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1. Reporting Entity
1.1 Corporate Information
Nawaloka Hospitals PLC (“Company”) is a quoted public company with limited liability incorporated in Sri Lanka under the provisions of the Companies Act No. 07 of 2007 and the ordinary shares of the Company are listed on the Colombo Stock Exchange.
The registered office and the principal place of business of the Company is located at No. 23, Deshamanya, H K Dharmadasa Mawatha, Colombo 02.
The consolidated Financial Statements as at and for the year ended 31 March 2025, comprise the Company (Parent Company) and its Subsidiaries (together referred to as the “Group” and individually as “Group entities”).
The Company does not have an identifiable parent of its own. The Company is the Ultimate Parent of the Group.
1.2 Principal Business Activities, Nature of Operations of the Group and Ownership by the Company in Its Subsidiaries and Associate
The principal business activities of the Company is to provide health and laboratory services.
Ownership as at |
Ownership as at |
|||
Entity |
Relationship |
Principal business activity |
31 March 2025 |
31 March 2024 |
New Nawaloka Hospitals (Pvt) Ltd. | Subsidiary | Provide health care services | 100% | 100% |
New Nawaloka Medical Centre (Pvt) Ltd. |
Subsidiary | 100% | 100% | |
Nawaloka Laboratories (Pvt) Ltd.* |
Subsidiary | Providing clinical laboratory services | 100% | 100% |
Nawaloka College of Higher Studies (Pvt) Ltd. |
Associate | Providing education services | 49.95% | 49.95% |
*Previously Nawaloka Green Cross Laboratories (Pvt) Ltd.
1.3 Number of Employees
Company | 350 | (2024 – 386) |
Group | 1,996 | (2024 – 1,926) |
2. Basis of Preparation
2.1 Statement of Compliance
The Consolidated Financial Statements of the Group and separate financial statements of the company comprise of Statement of Profit or Loss and Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Statement of Cash Flows together with the Material Accounting Policies and notes to the Financial Statements.
The Consolidated Financial Statements of the Group and the separate Financial Statements of the Company, have been prepared and presented in accordance with the Sri Lanka Accounting Standards (SLFRSs and LKASs), laid down by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka).
These Financial Statements, except for information on cash flows have been prepared following the accrual basis of accounting.
2.2 Statement of Presentation
Further, these Financial Statements have complied with the requirements of the Companies Act No. 07 of 2007 and appropriate disclosures as required by the listing rule of Colombo Stock Exchange (CSE).
2.3 Responsibility for Financial Statements
The Board of Directors of the Company is responsible for the preparation and presentation of the Financial Statements of the Group and the Company as per the provisions of the Companies Act No. 07 of 2007 and Sri Lanka Accounting Standards.
The Board of Directors acknowledges their responsibility for Financial Statements as set out in the “Annual Report of the Board of Directors”, “Statement of Directors Responsibility” and the certification on the Statement of Financial Position on page 105.
2.4 Approval of Financial Statements by the Board of Directors
The Financial Statements of the Group and the Company for the year ended 31 March 2025 (including comparatives for 2024), were approved and authorised for issue by the Board of Directors in accordance with Resolution of the Directors on 04 September 2025.
2.5 Going Concern
The Group’s Financial Statements have been prepared under the assumption of a going concern, as the Board of Directors is confident that the Group possesses sufficient resources to continue its operations into the foreseeable future. This confidence is based on directors’ comprehensive assessment, which takes into account the possible effects on the Group’s business operations, profitability, liquidity and capital. Refer to the Note 44 – Going Concern.
2.6 Materiality and Aggregation
Each material class of similar item is presented separately in the Financial Statements. Items of dissimilar nature or function are presented separately, unless they are immaterial as permitted by the LKAS 1 on “Presentation of Financial Statements”.
2.7 Comparative Information
The Financial Statements for the comparative periods comprise results for the 12 month period from 01 April 2023 to 31 March 2024. In this circumstance, the comparative information for the Statement of Financial Position, Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Cash Flow Statement and related notes are comparable with the current period.
3. Functional and Presentation Currency
Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entities operate (“the functional currency”). The consolidated Financial Statements are presented in Sri Lankan Rupees, which is the Company’s functional and presentation currency. All financial information presented in Rupees has been rounded to the nearest Rupee.
4. Use of Judgements and Estimates
In preparing these consolidated Financial Statements, Management has made judgements, estimates and assumptions that affect the application of the Group’s 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 recognised prospectively.
4.1 Judgement
Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated Financial Statements is included in the following Notes:
Note 17 – Leases: whether an arrangement contains a lease and lease classification; and Note 6.1 – Consolidation: whether the Group has de facto control over an investee.
4.2 Assumptions and Estimation Uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the year ended 31 March 2025 is included in the following Notes:
- Note 27 – Measurement of defined benefit obligations: key actuarial assumptions;
- Note 28 – Recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;
- Note 16 – Measurement of the useful lifetime of property, plant and equipment
- Note 16 – Valuation of building constructed on leasehold land
- Note 39/40 – Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.
- Note 44 – Uncertainties involved in the use of going concern assumption
Measurement of Fair Values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values.
The Management regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Management assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of SLFRS, including the level in the fair value hierarchy in which the valuations should be classified.
Significant valuation issues are reported to the Group’s Audit Committee. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised 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 categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
5. Basis of Measurement
The consolidated Financial Statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
Items |
Measurement basis |
Valuation of buildings constructed on leasehold land | Fair value |
Net defined benefit (asset) liability | Present value of the defined benefit obligation as explained in Note 27 |
Investment in unquoted shares | Fair value |
6. Material Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in these consolidated Financial Statements.
Set out below is an index of the material accounting policies, the details of which are available on the pages that follow.
6.1 Basis of Consolidation
Business Combinations
The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meet the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
The Group has an option to apply a “concentration test” that permits a simplified assessment of whether as acquired set of activities and assets not a business. The optional concentration test is met if substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Loss of Control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
6.2 Foreign Currency Translation
Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.
6.3 Impairment of Assets
6.3.1 Financial instruments and contract assets
The Group recognises loss allowances for ECLs on financial assets measured at amortised cost.
Loss allowances for trade receivables is always measured at an amount equal to lifetime Expected Credit Loss (ECL).
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group 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 Group's historical experience and informed credit assessment and including forward-looking information.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
Credit-impaired Financial Assets
At each reporting date, the Group/Company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for a security because of financial difficulties.
Presentation of Allowance for ECL in the Statement of Financial Position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
6.3.2 Non-Financial Assets
The carrying amounts of the Company’s and the Group’s non-financial assets, other than inventories are reviewed at each reporting date to determine such indication exists, and then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount.
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 asset or CGU. 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.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amounts of the assets in the CGU (group of CGUs) on a pro rata basis.
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 amortisation, if no impairment loss had been recognised.
7. New Accounting Standard Amendments Issued but not Effective as at the Reporting Date
A number of new accounting standards are effective for annual periods beginning on or after 01 April 2025. However the Group has not early adopted the following new or amended accounting standards in preparing these consolidated statements.
7.1 Lack of Exchangeability (Amendments to LKAS 21)
The amendments will require companies to provide new disclosures to help users to the impact of using on the Financial Statements. These disclosures might include;
- The nature and financial impact to the currency not being exchanges.
- The spot exchange rate used
- Risk to the company because the currency is not exchangeable
The amendment to LKAS 21 is not expected to have a significant impact on the Group Consolidated Financial Statements.
7.2 SLFRS S1 General Requirements for Disclosure of Sustainability related Financial Information and SLFRS S2 Climate-related Disclosures
SLFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information requires an entity to disclose information about its sustainability-related risks and opportunities that is useful to primary users of general-purpose financial reports in making decisions relating to providing resources to the entity.
SLFRS S2 Climate-related Disclosure is to require an entity to disclose information about its climate-related risks and opportunities that is useful to primary users of general-purpose financial reports in making decisions relating to providing resources to the entity.
These standards will become effective for the Group from 01 April 2025. No financial impact is expected on the Group.
8. Operating Segments
An operating segment is a component of the Group/Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group/Company’s other components. All operating segments’ operating results are reviewed regularly by the Group/Company's CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
8.1 Basis for Segmentation
The Group has the following strategic divisions, which are its reportable segments. These divisions offer different products and services, and are managed separately because they require different technology and marketing strategies.
The following summary describes the operations of each reportable segment.
Reportable segments |
Operations |
Hospital services | Provision of hospital services to inpatient and outpatient |
Pharmaceutical | Sale of pharmaceuticals |
Laboratories | Provision of laboratory services |
Radiology services | Provision of radiographic services |
The Group’s chief executive officer reviews the internal management reports of each division at least quarterly.
Segment performance is evaluated based on operating profits or losses which in certain respect, are measured differently from operating profits or losses in the consolidated Financial Statements. Income taxes are managed on a Group basis and are not allocated to operating segments.
8.2 Segment Information
The following table presents the income, profit, asset and liability information on the Group's strategic business divisions for the year ended 31 March 2025 and comparative figures for the year ended 31 March 2024.
Hospital services |
Pharmaceutical |
Laboratories |
Radiology services |
Unallocated/eliminations |
Total |
|||||||
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
|
External operating income | ||||||||||||
Revenue | 4,805,228,144 | 4,655,466,237 | 2,953,777,256 | 2,704,459,793 | 2,102,888,303 | 2,030,888,467 | 1,150,884,658 | 988,610,437 | (89,091) | (260,130) | 11,012,689,270 | 10,379,164,804 |
Other income | – | – | – | – | – | – | – | – | – | – | 177,315,238 | 181,341,329 |
Total operating income | 4,805,228,144 | 4,655,466,237 | 2,953,777,256 | 2,704,459,793 | 2,102,888,303 | 2,030,888,467 | 1,150,884,658 | 988,610,437 | (89,091) | (260,130) | 11,190,004,508 | 10,560,506,133 |
Share of profit of equity accounted investee |
– | – | – | – | – | – | – | – | – | – | 223,036,367 | 148,528,563 |
Depreciation and amortisation | – | – | – | – | – | – | – | – | – | – | (826,005,035) | (860,826,767) |
Profit/(loss) before tax | – | – | – | – | – | – | – | – | – | – | 336,642,651 | (247,007,212) |
Income tax expense for the year | – | – | – | – | – | – | – | – | – | – | (280,261,552) | (57,740,051) |
Profit/(Loss) attributable to equity holders of the parent | – | – | – | – | – | – | – | – | – | – | 56,381,099 | (304,747,263) |
9. Revenue
SLFRS 15 – Revenue from contracts with customers, establishes a comprehensive framework for determining whether, how much and when revenue is recognised. The Group recognises revenue when a customer obtains control of the goods or services. Judgement is used to determine the timing of transfer of control – at a point in time or over time.
9.1 Revenue Streams
The Group generates revenue primarily from health and laboratory services.
GROUP |
COMPANY |
|||
For the year ended 31 March |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
Revenue from contracts with customers | 11,012,689,270 | 10,379,164,804 | 5,782,777,543 | 5,481,588,550 |
11,012,689,270 | 10,379,164,804 | 5,782,777,543 | 5,481,588,550 |
9.2 Disaggregation of Revenue from Contracts with Customers
In the following table, revenue from contracts with customers is disaggregated by primary geographical market, major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group’s reportable segments (Refer Note 8).
GROUP | COMPANY |
|||
For the year ended 31 March |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
Major product/ service lines | ||||
Hospital revenue | 4,805,228,144 | 4,655,466,237 | 2,536,365,745 | 2,610,216,042 |
Pharmacy revenue | 2,953,777,256 | 2,704,459,793 | 2,055,771,845 | 1,831,833,206 |
Laboratory revenue | 2,102,888,303 | 2,030,888,467 | 204,848,050 | 203,121,433 |
Radiology services | 1,150,884,658 | 988,610,437 | 985,880,994 | 836,677,999 |
Deferred revenue | (89,091) | (260,130) | (89,091) | (260,130) |
11,012,689,270 | 10,379,164,804 | 5,782,777,543 | 5,481,588,550 | |
Timing of revenue recognition | ||||
Products transferred at a point in time | 2,953,777,256 | 2,704,459,793 | 2,055,771,845 | 1,831,833,206 |
Products and services transferred over time | 8,058,912,014 | 7,674,705,011 | 3,727,005,698 | 3,649,755,344 |
Revenue from contracts with customers | 11,012,689,270 | 10,379,164,804 | 5,782,777,543 | 5,481,588,550 |
9.3 Contract Balances
These refer to the Group’s rights to consideration for work completed but not billed at the reporting date. Contract balances as at 31 March 2025 of the Group is Rs. 64,896,296/- (2024: Rs. 40,894,392/-) and for the Company is Rs. 27,640,259/- (2024: Rs. 14,675,915/-).
9.4 Performance Obligations and Revenue Recognition Policies
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over a good or service to a customer.
The following table provides information about the nature and timing of the satisfaction of performance obligation in contracts with customers, including significant payment terms and
related revenue recognition policies.
Type of product/service |
Nature of timing of satisfaction of performance obligations, including significant payment terms |
Revenue recognition |
Healthcare service | Revenue primarily comprises fees charged for inpatient and outpatient hospital services. Services include charges for accommodation, theatre, medical professional services, equipment, radiology, laboratory and pharmaceutical goods used. | Revenue is recognised over time as the services are provided. The stage of completion for determining the amount of revenue to recognise is assessed based on provision of services. If the services under a single arrangement are rendered in different reporting periods, then the consideration is allocated based on their relative stand-alone selling prices. The stand-alone selling price is determined based on the price list at which the Group sells the services in separate transactions. |
The service revenues are presented net of related doctor fees and diagnostic charges in cases where the Group is not the primary obligor and does not have the pricing latitude. | ||
Sale of Goods | Pharmacy Sales are recognised when the risk and reward of ownership are passed to the customer. | Revenue is recognised point in time and measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. Revenue is reduced for rebates and loyalty points granted upon purchase and are stated net of returns and discounts wherever applicable. |
10. Other Income
Other income is recognised on an accrual basis.
Net gains and losses of a revenue nature on the disposal of property, plant and equipment and other non current assets including investments have been accounted for in profit or loss.
GROUP |
COMPANY |
|||
For the year ended 31 March |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
– Rental services | 8,031,875 | 42,181,860 | 36,948,750 | 38,607,460 |
– Car park income | 54,079,740 | 40,995,981 | – | – |
– Change is fair value of Unit Trust | 411,622 | – | 411,622 | – |
– Other sundry income | 102,764,160 | 82,709,667 | 46,260,923 | 27,606,878 |
– Gain from the de-recognition of right-of-use asset | 3,299,982 | – | – | – |
– Gain from disposals of property, plant and equipment | 1,140,000 | – | 1,140,000 | – |
– Recovery of bad debts | 7,587,859 | 15,453,821 | 7,587,859 | 15,453,821 |
177,315,238 | 181,341,329 | 92,349,154 | 81,668,159 |
11. Profit/(Loss) from Operations
Operating profit is the result generated from the continuing principal revenue-producing activities of the Group as well as other income and expenses related to operating activities. Operating profit excludes net finance costs, and income taxes.
ExpensesAll expenditure incurred in the running of the business has been charged to income in arriving at the profit for the year. Repairs and renewals are charged to Statement of Profit or Loss in the year in which the expenditure is incurred.
Borrowing CostsBorrowing costs are recognised as an expense in the period in which they are incurred, except to the extent that they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset.
The profit from operations has been arrived after charging all the expenses including the following:
GROUP | COMPANY |
||||
For the year ended 31 March |
Notes |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
Staff costs | 11.1 | 1,971,235,134 | 1,905,865,718 | 608,108,593 | 628,814,927 |
Emoluments paid to directors | 13,740,000 | 10,870,000 | 13,740,000 | 10,870,000 | |
Auditor's remuneration – audit and audit related services | 9,600,000 | 8,750,000 | 3,850,000 | 3,500,000 | |
Depreciation of property plant and equipment | 802,409,354 | 825,972,769 | 216,499,959 | 268,964,148 | |
Provision/(Reversal) for trade and other receivables | 65,808,802 | (29,177,779) | 63,016,900 | (52,282,289) | |
Provision for slow-moving and obsolete inventories | 1,889,824 | 139,640 | 197,349 | 83,784 | |
Loss from disposal of property, plant and equipment | 324,207 | 5,129,300 | – | – | |
Amortisation of right-of-use assets | 23,595,681 | 34,853,998 | 7,235,061 | 9,599,768 |
11.1 Staff Costs
GROUP |
COMPANY |
||||
For the year ended 31 March |
Notes |
2025 Rs. |
2024 Rs. |
2025 Rs. |
2024 Rs. |
Salaries and wages | 1,717,500,662 | 1,657,960,015 | 514,373,227 | 530,194,117 | |
Contribution to Employees’ Provident Fund | 27.1 | 142,592,471 | 137,422,246 | 42,842,221 | 43,435,666 |
Contribution to Employees’ Trust Fund | 27.1 | 35,648,117 | 34,355,562 | 10,710,555 | 10,858,917 |
Provision for retirement benefit liability | 27.2.b | 75,493,884 | 76,127,895 | 40,182,590 | 44,326,227 |
1,971,235,134 | 1,905,865,718 | 608,108,593 | 628,814,927 |
12. Net Finance Costs
The Group's finance income and finance costs include:
- interest income
- interest expenses
- the foreign currency gains or losses on financial assets and financial liabilities Interest income or expenses are recognised using the effective interest method.
