Interim Financial Statements

Transcription

1 Interim Financial Statements for the period ENDED 31 December 2017

2 INTERIM FINANCIAL STATEMENTS Content.. Description Page No. 1. Statement of Financial Position Statement of Profit or Loss and Other Comprehensive Income Statement of Changes in Equity Statement of Cash Flows Notes to the Interim Financial Statements Segment Information Shareholder Information 10

3 Statement of Financial Position As at 31 Dec 2017 As at 31 March 2017 (Unaudited) Rs.'000 (Audited) Rs.'000 ASSETS Cash and cash equivalents 367,712 87,571 Investment securities 1,191,073 1,107,401 Investment in term deposits 1,359, ,077 Receivable on lease assets and hire purchases 393, ,527 Advances and other loans 12,262,318 11,015,224 Trade and other current assets 151,835 87,639 Property, plant and equipment 178, ,255 Total assets 15,904,879 12,899,694 LIABILITIES & EQUITY Liabilities Bank overdrafts 433, ,237 Deposits from customers 6,377,970 2,813,322 Interest bearing loans & borrowings 4,866,064 2,050,139 Provision for taxation 195, ,112 Trade and other payables 1,260,364 6,356,606 Retirement benefit obligations 29,828 23,595 Deferred tax liabilities 10,822 10,822 Total liabilities 13,174,160 11,775,833 Equity Stated capital 1,493, ,180 Reserves 85,899 83,296 Retained earnings 1,151, ,385 Total equity 2,730,719 1,123,861 Total liabilities & equity 15,904,879 12,899,694 Net assets per share (Rs.) Certification : These financial statements have been prepared in compliance with the requirements of the Companies Act No. 7 of sgd... Mr. Gayan Herath Assisstant Manager - Finance BRAC Lanka Finance PLC The Board of Directors is responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the Board sgd... Mr. W.D.K. Jayawardena Director sgd.... Mr. Rohana Kumara CEO/Director Date: 19 January 2018 Rajagiriya (Greater Colombo) 1

4 Statement of Profit or Loss & Other Comprehensive Income For the nine months ended 31 December Variance Rs.'000 Rs.'000 % Rs.'000 Rs.'000 (Unaudited) (Unaudited) For the quarter ended 31 December (Unaudited) (Unaudited) Variance % Interest income 3,111,079 2,383,530 31% 1,135, ,956 26% Interest expenses (1,060,842) (919,722) -15% (388,013) (378,653) -2% Net interest income 2,050,237 1,463,808 40% 747, ,303 44% Other operating income 112,284 84,818 32% 36,821 26,542 39% Operating expenses Allowance for impairment and write-offs (491,667) (297,943) -65% (118,031) (176,932) 33% Personnel expenses (522,811) (348,437) -50% (188,158) (121,773) -55% Depreciation (15,165) (11,266) -35% (3,465) (4,976) 30% General & administration expenses (640,052) (518,071) -24% (262,021) (175,881) -49% Profit from operations 492, ,909 32% 212,182 67, % Value added tax on financial services (87,116) (66,866) -30% (30,748) (21,175) -45% Profit before income tax expense 405, ,043 33% 181,434 46, % Income tax expense (113,845) (110,349) -3% (51,048) (17,823) -186% Profit for the period 291, ,694 49% 130,386 28, % Other comprehensive income Items that are or may be reclassified to profit or loss Net change in fair value of available-for-sale financial assets 2, % % Total other comprehensive income, net of tax 2, % % Total comprehensive income 294, ,040 50% 131,302 28, % Basic earnings per share (Rs.) % % Figures in brackets indicate deductions. 2

