TAL LANKA HOTELS PLC
(Taj Samudra – Colombo)
ANNUAL REPORT – 2022/23
01 Notice of Meeting
02 Corporate Information
03 Review of the Board of Directors
04 Board of Directors
05 Corporate Social Responsibility
06 Annual Report of the Board of Directors on the Affairs
07 Corporate Governance
08 Statement of the Directors’ Responsibilities
09 Report on Audit Committee
10 Report on Related Party Transactions Committee
11 Report on Remuneration Committee
12 Independent Auditor’s Report
13 StatementofProtorLossandOtherComprehensiveIncome
14 Statement of Financial Position
15 Statement of Changes in Equity
16 Statement of Cash Flow
17 Summary of Accounting Policies
18 Notes to the Financial Statements
19 Shareholder Information
20 Six Years Financial Summary
21 Form of Proxy
22 Shareholder Registration Form
03
05
06
08
12
13
16
20
21
22
23
24
27
28
30
31
33
46
76
79
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83
Page
Table of Contents
TAL LANKA HOTELS PLC | Annual Report 2022/23
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NOTICE OF MEETING
NoticeisherebygiventhattheFortyThird(43rd)AnnualGeneralMeetingofTALLankaHotelsPLCwillbeheldonlineviaavirtualplatform
on Friday, 15th September 2023 at 10.30 a.m. and the business to be brought before the meeting will be as follows:
1. To receive and consider the Annual Report of the Board of Directors together with the Financial Statements of the Company for the
year ended 31st March 2023 and the Report of the Auditors thereon.
2.Toproposethefollowingresolutionasanordinaryresolutionforthere-appointmentofMr.TilakDeZoysawhoisovertheageof
seventy years.
“ITISHEREBYRESOLVEDthattheagelimitreferredtoinsection210oftheCompaniesActNo.07of2007shallnotapplytoMr.
TilakDeZoysawhohasreachedtheageofseventy-six(76)yearspriortothisAnnualGeneralMeetingandthathebereappointed
as a Director of the Company.”
3. To re-elect as a Director, Mr. B. K. Chaudhary who retires by rotation in terms of Article 86 of the Articles of Association of the
Company and being eligible, has offered himself for re-election.
4. Tore-electasaDirector,Mr.V.GovindasamywhoretiresbyrotationintermsofArticle86oftheArticlesofAssociationofthe
Company and being eligible, has offered himself for re-election.
5. Tore-electasaDirector,Mr.P.VermawhoretiresbyrotationintermsofArticle86oftheArticlesofAssociationoftheCompany
and being eligible, has offered himself for re-election.
6. To re-elect as a Director, Mr. Samrat Datta, who was appointed as a director of the Company by the board of directors of the
CompanytollacasualvacancyintermsofArticle93oftheArticlesofAssociationoftheCompany.
7. To propose the following resolution as an ordinary resolution;
“ITISHEREBYRESOLVEDTHATKPMGCharteredAccountantsbeandareherebyre-appointedastheauditorsoftheCompany
toholdofcefromtheconclusionofthismeetinguntiltheconclusionofthenextAnnualGeneralMeetingtoauditthenancial
statementsoftheCompanyandthe DirectorsoftheCompanybeandarehereby authorizedtox their remunerationas the
auditors of the Company, for the aforesaid period.”
8. Any other business.
By order of the Board
CorporateServices(Private)Limited
Secretaries
TALLankaHotelsPLC
Colombo, on this 25
th
day of August 2023.
TAL LANKA HOTELS PLC | Annual Report 2022/23
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>>> NOTICE OF MEETING
Note :-
Anyshareholderentitledtoattendandvoteatthismeetingisentitledtoappointaproxytoattendandvote/speakinhis/hersteadanda
form of proxy is sent herewith for this purpose.
Meeting Guidelines:-
A) ThemeetingistobeheldinlinewiththeguidelinesgivenbytheColomboStockExchangeandaspertheapplicablelaws.
B) The Annual General Meeting will be held in the manner set out below:
(i) In order for us to forward the access information necessary for participation at the meeting, which shall include the meeting
identication number, access password, and access telephone number, please forward the duly completed registration form
including your e-mail address and contact telephone number to the registered address of the Company not less than 48 hours
before the time appointed for the holding of the meeting so that the login information could be forwarded to the e-mail addresses
so provided.
(ii) If the Company is unable to post this Notice due to any situation beyond its control, then, this Notice will be published in one issue
of a daily newspaper in the Sinhala, Tamil and English languages and if the circumstances permit, in one issue of the Gazette. The
AnnualReport,NoticeofMeeting,FormofProxyandRegistrationFormwillalsobepublishedonthewebsiteoftheColomboStock
Exchange (https://www.cse.lk/pages/companyprole/company-prole.component.html?symbol=TAJ.N0000) and the website of
the Company (https://www.tajhotels.com/en-in/taj/tajsamudra-colombo/).
(iii) Proxy forms are forwarded to the shareholders together with the Notice of Meeting and Registration form. Proxy forms have been
uploaded to the Company's website (https://www.tajhotels.com/en-in/taj/tajsamudra-colombo/meetings-andevents/) and should
be duly completed as per the instructions given therein and sent to the registered address of the Company or e-mailed to deepa.
[email protected]orcorporateservices@corporateservices.lknotlessthan48hoursbeforethetimeappointedfortheholding
of the meeting and the proxy so appointed shall participate at the meeting through audio or audio visual means only.
(iv) TheshareholderswhoareunabletoparticipateattheAnnualGeneralMeetingviaZoomcouldsendtheirqueries,ifany,toemail
address [email protected] or [email protected] at any time before the meeting time and the
responses to the same will be included in the minutes of the meeting.
(v) Votinginrespectoftheitemsinspeciedintheagendatobe passedwill beregisteredbyusingtheaudiooraudioandvisual
means(Zoom)oradesignatedancillaryonlineapplication.Allofsuchprocedureswillbeexplainedtotheshareholderspriortothe
commencement of the meeting.
(vii)ForanyquestionspleasecontactMs.DeepaPerera(CondentialSecretary)on(0715357635)duringofcehours.
TAL LANKA HOTELS PLC | Annual Report 2022/23
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NAME OF THE COMPANY TALLANKAHOTELSPLC-PQ183
A listed company with limited liability
IncorporatedinSriLankaon14thJune1980
BOARD OF DIRECTORS Mr. G. Sanjeevi - Chairman
Mr. B. K. Chaudhary
Mr. R. K. Chaudhary
Mr.V.Govindasamy
Mr.T.DeZoysa
Mr. R. De Mel
Mr.P.Verma
Mr. P. Sampat (Resigned on 25th Nov 2022)
Mr. S. Datta (Appointed on 25th Nov 2022)
Mr. P. Sengupta
COMPANY SECRETARY CorporateServices(Private)Limited
216, De Saram Place, Colombo 10.
REGISTRARS BusinessIntelligence(Private)Limited
No.08,TickellRoad,Colombo08.
AUDITORS MessrsKPMGSriLanka.
Chartered Accountants
32A,SirMohamedMacanMarkarMawatha,Colombo04.
BANKERS HattonNationalBank
CityOfce,Colombo01.
StandardCharteredBank
37,YorkStreet,Colombo01.
NationsTrustBank
No. 242, Union Place, Colombo 02.
CommercialBank
No.240,PanchikawattaRoad,Colombo10.
LAWYERS MessrsFJ&GDeSaram
216, De Saram Place, Colombo 10.
REGISTERED OFFICE 25, Galle Face Centre Road, Colombo 03.
Phone: 0094 112446622
Website: www.tajhotels.com
HOTEL MANAGER TALHotelsandResortsLtd,
2001, Central Plaza,
18,HarbourRoad,Wanchai,HongKong.
CORPORATE INFORMATION
TAL LANKA HOTELS PLC | Annual Report 2022/23
6
REVIEW OF THE BOARD OF DIRECTORS
OnbehalfoftheBoardofDirectors,Iampleasedtopresentthe
Annual Report of TAL Lanka Hotels PLC for the nancial year
ended March 31, 2023.
Economic outlook
TheSriLankaneconomyhasbeeninastateofdeclinesincethe
beginningof2022.Thefollowingaresomeofthekeyeconomic
statistics for the period from 1st April 2022 to 31st March 2023:
• GDP growth rate: -9.2%
• Inflation rate: 22.1%
• Unemployment rate: 6.5%
• Foreign debt: $51 billion
•Currentaccountdecit:$10.5billion
Theeconomyhascontractedsignicantlyinthepastyear,dueto
a number of factors, including:
• The COVID-19 pandemic, which has had a negative
impact on tourism and other sectors of the economy.
• Thewar inUkraine,whichhasled toarise inglobaloil
prices and other commodities.
• The government's economic mismanagement, which has
led to a severe balance of payments crisis.
The economic crisis has had a devastating impact on the Sri
Lankanpeople.Many people have lost their jobs, and thereare
shortages of essential goods, such as food, fuel, and medicine.
The government has implemented a number of austerity
measures in an attempt to stabilize the economy, but these
measures have only made the situation worse for most people.
The Sri Lankan economy is currently in a deep recession, with
GDP expected to contract by -9.2% in 2022 and a further -4.2% in
2023. This is due to a number of factors, such as
• A severe balance of payments crisis, caused by a large
foreign debt and a decline in tourism revenue.
• A sharp rise in inflation, which reached 69.8% in
September 2022.
• A shortage of essential goods, such as fuel, food, and
medicine.
• Politicalinstability,whichhasledtoalossofcondence
in the government.
However, it is too early to say whether these measures will be
enoughtoavertacompleteeconomiccollapse.Theoutlookfor
the Sri Lankan economy in 2023 is uncertain, but it is likely to
remaindifcult.
Herearesome of thekeyeconomic indicators for Sri Lanka in
2023:
• GDP growth rate: -4.2%
• Inflation rate: 22.1%
• Unemployment rate: 6.5%
• Foreign debt: $51 billion
• Currentaccountdecit:$10.5billion
The government's economic reform program is still in its early
stages, and it is too early to say whether it will be successful.
However, if the government is able to implement the reforms,
it could help to restore condence in the economy and lay the
foundation for a sustainable recovery.
Industry performance
ThetourismindustryinSriLankahasseenasignicantrecovery
inthepastyear, afterbeingseverelyimpactedbytheCOVID-19
pandemic. According to the Sri Lanka Tourism Development
Authority (SLTDA), there were 719,978 international tourist
arrivals to the country in 2022, a 270.2% increase compared to
the 194,495 tourists who visited in 2021.
The growth in tourism was driven by a number of factors,
including:
• The easing of travel restrictions by many countries.
• TheimprovementinthesecuritysituationinSriLanka.
• ThepromotionofSriLankaasatouristdestinationbythe
SLTDA
The tourism industry is expected to continue to grow in 2023,
althoughthepaceof growth is likely toslowdown.The SLTDA
is targeting 1.55 million tourist arrivals in 2023, which would
represent a further 112% increase over 2022. The tourism
industry is a major contributor totheSriLankaneconomy, and
its growth is essential for the country's economic recovery. The
governmentandtheprivatesectorwillneedtoworktogetherto
address the challenges facing the tourism industry in order to
ensure its continued growth.
TAL LANKA HOTELS PLC | Annual Report 2022/23
7
Tourism Arrivals
TherewasasignicantincreaseintouristarrivalsinSriLankain
2022,afterbeingseverelyimpactedbytheCOVID-19pandemicin
2021.Thetrendisexpectedtocontinuein2023,withtheSLTDA
targeting 1.55 million tourist arrivals in the year.
The tourism industry in Sri Lanka is heavily reliant on a small
numberofsourcemarkets.Thismakestheindustryvulnerableto
changesindemandfromthesemarkets.Indiaisthetopsource
marketfortourisminSriLanka,followedbytheUnitedKingdom,
China, Germany, and the United States. These ve markets
accountformorethanhalfofalltouristarrivalsinSriLanka.
Other major source markets for tourism in Sri Lanka include
France, Australia, the Netherlands, and Canada. These markets
accountforafurther20%ofalltouristarrivalsinSriLanka.
However,therearesomechallengesthatthetourismindustrywill
need to address in order to sustain its growth. These challenges
includethehighcostoflivinginSriLanka,theshortageofhotel
rooms and other tourism infrastructure, and the lack of skilled
workersinthetourismsector.
APPRECIATION
On behalf of the Board of Directors, I wish to express our
appreciation of the continued support and cooperation of the
Ministry of Tourism, Ceylon Tourist Board, the Financial Institutions
andotherstakeholders.Ialsowanttothanktheshareholdersfor
their continued support. In conclusion, on behalf of the Board of
Directors,Iextendmysincerethankstothemembersofthestaff,
at all levels, for their dedicated service and contribution to the
company.
Vish Govindasamy
Director
08 April 2023
>>>REVIEW OF THE BOARD OF DIRECTORS
TAL LANKA HOTELS PLC | Annual Report 2022/23
8
BOARD OF DIRECTORS
Mr. G. Sanjeevi
Non - Executive Non - Independent Director
GiriisaCharteredAccountant(AnAllIndiaRanker)andanMBA
from IIM Ahmedabad (class of 1987). In a career spanning
31 years, Giri has built a broad-based career, both nance
and commercial, - across multiple businesses - consumer
businesses, nancial services, retail and pharma - and across
multiple geographies - Asia and Europe. He has lived and
worked in India, Dubai, Singapore and London. Giri joined The
IndianHotelsCompanyLimitedfromMerck&Co,theAmerican
Pharmacompany,wherehewastheCFOforSouthAsiaandthe
Business Head for Pakistan, Bangladesh, Sri Lanka and Nepal.
GiristartedhiscareerinITCLtd,wherehedidavarietyofroles
across businesses in India and the Middle East. Subsequently,
GiriwaswithIL&FSasanInvestmentBankerandheadofM&A.
In addition, he was also the Head of the operationsat Eastern
India. Giri spent several years with Diageo plc – he was their
GlobalBusinessDevelopmentDirectoratLondon,coveringM&A
and Strategy. Earlier, he was the Finance Director at Singapore for
largepartsofAsia.Girihassignicantexperienceinbusinessand
nancial transformation. At Wockhardt,where he was a Global
CFO,suchtransformationeffortsledtoaveryvisible18xjumpin
share price. Giri has also built experience in Retail through stints in
ShoppersStopandAdityaBirlaGroup,wherehewastheCFO.He
haswonseveralawardsincludingMostInfluentialCFOsofIndia
awardfromCIMAin2015&2016:CFOfortheYearforExcellence
in Finance in Managing a Turnaround given out by IMA (2013).
Giri loves to build High Performance teams and has led global
FinanceDirectordevelopmentprogramsatMerck&Coforhigh
potential talent. Deeply passionate about Authentic Leadership
and committed to Doing Wellby DoingGood. He is associated
with some NGOs and has beenon the advisory board of Unltd
India, Beyond Sight Foundation.
Mr. P. Verma
Non- Executive Non - Independent Director
Mr.VermaisoverseeingtheoperationsofSouthIndia;International
hotelsandtheretailbrandEXPRESSIONS.HejoinedIHCLin1990
asaManagementTraineewiththeflagshipTajMahalPalace&
Towers.HehasbeentheGeneralManagerofsomeoftheleading
hotelsof IHCL. Prior tohiscurrentrole, hewastheSeniorVice
President-Operations,South.Heisahotelmanagementgraduate
from IHMCTAN Kolkata, and has also attended the Executive
Development Program at IIM, Bangalore. He is the recipient of
many industry accolades including the 'International Cooperation
between the UK and India Award' (2012) at the House of
ParliamentbyAsianVoice,PATWAAward.
Mr. R. De Mel
Non- Executive Independent Director
Current appointments :
Serves on the Boards of
•NationsTrustBankPLC
•SunshineTeas(Pvt)Ltd.(upto31.32022)
Previous appointments :
• ServedontheBoardsofSingerFinanceLankaPLCand
HDFCMaldives(nomineeofIFC)&AIAInsurancePLC
• ServedasDirector/CEOandGroupCEOatNDBBankand
Group
• VicePresidentofGroupRiskManagementandCorporate
BankingatNDB
• Served on the Boards of over 25 listed and non-listed
companies, within & outside NDB Group, in Srilanka &
Overseas.
Skills and experience :
Heisaprofessionalaccountantwithover20years’experiencein
DevelopmentBankingincludingProjectFinancing,SMEFinancing
and Merchant Banking and around 9 years of experience in
Commercial and Investment Banking. He is a Fellow of the
Chartered Institute of Management Accountants & Chartered
Global Management Accountants of UK and Fellow of the
CertiedManagementAccountantsofSriLanka.
TAL LANKA HOTELS PLC | Annual Report 2022/23
9
Mr. S. Datta
Executive Director
Samratbringshiswealthofknowledgeandextensiveexperience
acrossvariousprestigiouspropertiestotheGrandLuxuryHotel
of Colombo – The Taj Samudra, Colombo where he has been
appointed as the Area Director for Taj Hotels Sri Lanka and
Maldives and General Manager of Taj Samudra.
Before this he was the Cluster General Manager for Taj Exotica
and Taj Coral Resort and Spa Maldives.
Samrathasconsistentlyworkedtowardsupholdingandimproving
experiential standards and personalized service. Along with his
team, he has constantly driven change and innovation with some
phenomenal results shown recently in terms of productivity and
serviceefcienciesthroughthepandemicphaseinMaldives.
Being a people’s person, Samrat builds strong bonds with his
guestsand associates alike to create a positive atmosphereof
hospitality at its best avatar.
Amongst several coveted awards last year Taj Maldives has been
listed in Forbes Guide 2021; featured as a ‘Top resort in the Indian
Ocean category’ by the Conde Nast Traveler Readers’ Choice
Awards 2019 and 2022; CNT’s Favorite Overseas Hotel 2020
and Trip Advisor Readers’ Choice Award winner 2021. Also, Taj
Samudra, Colombo won 2 prestigious awards at the SATA Awards
in 2022.
Samrathasmanaged iconicpropertiesliketheTaj Palace,New
Delhi, Taj Bengal Kolkata, Taj Connemara Chennai, and the Jai
Mahal Palace. Earlier in life he worked in the Middle East with
Fairmont Dubai and Shangri La Muscat. A graduate of Hotel
management, Samrat has also done executive programmes at IIM
– Ahmedabad; Nanyang University, Singapore and TMTC Pune.
Mr. T. De Zoysa
Non - Executive Independent Director
Awell-knowngureintheSriLankanbusinesscommunity,Tilak
deZoysa,FCMI(UK)FPRI(SL),HonoraryConsulforCroatiaand
GlobalAmbassadorforHelpAgeInternationalwasconferredthe
titleof“Deshabandu”byHisExcellencythePresidentofSriLanka
in recognition of his services to the Country and was the recipient
of “The Order of the Rising Sun. Gold Rays with Neck Ribbon”
conferredbyHisMajestytheEmperorofJapan.Recipientofthe
LMDlifetimeachievers’Award2017.
In addition to being the, he Chairs Carson Cumberbatch PLC,
Associated CEAT (Pvt) Ltd., Amaya Hotels and Resorts USA
(Radisson), Jetwing Zinc Journey Lanka (Pvt) Ltd., Trinity Steel
(Pvt) Ltd., CG Corp Global Sri Lanka, HelpAge Sri Lanka and
SasakawaMemorialSriLankaJapanCulturalCentreTrust.
HeisalsotheViceChairmanofCEATKelaniHoldings(Pvt)Ltd.,
and serves on the boards of several listed and private Companies
whichincludeTALLankaHotelsPLC(Taj),TALHotelsandResorts
Ltd, Nawaloka Hospitals PLC,Associated Electrical Corporation
Ltd.,INOACPolymerLanka(Pvt)Ltd.,CinnovationINC.,andVarun
BeveragesLanka(Pvt)Ltd.(Pepsi).
Mr. Tilak de Zoysa was the past Chairman of the Supervisory
Board (AMW) and Advisor to the Al-Futtaim Group of Companies
inSriLanka,pastChairmanoftheCeylonChamberofCommerce,
the National Chamber of Commerce of Sri Lanka, HelpAge
International (UK), Colombo YMBAand Board of Governors and
servedasaMemberoftheMonetaryBoardofSriLanka(2003-
2009).
AlsoMr.TilakdeZoysaisaMemberofaKalutaraBodhiTrust.
>>>BOARD OF DIRECTORS
TAL LANKA HOTELS PLC | Annual Report 2022/23
10
Mr. V. Govindasamy
Non - Executive Independent Director
Vish Govindasamy is a respected leader, visionary and
industryveteranwhoseexperiencedskillintheartofsocially-
responsible entrepreneurship and strategic foresight continues
toupliftSriLanka’sprivatebusinesslandscape.Withover26years
atits helm,Vishisthe GroupManaging Directorofdiversied
conglomerateSunshineHoldingsPLC(CSE:SUN),whichistoday
oneofSriLanka’stop50listedcompanies.Heisalsothechairman
of the Ceylon Chamber of Commerce (CCC), the country’s premier
business chamber with a 183-year-old history.
Over the years, his keen understanding of business, thirst
for innovation, and robust value system have helped him
revolutionizeandelevateSriLanka’sprivatebusinesssector.The
market-leading success enjoyed by Sunshine’s brand portfolio
todaywithsomeofSriLanka’smostlovedconsumerbrandscan
also be attributed to his drive to enrich diverse communities.
Before his current position at Sunshine Holdings, Vish was
the CEO of Watawala Plantations, a diversied plantation
management company in partnership with TATA India. At
Watawala, he is largely credited with having played an instrumental
role in successfully transforming a government-owned plantation
company after privatization into the highest capitalized regional
plantationcompanytobelistedontheColomboStockExchange.
In 1998, Vish marked a signicant milestone in the history of
theGroupby enteringthe brandedteamsegmentinSri Lanka,
with ‘Zesta’, ‘Watawala Tea’ and ‘Ran Kahata’ – brands loved
and tasted every day by millions of local and international
teaconnoisseurs. He was also instrumental in introducing
Healthguard,thelargestpharmacy chaininSri Lanka, whichis
patronized by many for its high-quality range and service.
Vish’s international experience and deep understanding of
markets,coupledwithhisdriveforinnovation,haveenabledhim
tooperateinkeyleadershiprolesinthePrivateSectorinSriLanka,
The100ClubbyLMDmagazinerecognizedVishGovindasamyas
oneoftheTop10CEOsinSriLankain2019and2020.
Vish is passionate about bringing good things to the lives of
deserving Sri Lankans through philanthropy. He has been
instrumental in conceptualising Sunshine Foundation for Good
(SFG),theCSRarmofSunshineHoldings.SFGwasformedwith
clear objectives to drive change towards sustainability, with health
and education as its two central pillars.
AspartofTheFoundation,Vishinitiated'SuwaDiviya',anon-prot
initiative to provide diabetes awareness and education programs.
These are created for anyone who wants to be educated on
preventing and managing diabetes. Given his passion for
philanthropic work, Vish was appointed as a Board Member of
the1990SuwaSeriyaFoundation,SriLanka'sleadingprehospital
emergency ambulance service.
BeforemovingtoSriLanka,heheldseveralleadershiproles
innanceandmanagementinaneducationalinstitutioninthe
USA.Havingcompleted hisprimaryeducation atTrinityCollege
Kandy, he holds an MBA and a BSc in Electrical Engineering from
theUniversityofHartford,USA.
He is a passionate wildlife enthusiast, traveller, golfer and avid
reader in his spare time.
>>>BOARD OF DIRECTORS
TAL LANKA HOTELS PLC | Annual Report 2022/23
11
>>>BOARD OF DIRECTORS
Mr. B. K. Chaudhary
Non - Executive Non-Independent Director
Mr. Binod K. Chaudhary, a Nepali businessman, industrialist
and philanthropist is the Chairman of CG Corp Global, a multi-
dimensional conglomerate, headquarter in Nepal, consisting
160 companies and 123 brands under 15 different business
verticals that cover over 5 continents. Experiencing a rapid
global expansion under the esteemed leadership and vision, he
isfeaturedastherstNepalibillionaireaslistedbyForbes.With
over15,000employeeCGCorpGlobalisdiversiedfromstainless
steel,departmental arcade, trade,food,electronics,nanceand
power to insurance, realty, education, cement, ayurveda, biotech,
telecom and of course, hospitality establishing linkages across
verticals.
Mr. R. K. Chaudhary
Non - Executive Non-Independent Director
Mr. Rahul Chaudhary, the Managing Director of CG Corp Global,
a multi-dimensional conglomerate with over 160 companies and
123 brands under 15 different business verticals, covering over 5
continents.RahulChaudharyheadsCGHospitalityHolding,the
hospitality arms of CG Corp Global and CG Capital Partners. CG
HospitalityHoldingsispartnerswithandownssomeofthemost
iconic assets globally with some of the leading hospitality brands
such as Taj, Vivanta, Taj Safari, Jetwing, Radisson, The Farm,
Summit, CHC, Fairmont,The ZincandThe Fern. CG Hospitality
portfoliocomprisesofover160hotels&resortsin12countries
and107destinationswithover8,633keys.By2025,theportfolio
isexpectedtogrowtoover200hotelsand10,000keys.
Mr. P. Sengupta
Non - Executive Non-Independent Director
Mr.PSengupta,theglobalCFOofCGCorpGlobal.Heisqualied
Chartered Accountant (Institute of Chartered Accountants of
India–India,Kolkata,1992).HeisQualiedseniormanagement
professionalwith23yearsofexperienceinFinance,M&A,Treasury,
eCommerce / digital technology, Corporate Governance, Supply
chain.ExperienceincludesVPFinanceandHeadSupplyChainfor
Shangri-laHotelsandResortswithglobalresponsibilities.
TAL LANKA HOTELS PLC | Annual Report 2022/23
12
CORPORATE SOCIAL RESPONSIBILITY
Inthecontextofchanginghotelbusinessmodels,humancapitalisexceedinglyimportant.Employeeskilldevelopment,employeeretention,
agingworkforce,andescalationofemployeecostsarethemost,challengingareasinthepresentindustryscenario.
We continue to engage and encourage our employees to perform to the best of their talents through a performance-oriented culture
foundedonethicalandtransparentbehaviorwhichinturnpromotessustainableandprotablegrowth.Wehaveattractedthebestand
brightestfromtheentirepoolofavailabletalentedassociatestobuildastrongworkforcethatreflectsthediversityoftheguestsweserve.
Taj Samudra has been successful in molding existing employees according to future requirements. We add value to an organization by
providingobjectiveguidancetomanagersandemployeesonpeople-relatedmatters.Thisworkisdonethroughacombinationofday-to-day
supportforemployees,projectwork,andlong-termstrategicplanning.
Hence,maintaininghealthyemployeerelationsbetweentheStaffandtheManagement.Thebestpractices,policies,andproceduresarein
placetoensurethatTajSamudraismorethanjustaworkplace.WehaveorganizedemployeerecognitionactivitiessuchasStarawards,
EmployeeRecognition(MD’sClub),InterDepartmentCricketTournament,PirithCeremony,TajSamudraBakMahaUlela,VesakLantern
Competition,CarromTournament,EmployeeoftheMonth,BirthdayCelebrationsandVinodaSamaya.
TajSamudraalsowonthebestworkplaceawardfor5consecutiveyearsfrom2012to2017.
TAL LANKA HOTELS PLC | Annual Report 2022/23
13
ANNUAL REPORT OF THE BOARD OF DIRECTORS
ON THE AFFAIRS OF THE COMPANY
1. The Board of Directors present herewith the Annual Report
together with the audited nancial statements of TAL
LankaHotelsPLCfortheyearended31March2023.
Formation
2. TALLankaHotelsPLCisapubliclimitedliabilitycompany
incorporatedin Sri Lankain 1980 and reregisteredunder
the provisions of the Companies Act No 7 of 2007. The re-
registrationnumberisPQ183.
The Company is listed in the Diri Savi Board of the Colombo
StockExchange.TheRegisteredofceandprincipalplace
of business is situated at No. 25, Galle Face Centre Road,
Colombo 03.
TAL Hotels & Resorts Ltd, which holds 58.14% of the
shares,istheparentcompanyofTALLankaHotelsPLC.
Principal and other activities
3. The principal activity of the Company is the hospitality
tradeandtheCompanyownstheTajSamudraHotel.
Financial statements
4. The nancial statements which include the statement of
prot or loss, statement of nancial position, cash flow
statement, statement of changes in equity, and the notes to
thenancialstatementsoftheCompanyfortheyearended
31 March 2023 are set out on pages 27 to 75.
Independent Auditor's report
5. The auditor's report is set out on pages 24.
Changes in accounting policies
6. The accounting policies adopted in the preparation of the
nancialstatementsaregivenonpages33to45
There were no changes in the accounting policies adopted
in the previous year for the Company.
Review of business
7. ThestatementofnancialpositionoftheCompanyasat
31 March 2023 is set out on page 28 and assessment of
thenancialperformanceoftheCompanyissetoutinthe
statement of comprehensive income on page 27.
Dividend
8. No dividends have been declared during the year under
review.
Reserves
9. Total reserves and their composition are set out in
the statement of changes in equity on page 30 of the
Company'snancialstatements.
Substantial shareholdings
10. TALHotels&ResortsLimitedholds58.14%ofthestated
capital of the Company.
The details of the main shareholders of the Company and
the percentages held by each of them are given below:
Name of Holding No. of
shareholder percentage shares
TALHotels&ResortsLTD. 58.14 81,181,580
IHOCOBV. 24.62 34,375,640
As at 31 March 2023 the public holds 17.24% of the issued Share
Capital of the Company.
TAL LANKA HOTELS PLC | Annual Report 2022/23
14
Directors
11. The names of the Directors of the Company as at the end
of the accounting period:
Mr. G. Sanjeevi - Chairman
Mr. B. K. Chaudhary
Mr. R. K. Chaudhary
Mr.V.Govindasamy
Mr. R. De Mel
Mr.T.DeZoysa
Mr.P.S.Verma
Mr. S. Datta
Mr. P. Sengupta
Interests Register
12. Particulars of entries made in the interests register of the
Company during the year under review are as follows:
(a) Directors' interest in contracts and proposed contracts
with the Company
The Director's interest in the contracts of the Company is
disclosedunderNote34tothenancialstatements.
b) Directors' interests in shares of the Company
None of the Directors hold any shares in the Company.
 