- the gross carrying amount of the financial assets; or
- the amortised cost of the financial liability. In calculating interest income and expenses, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial assets. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
The “effective interest rate” is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instruments to:
GROUP |
COMPANY |
||||
For the year ended 31 March |
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Finance Income | |||||
Interest on fixed deposits | 27,741,689 | 32,241,724 | 21,214,172 | 25,858,817 | |
Foreign exchange gain | 4,784,022 | 33,730,647 | 2,274,695 | 35,241,399 | |
Other interest | 1,208,344 | 5,320,653 | 1,073,794 | 710,163 | |
33,734,055 | 71,293,024 | 24,562,661 | 61,810,379 | ||
Finance Costs | |||||
Overdraft interest | 185,915,135 | 216,538,203 | 63,225,733 | 91,205,374 | |
Foreign exchange loss | 479,218 | – | – | – | |
Debenture interest | – | 867,358 | – | 867,358 | |
Interest on borrowings | 29.1 | 712,346,276 | 1,199,917,300 | 461,158,689 | 821,424,871 |
Interest on commercial papers | 29.2 | 739,448 | 39,710,829 | 739,448 | 39,710,829 |
Interest on leases | 30 | 28,891,617 | 34,410,953 | 625,064 | 1,267,891 |
928,371,514 | 1,491,444,643 | 525,748,934 | 954,476,323 | ||
Net Finance Costs | 894,637,459 | 1,420,151,619 | 501,186,273 | 892,665,944 |
13. Income Tax Expenses
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in the Statement of Profit or Loss except to the extent that it relates to a business combination, or items recognised directly in equity or in Other Comprehensive Income.
The Group has determined that interest and penalties relating to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under LKAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Current Tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred Tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Refer Note 28 for detailed accounting policy.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits 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 enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Tax Exposures
In determining the amount of current and deferred tax, the Group takes into account 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 Group to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
13.1 Amount Recognised in Profit or Loss
GROUP |
COMPANY |
||||
For the year ended 31 March |
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Current tax expense | |||||
Tax on current year profit | 13.4 | 169,170,009 | 15,447,526 | 162,411,929 | – |
Under provision during prior year | – | 11,595,548 | – | – | |
169,170,009 | 27,043,074 | 162,411,929 | – | ||
Deferred tax expense | |||||
Charge to/(reversal from) deferred taxation | 28.1 | 111,091,543 | 30,696,977 | 20,544,054 | (3,441,273) |
111,091,543 | 30,696,977 | 20,544,054 | (3,441,273) | ||
Tax expenses/(reversals) on continuing operations | 280,261,552 | 57,740,051 | 182,955,983 | (3,441,273) |
As per the Inland Revenue Amendment Act No. 45 of 2022, the Group is liable to pay income tax on its taxable profits at following rates,
Company |
Tax rate |
Nawaloka Hospitals PLC | 30% on the taxable profits (2024: 30% on the taxable profits) |
New Nawaloka Hospitals (Pvt) Ltd | 30% on the taxable profits (2024: 30% on the taxable profits) |
New Nawaloka Medical Centre (Pvt) Ltd | 30% on the taxable profits (2024: 30% on the taxable profits) |
Nawaloka Laboratories (Pvt) Ltd | 30% on the taxable profits (2024: 30% on the taxable profits) |
13.2 Amount Recognised in Other Comprehensive Income
GROUP |
COMPANY |
||||
For the year ended 31 March |
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Items that will not be reclassified to profit or loss | |||||
Deferred tax impact on retirement benefit obligation | 28.1 | (4,561,711) | (14,711,200) | (621,813) | (10,225,725) |
Deferred tax impact on change in revaluation reserve | 28.1 | 121,019,408 | – | 164,608 | – |
116,457,697 | (14,711,200) | (457,205) | (10,225,725) |
13.3 Amounts Recognised Directly in Equity
There were no items recognised directly in equity during the year ended 31 March 2025.
13.4 Reconciliation Between the Accounting Profit and Tax Expense
GROUP |
COMPANY |
||||
For the year ended 31 March |
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Accounting profit/(loss) before tax | 336,642,651 | (247,007,212) | 784,776,398 | 576,210,524 | |
Share of profit from equity accounted investee | (223,036,367) | (148,528,563) | (223,036,367) | (148,528,563) | |
Other consolidation adjustments | 33,600,000 | 26,803,231 | – | – | |
Profit/(Loss) before tax | 147,206,284 | (368,732,544) | 561,740,031 | 427,681,961 | |
Aggregate disallowable expenses | 996,560,508 | 1,002,587,063 | 356,739,727 | 326,833,496 | |
Aggregate allowable expenses | (1,231,924,063) | (1,129,333,732) | (334,629,355) | (288,373,819) | |
Other sources of income | (69,944,087) | (156,188,533) | (61,923,033) | (143,154,984) | |
Tax loss from business | 13.5 | (956,475,309) | (1,056,787,664) | – | – |
Taxable profit from business | 731,173,951 | 405,119,918 | 521,927,370 | 322,986,655 | |
Other sources of income liable for tax |
67,481,570 | 35,581,901 | 59,236,716 | 26,568,980 | |
Tax loss claimed during the year | 13.5 | (234,755,493) | (389,210,067) | (39,790,990) | (349,555,635) |
Taxable income | 563,900,028 | 51,491,752 | 541,373,096 | – | |
Income tax at 30% | 169,170,009 | 15,447,526 | 162,411,929 | – | |
Total income tax | 169,170,009 | 15,447,526 | 162,411,929 | – | |
Effective tax rate | 50% | Nil | 26% | Nil |
13.5 Tax Losses Carried Forward
GROUP |
COMPANY |
|||
For the year ended 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Reconciliation of Tax Losses Carried Forward | ||||
Tax losses brought forward | 3,983,300,822 | 3,160,084,894 | 118,377,148 | 261,065,439 |
Adjustment due to finalisation of taxes of previous years |
(74,943,582) | 155,638,331 | (78,586,158) | 206,867,344 |
Tax loss claimed during the year | (234,755,493) | (389,210,067) | (39,790,990) | (349,555,635) |
Tax loss for the year | 956,475,309 | 1,056,787,664 | – | – |
Tax loss carried forward | 4,630,077,056 | 3,983,300,822 | – | 118,377,148 |
14. Earnings/(Loss) Per Share
The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
14.1 Basic Earnings/(Loss) Per Share
The earnings/(loss) per share is computed on the profit/(loss) attributable to ordinary shareholders after tax and non-controlling interest divided by the weighted average number of ordinary shares during the year.
GROUP | COMPANY |
|||
For the year ended 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Profit/(Loss) for the year | 56,381,099 | (304,747,263) | 601,820,415 | 579,651,797 |
Weighted average number of ordinary shares in issue during the year |
1,409,505,596 | 1,409,505,596 | 1,409,505,596 | 1,409,505,596 |
Earnings/(Loss) per Share | 0.04 | (0.22) | 0.43 | 0.41 |
14.2 Diluted Earnings/(Loss) Per Share
There was no dilution of ordinary shares outstanding at any time during the year. Therefore, diluted earnings/(loss) per share is same as basic earnings per share as shown in Note 14.1.
15. Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)
Management has presented the performance measure adjusted EBITDA because it monitors this performance measure at a consolidated level and it believes that this measure is relevant to an understanding of the Group’s financial performance. Adjusted EBITDA is calculated by adjusting profit from continuing operations to exclude the impact of taxation, net finance costs, depreciation and amortization.
Adjusted EBITDA is not a defined performance measure in Sri Lanka Accounting Standards.
The Group’s definition of adjusted EBITDA may not be comparable with similarly titled performance measures and disclosures by other entities.Reconciliation of adjusted EBITDA to profit from continuing operations – Group
For the year ended 31 March | 2025 Rs. |
2024 Rs. |
Profit/(Loss) for the year | 56,381,099 | (304,747,263) |
Income tax expense | 280,261,552 | 57,740,051 |
Profit/(Loss) before tax | 336,642,651 | (247,007,212) |
Adjustments for: | ||
Net finance costs | 894,637,459 | 1,420,151,619 |
Depreciation | 802,409,354 | 825,972,769 |
Amortization | 23,595,681 | 34,753,998 |
Share of profit of equity-accounted investee, net of tax | (223,036,367) | (148,528,563) |
Adjusted EBITDA | 1,834,248,778 | 1,885,342,611 |
16. Property, Plant and Equipment
Recognition and Measurement
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Revaluation
The Group applies the Revaluation Model for the entire class of buildings on leasehold property for measurement after initial recognition. Such properties are carried at revalued amounts, being their fair value at the date of revaluation, less any subsequent accumulated depreciation on buildings and any accumulated impairment losses charged subsequent to the date of valuation. Buildings on leasehold land of the Group are revalued by independent professional valuers every three-five years or more frequently if the fair values as are substantially different from carrying amounts to ensure that the carrying amounts do not differ from the fair values as at the reporting date.
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 statement of profit or loss and other comprehensive income. In this circumstance, the increase is recognised as income only to the extent of the previous write down in value. Any decrease in the carrying amount is recognised as an expense in the statement of profit or loss and other comprehensive income or charged to Revaluation Reserve in equity through OCI, only to the extent of any credit balance existing in the Revaluation Reserve in respect of that asset. 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.
Subsequent Expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:
Buildings on leasehold land lower of land lease term or 60 years
Freehold Buildings 60 years
Fixtures and Fittings 10 years
Plant and Machinery 5 years
Hospital Equipment 10 years
Medical Equipment 10 years
Motor Vehicles 5 years
Furniture and Fittings 10 years
Computer Equipment 4 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Capital work-in-progress
These are expenses of a capital nature directly incurred in the construction of buildings, awaiting capitalisation. These are stated in the Statement of Financial Position at cost less any accumulated impairment losses. Capital work-in-progress is transferred to the relevant asset when it is in the location and condition necessary for it to be capable of operating in the manner intended by the Management (i.e. available for use).
De-recognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the caring amount of the asset) is included in the statement of profit or loss in the year asset is de-recognised.
Impairment/Reversal of Impairment
The carrying value of property plant and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying value exceed the estimated recoverable amount the assets are written down to their recoverable amount. Impairment losses are recognised in the statement of comprehensive income unless it reverses a previous revaluation surplus for the same asset.
16.1 Reconciliation of Carrying Amount
Group
Freehold land Rs. |
Buildings constructed on leasehold land Rs. |
Fixture and fittings Rs. |
Plant and machinery Rs. |
Motor vehicles Rs. |
Hospital equipment Rs. |
Medical equipment Rs. |
Computer equipment Rs. |
Furniture fittings Rs. |
Work in progress (WIP) Rs. |
Total 2025 Rs. |
Total 2024 Rs. |
|
Cost/re-Valuation | ||||||||||||
Balance as at 01 April | 42,188,000 | 14,829,302,295 | 647,105,230 | 54,001,945 | 553,987,453 | 693,434,003 | 5,488,477,505 | 379,184,310 | 267,682,889 | 23,348,973 | 22,978,712,603 | 22,907,612,275 |
Revaluation gain during the year | – | 403,398,027 | – | – | – | – | – | – | – | – | 403,398,027 | – |
Additions during the year | – | – | 451,750 | – | – | 29,120,354 | 164,121,482 | 67,212,766 | 3,432,960 | 76,310,823 | 340,650,135 | 76,825,978 |
Transfers from WIP | – | 23,348,975 | – | – | – | – | – | – | – | (23,348,975) | – | – |
Adjustment due to revaluation | – | (822,096,622) | – | – | – | – | – | – | – | – | (822,096,622) | – |
Disposals during the year | – | – | – | – | (427,940) | – | (68,929,600) | (43,000) | – | – | (69,400,540) | (5,725,650) |
Balance as at 31 March | 42,188,000 | 14,433,952,675 | 647,556,980 | 54,001,945 | 553,559,513 | 722,554,357 | 5,583,669,387 | 446,354,076 | 271,115,849 | 76,310,821 | 22,831,263,603 | 22,978,712,603 |
Accumulated Depreciation | ||||||||||||
Balance as at 01 April | – | 410,501,046 | 502,873,984 | 54,001,945 | 542,879,219 | 535,815,415 | 4,412,316,483 | 339,208,832 | 184,830,010 | – | 6,982,426,934 | 6,157,050,515 |
Charge for the year | – | 411,595,576 | 36,859,040 | – | 10,308,827 | 38,724,567 | 254,009,883 | 30,963,707 | 19,947,754 | – | 802,409,354 | 825,972,769 |
Adjustment due to revaluation | – | (822,096,622) | – | – | – | – | – | – | – | – | (822,096,622) | – |
Disposals during the year | – | – | – | – | (427,940) | – | (68,635,493) | (12,900) | – | – | (69,076,333) | (596,350) |
Balance as at 31 March | – | – | 539,733,024 | 54,001,945 | 552,760,106 | 574,539,982 | 4,597,690,873 | 370,159,639 | 204,777,764 | – | 6,893,663,333 | 6,982,426,934 |
Net Carrying Value | ||||||||||||
As at 31 March 2025 | 42,188,000 | 14,433,952,675 | 107,823,956 | – | 799,407 | 148,014,375 | 985,978,514 | 76,194,437 | 66,338,085 | 76,310,821 | 15,937,600,270 | |
As at 31 March 2024 | 42,188,000 | 14,418,801,249 | 144,231,246 | – | 11,108,234 | 157,618,588 | 1,076,161,022 | 39,975,478 | 82,852,879 | 23,348,973 | 15,996,285,669 |
Company
Freehold land Rs. |
Buildings constructed on leasehold land Rs. |
Fixture and fittings Rs. |
Plant and machinery Rs. |
Motor vehicles Rs. |
Hospital equipment Rs. |
Medical equipment Rs. |
Computer equipment Rs. |
Furniture fittings Rs. |
Work in progress (WIP) Rs. |
Total 2025 Rs. |
Total 2024 Rs. |
|
Cost/re-Valuation | ||||||||||||
Balance as at 01 April | 42,188,000 | 1,219,770,300 | 234,487,982 | 11,332,408 | 476,857,846 | 409,190,282 | 3,084,551,159 | 210,158,822 | 134,210,750 | 20,042,412 | 5,842,789,961 | 5,772,010,486 |
Revaluation gain during the year | – | 548,694 | – | – | – | – | – | – | – | – | 548,694 | – |
Additions during the year | – | – | 442,750 | – | – | 16,560,911 | 55,909,846 | 20,399,865 | 1,185,277 | 76,310,823 | 170,809,472 | 70,779,475 |
Transfers from WIP | – | 20,042,412 | – | – | – | – | – | – | – | (20,042,412) | – | – |
Adjustment due to revaluation | – | (109,932,729) | – | – | – | – | – | – | – | – | (109,932,729) | – |
Disposals during the year | – | – | – | – | (427,940) | – | (68,599,600) | – | – | – | (69,027,540) | – |
Balance as at 31 March | 42,188,000 | 1,130,428,677 | 234,930,732 | 11,332,408 | 476,429,906 | 425,751,193 | 3,071,861,405 | 230,558,687 | 135,396,027 | 76,310,823 | 5,835,187,858 | 5,842,789,961 |
Accumulated depreciation | ||||||||||||
Balance as at 01 April | – | 54,500,693 | 205,893,020 | 11,332,408 | 467,828,735 | 337,917,464 | 2,620,275,206 | 184,324,792 | 102,537,027 | – | 3,984,609,345 | 3,715,645,197 |
Charge for the year | – | 55,432,036 | 8,988,423 | – | 9,029,111 | 17,725,063 | 100,865,495 | 16,942,216 | 7,517,615 | – | 216,499,959 | 268,964,148 |
Adjustment due to revaluation | – | (109,932,729) | – | – | – | – | – | – | – | – | (109,932,729) | – |
Disposals during the year | – | – | – | – | (427,940) | – | (68,599,600) | – | – | – | (69,027,540) | – |
Balance as at 31 March | – | – | 214,881,443 | 11,332,408 | 476,429,906 | 355,642,527 | 2,652,541,101 | 201,267,008 | 110,054,642 | – | 4,022,149,035 | 3,984,609,345 |
net Carrying Value | ||||||||||||
As at 31 March 2025 | 42,188,000 | 1,130,428,677 | 20,049,289 | – | – | 70,108,666 | 419,320,304 | 29,291,679 | 25,341,385 | 76,310,823 | 1,813,038,823 | |
As at 31 March 2024 | 42,188,000 | 1,165,269,607 | 28,594,962 | – | 9,029,111 | 71,272,818 | 464,275,953 | 25,834,030 | 31,673,723 | 20,042,412 | 1,858,180,616 |
16.2 Details of Buildings Under Property, Plant and Equipment Stated at Revaluation
The buildings constructed on leasehold lands of the Group were revalued by Mr G W G Abeygunawardene FRICS, Chartered valuer as at 31 March 2025.
Location |
Extent Building (Sq. ft.) | No of Buildings | Revalued amount – Buildings Rs. | Carrying Value after revaluation Rs. | Carrying Value if carried at cost Rs. |
Nawaloka Hospitals PLC | 90,984 | 1 | 1,130,428,677 | 1,130,428,677 | 536,545,895 |
New Nawaloka Hospitals (Pvt) Ltd. | 112,826 | 1 | 1,226,603,200 | 1,226,603,200 | 1,124,145,738 |
New Nawaloka Medical Centre (Pvt) Ltd. | 587,353 | 4 | 12,076,982,550 | 12,076,982,550 | 7,995,349,644 |
The leasehold properties with a land extent of 511.80 perches are located in No. 23, Deshamanya H K Dharmadasa Mawatha, Colombo 02.
16.3 Details of Freehold Lands Stated at Cost – Group/Company
Property |
Extent |
Number of Buildings |
Square feet (Building) |
Carrying value Rs. |
(Perches) |
||||
Land situated at No. 15, Nelson lane, Kollupitiya, Colombo 03 | 19.2 | – | – | 42,188,000 |
16.4 Title Restriction on Property, Plant and Equipment
There are no restrictions that existed on the title of the property, plant and equipment of the Group as at the reporting date.
