Keeping our eye on the next level

Transcription

1 Keeping our eye on the next level INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30TH SEPTEMBER 2013 JOHN KEELLS HOLDINGS PLC

2 Keeping our eye on the next level Chairman s Message 1 Consolidated Income Statement 3 Consolidated Statement of Comprehensive Income 4 Consolidated Statement of Financial Position 5 Consolidated Statement of Cash Flow 6 Consolidated Statement of Changes in Equity 8 Company Income Statement 9 Company Statement of Comprehensive Income 10 Company Statement of Financial Position 11 Company Statement of Cash Flow 12 Company Statement of Changes in Equity 13 Operating Segment Information 14 Notes to the Interim Condensed Financial Statements 18

3 Chairman s Message Financial Information CHAIRMAN S MESSAGE Dear Stakeholder, The revenues at Rs billion and Rs billion in the second quarter and the first half of the financial year 2013/2014 were 2 per cent and 1 per cent above the Rs billion and Rs billion recorded in the corresponding periods in the previous year. The Group profit before tax (PBT) at Rs.2.65 billion in the second quarter of the financial year 2013/14 was a decrease of 12 per cent on the Rs.2.99 billion recorded in the corresponding period in the previous year. The cumulative PBT for the first half of the financial year 2013/14 at Rs.4.85 billion was a decrease of 10 per cent on the PBT of Rs.5.39 billion recorded in the same period in the previous year. The profit attributable to equity holders for the second quarter at Rs.2.06 billion reflects a decrease of 15 per cent on the previous year while the first half performance at Rs billion reflects a decrease of 10 per cent on the corresponding period in the previous year. The Group incurred a non-cash charge of Rs.72 million during the quarter for Employee Share Option Plans (ESOPs) under the Sri Lanka Accounting Standards; SLFRS 2 on Share Based Payments and a nonrecurring impairment charge of approximately Rs.141 million for the quarter on account of the demolition of buildings at Glennie Street and Justice Akbar Mawatha. The Waterfront Project, an integrated resort which I referred to in my previous message, is still to receive all its approvals. The Project which had received Cabinet approval under the Strategic Development Projects Act was presented to Parliament and was subsequently withdrawn by the Government. However, we are confident that the requisite approvals will be forthcoming shortly. Your Company received shareholder approval for investment in the Waterfront Project as a Major Transaction under the Companies Act No 7 of The Company also announced a Rights Issue of 2 shares for every 13 shares held at Rs.175/- per share with attached warrants. I am pleased to advise you that the issue was oversubscribed, affirming the support and trust you have placed in your Company. The Rs billion raised via the Rights will be utilised to fund the Company s equity contribution into the Waterfront Project Company. From a macroeconomic perspective, in spite of the reduction in interest rates and continued stable inflation, we are yet to see the full impact of these benefits flow through to the real economy. As a result, we continue to witness relatively dampened consumer sentiment and challenging macroeconomic conditions. The uncertainty created through the events in the global economy has compounded the volatility faced by emerging markets. We however remain confident of the future considering the strong fundamentals of the Group which will enable us to weather periods of uncertainty. Transportation The Transportation industry group PBT of Rs.745 million in the second quarter of 2013/14 was a decrease of 27 per cent compared to the corresponding quarter of the previous financial year [2012/13 Q2: Rs.1.02 billion]. The decline in PBT is mainly attributable to the lower contribution from the ports and bunkering businesses on the back of lower volumes and margins although container throughput over Colombo has remained flat as against the previous year. Although the drop in the ports business was the result of a recent re-alignment of some services, the overall outlook remains stable with volumes over Colombo expected to grow strongly in the medium term. Leisure The Leisure industry group PBT of Rs.1.14 billion in the second quarter of 2013/14 was an increase of 20 per cent compared to the second quarter of the previous financial year [2012/13 Q2: Rs.945 million] due to both the Sri Lankan and Maldivian Resorts performing better than the previous year. The performance of City hotels and Destination Management remained in line with expectations. Property The Property industry group recorded a loss before tax of Rs. 45 million for the second quarter compared to a loss of Rs. 258 million recorded in the corresponding period of the previous year. Results for the second quarter of 2013/14 include a non-recurring charge of Rs.152 million on account of the demolition of property, plant and equipment located at the Glennie Street site which will be used for the development of the Waterfront Project. Revenue recognition on 7th Sense, of which 50 per cent has been sold off Interim Financial Statements l 1

