21/22

Annual Report 2021/22

LI O N B RE WE RY ( C E Y LO N ) P LC
CONTENTS
1 Financial Highlights
2 Chairman’s Message
4 Chief Executive’s Review
7 Profiles of Directors
10 Senior Management Team
12 Annual Report of the Board of Directors on the
Affairs of the Company
24 Audit Committee Report
27 Related Party Transactions Review
Committee Report
30 Financial Calendar
31 Independent Auditor’s Report
36 Statement of Financial Position
38 Statement of Profit or Loss and Other
Comprehensive Income
40 Statement of Changes in Equity
42 Statement of Cash Flows
44 Notes to the Financial Statements
102 Value Added Statement
104 Five Year Summary
107 Statement of Profit or Loss and Other
Comprehensive Income (Group) - USD
108 Statement of Financial Position (Group) - USD
110 Notes to the Financial Statements - USD
111 Five Year Summary - USD
113 Information to Shareholders & Investors
115 Glossary of Financial Terms
116 Notice of Meeting
119 Form of Proxy
Corporate Information - Inner Back Cover

The report can be accessed online at

http://www.carsoncumberbatch.com
FINANCIAL HIGHLIGHTS
In Rs. '000s 2022 2021 Change %

Revenue 58,570,885 49,849,287 17

Profit from operations 5,273,109 4,705,937 12

Profit before taxation 5,532,185 4,257,822 30
Profit after taxation 3,668,105 2,471,096 48
Shareholders' funds 19,927,661 16,974,411 17
Total assets 41,066,879 35,153,565 17
Earnings per ordinary share (Rs.) 45.85 30.89 48
Net assets per ordinary share (Rs.) 249.10 212.18 17
Market capitalisation 42,000,000 45,520,000 (8)

Annual Report 2021/22 1

CHAIRMAN’S MESSAGE
Dear Shareholder, other economic factors has led to very high head
line and core inflation, resulting in significant price
I am pleased to present the Annual Report for increases across all inputs. In parallel, various
the year ended 31st March 2022. The Chief geopolitical events have led to a considerable rise
Executive’s review presents a detailed analysis in global commodity prices. Aluminum which is a
of your Company’s operations, and therefore my key ingredient in the manufacture of cans is one
statement is confined to an overview. such commodity that experienced a steep rise in
prices. The surge in global freight rates too caused
During the first half of the year under review, sales the cost of imported inputs to increase significantly.
were disrupted due to the 3rd wave of the Covid In spite of increases in the price of the Company’s
pandemic. In order to curb its spread, a 52 day product range to counter rising costs, gross
island wide lockdown was enforced over two margins suffered.
separate periods. Whilst some retail shops were
open during this lock down period, outlets licensed In this challenging and demanding backdrop the
to sell beer were closed, resulting in the loss of Company delivered a profit before tax of
sales and cash collections. However, in the second Rs. 5.5 billion compared to Rs.4.2 billion last year,
half of the year, with increasing vaccinations on a turnover of Rs.58.6 billion versus
and the pandemic coming under control, the Rs. 49.8 billion in the previous year. It must be
Company’s operations returned to normal levels. noted that the sharp appreciation of the US$ in
March 2022 resulted in a substantial exchange
The rapid diminution of the country’s foreign gain; without this benefit, the profit before tax for
currency reserves due to a multitude of factors and the year would be Rs.4.9 billion. For the financial
the dwindling in-flow of dollars created an acute year 2021/22, the Company paid Rs.47 billion as
scarcity of foreign currency. This led to severe Government taxes compared to Rs.37 billion
operational challenges affecting every aspect of last year.
business. Whilst its intensity was less severe in the
first half of the year, its impact reached extreme Exports performed well recording a growth of 45%
proportions in the second half. Banks were over the previous year despite the many operational
compelled to prioritise the allocation of its limited challenges. The income received from exports
foreign exchange to meet urgent and essential greatly helped overcome the foreign exchange
imports such as fuel, gas and medicines. We are challenges faced during the year. If not for the
extremely grateful to our suppliers for the unstinted numerous impediments, growth in exports would
support extended to the Company during this have been much higher. The lack of ships calling at
challenging period and in turn our commitments to the port of Colombo compounded by the scarcity
them have been met in a timely manner. of containers, hampered shipments and significantly
increased freight costs. Export profitability was also
The free float of the LKR in mid-March 2022 challenged by rising costs of raw materials. The
resulted in the sharp devaluation of the Rupee, international business arm of the Company now
with the US$ appreciating to Rs.370/- by April exporting to around 26 countries, offers further
2022. This steep depreciation combined with promise and potential for growth in the years to
come and will receive due focus.

2 Lion Brewery (Ceylon) PLC

The forthcoming year will be one of even greater
challenges. As the country gears itself to overcome
the economic, political and social crisis, consumers The forthcoming year will
be one of even greater
and businesses will have to brace themselves to
steer through a period of severe turbulence. The
significant changes in monetary policy already in
motion will lead to significantly higher interest costs
and liquidity issues, while increasing inflation will
challenges. As the country
lead to higher prices that will impact demand. It
is expected that the ongoing shortage in foreign gears itself to overcome
exchange, the scarcity of fuel, interruptions to
power supply, disruptions to global supply chains
hampering supplies and rising commodity prices
the economic, political and
will continue to impede business in the forthcoming
year. In addition, the expected revisions to fiscal
social crisis, consumers and
policies will result in the increase of VAT and other
taxes, adding to the challenges. Nevertheless, businesses will have to brace
as proven in the past, guided by the Board, your
Company’s capable Management assisted by the themselves to steer through a
diligent team of employees is committed towards
overcoming the challenges to ensure business
success.
period of severe turbulence.
Despite having to face numerous personal
In conclusion, I wish to express my appreciation
hardships and a multitude of business challenges,
and thanks to the Audit Committee, Remuneration
our dedicated team of employees across all levels
Committee, Related Party Committee and
has ensured that the Company’s operations
Nominations Committee and to my colleagues on
continued uninterrupted. The Company is deeply
the Board for their invaluable advice and guidance
appreciative of the commitment and contribution of
provided to steer the Company. As always, I look
every employee and extends its grateful thanks to
forward to working closely with all in taking Lion
all team members.
further and forward.

A special thank you and a note of appreciation to

(Sgd.)
our partners Carlsberg, our bankers, consignment
D. A. Cabraal
agents and suppliers for the unstinted help and
Chairman
assistance provided. Also, a big thank-you to all
our loyal consumers for the continued trust and
Colombo
confidence placed in the Company’s brands.
08th July 2022

Annual Report 2021/22 3

CHIEF EXECUTIVE’S REVIEW
INDUSTRY & POLICY Government to enhance and enforce the security
features. Government should consider exempting
The financial year saw the continued impact of
exports from this initiative as it is an added cost
the Covid pandemic which started easing towards
to the product which impact competitiveness in
the last two quarters bringing about a hope of
international markets.
economic revival. The expectation was short lived
as the dollar crisis precipitated by the poor inflows
Another factor driving growth in the illicit category
started impacting the whole country and the
is restricted access. Sri Lanka has only 1,130
operations of Lion. Therefore, a year which was
licensed retail liquor stores which, on average,
expected to be a period of turnaround nosedived
implies an outlet serves an area greater than
into a political and social crisis, leading to the
57 sq KM. To put it into context, consumer goods
economy going into a tailspin.
companies sell in excess of 100,000 outlets.
Retail liquor stores are not evenly placed across
Within the context of a deteriorating economic
the country leading to very limited access to legal
environment Government and regulators must
alcoholic beverages, especially in rural areas. In
pursue a balanced and sensible approach to the
several parts of the country, one retail liquor store
industry as ad hoc policies will impact government
serves an area greater than 100sq KM. Some
revenue streams and create a thriving illicit sector.
districts such as Kilinochchi district have no
For the 2021/22 year, 60% of the price of beer
licensed stores. This creates the incentive for illicit
is composed of excise tax, compared to world
alcohol growth as legal products are simply not
norms of between 20%-30%, which indicates
available. The Government has proposed giving
that the pricing for beer is at a high level thereby
licenses for tourist board approved establishments
compromising the value for money equation versus
for low alcoholic beverages i.e beer & wine. This is
illicit products. In fact, WHO estimates 37% of the
a step forward in the right direction of curtailing the
alcoholic beverages consumed in the country is
illicit sector, increasing the tax net for government
duty-not-paid which is significantly higher than the
and creating business opportunities for SMEs in
global average. The estimated excise taxes for
the hospitality business when tourism commences.
2022 from the duty paid alcohol is Rs.180 billion
(spirits + beer) which implies an estimated
A balanced and practical approach is the only way
Rs.80+ billion rupees per annum of tax evasion.
forward. We urge Government not to take a
This situation is driven by the legal alcoholic
short-term, ad hoc approach to the industry which
beverage price threshold (both spirits and beer)
would be counterproductive as it will compromise
creeping up versus illicit products which gives
one of its key revenue streams and pave the way
impetus for consumers to move to the illicit sector
for the tax evading sector to thrive.
which is evidenced by WHO statistics indicating a
300% growth in the latter. Therefore, using excise
as a short-term revenue generation tool will have By addressing the key gaps highlighted above,
disastrous consequences for the Government. Government will create a win-win outcome which
increases tax revenue and provides consumers
with regulated and better products.
It must be put on record the successful initiative by
the Ministry of Finance and the Excise Department
of Sri Lanka in introducing tax stamps to alcoholic TAXATION
beverages to curtail illicit product. We fully support
Following the end of the financial year, VAT was
the initiative. There is more the Government can
increased from 8% to 12%. It must be pointed out
do to strengthen the security features to protect
that the alcoholic beverage industry did not benefit
against counterfeiting. Currently, the suite of
from the VAT reductions in 2019. The 2019 VAT
security features is not fully enabled thereby
reduction was simultaneously offset by an equivalent
making it easier to counterfeit. We request the
excise tax increase. As such, the recent 2022 VAT

4 Lion Brewery (Ceylon) PLC

increase is entirely an incremental tax increase on
the industry, not a claw back of a past tax reduction.
The VAT increase is equivalent to a 7% increase in
excise taxes. Note, this is in addition to the excise
There was a renewed focus
tax increase in November 2021.
on strengthening our brand
A Social Security Levy will also come into effect
in August. This tax will be levied on turnover portfolio with the introduction
at the rate of 2.5%. It will also be levied on the
excise tax component of our turnover as well as
several inputs, thereby providing a further boost to
of Guinness to premiumise the
Government taxes.
stout segment whilst the
OPERATING ENVIRONMENT

Three consecutive years of turmoil began to

re-launch of Carlsberg with the
take its toll in an accelerated manner. The steep
depreciation of the Sri Lankan Rupee, the shortage
International Premium Pilsner
of US Dollars, rising energy prices, shortages
of gas and fuel, lower crop outputs threatening brought about renewed energy
food security brought about a high interest, high
inflationary environment where disposable incomes
came under severe pressure. This situation created
amongst consumers
political turmoil and social unrest impacting tourism
a major earner of forex and creating a vicious cycle.
segment in Sri Lanka by offering choice and range
Input costs on our key materials, cans and malt to consumers. This approach will also be duly
escalated rapidly with rising global commodity followed in other segments within the market. With
prices, example according to World Bank data, the closures and fuel shortages cutting across the year
average aluminum price grew from USD 2004 per the logistics and trade teams did a remarkable job
ton in January 2021 to over USD 3500 following the supplying the market continuously and ensuring
outbreak of the Ukraine hostilities. Compounding availability. The uncertainties in the external
this was the increase in global freight rates which environment provided a rationale for the Company
rose from an average of US$ 4827 in March 2021 to operate with increased inventory levels. This
to US$ 8152, within a short span of a year. All compromised the best practices in inventory
the above factors linking together brought about management but ensured security of supply.
an exponential increase in the cost base putting
considerable pressure on our profit margins. The company took a proactive approach in
managing the high inflationary environment impact
MANAGING THE DOMESTIC BUSINESS on our employees by increasing the salary levels of
the lower levels of the organisation complemented
There was a renewed focus on strengthening our
by an ex-gratia one-off payment to all staff. This
brand portfolio with the introduction of Guinness
was extremely essential and created a positive
to premiumise the stout segment whilst the
momentum within the organisation with motivation
re-launch of Carlsberg with the International
levels high in a difficult environment. On the people
Premium Pilsner brought about renewed energy
strategy, steps were also taken to align & engage
amongst consumers which is in line with the overall
employees to organisational aspirations.
business strategy of creating a wider premium

Annual Report 2021/22 5

CHIEF EXECUTIVE’S REVIEW

In a context of operating challenges, the to this, the carrying value of the brands were
administrative divisions play a key role in ensuring assessed which resulted in an impairment of
the security of the premises and facilitating the Rs. 464 million in the financial year 21/22.
movement of staff to & from their homes to
the Brewery. It was an incredible team effort A first interim dividend amounting to Rs. 14.40 per
which led to ensuring that operations continued share was paid out in July 2021 from the profits
uninterrupted. earned during the financial year 20/21. Additionally,
two interim dividends were paid amounting to
MANAGING THE EXPORT BUSINESS Rs. 20.93 per share in November 2021 and June
2022 form the profits earned during the financial
It was yet again a successful year for exports with year 21/22.
a 45% volume growth recorded against last year
and this business accounts for little over 10% of
our volume. Lion exports to over 26 countries. FUTURE OUTLOOK
Lion beer remains a leader in the Maldives market We envisage that this current context will
with its availability in over 160 premium resorts & continue for at least another 12 months and then
yachts. The export function is being transformed progressing to slow recovery.
with added resources and management focus as
it becomes a key growth pillar of the business.
In this period, we will continue to invest in our
Annual execution plans are now aligned to the
brands and strengthen the brand portfolio. Building
defined strategic purpose.
a strong innovation pipeline will feature as a
critical workstream to support both international
FINANCIAL PERFORMANCE and domestic markets. Building our markets
internationally will have a disproportionate focus
On a turnover of Rs. 58.57 billion a profit after
in line with our strategic ambition. Operational
tax of Rs.3.66 billion was earned for the financial
excellence and smart cost management will
year 21/22. The sharp appreciation of the USD
feature prominently in the business agenda. People
consequent to the free float of the LKR in the latter
development and capacity building within the
part of March earned a non-recurring unrealised
organisation will continue aggressively and the
exchange gain of Rs. 614 million. As explained
organisation will invest in this area.
above the operational costs of the Company rose
significantly due to extraneous factors both in
the local & global operating environment. These Finally, my appreciation is due to the consumers,
increases were partly offset by price increases, to customers, suppliers, bankers, business partners,
the extent possible, but the pace at which cost Carlsberg, Diageo and Auditors for their continued
escalations occurred was greater than what the faith in the Company, its products & processes.
consumer could bare. As such, our operating Special mention also has to be made about the
margins declined in the year. Audit Committee, Remuneration Committee, Board
of Directors and management & employees at all
levels for advice, guidance and commitment in the
At every quarter end an assessment is carried
affairs of the Company in this very difficult year.
out to ascertain the carrying value of the Millers
Brewery Limited (MBL) brands acquired in
2015. With the current economic downturn, the (Sgd.)
demand for MBL products were weak and had R. H. Meewakkala
to be pushed with lower priced options. The Chief Executive Officer
future potential of these brands in this economic
environment offers less promise than other brands Colombo
in our portfolio Hence, giving due consideration 08th July 2022

6 Lion Brewery (Ceylon) PLC

PROFILES OF DIRECTORS
AMAL CABRAAL He was the Past President of the National
Chamber of Commerce and Past Vice Chairman
(Chairman)
of the International Chamber of Commerce
(Sri Lanka). He holds a Bachelor’s Degree in
Mr. Amal Cabraal, the Chairman of Ceylon
Commerce.
Beverage Holdings PLC and Lion Brewery (Ceylon)
PLC is also the Chairman of Sunshine Holdings
RAJIV MEEWAKKALA
PLC, Silvermill Investment Holdings and CIC Feeds
Group of Companies. He is a former Chairman (Appointed Chief Executive Officer/Executive
and Chief Executive Officer of Unilever Sri Lanka Director w.e.f. 01/07/2021)
and has over 4 decades of wide ranging local and
international business experience. Rajiv’s management experience spans across
both private and public sector organisations, and
Mr. Amal Cabraal is also a Non-Executive Director his core expertise are in marketing and general
of John Keells Holdings PLC and Hatton National management. His career commenced in the private
Bank PLC and serves as a business advisor to sector, working for a multinational group for 19
a number of companies. He is a member of the years, post which, he lead three large state sector
Board of the Ceylon Chamber of Commerce and businesses in retail, construction and banking.
serves on the Management Committee of the
Mercantile Services Provident Society. In the private sector, Rajiv was the Marketing
Director of Ceylon Tobacco Company (fully owned
A Marketer by profession and a Fellow of the subsidiary of British American Tobacco - BAT)
Chartered Institute of Marketing - UK, he holds where he managed a diverse brand portfolio. His
a MBA from the University of Colombo and is an responsibilities included building both global and
executive education alumnus of INSEAD-France. local brands by strengthening brand values through
targeted communication, innovation in product and
HARI SELVANATHAN packaging whilst being responsible for the trade
marketing and sales function. He was a member of
(Deputy Chairman)
the South Asia Marketing Leadership team of BAT,
Hari Selvanathan is the Chairman of Bukit and was also Head of Brand Marketing for BAT
Darah PLC and Deputy Chairman of Carson Cambodia & Laos.
Cumberbatch PLC. He is the Deputy Chairman/
Post BAT, Rajiv worked as a Brand Consultant with
Group Chief Executive Officer of Goodhope Asia
Interbrand, a global brand consultancy group. He
Holdings Ltd. He is the President Commissioner
also had a short work tenure in the Public Sector.
of the palm oil related companies in Indonesia. He
holds directorships in several subsidiary companies
Rajiv holds a PHD (Management) from the University
within the Carsons Group and is also a Director of
of Honalulu, MSc in International Marketing from
Sri Krishna Corporation (Private) Limited and the
the University of Strathclyde (Glasgow) and a Post
Chairman of Express Newspapers (Ceylon) Ltd.
Graduate Diploma in Marketing from the Chartered
He is also the Chairman of Carsons Management
Institute of Marketing (UK).
Services (Private) Limited and Agro Harapan
Lestari (Private) Limited, the Group’s Management
companies.

Annual Report 2021/22 7

PROFILES OF DIRECTORS

CHANDIMA GUNAWARDENA companies within the Ceylon Guardian Group. He

also serves as a Director of Lion Brewery (Ceylon)
Chandima Gunawardena serves as a Non-
PLC and Pegasus Hotels of Ceylon PLC. He
Independent, Non-Executive Director of most of
holds a BA Degree in Accounting & Finance and
the Carsons Group Companies in Sri Lanka and
Business Administration from the University of
overseas. He is also a Director of Bukit Darah
Kent, U.K.
PLC. Since assuming Non- Executive status in
the Group, he serves as an advisor to the Group’s MRS. SUSAN EVANS
Strategic Planning and Management forums in Sri
Lanka and serves on Board Committees, including Director of Lion Brewery (Ceylon) PLC and Ceylon
the Audit Committees of the Group in Sri Lanka Beverage Holdings PLC. Counts over 30 years’
and overseas covering all operating sectors of the experience in strategy and marketing, largely with
Group. multi-national consumer product companies,
Gillette, GlaxoSmithKline and Whirlpool. Whilst
Mr. Gunawardena has over four decades of based in the UK, she held an international
experience in varied fields of business and strategic marketing position and managed a global
commercial activities and has held senior positions nutritional drinks brand portfolio with a turnover of
in Corporate, Mercantile and State Institutions. He £330 million worldwide.
was appointed to the Carsons Group Directorate
in 1990. For the past 20 years she has been working as
a Senior Consultant in India and Sri Lanka on a
He has served in the Management Committee wide variety of assignments covering industries as
of The Ceylon Chamber of Commerce for over diverse as soft drinks, retail, passenger cars and
10 years and was a Founder Council member industrial export products. Currently works with
of the Sri Lanka Institute of Directors (SLID) and STING Consultants, the leading strategic marketing
continued to serve in the council for over 10 years. and brand consultancy in Sri Lanka. Also serves
as a Trustee on Ayati Trust Sri Lanka and Hemas
He is a Fellow of the Chartered Institute of Outreach Foundation, both national charities
Management Accountants, UK. involved in improving the potential of disabled and
underprivileged children.
RANIL GOONETILLEKE
Holds a Bachelor of Arts (Hons) degree from the
A Fellow of the Chartered Institute of Management
University of Wales, UK.
Accounts, UK. Consequent to initial training at
KPMG, has held various positions in the mercantile
SUDARSHAN SELVANATHAN
sector in the field of Finance and counts over 30
years’ experience. He joined the Company in 1998 Joined Carson Cumberbatch in 2019, focusing on
as a Financial Controller and thereafter in 2005 the Group’s beverage businesses. Prior to this, he
was appointed Finance Director of Lion Brewery was a partner at JNE Partners LLP and a senior
(Ceylon) PLC. member of the investment team at MSD Capital,
investing in equities and distressed debt. From
KRISHNA SELVANATHAN 2000 to 2006, he served in various roles at Lone
Star Funds and Lehman Brothers.
Krishna Selvanathan - Director, Carsons
Management Services (Private) Limited, is the CEO
of Guardian Fund Management Limited and serves
as a Board Member of other investment sector

8 Lion Brewery (Ceylon) PLC

STEFANO CLINI He is a Past Chairman of the Ceylon Chamber
of Commerce and of the Employers Federation
Mr. Clini is the Managing Director of Carlsberg
of Ceylon. Previously, he has served as a
Brewery Malaysia Berhad. He is a Director on
Commissioner of the Securities and Exchange
the Board of Carlsberg Marketing Sdn. Bhd. and
Commission of Sri Lanka, a Member of Council of
Carlsberg Singapore Pte. Ltd., both are wholly
the University of Moratuwa and a member of the
owned subsidiaries of Carlsberg Brewery Malaysia
Monetary Policy Consultative Committee of the
Berhad. Mr Clini also serves on the Board of
Central Bank of Sri Lanka.
Maybev Pte. Ltd. (a 51% owned subsidiary of
Carlsberg Singapore Pte. Ltd.), Lion Brewery He is a Fellow Member of the Institute of Chartered
(Ceylon) PLC and Ceylon Beverage Holdings PLC. Accountants of Sri Lanka.

He is also a member of the Governing Council of

the Confederation of Malaysian Brewers Berhad.

MS. VIVIAN GUN LING LING

Ms. Vivian Gun Ling Ling joined Carlsberg in 2018

as a Chief Financial Officer in Myanmar Carlsberg
Co. Ltd (MCCL). She is responsible for Finance
and IT functions. Prior to joining Carlsberg, she
had held senior Finance roles with established
Malaysian corporations including GlaxoSmithKline,
British American Tobacco, BMW and KPMG. She
has worked in Malaysia and other South East
Asian countries including Myanmar and Vietnam.
Ms. Gun is a qualified CPA Australia professional
and was a member of the Chartered Institute of
Management Accounting (CIMA). She graduated
from Victoria University of Wellington, New Zealand
in 1998 with a first class honours, majoring in
Accounting and having been awarded the Tenaga
Nasional Berhad scholarship to study there.

SURESH SHAH

(Retired as Chief Executive Officer/Director w.e.f.

30/06/2021)

Mr. Suresh Shah is Chairman of Ceylon Tobacco

Company PLC and the start up online grocery
and household products marketplace, Providore
and a Director of Carson Cumberbatch PLC,
Bukit Darah PLC and Hemas Manufacturing (Pvt)
Ltd. Previously, he was Director & CEO of Ceylon
Beverage Holdings PLC and Lion Brewery (Ceylon)
PLC, a position he held for 30 years.

Annual Report 2021/22 9

SENIOR MANAGEMENT TEAM

1 2 3 4 5 6 7 8 9 10

Left to Right

6. Niranjan Perera
1. Sandeep Mallya Head of Human Resources
Head of Category - Premium
7. Eshantha Salgado
Head of Sustainability
2. Chaminda Bandaranayake
Head of Manufacturing Development 8. Shiran Jansz
Head of Procurement
3. Nirosh De Silva
General Manager - Technical 9. Madhushanka Ranatunga
General Manager - Sales & Marketing
4. Jehan Goonaratne
Financial Controller - Corporate Finance 10. Rajiv Meewakkala
Director / CEO
5. Mohan Wijebandara
Financial Controller - Commercial

10 Lion Brewery (Ceylon) PLC

 11 12 13 14 15 16 17 18 19 20 21

11. Ranil Goonetilleke 17. Kaveen Gayathma

Director - Finance Head of Outbound Logistics

12. Stefan Atton 18. Widhura Nuwan

Vice President International Business Chief Engineer

13. Ruwandhi Thanthrige 19. Sampath Perumbuli

Head of Legal Chief Information Officer

14. Keerthi Kanaheraarachchi 20. Nishantha Hulangamuwa

Head of Corporate Affairs Head of Trade & Outbound Logistics

15. Channa Senarathne 21. Arno Matthee

Head of Regulatory Affairs Brew Master

16. Chandana de Silva

Quality Assurance Manager

Annual Report 2021/22 11

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY
The Board of Directors of Lion Brewery SIGNIFICANT EVENTS DURING THE
(Ceylon) PLC have pleasure in presenting to FINANCIAL YEAR
the Shareholders their Report together with the
Details of significant events during the year are
Audited Consolidated Financial Statements of the
contained in the Chief Executive’s Review on pages
Company and its Subsidiaries (the Group) for the
04 to 06 of this Report.
year ended 31st March 2022.

STATEMENT OF DIRECTORS
The details set out herein provide the pertinent
RESPONSIBILITIES
information required by the Companies Act, No.
07 of 2007, Listing Rules of the Colombo Stock The responsibilities of the Directors in relation
Exchange and are guided by recommended best to the Financial Statements, are detailed in the
Accounting Practices. following paragraphs, whilst the responsibilities
of the Auditors are set out in the Report of the
The Annual Report was approved by the Board of Auditors.
Directors on 08th July 2022.
According to the Companies Act, No. 07 of
GENERAL 2007 and the Sri Lanka Accounting and Auditing
Standards Act, No. 15 of 1995, the Directors are
The Group consists of Lion Brewery (Ceylon) PLC
required to prepare Financial Statements for each
and its fully owned subsidiaries Pearl Springs
financial year, giving a true and fair view of the state
(Private) Limited and Millers Brewery Limited. Lion
of affairs of the Company and the Group as at the
Brewery (Ceylon) PLC is a public limited liability
end of the financial year and of the results for the
Company incorporated in Sri Lanka in 1996. Its
said period.
subsidiary Pearl Springs (Private) Limited is a
wholly owned entity incorporated in 2015. Millers
In preparing these financial statements, the
Brewery Limited is a wholly owned undertaking of
Directors are required to ensure that:
Pearl Springs (Private) Limited.
• appropriate accounting policies have been
PRINCIPAL ACTIVITY OF THE GROUP selected and applied consistently, while
material departures, if any, have been
The Principal activity of the Group is brewing and
disclosed and explained,
marketing of high quality beers for both the local
and export markets. • all applicable Accounting Standards have been
complied with,
REVIEW OF OPERATIONS AND FUTURE
• reasonable and prudent judgments and
DEVELOPMENTS
estimates have been made, and,
The Chairman’s Statement and the Chief
• provides the information required by and
Executive’s Review describe in detail the
otherwise comply with the Companies Act,
performance during the year together with
No. 07 of 2007 and the Listing Rules of the
comments on the financial results and future
Colombo Stock Exchange.
developments of the Company.

