Lion Brewery (Ceylon) PLC

Transcription

1 Lion Brewery (Ceylon) PLC Interim Condensed Financial Statements for the First Quarter ended 30th June 2018

2 REVIEW On a revenue of Rs 9.4 billion, we have earned a posttax profit of Rs 738mn for the 1 st quarter of the ongoing financial year. Since the operating environment that prevailed in the corresponding quarter of the last year was very different, the two sets of results cannot be compared. The continuing growth in the tourism sector has contributed to our performance during the year. As arrivals continue to increase, this sector will become increasingly more important to our business. Importantly, we are seeing a greater influence from the tourist sector in the retail alcobev shops rather than from the larger hotel chains. This seems to confirm the available empirical evidence that more and more tourists are moving into accommodation in boutique hotels, hostels & the informal sector. Our exports have continued to grow steadily. During this quarter, we grew our exports by 21% in volume terms. We now export to 19 countries and remain market leader in the Maldives. Whilst we are making every effort to grow our export business, it is unfortunate that profits from these revenues no longer attract the concessionary rate of 14%. Instead our export profits are taxed at the highest applicable rate of 40%. Since the Country needs to drive a significant growth in exports in the short & medium term, we call on policymakers to apply the concessionary income tax rate on all export profits as was done previously. During this quarter, the beer industry s contribution to Government in the form of Excise Duty increased by 46%. Indeed, since the November 2017 reforms, Excise Duty from the beer industry has averaged over Rs 2 billion a month. From VAT, the industry has contributed an increase of 51%. Further, we are seeing evidence of a reduction in the consumption of illicit alcohol. Thus, the Excise Duty reforms of November 2017 have resulted in both social & financial returns to all stakeholders.

3 BOARD OF DIRECTORS AS AT 30TH JUNE 2018 Mr. D. A. Cabraal (Chairman) Mr. H. Selvanathan (Deputy Chairman) Mr. S. K. Shah (Chief Executive Officer) Mr. D. C. R. Gunawardena Mr. K. Selvanathan (Director / Alternate Director to H. Selvanathan) Mr. D. R. P. Goonetilleke Mrs. S. J. F. Evans Mr. L. Lehmann Mr. R. H. Meewakkala Mr. Lim C. K. 1

4 CONDENSED STATEMENT OF FINANCIAL POSITION Company Group 30Jun18 31Mar18 30Jun18 31Mar18 In Rs.'000s (Audited) (Audited) ASSETS Non Current Assets Property, plant & equipment 16,878,369 16,975,600 18,018,142 18,121,918 Intangible assets 2,372,285 2,385,622 2,372,285 2,385,622 Investments in subsidiary 1,029,623 1,029,623 Total NonCurrent Assets 20,280,277 20,390,845 20,390,427 20,507,540 Current Assets Inventories 1,961,919 1,614,004 1,961,919 1,614,004 Trade and other receivables 1,580,723 2,551,426 1,607,230 2,577,535 Amounts due from related companies 426, , , ,670 Cash and cash equivalents 8,033,727 7,968,516 8,153,324 8,089,976 Total Current Assets 12,003,295 12,751,943 12,144,399 12,895,185 Total Assets 32,283,572 33,142,788 32,534,826 33,402,725 EQUITY AND LIABILITIES Equity Stated capital 2,537,801 2,537,801 2,537,801 2,537,801 Capital reserves 782, , , ,824 Retained earnings 6,797,127 6,049,931 6,705,482 5,967,788 Total Equity 10,117,485 9,370,289 10,149,107 9,411,413 Non Current Liabilities Debentures (Note 4) 2,000,000 2,000,000 2,000,000 2,000,000 Loans and borrowings 4,403,685 4,814,620 4,403,685 4,814,620 Employee benefits 184, , , ,877 Net deferred liabilities 3,799,398 3,399,754 4,007,675 3,608,032 Total Non Current Liabilities 10,387,305 10,399,251 10,595,582 10,607,529 Current Liabilities Trade and other payables 954,586 1,227, ,941 1,235,475 Amounts due to related companies 144, , , ,560 Refundable deposits 1,189,854 1,164,261 1,189,854 1,164,261 Current tax liabilities 1,112,665 1,936,476 1,112,665 1,939,459 Debentures (Note 4) 39,142 1,110,582 39,142 1,110,582 Loans and borrowings 7,644,659 6,867,053 7,644,659 6,867,053 Bank overdrafts 693, , , ,393 Total Current Liabilities 11,778,782 13,373,248 11,790,137 13,383,783 Total Liabilities 22,166,087 23,772,499 22,385,719 23,991,312 Total Equity and Liabilities 32,283,572 33,142,788 32,534,826 33,402,725 Net assets per ordinary share (Rs.) The above figures are provisional and subject to audit. These financial statements are in compliance with the requirements of the Companies Act No. 07 of (Sgd) D.R.P. Goonetilleke Director Finance The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Approved and signed on behalf of the Managers Approved and signed on behalf of the Board (Sgd) (Sgd) (Sgd) V. Wijesinghe S.K. Shah K. Selvanathan Director Finance Director Director Carsons Management Services ( Private) Limited 7th August