4 PROGRESSIVE CHAIRMAN S MESSAGE plan, commenced during the quarter and contributed towards the growth in revenue. Both 7th Sense and OnThree20 are progressing as per schedule. Consumer Foods and Retail The Consumer Foods and Retail industry group PBT of Rs.253 million in the second quarter of 2013/14 was a decrease of 12 per cent over the second quarter of the previous financial year [2012/13 Q2: Rs.288 million]. The soft drinks volumes fell during the quarter under review on the back of an overall reduction in market volumes. However, the frozen confectionary segment registered a year on year increase in profits during the quarter. An enhanced market share and improving margins at Keells Food Products resulted in an improved performance. The retail business improved its financial performance on the back of same store sales growth. Financial Services The Financial Services industry group PBT of Rs.305 million in the second quarter of 2013/14 was a decrease of 6 per cent over the second quarter of the previous financial year [2012/13 Q2: Rs.323 million]. The reduction in PBT recorded by the banking and stockbroking businesses was partially compensated for by the higher PBT generated by the insurance business. The primary reason for the reduction in the performance of the banking business was due to the continued slow loan growth rates coupled with the nonrecurring costs in relation to the implementation of its positioning strategy. Information Technology The Information Technology industry group PBT of Rs.43 million in the second quarter of 2013/14 was a decrease of 24 per cent over the second quarter of the previous financial year [2012/13 Q2: Rs.56 million], mainly on account of the decrease in profits of the office automation business due to increased costs arising from exchange rate fluctuations, despite the increase in overall revenue. The Business Process Outsourcing operation in India witnessed growth in revenue and as a result bettered its profitability. Other, including Plantation Services Other, comprising of Plantation Services and the Corporate Centre, recorded a PBT of Rs.209 million for the second quarter of the financial year 2013/14 [2012/13 Q2: Rs. 620 million]. The higher PBT in the previous financial year was on account of one-off gains from the disposal of Quattro FPO Solutions and the partial divestment of the freight forwarding business. Sustainability Initiatives The Group s environmental sustainability indicators recorded quarter on quarter increases on the back of increased activity in the Resorts sector compared to the corresponding period in the previous year, with the overall carbon footprint increasing by 9 per cent to approximately 18,855 MT and water withdrawal increasing by 7 per cent to an estimated 431,600 cubic meters. The Group maintained the proportion of waste that is recycled, reused and recovered at approximately 42 per cent though the total volume of waste generated increased. The Group s labour related sustainability indicators witnessed an improvement with occupational injuries falling to 47 this quarter, compared to 52 occupational injuries recorded in the second quarter of 2012/13 and training hours being maintained at approximately 14 hours per employee for the quarter. Corporate Social Responsibility The pre-intermediate level course of the English Language Scholarship Programme commenced during the period under review covering 200 children in 16 locations across 15 Districts. The John Keells Foundation successfully conducted the English Day 2013, enabling the participants of the scholarship programme to showcase their learning. Under the John Keells HIV and AIDS Awareness Campaign, a total of 1,249 persons were educated via 14 sessions, including corporate staff and members of the armed forces. The John Keells Vision Project conducted 3 eye camps during the quarter covering 575 registered patients of whom 130 patients underwent cataract operations. Susantha Ratnayake Chairman 7 November l JOHN KEELLS HOLDINGS PLC l

5 Chairman s Message Financial Information CONSOLIDATED INCOME STATEMENT Quarter ended 30th September Six months ended 30th September Note Change % Change % Continuing operations Sale of goods 11,100,200 11,494,974 (3) 22,421,932 23,168,715 (3) Rendering of services 9,980,136 9,187, ,670,444 17,526,820 7 Revenue 21,080,336 20,682, ,092,376 40,695,535 1 Cost of sales (15,235,787) (15,264,951) - (30,191,541) (30,152,179) - Gross profit 5,844,549 5,417, ,900,835 10,543,356 3 Other operating income 193, ,331 (58) 533, ,839 (38) Distribution expenses (736,678) (713,787) 3 (1,574,436) (1,449,095) 9 Administrative expenses (2,808,241) (2,830,583) (1) (5,162,468) (5,297,927) (3) Other operating expenses (715,778) (581,608) 23 (1,449,424) (1,193,038) 21 Results from operating activities 1,777,100 1,747, ,247,977 3,467,135 (6) Finance cost (304,243) (17,912) 1,599 (673,554) (483,397) 39 Finance income 1,175,295 1,127, ,498,252 2,058, Net finance income 871,052 1,109,921 (22) 1,824,698 1,575, Change in insurance contract liabilities 7 (770,326) (898,867) (14) (1,696,697) (1,480,694) 15 Share of results of equity accounted investees 768,703 1,036,455 (26) 1,470,273 1,829,372 (20) Profit before tax 2,646,529 2,994,564 (12) 4,846,251 5,391,149 (10) Tax expense 8 (344,084) (341,222) 1 (798,557) (881,247) (9) Profit for the period 2,302,445 2,653,342 (13) 4,047,694 4,509,902 (10) Attributable to : Equity holders of the parent 2,059,208 2,411,728 (15) 3,645,605 4,070,446 (10) Non-controlling interest 243, , , ,456 (9) 2,302,445 2,653,342 (13) 4,047,694 4,509,902 (10) Earnings per share Rs. Rs. Rs. Rs. Basic Diluted Dividend per share Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim Financial Statements l 3

6 PROGRESSIVE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarter ended Six months ended 30th September 30th September Note Profit for the period 2,302,445 2,653,342 4,047,694 4,509,902 Other comprehensive income Currency translation of foreign operations 86,743 (268,823) 342,658 11,287 Revaluation of land and buildings (40,535) - (42,400) - Share of other comprehensive income of equity-accounted investees 91,548 (214,644) 286, ,462 Net (loss) / gain on available-for-sale financial assets 4, ,470 43,400 (122,088) Transfers to revenue reserves - (14,082) - (14,082) Tax on other comprehensive income Other comprehensive income for the period, net of tax 142,699 (248,079) 629,839 (23,421) Total comprehensive income for the period, net of tax 2,445,144 2,405,263 4,677,533 4,486,481 Attributable to : Equity holders of the parent 2,183,562 2,219,718 4,213,266 4,047,418 Non-controlling interest 261, , , ,063 2,445,144 2,405,263 4,677,533 4,486,481 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 4 l JOHN KEELLS HOLDINGS PLC l

