ANNUAL REPORT 2015/16

The effervescence of Odel

invigorates the spirit and
reinvents life. We are
never still, never stagnant.
We combine spirit and soul,
colour and contrast. That is
the ineffable essence of the
Odel brand. We are poised
for an explosion of activity
that can propel us to greater
heights than ever imagined,
guided by our vision of
innovation and excellence.
2 ODEL PLC | Annual Report 2015/16

FINANCIAL Revenue Rs. Mn

2016 6,455

HIGHLIGHTS 2015

2014
4,864

4,595

2013 4,533

2012 3,912

2011 3,405

Total Equity Rs. Mn

2016 6,428

2015 5,284

2014 5,219

2013 5,094

2012 1,753

2011 1,623
VISION
To inspire the world.

MISSION
To provide a complete Mind, Body and Soul
experience with an unparalleled selection of
fashion right and lifestyle products in an
environment that is enjoyable and welcoming.

OUR VALUES
We love, we serve, we style, we innovate, we
give,we save, we enjoy and we inspire.
Total Assets Rs. Mn
2016 9,483
6,455
2015 7,599
Revenue Rs. Mn

9,483
2014 6,971

2013 6,414

2012 3,498

2011 3,133

Total Assets Rs. Mn

Net Pro t Rs. Mn

2016

2015
256

161
6,428
2014 192 Total Equity Rs. Mn

256
2013 157

2012 202

2011 209
Net Profit Rs. Mn
4 ODEL PLC | Annual Report 2015/16
5
6 ODEL PLC | Annual Report 2015/16

CHAIRMANS REVIEW
Since its acquisition, we Strategic Review
have taken into account all We carried out a strategic review of Odel during the year to ensure a stronger
leadership position in the market. Since its acquisition, we have taken into
internal and external factors
account all internal and external factors of our operations and de-constructed
of our operations and de- the processes to achieve optimal efficiency. The aim was to create new
platforms for growth and I am happy to state that this in fact yielded much
constructed the processes to reward. We are witnessing the fruits of our actions: having leaner staff
achieve optimal efficiency. strength combined with enhanced productivity and better returns to
employees. It has been a win-win journey thus far for the Company and all its
stakeholders.
 the economy, grew by taken a bold step into the branded
I am pleased 5.3% in gross value Today, our fashion retail arena, whilst also offering a vast
to present the added terms in 2015, business boasts an range under the Odel brand name.
Annual accounting for 56.6% of industry-best team, Today, any customer walking into our
Report for the the GDP. Retail and which is helping us flagship store or other Odel outlets is
financial year wholesale activity achieve new milestones. assured that they buy genuine
2015/16. It emerged to be an active We have substantially articles.
has been yet contributor with a 4.7% increased employee
another growth in 2015 (4.5% in benefits and reinvested Our strategy has fuelled the demand for
strong year of 2014). Tourism recorded in sales staff training brands in Sri Lanka - offering customers a
performance an arrival data of 1.8 with a view to enhancing wider choice and encouraging them to invest
at Odel. We Mn, a 17.8% increase,
their knowledge and in brand defining status and style. Admittedly,
achieved during 2015 and
awareness of brands our journey of bringing international brands
revenue of 721,185 during 1Q2016.
and to elevate skill levels into the country was initially a challenge, but I
Rs. 6.5 Favourable duty revision
to foster a culture of believe that the Sri Lankan market is now
Bn, during late FY2015/ 16
exceptional sales and mature enough for branded retail.
reflecting a relating to apparel and
service. In fact, we have
32.7% footwear imports were
witnessed a high
increase, passed on to the
financial performance as
while customers through price
a direct result of bringing
Operating reductions, while the
in a performance-driven
Profit surge in Value Added
culture.
experience Tax to 15% from 11% in
d a strong May 2016 nullifies this
86% growth gain. Art of Branding
to reach Rs.
526.6 Mn. At Odel, we have taken
Profitability a conscious decision to
increased move up the value
by 59% to chain with synergy
Rs. 255.8 benefits from Softlogic
Mn during brands to deliver
the year as international branded
a direct apparel and
consequenc accessories to both
e of a local and foreign
focused consumers. Moreover,
strategy the boom in tourism
combined has ensured a steady
with Group business growth from
synergies. this segment. Almost
40% of our revenues
are derived from
Brief on tourists and we are
the proud to see that our
Economy offerings find appeal
amongst foreign
Given the tourists from across the
economic and globe.
political
uncertainties,
Sri Lankas We realize that we
economy cant be everything
grew 4.8% in for everyone and that
2015. pleasing all market
Services, the segments will diffuse
prime our brand identity.
contributor to Therefore, Odel has
7
8 ODEL PLC | Annual Report 2015/16

CHAIRMANS REVIEW
 in clothing and Lankan souvenirs, was opened in
accessories trends. Centara Resorts another Softlogic
We believe that this subsidiary. The year also witnessed
evolution of the local the opening of an exclusive Odel
It has been a shoppers has given Our end of Home in Kalubowila.
learning curve them supreme
for us at Odel confidence in season sales, as
Our Luv SL brand has become a
and for our identifying brands and seen in success with tourists and the brand
customers in demanding a outperformed expectations during the
too. Odel now superior shopping developed year. We believe this home-grown
follows the experience, which
international Odel offers.
markets, is a brand has huge potential for organic
growth as well as to become a local
seasonal new concept for brand success story. We are focused
calendar that
local shoppers, on expanding the collection and
comprises of Advancing Fashion
opening more Luv SL stores.
winter, spring, Retail Sector and they are
summer and
autumn Throughout the year, we now also keenly Odel, along with its sub brands Luv SL
collections. pursued a strategy to and Softlogic brands, makes a valuable
Our end of elevate the look and feel aware of the contribution to the nation by getting
season sales, of Odel outlets by dynamics of tourists to spend their foreign currency
as seen in refurbishing and relocating in Sri Lanka and we hope to work
developed brands as necessary, international closely with the government and
tourism authorities to leverage Odel as
markets, is a injecting stocks and
seasonal
new concept housing new brands which the must-visit shopping destination in
for local gave a new look to the trends. Sri Lanka. In order to achieve the aim of
shoppers, and store. Our endeavour was making Sri Lanka a premier tourist
they are now to create a shopping destination, incentives such as duty free
also keenly experience with an prices need to be made a reality.
Sri Lanka. Mango,
aware of the international flavour and
a premier
dynamics of this is being progressively
international achieved.
womens brand Exciting Future Prospects
seasonal was added to
Odels clothing We have simplified our systems and
trends. We recently launched the
range during the processes to ensure flexibility and faster
Fossil brand in Sri Lanka, response time to customer needs. Our
year, giving
Odel unveils sales of which have been operating costs have
increased visibility
the latest fantastic from the outset. declined, enabling us to offer better
to these
styles and The launch of The Body
international incentives to employees, and this has
brands Shop, a renowned beauty
brands. Starved of sharpened our competitive edge.
simultaneousl brand from the United
y with other big brands for
Kingdom augmented our
shopping decades, Sri
cosmetics and toiletries
capitals Lankas shoppers
range. The opening of
across the are now
Pepe Jeans at the
globe. Odel empowered by
beginning of the financial
closely Odel.
year, further added to
follows
Odels brand offerings in
international Penetrating further into
trends on the outskirts of
fashion Colombo suburbs,
runways Odel was opened in
of the world, Thalawathugoda and
ensuring that Wattala. Luv SL,
customers tourists favourite
are upto-date shopping spot for Sri
 9

Odel remains committed to sustainable operations and driving social

initiatives which are uplifting the livelihood of craftsmen supplying to
Luv SL. We also create awareness of the islands rich biodiversity in
this product range. We want our customers to be assured that our
products are produced with social responsibility.

We have our sights set on the completion of the well-designed Odel Mall by
end 2019, by which time we will have an exhaustive collection of international
high-end brands and Odel products for a one-of-a-kind shopping experience.
Families in Sri Lanka have scant entertainment options and we are looking to
craft an exciting experience for the entire family to spend enjoyable hours at
Odel when our new Mall commences.

Appreciation

I take this opportunity to thank my colleagues on the Board and the

teams at Odel and Softlogic Brands for joining hands to make this a
memorable year for Odel in terms of financial performance and
operational excellence. Our success would not be possible without
the can-do approach of our staff and stakeholders. I would also
like to thank our shareholders for their continued support as we
continue to build a stronger Odel.

Sgd.
Ashok Pathirage
Chairman
Mr. Ashok Pathirage - Chairman

Mr.Ashok Pathirage is one of the co-founders of

Softlogic and was appointed as Chairman of
Softlogic in 2000. He is also Chairman/
Managing Director of Asiri Hospital chain,
Softlogic Capital PLC, Softlogic Finance PLC,
Asian Alliance Insurance PLC, Odel PLC which
are listed in addition to the private companies of Dr. Ruanthi De Silva - Non Executive Independent Director
the Group operating in Leisure & Restaurants,
Retail, Automobile and ICT industries. He is also Director and Consultant of SCM- Plus, providing consultancy
Deputy Chairman of the National Development services on Finance, Logistics, Best Practices in Procurement and
Bank PLC and Chairman of NDB Capital process restructuring, in international markets. She was the Group
Holdings PLC. Due to his business acumen and Director of Supply Chan Management (SCM ) at Bernhard Schulte
corporate leadership he is one of the top Ship Management (BSM) Group which manages over 650 ships
business leaders in the country. operating from over 23 offices around the world.

She carries over 40 years of local and international experience with

blue-chip companies and have been in senior management
positions covering strategic planning, finance, business process re-
engineering and operations.

BOARD OF
Dr. De Silva holds a Doctorate from the University of Newcastle in
Australia and an MBA from the University of Hull in UK. She is a Fellow
of the Chartered Institute of Management Accountants of UK. She is
DIRECTORS also an Associate Member of the Chartered Institute of Logistics and
Transport in Australia.

Dr. De Silva was the recipient of the 2015 Personality of the Year for
Service in the International Arena of the Maritime Industry, awarded by
The Women in International Shipping and Trading Association
(WISTA) Sri Lanka Branch.
 Mr. Haresh Kaimal
Non-Executive Director
Mr. Ranil Prasad Pathirana Mr. Haresh Kaimal is a co-founder
Non-Executive Independent Director of Softlogic and a Director since
its inception. With over 25 years of
Mr. Pathirana is the Finance Director
experience in IT and operations,
of the Hirdaramani Group and is
he currently heads the IT division
a Director of Hirdaramani Apparel
of the Group to drive
Holdings (Private) Limited, Hirdaramani
advancements in Information
Leisure Holdings (Private) Limited and
Technology and Enterprise
Hirdaramani Investments Holding
Resource Management within
(Private) Limited which are the holding
Softlogic. He is also a Director of
companies of the Hirdaramani Group.
Softlogic BPO Services (Pvt) Ltd.
He is a Non-Executive Director of
Sampath Bank PLC, Alumex PLC ,
Taprobane Holdings PLC , Ceylon
Hotels Corporation PLC.

Mr. Pathirana is a Fellow Member of

the Chartered Institute of
Management Accountants, UK
(FCMA - UK) and holds a Bachelor Dr. Sivakumar Selliah - Non-Executive Independent Director
of Commerce Degree from the
Dr.Selliah holds a MBBS degree and a Masters Degree (M.Phil). He was appointed
University of Sri Jayewardenepura.
to the board of Odel PLC in 2014. He has over two decades of experience in varied
fields. He currently is the Deputy Chairman of Asiri Hospitals Holdings PLC, Asiri
Surgical Hospital PLC and Central Hospital Ltd. He is a Director of Softlogic Holdings
PLC, HNB Assurance PLC, Lanka Walltiles PLC, Lanka Tiles PLC, Horana
Plantations PLC, ACL Cables PLC and Lanka Ceramics PLC. He is also the
Chairman of JAT Holdings (Pvt) Ltd and Cleanco Lanka (Pvt) Ltd. Dr. Selliah serves
on the Remuneration committee, Audit Committee, Investment committee, strategic
planning committee and related party transaction committee of some of the
companies on whose Board he serves.
12 ODEL PLC | Annual Report 2015/16

SENIOR MANAGEMENT TEAM

G. Natarajan Romesh Jayewardene

Head - Retail Operation Head of Projects &
& Business Development Mall Development

Desiree Karunaratne
Group Director - Marketing
 13

Aldrin Gamage
General Manager-
Visual Merchandizing Ruwan Wijeratne
& Retail Design Chief Finance Officer

Gopika Mageswaran
Business Controller
14 ODEL PLC | Annual Report 2015/16

SENIOR MANAGEMENT TEAM

Thilina Dassanayake Natasha Fonseka

Head of Buying Head - Group Human
Capital & Taxation

Vishaka Tennakoon
Head of Internal Audit
- Retail Sector
 15

Foo Haw Li Nalaka Rambukpota

General Manager - IT General Manager-
Corporate Operations
Meneka Galgamuwa
Head - Corporate Planning
16 ODEL PLC | Annual Report 2015/16
17
Odels vibrant and earthy Rainforest
themed summer 2016 collection
showcased the lushness of the forest
with bold nature motifs. The dramatic
prints and psychedelic colours
brought alive a veritable tropical
rainforest within Odel stores.
18 ODEL PLC | Annual Report 2015/16
19
20 ODEL PLC | Annual Report 2015/16

MANAGEMENT
DISCUSSION
AND ANALYSIS

A steady increase in consumer confidence was witnessed

during 2015/16 as consumption-led growth stimulated the
economy over the course of the year, with shoppers
displaying openness to purchasing branded goods,
as the market for retail fashion visibly expanded. The influx of
tourists helped drive sales further as inbound tourists crossed
the 1.8 million mark in the period under consideration. The
upsurge in consumption trends supported our strategy of
introducing a variety of international brands into Odel. The
year under review witnessed the launch of an impressive line-
up of international branded clothing and accessories into Odel
stores, coupled with a new collection of local brands. This dual
mix of strong local and international trends drove higher
footfalls and created hype around the Odel brand, resulting in
a highly profitable year during which we surpassed the
previous years financial performance. The consolidation of
both branded and unbranded lines has helped improve our
cost margins and deliver an excellent increase in topline
growth by 33% over the previous year.

Flagship Store
During the year, the flagship Odel store strengthened its
reputation as a must-visit lifestyle destination, judging by the
strong profitability it recorded in 2015/16. It has become a
veritable icon and attracts both local and foreign visitors. The
entry of high-end international brands into the flagship Odel
store reflects multi brand retail at its finest. Our product
offering increased considerably which required us to ensure
effective inventory management while keeping a close eye on
margins. These two aspects have helped drive higher
profitability during the year, supported by better cost
management skills.

We have effectively zoned the store to provide more crisp

and clean spaces in the store in accordance with
 21

guidelines from the international brands being displayed in

the store. The womens brand, Mango, was introduced into
the store and now occupies pride of place in
the womens section. Bodyshop, the first international
cosmetics company to introduce fair trade to the cosmetics
and toiletries industry was opened at the flagship store. Pepe
Jeans, Van Heusen, Peter England, Allen Solly and Louis
Phillip were introduced into the mens categories. The
childrens section expanded to include international brands
such Allen Solly and United Colors of Benetton. The entire
ambience of the retail space at the flagship store has been
revamped and spruced up and now exudes a fresh appeal.

Visual Merchandising
Our visual merchandising operation had an eventful year as
many international brands were brought into Odel stores. The
introduction of these brands required an overhaul of retail
display and necessitated the adoption of a new visual
merchandising approach. We have high-impact zones
highlighting the latest trends thus inspiring our customers from
the moment they enter. The joint synergy between the
international brands has injected
a new spark into Odel. The Visual Merchandising
team has had to understand and replicate
international brands in-store display specifications,
backed by numerous hours of training by the
respective brands at their overseas locations.

All branded display is monitored regularly by international

brand representatives and we have to remain at the cutting
edge of visual merchandising to meet their expectations.
However, our long years of building the Odel brand have
stood us in good stead, which reflects the strength in the
visual merchandising area. Odel stores received a facelift
during the year and now sport a much trendier outlook.
22 ODEL PLC | Annual Report 2015/16

MANAGEMENT DISCUSSION AND ANALYSIS

 promotions, and customers locally produced quality
conducted end of products.
season sales - all of
which helped to
The visual These reputed achieve and
merchandisin international brands surpass our targets.
g team span a wide choice End-of-season
worked of trends and offer sales have helped
closely with Sri Lankans the boost the topline
the Marketing convenience of further.
team for shopping for
implementing genuine Inventory
in-store international brands management too
design and at their doorstep. was greatly
promotions One of the highlights improved during the
through the of the year was the year to minimize
year. We have entry of the Mango overstock by
now fallen brand into Odel. managing new
into the Nike, Levis and buys based on sell
rhythm Charles & Keith through. Further,
of the performed internal processes
season impressively during were streamlined
s as in the year as did so as to enhance
the Mothercare. In order bottomline and help
internati to consolidate the
cash inflows.
onal Mothercare brand,
calenda only 1 Mothercare
r. Each main outlet now Private Brands
brand operates as the hub
The private labels
has a for quality mom and
were streamlined
unique baby related range
along with the
display of clothing and
international
design accessories. The
branded range
and this brand is also
during the year to
infuses showcased at 3
ensure that, the two
excitem other Odel stores.
combine well to offer
ent and Odel introduced
a wide choice for
freshne branded Michael
customers. These
ss into Kors, Armani, were strengthened
the Diesel, Adidas and during the year by
Odel DKNY watches into infusing new
brand. its stores. Branded designs and
sunglasses were concepts. We
also added to its ensured a greater
portfolio of designer focus on private
Internation
accessories. labels to exercise
al Brand
Collection greater control over
During the year, we
the supply chain
Brands: stringently ensured
process, which
shorter shelf life by
resulted in faster sell
aligning to
through and increased
international
seasonal sales during the year.
collections, This thereby provides
undertook
aggressive
23
 pre-empt trends and the
understand marketing introduction
of the products. We will of four new
also carry over the tenants.
international brand
ethos to local brands
as well, thereby Marketi
BICONIC- Odels private brand
uplifting and upgrading
store is located at Capital ng
the local brands along
launched a range of youthful the same lines. Mall and extends over an
New
collections and vibrant themes area of 10,000 square Collections
throughout the year, including Skater Our Store Network feet.
Girl, Acid Dancer and Sugar Rush. During
Currently, there are Luv SL, tourists
22 Odel stores and 2015/16,
Liberation The latest addition, to the favourite shopping
20 Softlogic branded Odel
Menswear private label portfolio, spot for Sri Lankan
stores which mirrored
where all products are designed in- souvenirs, was
spearhead global
house. Liberation is positioned as the opened in
international branded fashion
value range, catering to the basic Centara Ceysands Resort
retail in Sri Lanka. and Spa, Bentota
trends
casualwear requirements in a mans
The Softlogic stores through its
wardrobe. another Softlogic
include 3 multi brand eclectic
Lesuire Property, in
Luv SL did phenomenally well during outlets (Galleria) and collections
the same period.
the year and the addition of two new 15 exclusive branded which were
stores at Crescat and Centara outlets along with 2 At the Odel flagship as distinctive
Ceysands Resort and Spa, Bentota international watch store, we created new as the
contributed to the performance. Next stations as part of space for mens shoes changing
year, we plan to open 3-4 new Luv SL the store network. and luggage, so that seasons:
stores in key tourist destinations. We they have a better
are infusing the brand with technical Penetrating further into the Think Big-
visual display in the
and design nuances to ensure the outskirts of Colombo store. During the year, Pre Fall
brand retains international appeal as it surburbs, Odel was opened Softlogic brands 2015
is mainly targeted at tourists. in Thalawathagoda and opened five exclusive
Kalubowila which has branded stores at the Combining
Meanwhile, our tenants, Spa Ceylon, become a shopping Liberty Plaza Arcade for the latest
Exclusive Lines, Colombo Jewelry destination. The highly Nike, Levis, Pepe trends with
Stores, Avirate, Embark, Noritake residential suburb of Jeans, Giordano and the stores
and Tea Brands also did well during Thalawathugoda now has International Watches. own
the year. Tenant income improved by the benefit of the wide- Going ahead, we will aspirations
100% during the year, with the spectrum shopping look to add strategically for the future,
introduction of new tenants. experience that only Odel located outlets and Odel chose
can offer. This area is fast increase our the
During the period under review, the
expanding and attracting international brand catchphrase
apparel factory was moved from
expats and professionals portfolio to offer a wider Think Big -
Rajagiriya to Boralesgamuwa. This
who are relocating to the choice. for its Pre-
operation posted a strong performance,
reflecting a growth of 14% over the area. The new, large format Fall theme
Meanwhile, operations
previous year. This Odel reflecting the
were streamlined and
factory is operated purely for local impetus it
cost savings accrued
has gained
Odel brands and we are considering by rationalizing rentals
from new
expanding its capacity in the near and taking advantage
owner
future. of reduced energy
Softlogic
costs. Tenant income
Learning from retailing international
improved by 100%
brands, the local brand team is instilling
during the year, with
adequate lead times in production so as to
Holdings, under whose stewardship the
brand has
24 ODEL PLC | Annual Report 2015/16

MANAGEMENT DISCUSSION AND ANALYSIS

 Fall15 runways in the through the principal departments within
fashion capitals of the the store, with each getting its own
world. Odel launched two colour combination, in which Green,
new collections featuring Blue, Gold and Black were featured.
dark and brooding
designs, rich with earthy
Wanderlust - Spring 2016
tones that took style lovers
back to nature. The The advent of spring brought with it a
collection was heavily theme that has gained an immense
emphasized and amount of popularity in pop culture:
accentuated further with Wanderlust. The collection was inspired
store dcor and in all by traits of bohemia and the spirit of
avenues of communication nomads. Rustic environments with earthy
and marketing. It debuted tones were heavily featured in the
with a stunning fashion campaign with visuals of explorers and
show featuring the flagship the free-spirited.
looks of the collection, the
runway itself featured Closet - Odels work-wear range
autumn leaves and a also introduced several themes
big plans seasonal features,
unique color palette that and collections focusing on
for special bank
brought out the ambiance polished and pastel pinks and
expansion. promotions and
of a forest during fall. stylishly professional
Inspired by extended shopping
the microprints.
hours as the
creations Do you believe in
countdown to ODEL Linen - Focusing on
of iconic Magic ? - Christmas
Christmas began. islandwear and the comfort of
fashion 2015
tropical clothing, ODEL introduced
designers Seasonal dcor that
such as Do you believe in Magic? the linen range which allowed for
embodied the traditional
the a question guaranteed to symbols of Christmas
fashion in chic and comfortable
London- spark anticipation in young transformed Odel shopping styles.
based and old alike was the areas into an enchanting
Serbian theme for last years festive and elegant personification
fashion makeover, fittingly brought of the warmth and cheer of
designer alive by dcor changes, the festive season, as the
RoksandaI exciting new products, retail chain prepared for
lincic, yet another grand
Topshop celebration of Yuletide
and 2015. Evocative traditional
MarquesA dcor such as Christmas
lmeida, trees, wreaths and stars
Odels new dominated the flagship
pre-Fall store at Alexandra Place,
collection but were tweaked
was with metallic and
dominated diamant materials to
by the enhance their magical
Color aura. A standout feature
Block. of the dcor was the
creation of chandeliers
of varying sizes with
Into the
wreaths and metallic
Woods -
star curtains that
Fall 2015
created a magical
The collection atmosphere, enhancing
introduced the golden arches and
forest couture gold trimmed windows.
that dominated The themes of the
season were carried
25
 products from LUV Weekend
SL, along with Getaways to
traditional sweets. Centara
The ambience was Ceysands
enhanced by a flutist Resort and
and traditional games Spa.
and activities that
took place Internationa
throughout the l Womens
Avurudu week. day Women
were the
Mothers Day 15 - center of
World Animal Day 15 A
Queen of Hearts- attention
range of products along
Customers had the during
with instore
opportunity to stand a Womens
communication and
chance to win Day16 at
dcor was launched in
makeovers for their ODEL. With
commemoration of
mom worth Rs an
Animal Day and part of
20,000 by empowering
the proceeds went
shopping at Odel. In ad
towards the Value Life-
this promotion, 3 Preserve Yala initiative campaign,
mothers were focused on educating female
eventually selected as people on the customers
Promotions winners. Additionally, a were given
importance of animal
Our aim this year was to reinforce Odels gift collection was also life and the need to a special
position as a multi brand retail fashion leader introduced. safeguarding our wild 20%
and to showcase our innovative approach. As life. discount.
a result, Odel now offers a holistic brand Fathers Day 15 An
experience that spans our products, our in- Arts and crafts station Childrens Day 15 You Shop,
store environment and our marketing and was set up in-store Super Kids - A carnival We Pay-
promotions. In the recent years, the company along with a lot of in- with a host of fun Customers
has built up a strong reputation for its dynamic store branding and games and activities were given
public communication took place at the gift vouchers
marketing and promotional activities that
My Dad, My Hero. flagship Odel store. over a two
stand apart in terms of elegance and
Additionally, gift giving month period
execution. Every year, Odel celebrates
was also highlighted Independence Day 16 that equaled
hallmark occasions which are rich with
and promoted through Campaign launched their bill when
meaning for all our customers. Some of the
all avenues of along with products they spent
main events during the year:
communication. promoting and Rs. 4,000 or
showcasing various more,
Easter15 was celebrated with fanfare
aspects of Sri Lanka essentially
using a catchy theme, Eggciting
giving back
Fundays. A carnival was organized for
Valentines Day 16 was what they
kids over the course of the Easter
celebrated with a spent. They
weekend, with egg painting, an egg hunt,
campaign titled Ignite were then
cupcake decoration and other fun
the Love Bomb! A range allowed to
activities. This drew tremendous crowds
of products featuring redeem these
of kids while parents were overjoyed with
quirky and fun vouchers on
the prospect of seeing their kids enjoying
Valentines Collection their next
themselves and experiencing Easter
was made available for transaction.
traditions.
romantics. Various This
The Sinhala and Tamil New Year 15 promotions were also promotion
was a grand affair and garnered a lot carried out during the was widely
of attention from locals and tourists season; customers had accepted by
alike. Avurudu Gama, a the opportunity to ODEL
quintessentially Sri Lankan village was participate in a raffle customers
created housing avurudu related draw to win Return Air who enjoyed
Tickets to Maldives and the promo
and returned several times over to redeem
their vouchers.
26 ODEL PLC | Annual Report 2015/16

