CEYLON LEATHER PRODUCTS PLC INTERIM FINANCIAL STATEMENTS Six Months Ended 30 September 2017

Transcription

1 CEYLON LEATHER PRODUCTS PLC INTERIM FINANCIAL STATEMENTS Six Months Ended 30 September 2017

2 Statement of Financial Position 31-Mar Mar-17 As at 30-Sep Sep Sep Sep-16 Audited Audited Unaudited Unaudited Unaudited Unaudited Rs' 000. Rs' 000. Rs' 000. Rs' 000. Rs' 000. Rs' 000. ASSETS Non-Current Assets 3,259,425 1,198,044 Property, Plant & Equipment 3,174,608 3,446,337 1,193,697 1,182, Pre Paid Lease Rental - 24, ,503 1,014 Intangible Assets 26,269 26, , ,549 Investments in Subsidiaries , , Deferred Tax Asset - 6, ,285,927 2,055,607 3,200,877 3,504,904 2,051,026 2,040,370 Current Assets 1,648, ,019 Inventories 2,219,171 2,172, , ,300 1,052, ,994 Trade and Other Receivables 1,261,586 1,062, , ,738 12,429 - Loans & Receivables 26, , ,404 13, Income Tax Refunds due 1,932 1, Other Financial assets - 63, , ,885 Cash and Cash Equivalents 560, , , ,352 3,295, ,317 4,069,887 3,715, , ,212 6,581,529 3,013,923 Total Assets 7,270,765 7,220,666 3,042,523 2,897,582 EQUITY AND LIABILITIES Capital and Reserves 1,979,380 1,979,380 Stated Capital 1,979,380 1,979,380 1,979,380 1,979, , ,450 Reserves 869, , , , ,586 (230,165) Retained Earnings 433, ,303 (364,729) (378,206) 3,354,183 2,606,665 Equity attributable to Shareholders of Paren 3,281,746 3,441,601 2,472,101 2,458, ,542 - Non Controlling Interest 357, , ,692,725 2,606,665 Total Equity 3,639,358 3,833,538 2,472,101 2,458,624 Non-Current Liabilities 471,540 - Interest Bearing Loans & Borrowings 407, , ,590 45,665 Defined Benefit Liability 126, ,207 44,279 54, ,644 49,981 Deferred Tax Liability 194, ,864 49,981 60, ,774 95, , ,145 94, ,408 Current Liabilities 1,054, ,102 Trade and Other Payables 1,614,626 1,224, , , Income Tax Liabilities 5,165 21,211 4,972-1,052, ,511 Interest Bearing Loans & Borrowings 1,282,884 1,246, , ,504 2,107, ,613 2,902,675 2,492, , ,552 6,581,529 3,013,923 Total Equity and Liabilities 7,270,765 7,220,666 3,042,523 2,897,582 Net Assets Per Share (Rs.) The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited. I certify that the Financial Statements comply with the requirements of the Companies Act No. 07 of Sgd. Madhushan Zoysa Head of Finance The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Signed for and on behalf of the Board by: Sgd. Neville Peiris Chairman Sgd. A. G. Weerasinghe Director 14 November 2017

