Annual Report Colombo Stock Exchange

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Annual Report Colombo Stock Exchange Powered By Docstoc
					Vision
	Tobe among the best manufacturers of
  world-class white goods in Asia Pacific.




Mission
	Toimprove the quality of life by providing
  comforts and conveniences at fair prices.




objectiVes
	To   be the market leader in our product and market segments.

	Provide   our consumers with the best service in the island.

	Provide   our consumers with products of latest technology.

	Develop   our employees to achieve their real potential.

	Provide our shareholders with steady asset growth and
  return on investment above our industry norm.

	Grow  our Revenue and Profits at a rate above the current
  industry norm.




our corporate Values
	CONSUMERS         -               We live up to the expectations of a responsible organisation by contributing to the improvement in
                                    the quality of life of our customers through outstanding products and services.

	EMPLOYEES         -               We respect each other as individuals and encourage cross-functional teamwork while providing
                                    opportunities for career development.

	SHAREHOLDERS                  -   We provide a reasonable return while safeguarding their investment.

	SUPPLIERS     -                   We develop our suppliers to be partners in progress and we share our growth with them.

	COMPETITORS               -       We respect our competitors and recognise their contribution to market value.

	COMMUNITY             -           We conduct our business by conforming to the ethics of our country and share the social
                                    responsibility of the less fortunate.




CONTENTS
Financial Highlights ...1 | Chairman’s Review ...2 | Board of Directors ...6 | Management Team ...8 | Financial Review ...12 |
Corporate Governance ...16 | Audit Committee Report ...24 | Remuneration Committee Report ...25 | Milestones ...26

Financial Reports
Annual Report of the Board of Directors on the Affairs of the Company ...30 | Statement of Directors’ Responsibility ...34 |
Independent Auditors’ Report ...35 | Income Statement ...36 | Balance Sheet ...37 | Statement of Changes in Equity ...38 |
Cash Flow Statement ...39 | Notes to the Financial Statements ...40

Ten Year at a Glance ...55 | Investor Information ...56 | Graphical Review - Investor Information ...58 |
Notice of Annual General Meeting ...59 | Notice of Extraordinary General Meeting ...60 | Forms of Proxy ...Enclosed |
Corporate Information ...Inner Back Cover
FinanCial
highlights




                                                  2009         2008         %
                                               Rs. ’000     Rs. ’000   Change

Revenue                                      1,346,240    1,498,647    (10.17)
Gross Profit                                  158,106      172,614      (8.40)
Profit before Taxation                         75,879       60,222      26.00
Profit for the Year                            47,869       41,253      16.03
Stated Capital                                100,123      100,123        –
Revaluation Reserve                           164,507      164,507        –
Retained Earnings                              74,875       39,079      91.60
Shareholders’ Funds                           339,506      303,710      11.79
Property, Plant & Equipment - Net             323,096      339,489      (4.82)
Investment                                      9,000        9,000        –
Gross Dividends*                               14,487       12,073      20.00
Dividends per Share - Rs.*                        3.00         2.50     20.00
Dividend Payout - %*                            30.26        29.26       3.42
Earnings per Share - Rs.                          9.91         8.54     16.04
Net Assets per Share - Rs.                      70.30        62.89      11.78
Market Value per Share 31st December - Rs.      66.75        43.00      55.23
Net Income to Net Turnover - %                    3.55         2.75     29.09
Return on Average Net Assets - %                14.88        15.13      (1.65)


* Includes authorised Final Dividend
    ChaiRman’s
    Review




2   Regnis (Lanka) PLC   Annual Report 2009
                                       ChAIRMAN’S REVIEw




It has been a year
of extreme stress
and hardship for
our management
                     Dear Shareholders,
team and staff.      the YeaR Past

we have come         A material decline in consumer
                     markets, where early signals were
out of this          witnessed in June 2008, ran its
                     unfortunate course throughout 2009
experience           and even a modicum of recovery

of the worst         was only visible as late as December
                     2009. In retrospect, the recovery we

downturn in          anticipated after an end to a long
                     drawn-out civil war (on May 18th)

post independent     did not materialise immediately
                     as the political instability that
Sri Lanka            prevailed thereafter due to rumours
                     of advancing the upcoming elections
stronger than        (which did happen) further postponed

ever and better      customer decisions for procurement
                     of home appliances and other durable

equipped to face     consumer goods. Appliance market
                     along with motor vehicles were the
competitive          worst affected by a combine of ill
                     effects commencing from the business
challenges in the    downturn, 4 years of continuous

aftermath            double digit inflation, a high interest
                     regime accompanied by fluctuating
                     unpredictable tariffs and tax levies




                        Regnis (Lanka) PLC   Annual Report 2009   3
    ChAIRMAN’S REVIEw




    which led to a debilitating impact          for export markets overseas. we          management team was able to
    on our ability to build infrastructure      learnt many lessons based on the         reduce operating expenses and
    needed for exponential growth and the       buying habits of Indian customers        finance costs substantially, thereby
    basis for real GDP enhancements to          from our recent test market foray        increasing net profit by 16%. Profits
    prevail in line with rates experienced      into South India and our Research        in the 4th quarter represented 54%
    presently by other South Asian              and Development unit will prospect       of total profits for the year and these
    countries. while the current control        this information fruitfully to           are indicators that the country is
    of inflation to single digit and interest   further enhance the quality and          overcoming the economic morass
    rates to realistic commercial levels are    energy efficiency of a range of units,   it was plunged into for well nigh 2
    welcome, an expanding Government            representing both the 'Direct Cool'      years, which caused the premature
    Budget deficit raises concerns over the     and 'Frost Free' market segments.        closure of several small and medium
    stability of the economy in 2010.           we now manufacture and assemble          industries (SMIs) unable to stay alive
                                                washing Machines on a larger scale       without subsidies from the Banking
    the FutuRe                                  and see Regnis (Lanka) PLC as a two-     and Government sectors.
    A statement of post-war economic            product Company of the future rather
    policy is expected to be announced by       than be dependent solely on one          ouR FutuRe gRowth
    the Government as per the upcoming          category for slow growth. Upgrading      Each year our R&D unit launches
    May Budget speech. A sanguine               of capabilities include, but is not      new models based on market research
    business oriented policy will hopefully     restricted to expanding in-house         findings. 2010 will be no exception.
    set the tone for a GDP growth rate of       manufacture of plastic components        we have already introduced a Double
    above 8% from 2011 onwards, as the          for the entire range of white Goods      Door Frost Free model under the 'Sisil'
    time is now ripe to encourage business      on the order book.                       brand, targeted at the trade channel.
    led growth to ‘fuel’ the recovery of the
    economy.                                    oPeRations                               In the 1st quarter, we are now in
                                                A decline in total revenues by           a position to introduce a 220-litre
    YouR ComPanY                                10% is favourable when compared          Double Door 'Singer' brand direct
    we wish to remind our shareholders          with overall decline in imports          cool model. Both models will find
    that your Company remains the               of consumer goods by as much as          consumer acceptance, increasing the
    largest manufacturer of Refrigerators       28%. Our 4th quarter revenues            overall volume of sales units. Regnis
    in Sri Lanka and the 7th largest in         of 29% is the highest for the year       sells its vast model range through
    South Asia. Our current capacity            and is reflective of the ‘pick up’       'Singer Plus', 'Sisil world', 'Singer Mega'
    of 120,000 units from multi-shift           first observed in December 2009.         and Trade Channels of its affiliate
    operations enables us to meet demand        As we rode through stringent             Singer (Sri Lanka) PLC while directly
    at home while eagerly searching             recessive conditions, an experienced     exporting to outer markets of the




4   Regnis (Lanka) PLC   Annual Report 2009
                                                                                                 ChAIRMAN’S REVIEw




region which is less frequent. New       in post independent Sri Lanka stronger
model introductions are to maintain      than ever and better equipped to
the vibrancy associated with changing    face competitive challenges in the
consumer expectations and expand         aftermath. The rich experience gained
market growth year on year.              by our people we assure you, will
                                         suffice as a lasting impact on their
	 A   100% subsidiary, Regnis
                                         future ability to perform.
   Appliances (Pvt) Ltd., was
   incorporated after the Balance
                                         we share our prosperity with our
   Sheet date. This Company will
                                         stakeholders - fellow workers,
   mainly focus on new opportunities
                                         shareholders, suppliers, sub-
   within the white Goods market as
                                         contractors, consumers and the public
   these emerge with the predicted
                                         at large through tax revenues paid by
   economic recovery. An initial
                                         the Company (without default). After
   investment of Rs. 50 mn. will
                                         overcoming this most difficult year we
   result in tax benefits and enhanced
                                         look forward to serving you with the
   production capacity.
                                         high values expected of a respected
	 we   see the realignment of model     Sri Lankan corporate, operating with
   designs as of paramount interest      sustained market leadership as our
   among all the new initiatives.        goal. we look forward to the future
   R&D Department plans to obtain        with confidence and thank you for the
   far reaching changes to enhance       trust reposed on us.
   the outer and inner visibility of
   our entire range, in keeping with     Sincerely,
   International Market aspirations
   and customer trends of current
   times.
                                         Hemaka Amarasuriya
ConClusion                               Chairman
It has been a year of extreme stress
                                         Colombo, Sri Lanka
and hardship for our management
                                         8th March 2010
team and staff. we have come out of
this experience of the worst downturn




                                                                                  Regnis (Lanka) PLC   Annual Report 2009   5
    BoaRD oF
    DiReCtoRs



                                                      1. hemaka amaRasuRiYa
                                                      Chairman & Managing Director
                                                      has been on the Board of Regnis (Lanka)
                                                      PLC from the inception of the Company.

                                                      Senior Vice-President, Singer Asia Ltd.,
                                                      Vice-President of Retail holdings N.V.,
                                                      Chairman & Managing Director of
                                                      Singer (Sri Lanka) PLC, Singer Industries
                                                      (Ceylon) PLC, Singer Finance (Lanka) Ltd.,
                                                      Reality Lanka Ltd. and Regnis Appliances
                                                      (Pvt) Ltd. Director, National Development
                                                      Bank PLC, NDB Capital Ltd., Bangladesh,
                                              1   2   Bata Shoe Company of Ceylon Ltd., Bata
                                                      Exports (Pvt) Ltd., Equity Investment
                                                      Lanka Ltd., TNL Radio Network (Pvt)
                                                      Ltd., Singer Asia Sourcing Ltd. and
                                                      Tarmac Investments (Pvt) Ltd.

                                                      Founder President of the Industrial
                                                      Association of Sri Lanka. Currently
                                                      Chairman of Regional Industrial Service
                                                      Committee (RISC), Southern Province.
                                                      Former Chairman of Employers'
                                                      Federation of Ceylon. Served on the
                                                      Presidential Task Force on Science &
                                                      Technology and on the Securities &
                                                      Exchange Commission and Advisory
                                                      Committee on Company Law at
                                              3   4   different times.

                                                      Fellow of The Institute of Chartered
                                                      Accountants of Sri Lanka. Fellow of
                                                      the Chartered Institute of Management
                                                      Accountants - UK. Fellow of the
                                                      Chartered Institute of Marketing - UK.
                                                      Diploma in Marketing Management &
                                                      Strategy from New York University, USA.

                                                      2. DR. gamini C B wijeYesinghe
                                                      Director
                                                      Joined the Board of Regnis (Lanka) PLC
                                                      on 13th February 1995.

                                              5   6   Director of Singer (Sri Lanka) PLC,
                                                      Singer Industries (Ceylon) PLC, Singer



6   Regnis (Lanka) PLC   Annual Report 2009
                                                                                                          BOARD OF DIRECTORS




Finance (Lanka) Ltd., NDB Venture           a multi-brand retailer of electrical        General Manager of Factories of the
Investments (Pvt) Ltd., Ayojana Fund        appliances and furniture with               Singer Group, Sri Lanka and
(Pvt) Ltd., Central Finance Co. PLC, NDB    operations in 16 African countries and      a Committee Member, The Industrial
Bank PLC, Fintravels Ltd. and Ceylon        Australia (including SINGER® brand          Association of Sri Lanka.
Trading Co. Ltd.                            electrical appliances under license).
                                                                                        holds a B.Sc. Degree (hons.) in Production/
                                            Mr. walker serves on the Board of a
Is a Fulbright Scholar - attended Ohio                                                  Mechanical Engineering from University
                                            number of Singer Asia Subsidiaries.
State University, USA, Graduate School                                                  of Peradeniya. MBA from the University
of Management. A Past President of                                                      of Southern Queensland, Australia. A
                                            4. DR. saman kelegama
The Institute of Chartered Accountants                                                  Chartered Engineer and a Member of the
                                            Director
of Sri Lanka and Organisation of                                                        Institute of Engineers, Sri Lanka.
Professional Association of Sri Lanka.      Joined the Board of Regnis (Lanka) PLC
                                            on 21st August 2008.                        6. asoka PieRis
Former - Council Member of the
                                            Director of Singer (Sri Lanka) PLC,         Alternate Director
Commonwealth Association of
Corporate Governance, Member of             Singer Finance (Lanka) Ltd. and             Joined the Board of Regnis (Lanka) PLC
the External Audit Committee of the         Sampath Bank PLC.                           as Alternate Director on 10th
International Monetary Fund and                                                         April 2003.
                                            Executive Director, Institute of Policy
KPMG - Asia Pacific Board and FAPA
                                            Studies of Sri Lanka, Fellow, National
(UK) (retired).

Is a Fellow of The Institute of Chartered
Accountants of Sri Lanka and a Fellow
of the Institute of Certified Management
Accountants of Sri Lanka.

has been conferred a Doctorate (honoris
Causa) by the Postgraduate Institute of     Academy of
Management affiliated to the University     Sciences in Sri Lanka, former
of Sri Jayewardenepura.                     President of Sri Lanka Economic
                                            Association and Author of several
3. gavin j walkeR                                                                       Vice President -
                                            publications on the economy of Sri Lanka.
Director                                                                                Finance and Chief
                                            D.Phil. (Economics), Oxford University,     Financial Officer of
Joined the Board of Regnis (Lanka) PLC
                                            UK.                                         Singer Asia Ltd. Director of Singer (Sri
on 1st November 2005.
                                                                                        Lanka) PLC, Singer Finance (Lanka) Ltd.,
Mr. walker is the President and Chief       5. viDYa viDYaRatne                         Reality Lanka Ltd., Singer Corporation
Executive Officer of Singer Asia Ltd. and   Director                                    Ltd., Btindia Ltd., Brand Trading (India)
was appointed to his present position                                                   Pvt. Ltd. and Alternate Director of Singer
                                            has been on the Board of Regnis (Lanka)
in August 2005. Prior to joining the                                                    Industries (Ceylon) PLC and Controller of
                                            PLC from the inception of the Company.
Company, Mr. walker held offices as                                                     Retail holdings N.V.
Managing Director and Chief Executive       Director of Regnis Appliances (Pvt)
                                                                                        Associate Member of The Institute of
Officer of public quoted and private        Ltd. and Reality Lanka Ltd. Alternate
                                                                                        Chartered Accountants of Sri Lanka.
companies in the United Kingdom and         Director of Singer (Sri Lanka) PLC and
                                                                                        Fellow Member of the Chartered Institute
South Africa. Mr. walker, served as         Singer Industries (Ceylon) PLC.
                                                                                        of Management Accountants - UK.
Chief Executive Officer of Profum Ltd.,



                                                                                           Regnis (Lanka) PLC   Annual Report 2009    7
    management
    team




                                              1   2   3




                                              4   5   6




                                              7   8   9



8   Regnis (Lanka) PLC   Annual Report 2009
                              MANAGEMENT TEAM




          1.    Vidya Vidyaratne
          2.    Kelum Kospelawatte
          3.    Mohamed Irzan
          4.    Gamini Perera
          5.    Chaminda Ramasundara
          6.    Chandana wijesundara
          7.    Manesh Ranasinghe
          8.    Prasad Soysa
          9.    Jagath Jayasundera
          10. Apoorva Amarasinghe
10   11
          11. Damitha wickramasinghe
          12. Pradeep Kumara
          13. Savithri Fernando
          14. Aruna Sri Kendasinghe




12   13




14


               Regnis (Lanka) PLC   Annual Report 2009   9
enhanCe
leisuRe
The new washing machine from Regnis helps you ‘single task’: like watching your
favourite TV programme, while it takes the stains out of life.
     FinanCial
     Review