MANAGEMENT DISCUSSION AND ANALYSIS

 Double forcussed management of
happiness- the cost structure and
Loyalty customers these gains are evident in
were awarded the results. We are
Fashion committed to investing bring them to the same standard
with double
Shows The further to enhance in- so as to do justice to the stature of
loyalty points for a
Softlogic store appeal, the international brands in our
special
Golf portfolio.
promotional merchandising and the
Tournament
period. overall look and feel for
held by The proposed Odel Mall has
an enhanced shopping
Softlogic Points completed the design stage and is in
experience. We will
Holdings Redemption- At the stage of garnering approvals. We
achieve gradual
PLC, the the end of the plan to commence construction in
refurbishment of all our
parent year, customers 2016 and planned for completion of
stores to
company of were encouraged the project over three years. The Odel
Odel at the to spend the Mall, once completed, will have four
Royal points they have basement parking levels. A BOI
Colombo accumulated over company will be set up to handle the
Gold Club the course of the development of the mall. The entire
on year. projects costs will exceed USD100
26thSeptem Mn and will have a gross square feet
ber 2015, Carry the card - A area of over 600,000.
saw a lively brand building
and campaign that The Odel Mall is envisioned as a
captivating gave loyalty recreational destination and the first
display of customers the tenant, a multiplex with seven screens,
the Odel Fall opportunity to
has already come onboard.
collection at redeem their
the fashion points throughout Creating shareholder value relies on
show that the store, thereby having a clear plan for growth. Our
was held. instilling the value strategy thus far has put us in a strong
The event and use of the
position for the future.
catered to ODEL loyalty card.
an exclusive
audience of
Birthday Human Resources
golf Discount-
Loyalty
Our Employees
enthusiasts
who form customers At Odel, we have deliberately set the
our high-end receive a 10% bar high for ourselves. We strive for
clientele. As discount when excellence in managing our
a special they shop on employees. We understand that a
segment, their birthday. sustainable business is a profitable
the Odel business and towards this end we
End of Season for
Fashion have sustained our focus on the well-
loyalty only - As a
show was being of our employees. No doubt,
special privilege for having the right team in place is
held in the
being a loyalty crucial to delivering our goals and
evening with
member, loyalty objectives. And we are proud of the
a stunning
customers got first cutting edge team that is now in place
array of
access to the End from the senior management to our
models
walking the of Season Sale at sales staff all of whom are committed
ramp. Odel. to build a stronger Odel. Our
commitment to being an equal
Promotions Future Outlook opportunity employer has inspired us
for Loyalty to recruit a diverse employee base
Card In 2015/16, we
that is resourceful and talented.
Customers experienced huge
improvements in cost
margins through
During the acquisition, which brought
year under down staff numbers.
review, our However, no staff was laid
change off. The 20% natural
managemen reduction in staff and
t skills came streamlined processes
to the fore, served us well as we were
as we able to offer higher
implemented incentives to existing staff
a paradigm while establishing a
shift in our performance-based
human culture. We have also
resource come out with a new
managemen policy document that
t approach. aligns the companys HR
The policies with that of the
acquisition group. Odel employees
of Odel and have recently participated
the in the Great Place to Work
subsequent survey and we are
merger with
Softlogic
required
strategic
planning.
The year
proved to be
a
challenging
one as we
had to
assess new
employee
strengths
and harness
the joint
synergies to
benefit Odel.
It was a
learning
curve for the
managemen
t and
employees
alike but the
result has
been nothing
short of
exemplary.

The transition
was managed
smoothly.
There was
some attrition
which was a
natural
corollary of the
 27

awaiting the results which will be analyzed to assess our

strengths and weaknesses as an employer as perceived by our
employees and find solutions to fill any identified gaps.
Gender %
Training & Development
As customers are exposed to global retail trends, it becomes evident that they
will appreciate knowledgeable sales staff when they shop with us, which is
why we have ramped up our training and development efforts. Odel offers a
distinctive ambience and interaction for shoppers and 46%
54%
our employees are at the heart of this. Empowered and engaged, our
employees are dedicated to providing exceptional levels of customer
service. During the year, we empowered frontline sales employees with
intensive sales training and familiarization with the brands and brands
history and specifics so that they could better present the brands to
shoppers. Brand representatives are also flown down to train staff in brand Male
sales. Our employees are given product knowledge brief and expected to Female
follow regular training programmes.
Age %
Back-office training was also provided and a substantial budget was
allocated throughout the year for training purposes. As a result of
the extensive training programmes, there was a marked
34%
improvement in customer services and employees approach to
44%
customers. We have also introduced a personal grooming module
so that staff is able to cater to the highest echelons of customers.

During the year, we established new KPIs for employees and revised the set 1%
4%
of performance management tools. Further, employees were apprised of the
17%
fact that they would have to meet standards set for international brands. We
also sent employees abroad to visit the brands stores
in various countries during the year under review to experience first-hand 18 to 25

26 to 35
how these valuable brands are to be presented. We believe that
36 to 45
encouraging innovation among our employees makes us stand apart.
46 to 55

Our senior staff from the various divisions participated in IGDS 56 and above

(International Group of Department Stores) conferences and

workshops held in the various countries and was able to bring back Service Period (%)
the learning and implement same at ODEL.
4% 3% 1%

Appraisals 13%

Performance appraisals are carried out in an ongoing manner in order to

review employee performance and to assess skills gap and training needs in
keeping with Key Performance Indicators. Odel fosters a culture of 62%
17%
meritocracy and the appraisal results provide a transparent account of
individual contribution to the company during the year. These appraisals also
help to identify future leaders. The company puts great emphasis on satisfied
workforce and managers work closely with their subordinates
Less than
3 4 to 5
6 to 10
11 to 15
16 to 20 above 21
28 ODEL PLC | Annual Report 2015/16

MANAGEMENT DISCUSSION AND ANALYSIS

 door culture encourages their personal and professional lives
regular interaction has resulted in high productivity
between managers and levels. Apart from numerous cultural
staff so that the and recreational gatherings, Odel
to management is able to Some of the awards
encourages its employees to
understand address grievances at presented at the Annual participate and excel in sports. As a
and help an early stage to find Award Night included result, we have many staff who are
fulfil their mutually acceptable facilitation of staff who talented sportspersons. The Odel
career solutions. The Head of have served long years. cricket team performed well at the
progressio Human Resources (HR) These employees have Mercantile Cricket Challenge and has
n and the entire team is been with the company for built up formidable basketball, hockey
objectives. accessible at all times different number of years and teams in tandem with Softlogic
The for employees to voice and are categorized employees.
Performanc their concerns to. An accordingly and are
e Appraisal Employee Open day considered partners in our Employees are eligible for personal and
Program is programme success. Awards were medical insurance, which provides a
done is held annually to also handed out to the safety net for their families and them.
between promote greater bonds Best Sales Personality of The company strives to provide
Supervisor between management the Year and the Sales competitive salaries and remuneration
and and staff. There is a Supervisor of the Year, coupled with training opportunities to
subordinat Grievance Handling which are transparent and enable career progression and career
e having a Process and a Policy in awarded only to the most growth.
quality place which is informed deserving. It is carried out
conversatio by identifying these
to all employees.
n and is not employees as Best Sales
just a form Personality of the Month
Reward &
filling and Best Sales
Remuneration
exercise. Supervisor of the month
Celebrating employees
and they are nominated
Grievance achievements
for the Best Sales
Handling constitutes an exciting
Personality of the Year
part of the companys and Best Sales
The
operations. By Supervisor of the Year
company
recognizing and after going through
offers strong
rewarding employee various criteria and
support for
achievements, we foster actions they need to fulfill
grievance
a dynamic culture where to be selected.
handling for
employees. employees work hard to
Employees achieve company goals
are and objectives, which Employee Welfare
encouraged keeps them highly
The work culture at
to be open motivated.
Odel highlights a
and frank
We reward and positive and vibrant
with their
recognize our energy which is a
immediate
employees regularly result of a happy
supervisors
in the presence of workforce. We have
and to be
their peers cultivated a balanced
unafraid to
so that they feel approach to work in
express their
a sense of pride the company where
displeasure
in their our employees have a
on any
achievements. passion for the job
policies or
they have been
practices. An
assigned. Moreover,
open
our 360 degree
approach to nurturing
 FINANCIAL REVIEW

Revenue and Margin (Rs Mn)

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0
2011 2012 2013 2014 2015
2
Reve
nue
Margi
n%

Interest costs and Borrowings (Rs Mn)

2,000
1,800
1,600
1,400
1,200
1,000
800
600
2 400
0
Borrowin
gs
Finance
Cost

Real economic growth in Sri Lanka in 2015 registered 4.8 per

cent, compared with 4.9 per cent in 2014. The per capita GDP
reached USD 3,924 from USD 3,854 year ago. The tourist
arrivals reached 1.79 million in 2015 a growth of 17.8 % from the
preceding year. Earnings from tourism substantially increased
during 2015 registering a growth rate of 22.6 per cent to US
dollars 2,980.7 million. These positive developments in macro
environment had a salutary effect on the topline of Odel.
200 29
0
2011 2012 2013 2014 2015

Revenue
The revenue reached Rs 6.45 bn which is
44 a growth of 33% from previous year. The
43
broadening of the product range through
42
acquisition of Softlogic Brands (Pvt) Ltd
41
40
which engaged in international branded
39 products as well as reorganization of retail
38 space and improved visual merchandizing
37 contributed to improving the revenue.
36
35
Gross Margin
34

33 Over the past years there has been an

improvement in gross margin despite the effect
of retail VAT. The overall Gross Profit margin in
2016 improved to 43.4% from 39.7% in
previous year. Pricing strategy, improved
sourcing of products and efficient management
of supply chain contributed to
the improvement in margin.
180

160 Overheads
140
Distribution expenses reflects the investment
120
made in brand building and other payments
100
linked to the topline.
80

60 The inflation rate indicated by CCPI annual

40 average change was 0.9% in 2015
20 decreased from 3.3% in 2014. The main
0 components of overhead costs are staff
costs, rent and electricity. Current year
Administration costs includes the costs of
the newly acquired subsidiary. Like to like
cost were contained at the same level as
previous year despite the increase in the
business volumes by rationalization and
reorganization of retail space and resource
utilization. This effort and focus will continue
in the forthcoming years.
30 ODEL PLC | Annual Report 2015/16

FINANCIAL REVIEW
 financial year. This operating results will boost the returns
trend is expected to in the forthcoming years.
continue in the short
term. Non Current Assets
Net Finance Movement of AWPR
cost and in ation Rs 860 mn was invested in
Taxes
acquiring property plant and
During 2015
Odel is liable for 16 equipment during the year. This
the interest
income tax at 28%. 14 includes purchase cost of land
costs
The effective tax rate situated adjacent to currently held
increased 12
has been increased to properties at Ward Place and the
appreciably in
36% from 15% mainly 10 purchase of land and building
line with
due to disposal of the 8 situated at Boralesgamuwa.
increase in
short term investment
lending rates 6
and reduction of tax In year 2015 Rs 600 mn was invested
and business
savings made on 4 in Softlogic Brands Pvt Limited in
volumes. The
income earned from 2 acquiring its shares in full. Further Rs
364 day
the same. 0 1,119 mn was invested in the equity
Treasury Bills
2011 2012 shares of the same company during
rate increase
Comprehensive the year.
AWPLR
from 6.01% to
Income In ation
7.3% at the
end of the The profit after tax total dividend of 12
calendar year for the year at Rs cents per share paid
and Average 256 mn is an for 2014/15 financial
Weighted increase of 59% year. This translated
Prime Rate from the previous to a payout of 32%
too increase financial year. This of the after tax profit
from 6.26% to remarkable in 2015/16. The
7.53%. The improvement is solvency position
finance costs derived purely from was examined prior
recorded a operational to such distribution
34% increase effeciencies and by the Directors and
as a result of improved margins on confirmed by the
these consolidated Auditors as per the
conditions. revenues. applicable statutory
The overall requirements.
borrowing Earnings per Share
levels The EPS increased to Total Equity and
increased due
cents 94 from cents 59 Return
to capital
in 2014/15 due to Total Equity increased
investments
improved results. to Rs 6,427 bn from Rs
made.
5.283 bn through the
The rates of Dividends retention of earnings
interest A 30 cents interim and revaluation of
have
dividend per share was Property Plant and
steadily
paid for 2015/16 which Equipment.
declined
compares with the
until the
The return on equity
previous
increased to 3.98%
year and
from 3.04% in the
displayed
previous year. The
an increase efficient utilization of
in this funds and improved
 31

Movement in Market price, net assets and earnings per share Cash Flow
The cash flow from operation
45.00 1.60
improved due to the profits earned
40.00 1.40
and better management of the
35.00 1.20 investment in working capital.
30.00
1.00
25.00 Despite the fact that the investment in
0.80
20.00 subsidiary and the acquisition of properties
0.60
15.00 were partly financed from borrowings gearing
10.00 0.40 ratio at year end remained static at 21.4%
5.00 0.20 compared to previous year.
0.00 0.00
2011 2012 2013 2014 2015 2016

Share Price Net Assets EPS

Equity base and Return on Equity

7,000 14

6,000 12

5,000 10

4,000 8

3,000 6

2,000 4

1,000 2
0 0
2011 2012 2013 2014 2015 2016
Equity
Return on equity
32 ODEL PLC | Annual Report 2015/16
33
Odels Jungle Luxe collection
unveiled iridescent colours and
summer fashion liberally painted with
tropical prints of palm trees, monstera
leaves, banana leaves in Martinique
design and tropical flowers, all
inspired by the rainforest.
34 ODEL PLC | Annual Report 2015/16

SUSTAINABILITY REPORT

Odels eight core values: Serve, Inspire, Style, Love,

Enjoy, Save, Give and Innovate, help us act as good
ambassadors for our customers, our employees, the
communities and environment in which we offer our
services. These values reflect who we are and the drive
and initiative for our CSR activities. Our core values are
well established and well-known throughout Odel
because they define our identity and our culture.

Environment
As a brand, Odel is universally recognized as an
environmentally conscious citizen. Our products give us a
platform to communicate messages about preservation of the
environment and we have leveraged strongly on that tool to
relay messages about preserving flora and fauna that are
being threatened by indiscriminate use. Odel has historically
been a catalyst in changing attitudes about the environment
and persists in doing so through various means. During the
year under review, Odel focused on the wildlife at Yala and how
overuse of the park is threatening the existence of the rich
biodiversity that exists in the park.

Wildlife
The tragic deaths of several magnificent specimens of wildlife
in the Yala National Park spurred Odel to launch Value LIFE
Preserve YALA a high profile campaign to remind visitors
about the dictates of responsible behaviour and etiquette
within the reserves boundaries in a bid to save lives and
minimise adverse impacts on fauna and flora. Odel produced
and installed more than 50 signboards along the routes
frequently used by sightseers with key messages covering
the dos and donts of visiting a nature reserve. It supported
the initiative with a mass media awareness campaign on the
importance of respecting the habitat and its rightful
inhabitants. This initiative had afar-reaching impact on visitors
to Yala, some of whom were forced into adhering to
responsible practices due to the all-pervasive presence of the
signboards.
 35

Community Initiatives
In its engagement with the community, Odel is committed to
bringing about empowerment and inclusivity by extending its
support to the communities in which it operates. Apart from
encouraging employee volunteerism, we ensure
that our operations have a positive impact on the
lesser privileged section of society.

Elevating Livelihoods
Odel has leveraged on its status as a market leader in fashion
retail to harness the skills of local craftsmen such that not only
are their skills sustained for future generations, but the store is
able to showcase the beautiful objects to the world. Luv SL in
particular, engages many local artists in small scale businesses
to produce souvenirs made with locally sourced raw materials
for Odel which offers them a fair market price. The company
elevates the quality of the products they manufacture by infusing
technical knowledge. This project has helped to upgrade the
standard of living in these communities. The company hopes to
expand the number of craftsmen it employs in time to come.

Project Ray of Hope

The project Ray of Hope focused on thousands of Cancer
patients in Sri Lanka. The project comprised of three stages; a
Blood Donation Campaign, an Almsgiving for residential cancer
patients and Donation of Medicine, Medical Equipment, and
other essentials to the National Cancer
36 ODEL PLC | Annual Report 2015/16

SUSTAINABILITY REPORT
 is indescribable context of corporate social
and responsibility; execution, and resulting
immeasurable. audience impact. 126 Department
Stores were invited to submit their
Hospital, The final outcome category Worlds most outstanding projects.
Maharaga and the impact of Best
ma. The Sustainability/CSR IGDS is the largest Association for
the project was
primary Initiative by a Department Stores worldwide, providing
incredible.
objective of Department Store at
support to 40 leading department stores
this CSR Funds donated - the Global
Rs. 1.7 Mn around the world.
initiative Department Store
was to be a Summit 2016 Awards
230 pints of Blood ODEL Kids play area donated to the
Ray of organized by the
was donated, out Lady Ridgeway Childrens Hospital
Hope for International Group of
of which
these Department Stores The play area in the Kids section at the Odel
approximately 100 (IGDS) held in Zurich,
patients. flagship store at Alexandra Place was donated
pints were from Switzerland. to the countrys premier paediatric hospital.
Complete Odel staff
The Lady Ridgeway Childrens Hospital is now
expenses for members This achievement
a brighter and happier place for its little
the project was impressively
Medical patients and young visitors as many of these
funded by the showcases the
equipment such afflicted children can put aside their suffering
employees of
as wheels chairs, Companys efforts for a short-while as they enjoy the play time.
the organization
beds, saline to improve the
through their The entire play area with its slides,
stands and drug environment and
voluntary
trolleys etc. were chutes and toys was recreated in a
donations the communities
donated together designated area in Ward 1 of the
coupled with surrounding ODEL.
with other hospital.
invaluable
essentials and
contributions Global Department
medicine required
from the Store Summit 2016
by the patients
organization. (GDSS) is the worlds
Through this The Ray of Hope CSR leading discussion
project the platform for
initiative was short-listed
employees, not department store
only contributed as one of the top 6 in the
CEOs and senior
monetarily but award executives and their
availed their stakeholders including
valuable time brands, suppliers and
and energy, by service companies to
way of donating meet, to network and
blood for the to exchange ideas.
patients and by
taking part in The award was
the preparation created by IGDS to
of a meal for foster greater
them. It was a corporate social
sincere gesture responsibility
of hope and the leadership among
satisfaction and department stores and
contentment the reward best-in-class
employees practices. The award
gained by has been judged on
engaging in three criteria: the main
this idea including its
worthy originality and
cause pertinence to the wider
 37

Other Donations
Odel also reaches out to other social causes that need solutions
and also volunteers its help in projects where it sees that it can
play a positive role. During the year, Odel donated generously for
various causes to the institutions listed here:

The Deaf Welfare Association

The Department of Social Services, for persons with disabilities

under-going Vocational Training

Rajagiriya Childrens and Elders Home managed by the Salvation

Army of Sri Lanka

Prithipura Communities of Sri Lanka, an organisation dedicated to

the care and assistance of children and adults with disabilities

Sri Lanka Welfare Organization of the Visually Impaired Women

Sri Lanka Federation of the Visually Handicapped

Ceylon School for the Deaf and Blind

Nest for skill development activities at the Half-way Home in

Mulleriyawa
38 ODEL PLC | Annual Report 2015/16

CORPORATE GOVERNANCE
Independence of the Directors independence has not been impaired due to
him serving on the Board of another
Dr. S Selliah, Mr. R P Pathirana and Dr. I C R De Silva
company which has a significant
function as independent directors of the Company.
shareholding in the Company.
As per the Rules issued by the Colombo Stock Exchange, Mr. R P
Pathirana and Dr. I C R De Silva meet all the criteria of independence. Dr. S Compliance with Corporate
Selliah meets all the criteria of independence except one. Governance Rules of the CSE
The following disclosures are made in
Dr. S Selliah is a Director of Softlogic Holdings PLC which
conformity with Section 7 of the Listing
has a significant shareholding in the Company. Rules and section 9.3.2 (b) of the
The Board having evaluated all the factors concluded that Dr. Selliahs
related party transaction rules of the
Colombo Stock Exchange.
Section Criteria Has the Company met the Criteria

7.10.1 Non-executive directors Complied with.

Out of 5 directors 4 are non-executive directors.

7.10.2 Independent directors Complied with.

There are three independent directors on the Board.

7.10.3 Disclosures relating to directors Mr. R P Pathirana and Dr. I C R De Silva meet all the criteria of
independence. Dr. S Selliah meets all the criteria except one.

7.10.5 Remuneration Committee Complied with.

Comprises of two independent non-executive directors.

The report of the committee and the names of the members of the
committee are given in the page 48 of the Annual Report.

7.10.6 Audit Committee Complied with.

Comprises of two independent non-executive directors and one

non-executive director

The report of the committee and the names of the members of

the committee are given in the page 49 of the Annual Report.

The Chief Finance Officer attends all the meetings.

