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#HAPPINESSMOMENTS
Kalpitiya
Annual Report 2014/15
#HAPPINESSMOMENTS
Citrus Kalpitiya Annual Report 2014/15
Kalpitiya
Experience the
tranquility of
happiness
Discover Happiness Moments by Citrus
CORPORATE INFORMATION
Name of Company
Kalpitiya Beach Resort PLC
PB 4367
Legal Form
Public Quoted Company with limited liability
Incorporated in Sri Lanka.
CONTENTS >>
Chairmans Message 2
Board of Directors 7
Annual Report of the Board of Directors on the
Affairs of the Company 10
Statement of Directors Responsibility 14
Corporate Governance 15
Audit Committee Report 31
Independent Auditors Report 32
Statement of Profit or Loss and Other
Comperhensive Income 34
Registered Office
No: 7/5, Gregory's Road,
Colombo 07.
Telephone : 0115 755 055
Fax : 0115 470 000
E-mail : info@citrusleisure.com
Website : www.citrusleisure.com
Board of Directors
Mr. E P A Cooray (Chairman)
Mr. D S Jayaweera
Ms. V S F Amunugama
Mr. S A Ameresekere
Mr. R Seneviratne
Mr. J M B Pilimatalawwe
Mr. S D De Mel
Statement of Financial Position 35

Statement of Changes in Equity 36
Cash Flow Statement 37
Notes to the Financial Statements 38
Share Information 72
Notice of Annual General Meeting 75
Form of Proxy 79
Printage (Pvt) Ltd
Chief Executive Officer

Mr. Chandana Talwatta
Stock Exchange Listing
The Shares of the Company are listed on the
Colombo Stock Exchange.
Company Secretaries
P W Corporate Secretarial (Pvt) Ltd.
No.3/17, Kynsey Road,
Colombo 08.
Auditors
Ernst & Young
Chartered Accountants
201, De Saram Place,
Colombo 10.
Bankers
Nations Trust Bank PLC
Pan Asia Bank Corporation PLC
Beach Resort PLC

>> Kalpitiya
Be happy for this moment.

This moment is your life.
- Omar Khayyam
The promise of peace and

serenity at Kalpitiya - a
haven to experience the
tranquillity of happiness.
Citrus Kalpitiya plans to develop a 60-room Ayurveda Spa and Resort in the quiet tranquillity of Kalipitiya,
offering relaxation, rejuvenation and healing through a range of traditional ayurvedic treatments and soothing
spa experiences.
Chairmans
Message
I welcome you to the 4th Annual General Meeting of Kalpitiya Beach
Resort PLC and take pleasure in presenting to you the Annual
Report and Financial Statements for the year ended 31 March 2015.
Even more remarkable is the fact that in terms of earnings, we have

been able to outpace regional competitor markets such as Thailand
and Malaysia.
In June 2015 Citrus Kalpitiya received shareholder approval to

develop a 60 room Ayurveda spa resort. Plans are well on the way
to complete this project by 2017. Furthermore, it is encouraging
to see several positive announcements made by the current
administration with regard to the development of the proposed
tourism zone in Kalpitiya. The long delay in the implementation
of the government plans had delayed the original plans for Citrus
Kalpitiya. Ayuveda tourism is niche product which is not as
dependent on the destination development, nevertheless a fresh
focus on Kalpitiya by the new government augurs well for Citrus.
In parallel with the growth in tourism, we have also witnessed

changes in the tourism landscape of the country. Among the more
radical changes has been the galvanizing of the informal sector,
which includes low cost accommodation such as guest houses and
home stays. While the arrivals and distributions patterns have not
been analysed scientifically, it is evident by the growth disparities
that the star class hotel operators are losing market share to
informal operators, who offer a better proposition to a growing
segment of travellers.
In post-war Sri Lanka, tourism is firmly entrenched as a growth

industry; today it is one of the foremost sources of value creation for
the economy and is poised to be a key player in the expansion of the
Sri Lankan economy in the long term.
The year ahead is expected to be the best on record for tourism
with the country expected to welcome over 1.8 million tourists
contributing towards earnings of USD 2.5 billion.
When thirty years of brutal war ended in 2009, Sri Lanka was only
welcoming 500,000 tourists; five years later, in 2014, the country
recorded 1,527,153 arrivals, a tremendous growth of over 350%.
In this context, the formal sector can greatly benefit from the
resumption of charter operations. I am pleased to state that the
Pearl of the Indian Ocean is under the watchful eye of a few
prominent charters and several of these are scheduled to begin
operations to Sri Lanka in 2016. During the war years, Sri Lanka
suffered from an almost complete withdrawal of charters, but
thanks to the recent developments and the attraction of prominent
hotel chains, Sri Lanka is once again on the charter operators
agenda. These charters have great networks in Europe and they
work with leading tour operators in the United Kingdom, Germany
and Italy etc. Sri Lankas profile ideally suits the European traveller;
therefore this strategic move will definitely help Sri Lanka in the
long run. At the same time, it is important that Sri Lanka improve air
access, perhaps through incentives to facilitate it.
Beach Resort PLC

>> Kalpitiya
In June 2015 Citrus Kalpitiya received shareholder approval to develop a 60

room Ayurveda spa resort, plans well on the way to complete this project by
2017. Furthermore it is encouraging to see several positive announcements
made by the current administration with regard to the development of the
proposed tourism zone in Kalpitiya.
The future of Sri Lankan tourism, in my point of view, runs

parallel to my forte in the industry which is Sustainable
Tourism. This is not only about respecting nature but adhering
to the concept of conservation versus development. Whatever
we carry forward should be sustainable without destroying the
environment around us.
4
Beach Resort PLC

>> Kalpitiya
The need for the presence of international brands in

the country is a must and we are honoured to have the
best leisure players looking at entering Sri Lanka. This
also augurs very well for the plans to take development
to the rural parts of Sri Lanka and provide employment
opportunities to the aspiring youth residing in these areas.
Several international airlines too have included Sri Lanka
on their radar, which will definitely bring more tourists in to
the country.
The National body, Sri Lanka Tourism should address the
industries exponential growth through policy direction and
zonal planning and by instituting a well articulated method
of regulating product quality. The industry and policy
makers must also urgently address several key challenges
that need immediate attention; these include the lack of
suitably trained and qualified human resources, and the
lack of a formal research based information to update the
stakeholders real-time on developments such as arrivals,
income, traveller geographies etc. In terms of human
capital, there are many opportunities for the younger
generation in the industry today, but sadly, we have
failed to really capture raw talent as the hotel industry.
My proposition is to encourage the private sector lead
institutions to get accreditation from the Sri Lanka Institute
of Tourism and Hotel Management, enabling wider access
to industry training across the whole country. The private
sector working closely with the national body should entice
talented youngsters starting from school leavers to enter
this field by projecting its true potential.
On current trends, tourism is likely to be one of the most
important industry in Sri Lanka, therefore, it is necessary
Chairmans Message
to reward and recognize champions who have excelled in the field

of tourism and those who have made a significant contribution
to the industry. The future of Sri Lankan tourism, in my point of
view, runs parallel to my forte in the industry which is Sustainable
Tourism. This is not only about respecting nature but adhering to
the concept of conservation versus development. Whatever we carry
forward should be sustainable without destroying the environment
around us. Sustainability is more compelling from a financial
and business point of view and with increasing pressure on all
industries to be sustainable, an integrated approach to strategy,
management and
reporting is critical.
Having nature in abundance, we need to take Sri Lanka beyond its
beach, culture and adventure in order to preserve the environment.
Sri Lanka is known as one of the biodiversity hotspots in the world.
It is home to so many species in such a small space, therefore,
travel agents should change their focus to communicate and
showcase the countrys biodiversity, which is world class. While
sharing Sri Lankas biodiversity with the rest of the world, we
need to explore new places of interest which will be a tremendous
platform for the industry within the necessary rules and
regulations.
At the Citrus group of Hotels, we have continued to strive to create
magic when catering to our guests, both foreign and local. Citrus
Hikkaduwa maintains its position as a leading three star property in
the area and has done remarkably well financially and is proving to
be a very profitable venture.
In terms of performance during the year under review, Citrus

Waskaduwa which was in operation for nine months of the year
achieved a revenue of Rs. 319 Mn, with an Average Occupancy Rate
close to 50%.
The Citrus Leisure Group marked a significant milestone when it
entered the city hotel segment by inking a contract with our affiliate
company, in June 2015. Under the agreement, our fully owned
subsidiary Citrus Silver Limited entered into a lease agreement
to operate The Steuart by Citrus, a 50-roomed boutique business
hotel located at the heart of Colombo in the historic former
headquarters of the conglomerate. The hotel ceremoniously
commenced commercial operations on 26th
June 2015.
Appreciations
I wish to place on record my sincere appreciation to my fellow
members of the Board of Directors and members of the
management team for their unstinted support during the year.
On behalf of the Board, I also extend my appreciation to our many
stakeholders for the trust placed in us to steer your company.
Prema Cooray
Chairman
Colombo
28 August 2015
Beach Resort PLC

>> Kalpitiya
board of
directors
Prema Cooray
Mr. Prema Cooray, the immediate Past Chairman of Aitken Spence
PLC counts well over 30 years experience in travel and tourism. He
led the Hotel Sector of Aitken Spence for several years making a
significant contribution in making Aitken Spence a leading player in
the development of resorts both in Sri Lanka and Maldives.
He is acknowledged for the pivotal role played in the development
of sustainable tourism and especially for his leadership in
developing the renowned Kandalama Hotel which has won many
global accolades for its contribution to environmental management,
food and beverage excellence and service standards of a truly
exceptional nature. These attributes signalled the entry of Sri
Lankas tourism to the world map of the hospitality industry.
He also led the pioneering effort of large scale expansion to the
Republic of Maldives in early 90s and this regional development
contributed exceptionally to the overall profile and growth of Aitken
Spence.
Mr. Cooray was selected by USAID to lead the Tourism Cluster
from 2001 to 2008 which introduced the concept of going beyond
beaches. The diversity in the profile of Sri Lankas tourism today is
mainly attributed to the efforts made by this Cluster.
He is a Past President of the Tourist Hotels Association of Sri Lanka
(1998-2000) and was the Chairman of the Sri Lanka Convention
Bureau (2007-2009). Presently he Chairs a rainforest initiative

partnered by the private sector which bench-marks the best
practices for Eco Tourism development in Sri Lanka.
He serves as a Member of the Tourism Cluster of National Council
for Economic Development (NCED) and also serves as a Member
of the Grants Board of ICTA. He is also a Board Member of The
Rainforest Ecolodge (Pvt) Ltd and Lighthouse Hotel PLC.
He served as the Secretary-General/CEO of the Ceylon Chamber
of Commerce (2003-2008) and presently heads the Project
Management Arm of the Chamber CCC Solutions (Pvt) Ltd.
Mr. Cooray has an MBA from the University of Sri Jayawardenepura,
is a Certified Management Accountant and he is also a Member of
the Institute of Hospitality, UK.
Dilith Jayaweera
Mr. Dilith is the co-founder of a dynamic conglomerate of 22
companies with diverse interests in communications, mass media,
leisure, finance, property development and manufacturing. An
entrepreneur committed to building strong and sustainable Sri
Lankan businesses, Dilith has built a reputation for challenging
convention with his can-do spirit. An Attorney-at-Law, Dilith holds
an LLB from the University of Colombo and an MBA from the
University of Wales.
Board of Directors
Varuni Amunugama Fernando

Ms. Varuni is the co-founder of a youthful and growing diversified
group which currently consists of 22 subsidiaries across sectors
such as communication, mass media, leisure, finance, property
development and manufacturing. Her stamp on corporate Sri Lanka
is accentuated by her belief that Sri Lanka Can, which has been the
driving principle behind the Groups ventures. Varuni read for her
LLB at the University of Colombo and holds a Diploma in Advertising
from LEcole-de-Publicitaire, Paris.
Sarva Ameresekere
Sarva, Director/CEO of Triad is responsible for the day-to-day
operations and management of one of Sri Lankas leading
advertising agencies. Under his purview, Triad together with its
group of companies in the communication industry offer clients a
comprehensive integrated business solution. Sarva is also involved
in the macro management and strategic planning of a diversified
portfolio strategic investments across many sectors. Qualified in
both Business and Engineering, Sarva brings on board extensive
local and foreign exposure including business, fund management,
operations, research and analysis. Sarva holds a Masters in
Engineering Management from the University of Southern
California, Los Angeles and a Degree in Industrial and Operations
Engineering from the University of Michigan, Ann Arbor.
Rajinda Seneviratne
Mr. Seneviratnes family established Reefcomber Hotel in
Hikkaduwa in the 1980s. The family has diversified into trading in
tea, packaging and warehousing through Corona T Stores Ltd. Mr.
Rajinda Seneviratne is the Managing Director of Corona T Stores
Ltd.
Manoj Pilimatalawwe
Mr. Manoj Pilimatalawwe currently works in the capacity of Head of
Group Information and Communication Technology of Brandix Lanka
Ltd. Prior to this Manoj was employed at PricewaterhouseCoopers
Lanka Ltd, and has experience in areas of general management,
management consultancy, IT operations and technology strategy
formulation.
Manoj holds a Masters Degree in Information Technology from The
Keele University in U.K. and a Bachelor of Science Honours Degree
in Information Systems from Manchester Metropolitan University
in U.K. and is a member of the British Computer Society (MBCS). He
is also a Chartered Information Technology Professional (CITP) and
counts over 14 years corporate experience.
Suresh De Mel
Mr. Suresh De Mel is the Managing Director of Lanka Fishing Flies
(Pvt) Ltd., a US-Sri Lanka Joint Venture since 1981 producing
Umpqua brand fishing flies. Lanka Fishing Flies which currently
employs 250 workers in factories in Colombo and Tangalle, has a
reputation for being one of the largest producers of high quality
hand tied fishing flies in the world.
Before taking over the family business in 1990, Suresh worked as
a Student Engineer and then as an Agricultural and Environmental
Engineer for CH2M Hill Inc., USA, for 10 years. He continues to be a
liaison for CH2M Hill in Sri Lanka.
Suresh is also the Chairman of Asian Angling Adventures (Pvt) Ltd.,
a company promoting catch and release sports fishing in
Sri Lanka, Maldives and Malaysia, and the Chairman/Managing
Beach Resort PLC

