Bairaha Annual Report 2013-14

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ANNUAL REPORT
2013/14
Contents
About Bairaha
Our Vision
Our Mission
Bairaha Farms PLC, being the

pioneer chicken processor
in the country for nearly four
decades, is the household
name for chicken in Sri Lanka.
The Company is committed to
develop innovative products
for its customers convenience,
ensuring food safety, whilst
enhancing their nutritional value.
To achieve complete poultry

integration synergies,
ultimately gaining export
market competitiveness while
promoting good environmental
and sustainable business
practices.
While maintaining a sustainable

organisation, providing and
supplying poultry products at
competitive prices by utilising
efficient processes, advanced
technology, economies of
scale and vertical integration
to maintain competitive prices
with a view to expanding
customer base, both locally and
internationally.
02
Financial Highlights
06
Chairmans Message
08
35
Report of the Remuneration

Committee
51
Statement of Changes in
Equity
Managing Director/Chief
Executive Officers Review
36
Risk Management
52
Cash Flow Statement
38
Our Journey
53
10
Board of Directors
42
The Bairaha Family
Notes to the Financial

Statements
14
Management Discussion
and Analysis
43
Financial Reports
93
Investor Information
44
Statement of Directors
Responsibilities
95
Value Added Statement
96
Five Year Summary
Annual Report of the Board

of Directors on the Affairs of
the Company
97
Notice of Meeting
21
Financial Review
24
Products Portfolio
27
Sustainability Report
30
Corporate Governance
34
Report of the Audit

Committee
45
48
Independent Auditors Report
49
Statement of Financial
Position
50
Statement of Comprehensive
Income
Enclosed Form of Proxy

Inner Back Cover Corporate
Information
The
Health
Pack
This year we pay tribute to our No. 1 product line poultry. Were
giving it its rightful place in the sun. In thousands of homes across
the country, that dish of chicken is most often taken for granted.
Apart from their abundant availability as rich and economical sources
of vital protein, poultry products really are so much more!
The prime quality of the chicken we place in the market significantly
contribute to the growth, health and well-being of the people of
Sri Lanka.
Enriching body and mind from the heart to the brain, the
musculoskeletal system, paediatric growth and development and
more, poultry products are one of the worlds best sources of
nourishment.
It is why Bairaha claims its product portfolio to be - The Health Pack!
The information in the thematic pages were elicited from;

http://www.nationalchickencouncil.org
Bairaha Farms PLC

1
Annual Report 2013/14
{ }
Group
2014
2013
3,054,158
2,917,526
Group Profit before Finance Cost (Rs. 000)
170,356
186,662
Group Profit before Taxation including Profit from Associate Companies (Rs. 000)
159,114
183,862
Group Taxation (Charge)/Reversal (Rs. 000)
(21,272)
(22,381)
Group Total Comprehensive Income (Rs. 000)
128,307
161,420
Total Value Added (Rs. 000)
912,649
849,261
Total Revenue to Government (Rs. 000)
426,787
401,184
Shareholders Funds (Rs. 000)
1,818,864
1,715,570
Retained Earnings (Rs. 000)
1,322,732
1,208,890
Earnings per Share - Basic (Rs.)
8.62
10.09
Market Price of Share as at 31st March (Rs.)
147
150
Return on Equity (%)
7.58
9.41
Group Revenue (Rs. 000)
{2 }
Bairaha Farms PLC
1,819 Mn
3,054 Mn
128 Mn
Shareholders Funds
Revenue
(Rs. Mn)
(Rs. Mn)
Total Comprehensive
Income
(Rs. Mn)
{3 }
{4 }
Bairaha Farms PLC
Desamanya Prof. M.T.A. Furkhan

Chairman
{5 }
Yakooth Naleem
Managing Director/Chief Executive Officer
Chairmans Message
Bairaha plans to have a total

vertically integrated poultry
production operation
It is my privilege and pleasure to present to you the Annual Report

and financial statements of Bairaha Farms PLC for the year ended
31st March 2014.
impacted the financial performance of industry players with the prices

of both broiler and layer day-old chicks declining steeply, stemming
from industry oversupply coupled with a decline in sales volumes.
Asia Leads the Way
Commendable Performance
The rate of industry growth of chicken meat production has slowed

significantly in recent years. As per the Food and Agriculture
Organisation (FAO), the global poultry meat output in 2013 is
estimated to be 106.4 Mn tonnes. The production growth has slowed
annually since 2010 from approximately 4.5% to 1.8% in 2013. On
the demand side, the market for poultry meat was represented by
rising incomes from the growth in developing countries and high
nominal output prices. On the supply side, the spiraling costs of feed
and energy related expenses curtailed growth of the industry.
Our results reflect the depressed demand conditions that prevailed

in the industry during the year. As the margins on day-old chicks and
chicken were significantly low, we focused more on growing the sales
volumes of branded chicken. However, our revenue growth stagnated
during the financial year under review as the purchasing power of
low-and middle-income households dwindled due to inflation and an
increase in the overall cost of living. The margins narrowed further as
a result of increased total production cost.
Although, global growth of chicken meat production slowed down

during the year, Asia has maintained its share of the total. In the 13
years since year 2000, Asias chicken meat industry has expanded by
4.3% annually compared with a global figure of less than 4%.
This upward trend has continued in 2013 with chicken meat
production in Asia reaching 31 Mn tonnes. The output forecast for
2014 is anticipated to exceed this, maintaining its 33% share of the
forecast global total.
Accordingly, the Group turnover for the year ended 31st March 2014
amounted to Rs. 3.05 Bn, while Group total comprehensive income
amounted to Rs. 128.31 Mn.
Our associate, G-P Farms (Lanka) Ltd., performed well, besides
continuing to provide the Group and the market with quality broiler
parent breeder chicks, with certain specific outstanding traits needed
by the industry.
Promising Future
On the local front, there was no significant growth in demand for
poultry products in Sri Lanka. The industry was characterised by
many months of glut and excess production, as a result of depressed
demand for chicken meat. This was largely due to drop in purchasing
power among a large segment of the population. The quality of
poultry feed available in the market deteriorated due to high prices
that prevailed in the market for raw materials. These factors heavily
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Bairaha Farms PLC
The demand for poultry is expected to continue growing in

developing economies, reflecting population increases, improved
disposable incomes and consumer taste preferences. FAO cites that
developing countries will hold over 31.8% of the share of the global
poultry production. The demand for poultry products in Sri Lanka
is envisaged to grow in tandem with the expected rise in per capita
income. Therefore, we will further consolidate our activities to
improve productivity and operational efficiency. We will also expand
our broiler farms to benefit from the integration of chicks with good
growth potential.
Chairmans Message
At present, Sri Lanka exports parent breeder chicks, table eggs and
hatching eggs. However, there is capacity to export chicken meat
as the current production exceeds the local demand and there is a
potential demand for chicken meat in the Middle Eastern countries.
Therefore, if the Sri Lankan Government provides the necessary
support, the poultry producers could expand their export potential
and earn the much needed foreign exchange for the country in the
ensuing years.
In order to address the challenges posed by poultry feed, Bairaha
Farms PLC (BFP) has decided to collaborate in a new project
to set up a large scale, state-of-the-art commercial animal feed
manufacturing factory together with raw materials procurement and
modern post-harvest storage facilities. The joint-venture known as
Fortune Agro Industries (Pvt) Ltd. (FAI) is promoted by another poultry
producer namely, Farms Pride (Pvt) Ltd., which is a partner of Bairaha
Farms PLC in a Company named, Fortune G-P Farms (Lanka) Ltd.
FAI has already signed the agreement with the Board of Investment
wherein the 7 years Tax Holiday, subject to implementation of the
project within 24 months, is mentioned. Furthermore FAI is entitled to
import/purchase locally project related capital items free of Customs
Duty during the stipulated project implementation period.
The total estimated cost of the new joint-venture FAI is around
Rs. 1.65 Bn, which includes Rs. 650 Mn for working capital. Bairaha
Farms PLC intends to take up around 45% share of the equity in this
new venture, which may take around 15-20 months to commence
commercial operations. The investment of Bairaha Farms in the jointventure is subject to the Company obtaining the necessary funds
from financial institutions. Another 45% of the equity capital will be
taken up by the promoters, namely Farms Pride (Pvt) Ltd., and the
remaining balance 10% of the equity capital is to be offered to a
partner who could add value to the new joint-venture. However, in
the event a suitable party is not identified to offer the remaining 10%
of the shares, then it would be taken up equally by the two major
shareholders, namely Bairaha Farms PLC and Farms Pride (Pvt) Ltd.
Fortune G-P Farms (Lanka) Ltd. enjoys nearly 50% market share
of the broiler breeder parent chicks requirements of Sri Lanka. In
other words, nearly 50% of final broiler chicken meat produced and
marketed in Sri Lanka originates from the grandparent farm and
hatchery of Fortune G-P Farms (Lanka) Ltd., in the form of broiler
breeder parent chicks from which broiler chicks are produced by a
number of breeder farms and hatchery operators.
Once the above-mentioned Feed mill is in commercial operation,
Bairaha Farms PLC would have a total vertically integrated poultry
production operation.
Finally, as we end another commendable year, I extend my
sincere appreciation to the Board for their unstinting support and
co-operation. I am deeply grateful to the Senior Management and
staff for their dedication, talents and team work. I especially thank
the Chief Executive Officer, Mr. Yakooth Naleem and the Executive
Director, Mr. Riyal Yakoob for their continued leadership and
commitment. My gratitude goes out to the customers, bankers and
shareholders for the loyalty and confidence placed in us.
(Sgd.)
Chairman
12th May 2014
{7 }
Managing Director/
Chief Executive Officers Review
Bairaha is focusing in expanding

the branded chicken operation
Expansion in the Poultry Industry

The production capacity of the poultry industry in Sri Lanka expanded
during the year 2013. Egg production increased by 33% year on
year to 1,942 Mn while chicken production expanded by 5.2%
to 144,540 metric tons. This increase is attributed to the several
measures introduced by the Government to boost broiler production.
These include the increase in the price ceiling on branded chicken,
tax concessions on capital equipment imports for production of
chicken, promotion of investment in grandparent bird production and
encouraging local inputs for feed production.
However, the demand for chicken waned during the financial year
due to a drop in purchasing power of average consumers. Stemming
from the increased production which led to an oversupply coupled
with the decline in demand, price of chicken dropped during the year.
However, the price of eggs increased from Rs. 11 per egg in 2012 to
Rs. 14 per egg in 2013, reflecting the increase in cost of production.
Operating Amid Challenges

Due to the volatility that prevailed in the poultry market, we did not
embark on major strategic investments during the year. Instead,
we focused on improving productivity and efficiency and enhancing
facilities at our operational and production units. We also actively
sought new markets both locally and internationally. We strengthened
our product range by introducing a budget pack of chicken sausages
at the lowest price in the market. Our aim was to make our products
available and affordable to a wider segment of the population.
{8 }
Bairaha Farms PLC
Upgrading facilities and infrastructure of our operations continued to

be a key focus area. The establishment of our state-of-the-art broiler
farm has placed the Group in a strong position to benefit from any
major upsurge in the market for poultry products that are bound to
open up in the future.
Product quality and enhanced processes are of utmost importance
to us. Therefore, we have identified that capital investment is a
crucial aspect of our organisation which has remained an area of
priority. This has also enabled us to maintain our premier position
as a technologically advanced company in the poultry industry in
Sri Lanka.
Obtaining a credit rating by RAM Ratings Lanka in the financial year
was an important milestone for the Company and a First in the
poultry industry in Sri Lanka.
Financial Performance
Groups total comprehensive income amounted to Rs. 128.31 Mn
during the year, which declined by 20% over the previous year.
Although, the financial performance was encouraging in the first half
of the year, the same trend did not continue in the second half. The
demand for poultry products surged from end February 2014 due
to a shortage of chicken in the market and due to restrictions on
movement and sale of beef, pork and mutton on account of reported
foot and mouth disease outbreak.
Feed accounts for approximately 65% of cost of producing chicken.
Hence the substantial increase in global raw material prices affected
our gross margins during the year through their impact on feed
quality. Further, the dwindling of purchasing power of low and
middle income households due to inflation affected our revenue
growth as well.
Managing Director/
Chief Executive Officers Review
The share price of Bairaha Farms PLC remained somewhat stable

throughout the year.
Looking Ahead
Going forward, we envisage a surge in demand for poultry products
with the expected increase in per capita income of middle and low
income earners and the expected increase in tourist arrivals in
the region.
We will upgrade our remaining breeder farms in the upcoming
years and introduce if feasible renewable energy to production and
operations. Automation of production processes will be a key area
which will improve production processes and productivity.
From an operations angle, we will continue to expand our integration
and broiler farm operations to minimise the volatility associated with
marketing day-old chicks especially to farmers in the unorganised
sector.
Appreciation
As we look forward for a promising future, I would like to extend my
gratitude to the Chairman, the Executive Directors and Non-Executive
Directors for their leadership and guidance. My appreciation
goes out to the management team and staff of Bairaha Group for
their dedication, commitment and team work. I acknowledge with
gratitude, the loyal patronage of our customers and the shareholders
and for the confidence placed in us. My appreciation is extended
to the Government departments, distributors, contract growers and
banks for their continued support.
(Sgd.)
Yakooth Naleem
Managing Director/Chief Executive Officer
12th May 2014
The Government has announced incentives for export of poultry

products in last years Budget. Although, this proposal has not yet
been implemented, we will continue to explore export opportunities
with a view to benefiting from proposed Government incentives
for export.
{9 }
Board of Directors
Desamanya Charitha P. de Silva
Yakooth Naleem
Riyal Yakoob
{10 }
Kamil Naleem
Deshabandu Nowfel Saly Jabir
Ilyas Naleem
Mubarak Naleem
Board of Directors

Desamanya Prof. M.T.A. Furkhan is the Founder of the Confifi Group
of Companies who has held the position as Chairman of all the
companies in the Group from the very inception in 1969.
He holds the degrees of FCMA (UK), CGMA, J.Dip.MA, FCIS
(UK), FCPA (Aust.) and FCCS (SL). He has been elected twice as
President of CIMA Sri Lanka, President, CIMA New South Wales,
Australia, Institute of Chartered Corporate Secretaries, Institute
of Management, Rotary Club of Colombo North and a number of
other institutions. He has been recognised and awarded the CIMA
INSTITUTE PLAQUE, CIMA CITATION and the Institute of Chartered
Secretaries UK CITATION.
He was awarded CIMA Business Leader Award in the year 2003,
Entrepreneur of the year 1994 - Second Place in the Western
Province by the FCCISL and was given the 2008 Tourism Legend
Award by H.E. The President of Sri Lanka.
In addition to his business interests, Prof. Furkhan has maintained
regular and long-standing interest in the academia. While being a
regular Lecturer in Accountancy and Management subjects, he has
held the position of Professor of Management Accounting of the
University of Sri Jayewardenepura, Sri Lanka and Principal of
Zahira College, Colombo.
Prof. Furkhan has held office in various professional bodies,
Government Institutions, State Corporations and Private Sector
Business Associations, including the Chamber of Commerce,
Federation of Chambers of Commerce and Industry and as President
of the Tourist Hotels Association of Sri Lanka.
Prof. Furkhan has been a member of the Independent National Police
Commission of Sri Lanka and the Finance Commission of Sri Lanka.
He was a member of the Council of the Postgraduate Institute of
Management and the Council of the South Eastern University of
Sri Lanka. In recognition of the services rendered to education and
generally to the country, H.E. The President of Sri Lanka awarded him
the title of Deshabandu in 1987 and was later conferred the title of
Desamanya in 2005.
Desamanya Charitha P. de Silva

Desamanya Charitha P. de Silva is presently Chairman of ID Lanka Ltd.
He was among other things a former Chairman of the Securities
and Exchange Commission of Sri Lanka, the Ceylon Chamber of
Commerce, The Employers Federation of Ceylon, Sri Lanka Business
Development Centre, Sri Lanka National Council of the International
Chamber of Commerce, The Asian Leasing Association, Aitken
Spence & Co. Ltd. and Lanka ORIX Leasing Co. Ltd.
He pioneered the Equipment Leasing Industry in Sri Lanka in 1980.
He was awarded The Order of the Rising Sun Gold and Silver
Star by the Japanese Government in 1988. This is the highest
honour awarded to any Sri Lankan. He was awarded the Honour of
Desamanya by the Sri Lankan Government in 1998.
Deshabandu Nowfel Saly Jabir
Deshabandu Nowfel Saly Jabir has been a Director of Bairaha Farms
PLC since the year 1994. He is involved in the Gem and Jewellery
Industry and promoted Sri Lanka as a major gem and jewellery
trading centre. He is presently the Chairman of Nowgems Jewellers
(Pvt) Ltd.
He has been associated with business in engineering where he
served as the Chairman of ETA Melco Engineering Co. and the
hospitality industry as a former Board Member of Confifi Hotel
Holdings, Riverina Hotel and Eden Resort and Spa.
Deshabandu N.S. Jabir is presently the Vice-President of the Moors
Islamic Cultural Home. He served his motherland in the capacity of
the Ambassador to the Kingdom of Saudi Arabia (1998-2001).
He had also served as the Special Commissioner for the Beruwela
Urban Council and also as the Chairman of Board of Governors at
Zahira College. In 1998, H.E. The President honoured him with the
title of Deshabandu in recognition of his services to the nation on the
economic, social and cultural fronts.
{1 1 }
Bairaha Farms PLC
Board of Directors
Yakooth Naleem
Mr. Yakooth Naleem is the CEO of the Company. He has been
the Managing Director since 1990. He has a BA Econ. (Hons.)
degree from the University of Manchester (formerly known as the
Victoria University of Manchester) of the United Kingdom. He was
awarded Entrepreneur of the Year 2000 - merit award in the extra
large category in the Western Province by FCCISL. He was elected
in January 2013 as the first Chairman of the newly established
Standing Committee on Dairy & Livestock of the National Chamber of
Commerce of Sri Lanka.
Riyal Yakoob
Mr. Riyal Yakoob is the Executive Director of the Company. He
worked as a Senior Assistant Accountant of Bairaha for 7 years
and subsequently he was appointed as an Executive Director of the
Company and he has been in this position since 1990. He received
his Higher National Diploma (Business and Finance) from the
Southwest London College of the United Kingdom.
Ilyas Naleem
Mr. Ilyas Naleem originally worked in the Company as an Executive
Director from 1981 to 1983. Since then, he continues to be a Director
without taking active participation in the Companys activities. He
is engaged in the Gem Trade on his private capacity. He was also
educated in the United Kingdom and has a Diploma in Business
Studies awarded by the Business Language School of London in
association with the Centre for Economics and Political Studies.
{12/13}
Bairaha Farms PLC
Kamil Naleem
Mr. Kamil Naleem has been a Director of the Company since 1984.
He was previously looking after the operations of the Golden Rooster
Restaurant chain until the operation was discontinued. He was also
educated in the United Kingdom.
Mubarak Naleem
Mr. Mubarak Naleem joined the Company in January 1994 as
an Executive Director and he was in charge of the supermarkets
chain until it was disposed off. He was also educated in the
United Kingdom.
Natural Antidepressant
Theres a good reason why a very successful series of books is titled Chicken Soup for the
Soul. It is built around the premise that a bowl of warm chicken broth as Mum would
serve up provides inspiration, comfort and well-being for the psychewith some veracity.
Chicken has a high content of an amino acid called tryptophan which has a calming effect on
the system. It also contains Vitamin B5 or pantothenic acid which has a calming effect on the
nervous system. Consuming chicken also raises serotonin levels in the body that can
enhancer mood, blast stress and aid sleep.
Vitamin B5
Pantothenic Acid
(C 9H 17NO5)
and Analysis
We will continue to automate our systems

and processes to enhance our operations
in the upcoming years.
{14 }
Bairaha Farms PLC
and Analysis
Impact of the Economic Environment

The Consumer demand for chicken is largely dependent on the
purchasing power of consumers. Purchasing power is a direct
result of inflation and economic progression of a country. During the
financial year 2013/14, there was decline in purchasing power as
a result of inflation which remained at a high single digit level. As a
result, the demand for chicken varied among the three consumer
segments - low, middle and high income segments. There was
noticeable dip in demand by the low and middle income consumers
while it remained stable among the high income consumers.
The current per capita consumption of chicken in Sri Lanka is
approximately 7.2 kilograms of chicken per person and 97 eggs
per person per annum. This is very low compared to the per capita
consumption of 35 kilograms of chicken in Malaysia which has a
similar population as Sri Lanka. In comparison, USA and the Middle
Eastern countries have higher per capita consumptions, while
India and Bangladesh have lower consumption rates compared to
Sri Lanka.
As time passes, we anticipate per capita consumption of chicken and
eggs in Sri Lanka to increase in tandem with the projected growth in
per capita income level, which is expected to reach US$ 4,000 by the
end of year 2016.
The price increase of raw materials globally, also impacted the poultry
industry. The shortage of maize in the global market consequent to
the conversion of maize into biofuel resulted in an increase in raw
material prices. Approximately, 65% of our total costs constitute
feed costs.
Poultry producers in Sri Lanka are required to buy most of the

inputs locally as per Government policy. Maize which is the main
ingredient for animal feed is produced locally and is subject to
import restrictions. The Government has a vision to produce the
entire requirement of soya bean by-product meal in Sri Lanka which
is the second most important ingredient for feeds. This could be
realised in the near future and would result in substantial foreign
exchange savings to the country. Further, Sri Lankan farmers
produce nearly 60% of its requirement of corn and the farmers have
been guaranteed a minimum price by the Government. However,
corn is a seasonal crop and unfortunately in the last season it was
manipulated by intermediary traders who artificially escalated corn
prices by hoarding. If this trend continues it would pose a serious
threat to poultry producers in the country as it would affect the
competitiveness of the industry. The ideal situation would be to
achieve self-sufficiency in raw materials required to produce animal
feeds while making them available at competitive prices. This would
definitely boost the poultry industry through increased consumption
of chicken.
Nutritional Value of Chicken

Chicken meat is a great source of animal protein. It is also rich in
potassium, calcium and contains no carbohydrates. Chicken comprise
of both white meat and dark meat, the former being the healthier
option. The nutritional make-up of chicken makes it a healthy food
option and is recommended by doctors as well. The white meat of
chicken is comparable to that of fish. There is an accredited quality,
food safety and ISO monitoring mechanism for chicken whereas
there is no such quality control mechanism for competing animal
protein products in Sri Lanka. A well-known fact is that respectable
processors of branded chicken in Sri Lanka conform to certain
stringent norms and quality standards. Chicken is considered to be a
preferred animal protein compared to the red meat.
{1 5 }
Preventing Bone Loss

