PURPOSE DRIVEN. Interim Condensed Financial Statements

Transcription

1 PURPOSE DRIVEN Interim Condensed Financial Statements Six Months Ended 30th September 2012

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3 Chairman s Message Financial Information Dear Stakeholder, The profit attributable to equity holders for the second quarter at Rs billion reflects an increase of 59 per cent over the previous year while the first half performance at Rs billion reflects an increase of 48 per cent over the corresponding period in the previous year. The Group profit before tax (PBT) at Rs billion in the second quarter of the financial year 2012/13 was an increase of 46 per cent above the Rs billion recorded in the corresponding period in the previous year. The cumulative PBT for the first half of the financial year 2012/13 at Rs billion was an increase of 44 per cent over the PBT of Rs 3.74 billion recorded in the same period in the previous year. The revenue at Rs billion and Rs billion in the second quarter and the first half of the financial year 2012/2013 was 17 per cent and 21 per cent above the Rs billion and Rs billion recorded in the corresponding periods in the previous year. The Company PBT for the first half of Rs billion was an increase of 57 per cent over the Rs billion recorded in the first half of 2011/12. The Board of Directors have drawn comfort from a special purpose audit carried out by the Group Auditors of all quoted companies and selected subsidiaries for the 6 months ended 30th September 2012, to ensure a smooth transition of SLFRS/LKAS adoption. Despite the volatile macro-economic environment which continues to be challenging, the performance of the Group demonstrates our resilience and our ability to adapt to changing circumstances. Transportation The Transportation industry group PBT of Rs billion was an increase of 57 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 653 million], with the bunkering and logistics businesses predominantly contributing to growth. The Group concluded the joint venture in respect of its current freight forwarding businesses in India and Sri Lanka with Norbert Dentressangle S.A. of France. Leisure The Leisure industry group PBT of Rs. 945 million was an increase of 42 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 667 million]. The growth in PBT was mainly driven by City Hotels and Maldivian Resorts. City Hotels increased market share while Maldivian Resorts witnessed higher occupancies. Sri Lankan Resorts and Destination Management were adversely impacted as a result of a disappointing summer. However, the impact of lower occupancies was somewhat offset by higher average room rates. We continue to reiterate the importance of a focused, Sri Lanka centric, destination marketing strategy to attract the relevant visitor segments in ensuring year-round occupancies and yields which justify continued investment in this industry. Property The Property industry group recorded a loss before tax of Rs. 258 million for the second quarter, as against a loss of Rs. 11 million recorded in the corresponding period of the previous year. This is as a result of provisioning against preliminary project development costs. The progress of OnThree20 is on schedule and construction has progressed up to the 17th floor. Construction of the 140,000 square foot K Zone mall in Kapuwatta, Ja-Ela is nearing completion. Consumer Foods and Retail The Consumer Foods and Retail industry group PBT of Rs. 288 million was a decrease of 11 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 324 million]. Volumes of carbonated soft drinks were lower than expected amidst challenging market conditions resulting in lower consumption while ice cream volumes witnessed marginal growth. During the quarter, both these businesses continued to invest in enhancing market penetration for their respective products. The acquisition of the meat processing facility of D & W Foods Limited was concluded during the quarter under review. The Rights Issue by Keells Food Products PLC to raise Rs billion to fund the acquisition and the expansion of the D & W facility was successfully completed. The Retail business witnessed revenue growth during the second quarter on the back of same store revenue growth and revenue from new stores following the rolling out of the way forward strategy. The ongoing costs associated with this implementation impacted the profitability. Financial Services The Financial Services industry group PBT of Rs. 323 million was an increase of 21 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 268 million]. Nations Trust Bank continued to be the primary contributor to the industry group and maintained its growth momentum in the second quarter. Union Assurance announced a Rights Issue Interim Financial Statements 1