>> Kalpitiya
Director of Lanka Eco Adventure Frontiers (Pvt) Ltd., a company

promoting the conservation of rainforests and wet lands through
responsible tourism.
He is the Immediate Past Chairman of the Board and a founder
member of the Business for Peace Alliance - Sri Lankas Regional
Chambers of Commerce network for Conflict Transformation,
Reconciliation, Regional Empowerment, and Corporate Social
Responsibility and is a Founder Member and the Vice President
of the Association of Small and Medium Enterprises in Tourism
Sri Lanka. He also serves as a Director on the Boards of the
Hambantota District Chamber of Commerce, the American Chamber
of Commerce in Sri Lanka, and Navajeevana Rehabilitation Tangalle,
a project bringing new life to the Disabled.
He holds a Bachelor of Science Degree in Agricultural Engineering
from Cal Poly State University, San Luis Obispo, California, USA, and
is a Member of the American Society of Civil Engineers. He is also a
Member of the International Eco-tourism Society.
Suresh is a social entrepreneur who actively promotes investments
that sustain people, planet and profit.
Annual Report of the Board of Directors

on the Affairs of the Company
The Directors of Kalpitiya Beach Resort PLC have pleasure in
presenting their Annual Report together with the Audited Financial
Statements of the Company for the year ended 31st March 2015.
General
The Company was incorporated under the Companies Act, No.7
of 2007 as a Limited Liability Company on 21st January 2011.
It obtained a listing for its shares on the Diri Savi Board of the
Colombo Stock Exchange on 3rd January 2012 and consequent
thereto its name was changed to Kalpitiya Beach Resort PLC on
15th June 2012.
meeting held on 19th June 2015, the shareholders granted such

approval to proceed with the said 60 room resort.
In addition to the aforesaid principal activity, the company continues
to hold the investment in its associate company, Colombo Land and
Development Company PLC.
Financial Statements
The complete Financial Statements of the Company duly signed by
two Directors, on behalf of the Board and the Auditors are given on
pages 34 to 71.
Principal Activities
The planned principal activities of the Company are constructing
of a new resort in Kalpitiya and provision of food and beverages,
lodging, and other hospitality related activities. However,
construction activity of the resort has been delayed as a result of
lack of infrastructural development in the region contrary to the
Companys expectation on the same at the time of the initial public
offering.
Auditors Report
The Report of the Auditors on the Financial Statements of the
Company is given on page 32 to 33
Review of Operations
The company was to construct a 150 room resort at the project site
at Kalpitiya with in the Kalpitiya Integrated Tourism Zone that was to
be launched under a well-publicized plan of the Government of Sri
Lanka and Sri Lanka Tourism Development Authority.
Directors
The names of the Directors who held office as at the end of the
accounting period are given below and their brief profiles appear on
pages 7 to 9.
However, in the light of the delay in the development of the

Kalpitiya Region by the Government of Sri Lanka, the Board sought
Shareholders approval to develop a 60 room Ayurveda & Spa
Resort on the proposed project sight. At an Extraordinary general
10
Accounting Policies
The accounting policies adopted by the Company in the preparation
of financial statements are given on pages 38 to 71 and are
consistent with those of the previous period.
Executive Directors
Mr. D S Jayaweera
Ms. V S F Amunugama
Non Executive Director
Mr. S A Ameresekere
Beach Resort PLC

>> Kalpitiya
Independent Non Executive Director

Mr. E P A Cooray
Mr. R Seneviratne
Mr. S D De Mel
In terms of Article 88 of the Articles of Association of the Company,
Mr. R Seneviratne retires by rotation and being eligible is
recommended by the Directors for re-election.
Interests Register
The Company maintains an interest Register in terms of the
Companies Act No. 7 of 2007, which is deemed to form part and
parcel of this Annual Report and is available for inspection upon
request.
All related party transactions which encompass the transactions of
Directors who were directly or indirectly interested in a contract or
a related party transaction with the Company during the accounting
period are recorded in the Interest Register in due compliance with
the applicable rules and regulations of the relevant Regulatory
Authorities.
The relevant interests of Directors as at 31st March 2015 as
recorded in the Interest Register are given in this report under
Directors Interests in Contracts and Directors Shareholding.
Directors Remuneration
The Directors were not paid any remuneration during the year
under review.
Directors interests in contracts

Related party disclosures as required by the Sri Lanka Accounting
Standards No.24 are detailed in note 23 to the financial statements.
Directors responsibility for Financial Reporting
The Directors are responsible for the preparation of Financial
Statements of the Company to reflect a true and fair view of the
state of its affairs. A further statement in this regard is included on
page 14.
Relevant interests of Directors in the shares
Directors interest in the shares of the Company as at 31st March
2015 and 31st March 2014 were as follows:
As at
31.3.2015
As at
31.3.2014
500,001
500,001
Nil
Nil
10,000
10,000
Ms. V. S. F. Amunugama
Nil
Nil
Mr. J. M. B. Pilimatalawwe
Nil
Nil
23,800
23,800
Nil
Nil
Mr. E. P. A. Cooray
Mr. D. S. Jayaweera
Mr. R. Seneviratne
Mr. S. D. De Mel
Mr. S. A. Ameresekere
The Directors of the Company also serve as Directors of Citrus

Leisure PLC which holds 111,653,901 shares constituting 69.26% of
the issued shares of the Company.
All the above directors represent the board of Citrus Villas Kalpitiya
Limited, the fully owned subsidiary of the company wjich is
currently in domant status.
11
Annual Report of the Board of Directors

on the Affairs of the Company
Auditors
Messrs Ernst & Young, Chartered Accountants served as the
Auditors during the year under review. They do not have any interest
in the Company other than that of Auditor, in addition to which they
also provided certain permitted non audit services.
A total amount of Rs. 270,354/- is payable by the Company to the
Auditors for the year under review, details of which are set out in
note 7 to the financial statement on page 52.
The Auditors have expressed their willingness to continue in
office. A resolution to re-appoint the Auditors and to authorise the
Directors to determine their remuneration will be proposed at the
Annual General Meeting.
Stated Capital
The Stated Capital of the Company as at 31 March 2015 was
Rs.1,718,679,050/= representing 161,200,010 ordinary shares
(Rs.1,718,679,050/= representing 161,200,010 ordinary shares as at
31 March 2014).
Major Shareholders, Distribution Schedule and other information
Information on the distribution of shareholding, analysis of
shareholders, market values per share, earnings per share,
dividends per share, net assets per share, twenty largest
shareholders of the Company, percentage of shares held by the
public as per the Listing Rules of the Colombo Stock Exchange are
given on page 72 to 74 under Share Information.
Employment Policy
The Companys employment policy is totally non-discriminatory
which respects individuals and provides career opportunities
irrespective of the gender, race or religion.
12
As at 31st March 2015, the Company had one employee

(01 employee as at 31st March 2014).
Statutory Payments
The Directors confirm that to the best of their knowledge, all
payments in respect of statutory liabilities including EPF,ETF and
PAYE tax have been made within the stipulated periods during the
financial year.
Reserves
The reserves of the Company with the movements during the year
are given in the financial statements on page 36.
Land Holdings
The Companys land holdings referred to in Notes 10 & 11 of the
Financial Statements comprise a land in extent of 5,680 perches
(leasehold) and another land in extent of 6,932 perches (freehold)
which was re-valued in 2015 at Rs.195,000,000/-.
Property, Plant & Equipment
Details and movements of property, plant and equipment are given
under Note 10 to the Financial Statements on page 54 to 57.
Investments
Details of the Companys quoted and unquoted investments as at
31st March 2015 are given in Notes 14 to the Financial Statements
on page 62 to 64.
Material Foreseeable Risk Factors
As part of the governance process, the Board on a continuous basis
reviews and takes any measures and evaluates the internal controls
and risks of the Company and takes any measures required to
mitigate risk.
Beach Resort PLC

>> Kalpitiya
Donations
The Company did not make any donations during the year under
reviews.
Dividends
Directors do not recommend a dividend for the year under review.
Corporate Governance
The Board of Directors confirm that the Company is compliant with
section 7.10 of the Listing Rules of the Colombo Stock Exchange.
Annual General Meeting

The Annual General Meeting of the Company will be held at
6th Floor Auditorium, Sri Sambuddha Jayanthi Mandiraya, 32,
Sri Sambuddha Jayanthi Mawatha, Colombo 05 on 30th September
2015 at 9.45 am. The Notice of the Annual General Meeting is on
page 75 of this Report.
This Annual Report is signed for and on behalf of the Board of
Directors by
The report on Corporate Governance is given on pages 15 to 30 of

the Annual Report.
Events After the Reporting Date
There were no events after the reporting date which would require
adjustment to or disclosure in the Financial Statements except the
approval granted by the shareholders to take steps to develop and
construct as first stage, a sixty room Ayurveda Resort and Spa at
the project site at Kalpitiya.
E P A Cooray
Chairman
D S Jayaweera
Director
P W Corporate Secretarial (Pvt) Ltd

Secretaries
Colombo
28 August 2015
13
Statement of Directors
Responsibility
The Companies Act 07 of 2007 stipulates that Directors are
responsible for the preparation of financial statements for each
financial year and place before a general meeting financial
statements, which comprise the statement of financial position
as at 31 March 2015, and statement of profit or loss and other
comprehensive income, statement of changes in equity and,
cash flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory information,
which presents a true and fair view of the state of affairs of the
Company as at the end of the financial year and which comply with
the requirements of the above Act.
The financial statements have been prepared and presented in
accordance with Sri Lanka Accounting Standards. In preparing the
financial statements, appropriate accounting policies have been
selected and applied consistently, whilst reasonable and prudent
judgments and estimates have been made.
As per Section 148 of the Act, the Directors are required to maintain
sufficient accounting records to disclose with reasonable accuracy
the financial position of the Company and to ensure that the
financial statements presented comply with the requirements of the
Companies Act.
The Directors are also responsible for devising proper internal
controls for safeguarding the assets of the Company against
unauthorized use or disposition, prevention and detection of fraud
14
and for reliability of financial information used within the business

or publication.
The Directors continue to adopt the going concern basis in
preparing accounts and after making inquiries consider that the
Company has adequate resources to continue in operation.
The Board of Directors is of the opinion that Board has discharged
its responsibilities as set out above.
By order of the Board of

Secretaries
Colombo
28 August 2015
Beach Resort PLC

>> Kalpitiya
Corporate
Governance
Board of Directors
The Board of Directors is committed to maintain the highest
standards of corporate governance and ethical business conduct
in the operations and decision making process. In this regard,
the Board of Directors is responsible for the governance of the
Company whilst the shareholders role in governance is to appoint
the Directors and the Auditors to satisfy themselves that an
appropriate governance structure is in place.
The Board of Directors of the Company currently comprises of
seven members. There is a balance of Executive and Non Executive
Directors to ensure that the decisions taken by the Board are
collective decisions. One third of the Directors retires by rotation at
each Annual General Meeting but are eligible for re-election.
Each Non-Executive Director has submitted a Declaration of his
independence or non-independence as required under the Listing
Rules of the Colombo Stock Exchange.
The Board has determined that Messrs E.P.A Cooray, R Seneviratne,
J.M.B Pilimatalawwe , and S.D De Mel, are independent as per the
criteria set out in the Listing Rules of the Colombo Stock Exchange.
The Board has determined that the said Directors who serve on the
directorate of Citrus Leisure PLC (which is the holding company
of Kalpitiya Beach Resort PLC) and certain other companies in
the group do not qualify as Independent against the criteria set
out in Rule 7.10.4(g) of the Listing Rules of the CSE. Nevertheless,
the Board, having considered that the said Directors serve as
Independent Directors on the Board of the holding company has
resolved that in its opinion the directorships held by the said

Directors does not compromise their independence and objectivity
in discharging the functions as an Independent Director/s.
Board Sub Committees
Audit Committee
The primary function of the Committee is to assist the Board in
fulfilling its responsibilities by reviewing the financial Information
provided to Shareholders. The Audit Committee also oversees the
relationship between the Company and the Auditor and reviews the
Companys financial reporting system
The Audit Committee of the Parent Company namely Citrus Leisure
PLC, functions as the Audit Committee of this Company.
The Audit Committee consists of the following Directors.
Mr. E. P. A. Cooray, a Certified Management Accountant, serves as
Chairman of the Committee
Mr. R. Seneviratne
Mr. S. D. De Mel
The Report of the Audit Committee appears on page 31.
Compliance with Code of Best Practice
The Code of Best Practice on Corporate Governance issued Jointly
by the Securities and Exchange Commission of Sri Lanka and the
Institute of Chartered Accountants of Sri Lanka, has been adopted
by the Board, which is on page20
15
Board Meetings
The Board meets regularly to discharge their duties effectively.
The Boards functions include the assessment of the adequacy
and effectiveness of internal controls, compliance with applicable
laws and regulations, review of management and operational
information, adoption of annual and interim accounts before they
are published, review of exposure to key business risks, strategic
direction of operational and management units, approval of annual
budgets, monitoring progress towards achieving the budgets,
approvals relating to key appointments, sanctioning major capital
expenditure etc.
The Board met 11 times during the period under review and the
attendance is given below.
Name
Financial Reporting
The Board aims to provide and present a balanced assessment
of the Companys position and prospects in compliance with the
Sri Lanka Accounting Standards and the relevant Statutes, and
has established a formal and transparent process for conducting
financial reporting and internal control principles.
The Statement of Directors Responsibilities for the Financial
Statements is given on page 14 of this Report.
Internal Controls
The Board is responsible for the Companys internal controls. In this
respect, controls are established for safeguarding the Companys
assets, making available accurate and timely information and
imposing greater discipline on decision making.
2015
2014
23.04.14
29.05.14
25.09.14
30.10.14
27.11.14
30.12.14
29.01.15
26.02.15
Mr. D S Jayaweera
Mr. R Seneviratne
Ms. V S F Amunugama
Mr. S D De Mel
Mr. S A Ameresekere
16
26.06.14 31.07014 28.08.14
Beach Resort PLC

>> Kalpitiya
Corporate Disclosure and Shareholder Relationship

The Company is committed to providing timely and accurate
disclosure of all price sensitive information, financial results and
significant developments to all shareholders, the Colombo Stock
Exchange and where necessary, to the general public. Shareholders
are provided with the Annual Report and, the Company
disseminates to the market, Quarterly Financial Statements in
accordance with the Listing Rules of the Colombo Stock Exchange.
The Annual General Meeting provides a platform for shareholders to

discuss and seek clarifications on the activities of the Company.

