SERENDIB HOTELS PLC INTERIM CONDENSED FINANCIAL STATEMENTS SECOND QUARTER 2016/17

Transcription

1 SERENDIB HOTELS PLC INTERIM CONDENSED FINANCIAL STATEMENTS SECOND QUARTER 2016/17

2 Quarter ended 30th June 2018 Contents Page No. Operations Review 3-4 Financial Statements Statement of Financial Position 5 Statement of Profit or Loss 6 Statement of Comprehensive Income 7 Statement of Changes in Equity 8-9 Statement of Cash Flows 10 Notes to the Financial Statements Investor Information 13-15

3 SERENDIB HOTELS PLC OPERATIONS REVIEW FIRST QUARTER 2018/19 The Serendib Hotels Group owns and operates four properties; AVANI Bentota Resort & Spa, Club Hotel Dolphin Waikkal, Hotel Sigiriya, and the Lantern Beach Collection Mirissa acquired in 2017/18. In addition, Serendib Leisure Management Limited, a fully owned subsidiary of Serendib Hotels PLC, manages two properties Villa 700 Induruwa and AVANI Kalutara Resort. The Group s consolidated room inventory is 440 keys. Jada Resorts & Spa (Pvt) Ltd, the owning company of AVANI Kalutara Resort is treated as an investment. Hence, the operating results of AVANI Kalutara are not reflected in the Consolidated Financial Statements of Serendib Hotels PLC. Sri Lanka recorded 456,723 tourist arrivals during the first quarter of the financial year 2018/19, demonstrating growth of 13% against the same quarter last year. During the quarter, arrivals from India, UK and Australia grew by 19%, 29% and 71% respectively, while arrivals from China and Germany declined by 1% and 7% respectively. Financial & Operational Review During the quarter under review, our Group of Hotels achieved an occupancy of 67%, seven percentage points above the same period last year. AVANI Bentota recorded an occupancy of 72%; Hotel Sigiriya s occupancy was 62%; Club Hotel Dolphin achieved an occupancy of 70%; and The Lantern Beach Collection gained an occupancy of 52%. AVANI Bentota s room rate was reduced due to minor renovations being carried out at the property. Hotel Sigiriya s room rate was maintained from last year to drive occupancy, and Club Hotel Dolphin s room rate improved from the previous year. AVANI Bentota achieved a TrevPAR of Rs. 14,476 for the quarter, a 5% increase from the previous year. Hotel Sigiriya attained a TrevPAR of Rs. Rs. 9,061 during the quarter with 33% growth from last year. Club Hotel Dolphin recorded a TrevPAR of Rs. 12,242 in the quarter, demonstrating 13% growth from the previous year. Club Hotel Dolphin experienced a reduction in its All-Inclusive package mix, while AVANI Bentota and Hotel Sigiriya had decreases in their Half-Board package mix. The Group achieved top-line growth of 11% in the quarter with revenue of Rs. 337 Mn, enhanced by Lantern Beach Collection s revenue contribution of Rs. 27 Mn. The Group s underlying revenue grew by 2% from the same quarter last year. During the quarter, Administrative costs increased by Rs. 13 Mn due to Lantern s expense contribution along with an increase in property maintenance expenses due to minor renovations conducted at AVANI Bentota and Hotel Sigiriya. Sales and marketing expenses were maintained in line with last year. Other operating income and gains made by the Group in the quarter declined by Rs. 8 Mn from the previous year, due to incurring exchange losses compared to exchange gains made last year. The Group recorded an Operating Loss of Rs. 68 Mn for the quarter, an improvement from the Operating Loss of Rs. 77 Mn incurred in the same quarter last year owing to the aforementioned increases in revenue and other operating income and gains.

4 Finance costs increased due to interest on borrowings obtained to fund the acquisition of Lantern Beach Collection, as well as the interest on loans of Frontier Capital s subsidiaries Evolution Capital (Pvt) Ltd and Lantern Villa (Pvt) Ltd. The Group incurred a Loss before Tax of Rs. 91 Mn in the quarter, a further 17% decline from the same period last year. The Group provided for both income tax and deferred tax at 14% in accordance with the revised Inland Revenue Act. Our focus for the rest of the year will be to increase profitability across our hotels, while seeking new business opportunities to expand the Group s portfolio. We will intensify our efforts in capturing market share in the face of a highly competitive business environment, and continue to uphold our service standards to ensure guest satisfaction. Malinga Arsakularatne EXECUTIVE DIRECTOR

