Total financial assets 253,116,162 15,820,600- -

Financial liabilities

- Liabilities carried at amortised cost

Interest bearing borrowings 2,468,535,740 - - -

Trade and other payables 388,389,964 - - -

Amounts payable to related parties 119,387,005 - - -

Bank Overdraft 109,175,055 - -

Total financial liabilities 3,085,487,764 - - -


-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-


As at 31 March 2020 Carrying amount Fair value

Level 1 Level 2 Level 3

Financial assets - Financial assets measured at FVOCI

Investments in Lanka Island Resorts Limited 21,387,972 21,387,972- -

- Assets carried at amortised cost

Trade and other receivables 146,989,440 - - -

Amounts due from related parties 1,214,151 - - -

Deposits 37,428,358 - - -

- - Investment in Fixed Deposits 50,491,667

Cash and cash equivalents 245,240,404 - - -

Total financial assets 502,751,992 21,387,972- -


- Liabilities carried at amortised cost

Interest bearing borrowings 2,111,670,909 - - -

Trade and other payables 405,823,114 - - -

Amounts payable to related parties 106,167,947 - - -

Bank Overdraft 33,290,215 - - -

Total financial liabilities 2,656,952,185 - - -



35.1.1 Determination of fair value of financial assets with short maturities

Carrying values of financial assets and liabilities that have a short term maturity such as trade and other

receivables and payables, cash and cash equivalents are reasonable approximation of their fair value.

Therefore, fair value hierarchy is not applicable.

35.2 Risk management framework, objectives and policies

Risk management of the Company is the systematic process of identifying, quantifying and managing all risks

and opportunities that can affect the achievement of the TAL Lanka Hotels PLC strategic and financial goals.

Financial instruments held by the Company, principally comprise of cash, trade and other receivables, trade and

other payables, loans and borrowings and investments held under FVOCI category. The main purpose of these

financial instruments is to manage the operating, investing and financing activities of the Company.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk

management framework.

Financial risk management of the Company is carried out based on guidelines established by the finance division

which comes under the purview of the Board of Directors of the Company. The finance division identifies,

evaluates and mitigates financial risk in close co-operation with the Group’s finance department.

TAL Lanka Hotels PLC (TLHP'S) has identified 3 critical types of risk which can affect on TLHP's operations

adversely as credit, liquidity and market risks.

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

- - -

- - -



35.3 Credit risk

The Company trades only with recognized, creditworthy third parties. It is the Company’s policy that all clients who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.

With respect to credit risk arising from the other financial assets of the Company, such as cash and cash equivalents, Financial Assets measured at FVOCI, the company’s exposure to credit risk arises from default of the counterparty. The Company manages its operations to avoid any excessive concentration of counterparty risk and the Company takes all reasonable steps to ensure that the counterparties fulfil their obligations.

The maximum risk positions of financial assets which are generally subject to credit risk are equal to their carrying amounts. Based on the review of their past performance and credit worthiness the Company has obtained deposits and advances from its major customers.

The requirement for impairment is analyzed at each reporting date on an individual basis for major customers. In order to mitigate settlement and operational risks related to cash and cash equivalents, the Company uses several banks with acceptable ratings for its deposits.

a) The maximum exposure to credit risk at the reporting date

Cash at bank and cheques in hand (Note 20)

Trade receivables (Note 16)

As at31 March 2021

20,956,665

21,676,092

234,945,095

As at31 March 2020


Other receivables (Note 16) 13,492,888

Deposits (Note 18) 37,438,358

Amounts due from related parties (Note 17) 1,084,344

b) The ageing of the trade receivables at the reporting date

Gross Receivables

19,739,770

2021 2020

Impairment Allowance Carrying Value

Not due 0-30 days

Past due:

210,160Past due 31-60 days



366,132Past due 121-180 days

5,575,142More than 180 days

26,130,456Total

314,816

2021 2020

11,739

8,491

68,251

230,387

3,820,680

4,454,364

19,424,954

2021 2020

198,421

56,573

105,937

135,745

1,754,462

21,676,092

Investments in Fixed Deposits (Note 19) 140,296,748

242,157,366

128,268,529

478,280,982

18,720,911

37,428,358

1,214,151

50,491,667

39,150,741

39,095,338

42,032,358

3,422,512

4,164,336

403,244

128,268,529

524,516

987,508

1,718,052

426,086

727,041

71,161

4,454,364

39,675,257

40,082,846

43,750,410

3,848,598

4,891,377

474,405

132,722,893



Impairment for trade receivables is established based on expected credit loss method. The main component of

this allowance is a specific loss component that relates to individually significant exposures based on aging of the

outstanding's. The loss rate calculated based on the historical provision matrix is adjusted based on the future

calibrated probability of default and the loss given default. Forward looking factors that affect customer default

rates and macro economic data such as GDP is considered in calculating the probability of default.

Trade receivables are written off (i.e. derecognized) when there is no reasonable expectation of recovery. Failure

to engage with the Company on alternative payment arrangement amongst other is considered indicators of no

reasonable expectation of recovery.

d) Cash equivalents

The Company held cash at bank and cheques in hand of Rs. 23.3 Mn as at 31 March 2021 (31 March 2020 -

Rs.245.2 Mn) which represent its maximum credit exposure on these assets. The cash equivalents are held with

bank and financial institutions counterparties, which have better rankings.

35.4 Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its

financial liabilities that are settled by delivering cash or another financial asset.

The Company’s policy is to hold cash and undrawn committed facilities at a level sufficient to ensure that the

company has available funds to meet its medium term capital and funding obligations and to meet any

unforeseen obligations. The Company holds cash and undrawn committed facilities to enable the company to

manage its liquidity risk.

The Company monitors its risk to a shortage of funds using a daily cash management process. This process

considers the maturity of both the Company’s financial investments and financial assets (e.g. accounts

receivable, other financial assets) and projected cash flows from operations.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of

multiple sources of funding including bank loans and overdrafts.

c) Movement in the impairment allowance



As at31 March 2021

4,454,364

4,454,364

As at31 March 2020


Allowance for impairment recognized during the year -

Impairment write-off for doubtful trade receivables -

4,454,364

1,923,345

4,784,296

(2,253,277)


a) The following are the contractual maturities of the financial liabilities at its carrying value:

31 March 2021 Contractual maturities

Trade and other payables

Carrying amount

Lass than1 Year

1 - 2 Years

Bank Overdraft 109,175,055 109,175,055 -

3,095,627,485 1,051,595,151 666,141,100

Amounts payable to related parties 119,387,005 119,387,005 -



398,529,684 398,529,684 -

35.5 Market risk

Market risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due to the

changes in market prices. Mainly the changes in market prices, such as foreign exchange rates and interest

rates will affect the company’s income or the value of its holdings of financial instruments. The objective of market

risk management is to manage and control market risk exposure within acceptable parameters, while optimizing

the return.

a) Foreign currency risk

The foreign currency risk is the risk that the fair value or future cash flows of a financial instrument fluctuating due

to changes in foreign exchange rates. The Company is exposed to foreign currency risk on revenue, purchases,

borrowings and cash deposits denominated in currencies other than the functional currency of the Company.

The currencies giving rise to this risk are primarily US Dollars.

The Company, as at the reporting date holds financial instruments denominated in currencies other than its

functional / reporting currency. A reasonable possible strengthening or weakening of the US Dollar (USD) against

Sri Lanka Rupee (LKR) as at the reporting date would have affected the measurement of USD denominated

borrowings and affected equity and profit and loss by the amounts shown below. This analysis assumes that all

other variables, in particular interest rates, remain constant.