As one gets older, bone density and calcium levels in the body could decrease
leading to conditions such as osteoporosis and arthritis. The good news is, chicken can
help! Phosphorus and calcium plus power packed protein available in chicken
makes this a great food aid to combat this affliction.
P + Ca
and Analysis
Poultry Market in Sri Lanka
Level of Integration
The poultry industry in Sri Lanka consists of two major segmentsegg and meat production. As mentioned earlier, the current
per capita consumption of chicken and eggs in Sri Lanka is
approximately 7.2 kilograms and 97 eggs respectively. Further, the
chicken meat industry is divided into two categories - the processed/
packed segment (branded chicken segment) and the wet segment
(live bird segment). The branded chicken meat segment consist of
both large-scale and medium-scale meat processors while the wet
market encompasses a large number of independent small-scale
farmers and retailers. In the processed chicken market segment,
Bairaha is one of the four main players. Bairaha is the pioneer
chicken processor and has a strong brand loyalty among the
consumers.
As a major poultry producer in the country, the operations are

vertically integrated. This enables us to counter limitations that
are inherent in the poultry industry. The operations include broiler
breeder grandparent and broiler breeder parent farms and hatcheries,
commercial broiler farms, contract farms, a chicken processing
factory and value added meat production factory. As such Bairaha
is able to achieve higher level of efficiency by having control over a
number of related activities.
Our associate Company namely Fortune G-P Farms (Lanka) Ltd.,

enjoys nearly 50% market share of the broiler breeder parent
chicks requirements of Sri Lanka. In other words, nearly 50% of the
final broiler chicken meat product which is marketed in Sri Lanka
originates from our grandparent farm and hatchery. This is in the
form of broiler breeder parent chicks from which broiler chicks are
produced by a number of breeder farms and hatchery operators.
Competition
The poultry market in Sri Lankan is highly competitive. Bairaha is
one of the three players in the grandparent farm segment. Bairaha
also continues to be a major supplier of live chicken to the wet
market, which remains a significant segment of the broiler chicken
industry in Sri Lanka. We hold almost half of the market share of the
broiler parent breeder chicks market. Bairaha is one of the four large
players in the processed chicken market and its Subsidiary Company
Bairaha Foods (Pvt) Ltd. is a medium-sized producer in the value
added meat products market segment.
Challenges and Opportunities

The main challenge faced by the poultry industry is the high cost of
raw materials for poultry feeds. Approximately, 30%-40% of the raw
materials for the production of feed for producing broiler meat are
currently imported by feed millers. Further, the prices of certain raw
materials are manipulated by intermediaries by hoarding. As such
the raw material prices at times become uncompetitive and they
affect the production cost and competitiveness of poultry products.
This is a great concern to us when considering the export market.
It is noteworthy to mention that the Government has taken an
unprecedented bold step in April 2014 to permit import of corn for
a period of two months at a concessionary all inclusive rate of 10%
duty plus VAT. This action of the Government must be commended
for balancing the interests of the agricultural farmers with those of
poultry producers and the consumers of chicken and egg.
Price control is another challenge faced by the industry. The local
poultry meat sales are regulated by the Consumer Affairs Authority of
Sri Lanka. A maximum retail price of Rs. 380/- per kilogram has been
set for whole broiler packeted chicken meat. Due to the price ceiling,
poultry producers are unable to pass on the impact of escalating feed
and other input costs to customers, and this has adversely affected
the industrys overall profitability.
{16/17}
Bairaha Farms PLC
and Analysis
Non-availability of insurance coverage for poultry disease is also

a challenge to the industry, although the threat is comparatively
low to our organisation due to the specific structural set-up of the
operations and activities of the Group. Since poultry producers
cannot insure against poultry diseases, they end up making sizeable
allocation in their annual budgets for disease prevention and control.
The per capita consumption of chicken meat in Sri Lanka is low. As
such there is a high potential to increase the per capita consumption.
This is largely dependent on economic progress of the country
and rise in disposable income. With the expected per capita
income increase in Sri Lanka, the potential for growth in per capita
consumption is very high.
There is also the possibility to introduce diversity in product offering
with value addition with potential for higher margins. We also have a
diversified customer portfolio which is highly competitive.
The potential for chicken exports is also high provided we could
offer competitive prices. Sri Lanka being an island nation has a lower
tendency for poultry diseases when compared to other land-locked
Asian countries. This has minimised the potential threats to the
poultry industry.
Mitigating Risks
We are indirectly exposed to foreign exchange risk due to the
industrys part reliance on imported raw materials for the production
of feed. Feed is the single largest component of our production cost.
We are also exposed to supplier concentration risk as our major
feed supplier accounts for approximately 90% of our total supply.
However, due to the long-standing relationships we have maintained
with them over the years, the impact of this risk is mitigated.
{18 }
Bairaha Farms PLC
Threat of disease is another risk faced by us. To mitigate this, we

continuously improve, upgrade and implement biosecurity measures.
These are supported by our advanced Microbiological and Eliza
Laboratory which monitors among others our poultry farms and
recommends preventive measures against poultry diseases when
necessary. Our farms are located in numerous separate locations
in several districts and this also helps us to minimise threat from
diseases. We also spend a sizeable amount on disinfectants to
keep our production facilities clean and hygienic. We are the
authorised local distributor of the Antec brand of disinfectants from
DuPont, USA.
Accomplishments
Our Joint Venture Company, Fortune G-P Farms (Lanka) Ltd., won
the Silver Award in the Agriculture Value Added - Small Category
at the National Chamber of Exporters of Sri Lanka (NCE) Awards
Ceremony held in 20th September 2013 for the exports undertaken
by the Company in the year 2012.
Strategic Focus
We will continue to automate our systems and processes to enhance
our operations in the upcoming years. We will focus on strengthening
our product portfolio and continue to vertically integrate our
production activities by investing in processes that will complement
our core business.
and Analysis
Expanding our broiler farming operations and further consolidating

our position as a leading poultry player is another key focus area
in the future. We will continue to introduce automation to our
production processes to control our total operational cost and
improve product quality.
Future Outlook
The future outlook of the poultry industry remains encouraging due to
Government focus on self-sufficiency and food security. Furthermore,
Sri Lankas percapita chicken consumption is expected to increase
in tandem with the expected rise in percapita disposable incomes.
Poultry producers could receive support from the Government in
the future, given that the existing price ceiling for poultry products
was proposed to be replaced in the 2014 Government Budget by a
pricing formula that takes into account the overall cost of production.
In the years ahead, we will seek avenues to export more products.
We also anticipate greater support from the Government in the form
of incentives to mitigate against high cost of local production, arising
from guaranteed price given especially to farmers cultivating corn.
{1 9 }
Promoting Heart Health

Having a good heart must mean more than just being a nice person! Heart health
figures more often today in a world of increasing stress and ill advised dietary and
living habits. Good news again! Theres a ready source of the right type of food available
for everyonechicken! Niacin in chicken helps lower cholesterol levels, whilst its Vitamin B6
content helps lower the level of homocysteine, an amino acid linked to cardiac arrest.
Lean chicken is recommended.
Vitamin B6
Amino Acid
Financial Review
The consolidated Group turnover

increased by 4.7% to Rs. 3.054 Bn
from Rs. 2.917 Bn in 2012/13
Turnover
Distribution Expense
At Company level turnover increased by 0.5% to Rs. 2.431 Bn

(Rs. 2.418 Bn in 2012/13). Due to the glut and economic conditions
that prevailed in the day old chicks market, selling prices declined
compared to the previous financial year. Even though heavy glut
situation continued up to third quarter the Company managed
to maintain the average selling price of the broiler chicken meat
segment compared to last year.
Distribution expenses include hiring transport, fuel expenses,

depreciation and maintenance of sales vehicles, advertising and
promotions undertaken to increase sales volumes, payroll and
related costs of the sales and marketing personnel and provision for
doubtful debts.
But the consolidated Group turnover increased by 4.7% to

Rs. 3.054 Bn (Rs. 2.917 Bn in 2012/13).
Cost of Sales and Gross Profit

The Company gross profit as a percentage of net sales decreased to
8% (10.7% in 2012/13). This was mainly due to the increase in the
cost of production compared to the previous year.
The Group gross profit as a percentage of net sales marginally
decreased to 14.45% (14.81% in 2012/13).
Other Operating Income

Other operating income has decreased by 58% at Company level
due to the decrease in dividend income received from subsidiaries.
(However, in the case of the Group it has gone up by 15% due to
increase in sales of sundry items and profit received from Amana
Bank deposits).
Other operating income as a percentage of revenue at Company
level was 1.3% as against 3.2% in the previous year. In the case
of the Group it was 0.63% of the turnover as against 0.58% in the
previous year.
As a result of the increased spending on payroll and related cost of

the sales and marketing personnel and provision for doubtful debts.
(At both the Company and the Group level, distribution expenses
have increased by 10% and 22% respectively)
Selling and distribution expenses as a percentage of revenue at
Company level was 4% as against 3.7% in the previous year. At
Group level it was 4.8% of the turnover as against 4.1% in the
previous year.
Administrative and Other Operating Expenses

Administrative expenses include payroll and related costs of the
administration staff, office expenses, depreciation and maintenance
of office fixed assets and professional charges. (At Company level
administrative expenses have decreased by 27% mainly due to the
shared services to the subsidiaries. At Group level it has gone up
by 1% due to increase in payroll and related costs of the
administrative staff).
Administration expenses as a percentage of revenue at Company
level was 3.1% as against 4.2% in the previous year. At Group level
it was 4.7% of the turnover as against 4.9% in the previous year.
Other operating expenses as a percentage of revenue at Company
level was 0.02% as against 0.03% in the previous year. At Group level
it was 0.020% of the turnover as against 0.023% in the previous year.
{20/21}
Bairaha Farms PLC
Financial Review
Finance Costs and Interest Cover
Taxation
During the year under review interest rates declined gradually during
the year. Both the Company and the Group attracted favourable
interest rates from the financial institutions at low premiums to
SLIBOR leveraging on the Companys financial strength.
The tax charge for the year at the Company was Rs. 8.58 Mn
(Rs. 8.19 Mn in 2012/13) with an effective tax rate of 20% as against
6.4% in the last year. The increase in the effective tax rate was mainly
due to underprovision of taxes in the last financial year.
As a result of interest rates gradually decreasing throughout the year

the cost of financing at Company level decreased to Rs. 11.5 Mn
(Rs. 16.5 Mn 2012/13).
The Groups Income Tax Charge for the year was Rs. 21.3 Mn
(Rs. 22.4 Mn in 2012/13)
Statement of Financial Position

Groups finance cost increased to Rs. 39.1 Mn (Rs. 22.6 Mn in
2012/13) as a result of increase in interest-bearing borrowings to
fund our capital expenditure requirements.
The Groups interest cover reduced to 5.1 times (9.1 times 2012/13)
whilst at Company level it was 4.7 times (8.8 times in 2012/13).
Profit from Operating Activities

Despite a revenue growth at Company level, earnings from operating
activities before interest and tax (EBIT) declined as a result of
increase in direct costs.
At an operating level the Company posted an EBIT of Rs. 54.5 Mn
compared to an EBIT of Rs. 145 Mn in the previous year, a decrease
of 62%.
At a consolidated level EBIT decreased by 4% to Rs. 198.2 Mn
compared to an EBIT of Rs. 206.5 Mn in the previous year.
Shareholders Funds
Shareholders funds at Company level increased to Rs. 1.017 Bn
as compared to Rs. 1.016 Bn in the previous year as a result of the
increase in retained earnings by Rs. 34 Mn due to the profits made
during the year.
As at the Reporting date the total shareholders funds at a
consolidated level was Rs. 1.82 Bn (Rs. 1.71 Bn in 2012/13)
Asset Base
During the year the Company also invested Rs. 118.7 Mn
(Rs. 122.1 Mn in 2012/13) on capital expenditure. The total
depreciation charge amounted to Rs. 56.64 Mn (Rs. 47.18 Mn in
2012/13).
Current Assets of the Company increased by Rs. 174.6 Mn as a
result of increase in Cash & Cash equivalents, Trade Receivables,
Income Tax Recoverables, Inventories and Amounts due from
Related Parties whilst Biological Assets decreased.
At a consolidated level the Groups total asset base amounted to
Rs. 2.53 Bn compared to Rs. 2.35 Bn in the previous year
representing a 7.6% increase.
{22 }
Bairaha Farms PLC
Financial Review
Cash Flow and Liquidity

The Companys key sources of finance for the year under review
were cash generated from operations. The Group ensured adequacy
of liquidity to service debt and working capital requirements, capital
expenditure and dividend payment requirements.
Cash flow from operating activities of the Group excluding working
capital changes increased to Rs. 304 Mn (Rs. 283 Mn in 2012/13)
whilst at Company level it was decreased to Rs. 108 Mn (Rs. 131 Mn
in 2012/13).
Cash generated from operations of the Group inclusive of working
capital changes decreased by Rs. 22.8 Mn in the current year
(increased by Rs. 122.7 Mn in 2012/13) whilst at Company level it
was increased by Rs. 6.4 Mn in comparison to decreased by
Rs. 74.5 Mn in the previous year.
The Companys share price as at 31st March 2014 was Rs. 147.00
moving within a range of Rs. 120.00 to Rs. 158.00 during the year.
The market capitalisation of the Company was Rs. 2.352 Bn as at
31st March 2014 (Rs. 2.4 Bn as at 31st March 2013).
Return on Equity (ROE) for the Group decreased to 10.9% (12%
in 2012/13) and a decrease for the Company to 5.4% (14.3% in
2012/13).
Return on Capital Employed (ROCE) for the Group also decreased
to 9.6% against the 10.7% in last year. At a Company level ROCE
reduced from 12.1% last year to 4.5% in the current year.
Dividends
A first and final dividend of Rs. 1.25 per share ws declared for the
year ended 31st March 2014.
Accordingly, the Gearing Ratio at the Company level stood at 21%

(16.1% in 2012/13) and at the Group level it was 13.9% (11.9% in
2012/13).
Shareholder Value
The Companys strategic priorities are primarily focused on delivering
shareholder value through the achievement of sustainable, capital
efficient and long-term profitability growth.
The basic Earnings per Share (EPS) for the Group was at Rs. 8.62
(Rs. 10.09 in 2012/13)
The Group net assets per share at book value stood at Rs. 113.68
(Rs. 107.22 in 2012/13) whilst at Company level it stood at
Rs. 63.56 (Rs. 63.54 in 2012/13).
{2 3 }
Products Portfolio
We strive to offer a higher standard of service to

our customers by providing products of the highest quality.
Thighs - Marinated & Cooked
Chicken - Sandwich Slices
Chicken - Burgers
Winglets - Marinated & Cooked
Drumsticks - Marinated & Cooked
Chicken Kuruma
Chicken - Sausages
Chicken - Meat Balls
Chicken - Burger Loaf
{24/25}
Bairaha Farms PLC
High in Protein
Society is much more health conscious than ever these days. Most people know that
proper muscle development and growth and maintaining a healthy body weight require a
diet that contains plenty of lean, low fat protein. All of this spellschicken!
Protein
Promoting Healthy Tissue Growth

Because theyre not life threatening, we tend to gloss over chapped lips, mouth
sores and other manifestations of dry and damaged skineven when the answer is
probably a good dose of riboflavin! Riboflavin or Vitamin B2 is available in
abundance in chicken liver and added to your diet, this food will significantly reduce
skin problems and repair dry or damaged skin.
Vitamin B2
Riboflavin
(C 17H20N4O6)
At Bairaha Farms, we believe it is

our responsibility to conduct our
business in an accountable and
sustainable manner.
We continually seek ways of improvement of our business

sustainability, employee well-being, customer satisfaction while
paying due attention to long-term environmental sustainability.
Community Engagement
We firmly believe that we can make a difference by supporting the
communities we operate in. Therefore, we continued to engage in
various sustainability initiatives to uplift the communities around us.
As in the past year, we continued with our efforts to enhance the
standards of the Wathupitiwala Base Hospital, which is visited by
over 2500 patients daily. This year, we contributed to improving
certain facilities of this hospital. Our efforts were highly appreciated
by the Chairman and staff of the hospital.
We also assisted financially a selected group of outgrowers to
expand. We organised New Year Celebrations in the communities
near our farms. To support sports, we financially assisted differently
abled players of the armed forces to participate in an international
wheel chair tennis tournament. Further, we partly sponsored two
professional drivers to participate in the Colombo Night Race.
Environmental Engagement
Operating as a responsible steward towards the environment is
of utmost important to us. Therefore, we strive to conserve and
optimise the natural resources we utilise to produce and market our
products. In order to conserve energy and be green friendly in our
operations, we established successfully a hydropower plant in our
farm in the Kandy District.
Employee Engagement
We have created a culture where all employees contribute to their
full potential in pursuit of the Companys mission and objectives. As
a responsible employer, we are committed to fostering a workplace
that is safe and professional and that promotes teamwork, diversity,
personal development and trust. We are an equal opportunity
employer. As such our policy on recruitment and promotions are
based solely on candidates merits and their potential contribution.
During the year, we made special payments to selected staff
members in recognition of their efficient and hard work. To enhance
the knowledge and skill of our employees, we provided training
on such aspects as Poultry Management for production staff and
training on sales for sales staff. As necessary and applicable, we
obtain resource persons for training from within the organisation,
from outside institutions as well as from abroad.
Customer Engagement
We strive to offer a higher standard of service to our customers by
providing products of the highest quality.
We embarked on numerous initiatives to improve the offering to our
customers. During the financial year, we continued to enhance the
packaging of our products and also introduce a convenient family
pack chicken for consumers. The family pack contains cut pieces of
a whole chicken. A budget pack of sausages was introduced to the
market which was offered at a lower price than the product available
in the market.
{26/27 }
Bairaha Farms PLC
In order to ensure the highest quality of our products, we have

obtained the necessary international accreditation certifications such
as the ISO 9001, ISO 22000, GMP and HACCAP. We adhere to all
requirements and quality standards of these accreditations. Further,
we carry out regular testing by an accredited independent laboratory
in Sri Lanka to ensure product quality. We have also affiliated with
Cobb Vantress, which is one of the worlds largest poultry breeding
companies. Cobb Vantress provides the Group with technical
support and guidance and also provides expert advice on breeding,
production and other aspects of poultry management.
International Accreditation Certifications
We continued to make investments to upgrade our processing

facilities during the year. One such investment was the online grading
machine. We also installed a grading machine in the Hatchery to get
graded eggs to produce graded chicks to meet the specific weight
requirements of our customers. These investments have enhanced
the performance of farmers as well as that of our own farms and
out-growers. We also engaged foreign experts to provide technical
expertise in areas such as chicken processing to further enhance the
quality of our products and well as to improve our efficiency.
{2 8 / 2 9 }
Bairaha Farms PLC
1. Bairaha Stall at the Culinary

Art Exhibition - 2013
2. New Year celebrations with
members of the public
3. Competition organised in the
New Year among the children
of the public
4. Bairaha Sponsorship at
Colombo Night Races
{249 }
Corporate governance is the system

by which companies are directed and
managed in their drive to generate value
for the shareholders.
The Board is entrusted by the shareholders with the responsibility to

manage the Company. The Board and Management of Bairaha Farms
PLC are committed to continually enhancing shareholder value by
maintaining high standards of corporate governance, professionalism,
integrity and commitment at all levels, supported by internal controls
and risk management systems.
We believe that our commitment to corporate governance practices
would generate distinct advantages for our business by building and
maintaining the confidence of our stakeholders, and in particular, the
shareholders.
Ensuring compliance with Statutory Provisions of the Companies

Act, SEC and Stock Exchange regulations and other laws relevant
to the business;
Approving the remuneration of the Executive Staff and the

recruitment and/or promotions of Senior Managers and Executives
and approving the remuneration of the Directors; and
Approving the interim financial statements as well as the annual

accounts and dividends.
II. Board Composition, Independence and

Attendance at Board Meetings
I. The Board of Directors
The Board comprises of eight Directors. Of these, four are

Non-Executive Directors and the others including the Chief Executive
Officer are Executive Directors. The Board has determined that three
of the four Non-Executive Directors are Independent Directors.
The Board ensures the proper stewardship of the Companys

affairs by formulating strategies and policies while monitoring the
Companys activities for effective implementation. The Board,
while being a source of strength to the management, also provides
guidance to the Executive Directors. Among other things, it has taken
responsibility for the following:
The Board of Directors is of the view that the period of service as

Board members exceeding nine years rendered by Desamanya Prof.
M.T.A. Furkhan, Desamanya C.P. de Silva and Deshabandu N.S. Jabir
have not compromised their independence and objectivity in their
roles as Directors.
This report sets out below the Companys corporate governance

process:
Formulating the strategies of the Company towards achieving

financial targets;
Reviewing and approving annual budgets and monitoring the

actual performance against the budgets and sanctioning major
investments as well as capital expenditure;
Ensuring compliance with corporate governance while monitoring,

reviewing and introducing internal controls where necessary;
{30 }
Bairaha Farms PLC
The Independent Directors have submitted a declaration confirming

their independence in accordance with Section 7 of the CSE Listing
Rules on Corporate Governance. Names of these Directors as given
below and their profiles can be found on pages 11 and 12 Details of
Directors Shareholdings in the Company are given on page 94.
The Board generally meets on a monthly basis. During the year under
review, the Board has met ten times at which the attendance was as
follows:
Name of the Director
The EMC meets every week and is chaired by the Chief Executive
Officer. Other members of this Committee are the Executive Director,
Group General Manager, Chief Financial Officer and Heads of the
Divisions.
Status
Attendance
Non-Executive
09
IV. Role of the Company Secretary
Executive
10
Desamanya C.P. de Silva
Non-Executive
09
Deshabandu N.S. Jabir
Non-Executive
05
Mr. Riyal Yakoob
Executive
09
Mr. Ilyas Naleem
Non-Executive
08
Mr. Kamil Naleem
Executive
10
Mr. Mubarak Naleem
Executive
10
The services and advice of the Company Secretary are available

to Directors when necessary. The Company Secretary keeps the
Board informed of new laws, regulations and requirements coming
into effect which are relevant to them as individual Directors and
collectively to the Board. In addition, the Company Secretary
advises the Chairman and the Board on all corporate governance
matters, Board procedures and compliance with applicable rules and
regulations.