7 Chairman s Message Financial Information CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at ASSETS Non-current assets Property, plant and equipment 49,295,798 49,272,979 Lease rentals paid in advance 9,525,525 9,513,671 Investment property 9,330,755 9,294,936 Intangible assets 2,593,685 2,689,514 Investments in associates 17,312,963 15,724,361 Other non current financial assets 17,792,640 18,816,693 Deferred tax assets 234, ,227 Other non current assets 4,786,394 3,575, ,872, ,100,130 Current assets Inventories 4,336,245 3,998,900 Trade and other receivables 11,356,556 12,775,046 Amounts due from related parties 78, ,455 Other current assets 3,581,528 2,895,900 Short term investments 29,957,268 26,586,054 Cash in hand and at bank 3,582,961 3,554,804 52,892,724 50,018,159 Total assets 163,764, ,118,289 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 26,588,794 26,480,396 Revenue reserves 45,272,359 42,704,203 Other components of equity 21,272,501 20,634,571 93,133,654 89,819,170 Non-controlling interest 11,095,717 11,366,240 Total equity 104,229, ,185,410 Non-current liabilities Insurance contract liabilities 19,041,956 17,388,494 Borrowings 10,662,365 11,857,764 Deferred tax liabilities 1,182,200 1,222,210 Employee benefit liabilities 1,465,811 1,385,072 Other deferred liabilities 71,138 50,228 Other non-current liabilities 547, ,075 32,971,093 32,433,843 Current liabilities Trade and other payables 12,892,688 14,608,263 Amounts due to related parties 25,443 15,280 Income tax payable 1,018, ,013 Short term borrowings 3,519,900 1,853,767 Current portion of borrowings 3,570,777 3,048,936 Other current liabilities 2,223,402 1,635,534 Bank overdrafts 3,313,911 3,356,243 26,564,342 25,499,036 Total equity and liabilities 163,764, ,118,289 Rs. Rs. Net assets per share Note : All values are in Rupees 000s, unless otherwise stated. The above figures are not audited. I certify that the financial statements comply with the requirements of the Companies Act No.7 of M J S Rajakariar Group Financial Controller The Board of Directors is responsible for the preparation and presentation of these financial statements. S C Ratnayake Chairman 7 November 2013 J R F Peiris Group Finance Director Interim Financial Statements l 5

8 PROGRESSIVE CONSOLIDATED STATEMENT OF CASH FLOW For the six months ended 30th September Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before working capital changes A 3,777,539 3,968,722 (Increase) / Decrease in inventories (337,345) 1,175,650 (Increase) / Decrease in trade and other receivables 1,631,270 (2,040,271) (Increase) / Decrease in other current assets (529,272) 137,318 (Increase) / Decrease in other non-current assets (1,210,645) (1,045,235) Increase / (Decrease) in trade and other payables (1,687,864) 1,111,761 Increase / (Decrease) in other current liabilities 565,619 (15,347) Increase / (Decrease) in other current financial liabilities - (74,593) Increase / (Decrease) in insurance contract liabilities 1,653,462 1,737,774 Cash generated from operations 3,862,764 4,955,779 Finance income received 2,536,492 1,907,233 Finance costs paid (666,740) (444,956) Dividend received - 271,589 Tax paid (789,412) (687,612) Gratuity paid (65,313) (73,611) Net cash flow from operating activities 4,877,791 5,928,422 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (1,614,933) (2,440,282) Purchase of intangible assets (26,875) (8,589) Addition to investment property (35,819) (204,228) Acquisition of associates - (168,955) Increase in interest in associates (10,558) (58,130) Proceeds from sale of property, plant and equipment and intangible assets 151,877 41,149 Proceeds from demolition on property, plant & equipment 37,613 - Proceeds from sale of interest in associates - 585,675 proceeds from sales of non-current investments - 137,808 Proceeds from sale of financial instruments - fair valued through profit or loss 227, ,552 Purchase of financial instruments - fair valued through profit or loss (300,197) (410,782) (Purchase) / disposal of short term investments (net) 1,962,840 1,474,788 (Purchase) / disposal of other non current financial assets (net) 1,067,453 (515,536) Net cash flow from / (used in) investing activities 1,458,871 (1,451,530) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 108, ,493 Proceeds from non-controlling interests on issue of rights in subsidiaries ,903 Direct cost on issue of shares (6,534) (6,547) Acquisition of non-controlling interest - (516) Dividend paid to equity holders of parent (1,286,460) (1,275,977) Dividend paid to shareholders with non-controlling interest (521,276) (627,775) Proceeds from long term borrowings 2,156, ,274 Repayment of long term borrowings (3,083,932) (1,432,124) Proceeds from/(repayment of) other financial liabilities (net) 1,666,133 (81,467) Net cash flow from / (used in) financing activities (966,606) (1,981,736) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 5,370,056 2,495,156 CASH AND CASH EQUIVALENTS AT THE BEGINNING 16,860,241 19,810,729 CASH AND CASH EQUIVALENTS AT THE END 22,230,297 22,305,885 ANALYSIS OF CASH AND CASH EQUIVALENTS Favorable balances Short term investments 21,961,247 22,495,221 Cash in hand and at bank 3,582,961 3,531,739 Unfavorable balances Bank overdrafts (3,313,911) (3,721,075) TOTAL CASH AND CASH EQUIVALENTS 22,230,297 22,305,885 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 6 l JOHN KEELLS HOLDINGS PLC l

