Integrated. John Keells Holdings PLC l Nine months ended 31st December 2014 Interim condensed financial statements

Transcription

1 Integrated John Keells Holdings PLC l Nine months ended 31st December 2014 Interim condensed financial statements

2 For a growing major city and its main builiding project, an icon has to stamp a contemporary mark that projects to the future. The strong backdrop and cantilever forms of the Waterfront Integrated Resort provide that dynamic and powerful ambition, that JKH and Sri Lanka subscribe to. - Cecil Balmond When the architect of the Waterfront Integrated Resort Cecil Balmond first visited the site, he visualised a property that represented the vigour of John Keells Holdings and the spirit of a new Sri Lanka. His first impression, on the left, transformed over the next few months into an iconic structure that stands majestic against the Colombo skyline, as shown in the artist s impressions above.

3 Chairman s Message Financial Information Chairman s Message Dear Stakeholder, The Group profit before tax (PBT) at Rs.5.42 billion in the third quarter of the financial year 2014/15 is an increase of 27 per cent over the corresponding Rs.4.27 billion recorded in the previous financial year. The PBT for the first nine months of the financial year 2014/15 at Rs billion is an increase of 33 per cent over the Rs.9.11 billion recorded in the corresponding period of the last financial year. The profit attributable to equity holders for the third quarter at Rs.4.33 billion reflects an increase of 28 per cent over the corresponding Rs.3.39 billion in the previous year, while the performance for the first nine months at Rs.9.13 billion reflects an increase of 30 per cent over the corresponding Rs.7.04 billion recorded in the last financial year. The revenue at Rs billion in the third quarter of the financial year 2014/15 is an increase of 9 per cent over the corresponding Rs billion recorded in the previous financial year. The revenue for the first nine months of the financial year 2014/15 at Rs billion is an increase of 7 per cent over the Rs billion recorded in the corresponding period of the last financial year. The Company PBT for the third quarter of the financial year 2014/15 at Rs.2.33 billion is an increase of 8 per cent over the corresponding Rs.2.17 billion recorded in the previous financial year, while the PBT for the first nine months of the financial year at Rs.6.39 billion is an increase of 38 per cent over the corresponding Rs.4.62 billion recorded in the financial year 2013/14. Transportation The Transportation industry group PBT of Rs.727 million in the third quarter of 2014/15 is an increase of 35 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.538 million]. The increase in profitability is mainly attributable to the performance of South Asia Gateway Terminals, where overall volumes and domestic throughput recorded an increase over the corresponding period of the last financial year. The contraction in margins arising out of an increasingly competitive operating environment negatively impacted the performance of the Bunkering business. The performance of the Logistics business was in line with expectations as the growth in the active customer base resulted in an increase in both profitability and market share. Leisure The Leisure industry group PBT of Rs.1.40 billion in the third quarter of 2014/15 is a decrease of 9 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.1.54 billion]. Sri Lanka recorded a total of 1.53 million tourist arrivals for the calendar year 2014, representing a year-on-year growth of 19.8 per cent. However, the economic volatility in Russia and the continuing unrest in Ukraine had a significant negative impact on the occupancies of both the Maldivian and Sri Lankan Resorts in the peak booking periods of November and December. The performance of the Sri Lankan Resorts was further impacted by the timing of the Presidential Election which was held in January During the quarter under review, a Property Management System aimed at enhancing the overall guest experience under the Cinnamon brand was introduced across the City Hotel sector and will be rolled out across the Sri Lankan and Maldivian Resort properties in the months to follow. We remain positive that such initiatives will expand and strengthen our brand presence and help differentiate in a market which now has a variety of product offerings. The Sri Lankan Resorts sector, notwithstanding the above, recorded an increase in profitability, aided by the growth in tourist arrivals from key external markets such as China, United Kingdom and the Middle East, as well as a healthy contribution from the local tourist segment. Successful yield management and efficiency improvements further enhanced the sector bottom-line. In the calendar year 2014, tourist arrivals from China to Sri Lanka recorded a significant growth of 136 per cent (from 54,288 to 128,166) over the previous year. This growth momentum will be further augmented throughout 2015 by the improved connectivity following the introduction of direct flights by Air China and continuation of the weekly charter, in collaboration with our Destination Management business. Property The Property industry group PBT of Rs.376 million in the third quarter of 2014/15 is an increase of 8 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.347 million]. The growth in PBT is mainly on account of higher revenue recognition at the OnThree20 residential development project which reached completion. The handing over of apartments commenced in the quarter under review. The 7th Sense on Gregory s Road residential development is on schedule for completion by mid The Honourable Prime Minister announced in Parliament yesterday that the agreements entered into with Waterfront Properties (Private) Limited under the Strategic Development Projects Act will be amended to restrict the ability to rent space for gaming activities. Your Company will engage with the Government in this regard. Whilst the proposed amendment will constrain the ability to command premium rentals on this component of the project, the multi-faceted nature of this development gives your Board the confidence that the project will still be viable given its diverse portfolio of revenue streams and iconic design which, we believe, will transform the landscape of Colombo. As such, the project will continue as planned. The overall brand architecture for the Waterfront Project has now been finalised with the project being branded as Cinnamon Life and demand for both the residential and commercial spaces continues to remain encouraging. Consumer Foods and Retail The Consumer Foods and Retail industry group PBT of Rs.583 million in the third quarter of 2014/15 is an increase of 156 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.228 million], with both sectors contributing to the improved performance. This is a reflection of the strategies implemented during the past several months which have yielded the desired results in terms of gains in market share in the targeted market segments and enhanced operational efficiencies. Ceylon Cold Stores witnessed an increase in profitability, aided by its evolving product mix amidst improving consumer sentiment and changing consumption patterns. This performance is despite the adverse weather conditions which resulted in severe floods in many areas of the country during the quarter under review, which curtailed volume growth in both the Frozen Confectionery and Beverage businesses of the Group. Keells Food Products recorded a Interim condensed financial statements l 1