5 STATEMENT OF FINANCIAL POSITION Group Company As at Rs.'000 Audited Audited ASSETS Non-Current Assets Property, Plant & Equipment 3,975,854 3,162,281 3,993, , , ,789 Leasehold Property 26,910 28,838 27,465 25,100 26,802 25,525 Intangible Assets 166,816 92, ,370 18,244 23,717 19,612 Investments in Subsidiaries , , ,767 Other Non Current Financial Assets 272, , , , , ,089 4,441,669 3,613,228 4,463,169 1,743,803 1,402,474 1,741,782 Current Assets Inventories 36,779 26,555 28,222 7,283 7,769 7,434 Trade and Other Receivables 253, , ,522 65,693 65,288 84,225 Taxation Recoverable 7,650 18,634 13,613 2,531 2,159 1,603 Other Current Financial Assets 16, Cash and Short Term Deposits 215, , ,181 18,494 52,674 42, , , ,123 94, , ,158 Total Assets 4,971,281 4,075,530 5,089,292 1,837,907 1,530,399 1,877,940 EQUITY AND LIABILITIES Capital and Reserves Stated Capital 913, , , , , ,122 Other Components of Equity 535, , ,694 32,093 76,340 29,887 Other Revenue Reserve - 19, ,500 - Retained Earnings 1,024, ,570 1,115, , , ,364 Equity Attributable to Owners of the Parent 2,473,187 2,356,683 2,561,876 1,170,315 1,176,219 1,227,373 Non Controlling Interest 1,030, ,939 1,034, Total Equity 3,503,747 3,141,622 3,596,396 1,170,315 1,176,219 1,227,373 Non-Current Liabilities Interest Bearing Loans & Borrowings 114, , ,971 43, ,852 66,000 Deferred Tax Liabilities 358, , ,287 39,079 32,443 38,701 Employee Benefit Liabilities 58,398 57,692 59,367 15,009 13,501 14, , , ,625 97, , ,990 Current Liabilities Trade and Other Payables 282, , ,160 95, , ,345 Dividends Payable 8,103 19,685 8,103 3,202 3,206 3,202 Income Tax Liabilities 1,909-14, Other Current Financial Liabilities - 5, Interest Bearing Loans and Borrowings 439, , , ,576 64, ,576 Bank Overdraft 203,516 74, , ,529 22,041 13, , , , , , ,577 Total Equity and Liabilities 4,971,281 4,075,530 5,089,292 1,837,907 1,530,399 1,877,940 Net Assets Per Share (Rs.) The above figures are provisional & subject to audit. These Financial Statements are in compliance with the requirements of the Companies Act No.07 of K D D Gunasekera - Director Finance The board of directors is responsible for these financial statements. Signed for and on behalf of the board by,. A N Esufally - Chairman Colombo 7 August W M De F Arsakularatne - Director

6 STATEMENT OF PROFIT OR LOSS Group Company 3 Months 3 Months % Variance 3 Months 3 Months % Variance Ended Ended Ended Ended Rs.' Revenue 336, ,250 11% 74,815 96,818-23% Cost of Sales (105,851) (101,627) 4% (22,940) (31,282) -27% Gross Profit 230, ,623 14% 51,875 65,536-21% Dividend Income , % Other Operating Income and Gains 16,987 24,566-31% 1,469 2,757-47% Sales and Marketing Expenses (13,285) (13,610) -2% (4,666) (5,019) -7% Administrative Expenses (302,786) (289,341) 5% (94,858) (91,621) 4% Operating Profit/(Loss) (68,391) (76,762) -11% (46,180) (21,694) 113% Finance Cost (25,118) (4,950) 407% (12,822) (3,082) 316% Finance Income 2,574 3,768-32% 152 3,049-95% Profit /(Loss) Before Tax (90,935) (77,944) 17% (58,850) (21,727) 171% Income Tax Expense (3,915) (7,175) -45% (414) % Profit/(Loss) for the Period (94,850) (85,119) 11% (59,264) (21,506) 176% Attributable to : Equity Holders of the Parent (90,892) (72,477) 25% Non-Controlling Interest (3,958) (12,642) -69% (94,850) (85,119) 11% Earnings /(Loss) Per Share (Rs.) (0.81) (0.65) (0.53) (0.19) The above figures are provisional & subject to audit.