Mr. Yakooth Naleem
III. Roles of the Chairman, the Chief Executive

Officer and the Management
The posts of the Chairman and the Chief Executive Officer are
separate and there is appropriate division of responsibilities between
the Chairman and the Chief Executive Officer. This helps to maintain
a proper balance of power and authority within the Company.
The Chairman, Desamanya Prof. M.T.A. Furkhan, is responsible
for the working and leadership of the Board. The Chief Executive
Officer, Mr. Yakooth Naleem along with other Executive Directors
are responsible for leading and managing the business within the
authority delegated by the Board. Apart from the responsibilities of
the Chairman and the Chief Executive Officer being entrusted to two
different persons, there is also an Executive Management Committee
(EMC), which is authorised to take operational decisions as well as
implementing policies and strategies determined by the Board.
Hence, there is ample opportunity within the management structure
for many people to contribute on issues relating to strategy,
performance and risk management.
V. Board Subcommittees
(A) Audit Committee
The Audit Committees duties include the review of financial
statements, internal control procedures, accounting policies, risk
management, assessing the adequacy of insurance coverage and
compliance with relevant accounting standards.
The Audit Committee, among other things, assists the Board of
Directors to discharge their duties by expressing an independent and
objective view on the financial reports.
The Audit Committee consists of four Non-Executive Directors,
three of whom are Independent. The Audit Committee is chaired
by Desamanya C.P. de Silva, a Fellow of The Institute of Chartered
Accountants of Sri Lanka.
The External Auditors are invited for meetings when required and
in any case they participate in such meetings to discuss the final
accounts before the Audit Committee recommends it to the Board
for adoption.
{3 1 }
The detailed Report of the Audit Committee is available on page 34.
(B) Remuneration Committee

The Remuneration Committee consists of four Non-Executive
Directors, three of whom are Independent with the exception of
Mr. Ilyas Naleem. Desamanya Prof. M.T.A. Furkhan is the Chairman
of the Remuneration Committee and other members of the
Remuneration Committee are Desamanya C.P. de Silva, Deshabandu
N.S. Jabir and Mr. Ilyas Naleem.
The Remuneration Committee meets once in six months to review
and recommend to the Board of Directors:
VII. Relations with Shareholders

The Company always encourages active participation of the
shareholders at the Annual General Meeting and provides suitable
answers and clarifications on issues and matters raised by
shareholders. In addition, by making available the quarterly and the
annual financial statements on a timely basis as well as by other
forms of communication, the Board makes every effort to keep the
shareholders informed of the progress of the Company.
(Sgd.)
1. The salary and remuneration of Executive Staff.
Yakooth Naleem
Chief Executive Officer
2. The remuneration of Executive Directors.
12th May 2014
3. Fees and allowances for Non-Executive Directors.

For more information on Remuneration Committee, please refer to
page 35.
VI. Going Concern

The Directors are satisfied to adopt the concept of going concern in
the preparation of the financial statements based on the information
made available to them through the annual budget, monthly
management accounts, information provided on future prospects,
risks and information on borrowing facilities.
{32/33}
Bairaha Farms PLC
Promoting Eye Health

Keeping a sharp eye out has become increasingly difficult in a world that places so much
stress on the human body. We really mean that keeping ones eye sight sharp is truly a
challenge. Chicken is a great source of retinol, alpha and beta carotene and lycopeneall
derived from Vitamin Aand all vital for great eyesight!
Vitamin A
Report of the Audit Committee
The primary function of the Audit Committee (the Committee) is to

assist the Board of Directors in fulfilling its oversight responsibilities.
The Audit Committee functions include the review of financial
statements, internal control procedures, accounting policies, risk
evaluation, assessing the adequacy of insurance coverage and
compliance with relevant accounting standards. The Audit Committee
assists the Board of Directors, among other things, in discharging
their duties by expressing an independent and objective view on the
financial report taking into consideration compliance with mandatory,
statutory and other regulations laid down by the authorities.
Where necessary the Audit Committee makes suggestions and
recommendations to the Board in areas within its purview.
Membership
The Audit Committee consists of four Non-Executive Directors three
of whom are Independent. It is Chaired by Desamanya C.P. de Silva,
who is an Independent Director and is also a member of a recognised
professional accounting body. The other members of the Audit
Committee are:

Desamanya Prof. M.T.A. Furkhan, who is an Independent Director

and also a Member of the Chartered Institute of Management
Accountants, UK.
Deshabandu Nowfel S. Jabir, an Independent Director.
Mr. Ilyas Naleem, a Non-Executive Director.
can be relied upon in preparation and presentation. The internal audit

function has been outsourced to Messrs BDO Partners, Chartered
Accountants.
The Internal Auditors carry out the audits as per a scheduled
programme approved by the Audit Committee.
In the financial year under review, the Internal Auditors undertook
four quarterly internal audits and process reviews covering operations
and finance-related activities at head office and other locations.
The design of the internal control systems and the operational
effectiveness was reviewed and recommendations were made to
the Management to improve governance, risk management and
compliance processes in the Company.
Generally, the audits are carried out on a quarterly basis. Based on
the audit findings and recommendations of the Internal Auditors, the
Audit Committee after discussing with the management recommends
to the Board the implementation of those recommendations that are
considered to be practical and necessary. The Audit Committee has
approved the fees to be paid for the services of the Internal Auditors.
Financial Statements
The Audit Committee assists the Board in assuring the integrity of
financial statements and disclosures.
Meetings
External Auditors
The Audit Committee held four meetings during the year under
review. The Chief Executive Officer, Executive Director and the Chief
Financial Officer also attended those meetings on invitation.
The Audit Committee has recommended to the Board of Directors

that Messrs Ernst & Young, Chartered Accountants be reappointed as
External Auditors for the financial year ending 31st March 2015 subject
to the approval of the shareholders at the Annual General Meeting.
Internal Audit Function

The Committee reviewed the Companys systems and procedures to
assess the effectiveness of the Internal Financial Controls that have
been put in place to provide reasonable assurance to the Directors
that assets are safeguarded and that the financial reporting system
(Sgd.)
Desamanya C.P. De Silva
Chairman - Audit Committee
12th May 2014
{34 }
Bairaha Farms PLC
Report of the Remuneration Committee
The Remuneration Committee consists of four Non-Executive

Directors, three of whom except Mr. Ilyas Naleem are
Independent. Desamanya Prof. M.T.A. Furkhan is the Chairman
of the Remuneration Committee and the other members of the
Remuneration Committee are Desamanya C.P. de Silva, Deshabandu
N.S. Jabir and Mr. Ilyas Naleem.
Besides salaries and allowances for sales and production staff,

incentives are also paid for these staff covering both executives and
non-executives alike, including staff in the farms and other production
units, for achieving certain specific targets, thereby helping to
motivate the staff while assisting the Company to seek to achieve its
sales and production targets stated in the Budget.
The Remuneration Committee meets once in six months to review

and recommend to the Board of Directors:
(Sgd.)
1. The salary and remuneration of the Executive Staff.

2. The remuneration of Chief Executive Officer and
Executive Directors.

Chairman - Remuneration Committee
12th May 2014
3. Fees and allowances for Non-Executive Directors.

In determining the compensation package of the Executive Personnel
the members of the Remuneration Committee take into account
the prevailing market rates and compensation packages offered by
competitors for staff of similar grades, their qualifications, experience
and performance of the individual staff concerned. The main purpose
of determining a suitable and an appropriate compensation package
for staff is not only to retain experienced and qualified staff, but also
to attract such new staff to manage an expanding organisation. We
believe that a good remuneration policy would maintain a balance
between supporting the Companys over-riding financial goal of
maximising shareholders wealth, including sustained growth in
dividend while keeping the staff and the management engaged,
motivated and committed to the Companys both short-term and
long-term financial goals.
{3 5 }
Risk Management
The purpose of the risk management

function at Bairaha is to assess the risks
inherent in the activities of the Group
Risk Management is a business imperative and generally risk is

positively correlated to return. Like any other organisation, Bairaha
too faces a multitude of risks in carrying out its business activities,
although their magnitude may be different. The purpose of the risk
management function at Bairaha is to assess the risks inherent in
the activities of the Group and to recommend the steps needed
to mitigate their impact through the adoption of suitable risk
management measures.
In regard to the risk associated with the purchase of parent chicks,

this risk is being managed and mitigated by the fact that we buy
these chicks from our Associate Company, Fortune G-P Farms
(Lanka) Ltd., which has the best facilities of the only three grand
parent breeding companies operating in Sri Lanka. The Company
also has the option of importing the parent breeder chicks directly
from its principals facilities located in numerous countries including
USA, United Kingdom, the Netherlands and New Zealand.
Supply-Side Risks
Market Risk
Primary supply-side risks include the purchase of quality poultry

feed, which mainly depends on the inputs used in its manufacture,
and the quality of breeder chicks that the Company and subsidiary
companies purchase.
Market risk for the Group continues to arise largely from fierce
competition in a limited market, with the inevitable consequences of
undercutting and a price war. Though it is not possible for Bairaha
to avoid completely this generally negative form of competition, the
perceived value of our brand could not be compromised solely by
aggressive price-cutting.
Poor quality feed could result in poor performance by both breeding

birds as well as the broilers. In order to minimise issues that could
arise from poor quality feed, the Company maintains a close rapport
with the suppliers to minimise any quality issues and the feed is
periodically tested in an external laboratory for quality.
The risks associated with the availability of locally-produced raw
materials for feed manufacture can be regarded as moderate,
because Sri Lanka is becoming nearly self-sufficient in maize
production. More rice by-products have also been made available
for feed production as a result of additional land being brought
under paddy cultivation. By making available adequate supplies of
locally-produced raw materials for feed production as well as having
the option of importing alternative raw materials, the risk faced by the
feed producers with regard to the availability of raw materials
is minimised.
{36 }
Bairaha Farms PLC
We closely monitor market risk in regard to processed chicken

through wholesale-price comparisons. Furthermore, we also seek to
minimise future market risks by introducing new products considered
to be value-for-money while continuing aggressively to promote our
high value, ready-to-eat products. The work undertaken last year on
the redesign of our existing product packages is still continuing and
this should help to further strengthen our brand positioning.
In relation to risk associated with marketing of day-old chicks, we
seek to minimise this by producing and supplying quality chicks,
while ensuring consistency in our supplies combined with an
outstanding service and customer support. Further, by expanding our
product portfolio by exporting broiler hatching eggs, we have also
sought to some extent reduce our exposure to marketing day-old
chicks in Sri Lanka.
Risk Management
Regulatory and Legal Risks

Company also faces potential risks of non-compliance with the
provisions in the Inland Revenue Act, CSE Rules and other applicable
laws and regulations. High legal expenses, fines and penalties,
inquiries by the tax and regulatory authorities could ultimately
seriously damage the Companys reputation. In order to manage
these risks, the management continuously monitors the Group
with regard to its compliance with laws and regulations, while
audit checks are conducted by Internal Auditors. Auditors from
the Sri Lanka Standards Institution regularly assess our compliance
with food safety and quality management standards.
The fact that we are accredited with ISO 9001, ISO 22000 and
HACCP system provide assurance to a great extent with regard to
our food safety and quality management systems.
Financial Risks
Since the Company imports only a small percentage of its
requirement of consumables, the Company is not overly exposed to
foreign exchange risks.
We are satisfactorily managing financial risks relating to borrowings
by controlling our exposure to debt while also having facilities with
more than one financial institutions.
In order to manage this significant operational risk which is common

to the industry, we periodically evaluate and monitor out growers
performance. Frequent defaulters are, over a period of time, weeded
out and the shortfall taken up by the Companys own broiler farms
or by new growers.
Natural Disasters, Weather Conditions and Diseases

Farming traditionally has been at the mercy of the weather. Droughts,
floods, storms etc., could cause crop and livestock losses while
an unusually good growing season can end up in a price war.
Geophysical disasters, though less common, could have even more
drastic impacts. Since such events cannot be predicted or be fullyprepared for, all properties and stocks of the Company are fully and
comprehensively insured against natural disasters. Unfortunately, our
livestock is not covered with insurance against poultry diseases,
since this type of coverage is not available. The Company and the
Group is minimising the risk associated with contagious poultry
diseases by having our farms, both parent breeder and broiler, being
located in numerous separate locations in a few districts.
The Company and its subsidiary companies have minimised the
hot environmental weather having an impact on production and
productivity by having artificially cooled and ventilated houses to
maintain a stable and comfortable environment for the birds.
Operational Risks
Poor performance by out growers is one of the main operational
risks faced by the Company. When out growers due balances
rise excessively, the Company is compelled to provide increased
provisions for bad and doubtful debts, which in turn affects the
Companys profitability and cash flows.
{3 7 }
Our Journey
1975 October
1999 October
Bairaha Farms PLC (formerly known as M.I.M. Naleem Hajiar & Co.
Ltd.) was incorporated on the 17th October 1975.
Bairaha Foods (Pvt) Ltd., a fully-owned subsidiary of BFL,

commenced the test production and marketing a range of high
quality, wholesome pre-cooked poultry meat products.
1976 December
Broiler Parent Breeding Farms and a hatchery were started at
Katana and subsequently another breeder farm was established at
Kondagahamulla. Commercial Broiler Farm operations commenced
in a 65-acre site at Pasyala in 1980 and a state-of-the-art Chicken
Processing Factory equipped with advanced and sophisticated plant
and machinery imported from Europe was also set up in the same
year. This was the first modern and large scale chicken processing
factory in the country and it was also equipped with a modern
freezing and cold storage facility. Commercial Layer and Breeder
operations were extended to sites at Kottaramulla and Thummodera
respectively, and the Kottaramulla Farm was later converted into a
major Parent Breeder Farm.
1986 August
Bairaha Farms Ltd. (BFL) pioneered and inaugurated a Contract
Growing Scheme in Gampaha, Puttalam and Kurunegala Districts
enabling farmers to grow and supply Live Broiler Birds to the
Company. Today, there are hundreds of such contract farmers,
located in several districts.
1994 February
BFL became a Public Company.
October
BFL went for the Initial Public Offering (IPO) and the shares were over
subscribed by more than 2.04 times on the opening day itself of the
public share issue.
2000 April
A major Breeder Farm of the Company located at Kottaramulla, in the
Puttalam District, was upgraded and converted into an automated farm.
2001 May
Bairaha Farms Ltd. was awarded a Certificate of Compliance for
the 1999/2000 Annual Report in the category of Food & Beverage
Companies, in the Annual Report Competition organised by The
Institute of Chartered Accountants of Sri Lanka.
October
Bairaha Group was awarded the internationally recognised ISO 9002
Certificate for Quality Management Systems. In addition, Bairaha
chicken processing and pre-cooked meat manufacturing factories
were also simultaneously awarded the internationally acclaimed
HACCP Food Safety Certificates.
2002 May
For the second successive year, Bairaha Farms Ltd. was awarded a
Certificate of Compliance for the Annual Report for the year 2000/01
in the category of Food & Beverage Companies in the Annual Report
Competition organised by The Institute of Chartered Accountants of
Sri Lanka.
June/July
Bairaha Farms Ltd. divested its shareholding in Nutrena (Pvt) Ltd.
August
The Breeder Farm at Pasyala was upgraded by introducing an
evaporating cooling system.
{38 }
Bairaha Farms PLC
Our Journey
2003 May
December
For the third successive year Bairaha Farms Ltd. was awarded a
Certificate of Compliance for the Annual Report for the year 2001/02
in the category of Food & Beverage Companies in the Annual Report
Competition organised by The Institute of Chartered Accountants of
Sri Lanka.
The Company was presented with a Certificate of Recognition for the

Annual Report for the year 2003/04 in the Annual Report Competition
organised by The Institute of Chartered Accountants of Sri Lanka.
October
Katana property was sold to a property developer.
November
2005 June
The first batches of Parent Chicks were hatched and the first external
sale was executed.
December
The first batch of breeder birds was housed in the new farm in the
Kandy District.
The Institute of Chartered Accountants of Sri Lanka presented the

Company with a Certificate of Recognition for the Annual Report for
the year 2004/05 in the Annual Report Competition.
2004 May
2006 May
The ISO Quality Management System was assessed and upgraded

in accordance with requirements of ISO 9001:2000 and certification
was also granted. Re-certification was awarded for the revised
HACCP system as well.
BFL was awarded the prestigious ISO 22000:2005 by the Sri Lanka
Standards Institution (SLSI).
July
A historic and landmark agreement was signed between Bairaha
Farms Ltd. and Hybro B.V. of Netherlands at the Headquarters of
Hybro in Boxmeer, Netherlands to set up a joint venture Grand Parent
Broiler Breeder Project in Sri Lanka.
October
The first batch of Grand Parent Chicks were imported by the joint
venture company, namely, Fortune G-P Farms (Lanka) Ltd.
December
BFL was once again awarded Certificate of Recognition for its
Annual Report for the year 2005/06 by The Institute of Chartered
2007 March
The Company was awarded the Third Place for running the Best
Poultry Breeder Farm in the National Livestock Award presented by
the Ministry of Livestock Development.
July
BFL was bestowed with the Silver Award in the National
Agribusiness Award, in the Large-Scale Category, by the National
Agribusiness Council.
{3 9 }
Our Journey
September
August
The Company was bestowed with the Silver Award for the year
2007 in the category of Importer, Distributor and Retailer by the
Sri Lanka-Malaysia Business Council.
Highest DOC production and sale in the history of the Group.

Received GOLD Award in the Producer/Processor - Large Category
at the Agribusiness Awards 2008 organised by the National
Agribusiness Council.
November
Mr. Yakooth Naleem was awarded both National and Western
Province Merit Awards in the Extra Large Category in the Sri Lankan
Entrepreneur of the Year 2006 Competition, organised by the
Federation of Chamber of Commerce and Industry of Sri Lanka.
Company the Certificate of Recognition for the Annual Report for the
financial year 2006/07.
2008 February
The Faculty of Agriculture of the University of Peradeniya presented
the Company with a memento in appreciation of the close
co-operation that exists between the two institutions.
The Company established another Breeder Farm in Hiripitiya in the
Kurunegala District.
July
Received GOLD Award in the Manufactures and Exporters of
Household Consumable Product category at the 4th Annual
Sri Lanka-Malaysian Business Awards (2008) organised by the
Sri Lanka-Malaysia Business Council.
{40 }
Bairaha Farms PLC
November
Company with the Certificate of Recognition, in the Food & Beverage
Sector, for the Annual Report for the financial year 2007/08 in the
Annual Report Competition.
2009 August
Bairaha Farms PLC was adjudged the winner of the Silver Award in
the category of Manufacturers and Consumer Products awarded by
the Sri Lanka-Malaysia Business Council.
Bairaha Farms PLC was adjudged the joint winner of the Bronze
Award in the category of Retailers of Finished Product awarded by
the Sri Lanka-Malaysia Business Council.
Fortune G-P Farms (Lanka) Ltd. was awarded the Gold Award in
the Medium category for Input Supplier (Poultry) awarded by the
National Agribusiness Council at the Agri-business Awards 2009.
November
Fortune G-P Farms (Lanka) Ltd. exported two consignments

of Broiler Breeder Parent Chicks to Nepal. This company is a
member of the Bairaha Group. Fortune G-P Farms (Lanka) Ltd.
is the largest of the two companies in Sri Lanka which produces
Broiler Breeder Parent Chicks.
Bairaha Farms PLC won the Bronze Award of the Annual Report
in the Food & Beverage Sector in the Annual Report Award
Competition 2009 organised by The Institute of Chartered
Our Journey
2010 March
September
Bairaha Group becomes the largest and leading producer of broiler

day-old chicks.
Fortune G-P Farms (Lanka) Ltd. received a Bronze Export Award for
the year 2010 from the National Chamber of Exporters of Sri Lanka.
June
November
Bairaha Farms PLC was presented with a prestigious Forbes Asia

Award in a ceremony held in Hong Kong.
Bairaha Farms PLC was adjudged the winner of the Gold Award
in the category of Importer/Distributor/Retailer of finished products
and semi finished products awarded by the Sri Lanka-Malaysia
Business Council at the 6th Annual Sri Lanka-Malaysia Business
Awards - 2010.
Bairaha Farms PLC was adjudged the winner of the Bronze Award
in the category of Manufacturers and Exporters of Household and
Consumable awarded by the Sri Lanka-Malaysia Business Council
at the 6th Annual Sri Lanka-Malaysia Business Awards - 2010.
Appreciation award received by the Sri Lanka Veterinary

Association.
First export of Cobb 500 Parent Chicks for the year on 26th June
2010 to Nepal.
December

Bairaha Farms PLC was awarded a Certificate of Compliance in

the Food & Beverage Sector for the Financial Year 2009/10 in the
Annual Report Competition organised in December 2010 by The
Institute of Chartered Accountants of Sri Lanka.
Bairaha Farms PLC signed an agreement with the BOI to set up a

large scale state-of-the-art Broiler Farm.
2011 January
December
Bairaha Farms PLC was awarded a Certificate of Compliance in the
Food & Beverage Sector for the Financial Year 2010/11 in the Annual
Report Competition organised in December 2011 by The Institute of
Chartered Accountants of Sri Lanka.
2012 August

Fortune G-P Farms (Lanka) Ltd., while continuing its exports to

Nepal undertook successfully its first export to a new destination,
namely, Bangladesh.
December

In the Chartered Accountants 2012 Annual Report Awards

organised by The Institute of Chartered Accountants of Sri Lanka,
Bairaha Farms PLC was awarded a Certificate of Compliance in
the Food and Beverage Sector.
Bairaha Farms PLC exported the first consignment of Hatching

Eggs to Middle East.
2013 June
Bairaha Farms PLC share price reached an all time high of Rs. 525/-.
Commissioned the Hydro Project to supply electricity to farm located

in the Kandy District.
March
September
Market capitalisation of Bairaha Farms PLC reached Rs. 6.4 Bn.
Fortune G-P Farms (Lanka) Ltd., won the Silver Award in the
Agriculture Value Added - Small category at the National Chamber of
Exporters of Sri Lanka (NCE) Awards for the exports undertaken by
the Company in the year 2012.
{4 1 }
The Bairaha Family
Bairaha Farms PLC

Bairaha Farms PLC (BFPLC) is the holding company and it directly
owns and manages a large-scale state-of-the-art chicken processing
factory. It also owns and operates three modern breeder farms and
provides essential Eliza and Bacteriological Laboratory Services both
to Bairaha Group and the poultry industry.
Hill Country Farms Ltd.