Impact of increase in 10% USD rate - USD denominated borrowings - gain / (loss)

Impact of decrease in 10% USD rate - USD denominated borrowings - gain / (loss)

USD denominated borrowings

(104,480,156)

104,480,156

As at31 March 2021

2,089,603,110

Interest-bearing borrowings 2,468,535,740 424,503,407 666,141,100

Total

109,175,055

3,095,627,484

119,387,005

398,529,684

2,468,535,740

2-5 Years

-

1,377,891,233

-

-

1,377,891,233

More than5 Years

-

-

-

-

-

31 March 2020 Contractual maturities

Trade and other payables

Carrying amount

Lass than1 Year

1 - 2 Years

Bank Overdraft 33,290,215 33,290,215 -

2,672,921,759 870,329,987 527,971,010

Amounts payable to related parties 106,167,947 106,167,947 -

419,792,688 419,792,688 -

Interest-bearing borrowings 2,113,670,909 311,079,137 527,971,010

Total

33,290,215

2,672,921,759

106,167,947

419,792,688

2,113,670,909

2-5 Years

-

1,274,620,762

-

-

1,274,620,762

More than5 Years

-

-

-

-

-



b) Interest rate risks

Interest rate risk mainly arises as a result of the Company having interest sensitive assets and liabilities which

are directly impacted by changes in the interest rates. Cash flow interest rate risk is the risk that the future cash

flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate

risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates.

The management monitors the sensitivities on regular basis and ensures that such risks are managed on a

timely manner.

The table below summarizes the nature of the interest rate risk associated with interest sensitive financial assets

and financial liabilities of the Company:


As at 31 March 2021 Fixed Variable Total Impact of 1% Impact of 1% interest interest increase decrease


Interest-bearing borrowings 11,422,902 76,460,848 1,950,905,640 (19,509,056) 19,509,056

As at 31 March 2020 Fixed Variable Total Impact of 1% Impact of 1%

interest interest increase decrease


Interest-bearing borrowings - 123,871,792 1,861,310,492 (18,613,105) 18,613,105



Shareholder Information

1. Stated Capital

The Stated Capital of the company as at 31 March 2021 was Rs. 1,396,374,941 and the number of shares representing the Stated Capital of the Company was 139,637,494.

2. Shareholders

There were 10,429registered shareholders, holding 139,637,494 shares as at 31 March 2021

Number of Total Range Shareholders Holdings Percentage

Foreign Local Foreign Local Foreign L ocal

1 - 1,000 Shares 54 9,275 24,450 1,895,870 0.02 1.36

1,001 - 10,000 Shares 20 928 89,692 3,109,227 0.06 2.23

10,001 - 100,000 Shares 4 130 194,888 3,334,204 0.14 2.39

100,001 - 1,000,000 Shares 2 11 455,029 3,869,082 0.33 2.77

Over - 1,000,001 Shares 3 2 117,627,220 9,037,832 84.24 6.46

TOTAL 83 10,346 118,391,279 21,246,215 9 15.2184.7

GRAND TOTAL 10,429 139,637,494 100

3. Ratios 2021 2020 Rs. Rs.

Earning Per share Basic (7.84) (1.86)

Net Asset value per share 9.14 13.610

4. Market Value

Highest 17.80 15.50 Lowest 07.70 7.70

st As at 31 March 12.30 7.70

5. Dividends

No dividends have been declared during the year under review.



Shareholder Information (Contd.)

6. Major shareholders

The names and the number of shares held by major shareholders of the Company and the number of shares and the percentage of such shares held as at 31 March 2021 are set out in the table below.