16.5 Acquisition of Property, Plant and Equipment During the Year
During the financial year, the Group acquired property, plant and equipment to the aggregate value of Rs. 340 Mn. (2024: Rs. 76 Mn.) Cash payments amounting to Rs. 340 Mn. (2024: Rs. 76 Mn.) were made during the year for purchase of property, plant and equipment.
16.6 Impairment of Property, Plant and Equipment
The Board of Directors has assessed the potential impairment loss of property, plant and equipment as at 31 March 2024. Based on the assessment, no impairment provision is required to be made in the Financial Statements as at the reporting date in respect of property, plant and equipment.
16.7 Property, plant and equipment pledged as security
Refer Note 24.1 and 29.2
16.8 Temporarily idle Property, Plant and Equipment
There are no temporarily idle property, plant and equipment as at the reporting date.
16.9 Fully Depreciated Assets
Fully depreciated assets in property, plant and equipment still in use are detailed as follows;
GROUP |
COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Fixture and fittings | 303,980,078 | 259,009,680 | 170,310,042 | 126,799,121 |
Plant and machinery | 18,231,945 | 54,001,945 | 11,332,408 | 11,332,408 |
Motor vehicles | 550,154,810 | 482,472,151 | 476,857,845 | 411,468,106 |
Hospital equipment | 362,926,263 | 276,810,557 | 284,802,481 | 200,781,747 |
Medical equipment | 3,280,983,453 | 2,915,217,019 | 2,318,099,302 | 1,993,479,512 |
Computer equipment | 302,051,209 | 257,717,187 | 160,634,972 | 148,453,485 |
Furniture and fittings | 76,182,768 | 60,901,302 | 67,712,873 | 53,158,625 |
4,894,510,526 | 4,306,129,841 | 3,489,749,923 | 2,945,473,004 |
16.10 Work in Progress
The cost of incompleted projects of the group relation to radiology enhancement project, physiotherapy unit and maternity ward of Rs. 76 Mn. has been recorded under capital work-in-progress as at 31 March 2025 (2024: Rs. 23.3 Mn.).
16.11 Compensation from Third Parties for Items of Property, Plant and Equipment
No impairment has been recognised for items of Property Plant and Equipments during the year and no compensation are receivable from third parties during the year (2024: Nil).
16.12 Measurement of Fair Values
Fair value hierarchy
The fair value of buildings constructed on leasehold lands was determined by external, independent property valuer, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
Valuation techniques and significant unobservable inputs
The Group uses the revaluation model for measurement of buildings constructed on leasehold land. The buildings constructed on leasehold lands of the Group were revalued by Mr G W G Abeygunawardene FRICS, Chartered valuer as at 31 March 2025.
The Depreciated Replacement Cost (“DRC method”) has been used as the fair value of buildings constructed on lease hold land. The cost approach is based on the assumption that an informed buyer will pay no more for a property than the cost of building a brand – new property with similar utility. In determining the DRC, the current condition of the buildings and future usability have been considered. This approach involves the analysis of transactions relating to direct comparable where available. Where evidence of direct comparison is not available, consideration is given to properties in locations further afield making appropriate allowances for configuration, permitted use, size, etc.
The table below sets out the significant unobservable inputs used in measuring buildings constructed on leasehold lands categorised as Level 3 in the fair value hierarchy as at 31 March 2025.
Location and address of
the property |
Method of valuation |
Significant unobservable inputs |
Range of estimates for unobservable inputs |
Estimated fair value would increase (decrease) if. |
Sensitivity of fair value to significant unobservable input |
No. 23, Deshamanya H K Dharmadasa Mawatha, Colombo 2 | DRC Method of Valuation | Building – Price per square feet | Rs. 1,700/ – Rs. 27,350/- | Price per square feet for Building increase/(Decrease) | Positively Correlated |
16.13 Borrowing Costs
No Borrowing costs were capitalised during the year under Property, Plant and Equipment (2024: Nil)
17. Leases
Leased Assets
At inception of a contract, the Group/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 identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group/Company assesses whether:
- the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;
- the Group/Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
- the Group/Company has the right to direct the use of the asset. The Group/Company has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group/Company has the right to direct the use of the asset if either:
- the Group/Company has the right to operate the asset; or
- the Group/Company designed the asset in a way that predetermines how and for what purpose it will be used.
- fixed payments;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group/Company is reasonably certain to exercise, lease payments in an optional renewal period if the Group/Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group/Company is reasonably certain not to terminate early.
This policy is applied to contracts entered into, or changed, on or after 01 April 2019.
At inception or on reassessment of a contract that contains a lease component, the Group/Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
(i) As a lessee
The Group/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 on 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 right-of-use asset is subsequently amortised using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
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 Group/Company’s incremental borrowing rate. Generally, the Group/Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
The lease liability is measured at amortised cost using the effective interest method. It is re-measured 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 Group/Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group/Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
17.1 Right of Use Assets
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Cost | ||||
Balance as at 01 April | 804,384,781 | 801,071,704 | 130,386,037 | 149,250,072 |
New leases obtained during the year | 262,498,309 | 6,139,834 | 227,836,863 | – |
Remeasurement of leases | – | 38,993,679 | – | – |
Derecognition of right-of-use assets | (517,203,820) | (41,820,436) | – | (18,864,035) |
Balance as at 31 March | 549,679,270 | 804,384,781 | 358,222,900 | 130,386,037 |
Accumulated Amortisation | ||||
Balance as at 01 April | 596,147,120 | 588,248,750 | 88,525,384 | 92,906,262 |
Amortisation for the year | 23,595,681 | 34,853,998 | 7,235,061 | 9,599,768 |
Derecognition of right-of-use assets | (504,522,262) | (26,955,628) | – | (13,980,646) |
Balance as at 31 March | 115,220,539 | 596,147,120 | 95,760,445 | 88,525,384 |
Net carrying value | 434,458,731 | 208,237,661 | 262,462,455 | 41,860,653 |
During the year, the Group derecognized two lease contracts: one with a right-of-use asset carrying value of Rs. 9,082,448 located at Lot A, S W R D Bandaranayake Mawatha, Kandy, on 10 July 2024, and another with a carrying value of Rs. 3,599,110 located at “Sasthiriyaar Vayal”, Assessment No. 39, Puliyanthivu, Batticaloa, on 03 April 2024. These leases had corresponding liabilities of Rs. 11,602,084 and Rs. 4,379,456 respectively, resulting in a total gain on derecognition of Rs. 3,299,982.
Further, the Group derecognised right-of-use assets with a cost of Rs. 495,439,813 and the related accumulated amortisation, pertaining to leasehold assets for which the agreement period ended during the year.
Assets obtained on lease and balance term of leases as at 31 March 2025 are as follows,
(a) Nawaloka Hospitals PLC
Type of asset |
Balance lease term (years) |
Land | 21 – 65 years |
Buildings | 1 – 3 years |
(b) New Nawaloka Hospitals (Private) Limited
Type of asset |
Balance lease term (years) |
Land | 69 years |
Buildings | 1 – 4 years |
(c) New Nawaloka Medical Centre (Private) Limited
Type of asset |
Balance lease term (years) |
Land | 79 years |
Buildings | 4 – 9 years |
18. Investment in Subsidiaries
Recognition and measurement
Subsidiaries are entities controlled by the Group. The Group “controls” an entity when it is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Financial Statements of subsidiaries are included in the Consolidated Financial Statements from the date on which control commenced until the date on which control ceases.
Investments in subsidiaries are recognised at cost of acquisition and thereafter it is carried at cost less any impairment losses in the separate financial statements of the Company. The net assets of each subsidiary are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amount of the investment is estimated and the impairment loss is recognised to the extent of its net assets loss.
COMPANY |
||||
As at 31 March |
Holding % |
No. of Shares | 2025 Rs. |
2024 Rs. |
New Nawaloka Hospitals (Pvt) Ltd | 100 | 6,500,000 | 245,933,056 | 245,933,056 |
New Nawaloka Medical Centre (Pvt) Ltd | 100 | 70,000,004 | 700,000,000 | 700,000,000 |
Nawaloka Laboratories (Pvt) Ltd | 100 | 1 | 10 | 10 |
945,933,066 | 945,933,066 |
Assessment of Impairment
The Board of Directors has assessed the potential impairment of investment in subsidiaries as 31 March 2025. Based on the internal assessment carried out by the Board, no impairment provision has been made in the Financial Statements as at the reporting date in respect of investment in subsidiaries.
19. Investment in Equity Accounted Investee
An associate is an entity in which the Group has significant influence, but no control or joint control over the financial and operating policies significant influence is presumed to exist when the Group holds between 20 percent and 50 percent of the voting power of another entity.
The Group determines significant influence taking into account similar considerations necessary to determine control over subsidiaries. Interests in associates are accounted for using equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to the initial recognition, the Consolidated Financial Statements include the Group’s share of the profit or loss and other comprehensive income of equity accounted investee.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
The financial statements of the associate are prepared in line with the financial year of the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. The Group discontinues the use of the equity method from the date that it ceases to have significant influence over an associate over the and accounts for the investment in accordance with the Group’s accounting policy for financial instruments. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
The Company elected to apply equity method in accounting for its interest in associate in the separate Financial Statements.
Company |
Principal activities |
Class of shares held |
Number of shares |
Proportion of interest held by the Group/Company |
Nawaloka College of Higher Studies (Pvt) Limited | Education services | Ordinary | 5,049,500 | 49.995% |
19.1 Share of the Equity Accounted Investee’s Statement of Financial Position
GROUP |
COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Opening balance as at 01 April 2024 | 359,879,888 | 210,380,388 | 359,879,888 | 210,380,388 |
Share of profits of equity accounted investee, net of tax | 223,036,367 | 148,528,563 | 223,036,367 | 148,528,563 |
Share of other comprehensive income of equity accounted investees, net of tax |
(650,756) | 970,937 | (650,756) | 970,937 |
Closing balance as at 31 March 2025 | 582,265,499 | 359,879,888 | 582,265,499 | 359,879,888 |
19.2 Summary of Equity Accounted Investee’s Statement of Financial Position
Equity accounted investee’s statement of financial position
2025 Rs. |
2024 Rs. |
|
Group interest | 49.995% | 49.995% |
Current assets | 1,711,235,848 | 1,449,811,963 |
Non-current assets | 254,549,016 | 214,732,859 |
Current liabilities | (725,035,828) | (917,366,074) |
Non-current liabilities | (76,102,726) | (27,347,699) |
Total net assets (100%) | 1,164,646,310 | 719,831,049 |
Total net assets attributable to equity Holders |
1,164,646,310 | 719,831,049 |
Group share of net assets | 582,265,498 | 359,879,680 |
Share of net asset attributable to equity accounted investee |
582,265,498 | 359,879,680 |
Equity accounted investee’s statement of profit or loss and other comprehensive income |
||
Revenue | 1,124,604,820 | 1,209,339,150 |
Profit before income tax | 446,116,903 | 377,370,193 |
Income tax | – | (66,655,866) |
Profit after tax | 446,116,903 | 310,714,327 |
Profit attributable to equity holders | 446,116,903 | 310,714,327 |
Share of profit of equity accounted investee, net of tax | 223,036,367 | 148,528,563 |
Other comprehensive income for the year, net of tax |
(1,301,641) | – |
OCI Attributable to Equity holders | (1,301,641) | – |
Share of other comprehensive income of equity accounted investee, net of tax | (650,756) | 970,937 |
Share of total comprehensive income for the year, net of tax | 222,385,610 | 149,499,500 |
Dividend received | – | – |
19.3 Litigation update on this associate
A former director (the “Petitioner”) of Nawaloka Hospitals PLC has filed two cases (C.H.C/59/2023/CO and C.H.C/65/2024/CO) at the Commercial High Court of Colombo seeking to make an order to,
- Cancel 5,049,500 shares (wrongly and by an error) of Nawaloka College of Higher Studies (Private) Limited issued in favour of Nawaloka Hospitals PLC and register the same in the name of the Petitioner.
- Direct Nawaloka College of Higher Studies (Private) Limited to pay Rs. 78 Mn. and the interest due to the Company.
The Case C.H.C/59/2023/CO was called, and the following final determination was issued on 17 December 2024 by the Commercial High Court of Colombo .
- The Petitioner is entitled to 5,049,500 shares and directed the share register of Nawaloka College of Higher Studies (Private) Limited to be amended accordingly.
- Directed Nawaloka College of Higher Studies (Private) Limited to pay Rs. 78 Mn. and the interest due to the Company.
The Company filed an appeal dated 31st December 2024 and petition of appeal dated 31st January 2025 in the Supreme Court of Sri Lanka on this case. These appeals are yet to be listed.
The Case C.H.C/65/2024/CO was called, and on 23 July 2025, the Commercial High Court of Colombo delivered an interim order in favour of the Petitioner restraining Nawaloka College of Higher Studies (Private) Limited passing any special resolution unless the Petitioner is permitted to exercise the voting rights of 5,049,500 shares. The matter was fixed for main objections on 28 October 2025.
However, the Company subsequently filed appeal applications bearing no SC/HC/LA/81/2025 and SC/HC/LA/82/2025 dated 07 August 2025 in the Supreme Court of Sri Lanka on this case and these appeals are yet to be listed.
Having considered the opinion of legal experts, the Board of Directors of Nawaloka Hospitals PLC determined that they are confident that above matter/(s) would be resolved in favour of the Company and as a result no adjustments were made to the Financial Statements as at 31 March 2025. Accordingly, the Company/Group continued to recognise the investment in associate under equity method as at 31 March 2025.
In an unforeseen situation, if the final determination is delivered unfavourable to Nawaloka Hospitals PLC, the Company/Group will be required to derecognise the investment in associate amounting to Rs. 582 Mn. as at 31 March 2025 and recognise a loan receivable of Rs. 78 Mn. plus interest (to be determined) in the financial statements as at 31 March 2025.
20. Other Investments
See accounting policies in Note 34.
The Group's other investments are summerised as follows:
GROUP | COMPANY |
||||
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Fair Value Through Other Comprehensive Income – FVOCI |
20.1 | – | – | – | – |
Fair Value Through Profit or Loss – FVTPL |
20.2 | 25,411,623 | – | 25,411,623 | – |
Amortized cost | 20.3 | 243,925,710 | 239,841,334 | 198,340,301 | 193,272,101 |
269,337,333 | 239,841,334 | 223,751,924 | 193,272,101 |
Information about the Group's exposure to credit and market risk, and fair value measurement, is included in Note 35 and 36.
20.1 Fair Value through Other Comprehensive Income – FVOCI
The Group's financial instruments are summerised follows
GROUP |
COMPANY |
||||
Holding % | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Investment in Unquoted Shares | |||||
Digital Health (Private) Limited – cost | 15 | 14,805,000 | 14,805,000 | 14,805,000 | 14,805,000 |
Change in fair value | (14,805,000) | (14,805,000) | (14,805,000) | (14,805,000) | |
– | – | – | – |
Digital Health (Private) Limited launched in 2016, has connected more than 1,500 doctors in over 80 hospitals through its digital health platform which is accessible via doc.lk, by dialling 990, or via the Doc990 app.
Digital Health (Private) Limited is a subsidiary of Dialog Axiata PLC and the balance infusion of equity by Asiri Hospital Holdings PLC, Nawaloka Hospitals PLC and Ceylon Hospitals PLC.
The Group invested in 15% of the shares of Digital Health (Private) Limited on 25 April 2018. The Group designated this investment as FVOCI because this investment represent, investment, that the Group intends to hold for the long term strategic purposes.
The Company has carried out a valuation of the investment in Digital Health (Private) Limited using the net assets basis This fair valuation has been classified as Level 3 as per the fair value measurement principles.
The significant unobservable input applied in the valuation technique is the net asset value per share of the entity.
No strategic investments were disposed of during 2025, and there were no transfers of cumulative gains or losses within equity relating to these investments.
20.2 Fair Value through Profit or Loss – FVTPL
Investment in Unit Trust
GROUP |
COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | – | – | – | – |
Investment during the year | 25,000,000 | – | 25,000,000 | – |
Change in fair value | 411,623 | – | 411,623 | – |
Carrying value as at 31 March | 25,411,623 | – | 25,411,623 | – |
Investments in unit trusts are valued under level 2 by referring to prices published by the Unit Trust managers of NDB Wealth Money Fund.
20.3 Amortised Cost
Investment in Fixed Deposits
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Fixed deposits | ||||
Hatton National Bank PLC | 14,025,758 | 46,569,233 | – | – |
Commercial Bank of Ceylon PLC | 79,140,280 | 73,329,028 | 79,140,280 | 73,329,028 |
Nations Trust Bank PLC | 64,828,902 | 69,832,114 | 64,828,902 | 69,832,114 |
Bank of Ceylon PLC | 85,930,770 | 50,110,959 | 54,371,119 | 50,110,959 |
243,925,710 | 239,841,334 | 198,340,301 | 193,272,101 |
21. Inventories
Inventories have been valued at lower of cost and net realisable value after making due allowance for slow-moving inventories. The First-In First-Out (FIFO) basis is adopted to arrive at the cost of inventories.
Net realisable value is the price at which inventories can be sold in the normal course of business after allowing for cost of realisation and/or cost of conversion from their existing state to saleable condition.