4 John Keells Holdings PLC of 1 ordinary share for every 7 shares held to strengthen the capital position of the company in order to proactively meet future regulatory requirements. The low level of activity at the Colombo Stock Exchange continues to adversely impact the revenues of the Stock Brokering business. Information Technology The Information Technology industry group PBT of Rs. 56 million was an increase of 17 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 48 million]. This increase was largely as a result of the improved operations of the Business Process Outsourcing (BPO) operations in India compared with the corresponding period in the previous year. The BPO business continued to experience growth in revenue through the acquisition of new customers. The Group divested its stake in the Chicago based associate Quattro FPO Solutions (Pvt) Limited for a consideration of US Dollars 4.5 million. Other, including Plantation Services Other, comprising of Plantation Services, John Keells Capital and the Corporate Centre, recorded a PBT of Rs. 620 million for the second quarter of the financial year 2012/13 [2011/12 Q2: Rs. 107 million] as a result of the capital gains from the divestment of Quattro FPO Solutions and the partial divestment of the freight forwarding businesses to Norbert Dentressangle and higher finance income. Tea Smallholder Factories and the produce brokering business which benefited from the increase in tea prices performed well. Sustainability Initiatives During the quarter, the Group launched an enterprise-wide Sustainability performance tracking system to monitor and track its Sustainability performance. The system will provide timely information to management with regard to the sustainability performance of the businesses and will enable proactive decision making and continuous improvement. Furthermore, the Group will carry out internal Sustainability Assurances thus contributing to a higher quality of information and adherence to the established standard operating procedures. A third-party external stakeholder engagement was commissioned during the quarter. The findings of this stakeholder engagement would enable the Group to reassess and identify the most material Sustainability indicators. power initiative at Halmillawe and the rainwater harvesting project at Mangalagama. Spear-headed and developed by the people at JKH, I am pleased to note, these efforts further reaffirm that Sustainability is now a part of the DNA of the Group. CSR Initiatives The English for Teens Programme under the John Keells English Language Scholarship Programme targeting school children in 18 Districts is scheduled to commence in November. The Pre-Intermediate English Programme commenced, covering students representing 8 Districts. The English Day 2012, showcasing the talents of the John Keells scholars of 2011/12, was successfully held in Colombo. The John Keells Foundation (JKF) launched a Book Donation Campaign named Gift of Knowledge, covering all Business Units across the Group to coincide with World Literacy Day which fell on 8th September. Books were handed over to the Principals of the five State schools in Colombo 2 supported by the JKF, as well as representatives of the schools in the adopted villages of Halmillawe and Mangalagama. The John Keells Vision Project conducted a total of 5 eye camps while the HIV and AIDS Awareness Campaign successfully concluded 10 awareness sessions covering various private and government sector establishments, including the Sri Lanka Army. Upon the successful execution of the Village Adoption Programme in Halmillawe and Mangalagama, plans are underway to select 3 more villages in the Northern and Eastern Provinces to embark on the next phase of the Village Adoption Programme. Dividend The Board declared a first Interim dividend of Rs for 2012/2013, to be paid on the 23rd of November. Susantha Ratnayake Chairman 9 November 2012 The Group also continued with its various Sustainability initiatives from last year, in the areas of environmental conservation and community development such as the solar 2

5 Consolidated Income Statement Financial Information Quarter ended 30th September Six months ended 30th september Change % Change % Revenue 20,682,653 17,626, ,695,535 33,507, Cost of sales (16,163,818) (13,895,767) 16 (31,632,873) (26,561,519) 19 Gross profit 4,518,835 3,730, ,062,662 6,945, Other operating income 835, , ,010, , Distribution expenses (713,787) (711,174) - (1,449,095) (1,270,465) 14 Administrative expenses (2,830,583) (2,032,756) 39 (5,297,927) (3,997,491) 33 Other operating expenses (581,608) (375,817) 55 (1,193,038) (766,332) 56 Results from operating activities 1,228, , ,133,550 1,312, Finance costs (250,754) (164,428) 53 (483,397) (323,942) 49 Finance income 980, , ,911,624 1,376, Net finance (costs) / income 729, , ,428,227 1,052, Share of results of equity-accounted investees 1,036, , ,829,372 1,374, Profit before tax 2,994,564 2,055, ,391,149 3,739, Tax expense (341,222) (371,951) (8) (881,247) (705,033) 25 Profit for the period 2,653,342 1,683, ,509,902 3,034, Attributable to : Equity holders of the parent 2,411,728 1,515, ,070,446 2,753, Non-controlling interests 241, , , , ,653,342 1,683, ,509,902 3,034, 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 3

6 John Keells Holdings PLC Consolidated Statement of Comprehensive Income Quarter ended Six months ended 30th September 30th September Profit for the period 2,653,342 1,683,890 4,509,902 3,034,710 Other comprehensive income Currency translation of foreign operations (268,823) (6,351) 11,287 (50,538) Share of other comprehensive income of equity-accounted investees (214,644) 37, , ,279 Net (loss)/gain on available-for-sale financial assets 249,470 (1,045,779) (122,088) (269,984) Write off / transfer (14,082) (5,459) (14,082) (7,336) Income tax on other comprehensive income (307) Other comprehensive income for the period, net of tax (248,079) (1,019,593) (23,421) (218,886) Total comprehensive income for the period, net of tax 2,405, ,297 4,486,481 2,815,824 Attributable to : Equity holders of the parent 2,219, ,583 4,047,418 2,554,622 Non-controlling interests 185, , , ,202 2,405, ,297 4,486,481 2,815,824 Note : As required by SLFRS/LKAS, the Other Comprehensive Income includes movements in currency translation of foreign operations, gains/losses on fair valuation of available for sale financial assets, share of other comprehensive income of equity accounted investees etc. Transactions of similar nature were routed directly through the Equity Statement under SLAS. All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 4