 39

Realated Party Transaction

Agreegate
value
Agreegate value of related
of related party
party transaction transaction Terms and
entered as a % of condition of
in to during the net group therelated party
Name of the Related Party Relationship Nature of the transaction financial year revenue transaction
Loan Granted 288,034,275 4%
Purchase of Goods/ 381,295,556 All trading
Services 6% transactions
Investment in equity shares 1,119,288,000 17% were at arms
length and
interest has
Softlogic Brands (Pvt) Ltd Subsiidiary
been charged
monthly on the
outstanding
balance at
Settlement of Liabilities on the rate of
behalf of the Company 59,199,260 1% AWPLR+1%
40 ODEL PLC | Annual Report 2015/16

RISK MANAGEMENT
 impacting Odel PLC are The ability to source the products
discussed below. efficiently and be able to broaden the
range which appeals to the Odel
Changes in customer is an important aspect of
The Board of Macroeconomic reliable
managing product risks. Maintenance
Directors has conditions impact Odel. communication can
of highest quality standards is
the overall The increase in per capita prevent occurrences synonymous with Odel brand. Odel has
responsibility to income and tourist arrivals of reputational risk, a diverse and broad base of suppliers
manage risks are catalysts for growth of and can also help and continuously monitors the changes
effectively to
the target market segment alleviate the in fashion to ensure the range carried
ensure the
of Odel. The changes in consequences of any mirrors the latest trends.
business
the economic projections
developments incidents.
and performance are A consistent formula is applied to
are consistent
closely monitored to The ability to fund the manage and mitigate the risk of fashion
with the risk
understand the impact to business at competitive throughout the product life cycle,
appetite and
Odel. The product offer rates is crucial. The harnessing the intellectual capital of the
goals of the
and communication of the changes in fundamentals Groups highly experienced merchandise
group. The
value are tailored to which drive interest rates in team
Board Audit
recognize the change of the market are closely
Committee
customer needs and monitored. Also Odel This process has been developed over
(BAC) monitors
aspirations. actively develops the many years and is constantly reviewed
the
relationship with a multitude and updated to ensure it remains current
effectiveness of Business may be affected
of lenders and potential
and competitive in a changing market.
internal controls by events that have a
Comprehensive forecasting of fashion
with the Odel negative effect on the sources to broaden the
trends based on ongoing international
management, geopolitical environment in funding options.
research informs the buying teams
the Head of the country. These changed
Foreign purchasing throughout the season and this drives the
Internal Audit macroeconomic or
costs is largely merchandise strategy.
and the external geopolitical circumstances,
auditor. The such as political instability affected by the The assets are safeguarded physically where
BAC also and sudden negative events changes in customs relevant and also insured as appropriate to
monitors and within the country may duties and the mitigate risks of damage and unintended use.
reviews the result in rapid changes in exchange rate These measures too are reviewed by the
effectiveness of the business fluctuations. internal audit and a comprehensive
the external environment and in assessment is made annually of the coverage
economic downturn, The quality of service
auditors and the of risks through insurance. Also the ability of
which is likely to change provided by employees
Internal Audit. the underlying ICT systems to scale with
consumer purchasing and their work ethics and
expanding business requirements is closely
The Board behavior and thus integrity are also important
monitored. The continuing business growth
Remuneration negatively impact the aspect of risk
requires support of latest ICT to ensure
Committee groups sales. management. The staff are
efficiency and effectiveness of delivery and
liaises with the recruited through a
significant investment is made to upgrade the
Board Audit It is of the utmost screening process and
systems to modern standards of retail.
Committee to importance that the Odel provided with regular
group lives according to training and development
ensure there is
the high aims set out in its opportunities to hone their
a properly
policies and guidelines on skills. The environment is
integrated
business ethics. Should created to encourage
approach to
Odel fail in this respect, communication,
remuneration
there is a risk that the commitment and
that
companys reputation and participation. The
appropriately
brand could be damaged. orientation towards defined
reflects risk.
Accurate, transparent and systems and procedures to
be followed in most areas
Though there
of work and the checks
are many
and balances in place to
risks to which
ensure compliance are
a business is
regularly reviewed and
exposed
improved where
some of the
necessary.
key risks
 41

ANNUAL REPORT OF THE BOARD OF

DIRECTORS ON THE AFFAIRS OF THE COMPANY
The Directors of Odel PLC have pleasure in presenting to the members their Significant Accounting Policies
Annual Report together with the Audited Financial Statements of the
The significant accounting policies adopted in
Company and the Group for the year ended 31 March 2016. the preparation of the financial statements are
given on Pages 60 to 75 of the
Principal Activity Annual Report. There was no change
The principal activity of the Company during the year was fashion in the accounting policies adopted
retailing offering its customers a total shopping experience. from the previous year.
There have been no significant changes in the activities of the
company during the year under review. Property, Plant & Equipment
The details and movement of property,
Future Developments plant and equipment during the year
An indication of likely future developments is set out in the under review is set out in Note 10 to the
Chairmans Review on Pages 6 to 9. Financial Statements on Pages 80 to 89.
Performance Review Capital Expenditure
The Financial Statements reflect the The total capital
state of affairs of the Company and expenditure incurred on the
the Group. This report forms an acquisition of property,
integral part of the Annual Report of plant and equipment for the
the Board of Directors. Company and the Group
amounted to Rs. 720 Mn
Financial Statements (2015 Rs858 Mn) and Rs.
861 Mn (2015 Rs. 872
Section 168 (b) of the Companies Act Mn) respectively. Details of
require that the Annual Report of the capital expenditure and
Directors include financial statements their movements are given
of the Company, in accordance with in Note 10 to the Financial
Section 151 of the Act and Group Statements on Pages 80 to
financial statements for the accounting 89 of the Annual Report.
period, in accordance with section 152
of the Act. The requisite financial
statements of the Company are given
Reserves
on Pages 52 to 112 of the Annual
Report. The reserves for the
Company and Group
Directors Responsibility for amounted to Rs. 2,958
Financial Reporting Mn (2015 Rs.1,882
Mn) and Rs. 3,632 Mn
The Directors are responsible for the
(2015 Rs.2,488 Mn)
preparation of the Financial Statements
respectively.
of the Company to reflect a true and fair
view of the state of affairs. The Directors The movement and
are of the view that these financial composition of the
statements have been prepared in Capital and Revenue
conformity with the requirements of the reserves is disclosed in
Companies Act No. 07 of 2007 and the the Statement of
Sri Lanka Financial Reporting Changes in Equity.
Standards. A statement in this regard is
given on Page 46.
Donations
Auditors Report During the year,
donations made by the
The Auditors Report on the financial Company and the
statements is given on Page 51 of the Group amounted to
Annual Report. Rs. 2,131,341 (2015 -
Rs.1,795,900 ).
42 ODEL PLC | Annual Report 2015/16

ANNUAL REPORT OF THE BOARD OF

DIRECTORS ON THE AFFAIRS OF THE COMPANY
Stated Capital Directors Shareholding
The stated capital of the Company as at 31 No director directly held shares of the Company as at 31st March 2016.
March 2016 was Rs. 2,795,513,620.00 There
was no change in the stated capital of the Directors Remuneration
Company during the year under review.
Directors remuneration in respect of the Company for the financial year
ended 31 March 2016 was Rs.3,675,000 (2015 Rs. 4,725,000). The
Taxation
remuneration of the Directors is determined by the Board.
The information relating to income tax
and deferred taxation is given in Note 8 Directors interests in contracts and proposed contracts with
& 9 to the Financial Statements. the Company
Directors interests in contracts, both direct and indirect are
Dividends
referred to in Note 29. to the Financial Statements. The
Interim dividend of Rs. 0.30 (cents 30) Directors have no direct or indirect interest in any other contract
per share was paid on 8th March 2016. or proposed contract with the Company.

Statutory Payments Interests Register

The Directors, to the best of their The Interests Register is maintained by the Company as per the
knowledge and belief are satisfied that Companies Act No. 07 of 2007. All Directors have disclosed their
all statutory payments in relation to the interests pursuant to Section 192(2) of the said Act.
government and the employees have
been either duly paid or appropriately Shareholders Information
provided for in the Financial Statements.
The distribution of shareholders is indicated on Page 113 and
Events after the date of the 114 of the Annual Report. There were 5,858 registered
shareholders as at 31 March 2016 (31 March 2015 5,970).
Statement of Financial Position
No circumstances have arisen and no material Share Information
events have occurred after the date of
Information on share trading is given on Page 113 of the Annual Report.
Statement of Financial Position, which would
require adjustments to, or disclosure in the
accounts other than those disclosed in Note 34 Internal Control
to the Financial Statements. The Directors are responsible for the governance of the Company including the
establishment and maintenance of the Companys system of internal control.
Directorate Internal control systems are designed to meet the particular needs of the

The following Directors held Office during organisation concerned and the risk to which it is exposed and by their nature

the year under review. The biographical can provide reasonable, but not absolute assurance against material

details of the Board members are set out misstatement or loss. The Directors are satisfied that a strong control

on Pages 10 and 11. environment is prevalent within the Company and that the internal control
systems referred to above are effective.
Mr. A K Pathirage
Dr. S Selliah Risk Management
Mr. H K Kaimal The Groups risk management objectives and policies and the
Mr. R P Pathirana exposure to risks, are set out in Page 40 of the Annual Report.
Dr. I C R De Silva
 43

Corporate Governance For and on behalf of the Board

The report on Corporate Governance is given on Page 38 and 39
of the Annual Report.
Sgd.
The Auditors A K Pathirage
The Board Audit Committee reviews the appointment of the external Chairman/Managing Director
auditors, as well as their relationship with the Group, including
monitoring the Groups use of the auditors for non-audit services and
the balance of audit and non-audit fees paid to the auditors. Sgd.
H K Kaimal
The Auditors of the Company, Messrs Ernst & Young, Chartered
Director
Accountants were paid Rs. 1,457,856 as audit fees for the financial
year ended 31 March 2016 (2015 Rs. 1,040,000 ) by the Company.
Details of which are given in Note 7 to the Financial Statements.
Sgd.
As far as the Directors are aware, the Auditors do not have any Softlogic Corporate Services (Pvt) Ltd
relationship (other than that of an auditor) with the Company that Secretaries
would have an impact on their independence. The Auditors also
do not have any interest in the Company. 13th June 2016
Having reviewed the independence and effectiveness of the external Colombo
auditors, the Audit Committee has recommended to the Board that the
existing auditors, Messrs Ernst & Young, Chartered Accountants be
reappointed. Ernst & Young have expressed their willingness to
continue in office and ordinary resolution reappointing them as
auditors and authorising the Directors to determine their remuneration
will be proposed at the forthcoming AGM.

Going Concern
The Directors having assessed the environment within which it
operates, the Board is satisfied that the Company and the Group
have adequate resources to continue its operations in the
foreseeable future. Therefore, the Directors have adopted the
going-concern basis in preparing the financial statements.

Annual General Meeting

The Annual General Meeting of the Company will be held at the
Committee Room C of Bandaranaike Memorial International
Conference Hall (BMICH), Bauddhaloka Mawatha, Colombo 07 on
Thursday the 25th day of August 2016 at 10.30 a.m. The Notice of
the Annual General Meeting is on Page 115 of the Annual Report.
44 ODEL PLC | Annual Report 2015/16
 45

Financial
Reports

Financial Calendar

Results
Interim report for 1st Quarter 2016 12th August 2015
Interim report for 2nd Quarter 2016 11th November
2015 Interim report for 3rd Quarter 2016 29th January
2016 Interim report for 4th Quarter 2016 26th May 2016

Dividends Paid
Interim Dividend 2015/2016 08th March 2016
46 ODEL PLC | Annual Report 2015/16

STATEMENT OF DIRECTORS RESPONSIBILITIES

 going concern basis in 13th June 2016
preparing the financial Colombo
statements since
adequate resources are
available to continue
operations in the
The responsibilities foreseeable future. steps and undertake
of the Directors, in whatever
relation to the The Directors are responsible inspections they
financial statements for keeping proper may consider to be
of the Company accounting records, which appropriate to
differ from the disclose with reasonable enable them to give
responsibilities of the accuracy, at any time, the their independent
Auditors, which are financial position of the audit opinion.
set out in the Report Company and to enable them
of the Auditors on to ensure the financial The Directors are of the
Page 51. statements comply with the view that they have
Companies Act No. 07 of discharged their
The Companies Act No. 07
2007. responsibilities as set out
of 2007 stipulates that the
in this statement.
Directors are responsible They are also responsible
for preparing the Annual for safeguarding the assets Compliance Report
Report and the financial of the Company and for
The Directors confirm that to
statements. Company law taking reasonable steps for
the best of their knowledge,
requires the Directors to the prevention and
all taxes, duties and levies
prepare financial detection of fraud and
payable by the Company, all
statements for each other irregularities. In this
contributions, levies and
financial year, giving a true regard the Directors have
taxes payable on behalf of
and fair view of the state of instituted an effective and
comprehensive system of and in respect of the
affairs of the Company at
employees of the Company
the end of the financial internal control. The
and other known statutory
year, and of the Statement Directors are required to
dues as were due and
of Comprehensive Income prepare financial statements
payable by the Company as
of the Company and the and to provide the external
at the date of the Statement
Group for the financial auditors with every of Financial Position have
year, which comply with the opportunity to take whatever been paid or, where relevant
requirements of the
provided for, in arriving at the
Companies Act.
financial results for the year
The Directors consider under review.
that, in preparing financial
statements set out on
Pages 52 to 112 of the
For and on behalf of the
Annual Report,
Board of
appropriate accounting
policies have been ODEL PLC
selected and applied in a
consistent manner and
supported by reasonable
and prudent judgments Sgd.
and estimates, and that all Softlogic Corporate
applicable accounting Services (Pvt) Ltd
standards have been Secretaries
followed. The Directors
confirm that they have
justified adopting the
 47

REPORT OF THE RELATED PARTY TRANSACTIONS

REVIEW COMMITTEE
 Dr. I C R De Silva Annual Report as
Independent Non- required by the
executive Director applicable
(Chairperson) rules/regulations
Purpose 3. Determining whether are made in a
Mr. R P Pathirana - related party transactions timely and detailed
Related Party
Independent Non- that are to be entered into manner.
Transactions Review
executive Director
Committee was by the Company require
the approval of the Board The related party
established by the Board
Mr. H K Kaimal Non- transactions of the
during the financial year executive Director or Shareholders of the
under review in order to
Company for the period
Company.
comply with the Listing from 1st January 2016
The Chief
Rules of the Colombo 4. If related party to 31st March 2016
Finance Officer
Stock Exchange transactions are have been reviewed by
attended all
governing related party ongoing (recurrent the Committee and the
meetings by
transactions in respect of related party activities and comments
invitation. of the Committee have
listed companies as per transactions) the
the Codes of Best Committee
been communicated to
Softlogic Corporate
Practices on Related Party the Board of Directors
Services (Pvt) Ltd, establishes
Transactions issued by the of the Company.
Secretaries of the guidelines for senior
Securities and Exchange Company function management to
Commission of Sri Lanka as the Secretary to follow in its ongoing
(SEC) (the Code) and the Related Party dealings with the Sgd.
Section 9 of the Listing Transactions Review relevant related Dr. I C R De Silva
Rules of the Colombo Committee. party. Chairperson
Stock Exchange (the
Rules). Roles and 5. Ensuring that no director Related party
Responsibilities of the Company shall Transactions Review
The Board Related Party
participate in any Committee
Transactions Review 1. Reviewing in
discussion of a proposed
Committee (the Committee) advance all
related party transaction 13th June 2016
assists the Board in proposed related
party transactions for which he or she is a Colombo
reviewing all related party
related party, unless such
transactions carried out by of the Company
Director is requested to
the Company and its listed in compliance
with the Code. do so by the Committee
companies in the Group by
for the express purpose of
early adopting of the Codes
2. Adopting policies providing information
of Best Practice on Related
and procedures to concerning the related
Party Transactions as issued
review related party party transaction to the
by the Securities and
transactions and Committee.
Exchange Commission of Sri
overseeing existing
Lanka.
policies and 6. If there is any
procedures. potential conflict in
Composition any related party
The Related Party transaction, the
Transactions Review Committee may
Committee is appointed recommend the
by the Board of creation of a special
Directors of the committee to review
Company and the and approve the
following directors proposed related
served on the party transaction.
Committee as at 31st
March 2016. 7. Ensuring that
immediate market
disclosures and
disclosures in the
48 ODEL PLC | Annual Report 2015/16

REPORT OF THE REMUNERATION COMMITTEE

The Remuneration Committee comprises the following Non-

Executive independent Directors at the year-end.

Mr. Ranil Pathirana

Dr. S Selliah
The responsibilities of the Remuneration Committee include,

Ensuring the remuneration policy of the company

provides a competitive, attractive and reasonable
remuneration package for employees at all levels
on par with industry standards giving due
consideration to business performance and long
term shareholder returns.

Ensuring the remuneration package of

employee is linked to performance,
responsibility, expertise and contribution.

Ensuring formal and transparent procedure in

implementing the remuneration policy of the Company.

Remuneration Committee Meetings

No meerings were held during the year under review.

The aggregate remuneration paid to Directors is

disclosed in Note 7 to the financial statements.

Sgd.
Ranil Pathirana
Remuneration Committee

13th June 2016

 49

REPORT OF THE AUDIT COMMITTEE

 determine that the made by the
financial reports Internal Audit.
present accurate,
complete and timely External Audit
financial information. The Committee reviewed the
status of their independence.
Composition of the Meetings
Monitor the
Audit Committee
effectiveness of the The Committee held
The Audit Committee, three meetings during
Companys risk
appointed by and the year under review.
management processes
responsible to the Board of The Chief Finance
Directors, comprises of and the internal control
Officer attended these
three members. The system. meetings by invitation.
Committee is made up of
members who bring their To assess the The attendance of the
varied expertise and independence of members at these
knowledge to effectively the External meetings is given
carry out their duties. Auditor and below.
Members of the monitor the
Committee at year end performance of Name
are; Internal and
Mr. Ranil Pathirana
External Auditors.
Mr. Ranil Pathirana Dr. S Selliah
Chairman- Non-Executive To recommend to Dr I.C.R De Silva
Independent
the Board the
Director appointment of Financial Reporting
External Auditors. The Committee reviewed
Dr. S Selliah- Non-
the Financial Reporting
Executive Independent
Director System to determine the
accuracy and timeliness of
Dr I.C.R De Silva-Non- the Financial Statements
Executive Independent published. The Committee
Director also reviewed
the interim and year-
The functions of the Audit end Financial
Committee are governed Statements prior to
by an Audit Committee publication, in order to
determine that the
Charter, which is reviewed
statutory
annually.
requirements have been

Objectives and Role of complied with and the

the Audit Committee Companys Accounting
The main objective of Policies have been
the Audit Committee is consistently applied.
to assist the Board of
Directors to perform its
Internal Audit
duties effectively and The Committee
efficiently. Accordingly, monitored the
the objectives of the effectiveness of the
Audit Committee can Internal Audit
be described in detail Function and the
as follows: implementation of
the
Oversee the financial recommendations
reporting process and
50 ODEL PLC | Annual Report 2015/16

REPORT OF THE AUDIT COMMITTEE

CONCLUSION
Based on the review of reports submitted by the External and
Internal Auditors, the information obtained from management
the Committee having examined the adequacy and
effectiveness of the internal controls which have been
designed to provide a reasonable but not absolute assurance
to Directors that the assets of the company are safeguarded,
is satisfied that the financial position of the company is
regularly monitored and that steps are being taken to
continuously improve the control environment maintained
within the Company.

The Audit Committee determined that Messrs Ernst & Young

are independent on the basis that they do not participate in any
management activity of the company and do
not provide any non-audit services to the company and
recommended to the Board of Directors that Messrs Ernst &
Young be reappointed as statutory Auditors for the financial year
ending 31st March, 2017, subject to approval by the
Shareholders at the forthcoming Annual General Meeting.

Sgd.
Ranil Pathirana
Chairman Audit Committee

13th June 2016

 51

INDEPENDENT AUDITORS REPORT

 Our responsibility is to audit and, as far as
express an opinion on appears from our
these financial statements examination, proper
based on our audit. We accounting records
conducted our audit have been kept by
in accordance with Sri the Company,
Lanka Auditing
Standards. Those - the financial
standards require that statements of the
we comply with ethical Company give a true
requirements and plan and fair view of its
TO THE SHAREHOLDERS and perform the audit accounting estimates financial position as at
OF ODEL PLC to obtain reasonable 31 March 2016, and of
made by Board, as well as
assurance about its financial
Report on the Financial whether the financial evaluating the overall performance and cash
Statements statements are free presentation of the flows for the year then
We have audited the from material financial statements. ended in accordance
accompanying financial misstatement. with Sri Lanka
statements of Odel PLC, We believe that the Accounting Standards,
(the Company), and the An audit involves audit evidence we and
consolidated financial performing procedures to have obtained is
statements of the obtain audit evidence about sufficient and - the financial
Company and its the amounts and appropriate to provide statements of the
subsidiaries (Group), disclosures in the financial a basis for our audit Company and the
statements. The procedures Group comply with the
which comprise the opinion.
statement of financial selected depend on the requirements of
position as at auditors judgment, Opinion sections 151 and 153
including the assessment of
31 March 2016, and the In our opinion, the of the Companies Act
the risks of material
income statement, consolidated financial No. 07 of 2007.
misstatement of the
statement of statements give a true
financial statements,
comprehensive income, and fair view of the
whether due to fraud or
statement of changes in financial position of the
error. In making those risk
equity and, cash flow Group as at 31 March
assessments, the auditor
statement for the year 2016, and of its financial
considers internal control
then ended, and a 14 June 2016
relevant to the entitys performance and cash
summary of significant flows for the year then Colombo
preparation of the financial
accounting policies and ended in accordance with
statements that give a true
other explanatory Sri Lanka Accounting
and fair view in order to
information. design audit procedures Standards.
that are appropriate in the
Boards Responsibility Report on Other Legal
circumstances, but not for
for the Financial and Regulatory
the purpose of expressing
Statements Requirements
an opinion on the
The Board of Directors effectiveness of the entitys
As required by section 163
(Board) is responsible for internal control. An audit
(2) of the Companies Act
the preparation of these also includes evaluating the
No. 07 of 2007, we state
financial statements that give appropriateness
the following:
a true and fair view in of accounting policies
accordance with Sri Lanka used and the
a) The basis of
Accounting Standards, and reasonableness of
opinion, scope and
for such internal control as
limitations of the
Board determines is
audit are as stated
necessary to enable the
above.
preparation of financial
statements that are free from
b) In our opinion:
material misstatement,
whether due to fraud or error. - we have obtained all
the information and
Auditors Responsibility
explanations that
were required for the
52 ODEL PLC | Annual Report 2015/16

STATEMENT OF INCOME
Year ended 31 March 2016

COMPANY GROUP
For the Year ended 31 March For the Year ended 31 March
2016 2015 2016 2015
Note LKR LKR LKR LKR

Revenue 3 5,230,665,337 4,864,055,962 6,454,643,024 4,864,193,976

Cost of sales (2,951,201,976) (2,939,743,442) (3,653,512,327) (2,930,821,865)
Gross profit 2,279,463,361 1,924,312,520 2,801,130,697 1,933,372,111
Other income 4 1,933,681 112,498,290 25,865,654 107,641,962
Distribution expenses (305,530,951) (253,736,016) (395,787,966) (253,736,016)
Administrative expenses (1,543,166,894) (1,540,956,260) (1,904,587,680) (1,503,911,726)
Operating profit 432,699,197 242,118,534 526,620,705 283,366,331
Finance costs 5 (134,646,083) (99,638,233) (133,684,144) (99,638,233)
Finance income 6 33,804,329 5,256,834 7,352,478 5,256,834
Profit before tax 7 331,857,443 147,737,135 400,289,039 188,984,932
Income tax expense 8 (106,475,733) (19,302,801) (144,460,581) (28,122,698)
Profit for the year 225,381,710 128,434,334 255,828,458 160,862,234

Attributable to:
Owners of the parent 255,828,458 160,862,234
Non controlling interest - -
255,828,458 160,862,234

Earning per share

Basic, profit for the year attributable to
ordinary equity holders of the parent 25 0.83 0.47 0.94 0.59

The accounting policies and notes on page 60 through 112 form an integral part of the financial statements.
 53

STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 March 2016

COMPANY GROUP
For the Year ended 31 March For the Year ended 31 March
2016 2015 2016 2015
Note LKR LKR LKR LKR

Profit for the year 225,381,710 128,434,334 255,828,458 160,862,234

Other comprehensive income

Actuarial loss on defined benefit plans 19 19,663,669 (4,774,881) 25,835,558 (7,101,478)

Income tax effect (5,505,827) 1,336,967 (7,233,956) 1,988,414
14,157,842 (3,437,914) 18,601,602 (5,113,064)

Revaluation of land and buildings 10 920,352,238 (71,244,656) 969,974,642 (3,672,883)