3 Statement of Profit or Loss Quarter Ended Variance Quarter Ended Variance Six Months Ended Variance Six Months Ended Variance 30-Sep Sep Sep Sep Sep Sep Sep Sep-16 Rs' 000. Rs' 000. % Rs' 000. Rs' 000. % Rs' 000. Rs' 000. % Rs' 000. Rs' 000. % Continuing Operations Revenue (Gross) 2,280,383 2,570,445-11% 157, ,029-65% 3,993,721 4,498,848-11% 295, ,281-66% Less - Taxes (23,360) (51,089) 54% (21,679) (50,288) 57% (47,710) (110,227) 57% (41,114) (106,995) 62% Revenue - Net 2,257,024 2,519,356-10% 135, ,741-66% 3,946,011 4,388,621-10% 254, ,286-67% Cost of Sales (1,940,628) (2,117,699) 8% (135,423) (340,148) 60% (3,534,254) (3,751,719) 6% (292,547) (684,402) 57% Gross Profit/(Loss) 316, ,657-21% 54 54, % 411, ,902-35% (37,865) 86, % Other Income - (Note 06) 9,745 7,543 29% 1,156 63,285-98% 18,080 19,202-6% 21,979 64,459-66% Selling & Distribution Expenses (32,404) (39,147) 17% (24,226) (26,016) 7% (43,620) (46,371) 6% (41,880) (21,940) -91% Administrative Expenses (166,050) (150,320) -10% (35,729) (28,683) -25% (314,143) (279,134) -13% (68,320) (55,699) -23% Other Expenses - (Note 07) (25,888) (59,058) 56% (12,394) % (50,713) (68,204) 26% (12,394) - 100% Finance Expenses (37,015) (37,354) 1% (10,495) (9,139) -15% (71,119) (79,746) 11% (18,134) (18,056) 0% Exchange Gain/( Loss) 3, % - - 0% (8,831) (21,154) 58% - - 0% Finance Income 14,158 9,385 51% 13,610 6,979 95% 27,802 20,037 39% 27,034 12, % Profit/(Loss) before Tax 82, ,353-38% (68,023) 61, % (30,786) 181, % (129,579) 68, % Income Tax (Expense)/Reversal (21,094) (24,992) 16% (2,541) % (19,741) (32,087) -38% (4,984) - 100% Profit/(Loss) from Continuing Operation 60, ,361-44% (70,564) 61, % (50,527) 149, % (134,564) 68, % Discontinued Operations Profit/(Loss) after Tax for the period from Discontinued Operations (Note 17) (2,235) (1,867) -20% - - (2,841) (2,606) 9% - - Profit/(Loss) for the period 58, ,494 (70,564) 61,018 (53,367) 146,838 (134,564) 68, % Attributable to Equity Holders of the Parent 33,526 85,690-61% (70,564) 61, % (72,437) 121, % (134,564) 68, % Non Controlling Interest 25,180 20,804 21% ,070 25,688-26% - - 0% 58, ,494-45% (70,564) 61, % (53,367) 146, % (134,564) 68, % Earnings / (loss) Per Share - Rs % (2.06) 1.78 (2.12) % (3.93) 1.99 The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.

4 Statement of Comprehensive Income Quarter Ended Variance Quarter Ended Variance Six Months Ended Variance Six Months Ended Variance 30-Sep Sep Sep Sep Sep Sep Sep Sep-16 Rs' 000. Rs' 000. % Rs' 000. Rs' 000. % Rs' 000. Rs' 000. % Rs' 000. Rs' 000. % Profit/(Loss) for the period 58, ,494-45% (70,564) 61, % (53,367) 146, % (134,564) 68, % Other Comprehensive Income/(Expense) to be reclassified to Profit or (Loss) in subsequent periods Change in Fair Value - AFS Assets - 0% - 0% - 0% - 0% - - 0% - - 0% - - 0% - - 0% Other Comprehensive Income not to be reclassified to Profit or (Loss) in subsequent periods Actuarial Gain/(loss) on defined benefit plans - 0% 0% - 0% 0% Tax effect on Actuarial gain/(loss) - 0% 0% - 0% 0% Revaluation surplus on land and buildings - 0% 0% - 0% 0% Tax effect on revaluation surplus - 0% 0% - 0% 0% Total Other Comprehensive Income not to be reclassified to Profit or (Loss) in subsequent periods - - 0% - - 0% - - 0% - - 0% Total Comprehensive Income/(Loss) Net of Tax 58, , % (70,564) 61, % (53,367) 146,838-64% (134,564) 68, % Attributable to : Equity Holders of the Parent 33,526 85,690-61% (70,564) 61, % (72,437) 121, % (134,564) 68, % Non Controlling Interests 25,180 20,804 21% - - 0% 19,070 25,688-26% - - 0% 58, ,494-45% (70,564) 61, % (53,367) 146, % (134,564) 68, % The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.

