REAL DECRETO 604/2006 PLAN DE PREVENCIÓN DE RIESGOS LABORALES 64 

Weighted Average number of Ordinary Shares in issue 559,471,889 470,734,889 Applicable to Basic Earnings Per Share 0.11 0.10 Basic Earnings Per Share is calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Net Profit Attributable to Ordinary Shareholders for Basic Earnings Per Share

As at 01 April 2011

The holders of ordinary shares confer their right to receive dividends as declared from time to time and are entitled to one vote per share at the meeting.

Reserve Fund is a capital reserve which contains profits transferred as required by Section 3(b) (i) of Finance Companies Capital Funds Direction No. 1 of 2003 of Finance Business Act No 42 of 2011.

Investment Fund Reserve is established and operated based on the Guidelines on Operation of Investment Fund Account issued by Central Bank of Sri Lanka with concurrence with Commissioner-General of Inland Revenue. Tax saving on the reduction of tax rates is transferred to the Investment Fund as per the guidelines issued by the Department of Inland Revenue and Central Bank of Sri Lanka.

2012

2012 As at 01 April 2011 2013

2013

28. MATURITY ANALYSIS

Less than 3 3-12 1-3 over 3 Total

months months years years

Rs. Rs. Rs. Rs. Rs.

Cash and Bank Balances 193,568,463 - - - 193,568,463 Investment in Repurchase Agreements against Treasury Bills and Bonds 129,938,359 - - - 129,938,359 Other Financial Assets 242,652,390 - - - 242,652,390 Financial Assets - Held For Trading 6,775,855 - - - 6,775,855 Loans and Advances 563,602,900 272,944,250 442,275,211 44,389,158 1,323,211,519 Lease Rentals Receivable and Hire Purchase 257,631,436 321,293,403 530,059,470 69,153,114 1,178,137,424 Financial Assets - Available for Sale - - - 578,617 578,617 Vehicle Stock - 4,341,810 4,413,643 - 8,755,453 Other Assets 18,428,031 - 650,000 28,333,796 47,411,827 Deposits and Prepayments 8,725,376 10,121,523 6,665,054 19,718,045 45,229,998 Income Tax Receivable - - 6,252,769 - 6,252,769 Property, Plant and Equipment - - - 57,152,755 57,152,755 Investment Property - - - 32,934,517 32,934,517 Deferred Tax Asset - - - 77,714,479 77,714,479

As at 31.03.2013 1,421,322,810 608,700,986 990,316,148 329,974,481 3,350,314,427

As at 31.03.2012 943,140,349 528,361,638 979,942,159 227,037,490 2,678,481,636

Liabilities

Due to Customers 712,375,760 1,118,825,967 721,433,053 38,530,774 2,591,165,554 Due to Banks 1,950 - - - 1,950 Other Borrowed Funds 31,321,994 5,000,004 12,222,216 - 48,544,214 Other Liabilities 14,285,165 - - - 14,285,165 Retirement Benefit Liability - - - 4,802,457 4,802,457

As at 31.03.2013 757,984,870 1,123,825,971 733,655,269 43,333,231 2,658,799,340

As at 31.03.2012 674,537,432 994,052,239 349,200,495 30,754,167 2,048,544,333

29. Fair Value of Financial Instruments

29.1 Determination of Fair Value and Fair Value Hierarchy

As at 31 March 2013, the Company held the following financial instruments carried at fair value on the statement of financial position; The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

29.1.1 Assets Measured at Fair Value 31 March

2013 Level 1 Level 2 Level 3

Rs. Rs. Rs. Rs.

Financial Assets - Held For Trading 6,775,855 6,775,855 - - Financial Assets - Available for Sale 578,617 - - 578,617

31 March

2012 Level 1 Level 2 Level 3

Rs. Rs. Rs. Rs.

Financial Assets - Held For Trading 23,323,863 23,323,863 - - Financial Assets - Available for Sale 7,771,958 - - 7,771,958

1 April

2011 Level 1 Level 2 Level 3

Rs. Rs. Rs. Rs.

Financial Assets - Held For Trading 56,210,473 56,210,473 - - Financial Assets - Available for Sale 7,949,894 - - 7,949,894 Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

An analysis of the total assets employed and total liabilities at the year end , based on the remaining at the balance sheet date to the respective contractual maturity dates are given below.

Carrying Value Fair Value Carrying Value Fair Value

Assets Rs. Rs. Rs. Rs.