5 Statement of Changes in Equity For the period ended 31 December 2017, Capital Reserves Revenue Reserves Stated Capital Reserve Fund Fair Value Reserve on AFS Retained Earnings Total Equity Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Balance as at 1 April ,180 74,652 (389) 658, ,761 Profit for the Period , ,694 Other comprehensive income, net of income tax Net change in fair value of available-for-sale financial assets Total comprehensive income for the year , ,040 Balance as at 31 December ,180 74,652 (43) 854,013 1,099,802 Balance as at 1 January ,180 74,652 (43) 854,013 1,099,802 Profit for the Period ,233 24,233 Other comprehensive income, net of income tax Acturial losses on defined benefit plan ,965 2,965 Net change in fair value of available-for-sale financial assets - - (2,308) - (2,308) Tax on other comprehensive income (830) (830) - - (2,308) 2,135 (173) Total comprehensive income for the year - - (2,308) 26,368 24,060 Transactions recorded directly in equity - Transfer to Reserve Fund - 10,996 - (10,996) - Total transactions recorded directly in equity - 10,996 - (10,996) - Balance as at 31 March ,180 85,648 (2,351) 869,385 1,123,861 Balance as at 1 April ,180 85,648 (2,351) 869,385 1,123,861 Profit for the period , ,865 Issue of shares 1,321, ,321,907 Other comprehensive income, net of income tax Net change in fair value of available-for-sale financial assets - - 2,603-2, ,603-2,603 Total comprehensive income for the year 1,321,907-2, ,865 1,616,375 Transactions recorded directly in equity Dividend paid during the period (9,518) (9,518) Transactions recorded directly in equity (9,518) (9,518) Balance as at 31 December ,493,088 85, ,151,732 2,730,719 3

6 Statement of Cash Flows For the period ended 31 December, Rs.'000 Rs.'000 Cash flow from operating activities Profit before income tax 405, ,043 Adjustment for, Depreciation and amortization 15,165 11,266 Provision for retirement benefit obligation 6,286 5,035 Loan write-offs 5,078 3,132 Impairment charges for loans and other losses 486, ,811 Operating profit before working capital changes 918, ,287 (Increase) in loans and advances (2,023,418) (3,909,988) Decrease/ (Increase) in other assets (64,196) (61,372) Increase in deposits from customers 3,564, ,223 (Decrease)/Increase in other liabilities (5,096,240) 2,897,543 Cash (used)in operations (2,700,378) 310,693 Payments of retirement gratuity (53) (134) Income tax paid (25,548) (107,191) Net cash flows used in operating activities (2,725,979) 203,368 Cash flows from investing activities Acquisition of property plant and equipments (49,849) (64,828) Purchase of treasury bills,bonds & repos (81,069) (335,484) Investment in term deposits (1,010,742) (332,652) Net cash flows (used) in investing activities (1,141,660) (732,964) Cash flows from financing activities Borrowings obtained during the year 2,815, ,251 Dividend Paid (9,518) - Issue of shares 1,321,907 - Net cash flows generated from financing activities 4,128, ,251 Net (decrease)/ increase in cash and cash equivalents 260,675 (393,345) Cash and cash equivalents at the beginning of the period (326,666) 170,129 Cash and cash equivalents at the end of the year (Note 01) (65,991) (223,216) Note 01 Cash and cash equivalents 367, ,396 Bank overdrafts (433,703) (346,612) Cash and cash equivalents at the end of the year (65,991) (223,216) 4

7 Notes to the Interim Financial Statements For the period ended 31 December 2017, 1. General These nine months financial statements have been prepared in accordance with LKAS 34 Interim Financial Reporting and do not include all of the information required for a full set of financial statements. The requirements of the Colombo Stock Exchange and the Companies Act No.7 of 2007 have also been considered in preparing these financial statements The information for the preparation of these interim financial statements has been drawn up from the unaudited financial records of the Company. Accounting policies and method of computation as stated in the audited financial statements for the year 2016/17 are followed in the preparation of these Interim Financial Statements. Significant growth in profit from operation is reported for the quarter mainly due to the increase in net interest income. Effective management of the borrowing cost positively contributed to the increase in net interest income. Impaired collections led to lower allowance for impairment and write offs. General & adiministration expenses increased due to the expansion in operations. 2. Stated Capital The Stated Capital of the Company is represented by 237,943,274 ordinary shares. 3. Provision for management expenditure All expenses related to management expenditure are fully provided for in these Financial Statements. 4. Share information Market prices of ordinary shares recorded during the quarter ended 31 December 2017 are as follows, Rs. Market price as at 31 December Highest Price Lowest Price

8 Notes to the Interim Financial Statements For the period ended 31 December 2017, 5 Financial assets and liabilities 5.1 Accounting classifications and fair values The table below sets out the carrying amounts of the Company s financial assets and financial liabilities. As at 31 December 2017 Fair value derivatives Fair value - held for trading Fair value through other comprehensive income available for sale Amortized cost / Not measured at fair value Total Carrying amount Fair value Rs '000 Fair value measurement level Cash and cash equivalents , , ,712 Investment in Term Deposit ,359,819 1,359,819 1,359,819 Investment in government securities Measured at fair value , , ,355 Level 2 - Measured at amortized cost , , ,707 Investment in shares Level 3 Receivable on lease assets and hire purchases , , ,184 Advances and other loans ,262,318 12,262,318 12,262,318 Other financial assets , , ,835 Total financial assets ,366 14,809,575 15,725,941 15,725,941 Bank overdraft , , ,703 Interest bearing borrowings ,866,064 4,866,064 4,866,064 Deposits from customers ,377,970 6,377,970 6,377,970 Trade and other payables , , ,562 Amount due to related companies ,159,802 1,159,802 1,159,802 Total financial liabilities ,938,101 12,938,101 12,938,101 6