Hill Country Farms Ltd. operates two large-scale breeder farms and a
hatchery for the production of broiler day-old chicks.
Bairaha Foods (Pvt) Ltd.

Bairaha Foods (Pvt) Ltd. is engaged in the manufacture of a range of
value-added, pre-cooked meat products.
Siyane Farms Ltd.

Its principal activity is breeding of poultry for the production of broiler
day-old chicks.
Fortune G-P Farms (Lanka) Ltd.

Its principal activity is the operation of a broiler breeder grandparent
farm and hatchery for the production of broiler breeder parent chicks.
The eight companies named below are engaged in providing support
services to the Group by purchasing and then leasing agricultural
lands to it for setting up poultry projects:
BF Lands Development Ltd.
HCF Land Development Ltd.
Lanka Land Development Ltd.
{42 }
Bairaha Farms PLC
Rajarata Land Development Ltd.

Cultural Triangle Land Development Ltd.
Windsor Real Estate Ltd.
Foster Real Estate Ltd.
Regency Real Estate Ltd.
Bairaha Trading (Pvt) Ltd.

Our Subsidiary Company, Bairaha Trading (Pvt) Ltd., is the trading
arm of the Group. Bairaha has been the authorised local distributor
for Antec range of disinfectants from DuPont for many years, and
these products have been distributed and marketed by this company.
Natures Best Industry Ltd.

This company owns and runs a state-of-the-art broiler farm. It being
a BOI-approved company, enjoys a 10 years tax holiday and after
the expiry of this tax holiday, it will be entitled for another 2 years
concessionary tax rate of 10%.
As at today, the project is almost 60% complete and it has become a
vital segment of our business.
Financial Report
2013/14
Content
Statement of Directors Responsibilities
44
Annual Report of the Board of Directors

on the Affairs of the Company
45
48
49
Statement of Comprehensive Income
50
Statement of Changes in Equity
51
Cash Flow Statement
52
Notes to the Financial Statements
53
{43}
Bairaha Farms PLC
Statement of Directors Responsibilities

The Directors are responsible for ensuring that the Company keeps
sufficient accounting records which disclose the financial position
of the Company with reasonable accuracy and that the financial
statements are prepared in conformity with the Sri Lanka Accounting
Standards (SLFRS/LKAS) and comply with the provisions of the
Companies Act. The Directors have adopted the going concern basis
for the preparation of the financial statements.
The Directors are responsible for taking reasonable measures to
safeguard the assets of the Company and in that regard maintain
effective controls.
The Directors confirm that all statutory payments for the financial
year have been made.
By Order of the Board
Bairaha Farms PLC
(Sgd.)
P W Corporate Secretarial (Pvt) Ltd.
Company Secretaries
12th May 2014
{44 }
Bairaha Farms PLC
Annual Report of the Board of Directors

on the Affairs of the Company
The Directors of Bairaha Farms PLC have pleasure in presenting their
Annual Report together with the audited financial statements of the
Company for the year ended 31st March 2014.
Auditors Report
General
Accounting Policies
Pursuant to the requirements of the new Companies Act No. 07 of

2007, the Company was re-registered on 14th February 2008 and
bears registration number PQ122. Accordingly, the name of the
Company has changed to Bairaha Farms PLC.
The financial statements of the Company have been prepared in

accordance with the Sri Lanka Accounting Standards (SLFRS/LKAS)
and the policies adopted thereof are given on pages 53 to 62.
Directors
Group Activities
The core activities of the Group are vertically integrated poultry
farming, chicken processing and manufacturing of pre-cooked meats
and in particular the following:

Breeding poultry and operating of hatcheries for the production

and sale of both parent and commercial broiler day-old chicks;
Operating hundreds of outgrower farms as well as a few large

scale own broiler farms;
Processing, distributing and selling of packeted whole broiler

chicken and broiler chicken portions (cut-ups);
Manufacturing,
distributing and selling of pre-cooked meats

including chicken sausages, chicken meat balls, chicken sandwich
slices and marinated chicken;
Importing
and distributing, as the exclusive local agent, the worldrenowned Antec brand disinfectants from DuPont Animal Health
Solutions of USA;
Marketing
and selling of other products for poultry farming,

including sales of hypromeal (produced by recycling the
by-products of poultry processing) to feed millers.
Financial Statements
The financial statements of the Company are given on pages 49 to 92.
Summarised Financial Results

31st March
2014
Rs. 000
31st March
2013
3,054,158
2,917,526
128,307
161,420
1,322,732
1,208,890
Rs. 000
Group
Revenue
Total Comprehensive Income
Retained Earnings
The Report of the Auditors on the financial statements of the

Company is given on page 48.
The names of the Directors who held office as at the end of the
accounting period are given below and their brief profiles appear on
pages 11 and 12.
Executive Directors
Mr.
Mr.
Mr.
Mr.
Yakooth Naleem - (Managing Director)

Riyal Yakoob
Kamil Naleem
Mubarak Naleem
Non-Executive Directors
Desamanya Prof. M.T.A. Furkhan - (Chairman)*
Desamanya C.P. de Silva*
Deshabandu N.S. Jabir*
Mr. Ilyas Naleem
* Independent Director
A resolution for the reappointment of Desamanya

Prof. M.T.A. Furkhan, who reached the age of 70 years on
18th March 2005, will be proposed at the Annual General Meeting in
terms of Section 211 of the Companies Act No. 07 of 2007.
A resolution for the re-appointment of Desamanya C.P. de Silva,
who reached the age of 70 years on 30th September 1998 will be
proposed at the Annual General Meeting in terms of Section 211 of
the Companies Act No. 07 of 2007.
A resolution for the re-appointment of Deshabandu N.S. Jabir,
who reached the age of 70 years on 24th July 2008 will be proposed
at the Annual General Meeting in terms of Section 211 of the
Companies Act No. 07 of 2007.
In accordance with Articles 87 and 88 of the Articles of Association
of the Company, Mr. Riyal Yakoob retires by rotation and, being
eligible, is recommended for re-election.
{4 5 }
Interest Register
The Company maintains an Interest Register in terms of the
Companies Act No. 07 of 2007.
All related party transactions which encompass the transactions of
Directors who were directly or indirectly interested in a contract or
a related party transaction with the Company during the accounting
period is recorded in the Interest Register in due compliance with
the applicable rules and regulations of the relevant Regulatory
Authorities.
The Auditors have expressed their willingness to continue in office.

A resolution to re-appoint the Auditors and to authorise the Directors
to determine their remuneration will be proposed at the Annual
General Meeting.
Stated Capital
The Stated Capital of the Company is Rs. 256,305,197/- divided into
16,000,000 Ordinary Shares.
Directors Shareholdings
The shareholdings of the Directors of the Company are as follows:
The relevant interests of Directors in the shares of the Company as at

31st March 2014 are recorded in the Interest Register and details are
given in this Report under Directors Shareholdings.
As at
No. of Shares
31.03.2014
31.03.2013
61,700
61,700
1,701,867
1,701,867
824,305
824,305
Directors
Directors Remuneration
The Directors remuneration is disclosed in Note 22 to the financial

statements on page 83.
Mr. Yakooth Naleem
Directors Interests in Contracts
30,000
30,000
The Directors have no direct or indirect interests in any contract or

proposed contracts with the Company except for the transactions
referred to in Note 30 to the financial statements.
10,000
10,000
Mr. Ilyas Naleem
1,548,600
1,548,600
Mr. Kamil Naleem
1,603,924
1,653,924
Directors Responsibility for Financial Reporting
Mr. Mubarak Naleem
1,660,908
1,660,908
The Directors are responsible for the preparation of financial

statements of the Company and to ensure that they reflect a true and
fair view of the state of its affairs. A further statement in this regard is
included on page 44.
Major Shareholders, Distribution Schedule and

Other Information
Auditors
Messrs Ernst & Young, Chartered Accountants served as the
Auditors during the year under review. As far as the Directors are
aware, the Auditors only relationship with the Company is in regard
to their work relating to the audit and the computation that they do in
regard to taxation.
The audit fee payable for the year under review are Rs. 2,301,000/-.
The Auditors have also provided tax compliance services during the
year and the fee payable in this regard amounts to Rs. 334,080/-.
{46 }
Bairaha Farms PLC
Mr. Riyal Yakoob
Information on the twenty largest shareholders of the Company,

distribution schedule of the shareholders and market value per share
are given as per the Listing Rules of the Colombo Stock Exchange
on pages 93 and 94 under Investor Information.
Public Holding
53.49% of the issued shares of the Company are in the hands of
the public.
Reserves
The movements of reserves during the year are given under the
Statement of Changes in Equity on page 51.
Land Holdings
Audit Committee
Details of Companys ownership of lands are given in Note 4.1.5 of

the financial statements.
Desamanya C.P. de Silva - Chairman

Mr. Ilyas Naleem
Capital Expenditure
The total capital expenditure during the year amounted to
Rs. 242 Mn compared to Rs. 389 Mn incurred in the previous year.
Details of movements in property, plant & equipment are given under
Notes 4.17 and 4.2 to the financial statements.
Remuneration Committee
Dividend
Desamanya Prof. M.T.A. Furkhan - Chairman

Mr. Ilyas Naleem
A first and a final dividend of Rs. 1.25/- per share was declared for
the year ended 31st March 2014.
Annual General Meeting
Statutory Payments
The Directors confirm that to the best of their knowledge, all taxes, duties
and levies payable by the Company, and all contributions, levies and taxes
payable on behalf of, and in respect of employees of the Company and all
other known statutory dues as were due and payable by the Company as
at the reporting date have been paid or, where relevant provided for.
Donations
The Company has made donations for charitable purposes
amounting to Rs. 1,003,587/- (2013 - Rs. 1,626,661/-) for the year
ended 31st March 2014.
Events Occurring after the Reporting Date

No circumstances have arisen since the reporting date,
which would require adjustment to, or disclosure in the
financial statements except the item in Note 31 of the financial
statements in regard to the investment in the feedmill joint-venture
project, and the dividend declared for the year ended 31st March
2014.
Corporate governance practices and principles with respect to
the management and operations of the Company are set out on
pages 30 to 32 of this Report. The Directors confirm that the
Company has complied with the rules on corporate governance
contained in the Listing Rules of the Colombo Stock Exchange.
The Annual General Meeting will be held at the Bougainvillea

Ballroom, Galadari Hotel, 64 Lotus Road, Colombo 1 at 11.30 a.m.
on Wednesday the 25th of June 2014. The Notice of the Annual
General Meeting appears on page 97.
By Order of the Board
Bairaha Farms PLC
(Sgd.)
yakooth Naleem
Managing Director
(Sgd.)
Riyal Yakoob
Executive Director
(Sgd.)
P W Corporate Secretarial (Pvt) Ltd.
Secretaries
12th May 2014
Colombo
An Audit Committee as well as a Remuneration Committee

function as Sub Committees of the Board and they are composed
of Directors with the requisite qualifications and experience. The
composition of the said Committees is are follows:
{4 7 }
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF BAIRAHA FARMS PLC

Report on the Financial Statements
We have audited the accompanying financial statements of Bairaha
Farms PLC ("Company"), the consolidated financial statements of
the Company and its subsidiaries which comprise the statements
of financial position as at 31 March 2014, the statements of
comprehensive income, statements of changes in equity and
cash flow statements for the year then ended, and a summary of
significant accounting policies and other explanatory notes.
Managements Responsibility for the Financial

Statements
Management is responsible for the preparation and fair presentation
of these financial statements in accordance with Sri Lanka
Accounting Standards. This responsibility includes: designing,
implementing and maintaining internal control relevant to the
preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Scope of Audit and Basis of Opinion

Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with Sri Lanka Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material
misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting policies used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation.
{48 }
Bairaha Farms PLC
We have obtained all the information and explanations which to the

best of our knowledge and belief were necessary for the purposes of
our audit. We therefore believe that our audit provides a reasonable
basis for our opinion.
Opinion
In our opinion, so far as appears from our examination, the Company
maintained proper accounting records for the year ended 31 March
2014 and the financial statements give a true and fair view of the
Companys financial position as at 31 March 2014 and the financial
performance and cash flows for the year then ended in accordance
with Sri Lanka Accounting Standards.
In our opinion, the consolidated financial statements give a true and fair
view of the financial position as at 31 March 2014 and the financial
performance and cash flows for the year then ended, in accordance with
Sri Lanka Accounting Standards, of the Company and its subsidiaries dealt
with thereby, so far as concerns the shareholders of the Company.
Report on Other Legal and Regulatory Requirements

These financial statements also comply with the requirements of
Sections 151(2) and 153(2) to 153(7) of the Companies Act No. 07
of 2007.
(Sgd.)
Ernst & Young
Chartered Accountants
12th May 2014.
Colombo

Group
As at
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
4
5
6.1
6.2
7
8
10
1,565,362,620
4,732,697
81,127,427
1,885,592
134,265,244
1,787,373,580
1,436,004,587
4,400,881
53,315,887
1,121,013
128,560,385
1,623,402,753
672,989,806
4,732,697
160,691,050
2,895,010
15,162,700
1,885,592
45,570,116
903,926,971
612,067,339
4,400,881
160,691,050
2,895,010
15,162,700
1,121,013
26,015,075
822,353,068
9
10
11
98,720,350
149,131,650
282,547,119
31,235,343
21,459,599
160,555,857
743,649,918
2,531,023,498
85,330,534
156,061,155
278,367,854
23,631,650
19,703,162
165,928,647
729,023,002
2,352,425,755
66,455,718
77,578,594
376,168,897
24,986,289
408,801,082
136,951,963
1,090,942,543
1,994,869,514
52,528,084
86,753,570
293,051,717
23,779,017
327,621,897
132,636,062
916,370,347
1,738,723,415
256,305,197
247,928,384
(362,407)
(8,315,350)
576,677
1,322,731,559
1,818,864,060
256,305,197
249,923,859
(125,986)
576,677
1,208,889,633
1,715,569,380
256,305,197
120,827,240
(362,407)
(8,315,350)
576,677
647,893,049
1,016,924,406
256,305,197
122,362,131
(125,986)
576,677
637,475,499
1,016,593,518
158,846,752
49,098,588
41,526,749
249,472,089
153,337,980
43,301,974
27,092,932
223,732,886
135,165,466
35,739,893
37,640,241
208,545,600
126,547,705
35,378,149
24,087,914
186,013,768
365,945,249
3,490,836
93,251,264
462,687,349
2,531,023,498
358,565,446
3,024,779
51,533,264
413,123,489
2,352,425,755
447,206,110
3,490,836
240,259,434
78,443,128
769,399,508
1,994,869,514
297,038,155
3,024,779
199,360,923
36,692,272
536,116,129
1,738,723,415
Note
ASSETS
Non-Current Assets
Property, Plant & Equipment
Intangible Assets
Investments in Subsidiaries
Investments in Joint Ventures
Investments in Associate
Other Investments
Biological Assets
Current Assets
Inventories
Biological Assets
Trade & Other Receivables
Income Tax Receivable
Amounts Due from Related Parties
Cash & Bank Balances
Total Assets
EQUITY & LIABILITIES
Equity
Stated Capital
Revaluation Surplus
Available-for-Sale Reserve
Actuarial Gain on Defined Benefit Plans
Other Reserves
Retained Earnings
Total Equity
Non-Current Liabilities
Financing & Lease (Ijara) Payable
Deferred Tax Liabilities
Retirement Benefit Liability
Current Liabilities
Trade & Other Payables
Dividends Payable
Amounts Due to Related Parties
Financing & Lease (Ijara) Payables
Total Equity and Liabilities
Company
2014
12
25
13
14
14
15
23.2
16
17
18
19
15
These financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.
(Sgd.)
Ahamed Zahiri
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 by,
(Sgd.) (Sgd.)
Yakooth Naleem
Riyal Yakoob
Managing Director
Executive Director
The accounting policies and notes on pages 53 through 92 form an integral part of the financial statements.
12th May 2014
Colombo
{4 9 }

Group
2014
Year ended 31st March

Note
Revenue
2013
Company
2014
Rs.
2013
Rs.
3,054,158,411
2,917,525,754
2,431,409,240
2,418,474,149
(2,612,802,062)
(2,485,415,219)
(2,236,935,860)
(2,159,401,902)
441,356,349
432,110,535
194,473,380
259,072,247
19,298,447
16,796,988
32,235,610
76,693,390
Distribution Costs
(146,276,212)
(119,695,563)
(97,203,304)
(88,283,456)
Administrative Expenses
(143,397,848)
(141,879,208)
(74,427,524)
(101,791,419)
(624,923)
(670,755)
(575,826)
(641,044)
Cost of Sales
Gross Profit
Other Operating Income
20
Other Operating Expenses

Finance Cost
21
(39,052,671)
(22,594,655)
(11,501,738)
(16,489,116)
Profit before Tax
22
131,303,142
164,067,342
43,000,598
128,560,602
27,811,351
19,794,730
(21,271,568)
(22,380,524)
(8,583,048)
(8,190,593)
137,842,925
161,481,548
34,417,550
120,370,009
(236,421)
(61,812)
(236,421)
(61,812)
Share of profit from Associate Company

Income Tax Expense
23
Profit for the Year
Other Comprehensive Income

Fair Value Losses - Other Investments
Actuarial Gain on Defined Benefit Plans
(9,299,275)
Other Comprehensive Income for the Year
(9,535,696)
(61,812)
(9,535,696)
(61,812)
128,307,229
161,419,736
24,881,854
120,308,197
137,842,925
161,481,548
34,417,550
120,370,009
(9,299,275)
Profit Attributable to:

Equity Holders of the Parent
Non-Controlling Interest
137,842,925
161,481,548
34,417,550
120,370,009
128,307,229
161,419,736
24,881,854
120,308,197
Total Comprehensive Income Attributable to:

Equity Holders of the Parent
Non-Controlling Interest
Earnings per Share - Basic
24
128,307,229
161,419,736
8.62
10.09
{50 }
Bairaha Farms PLC
24,881,854
120,308,197
Statement of Changes in Equity
Year ended 31st March 2014
Stated
Capital
Revaluation
Surplus
Available-forSale
Reserves
Actuarial Gain on
Defined Benefit
Plans
Other
Reserves
Retained
Earnings
Total
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
256,305,197
253,249,938
(64,174)
576,677
1,079,408,085
1,589,475,723
161,481,548
161,481,548
GROUP
Balance as at 01st April 2012
Profit for the Year
Realised Revaluation Surplus on

Dividends
Balance as at 31st March 2013
256,305,197
(3,326,079)
249,923,859
Profit for the Year
Deferred Tax Impact on Retirement

Benefit Obligation - Gratuity

Dividends
Balance as at 31 March 2014
(1,995,475)
(61,812)
(3,326,079)
(61,812)
(125,986)
(236,421)
576,677
983,925
(1,995,475)
(64,174)
137,842,925
983,925
123,683,381
137,842,925
(9,535,696)
256,305,197
1,715,569,380
(362,407)
1,208,889,633
247,928,384
(32,000,000)
(9,299,275)
256,305,197
(32,000,000)
(8,315,350)
(24,000,000)
(24,000,000)
576,677
1,322,731,559
1,818,864,060
576,677
549,105,490
929,606,571
120,370,009
120,370,009
COMPANY
Balance as at 01st April 2012
Profit for the Year

Dividends
256,305,197
(1,321,250)
122,362,131
Profit for the Year
Deferred Tax Impact on Retirement

Benefit Obligation - Gratuity

Dividends
256,305,197
(1,534,891)
120,827,240
(61,812)
(1,321,250)
(61,812)
(125,986)
(236,421)
576,677
(32,000,000)
637,475,499
1,016,593,518
34,417,550
34,417,550
(9,299,275)
(9,535,696)
983,925
983,925
(1,534,891)
(362,407)
(32,000,000)
(8,315,350)
576,677
(24,000,000)
(24,000,000)
647,893,049
1,016,924,406
{5 1 }
Cash Flow Statement

Group

Note
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Cash Flows from/(used in) Operating Activities

Net Profit before Income Tax Expense
131,303,142
164,067,342
43,000,598
128,560,602
Adjustments for:

Allowance for Weight Loss
Depreciation

Realised Revaluation Surplus on Disposal of Property, Plant & Equipment
Deferred Tax Impact on Retirement Benefit Obligation - Gratuity
Intangible Assets Amortisation
22
2,483,750
3,416,189
2,483,750
3,416,189
110,220,033
86,239,541
56,637,460
47,180,898
(1,995,475)
(3,326,079)
(1,534,891)
(1,321,250)
983,925
5
667,740
983,925
585,349
667,740
585,349
(72,969,543)
Income from Investments
20
(1,201)
(2,788)
(23,411,943)
Profit on Disposal of Property, Plant & Equipment
20
(999,228)
(2,039,315)
(734,942)
(634,501)
Finance Cost
21
39,052,671
22,594,655
11,501,738
16,489,116
Provision for Defined Benefit Plans
16
6,731,461
5,629,148
5,628,068
5,575,033
Allowance for Bad & Doubtful Debts
22
15,341,667
5,508,171
13,147,913
3,768,169
Operating Profit before Working Capital Changes
303,788,485
282,672,213
108,369,416
130,650,063
Increase in Inventories
(15,873,565)
(2,537,467)
(16,411,383)
(5,795,277)
6,929,505
(40,196,064)
9,174,976
(15,629,344)
(Increase)/Decrease in Biological Assets
(Increase)/Decrease in Trade and Other Receivables
(19,520,932)
4,146,447
(96,265,093)
(46,811,562)
Increase/(Decrease) in Related Company Balances (Net)
(1,756,437)
16,869,086
(40,280,674)
(102,024,281)
95,747,736
Increase in Trade and Other Payables

Cash Generated from Operations

Finance Costs Paid
21
Defined Benefit Plan Costs Paid
16
7,378,614
144,468,365
150,167,954
280,945,669
405,422,580
114,755,196
56,137,335
(39,052,671)
(22,594,655)
(11,501,738)
(16,489,116)
(1,596,919)
(1,294,870)
(1,375,016)
(1,065,920)
Income Tax Paid
(23,078,647)
(51,131,434)
(9,428,576)
(7,296,675)
Net Cash Flows from Operating Activities
217,217,432
330,401,621
92,449,866
31,285,624
Cash Flows from/(used in) Investing Activities

Acquisition of Property, Plant & Equipment
(241,844,903)
(389,061,991)
(118,751,771)
(122,120,245)
Acquisition of Intangible Assets
(999,556)
(1,302,378)
(999,556)
(1,302,378)
Investment in Subsidiaries
Investment in Joint Ventures
(1,000)
(10)
Investment in Quoted Shares
(1,001,000)
Proceeds from Sale of Property, Plant & Equipment
3,266,066
8,468,332
1,926,787
1,610,268
Net Acquisition of Biological Assets
(5,704,859)
(6,298,825)
(19,555,041)
34,904,670
Dividend Received
1,201
2,788
23,411,943
72,969,543
(246,283,051)
(388,192,074)
(114,968,638)
(13,939,152)
22
Net Cash Flows used in Investing Activities
(1,001,000)
Cash Flows from/(used in) Financing Activities

Dividend Paid
18
(23,533,943)
(31,990,226)
(23,533,943)
(31,990,226)
Proceeds from Financing and Lease (Ijara)
15
140,276,132
151,090,435
127,376,132
146,590,435
Repayment of Financing Payable
15
(87,641,691)
(62,154,268)
(85,993,741)
(62,154,268)
Principal Payment under Lease (Ijara)
15
(11,329,979)
(11,031,117)
(1,436,302)
17,770,519
45,914,824
17,848,448
51,009,639
Net Cash Flows from Financing Activities
(11,295,100)
(11,875,629)
(4,670,324)
68,356,111
Cash & Cash Equivalents at the beginning of the Year
25
161,413,033
173,288,662
132,636,062
64,279,951
Cash & Cash Equivalents at the end of the Year
25
150,117,933
161,413,033
127,965,737
132,636,062
Net Increase/(Decrease) in Cash & Cash Equivalents
{52 }

1. Corporate Information
1.1 General
Bairaha Farms PLC (Company), is a public quoted company
incorporated and domiciled in Sri Lanka. The registered office of the
Company is located at No. 407, Galle Road, Colombo 03.
Subsidiary Companies
BF Land Development Ltd.
Golden Rooster Restaurants (Pvt) Ltd.
Siyane Farms Ltd.
1.3 Date of Authorisation for Issue

The financial statements of Bairaha Farms PLC and subsidiary
companies, for the year ended 31st March 2014 were authorised
for issue by the Board of Directors on 12th May 2014.
2.1 Basis of Preparation

The financial statements which comprise, Statement of Financial
Position, the Statement of Comprehensive Income, Statement of
Changes in Equity and the Cash Flow Statement, together with the
accounting policies and notes (the financial statements) have been
prepared on a historical cost basis, except for, all property, plant
& equipment other than assets classified as plant and machinery,
available-for-sale financial assets and consumable biological assets
that have been measured at fair value. The financial statements are
presented in Sri Lankan Rupees.