9 PROGRESSIVE Chairman s Message Financial Information CONSOLIDATED STATEMENT OF CASH FLOW For the six months ended 30th September Note CASH A Profit FLOWS before FROM working OPERATING capital changes ACTIVITIES Profit Profit before before working tax capital changes A 3,777,539 4,846,251 3,968,722 5,391,149 (Increase) / Decrease in inventories (337,345) 1,175,650 (Increase) Adjustments / Decrease for: in trade and other receivables 1,631,270 (2,040,271) (Increase) Finance / income Decrease in other current assets (2,498,252) (529,272) (1,911,624) 137,318 (Increase) Finance / cost Decrease in other non-current assets (1,210,645) 673,554 (1,045,235) 483,397 Increase Share / of (Decrease) results of in equity trade accounted and other investees payables (1,687,864) (1,470,273) (1,829,372) 1,111,761 Increase (Profit)/loss / (Decrease) on sale in of other non-current liabilities investments 565,619 11,461 (172,980) (15,347) Increase Profit / on (Decrease) sale of non-current in other current investments financial liabilities associates - (129,939) (74,593) Increase Share / based (Decrease) payment in insurance expense contract liabilities 9 1,653,462 71,875 1,737,774 - Cash Depreciation generated of from property, operations plant and equipment 3,862,764 1,269,377 4,955,779 1,064,217 Finance Provision income for impairment received losses 2,536, ,281 1,907, ,000 Finance (Profit) costs / loss paid on sale of property, plant and equipment and intangible assets (666,740) 13,137 (444,956) (7,988) Dividend Amortisation received of lease rentals paid in advance 337, , ,341 Tax Amortisation paid of intangible assets (789,412) 126,329 (687,612) 129,586 Gratuity Amortisation paid of other deferred liabilities (65,313) (256) (73,611) (256) Net Gratuity cash flow provision from operating and related activities costs 4,877, ,995 5,928, ,773 Unrealised (gain) / loss on foreign exchange (net) 108,200 11,418 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES 3,777,539 3,968,722 Purchase and construction of property, plant and equipment (1,614,933) (2,440,282) Purchase of intangible assets (26,875) (8,589) Addition to investment property (35,819) (204,228) Acquisition of associates - (168,955) Increase in interest in associates (10,558) (58,130) Proceeds from sale of property, plant and equipment and intangible assets 151,877 41,149 Proceeds from demolition on property, plant & equipment 37,613 - Proceeds from sale of interest in associates - 585,675 proceeds from sales of non-current investments - 137,808 Proceeds from sale of financial instruments - fair valued through profit or loss 227, ,552 Purchase of financial instruments - fair valued through profit or loss (300,197) (410,782) (Purchase) / disposal of short term investments (net) 1,962,840 1,474,788 (Purchase) / disposal of other non current financial assets (net) 1,067,453 (515,536) Net cash flow from / (used in) investing activities 1,458,871 (1,451,530) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 108, ,493 Proceeds from non-controlling interests on issue of rights in subsidiaries ,903 Direct cost on issue of shares (6,534) (6,547) Acquisition of non-controlling interest - (516) Dividend paid to equity holders of parent (1,286,460) (1,275,977) Dividend paid to shareholders with non-controlling interest (521,276) (627,775) Proceeds from long term borrowings 2,156, ,274 Repayment of long term borrowings (3,083,932) (1,432,124) Proceeds from/(repayment of) other financial liabilities (net) 1,666,133 (81,467) Net cash flow from / (used in) financing activities (966,606) (1,981,736) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 5,370,056 2,495,156 CASH AND CASH EQUIVALENTS AT THE BEGINNING 16,860,241 19,810,729 CASH AND CASH EQUIVALENTS AT THE END 22,230,297 22,305,885 ANALYSIS OF CASH AND CASH EQUIVALENTS Favorable balances Short term investments 21,961,247 22,495,221 Cash in hand and at bank 3,582,961 3,531,739 Unfavorable balances Bank overdrafts (3,313,911) (3,721,075) TOTAL CASH AND CASH EQUIVALENTS 22,230,297 22,305,885 Note : All values are in Rupees 000s, unless otherwise stated. Note All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. Figures in brackets indicate deductions. The The above above figures figures are are not not audited. audited. 6 l JOHN KEELLS HOLDINGS PLC l Interim Financial Statements l 7

10 PROGRESSIVE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Attributable to equity holders of parent Stated Revaluation Foreign currency Other Available for Revenue Total Non-controlling Total capital reserve translation capital sale reserve reserves interest Equity reserve reserves As at 1 April ,480,396 17,780,432 2,729, ,282 42,704,203 89,819,170 11,366, ,185,410 Profit for the period ,645,605 3,645, ,089 4,047,694 Other comprehensive income - (40,157) 562,356-43,856 1, ,661 62, ,839 Total comprehensive income - (40,157) 562,356-43,856 3,647,211 4,213, ,267 4,677,533 Exercise of share options 108, , ,398 Direct cost on issue of shares (5,356) (5,356) (1,178) (6,534) Share based payments , ,875-71,875 Final dividend paid / (1,286,460) (1,286,460) - (1,286,460) Subsidiary dividend to non-controlling interest , ,721 (717,997) (521,276) Acquisition, disposal and changes in non-controlling interest ,040 16,040 (15,615) 425 As at 30 September ,588,794 17,740,275 3,292,213 71, ,138 45,272,359 93,133,654 11,095, ,229,371 As at 1 April ,110,528 9,487,794 2,987, , ,879 32,950,723 71,286,765 8,876,914 80,163,679 Profit for the period ,070,446 4,070, ,456 4,509,902 Other comprehensive income - 38,185 62,173 (428,365) (118,484) 423,463 (23,028) (393) (23,421) Total comprehensive income - 38,185 62,173 (428,365) (118,484) 4,493,909 4,047, ,063 4,486,481 Exercise of share options 769, , ,493 Direct cost on issue of shares (5,838) (5,838) (709) (6,547) Final dividend paid / (1,275,977) (1,275,977) - (1,275,977) Subsidiary dividend to non-controlling interest ,931 50,931 (678,706) (627,775) Acquisition, disposal and changes in non-controlling interest (6,012) (6,012) 55,399 49,387 As at 30 September ,880,021 9,525,979 3,049, ,395 36,207,736 74,866,780 8,691,961 83,558,741 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 8 l JOHN KEELLS HOLDINGS PLC l

11 Chairman s Message Financial Information COMPANY INCOME STATEMENT Quarter ended 30th September Six months ended 30th September Note Change % Change % Continuing operations Rendering of services 200, ,281 (15) 382, ,186 3 Revenue 200, ,281 (15) 382, ,186 3 Cost of sales (99,238) (96,494) 3 (198,246) (181,872) 9 Gross profit 101, ,787 (27) 184, ,314 (3) Dividend income 96,452 76, ,288,050 2,436,949 (6) Other operating income 10,609 26,319 (60) 12,959 31,247 (59) Administrative expenses (301,236) (534,931) (44) (596,489) (827,107) (28) Other operating expenses (7,664) (8,080) (5) (17,238) (17,172) 0 Results from operating activities (100,086) (300,002) (67) 1,871,714 1,813,231 3 Finance cost (39,053) (9,448) 313 (130,012) (161,385) (19) Finance income 327, , , , Net finance income 288, , , , Profit before tax 188,146 (23,788) 891 2,453,709 2,219, Tax expense 8 (101,324) - - (133,856) (4,752) 2,717 Profit for the period 86,822 (23,788) 465 2,319,853 2,214,488 5 Rs. Rs. Rs. Rs. Dividend per share Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim Financial Statements l 9