4 Chairman s Message significant increase in both volumes and profitability compared to the corresponding period of the last financial year. The Retail sector continued its strong performance with an increase in both footfall and average basket values contributing positively towards a year-on-year growth in same store sales for the period under review. Financial Services The Financial Services industry group PBT of Rs.1.10 billion in the third quarter of 2014/15 is an increase of 8 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.1.01 billion]. Union Assurance was the primary contributor to the improved performance. The segregation of the Life and General businesses was concluded on 1 January 2015 subsequent to obtaining the requisite approval from shareholders and in line with regulatory guidelines. The segregation of the insurance businesses was followed by the successful sale of a 78 per cent stake of the General Insurance business to Fairfax Asia Limited. This was completed on 2 January During the quarter under review, Nations Trust Bank benefitted from the encouraging growth in credit volumes and the continued emphasis placed on cost management. The performance of the Stock Broking arm of the Group was in line with expectations as profitability increased on the back of improved market activity. Information Technology The Information Technology industry group PBT of Rs.120 million in the third quarter of 2014/15 is an increase of 38 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.87 million]. The Office Automation business witnessed an increase in profitability due to its evolving sales mix and better working capital management. The Business Process Outsourcing operations of the Group was positively impacted by the growth witnessed across a few large clients, coupled with added focus on operational cost management. Other, Including Plantation Services Other, Including Plantation Services and the Corporate Centre recorded a PBT of Rs.1.11 billion in the third quarter of 2014/15, this being an increase of 116 per cent over the third quarter of the previous financial year [2013/14 Q3: Rs.517 million]. The increased PBT was mainly a result of the capital gain of Rs.593 million on the divestment of the Group s stake in Access Engineering PLC held under John Keells Capital. Political unrest and economic volatility witnessed across some of the key markets for Sri Lanka s tea exports, combined with adverse weather conditions and declining oil prices, negatively impacted the profitability of the Plantations Services sector. Sustainability Initiatives The Group recorded a marginal increase of an estimated 2 per cent in its carbon footprint to 18,887 MT this quarter, compared to 18,589 MT recorded in the corresponding period of the last financial year. However, the Group s carbon footprint per million rupees of revenue reduced by 6 per cent to 0.74 MT this quarter. The quarter also saw a reduction of water withdrawn by approximately 1 per cent to 437,952 cubic meters, despite the inclusion of Cinnamon Red to the sustainability reporting scope. The water withdrawn per million rupees of revenue reduced by 9 per cent to 17.2 cubic meters. Waste generated by the Group increased by approximately 1 per cent to 2,018 MT. The Group provided approximately 6.6 hours of training per employee. In addition, occupational injuries reduced to 46 incidences, compared to 56 in the corresponding quarter of the previous year. Corporate Social Responsibility Following are some of the highlights of the John Keells Foundation s work during the quarter under review. The foundation level programme under the John Keells English Language Scholarship Programme commenced with over 1,200 students registered in 18 Districts. Under the Neighbourhood Schools Development Project, the 6-month vocational training programme conducted at our city hotels and supermarkets was completed. The Final Step University Soft Skills initiative was conducted at the Wayamba University and was successfully concluded with an average of 450 students of multiple faculties attending the workshops. A total of 2,731 persons were educated under the John Keells HIV and AIDS Awareness Campaign and a week long campaign to mark World AIDS Day with Group-wide participation was undertaken. The John Keells Vision Project conducted 6 eye camps across the country, and completed a total of 361 cataract operations. Project WAVE (Working Against Violence through Education), which is aimed at combatting gender based violence and child abuse was officially launched. A total of 523 Group staff was educated under this project. The pilot collaboration between John Keells Foundation, Cinnamon Hotels and CARE International aimed at providing hospitality related skills and training to disadvantaged youth in the Southern, North Central and Eastern Provinces was launched. Participated in a flood relief initiative benefitting approximately 8,000 families housed at welfare camps in Puttalam, Polonnaruwa, Batticaloa, Anuradhapura and Trincomalee, with packing and distribution operations supported by the Group s CSR volunteers. Susantha Ratnayake Chairman 30 January l John Keells Holdings PLC l