Natures Best Industry Ltd.
Regency Real Estate Company Ltd.
2.1.1 General Policies
The principal places of business of Hill Country Farms Ltd., and

Bairaha Foods (Pvt) Ltd., are situated at Batadole Road, Ellakkala,
Pasyala and Ellalamulla, Pasyala respectively. All other companies,
principal places of their business are at the same place where the
registered office is situated.
2.1.2 Statement of Compliance
The Company refers to Bairaha Farms PLC as the Holding

Company and the Group refers to the Company and all
its subsidiaries.
The financial statements of the Group have been prepared in

accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) as
issued by The Institute of Chartered Accountants of Sri Lanka and
the preparation and presentation of these financial statements is in
compliance with the Companies Act No. 07 of 2007.
Joint Ventures
2.1.3 Going Concern

The Directors have made an assessment of the Groups ability

to continue as a going concern and they do not intend either to
liquidate or to cease operations.
1.2 Principal Activities and Nature of Operations
2.1.4 Comparative Information
The main activity of the Group centres around integrated poultry

farming. The subsidiaries and related companies in the Group
support and complement the activities of Bairaha Farms PLC,
which is the Holding Company.
The accounting policies have been consistently applied by the Group

with those of the previous financial year.
Associate Company
Within the purview of integrated poultry farming, the activities

covered range from breeding of poultry, production of broiler
day-old chicks, processing and marketing of its own brand of
Bairaha broiler chicken and cut-ups, and marketing of a diverse
range of products required by the livestock sector, specially the
Antec range of disinfectants from the United Kingdom. Bairaha
Farms PLC being the pioneer quality packeted chicken processor
owns and manages a large-scale state-of-the-art chicken
processing, freezing and cold storage complex.
The Company applied LKAS 19-Employee Benefits (Revised in

2013) in the current period. Accordingly Actuarial Gain or Loss is
recognised in full in Other Comprehensive Income whereas it was
previously recognised in full in the Income Statement. The Financial
Statements for the previous year have not been restated to recognise
Actuarial Gain or Loss in Other Comprehensive Income as the effect
is immaterial.
{5 3 }
Bairaha Farms PLC
2.1.5 Basis of Consolidation
Fair Value of Property, Plant & Equipment
(a) The consolidated financial statements include the results, assets

and liabilities of the Company and its subsidiaries as at 31st March.
The financial statements of the subsidiaries are prepared for the
same reporting year as the Company.
All property, plant & equipment except the assets classified as Plant
& Machinery of the Group are reflected at fair value. The Group
engaged independent valuation specialist to determine fair value of
certain property, plant & equipment. Further details are given in
Note 04.
(b) All Intra-Group balances; transactions and profits and losses are
eliminated on consolidation. Subsidiaries are fully-consolidated from
the date of acquisition, being the date on which the Group obtains
control, and continued to be consolidated until the date that such
control ceases.
2.2 Significant Accounting Judgments, Estimates

and Assumptions
The preparation of the Group financial statements requires
management to make judgments, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the reporting
date. In the process of applying the Group accounting policies, the
key assumptions made relating to the future and the sources of
estimation at the reporting date together with the related judgments
that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within next financial year
are discussed below.
Impairment Losses on Trade Receivables

The Group review individually significant receivables at each
reporting date to assess whether an impairment loss should be
recorded in the Statement of Comprehensive Income. In particular,
judgment of the management is required in the estimation of the
amount and timing of future cash flows when determining the
impairment loss. These estimates are based on assumptions about
a number of factors and actual results may differ, resulting in future
changes to the impairment allowance.
2.3 Summary of Significant Accounting Policies

The significant accounting policies applied by the Group in
preparation of its financial statements are included below.
2.3.1 Foreign Currency Translation
The defined benefit obligation and the related charge for the year
are determined using actuarial valuations. The actuarial valuation
involves making assumptions about discount rates, future salary
increases, mortality rates etc. Due to the long-term nature of such
obligations, these estimates are subject to significant uncertainty.
Further details are given in Note 16.
The financial statements are presented in Sri Lankan Rupees, which

is the Groups functional and presentation currency. Transactions in
foreign currencies are initially recorded at the functional currency rate
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the functional
currency rate of exchange ruling at the reporting date. Non-monetary
items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of
the initial transactions. The resulting gains or losses are accounted
for in the Statement of Comprehensive Income.
Useful Lives of Property, Plant & Equipment
2.3.2 Taxation
Defined Benefit Plans
The Group reviews the residual values, useful lives and methods of
depreciation of assets as at each reporting date. Judgment of the
management is exercised in the estimation of these values, rates,
methods and hence they are subject to uncertainty.
(a) Current Taxes

Current income tax assets and liabilities for the current and prior periods
are measured at the amount expected to be recovered from or paid to the
Commissioner General of Inland Revenue. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted
by the reporting date.
The provision for income tax is based on the elements of income and
expenditure as reported in the financial statements and computed in
accordance with the provisions of the Inland Revenue Act.
{54 }
Bairaha Farms PLC
(b) Deferred Taxation
(c) Turnover based taxes
Deferred income tax is provided, using the liability method, on all

temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes.
Turnover based taxes include value added taxes, economic service

charge and nation building tax. Companies in the Group pay such
taxes in accordance with the respective statutes.
2.3.3 Borrowing Costs

Deferred income tax liabilities are recognised for all taxable
temporary differences except
where the deferred income tax liability arises from the initial
recognition of goodwill or the initial recognition of an asset or
liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit
nor the taxable profit or loss; and
in respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint
ventures, except where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible

temporary differences, carry forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences,
and the carry forward of unused tax assets and unused tax losses
can be utilised except
where the deferred income tax asset relating to the deductible

temporary difference arises from the initial recognition of an asset
or liability in a transaction that is not a business combination, and
at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; and
in respect of deductible temporary differences associated with
investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are only recognised to the extent
that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at

each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the
reporting date.
Borrowing costs directly attributable to the acquisition, construction

or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as
part of the cost of the respective assets. All other borrowing costs
are recognised as expenses in the period in which they are incurred.
2.3.4 Biological Assets and Agricultural Produce

A biological asset is a living animal or plant. Biological assets consist
of breeder birds, hatching eggs and broiler birds.
Consumable biological assets are those that are to be processed as
agricultural produce or sold as biological assets. Hatching eggs and
broiler birds have been identified as consumable biological assets.
In managements opinion, the fair value of the consumable biological
assets is substantially represented by formation cost, mainly due to
the short life cycle of the birds and the fact that a significant share
of the profits arises from the manufacturing process (i.e., as broiler
whole chicken, broiler portions and further processing meat) and not
from the live birds. Accordingly, the cost of consumable biological
assets approximates its fair value. Consumable biological assets
are measured on initial recognition and at the end of each reporting
period at its fair value less cost to sell.
Bearer biological assets are those other than consumable biological
assets. Bearer biological assets are not agricultural produce but,
rather, are self-regenerating. As per the ruling issued by The Institute
of Chartered Accountants in March 2012, preparers can choose
to either measure bearer biological assets at cost (using LKAS
16 - Property, Plant & Equipment) or at fair value under LKAS 41 Agriculture.
Group has identified breeder birds as bearer biological assets.
All initial and subsequent direct costs relating to breeder birds
are capitalised until the bird reaches its intended use (within 20
weeks). Subsequently, these are carried at cost less accumulated
amortisation over a period of 40 weeks.
{5 5 }
2.3.5 Inventories
Inventories are valued at the lower of cost and net realisable value,
after making due allowances for obsolete and slow-moving items.
Net realisable value is the estimated price at which inventories can
be sold in the ordinary course of business less the estimated cost of
completion and the estimated cost necessary to make the sale.
The cost incurred in bringing inventories to its present location and
condition is accounted as follows:
2.3.5.1 Broiler Meat

Broiler meat is valued at prime cost together with an appropriate
proportion of overheads on weighted average basis, after making
due allowance for weight losses.
2.3.5.2 Poultry Feed, Drugs and Sundry Inventories

Poultry feed, drugs and sundry inventories are valued at actual cost
on weighted average basis after making due allowance for obsolete
and slow-moving items.
2.3.5.3 Trading Inventories

Trading inventories which include retail items for sale are valued at
actual cost on weighted average basis.
2.3.6 Cash and Cash Equivalents

Cash and cash equivalents are defined as cash in hand, demand
deposits and short-term highly liquid investments, readily convertible
to known amounts of cash and subject to insignificant risk of
changes in value.
For the purpose of cash flow statement, cash and cash equivalents
consist of cash in hand, demand deposits and short-term highly
liquid investments as defined above net of outstanding bank
overdrafts.
2.3.7 Property, Plant & Equipment

(a) Cost and Valuation
All items of property, plant & equipment are initially recorded at
cost. Where items of property, plant & equipment are subsequently
revalued, the entire class of such assets is revalued. Revaluations are
made with sufficient regularity to ensure that their carrying amounts
do not differ materially from their fair values at the reporting date.
{56 }
Bairaha Farms PLC
Subsequent to the initial recognition as an asset at cost, revalued

property, plant & equipment are carried at revalued amounts less
any subsequent depreciation thereon. All other property, plant &
equipment are stated at historical cost less depreciation and less any
impairment in value.
Any revaluation surplus is recognised in Other Comprehensive Income
and accumulated in equity in the asset revaluation reserve, except to
the extent that it reverses a revaluation decrease of the same asset
previously recognised in the profit or loss, in which case the increase
is recognised in the profit or loss. A revaluation deficit is recognised in
the profit or loss, except to the extent that it offsets an existing surplus
on the same asset recognised in the asset revaluation reserve. Upon
disposal, any revaluation reserve relating to the particular asset being
sold is transferred to retained earnings.
(b) Restoration Costs

Expenditure incurred on repairs or maintenance of property, plant
& equipment in order to restore or maintain the future economic
benefits expected from originally assessed standard of performance,
is recognised as an expense when incurred.
(c) Depreciation
The provision for depreciation is calculated by using straight-line
method on the cost or valuation of all property, plant & equipment
other than freehold land, in order to write-off such amounts over the
estimated useful lives by equal instalments.
Depreciation of an asset begins when it is available for use, i.e.,
when it is in the location and condition necessary for it to be capable
of operating in the manner intended by management.
An item of property, plant & equipment and any significant part
initially recognised is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain
or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is included in the Statement of Comprehensive
Income when the asset is derecognised.
The assets residual values, useful lives and methods of depreciation
are reviewed, and adjusted if appropriate, at each financial year end.
2.3.8 Leases
(a) Finance Leases - Where the Company is the Lessee
Property, plant & equipment on finance leases, which effectively
transfer to the Group substantially all the risk and benefits incidental
to ownership of the leased item are capitalised at their fair value or
if lower, at the present value of the minimum lease payments and
disclosed as property, plant & equipment and depreciated over
the period the Group is expected to benefit from the use of the
leased assets.
The corresponding principal amount payable to the lessor together
with the interest payable over the period of the lease is shown as
a liability. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability.
Finance charges that are charged, are reflected in the Statement of
Comprehensive Income.
(b) Operating Leases

Leases where the lessor effectively retains substantially all the risk
and benefit of ownership over the lease term are classified as
operating leases.
Rentals paid under operating leases are recognised as an expense
comprise in the Statement of Comprehensive Income on a straight
line basis over the lease term.
2.3.9 Intangible Assets

Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less any accumulated amortisation and any
accumulated impairment losses.
Intangible assets with finite lives are amortised over the useful
economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible
asset with a finite useful life is reviewed at least at each financial
year end.
Changes in the expected useful life or the expected pattern of

consumption of future economic benefits embodied in the asset
is accounted for by changing the amortisation period or method,
as appropriate, and treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite lives
is recognised in the Statement of Comprehensive Income in the
expense category consistent with the function of the intangible asset.
The useful life of the intangible asset is as follows:
The Class of Intangible Assets Useful Life
Amortisation Method
Computer Software
Straight-line method
10 Years
2.3.10 Financial Instruments - Initial Recognition and

Subsequent Measurement
(i) Financial Assets
Financial assets within the scope of LKAS 39 are classified as
financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments and available-for-sale
financial assets, as appropriate and determine the classification
of its financial assets at initial recognition. All financial assets are
recognised initially at fair value plus, in the case of assets not at fair
value through profit or loss, directly attributable transaction costs.
Groups financial instruments consist of loans and receivables and
Available-for-sale financial instruments, of which accounting policies
on subsequent measurement, impairment and de-recognition are set
out below:
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed

or determinable payments that are not quoted in an active market.
After initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest rate method
(EIR), less impairment. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included
in finance income in the Statement of Comprehensive Income. The
losses arising from impairment are recognised in the Statement of
Comprehensive Income in distribution cost.
Loans and receivables are presented as cash and bank balance,
trade and other receivables, and amounts due from related parties
on the Statement of Financial Position.
{5 7 }
Available-for-Sale Financial Investments
Derecognition
Available-for-sale financial investments include equity securities.

Equity investments classified as available-for-sale are those, which
are neither classified as held for trading nor designated at fair value
through profit or loss.
A financial asset (or, where applicable a part of a financial asset or part

of a group of similar financial assets) is derecognised when -
After initial measurement, available-for-sale financial investments

are subsequently measured at fair value with unrealised gains or
losses recognised as Other Comprehensive Income in the
available-for-sale reserve until the investment is derecognised,
at which time the cumulative gain or loss is recognised in other
operating income, or determined to be impaired, at which time the
cumulative loss is reclassified to the profit or loss in finance costs
and removed from the available-for-sale reserve.
The Group evaluates its available-for-sale financial assets to
determine whether the ability and intention to sell them in the near
term is still appropriate. When the Group is unable to trade these
financial assets due to inactive markets and managements intention
to do so significantly changes in the foreseeable future, the Group
may elect to reclassify these financial assets in rare circumstances.
Reclassification to loans and receivables is permitted when the
financial assets meet the definition of loans and receivables and
the Group has the intent and ability to hold these assets for the
foreseeable future or until maturity. Reclassification to the
held-to-maturity category is permitted only when the entity has the
ability and intention to hold the financial asset accordingly.
For a financial assets reclassified out of the available-for-sale
category, any previous gain or loss on that asset that has been
recognised in equity is amortised to profit or loss over the remaining
life of the investment using the EIR. Any difference between the
new amortised cost and the expected cash flows is also amortised
over the remaining life of the asset using the EIR. If the asset is
subsequently determined to be impaired, then the amount recorded
in equity is reclassified to profit or loss.
Available-for-sale financial investments are presented as other
investments on the Statement of Financial Position.
{58 }
Bairaha Farms PLC
(i) The rights to receive cash flows from the asset have expired;
(ii) The Group has transferred its rights to receive cash flows from
the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a passthrough arrangement; and either
The Group has transferred substantially all the risks and rewards
of the asset; or
The Group has neither transferred nor retained substantially all
the risks and rewards of the asset, but has transferred control of
the asset.
(ii) Impairment of Financial Assets

The Group assesses at each reporting date whether there is any
objective evidence that a financial asset or a group of financial
assets is impaired. A financial asset or a group of financial assets is
deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after
the initial recognition of the asset and that loss event has an impact
on the estimated future cash flows of the financial asset or the group
of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a
group of debtors is experiencing significant financial difficulty, default
or delinquency in payments, the probability that they will enter
bankruptcy or other financial reorganisation and where observable
data indicate that there is a measurable decrease in the estimated
future cash flows, such as changes in arrears or economic conditions
that correlate with defaults.
Financial Assets Carried at Amortised Cost
For financial assets carried at amortised cost, the Group first

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

incurred, the amount of the loss is measured as the difference
between the assets carrying amount and the present value of
estimated future cash flows (excluding future expected credit
losses that have not yet been incurred). The present value of the
estimated future cash flows is discounted at the financial assets
original effective interest rate. If a loan has a variable interest rate,
the discount rate for measuring any impairment loss is the current
effective interest rate.
The carrying amount of the asset is reduced through the use of an
allowance account and the amount of the loss is recognised in the
Statement of Comprehensive Income. Interest income continues
to be accrued on the reduced carrying amount and is accrued
using the rate of interest used to discount the future cash flows
for the purpose of measuring the impairment loss. The interest
income is recorded as part of finance income in the Statement
of Comprehensive Income. Loans together with the associated
allowance are written-off when there is no realistic prospect of
future recovery and all collateral has been realised or has been
transferred to the Group. If, in a subsequent year, the amount of the
estimated impairment loss increases or decreases because of an
event occurring after the impairment was recognised, the previously
recognised impairment loss is increased or reduced by adjusting
the allowance account. If a future write-off is later recovered,
the recovery is credited to distribution cost in the Statement of
Available-for-Sale Financial Investments
For available-for-sale financial investments, the Group assesses

at each reporting date whether there is objective evidence that an
investment or a group of investments is impaired.
In the case of equity investments classified as available-for-sale,
objective evidence would include a significant or prolonged decline
in the fair value of the investment below its cost. Significant is
evaluated against the original cost of the investment and prolonged
against the period in which the fair value has been below its original
cost. Where there is evidence of impairment, the cumulative loss
- measured as the difference between the acquisition cost and
the current fair value, less any impairment loss on that investment
previously recognised in the profit or loss - is removed from Other
Comprehensive Income and recognised in the profit or loss.
Impairment losses on equity investments are not reversed through
the profit or loss; increases in their fair value after impairments are
recognised directly in Other Comprehensive Income.
(iii) Financial Liabilities

Financial liabilities within the scope of LKAS 39 are classified as
financial liabilities at fair value through profit or loss, loans and
borrowings, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate. The Group determines the
classification of its financial liabilities at initial recognition and all
financial liabilities are recognised initially at fair value.