9 Notes to the Interim Financial Statements For the period ended 31 December 2017, 5 Financial assets and liabilities (Cont.) 5.1 Accounting classifications and fair values The table below sets out the carrying amounts of the Company s financial assets and financial liabilities. As at 31 March 2017 Fair value derivatives Fair value - held for trading Fair value through other comprehensive income available for sale Amortized cost / Not measured at fair value Total carrying amount Fair value Rs '000 Fair value measurement level Cash and cash equivalents ,571 87,571 87,571 Investment in government securities Measured at fair value , , ,000 Level 2 - Measured at amortized cost , , ,390 Investment in shares Level 3 Receivable on lease assets, hire purchases and operating leases , , ,527 Advances and other loans ,015,224 11,015,224 11,015,224 Other financial assets ,639 87,639 87,639 Total financial assets ,011 11,874,351 12,406,362 12,406,362 Bank overdraft , , ,237 Interest bearing borrowings ,050,139 2,050,139 2,050,139 Deposits from customers ,813,322 2,813,322 2,813,322 Trade and other payables ,179 81,179 81,179 Amount due to related companies ,275,427 6,275,427 6,275,427 Total financial liabilities ,634,305 11,634,305 11,634,305 7

10 Notes to the Interim Financial Statements For the period ended 31 December 2017, 5.2 Financial assets and liabilities- Valuation technique Level 2 fair value discounted cash flows Financial instruments not measured at fair value For the purpose of disclosing fair value of the financial instruments not measured at fair value (carried at amortized cost) discounted cash flows has been used to derive the fair value. 6 Selected Performance Indicators Regulatory Capital Adequacy Total Tier I Core Capital Rs' 000 2,438,602 1,123,861 1,079, ,761 - Total Capital Base Rs' 000 2,606,970 1,267,603 1,229, ,002 - Core capital adequacy ratio 18.10% 9.71% 9.00% 11.22% (Minimum requirement 5%) - Total Capital adequacy ratio 19.35% 10.96% 10.25% 11.63% (Minimum requirement 10%) Asset Quality Ratios Gross Non-performing Advances Ratio 3.96% 0.58% 2.55% 0.82% - Net Non-performing Advances Ratio 0.00% 0.00% 0.00% 0.00% Regulatory Liquidity Available Liquid Assets Rs' 000 1,393,977 1,182,842 1,306,979 1,444,238 - Required Liquid Assets Rs' 000 1,110,627 1,133,296 1,230, ,007 - Liquid Assets to Deposit ratio 23% 42% 113% 122% 7 Contingent liabilities There are no significant changes in the nature of the contingent liabilities disclosed in the financial statement for the quarter ended 31 December Comparative information Comparative information has not been reclassified or restated. 9 Events after the reporting date There have been no material events occurring after the reporting date other than disclosed here that require adjustment to or disclosure in these Financial Statements. 10 Recurring Related Party Transactions Name of the Related Party Amount Rs. Interest Rate Rationale Relationship Lanka Orix Leasing Company PLC For working Parent 442,406, % capital requirements Commercial Leasing & Finance PLC For working A company 700,000, % capital requirements within the LOLC group 11 Rights Issue during the period Company has issued ordinary shares by a way of a Rights Issue with an entitlement of 5 new ordinary shares for every 4 ordinary shares held at a price of Rs per share.for this rights issue Lanka Orix Leasing Company PLC (LOLC) has subscribed for 132,180,572 shares. Accordingly, LOLC became the immediate parent of the company from July After the rights issue the stated capital increased by Rs. 1,321,907,080/- and the number of shares increased to 237,943,274. Proceeds of the rights issue have been utilized for the execution of new business. 12 Dividend The Board of Directors of the Company has approved the payment of an interim dividend of Rs.0.04 per share for the financial year ending 31 March 2018 for ordinary shareholders of the Company and this dividend was paid on 19 October