12 Lion Brewery (Ceylon) PLC

The Directors are responsible for ensuring that the ACCOUNTING POLICIES AND CHANGES
Group maintains sufficient accounting records to DURING THE YEAR
disclose with reasonable accuracy, the financial
There were no major changes made to the
position of the Company in order to ensure that its
accounting policies other than those disclosed
Financial Statements meet with the requirements of
in the notes to the Financial Statements for the
the Companies Act, No. 07 of 2007 and the
financial year ended 31st March 2022.
Sri Lanka Accounting and Auditing Standards Act,
No. 15 of 1995.
FINANCIAL STATEMENTS
They are also responsible for taking reasonable The Financial Statements which include
measures to safeguard the assets of the Group the Statement of Profit or Loss and Other
and in this regard to give proper consideration Comprehensive Income, Statement of Financial
to the establishment of appropriate systems of Position, Statement of Cash Flows, Statement
internal control with a view to prevent, detect and of Changes in Equity and Notes to the Financial
rectify frauds and other irregularities. Statements of the Company and the Group for the
year ended 31st March 2022 are set out on pages
These Financial Statements have been prepared 36 to 101 of this Report.
on a Going Concern basis, since the Directors are
of the view that the Group has adequate resources RESERVES
to continue operations for the foreseeable
future from the date of signing these Financial After the above mentioned appropriations, the total
Statements. The Directors are also of the view that reserves of the Group stand at Rs.17,390 Mn
they have discharged their responsibilities as set (2021 - Rs.14,437 Mn) comprising Capital Reserves
out in this statement. of Rs.2,092 Mn (2021 - Rs.1,388 Mn) and Revenue
Reserves of Rs.15,298 Mn (2021 - Rs. 13,048 Mn).
Details are shown in the Statement of Changes in
The Directors confirm that to the best of their
Equity on page 40.
knowledge,

• all taxes, duties and levies payable to the CAPITAL EXPENDITURE ON PROPERTY,
statutory bodies, PLANT & EQUIPMENT AND INTANGIBLE
ASSETS
• all contributions, levies and taxes payable on
behalf of and in respect of the employees, The total expenditure on the purchase of capital
and, assets by the Group during the year amounted
to Rs.2,094 Mn (2021 - Rs.1,187 Mn). The
• all other known statutory dues as were due
movements in capital assets during the year are set
and payable by the Company as at the
out in Notes 08 & 10 to the Financial Statements.
reporting date have been paid, or where
relevant provided for in these Financial
Statements.

Annual Report 2021/22 13

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY

MARKET VALUE OF FREEHOLD PROPERTIES SIGNIFICANT ACCOUNTING POLICIES

The land and buildings owned by the Group were The accounting policies set out in Note 1 to 7 in
valued in March 2022 by a qualified independent the notes to the Financial Statements on pages 44
valuer. The market value arrived at was to 61.
Rs. 8,340 Mn. These are further explained in Note
08 to the Financial Statements. DONATIONS

There were no donations made during the year

RISK MANAGEMENT/MATERIAL
ended 31st March 2022 (2021 - Nil).
FORESEEABLE RISK FACTORS

The need for risk management has been identified INTERESTS REGISTER
and action plans to monitor and manage these
risks are incorporated into the business plans and The Company maintains an Interests Register
reviewed on a continuous basis. conforming to the provisions of the Companies
Act, No. 07 of 2007.
MATERIAL ISSUES PERTAINING TO
EMPLOYEES AND INDUSTRIAL RELATIONS All Directors have made declarations as provided
for in Section 192(2) of the Companies Act
There were no material issues relating to aforesaid. The relevant details as required by the
employees and industrial relations during the year Companies Act, No. 07 of 2007 have been entered
ended 31st March 2022. in the Interests Register during the year under
review.
STATUTORY PAYMENTS
The Interests Register is available for inspection as
The Directors to the best of their knowledge and
required under the Companies Act.
belief are satisfied that all statutory payments have
been paid up to date or have been provided for in
these Financial Statements. REMUNERATION OF DIRECTORS

Directors’ remuneration, for the financial year

GOING CONCERN ended 31st March 2022 is given in Note 27 to the
Financial Statements, on page 82.
The Board of Directors is satisfied that the
Company has adequate resources to continue its
operations in the foreseeable future. Accordingly,
these Financial Statements are prepared based on
the Going Concern concept.

INDEPENDENT AUDITORS’ REPORT

The Independent Auditors’ Report on the Financial

Statements is given on pages 31 to 35 of this
Report.

14 Lion Brewery (Ceylon) PLC

DIRECTORS’ INTEREST IN CONTRACTS AND SHARES

The Related Party Transactions of the Group as required by the Sri Lanka Accounting Standard LKAS 24
Related Party Disclosures are disclosed in Note 33 to the Financial Statements and have been declared
at Meetings of the Board of Directors. The Directors have had no direct or indirect interest in any other
contracts or proposed contracts in relation to the business of the Group, while they had the following
interests in the ordinary shares of the Company as shown in the table below.

Directors No. of shares as at

31st March 31st March
2022 2021

Mr. D. A. Cabraal (Chairman) - -

Mr. H. Selvanathan (Deputy Chairman) 1,579 1,579
Mr. D. C. R. Gunawardena 34 34
Mr. D. R. P. Goonetilleke 1 1
Mr. K. Selvanathan (Director / Alternate Director to Mr. H. Selvanathan) - -
Mrs. S. J. F. Evans - -
Mr. R. H. Meewakkala (Appointed Chief Executive Officer w.e.f. 01/07/2021) - -
Mr. S. Selvanathan - -
Mr. S. Clini - -
Ms. V. Gun L. L. - -
Mr. S. K. Shah (Retired as Chief Executive Officer/Director w.e.f.
30/06/2021) 6,016 6,016

DIRECTORS Mr. R. H. Meewakkala was appointed as the Chief

Executive Officer of the Company w.e.f. 01st July
The names of the Directors who served during
2021 and continues to function in the capacity of
the year are given under Corporate Information
an Executive Director of the Company.
provided in the inner back cover of the Annual
Report.
Directors to retire by rotation

Changes in the Directorate In terms of Articles 72, 73 and 74 of the Articles of

Association of the Company, Mrs. S. J. F. Evans
Mr. S. K. Shah retired as the Chief Executive
retires by rotation and being eligible offers herself
Officer/Director of the Company w.e.f. 30th June
for re-election.
2021 following a successful 30 year leadership of
the Company.

Annual Report 2021/22 15

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY

In terms of Articles 72, 73 and 74 of the Articles Auditors’ relationship or any interest with the
of Association of the Company, Mr. S. Clini retires Company
by rotation and being eligible offers himself for
The Directors are satisfied that, based on written
re-election.
representations made by the Independent Auditors
to the Board, the Auditors did not have any
Appointment of Directors who are over 70
interest with the Company that would impair their
years of age
independence.
Mr. H. Selvanathan - Executive Director and
Mr. D. C. R. Gunawardena - Non-Executive Related Party Transactions Review
Director who were over 70 years of age were Committee
appointed as Directors of the Company in terms of
The Parent Company of the Company is Ceylon
Section 210 of the Companies Act, No.07 of 2007
Beverage Holdings PLC (CBHPLC) and Carson
at the AGM held on 13th August 2021 for a period
Cumberbatch PLC (CCPLC) in turn is the Parent
of one year commencing from the conclusion of
Company of CBHPLC. As per the Rule 9.2.3 of
the said AGM, i.e. till 12th August 2022.
the Listing Rules of the Colombo Stock Exchange,
the Related Party Transactions Review Committee
Upon the recommendation of the Nomination
of CCPLC functions as the Related Party
Committee of the Company and the Board, it is
Transactions Review Committee of the Company.
recommended that Mr. H. Selvanathan and
Mr. D. C. R. Gunawardena who are over 70
Related Party Executive/ Non-Executive/
years of age be re-appointed as Directors of the
Transactions Review Independent
Company for a further period of one year from
Committee Members
the conclusion of the Annual General Meeting
and that the age limit stipulated in Section 210 of Mr. W. M. R. S. Dias Non-Executive/
the Companies Act, No.07 of 2007 shall not be Independent Director of
applicable to them. CCPLC
Mr. R. Theagarajah Non-Executive/
AUDITORS Independent Director of
CCPLC
Company’s Auditors during the year under review
were Messrs. KPMG, Chartered Accountants. Mr. D. C. R. Non-Executive Director of
Details of audit fees are set out in note No. 27 to Gunawardena CCPLC
the Financial Statements. Mr. H. Selvanathan Executive Director of
CCPLC
The retiring Auditors have expressed their Mr. M. Selvanathan Executive Director of
willingness to continue in office. A Resolution to CCPLC
re-appoint them as Auditors of the Company and
Mr. S. K. Shah Executive Director of
authorising the Directors to fix their remuneration
CCPLC until 30/06/2021 &
will be proposed at the forthcoming Annual General
Non-Executive Director of
Meeting.
CCPLC w.e.f. 01/07/2021

The Audit Committee reviewed the appointment of

The Related Party Transactions Review Committee
the Auditors, its effectiveness and its relationship
Report is given on pages 27 to 28 of this Annual
with the Company, including the level of audit and
Report.
non-audit fees paid to the Auditor.

16 Lion Brewery (Ceylon) PLC

Declaration CORPORATE GOVERNANCE

The Directors have made self-declarations for the The Board has ensured that the Company has
purpose of identifying parties related to them. The complied with the Corporate Governance Rules
said declarations were noted at the Related Party as per the Listing Rules of the Colombo Stock
Transactions Review Committee Meetings. Exchange (CSE).

The Company is in compliance with Rule 9 of the BOARD OF DIRECTORS

Listing Rules of the Colombo Stock Exchange
The following Directors held office during the period
pertaining to Related Party Transactions, during the
under review and their brief profiles are given on
financial year.
pages 07 to 09 of the Annual Report.

Related Party Transactions Exceeding 10%

Directors Executive/ Non-Executive/
of the Equity or 5% of the Total Assets of the
Independent
Company
Mr. D. A. Cabraal Non-Executive/
The Directors declare in terms of the requirements
(Chairman) Independent *
of the Listing Rules of the Colombo Stock
Exchange that the transactions carried out by the Mr. H. Selvanathan Executive
Company with its Related Parties during the year (Deputy Chairman)
ended 31st March 2022, did not exceed 10% of Mr. D. C. R. Non-Executive
Equity or 5% of the Total Assets of the Company Gunawardena
as at 31st March 2021. Mr. D. R. P. Executive
Goonetilleke
The details of the Related Party Transactions
Mr. K. Selvanathan Executive
are given in Note 33 on pages 96 to 100 of the
(Director / Alternate
Financial Statements.
Director to Mr. H.
Selvanathan)
1. Non-Recurrent Related Party Transactions
Mrs. S. J. F. Evans Non-Executive/
There were no non-recurrent related party Independent **
transactions where the aggregate value of the Mr. R. H. Meewakkala Executive
non-recurrent related party transactions exceed (Appointed Chief
10% of the equity or 5% of the total asset Executive Officer
whichever is lower of the Company as per the w.e.f. 01/07/2021)
latest audited financial statements.
Mr. S. Selvanathan Executive

2. Recurrent Related Party Transactions Mr. S. Clini Non-Executive

Ms. V. Gun L. L. Non-Executive
There were no Recurrent Related Party
Transactions entered into by the Company, where Mr. S. K. Shah Executive
the aggregate value of the recurrent Related Party (Retired as Chief
Transactions exceed 10% of the Gross Revenue/ Executive Officer/
Income of the Group, as per the latest audited Director w.e.f.
financial statements. 30/06/2021)

Annual Report 2021/22 17

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY

Each of the Non-Executive Directors of the

Directors Meetings
Company have submitted a signed declaration on
Attended
Independence/ Non-Independence as per Rule
7.10.2(b) of the Listing Rules of the Colombo Stock Mr. D. A. Cabraal (Chairman) 5/5
Exchange (CSE). The said declarations were tabled Mr. H. Selvanathan (Deputy
at a Board Meeting of the Board of Directors of Chairman) 5/5
the Company held on 21st June 2022, in order
Mr. D. C. R. Gunawardena 5/5
to enable the Board of Directors to determine the
Independence/ Non-Independence of each of the Mr. D. R. P. Goonetilleke 5/5
Non-Executive Directors, in terms of Rule 7.10.3(a) Mr. K. Selvanathan (Director
of the Listing Rules of the CSE. / Alternate Director to Mr. H.
Selvanathan) 5/5
* The Board has determined that
Mr. D. A. Cabraal is an Independent/ Mrs. S. J. F. Evans 5/5
Non-Executive Director in spite of being a Mr. R. H. Meewakkala
Director of Ceylon Beverage Holdings PLC, (Appointed Chief Executive
which has a substantial shareholding in the Officer w.e.f. 01/07/2021) 5/5
Company, since he is not directly involved in Mr. S. Selvanathan 5/5
the management of the Company.
Mr. S. Clini 3/5
** The Board has determined that Ms. V. Gun L. L. 5/5
Mrs. S. J. F. Evans is an Independent/
Non-Executive Director in spite of being a Mr. S. K. Shah (Retired as
Director of Ceylon Beverage Holdings PLC, Chief Executive Officer/
which has a substantial shareholding in the Director w.e.f. 30/06/2021) 1/1
Company and in spite of being on the Board
for more than 9 years since she is not directly Board Evaluation
involved in the management of the Company. Each Director individually appraises the
Board’s performance to ensure discharging its
Directors’ Meetings Attendance responsibilities satisfactorily. This process takes in
to account and evaluates all aspects in relation to
As permitted by Article 83 (1)(b) of the Articles of
Board responsibilities.
Association of the Company, during the period
under review, the Board of Directors had five (05)
virtual Board Meetings through Microsoft Teams Independent observations made by the Directors
and the attendance of the Directors were as are collated and addressed by the Nomination
follows; Committee of the Company and recommended
as relevant, to the Board of Directors for
consideration.

18 Lion Brewery (Ceylon) PLC

Audit Committee
Remuneration Executive / Non-
The Parent Company of the Company is Ceylon Committee Members Executive/ Independent
Beverage Holdings PLC (CBHPLC) and Carson Mr. T. de Zoysa Non-Executive/
Cumberbatch PLC (CCPLC) in turn is the Parent (Chairman) Independent Director of
Company of CBHPLC. As per the Rule 7.10.6 of CCPLC
the Listing Rules of the Colombo Stock Exchange,
Mr. D. C. R. Non-Executive Director of
the Audit Committee of CCPLC functions as the
Gunawardena CCPLC
Audit Committee of the Company.
Mr. R. Theagarajah Non-Executive/
Audit Committee Executive/ Non-Executive/ Independent Director of
Members Independent CCPLC
Mr. W. M. R. S. Dias Non-Executive/
Mr. A. S. Amaratunga Non-Executive/
Independent Director of
Independent Director of
CCPLC
CCPLC
Mr. D. C. R. Non-Executive Director of Scope and Objective
Gunawardena CCPLC
Mr. Y.H. Ong Non-Executive/ The Remuneration Committee has established
Independent Director of a formal and transparent procedure for the
CCPLC development of a remuneration policy, which will
be reviewed by the Committee when deemed
necessary.
Mr. R. H. Meewakkala ceased to be the Observer
representing the Beverage Sector at the Carson
Cumberbatch PLC Audit Committee Meetings The remuneration policy has been formulated
following his appointment as Chief Executive based on market and industry factors with
Officer of the Company w.e.f. 01st July 2021. appropriate incentives to encourage enhanced
performance and also in a fair and responsible
manner for all group companies.
The Audit Committee Report is given on page 24
to 26 of this Annual Report.
Functions and Proceedings
Remuneration Committee The Remuneration Committee recommends
to the Board the remuneration to be paid to
The Parent Company of the Company is Ceylon
the Chief Executive Officer, Executive Directors
Beverage Holdings PLC (CBHPLC) and Carson
and Non-Executive Directors. Based on the
Cumberbatch PLC (CCPLC) in turn is the Parent
recommendation of the Remuneration Committee,
Company of CBHPLC. As per the Rule 7.10.5 of
the Board approves remuneration to the respective
the Listing Rules of the Colombo Stock Exchange,
Directors.
the Remuneration Committee of CCPLC functions
as the Remuneration Committee of the Company.

Annual Report 2021/22 19

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY

The Chief Executive Officer, Director-in-charge Nomination Committee

and other members of senior management may
be invited to attend meetings to discuss the Nomination Executive / Non-
performance of the Executive Directors and make Committee Members Executive/ Independent
proposals as necessary. Neither Executive or
Mr. D. A. Cabraal Non-Executive/
Non-Executive Directors are involved in
(Chairman) Independent Director
Remuneration Committee meetings when
determinations are made in relation to the Mrs. S. J. F. Evans Non-Executive/
remuneration of the respective Directors. Independent Director
Mr. D. C. R. Non-Executive Director
The Committee is authorised by the Board to seek Gunawardena
appropriate professional advice internally and
externally as and when it considers this necessary. Scope and Objective

The primary objective of the Nomination

The Remuneration Committee Charter requires
Committee is to lead the process for Board
the Committee to meet at least twice a year. As
appointments of new Directors to the Board.
allowed by the Remuneration Committee Charter,
the Committee held two (02) virtual meetings
Functions and Proceedings
during the period under review.
The Nomination Committee recommends new
Remuneration Committee Attended appointments to the Board. Based on the
Members Meetings recommendation of the Nomination Committee,
the Board approves the new appointments of
Mr. T. de Zoysa (Chairman) 1/2
Executive and Non-Executive Directors to the
Mr. D.C.R. Gunawardena 2/2 Board.
Mr. R. Theagarajah 2/2
Mr. W.M.R.S. Dias 2/2 Any Director of the Board and the Chief Executive
Officer/ Director-in-Charge and other members
Reporting and Responsibilities of senior management may be invited to attend
Meetings of the Nomination Committee. The
The Committee Chairman reports to the Board Committee may also invite appointed external
on its proceedings on all matters within its duties consultants to aid the Committee in the discharge
and responsibilities. The Committee makes of its duties.
recommendations to the Board as deemed
appropriate on any area within its limit where action
The Committee is authorised by the Board to seek
or improvements are needed.
appropriate professional advice internally and
externally as and when considered necessary.
Aggregated remuneration paid to the
Non-Executive Directors of the Company is disclosed
The Nomination Committee Charter requires
under Note 27 on page 82 of the Annual Report.
the Committee to meet at least twice a year. As
allowed by the Nomination Committee Charter, the

20 Lion Brewery (Ceylon) PLC

Committee held two (02) virtual meetings during March 2022 was announced on 13th May
the period under review. 2022. Shareholders of the Company who
had provided accurate bank account details
Nomination Committee Members Meetings were paid on 01st June 2022 and to the
Attended Shareholders who have not provided accurate
bank account details or have not provided any
Mr. D. A. Cabraal (Chairman) 2/2
bank account details, the dividends was paid
Mrs. S. J. F. Evans 2/2 on 15th June 2022.
Mr. D. C. R. Gunawardena 2/2
SOLVENCY TEST
DIVIDEND
At the time of approving the above distributions,
1. A First Interim Dividend of Rs.14.40 the Directors were satisfied that the Company
per ordinary share amounting to would meet the Solvency Test requirement under
Rs.1,152,000,000/- for the year ended Section 56(2) of the Companies Act, No. 07 of
31st March 2021 was announced on 2007 immediately after the said distributions.
28th June 2021. Shareholders of the
Company who had provided accurate bank The Company’s Auditors, KPMG, Chartered
account details were paid on 09th July Accountants have issued Certificates of Solvency
2021 and to the Shareholders who had not for the dividends mentioned above, confirming
provided accurate bank account details or had same.
not provided any bank account details, the
dividends was paid on 29th July 2021. STATED CAPITAL

2. A First Interim Dividend of Rs.3.68 per ordinary The Stated Capital of the Company as at 31st
share amounting to Rs.294,400,000/- for the March 2022 was Rs. 2,537,801,310/- consisting of
year ended 31st March 2022 was announced 80,000,000 Ordinary shares.
on 09th November 2021. Shareholders of the
Company who had provided accurate bank There was no change in the Stated Capital of the
account details were paid on 26th November Company during the year.
2021 and to the Shareholders who had not
provided accurate bank account details or had EVENTS OCCURRING AFTER THE
not provided any bank account details, the REPORTING DATE
dividends was paid on 09th December 2021.
Further, to the Note 35 Events Occurring After
the reporting date, no circumstances have arisen
3. A Second Interim Dividend of Rs.17.25
which would require adjustments to or disclosure in
per ordinary share amounting to
the Financial Statements.
Rs.1,380,000,000/- for the year ended 31st

Annual Report 2021/22 21

ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY

SHARE INFORMATION

Information relating to share trading are given on pages 113 and 114 of this Report.

31st March 2022 31st March 2021

Name of Shareholders No. of shares % No. of shares %

1 CEYLON BEVERAGE HOLDINGS PLC 41,798,788 52.25 41,798,788 52.25

2 CARLSBERG BREWERY MALAYSIA BERHAD 20,000,686 25.00 20,000,686 25.00
3 CB NY S/A ALLAN GRAY FRONTIER
MARKETS EQUITY FUND LIMITED 5,589,256 6.99 5,379,636 6.72
4 CARSON CUMBERBATCH PLC A/C NO. 02 4,107,793 5.13 4,107,793 5.13
CARSON CUMBERBATCH PLC A/C NO. 01 1,778,808 2.22 1,402,060 1.75
5 BUKIT DARAH PLC A/C NO. 02 1,300,000 1.63 1,300,000 1.63
6 SSBT-AL MEHWAR COMMERCIAL
INVESTMENTS L.L.C. 983,779 1.23 983,779 1.23
7 RBC INVESTOR SERVICES BANK-COELI
SICAV I- FRONTIER MARKETS FUND 683,116 0.85 703,190 0.88
8 BBH-RONDURE NEW WORLD FUND 472,256 0.59 472,256 0.59
9 GF CAPITAL GLOBAL LIMITED 427,179 0.53 468,595 0.59
10 SAMPATH BANK PLC/MRS.PRIYANI
DHARSHINI RATNAGOPAL 300,000 0.38 300,000 0.38
11 DEUTSCHE BANK AG AS TRUSTEE FOR JB
VANTAGE VALUE EQUITY FUND 207,947 0.26 207,947 0.26
12 CITIBANK NEWYORK S/A NORGES BANK
ACCOUNT 2 202,978 0.25 53,768 0.07
13 SSBT-FRANK RUSSEL TRUST COMPANY
COMINGLED BENEFIT FUNDS TRUST
GNA-6QH3 198,268 0.25 303,516 0.38
14 PORTELET LIMITED 161,920 0.20 161,920 0.20
15 TRANZ DOMINION,L.L.C. 129,251 0.16 129,251 0.16
16 METROCORP (PVT) LTD 86,792 0.11 - -
17 NEWGREENS LIMITED 83,200 0.10 83,200 0.10
18 MR. M.A. JAFFERJEE 81,884 0.10 81,884 0.10
19 MR. A.N. ESUFALLY 73,760 0.09 73,760 0.09
20 FERN HOLDINGS (PRIVATE) LIMITED 68,701 0.09 68,701 0.09

22 Lion Brewery (Ceylon) PLC

ANNUAL REPORT The Notice of the Annual General Meeting, setting
out the business which will be transacted thereat is
The information provided herein is in pursuance of
on page 116 of the Annual Report.
the requirements of the Companies Act, No.07 of
2007 and the Listing Rules of the Colombo Stock
Signed on behalf of the Board,
Exchange.

(Sgd.) (Sgd.)
The Board of Directors have approved the Audited
R. H. Meewakkala D. R. P. Goonetilleke
Financial Statements of the Company together with
CEO/Director Director
the Reviews and other Reports, which form part of
the Annual Report on 08th July 2022.

(Sgd.)
The appropriate number of copies of the Annual
K. D. De Silva (Mrs)
Report would be submitted to the Colombo Stock
Director
Exchange, the Sri Lanka Accounting and Auditing
Carsons Management Services (Private) Limited
Standards Monitoring Board and the Registrar
Secretaries
General of Companies, within applicable time
frames.
Colombo
08th July 2022
ANNUAL GENERAL MEETING

The 26th Annual General Meeting of the Company

will be held on Wednesday, 03rd August 2022 at
9.00 a.m. at the 8th Floor of No.65C, Dharmapala
Mawatha, Colombo 7, Sri Lanka by means of
audio or audio and visual technology.

Annual Report 2021/22 23

AUDIT COMMITTEE REPORT
The Parent Company of Lion Brewery (Ceylon) Independent Director of United Overseas Bank
PLC (LBCPLC) is Ceylon Beverage Holdings Ltd., Singapore. Mr. Ong had also served at Ernst
PLC (CBHPLC) and Carson Cumberbatch & Young, Singapore for 30 years and was involved
PLC (CCPLC) in turn is the Parent Company of in audit and financial advisory work.
CBHPLC. As provided by the Colombo Stock
Exchange Listing Rules, the Audit Committee of MEETINGS OF THE AUDIT COMMITTEE
CCPLC functions as the Audit Committee of the
Company. The audit aspects of Lion Brewery (Ceylon) PLC
are conducted within the Agenda of CCPLC-Audit
Committee.
The Audit Committee consists of the following
Members:
As allowed by the CCPLC-Audit Committee
Charter, CCPLC-Audit Committee held Eleven (11)
Audit Committee Executive /
virtual Meetings during the financial year to discuss
Members Non-Executive/
matters relating to the Company.
Independent

Mr.A.S. Amaratunga Non-Executive, The attendance of the Members at Committee

(Chairman) Independent (CCPLC) Meetings were as follows:

Mr.D.C.R. Gunawardena Non-Executive (CCPLC)

Audit Committee Meetings
Mr.Y.H. Ong Non-Executive, Members (virtual)
Independent (CCPLC) attended
(out of 11)
Mr.A.S. Amaratunga, a Non-Executive,
Independent Director of CCPLC, is also a Mr.A.S. Amaratunga (Chairman) 11/11
Non-Executive, Independent Director of Hemas
Holdings PLC, Chairman of Hemas Holdings Mr.D.C.R. Gunawardena 11/11
PLC-Audit Committee, Member of MAS Holdings- Mr.Y.H. Ong 11/11
Audit Committee and a Commissioner of PT Agro
Indomas, Indonesia, a subsidiary of CCPLC. The Chief Executive Officer-Beverage Sector,
Director-Finance of the Company, internal
Mr.D.C.R. Gunawardena is a Non-Executive auditors and senior management staff members
Director of CCPLC and in most of its Group also attended the Audit Committee Meetings by
Companies. He is a Fellow of the Chartered invitation.
Institute of Management Accountants, U.K.
The Audit Committee met the External Auditors,
Mr.Y.H. Ong is a Non-Executive, Independent Messrs. KPMG, twice during the year to discuss
Director of CCPLC. He is an Independent the audit scope, including Key Audit Matters and to
Non-Executive Director, Chairman of the Audit deliberate the draft Financial Report and Accounts
Committee and Member of the Nominating at the completion stage of the audit. Committee
Committee of Singapore Power Ltd. and also provides the opportunity to the External
Capitaland Group Pte Ltd. He has served as an Auditors to provide matters of importance via a
private audience.