Groups financial liabilities consists of loans and borrowings of which
accounting policies on subsequent measurement, and derecognition
are set out below:
Loans and Borrowings
After initial recognition, interest-bearing loans and borrowings are

subsequently measured at amortised cost using the effective interest
rate method. Gains and losses are recognised in the Statement of
Comprehensive Income when the liabilities are derecognised as
well as through the Effective Interest Rate (EIR) method amortisation
process.
Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included in finance costs in the
Statement of Comprehensive Income.
The Groups loans and borrowings include trade and other payables,
bank overdrafts, financing and lease (ijara) payables, and amounts
due to related parties.
Derecognition
A financial liability is derecognised when the obligation under the

liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated
as a derecognition of the original liability and the recognition of a
new liability, and the difference in the respective carrying amounts is
recognised in the Statement of Comprehensive Income.
(iv) Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount
reported in the Statement of Financial Position if, and only if There is a currently enforceable legal right to offset the recognised
amounts; and
There is an intention to settle on a net basis, or to realise the
assets and settle the liabilities simultaneously.
{5 9 }
(v) Fair Value of Financial Instruments

The fair value of financial instruments that are traded in active
markets at each reporting date is determined by reference to quoted
market prices.
For financial instruments not traded in an active market, the fair
value is determined using appropriate valuation techniques. Such
techniques may include Using recent arms length market transactions
Reference to the current fair value of another instrument that is
substantially the same
A discounted cash flow analysis or other valuation models.
2.3.11 Investment in an Associate

Investments in associate companies are accounted for on the equity
method, whereby the share of profit of the associates attributable
to the Group is accounted for as income and the value of the
investment (which was initially recognised at cost) is adjusted by a
like amount.
An associate is an entity in which the Group has significant influence
and which is neither a subsidiary nor a joint venture.
In the separate financial statements of the Group, such investments
in associates are accounted for at cost.
2.3.12 Interest in a Joint Venture

The Groups interest in joint ventures is accounted for by
proportionate consolidation, which involves recognising a
proportionate share of the joint ventures assets, liabilities, income
and expenses with similar items in the Groups financial statements
on a line-by-line basis. The financial statements of the joint
venture are prepared for the same reporting period as the Group.
Adjustments are made where necessary to bring the accounting
policies of the joint venture in line with those of the Group.
Adjustments are made in the Groups Consolidated Financial
Statements to eliminate the Groups share of intra-group balances,
transactions and unrealised gains and losses on such transactions
between the Group and its jointly controlled entity. Losses on these
transactions are recognised immediately if the loss provides evidence
of a reduction in the net realisable value of current assets or an
impairment loss. The joint venture is proportionately consolidated
until the date on which the Group ceases to have joint control over
the joint venture.
{60 }
Bairaha Farms PLC
In the separate financial statements of the Company, such

investments in joint ventures are accounted for at cost.
2.3.13 Impairment of Assets

The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the assets recoverable amount.
An assets recoverable amount is the higher of an assets or cashgenerating units fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from
other assets or groups of assets. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
Impairment losses of continuing operations are recognised in the
Statement of Comprehensive Income in those expense categories
consistent with the function of the impaired asset, except for
property previously revalued where the revaluation was taken to
Other Comprehensive Income. In this case, the impairment is also
recognised in Other Comprehensive Income up to the amount of any
previous revaluation.
For assets excluding goodwill, an assessment is made at each
reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have
decreased. If such indication exists, the Group makes an estimate
of recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to
determine the assets recoverable amount since the last impairment
loss was recognised. If that is the case, the carrying amount of
the asset is increased to its recoverable amount. That increased
amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised
in the Statement of Comprehensive Income unless the asset is
carried at revalued amount, in which case the reversal is treated
as a revaluation increase. Impairment losses recognised in relation
to goodwill are not reversed for subsequent increases in its
recoverable amount.
2.3.14 Retirement Benefit Obligations
(a) Sale of Goods
(a) Defined Benefit Plan - Gratuity
Revenue from sale of goods is recognised when the significant risks

and rewards of ownership of the goods have passed to buyer; with
the Group retaining neither continuing managerial involvement to the
degree usually associated with the ownership, nor effective control
over the goods sold.
Employees are eligible to receive a gratuity payment of half-months

salary per year of service at the end of service provided the
employee has provided 5 years of service.
The liability recognised in the Statement of Financial Position is the
present value of defined benefit obligation at the reporting date
using the projected unit credit method. Any actuarial gains or
losses arising are recognised immediately in the Statement of Other
2.3.17 Other Operating Income

(a) Dividends
Dividend Income is recognised when the shareholders right to
receive the payment is established.
Funding Arrangements
(b) Rental income
The Gratuity liability is not externally funded.
Rental income is recognised on accrual basis.
(b) Defined Contribution Plans - Employees Provident Fund

and Employees Trust Fund
Employees are eligible for Employees Provident Fund contributions
and Employees Trust Fund contributions in line with respective
statutes and regulations. The Group contributes 12% and 3% of
gross emoluments of employees to Employees Provident Fund and
Employees Trust Fund respectively.
2.3.15 Provisions
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, where it is probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made
of the amount of the obligation.
2.3.16 Revenue Recognition

Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue and
associated costs incurred or to be incurred can be reliably measured.
Revenue is measured at the fair value of the consideration received
or receivable net of trade discounts and sales taxes. The following
specific criteria are used for the purpose of recognition of revenue:
(c) Others
Other income is recognised on an accrual basis
Net Gains and losses of a revenue nature on the disposal of
property, plant & equipment and other non-current assets
including investments have been accounted for in the Statement
of Comprehensive Income, having deducted from proceeds on
disposal, the carrying amount of the assets and related selling
expenses. On disposal of revalued property, plant & equipment,
amount remaining in Revaluation Reserve relating to that asset is
transferred directly to Accumulated Profit.
Gains and losses arising from incidental activities to main revenue
generating activities and those arising from a group of similar
transactions which are not material, are aggregated, reported and
presented on a net basis.
2.4 Standards Issued but Not Yet Effective

The following SLFRS have been issued by The Institute of Chartered
Accountants of Sri Lanka that have an effective date in the future
and have not been applied in preparing these financial statements.
Those SLFRS will have an effect on the accounting policies currently
adopted by the Group and may have an impact on the future
financial statements.
{6 1 }
(i) SLFRS 9 - Financial Instruments: Classification and

Measurement

SLFRS 9, as issued reflects the first phase of work on

replacement of LKAS 39 and applies to classification and
measurement of financial assets and liabilities.
This standard was originally effective for annual periods commencing

on or after 01st January 2015. However, the original effective date
has been deferred and revised effective date is yet to be announced.
(ii) SLFRS 13 - Fair Value Measurement
SLFRS 13 establishes a single source of guidance under SLFRS
for all fair value measurements.
This standard will be effective for annual periods beginning on or
after 01st January 2014. However use of fair value measurement
principles contained in this standard are currently recommended.
In addition to the above, following standards will also be effective for
annual periods commencing on or after 01st January 2014:

SLFRS 10 - Consolidated Financial Statements

SLFRS 11 - Joint Arrangements
SLFRS 12 - Disclosure of Interests in Other Entities
The above package of three standards will impact the recognition,

measurement and disclosures aspects currently contained in LKAS
27 - Consolidated and separate financial statements, LKAS 28 Investments in associates, LKAS 31 - Interest in joint ventures and
SIC - 12 and SIC 13 which are on consolidation of special purpose
entities (SPEs) and jointly controlled entities respectively.
Establishing a single control model that applies to all entities
including SPEs and removal of the option to proportionate
consolidate jointly controlled entities are the significant changes
introduced under SLFRS 10 and SLFRS 11 respectively.
{62 }
Bairaha Farms PLC
SLFRS 12, establishes a single standard on disclosures related

to interests in other entities. This incorporates new disclosures as
well as disclosures currently required under (as per ones previously
captured in earlier versions of) LKAS 27, LKAS 28 and LKAS 31.
The Group will adopt these standards when they become effective.
Pending the completion of detailed review, the financial impact is
not reasonably estimable as at the date of publication of these
financial statements.
3. Revenue
Group
Sale of Goods
2014
Rs.
2013
Company
2013
Rs.
2014
Rs.
3,054,158,411
2,917,525,754
2,431,409,240
2,418,474,149
3,054,158,411
2,917,525,754
2,431,409,240
2,418,474,149
Rs.
4. Property, Plant & Equipment

4.1 Group
4.1.1 Gross Carrying Amounts
Balance
as at
31.03.2014
Rs.
Balance
Additions/
Disposals/
as at
Transfers
Transfers
Rs.
Rs.
Rs.
Land
251,264,542
3,924,000
255,188,542
Buildings
171,615,935
50,084,988
221,700,923
10,584,250
3,066,638
13,650,888
Poultry Sheds
351,478,732
61,549,537
413,028,269
Plant & Machinery
379,382,872
127,174,722
506,557,594
Equipment
223,064,571
37,437,827
260,502,398
Furniture & Fittings
13,351,087
3,899,543
17,250,630
Motor Vehicles
62,295,883
18,354,707
(4,200,000)
76,450,590
5,382,551
1,835,269
(149,500)
7,068,320
1,468,420,423
307,327,230
01.04.2013
At Cost/Valuation
Buildings on Leasehold Land
Computer Equipment
(4,349,500) 1,771,398,153
Assets on Finance Leases

Motor Vehicles
Plant & Machinery
Total Value of Depreciable Assets
8,084,000
8,084,000
44,300,537
44,300,537
52,384,537
52,384,537
1,520,804,960
307,327,230
(4,349,500) 1,823,782,690
{6 3 }
4.1.2 In the Course of Construction

Balance
Additions/
Disposals/
as at
Transfers
Transfers
Rs.
Rs.
Rs.
Balance
as at
31.03.2014
Rs.
74,752,161
111,214,172
(176,696,492)
9,269,841
1,595,557,121
418,541,402
(181,045,992) 1,833,052,531
Balance
Charge for
Disposals/
as at
the Year/
Transfers
01.04.2013
Transfers
Rs.
Rs.
11,366,055
5,871,866
17,237,921
1,954,736
513,000
2,467,736
Poultry Sheds
37,939,050
22,656,543
60,595,593
Plant & Machinery
30,231,155
33,216,886
63,448,042
Equipment
54,813,511
29,970,501
84,784,012
1,920,605
1,440,772
3,361,377
14,678,624
10,982,746
(1,942,500)
23,718,870
2,946,825
1,586,022
(140,156)
4,392,691
155,850,560
106,238,338
(2,082,656)
260,006,242
Motor Vehicles
1,176,759
1,212,600
2,389,359
Plant & Machinery
2,525,215
2,769,095
5,294,310
3,701,974
3,981,695
7,683,669
159,552,534
110,220,033
01.04.2013
Capital Work-in-Progress
Total Gross Carrying Amount
4.1.3 Depreciation
Balance
as at
31.03.2014
Rs.
Rs.
At Cost/Valuation
Buildings

Motor Vehicles
Computer Equipment
Total Depreciation
{64 }
Bairaha Farms PLC
(2,082,656)
267,689,911
4.1.4 Net Book Values

Balance as at
Balance as at
31.03.2014
31.03.2013
Rs.
Rs.
Land
255,188,542
251,264,542
Buildings
204,463,002
160,249,880
11,183,153
8,629,515
Poultry Sheds
352,432,676
313,539,682
Plant & Machinery
443,109,552
349,151,717
Equipment
175,718,386
168,251,060
13,889,253
11,430,482
Motor Vehicles
52,731,719
47,617,259
2,675,629
2,435,727
1,511,391,911
1,312,569,863
5,694,641
6,907,241
39,006,227
41,775,322
44,700,868
48,682,563
9,269,841
74,752,161
1,565,362,620
1,436,004,587
At Cost/Valuation
Computer Equipment

Motor Vehicles
Plant & Machinery
In the Course of Construction

Total Carrying Amount of Property, Plant & Equipment
4.1.5 Group
The following assets were revalued on 31st March 2010 and the lands of joint venture companies were revalued on 31st March 2012 by Messrs
Ariyathilaka & Co. (Pvt) Ltd. an independent valuer. The results of such revaluation was incorporated in these financial statements from its effective
date which was and 31st March 2010 and 31st March 2012. The buildings and other assets were valued on the current replacement cost basis
and net replacement cost basis respectively. The surplus arising from the revaluation was transferred to a revaluation surplus.
{6 5 }
Freehold Land Carried at Revalued Amount/Cost

Company
Location
Last Revaluation
Land Extent
Date
Bairaha Farms PLC
Ginigama Estate - Hiripitiya
31.03.2010
20A-4R-19.5P
Carrying Value as
at 31.03.2014
Freehold Land
10,560,938
10,560,938
Ellakkala Estate - Pasyala
31.03.2010
39A-0R-28.9P
58,770,938
58,770,938
Kendalanda Estate - Urapola
31.03.2010
31A-3R-24.55P
19,027,500
19,027,500
H.C.F. Land Development Ltd.
31.03.2010
7A-0R-0P
3,500,000
Pahalahammillewa - Nikaweratiya
28A-1R-6.5P
9,446,975
Polgasagare Estate - Kalalpitiya
0A-0R-12.5P
1,250,000
2A-0R-0P
3,149,000
17,345,975
B.F. Lands Development Ltd.
Ellakkala Estate - Pasyala
31.03.2010
25A-2R-5.1P
51,063,750
Kondagahamulla Estate - Kondagahamulla
31.03.2010
6A-1R-0.6P
12,162,500
63,226,250
Siyane Farms Ltd.
St. Catherine Estate - Dolosbage
31.03.2010
24A-0R-15P
9,637,500
9,637,500
Nature's Best Industries Ltd.
Dangaswewa Estate - Anamaduwa
48A-2R-10P
31,911,222
31,911,222
Maloya Mukalanawatte - Galewela
31.03.2012
47A-3R-14.6P
15,079,438
15,079,438
Gurumadahenayaya - Galewela
7A-0R-0P
8,750,000
8,750,000
Nagane Estate - Kurunegala
36A-1R-27.8P
65,587,000
65,587,000
Total
{66 }
Bairaha Farms PLC
255,188,542
The carrying amount of revalued assets that would have been included in the financial statements had the assets been carried at cost less
depreciation is as follows:
Cost
Cumulative
Depreciation
if Assets were
Carried at Cost
Rs.
Rs.
Net
Carrying
Amount
2014
Rs.
Net
Carrying
Amount
2013
Rs.
Class of Assets
Land
49,259,921
Buildings
77,582,655
49,259,921
49,259,921
28,980,837
48,601,818
50,929,530
11,667,021
7,588,851
4,078,170
5,244,872
Poultry Sheds
102,394,440
58,440,213
43,954,227
50,122,566
Equipment
185,772,098
185,772,098
3,434,811
10,006,781
10,006,781
166,326
Motor Vehicles
20,239,285
20,239,285
Computer Equipment
10,765,244
10,765,244
Motor Vehicles
6,726,087
6,726,087
Equipment
2,501,730
2,501,730

511,690
4.1.6 During the financial year, the Group acquired property, plant & equipment to the aggregate value of Rs. 241,844,903/(2013 - Rs. 389,061,991/-). Cash payments amounting to Rs. 241,844,903/- (2013 - Rs. 389,061,991/-) was paid during the year for
purchases of property, plant & equipment.
4.1.7 The Useful Life of the Assets (Group/Company)
Buildings
Over 33.3 Years
Over 10 Years
Poultry Sheds
Over 16.6 Years
Plant & Machinery
Over 10 - 20 Years
Equipment
Over 8 Years
Over 10 Years
Motor Vehicles
Over 6.67 Years
Computer Equipment
Over 4 Years
{6 7 }
4.2 Company
4.2.1 Gross Carrying Amounts
Balance
Additions/
Disposals/
as at
Transfers
Transfers
01.04.2013
Rs.
Balance
as at
31.03.2014
Rs.
Rs.
10,560,938
145,023,242
5,130,000
Rs.
At Cost/Valuation
Land
Buildings
10,560,938
127,633,449
5,130,000
17,389,793
Poultry Sheds
119,591,928
37,131,199
156,723,127
Plant & Machinery
242,593,927
36,916,647
279,510,574
Equipment
134,955,617
25,348,629
160,304,246
7,668,579
3,248,393
10,916,972
35,843,782
8,773,722
(2,200,000)
42,417,504
4,738,524
1,781,969
(149,500)
6,370,993
688,716,744
130,590,352
(2,349,500)
816,957,596
16,886,174
43,895,669
(55,734,250)
5,047,593
705,602,918
174,486,021
(58,083,750)
822,005,189

Motor Vehicles
Computer Equipment
Total Value of Depreciable Assets
4.2.2 In the Course of Construction

Total Gross Carrying Amount
{68 }
Bairaha Farms PLC
4.2.3 Depreciation
Rs.
Balance
as at
31.03.2014
Rs.
3,979,676
13,513,853
1,539,000
513,000
2,052,000
Poultry Sheds
19,505,083
8,047,663
27,552,746
Plant & Machinery
13,153,363
17,745,466
30,898,829
Equipment
37,970,832
17,929,461
55,900,293
1,252,168
839,153
2,091,321
Motor Vehicles
8,080,120
6,139,484
(1,017,500)
13,202,104
Computer Equipment
2,500,836
1,443,557
(140,156)
3,804,237
93,535,579
56,637,460
(1,157,656)
149,015,383
Balance
Charge for
Disposals/
as at
the Year/
Transfers
01.04.2013
Transfers
Rs.
Rs.
Buildings
9,534,177
At Cost/Valuation
Total Depreciation
4.2.4 Net Book Values
At Cost/Valuation
Land
Buildings
Poultry Sheds
Plant & Machinery
Equipment
Motor Vehicles
Computer Equipment
In the Course of Construction
Total Carrying Amount of Property, Plant & Equipment
Balance as at
Balance as at
31.03.2014
31.03.2013
Rs.
Rs.
10,560,938
10,560,938
131,509,389
118,099,272
3,078,000
3,591,000
129,170,381
100,086,845
248,611,745
229,440,564
104,403,953
96,984,785
8,825,651
6,416,411
29,215,400
27,763,662
2,566,756
2,237,688
667,942,213
595,181,165
5,047,593
16,886,174
672,989,806
612,067,339
{6 9 }
4.2.5 Company
The fair value of Property, Plant & Equipment was determined by means of a revaluation during the financial year 2010 by Messrs Ariyathilaka
& Co. (Pvt) Ltd. an independent valuer. The results of such revaluation was incorporated in these Financial Statements from its effective date
which was 31st March 2010. The buildings and other assets were valued on the current replacement cost basis and net replacement cost
basis respectively. The surplus arising from the revaluation was transferred to a revaluation surplus.
The carrying amount of revalued assets that would have been included in the financial statements had the assets been carried at cost less
depreciation is as follows:
Cost
Cumulative
Depreciation
if Assets were
Carried at Cost
Rs.
Class of Assets
Land
Buildings
Poultry Sheds
Equipment
Motor Vehicles
Computer Equipment
6,273,718
61,153,496
Rs.
24,439,751
Net
Carrying
Amount
2014
Rs.
Net
Carrying
Amount
2013
Rs.
6,273,718
6,273,718
36,713,745
38,550,186
5,770,279
4,327,710
1,442,569
2,019,597
48,055,422
29,881,311
18,174,111
21,069,016
131,420,919
131,420,919
4,785,065
9,032,822
9,032,822
121,593
15,786,584
15,786,584
10,643,194
10,643,194
4.2.6 During the financial year, the Company acquired property, plant & equipment to the aggregate value of Rs. 118,751,771/(2013 - Rs. 122,120,245/-). Cash payments amounting to Rs. 118,751,771/- (2013 - Rs. 122,120,245/-) was paid during the year for
purchases of property, plant & equipment.
5. Intangible Assets (Group/Company)

5.1 Summary
Computer
Total
Software
Rs.
Rs.
6,164,341
6,164,341
999,556
999,556
7,163,897
7,163,897
1,763,460
1,763,460
Cost
As at 01st April 2013
Acquired during the Year
As at 31st March 2014
Amortisation
Amortisation for the Year
{70 }
Bairaha Farms PLC
667,740
667,740
2,431,200
2,431,200
Computer
Total
Software
Rs.
Rs.
4,400,881
4,400,881
4,732,697
4,732,697
Net Book Value
6. Investments in Subsidiaries and Joint Ventures

6.1 Subsidiaries
Country
Holding
Cost
2014
Rs.
Directors
Valuation*
2014
Rs.
of
Incorporation
%
Cost
Directors
Valuation*
2013
2013
Rs.
Rs.
Non-Quoted
Sri Lanka
100
54,000,000
175,482,506
54,000,000
150,200,531
Sri Lanka
100
3,750,000
25,873,981
3,750,000
24,431,975
Sri Lanka
100
2,100,000
13,089,861
2,100,000
13,109,234
Sri Lanka
100
5,300,000
7,321,897
5,300,000
7,454,865
Sri Lanka
100
10,540,000
64,367,788
10,540,000
64,136,173
Sri Lanka
100
2,000,000
Siyane Farms Ltd.
Sri Lanka
100
35,000,050
526,653,379
35,000,050
484,666,915
Natures Best Industries Ltd.
Sri Lanka
100
50,000,000
70,684,480
50,000,000
56,189,391
Sri Lanka
100
1,000
Total Non-Quoted Investments in Subsidiaries

Allowance for Impairment Losses
Total Carrying Value of Investments in Subsidiaries
162,691,050
883,473,892
2,000,000
1,000
162,691,050
(2,000,000)
(2,000,000)
160,691,050
160,691,050
800,189,084
* Directors Valuation of Shares is on Net Assets Basis.
6.1.1 Board of Directors decided to wind-up the business activities of Golden Rooster Restaurants (Pvt) Ltd., during the financial year 2001/02.
Accordingly, the movable assets of the Company were sold after calling for tender. Full provision has been made for this investment.
{7 1 }
6.2 Joint Ventures

Carrying Value
Holding
Carrying Value
Holding
2014
2014
2013
2013
Rs.
Rs.
1,495,000
50
1,495,000
50
1,400,000
50
1,400,000
50
10
50
10
50
2,895,010
2,895,010
6.2.1 Rajarata Land Development Ltd., Cultural Triangle Land Development Ltd. and Windsor Real Estate Ltd. holds lands on behalf of the
Group.
6.2.2 Company Share of Financial Details of Joint Ventures:

2014
2013
Rs.
Rs.
44,708,219
44,708,219
1,575,565
1,472,533
34,245,524
34,142,680
Income
327,485
163,708
Expense
251,603
131,311
Non-Current Assets
Current Assets
Current Liabilities
{72 }
Bairaha Farms PLC
7. Investment in Associate
Holding
Group
Company
Carrying Value
Carrying Value
2014
2013
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
39.54
39.54
Non-Quoted
81,127,427
53,315,887
15,162,700
15,162,700
Total Carrying Value of the Investment in Associates
81,127,427
53,315,887
15,162,700
15,162,700
Directors Valuation*
81,127,427
53,315,887
81,127,427
53,315,887
* Directors Valuation of Shares is on Net Assets Basis.
7.2 Fortune G-P Farms (Lanka) Ltd.