Income tax effect (1,820,347) (5,274,387) (19,205,095) (22,050,809)
918,531,891 (76,519,043) 950,769,547 (25,723,692)

Other comprehensive profit/(loss) for the

year, net of tax 932,689,733 (79,956,957) 969,371,149 (30,836,756)

Total comprehensive income for the year,

net of tax 1,158,071,443 48,477,377 1,225,199,607 130,025,478

Attributable to:
Equity holders of the parent 1,225,199,607 130,025,478
Non-controlling interests - -
1,225,199,607 130,025,478

The accounting policies and notes on page 60 through 112 form an integral part of the financial statements.
54 ODEL PLC | Annual Report 2015/16

STATEMENT OF FINANCIAL POSITION

As at 31 March 2016

COMPANY GROUP
2016 2015 2016 2015
Note LKR LKR LKR LKR

ASSETS
Non-Current Assets
Property, plant & equipment 10 4,410,147,811 2,881,555,726 5,285,233,493 4,272,784,361
Investment property 11 - - 599,480,000 -
Intangible assets 12 - - 693,454,272 744,783,445
Investment in subsidiaries 13 2,097,389,040 978,101,040 - -
Other financial assets 28 42,469,730 52,500,437 51,561,850 80,983,837
Goodwill - - 104,680,409 104,680,409
Deferred tax asset 9 - - 14,412,800 56,527,456
6,550,006,581 3,912,157,203 6,748,822,824 5,259,759,508

Current Assets
Inventories 14 1,406,470,145 1,361,026,059 1,936,047,379 1,897,867,560
Trade and other receivables 15 524,665,025 204,304,311 603,703,037 298,966,558
Amounts due from related parties 17 317,039,316 1,197,580,072 87,056,813 370,262
Income tax refund Due - 22,786,094 - 24,183,546
Other financial assets 28 17,655,709 7,515,463 23,793,709 7,515,463
Cash and bank balances 22 61,972,516 99,952,941 83,208,435 110,614,424
2,327,802,711 2,893,164,940 2,733,809,373 2,339,517,813

Total Assets 8,877,809,292 6,805,322,143 9,482,632,197 7,599,277,321

EQUITY AND LIABILITIES

Equity
Stated capital 23 2,795,513,620 2,795,513,620 2,795,513,620 2,795,513,620
Revaluation surplus 1,786,936,542 875,770,994 2,227,598,126 1,284,834,010
Retained earnings 1,171,477,913 1,006,210,847 1,404,424,801 1,203,628,138
Total Equity 5,753,928,075 4,677,495,461 6,427,536,546 5,283,975,768

Non-Current Liabilities
Interest bearing borrowings 18 395,950,210 165,633,625 395,950,210 165,633,625
Deferred tax liabilities 9 45,997,810 33,936,718 - -
Retirement benefit liability 19 33,096,316 47,579,299 41,658,733 59,510,336
475,044,336 247,149,642 437,608,943 225,143,961
 55

COMPANY GROUP
2016 2015 2016 2015
Note LKR LKR LKR LKR

Current Liabilities
Trade and other payables 20 725,077,238 515,005,141 799,495,952 509,632,234
Amounts due to related parties 21 468,712,605 116,399,968 327,561,704 251,488,937
Income tax payable 67,400,069 - 82,947,091 -
Interest bearing borrowings 18 1,340,215,452 1,201,797,863 1,352,246,519 1,270,038,495
Deferred liability 16 47,431,517 47,474,068 55,235,442 58,997,926
2,648,836,881 1,880,677,040 2,617,486,708 2,090,157,592

Total Equity and Liabilities 8,877,809,292 6,805,322,143 9,482,632,197 7,599,277,321

Net asset per share 21.14 17.19 23.62 19.42

These financial statements are in compliance with the requirements of the Companies Act No 7 of 2007.

Sgd.
Chief Finance Officer

The board of directors is responsible for the preparation and presentation of these financial
statements. Signed for and on behalf of the board by

Sgd. Sgd.
Chairman Director

The accounting policies and notes on page 60 through 112 form an integral part of the financial statements.

13th June 2016

Colombo
56 ODEL PLC | Annual Report 2015/16

STATEMENT OF CHANGES IN EQUITY

Year ended 31 March 2016

Company Revaluation Stated Retained Total

Reserve Capital Earnings Equity
LKR LKR LKR LKR

As at 31 March 2014 952,290,037 2,795,513,620 946,525,490 4,694,329,147

Net profit for the year - - 128,434,334 128,434,334

Other comprehensive income (76,519,043) - (3,437,914) (79,956,957)
875,770,994 2,795,513,620 1,071,521,910 4,742,806,524

Dividends - - (65,311,063) (65,311,063)

As at 31 March 2015 875,770,994 2,795,513,620 1,006,210,847 4,677,495,461

Net profit for the year - - 225,381,710 225,381,710

Other comprehensive income 918,531,891 - 14,157,842 932,689,733
1,794,302,885 2,795,513,620 1,245,750,399 5,835,566,904
Dividends (81,638,829) (81,638,829)
Revaluation surplus transferred to
retained earnings (7,366,343) 7,366,343 -
As at 31 March 2016 1,786,936,542 2,795,513,620 1,171,477,913 5,753,928,075
 57

Group Attributable to equity holders of the parent

Revaluation Stated Retained Total
Reserve Capital Earnings Equity
LKR LKR LKR LKR

As at 31 March 2014 1,310,557,702 2,795,513,620 1,113,190,031 5,219,261,353

Net profit for the year - - 160,862,234 160,862,234

Other comprehensive income (25,723,692) - (5,113,064) (30,836,756)
1,284,834,010 2,795,513,620 1,268,939,201 5,349,286,831

Dividends - - (65,311,063) (65,311,063)

As at 31 March 2015 1,284,834,010 2,795,513,620 1,203,628,138 5,283,975,768

Net profit for the year - - 255,828,458 255,828,458

Other comprehensive income 950,769,547 - 18,601,602 969,371,149
2,235,603,557 2,795,513,620 1,478,058,198 6,509,175,375

Dividends (81,638,829) (81,638,829)

Revaluation surplus transferred to
retained earnings (8,005,431) 8,005,431 -
As at 31 March 2016 2,227,598,126 2,795,513,620 1,404,424,801 6,427,536,546

The accounting policies and notes on page 60 through 112 form an integral part of the financial statements.
58 ODEL PLC | Annual Report 2015/16

CASH FLOW STATEMENT

Year ended 31 March 2016

COMPANY GROUP
Note 2016 2015 2016 2015
LKR LKR LKR LKR

CASH FLOWS FROM / (USED IN) OPERATING

ACTIVITIES
Net profit before Income tax expense 331,857,443 147,737,135 400,289,039 188,984,932
Adjustments for
Depreciation 10.1.3/10.2.3 109,703,633 123,042,992 211,996,121 148,495,142
Intangible assets amortization 12.1.2 - - 48,283,407 17,088,812
Finance costs 5 134,646,083 99,580,756 133,684,144 99,580,756
Finance income 6 (33,804,329) (5,256,834) (7,352,478) (5,256,834)
Fair value (gain)/loss on investment property 4 - - (24,980,000) -
Impairment reversal of property plant and
equipment - (10,913,123) - (10,913,123)
Scrapping of property plant and equipment - 6,393,256 - 6,393,256
(Profit)/loss on disposal of property, plant &
equipment 4 947,585 (2,878,550) 913,955 (2,628,077)
Income from investment (15,999) (98,919,103) (15,999) (98,919,103)
Lease interest 6 - 57,477 - 57,477
Dividend income 4 (1,845,000) (4,050,000) - -
Provision for defined benefit plans 19.1 11,799,226 11,895,869 15,338,600 13,966,197
Operating profit before working capital
changes 553,288,642 266,689,875 778,156,789 356,849,435

Decrease/(Increase) in inventories (45,444,086) (18,170,995) (38,179,819) 40,796,727

Decrease/(Increase) in trade and other
receivables (320,360,714) 47,016,919 (304,736,479) 66,974,473
Decrease/(Increase) in dues from related
parties 880,716,195 (1,117,316,935) (86,686,551) (1,118,836,355)
Decrease/(Increase) in other current financial
assets (93,540) (16,805,717) 13,159,740 (17,048,117)
(Decrease)/Increase in dues to related
parties 352,312,637 38,799,889 76,072,767 -
(Decrease)/Increase in trade and other
payables 210,072,097 (9,341,551) 292,909,484 (92,076,515)
(Decrease)/Increase in deferred liability (42,551) (3,042,532) (3,762,484) (3,042,531)

Cash generated from operations 1,630,448,680 (812,171,047) 726,933,447 (766,382,883)

Finance costs paid 5 (134,646,083) (99,580,756) (133,684,144) (99,580,756)

 59

COMPANY GROUP
Note 2016 2015 2016 2015
LKR LKR LKR LKR
Defined benefit plan costs paid 19 (6,618,537) (17,983,710) (7,354,643) (18,015,377)
Income tax paid/Dividend tax paid (11,554,655) (9,502,797) (21,654,341) (23,934,005)

Net cash from/(used in) operating activities 1,477,629,405 (939,238,310) 564,240,319 (907,913,021)

CASH FLOWS FROM / (USED IN) INVESTING

ACTIVITIES
Acquisition of property, plant & equipment 10 (719,617,488) (858,156,069) (860,721,962) (871,720,996)
Investment in equity shares of subsidiaries 13 (1,119,288,000) (600,000,000) - (624,160,790)
Acquisition of intangible assets 12 - - - (12,758,264)
Dividend received 4 1,845,000 4,050,000 - -
Finance income 6 33,804,329 5,256,834 7,352,478 5,256,834
Investment in unit trust - (150,000,000) - (150,000,000)

Proceeds from disposal of investment - 2,321,128,529 - 2,321,128,529

Proceed from disposal of fixed assets 550,984 19,299,987 30,837,396 19,299,989
Net cash flows from/(used in) investing
activities (1,802,705,175) 741,579,281 (822,532,088) 687,045,302

CASH FLOWS FROM / (USED IN)

FINANCING ACTIVITIES

Repayment of interest bearing borrowings 18 (4,351,263,850) (5,268,426,852) (4,534,744,400) (5,268,426,852)

Proceeds from interest bearing borrowings 18 4,477,668,230 5,676,008,042 4,624,233,460 5,676,008,042

Lease rental paid - (997,858) - (997,858)
Dividends paid (81,638,829) (65,311,063) (81,638,829) (65,311,063)
Net cash flows from/(used in) financing
activities 44,765,551 341,272,269 7,850,231 341,272,269

Net increase/(decrease) in cash and cash

equivalents (280,310,219) 143,613,240 (250,441,538) 120,404,550

Cash and cash equivalents at the beginning

of the year 91,589,579 (52,023,661) 70,925,750 (49,478,800)
Cash and cash equivalents at the end of the year 22 (188,720,640) 91,589,579 (179,515,788) 70,925,750

The accounting policies and notes on page 60 through 112 form an integral part of the financial statements.
60 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016
 situated at Services (Pvt)
No.18 & 20, Ltd is a limited
Sama Mawatha, liability company
Boralesgamuwa. incorporated and
domiciled in Sri
1. CORPORATE Odel Properties Lanka. The
BSL
INFORMATIO (Pvt) Ltd. International
registered office
N (Pvt) Ltd.
Odel and principle
BSL International
1.1 General Properties place of
(Pvt) Ltd is a
(Pvt) Limited business of the
Odel PLC is a limited liability
is a limited Company is
limited liability company
liability located at
company incorporated and
company No.475/32, Kotte
incorporated and domiciled in Sri
domiciled in Sri incorporated Road Rajagiriya.
Lanka. The
Lanka whose and domiciled
registered office of
shares are in Sri Lanka.
the Company is
publicly traded in The registered
located
the Colombo office and
at
Stock Exchange. principle place
No.475/32,Kotte
The registered of business of
Road, Rajagiriya
office of Odel the Company
and the principal
PLC is located at is located at
No. 475/32, place of
No 475/32, Kotte
Kotte Road business is
Road, Rajagiriya.
Odel PLC is a Rajagiriya. situated at
subsidiary of P.O.Box 5,
Odel Lanka (Pvt) Export
Softlogic Retail
Ltd.
(Pvt) Limited and Processing
Softlogic Holding Odel Lanka (Pvt) Zone,
PLC is the Limited is a limited
Katunayake.
ultimate parent. liability company
The details of incorporated and Greenfield
subsidiary domiciled in Sri Trading (Pvt)
companies are Lanka. The Ltd.
as follows. registered office of
Greenfield
the Company is
Trading (Pvt) Ltd
Subsidiaries located
is a limited
at No.475/32,
liability company
Odel Apparels Kotte Road,
(Pvt) Ltd. incorporated
Rajagiriya and and domiciled in
Odel Apparels (Pvt) the principal Sri Lanka. The
Ltd is a limited place of registered office
liability company business is and the principle
incorporated and situated at place of
domiciled in Sri 271, Kaduwela business is
Lanka. The Road, situated at
registered office of
Thalangama, No.475/32,
the Company is
Battaramulla. Kotte Road,
located
Rajagiriya.
at No.475/32, Odel Information
Kotte Road, Technology Softlogic Brands
Rajagiriya and Services (Pvt) (Pvt) Ltd.
Ltd.
the principal Softlogic
place of Odel Information
Brands (Pvt)
business is Technology
 Ltd is a limited During the year,
liability the principal
Company activities of the
incorporated Company were
and domiciled to carry out real
in Sri Lanka. estate activities
The registered in relation to
office of the retail business
Company is
located at No.
14, De
Fonseka
Place,
Colombo 05.

1.2 Principal
Activities and
Nature of
Operations
During the year,
the principal
activities of the
group were as
follows;

Parent
Company
During the year,
the principal
activities of the
Company were to
carry out fashion
retail activities and
to earn rental
income from letting
retail space.

Subsidiaries
Odel Apparels
(Pvt) Ltd.
During the
year, the
principal
activities of the
Company
were to
manufacture
and supply of
the Garments
to the group.

Odel Properties
(Pvt) Ltd.
61
 items, and the prepared in
operations have accordance with Sri
not yet Lanka Accounting
commenced. Standards
(SLFRSs) as laid
Softlogic Brands down by the
(Pvt) Ltd Institute of
During the year Chartered
principal activities Accountants of Sri
Odel Lanka (Pvt) of the Company
Lanka. 2.1 Basis of
Ltd Preparation and
were importing and Measurement
During the year retailing branded
The
principal activities apparel.
consolidated
of the Company
financial
were to operate a 1.3 Date of
Authorization for statements have
shopping complex/ been prepared
issue
retail mall and the on a historical
operations have not
The cost basis,
consolidated except for land
yet commenced.
financial and buildings
Odel Information statements of and Financial
Technology Odel PLC and Instruments that
Services (Pvt) Ltd Its Subsidiaries have been
During the year, for the year measured at fair
ended 31 March value. The
the principal
2016 were preparation and
activities of the
authorized for presentation of
Company were
issue in these financial
to provide
accordance with statements are
information
the resolution of in compliance
technology
the directors on with the
infrastructure
13 June 2016. Companies Act
and
maintenance No.07 of 2007.
2. STATEMENT
services for the OF
group Consolidated
COMPLIANCE
companies. financial
The statements
BSL Consolidat are presented
International ed in Sri Lankan
(Pvt) Ltd Financial Rupees
Statements except when
During the
of the otherwise
year, the
Group
principal indicated.
(Income
activities of
Statement, 2.2 Basis of
the Company Statement Consolidation
were to of
import and The consolidated
Comprehensive
export of financial
Income, Statement
fashion statements
of Financial
accessories. comprise the
Position, Statement
financial
of Changes in
Greenfield statements of the
Trading (Pvt) Ltd Equity, Statement of
Group and its
Cash Flows subsidiaries as at
During the year, together with 31 March 2016.
principal activity Accounting Policies Control is
of the Company and Notes) as at 31 achieved when
was to trade March 2016 are the Group is
retail fashion
 exposed, or has circumstances in
rights, to variable assessing
returns from its whether it has
involvement with power over an
the investee and investee,
has the ability to including:
affect those
returns through The
its power over contractual
the investee. arrangement
Specifically, the with the other
Group controls vote holders
an investee if, of the
and only if, the investee
Group has:
Rights arising from
Power over other contractual
the investee arrangements
(i.e., existing
rights that The
give it the Groups
current ability voting
to direct the rights and
relevant potential
activities of voting
the investee) rights

Exposure,
or rights, to
variable
returns
from its
involvemen
t with the
investee

The ability to
use its
power over
the investee
to affect its
returns

Generally, there
is a presumption
that a majority of
voting rights
result in control.
To support this
presumption
and when the
Group has less
than a majority
of the voting or
similar rights of
an
investee, the
Group considers
all relevant facts
and
62 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

The Group re-assesses whether or not it controls an may result in outcomes that require a material
investee if facts and circumstances indicate that there adjustment to the recorded carrying amount of
are changes to one or more of the three elements of the asset or liability as at the reporting date or
control. Consolidation of a subsidiary begins when in future periods.
the Group obtains control over the subsidiary and
ceases when the Group loses control of the Judgments
subsidiary. Assets, liabilities, income and expenses of In the process of applying the Groups
a subsidiary acquired or disposed of during the year accounting policies, management has made
are included in the consolidated financial statements following judgments which have the most
from the date the Group gains control until the date significant effect on the amounts recognized
the Group ceases to control the subsidiary. in the consolidated financial statements:
Profit or loss and each component of other
Tax on SLFRS Financial Statements
comprehensive income (OCI) are attributed to the
equity holders of the parent of the Group and to the The Group is subject to income tax. The Group

non-controlling interests, even if this results in the non- recognized assets and liabilities for current and
controlling interests having a deficit balance. When deferred taxes based on estimates of whether
necessary, adjustments are made to the financial additional taxes will be due. Where the final tax
statements of subsidiaries to bring their accounting outcome of these matters is different from the
policies into line with the Groups accounting policies. amounts that were initially recorded, such
All intra-group assets and liabilities, equity, income, differences will impact the income and deferred tax
expenses and cash flows relating to transactions amounts in the period in which the determination is
between members of the Group are eliminated in full made.
on consolidation.
Estimates and assumptions
A change in the ownership interest of a The key assumptions concerning the future and
subsidiary, without a loss of control, is other key sources of estimation uncertainty at the
accounted for as an equity transaction. reporting date, that have a significant risk of
causing a material adjustment to the carrying
If the Group loses control over a subsidiary, it amounts of assets and liabilities within the
derecognises the related assets (including next financial year, are described below. The Group
goodwill), liabilities, non-controlling interest and based its assumptions and estimates, on
other components of equity while any resultant parameters available when the consolidated
gain or loss is recognised in profit or loss. Any financial statements were prepared. Existing
investment retained is recognised at fair value. circumstances and assumptions about future
developments, however, may change due to market
2.3 Significant Judgements, Estimates
changes or circumstances arising beyond the
and Assumptions
control of the Group such changes are reflected in
The preparation of the Group consolidated financial the assumptions when they occur.
statements requires management to make judgments,
estimates and assumptions that affect the reported Impairment of investments in subsidiaries
amounts of revenues, expenses, assets and liabilities, or financial assets
and the accompanying disclosures, and the disclosure The Group and the Company follow the guidance of
of contingent liabilities. Uncertainty exists at the date LKAS 36 and LKAS 39 on determining whether an
of preparation, about these assumptions and investment or a financial asset is impaired.
estimates and hence, This determination requires significant judgement.
The Group and the Company evaluate, among
63
 adjusted for specific credit risk and volatility.
market factors such Changes in assumptions
as nature, location about these factors could
and condition of the affect the reported fair
property. value of financial
instruments.
Defined Benefit Plans
Gratuity
The cost of gratuity is
other factors, the determined using Useful life for
duration and extent actuarial valuations. An Property, Plant
to which the fair actuarial valuation & Equipment
value of an involves making various
and Intangible
investment or a assumptions which may
Assets
financial asset is differ from actual
The Group
less than its cost developments in the
depreciates the
and the financial future. These include the
property, plant &
health of the near- determination of the
equipment and
term business discount rate, future
intangible assets,
outlook for the salary increases, staff
using the straight-line
investment or a withdrawals, and
method, over their
financial asset, mortality rates. Due to
estimated useful lives
including factors the complexity of the
after taking into
such as industry and valuation; the underlying
account of their
sector performance, assumptions and its
estimated residual
changes in long-term nature, the
values. The estimated
technology and defined benefit obligation
useful life reflects
is highly sensitive to
operational and managements
changes in these
financing cash flows. estimate of the period
assumptions. All
that the Group
Revaluation of assumptions are
intends to derive
property, plant and reviewed at each
equipment future economic
reporting date.
benefits from the use
The Group of the Groups
Fair value of financial
measures land instruments property, plant &
and buildings at equipment and
revalued amounts When the fair value of
intangible assets. The
with changes in financial assets and
residual value reflects
fair value being financial liabilities
managements
recognized in recorded in the statement
estimated amount
other of financial position
that the Group would
comprehensive cannot be derived from
currently obtain from
income. The active markets, their fair
the disposal of the
Group engaged value is determined using
asset, after deducting
an independent valuation techniques
the estimated costs of
valuation including the discounted
disposal, as if the
specialist to cash flow model. The
asset were already of
assess fair value inputs to these models
the age and in the
of such assets as are taken from observable
condition expected at
at 31 March 2016. markets where possible,
the end of its useful
Land and but where this is not
life. Changes in the
buildings were feasible, a degree of
expected level of
valued by judgment is required in
usage and
reference to establishing fair values.
technological
market-based The judgments include
developments could
evidence, using considerations of inputs
affect the economics,
comparable prices such as liquidity risk,
 useful lives dated expensed as
and the financial incurred and
residual statement included in
values s: administrative
expenses.
of these 2.4.1 Business
assets combinations
which and goodwill
could
Business
then combinatio
consequ ns are
entially accounted
impact for using
future the
deprecia acquisition
tion method.
charges. The cost of
Principal an
deprecia acquisition
tion and is
amortiza measured
tion as the
rates aggregate
used of the
are considerati
discuss on
ed transferred,
under measured
Note at the
2.4.7 acquisition date
and fair value and
2.4.11 the amount of
respecti any non-
vely. controlling
interest in the
2.4 Summary
acquiree. For
of
Significant each business
Accounting combination, the
Policies Group elects
whether to
The
measure the
followi
non-controlling
ng are
interest in the
the
acquiree at fair
signific
value or at the
ant
proportionate
accou
share of the
nting
acquiree at the
policie
fair value or at
s the
applie proportionate
d by share of the
the acquirees
Group identifiable net
in assets.
prepari Acquisition-
ng its related costs are
consoli
64 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016
 measured at fair value less any accumulated
with changes in fair impairment losses.
value either in profit or
loss or as a change to
other comprehensive
When the Group income (OCI). If the For the purpose of
acquires a contingent impairment testing,
business, it consideration is not goodwill acquired
assesses the within the scope of in a business
financial assets LKAS 39, it is combination is,
and liabilities measured in from the
assumed for accordance with the acquisition date,
appropriate appropriate SLFRS. allocated to each
classification and of the Groups
designation in Contingent consideration cash- generating
accordance with that is classified as equity units that are
the contractual is not remeasured and expected to benefit
terms, economic subsequent settlement is from the
circumstances measured at fair value combination,
and pertinent with changes in fair value irrespective of
conditions as at either in a profit or loss or whether other
the acquisition as a change to the other assets or liabilities
date. This comprehensive income of the acquiree are
includes the (OCI). If the contingent assigned to those
separation of consideration is not within units.
embedded the scope of LKAS 39,it is
derivatives in host measured in accordance Where goodwill
contracts by the with the appropriate has been
acquiree. SLFRS. Contingent allocated to a
consideration that is cash-generating
If the business unit and part of
classified as equity is not
combination is the operation
remeasured and
achieved in stages, within that unit is
subsequent settlement is
the previously held disposed of, the
accounted for within
equity interest is goodwill
equity.
remeasured at its associated with
acquisition date fair Goodwill is initially the operation
value and any measured at cost, disposed of is
resulting gain or being the excess of the included in the
loss is recognised in aggregate of the carrying amount
profit or loss. Any of the operation
consideration
contingent when determining
transferred and the
consideration to be the gain or loss on
amount recognised for
transferred by disposal of
non-controlling interest
the acquirer will be the operation.
over the net identifiable
recognised at fair Goodwill
assets acquired and
value at the disposed of in this
liabilities assumed. If
acquisition date. circumstance is
the fair value of the net
Contingent measured based
assets acquired is in
consideration which on the relative
excess of the
is deemed to be an
aggregate values of the
asset or liability that
consideration operation
is a financial
transferred, the gain is disposed of and
instrument and
recognised in profit or the portion of the
within the scope of
loss. cash-generating
LKAS 39 Financial
unit retained.
Instruments: After initial
Recognition and
recognition, goodwill 2.4.2 Foreign currency
Measurement, is translation
is measured at cost
 retranslated
The at the
Groups functional
consolidat currency spot
ed rate of
financial exchange
statement ruling at the
s are reporting
presented date.
in Sri
Lankan Differences
Rupees, arising on
which is settlement or
also the translation of
parent
monetary
companys
items are
and its
subsidiary recognised in
companie profit or loss.
s
Non-monetary
functional
items that are
currency.
measured in
Transactio terms of
ns and historical cost in
balances a foreign
Transactio currency are
ns in translated using
foreign the exchange
rates as at the
currencies
dates of the
are initially
initial
recorded
transactions.
by the
Non-monetary
Group
items measured
entities at
at fair value in a
their
foreign currency
respective
are translated
functional
using the
currency
exchange rates
spot rate at at the date
the date when the fair
the value is
transaction determined. The
first gain or loss
qualifies arising on
for translation of
recognition non-monetary
. measured at fair
value
Monetary
assets and
liabilities
denominat
ed in
foreign
currencies
are
65
 against specific points equal to
criteria in order to their fair value.
determine if it is
acting as principal Fair value of
or agent. The the points is
Group has determined by
concluded that it is applying a
acting as a statistical
principal in all of its analysis. The
revenue fair value of the
is treated in line Interest income
with the arrangements. The points issued is
deferred and For all financial
recognition of gain following specific
recognised as instruments
or loss on change recognition criteria
revenue when measured at
in fair value in the must also be met
the points are amortised cost
item (i.e., the before revenue is
redeemed or at and interest
recognised:
translation bearing financial
the expiry of
differences on assets classified
Sale of goods points
items whose fair as available for
Revenue from awarded.
value gain or loss sale, interest
is recognised in the sale of income or
other goods is expense is
comprehensive recognised recorded using the
income (OCI) or when the effective interest
profit or loss are
significant risks rate
also recognised in
and rewards of (EIR), which is the
OCI or profit or
ownership of the rate that exactly
goods have discounts the
loss, respectively).
passed to the estimated future
2.4.3 Revenue buyer, usually cash payments or
recognition on delivery of receipts through
the goods. the expected life of
Revenue is
the financial
recognised to the Loyalty Points instrument or
extent that it is Scheme a shorter period,
probable that the
The Group where
economic benefits
operates a loyalty appropriate, to
will flow to the
points the net carrying
Group and the
programme, amount of the
revenue can be
which allows financial asset
reliably measured,
customers to or liability.
regardless of when
accumulate Interest income
the payment is
points when they is included in
being made.
purchase finance income
Revenue is
products in the in the income
measured at the
Groups retail statement.
fair value of the
stores. The
consideration Dividends
points can then
received or
be redeemed for Revenue is
receivable, taking
free products. recognised
into account
Consideration when the
contractually
received is
defined terms of Groups right
allocated
payment and to receive the
between the
excluding taxes or payment is
products sold and
duty. The Group established.
the points issued,
assesses its
with the Rental income
revenue
consideration
arrangements
allocated to the
 Rental income
arising from 2.4.5 Taxes
operating leases
Current income
on shop space tax
provided to
Current
tenants is
income tax
accounted for on
assets and
a straight-line liabilities for
basis over the the current
lease terms. period are
measured at
2.4.4 Expenditure
recognition the amount
expected to be
a) Expenses are recovered
recognized in the from or paid to
income statement
the taxation
on the basis of a
authorities.
direct association
The tax rates
between the cost
and tax laws
incurred and the
earning of
specific items of
income. All
expenditure
incurred in the
running of the
business and in
maintaining the
property,
plant &
equipment in a
state of
efficiency has
been charged to
income in
arriving at the
profit for the
year.