GROUP |
COMPANY |
||||
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Pharmaceutical items | 432,470,401 | 309,197,726 | 259,482,241 | 185,518,636 | |
General stocks | 12,172,717 | 14,867,847 | 7,303,631 | 8,920,709 | |
Reagent stocks | 61,331,595 | 54,299,566 | – | – | |
505,974,713 | 378,365,139 | 266,785,872 | 194,439,345 | ||
Provision for slow-moving inventories | 21.1 | (29,698,732) | (27,808,908) | (17,819,240) | (17,621,891) |
476,275,981 | 350,556,231 | 248,966,632 | 176,817,454 |
21.1 Provision for Slow Moving Inventories
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | 27,808,908 | 27,669,268 | 17,621,891 | 17,538,107 |
Provision made during the year | 1,889,824 | 139,640 | 197,349 | 83,784 |
Balance as at 31 March | 29,698,732 | 27,808,908 | 17,819,240 | 17,621,891 |
22. Trade and Other Receivables
See accounting policies in Note 34.
GROUP |
COMPANY |
||||
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Financial Assets | |||||
Trade Receivables | |||||
– Key Management Personnel | 18,411,332 | 19,160,063 | 18,411,332 | 19,160,063 | |
– Other related companies | 320,456,469 | 296,485,485 | 320,456,469 | 286,300,998 | |
– Others | 603,655,704 | 546,842,834 | 593,555,058 | 546,842,834 | |
942,523,505 | 862,488,382 | 932,422,859 | 852,303,895 | ||
Less: Provision for impairment | 22.1 | (475,653,861) | (435,363,184) | (473,521,959) | (435,363,184) |
466,869,644 | 427,125,198 | 458,900,900 | 416,940,711 | ||
Other debtors | 878,809,763 | 756,397,167 | 402,433,818 | 313,685,729 | |
Staff loans | 8,625,372 | 9,425,021 | 8,625,372 | 9,425,022 | |
Less: Provision for impairment of other debtors |
22.2 | (680,636,794) | (667,583,215) | (279,988,365) | (267,594,786) |
673,667,985 | 525,364,171 | 589,971,725 | 472,456,676 | ||
Non-Financial Assets | |||||
Pre-payments | 110,419,106 | 78,687,971 | 110,419,106 | 78,687,971 | |
Other deposit and advances | 74,176,823 | 66,805,271 | 26,504,284 | 53,927,778 | |
Advance for import items | 37,469,041 | 9,903,541 | 37,469,041 | 9,903,541 | |
Less: Provision for impairment of pre-payments |
22.3 | (22,632,682) | (10,168,136) | (22,632,682) | (10,168,136) |
199,432,288 | 145,228,647 | 151,759,749 | 132,351,154 | ||
873,100,273 | 670,592,818 | 741,731,474 | 604,807,830 |
22.1 Provision for Impairment of Trade Receivables
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | 435,363,184 | 513,707,330 | 435,363,184 | 513,707,330 |
Provision/(Reversal) for the year | 40,290,677 | (78,344,146) | 38,158,775 | (78,344,146) |
Balance as at 31 March | 475,653,861 | 435,363,184 | 473,521,959 | 435,363,184 |
22.2 Provision for Impairment of Other Debtors
GROUP |
COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | 667,583,215 | 620,161,764 | 267,594,786 | 243,277,845 |
Provision for the year | 13,053,579 | 47,421,451 | 12,393,579 | 24,316,941 |
Balance as at 31 March | 680,636,794 | 667,583,215 | 279,988,365 | 267,594,786 |
22.3 Provision for Impairment of Prepayments
GROUP |
COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | 10,168,136 | 8,423,220 | 10,168,136 | 8,423,220 |
Provision for the year | 12,464,546 | 1,744,916 | 12,464,546 | 1,744,916 |
Balance as at 31 March | 22,632,682 | 10,168,136 | 22,632,682 | 10,168,136 |
23. Amounts Due from Related Parties
See accounting policies in Note 34.
GROUP |
COMPANY |
||||
As at 31 March |
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Alcobronz (Pvt) Ltd. | 11,000,000 | 11,000,000 | 11,000,000 | 11,000,000 | |
Battharamulla Medical Centre* | 35,489,063 | 35,489,063 | 35,489,063 | 35,489,063 | |
CAFÉ 77 (Pvt) Ltd. | – | 77,075 | – | – | |
Kandana Medical Centre * | 9,768,324 | 9,768,324 | 9,768,324 | 9,768,324 | |
Kiribathgoda Medical Centre * | 74,995,837 | 74,995,837 | 74,995,837 | 74,995,837 | |
Karapitiya Medical Centre * | 9,850,554 | 9,850,554 | 9,850,554 | 9,850,554 | |
One Galle Face Medical Centre* | 35,931,825 | 19,434,674 | 35,931,825 | 19,434,674 | |
Panadura Medical Centre * | 67,640,344 | 67,693,444 | 67,640,344 | 67,693,444 | |
Redline (Pvt) Ltd. | 15,685,025 | 4,685,025 | 11,000,000 | – | |
Kottawa Medical Centre * | 27,822,557 | 27,822,557 | 27,822,557 | 27,822,557 | |
Nawata (Pvt) Ltd. | 73,694,883 | 38,490,656 | 63,158,570 | 29,031,127 | |
Nawaloka Aviation (Pvt) Ltd. | 4,479,419 | 4,479,419 | 4,479,419 | 4,479,419 | |
Nawaloka ACG Aluminium Compant Pvt Ltd. | 96,300 | 96,300 | 96,300 | 96,300 | |
Nawaloka Institute of Health care (Pvt) Ltd. | 3,244,370 | 12,627,359 | 3,244,370 | 12,627,359 | |
Nawaloka College of Higher Studies (Pvt) Ltd. | 33,013,397 | 33,013,397 | 33,013,397 | 33,013,397 | |
Nawaloka Construction Company (Pvt) Ltd. | 101,651,389 | 87,542,543 | 101,651,389 | 87,542,543 | |
Nawaloka Steel Industries (Pvt) Ltd. | 241,393,650 | 312,488,539 | 238,843,410 | 309,938,299 | |
Nawaloka Guardian International (Pvt) Ltd. | 332,995 | 2,933,712 | – | 2,600,717 | |
Nawaloka Engineering (Pvt) Ltd. | 5,271,824 | 5,271,824 | 4,405,314 | 4,405,314 | |
New Ashford International (Pvt) Ltd. | 3,050,000 | 3,050,000 | 3,050,000 | 3,050,000 | |
Sarjah Polysacks (Pvt) Ltd. | 22,429,200 | 22,429,200 | 22,429,200 | 22,429,200 | |
Sasiri Polysacks (Pvt) Ltd | 145,629,266 | 114,137,182 | 145,629,266 | 114,137,182 | |
New Nawaloka Hospitals (Pvt) Ltd | – | – | 202,345,821 | 165,221,655 | |
New Nawaloka Medical Centre (Pvt) Ltd. | – | – | 3,353,923,303 | 3,282,729,500 | |
M Branch (Pvt) Ltd | 16,215,698 | 16,215,698 | 16,215,698 | 16,215,698 | |
Nawaloka Research and Educational Centre Foundation | 8,800,000 | 8,800,000 | 8,800,000 | 8,800,000 | |
Nawaloka College of Professional Studies (Pvt) Ltd (NCPS) | – | 173,545 | – | 173,545 | |
Mart 77 (Pvt) Ltd | 750 | – | 750 | – | |
Healthways (Pvt) Ltd | 9,411,836 | – | 9,411,836 | – | |
Nawaloka Forwarding Agents (Pvt) Ltd | 445,110,378 | – | 445,110,378 | – | |
Yiwu Trading (Pvt) Ltd | 34,483,574 | – | 34,483,574 | – | |
JD design studio (Pvt) Ltd | 75,000 | – | 75,000 | – | |
Nawaloka Petroleum (Pvt) Ltd | 12,873,395 | 1,873,395 | 12,873,395 | 1,873,395 | |
Mr Anisha Dharmadasa | – | 7,207,587 | – | 7,207,587 | |
1,449,440,853 | 931,646,909 | 4,986,738,894 | 4,361,626,690 | ||
Provision for impairment | 23.1 | (348,777,144) | (293,140,201) | (346,177,297) | (290,463,279) |
1,100,663,709 | 638,506,708 | 4,640,561,597 | 4,071,163,411 |
*These medical centers are operated under the legal entity Nawaloka Medical Centers (Pvt) Ltd.
23.1 Provision for Impairment
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | 293,140,201 | 250,821,011 | 290,463,279 | 248,144,089 |
Provision for the year | 55,636,943 | 42,319,190 | 55,714,018 | 42,319,190 |
Balance as at 31 March | 348,777,144 | 293,140,201 | 346,177,297 | 290,463,279 |
24. Cash and Cash Equivalents
The accounting policy for cash and cash equivalents has been given in Note 34.
Cash and cash equivalents in the statement of financial position comprise cash at banks, cash in hand and fixed deposits with a maturity of three months or less.
Statement of Cash Flows
The Statement of Cash Flows has been prepared using the Indirect Method of preparing Cash Flows in accordance with the Sri Lanka Accounting Standard (LKAS) 7, Statement of Cash Flows.
For cash flow purposes, cash and cash equivalents are presented net of bank overdrafts.
GROUP |
COMPANY |
||||
As at 31 March |
Notes | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Cash at Bank | 174,755,351 | 172,035,123 | 132,857,263 | 131,358,560 | |
Cash in hand | 175,054,738 | 59,111,115 | 133,977,830 | 57,330,817 | |
Cash and cash equivalents in the statement of financial position | 349,810,089 | 231,146,238 | 266,835,093 | 188,689,377 | |
Bank overdrafts used for cash management purposes | 24.1 | (889,947,506) | (740,457,007) | (534,947,506) | (390,457,007) |
Cash and cash equivalents for the purpose of statement of cash flows | (540,137,417) | (509,310,769) | (268,112,413) | (201,767,630) |
24.1 Bank Overdrafts Used for Cash Management Purposes
Company |
Interest rate | Limit Rs. | 31 March 2025 Rs. | 31 March 2024 Rs. | Security |
Nawaloka Hospitals PLC | |||||
Hatton National Bank PLC |
AWPLR+1.5% | 25,000,000 | 25,000,000 | 25,004,159 | Secondary concurrent mortgage bond for Rs. 757 Mn. over Nawaloka Hospital premises (lease hold) at No 15, Sir James Peiris Mawatha, Colombo 02 and everything standing thereon with all fixtures, fittings, services and such other rights attached or appertaining thereto. |
DFCC Bank PLC | AWPLR+3.25% | 210,000,000 | 202,900,225 | 205,547,199 | Joint & several Guarantees of Directors – Dr H K J Dharmadasa, Mr Ugitha Harshith Dharmadasa and Mr Anisha Givantha Dharmadasa. |
Seylan Bank PLC | AWPLR+2.5% with a floor of 12% p.a | 10,000,000 | 2,378,966 | 9,905,649 | (i) Assignment over credit and debit card receivables of minimum of Rs. 40 Mn. per Month (ii) assignment of insurance receipt totalling Rs. 20 Mn. per month (iii) corporate guarantee from New Nawaloka Hospital Pvt Ltd. for Rs. 2.1 Bn. (iv) A letter of undertaking from Bank of Ceylon for assignment of 100% daily collections of Credit/Debit card receivables amounting to Rs. 70,000,000 (Minimum per month) |
Commercial Bank of Ceylon PLC | Up to Rs. 54 Mn. at 4.5% p.a. from Rs. 54 Mn. to Rs. 122 Mn. from Rs. 122 Mn. to Rs. 200 Mn. AWPLR +1.5% p.a |
200,000,000 | 199,297,117 | 150,000,000 | Lien over Fixed Deposit 3002749649 and Fixed Deposit 7000049299 |
Nations Trust Bank PLC | Weekly AWPLR | 55,000,000 | 55,388,459 | – | Lien over cash security of
Rs. 61,238,348 in the name of the Company. |
Bank of Ceylon | Up to 90% – AEIR+3.50% p.a. | 50,000,000 | 49,982,739 | – | Lien over Fixed Deposit of Rs. 54,298,425 |
534,947,506 | 390,457,007 | ||||
New Nawaloka Hospital (Pvt) Ltd | |||||
Hatton National Bank PLC | AWPLR+2.5% | 50,000,000 | 50,000,000 | 50,000,000 | Secondary Floating Mortgage Bond for Rs. 290 Mn. over Nawaloka Hospitals leasehold premises (Lot A) and everything standing thereon (including buildings and/or the buildings which are to be constructed in the future together with any further developments, modifications or alterations thereto) with all fixtures, fittings, services and such other rights attached or appertaining thereto (the “Mortgaged Property”) |
AWPLR+1.75% | 100,000,000 | 100,000,000 | 100,000,000 | Secondary Floating Mortgage Bond for Rs. 390 Mn. over Nawaloka Hospitals leasehold premises (Lot A) and everything standing thereon (including buildings and/or the buildings which are to be constructed in the future together with any further developments, modifications or alterations thereto) with all fixtures, fittings, services and such other rights attached or appertaining thereto (the “Mortgaged Property”) |
|
New Nawaloka Medical Centre (Pvt) Ltd | |||||
Hatton National Bank PLC
Facility (e) (Note 29.3) |
AWPLR+1.5% | 200,000,000 | 200,000,000 | 200,000,000 | Registered primary floating mortgage bond for Rs. 775 Mn. over leasehold property at Sir James peries Mawatha, Colombo and everything standing thereon (including the existing buildings and or the buildings which are to be constructed in the future together with any further developments modification or alterations thereto) with all fixtures fittings services and such other rights attached or appertaining thereto. |
New Nawaloka Laboratories (Pvt) Ltd | |||||
Commercial Bank of Ceylon PLC | AWPLR+3% | 5,000,000 | 5,000,000 | – | Corporate guarantee of Nawaloka Hospitals PLC. |
889,947,506 | 740,457,007 |
25. Stated Capital
Ordinary Shares
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with LKAS 12.
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
1,409,505,596 Ordinary shares | 1,207,388,876 | 1,207,388,876 | 1,207,388,876 | 1,207,388,876 |
The holders of ordinary shares are entitled to receive dividends declared from time to time and are entitled to vote per share at General Meetings of the Company.
26. Revaluation Reserve
Nature and Purpose of Reserves
The revaluation reserve relates to revaluation of buildings on leasehold lands and represents the fair value changes of the buildings on lease hold lands as at the date of revaluation.
GROUP |
COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Balance as at 1 April | 4,539,320,195 | 4,539,320,195 | 419,462,058 | 419,462,058 |
Revaluation gain for the year, net of tax | 282,378,619 | – | 384,086 | – |
Balance as at 31 March | 4,821,698,814 | 4,539,320,195 | 419,846,144 | 419,462,058 |
27. Employee Benefits
Short-term Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided.
Defined Benefit Plan
Employees’ Provident Fund and Employees’ Trust Fund is a post-employment benefit plan under which an entity pays fixed contribution into a separate entity and will have no legal or constructive obligation to pay further amounts.
All the employees who are eligible for Employees’ Provident Fund and Employees’ Trust Fund are covered by relevant contribution funds in line with the respective statutes. Employer’s contribution to the defined contribution plans are recognised as an expense in the Statement of Comprehensive Income when incurred.
Defined Benefit Plan – Employee Benefits
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value.
The valuation is performed annually by a qualified actuary using the projected unit credit method. When the valuation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.
The Group recognises all actuarial gains and losses arising from defined benefit plans directly in the other comprehensive income and all expenses related to defined benefit plan in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Actuarial gains and lossesThe re-measurements of the net defined benefit liability, which comprise actuarial gains and losses are recognised in Other Comprehensive Income.
27.1 Contribution to Defined Contribution Plan
GROUP |
COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Employees’ Provident Fund | ||||
Employers’ contribution | 142,592,471 | 137,422,246 | 42,842,221 | 43,435,666 |
Employees’ contribution | 95,061,647 | 91,614,831 | 28,561,481 | 28,957,111 |
Employees’ Trust Fund | 35,648,117 | 34,355,562 | 10,710,555 | 10,858,917 |
27.2 Present Value of Defined Benefit Obligations
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Present value of defined benefit obligations |
372,337,378 | 330,451,934 | 230,534,064 | 221,806,402 |
27.2.a Movement in the Present Value of Defined Benefit Obligations (PV DBO)
GROUP |
COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Liability for defined benefit obligation as at 01 April |
330,451,934 | 252,546,976 | 221,806,402 | 172,779,008 |
Current service cost | 35,013,524 | 27,056,958 | 13,011,306 | 10,634,321 |
Interest cost | 40,480,360 | 49,070,937 | 27,171,284 | 33,691,906 |
Actuarial loss on PV DBO | 15,205,702 | 49,037,333 | 2,072,711 | 34,085,751 |
Payments made during the year | (48,814,142) | (47,260,270) | (33,527,639) | (29,384,584) |
Liability for defined benefit obligation as at 31 March |
372,337,378 | 330,451,934 | 230,534,064 | 221,806,402 |
27.2.b Amounts Recognised in the Income Statement
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Current service cost | 35,013,524 | 27,056,958 | 13,011,306 | 10,634,321 |
Interest cost | 40,480,360 | 49,070,937 | 27,171,284 | 33,691,906 |
75,493,884 | 76,127,895 | 40,182,590 | 44,326,227 |
27.2.c Amounts Recognised in Other Comprehensive Income
GROUP |
COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Actuarial loss recognised during the year | 15,205,702 | 49,037,333 | 2,072,711 | 34,085,751 |
Present value of defined benefit obligation as at 31 March 2025 is calculated based on an actuarial valuation carried out by Mr Piyal Gunathilaka, a qualified actuary.
As recommended by the Sri Lanka Accounting Standard (LKAS-19) "Employee Benefits" the projected Unit Credit (PUC) method has been used in this valuation.