7 Consolidated Statement of Financial Position Financial Information As at 30th September As at As at ASSETS Non-current assets Property, plant and equipment 35,613,189 30,192,909 34,290,012 28,627,982 Lease rentals paid in advance 10,023,850 9,236,715 10,278,349 9,512,117 Investment property 7,835,722 5,908,526 7,631,494 5,386,166 Intangible assets 2,515,254 2,724,922 2,633,073 2,631,950 Investments in associates 16,847,813 15,240,404 15,621,800 14,692,435 Other non-current financial assets 14,025,459 14,497,986 13,689,819 13,276,625 Deferred tax assets 182, , , ,850 Other non-current assets 2,696,338 1,673,313 2,405,197 2,265,984 89,740,101 79,679,873 86,679,222 76,596,109 Current assets Inventories 4,007,150 4,241,291 4,372,348 3,152,870 Trade and other receivables 11,355,536 9,091,081 9,915,048 8,710,917 Amounts due from related parties 81,658 11,531 10,715 18,520 Other current assets 3,892,559 3,205,534 4,024,750 3,323,734 Other investments 26,195,327 15,494,936 24,765,556 16,879,567 Cash in hand and at bank 3,531,739 2,503,415 4,267,175 2,112,626 49,063,969 34,547,788 47,355,592 34,198,234 Total assets 138,804, ,227, ,034, ,794,343 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 25,880,021 24,715,906 25,110,528 24,611,507 Capital reserves - 428, , ,365 Revenue reserves 36,207,736 27,557,630 32,950,723 25,296,044 Other components of equity 12,779,023 9,461,054 12,797,149 9,770,533 74,866,780 62,162,955 71,286,765 60,106,449 Non-controlling interests 8,691,961 7,693,435 8,876,914 7,641,956 Total equity 83,558,741 69,856,390 80,163,679 67,748,405 Non-current liabilities Insurance provisions 16,448,301 13,810,934 14,710,527 12,662,500 Borrowings 10,550,078 8,178,705 12,220,907 8,275,452 Deferred tax liabilities 741, , , ,960 Employee benefit liabilities 1,437,901 1,307,261 1,372,161 1,215,597 Other deferred liabilities 31,457 6,742 3,631 3,460 Other non-current liabilities 1,002,424 1,247, , ,938 30,211,401 25,175,596 29,789,080 23,551,907 Current liabilities Trade and other payables 15,284,151 11,400,750 14,530,653 11,177,305 Amounts due to related parties 4,962 2,096 1,650 2,237 Income tax payable 842, , , ,606 Short term borrowings 927, ,000 1,009, ,000 Borrowings 3,379,810 2,103,038 2,408,740 2,134,418 Other current financial liabilities ,593 - Other current liabilities 874, , ,705 1,252,349 Bank overdrafts 3,721,075 4,188,189 4,347,354 3,904,116 25,033,928 19,195,675 24,082,055 19,494,031 Total equity and liabilities 138,804, ,227, ,034, ,794,343 Rs. Rs. 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 9 November 2012 J R F Peiris Group Finance Director Interim Financial Statements 5