PleasereferNote34.3ofthenancialstatements.
(d) Particulars relating to authorization to disclose, make use
of or act on company information.
No entries were made under this heading in the Interests
Register.
(e) Particulars of indemnity given, or insurance effected
to directors or employees under section 218 of the
Companies Act No. 7 of 2007.
No entries were made under this heading in the Interests
Register.

the Company as audit fees
13. The remuneration payable by the Company to the
independent auditors of the Company as audit fees is
Rs.1,266,000/- (2022 Rs.1,266,000/-).

the Company for non-audit services
14. No remuneration is payable by the Company to the
independent auditors of the Company as non-audit fees.
Auditor's relationship or any interest with the Company
15. The Directors are satised that, based on written
representations made by the independent Auditors to the
Board, the Auditors did not have any relationship or any
interest with the Company and / or other companies in
the group of companies to whichTAL Lanka Hotels PLC
belongs, that would impair their independence.
Corporate governance
16. The Directors place great emphasis on instituting and
maintaining leading edge, internationally accepted
Corporate Governance practices and principles with
respect to the management and operations of the group
ofcompaniestowhichTALLankaHotelsPLCbelongs,in
order to develop and nurture long-term relationships with
ourkeystakeholders.
The extent to which the Company has complied with the
CorporateGovernanceRulessetoutintheListingRulesof
theColomboStockExchangehasbeensetoutinpages16
to 19 of this Annual Report.
>>>ANNUAL REPORT OF THE BOARD OF DIRECTORS ON
THE AFFAIRS OF THE COMPANY
TAL LANKA HOTELS PLC | Annual Report 2022/23
15
>>>ANNUAL REPORT OF THE BOARD OF DIRECTORS ON THE AFFAIRS OF
THE COMPANY
Statutory payments
17. The Directorsconrmthattothebestoftheirknowledge
all taxes, duties, levies and all statutory payments by the
Company and all contributions, levies and taxes payable on
behalf of and in respect of the employees of the Company
as at Balance Sheet date have been paid, or where relevant
provided for.
Environmental protection
18. The Company is sensitive to the needs of the environment
and makes every endeavor to comply with the relevant
environmental laws, regulations and best practices
applicable in the country.
Donations
19. No donations have been made by the Company during the
year.
Going concern
20. The Directors have reviewed the Company's business plans
andaresatisedthattheCompanyhasadequateresources
to continue as a going concern for the foreseeable future.
As such the nancial statements have been preparedon
that basis.
Future developments
21. The Company plans to continue with the renovation/
development programs and is committed to enhance the
imageandpositioningofthehotelinthemarketespecially
in view of growing economy and tourist arrivals in the
country.
Post balance sheet events
22. Nomaterialeventsthatrequireadjustmentstothenancial
statementshavetakenplace,subsequenttothedateofthe
Balance Sheet other than those disclosed, if any, in Note to
thenancialstatements.
Auditors
23. Thenancialstatementshavebeenauditedbytheexternal
Auditors of the Company, Messer's KPMG , Chartered
Accountants
V. Govindasamy T. De Zoysa
Director Director
CorporateServices(Private)Limited
Secretaries
Colombo
08 April 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
16
CORPORATE GOVERNANCE
In view of the current economic downturn corporate governance
and its reporting have become a pressing issue for many public
listedcompanies.TALLankaHotelsPLChascircumventedthese
concerns by putting in place the proper controls and monitoring
systems that assure a transparent corporate structure powered
solely by business needs. This also guarantees a high level of
disclosureinrelationtogoingconcernreporting,riskmanagement
and internal controls.
We take our Corporate Governance initiative beyond mere
compliance with the laws and regulations applicable to
our business and Sri Lanka. As it is key component of our
Environmental, Social and Governance strategy, we set an annual
plan and work towards achieving it by adopting best practices
based on the highest ethical standards.
The directives of corporate governance of the Company are
outlined as :
• Adopting and adapting the principles, policies, and
procedures that ensure our accountability to our
stakeholders, which includes working through inherent
conflict of interest and arriving at a consensus
acceptable to all.
• Overseeing the interactions between the shareholders,
Board of Directors, and Company Management who
shape our corporate performance and the direction
takenbythebusiness,bydeterminingthewaysinwhich
we could reach the most effective strategic decisions.
• Ensuring transparency, which both safeguards the
interests of our shareholders as well as assures strong
and balanced economic development for the Company.
GOVERNANCE STRUCTURE
Our Corporate Governance structure is designed to support
business needs by ensuring diligence and effective engagement
withBoardcommittees andexecutive management on specic
matters, supported by clearly documented mandates that
demarcate the role of the Executive Management as trustee rather
thantheownerofshareholdercapital.OurCorporateGovernance
structure also enables us to align the interests of our wider group
ofstakeholdersandengageeffectivelywiththem.
TAL Lanka Hotels PLC also complies with all internal procedures
and processes including the following :
a.) The Article of Association
b.) The Standard operation procedure and guidelines
c.) TheITframework,policiesandprocedures
d.) HRpoliciesandprocedures
BOARD OF DIRECTORS
The Board of Directors is appointed by the shareholders and has
the overarching leadership and oversight of the Company as the
body that governs operations and delivers shareholder value in
line with its strategic and business objectives.
TheDirectorsensurethattheCompanyhasastrongframework
of governance in place that embeds its governance culture
throughout the organisation with a view to building a successful
andsustainablebusiness.Withinthisframework,theBoardfulls
to its shareholders as well as to the Company, three duciary
duties, namely the duty of loyalty, the duty of care and the duty
of disclosure.
APPOINTMENT OF DIRECTORS
All new Board appointments are communicated to the Colombo
StockExchange(CSE),alongwithabackgrounddocumentabout
the new Director, giving details of the nature of the appointment,
his experience, areas of speciality, qualication and board
appointments held in other companies.
RE-ELECTION OF DIRECTORS
The Directors appointed to the Board serve up to and until the next
Annual General Meeting, at which a third of the Board is eligible
for re-election by the shareholders. Board members cease to be
directors of the Company when they reach 70 years of age.
BOARD COMPOSITION
Board independence is essential to bring objectivity and
transparency to the Executive Management in all its dealings
on behalf of the Company. In order to ensure this, the Board of
Directors appointed comprise three independent non-executive
directors,venon-executivedirectorsandoneexecutivedirector
of which the Chairman of the board is a non-executive director.
This careful composition ensures the right balance of power and
authority needed to execute the various functions of the Board.
TAL LANKA HOTELS PLC | Annual Report 2022/23
17
BOARD MEETINGS
BOARD SUB-COMMITTEES
The Board has appointed sub-committees to discharge its
functions, which serve as oversight mechanisms for enhancing
itsmonitoringofcompliance and risk management.TAL Lanka
Hotels PLC. has three Board Committees, namely the Audit
Committee, Remuneration Committee, Related Party Transaction
Review Committee, each has its own terms of reference and is
mandatedbytheListing rulesofColombo StockExchangeand
meets all prescribed criteria of the Rules. All three committees
comprise Non-Executive independent Directors and a senior
independent director is nominated as the chairperson of each
committee.Sufcientresourcesareprovidedtoenabletheboard
Committeestoundertaketheirspecicroles.
25/11/2022
Mr. G. Sanjeevi
Mr. R. K. Chaudhary
Mr.V.Govindasamy
Mr. R. De Mel
Mr.P.S.Verma
Mr. P. Sampat
Mr. P. Sengupta
BOARD COMMITMENT
The Directors are collectively responsible for ensuring effective
andscallysoundoperationsandprogrammesthatsupportthe
organisation’s mission. The Board recognises the importance of
a comprehensive system of corporate governance and internal
controls, and commits to maintaining the highest standards of
integrity, transparency and professionalism in the governance of
the Company. It is guided by the Code of Best Practice and the
most recent principles of Corporate Governance to achieve this.
BOARD FUNCTIONS
TofulllitsduciarydutytoactBonadeforthebenetofthe
Company in general and its shareholders in particular, the Board
has developed corporate governance guidelines that provide the
frameworkforitsfunctionsaswellasenableittodischargethe
Company’s corporate responsibility towards its stakeholders.
These guidelines establish a solid foundation for management as
well as provide oversight and the necessary authority to review
and evaluate operations as and when required. They also enable
theBoardtomakedecisionsthatareindependentofthesenior
management of the Company.
These corporate governance guidelines adhere to the Company’s
philosophy of responsibility, accountability, equity, transparency
and fair disclosure. The Board meets regularly to review the
Company’soperationsandtakesresponsibilityforthefollowing:
Area of
responsibility
Board oversight on
responsibility
Strategic responsibility
• Formulation of policies
• 
approval of the Company's
corporate strategy including
new capital investments and
performance objectives
• Monitoring senior
management's performance
and implementation of
the corporate strategy
and ensuring appropriate
resources are available to
enable implementation
Financial responsibility
• Approving and monitoring