The above liability is not externally funded.
27.2.d Actuarial Assumptions
2025 | 2024 |
|
Retirement age | 60 Years | 60 Years |
Discount rate | 11.00% | 12.25% |
Salary increment rate | 10% | 10% |
Staff turnover rate | 12.44% | 14% |
Weighted average duration | 5.8 Years | 5.5 Years |
Actuarial Assumptions
A long-term treasury bond rate of 11% p.a (2024 – 12.25% p.a) was used to discount future liabilities taking into consideration the remaining working life of employees.
In addition to the above, demographic assumptions such as mortality, withdrawal and disability and retirement age were considered for the actuarial valuation. GA 1983 Mortality Table issued by the Actuaries Committee was used to estimate the gratuity liability of the Company.
27.2.e Sensitivity Analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
1% Increase in discount rate | (18,600,174) | (17,422,486) | (11,317,456) | (10,139,768) |
1% Decrease in discount rate | 20,419,817 | 19,080,401 | 12,505,713 | 11,166,297 |
1% Increase in salary increment rate | 20,348,152 | 19,189,415 | 12,079,701 | 10,920,964 |
1% Decrease in salary increment rate | (18,851,966) | (17,806,572) | (11,144,046) | (10,098,652) |
27.3 Maturity Profile
The following payments are expected on account of employees benefit liability in future years.
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Within next 12 months | 60,909,206 | 58,913,235 | 46,772,420 | 46,613,758 |
Between 1 to 2 years | 50,981,190 | 34,286,440 | 35,768,820 | 20,853,888 |
Between 3 to 5 years | 186,241,530 | 176,540,752 | 76,000,697 | 90,180,409 |
Between 6 to 10 years | 323,107,057 | 352,709,231 | 182,762,338 | 219,660,041 |
621,238,983 | 622,449,658 | 341,304,275 | 377,308,096 |
28. Deferred Tax Liability
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial 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 profit or loss;
- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.
Deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits 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 enacted or substantively enacted at the reporting date and reflects uncertainty related to income taxes if any.The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Deferred tax assets | (344,722,353) | (278,029,162) | (280,839,578) | (217,163,339) |
Deferred tax liabilities | 3,921,619,883 | 3,627,377,452 | 524,613,586 | 440,850,498 |
Net deferred tax liabilities | 3,576,897,530 | 3,349,348,290 | 243,774,008 | 223,687,159 |
28.1 Movement in Deferred Tax
GROUP |
Company |
|||||||||||
For the year end 31 March 2025 |
Net balances as at 01 April Rs. | Recognised in profit or loss Rs. | Recognised in OCI Rs. | Total Rs. | Deferred tax assets Rs. | Deferred tax liabilities Rs. | Net Balances as at 01 April Rs. | Recognised in profit or loss Rs. | Recognised in OCI Rs. | Total Rs. | Deferred tax assets Rs. | Deferred tax liabilities Rs. |
Deferred Tax Liabilities | ||||||||||||
Property, plant and equipment (Including revaluation reserve) |
3,531,998,561 | 72,564,339 | 121,019,408 | 3,725,582,308 | – | 3,725,582,308 | 394,299,070 | (14,288,785) | 164,608 | 380,174,893 | – | 380,174,893 |
Investment in associate | 46,407,733 | 33,455,455 | – | 79,863,188 | – | 79,863,188 | 46,407,733 | 33,455,455 | – | 79,863,188 | – | 79,863,188 |
Right-of-use assets | 48,971,158 | 67,203,229 | – | 116,174,387 | – | 116,174,387 | 143,695 | 64,431,810 | – | 64,575,505 | – | 64,575,505 |
Deferred Tax Assets | ||||||||||||
Defined benefit obligation | (99,135,581) | (8,003,922) | (4,561,711) | (111,701,214) | (111,701,214) | – | (66,541,921) | (1,996,485) | (621,813) | (69,160,219) | (69,160,219) | – |
Provision for impairment of trade and other receivable |
(145,228,219) | (14,426,083) | – | (159,654,302) | (159,654,302) | – | (145,228,220) | (14,426,082) | – | (159,654,302) | (159,654,302) | – |
Provision for slow moving inventories | (8,342,672) | (566,947) | – | (8,909,619) | (8,909,619) | – | (5,286,567) | (59,205) | – | (5,345,772) | (5,345,772) | – |
Lease liability | (25,322,690) | (39,134,528) | – | (64,457,218) | (64,457,218) | – | (106,631) | (46,572,654) | – | (46,679,285) | (46,679,285) | – |
Net tax liabilities/(Assets) | 3,349,348,290 | 111,091,543 | 116,457,697 | 3,576,897,530 | (344,722,353) | 3,921,619,883 | 223,687,159 | 20,544,054 | (457,205) | 243,774,008 | (280,839,578) | 524,613,586 |
GROUP |
Company |
|||||||||||
For the Year end 31 March 2024 |
Net Balances as at 01 April Rs. |
Recognised in profit or loss Rs. |
Recognised in OCI Rs. |
Total Rs. |
Deferred tax assets Rs. |
Deferred Tax liabilities Rs. |
Net Balances as at 01 April Rs. |
Recognised in profit or loss Rs. |
Recognised in OCI Rs. |
Total Rs. |
Deferred tax assets Rs. |
Deferred tax liabilities Rs. |
Deferred Tax Liabilities | ||||||||||||
Property, plant and equipment (including revaluation reserve) |
3,518,552,177 | 13,446,384 | – | 3,531,998,561 | – | 3,531,998,561 | 420,696,389 | (26,397,319) | – | 394,299,070 | – | 394,299,070 |
Investment in associates | 23,982,808 | 22,424,925 | – | 46,407,733 | – | 46,407,733 | 23,982,808 | 22,424,925 | – | 46,407,733 | – | 46,407,733 |
Right-of-use assets | 75,367,275 | (26,396,117) | – | 48,971,158 | – | 48,971,158 | 16,903,143 | (16,759,448) | – | 143,695 | – | 143,695 |
Deferred Tax Assets | ||||||||||||
Defined benefit obligation | (75,764,094) | (8,660,287) | (14,711,200) | (99,135,581) | (99,135,581) | – | (51,833,703) | (4,482,493) | (10,225,725) | (66,541,921) | (66,541,921) | – |
Provision for impairment of trade receivables | (162,280,872) | 17,052,653 | – | (145,228,219) | (145,228,219) | – | (162,280,872) | 17,052,652 | – | (145,228,220) | (145,228,220) | – |
Provision for slow-moving inventories | (8,300,780) | (41,892) | – | (8,342,672) | (8,342,672) | – | (5,261,432) | (25,135) | – | (5,286,567) | (5,286,567) | – |
Lease liability | (38,194,001) | 12,871,311 | – | (25,322,690) | (25,322,690) | – | (4,852,176) | 4,745,545 | – | (106,631) | (106,631) | – |
Net tax liabilities/(assets) | 3,333,362,513 | 30,696,977 | (14,711,200) | 3,349,348,290 | (278,029,162) | 3,627,377,452 | 237,354,157 | (3,441,273) | (10,225,725) | 223,687,159 | (217,163,339) | 440,850,498 |
28.2 Analysis of Recognised Deferred Tax (Assets)/Liabilities
GROUP |
Company |
|||||||
2025 | 2024 |
2025 | 2024 |
|||||
Taxable/(Deductible) Temporary Difference Rs. |
Tax effect Rs. |
Taxable/(Deductible) Temporary Difference Rs. |
Tax effect Rs. |
Taxable/(Deductible) Temporary Difference Rs. |
Tax effect Rs. |
Taxable/(Deductible) Temporary Difference Rs. |
Tax effect Rs. |
|
Property, plant and equipment (including revaluation reserve) | 12,418,607,695 | 3,725,582,308 | 11,773,270,669 | 3,531,998,561 | 1,267,249,647 | 380,174,893 | 1,314,330,230 | 394,299,070 |
Investment in associate | 532,421,255 | 79,863,188 | 309,384,888 | 46,407,733 | 532,421,255 | 79,863,188 | 309,384,888 | 46,407,733 |
Defined benefit obligation | (372,337,378) | (111,701,214) | (330,451,934) | (99,135,580) | (230,534,064) | (69,160,219) | (221,806,402) | (66,541,921) |
Provision for impairment of trade and other receivables | (532,181,007) | (159,654,302) | (484,094,066) | (145,228,220) | (532,181,007) | (159,654,302) | (484,094,064) | (145,228,220) |
Provision for slow-moving inventories | (29,698,732) | (8,909,619) | (27,808,908) | (8,342,672) | (17,819,240) | (5,345,772) | (17,621,891) | (5,286,567) |
Right-of-use asset | 387,247,960 | 116,174,387 | 163,237,195 | 48,971,158 | 215,251,683 | 64,575,505 | 478,984 | 143,695 |
Lease liability | (214,857,398) | (64,457,218) | (84,408,966) | (25,322,690) | (155,597,618) | (46,679,285) | (355,437) | (106,631) |
12,189,202,405 | 3,576,897,530 | 11,319,128,678 | 3,349,348,290 | 1,078,790,656 | 243,774,008 | 900,316,308 | 223,687,159 |
28.3 Unrecognised Deferred Tax Asset
GROUP |
||||
2025 | 2024 |
|||
Deductible temporary difference Rs. | Tax effect Rs. | Deductible temporary difference Rs. |
Tax effect Rs. |
|
Accumulated tax losses | 4,638,095,475 | 1,391,428,643 | 3,983,300,822 | 1,194,990,247 |
4,638,095,475 | 1,391,428,643 | 3,983,300,822 | 1,194,990,247 |
company |
||||
2025 | 2024 |
|||
Deductible temporary difference Rs. | Tax effect Rs. | Deductible temporary difference Rs. |
Tax effect Rs. |
|
Accumulated tax losses | – | – | 118,377,148 | 35,513,144 |
– | – | 118,377,148 | 35,513,144 |
The deferred tax asset has not been recognised in respect of the above because it is not probable that future taxable profit will be available against which the Group/Company can utilise the benefits therefrom.
As at the reporting date, the Group has unutilised tax losses amounting to Rs. 1,062,301,997, Rs. 937,141,440, Rs. 496,596,864, Rs. 65,855,836, Rs. 1,111,704,174 and Rs. 956,475,309, which are scheduled to expire in the years of assessment 2024/25, 2025/26, 2026/27, 2027/28, 2028/29 and 2030/31 respectively.
The Group and Company has used the effective tax rate of 30% to calculate Deferred tax asset/liability on temporary difference as at 31 March 2025 (2024: 30%).
The Group assumes that investment in associate will primarily realise through dividends. As a results, deferred tax on related temporary difference is calculated at the effective tax rate of 15% (2024: 15%).
29. Borrowings
The accounting policies for borrowings has been given in Notes 12 and 34.
29.1 Borrowings from Financial Institutions
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
As at 01 April | 6,639,330,488 | 7,038,566,661 | 4,142,644,851 | 4,857,898,565 |
Exchange losses | (5,522,102) | (33,410,031) | (5,522,102) | (33,410,031) |
Loans obtained during the year | 2,019,000,000 | 3,594,834,000 | 2,019,000,000 | 3,594,834,000 |
Interest charge for the year | 712,346,276 | 1,199,917,300 | 461,158,689 | 821,424,871 |
Loans paid during the year | (2,685,540,031) | (5,160,577,442) | (2,685,540,031) | (5,098,102,554) |
Closing balance as at 31 March | 6,679,614,631 | 6,639,330,488 | 3,931,741,407 | 4,142,644,851 |
Borrowings falling due within one year | 5,155,748,423 | 4,649,917,456 | 2,407,875,199 | 2,153,231,819 |
Borrowings falling due after one year | 1,523,866,208 | 1,989,413,032 | 1,523,866,208 | 1,989,413,032 |
6,679,614,631 | 6,639,330,488 | 3,931,741,407 | 4,142,644,851 | |
Borrowing based on the financial institutions is as follows: | ||||
Amana Bank PLC | 365,500,000 | 215,160,765 | 365,500,000 | 215,160,765 |
Bank of Ceylon | 997,429,069 | 990,000,000 | 997,429,069 | 990,000,000 |
Commercial Bank of Ceylon PLC | 440,332,884 | 690,030,027 | 440,332,884 | 690,030,027 |
Seylan Bank PLC | 1,580,000,012 | 1,753,333,342 | 1,580,000,012 | 1,753,333,342 |
Hatton National Bank PLC | 3,296,352,666 | 2,990,806,354 | 548,479,442 | 494,120,717 |
6,679,614,631 | 6,639,330,488 | 3,931,741,407 | 4,142,644,851 |
29.2 Commercial Paper Borrowings
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
|
Balance as at 01 April | 41,272,091 | 246,601,386 | 41,272,091 | 246,601,386 |
Paid during the year | (42,011,539) | (245,040,124) | (42,011,539) | (245,040,124) |
Interest accrued | 739,448 | 39,710,829 | 739,448 | 39,710,829 |
Balance as at 31 March | – | 41,272,091 | – | 41,272,091 |
Commercial papers falling due within one year | – | 41,272,091 | – | 41,272,091 |
Commercial papers falling due after one year | – | – | – | – |
Total borrowings falling due within one year | 5,155,748,423 | 4,691,189,547 | 2,407,875,199 | 2,194,503,910 |
Total borrowings falling due after one year | 1,523,866,208 | 1,989,413,032 | 1,523,866,208 | 1,989,413,032 |
6,679,614,631 | 6,680,602,579 | 3,931,741,407 | 4,183,916,942 |
Details of Loans obtained by the Group are set out below:
Financial Institution |
Repayment Terms |
Security |
Principal |
Annual Interest |
Annual Repayment Rs. |
Balance as at
31 March 2025 Rs. |
Balance as at 31 March 2024 Rs. |
Long-term Loan | |||||||
Nawaloka Hospitals PLC | |||||||
Bank of Ceylon | Short-term revolving facilities | Joint & several guarantees of Directors – Dr H K J Dharmadasa, Mr Ugitha Harshith Dharmadasa and Mr Anisha Givantha Dharmadasa. | 1,000,000,000 | Money market loan rate | On demand | 997,429,069 | 990,000,000 |
Commercial Bank of Ceylon PLC |
Rs. 400 Mn. Series of import loans, to be repaid in a Maximum 60 Monthly Installments | Primary mortgage Bond over debit and credit card sales for Rs. 1,200,000,000/- to be executed over the card sales of the total hospital operations, Corporate Guarantee from New Nawaloka Hospitals (Pvt) Ltd. for Rs. 500,000,000/- to be signed by the Directors of the Company, Corporate Guarantee from New Nawaloka Medical Centre (Pvt) Ltd. for Rs. 500,000,000/- to be singed by the Directors of the Company. | 400,000,000 | AWPLR+1.5% & AWPLR+2% | 104,536,292 | 222,654,262 | 327,190,554 |
21 Monthly Equal installment Rs. 2,042,000 and Final Installment Rs. 2,070,000 | 1,000,000,000 | AWPLR+0.5% | 24,504,000 | 38,826,000 | 63,330,000 | ||
4 Monthly Installments of USD 2,000/-, 4 Monthly Installments of USD 10,000/-, 12 Monthly Installments of USD 15,000/-, 12 Monthly Installments of USD 20,000/-, 11 Monthly Installments of USD 25,000/- and Final Installment of USD 28,524.40/- | USD 3,200,000 | SOFR + 5% | 115,134,667 | 178,852,622 | 299,509,473 | ||
Hatton National Bank PLC | First 12 months Rs. 2.5 Mn. Next 29 months Rs. 4.9 Mn. and Final month Rs. 2.9 Mn. |
Secondary concurrent mortgage bond for Rs. 757 Mn. over Nawaloka Hospital PLC premises (lease hold) at No. 15, Sir James Peiris Mawatha, Colombo 02 and everything standing thereon with all fixtures, fittings, services and such other rights attached or appertaining thereto. |
175,000,000 | AWPLR+2.5% | – | 97,353,663 | 86,200,000 |
Hatton National Bank PLC | First 12 months Rs. 1.9 Mn. Next 24 months Rs. 9.5 Mn. Next 12 months Rs. 12.5 Mn. Next 5 months Rs. 25 Mn. & Final month Rs. 5.88 Mn. |
Secondary concurrent mortgage bond for Rs. 757 Mn. over Nawaloka Hospital PLC premises (lease hold) at No 15, Sir James Peiris Mawatha, Colombo 02 and everything standing thereon with all fixtures, fittings, services and such other rights attached or appertaining thereto. | 550,000,000 | AWPLR+2.5% | – | 451,125,779 | 407,144,657 |
Amana Bank PLC | Short term revolving facilities | Mortgage for Rs. 500,000,000/- over stocks located at Deshamanya H K Dharmadasa Mawatha Colombo 02. | 500,000,000 | AWPLR + 2% | On demand | 365,500,000 | 215,160,765 |
Seylan Bank PLC | 180 Days | (i) Assignment over credit and debit card receivables of minimum of Rs. 40 Mn. per Month (ii) assignment of insurance receipt totalling Rs. 20 Mn. per month (iii) corporate guarantee from New Nawaloka Hospital Pvt Ltd for Rs. 2.1 Bn. (iv) A letter of undertaking from Bank of Ceylon for assignment of 100% daily collections of Credit/Debit card receivables amounting to Rs. 70,000,000 (Minimum per month). |
100,000,000 | AWPLR+2.50% | On demand | 100,000,000 | 100,000,000 |
36 monthly installments of Rs. 13,333,333 24 Monthly installments of Rs. 20,000,000 12 monthly installments of Rs. 25,000,000 23 monthly installments of Rs. 30,833,333 and final installment of Rs. 30,833,353 | 2,000,000,000 | AWPLR+1.5% | 173,333,330 | 1,480,000,012 | 1,653,333,342 | ||
3,931,741,407 | 4,142,644,851 | ||||||
New Nawaloka Hospitals (Pvt) Ltd. | |||||||
Hatton National Bank PLC | 48 equal monthly installments | Secondary mortgage bond for Rs. 290 Mn. over Nawaloka Hospital leasehold property. | 200,000,000 | AWPLR+1.75% | On litigation | 97,707,649 | 87,263,147 |
97,707,649 | 87,263,147 |
Financial Institution |
Repayment Terms |
Security |
Principal |
Annual interest |
Annual repayment |
Balance as at
31 March 2025 Rs. |
Balance as at 31 March 2024 Rs. |
New Nawaloka Medical Centre (Pvt) Ltd. | |||||||
Hatton National Bank PLC (a) Note 29.3 | To be repaid over 07 years in 83 equal monthly installments Rs. 3.55 Mn. and final installment. | Registered primary floating mortgage bond for Rs. 775 Mn. over lease hold property at Sir James Peiris Mawatha and everything standing thereto. | 300,000,000 | AWPLR +1.75% | On litigation | 267,073,101 | 236,038,465 |
Hatton National Bank PLC (b) Note 29.3 | To be repaid over 07 years in 83 equal monthly installments Rs. 3.25 Mn. and final installment. | Same security pledged for facility 01. | 275,000,000 | AWPLR +1.75% | On litigation | 258,916,124 | 241,210,057 |
Hatton National Bank PLC (c) Note 29.3 | First 12 months Rs. 3.45 Mn., Next 12 months Rs. 12.5 Mn. Next 18 months Rs. 26 Mn. and Final months Rs. 24.06 Mn. |
Secondary mortgage bond of Rs. 1,535 Mn. over Nawaloka Hospital PLC premises leasehold property at Sir James peries Mw, Colombo and everything standing thereon (including the existing buildings and or the buildings which are to be constructed in the future together with any further developments modification or alterations thereto) with all fixtures fittings services and such other rights attached or appertaining thereto. | 683,460,000 | AWPLR +1.75% | On litigation | 919,202,952 | 834,144,917 |
Hatton National Bank PLC (d) Note 29.3 | First 12 months Rs. 3.45 Mn., Next 12 months Rs. 12.5 Mn. Next 24 months Rs. 26 Mn. and Final months Rs. 34.62 Mn. |
Same security pledged for facility 03. | 850,020,000 | AWPLR + 1.75% | On litigation | 1,204,973,399 | 1,098,029,051 |
2,650,165,576 | 2,409,422,490 |
29.3 Hatton National Bank PLC (HNB) has initiated recovery actions for loan facilities (a) and (b) mentioned in Note No. 29.2 and overdraft facility (e) mentioned in Note 24.1. The Bank has sent a letter demanding immediate settlement of facilities (c) and (d) mentioned in Note 29.2 on during the year ended 31 March 2023. The Company and HNB have agreed on a settlement arrangement and all the loans and dues to the bank were fully settled subsequent to 31 March 2025 by borrowing facilities from Bank of Ceylon.