b) For the purpose

of presentation
of the
Consolidated
Income
Statement the
Directors are of
the opinion that
the function of
expenses
method presents
fairly the
elements of the
Companys
performance,
and hence such
presentation
method is
adopted.
66 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016
 are differences,
recognise carry forward of
d for all unused tax
taxable credits and
temporary unused tax
used to initial recognition
losses, to the
compute the difference of an asset or
extent that it is
amount are s, except: liability in a
probable that
those that are taxable profit transaction that is
When the
enacted or will be not a business
deferred tax
substantively available combination and,
liability
enacted, at the against which at the time of the
arises from
reporting date. the deductible transaction, affects
the initial
recognition temporary neither the
Current income tax
of goodwill or differences, accounting profit
relating to items and the carry
of an asset nor taxable profit
recognised directly forward of
in equity is
or liability in or loss.
a transaction unused tax
recognised in credits and In respect of
that is not a
equity and not in unused tax deductible
business
the income losses can be temporary
combination
statement. utilised, except: differences
and, at the
Management associated with
time of the When the
periodically investments in
transaction,
evaluates deferred tax subsidiaries,
affects
positions taken in asset relating associates and
neither the
the tax returns with
accounting to the interests in joint
respect to
profit nor ventures,
deductible
situations in which
taxable profit deferred tax
temporary
applicable tax or loss assets are
regulations are difference recognised only
subject to In respect of arises from the to the extent that
interpretation and taxable it is probable
establishes temporary that the
provisions where differences temporary
appropriate. associated with differences will
investments in reverse in the
Deferred tax subsidiaries, foreseeable
associates and future and
Deferred tax is
interests in joint taxable profit will
provided using
ventures, where be available
the liability
the timing of the against which
method on
reversal of the the temporary
temporary
temporary differences can
differences at
differences can be utilised.
the reporting
date between be controlled
The carrying
the tax bases and it is
amount of
of assets and probable that
deferred tax
liabilities and the temporary
assets is
their carrying differences will
reviewed at
amounts for not reverse in
each reporting
financial the foreseeable
date and
reporting future.
reduced to the
purposes. extent that it is
Deferred tax
assets are no longer
Deferred
recognised for probable that
tax
all deductible sufficient
liabilities
temporary taxable profit
will be available Deferred tax
to allow all or assets and
part of the deferred tax
deferred tax liabilities are offset
asset to be if a legally
utilised. enforceable right
Unrecognised exists to set off
deferred tax current tax assets
assets are against current
reassessed at income tax
each reporting liabilities and the
date and are
deferred taxes
recognised to
relate to the same
the extent that
taxable entity and
it has become
the same taxation
probable that
authority.
future taxable
profits will allow 2.4.6 Sales tax
the deferred tax
asset to be Revenues,
recovered. expenses and
assets are
Deferred tax
recognised net
assets and
of the amount of
liabilities are
measured at the sales tax,
tax rates that except:
are expected to
apply in the
year when the
asset is realised
or the liability is
settled, based
on tax rates
(and tax laws)
that have been
enacted or
substantively
enacted at the
reporting date.

Deferred tax
relating to items
recognised
outside profit or
loss is
recognised
outside profit or
loss. Deferred
tax items are
recognised in
correlation to
the underlying
transaction
either in other
comprehensive
income or
directly in equity.
67
 part of parts of
property, The
receivable
s or plant and prese
payables equipment nt
in the are value
statement required to of the
of be expe
financial replaced cted
position. at cost
Where the sales intervals, for
tax incurred on a 2.4.7 Property, the Group the
plant and derecognis
purchase of deco
equipment es the
assets or mmis
services is not Property, replaced
sioni
recoverable from plant and part, and
ng of
equipment recognises
the taxation the
is stated the new
authority, in asset
at cost part with
which case the after
except for its own
sales tax is its
land and associated
recognised as use
buildings, useful life
part of the cost is
net of and
of acquisition of inclu
accumulat depreciatio
the asset or as n. ded
ed
part of the Likewise, in the
depreciati
expense item as when a cost
on and/or
applicable. major of the
accumulat
ed inspection respe
Receivables and
impairmen is ctive
payables are
t losses, if performed, asset
stated with the
any. Such its cost is if the
amount of sales
cost recognised
tax included the recog
includes in the
net amount of nition
the cost of carrying
sales tax criteri
replacing amount of
recoverable a for
componen the plant
from, or payable a
t parts of and
to, the taxation equipment provi
the
authority is as a sion
property,
included as part replaceme are
plant and
of receivables or nt if the met.
equipment
payables in the and recognition
statement of borrowing criteria are
financial costs for satisfied.
position. long-term All other
constructi repair and
The net on maintenan
amount of projects if ce costs
sales tax the are
recoverable recognitio recognised
from, or n criteria in the
payable to, are met. income
the taxation statement
authority is When as
included as significant incurred.
 made for the
difference
between
depreciation
based on the
revalued carrying
amount of the
assets and
depreciation
Land and buildings based on the
are measured at fair assets original
value less cost. Additionally,
accumulated accumulated
depreciation on depreciation as at
buildings and the revaluation
impairment losses date is eliminated
recognised after the against the gross
date of the carrying amount of
revaluation.
the asset and the
net amount is
Valuations are
restated to the
performed with
revalued amount
sufficient frequency
of the asset. Upon
to ensure that the fair
disposal, any
value of a revalued
revaluation
asset does not differ
reserve relating to
materially from its
the particular
carrying amount.
asset being sold is
A revaluation surplus is transferred to
recognised in other retained earnings.
comprehensive income
and accumulated in
equity in the asset
revaluation reserve,
except to the extent that it
reverses a revaluation
decrease of the same
asset previously
recognised in the income
statement, in which case
the increase is
recognised in the income
statement. A revaluation
deficit is recognised in the
income statement, except
to the extent that it offsets
an existing surplus on the
same asset recognised in
the asset revaluation
reserve.

An annual transfer
from the asset
revaluation reserve to
retained earnings is
68 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016
 Depreciation is calculated on a straight-line Group as a lessee
basis over the estimated useful lives of the Finance leases which transfer to the Group
assets as follows: substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the
Buildings Over 40 Years commencement of the lease at the fair value of the
Lease hold buildings Over the lease period leased property or, if lower, at the present value of the
Equipment Over 10 Years minimum lease payments. Lease payments are
apportioned between finance charges and reduction
Fixtures-air condition Over 10 Years
of the lease liability so
Fixtures-other Over 10 Years
as to achieve a constant rate of interest on the
Furniture Over 10 Years remaining balance of the liability. Finance
Office Equipment computer Over 05 Years charges are recognised in finance costs in the
Office Equipment other Over 20 Years income statement.
Shop fittings fixtures Over 10 Years
A leased asset is depreciated over the useful life of
Shop fittings mobiles Over 10 Years the asset. However, if there is no reasonable certainty
Motor vehicles Over 05 Years that the Group will obtain ownership by the end of the
Motor vehicles finance lease Over the lease period lease term, the asset is depreciated over the shorter
of the estimated useful life of the asset and the lease
An item of property, plant and equipment and any term.
significant part initially recognised is derecognised
Operating lease payments are recognised as
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss
an operating expense in the income statement
arising on derecognition of the asset (calculated as the
on a straight-line basis over the lease term.
difference between the net disposal proceeds and the
Group as a lessor
carrying amount of the asset) is included in the income
statement when the asset is derecognised. Leases in which the Group does not transfer
substantially all the risks and benefits of ownership of
the asset are classified as operating leases. Initial
The assets residual values, useful lives and
methods of depreciation are reviewed at direct costs incurred in negotiating an operating lease

each financial year end and adjusted are added to the carrying amount of the leased asset
prospectively, if appropriate. and recognised over the lease term on the same
bases as rental income.
2.4.8 Leases
2.4.9 Borrowing costs
The determination Borrowing costs
of whether an directly attributable
to the acquisition,
arrangement is, or
construction or
contains, a lease is
production of an
based on the
asset that
substance of the
necessarily takes a
arrangement at the
substantial period
inception date,
of
whether fulfilment of
time to get ready
the arrangement is
for its intended
dependent on the
use or sale are
use of a specific
capitalised as part
asset or assets or
of the cost of the
the arrangement
respective assets.
conveys a right to
All other
use the asset, even
borrowing costs
if that right is not
are expensed in
explicitly specified
the period they
in an arrangement.
occur. Borrowing
costs consist of
interest and other
costs that an
entity incurs in
connection with
the borrowing of
funds.
 69

2.4.10 Investment Properties The useful lives of intangible assets are assessed as
either finite or indefinite.
Investment properties are measured initially at
cost, including transaction costs. Subsequent to Intangible assets with finite lives are amortised
initial recognition, investment properties are stated over their useful economic lives and assessed
at fair value, which reflects market conditions at for impairment whenever there is an indication
the reporting date. Gains or losses arising from that the intangible asset may be impaired. The
changes in the fair values of investment properties amortisation period and the amortisation method
are included in the income statement in the period for an intangible asset with a finite useful life is
in which they arise. Fair values are evaluated reviewed at least at the end of each reporting
annually by an accredited external, independent period. Changes in the expected useful life or
valuer, applying a valuation model recommended the expected pattern of consumption of future
by the International Valuation Standards economic benefits embodied in the asset is
Committee. accounted for by changing the amortisation period
or method, as appropriate, and are treated as
Investment properties are derecognised when changes in accounting estimates. The amortisation
either they have been disposed of or when the expense on intangible assets with finite lives is
investment property is permanently withdrawn from recognised in the income statement in the expense
use and no future economic benefit is expected category consistent with the function of the
from its disposal. The difference between the net intangible assets.
disposal proceeds and the carrying amount of the
asset is recognised in the income statement in the Amortization is calculated on a straight-line basis
period of derecognition. over the estimated useful lives of the asset as
follows:
Transfers are made to or from investment property
only when there is a change in use. For a transfer Computer Software 3 - 5 Years
from investment property to owner-occupied
property, the deemed cost for subsequent Intangible assets with indefinite useful lives are not
accounting is the fair value at the date of change. amortised, but are tested for impairment annually,
If owner-occupied property becomes an investment either individually or at the cash-generating unit
property, the Group accounts for such property in level. The assessment of indefinite life is reviewed
accordance with the policy stated under property, annually to determine whether the indefinite life
plant and equipment up to the date of change. continues to be supportable. If not, the change
in useful life from indefinite to finite is made on a
2.4.11 Intangible assets prospective basis. Gains or losses arising from
derecognition of an intangible asset are measured
Intangible assets acquired separately are
as the difference between the net disposal
measured on initial recognition at cost. The
proceeds and the carrying amount of the asset
cost of intangible assets acquired in a business
and are recognised in the income statement when
combination is their fair value as at the date of
the asset is derecognised.
acquisition. Following initial recognition, intangible
assets are carried at cost less accumulated
amortisation and accumulated impairment losses,
if any. Internally generated intangible assets,
excluding capitalised development costs, are
not capitalised and expenditure is reflected in
the income statement in the year in which the
expenditure is incurred.
70 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

2.4.12 Financial instruments initial recognition and Derivatives, including separated embedded
subsequent measurement derivatives are also classified as held for trading
unless they are designated as effective hedging
i) Financial assets instruments.
Initial recognition and measurement
Financial assets at fair value through profit and loss
Financial assets within the scope of LKAS 39 are are carried in the statement of financial position
classified as financial assets at fair value through at fair value with changes in fair value recognised
profit or loss, loans and receivables, held-to- in finance income or finance costs in the income
maturity investments, available-for-sale financial statement.
assets, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. The Group evaluates its financial assets held
The Group determines the classification of its for trading, other than derivatives, to determine
financial assets at initial recognition. whether the intention to sell them in the near term
is still appropriate. When the Group is unable to
All financial assets are recognised initially at fair trade these financial assets due to inactive markets
value plus transaction cost, except in the case of and managements intention to sell them in the
assets recorded at fair value through profit or loss, foreseeable future significantly changes, the Group
directly attributable transaction costs. may elect to reclassify these financial assets in rare
circumstances. The reclassification to loans and
Purchases or sales of financial assets that require
receivables, available-for-sale or held to maturity
delivery of assets within a time frame established
depends on the nature of the asset. This evaluation
by regulation or convention in the marketplace
does not affect any financial assets designated at
(regular way trades) are recognised on the trade
fair value through profit or loss using the fair value
date, i.e., the date that the Group commits to
option at designation.
purchase or sell the asset.
Loans and receivables
The Groups financial assets include cash and
short-term deposits, trade and other receivables, Loans and receivables are non-derivative financial
quoted and unquoted financial instruments. assets with fixed or determinable payments
that are not quoted in an active market. After
Subsequent measurement initial measurement, such financial assets are
subsequently measured at amortised cost using the
The subsequent measurement of financial assets
effective interest rate method (EIR), less impairment.
depends on their classification as follows:
Amortised cost is calculated by taking into account
Financial assets at fair value through profit or any discount or premium on acquisition and fees
loss or costs that are an integral part of the IR. The
EIR amortisation is included in finance income
Financial assets at fair value through profit or in the income statement. The losses arising from
loss includes financial assets held for trading and impairment are recognised in the income statement
financial assets designated upon initial recognition in finance costs.
at fair value through profit or loss. Financial
assets are classified as held for trading if they are Derecognition
acquired for the purpose of selling or repurchasing
A financial asset (or, where applicable a part
in the near term. This category includes derivative
of a financial asset or part of a group of similar
financial instruments entered into by the Group
financial assets) is derecognised when:
that are not designated as hedging instruments
in hedge relationships as defined by LKAS 39.
The rights to receive cash flows from the asset have
expired
71
 transferred transferred recogniti
nor retained asset is on of the
substantially measured asset
all of the at the lower (an
risks and Of the incurred
rewards of original loss
the asset carrying event)
nor amount of and that
transferred the asset loss
The Group control of it, and the event
has the asset is maximum has an
transferred its recognised impact
amount of
rights to to the extent on the
consideratio
receive cash of the estimate
n that the
flows from the Groups d future
Group could
asset or has continuing cash
be required
assumed an involvement flows of
to repay.
obligation to in it. the
pay the ii) Impairme financial
received cash In that nt of asset or
flows in full case, financial the
without the assets group of
material delay Group The Group financial
to a third also assesses at assets
party under a recognis each that can
pass-through es an reporting be
arrangement; associat date reliably
and either (a) ed whether estimate
the Group has liability. there is any d.
transferred The objective Evidenc
substantially transferr evidence e of
all the risks ed asset that a impairm
and rewards and the financial ent may
of the asset, associat asset or a include
or (b) the ed group of indicatio
Group has liability ns that
financial
neither are the
assets is
transferred measure debtors
impaired. A
nor retained d on a or a
financial
substantially basis group
asset or a
all the risks that
group of
and rewards reflects of
financial
of the asset, the de
assets is
but has rights
deemed to bto
transferred and
be impaired rs
control of the obligatio
if, and only is
asset. ns that
if, there is
the exp
When the objective
Group eri
Group has evidence of
has enc
transferred its impairment
retained.
rights to receive as a result ing
cash flows from Continuing of one or sig
an asset or has involvement more events
nifi
entered into a that takes that has
can
pass-through the form of a occurred
after the t
arrangement, guarantee
initial fina
and has neither over the
ncial collectively accrued on the
difficulty, assesses them for reduced carrying
impairment. Assets amount and is
default or
that are individually accrued using
delinquenc
assessed for the rate of
y in interest impairment and for interest used to
or which an discount the
impairment loss is, future cash flows
or continues to be, for the purpose
principal payments, recognised are not of measuring the
included in a impairment loss.
the probability that
collective The interest
they will enter
assessment of income is
bankruptcy or other
impairment. recorded as part
financial
of finance
reorganisation and
income in the
where observable If there is objective income
data indicate that evidence that an statement.
there is a impairment loss has Loans together
measurable been incurred, the with the
decrease in the amount of the loss is associated
estimated future cash measured as the allowance
flows, such as difference between are written off
changes in arrears or the assets carrying when there is
economic conditions amount and the no realistic
that correlate with present value of prospect
defaults. estimated future
cash flows
Financial assets (excluding future
carried at expected
amortised cost credit losses that

For financial assets have not yet been

carried at amortised incurred). The
cost, the Group first present value of the
assesses whether estimated future
objective evidence of cash flows is
impairment exists discounted at the
individually for financial assets
financial assets that original effective
are individually interest rate. If a loan
significant, or has a variable
collectively for interest rate, the
financial assets that discount rate for
are not individually measuring any
significant. If the impairment loss is
Group determines the current effective
that no objective interest rate.
evidence of
impairment exists for The carrying
an individually amount of the asset
assessed financial is reduced through
asset, whether the use of an
significant or not, it allowance account
includes the asset in and the amount of
a group of financial the loss is
assets with similar recognised in the
credit risk income statement.
characteristics and Interest income
continues to be
72 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016
 The Group as at fair value
determines the through profit or
classification of its loss. Financial
financial liabilities liabilities are
at initial classified as
of future recovery recognition. held for trading if LKAS 39.
and all collateral they are Separated
has been All financial acquired for the embedded
realised or has liabilities are purpose of derivatives are
been transferred recognised selling in the also classified as
to the Group. If, initially at fair near term. This held for trading
in a subsequent value and, in the category unless they are
year, the amount case of loans includes designated as
of the estimated and borrowings, derivative
impairment loss effective hedging
carried at financial
increases or instruments.
amortised cost. instruments
decreases This includes entered into by Gains or losses
because of an directly the Group that on liabilities
event occurring attributable are not held for trading
after the transaction designated as are recognised
impairment was costs. hedging in the income
recognised, the
instruments in statement. The
previously The Groups
hedge Group has not
recognised financial
relationships as designated any
impairment loss liabilities
defined by financial
is increased or include trade
liabilities upon
reduced by and other
initial
adjusting the payables,
recognition as
allowance bank
at fair value
account. If a overdrafts,
through profit
future write-off is loans and or loss.
later recovered, borrowings.
the recovery is Loans and
credited to Subsequent borrowings
finance costs in measurement
the income After initial
The recognition,
statement
measurement of interest
iii) Financial financial bearing loans
liabilities liabilities and

Initial recognition depends on their borrowings

and classification as are
measurement follows: subsequently
measured at
Financial liabilities Financial amortised cost
within the scope liabilities at fair using the
of LKAS 39 are effective
value through
classified as interest rate
profit or loss
financial liabilities method. Gains
at fair value Financial and losses are
through profit or liabilities at fair recognised in
loss, loans and value through the income
borrowings, or as profit or loss statement
derivatives include financial when the
designated as liabilities held for liabilities are
hedging trading and derecognised
instruments in an financial as well as
effective hedge, liabilities through the
as appropriate. designated upon effective
initial recognition interest rate
 method (EIR) Financial assets
amortisation and financial
process. liabilities are offset
Amortised cost is and the net
calculated by amount reported in
taking into the consolidated
account any statement of
discount or financial position
premium on if, and only if,
acquisition and there is a currently
fees or costs that enforceable legal
are an integral right to offset the
part of the EIR. recognised
The EIR amounts and there
amortisation is is an intention to
included in settle on a net
finance costs in basis, or to realise
the income the assets and
statement. settle the liabilities
simultaneously.
Derecognition

A financial liability
is derecognised
when the
obligation under
the liability is
discharged or
cancelled or
expires. When an
existing financial
liability is replaced
by another from
the same lender
on substantially
different terms, or
the terms of an
existing liability
are substantially
modified, such an
exchange or
modification is
treated as
a derecognition
of the original
liability and the
recognition of a
new liability, and
the difference in
the respective
carrying
amounts is
recognised in
the income
statement.