5 LION BREWERY (CEYLON) PLC CONDENSED STATEMENT OF COMPREHENSIVE INCOME COMPANY In Sri Lankan Rs.'000s Quarter Ended Change % Year ended (Audited) Revenue Cost of sales Gross profit Progressive insurance receipts on business interruption Other income Distribution expenses Administrative expenses Other expenses Operating profit Progressive insurance receipts on property damage Profit before finance cost Finance income Finance costs Net finance costs 9,441,766 (6,716,034) 2,725,732 21,770 2,747,502 (832,337) (282,761) (85,330) 1,547,074 1,547, ,635 (532,615) ( 311,980) 5,435,060 (4,495,999) 939, ,696 11,521 1,559,278 (509,785) (232,404) (47,033) 770, , ,063 (505,086) ( 304,023) Profit before taxation Income tax Profit after taxation 1,235,094 (487,898) 747, ,033 (145,618) 320,415 Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of employee benefit obligations Deferred tax charge on actuarial loss Deferred tax charge on land revaluation Total other comprehensive loss for the period net of tax Total comprehensive income for the period Earnings per ordinary share (Rs.) 747, , (100) ,511,415 ( 23,709,592) 6,801,823 1,205,359 73,569 8,080,751 ( 3,019,413) ( 1,079,326) ( 323,679) 3,658, ,263 4,410, ,523 ( 2,154,433) ( 1,345,910) ,064,686 (1,044,071) 2,020,615 (40,938) 16,375 (351,672) (376,235) 133 1,644, The above figures are provisional and subject to audit. 3

6 LION BREWERY (CEYLON) PLC CONDENSED STATEMENT OF COMPREHENSIVE INCOME GROUP In Sri Lankan Rs.'000s Year Ended Change % Year Ended (Audited) Revenue Cost of sales Gross profit Progressive insurance receipts on business interruption Other income Distribution expenses Administrative expenses Other expenses Operating profit Progressive insurance receipts on property damage Profit before finance cost Finance income Finance costs Net finance costs 9,441,766 (6,716,034) 2,725,732 21,978 2,747,710 (832,337) (293,745) (85,330) 1,536,298 1,536, ,131 (532,617) (309,486) 5,435,060 (4,495,999) 939, ,696 11,637 1,559,394 (509,785) (239,096) (47,033) 763, , ,459 (505,096) (301,637) Profit before taxation Income tax Profit after taxation 1,226,812 (489,118) 737, ,843 (146,054) 315,789 Other comprehensive income Items that will not be reclassified to profit or loss Remeasurement of employee benefit obligations Deferred tax charge on actuarial loss Deferred tax charge on land revaluation Total other comprehensive income for the period net of tax Total comprehensive income for the period Earnings per ordinary share (Rs.) 737, , (100) ,511,415 (23,709,592) 6,801,823 1,205,359 75,788 8,082,970 (3,019,413) (1,109,720) (323,679) 3,630, ,263 4,382, ,652 (2,154,443) (1,334,791) ,047,630 (1,209,754) 1,837,876 (40,938) 16,375 (396,293) (420,856) 134 1,417, The above figures are provisional and subject to audit. 4