30. Lease Liabilities
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Balance as at 01 of April | 84,408,971 | 35,567,215 | 355,437 | 16,173,920 |
Leases obtained during the year | 195,129,589 | 6,139,834 | 160,468,143 | – |
Remeasurement of leases | – | 38,993,679 | – | – |
Interest charge for the year | 28,891,617 | 34,410,953 | 625,064 | 1,267,891 |
Repayments during the year | (77,591,239) | (12,015,763) | (5,851,026) | (10,745,198) |
Derecognition of lease liability | (15,981,540) | (18,686,947) | – | (6,341,176) |
Balance as at 31 March | 214,857,398 | 84,408,971 | 155,597,618 | 355,437 |
Classification of lease liabilities | ||||
Current | 48,844,597 | 13,914,933 | 34,229,061 | 355,437 |
Non current | 166,012,801 | 70,494,038 | 121,368,557 | – |
214,857,398 | 84,408,971 | 155,597,618 | 355,437 | |
Maturity analysis of lease liabilities | ||||
Lease payable within one year | 48,844,597 | 13,170,113 | 34,229,061 | 355,437 |
Lease payable between 1 to 5 years | 106,537,801 | 56,398,737 | 121,368,557 | – |
Lease payable more than five years | 5,475,000 | 14,840,121 | – | – |
214,857,398 | 84,408,971 | 155,597,618 | 355,437 | |
Maturity Analysis of Undiscounted cash flows | ||||
Less than one year | 195,710,205 | 42,304,984 | 49,716,085 | 527,438 |
One to five years | 72,028,032 | 124,180,873 | 141,569,563 | – |
More than 5 years | 5,475,000 | 11,900,000 | – | – |
Total | 273,213,237 | 178,385,857 | 191,285,648 | 527,438 |
30.1 Amount Recognised in the Statement of Profit Loss and Other Comprehensive Income
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Amortization of right-of-use assets | (23,595,681) | (34,853,998) | (7,235,059) | (9,599,768) |
Interest costs | (28,891,617) | (34,410,953) | (625,064) | (1,267,891) |
(52,487,298) | (69,264,951) | (7,860,123) | (10,867,659) |
30.2 Amount Recognised in the Statement of Cash Flow
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Lease rental paid during the year | 48,699,622 | 12,015,763 | 5,225,962 | 10,745,198 |
31. Trade and Other Payables
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Profit or Loss net of any reimbursement.
Provisions are not recognised for future operating losses. The amount recognised as a provision shall be the best estimate of the expenditure required to settle the present obligation and the provision is reviewed at end of each reporting period and adjusted to reflect the current best estimate.
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Financial liabilities | ||||
Trade payables | ||||
– Related parties | 879,698,819 | 46,418,605 | 879,698,819 | 46,418,605 |
– Other | 245,744,476 | 1,030,757,133 | 33,801,052 | 762,198,292 |
1,125,443,295 | 1,077,175,738 | 913,499,871 | 808,616,897 | |
Doctors' payables | 38,838,260 | 33,941,470 | 37,549,500 | 33,157,000 |
1,164,281,555 | 1,111,117,208 | 951,049,371 | 841,773,897 | |
Non-financial liabilities | ||||
Other payables | 1,837,683,793 | 1,691,480,040 | 1,106,599,914 | 1,032,883,958 |
1,837,683,793 | 1,691,480,040 | 1,106,599,914 | 1,032,883,958 | |
3,001,965,348 | 2,802,597,248 | 2,057,649,285 | 1,874,657,855 |
32. Current Tax Liability/(Asset)
The accounting policy for income taxes has been given in Note 13.
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Balance as at 01 April | 108,461,007 | 86,468,332 | – | – |
Provision for the year | 169,170,009 | 15,447,527 | 162,411,929 | – |
Under provision | – | 11,595,548 | – | – |
Tax paid during the year | (53,999,997) | (5,050,396) | – | – |
Balance as at 31 March | 223,631,019 | 108,461,011 | 162,411,929 | – |
33. Amounts Due to Related Parties
The accounting policy for amount due to related parties has been given in Notes 38.
GROUP | COMPANY |
|||
As at 31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Nawaloka Construction (Pvt) Ltd. | 813,630 | 813,630 | – | – |
CAFÉ 77 (Pvt) Ltd. | 12,104,481 | 3,388,857 | 6,255,332 | 3,388,857 |
Mount Lavinia Medical Centre * | – | 4,525,675 | – | – |
Nawaloka Medical Centre Pvt Ltd. | 4,525,675 | – | – | – |
Nawaloka Laboratories (Pvt) Ltd. | – | – | 372,379,028 | 241,445,316 |
Nawaloka Guardian International (Pvt) Ltd. |
97,388,400 | – | 97,388,400 | – |
Mart 77 (Pvt) Ltd. | 120,118 | – | 23,263 | – |
Nawaloka College of Professional Studies (Pvt) Ltd. | 31,852,455 | – | 31,852,455 | – |
146,804,759 | 8,728,162 | 507,898,478 | 244,834,173 |
* These medical centres are operated under the legal entity Nawaloka Medical Centres (Pvt) Ltd.
34. Financial Assets and Liabilities
a. Financial Assets
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial 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 significant financing component is initially measured at the transaction price.
Classification and subsequent measurement of financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI (Fair value through OCI) – debt investment; FVOCI - equity investment; or FVTPL (Fair value through profit or loss).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the 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 specified 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 Group 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 financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL.On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets – Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group's continuing recognition of the assets.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, “principal” is defined as the fair value of the financial asset on initial recognition. “Interest” is defined as consideration for the time value of 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 profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument.
Financial assets – Subsequent measurement and 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 recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. |
Equity investments at FVOCI | These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss. |
Financial assets at FVTPL | These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income,are recognised in profit or loss. |
b. Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either
to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial liabilities: trade and other payables, borrowings, amounts due to Related Parties, debentures and bank overdrafts.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.
c. Derecognition
Financial assets
The Group derecognised a financial asset when the contractual rights to the cash flows from the financial 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 financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
The Group entered into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets were not derecognised.
Financial liabilities
The Group derecognised a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognised a financial liability when its terms are modified and the cash flows of the modified liability were substantially different, in which case a new financial liability based on the modified terms was recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) was recognised in profit or loss.
d. Offsetting
Financial assets and financial liabilities were offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Classification of financial assets and financial liabilities
The following table provides a reconciliation between line item in the statement of financial position and categories of financial instruments.
Group |
|||||
31 March |
2025 | 2024 |
|||
Amortised cost Rs. | FVTPL Rs. | Total Rs. | Amortised cost Rs. |
Total Rs. |
|
Financial assets | |||||
Trade and other receivables | 673,667,985 | – | 673,667,985 | 525,364,171 | 525,364,171 |
Amounts due from related companies | 1,100,663,709 | – | 1,100,663,709 | 638,506,708 | 638,506,708 |
Other investments | 243,925,710 | 25,411,623 | 269,337,333 | 239,841,334 | 239,841,334 |
Cash and cash equivalents | 349,810,089 | – | 349,810,089 | 231,146,238 | 231,146,238 |
Total financial assets | 2,368,067,493 | 25,411,623 | 2,393,479,116 | 1,634,858,451 | 1,634,858,451 |
Financial liabilities | |||||
Lease liabilities | 214,857,398 | – | 214,857,398 | 84,408,971 | 84,408,971 |
Borrowings | 6,679,614,631 | – | 6,679,614,631 | 6,680,602,579 | 6,680,602,579 |
Trade creditors and other payables | 1,164,281,555 | – | 1,164,281,555 | 1,111,117,208 | 1,111,117,208 |
Unclaimed dividends | 4,592,917 | – | 4,592,917 | 4,592,917 | 4,592,917 |
Amounts due to related companies | 146,804,759 | – | 146,804,759 | 8,728,162 | 8,728,162 |
Bank overdrafts | 889,947,506 | – | 889,947,506 | 740,457,007 | 740,457,007 |
Total financial liabilities | 9,100,098,766 | – | 9,100,098,766 | 8,629,906,844 | 8,629,906,844 |
Company |
|||||
2025 | 2024 |
||||
Amortised cost Rs. | FVTPL Rs. | Total Rs. | Amortised cost Rs. |
Total Rs. |
|
Financial assets | |||||
Trade and other receivables | 589,971,726 | – | 589,971,726 | 472,456,676 | 472,456,676 |
Amounts due from related companies | 4,640,561,597 | – | 4,640,561,597 | 4,071,163,411 | 4,071,163,411 |
Other investments | 198,340,301 | 25,411,623 | 223,751,924 | 193,272,101 | 193,272,101 |
Cash and cash equivalents | 266,835,093 | – | 266,835,093 | 188,689,377 | 188,689,377 |
Total financial assets | 5,695,708,716 | 25,411,623 | 5,721,120,339 | 4,925,581,566 | 4,925,581,566 |
Financial liabilities | |||||
Lease liabilities | 155,597,618 | – | 155,597,618 | 355,437 | 355,437 |
Borrowings | 3,931,741,407 | – | 3,931,741,407 | 4,183,916,942 | 4,183,916,942 |
Trade creditors and other payables | 951,049,371 | – | 951,049,371 | 841,773,897 | 841,773,897 |
Unclaimed dividends | 4,592,883 | – | 4,592,883 | 4,592,883 | 4,592,883 |
Amounts due to related companies | 507,898,484 | – | 507,898,484 | 244,834,173 | 244,834,173 |
Bank overdrafts | 534,947,506 | – | 534,947,506 | 390,457,007 | 390,457,007 |
Total financial liabilities | 6,085,827,269 | – | 6,085,827,269 | 5,665,930,339 | 5,665,930,339 |
35. Fair Value Measurement
Fair Value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as “active” if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pric g a transaction.
If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid price and liabilities and short position at an ask price.
The best evidence of the fair value of a financial instrument or initial recognition is normally the transaction price- i.e. the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability not based on a valuation techniques for which any unobservable inputs are judged to be insufficient in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, the difference is recognized in profit or loss on an appropriate basis over the life of the instrument but not later than when the valuation is wholly supported by observable market data or the transaction is closed out.
The Group measures the fair value using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurement. An analysis of the fair value measurement of financial and non-financial assets and liabilities are provided below:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
When available, the Group measures the fair value of an instrument using active quoted prices or dealer price quotations (assets and long positions are measured at a bid price; liabilities and short positions are measured at an ask price), without any deduction for transaction costs. A market is regarded as active if transactions for asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
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).
This category includes instruments valued using;
- quoted prices in active markets for similar instruments,
- quoted prices for identical or similar instruments in markets that are considered to be less active, or
- other valuation techniques in which almost all significant inputs are directly or indirectly observable from market data.