iv) Offsetting of
financial
instruments
73
 fair indication down to
valu that an its
asset may recover
e of
be impaired. able
anot
If any amount.
her indication In
instr exists, or assessi
ume when annual ng value
impairment in use,
nt
testing for the
v) Fair value of that
financial an asset is estimate
instruments is required, the d future
subs Group cash
The fair value estimates flows
tanti
of financial the assets are
instruments ally
recoverable discount
that are traded the amount. An ed to
in active sam assets their
markets at recoverable present
e;
each reporting amount is value
date is a the higher of using a
determined by discounte an assets pre-tax
reference to d cash or cash- discount
quoted market flow generating rate that
prices or analysis unit (CGU) reflects
dealer price fair value current
or other
quotations (bid less costs market
valuation
price for long to sell and assess
models.
positions and its value in ments of
ask price for An use and is the
short analysis determined time
positions), of fair for an value
without any values individual of
deduction for asset,
of money
transaction unless the
financial and
costs. asset does
instrum the
not
For financial ents risks
generate
instruments and specifi
cash inflows
not traded in further that are c to
an active details largely the
market, the as to independen asset.
fair value is how t of those In
determined they are from other determ
using measur assets or
ining
appropriate ed are groups of
fair
valuation provide assets.
d in value
techniques. Where the
Note 24. carrying less
Such
techniques amount of costs
may include; 2.4.13 Impairment an asset or to sell,
of non- CGU recent
Using recent financial
exceeds its market
arms length assets
recoverable transa
market The Group amount, the
transactions; ctions
assesses at asset is
are
each considered
reference
reporting impaired
to the and is
date whether
current there is an written
taken into consistent with would have been
account, the function of the determined, net
impaired asset, of depreciation,
except for a had no
property impairment loss
previously been recognised
revalued where for the asset
the revaluation
was taken to in prior years.
if available. If no such other Such reversal
transactions can be comprehensive is recognised in
identified, an income. In this the income
appropriate valuation case, the statement
model is used. These impairment is unless the
also recognised asset is carried
calculations are
in other at a revalued
corroborated by
comprehensive amount, in
valuation multiples,
income up to the which case the
quoted share prices
amount of any reversal is
for publicly traded
previous treated as a
subsidiaries or other
evaluation. revaluation
available fair value
increase. The
indicators. For assets following
excluding goodwill, criteria are also
The Group bases
an assessment is applied in
its impairment
made at each assessing
calculation on
reporting date as impairment of
detailed budgets
to whether there is specific assets:
and forecast
any indication that
calculations which
previously
are prepared recognised
separately for each impairment losses
of the Groups may no longer
cash-generating exist or may have
units to which the decreased. If such
individual assets indication exists,
are allocated. the Group
These budgets and estimates the
forecast assets or cash-
calculations are generating
generally covering units recoverable
a period of five amount. A previously
years. For longer recognised
periods, a long impairment loss is
term growth rate is reversed only if there
calculated and has been a change
applied to project in the assumptions
future cash flows
used to determine
after the fifth year.
the assets
Impairment losses recoverable amount
of continuing since the last
operations, impairment loss was
including recognised. The
impairment on reversal is limited so
inventories, are that the carrying
recognised in the amount of the asset
income statement does not exceed its
in those expense recoverable amount,
categories nor exceed the
carrying amount that
74 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016
2.4.14 Inventories Where the Group expects some or all of a
provision to be reimbursed, the reimbursement is
Inventories are stated at the lower of cost and net
recognised as a separate asset but only when
realizable value. The management primarily
the reimbursement is virtually certain. The
determines cost of inventories using the weighted
expense relating to any provision is presented in
average method. The management estimates the
the income statement net of any reimbursement.
net realizable value of inventories based on
assessment of receipt of committed sales prices If the effect of the time value of money is material,
and provide for excess and obsolete inventories provisions are discounted using a current pre-tax rate
based on historical usage, estimated future that reflects, where appropriate, the risks specific to
demand and related pricing. In determining excess
the liability. Where discounting is used, the increase in
quantities, the management considers recent sales
the provision due to the passage of time is recognised
activities, related margin and market positioning of its
as a finance cost.
products. However, factors beyond its contract, such
as demand levels, technological advances and pricing 2.4.17 Post-employment benefits Defined
competition, could change from period to period. Such
Benefit Plan - Gratuity:
factors may require the Group to reduce the value of
its inventories. Gratuity is a post-employment benefit plan. Provisions
have been made for retirement gratuities from the first
Costs incurred in bringing each product to its year of service for all employees
present location and condition is accounted in conformity with LKAS 19. However under the
for as follows: Gratuity Act No. 12 of 1983, the liability to an
employee arises only on completion of five years of
Purchase cost on an actual basis continued service, The Company is liable to pay
gratuity in terms of relevant statute. In order to meet
Closing balance of the inventory on
this liability the Group uses an actuarial valuation
weighted average cost
method in accordance with LKAS 19.
2.4.15 Cash and obligation
The cost of providing
short-term and a
deposits benefits under
reliable
gratuity is
estimate
Cash and determined using the
can be
short-term projected unit credit
made of
deposits in method. Actuarial
the
the statement gains and losses are
amount of
of financial recognised in full in
the
position the period in which
obligation.
comprise they occur in the
cash at statement of
banks and on comprehensive
hand and income. The defined
benefit liability
short-term
comprises the
deposits with
present value of the
a maturity of
defined benefit
three months
obligation using a
or less.
discount rate based
For the on market yields
purpose of the at the end of
consolidated reporting period
statement on government
cash flows, bonds of a
cash and similar tenure as
cash the estimated
equivalents term of the
consist of
gratuity
cash and
obligation.
short-term
deposits as The gratuity
defined benefit of the
above, net of Group in
outstanding unfunded.
bank
overdrafts. Defined
Contribution
2.4.16 Provisions Plans
Employees are
Provisions are eligible for
recognised Employees
when the Provident Fund
Group has a
Contributions and
present
Employees Trust
obligation
Fund
(legal or
Contributions in
constructive)
line with the
as a result of
respective
a past event,
it is probable statutes and

that an regulations. The

outflow of Company
resources contributes 12%
embodying and 3% of gross
economic emoluments of
benefits will employees to
be required to
settle the
75
 guidance Deferral period
on the Accounts s
classificatio beginn
n and SLFRS
ing on
measureme 14 is an
or after
nt of interim
1
financial standard
which
Januar
instruments
provides y
, a new
relief for 2016.
Employees expected
credit loss first time
Provident
model for
-adopters
Fund and
calculating
of SLFRS
Employees in relation
Trust Fund impairment
to the
on financial
respectively accountin
assets, and
. g for
new
certain
2.5 Sri Lanka general
balances
Accounting hedge
Standards not that arise
accounting
yet Effective from rate-
requiremen
regulated
Certain new ts. It also
activities
accounting carries
(regulator
standards and forward the
y deferral
amendments / guidance
accounts)
improvements to on
. The
existing recognition
standard
standards have and
permits
been published, derecogniti these
that are not on of entities to
mandatory for 31 financial continue
March 2016 instruments to apply
reporting from LKAS their
periods. None of 39. previous
those have been GAAP
early adopted by accountin
SLFRS 9
the g policies
is
group/Company. for the
effective recognitio
SLFRS 9 for n,
Financial annual measure
Instruments reporting ment,
periods impairme
SLFRS 9 beginning nt and
replaces the on or derecogni
existing after 1 tion of
guidance in January regulatory
LKAS 39 2018, deferral
Financial with early accounts.
Instruments: adoption
Recognition permitted SLFRS
and . 14 is
Measurement. effective
SLFRS 9 SLFRS 14 for annual
includes revised Regulatory
SLFRS 15
Revenue
from
Contracts
with
Customers
SLFRS 15 establishes a
comprehensive framework
for determining whether,
how much and when
revenue is recognised. It
replaces existing revenue
recognition guidance,
including LKAS 18
Revenue, LKAS 11
Construction Contracts
and IFRIC 13 Customer
Loyalty Programmes.

SLFRS 15 is
effective for annual
reporting periods
beginning on or after
1 January 2018, with
early adoption
permitted.
76 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

3. REVENUE
Sale of goods
Sales - local 5,017,458,252 4,777,181,573 6,248,360,475 4,777,272,859
Sales - exports - 271,429 - 318,157
5,017,458,252 4,777,453,002 6,248,360,475 4,777,591,016
Less: Sales tax (47,527,961) (45,174,512) (64,385,812) (45,174,512)
Sales of goods total 4,969,930,291 4,732,278,490 6,183,974,663 4,732,416,504

Rental income 252,538,005 116,012,957 257,299,100 116,012,957

Advertising income 6,266,075 7,120,765 6,266,075 7,120,765
Commission income 3,498 1,189 5,175,718 1,189
Service income 1,927,468 8,642,561 1,927,468 8,642,561
5,230,665,337 4,864,055,962 6,454,643,024 4,864,193,976

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

4. OTHER OPERATING INCOME

Fair value gain/(loss) on investment
property - - 24,980,000 -
Profit on disposal of property, plant &
equipment (947,585) 2,878,550 (913,955) 2,628,077
Sundry income 1,163,218 2,592,097 1,926,561 2,036,242
Unclaimed creditors written back (142,951) 4,058,540 (142,951) 4,058,540
Income on investment in unit trust 15,999 98,919,103 15,999 98,919,103
Dividend income 1,845,000 4,050,000 - -
1,933,681 112,498,290 25,865,654 107,641,962

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

5. FINANCE COSTS
Interest expense on overdrafts 5,406,141 5,075,090 5,406,141 5,075,090
Interest expense on loans & Borrowings 129,239,942 94,505,666 128,278,003 94,505,666
Lease interest - 57,477 - 57,477
134,646,083 99,638,233 133,684,144 99,638,233
 77

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

6. FINANCE INCOME
Interest income 33,804,329 5,256,834 7,352,478 5,256,834
33,804,329 5,256,834 7,352,478 5,256,834

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

7. PROFIT BEFORE TAX

Administration expenses
Directors emoluments 3,675,000 4,725,000 3,675,000 4,725,000
Depreciation 109,705,127 123,042,990 211,777,244 148,243,941
Amortisation of intangible assets - - 48,283,407 17,088,813
Personnel costs includes -
- Gratuity 11,799,226 11,895,869 15,338,600 13,966,197
- EPF & ETF 49,966,962 55,009,801 64,122,777 59,278,038
- Other staff costs 475,221,121 492,812,275 594,679,587 528,752,310
Donations 2,131,341 1,795,900 2,131,341 1,795,900
Audit fees 1,457,856 1,040,000 2,548,290 1,700,000
Selling and distribution expenses
Marketing & promotions 176,113,650 144,149,888 229,921,578 144,149,888

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

8. INCOME TAX EXPENSE

Current income tax
Current tax expense 100,850,763 18,474,419 127,689,923 25,923,703
Under/(over) provision 890,053 707,887 890,053 390,771
Dividend tax - - 205,000 450,000
Deferred income tax
Deferred taxation charge /(reversal) 4,734,917 120,495 15,675,605 1,358,224
Income tax expense/(income) reported 106,475,733 19,302,801 144,460,581 28,122,698
78 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

8. INCOME TAX EXPENSE (CONTD..)

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

Statement of other Comprehensive Income

Deferred income tax related to items
charged or credited directly to equity
during the year
Net gain on revaluation of building 1,820,347 5,274,387 19,205,095 22,050,809
Actuarial losses on defined benefit plans 5,505,827 (1,336,967) 7,233,956 (1,988,414)
Income tax charged/(reversed) directly to
OCI 7,326,174 3,937,420 26,439,051 20,062,395

8.1 Reconciliation between tax expenses and the product of accounting profit multiplied by the statutory tax
rate is as follows;
COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

Accounting profit before tax 331,857,443 147,737,135 400,289,039 188,984,932

331,857,443 147,737,135 400,289,039 188,984,932

Income tax rate of 28% (2015 : 28%) 92,920,084 41,365,348 112,080,931 28,324,246
Income tax rate of 15% (2015 : 15%) - - - 1,510,062
Under/(over) provision for previous year 890,053 707,887 2,502,163 390,771
Tax on export sales @ 12% (2015 : 12%) - 450 - 450
Allowable expenses (27,327,762) (40,000,630) (74,038,216) (47,151,788)
Income exempt from tax (521,080) (28,831,349) (6,998,880) (28,883,269)
Non deductible expenses 42,434,513 57,063,391 104,293,530 83,246,793
Tax loss claimed (6,654,992) (11,122,791) (9,259,552) (11,122,791)
Dividend tax - - 205,000 450,000
Effect on deferred tax 4,734,917 120,495 15,675,605 1,358,224
106,475,733 19,302,801 144,460,581 28,122,698

The effective income tax rate 32.08% 13.07% 36.09% 14.88%

Income tax expense reported 106,475,733 19,302,801 144,460,581 28,122,698
 79

9. DEFERRED TAX ASSETS ,LIABILITIES AND INCOME TAX RELATES TO THE FOLLOWING;
Company COMPANY GROUP
Balance Sheet Balance Sheet
2016 2015 2016 2015
LKR LKR LKR LKR

Deferred Tax Liability

Capital allowances for tax purposes 52,571,401 53,052,798 95,753,138 86,411,005
Revaluation of property, plant and
equipment 15,974,203 14,153,856 50,135,373 30,930,278
68,545,604 67,206,654 145,888,510 117,341,283
Deferred Tax Assets
Defined benefit plans (9,266,968) (13,322,204) (11,176,187) (15,837,737)
Deferred revenue (2,121,397) (1,649,696) (2,121,397) (1,649,695)
Tax losses - (6,654,992) (133,659,199) (144,738,263)
Operating lease (Straight line) (11,159,428) (11,643,044) (13,344,527) (11,643,044)
(22,547,793) (33,269,936) (160,301,310) (173,868,739)
Net deferred tax liability/ (assets) 45,997,810 33,936,718 (14,412,800) (56,527,456)

COMPANY GROUP
Income Statement Income Statement
2016 2015 2016 2015
LKR LKR LKR LKR

Deferred Tax Liability

Capital allowances for tax purposes (481,397) 1,272,325 9,432,133 236,862
Revaluation of property, plant and
equipment 1,820,347 7,957,739 19,205,095 25,066,815
1,338,950 9,230,064 28,547,227 25,303,677
Deferred tax assets
Defined benefit plans 4,055,236 367,629 4,661,550 (313,059)
Lease rent - 263,306 - 263,306
Deferred revenue (471,701) (233,386) (471,702) (233,386)
Tax losses 6,654,992 (6,654,992) 110,791,064 (4,685,213)
Operating lease (Straight line) 483,616 1,085,294 (1,701,483) 1,085,294
10,722,143 (5,172,149) 13,567,429 (3,883,058)

Deferred income tax charge / (reverse) 12,061,093 4,057,915 42,114,656 21,420,619

Reported in the statement of income 4,734,917 120,495 15,675,605 1,358,224
Reported in the statement of
comprehensive income 7,326,176 3,937,420 26,439,051 20,062,395
80 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

10. PROPERTY, PLANT & EQUIPMENT

10.1 Company
10.1.1 Gross carrying amounts

Balance as at Acquisitions/ Reclassified/ Disposals/ Write-offs/ Balance as at

1-Apr-15 Transfers Revaluation Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

At cost
Landscaping 884,560 - - - - 884,560
Building - leasehold 86,858,730 - - - - 86,858,730
Office equipment 190,271,444 19,800,669 - - - 210,072,113
Fixtures - other 38,078,784 - - - - 38,078,784
Fixtures - air conditions 12,558,168 - - - - 12,558,168
Furniture 66,515,505 237,736 - (3,417,790) - 63,335,451
Office equipment- other 5,518,879 - - - - 5,518,879
Shop fittings - fixtures 319,544,731 44,404,325 - (273,750) - 363,675,306
Shop fittings - mobiles 21,271,738 - - - - 21,271,738
Motor vehicles 14,517,123 4,528,400 - (197,490) - 18,848,033
Motor vehicles -lease 4,718,750 - - - - 4,718,750
760,738,412 68,971,130 - (3,889,030) - 825,820,512

At valuation
Land 2,403,800,000 565,999,000 913,851,000 - - 3,883,650,000
Building 157,400,000 13,504,719 1,056,031 - - 171,960,750
2,561,200,000 579,503,719 914,907,031 - - 4,055,610,750

10.1.2 In the Course of Constructions

Balance as at Incurred during Reclassified/ Disposals/ Write-offs/ Balance as at

1-Apr-15 the year Revaluation Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

Capital work in progress 2,528,965 724,779,807 (648,474,848) (5,162,320) 73,671,604

Total gross carrying amount 2,528,965 724,779,807 - (648,474,848) (5,162,320) 73,671,604

Total 3,324,467,377 1,373,254,656 914,907,031 (652,363,878) (5,162,320) 4,955,102,866

 81

10.1.3 Depreciation

Balance as at Acquisitions/ Charge for Disposals/ Write-offs/ Balance as at

1-Apr-15 Transfers the year Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

At cost
Landscaping 884,560 - - - - 884,560
Building - leasehold 62,956,398 - 10,584,736 - - 73,541,134
Office equipment 100,591,434 - 18,491,111 - - 119,082,545
Fixtures - other 35,411,152 - 1,167,726 - - 36,578,878
Fixtures - air conditions 12,466,689 - 91,479 - - 12,558,168
Furniture 32,036,149 - 5,941,250 (1,962,951) - 36,014,448
Office equipment- other 2,299,964 - 338,183 - - 2,638,147
Shop fittings - fixtures 166,032,710 - 63,974,532 (189,533) - 229,817,709
Shop fittings - mobiles 15,341,151 - 1,122,206 - - 16,463,357
Motor vehicles 10,172,694 - 1,696,958 (62,538) - 11,807,114
Motor vehicles -lease 4,718,750 - - - - 4,718,750
442,911,651 - 103,408,181 (2,215,022) - 544,104,810

At valuation
Building - - 6,295,452 (5,445,207) - 850,245
- - 6,295,452 (5,445,207) - 850,245

Total 442,911,651 - 109,703,633 (7,660,229) - 544,955,055

82 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

10. PROPERTY, PLANT & EQUIPMENT (CONTD..)

Company

2016 2015
LKR LKR

10.1.4 Net Book Value

At Cost
Building - lease hold 13,317,596 23,902,332
Office equipment 90,989,568 89,680,010
Fixtures - other 1,499,906 2,667,632
Fixtures - air conditions - 91,479
Furniture 27,321,003 34,479,356
Office equipment- other 2,880,732 3,218,915
Shop fittings - fixtures 133,857,597 153,512,021
Shop fittings - mobiles 4,808,381 5,930,587
Motor vehicles 7,040,919 4,344,429
281,715,702 317,826,761
At valuation
Land 3,883,650,000 2,403,800,000
Building 171,110,505 157,400,000
4,054,760,505 2,561,200,000

10.1.5 In the course of constructions

Capital work in progress 73,671,604 2,528,965
Total gross carrying amount 73,671,604 2,528,965
Total 4,410,147,811 2,881,555,726

10.1.6 The company uses the revaluation model of measurement of land and buildings. The company engaged
chartered valuer M/S P.B Kalugalagedara & Associates an accredited independent valuer, to determine the fair
value of its land and buildings. Fair value is determined by reference to market-based evidence. Valuations are
based on active market prices, adjusted for any difference in the nature, location or condition of the specific
property. Details of the property revaluation are given in the note 10.1.9 to the financial statements.
 83

Cumulative
depreciation Net carrying Net carrying
If assets were amount amount
Class of asset Cost carried at cost 2016 2015
LKR LKR LKR LKR

Building 151,516,248 30,053,942 121,462,306 111,442,637

Land 2,130,423,636 - 2,130,423,636 1,564,424,636

10.1.7 Land and buildings with a carrying value of LKR 4,020,358,692/- (2015 - 2,561,200,000/- ) have
been pledged as security for term loans obtained, details of which are disclosed in Note 26.

10.1.8 The extent and the location of the entitys land and buildings (Company) are shown below.

Address Land/ Building Valuation Extent

No. 10, Ward Place, Colombo 07.

No. 15, C.W.W. Kannangara Mawatha,
Colombo 07.
No. 21/5, C.W.W.Kannangara Mawatha,
Colombo 07.
Land & Building Revalued A 1,R 3, P 28.58
No.25/2 ,3,5,6 & 6B,C.W.W. Kannangara Mawatha,
Colombo 07.
No.17,17/1,17/1A,19 & 19A, C.W.W. Kannangara
Mawatha, Colombo 07.
No. 25, C.W.W. Kannangara Mawatha,
Colombo 07.
No 18 & 20, Sama Mawatha, Borelesgamuwa Land & Building Revalued P 20.00
No 29A, Jayathilaka Mawatha, Panadura Land & Building Revalued R 1, P 2.16
84 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

10. PROPERTY, PLANT & EQUIPMENT (CONTD..)

10.1.9 Company

Sensitivity of
Significant fair value to
Method of Effective date of unobservable unobservable
Property Extent valuation valuation Property valuer inputs inputs

Land and Buildings

No.10, Ward Place,
Colombo 07.
No.15, C.W.W.
Kannangara Mawatha,
Colombo 07.
No.21/5, A 1, R 3, Open market 1st March 2016 P.B. Kalugalagedara, Estimated price Positively
C.W.W.Kannangara P 28.58 value method Chartered Valuation per perch LKR 12 correlated
Mawatha, Colombo 07. Surveyor to 12.5 Mn &
estimated price
per Square foot-
LKR 2,000 to LKR
3,750
No.25/2 ,3,5,6 &
6B,C.W.W. Kannangara
Mawatha, Colombo 07.
No.17,17/1,17/1A,19 &
19A, C.W.W. Kannangara
Mawatha, Colombo 07.
No.25, C.W.W.
Kannangara Mawatha,
Colombo 07.
No.29A, Jayathilaka R.1 -P 2.16 Open market 31st March 2016 P.B. Kalugalagedara, Estimated price Positively
Mawatha, Panadura value method Chartered Valuation per perch LKR 1.1 correlated
Surveyor Mn & estimated
price per Square
foot- LKR 500 to
LKR 4,000
No.18 & 20, Sama P 20 Open market 1st March 2016 P.B. Kalugalagedara, Estimated price Positively
Mawatha, Boralesgamuwa value method Chartered Valuation per perch LKR 1 correlated
Surveyor Mn & estimated
price per Square
foot- LKR 2500
to LKR 2,750
 85

10.2 Group
10.2.1 Gross carrying amounts

Balance as at Acquisitions/ Reclassified/ Disposals/ Write-offs/ Balance as at

1-Apr-15 Transfers Revaluation Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

At cost
Landscaping 884,560 - - - - 884,560
Building - leasehold 268,879,383 48,374,996 - - - 317,254,379
Office equipment 191,817,898 28,221,071 - - - 220,038,969
Fixtures - other 40,052,952 854,701 - - - 40,907,653
Fixtures - air conditions 12,558,168 6,237,013 - - - 18,795,181
Furniture 251,657,631 59,387,024 - (3,417,790) - 307,626,865
Computer equipments 95,672,338 5,213,938 - - - 100,886,276
Office equipment- other 63,972,675 9,660,669 - - - 73,633,344
Shop fittings - fixtures 382,384,482 66,892,808 - (273,750) - 449,003,540
Shop fittings - mobiles 21,271,738 - - - - 21,271,738
Motor vehicles 16,269,331 4,528,399 - (197,490) - 20,600,240
Motor vehicles -lease 4,718,750 - - - - 4,718,750
1,350,139,906 229,370,619 - (3,889,030) - 1,575,621,495

At valuation
Land 3,079,800,000 565,999,000 1,020,428,343 (604,577,343) - 4,061,650,000
Building 300,200,000 13,504,719 (2,743,969) - - 310,960,750
3,380,000,000 579,503,719 1,017,684,374 (604,577,343) - 4,372,610,750

10.2.2 In the Course of Constructions

Balance as at Incurred during Reclassified/ Disposals/ Write-offs/ Balance as at

1-Apr-15 the year Revaluation Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

Building work in
progress 45,507,494 - (45,507,494) - - -
Capital work in
progress 96,491,277 786,699,659 - (728,683,274) (18,916,206) 135,591,456
Total gross carrying
amount 141,998,771 786,699,659 (45,507,494) (728,683,274) (18,916,206) 135,591,456

Total 4,872,138,677 1,595,573,997 972,176,880 (1,337,149,647) (18,916,206) 6,083,823,701

86 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

10. PROPERTY, PLANT & EQUIPMENT (CONTD..)

10.2.3 Depreciation

Balance as at Acquisitions/ Charge for Disposals/ Write-offs/ Balance as at

1-Apr-15 Transfers the year Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

At cost
Landscaping 884,560 - - - - 884,560
Building - leasehold 93,833,184 - 43,997,030 - - 137,830,214
Office equipment 100,824,419 - 18,854,585 - - 119,679,004
Fixtures - other 37,043,501 - 1,373,022 - - 38,416,523
Fixtures - air conditions 12,466,689 - 400,343 - - 12,867,032
Furniture 86,455,600 - 31,711,323 (1,962,951) - 116,203,972
Computer equipments 43,082,808 - 15,567,280 - - 58,650,088
Office equipment- other 13,274,771 - 7,135,520 - - 20,410,291
Shop fittings - fixtures 179,503,978 - 78,742,406 (189,533) - 258,056,851
Shop fittings - mobiles 15,341,154 - 1,122,203 - - 16,463,357
Motor vehicles 11,924,902 - 1,696,957 (62,538) - 13,559,321
Motor vehicles -lease 4,718,750 - - - - 4,718,750
599,354,316 - 200,600,669 (2,215,022) - 797,739,963

At valuation
Building - - 11,395,452 (10,545,207) - 850,245
- - 11,395,452 (10,545,207) 850,245

Total 599,354,316 - 211,996,121 (12,760,229) - 798,590,208

 87

10.2.4 Net book value at cost

Group 2016 2015

LKR LKR

10.2.4 Net Book Value

At cost
Building - leasehold 179,424,165 175,046,199
Office equipment 100,359,965 90,993,479
Fixtures - other 2,491,130 3,009,451
Fixtures - air conditions 5,928,149 91,479
Furniture 191,422,893 165,202,031
Computer equipments 42,236,188 52,589,530
Office equipment- other 53,223,053 50,697,904
Shop fittings - fixtures 190,946,689 202,880,504
Shop fittings - mobiles 4,808,381 5,930,584
Motor vehicles 7,040,919 4,344,429
777,881,532 750,785,590

At valuation
Land 4,061,650,000 3,079,800,000
Building 310,110,505 300,200,000
4,371,760,505 3,380,000,000

10.2.5 In the course of constructions

Building work in progress - 45,507,494
Capital work in progress 135,591,456 96,491,277
Total gross carrying amount 135,591,456 141,998,771
Total 5,285,233,493 4,272,784,361
88 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

10. PROPERTY, PLANT & EQUIPMENT (CONTD..)

10.2.6 The company uses the revaluation model of measurement of land and buildings. The company engaged
chartered valuer M/S P.B Kalugalagedara & Associates an accredited independent valuer, to determine the fair
value of its land and buildings. Fair value is determined by reference to market-based evidence. Valuations are
based on active market prices, adjusted for any difference in the nature, location or condition of the specific
property. Details of the property revaluation are given in the note 10.2.9 to the financial statements.