7 STATEMENT OF CHANGES IN EQUITY Company In Rs.'000s Stated Capital Revaluation Reserve Retained Earnings Total Equity Balance as at 1st April ,537,801 1,134,229 4,373,879 8,045,909 Total comprehensive income for the period Profit for the period 320, ,415 Total comprehensive loss for the period 320, ,415 Balance as at 30th June ,537,801 1,134,229 4,694,294 8,366,324 Balance as at 1st April ,537,801 1,134,229 4,373,879 8,045,909 Total comprehensive income for the year Profit for the year 2,020,615 2,020,615 Total other comprehensive loss for the year (351,672) (24,563) (376,235) Total comprehensive income for the year (351,672) 1,996,052 1,644,380 Transactions with owners of the Company Distribution made to owners Ordinary dividends (320,000) (320,000) Balance as at 31st March ,537, ,557 6,049,931 9,370,289 Balance as at 1st April ,537, ,557 6,049,931 9,370,289 Total comprehensive income for the period Profit for the period 747, ,196 Total comprehensive income for the period 747, ,196 Balance as at 30th June ,537, ,557 6,797,127 10,117,485 GROUP In Rs.'000s Stated Capital Revaluation Reserve Retained Earnings Total Equity Balance as at 1st April ,537,801 1,302,117 4,474,475 8,314,393 Total comprehensive income for the period Profit for the period 315, ,789 Total comprehensive income for the period 315, ,789 Balance as at 30th June ,537,801 1,302,117 4,790,264 8,630,182 Balance as at 1st April ,537,801 1,302,117 4,474,475 8,314,393 Total comprehensive income for the year Profit for the year 1,837,876 1,837,876 Other comprehensive loss for the year (396,293) (24,563) (420,856) Total comprehensive loss for the year (396,293) 1,813,313 1,417,020 Transactions with owners of the Company Distribution made to owners Ordinary dividends (320,000) (320,000) Balance as at 31st March ,537, ,824 5,967,788 9,411,413 Balance as at 1st April ,537, ,824 5,967,788 9,411,413 Total comprehensive income for the year Profit for the period 737, ,694 Total comprehensive income for the year 737, ,694 Balance as at 30th June ,537, ,824 6,705,482 10,149,107 5