5 Chairman s Message Financial Information Consolidated Income Statement Quarter ended 31st December Nine months ended 31st December Change Change Note % % Continuing operations Sale of goods 14,441,838 12,711, ,272,155 35,014,880 9 Rendering of services 11,026,161 10,760, ,643,409 29,191,955 5 Revenue 25,467,999 23,472, ,915,564 64,206,835 7 Cost of sales (18,490,572) (16,906,607) 9 (50,265,987) (46,906,238) 7 Gross profit 6,977,427 6,565, ,649,577 17,300,597 8 Other operating income 538, , ,264,844 1,166,058 8 Distribution expenses (931,828) (853,512) 9 (2,547,153) (2,389,993) 7 Administrative expenses (2,852,712) (2,681,503) 6 (8,177,080) (7,801,191) 5 Other operating expenses (882,524) (912,425) (3) (2,485,344) (2,421,322) 3 Results from operating activities 2,849,269 2,632, ,704,844 5,854, Finance cost (162,833) (307,519) (47) (541,587) (977,497) (45) Finance income 2,398,978 1,572, ,673,197 4,070, Net finance income 2,236,145 1,265, ,131,610 3,092, Change in insurance contract liabilities 8 (495,640) (366,423) 35 (2,988,351) (2,063,120) 45 Share of results of equity accounted investments 833, , ,311,170 2,231,196 4 Profit before tax 5,423,615 4,268, ,159,273 9,114, Tax expense 9 (717,126) (512,094) 40 (2,115,461) (1,310,651) 61 Profit for the period 4,706,489 3,756, ,043,812 7,804, Attributable to : Equity holders of the parent 4,331,664 3,394, ,125,697 7,040, Non-controlling interest 374, , , , ,706,489 3,756, ,043,812 7,804, LKR LKR LKR LKR Earnings per share Basic Diluted Dividend per share Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim condensed financial statements l 3

6 Consolidated Statement of Comprehensive Income Quarter ended 31st December Nine months ended 31st December Note Profit for the period 4,706,489 3,756,596 10,043,812 7,804,290 Other comprehensive income Currency translation of foreign operations 98,130 (75,705) 79, ,953 Revaluation of land and buildings - 105,036-62,636 Share of other comprehensive income of equity-accounted investees 80,992 (55,493) 73, ,688 Net (loss) / gain on available-for-sale financial assets (5,071) 131, , ,433 Available-for-sale reserve reclassified to profit and loss on disposal (187,360) - (409,771) - (192,431) 131,033 (119,940) 174,433 Transfer to revenue reserves Re-measurement gain / (loss) on defined benefit plans 10,903 (4,585) 10,903 (4,585) Tax on other comprehensive income 9-2,790-2,790 Other comprehensive income for the period, net of tax (2,406) 103,076 44, ,915 Total comprehensive income for the period, net of tax 4,704,083 3,859,672 10,088,351 8,537,205 Attributable to : Equity holders of the parent 4,309,917 3,507,243 9,143,125 7,720,509 Non-controlling interest 394, , , ,696 4,704,083 3,859,672 10,088,351 8,537,205 Note : All values are in LKR 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 47,248,897 47,473,493 Lease rentals paid in advance 8,662,994 9,096,488 Investment property 4,440,227 4,440,227 Intangible assets 2,664,653 2,472,254 Investments in associates & joint ventures 16,115,311 14,854,367 Other non current financial assets 21,839,521 21,077,133 Deferred tax assets 131, ,369 Other non current assets 23,893,087 19,711, ,996, ,267,660 Current assets Inventories 6,331,566 6,966,020 Trade and other receivables 12,353,413 12,494,738 Amounts due from related parties 7, ,323 Other current assets 3,402,258 2,827,940 Short term investments 63,172,992 54,551,545 Cash in hand and at bank 5,085,133 5,967,088 90,353,034 83,138,654 Total assets 215,349, ,406,314 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 50,682,997 49,748,814 Revenue reserves 58,134,823 51,303,649 Other components of equity 22,106,568 21,844, ,924, ,897,153 Non-controlling interest 11,689,354 11,615,980 Total equity 142,613, ,513,133 Non-current liabilities Insurance contract liabilities 23,135,055 20,273,009 Borrowings 6,538,983 9,968,646 Deferred tax liabilities 1,442,439 1,328,479 Employee benefit liabilities 1,696,376 1,538,772 Other deferred liabilities 118,686 89,540 Other non-current liabilities 655, ,519 33,586,902 33,590,965 Current liabilities Trade and other payables 15,789,935 14,715,073 Amounts due to related parties 26,484 78,779 Income tax payable 1,481, ,508 Short term borrowings 13,121,167 9,751,976 Current portion of borrowings 3,200,076 3,664,399 Other current liabilities 3,724,270 2,383,493 Bank overdrafts 1,805,605 2,784,988 39,148,839 34,302,216 Total equity and liabilities 215,349, ,406,314 LKR LKR Net assets per share Note : All values are in LKR 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 30 January 2015 J R F Peiris Group Finance Director Interim condensed financial statements l 5