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
Group |
|||||||
31 March 2025 |
Classification |
Total Carrying Amount Rs. | Fair Value Rs. | Level 1 Rs. | Level 2 Rs. | Level 3 Rs. | Total Rs. |
Financial Assets measured at Fair value | |||||||
Investment in Unit Trust | FVTPL | 25,411,623 | 25,411,623 | – | 25,411,623 | – | 25,411,623 |
Investment in unquoted shares | Fair value through OCI | – | – | – | – | – | – |
Financial assets not measured at fair value | |||||||
Cash and cash equivalents | Amortised cost | 174,755,351 | 174,755,351 | – | 174,755,351 | – | 174,755,351 |
Trade and other receivables | Amortised cost | 673,667,985 | 673,667,985 | – | – | 673,667,985 | 673,667,985 |
Receivable from related parties | Amortised cost | 1,100,663,709 | 1,100,663,709 | – | – | 1,100,663,709 | 1,100,663,709 |
Investment in fixed deposits | Amortised cost | 243,925,710 | 243,925,710 | – | 243,925,710 | – | 243,925,710 |
2,193,012,755 | 2,193,012,755 | – | 418,681,061 | 1,774,331,694 | 2,193,012,755 | ||
Financial liabilities not measured at fair value | |||||||
Lease liabilities | Amortised cost | 214,857,398 | 214,857,398 | – | – | 214,857,398 | 214,857,398 |
Borrowings | Amortised cost | 6,679,614,631 | 6,679,614,631 | – | – | 6,679,614,631 | 6,679,614,631 |
Trade and other payables | Amortised cost | 1,164,281,555 | 1,164,281,555 | – | – | 1,164,281,555 | 1,164,281,555 |
Payable to related companies | Amortised cost | 146,804,759 | 146,804,759 | – | – | 146,804,759 | 146,804,759 |
Unclaimed dividend | Amortised cost | 4,592,917 | 4,592,917 | – | – | 4,592,917 | 4,592,917 |
Bank overdraft | Amortised cost | 889,947,506 | 889,947,506 | – | 889,947,506 | – | 889,947,506 |
9,100,098,766 | 9,100,098,766 | – | 889,947,506 | 8,210,151,260 | 9,100,098,766 |
COMPANY |
|||||||
31 March 2025 |
Classification |
Total Carrying Amount Rs. | Fair Value Rs. | Level 1 Rs. | Level 2 Rs. | Level 3 Rs. | Total Rs. |
Financial Assets measured at Fair value | |||||||
Investment in Unit Trust | FVTPL | 25,411,623 | 25,411,623 | – | 25,411,623 | – | 25,411,623 |
Investment in unquoted shares | Fair value through OCI | – | – | – | – | – | – |
Financial assets not measured at fair value | |||||||
Cash and cash equivalents | Amortised cost | 132,857,263 | 132,857,263 | – | 132,857,263 | – | 132,857,263 |
Trade and other receivables | Amortised cost | 589,971,726 | 589,971,726 | – | – | 589,971,726 | 589,971,726 |
Receivable from related parties | Amortised cost | 4,640,561,597 | 4,640,561,597 | – | – | 4,640,561,597 | 4,640,561,597 |
Investment in fixed deposits | Amortised cost | 198,340,301 | 198,340,301 | – | – | 198,340,301 | 198,340,301 |
5,561,730,887 | 5,561,730,887 | – | 132,857,263 | 5,428,873,624 | 5,561,730,887 | ||
Financial liabilities not measured at fair value | |||||||
Lease liabilities | Amortised cost | 155,597,618 | 155,597,618 | – | – | 155,597,618 | 155,597,618 |
Borrowings | Amortised cost | 3,931,741,407 | 3,931,741,407 | – | – | 3,931,741,407 | 3,931,741,407 |
Trade and other payables | Amortised cost | 951,049,371 | 951,049,371 | – | – | 951,049,371 | 951,049,371 |
Payable to related companies | Amortised cost | 507,898,478 | 507,898,478 | – | – | 507,898,478 | 507,898,478 |
Unclaimed dividend | Amortised cost | 4,592,883 | 4,592,883 | – | – | 4,592,886 | 4,592,886 |
Bank overdraft | Amortised cost | 534,947,506 | 534,947,506 | – | 534,947,506 | – | 534,947,506 |
6,085,827,263 | 6,085,827,263 | – | 534,947,506 | 5,550,879,757 | 6,085,827,263 |
Group |
|||||||
31 March 2024 |
Classification |
Total Carrying Amount Rs. |
Fair Value Rs. |
Level 1 Rs. |
Level 2 Rs. |
Level 3 Rs. |
Total Rs. |
Financial Assets measured at Fair value | |||||||
Investment in Unquoted Shares/FVOCI | – | – | – | – | – | – | |
Financial assets not measured at fair value | |||||||
Cash and cash equivalents | Amortised cost | 172,035,123 | 172,035,123 | – | 172,035,123 | – | 172,035,123 |
Trade and other receivables | Amortised cost | 525,364,171 | 525,364,171 | – | – | 525,364,171 | 525,364,171 |
Receivable from related parties | Amortised cost | 638,506,708 | 638,506,708 | – | – | 638,506,708 | 638,506,708 |
Investment in fixed deposits | Amortised cost | 239,841,334 | 239,841,334 | – | 239,841,334 | – | 239,841,334 |
1,575,747,336 | 1,575,747,336 | – | 411,876,457 | 1,163,870,879 | 1,575,747,336 | ||
Financial liabilities not measured at fair value | |||||||
Lease liabilities | Amortised cost | 84,408,971 | 84,408,971 | – | – | 84,408,971 | 84,408,971 |
Borrowings | Amortised cost | 6,680,602,579 | 6,680,602,579 | – | – | 6,680,602,579 | 6,680,602,579 |
Trade and other payables | Amortised cost | 1,111,117,208 | 1,111,117,208 | – | – | 1,111,117,208 | 1,111,117,208 |
Payable to related companies | Amortised cost | 8,728,162 | 8,728,162 | – | – | 8,728,162 | 8,728,162 |
Unclaimed dividend | Amortised cost | 4,592,917 | 4,592,917 | – | – | 4,592,917 | 4,592,917 |
Bank overdraft | Amortised cost | 740,457,007 | 740,457,007 | – | 740,457,007 | – | 740,457,007 |
8,629,906,844 | 8,629,906,844 | – | 740,457,007 | 7,889,449,837 | 8,629,906,844 |
COMPANY |
|||||||
31 March 2024 |
Classification |
Total Carrying Amount Rs. |
Fair Value Rs. |
Level 1 Rs. |
Level 2 Rs. |
Level 3 Rs. |
Total Rs. |
Financial Assets measured at Fair value | |||||||
Investment in Unquoted Shares/FVOCI | – | – | – | – | – | – | |
Financial assets not measured at fair value | |||||||
Cash and cash equivalents | Amortised cost | 131,358,560 | 131,358,560 | – | 131,358,560 | – | 131,358,560 |
Trade and other receivables | Amortised cost | 472,456,676 | 472,456,676 | – | – | 472,456,676 | 472,456,676 |
Receivable from related parties | Amortised cost | 4,071,163,411 | 4,071,163,411 | – | – | 4,071,163,411 | 4,071,163,411 |
Investment in fixed deposits | Amortised cost | 193,272,101 | 193,272,101 | – | – | 193,272,101 | 193,272,101 |
4,868,250,748 | 4,868,250,748 | – | 131,358,560 | 4,736,892,188 | 4,868,250,748 | ||
Financial liabilities not measured at fair value | |||||||
Lease liabilities | Amortised cost | 355,437 | 355,437 | – | – | 355,437 | 355,437 |
Borrowings | Amortised cost | 4,183,916,942 | 4,183,916,942 | – | – | 4,183,916,942 | 4,183,916,942 |
Trade and other payables | Amortised cost | 841,773,897 | 841,773,897 | – | – | 841,773,897 | 841,773,897 |
Payable to related companies | Amortised cost | 244,834,173 | 244,834,173 | – | – | 244,834,173 | 244,834,173 |
Unclaimed dividend | Amortised cost | 4,592,883 | 4,592,883 | – | – | 4,592,883 | 4,592,883 |
Bank overdraft | Amortised cost | 390,457,007 | 390,457,007 | – | 390,457,007 | – | 390,457,007 |
5,665,930,339 | 5,665,930,339 | – | 390,457,007 | 5,275,473,332 | 5,665,930,339 |
** Classes of financial instruments that are not carried at fair value and of which carrying amounts are a reasonable approximation of fair value. This includes trade and other receivables, cash and cash equivalents, trade payable, other payables, amounts due to and due from related parties and bank overdraft. The carrying amounts of these financial assets and liabilities are a reasonable approximation of fair values due to their short term nature.
36. Financial Risk Management
The Group has exposure to the following risks arising from financial instruments:
- Credit risk (Note 36.2)
- Liquidity risk (Note 36.3)
- Market risk (Note 36.4)
- Operational risk (Note 36.5)
36.1 Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.
The Group's risk management policies are established to identify and analyse the risk faced by the Group, to set appropriate risk limit and controls, and to monitor risk and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group Audit Committee monitors the process through which business risks are identified for action by management and for the Board's attention and monitors the effectiveness of the Company's internal controls. The Audit Committee is assisted in its role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of controls and procedures, the results of which are reported to the Audit Committee.
36.2 Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investments in debt securities.
The carrying amounts of financial assets and contract assets represent the maximum credit exposure.
Impairment losses on financial assets and contract assets recognised in profit or loss were as follows.
GROUP | COMPANY |
|||
As at 31 March, | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Impairment loss on trade receivables and amounts due from related companies | 108,981,199 | 11,396,495 | 106,266,372 | (11,708,015) |
108,981,199 | 11,396,495 | 106,266,372 | (11,708,015) |
Trade receivables and contract assets
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate.
The Group trades only with recognised, creditworthy third parties. It is the Group's policy that all clients who wish to trade on credit terms are subject to credit verification procedures and contractual agreements made for every high–value transactions. in addition, receivable balances are monitored on an ongoing basis with the results that the Group's exposure to bad debts is not significant.
The Group does not require collateral in respect of trade and other receivables. The group does not have trade receivable and contract assets for which no loss allowance is recognised because of collateral.
The carrying amount of financial assets represent the maximum credit exposure. The maximum exposure to the credit risk is as follow:
GROUP | COMPANY |
|||
31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Other investments | 269,337,333 | 239,841,334 | 223,751,924 | 193,272,101 |
Trade and other receivables | 673,667,985 | 525,364,171 | 589,971,726 | 472,456,676 |
Amount due from related parties | 1,100,663,709 | 638,506,708 | 4,640,561,597 | 4,071,163,411 |
Cash and cash equivalents | 174,755,351 | 172,035,123 | 132,857,263 | 131,358,560 |
2,218,424,378 | 1,575,747,336 | 5,587,142,510 | 4,868,250,748 |
The exposure to credit risk for trade receivables and contract assets by type of counterparty was as follows.
GROUP | COMPANY |
|||
31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
Local government | 40,109,549 | 47,178,873 | 40,109,549 | 47,178,873 |
Insurance companies | 263,918,363 | 138,956,173 | 263,918,363 | 138,956,173 |
Other corporate clients | 547,249,506 | 610,931,532 | 547,249,506 | 610,931,532 |
Other | 91,246,087 | 65,421,804 | 81,145,442 | 55,237,317 |
942,523,505 | 862,488,382 | 932,422,860 | 852,303,895 |
The following table provides information about the exposure to credit risk and ECLs for trade receivables and contract assets as at 31 March 2024 and 2025.
GROUP |
||||
As at 31 March 2025 |
Weighted average loss rate | Gross carrying amount Rs. | Loss allowance Rs. | Credit impaired |
Current and < 12 months | 16% | 555,402,188 | 88,532,544 | No |
Past due > 12 months | 100% | 387,121,317 | 387,121,317 | No |
942,523,505 | 475,653,861 |
Company |
||||
As at 31 March 2025 |
Weighted average loss rate | Gross carrying amount Rs. | Loss allowance Rs. | Credit impaired |
Current and < 12 months | 16% | 547,433,443 | 88,532,544 | No |
Past due > 12 months | 100% | 384,989,417 | 384,989,417 | No |
932,422,860 | 473,521,961 |
GROUP/Company |
||||
As at 31 March 2024 |
Weighted average loss rate |
Gross carrying amount Rs. |
Loss allowance Rs. |
Credit impaired |
Current and < 12 months | 14% | 494,784,170 | 67,658,974 | No |
Past due > 12 months | 100% | 367,704,212 | 367,704,212 | No |
862,488,382 | 435,363,184 |
Cash and cash equivalents with banks
The Group and the Company held cash and cash equivalents of Rs. 174,755,351/- and Rs. 132,857,263 at 31 March 2025 (2024: Rs. 172,035,123/- and Rs. 131,358,560/-). The Group has selected its banker by considering the credit rating of the rating agencies, the reputation in economy, efficiency in transaction processing by minimizing the transaction cost.
The financial institutions in which the deposits and cash at bank existed are guaranteed by local and foreign credit agencies as -BBB or better.
Amounts due from related parties
Provision for impairment on amounts due from related parties are assessed individually considering the financial status of these related parties.
36.3 Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure , as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group maintains the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the succeeding 60 days. The Group also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables. In addition, the Group maintains Rs. 620 Mn. secured overdraft facility that is the interest would be payable at market rate.
It is not expected that cash flows included in the maturity analysis would occur significantly earlier or at significantly different amount.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.
GROUP |
|||||
31 March 2025 |
Carrying amount Rs. | Contractual Cash Flows Rs. | Less than 1 year Rs. | 1–5 years Rs. | More than 5 years Rs. |
Non-derivative financial liabilities | |||||
Borrowings | 6,679,614,631 | 10,318,410,312 | 8,303,384,393 | 1,975,025,907 | 40,000,012 |
Trade creditors and other payables |
1,164,281,555 | 1,164,281,555 | 1,164,281,555 | – | – |
Unclaimed dividends | 4,592,917 | 4,592,917 | 4,592,917 | – | – |
Lease liabilities |
214,857,398 | 282,757,486 | 72,028,031 | 205,254,455 | 5,475,000 |
Payable to related companies | 146,804,759 | 146,804,759 | 146,804,759 | – | – |
Bank overdrafts | 889,947,506 | 889,947,506 | 889,947,506 | – | – |
9,100,098,766 | 11,136,578,550 | 4,621,752,073 | 4,548,023,526 | 1,966,802,951 |
31 March 2024 |
Carrying amount Rs. |
Contractual Cash Flows Rs. |
Less than 1 year Rs. |
1–5 years Rs. |
More than 5 years Rs. |
Non-derivative financial liabilities | |||||
Borrowings | 6,680,602,579 | 6,680,602,579 | 4,691,189,547 | 1,989,413,032 | – |
Trade creditors and other payables |
1,111,117,208 | 1,111,117,208 | 1,111,117,208 | – | – |
Unclaimed dividends | 4,592,917 | 4,592,917 | 4,592,917 | – | – |
Lease liabilities | 84,408,971 | 178,385,857 | 42,304,944 | 124,180,873 | 11,900,000 |
Payable to related companies | 8,728,162 | 8,728,162 | 8,728,162 | – | – |
Bank overdrafts | 740,457,007 | 740,457,007 | 740,457,007 | – | – |
8,629,906,844 | 8,723,883,730 | 6,598,389,785 | 2,113,593,905 | 11,900,000 |
Company |
|||||
31 March 2025 |
Carrying amount Rs. | Contractual Cash Flows Rs. | Less than 1 year Rs. | 1–5 years Rs. | More than 5 years Rs. |
Non-derivative financial liabilities | |||||
Borrowings | 3,931,741,407 | 3,931,741,407 | 5,892,164,558 | 3,873,479,365 | 1,978,685,181 |
Trade creditors and other payables |
951,049,371 | 951,049,371 | 951,049,371 | – | – |
Unclaimed dividends | 4,592,917 | 4,592,917 | 4,592,917 | – | – |
Lease liabilities |
155,597,618 | 191,285,648 | 49,716,085 | 141,569,563 | - |
Payable to related companies | 507,898,484 | 507,898,484 | 507,898,484 | – | – |
Bank overdrafts | 534,947,506 | 534,947,506 | 534,947,506 | – | – |
6,085,827,303 | 6,121,515,333 | 7,940,368,921 | 4,015,048,928 | 1,978,685,181 | |
31 March 2024 |
Carrying amount Rs. |
Contractual Cash Flows Rs. |
Less than 1 year Rs. |
1–5 years Rs. |
More than 5 years Rs. |
Non-derivative financial liabilities | |||||
Borrowings | 4,183,916,942 | 4,183,916,942 | 6,113,264,136 | 3,251,619,690 | 2,801,644,434 |
Trade creditors and other payables |
841,773,897 | 841,773,897 | 841,773,897 | – | – |
Unclaimed dividends | 4,592,917 | 4,592,917 | 4,592,917 | – | – |
Lease liabilities |
355,437 | 527,438 | – | – | – |
Payable to related companies | 244,834,173 | 244,834,173 | 244,834,173 | – | – |
Bank overdrafts | 390,457,007 | 390,457,007 | 390,457,007 | – | – |
5,665,930,373 | 5,666,102,374 | 7,594,922,130 | 3,251,619,690 | 2,801,644,434 |
The Company has used Overdraft of Rs. 534,947,506/– at the end of 2025 (2024: Rs. 390,457,007).
2025 |
2024 |
|||
Overdraft |
Facility
Available Rs. |
Facility
Utilised Rs. |
Facility Available Rs. |
Facility Utilised Rs. |
Hatton National Bank PLC | 375,000,000 | 375,000,000 | 375,000,000 | 375,004,159 |
DFCC Bank PLC | 210,000,000 | 202,900,225 | 240,000,000 | 205,547,189 |
Commercial Bank of Ceylon PLC | 205,000,000 | 204,297,117 | 150,000,000 | 150,000,000 |
Seylan Bank PLC | 10,000,000 | 2,378,966 | 10,000,000 | 9,905,649 |
Nation Trust Bank PLC | 55,000,000 | 55,388,459 | 55,000,000 | – |
Bank of Ceylon | 50,000,000 | 49,982,739 | – | – |
905,000,000 | 889,947,506 | 830,000,000 | 740,457,007 |
36.4 Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Currency Risk
The Group is exposed to currency risk on receipts, payments and borrowings that are denominated in a currency other than Sri Lankan Rupees.
In respect of monetary assets and liabilities denominated in foreign currencies, the Group's policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
The Group is exposed to currency risk on borrowings and supplier payable balances that are denominated in a currency other than Sri Lankan Rupees (Rs.). The foreign currency in which the set transactions primarily denominated is United Stated Dollars (USD).
Exposure to Currency risk
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
GROUP | COMPANY |
|||
31 March |
2025 USD |
2024 USD |
2025 USD |
2024 USD |
Interest bearing borrowings | 603,524 | 980,924 | 603,524 | 980,924 |
Supplier payable balance | 55,102 | 132,043 | – | – |
658,626 | 1,112,967 | 603,524 | 980,924 |
The following significant exchange rates were applicable during the year;
Average rate |
Reporting date spot rate |
|||
31 March | 2025 Rs. |
2024 Rs. | 2025 Rs. |
2024 Rs. |
USD | 297.92 | 301.18 | 296.35 | 300.44 |
Sensitivity Analysis
A strengthening or weakening of the Sri Lankan Rupee, as indicated below, against the USD as at the reporting date would have increased/(decreased) the equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group/Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant.
Strengthening Rs. |
Weakening Rs. |
|
As at 31 March 2025 | ||
USD (10% movement) | (19,518) | 19,518 |
As at 31 March 2024 | ||
USD (10% movement) | (33,438) | 33,438 |
Interest Rate Risk
Interest rate is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s interest rate risk arises mainly from the borrowings. The fluctuation in the Average Weighted Prime Lending Rate (AWPLR) results in the effective interest rate of the borrowings usually without a corresponding change in the fair value. The Group analyses the interest rate exposure on a dynamic basis monitoring AWPLR."
The Monetary Board of Central Bank of Sri Lanka (CBSL) has decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) after the reporting date and this may impact the future profitability of the Group.
The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the Group is as follows.
GROUP | COMPANY |
|||
As at 31 March 2025 | As at 31 March 2024 |
As at 31 March 2025 | As at 31 March 2024 |
|
Fixed-rate instruments | ||||
Financial assets | 269,337,333 | 239,841,334 | 223,751,924 | 193,272,101 |
Financial liabilities | 125,681,062 | 125,681,062 | 41,627,528 | 41,627,528 |
395,018,395 | 365,522,396 | 265,379,452 | 234,899,629 | |
Variable-rate instruments | ||||
Financial assets | – | – | – | – |
Financial liabilities | 7,528,290,041 | 7,379,787,490 | 4,425,416,822 | 4,533,101,858 |
7,528,290,041 | 7,379,787,490 | 4,425,416,822 | 4,533,101,858 |
Sensitivity Analysis
The following table demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the profit before tax. A reasonably possible of +/- 1% is used, consistent with current trends in interest rates.