8 CASH FLOW STATEMENT Company Group Period ended In Rs.'000s (Audited) (Audited) Cash flows from operating activities Profit/(Loss) before taxation 1,235, ,033 3,064,686 1,226, ,843 3,047,630 Adjustments for: Finance costs 528, ,899 2,159, , ,909 2,159,799 Depreciation on property, plant & equipment 289, ,428 1,097, , ,116 1,124,376 Amortization on Intangible assets 13,337 13,330 53,364 13,337 13,330 53,364 Net inventory provision (16,364) 926 (26,549) (16,364) 926 (26,549) Provision for retirement benefit obligation 3,128 5,942 85,953 3,128 5,942 85,953 Progressive insurance receipts on property damage (752,263) (752,263) Loss /(gain) on disposal of property, plant & equipment 3,799 (12,212) 3,799 (12,211) Exchange loss/ (gain) on revaluation of foreign currency term loans (28,046) (28,046) Finance Income (220,635) (201,063) (808,523) (223,131) (203,459) (819,652) Operating cash flow before working capital changes 1,832,481 1,064,248 4,862,013 1,828,250 1,064,360 4,860,447 (Increase)/Decrease in inventories (331,551) 258, ,321 (331,551) 258, ,321 (Increase)/Decrease in trade and other receivables 971,378 20,037 (1,206,468) 970,980 19,002 (1,213,846) (Increase)/Decrease in amounts due from related companies 191,071 (13,174) (584,921) 191,744 (13,174) (580,594) Increase/(Decrease) in tax payable (880,065) 400, ,134 (884,269) 399, ,199 Increase/(Decrease) in trade and other payables (273,337) 9, ,826 (269,534) 10, ,141 Increase/(Decrease) in amounts due to related companies 38,680 (35,000) (39,071) 38,680 (35,003) (39,071) Cash generated from operations 1,548,657 1,704,755 4,945,834 1,544,300 1,703,831 4,941,597 Finance expenses paid (523,240) (629,003) (2,057,521) (523,242) (629,013) (2,057,531) Retirement benefits paid (3,783) (2,431) (16,244) (3,783) (2,431) (16,244) Tax paid (32,000) (135,950) (32,000) (135,952) Net cash generated from operating activities 989,634 1,073,321 2,736, ,275 1,072,387 2,731,870 Cash flows from investing activities Purchase and construction of property, plant & equipment (192,483) (74,986) (1,364,200) (192,483) (74,986) (1,364,200) Borrowing cost capitalized (27,614) (21,864) (27,614) (21,864) Purchase of intangible assets (2,038) (2,038) Proceeds from sale of property, plant & equipment 39,368 50,146 Agent deposits received 32,591 2, ,362 32,591 2, ,362 Agent deposits refunded (6,998) (54,458) (6,998) (54,458) Interest received 220, , , , , ,652 Net cash generated from/(used in) investing activities 53, ,004 (385,307) 56, ,400 (363,400) Cash flows from financing activities Loans and borrowings received 700, ,000 1,500, , ,000 1,500,000 Repayments of loans and borrowing (411,611) (395,753) (2,648,979) (411,611) (395,753) (2,648,979) Repayments of debentures (998,800) (799,400) (799,400) (998,800) (799,400) (799,400) Progressive insurance receipts on property damage 752, ,263 Dividend paid net of tax (288,000) (288,000) Net cash used in financing activities (710,411) (895,153) (1,484,116) (710,411) (895,153) (1,484,116) Net increase in cash & cash equivalents 332, , , , , ,354 Cash & cash equivalents at the beginning of the year 7,007,123 6,140,427 6,140,427 7,128,583 6,244,229 6,244,229 Cash & cash equivalents at the end of the year 7,340,091 6,419,599 7,007,123 7,459,688 6,524,863 7,128,583 Analysis of cash and cash equivalents Cash and cash equivalents 8,033,727 7,485,059 7,968,516 8,153,324 7,590,323 8,089,976 Bank overdraft (693,636) (1,065,460) (961,393) (693,636) (1,065,460) (961,393) 7,340,091 6,419,599 7,007,123 7,459,688 6,524,863 7,128,583 6

9 NOTES TO THE FINANCIAL STATEMENTS 1 CORPORATE INFORMATION Lion Brewery (Ceylon) PLC is a public limited liability Company incorporated and domiciled in Sri Lanka and is listed on the Colombo Stock Exchange. The parent company is Ceylon Beverage Holdings PLC and the ultimate parent company is Bukit Darah PLC. The registered office of the Company is situated at No 61, Janadhipathi Mawatha, Colombo 01 and the principal place of business is situated at No 254, Colombo Road, Biyagama. The Interim Consolidated Financial Statements comprise of the Company and its subsidiaries (together referred to as the "Group" and individually Group entities). The subsidiaries of the Company are set out below. Subsidiary Pearl Springs (Private) Limited Millers Brewery Limited Controlling interest Note 100% "PSPL" 100% 100% Subsidiary of PSPL 2 BASIS OF PREPARATION 2.1 Statement of Compliance The condensed Interim Financial Statements of the Company and Group have been prepared in accordance with Sri Lanka Accounting Standard LKAS 34 Interim Financial Reporting. This Interim Financial Statement should be read in conjunction with the Annual Financial Statements for the year ended 31st March 2018 including the changes to accounting policies as a result of adapting to Sri Lanka Financial Reporting Standards, (" SLFRSs/LKASs") 2.2 Basis of measurement The Financial Statements have been prepared on the historical cost basis and applied consistently with no adjustments being made for inflationary factors affecting the financial statements, except for the following; Freehold Land and buildings are measured at cost at the time of acquisition and construction and subsequently at revalued amounts, which are the fair values at the date of revaluation less accumulated depreciation and impairment losses, if any. Employee benefits are recognized as the net total of the plan assets, plus unrecognized past service cost and unrecognized actuarial losses, less unrecognized actuarial gains and the present value of the defined benefit obligation. 2.3 Functional Currency and Presentation Currency All values presented in the Financial Statements are in Sri Lankan Rupees Thousands (Rs.'000s) which is the Group's functional currency, unless otherwise indicated. 3 FINANCIAL COMMITMENTS AND CONTINGENT LIABILITIES 3. 1 Finance Commitments Document credits established for foreign purchases of the Company as at 30th June ,004,776/ (2017 Rs.101,059,553/) amounts to Rs. 7