24 Lion Brewery (Ceylon) PLC

Following the Audit Committee Meetings, the together with the External Auditors Messrs. KPMG,
Chairman-Audit Committee issues a written update prior to release of same to the Regulatory Authorities
for circulation to the Board, as relevant, indicating and to the shareholders. The Audit Committee
the important matters discussed and decisions was provided with confirmations and declarations
taken in respect of the Company. In addition, as required by the Director/CEO, Director-Finance
Minutes/extracts of the Minutes of Audit Committee of the Company and Director-Finance, Carsons
Meetings are circulated to the Board of Directors. Management Services (Private) Limited that the said
financial statements were prepared in accordance
PURPOSE OF THE AUDIT COMMITTEE with the Sri Lanka Accounting Standards and the
information required by the Companies Act No. 7 of
To assist the Board of Directors in fulfilling its 2007 therein and presented a true and fair view of
oversight responsibilities for the financial reporting the Company’s state of affairs as at that date and the
process, the system of internal control over Company’s activities during the year under review.
financial reporting, the audit process and the
Company’s process for monitoring compliance
INTERNAL AUDIT
with laws and regulations, Company policies and
procedures, and the code of conduct. The objectives of the Group Internal Audit
work is to have an independent review of the
To ensure that the internal audit activity is well system of internal controls as established by the
managed, so that it adds value to the organisation management, its adequacy and integrity vis-a-vis
by being objective in providing relevant assurance, objectives served and to determine the extent
contributing to the effectiveness and efficiency of adherence to the controls by staff responsible
of governance, risk management and control for the function and to take corrective/preventive
processes. Also, to select the Company’s action where necessary.
External Auditors and implement a direct
reporting relationship with them and ensuring their The Audit Committee approved the audit plan
independence. for the financial year 2021/2022 and the Group
Internal Audit carried out audits on the Beverage
FINANCIAL STATEMENTS Sector companies based on the plan. The
findings and contents of the Group Internal Audit
The interim financial statements of Lion Brewery reports have been discussed with the relevant
(Ceylon) PLC have been reviewed by the Audit management staff and subsequently the audit
Committee Members at Audit Committee reports were circulated to the Audit Committee and
Meetings, prior to approval by the Board of to the senior management.
Directors and release of same to the Regulatory
Authorities and to the shareholders.
EXTERNAL AUDIT

Based on the audit reporting requirements, the The External Auditors’ Letter of Engagement,
Audit Committee discussed Audit Matters tabled was reviewed and discussed by the Committee
by Messrs. KPMG for inclusion in the audit report. with them and management prior to the
commencement of the audit, and the Committee
The financial statements of Lion Brewery (Ceylon) followed up on the issues raised by the External
PLC for the year ended 31st March 2022 were Auditors.
reviewed at a Meeting of the Audit Committee,

Annual Report 2021/22 25

AUDIT COMMITTEE REPORT

The Members of the Audit Committee have

determined that the independence of Messrs.
KPMG, Chartered Accountants has not been
impaired by any event or service that gives rise
to a conflict of interest. The Committee also
reviewed the arrangements made by the Auditors
to maintain their independence and confirmation
has been received from the Auditors of their
compliance with the independence guidance given
in the Code of Ethics of the Institute of Chartered
Accountants of Sri Lanka.

The Members of the Audit Committee have

concurred to recommend to the Board of Directors
the re-appointment of Messrs. KPMG, Chartered
Accountants, as Auditors for the financial year
ending 31st March 2023, subject to the approval of
the shareholders of Lion Brewery (Ceylon) PLC at
the Annual General Meeting.

(Sgd.)
A.S. Amaratunga
Chairman
Audit Committee
Carson Cumberbatch PLC

08th July 2022

26 Lion Brewery (Ceylon) PLC

RELATED PARTY TRANSACTIONS REVIEW
COMMITTEE REPORT
The Parent Company of Lion Brewery (Ceylon) The attendance of the Members at Committee
PLC is Ceylon Beverage Holdings PLC (CBHPLC) Meetings were as follows:
and Carson Cumberbatch PLC (CCPLC) in turn
is the Parent Company of CBHPLC. As provided RPTRC Members Meetings (virtual)
by the Colombo Stock Exchange Listing Rules, attended
the Related Party Transactions Review Committee (out of 04)
(RPTRC) of CCPLC functions as the RPTRC of the
Company. Mr.W.M.R.S. Dias (Chairman) 4/4
Mr.D.C.R. Gunawardena 4/4
COMPOSITION OF THE COMMITTEE
Mr.H. Selvanathan 3/4
The Members of the RPTRC are as follows: Mr.M. Selvanathan 4/4
Mr.S.K. Shah 4/4
RPTRC Members Executive/
Non-Executive / Mr.R. Theagarajah 3/4
Independent
PURPOSE OF THE COMMITTEE
Mr.W.M.R.S. Dias (Chairman) Non-Executive,
Independent The objective of the RPTRC is to review all Related
(CCPLC) Party Transactions (RPTs) of the Listed Companies
of the Carsons Group, other than those exempted
Mr.D.C.R. Gunawardena Non-Executive by the Carsons Group RPT Code, prior to the
(CCPLC) transaction being entered into or, if the transaction
Mr.H. Selvanathan Executive is expressed to be conditional on such review, prior
(CCPLC) to the completion of the transaction.
Mr.M. Selvanathan Executive
(CCPLC) POLICIES AND PROCEDURES
Mr.S.K. Shah* Non-Executive • The RPTRC reviews the relevant Related Party
(CCPLC) Transactions of the Listed Companies of the
Mr.R. Theagarajah Non-Executive, Carsons Group and where the Committee
Independent decides that the approval of the Board
(CCPLC) of Directors of the respective Companies
are necessary to approve a Related Party
*Executive Director of CCPLC upto 30th June 2021 &
Transaction, such Board approval is obtained
Non-Executive Director of CCPLC w.e.f. 1st July 2021
prior to entering into the relevant Related Party
Transaction.
MEETINGS OF THE RELATED PARTY
TRANSACTIONS REVIEW COMMITTEE • When reviewing a transaction, the RPTRC
would decide whether the proposed
CCPLC-RPTRC held One (01) virtual Meeting in transaction is carried out on an arm’s length
each calendar quarter and a total of Four (04) basis irrespective of whether it is recurrent or
RPTRC Meetings were held during the financial non-recurrent in nature.
year. In addition, the approval of the RPTRC
Members were sought via 10 Circular Resolutions, • Reviewing and approval would be either by
as well as 12 Circular Letters were circulated for meeting of members (subject to quorum being
their information during the financial year. present) or by circulation.

Annual Report 2021/22 27

RELATED PARTY TRANSACTIONS REVIEW COMMITTEE REPORT

• In determining whether to obtain the approval The Related Party Transactions of the Company for
of the Board of Directors for a Related Party the period 1st April 2021 to 31st March 2022 have
Transaction, the RPTRC will take into account, been reviewed by the Members of the RPTRC and
among other factors it deems appropriate, the comments and observations of the Committee
whether the proposed RPTs pose a conflict of have been communicated to the Board of Directors
interest to the Directors. of the Company.

The self-declarations from the Directors and Key (Sgd.)

Management Personnel are obtained for the W.M.R.S. Dias
purpose of identifying parties related to them. Chairman
Further, the guidelines which senior management Related Party Transactions Review Committee
must follow in routing Related Party Transactions to Carson Cumberbatch PLC
the relevant forum, including transaction threshold
values and pricing where applicable have been Colombo
documented even in the case of once approved 08th July 2022
recurrent transactions which are of operational
nature, which as per the Carsons Group RPT Code
need not be repeatedly approved, if within the
broad thresholds.

The RPTRC in discharging its function endeavours

to ensure that :

• there is compliance with the Carsons Group

RPT Code;

• shareholder interests are protected; and

• fairness and transparency are maintained.

The Committee has a criteria for designating

Carsons Group Key Management Personnel (KMP)
and quarterly disclosures are made by the KMPs
so designated, as relevant.

28 Lion Brewery (Ceylon) PLC

FINANCIAL
INFORMATION
30 Financial Calendar
31 Independent Auditor’s Report
36 Statement of Financial Position
38 Statement of Profit or Loss and Other
Comprehensive Income
40 Statement of Changes in Equity
42 Statement of Cash Flows
44 Notes to the Financial Statements
FINANCIAL CALENDAR
Financial Year 31st March 2022

Announcement of Results
1st Quarter 30th June 2021
Issued to Colombo Stock Exchange 13th August 2021

2nd Quarter 30th September 2021

Issued to Colombo Stock Exchange 09th November 2021

3rd Quarter 31st December 2021

Issued to Colombo Stock Exchange 14th February 2022

4th Quarter 31st March 2022

Issued to Colombo Stock Exchange 13th May 2022

Meetings
25th Annual General Meeting 13th August 2021
26th Annual General Meeting 03th August 2022

30 Lion Brewery (Ceylon) PLC

INDEPENDENT AUDITOR’S REPORT

TO THE SHAREHOLDERS OF LION BREWERY Basis for Opinion

(CEYLON) PLC
We conducted our audit in accordance with
Report on the Audit of the Financial Statements Sri Lanka Auditing Standards (SLAuSs). Our
responsibilities under those standards are further
Opinion
described in the Auditor’s Responsibilities for
We have audited the financial statements of Lion the Audit of the Financial Statements section of
Brewery (Ceylon) PLC, (the “Company”) and the our report. We are independent of the Group in
consolidated financial statements of the Company accordance with the Code of Ethics issued by CA
and its subsidiaries (the “Group”), which comprise Sri Lanka (Code of Ethics), and we have fulfilled our
the statement of financial position as at 31st March other ethical responsibilities in accordance with the
2022, the statement of profit or loss and other Code of Ethics. We believe that the audit evidence
comprehensive income, statement of changes in we have obtained is sufficient and appropriate to
equity and statement of cash flows for the year provide a basis for our opinion.
then ended, and notes to the financial statements,
including a summary of significant accounting Key Audit Matters
policies and other explanatory information as set
Key audit matters are those matters that, in our
out on pages 36 to 101 of the Annual Report.
professional judgment, were of most significance
in our audit of the Company financial statements
In our opinion, the accompanying financial
and the consolidated financial statements of the
statements of the Company and the Group give
current period. These matters were addressed
a true and fair view of the financial position of the
in the context of our audit of the Company
Company and Group as at 31st March 2022, and
financial statements and the consolidated financial
of their financial performance and cash flows for
statements as a whole, and in forming our opinion
the year then ended in accordance with Sri Lanka
thereon, and we do not provide a separate opinion
Accounting Standards.
on these matters.

Annual Report 2021/22 31

INDEPENDENT AUDITOR’S REPORT

Revenue Recognition

Refer Note 4.1 for accounting policy and Note 25 for information.

Risk Description Our response

The Company recorded revenues of Our audit procedures included:

Rs.58.57 Bn for year ended 31 March
• Obtaining an understanding of and assessing the
2022.
design, implementation and operating effectiveness of
management’s key internal controls in relation to revenue
Whilst revenue recognition and
recognition from sales transactions.
measurement is not complex for the
Company, the Company operates in • Testing the operating effectiveness of key IT application
a market which is affected by different controls over revenue, in addition to evaluating the
customer behaviour and the various integrity of the general IT control environment with the
discounts and locally imposed duties assistance of IT specialists.
and fees in regard to revenue recognition
• Obtaining an understanding and testing design,
introduce an inherent risk to the revenue
implementation and operating effectiveness of controls
recognition process and determines the
over journal entries and post-closing adjustments on a
respective accounting treatment. This,
sample basis.
together with the focus on volumes and
revenue as key performance measures • Comparing revenue transactions recorded during the
resulted in revenue being selected as a current year, on a sample basis, with invoices, sales
key audit matter. contracts, underlying goods delivery and acceptance
notes, where appropriate, to assess whether the
related revenue was recognised in accordance with the
Company’s revenue recognition accounting policies.

• Agreeing the monthly sales system reports to the

general ledger to ensure that the revenue is accounted
accurately and completely in the general ledger.

• On a sample basis, testing that sales have been

recognised in the correct accounting period and
evaluating whether there are any significant product
returns after the year end.

32 Lion Brewery (Ceylon) PLC

Carrying value of Brands acquired
Refer Note 2.5 for Use of Estimates and Judgments, Note 3.7 for accounting policy and Note 10 for information.

Risk Description Our response

The Company has recognised an Our audit procedures included:

intangible asset relating to Brands
• Evaluating the appropriateness of the impairment
acquired with a carrying value of
testing methodology and consistency of underlying
Rs. 0.67 Bn as at the reporting date.
assumptions via corroborating estimates of future cash
flows and discussing whether they are reasonable and
The annual impairment testing relating
supported by the most recent approved management
to the brand which is an indefinite life
budgets, including expected future performance of the
intangible asset is considered to be a
CGUs, and discussing whether these are appropriate
key audit matter due to the significant
in light of future macroeconomic expectations in the
judgment required in determining the
markets including the latest economic conditions
assumptions to be used to estimate the
pursuant to the Covid-19 outbreak and the prevailing
recoverable amount.
uncertain and volatile macro-economic environment
within the country including our own assessment based
The recoverable amount of the CGU, on the knowledge of the Company and the industry.
which is based on the higher of the value
in use or fair value less costs of disposal, • Recomputing and comparing the data used in the
has been derived from a discounted forecasted cash flow model with information maintained
forecast cash flow model. This model by management and historical trends.
uses several key assumptions, including
• Assessing the adequacy of the financial statement
estimates of future sales volumes,
disclosures, including disclosures of key assumptions
contribution growth rate, terminal value
and judgments.
growth rates and the cost of equity
(discount rate).

Note 35.4 in the Financial Statements

describes the implications of ongoing
economic crisis to the current year
financial statements and the possible
effects of the future implications of
current uncertain macro-economic
environment on the Company’s future
prospects, performance and cash
flows. Management has considered the
uncertainties from these events and
circumstances is prevailing when finalising
these financial statements.

Annual Report 2021/22 33

INDEPENDENT AUDITOR’S REPORT

Other Information Those charged with governance are responsible

for overseeing the Company’s and the Group’s
Management is responsible for the other
financial reporting process.
information. The other information comprises
the information included in the annual report but
Auditor’s Responsibilities for the Audit of the
does not include the financial statements and our
Financial Statements
auditor’s report thereon.
Our objectives are to obtain reasonable assurance
Our opinion on the financial statements does not about whether the financial statements as a whole
cover the other information and we do not express are free from material misstatement, whether due
any form of assurance conclusion thereon. to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
In connection with our audit of the financial is a high level of assurance, but is not a guarantee
statements, our responsibility is to read the other that an audit conducted in accordance with
information and, in doing so, consider whether SLAuSs will always detect a material misstatement
the other information is materially inconsistent when it exists. Misstatements can arise from fraud
with the financial statements or our knowledge or error and are considered material if, individually
obtained in the audit or otherwise appears to be or in the aggregate, they could reasonably be
materially misstated. If, based on the work we have expected to influence the economic decisions
performed, we conclude that there is a material of users taken on the basis of these financial
misstatement of this other information, we are statements.
required to report that fact. We have nothing to
report in this regard. As part of an audit in accordance with SLAuSs,
we exercise professional judgment and maintain
Responsibilities of Management and Those professional skepticism throughout the audit. We
Charged with Governance for the Financial also:
Statements • Identify and assess the risks of material
misstatement of the financial statements,
Management is responsible for the preparation of
whether due to fraud or error, design and
financial statements that give a true and fair view in perform audit procedures responsive to
accordance with Sri Lanka Accounting Standards, those risks, and obtain audit evidence that is
and for such internal control as management sufficient and appropriate to provide a basis
determines is necessary to enable the preparation for our opinion. The risk of not detecting a
of financial statements that are free from material material misstatement resulting from fraud
is higher than for one resulting from error, as
misstatement, whether due to fraud or error.
fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override
In preparing the financial statements, management of internal control.
is responsible for assessing the Group’s ability
• Obtain an understanding of internal control
to continue as a going concern, disclosing, as relevant to the audit in order to design
applicable, matters related to going concern and audit procedures that are appropriate in the
using the going concern basis of accounting circumstances, but not for the purpose of
unless management either intends to liquidate the expressing an opinion on the effectiveness of
Group or to cease operations, or has no realistic the Company and the Group’s internal control.
alternative but to do so. • Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by management.

34 Lion Brewery (Ceylon) PLC

• Conclude on the appropriateness of From the matters communicated with those
management’s use of the going concern charged with governance, we determine those
basis of accounting and, based on the matters that were of most significance in the
audit evidence obtained, whether a material
audit of the financial statements of the current
uncertainty exists related to events or
conditions that may cast significant doubt period and are therefore the key audit matters.
on the Group’s ability to continue as a going We describe these matters in our auditor’s report
concern. If we conclude that a material unless law or regulation precludes public disclosure
uncertainty exists, we are required to draw about the matter or when, in extremely rare
attention in our auditor’s report to the related circumstances, we determine that a matter should
disclosures in the financial statements or, if
not be communicated in our report because
such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the adverse consequences of doing so would
the audit evidence obtained up to the date of reasonably be expected to outweigh the public
our auditor’s report. However, future events or interest benefits of such communication.
conditions may cause the Group to cease to
continue as a going concern. Report on Other Legal and Regulatory
• Evaluate the overall presentation, structure Requirements
and content of the financial statements,
including the disclosures, and whether the As required by section 163 (2) of the Companies
financial statements represent the underlying Act No. 07 of 2007, we have obtained all the
transactions and events in a manner that information and explanations that were required
achieves fair presentation. for the audit and, as far as appears from our
• Obtain sufficient appropriate audit evidence examination, proper accounting records have been
regarding the financial information of the kept by the Company.
entities or business activities within the
Group to express an opinion on the financial CA Sri Lanka membership number of the
statements. We are responsible for the engagement partner responsible for signing this
direction, supervision and performance of the independent auditor’s report is 1798.
group audit. We remain solely responsible for
our audit opinion.

We communicate with those charged with

Chartered Accountants
governance regarding, among other matters,
Colombo, Sri Lanka
the planned scope and timing of the audit and 08th July 2022
significant audit findings, including any significant
deficiencies in internal control that we identify
during our audit.

We also provide those charged with governance

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

Annual Report 2021/22 35

STATEMENT OF
FINANCIAL POSITION
Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s Notes

ASSETS

Non-Current Assets
Property, plant & equipment 8 18,829,387 17,408,326 20,542,588 18,819,887
Right of use assets 9 151,914 164,119 151,914 164,119
Intangible assets 10 750,093 1,225,109 750,093 1,225,109
Investments in subsidiary 11 1,029,623 1,029,623 - -
Total non-current assets 20,761,017 19,827,177 21,444,595 20,209,115

Current Assets
Inventories 12 4,438,517 3,493,117 4,438,517 3,493,117
Trade and other receivables 13 1,791,119 1,334,241 1,796,357 1,340,316
Amounts due from related companies 14 374,178 445,619 374,178 445,619
Cash and cash equivalents 15 12,889,986 9,525,907 13,013,232 9,665,398
Total current assets 19,493,800 14,798,884 19,622,284 14,944,450
Total assets 40,254,817 34,626,061 41,066,879 35,153,565

EQUITY AND LIABILITIES

Equity
Stated capital 16 2,537,801 2,537,801 2,537,801 2,537,801
Capital reserves 17 1,487,870 972,968 2,092,103 1,388,475
Retained earnings 15,657,552 13,380,781 15,297,757 13,048,135
Total equity 19,683,223 16,891,550 19,927,661 16,974,411

Non-Current Liabilities
Loans and borrowings 18 2,300,311 3,497,060 2,300,311 3,497,060
Lease creditor 9 160,546 165,321 160,546 165,321
Employee benefits 19 173,704 233,933 173,704 233,933
Net deferred tax liabilities 20 4,660,920 4,646,786 5,225,626 5,088,525
Total non-current liabilities 7,295,481 8,543,100 7,860,187 8,984,839

36 Lion Brewery (Ceylon) PLC

 Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s Notes

Current liabilities
Trade and other payables 21 3,234,345 1,873,132 3,235,794 1,874,996
Amounts due to related companies 22 155,756 123,342 155,756 122,828
Refundable deposits 23 2,301,181 1,900,393 2,301,181 1,900,393
Current tax liabilities 24 3,116,118 2,383,576 3,117,587 2,385,113
Loans and borrowings 18 3,347,696 1,868,664 3,347,696 1,868,664
Lease creditor 9 24,531 19,900 24,531 19,900
Bank overdrafts 15 1,096,486 1,022,404 1,096,486 1,022,421
Total Current Liabilities 13,276,113 9,191,411 13,279,031 9,194,315
Total Liabilities 20,571,594 17,734,511 21,139,218 18,179,154
Total Equity and Liabilities 40,254,817 34,626,061 41,066,879 35,153,565
Net assets per ordinary share (Rs.) 246.04 211.14 249.10 212.18

The Notes to the Financial Statements from page 44 to 101 form an integral part of these Financial
Statements.

I certify that the above Financial Statements comply with the requirements of Companies Act No.07 of 2007.

(Sgd.)
J.N. Goonaratne
Financial Controller-Corporate

The Board of Directors is responsible for the preparation and presentation of these Financial
Statements.

Approved and signed on behalf of the Managers Approved and signed on behalf of the Board

(Sgd.) (Sgd.) (Sgd.)

V. R. Wijesinghe R. H. Meewakkala D.R.P. Goonetilleke
Director Director Director

Carsons Management Services (Private) Limited

08th July 2022
Colombo

Annual Report 2021/22 37

STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s Notes

Revenue 25 58,570,885 49,849,287 58,570,885 49,849,287

Cost of sales (46,796,863) (39,828,971) (46,796,863) (39,828,971)
Gross profit 11,774,022 10,020,316 11,774,022 10,020,316
Other income 26 189,598 331,241 189,902 338,404
11,963,620 10,351,557 11,963,924 10,358,720

Distribution expenses (3,397,314) (2,815,812) (3,397,314) (2,815,812)

Administrative expenses (2,122,587) (1,617,768) (2,156,933) (1,665,071)
Other expenses (672,990) (562,558) (672,990) (722,816)
Impairment of intangible assets 10 (463,578) (449,084) (463,578) (449,084)
Profit from operations 27 5,307,151 4,906,335 5,273,109 4,705,937
Finance income 28 644,827 688,286 648,869 695,281
Finance costs 28 (389,793) (1,143,396) (389,793) (1,143,396)
Net finance income / (cost) 255,034 (455,110) 259,076 (448,115)

Profit before taxation 5,562,185 4,451,225 5,532,185 4,257,822

Income tax expense 29 (2,214,371) (1,815,068) (2,214,371) (1,815,068)
Deferred taxation 29 347,440 (43,743) 350,291 28,342
Profit for the year 3,695,254 2,592,414 3,668,105 2,471,096

38 Lion Brewery (Ceylon) PLC

 Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s Notes

Other comprehensive income

Items that will not be reclassified to
profit or loss
Re-measurement of employee benefit
obligations 19 45,763 1,119 45,763 1,119
Deferred tax charge on actuarial gain 29 (18,305) (447) (18,305) (447)
Revaluation gain on land & buildings 8 858,170 - 1,172,713 -
Deferred tax charge on land and building
revaluation 29 (343,268) - (469,085) -
Total other comprehensive income for
the year net of tax 542,360 672 731,086 672
Total comprehensive income for the year 4,237,614 2,593,086 4,399,191 2,471,768

Earnings per ordinary share (Rs.) 46.19 32.41 45.85 30.89

The notes to the Financial Statements from Page 44 to 101 form an integral part of these Financial
Statements.

Figures in brackets indicate deductions.

Annual Report 2021/22 39

STATEMENT OF
CHANGES IN EQUITY
Stated Revaluation Retained Total
In Rs.’000s Capital Reserve Earnings Equity

Company
Balance as at 1st April 2020 2,537,801 972,968 11,427,695 14,938,464
Total comprehensive income for the year
Profit for the year - - 2,592,414 2,592,414
Other comprehensive income for the year - - 672 672
Total comprehensive income for the year - - 2,593,086 2,593,086

Transactions with owners of the company

Distribution made to owners
Ordinary dividends - - (640,000) (640,000)
Balance as at 31st March 2021 2,537,801 972,968 13,380,781 16,891,550

Balance as at 1st April 2021 2,537,801 972,968 13,380,781 16,891,550

Total comprehensive income for the year
Profit for the period - - 3,695,254 3,695,254
Other comprehensive income for the year - 514,902 27,458 542,360
Total comprehensive income for the year - 514,902 3,722,712 4,237,614

Transactions with owners of the company

Distribution made to owners
Ordinary dividends - - (1,446,400) (1,446,400)
Forfeiture of unclaimed dividends - - 459 459
Balance as at 31st March 2022 2,537,801 1,487,870 15,657,552 19,683,223

The notes to the Financial Statements from Page 44 to 101 form an integral part of these Financial
Statements.

Figures in brackets indicate deductions.

40 Lion Brewery (Ceylon) PLC

 Stated Revaluation Retained Total
In Rs.’000s Capital Reserve Earnings Equity

Group
Balance as at 1st April 2020 2,537,801 1,388,475 11,216,367 15,142,643
Total comprehensive income for the year
Profit for the year - - 2,471,096 2,471,096
Other comprehensive income for the year - - 672 672
Total Comprehensive income for the year - - 2,471,768 2,471,768

Transactions with owners of the company

Distribution made to owners
Ordinary dividends - - (640,000) (640,000)
Balance as at 31st March 2021 2,537,801 1,388,475 13,048,135 16,974,411

Balance as at 1st April 2021 2,537,801 1,388,475 13,048,135 16,974,411

Total comprehensive income for the year
Profit for the year - - 3,668,105 3,668,105
Other comprehensive income for the year - 703,628 27,458 731,086
Total comprehensive income for the year - 703,628 3,695,563 4,399,191

Transactions with owners of the company

Distributions made to owners
Ordinary dividends - - (1,446,400) (1,446,400)
Forfeiture of unclaimed dividends - - 459 459
Balance as at 31st March 2022 2,537,801 2,092,103 15,297,757 19,927,661

The notes to the Financial Statements from Page 44 to 101 form an integral part of these Financial
Statements.

Figures in brackets indicate deductions.

Annual Report 2021/22 41

STATEMENT OF CASH FLOWS
Company Group
For the year ended 31st March Notes 2022 2021 2022 2021
In Rs.’000s

Cash flows from operating activities

Profit before taxation 5,562,185 4,451,225 5,532,185 4,257,822
Adjustments for:
Finance costs 28 981,268 1,189,239 981,268 1,189,239
Depreciation on property, plant & equipment 8 1,503,714 1,273,080 1,516,617 1,299,018
Loss on disposal of property, plant &
equipment 12,006 20,557 12,006 21,013
Lease interest expense 9 25,734 28,716 25,734 28,716
Depreciation on right of use assets 9 32,127 32,208 32,127 32,208
Amortisation on intangible assets 10 12,360 7,437 12,360 7,437
Impairment of intangible assets 10 463,578 449,084 463,578 449,084
Net inventory provision / (reversal) 12 (10,315) 1,096 (10,315) 1,096
Provision for retirement benefit obligation 19 14,060 39,267 14,060 39,267
Impairment of property, plant & equipment 8 - - - 160,258
Gain on derecognition of right of use assets - (2,913) - (2,913)
Unrealised foreign exchange gain (614,148) (42,012) (614,148) (42,012)
Deposits written back - (168,072) - (168,072)
Finance income 28 (644,827) (688,286) (648,869) (695,281)
Operating cash flows before working
capital changes 7,337,742 6,590,626 7,316,603 6,576,880
Increase in inventories 12 (935,085) (912,093) (935,085) (912,093)
Increase in trade and other receivables (471,327) (43,201) (470,489) (42,890)
Decrease in amounts due from related
companies 14 71,441 163,405 71,441 163,405
Increase in tax payable 525,085 1,773,928 525,017 1,772,169
Increase in trade and other payables 1,253,147 398,902 1,252,732 391,652
Increase in amounts due to related
companies 22 32,414 14,971 32,928 15,080
Cash generated from operations 7,813,417 7,986,539 7,793,147 7,964,203
Finance expenses paid (939,681) (1,114,498) (939,681) (1,114,496)
Retirement benefits paid 19 (28,526) (2,952) (28,526) (2,952)
Tax paid (2,006,914) (1,301,862) (2,006,914) (1,301,862)
Net cash generated from operating
activities 4,838,296 5,567,227 4,818,026 5,544,893

42 Lion Brewery (Ceylon) PLC

 Company Group
For the year ended 31st March Notes 2022 2021 2022 2021
In Rs.’000s

Cash flows from investing activities

Purchase and construction of property,
plant & equipment 8 (2,092,615) (1,160,021) (2,092,615) (1,160,021)
Proceeds from sale of property, plant &
equipment 14,005 - 14,005 -
Purchase of intangible assets 10 (922) (27,196) (922) (27,196)
Agent deposits received 23 400,788 366,290 400,788 366,290
Interest received 644,827 688,286 648,869 695,281
Net cash used in investing activities (1,033,917) (132,641) (1,029,875) (125,646)

Cash flows from financing activities

Repayments of lease rentals 9 (45,800) (45,162) (45,800) (45,162)
Loans and borrowings obtained 18 2,000,000 3,000,000 2,000,000 3,000,000
Repayments of loans and borrowing 18 (1,759,300) (10,300,300) (1,759,300) (10,300,300)
Forfeiture of unclaimed dividends 459 - 459 -
Dividend paid net of tax (1,445,145) (640,000) (1,445,145) (640,000)
Net cash used in financing activities (1,249,786) (7,985,462) (1,249,786) (7,985,462)

Net increase /(decrease) in cash & cash

equivalents 2,554,593 (2,550,876) 2,538,365 (2,566,215)
Cash & cash equivalents at the beginning
of the year 8,503,503 11,016,002 8,642,977 11,170,815
Effect of exchange rate changes on cash
and cash equivalents 735,404 38,377 735,404 38,377
Cash & cash equivalents at the end of
the year 15 11,793,500 8,503,503 11,916,746 8,642,977

Analysis of cash and cash equivalents

Cash and cash equivalents 12,889,986 9,525,907 13,013,232 9,665,398
Bank overdraft (1,096,486) (1,022,404) (1,096,486) (1,022,421)
11,793,500 8,503,503 11,916,746 8,642,977

The notes to the Financial Statements from Page 44 to 101 form an integral part of these Financial Statements.