     Please refer to the Charts on              management programmes during the          tax liability for the year, as per the
     page 13 in conjunction with the            year under review. The Company was        restriction imposed by the Inland
     following discussion                       able to pass on part of the savings       Revenue Act.
                                                to its consumers while increasing its
     Revenue                                    Gross Profit margins. This resulted in    net PRoFit FoR the YeaR
     Revenue for the year decreased from        improved performance quarter over         Net Profit recorded an increase of
     Rs. 1,498 mn to Rs. 1,346 mn - as a        quarter since the 2nd quarter             16% to Rs. 47.9 mn.
     percentage, a decrease of 10% over         of 2009.
     the previous year. The refrigerator                                                  RetuRn on equitY
     category, which is the main product        FinanCe Cost                              Return on Equity of the Company
     category of the Company, reported a        Finance Cost decreased by 24.4% over      was 14.9% compared with 15.1% in
     revenue decline of 6.3% over the prior     prior year to Rs. 66.7 mn. The decrease   the previous year. Return on equity
     year. This was due to the decline in       was due to lower market interest          has been computed by comparing the
     the refrigerator and washing machine       rates along with lower borrowings         profit for the year and average total
     market in Sri Lanka starting from the      compared to the prior year.               equity as at Balance Sheet dates.
     2nd quarter of 2008. The Company
     was able to reverse this trend from        PRoFit BeFoRe taxation                    eaRnings PeR shaRe
     the 3rd quarter of 2009. The 3rd           The focus on operational efficiency       Earnings per Share (EPS) in the period
     quarter revenue of Rs. 351.3 mn and        enabled the Company to exceed             under review was Rs. 9.91 Vs Rs.
     4th quarter revenue of Rs. 384.7 mn,       the earnings guidance for the year,       8.54 in 2008. This represents a 16%
     were up 12% and 6% respectively,           despite the decrease in top-line. The     increase in both profit for the year
     compared to the prior year periods.        Company reported a Profit Before          and earnings per share.
                                                Tax of Rs. 75.9 mn for the year - an
     gRoss PRoFit                               increase of 26% over the prior year.      DiviDenD
     when compared with the previous                                                      The Board of Directors authorised a
     financial year, the Company reported       inCome tax                                first and final Dividend of Rs. 3.00 per
     a decline in Gross Profits. Gross Profit   Income Tax charge for the year was        share for the financial year ended
     for the year was Rs. 158.1 mn as           Rs. 28 mn as against Rs. 19 mn in the     31st December 2009 at the Board
     against Rs. 172.6 mn in the previous       previous year.                            Meeting held on 8th March 2010
     year - a decrease of Rs. 14.5 mn,                                                    against the previous year’s Rs. 2.50 per
     due to lower turnover compared to          The Company is liable for Income          share for payment on 24th March 2010.
     the prior year. The Company was            Tax at 35% and Social Responsibility      The authorised dividend is not adjusted
     able to gradually increase the Gross       Tax of 1.5% on Income Tax. Brought        in the financial statement as per the
     Profit margin to 11.7% from the            forward tax losses have been claimed      disclosure standards.
     previous year’s 11.5%, by successfully     up to 35% of the current year
     implementing several cost                  statutory income in computing the



12   Regnis (Lanka) PLC   Annual Report 2009
                                                                                                      FINANCIAL REVIEw




total assets                            total equitY                               points, from 129% as at year end 2008
Total Assets of the Company             Total Equity of the Company increased      to 97% as at year end 2009.
increased by 3.4%, from Rs. 825.5 mn    by Rs. 35.8 mn or 11.7% over year end
as at year end 2008 to Rs. 853.4 mn     2008, stands at Rs. 339.5 mn on 31st       Gearing level has been computed by
as at year end 2009, an increase of     December 2009. The equity increased        comparing the Interest-Bearing Loans
Rs. 27.9 mn.                            because of the profit of Rs. 47.9 mn for   and Borrowings and Equity as at
                                        the year and offset by the payment of      Balance Sheet date.
inteRest-BeaRing loans anD              dividend amounting to Rs. 12.1 mn for
BoRRowings                                                                         aCCounting PoliCies
                                        the financial year 2008.
The Company was able to reduce its                                                 Financial statements for the year
Interest Bearing Loans and Borrowings   CaPital stRuCtuRe                          2009 represent the financial
by 16.3%. Total borrowings decreased    Company Capital Structure improved         performance of Regnis (Lanka) PLC.
from Rs. 392.2 mn in December 2008      with the increase in equity component
to Rs. 328.3 mn as at 31st December     and significant reduction in borrowings.   Financial statements contained in this
2009, a decrease of Rs. 63.9 mn. Net    During the year, Company was able          Report are prepared in accordance
Cash flow from Operating Activities     to convert Rs. 60 mn of its short-term     with the Sri Lanka Accounting
for the year ended December 2009 was    money market loans to long-term.           Standards, the requirements of
Rs. 76.8 mn - a significant increase                                               Colombo Stock Exchange and the
which helped the Company to reduce      Company's Gearing level has reduced        Companies Act No. 7 of 2007.
its borrowings.                         by approximately 32 percentage



                                                                                     Regnis (Lanka) PLC   Annual Report 2009   13
gRow
knowleDge
The new washing machine from Regnis helps you expand your mind while it shrinks
those difficult stains.
     CoRPoRate
     goveRnanCe



     goveRnanCe PoliCY                         integrity and accountability to          framework of policies and controls
     It has taken a world catastrophe to       stakeholders are top of mind factors     that provide for effective risk
     reinforce what the world of business      we inculcate across all - from the       assessment and management. The
     and commerce knew all along - that        Board to the factory-floor.              Board provides leadership and
     well founded corporate governance                                                  articulates the Company’s objectives
     was crucial to enterprise.                Business ethiCs                          and strategy for achieving those
                                               The Company enshrines the highest        objectives.
     If the collapse of the US sub-prime       ethical standards in the conduct of
     mortgage market and the resultant         its business affairs and its Board of    BoaRD ComPosition
     mayhem that hit world economies,          Directors is tasked with ensuring that   The Board comprises 5 Directors
     companies, banks and ultimately the       the resultant regime of exemplary        including the Chairman and the 2
     man-on-the-street brought home one        governance across all aspects of         Independent Non-Executive Directors.
     lesson, it was that strict adherence to   business is in the best interests of
     responsible corporate governance and      stakeholders and best serve the          BoaRD inDePenDenCe

     risk management practices were an         protection of the environment.           None of the Independent Directors
     imperative, to all forms of business                                               has held executive responsibilities
     enterprise.                               Ethically correct conduct, integrity,    in their capacity as Independent
                                               honesty, fair play and loyalty are       Director and have submitted
     Regnis (Lanka) accepts the universally    qualities that must pervade all the      a declaration confirming their
     held view that successfully run           Company’s actions.                       independence in accordance with
     business enterprises are founded                                                   Section 7.10 of the CSE Listing
     on a sustainability derived from          Transparency is encouraged in all        Regulations on Corporate Governance
     a set of fundamental qualities.           public disclosures, as well as in the    as at 31st December 2009. The Non-
     Thus, the Company has embedded            way business and communication           Executive Directors do not have
     transparency, accountability and          take place with all stakeholders.        any business interest that could
     responsibility within the core of its                                              materially interfere with the exercise
     business operations.                      BoaRD oF DiReCtoRs                       of their independent judgement.
                                               The Board endeavours to exercise         The Board Members are permitted
     Translated into action, the Company’s     effective control over the Company       to obtain independent professional
     strong core qualities and guiding         by formulating and implementing          advice from a third party including
     corporate governance functions            policies and ensuring their effective    the Company’s External Auditors
     ensure that we remain ‘law abiding’,      implementation. It is responsible        when necessary.
     strictly adhering to the laws and         for the governance of the Company
     regulations of the country. Business      on behalf of shareholders, within a




16   Regnis (Lanka) PLC   Annual Report 2009
                                                                                                 CORPORATE GOVERNANCE




BoaRD meetings anD CiRCulaR Resolutions                                              BoaRD ResPonsiBilitY
Number of Board Meetings held - 3                                                    Directors dedicate themselves to the
Number of Circular Resolutions Passed - 9.                                           affairs of the Company by attending
                                                                                     Board and Board Sub-Committee
BoaRD meetings anD attenDanCe                                                        meetings and making decisions by
                                                         Meetings    Attendance      circular resolution. In advance of
Mr. hemaka Devapriya Senerath Amarasuriya                       3               3    every Board meeting, each Director
Dr. Gamini Christopher Bernard wijeyesinghe                     3               3    receives a comprehensive set of
Dr. Saman Kelegama                                              3               3    Board papers and any additional
Mr. Vidyaratne Ganithaguruge Kulatunga Vidyaratne               3               3    information requested by members. It
Mr. hiran Asoka Pieris                                                               is the Chairman’s duty to ensure that
 (Alternate to Mr. Gavin John walker)                           3               3*   all members are properly briefed.

* via teleconference
                                                                                     The Board makes every endeavour
                                                                                     to ensure a balanced and objective
Division oF ResPonsiBilities             performance and risk. The Chairman
Between ChaiRman anD                                                                 assessment of the Company’s
                                         ensures that good governance is
managing DiReCtoR                                                                    position, performance and prospects.
                                         practiced throughout the entire
The functions of the Chairman and                                                    These are discussed in detail in the
                                         organisation; that there is a balance
Managing Director are vested in the                                                  Chairman’s Review on pages 2 to 5,
                                         of power on the Board and that
same person. The Company believes                                                    the Financial Review on pages 12 and
                                         both Executive and Non-Executive
that the dual role played by the                                                     13, Audit Committee Report on page
                                         Directors have opportunities for
Chairman/Managing Director does                                                      24, the Remuneration Committee
                                         effective participation. he also
not compromise the principles of                                                     Report on page 25 and the Annual
                                         ensures that the Board has full
good corporate governance. This is                                                   Report of the Board of Directors on
                                         knowledge of the Company’s affairs
further assured by the significant                                                   the Affairs of the Company on pages
                                         and is in complete control of these
presence of Non-Executive and                                                        30 to 33.
                                         affairs. The Chairman also facilitates
Independent Directors on the Board.
                                         effective communication with all of
These Directors provide a mechanism                                                  The Company is served adequately
                                         the Company’s stakeholders.
for critically reviewing all aspects                                                 in terms of a sufficient number
of the Company’s operations. They                                                    of Board members who possess
                                         whilst the functions of Chairman and
ensure that no single individual has                                                 financial, marketing and industrial
                                         Managing Director are vested in a
unfettered powers of decision-making                                                 qualifications and experience.
                                         single person, operational decisions
and bring independent judgement
                                         are taken by senior and key managers.
to bear on issues of strategy,




                                                                                        Regnis (Lanka) PLC   Annual Report 2009   17
     CORPORATE GOVERNANCE




     stRategiC Planning anD                     autonomy and freedom to translate        BoaRD suB-Committees
     imPlementation                             these objectives to goals that are       audit Committee
     The Board is responsible for the           achievable.                              The Audit Committee is empowered
     entire strategic planning process                                                   to review and monitor the financial
     of the Company. This includes the          exeCutive management                     reporting process of the Company so
     responsibility for the formulation         while the Board of Directors is          as to provide additional assurance on
     of the strategic vision and                ultimately responsible for the           the reliability of financial statements
     mission of the Company, setting            operations and financial soundness       through a process of independent and
     the overall Corporate Policy and           of the Company, the day-to-day           objective review. As such, the Audit
     Strategy, monitoring performance           management of the Company is             Committee acts as an effective forum
     and reviewing risks and major              entrusted to the Chairman/Managing       in assisting the Board of Directors
     investments. The Board also takes on       Director and through him to the key      in discharging their responsibilities
     the added responsibility of directing      and senior managers of the Company.      on ensuring the quality of financial
     Company performance towards                There is extensive staff participation   reporting and related communication
     achieving the best results possible        in decision-making at all levels,        to the shareholders and the public.
     and increasing shareholder value.          with strategic recommendations on
                                                material matters flowing to the Board    The Audit Committee comprised
     The Board sets the broad parameters of     for final decision.                      2 Non-Executive Directors of the
     the Company’s business. The Company’s                                               Board. The Chief Financial Officer/
     management team is then tasked with        The Company holds two annual forums      Compliance Officer, head of Risk
     their application, in achieving specific   specifically designed to promote         Management of Singer, Audit Staff of
     targets and objectives.                    free and frank interaction between       Singer, Representatives of External
                                                management staff and the Board.          Auditors and when necessary
     The Company’s Annual Budget                These are the Annual Management          Chairman/Managing Director and
     addresses the requirements of the          Conference, held towards the end of      relevant operations managers attend
     Company. This ensures that the             the year, and the Mid-Year Review.       the meetings by invitation. The head
     entire Company follows the set                                                      of Risk Management functions as the
     plans and objectives as articulated        Role oF the ComPanY                      Secretary to the Committee.
     in the Annual Budget. These in turn,       seCRetaRY

     become the primary objectives of the       The Company Secretary ensures that
                                                                                         The Audit Committee’s authority,
     Management team, and are shared            all Board Terms of Reference are
                                                                                         responsibilities and specific duties
     with divisional heads and heads of all     followed and applicable rules and
                                                                                         have been formalised through an
     SBUs. The Management team and the          regulations are adhered to.
                                                                                         Audit Committee Charter. By this,
     heads of divisions and SBUs have the                                                the Audit Committee is empowered,




18   Regnis (Lanka) PLC   Annual Report 2009
                                                                                               CORPORATE GOVERNANCE




among the other duties, to examine       by providing the relevant information     provide reasonable but not absolute
any matters relating to the financial    and participating in its analysis and     assurance that the assets of the
affairs of the Company and to review     deliberations.                            Company are safeguarded.
the adequacy of the internal control
procedures, coverage of internal         The scope of the Committee is to          The Company employs personnel across
and external audit programmes,           ‘look into the fees, remuneration and     different levels of operation to apply
disclosure of Accounting Policies        perquisites of the Chief Executive        these internal controls, while the Group
and compliance with Statutory and        Officer, Independent Directors and the    Internal Audit Department reviews the
Corporate Governance requirements.       Executive Directors of the Board of the   effectiveness of such controls.
                                         Company including alternate Directors
The Committee held 4 meetings            and to approve recommendations            The Company’s operations are also
during the year in review, to discuss    made by the Chief Executive Officer       subject to review by the Corporate
the Final Accounts and the Quarterly     and Corporate Office of Singer Asia       Internal Audit Division of Retail
Financial Statements, whilst a further   Limited’. Singer Asia Ltd., is the        holdings NV, the Ultimate Parent
3 meetings were held to discuss          Intermediate Parent of the Company.       Company of Regnis (Lanka) PLC.
the reports of the Internal and
External Auditors.                       The Committee also reviewed               investoR Relations
                                         the policies pertaining to the            The role played and the inputs made
The detailed Report of the Audit         remuneration and perquisites of the       by our shareholders are a vital factor,
Committee is discussed in the Audit      Executives of the Company.                valued highly by the Board in its
Committee Report on page 24.                                                       quest to implement proper corporate
                                         The Remuneration of the Directors         governance.
RemuneRation Committee                   is disclosed on page 44 of this Report
The Remuneration Committee               and the detailed Remuneration             It is the policy of the Board of
consists of 2 independent Directors      Committee Report is disclosed on          Directors that shareholders should
and the Chairman/Managing Director       page 25.                                  have equal access to information. The
of the Company. Finance Director of                                                Board has adopted a policy of free
Singer (Sri Lanka) PLC participates by   inteRnal ContRol                          disclosure of all material information
invitation. The Committee is chaired     The Company’s Directors are               on the Company to its shareholders.
by an Independent Director. The          responsible for instituting a system
Chairman/Managing Director and           of internal controls to ensure the        The Company also welcomes the
Finance Director of Singer               effective implementation of all           active participation of shareholders
(Sri Lanka) PLC assist the Committee     policies and decisions of the Board.      at Annual General Meetings and has
                                         This framework is designed to             solicited their views at all times,
                                                                                   promoting healthy dialogue.




                                                                                      Regnis (Lanka) PLC   Annual Report 2009   19
     CORPORATE GOVERNANCE




     whenever possible, the Company            Senior Management. Any Director        The Company’s compliance with
     has also implemented shareholders’        may obtain such information from       Section 7.10 of the Colombo Stock
     suggestions. Through the quarterly        the Company’s Finance Division.        Exchange Listing Rules on Corporate
     and annual publications of financial                                             Governance and details of such
     statements, meetings and other forms      The timely publication of quarterly    compliance are discussed on page 21
     of communication, the Board and the       and annual financial statements,       of this Report.
     Company’s management constantly           with comprehensive details beyond
     interact with the shareholders of the     the statutory requirements, has been   ResPonsiBilitY to CustomeRs
     Company.                                  a salient feature of our financial     Products sold by the Company are of
                                               reporting system. The financial        the highest quality and are rigorously
     FinanCial RePoRting anD                   statements included in this Annual     tested prior to introduction. The
     tRansPaRenCY
                                               Report have been audited by Messrs     Company extends a warranty on its
     Financial statements are prepared         KPMG Ford, Rhodes, Thornton & Co.,     products. Customer grievances, if any,
     and presented under generally-            Chartered Accountants.                 are handled promptly and solutions
     accepted accounting principles and                                               provided.
     in accordance with the Sri Lanka          ComPlianCe with law
     Accounting Standards of The Institute     The Company has established            The following table presents the
     of Chartered Accountants of Sri           procedures to ensure compliance        details of the Company’s compliance
     Lanka. Financial data is circulated as    with all applicable statutory and      with the Section 7.10 of the CSE
     appropriate within and outside the        regulatory requirements. The Chief     Listing Rules - June 2009, on
     organisation.                             Financial Officer of the Company       Corporate Governance as at
                                               acts as the compliance officer and     31st December 2009.
     Management accounts and product           is responsible for ensuring proper
     profitability statements are              compliance with applicable laws and
     distributed monthly to all key and        regulations.




20   Regnis (Lanka) PLC   Annual Report 2009
                                                                                                      CORPORATE GOVERNANCE




Rule No.      Corporate Governance Rule                                       Details of Compliance

              Board of Directors
7.10.1        Number of Non-Executive Directors - One-third of the total      The Board of Directors comprise of
              number of Directors, subject to a minimum of two.               five Directors, two of whom are Non-Executive
                                                                              Directors.
7.10.2        Number of Independent Directors - One-third of                  The two Non-Executive Directors are
              Non-Executive Directors, subject to a minimum of two.           independent.
7.10.3        Disclosure Relating to Directors’ Independence.                 The two Non-Executive Directors have submitted
                                                                              a declaration confirming their independence.
7.10.5        Remuneration Committee
7.10.5 (a)    Number of Independent Non-Executive Directors in the            The Committee comprises of three Directors,
              Committee to be:                                                two of whom are Independent Non-Executive
              	a   minimum of two (where a company has only two              Directors.
              	 Directors on the Board); or
                in
              	 all other instances majority of whom to be independent.
              Separate Committee to be formed for the Company or the listed   Separate Committee was formed.
              Parent’s Remuneration Committee to be used.