Secretaries
Colombo
28th August 2015
Compliance with Continuing Listing Rules - Check List

Complied
X Non-Complied
Rule Ref.
Subject
Applicable requirement
Compliance
Status
Applicable section in
the Annual Report
7.10.1 (a)
Non-Executive
Directors
At least one third of the total number of Directors

should be Non-Executives.
7.10.2 (a)
Independent Directors
Two or one third of Non-Executive Directors whichever

is higher should be Independent.
7.10.2 (b)
Independent Directors
(ID)
Each Non-Executive Director should submit a

declaration of Independence, non independence in the
prescribed format
Available with the

Secretaries for review
17
Rule Ref.
Subject
Compliance
Status
the Annual Report
7.10.3 (a)
Disclosure relating to
Directors
The board shall annually determine the independence

or otherwise of the non Independency. Names of the ID
should be Disclosed in the Annual Report.
7.10.3 (b)
Directors
The basis for Board to determine a Directors as

independent, if specified criteria for independence is
not met.
7.10.3 (c)
Directors
A brief resume of each Director should be included in

the Annual Report including the areas of expertise.
Board of Directors
(Profile) Section in the
AR.
7.10.3 (d)
Directors
Provide a brief resume of new Directors appointed to

the Board with details specified in 7.10.3 (a,b,c & d) to
the CSE.
and Board of Directors
(profile) section in the
AR
7.10.5
Remuneration
Committee
A Listed company shall have a Remuneration

Committee
7.10.5 (a)
Composition of
Remuneration
Committee.
Shall comprise of Non-Executive Directors a majority

of whom will be independent.
7.10.5 (b)
Functions of
Remuneration
Committee
The Remuneration Committee shall recommend the

remuneration of Chief Executive Officer and NonExecutive Directors.
Remuneration
Committee Report
18
N/A
Beach Resort PLC

>> Kalpitiya
Rule Ref.
Subject
Compliance
Status
7.10.5 (c)
Disclosure in the
Annual Report relating
to Remuneration
Committee
The Annual Report should set out (a) Names of

Directors comprising the Remuneration Committee.
(b) Statement of Remuneration Policy. (c) Aggregated
remuneration paid to NED/NID/ID. (d) Statement of
remuneration committee.
7.10.6
Audit Committee
The Company shall have an Audit Committee
7.10.6 (a)
Composition of an
Audit Committee
Shall comprise of Non-Executive Directors and

majority of whom should be independent. One NonExecutive Director shall be appointed as the Chairman
of the Audit Committee. Chief Executive Officer and the
Chief Financial Officer should attend Audit Committee
Meetings. The Chairman of the Audit Committee or
one member should be a member of a professional
accounting body.
and the Board
Committee Reports.
7.10.6 (b)
Audit Committee
Functions
Should be as outlined in the Section 7 of the listing

rules
and the Board
Committee Reports.
7.10.6 (c
Disclosure in the
Annual Report relating
to Audit Committee.
(a) Names of the Directors comprising the Audit

Committee. (b) The Audit Committee shall make a
determination of the independence of the Auditors and
disclose for such determination. (c) The Annual Report
shall contain a Report of the Audit Committee setting
out of the manner of compliance of the functions.
and the Board
Committee Reports.
N/A
the Annual Report
-
19
Adoption of Joint Code of Best Practices Checklist

Code Ref.
Subject
Applicable Requirement
Adoption
Status
Applicable Section in
the Annual Report
A.1 DIRECTORS Board

A.1.1
Frequency of Board
Meetings
Board should meet regularly, at least once in every

quarter
/ AR of the BOD
A.1.2
Responsibilities of the Board
Formulation and implementation of strategy

Skill adequacy of management and succession
Integrity of information, internal controls and risk
management Compliance with laws, regulations
and ethical Standards Code of conduct Adoption of
appropriate accounting policies
A.1.3
Access to professional
advice
Procedures to obtain independent professional

Advice
A.1.4
Company Secretary
Ensure adherence to board procedures and

applicable rules and regulations Procedure for
Directors to access services of Company Secretary
A.1.5
Independent Judgement
Directors should exercise independent judgment

on issues of strategy, resources, performance and
standards of business Judgments.
A.1.6
Dedication of adequate time

and effort by Directors
Directors should devote adequate time and effort

to discharge their responsibilities to the Company
satisfactorily
A.1.7
Training for Directors
Directors should receive appropriate training, hone

skills and expand knowledge to more effectively
perform duties
20
Beach Resort PLC

>> Kalpitiya
Code Ref.
Subject
Adoption
Status
the Annual Report
A balance of power and authority to be maintained

by separating responsibility for conducting Board
business from that of executive decision making
Chairman to preserve order and facilitate effective

discharge of board functions by proper conduct of
Board meetings.
Board to ensure adequacy of financial acumen and

knowledge within Board.
A.2 DIRECTORS - Chairman & Chief Executive Officer

A.2.
Division of responsibilities
to ensure no individual
has unfettered powers of
decision.
A.3 DIRECTORS - Role of Chairman

A.3
Ensure good corporate

governance
A.4 DIRECTORS - Financial Acumen

A.4
Possession of adequate
financial acumen
A.5 DIRECTORS - Board Balance

A.5.1
Composition of Board
The Board should include a sufficient number of

Non-Executive independent Directors.
A.5.2
Proportion of independent
Directors
Two or one third of the Non-Executive directors

should be independent.
A.5.3
Test of independence
Independent Directors should be independent of

management and free of any business or other
relationship that could materially interfere with the
exercise of unfettered and independent judgement.
A.5.4
Declaration of independence
Non-Executive Directors should submit a signed

and dated declaration of their Independence/NonIndependence
Corporate
Governance/ Annual
Report of the Board of
Directors
21
Code Ref.
Subject
Adoption
Status
the Annual Report
A.5.5
Annual determination of
criteria of independence
/ non - independence and
declaration of same by
Board
The Board should annually determine and disclose

the name of Directors deemed to be independent
A.5.6
Appointment of senior
Independent Director
If the roles of Chairman / CEO are combined, a

Non-Executive should be appointed as a Senior
Independent Director.
N/A
A.5.7
Availability of Senior
Independent Director (SID) to
other Directors
If warranted the SID should be available to the other

directors for confidential discussions.
N/A
A.5.8
Interaction between
Chairman and NonExecutive Independent
Directors
The Chairman should meet the Non-Executive

Independent Directors at least once a year
A.5.9
Directors concerns to be
recorded
When matters are not unanimously resolved,

directors to ensure their concerns are recorded in
Board minutes.
N/A
A.6 DIRECTORS - Supply of information

A.6.1
Provision of adequate
information to Board
Management to ensure the Board is provided with

timely and appropriate information
A.6.2
Adequacy of Notice and

formal agenda to be
discussed at board meetings
Board minutes , agenda and papers should be

circulated at least seven days before the Board
meeting.
22
Beach Resort PLC

>> Kalpitiya
Code Ref.
Subject
Adoption
Status
the Annual Report
A.7 DIRECTORS - Appointment to the Board

A.7.1
Nomination Committee
Nomination committee of parent may function as

such for the Company and make recommendations
to the Board on new Board Appointments.
A.7.2
Annual assessment of Board

Composition
Nomination committee or Board should annually

assess the composition of Board.
A.7.3
Disclosure of new Board

appointments
Profiles of new Board appointments to be

communicated to Shareholders.
/ Notice of Meeting
A.8 DIRECTORS - Re election

A.8.1
Appointment of NonExecutive Directors
Appointment of Non-Executive directors should be

for specified terms and re - election should not be
automatic
/ Annual Report of the
Board of Directors
A.8.2
Shareholder approval of
appointment of all Directors
The appointment of all Directors should be subject

to election by shareholders at the first opportunity
Board of Directors /
Notice of Meeting
A.9 DIRECTORS - Appraisal of Board Performance

A.9.1
Annual appraisal of Board

performance
The Board should annually appraise how effectively

it has discharged its key responsibilities
A.9.2
Self evaluation of Board and

Board Committees
The Board should evaluate its performance and that

of its committees annually
Corporate
Governance/ Audit
Committee Report
A.9.3
Declaration of basis of
performance evaluation
The Board should disclose how performance

evaluations have been carried out
23
Code Ref.
Subject
Adoption
Status
the Annual Report
Board of Directors ,
/ Audit Committee
Report
A.10 DIRECTORS - Disclosure of information in respect of Directors

A.10.1
Biographical profiles and

relevant details of Directors
to be disclosed
Annual Report should disclose the biographical

details of directors and attendance at Board/
Committee meetings
A.11 DIRECTORS - Appraisal of Chief Executive Officer

A.11.1
Short , medium and long

term, financial and non financial objectives to be set.
The Board should set out the short, medium and

long term, financial and non - financial objectives at
the commencement of each year
A.11.2
Evaluation of CEO
performance
The performance of the CEO should be evaluated by

the Board at the end of the year
B. 1 DIRECTORS REMUNERATION - Remuneration Procedure

B.1.1
Appointment of
Remuneration Committee
Remuneration Committee of parent may function as

such for the Company to make recommendations on
Directors remuneration
N/A
B.1.2
Composition of
Board to appoint only Non-Executive Directors to

serve on Remuneration Committee
N/A
B.1.3
Disclosure of members of
The Annual Report should disclose the Chairman

and Directors who serve on the Remuneration
Committee
N/A
B.1.4
Remuneration of NonExecutive Directors
Board to determine the level of remuneration of

Non-Executive Directors
N/A
B.1.5
Access to professional
advice
Remuneration Committee should have access

to professional advice in order to determine
appropriate remuneration for Executive Directors.
N/A
24
Beach Resort PLC

>> Kalpitiya
Code Ref.
Subject
Adoption
Status
the Annual Report
B. 2 DIRECTORS REMUNERATION - Level and Make up of Remuneration

B.2.1
Remuneration packages for

Executive Directors
Packages should be structured to attract, retain and

motivate Executive Directors
B.2.2
Remuneration packages to
be appropriately positioned
Packages should be comparable and relative to

that of other companies as well as the relative
performance of the Company
B.2.3
Appropriateness of
remuneration and conditions
in relation to other Group
companies
When determining annual increases Remuneration

Committee should be sensitive to that of other Group
companies
B.2.4
Performance related
elements of Remuneration
Performance related elements of remuneration

should be aligned with interests of Company
B.2.5
Share options
Executive share options should not be offered at a

discount
N/A
B.2.6
Remuneration packages for

Non-Executive Directors
Should reflect time commitment and responsibilities

of role and in line with existing market practice
N/A
N/A
B. 3 DIRECTORS REMUNERATION - Disclosure of Remuneration

B.3.1
Disclosure of details of
Remuneration
The Annual Report should disclose the remuneration

paid to Directors
C. 1 RELATIONS WITH SHAREHOLDERS Constructive use and conduct of Annual General Meeting
C.1.1
Proxy votes to be counted
The Company should count and indicate the level

of proxies lodged for and against in respect of each
resolution
25
Code Ref.
Subject
Adoption
Status
the Annual Report
C.1.2
Separate resolutions
Separate resolutions should be proposed for

substantially separate issues
Corporate
Governance/ Notice of
Meeting
C.1.3
Availability of Committee
chairmen at AGM
The chairmen of Board committees should be

available to answer any queries at AGM
C.1.4
Notice of AGM
15 calendar days notice to be given to shareholders
Notice of Meeting
C.1.5
Procedure for voting at

meetings
Company to circulate the procedure for voting with

Notice of Meeting
Notice of Meeting
Transactions that have a value which are greater

than half of the net assets of the Company should be
disclosed
Annual Report of the
Board of Directors
Corporate Governance,
Risk Management,
C. 2 MAJOR TRANSACTIONS
C.2.1
Disclosure of Major
Transactions
D.1 ACCOUNTABILITY AND AUDIT - Financial Reporting

D.1.1
26
Presentation of public
reports
Should be balanced, understandable and comply

with statutory and regulatory requirements
Beach Resort PLC

>> Kalpitiya
Code Ref.
Subject
Adoption
Status
the Annual Report
D.1.2
Directors Report
The Directors Report should be included in the

Annual Report and confirm that the Company has
not contravened laws or regulations inconducting its
activities Material interests in contracting have been
declared by Directors the Company has endeavoured
to ensure equitable treatment of shareholders
that the business is a going concern that there is
reasonable assurance of the effectiveness of the
existing business systems following a review of the
internal controls covering financial, operational and
compliance

Board of Directors,
Audit Committee
Report, Financial
Statements, Corporate
Governance, Risk
Management
D.1.3
Respective responsibilities
of Directors and Auditors
The Annual Report should contain separate

statements setting out the responsibilities of the
Directors for the preparation and presentation
of the financial statements and the reporting
responsibilities of the Auditors
Statement
of Directors
Responsibility and
Independent Auditors
Report
D.1.4
Management Discussion and

Analysis
Annual Report to include section on Management

Discussion and Analysis
D.1.5
Going Concern
Directors to substantiate and report that the

business is a going concern or qualify accordingly

Board of Directors
D.1.6
Serious Loss of Capital
Directors to summon an Extraordinary General