5 Cash Flow Statement Six Months Ended Six Months Ended 30-Sep Sep Sep Sep-16 Rs' 000 Rs' 000 Rs' 000 Rs' 000 Cash Flows From/(Used in) Operating Activities Net Profit/(Loss) before Tax from Continuing Operations (30,786) 181,532 (129,579) 68,155 Net Profit/(Loss) before Tax from Discontinuing Operations (2,841) (2,606) Adjustments for Depreciation 113, ,271 20,941 21,600 Interest Income (29,761) (20,037) (27,034) (12,507) Provision/(Reversal) for Impairment (19,565) - - Provision/(reversal) Debtors (13,440) 1,227 2,576 1,227 Finance Costs 48,988 79,746 18,134 18,056 Stock Provision/( Reversal) 6,480 6,480 (Profit)/Loss on Sale of Fixed Assets (1,174) - (73) Provision for Defined Benefit Plans 19,755 8,440 6,255 4,840 Amortization of Intangible Assets Operating Profit/(Loss) before Working Capital Changes 91, ,015 (102,066) 101,693 (Increase)/ Decrease in Inventories (577,002) (353,154) (37,794) 57,370 (Increase)/ Decrease in Trade and Other Receivables (247,996) (29,088) 51, ,820 Increase /(Decrease) in Trade and Other Payables 558, ,353 23,417 19,133 Cash Generated from/(used in) Operations (175,287) 151,126 (65,245) 301,016 Finance Costs (48,988) (79,746) (18,134) (18,056) Defined Benefit Plan Costs (8,790) (5,772) (7,640) (5,467) Income tax (2,789) (2,551) - - Net Cash From/(Used in) Operating Activities (235,854) 63,057 (91,019) 277,493 Cash Flows from/(used in) Investing Activities Acquisition of Property, Plant & Equipment (32,884) (84,273) (17,326) (37,598) Proceeds from Sale of Property, Plant & Equipment 5, Proceeds from investments 371, Investment in short term investments (14,346) (63,147) - - Interest Received 2,727 20,037-12,507 Net Cash Flows from/(used in) Investing Activities (38,858) 243,662 (16,521) (25,091) Cash Flows from/(used in) Financing Activities Dividend Paid - (16,787) - - Proceeds/(Payments) from intrest bearing Loans and Borrowings 297,239 (62,067) 93,700 (272,729) Net Cash Flows from/(used in) Financing Activities 297,239 (78,854) 93,700 (272,729) Net Increase/(Decrease) in Cash and Cash Equivalents 22, ,865 (13,840) (20,328) Cash and Cash Equivalents at the beginning of the period 407,273 16, ,702 80,788 Cash and Cash Equivalents at the end of the period 429, , ,862 60,460 Components of Cash & Cash Equivalents Cash & Bank Balances 139, ,521 3,644 5,352 Fixed & Call Deposits 421, , , ,000 Bank Overdrafts (130,624) (63,357) (90,179) (44,893) Total Cash Equivalents for the purpose of Cash Flow Statement 429, , ,862 60,460 The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as aud

6 Statement of Changes in Equity (Figures in Rs. '000) Attributable to Equity Holders of Parent Stated Revaluation AFS Assets Retained Total Non-Controlling Total Capital Reserve Reserve Earnings Interest Balance as at 01 April ,979, , ,586 3,354, ,542 3,692,725 Net Profit/(Loss) for the Period (72,437) (72,437) 19,070 (53,367) Other Comprehensive Income/(Loss) - - Dividend Paid - - Conversion of Preference Shares - - Pre paid lease rental adjustment - - Revaluation reserve transferred Balance as at 30 September ,979, , ,149 3,281, ,612 3,639,357 Stated Revaluation AFS Assets Accumulated Total Capital Reserve Reserve Profit Balance as at 01 April ,979, ,450 - (230,165) 2,606,665 Net Profit/(Loss) for the Period (134,564) (134,564) - Other Comprehensive Income/(Loss) Balance as at 30 September ,979, ,450 - (364,729) 2,472,101 The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.