8 John Keells Holdings PLC Consolidated Cash Flow Statement For the six months ended 30th September Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before working capital changes A 3,963,706 2,945,721 (Increase) / Decrease in inventories 1,175, ,892 (Increase) / Decrease in trade and other receivables (2,035,255) (41,217) (Increase) / Decrease in other current assets 137, ,014 (Increase) / Decrease in other non-current assets (1,045,235) (1,234,503) Increase / (Decrease) in trade and other payables 1,111, ,098 Increase / (Decrease) in other current liabilities (15,347) (479,382) Increase / (Decrease) in other current financial liabilities (74,593) - Increase / (Decrease) in insurance provisions 1,737,774 1,148,434 Cash generated from operations 4,955,779 3,554,057 Finance income received 1,907,233 1,313,934 Finance costs paid (444,956) (323,978) Dividend received 271, ,516 Tax paid (687,612) (717,852) Gratuity paid (73,611) (38,122) Net cash flow from operating activities 5,928,422 4,056,555 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (2,440,282) (2,350,121) Purchase of intangible assets (8,589) (6,041) Addition to lease rights - (1,089) Addition to investment property (204,228) (522,360) Acquisition of subsidiary, net of cash acquired - 126,719 Acquisition of associates (168,955) (27,560) Increase in interest in associates (58,130) (76,755) Proceeds from sale of property, plant and equipment and intangible assets 41,149 64,833 Proceeds from sale of interest in associates 585,675 - proceeds from sales of non-current investments B 137,808 - Proceeds from sale of financial instruments - fair valued through profit or loss 115, ,259 Purchase of financial instruments - fair valued through profit or loss (410,782) (592,483) (Purchase) / disposal of other financial assets (net) 1,474,788 (1,137,534) (Purchase) / disposal of other investments (net) (515,536) (1,358,788) Net cash flow from / (used in) investing activities (1,451,530) (5,701,920) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 769, ,399 Proceeds from non-controlling interests on issue of rights in subsidiaries 49,903 63,405 Direct cost on issue of shares (6,547) (12,405) Acquisition of non-controlling interest (516) - Dividend paid to equity holders of parent (1,275,977) (629,833) Dividend paid to non-controlling interests (627,775) (244,330) Proceeds from/(repayment of) long term borrowings (808,850) (108,073) Proceeds from/(repayment of) other financial liabilities (net) (81,467) (122,000) Net cash flow from / (used in) financing activities (1,981,736) (948,837) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 2,495,156 (2,594,202) CASH AND CASH EQUIVALENTS AT THE BEGINNING 19,810,729 12,016,844 CASH AND CASH EQUIVALENTS AT THE END 22,305,885 9,422,642 ANALYSIS OF CASH AND CASH EQUIVALENTS Favourable balances Other investments 22,495,221 11,107,416 Cash in hand and at bank 3,531,739 2,503,415 Unfavourable balances Bank overdrafts (3,721,075) (4,188,189) Cash and cash equivalents 22,305,885 9,422,642 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 6

9 Financial Information For the six months ended 30th September A. Profit before working capital changes Profit before tax 5,391,149 3,739,743 Adjustments for: Finance income (1,911,624) (1,376,866) Finance costs 483, ,978 Share of results of equity-accounted investees (1,829,372) (1,374,446) Profit on sale of non-current investments (172,980) - Profit on sale of investments in associates (129,939) - Depreciation of property, plant and equipment 1,064, ,030 Provision for impairment losses 450,000 15,260 Profit on sale of property, plant and equipment and intangible assets (7,987) (7,514) Amortisation of lease rentals paid in advance 344, ,551 Amortisation of intangible assets 129, ,017 Amortisation of other deferred liabilities (257) (257) Gratuity provision and related costs 146, ,366 Loss on disposal of financial instruments 89,377 22,281 (Increase) / decrease in fair value of financial instruments (94,393) 212,188 Unrealised (gain) / loss on foreign exchange (net) 11,418 5,390 3,963,706 2,945,721 B Disposal of non current investments The fair value of net assets disposed of John Keells Logistics India (Pvt) Ltd. and John Keells Logistics Lanka (Pvt) Ltd. were as follows. ASSETS Cash in hand and at bank 19,369 Other investments 2,079 Trade and other receivables 178,417 Goodwill 9,285 Deferred tax assets 6,874 Other non-current financial assets 5,841 Property, plant and equipment 18,404 LIABILITIES Bank overdrafts (71,401) Employee benefit liabilities (7,423) Trade and other payables (98,081) Total identifiable net assets 63,364 Transferred to investment in associates (23,700) Profit on disposal of non current investments 172,980 Fair value of contingent consideration received (124,789) Cash consideration received on disposal of non current investments 87,855 Cash and cash equivalents disposed 49,953 Net cash inflow on disposal of non current investments 137,808 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. Interim Financial Statements 7

10 John Keells Holdings PLC 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 ,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 option 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 interests (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 As at 1 April ,611,507 8,110,642 1,021, , ,830 25,296,044 60,106,449 7,641,956 67,748,405 Profit for the period ,753,092 2,753, ,618 3,034,710 Other comprehensive income - (5,003) (56,435) - (248,041) 111,009 (198,470) (20,416) (218,886) Total comprehensive income - (5,003) (56,435) - (248,041) 2,864,101 2,554, ,202 2,815,824 Exercise of share option 104, , ,399 Direct cost on issue of shares (11,026) (11,026) - (11,026) Final dividend paid / (629,833) (629,833) - (629,833) Subsidiary dividend to non-controlling interest ,942 44,942 (289,272) (244,330) Acquisition,disposal and changes in non-controlling interests (6,598) (6,598) 79,549 72,951 As at 30 September ,715,906 8,105, , , ,789 27,557,630 62,162,955 7,693,435 69,856,390 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 8