Name of Shareholder No. of Shares %

01. TAL Hotels & Resorts Limited. 81,181,580 58.14

02. IHOCO BV 34,375,640 24.62

03. Employees Provident Fund 7,437,832 5.33

04. Mougin Investment Company Limited 2,070,000 1.48

05. Associated Electrical Corporation Ltd 1,600,000 1.15

06. E. W. Balasuriya & Co. (Pvt) Ltd 901,658 0.65

07. Mr. Wannakuwattawaduge Don Nimal Hemasiri Perera 666,975 0.48

08. Sampath Bank PLC / Mr. Arunasalam Sithampalam 587,000 0.42

09. Bank of Ceylon No. 1 Account 447,400 0.32

10. Hallsville Trading Group Inc. 343,029 0.25

11. Ashan De Zoysa and Company Pvt Limited 265,000 0.19

12. People's Leasing & Finance PLC / L. P. Hapangama 260,270 0.19

13. Commercial Bank of Ceylon PLC A/c No. 04 212,390 0.15

14 Mr. Sri Mahadeva Mylventhen 154,792 0.11

15. Mr. Nawalage Joseph Hiran Mahinda Cooray 137,165 0.10

16. Mrs. Binanthi Shamani Rasanayagam 122,000 0.09

17. Senkadagala Finance Company PLC 114,432 0.08

18. Mr. Ashish Dubey 112,000 0.08

19. Negombo Hotels Limited 100,000 0.07

20. Sampath Bank PLC / Mr. Abishek Sithampalam 98,500 0.07

TOTAL 131,187,663 93.97

7. Public shareholding

7.1 As at 31 March 2021, the public holds 24,080,274 shares in the Company which is 17.24% of the issued share capital of the Company. Number of public shareholders are 10,427.

7.2 Float adjusted market capitalization - Rs. 296,187,370.

7.3 Option for compliance - option 2 of 7.13.1 (b) of the listing rules.



Human Resources

In the context of changing hotel business models, human capital is exceedingly important. Employee skill

development, employee retention, aging workforce and escalation of employee cost are the most.

Challenging areas in the present industry scenario.

We continue to engage and encourage our employees to perform to the best of their talents through a

performance-oriented culture founded on ethical and transparent behavior which in turn promotes


Risks and Concerns

Hotel Business in general is sensitive to the economic environment. The Hotel sector may be unfavourably

affected by changes in global and domestic economies, changes in local market conditions, reduced

International or local demand for hotel rooms and associated services, competition in the Industry,

Government policies and regulations, fluctuations in interest rates and foreign exchange rates and other

natural and social factors, since demand for hotels is affected by World Economic growth, a global recession

could lead to a downturn in the hotel Industry.

Socio-Political Risk

In addition to economic risks, your company faces risks from the Socio-political environment, internationally

as well as within the country and is affected by events like political instability, conflict between nations, threat

of terrorist activities, occurrence of infectious disease, extreme weather conditions and natural calamities

etc, which may effect the level of travel and business activity.

Foreign Exchange Fluctuation Risk

Your Company also has a portfolio of Foreign Currency debt, in respect of which it faces exposure to

fluctuations in currency as well as interest rate risks.

Credit Risks

The Company provides services only to related companies and recognised credit worthy third parties. The

objective of the company to manage credit risk is to control potential exposure to recoverability problem.

Operational Risk - Breakdown of Internal Controls, processes and procedures

Your Company has reviewed internal controls and its effectiveness through the Internal Audit process.

Internal Audit were undertaken for every operational unit and all major corporate functions under the

direction of the group internal audit department. The focus of these reviews are as follows:

l Identify weakness and areas of improvement.

l Compliance with defined policies and processes.

l Safeguarding of tangible and intangible assets.

l Management of business and operational risks.

l Compliance with applicable statutes.

l Compliance with the Tata Code of Conduct.


sustainable and profitable growth. We have attracted the best and brightest from the entire pool of available

talent to build a strong workforce that reflects the diversity of the guest we serve. Taj Samudra has been

successful in molding existing employees according to the future requirements. Hence, maintaining healthy

employee relations among the Staff and the Management. The best practices, policies and procedures that

are In place to ensure that Taj Samudra is more than just a workplace .As we did in past we were unable to do

many people engagement activities due to the Covid 19 pandemic during the year under review . However,

we are still continuing employee’s recognition activities such as Star awards ,Employee Recognition (MD’s

Club) etc. also still we continues most of the welfare activities for the employees even today with the

Pandemic situation.


Ownership and location Building in Sq.Ft

Land in acres

Freehold Leasehold

TAL LANKA HOTELS PLC No. 25, Galle Face Centre Road, Colombo 03. 472,630 -

11 Acres, 2Roods, 20.19Perches

Please refer note 13 to the financial statements for details of valuation.

Please refer note 13 to the financial statements.