Meeting in the event that the net assets of
the Company falls below 50% of the value of
Shareholders Funds
N/A
27
Code Ref.
Subject
Adoption
Status
the Annual Report
D.2 ACCOUNTABILITY AND AUDIT - Internal Control

D.2.1
Effectiveness of system of
internal controls
Directors to annually conduct a review of the

effectiveness of the system of internal controls.
This responsibility may be delegated to the Audit
Committee
Audit Committee
Report Risk
Management
D.3 AUDIT COMMITTEE

D.3.1
Chairman and Composition

of Audit Committee
Should comprise of a minimum of two Independent,

Non-Executive Directors Audit Committee Chairman
should be appointed by the Board
Audit Committee
Report
D.3.2
Duties of Audit Committee
Should include Review of scope and results of audit

and its effectiveness Independence and objectivity of
the Auditors
D.3.3
Terms of Reference /
Charter
The Audit Committee should have a written Term

of Reference which define the purpose of the
Committee and its duties and responsibilities
D.3.4
Disclosures
The Annual Report should disclose the names of

Directors serving on the Audit Committee The Audit
Committee should determine the independence
of the Auditors and disclose the basis of such
determination The Annual Report should contain
a report by the Audit Committee setting out the
manner of the compliance of the Company during
the period to which the Report relates
Corporate Governance,
Audit Committee
Report,
28
Beach Resort PLC

>> Kalpitiya
Code Ref.
Subject
Adoption
Status
the Annual Report
D.4 CODE OF BUSINESS CONDUCT AND ETHICS

D.4.1
Adoption of Code of
Business Conduct and Ethics
The Company must adopt a Code of Business

Conduct and Ethics for directors and members of
the senior management team and promptly disclose
any violation of the Code
D.4.2
Chairmans affirmation
The Annual Report must include an affirmation by

the Chairman that he is not aware of any violation of
the Code of Business Conduct and Ethics
Chairmans Message
Board of Directors
The Annual Report should include a report setting

out the manner and extent to which the Company
has adopted the principles and provisions of the
Code of Best Practice on Corporate Governance
D.5 CORPORATE GOVERNANCE DISCLOSURES

D.5.1
Report
E. INSTITUTIONAL INVESTORS Structured Dialogue

E.1
Structured Dialogue with

Shareholders
A regular and structured dialogue should be

conducted with shareholders and the outcome of
such dialogue should be communicated to the Board
by the Chairman
E.2
Evaluation of Governance
Disclosures by Institutional
Investors
Institutional investors should be encouraged

to consider the relevant factors drawn to their
attention with regard to Board structure and
composition
29
Code Ref.
Subject
Adoption
Status
the Annual Report
F. OTHER INVESTORS Investment/Divestment decisions

F.1
Individual Investors
Individual shareholders should be encouraged to

carry out adequate analysis and seek professional
advice when making their investment/divestment
decisions
F.2
Shareholder Voting
Individual shareholders should be encouraged to

participate and exercise their voting rights
/ Form of Proxy
30
Beach Resort PLC

>> Kalpitiya
Audit Committee
Report
Terms of reference, principal focus and medium of reporting
The responsibilities of the Audit Committee are governed by the
Audit Committee charter, approved and adopted by the Board.
The Audit Committee focuses principally on assisting the Board
in fulfilling its duties by providing an independent and objective
review of the financial reporting process, internal controls and
the audit function. These include the quality of interim and annual
reported earnings and the adequacy and fairness of disclosure;
monitoring managements strategy for ensuring that the Company
has implemented appropriate internal controls to address business
risks and that these controls are functioning effectively; reviewing
procedures relating to statutory, regulatory and related compliance.
Activities performed

Reviewed the activities and financial affairs of the Company
and the financial reporting system adopted in the preparation
of quarterly and annual financial statements to ensure
reliability of the process, appropriateness and consistency
of accounting policies and methods adopted and that they
facilitate compliance with the requirements of Sri Lanka
Accounting standards (LKAS, SLFRS), the Companies Act
No 7 of 2007 and other relevant statutory and regulatory
requirements.

Reviewed the quarterly and year end financial statements and

recommended their adoption to the Board.
Committee composition
The Audit Committee consists of 03 members.
Reviewed the type and quantum of non-audit services

provided by the external auditors to the Company to ensure
that their independence as auditors has not been impaired.
Reviewed the Companys compliance framework to determine

that it provides reasonable assurance that all relevant laws,
rules and regulations have been complied with.
The members of the Board appointed Audit Committee are;

Mr. E P A Cooray - Chairman
Mr. R Seneviratne
Mr. S D De Mel
The Company Secretary functions as the Secretary to the Audit
Committee.
The Chairman of the Audit Committee is a Fellow of the Institute
of Chartered Accountants of Sri Lanka and the remaining two
Directors are Independent Non-Executive Directors. The Audit
Committee reports directly to the Board. The individual and
collective financial and hotel industry specific knowledge, business
experience and the independence of members are brought to bear
on all matters, which fall within the Committees purview. The Chief
Executive Officer and the Finance Manager attend meetings by
invitation.
The Audit Committee has recommended to the Board of Directors

that Messrs Ernst & Young be re-appointed as Auditors for the
Financial Year ending 31st March 2016, subject to the approval of
the shareholders at the next Annual General Meeting.
E P A Cooray
Chairman - Audit Committee
Colombo
28 August 2015
31
Independent Auditors Report
INDEPENDENT AUDITORS REPORT

TO THE SHAREHOLDERS OF KALPITIYA BEACH RESORT PLC
Report on the Financial Statements
We have audited the accompanying financial statements of Kalpitiya
Beach Resort PLC (the Company), which comprise the statement
of financial position as at 31 March 2015, and statement of profit
or loss and other comprehensive income, statement of changes
in equity and, cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information.
Boards Responsibility for the Financial Statements
The Board of Directors (Board) is responsible for the preparation
of these financial statements that give a true and fair view in
accordance with Sri Lanka Accounting Standards, and for such
internal control as Board determines is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
32
Auditors Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with Sri Lanka Auditing Standards. Those standards
require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control
relevant to the entitys preparation of the financial statements that
give a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal
Beach Resort PLC

>> Kalpitiya
control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting
estimates made by Board, as well as evaluating the overall
presentation of the financial statements.
Report on Other Legal and Regulatory Requirements

As required by section 163 (2) of the Companies Act No. 07 of 2007,
we state the following:
a)
The basis of opinion and scope and limitations of the audit are
as stated above.
b)

In our opinion:
we have obtained all the information and explanations that
were required for the audit and, as far as appears from our
examination, proper accounting records have been kept by
the Company, and
the financial statements of the Company comply with the

requirements of section 151 of the Companies Act No. 07 of
2007.
We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of
the financial position of the Company as at 31 March 2015, and of
its financial performance and cash flows for the year then ended in
accordance with Sri Lanka Accounting Standards.
Emphasis of Matter
Without qualifying our opinion we draw attention to Note 1.2 to the
financial statements, which describe factors contributing to the
non-commencement of operations of the Company, and the present
business plan thereon.
28th August 2015

Colombo
33
Statement of Profit or Loss and Other Comprehensive Income

Year ended 31 March 2015
2015
Rs.
2014
Rs.
414,703
(10,059,587)
38,418
(92,109,956)
30,953,418
(70,763,004)
(70,763,004)
166,050
(11,662,733)
(132,708,386)
12,404,566
(131,800,502)
(131,800,502)
Note
Revenue
Cost of Sales
Gross Profit
Other Income
Administrative Expenses
Finance Income
Finance Costs
Share of Profit of Associate
Loss before Tax
Income Tax Expense
Loss for the year
5
6.1
6.2
7
8
Other Comprehensive Income

Other comprehensive income to be reclassified to profit or loss in subsequent periods
Share of other comprehensive income of equity accounted investees
12
(29,794)
(162,771)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods

Actuarial Loss on Defined Benefit Plan
18
(16,452)
(3,166)
Share of other comprehensive income of equity accounted investees
12
884,978
(216,960)
Revaluation Gain on Property Plant & Equipment
17
16,984,690
Total Other Comprehensive Income
17,823,422
(382,897)
Total Comprehensive loss for the year, net of tax
(52,939,582)
(132,183,399)
(0.44)
(0.82)
Loss per Share
The accounting policies and notes on pages 38 through 71 form an integral part of these Financial Statements.
34
Beach Resort PLC

>> Kalpitiya
Statement of Financial Position

As at 31 March 2015
Note
2015
Rs.
2014
Rs.
10
11
12.1
13.1.1
215,311,236
192,470,959
1,367,135,354
82,644,266
1,857,561,815
209,960,745
194,496,970
1,335,326,753
1,739,784,468
13.1
14
239,130,342
579,600
22,036
239,731,978
2,097,293,794
437,626,975
10,350,434
247,538
66,010
448,290,957
2,188,075,424
16
17
1,718,679,050
16,984,690
(370,793,607)
1,364,870,133
1,718,679,050
(300,869,335)
1,417,809,715
Non-Current Liabilities
Interest Bearing Loans and Borrowings
Retirement Benefit Obligations
14
18
Current Liabilities
Other Payables
Interest Bearing Loans and Borrowings
746,037
72,108
818,145
5,934,042
34,208
5,968,250
19
14
22,381,719
709,223,796
731,605,515
2,097,293,794
23,134,308
741,163,151
764,297,459
2,188,075,424
ASSETS
Non-Current Assets
Property, Plant and Equipment
Lease Rentals Paid in Advance
Investments in Associates
Amount Due from Related Parties
Current Assets
Other Receivables
Other Current Financial Assets
Advances and Prepayments
Cash and Cash Equivalents
15
Total Assets
EQUITY AND LIABILITIES
Capital and Reserves
Stated Capital
Revaluation Reserve
Retained Losses
TOTAL EQUITY
Total Equity and Liabilities

These Financial Statements are in Compliance with the requirement of the Companies Act No. 07 of 2007.
Senani Padukka
Accountant
The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board by,
E P A Cooray D S Jayaweera
Director Director
Colombo
28 August 2015
35
Statement of Changes in Equity

As at 31 March 2015
Stated
Capital
Rs.
Revaluation
Reserves
Rs.
Retained
Losses
Rs.
Total
Equity
Rs.
As at 31 March 2013
Loss for the year
Other Comprehensive Expenses
Balance as at 31 March 2014
1,718,679,050
1,718,679,050
(168,685,936)
(131,800,502)
(382,897)
(300,869,335)
1,549,993,114
(131,800,502)
(382,897)
1,417,809,715
Loss for the year

Other Comprehensive Income
Balance as at 31 March 2015
1,718,679,050
16,984,690
16,984,690
(70,763,004)
838,732
(370,793,607)
(70,763,004)
17,823,422
1,364,870,133
36
Beach Resort PLC

>> Kalpitiya
Cash Flow Statement

As at 31 March 2015
2015
Rs.
2014
Rs.
(70,763,004)
(131,800,502)
11
2,026,010
2,026,010
10
12
18
6
13
6.1
3,222,315
(30,953,418)
21,448
92,109,956
(9,200)
(38,418)
3,136,032
(12,024,835)
13,188
132,708,386
(37,050)
7,388,422
(23,310)
380,533
(4,027,088)
1,409,652
207,866,103
(5,211,075)
247,538
198,875,478
80,779,385
17,468,594
(22,055)
99,635,576
(87,628,160)
111,247,318
(132,708,386)
(33,072,811)
10.4
5
13.1.1
(1,338,117)
9,200
(82,644,266)
9,809,252
(74,163,932)
(1,737,072)
37,050
26,016,444
24,316,423
14.2
(3,304,166)
(3,304,166)
(2,446,897)
(2,446,897)
33,779,220
(11,583,014)
(740,069,781)
(706,290,561)
(728,486,766)
(740,069,781)
Note
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Net Loss before Taxation
Adjustments for :
Amortization of Leasehold Rights
Depreciation
Share of Profit of an Associate
Provision for retirement benefit obligation
Finance Costs
Dividend Income
Fair value adjustment on financial assets at the fair value through profit or loss
Loss on Disposal of Shares
Write off of Receivables
Operating Profit/(Loss) before Working Capital Changes
(Increase)/Decrease in Other Receivable
Increase/(Decrease) in Other Payable
Increase in Advances and Prepayments
Cash Generated from Operations
Finance Cost paid
Net Cash used in Operating Activities
CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
Purchase of Property, Plant and Equipments
Dividend Income
Finance to related parties
Proceeds from disposal of shares
Net Cash used in Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payment under Finance Lease Liabilities
Net Cash from Financing Activities
Net Increase/(Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at the beginning of the year
Cash and Cash Equivalents at the end of the year
15.2
15.2
37
Notes to the Financial Statements

1.
1.1 General

Kalpitiya Beach Resort PLC is a Public Limited Liability
Company incorporated and domiciled in Sri Lanka under the
Companies Act No. 07 of 2007. The ordinary shares of the
Company are listed on the Colombo Stock Exchange of Sri
Lanka. The registered office of the Company is located at No
7/5, Gregorys Road, Colombo 07.
1.2 Principal Activities and Nature of Operations

The planned principal activities of the Company are
constructing of a new resort in Kalpitiya and provision of food
and beverages, lodging, and other hospitality related activities.
However, construction activity of the resort has been delayed
as a result of lack of infrastructural development in the region
contrary to the Companys expectation on the same at the
time of the initial public offering.

38
Further the Company is currently evaluating the present

business plan and is exploring other opportunities with
potential business partners in the tourist industry to maximize
on potential investment opportunities. This process is still in a
preliminary stage.
On the 19 of June 2015 the Company called for an extra
ordinary general meeting seeking approval for shareholders
to pursue an alternative plan and action as set out in the
circular to shareholders dated 1 June 2015, to which
unanimous approval was received by the Company.
Also the Company holds an equity investment of 20.22% in
Colombo Land and Development PLC which is accounted for
as an equity investee in these financial statements.
Note 12 describe the carrying value and considerations made

as at the reporting date in relation to the said investment.
1.3 Parent Entity and Ultimate Parent Entity

The Companys parent undertaking is Citrus Leisure PLC,
which is incorporated in Sri Lanka and listed in Colombo
Stock Exchange (CSE).
1.4 Date of Authorisation for Issue

The Financial Statements of Kalpitiya Beach Resort PLC for
the period ended 31 March 2015 were authorised for issue in
accordance with the resolution of the Board of Directors on
28th August 2015.
2.
BASIS OF PREPARATION
2.1 Statement of Compliance

The Financial Statements of Kalpitiya Beach Resort PLC
comprises the Statement of Financial Position and the Income
Statement, Statement of Comprehensive Income, Statement
of Changes in Equity and Statement of Cash Flows, together
with the Accounting Policies and Notes to the Financial
Statements.

