Financial Statements

Notes to the financial statements

1. Corporate Information

1.1 General

The Overseas School of Colombo (Guarantee) Limited is a Company limited by guarantee, which incorporated and domiciled in Sri Lanka. The registered office and the principal place of business of the Company is located at No. 09, Pelawatte, Battaramulla, Sri Lanka.

1.2 Principal activities and nature of operations

The principal activity for which the Company was established is to carry on the educational services.

1.3 Date of authorisation for issue

The Financial Statements of The Overseas School of Colombo (Guarantee) Limited for the year ended 31 July 2020 were authorised for issue by the Board of Directors on 5 November 2020.

2. Basis of preparation

The Financial Statements of The Overseas School of Colombo (Guarantee) Limited have been prepared in accordance with Sri Lanka Accounting Standards for Small and Medium-sized Entities (SLFRS for SMEs) issued by The Institute of Chartered Accounts of Sri Lanka.

2.1 Statement of compliance

The Financial Statements have been prepared on a historical cost basis. The Financial Statements are presented in Sri Lankan Rupees. The preparation and presentation of these Financial Statements is in compliance with the Companies Act No. 07 of 2007.

2.1.1 Going concern

Due to the significant uncertainty arising from the COVID-19 pandemic, the Management has assessed the existing and anticipated effects of COVID-19 on the Company and the appropriateness of the use of the going concern basis. The Company evaluated the resilience of its businesses considering a wide range of factors, relating to expected revenue, cost management, profitability, ability to defer non-essential capital expenditure, debt repayment restatements, and the amount of undrawn borrowing facilities, and potential sources of financing facilities.

The Directors, after due consideration of the range and likelihood of outcomes are satisfied that the Company have adequate resources to continue in operational existence for the foreseeable future and continue to adopt the going concern basis in preparing and presenting these Financial Statements.

In determining the above significant management judgements, estimates and assumptions the impact of COVID-19 pandemic has considered as of reporting date.

The Directors have made an assessment of the Company’s ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Therefore, the Financial Statements continue t be prepared on going concern basis.

2.1.2 Comparative information

The accounting policies have been consistently applied by the Company are consistent with those used in previously.

2.1.3 Presentation and functional currency

The Financial Statements are prepared in Sri Lankan Rupees, the Company’s functional and presentation currency, which is the primary economic environment in which the Company operates.

2.2 Significant accounting judgements, estimates and assumptions

2.2.1 Critical judgements in applying the accounting policies

In the process of applying the Company’s accounting policies, Management has made the following judgements, which have the most significant effect on the amounts recognised in the Financial Statements.

(a) Deferred taxation

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax that can be recognised based upon the likely timing and the levels of future taxable profits together with future tax planning strategies.

(b) Allowance for doubtful debts

The Company reviews at each date of the statement of financial position all receivables to assess whether an allowance should be recorded in the profit or loss. The Management uses judgement in estimating such amounts in the light of the duration of outstanding and any other factors Management in aware of that indicate uncertainty in recovery.

2.2.2 Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation of uncertainty at the reporting date, that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below:

The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(a) Defined benefit plans

The cost as well as the present value of the defined benefit plan, gratuity is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases and other important related data. Due to the long-term nature of employee benefits, such estimates are subject to significant uncertainty. Further details of assumptions are given in Note 12.

(b) Useful lives of property, plant and equipment

The Company reviews the assets’ residual values, useful lives and methods of depreciation or amortisation at each reporting date; judgement by Management is exercised in the estimation of these values, rates and methods.

2.3 Summary of significant accounting policies

2.3.1 Foreign currency translation

The Financial Statements are presented in Sri Lankan Rupees, which is the Company's functional and presentation currency. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the date of the statement of financial position. All differences are taken to profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

2.3.2 Taxation

Current taxes

Income tax is measured at the amounts expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amounts are those that are enacted or substantively enacted by the balance sheet date.

The provision for income tax is based on the elements of income and expenditure as reported in the Financial Statements and computed in accordance with the provisions of the Inland Revenue Act.

Deferred taxation

Deferred income tax is provided, using the liability method, on temporary differences at the date of the statement of financial position between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each date of the statement of financial position and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the date of the statement of financial position.

Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except where the sales tax incurred on a purchase of assets or service is not recoverable from the taxation authorities in which case the sales tax is recognised as a part of the cost of the asset or part of the expense items as applicable and receivable and payable that are stated with the amount of sales tax included. The amount of sales tax recoverable and payable in respect of taxation authorities is included as a part of receivables and payables in the statement of financial position.

2.3.3 Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

2.3.4 Intangible assets

All computer software cost incurred, licensed for use by the Company which is not integrally related to the associate hardware, can be clearly identified, reliably measured and it is probable that they will lead to future economic benefits are included in the statement of financial position under the category intangible assets and carried at the cost less accumulated amortisation and accumulated impairment losses if any.

Expenditure incurred on intangible assets is capitalised only when it future economic benefits embodied in the specific assets to which it relates. All other expenditure is expensed as incurred.

Intangible assets are amortised on a straight-line basis over a period of three years in the statements of comprehensive income from the date when the asset is available for use, over the best estimate of its useful economic life. The amortisation period and the amortisation method for intangible assets are reviewed at least at each financial year end.

2.3.5 Receivables

Receivables are stated at the amounts they are estimated to realise net of provisions for doubtful receivables.

2.3.6 Cash and cash equivalents

Cash and short-term deposits are cash in hand, demand deposits and short-term highly liquid investments, readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and deposits in banks net of outstanding bank overdrafts. Investments with short maturities i.e. three months or less from the date of acquisition are also treated as cash equivalents.

2.3.7 Property, plant and equipment

Property, plant and equipment except for freehold land and buildings are stated at cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment in value. Such cost includes the cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria are met.

Revaluation of land and buildings are carried out with sufficient frequency to ensure that the fair value of the land does not materially differ from its carrying amount and professionally qualified valuer undertakes it.

Depreciation is calculated on a straight-line basis over the useful life of the assets.

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 derecognising of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised.

The asset's residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year-end.

2.3.8 Leasehold rights

Leasehold rights represent a contract in which the right-of-use of a land is conveyed for a period of a time in exchange for consideration. At the date of commencement of a lease, the lessee recognised in the statement of financial position as right-of-use of land and a liability to make lease payments. Leasehold rights are amortised over the remaining leased period.

2.3.9 Short-term investments

Short-term Investments comprise investments in fixed deposits and are initially measured at transaction cost.

2.3.10 Project funds

Project funds wholly consist of funds collected by the pupils and teachers of the school for various social activities and projects which are maintained by the school, for administrative purposes of collection, retention and disbursement as required by the projects.

2.3.11 Employee benefits

(a) Defined benefit plan – Gratuity

Defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company's obligation in respect of defined benefit plans is calculated by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. The benefit is discounted to determine its present value.

The discounted rate is yield at the reporting date on government bonds that have maturity dates approximating to the terms of the Company’s obligations. The calculation is performed by a qualified actuary using the Project Unit Credit Method.

However, under the Payment of Gratuity Act No. 12 of 1983, liability to an employee arises only on completion of five years of continual service.

The liability is not externally funded.

(b) Defined contribution plans – Employees’ Provident Fund and Employees’ Trust Fund

Employees are eligible for Employees’ Provident Fund contributions and Employees’ Trust Fund contributions in line with the respective statutes and regulations. The Company contributes 12% and 3% of gross emoluments of employees to Employees’ Provident Fund and Employees’ Trust Fund respectively.

2.3.12 Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses of continuing operations are recognised in the statement of profit or loss and other comprehensive income in those expense categories consistent with the function of the impaired asset. For assets, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss and other comprehensive income.

2.3.13 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and sales taxes. The following specific criteria are used for the purpose of recognition of revenue.

(a) Tuition fee income

The main source of revenue for the Company is tuition fee which is recognised on accrual basis for each semester.

(b) Interest

Interest income is recognised on an accrual basis.

(c) Others

Other Income is recognised on an accrual basis.

Net gains and losses of a revenue nature on the disposal of property, plant and equipment are accounted for in the income statement, having deducted from proceeds on disposal, the carrying amount of the assets and related selling expenses.