8 Consolidated Statement of Cash Flows For the nine months ended 31st December Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before working capital changes A 7,005,001 7,045,721 (Increase) / Decrease in inventories 634,454 (394,679) (Increase) / Decrease in trade and other receivables 536,939 (10,234) (Increase) / Decrease in other current assets (876,455) (256,015) (Increase) / Decrease in other non-current assets (4,181,758) (795,893) Increase / (Decrease) in trade and other payables 1,285,411 (599,261) Increase / (Decrease) in other current liabilities 1,369,108 1,230,511 Increase / (Decrease) in insurance contract liabilities 2,862,046 1,956,272 Cash generated from operations 8,634,746 8,176,422 Finance income received 5,845,559 4,052,203 Finance costs paid (531,365) (967,275) Dividend received 852,324 1,269,473 Tax paid (753,998) (1,226,020) Gratuity paid (96,812) (113,956) Net cash flow from operating activities 13,950,454 11,190,847 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (2,233,349) (2,751,498) Purchase of intangible assets (250,479) (29,266) Increase in interest in associates (113,090) (31,838) Proceeds from sale of property, plant and equipment and intangible assets 252, ,065 Proceeds from demolition on property, plant & equipment - 37,613 Proceeds from sale of financial instruments - fair valued through profit or loss 347, ,620 Purchase of financial instruments - fair valued through profit or loss (663,000) (424,602) (Purchase) / disposal of short term investments (net) 4,765,261 (17,501,977) (Purchase) / disposal of other non current financial assets (net) (882,327) (526,895) Net cash flow from / (used in) investing activities 1,222,548 (20,730,778) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 934,183 23,238,149 Proceeds from non-controlling interests on issue of rights in subsidiaries Direct cost on issue of shares - (161,322) Acquisition of non-controlling interest - (57,000) Dividend paid to equity holders of parent (2,478,504) (2,276,448) Dividend paid to shareholders with non-controlling interest (698,773) (640,066) Proceeds from long term borrowings 798,942 2,028,709 Repayment of long term borrowings (4,757,339) (4,069,669) Proceeds from/(repayment of) other financial liabilities (net) 3,369,191 1,301,021 Net cash flow from / (used in) financing activities (2,832,300) 19,363,799 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 12,340,702 9,823,868 CASH AND CASH EQUIVALENTS AT THE BEGINNING 30,736,086 16,777,731 CASH AND CASH EQUIVALENTS AT THE END 43,076,788 26,601,599 ANALYSIS OF CASH AND CASH EQUIVALENTS Favorable balances Short term investments 39,797,260 25,735,970 Cash in hand and at bank 5,085,133 4,047,733 Unfavorable balances Bank overdrafts (1,805,605) (3,182,104) Total Cash and cash equivalents 43,076,788 26,601,599 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 6 l John Keells Holdings PLC l

9 Chairman s Message Financial Information For the nine months ended 31st December A Profit before working capital changes Profit before tax 12,159,273 9,114,941 Adjustments for: Finance income (6,673,197) (4,070,213) Finance cost 541, ,497 Share-based payment expense 255, ,751 Share of results of equity accounted investments (2,311,170) (2,231,196) Loss on sale of non-current investments - 11,461 Depreciation of property, plant and equipment 2,070,428 1,965,323 Provision for impairment losses - 141,454 (Profit)/Loss on sale of property, plant and equipment and intangible assets (54,484) 30,045 Amortisation of lease rentals paid in advance 512, ,311 Amortisation of intangible assets 182, ,834 Amortisation of other deferred liabilities (384) (384) Gratuity provision and related costs 265, ,764 Unrealised (gain) / loss on foreign exchange (net) 57,669 36,133 7,005,001 7,045,721 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim condensed financial statements l 7

10 Consolidated Statement of Changes in Equity Stated capital Revaluation reserve Attributable to equity holders of parent Foreign currency translation reserve Other capital reserves Available for sale reserve Revenue reserves Total Noncontrolling interest Total equity As at 1 April ,748,814 17,770,505 3,179, , ,488 51,303, ,897,153 11,615, ,513,133 Profit for the period ,125,697 9,125, ,115 10,043,812 Other comprehensive income ,611 - (128,086) 10,903 17,428 27,111 44,539 Total comprehensive income ,611 - (128,086) 9,136,600 9,143, ,226 10,088,351 Exercise of share options 934, , ,183 Share based payments , , ,353 Final dividend paid / (1,485,620) (1,485,620) - (1,485,620) Interim dividend paid / (992,884) (992,884) - (992,884) Subsidiary dividend to noncontrolling interest , ,926 (877,700) (698,774) Acquisition, disposal and changes in non-controlling interest (5,848) (5,848) 5,848 - As at 31 December ,682,997 17,770,505 3,313, , ,402 58,134, ,924,388 11,689, ,613,742 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 ,040,321 7,040, ,969 7,804,290 Other comprehensive income - 63, , ,872 (2,979) 680,188 52, ,915 Total comprehensive income - 63, , ,872 7,037,342 7,720, ,696 8,537,205 Issue of rights 23,097, ,097,897-23,097,897 Direct cost on issue of shares (158,882) (158,882) (2,440) (161,322) Exercise of share options 140, , ,252 Share based payments , ,751 71,875 Final dividend paid / (1,286,460) (1,286,460) - (1,286,460) Interim dividend paid / (989,988) (989,988) - (989,988) Subsidiary dividend to noncontrolling interest , ,650 (864,716) (640,066) Acquisition, disposal and changes in non-controlling interest (36,893) (36,893) (19,682) (56,575) As at 31 December ,718,545 17,843,610 3,175, , ,154 47,493, ,674,006 11,296, ,898,228 Note : All values are in LKR 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 31st December Nine months ended 31st December Note Change % Change % Continuing operations Rendering of services 220, , , ,475 8 Revenue 220, , , ,475 8 Cost of sales (130,489) (107,878) 21 (361,180) (306,124) 18 Gross profit 90, ,919 (16) 288, ,351 (1) Dividend income 1,205,961 1,748,630 (31) 4,033,585 4,036,680 - Other operating income 4,644 6,620 (30) 60,279 19, Administrative expenses (276,398) (219,854) 26 (938,359) (816,343) 15 Other operating expenses (8,590) (8,711) (1) (27,158) (25,949) 5 Results from operating activities 1,015,806 1,634,604 (38) 3,416,504 3,506,318 (3) Finance cost (23,800) (73,738) (68) (80,333) (203,750) (61) Finance income 1,341, , ,053,720 1,316, Net finance income 1,317, , ,973,387 1,112, Profit before tax 2,333,428 2,165, ,389,891 4,618, Tax expense 9 (100,900) (48,860) 107 (374,712) (182,716) 105 Profit for the period 2,232,528 2,116, ,015,179 4,436, LKR LKR LKR LKR Dividend per share Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim condensed financial statements l 9