These financial statements are prepared in accordance with

the Sri Lanka Accounting Standards laid down by the Institute
of Chartered Accountants of Sri Lanka, and also in compliance
with the requirements of the Companies Act No. 07 of 2007.
2.2 Basis of measurement

The financial statements of the Company have been prepared
in accordance with Sri Lanka Accounting Standards (SLFRS
and LKAS) as issued by Institute of Chartered Accountants of
Sri Lanka.
Beach Resort PLC

>> Kalpitiya
The financial statements have been prepared on a historical

cost basis, except for the following material items in the
statement of Financial Position,
Land is measured at cost at the time of the acquisition and

subsequently measured at revaluation.
No adjustments have been made for inflationary factors in the

Financial Statements.
2.7 Changes in Accounting Policies

The accounting policies adopted are consistent with those of
the previous financial year except for SLFRS 13 Fair Value
Measurement and amendments to LKAS 1 Presentation of

SLFRS 13- Fair Value Measurement

SLFRS 13 establishes a single source of guidance under
SLFRS for all fair value measurement. SLFRS 13 does not
change when an entity is required to use fair value, but rather
provides guidance on how to measure fair value under SLFRS.
SLFRS 13 defines fair value as an exit price. As a result of the
guidance in SLFRS 13, the Company re-assessed its policies
for measuring fair values. SLFRS 13 also requires additional
disclosures. The application of SLFRS 13 has not materially
impacted the fair value measurements of the Company.
LKAS 1 Presentation of Items of Other Comprehensive

Income - Amendments to LKAS 1
The amendments to LKAS 1 introduce a grouping of items
presented in the OCI. Items that will be reclassified (recycled)
to profit and loss at a future point in time (e.g., net loss or
gain on AFS financial assets) have to be presented separately
from items that will not be reclassified (e.g., revaluation of
land and buildings). The amendments affect presentation only
and have no impact on the Companys financial position or
performance.
2.3 Comparative Information

The accounting policies have been consistently applied by
the Company and, are consistent with those used in the
previous year. Previous years figures and phrases have
been re-arranged whenever necessary to conform to current
presentation.
2.4 Functional and presentation currency

The Financial Statements are presented in Sri Lankan Rupee,
which is the Companys functional currency.
2.5 Going Concern

The Directors have made an assessment of the Companys
ability to continue as a going concern and they do not intend
either to liquidate or to cease trading and operations.

Refer Note 1.2 for the current status of the constructions of

hotel property and operations.
2.6 Materiality and Aggregation

Each material class of similar items is presented separately
in the Financial Statements. Items of a dissimilar nature or
function are presented separately unless they are immaterial.
LKAS 8 Accounting Policies, Changes in Accounting

Estimates and Errors
Company previously applied the cost model for land and
buildings. However at the end of the year, the company
39
changed its accounting policy to the revaluation model for

land and buildings.
3.

3.1

SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparations
of the financial statements are set out below. These policies
have been consistently applied to all the years presented,
unless otherwise stated.
Foreign Currency Translations
The Companys Financial Statements are presented in Sri
Lanka Rupees, which is the functional and presentation
currency of the Company. Transactions in foreign currencies
are initially recorded at the functional currency rate ruling at
the date of the transaction.
Monetary assets and liabilities denominated in foreign

currencies are retranslated at the functional currency spot
rate of exchange ruling at the reporting date.
All differences are taken in to the profit or loss.
3.2 Revenue recognition

Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue
can be reliably measured, regardless of when the payment
is being made. Revenue is measured at the fair value of the
consideration received or receivable, taking into account
contractually defined terms of payment and excluding taxes
or duty. The specific recognition criteria described below must
also be met before revenue is recognised.
40
Dividend Income
Dividend income is recognised in profit and loss on the date
the entitys right to receive payment is established, which in
the case of quoted securities is the ex-dividend date.
Other income
Other income is recognised on an accrual basis.
3.3 Expenses

All expenditure incurred in the running of the business has
been charged to income in arriving at the profit for the year.

Repairs and renewals are charged to the profit or loss in the

year in which the expenditure is incurred.
3.4 Borrowing costs

Borrowing costs are recognized as an expense in the period
in which they are incurred, except to the extent that they
are directly attributable to the acquisition, construction
or production of a qualifying asset, in which case they are
capitalized as part of the cost of that asset.
3.5 Finance income and finance costs

Finance income comprises interest income on funds invested,
dividend income, and changes in the fair value of financial
assets at fair value through profit or loss. Interest income is
recognised as it accrues in the profit or loss.

Finance costs comprise interest expense on borrowings,

unwinding of the discount on provisions, changes in the fair
value of financial assets at fair value through profit or loss.
Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset
Beach Resort PLC

>> Kalpitiya
are recognised in the profit or loss using the effective interest

method.

The interest expense component of finance lease payments

is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
When the deferred tax liability arises from the initial

recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting
profit nor taxable profit or loss
Deferred tax assets are recognised for all deductible

temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised, except:
When the deferred tax asset relating to the deductible

temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss.
Unrecognised deferred tax assets are reassessed at each

reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax

rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates 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.
3.6 Taxation

Tax expense comprises current and deferred tax. Current tax
and deferred tax are recognised in the profit or loss except to
the extent that it relates to a business combination, or items
recognised directly in equity or in other comprehensive income.

Current Tax
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted at the reporting date and
any adjustments to tax payable in respect of previous years.
Management periodically evaluates positions taken in the

tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred Tax
Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable

temporary differences, except:
41
3.7 Assets and bases of their valuation

3.7.1 Property, Plant and Equipment
3.7.1.1 Recognition and measurement

Items of Property, Plant and Equipment are measured at cost
less accumulated depreciation and accumulated impairment
losses.
3.7.1.2 Owned assets

The cost of Property, Plant and Equipment includes
expenditure that is directly attributable to the acquisition of
the asset. The cost of self-constructed assets includes the
cost of materials and direct labour, any other costs directly
attributable to bringing the asset to a working condition for
its intended use, and the costs of dismantling and removing
the items and restoring the site on which they are located,
and borrowing costs on qualifying assets for which the
commencement date for capitalisation is on or after 1 April
2011.

When parts of an item of Property, Plant and Equipment have

different useful lives, they are accounted for as separate
items (major components) of Property, Plant and Equipment.
The costs of the day-to-day servicing of Property, Plant and

Equipment are recognised in profit and loss as incurred.
3.7.1.4 De-recognition

The carrying amount of an item of Property, Plant and
Equipment is de-recognised on disposal; or when no future
economic benefits are expected from its use. Gains and losses
on de-recognition are recognised in statement of income and
gains are not classified as revenue.
3.7.1.5 Depreciation

Depreciation is recognised in the profit or loss on a straightline basis over the estimated useful lives of each part of an
item of Property, Plant and Equipment, since this most closely
reflects the expected pattern of consumption of the future
economic benefits embodied in the asset.

Assets held under finance leases are depreciated over the

shorter of the lease term and the useful lives of equivalent
owned assets unless it is reasonably certain that the
Company will have ownership by the end of the lease term.
Freehold land is not depreciated.
The estimated useful lives for the current and comparative

periods are as follows:
The assets residual values, useful lives and methods of

depreciation are reviewed at each financial year end and
adjusted prospectively, if appropriate.
3.7.1.3 Subsequent Costs

The cost of replacing a component of an item of Property,
Plant and Equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits
embodied within the part will flow to the Company and its
42
cost can be measured reliably. The carrying amount of the

replaced part is de-recognised in accordance with the derecognition policy given below.
Beach Resort PLC

>> Kalpitiya
Motor Vehicle
04 years
Computer and Equipment
04 Years
Furniture and Fittings
04 Years
Generator
05 Years
Plant and Machinery
10 Years
Depreciation of an asset begins when it is available for use

and ceases at the earlier of the dates on which the asset is
classified as held for sale or is de-recognised.
3.7.1.6 Revaluation

Land and buildings are measured at fair value less
accumulated depreciation on buildings and impairment losses
if any; recognised after the date of the revaluation. Valuations
are performed with sufficient frequency to ensure that the fair
value of a revalued asset does not differ materially from its
carrying amount.

Any revaluation surplus is recognised in other 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
statement of profit or loss, in which case the increase is
recognised in the statement of profit or loss. A revaluation
deficit is recognised in the statement of profit or loss, except
to the extent that it offsets an existing surplus on the same
asset recognised in the asset revaluation reserve.
3.7.1.7 Capital working in progress

Capital working in progress consists of cost of labour
and other direct costs associated with property, plant and
equipment being constructed by the company. Once the
assets become operational, the related costs are transferred

from capital working in progress to the appropriate asset
category and are depreciated together with the related asset.
3.7.1.8 Lease assets

The determination of whether an arrangement is, or contains,
a lease is based on the substance of the arrangement at
inception date, whether fulfilment of the arrangement is
dependent on the use of a specific asset or assets or the
arrangement conveys a right to use the asset, even if that
right is not explicitly specified in an arrangement.
3.7.1.8 Company as a lessee

Finance leases that transfer to the Company substantially all
the risks and benefits incidental to ownership of the leased
item, are capitalised at the commencement of the lease at
the fair value of the leased property or, if lower, at the present
value of the minimum lease payments. Lease payments are
apportioned between finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges are
recognised in finance costs in the statement of income.

A leased asset is depreciated over the useful life of the asset.

However, if there is no reasonable certainty that the Company
will obtain ownership by the end of the lease term, the asset
is depreciated over the shorter of the estimated useful life of
the asset and the lease term.
Operating lease payments are recognised as an operating

expense in the income statement on a straight-line basis over
the lease term.
43
3.7.2 Lease Rentals Paid in Advance

Prepaid lease rentals paid to acquire land use rights are
amortised over the lease term. Details of the lease rentals
paid in advance are given in Note 11.
3.7.3 Investment in Associates

The Companies investment in associate is accounted for
using the equity method of accounting. An associate is an
entity in which the Company has significant influence and
which is neither a subsidiary nor a joint venture.

Under the equity method, the investment in the associate is

carried at cost plus post acquisition changes in the Companys
share of net assets of the associate. Goodwill relating to an
associate is included in the carrying amount of the investment
and is not amortised. The income statement reflects the
share of the results of operations of the associate. Where
there has been a change recognized directly in the equity
of the associate, the Company recognises its share of any
changes and discloses this, when applicable, in the statement
of changes in equity. Profits and losses resulting from
transactions between the Company and the associate are
eliminated to the extent of the interest in the associate.
In the case of associates, where the reporting dates are
different to Company reporting dates, adjustments are made
for any signicant transactions or events up to 31 December
2014.
3.7.4 Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and
form an integral part of the Companys cash management are
44
included as a component of cash and cash equivalents for the

purpose of the Statement of Cash Flows.
3.7.5 Impairment of non-financial assets

The carrying amounts of the Companys non-financial assets
are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication
exists, then the assets recoverable amount is estimated. For
goodwill and intangible assets that have indefinite lives or
that are not yet available for use, the recoverable amount is
estimated at each reporting date or more frequently, if events
or changes in circumstances indicate that they might be
impaired.

The recoverable amount of an asset or cash-generating unit

is the greater of its value in use and its fair value less costs to
sell. In assessing value in use, estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. A cash-generating
unit is the smallest identifiable asset Company that generates
cash flows that largely are independent from other assets.
An impairment loss is recognised if the carrying amount of

an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in statement of
income. Impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to
reduce the carrying amount of the other assets in the unit on
a pro rata basis.
Beach Resort PLC

>> Kalpitiya
Impairment losses recognised in prior periods are assessed

at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only
to the extent that the assets carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
3.8 Financial Instruments Initial recognition and subsequent

measurement
3.8.1 Financial Assets
3.8.1.1 Initial recognition and measurement

Financial assets within the scope of LKAS 39 are classified as
financial assets at fair value through profit or loss, and loans
and receivables; The Company determines the classification
of its financial assets at initial recognition.