Figures in brackets indicate deductions.

Annual Report 2021/22 43

NOTES TO THE FINANCIAL STATEMENTS
1 CORPORATE INFORMATION 2 BASIS OF PREPARATION

1.1 Reporting Entity 2.1 Statement of Compliance

Lion Brewery (Ceylon) PLC (“LBCPLC”) is a The Financial Statements of Lion Brewery
public limited liability Company incorporated and (Ceylon) PLC (Company), and its subsidiaries
domiciled in Sri Lanka and is listed on the Colombo (Group) comprise the Statements of Financial
Stock Exchange. Ceylon Beverage Holdings PLC Position, Statement of Profit or Loss and Other
is the immediate Parent Company of Lion Brewery Comprehensive Income, Statement of Changes in
(Ceylon) PLC. In the opinion of the Directors, Equity, Statement of Cash Flows together with the
Carson Cumberbatch PLC is the Parent Company notes to the Financial Statements. The Financial
of Ceylon Beverage Holdings PLC and Bukit Statements have been prepared in accordance
Darah PLC is the Ultimate Parent and Controlling with Sri Lanka Accounting Standards (hereinafter
Entity of Ceylon Beverage Holdings PLC. The referred to as LKAS/ SLFRS) as laid down by the
registered office of the Company is situated at No Institute of Chartered Accountants of Sri Lanka,
61, Janadhipathi Mawatha, Colombo 01 and the the requirements of the Company’s Act No. 07 of
principal place of business is situated at No 254, 2007 and the listing rules of the Colombo Stock
Colombo Road, Biyagama. Exchange.

Pearl Springs (Private) Limited (PSPL) is a fully The Financial Statements were authorised for issue
owned subsidiary of Lion Brewery (Ceylon) PLC. by the Board of Directors on 08th July 2022.
The Company together with its subsidiary, PSPL
acquired 100% ownership of Millers Brewery 2.2 Basis of measurement
Limited (MBL) in the financial year 2014/15.
The Consolidated Financial Statements have been
prepared on a historical cost basis except for the
The Consolidated Financial Statements for the year
following;
ended 31st March 2022 comprise of the Company
and its subsidiaries (together referred to as the • Land & Building - Fair Value
“Group” and individually Group entities).
• Employee defined benefit obligation -
Actuarially valued and obligation recognised at
Subsidiary Controlling present value of the defined benefit obligation.
interest
Pearl Springs (Private) Limited 100% 2.3 Going Concern

Millers Brewery Limited 100% In preparing the financial statements for the year
ended 31 March 2022, the management has
The principal activities of the Group is brewing and assessed the possible effects of COVID‐19 and
marketing of high quality beers for both local & the current economic crisis, on the businesses of
export markets. the Company and its subsidiaries, to determine
their ability to continue as a going concern.
There were 263 employees in the Company and Based on currently available information, the
the Group as at the reporting date (2021-239). management is satisfied that having taken into
consideration factors that could impact the
revenue, supply chain, cash flows, accessibility to
funds & costs, the Company and its subsidiaries

44 Lion Brewery (Ceylon) PLC

would continue as a going concern. Consequent Information about critical estimates and underlying
to giving due consideration to the presentations assumptions in applying accounting policies that
by management, the Directors are satisfied that have the most significant effect on the amounts
the Company & its subsidiaries have adequate recognised in the financial statements is included in
resources to continue as a going concern for the following notes.
foreseeable future.
• Note 08 - Revaluation of land & building

The Company had positive net assets, working • Note 10 - Impairment test on intangible assets
capital and cash flow positions as at the reporting
• Note 13 - Provision for impairment of debtors
date. Furthermore, management is not aware of
any material uncertainties that may cast significant • Note 19 - Employee benefit obligations
doubt upon the Company’s ability to continue as a
going concern. Therefore, the financial statements • Note 20 - Net deferred tax liabilities
continue to be prepared on a going concern basis. • Note 34 - Commitments & contingencies

2.4 Functional Currency and presentation

2.6 Comparative Information
Currency
The presentation and classification of the Financial
The Financial Statements are presented in
Statements of the previous years have been
Sri Lankan Rupees, which is the Group’s functional
amended where relevant for better presentation
currency. All financial information presented in
and to be comparable with those of the current
Sri Lanka Rupees has been rounded to the nearest
year.
rupee thousands.

2.7 Measurement of Fair value

2.5 Use of estimates and Judgments
A number of the Group’s accounting policies and
The preparation of financial statements in
disclosures require the measurement of fair values
conformity with LKAS / SLFRSs requires
for both financial and non- financial assets and
management to make judgments, estimates
liabilities. The Group regularly reviews significant
and assumptions that affect the application of
unobservable inputs and valuation adjustments.
accounting policies and the reported amounts of
assets, liabilities, income and expenses.
If third party information is used to measure fair
values, the Group assesses the evidence obtained
Judgments and estimates are based on
from the third parties to support the conclusion
historical experience and other factors, including
that such valuations meet the requirements of
expectations that are believed to be reasonable
SLFRS, including the level in the fair value hierarchy
under the circumstances. Hence, actual results
in which such valuations should be classified.
may differ from these judgments and estimates.

Significant valuation issues are reported to the

Estimates and underlying assumptions are
Group’s Audit Committee. When measuring the
reviewed on an ongoing basis. Revisions to
fair value of an asset or a liability, the Group uses
accounting estimates are recognised in the period
observable market data as far as possible. Fair
in which the estimates are revised and any future
values are categorised into different levels in a fair
period affected.

Annual Report 2021/22 45

NOTES TO THE FINANCIAL STATEMENTS

value hierarchy based on the inputs used in the and assets is a business, the Group assesses
valuation techniques as follows: whether the set of assets and activities acquired
includes, at a minimum, an input and substantive
Level 1: Quoted prices (unadjusted) in active
process and whether the acquired set has the
markets for identical assets or liabilities.
ability to produce outputs.

Level 2: Inputs other than quoted prices included in

The Group has an option to apply a ‘concentration
Level 1 that are observable for the asset or liability,
test’ that permits a simplified assessment of
either directly (i.e. as prices) or indirectly (i.e.
whether an acquired set of activities and assets
derived from prices).
is not a business. The optional concentration test
is met if substantially all of the fair value of the
Level 3: Inputs for the asset or liability that is not gross assets acquired is concentrated in a single
based on observable market data (unobservable identifiable asset or group of similar identifiable
inputs). assets.

If the inputs used to measure the fair value of an The consideration transferred in the acquisition
asset or a liability fall into different levels of the fair is generally measured at fair value, as are the
value hierarchy, then the fair value measurement is identifiable net assets acquired. Any goodwill
categorised in its entirety in the same level of the that arises is tested annually for impairment. Any
fair value hierarchy as the lowest level input that is gain on a bargain is recognised in Profit or Loss
significant to the entire measurement. The Group immediately. Transaction costs are expensed as
recognises transfers between levels of the fair value incurred, except if related to the issue of debt or
hierarchy at the end of the reporting period during equity securities.
which the change has occurred.
The Group measures goodwill at the acquisition
3 SIGNIFICANT ACCOUNTING POLICIES date as:
3.1 Changes in Significant Accounting • the fair value of the consideration transferred;
Policies plus
The Group has consistently applied the accounting • the recognised amount of any non-controlling
policies to all periods presented in these Financial interests in the acquiree; plus
Statements.
• if the business combination is achieved in
3.2 Basis of Consolidation stages, the fair value of the pre-existing equity
interest in the acquiree; less
(I) Business Combinations
• the net recognised amount (generally fair value)
The Group accounts for business combinations
of the identifiable assets acquired and liabilities
using the acquisition method when the acquired
assumed.
set of activities and assets meets the definition of
a business and control is transferred to the Group.
In determining whether a particular set of activities

46 Lion Brewery (Ceylon) PLC

(II) Subsidiaries The carrying amount of the investment at the date
Subsidiaries are entities controlled by the Group. that such entity ceases to be a Subsidiary would
The Group controls an entity when it is exposed to, be regarded at the cost of initial measurement of a
or has right to, variable returns from its involvement financial asset.
with the entity and has the ability to affect those
returns through its power over the entity. The (III) Loss of Control
Financial Statements of subsidiaries are included When the Group loses control over a subsidiary,
in the Consolidated Financial Statements from the it derecognises the assets and liabilities of
date on which control commences until the date the subsidiary, and any related NCI and other
on which control ceases. The Group re-assesses components of equity. Any resulting gain or loss
whether or not it controls an investee if facts and is recognised in the Profit or Loss. Any interest
circumstances indicate that there are changes to retained in the former subsidiary is measured at fair
one or more of the elements of control. value when control is lost.

The cost of an acquisition is measured at the fair (IV) Non-Controlling Interest

value of the consideration, including contingent
The Non-Controlling Interest is presented in the
consideration. The acquired identifiable assets,
Consolidated Statement of Financial Position within
liabilities and contingent liabilities are measured
equity, separated from the equity attributable to
at their fair value at the date of acquisition,
the Equity Holders to the Group. Non-controlling
subsequent to the acquisition the Company
Interest in the Profit or Loss of the Group is
continues to recognise the investment in
disclosed separately in the Consolidated Statement
subsidiaries at cost.
of Profit or Loss and other Comprehensive Income.
However, the Group does not have non-controlling
During the year the Company has held the interest as of the reporting date, as subsidiaries are
following subsidiaries: wholly owned by the Company.

Subsidiary Controlling (V) Financial Period

interest The Consolidated Financial Statements are
prepared to a common financial year ending
Pearl Springs (Private) Limited 100%
31st March.
Millers Brewery Limited 100%
(Held through PSPL) (VI) Intra-Group Transactions
Intra-group balances, intra-group transactions
The accounting policies of Subsidiaries have been and resulting unrealised profits are eliminated
changed where necessary to align them with the in full in the Financial Statements. Unrealised
policies adopted by the Group. losses resulting from intra-group transactions are
eliminated unless the cost cannot be recovered.
In the Company’s Financial Statements,
investments in subsidiaries are carried at cost less
impairment if any.

Annual Report 2021/22 47

NOTES TO THE FINANCIAL STATEMENTS

3.3 Foreign Currency Transactions A financial asset (unless it is a trade receivable

without a significant financing component) or
Transactions in foreign currencies are translated to
financial liability is initially measured at fair value
Sri Lankan Rupees at the foreign exchange rates at
plus, for an item not at fair value through profit or
the dates of the transactions.
loss (FVTPL), transaction costs that are directly
attributable to its acquisition or issue. A trade
Monetary assets and liabilities denominated in receivable without a significant financing component
foreign currencies are translated to Sri Lankan is initially measured at the transaction price.
Rupees at the foreign exchange rate ruling as at
the reporting date.
3.4.1 Financial Assets

Foreign exchange differences arising on the Classification and subsequent measurement of

settlement or reporting of the Group’s monetary financial assets
items at rates different from those which were
On initial recognition, a financial asset is classified
initially recorded are dealt with in the Profit or Loss.
as measured at: amortised cost; fair value through
other comprehensive income (FVOCI) - debt
Non-monetary assets and liabilities denominated in investment; fair value through other comprehensive
foreign currencies that are stated at historical cost income (FVOCI) - equity investment; or fair value
at the reporting date are translated to Sri Lankan through profit or loss (FVTPL). Financial assets
Rupees at the foreign exchange rate ruling at the are not reclassified subsequent to their initial
date of initial transaction. recognition unless the Group changes its business
model for managing financial assets, in which case
Non-monetary assets & liabilities that are stated at all affected financial assets are reclassified on the
fair value, denominated in foreign currencies are first day of the first reporting period following the
translated to Sri Lanka Rupees at the exchange change in the business model.
rate ruling at the dates that the values were
determined. Foreign exchange differences arising A financial asset is measured at amortised cost if
on translation are recognised in the Profit or Loss. it meets both of the following conditions and is not
designated as at FVTPL;
3.4 Financial instruments Recognition and
initial measurement • it is held within a business model whose
objective is to hold assets to collect
Trade receivables and debt securities issued are contractual cash flows; and
initially recognised when they are originated.
• its contractual terms give rise on specified
dates to cash flows that are solely payments of
All other financial assets and financial liabilities
principal and interest on the principal amount
are initially recognised when the Group becomes
outstanding.
a party to the contractual provisions of the
instrument.

48 Lion Brewery (Ceylon) PLC

The Group’s financial assets classified and Financial assets - Business model assessment
measured at amortised cost are limited to its trade
The Group makes an assessment of the objective
debtors, related party receivables, short term
of the business model in which a financial asset is
investments and cash & cash equivalents.
held at a portfolio level because this best reflects
the way the business is managed and information
A debt investment is measured at FVOCI if it
is provided to management.
meets both of the following conditions and is not
designated as at FVTPL; The information considered includes:

• it is held within a business model whose • the stated policies and objectives for
objective is achieved by both collecting the portfolio and the operation of those
contractual cash flows and selling financial policies in practice. These include whether
assets; and management’s strategy focuses on earning
contractual interest income, maintaining a
• its contractual terms give rise on specified particular interest rate profile, matching the
dates to cash flows that are solely payments of duration of the financial assets to the duration
principal and interest on the principal amount of any related liabilities or expected cash
outstanding. outflows or realising cash flows through the
sale of the assets;
On initial recognition of an equity investment that
• how the performance of the portfolio is
is not held for trading, the Group may irrevocably
evaluated and reported to the Group’s
elect to present subsequent changes in the
management;
investment’s fair value in OCI. This election is made
on an investment-by investment basis. • the risks that affect the performance of the
business model (and the financial assets held
All financial assets not classified as measured at within that business model) and how those
amortised cost or FVOCI as described above are risks outstanding during a particular period
measured at FVTPL. This includes all derivative of time and for other basic lending risks and
financial assets. On initial recognition, the Group costs (e.g. liquidity risk and administrative
may irrevocably designate a financial asset that costs), as well as a profit margin.
otherwise meets the requirements to be measured
• how managers of the business are compensated
at amortised cost or at FVOCI as at FVTPL if doing
- e.g. whether compensation is based on the fair
so eliminates or significantly reduces an accounting
value of the assets managed or the contractual
mismatch that would otherwise arise.
cash flows collected; and

The Group does not have any financial assets • the frequency, volume and timing of sales of
classified and measured at fair value through financial assets in prior periods, the reasons
profit or loss (FVTPL) or fair value through other for such sales and expectations about future
comprehensive income (FVOCI). sales activity.

Annual Report 2021/22 49

NOTES TO THE FINANCIAL STATEMENTS

Transfers of financial assets to third parties in 3.4.2 Financial liabilities

transactions that do not qualify for derecognition
Classification, subsequent measurement and
are not considered sales for this purpose,
gain and losses
consistent with the Group’s continuing recognition
of the assets. Financial assets that are held for Financial liabilities were classified as measured
trading or are managed and whose performance at amortised cost or FVTPL. A financial liability
is evaluated on a fair value basis are measured at was classified as FVTPL if it was classified as
FVTPL. held – for – trading, it was a derivative or it was
designated as such on initial recognition. Financial
Financial assets -Assessment whether liabilities at FVTPL were measured at fair value and
contractual cash flows are solely payments of gains and losses, including any interest expense,
principal and interest were recognised in profit or loss. Other financial
liabilities were subsequently measured at amortised
For the purposes of this assessment, ‘principal’
cost using the effective interest method. Interest
is defined as the fair value of the financial asset
expense and foreign exchange gains and losses
on initial recognition. ‘Interest’ is defined as
were recognised in profit or loss. Any gain or loss
consideration for the time value of money and for
on derecognition was recognised in profit or loss.
the credit risk associated with the principal amount
outstanding during a particular period of time and
3.4.3 De-recognition
for other basic lending risks and costs (e.g. liquidity
risk and administrative costs), as well as a profit Financial assets
margin.
The Group derecognised a financial asset when
the contractual rights to the cash flows from the
In assessing whether the contractual cash flows
financial asset expired, or it transferred the rights to
are solely payments of principal and interest, the
receive the contractual cash flows in a transaction
Group considers the contractual terms of the
in which substantially all of the risks and rewards
instrument. This includes assessing whether the
of ownership of the financial asset were transferred
financial asset contains a contractual term that
or in which the Group neither transfers nor
could change the timing or amount of contractual
retains substantially all of the risks and rewards
cash flows such that it would not meet this
of ownership and it does not retain control of the
condition.
financial asset.

Financial assets - Subsequent measurement and

The Group entered into transactions whereby it
gains and losses
transferred assets recognised in its statement
Financial assets at amortised cost of financial position, but retained either all or
These assets are subsequently measured at substantially all of the risks and rewards of the
amortised cost using the effective interest method. transferred assets. In these cases, the transferred
The amortised cost is reduced by impairment assets were not derecognised.
losses. Interest income, foreign exchange gains
and losses and impairment are recognised in
profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.

50 Lion Brewery (Ceylon) PLC

Financial liabilities • other debt securities and bank balances
for which credit risk (i.e. the risk of default
The Group derecognised a financial liability when
occurring over the expected life of the financial
its contractual obligations were discharged
instrument) has not increased significantly
or cancelled, or expired. The Group also
since initial recognition.
derecognised a financial liability when its terms
were modified and the cash flows of the modified
Loss allowances for trade receivables is always
liability were substantially different, in which case a
measured at an amount equal to lifetime ECLs.
new financial liability based on the modified terms
were recognised at fair value. On derecognition
of a financial liability, the difference between The Group uses simplified approach to measure
the carrying amount extinguished and the expected credit losses which uses a lifetime
consideration paid (including any non-cash assets expected loss allowance for all trade and other
transferred or liabilities assumed) was recognised receivables. When determining whether the credit
in profit or loss. risk of a financial asset has increased significantly
since initial recognition and when estimating ECLs,
the Group considers reasonable and supportable
3.4.4 Offsetting
information that is relevant and available without
Financial assets and financial liabilities were offset undue cost or effort.
and the net amount presented in the statement
of financial position when, and only when, the Credit-impaired financial assets
Group had a legally enforceable right to set off the
amounts and it intends either to settle them on At each reporting date, the Group assesses
a net basis or to realise the asset and settle the whether financial assets carried at amortised cost
liability simultaneously. are credit impaired. A financial asset is ‘credit-
impaired’ when one or more events that have a
detrimental impact on the estimated future cash
3.4.5 Impairment
flows of the financial asset have occurred.
Financial instruments and contract assets
Evidence that a financial asset is credit- impaired
The Group recognises loss allowances for
includes the following observable data:
Expected Credit Losses (ECLs) on:
• significant financial difficulty of the debtor
• financial assets measured at amortised cost;
• a breach of contract such as a default;
The Group measures loss allowances at an amount
• it is probable that the debtor will enter
equal to lifetime ECLs, except for the following,
bankruptcy or other financial reorganisation
which are measured at 12-month ECLs:
Presentation of allowance for ECL in the
• debt securities that are determined to have
statement of financial position
low credit risk at the reporting date; and
Loss allowances for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets. For debt securities
at FVOCI, the loss allowance is charged to profit
or loss.

Annual Report 2021/22 51

NOTES TO THE FINANCIAL STATEMENTS

3.4.6 Write-off Impairment losses are recognised in the Profit or

Loss. Impairment losses recognised in respect
The gross carrying amount of a financial asset
of CGUs are allocated first to reduce the carrying
is written off when the Group has no reasonable
amount of any goodwill allocated to CGU (if any)
expectations of recovering a financial asset in
and then to reduce the carrying amounts of other
its entirety or a portion thereof. For individual
assets in the CGU (group of CGUs) on pro rata
customers, the Group has a policy of writing off
basis. For other assets, an impairment loss is
the gross carrying amount when the financial asset
reversed only to the extent that the assets carrying
is irrevocable based on historical experience of
amount does not exceed the carrying amount that
recoveries of similar assets. For Agents, the Group
would have been determined, net of depreciation
individually makes an assessment with respect
or amortisation, if no impairment loss had been
to the timing and amount of write-off based on
recognised.
whether there is a reasonable expectation of
recovery. However, financial assets that are written
3.5 Property, plant & equipment
off could still be subject to enforcement activities
in order to comply with the Group’s procedures to Recognition & Measurement
recovery of amounts due. Further, write off requires
the approval of Board of Directors. Property, plant & equipment are tangible items
that are held for servicing, or for administrative
purposes and are expected to be used during
3.4.7 Impairment of Non-Financial Assets
more than one period.
The carrying amounts of the Group’s non- financial
assets are reviewed at each reporting date to (I) Recognition
determine whether there is any indication of
Property, plant & equipment are recognised if it is
impairment. If any such indication exists, then the
probable that future economic benefits associated
asset’s recoverable amount is estimated.
with the assets will flow to the Group and cost of
the asset can be reliably measured.
An impairment loss is recognised if the carrying
amount of an assets or cash generating unit (CGU)
(II) Measurement
exceeds its recoverable amount. The recoverable
amount of an asset or CGU is the greater of its An item of Property, Plant and Equipment that
value in use and its fair value less costs to sell. qualifies for recognition as an asset is initially
measured at its cost. Cost includes expenditures
that are directly attributable to the acquisition of the
In assessing value in use, the estimated future
asset. The cost of self-constructed assets includes
cash flows are discounted to their present value
the cost of materials and direct labour, any other
using a pre-tax discount rate that reflects current
cost directly attributable to bringing the asset to
market assessments of the time value of money
a working condition for its intended use, and the
and the risks specific to the asset or CGU. For
cost of dismantling and removing the items and
impairment testing, assets are grouped together
restoring the site on which they are located.
into the smallest group of assets that generates
cash inflows from continuing use that are largely
independent of the cash inflows of other assets or Purchased software that is integrated to the
CGUs. functionality of the related equipment is capitalised
as part of that equipment.

52 Lion Brewery (Ceylon) PLC

Expenditure on repairs or maintenance of property, (V) Depreciation
plant and equipment made to restore or maintain Depreciation is recognised in the Profit or Loss
future economic benefits expected from the assets on a straight-line basis over the estimated useful
has been recognised as an expense when incurred. lives of each part of an item of property, plant and
equipment. The estimated useful lives of the assets
The Group applies the revaluation model for are as follows.
freehold land and buildings while cost model is
applied for other items classified under Property
Plant and Equipment. Asset Lion Millers
Brewery Brewery
(III) Subsequent Expenditure (Ceylon) Limited
PLC Years
Expenditure incurred to replace a component
Years
of an item of property, plant and equipment that
is accounted for separately, including major Freehold buildings 2 - 50 40
inspection and overhaul expenditure, is capitalised. Plant & machinery 3 - 22 20
The cost of replacing part of an item of Property,
Plant & Equipment is recognised in the carrying Furniture & fittings 5 -10 5
amount of the item, if it is probable that the future Office equipment 3 - 10 5
economic benefits embodied within the part will
Computer equipment 2-5 3
flow to the Group and its cost can be measured
reliably. The carrying amount of the replaced part is Returnable containers 5 -
derecognised. The cost of the day-to-day servicing Motor vehicles 4-5 5
of property, plant and equipment are recognised
in the Profit or Loss as and when the expense is Laboratory equipment 4 -5 -
incurred.
Depreciation of an asset begins when it is available
(IV) Revaluation of Land and Buildings for use, i.e. when it is in the location and condition
necessary for it to be capable of operating in the
The freehold land and buildings of the Company
manner intended by the management. Depreciation
and subsidiaries have been revalued and
of an asset ceases at the earlier of the date that the
revaluation of these assets is carried out at least
asset is classified as held for sale (or included in a
once in every two years in order to ensure that
disposal group that is classified as held for sale) and
the book values reflect the realisable values. Any
the date the asset is derecognised. Depreciation
surplus or deficit that arises is recognised in other
methods, useful lives and residual values are
comprehensive income and accumulated in equity
reviewed at each reporting date.
in the asset revaluation reserve except to the
extent that it reverses a revaluation decrease of
(VI) Borrowing Costs
the same asset previously recognised in income
statement in which case the increase is recognised Borrowing costs directly attributable to the
in the income statement. acquisition, construction or production of qualifying
assets that necessarily take a substantial period
A revaluation deficit is recognised in the income of time to get ready for their intended use, are
statement except to the extent that it offsets an added to the cost of those assets, until such time
existing surplus on the same asset recognised in the assets are substantially ready for their intended
the asset revaluation reserve. use. Borrowing Costs include foreign exchange

Annual Report 2021/22 53

NOTES TO THE FINANCIAL STATEMENTS

differences to the extent that such differences and where the carrying value exceed the estimated
are regarded as an adjustment to interest cost as recoverable amount the assets are written down
permitted by the accounting standards. to their recoverable amount. Impairment losses are
recognised in the Profit or Loss unless it reverses a
(VII) Refundable Deposits & Returnable previous revaluation surplus for the same asset.
Containers
Returnable containers are classified under (x) De-recognition
Property, Plant and Equipment. All purchases An item of Property, Plant and Equipment is
of returnable containers except empty bottles de-recognised upon disposal or when no future
meant for Exports and specific local brands are economic benefits are expected from its use. Any
recognised at cost and depreciated over a period gain or loss arising on de-recognition of the asset
of 5 years. In the event a returnable container is included in the Profit or Loss in the year the
breaks within the premises of the Group, the asset is de-recognised.
written down value on a first in first out (FIFO) basis
will be charged to the Profit or Loss. When replacement costs are recognised in the
carrying amount of an item of Property, Plant and
Empty bottles used for exports are recognised Equipment, the remaining carrying amount of the
as an expense in the Profit or Loss at the time replaced part is de-recognised. Major inspection
the export takes place. Deposits are collected costs are capitalised. At each such capitalisation
from the agents for the returnable containers in the remaining carrying amount of the previous cost
their possession and are classified under Current of inspections is de-recognised.
Liabilities. The said deposit will be refunded to the
agent only upon them returning these returnable 3.6 Leases
containers due to cessation of their operation or
due to contraction in sales. At inception of a contract, the Group assesses
whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract
(VIII) Capital Work-in-Progress
conveys the right to control the use of an
The cost of self-constructed assets includes identified asset for a period of time in exchange
the cost of materials, direct labour, and direct for a consideration. To assess whether a contract
overheads including any other costs directly conveys the right to control the use of an identified
attributable to bring the assets to a workable asset, the Group assess whether:
condition of their intended use and capitalised
borrowing cost. Capital Work-In-Progress is • The contract involves the use of an identified
transferred to the respective asset accounts asset - this may be specified explicitly or
when the asset is available for use and all work implicitly, and should be physically distinct or
connected to construction is completed. represent substantially all of the capacity of
a physically distinct asset. If the supplies has
(IX) Impairment of Property, Plant and substantive substitution right, then the asset is
Equipment not identified;

The carrying value of property, plant and equipment • The Group has the right to obtain substantially
is reviewed for impairment when events or changes all of the economic benefits from the use of the
in circumstances indicate the carrying value may asset throughout the period of use; and
not be recoverable. If any such indication exists

54 Lion Brewery (Ceylon) PLC

• The Group has the right to direct the use of the of-use assets are determined on the same basis
asset. The Group has the right when it has the as those of property and equipment. In addition,
decision-making rights that are most relevant the right-of-use asset is periodically reduced by
to changing how and for what purpose the impairment losses, if any, and adjusted for certain
asset is used. remeasurements of the lease liability.