• Approving and monitoring
the progress of major
capital expenditure,
capital management and
acquisitions and divestitures
• 
facilities whenever is
required
Compliance and control
responsibility
• Oversight of the
Company, including its
control and accountability
systems
• Reviewing and ratifying
risk management and
internal compliance and
control systems, codes
of conduct and legal
compliance
• Updating and maintaining
organisational rules and
policies to keep in step with
changes in the power sector
>>> CORPORATE GOVERNANCE
TAL LANKA HOTELS PLC | Annual Report 2022/23
18
Thecommitteesworkinaccordancewithanannualworkplanwithxedagendaitemsfollowingkeyeventsofrelevancetotheannual
nancialreportingcycle.Inaddition,thecommitteesrequesttopicstobediscussedontheirmeetingsfromtimetotime.
SHAREHOLDER COMMUNICATION
The Company considers constructive dialogue with all shareholders and investors to be essential from the perspective of sustainable
growth and medium- to long-term enhancement of corporate value, and implements various measures to promote such dialogue. Effective
shareholdercommunicationalsoallowsTALLankaHotelsPLCtoexercisegreatercontroloveritscapitalformationprocess.
In line with the rule of full and fair disclosure, TAL Lanka Hotels PLC communicates with its shareholders on the business strategies
implemented.Thenancialresultsachievedaswellasvariousotherinitiativesintroducedtostrengthenitsreputationandperformance
into the future. These communications are timed, up-to-date and enable shareholders to understand the value of their investment as well as
howtheirinvestmentisbeingutilizedtoenhancetheirprotabilityaswellastheaccountabilityoftheBoard.Keypointofcommunication
communication are at the Annual General Meeting, via Annual Reports, Interim Financial Statements, press releases and announcements
intheColomboStockExchange.ShareholdersarealsoinvitedtosubmittheirwrittensuggestionsandconcernstotheBoardofDirectors
through the Company Secretary.
COMPLIANCE
Compliance with corporate governance rules of the colombo stock exchange
The following disclosures are made in conformity with Section 7.10 of the Rules of the Colombo Stock Exchange;
Rule No. Subject Extent of Adoption Compliance Status
7.10.1(a)
Non-Executive Directors
(NED)
Eight (8) of the Nine (9) Directors were Non-Executive Directors as at
31st March 2023 Complied
7.10.1(b)
Basis of Calculation of Total
Number of Non-Executive
Directors
Based on the number as at the conclusion of the immediately preceding AGM Complied
7.10.2 (a) Independent Directors (ID)
Three (3) of the Eight (8) Non-Executive Directors were Independent as at
31st March 2023 Complied
7.10.2 (b) Independent Directors
AllNon-ExecutiveDirectorshavesubmittedtheirconrmationofindependenceas
per the criteria set by the CSE rules, which is in line with the regulatory requirements.
Complied
7.10.3 (a)
Disclosure relating to
Directors
The Board assessed the independence declared by the Directors and determined
the Directors who are independent.
Complied
7.10.3 (b)
Disclosure relating to
Directors
The Board has determined that Three (3) Non-Executive Directors satisfy the
criteriafor“independence”setin theListing RulesaswellasinitemA.5.5ofthe
CASLcodetable.
Complied
7.10.3 (c)
Disclosure relating to
Directors
A brief resume of each Director should be included in the Annual Report including
the Director’s areas of expertise.
Complied
7.10.3 (d)
Disclosure relating to
Directors
ForthwithprovideabriefproleofnewDirectorappointedtotheBoardwithdetails
speciedin7.10.3(a),(b)and(c)totheExchange.
Complied
7.10.5 Remuneration Committee A listed company shall have a Remuneration Committee Complied
>>> CORPORATE GOVERNANCE
TAL LANKA HOTELS PLC | Annual Report 2022/23
19
This section covers
TAL Lanka Hotels PLC
’s extent of adherence to the requirements of the Code of Best practice on Related Party Transactions
issued by the Securities & Exchange Commission of Sri Lanka and Section 9 of the Listing Rules of the Colombo Stock Exchange:
Rule No. Subject Extent of Adoption Compliance Status
9.2.1&
9.2.3
Related Party Transactions
Review Committee (RPTRC)
A listed company shall have a RPTRC. The functions of the Committee are
stated in Related Party Transactions Review Committee report in page 22
Complied
9.2.2
Composition of the Related
Party Transactions Review
Committee
The RPTRC consists of following Directors:
•Mr.V.Govindasamy
•Mr.TilakDeZoysa
Complied
9.2.4
Related Party Transactions
Review Committee-Meetings
Thecommitteemet04timesduringthenancialyearof2022/2023 Complied
9.3.2 (a)
Disclosure - Non-recurrent
Related Party Transactions
Company has not involved with an Non - recurrent related party transactions
with aggregate value exceeds 10% of the equity or 5% total assets whichever is
lower. No disclosures required.
Complied
9.3.2 (d)
Declaration by the
Boards of Directors
AfrmativestatementofthecompliancewithlistingrulespertainingtoRPTS Complied
>>> CORPORATE GOVERNANCE
7.10.5 (a)
Composition of
Remuneration
Committee
The Remuneration Committee comprised of Three (3) Independent
Non- Executive Directors as at 31st March 2023.
Complied
7.10.5 (b)
Functions of Remuneration
Committee
The Remuneration Committee shall recommend the remuneration of the
Executive Director(s). Complied
7.10.5 (c)
Disclosure in the Annual
Report relating to
Remuneration Committee
Names of Remuneration Committee members and the disclosure of the
Remuneration Committee is given on page 23 and the remuneration paid to
Directors is given in the Note 34.3 to the Financial Statement on page 67
Complied
7.10.6 (a)
Composition of Audit
Committee
Shall comprise of NEDs, a majority of whom will be independent. Complied
7.10.6 (b) Audit Committee Functions Audit Committee functions are stated in the Audit Committee Report Page 21 Complied
7.10.6 (c)
Disclosure in Annual Report
relating to Audit Committee
The names of the Audit Committee members given on page 21 Complied
7.13.1 MinimumPublicHolding
As a listed company in the Diri Savi Board, the Company maintained the minimum
publicholdingunderspeciedcriteria
Complied
TAL LANKA HOTELS PLC | Annual Report 2022/23
20
The Directors are responsible under Sections 150 (1), 151,
152 (1) & 153 of the Companies Act No. 7 of 2007, to ensure
compliance with the requirements set out therein to prepare
nancial statements for each nancial year giving a true and
fair view of the state of affairs of the Company as at the end of
thenancialyearandoftheprot&lossoftheCompanyforthe
nancialyear.
The Directors are also responsible, under Section 148, for
ensuring that proper accounting records are kept to enable,
determination of nancial position with reasonable accuracy,
preparationofnancialstatementsandauditofsuchstatements
to be carried out readily and properly.
The Board accepts responsibility for the integrity and objectivity
ofthenancialstatementspresented.TheDirectorsconrmthat
in preparing the nancial statements, appropriate accounting
policies have been selected and applied consistently while
reasonable and prudent judgments have been made so that the
form and substance of transactions are properly reflected.
They also conrm that the nancial statements have been
prepared and presented in accordance with the Sri Lanka
Accounting standards, Companies Act No 07 of 2007 and the
listingrulesoftheColomboStockExchange.Further,thenancial
statements provide the information required by the Companies
ActandthelistingrulesoftheColomboStockExchange.
TheDirectorsareoftheopinion,basedontheirknowledgeof
thecompany,keyoperationsandspecicinquiriesthatadequate
resources exist to support the Company on a going concern basis
overthenextyear.Thesenancialstatementshavebeenprepared
on that basis.
The Directors have taken reasonable measures to safeguard
the assets of the Company and, in that context, have instituted
appropriate systems of internal control with a view to preventing
and detecting fraud and other irregularities.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The external Auditors, Messrs KPMG deemed re- appointed in
terms of Section 158 of the Companies Act were provided with
everyopportunitytoundertaketheinspectionstheyconsidered
appropriate to enable them to form their opinion on the Financial
Statements. The report of the Auditors, shown on page 24 sets
out their responsibilities in relation to the Financial Statements.
Compliance Report
The Directors conrm that to the best of their knowledge, all
statutory payments relating to employees and the Government
that were due in respect of the Company as at the Balance Sheet
date have been paid or where relevant, provided for.
By order of the Board
CorporateServices(Private)Limited.
Secretaries
08 April 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
21
3. ensuring the external auditor’s independence.
4. the performance of the Company’s internal audit functions
in order to ensure that the Company’s internal controls and
riskmanagementareadequate.
5. To make recommendations to the board pertaining to
appointment, re-appointment and removal of external
auditors and to approve the remuneration and terms of
engagement of the external auditors.
Internal Audits
The Committee assess the effectiveness of the Internal Controls
that have been designed to provide reasonable assurance
to the Directors that assets are safeguarded and that the
nancialreportingsystemcanberelieduponinpreparationand
presentation of Financial Statements. The function of Internal
Audits conducted by Messrs. M C Ranganathan & Company
in line with an agreed annual audit plan. The Committee has
recommended to the Board of Directors that Messrs. M C
Ranganathan&Companybere-appointedastheinternalauditors
oftheCompanyforthenextnancialyear.
External Audits
The Committee meets the External Auditors at least once a year
toreviewtheirndings,issuesraised,aswellastheeffectiveness
of the internal controls in place.
The Committee has recommended to the Board of Directors
that Messrs. KPMG, Chartered Accountants, be re-appointed as
the auditors of the Company for the nancial year ending 31st
March 2024, subject to the approval of the Shareholders at the
Annual General Meeting. The Audit Committee is of the view that
Messrs. KPMG, is an independent entity as per their declaration
made to the Company and the Audit Committee concurs with
their declaration.
Conclusion
The Audit Committee is of the view that adequate controls are in
placetosafeguardtheCompany’sassetsand thatthenancial
position and the results disclosed in the Audited Financial
Statements are free from any material
misstatements.
Vish Govindasamy
Chairman
Audit Committee
08 April 2023
Composition of the Audit Committee
TheAuditCommittee,appointedbytheBoardofDirectorsofTAL
LankaHotelsPLCcomprisesofthreeNon-Executiveindependent
Directors.TheCommitteeischairedbyMr.VishGovindasamy.The
othertwocommitteememberscompriseofMr.TilakDeZoysaand
Mr. Russell De Mel.
Meetings
Four meetings of the Committee were held during the year. The
attendance of the members at these meetings is as follows:
REPORT OF THE AUDIT COMMITTEE
Mr. Samrat Datta, Area Director Sri Lanka and Maldives and
Mr. Paras Puri, Area Financial Controller Sri Lanka and Maldives/
Director of Finance – Taj Samudra attend the Audit committee
meetings by invitation. The other ofcials of the Company attend
the meetings by invitation on a need basis. The external auditors are
present at the Audit Committee Meetings when matters pertaining
to their functions come up for consideration.
Role of the Committee
ThekeypurposeoftheAuditCommitteeofTALLankaHotelsPLC
istoassisttheBoardofDirectorsinfulllingitsresponsibilitiesfor;
1. the integrity of the Financial Statements in accordance with
SriLankaAccountingStandards.
2. the Company’s compliance with legal and regulatory
requirements.
Name of Director
Attendance and Meeting Dates
11/04/2022 14/07/2022 11/10/2022 10/01/2023 Total
Mr.Vish
Govindasamy
4/4
Mr.Tilak
DeZoysa
4/4
Mr.
Russell
De Mel
4/4
By
Invitation
Mr.
Samrat Datta - -
2/4
Mr. Paras Puri
4/4
TAL LANKA HOTELS PLC | Annual Report 2022/23
22
REPORT OF THE RELATED PARTY TRANSACTIONS
REVIEW COMMITTEE
The Related Party Transaction Review Committee (RPTRC) is
appointed by the Board of Directors of TAL Lanka Hotels PLC
in terms of the Listing Rules of the Colombo Stock Exchange
on Related Party Transactions, as issued by the Securities and
ExchangeCommissionofSriLanka(SEC).
Composition of the Committee
The committee comprises of the following two Non- Executive
Independent Directors.
Mr.VishGovindasamy–Chairman
Mr.TilakDeZoysa–CommitteeMember
Role of the Committee
Thekeydutiesofthecommittee;
• to develop a Related Party Transaction Policy as directed
by the CSE and SEC and to recommend the adoption of
same to the Board of Directors of the Company.
• to review in advance all related party transactions prior to
the execution of the transaction,
• to update the Board of Directors on the related party
transactions of each company of the Group,
• to make immediate market disclosures on applicable
related party transactions, as required by Section 9 of the
ContinuingListingRequirementsoftheCSE,
• to monitor all related party transactions of the entity which
aretransactedonnormalcommercialtermstomakesure
that they are not prejudicial to the interests of the entity and
its minority shareholders.
• to make appropriate disclosures on Related Party
Transactions in the Annual Report, as required by Section 9
oftheContinuingListingRequirementsoftheCSE
Meetings
Four meetings of the Committee were held during the year. The
attendance of the members at these meetings is as follows:
Disclosures
A detailed disclosure of the recurrent related party transactions
entered into by the Company during the year under review is
disclosedinNote34.6tothenancialstatementsgiveninpage68
of this report. There were no non-recurrent related party transactions
during the year under review.
Declaration
ItisdeclaredafrmativelybythecommitteethattheCompanyisin
compliancewith Rule9ofthe ListingRulesof the ColomboStock
Exchange pertaining to Related Party Transactions during the year
under review.
Vish Govindasamy
Chairman
Related Party Transaction Review Committee
08 April 2023
Name of Director
Attendance and Meeting Dates
11/04/2022 14/07/2022 11/10/2022 10/01/2023 Total
Mr.Vish
Govindasamy
4/4
Mr.Tilak
DeZoysa
4/4
By
Invitation
Mr.
Russell
De Mel
4/4
Mr.
Samrat Datta - -
2/4
Mr. Paras Puri
4/4
TAL LANKA HOTELS PLC | Annual Report 2022/23
23
Composition of the Committee
The Remuneration Committee, appointed by the Board of
Directors, currently consists of three Non- Executive Independent
Directors as follows.
Mr.VishGovindasamy-Chairman
Mr.TilakDeZoysa
Mr. Russell De Mel
The Remuneration Committee has been set up on 22nd December
2022 and will meet more often if required.
Role of the Committee
ItsroleistomakerecommendationstotheBoardonthefollowing.
• Remuneration policy and emoluments for certain Senior
Executives.
• Employeebenetsandlongtermincentiveschemes.
REPORT OF THE REMUNERATION COMMITTEE
Remuneration policy
The Company’s remuneration policy is based on the following
principles.
• To deliver improved shareholder value by ensuring that
individual performance and rewards reflect and reinforce
the business objectives of the Company.
• To support the recruitment, motivation and retention of
highlyqualiedstaff.
• Toensurethatperformanceisthekeyfactorindetermining
individual rewards.
The Committee is not responsible for setting the level of
remuneration of Non-Executive Directors, which is determined by
the Board.
Vish Govindasamy
Chairman
Remuneration Committee
08 April 2023
INDEPENDENT AUDITOR'S REPORT
C. P. Jayatilake FCA
Ms. S. Joseph FCA
S. T. D. L. Perera
Ms. B. K. D. T. N.
Ms. C.T.K.N. Perera ACA
Principals - S.R.I. Perera FCMA(UK), LLB. Attorney-at-Law, H.S. Goonewardene ACA,
Ms. F. R. Ziyad FCMA (UK), FTII
T.J.S. Rajakarier FCA
Ms. S.M.B. Jayasekara FCA
G.A.U. Karunaratne FCA
R.H. Rajan FCA
A.M.R.P. Alahakoon ACA
W. J. C. Perera FCA
W. K. D. C. Abeyrathne FCA
R. M. D. B. Rajapakse FCA
M. N. M. Shameel FCA
Ms. P. M. K. Sumanasekera FCA
KPMG
(Chatered Accounts)
32A, Sir Mohamed Macan Markar Mawatha,
P.O. Box 186,
Colombo 00300, Sri Lanka.
Tel : +94 - 11 542 6426
Fax : +94 - 11 244 5872
+94 - 11 244 6058
Internet : www.kpmg.com/lk
KPMG, a Sri Lankan partnership and a member firm of the
KPMG global organization of independent member firms
affiliated with KPGM International Limited, a private
English company limited by guarantee.
TO THE SHAREHOLDERS OF TAL LANKA HOTELS PLC
Report on the Audit of the Financial Statements
Opinion
We have audited the nancial statements of TALLanka Hotels
PLC("theCompany"),whichcomprisethestatementofnancial
positionasat31stMarch2023,andthestatementofprotorloss
and other comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and notes
to the nancial statements, includinga summary of signicant
accounting policies and other explanatory information as set out
on pages 27 to 75.
In our opinion, the accompanying nancial statements of the
Company give a true and fair view of the nancial position
of the Company as at 31st March 2023, and of their nancial
performance and cash flows for the year then ended in accordance
withSriLankaAccountingStandards.
Basis for Opinion
Weconducted ouraudit in accordance with Sri Lanka
AuditingStandards(SLAuSs).Ourresponsibilitiesunderthose
standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Statements section of our report.
We are independent of the company in accordance with the
CodeofEthicsissuedbyCASriLanka(CodeofEthics),andwe
havefullledourotherethicalresponsibilitiesinaccordancewith
the Code of Ethics. We believe that the audit evidence we have
obtainedissufcient andappropriatetoprovideabasisforour
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment,wereofmostsignicanceinourauditoftheCompany
nancial statements of the current period. These matters were
addressedinthecontextofourauditofthecompanynancial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
C. P. Jayatilake FCA
Ms. S. Joseph FCA
S. T. D. L. Perera
Ms. B. K. D. T. N.
Ms. C.T.K.N. Perera ACA
Principals - S.R.I. Perera FCMA(UK), LLB. Attorney-at-Law, H.S. Goonewardene ACA,
Ms. F. R. Ziyad FCMA (UK), FTII
T.J.S. Rajakarier FCA
Ms. S.M.B. Jayasekara FCA
G.A.U. Karunaratne FCA
R.H. Rajan FCA
A.M.R.P. Alahakoon ACA
W. J. C. Perera FCA
W. K. D. C. Abeyrathne FCA
R. M. D. B. Rajapakse FCA
M. N. M. Shameel FCA
Ms. P. M. K. Sumanasekera FCA
KPMG
(Chatered Accounts)
32A, Sir Mohamed Macan Markar Mawatha,
P.O. Box 186,
Colombo 00300, Sri Lanka.
Tel : +94 - 11 542 6426
Fax : +94 - 11 244 5872
+94 - 11 244 6058
Internet : www.kpmg.com/lk
KPMG, a Sri Lankan partnership and a member firm of the
KPMG global organization of independent member firms
affiliated with KPGM International Limited, a private
English company limited by guarantee.
01. Management assessment of the Company ability to continue
as going concern
Ref          
statements
Risk Description
The Company has incurred a net
loss of Rs. 1,291,194,196/- for the
period ended 31st March 2023, as
of that date, the Company's had net
current liability Rs. 602,909,610/-.
As disclosed in note 2.8, the
nancial statements have been
prepared on a going concern basis.
In adopting the going concern
basisofpreparationofthenancial
statements, the directors have
reviewed the Company's cash
flow projections prepared by
the management and continuous
nancial support from its
ultimateparentCompany,TAL
Hotels & Resorts Limited. The
cash flow projections were based
on management's assumptions
and estimation of future cash
inflows and outflows, also taking
into consideration the impact of
economic crisis related estimate
uncertainty.
Note 29 to the nancial
statements, which describes
increased estimation uncertainty
in the preparation of the nancial
statements, specically as it
relates to the impacts of economic
crisis on the Company's future
Ourauditproceduresincluded
• Obtaining the Company’s
cash flow projections
covering period of not less
than twelve months from
the reporting period end
date and evaluating these
key assumptions used in
preparing the projections.
• Obtaininga letter of support
from the parent company
and evaluating their ability to
providethenancialsupport
in order to meet the liabilities
of the Company as and when
they fall due and payable.
• Evaluating the sensitivity of
the projected available cash
by considering downside
scenarios together with
reasonably plausible changes
to the key assumptions
and considering whether
there were any indicators
of management bias in the
selection of the assumptions.
Our Responses
Other Information
Management is responsible for the other information. The other
information comprises the information included in the Annual
report but does not include the nancial statements and our
auditor's report thereon. The Annual report is expected to be
made available to us after the date of this auditor's report.
Ouropiniononthenancialstatements does not cover the other
information and we will not express any form of assurance
conclusionthereon.Inconnectionwithourauditofthenancial
statements, our responsibility is to read the other information
identied above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent
01. Management assessment of the Company ability to continue
as going concern (Contd.)
Ref          
statements
prospects, performance
and cash flows. Further,
the management has
described how they plan
to deal with these events
and circumstances.
We have identied the
management assessment
of the Company's ability
to continue as going
concern as a key audit
matter because the
cash flow projections
referred to above involves
consideration of future
events and circumstances
which are inherently
uncertain, and effect
of those uncertainties
maysignicantlyimpact
the resulting accounting
estimates. Therefore, the
assessment requires the
exercise of signicant
management judgement
in assessing future cash
inflows and outflow
which could be subject
to potential management
bias.
Risk Description
Our Responses
• Inspecting the facility
agreements for the
Company’s long-term loans
to identify any nancial
covenants or similar
terms and assessing the
implication of these on the
Company’s liquidity.
• Assessing the adequacy
of disclosures in the
nancial statements in
relation to the Company’s
ability to continue as going
concern with reference
to the requirements of
the prevailing accounting
standards.
with the nancial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
When we read the Annual report, if we conclude that there is a
material misstatement therein, we are required to communicate
the matter to those charged with governance.
Responsibilities of Management and Those Charged with
Governance for the Financial Statements
Management is responsible for the preparation of nancial
statements that give a true and fair view in accordance with Sri
LankaAccountingStandards,andforsuchinternalcontrolas
management determines is necessary to enable the preparation
ofnancialstatementsthatarefreefrommaterialmisstatement,
whether due to fraud or error.
Inpreparingthenancialstatements,managementisresponsible
for assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing
theCompany'snancialreportingprocess.
Auditor's Responsibilities for the Audit of the Financial
Statements
Ourobjectivesaretoobtainreasonableassuranceaboutwhether
the nancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit
conducted in accordance with SLAuSs will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influencetheeconomicdecisionsofuserstakenonthebasisof
thesenancialstatements.
As part of an audit in accordance with SLAuSs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identifyand assess therisksof materialmisstatement
ofthenancialstatements,whetherduetofraudorerror,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufcient and
appropriatetoprovideabasisfor ouropinion.Therisk
of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
Independent Auditor’s Report (Contd.)
C. P. Jayatilake FCA
Ms. S. Joseph FCA
S. T. D. L. Perera
Ms. B. K. D. T. N.
Ms. C.T.K.N. Perera ACA
Principals - S.R.I. Perera FCMA(UK), LLB. Attorney-at-Law, H.S. Goonewardene ACA,
Ms. F. R. Ziyad FCMA (UK), FTII
T.J.S. Rajakarier FCA
Ms. S.M.B. Jayasekara FCA
G.A.U. Karunaratne FCA
R.H. Rajan FCA
A.M.R.P. Alahakoon ACA
W. J. C. Perera FCA
W. K. D. C. Abeyrathne FCA
R. M. D. B. Rajapakse FCA
M. N. M. Shameel FCA
Ms. P. M. K. Sumanasekera FCA
KPMG
(Chatered Accounts)
32A, Sir Mohamed Macan Markar Mawatha,
P.O. Box 186,
Colombo 00300, Sri Lanka.
Tel : +94 - 11 542 6426
Fax : +94 - 11 244 5872
+94 - 11 244 6058
Internet : www.kpmg.com/lk
KPMG, a Sri Lankan partnership and a member firm of the
KPMG global organization of independent member firms
affiliated with KPGM International Limited, a private
English company limited by guarantee.
From the matters communicated with those charged with
governance, we determine those matters that were of most
signicanceintheauditofthenancialstatementsofthecurrent
period and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interestbenetsofsuchcommunication.
Report on Other Legal and Regulatory Requirements
As required by section 163 (2) of the Companies Act No. 07 of
2007, we have obtained all the information and explanations
that were required for the audit and, as far as appears from
ourexamination,properaccountingrecordshavebeenkeptbythe
Company.
However,itshouldbenotedthattheCompany'snetassetsare
less than half of the stated capital and therefore faces a serious
loss of capital situation in terms of Section 220 of the Companies
Act No. 07 of 2007.
CA Sri Lanka membership number of the engagement partner
responsible for signing this independent auditor's report is 2618.
CHARTERED ACCOUNTANTS
Colombo,SriLanka.
08 April 2023
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtainanunderstandingofinternalcontrolrelevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the Company's internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management's use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
maycastsignicantdoubton theCompany'sabilityto
continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures
in the nancial statements or, if such disclosures are
inadequate,tomodifyouropinion.Ourconclusionsare
based on the audit evidence obtained up to the date of
ourauditor'sreport.However,futureeventsorconditions
may cause the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content
of the nancial statements, including the disclosures,
and whether the nancial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufcient appropriate audit evidence regarding
the nancial information of the entities or business
activities within the Company to express an opinion
onthenancialstatements.Weareresponsibleforthe
direction, supervision and performance of the audit. We
remain solely responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and timing
oftheauditandsignicantauditndings,includinganysignicant
decienciesininternalcontrolthatweidentifyduringouraudit.
We also provide those charged with governance with a statement
that we have complied with ethical requirements in accordance
with the Code of Ethics regarding independence, and to
communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
Independent Auditor’s Report (Contd.)
C. P. Jayatilake FCA
Ms. S. Joseph FCA
S. T. D. L. Perera
Ms. B. K. D. T. N.
Ms. C.T.K.N. Perera ACA
Principals - S.R.I. Perera FCMA(UK), LLB. Attorney-at-Law, H.S. Goonewardene ACA,
Ms. F. R. Ziyad FCMA (UK), FTII
T.J.S. Rajakarier FCA
Ms. S.M.B. Jayasekara FCA
G.A.U. Karunaratne FCA
R.H. Rajan FCA
A.M.R.P. Alahakoon ACA
W. J. C. Perera FCA
W. K. D. C. Abeyrathne FCA
R. M. D. B. Rajapakse FCA
M. N. M. Shameel FCA
Ms. P. M. K. Sumanasekera FCA
KPMG
(Chatered Accounts)
32A, Sir Mohamed Macan Markar Mawatha,
P.O. Box 186,
Colombo 00300, Sri Lanka.
Tel : +94 - 11 542 6426
Fax : +94 - 11 244 5872
+94 - 11 244 6058
Internet : www.kpmg.com/lk
KPMG, a Sri Lankan partnership and a member firm of the
KPMG global organization of independent member firms
affiliated with KPGM International Limited, a private
English company limited by guarantee.
TAL LANKA HOTELS PLC | Annual Report 2022/23
27
FOR THE YEAR ENDED 31ST MARCH,
Note 2023
Rs.
2022
Rs.
Revenue 5 2,361,374,456 1,147,420,950
Direct cost (2,179,389,688) (1,409,814,285)
Gross prot /(loss) 181,984,768
(262,393,335)
Other income 6 894,425
311,784
Marketing expenses (66,197,946) (44,306,213)
Administrative expenses (581,732,908) (257,421,828)
Loss from operations (465,051,661) (563,809,592)
Finance Income 7.1
21,604,632 22,381,841
Finance expenses 7.2 (572,240,906) (1,114,927,245)
Net Finance Expense 7 (550,636,274) (1,092,545,404)
Loss before tax 8 (1,015,687,935) (1,656,354,996)
Income tax expense 9
(275,506,261) (58,552,349)
Loss for the year (1,291,194,196) (1,714,907,345)
Other comprehensive income / (expense), net of income tax
Items that will not be reclassied subsequently to prot or loss :
Revaluation gain on building, net of tax 9.3
-
555,784,881
 9.3 (8,440,435) 13,670,803
Equity investments at FVOCI - net change in fair value, net of tax 9.3 (977,843) 2,586,519
Deferred tax on revaluation surplus due to change of tax rate 9.6.2 (320,654,249) -
Deferred tax on fair value Reserve due to change of tax rate 9.6.2 (921,342)
-
Other comprehensive income for the year, net of tax (330,993,869) 572,042,203
Total comprehensive expense for the year (1,622,188,065) (1,142,865,142)
Loss per share 10
(9.25) (12.28)
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
The Accounting Policies and Notes on pages 32 to 75 form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
TAL LANKA HOTELS PLC | Annual Report 2022/23
28
AS AT 31ST MARCH,
Note 2023
Rs.
2022
Rs.
ASSETS
Non - current assets
Property, plant and equipment
11 3,638,333,150 4,002,573,608
Intangible assets 12 129,567 872,998
Right of use assets
13 751,884,603 765,075,555
EquitysecuritiesdesignatedasatFVOCI
14 17,297,591 18,694,510
Investmentsinxeddeposits
19 - 808,128,096
4,407,644,911 5,595,344,767
Current assets
Inventories 15 93,317,270 63,959,589
Trade and other receivables 16 219,079,479 137,693,801
Amounts receivable from related parties 17 1,634,263 42,071
Deposits, prepayments and advances 18 92,177,599 80,688,993
Current tax asset
9.7 7,410,154 6,283,909
Investments in Fixed Deposits
19 85,245,161 -
Cash and cash equivalents 20 222,789,176 192,195,910
721,653,102 480,864,273
Total assets 5,129,298,013 6,076,209,040
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 21 1,396,374,941 1,396,374,941
Revaluation reserve 22 1,402,862,337
1,894,365,962
Fair value reserve 23 2,246,850 4,146,035
Accumulated losses (4,289,862,493) (3,161,077,238)
Total equity (1,488,378,365) 133,809,700
STATEMENT OF FINANCIAL POSITION
TAL LANKA HOTELS PLC | Annual Report 2022/23
29
Non-current liabilities
Loansandborrowings 24 4,068,842,876 3,676,884,499
Retirementbenetobligation 25 64,705,502 38,077,695
Deferred tax liability 9.6 1,159,565,288 566,519,842
5,293,113,666 4,281,482,036
Current liabilities
Trade and other payables 26 771,548,431 504,478,427
Amounts payable to related parties 27 188,463,021 108,129,824
Loansandborrowings 24 364,551,260 947,080,786
BankOverdraft 20 - 101,228,267
1,324,562,712 1,660,917,304
Total liabilities 6,617,676,378 5,942,399,340
Total equity and liabilities 5,129,298,013 6,076,209,040
I
certifythatthesenancialstatementshavebeenpreparedincompliancewiththerequirementsoftheCompaniesActNo.7of2007.
ParasPuri-AreaFinancialController,SriLankaandMaldives
Director of Finance, Taj Samudra, Colombo
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
ApprovedandsignedforandonbehalfoftheBoardofDirectorsofTALLankaHotelsPLC.
V.Govindasamy
Director
08
April 2023
Colombo
TilakDeZoysa
Director
STATEMENT OF FINANCIAL POSITION (Contd.)
AS AT 31ST MARCH,
Note 2023
Rs.
2022
Rs.
The Accounting Policies and Notes on pages 32 to 75 form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
TAL LANKA HOTELS PLC | Annual Report 2022/23
30
AS AT 31ST MARCH,
Stated
capital
Revaluation
reserve
Fair value
reserve
Accumulated
losses Total
Balance as at 01
st
April 2021 1,396,374,941 1,472,378,141 1,559,516 (1,593,637,756) 1,276,674,842
Total comprehensive income / (expenses)
for the year
Lossfortheyear
- - - (1,714,907,345) (1,714,907,345)
Other comprehensive income / (expense)
Revaluation gain on building, net of tax
- 555,784,881 - - 555,784,881
Re-measurementgain/(loss)ondenedbenet
plans, net of tax
- - - 13,670,803 13,670,803
EquityinvestmentsatFVOCI-netchangeinfair
value, net of tax
- - 2,586,519 - 2,586,519
Total Other comprehensive income / (expenses),
net of tax
- 555,784,881 2,586,519 13,670,803 572,042,203
Total comprehensive income / (expenses)
for the year
- 555,784,881 2,586,519 (1,701,236,542) (1,142,865,142)
Transfer of depreciation, net of deferred tax - (133,797,060) - 133,797,060 -
Balance as at 31
st
March 2022 1,396,374,941 1,894,365,962 4,146,035 (3,161,077,238) 133,809,700
Balance as at 01
ST
April 2022 1,396,374,941 1,894,365,962 4,146,035 (3,161,077,238) 133,809,700
Total comprehensive income / (expenses)
for the year
Lossfortheyear
- - - (1,291,194,196) (1,291,194,196)
Other comprehensive income / (expense)
Re-measurementgain/(loss)ondenedbenet
plans, net of tax
- - - (8,440,435) (8,440,435)
EquityinvestmentsatFVOCI-netchangeinfair
value, net of tax
- - (977,843) - (977,843)
Deferred tax on revaluation surplus due to change
of tax rate
- (320,654,249) - - (320,654,249)
Deferred tax on fair value Reserve due to change
of tax rate
- - (921,342) - (921,342)
Total Other comprehensive income /
(expenses), net of tax
- (320,654,249) (1,899,185) (8,440,435) (330,993,869)
Total comprehensive income / (expenses)
for the year
- (320,654,249) (1,899,185) (1,299,634,631) (1,622,188,065)
Transfer of depreciation, net of deferred tax - (170,849,376) - 170,849,376 -
Balance as at 31
st
March 2023 1,396,374,941 1,402,862,337 2,246,850 (4,289,862,493) (1,488,378,365)
STATEMENT OF CHANGES IN EQUITY
The Accounting Policies and Notes on pages 32 to 75 form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
TAL LANKA HOTELS PLC | Annual Report 2022/23
31
AS AT 31ST MARCH,
Note 2023
Rs.
2022
Rs.

Loss before tax (1,015,687,935) (1,656,354,996)
Adjustments for
Gain on disposal of property, plant and equipment 6 (660,870) -
Depreciation on property, plant and equipment
11 393,057,842 377,224,480
Amortization of intangible asset
12 743,431 2,754,363
Amortization of Right of use assets
13 13,190,952 13,190,952
Provisionfordenedbenetplans 8.2.1 14,570,042 7,897,156
ImpairmentProvisionforTradeandOtherReceivables 16.1 2,462,819 5,002,320
Impairment Provision for Inventories 15.1 1,496,244 889,693
Interest income 7.1 (21,604,632) (22,381,841)
Interest expense 7.2 338,406,111 139,969,766
Economic service charge write-off
8 - 9,514,429
Unrealised exchange loss 169,960,015 1,003,266,954
Operating loss before working capital changes (104,065,981) (119,026,724)
(Increase) / decrease in inventories (29,454,297) (9,640,346)
(Increase) / decrease in trade and other receivables (83,848,497) (107,415,970)
(Increase) / decrease in amounts receivable from related companies (1,592,192) 1,042,273
(Increase) / decrease in deposits, prepayments and advances (11,488,606) 4,833,410
Increase / (decrease) in current tax asset (1,126,245) -
Increase / (decrease) in trade and other payables 267,070,004 105,948,743
Increase / (decrease) in amounts payable to related companies 80,333,197 (11,257,181)
Cash generated from/(Used in) operations 115,827,383 (135,515,795)
Investment in plan asset 25.3 - (35,000,000)
RetirementbenetspaidbytheCompany - (592,373)
Interest paid (543,253,575) (10,640,090)
Income tax paid - (5,481,210)
Net cash Used in operating activities (427,426,192) (187,229,468)

Net proceeds from disposal of property, plant and equipment 660,870 -
Purchase of property, plant and equipment 11 (30,217,012) (13,318,372)
Interest received 50,415,067 383,406
(Investment) / Withdrawal in Fixed deposits 19 871,560,000 (387,640,000)
Net cash generated from/ (used in) investing activities 892,418,925 (400,574,966)

Borrowings obtained from Related Party 24.1 127,644,250 387,640,000
BorrowingsobtainedfromBank 24.1 334,044,050 379,000,000
Loanrepaymentsduringtheyear 24.1 (794,859,500) -
Payment of lease liability - (2,000,000)
 (333,171,200) 764,640,000
Net (decrease)/increase in cash and cash equivalents 131,821,533 176,835,566
Cash and cash equivalents at the beginning of the year 90,967,643 (85,867,923)
Cash and cash equivalents at the end of the year 20 222,789,176 90,967,643
Cash & cash equivalents at the end of the year
Cash and cash equivalents 20 222,789,176 90,967,643
222,789,176 90,967,643
The Accounting Policies and Notes on pages 32 to 75 form an integral part of these Financial Statements.
Figures in brackets indicate deductions.
STATEMENT OF CASH FLOWS
TAL LANKA HOTELS PLC | Annual Report 2022/23
32
ACCOUNTING POLICIES
TAL LANKA HOTELS PLC | Annual Report 2022/23
33
1. CORPORATE INFORMATION
1.1. Reporting entity
TALLankaHotelsPLC(formerlyknownasTajLankaHotels
PLC)isalimitedliabilitycompanydomicileandincorporated
in Sri Lanka in 1980 and listed on the Colombo Stock
Exchangein1982.Theregisteredofceandprincipalplace
of business is situated at No. 25, Galle Face Centre Road,
Colombo 03.
1.2. Principal activities and nature of operations
TAL Lanka Hotels PLCis engagedinthehospitalitytrade.
The Company owns the Taj Samudra Hotel located in
Colombo.
1.3. Parent enterprise
The Company's parent company is TALHotels & Resorts
Limited,HongKong(formerlyknownasTajAsiaLimited).
       