12 PROGRESSIVE COMPANY STATEMENT OF COMPREHENSIVE INCOME Quarter ended Six months ended 30th September 30th September Note Profit for the period 86,822 (23,788) 2,319,853 2,214,488 Other comprehensive income Net (loss)/gain on available-for-sale financial assets 8, ,672 51,838 (48,009) Tax on other comprehensive income Other comprehensive income for the period, net of tax 8, ,672 51,838 (48,009) Total comprehensive income for the period, net of tax 95, ,884 2,371,691 2,166,479 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 10 l JOHN KEELLS HOLDINGS PLC l

13 Chairman s Message Financial Information COMPANY STATEMENT OF FINANCIAL POSITION As at ASSETS Non-current assets Property, plant and equipment 108,079 75,309 Intangible assets 75,780 74,004 Investments in subsidiaries and joint ventures 26,815,718 26,641,307 Investments in associates 9,831,925 9,821,364 Other non current financial assets 1,789,642 1,710,653 Other non current assets 10,310 10,310 38,631,454 38,332,947 Current assets Trade and other receivables 72, ,862 Amounts due from related parties 1,222, ,084 Other current assets 296, ,966 Short term investments 12,677,477 12,551,540 Cash in hand and at bank 174,680 63,159 14,443,642 14,512,611 Total assets 53,075,096 52,845,558 EQUITY AND LIABILITIES Stated capital 26,588,794 26,480,396 Revenue reserves 21,255,149 20,221,756 Other components of equity 207,170 83,457 Total equity 48,051,113 46,785,609 Non-current liabilities Borrowings 3,271,815 3,752,621 Employee benefit liabilities 140, ,075 3,411,972 3,886,696 Current liabilities Trade and other payables 195, ,990 Amounts due to related parties 1,138 13,156 Current portion of borrowings 1,348,851 1,314,424 Other current liabilities 18, ,478 Bank overdrafts 47, ,205 1,612,011 2,173,253 Total equity and liabilities 53,075,096 52,845,558 Rs. Rs. Net assets per share Note : All values are in Rupees 000s, unless otherwise stated. The above figures are not audited. I certify that the financial statements comply with the requirements of the Companies Act No.7 of M J S Rajakariar Group Financial Controller The Board of Directors is responsible for the preparation and presentation of these financial statements. S C Ratnayake Chairman 7 November 2013 J R F Peiris Group Finance Director Interim Financial Statements l 11

14 PROGRESSIVE COMPANY STATEMENT OF CASH FLOW For the six months ended 30th September CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 2,453,709 2,219,240 Adjustments for: Finance income (712,007) (567,394) Dividend income (2,288,050) (2,436,949) Finance cost 130, ,385 Share based payment expense 22,185 - Depreciation of property, plant and equipment 11,004 12,909 Profit on sale of property, plant and equipment (4) (2,697) Amortisation of intangible assets 12,324 7,915 Provision for impairment losses 182, ,000 Gratuity provision and related costs 12,346 11,284 Profit on sale of other investments - (11,624) Profit before working capital changes (175,778) (155,931) (Increase)/Decrease in trade and other receivables 384,906 63,141 (Increase)/Decrease in other current assets 12,776 43,033 Increase/(Decrease) in trade and other payables (46,118) (53,178) Increase/(Decrease) in other current liabilities (86,943) - Cash generated from operations 88,843 (102,935) Finance income received 712, ,201 Finance expenses paid (123,198) (122,945) Dividend received 2,308,255 2,468,660 Tax paid (58,040) (28,071) Gratuity paid (6,263) (9,727) Net cash flow from operating activities 2,921,604 2,739,183 CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (43,774) (2,033) Purchase of intangible assets (14,099) (8,312) Increase in interest in subsidiaries (307,423) (790,381) Increase in interest in associates (10,560) (227,085) Purchase of non current investment (30,353) - Proceeds from sale of Property, plant and equipment 4 6,696 Proceeds from sale of non-current investments - 46,563 (Purchase) / disposal of short term investments (net) 6,671,151 (1,099,804) (Purchase) / disposal of other non current financial assets (net) 5,028 - Net cash flow from/(used in) investing activities 6,269,974 (2,074,356) CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 108, ,493 Dividend paid (1,286,460) (1,275,977) Repayment of long term borrowings (640,474) (664,176) Net cash flow from / (used in) financing activities (1,818,536) (1,170,660) NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS 7,373,042 (505,833) CASH AND CASH EQUIVALENTS AT THE BEGINNING 5,433,342 8,919,099 CASH AND CASH EQUIVALENTS AT THE END 12,806,384 8,413,266 ANALYSIS OF CASH & CASH EQUIVALENTS Favorable balances Short term investments 12,679,302 8,868,202 Cash in hand and at bank 174,680 41,701 12,853,982 8,909,903 Unfavorable balances Bank overdrafts (47,598) (496,637) TOTAL CASH AND CASH EQUIVALENTS 12,806,384 8,413,266 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 12 l JOHN KEELLS HOLDINGS PLC l

15 Chairman s Message Financial Information COMPANY STATEMENT OF CHANGES IN EQUITY Stated Other Available for Revenue Total capital capital sale reserve reserves Equity reserves As at 1 April ,480,396-83,457 20,221,756 46,785,609 Profit for the period ,319,853 2,319,853 Other comprehensive income ,838-51,838 Total comprehensive income ,838 2,319,853 2,371,691 Exercise of share option 108, ,398 Share based payments - 71, ,875 Final dividend paid / (1,286,460) (1,286,460) As at 30 September ,588,794 71, ,295 21,255,149 48,051,113 As at 1 April ,110, ,595 15,841,968 41,182,091 Profit for the period ,214,488 2,214,488 Other comprehensive income - - (48,009) - (48,009) Total comprehensive income - - (48,009) 2,214,488 2,166,479 Exercise of share option 769, ,493 Final dividend paid / (1,275,977) (1,275,977) As at 30 September ,880, ,586 16,780,479 42,842,086 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim Financial Statements l 13