At inception or on reassessment of a contract The lease liability is initially measured at the present
that contains a lease component, the Group value of the lease payments that are not paid
allocates the consideration in the contract to each at the commencement date, discounted using
lease component on the basis of their relative the interest rate implicit in the lease or, if that
stand-alone prices. However, for leases of land rate cannot be readily determined, the Group’s
and buildings in which it is a lease, the Group has incremental borrowing rate. Generally, the Group
elected not to separate non lease components and uses its incremental borrowing rate as the discount
account for the lease and non-lease components rate.
as a single lease component.
Lease payments included in the measurement of
Short-term leases and leases of low-value Assets the lease liability comprise the following:

The Group applies the short-term lease recognition • fixed payments, including in-substance fixed
exemption to leases that have a lease term of payments;
12 months or less from the commencement
date. It also applies the lease of low-value • the exercise price under a purchase option
assets recognition exemption to leases that are that the Group is reasonably certain to
considered of low value. Lease payments on short exercise, lease payments in an optional
term leases and leases of low-value assets are renewal period if the is reasonably certain to
recognised as expense on a straight-line basis over exercise an extension option, and penalties for
the lease term. early termination of a lease unless the Group is
reasonably certain not to terminate early.
As a lessee
The Group recognises a right-of-use asset and a The lease liability is measured at amortised
lease liability at the lease commencement date. cost using the effective interest method. It is
The right-of-use asset is initially measured at cost, remeasured when there is a change in future lease
which comprises the initial amount of the lease payments arising from a change in an index or rate,
liability adjusted for any lease payments made at if there is a change in the Group’s estimate of the
or before the commencement date, plus any initial amount expected to be payable under a residual
direct costs incurred and an estimate of costs to value guarantee, or if the Group changes its
dismantle and remove the underlying asset or to assessment of whether it will exercise a purchase,
restore the underlying asset or the site on which it extension or termination option.
is located, less any lease incentives received.
When the lease liability is remeasured in this way, a
The right-of-use asset is subsequently depreciated corresponding adjustment is made to the carrying
using the straight-line method from the amount of the right-of-use asset, or is recorded in
commencement date to the earlier of the end of profit or loss if the carrying amount of the right-of-
the useful life of the right-of-use asset or the end of use asset has been reduced to zero.
the lease term. The estimated useful lives of right-

Annual Report 2021/22 55

NOTES TO THE FINANCIAL STATEMENTS

The Group presents right-of-use assets in ‘Right of Accordingly, the brands and excise licenses
Use Asset’ and lease liability in ‘Lease creditor’ in recorded in the Financial Statements are
the statement of financial position. considered to have an indefinite useful life.

3.7 Intangible Assets An Intangible Asset is de-recognised on disposal

or when no future economic benefits are expected
An Intangible Asset is recognised if it is probable
from it. The gain or loss arising from the de-
that future economic benefits that are attributable
recognition of such Intangible Assets is included in
to the asset will flow to the Group and the cost of
the Profit or Loss when the item is derecognised.
the asset can be measured reliably. The useful lives
of intangible assets are assessed as either finite or
3.8 Inventories
indefinite.
Inventories are stated at the lower of cost and
Intangible assets that are acquired by the Group net realisable value. Net realisable value is the
and have finite useful lives are measured at cost estimated selling price in the ordinary course of
less accumulated amortisation and accumulated business less the estimated costs.
impairment losses.
The cost of inventories includes expenditure
Subsequent expenditure of an intangible asset incurred in acquiring the inventories and other
is capitalised only when it increases the future costs incurred in bringing them to their existing
economic benefits embodied in the specific location and condition.
asset to which it relates. All other expenditure is
recognised in the Profit or Loss as incurred. Accordingly, the costs of inventories are accounted
as follows: recognised in the Profit or Loss as
Intangible assets with finite lives are amortised incurred.
based on the cost of an asset less its residual
value and recognised in the Profit or Loss and on
a straight line basis over the estimated useful lives Category Basis
of the intangible assets from the date that they are Raw & packing Cost of purchase together
available for use. Amortisation methods, useful material with any incidental expenses.
lives and residual values are reviewed at each The cost of the inventories
financial year end. The estimated useful life of a is based on the weighted
software license is 3-5 years. average principle.
Work-in-progress Raw material cost and a
Intangible assets with indefinite useful lives are not proportion of manufacturing
amortised, but are tested for impairment annually, expenses.
either individually or at the cash generating unit
level. The assessment of indefinite life is reviewed Finished goods Raw material cost and
annually to determine whether the indefinite life manufacturing expenses in
continues to be supportable. If not, the change full.
in useful life from indefinite to finite is made on a Maintenance stock On a weighted average basis.
prospective basis.
Appropriate provisions will be made for the value of
any stocks which are obsolete.

56 Lion Brewery (Ceylon) PLC

3.9 Investments 3.12 Employee Benefits

Long term investments and investments in (i) Defined Contribution Plans

subsidiaries of the Group are classified as A defined contribution plan is a post-employment
non-current investments, which are stated in plan under which an entity pays a fixed contribution
the Statement of Financial Position at cost less into a separate entity during the period of
accumulated impairment losses, if any. employment and will have no legal or constructive
obligation to pay a further amount. Obligations
3.10 Cash and Cash Equivalents for contributions to defined contribution plans are
recognised as an expense in the Profit or Loss
Cash and cash equivalents are defined as cash in
in the period during which related services are
hand, bank demand deposits and short term highly
rendered by employees.
liquid investments readily convertible to known
amounts of cash and subject to insignificant risk of
changes in value. Employees’ Provident Fund
The Company and Employees’ contribute 12% &
3.11 Liabilities and Provisions 10% respectively on the salary of each employee
respectively. The contribution of the Employees’
3.11.1 Liabilities Provident Fund is recognised as an expense in the
Liabilities classified as current liabilities on the Profit or Loss.
Statement of Financial Position are those, which
fall due for payment on demand or within one year Employees’ Trust Fund
from the reporting date. The Company contributes 3% of the salary of
each employee to the Employees’ Trust Fund.
Non-current liabilities are those balances that fall The contribution of the Employee Trust Fund is
due for payment after one year from the reporting recognised as an expense in the Profit or Loss.
date.
(ii) Defined Benefit Plans
3.11.2 Refundable Deposits A defined benefit plan is a post-employment
Returnable containers issued to Agents are benefit plan other than a defined contribution plan.
secured against a refundable deposit representing
the cost. Refunding of deposits could arise due The calculation is performed annually by a qualified
to a discontinuance of an agency or due to actuary using the Projected Unit Credit method
contraction in sales. (PUC). The Company’s net obligation in respect
of defined benefit plan is calculated by estimating
3.11.3 Provisions the amount of future benefit that employees have
earned in return for their service in the current and
A provision is recognised if, as a result of a prior periods, discounted to determine its present
past event, the Group has a present legal or value. However, under the payment of Gratuity
constructive obligation that can be estimated Act No. 12 of 1983, the liability to an employee
reliably, and it is probable that an outflow of arises only on completion of 5 years of continuous
economic benefits will be required to settle the service. Any actuarial gains or losses arising are
obligation. recognised in the Other Comprehensive Income
and all expenses related to the defined benefit

Annual Report 2021/22 57

NOTES TO THE FINANCIAL STATEMENTS

plans are in personnel expenses in the Profit or (i) Interest

Loss. The liability was not externally funded. When Income is recognised on an accrual basis.
the benefits of a plan are changed or when a
plan is curtailed, the resulting change in benefits
(ii) Others
that relates to past service or the gain or loss
on curtailment is recognised immediately in profit Other income is recognised on an accrual basis.
or loss. The Company recognises gain or losses Net gains/losses of a revenue nature arising from
on the settlement of a defined plan when the the disposal of Property, Plant and Equipment and
settlement occurs. other non-current assets, including investments,
are accounted for in the Profit or Loss, after
deducting from the proceeds from disposal, the
3.13 Capital Commitments & Contingencies
carrying amount of such assets and the related
Contingent liabilities are possible obligations whose selling expenses.
existence will be confirmed only by uncertain future
events or present obligations where the transfer 4.2 Expenditure Recognition
of economic benefits is not probable or cannot
be reliably measured. Capital commitment and (i) Operating Expenditure
contingent liabilities of the Group are disclosed in All expenditure incurred in running of the business
the respective notes to the Financial Statements. and in maintaining the property, plant & equipment
in a state of efficiency has been charged to
3.14 Events Subsequent to the Reporting revenue in arriving at the profit for the year. For
Period the purpose of presentation of Statements of
Profit or Loss and Other Comprehensive Income,
The materiality of the events after the reporting the Directors are of the opinion that function of
period has been considered and appropriate expense method present fairly the elements of the
adjustments and provisions have been made in the enterprise’s performance, hence such presentation
Financial Statements wherever necessary. method is adopted.

4 STATEMENTS OF PROFIT OR LOSS Expenditure incurred for the purpose of acquiring,

AND OTHER COMPREHENSIVE expanding or improving assets of a permanent
INCOME nature by means of which to carry on the business
4.1 Revenue Recognition or for the purpose of increasing the earning
capacity of the business has been treated as
Revenue principally comprises sales of Beer capital expenditure. Repairs and renewals are
to external customers. Revenue recognised at charged to the Profit or Loss in the year in which
the point in time when the control of goods and the expenditure is incurred.
products is transferred customer with a right
of return within a specified period, the Group (ii) Finance Income & Finance Cost
considers the timing of recognition. Revenue
Finance income comprises interest income on
from contracts with customers is measured at an
funds invested. Interest income is recognised as
amount that reflects the consideration to which the
it accrues in the Profit or Loss, using the effective
Group expects to be entitled in exchange for those
interest method.
goods. Amounts disclosed as revenue is net of
discounts and sales taxes.

58 Lion Brewery (Ceylon) PLC

Finance cost comprise interest expenses The provision for income tax is based on the
on borrowings, unwinding of the discount elements of income and expenditure as reported
on provisions and contingent consideration, in the Financial Statements and computed in
impairment losses recognised on financial assets accordance with the provisions of the Inland
(other than trade receivables). Revenue Act No 24 of 2017 and subsequent
amendments thereto.
Borrowing costs that are not directly attributable
to the acquisition, construction or production of a (ii) Deferred Taxation
qualifying asset are recognised in the Profit or Loss Deferred tax is provided using the balance sheet
using the effective interest rate method. liability method, providing for the tax effect of
temporary differences between the carrying
Foreign currency gains and losses are reported on amounts of assets and liabilities for financial
a net basis in the finance cost. reporting purposes and the tax base of assets and
liabilities, which is the amount attributed to those
4.3 Income Tax assets and liabilities for tax purposes. The amount
of deferred tax provided is based on the expected
Income tax comprises of current and deferred
manner of realisation or settlement of the carrying
tax. Income tax is recognised directly in the Profit
amount of assets and liabilities, using tax rates
or Loss except to the extent that if it relates to
enacted at the reporting date.
items recognised directly in equity or in other
comprehensive income.
Deferred tax assets including those related
to temporary tax effects of income tax losses
The Group has determined that interest and
and credits available to be carried forward, are
penalties related to income taxes, including
recognised only to the extent that it is probable that
uncertain tax treatments do not meet the definition
future taxable profits will be available against which
of income taxes, and therefore accounted for them
the asset can be utilised. Future taxable profits
under LKAS 37 Provisions, contingent Liabilities
are determined based on the reversal of relevant
and Continent Assets.
taxable temporary differences. If the amount of
taxable temporary differences is insufficient to
(i) Current Taxation recognise a deferred tax asset in full, then future
Current tax is the expected tax payable on the taxable profits, adjusted for reversals of existing
taxable income for the year, using tax rates temporary differences, are considered, based on
enacted or substantially enacted at the reporting the business plans for individual subsidiaries in the
date, and any adjustment to tax payable in respect Group. Deferred tax assets are reviewed at each
of previous years. The amount of current tax reporting date and are reduced to the extent that
payable is the best estimate of the tax amount it is no longer probable that the related tax benefit
expected to be paid that reflects uncertainty will be realised. such reductions are reversed when
related to income taxes, if any. It is measured using the probability of future taxable profits improves.
tax rates enacted or substantively enacted at the
reporting date.

Annual Report 2021/22 59

NOTES TO THE FINANCIAL STATEMENTS

4.4 Earnings per Share 6 SEGMENTAL REPORTING

The Financial Statements present basic earnings An operating segment is a component of the
per share (EPS) data for its ordinary shareholders. Group that engages in the business activities from
The EPS is calculated by dividing the Profit or which it may earn revenues and incur expenses,
Loss attributable to ordinary shareholders of the including revenues and expenses that relate
Company by the number of ordinary shares in to transactions with any of the Group’s other
issue. components. No separate reportable segment has
been identified. Hence, performance of the Group
4.5 Dividend Distribution is reported together.

Dividend distribution is recognised as a liability in

7 NEW ACCOUNTING STANDARDS NOT
the period in which the dividends are approved by
EFFECTIVE AT THE REPORTING DATE
the Company’s shareholders.
The Institute of Chartered Accountants of Sri Lanka
5 STATEMENT OF CASH FLOWS has issued the following new Sri Lanka Accounting
Standards (SLFRSs/LKASs) which will become
5.1 Cash and Cash Equivalents applicable for financial periods beginning after
Cash and cash equivalents are defined as cash 1st April 2022. Accordingly, the Group has not
in hand, bank, demand deposits and short term applied the following new standards in preparing
highly liquid investments readily convertible to these Financial Statements.
known amounts of cash and subject to insignificant
risk of changes in value. The following amended standards are not
expected to have a significant impact on the
For the purpose of statement of cash flow, cash Group’s Financial Statements,
and cash equivalents comprise of cash in hand, (i) Annual Improvements to SLFRS Standards
cash in bank and deposits held at banks, net of 2018–2020. The amendments are effective for
bank overdrafts. annual reporting periods beginning on or after
1 January 2022.
Investments with short maturities, i.e. three months
or less from the date of acquisition are also treated (ii) Property, Plant and Equipment: Proceeds
as cash equivalents. before Intended Use (Amendments to LKAS
16). The amendment applies to annual
The statement of cash flows has been prepared reporting periods beginning on or after 1
using the “Indirect Method”. January 2022

Interest paid are classified as operating cash (iii) Reference to Conceptual Framework
flows, interests received are classified as investing (Amendments to SLFRS 3). The amendment
cash flows while dividends paid are classified as applies to annual reporting period beginning
financing cash flows for the purpose of presenting on or after 1 January 2022.
of statement of cash flows.

60 Lion Brewery (Ceylon) PLC

(iv) Classification of Liabilities as Current or
Non-current (Amendments to LKAS 1). The
amendment applies to annual reporting
periods beginning on or after 1 January 2023

(v) Onerous Contracts - Cost of Fulfilling a

Contract (Amendments to LKAS 37). The
amendments are effective for annual reporting
periods beginning on or after 1 January 2022.

(vi) Disclosure of Accounting Policies

(Amendments to LKAS 1). The amendment
applies to annual reporting periods beginning
on or after 1 January 2023.

(vii) Definition of Accounting Estimates

(Amendments to LKAS 8). The amendment
applies to annual reporting periods beginning
on or after 1 January 2023.

(viii) Deferred Tax related to Assets and Liabilities

arising from a Single Transaction (Amendments
to LKAS 12). The amendment applies to
annual reporting periods beginning on or after
1January 2023.

Annual Report 2021/22 61

62
8 PROPERTY, PLANT & EQUIPMENT

8.1 Property, Plant & Equipment - Company

Freehold Freehold Plant & Furniture & Office Computer Motor Laboratory Returnable Capital Work- 31st March 31st March
In Rs.’000s Land Buildings Machinery Fittings Equipment Equipment Vehicles Equipment Containers in -Progress 2022 2021

Cost / Valuation
As at 1st April 2021 2,791,830 3,032,101 14,546,515 40,642 45,487 271,804 148,952 70,617 3,662,951 306,031 24,916,930 24,212,922
Additions 13,527 31,612 320,988 6,077 12,403 33,596 33,700 15,030 987,109 638,573 2,092,615 1,160,021

Lion Brewery (Ceylon) PLC

Transfers to PPE/Intangible assets 81,041 15,211 109,011 294 2,072 3,529 - - 10 (211,168) - (12,104)
Revaluation gain 753,458 104,712 - - - - - - - - 858,170 -
Depreciation adjustment on
NOTES TO THE FINANCIAL STATEMENTS

revaluation - (175,905) - - - - - - - - (175,905) -

Disposals/ Breakages - - (13,672) - - - (74,463) - (202,918) - (291,053) (443,909)
As at 31st March 2022 3,639,856 3,007,731 14,962,842 47,013 59,962 308,929 108,189 85,647 4,447,152 733,436 27,400,757 24,916,930
Accumulated Depreciation
As at 1st April 2021 - 80,574 4,789,939 23,866 30,518 256,541 93,063 68,386 2,162,863 2,854 7,508,604 6,658,876
Charge for the year - 95,331 779,833 3,008 6,026 14,341 19,564 2,930 582,681 - 1,503,714 1,273,080
Depreciation adjustment on
revaluation - (175,905) - - - - - - - - (175,905) -
Disposals/ Breakages - - (13,542) - - - (48,583) - (202,918) - (265,043) (423,352)
As at 31st March 2022 - - 5,556,230 26,874 36,544 270,882 64,044 71,316 2,542,626 2,854 8,571,370 7,508,604
Net Book Value
As at 31st March 2022 3,639,856 3,007,731 9,406,612 20,139 23,418 38,047 44,145 14,331 1,904,526 730,582 18,829,387
As at 31st March 2021 2,791,830 2,951,527 9,756,576 16,776 14,969 15,263 55,889 2,231 1,500,088 303,177 17,408,326

Except for the land at Nuwara Eliya, all other freehold land and buildings of the Company were revalued as at 31st March 2022 which were assessed on a going
concern basis by Arthur Perera & Company, independent professional valuer at a value of Rs. 6,565 Mn and the resultant surplus arising from there was transferred
to the Revaluation Reserve.



 8.1 Property, Plant & Equipment - Group

Freehold Freehold Plant & Furniture & Office Computer Motor Laboratory Returnable Capital Work- 31st March 31st March
In Rs.’000s Land Buildings Machinery Fittings Equipment Equipment Vehicles Equipment Containers in -Progress 2022 2021

Cost / Valuation
As at 1st April 2021 3,715,561 3,510,552 14,806,644 48,100 45,802 281,273 149,097 70,617 3,664,900 306,031 26,598,578 25,895,392
Additions 13,527 31,612 320,988 6,077 12,403 33,596 33,700 15,030 987,109 638,573 2,092,615 1,160,021
Transfers from work in progress 81,041 15,211 109,011 294 2,072 3,529 - - 10 (211,168) - (12,104)
Revaluation gain 913,923 258,790 - - - - - - - - 1,172,713 -
Depreciation adjustment on
revaluation - (199,828) - - - - - - - - (199,828) -
Disposals/ Breakages - - (13,672) - - - (74,463) - (202,918) - (291,053) (444,731)
As at 31st March 2022 4,724,052 3,616,337 15,222,971 54,471 60,277 318,398 108,334 85,647 4,449,101 733,436 29,373,025 26,598,578

Accumulated Depreciation
As at 1st April 2021 - 92,533 5,030,070 29,982 30,834 266,012 93,208 68,386 2,164,812 2,854 7,778,691 6,743,133
Charge for the year - 107,295 779,833 3,947 6,026 14,341 19,564 2,930 582,681 - 1,516,617 1,299,018
Depreciation adjustment on
revaluation - (199,828) - - - - - - - - (199,828) -
Impairment - - - - - - - - - - - 160,258
Disposals/ Breakages - - (13,542) - - - (48,583) - (202,918) - (265,043) (423,718)
As at 31st March 2022 - - 5,796,361 33,929 36,860 280,353 64,189 71,316 2,544,575 2,854 8,830,437 7,778,691
Net Book Value
As at 31st March 2022 4,724,052 3,616,337 9,426,610 20,542 23,417 38,045 44,145 14,331 1,904,526 730,582 20,542,588
As at 31st March 2021 3,715,561 3,418,019 9,776,584 18,118 14,968 15,261 55,889 2,231 1,500,088 303,177 18,819,887

Freehold land and buildings of subsidiary (Millers Brewery Limited) were revalued as at 31st March 2022 by Arthur Perera & Company,
independent professional valuer at a value of Rs. 1,692 Mn and the resultant surplus arising from there was transferred to the Revaluation
Reserve.

Annual Report 2021/22

63
NOTES TO THE FINANCIAL STATEMENTS

8 PROPERTY, PLANT & EQUIPMENT CONTD.

8.2 Carrying amount of the revalued assets, if they were carried at cost model

Company Group

In Rs.’000s Land Buildings Land Buildings

Cost as at 1st April 2021 1,579,121 2,481,555 1,891,470 2,869,116

Additions during the year 94,568 46,823 94,568 46,823

Cost as at 31st March 2022 1,673,689 2,528,378 1,986,038 2,915,939
Accumulated depreciation - (572,215) - (656,486)
Carrying amount as at 31st March 2022 1,673,689 1,956,163 1,986,038 2,259,453
Carrying amount as at 31st March 2021 1,579,121 1,982,893 1,891,470 2,297,417

64 Lion Brewery (Ceylon) PLC

 8.3 Extents, locations, valuations and number of buildings and land holdings.

2022 2021
Location Extent of Lands Cost/ Number of Cost/ Extent of Lands Cost/ Number of Cost/
valuation buildings/ valuation valuation buildings/ valuation
of Lands Blocks of of Lands Blocks of
Buildings Buildings
Rs.000s Rs.000s Rs.000s Rs.000s

Lion Brewery Ceylon PLC A R P A R P

Biyagama 28.00 3.00 19.20 3,032,000 49 2,994,801 28.00 2.00 4.46 2,445,380 49 3,022,101
Kaduwela 3.00 - 27.00 304,200 1 12,930 3.00 - 27.00 253,500 1 10,000
Tangalle 3.00 2.00 - 28,000 - - 3.00 2.00 - 22,400 - -
Kurunegala 3.00 - 34.25 192,844 - - 3.00 - 35.00 70,550 - -
Nuwara Eliya - 3.00 36.67 82,812 - - - - - - - -
Total- Company 39.00 2.00 37.12 3,639,856 50 3,007,731 38.00 1.00 26.46 2,791,830 50 3,032,101
Millers Brewery Limited
Meegoda 22.00 3.00 16.45 1,084,196 12 608,606 22.00 2.00 37.43 923,731 12 478,451
Total- Group 62.00 2.00 13.57 4,724,052 62 3,616,337 61.00 0.00 23.89 3,715,561 62 3,510,552
A: Acres R: Roods P: Perches

8.4 The cost of fully-depreciated property, plant and equipment of the Group and the Company which are still in use amounted to
Rs. 2,747 Mn (2020/21 - Rs. 2,856 Mn) and Rs. 2,724 Mn (2020/21 - Rs. 2,833 Mn) respectively.

8.5 Property plant and equipment has not been pledged as security against the borrowings during the period and the borrowing cost has not
been capitalised during the financial year (2021-Nil).

8.6 Fair Value measurement

(a) Fair Value Hierarchy

Annual Report 2021/22

The fair value of the land and buildings was determined by external independent property valuer, having appropriate recognised
professional qualifications for the category of the property being valued. Fair value measurements of the property has been categorised as

65
a Level 3 fair value based on the valuation techniques used.
NOTES TO THE FINANCIAL STATEMENTS

8 PROPERTY, PLANT & EQUIPMENT CONTD.

8.6 Fair Value measurement Contd.

(b) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring fair values, as well as the significant
unobservable inputs used.

Property Method of Estimated price Estimated price Effective Correlation to fair

valuation per perch per square foot date of value
valuation

Lion Brewery OMV LKR 600,000/- LKR 2,000/- 31.03.2022 Positive

Ceylon PLC, -LKR 800,000/- - LKR 13,500/-
Biyagama
Lion Brewery OMV LKR 600,000/- LKR 3,500/- 31.03.2022 Positive
Ceylon PLC, - LKR 4,750/-
Kaduwela
Lion Brewery OMV LKR 50,000/- - 31.03.2022 Positive
Ceylon PLC,
Tangalle
Lion Brewery OMV LKR 375,000/- - 31.03.2022 Positive
Ceylon PLC,
Kurunagala
Millers Brewery OMV LKR 3,750/- LKR 2,250/- 31.03.2022 Positive
Limited, Meegoda - LKR 350,000/- - LKR 6,250/-

Open market value (OMV) method uses prices and other relevant information generated by market
transactions involving identical or comparable assets, liabilities or a group of assets and liabilities, such
as a business.

The land at Nuwara Eliya was purchased in the 2021/22 financial year and this property was not revalued
as at 31st March 2022 as the directors are of the view that there is no material value difference against the
market value at the time of valuation.

66 Lion Brewery (Ceylon) PLC

9 RIGHT OF USE ASSETS

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Balance as at 1 April 164,119 162,759 164,119 162,759

Additions during the period 19,922 47,777 19,922 47,777
Derecognition of assets - (17,011) - (17,011)
Depreciation charge for the period (32,127) (32,208) (32,127) (32,208)
Depreciation on derecognised assets - 2,802 - 2,802
Balance as at 31 March 151,914 164,119 151,914 164,119

9.1 Lease Creditor

Balance as at 1 April 185,221 171,012 185,221 171,012
Leases obtained 19,922 47,777 19,922 47,777
Interest expenses for the period 25,734 28,716 25,734 28,716
Derecognition of lease liability - (17,122) - (17,122)
Lease rentals paid (45,800) (45,162) (45,800) (45,162)
Balance as at 31 March 185,077 185,221 185,077 185,221

Analysis of lease liabilities by period of re-payment

Company Group
As at 31 March Contractual Interest Present Contractual Interest Present
2022 CF Value CF Value
of lease of lease
payments payments
In Rs.’000s

Current 48,652 (24,121) 24,531 48,652 (24,121) 24,531

Non current 234,519 (73,973) 160,546 234,519 (73,973) 160,546
283,171 (98,094) 185,077 283,171 (98,094) 185,077

Annual Report 2021/22 67

NOTES TO THE FINANCIAL STATEMENTS

9 RIGHT OF USE ASSETS CONTD.

Analysis of lease liabilities by period of re-payment

Company Group
As at 31 March Contractual Interest Present Contractual Interest Present
2021 CF Value CF Value
of lease of lease
In Rs.’000s payments payments

Current 45,142 (25,242) 19,900 45,142 (25,242) 19,900

Non current 251,800 (86,479) 165,321 251,800 (86,479) 165,321
296,942 (111,721) 185,221 296,942 (111,721) 185,221

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Following are the amounts recognised in profit or

loss during the financial year
Depreciation of right of use assets 32,127 32,208 32,127 32,208
Interest expenses on lease liability 25,734 28,716 25,734 28,716
Total amount recognised in profit or loss 57,861 60,924 57,861 60,924

There were no expenses relating to short term leases and leases of low value assets during the financial year.