The Board of directors are responsible for preparation and
presentationofthenancialstatementsoftheCompanyas
per the provision of Companies Act No. 07 of 2007 and Sri
Lanka Accounting Standards. The directors' responsibility
over nancial statements for the year ended 31st March
2023 is set out in detail in the statement of directors'
responsibility.
ThenancialstatementsoftheCompanyoftheyearended
31st March 2023 were authorized for issue in accordance
with resolution of the Board of Directors on 8th April 2023.
2. BASIS OF PREPARATION
2.1. Statement of compliance
The nancial statements of the Company comprise the
statement of nancial position, the statement of prot
or loss and other comprehensive income, statement of
changes in equity and statement of cash flow together with
thenotestothenancialstatements.
Thenancialstatementshavebeenpreparedinaccordance
withSriLankaAccountingStandardsprexedbothSLFRS
(correspondingtoIFRS)andLKAS (correspondingtolAS),
promulgated by The Institute of Chartered Accountants of
SriLanka(CASriLanka)andcomplieswiththerequirements
of the Companies Act No. 07 of2007.
2.2. Basis of preparation
Allassets and liabilities areclassiedas current andnon-
current as per company's normal operating cycle of 12
months which is based on the nature of business of the
Company. Current Assets do not include elements which
are not expected to be realized within 1 year and Current
Liabilitiesdonotincludeitemswhicharedueafter1year,
theperiodof1yearbeingreckonedfromthereportingdate.
ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
Thenancialstatementshavebeenpreparedonahistorical
cost basis, except for the following line items in the
statementofnancialposition:
2.3. Functional and Presentation Currency
Items included in the Financial Statements of the Company
are measured using the currency of the primary economic
environment in which the Company operates (the functional
currency). Accordingly, these Financial Statements are
presented in Sri Lankan Rupees (LKR), the Company's
functional and presentation currency.
There was no change in the Company's presentation and
functional currency during the year under review.
2.4. Materiality and aggregation
Each material class of similar items is presented separately
in the Financial Statements. Items of dissimilar nature or
function are presented separately unless they are immaterial
aspermittedbytheSriLankaAccountingStandard-LKAS1
on 'Presentation of Financial Statements' and amendments
totheLKAS1on'DisclosureInitiative'.
Notes to the Financial Statements are presented in a
systematic manner which ensures the understandability
and comparability of Financial Statements of the Company.
Understandability of the Financial Statements is not
compromised by obscuring material information with
immaterial information or by aggregating material items
that have different natures or functions.
2.5. Comparative Information
Comparative information including quantitative, narrative,
and descriptive information is disclosed in respect of the
previous period in the Financial Statements to enhance the
understanding of the current period's Financial Statements
and to enhance the inter period comparability. The
presentationandclassicationoftheFinancialStatements
of the previous year are amended, where relevant for better
presentation and to be comparable with those of the current
year.
Category Items Basis of measurement Note
Assets
Financial
instrument
measured
at fair value
through other
comprehensive
income
At fair value 14
Building
Measured at" cost at the
time of acquisition . and
subsequently at revalued
amounts which are the
fair values at the date of
revaluation
11
Liabilities
Employee
benets liabilities
Actuarially valued and
recognised at present
value of the dened benet
obligation
25
TAL LANKA HOTELS PLC | Annual Report 2022/23
34
2.6. Use of estimates and judgments
ThepreparationofthenancialstatementsinconformitywithLKAS/SLFRSrequiresmanagementtomakejudgments,estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
Informationaboutassumptionsandestimationuncertaintiesthathaveasignicantriskofresultinginamaterialadjustmentin
amounts recognized in the Financial Statements included in following notes.
2.6.1. Fair value of buildings
The Company measures buildings at revalued amounts with changes in fair value being recognised in Equity through Other
ComprehensiveIncome(OCI).Valuationsareperformedeveryveyearstoensurethatthefairvalueofarevaluedassetdoesnot
differ materially from it carrying amount. The Company engages independent professional valuer Mr. P. B Kalugalagedara,
CharteredValuationSurveyortoassessfairvalueoflandandbuildingsintermsofSriLankaAccountingStandardon"FairValue
Measurement"(SLFRS13).Basedonthevaluationtechniquesandinputsused,buildingwasclassiedatlevel3inthefairvalue
hierarchy.
Thevaluationtechniques,signicantunobservableinputs,keyassumptionsusedtodeterminethefairvalueofthebuilding,and
sensitivity analysis are provided in Note 11.10 and 11.11.
2.6.2. Useful lifetime of the property, plant, and equipment
The Company reviews the residual values, useful lives, and methods of depreciation of property, plant, and equipment at each
reportingdate.JudgementoftheManagementisexercisedintheestimationofthesevalues,rates,methodsandhencetheyare
subject to uncertainty. Refer Note 3.4.4 for more details.
 
Thecostofdenedbenetobligationisdeterminedusingactuarialvaluations.Theactuarialvaluationinvolvesmakingassumptions
about discount rates, future salary increases and mortality rates, etc. Due to the complexity of the valuation, the underlying assumptions
and its long-term nature,a denedbenet obligation is highly sensitive to changes in theseassumptions. All assumptions are
reviewedateach reporting date.ReferNote25.6 fortheassumptions usedtodeterminedenedbenetobligations.Sensitivity
analysistokeyassumptionsisdisclosedinNote25.9.
2.6.4. Provisions for liabilities and contingencies
Managementhasmadejudgmentsastothelikelihoodofanyclaimsucceedinginmakingprovisions.Thetimeofconcludinglegal
claimsisuncertain, as is the amount of possible outflow of economicbenets.Timing and cost ultimately depend on the due
process in respective legal jurisdictions. Refer Note 32.
2.7. Measurement of fair values
AnumberoftheCompany'saccountingpoliciesanddisclosuresrequirethemeasurementoffairvalues,forbothnancialandnon-
nancialassetsandliabilities.
TheCompany regularly reviewssignicantunobservableinputsand valuation adjustments. If thirdparty information is used to
measure fair values, Company assesses the evidence obtained from the third parties to support the conclusion that such valuations
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
Critical accounting assumptions and estimation uncertainties Note
Fair value of buildings 2.6.1
Useful lifetime of the property, plant, and equipment 2.6.2
Impairmentonnon-nancialassets 3.2.5.2
Measurementofdenedbenetobligation:keyactuarialassumptions 2.6.3
Provisions for liabilities, commitments, and contingencies 2.6.4
Impairmentmeasurementofnancialassets:determinationofinputsintotheECLmeasurementmodel,
includingkeyassumptionsandincorporationofforward-lookinginformation
3.2.5.1
Income tax expense and deferred tax liability 9
Going concern basis
2.8
TAL LANKA HOTELS PLC | Annual Report 2022/23
35
2.7. Measurement of fair values (Contd)
meettherequirementsofSLFRS,includingthelevelinthe
fair value hierarchy in which such valuations should be
classied.Whenmeasuringthefairvalueofanassetora
liability,theCompanyusesobservablemarketdataasfaras
possible. Fair values are categorized into different levels in a
fair value hierarchy based on the inputs used in the valuation
techniques as follows.
Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level2:InputsotherthanquotedpricesincludedinLevel1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level3:Inputsfortheassetorliabilitythatarenotbasedon
observablemarketdata.(Unobservableinputs).
If the inputs used to measure the fair value of an asset or
a liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorized in its entirety
in the same level of the fair value hierarchy as the lowest
levelinputthatissignicanttotheentiremeasurement.
The Company recognises transfers between levels of the
fair value hierarchy at the end of the reporting period during
which the change has occurred.
2.8. Going Concern
TheCompanyhasincurredalossofLKR1,291,194,196/-
during the period ended 31st March 2023 (31st March 2022:
LKR 1,714,907,345/-) and as of that date, accumulated
losses amounted to LKR 4,289,862,493/- (31st March
2022:LKR3,161,077,238/-).Further,theCompany'scurrent
liabilitiesexceededitscurrentassetsbyLKR602,909,610/-
(31stMarch2022:LKR1,180,053,031/-)asatthereporting
date. The current liabilities of the Company include related
partyloansandborrowingsamountingtoLKR226,192,720/-
which are due within 12 months from 31st March 2023.
Notwithstanding this, the Financial Statements has been
prepared on the going concern basis due to reliance on
a letter of support, dated 1st April 2023, provided by the
Directors of TAL Hotels & Resorts Limited, the Parent
Company. Through this letter of support the Directors of
TALHotels&ResortsLimited;
- Acknowledges that there are no current plans for the
payables to be called for a minimum period of 12 months
from the date of signing the Company's 31st March 2023
nancial statements, however, should they be called
within the 12 months period referred to above, payments
will only be required to the extent that they do not impact
theentity'sabilitytomeetitsnancialobligationsasand
when they fall due and payable.
- Also ensure that it can pay its debts as and when they
falldueandpayable.Thisundertakingisprovidedfora
minimum of 12 months period from the date of signing
the Financial Statements for the period ended 31st
March 2023.
Apart from reliance on parent support, Management
in assessing the appropriateness of the use of going
concern basis of accounting in the preparation of
nancial statements has conducted a comprehensive
review of the Company's affairs including, but not limited
to:
- The cash flow forecast of the Company for the period up
to next 12 months.
- The Company's ability of settling the statutory payables
and other liabilities when they fall due and payable.
- Revenueandprotability forecastsforthe Company
for not only the next nancial year, but beyond 31st
March 2024.
- Impact of rapid change in macroeconomic factors have
been considered as in note 29.
- The TAL Hotels and Resorts Limited the Parent
Companyhasprovidednancialsupportthroughaloan
facility amounting to USD 5 Mn of which USD 2.35 Mn is
available for future utilization.
Further, based on the Company's assessment of the
sources of funding available to the Company and strategies
to improve performance and the nancial position
management believeit will be able to generate prots in
future. Moreover, the Board of Directors have no plans
to liquidate the Company or cease operations in the near
future.
In view of the above, the Management continue to have a
reasonable expectation that the Company has adequate
resources to continue in operations for at least the next 12
months that the going concern basis of accounting remains
appropriate.
2.9. Offsetting
Financialassetsandnancialliabilitiesareoffset,andthe
net amount reported in the Statement of Financial Position,
only when there is a legally enforceable 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. Income and expenses are not offset in the
Income Statement, unless required or permitted by an
Accounting Standard or Interpretation (issued by the
International Financial Reporting Interpretations Committee
andStandardInterpretationCommittee)andasspecically
disclose in the accounting policies of the Company.
2.10 Rounding
The amounts in the Financial Statements have been
rounded-off to the nearest rupees, except where otherwise
indicated as permitted by the Sri Lanka Accounting
Standard-LKAS1on'PresentationofFinancialStatements'.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
36
3. SIGNIFICANT ACCOUNTING POLICIES
The Company have consistently applied the accounting
policies to all periods presented in these nancial
statements.
3.1. Foreign currency
3.1.1. Foreign currency transactions
In preparing the Financial Statements, transactions in
currencies other than the entity's functional currency
(foreign currency) are recorded in the functional
currencies (i.e. Sri Lanka Rupees) using the exchange
rates prevailing at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies are translated to Sri Lanka Rupees at the
foreign exchange rate prevailing as at the reporting date.
Non-monetary assets and liabilities which are stated
at historical cost denominated in foreign currencies
are translated to Sri Lanka Rupees at the exchange
rate prevailing at the dates of the transactions. Non-
monetaryassets&liabilitiesthatarestatedatfairvalue
denominated in foreign currencies are translated to Sri
Lanka Rupees at the exchange rate prevailing at the
dates that the values were determined.
Exchange differences arising on the settlement of
monetary items, and on the translation of monetary
items,areincludedinprotorlossfortheperiod.
Exchange differences arising on the translation of
non-monetary items carried at fair value are included
inprotorlossfortheperiodexceptforthedifferences
which are recognized in other comprehensive income.
3.2. Financial instruments
3.2.1. Recognition and initial measurement
Trade receivable and debt securities issues are initially
recognized when they are originated. All other nancial
assets and nancial liabilities are initially recognized
when the Company become a party to the contractual
provisions of the instrument.
Anancial asset(unlessitis a tradereceivablewithout
a signicant nancing component) or nancial liability
is initially measured at fair value plus, for an item not at
FVTPL, transaction costs that are directly attributable
to its acquisition or issue. A trade receivable without a
signicant nancing component is initially measuredat
the transaction price.
Financial Assets

On initial recognition, a nancial asset is classied as
measured at: amortized cost; FVOCI - debt investment;
FVOCI-equityinvestment;orFVTPL.
Financial assets are not reclassied subsequent to
their initial recognition unless the Company change its
businessmodelformanagingnancialassets,inwhich
caseallaffectednancialassetsarereclassiedonthe
rstdayoftherstreportingperiodfollowingthechange
in the business model.
Anancialassetismeasuredatamortisedcostifitmeets
both ofthe following conditions and is not designated as at
FVTPL.
- It is held within a business model whose objective is to
hold assets to collect contractual cash flows; and
- Itscontractualtermsgiveriseonspecieddatestocash
flows that are solely payments of principal and interest
on the principal amount outstanding.
TheCompany'snancialassetsclassiedunderamortised
costincludestradeandotherreceivable,investmentinxed
deposits and cash and cash equivalents.
AdebtinvestmentismeasuredatFVOCIifitmeetsbothof
thefollowingconditionsanditnotdesignatedasatFVTPL.
- It is held within a business model whose objective is
achieved by both collecting contractual cash flows and
sellingnancialassets;and
- Itscontractualtermsgiveriseonspecieddatestocash
flows that are solely payments of principal and interest
on the principal amount outstanding.
Oninitialrecognitionofanequityinvestmentthatisnotheld
for trading, the Company may irrevocably elect to present
subsequent changes in the investment's fair value in OCI.
This election is made on an investment-by-investment
basis.
Allnancialassetsnotclassiedasmeasuredatamortised
costorFVOCIasdescribedabovearemeasuredatFVTPL.
This includes all derivative nancial assets. On initial
recognition, the Company may irrevocably designate a
nancial asset that otherwise meets the requirements to
bemeasuredatamortisedcostoratFVOCIasatFVTPLif
doingsoeliminatesorsignicantlyreducesanaccounting
mismatch that would otherwise arise.
Financial assets - Business model assessment
The Company make an assessment of the objective of
the business model in which a nancial asset is held at
a portfolio level because this best reflects the way the
business is managed, and information is provided to
management. The information considered includes:
The stated policies and objectives for the portfolio and
the operation of those policies in practice. These include
whether management's strategy focuses on earning
contractual interest income, maintaining a particular
interestrateprole,matchingthedurationofthenancial
assets to the duration of any related liabilities or expected
cash outflows or realizing cash flows through the sale of the
assets;
- Howtheperformanceofthe portfolioisevaluatedand
reported to the Company's management;
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
37
Financial assets - Business model assessment (Contd.)
- Therisksthataffecttheperformanceofthebusinessmodel(andthenancialassetsheldwithinthatbusinessmodel)andhow
thoserisksaremanaged;
- Howmanagersofthebusinessarecompensated-e.g.whethercompensationisbasedonthefairvalueoftheassetsmanagedor
the contractual cash flows collected; and
- Thefrequency,volumeandtimingofsalesofnancialassetsinpriorperiods,thereasonsforsuchsalesandexpectationabout
future sales activity.
Transfersofnancialassetstothirdpartiesintransactionsthatdonotqualifyforderecognitionarenotconsideredsalesforthis
purpose, consistent with the Company's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at
FVTPL.

Forthepurposeofthis assessment, 'principal'is dened asthefair valueofthenancial asset oninitialrecognition.'Interest'is
denedasconsiderationforthetimevalueformoneyandforthecreditriskassociatedwiththeprincipalamountoutstandingduring
aparticularperiodoftimeandforotherbasiclendingrisksandcosts.(e.g.liquidityriskandadministrativecosts),aswellasaprot
margin,
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company consider the contractual
termsoftheinstrument.Thisincludesassessingwhetherthenancialassetcontainsacontractualcashflowsuchthatitwouldnot
meetthiscondition.Inmarkingthisassessment,theCompanyconsider:
- Contingent events that would change the amount or timing of cash flows;
- Terms that may adjust the contractual coupon rate, including variable-rate features;
- Prepayment and extension features; and
-TermsthatlimittheCompany'sclaimtocashflowsfromspeciedassets(e.g.non-recoursefeatures).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially
represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional
compensationforearlyterminationofthecontract.Additionally,foranancialassetacquiredatadiscountorpremiumtoitscontractual
amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus
accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated
asconsistentwiththiscriterionifthefairvalueoftheprepaymentfeatureisinsignicantatinitialrecognition.
Financial assets- subsequent measurement and gains and losses:
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
Financial assets
at FVTPL
These assets are subsequently measured at fair value. Net gains and losses,

Financial assets
at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The amortised
cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are

Debt
investments
at FVOCI
These assets are subsequently measured at fair value. Interest income calculated

or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in

Equity
investments
at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized



FinancialliabilitiesareclassiedasmeasuredatamortizedcostorFVTPL.AnancialliabilityisclassiedasatFVTPLifitisclassied
as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured
atfairvalueandnetgainsandlosses,includinganyinterestexpense,arerecognizedinprotorloss.Othernancialliabilitiesare
subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and
lossesarerecognizedinprotorloss.Anygainorlossonderecognitionisalsorecognizedinprotorloss.
TAL LANKA HOTELS PLC | Annual Report 2022/23
38
3.2.3. Derecognition
3.2.3.1. Financial asset
The Company derecognize a nancial asset when the
contractual rights to the cash flows from the nancial
asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which
substantiallyalloftherisksandrewardsofownershipof
thenancialassetaretransferredinwhichtheCompany
neithertransfernorretainsubstantiallyalloftherisksand
rewards of ownership and it does not retain control of the
nancialasset.
The Company enter into transactions whereby they
transfer assets recognized in its statement of nancial
positionbutretaineitherallorsubstantiallyalloftherisks
and rewards of the transferred assets. In these cases, the
transferred assets are not derecognized.
3.2.3.2. Financial liabilities
The Company derecognize a nancial liability when its
contractual obligation are discharged or cancelled, or
expire. The Company derecognize a nancial liability
when its terms are modied andthe cash flows of the
modiedliabilityaresubstantiallydifferent,inwhichcase
a new nancial liability based on the modied terms is
recognized at fair value.
On derecognition of a nancial liability, the difference
between the carrying amount extinguished and the
consideration paid (including any non-cash assets
transferredorliabilitiesassumed)isrecognizedinprot
or loss.
3.2.4. Offsetting
Financial assets and nancial liabilities are offset, and
the net amount presented in the statement of nancial
position when, and only when, the Company currently
have a legally enforceable right to set off the amounts
and it intends either to settle them on a net basis or to
realize the asset and settle the liability simultaneously.
3.2.5. Impairment
 
Financial instruments and contract assets
The Company recognises allowances for expected credit
losses(ECLs)onnancialassetsmeasuredatamortized
cost. Loss allowances for trade receivables is always
measuredatanamountequaltolifetimeECLs.
When determining whether thecreditrisk of anancial
assethasincreasedsignicantlysinceinitialrecognition
and when estimating ECLs, the Company considers
reasonable and supportable information that is relevant
and available without undue cost or effort. This includes
both quantitative and qualitative information and
analysis, based on the Company's historical experience
and informed credit assessment and including forward-
lookinginformation.
TheCompanyassumesthatthecreditriskonanancial
assethasincreasedsignicantlyifitismorethan90days
past due.
TheCompanyconsidersanancialassettobeindefault
when:
- the borrower is unlikely to pay its credit obligations to
the Company in full, without recourse by the Company to
actions such as realising security (if any is held); or
- thenancialassetismorethan90dayspastdue.
Lifetime ECLs are the ECLs that result from all possible
defaulteventsovertheexpectedlifeofanancialinstrument.
ThemaximumperiodconsideredwhenestimatingECLsis
the maximum contractual period over which the Company
isexposedtocreditrisk.

At each reporting date, the Company assesses whether
nancial assets carried at amortised cost and debt
securities at FVOCI are credit impaired. A nancial asset
is 'credit-impaired' when one or more events that have a
detrimental impact on the estimated future cash flows of
thenancialassethaveoccurred.

the following observable data:
- Signicant nancial difculty of the borrower or
issuer;
- A breach of contract such as a default or being more
than 180 days past due;
- The restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise;
- Itisprobablethattheborrowerwillenterbankruptcy
orothernancialreorganisation;or
Thedisappearanceofanactivemarketorasecurity
becauseofnancialdifculties.
Presentation of allowance for ECL in the statement of

Loss allowances for nancial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.

ThecarryingamountoftheCompany'snon-nancialassets
other than inventories and deferred tax assets are reviewed
at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, or
when annual impairment testing for an asset is required,
then the asset's recoverable amount is estimated. Goodwill
is tested annually for impairment.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
39
For impairment testing, assets are grouped together into
the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the
cash inflows of other assets or CGUs. An impairment loss
is recognized if the carrying amount of an asset or cash
generating unit (CGU) exceeds its recoverable amount.
Goodwill arising from a business combination is allocated
to CGUs or groups of CGUs that are expected to benet
from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater
of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount
ratethat reflectscurrentmarket assessments of the time
valueofmoneyandtherisksspecictotheassetorCGU.
An impairment loss is recognized if the carrying amount of
an asset or CGU exceeds its estimated recoverable amount.
Impairment losses are recognized in Prot or Loss.
Impairment losses recognized in respect ofCGUs are
allocated rst to reduce the carrying amount of any
goodwill allocated to the CGU (group of CGUs), and then to
reduce the carrying amounts oft he other assets in the CGU
(group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed.
For other assets, an impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net
of depreciation or amortization, if no impairment loss had
been recognized.
3.3. Stated capital
Ordinary shares
Ordinary shares are classied as equity. Dividends on
ordinary shares are recognised in equity in the period in
which they are approved.
3.4. Property, plant and equipment
3.4.1. Recognition and measurement
Property, Plant, and Equipment are recognized if it is
probablethatfutureeconomicbenetsassociatedwiththe
asset will flow to the Company and the cost can be reliably
measured.
All property, plant and equipment are initially recorded at
cost. Cost includes expenditure that is directly attributable
to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour and
any other costs directly attributable to bringing the assets to
aworkingconditionfortheirintendeduse.
If a signicant part of an item of property, plant and
equipment has different useful lives, then they are accounted
for as separate items (major components) of property, plant
and equipment.
3.4.2 Subsequent Measurement
Subsequent costs are included in the asset's carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benets
associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repairs
andmaintenancearechargedtotheprotorlossduringthe
nancialperiodinwhichthoseareincurred.
Buildings are subsequently shown in the statement of
nancial position at market value, based on valuations
done by external independent valuers, being the fair value
at the date of revaluation, less any subsequent accumulated
depreciation and subsequent accumulated impairment
losses.Revaluationsareperformedwithsufcientregularity
such that the carrying amounts do not differ materially from
those that would be determined using fair value at the end
of reporting date every 5 years.
Increases in the carrying amount arising on revaluation
of property, plant and equipment are credited to other
comprehensive income and accumulated in equity, except
to the extent that it reverses a revaluation decrease for the
sameassetpreviouslyrecognisedinprotorloss,inwhich
casetheincreaseiscreditedtoprotorlosstotheextentof
the decrease previously charged. A decrease in the carrying
amountarisingontherevaluationischargedtoprotorloss
to the extent that the loss exceeds the balance, if any, held
in the revaluation reserve relating to a previous revaluation
of that asset. Each year the difference between depreciation
based on the revalued carrying amount of the asset and
depreciation based on the asset's original cost is transferred
from revaluation reserve to retained earnings/ accumulated
losses.
All other classes of assets included under property, plant
and equipment are stated at cost less accumulated
depreciation and accumulated impairment losses, if any. An
asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.
3.4.3. Subsequent cost
Subsequent cost is capitalized only if is probable that the
future economic benets associated with the expenditure
will flow to the Company. The costs of day-to-day servicing
ofproperty, plantandequipmentisrecognizedinprotor
loss as incurred.
3.4.4 Depreciation
Depreciationischargedtoprotorlosssoastowriteoff
the cost or valuation of assets, over the estimated useful
lives, using the straight-line method. The estimated useful
lives, residual values and depreciation method are reviewed
at each year end, with the effect of any changes in such
estimates accounted for prospectively.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
40
3.4.4 Depreciation (Contd.)
The estimated useful lives for the current and comparative
yearsofsignicantitemsofproperty,plantandequipment
are as follows;
Depreciation of an asset begins when it is available for
use or, in respect of self-constructed assets, from the
date that the asset is completed and ready for use.
Depreciation of an asset ceases at the earlier of the date
thattheassetisclassiedasheldforsaleandthedate
that the asset is derecognized.
Depreciation methods, useful lives and residual values
are reviewed at each reporting date and adjusted if
appropriate.
3.4.5 De-recognition
An item of property, plant and equipment is
de-recognized upon disposal of or when no future
economicbenetsareexpectedfromitsuseordisposal.
The gains or losses arising on de-recognition (disposal or
retirement) of an item of property, plant and equipment
are determined by comparing the proceeds from disposal
with the carrying amount of the property, plant and
equipment and are recognized net within 'other income'
intheStatementofprotorloss.Whenrevaluedassets
are sold, the amounts included in the revaluation reserve
are transferred to retained earnings.
3.4.6 Capital work-in-progress
Capital work-in-progress represents the accumulated
cost of materials and other costs directly related to the
construction of an asset. Capital work-in- progress is
transferred to the respective asset accounts at the time it
is substantially completed and ready for its intended use.
3.5 Right of Use Assets
3.5.1. Recognition
At inception of a contract, the Company assesses
whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right
tocontrolthe use ofan identied asset for a period of
time in exchange for consideration. To assess whether
a contract conveys the right to control the use of an
identied asset, the Company uses the denition of a
leaseinSLFRS16.
As a lessee
Atcommencementoronmodicationofacontractthat
contains a lease component, the Company allocates the
consideration in the contract to each lease component
on the basis of its relative standalone prices.
However, for the leases of property, the Company has
elected not to separate non-lease components and
account for the lease and non-lease components as a
single lease component.
3.5.2. ROU assets
The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The Company applies the cost model for the subsequent
measurementoftheROUassetandaccordingly,the
right-of use asset is depreciated using the straight-
line method from the commencement date to the
end of the lease term, unless the lease transfers
ownership of the underlying asset to the Company
by the end of the lease term or the cost of the right-of-
use asset reflects that the Company will exercise a
purchase option. In that case the right-of-use asset will
be depreciated over the useful life of the underlying
asset, which is determined on the same basis as those
of property and equipment. In addition, the right-of-
use asset is periodically reduced by impairment losses,
if any, and adjusted for certain remeasurements ofthe
lease liability.
3.5.2.1 Depreciation expenses
Depreciation expenses has been charged to income
statement under other operating and administration
expenses.
3.5.3. Lease Liabilities
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate.
Generally, the Company uses its incremental borrowing
rate as the discount rate.
The Company determines its incremental borrowing rate
byobtaininginterestratesfromvariousexternalnancing
sources and makes certain adjustments to reflect the
terms of the lease and type of the asset leased.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
No ofYears
Landscaping 93 years from 1987
Buildings 3 - 40
Hotel equipment 1 - 10
Plant, machinery and
equipment
1 - 10
 1 - 10