16 PROGRESSIVE OPERATING SEGMENT INFORMATION BUSINESS SEGMENTS The following tables present revenue and profit information regarding the Group s business segments. Transportation Leisure Property Consumer Foods & Retail For the Quarter ended 30th September External revenue 4,198,035 5,326,710 5,268,197 4,650, , ,710 6,065,166 5,985,284 Inter segment revenue 102,948 91,290 2,964 13,238 63,707 68,741 75,152 10,745 Total segment revenue 4,300,983 5,418,000 5,271,161 4,664, , ,451 6,140,318 5,996,029 Eliminations of inter segment revenue Net revenue Segment results 200, ,096 1,161, ,637 (55,996) (276,702) 280, ,441 Finance cost (18,904) (12,497) (127,332) (88,080) (20,202) (2,094) (45,371) (32,561) Finance income 48,376 51, ,770 62,389 17,468 22,949 20,533 13,625 Change in fair value of investment property Share of results of equity accounted investees 515, , Eliminations / adjustments (603) (588) (1,101) 3,832 14,019 (2,430) (3,000) (3,000) Profit / (loss) before tax 744,508 1,022,203 1,137, ,778 (44,711) (258,277) 252, ,505 Tax expense (48,386) (62,252) (105,587) (21,302) 53,154 (10,611) (77,252) (107,108) Profit / (loss) for the period 696, ,951 1,031, ,476 8,443 (268,888) 175, ,397 Purchase and construction of PPE 106, , ,222 2,449 2, , ,416 Addition to IA , Depreciation of PPE 26,100 16, , ,290 2,153 2, , ,213 Amortisation / impairment of IA - 1, ,960 3,077 Amortisation of LRPA , , Gratuity provision and related costs 4,190 5,771 21,081 20, ,170 24,826 16,985 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. PPE (Property, plant and equipment), IA (Intangible assets), LRPA (Lease rentals paid in advance) 14 l JOHN KEELLS HOLDINGS PLC l

17 Chairman s Message Financial Information Financial Services Information Technology Others Group Total ,336,533 2,137,951 1,771,156 1,427, , ,949 21,080,336 20,682,653 25,776 24,977 78,256 72, , , , ,151 2,362,309 2,162,928 1,849,412 1,500,022 1,030, ,264 21,566,448 21,104,804 (486,112) (422,151) 21,080,336 20,682,653 52,334 (100,892) 137,760 67,020 (63,831) 25,307 1,713,164 1,220,907 (1) 145,332 (25,568) (19,266) (66,865) (8,746) (304,243) (17,912) 13,864 18,023 3,288 3, , , , , , ,360-5,070 14,416 17, ,703 1,036, (72,820) - (8,000) 318,712 (71,505) 316, , ,823 42,660 55, , ,695 2,646,529 2,994,564 (88,742) (104,181) (11,509) (11,800) (65,762) (23,968) (344,084) (341,222) 216, ,642 31,151 44, , ,727 2,302,445 2,653, ,275 31,122 31,244 37,185 78,396 26,917 1,122,042 1,382, ,300 4, ,203 5,351 39,759 36,582 41,969 34,360 27,393 29, , ,125 46,995 46,854 7,065 5,801 6,363 10,356 64,383 67, (2,653) , ,515 8,286 6,550 6,012 5,230 10,238 23,593 74,963 81,005 Interim Financial Statements l 15

18 PROGRESSIVE OPERATING SEGMENT INFORMATION BUSINESS SEGMENTS The following tables present revenue, profit information and segment assets regarding the Group s business segments. Transportation Leisure Property Consumer Foods & Retail For the six months ended 30th September External revenue 8,326,538 10,634,160 9,384,827 8,563,783 1,220,660 1,051,251 12,219,684 11,972,127 Inter segment revenue 205, ,484 38,402 24, , , ,812 25,742 Total segment revenue 8,532,474 10,817,644 9,423,229 8,588,670 1,363,601 1,188,520 12,386,496 11,997,869 Eliminations of inter segment revenue Net revenue Segment result 429, ,061 1,635,605 1,650,168 71,380 (245,893) 532, ,605 Finance cost (31,864) (36,403) (280,769) (191,650) (37,378) (4,768) (88,105) (53,006) Finance income 89, , , ,490 53,248 61,927 63,637 21,440 Share of results of equity accounted investees 1,005,860 1,344, Eliminations / adjustments (1,207) (1,176) (2,201) 3,832 10,501 (4,857) (6,000) (6,000) Profit / (loss) before tax 1,492,181 1,979,040 1,598,294 1,592,840 97,751 (193,591) 502, ,039 Tax expense (92,408) (133,441) (172,434) (66,308) 36,004 (33,228) (141,931) (235,280) Profit / (loss) for the period 1,399,773 1,845,599 1,425,860 1,526, ,755 (226,819) 360, ,759 Segment assets 7,563,747 7,901,875 58,714,709 50,010,878 16,126,701 10,925,343 15,778,283 13,914,679 Investments in associates Deferred tax assets Goodwill Other current assets Eliminations / adjustments Total assets Purchase and construction of PPE 113,445 7, ,746 1,621,930 15,859 3, , ,921 Addition to IA ,171 1,455 Depreciation of PPE 45,507 40, , ,789 7,986 5, , ,604 Amortisation / impairment of IA 1,207 4, ,934 6,123 Amortisation of LRPA , , Gratuity provision and related costs 8,251 10,981 42,902 37, ,470 48,997 39,532 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. PPE (Property, plant and equipment), IA (Intangible assets), LRPA (Lease rentals paid in advance) 16 l JOHN KEELLS HOLDINGS PLC l