Cash and Cash Equivalents 193,568,463 193,568,463 66,804,910 66,804,910

129,938,359

129,938,359 88,255,490 88,255,490

Other Financial Assets 242,652,390 242,652,390 204,666,796 204,666,796

Financial Assets - Held For Trading 6,775,855 6,775,855 23,323,863 23,323,863

Loans and Advances 1,375,481,605 1,209,135,195 884,970,471 835,938,571

Lease Rentals Receivable and Hire Purchase 1,125,867,338 1,003,823,078 1,121,545,998 1,027,336,261 Financial Assets - Available for Sale 578,617 578,617 7,771,958 7,771,958

3,074,862,627

2,786,471,958 2,397,339,486 2,254,097,849

Liabilities

Due to Customers 2,591,165,554 2,544,471,734 1,921,449,893 1,910,955,692

Due to Banks 1,950 1,950 20,231,345 20,231,345

Other Borrowed Funds 48,544,214 48,544,214 76,551,117 76,551,117

Total Financial Liabilities 2,639,711,718 2,593,017,899 2,018,232,355 2,007,738,154

Assets for which Fair Value Approximates Carrying Value

Fixed Rate Financial Instruments

It is assumed that the carrying amounts approximate their fair values for short term financial assets and liabilities.

Financial Assets - Available for Sale

30. COMMITMENTS AND CONTINGENCIES

2013 2012

30.1 Commitments Rs. Rs.

Undrawn Commitments 34,398,921 29,632,953

Capital Commitments for Software 18,135,902 20,456,590

52,534,823

50,089,543

30.2 Contingent Liabilities

The Company does not have significant contingencies as at the reporting date.

31. ASSETS PLEDGED

There are no significant assets pledged as at the reporting date.

Set out below is a comparison, by class, of the carrying amounts and fair values of the Company’s financial instruments that are not carried at fair value in the Financial Statements. This does not include the fair values of non financial assets and non financial liabilities.

2013 2012

Fair value of Unquoted Shares has been determined based on the cost of investment adjusted for impairment as at the reporting date.

Undrawn commitments are consists of facilities granted to customers where the Company reserves the right to unconditionally cancel or recall the facility at it's discretion.

In the normal course of business, the Company makes various commitments and incurs contingent liabilities. No material losses are anticipated as a result of these transactions.

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. Further other borrowed funds with a variable interest rate are also considered to be carried at fair value.

In fair valuing fixed rate lease rentals receivable ,hire purchase, loans and advances the market rates at which Company granted new credit facilities at the last quarter of the reporting year were used.

In fair valuing fixed deposits with tenor above one year, the cashflows were discounted using current market interest rates offered by the Company during the last quarter of the reporting year.

Investment in Repurchase Agreements against Treasury Bills and Bonds

The following describes the methodologies and assumptions used to determine the fair values for those financial instruments which are not already recorded at fair value in the Financial Statements.

32. FINANCIAL REPORTING BY SEGMENT 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Interest Income 132,847,807 112,632,051 153,832,996 100,951,854 243,785,884 148,966,552 58,849,351 15,933,291 - - 589,316,038 378,483,748 Other Income 11,059,415 27,273,490 5,587,037 9,264,535 11,209,080 12,260,858 232,128 1,263,826 9,396,631 6,795,476 37,484,291 56,858,185 Total Revenue 143,907,222 139,905,542 159,420,033 110,216,388 254,994,964 161,227,409 59,081,479 17,197,118 9,396,631 6,795,476 626,800,329 435,341,933 Segmental Result 11,705,267 16,659,289 9,864,134 10,403,835 26,600,085 17,704,756 5,165,862 (22,181,729) 1,247,829 1,096,800 54,583,177 23,682,951

Value Added Tax on Financial Services 9,316,115 7,125,027

Profits from Operations 45,267,062 16,557,924

Income Tax Reversal for the Year 16,394,679 31,428,577

Net profit for the Year 61,661,740 47,986,501

Segment Assets 445,564,712 499,095,756 680,302,626 622,450,242 1,323,211,519 880,984,736 379,945,221 324,018,107 - - 2,829,024,078 2,326,548,841 Unallocated Assets - - - - - - - - 521,290,349 343,575,174 521,290,349 351,932,795 Total Assets 445,564,712 527,382,747 680,302,626 644,445,343 1,323,211,519 835,407,982 379,945,221 326,518,107 521,290,349 383,943,071 3,350,314,427 2,678,481,636 Segment Liabilities 408,102,548 412,193,146 623,104,181 514,069,135 1,211,958,617 727,587,574 348,000,208 267,600,038 - - 2,591,165,554 1,921,449,893 Unallocated Liabilities - - - - - - - 67,549,828 127,094,440 67,549,828 127,094,440 Total Liabilities 408,102,548 397,878,289 623,104,181 486,194,916 1,211,958,617 630,264,642 348,000,208 246,338,103 67,549,828 289,661,756 2,658,715,382 2,048,544,333

In determining segment results, expenses have been allocated proportionately based on interest income and Segment Liabilities has been proportionately allocated based on the segment assets.