11 Company Income Statement Financial Information Quarter ended 30th September Six months ended 30th september Change % Change % Revenue 173, , , ,863 9 Cost of sales (96,494) (77,767) 24 (181,872) (143,331) 27 Gross profit 77,030 70, , ,532 (8) Dividend income 99, ,560 (74) 2,468,660 1,351, Other operating income 73,286 58, , ,523 (35) Administrative expenses (534,931) (201,736) 165 (827,107) (407,963) 103 Other operating expenses (8,081) (7,502) 8 (17,172) (16,278) 5 Results from operating activities (293,481) 298,861 (198) 1,844,942 1,205, Finance costs (9,449) (51,143) (82) (161,385) (103,761) 56 Finance income 279, , , , Net finance (costs) / income 269,693 96, , , Profit before tax (23,788) 394,907 (106) 2,219,240 1,412, Tax expense - (4,655) (100) (4,752) (22,826) (79) Profit for the period (23,788) 390,252 (106) 2,214,488 1,389, 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 9

12 John Keells Holdings PLC Company Statement of Comprehensive Income Quarter ended Six months ended 30th September 30th september Profit for the period (23,788) 390,252 2,214,488 1,389,640 Other comprehensive income Net (loss)/gain on available-for-sale financial assets 266,672 (915,731) (48,009) 154,628 Income tax on other comprehensive income Other comprehensive income for the period, net of tax 266,672 (915,731) (48,009) 154,628 Total comprehensive income for the period, net of tax 242,884 (525,479) 2,166,479 1,544,268 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 10

13 Company Statement of Financial Position Financial Information As at 30th September As at As at ASSETS Non-current assets Property, plant and equipment 74,681 80,421 89,559 73,543 Intangible assets 48,538 36,906 48,141 43,724 Investments in subsidiaries and joint ventures 25,389,527 24,603,141 24,682,271 23,500,112 Investments in associates 9,712,616 9,285,130 9,485,530 9,257,569 Other non-current financial assets 1,935,912 1,777,993 2,025, ,555 Deferred tax assets - 40,198-54,198 37,161,274 35,823,789 36,330,972 33,587,701 Current assets Inventories Trade and other receivables 368, , , ,405 Amounts due from related parties 634, , , ,782 Other current assets 372, , , ,475 Other investments 10,926,562 8,388,339 10,102,198 10,071,249 Cash in hand and at bank 41,701 10, ,495 19,382 12,343,973 9,474,508 12,336,965 11,300,053 Total assets 49,505,247 45,298,297 48,667,937 44,887,754 EQUITY AND LIABILITIES Stated capital 25,880,021 24,715,906 25,110,528 24,611,507 Revenue reserves 16,780,480 14,283,776 15,841,969 13,523,969 Other components of equity 181,586 (9,162) 229,595 (163,790) Total equity 42,842,087 38,990,520 41,182,092 37,971,686 Non-current liabilities Borrowings 4,467,058 4,886,429 5,060,493 5,442,865 Employee benefit liabilities 128, , , ,752 4,595,479 5,000,370 5,187,357 5,547,617 Current liabilities Trade and other payables 271, , , ,667 Amounts due to related parties 6,961 7,766 6,926 9,274 Borrowings 1,292,500 1,101,500 1,281,000 1,104,000 Bank overdrafts 496,637 16, ,037 34,510 2,067,681 1,307,407 2,298,488 1,368,451 Total equity and liabilities 49,505,247 45,298,297 48,667,937 44,887,754 Rs. Rs. 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 9 November 2012 J R F Peiris Group Finance Director Interim Financial Statements 11