All financial assets are recognised initially at fair value plus

transaction costs, except in the case of financial assets
recorded at fair value through profit or loss.
Purchases or sales of financial assets that require delivery

of assets within a time frame established by regulation or
convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.
The Companys financial assets include cash and short-term

deposits, financial assets at fair value through profit or loss
and other receivables.
3.8.1.2 Subsequent measurement

The subsequent measurement of financial assets depends on
their classification as described below:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include
financial assets held for trading. Financial assets are
classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term.
Financial assets at fair value through profit and loss are

carried in the statement of financial position at fair value with
net changes in fair value recognised in finance income or
finance costs in the profit or loss.
The Company evaluates its financial assets held for trading, to

determine whether the intention to sell them in the near term
is still appropriate. When in rare circumstances the Company
is unable to trade these financial assets due to inactive
markets and managements intention to sell them in the
foreseeable future significantly changes, the Company may
elect to reclassify these financial assets. The reclassification
to loans and receivables, available-for-sale or held to maturity
depends on the nature of the asset.
Loans and receivables

Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. After initial measurement, such financial
assets are subsequently measured at amortised cost using
the effective interest rate method (EIR), less impairment.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are
45
an integral part of the EIR. The EIR amortisation is included in

finance income in the income statement. The losses arising
from impairment are recognised in the profit and loss in
finance costs for loans and in other operating expenses for
receivables.
in the estimated future cash flows, such as changes in arrears

or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Company
first assesses whether objective evidence of impairment
exists individually for financial assets that are individually
significant, or collectively for financial assets that are not
individually significant. If the Company determines that no
objective evidence of impairment exists for an individually
assessed financial asset, whether significant or not, it
includes the asset in a Company of financial assets with
similar credit risk characteristics and collectively assesses
them for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is, or continues
to be, recognised are not included in a collective assessment
of impairment.
If there is objective evidence that an impairment loss has

been incurred, the amount of the loss is measured as the
difference between the assets carrying amount and the
present value of estimated future cash flows (excluding future
expected credit losses that have not yet been incurred). The
present value of the estimated future cash flows is discounted
at the financial assets original effective interest rate. If a loan
has a variable interest rate, the discount rate for measuring
any impairment loss is the current EIR.
The carrying amount of the asset is reduced through the

use of an allowance account and the amount of the loss
is recognised in the statement of income. Interest income
continues to be accrued on the reduced carrying amount
and is accrued using the rate of interest used to discount

A financial asset (or, where applicable, a part of a financial
asset or part of a Company of similar financial assets) is derecognised when:

The rights to receive cash flows from the asset have

expired, or
The Company has transferred substantially all the risks

and rewards of the assets.
3.8.1.4 Impairment of financial assets

The Company assesses, at each reporting date, whether there
is any objective evidence that a financial asset or a Company
of financial assets is impaired. A financial asset or a Company
of financial assets is deemed to be impaired if, and only if,
there is objective evidence of impairment as a result of one
or more events that has occurred after the initial recognition
of the asset (an incurred loss event) and that loss event has
an impact on the estimated future cash flows of the financial
asset or the Company of financial assets that can be reliably
estimated. Evidence of impairment may include indications
that the debtors or a Company of debtors is experiencing
significant financial difficulty, default or delinquency in
interest or principal payments, the probability that they will
enter bankruptcy or other financial reorganisation and when
observable data indicate that there is a measurable decrease
46
Beach Resort PLC

>> Kalpitiya
the future cash flows for the purpose of measuring the

impairment loss. The interest income is recorded as part
of finance income in the income statement. Loans together
with the associated allowance are written off when there is
no realistic prospect of future recovery and all collateral has
been realised or has been transferred to the Company. If, in
a subsequent year, the amount of the estimated impairment
loss increases or decreases because of an event occurring
after the impairment was recognised, the previously
recognised impairment loss is increased or reduced by
adjusting the allowance account. If a future write-off is later
recovered, the recovery is credited to finance costs in the
statement of income.
3.8.2 Financial Liabilities
3.8.2.1 Initial recognition and measurement

Financial liabilities within the scope of LKAS 39 are classified
as loans and borrowings and other financial liabilities.
The Company determines the classification of its financial
liabilities at initial recognition.

All financial liabilities are recognised initially at fair value

plus, in the case of loans and borrowings, directly attributable
transaction costs.
The Companys financial liabilities include trade and other

payables, bank overdrafts, loans and borrowings, financial
guarantee contracts.
3.8.2.2 Subsequent measurement

The measurement of financial liabilities depends on their
classification as described below:
Loans and borrowings

After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the statement
of income when the liabilities are de-recognised as well as
through the EIR amortisation process.
Amortised cost is calculated by taking into account any

discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included in
finance costs in the statement of income.

A financial liability is de-recognised 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 the de-recognition of
the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in
the income statement.
3.8.3 Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net
amount reported in the consolidated statement of financial
position if, and only if:

There is a currently enforceable legal right to offset the

recognised amounts
and
47
There is an intention to settle on a net basis, or to realise

the assets and settle the liabilities simultaneously
3.8.4 Fair value of financial instruments

The fair value of financial instruments that are traded in active
markets at each reporting date is determined by reference to
quoted market prices. without any deduction for transaction
costs.

For financial instruments not traded in an active market,

the fair value is determined using appropriate valuation
techniques. Such techniques may include:
Using recent arms length market transactions
Reference to the current fair value of another instrument

that is substantially the same
A discounted cash flow analysis or other valuation models.
An analysis of fair values of financial instruments and further

details as to how they are measured are provided in Note
14.3.
3.9

48
Fair Value Measurement

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:
01. In the principal market for the asset or liability, or
02. In the absence of a principal market, in the most

advantageous market for the asset or liability.
The principal or the most advantageous market must be

accessible by the Company.
The fair value of an asset or a liability is measured using the

assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest. A fair value measurement of a
non-financial asset takes into account a market participants
ability to generate economic benefits by using the asset in
its highest and best use or by selling it to another market
participant that would use the asset in its highest and best
use. The Company uses various valuation methodologies that
are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the use of
unobservable inputs. The use of observable and unobservable
inputs and their significance in measuring fair value are
reflected in our fair value hierarchy assessment.
Level 1 : Inputs include quoted prices for identical

instruments and are the most observable.
Level 2: Inputs include quoted prices for similar instruments

and observable inputs such as interest rates, currency
exchange rates, and yield curves.
Level 3: Inputs include data not observable in the market and

reflect management judgment about the assumptions market
participants would use in pricing the instruments.
Beach Resort PLC

>> Kalpitiya
We review the inputs to the fair value measurements to

ensure they are appropriately categorized within the fair value
hierarchy. Transfers into and transfers out of the hierarchy
levels are recognized as if they had taken place at the end of
the reporting period.
3.10 Provisions

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
When the Company expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a separate
asset, but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the
income statement net of any reimbursement.
3.10.1 Employee Benefits
3.10.1.1 Defined Contribution Plans

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

The Company contributes 12% and 3% of gross emoluments

to employees as Employees Provident Fund and Employees
Trust Fund contribution respectively.
3.10.1.2 Defined Benefit Plans

A defined benefit plan is a post-employment benefit plan.
The defined benefit is calculated by independent actuaries
using Projected Unit Credit (PUC) method as recommended
by LKAS 19 on Employee Benefits. The present value of the
defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates that are
denominated in the currency in which the benefits will be
paid, and that have terms to maturity approximating to the
terms of the related liability. Any actuarial gains or losses
arising are recognized in other comprehensive income.

The present value of the defined benefit obligation depends

on a number of factors that are determined on an actuarial
basis using a number of assumptions. Key assumptions used
in determining the defined retirement benefit obligations
are given in Note 18. Any changes in these assumptions will
impact the carrying amount of defined benefit obligations.
Provision has been made for retirement gratuities from the

first year of service for all employees, in conformity with
LKAS 19 on Employee Benefits.
The liability is not externally funded.
3.10.1.3 Short term benefits

Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided.
49
3.10.2 Stated Capital

Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
beyond the control of the Company. Such changes are

reflected in the assumptions when they occur.

Deferred Taxation
Deferred tax assets are recognised for all unused tax losses
to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant
management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits together
with future tax planning strategies.
Employee Benefit Liability Gratuity

The cost of the defined benefit plan gratuity, is determine
using an actuarial valuation. Actuarial valuation involve
making assumptions about inter alia discount rates, future
salary increases, remaining working life of employees
and mortality rates. Due to the long term nature of these
obligations such estimates are subject to significant
uncertainty. Description of employee benefits is given in
Note 18.
Valuation of Property, Plant and Equipment

The company measures land at revalued amounts
with changes in fair value being recognized in other
comprehensive income and in the statement of equity.
The company engaged independent valuation experts to
determine fair value of land.
The valuer has used valuation techniques such as market

values and discounted cash flow method where there was
lack of comparable market data available based on the nature
of the property.
3.11 Earnings Per Share

The Company presents basic earnings per share (EPS) for
its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period.
3.12 Cash Flow Statement

The Cash Flow Statement has been prepared using the
indirect method.

Interest paid is classified as an operating cash flow. Dividend

and interest income are classified as cash flows from
investing activities.
Dividends paid are classified as financing cash flows and

Dividends received are classified as investing cash flows.
3.13 Use of Estimates and judgements

The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and Liabilities within the next
financial year, are described below. The Company based its
assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances
and assumptions about future developments, however, may
change due to market changes or circumstances arising
50
Beach Resort PLC

>> Kalpitiya
4.

STANDARDS ISSUED BUT NOT YET EFFECTIVE

The following SLFRS have been issued by the Institute of
Chartered Accountants of Sri Lanka that have an effective
date in the future and have not been applied in preparing
these Financial Statements. Those SLFRS will have an effect
on the accounting policies currently adopted by the Company
and may have an impact on the future Financial Statements.
(i)
SLFRS 9 -Financial Instruments: Classification and

Measurement
This standard will replace LKAS 39, Financial instruments,
Recognitions and Measurement. The improvements
introduced by SLFRS 9 includes a logical model for
classification and measurement, a single, forward- looking
expected loss impairments model and a substantially
reformed approach to hedge accounting. SLFRS 9 will
become effective on 1 January 2018.The impact on the
implementation of the above Standard has been
quantified yet.
(ii)

SLFRS 15 -Revenue from Contracts with Customers

The objective of this Standard is to establish the principles
that an entity shall apply to report useful information to users
of financial about the nature, amount, timing and uncertainty
of revenue and cash flows arising from a contract with a
customer. SLFRS 15 will become effective on 1 January 2018.
The impact on the implementation of the above Standard has
been quantified yet.
In addition to the above, SLFRS 14 -Regulatory Deferral

Accounts will also be effective for the annual periods
commencing on or after 01 January 2016. The Company will
adopt these standards when they become effective. Pending
the completion of detailed review, the financial impact is not
reasonably estimable as at the date of publication of these
51
5.
6.
6.1
6.2
7.
52
OTHER INCOME
Sundry Income
Dividend Income
Profit on disposal of shares
FINANCE COSTS AND INCOME

Finance Income
Net Gain on financial assets at the fair value through profit or loss
Finance Cost
Interest Expenses on Bank Overdrafts
Interest Expenses on Finance Leases
Loss on Disposal of Shares
Net loss on financial assets at the fair value through profit or loss
PROFIT BEFORE TAX

Stated after Charging
Included in General and Administration Expenses
Depreciation
Amortization of Prepaid Operating Lease
Auditor's Remuneration
2015
Rs.
2014
Rs.
405,503
9,200
414,703
106,399
37,050
22,601
166,050
2015
Rs.
2014
Rs.
38,418
2015
Rs.
2014
Rs.
91,299,372
787,274
23,310
92,109,956
124,198,100
1,121,863
7,388,422
132,708,386
2015
Rs.
2014
Rs.
3,222,315
2,026,010
270,354
3,136,032
2,026,010
165,000
Beach Resort PLC

>> Kalpitiya
8.
8.1
8.2

2015
Rs.
2014
Rs.
2015
Rs.
2014
Rs.
(70,763,004)
97,760,261
(365,439)
(30,953,418)
(9,200)
(4,330,799)
(132,180,234)
6,238,832
(647,659)
(12,024,835)
(37,050)
(138,650,946)
Other Sources of Income

Interest Income
Interest Claimed During the year
Total Taxable Income
Income Tax @ 28%

Current Income Tax Charge
INCOME TAX EXPENSE

Current Income Tax Charge (Note 8.1)
A reconciliation between income tax expense and the product of accounting profit multiplied by
the statutory tax rate is as follows;
Accounting Profit before Income Tax
Disallowed Items
Allowed Items
Share of Associate
Dividend Income
Taxable Loss from Business
Deferred Tax
The company has tax losses amounting to Rs.376,029,015/- (2014- Rs.280,398,845/-) that is available indefinitely for offsetting against
future taxable profit of the company. However,Company has not recognised a deferred tax asset amounting to Rs.105,288,124/- (2014 Rs.78,511677/-) on carry forward tax losses, due to the Company being unable to assess with reasonable certainty that taxable profits
would be available to recover the asset in the foreseeable future.
53
9.

LOSS PER SHARE

Basic loss per share is calculated by dividing the net loss for the year attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
The following reflects the income and share data used in the basic loss per share computations.
9.1
9.2
10.
2015
Rs.
2014
Rs.
Amount used as the Numerator :

Loss attributable to Ordinary Shareholders for Basic Loss per Share
(70,763,004)
(131,800,502)
Number of Ordinary Shares used as the Denominator

Weighted Average Number of Ordinary Shares in issue
161,200,010
161,200,010
Additions/
Transfers
Rs.
Transfer/
Disposals
Rs.
Revaluation
178,015,310
278,500
833,120
885,272
28,500
322,178
180,362,880
16,984,690
16,984,690
195,000,000
278,500
833,120
885,272
28,500
322,178
197,347,570
11,077,968
11,077,968
191,440,848
16,984,690
208,425,538
PROPERTY, PLANT AND EQUIPMENT
10.1 Gross Carrying Amounts

At Cost or Valuation
Freehold Land
Motor Vehicles
Plant and Machinery
Generator
Assets on Finance Lease
Motor Vehicles
Total Value of Assets
54
Balance
As at 31.03.2015
Rs.
Rs.
Balance
As at 01.04.2014
Rs.
Beach Resort PLC

>> Kalpitiya
In the Course of Construction

Building Work in Progress
Total Gross Carrying Amount

Balance
As at
01.04.2014
Rs.
Incurred during
the year
Transfer/
Disposals
Rs.
Rs.
Balance
As at
31.03.2015
Rs.
26,808,054
218,248,902
1,338,117
1,338,117
(9,750,000)
(9,750,000)
18,396,170
226,821,708
* Building Work in Progress includes salaries of project coordinator and other initial cost of project.
10.2 Depreciation
At Cost
Motor Vehicles
Plant and Machinery
Generator
Assets on Finance Lease

Motor Vehicles
Total Depreciation
Balance
As at
01.04.2014
Rs.
Charge for
the year
Transfer/
Disposals
Rs.
Rs.
Balance
As at
31.03.2015
Rs.
208,728
281,399
189,956
14,250
208,512
902,845
69,772
208,280
88,527
5,700
80,544
452,823
278,500
489,679
278,483
19,950
289,056
1,355,668
7,385,312
8,288,157
2,769,492
3,222,315
10,154,804
11,510,472
55
10.3 Net Book Value of Assets

At Cost or Valuation
Freehold Land
Motor Vehicles
Plant and Machinery
Generator
Assets On Finance Lease

Motor Vehicles
In the Course of Construction

Buildings Work In Progress
Total Carrying Amount of Property, Plant and Equipment
2015
Rs.
2014
Rs.
195,000,000
343,441
606,789
8,550
33,122
195,991,902
178,015,310
69,772
551,721
695,316
14,250
113,666
179,460,035
923,164
923,164
3,692,656
3,692,656
18,396,170
18,396,170
26,808,054
26,808,054
215,311,236
209,960,745
10.4 During the year, the company acquired Property, Plant and Equipment to the aggregate value of Rs.1,338,117/(2014- Rs.1,737,072/-). Cash payments amounting is Rs.1,338,117/- (2014-Rs.1,268,831/-) were made during the year for constructing
Property, Plant and Equipment.
56
Beach Resort PLC

>> Kalpitiya
10.5 Information on the Freehold Land of the Company

Location
Ownership
Extent
Kalpitiya
Freehold
6,932 Perches
10.6 The freehold land belonging to Kalpitiya Beach Resorts PLC, situated at Santhoduwa Village, Adikarai Patty, Kalpitiya was revalued
as at 31 March 2015 by M/S Ariyathilaka & Co. (Private) Limited. The results of such revaluation were incorporated in these financial
statements from its effective date which is 31 March 2015. Such assets were valued based on market comparable method. The surplus
arising from the revaluation was transferred to the revaluation reserve.
10.7 The following property is revalued and recorded under freehold land. Fair Value measurement disclosure for revalued land based on
unobservable input as follows.