7 Statement of Changes in Equity (Figures in Rs. '000) Attributable to Equity Holders of Parent Stated Revaluation AFS Assets Accumulated Total Non-Controlling Total Capital Reserve Reserve Profit Interest Balance as at 01 April ,979, , ,743 3,538, ,447 3,703,486 Net Profit/(Loss) for the Period - 121, ,150 25, ,838 Other Comprehensive Income/(Loss) Conversion of Preference Shares (217,590) (217,590) 217,590 - Dividend Paid - - (16,787) (16,787) Balance as at 30 September ,979, , ,303 3,441, ,938 3,833,538 Attributable to Equity Holders of Parent Stated Revaluation AFS Assets Accumulated Total Capital Reserve Reserve Profit Balance as at 01 April ,979, ,450 (446,360) 2,390,469 Net Profit/(Loss) for the Period 68,155 68,155 Other Comprehensive Income/(Loss) - Issue of Shares - Warrant Conversion Cost - Balance as at 30 September ,979, ,450 - (378,205) 2,458,624 The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.

8 Notes to the Interim Financial Statements For the Six Months Ended 30 September General Information Ceylon Leather Products PLC is a Public Limited Company incorporated and domiciled in Sri Lanka and listed on the Colombo Stock Exchange (Company Registration No. - PQ 99). Ordinary Shares of the Company are listed on the Colombo Stock Exchange. The address of its registered office is 64, Belummahara, Mudungoda. Principal activities of the Company during the period under review were manufacturing and selling of Leather, Leather Footwear, and Leather Goods. 2 Interim Condensed Financial Statements These Unaudited Interim Condensed Financial Statements include the "Company" referring to Ceylon Leather Products PLC., as the Holding Company and "the Group" referring to the companies whose accounts have been consolidated therein : Ceylon Leather Products Distributors (Pvt) Ltd, South Asia Textiles Ltd and Palla & Company (Pvt) Ltd. These Financial Statements have been approved for issue by the Board of Directors on 14 November Basis of Preparation The Condensed Interim Financial Statements have been prepared in compliance with Sri Lanka Accounting Standard (LKAS) 34 - Interim Financial Reporting. These Interim Financial Statements should be read in conjunction with the Annual Financial Statements for the year ended 31 March 2017, which have been prepared in accordance with SLFRS. The figures of previous year have been restated and/or reclassified in conformity with those presented in the Annual Financial Statements for the year ended 31 March 2016, which have been prepared in accordance with SLFRS, and to be comparable with those of the current year's presentation. All figures are presented in Sri Lankan Rupees (Rs.) and all values are rounded to nearest thousand except when otherwise indicated. 4 Accounting Policies The Accounting Policies adopted are consistent with those of the previous financial year, as reported in the Annual Financial Statements for year ended 31 March Events Occurring after the Reporting Period No circumstances have arisen since the Balance Sheet date, which would require adjustments to or disclosure in the Financial Statements except Note No Other Income Other Income of the Company includes impairment reversal of Palla & Company (Pvt) ltd amounting to Rs Mn Other Expense Other Expenses of the Group includes customer claims of South Asia Textiles Ltd amounting to Rs Mn and delisting expense of Ceylon Leather Products PLC amounting to Rs.7.06 Mn. 8 Contingencies, Capital and Other Commitments The Company received 02 tax default notices on 09 June 2015 and 06 August 2015 amounting to Rs Mn default tax with 6.4 Mn penalty and 32.6 Mn default tax with Rs.10.3 Mn penalties respectively all together amounting to Rs.71.7 Mn from the Department on Inland Revenue. This is for prior to year 2011 periods and made a provision of Rs. 30 Mn (Default tax including 10% penalties) in 2015/2016 financials for the potential liability that could arise. The balance amount has not been provided as the Company has submitted relevant supporting documents and also made an appeal to the Department of Inland Revenue to write off the assessments. There are 03 legal cases filed by certain ex employees of Palla & Company (Pvt) ltd due to terminatin of employment due to go slow activity, misconduct and stike in year 2013, Outcome of these cases cannot be ascertained as at the Balance Sheet date. Company's capital commtment for completion of Water Treatment Plant amounts to Rs 9.5 mn. Other than above There are no material Contingencies, Commitments which require disclosure as at reporting date. 9 Stated Capital Number of Ordinary Shares represented in Stated Capital - 34,234,069 ( ,233,946 ). 10 Letters of Credit and Bank Guarantees Company, in its normal course of business opens Letters of Credit with Banks favoring suppliers in respect of material procurement and gives Guarantees issued by banks on company's behalf favoring customers. Respective balances outstanding as at the reporting date are given below: Letters of Credit opened with Banks favoring Suppliers Rs.90.8 Mn Guarantees Offered by Banks on behalf of the Company Rs.29.4 Mn Guarantees given to Banks on behalf of Subsidiaries Amount (Rs.) Outstanding (Rs.) - South Asia Textiles Limited - (USD Mn) Mn Mn