Gains and losses arising from incidental activities to main revenue generating activities and those arising from a group of similar transactions which are not material, are aggregated, reported and presented on a net basis.

2.3.14 Expenditure recognition

(a) Expenses in carrying out the school and other activities of the Company are recognised in the statement of comprehensive income during the year in which they are incurred. Other expenses incurred in administering and running the trust and in restoring and maintaining the property, plant and equipment to perform at expected levels are accounted for on an accrual basis and charged to the statement of comprehensive income.

(b) For the purpose of presentation of the statement of comprehensive income, the Management is of the opinion that the function of expenses method, presents fairly the elements of the Company’s performance, and hence such a presentation method is adopted.

3. Property, plant and equipment

3.1 Gross carrying amounts

as at
during the
Increase in

Disposal/ Transfers/
during the year
as at
At valuation
Freehold land 236,151,000 95,289,000 331,440,000
Buildings on freehold land 292,184,849 42,804,151 334,989,000
Buildings on leasehold land 692,816,000 216,947,500 909,763,500
1,221,151,849 355,040,651 1,576,192,500
At cost
Plant and machinery 137,341,830 3,193,568 (69,001) 140,466,397
Computer equipment 147,047,295 22,017,468 (3,033,566) 166,031,198
Furniture and fittings 61,956,085 1,589,277 63,545,361
Motor vehicles 50,054,019 50,054,019
396,399,229 26,800,313 (3,102,567) 420,096,975
Assets under construction
Buildings 11,710,686 2,749,531 14,460,217
11,710,686 2,749,531 14,460,217
1,629,261,764 29,549,844 355,040,651 (3,102,567) 2,010,749,692

3.2 Accumulated depreciation

as at 1.8.2019
Charge for the year

Disposal/ Transfers
during the year
Balance as at
At valuation
Buildings on freehold land 21,913,864 7,324,634 (29,238,498)
Buildings on leasehold land 51,961,200 17,367,853 (69,329,053)
73,875,064 24,692,487 (98,567,551)

as at 1.8.2019
Charge for
the year
during the year
Balance as at
At cost
Plant and machinery 107,376,819 14,955,634 (19,566) 122,312,887
Computer equipment 100,493,516 30,990,873 (3,033,566) 128,450,823
Furniture and fittings 53,282,118 3,464,849 56,746,967
Motor vehicles 27,513,853 7,394,557 34,908,410
288,666,306 56,805,913 (3,053,132) 342,419,087
362,541,370 81,498,400 (101,620,683) 342,419,087

3.3 Net book value

At valuation
Freehold land 331,440,000 236,151,000
Buildings on freehold land 334,989,000 270,270,985
Buildings on leasehold land 909,763,500 640,854,800
1,576,192,500 1,147,276,785
At cost
Plant and machinery 18,153,510 29,965,011
Computer equipment 37,580,375 46,553,779
Furniture and fittings 6,798,394 8,673,967
Motor vehicles 15,145,609 22,540,166
77,677,888 107,732,923
1,653,870,388 1,255,009,709

3.4 Assets under construction

At valuation
Buildings 14,460,217 11,710,686
14,460,217 11,710,686


During the financial year, the Company acquired property, plant and equipment to the aggregate value of LKR 29,545,844/- (2019 – LKR 57,722,736/-) of which cash payments amounting to LKR 29,545,844/- (2019 – LKR 57,722,736/-) were made during the year for purchase of property, plant and equipment.


The useful lives of the assets of the Company are estimated as follows:

2020 2019
Buildings 40 years 40 years
Plant and machinery 4 years 4 years
Furniture and fittings 5 years 5 years
Computer equipment 3 years 3 years
Motor vehicles 6 2/3 years 6 2/3 years


Property, plant and equipment includes fully depreciated assets having a gross carrying amounts of LKR 25,668,888/- (2019 – LKR 24,334,205/-).

Valuation of land and building were independently carried out by Mr Siri Nissanka, a Chartered and incorporated Valuer who has recent experience in valuing properties of similar location and categories. Fair value of the properties was determined using the market comparable method. The valuations have been performed by the valuer and are based on proprietary data bases of process of transactions for properties of similar nature, location, and condition.