68 Lion Brewery (Ceylon) PLC

10 INTANGIBLE ASSETS

As at 31st March 2022 2021

Brands Computer Excise
In Rs.’000s Software License

COMPANY

Cost

Opening balance 4,000,000 413,336 38,200 4,451,536 4,412,236

Additions during the year - 922 - 922 27,196
Transfers from capital WIP - - - - 12,104
Closing balance 4,000,000 414,258 38,200 4,452,458 4,451,536

Amortisation/Impairment
Opening balance 2,862,464 363,963 - 3,226,427 2,769,906
Amortisation for the year - 12,360 - 12,360 7,437
Impairment during the year 463,578 - - 463,578 449,084
Closing balance 3,326,042 376,323 - 3,702,365 3,226,427

Net Book Value 673,958 37,935 38,200 750,093 1,225,109

GROUP
Cost
Opening balance 4,000,000 413,336 38,200 4,451,536 4,412,236
Additions during the year - 922 - 922 27,196
Transfers from capital WIP - - - - 12,104
Closing balance 4,000,000 414,258 38,200 4,452,458 4,451,536

Amortisation/Impairment
Opening balance 2,862,464 363,963 - 3,226,427 2,769,906
Amortisation for the year - 12,360 - 12,360 7,437
Impairment 463,578 - - 463,578 449,084
Closing balance 3,326,042 376,323 - 3,702,365 3,226,427

Net Book Value 673,958 37,935 38,200 750,093 1,225,109

Annual Report 2021/22 69

NOTES TO THE FINANCIAL STATEMENTS

10 INTANGIBLE ASSETS CONTD.

10.1 Brands of Millers Brewery Limited

The Company acquired brands amounting to Rs. 4,000,000,000/- during FY 2014/15 from Millers Brewery
Limited. The said acquisition consisted of five brands namely, Sando Power, Sando Stout, Three Coins,
Grand Blonde and Irish Dark. Brands are not amortised as the useful life is considered to be infinite given
the nature of the assets. However, the assessment of indefinite life is reviewed annually.

Assumptions

An impairment test was carried out for the brands acquired from Millers Brewery Ltd as at 31st March
2022 as per the accounting standard LKAS 36. The Company computed its recoverable amount of the
acquired brands by forecasting the annual sales values and discounting such estimated cash flows by its
cost of equity adjusted with a risk premium. Cost of equity was determined based on the risk free rate of a
10 year treasury bond at 15.24% for the relevant cash flows, whereas the equity risk premium added was
based on non-observable inputs as estimated for a valuation of the business in a previous period. Therefore,
the difference in the discount rate compared with previous financial year is the change in the risk free rate
due to market changes. The contribution growth was determined based on the historical records (rate not
disclosed due to commercial sensitivity) along with a zero volume growth rate. Accordingly, the carrying
value of the said brands as at 31st March stands at Rs. 673,958,842/‐ resulting an impairment of
Rs. 463,577,639/‐ which has been charged to the income statement.

10.2 Computer Software

Computer software represent the costs incurred for the Enterprise Resource Planning (“ERP”) systems,
its related licenses and other software application that are used to generate financial and management
information. Software with a finite life is amortised over the period of expected economic benefit.

10.3 Excise Licenses

Excise licenses contains wholesale distributor licenses held by the company. Licenses are not amortised
as the useful life is considered to be infinite given the nature of the assets. However, the assessment of
indefinite life is reviewed annually. The licenses are tested for impairment annually.

70 Lion Brewery (Ceylon) PLC

11 INVESTMENT IN SUBSIDIARY
Company

The Company invested Rs. 1,150,000,000/- in Pearl Springs (Private) Limited through which the Company
acquired Millers Brewery Limited in financial year 2014/15. Pearl Springs (Private) Limited is a fully owned
subsidiary of Lion Brewery (Ceylon) PLC.

No of % Market Cost as at Market Cost as at

Shares holding Value / 31st March Value / 31st March
Directors 2022 Directors 2021
Value as at Value as at
31st March 31st March
In Rs.’000s 2022 2021

Pearl Springs (Private)

Limited 115,000,000 100% 1,150,000 1,150,000
Impairment provision (120,377) (120,377)
Balance 1,029,623 1,029,623 1,029,623 1,029,623

As the subsidiaries are 100% equity owned companies, no presentation for non-controlling interest has
been made.

12 INVENTORIES

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Raw and packing materials 1,139,770 617,215 1,139,770 617,215

Work in progress 376,444 265,128 376,444 265,128
Finished goods 2,404,227 2,127,178 2,404,227 2,127,178
Maintenance spares & others 582,123 557,958 582,123 557,958
4,502,564 3,567,479 4,502,564 3,567,479
Provision for inventory (Note 12.1) (64,047) (74,362) (64,047) (74,362)
4,438,517 3,493,117 4,438,517 3,493,117

12.1 Impairment provision for inventory

Balance as at beginning of the year 74,362 73,266 74,362 73,266
Provisions made during the year 40,540 50,341 40,540 50,341
Reversals/written off during the year (50,855) (49,245) (50,855) (49,245)
Balance as at end of the year 64,047 74,362 64,047 74,362

Annual Report 2021/22 71

NOTES TO THE FINANCIAL STATEMENTS

13 TRADE AND OTHER RECEIVABLES

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Trade receivables 606,356 512,239 606,356 512,239

Provision for impairment (Note 13.1) (51) (51) (51) (51)

606,305 512,188 606,305 512,188

Advances 751,355 459,655 751,355 459,655

Prepayments 386,141 334,563 388,641 334,563

Other receivables 47,318 27,835 50,056 33,910

1,791,119 1,334,241 1,796,357 1,340,316

13.1 Provision for Impairment

Balance as at beginning of the year 51 51 51 51

Provisions made/(written off) during the year - - - -

Balance as at end of the year 51 51 51 51

14 AMOUNTS DUE FROM RELATED COMPANIES

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Pubs ‘N Places (Private) Ltd 36,437 67,468 36,437 67,468

Ceylon Beverage Holdings PLC 337,741 378,151 337,741 378,151

374,178 445,619 374,178 445,619

72 Lion Brewery (Ceylon) PLC

15 CASH AND CASH EQUIVALENTS

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Fixed deposits with financial institutions 9,019,538 8,084,645 9,134,538 8,199,645

Savings accounts 869,660 203,937 869,721 203,997

Cash at bank 2,997,518 1,233,125 3,005,703 1,257,556
Cash in hand 3,270 4,200 3,270 4,200
12,889,986 9,525,907 13,013,232 9,665,398

Cash and cash equivalents include following for the purpose of Statement of Cash Flows.
Cash and cash equivalents 12,889,986 9,525,907 13,013,232 9,665,398
Bank overdrafts (1,096,486) (1,022,404) (1,096,486) (1,022,421)
11,793,500 8,503,503 11,916,746 8,642,977

16 STATED CAPITAL

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Shares issued and fully paid (80,000,000

ordinary shares) 2,537,801 2,537,801 2,537,801 2,537,801

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at shareholder meetings of the Company. All ordinary shares rank equally with
regard to the right to the Company’s residual assets, at the point of distribution.

Annual Report 2021/22 73

NOTES TO THE FINANCIAL STATEMENTS

17 CAPITAL RESERVES

The Capital Reserve relates to revaluation of land and buildings. It comprises of the increase in the fair value
of land and buildings at the date of revaluation net of deferred tax.

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Balance as at beginning of the year 972,968 972,968 1,388,475 1,388,475

Revaluation of land and buildings 858,170 - 1,172,713 -
Deferred tax charge on land and building
revaluation (343,268) - (469,085) -
Balance as at end of the year 1,487,870 972,968 2,092,103 1,388,475

18 LOANS AND BORROWINGS

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Balance as at the beginning of the year 4,621,700 11,922,000 4,621,700 11,922,000

Obtained during the year 2,000,000 3,000,000 2,000,000 3,000,000
Repayments during the year (1,759,300) (10,300,300) (1,759,300) (10,300,300)
4,862,400 4,621,700 4,862,400 4,621,700
Interest payable 785,607 744,024 785,607 744,024
Balance as at the end of the year 5,648,007 5,365,724 5,648,007 5,365,724

74 Lion Brewery (Ceylon) PLC

 18.1 Details of loans and borrowings

Name of the Lender 31st March 31st March Repayment Terms Security Type of
2022 2021 Offered Interest
Rs. ’000s Rs. ’000s
Commercial Bank- Rs. 1Bn (2017) 87,400 296,200 7th to the 12th Month - Rs. 10Mn per month Unsecured Floating
(Rs.60 Mn)and the balance thereof for
Rs. 940 Mn to be settled in 53 equal monthly
instalments of Rs. 17.40 Mn and a final
instalment Rs. 17.80 Mn commencing from
October 2017.
Commercial Bank - Rs. 1.5 Bn (2020) 750,000 1,250,000 Payable in 12 equal quarterly instalments Unsecured Fixed
commencing from December 2020
Commercial Bank - Rs. 1.5 Bn (2020) 937,500 1,312,500 Payable in 16 equal quarterly instalments Unsecured Fixed
commencing from December 2020
HNB- Rs. 2Bn (2018) - 488,000 Payable in 4 years. Unsecured Floating
commencing from April 2018
NDBIB - Rs. 1.5Bn (2019) 1,087,500 1,275,000 Payable in 8 years. Unsecured Floating
commencing from July 2019
Commercial Bank 1,000,000 - 1 month - Renewable Unsecured Fixed
Citi Bank 1,000,000 - 1 month - Renewable Unsecured Fixed
Total 4,862,400 4,621,700

Annual Report 2021/22

75
NOTES TO THE FINANCIAL STATEMENTS

18 LOANS AND BORROWINGS CONTD.

18.2 Composition of loans and borrowings repayment

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Classified under non current liabilities

Loans and borrowings falling due after one year 1,675,000 2,862,400 1,675,000 2,862,400
Interest payable 625,311 634,660 625,311 634,660
2,300,311 3,497,060 2,300,311 3,497,060

Classified under current liabilities

Loans and borrowings falling due within one year 3,187,400 1,759,299 3,187,400 1,759,299
Interest payable 160,296 109,365 160,296 109,365
3,347,696 1,868,664 3,347,696 1,868,664

Balance as at the end of the year 5,648,007 5,365,724 5,648,007 5,365,724

19 EMPLOYEE BENEFITS

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

The amounts recognised in the statements of

financial position are as follows:
Present value of unfunded obligation 173,704 233,933 173,704 233,933
Liability in the statements of financial position 173,704 233,933 173,704 233,933

The movement in the defined benefit

obligation over the year as follows:
As at 1st April 233,933 198,737 233,933 198,737
Interest cost 18,013 19,874 18,013 19,874
Current service cost 13,616 19,393 13,616 19,393
Actuarial gain (45,763) (1,119) (45,763) (1,119)
Past service cost (17,569) - (17,569) -
Benefits paid (28,526) (2,952) (28,526) (2,952)
As at 31st March 173,704 233,933 173,704 233,933

76 Lion Brewery (Ceylon) PLC

 Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

The amounts recognised in the Statement of

Profit or Loss are as follows:
Interest cost 18,013 19,874 18,013 19,874
Current service cost 13,616 19,393 13,616 19,393
Past service cost (17,569) - (17,569) -
14,060 39,267 14,060 39,267

The amounts recognised in the Other

Comprehensive Income are as follows:
Actuarial gain 45,763 1,119 45,763 1,119

19.1 The gratuity liability as at 31st March 2022 was valued under the Projected Unit Credit (PUC) method
by Mr. M. Poopalanathan, AIA, of M/s. Actuarial and Management Consultants (Private) Limited, a firm
of professional actuaries.

Under the Minimum Retirement Age of Workers Act No 28 of 2021, retirement benefit plan of the
Group and the Company was amended due to the increase in retirement age.

The principal assumptions used in determining the cost of employee benefits were:

Company Group
For the year ended 31st March 2022 2021 2022 2021

Discount rate 15.0% 7.7% 15.0% 7.7%

Salary increment rate 10.0% 6.0% 10.0% 6.0%
Weighted average duration (years) of defined
benefit obligation 6.41 9.28 6.41 9.28

19.2 Sensitivity of assumptions used

Reasonable possible changes at the reporting date to one of the actuarial assumptions, holding other
assumptions constant would have affected the defined benefit obligations by the amounts shown below,

Discount rate Salary increment rate

2022 2022
In Rs.’000s Company Group Company Group

Increase by one percentage (7,331) (7,331) 8,937 8,937

Decrease by one percentage 7,993 7,993 (8,303) (8,303)

Annual Report 2021/22 77

NOTES TO THE FINANCIAL STATEMENTS

20 NET DEFERRED TAX LIABILITIES

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Deferred tax liability 4,841,353 4,847,698 5,406,059 5,289,437

Deferred tax asset (180,433) (200,912) (180,433) (200,912)

Balance as at the end of the year 4,660,920 4,646,786 5,225,626 5,088,525

Movement In Deferred Tax Balances - Company Balance as Recognised Recognised Balance as

In Rs.’000s at 1 April in Profit in OCI at 31 March
2021 or Loss 2022

Deferred Tax Liability

Property plant and equipment 4,621,429 (325,510) 343,268 4,639,187
Intangible assets 160,621 (19,221) - 141,400
Right of use assets 65,648 (4,882) - 60,766

Deferred Tax Assets

Employee benefit (93,573) 5,787 18,305 (69,481)
Lease creditor (74,088) 58 - (74,030)
Inventory provision (33,251) (3,671) - (36,922)
Net tax liabilities 4,646,786 (347,440) 361,573 4,660,920

Movement In Deferred Tax Balances - Group Balance as Recognised Recognised Balance as

In Rs.’000s at 1 April in Profit in OCI at 31 March
2021 or Loss 2022

Deferred Tax Liability

Property Plant and equipment 5,063,168 (328,362) 469,085 5,203,892
Intangible assets 160,621 (19,221) - 141,400
Right of use assets 65,648 (4,882) - 60,766

Deferred Tax Assets

Employee benefit (93,573) 5,787 18,305 (69,481)
Lease creditor (74,088) 58 - (74,030)
Inventory provision (33,251) (3,671) - (36,922)
Net tax liabilities 5,088,525 (350,291) 487,390 5,225,626

78 Lion Brewery (Ceylon) PLC

Movement In Deferred Tax Balances - Company Balance as Recognised Recognised Balance as
In Rs.’000s at 1 April in Profit in OCI at 31 March
2020 or Loss 2021

Deferred Tax Liability

Property Plant and equipment 4,701,112 (79,683) - 4,621,429
Intangible assets 12,066 148,555 - 160,621
Right of use assets - 65,648 - 65,648

Deferred Tax Assets

Employee benefit (79,495) (14,525) 447 (93,573)
Lease creditor - (74,088) - (74,088)
Inventory provision (31,087) (2,164) - (33,251)
Net tax liabilities 4,602,596 43,743 447 4,646,786

Movement In Deferred Tax Balances - Group Balance as Recognised Recognised Balance as

In Rs.’000s at 1 April in Profit in OCI at 31 March
2020 or Loss 2021

Deferred Tax Liability

Property Plant and equipment 5,214,936 (151,768) - 5,063,168
Intangible assets 12,066 148,555 - 160,621
Right of use assets - 65,648 - 65,648

Deferred Tax Assets

Employee benefit (79,495) (14,525) 447 (93,573)
Lease creditor - (74,088) - (74,088)
Inventory provision (31,087) (2,164) - (33,251)
Net tax liabilities 5,116,420 (28,342) 447 5,088,525

As at 31st March 2022, the Group has not recognised deferred tax asset amounting to Rs. 602 Mn on
brought forward tax losses of Rs. 1,506 Mn for Millers Brewery Limited as the utilisation against the future
taxable profits are uncertain.

Annual Report 2021/22 79

NOTES TO THE FINANCIAL STATEMENTS

21 TRADE AND OTHER PAYABLES

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Trade payables 2,297,875 1,143,741 2,297,875 1,143,741

Trade discounts 180,555 140,934 180,555 140,934
Accruals 381,555 348,530 383,004 350,398
Other payables 374,360 239,927 374,360 239,923
3,234,345 1,873,132 3,235,794 1,874,996

22  AMOUNTS DUE TO RELATED COMPANIES

Carlsberg A/S 155,756 122,828 155,756 122,828
Millers Brewery Limited - 514 - -
155,756 123,342 155,756 122,828

23 REFUNDABLE DEPOSITS
Balance as at the beginning of the year 1,900,393 1,715,620 1,900,393 1,715,620
Deposits received during the year 400,788 366,290 400,788 366,290
Empty deposit write back during the year - (181,517) - (181,517)
Balance as at the end of the year 2,301,181 1,900,393 2,301,181 1,900,393

Refundable deposits are taken from agents as security against the returnable containers held with them.

24 CURRENT TAX LIABILITIES

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Excise duty payable 1,764,515 1,370,885 1,764,515 1,370,885

Value added tax 501,359 369,905 500,166 368,780
Income tax 850,244 642,786 852,906 645,448
3,116,118 2,383,576 3,117,587 2,385,113

80 Lion Brewery (Ceylon) PLC

25 REVENUE

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Local revenue 56,464,185 48,533,690 56,464,185 48,533,690

Export revenue 2,106,700 1,315,597 2,106,700 1,315,597
58,570,885 49,849,287 58,570,885 49,849,287

26 OTHER INCOME

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Profit on disposal of property, plant & equipment 7,674 2,912 7,674 2,912
and right of use assets

Empty deposit written back - 168,072 - 168,072

Other income 181,924 160,257 182,228 167,420
189,598 331,241 189,902 338,404

Annual Report 2021/22 81

NOTES TO THE FINANCIAL STATEMENTS

27 PROFIT FROM OPERATIONS

Profit from operations is stated after charging all expenses/(reversals) including the following:

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Directors' fees and emoluments (Note 33.2) 37,635 30,652 37,635 30,652
Auditors' remuneration
- Audit fee 2,035 1,850 2,266 2,060
- Audit related services 155 75 155 75
- Non audit services 730 1,070 730 1,070
Depreciation on property, plant & equipment (Note 8) 1,503,714 1,273,080 1,516,617 1,299,018
Depreciation of right of use assets (Note 9) 32,127 32,208 32,127 32,208
Amortisation of intangible assets (Note 10) 12,360 7,437 12,360 7,437
Impairment of property, plant & equipment - - - 160,258
Royalty 303,697 302,928 303,697 302,928
Supporting service fees 823,050 488,427 823,050 488,427
Personnel expenses (Note 27.1) 1,086,798 959,968 1,086,798 959,968

27.1 Personnel expenses

Salaries, wages and other related expenses 1,005,455 862,565 1,005,455 862,565
Defined benefit plan costs (Note 19) 14,060 39,267 14,060 39,267
Defined contribution plan cost - EPF & ETF 67,283 58,136 67,283 58,136
1,086,798 959,968 1,086,798 959,968

82 Lion Brewery (Ceylon) PLC

28 NET FINANCE COST

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Finance Income
Interest income - fixed deposits 476,974 567,306 481,015 574,301
Interest income - intercompany loans 21,621 31,287 21,621 31,287
Interest income - savings & call deposit 146,232 89,693 146,233 89,693
Total finance income 644,827 688,286 648,869 695,281

Finance Cost
Interest expenses - term loans 348,590 402,867 348,590 402,867
Interest expenses - bank overdrafts 17,226 22,443 17,226 22,443
Interest on lease 25,734 28,716 25,734 28,716
Interest expenses - others 589,718 735,213 589,718 735,213
Finance costs 981,268 1,189,239 981,268 1,189,239

Net gain on foreign exchange transactions (591,475) (45,843) (591,475) (45,843)

Total finance cost 389,793 1,143,396 389,793 1,143,396

Net finance income/(cost) 255,034 (455,110) 259,076 (448,115)

Annual Report 2021/22 83

NOTES TO THE FINANCIAL STATEMENTS

29 INCOME TAX / DEFERRED TAX

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Income tax (Note 29.1.1) 2,214,371 1,815,068 2,214,371 1,815,068

Deferred tax (reversal)/charge (347,440) 43,743 (350,291) (28,342)
Total tax 1,866,931 1,858,811 1,864,080 1,786,726

Deferred tax recognised in other

comprehensive income
Re-measurement of employee benefit
obligations 18,305 447 18,305 447
Revaluation gain on land and buildings 343,268 - 469,085 -
361,573 447 487,390 447

29.1.1 Reconciliation of the accounting

profit and tax expenses
Profit before taxation 5,562,185 4,451,225 5,532,185 4,257,822
Remeasurement of employee benefit obligations 45,763 1,119 45,763 1,119
Profit before tax adjustments 5,607,948 4,452,344 5,577,948 4,258,941
Aggregate of disallowable expenses 2,113,850 1,905,540 2,127,000 2,102,176
Aggregate of allowable claims (2,432,651) (2,162,899) (2,438,428) (2,169,341)
Utilisation of tax losses - - (16,686) (25,754)
Operating losses incurred during the year - - 39,313 28,963
Tax adjusted profit 5,289,147 4,194,985 5,289,147 4,194,985
Investment income - interest income 614,417 688,286 614,417 688,286
Assessable income /taxable income 5,903,564 4,883,271 5,903,564 4,883,271

Current tax on local operations (Note 29.3) 2,040,444 1,634,741 2,040,444 1,634,741
Current tax on export profits (Note 29.3) 26,467 15,138 26,467 15,138
Current tax on interest income (Note 29.3) 147,460 165,189 147,460 165,189
Total current tax expense 2,214,371 1,815,068 2,214,371 1,815,068

84 Lion Brewery (Ceylon) PLC

29.1.2 Reconciliation of the effective tax rate
The following table provides a reconciliation of the group weighted average statutory corporate income tax
rate to the effective tax rate of the group on profit before taxation.

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Profit before taxation 5,562,185 4,451,225 5,532,185 4,257,822

Tax charge on profit 1,866,931 1,858,811 1,864,080 1,786,726
Effective tax rate 33.6% 41.8% 33.7% 42.0%

Company Group
For the year ended 31st March % 2022 % 2021 % 2022 % 2021
In Rs.’000s

Profit before taxation 5,562,185 4,451,225 5,532,185 4,257,822

Tax calculated @ 40% 40.0% 2,224,874 40.0% 1,780,490 40.0% 2,212,874 40.0% 1,703,129

The Effect of Tax

Aggregate of disallowable
15.2% 845,540 17.1% 762,216 15.4% 850,800 19.7% 840,870
expenses
Aggregate of allowable claims (17.5%) (973,060) (19.4%) (865,159) (17.6%) (975,371) (20.4%) (867,736)
Operating losses incurred during
- - - - 0.3% 15,725 0.3% 11,585
the year
Rate differential & over/under
2.1% 117,017 3.1% 137,521 2.1% 117,017 3.2% 137,522
provision LY
Tax loss utilised - - - - (0.1%) (6,674) (0.2%) (10,302)
Deferred tax (reversal) / charge (6.2%) (347,440) 1.0% 43,743 (6.3%) (350,291) (0.7%) (28,342)
Tax charge 33.6% 1,866,931 41.8% 1,858,811 33.7% 1,864,080 42.0% 1,786,726

29.2 Analysis of Tax Losses

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Tax losses brought forward - - 1,483,185 1,497,047

Adjustment on losses brought forward - - (105) (17,071)
Tax losses incurred during the year - - 39,313 28,963
Utilisation of tax losses during the year - - (16,686) (25,754)
Tax losses carried forward - - 1,505,707 1,483,185

Annual Report 2021/22 85

NOTES TO THE FINANCIAL STATEMENTS

29 INCOME TAX / DEFERRED TAX CONTD.

29.3 Income Tax

Company
In terms of the Inland Revenue Act No. 24 of 2017 and amendments thereto, the profits & income from
local operations are liable to income tax at the rate of 40% (2021 - 40%) and profits attributable to export
turnover are liable at 14% (2021 - 14%). Income arising from interest income is considered as separate
source of income which is taxed at 24% (2021 - 24%). As per the subsection (iii) of Section (i) of the Third
Schedule of the Act, interest income accruing or derived by the Company from foreign currency accounts
are exempt from tax effective from 1st January 2021.

Group
Group tax expenses is based on the taxable profit of individual companies within the Group. At present, the
tax laws of Sri Lanka do not provide for Group taxation.

In terms of the provisions of the Inland Revenue Act, No. 24 of 2017 and amendments thereto, Companies
within the Group are liable to taxation at a tax rate of 24% (2021 - 24%).

As per section 19 of the Inland Revenue Act No. 24 of 2017 and amendments thereto, any unclaimed tax
losses brought forward or incurred during the year could be carried forward for further 6 years subject to
maximum of 6 years based on the year in which that such losses were incurred. Such losses can be set off
against the profits without any limitation subject to source of income as provided in the Act. Millers Brewery
Limited in the group have carried forward tax losses which are available to be set off against the future tax
profits of the company.

30 DIVIDENDS

For the year ended 31st March 2022 2021

In Rs.’000s
On ordinary shares Rs. 3.68 per share and Rs. 17.25 per share
(2021 - Rs. 14.40) 1,674,400 1,152,000
1,674,400 1,152,000

30.1 First interim dividend of Rs. 3.68 per ordinary share amounting to Rs. 294,400,000/- for the year
ended 31st March 2022 was paid on 26th November 2021 to the Shareholders of the Company
who had provided accurate bank account details and to the Shareholders who had not provided
accurate bank account details or had not provided any bank account details the dividends was paid
on 09th December 2021.

30.2 The Board of Directors has approved second interim dividend of Rs. 17.25 per share for the year
ended 31st March 2022 on 12th May 2022. In Accordance with Sri Lanka Accounting Standards
LKAS 10 Events after the Reporting period, this dividend has not been recognised as a liability as at
31st March 2022. .

30.3 As required by Section 56 of the Companies Act No 7 of 2007, the Board of Directors were satisfied
that the solvency of the Company is in accordance with the Section 57, prior to approving the interim
dividend. A statement of solvency was compiled and was duly signed by the Board of Directors.

86 Lion Brewery (Ceylon) PLC

31 EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share is based on profit for the year attributable to the ordinary
shareholders and weighted average number of ordinary shares outstanding during the year. There were no
potentially dilutive ordinary shares outstanding at any time during the year /previous year, therefore, diluted
earnings per share is same as basic earnings per share.

Company Group

For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s
Net profit attributable to ordinary shareholders
(as the numerator) 3,695,254 2,592,414 3,668,105 2,471,096
Number of ordinary shares in '000
(as denominator) 80,000 80,000 80,000 80,000
Earnings per ordinary share basic and diluted (Rs.) 46.19 32.41 45.85 30.89

32 FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT

32.1 Accounting classifications and fair values

The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement
of financial position, are as follows. (In Rs.000). SLFRS 9 contains three principal classification categories for
financial assets: measured at amortised cost, FVOCI (fair value through other comprehensive income) and
FVTPL (fair value through profit or loss).