9 Notes to the Interim Financial Statements (Contd.) For the Six Months Ended 30 September Twenty Major Shareholders as at 30 September 2017 Name of the Shareholder No of shares % 1 Seylan Bank PLC/ Lanka Century Investments PLC (collateral) 32,703, Dr.S.Yaddehige 111, Mr.D.F.G.Dalpethado 84, People's Leasing & Finance plc/i.p.hapangama 70, Mr.B.U.Hettiarachchi 42, Hatton National Bank PLC/Chokshanada Kumara Sangakkara 34, Flyasia sdn.bhd 25, Seylan Bank PLC/A.M. Nimesha Anuruddha Abeykoon 25, Mr.C.K.Sangakkara 23, Mr.C.V.Kunanandham 23, Hatton National Bank PLC/Sanka Ramoorthy Nadaraj Kumar 21, Mr.H.W.M.Woodward(deceased) 21, Mrs.B.K.V.Wickramasinghe 20, MSF.A.A.Mack 18, Hatton National Bank PLC/Arunasalam Sithampalam 16, Mrs.U.C.P.Abeysekara 15, Mrs.R.M.V.De Fonseka 15, Dee Sanda Holdings Pvt ltd 12, Mr.K.M.Dissanayake 12, Mrs.K.M.Goonewardene 12, Share Prices for the Quarter ended Highest Rs Rs Lowest Rs Rs Last Traded Price Rs Rs Public Holding The public holding percentage 4.47% 4.47% No of Share Holders 1,744 1,809 No of Shares 1,529,864 1,529, Reorganisation of the shares and capital structure of the Company At the Extraordinary General Meeting of Shareholders held on 24 August 2017, the Special Resolutions approving the arrangement was passed by the Shareholders unanimously. Pursuant thereto, on 06 September 2017, Court made an order as prayed for in paragraph (b) of the Prayer to the Petition filed by the Company, that the arrange set out in the Circular to Shareholders marked X7 (b) to the Petition be binding on the Company and its Shareholders. The Shareholders entered in the Register of Shareholders of the Company as at end of trading on 28 September 2017 were entitled to the allotment of five decimal zero zero seven seven (5.0077) new ordinary shares of Lanka Century Investments PLC for every one (01) share held by the them in the Company (CLPL). Trading of shares of CLPL were suspended effective from 29 September 2017, and until the shares of the Company are delisted in accordance with the relevant Securities and Exchange Commission of Sri Lanka (SEC) Rules. 14 Directors' Shareholdings Name of Director Mr. N. C. Peiris (Chairman) 1, Mr. A. G. Weerasinghe - - Mr. P. D. J. Fernando - - Mr. P. P. Maddumage - - Mr. N. M. Prakash - - Mr. Asela Iddawela Shareholding by the Chief Executive Officer Mr. S.Ranasinghe - -

10 16 Discontinued Operation - Ceylon Leather Products Distributors (Pvt) Ltd ceased its operations and transferred to Ceylon Leather Products PLC with effect from 01 August Palla & Company (Pvt) Ltd, a subsidiary of the Company suspended its operation with effect from 31 August Palla Palla Rs'000 Rs'000 Revenue - - Cost of Sales - Gross Profit - - Other Income 1,831 1,947 Finance Income 1,959 Selling & Distribution Costs - - Administrative Expenses (6,274) (4,013) Finance Cost (0) (540) Profit/(Loss) before Tax from discontinued operations (2,484) (2,606) Income Tax Expense (356) - Net Profit/(Loss) from discontinued operations (2,841) (2,606) The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.