33. EVENTS OCCURRING AFTER THE REPORTING DATE

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

Total

Finance Lease Hire Purchase Loans and Advances Investment Other

34. RELATED PARTY DISCLOSURES

34.1 Transactions with Related Entities Parent Fellow Parent Fellow Company Subsidiary Company Subsidiary

Rs. Rs. Rs. Rs.

Opening receivable/(payable) balance (14,839,492) 8,499,191 (1,484,337) 160,765

Operating lease rental income 1,212,516 - 1,397,516 -

Reimbursement of payment made for developing a software 8,312,238 - - -

Settlement of lease facilities to directors of Asia Capital PLC 3,532,380 - - -

Rent income - 462,000 - 408,250 Rent income received during the year - (120,000) - -

- 13,868,124 - 7,930,176 Settlement of proceeds from sale of quoted investments - (21,798,300) - -

Operating lease rentals received - - (404,171) -

Expenses incurred for Related Party - - 11,100 -

Payments made on behalf of the Company - - (14,359,600) -

Opening receivable/(payable) balance (1,782,357) 911,015 (14,839,492) 8,499,191 Included In Other Payable Other Receivable Other Payable Other Receivable 34.1.1 Balance Sheet Items Parent Fellow * Parent Fellow * Company Subsidiaries Company Subsidiaries Assets Rs. Rs. Rs. Rs. 97,762,673 - 88,255,490 -

Other Financial Assets (Note 34.1.1.1 (a) ) - 20,480,418 - 90,952,634 Financial Assets - Held for Trading 2,653,920 - 4,365,000 -

Loans and Advances (Note 34.1.1.1 (b)) - 102,366,670 - - Lease Rentals Receivable and Hire Purchase (Note 34.1.1.1 (c)) - 14,915,857 - 11,253,993

34.1.1.1 Balances held by fellow subsidiaries of the Company (a)

(b)

(c)

34.1.2

Proceeds from Sale of Company's quoted investment on its behalf

Investment in Repurchase Agreements against Treasury Bills and Bonds

The Company carries out transactions in the ordinary course of business on an arm’s length basis at commercial rates with related parties. Details of significant related party disclosures are as follows:

Company has granted corporate loans to Asia Leisure Holding (Private) Limited (As at 31 March 2013 - Rs.44,583,335/-), Lanka Fortune Residencies (Private) Limited (As at 31 March 2013 - Rs.44,583,335/- ) and Asia Wealth Management Company (Private) Limited (As at 31 March 2013 - Rs.13,200,000/- ). Further the loans granted to Asia Leisure Holding (Private) Limited and Lanka Fortune Residencies (Private) Limited have been guaranteed by Asia Capital PLC.

Company has granted hire purchase facility to Asia Tea Packaging (Private) Limited amounting to Rs.14,915,857/- as at 31 March 2013 (As at 31 March 2012 - Rs.11,253,993/-). Further the facility has been guaranteed by Asia Securities ( Private) Limited.

Refer Note 12 to the Financial Statements on Loans and Advances for pledge loans securities held by the Company under share trading executed for customers of fellow subsidiary, Asia Securities ( Private) Limited.

2013 2012

2013 2012

Company has invested in Commercial Papers of Asia Fort Sri Lanka Direct Investment Fund Ltd amounting to Rs.20,480,418/- as at 31 March 2013. (As at 31 March 2012 - Rs.90,952,634/-).

34. RELATED PARTY DISCLOSURES (Contd..) 34.1.3

Parent Fellow * Parent Fellow * Income Statement Items Company Subsidiaries Company Subsidiaries

Rs. Rs. Rs. Rs.

Interest Income 12,980,965 25,883,374 8,514,033 4,691,593 Interest Expense - - 2,160,592 2,131,655 Other Income 1,082,604 462,000 1,082,604 408,250 Expenses - Professional fees 2,264,688 - - - Rentals Received - 9,146,199 - 32,468,749

34.2 Transactions with Key Management Personnel of the Company

34.2.1 Key Management Personnel Compensation 2013 2012

Rs. Rs.

Short Term Employment Benefits Paid 23,110,000 12,315,000

Post Employment Benefits 530,954 231,641

2013 2012