              Chairman of the Committee to be a Non-Executive Director.       The Board of Directors has appointed a
                                                                              Non-Executive Director as the Chairman of
                                                                              the Committee.
7.10.5. (b)   Function of the Committee                                       Remuneration Committee Report sets out the
                                                                              functions of the Committee.
7.10.6        Audit Committee

7.10.6. (a)   Number of Independent Non-Executive Directors in the            The Committee comprises of two Directors,
              Committee to be:                                                both of whom are Independent Non-Executive
              	a   minimum of two (where a company has only two              Directors.
              	 Directors on the Board); or
                in
              	 all other instances majority of whom to be independent.
              Separate Committee to be formed for the Company or the listed   Separate Committee was formed.
              Parent’s Committee to be used.
              Chairman of the Committee to be a Non-Executive Director.       The Board of Directors has appointed a
                                                                              Non-Executive Director as the Chairman of
                                                                              the Committee.
              Chairman or one member of the Committee to be a member          The Chairman of the Committee is a member
              of a recognised professional accounting body.                   of a recognised professional accounting body.
              CEO and CFO to attend Committee meetings, unless otherwise      CEO and CFO attend by invitation.
              determined by the Audit Committee.
7.10.6. (b)   Functions of the Committee.                                     Audit Committee Report sets out the functions
                                                                              of the Committee.


                                                                                           Regnis (Lanka) PLC   Annual Report 2009   21
ChilD’s
PlaY
Machines that make ‘child’s play’ out of life’s stains and creates more time for high
quality ‘child play’.
     auDit
     Committee
     RePoRt


     PReamBle                                     relating to the financial affairs of the    meetings oF the Committee
     The Committee is empowered to review         Company and to review the adequacy          During the year, seven Audit Committee
     and monitor the financial reporting          of the internal control procedures,         meetings were held to discuss the
     process of the Company so as to provide      coverage of internal and external audit     reports of the Internal and External
     additional assurance on the reliability of   programmes, disclosure of Accounting        Auditors and Quarterly Accounts. The
     financial statements through a process       Policies and compliance with                Final Accounts were also discussed
     of independent and objective review.         Statutory and Corporate Governance          at the meeting held on 24th February
     As such, the Audit Committee acts as         requirements.                               2010. The Minutes of the meetings were
     an effective forum in assisting the                                                      tabled at the Board of Directors for
     Board of Directors in discharging their      The Committee also provides a forum         information and necessary action.
     responsibilities on ensuring the quality     for the impartial review of the reports
     of financial reporting and related           of internal and external audits and to      exteRnal auDitoRs
     communication to the shareholders and        take into consideration findings and        The Audit Committee recommended
     the public.                                  recommendations stated therein related      to the Board of Directors that Messrs
                                                  to significant business risks and control   KPMG Ford, Rhodes, Thornton & Co.,
     ComPosition oF the Committee                 issues.                                     Chartered Accountants be reappointed
     As at year-end, the Audit Committee                                                      as the External Auditors for the year
     comprised two Non-Executive Directors of     The Audit Committee reviews significant     ending 31st December 2010, subject to
     the Board namely Dr. G C B wijeyesinghe      business risks and internal control         the approval of the shareholders at the
     and Dr. Saman Kelegama. The Chief            issues and suggests where necessary         Annual General Meeting.
     Financial Officer/Compliance Officer,        appropriate remedial measures.
     head of Risk Management of Singer,                                                       (Sgd.)
     Audit Staff of Singer, Representatives of    The Committee along with the Board,         Dr. G C B Wijeyesinghe
     External Auditors and when necessary         Internal Audit and External Audit review    Chairman - Audit Committee
     Chairman/Managing Director and               the Quarterly Financial Results to ensure
     relevant operations managers attend the      compliance with mandatory statutory         Colombo
     meetings by invitation. The head of Risk     and other regulatory requirements laid      8th March 2010
     Management functions as the Secretary to     down by the authorities.
     the Committee.
                                                  The Compliance Officer monitors
     ResPonsiBilities anD Duties oF
                                                  the Company’s compliance with the
     the Committee
                                                  applicable laws and regulations,
     The Audit Committee’s authority,
                                                  including any internal policy Codes of
     responsibilities and specific duties
                                                  Conduct of its employees.
     have been formalised through an
     Audit Committee Charter. By this, the
     Audit Committee is empowered among
     other things to examine any matters




24   Regnis (Lanka) PLC   Annual Report 2009
RemuneRation
Committee
RePoRt



The Remuneration Committee                A primary objective of compensation
consists of the two Non-Executive         packages is to attract and retain a
Directors and the Chairman and            highly qualified and experienced
Managing Director of the Company.         workforce, and reward performances.
Finance Director of Singer (Sri Lanka)    These compensation packages should
PLC participate by invitation. The        provide compensation appropriate for
Committee is Chaired by a Non-            each business within the Company
Executive Director. The Chairman and      and commensurate with each
the Managing Director and Finance         employee’s level of experience and
Director of Singer (Sri Lanka) PLC        contribution, bearing in mind the
assist the Committee by providing the     business performance and long-term
relevant information and participating    shareholder returns.
in its analysis and deliberations.
                                          The Committee meets from time to
The scope of the Committee is to          time and reviews the Company’s
“look into fees, remuneration and         remuneration and fee structures
perquisites of Chief Executive            to assure alignment with strategic
Officer, Independent Directors            priorities and with compensation
and the Executive Directors of the        offered by comparative companies.
Board of the Company including
alternate Directors and approve           I wish to thank the other member of
recommendations made by the Chief         the Committee, Dr. Saman Kelegama.
Executive Officer and Corporate
Office of Singer Asia Ltd.” Singer Asia
Ltd., is the Intermediate Parent of       (Sgd.)
the Company.                              Dr. G C B Wijeyesinghe
                                          Chairman - Remuneration Committee
The Committee also reviews                Colombo
the policies pertaining to the            8th March 2010
remuneration and perquisites of the
Executives of the Company.




                                                                                 Regnis (Lanka) PLC   Annual Report 2009   25
     milestones




     1987
     Incorporated as a limited liability
     company with an issued Share Capital
                                                       1989
     of 10 mn Rupees. Public share issue
                                                       Two models of Gas Cookers two-burner with and
     attracts 1,200 investors. Most of them
                                                       without grill come off the production line.
     owning less than 500 shares.
                                                       Manufacture of Ceiling Fans begins.

                                  1991
                                  February - Production of Coca Cola Bottle Cooler.
                                  June - Single-Burner Gas Cooker was launched.
                                  August - Singer Bottle Cooler was launched.
                                  A new building with a floor area of 21,600 sq. ft. commissioned to cater to increasing demand.

     1995
     A Double-door 8 cu. ft. Refrigerator and a 325 ltr. Chest Freezer were added to the product range.
     A pioneering venture begins - the assembly of washing Machines begins with a 2.5 kg semi-automatic model.

                  1997
                  Refrigerators with CFC-free refrigerants are introduced to the market, ten years
                  ahead of schedule to phase out CFCs.

                                  1999
                                  Sri Lanka Standards Institution awards ISO 9002 Certification.
                                  CFC Project was completed. All refrigerators are free of the ozone depleting substances in both
                                  refrigerant and the insulation foam.
                                  Assembly of whirlpool 5 kg Semi-Automatic washing Machine began.
                                  Bottle Coolers were produced for Nestlé Lanka Ltd.

     2001
     Successful completion of 3-Zero programme aimed at cost reduction and waste elimination.
                                                                                                         2003
     Manufacture of Sisil range of refrigerators began.                                                  Commenced commercial production
     Introduction of RGS 35 model to the Singer range of refrigerators.                                  of no-frost refrigerator.
     Took part in ‘Cool Tech 2001’ Exhibition in Mumbai.                                                 Exported Deep Freezers to India.
                                                                                                         Purchased land to set-up an
                                                                                                         Injection Moulding facility.
                                  2005
                                  Expansion of the factory production line.

     2007
     A new product - the Chest Type Cooler - was developed and released to the market for use by milk distribution centres.


     2008
     Developed a 220 ltr. Freezer
     cum Bottle Cooler.
                                               2009
                                               Set-up an assembly line to assemble washing Machines and SKD Refrigerators from whirlpool.
                                               Developed a new Pseudo Refrigerator and a 240 ltr. No-frost Refrigerator for Sisil.




26   Regnis (Lanka) PLC   Annual Report 2009
                                                                                                                       MILESTONES




                                                                                                                             1988
                                                                                 Commercial production begins with two models of
                                                                                                        Single-Door Refrigerator.
                                                                                  1990
                                                Double-Door Refrigerator was introduced.
A Rights Issue (one new share for every one held) increases the Share Capital to Rs. 20 mn.
                                                                                                                             1992
                                                                                              R & D Division produced a Prototype
                                                                             1994              Solar Powered Vaccine Refrigerator
                                                225 ltr. Chest Freezer was introduced.            exhibited at Expo ’92 Trade Fair.
                                 Production of Bottle Coolers for Elephant house and
                         Ole Springs Bottlers (Pvt) Ltd., Bottlers of Pepsi commenced.

                                                                                                                             1996
                                            Chest Freezer range expanded with a 425 ltr. model. Successfully completed first phase
                                                                     of producing Refrigerators using environmental-friendly gas.
                                      A Rights Issue (one new share for every two held) increased the Share Capital to Rs. 27.1 mn.
                                                       Launch of ‘Pipena Mala’ - A unique concept design to improve productivity.


                                                                                                                   2000
                                                                     New building was constructed. washing Machine
                                                               assembly was shifted to the new building. Refrigerators
                                                              and Freezer production lines were re-laid to obtain more
                                                                                productivity and increased efficiency.

                                                                                                                             2004
                                                                                      New building was constructed and in-house
                                                                                   manufacture of plastic components commenced.
                                                                                               Bonus issue of shares on the basis of
                                                                                                      1 new share for every 3 held.

                                                                                                                             2006
                                                                                                              Two new Refrigerator
                                                                                                            models were introduced
                                                                                                          incorporating Nano Silver
                                                                                                                        technology.
                                                                                                                  650-ton Injection
                                                                                                             Moulding Machine was
                                                                                                               installed to produce
                                                                                                               plastic components.




                                                                                              Regnis (Lanka) PLC    Annual Report 2009   27
FINANCIAL
REPORTS
INTERIm QuARTERLy REPORTS 2009
31st March 2009                29th May 2009
30th June 2009               13th August 2009
30th September 2009       11th November 2009
31st December 2009         25th February 2010

mEETINgS
Twenty-Second Annual General Meeting 31st March 2009
Twenty-Third Annual General Meeting  31st March 2010

DIvIDEND
Final Dividend Payable                   24th March 2010




CONTENTS
Annual Report of the Board of Directors on the
  Affairs of the Company                         30
Statement of Directors' Responsibility           34
Independent Auditors' Report                     35
Income Statement                                 36
Balance Sheet                                    37
Statement of Changes in Equity                   38
Cash Flow Statement                              39
Notes to the Financial Statements                40
     ANNuAL REPORT OF ThE
     bOARD OF DIRECTORS ON ThE
     AFFAIRS OF ThE COmPANy
     Directors have pleasure in presenting      PROPERTy, PLANT & EQuIPmENT                            the carrying amount of the freehold
     to Members their Report together           During the year under review,                          land. The most recent revaluation
     with the audited financial statement       the Company invested a sum of                          was carried-out as at 11th September
     of the Company for the year ended          Rs. 2,460,354/- (2008 - Rs. 5,037,710/-)               2008. The details of the revaluation
     31st December 2009.                        in property, plant & equipment.                        are given in Note 11.5 to the financial
                                                The total investment was made                          statements on page 47 in this report.
     REvIEw OF ThE yEAR                         to purchase tools, dies and gauges
     Chairman’s Review on pages 2 to            required for manufacture.                              INvESTmENTS

     5 describes the Company’s affairs                                                                 Details of the long-term Investments
     and mentions important events that         Information relating to movement                       held by the Company are given in
     occurred during the year, and up to        in property, plant & equipment                         Note 12 to the financial statements
     the date of this report. The Financial     is disclosed under Note 11 to the                      on page 47.
     Review on pages 12 and 13 elaborates       financial statements.
     the financial results of the Company.                                                             DIRECTORS’ RESPONSIbILITy
     These reports together with the            mARkET vALuE OF FREEhOLD                               The Statement of the Directors’
     audited financial statements reflect       LAND                                                   Responsibility is given on page 34 of
     the state of the affairs of the Company.   The freehold land of the Company is                    this report.
                                                revalued by an independent qualified
     PRINCIPAL ACTIvITIES                       valuer when there is a substantial                     CORPORATE gOvERNANCE
     The Company is engaged in the              difference between the fair value and                  Regnis (Lanka) PLC adheres to
     manufacture of Refrigerators,                                                                     appropriate good governance principles
     Bottle Coolers, Deep Freezers and                                                                 as described in pages 16 to 21.
     manufacture and assembly of
     Washing Machines.
                                                PROFIT & APPROPRIATIONS

     FINANCIAL STATEmENTS                                                                                                   2009           2008
                                                                                                                             Rs.            Rs.
     The financial statements prepared in
                                                Profit before tax for the year ending 31st December
     compliance with the requirements of         after deducting all expenses, known liabilities and
     Section 151 of the Companies Act            depreciation amounts to                                              75,879,384     60,221,933

     No. 7 of 2007 are given on pages 36 to     From this has to be deducted the provision for taxation               (28,010,446)   (18,968,730)
     54 in this Annual Report.                  Making a profit for the year attributable to equity holders of        47,868,938     41,253,203

                                                Following Appropriation has been Approved:
     INDEPENDENT AuDITOR'S REPORT
                                                Final dividend Approved: 2009 - Rs. 3.00 per share
     The Auditor's Report on the financial       (2008 - Rs. 2.50)                                                    (14,487,252)   (12,072,710)
     statements is given on page 35 in this
                                                Balance brought forward from previous year of                         27,006,167      (2,174,326)
     report.
                                                Leaving a balance to be carried forward of                            62,645,841     27,006,167

     ACCOuNTINg POLICIES
     The accounting policies adopted in
     preparation of the financial statements
     is given on pages 40 to 43. There were
     no changes in the accounting policies
     adopted by the Company during the
     year under review.




30   Regnis (Lanka) PLC   Annual Report 2009
                                           ANNuAL REPORT OF ThE BOARD OF DIRECTORS ON ThE AFFAIRS OF ThE COMPANy




DIvIDEND                                     EvENTS OCCuRRINg AFTER ThE                 bOARD COmmITTEES
In terms of Article 7 of the Articles of     bALANCE ShEET DATE                         Audit Committee
Association of the Company, a final          No circumstances have arisen since         Following are the names of the
dividend of Rs. 3.00 per share has           the Balance Sheet date, which would        Directors comprising the Audit
been approved by the Directors for           require adjustment or disclosure           Committee of the Board:
the financial year ended                     except for the following two events.
                                                                                        Dr. G C B Wijeyesinghe - Chairman
31st December 2009, for payment                                                         Dr. Saman Kelegama
on 24th March 2010. The Board has            The Board of Directors has approved
reasonable grounds for believing             the final dividend of Rs. 3.00 per
                                                                                        The report of the Audit Committee
that the Company would satisfy the           Ordinary Share for the year ended
                                                                                        on page 24 set out the manner of
Solvency Test immediately after the          31st December 2009, for payment on
                                                                                        compliance by the Company in
distribution is made and accordingly         24th March 2010.
                                                                                        accordance with the requirements
Board of Directors has signed the                                                       of the Rule 7.10 of the Rules of the
certificate of solvency in accordance        The Company has invested Rs. 50 mn
                                                                                        Colombo Stock Exchange on corporate
with Section 57 of the Companies Act         in the Stated Capital of Regnis
                                                                                        governance.
No. 7 of 2007.                               Appliances (Private) Ltd., a fully owned
                                             subsidiary of the Company, which was       Remuneration Committee
The Board of Directors will obtain           incorporated as a private company on
                                                                                        Following are the names of the
a certificate of solvency from the           18th January 2010 to manufacture and
                                                                                        Directors comprising the Remuneration
auditors prior to the date of dispatch       assembly of home appliances under
                                                                                        Committee of the Board:
of the dividend payment.                     “Nipayum Sri Lanka 300 Enterprises
                                                                                        Dr. G C B Wijeyesinghe - Chairman
                                             Programme” of BOI.
                                                                                        Dr. Saman Kelegama
RESERvES
                                                                                        Mr. h D S Amarasuriya
                                             STATuTORy PAymENTS
The reserves and accumulated profits
as at 31st December 2009 amount to           The declaration relating to Statutory
                                                                                        The report of the Remuneration
Rs. 239.4 mn vs. Rs. 203.5 mn as at          Payments is made in the Statement of
                                                                                        Committee on page 25 contain a
31st December 2008. The break-up             Directors’ Responsibility on page 34.
                                                                                        statement of the remuneration
and the movement are shown in the
                                                                                        policy. The details of the aggregate
                                             INTERESTS REgISTER
statement of changes in equity in the
                                                                                        remuneration paid to the Executive
financial statements.                        Details of transactions with Director-
                                                                                        and Non-Executive Directors during
                                             related entities are disclosed in
                                                                                        the financial year are given in Note 8
STATED CAPITAL                               Note 28 to the financial statements
                                                                                        on page 44 to the financial statement.
                                             on pages 53 and 54 and have been
As per the terms of the Companies
                                             declared at the Board meeting,
Act No. 7 of 2007, the Stated Capital                                                   ShARE INFORmATION AND
                                             pursuant to Section 192 (2) of the
of the Company was Rs. 100,123,470/-                                                    SubSTANTIAL ShAREhOLDINgS
                                             Companies Act No. 7 of 2007.
as at 31st December 2009 and was                                                        The distribution of shareholding,
unchanged during the year. The                                                          public holding percentage, market
details are given in Note 19 to the                                                     value of shares, twenty largest
financial statements on page 49.                                                        shareholders and the percentage held
                                                                                        by each of them are disclosed on
                                                                                        pages 56 and 57.