11 Segment Information For the Period ended 31 December 2017, Operating Segment Leasing Hire Term Loans Micro Finance Other Total Purchase Rs '000 Rs '000 Rs '000 Rs '000 Rs '000 Rs '000 For the period ended 31 December 2017 Total revenue 53,795 (36) 136,996 2,920, ,285 3,223,363 Inter segmental revenue External revenue 53,795 (36) 136,996 2,920, ,285 3,223,363 Net interest cost (17,704) 12 (45,087) (961,108) (36,954) (1,060,842) Profit before operating expenses 36,090 (24) 91,909 1,959,215 75,331 2,162,521 Operating expenses (29,613) 3,702 (51,745) (1,551,003) (41,037) (1,669,695) Value added tax on financial services (1,584) 198 (2,768) (82,962) - (87,116) Results from operating activities 4,893 3,876 37, ,250 34, ,710 For the period ended 31 December 2016 Total revenue 16,948 1,878 13,701 2,351,003 84,818 2,468,348 Inter segmental revenue External revenue 16,948 1,878 13,701 2,351,003 84,818 2,468,348 Net interest cost (6,315) (700) (5,105) (875,999) (31,604) (919,722) Profit before operating expenses 10,633 1,178 8,596 1,475,004 53,214 1,548,626 Operating expenses (8,073) (894) (6,526) (1,119,824) (40,400) (1,175,717) Value added tax on financial services (475) (53) (384) (65,953) - (66,866) Results from operating activities 2, , ,227 12, ,043 For the period ended 31 December 2017 Provision for / (reversal of provision for) doubtful debts and bad debts written off (9,953) 3,689 (1,678) (483,725) - (491,667) As at Total assets 386,022 7, ,688 11,405,630 3,249,376 15,904,879 Total liabilities 319,746 5, ,602 9,447,391 2,691,489 13,174,160 As at Total assets 73,047 9,358 90,935 11,340,552 1,913,904 13,427,796 Total liabilities 67,064 8,592 83,487 10,411,705 1,757,146 12,327,994 9

12 Notes to the Interim Financial Statements For the period ended 31 December 2017, Statement of Directors' and Chief Executive Officer s holding in Shares of the Entity. As at 31 December 2017 Directors Name No. of shares % Mr.I.C.Nanayakkara Nil Nil Non Executive Chairman Mr. W.D.K.Jayawardena Nil Nil Non Executive Director Mr. R.D.Tissera Nil Nil Non Executive Director Mr. A.J.L.Peiris Nil Nil Senior Independent Director Mr. W.R.A Dharmaratne Nil Nil Independent Non-Executive Director Mr. Rohana Kumara Nil Nil Director/Chief Executive Officer Top 20 Shareholders As at Share holders 31-Dec-17 No of shares held % 1 Lanka Orix Leasing Company PLC 132,180, % 2 Commercial Leasing & Finance PLC 105,498, % 3 First Capital Markets Ltd/ Mr.N.A.Sellahewa 104, % 4 Mr.Siriwardena Mannanayake 50, % 5 Mr. Niroshan Ariya Sellahewa (Deceased) 29, % 6 Mr.Kuda Pulige Carolis Abeyratna 15, % 7 Mr. Francis Jayarupan Pradeep Raj 7, % 8 Mr. Roshan De Silva 6, % 9 Mr.Devagirige Peter Fernando 2, % 10 Mr. Don Tharanga Nalinda Ranawaka 2, % 11 Mr.Pelawattage Peiris Upali Anandasiri 2, % 12 Ms.Samaraweera Mudalige Vimala Samaraweera 1, % 13 Ms.Samaraweera Mudalige Sumana Samaraweera 1, % 14 Mr.Samaraweera Mudalige Samaraweera 1, % 15 Ms.Samaraweera Mudalige Susila Samaraweera 1, % 16 Mr.Samaraweera Mudalige Samaraweera 1, % 17 Bansei Securities Capital (Pvt) Ltd/M.A.U. Gnanatilake 1, % 18 Mr. Thudugala Munasinghege Premachandra Munasinghe 1, % 19 Mr. Shanker Supramaniam 1, % 20 Mr. Kachchakaduge Chamara Samantha Jayatilaka 1, % Sub Total 237,915, % Other Shareholders 28, % 237,943, % 12.1 Public share holding as at 31st December 2017 was 0.11% comprising 179 shareholders Float adjusted market capitalization as at 31 December 2017 is Rs.6,382,