Group |
Company |
|||
+1% (100 Basis Points) Impact on Profit Rs. ‘000 |
-1% (100 Basis Points) Impact on Profit Rs. ‘000 |
+1% (100 Basis Points) Impact on Profit Rs. ‘000 |
-1% (100 Basis Points) Impact on Profit Rs. ‘000 |
|
31 March 2025 | ||||
Financial liabilities | ||||
Interest bearing loans and borrowings | 75,283 | (75,283) | 44,254 | (44,254) |
31 March 2024 | ||||
Financial liabilities | ||||
Interest bearing loans and borrowings | (73,798) | 73,798 | (45,331) | 45,331 |
36.5 Operational Risk
‘Operational risk’ is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks – e.g. those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Company’s operations.
The Company’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Company’s reputation with overall cost effectiveness and innovation. In all cases, Company policy requires compliance with all applicable legal and regulatory requirements.
The Board of Directors has established Board Integrated Risk Management Committee, which is responsible for the development and implementation of controls to address operational risk. This responsibility is supported by the development of overall Company standards for the management of operational risk in the following areas:
- requirements for appropriate segregation of duties, including the independent authorisation of transactions;
- requirements for the reconciliation and monitoring of transactions;
- compliance with regulatory and other legal requirements;
- documentation of controls and procedures;
- requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified;
- requirements for the reporting of operational losses and proposed remedial action;
- development of contingency plans;
- training and professional development;
- ethical and business standards;
- information technology and cyber risks; and
- risk mitigation, including insurance where this is cost-effective.
Compliance with Company standards is supported by a programme of periodic reviews undertaken by Internal Audit. The results of Internal Audit reviews are discussed with the Company Operational Risk Committee, with summaries submitted to the Audit Committee and senior management of the Company.
37. Capital Management
The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain development of the business. Capital consists of ordinary shares, retained earnings and revaluation reserve of the Group. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.
The Group's net debt to adjusted equity ratio at the reporting date was as follow:
As at
31 March 2025 |
As at
31 March 2024 |
|
Total liabilities |
15,110,648,486 | 14,109,648,119 |
Less: Cash and cash equivalents |
349,810,089 | 231,146,238 |
Net debt |
14,760,838,397 | 13,878,501,881 |
Total equity |
4,912,863,399 | 4,585,398,428 |
Net debt to adjusted equity ratio |
3.00 | 3.03 |
38. Related Party Transactions
The Company carries out transactions in the ordinary course of its business with parties who are defined as related parties in Sri Lanka Accounting Standard (LKAS 24) "Related Party Disclosures”, the details of which are reported below. The pricing applicable to such transactions is based on the assessment of risk and pricing model of the Company and is comparable with what is applied to transactions between the Company and its unrelated customers.
38.1 Transactions with Key Management Personnel (KMP)
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the entity directly or indirectly.
KMP of the Company
The Board of Directors of the Company has been classified as KMP of the Company.
KMP of the Group
(a) Compensation of key management personnel
GROUP | COMPANY |
|||
2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 |
|
Short-term employee benefits | 45,225 | 71,642 | 45,225 | 71,642 |
45,225 | 71,642 | 45,225 | 71,642 |
(B) Other transactions
GROUP |
COMPANY |
|||
2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 |
|
Rendering of services | 20,993 | 35,732 | 20,993 | 31,768 |
Close family members (CFM) of Key Management Personnel
CFM of a KMP are those family members who may be expected to influence, or be influenced by, that KMP in their dealings with the entity. They may include KMP's domestic partner and children, children of the KMP's domestic partner and dependants of the KMP or the KMP's domestic partner, CFM are related parties to the Group/ Company.
38.2 Transactions with related parties
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 2024 audited financial statements, which required additional disclosures in the 2024/25 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.
Recurrent related party transactions
There were no recurrent related party transactions, except for below, which in aggregate value exceeds 10% of the consolidated revenue of the Group as per 31 March 2024 audited financial Statements, which required additional disclosures in the 2024/25 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.
New Nawaloka Hospitals (Pvt) Ltd and New Nawaloka Medical Centre (Pvt) Ltd which are fully owned subsidiaries of the company are situated in the same premises and operated under the Nawaloka Hospitals brand name with the company and therefore revenue and the expenses could occur mutually. However the net transactions values of recurrent transactions and Non recurrent transactions does not exceed the 10% of the consolidated revenue or 10% of the Equity of the Company respectively.
Transactions with Subsidiaries – Company
Name of the Company |
New Nawaloka Hospitals (Pvt) Ltd |
New Nawaloka Medical Centre (Pvt) Ltd |
Nawaloka Laboratories (Pvt) Ltd |
Shareholding | 100% | 100% | 100% |
2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs.’000 | 2025 Rs. |
2024 Rs. ’000 |
|
Opening balance due (to)/from subsidiaries | 165,222 | 358,718 | 3,282,730 | 3,380,208 | (241,445) | (81,842) |
Provision of services | 1,835,298 | (776,435) | 45,580 | (689,635) | (131,059) | (620,133) |
Cost of pharmaceutical and general stores items | 806,310 | 623,939 | 857,198 | 658,867 | 125 | 460,530 |
Transfer to other debtor | – | – | ||||
Fund transfer | (2,604,484) | (41,000) | (831,585) | (66,711) | ||
Closing balance due (to)/from subsidiaries | 202,346 | 165,222 | 3,353,923 | 3,282,730 | (372,379) | (241,445) |
Directors | Dr H K J Dharmadasa | Dr H K J Dharmadasa | Dr H K J Dharmadasa | |||
Mr A G Dharmadasa | Mr A G Dharmadasa | Mr A G Dharmadasa | ||||
Prof L G Chandrasena | Prof L G Chandrasena |
Transactions with subsidiaries are carried out in the ordinary course of the business except the funding provided for New Nawaloka Medical Centre (Pvt) Ltd to invest on multi storied building with car park facilities. New Nawaloka Medical Centre (Pvt) Ltd and New Nawaloka Hospitals (Pvt) Ltd are fully owned subsidiaries of Nawaloka Hospitals PLC. All three companies are located in the same premises and operational decisions as well as investment / expansion decisions are also executed as a single entity with common staff. As such, neither specific terms and conditions nor guarantees were agreed in relating to the funding of New Nawaloka Medical Centre (Pvt) Ltd to invest on multi storied building with car park facilities.
Outstanding balance relating to this transaction is included in the current account as disclosed in Note 38.2 to these financial statements and considered as repayable on demand. Current account balances at year end are unsecured, interest free and settlement occurs in cash.
Transactions with Other Related parties – Company
Name of the Company |
Transfer to other debtor |
Investment in associate |
Rendering of services/ Sale of Goods |
Receiving of services/ Purchase of Goods |
Fund Transfer |
Balance as at 31 March Due (To)/From |
||||||
2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 | 2025 Rs. |
2024 Rs. ’000 | |
Nawaloka Aviation (Pvt) Ltd. | – | – | – | – | – | – | – | – | – | – | 4,479 | 4,479 |
M Branch (Pvt) Ltd. | – | – | – | – | – | – | – | – | – | – | 16,216 | 16,216 |
Nawaloka Construction Co.(Pvt) Ltd. | – | – | – | – | – | – | 30,589 | – | (16,481) | 28,000 | 101,651 | 87,543 |
Nawaloka Engineering | – | – | – | – | – | – | 517 | – | (517) | 2,835 | 4,405 | 4,405 |
Nawaloka ACG Aluminium Company (Pvt) Ltd. |
– | – | – | – | – | 86 | – | – | – | – | 96 | 96 |
Nawaloka Medical Centres (Pvt) Ltd. | – | – | – | – | – | 19,435 | 15,473 | (59,675) | 971 | – | 261,499 | 245,054 |
Nawaloka Guardian International (Pvt) Ltd. | – | – | – | – | – | 2,601 | 7,590 | – | (107,579) | (29,622) | (97,388) | 2,601 |
Nawaloka College of Higher Studies (Pvt) Ltd. |
– | – | – | – | – | – | – | – | – | – | 33,013 | 33,013 |
Nawaloka College of Professional Studies (Pvt) Ltd. | – | – | – | – | – | 174 | (13,024) | – | (19,002) | – | (31,852) | 174 |
Nawaloka Institute of Health care (Pvt) Ltd. | – | – | – | – | – | – | (7,327) | – | (2,056) | 3,305 | 3,244 | 12,627 |
Polysacks Sharjah U.A.E | – | – | – | – | – | – | – | – | – | – | 22,429 | 22,429 |
Redline Services (Pvt) Ltd. | – | – | – | – | – | – | 9,000 | – | 2,000 | – | 11,000 | – |
Nawata Group (Pvt) Ltd. | – | – | – | – | – | 23,231 | 3,281 | – | 30,847 | – | 63,159 | 29,031 |
Nawaloka Steel Industries (Pvt) Ltd. | – | – | – | – | – | – | 1,214 | – | (72,309) | 14,491 | 238,843 | 309,938 |
Sasiri Polysacks (Pvt) Ltd. | – | – | – | – | – | 29,555 | 1,026 | – | 30,466 | – | 145,629 | 114,137 |
New Ashford International (Pvt) Ltd. | – | – | – | – | – | – | – | (455) | – | – | 3,050 | 3,050 |
Cafe 77 (Pvt) Ltd. | – | – | – | – | (9,208) | – | 42,094 | – | (35,752) | – | (6,255) | (3,389) |
Mart 77 (Pvt) Ltd. | – | – | – | – | – | – | (23) | – | – | – | (23) | – |
Alcobronz (Pvt) Ltd. | – | – | – | – | – | – | – | – | – | – | 11,000 | 11,000 |
Nawaloka Research & Education Foundation | – | – | – | – | – | – | – | – | – | 800 | 8,800 | 8,800 |
Healthways (Pvt) Ltd. | – | – | – | – | – | – | – | – | 9,412 | – | 9,412 | – |
Nawaloka Forwarding Agents (Pvt) Ltd. | – | – | – | – | – | – | – | – | 445,110 | – | 445,110 | – |
Yiwu Trading (Pvt) Ltd. | – | – | – | – | – | – | 4,224 | – | 30,260 | – | 34,484 | – |
JD design studio (Pvt) Ltd. | – | – | – | – | – | – | 75 | – | – | – | 75 | – |
Nawaloka Petroleum (Pvt) Ltd. | – | – | – | – | – | 8,000 | – | – | 11,000 | – | 12,873 | 1,873 |
39. Commitments
There were no contract for capital expenditure of material amounts approved or contracted for
as at the reporting date for the Company/Group.
40. Contingent Liabilities
A provision is recognised if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised in profit or loss.
Contingent liabilities are disclosed if there is a possible future obligation as a result of a past event, or if there is a present obligation as a result of a past event but either a payment is not probable or the amount cannot be reasonably estimated.
Use of Judgments and Estimates
Provisions and Contingencies
The Company receives legal claims against it in the normal course of business. Management has made judgment 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 benefits. Timing and cost ultimately depend on the due process in the respective legal jurisdictions.
Pending Litigations against Company/Group
Based on the available information, the Management is of the view that there are no material litigation or claims other than those disclosed below that could have material impact on the financial position on the Group. Accordingly, no provision has been made for following legal claims in the Financial Statements.
The Board of Directors of the Company having consulates the legal council have determined that no provision is required for the below cases outstanding against the Group as at 31 March 2025.
40.1 District Court of Colombo – Case DMR 5339/19 and Civil Appellate High Court of Colombo – Case WP HCCA 87/2023 LA Supreme Court Case No. SC HCCA 90/25
Plaintiff filed a case against the Company and one other claiming damages of Rs. 102 Mn. on the grounds of negligence of the defendants. An application was made under the Civil procedure code on 21 June 2022 to produce documents specified in the application for inspection. On 17 May 2023 the learned district judge allowed the application of the plaintiff and permitted him to inspect the documents specified in the application.
The Company, being aggrieved by the said order, filed a leave to Civil Appellate High Court against the said order. The Civil Appellate High Court was dismissed on 5 February 2025, and the Company has filed a further appeal to the Supreme Court under Case No. SC HCCA LA 90/2025, which is has now been fixed for 16 March 2026.
Having considered the status of the matter, the Company concluded that no provision is required to be made in the financial statements for the year ended 31 March 2025.
40.2 District Court of Colombo – Case DMR 3969/19
A case has been filed against the Company alleging medical negligence in the death of a patient, valuing the action at Rs. 107 Mn. The matter was scheduled for Pre-Trial but was postponed several times. The case has now been re-fixed for Pre-Trial on 29 September 2025.
The Company has concluded that no provision is required in the Financial Statements for the year ended 31 March 2025.
40.3 District Court of Colombo – Case DMR 1376/23
The plaintiff by his plaint dated on 21 July 2023 sought Rs. 100 Mn. as damages for physical and mental pain due to medical negligence and cost of litigation. On 08 May 2025, counsel for the Defendant applied to vacate an ex parte order.
Since the Plaintiff was absent, the Defendant was directed to issue notice. The matter has been re-fixed for 07 October 2025.
The Company has concluded that no provision is required to be made in the Financial Statements for the year ended 31 March 2025.
40.4 District Court of Colombo – Case DMR 565/23
Plaintiffs have filed a case against the Company and others claiming damages of Rs. 10 Mn. due to alleged negligence. The matter has been fixed for Answer of the 1st and 2nd Defendants on 05 December 2025.
Having considered the preliminary stage of the matter Company has concluded that no provision is required to be made in the Financial Statements for the year ended 31 March 2025.
40.5 Labour Tribunal – Case No. 08/28/2024
An Applicant has filed a case at the Labour Tribunal against the Company seeking release of gratuity forfeited by the Respondent. The case has been heard on several occasions. Cross-examination was completed on 04 August 2025; the matter has been adjourned for re-examination and to call a new witness on 30 September 2025.
Having considered the preliminary stage of the matter Company has concluded that no provision is required to be made in the Financial Statements for the year ended 31 March 2025.
41. Events After The Reporting Period
Events after the reporting period are those events, favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue.
All material events after the reporting date have been considered and where appropriate, adjustments or disclosures have been made in the respective notes to the financial statements.
Company/Group
41.1 Settlement of Loans and dues to Hatton National Bank PLC
As disclosed in Note 29.3 of the financial statements, Hatton National Bank PLC commenced debt recovery proceedings and initiated a Parate Execution for the outstanding loan owed by New Nawaloka Medical Centre (Pvt) Ltd in April 2023. In response to the legal action, the Company successfully obtained an interim injunction from the courts in May 2023, temporarily halting the Parate execution.
Subsequently, Group reached out to a settlement agreement with Hatton National Bank PLC and all loans and dues to this Bank were fully settled amounting to Rs. 3,350 Mn. on 23 May 2025 by obtaining borrowings from Bank of Ceylon.
42. Comparative Information
The Financial Statements for the comparative periods comprise results for the 12 month periods from 1 April 2023 to 31 March 2024. In this circumstance,the comparative information for the Financial Position, Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity and Cash Flow Statements and related notes are comparable with the current period.
The previous year figures and phrases have been rearranged wherever necessary to conform to current year's presentation.
43. Directors’ Responsibility
The Board of Directors is responsible for the preparation and presentation of the financial statements in accordance with Sri Lanka Accounting Standards.
44. Going Concern
Group/Company
The Group has recorded a net profit of Rs. 56,381,099 (2024: Net loss of Rs. 304,747,263) for the year ended 31 March 2025. As of that date, accumulated losses amounted to Rs. 1,116,224,291 (2024: Rs. 1,161,310,643) and Current liabilities of the Group exceeded its current assets by Rs. 6,402,347,185 as at 31 March 2025 (2024: Rs. 6,239,297,496).
Notwithstanding these, the Directors have considered the Group’s existing cash resources and available unutilised borrowing facilities as at the date of the audit report and have concluded their judgement that these conditions do not give rise to a material uncertainty casting significant doubt on the Group’s ability to continue as a going concern. In particular, the Directors have concluded that the Group’s unutilised borrowing facilities totalling approximately Rs. 5,547 Mn. will remain available throughout the next twelve months from 31 March 2025, and the Group will be able to utilise these facilities to avoid any financial distress.
In addition, the Board’s assessment considered the improvements to the financial performance of both the Group and the Company during the year. This is evident through the increasing gross profit, reduction in net current liability position, and the turnaround in profitability compared to the previous year.
Furthermore, the Group continues to focus on a range of new operational and financial strategic plans aimed at sustaining its future profitability and growth. Key initiatives that support this include the following:
- The Group successfully executed a comprehensive debt restructuring plan, significantly reducing its interest cost and improving financial stability.
- The Group is in the process of developing an AI-powered chatbot for Nawaloka, aimed at enhancing patient engagement, streamlining inquiries, and improving overall service delivery.
- The Group is expanding into a new venture, thereby strengthening its regional presence and widening access to healthcare services.
- During the year, the Group stepped into medical tourism, targeting international patients with specialised packages designed to enhance the Group’s service portfolio and foreign currency inflows.
- The Radiology Department, which was upgraded in the previous year, has been further strengthened through the import of a brand-new AI-assisted CT Scan machine and upgraded MRI facilities, positioning the Group at the forefront of diagnostic imaging technology.
- The Physiotherapy Unit was renovated and upgraded to offer enhanced rehabilitation services.
- A Sleep Lab was established during the year, introducing advanced diagnostic facilities for sleep-related disorders, thereby diversifying the Group’s specialty offerings.
- The Fertility Centre was further upgraded with advanced technology and infrastructure to expand its service capacity.
- Maternity Ward renovations were carried out to improve patient comfort, safety, and service standards.
- The Group expanded its laboratory footprint by opening new laboratories, thereby increasing accessibility and broadening diagnostic service coverage.
Having considered these factors and the expected improvements in financial performance through these collective strategies, the Board of Directors has determined that the Company and the Group possess adequate resources to sustain their operations well into the foreseeable future. Furthermore, the Board of Directors of the Group does not have any intention to liquidate the Company or the Group or to cease operations in the near future.