12 Company Statement of Comprehensive Income Quarter ended 31st December Nine months ended 31st December Note Profit for the period 2,232,528 2,116,265 6,015,179 4,436,118 Other comprehensive income Net (loss)/gain on available for-sale financial assets 11, , , ,435 Available-for-sale reserve reclassified to profit and loss on disposal (187,360) - (409,771) - (175,978) 107,597 (295,308) 159,435 Tax on other comprehensive income Other comprehensive income for the period, net of tax (175,978) 107,597 (295,308) 159,435 Total comprehensive income for the period, net of tax 2,056,550 2,223,862 5,719,871 4,595,553 Note : All values are in LKR 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 133, ,722 Intangible assets 65,703 68,615 Investments in subsidiaries 32,697,657 31,898,509 Investments in associates & joint ventures 9,066,295 9,016,245 Other non current financial assets 588,833 2,126,322 Other non current assets 15,317 16,108 42,567,679 43,248,521 Current assets Trade and other receivables 62,218 69,194 Amounts due from related parties 149, ,470 Other current assets 43, ,296 Short term investments 40,159,844 35,406,695 Cash in hand and at bank 12,820 51,627 40,427,207 36,379,282 Total assets 82,994,886 79,627,803 EQUITY AND LIABILITIES Stated capital 50,682,997 49,748,814 Revenue reserves 28,241,714 24,705,039 Other components of equity 637, ,069 Total equity 79,561,825 75,130,922 Non-current liabilities Borrowings 1,308,101 2,591,379 Employee benefit liabilities 163, ,862 1,471,371 2,738,241 Current liabilities Trade and other payables 366, ,449 Amounts due to related parties 4,795 4,939 Current portion of borrowings 1,310,721 1,329,103 Income tax payable 186,276 - Other current liabilities 59,673 8,816 Bank overdrafts 33, ,333 1,961,690 1,758,640 Total equity and liabilities 82,994,886 79,627,803 LKR LKR Net assets per share Note : All values are in LKR 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 J R F Peiris Group Finance Director 30 January 2015 Interim condensed financial statements l 11

14 Company Statement of Cash Flows For the nine months ended 31st December Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 6,389,891 4,618,834 Finance income (3,053,720) (1,316,266) Dividend income (4,033,585) (4,036,680) Finance cost 80, ,750 Profit on sale of non current investments (47,900) - Depreciation of property, plant and equipment 22,159 17,122 Profit on sale of property, plant and equipment (803) (4) Amortisation of intangible assets 17,239 18,687 Share based payment expenses 81,456 44,370 Provision for impairment losses 63, ,703 Gratuity provision and related costs 20,866 18,395 Profit before working capital changes (461,023) (249,089) (Increase) / Decrease in trade and other receivables (19,972) 215,220 (Increase) / Decrease in other current assets 88,651 38,430 Increase / (Decrease) in trade and other payables 140,720 (22,043) Increase / (Decrease) in other current liabilities 50,857 (97,372) Cash generated from operations (200,767) (114,854) Finance income received 2,170,287 1,316,266 Finance expenses paid (112,216) (245,156) Dividend received 4,638,450 3,645,227 Tax paid (153,037) (100,438) Gratuity paid (4,459) (8,482) Net cash flow from operating activities 6,338,258 4,492,563 CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (38,310) (56,632) Purchase of intangible assets (14,326) (14,099) Increase in interest in subsidiaries (625,350) (364,423) Increase in interest in associates (113,090) (31,840) Purchase of non current investments (287,650) (31,771) Proceeds from sale of property, plant and equipment 5,804 4 Proceeds from sale of non-current investments 48,000 - (Purchase) / disposal of short term investments (net) (11,950,704) (19,622,130) (Purchase) / disposal of other non current financial assets (net) 2,535,745 - Net cash flow from/(used in) investing activities (10,439,881) (20,120,891) CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 934,183 23,238,149 Direct cost on issue of shares - (148,486) Dividend paid (2,478,504) (2,276,448) Repayment of long term borrowings (1,311,516) (1,295,300) Net cash flow from / (used in) financing activities (2,855,837) 19,517,915 NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (6,957,460) 3,889,587 CASH AND CASH EQUIVALENTS AT THE BEGINNING 14,756,634 5,433,342 CASH AND CASH EQUIVALENTS AT THE END 7,799,174 9,322,929 ANALYSIS OF CASH & CASH EQUIVALENTS Favorable balances Short term investments 7,820,267 9,764,434 Cash in hand and at bank 12,820 60,360 7,833,087 9,824,794 Unfavorable balances Bank overdrafts (33,913) (501,865) 7,799,174 9,322,929 Note : All values are in LKR 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 capital Other capital reserves Available for sale reserve Revenue reserves Total equity As at 1 April ,748, , ,443 24,705,039 75,130,922 Profit for the period ,015,179 6,015,179 Other comprehensive income - - (295,308) - (295,308) Total comprehensive income - - (295,308) 6,015,179 5,719,871 Exercise of share options 934, ,183 Share based payments - 255, ,353 Final dividend paid / (1,485,620) (1,485,620) Interim dividend paid / (992,884) (992,884) As at 31 December ,682, , ,135 28,241,714 79,561,825 As at 1 April ,480,396-83,457 20,221,756 46,785,609 Profit for the period ,436,118 4,436,118 Other comprehensive income , ,435 Total comprehensive income ,435 4,436,118 4,595,553 Issue of rights 23,097, ,097,897 Direct cost on issue of shares (148,486) (148,486) Exercise of share options 140, ,252 Share based payments - 143, ,751 Final dividend paid / (1,286,460) (1,286,460) Interim dividend paid / (989,988) (989,988) As at 31 December ,718, , ,892 22,232,940 72,338,128 Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim condensed financial statements l 13