                                                                                           Regnis (Lanka) PLC   Annual Report 2009   31
     ANNuAL REPORT OF ThE BOARD OF DIRECTORS ON ThE AFFAIRS OF ThE COMPANy




     The earnings per share, dividends per     Shareholdings of the Directors and the Chief Executive Officer at the beginning
     share, dividend pay out and net asset     of the year and as at the end of the year are as follows:
     value per share are given in Financial
                                                                                                                Share-          Share-
     highlights on page 1 and Ten year at                                                                      holding         holding
     a Glance on page 55 in this Annual                                                                    01.01.2009      31.12.2009
                                                                                                         No. of Shares   No. of Shares
     Report.
                                               h D S Amarasuriya                                              27,377          27,377
                                               G C B Wijeyesinghe                                                 –                –
     DIRECTORATE AND
                                               V G K Vidyaratne                                               51,075          51,075
     ShAREhOLDINgS
                                               G J Walker                                                         –                –
     The names of Directors of the
                                               Saman Kelegama                                                     –                –
     Company as at 31st December 2009
                                               h A Pieris - Alternate                                             –                –
     and their brief profiles are given
     on pages 6 and 7 in this report.
                                               INDEPENDENCE OF DIRECTORS                   (d)   his continued valuable services
                                               In accordance with Rule 7.10.2 (b) of             to the Company in various
     The Board has received notice from
                                               Colombo Stock Exchange (CSE) Listing              ways and in particular as
     Dr. G C B Wijeyesinghe that he has
                                               Rules, Dr. G C B Wijeyesinghe and                 the Chairman of the Audit
     attained the age of 76 years on the
                                               Dr. Saman Kelegama who are Non-                   Committee of the Company.
     19th of February 2010. The Board has
                                               Executive Directors of the Company,         (e)   he does not participate in
     requested Dr. G C B Wijeyesinghe to
                                               have submitted signed and dated                   executive decision making.
     continue to serve as a Director of the
                                               declarations as per the specimen given
     Company and Dr. G C B Wijeyesinghe
                                               in Appendix 7A of Continuing Listing        Although Dr. Saman Kelegama has not
     has consented to remain on the Board
                                               requirements of CSE.                        met the criteria mentioned in item (g)
     subject to due compliance of the
                                                                                           of Rule 7.10.4 of the CSE Rules, the
     provisions of the Companies Act No. 7
                                               Although, Dr. G C B Wijeyesinghe has        Board of Directors of the Company is
     of 2007 and has offered himself for
                                               not met the criteria mentioned in
                                                                                           of the opinion that -
     re-appointment to the Board.
                                               items (e) and (g) of Rule 7.10.4 of the
                                               CSE Rules, the Board of Directors of        (ii) Dr. Saman Kelegama is nevertheless
     The Directors recommended the             the Company is of the opinion that -        independent on the following basis:
     resolution declaring that the age                                                     (a)   his high standing in society and
     limit stipulated in Section 210 of the    (i) Dr. G C B Wijeyesinghe is                     business sector.
     Companies Act No. 7 of 2007 shall         nevertheless independent on the             (b)   his experience and knowledge
     not apply to Dr. G C B Wijeyesinghe,      following basis:                                  particularly in the field of
     notwithstanding him having attained                                                         Economics will continue to be
                                               (a)   his high standing in society and
     the age of 76 years and that his                                                            an asset to the Company.
                                                     business sector.
     reappointment for a further period of     (b)   his experience and knowledge          (c)   he does not participate in
     one year is approved and to                     particularly in the Accounting              executive decision making.
     re-elect him in terms of Section 211            field will continue to be an asset
     of the Companies Act No. 7 of 2007.             to the Company.                       (Dr. G C B. Wijeyesinghe and
                                               (c)   his stature in the academic           Dr. Saman Kelegama did not
     In terms of Article 24 (4) of the               field of management being a           participate in these deliberations and
     Articles of Association of the                  member of the Board of Study          decisions taken pursuant thereto as
     Company, Mr. Gavin Walker retires               of the Postgraduate Institute         referred to above to avoid conflict of
     by rotation and who being eligible, is          of Management for several             interests.)
     being recommended for re-election.              years. he has been conferred a
                                                     doctorate by university of
                                                     Sri Jayawardenapura.




32   Regnis (Lanka) PLC   Annual Report 2009
                                          ANNuAL REPORT OF ThE BOARD OF DIRECTORS ON ThE AFFAIRS OF ThE COMPANy




DONATIONS                                    NOTICE OF mEETINg
During the year, donations amounting         The Annual General Meeting will be
to Rs. 94,944/- (2008 - Rs. 132,095/-)       held at the registered office of Singer
were made by the Company. During             (Sri Lanka) PLC, at No. 320, Dr. Colvin
the year no donations were paid to           R De Silva Mawatha (union Place),
Government approved charities.               Colombo 2, on Wednesday
                                             31st March 2010 at 11.45 a.m.
AuDITORS
The financial statements for the             Extraordinary General Meeting
period under review were audited by          of the shareholders will be held
Messrs KPMG Ford, Rhodes, Thornton           on Wednesday, 31st March 2010
& Co., Chartered Accountants, who            following the Annual General
offer themselves for reappointment           Meeting.
for the ensuing year. The Directors
propose the reappointment of Messrs          The Notices of the Annual General
KPMG Ford, Rhodes, Thornton & Co.,           Meeting and the Extraordinary
as Auditors of the Company for the           General Meeting of the Shareholders
year 2010.                                   are on pages 59 and 60 respectively.


The audit and non-audit fees paid to         For and on behalf of the Board
the Auditor is disclosed in Note 8 on
page 44 in this Annual Report.

                                             (Sgd.)                              (Sgd.)
As far as the Directors are aware, the
                                             V G K Vidyaratne                    H D S Amarasuriya
Auditors do not have any relationship        Director                            Director
or interest in the Company.


The Audit Committee reviews the              (Sgd.)
appointment of the Auditor, its              A C M Irzan, FCMA (uK)
effectiveness and its relationship with      Company Secretary
the Company including the level of           Regnis (Lanka) PLC
audit and non-audit fees paid to the
                                             Colombo
Auditor. Details on the work on the
                                             8th March 2010
Audit Committee are set out in the
Audit Committee Report.




                                                                                            Regnis (Lanka) PLC   Annual Report 2009   33
     STATEmENT OF DIRECTORS’
     RESPONSIbILITy
     The Companies Act No. 7 of 2007              disclose, with reasonable accuracy,       Messrs KPMG Ford, Rhodes,
     requires Directors to ensure that the        the financial position of the Company     Thornton & Co., the Auditors of the
     Company keeps accounting records,            and to be able to ensure that the         Company have examined the financial
     which correctly record and explain           financial statements of the Company       statements made available by the
     the Company’s transactions and               meet with the requirements of the         Board of Directors together with all
     prepare financial statements that give       Companies Act, Sri Lanka Accounting       relevant financial records, related
     a true and fair view of the state of the     Standards and the Rules of the            data, minutes of shareholders' and
     Company’s affairs as at the Balance          Colombo Stock Exchange.                   Directors' meetings and express their
     Sheet date and of the profit for the year.                                             opinion in their Report in page 35 of
                                                  The Directors have reasonable             the Annual Report.
     The Directors are also required to           expectation, that the Company has
     ensure that the financial statements         adequate resources to continue            COmPLIANCE REPORT
     have been prepared and presented             in operational existence for the          Based on the Report of the
     in accordance with the Sri Lanka             foreseeable future, and therefore have    compliance officer, the Directors
     Accounting Standards and the Rules           continued to adopt the going-concern      confirm that to the best of their
     of the Colombo Stock Exchange.               basis in preparing the Accounts.          knowledge and belief, all taxes, duties
     They are also responsible for taking                                                   and levies payable by the Company,
     reasonable measures to safeguard the         As required by Section 56 (2) of the      all contributions, levies and taxes
     assets of the Company, and in that           Companies Act and in terms of Article     payable on behalf of and in respect of
     context to have proper regard to the         7(2) of the Articles of Association of    the employees of the Company and all
     establishment of appropriate systems         the Company, the Board of Directors       other known statutory dues as were
     of internal control with a view to           has authorised the payment of final       due and payable by the Company as
     prevention and detection of fraud and        dividends being satisfied based on        at the Balance Sheet date have been
     other irregularities.                        information available to it that          paid, or where relevant provided.
                                                  the Company would satisfy the
     The Directors are of the view that           Solvency Test after such distributions    By Order of the Board
     these financial statements have              in accordance with Section 57 of
     been prepared under the generally            the Companies Act No. 7 of 2007.
     accepted accounting principles and           Accordingly Board of Directors has        (Sgd.)
     in accordance with the Sri Lanka             signed the Certificate of Solvency. The   A C M Irzan FCMA (uK)
     Accounting Standards as laid down            Company shall forward to CSE, prior       Company Secretary
     by The Institute of Chartered                to the date of dispatch of the dividend   Regnis (Lanka) PLC
     Accountants of Sri Lanka.                    payment, a certificate by the auditors
                                                  to the effect that the Company is         Colombo
     The Directors endeavour to ensure            able to satisfy the Solvency Test         8th March 2010
     that the Company maintains                   immediately after the distribution.
     sufficient records to be able to




34   Regnis (Lanka) PLC   Annual Report 2009
INDEPENDENT
AuDITORS’ REPORT




TO ThE ShAREhOLDERS OF                   SCOPE OF AuDIT AND bASIS OF             OPINION
REgNIS (LANkA) PLC                       OPINION                                 In our opinion, so far as appears
Report on the Financial                  Our responsibility is to express an     from our examination, the Company
Statements                               opinion on these financial statements   maintained proper accounting records
We have audited the accompanying         based on our audit. We conducted our    for the year ended 31st December
financial statements of Regnis (Lanka)   audit in accordance with Sri Lanka      2009, and the financial statements
PLC, which comprise the balance          Auditing Standards. Those standards     give a true and fair view of the
sheet as at 31st December 2009, and      require that we plan and perform the    Company's state of affairs as at
the income statement, statement          audit to obtain reasonable assurance    31st December 2009, and its profit
of changes in equity and cash flow       whether the financial statements are    and cash flows for the year then
statement for the year then ended, and   free from material misstatement.        ended in accordance with Sri Lanka
a summary of significant accounting                                              Accounting Standards.
policies and other explanatory notes,    An audit includes examining, on
as set out on pages 36 to 54 of the      a test basis, evidence supporting       REPORT ON OThER LEgAL AND
Annual Report.                           the amounts and disclosures in the      REguLATORy REQuIREmENTS
                                         financial statements. An audit also     These financial statements also
mANAgEmENT'S                             includes assessing the accounting       comply with the requirements of
RESPONSIbILITy FOR ThE                   principles used and significant         Sections 151 (2) of the Companies
FINANCIAL STATEmENTS                     estimates made by management,           Act No. 07 of 2007.
Management is responsible for the        as well as evaluating the overall
preparation and fair presentation        financial statement presentation.
of these financial statements in
accordance with Sri Lanka Accounting     We have obtained all the information
Standards. This responsibility           and explanations which to the best      Chartered Accountants
includes: designing, implementing        of our knowledge and belief were        Colombo
and maintaining internal control         necessary for the purposes of our       8th March 2010
relevant to the preparation and          audit. We therefore believe that our
fair presentation of financial           audit provides a reasonable basis for
statements that are free from material   our opinion.
misstatement, whether due to fraud
or error; selecting and applying
appropriate accounting policies; and
making accounting estimates that are
reasonable in the circumstances.




                                                                                    Regnis (Lanka) PLC   Annual Report 2009   35
     INCOmE STATEmENT

     Year ended 31st December                                                                         2009                  2008
                                                                                Note                   Rs.                   Rs.

     Revenue                                                                      5          1,346,240,589      1,498,647,031
     Cost of sales                                                                          (1,188,134,719)    (1,326,032,594)
     Gross profit                                                                             158,105,870        172,614,437
     Other operating income                                                       6              1,845,653            1,412,642
     Administrative expenses                                                                    (8,237,288)          (13,021,451)
     Selling and distribution expenses                                                          (9,093,456)          (12,477,957)
     Finance cost                                                                 7            (66,741,394)          (88,305,738)
     Profit before taxation                                                       8             75,879,384           60,221,933
     Income tax expense                                                           9            (28,010,446)          (18,968,730)
     Profit for the year attributable to equity holders
       of the Company                                                                           47,868,938           41,253,203


     Earnings per share - Basic                                                  10                   9.91                  8.54
     Dividends per share (Including authorised final dividend)                                        3.00                  2.50


     The Accounting Policies and Notes on pages 40 through 54 form an integral part of these financial statements.

     Figures in brackets indicate deductions.

     The Report of the Auditors is on page 35.




36   Regnis (Lanka) PLC   Annual Report 2009
bALANCE ShEET

As at 31st December                                                                                               2009                2008
                                                                                     Note                          Rs.                 Rs.

ASSETS
Non-current assets
Property, plant & equipment                                                             11                  323,095,765        339,489,131
Long-term investment                                                                    12                    9,000,000          9,000,000
Other receivables                                                                       15                    6,685,722          8,633,149
Deferred tax assets                                                                     13                   36,075,366         43,873,294
                                                                                                            374,856,853        400,995,574

Current assets
Inventories                                                                             14                  264,703,969        253,128,191
Trade and other receivables                                                             15                  174,897,312        122,513,146
Income tax recoverable                                                                  16                   19,766,120         27,882,405
Other taxes recoverable                                                                 17                   16,080,090         16,080,090
Cash and Cash equivalents                                                               18                    3,097,978          4,869,791
Total current assets                                                                                        478,545,470        424,473,623
Total assets                                                                                                853,402,322        825,469,198

EQUITY AND LIABILITIES
Equity
Stated capital                                                                          19                  100,123,470        100,123,470
Revaluation reserve                                                                     20                  164,507,204        164,507,204
Retained earnings                                                                                            74,875,105         39,078,877
Total equity                                                                                                339,505,779        303,709,551

Non-current liabilities
Retirement benefit obligations                                                          22                   40,290,096         32,666,262
Interest bearing loans and borrowings                                                   21                   36,000,000                 –
                                                                                                             76,290,096         32,666,262
Current liabilities
Interest bearing loans and borrowings                                                   21                  292,264,409        392,179,510
Amounts due to related party                                                            23                    5,241,249         17,990,022
Trade and other payables                                                                24                  139,871,357         78,694,419
Dividend payable                                                                        25                      229,434            229,434
                                                                                                            437,606,448        489,093,385
Total liabilities                                                                                           513,896,544        521,759,647
Total equity and liabilities                                                                                853,402,322        825,469,198

The Accounting Policies and Notes on pages 40 through 54 form an integral part of these financial statements.

The Report of the Auditors is on page 35.

I certify that the financial statements of the Company comply with the requirements of the Companies Act No. 7 of 2007.


(Sgd.)
A C M Irzan
Chief Financial Officer


The Board of Directors is responsible for the preparation and presentation of these financial statements.
Signed for and on behalf of the Board,



(Sgd.)                                                              (Sgd.)
H D S Amarasuriya                                                   V G K Vidyaratne
Director                                                            Director
Colombo
8th March 2010



                                                                                                    Regnis (Lanka) PLC    Annual Report 2009   37
     STATEmENT OF
     ChANgES IN EQuITy
                                                            Note              Stated       Revaluation               Retained          Total
                                                                             Capital         Reserves                Earnings
                                                                                 Rs.               Rs.                    Rs.           Rs.

     Balance as at 1st January 2008                                  100,123,470         129,257,204          12,312,926        241,693,600
     Dividends 2007                                                             –                   –        (14,487,252)       (14,487,252)
     Surplus on revaluation of land                        20                   –         35,250,000                      –      35,250,000
     Profit for the year                                                        –                   –         41,253,203         41,253,203
     Balance as at 31st December 2008                                100,123,470         164,507,204          39,078,877        303,709,551
     Dividends 2008                                                             –                   –        (12,072,710)       (12,072,710)
     Profit for the year                                                        –                   –         47,868,938         47,868,938
     Balance as at 31st December 2009                                100,123,470         164,507,204          74,875,105        339,505,779


     The Accounting Policies and Notes on pages 40 through 54 form an integral part of these financial statements.

     Figures in brackets indicate deductions.

     The Report of the Auditors is on page 35.




38   Regnis (Lanka) PLC   Annual Report 2009
CASh FLOw STATEmENT

Year ended 31st December                                                                                2009                 2008
                                                                              Note                       Rs.                  Rs.