(A) Quoted Price (unadjusted) in active markets for identical assets or liabilities (Level -1).

(B) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is derived from prises) (Level - 2)
(C) Input for the assets or liability that are not based on observable market data (that is, unobservable inputs) (Level -3).
Location
Kalpitiya
Extent
6,932 Perches
Valuation Date
Valuation
Details
Significant unobservable
input: price per perch/
acre/range
Fair Value measurement

using Significant
unobservable inputs
(Level 3)
31-Mar-15
Market based
evidence
Rs. 4,500,000/- per acre
195,000,000
Significant increases (decreases) in estimated price per perch in isolation would result in a significantly higher (lower) fair value.
57
11.
LEASE RENTALS PAID IN ADVANCE

As at 1 April
Amortisation for the year
As at 31 March
2015
Rs.
2014
Rs.
194,496,970
(2,026,010)
192,470,959
196,522,980
(2,026,010)
194,496,970
The above balance represents leasehold right obtained from the Parent Company, Citrus Leisure PLC for a period of 99 years. The
Company expects to amortise the leasehold right over 99 years.
Details of lease rentals paid in advance are given below:

Property: Sanathoduwa, Kalpitiya, Puttalam
Land Extent (In Perches): 5,680
Lease Period: 99 Years from 14 February 2011
12. INVESTMENT IN ASSOCIATES

Cost of investment in Associate

The Company has 20.22% interest in Colombo Land & Development Company PLC which is involved in the business of leasing out
investment property under operating leases and also involved in development of investment property. The cost of investment is
Rs.1,303,303,398/-.
58
Beach Resort PLC

>> Kalpitiya
2014
2015
Rs.
2014
Rs.
40,413,200
1,367,135,354
1,335,326,753
2015
Rs.
2014
Rs.
1,335,326,753
30,953,418
855,183
1,367,135,354
1,323,301,918
12,404,567
(379,732)
1,335,326,753
Number of Shares
2015
12.1 Quoted
Colombo Land & Development Company PLC

The movement in carrying value of Investments as follows:
As at the beginning of the year

Share of Profit of Associate
Share of other comprehensive income/(loss) of Associate
At the end of the year

40,413,200
The following table illustrates the summarised financial information of Colombo Land & Development Company PLC
2015
Rs.
2014
Rs.
Statement of Financial Position

Current Assets
Non- Current Assets
Current Liabilities
Non- Current Liabilities
Total Equity
71,064,465
5,548,606,672
924,454,508
1,782,042,035
2,913,174,594
64,221,253
4,511,633,024
312,776,727
1,507,215,527
2,755,862,023
Attributable to:
Equity holders of Parent
Non Controlling Interest
Total Equity
2,913,951,117
(776,523)
2,913,174,594
2,756,625,023
(763,000)
2,755,862,023
59
12. INVESTMENT IN ASSOCIATES (Contd.)

2015
Rs.
2014
Rs.
Income Statement
Revenue
149,680,915
125,470,000
Profit before Income Tax

Income Tax
Profit after Income Tax
222,307,385
(69,224,210)
153,083,175
118,322,869
(56,444,188)
61,878,681
Other Comprehensive Income/(Expenses)

Total comprehensive Income
4,229,396
157,312,571
(1,878,000)
60,000,681
Market value of the investment as at 31 March,
2015
Rs.
2014
Rs.
Market Value of a Share
24.60
35.60
994,164,720
1,438,709,920
Market Value of the Investment

60
The board of directors believes that the reduction of the market value below the carrying value of the investment is temporally in
nature and does not reflect a permanent diminution in value. Accordingly, no impairment loss has been recognized as at reporting date.
Beach Resort PLC

>> Kalpitiya
13. OTHER RECEIVABLES

13.1 Current
Amount Due from Related Parties ( Note 13.1.1)
Other Receivables
Dividend Receivable
Parent Company
Affiliate Company
Affiliate Company
Affiliate Company
Affiliate Company
Affiliate Company
Affiliate Company
2014
Rs.
239,050,536
70,606
9,200
239,130,342
437,493,980
132,995
437,626,975
Current
Rs.
2015
Non-Current
Rs.
Current
Rs.
2014
Non-Current
Rs.
238,930,196
71,988
48,352
239,050,536
2,760,540
79,883,726
82,644,266
329,030,688
71,988
60,785
48,352
187,900
11,060,540
97,033,727
437,493,980
Relationship
13.1.1 Amount Due From Related Parties

Citrus Leisure PLC
Citrus Villas Kalpitiya Limited
Passikudah Beach Resorts Limited
Citrus Equity Limited
Citrus Vacations Limited
Hikkaduwa Beach Resort PLC
Waskaduwa Beach Resort PLC
2015
Rs.
61
13. OTHER RECEIVABLES (Contd.)

Terms and conditions of Non current Related Party Receivables

*These receivables are not secured.

**Interest Rate - AWPLR (6 months) + 1.5 commencing from 01 April 2015

***Repayment Period - 120 Monthly instalment including 3 Years grace period.

14.
Citrus Leisure PLC settled Rs.208 Million out of Rs.239 Million payable to be Company subsequently.
OTHER FINANCIAL ASSETS AND LIABILITIES

Other Financial Assets
Investment in quoted equity securities (14.1)
Other Financial Liabilities
Current Interest -bearing loans and borrowings
Obligations under finance leases (Note 14.2)
Bank Overdraft (Note 15.2)
Non-Current Interest -bearing loans and borrowings
Obligations under finance leases (Note 14.2)
62
2015
Rs.
2014
Rs.
579,600
579,600
10,350,434
10,350,434
2,911,199
706,312,597
709,223,796
1,027,360
740,135,791
741,163,151
746,037
746,037
709,969,833
5,934,042
5,934,042
747,097,194
Beach Resort PLC

>> Kalpitiya
No of Shares
14.1 Investments in Quoted Investments

Asian Hotels and Properties PLC
Royal Ceramics Lanka PLC
14.2 Finance Lease

Gross Liability
Finance Charges Allocated to future periods
Net Liability
Current
Non- Current
2015
Market Value
Rs.
2014
Market Value
Rs.
540,960
9,809,474
10,350,434
2015
2014
9,200
-
9,200
123,698
579,600
579,600
Balance
As at 01.04.2014
Rs.
New Leases
Obtained
Rs.
Repayments
8,176,880
(1,215,478)
6,961,402
(4,091,440)
787,274
(3,304,166)
4,085,440
(428,204)
3,657,236
2015
Rs.
2014
Rs.
2,911,199
746,037
3,657,236
1,027,360
5,934,042
6,961,402
Balance
As at 31.03.2015
Rs.
Rs.
63
14 OTHER FINANCIAL ASSETS AND LIABILITIES (Contd.)

14.3 Fair Values Hierarchy

The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuations
techniques:

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.
As at March 31, 2015,the company held the following financial assets carried at fair value in the financial positions:
2015
Rs.
Level 1
Rs.
Level 2
Rs.
Level 3
Rs.
579,600
579,600
2014
Rs.
Level 1
Rs.
Level 2
Rs.
Level 3
Rs.
10,350,434
10,350,434
Assets Measured at Fair Value

Investments in Quoted shares
Assets Measured at Fair Value

Investments in Quoted shares

During the reporting year ended March 31, 2015, there were no transfers between Level 1 and Level 2 fair value measurements.
Fair Value of Financial Assets and Liabilities not Carried at Fair Value

64
For financial assets and financial liabilities that have a short term maturity (original maturities less than a year), it is assumed that the
carrying amounts approximate their fair values.
Beach Resort PLC

>> Kalpitiya
15.
15.2 Unfavourable Cash and Cash Equivalent Balances

Bank Overdrafts
Total Cash and Cash Equivalents
2015
Number
17.
STATED CAPITAL
Fully Paid Ordinary Shares
22,036
66,010
(706,312,597)
(706,290,561)
(740,135,791)
(740,069,781)
161,200,010
Rs.
1,718,679,050
2014
Number
Rs.
161,200,010
1,718,679,050
2015
Rs.
2014
Rs.
16,984,690
16,984,690
REVALUATION RESERVE
On: Property, Plant and Equipment
As at 1 April
Revaluation surplus during the year
As at 31 March
2014
Rs.
CASH AND CASH EQUIVALENTS

Components of Cash and Cash Equivalents
15.1 Favourable Cash and Cash Equivalent Balances

Cash and Bank Balances
16.
2015
Rs.
The above revaluation surplus consists of net surplus resulting from the revaluation of property plant and equipment as described in
note 10.1.
65
18.
RETIREMENT BENEFIT OBLIGATIONS

Balance as at 01 April
Current Service Cost
Interest Cost
Actuarial (Gain)/ Loss
Balance as at 31 March
2015
Rs.
2014
Rs.
34,208
18,027
3,421
16,452
72,108
17,854
11,403
1,785
3,166
34,208
The defined benefit obligation of the Group is based on the Messers. Actuarial and Management Consultants (Private) Limited,
actuaries. Appropriate and compatible assumptions were used in determining the cost of defined benefits.
The principle assumptions used were as follows,

Assumptions regarding the future mortality are based on a 67/70 mortality table, issued by the Institute of Actuaries, London.
Discount Rate
Future Salary Increment Rate
Retirement Age
Expected Future Salaries
1% increase
1% decrease
Rs.
Rs.
18.1 Sensitivity of the principal assumptions used
Change in Present Value of Defined Benefit Obligation
75,514
18.2 Distributions of Employee Benefit Obligations Over Future Working Lifetime

Beyond 5 Years
66
(68,925)
2015
2014
10%
9%
55
10%
9%
55
Discount Rate
1% increase
1% decrease
Rs.
Rs.
(68,981)
75,512
2015
Rs.
2014
Rs.
72,108
34,208
Beach Resort PLC

>> Kalpitiya
19.
OTHER PAYABLES
Amounts Due To Related Parties ( Note 19.1)
Accrued Interest
Other Payable
2015
Rs.
2014
Rs.
17,644,034
4,458,486
279,198
22,381,719
17,518,241
5,616,067
23,134,308
2015
Rs.
2014
Rs.
518,241
17,000,000
125,793
17,644,034
518,241
17,000,000
17,518,241
Relationship
19.1 Amounts Due To Related Parties

Citrus Aqua Limited
Divasa Equity (Private) Limited
Waskaduwa Beach Resort PLC
Affiliate Company
Affiliate Company
Affiliate Company
20. COMMITMENTS AND CONTINGENCIES

The Company does not have significant capital commitments and contingencies at the end of the reporting period.
21. ASSETS PLEDGED

The following asset have been pledged as securities as at reporting date.
Carrying Amount Pledged
2015
2014
Rs.
Rs.
Nature of Assets Pledged
Quoted Shares amounting to
40,338,600 invested in Colombo
Land & Development Company PLC
1,367,135,354 1,335,326,753
Included
Under
Investments in
associates
67
22. EVENTS OCCURRING AFTER THE REPORTING DATE

There have been no material events occurring after the reporting date that require adjustments or disclosure in the Financial
Statements.
23. RELATED PARTY DISCLOSURE

Details of significant related party disclosures are as follows.
23.1 Transactions with the parent and related entities
Nature of Transaction
Expenses Incurred
Expenses Incurred on Behalf of
Others
Fund Transferred to
Fund received from
Included in
Trade and Other Receivables
Trade and Other Payables
Parent Company
2015
2014
Rs.
Rs.
Affiliate Companies
2015
2014
Rs.
Rs.
Total
2015
Rs.
2014
Rs.
329,030,688
(1,933,883)
-
384,948,532
(1,217,844)
-
90,945,051
(125,794)
9,750,000
105,054,971
(1,110,154)
-
419,975,739
(2,059,677)
9,750,000
490,003,503
(2,327,998)
-
(88,166,609)
238,930,196
1,000,000
(55,700,000)
329,030,688
8,000,000
(43,448,685)
65,120,572
66,899,120
(79,898,886)
90,945,051
8,000,000
(131,615,294)
304,050,768
67,899,120
(135,598,886)
419,975,739
238,930,196
238,930,196
329,030,688
329,030,688
82,764,606
(17,644,034)
65,120,572
108,463,292
(17,518,241)
90,945,051
321,694,802
(17,644,034)
304,050,768
437,493,980
(17,518,241)
419,975,739
* Transactions with Hikkaduwa Beach Resort PLC, Waskaduwa Beach Resort PLC, Citrus Vacations Limited, Citrus Aqua Limited,
Passikudah Beach Resort Limited, Citrus Villas Kalpitya Limited,Citrus Equity Limited, and Divasa Equity (Pvt) Ltd are given above under
details of related party transactions with affiliates.
68
Beach Resort PLC

>> Kalpitiya
Terms and conditions of Non current Related Party Receivables

*These receivables are not secured.