16 Notes to the Interim Condensed Financial Statements Business segments The following tables present revenue, profit information and other disclosures regarding the Group s business segments. Transportation Leisure Property For the quarter ended 31st December External revenue 4,452,507 3,994,122 5,861,594 5,922,754 1,930,709 1,409,167 Inter segment revenue 116,288 83,157 10,219 12,111 56,417 56,200 Total segment revenue 4,568,795 4,077,279 5,871,813 5,934,865 1,987,126 1,465,367 Eliminations of inter segment revenue Net revenue Segment results 138,014 83,011 1,378,493 1,542, , ,108 Finance cost (13,200) (21,558) (52,267) (108,382) (38,239) (21,719) Finance income 36,628 45,292 72, ,711 57,603 23,838 Change in fair value of investment property Share of results of equity accounted investments 566, ,523 7,425 (151) - - Eliminations / adjustments (621) (602) (1,118) (1,101) (2,183) (2,123) Profit / (loss) before tax 727, ,666 1,404,974 1,538, , ,104 Tax expense (55,833) (29,778) (166,943) (136,593) (20,011) (30,322) Profit / (loss) for the period 671, ,888 1,238,031 1,402, , ,782 Purchase and construction of PPE 23, , , , Addition to IA 3,000-79, Depreciation of PPE 35,166 30, , ,811 5,741 4,258 Amortisation / impairment of IA Amortisation of LRPA , , Gratuity provision and related costs 4,950 3,784 20,167 23, ,894 Note : All values are in LKR 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 Consumer Foods & Retail Financial Services Information Technology Others Group Total ,586,296 6,592,876 2,769,378 2,576,307 2,111,148 2,102, , ,326 25,467,999 23,472,140 96,047 95,199 29,886 23,685 42,279 65, , , , ,595 7,682,343 6,688,075 2,799,264 2,599,992 2,153,427 2,167, ,434 1,020,498 25,983,202 23,953,735 (515,203) (481,595) 25,467,999 23,472, , , , , ,563 81,876 (249,156) (81,454) 3,128,016 2,944,195 (18,087) (37,377) - (2) (522) (19,903) (40,518) (98,578) (162,833) (307,519) 21,062 15,870 32,264 29,768 7,118 5,422 1,341, ,956 1,568, , , ,914-19,590-22, , ,893 (3,000) (3,000) ,041 64,090 56,119 57, , ,848 1,097,323 1,013, ,159 86,985 1,114, ,031 5,423,615 4,268,690 (145,530) (62,763) (151,303) (98,633) (27,340) (19,964) (150,166) (134,041) (717,126) (512,094) 437, , , ,764 92,819 67, , ,990 4,706,489 3,756, , ,593 20,121 63,816 42,159 39,650 7,031 68, ,731 1,143, ,824 2, ,038 2, , ,128 40,532 41,157 43,331 58,693 32,332 33, , ,946 2,844 3,836 47,066 47,065 2,079 3,878 5,658 6,363 57,746 61, , ,451 28,391 23,651 18,889 18,591 4,797 2,852 39,813 6, ,275 85,426 Interim condensed financial statements l 15