Cash Flows from Operating Activities
Profit before income tax expense                                                 8               75,879,384          60,221,933
Adjustments for -
    Depreciation of property, plant & equipment                                11.2              18,853,720          19,025,547
    Carrying amount of property, plant & equipment written off                                            –               15,600
    Interest income                                                              6                 (320,698)            (373,946)
    Provision for slow moving and obsolete inventory                             8                5,600,000            1,650,000
    Interest cost                                                                7               65,678,641          87,781,227
    Provision for retirement gratuity                                          22                 9,643,344            6,888,502
    Operating profit before working capital changes                                            175,334,391          175,208,863
    (Increase)/decrease in inventories                                         14               (17,175,777)           5,014,143
    (Increase)/decrease in trade and other receivables                    15 & 17               (50,436,739)         (17,031,342)
    Increase /(decrease) in trade and other payables                           24                62,915,102          (13,316,643)
    Increase/(decrease) in amount due to related party                         23               (12,748,773)         (85,495,569)
    Cash generated from operations                                                             157,888,204           64,379,452

    Interest paid                                                                7              (66,906,029)         (84,453,829)
    Retiring gratuity paid                                                     22                (2,019,510)            (298,240)
    Income tax paid                                                            16               (12,096,235)         (16,449,537)
Net cash flow from operating activities                                                          76,866,430          (36,822,154)

Cash Flows from Investing Activities
    Acquisition of property, plant & equipment                                 11                (2,460,354)          (5,037,710)
    Interest received                                                            6                  320,698              373,946
Net cash flows from investing activities                                                         (2,139,656)          (4,663,764)

Cash Flows from Financing Activities
    Repayment of long-term loans                                               21                         –          (13,276,385)
    Proceeds from long-term loans                                              21                60,000,000                   –
    Repayment of finance lease obligations                                     21                (7,557,870)          (8,244,947)
    Proceeds from short-term borrowings                                        21              515,768,175          886,988,744
    Repayment of short-term borrowings                                         21              (785,960,177)       (804,273,968)
    Loan from related company                                                                  130,000,000                    –
    Dividend paid                                                                               (12,072,710)         (14,487,430)
Net cash flows from financing activities                                                        (99,822,582)         46,706,014

Net Increase in Cash and Cash Equivalents                                                       (25,095,808)           5,220,096
Cash and Cash Equivalents at the beginning of the Year                         18               (15,779,735)         (20,999,831)
Cash and Cash Equivalents at the end of the Year                               18               (40,875,543)         (15,779,735)


The Accounting Policies and Notes on pages 40 through 54 form an integral part of these financial statements.

Figures in brackets indicate deductions.

The Report of the Auditors is on page 35.




                                                                                            Regnis (Lanka) PLC   Annual Report 2009   39
     NOTES TO ThE FINANCIAL
     STATEmENTS
     1.    CORPORATE INFORmATION               2.2 basis of measurement                  3.1 Foreign Currency Translation
     1.1 Reporting Entity                      Financial statements have been            Transactions in foreign currencies are
     Regnis (Lanka) PLC (‘Company’) is a       prepared on the historical cost basis     translated to Sri Lanka Rupees, which
     limited liability company incorporated    except for certain property, which is     is the functional currency, at exchange
     and domiciled in Sri Lanka. The           measured at fair value as explained in    rates at the dates of the transactions.
     registered office of the Company          Note 11 to the financial statements.      Monetary assets and liabilities
     and the principal place of business                                                 denominated in foreign currencies at
     is situated at No. 52, Ferry Road, off    2.3 Functional and Presentation           the reporting date are retranslated
     Borupana Road, Ratmalana, Sri Lanka.      Currency                                  to Sri Lanka Rupees at the exchange
                                               The financial statements are presented    rate at that date. Non-monetary assets
     1.2 Principal Activities and              in Sri Lankan Rupees, which is the        and liabilities denominated in foreign
     Nature of Operations                      Company’s functional currency.            currencies are retranslated using
     The principal activities of the Company                                             exchange rates that existed when the
     are manufacture of Refrigerators,         2.4 use of Estimates and                  values were determined. The resulting
     Deep Freezers, Bottle Coolers and         Judgements                                gains and losses are accounted for in
     manufacture and assembly of               The preparation of financial              profit and loss.
     Washing Machines.                         statements in conformity with
                                               SLAS requires management to               3.2 Segment Reporting
     1.3 Parent Enterprise and                 make judgements, estimates and            A segment is a distinguishable
     ultimate Parent Enterprise                assumptions that affect the application   component of the Company that is
     The Company’s parent undertaking is       of accounting policies and the reported   engaged either in providing products
     Singer (Sri Lanka) BV. The Company’s      amounts of assets, liabilities, income    or services (business segments) or in
     ultimate parent undertaking and           and expenses. Actual results may          providing products or services within
     controlling party is Retail holdings      differ from these estimates.              a particular economic environment
     NV which is incorporated in                                                         (geographical segment) which is
     Netherlands, Antilles.                    Estimates and underlying assumptions      subject to risk and returns that
                                               are reviewed on an ongoing basis.         are different from those of other
     1.4 Number of Employees                   Revisions to accounting estimates         segments. Segmental information is
                                               are recognised in the period in which     presented in respect of the Company’s
     The number of employees at the end
                                               the estimates are revised and in any      business segments. The primary
     of the year was 235 (2008 - 237).
                                               future period affected.                   format business segments is based
                                                                                         on the Company’s management and
     1.5 Date of Authorisation
                                               Information about significant areas       internal reporting structure.
     for Issue
     The financial statements for the year     of estimation uncertainty and critical
                                               judgements in applying accounting         Segment results, assets and liabilities
     ended 31st December 2009 were
                                               policies that have the most significant   include items directly attributable to
     authorised for issue in accordance
                                               effect on the amounts recognised in       a segment as well as those that can be
     with a resolution of the Board of
                                               the financial statements is included in   allocated on a reasonable basis.
     Directors on 8th March 2010.
                                               the following Notes:
                                               Note 22   - Measurement of Retirement     3.3 Discontinued Operations
     2.    bASIS OF PREPARATION
                                                           Benefit Obligations           A discontinued operation is a
     2.1 Statement of Compliance                                                         component of the Company’s business
                                               Note 26.2 - Contingencies
     The financial statements have been                                                  that represents a separate major line
     prepared in accordance with                                                         of business that has been disposed of
                                               3. SummARy OF SIgNIFICANT
     Sri Lanka Accounting Standards                                                      or is held for sale. Classification as a
                                               ACCOuNTINg POLICIES
     (SLAS), adopted by The Institute of                                                 discontinued operation occur upon
     Chartered Accountants of Sri Lanka        The accounting policies set out below
                                                                                         disposal or when the operation meets
     (ICASL) and the requirements of the       have been applied consistently by the
                                                                                         the criteria to be classified as held for
     Companies Act No. 7 of 2007 and           Company.
                                                                                         sale, if earlier. When an operation is
     Sri Lanka Accounting & Auditing                                                     classified as a discontinued operation,
     Standards Act No. 15 of 1995.             Certain comparative amounts have
                                                                                         the comparative income statement is
                                               been reclassified to conform with the
                                                                                         represented as if the operations had
                                               current year’s presentation.
                                                                                         been discontinued from the start of
                                                                                         the comparative period.



40   Regnis (Lanka) PLC   Annual Report 2009
                                                                                      NOTES TO ThE FINANCIAL STATEMENTS




3.4 Assets and bases of their              directly in equity. All other decreases      3.4.2 Assets held under Finance
valuation                                  are recognised in profit and loss.           Leases
3.4.1 Property, Plant & Equipment                                                       Property, plant & equipment on
Items of property, plant & equipment       (b) Subsequent Costs                         finance leases, which effectively
are measured at cost or valuation          The cost of replacing part of an item        transfer to the Company substantially
less accumulated depreciation and          of property, plant & equipment is            all of the risk and benefits incidental
accumulated impairment losses              recognised in the carrying amount            to ownership, are classified as finance
except for land which is measured at       of the item if it is probable that           leases. upon initial recognition
revalued amount.                           the future economic benefits                 the leased asset is measured at an
                                           embodied within the part will flow           amount equal to the lower of its fair
(a) Cost and Valuation                     to the Company and its cost can              value and present value of minimum
Cost includes expenditure that is          be measured reliably. The carrying           lease payments. Subsequent to initial
directly attributable to the acquisition   amount of the replaced part is               recognition, the asset is accounted for
of the asset. The cost of self-            derecognised. The costs of day-to-           in accordance with the accounting
constructed assets includes the cost       day servicing of property, plant &           policy applicable to that asset.
of materials and direct labour and         equipment is recognised in profit and
any other costs directly attributable      loss as incurred.                            The corresponding principal amount
to bringing the assets to a working                                                     payable to the lessor is shown as
condition for their intended use.          (c) Depreciation                             a liability. Lease payments are
                                           Depreciation is recognised in profit         apportioned between the finance
When parts of an item of property,         and loss on a straight-line basis            charges and reduction of the lease
plant & equipment have different           over the estimated useful lives of           liability so as to achieve a constant rate
useful lives, they are accounted for as    each part of an item of property,            of interest on the remaining balance
separate items (major components) of       plant & equipment. Freehold land is          of the liability. The interest element
property, plant & equipment.               not depreciated. Assets held under           of the rental obligations applicable to
                                           finance lease are depreciated over the       each financial year is charged to the
All items of property, plant &             shorter of the lease term and useful         profit and loss over the period of the
equipment are initially recognised         life of the equivalent owned assets.         lease using sum of digits method.
at cost. A revaluation is carried out
when there is a substantial difference     The estimated useful lives are as            3.4.3 Investments
between the fair value and the             follows:                                     Long-Term Investments
carrying amount of the property,           Buildings                over 40 years       Investments in shares held on long-
and is undertaken by professionally        Machinery &                                  term basis are initially measured at
qualified valuers.                          equipment               over 10 years       cost.
                                           Tools, dies & gauges     over 10 years
Increases in the carrying amount           Furniture & fittings     over 10 years       Provision for impairment is made
on revaluation is credited to the          Motor vehicles           over 05 years       when in the opinion of the Directors
revaluation reserve in shareholders'       EDP equipment            over 05 years       there has been a decline, other than
equity unless it reverses a previous                                                    temporary, in the carrying amount of
revaluation decrease relating to the       Depreciation of an asset begins when         the investment.
same asset, which was previously           it is available for use and cease at the
recognised as an expense. In these         earlier of the date that the asset as        3.4.4 Inventories
circumstances the increase is              classified as held for sale and the date     Inventories are measured at the lower
recognised as income to the extent of      that the asset is derecognised.              of cost or net realisable value, after
the previous write down.                                                                making due allowances for obsolete
                                           Depreciation methods, useful lives           and slow moving items. Net realisable
Decreases that offset previous             and residual values are reassessed at        value is the estimated selling price in
increases of the same individual asset     the reporting date.                          the ordinary course of business, less
is charged against revaluation reserve                                                  the estimated costs of completion and
                                                                                        selling expenses.




                                                                                           Regnis (Lanka) PLC   Annual Report 2009   41
     NOTES TO ThE FINANCIAL STATEMENTS




     The cost of each category of                than inventories and deferred tax           warranties
     inventory is determined on the              assets, are reviewed at each reporting      A provision for warranties is
     following basis:                            date to determine whether there is          recognised when the products are
     Raw Materials        - At actual cost on    any indication of impairment. If any        sold. The provision is based on
                            first-in first-out   such indication exists, then the asset’s    the historical warranty data and a
                            basis.               recoverable amount is estimated.            weighing of all possible outcomes
     Finished Goods                                                                          against their associated probabilities.
      & Work-in-                                 The recoverable amount of an asset
      Progress        - At the cost of direct    or cash-generating unit is the greater      3.5.2 Employee benefits
                        materials, direct        of its value in use and its fair value      (a) Defined Benefit Plans
                        labour and an            less costs to sell. In assessing value in   A defined benefit plan is a post-
                        appropriate              use, the estimated future cash flows        employment benefit plan other than
                        proportion of fixed      are discounted to their present value       a defined contribution plan. The
                        production               using a pre-tax discount rate that          liability recognised in the financial
                        overheads based on       reflects current market assessments of      statements in respect of defined
                        normal operating         the time value of money and the risks       benefit plans is the present value of
                        capacity.                specific to the asset. In determining       the defined benefit obligation as at the
     Goods-in-Transit - At actual cost.          fair value less costs to sell, an           reporting date. The defined benefit
     Inventory                                   appropriate valuation model is used.        obligation is calculated by a Qualified
      Provision       - Specific provisions                                                  Actuary as at the reporting date
                        are made giving          An impairment loss is recognised            using the Projected unit Credit (PuC)
                        consideration            if the carrying amount of an asset          method as recommended by SLAS 16.
                        to the condition of      or cash-generating unit exceeds             The Company expects to carry out
                        inventory held by        its estimated recoverable amount.           actuarial valuation every year.
                        the Company.             Impairment losses are recognised in
                                                 profit and loss. An impairment loss is      The actuarial valuation involves
     3.4.5 Trade and Other Receivables           reversed if there has been a change in      making assumptions about discount
     Trade receivables are stated at the         the estimates used to determine the         rates, salary increment rate, mortality
     amounts they are estimated to realise       recoverable amount. An impairment           and retirement age.
     net of provisions for bad and doubtful      loss is reversed only to the extent
     debts.                                      that the asset's carrying amount does       The liability is not externally funded.
                                                 not exceed the carrying amount that
     Other receivables and dues from             would have been determined, net of          (b) Defined Contribution Plans -
     Related Parties are recognised at cost      depreciation or amortisation, if no         Employees’ Provident Fund &
     less provision for bad and doubtful         impairment loss had been recognised.        Employees’ Trust Fund
     receivables.                                                                            A defined contribution plan is a post-
                                                 3.5 Liabilities and Provisions              employment benefit plan under which
     3.4.6 Cash and Cash Equivalents             Liabilities classified as current           an entity pays fixed contributions
     Cash and cash equivalents comprise          liabilities on the Balance Sheet date       into a separate entity and will have
     cash in hand, demand deposits and           are those that fall due for payment         no legal or constructive obligation
     short-term highly liquid investments,       on demand or within one year from           to pay further amounts. Employees
     readily convertible to known amounts        the Balance Sheet date. Non-current         are eligible for Employees’ Provident
     of cash and subject to insignificant        liabilities are those balances that fall    Fund Contributions and Employees’
     risk of changes in value.                   due for payment later than one year         Trust Fund Contributions in line with
                                                 from the Balance Sheet date.                respective Statutes and Regulations.
     For the purpose of Cash Flow                                                            The Company contributes 12% and
     Statement, cash and cash equivalents        3.5.1 Provisions                            3% of gross emoluments of employees
     consist of cash on hand and deposits        A provision is recognised if, as a          to Employees’ Provident Fund and
     in banks net of outstanding bank            result of a past event, the Company         Employees’ Trust Fund respectively
     overdrafts.                                 has a present legal or constructive         and is recognised as an expense in
                                                 obligation that can be measured             profit and loss when incurred.
     3.4.7 Impairment of Assets                  reliably, and it is probable that an
     The carrying amount of the                  outflow of economic benefits will be
     Company’s non-financial assets other        required to settle the obligation.



42   Regnis (Lanka) PLC   Annual Report 2009
                                                                                    NOTES TO ThE FINANCIAL STATEMENTS




(c) Short-Term Benefits                   3.6.2 Expenditure Recognition               A deferred tax asset is recognised
Short-term employee benefit               (a) All expenditure incurred in             to the extent that it is probable
obligations are measured on an            the running of the business and in          that future taxable profits will
undiscounted basis and are expensed       maintaining the property, plant &           be available against which the
as the related service is provided.       equipment in a state of efficiency has      temporary differences can be utilised.
                                          been charged to income in arriving at       Deferred tax assets are reviewed at
3.6 Income Statement                      the profit for the year.                    each reporting date and are reduced
3.6.1 Revenue Recognition                                                             to the extent that it is no longer
The following specific criteria are       (b) For the purpose of presentation of      probable that the related tax benefit
used for the purpose of recognition of    income statement the Directors are of       will be realised.
revenue:                                  the opinion that function of expenses
                                          method present fairly the elements          Deferred tax is measured at the tax
(a) Sale of Goods                         of the Company’s performance, and           rates that are expected to apply to
Revenue from the sale of goods is         hence such presentation method is           temporary differences when they
measured at the fair value of the         adopted.                                    reverse, based on tax rates (and
consideration received or receivable                                                  tax laws) that have been enacted
net of trade discounts and sales          3.6.3 Research and Development              or substantively enacted by the
taxes. Revenue is recognised when         Costs                                       reporting date.
the significant risks and rewards         Research and development costs are
of ownership of the goods have            expensed as incurred.                       4.     NEw STANDARDS AND
passed to the buyer; recovery of                                                      INTERPRETATIONS NOT yET
the consideration is probable, the        3.6.4 borrowing Costs
                                                                                      ADOPTED
associated costs and possible return      Borrowing costs are recognised as an
                                                                                      The Institute of Chartered
of goods can be measured reliably,        expense in the period in which they
                                                                                      Accountants of Sri Lanka has issued
there is no continuing managerial         are incurred.
                                                                                      the two new standards given below,
involvement with the goods, and the
                                                                                      which become effective for annual
amount of revenue can be measured         3.6.5 Income Tax
                                                                                      periods beginning on or after 01st
reliably.                                 Income tax expense comprises
                                                                                      January 2011. Accordingly, these
                                          current and deferred tax. Income tax
                                                                                      standards have not been applied in
(b) Interest                              expense is recognised in profit or loss
                                                                                      preparing these financial statements
Interest income is recognised in profit   except to the extent that it relates to
                                                                                      as they are not effective for the year
and loss as it accrues (taking into       items recognised directly in equity, in
                                                                                      ended 31st December 2009.
account the effective yield on the        which case it is recognised in equity.
asset).                                                                               -      Sri Lanka Accounting Standard
                                          (a) Current Income Tax                             44 - Financial Instruments:
(c) Dividends                             Current income tax is the expected
                                                                                             Presentation (SLAS 44)
Dividend income is recognised             tax payable on the taxable income
in profit and loss on the date the        for the year, using tax rates enacted       -      Sri Lanka Accounting Standard
entities right to receive payment is      at the reporting date and any                      45 - Financial Instruments:
established.                              adjustments to tax payable in respect
                                                                                             Recognition and Measurement
                                          of previous years.
                                                                                             (SLAS 45)
(d) Others
Gains and losses of a revenue nature      (b) Deferred Income Tax
                                                                                      The Company is currently in the
on the disposal of property, plant &      Deferred income tax is recognised,
                                                                                      process of evaluating the potential
equipment and other non-current           using the Balance Sheet method,
                                                                                      effect of these standards. however,
assets including investments are          providing for temporary differences
                                                                                      the impact of the above requirements
recognised by comparing the net sales     between the carrying amounts of
                                                                                      has not been quantified as at the
proceeds with the carrying amount         assets and liabilities for financial
                                                                                      Balance Sheet date.
of the corresponding asset and are        reporting purposes and the amounts
recognised net within 'other income'      used for taxation purposes.
in profit and loss.