10 NOTES TO THE FINANCIAL STATEMENTS 3.2 Contingencies (a) Contingent liabilities as at 30th June 2018 amount to Rs.79,199,208/ (2017Rs. 52,122,952/), being bank guarantees given to Government bodies and foreign suppliers for operational purposes. (b) The following legal matter is outstanding against the Company and no provision has been made in the Financial Statements to this regard. The Customs Department instituted a prosecution in the Magistrate s Court of Kaduwela in Case No /Customs against the company and its directors to recover Excise Duty amounting to Rs. 58,753,582/94 comprising of the disputed Excise Duty of Rs. 29,376,791/47 and its penalty of Rs. 29,376,791/47. The Company and the directors have filed an application for Writ in the Court of Appeal to quash the Certificate of Excise Duty in Default issued by the DG of Customs and obtained a Stay Order in respect of the proceedings of the MC Kaduwela Case. The Court of Appeal made an order against the Company refusing the writ of certiorari prayed for and the Company has now preferred an appeal against the said order to the Supreme Court.Matter was Argued on the 9th of May 2018 before a Bench comprising of Justices Sisira De Abrew, Prasanna Jayawardene and L. T. B. Dehideniya, in the Supreme Court and concluded the arguments of both parties. Judgment is reserved by Justice Jayawardene and the parties will accordingly be notified Corresponding Magistrate court case was called on the 21st of May 2018 and upon representations made by LION, to the effect that company directors cannot be accused as defaulters in a case filed against a body corporate, court vacated the order summoning the directors. Thereafter, court ordered company to formally show cause and accordingly Company show caused on the 9th of July The Magistrate court case will be called for Order on the 10th of September

11 NOTES TO THE FINANCIAL STATEMENTS 4 DEBENTURES The Company issued 20,000,000 rated Unsecured Redeemable Debentures (Category 3 Type I) at a face value of Rs. 100/ each to raise Rs. 2,000,000,000/ on 11 th December The interest is paid on 30 th September and 31 st March for a period of 5 years. The categories of Debentures and its proportion of the different types of debentures in each category are as follows. Rs. 000's Category 03 Debentures Fixed Rate (Note 4.2) 2,000,000 2,000, Category 01 Debentures Floating Rate Category 01 Type E debentures amounting to Rs. 201,200,000/ were redeemed on June 16, Category 02 & 03 Debentures Fixed Rate Debentures Category Amount Rs. ('000) Interest Rate (per annum) AER (per annum) Redemption From the Date of Allotment Category 03 Type I 2,000, % 8.00% 60 Months (5 Years) Total 2,000,000 Category 02 Type H debentures amounting to Rs. 797,600,000/ were redeemed on June 16,

12 NOTES TO THE FINANCIAL STATEMENTS 4 Debentures (Contd.) 4.3 Composition of Debentures and Interest Payable Rs. ('000) Classified Under Non Current Liabilities Debentures falling due after one year (Category 3) 2,000,000 Classified Under Current Liabilities Debenture interest payable 39,142 39, Debenture trading Information Highest price (Rs.) Quarter Ended Quarter Ended Lowest Last Traded Highest price Lowest price price (Rs.) Price (Rs.) (Rs.) (Rs.) Last Traded Price (Rs.) Debentures issued on 11th Dec 2014 (Rs.100/ par value) Type I Fixed Rate 5 Year N/T N/T N/T N/T N/T N/T N/T Not traded during the quarter. 10