18 Notes to the Interim Condensed Financial Statements Business segments The following tables present revenue, profit information and other disclosures regarding the Group s business segments. Transportation Leisure Property For the period ended 31st December External revenue 11,940,440 12,168,771 15,870,624 15,307,581 3,753,509 2,629,827 Inter segment revenue 324, ,093 33,248 50, , ,141 Total segment revenue 12,264,753 12,457,864 15,903,872 15,358,094 3,925,903 2,828,968 Eliminations of inter segment revenue Net revenue Segment results 360, ,836 3,163,931 3,178, , ,488 Finance cost (42,006) (49,853) (187,994) (389,144) (83,818) (59,097) Finance income 114, , , , ,915 77,085 Change in fair value of investment property Share of results of equity accounted investments 1,414,151 1,428,389 4,585 (191) - - Eliminations / adjustments (1,865) (1,809) (3,356) (3,302) (6,553) 8,377 Profit / (loss) before tax 1,844,377 2,029,847 3,215,532 3,136, , ,853 Tax expense (135,448) (122,186) (372,627) (309,027) (57,299) 5,682 Profit / (loss) for the period 1,708,929 1,907,661 2,842,905 2,827, , ,535 Purchase and construction of PPE 86, ,375 1,380,301 1,154,725 1,221 9,903 Addition to IA 3, , Depreciation of PPE 94,416 76,043 1,032, ,946 17,337 12,244 Amortisation / impairment of IA 6,902 1, Amortisation of LRPA , , Gratuity provision and related costs 14,893 11,378 70,415 66, ,524 Note : All values are in LKR 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 Consumer Foods & Retail Financial Services Information Technology Others Group Total ,790,803 18,693,772 7,626,565 7,142,363 5,376,451 5,666,014 2,557,172 2,598,507 68,915,564 64,206, , ,011 81,138 76, , , , ,992 1,496,430 1,520,654 22,072,162 18,955,783 7,707,703 7,218,823 5,497,364 5,884,458 3,040,237 3,023,499 70,411,994 65,727,489 (1,496,430) (1,520,654) 68,915,564 64,206,835 1,574, , , , , ,086 (461,620) (253,522) 6,663,774 5,645,894 (69,940) (125,482) (209) (4) (9,413) (65,718) (148,207) (288,199) (541,587) (977,497) 56,441 79,508 83,978 71,067 22,991 12,206 3,061,072 1,333,264 3,726,809 2,058, , ,145-51,654-47,199 2,311,170 2,231,196 (9,000) (9,000) , ,300 (893) 156,566 1,551, ,179 1,888,417 1,577, , ,228 2,471,126 1,001,042 12,159,273 9,114,941 (412,155) (204,694) (405,433) (253,308) (63,353) (43,058) (669,146) (384,060) (2,115,461) (1,310,651) 1,139, ,485 1,482,984 1,324, , ,170 1,801, ,982 10,043,812 7,804, , ,248 67, ,497 73,836 96,346 89, ,404 2,233,349 2,751,498 22,216 4, ,900 10,839 14,326 13, ,479 29, , , , , , ,864 92,819 90,891 2,070,428 1,965,323 8,764 11, , ,126 8,404 13,044 17,239 18, , , , ,311 84,924 72,648 36,848 35,009 14,722 12,435 42,711 26, , ,764 Interim condensed financial statements l 17

20 Notes to the Interim Condensed Financial Statements Business segments The following table presents segment assets and liabilities of the Group s business segments. Transportation Leisure Property As at Segment non-current assets 1,077,971 1,087,108 45,944,162 45,916,203 29,992,947 25,864,331 Investments in associates & joint ventures 11,600,100 10,916, , , Deferred tax assets Goodwill Eliminations / adjustments Total non-current assets Segment current assets 5,206,987 6,726,272 12,847,886 14,431,207 11,236,482 10,011,165 Other current assets * Eliminations / adjustments Total current assets Total assets Segment non-current liabilities 129, ,069 8,379,275 9,437,859 2,389,358 2,931,215 Deferred tax liabilities Eliminations / adjustments Total non-current liabilities Segment current liabilities 3,154,869 4,529,549 8,620,947 10,003,869 13,151,015 9,697,864 Income tax liabilities Other current liabilities * Eliminations / adjustments Total current liabilities Total liabilities Total segment assets 6,284,958 7,813,380 58,792,048 60,347,410 41,229,429 35,875,496 Total segment liabilities 3,284,303 4,660,618 17,000,222 19,441,728 15,540,373 12,629,079 * Balance mainly comprises of tax refunds / other tax payables. Note : All values are in LKR 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 18 l John Keells Holdings PLC l

21 Chairman s Message Financial Information Consumer Foods & Retail Financial Services Information Technology Others Group Total ,294,994 7,374,589 22,454,398 20,211, , ,647 4,916,538 6,485, ,070, ,442, ,114,519 3,556, ,115,311 14,854, , , , ,884 (4,272,019) (4,122,642) 124,996, ,267,660 5,461,150 4,876,636 13,017,151 10,647,628 3,301,686 3,718,748 41,111,930 37,392,777 92,183,272 87,804,433 3,402,258 2,827,940 (5,232,496) (7,493,719) 90,353,034 83,138, ,349, ,406, , ,150 23,353,043 20,485, , ,287 1,626,516 2,843,992 36,871,047 36,945,884 1,442,439 1,328,479 (4,726,584) (4,683,398) 33,586,902 33,590,965 4,709,267 4,523,464 5,976,576 5,499,273 1,424,171 1,271,843 2,070,235 2,161,300 39,107,080 37,687,162 1,481, ,508 3,724,270 2,383,493 (5,163,813) (6,691,947) 39,148,839 34,302,216 72,735,741 67,893,181 12,756,144 12,251,225 35,471,549 30,858,775 3,691,190 4,222,395 46,028,468 43,878, ,253, ,247,115 5,561,165 5,474,614 29,329,619 25,984,585 1,565,694 1,437,130 3,696,751 5,005,292 75,978,127 74,633,046 Interim condensed financial statements l 19