                                                                                           Regnis (Lanka) PLC   Annual Report 2009   43
     NOTES TO ThE FINANCIAL STATEMENTS




     Year ended 31st December
     5.    REvENuE
           5.1 Segmental Information
                                                      Refrigerator and Other           Washing Machine                         Total
                                                       2009             2008         2009          2008                 2009              2008

           Segment revenue                     1,257,127,767 1,345,748,808     89,112,822     152,898,223 1,346,240,589 1,498,647,031
           Segment result                       132,435,326    138,319,790      8,339,800       8,795,239     140,775,126      147,115,029
           Finance cost                         (65,396,088)   (87,814,658)    (1,345,306)      (491,080)     (66,741,394)     (88,305,738)
           Other income                                  –               –            –               –         1,845,653         1,412,642
           Profit before taxation                        –               –            –               –        75,879,384       60,221,933

           Segment assets                       755,848,086    719,966,617     13,534,683       3,797,001     769,382,769      723,763,618
           Investment                                    –               –            –               –         9,000,000         9,000,000
           Tax recoverable                               –               –            –               –        71,921,576       87,835,789
           Cash and cash equivalents                     –               –            –               –         3,097,978         4,869,791
                                                                                                              853,402,322      825,469,198

           Segment liabilities                  185,084,401    129,346,503       318,300            4,200     185,402,701      129,350,703
           Loans and borrowings                 321,647,584    389,998,547      6,616,825       2,180,963     328,264,409      392,179,510
           Dividend payable                                                                                       229,434              229,434
                                                                                                              513,896,544      521,759,647

           Capital expenditure                    2,460,354      5,037,710                                      2,460,354         5,037,710
           Depreciation                          18,447,497     19,025,547       406,223                       18,853,720       19,025,547


                                                                                                                 2009                     2008
                                                                                                                  Rs.                      Rs.

     6.    OThER OPERATINg INCOmE
           Interest income - loans to company officers                                                       320,698               373,946
           Other income - Subcontracts                                                                      1,524,954            1,038,696
                                                                                                            1,845,653            1,412,642


     7.    FINANCE COST
           Interest expense on overdrafts and loans                                                       48,876,141            84,566,357
           Interest expense on related party payables                                                     16,291,725             1,712,542
           Finance charges on lease liabilities                                                              510,776             1,502,328
           Loss on translation of foreign currency                                                         1,062,753               524,511
                                                                                                          66,741,394            88,305,738


     8.    PROFIT bEFORE TAxATION
           Profit before tax is stated after charging all expenses including the following:
           Depreciation on property, plant & equipment                                                 18,853,720               19,025,547
           Research and development expenditure                                                           226,514                  130,596
           Provision for slow moving and obsolete inventories                                           5,600,000                1,650,000
           Personnel costs (Note 8.1)                                                                 162,899,949              161,451,535
           Legal and professional fees                                                                    575,384                  642,880
           Auditors‘ remuneration - statutory audit                                                       471,500                  425,500
                                      - audit related services                                            140,404                  115,000
           Donations                                                                                       94,944                  132,095
           Carrying amount of property, plant & equipment written off                                          –                    15,600
           Executive Directors‘ remuneration                                                            4,523,500                3,779,938
           Non-Executive Directors‘ fees                                                                1,095,000                  475,000
           Warranty cost                                                                                4,567,885                5,445,000



44   Regnis (Lanka) PLC   Annual Report 2009
                                                                                    NOTES TO ThE FINANCIAL STATEMENTS




                                                                                                      2009                  2008
                                                                                                       Rs.                   Rs.

     8.1 Personal Costs
     Salaries                                                                                138,138,892           123,873,276
     EPF - defined conribution plan                                                            9,750,297              7,437,724
     ETF - defined contribution plan                                                           2,437,576              1,859,432
     Bonus                                                                                     2,929,840             21,392,601
     Provision for retirement benefits                                                         9,643,344              6,888,502
     Total                                                                                   162,899,949           161,451,535


9.   INCOmE TAx ExPENSE
     Current Income Tax
     Tax on profit for the year (Note 9.1)                                                    20,212,519             15,182,010
     under/(over) provision in respect of previous years                                               –             (2,262,310)
                                                                                              20,212,519             12,919,700
     Deferred Income Tax
     Origination and reversal of temporary difference (Note 13)                                7,797,928              6,049,030
     Income tax expense in Income Statement                                                   28,010,446             18,968,730


     9.1 Reconciliation between Current Tax Expense and the Product of Accounting Profit
                                                                                                      2009                  2008
                                                                                                       Rs.                   Rs.

     Profit before tax                                                                        75,879,384             60,221,933
     Total disallowable expenses                                                              35,857,986             27,810,383
     Total allowable expenses                                                                (24,204,130)           (22,284,423)
     Taxable income from ordinary activities                                                  87,533,240             65,747,893

     Statutory income                                                                         87,533,240             65,747,893
     Tax loss utilised for the year                                                          (30,636,634)           (23,011,763)
     Taxable profit                                                                           56,896,606             42,736,130
     Statutory tax rate                                                                               35%                   35%
                                                                                              19,913,812             14,957,646
     Social responsibility levy                                                                  298,707                224,365
     Tax on profit for the year                                                               20,212,519             15,182,010


     Tax loss at the beginning of the year                                                   152,054,162           167,322,800
     Adjustment for tax loss brought forward                                                      (49,670)            7,743,125
     Tax loss utilised                                                                       (30,636,634)           (23,011,763)
     Tax loss at the end of the year                                                         121,367,858           152,054,162


10. EARNINgS PER ShARE
     10.1 Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary
     shareholders by the weighted average number of ordinary shares outstanding during the year.




                                                                                         Regnis (Lanka) PLC     Annual Report 2009   45
     NOTES TO ThE FINANCIAL STATEMENTS




           10.2 The following reflects the income and share data used in the basic earnings per share computations:
                                                                                                         2009                2008
                                                                                                          Rs.                 Rs.

           Amounts Used as the Numerators
           Profit for the year                                                                   47,868,938           41,253,203
           Net profit attributable to ordinary shareholders for basic earnings per share         47,868,938           41,253,203


           Number of Ordinary Shares Used as Denominators                                              2009                 2008
                                                                                                     Number               Number

           Number of ordinary shares in issue applicable to basic earning per share               4,829,084            4,829,084
                                                                                                  4,829,084            4,829,084
           Basic earnings per share (Rs.)                                                                9.91                8.54


     11. PROPERTy, PLANT & EQuIPmENT
           11.1 gross Carrying Amounts
                                                                   Balance         Additions        Transfers             Balance
                                                          as at 01.01.2009                                        as at 31.12.2009
                                                                       Rs.                 Rs.             Rs.                 Rs.

           At Cost
           Buildings on freehold land                       79,105,753                  –                –          79,105,753
           Machinery and equipment                         110,676,938                  –        25,436,695        136,113,633
           Tools, dies and gauges                           80,534,807           2,460,354               –          82,995,161
           Furniture and fittings                            2,628,918                  –                –           2,628,918
           EDP equipment                                     7,294,054                  –                –           7,294,054
           Motor vehicles                                    9,124,984                  –                –           9,124,984
                                                           289,365,454           2,460,354       25,436,695        317,262,503
           Assets on Finance Leases
           Equipment                                         25,436,695                    –     (25,436,695)                  –
                                                             25,436,695                    –     (25,436,695)                  –

           Total value of depreciable assets               314,802,149           2,460,354                 –       317,262,503
           At Valuation
           Freehold land                                   176,250,000                     –               –       176,250,000
                                                           176,250,000                     –               –       176,250,000

           Gross carrying amount                           491,052,149           2,460,354                 –       493,512,503


           11.2 Depreciation and Impairment Losses
                                                                   Balance        Charge for        Additions/            Balance
                                                          as at 01.01.2009          the year        (Transfers)   as at 31.12.2009
                                                                       Rs.               Rs.               Rs.                 Rs.

           At Cost
           Buildings on freehold land                        19,604,102          1,977,644               –            21,581,746
           Machinery and equipment                           67,648,714          6,730,353       11,347,782           85,726,849
           Tools, dies and gauges                            42,493,370          6,874,298               –            49,367,668
           Furniture and fittings                             1,864,831            134,609               –             1,999,440
           EDP equipment                                      5,280,372            578,149               –             5,858,521
           Motor vehicles                                    5,867,517              14,997               –           5,882,514
                                                           142,758,906          16,310,050       11,347,782        170,416,738
           Assets on Finance Leases
           Equipment                                         8,804,112           2,543,670       (11,347,782)               –
                                                             8,804,112           2,543,670       (11,347,782)               –
           Total depreciation and impairment losses        151,563,018          18,853,720                –        170,416,738


46   Regnis (Lanka) PLC   Annual Report 2009
                                                                                   NOTES TO ThE FINANCIAL STATEMENTS




   11.3 Carrying Amounts
                                                                                                     2009                  2008
                                                                                                      Rs.                   Rs.

   At cost                                                                                  146,845,765           146,606,548
   At valuation                                                                             176,250,000           176,250,000
   On finance leases                                                                                 –             16,632,583
   Total carrying amount of property, plant & equipment                                     323,095,765           339,489,131

   11.4 Property, plant & equipment includes fully depreciated assets having a gross carrying amount of
   Rs. 69,000,772/- (2008 - Rs. 63,193,953/-).

   11.5 The freehold land of the Company is revalued by an independent qualified valuer when there is a substantial
   difference between the fair value and the carrying amount of the freehold land. The land situated at No. 52, Ferry
   Road, Off Borupana Road, Ratmalana, with the extent of 705 perches was last revalued during the financial year 2008
   by Messers Chulananda Wellappili, an independent valuer for Rs. 176,250,000/-. The result of such revaluation were
   incorporated in these financial statements from its effective date, which is 11th September 2008. The land was valued
   in an open market value for existing use basis. Revaluation surplus amounting to Rs. 35,250,000/- was transferred
   to a revaluation reserve. 14 Nos. of buildings with the aggregated square feet of 114,320 are situated in the revalued
   land and these buildings are carried at cost less accumulated depreciation. The most recent valuation of buildings on
   open market basis is estimated at Rs. 180,493,019/-.

   11.6 The carrying amount of the revalued assets that would have been included in the financial statements had the
   assets been carried at cost would amount to Rs. 11,742,796/-.

   11.7 During the year the Company settled the lease liability in full, and the possession of asset was transferred to
   the Company.

   11.8 During the year, the Company acquired property, plant & equipment amounting to Rs. 2,460,354/- (2008 -
   Rs. 5,037,710). Cash payments of Rs. 2,460,354/- (2008 - Rs. 5,037,710/-) were made during the year for purchase of
   property, plant & equipment.

12. INvESTmENT IN EQuITy SECuRITIES - NON-CuRRENT
    12.1 Non-Quoted - Related Parties
                                                                   No. of        Carrying             No. of           Carrying
                                                                  Shares          Amount              Shares            Amount
                                                                    2009             2009              2008               2008
                                                                                      Rs.                                   Rs.

   Reality Lanka Ltd.                                           900,000        9,000,000           900,000           9,000,000
   Total non-quoted investments                                                9,000,000                             9,000,000
   Total carrying amount of investments                                        9,000,000                             9,000,000

   Directors Valuation of the investment as at 31st December 2009 is Rs. 9,000,000/-.

13. DEFERRED TAx ASSETS
                                                                                                        2009               2008
                                                                                                         Rs.                Rs.

   Balance at the beginning of the year                                                         43,873,294         49,922,323
   Origination and reversal of temporary differences                                            (7,797,928)        (6,049,029)
   Balance at the end of the year                                                               36,075,366         43,873,294

   Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
   assets against tax liabilities and when the deferred income taxes relate to the same fiscal authority.
                                                                                                        2009               2008
                                                                                                         Rs.                Rs.

   Deferred tax assets                                                                          56,580,283         64,652,149
   Deferred tax liabilities                                                                     20,504,917         20,778,855
                                                                                                36,075,366         43,873,294

                                                                                         Regnis (Lanka) PLC    Annual Report 2009   47
     NOTES TO ThE FINANCIAL STATEMENTS




                                                                                   2009                                   2008
                                                                          Assets           Liabilities           Assets            Liabilities
                                                                             Rs.                  Rs.               Rs.                    Rs
           Recognised Deferred Tax Assets and Liabilities
           Property, plant & equipment                                       –            20,504,917               –             20,778,855
           Defined benefit obligations                              14,101,533                    –         11,433,193                    –
           Tax loss carried forward                                 42,478,750                    –         53,218,956                    –
                                                                    56,580,283            20,504,917        64,652,149           20,778,855
           Net deferred tax                                         36,075,366                    –         43,873,294                    –


           The tax effect of tax losses carried forward are recognised as deferred tax assets as management considered it
           probable that the future taxable profits will be available against which these tax losses can be utilised in the future.


     14. INvENTORIES
                                                                                                                  2009                  2008
                                                                                                                   Rs.                   Rs.

           Raw materials                                               - at cost                          171,343,506        183,275,556
           Work-in-progress                                            - at cost                           24,168,913            25,636,950
           Finished goods                                              - at cost                           15,029,369            31,165,914
           Goods-in-transit                                            - at cost                           67,360,299            20,679,844
                                                                                                          277,902,087        260,758,264
           Consumables and spares                                      - at cost                             3,401,882            3,369,927
                                                                                                          281,303,969        264,128,191
           Less: Provision for slow moving and obsolete inventory                                          (16,600,000)      (11,000,000)
                                                                                                          264,703,969        253,128,191


                                                                                                                2009                    2008
                                                                                                                 Rs.                     Rs.

     15. TRADE AND OThER RECEIvAbLES
           15.1 Non-Current
           Loans to company officers (Note 15.3)                                                           6,685,722              8,633,149


           15.2 Current
           Trade receivable from related parties                                                         160,943,016         107,934,172
           Trade receivables - Other                                                                        439,485                       –
           Shipping guarantees                                                                             1,004,850              5,972,934
           Deposits and prepayments                                                                        2,975,467              3,963,326
           Advances and other receivables                                                                  7,268,863              2,458,747
                                                                                                         172,631,680         120,329,179
           Loans to company officers (Note 15.3)                                                           2,265,632              2,183,967
                                                                                                         174,897,312         122,513,146
           Total                                                                                         181,583,034         131,146,295




48   Regnis (Lanka) PLC   Annual Report 2009
                                                                               NOTES TO ThE FINANCIAL STATEMENTS




                                                                                                    2009                     2008
                                                                                                     Rs.                      Rs.

   15.3 Loans to Company Officers
   Summary
   Balance as at the beginning of the year                                                  10,817,116                7,493,779
   Loans granted during the year                                                                450,000               6,758,580
   Less: Repayments                                                                          (2,315,763)             (3,435,243)
   Balance as at the end of the year                                                          8,951,353             10,817,116


   Current/Non-Current Distinction
   Amount receivable within one year                                                          2,265,632               2,183,967
   Amount receivable after one year                                                           6,685,722               8,633,149
                                                                                              8,951,353             10,817,116


16. INCOmE TAx RECOvERAbLE
   Balance recoverable at the beginning of the year                                         27,882,405              24,352,568
   Income tax on profit for the year                                                        (20,212,520)            (15,182,010)
   (under)/over provision in respect of previous year                                                 –               2,262,310
   Payments made during the year                                                            12,096,235              16,449,537
   Balance payable at the end of the year                                                   19,766,120              27,882,405


17. OThER TAxES RECOvERAbLE
   National Security Levy (NSL)                                                             16,080,090              16,080,090
   Management is of the view that the Company is entitled to the NSL refunds and such refunds are being proceeded
   with the Department of Inland Revenue.


18. CASh AND CASh EQuIvALENTS
   Components of Cash and Cash Equivalents

   18.1 Favourable Cash and Cash Equivalents balance
   Cash and bank balances                                                                     3,097,978               4,869,791

   18.2 unfavourable Cash and Cash Equivalent balances
   Bank overdrafts (Note 21)                                                                (43,973,521)            (20,649,526)
   Total Cash and Cash Equivalents for the purpose of Cash Flow Statement                   (40,875,543)            (15,779,735)


19. STATED CAPITAL
   Issued and Fully Paid
                                                                At the        Issued for        Issued for
                                                            beginning       cash during          non-cash               At the end
                                                           of the year          the year     consideration             of the year
                                                           01.01.2009                                                  31.12.2009
                                                              Number           Number              Number                 Number

   19.1
   Number of shares - Ordinary shares                     4,829,084                 –                     –           4,829,084
                                                          4,829,084                 –                     –           4,829,084

                                                                  Rs.               Rs.                   Rs.                 Rs.