Annual Report 2021/22 87

NOTES TO THE FINANCIAL STATEMENTS

32 FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT CONTD.

Company
As at 31st March 2022 2021
Financial Instrument Category Amortised FVTPL FVOCI Amortised FVTPL FVOCI
In Rs.’000s Cost Cost

Financial assets
Trade and other receivables 653,623 - - 540,023 - -
Amounts due from related companies 374,178 - - 445,619 - -
Cash and cash equivalents 12,889,986 - - 9,525,907 - -
Financial liabilities
Loans and borrowings 5,648,007 - - 5,365,724 - -
Trade and other payables 3,234,345 - - 1,873,132 - -
Lease creditor 185,077 - - 185,221 - -
Amounts due to related companies 155,756 - - 123,342 - -
Bank overdraft 1,096,486 - - 1,022,404 - -

Group
As at 31st March 2022 2021
Financial Instrument Category Amortised FVTPL FVOCI Amortised FVTPL FVOCI
In Rs.’000s Cost Cost

Financial assets
Trade and other receivables 656,361 - - 546,098 - -
Amounts due from related companies 374,178 - - 445,619 - -
Cash and cash equivalents 13,013,232 - - 9,665,398 - -
Financial liabilities
Loans and borrowings 5,648,007 - - 5,365,724 - -
Trade and other payables 3,235,794 - - 1,874,996 - -
Lease creditor 185,077 - - 185,221 - -
Amounts due to related companies 155,756 - - 122,828 - -
Bank overdraft 1,096,486 - - 1,022,421 - -

Financial assets and liabilities with shorter maturities and/or with interest rates which are in line with normal
market rates are considered to have a reasonable approximation to its’ fair value. Accordingly the fair value
hierarchy was not applicable.

88 Lion Brewery (Ceylon) PLC

32.2 Financial Risk Management

The Group is exposed to a range of financial risks through its number of financial instruments.

In particular, the key financial risk categories are:

A. Credit risk/counterparty risk

B. Liquidity risk
C. Market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and managing risk, and the management of capital.
Further, quantitative disclosures are included throughout these financial statements.

Risk Management Framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group risk
management framework.

The Group risk management processes are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits, controls to monitor risks and adherence to limits. Risk management
systems are reviewed regularly to reflect changes in market conditions and the Group activities.

The Audit Committee oversees how management monitors compliance with the Group risk management
processes/guidelines and procedures to review the adequacy of the risk management framework in relation
to the risks. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes
both regular and ad hoc reviews of risk management controls and procedures, the results of which are
reported to the Audit Committee.

32.2.1 Credit Risk/Counterparty Risk

Credit /Counterparty risk is the risk that at a future date , the other party to a financial transaction may
cause a financial loss to the Group by failing to discharge an obligation.

Key areas where the Group is exposed to counterparty risk as a part of its operations are:

• Trade and other receivables

• Amounts due from related companies
• Cash and cash equivalents including fixed deposits

Annual Report 2021/22 89

NOTES TO THE FINANCIAL STATEMENTS

32 FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT CONTD.

32.2.2 Management of credit risk

The Group manages its credit risk with different types of instruments as follows.

Item Procedure

Fixed deposits Deposits are only with reputed and established commercial banks with a rating of
"A+" or above.
Trade and other Most of trade receivables are covered through either bank guarantees or as a
receivables discounting arrangement without recourse to the Company with a commercial bank.
Amounts due from Monitor the balance outstanding regularly
related companies
Cash and cash Monitor the balance outstanding regularly and also balances are with reputed and
equivalents established banks with a rating of "BBB+" or above.

32.2.3 Exposure to credit risk

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

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Trade and other receivables 653,623 540,023 656,361 546,098

Amounts due from related companies 374,178 445,619 374,178 445,619

Cash and cash equivalents 12,886,716 9,521,707 13,009,962 9,661,198
13,914,517 10,507,349 14,040,501 10,652,915

The maximum exposure to credit risk at the reporting date by type of counterparty was:
Financial institutions 12,886,716 9,521,707 13,009,962 9,661,198
Customers and other parties 653,623 540,023 656,361 546,098
Related parties 374,178 445,619 374,178 445,619
13,914,517 10,507,349 14,040,501 10,652,915

90 Lion Brewery (Ceylon) PLC

32.2.4 Trade & Other Receivables

The Group has a well established credit policy for both international and domestic customers to minimise
credit risk. A credit evaluation team comprising of personnel from finance, sales & operations evaluate
and recommend the credit worthiness of the customer. The company obtains bank guarantee from all the
agents to cover part of their outstanding whilst the balance is covered through a facility from a bank.
This banking facility is extended to all agents except those who are out of the scheme.

The bank guarantees and the facility from the bank cover 95% (2021 - 81%) of the trade receivables.

32.2.5 Impairment Losses

The aging of trade receivables at the reporting date are as follows.

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Age

Past due 0 - 365 days 605,015 512,188 605,015 512,188

More than 365 days 1,341 51 1,341 51
606,356 512,239 606,356 512,239

32.3.1 Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligation associated with its
financial liabilities that are settled by delivering cash or other financial assets.

32.3.2 Management of liquidity risk

The Group’s approach to managing liquidity is to ensure, that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation. The Group’s approach to managing its liquidity risk is as follows:

a). Regularly monitoring of the Group’s assets and liabilities in order to forecast cash flows for up to
future period

b). Arrange adequate facilities with banks as contingency measures.

c). Daily monitoring the facility limits i.e. overdrafts with banks.

Annual Report 2021/22 91

NOTES TO THE FINANCIAL STATEMENTS

32 FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT CONTD.

32.3.3 The Maturity Analysis of Liabilities

The tables below summarises the maturity profile of financial liabilities on contractual undiscounted (principal
plus interest) payments.

As at 31st March 2022 (Current & Non Current) - Company

In Rs.’000s Total Current Non-Current

Up to Year 1 Above year 1

Bank overdrafts 1,096,486 1,096,486 -

Loans and borrowings 5,648,007 3,347,696 2,300,311
Trade & other payables 3,234,345 3,234,345 -
Amounts due to related companies 155,756 155,756 -
Lease creditor 283,171 48,652 234,519
10,417,765 7,882,935 2,534,830

As at 31st March 2021 (Current & Non Current) - Company

In Rs.’000s Total Current Non-Current

Up to Year 1 Above year 1

Bank overdrafts 1,022,404 1,022,404 -

Loans and borrowings 5,365,724 1,868,664 3,497,060

Trade & other payables 1,873,132 1,873,132 -
Amounts due to related companies 123,342 123,342 -
Lease creditor 296,942 45,142 251,800
8,681,544 4,932,684 3,748,860

92 Lion Brewery (Ceylon) PLC

As at 31st March 2022 (Current & Non Current) - Group

In Rs.’000s Total Current Non-Current

Up to Year 1 Above year 1

Bank overdrafts 1,096,486 1,096,486 -

Loans and borrowings 5,648,007 3,347,696 2,300,311

Trade & other payables 3,235,794 3,235,794 -
Amounts due to related companies 155,756 155,756 -
Lease creditor 283,171 48,652 234,519
10,419,214 7,884,384 2,534,830

As at 31st March 2021 (Current & Non Current) - Group

In Rs.’000s Total Current Non-Current

Up to Year 1 Above year 1

Bank overdrafts 1,022,421 1,022,421 -

Loans and borrowings 5,365,724 1,868,664 3,497,060

Trade & other payables 1,874,996 1,874,996 -
Amounts due to related companies 122,828 122,828 -
Lease creditor 296,942 45,142 251,800
8,682,911 4,934,051 3,748,860

32.4.1 Market Risk

Market risk is the risk that changes in market prices, such as interest rates, equity prices, foreign exchange
rates and credit spreads (not relating to changes in the obligor’s / issuer’s credit standing) that can
affect the Group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return on risk.

32.4.2 Management of market risks

Borrowing rates of most borrowings are linked to AWPLR Hence, any movement will be in line with the
market and have a corresponding impact.

Annual Report 2021/22 93

NOTES TO THE FINANCIAL STATEMENTS

32 FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT CONTD.

32.4.3 Currency Risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign
exchange rates. The group is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US Dollar (USD), Euro (EUR) and the Great Britain Pound (GBP). As protection
against exchange rate fluctuations, the Group backs its commitments in local currency. The Group does
not use any derivative financial instruments to hedge the risk.

The following significant exchange rates were applied during the year:

Closing exchange rates Average exchange rates

In Rs. 2022 2021 2022 2021

US Dollar (USD) 299.00 202.04 205.22 188.39

Great Britain Pound (GBP) 394.57 278.24 280.20 246.47

Euro (EUR) 334.56 237.40 238.26 219.87

The Group considered a further 5% strengthening or weakening of the functional currency against
non-functional currencies as a reasonably possible change. The impact is calculated with reference to
the financial assets or liabilities held as at the year end. A 5% increase or decrease of functional currency
against non-functional currencies would result in Rs. 89 Mn impact on pre-tax profit.

32.4.4 Interest Rate Risk

Interest rate risk is the risk to the Group’s earnings and economic value of equity (“EVE”) arising from
adverse movements in interest rates.

The Group’s short-term investments are at fixed interest rates and mature within three months from the date
of the deposit.

94 Lion Brewery (Ceylon) PLC

32.4.4.1 Fixed and Variable rated instruments

Company Group
As at 31st March 2022 2021 2022 2021
In Rs.’000s

Fixed rated instruments

Financial assets 9,019,538 8,084,645 9,134,538 8,199,645

Financial liabilities 3,872,577 2,747,721 3,872,577 2,747,721

Variable rated instruments

Financial assets 869,660 203,937 869,721 203,997
Financial liabilities 2,271,386 3,081,604 2,271,386 3,081,621

32.4.4.2 Sensitivity analysis on interest rate fluctuation

If one percentage point change in the interest rate would have the following impact on pre tax profit.

Instrument Increase by one Decrease by

In Rs.’000s percentage one percentage

Commercial Bank-Rs. 1 Bn 874 (874)

NDBIB Loan- Rs.1.5 Bn 10,875 (10,875)
Potential impact 11,749 (11,749)

32.4.4.3 Management of interest rate risk

The facility limits given by banks are reviewed annually or whenever required. The market rates/values,
trends & movements are reviewed weekly to ascertain the interest rate risk and plan of action. A daily review
is made on outstanding balances and interest rates.

Annual Report 2021/22 95

NOTES TO THE FINANCIAL STATEMENTS

33 RELATED PARTY DISCLOSURES

33.1 Parent and ultimate controlling party

Ceylon Beverage Holdings PLC is the immediate Parent Company of Lion Brewery (Ceylon) PLC. Carson
Cumberbatch PLC is the Parent Company of Ceylon Beverage Holdings PLC and Bukit Darah PLC is the
Ultimate Parent and Controlling Entity of Ceylon Beverage Holdings PLC.

33.2 Transactions with key management personnel (KMP)

According to Sri Lanka Accounting Standard 24 “Related Party Disclosures”, key management personnel
are those having authority and responsibility for planning and controlling the activities of the entity.
Accordingly, the Directors of the Company and its parent company (including executive and non executive
directors) have been classified as KMP of the Company.

Compensation paid to the key management personnel of the Company comprise as follows;

Company Group
For the year ended 31st March 2022 2021 2022 2021
In Rs.’000s

Short term employee benefits 37,635 30,652 37,635 30,652

37,635 30,652 37,635 30,652

As at 31st March 2022 an amount of Rs. 28,525,146/- (2021 - Rs. 26,719,396/-) is payable towards
gratuity of Key Management Personnel whilst a Company maintained vehicle is provided for both official &
private use.

During the financial year Company transferred two motor vehicles to a key management personnel at a
value of Rs. 3,125,000/-.

96 Lion Brewery (Ceylon) PLC

33.3 Other related party transactions

The company carried out transactions in the ordinary course of its business with parties who are defined as
related parties in Sri Lanka Accounting Standard LKAS 24 - ‘Related Party Disclosures’, the details of which
are reported below.

Transactions with related parties are carried out on an arms length basis. Outstanding balances as at year
end are unsecured, interest free (except for Ceylon Beverage Holdings PLC and Pubs ‘N Places (Private)
Limited) and all related-party dues are on demand and settlement occurs in cash. There have been no
guarantees provided or received for any related party receivables or payables for the year ended 31st March
2022 and the Group has not recorded any impairment for receivables relating to amount owed by Group
entities.

Non-recurrent related party transactions

There were no non-recurrent related party transactions which in aggregate value exceeds 10% of the equity
or 5% of the total assets, whichever is lower, of the Company as per 31 March 2021 audited financial
statements, which required additional disclosures in the 2021/22 Annual Report under Colombo Stock
Exchange listing Rule 9.3.2 and Code of Best Practices on Related Party Transactions issued by the
Securities and Exchange Commission.

Recurrent related party transactions

There were no recurrent related party transactions which in aggregate value exceeds 10% of the
consolidated revenue of the Group as per 31 March 2021 audited financial Statements, which required
additional disclosures in the 2021/22 Annual Report under Colombo Stock Exchange listing Rule 9.3.2
and Code of Best Practices on Related Party Transactions issued by the Securities and Exchange
Commission.

(A) Transactions with Parent Company - Ceylon Beverage Holdings PLC

Messrs. D.A.Cabraal, H Selvanathan, S.K.Shah (retired as Chief Executive Officer & Executive Director
w.e.f. 30/06/2021), D.C.R. Gunawardena, R.H. Meewakkala (Appointed Chief Executive Officer
w.e.f. 01/07/2021 continues to be an Executive Director on the Board [CEO/Executive Director]), S. Clini
and Mrs. S. J. F. Evans Directors of the company are also Directors of Ceylon Beverage Holdings PLC with
which the following contracts / transactions have been entered into during the period by the Company in
the normal course of business.

(i) As per the licensed brewing agreement with Ceylon Beverage Holdings PLC, the Company was
charged Rs. 180,139,761/- (2020/21 - Rs. 160,134,729/-) as royalty during the period.

(ii) A dividend of Rs. 755,722,087/‐ was paid by the company to Ceylon Beverage Holdings PLC during
the year (2020/21 ‐ Rs. 334,390,304/‐).

(iii) As per the loan agreement with Ceylon Beverage Holdings PLC, the Company charged
Rs. 19,441,611/- (2020/21 - Rs. 25,733,505/-) at a rate of AWPLR+1% as loan interest during the
period.

(iv) Balance receivable from Ceylon Beverage Holdings PLC as at 31st March 2022 is
Rs. 337,740,750/- (2020/21 - Rs. 378,150,804/-).

Annual Report 2021/22 97

NOTES TO THE FINANCIAL STATEMENTS

33 RELATED PARTY DISCLOSURES CONTD.

33.3 Other related party transactions Contd.

(B) Transactions with Fellow Subsidiary - Pubs ‘N Places (Private) Limited

Messrs. S.K. Shah (resigned w.e.f. 30/06/2021), D.R.P. Goonetilleke and R.H. Meewakkala, Directors of the
Company are also Directors of Retail Spaces (Private) Limited, to which the Company sold beer for a total
value of Rs. 138,597,893 /- during the period (2020/21-Rs. 154,862,995/-). In addition to this,

(i) An amount of Rs. 3,389,970/- was paid by the Company to Pubs ‘N Places (Private) Limited as
trade rebates on beer purchases during the period.(2020/21- Rs. 4,323,876/-).
(ii) As per the loan agreement with Pubs ‘N Places (Private) Limited, the Company charged
Rs. 2,179,123/- (2020/21- Rs. 5,553,724/-) at a rate of AWPLR+1% as loan interest during the
period.
(iii) An amount of Rs. 30,749,877/- was paid by the company to Pubs ‘N Places (Private) Limited
as marketing fee for the outlets operated by Pubs ‘N Places (Private) Limited during the period.
(2020/21 - Rs. 36,666,520/-).
(iv) Balance receivable from Pubs ‘N Places (Private) Limited as at 31st March 2022 is Rs. 36,437,302/-.
(2020/21 - Rs. 67,468,046/-).

(C) Transactions with Fellow Subsidiary - Retail Spaces (Private) Limited

Messrs. S.K. Shah (resigned w.e.f. 30/06/2021), D.R.P. Goonetilleke and R.H. Meewakkala, Directors of the
Company are also Directors of Retail Spaces (Private) Limited, to which the Company sold beer for a total
value of Rs. 321,475,904/- (2020/21 - Rs. 283,734,702/-) during the period.
(i) Balance receivable from Retail Spaces (Private) Limited as at 31st March 2022 is Nil. (2020/21 - Nil)

(D) Transactions with Fellow Subsidiary - Luxury Brands (Private) Limited

Messrs. S.K. Shah (resigned w.e.f. 30/06/2021), D.R.P. Goonetilleke and R.H. Meewakkala, Directors of the
Company are also Directors of Luxury Brands (Private) Limited, for which the Company provided distribution
services for a fee amounting to Rs. 3,688,723/- (2020/21 - Rs. 2,886,716/-) during the period. In addition
to this,

(i) Lion Brewery (Ceylon) PLC purchased Rs. 2,220,000/- worth of beer coolers in 2020/21.
(ii) Balance receivable from Luxury Brands (Private) Limited as at 31st March 2022 is Nil. (2020/21 - Nil)

(E) Transactions with Subsidiary - Millers Brewery Limited

Messrs. S.K Shah (resigned w.e.f. 30/06/2021), D.R.P. Goonetilleke and R.H. Meewakkala Directors of the
Company are also Directors of Millers Brewery Limited.

(i) An amount of Rs. 13,258,470/- (2020/21 -Rs.9,065,248/-) was charged by Millers Brewery Limited
for warehouse services provided to the Company during the period.
(ii) Company purchased Rs. 150,000/- worth of fixed assets from Millers Brewery Limited in 2020/21
which had net book value of Rs. 152,917/- at the disposal date.
(iii) Balance payable to Millers Brewery Limited as at 31st March 2022 is Nil. (2020/21 - Rs. 513,590/-).

98 Lion Brewery (Ceylon) PLC

(F) Transactions with Group entities

Messrs. H.Selvanathan, S.K.Shah (resigned w.e.f. 30/06/2021), K. Selvanathan and S. Selvanathan Directors
of the Company, are also Directors of Carsons Management Services (Private) Limited., which provides
supporting services to the Company. An amount of Rs. 1,087,141,868/- (2020/21 - Rs. 653,522,364/-)
was charged by Carsons Management Services (Private) Limited to the Company during the period, which
included support services fees of Rs. 823,050,000/- (2020/21 - Rs. 488,426,525/-) and other reimbursable
expenses incurred by Carsons Management Services (Private) Limited on behalf of the Company. Balance
receivable from Carsons Management Services (Private) Limited as at 31st March 2022 is Nil. (2020/21 - Nil).

(G) Transactions with other related entities

(a) Mr. S. Clini and Ms. V. Gun Directors of the Company represents the Carlsberg Group with which
the following contracts / transactions have been entered into during the period by the Company in
the normal course of business.
(i) As per the licensed brewing agreement, a sum of Rs. 123,557,037/- (2020/21 - Rs. 142,792,835/-)
was charged as royalty during the period by Carlsberg A/S.
(ii) An amount of Rs. 155,755,785/- remains payable as at 31st March 2022. (2020/21 - Rs. 122,828,483/-).

(b) Mr. D.C.R. Gunawardena, Director of the Company, is also a Director of Equity One Limited with
which the following transactions have been entered into during the period by the Company in the
normal course of business.
(i) An amount of Rs. 70,600/- has been charged for the use of conference room during the period.
(2020/21 - 45,432/-).
(ii) Balance payable/receivable to Equity One Limited as at 31st March 2022 is Nil (2020/21 - Nil).

(c) Messrs. D.C.R. Gunawardena and K. Selvanathan Directors of the Company are also Directors of
Pegasus Hotels of Ceylon PLC with which the following transactions have been entered into during
the period by the Company in the normal course of business.
(i) An amount of Rs. 1,021,068/- recognised as income from sale of beer in the normal course of
business (2020/21 - Rs. 613,921/-).
(ii) An amount of Rs. 26,000/- was charged for the hotel services provided during the period
(2020/21 - Rs. 609,497/-).
(iii) Balance payable/receivable to Pegasus Hotels of Ceylon PLC as at 31st March 2022 is Nil.
(2020/21 - Nil).

Annual Report 2021/22 99

NOTES TO THE FINANCIAL STATEMENTS

33 RELATED PARTY DISCLOSURES CONTD.

33.3 Other related party transactions Contd.

(d) Mr. D.C.R. Gunawardena, Director of the Company, who was a Director of Equity Hotels Limited
until 31 March 2022 with which the following transactions have been entered into during the period
by the Company in the normal course of business.
(i) An amount of Rs. 258,913/- is recognised as income from sale of beer to Equity Hotels Limited in
the normal course of business (2020/21 - Rs. 51,317/-).
(ii) Balance payable/receivable to Equity Hotels Limited as at 31st March 2022 is Nil (2020/21 - Nil).

33.4 Fully Owned Subsidiaries – Pearl Springs (Private) Limited (PSPL) & Millers Brewery
Limited (MBL)

The Company together with its subsidiary, Pearl Springs (Private) Limited (PSPL) acquired Millers Brewery
Limited (MBL) in 2014. Management is currently evaluating the available options in order to ensure the
assets in both PSPL and MBL are used to maximise the value in both entities. Accordingly as at the
reporting date, no commercial operations were carried out since the date of acquisition in both entities.

34 COMMITMENTS AND CONTINGENCIES

34.1 Finance Commitments

Document credits established for foreign purchases of the Company as at 31st March 2022 amounts to
Rs. 2,703,598,404/- (2020/21 ‐ Rs.  2,360,499,818/-).

34.2 Capital Commitments

Capital expenditure committed by the Company for which a provision has not been made in the Financial
Statements amounts to Rs. 893,574,836/- at 31st March 2022 (2020/21 ‐ Rs. 89,297,680/-).

34.3 Contingencies

Contingent liabilities as at 31st March 2022 amounts to Rs. 1,141,663,791/- (2020/21‐ Rs. 200,110,727/-),
being bank guarantees given to Government bodies and  foreign suppliers for operational purposes.

35 EVENTS OCCURRING AFTER THE REPORTING PERIOD

35.1 Interim dividend

The Board of Directors has approved second interim dividend of Rs. 17.25 per share for the year ended
31st March 2022 on 12th May 2022. In Accordance with Sri Lanka Accounting Standards LKAS 10 Events
after the Reporting period, this dividend has not been recognised as a liability as at 31st March 2022.

100 Lion Brewery (Ceylon) PLC

35.2 Surcharge tax
According to the Surcharge Tax Act No. 14 of 2022 which was legislated on 8th April 2022, the Group
is liable for the surcharge tax of Rs. 1,193,963,584/- out of the taxable income of Rs. 4,775,854,335/-
for year of assessment 2020/21. Therefore, the surcharge tax shall be deemed to be an expense in the
financial statements for the year ended 31st March 2021. Since the Act supersedes the requirements of the
Sri Lanka Accounting Standards, the surcharge tax expense is accounted as recommended by the
Statement of Alternative Treatment on accounting for Surcharge Tax issued by the Institute of Chartered
Accountants of Sri Lanka, in April 2022.

The impact of the surcharge tax on the comparative year is as follows,

In Rs.’000s
Profit after tax for the year ended 31st March 2021 2,471,096
Surcharge tax levied under Surcharge Act (1,193,964)
Comparable profit for the year 2020/2021 1,277,132

35.3 Value added tax

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

35.4 Operating environment

The free floating of the USD caused a sharp depreciation of the SLR resulting in steep increases in the
prices of raw materials & other inputs including freight costs applicable to both direct & indirect imports.
Due to the short supply of USD in the formal banking channels, the Letters of Credit for direct imports are
established consequent to careful financial planning, giving consideration to their due settlement dates & the
ability to settle the suppliers on time. The Company has supporting export revenue in USD to supplement
to the extent possible, the foreign currency requirement for direct imports. The inventory levels are also
appropriately managed to minimise the impact of any eventualities. Due to various operational challenges,
the associated costs have risen which remains to be addressed on a clean sheet basis. As the transport is
carried out by outsourced parties, it is managed to the best of their abilities.
Apart from above, there are no circumstances have arisen which required adjustment to or disclosure in the
Financial Statements subsequent to the reporting date.

36 COMPARATIVE FIGURES
Certain comparative figures have been reclassified to give proper presentations as at 31st March 2022.

37 SEGMENTAL ANALYSIS
The Group does not distinguish its products into significant components for different geographical
segments as the differentiations are insignificant.

38 DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors takes the responsibility for the preparation and presentation of these Financial
Statements. Please refer the Annual Report of the Board of Directors on the affairs of the Company for the
Directors’ Responsibilities for financial reporting.

Annual Report 2021/22 101

VALUE ADDED STATEMENT
For the year ended 31st March 2022 2021
In Rs.’000s

Revenue 58,570,885 49,849,287

Value added tax 4,656,883 4,013,871

Other income 189,902 338,404
Finance income 648,869 695,281
64,066,539 54,896,843

Cost of material & services bought from outside (8,003,483) (10,499,125)

Value added 56,063,056 44,397,718

For the year ended 31st March 2022 % 2021 %

In Rs.’000s

Distributed as follows

To employees
as remuneration and other employee costs 1,086,798 1.94 959,968 2.16

To Government
as value added tax 4,656,883 8.31 4,013,871 9.04
as excise duty 38,963,054 69.50 30,646,315 69.03
as excise other levies 278,326 0.50 112,312 0.25
as import duty 967,507 1.73 759,425 1.71
as income tax 2,086,000 3.72 1,800,000 4.05

To providers of capital
as dividends to shareholders 1,674,400 2.99 1,152,000 2.59
as finance expenses 389,793 0.70 1,143,396 2.58

Retained in the business

as depreciation/amortisation 1,561,104 2.76 1,338,663 3.02
as profit for the year 4,399,191 7.85 2,471,768 5.57
56,063,056 100.00 44,397,718 100.00

102 Lion Brewery (Ceylon) PLC

VALUE ADDED STATEMENT

Notes:

1 The Statement of Value Added shows the quantum of wealth generated by the activities of the
Company and its applications.