Cumulative
depreciation Net carrying Net carrying
If assets were amount amount
Class of asset Cost carried at cost 2016 2015
LKR LKR LKR LKR

Building 215,941,682 51,126,428 164,815,254 156,406,221

Land 1,938,425,223 - 1,938,425,223 1,918,268,618

10.2.7 Land and buildings with a carrying value of LKR 4,936,358,692 (2015 - LKR 3,380,000,000/= ) have
been pledged as security for term loans obtained, details of which are disclosed in Note 26.

10.2.8 The extent and the location of the entitys land and buildings (Group)

Address Land/ Building Valuation Extent

No. 10, Ward Place, Colombo 07.

No. 15, C.W.W. Kannangara Mawatha,
Colombo 07.
No. 21/5, C.W.W.Kannangara Mawatha,
Colombo 07.
Land & Building Revalued A 1, R 3, P 28.58
No.25/2 ,3,5,6 & 6B,C.W.W. Kannangara Mawatha,
Colombo 07.
No.17,17/1,17/1A,19 & 19A, C.W.W. Kannangara
Mawatha, Colombo 07.
No. 25, C.W.W. Kannangara Mawatha,
Colombo 07.
No 18 & 20, Sama Mawatha, Borelesgamuwa Land & Building Revalued P 20.00
No 29A, Jayathilaka Mawatha, Panadura Land & Building Revalued R 1, P 2.16
No. 475/32, Kotte Road, Rajagiriya Land & Building Revalued P 29.54
 89

10.2.9 Group

Property Extent Method of Effective Property Valuer Significant Sensitivity of

valuation date of unobservable fair value to
valuation inputs unobservable
inputs

Land and Buildings

No.10, Ward Place,
Colombo 07.
No. 15, C.W.W.
Kannangara Mawatha,
Colombo 07.
No. 21/5, A 1, R 3, Open market 1st P.B. Estimated price per perch Positively
C.W.W.Kannangara P 28.58 value method March Kalugalagedara, LKR 12 to 12.5 Mn & correlated
Mawatha, Colombo 07. 2016 Chartered Valuation estimated price per
Surveyor Square foot- LKR 2,000
to LKR 3,750
No.25/2 ,3,5,6 &
6B,C.W.W. Kannangara
Mawatha, Colombo 07.
No.17,17/1,17/1A,19
& 19A, C.W.W.
Kannangara Mawatha,
Colombo 07.

No. 25, C.W.W.

Kannangara Mawatha,
Colombo 07.
No 29A, Jayathilaka R.1 Open market 31st P.B. Estimated price per perch Positively
Mawatha, Panadura P 2.16 value method March Kalugalagedara, LKR 1.1 Mn & estimated correlated
2016 Chartered Valuation price per Square foot-
Surveyor LKR 500 to LKR 4,000
No 18 & 20, P 20 Open market 1st P.B. Estimated price per perch Positively
Sama Mawatha, value method March Kalugalagedara, LKR 1 Mn & estimated correlated
Boralesgamuwa 2016 Chartered Valuation price per Square foot-
Surveyor LKR 2500 to LKR 2,750
No. 475/32, Kotte P.47.52 Open market 31st P.B. Estimated price per perch Positively
Road, Rajagiriya value method March Kalugalagedara, LKR 3.75 Mn & estmated correlated
2015 Chartered Valuation price per Square foot-
Surveyor LKR 500 to LKR 4,500
90 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

11. INVESTMENT PROPERTY (Group)

Gross carrying amounts

Balance Balance
As at Acquisitions/ Adjustment for Disposals/ Write-offs/ As at
1-Apr-15 Transfers fair value Transfers Impairment 31-Mar-16
LKR LKR LKR LKR LKR LKR

Land - 574,500,000 24,980,000 - - 599,480,000

Total cost of investment
property - 574,500,000 24,980,000 - - 599,480,000

Net book value 2016 2015

At revaluation LKR LKR

Land 599,480,000 -
Total carrying amount of investment property 599,480,000 -

11.1 The extent and the location of the entitys land and buildings (Group)

Property Extent Method of Effective Property valuer Significant Sensitivity of

valuation date of unobservable fair value to
valuation inputs unobservable
inputs
No. 271A A 1, R 2, Open market 31st March P.B. Estimated price Positively
- 271F, P 9.74 value method 2016 Kalugalagedara, per perch LKR 2 correlated
Kaduwela Chartered Mn to 3 Mn
Road, Valuation Surveyor
Battaramulla
 91

12. INTANGIBLE ASSETS

12.1 Group
Balance Balance
As at Acquisitions/ Reclassified / Disposals / Write-offs / As at
1-Apr-15 Transfers Revaluation Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR

12.1.1 Gross carrying

amounts At cost
Computer software 137,327,068 524,412 - - (4,557,673) 133,293,807
Brands 672,974,584 - - - - 672,974,584
810,301,652 524,412 - - (4,557,673) 806,268,391

Balance Balance
As at Acquisitions/ Charge for Disposals / Write-offs / As at
1-Apr-15 Transfers the year Transfers Discarded 31-Mar-16
LKR LKR LKR LKR LKR LKR
12.1.2 Amortization
At cost
Computer software 65,518,207 - 18,066,831 - (987,493) 82,597,545
Brand names - - 30,216,574 - - 30,216,574
65,518,207 - 48,283,405 - (987,493) 82,597,545

2016 2015

12.1.3 Net book value

Computer software 50,696,262 71,808,861
Brand names 642,758,010 672,974,584
Total 693,454,272 744,783,445
92 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

13. INVESTMENT IN SUBSIDIARIES

COMPANY GROUP
% 2016 2015 2016 2015
Holding LKR LKR LKR LKR

Odel Properties (Pvt) Ltd. 100% 108,100,000 108,100,000 - -

Odel Information Technology 100% 10 10 - -
Services (Pvt) Ltd
Odel Lanka (Pvt) Ltd 100% 270,000,020 270,000,020 - -
Odel Apparels (Pvt) Ltd 100% 1,000 1,000 - -
BSL International (Pvt) Ltd 100% 1,000,000 1,000,000 - -
Greenfield Trading (Pvt) Ltd 100% 10 10 - -
Softlogic Brands (Pvt) Ltd 100% 1,719,288,000 600,000,000 - -
2,098,389,040 979,101,040 - -
Impairment of investment (1,000,000) (1,000,000) - -
2,097,389,040 978,101,040 - -

14. INVENTORIES

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

Finished goods 1,435,211,271 1,421,696,593 1,954,970,532 1,969,002,679

Goods in transit 28,492,697 11,468,318 42,604,743 5,665,840
Provision for obsolete and slow (57,233,823) (72,138,852) (61,527,896) (76,800,959)
moving items
Total inventories at the lower of 1,406,470,145 1,361,026,059 1,936,047,379 1,897,867,560
cost and NRV

15. TRADE AND OTHER RECEIVABLES

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

Financial Assets - Loans & Receivables

Trade Debtors (15.1) 35,872,528 14,656,060 35,225,100 49,651,084
Other debtors 54,176,447 26,532,953 61,547,222 28,906,318
90,048,975 41,189,013 96,772,322 78,557,402

Non Financial Assets

Deposits & prepayments 434,616,050 163,115,298 506,930,715 220,409,156
524,665,025 204,304,311 603,703,037 298,966,558
 93

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

15.1 Trade debtors aging analysis

Aging brackets (Days)
0-30 27,469,926 13,455,821 26,662,524 48,404,300
31-60 4,391,203 - 4,391,203 -
61-90 1,088,237 634,883 1,088,237 634,883
91-120 1,060,757 565,356 1,174,286 611,901
Over 120 1,862,406 - 1,908,851 -
Total 35,872,528 14,656,060 35,225,100 49,651,084

16. DEFERRED LIABILITY

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

16.1 Deferred revenue

Loyalty programe
At 1 April 5,891,768 5,058,249 5,891,768 5,058,249
Deferred during the period 14,360,727 10,543,330 14,360,727 10,543,330
Released to the income statement (12,676,077) (9,709,811) (12,676,077) (9,709,811)
At 31 March 7,576,418 5,891,768 7,576,418 5,891,768

16.2 Deferred expenditure

Operating lease
At 1 April 41,582,300 45,458,351 41,582,300 45,458,351
Charged to the income statement (1,727,201) (3,876,051) 6,076,724 (3,876,051)
Balance acquired - restatement - - - 11,523,858
At 31 March 39,855,099 41,582,300 47,659,024 53,106,158

Total deferred liability 47,431,517 47,474,068 55,235,442 58,997,926

94 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

17. AMOUNTS DUE FROM RELATED PARTIES

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

Amount due from subsidiary companies

Odel Apparels (Pvt) Ltd 16,979,921 10,061,114 - -
Odel Lanka (Pvt) Ltd 121,354,388 132,521,701 - -
Greenfield Trading (Pvt) Ltd 442,716 287,233 - -
BSL International (Pvt) Ltd 6,337,657 4,912,954 - -
Softlogic Brands (Pvt) Ltd 198,346,433 1,119,538,831 - -
343,461,115 1,267,321,833 - -
Less: Provision for doubtful debt - Odel (65,532,013) (65,532,013) - -
Lanka
Less: Provision for doubtful debt - BSL (4,209,748) (4,209,748) - -
273,719,354 1,197,580,072 - -

Amount due from Other companies - - -

Softlogic Communications (Pvt) Ltd 350,480 - 350,480 (19,600)
Softlogic Retail (Pvt) Ltd 3,969,482 - 46,288,142 -
Softlogic Mobile Distribution (Pvt) Ltd - - 1,418,191 389,862
Softlogic BPO Services (Pvt) Ltd 39,000,000 - 39,000,000 -
43,319,962 - 87,056,813 370,262
317,039,316 1,197,580,072 87,056,813 370,262
 95

18. INTEREST BEARING LOANS AND BORROWINGS

18.1 Company
2016 2016 2015 2015
Repayable Repayable 2016 Repayable Repayable 2015
within 1 year after 1 year Total within 1 year after 1 year Total
LKR LKR LKR LKR LKR LKR
Bank loan 18.1.1 1,089,522,296 395,950,210 1,485,472,506 1,193,434,501 165,633,625 1,359,068,126
Bank overdraft 22.2 250,693,156 - 250,693,156 8,363,362 - 8,363,362
1,340,215,452 395,950,210 1,736,165,662 1,201,797,863 165,633,625 1,367,431,488

18.1.1 Bank Loans

1-Apr-15 Obtained Repayment 31-Mar-16

LKR LKR LKR LKR
Short term working capital loans 1,084,520,205 3,977,668,230 (4,167,188,435) 895,000,000
Medium term project loans 274,547,921 500,000,000 (184,075,415) 590,472,506
1,359,068,126 4,477,668,230 (4,351,263,850) 1,485,472,506

18.2 Group
2016 2016 2015 2015
Repayable Repayable 2016 Repayable Repayable 2015
within 1 year after 1 year Total within 1 year after 1 year Total
LKR LKR LKR LKR LKR LKR
Bank loan (18.2.1) 1,089,522,296 395,950,210 1,485,472,506 1,230,349,821 165,633,625 1,395,983,446
Bank overdraft 22.1 262,724,223 - 262,724,223 39,688,674 - 39,688,674
1,352,246,519 395,950,210 1,748,196,729 1,270,038,495 165,633,625 1,435,672,120

18.2.1 Bank Loans

1-Apr-15 Obtained Repayment 31-Mar-16

LKR LKR LKR LKR
Short term working capital loans 1,121,435,525 4,124,233,460 (4,350,668,985) 895,000,000
Medium term project loans 274,547,921 500,000,000 (184,075,415) 590,472,506
1,395,983,446 4,624,233,460 (4,534,744,400) 1,485,472,506
96 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

18. INTEREST BEARING LOANS AND BORROWINGS

18.3 Terms of the loan

Lending institution Year Loan Nature of Security Repayment term Loan Balance Loan Balance as
amount facility as at 31st at 31st March
March 2016 2015
BOC 2012/2013 275Mn Medium term Property at 475/32, Kotte 6 Years 96,249,974 151,405,093
loan Road, Rajagiriya
HNB 2011/2012 200Mn Medium term Property at Over a period of 25,800,000 66,000,000
loan 271-271F,Kaduwala 06 years in 59
Road, Thalangama, equal monthly
Battaramulla owned by instalments
Odel Lanka (Pvt) Ltd
DFCC Bank 2012/2013 96Mn Medium term Property at 15, C.W.W 84 equal monthly 43,428,532 57,142,828
loan Kannangara Mw. instalments
Colombo 07 and 29 (capital) after a
A,Jayathilaka Mawatha grace period of
Panadura 12 months
Commercial Bank 2015 / 2016 500Mn Medium term Credit card & debit card 5 Years 424,994,000 -
loan sales except for BIA
HNB 2014 / 2015 450Mn Short term Stock in trade Maximum of 90 450,000,000 395,000,000
Loan days subject to
roll over
Seylan Bank 2015 / 2016 500Mn Short term None Maximum of 90 445,000,000 -
Loan days subject to
roll over
Union Bank 2014/2015 450Mn Short term Property at No 10, Ward Monthly - 450,000,000
Loan Place, Colombo 7.
DFCC Bank 2014/2015 239Mn Short term Stock in trade Monthly - 239,520,205
Loan
 97

19. RETIREMENT BENEFIT LIABILITY

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

Defined benefit plan costs - gratuity

As at the beginning of the year 47,579,299 48,892,259 59,510,336 55,131,740
Balance transferred from new subsidiaries - - 1,326,299
Charge for the year 19.1 11,799,226 11,895,869 15,338,600 13,966,197
Payment made during the year (6,618,537) (17,983,710) (7,354,643) (18,015,377)
Actuarial loss/ (gain) on obligation (19,663,669) 4,774,881 (25,835,558) 7,101,478
Defined benefit obligation as at the end of 33,096,316 47,579,299 41,658,733 59,510,336
the year

19.1 Charge for the year

Current service cost 7,707,407 7,006,644 10,215,409 8,353,052
Interest cost 4,091,819 4,889,225 5,123,191 5,613,145
11,799,226 11,895,869 15,338,600 13,966,197

19.2 The Retirement benefit liability of Odel PLC is valued by Mr. Piyal Goonatilleke, who is a fellow member of
the society of actuaries (USA) and a member of the American Academy of Actuaries. Defined liability is
valued as at 31st March 2016 and the principal actuarial assumptions used are as follows.

Principal actuarial assumptions

COMPANY GROUP
2016 2015 2016 2015
Discount rate 11.0% 8.6% 11.0% 8.6%
Salary increases 7.5% 10.0% 7.5% 10.0%
Staff turnover
Age Turnover Turnover Turnover Turnover
20 30% 30% 30% 30%
25 30% 30% 30% 30%
30 20% 20% 20% 20%
35 10% 10% 10% 10%
40 5% 5% 5% 5%
45 2% 2% 2% 2%
Retirement age 55 Years 55 Years 55 Years 55 Years
98 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

19.3 Sensitivity of assumptions employed in actuarial valuation

The following table demonstrates the sensitivity to a reasonably possible change in the key assumptions
employed with all other variables held constant in the employment benefit liability measurement.

The sensitivity of the Comprehensive Income Statement and the Statement of Financial Position is the
effect of the assumed changes in discount rate and salary increment rate on the profit & loss and
employment benefit obligation for the year.

Assumptions Discount rate Salary increment rate

1% Increase 1% Decrease 1% Increase 1% Decrease
Impact on defined benefit obligation - Company (2,857,414) 3,271,653 3,565,041 (3,149,198)
Impact on defined benefit obligation - Group (3,787,906) 4,351,412 4,722,803 (4,157,164)

19.4 Maturity Analysis

Year Retirement Term Death Disability Total

2016/2017 3,079,280 4,079,059 75,977 134,852 7,369,168

2017/2018 1,729,067 4,558,773 87,130 147,582 6,522,552
2018/2019 40,361 5,018,118 105,571 180,186 5,344,236
2019/2020 2,677,883 5,304,131 135,349 235,269 8,352,632
2020/2021 2,448,805 5,434,087 172,543 293,472 8,348,907
2021/2022 5,462,930 4,874,760 206,864 345,164 10,889,718
2022/2023 6,567,817 4,396,661 231,541 382,496 11,578,515
2023/2024 8,434,994 3,949,414 252,400 419,119 13,055,927
2024/2025 6,830,629 3,532,564 262,373 448,791 11,074,357
2025/2026 8,563,652 3,082,327 441,368 786,163 12,873,510
2015/2016 Actual Benefit Payout 6,618,537

The expected benefits are estimated based on the same assumptions used to measure the companys benefit
obligation at the end of the year and include benefits attributable to estimated future employee service.
 99

20. TRADE AND OTHER PAYABLES

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR
Financial liabilities
Trade payables
345,258,042 315,706,002 367,264,279 307,315,017
Sundry creditors 249,251,521 77,260,831 302,877,867 110,767,891
Deposits & advances 1,867,051 2,513,020 1,867,051 2,513,020
596,376,614 395,479,853 672,009,197 420,595,928

Non financial liabilities

Tax & accrued expenses 128,700,624 119,525,288 127,486,755 89,036,306
725,077,238 515,005,141 799,495,952 509,632,234

21. AMOUNTS DUE TO RELATED PARTIES

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR
Amount due to subsidiary companies
Odel Properties (Pvt) Ltd 3,119,545 80,256,508 - -
Odel Information Technology Services 106,867,991 36,143,460 - -
(Pvt) Ltd
Softlogic Brands (Pvt) Ltd 350,556,144 - - -
460,543,680 116,399,968 - -
Amount due to other companies
Softlogic Retail (Pvt) Ltd - - 308,734,798 220,804,538
Softlogic BPO Service (Pvt) Ltd - - - 1,013,004
Softlogic Corporate Service (Pvt) Ltd 333,000 - 440,691 19,425
Softlogic Destination Management Ltd - - - 37,900
Softlogic Holdings PLC 7,128,915 - 16,399,919 29,324,669
Softlogic Information Technologies Ltd - - 1,181,097 274,286
Softlogic Restaurants (Pvt) Ltd - - 26,791 34,195
Uni Walker Ltd - - - (19,080)
Softlogic Communications (Pvt) Ltd 627,010 - 645,914 -
Softlogic International (Pvt) Ltd 80,000 - 80,000 -
Softlogic Retail One (Pvt) Ltd - - 52,494 -
8,168,925 - 327,561,704 251,488,937

468,712,605 116,399,968 327,561,704 251,488,937

100 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

22. CASH AND CASH EQUIVALENTS

Components of cash and cash equivalents

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR

22.1 Favorable cash & cash equivalents balance

Cash & bank balances 61,972,516 99,952,941 83,208,435 110,614,424

22.2 Unfavorable cash & cash equivalents balance

Bank overdraft (250,693,156) (8,363,362) (262,724,223) (39,688,674)
(188,720,640) 91,589,579 (179,515,788) 70,925,750

23. STATED CAPITAL

2016 2015
Number LKR Number LKR

Fully paid ordinary shares 272,129,431 2,795,513,620 272,129,431 2,795,513,620

272,129,431 2,795,513,620 272,129,431 2,795,513,620

24. FINANCIAL ASSETS & LIABILITIES - FAIR VALUES

24.1 The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Investment in unit trust, cash and short-term deposits, staff loans, refundable deposits, trade receivables, trade
payables, amount due to/from related party and other current liabilities approximate their carrying amounts.

The fair value of, obligations under finance leases, is estimated by discounting future cash flows using
rates currently available for debt on similar terms, credit risk and remaining maturities

The fair value of loans from bank approximate the carrying value as loans have been obtained on floating rates.

Set out below is a comparison by class of the carrying amounts and fair value of the Groups financial
instruments that are carried in the financial statements.
 101

COMPANY Carrying Amount Fair value

2016 2015 2016 2015
LKR LKR LKR LKR
Interest bearing loans and borrowings
Floating rate borrowings 1,485,472,506 1,359,068,126 1,485,472,506 1,359,068,126
1,485,472,506 1,359,068,126 1,485,472,506 1,359,068,126

GROUP Carrying Amount Fair value

2016 2015 2016 2015
LKR LKR LKR LKR
Interest bearing loans and borrowings
Floating rate borrowings 1,485,472,506 1,395,983,446 1,485,472,506 1,395,983,446
1,485,472,506 1,395,983,446 1,485,472,506 1,395,983,446

COMPANY Carrying Amount Fair value

2016 2015 2016 2015
LKR LKR LKR LKR
Loans and receivables
Staff loan 2,779,318 4,376,506 2,779,318 4,381,449
Refundable deposit 57,121,823 55,431,094 57,121,823 55,431,094
59,901,141 59,807,600 59,901,141 59,812,543

GROUP Carrying Amount Fair value

2016 2015 2016 2015
LKR LKR LKR LKR
Loans and receivables
Staff loan 2,779,318 4,376,507 2,779,318 4,381,449
Refundable deposit 72,351,943 83,914,494 72,351,943 80,090,317
75,131,261 88,291,001 75,131,261 84,471,766

24.2 Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:

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

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair
value are observable, either directly or indirectly

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not
based on observable market data
102 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

24. FINANCIAL ASSETS & LIABILITIES - FAIR VALUES (CONTD..)

As at 31 March 2016, the Group held the following financial instruments carried at fair value in the
statement of financial position:

Assets measured at fair value Level 1 Level 2 Level 3

LKR LKR LKR LKR
Financial assets at fair value
through profit and loss
Investment in unit trust 2016 224,298 224,298 - -
Investment in unit trust 2015 208,300 208,300 - -

25. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to equity holders of parent
by the weighted average number of ordinary shares outstanding during the year. The weighted average number of ordinary
shares outstanding during the year and the previous year are adjusted for events, that
have changed the number of ordinary shares outstanding, without a corresponding change in the resources.