   Value              - Ordinary shares                 100,123,470                 –                     –        100,123,470
                                                        100,123,470                 –                     –        100,123,470




                                                                                        Regnis (Lanka) PLC      Annual Report 2009   49
     NOTES TO ThE FINANCIAL STATEMENTS




           19.2 Rights, Preference and Restrictions of Classes of Capital
           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 a meeting of the Company.


           19.3 Shares held by group Companies
           The shares of the Company held by the Group companies are as follows:
                                                                                                            2009            2008
                                                                                                          Number          Number

           Held by Group Companies
           Singer (Sri Lanka) B.V.                                                                      2,581,158      2,581,158
           Singer (Sri Lanka) PLC                                                                          42,795         42,795
                                                                                                        2,623,953      2,623,953

                                                                                                             2009            2008
                                                                                                              Rs.             Rs.

     20. REvALuATION RESERvE
           Revaluation reserve relates to the surplus on revaluation of land.
           The movement of revaluation reserve as follows:
           At the beginning of the year                                                               164,507,204    129,257,204
           Surplus on revaluation                                                                              –      35,250,000
           Balance at the end of the year                                                             164,507,204    164,507,204


     21. INTEREST bEARINg LOANS AND bORROwINgS
           Payable within One year
           Bank overdrafts                                                                             43,973,521     20,649,526
           Short-term bank loans (Note 21.1)                                                           94,290,888    364,482,890
           Loan from related company (Note 21.2)                                                      130,000,000             –
           Long-term bank loans (Note 21.3)                                                            24,000,000             –
           Finance lease obligations (Note 21.4)                                                               –       7,047,094
                                                                                                      292,264,409    392,179,510

           Payable After One year
           Long-term bank loans (Note 21.3)                                                            36,000,000             –
                                                                                                       36,000,000             –
           Total                                                                                      328,264,409    392,175,510

           21.1 Short-Term Loans
           At the beginning of the year                                                               364,482,890    281,768,114
           Obtained during the year                                                                   515,768,175    886,988,744
           Repayments during the year                                                              (785,960,177)     (804,273,968)
           At the end of the year                                                                      94,290,888    364,482,890
           Payable within one year                                                                    (94,290,888)   (364,482,890)
           Payable after one year                                                                              –               –


           21.2 Loan From Related Company
           Interest is payable at 1% above the effective interest rate of Singer (Sri Lanka) PLC. The management intends to settle
           the loan within one year from the Balance Sheet date. The aforesaid loan is not secured.




50   Regnis (Lanka) PLC   Annual Report 2009
                                                                                 NOTES TO ThE FINANCIAL STATEMENTS




                                                                                                      2009               2008
                                                                                                       Rs.                Rs.

    21.3 Long-Term Loans
    At the beginning of the year                                                                        –        13,276,385
    Obtained during the year                                                                  60,000,000                   –
    Repayments during the year                                                                          –        (13,276,385)
    At the end of the year                                                                    60,000,000                   –
    Payable within one year                                                                   24,000,000                   –
    Payable within one to two years                                                           24,000,000
    Payable within two to five years                                                          12,000,000                   –


    Long-term loan repayable in 30 equal instalments of Rs. 2 mn per month commencing from January 2010. Interest
    rate applicable would be AWPLR+1.5%.

                                                                                                      2009               2008
                                                                                                       Rs.                Rs.

    21.4 Finance Leases Obligation
    Gross lease obligation                                                                      7,557,870        15,802,817
    Repayments during the year                                                                 (7,557,870)       (8,244,947)
    At the end of the year                                                                             –          7,557,870
    Less: Interest in suspense                                                                         –           (510,776)
    Net lease obligation                                                                               –          7,047,094

    Analysis of Finance Leases Obligations by year of Repayment
     Repayable Within One Year from Year End
    Gross lease obligation                                                                              –          7,557,870
    Less: Interest in suspense                                                                          –           (510,776)
    Net lease obligation                                                                                –          7,047,094

    Corporate Guarantee of Rs. 455.5 mn has been given by Singer (Sri Lanka) PLC to obtain the bank facilities.
                                                                                                      2009               2008
                                                                                                       Rs.                Rs.

22. RETIREmENT bENEFIT ObLIgATIONS
    Present Value of unfunded Gratuity                                                        40,290,096         32,666,262
    Total present value of the obligation                                                     40,290,096         32,666,262
    Provision for retiring gratuity
    Movement in the present value of
      defined benefit obligation
    Balance at the beginning of the year                                                      32,666,262         26,076,000
    Actuarial loss on obligation                                                               2,873,752          1,967,502
    Current service cost                                                                       2,849,641          2,298,000
    Interest cost                                                                              3,919,951          2,623,000
    Benefits paid                                                                             (2,019,510)          (298,240)
    Balance at the end of the year                                                            40,290,096         32,666,262

    The Company maintains a non-contributory defined benefit plan providing for gratuity benefits payable to employees
    which is expressed in terms of final monthly salary and service.


    As at 31st December 2009, the gratuity liability was actuarially valued under the Projected unit Credit (PuC) method
    by a professionally qualified actuary firm Messrs Actuarial Management Consultants (Pvt) Ltd.




                                                                                       Regnis (Lanka) PLC    Annual Report 2009   51
     NOTES TO ThE FINANCIAL STATEMENTS




           The key assumptions used by the actuary include the following:
                                                                                                             2009           2008

           (a) Discount Rate                                                                             11% p.a.       12% p.a.
           (b) Salary Increment Rate                                                                      9% p.a.       10% p.a.
           Assumptions regarding future mortality (Basis)                                                 A67/70         A67/70


           The liability as per Payment of Gratuity Act as at 31st December 2009 was Rs. 41,672,120/-.
           The expense is recognised in the following line item in the income statement.

           Cost of sales


     23. AmOuNT DuE TO RELATED PARTIES
                                                                                                             2009           2008
                                                                                                              Rs.            Rs.

           Singer (Sri Lanka) PLC                                                                     5,241,249      17,990,022
                                                                                                     5,241,249       17,990,022


     24. TRADE AND OThER PAyAbLES
           Trade payables                                                                            99,757,889      38,125,406
           Interest payable                                                                               86,849      1,825,013
           Sundry creditors including accrued expenses                                               21,792,239      31,362,714
           Value Added Tax (VAT) and
            Nation Building Tax (NBT) payable                                                        18,234,380       7,381,286
                                                                                                    139,871,357      78,694,419


           Sundry creditors including accrued expense includes the provision disclosed under Note 24.1.


            24.1 Provisions
                                                                        2009                2009            2009            2008
                                                                   Warranties              Bonus            Total           Total
                                                                          Rs.                 Rs.             Rs.             Rs.

            Balance as at the beginning of the year                 4,885,079      17,731,791        22,616,870      16,280,965
            Provision made during the year                          4,567,885       2,929,840         7,497,725      26,837,601
            utilised during the year                               (4,569,623)    (13,561,631)      (18,131,254)     (20,501,696)
           Balance at the end of the year                           4,883,341       7,100,000        11,983,341      22,616,870


           Warranties: A provision of Rs. 4,883,341/- has been recognised for expected future warranty claims for products sold.
           Bonus: A provision of Rs. 7,100,000/- has been recognised for expected bonus payable for all employees employed as
           at 31st December 2009.


           The Provision for warranties relates mainly to products sold during the years ended 31st December 2009.
           The Provision is based on estimates based on historical warranty data associated with similar products.


     25. DIvIDEND PAyAbLE
                                                                                                             2009           2008
                                                                                                              Rs.            Rs.
            unclaimed dividend                                                                           229,434        229,434




52   Regnis (Lanka) PLC   Annual Report 2009
                                                                                   NOTES TO ThE FINANCIAL STATEMENTS




26. COmmITmENTS AND CONTINgENCIES
   26.1 Finance Commitments
   Document credit are effected for foreign purchases amounting to Rs. 112,921,205/- (2008 - Rs. 27,888,915/-).

   26.2 Contingencies
   The Company cleared a shipment of imported goods during the year 2008 on provision of a bank guarantee
   amounting to Rs. 6,522,083/- to the Director of Customs. The bank guarantee relates to alleged additional duty
   payable on imports which is contested by the Company. The customs inquiry initiated in 2008 is still pending. The
   management is of the opinion that there is no basis that the Company is liable for the additional duty and hence,
   no provision is made in the financial statements.

   26.3 Capital Commitments
   There were no material capital commitments as at the Balance Sheet date.

27. EvENTS OCCuRRINg AFTER ThE bALANCE ShEET DATE
   No circumstances have arisen since the Balance Sheet date, which would require adjustment or disclosure except for
   the following two events:

   The Board of Directors has authorised the final dividend of Rs. 3.00 per ordinary share for the year ended
   31st December 2009, for payment on 24th March 2010.

   The Company has invested Rs. 50 mn in the Stated Capital of Regnis Appliances (Pvt) Ltd., a fully owned subsidiary of
   the Company, which was incorporated as a private Company on 18th January 2010 to manufacture and assembly of
   home appliances under 'Nipayum Sri Lanka 300 Enterprises Programme’ of BOI.


28. RELATED PARTy TRANSACTIONS
   28.1 Identity of Related Party
   The Company has a related party relationship with its Parent Company, affiliate companies, and with its Directors.


   28.2 Transactions with Parent Company
   Following Companies which are Parent companies of Regnis (Lanka) PLC with whom no transactions were entered
   during the year:
   Company                            Relationship
   Singer (Sri Lanka) B.V.            Intermediate Parent
   Singer Asia holding B.V.           Intermediate Parent
   Singer Asia Ltd.                   Intermediate Parent
   Singer Asia holdings N.V.          Intermediate Parent
   Retail holdings N.V.               ultimate Parent


   28.3 Transactions with Affiliate Entities
   (a) The Company has made purchases from the following companies within the International Singer Group and
   affiliates of the Group based on prevailing market prices:
   Name of the Company and Relationship                     Nature of the Transaction                      2009          2008
                                                                                                         Rs. mn        Rs. mn

   Singer Asia Sourcing Ltd.              Affiliate         Purchase of Raw Materials                        –         162.8


   (b) The Company has made sale to the following Company within the International Singer Group and affiliate of the
   Group based on the prevailing market price:
   Name of the Company and Relationship                     Nature of the Transaction                      2009          2008
                                                                                                         Rs. mn        Rs. mn

   Singer (India) Ltd.                    Affiliate         Sale of Finished Goods                           –           0.66


                                                                                        Regnis (Lanka) PLC   Annual Report 2009   53
     NOTES TO ThE FINANCIAL STATEMENTS




           (c) Transactions with the following parties have been disclosed in Note 28.4.

           Company                                  Relationship

           Singer (Sri Lanka) PLC                   Affiliate Company
           Singer Industries (Ceylon) PLC           Affiliate Company


           RELATED PARTy DISCLOSuRES
           28.4 Transactions with key management Personnel
           (i) Loans to Directors
           No loans have been given to the Directors of the Company.

           (ii) key management Personnel Compensation
           Key Management Personnel comprises the Directors of the Company.
           Key Management Personnel compensation comprised:
                                                                                                                   2009               2008
                                                                                                                    Rs.                Rs.

           Short-term employment benefits                                                                    4,523,500           3,779,938
           Post-employement benefit paid                                                                             –                 –

           In addition to their salaries the Company provides non-cash benefits to the key management personnel and
           contributes to a post-employment defined benefit plan on their behalf. Directors emoluments are disclosed in Note 8
           to the financial statements.

           (iii) Other Transactions with key management Personnel
           A number of key management personnel or their related parties, hold positions in other entities that result in them having
           control or significant influence over the financial or operating policies of these entities. These transactions are given below:

           The aggregate value of transactions and outstanding balance relating to Key Management Personnel and entities over
           which they have control or significant influence were as follows:

           Name of the Company and              Name of the Director        Nature of Transaction                      2009           2008
           Relationship                                                                                              Rs. mn         Rs. mn

           Singer (Sri Lanka) PLC               Mr. h D S Amarasuriya       Bank Guarantees on
           - Affiliate                                                      behalf of Regnis                          455.5            428
                                                Mr. G J Walker              Revenue                                   1,342          1,491
                                                Mr. A I Abayasekara         Sales Tax                                   343            331
                                                (Resigned on 04.07.2008)    Non-trade settlement                         59            110
                                                Mr. V G K Vidyaratne        Funds received for sales                 (1,632)        (1,806)
                                                Dr. G C B Wijeyesinghe      Expenses incurred                           (30)           (24)
                                                Mr. h A Pieris              Interest expense                            (16)            (2)
                                                Dr. Saman Kelegama          Loan obtained                                 130            –



           Singer Industries (Ceylon) PLC       Mr. h D S Amarasuriya       Sale of supply material                         1          3.8
           - Affiliate                          Dr. G C B Wijeyesinghe      Settlement of dues                             (1)        (3.8)
                                                Mr. G J Walker
                                                Mr. V G K Vidyaratne
                                                Mr. h A Pieris

           National Development Bank PLC        Mr. h D S Amarasuriya       Long-term loan balance                         60          –
                                                Dr. G C B Wijeyesinghe      Short-term loan balance                        15          70

           Reality Lanka Ltd.                   Mr. h D S Amarasuriya       Investment                                      9              9
           - Affiliate                          Mr. V G K Vidyaratne
                                                Mr. G J Walker
                                                Mr. h A Pieris


54   Regnis (Lanka) PLC   Annual Report 2009
    TEN yEAR AT A gLANCE

Year ended 31st December
                                        2009       2008       2007        2006         2005       2004       2003       2002         2001       2000
                                                                                   Restated                                      Restated
                                   Rs. '000     Rs. '000    Rs. '000    Rs. '000    Rs. '000   Rs. '000   Rs. '000   Rs. '000     Rs. '000   Rs. '000

Revenue
Turnover - Net                    1,346,241 1,498,647 1,423,141 1,282,352          952,162     743,238    558,013    415,204     402,906     452,592
Profit/(Loss) before taxation       75,879       60,222     76,600      (93,542)   (58,604)    (21,515)   122,402     73,374      44,351      32,932
Taxation                           (28,010)     (18,969)    (22,952)    15,661      21,340     (12,236)    (8,095)    (9,051)      (8,637)    (9,349)
Profit for the year                 47,869       41,253     53,648      (77,882)   (37,265)    (33,751)   114,307     64,323      35,714      23,583
Property, plant & equipment        323,096      339,489    318,243     336,754     182,796     103,464    104,417     95,588      78,128      80,724
Investment in Associates                  –         –           –           –       56,992      70,973    126,370     64,767      28,478      15,000

Current Assets                     478,545      424,474    413,015     475,555     490,820     644,907    383,302    344,347     260,654     236,215
Current Liabilities                437,606      489,093    521,325     627,603     616,161     480,892    279,169    277,610     202,680     186,092
Net Current Assets                  40,939      (64,619)   (108,310)   (152,048) (125,341)     164,015    104,133     66,737      57,974      50,123

Long-Term Loans                     60,000          –         7,054     27,067      50,983      53,617     12,826     19,050      10,183      21,422
Share Capital & Reserves
Stated Capital                     100,123      100,123    100,123     100,123      39,760      39,760     39,760     39,760      39,760      39,760
Capital Reserves                   164,507      164,507    129,257     129,257          –          –          –          –            –          –
Revenue Reserves                    74,875       39,079     12,313      (41,335)    43,040     217,567    255,393    146,519      94,420      67,643
SHAREHOLDERS' FUNDS                339,506      303,710    241,693     188,045      82,800     257,327    295,153    186,279     134,180     107,403

Earnings/(Loss) per Share (Rs.)          9.91      8.54      11.11       (16.33)     (10.29)     (9.32)     42.08      23.68       13.15        8.68
Net Asset per Share
 at year end (Rs.)                      70.30     62.89      50.05       38.94       22.86       71.05     108.66      68.58       49.40       39.54
Return on Average
 Net Asset (%)                          14.88     15.13      24.97       (57.51)     (21.91)    (12.22)     47.49      40.14       29.57       23.50

Dividends
Dividends (Rs.)*                    14,487       12,072     14,487          –        6,492       5,432      9,007     12,224      12,224       9,507
Dividend Cover*                          3.30      3.41        3.70         –         (5.74)     (6.21)     12.69       5.26         2.92       2.48
Dividend per Share (Rs.)*                3.00      2.50        3.00         –          1.79       1.50       3.32       4.50         4.50       3.50

Others
Annual Sales Growth (%)             (10.16)        5.31      10.98       34.68       28.11       33.19      34.39       3.05       (10.98)     43.70
Inflation Rate (%)                        4.8      14.4        18.8      13.70       12.60        6.60       6.40       9.60       14.20        6.20
Current Ratio                            1.09      0.87        0.79        0.76        0.80       1.34       1.37       1.24         1.29       1.27
Investment in Fixed
 Assets (Rs. ’000)                      2,460     5,038      1,705      40,719      30,607      12,388     19,031     30,031       5,519      20,783
Price Earnings Ratio (Times)             6.73      5.03        3.69       (2.33)      (6.15)     (6.87)      1.90       2.93         2.87       3.02
Market Value of Share -
 31st December                          66.75     43.00      41.00       38.00       63.25       64.00      80.00      69.50       37.75       26.25

* Includes authorised final dividends




                                                                                                            Regnis (Lanka) PLC    Annual Report 2009    55
     INvESTOR INFORmATION

     1.    gENERAL
           Value - Ordinary Shares                                            Rs. 100,123,470/-
           Number of Shares - Ordinary Shares                                 4,829,084
           Voting Rights                                                      One Vote per Ordinary Share

     2.    STOCk ExChANgE LISTINg
           The issued Ordinary Shares of Regnis (Lanka) PLC are listed with the Colombo Stock Exchange of Sri Lanka.