14 John Keells Holdings PLC Company Cash Flow Statement For the six months ended 30th September CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 2,219,240 1,412,466 Adjustments for: Finance income (535,683) (310,383) Dividend income (2,468,660) (1,351,030) Finance costs 161, ,761 Depreciation of property, plant and equipment 12,909 16,934 Profit on sale of property, plant and equipment (2,697) (3,375) Amortisation of intangible assets 7,915 6,819 Provision for impairment losses 450,000 - Profit on sale of other investment (11,624) - Gratuity provision and related costs 11,284 9,924 Unrealised (gain) / loss on foreign exchange(net) 30,857 (17,821) Profit before working capital changes (125,074) (132,705) (Increase) / Decrease in inventories (Increase) / Decrease in trade and other receivables 32,284 68,229 (Increase) / Decrease in other non-current assets 43,033 37,625 Increase / (Decrease) in creditors and accruals (53,178) (41,438) Cash generated from operations (102,935) (67,529) Finance income received 534, ,864 Finance expenses paid (122,945) (103,761) Dividend received 2,468,660 1,435,739 Tax paid (28,071) (11,116) Gratuity paid (9,727) (734) Net cash flow from operating activities 2,739,183 1,550,463 CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (2,033) (28,076) Addition to intangible assets (8,312) - Increase in interest in subsidiaries (790,381) (1,103,028) Acquisition of associates - (27,560) Increase in interest in associates (227,085) - Proceeds from sale of Property, plant and equipment 6,696 7,637 Proceeds from sales of non-current investments 46,563 - (Purchase) / disposal of other investments (net) (1,099,804) (1,243,416) Net cash flow from/(used in) investing activities (2,074,356) (2,394,443) CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 769, ,399 Dividend paid (1,275,977) (629,833) Repayment of long term borrowings (664,176) (547,500) Net cash flow from / (used in) financing activities (1,170,660) (1,072,934) NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (505,833) (1,916,914) CASH AND CASH EQUIVALENTS AT THE BEGINNING 8,919,099 9,393,111 CASH AND CASH EQUIVALENTS AT THE END 8,413,266 7,476,197 ANALYSIS OF CASH and CASH EQUIVALENTS Favourable balances Other investments 8,868,202 7,482,613 Cash in hand and at bank 41,701 10,519 Unfavourable balances Bank overdrafts (496,637) (16,935) 8,413,266 7,476,197 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. 12

15 Financial Information Company Statement of Changes In Equity Stated Available for Revenue Total capital sale reserve reserves Equity As at 1 April ,110, ,595 15,841,969 41,182,092 Profit for the period - - 2,214,488 2,214,488 Other comprehensive income - (48,009) - (48,009) Total comprehensive income 25,110, ,586 18,056,457 43,348,571 Exercise of share option 769, ,493 Final dividend paid / (1,275,977) (1,275,977) As at 30th September ,880, ,586 16,780,480 42,842,087 As at 1 April ,611,507 (163,790) 13,523,969 37,971,686 Profit for the period - - 1,389,640 1,389,640 Other comprehensive income - 154, ,628 Total comprehensive income 24,611,507 (9,162) 14,913,609 39,515,954 Exercise of share option 104, ,399 Final dividend paid / (629,833) (629,833) As at 30th September ,715,906 (9,162) 14,283,776 38,990,520 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. Interim Financial Statements 13

16 John Keells Holdings PLC Operating Segment Information OPERATING SEGMENTS The following tables present revenue and profit information regarding the Group s operating segments. Transportation Leisure Property For the Quarter ended 30th September External Revenue 5,326,710 4,143,071 4,650,872 3,673, , ,320 Inter segment revenue 91,290 97,221 13,238 12,250 68,741 43,426 Segment Revenue 5,418,000 4,240,292 4,664,110 3,685, , ,746 Eliminations Revenue Segment Profit / (loss) before tax 230, , , ,066 (276,702) (800) Finance costs (12,497) (1,707) (88,080) (68,632) (2,094) (15,951) Finance income 51,905 20,661 62,389 31,525 22,949 9,187 Share of results of equity - accounted investees 753, , Eliminations / adjustments (588) - 3,832 (8,799) (2,430) (3,257) Profit / (loss) before tax 1,022, , , ,160 (258,277) (10,821) Tax expense (62,252) (39,487) (21,302) (45,570) (10,611) (6,948) Profit / (loss) for the period 959, , , ,590 (268,888) (17,769) Purchase and construction of PPE ,782 1,018, ,798 (98,302) 8,038 Addition to IA Depreciation of PPE 1 16,657 21, , ,376 (54,188) 2,541 Amortisation / impairment of IA 2 1,205 2, Amortisation of LRPA , , Gratuity provision and related costs 5,771 4,692 20,706 16,307 2, Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 1 Property, plant and equipment, 2 Intangible assets, 3 Lease rentals paid in advance 14

17 Financial Information Consumer Foods & Retail Financial Services Information Technology Others Group Total ,985,284 5,341,388 2,137,951 1,935,161 1,427,177 1,674, , ,801 20,682,653 17,626,717 10,745 17,002 24,977 43,756 72,845 75, , , , ,077 5,996,029 5,358,390 2,162,928 1,978,917 1,500,022 1,750, , ,537 21,104,804 18,058,794 (422,151) (432,077) 20,682,652 17,626, , ,778 49,459 69,906 67,020 50, ,814 4,440 1,458,765 1,295,365 (32,561) (27,570) (3) (22) (19,266) (5,088) (96,253) (45,458) (250,754) (164,428) 13,625 3,097 13,007 8,899 3,013 1, , , , , , ,789 5,070 1,021 17,738 1,942 1,036, ,409 (3,000) 6, ,712 (23,292) 316,526 (29,348) 287, , , ,572 55,837 47, , ,056 2,994,564 2,055,841 (107,108) (111,438) (104,181) (88,404) (11,800) (24,523) (23,968) (55,581) (341,222) (371,951) 180, , , ,168 44,037 23, ,727 51,475 2,653,342 1,683, , ,667 31,122 75,632 37,185 21,569 26,917 43,413 1,382,782 1,348, ,519 5, ,351 5, , ,388 36,582 33,384 34,360 20,061 29,477 30, , ,436 3,077 2,703 46,854 46,854 5,801 5,059 10,358 3,409 67,293 60, , ,933 16,985 17,937 6,550 6,417 5,230 5,006 23,593 11,056 81,005 62,197 Interim Financial Statements 15