equipment
5 - 10
Motor vehicle 4
TAL LANKA HOTELS PLC | Annual Report 2022/23
41
Lease payments included in the measurement of the
lease liability comprise the following:
- xedpayments,includingin-substancexedpayments;
- variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;
- amounts expected to be payable under a residual value
guarantee; and
- the exercise price under a purchase option that the
Company is reasonably certain to exercise, lease
payments in an optional renewal period if the Company
is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless the
Company is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is
a change in future lease payments arising from a change
in an index or rate, if there is a change in the Company's
estimate of the amount expected to be payable under
a residual value guarantee, if the Company changes
its assessment of whether it will exercise a purchase,
extension, or termination option or if there is a revised in-
substancexedleasepayment.
3.5.3.1 Interest expenses on lease liabilities
Interest expense is calculated by using the effective
interest rate method and is recognised as nance
expenses in the Income Statement.
3.5.4. Presentation of ROU asset and lease liabilities
The Company presents right-of-use assets that do not
meetthedenitionofinvestmentpropertyinseparateline
as 'Right-of-use assets' and There is no lease liability at
the end of the reporting date.
3.5.5. Short term leases and leases of low-value assets
The Company has elected not to recognise right-of-
use assets and lease liabilities for leases of low value
assets and short-term leases. The Company recognises
the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
3.6. Intangible assets
3.6.1. Recognition and measurement
An Intangible Asset is recognised if it is probable that
futureeconomicbenetsthatareattributabletotheasset
will flow to the Company and the cost of the asset can
be measured reliably. Software acquired by the Company
is stated at cost less accumulated amortisation and
accumulated impairment losses.
Expenditure on internally developed software is
recognised as an asset when the Company is able to
demonstrate its intention and ability to complete the
development and use the software in a manner that
will generate future economic benets and can reliably
measure the costs to complete the development. The
capitalised costs of internally developed software include
all costs directly attributable to developing the software
and capitalised borrowing costs and are amortised over
its useful life. Internally developed software is stated at
capitalised cost less accumulated amortisation and
impairment.
3.6.2. Subsequent expenditure
Subsequent expenditure is capitalized only when it
increasesthefutureeconomicbenetsembodiedinthe
specic asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill
andbrands,arerecognizedinprotorlossasincurred.
3.6.3. Amortization
Amortizationisrecognisedinprotorlossonastraight-
line basis over the estimated useful life of the software,
from the date that it is available for use since this most
closely reflects the expected pattern of consumption of
thefutureeconomicbenetsembodiedintheasset.The
estimatedusefullifeofsoftwareisveyears.
The estimated useful lives for the current and comparative
years are as follows;
No of Years
Software licenses 5
Amortization methods, useful lives and residual values
are reviewed at each reporting date and adjusted if
appropriate.
3.6.4. Derecognition
Gains or losses arising from derecognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the
assetsandarerecognizedinprotorlosswhentheasset
is derecognized.
3.7. Inventories
Stock of food and beverages, other consumables and
engineering supplies are carried at the lower of cost
(computed on a Weighted Average basis) or net realisable
value. Net realisable value is the estimated selling price
in the ordinary course of business less the estimated
costs of completion and selling expenses. Cost includes
the cost of fair value of consideration paid including
duties and taxes (other than those refundable), inward
freight, and other expenditure directly attributable to the
purchase. Trade discounts and rebates are deducted in
determining the cost of purchase.
3.8. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and
call deposits with maturities of three months or less from
theacquisitiondatethataresubjecttoaninsignicantrisk
of changes in their fair value and are used by the Company
in the management of its short-term commitments.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
42
 
 
The costs of all short-term employee benets (that are
expected to be settled wholly within 12 months after
the end of the period in which the employees render the
related service) are recognised during the period in which
the employee renders the related service. The accruals
for employeeentitlements to benets such as salaries,
bonuses and annual leave represent the amounts which
the Company has a present obligation to pay as a result
of the employee's services and the obligation can be
measured reliably. The accruals have been calculated at
undiscounted amounts based on current salary levels at
the reporting date.
   
and employees' trust fund
Adenedcontributionplanisapost-employmentbenet
planunderwhichanentitypaysxedcontributionsinto
a separate entity and will have no legal or constructive
obligation to pay further amounts. Obligations for
contributionstodenedcontributionplansarerecognised
asan employeebenetexpensein the protorlossas
in the periods during which services are rendered by
employees.
All employees of the Company are members of the
Employees' Provident Fund and the Employees Trust
Fund, to which the Company contributes 12% and 3%
respectively of such employees' basic or consolidated
wage or salary.

The Company has a Gratuity Cash Accumulation Policy
withLifeInsuranceCorporation(Lanka)Limitedtocover
itsemployee'sgratuityliability.TheDenedBenetPlans
areadministratedbyLIC(Lanka)coveringitsemployees.
When an employee retires or exits from the Company,
LIC(Lanka)Ltdwillpayhis/herGratuitytotheemployee
on the date of payment of gratuity/exit. Gratuity of
the employee is guaranteed for the past service of the
employee subject to the available fund balance with them
as contributed by the Company.
Oneofthesalientfeaturesofthepolicyisthatintheevent
of any unfortunate death of an employee during his/her
employmentwiththecompany,LIC (Lanka)will paythe
applicable gratuity for the pending years of service of the
employee with the Company from its own fund against a
payment of a nominal premium by considering the future
balance period of service of the employee.
The Dened Benet Obligation recognized in the
statement of nancial position represents the present
valueoftheDenedBenetObligationasreducedbythe
fair value of plan assets.
However, under the Payment of Gratuity Act No. 12
of 1983, the liability to an employee arises only on
completionofveyearsofcontinuedservice.Liabilities
are computed on the basis of half a month's salary
for each year of completed service. The Company's
obligations under the said Act is determined based on an
actuarial valuation using the projected unit credit method
carried out by a professional actuary.
Remeasurements of the dened benet liability, which
comprise actuarial gains and losses, are recognised
immediatelyinOCI.TheCompanydeterminestheinterest
expenseonthedenedbenetliabilityfortheperiodby
applyingthe discountrateusedtomeasurethedened
benet obligation at thebeginning of the annual period
to the then dened benet liability, taking into account
any changes in the dened benet liability during the
periodasaresultofbenetpayments.Interestexpense
andother expenses relatedtodened benet plans are
recognisedinprotorloss.
Whenthebenetsofaplanarechangedorwhenaplan
is curtailed, the resulting change in benet that relates
to past service or the gain or loss on curtailment is
recognised immediately in prot or loss. The Company
recognises gains and losses on the settlement of a
denedbenetplanwhenthesettlementoccurs.
 
Termination benets are recognized as an expense
when the Company is demonstrably committed, without
a realistic possibility of withdrawal, to a formal detailed
plan to either terminate employment before the normal
retirementdate, or to provide termination benets as a
result of an offer made to encourage voluntary redundancy.
Termination benets for voluntary redundancies are
recognized as an expense if the Company has made an
offer of voluntary redundancy, it is probable that the offer
will be accepted, and the number of acceptances can be
estimatedreliably.Ifbenetsarepayablemore than 12
months after the reporting date, then they are discounted
to their present value.
3.10 Borrowings
Bank and other borrowings are initially recognised at
the fair value of the consideration received less directly
attributable transaction costs. They are subsequently
measured at amortised cost. Finance charges, including
the transaction costs and any discount or premium
on issue, are recognised in the prot or loss using the
effective interest rate method.
Borrowings are classied as non-current when the
repayment date is more than 12 months from the period-
end date or where they are drawn on a facility with more
than 12 months to expiry.
3.10.1 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset that
normallytakesasubstantialperiodoftimetogetready
for their intended use or sale, are added to the cost of
those assets, until such time the assets are substantially
ready for their intended use or sale. Income earned from
temporarily investing specic borrowings pending their
expenditure on a qualifying asset is deducted from the
borrowing costs eligible to be added to the carrying
amount.Allotherborrowingcostsarerecognizedinprot
or loss in the year in which they are incurred.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
43
3.11 Provisions
Provisions are recognised when the Company has a binding present obligation. This may be either legal because it derives from a
contract, legislation or other operation oflaw, or constructive because the Company created valid expectations on the part of third
parties by accepting certain responsibilities. To record such an obligation, it must be probable that an outflow of resources will be
required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The amount recognized as a
provisionandtheindicatedtimerangeoftheoutflowofeconomicbenetsarethebestestimate(mostprobableoutcome)ofthe
expenditurerequiredtosettlethepresentobligationatthereportingdate,consideringtherisksanduncertaintiessurroundingthe
obligation. Non-current provisions are discounted if the impact is material.
3.12 Contingent liabilities and contingent assets
A contingent liabilityisapossible obligation thatarisesfrompast eventswhose existencewillbeconrmed bytheoccurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognized because it is not probable that an outflow of resources will be required to settle the obligation.
A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be
measuredreliably.TheCompanydoesnotrecognizeacontingentliabilitybutdisclosesitsexistenceinthenancialstatements.
Acontingentassetisapossibleassetthatarisesfrompasteventswhoseexistencewillbeconrmedbytheoccurrenceornon-
occurrence of one or more uncertain future events beyond the control of the Company. The Company does not recognize contingent
assetsbutdisclosesitsexistencewhereinflowsofeconomicbenetsareprobable,butnotvirtuallycertain.Intheacquisitionof
subsidiaries by the Company under business combinations, contingent liabilities assumed are measured initially at their fair value
at the acquisition date, irrespective of the extent of any minority interest.

3.13 Revenue recognition
3.13.1 Revenue from operations
Revenue is measured at the fair value of the consideration received or.receivable. Revenue comprises sale of room nights, food and
beverages and rental income.
Revenueisrecogniseduponrenderingoftheservice,providedpersuasiveevidenceofanarrangementexists,tariffratesarexedor
are determinable and collectability is reasonably certain. Revenue from sale of goods or rendering of services is net of indirect taxes,
returns and discounts. Following are the criteria of recognition of difference type of income sources,
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
Type of service Nature and timing of the satisfaction of performance obligation
Provision of
accommodation
The main obligation in the customer contract is to provide rooms for guests. accommodation. This is
              
recognised on the rooms occupied on a daily basis over the period of the stay. Invoice is raised to customer
on completion of the duration of the stay.
Provision of Food
and beverage
The following services are rendered under this performance obligation:
i) Provision of BB/HB/FB meal for guests occupying the hotels which is part and partial of the contract entered
into. Revenue is recognized at the time of sale and invoice to the customers on the completion of the duration
of the stay.
ii) Provision of extra food and beverages Revenue is recognised at the time of sale and invoice to the customers
at the time of consumption.
Provision of
Laundry,
Telephone, Water
sports, etc
These services are provided to customers as they are implied as business practices in the industry and
create a valid expectation of the customer. Revenue is recognised at the time of provision of service and
invoice is raised at the time of service is consumed.
Management fee
Management fees earned from hotels managed by the Company is usually under long-term contracts with the
hotel owner and are recognised when earned in accordance with the terms of the contract when collectability
is certain.
Rental income Rental income is recognized on a straight-line basis over the term of the lease.
TAL LANKA HOTELS PLC | Annual Report 2022/23
44
3.14 Expenditure recognition
Expensesarerecognizedintheprotorlossonthebasis
of a direct association between the cost incurred and
theearning of specicitemsofincome. All expenditure
incurred in running the business and in maintaining
property,plantandequipmentinastateofefciencyhas
beenchargedtotheprotorloss.
For the purpose of presentation in prot or loss, the
"functionofexpenses"methodhasbeenadopted,onthe
basis that it presents fairly the elements of the Company's
performance.
 
Finance income comprises interest income on funds
invested. Interest income is recognized as it accrues in
protorloss,usingtheeffectiveinterestmethod.
Finance expenses comprise interest expense on
borrowingsclassied as debt. Borrowingcoststhatare
not directly attributable to the acquisition, construction or
production of a qualifying asset are recognized in income
statement using the effective interest method.
Foreigncurrencygainsandlossesonnancialassetsand
nancial liabilities are reportedon a net basis as either
nance income or nance cost depending on whether
foreign currency movements are in a net gain or net loss
position.
3.16 Income tax expense
Income tax expense comprises both current and deferred
tax. Income tax expense is recognized in income
statement except to the extent that it relates to items
recognized directly in equity, in which case is recognized
in the statement of comprehensive income or statement
of changes in equity, in which case it is recognized directly
in the respective statements.
The Company has determined that interest and
penalties related to income taxes, including uncertain
tax treatments, do not meet the denition of income
taxes, and therefore accounted for them under lAS 37
Provisions,ContingentLiabilitiesandContingentAssets.
3.16.1 Current taxation
Current Tax expenses are accounted in the same period
to which the revenue and expenses relate. Provision for
current income tax is made for the tax liability payable
on taxable income after considering tax allowances,
deductions and exemptions determined in accordance
with the provisions of the Inland Revenue Act No. 24 of
2017 and as amended subsequently by Inland Revenue
(Amendment) Act No 10 of2021 and (Amendment) Act
No 45 of2022.
3.16.2 Deferred taxation
Deferred Tax is recognised by providing for temporary
differences between the carrying amounts of assets
and liabilities for nancial reporting purposes and the
amounts used for taxation purposes.
Deferred Tax is not recognised for, temporary differences
on the initial recognition of assets or liabilities in a
transaction that is not a business combination and that
affectsneitheraccountingnortaxableprotorloss.
Deferred tax assets are recognised for unused tax losses,
unused tax credits and deductible temporary difference
totheextentthatitisprobablethatfuturetaxableprot
will be available against which they can be used. Future
taxableprotsaredetermined based on the reversalof
relevant taxable temporary difference is insufcient
to recognised a differed tax asset in full, then future
taxableprots,adjustedforreversalofexistingtemporary
differences, are considered, based on the business plans.
Differed tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable
thattherelatedtaxbenetwillberealised;suchreduction
isreversedwhentheprobabilityoffuturetaxableprots
improves.
Unrecognized deferred tax assets are reassessed at
each reporting date and recognised to the extent that it
has become probable that future taxable protswill be
available against which they can be used.
Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse,
using tax rates in enacted or substantively enacted at the
reporting date. The measurement of deferred tax reflects
the tax consequences that would follow from the manner
in which the Company expects, at the reporting date, to
recover or settle the carrying amount of its assets and
liabilities
3.16.3 Tax exposures
In determining the amount of current and deferred tax, the
Company considers the impact of uncertain tax positions
and whether additional taxes and interest may be due.
This assessment relies on estimates and assumptions
and may involve a series of judgments about future
events.
New information may become available that causes the
Company to change its judgment regarding the adequacy
of existing tax liabilities; such changes to tax liabilities
will impact the tax expense in the period that such a
determination is made.
3.17 Related Party Transactions
Disclosure has been made in respect of the transactions
in which one party has the ability to control or exercise
signicant influence over the nancial and operating
policies decisions of the other, irrespective of whether a
price is charged.
3.18 Segment reporting
A segment is a distinguishable component engaged
in providing services and that is subject to risks and
returns that are different to those of other segments. The
Company does not have distinguishable components to
beidentiedasasegmentasalloperationsaretreatedas
one segment.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
45

Cash flows are reported using the indirect method,
wherebyprot/(loss)beforetaxisadjustedfortheeffects
of transactions of noncash nature and any deferrals or
accruals of past or future cash receipts or payments, as
stipulatedinLKAS7-statementofcashflows.Cashflows
for the year are classied by operating, investing and
nancingactivitiesCashandcashequivalentscomprise
ofcashinhand,cashatbankandbankoverdrafts.
3.20 Earnings Per Share
The Company presents basic Earnings Per Share (EPS)
based on prot or loss attributable to the ordinary
shareholders. Basic EPS is calculated by dividing the
protorlossattributabletoordinaryshareholdersbythe
weighted average number of ordinary shares outstanding
during the period.
3.21 Dividends on ordinary shares
Dividends on ordinary shares are recognized as a liability
and deducted from equity when they are approved by the
Company's shareholders. Interim dividends are deducted
from equity when they are declared and are no longer at
the discretion of the Company.
4. NEW STANDARDS AND CHANGES TO ACCOUNTING
STANDARDS NOT EFFECTIVE AS AT THE REPORTING
DATE
A number of new standards are effective for annual
periods beginning on or after 01st April 2023 and earlier
application is permitted; however, the Company has not
early adopted the new or amended standards in preparing
thesenancialstatements.
4.1. Deferred Tax related to Assets and Liabilities arising
from a single Transaction
(Amendments to LKAS 12)
The amendments narrow the scope of the initial
recognition exemption to exclude transactions that give
rise to equal and offsetting temporary differences- e.g.
leases and decommissioning liabilities. The amendments
apply for annual reporting periods beginning on or after
1st January 2023. For leases and decommissioning
liabilities, the associated deferred tax asset and
liabilities will need to be recognized from the beginning
of the earliest comparative period presented, with any
cumulative effect recognized as an adjustment to
retained earnings or other components of equity at that
date. For all other transactions, the amendments apply to
transactions that occur after the beginning of the earliest
period presented.
4.2       
(Amendments to LKAS 1)
The amendments, as issued on 2020, aim to clarify the
requirements on determining whether a liability is current
or non-current, and apply for annual reporting periods
beginning on or after 01st January 2023. However, the
IASB has subsequently proposed further amendments to
LKAS1andthedeferraloftheeffectivedateofthe2020
amendmentstono earlier than Olst January 2024. Due
to these ongoing developments, the Company is unable
to determine the impact of these amendments on the
nancial statements in the period of initial application.
The Company is closely monitoring the developments.
4.3. Disclosure of Accounting Policies (Amendments to
LKAS 1). The amendment applies to annual reporting
period beginning on or after 1 January 2023
Thekeyamendmentsinclude,
- requiring companies to disclose their material accounting
policiesratherthantheirsignicantaccountingpolicies.
- clarifying that accounting policies related to immaterial
transactions, other events or conditions are themselves
immaterial and as such need not be disclosed; and
- clarifying that not all accounting policies that relate to
material transactions, other events or conditions are
themselvesmaterialtoaCompany'snancialstatements.
The Company does not anticipate this amended to have a
signicantimpact.
 
(Amendments to LKAS 8)
The amendments introduce a new denition for
accounting estimates clarifying that they are monetary
amountsinthenancialstatementsthataresubject to
measurement uncertainty. Additionally, the amendments
also clarify the relationship between accounting policies
and accounting estimates by specifying that an entity
develops an accounting estimate to achieve the objective
set out by an accounting policy. The amendment applies
to annual reporting periods beginning on or after 1
January2023.
>>> ACCOUNTING POLICIES
FOR THE YEAR ENDED 31ST MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST MARCH,
2023
Rs.
2022
Rs.
5. REVENUE
Revenue from Contracts with Customers
Accommodation 1,023,910,369 481,785,137
Food&beverage 1,208,988,495 571,262,563
Revenue from Other Sources
Rent income 53,603,792 41,771,651
Banquet income 33,194,449 34,606,968
Laundryincome 3,647,892 2,690,333
Telephone income 34,944 106,606
OtherSourcesofRevenue 37,994,515 15,197,692
2,361,374,456 1,147,420,950
5.1 Timing of Revenue Recognition
Products&servicestransferredatapointintime 1,283,860,295 623,864,162
Products&servicestransferredovertime 1,077,514,161 523,556,788
Total Revenue 2,361,374,456 1,147,420,950
6. OTHER INCOME
Gain on disposal of property, plant and equipment 660,870 -
Otherincomefromscrapsale 233,555 311,784
894,425 311,784
7. NET FINANCE EXPENSE
7.1 FINANCE INCOME
Interest income 21,604,632 22,381,841
21,604,632 22,381,841
7.2 FINANCE EXPENSE
Interestexpensesonbankborrowings 284,395,382 117,154,433
Interest expenses on Intercompany borrowings 54,010,729 22,815,333
Exchange loss (net) 233,834,795 974,957,479
572,240,906 1,114,927,245
Net Finance Expense 550,636,274 1,092,545,404
TAL LANKA HOTELS PLC | Annual Report 2022/23
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST MARCH,
2023
Rs.
2022
Rs.
8. LOSS BEFORE TAX
Loss before tax for the year is stated after charging all expenses including the following :
Directors fees 1,542,700 1,212,006
Auditors' remuneration - Audit 1,266,000 1,266,000
Staff costs (Note 8.1) 856,839,437 581,908,177
Depreciation on property, plant and equipment 393,057,842 377,224,480
Amortization of intangible assets 743,431 2,754,363
Amortization of Right of use assets 13,190,952 13,190,952
Repairs and maintenance of property, plant and equipment 97,916,661 51,731,272
Management fee 71,769,650 34,346,976
Legalfees 467,406 265,854
Economic service charge write-off during the year - 9,514,429
Impairment Provision for Inventories 1,496,244 889,693
ImpairmentProvisionforTradeandOtherReceivables 2,462,819 5,002,320
8.1 Staff costs
SalarycostandOtherbenet 774,991,995 531,803,325
Denedbenetplans(Note8.2.1) 14,570,042 7,897,156
Denedcontributionplans 67,277,400 42,207,696
856,839,437 581,908,177
8.2 
8.2.1 
Current service cost 9,429,553 11,034,703
Past service credit - (7,608,658)
InterestcostonRBO 16,669,046 10,485,839
Return on plan assets (11,528,557) (6,014,728)
14,570,042 7,897,156
8.2.2 Amount recognized in other comprehensive income
Actuarialloss/(gain)onretirementbenetobligation 13,368,379 (16,350,468)
Remeasurement loss /(gain) of plan assets (1,310,614) 454,186
12,057,765 (15,896,282)
TAL LANKA HOTELS PLC | Annual Report 2022/23
48
NOTES TO THE FINANCIAL STATEMENTS
9.3 Amounts recognised in OCI For the year ended 31
st
March 2023 For the year ended 31
st
March 2022
Items that will not be