     3.    DISTRIbuTION OF ShAREhOLDINgS - 31ST DECEmbER

                                                                  No. of                   2009                  %           No. of                   2008               %
           Category                                         Shareholders         Total Holdings                        Shareholders          Total holdings

           Less than 1,001 shares                                    947                  255,798           5.30                 922             247,420            5.13
           1,001          -        10,000                            143                  363,770           7.52                 156             370,848            7.67
           10,001         -      100,000                              16                  504,952          10.47                  17             509,252          10.55
           100,001 - 1,000,000                                        –                         –            –                   –                      –            –
           Over 1,000,000 shares                                          2              3,704,564         76.71                     2         3,701,564          76.65
                                                                    1,108                4,829,084      100.00                 1,097           4,829,084         100.00


                                                              2009                                       2009                                    Percentage
                                                         No. of Holders                             No. of Holdings                            No. of holdings
           Category                                Non-resident           Resident          Non-resident              Resident           Non-resident            Resident

           Less than 1,001 shares                               8               939                 1,593             254,205                   0.03                5.27
           1,001          -        10,000                       3               140                 5,533             358,237                   0.11                7.41
           10,001         -      100,000                    –                    16                    –              504,952                     –               10.47
           100,001 - 1,000,000                              –                    –                     –                   –                      –                   –
           Over 1,000,000 shares                                1                    1        2,581,158              1,123,406                53.45               23.26
                                                            12                1,096           2,588,284              2,240,800                53.59               46.41


     4.    ShARE INFORmATION
                                                                                                                                               2009                 2008
                                                                                                                                                Rs.                  Rs.

           Closing Price for the year ended 31.12.2009 and 31.12.2008                                                                         66.75               43.00
           highest Value per Share during the year                                                                                            74.00               69.00
           Lowest Value per Share during the year                                                                                             41.75               38.00


           Share Trading for the year ended 31.12.2009 and 31.12.2008
                                                                                                                     No. of                    No. of   Value of shares
                                                                                                              Transactions                    shares           (Traded)
                                                                                                                   (Trades)                  (Trades)               Rs.

           2008                                                                                                          237               177,200            9,375,750
           2009                                                                                                          177               112,800            6,373,200




56   Regnis (Lanka) PLC       Annual Report 2009
INVESTOR INFORMATION




5.   DIvIDEND
     The Board of Directors authorised the Payment of a Final Dividend of Rs. 3.00 per share on 08th March 2010 for the
     year ended 31st December 2009, to be paid on 24th March 2010.


6.   DIRECTORS' ShAREhOLDINgS AS AT 31ST DECEmbER 2009
     Name of the Director                                 No. of Shares

     Mr. V G K Vidyaratne                                      51,075
     Mr. h D S Amarasuriya                                     27,377
     Dr. G C B Wijeyesinghe                                         Nil
     Mr. G J Walker                                                 Nil
     Mr. h A Pieris
       (Alternate Director to Mr. G J Walker)                       Nil
     Dr. Saman Kelegama                                             Nil


7.   ANALySIS OF ShARES
                                                             2009                                            2008
     Class of Member                             No. of         No. of                    %     No. of           No. of               %
                                                Holders         Shares                         holders           Shares

     Individual                                  1,057     2,101,444              43.52         1,036       2,087,007          43.22
     Company                                        51     2,727,640              56.48               61    2,742,077          56.78
     Total                                       1,108     4,829,084             100.00         1,097       4,829,084         100.00
     Shares held by Public                       1,103     1,003,273              20.78         1,092       1,006,273          20.84


8.   TwENTy LARgEST ShAREhOLDERS
             Name                                                                  2009          %                 2008               %
                                                                          No. of Shares                    No. of Shares

      1.     Singer (Sri Lanka) B.V.                                        2,581,158         53.45         2,581,158          53.45
      2.     Dr. T Senthilverl                                              1,123,406         23.26         1,120,406          23.20
      3.     Mr. R Senathirajah                                                90,000          1.86             63,000          1.30
      4.     union Investments Ltd.                                            53,400          1.11             53,400          1.11
      5.     Mr. V G K Vidyaratne                                              51,075          1.06             51,075          1.06
      6.     Singer (Sri Lanka) PLC                                            42,795          0.89             42,795          0.89
      7.     Mr. S Srikanthan                                                  40,000          0.83             40,000          0.83
      8.     Mr. A J Rumy                                                      33,000          0.68             33,000          0.68
      9.     Mrs. S R Perera                                                   29,141          0.60             29,141          0.60
     10.     Dr. A C Visvalingam                                               27,721          0.57             27,721          0.57
     11.     Mr. h D S Amarasuriya                                             27,377          0.57             27,377          0.57
     12.     Mrs. C G J Peiris                                                 21,888          0.45             21,888          0.45
     13.     Mr. h S B Fernando                                                18,872          0.39             18,872          0.39
     14.     Mr. V Baskerasundaram                                             15,550          0.32             15,350          0.32
     15.     Mr. P Arunachalam                                                 14,800          0.31             14,800          0.31
     16.     Mr. K G G Perera                                                  13,333          0.28             13,333          0.28
     17.     Mr. h A Peiris                                                    13,333          0.28             13,333          0.28
     18.     Mr. A h Munasinghe                                                12,667          0.26             12,667          0.26
     19.     Mr. Z G Carimjee                                                  10,000          0.21             10,000          0.21
     20.     Mr. D u hewawasam                                                  9,066          0.19                 –             –
     21.     Mr. S M P Sisiradasa                                                   –          0.00             31,500          0.65
             Total                                                          4,228,582         87.57         4,220,816          87.41




                                                                                               Regnis (Lanka) PLC    Annual Report 2009   57
     gRAPhICAL REvIEw -
     INvESTOR INFORmATION




58   Regnis (Lanka) PLC   Annual Report 2009
Regnis (Lanka) PLC
Company Registration No. PQ 191


NOTICE OF
ANNuAL gENERAL mEETINg
NOTICE IS hEREBy GIVEN ThAT ThE TWENTy-ThIRD ANNuAL GENERAL MEETING OF REGNIS (LANKA) PLC, will be
held at the Registered Office of Singer (Sri Lanka) PLC at No. 320, Dr. Colvin R De Silva Mawatha (union Place),
Colombo 2 on Wednesday, 31st March 2010 at 11.45 a.m.


For the following purposes:
1. To receive, consider and adopt the Report of the Directors and the Audited Financial Statements for the year ended
   31st December 2009 with the Report of the Auditors thereon.


2. To resolve declaring that the age limit stipulated in Section 210 of the Companies Act No. 7 of 2007 shall not apply to
   Dr. G C B Wijeyesinghe who has attained the retirement age stipulated in Section 210 of the said Act and who has attained
   the age of 76 years on 19th February 2010 and that his re-appointment for another one year in terms of Section 211 of the
   said Act is approved and to re-elect him as a Director of the Company in terms of the said Section 211.


3. To re-elect Mr. G J Walker who retires by rotation and who being eligible is being recommended for re-election.


4. To authorise Directors to determine contributions to Charities.


5. To reappoint Messrs KPMG Ford, Rhodes, Thornton & Co. as the Auditors of the Company for the ensuing year and to
   authorise the Directors to determine their remuneration.


By Order of the Board



A C M Irzan, FCMA (uK)
Secretary

Colombo
8th March 2010




Note:
1. The Transfer Books of the Company will be kept open.
2. A member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote instead of him/her and
   such Proxy need not be a member of the Company. A Form of Proxy is enclosed for this purpose.
   The completed Form of Proxy should be deposited at the Registered Office of the Company not less than 48 hours before the
   time fixed for the Meeting.




                                                                                            Regnis (Lanka) PLC   Annual Report 2009   59
     Regnis (Lanka) PLC
     Company Registration No. PQ 191


     NOTICE OF ExTRAORDINARy
     gENERAL mEETINg
     Notice is hereby given that an Extraordinary General Meeting of the Shareholders of REGNIS (LANKA) PLC will be held on
     Wednesday, 31st March 2010 following the Annual General Meeting of the Company, at the Registered Office of Singer
     (Sri Lanka) PLC at 320, Dr. Colvin R de Silva Mawatha (union Place), Colombo 2, for the purpose of considering and if
     thought fit, passing the following resolution as a Special Resolution:


     SPECIAL RESOLuTION TO AmEND ARTICLES OF ASSOCIATION
          That the Articles of Association of this Company be amended by adding a new sub-Article (10) to the Article 8 reading
          as follows:

          "(10) The Company shall not register more than three persons as Joint holders (including the principal holder) of any
          shares except in the case of executors, administrators or heirs of a deceased shareholder".


     By Order of the Board



     A C M Irzan, FCMA (uK)
     Secretary
     Colombo
     8th March 2010




     Note:
     1. The Transfer Books of the Company will be kept open.
     2. A member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote instead of him/her and
         such Proxy need not be a member of the Company. A Form of Proxy is enclosed for this purpose. The completed Form of Proxy
         should be deposited at the Registered Office of the Company not less than 48 hours before the time fixed for the meeting




60   Regnis (Lanka) PLC   Annual Report 2009
Regnis (Lanka) PLC
Company Registration No. PQ 191


FORm OF PROxy
ANNuAL gENERAL mEETINg
I/We ...................................................................................................................................................................................................

of .......................................................................................................................................................................................................

being a member/members of Regnis (Lanka) PLC, hereby appoint:


Mr. hemaka Devapriya Senarath Amarasuriya                                                           (or failing him)
Dr. Gamini Christopher Bernard Wijeyesinghe                                                         (or failing him)
Mr. Vidyaratne Ganithaguruge Kulatunge Vidyaratne                                                   (or failing him)
Dr. Saman Kelegama                                                                                  (or failing him)

............................................................................................................................................................................................................

of .......................................................................................................................................................................................................


as my/our proxy to represent me/us on my/our behalf at the Annual General Meeting of the Company to be held on
Wednesday, 31st March 2010 at 11.45 a.m. at the Registered Office of Singer (Sri Lanka) PLC, No. 320, Dr. Colvin R De Silva
Mawatha (union Place), Colombo 2, and at any adjournment thereof and at every poll, which may be taken in consequence
thereof. I/We the undersigned hereby authorise my/our proxy to vote on my/our behalf in accordance with the preferences
indicated below:


                                                                                                                                                                            For               Against
1. To receive, consider and adopt the Report of the Directors and the Audited Financial
     Statements for the year ended 31st December 2009 with the Report of the Auditors thereon.

2. To resolve that Section 210 of the Companies Act No. 7 of 2007 shall not apply to
     Dr. G C B Wijeyesinghe and to re-elect him as a Director.

3.    To re-elect Mr. G J Walker who retires by rotation.

4.    To authorise Directors to determine contributions to Charities.

5. To reappoint Messrs KPMG Ford, Rhodes, Thornton & Co. as the Auditors of the Company
     for the ensuing year and to authorise the Directors to determine their remuneration.


As witness my/our hand this ..................................................... day of .................................................. Two Thousand and Ten.




                                                                                                                                                          .................................................
                                                                                                                                                                          Signature




                                                                                                                                                 Regnis (Lanka) PLC             Annual Report 2009             61
     FORM OF PROXy - ANNuAL GENERAL MEETING




     Instructions for Completion of Form of Proxy
     	   If a proxy other than the names mentioned is preferred, delete the names printed and add the name of the proxy
          preferred and initial the alteration.


     	   Please indicate how your proxy should vote by marking an ‘X’ in the cage provided for each resolution. If no indication
          is given, or if there is, in the view of the Proxyholder, any doubt (be reason of the manner in which the instructions
          contained in the Proxy have been completed) as to the way in which the Proxyholder should vote, the Proxyholder in
          his/her discretion may vote as he/she thinks fit.


     	   A Company/Corporation should execute the proxy under its seal in the manner authorised by its Articles of Association
          or Statute creating it or under the hand of an Officer or Attorney duly authorised.


     	   If the Form of Proxy is signed by an Attorney, a certified copy (certified by a Notary Public) of the relative Power of
          Attorney should also accompany the completed Form of Proxy, if it has not already been registered with the Company
          and the original of the Power of Attorney should be produced for inspection at the meeting if required.


     	   unless the completed Form of Proxy is deposited at the Registered Office of the Company at No. 52, Ferry Road, off
          Borupana Road, Ratmalana, Sri Lanka, not less than 48 hours before the time of the meeting the same will not be valid.




62   Regnis (Lanka) PLC   Annual Report 2009
Regnis (Lanka) PLC
Company Registration No. PQ 191


FORm OF PROxy
ExTRAORDINARy gENERAL mEETINg
I/We ...................................................................................................................................................................................................

of .......................................................................................................................................................................................................

being a member/members of Regnis (Lanka) PLC, hereby appoint:


Mr. hemaka Devapriya Senarath Amarasuriya                                                           (or failing him)
Dr. Gamini Christopher Bernard Wijeyesinghe                                                         (or failing him)
Mr. Vidyaratne Ganithaguruge Kulatunge Vidyaratne                                                   (or failing him)
Dr. Saman Kelegama                                                                                  (or failing him)

............................................................................................................................................................................................................

of .......................................................................................................................................................................................................


as my/our proxy to represent me/us on my/our behalf at the Extraordinary General Meeting of the Company to be held
on Wednesday, 31st March 2010 following the Annual General Meeting of the Company, at the Registered Office of Singer
(Sri Lanka) PLC, No. 320, Dr. Colvin R De Silva Mawatha (union Place), Colombo 2, and at any adjournment thereof and at
every poll, which may be taken in consequence thereof. I/We the undersigned hereby authorise my/our proxy to vote on
my/our behalf in accordance with the preference indicated below:


                                                                                                                                                                            For               Against
1. That the Articles of Association of this Company be amended by adding a new sub-Article (10)
     to the Article 8 reading as follows:

     "(10) The Company shall not register more than three persons as Joint holders (including the
     principal holder) of any shares except in the case of executors, administrators or heirs of a
     deceased shareholder".




As witness my/our hand this ..................................................... day of .................................................. Two Thousand and Ten.




                                                                                                                                                          .................................................
                                                                                                                                                                          Signature




                                                                                                                                                 Regnis (Lanka) PLC             Annual Report 2009             63
     FORM OF PROXy - EXTRAORDINARy GENERAL MEETING




     Instructions for Completion of Form of Proxy
     	   If a proxy other than the names mentioned is preferred, delete the names printed and add the name of the proxy
          preferred and initial the alteration.


     	   Please indicate how your proxy should vote by marking an ‘X’ in the cage provided for each resolution. If no indication
          is given, or if there is, in the view of the Proxyholder, any doubt (be reason of the manner in which the instructions
          contained in the Proxy have been completed) as to the way in which the Proxyholder should vote, the Proxyholder in
          his/her discretion may vote as he/she thinks fit.


     	   A Company/Corporation should execute the proxy under its seal in the manner authorised by its Articles of Association
          or Statute creating it or under the hand of an Officer or Attorney duly authorised.


     	   If the Form of Proxy is signed by an Attorney, a certified copy (certified by a Notary Public) of the relative Power of
          Attorney should also accompany the completed Form of Proxy, if it has not already been registered with the Company
          and the original of the Power of Attorney should be produced for inspection at the meeting if required.


     	   unless the completed Form of Proxy is deposited at the Registered Office of the Company at No. 52, Ferry Road, off
          Borupana Road, Ratmalana, Sri Lanka, not less than 48 hours before the time of the meeting the same will not be valid.




64   Regnis (Lanka) PLC   Annual Report 2009
corporate
inforMation
Directorate                                                Registered Office
H D S Amarasuriya - Chairman/Managing Director             No. 52, Ferry Road, off Borupana Road
G C B Wijeyesinghe                                         Ratmalana
Saman Kelegama                                             Sri Lanka
V G K Vidyaratne
G J Walker - Alternate H A Pieris                          Registrars
                                                           Business Intelligence Ltd.
Company Secretary                                          No. 8, Tickell Road
A C M Irzan, FCMA (UK)                                     Colombo 8

Management Team                                            Auditors
V G K Vidyaratne - Factory Director/                       KPMG Ford, Rhodes, Thornton & Co.
  General Manager - Factories                              Chartered Accountants
K D Kospelawatta - Operations Manager                      32A, Sir Mohamed Macan Markar Mawatha,
A C M Irzan - Group Factory Controller                     Colombo 3.
K G G Perera - Commercial Manager
Chaminda Ramasundara - Manager - Human Resources           Banks
C S B Wijesundara - Senior Accountant                      Commercial Bank of Ceylon PLC
M Ranasinghe - Materials Manager                           NDB Bank PLC
E N P Soysa - Production Manager                           Hatton National Bank PLC
J Jayasundara - Manager - Quality Assurance & Projects     Standard Chartered Bank
Apoorva Amarasinghe - Stores Manager                       Sampath Bank
W M Pradeep Kumara - Manager -                             Seylan Bank PLC
  Maintenance & Injection Moulding                         People’s Bank, Ratmalana
Aruna Sri Kendasinghe - IT Executive                       DFCC Vardhana Bank
D M Wickramasinghe - Accountant
Ms. Savithri Fernando - Confidential Secretary             Legal Advisors
                                                           Murugesu & Neelakandan
Status of Company                                          Attorneys-at-Law
A Public Limited Liability Company quoted in the Colombo   M & N Building (5th Floor)
Stock Exchange. Incorporated on 3rd June 1987 under the    No. 2, Deal Place
Companies Act No. 17 of 1982 and re-registered under the   Colombo 3
Companies Act No. 7 of 2007.

Company Registration Number
PQ 191

				
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