18 John Keells Holdings PLC Operating Segment Information OPERATING SEGMENTS The following tables present revenue, profit information and segment assets regarding the Group s operating segments. Transportation Leisure Property For the Six months ended 30th September External Revenue 10,634,160 8,119,699 8,563,783 6,701,085 1,051, ,642 Inter segment revenue 183, ,505 24,887 22, , ,723 Segment Revenue 10,817,644 8,310,204 8,588,670 6,723,842 1,188, ,365 Eliminations Revenue Segment Profit / (loss) before tax 568, ,613 1,650,168 1,129,663 (245,893) 87,969 Finance costs (36,403) (3,670) (191,650) (128,234) (4,768) (27,096) Finance income 104,322 39, ,490 48,474 61,927 18,806 Share of results of equity - accounted investees 1,344,236 1,073, Eliminations / adjustments (1,176) - 3,832 (8,799) (4,857) (5,603) Profit / (loss) before tax 1,979,040 1,370,879 1,592,840 1,041,104 (193,591) 74,076 Tax expense (133,441) (77,628) (66,308) (70,213) (33,228) (18,204) Profit / (loss) for the period 1,845,599 1,293,251 1,526, ,891 (226,819) 55,872 Segment assets 7,901,875 4,209,380 50,010,878 44,827,074 10,925,343 9,446,458 Investments in associates Deferred tax assets Goodwill Tax refunds Eliminations / adjustments Total Assets Purchase and construction of PPE 1 7,406 27,748 1,621,930 1,755,954 3,665 8,643 Addition to IA Depreciation of PPE 1 40,061 43, , ,203 5,081 4,709 Amortisation / impairment of IA 2 4,155 5, Amortisation of LRPA , , Gratuity provision and related costs 10,981 10,658 37,607 34,174 2,470 1,561 Note : All values are in Rupees 000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 1 Property, plant and equipment, 2 Intangible assets, 3 Lease rentals paid in advance 16

19 Financial Information Consumer Foods & Retail Financial Services Information Technology Others Group Total ,972,127 10,589,379 4,135,343 3,663,536 2,859,123 2,598,915 1,479,748 1,230,043 40,695,535 33,507,299 25,742 31,673 49, , , , , , , ,790 11,997,869 10,621,052 4,184,769 3,791,703 3,004,704 2,736,389 1,764,776 1,497,534 41,546,952 34,389,089 (851,417) (881,790) 40,695,535 33,507, , ,933 78, ,912 96,601 72,383 1,140 (16,296) 2,866,215 2,270,177 (53,006) (64,341) (6) (88) (34,758) (8,006) (162,806) (92,507) (483,397) (323,942) 21,440 5,034 25,826 17,771 4,550 2, , , , , , ,175 (4,909) (39,117) 14,347 (4,549) 1,829,372 1,374,446 (6,000) 3, ,921 (35,007) 294,720 (46,409) 680, , , ,770 61,484 27, , ,990 5,391,149 3,739,743 (235,280) (181,136) (189,208) (168,838) (17,185) (39,746) (206,597) (149,268) (881,247) (705,033) 444, , , ,932 44,299 (12,448) 484,689 35,722 4,509,902 3,034,710 13,914,679 10,217,160 25,257,283 21,466,797 4,020,518 2,771,383 19,709,758 15,036, ,740, ,974,356 16,847,813 15,240, , , , ,400 2,030,488 2,209,501 (12,755,156) (12,169,098) 138,804, ,227, , ,641 86, ,598 51,960 31,259 45,502 54,278 2,440,282 2,350,121 1, ,134 5, ,589 6, , ,349 72,601 66,826 66,995 26,952 59,086 60,652 1,064, ,030 6,123 5,393 93,708 93,708 10,868 12,193 14,732 6, , , , ,551 39,532 36,650 14,356 12,606 8,460 8,906 33,367 20, , ,366 Interim Financial Statements 17