Before Tax
Tax
(expense)/

Net of Tax Before Tax
Tax
(expense)/

Net of Tax
Revaluation gain on building - - - 646,261,490 (90,476,609) 555,784,881
Actuarial gains / (losses) arising
from retirement
benetobligations
(12,057,765) 3,617,330 (8,440,435) 15,896,282 (2,225,479) 13,670,803
Fair value gain / (loss)
on investments in equity
investments designated
asatFVOCI
(1,396,919) 419,076 (977,843) 2,873,910 (287,391) 2,586,519
Total income tax recognised
in other comprehensive income
(13,454,684) 4,036,406 (9,418,278) 665,031,682 (92,989,479) 572,042,203
FOR THE YEAR ENDED 31ST MARCH 2023
9. INCOME TAX EXPENSE
9.1 Applicable Rates of Income Tax
In accordance with the provisions of the Inland Revenue (Amendment) Act No 10 of 2021, the Company is liable for Income Tax
at the rate of 14% on its taxable Business income. (2021/2022 - 14%). Income Tax for any other income is computed at 24%.
According to the the Inland Revenue Amended Act No 45 of 2022, the tax rate of the Company is increased to 30% from 14%
w.e.f 01
st
October2022.
Income exempt from tax
As per the Inland Revenue (Amendment) Act, No. 10 of 2021, Interest income received from Savings and Fixed deposits which
are denominated in foreign currency have been considered as exempt income.
2023
Rs.
2022
Rs.
9.2 
Current tax expense
In respect of the current year (note 9.4) - -
Under provision in previous years - 5,481,210
- 5,481,210
Deferred tax expense (Note 9.8 )
Provision/(Reversal)ofnetdeferredtaxLiability (50,764,257) 53,071,139
Increment of Tax Rate 326,270,518 -
Total Income tax expense recognised in the Income Statement 275,506,261 58,552,349
FOR THE YEAR ENDED 31ST MARCH,
TAL LANKA HOTELS PLC | Annual Report 2022/23
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST MARCH,
2023
Rs.
2022
Rs.
9. INCOME TAX EXPENSE (CONTD.)
9.4 Reconciliation of Accounting Loss to Tax on current year
AccountingLossbeforeincometaxexpense (1,015,687,935) (1,656,354,996)
OtherSourcesofIncome/ExemptIncome (22,265,502) (22,381,841)
Aggregate disallowed expenses 1,138,763,110 1,394,984,607
Aggregate allowable deductions (272,712,585) (252,690,584)
Assessable Income from Business (171,902,912) (536,442,814)
Assessable Interest Income - -
Taxable Income - -
Income Tax Expense - -
9.5 Tax Losses Carried Forward
TaxLossesbroughtforward 2,232,232,477 1,716,986,014
Adjustments to prior year tax liability and tax losses arising
during the year
(3,367,790) (21,196,351)
TaxLossesDuringtheYear 171,902,912 536,442,814
Tax Losses carried forward 2,400,767,599 2,232,232,477
9.6 DEFERRED TAX LIABILITY
Deferred tax assets (53,011,639) (22,018,784)
Deferred tax liabilities 1,212,576,927 588,538,626
Net Deferred Tax Liability 1,159,565,288 566,519,842
9.6.1 Analysis of recognised deferred tax assets / liabilities in the Statement of Financial Position
2023 2022
Deferred tax assets on,
Temporary
difference
Tax effect
Temporary
difference
Tax effect
Inventory provision 13,843,373 4,153,012 12,347,129 1,728,598
Lossallowancefortradereceivables 11,919,503 3,575,851 9,456,684 1,323,936
Retirementbenetobligation 150,942,585 45,282,776 135,473,217 18,966,250
176,705,461 53,011,639 157,277,030 22,018,784
Deferred tax liabilities on,
Property, plant and equipment 3,337,699,665 1,001,309,900 3,487,244,709 488,214,259
Right to use land - Revalued 701,013,634 210,304,090 713,312,113 99,863,696
FinancialassetsmeasuredatFVOCI 3,209,791 962,937 4,606,710 460,671
4,041,923,090 1,212,576,927 4,205,163,532 588,538,626
Net recognised deferred tax liability 3,865,217,629 1,159,565,288 4,047,886,502 566,519,842
TAL LANKA HOTELS PLC | Annual Report 2022/23
50
NOTES TO THE FINANCIAL STATEMENTS
9.6 DEFERRED TAX LIABILITY (CONTD.)
2023
Rs.
2022
Rs.
9.6.3 Analysis of Tax Losses
The composition of tax losses is as follows,
Tax losses brought forward 2,232,232,477 1,716,986,014
Adjustment to prior years (3,367,790) (21,196,351)
Tax loss during the year 171,902,912 536,442,814
Total carried forward tax losses as at 31st March 2,400,767,599 2,232,232,477
Unrecognized tax loss for deferred tax (2,400,767,599) (2,232,232,477)
Carried forward tax losses for deferred tax - -
9.6.2 Movement of deferred tax assets and liabilities
As at 31
st
March 2023
Opening
balance
Recognized in P & L Recognized in OCI
Closing
balance
Timing
Difference
Tax rate
Change
Timing
Difference
Tax rate
Change
Property, plant and equipment
488,214,259 (44,863,513) 240,332,095 - 317,627,059 1,001,309,900
Right to use land - Revalued
99,863,696 (3,689,544) 111,102,748 - 3,027,190 210,304,090
Inventory provision
(1,728,598) (448,873) (1,975,541) - - (4,153,012)
Lossallowancefortrade
receivables
(1,323,936) (738,846) (1,513,069) - - (3,575,851)
Retirementbenetobligation
(18,966,250) (1,023,481) (21,675,715) (3,617,330) - (45,282,776)
Financial assets measured at
FVOCI
460,671 - - (419,076) 921,342 962,937
566,519,842 (50,764,257) 326,270,518 (4,036,406) 321,575,591 1,159,565,288
As at 31
st
March 2022
Opening
Balance
Recognized in P & L Recognized in OCI
Closing
balance
Timing
Difference
Tax rate
Change
Timing
Difference
Tax rate
Change
Property, plant and equipment
415,552,927 (17,815,277) - 90,476,609 - 488,214,259
Right to use land - Revalued
101,305,482 (1,441,786) - - - 99,863,696
Inventory provision
(1,604,041) (124,557) - - - (1,728,598)
Lossallowancefortrade
receivables
(623,611) (700,325) - - - (1,323,936)
Retirementbenetobligation
(22,635,703) 1,443,974 - 2,225,479 - (18,966,250)
Carry forward tax losses
(71,709,110) 71,709,110 - - - -
Financial assets measured at
FVOCI
173,280 - - 287,391 - 460,671
420,459,225 53,071,139 - 92,989,479 - 566,519,842
TAL LANKA HOTELS PLC | Annual Report 2022/23
51
9.6 DEFERRED TAX LIABILITY (CONTD.)
9.6.5 Applicable income tax rates as per the Department of Inland Revenue
9.7 CURRENT TAX ASSETS AND (LIABILITIES)
10. EARNINGS/ (LOSS) PER SHARE
     
average number of ordinary shares in issue during the year.
Deferred tax is provided using the liability method, providing for temporary differences between the carrying amount of assets
andliabilitiesfornancialreportingpurposesandtheamountsusedfortaxationpurposesbasedontheprovisionoftheInland
Revenue Amendment act no 45 of 2022. The deferred tax liability is calculated at the rate of 30% (2021/2022-14%) for the company
asat31stMarch2023.TheCorporatetaxrateincreasedfrom14%to30%.ThischangeresultedinalossofLKR647,846,109/-
related to the remeasurement of deferred tax liability of the Company.
NOTES TO THE FINANCIAL STATEMENTS
9.6.4 Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable

2023 2022
Gross Amount Tax effect Gross Amount Tax effect
Rs. Rs. Rs. Rs.
Carried forward tax losses 2,400,767,599 720,230,280 2,232,232,477 312,512,547
2,400,767,599 720,230,280 2,232,232,477 312,512,547
2023
Rs.
2022
Rs.
Current tax assets
Withholding tax recoverable 7,410,154 6,283,909
7,410,154 6,283,909
Current tax liabilities
Income tax payable - -
7,410,154 6,283,909
2023 2022
For the Year ended 31
st
March
Lossattributabletoshareholders(Rs.) (1,291,194,196) (1,714,907,345)
Weighted average number of shares in issue during the year 139,637,494 139,637,494
BasicLosspershare (9.25) (12.28)
10.1 Diluted Earning per share
There were no potential dilutive ordinary shares outstanding of any time during the year. Therefore, diluted Earnings per share
is the same as Basic earnings per share above
TAL LANKA HOTELS PLC | Annual Report 2022/23
52
NOTES TO THE FINANCIAL STATEMENTS
11. PROPERTY, PLANT AND EQUIPMENT
As at 31
st
March 2022
Landscaping Buildings
Plant
& machinery
Hotel
equipment
Hotel
furniture &


furniture &
equipment
Motor
vehicle
Capital work
in progress

Openingnetbookvalue
6,209,970 2,981,000,000 356,333,205 172,851,560 176,199,102 25,965,623 - 1,658,766 3,720,218,226
Additions during the year
- 680,922 4,227,812 1,947,065 71,339 901,500 - 5,489,734 13,318,372
Transferfromcapitalworkin
progress
- - - 100,500 - (100,500) -
Depreciation charge for the
year
(96,588) (198,763,412) (70,421,845) (39,785,155) (62,752,690) (5,404,790) - - (377,224,480)
Revaluation surplus during
the year
- 646,261,490 - - - - - - 646,261,490
Carrying value
6,113,382 3,429,179,000 290,139,172 135,013,470 113,517,751 21,562,833 - 7,048,000 4,002,573,608
As at 31
st
March 2022
Cost / valuation
8,982,586 3,429,179,000 1,269,967,936 611,646,917 1,157,809,734 104,975,291 13,000,000 7,048,000 6,602,609,464
Accumulated depreciation
(2,869,204) - (979,828,764) (476,633,447) (1,044,291,983) (83,412,458) (13,000,000) - (2,600,035,856)
Carrying value
6,113,382 3,429,179,000 290,139,172 135,013,470 113,517,751 21,562,833 - 7,048,000 4,002,573,608
TAL LANKA HOTELS PLC | Annual Report 2022/23
53
NOTES TO THE FINANCIAL STATEMENTS
11. PROPERTY, PLANT AND EQUIPMENT (Contd.)
As at 31
s
t March 2023
Landscaping Buildings
Plant
& machinery
Hotel
equipment
Hotel
furniture &


furniture &
equipment
Motor
vehicle
Capital work
in progress

Openingnetbookvalue
6,113,382
3,429,179,000 290,139,172 135,013,470 113,517,751 21,562,833 - 7,048,000 4,002,573,608
Additions during the year - - 586,000 8,031,192 - 4,047,313 - 17,552,507 30,217,012
Transferfromcapitalworkin
progress
- 5,106,878 17,252,503 - - - - (22,359,381) -
De-recognition of CWIP (1,399,628) (1,399,628)
Disposals
- Cost - - (10,249,424) - - - - - (10,249,424)
- Accumulated depreciation - - 10,249,424 - - - - - 10,249,424
Depreciation charge for the
year
(96,588) (228,941,856) (69,806,452) (37,042,200) (52,161,288) (5,009,458) - - (393,057,842)
Carrying value 6,016,794 3,205,344,022 238,171,223 106,002,462 61,356,463 20,600,688 - 841,498 3,638,333,150
As at 31st March 2023
Cost / valuation
8,982,586 3,434,285,878 1,277,557,015 619,678,109 1,157,809,734 109,022,604 13,000,000 841,498 6,621,177,424
Accumulated depreciation
(2,965,792) (228,941,856) (1,039,385,792) (513,675,647) (1,096,453,271) (88,421,916) (13,000,000) - (2,982,844,274)
Carrying value
6,016,794 3,205,344,022 238,171,223 106,002,462 61,356,463 20,600,688 - 841,498 3,638,333,150
TAL LANKA HOTELS PLC | Annual Report 2022/23
54
NOTES TO THE FINANCIAL STATEMENTS
11. PROPERTY, PLANT AND EQUIPMENT (CONTD.)
11.1 Property, plant and equipment under construction
Capitalworkinprogressrepresentstheamountofexpenditurerecognisedunderproperty,plantandequipmentduringthe
construction of capital assets.
11.2 Title restriction on property, plant and equipment
There are no restrictions that existed on the title of the PPE of the Company as at the reporting date except assets disclosured under
note 11.8.
11.3 Acquisition of property, plant and equipment during the year
Duringthenancialyear,theCompanyacquiredPPEtotheaggregatevalueofRs.30.2million(2021/2022-Rs.13.3million)by
means of cash.
11.4 Capitalisation of borrowing cost
There were no capitalised borrowing costs related to the acquisition of property, plant and equipment during the year 2022/2023
(2021/2022 – Nil).
11.5 Temporarily Idle property, plant and equipment
There are no temporarily idle property, plant or equipment as at the reporting date. (2021/2022 - Nil)
11.6 Impairment of property, plant and equipment
The Board of Directors has assessed the potential impairment loss of PPE as at 31st March 2023 by considering the impact from
the current economic condition as well. Based on the assessment, no impairment provision is required to be made in the Financial
Statements as at the reporting date in respect of PPE (2021/2022 - Nil).
11.7 Fully depreciated property, plant and equipment in use
Property, plant and equipment includes fully depreciated assets with a cost of Rs. 1,707,564,397/- (31 March 2022 - Rs.
1,555,621,411/-) which were in use during the year.
11.8 Property, plant and equipment pledged as security for liabilities
The value of the property, plant and equipment pledged as security against borrowings are disclosed in Note 30.
11.9 Valuation of Property, Plant and Equipment
TheCompanyusestherevaluationmodelofmeasurementforbuildings.TheCompanyengagedP.B.Kalugalagedera&Associates,
an accredited independent valuer, to determine the fair value of its buildings. Fair value is determined by reference to Direct capital
comparisonmethod.Valuationsarebasedonopenmarketrates,adjustedforanydifferenceinthenature,locationorconditionof
thespecicproperty.Thedateofthemostrecentvaluationwas31
st
March 2022. There is no major change in value especially as
conrmedbytheindependentvalueron31
st
March 2023.
TAL LANKA HOTELS PLC | Annual Report 2022/23
55
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31
ST
MARCH 2023
11. PROPERTY, PLANT AND EQUIPMENT (CONTD.)
11.10 The details of freehold buildings which are stated at valuation are as follows,
Location
No of
Buildings
Square Feet
Method of
Valuation
Effective date of
Valuation
Name of the Independent
Valuer
Revalued
Amount
Net Book
Value before
revaluation
Revaluation
Gain
Building
No 25,
Galle Face
Centre Road,
Colombo - 03
2 472,630
Direct capital com-
parison method
31-03-2022
Mr. P. B. Kalugalagedara
Chartered
ValuationSurveyor
No.521/7,
Thimbirigasyaya
Road, Colombo 5.
3,434,285,878 3,200,237,144 234,048,734
11.11 Fair value measurement
(a) Fair value hierarchy
The fair valueoftheBuildingwasdeterminedbyanexternalindependentpropertyvaluer,havingappropriaterecognizedprofessionalqualicationsandexperienceinthecategoryofthe
 propertybeingvalued.Thevaluerprovidesthefairvalueoftheproperty.BasedonthevaluationtechniquesusedithasbeenclassiedunderLevel3infairvaluehierarchy.
(
Thefollowingtableshowsthevaluationtechniquesusedinmeasuringfairvalue,aswellasthesignicantunobservableinputsused.
Valuation techniques  Range of Estimates for unobservable inputs
Interrelationship between key
unobservable inputs & fair value
measurements
Direct capital comparison method
The valuation method considers the cost of
producing substitute property with equal utility,
by calculating the current cost of replacing
the subject improvements and subtracting an
approximate amount for depreciation.
Estimated constructed
cost per square feet
Rs. 4,000 - Rs. 9,500
(Estimated Price per Square Foot)
Positive correlation sensitivity
Estimated fair value would increase/
(decrease) if price per Square Foot
would increase / (decrease).
TAL LANKA HOTELS PLC | Annual Report 2022/23
56
NOTES TO THE FINANCIAL STATEMENTS
11.12 If property, plant and equipment were stated on the historical cost basis, their net book amounts would be as follows :
Buildings
Cost 2,371,786,459 2,366,679,581
Accumulated depreciation (1,707,540,628) (1,549,761,989)
Carrying value 664,245,831 816,917,592
11. PROPERTY, PLANT AND EQUIPMENT (CONTD.)
12. INTANGIBLE ASSETS
Cost
Balance at the beginning of the year 26,555,844 26,555,844
Balance at the end of the year 26,555,844 26,555,844
Accumulated amortization
Balance at the beginning of the year 25,682,846 22,928,483
Amortization during the year 743,431 2,754,363
Balance at the end of the year 26,426,277 25,682,846
Carrying value as at 31st March 129,567 872,998
13. RIGHT OF USE ASSETS
Valuation 1,204,004,800 1,204,004,800
Accumulated amortization
Balance at the beginning of the year 438,929,245 425,738,293
Amortized during the year 13,190,952 13,190,952
Balance at the end of the year 452,120,197 438,929,245
Carrying value as at 31st March 751,884,603 765,075,555
13.1 If the leasehold land was stated at historical cost, the net book value would be as follows :
Leasehold land
Cost 83,000,000 83,000,000
Accumulated depreciation (32,129,031) (31,236,558)
Carrying value 50,870,969 51,763,442
The Company obtained leasehold rights to the land situated at No. 25, Galle Face Centre Road, Colombo 3, for 99 years from the
Urban Development Authority on 9 April 1981. The remaining lease period as at 31 March 2023 was 57 years. Based on the then
Ruling 11 of the Urgent Issues Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanka, it was stated at revalued
amounts. As per the statement of Recommended Practice for Right-to-use of Land on Lease issued by the Institute of Chartered
Accountants of Sri Lanka, the carrying value inclusive of revalued amounts of the leased property is amortized over the remaining
lease period. However with the adoption of SLFRS 16 Leases and the Application Guidance Notes on SLFRS 16 issued by the The
Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) the prevailing SoAT has been withdrawn.
AS AT 31ST MARCH,
2023
Rs.
2022
Rs.
TAL LANKA HOTELS PLC | Annual Report 2022/23
57
NOTES TO THE FINANCIAL STATEMENTS
14.1 Investment in ordinary shares of Lanka Island Resorts Ltd
TheCompanydesignatedtheinvestmentsshownbelowasequitysecuritiesatFVOCIbecausetheseequitysecuritiesrepresent
investments that the Company intends to hold for the long term for strategic purposes.
No strategic investments were disposed of during the year 2022/2023, and there were no transfers to any cumulative gain or
loss within the equity relating to these investments.
TheinvestmentinordinarysharesofLankaIslandResortsLtdhasbeenmeasuredatfairvalueonanetassetsvalue
(Rs.12.28/-pershare)basisandthefairvaluegain/(loss)hasbeenclassiedasfairvaluereserve.
14. EQUITY SECURITIES DESIGNATED AS AT FVOCI
AS AT 31ST MARCH,
2023
Rs.
2022
Rs.
InvestmentsinordinarysharesofLankaIslandResortsLtd 17,297,591 18,694,510
17,297,591 18,694,510
Balance as at the beginning of the year 18,694,510 15,820,600
Fair value gain / (loss) on investments (1,396,919) 2,873,910
Balance as at the end of the year 17,297,591 18,694,510
2023
Rs.
2022
Rs.
15. INVENTORIES
Food, beverages and tobacco 55,539,891 31,414,654
Engineering items 5,146,832 2,716,205
Otherconsumables 46,473,920 42,175,859
107,160,643 76,306,718
Provision for impairment of inventories (Note 15.1) (13,843,373) (12,347,129)
93,317,270 63,959,589
15.1 Provision for impairment of inventories
Balance at the beginning of the year 12,347,129 11,457,436
Provision during the year 1,496,244 889,693
Balance at the end of the year 13,843,373 12,347,129
16. TRADE AND OTHER RECEIVABLES
Trade receivables 228,409,591 137,096,115
Impairment Provision for trade receivables (Note 16.1) (10,091,204) (7,628,385)
Net Trade receivables 218,318,387 129,467,730
ReceivablesfromAirportGardenHotelLimited - 7,980,973
Otherreceivables 2,589,391 2,073,397
ImpairmentProvisionforOtherreceivables(Note16.1) (1,828,299) (1,828,299)
219,079,479 137,693,801
AS AT 31ST MARCH,
TAL LANKA HOTELS PLC | Annual Report 2022/23
58
NOTES TO THE FINANCIAL STATEMENTS
16. TRADE AND OTHER RECEIVABLES (CONTD.)
AS AT 31ST MARCH,
2023
Rs.
2022
Rs.
16.1 Impairment Provision for trade receivables
Balance at the beginning of the year 9,456,684 4,454,364
Impairment Provision recognized during the year - Trade Receivables 2,462,819 3,174,021
ImpairmentProvisionrecognizedduringtheyear-OtherReceivables - 1,828,299
Balance at the end of the year 11,919,503 9,456,684
17. AMOUNTS RECEIVABLE FROM RELATED PARTIES
PIEMHotelsLimited 42,071 42,071
AirportGardenHotelLimited 341,323 -
TajCoralReefResort&SpaMaldives 1,250,869 -
1,634,263 42,071
18. DEPOSITS, PREPAYMENTS AND ADVANCES
Deposits 35,305,864 39,326,450
Prepayments 37,923,613 18,383,114
Advances (Note 18.1) 18,948,122 22,979,429
92,177,599 80,688,993
18.1 The Company has recorded Supplier Advances, Staff Advances and festival Advances under the Advances.
19. INVESTMENT IN FIXED DEPOSITS
Balance at the beginning of the year 774,860,000 138,705,000
Investment during the year 90,787,500 387,640,000
Withdrawals during the year (962,347,500) -
Exchange gain/(loss) 177,487,500 248,515,000
Balance at the end of the year 80,787,500 774,860,000
Interest Receivable as at 31
st
March 4,457,661 33,268,096
Total Investment in Fixed Deposits as at 31
st
March 85,245,161 808,128,096
Non current Assets - 808,128,096
Current Assets 85,245,161 -
85,245,161 808,128,096
TAL LANKA HOTELS PLC | Annual Report 2022/23
59
AS AT 31
ST
MARCH,
2023
Rs.
2022
Rs.
20. CASH AND CASH EQUIVALENTS
Cashatbank 212,209,045 158,341,163
Cheques in hand 6,552,308 30,395,467
Cash in hand - Main cash 1,450,823 1,387,280
- Petty cash 2,577,000 2,072,000
 222,789,176 192,195,910
BankOverdraftsrepayableondemand - (101,228,267)
 222,789,176 90,967,643
21. STATED CAPITAL
Issued and fully paid
139,637,494 ordinary shares 1,396,374,941 1,396,374,941
Rights of Ordinary Shares
The sharesofTALLankaHotelsPLCarequotedintheColomboStockExchange.Allissuedsharesarefullypaid.Allshares
issued carry equal voting rights. The holders of ordinary shares are entitled to receive dividends as declared from time to time,
and are entitled to one vote per share at the meetings of the Company.
22. REVALUATION RESERVE (NET OF TAX)
Balance at the beginning of year 1,894,365,962 1,472,378,141
Revaluation gain during the year - 646,261,490
Deferred Tax relating to revaluation of building - (90,476,609)
Depreciation transfer (170,849,376) (133,797,060)
Deferred tax on revaluation surplus due to change of tax rate (320,654,249) -
Balance at the end of year 1,402,862,337 1,894,365,962
Nature and purpose of revaluation reserve
TherevaluationreserverelatestofreeholdbuildingwhichhasbeenrevaluedbytheCompany.Onrevaluationofanasset,any
increaseinthecarryingamountisrecognisedinrevaluationreserveinequitythroughOCIorusedtoreverseapreviouslosson
revaluation of the same asset, which was charged to the Income Statement. Any balance remaining in the revaluation reserve in
respect of an asset, is transferred directly to retained earnings on retirement or disposal of the asset.
23. FAIR VALUE RESERVE
2023
Rs.
2022
Rs.
Balance at the beginning of year 4,146,035 1,559,516
Changes in fair value (Note 14) (1,396,919) 2,873,910
Deferred tax relating to changes in fair value 419,076 (287,391)
Deferred tax on fair value Reserve due to change of tax rate (921,342) -
Balance at the end of year 2,246,850 4,146,035
Nature and purpose of fair value reserve
This represents the cumulative net change in fair value of equity securities designated at FVOCI until the investments are
derecognized.
NOTES TO THE FINANCIAL STATEMENTS
2023
Rs.
2022
Rs.
TAL LANKA HOTELS PLC | Annual Report 2022/23
60
AS AT 31
ST
MARCH,
2023
Rs.
2022
Rs.
24. LOANS AND BORROWINGS
Current
Bankborrowings 138,358,540 947,080,786
Relatedpartyborrowings-TALHotelsandResortsLimited 226,192,720 -
364,551,260 947,080,786
Non-current
Bankborrowings 3,224,694,341 2,867,870,489
Relatedpartyborrowings-TALHotelsandResortsLimited 716,504,285 809,014,010
Relatedpartyborrowings-IHOCOB.V 127,644,250 -
4,068,842,876 3,676,884,499
Total borrowings 4,433,394,136 4,623,965,285
NOTES TO THE FINANCIAL STATEMENTS
24.1
Movement in Loans
and Borrowings
Related Party Borrowings Bank Borrowings Total
2023
Rs.
2022
Rs.
2023
Rs.
2022
Rs.
2023
Rs.
2022
Rs.
Balance at the beginning of the
year
774,848,889 138,697,470 3,557,853,148 2,250,905,443
4,332,702,037
2,389,602,913
Loansreceivedduringtheyear
127,644,250 387,640,000 334,044,050 -
461,688,300
387,640,000
BankOverdraftobtainedforlong
term
- - - 379,000,000
-
379,000,000
Loanrepaymentsduringtheyear
- - (794,859,500) -
(794,859,500)
-
Effect of movement in exchange
rates
81,486,332 248,511,419 265,961,183 927,947,705
347,447,515
1,176,459,124
Balance at the end of the year
983,979,471 774,848,889 3,362,998,881 3,557,853,148
4,346,978,352
4,332,702,037
InterestPayableonLoan
86,361,784 34,165,121 54,000 230,536,635
86,415,784
264,701,756
InterestPayableonBankOverdraft
- - - 26,561,492
-
26,561,492
Total Loans as at 31st March
1,070,341,255 809,014,010 3,363,052,881 3,814,951,275
4,433,394,136
4,623,965,285
Current
226,192,720 - 138,358,540 947,080,786
364,551,260
947,080,786
Non-current
844,148,535 809,014,010 3,224,694,341 2,867,870,489
4,068,842,876
3,676,884,499
Total Loans as at 31st March
1,070,341,255 809,014,010 3,363,052,881 3,814,951,275
4,433,394,136
4,623,965,285
24.2 Maturity Analysis of Loans And Borrowings
Within 1 year
364,551,260 947,080,786
Between 1 and 2 years
536,469,394 1,324,808,336
Between 2 and 5 years
3,532,373,482 2,352,076,163
4,433,394,136 4,623,965,285
TAL LANKA HOTELS PLC | Annual Report 2022/23
61
AS AT 31
ST
MARCH,
2023
Rs.
2022
Rs.
24.3 The interest rate exposure on the bank borrowings as at the reporting date are as follows :
-HattonNationalBank(Loan1-USD4.00Mn) 01 M LIBOR USD +3.6% 01MLIBORUSD+3.6%
-HattonNationalBank(Loan2-USD13.00Mn) 01 M LIBOR USD +3.6% 01MLIBORUSD+3.6%
-HattonNationalBank(Loan3-USD2.72Mn) 01 M LIBOR USD +3.6% 01MLIBORUSD+3.6%
-HattonNationalBank(Loan4-LKR250Mn) - 3.46% Per Annum
-HattonNationalBank(Loan5-LKR25Mn) 4% Per Annum 4% Per Annum
-HattonNationalBank(Loan6-LKR25Mn) 4% Per Annum 4% Per Annum
-HattonNationalBank(Loan7-USD919,851/-) 01 M LIBOR USD +3.6% -
-LoanFromTALHotelsandResortsLimited(Loan8-USD0.699Mn) 6% Per Annum 6% Per Annum
-LoanFromTALHotelsandResortsLimited(Loan9-USD0.7Mn) 5.75% Per Annum 5.75% Per Annum
-LoanFromTALHotelsandResortsLimited(Loan10-USD0.25Mn) 5.75% Per Annum 5.75% Per Annum
-LoanFromTALHotelsandResortsLimited(Loan11-USD0.5Mn) 5.00% Per Annum 5.00% Per Annum
-LoanFromTALHotelsandResortsLimited(Loan12-USD0.5Mn) 5.25% Per Annum 5.25% Per Annum
-LoanFromIHOCOBV(Loan13-USD0.395Mn) 3 M LIBOR +3.6% -
NOTES TO THE FINANCIAL STATEMENTS
24. LOANS AND BORROWINGS (CONTD.)
25. RETIREMENT BENEFIT OBLIGATIONS
25.1 
Presentvalueofdenedbenetobligation(Note25.2) 150,942,585 135,473,217
Fair value of plan assets (Note 25.3) (86,237,083) (97,395,522)
Shortfall 64,705,502 38,077,695
 64,705,502 38,077,695
25.2 
Balance at the beginning of year 135,473,217 161,683,595