19 Chairman s Message Financial Information Financial Services Information Technology Others Group Total ,566,056 4,135,343 3,650,431 2,859,123 1,724,180 1,479,748 41,092,376 40,695,535 52,774 49, , , , ,028 1,039, ,417 4,618,830 4,184,769 3,803,804 3,004,704 2,002,999 1,764,776 42,131,433 41,546,952 (1,039,057) (851,417) 41,092,376 40,695,535 83,913 73, ,274 96,601 (172,068) 1,140 2,727,714 2,861,199 (2) (6) (45,815) (34,758) (189,621) (162,806) (673,554) (483,397) 41,299 30,842 6,784 4, , ,684 1,222, , , ,698 - (4,909) 25,182 14,347 1,470,273 1,829, , ,921 99, , , , ,243 61, , ,286 4,846,251 5,391,149 (154,675) (189,208) (23,094) (17,185) (250,019) (206,597) (798,557) (881,247) 409, ,843 84,149 44, , ,689 4,047,694 4,509,902 28,795,651 25,257,283 4,959,224 4,020,518 22,373,694 19,709, ,312, ,740,334 17,312,963 16,847, , , , ,115 3,581,528 3,892,559 (12,626,900) (14,617,227) 163,764, ,804, ,681 86,898 56,696 51, ,851 45,502 1,614,933 2,440, ,605 7,134 14,099-26,875 8,589 77,600 72,601 71,171 66,995 57,528 59,086 1,269,377 1,064,217 94,061 93,708 10,803 10,868 12,324 14, , , , ,341 16,418 14,356 9,583 8,460 20,214 33, , ,773 Interim Financial Statements l 17

20 PROGRESSIVE NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 1 CORPORATE INFORMATION John Keells Holdings PLC. is a public limited company incorporated and domiciled in Sri Lanka and listed on the Colombo Stock Exchange. Ordinary shares of the company are listed on the Colombo Stock Exchange and Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange. 2 INTERIM CONDENSED FINANCIAL STATEMENTS The financial statements for the period ended 30 September 2013, includes the Company referring to John Keells Holdings PLC., as the holding company and the Group referring to the companies whose accounts have been consolidated therein. 3 APPROVAL OF FINANCIAL STATEMENTS The interim condensed financial statements of the Group and the Company for the 6 months ended 30 September 2013 were authorised for issue by the Board of Directors on 7 November BASIS OF PREPARATION The interim condensed financial statements have been prepared in compliance with Sri Lanka Accounting Standard (SLAS) LKAS 34 - Interim Financial Reporting. These interim condensed financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2013, and changes to the accounting policies as given in Note 5 to these financial statements. The presentation and classification of the financial statements of the previous year have been amended, where relevant, for better presentation and to be comparable with those of the current year. The interim condensed financial statements are presented in Sri Lankan Rupees and all values are rounded to the nearest thousand except when otherwise indicated. 5 CHANGES IN ACCOUNTING POLICIES Employee Share option Plan Accounting for employee remuneration in the form of shares, SLFRS 2- Share Based Payments, is effective for the Group, from the financial year beginning 2013/14. Employees of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of the employee services received in respect of the share options granted is recognised in the income statement over the period employees provide services, from the time when the award is granted up to the vesting date of the options. The overall cost of the award is calculated using the number of share options expected to vest and the fair value of the options at the date of grant. The fair value of options granted is determined by using an option pricing model to estimate the number of shares likely to vest. This takes into account the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and other relevant factors. 18 l JOHN KEELLS HOLDINGS PLC l

21 Chairman s Message Financial Information 6 OPERATING SEGMENTS For management purposes, the Group is organised into business units based on their products and services and has seven reportable operating segments as follows: Transportation Leisure Property Consumer Foods & Retail Financial Services Information Technology Others 7 CHANGE IN LIFE INSURANCE CONTRACT LIABILITIES The results of Union Assurance PLC s life business segment is consolidated line by line into the Group s consolidated income statement. The change in life insurance contract liabilities represents the transfer to the Life Fund, the difference between all income and expenditure attributable to life policy holders during the period. 7 TAX EXPENSE Group Company For the six months ended 30th September Income statement Current income tax 801, , ,856 4,752 Deferred tax (3,247) 10, Other comprehensive Income Deferred tax , , ,856 4,752 9 SHARE BASED PAYMENT At an extra ordinary general meeting held on 28th June 2013, the shareholders of the company approved the employee share option plan number 8. The share options arising from this plan has now been accounted for based on SLFRS 2 share based payments and accordingly Rs 72mn has been charged as an expense in the consolidated income statement during the quarter ended 30th September Interim Financial Statements l 19

22 PROGRESSIVE NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 10 RELATED PARTY TRANSACTIONS Group Company For the six months ended 30th September Transactions with related parties Subsidiaries (Purchases) / sales of goods - - (2,373) (1,446) (Receiving) / rendering of services , ,923 (Purchases) / sale of property plant & equipment Loans given ,000 Interest received / (paid) ,723 Rent received / (paid) - - (46,246) (26,454) Guarantees received / (paid) Joint Ventures (Receiving) / rendering of services 44,733 17, Associates (Purchases) / sales of goods 2,365 3, (Receiving) / rendering of services 11,766 8,926 1,856 2,111 Interest received / (paid) 160, ,863 49, ,210 Loans taken - (10) - - Leases taken Key management personnel (Receiving) / rendering of services Close family members of KMP (Receiving) / rendering of services Companies controlled / jointly controlled / significantly Influenced by KMP and their close family members (Purchases) / sales of goods Post employment benefit plan Contributions to the provident fund 104, ,378 22,909 21, l JOHN KEELLS HOLDINGS PLC l