11 Notes to the Interim Financial Statements (Contd.) For the Six Months ended 30 September Segment Information - Group For Management purposes, the Group is organized into business units based on their products and accordingly, has been identified into following reportable operating segments: - Leather and Footwear - Textiles 17.1 Turnover and Operating Results 30 September 2017 Leather & Textile Total Footwear Rs. 000 Rs. 000 Rs. 000 Revenue - Local Net of Taxes 251,186 65, ,601 Revenue - Export Direct/Indirect 2,089 3,627,321 3,629,410 Total Segment Revenue - ( Net of Taxes ) 254,682 3,692,735 3,946,011 Operating Profit/(Loss) Segment Results (before Finance Cost) (148,705) 193,868 45,163 Other Expenses (12,394) (38,319) (50,713) Finance Cost (18,134) (52,985) (71,119) Finance Income 27, ,802 Finance Cost - Net 8,900 (52,217) (43,317) Other income 2,415 15,665 18,080 Profit/ (Loss) before Tax (149,783) 118,998 (30,786) Income Tax Expense (4,984) (14,757) (19,741) Net Operating Profit/(Loss) For the Year (154,768) 104,241 (50,527) Turnover and Operating Results 30 September 2016 Leather & Textile Total Footwear Rs. 000 Rs. 000 Rs. 000 Revenue - Local Net of Taxes 876,383 40, ,100 Revenue - Export Direct / Indirect 11,226 3,570,522 3,581,748 Total Segment Revenue - ( Net of Taxes ) 887,610 3,611,238 4,498,848 Operating Profit/(Loss) Segment Results (before Finance Cost) 11, , ,243 Other Expenses - (68,204) (68,204) Finance Cost (18,056) (61,690) (79,746) Finance Income 12,507 7,530 20,037 Finance Cost - Net (5,549) (54,160) (59,709) Other income (4,360) 23,562 19,202 Profit/ (Loss) before Tax 1, , ,532 Income Tax Expense (525) (31,561) (32,087) Net Operating Profit/(Loss) For the Year , ,445 The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.

12 Notes to the Interim Financial Statements (Contd.) For the Six Months ended 30 September Segmental Assets Leather & Textile Total Footwear Rs. 000 Rs. 000 Rs. 000 As at 30 September 2017 Non Current Assets 1,207,139 1,993,738 3,200,877 Current Assets 1,087,307 2,982,580 4,069,887 Total Assets 2,294,446 4,976,319 7,270,765 As at 30 September 2016 Non Current Assets 1,371,649 2,133,256 3,504,904 Current Assets 883,763 2,831,998 3,715,761 Total Assets 2,255,411 4,965,254 7,220, Segmental Liabilities Leather & Textile Total Footwear Rs. 000 Rs. 000 Rs. 000 As at 30 September 2017 Non Current Liabilities 94, , ,732 Current Liabilities 539,593 2,363,082 2,902,675 Total Liabilities 633,853 2,997,554 3,631,407 As at 30 September 2016 Non Current Liabilities 132, , ,145 Current Liabilities 426,346 2,066,637 2,492,983 Total Liabilities 558,440 2,828,688 3,387, Segmental Capital Expenditure Leather & Textile Total Footwear Rs. 000 Rs. 000 Rs. 000 For the quarter Ended 30 September ,519 17,365 32,884 For the quarter Ended 30 September ,949 52,323 84, Segmental Depreciation & Amortization Leather & Textile Total Footwear Rs. 000 Rs. 000 Rs. 000 For the Year Ended 30 September ,572 90, ,462 For the Year Ended 30 September ,042 78, ,713 The information contained in these statements have been extracted from the unaudited financial statements of the Company unless indicated as audited.