13 NOTES TO THE FINANCIAL STATEMENTS 4 Debentures (Contd.) 4.5 Debenture trading Information Interest rate of comparable government securities(%) Date Period Ended year treasury bonds % Debt related ratios Company Debt/equity ratio (times) 0.67 Quick asset ratio (%) 85% Interest cover (times) SEGMENTAL ANALYSIS The Company does not distinguish its products into significant components for different Geographical / Business segments as the differentiations are insignificant. 6 COMPARATIVE FIGURES Comparative figures/information have been reclassified where necessary in line with the changes to the new Sri Lanka Accounting Standards (SLFRS/LKAS). 7 EVENTS AFTER THE REPORTING PERIOD There were no material events taken place since June 30th, 2018 that require disclosure in these Financial Statements. 8 INVESTOR INFORMATION Investor Information Quarter Ended Year Ended Share Information Price as at the end of the period (Rs.) Highest price (Rs.) Lowest price (Rs.) Trading Statistics No of Transactions ,252 1,473 No of Shares traded 638,329 1,118,279 6,682,337 4,303,756 Value of all shares traded (Rs. Mn.) ,415 1,772 11

14 NOTES TO THE FINANCIAL STATEMENTS 9 TWENTY MAJOR SHAREHOLDERS AS AT 30TH JUNE 2018 # Name Total Shares % 1 CEYLON BEVERAGE HOLDINGS PLC 41,798, CARLSBERG BREWERY MALAYSIA BERHAD 20,000, CARSON CUMBERBATCH PLC A/C NO. 02 4,107, RBC INVESTOR SERVICES BANKCOELI SICAV I FRONTIER MARKETS FUND 1,773, HSBC INTL NOMINEES LTDJPMLUT ROWE PRICE FUNDS SICAV 1,662, PERSHING LLC S/A AVERBACH GRAUSON & CO. 1,353, BUKIT DARAH PLC A/C NO. 02 1,300, CITIBANK NEWYORK S/A NORGES BANK ACCOUNT 02 1,153, CARSON CUMBERBATCH PLC A/C NO , NORTHERN TRUST GLOBAL SERVICES LONDON S/A VERDIPAPIRFONDET ODIN EMERGING MARKETS 575, GF CAPITAL GLOBAL LIMITED 568, MELLON BANK N.A.FLORIDA RETIREMENT SYSTEM 498, SAMPATH BANK PLC/MRS.PRIYANI DHARSHINI RATNAGOPAL 300, HSBC INTL NOM LTDSSBT RUSSELL INVESTMENTS INSTITUTIONAL FUNDS PUBLIC LIMITED COMPANY 264, HSBC INTL NOMBBHRONDURE NEW WORLD FUND 261, HSBC INTL NOMINEES LTDSSBTFRANK RUSSEL TRUST COMPANY COMINGLED BENEFIT FUNDS TRUST GNA6QH3 253, HSBC INTL NOM LTDJPMCBT.ROWE PRICE INSTITUTIONAL FRONTIER MARKETS EQUITY FUND 222, HSBC INTL NOM LTDSSBTRUSSELL TRUST COMPANY COMMINGLED EMPLOYEE BENEFIT FUND TRUST RUSSELL FRONTIER MARKETS EQUITY FUND A/C , PORTELET LIMITED 161, UNION ASSURANCE PLC/ACCOUNT NO. 05 (UNITLINKED LIFE INSURANCE FUND EQUITY FUND) 151, PUBLIC HOLDING The Company is in compliance with the Minimum Public Holding requirements for Companies listed on the Main Board as per Rule (a) of the Listing Rules of the Colombo Stock Exchange, under Option 3, i.e. FloatAdjusted Market Capitalization of Rs.5 Billion with 500 Public Shareholders and a Public Holding percentage of 7.5%. The Company's Public Holding as at 30th June 2018 Market Capitalization of the Public Holding Rs.6.63 Billion Percentage of ordinary shares held by the public 14.55% Number of Public Shareholders 1, DIRECTOR'S SHAREHOLDINGS As at 30th June 2018 No. of Shares Mr. D. A. Cabraal (Chairman) Mr. H. Selvanathan (Deputy Chairman) 1,579 Mr. S. K. Shah (Chief Executive Officer) 6,016 Mr. D. C. R. Gunawardena 34 Mr. K. Selvanathan (Director / Alternate Director to H. Selvanathan) Mr. D. R. P. Goonetilleke 1 Mrs. S. J. F. Evans Mr. L. Lehmann Mr. R. H. Meewakkala Mr. Lim C. K. 12 STATED CAPITAL The Company's stated capital consists of 80,000,000 ordinary shares. 12