Significant unobservable valuation input Amount
Price per perch 4,000,000
Price per sq. ft. – Buildings 7,500
Price per sq. ft. – Gymnasium 8,000
Price per sq. ft. – Auditorium 8,000

3.8 The carrying amounts for revalued land and buildings that would have been included in the Financial Statements has the asset been carried at cost is as follows:

Asset Cost

Net book value

Land 4,381,439 4,381,439
Building on freehold land 55,926,817 21,978,320 33,948,497
Building on leasehold land 348,880,467 84,933,264 263,947,203

4. Leasehold rights – Land

Balance as at the beginning of the year 53,970,000 53,970,000
Additions during the year
Balance as at the end of the year 53,970,000 53,970,000
Accumulated depreciation
Balance as at the beginning of the year 13,968,701 13,333,760
Charge for the year 634,941 634,941
Balance as at the end of the year 14,603,642 13,968,701
Carrying amount as at end of the year 39,366,358 40,001,299

The Overseas School of Colombo entered into a 99-year Land Lease agreement with the Urban Development Authority in 1983 for the purpose of erecting buildings for school use. A ground rent of LKR 1,103,700/- was paid as ground lease rent in advance for 99 years. The Company will pay LKR 500/- as annual lease rental. Leasehold land was revalued in 1996/97 by P B Kalugalagedera, an independent professional valuer on current market value basis. The valuation amount of to LKR 52,866,300/- was recognised in the Financial Statements and amortised over the lease period. No subsequent revaluation were carried out in relation to the leasehold right in accordance with the SoAT issued by CA Sri Lanka.

5. Intangible assets

Balance as at the beginning of the year 12,013,991 6,052,643
Additions during the year 5,961,348
Balance as at the end of the year 12,013,991 12,013,991
Accumulated amortisation
Balance as at the beginning of the year 7,401,136 5,312,174
Amortisation for the year 2,361,044 2,088,962
Balance as at the end of the year 9,762,180 7,401,136
Carrying amount as at end of the year 2,251,811 4,612,855

5.1 Useful life of intangible assets

2020 2019
Computer software 3 years 3 years


During the financial year, the Company has acquired Intangible assets to the aggregate value of LKR NIL (2019 – LKR 5,961,348/-) of which cash payments amounting to LKR NIL (2019 – LKR 5,961,348/-) were made during the year for purchase of intangible assets.

6. Receivables and prepayments

Trade receivables 25,166,239 33,297,501
Less: Provision for bad and doubtful debts (12,176,805) (22,532,238)
12,989,434 10,765,263
Prepayments 108,503,172 125,103,259
Advances to suppliers 28,959,996 7,474,561
Deposits 23,576,568 18,659,320
Loans and advances to school staff 4,276,298 3,614,543
Interest receivable 17,209,033
Other receivables 990,536 291,480
179,296,003 183,117,458

7. Short-term investments

Investments 886,195,827 996,665,535
886,195,827 996,665,535

8. Cash and cash equivalents in the cash flow statement

Favourable cash and cash equivalent balance
Cash at bank 261,065,209 127,950,979
261,065,209 127,950,979
Unfavourable cash and cash equivalent balance
Cash at bank (22,166,400) (33,999,274)
Total cash and cash equivalents for the purpose of cash flow statement 238,898,809 93,951,705

9. Post-employment benefit plan

Defined benefit plan – Gratuity (Note 9.1) 152,410,295 111,019,006
Defined contribution plan – Expatriate pension payable (Note 9.2) 8,570,484 14,813,960
160,980,779 125,832,966

9.1 Defined benefit plan – Gratuity

Defined benefit plan as at the beginning of the year 111,019,007 105,636,541
Actuarial loss 39,967,507 9,215,120
Benefits paid during the year (28,988,066) (27,594,004)
Current service costs and interest 30,411,847 23,761,349
Defined benefit plan as at the end of the year 152,410,295 111,019,006
Expense on defined benefit plan
Current service cost 15,925,162 12,141,330
Interest cost 14,486,685 11,620,019
30,411,847 23,761,349

Principle assumptions

An actuarial valuation of the gratuity liability was carried out as at 31 July 2020 by Mr Piyal S Goonetilleke FSA, of Piyal S Goonetilleke and Associates.