20 John Keells Holdings PLC 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 2012, 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 2012 were authorised for issue by the Board of Directors on 9 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 2012, and changes to the accounting policies as given in Note 6 to these financial statements. For all periods up to and including the year ended 31 March 2012, the Group prepared its financial statements in accordance with SLAS which were effective up to 31 March The financial statements for the quarter ended 30 June 2012 were the first financial statements prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) immediately effective from 1 April These SLFRS/LKASs have materially converged with the International Financial Reporting Standards (IFRS) as issued by, the International Accounting Standards Board (IASB). The effect of the transition to SLFRS/LKAS on previously reported financial positions, financial performances and cash flows of the Group and the Company is given in Notes to the financial statements. The interim condensed financial statements have been prepared on a historical cost basis, except for investment properties, land and buildings and financial instruments. 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 BASIS OF CONSOLIDATION The interim condensed consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at each reporting date. Effective from 1st April 2012 the basis of consolidation will include the following changes; 5.1 Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. 18

21 Financial Information 5.2 A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. 5.3 If the Group loses control over a subsidiary, it: Derecognises the assets (including goodwill) and liabilities of the subsidiary Derecognises the carrying amount of any non-controlling interest Derecognises the cumulative translation differences, recorded in equity Recognises the fair value of the consideration received and receivable Recognises the fair value of any investment retained Recognises any surplus or deficit in profit or loss Reclassifies the parent s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate. 5.4 The Group measures goodwill at the acquisition date as the fair value of the consideration transferred including the recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The Group elects on a transaction-by-transaction basis whether to measure non-controlling interests at fair value, or at their proportionate share of the recognised amount of the identifiable net assets, at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. 5.5 In a business combination achieved in stages, the Group remeasures its previously held equity interest at fair value in the acquiree at each acquisition-date and recognise the resulting gain or loss, if any, in profit or loss. 5.6 Upon loss of joint control the Group measures and recognises its remaining investment at its fair value. Any difference between the carrying amount of the former joint controlled entity upon loss of joint control and the fair value of the remaining investment and proceeds from disposal are recognised in profit or loss. When the remaining investment constitutes significant influence, it is accounted for as investment in an associate. 5.7 Upon loss of significant influence over the associate, the Group measures and recognises any retaining investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognised in profit or loss. 6 SIGNIFICANT ACCOUNTING POLICIES The changes to accounting policies set out below have been applied consistently to all periods presented in these interim condensed financial statements and in preparing the opening SLFRS/LKAS statement of financial position as at 1 April 2011 for the purpose of the transition to SLFRS/LKAS, unless otherwise indicated. The presentation and classification of the financial statements of the previous period have been amended, where relevant, for better presentation and to be comparable with those of the current period. Interim Financial Statements 19

22 John Keells Holdings PLC Notes to the interim condensed financial statements 6.1 Customer Loyalty program The Group has a customer loyalty programme whereby customers are awarded credits known as Nexus points entitling customers to the right to purchase goods & services at a discount from the Group and out side registered retailers. The fair value of the consideration received or receivable in respect of the initial sale is allocated between the points and the other components of the sale. The amount allocated to the points is estimated by reference to the fair value of the right to purchase goods and services at a discount. Such amount is deferred and revenue is recognised when the points are redeemed and the Group has fulfilled its obligations to supply the discounted products. The amount of revenue recognised in those circumstances is based on the number of points that have been redeemed in exchange for discounted products, relative to the total number of points that is expected to be redeemed. Deferred revenue is also released to income when it is no longer considered probable that the points will be redeemed. 6.2 Finance income and finance costs Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss, gains on the remeasurement to fair value of any pre-existing interest in an acquiree, and gains on hedging instruments that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group s right to receive payment is established. Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss. 6.3 Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group s incremental borrowing rate. 20

23 Financial Information 6.4 Financial assets Initial recognition and measurement Financial assets within the scope of LKAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets, as appropriate and determines the classification of its financial assets at initial recognition. All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group account for the fair value changes between trade date and settlement date. The financial assets include cash and short-term deposits, trade and other receivables, loans and other receivables, quoted and unquoted financial instruments and derivative financial instruments. Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows: Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss includes financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement. Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as heldto-maturity when the Group has the positive intention and ability to hold it to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised as finance cost in the income statement. Interim Financial Statements 21

24 John Keells Holdings PLC Notes to the interim condensed financial statements Available-for-sale financial investments Available-for-sale financial investments include equity and debt securities. Equity investments classified as availablefor-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions. After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is reclassified to the income statement in finance costs and removed from the available-for-sale reserve. Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when: The rights to receive cash flows from the asset have expired The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Group s continuing involvement in it. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. 22