The Group has a 39.54% interest in Fortune GP Farms (Lanka) Ltd., which is involved in the breeding of Grand Parent Birds in Sri Lanka

Fortune GP Farms (Lanka) Limited is a public entity that is not listed on any stock exchange. The following table illustrates summarised
financial information of the Groups investment in Fortune GP Farms (Lanka) Limited.
2014
2013
Rs.
Rs.
Current Assets
54,406,789
27,475,299
Non-Current Assets
47,343,485
47,529,524
Current Liabilities
(18,162,579)
(18,917,530)
Non-Current Liabilities
(2,460,268)
(2,771,406)
Net Assets
81,127,427
53,315,887
Revenue
92,635,919
86,777,578
Profit After Tax
27,811,351
19,794,730
Share of the Associates Net Assets:
Share of the Associates Revenue and Profit:
{7 3 }
8. Other Investments (Group/Company)

Investments in Equity Securities
No. of Shares
Carrying Value
Carrying Value
2014
2013
Rs.
Rs.
Quoted
Investments with Non-Related Parties
Merchant Bank of Sri Lanka PLC
2,307
31,145
36,912
Mahaweli Reach Hotel PLC
3,500
58,450
69,300
42
2,583
2,310
8,922
9,814
12,491
343,000
1,783,600
1,000,000
1,885,592
1,121,013
Lanka Walltiles PLC

Blue Diamonds Jewellery Worldwide PLC
Amana Bank Ltd.
9. Inventories
Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Broiler Meat & Eggs
41,033,305
32,737,404
36,176,184
26,334,897
Poultry Feed & Drugs
24,289,215
21,043,153
9,777,458
10,661,514
Sundry Stocks
33,397,830
31,521,350
20,502,076
15,531,673
Trading Stocks
98,720,350
{74 }
Bairaha Farms PLC
28,627
85,330,534
66,455,718
52,528,084
10. Biological Assets

Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Breeder Birds
134,265,244
128,560,385
45,570,116
26,015,075
Total Non-Current
134,265,244
128,560,385
45,570,116
26,015,075
Broiler Birds - Own Farms
60,908,342
67,794,275
21,093,745
32,796,086
Broiler Birds - Outgrowers
37,085,378
40,279,112
37,085,378
40,279,112
Hatching Eggs
51,137,930
47,987,768
19,399,471
13,678,372
Total Current
149,131,650
156,061,155
77,578,594
86,753,570
283,396,894
284,621,540
123,148,710
112,768,645
Net Book Value as at 01st April
128,560,385
121,668,899
26,015,075
60,919,745
Additions
187,485,193
173,148,613
75,165,760
36,486,193
Amortisation and Mortality for the Year
(181,780,334)
(166,257,127)
(55,610,719)
(71,390,863)
Net Book Value as at 31st March
134,265,244
128,560,385
45,570,116
26,015,075
Bearer Biological Assets
Consumable Biological Assets
Bearer Biological Assets
11. Trade and Other Receivables

Group
Trade Receivables - Related Parties (Note 11.1)
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
168,814,621
103,191,212
- Others
279,805,428
261,522,435
216,719,316
194,428,845
Less: Allowance for Doubtful Debts - Others
(28,380,847)
(13,959,041)
(22,653,235)
(10,425,183)
251,424,581
247,563,394
362,880,702
287,194,874
Other Debtors
60,666,045
62,090,281
51,702,332
46,045,788
Less: Allowance for Doubtful Debts - Other Debtors
(46,506,428)
(45,586,567)
(46,506,428)
(45,586,567)
14,159,617
16,503,714
5,195,904
459,221
Advances and Prepayments
14,873,873
11,865,008
6,003,243
2,961,884
Loans to Company Officers
2,089,048
2,435,738
2,089,048
2,435,738
282,547,119
278,367,854
376,168,897
293,051,717
{7 5 }
11.1 Trade Dues Receivable from Related Parties

Group
Relationship
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Subsidiary
11,537,448
32,347,898
Subsidiary
156,039,983
70,843,314
Subsidiary
1,237,190
168,814,621
103,191,212
12. Amounts Due from Related Parties

Group
Relationship
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Subsidiary
25,473,596
6,069,576
Subsidiary
10,279,009
5,906,936
Subsidiary
1,841,224
1,783,094
Lanka Land Development (Pvt) Ltd.
Subsidiary
14,561,381
14,497,756
HCF Land (Pvt) Ltd.
Subsidiary
10,341,339
7,132,809
Natures Best Industries Ltd.
Subsidiary
292,488,608
240,202,473
Associate
21,273,009
19,485,327
21,273,009
19,485,327
Subsidiary
74,000
75,000
74,000
75,000
Joint Venture
112,590
142,835
34,199,700
34,199,710
21,459,599
19,703,162
410,531,866
329,352,681
Less: Allowance made for Amounts due from

- Golden Rooster Restaurants (Pvt) Ltd.
21,459,599
{76 }
Bairaha Farms PLC
19,703,162
(1,730,784)
(1,730,784)
408,801,082
327,621,897
13. Stated Capital (Group/Company)

2014
2013
Rs.
Rs.
Fully-Paid Ordinary Shares
256,305,197
256,305,197
(16,000,000 Ordinary Shares)
256,305,197
256,305,197
13.1 Rights, Preference and Restrictions of Classes of Capital

The holders of ordinary shares confer their right to receive dividends as declared from time to time and are entitled to one vote per share at the
Annual General Meeting of the Company.
14. Reserves
Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
247,928,384
249,923,859
120,827,240
122,362,131
247,928,384
249,923,859
120,827,240
122,362,131
249,923,859
253,249,938
122,362,131
123,683,381
(1,995,475)
(3,326,079)
(1,534,891)
(1,321,250)
247,928,384
249,923,859
120,827,240
122,362,131
Summary
Revaluation Surplus (Note 14.1)
14.1 Revaluation Surplus

On Property, Plant & Equipment
Balance as at the beginning of the Year
Realised Surplus on Disposal Transferred to Retained Profit
Balance as at the end of the Year
14.2 Other Reserves

Group

Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
576,677
576,677
576,677
576,677
576,677
576,677
576,677
576,677
{7 7 }
15. Financing & Lease (IJARA) Payables

15.1 Group
2013
2014
Amount
Amount
Amount
Amount
Repayable
Repayable
Repayable
Repayable
within 1 Year
after 1 Year
within 1 Year
after 1 Year
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Finance Leases - Ijara (Note 15.1.1)

Bank Loans (Note 15.1.2)
Bank Overdrafts (Note 25.2)
Total
Total
10,776,438
15,009,236
25,785,674
10,325,378
26,790,275
37,115,653
72,036,902
143,837,516
215,874,418
36,692,272
126,547,705
163,239,977
10,437,924
93,251,264
158,846,752
10,437,924
4,515,614
252,098,016
51,533,264
153,337,980
4,515,614
204,871,244
Non-current lease liabilities are payable within 5 years.
15.1.1 Finance Leases - Ijara
Lanka ORIX Finance PLC - Al Falaah

Amna Bank Ltd.
Gross Liability
Finance Charges Allocated to Future Periods
Net Liability
As at
New Leases
01.04.2013
Obtained
Rs.
Rs.
Repayments
As at
31.03.2014
Rs.
Rs.
13,538,623
(5,170,619)
8,368,004
23,577,030
(6,159,360)
17,417,670
37,115,653
(11,329,979)
25,785,674
2013
2014
Rs.
Rs.
44,591,493
29,290,522
(7,474,840)
(3,504,848)
37,116,653
25,785,674
Security:
Leased Assets on Finance Leases.
15.1.2 Bank Loans
Amna Bank Ltd.

Hatton National Bank - Al Najah
As at
Loans
01.04.2013
Obtained
Rs.
Rs.
Rs.
Rs.
163,239,977
127,376,132
(85,993,741)
204,622,368
12,900,000
(1,647,950)
11,252,050
140,276,132
(87,641,691)
215,874,418
163,239,977
Repayments
As at
31.03.2014
Security:
Immovable property, plant & machinery located at Ellalamulla Estate in Pasyala have been pledged against the loan facilities obtained from
Amna Bank Ltd.
{78 }
Bairaha Farms PLC
15.2 Company

2013
2014
Amount
Amount
Amount
Amount
Repayable
Repayable
Repayable
Repayable
within 1 Year
after 1 Year
within 1 Year
after 1 Year
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
69,456,902
135,165,466
204,622,368
36,692,272
126,547,705
163,239,977
Bank Loans (Note 15.2.1)

Bank Overdrafts (Note 25.2)
8,986,226
78,443,128
Total
8,986,226
135,165,466
213,608,594
36,692,272
Total
126,547,705
163,239,977
Non-current lease liabilities are payable within 5 years.
15.2.1 Bank Loans
Amna Bank Ltd.
As at
Loans
01.04.2013
Obtained
Repayments
Rs.
Rs.
Rs.
Rs.
163,239,977
127,376,132
(85,993,741)
204,622,368
163,239,977
127,376,132
(85,993,741)
204,622,368
As at
31.03.2014
Security:
Immovable property, plant & machinery located at Ellalamulla Estate in Pasyala have been pledged against the loan facilities obtained from
Amna Bank Ltd.
16. Retirement Benefit Liability

Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
27,092,932
22,758,654
24,087,914
19,578,801
Charge for the Year (Note 16.1)
6,731,461
5,629,148
5,628,068
5,575,033
Amounts Recognised in Other Comprehensive Income (16.2)
9,299,275
Payments during the Year
(1,596,919)
(1,294,870)
(1,375,016)
(1,065,920)
41,526,749
27,092,932
37,640,241
24,087,914
Current Service Cost
3,191,706
1,731,589
2,088,313
1,677,474
Interest Cost on Benefit Liability
3,539,755
3,302,711
3,539,755
3,302,711
Defined Benefit Obligation - Gratuity

9,299,275
16.1 Charge for the Year
Recognition of Actuarial Experience
6,731,461
594,848
5,629,148
5,628,068
594,848
5,575,033
{7 9 }
Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
16.2 Amounts Recognised in Other Comprehensive Income

Liability Experience Loss/(Gain) Arising During the Year
9,902
9,902
Liability Loss/(Gain) Due to Changes in Assumptions During the Year
2,596,805
2,596,805
Transition Liability/(Asset) Recognised During the Year
6,692,568
6,692,568
Total Amount Recognised in Other Comprehensive Income
9,299,275
9,299,275
16.3 The Retirement Benefit Liability, of Bairaha Farms PLC, is valued by Mr. Piyal Goonatilleke, who is a fellow member of the Society of
Actuaries (USA) and a member of the American Academy of Actuaries and other Group companies are valued by using actuarial valuation
method which is a formula method. Defined Liability is valued as of March 2012 and the principal assumptions used in the valuation is as
follows:
Principal Actuarial Assumptions

2014
2013
Discount Rate
10% p.a
11.5% p.a
Salary Increases
10% p.a
10% p.a
Staff Turnover
20 to 35 Years
10%
10%
35 to 40 Years
7.5%
7.5%
40 to 45 Years
5%
5%
45 to 50 Years
2.50%
2.50%
Over 55 Years
1%
1%
16.4 Sensitivity Analysis

Assumption
Discount Rate
Expected Salary Increase
Change
Effect on PVDBO
+1%
(1,774,697)
-1%
1,970,984
+1%
2,563,231
-1%
(2,346,148)
17. Trade and Other Payables

Group
Trade Creditors - Related Parties (Note 17.1)

- Others
Sundry Creditors Including Accrued Expenses
{80 }
Bairaha Farms PLC
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
240,878,000
80,887,008
266,136,512
271,752,348
139,184,164
153,405,547
266,136,512
271,752,348
380,062,164
234,292,555
99,808,738
86,813,098
67,143,946
62,745,600
365,945,249
358,565,446
447,206,110
297,038,155
17.1 Trade Dues Payable to Related Parties

Group
Relationship
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Subsidiary
Subsidiary
Subsidiary
Siyane Farms Ltd.
Subsidiary
20,453,110
240,878,000
84,774
220,340,116
445,922
2,244,498
78,196,588
80,887,008
18. Dividends
Group
18.1 Dividends Payable (Unclaimed Dividends)
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
3,490,836
3,024,779
3,490,836
3,024,779
3,490,836
3,024,779
3,490,836
3,024,779
18.2 Rs. 24,000,000/- dividends has been declared and paid for the financial year ended 31st March 2014.
19. Amounts Due to Related Parties
Group
Relationship
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Subsidiary
27,619,523
6,157,386
Siyane Farms Ltd.
Subsidiary
208,558,773
191,817,046
Subsidiary
4,081,138
1,386,491
240,259,434
199,360,923
{8 1 }
20. Other Operating Income

Group
Income from Other Investments - Quoted
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
1,201
2,788
1,201
2,788
Income from Other Investments - Subsidiaries
21,423,999
71,752,244
Income from Other Investments - Joint Ventures
429
1,495
Income from Other Investments - Associates
1,986,314
1,213,016
Rental Income from Related Parties
126,002
1,650,387
1,743,392
999,228
2,039,315
734,942
634,501
18,298,018
14,628,883
6,438,338
1,345,954
19,298,447
16,796,988
32,235,610
76,693,390
Profit on Disposal of Property, Plant & Equipment

Miscellaneous Income
21. Finance Cost

Group
Interest Expense on Overdrafts

Finance Charges on Lease Liabilities
Finance Charges on Fixed Loans
{82 }
Bairaha Farms PLC
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
761,753
98,678
761,753
93,706
4,748,622
6,136,128
33,542,296
16,359,849
10,739,985
16,351,304
39,052,671
22,594,655
11,501,738
16,489,116
44,106
22. Profit/(Loss) from Operating Activities

Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
2,483,750
3,416,189
2,483,750
3,416,189
Depreciation
101,289,625
80,748,111
49,003,256
42,638,483
Staff Cost (Including Following Retirement Benefit Plan Cost)
128,351,098
102,864,049
84,701,880
77,687,304
- Defined Benefit Plan Cost - Gratuity
2,798,684
2,547,902
2,045,758
2,620,219
- Defined Contribution Plan Costs - EPF & ETF
5,986,912
4,446,666
2,679,270
2,744,545
17,301,600
18,271,900
6,747,624
18,271,900
155,302
94,460
155,302
94,460
Donations
1,003,587
1,626,661
580,715
1,577,661
Depreciation
3,669,441
3,043,202
2,373,237
2,094,187
15,978,388
14,338,617
10,087,725
11,179,489
2,949,377
1,966,263
2,598,910
1,839,831
2,822,017
2,903,330
1,600,841
2,180,548
Advertising Costs
19,944,362
23,535,518
19,944,362
23,535,518
15,341,667
5,508,171
13,147,913
3,768,169
5,260,966
2,448,228
5,260,966
2,448,228
30,416,430
28,558,006
27,889,089
26,736,199
983,400
1,114,982
983,400
1,114,982
1,881,242
1,787,855
1,617,846
1,559,904
Stated after Charging/(Crediting)

Production Overheads:
Allowance for Weight Losses
Administration Expenses:
Directors Emoluments
Legal Fees
Distribution Cost:
Depreciation
{8 3 }
23. Income Tax Expense

Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Current Tax Expense on Ordinary Activities for the Year (Note 23.1)
9,594,725
14,295,950
2,341,074
Under Provision of Current Taxes in Respect of Prior Years
4,896,304
4,896,304
The Major Components of Income Tax Expense are as follows:
Income Statement
Current Income Tax
Deferred Income Tax

Deferred Taxation Charge (23.2)
Income Tax Expense Reported in the Income Statement
6,780,539
8,084,574
1,345,670
8,190,593
21,271,568
22,380,524
8,583,048
8,190,593
23.1 A Reconciliation between Tax Expense and the Product of Accounting Profit Multiplied
by the Statutory Tax Rate is as follows:
Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Accounting Profit before Tax from Operations
131,303,142
164,067,342
43,000,598
128,560,602
Accounting Profit before Income Tax
131,303,142
164,067,342
43,000,598
128,560,602
13,130,314
19,688,081
4,300,060
15,427,272
Non-Deductible Expenses and Other Allowable Credits
1,360,715
(5,392,131)
2,937,318
(15,427,272)
Effect of Deferred Tax
6,780,539
8,084,574
1,345,670
8,190,593
At the Effective Income Tax Rate
21,271,568
22,380,524
8,583,048
8,190,593
Current Tax Expense Reported in the Income Statement
21,271,568
22,380,524
8,583,048
8,190,593
At the Statutory Income Tax Rate (10% - 28%)
Natures Best Industry Ltd. (fully-owned subsidiary of Bairaha Farms PLC) is a BOI Company which enjoys a 10-year tax holiday
(w.e.f. 2011/12).
{84 }
Bairaha Farms PLC
23.2 Deferred Tax Assets, Liabilities and Income Tax Relates to the following:
23.2.1 Group
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
70,767,037
55,369,331
(15,397,706)
(13,224,743)
70,767,037
55,369,331
(1,903,650)
(804,422)
1,099,228
(126,805)
(4,256,479)
(2,683,705)
1,572,774
179,358
101,250
123,750
22,500
(301,399)
(15,609,570)
(8,702,980)
6,906,590
5,389,015
(21,668,449)
(12,067,357)
(5,796,614)
(8,084,574)
Deferred Tax Liability

Deferred Tax Assets
Finance Lease
Tax Losses Carried Forward
Deferred Income Tax Expense

Net Deferred Tax Liability
49,098,588
43,301,974
23.2.1.1 Break-up of Deferred Tax Charge on - Defined Benefit Plans

Charge to Income Tax Expenses
588,849
Charge to Statement of Changes in Equity
983,925
1,572,774
23.2.2 Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
48,490,895
41,459,848
(7,031,047)
(10,826,806)
48,490,895
41,459,848
(1,799,413)
(795,858)
1,003,555
(122,523)
(3,982,591)
(2,599,350)
1,383,241
249,894
Deferred Tax Liability

Deferred Tax Assets
Finance Lease
Tax Losses Carried Forward
(6,968,998)
(2,686,491)
(12,751,002)
(6,081,699)
Deferred Income Tax Expense

Net Deferred Tax Liability
35,739,893
(177,649)
4,282,507
2,686,491
(361,744)
(8,190,593)
35,378,149
{8 5 }
23.2.2.1 Break-up of Deferred Tax Charge on - Defined Benefit Plans

2014
2013
Rs.
Rs.
Charge to Income Tax Expenses
399,315
Charge to Statement of Changes in Equity
983,925
1,383,240
24. Earnings Per Share

24.1 Basic Earnings per Share is calculated by dividing the net profit/(loss) for the year attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the year. The weighted average number of ordinary shares outstanding during the year
and the previous year are adjusted for events that have changed the number of ordinary shares outstanding without a corresponding change
in the resources such as a bonus issue.
24.2 The following reflects the income and share data used in the basic earnings per share computations:
2014
2013
Rs.
Rs.
Net Profit
137,842,925
161,481,548
Net Profit Attributable to Ordinary Shareholders for Basic Earnings per Share
137,842,925
161,481,548
Amounts Used as the Numerators:
2014
2013
Number
Number
Weighted Average Number of Ordinary Shares in Issue Applicable to Basic Earnings per Share
16,000,000
16,000,000
Adjusted Weighted Average Number of Ordinary Shares Applicable to Basic Earnings per Share
16,000,000
16,000,000
Number of Ordinary Shares Used as Denominators:
{86 }
Bairaha Farms PLC
25. Cash & Cash Equivalents

Components of Cash & Cash Equivalents
25.1 Favourable Cash & Cash Equivalent Balance

Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
160,555,857
165,928,647
136,951,963
132,636,062
160,555,857
165,928,647
136,951,963
132,636,062
Bank Overdrafts
(10,437,924)
(4,515,614)
(8,986,226)
Total Cash & Cash Equivalents for the Purpose of Cash Flow Statements
150,117,933
161,413,033
127,965,737
25.2 Unfavourable Cash & Cash Equivalent Balances
132,636,062
26. Commitments and Contingencies

Commitments
Capital commitments approved and contracted as at the reporting date, but not provided for in the financial statements for the Company
amounted to Rs. 1,490,550/-.
Contingencies (Group/Company)
The Company has obtained Letter of Credit facility of Rs. 30,180,518/- as at 31st March 2014.
Guarantees
A corporate guarantee of Rs. 50 Mn has been given to HNB on behalf of Golden Grains (Pvt) Ltd. for a short-term loan.
27. Assets Pledged

27.1 The following assets retained as security for liabilities:
Nature of Assets
Nature of Liability
Carrying Amount Pledged
Included
2014
2013
Under
Rs.
Rs.
44,700,868
48,682,563
44,700,868
48,682,563
Group
Leased Assets
Charge over Leased

Liability
27.2 Assets pledged on bank loans are disclosed under Notes 15.1.2 & 15.2.1 for Group & Company respectively.