The following are the principle actuarial assumptions at the reporting date.

2020 2019
Normal retirement age 55 years 55 Years
Rate of discount 7.0% 11.0%
Salary increment rate Sri Lankan staff 6.0% 5.3%
Expatriate staff 6.0% 5.3%

9.2 Defined contribution plan – Expatriate pension payable

Defined contribution plan as at beginning of the year 14,813,961 13,690,978
Provision made during the year 32,734,391 25,870,929
Recovery made from salary 33,721,852 36,418,169
Payment made during the year (72,699,720) (61,166,116)
Defined contribution plan as at end of the year 8,570,484 14,813,961

10. Project funds

Balance as at the beginning of the year 18,648,579 17,225,431
Fund receipts/collection 7,182,202 6,362,448
Fund disbursements (3,794,396) (4,939,300)
Balance as at the end of the year 22,036,385 18,648,579

11. Payables

Fees received in advance 50,763,746 169,191,344
Refundable deposits 20,994,226 22,361,409
Other creditors 9,976,935 29,149,693
Accrued expenses 7,337,697 13,325,362
Sundry creditors 3,315,563 11,022,105
Contractor retention 2,692,956
Other payables 1,240,588 1,588,945
NBT payables 1,815,052
93,628,755 251,146,865

12. Income

Registration fees – Gross 129,875,416 119,385,988
Tuition fees – Gross 1,277,378,509 1,102,911,092
Income before indirect taxes 1,407,253,925 1,222,297,080
Less: NBT (12,905,308) (24,436,359)
1,394,348,617 1,197,860,721

13. Direct expenses

Wages and salaries - Expatriate 556,605,145 545,263,446
- Locals 199,752,964 204,292,760
In-service training 21,033,986 25,960,481
777,392,095 775,516,687

14. Administrative expenses

Staff expenses 172,435,526 166,002,903
Depreciation on property, plant and equipment 81,498,400 81,658,904
Senior, primary and pre-school activities 56,002,551 55,473,001
Maintenance charges 48,140,670 50,411,693
Utilities, rent and rates, insurance 45,048,426 48,965,582
Stationery, computer, year book/publications and library books 42,539,665 51,737,521
Defined contribution plan 41,233,172 40,687,475
Expatriate pension provision 32,123,560 25,870,929
Defined benefit obligations 30,411,847 23,761,349
Local travelling expenses 26,574,494 21,295,705
Security charges 15,239,215 10,517,989
Physical education 10,427,241 8,454,543
Accreditation 7,496,250 997,665
Recruitment 7,339,171 8,862,079
Marketing expenses 5,089,942 6,870,869
Entertainment expenses 4,888,094 4,298,039
Board expenses 3,355,585 1,208,236
Provision for bad and doubtful debtors 3,335,016 6,055,307
Bank charges 2,872,892 2,876,953
Amortisation of computer software 2,361,044 2,088,962
Medical and other activities 1,624,688 2,045,221
Professional and consultancy fees 1,458,508 917,044
Office supplies and sundry expenses 733,009 270,551
Amortisation of leasehold land 634,941 634,941
Postage, courier and stamp duty 473,591 514,301
Professional fees – Audit fee and other 598,372 733,201
643,935,870 623,210,964

15. Investment income

Foreign exchange gain 67,133,574 117,778,989
Interest income on fixed deposits 43,260,261 38,104,606
Interest income on saving accounts 5,238,992 5,518,974
115,632,827 161,402,568

16. Other income

Transport income 28,325,556 25,351,888
US grant income 10,968,000 12,846,625
Payable written back 9,578,984
Gain on disposal of property, plant and equipment 53,785 706,061
Other income 37,399
48,926,325 38,941,973

17. Income tax expenses

Current income tax
Current tax expense on ordinary activities for the year (Note 16.1)
Under/(over) provision of current taxes in respect of prior years 184,408
Deferred tax charge/(reversal) (Note 16.3) 21,429,209 832,126
21,613,617 832,126