7 STATEMENT OF COMPREHENSIVE INCOME Group Company 3 Months 3 Months 3 Months 3 Months Ended Ended Ended Ended Rs.' Profit/(Loss) for the Period (94,850) (85,119) (59,264) (21,506) Other Comprehensive Income Net Movement on Cash Flow Hedge 2,201 (15,249) 2,206 (6,103) Other Comprehensive Income/(Expense) for the Period, Net of Tax 2,201 (15,249) 2,206 (6,103) Total Comprehensive Income/(Expense) for the Period, Net of Tax (92,649) (100,368) (57,058) (27,609) Attributable to: Equity Holders of the Parent (88,689) (84,541) Non Controlling Interest (3,960) (15,827) (92,649) (100,368) The above figures are provisional & subject to audit.

8 STATEMENT OF CHANGES IN EQUITY Group Stated Other Components of Equity Other Revenue Retained Total Non Controlling Equity Capital Cash Flow Hedge Revaluation Available for Reserves Earnings Interest Reserve Reserve Sale Reserve Rs.'000 Balance as at April 01, ,122 17, ,631-19, ,047 2,441, ,224 3,246,448 Net Profit/(Loss) for the period (72,477) (72,477) (12,642) (85,119) Other Comprehensive Income/(Expense) Attributable to Owners of the Parent Net Movement in Cash Flow Hedge - (12,064) (12,064) (3,185) (15,249) Total Comprehensive Income/(Expense) - (12,064) (72,477) (84,541) (15,827) (100,368) Dividend Paid (4,457) (4,457) Total Balance as at June 30, ,122 5, ,631-19, ,570 2,356, ,939 3,141,622 Balance as at April 01, ,122 (1,065) 592,777 (58,018) - 1,115,060 2,561,876 1,034,520 3,596,396 Net Profit/(Loss) for the period (90,892) (90,892) (3,958) (94,850) Other Comprehensive Income/(Expense) Net Movement in Cash Flow Hedge - 2, ,203 (2) 2,201 Total Comprehensive Income/(Expense) - 2, (90,892) (88,689) (3,960) (92,649) Balance as at June 30, ,122 1, ,777 (58,018) - 1,024,168 2,473,187 1,030,560 3,503,747 The above figures are provisional & subject to audit.

9 STATEMENT OF CHANGES IN EQUITY Company Stated Other Components of Equity Other Revenue Retained Total Capital Cash Flow Hedge Revaluation Available for Reserves Earnings Rs.'000 Reserve Reserve Sale Reserve Balance as at April 01, ,122 (1,486) 83,929-14, ,763 1,203,828 Net Profit/(Loss) for the period (21,506) (21,506) Other Comprehensive Income/(Expense) Net Movement on Cash Flow Hedge - (6,103) (6,103) Total Comprehensive Income/(Expense) - (6,103) (21,506) (27,609) Dividend Paid Balance as at June 30, ,122 (7,589) 83,929-14, ,257 1,176,219 Balance as at April 01, ,122 (1,882) 89,787 (58,018) - 284,364 1,227,373 Net Profit/(Loss) for the period (59,264) (59,264) Other Comprehensive Income/(Expense) Net Movement in Cash Flow Hedge 2, ,206 Total Comprehensive Income/(Expense) - 2, (59,264) (57,058) Balance as at June 30, , ,787 (58,018) - 225,100 1,170,315 The above figures are provisional & subject to audit.