**Interest Rate - AWPLR (6 months) + 1.5 commencing from 01 April 2015

***Repayment Period - 120 Monthly instalment including 3 Years grace period.
23.2 Compensation to Key Management Personnel

The Key Management Personnel of the Company are the members of its Board of Directors and that of its parent.

Other Transactions
No material transactions have taken place during the year with the Key Management Personnel of the Company.
23.3 Other Related Parties Disclosures

Transactions with the parties/entities in which Key Management Personnel or their Close Family Members have control or joint control
are given below:
Nature of Transactions
Financial Facilities Settlements
George Steuart Finance PLC*

2014
2015
Rs.
Rs.
(6,961,402)
3,304,166
(3,657,236)
(13,147,738)
6,186,336
(6,961,402)
*Included in Finance Lease Obligations.
Key Management Personnel related to the Company exited from George Steuart Finance PLC on 24 September 2014 through the
capital market. Therefore George Steuart Finance PLC is not considered as a related party to the Company as of 31 March 2015.
69
24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

24.1 Risk Management Framework

The Companys principal financial liabilities comprise Interest Bearing loans and borrowings and other payables. The main purpose of
these financial liabilities is to finance the companys operations and to provide guarantees to support its operations. The Company has
other receivables and cash and cash equivalents that arrive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk.
Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Companys receivables from customers.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Companys approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Companys reputation.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Companys income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimizing the return.
70
Beach Resort PLC

>> Kalpitiya
Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and
borrowings affected. With all other variables held constant, the Companys profit before tax is affected through the impact on floating
rate borrowings as follows:
Increase/decrease
in basis points
Effect on profit
before tax
2015
+50
-50
(3,286,777)
3,130,264
2014
+50
-50
(4,471,132)
4,258,221
71
Share Information
Ordinary Shareholders
There were 1,536 registered shareholders as at 31st March 2015, distributed as follows.
Shareholders Categorized Summary Report As at 31St March 2015
From
1
1,001
10,001
100,001
Over 1,000,000
Total
To
1,000
10,000
100,000
1,000,000
No of Holders
741
536
216
37
6
1,536
No of Shares
282,163
2,322,033
7,039,040
11,775,446
139,781,328
161,200,010
%
0.18
1.44
4.37
7.30
86.71
100.00
No of Holders
1,440
86
10
0
1,536
No of Shares
27,580,746
133,523,209
96,055
0
161,200,010
%
17.11
82.83
0.06
0.00
100.00
Categories of Share Holder

Category Shareholders
Local Individuals
Local Institutions
Foreign Individuals
Foreign Institutions
Total
The percentage of issued shares held by the public as at 31st March 2015 was 27.82% held by 1,527 shareholders.
Share Prices for the year
Market prices per share
Highest during the year
Lowest during the year
As at end of the year
72
As at 31.3.2015
Rs.6.30
(09.05.2014)
As at 31.3.2014
Rs.8.80
(08.05.2013)
Rs.2.80
(31.03.2015)
Rs.4.90
(09.09.2013)
Rs.2.90
Rs.5.70
Beach Resort PLC

>> Kalpitiya
Top 20 Shareholders of the Company

Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Citrus Leisure Plc

Seylan Bank Plc / Capital Trust Holdings (Pvt) Ltd
Mrs K M Goonewardene
Mr G R W De Soysa
Mr T G Thoradeniya
Mr H A D A Gunasekera
Admiral W K J Karannagoda
Ms M R H Galappatti
Mr H A K N Priyadharshana
Seylan Bank Plc/Ravindra Erle Rambukwella
Pan Asia Banking Corporation Plc / U H Dharmadasa
Mr E P A Cooray
Pan Asia Banking Corporation Plc / R E Rambukwelle
Mr Rambukwelle
Mr W V Jagath Pushpa Kumara
Mr S Srikanth
Mr P S Weerasekera
Seylan Bank Plc / Padmesh Sajjeewa Weerasekera
People's Leasing & Finance Plc/Mr W M S Banda
Mr W M S Banda
Dee Sanda Holdings Private Limited
Mr M R Badurdeen
Others
Total
No of Shares
as at 31.03.2015
111,653,901
16,203,175
4,072,655
3,500,000
3,182,346
1,169,251
1,000,000
636,460
582,300
554,815
500,452
500,001
500,001
500,000
500,000
425,000
400,300
367,330
366,281
350,490
146,964,758
14,235,252
161,200,010
No of Shares
% as at 31.03.2014
69.26
10.05
2.53
2.17
1.97
0.73
0.62
0.40
0.36
0.34
0.31
0.31
0.31
0.31
0.31
0.26
0.25
0.23
0.23
0.22
91.17
8.83
100.00
111,653,901
3,472,991
4,072,655
3,500,000
2,823,595
1,000,000
636,460
554,815
500,452
500,001
684,001
500,000
500,000
425,000
400,300
400,000
490,537
350,490
132,465,198
28,734,812
161,200,010
%
69.26
2.15
2.53
2.17
1.75
0.62
0.40
0.34
0.31
0.31
0.42
0.31
0.31
0.26
0.25
0.25
0.30
0.22
82.16
17.84
100.00
73
Share Information
Directors & CEOs Shareholding

Directors
Mr. E P A Cooray
Mr. S D De Mel
Mr. R Seneviratne
Mr. D S Jayaweera
Ms. V S F Amunugama
Mr. S A Ameresekere
Mr. P C B Talwatte
74
No of Shares
as at 31.03.2015
500,001
23,800
10,000
-
No of Shares
% as at 31.03.2014
0.31
500,001
0.02
23,800
0.01
10,000
-
%
0.31
0.02
0.01
-
Beach Resort PLC

>> Kalpitiya
Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of
Kalpitiya Beach Resort PLC will be held at Sri Sambuddha Jayanthi
Mandiraya, 6th Floor Auditorium, No. 32, Sri Sambuddha Jayanthie
Mawatha, Colombo 05 on 30th September 2015 at 9.45 am for the
following purposes:
Notes:
i)
A shareholder entitled to attend and vote at the Meeting is
entitled to appoint a Proxy who need not be a shareholder, to
attend instead of him/her. A Proxy may vote on a poll (and join
in demanding a poll) but noted a show of hands.
1.
ii)
A Form of Proxy is enclosed in this Report.
iii)
The completed Form of Proxy should be deposited at the

Office of the Secretaries; 3/17, Kynsey Road, Colombo 8, Thirty
Six (36) hours before the time of the Meeting.
To receive and consider the Annual Report of the Board of

Directors on the affairs of the Company and the Financial
Statements for the year ended 31st March 2015, together with
the Report of the Auditors thereon.
2.
To re-elect Mr. R. Seneviratne who retires by rotation in terms

of Articles 88 of the Articles of Association, as a Director of
the Company.
3.
To re-appoint Messrs Ernst & Young, Chartered Accountants,

as Auditors of the Company and to authorize the Directors to
determine their remuneration.
4.
To authorize the Directors to determine and make Donations

to Charities


Secretaries
Colombo
28 August 2015
75
Notes
76
Beach Resort PLC

>> Kalpitiya
77
Notes
78
Beach Resort PLC

>> Kalpitiya
Form of Proxy
*I/We ............................................................................................................................................................................................................................................ of
............................................................................................................................................................................................................................................... being
*a Shareholder / Shareholders of Kalpitiya Beach Resort PLC, do hereby appoint ................................................................................................
............................................................................................... (holder of NIC No. .................................................................................of or failing *him/her
Mr. E P A Cooray
Mr. D S Jayaweera
Mr. R Seneviratne
Ms. V S F Amunugama
Mr. S D De Mel
Mr. S A Ameresekere
failing him*
failing him*
failing him*
failing her*
failing him*
failing him*
of Colombo
as *my/our proxy to represent *me/us to speak and to vote for *me/us on *my/our behalf at the Fourth Annual General Meeting
of the Company to be held at Sri Sambuddha Jayanthie Mandiraya, 6th Floor Auditorium, No. 32, Sri Sambuddha Jayanthie
Mawatha, Colombo 05 on 30th September 2015 at 9.45 am and any adjournment thereof and at every poll which may be taken in
consequence thereof.

1)
2)
3)
4)
FOR AGAINST
To receive and consider the Annual Report of the Board of Directors on the affairs of the Company and
the Financial Statements for the year ended 31st March 2015, together with the Report of the Auditors
thereon.
To re-elect Mr. R Seneviratne who retires by rotation in terms of Articles 88 of the Articles of Association
as a Director of the Company.
To re-appoint Messrs Ernst & Young, Chartered Accountants, as Auditors of the Company and to
authorize the Directors to determine their remuneration.
To authorize the Directors to determine and make Donations to Charities
Signed this day of . 2015

.....................................
Signature of shareholder/s
1.
2.
*Please delete the inappropriate words.

Instructions as to completion are noted on the reverse hereof.
79
INSTRUCTIONS AS TO COMPLETION
80
1.
Kindly perfect the Form of Proxy by filling in legibly your full

name and address, signing in the space provided and filling in
the date of signature.
2.
If you wish to appoint a person other than the Chairman or

a Director of the Company as your Proxy, please insert the
relevant details in the space provided (above the names of the
Board of Directors) on the Proxy Form.
3.
If the Form of Proxy is signed by an Attorney, the relative

Power of Attorney should accompany the Form of Proxy for
registration if such Power of Attorney has not already been
registered with the Company.
4.
If the appointer is a Company / Incorporated body this

Form must be executed in accordance with the Articles of
Association / Statute.
5.
The completed Form of Proxy should be deposited at the Office

of the Secretaries; 3/17, Kynsey Road, Colombo 7 not later
than Thirty Six (36) hours before the time appointed for the
meeting.
Name of Company
PB 4367
Legal Form
Public Quoted Company with limited liability
Incorporated in Sri Lanka.
CONTENTS >>
Chairmans Message 2
Board of Directors 7
Annual Report of the Board of Directors on the
Affairs of the Company 10
Statement of Directors Responsibility 14
Corporate Governance 15
Audit Committee Report 31
Independent Auditors Report 32
Statement of Profit or Loss and Other
Comperhensive Income 34
Registered Office
No: 7/5, Gregory's Road,
Colombo 07.
Telephone : 0115 755 055
Fax : 0115 470 000
E-mail : info@citrusleisure.com
Website : www.citrusleisure.com
Board of Directors
Mr. D S Jayaweera
Ms. V S F Amunugama
Mr. S A Ameresekere
Mr. R Seneviratne
Mr. S D De Mel
Statement of Financial Position 35

Statement of Changes in Equity 36
Cash Flow Statement 37
Notes to the Financial Statements 38
Share Information 72
Notice of Annual General Meeting 75
Form of Proxy 79
Printage (Pvt) Ltd

Mr. Chandana Talwatta
Stock Exchange Listing
The Shares of the Company are listed on the
Colombo Stock Exchange.
Company Secretaries
P W Corporate Secretarial (Pvt) Ltd.
No.3/17, Kynsey Road,
Colombo 08.
Auditors
Ernst & Young
Chartered Accountants
201, De Saram Place,
Colombo 10.
Bankers
Nations Trust Bank PLC
Pan Asia Bank Corporation PLC
#HAPPINESSMOMENTS
Kalpitiya
#HAPPINESSMOMENTS
Citrus Kalpitiya Annual Report 2014/15
Kalpitiya
Experience the
tranquility of
happiness
Discover Happiness Moments by Citrus

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#HAPPINESSMOMENTS

Citrus Kalpitiya Annual Report 2014/15

Statement of Financial Position 35

Printage (Pvt) Ltd

Chief Executive Officer

Beach Resort PLC

Be happy for this moment.

The promise of peace and

Even more remarkable is the fact that in terms of earnings, we have

In June 2015 Citrus Kalpitiya received shareholder approval to

In parallel with the growth in tourism, we have also witnessed

In post-war Sri Lanka, tourism is firmly entrenched as a growth

Beach Resort PLC

In June 2015 Citrus Kalpitiya received shareholder approval to develop a 60

The future of Sri Lankan tourism, in my point of view, runs

Beach Resort PLC

The need for the presence of international brands in

to reward and recognize champions who have excelled in the field

In terms of performance during the year under review, Citrus

Beach Resort PLC

Bureau (2007-2009). Presently he Chairs a rainforest initiative

Varuni Amunugama Fernando

Beach Resort PLC

Director of Lanka Eco Adventure Frontiers (Pvt) Ltd., a company

Annual Report of the Board of Directors

meeting held on 19th June 2015, the shareholders granted such

However, in the light of the delay in the development of the

Beach Resort PLC

Independent Non Executive Director

Directors interests in contracts

The Directors of the Company also serve as Directors of Citrus

Annual Report of the Board of Directors

As at 31st March 2015, the Company had one employee

Beach Resort PLC

Annual General Meeting

The report on Corporate Governance is given on pages 15 to 30 of

P W Corporate Secretarial (Pvt) Ltd

and for reliability of financial information used within the business

P W Corporate Secretarial (Pvt) Ltd

Beach Resort PLC

resolved that in its opinion the directorships held by the said

Mr. E P A Cooray (Chairman)

26.06.14 31.07014 28.08.14

Beach Resort PLC

Corporate Disclosure and Shareholder Relationship

The Annual General Meeting provides a platform for shareholders to

P W Corporate Secretarial (Pvt) Ltd

Compliance with Continuing Listing Rules - Check List

At least one third of the total number of Directors

Two or one third of Non-Executive Directors whichever

Each Non-Executive Director should submit a

Available with the

The board shall annually determine the independence

The basis for Board to determine a Directors as

A brief resume of each Director should be included in

Provide a brief resume of new Directors appointed to

A Listed company shall have a Remuneration

Shall comprise of Non-Executive Directors a majority

The Remuneration Committee shall recommend the

Beach Resort PLC

The Annual Report should set out (a) Names of

The Company shall have an Audit Committee