{8 7 }
28. Fair Value of Financial Instruments

The following is a description of how fair values are determined for financial instruments that are recorded at fair value using valuation techniques.
The only financial instruments carried at fair value consist of shares in listed entities, as shown in Note 8. All such shares are determined based
on Level 1 of fair value hierarchy.
28.2 Set out below is the comparison, by class, of the carrying amounts and fair values of the Group's financial instruments that are
not carried at fair value in the financial statements.
Group
2013
2014
Carrying
Carrying
Company
2013
2014
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
Amount
Fair Value
Amount
Fair Value
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
280,958,611
280,958,611
282,883,602
282,883,602
374,580,389
374,580,389
297,567,465
297,567,465
21,459,599
21,459,599
19,703,162
19,703,162
408,801,082
408,801,082
327,621,897
327,621,897
160,555,857
160,555,857
165,928,647
165,928,647
136,951,963
136,951,963
132,636,062
132,636,062
Total Financial Assets
462,974,067
462,974,067
468,515,411
468,515,411
920,333,434
920,333,434
757,825,424
757,825,424
364,356,740
364,356,740
355,787,572
355,787,572
445,617,601
445,617,601
294,260,281
294,260,281
240,259,434
240,259,434
199,360,923
199,360,923
Financial Assets
Trade & Other Receivables, (net)

Financial Liabilities
Trade & Other Payables

Financing & Lease (Ijara) Payables
252,098,016
252,098,016
204,871,244
204,871,244
213,608,594
213,608,594
163,239,977
163,239,977
Total Financial Liabilities
616,454,756
616,454,756
560,658,816
560,658,816
899,485,629
899,485,629
656,861,181
656,861,181
Fair Value of Financial Assets and Liabilities Not Carried at Fair Value
The following describes the methodologies and assumptions used to determine the fair values for those financial instruments which are not
already recorded at fair value in the financial statements.
Assets and Liabilities for which Fair Value Approximates Carrying Value
For financial assets and financial liabilities that have a short-term maturity (original maturities less than a year), it is assumed that the carrying
amounts approximate their fair values. This assumption is applied to cash and cash equivalents, trade and other receivables, amounts due
from and to related parties and trade and other payables.
Financing & Lease (Ijara) Payables for which periodical interest is paid are also considered to be carried at fair value in the books since the
original financing rate does not differ materially from the current market rate.
{88 }
Bairaha Farms PLC
29. Risk Management

29.1 Introduction
The groups principal financial liabilities comprise of loans and borrowings, trade and other payables. The main purpose of these financial
liabilities is to finance the Groups operations.
The Group has trade and other receivables, amounts due from related parties and cash and short-term deposits that arrive directly from its
operations.
The Group is exposed to credit risk, liquidity risk and market risk.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Financial instruments affected by market risk include investments in equity securities.
The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on
the entitys financial performance.
29.2 Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial
loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including
deposits with banks, and loans given to related companies.
29.2.1 Age Analysis of Trade Receivables

Group
Past Due but Not Impaired
Trade Receivables
Collective Impairment
Less than 30
31 to 60
61 to 90
More than
Not Past Due
Days
Days
Days
91 Days
Impaired
Total
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
152,982,720
55,840,546
7,968,059
3,620,590
2,631,819
11,374,241
234,417,976
2,801,839
1,990,777
1,435,310
2,037,590
8,741,090
155,784,559
57,831,323
9,403,369
5,658,180
11,372,909
17,006,606
11,374,241
251,424,581
Company
Past Due but not Impaired
Less than 30
Trade Receivables
Collective Impairment
More than
Not Past Due
Days
31 to 60 Days
61 to 90 Days
91 Days
Impaired
Total
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
293,118,091
32,888,908
7,968,059
3,620,590
2,631,819
5,646,629
345,874,097
2,801,839
1,990,777
1,435,310
2,037,590
8,741,090
295,919,930
34,879,685
9,403,369
5,658,180
11,372,909
5,646,629
17,006,606
362,880,702
{8 9 }
29.3 Liquidity Risk

Liquidity risk refers to the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by
delivering cash or another financial asset.
The Company manages liquidity risk by monitoring and managing its cash requirements to ensure access to sufficient funds to meet
operational and investing requirements. The primary source of liquidity is cash generated from operations and supplemented by
credit facilities.
29.3.1 Maturity Analysis of Financial Assets and Financial Liabilities

An analysis of financial assets and financial liabilities based on the remaining period at the balance sheet date to the respective contractual
maturity dates are as follows:
Group
2014
2014
2014
2013
2013
2013
Within
After
Total as at
Within
After
Total as at
12 Months
12 Months
31.03.2013
12 Months
12 Months
31.03.2012
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Assets
Trade and Other Receivables (Net)
282,547,119
282,547,119
278,367,854
278,367,854
21,459,599
21,459,599
19,703,162
19,703,162
Cash and Bank Balances
160,555,857
160,555,857
165,928,647
165,928,647
Total Assets
464,562,575
464,562,575
463,999,663
463,999,663
365,945,249
365,945,249
358,565,446
358,565,446
Liabilities
Trade and Other Payables
Financing and Lease (Ijara) Payables
Total liabilities
Net
{90 }
Bairaha Farms PLC
93,251,264
158,846,752
252,098,016
51,533,264
153,337,980
204,871,244
459,196,513
158,846,752
618,043,265
410,098,710
153,337,980
563,436,690
5,366,062
(158,846,752)
(153,480,690)
53,900,953
(153,337,980)
(99,437,027)
Company
2014
2014
2014
2013
2013
2013
Within
After
Total as at
With in
After
Total as at
12 Months
12 Months
31.03.2013
12 Months
12 Months
31.03.2012
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Assets
Trade and Other Receivables (Net)
376,168,897
376,168,897
293,051,717
293,051,717
408,801,082
408,801,082
327,621,897
327,621,897
Cash and Bank Balances
136,951,963
136,951,963
132,636,062
132,636,062
Total Assets
921,921,942
921,921,942
753,309,676
753,309,676
Trade and Other Payables
447,206,110
447,206,110
297,038,155
297,038,155
199,360,923
199,360,923
199,360,923
199,360,923
Liabilities
Financing and Lease (Ijara) Payables
78,443,128
135,165,466
213,608,594
36,692,272
126,547,705
163,239,977
Total liabilities
725,010,161
135,165,466
860,175,627
533,091,350
126,547,705
659,639,055
Net
196,911,781
(135,165,466)
61,746,315
220,218,326
(126,547,705)
93,670,621
30. Related Party Disclosures

30.1 Transactions with Related Entities
30.1.1 Subsidiaries
Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
Sales
242,947,525
210,632,160
Purchases
802,982,289
579,299,949
Rent Received
1,848,432
1,848,432
Expenses Incurred by Parent Company
124,177,608
103,935,514
Expenses Incurred by Subsidiaries
16,678,814
10,564,068
Fund Transfers
6,505,483
69,000,000
Hatching Fees
16,458,348
24,296,803
Collection of Debtors
185,093,722
182,728,741
Nature of Transactions
{9 1 }
Group
Nature of Transactions
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
18,559,803
19,417,977
18,559,803
19,417,977
30.1.2 Associate
Purchases
Fund Transfers
21,091,714
21,091,714
34,199,700
34,199,700
30.1.3 Joint Ventures

Fund Transfers
30.2 Transactions with Key Management Personnel

The Key Management Personnel of the Company are the members of its Board of Directors. Transactions with close family members
of Key Management Personnel are also taken into account in the transactions with Key Management Personnel.
Group
Company
2014
2013
2014
2013
Rs.
Rs.
Rs.
Rs.
1,584,000
1,584,000
1,584,000
1,584,000
17,301,600
18,271,900
6,747,624
18,271,900
(a) Transactions with Key Management Personnel or

their Close Family Members
Rent of Premises Owned by Key Management Personnel
(b) Key Management Personnel Compensation

Short-Term Employee Benefits
30.3 Trade Dues Receivable from Related Parties, Amounts Due from Related Parties, Trade Dues Payable to Related Parties, and Amounts
Due to Related Parties as at the reporting date are disclosed in Notes 11.1, 12, 17.1 & 19 respectively.
30.4 Terms and Conditions of Transactions with Related Parties.

Outstanding balances as at the year-end are unsecured, interest free, and due on demand. There have been no guarantees provided or received for
any related party receivables or payables. The Group has not recorded any impairment of receivables relating to amounts owed by related parties
(2012/13 - Rs. Nil).
31. Events Occurring After the Reporting Date

Bairaha Farms PLC (BFP) has decided to collaborate in a new project to set up a large scale, state-of-the-art commercial animal feed
manufacturing factory together with raw materials procurement and modern post-harvest storage facilities. The joint-venture is known as
Fortune Agro Industries (Pvt) Ltd. (FAI). FAI has already signed the agreement with the Board of Investment wherein a 7 year tax holiday
has been granted. The total estimated cost of the new joint-venture FAI is around Rs. 1.65 Bn, which includes Rs. 650 Mn for working
capital. Bairaha Farms PLC intends to take up around 45% share of the equity in this new venture, which may take around 15-20 months to
commence commercial operations.
A first and final dividend of Rs. 1.25/- per share was declared for the year ended 31st March 2014.
{92 }
Bairaha Farms PLC
Investor Information
1. 20 Major Shareholders of the Company
Name
No. of Shares
No. of Shares
as at 31.03.2014
% as at 31.03.2013
1.
Mr. M.N.M. Yakooth
1,701,867
10.637
1,701,867
10.637
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Mr. M.N.M. Mubarak

Mr. M.N.M. Kamil
Mr. M.N.M. Ilyas
Perpetual Capital (Pvt) Ltd.
Employees Trust Fund Board
Mr. M.Y.M. Riyal
Mrs. F.S. Imran
Mr. M.S.F. Haqque
Mrs. A.W.M.S. Rafeeka
Amana Bank Ltd.
Gem Plus International (Pvt) Ltd.
Mr. T.L.M. Imtiaz
Perpetual Asset Management (Pvt) Ltd.
Elgin Investments Ltd.
Confifi Management Services (Pvt) Ltd.
Mr. M.M. Salahudeen
Confifi Capital (Pvt) Ltd.
Mr. R. Pestonjee
Globemart International (Pvt) Ltd.
1,660,908
10.381
1,660,908
10.381
1,603,924
10.025
1,653,924
10.337
1,548,600
9.679
1,548,600
9.679
1,421,371
8.884
1,283,345
8.021
1,229,742
7.686
1,229,742
7.686
824,305
5.152
824,305
5.152
612,047
3.825
612,047
3.825
370,000
2.313
300,000
1.875
300,000
1.875
293,098
1.832
402,629
2.516
250,000
1.563
178,545
1.116
182,174
1.139
167,500
1.047
167,500
1.047
156,733
0.980
10,000
0.063
153,500
0.959
133,000
0.831
152,000
0.950
146,000
0.912
143,951
0.900
143,951
0.900
130,000
0.813
130,000
0.813
111,900
0.699
111,900
0.699
13,009,991
81.312
12,241,892
76.511
Others
Total
2,990,009
18.688
3,758,108
23.49
16,000,000
100.000
16,000,000
100.000
2. Share Distribution
Shareholding as at 31st March 2014
From
To
No. of
No. of
Shareholders
Shares
2,921
678,540
4.24
1,000
1,001
10,000
347
957,760
5.98
10,001
100,000
47
1,353,709
8.46
100,001
1,000,000
14
3,843,579
24.03
Over
1,000,000
9,166,412
57.29
3,335
16,000,000
100.00
No. of
No. of
Shareholders
Shares
Local Individuals
3,202
11,065,359
69.16
Local Institutions
106
4,724,838
29.53
Foreign Individuals
24
45,468
0.28
Foreign Institutions
164,335
1.03
3,335
16,000,000
100.00
Categories of Shareholders
{9 3 }
Public Holding
The percentage of shares held by the public 53.49%
03. Directors Shareholding as at 31st March 2014

Name
No. of Shares
61,700
0.386
1,701,867
10.637

Mr. M.N.M. Yakooth
Mr. M.N.M. Ilyas
Mr. M.N.M. Kamil
Mr. M.N.M. Mubarak
Mr. M.Y.M. Riyal
1,548,600
9.679
1,603,924
10.025
1,660,908
10.381
824,305
5.152
30,000
0.188
10,000
0.063
Share Prices for the Year

As at
31st March 2014
31st March 2013
Rs.
Rs.
158.00 (07.05.13)
194.00 (11.09.12)
120.00 (20.12.13)
110.00 (16.05.12)
147.20
149.70
Market price per share

Highest during the year
Lowest during the year
As at end of the year
SHARE TRADING
No. of Shares Traded during the year

Value of Shares Traded during the year
Number of Transactions during the year
{94 }
Bairaha Farms PLC
2,066,075
280,931,532
2,890
Value Added Statement

31st March 2013
31st March 2014

Rs. 000
Rs. 000
Revenue
3,415,655
3,265,014
Less: Cost of Materials and Services Purchased
(2,503,006)
(2,415,753)
Value Added
912,649
849,261
To Employees as Remuneration
174,746
19.15
145,761
17.16
To Government as Taxes
426,787
46.76
401,184
47.24
To Providers of Capital

Finance Cost on Borrowings
39,053
4.28
22,595
2.66
Dividends to the Shareholders
24,000
2.63
32,000
3.77
Depreciation
110,220
12.08
86,239
10.15
Reserves
137,843
15.10
161,482
19.01
912,649
100.00
849,261
100.00
Retained in the Business as
{9 5 }
Five Year Summary


Revenue
Profit before Taxation
Taxation (Charge)/Reversal
Profit after Taxation
Minority Interest
Profit/(Loss) from Associate Companies
Intangible Assets
Investments
Biological Assets
Current Assets
Less: Current Liabilities
Net Current Assets
Total Assets Less: Current Liabilities
Less:
Long-Term Liabilities
Deferred Liabilities
Net Assets
Equity
Stated Capital
Revaluation Reserves
Other Reserves
Revenue Reserves
{96 }
Bairaha Farms PLC
2014
2013
2012
2011
2010
Rs. 000
Rs. 000
Rs. 000
Rs. 000
Rs. 000
3,054,158
2,917,526
2,828,815
2,554,762
2,064,259
131,303
164,067
498,548
584,576
154,182
(21,271)
(22,380)
(67,051)
(103,166)
(20,420)
110,032
141,687
431,497
481,410
133,762
27,811
19,795
12,553
4,536
386
(9,536)
(62)
8,941
128,307
161,420
452,991
485,946
134,148
1,565,363
1,436,005
1,139,611
755,238
626,838
4,733
4,401
3,684
4,170
3,579
83,013
54,437
33,355
19,229
14,319
134,265
128,560
122,261
103,147
1,787,374
1,623,403
1,298,911
881,784
644,736
743,650
729,023
699,958
702,779
593,618
(462,688)
(413,123)
(266,222)
(320,807)
(404,930)
280,962
315,900
433,736
381,972
188,688
2,068,336
1,939,303
1,732,647
1,263,756
833,424
(158,847)
(153,338)
(85,195)
(14,464)
(47,290)
(90,625)
(70,395)
(57,976)
(46,730)
(25,494)
1,818,864
1,715,570
1,589,476
1,202,562
760,640
256,305
256,305
256,305
256,305
256,305
247,928
249,924
253,250
238,720
240,031
(8,101)
451
513
577
577
1,322,732
1,208,890
1,079,408
706,960
263,727
1,818,864
1,715,570
1,589,476
1,202,562
760,640
Notice of Meeting
NOTICE IS HEREBY given that the Thirty-Ninth Annual General
Meeting of Bairaha Farms PLC will be held at the Bougainvillea
Ballroom, Galadari Hotel, No. 64, Lotus Road, Colombo 1
at 11.30 a.m. on Wednesday the 25th June 2014 for the
following purposes:
6. To authorise the Directors to determine donations for the

ensuing year.
7. To re-appoint Messrs Ernst & Young, Chartered Accountants
as Auditors of the Company and to authorise the Directors to
determine their remuneration.
1. To receive and consider the Annual Report of the Board of

Directors on the Affairs of the Company and the financial
statements for the year ended 31st March 2014 and the Report of
the Auditors thereon.
By Order of the Board,

Bairaha Farms PLC
2. To pass the ordinary resolution set out below to re-elect

Desamanya Prof. M.T.A. Furkhan, who is 79 years of age,
as a Director of the Company.
(Sgd.)
P.W. Corporate Secretarial (Pvt) Ltd.
Director/Secretaries
12th May 2014

Colombo
IT IS HEREBY RESOLVED THAT the age limit stipulated in

Section 210 of the Companies Act No. 07 of 2007 shall not apply
to Desamanya Prof. M.T.A. Furkhan, who is 79 years of age and
that he be and is hereby re-elected a Director of the Company in

Desamanya C.P. de Silva, who is 85 years of age,
as a Director of the Company.

IT IS HEREBY RESOLVED THAT the age limit stipulated

in Section 210 of the Companies Act No. 07 of 2007 shall not
apply to Desamanya C.P. de Silva, who is 85 years of age and
that he be and is hereby re-elected a Director of the Company in

Deshabandu N.S. Jabir, who is 76 years of age, as a Director of
the Company.
Notes
1. A member is entitled to appoint a proxy to attend and vote instead of
himself/herself and a proxy need not be a member of the Company.
2. A Form of Proxy is enclosed herewith for this purpose.
3. The instrument appointing a proxy must be deposited at the
Registered Office of the Company, 2nd Floor, No. 407, Galle Road,
Colombo 3 not less than forty-eight hours before the time fixed for
the Meeting. The envelope in which the Proxy Form is enclosed must
be marked with the words 'Annual General Meeting' on the top left
hand corner of the envelope, and the envelope must be addressed
to Secretaries, Bairaha Farms PLC, 2nd Floor, No. 407, Galle Road,
Colombo 3.
4. Shareholders/Proxy holders attending the Meeting are requested
to bring their National Identity Cards and post the Attendance Slip
(Business Reply Card) enclosed herewith to the Company to reach
them not less than forty-eight hours before the time fixed for the
IT IS HEREBY RESOLVED THAT the age limit stipulated in

Section 210 of the Companies Act No. 07 of 2007 shall not apply
to Deshabandu N.S. Jabir, who is 76 years of age and that he be
and is hereby re-elected a Director of the Company in terms of
Section 211 of the Companies Act No. 07 of 2007.
Meeting.
5. To re-elect as a Director, Mr. Riyal Yakoob who retires by rotation

in terms of Articles 87 and 88 of the Articles of Association of the
Company.
{9 7 }
Notes
{98 }
Bairaha Farms PLC
Form of Proxy
I/We* ...........................................................................................................................................................................................................
....................................................................................................................................................................................................................
of .................................................................................................................................................................................................................
being a Shareholder/s* of Bairaha Farms PLC hereby appoint: ........................................................................................................................
................................................................................................... of .............................................................................................................
.....................................................................................................................................................................................................................
............................................................................................................................................................................ or failing him/her*
Mohamed Thassim Ahamed Furkhan of Colombo or failing him*
Yakooth Naleem
of Colombo or failing him*
Riyal Yakoob
Charitha Prasanna de Silva
Nowfel Saly Jabir
Ilyas Naleem
Kamil Naleem
Mubarak Naleem
of Colombo
as my/our* proxy to represent me/us* and to vote on my/our* behalf at the Thirty-Ninth Annual General Meeting of the Company to be held at
the Bougainvillea Ballroom, Galadari Hotel, No. 64, Lotus Road, Colombo 1 at 11.30 a.m. on Wednesday the 25th of June 2014 and at any
adjournment thereof and at every poll which may be taken in consequences thereof.
For
1.
To receive and consider the Annual Report of the Board of Directors and the financial statements together
with the Report of the Auditors thereon for the year ended 31st March 2014.
2.
To pass the ordinary resolution set out under item 2 of the Notice of Meeting for the re-election of
Desamanya Prof. M.T.A. Furkhan, who is over 70 years of age, as a Director of the Company.
3.
Desamanya C.P. de Silva, who is over 70 years of age, as a Director of the Company.
4.
Deshabandu N.S. Jabir, who is over 70 years of age, as a Director of the Company.
5.
To re-elect as a Director Mr. Riyal Yakoob, who retires by rotation at the Annual General Meeting, in terms of
Articles 87 and 88 of the Articles of Association.
6.
To authorise the Directors to determine donations as they think fit up to the date of the next Annual
General Meeting.
7.
To re-appoint Messrs Ernst & Young, Chartered Accountants as Auditors of the Company and to authorise
the Directors to determine their remuneration.
Against
In witness my/our* hands this ....................................... day of .......................................................................................... Two Thousand

and Fourteen.
*Delete whichever is inapplicable.
.................................................

Signature of Shareholder/s*
Notes: 1. A proxy need not be a member of the Company.

2. Instructions as to completion of Form of Proxy appear overleaf.
Bairaha Farms PLC

Form of Proxy
Instructions for Completion

1. This Form of Proxy must be deposited at the Registered Office, 2nd Floor, No. 407, Galle Road, Colombo 3 not less than forty-eight hours
before the time fixed for the Meeting. The envelope in which the Proxy Form is enclosed must be marked with the words Annual General
Meeting on the top left-hand corner of the envelope, and the envelope must be addressed to Secretaries, Bairaha Farms PLC, 2nd Floor,
No. 407, Galle Road, Colombo 3.
2. In perfecting the Form of Proxy please ensure that all details are legible.
3. If you wish to appoint a person other than the Chairman (or failing him, one of the Directors) as your Proxy please insert the relevant details.
4. Please indicate with an X in the space provided how your proxy is to vote on each resolution. If no indication is given, the Proxy in his/her
discretion will vote as he/she thinks fit.
5. In the case of a Company/Corporation the Proxy must be under its Common Seal, which should be affixed and attested in the manner
prescribed by its Articles of Association.
6. In the case of a proxy signed by an Attorney, the original Power of Attorney must be deposited at the Registered Office for registration.
7. In the case of joint holders the Form of Proxy must be signed by the first holder.
Corporate Information
Company Registration Number
PQ 122
Registered Office
2nd Floor, No. 407, Galle Road, Colombo 3.
Telephone: +9411 2575255
Telefax: +9411 2575256
Website: www.bairaha.com
E-mail: corporateoffice@bairaha.com
Directors
Desamanya Prof. M.T.A. Furkhan - Chairman
Mr. Yakooth Naleem - Managing Director
Mr. Riyal Yakoob - Executive Director
Mr. Ilyas Naleem
Mr. Kamil Naleem - Executive Director
Mr. Mubarak Naleem - Executive Director
Auditors
Messrs Ernst & Young, Chartered Accountants,
No. 201, De Saram Place, Colombo 10.
Secretaries & Registrars

P W Corporate Secretarial (Pvt) Ltd.,
No. 3/17, Kynsey Road, Colombo 8.
Telephone: +9411 4640360
Main Bankers
Amna Bank Ltd.,
No. 480, Galle Road, Colombo 3.
Bank of Ceylon, Corporate Branch,
No. 4, Bank of Ceylon Mawatha, Colombo 1.
Hatton National Bank,
Darley Road, Colombo 10.
This Bairaha Farms PLC annual report has been

produced by Smart Media The Annual Report Company,
a certified carbon neutral organisation. Additionally,
the greenhouse gas emissions resulting from activities
outsourced by Smart Media in the production of this
annual report, including the usage of paper and printing,
are offset through verified sources.

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This Bairaha Farms PLC annual report has been

produced by Smart Media The Annual Report Company,

Bairaha Farms PLC, being the

To achieve complete poultry

While maintaining a sustainable

Report of the Remuneration

Cash Flow Statement

The Bairaha Family

Notes to the Financial

Value Added Statement

Five Year Summary

Annual Report of the Board

Report of the Audit

Independent Auditors Report

Enclosed Form of Proxy

The information in the thematic pages were elicited from;

Bairaha Farms PLC

Group Profit before Finance Cost (Rs. 000)

Group Taxation (Charge)/Reversal (Rs. 000)

Group Total Comprehensive Income (Rs. 000)

Total Value Added (Rs. 000)

Total Revenue to Government (Rs. 000)

Shareholders Funds (Rs. 000)

Retained Earnings (Rs. 000)

Earnings per Share - Basic (Rs.)

Market Price of Share as at 31st March (Rs.)

Return on Equity (%)

Group Revenue (Rs. 000)

Desamanya Prof. M.T.A. Furkhan

Bairaha plans to have a total

It is my privilege and pleasure to present to you the Annual Report

impacted the financial performance of industry players with the prices

Asia Leads the Way

The rate of industry growth of chicken meat production has slowed

Our results reflect the depressed demand conditions that prevailed

Although, global growth of chicken meat production slowed down

The demand for poultry is expected to continue growing in

Bairaha is focusing in expanding

Expansion in the Poultry Industry

Operating Amid Challenges

Upgrading facilities and infrastructure of our operations continued to

The share price of Bairaha Farms PLC remained somewhat stable

The Government has announced incentives for export of poultry

Desamanya Prof. M.T.A. Furkhan

Desamanya Charitha P. de Silva

Deshabandu Nowfel Saly Jabir

Desamanya Prof. M.T.A. Furkhan

Desamanya Charitha P. de Silva

We will continue to automate our systems

Impact of the Economic Environment

Poultry producers in Sri Lanka are required to buy most of the

Nutritional Value of Chicken

Preventing Bone Loss

Poultry Market in Sri Lanka

As a major poultry producer in the country, the operations are

Our associate Company namely Fortune G-P Farms (Lanka) Ltd.,

Challenges and Opportunities

Non-availability of insurance coverage for poultry disease is also