15 NOTES TO THE FINANCIAL STATEMENTS 13 RELATED PARTY TRANSACTIONS The Company carried out transactions in the ordinary course of its business with parties who are defined as related parties in Sri Lanka Accounting Standard LKAS 24 Related Party Disclosures, the details of which are reported below. (A) Transactions with Parent Company Ceylon Beverage Holdings PLC Messrs. Mr. D. A. Cabraal, H.Selvanathan, S.K.Shah, D.C.R.Gunawardena,Mr. L. Lehmann and Mr. R. H. Meewakkala Directors of the Company are also Directors of Ceylon Beverage Holdings PLC, with which the following contracts / transactions have been entered into during the period by the Company in the normal course of business. (i) (ii) As per the licensed brewing agreement with Ceylon Beverage Holdings PLC,the Company was charged Rs.30,692,491/(2017 Rs. 15,193,857/) as royalty during the period. Balance receivable from Ceylon Beverage Holdings PLC is Rs. 399,043,451/ (B) Transactions with Fellow Subsidiary Pubs 'N Places (Private) Limited Messrs. S.K. Shah and D.R.P. Goonetilleke, Directors of the Company are also Directors of Pubs 'N Places (Private) Limited, to which the Company sold beer for a total value of Rs.39,422,580/ during the period (2017Rs. 30,782,454/). (i) An amount of Rs.1,326,923/ was paid by the Company to Pubs 'N Places (Private) Limited as trade rebates on beer purchases during the period. (2017 Rs.748,176/) (ii) Balance receivable from Pubs 'N Places (Private) Limited as at 30th June 2018 is Rs. 12,920,553/ (2017Nil) (C) Transactions with Fellow Subsidiary Retail Spaces (Private) Limited Messrs. S.K. Shah and D.R.P. Goonetilleke, Directors of the Company are also Directors of Retail Spaces (Private) Limited, to which the Company sold beer for a total value of Rs. 42,452,085/( 2017 Rs.29,345,991/) during the period. (D) Transactions with Fellow Subsidiary Luxury Brands (Private) Limited (i) Messrs. S.K. Shah and D.R.P. Goonetilleke, Directors of the Company are also Directors of Luxury Brands (Private) Limited, for which the Company provided distribution services for a fee amounting to Rs. 3,248,308/ (2017 Rs.6,449,202/) during the period. (E) (ii) Balance receivable from Luxury Brands (Private) Limited is Rs.9,426,940/ Transactions with Sub Subsidiary Millers Brewery Limited Messrs. S.K Shah & D.R.P. Goonetilleke Directors of the Company are also Directors of Millers Brewery Limited. (i) An amount of Rs. 585,000/ (2017 Rs.1,900,950/) was charged by Millers Brewery Limited for warehouse services provided to the Company during the period. (F) Transactions with Group entities Messrs. H.Selvanathan, S.K.Shah and K. Selvanathan, Directors of the Company, are also Directors of Carsons Management Services (Private) Ltd., which provides supporting services to the Company. An amount of Rs79,710,753/(2017 Rs. 75,113,253/) was charged by Carsons Management Services (Private) Limited to the Company during the period, 13