- Past service credit - (7,608,658)
- Current service cost 9,429,553 11,034,703
- Interest cost 16,669,046 10,485,839
Amount recognized in other comprehensive income
- Actuarial (gain)/ losses on obligation - Due to change
innancialassumptions
15,392,726 (32,324,384)
- Actuarial (gain)/ losses on obligation - Due to experience (2,024,347) 15,973,916

-Regularbenetpaymentsfromthefundduringtheyear (23,997,610) (23,179,421)
-RegularbenetpaymentsfromdirectlybytheCompany
during the year
- (592,373)
Balance at the end of year 150,942,585 135,473,217
TAL LANKA HOTELS PLC | Annual Report 2022/23
62
NOTES TO THE FINANCIAL STATEMENTS
25. RETIREMENT BENEFIT OBLIGATIONS (CONTD.)
AS AT 31
ST
MARCH,
2023
Rs.
2022
Rs.
25.3 Movement of the plan asset
Fair value of the plan asset at the beginning of the year 97,395,522 80,014,401
Net Contribution paid into the plan - 35,000,000
Benetpaidbytheplan (23,997,610) (23,179,421)
Return on plan assets 11,528,557 6,014,728
Remeasurement (loss) /gain of plan assets 1,310,614 (454,186)
Fair value of the plan asset at the end of the year 86,237,083 97,395,522
25.4

at Life Insurance Corporation (Lanka) Limited.
25.5 An actuarial valuation was carried out by an independent professional valuer, Messer's Navin V Iyer, Fellow, Institute of
Actuaries of India on 31 March 2023, to ascertain the full liability arising in terms of the Payment of Gratuity Act No 12 of 1983,
in respect of all employees of the Company as at 31 March 2023. The valuation method used by the Actuaries to value the
liability is the ‘Projected Unit Credit Method (PUC)’, the method recommended by the Sri Lanka Accounting Standard – LKAS

25.6 The principal assumptions used for this purpose are as follows :
Discount rate per annum 18.50% 13.50%
Annual salary increment rate 12.00% 5.00%
Staff turnover 10.00% 10.00%
Retirement age 60 years 60 years
Weighted average retirement age 7.16 years 7.19 years
Assumption regarding future mortality are based on A67-70 Mortalitytable, issued the Institute of Actuaries, London,
United Kingdom.
AspertheguidelinesissuedbytheInstituteofCharteredAccountantsofSriLanka,thediscountrateshavebeenadjustedto
convert the coupon bearing yield to a zero-coupon yield to match the characteristics of the gratuity payment liability and the
resultingyieldtomaturityforthepurposeofvaluingEmployeebenetobligationsasperLKAS19.
TAL LANKA HOTELS PLC | Annual Report 2022/23
63
NOTES TO THE FINANCIAL STATEMENTS
25. RETIREMENT BENEFIT OBLIGATIONS (CONTD.)
AS AT 31
ST
MARCH,
2023
Rs.
2022
Rs.
25.7 Maturity analysis of the payments
Thefollowingpaymentsareexpectedonemployeebenetliabilitiesin
future years from the fund as follows,
1st following year 22,657,932 21,473,459
2nd following year 28,030,547 20,802,352
3rd following year 27,776,049 26,247,706
4th following year 28,037,877 22,521,500
5th following year 28,463,722 21,273,161
Sum of years 6 to 10 144,012,672 90,553,563
Years 11 and above 270,632,922 105,697,204
25.8 The composition of Insurance Plan Assets
2023 2022
Major categories of Plan Assets as follows,
Insurer-managed funds 100% 100%
25.9 Sensitivity of assumptions used in actuarial valuation
Sensitivity analysis is an analysis which will give the movement in liability if the assumption were not proved to be true on
differentcount.Thisonlysigniesthechangeintheliabilityifthedifferencebetweenassumedandtheactualisnotfollowing
the parameters of the sensitivity analysis.
Sensitivity analysis
2023
Rs.
2022
Rs.
 150,942,585 135,473,217
Effectof+1%changeinrateofdiscounting (6,382,547) (5,715,425)
Effect of -1% change in rate of discounting 6,945,683 32,136,902
Effectof+1%changeinrateofsalaryincrease 7,299,272 32,473,750
Effect of -1% change in rate of salary increase (6,795,103) (11,419,580)
26. TRADE AND OTHER PAYABLES
Trade payables 302,230,644 178,264,180
Social security and other taxes payable 47,210,803 23,668,777
Accrued expenses 143,038,464 139,967,328
Deposits and advances obtained 147,422,293 40,984,668
Otherpayables 131,646,227 121,593,474
771,548,431 504,478,427
TAL LANKA HOTELS PLC | Annual Report 2022/23
64
AS AT 31
ST
MARCH,
2023
Rs.
2022
Rs.
27. AMOUNTS PAYABLE TO RELATED PARTIES
Lanka Island Resorts Limited 787,484 208,059
Taj West end 848,573 -
Taj Exotica Resort & Spa Maldives 2,185,409 -
The Indian Hotels Company Limited 12,143,892 2,378,295
TAL Hotels and Resorts Limited - Management fee 172,497,663 105,543,470
188,463,021 108,129,824
28. EVENTS AFTER THE REPORTING PERIOD
There have been no events occurring after the reporting date that require adjustments to or disclosure in the Financial
Statements.
29. IMPACT OF CURRENT ECONOMIC CONDITION
Current Economic Condition of the Country
Duringthersthalfof2022allkeysectorscontracted,amidshortagesofinputsandsupplychaindisruptionswiththeeconomic
crisis. Year-on-year headline inflation reached an unprecedented 69.8 percent in September 2022, due largely to high food
inflation of 94.9 percent. This reflects the impact of rising global commodity prices, monetization of the scal decit and
currencydepreciation.FromOctober2022onwardstheyear-on-yearheadlineinflationratestartedtodropslightlywhereasin
March 2023 the year-on-year inflation rate is 50.3 percent.
Theoutlookfortheglobaleconomytookapositiveturninthersthalfof2023asinflationarypressuresbegantoease,but
ongoingpoliticaltensionsanddomesticchallengesinkeymarketsareslowinganyreturntosustainedgrowthofthebusiness.
Further,globalenergypricesreturningtolevelslastseenpriortotheinvasionofUkraine,combinedwitheasingcommodityand
food prices, have helped put further downward pressure on inflation for the rest of 2023.
Impact to the Company
TheManagementassessedthecurrenteconomic conditions, in preparationofnancialstatementsandisoftheviewthat
Companyhasappropriateprocessesinplacetoidentifyand takenecessary actions to minimise any unfavorablebusiness
impact.Lackofforeignexchangeliquidityinthebankingsectorhasresultedindelayedforeignsupplierpaymentswhetherfor
capitalorconsumablegoodscreatingchallengesinsustainingthesmoothbusinessoperations.However,Companyhastaken
necessary measures to face such challenges to ensure continous operations.
As per the accounting policies, the Company reviewed the carrying values of property, plant and equipment, intangible assets,
inventory, trade and other receivables as at the reporting date, especially the impact the current economic condition could
have on these assets and determined that no impairment is necessary. Further, the Company also reviewed the medium term
businessplansandissatisedthatnecessaryproceduresareinplacetomitigateanyadverseimpactontheoperationsandto
safeguard assets.
Hence,theBoardofDirectors,isoftheviewthattheeconomicconditionsinthecountryhavenotsignicantlyimpactedCompany
performancefortheyearunderreview.TheBoardissatisedthattheCompanyhasbusinessplanswithadequateresources
tocontinuethebusinessandmitigatetherisksforthenext12monthsfromthedateofapprovalofthesenancialstatements
NOTES TO THE FINANCIAL STATEMENTS
TAL LANKA HOTELS PLC | Annual Report 2022/23
65
NOTES TO THE FINANCIAL STATEMENTS
30. ASSETS PLEDGED AS SECURITY
The following assets have been pledged as security for the borrowings :
31. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Company's capital management objectives are:
- to ensure the Company’s ability to continue as a going concern
-toprovideanadequatereturntoshareholdersbypricingproductsandservicesinawaythatreflectsthelevelofriskinvolved
in providing those goods and services.
The Company monitors capital on the basis of the carrying amount of equity, less cash and cash equivalents as presented in the
statementofnancialposition.
ManagementassessestheCompany’scapitalrequirementsinordertomaintainanefcientoverallnancingstructurewhile
avoidingexcessiveleverage.ThistakesintoaccountthesubordinationlevelsoftheCompany’svariousclassesofdebt.The
Companymanagesthecapitalstructureandmakesadjustmentstoitinthelightofchangesineconomicconditionsandtherisk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount
of dividends paid to shareholders or re-lease the property to reduce debt.
32. CONTINGENT LIABILITIES
Inthenormalcourseofbusiness,theCompanymakesvariouscommitmentsandcertaincontingentliabilitieswithlegalrecourse
to its third parties. No material losses are anticipated as a result of such transactions.
Nature of assets Nature of liability
Value of pledged assets
as at 31st March Included under
2023
Rs.
2022
Rs.
All machinery and
equipment, leasehold
land,buildings,xtures
andttings
Primary concurrent
mortgage against loans
obtainedfromHNBand
interest thereon
6,392,235,567 6,602,609,464
Property, plant and
equipment and
leasehold property
Leasesholdlandand
building
Overdraftfacility
30,000,000 30,000,000
Property, plant and
equipment and
leasehold property
Leasesholdlandand
building
Credit facility
-
4,000,000
Property, plant and
equipment and
leasehold property
FixeddepositwithHNB Overdraftfacility -
387,640,000
Investments in Fixed
Deposits
2023
Rs.
2022
Rs.
- Guarantees outstanding
3Mn 6.6Mn
TheamountdisclosedrepresentsthebankguaranteesobtainedbytheCompany.Theextenttowhichanoutflowoffundswillbe
required is dependent on the future operations of the Company being more or less favorable than currently expected.
BankguaranteewasissuedbyHattonNationalBankforRs.3,047,385/-toAirportandAviationServices(SriLanka)Limitedon
behalfofTALLankaHotelsPLCon6November2019.Thiswillbeeffectivefrom6November2019to31December2022and
then it was further extended till 31 December 2023.
AS AT 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
66
32.1 Pending litigations
a)ThereareelevencasesledbytheColomboMunicipalCouncilattheMaligakandaMagistrateCourtforoperatingarestaurant
without obtaining a requisite license in the years 2010 (14148/M), 2011 (15619/M), 2012 (18608/M), 2013 (28129/14), 2014
(16019/15), 2015 (15737/16), 2016 (15725/17), 2017 (15588/18), 2018 (15264/19), 2019 (5216/20) and 2020 (7572/21).
TheHon.MagistratedeliveredjudgmentndingthehotelguiltyoftheoffenceandorderinganeofLKR.100/-foreachcase
(TotalofLKR1100/-),whichhasalreadybeenpaid,onthedirectionoftheHon.Magistrate.
AnappealhasbeenledforeachcasechallengingtheJudgmentandthesameisawaitinglistingbeforetheHighCourt.
b)Thewritapplication(759/2010)wasledbytheCompanychallenging,interalia,thedecisiontakenbyColomboMunicipal
Counciltolevylicensefeesequivalentto1%oftheannualturnoverasapre-conditiontoissueAnnualTradeLicenseforyears
2008, 2009 and 2010 in respect of the restaurant operated at the hotel premises.
TheirLordshipsoftheCourtofAppealgaveJudgmenton19thSeptember2019dismissingtheapplication,andordering
costs.CostshavenotbeenquantiedbytheirLordshipsintheJudgment.
AnappealhasbeenledchallengingtheJudgmentoftheCourtofAppealtotheSupremeCourt.Thematterispending
support of the same.
33. COMMITMENTS
Financial commitments
There 
Capital commitments
There were no material capital commitments outstanding at the end of the reporting period.
34. RELATED PARTY DISCLOSURES
34.1 Parent and ultimate controlling party
TheCompany’sparentcompanyisTALHotels&ResortsLimited,HongKong(formerlyknownasTajAsiaLimited).
34.2 Key Management Personnel
RelatedPartiesincludeKeyManagementPersonneldenedasthosepersonshavingauthorityandresponsibilityforplanning,
directing and controlling the activities of the company. Key Management Personnel include members of the Board of Directors
of the Company. The directors during the year are as follows :
Mr. G. Sanjeevi - Chairman
Mr. B.K. Chaudhary
Mr. R. De Mel
Mr. R.K. Chaudhary
Mr.T.DeZoysa
Mr.V.Govindasamy
Mr.P.Verma
Mr. S. Datta
Mr. P. Sengupta
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
67
34. RELATED PARTY DISCLOSURES (CONTD.)
Mr.B.K.Chaudhary,Mr.R.K.Chaudhary,Mr.V.Govindasamy,Mr.T.DeZoysaareDirectorsandMr.S.DattaistheHeadofTAL
Hotels&ResortsLimitedwithwhomTALLankaHotelsPLChasenteredintoaHotelOperatingAgreement.TheManagement
Fees comprising of a Basic Fee of Rs. 70,370,974/-(2021/2022 - Rs 34,346,976/-) and an Incentive Fee of Rs. 1,398,676/-
(2021/2022-Nil)arepayabletoTALHotels&ResortsLimitedfortheperiodunderreview.
Mr.V.GovindasamywhoistheDirectoroftheCompanyisalsoaDirectorofWatawalaTeaCeylonLimitedandSunshineConsumer
LankaLtd.DuringtheyeartheCompanyhaspurchasedteafromWatawalaTeaCeylonLimitedforRs.1,826,885/-(2021/2022-
Rs.64,656/-)andSunshineConsumerLankaLtd.Rs199,036/-(2021/2022-Rs.1,307,274/-).HeisalsoaDirectorinTata
CommunicationsLankaLimitedfromwhomwehavereceivedrentalincomeofRs.14,989,657/-(2021/2022-Rs.13,626,884/-).
Mr.V.GovindasamyisalsoaMemberofColomboClubLimitedfromwherewehaverentalincomeofRs9,450,000/-(2021/2022
-Rs.9,000,000/-)andF&BincomeofRs36,419,011/-(2021/2022-Rs17,095,505/-).
Mr.R.DeMelwhoistheDirectoroftheCompanyisalsoaDirectorofNationsTrustBankPLC.Duringtheyear,theCompany
has made outward fund transfers for Rs. 72,500,000/- and received inward remittances on credit card transactions for Rs.
75,050,270/-.
NOTES TO THE FINANCIAL STATEMENTS
34.3 Key Management Personnel compensation
2023
Rs.
2022
Rs.
Directors fees
1,542,700 1,212,006
34.4 Related party transactions
Related Company Relationship Nature of Transactions
Net
transactions
during the year
Balance as at
31st March
2023
Balance as at
31st March
2022
Debit/(Credit)
Rs.
Debit/(Credit)
Rs.
Debit/(Credit)
Rs.
TheIndianHotels
Co.Ltd
Parent Company Reimbursement Expenses (9,765,596) (12,143,892) (2,378,295)
LankaIsland
ResortsLtd
Group Company Reimbursement Expenses
Re Charged Expenses
(782,016)
202,591
(787,484) (208,059)
TAJExotica
Maldives Resort
(Pvt)Limited
Group Company
Reimbursement Expenses
Re Charged Expenses
(5,546,115)
3,360,706
(2,185,409) -
TAJCoralReef&
Spa(Pvt)Limited
Group Company Reimbursement Expenses
Re Charged Expenses
(12,670,316)
13,921,185
1,250,869 -
VivanthaColombo
Airport Garden
Hotel
Group Company
Reimbursement Expenses
Re Charged Expenses
(7,580,560)
7,921,883
341,323 -
PIEMHotels
Limited
Group Company N/A - 42,071 42,071
TALHotelsand
ResortsLimited
Parent Company
Management fee (71,769,650) (172,497,663) (105,543,470)
Settlement of expenses 4,815,457 - -
Loanreceived - (856,335,221) (774,848,889)
Exchange difference 81,486,332 - -
Interest payable on unsecured loan
54,010,729 (86,361,784) (34,165,121)
Exchange difference (1,814,066) - -
IHOCOB.V Group Company Loanreceived (127,644,250) (127,644,250) -
Transactions with related parties are carried out in the ordinary course of business have been reviewed and approved by the
Related Party Transaction Review Committee of the company. All these transactions were entered into with these related parties
onanarm'slengthbasisundernormalcommercialterms&conditions.Noexpensehasbeenrecognizedinthecurrentorprior
year for bad and doubtful debts in respect of the amount owed by related parties. No guarantees were given or received for the
transactions.Thereareno relatedparties or relatedpartytransactionsotherthan those innote17,24 and 27inthenancial
statements.
AS AT 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
68
NOTES TO THE FINANCIAL STATEMENTS
34.5 Non-recurrent related party transactions
There were no non-recurrent related party transactions which in aggregate value exceeds 10% of the equity or 5% of the total
assets whichever is lower of the Company as per 31 March 2023 audited nancial statements, which required additional
disclosuresinthe2023AnnualReportunderColomboStockExchangelistingRule9.3.2andCodeofBestPracticesonRelated
Party Transactions under the Securities and Exchange Commission Directive issued under Section 13(c) of the Securities and
Exchange Commission Act.
34.6 Recurrent related party transactions
There were no recurrent related party transactions which in aggregate value exceeds 10% of the gross revenue of the Company
asper 31March2023 auditednancialStatements, whichrequiredadditionaldisclosuresin the2023Annual Reportunder
ColomboStockExchangelistingRule9.3.2andCodeofBestPracticesonRelatedPartyTransactionsundertheSecuritiesand
Exchange Commission Directive issued under Section 13(c) of the Securities and Exchange Commission Act.
35. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT
35.1 
Financial instruments measured subsequently on the ongoing basis either at fair value or amortized cost. The summary of
signicantaccountingpoliciesdescribeshowtheclassesofnancialinstrumentsaremeasured,andhowincomeandexpenses,
including fair value gains and losses, are recognized.
Thefollowingisadescriptionofhowfairvaluesaredeterminedfornancialinstrumentsthatarerecordedatfairvalueusing
valuationtechniques.Theseincorporatethecompany’sestimateofassumptionsthatamarketparticipantwouldmakewhen
valuingtheinstruments.TheCompanyusesthefollowinghierarchyfordetermininganddisclosingthefairvalueofnancial
instruments by valuation techniques.
Level 1 : categoryof nancialassetsthat aremeasuredin wholeorin partybyreferencetopublishedquotesinan active
market
Level 2 : othertechniquesforwhichallinputswhichhaveasignicanteffectontherecordedfairvalueareobservable,either
directly or indirectly
Level 3 : techniqueswhichuseinputsthathaveasignicanteffectontherecordedfairvaluethatarenotbasedonobservable
marketdata.
Thetablebelowshowsthecarryingamountsandfairvaluesofnancialassetsandnancialliabilities,includingtheirlevelsin
thefairvaluehierarchy.Itdoesnotincludefairvalueinformationofnancialassetsandnancialliabilitiesnotmeasuredatfair
value if the carrying amount is reasonable approximation of fair value.
34. RELATED PARTY DISCLOSURES (CONTD.)
As at 31st March 2023
Note
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Financial assets
- Financial assets measured
at FVOCI
InvestmentsinLankaIsland
ResortsLimited
14 17,297,591 -
-
17,297,591
- Assets carried at amortized cost
Trade and other receivables
16 219,079,479 -
-
-
Amounts due from related parties
17 1,634,263 -
-
-
Deposits
18 35,305,864 -
-
-
Investment in Fixed Deposits
19 85,245,161 -
-
-
Cash and cash equivalents
20 222,789,176 -
-
-

581,351,535 -
-
17,297,591
AS AT 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
69
NOTES TO THE FINANCIAL STATEMENTS
35. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)
As at 31st March 2022
Note
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Financial assets
- Financial assets measured
at FVOCI
InvestmentsinLankaIsland
ResortsLimited
14 18,694,510
- - 18,694,510
- Assets carried at amortized cost
Trade and other receivables
16 137,693,801
- - -
Amounts due from related parties
17 1,634,263
- - -
Deposits
18 39,326,450
- - -
Investment in Fixed Deposits
19 808,128,096
- - -
Cash and cash equivalents
20 192,195,910
- - -

1,197,673,030
- - 18,694,510
As at 31st March 2023
Note
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Financial liabilities
- Liabilities carried at
amortized cost
Interest bearing borrowings 24 4,433,394,136 - - -
Trade and other payables 26 724,337,628 - - -
Amounts payable to
related parties
27 188,463,021 - - -
Totalnancialliabilities 5,346,194,785 - - -
As at 31st March 2022
Note
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Financial liabilities
- Liabilities carried at
amortized cost
Interest bearing borrowings 24 4,623,965,285 - - -
Trade and other payables 26 480,809,650 - - -
Amounts payable to
related parties
27 108,129,824 - - -
BankOverdraft 20 101,228,267 - - -
 5,314,133,026 - - -
AS AT 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
70
35. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)
35.1.1 
Carrying values of nancial assets and liabilities that have a short term maturity such as tradeand other receivables and
payables,cash and cash equivalents are reasonable approximation of their fair value. Therefore, fair value hierarchy is not
applicable.
35.2 Financial Risk Management