2 The total tax liability / payment made to the Government during the year include the following:

In Rs.’000s 2022 2021

Value added tax 4,656,883 4,013,871

Excise duty 38,963,054 30,646,315
Excise other levies 278,326 112,312
Import duty 967,507 759,425
Income tax 2,086,000 1,800,000
Total tax liability/payments made to the Government 46,951,770 37,331,923

Annual Report 2021/22 103

FIVE YEAR SUMMARY
Year ended 31st March 2022 2021 2020 2019 2018
In Rs.’000s

Revenue 58,570,885 49,849,287 47,835,328 42,830,494 29,798,010

Progressive insurance receipts on
business interruption - - - - 1,205,359

Other income 189,902 338,404 162,319 143,060 75,788

58,760,787 50,187,691 47,997,647 42,973,554 31,079,157
Total expenditure (53,024,100) (45,032,670) (42,351,895) (36,725,974) (27,448,999)
Impairment of intangible assets (463,578) (449,084) (740,315) - -
Operating profit 5,273,109 4,705,937 4,905,437 6,247,580 3,630,158
Progressive insurance receipts on
property damage - - - - 752,263
Profit before finance cost       5,273,109 4,705,937 4,905,437 6,247,580 4,382,421
Net finance income / (expenses) 259,076 (448,115) (517,104) (934,256) (1,334,791)
Profit before tax 5,532,185 4,257,822 4,388,333 5,313,324 3,047,630
Income tax expense (1,864,080) (1,786,726) (1,576,203) (2,092,444) (1,209,754)
Profit for the year 3,668,105 2,471,096 2,812,130 3,220,880 1,837,876
Total other comprehensive income/
(loss) for the year net of tax 731,086 672 288,632 208,466 (420,856)
Total comprehensive income for
the year 4,399,191 2,471,768 3,100,762 3,429,346 1,417,020

Dividends - Ordinary (Note 30) 1,674,400 1,152,000 640,000 800,000 320,000

Excise duty expense 38,963,054 30,646,315 29,233,357 24,140,705 17,812,430

104 Lion Brewery (Ceylon) PLC

As at 31st March 2022 2021 2020 2019 2018
In Rs.’000s

STATEMENT OF FINANCIAL
POSITION
Stated capital 2,537,801 2,537,801 2,537,801 2,537,801 2,537,801

Capital reserves 2,092,103 1,388,475 1,388,475 1,106,770 905,824

Retained profits 15,297,757 13,048,135 11,216,367 8,876,188 5,967,788
19,927,661 16,974,411 15,142,643 12,520,759 9,411,413
Loans & borrowings and leases 5,833,084 5,550,945 12,762,296 9,593,967 11,681,673
Debentures - - - 2,078,285 3,110,582
Less: Cash (11,916,746) (8,642,977) (11,170,815) (9,460,830) (7,128,583)
CAPITAL EMPLOYED 13,843,999 13,882,379 16,734,124 14,732,181 17,075,085

REPRESENTED BY
Total non-current assets 21,444,595 20,209,115 20,957,348 20,452,100 20,507,540
Total current assets excluding cash
& cash equivalents 6,609,052 5,279,052 4,488,572 4,578,276 4,805,209
Total current liabilities-excluding
borrowings & overdraft (8,810,318) (6,283,330) (3,396,639) (5,100,593) (4,444,755)
Employee benefits (173,704) (233,933) (198,737) (197,430) (184,877)
Deferred tax liabilities (5,225,626) (5,088,525) (5,116,420) (5,000,172) (3,608,032)
13,843,999 13,882,379 16,734,124 14,732,181 17,075,085

Annual Report 2021/22 105

FIVE YEAR SUMMARY

Year ended 31st March 2022 2021 2020 2019 2018

In Rs.’000s

CASH FLOW STATISTICS

Net cash inflows from operating
activities 4,818,026 5,544,893 1,949,628 5,531,361 2,731,870
Net cash inflows/(outflows) from
investing activities (1,029,875) (125,646) (577,239) 394,586 (363,400)
Net cash inflows/(outflows) from
financing activities (1,249,786) (7,985,462) 337,596 (3,593,700) (1,484,116)
Net cash movement for the year 2,538,365 (2,566,215) 1,709,985 2,332,247 884,354

RATIOS & STATISTICS

Return on shareholders' funds (%) 22.08 14.56 20.48 27.39 15.06
Return on capital employed (ROCE)
(times) 38.09 33.90 29.31 42.41 25.67
Assets turnover (times) 1.43 1.42 1.23 1.21 0.89
Equity to total assets (times) 2.06 2.07 2.56 2.82 3.55
Interest cover (times) - 10.50 9.49 6.69 3.28
Gearing ratio (%) - - 9.51 15.01 44.88
Current ratio (times) 1.48 1.63 1.15 1.04 0.96
Quick ratio (times) 1.14 1.25 0.98 0.89 0.84
Price earnings ratio (times) 11.45 18.42 14.79 13.79 22.87
Net assets per share (Rs.) 249.10 212.18 189.28 156.51 117.64
Dividends - Ordinary (Rs.) (Note 30) 20.93 14.40 8.00 10.00 4.00
Dividend payout ratio (%) - Company 45.31 44.44 22.13 24.46 15.84

Figures in brackets indicate deductions.

106 Lion Brewery (Ceylon) PLC

STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME (GROUP) - USD
For the year ended 31st March Note 2022 2021
In USD ‘000s

Revenue 2 285,405 264,613

Cost of sales (228,033) (211,422)

Gross profit 57,372 53,191
Other income 925 1,796
58,297 54,987
Distribution expenses (16,555) (14,947)
Administrative expenses (10,510) (8,839)
Other expenses (3,279) (3,837)
Impairment of intangible assets (2,259) (2,384)
Profit from operations 25,694 24,980
Finance income 3,162 3,691
Finance costs (1,899) (6,069)
Net finance income / (cost) 1,263 (2,378)

Profit before taxation 26,957 22,602

Income tax expense (10,790) (9,635)
Deferred taxation 1,707 150
Profit for the period 17,874 13,117

Other comprehensive income

Items that will not be reclassified to profit or loss
Re-measurement of employee benefit obligations 223 6
Deferred tax charge on actuarial gain (89) (2)
Revaluation gain on land & buildings 5,714 -
Deferred tax charge on land and building revaluation (2,286) -
Total other comprehensive income for the year net of tax 3,562 4

Total comprehensive income for the year 21,436 13,121

Figures in brackets indicate deductions.

Annual Report 2021/22 107

STATEMENT OF FINANCIAL POSITION (GROUP) - USD
As at 31st March 2022 2021
In USD ‘000s

ASSETS

Non-Current Assets
Property, plant & equipment 68,704 93,149
Right of use assets 508 812
Intangible assets 2,509 6,064
Total non-current assets 71,721 100,025

Current Assets
Inventories 14,845 17,289
Trade and other receivables 6,008 6,634
Amounts due from related companies 1,251 2,206
Cash and cash equivalents 43,523 47,839
Total current assets 65,627 73,968
Total assets 137,348 173,993

EQUITY AND LIABILITIES

Equity
Stated capital 33,068 33,068
Capital reserves 11,942 8,513
Retained earnings 21,639 42,435
Total equity 66,649 84,016

Non-Current Liabilities
Loans and borrowings 7,693 17,309
Lease creditor 537 818
Employee benefits 581 1,158
Net deferred tax liabilities 17,477 25,186
Total non-current liabilities 26,288 44,471

108 Lion Brewery (Ceylon) PLC

STATEMENT OF
FINANCIAL POSITION (GROUP) - USD

As at 31st March 2022 2021

In USD ‘000s

Current Liabilities
Trade and other payables 10,822 9,280
Amounts due to related companies 521 608
Refundable deposits 7,696 9,406
Current tax liabilities 10,427 11,805
Loans and borrowings 11,196 9,249
Lease creditor 82 98
Bank overdrafts 3,667 5,060
Total current liabilities 44,411 45,506
Total liabilities 70,699 89,977

Total equity and liabilities 137,348 173,993

Annual Report 2021/22 109

NOTES TO THE FINANCIAL STATEMENTS - USD
1 BASIS OF CONVERSION

The translation of Sri Lankan Rupee amounts into US Dollar amounts is solely for the convenience of the
shareholders, investors, bankers and other users of the Financial Statements.

The translation of the Financial Statements into US Dollars were effected based on the following exchange
rates:

As at 31st March 2022 2021

Income statement Average rate 205.22 188.39

Monetary assets and liabilities Closing rate 299.00 202.04

Non-current assets and liabilities Closing rate 299.00 202.04
Ordinary share capital Historical rate 76.74 76.74

2 REVENUE

For the year ended 31st March 2022 2021

In USD ‘000s

Local revenue 275,140 257,629

Export revenue 10,265 6,984

285,405 264,613

110 Lion Brewery (Ceylon) PLC

FIVE YEAR SUMMARY - USD
Year ended 31st March 2022 2021 2020 2019 2018
In USD ‘000s

Revenue 285,405 264,613 266,533 253,851 191,393

Progressive insurance receipts on
business interruption - - - - 7,742

Other income 925 1,796 904 848 487

286,330 266,409 267,437 254,699 199,622
Total expenditure (258,377) (239,045) (235,979) (217,671) (176,306)
Impairment of intangible assets (2,259) (2,384) (4,125) - -
Operating profit 25,694 24,980 27,333 37,028 23,316
Progressive insurance receipts on
property damage - - - - 4,832
Profit before finance cost 25,694 24,980 27,333 37,028 28,148
Net finance income / (expenses) 1,263 (2,378) (2,881) (5,538) (8,573)
Profit before tax 26,957 22,602 24,452 31,490 19,575
Income tax expense (9,083) (9,485) (8,783) (12,401) (7,770)
Profit for the year 17,874 13,117 15,669 19,089 11,805
Total other comprehensive income /
(loss) for the year 3,562 4 1,608 1,235 (2,703)
Total comprehensive income for
the year 21,436 13,121 17,277 20,324 9,102

Dividends - Ordinary 5,238 5,702 3,566 4,742 2,055

Excise duty expense 189,860 162,675 162,887 143,081 114,410

Annual Report 2021/22 111

FIVE YEAR SUMMARY - USD

As at 31st March 2022 2021 2020 2019 2018

In USD ‘000s

STATEMENT OF FINANCIAL
POSITION
Stated capital 33,068 33,068 33,068 33,068 33,068
Capital reserves 11,942 8,513 8,513 6,943 5,752
Retained profits 21,639 42,435 37,105 30,324 20,938
66,649 84,016 78,686 70,335 59,758
Loans & borrowings and leases 19,508 27,474 66,313 53,893 74,174
Debentures - - - 11,675 19,751
Less-Cash (39,856) (42,779) (58,044) (53,146) (45,264)
CAPITAL EMPLOYED 46,301 68,711 86,955 82,757 108,419

REPRESENTED BY
Total non-current assets 71,721 100,025 108,897 114,888 130,215
Total current assets excluding
cash & cash equivalents 22,104 26,129 23,324 25,718 30,511
Total current liabilities-excluding
borrowings & overdraft (29,466) (31,099) (17,648) (28,652) (28,223)
Employee benefits (581) (1,158) (1,033) (1,109) (1,174)
Deferred tax liabilities (17,477) (25,186) (26,585) (28,088) (22,910)
46,301 68,711 86,955 82,757 108,419

112 Lion Brewery (Ceylon) PLC

INFORMATION TO SHAREHOLDERS
& INVESTORS
1 STOCK EXCHANGE LISTING

Lion Brewery (Ceylon) PLC is a Public Quoted Company, the issued ordinary shares of which are listed with
the Colombo Stock Exchange of Sri Lanka.

The Stock Exchange code for Lion Brewery (Ceylon) PLC shares is “LION”.

2 SHARE VALUATION

The market price of the Company’s share as at 31st March 2022 was Rs. 525/- per share (2021 - Rs. 569/-).

3 ORDINARY SHAREHOLDERS

As at 31st March 2022 2021

Number of shareholders 1,279 1,268

(a) Frequency distribution of shareholdings as at 31st March 2022

Distribution of Residents Non-Residents Total

Shares

No. of No. of % No. of No. of % No. of No. of %

Members Shares Members Shares Members Shares

1 - 1,000 1,066 159,989 0.20 12 5,052 0.01 1,078 165,041 0.21

1001 - 10,000 142 393,048 0.49 15 48,790 0.06 157 441,838 0.55
10,001 - 100,000 23 832,065 1.04 5 219,031 0.27 28 1,051,096 1.31
100,001 - 1,000,000 2 507,947 0.63 8 3,258,747 4.07 10 3,766,694 4.71
Above 1,000,000 4 48,985,389 61.23 2 25,589,942 31.99 6 74,575,331 93.22
Grand Total 1,237 50,878,438 63.59 42 29,121,562 36.40 1,279 80,000,000 100.00

(b) Categories of Shareholders as at 31st March 2022

No. of No. of %
Shareholders Shares
Individual 1,188 967,778 1.21
Institutions 91 79,032,222 98.79
Total 1,279 80,000,000 100.00

(c) The number of shares held by non-residents as at 31st March 2022 was 29,121,562
(2021 - 29,189,179) which amounts to 36.40% (2021 - 36.49%) of the total number of shares in issue.

Annual Report 2021/22 113

INFORMATION TO SHAREHOLDERS
& INVESTORS

(d) Public Holding

The Company is in compliance with the Minimum Public Holding requirements for Companies listed on the
Main Board as per Rule 7.14.1 (i)(a) of the Listing Rules of the Colombo Stock Exchange, under Option
3, i.e. Float-Adjusted Market Capitalisation of Rs.5 Bn with 500 Public Shareholders and a Public Holding
percentage of 7.5%.

The Company’s Public Holding as at 31st March 2022

Market Capitalisation of the Public Holding Rs. 5.65 Billion

Percentage of ordinary shares held by the public 13.46%
Number of Public Shareholders 1,256

4 MARKET PERFORMANCE- ORDINARY SHARES

For the year ended 31st March 2022 2021

Highest (Rs.) 615.00 639.90
Lowest (Rs.) 451.00 445.00
Value of Shares traded (Rs. Mn) 487 2,814
No. of shares traded 890,157 5,374,644

5 MARKET CAPITALISATION

The market capitalisation of the Company, which is the number of ordinary shares in issue multiplied by the
market value of a share was Rs. 42,000,000,000/- as at 31st March 2022. (2021 - Rs. 45,520,000,000/-).

6 DIVIDENDS

6.1 A First Interim Dividend of Rs.14.40 per ordinary share amounting to Rs.1,152,000,000/- for the year
ended 31st March 2021 was announced on 28th June 2021. Shareholders of the Company who
had provided accurate bank account details were paid on 09th July 2021 and to the Shareholders
who had not provided accurate bank account details or had not provided any bank account details,
the dividends was paid on 29th July 2021.

6.2 A First Interim Dividend of Rs.3.68 per ordinary share amounting to Rs.294,400,000/- for the year
ended 31st March 2022 was announced on 09th November 2021. Shareholders of the Company
who had provided accurate bank account details were paid on 26th November 2021 and to the
Shareholders who had not provided accurate bank account details or had not provided any bank
account details, the dividends was paid on 09th December 2021.

6.3 A Second Interim Dividend of Rs.17.25 per ordinary share amounting to Rs.1,380,000,000/- for the
year ended 31st March 2022 was announced on 13th May 2022. Shareholders of the Company who
had provided accurate bank account details were paid on 01st June 2022 and to the Shareholders
who have not provided accurate bank account details or have not provided any bank account
details, the dividends was paid on 15th June 2022.

114 Lion Brewery (Ceylon) PLC

GLOSSARY OF FINANCIAL TERMS
APPROPRIATIONS EVENTS OCCURRING AFTER REPORTING
DATE
Apportioning of earnings as dividends, capital and
revenue reserves Significant events that occur between the reporting
date and the date on which financial statements
CAPITAL RESERVES
are authorised for issue.
Reserves identified for specified purposes and
GEARING
considered not available for distribution.
Ratio of borrowings to capital employed.
CASH EQUIVALENTS
INTEREST COVER
Liquid investments with original maturities of twelve
months or less. Profits before tax and interest charges divide by
Net interest charges.
CONTINGENT LIABILITIES
MARKET CAPITALISATION
Conditions or situations at the Balance Sheet
date, the financial effects of which are to be The Market value of a company at a given date
determined by future events which may or may not obtained by multiplying the market price of a share
occur. by the number of issued ordinary shares.
CURRENT RATIO NET ASSETS PER ORDINARY SHARE
Current assets divided by current liabilities. Total assets less total liabilities divided by
the number of ordinary shares in issue. This
DEBT
represents the theoretical value per share if the
Total interest bearing loans (including bank OD Company is broken up.
less interest bearing deposits).
PRICE EARNING RATIO - (P/E)
DIVIDEND COVER (ORDINARY)
Market price of a share divided by earnings per
Post tax profit divided by gross ordinary dividend. share
It measures the number of times ordinary dividends
RELATED PARTIES
are covered by distributable profits.
Parties who could control or significantly influence
DIVIDEND PER ORDINARY SHARE
the financial and operating decisions / policies of
Dividends paid and proposed, divided by the the company.
number of ordinary shares in issue which ranked
REVENUE RESERVES
for those dividends.
Reserves considered as being available for future
EARNINGS PER ORDINARY SHARE
distribution and appropriations.
Profits attributable to ordinary shareholders divided
VALUE ADDITION
by the number of ordinary shares in issue and
ranking for dividend. The quantum of wealth generated by the activities
of the Company
EQUITY
WORKING CAPITAL
Stated capital plus reserves.
Capital required to finance the day-to-day
operations ( current assets less current liabilities).
DIVIDEND PAYOUT RATIO
The percentage of earnings paid to shareholders
in dividends.

Annual Report 2021/22 115

NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the 26th Annual 5. To re-appoint Mr. D. C. R. Gunawardena as a
General Meeting of LION BREWERY (CEYLON) Director of the Company who is over seventy
PLC will be held on Wednesday, 03rd August years of age and to consider and if deemed fit
2022 at 9.00 a.m. at the 8th Floor of No.65C, to pass the following resolution:
Dharmapala Mawatha, Colombo 07, Sri Lanka by
“IT IS HEREBY RESOLVED that the age limit
means of audio or audio and visual technology for
stipulated in Section 210 of the Companies
the following purposes:
Act, No. 07 of 2007 shall not be applicable to
1. To consider the Annual Report of the Board of Mr. D. C. R. Gunawardena who is 71 years of
Directors including the Financial Statements age and that he be re-appointed as a Director
for the financial year ended 31st March 2022 of the Company from the conclusion of the
together with the Report of the Auditors Annual General Meeting for a further period of
thereon. one year.”

2. To re-elect Mrs. S. J. F. Evans who retires by 6. To re-appoint Messrs. KPMG, Chartered

rotation in terms of Articles 72, 73 and 74 of Accountants as Auditors of the Company as
the Articles of Association of the Company. set out in Section 154 (1) of the Companies
Act, No. 07 of 2007 and to authorise the
3. To re-elect Mr. S. Clini who retires by rotation
Directors to determine their remuneration.
in terms of Articles 72, 73 and 74 of the
Articles of Association of the Company. By Order of the Board

4. To re-appoint Mr. H. Selvanathan as a Director

of the Company who is over seventy years of
(Sgd)
age and to consider and if deemed fit to pass
K. D. De Silva (Mrs)
the following resolution;
Director
“IT IS HEREBY RESOLVED that the age limit CARSONS MANAGEMENT SERVICES
stipulated in Section 210 of the Companies (PRIVATE) LIMITED
Act, No. 07 of 2007 shall not be applicable to Secretaries
Mr. H. Selvanathan who is 73 years of age and
that he be re-appointed as a Director of the Colombo
Company from the conclusion of the Annual 08th July 2022
General Meeting for a further period of one
year.”

116 Lion Brewery (Ceylon) PLC

NOTICE OF MEETING

Notes: 6. A member is entitled to appoint a proxy to

attend and vote instead of him/herself. A proxy
1. This Notice and the submission of the Form
need not be a member of the Company. A
of Proxy should be read in conjunction with
Form of Proxy accompanies this Notice.
the ‘Procedure to be followed at the Annual
General Meeting of the Company scheduled 7. The completed Form of Proxy and
for 03rd August 2022’, which is enclosed with Registration Form (Annexure 1), as relevant,
the Annual Report. must be submitted to the Company not later
than 4.45 p.m. on 01st August 2022,
2. The Annual Report 2021/22 and the Notice
convening the Annual General Meeting (AGM), • via email to [email protected],
together with the Procedure to be followed at or
the AGM will be posted to the Shareholders,
• via WhatsApp or Viber to mobile no.
provided that the postal department is in
+94 764 765 463 or +94 712 791 246, or
operation at the time of posting the said
documents. In the event postal operations • by hand or post to the registered office
are curtailed at the time of posting, the Notice of the Company, No. 61, Janadhipathi
convening the AGM will be published in one Mawatha, Colombo 1.
issue of a daily newspaper/e-newspaper in
Sinhala, English and Tamil languages. 8. A person representing a Corporation is required
to submit a certified copy of the resolution
3. The documents will also be made available on authorising him/her to act as the representative
the Colombo Stock Exchange website of the Corporation. A representative need not
www.cse.lk and on the Group’s website be a member.
www.carsoncumberbatch.com and you
may access same directly through the 9. The transfer books of the Company will remain
URL link http://www.carsoncumberbatch. open.
com/investor_information/annual_
reports_2021_2022/lion-brewery-ceylon-
annual-report-2021-22.pdff

4. As permitted by Article 43(b) of the Articles

of Association of the Company, the Board
of Directors decided on 08th July 2022 to
convene the AGM of the Company through an
“audio-visual” technology in view of protecting
public health and safety.

5. Shareholders who wish to participate at the

AGM through the online platform are kindly
requested to complete and forward the
“Registration Form (Annexure 1)” as morefully
explained in the said “Procedure to be
followed at the Annual General Meeting of the
Company scheduled for 03rd August 2022”
enclosed with the Annual Report.

Annual Report 2021/22 117

NOTES

118 Lion Brewery (Ceylon) PLC

FORM OF PROXY
* I/We……………………………………………………….................…..........................…… of …………………….…
………………………………...................….. being *a Shareholder/Shareholders of LION BREWERY (CEYLON) PLC
hereby appoint ……………………………………………………………........................… of ………………………...…
………………………………………………… bearing NIC No./ Passport No…………...............……or failing him/her.

DAMIAN AMAL CABRAAL Or failing him,

HARIHARAN SELVANATHAN Or failing him,
DON CHANDIMA RAJAKARUNA GUNAWARDENA Or failing him,
DILKUSHAN RANIL PIERIS GOONETILLEKE Or failing him,
KRISHNA SELVANATHAN Or failing him,
SUSAN JULIET FARRINGTON EVANS (MRS) Or failing her,
RAJIV HERATH MEEWAKKALA Or failing him,
SUDARSHAN SELVANATHAN Or failing him,
STEFANO CLINI Or failing him,
VIVIAN GUN LING LING (MS)
as *my/our proxy to attend at the 26th Annual General Meeting of the Company to be held on Wednesday, 03rd
August 2022 at 9.00 a.m. at the 8th Floor, No. 65C, Dharmapala Mawatha, Colombo 07, Sri Lanka by means
of audio or audio and visual technology and at any adjournment thereof and at every poll which may be taken in
consequence thereof.
For Against
1. To re-elect Mrs. S. J. F. Evans who retires by rotation in terms of Articles 72, 73 and
74 of the Articles of Association of the Company.

2. To re-elect Mr. S. Clini who retires by rotation in terms of Articles 72, 73 and 74 of
the Articles of Association of the Company.

3. To re-appoint Mr. H. Selvanathan who is over seventy years of age as a Director of

the Company.
4. To re-appoint Mr. D. C. R. Gunawardena who is over seventy years of age as a
Director of the Company.
5. To re-appoint Messrs. KPMG, Chartered Accountants as Auditors of the Company
as set out in Section 154 (1) of the Companies Act, No.07 of 2007 and to authorise
the Directors to determine their remuneration.

Signed this ………… day of ……………………………….Two Thousand and Twenty Two.

……………………………………….
Signature/s
Notes
1. * Please delete the inappropriate words.
2. A shareholder entitled to attend and vote at a General Meeting of the Company, is entitled to appoint a proxy to
attend and vote instead of him/her and the proxy need not be a shareholder of the Company.
A proxy so appointed shall have the right to vote on a show of hands or on a poll and to speak at the General
Meeting of the shareholders.
3. A shareholder is not entitled to appoint more than one proxy on the same occasion.
4. Instructions are noted on the reverse hereof.

Annual Report 2021/22 119

FORM OF PROXY

INSTRUCTIONS AS TO COMPLETION
1. Kindly perfect the form of proxy after filling in legibly your full name and address, and sign in the space provided.
Please fill in the date of signature.
2. If you wish to appoint a person other than the Directors as your proxy, please insert the relevant details in the
space provided overleaf.
3. In terms of Article 54 of the Articles of Association of the Company:
The instrument appointing a proxy shall be in writing and:
(i) in the case of an individual shall be signed by the appointor or by his attorney; and
(ii) in the case of a Corporation shall be either under its common seal or signed by its attorney or by an
authorised officer on behalf of the Corporation.
The Company may, but shall not be bound to, require evidence of the authority of any such attorney or officer.
A proxy need not be a shareholder of the Company.
4. In terms of Article 50 of the Articles of Association of the Company:
In the case of joint-holders of a share, the senior who tenders a vote, whether in person or by proxy or by
attorney or by representative, shall be accepted to the exclusion of the votes of the other joint-holders and for
this purpose seniority shall be determined by the order in which the names stand in the Register of Members in
respect of the joint holding.
5. To be valid the completed Form of Proxy together with the Registration Form (Annexure 1) should be
submitted to the Company not later than 4.45 p.m. on 01st August 2022,
• via email to [email protected], or
• via WhatsApp or Viber to mobile no. +94 764 765 463 or +94 712 791 246, or
• by hand or post to the registered office of the Company, No. 61, Janadhipathi Mawatha, Colombo 1.
6. Shareholders who are unable to participate at the meeting through the online meeting platform (i.e. Zoom
platform) may appoint a proxy as his/her/its proxy by forwarding the duly completed Form of Proxy together
with the Registration Form (Annexure 1) not later than 4.45 p.m. on 01st August 2022, clearly indicating their
vote under each matter set out in the Form of Proxy as per the instructions set out in the ‘Procedure to be
followed at the Annual General Meeting of the Company scheduled for 03rd August 2022’, enclosed with
the Annual Report.
7. Shareholders could also appoint a member of the Board to act as their proxy if they so choose. The
Shareholders who wish to appoint a Director as his/her/its proxy must forward the duly completed Form of
Proxy clearly indicating their vote under each matter set out in the Form of Proxy and forward same together
with the Registration Form (Annexure 1), attached herewith to the Company.

  Please fill in the following details:

  Name & contact no. of Shareholder :…………………………………………………...........................................

  CDS Account No. / Folio No. :…………………………………………………...........................................

  Name & contact no. of Proxyholder :…………………………………………………...........................................

  NIC No. of the Proxyholder :…………………………………………………...........................................

120 Lion Brewery (Ceylon) PLC

CORPORATE INFORMATION
NAME OF COMPANY BANKERS
Lion Brewery (Ceylon) PLC Citibank
(A Carson Cumberbatch Company) Commercial Bank
Deutsche Bank
COMPANY REGISTRATION NUMBER Hatton National Bank
PQ 57 Nations Trust Bank
Standard Chartered Bank
LEGAL FORM Sampath Bank
DFCC Bank
A Public Quoted Company with Limited Liability. National Development Bank
Incorporated in Sri Lanka in 1996.
Official listing of the Colombo Stock Exchange LEGAL ADVISERS
obtained in 1997.
Messrs. F. J. & G. De Saram
SUBSIDIARY COMPANIES 216, De Saram Place
Colombo 10, Sri Lanka
Pearl Springs (Private) Limited Tel : +94 11 4718 200
Millers Brewery Limited Fax : +94 11 4718 220
PARENT AND CONTROLLING ENTITY AUDITORS
Ceylon Beverage Holdings PLC is the immediate Messrs. KPMG
Parent Company of Lion Brewery (Ceylon) PLC. Chartered Accountants
Carson Cumberbatch PLC is the Parent Company No. 32A, Sir Mohamed Macan Markar Mawatha
of Ceylon Beverage Holdings PLC and Bukit Darah Colombo 3, Sri Lanka
PLC is the Ultimate Parent and Controlling Entity of Tel : +94 11 5426 426
Ceylon Beverage Holdings PLC Fax : +94 11 2445 872
DIRECTORS MANAGERS & SECRETARIES
Mr. D. A. Cabraal (Chairman) Carsons Management Services (Private) Limited
Mr. H. Selvanathan (Deputy Chairman) No. 61, Janadhipathi Mawatha
Mr. D. C. R. Gunawardena Colombo 01, Sri Lanka
Mr. K. Selvanathan (Director / Alternate Director to Tel : +94 11 2039 200
H. Selvanathan) Fax : +94 11 2039 300
Mr. D. R. P. Goonetilleke
Mrs. S. J. F. Evans REGISTERED OFFICE
Mr. R. H. Meewakkala (Appointed Chief Executive
Officer w.e.f. 01/07/2021) No. 61, Janadhipathi Mawatha
Mr. S. Selvanathan Colombo 01, Sri Lanka
Mr. S. Clini Tel : +94 11 2039 200
Ms. V. Gun L. L. Fax : +94 11 2039 300
Mr. S. K. Shah (Retired as Chief Executive Officer/
Director w.e.f. 30/06/2021) CORPORATE OFFICE & BREWERY
254, Colombo Road, Biyagama, Sri Lanka
Tel : +94 11 2465 900 (10 Lines)
Fax : +94 11 2465 901

GROUP WEBSITE
www.carsoncumberbatch.com
 Lion Brewery (Ceylon) PLC
P.O. Box 24, No. 61, Janadhipathi Mawatha,
Colombo 01, Sri Lanka.
Tel : +94 11 2039 200 Fax: +94 11 2039 300