The following reflects the income and share data used in the basic earning per share computations

2016 2015
LKR LKR

Amounts used as the numerators:

Net profit 255,828,458 160,862,234
Net profit attributable to ordinary shareholders for basic earnings per share 255,828,458 160,862,234

Number of ordinary shares used as denominators:

Weighted average number of ordinary shares in issue applicable to
basic earnings per share 272,129,431 272,129,431
Adjusted weighted average number of ordinary shares applicable to
basic earnings per share 272,129,431 272,129,431
 103

26. ASSETS PLEDGED - ( Company/Group)

The following assets have been pledged as security for liabilities.

Nature of asset Mortgage type Bank 2016 2015 Address

Land & building Primary Union 460Mn 460Mn No. 10, Ward Place, Colombo 7
Land & building Primary DFCC 81Mn 281Mn No. 15, C.W.W. Kannangara
Mawatha, Colombo 7
Land & building Primary DFCC 55Mn 55Mn No 29A, Jayathilaka Mawatha,
Panadura
Land & building Primary BOC 275Mn 275Mn No. 475/32, Kotte Road, Rajagiriya.
Owned by Odel Properties (Pvt) Ltd
Land & building Primary HNB 200Mn 200Mn No 271-271F, Kaduwala Road,
Thalangama, Battaramulla. owned by
Odel Lanka (Pvt) Ltd

Stock & debts Primary Concurrent Sampath 150Mn 150Mn

Stock & debts Primary Concurrent HNB 400Mn 400Mn
Stock & debts Primary Concurrent DFCC 210Mn 210Mn
Stock & debts Primary Concurrent NTB 100Mn 100Mn
Credit card sales Primary Concurrent Commercial 500Mn - Credit/ Debit card sales from all
location except for BIA

27. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

There were no significant capital commitments and contingent liabilities as of the Balance sheet date except for
the operating lease commitments stated in the note 16.2 to this financial statements and the letter of credits
executed for LKR 76,923,178/= (USD 526,315) for foreign purchases and LKR 31,808,716/= for local purchases.

Contingent Liabilities
i Odel Properties (Pvt) Ltd, a fully owned subsidiary of Odel PLC received an income tax assessment from the department of
Inland Revenue for an additional income tax liability of Rs 10.5mn (including penalty) for the years of assessments 2011/12
and 2012/13. Company has lodged an appeal against the said assessments and the outcome of the appeal is pending.

ii Odel PLC received an income tax assessment from the department of Inland Revenue for an additional income tax liability of Rs
16.02mn (including penalty) for the years of assessment 2009/10. Company has lodged an appeal against the said assessment
and the Department of Inland Revenue has issued their determination on 14 January 2015, confirming the
assessment. The Company has lodged an appeal with Tax Appeal Commission and the determination of the same is pending.

iii An appeal was filed in the Civil Appellate High Court of Western Province in September 2015 under the case number
HCA/LT /99/2014 against the Order delivered by the Labour Tribunal of Colombo in favor of the Applicant- Respondent who
was an ex-employee of the company allowing him a compensation in the application filed by the applicant - Respondent at
the Labour Tribunal of Colombo alleging the unlawful termination of his employment by the Respondent - Appellant claiming
reinstatement in employment with back wages or in the alternative pay compensation for unlawful termination.
104 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

28. OTHER FINANCIAL ASSETS

Financial assets at fair value through profit and loss

COMPANY GROUP
2016 2015 2016 2015
LKR LKR LKR LKR
Investment in unit trust 224,298 208,300 224,298 208,300

Loans and receivables

Staff loan 2,779,318 4,376,506 2,779,318 4,376,506
Refundable deposit 57,121,823 55,431,094 72,351,943 83,914,494
60,125,439 60,015,900 75,355,559 88,499,300

Total current 17,655,709 7,515,463 23,793,709 7,515,463

Total Non current 42,469,730 52,500,437 51,561,850 80,983,837

29. RELATED PARTY DISCLOSURES

The financial statements include the financial statements of the Group and the Subsidiaries listed in
the following table:

% of equity interest
2016 2015
LKR LKR
Name
Odel Apparels (Pvt) Ltd 100% 100%
Odel Information Technology Services ( Pvt) Ltd 100% 100%
Odel Properties ( Pvt) Ltd 100% 100%
Odel Lanka ( Pvt) Ltd 100% 100%
BSL International (Pvt) Ltd 100% 100%
Softlogic Brands (Pvt) Ltd 100% 100%
Greenfield trading (Pvt) Ltd 100% 100%

The following table provides the total amount of transactions that have been entered into with the above
related parties for the relevant financial year and the information regarding outstanding balances as at
31 March 2016 and 2015.
 105

29.1 Transaction with the parent and related entities

Fellow Subsidiaries
2016 2015
LKR LKR

Nature of Transaction
Balance as at 1 April ( Before Provision) 1,150,921,860 72,404,819
Loan Granted 288,034,275 1,119,228,433
Purchase of Goods/Services (651,425,073) (171,035,090)
Investment in equity shares (1,119,288,000) -
Settlement of Liabilities on behalf of the Company 214,674,373 130,323,698
Balance as at 31 March ( Before Provision) (117,082,565) 1,150,921,860

Other Related Party

2016 2015
LKR LKR

Nature of Transaction
Balance as at 1 April (Before Provision) - -
Loan Granted/Advance Paid 42,326,689 -
Purchase of Goods/Services (89,390,180) -
Settlements 82,214,528 -
Balance as at 31 March (Before Provision) 35,151,037 -

Transactions with ultimate holding company- Softlogic Holdings PLC

Rs.34,207,032/= worth of service obtained and settlement of Rs27,078,117/= has been included in
the above transactions.

Above balances are included in the amount due to / due from related parties. Balance outstanding at the
year end is disclosed in the Note 17 and 21 to the financial statements

All trading transactions are at the arms length and interest has been charged on the outstanding
balance at the beginning at the rate of AWPLR +1%. All other amounts are due to/from on demand

29.2 Transactions with Key Management Personnel of the Company or its parent
The key management personnel of the Company/Group are the members of its Board of Directors and
that of its parent.
106 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

a) Key Management Personnel Compensation

2016 2015
LKR LKR

Short-term employee benefits 3,675,000 4,725,000

Post-employment benefits - -
Other long term benefits - -
Termination benefit - -
Share based payments - -
3,675,000 4,725,000

30. OPERATING LEASE COMMITMENTS - GROUP AS LESSEE

The Group has entered into commercial leases for properties to operate its outlet network. These leases have an
average life of 7 years. There are no restrictions placed upon the Group by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases are as follows:

2016 2015
LKR LKR
Within one year 177,208,804 156,543,056
After one year but not more than five years 460,001,833 367,969,439
More than five years 247,340,130 244,535,929
884,550,767 769,048,424

31. DIVIDENDS PAID AND PROPOSED

2016 2015
LKR LKR
Declared and paid during the year:
Dividends on ordinary shares:
Final dividend for 2016: 0 cents per share (2015: 12 cents per share) - 32,655,532
Interim dividend for 2016: 30 cents per share (2015: 12 cents per share) 81,638,829 32,655,532
81,638,829 65,311,063

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Groups principal financial liabilities comprise loans and borrowings and trade and other payables.
The main purpose of these financial liabilities is to finance the Groups operations.

The Group has loan and receivables, trade and other receivables, and cash and short-term
deposits that are derived directly from its operations.

The Groups senior management oversees the management of the financial risks. The Board of Directors
reviews and agrees policies for managing each of these risks which are summarized below.
 107

32.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Groups exposure to the risk of changes in market
interestrates arise due to the borrowings with floating interest rates. The movement of rates are closely
monitored and refinancing options are available to manage this risk.

32.1.1 Interest Rate Sensivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on
that portion of loans and borrowings. With all other variables held constant, the Groups profit before tax
is affected through the impact on floating rate borrowings, as follows:

Increase/decrease Effect on profit

in basis points before tax
2016
Loan interest +100 (15,919,344)
Loan interest -100 15,919,344

2015
Loan interest +100 (11,882,822)
Loan interest -100 11,882,822

The assumed movement in basis points for interest rate sensitivity analysis is based on the currently
observable market environment, showing a significantly higher volatility than in prior years.

32.2 Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group has minimal exposure to credit risk from
operating activities due to nature of business. The risk from its financing activities, including deposits
with banks and financial institutions is managed by dealing with institutions carrying high credit rating.
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD..)

108 ODEL |PLC Annual

31endedYear March

NOTE T TH FINANCIA
32..2.1Credit exposure
The Companys maximum exposure to credit risk for the components of the Statement of Financial Position as at 31 March

S O 2016
2016 and 2015 is the carrying amounts of respective financial instruments.

32.2.1.1 Company

As at 31 March 2016 Neither past-due nor impaired Past-due but Total

E
Risk free AAA to AA- A+ to A- BBB+ to BB- Non-rated not impaired
Rs. Rs. Rs. Rs. Rs. Rs.

2015/16Report
Loans and receivables
Trade debtors - - - - 27,469,926 8,402,602 35,872,528

L STATEMENTS
Other debtors - - - - 54,176,447 - 54,176,447
Deposits & prepayments 434,616,050 434,616,050
Staff loan 2,779,318 2,779,318
Refundable deposit 57,121,823 57,121,823
Investment in unit trust 224,298 224,298
Amounts due from related parties 317,039,316 317,039,316
Total - - - - 893,427,178 - 901,829,780

As at 31 March 2015 Neither past-due nor impaired Past-due but Total

Risk free AAA to AA- A+ to A- BBB+ to BB- Non-rated not impaired
Rs. Rs. Rs. Rs. Rs. Rs.

Loans and receivables

Trade debtors - - - - 13,455,821 1,200,239 14,656,060
Other debtors - - - - 26,532,953 - 26,532,953
Deposits & prepayments 163,115,298 163,115,298
Staff loan 4,376,506 4,376,506
Refundable deposit 55,431,094 55,431,094
Investment in unit trust 208,300 208,300
Amounts due from related parties 1,197,580,072 1,197,580,072
Total - - - - 1,460,700,044 1,200,239 1,461,900,283
32.2.1.2 Group
As at 31 March 2016 Neither past-due nor impaired Past-due but Total
Risk free AAA to AA- A+ to A- BBB+ to BB- Non-rated not impaired
Rs. Rs. Rs. Rs. Rs. Rs.

Loans and receivables

Trade debtors - - - - 26,662,524 8,562,576 35,225,100
Other debtors - - - - 61,547,222 - 61,547,222
Deposits & prepayments 506,930,715 506,930,715
Staff loan 2,779,318 2,779,318
Refundable deposit 72,351,943 72,351,943
Investment in unit trust 224,298 224,298
Amounts due from related parties 87,056,813 87,056,813
Total - - - - 757,552,833 - 766,115,409

As at 31 March 2015 Neither past-due nor impaired Past-due but Total

Risk free AAA to AA- A+ to A- BBB+ to BB- Non-rated not impaired
Rs. Rs. Rs. Rs. Rs. Rs.

Loans and receivables

Trade debtors - - - - 48,404,300 1,246,784 49,651,084
Other debtors - - - - 28,906,318 - 28,906,318
Deposits & prepayments 220,409,156 220,409,156
Staff loan 4,376,507 4,376,507
Refundable deposit 83,914,494 83,914,494
Investment in unit trust 208,300 208,300
Amounts due from related parties 370,262 370,262
Total - - - - 386,589,336 - 387,836,121
109
110 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD..)

32.3 Liquidity Risk
The Groups objective is to maintain a balance between continuity of funding and flexibility through the
use of bank overdrafts, bank loans and finance leases. Access to sources of funding is sufficiently
available and debt maturing within 12 months can be rolled with existing lenders.

The table below summarises the maturity profile of the Groups financial liabilities based on contractual
undiscounted gross payments.

32.3.1 Company

Year ended 31 March Less than 3

2016 On demand months 3 to 12 months 1 to 5 years > 5 years Total
Interest-bearing loans
and borrowings - 968,961,024 182,762,803 463,756,733 - 1,615,480,560
Bank Overdrafts 250,693,156 - - - - 250,693,156
Trade and other
payables - 725,077,238 - - - 725,077,238
250,693,156 1,694,038,262 182,762,803 463,756,733 - 2,591,250,954

Year ended 31 March Less than 3

2015 On demand months 3 to 12 months 1 to 5 years > 5 years Total
Interest-bearing loans
and borrowings - 1,137,995,558 92,275,025 177,012,854 - 1,407,283,438
Bank Overdrafts 8,363,362 - - - - 8,363,362
Trade and other
payables - 395,479,853 - - - 395,479,853
8,363,362 1,533,475,411 92,275,025 177,012,854 - 1,811,126,653
 111

32.3.2 Group

Year ended 31 March Less than 3

2016 On demand onths 3 to 12 months 1 to 5 years > 5 years Total
Interest-bearing loans
and borrowings - 990,691,572 182,762,803 463,756,733 - 1,637,211,108
Bank Overdrafts 262,724,223 - - - - 262,724,223
Trade and other
payables - 799,495,952 - - - 799,495,952
262,724,223 1,790,187,524 182,762,803 463,756,733 - 2,699,431,283

Year ended 31 March Less than 3

2015 On demand onths 3 to 12 months 1 to 5 years > 5 years Total
Interest-bearing loans
and borrowings - 1,175,649,185 92,275,025 177,012,854 - 1,444,937,064
Bank Overdrafts 39,688,674 - - - - 39,688,674
Trade and other
payables - 420,595,928 - - - 420,595,928
39,688,674 1,596,245,113 92,275,025 177,012,854 - 1,905,221,666

33. COMPARATIVE INFORMATION

As reported previously

COMPANY GROUP
2015 2015
Note LKR LKR
Balance sheet
Goodwill 33.1 - 78,516,196
Deferred tax asset 33.1 - 71,167,811
Deferred liability 33.1 47,474,068 47,474,068

Current presentation

COMPANY GROUP
2015 2015
Note LKR LKR
Balance sheet
Goodwill 33.1 - 104,680,409
Deferred tax asset 33.1 - 56,527,456
Deferred liability 33.1 47,474,068 58,997,926
112 ODEL PLC | Annual Report 2015/16

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 March 2016

33. COMPARATIVE INFORMATION (CONTD..)

33.1 Reasons for change in the presentation
Over statement of 14,640,355/= on deferred tax asset and an understatement of Rs.11,523,858/- on deferred
liability as at 31st March 2105 due to the straight-line adjustment on operating lease have been rectified in
Softlogic Brands (Pvt) Ltd, which resulted in the increase in goodwill by the respective amounts.

The date of acquisition of Softlogic Brands (Pvt) Ltd was 31st March 2015.

34. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

There have been no material events occurring after the balance sheet date that require adjustments to or disclosure
in the financial statements.
 113

INVESTOR INFORMATION

The percentage of shares held by the public as at 31st March 2016 was 5.86% (2015 - 6.60%). The number of
public shareholders as at 31st March 2016 was 5,855

Distribution of Shareholding as at 31st March 2016

There were 5,858 Registered shareholders as at 31st March 2015.

No. of Shares held No. of % of Total % of Total

Shareholders Shareholders Holding Holding

1 1,000 5,102 87.09 1,355,986 0.50

1,001 10,000 643 10.98 2,102,699 0.77
10,001 100,000 97 1.66 3,151,136 1.16
100,001 1,000,000 12 0.20 3,253,244 1.20
Over 1,000,000 4 0.07 262,266,366 96.38
Total 5,858 100.00 272,129,431 100.00

Analysis report of Shareholders as at 31st March 2016

Category No. of % of Total % of Total
Shareholders Shareholders Holding Holding

Individual 5,719 97.63 6,785,754 2.49

Institutional 139 2.37 265,343,677 97.51
Total 5,858 100.00 272,129,431 100.00

Resident 5,827 99.47 271,772,855 99.87

Non-resident 31 0.53 356,576 0.13
Total 5,858 100.00 272,129,431 100.00

Share Trading Information

2015/2016 2014/2015
Highest (Rs.) 23.80 28.00
Lowest (Rs.) 16.10 20.00
Closing (Rs.) 21.70 22.00

Dividend Information
2015/2016 2014/2015
Dividend per share (cents) 30 12
Dividend pay out (%) 32 20
114 ODEL PLC | Annual Report 2015/16

INVESTOR INFORMATION

Twenty largest shareholders of the company as at 31st March 2016 are as follows.

No Name No of Shares Percentage %

1 Softlogic Retail (Pvt) Limited 169,956,278 62.45

2 Softlogic Holdings PLC 61,231,769 22.50

3 Commercial bank of Ceylon PLC/ Softlogic Retail (Pvt) Ltd 25,000,000 9.19

4 Sampath bank PLC/ Dr. T. Senthilverl 6,078,319 2.23

5 Mr. M. Mohamed Fuad 722,806 0.27

6 Mrs. E.B Helga Anil Perera 527,000 0.19

7 First Capital Markets Limited / Mr. I.P. Galhenage 308,350 0.11

8 Mercantile Investments and Finance PLC 300,000 0.11

9 Tangerine Tours (Pvt) Limited 225,600 0.08

10 Bank of Ceylon No.1 Account 222,295 0.08

11 Dee Investments (Pvt) Limited 190,400 0.07

12 Bansei Securities Capital (Pvt) Ltd/S.M.T.B Samarakoon 187,002 0.07

13 Askold (Pvt) Ltd 186,349 0.07

14 Asha Financial Services Limited/ Mr. C.N Pakianathan 142,241 0.05

15 Pan Asia Banking Corporation PLC/ Mr. R. Erle Rambukwelle 135,000 0.05

16 Mr. W.V Jagath Pushpa Kumara 106,201 0.04

17 Mr. N. Arjuna Samarakoon 100,000 0.04

18 First Capital Markets Limited / Mr. S.W.U Arunashantha 100,000 0.04

19 DFCC Bank PLC/ Mr S.V.A. Perera 100,000 0.04

20 Miss. P.G Nirosha Dilrukshi 99,999 0.04

 115

NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the Annual General Note:
Meeting of Odel PLC will be held at the Committee A member entitled to attend and vote at the Meeting is entitled to appoint
Room C of Bandaranaike Memorial International a Proxy who need not be a member, to attend on behalf of him/her.
Conference Hall (BMICH), Bauddhaolka Mawatha,
Colombo 07 on Thurday the 25th day of August 2016 The Form of Proxy is enclosed in this Report.
at 10.30 a.m. for the following purposes:
The completed Form of Proxy should be deposited at the Registered
1) To receive and consider the Annual Report of theOffice of the Company, No. 475/32, Kotte Road, Rajagiriya not later
Board of Directors and Financial Statements of the than forty eight (48) hours before the time appointed for the holding of
Company and of the Group for the year ended the meeting.
31st March 2016 together with the Report of the
Auditors thereon.

2) To ratify the Interim Dividend of Rs. 0.11 per

share paid on 5th July 2016 as the Final
Dividend for the year ended 31st March 2016.

3) To re-appoint the retiring Auditors, Messrs

Ernst & Young as Auditors of the Company for
the ensuing year and to authorize the
Directors to determine their remuneration.

4) To authorize the Directors to determine and

make donations for the year ending 31st
March 2017 and up to the date of the next
Annual General Meeting.

By Order of the Board

SOFTLOGIC CORPORATE SERVICES (PVT) LTD

Sgd.
Secretaries

20th July 2016

Colombo
116 ODEL PLC | Annual Report 2015/16

NOTES
117
118 ODEL PLC | Annual Report 2015/16

NOTES
FORM OF PROXY

*I/We.........of
being *a member/ members of
ODEL PLC, do hereby appoint .....
......................................................................................(holder of N.I.C. No. )
of or (whom failing)

Mr A K Pathirage of Colombo (whom failing)

Dr S Selliah of Colombo (whom failing)
Mr H K Kaimal of Colombo (whom failing)
Mr R P Pathirana of Colombo (whom failing)
Dr I C R De Silv of Colombo

as *my/our Proxy to represent *me/us and to speak and vote for *me/us on *my/our behalf at the ANNUAL GENERAL MEETING OF
THE COMPANY to be held at the Committee Room C of Bandaranaike Memorial International Conference Hall (BMICH),
Bauddhaolka Mawatha, Colombo 07 at 10.30 a.m. on the 25th day of August 2016 and at any adjournment thereof, and at any
adjournment thereof, and at every poll which may be taken in consequence thereof.

FOR AGAINST

1) To receive and consider the Annual Report of the Board of Directors and the
Financial Statements of the Company and of the Group for the year ended
31st March 2016 together with the Report of the Auditors thereon.

2) To ratify the Interim Dividend of Rs. 0.11 per share paid on 5th July 2016 as
the Final Dividend for the year ended 31st March 2016.

3) To re-appoint Messrs Ernst & Young, as Auditors and to authorize the

Directors to determine their remuneration.

4) To authorize the Directors to determine and make Donations

.............. ......
*Signature/s Date

Note:
1) *Please delete the inappropriate words.
2) Instructions as to completion are noted on the reverse hereof.
 INSTRUCTIONS AS TO COMPLETION

1. Kindly perfect the Form of Proxy after filling in legibly your full name, address and the National
Identity Card number and signing in the space provided and filling in the date of signature.

2. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy who need not
be a member, to attend and vote on behalf of him. Please indicate with an X in the boxes
provided how your Proxy is to vote on each resolution. If no indication is given, the Proxy in his
discretion will vote as he thinks fit.

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

4. In the case of a Corporate Member, the Form of Proxy must be executed in the manner
prescribed by the Articles of Association/Statute.

5. The completed Form of Proxy should be deposited at the Registered Office of the Company,
No. 475/32, Kotte Road, Rajagiriya not later than forty eight (48) hours before the time
appointed for the holding of the meeting.

Please provide the following details:

Shareholders N.I.C./ Shareholders Number of shares held Proxy Holders

Passport/ Company Folio No. N.I.C. No. (if
Registration No. not a Director)
CORPORATE INFORMATION
Name of company Bankers
Odel PLC Bank of Ceylon
Commercial Bank
Legal form Deutsche Bank
Public Limited Liability Company DFCC Bank
Incorporated in Sri Lanka in 1990 DFCC Vardhana Bank
Habib Bank
Registered of ce of the company Hatton National Bank
475/32, Hongkong and Shanghai Banking Corporation
Kotte Road, Nation Trust Bank
Rajagiriya. National Development Bank
Sampath Bank
Company registration No. Seylan Bank
PV 7206 PQ Union Bank

Directors Investor Relations

Mr. A K Pathirage - Chairman/Executive Director Mr. Odel PLC
H.K Kaimal - Non Executive Director 475/32, Kotte Road,
Dr. S Selliah - Independent Non Executive Director Rajagiriya.
Mr. R.P Pathirana - Independent Non Executive Director Dr. Tel: 0115885000
I.C.R De Silva - Independent Non Executive Director web: www.odel.lk

Audit Committee
Mr. R.P Pathirana - Chairman
Dr. S Selliah
Dr. I.C.R De Silva

Remuneration Committee
Mr. R.P Pathirana
Dr. S Selliah

Related Party Transactions Review Committee

Dr. I.C.R De Silva - Chairperson
Mr. R.P Pathirana
Mr. H.K Kaimal

Secretaries and registrars

Softlogic Corporate Services (Pvt) Ltd
No 14, De Fonseka Place,
Colombo 5.

Auditors
Ernst & Young
Chartered Accountants,
201 De Saram Place,
P.O. Box 101, Designed & produced by REDWORKS
Colombo.
Digital plates & Printed by Printel (Pvt) Ltd
www.odel.lk