23 Chairman s Message Financial Information 11 SHARE INFORMATION 11.1 Public share holdings The percentage of shares held by the public as at 30 September 2013 was % (30 June %) Directors share holdings The number of shares held by the Board of Directors are as follows: As at S C Ratnayake Chairman/CEO 5,299,066 5,299,066 A D Gunewardene Deputy Chairman 6,481,720 6,481,720 J R F Peiris 1,371,392 1,371,392 E F G Amerasinghe 5,514 5,514 I Coomaraswamy Nil Nil T Das Nil Nil A R Gunasekara 107, ,866 M A Omar Nil Nil S S Tiruchelvam (resigned on w.e.f ) N/A Nil 11.3 Twenty largest shareholders of the company are as follows: As at Number of Number of shares % shares % 1 Mr S E Captain 88,230, % 84,774, % 2 Broga Hill Investments Limited 85,098, % 84,681, % 3 Janus Overseas Fund 74,878, % 75,942, % 4 Paints & General Industries Limited 51,744, % 50,007, % 5 Aberdeen Global-Asian Smaller Companies Fund 31,530, % 32,930, % 6 Deutsche Bank AG London 31,510, % 33,628, % 7 Melstacorp (Private) Limited 31,499, % 31,499, % 8 Aberdeen Global-Emerging Markets Smaller companies fund 22,620, % 22,990, % 9 Estate of Mr A A N De Fonseka 19,952, % 19,952, % 10 Aberdeen Global Asia Pacific Equity Fund 19,047, % 19,047, % 11 Janus Aspen series Overseas Portfolio Fund 18,303, % 18,303, % 12 Schroder International Selection Fund 15,976, % 13,531, % 13 Mr K Balendra 13,141, % 13,141, % 14 J P Morgan Clearing Corporation 11,361, % 11,365, % 15 London- Edinburgh Dragon Trust PLC 10,936, % 10,936, % 16 Rubber Investment Trust Limited A/C no.1 10,193, % 10,991, % 17 BBH-Matthews International Funds 9,556, % 9,556, % 18 Aberdeen Asia Pacific Fund 9,074, % 9,074, % 19 Aberdeen Institutional Commingled Funds, LLC 8,460, % 7,830, % 20 Aberdeen Global Frontier Marketing Equity Fund 7,311, % 4,581, % Interim Financial Statements l 21

24 PROGRESSIVE NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 11.4 Stated capital Stated capital is represented by number of shares in issue as given below: As at Ordinary shares 857,921, ,112,828 Global depository receipts 1,122,069 1,129, Net assets per share Net assets per share have been calculated, for all periods, based on the number of shares in issue as at 30 September Market price per share For the Quarter ended 30th September Rs. Rs. Highest Lowest Last traded DIVIDENDS PAID A final dividend of Rs per share for the financial year ended 31 March 2013 was paid on 17 June DISPOSAL OF ASSOCIATE In June 2013, as per sales and purchase agreement the Group disposed of its interest in one of its associates, namely NDO India (Pvt) Ltd. The resultant loss of Rs. 11mn has been reflected in the Consolidated Income Statement. 14 INVESTMENT INTO WATERFRONT PROPERTIES (PRIVATE) LIMITED (THE PROJECT COMPANY ) John Keells holdings PLC. (JKH) had proposed to the Government of Sri Lanka a Project, valued in excess of USD 650mn, involving the developing, owning, managing, operating, selling, leasing and renting a luxury multi/mixed use Integrated Resort (the Project ) on the land owned and occupied by its subsidiaries Ceylon Cold Stores PLC (CCS), John Keells PLC (JKL), John Keells Properties (Pvt) Ltd (JKP) and Waterfront Properties (Pvt) Ltd (WPL) in Colombo 2. John Keells Holdings PLC together with its subsidiaries CCS, JKL and JKP will be majority shareholders in the Project Company, WPL. The Project Company had already entered into an agreement with the Board of Investment of Sri Lanka to facilitate the requisite approvals and a Gazette published on 18 July 2013 under the Strategic Development Projects Act had made available tax, duty and other concessions to the Project. At an Extraordinary General Meeting held in August 2013, the shareholders of JKH granted approval for the Investment in the Project Company as a Major Transaction under the Companies Act of A second gazette published under the Strategic Development Projects Act on the 23 September 2013 further confirmed the available tax, duty and other concessions to the Project (Please also refer Note 16 ). 22 l JOHN KEELLS HOLDINGS PLC l

25 Chairman s Message Financial Information 15 CONTINGENCIES, CAPITAL AND OTHER COMMITMENTS There has been no significant change in the nature of the contingencies and other commitments, which were disclosed in the annual report for the year ended 31 March EVENTS AFTER THE REPORTING PERIOD Waterfront Project In October 2013, the shareholders of JKH approved to issue 131,987,983 Ordinary Shares in the proportion of two (2) Ordinary Shares for every thirteen (13) Ordinary Shares in the capital of the Company by way of a Rights Issue, at a price of Rupees One Hundred and Seventy Five (Rs.175/-) per share and two warrants attached thereto; 2015 warrants 43,995,994 warrants in the ratio of one (1) warrant for every three (3) shares subscribed to in the Rights issue at an exercise price of Rupees One Hundred and Eighty Five (Rs.185) per share exercisable 24 months from the issue of the warrant and 2016 warrants 43,995,994 warrants in the ratio of one (1) warrant for every three (3) shares subscribed to in the Rights issue at an exercise price of Rupees One Hundred and Ninety Five (Rs.195) per share exercisable 36 months from the issue of the warrant. The proceeds from the Rights is to be utilized towards JKH s investment in the Project Company. The Rights Issue was substantially oversubscribed. The two Gazettes published under the Strategic Development Projects Act mentioned in Note 14 above, have since been withdrawn and a new Gazette, under the Strategic Development Projects Act is awaited. Interim Dividend The Board of Directors of the company has declared an interim dividend of Rs.1.00 per share for the financial year 2013/14. As required by section 56 (2) of the Companies Act no 07 of 2007, the Board of Directors has confirmed that the company satisfies the solvency test in accordance with section 57 of the companies Act No.07 of 2007, and has obtained a certificate from auditors, prior to declaring an interim dividend which is to be paid on the 27 November Interim Financial Statements l 23