35.3. Credit risk
35.4. Liquidity risk
35.5. Market risk
Risk Management Framework
RiskmanagementoftheCompanyisthesystematicprocessofidentifying,quantifyingandmanagingallrisksandopportunities
thatcanaffecttheachievementoftheTALLankaHotelsPLCstrategicandnancialgoals.
Financial instruments held by the Company, principally comprise of cash, trade and other receivables, trade and other payables,
loans and borrowings and investments held under FVOCI category. The main purpose of these nancial instruments is to
managetheoperating,investingandnancingactivitiesoftheCompany.
The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management
framework.
FinancialriskmanagementoftheCompanyiscarriedoutbasedonguidelinesestablishedbythenancedivisionwhichcomes
underthepurviewoftheBoardofDirectorsoftheCompany.Thenancedivisionidenties,evaluatesandmitigatesnancialrisk
incloseco-operationwiththeGroup’snancedepartment.
35.3 Credit risk
The Company trades only with recognized, creditworthy third parties. It is the Company’s policy that all clients who wish to trade
oncredittermsaresubjecttocreditvericationprocedures.Inaddition,receivablebalancesaremonitoredonanongoingbasis
withtheresultthattheCompany’sexposuretobaddebtsisnotsignicant.
WithrespecttocreditriskarisingfromtheothernancialassetsoftheCompany,suchascashandcashequivalents,Financial
Assets measured at FVOCI, the company’s exposure to credit risk arises from default of the counterparty. The Company
managesitsoperationstoavoidanyexcessiveconcentrationofcounterpartyriskandtheCompanytakesallreasonablesteps
toensurethatthecounterpartiesfulltheirobligations.
The maximumriskpositionsofnancialassetswhicharegenerallysubjecttocreditriskareequaltotheircarryingamounts.
Based on the review of their past performance and credit worthiness the Company has obtained deposits and advances from its
major customers.
The requirement for impairment is analyzed at each reporting date on an individual basis for major customers. In order to
mitigatesettlementandoperationalrisksrelatedtocashandcashequivalents,theCompanyusesseveralbankswithacceptable
ratings for its deposits.
NOTES TO THE FINANCIAL STATEMENTS
(a) The maximum exposure to credit risk at reporting date
Notes 2023
Rs.
2022
Rs.
Trade receivables 16 218,318,387 129,467,730
Otherreceivables 16 761,092 8,226,071
Amounts due from related parties 17 1,634,263 42,071
Deposits 18 35,305,864 39,326,450
Investment in Fixed Deposits 19 85,245,161 808,128,096
Cashatbank 20 212,209,045 158,341,163
553,473,812 1,143,531,581
FOR THE YEAR ENDED 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
71
NOTES TO THE FINANCIAL STATEMENTS
35.3 Credit risk (Contd.)
(b) The aging of the trade receivable at the reporting date
Gross Receivables Impairment Allowance Carrying Value
2023 2022 2023 2022 2023 2022
Past due 0-30 days
147,392,268 120,009,606 956 2,258,380 147,391,312 117,751,226
Past due 31-60 days
58,073,187 7,574,068 31,822 408,042 58,041,365 7,166,026
Past due 61-90 days
4,951,952 3,657,487 50,432 324,389 4,901,520 3,333,098
Past due 91-120 days
5,515,610 94,300 278,509 16,657 5,237,101 77,643
Past due 121-180 days
2,605,282 870,867 845,322 220,108 1,759,960 650,759
More than 180 days
9,871,292 4,889,787 8,884,163 4,400,809 987,129 488,978
Total
228,409,591 137,096,115 10,091,204 7,628,385 218,318,387 129,467,730
(c) Movement in the allowance for impairment in respect of Trade Receivables
Balance at the beginning of the year 7,628,385 4,454,364
Allowance for impairment recognized during the year 2,462,819 3,174,021
Balance at the end of the year 10,091,204 7,628,385
Impairment for trade receivables is established based on expected credit loss method. The main component of this allowance
isaspeciclosscomponentthatrelatestoindividuallysignicantexposuresbasedonagingoftheoutstanding's.Thelossrate
calculated based on the historical provision matrix is adjusted based on the future calibrated probability of default and the loss
givendefault.ForwardlookingfactorsthataffectcustomerdefaultratesandmacroeconomicdatasuchasGDPisconsidered
in calculating the probability of default.
Trade receivables are written off (i.e. derecognized) when there is no reasonable expectation of recovery. Failure to engage with
the Company on alternative payment arrangement amongst other is considered indicators of no reasonable expectation of
recovery.
(e) Amounts due from related parties
Amounts due from related Companies are expected to be settled within one year from the reporting date hence the discounting
impact would be immaterial. Therefore carrying amount approximate the fair value as at the reporting date. Based on historic
default rate the Company believes that, apart from the above, no impairment allowance is necessary in respect of Amounts Due
from Related Parties for past dues or past due by up to 365 days.
FOR THE YEAR ENDED 31
ST
MARCH 2023
2022
Rs.
2023
Rs.
TAL LANKA HOTELS PLC | Annual Report 2022/23
72
NOTES TO THE FINANCIAL STATEMENTS
35.4 Liquidity risk
LiquidityriskistheriskthattheCompanywillencounterdifcultyinmeetingtheobligationsassociatedwithitsnancialliabilities
thataresettledbydeliveringcashoranothernancialasset.
TheCompany’spolicyistoholdcashandundrawncommittedfacilitiesatalevelsufcienttoensurethatthecompanyhas
available funds to meet its medium term capital and funding obligations and to meet any unforeseen obligations. The Company
holdscashandundrawncommittedfacilitiestoenablethecompanytomanageitsliquidityrisk.
TheCompanymonitorsitsrisktoashortageoffundsusingadailycashmanagementprocess.Thisprocessconsidersthe
maturityofboththeCompany’snancialinvestmentsandnancialassets(e.g.accountsreceivable,othernancialassets)and
projected cash flows from operations.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of multiple sources
offundingincludingbankloansandoverdrafts.
35.3 Credit risk (Contd.)
(f) Balances with Banks
Cash at Bank having credit ratings
2023
Rs.
2022
Rs.
A(lka) 123,061,230 129,368,192
A-(lka) 5,627,437 3,079,537
AAA(lka) 83,520,378 25,893,434
BBB-(lka) 212,209,045 158,341,163
Investment in FD having credit ratings 85,245,161 808,128,096
A(lka) 85,245,161 808,128,096
(a) Exposure to liquidity risk
Thefollowingaretheremainingcontractualmaturitiesofnancialliabilitiesatthereportingdate.Theamountsaregrossand
undiscounted, and include contractual interest payments and exclude the impact of netting agreements.
31st March 2023 Contractual maturities
Carrying
amount
Rs.
Total
Rs.
Less than 1
Year
Rs.
1 - 2 Years
Rs.
2 - 5 Years
Rs.
Trade and other payables 771,548,431 771,548,431 771,548,431 - -
Amounts payable to related parties 188,463,021 188,463,021 188,463,021 - -
Interest-bearing borrowings 4,433,394,136 5,476,832,168 687,883,135 4,334,488,020 454,461,013
5,393,405,588 6,436,843,620 1,647,894,587 4,334,488,020 454,461,013
FOR THE YEAR ENDED 31
ST
MARCH 2023
TAL LANKA HOTELS PLC | Annual Report 2022/23
73
35. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)
NOTES TO THE FINANCIAL STATEMENTS
31st March 2022 Contractual maturities
Carrying
amount
Rs.
Total
Rs.
Less than 1
Year
Rs.
1 - 2 Years
Rs.
2 - 5 Years
Rs.
Trade and other payables 364,511,099 364,511,099 364,511,099 - -
Amounts payable to related parties 108,129,824 108,129,824 108,129,824 - -
Interest-bearing borrowings 4,623,965,285 4,903,723,686 994,928,023 1,422,665,301 2,486,130,362
BankOverdraft 101,228,267 109,175,055 101,228,267 - -
5,197,834,475 5,485,539,664 1,568,797,213 1,422,665,301 2,486,130,362
35.5 Market Risk
Marketriskistheriskthatthefairvalueoffuturecashflowsofnancialinstrumentswillfluctuateduetothechangesinmarket
prices.Mainlythechangesinmarketprices,suchasforeignexchangeratesandinterestrateswillaffectthecompany’sincome
orthevalueofitsholdingsofnancialinstruments.Theobjectiveofmarketriskmanagementistomanageandcontrolmarket
riskexposurewithinacceptableparameters,whileoptimizingthereturn.
35.5.1 Foreign currency risk
Theforeigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofanancialinstrumentfluctuatingduetochangesin
foreignexchangerates.TheCompanyisexposedtoforeigncurrencyriskonrevenue,purchases,borrowingsandcashdeposits
denominatedincurrenciesotherthanthefunctionalcurrencyoftheCompany.Thecurrenciesgivingrisetothisriskareprimarily
US Dollars.
(a) Exposure to currency risk
ThesummaryquantitativedataabouttheCompany'sexposuretocurrencyriskasreportedtothemanagementoftheCompany
is as follows,
Financial Assets As at 31st March 2023 As at 31st March 2022
Amount in
USD
Amount in
LKR
Amount in
USD
Amount in
LKR
Investments in Fixed Deposits 250,000 80,787,500 2,650,000 774,860,000
Interest Receiavbles on Fixed
Deposits
13,795 4,457,661 113,776 33,268,096
Cash and cash equivalents 279,572 90,343,692 463,988 135,669,957
529,572 171,131,193 3,227,764 943,798,053
Financial Liability
Loansandborrowings 10,345,451 3,343,132,298 12,495,561 3,653,702,036
InterestPayablesonLoansandborrowings 267,250 86,361,783 905,273 264,701,755
10,345,451 3,429,494,081 13,400,834 3,918,403,791
Net Finance Liability exposure (9,815,879) (3,258,362,888) (10,173,070) (2,974,605,738)
Closing average exchange rate as at 31st March 2023 is Rs. 323.15/- (2021/2022- Rs.292.40/-).
FOR THE YEAR ENDED 31
ST
MARCH 2023
35.4 Liquidity risk (Contd.)
a) Exposure to liquidity risk
TAL LANKA HOTELS PLC | Annual Report 2022/23
74
NOTES TO THE FINANCIAL STATEMENTS
 Impact on Equity, net of tax
As at 31st March 2023 Strengthening
Rs.
Weakening
Rs.
Strengthening
Rs.
Weakening
Rs.
Impact of change in 1% USD rate (32,583,629) 32,583,629 (22,808,540) 22,808,540
Impact of change in 15% USD rate (488,754,433) 488,754,433 (342,128,103) 342,128,103
As at 31st March 2022
Impact of change in 1% USD rate (30,078,738) 30,078,738 (25,867,715) 25,867,715
Impact of change in 15% USD rate (451,181,075) 451,181,075 (388,015,725) 388,015,725
35.5.1 Foreign currency risk (Contd.)
(b) Sensitivity to foreign exchange risk
The Company, as at the reporting date holds nancial instruments denominated in currencies other than its functional /
reportingcurrency.AreasonablepossiblestrengtheningorweakeningoftheUSDollar(USD)againstSriLankaRupee(LKR)as
atthereportingdatewouldhaveaffectedthemeasurementofUSDdenominatedAssetsandLiabilitiesandaffectedequityand
protandlossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticularinterestrates,remain
constant.
TheLKRhasdepreciatedagainstUSDsignicantlyafterthereportingdate,thismayleadtosubstantialnegativeimpactonthe
futureprotsoftheCompany.
35.5.2 Interest rate risks
Interest rate risk mainly arises as a result of the Company having interest sensitive assets and liabilities which are directly
impactedbychangesintheinterestrates.Cashflowinterestrateriskistheriskthatthefuturecashflowsofanancialinstrument
willfluctuate because of changes in marketinterest rates. Fairvalueinterestrate risk is the riskthatthe value of a nancial
instrumentwillfluctuatebecauseofchangesinmarketinterestrates.Themanagementmonitorsthesensitivitiesonregularbasis
andensuresthatsuchrisksaremanagedonatimelymanner.
Theinterestrateshaveincreasedsignicantlyafterthereportingdate,thismayleadtosubstantialnegativeimpactonthefuture
protsoftheCompany.
35. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)
TAL LANKA HOTELS PLC | Annual Report 2022/23
75
NOTES TO THE FINANCIAL STATEMENTS
As at 31st March 2023 As at 31st March 2022
Variable
interest rate
Fixed interest
rate
Total
Variable
interest rate
Fixed interest
rate
Total
Financial Assets
Investments in Fixed Deposits
- 85,245,161 85,245,161 - 808,128,096 808,128,096
- 85,245,161 85,245,161 - 808,128,096 808,128,096
Financial liabilities
Loansandborrowings
3,470,776,741 876,201,611 4,346,978,352 3,257,853,151 1,074,848,886 4,332,702,037
BankOverdraft
- - - 101,228,267 - 101,228,267
3,470,776,741 876,201,611 4,346,978,352 3,359,081,418 1,074,848,886 4,433,930,304
Maximum exposure
(3,470,776,741) (790,956,451) (4,261,733,191) (3,359,081,418) (266,720,790) (3,625,802,208)
(b) Sensitivity analysis
The following table shows the estimated impact on profitability and equity by fluctuation of interest rates assuming that
all other variables remain constant on the following financial assets. Floating rate instruments expose the Company to

As at 31st March 2023
Variable Rate
As at 31st March 2022
Variable Rate
Increase in 100 basis points
Financial assets / liabilities
Impact on PBT
Rs.
Impact on equity
Rs.
Impact on PBT
Rs.
Impact on equity
Rs.
Loansandborrowings
(34,707,767) (24,295,437) (32,578,532) (28,017,538)
BankOverdraft
- - (1,012,283) (870,563)
(34,707,767) (24,295,437) (33,590,815) (28,888,101)
Decrease in 100 basis points
Financial assets / liabilities
Loansandborrowings
34,707,767 24,295,437 32,578,532 28,017,538
BankOverdraft
- - 1,012,283 870,563
34,707,767 24,295,437 33,590,815 28,888,101
35.5.2 Interest rate risks (Contd.)
35. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)
(a) Exposure to interest rate risk
TheinterestrateproleoftheCompany'sinterestbearingnancialinstrumentsasreportedtothemanagementofthe
Company is as follows,
TAL LANKA HOTELS PLC | Annual Report 2022/23
76
NO. OF SHARES HELD NO. OF SHAREHOLDERS TOTAL HOLDINGS PERCENTAGE
FOREIGN LOCAL FOREIGN LOCAL FOREIGN LOCAL
1 To 1000 57 9,013 26,507 1,843,287 0.02% 1.32%
1001 To 10,000 19 922 83,009 3,182,077 0.06% 2.28%
10,001 To 100,000 4 124 191,627 3,207,884 0.14% 2.30%
100,001 To 1,000,000 2 9 490,875 2,643,138 0.35% 1.89%
1,000,001 & Above 3 3 117,627,220 10,341,870 84.24% 7.41%
TOTAL 85 10,071 118,419,238 21,218,256 84.80% 15.20%
GRAND TOTAL 10,156 139,637,494 100%
NO. OF SHARES HELD NO. OF SHAREHOLDERS TOTAL HOLDINGS PERCENTAGE
COMPANIES MEMBERS COMPANIES MEMBERS COMPANIES MEMBERS
1 To 1000 88 8,982 29,257 1,840,537 0.02% 1.32%
1001 To 10,000 44 897 241,499 3,023,587 0.17% 2.17%
10,001 To 100,000 31 97 1,069,928 2,329,583 0.77% 1.67%
100,001 To 1,000,000
7 4 2,494,770 639,243 1.79% 0.46%
1,000,001 & Above
6 - 127,969,090 - 91.64% 0.00%
TOTAL 176 9,980 131,804,544 7,832,950 94.39% 5.61%
GRAND TOTAL 10,156 139,637,494 100%
SHARE AND INVESTOR INFORMATION
TAL LANKA HOTELS PLC
ANALYSIS OF SHAREHOLDERS ACCORDING TO THE NO: OF SHARES AS AT 31ST MARCH 2023
(LOCAL : FOREIGN)
ANALYSIS OF SHAREHOLDERS ACCORDING TO THE NO: OF SHARES AS AT 31ST MARCH 2023
(COMPANY: MEMBER)
2023
Rs.
2022
Rs.
Highest 23.20 27.00
Lowest 9.00 11.10
Closing 15.20 13.20
1.) Share Trading Information for the year ended 31st March
TAL LANKA HOTELS PLC | Annual Report 2022/23
77
Name of Shareholder NO.OF SHARES
AS AT
31.03.2023
% OF ISSUED CAPITAL
AS AT
31.03.2023
1 TALHOTELSANDRESORTSLIMITED 81,181,580 58.14
2 IHOCOBV 34,375,640 24.62
3 EMPLOYEE'SPROVIDENTFUND 7,437,832 5.33
4 MOUGININVESTMENTCOMPANYLIMITED 2,070,000 1.48
5 ASSOCIATEDELECTRICALCORPORATIONLTD 1,600,000 1.15
6 SAMPATHBANKPLC/MR.ARUNASALAMSITHAMPALAM 1,304,038 0.93
7 E.W.BALASURIYA&CO.(PVT)LTD 901,658 0.65
8 BANKOFCEYLONNO.1ACCOUNT 447,400 0.32
9 HALLSVILLETRADINGGROUPINC. 343,029 0.25
10 ASHANDEZOYSAANDCOMPANYPVTLIMITED 265,000 0.19
11 Mr.KANTHIMATHINATHANMUTHUVINAYAGAM 232,232 0.17
12 COMMERCIALBANKOFCEYLONPLCA/CNO.04 212,390 0.15
13 PEOPLE'SLEASING&FINANCEPLC/L.P.HAPANGAMA 210,861 0.15
14 MR.ASHISHDUBEY 147,846 0.11
15 MR.NAWALAGEJOSEPHHIRANMAHINDACOORAY 137,165 0.10
16 MRS.BINANTHISHAMANIRASANAYAGAM 122,000 0.09
17 SENKADAGALAFINANCEPLC 114,432 0.08
18 NEGOMBOHOTELSLIMITED 100,000 0.07
19 SAMPATHBANKPLC/MR.ABISHEKSITHAMPALAM 98,500 0.07
20 MR. PRIYANK GUPTA 92,600 0.07
TOTAL 131,394,203 94.10
2.) First Twenty Shareholders as at 31st March 2023
SHARE AND INVESTOR INFORMATION
TAL LANKA HOTELS PLC | Annual Report 2022/23
78
4.) Directors' shareholding as at 31st March 2023
No. of shares
2022
No. of shares
Mr. G. Sanjeevi NIL NIL
Mr. B.K. Chaudhary NIL NIL
Mr.TilakDeZoysa NIL NIL
Mr.P.S.Verma NIL NIL
Mr.V.Govindasamy NIL NIL
Mr. R.K. Chaudhary NIL NIL
Mr. R. De Mel NIL NIL
Mr. P. Sen Gupta NIL NIL
Mr. S. Datta NIL NIL
3.) Percentage of Public Holding as at 31st March 2023
17.24%
TotalNo.ofShareholdersRepresentinPublicHolding
FloatAdjustedMarketCapitalization 10,154
366,020,164.80
The Company complies with option 2 of the Listing Rules 7.13.1 (b) of the Listing Rules of Colombo Stock Exchange
SHARE AND INVESTOR INFORMATION
TAL LANKA HOTELS PLC | Annual Report 2022/23
79
SIX YEARS SUMMARY
Year ended 31st March
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Accommodation
1,530,247 1,430,313 1,185,957 67,871 481,785 1,024,910
Food and beverage
1,137,728 1,167,284 1,094,976 349,175 571,263 1,208,988
Shop rentals 47,247 52,354 49,765 32,937 41,772 55,603
Other 59,392 40,942 60,885 34,220 52,602 71,873
Total Revenue 2,774,615 2,690,893 2,391,582 484,203 1,147,421 2,361,374
Cost of sales / Direct Costs -2,059,147 -2,125,783 -1,967,812 -1,098,568 -1,409,814 -2,179,390
 715,467 565,111 423,770 -614,365 -262,393 181,985
Otheroperatingincome 34,885 27,462 74,006 17,795 312 894
Marketingexpenses -102,711 -93,328 -89,678 -41,267 -44,306
-66,198
Administrative expenses -338,606 -358,246 -378,562 -250,977 -257,422 -581,733
 309,035 140,999 29,537 -888,815 -563,810 -465,052
Finance income - - 1,962 6,992 22,382 21,605
Finance expenses -180,798 -385,771 -263,586 -179,861 -1,114,927 -572,241
Net Finance expenses - - -261,624 -172,869 -1,092,545 -550,636
 128,236 -244,772 -232,088 -1,061,683 -1,656,355 -1,015,688
Income tax expense -33,362 -38,446 -27,517 -33,523 -58,552 -275,506
Prot/(Loss)fortheyear 94,875 -283,217 -259,604 -1,095,206 -1,714,907 -1,291,194
Othercomprehensiveincome
Gain or Revaluation of building. net of tax - - - 490,424 555,785 -
Re-measurementgain/(losses)ondened
benetplans,netoftax
-25,469 -1,684 5,129 -13,451 13,671 -8,440
Fair value gain / (loss) on investments in equity
investmentsdesignatedasatFVOCI
-491 2,340 -747 -5,011 2,587 -978
Deferred Tax on revaluation due to change of
tax rate
- - - - - -320,654
Deferred Tax on fair value Reserve due to
change of tax rate
- - - - - -921
Other comprehensive income/(expense) -25,960 656 4,382 471,962 572,042 -330,993
for the year
Total comprehensive income / (expense) for
the year Operating results
68,915 -282,561 -255,222 -623,244 -1,142,865 -1,622,187
Share capital 1,396,375 1,396,375 1,396,375 1,396,375 1,396,375 1,396,375
Revaluation reserve 2,023,604 1,922,292 1,077,607 1,472,378 1,894,366 1,402,862
FairValuereserve 4,977 7,317 6,570 1,560 4,146 2,247
Accumulated loss -983,791 -1,170,843 -580,633 -1,593,638 -3,161,077 -4,289,862
Shareholders' funds 2,441,166 2,155,141 1,899,919 1,276,675 133,810 -1,488,378
Assets employed
Property,plant and equipment 4,679,436 4,658,607 4,294,719 4,502,112 4,768,522 4,390,347
Investments 19,618 22,218 21,388 156,117 826,823 17,298
Net current assets -286,556 -536,308 -221,567 -835,394 -1,180,053 -602,910
4,412,498 4,144,517 4,094,540 3,822,836 4,415,292 3,804,735
Longtermliabilities 1,971,332 1,989,376 2,194,621 2,546,161 4,281,482 5,293,114
Key indicators
Current ratio 0.65 0.45 0.75 0.206 0.29 0.54
Net assets per share 17.48 15.43 13.61 9.143 0.958 (10.659)
Marketpricepershare 16.9 9.4 7.7 12.30 13.20 15.20
Earnings/(Loss)pershare-basica 0.68 -2.03 -1.86 -7.843 -12.281 (9.25)
TAL LANKA HOTELS PLC | Annual Report 2022/23
80
Signed this.....................…day of.....................…Two Thousand and Twenty-Three.
Notes : 1. *Please delete the inappropriate words
2. Instructions as to completion are noted on the reverse hereof.
Form of Proxy - TAL LANKA HOTELS PLC
Company Number PQ 183
I/We*...................................................................................................................................................................................................................................
(Full name of Shareholders**) NIC No./Reg No. of Shareholder (**) ...................................................................................................................
..................................of.......................................................................................................................................................................................................
........................................................beingashareholder/shareholders*ofTALLANKAHOTELSPLCherebyappoint,
.............................................................................................................................................................................................................................................
…………………………………………………………..……………………………............................................................................. of ……………………………………………………………
…………………………………….......................................................................................................................................................................................................
or failing him/them
or failing him /her, Mr. G. Sanjeevi (Chairman of the Company), or failing him, one of the Directors of the Company, as *my/our proxy
to vote as indicated hereunder for *me/us and on *my/our behalf at the forty third (43rd) Annual General Meeting of the Company
tobeheldonFriday,15thofSeptember2023at10.30a.m.andateverypollwhichmaybetakeninconsequenceoftheaforesaid
meeting and any adjournment thereof:
…………………………………………………………
Signature of Shareholder
For
Against
1. To receive and consider the Annual Report of the Board of Directors together with the
Financial Statements of the Company for the year ended 31st March 2023 and the
Report of the Auditors thereon.
2. Topassanordinaryresolutiontore-appointMr.Tilak.DeZoysaasaDirectorwhohas
reached the age of seventy six (76 ) years.
3. To re-elect Mr. B. K. Chaudhary as a Director who retires by rotation in terms
of Article 86 of the Articles of Association.
4. Tore-electMr.V.GovindasamyasaDirectorwhoretiresbyrotationinterms
of Article 86 of the Articles of Association.
5. Tore-electMr.P.VermaasaDirectorwhoretiresbyrotationin
terms of Article 86 of the Articles of Association.
6. To re-elect Mr. Samrat Datta as a Director, who was appointed as a director of the
CompanybytheboardofdirectorsoftheCompanytollacasualvacancyintermsof
Article 93 of the Articles of Association of the Company
7. To re-apppoint Messrs KPMG, Chartered Accountants, as Auditors of the
Company and to authorize the Directors to determine their remuneration.
TAL LANKA HOTELS PLC | Annual Report 2022/23
81
INSTRUCTIONS ON COMPLETION OF THE FORM OF PROXY
1. Tobevalid,thecompletedformofproxyshouldbedepositedattheRegisteredOfceoftheCompany,No.25,GalleFace
Centre Road, Colombo 03 or emailed to deepa.perer[email protected] no later than 48 hours before the time of the meeting.
2. In perfecting the form of proxy, please ensure that all details are legible.
3. 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,athisdiscretion,mayvoteashethinkst.
4. In the case of a company/corporation, the letter of authorization must be signed by placing the common seal of the
company/corporation and attested in the manner prescribed by its articles of association.
5. Inthecaseofaproxysignedbytheattorney,thePowerofAttorneydocumentmustbedepositedattheRegisteredOfce,
No 25, Galle Face Centre Road, Colombo 03, for registration or emailed to deepa.perer[email protected].
TAL LANKA HOTELS PLC | Annual Report 2022/23
82
Form of Request
ANNUAL REPORT 2022/2023
TAL LANKA HOTELS PLC (PQ 183)
25, Galle Face Centre Road, Colombo 03, Sri Lanka.
To: The Secretary,
TalLankaHotelsPLC,
25, Galle Face Centre Road, Colombo 03.
IwouldliketoreceivetheprintedversionoftheAnnualReportofTalLankaHotelsPLC.
Full Name of
Shareholder
Number of Shares held
as at Date
Shareholder’s NIC/Pass-
port/Company Registra-
tion No.
Address
Contact Number
…................................……….
Signature
…................................……….
Date
Notes:
1. PleasecompletetheFormofRequestbyllinginlegiblytherequiredinformation,signinginthespace
provided,andllinginthedateofsignature.
2. Please forward the completed Form of Request to the address given above to reach the Company on or
before ……………………..
3. In the event, the shareholder is a company/corporate, the Form of Request should be signed under
commonsealorbyadulyauthorizedofcerofthecompanyinaccordancewithitsarticlesofassociation.
TAL LANKA HOTELS PLC | Annual Report 2022/23
83
Shareholder Registration Form
1. Full Name of the Shareholder :
……………………………………………………….………………………………………….…………………………………………………………………………………………………
……………………………………………………….………………………………………….…………………………………………………………………………………………………
2. Membership No. / CDS Account No :
……………………………………………………….………………………………………….…………………………………………………………………………………………………
3. Address of Shareholder :
……………………………………………………….………………………………………….…………………………………………………………………………………………………
……………………………………………………….………………………………………….…………………………………………………………………………………………………
4. NIC No./ P.P. No. / Co. Reg. No. of Shareholder :
……………………………………………………….………………………………………….…………………………………………………………………………………………………
5. Contact details of Shareholders
Telephone :…………………………………… Residence : ……………………………………
Ofce:……………………………………  Mobile:…………………………………..…
e-mail : …………………………………………………………………………..…………………………………..…………………………………..…………………………………
(Please print clearly)
6.Names/NICNo.ofJointholder/s(Ifany):
i. Name : ……………………………………………. NIC No. : ……………………………..
ii. Name : ……………………………………………. NIC No. : ……………………………..
…................…………………………. ………………………………….. ….…………………………………
Shareholder’sSignature/Date1stJointholder’sSignature/Date 1stJointholder’sSignature/Date
TAL LANKA HOTELS PLC | Annual Report 2022/23
84
INSTRUCTIONS AS TO COMPLETION
i. Shareholders are advised to complete the form legibly in order to facilitate their participation through the
online platform.
ii. The “WebLink”forparticipationattheAGMthroughtheonlineplatformwillbeforwardedtotheShareholder’s
above noted email address.
iii. In the case of a Company/Corporation, the Registration must be under its common seal which should be
afxedandattestedinthemannerprescribedbyitsArticlesofAssociation.
iv. In the case of the Registration form signed by an Attorney, the Power of Attorney must be deposited at the
RegisteredOfceoftheCompanyforregistration.
v. ThedulycompletedRegistrationFormmustbedepositedattheRegisteredOfceoftheCompanyatNo.25,
Galle Face Centre Road, Colombo 03, or e-mailed to “deepa.perer[email protected] ”, 5 days prior to the date
of the AGM.