Reconciliation between current tax expense and the product of accounting profit multiplied by the statutory tax rate is as follow:

Accounting profit 137,579,804 (522,388)
Aggregate disallowed items 123,218,762 145,872,862
Aggregate allowable expenses (245,214,808) (353,024,514)
Assessable income from business 15,583,758 (207,674,040)
Less: Tax credits (unutilised tax losses) (15,583,758)
Total taxable income
Current income tax expense on taxable income @ 14%

17.2 Deferred tax assets/liabilities

Deferred tax assets, liabilities and income tax relates to the followings:

Statement of
financial position
Statement of
comprehensive income
Deferred tax liability
Property plant and equipment (2,797,246) (33,870,761) 31,073,515 (19,078,416)
Building – Revaluation (166,154,093) (88,273,782) (77,880,311)
Freehold land – Revaluation (45,557,400) (32,612,345) (12,945,055)
(214,508,739) (154,756,888) (59,751,851) (19,078,416)
Deferred tax assets
Defined benefit plans 21,337,441 15,542,661 5,794,780 753,545
Unutilised income tax losses 8,346,006 17,292,600 (8,946,594) 17,292,600
Provision for doubtful debts 1,704,754 3,154,513 (1,449,759) 3,154,513
Contingency provision 552,720 552,720
31,940,921 35,989,774 (4,048,853) 21,200,658
Deferred income tax income/(expense) (63,800,705) 2,122,243
Net deferred tax assets/(liabilities) (182,567,818) (118,767,112)

17.3 Deferred tax liabilities

Balance as at the beginning of the year (118,767,112) (120,889,356)
Reversal made from income statement during the year 21,429,209 832,126
Reversal made from OCI during the year – Actuarial gains losses 5,595,451 1,290,117
Charge made from OCI during the year – Property, plant and equipment revaluation (90,825,366)
Balance as at the end of the Year (182,567,818) (118,767,112)

17.4 Income tax movement

Balance as at the beginning of the year (12,751,451) 22,346,487
Over provision inrespect of previous years (184,408)
Income tax paid (29,047,344)
Economic Service Charges paid (2,967,842) (6,050,594)
Balance as at the end of the year (15,903,701) (12,751,451)

18. Commitments and contingencies

The Company does not have significant commitments and contingencies as at 31 July 2020.

19. Events occurring after the reporting date

There have been no material events occurring after the end of the reporting date that require adjustments to or disclosure in the Financial Statements.

20. Impact on covid -19

Pursuant to the Ministry of Education’s directive dated 12.3.2020, The Overseas School of Colombo (OSC) was required to close campus for all students, parents, and visitors starting from Friday, 13 March 2020 and roll out its Distance Learning Plan (DLP). OSC was proactive in designing and implementing its DLP programme which moved all educational services online. The DLP maintained the planned curriculum content and skills development for students in all grade levels, ensuring a smooth transition back to classroom learning, and completion of grade-level expectations as per the School’s schedule upon lockdown closure. After a successful 52-day DLP programme OSC concluded its academic cycle on 11 June 2020.

During this period, OSC worked very closely with an external medical advisory team from Samana Health, namely Dr Changa Kurukularatne, (MD FAMS) specialising in infectious diseases, internal medicine and tropical medicine and Dr Aseni Wickramatillake (MBBS MPH) specialising in Public Health with a focus on Occupational Health and Safety to create a safe environment and robust operating framework for students, staff and visitors of OSC with the Covid-19 pandemic. The School revisited its budgets for the academic year 2020/21 and reallocated funds amounting to USD 84,140 for Covid-19 related operational requirements and related training. The Board also identified the need for creating a financial support system during this period and revised the budget in May 2020, offering a USD 200,000 financial aid package to affected parents and withholding the fee increase for the first semester of SY 2020/21.

21. Related party disclosures

Transactions with Key Management Personnel of the Company

The Key Management Personnel of the Company are the members of its Board of Directors and Head of School.

Key Management Personnel compensation

Short-term employee benefits 31,765,325 44,128,362
Termination benefits 6,200,932
Post-employment benefits 4,764,799 7,334,412
36,530,124 57,663,706