Cost of sales / Direct Costs


Six Years Financial Summary and Key Indicators

Net Finance expenses

Profit / (Loss) for the year

Other comprehensive income

Re-measurement gain / (losses) on defined benefit plans,net of tax

Fair value gain / (loss) on investments in equityinvestments designated as at FVOCI

Other comprehensive income/(expense)for the year

Total comprehensive income / (expense)for the year

Share capital

Fair Value reserve

Earnings / (Loss) per share - basic

Gain or Revaluation of building. net of tax

Operating profit / (loss)

Income tax expense

Gross profit / (loss)

Capital employed

(1,098,568)

67,871

349,175 32,937

34,220

484,203

(614,365)

17,795

(41,267)

(250,977)

(888,815)

(172,869)

(33,523)

(1,095,206)

484,203

(80)

(888,815)

(1,095,206)

1,396,375

1,472,378

(1,593,638)

1,276,675

4,502,112

156,117

3,822,836

2,546,161

0.206

9.143

12.300

(7.843)

Rs. '000

(835,394)

20/21

2020-21

(13,451)

(5,011)

471,962

(623,244)

1,560

490,424

(1,061,683)

Rs. '000

2015-16

(1,957,877)

1,586,849

979,842 38,178

59,199

2,664,068

706,191

18,451

(123,732)

(327,947)

272,962

-

(6,659)

(116,914)

2,664,068

34.41

272,962

(116,914)

1,396,375

1,421,324

(1,341,453)

1,480,546

4,117,717

43,388

3,770,547

2,290,001

0.56

10.60

23.40

(0.84)

(390,558)

15/16

(2,970)

3,013

43

(116,871)

4,300

-

(110,256)

Rs. '000

2016-17

(2,050,959)

1,655,401

1,044,670 43,491

86,880

2,830,443

779,484

24,823

(123,936)

(349,446)

330,924

-

(4,414)

103,716

2,830,443

6.25

330,924

103,715

1,396,375

2,126,820

(1,156,413)

2,372,251

4,751,847

47,284

4,452,531

2,080,279

0.61

16.99

21.00

0.74

(346,601)

16/17

(10,118)

1,169

787,989

891,705

5,468

796,938

108,130

Rs. '000

2017-18

(2,059,147)

1,530,247

1,137,728 47,247

59,392

2,774,615

715,467

34,885

(102,711)

(338,606)

309,035

-

(33,362)

94,875

2,774,615

(1.97)

309,035

94,875

1,396,375

2,023,604

(983,791)

2,441,166

4,679,436

19,618

4,412,498

1,971,332

0.65

17.48

16.90

0.68

(286,556)

17/18

(25,469)

(491)

(25,960)

68,915

4,977

-

128,236

(2,125,783)

1,430,313

1,167,284 52,354

40,942

2,690,893

565,111

27,462

(93,328)

(358,246)

140,999

-

(38,446)

(283,217)

2,690,893

(3,02)

140,999

(283,217)

1,396,375

1,922,292

(1,170,843)

2,155,141

4,658,607

22,218

4,144,517

1,989,376

Rs. '000

(536,308)

2018-19

(1,684)

2,340

656

(282,561)

7,317

-

(244,772)

0.45

15.43

9.40

(2.03)

18/19

(1,967,812)

1,185,957

1,094,976 49,765

60,885

2,391,582

423,770

74,006

(89,678)

(378,562)

29,537

(261,624)

(27,517)

(259,604)

2,391,582

(11.12)

29,537

(259,604)

1,396,375

1,077,607

(580,633)

1,899,919

4,294,719

21,388

4,094,540

2,194,621

0.75

13.61

7.70

(1.86)

Rs. '000

(221,567)

19/20

2019-20

5,129

(747)

4,382

(255,222)

6,570

-

(232,088)

Finance expenses (179,861) (383,217) (222,795) (180,798) (385,771) (263,586)

Finance income 6,992 1,962 - - - -




Registered Office : 25, Galle Face Centre Road, Colombo 3.

I/We…………………………………………………………………………………...………………….……………… of

…………………………………………………………..…………….............…………………..……………… being a

shareholder / shareholders of TAL LANKA HOTELS PLC do hereby appoint .........................................................