10 STATEMENT OF CASH FLOWS Rs.'000 Cash Flows From / (Used in) Operating Activities 3 Months Ended Group 3 Months Ended Months Ended Company 3 Months Ended Net Profit before Income Tax (90,935) (77,944) (58,850) (21,727) Adjustments for Depreciation 44,933 36,752 12,143 12,157 Amortization 4,108 4,441 1,794 1,794 Exchange (Gain)/Loss 88 (6,564) 1,310 (3,549) Interest Income (2,574) (3,768) (151) (3,049) Dividend Income (6,653) Finance Costs 25,118 4,950 12,822 3,081 Loss / (Profit) on Disposal of Fixed Assets (40) (692) (18) 34 Impairment charge/(reversal) of debtors (1,891) 13,845 2,220 4,787 Provision for Defined Benefit Plan 2,785 2, Working Capital Adjustments (18,408) (26,083) (28,010) (12,735) (Increase)/ Decrease in Inventories (8,558) (1,468) (Increase)/ Decrease in Trade and Other Receivables 93, ,463 16,694 53,351 Increase/ (Decrease) in Trade and Other Payables (51,387) (162,202) (18,589) (50,299) (Increase)/Decrease Current Financial Assets (15,597) (Increase)/Decrease Current Financial Liabilities (4,384) Cash Generated from / (Used in) Operations (4,514) 64,710 (29,754) (9,635) Finance Cost Paid (25,118) (4,950) (12,822) (3,082) Finance Income Received 2, Defined Benefit Plan Costs Paid (3,755) (1,699) - (1,171) Taxes Paid (7,495) (3,455) (963) (876) Net Cash From/(Used in) Operating Activities (38,308) 54,606 (43,539) (14,764) Cash Flows From / (Used in) Investing Activities Acquisition of Property, Plant & Equipment (27,548) (14,493) (15,959) (965) Proceeds from Disposal of Property, Plant & Equipment 29 1, Interest Received - 3, ,049 Net Cash Flows From / (Used in) Investing Activities (27,519) (8,764) (15,808) 2,106 Net Cash Flows From / (Used in) Financing Activities Proceeds From Interest Bearing Loans & Borrowings - 116, ,000 Repayment of Related Party Borrowings - (20,000) (30,000) (66,000) Repayment of Interest Bearing Loans & Borrowings (42,566) (29,318) (22,130) (20,443) Dividends Paid to Non-Controlling Interest - (4,456) - - Net Cash Flows from/(used in) Financing Activities (42,566) 62,226 (52,130) 29,557 Net Increase/(Decrease) in Cash and Cash Equivalents (108,393) 108,068 (111,477) 16,899 Cash and Cash Equivalents at the beginning of the period 120,449 33,438 29,442 13,734 Cash and Cash Equivalents at the end of the period 12, ,506 (82,035) 30,633 Analysis of Cash & Cash Equivalents Cash and Bank Balances 215, ,638 18,494 52,674 Bank Overdraft (203,516) (74,168) (100,529) (22,041) 12, ,470 (82,035) 30,633 The above figures are provisional & subject to audit.

11 NOTES TO THE FINANCIAL STATEMENTS 1 The condensed interim financial statements have been prepared in accordance with Sri Lanka Accounting Standard LKAS - 34, Interim Financial Reporting. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March Further, provisions of the Companies Act No. 7 of 2007 have been considered in preparing the interim financial statements. 2 The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group s annual consolidated financial statements for the year ended 31 March 2018, except for the adoption of SLFRS 15 which is effective as of 1 April The Group has not early adopted any other standard, interpretation or amendment that have been issued but is not yet effective. Unaudited previous quarter's figures have been restated wherever necessary for better presentation and to be comparable with those of the current period. The Sri Lanka Accounting Standard SLFRS 9 (Financial Instruments) is effective for annual periods beginning on or after 1 January However, CA Sri Lanka has granted the option, via the Statement of Alternative Treatment (SoAT) to prepare the interim financial statements continuing the application of LKAS 39 (Financial Instruments: Recognition and Measurement). As permitted by the above SoAT, the Group/ Company prepared Interim Financial Statements based on LKAS 39. The Group applies, SLFRS 15 Revenue from Contracts with Customers for the first time using the full retrospective method of adoption. As required by LKAS 34, the nature and effect of these changes are as below. Basis of preparation and changes to the Group s accounting policies on SLFRS 15 - Revenue from Contracts with Customers SLFRS 15 supersedes LKAS 11 Construction Contracts, LKAS 18 Revenue and related Interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard establishes a five-step model to account for revenue arising from contracts with customers. Under SLFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires the exercise of judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. Accordingly, based on the gap analysis carried out between current accounting practice and the requirements of the new standard, the Group concluded that SLFRS 15 does not have a material impact on Group's financial statements. 3 4 There has been no significant change in the nature of the contingent liabilities as disclosed in the Annual Report of 2017/18. No circumstances have arisen after the reporting date, which would require adjustments to or disclosure in the Financial Statements.

12 INVESTOR INFORMATION Audited Group Y/E Earnings /(Loss) per Share (Rs.) (0.81) (0.65) 1.07 Debt/ Total Equity Ratio (%) Interest Cover (Times) (3) (15) 7 Quick Asset Ratio (Times) No. of Shares Representing Stated Capital - Voting 75,514,738 75,514,738 75,514,738 - Non Voting 36,011,056 36,011,056 36,011,056 Market Price - Voting - Highest (Rs.) Voting -Lowest (Rs.) Last Traded Price (Rs.) Market Price - Non Voting - Highest (Rs.) Non Voting -Lowest (Rs.) Last Traded Price (Rs.) The above figures are provisional & subject to audit.