16 NOTES TO THE FINANCIAL STATEMENTS (G) Transactions with other related entities (a) (i) Messrs. Mr. L. Lehmann and Mr. Lim C. K. Directors of the Company represents the Carlsberg Group with which the following contracts / transactions have been entered into during the period by the Company in the normal course of business. As per the licensed brewing agreement, a sum of Rs.38,679,517/ (2017 Rs. 18,464,794/) was charged as royalty during the period by Carlsberg A/S. (ii) (iii) LBCL purchases part of its requirement of the raw material Aroma Hop From Carlsberg A/S.There were purchases during the period for a sum of Rs.1,694,492/ (2017 Nil) The following table indicates the balance Receivable/(payable) to the Carlsberg Group affiliated breweries as at 30th June Receivables/(Payables) Rs. 30Jun18 31Mar18 Carlsberg Myanmar Co. Ltd 5,534,096 5,534,096 Carlsberg A/S (144,240,046) (105,560,029) (138,705,950) (100,025,933) (c) (i) (d) Mr. D.C.R. Gunawardena, Director of the Company, is also a Director of Equity Two PLC with which the Company entered into transactions. An amount of Rs. 61,224/ has been charged as parking fees to Equity Two PLC. (2017 Nil) Messrs. D.C.R. Gunawardena and K. Selvanathan Directors of the Company are also Directors of Pegasus Hotels of Ceylon PLC with which the following transactions have been entered into during the period by the Company in the normal course of business. i) An amount of Rs.547,091/ recognized as income from sale of Beer. (2017Nil) (H) Transactions with key management personnel (KMP) According to Sri Lanka Accounting Standard 24 "Related Party Disclosures", key management personnel are those having authority and responsibility for planning and controlling the activities of the entity. Accordingly, the Directors of the Company and its parent company (including executive and non executive directors) and their immediate family members have been classified as KMP of the Company. The compensation paid to key management personnel consist of shortterm employment benefits and no other payments such as postemployment benefits, terminal benefits and share based payments have been paid to key management personnel during the period. 14

17 Corporate Information NAME OF COMPANY Lion Brewery (Ceylon) PLC LEGAL ADVISERS (A Carson Cumberbatch Company) Messrs. F. J. & G. De Saram 216, De Saram Place COMPANY REGISTRATION NUMBER Colombo 10, Sri Lanka PQ 57 Tel: Fax: LEGAL FORM A Public Quoted Company with Limited Liability. AUDITORS Incorporated in Sri Lanka in 1996 Messrs. KPMG Official listing of the Colombo Stock Exchange obtained in 1997 Chartered Accountants No. 32A, Sir Mohamed Macan Markar Mawatha SUBSIDIARY COMPANIES Colombo 3, Sri Lanka Pearl Springs (Private) Limited Tel: Millers Brewery Limited Fax: PARENT AND CONTROLLING ENTITY Ceylon Beverage Holdings PLC is the immediate Parent Company of Lion Brewery (Ceylon) PLC. In the opinion of the Directors, Carson Cumberbatch PLC is the Parent Company of Ceylon Beverage Holdings PLC and Bukit Darah PLC is the Ultimate Parent and Controlling Entity of Ceylon Beverage Holdings PLC. MANAGERS & SECRETARIES Carsons Management Services (Private) Limited No. 61, Janadhipathi Mawatha Colombo 01, Sri Lanka Tel : Fax: REGISTERED OFFICE DIRECTORS No. 61, Janadhipathi Mawatha Mr. D. A. Cabraal (Chairman) Colombo 01, Sri Lanka Mr. H. Selvanathan (Deputy Chairman) Tel : Mr. S. K. Shah (Chief Executive Officer) Fax: Mr. D. C. R. Gunawardena Mr. K. Selvanathan (Director / Alternate Director to H. Selvanathan) CORPORATE OFFICE & BREWERY Mr. D. R. P. Goonetilleke 254, Colombo Road, Biyagama, Sri Lanka Mrs. S.J.F.Evans Tel : (10 Lines) Mr. L. Lehmann Fax : Mr. R. H. Meewakkala Mr. Lim C. K. GROUP WEBSITE BANKERS Citibank Commercial Bank Deutsche Bank DFCC Bank Hatton National Bank HSBC Nations Trust Bank National Development Bank Standard Chartered Bank Sampath Bank 15