…………………………………………………………………………………………………………or failing him / her,

Mr G. Sanjeevi (Chairman of the Company), or failing him, one of the Directors of the Company, as my/our proxy

stto vote as indicated hereunder for me/us and on my/our behalf at the forty first (41 ) Annual General Meeting of

ththe Company to be held on Tuesday, 7 September 2021 at 10.00am and at every poll which may be taken in

consequence of the aforesaid meeting and any adjournment thereof:

For Against

1. To receive and consider the Annual Report of the Board of Directors and thest Statement of Audited Accounts for the year ended 31 March 2021 with the

Report of the Auditors thereon.

2. To pass an ordinary resolution to re-appoint Mr. T. De Zoysa as a Director who has reached the age of 74 years.

3. To re-elect Mr. B. K. Chaudhary as a Director who retires by rotation in terms of Article 86 of the Articles of Association.

4. To re-elect Mr. V. Govindasamy as a Director who retires by rotation in terms of Article 86 of the Articles of Association.

5. To re-elect Mr. P. Verma as a Director who retires by rotation in terms of Article 86 of the Articles of Association.

6. To re-appoint Messrs KPMG, Chartered Accountants, as Auditors of the Company and to authorise the Directors to determine their remuneration..

Dated this .............................................… day of .....................................… 2021.

.......................................Signature of Shareholder



Note:1. *Please delete the inappropriate words2. Instructions as to completion are noted on the reverse hereof.

FORM OF PROXY

TAL LANKA HOTELS PLCCompany Registration No. PQ 183


1. To be valid, the completed form of proxy should be deposited at the Registered Office of the Company, No 25, Galle Face Centre Road, Colombo 03 or emailed to [email protected] no later than 48 hours before the time of the meeting.

2. In perfecting the form of proxy, please ensure that all details are legible.

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

4. In the case of a company/corporation, the proxy must be signed by placing the common seal of the company/corporation and attested in the manner prescribed by its articles of association.

5. In the case of a proxy signed by the attorney, the Power of Attorney document must be deposited at the Registered Office, No 25, Galle Face Centre Road, Colombo 03, for registration or emailed to [email protected].

INSTRUCTIONS ON COMPLETION OF THE FORM OF PROXY


Annexure I

.


ST41 ANNUAL GENERAL MEETING

REGISTRATION OF SHAREHOLDER DETAILS

To: Registrars for TAL Lanka Hotels PLC.

Business Intelligence (Pvt) Limited

No. 08, Tickell Road

Colombo 08

1. Full Name of the Shareholder: …………………………….………...................................………………………………………….

…………………………….………...............................................……………

2. Membership No. / CDS Account No : ………………………….………........................................................................................

3. Address of Shareholder : …………………………….………..........................

…………………………….………..........................

…………………………….………..........................

4. NIC No./ P.P. No. / Co. Reg. No. of Shareholder : …………………………….………..........................

5. Contact details of Shareholders

Telephone: Residence : …….................................. Office : …….................................. Mobile : ……..................................

e-mail : …….............…….............................…….............................……............................................. (Please print clearly)

6. Names / NIC No. of Joint holder/s (If any):

i. Name : .....…….....................................................................................…… NIC No.: .....….........…................................……

ii Name : .....…….....................................................................................…… NIC No.: .....….........…................................……

............................................................. .............................................................. .................................................................st ndShareholder's Signature /Date 1 Joint holder's Signature/Date 2 Joint holder's Signature/Date


INSTRUCTIONS AS TO COMPLETION :

1. Shareholders are advised to complete the form legibly in order to facilitate their participation.

2. The “Web Link” for participation at the AGM through the online platform will be forwarded to the

Shareholder's above noted email address.

3. In the case of a Company/Corporation, the Registration must be under it's common seal which

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

4. In the case of the Registration form signed by an Attorney, the Power of Attorney must be deposited

at the Registered Office of the Company for registration.

5. The duly completed Registration Form must be deposited at Registrars to TAL Lanka Hotels PLC,

Business Intelligence (Pvt) Limited, No. 08, Tickell Road, Colombo 08, or e-mailed to

‟[email protected]” on or before the 24th August 2021.


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