13 DIRECTORS' SHAREHOLDING No. of Shares Voting Non Voting Mr. A N Esufally 16,565 NIL Mr. S M Enderby NIL NIL Mr. W M De F Arsakularatne NIL NIL Mr. E J D Rajakarier NIL NIL Mr. M A Jafferjee NIL NIL Mr. R N Athukorala NIL NIL Mr. T M Wijesinghe NIL NIL Ms. S L Speldewinde NIL NIL Mr. S A Chojnacki NIL NIL Mr. I A H Esufally NIL NIL LIST OF 20 MAJOR SHAREHOLDERS (VOTING) Name No. of Shares % Hemas Holdings PLC 42,802, Lodging Investment (Labuan) Ltd. 18,886, Seylan Bank Ltd./ B S M De Silva 1,294, Mr. E J De Soysa 800, People's Leasing & Finance PLC/L P Hapangama 648, Mrs. B C R Wickramaratne 620, Acuity Partners (Pvt) Ltd. / Mr B S M De Silva 490, Mrs. M V Fernando 400, The Ceylon Chamber Of Commerce Account No , Dr. B G S De Silva 355, Mrs. C A Wenceslaus 286, Mrs. A R Gamage 248, Dr. R S Deraniyagala 225, People's Leasing & Finance PLC/DR. H S D Soysa & MRS. G Soysa 221, Ms. H G S Ansell 216, Mr. P P S Fernando 216, Miss. J C Wickramaratne 203, Hemtours (Private) Limited 181, Mrs. S Poologasundram 161, Dr. K Poologasundram 156, ,786, Shares held by the balance shareholders 6,728, ,514,

14 LIST OF 20 MAJOR SHAREHOLDERS (NON -VOTING) Name No. of Shares % Hemas Holdings PLC 19,260, Lodging Investment (Labuan) Ltd. 7,156, Deutsche Bank AG as Trustee to Candor Opportunities Fund 1,664, Askold (Pvt) Ltd. 999, National Industries Group (Holdings) (S.A.K) 863, Ceylon Guardian Investment Trust PLC A/C # , Trading Partners (Pvt) Ltd. 410, Shalsri Investments (Pvt) Ltd. 341, J B Cocoshell (Pvt) Ltd. 329, Acuity Partners (Pvt) Ltd. /Mr. B S M De Silva 309, Ceylon Investment PLC A/C # , Mr. Dalpethado Dueleep Fairlie George 234, Mrs. C A D S Woodward 184, Cocoshell Activated Carbon Company Ltd. 150, Mr. H A Pieris 139, Mrs. H.G.S.Ansell 136, Mr. M K Kutubdeen 134, People's Leasing & Finance PLC/DR. H S D Soysa & MRS. G Soysa 118, Dr. H S D Soysa 112, Mrs. B Y La Brooy 100, ,377, Shares held by the balance shareholders 2,633, ,011, MINIMUM PUBLIC HOLDING REQUIREMENT AS PER SECTION OF CSE LISTING RULES Category Float Adjusted Market Capitalization (Rs.) Public Holding Percentage No. of Shareholders Option Ordinary (Voting) Shares 208,545, % Category Float Adjusted Market Capitalization (Rs.) Public Holding Percentage No. of Shareholders Option Ordinary (Non - Voting) Shares 141,981, % 647 2

15 CORPORATE INFORMATION Legal Form A quoted public company with Limited Liability Incorporated in Sri Lanka in 1966 Company Registration No. PQ 223 Subsidiaries Hotel Sigiriya PLC Dolphin Hotels PLC Serendib Leisure Management Limited Sanctuary Resorts Lanka (Pvt) Limited Sanctuary Resorts Wilpattu Lanka (Pvt) Limited Frontier Capital Lanka (Pvt) Limited Evolution Capital (Pvt) Limited Lantern Villa (Pvt) Limited Directors Mr. A N Esufally Chairman - Alternate: Mr. V H A Perera Mr. W M De F Arsakularatne Mr. S M Enderby Mr. I A H Esufally Mr. E J D Rajakarier Mr. M A Jafferjee Mr. R N A Athukorala Ms. S L Speldewinde Mr. T M Wijesinghe Mr. S A Chojnacki Registered Office Hemas House Level 3 75, Braybrooke Place Colombo 02 Tel: + 94 (11) Fax: + 94 (11) inquiries@serendibleisure.lk Website : Secretaries Hemas Corporate Services (Pvt) Ltd. Level 9, Hemas House 75, Braybrooke Place Colombo 02 Tel: + 94 (11) Fax: + 94 (11) Managing Agent Serendib Leisure Management Ltd.