22 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 31 December 2014, 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 fianancial statements The interim condensed financial statements of the Group and the Company for the 9 months ended 31 December 2014 were authorised for issue by the Board of Directors on 30 January Basis of preparation The interim condensed financial statements have been prepared in compliance with Sri Lanka Accounting Standard 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 The interim condensed financial statements are presented in Sri Lankan Rupees (LKR) and all values are rounded to the nearest thousand except when otherwise indicated. 5 Changes in accounting policies SLFRS 10 Consolidated Financial Statements SLFRS 10 establishes a single control model that applies to all entities including special purpose entities. SLFRS 10 replaces the parts of previously existing LKAS 27 Consolidated and Separate Financial Statements that dealt with consolidated financial statements and SIC-12 Consolidation Special Purpose Entities. SLFRS 10 changes the definition of control such that an investor controls an investee, has exposure or rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. To meet the definition of control in SLFRS 10, all three criteria must be met, including: (a) an investor has power over an investee; (b) the investor has exposure, or rights, to variable returns from its involvement with the investee; and (c) the investor has the ability to use its power over the investee to affect the amount of the investor s returns. SLFRS 10 has had no impact on the consolidation of investments held by the Group. 20 l John Keells Holdings PLC l

23 Chairman s Message Financial Information SLFRS 11 Joint Arrangements SLFRS 11 replaces LKAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities Nonmonetary Contributions by Venturers. SLFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture under SLFRS 11 must be accounted for using the equity method. The application of this new standard impacted the financial position of the Group by replacing proportionate consolidation of the joint ventures with the equity method of accounting. SLFRS 11 is effective for annual periods beginning on or after 1 January The effect of SLFRS 11 is described in more detail in Note 7, which includes quantification of the effect on the financial statements. SLFRS 12 Disclosure of Interests in Other Entities SLFRS 12 sets out the requirements for disclosures relating to an entity s interests in subsidiaries, joint arrangements, associates and structured entities. None of these disclosure requirements are applicable for interim condensed consolidated financial statements, unless significant events and transactions in the interim period requires that they are disclosed. Accordingly, the Group has not made such disclosures. SLFRS 13 Fair Value Measurement SLFRS 13 establishes a single source of guidance under SLFRS for all fair value measurements. SLFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under SLFRS when fair value is required or permitted. The application of SLFRS 13 has not materially impacted the fair value measurements carried out by the Group. 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 Interim condensed financial statements l 21

24 Notes to the Interim Condensed Financial Statements 7 Share of results of equity accounted investees Interests in joint ventures (transition to SLFRS 11) Under LKAS 31 Investment in Joint Ventures (prior to the transition to SLFRS 11), the Group s interest was classified as a jointly controlled entity and the Group s share of the assets, liabilities, revenue, income and expenses were proportionately consolidated in the financial statements. These jointly controlled entities were namely NDO Lanka (Pvt) Ltd (60%), Information Systems Associates (49%) and Sentinel Reality (Pvt) Ltd (40.16%). Upon adoption of SLFRS 11, the Group has consolidated its interests in these entities using the equity method as required and accordingly the comparatives have been restated. The effect of applying SLFRS 11 for the comparative period is as follows: Impact on the income statement For the nine months ended 31st December 2013 In LKR 000s Total Decrease in the reported revenue (rendering of services) (432,972) Decrease in the cost of sales 286,807 Decrease in gross profit (146,165) Decrease in other operating income 65 Decrease in distribution expenses 60,473 Decrease in administrative expenses 44,552 Decrease in other operating expenses 982 Decrease in results from operating activities (40,093) Decrease in finance cost 5,209 Decrease in finance income (671) Decrease in net finance income 4,538 Increase in share of results of equity accounted investees 35,555 Net impact on profit before tax - 22 l John Keells Holdings PLC l

25 Chairman s Message Financial Information Impact on the statement of financial position As at In LKR 000 s Total Decrease in property, plant and equipment (62,174) Increase in equity accounted investments 57,005 Decrease in other non-current financial assets (10,694) Decrease in deferred tax assets (4,448) Decrease in other non current assets (530) Decrease in trade and other receivables (102,518) Increase in amounts due from related parties (17,855) Decrease in short term investments (1,142) Decrease in other current assets (8,956) Decrease in cash in hand and at bank (17,821) Decrease in employee benefit liability 3,012 Decrease in trade and other payables 55,529 Increase in amounts due to related parties 32,724 Decrease in income tax liabilities 340 Decrease in other current liabilities (8,234) Decrease in bank overdraft 85,762 Net impact on equity - There is no material impact on the interim condensed consolidated statement of cash flows or the basic and diluted EPS. 8 Change in 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. 9 Tax expense For the nine months ended 31st December Group Company In LKR 000s Income statement Current income tax 1,990,661 1,296, , ,716 Deferred tax 124,800 14, Other comprehensive Income Deferred tax - (2,790) - - 2,115,461 1,307, , ,716 Interim condensed financial statements l 23