BUKIT DARAH PLC Condensed InterIm FInanCIal statements For the nine months ended 31st december 2015

Transcription

1 BUKIT DARAH PLC Condensed Interim Financial Statements For the Nine Months ended 31st December 2015

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3 1 Group Review For the Nine Months Ended 31st December 2015 Company Driven by lower Dividend Receipts from Subsidiary companies, Bukit Darah PLC reported a 61% Yearon-Year drop in standalone Revenue, which stood at Rs Mn for the nine months ended 31st December Accordingly, the company s financial year-to-date Net profit stood at Rs Mn, down by 64% compared to the first three quarters aggregate of financial year 2014/15. Group At Group level, Bukit Darah PLC reported Revenue of Rs Bn for the nine months ended 31st December 2015, depicting a marginal improvement of 1% against the corresponding period, led by growth in Beverage sector Turnover, which in turn was fuelled by the increased Excise Duty component. Contributions to Group Revenue by the Oil Palm Plantations and Portfolio & Asset Management businesses were relatively low this period on account of low average Crude Palm Oil prices and limited market opportunities respectively. In contrast to the 1% growth in Revenue Year-on- Year, consolidated gross profit contracted by 11% over the two comparable periods, to stand at Rs Bn for the nine months ended 31st December The decline in Gross Profit is attributable towards increased Excise duty and low margins yielded by the Oil Palm Plantations segment. On a positive note, the Group recorded a Rs Mn gain from change in fair value of biological assets for the period in review, marking an improvement of 274% against the corresponding nine months. Further, the foreign exchange loss reported for the nine months in consideration was 15% lesser than what was recorded last year. However, these are non-operational, non-cash, book entries which fluctuate based on external factors and have no direct bearing on operational fundamentals. Group companies who have reported a profit during the financial year 2013/14 were subjected to Super Gain Tax as per the provisions of Finance Act, No. 10 of The consolidated outlay of Rs.513 Mn, though was not charged to current period as provided by the said Act and SoAT issued by Institute of Chartered Accountants of Sri Lanka, impacted the cash flows of the Group during the quarter under review. Given the drop in Gross Profitability, overall Net Profit reported for the period registered a 44% decline against the comparable nine months. LKR Mn. Company Consolidated 9M 15/16 9M 14/15 % Change 9M 15/16 9M 14/15 % Change Turnover (61%) 65,202 64,846 1% Profit Before Tax (64%) 4,369 7,144 (39%) Unrealized Foreign Exchange Loss/(Gain) ,098 1,047 5% Loss/(Gain) from change in FV of Biological Assets (899) (240) 275% Adjusted Profit Before Tax (64%) 4,568 7,951 (43%) For the Nine Months ended 31st December 2015

4 2 Group Review CONTD. For the Nine Months Ended 31st December 2015 LKR Mn. Revenue Profit/(Loss) Before Tax 9M 15/16 9M 14/15 % Change 9M 15/16 9M 14/15 % Change Investment Holdings % (97) (88) (10%) Portfolio & Asset Management 1,003 1,737 (42%) 829 1,820 (54%) Oil Palm Plantations 14,514 18,400 (21%) 1,449 3,773 (62%) Oils & Fats 20,932 21,265 (2%) (605) (810) (25%) Beverage 28,145 22,908 23% 2,660 2,295 16% Real Estate % % Leisure % (5%) Other % (48) (23) 109% Group - Reported Figures 65,202 64,846 1% 4,369 7,144 (39%) Unrealized Foreign Exchange Loss/(Gain) ,098 1,047 5% Loss/(Gain) from change in FV of Biological Assets (899) (240) 275% Group - Adjusted Figured 65,202 64,848 1% 4,568 7,951 (43%) Bukit Darah PLC

5 3 Segmental Review Oil Palm Plantations As explained in the previous quarter s review, the Oil palm plantation segment has been subjected to continuing external challenges with resultant impacts on the financial performance of the segment. The palm oil prices has been affected by a multitude of factors, like higher inventory levels in Malaysia, slow down in consumption in key consuming markets, lower price regime for competing oils like soya bean as well due to declining crude oil prices which in turn impacts the viability of palm based bio diesel. These multitude of factors tend to exert pressure on CPO prices, though there are seasonal movements in prices. As the financial year commenced, CPO prices were trading at around RM 2,100 levels, and during December 2015 prices regained to RM 2,200 recovering from a drop in August and September to RM 1,800 levels. CPO prices have subsequently recouped and currently trading at around RM 2,300-2,350 reflecting the anticipated drop in future crop production due to the extreme weather conditions witnessed particularly in Indonesia in the past few months. However, the levy of US$ 50 imposed in Indonesia by the government as a bio-diesel levy on export of CPO to boost the bio diesel consumption, has an impact on the realized CPO prices by the Company as this levy is factored into the price of CPO sold in Indonesia. period. The extreme weather conditions which had impacted significantly the crop production during the 2nd half of the current financial year, is also expected to have an impact on the crop production in Indonesia in the coming year. Month of July 15 in particular was confirmed to be one of the hottest months by meteorological experts (Japan Meteorological Agency and NASA). The Group s Oil Palm Plantations segment reported Revenue of Rs. 14.5Bn (USD 105.5mn) during the nine months ended 31st December 2015 which is a drop 21% Year-on-Year. Accordingly, sector EBITDA for the period stood at Rs.4.0 Bn (USD 53.9), down by 42% from the comparable period. Further to the decline in crop and low CPO prices which brought down Revenue, sector earnings for the period was affected by exchange valuations losses recorded on the USD denominated borrowings as a result of continued depreciation of the IDR to the USD. The Exchange rate between the Indonesian Rupiah and the US Dollar depreciated by 5% from the exchange rate that prevailed as at 31st March 2015, resulting in a foreign exchange valuation loss of Rs Mn being booked for the period under review which is an improvement on the foreign exchange loss of Rs.1.1Bn recorded for the first nine months of the financial year 2014/15. On the production front, the year under review turned out to be the second consecutive year where a drop in production was witnessed, with signs that an el-nino had taken place during this For the Nine Months ended 31st December 2015

6 4 Segmental Review CONTD. Oils & Fats Segment As explained in the previous quarter, this segment has been able to enhance the production and sale of specialty fats and has been able to achieve capacity optimization for its high margin products. Specialty fats sales in both the Malaysian and Indian operations has increased year on year basis. However this trend is not reflected Sri Lankan Rupee denominated consolidated segment results purely due to currency translation effects on reporting. A common challenge facing both the operations is the sale of by-products which impacts and dilutes the average margins earned, whilst management is working towards increasing the usage of byproducts through product improvements especially within the Malaysian operations. Overall costs of the segment are closely managed with monitoring mechanisms in place to address variances. The impact of fluctuating CPO prices on feedstock imports affected margins in India. However this too is now being managed by fixing the feedstock purchase price based on the CPO price at the time of importing. As such, the Oils & Fats segment reported EBITDA of Rs Mn on Revenue of Rs Bn for the period under review, compared to a negative EBITDA of Rs Mn on Revenue of Rs Bn during the same period last year. Beverage Two significant events impacted the beer industry during the third quarter of this financial year albeit, negatively. The first was in the first week of October when the tax on mild beer was increased by 27% & that of strong beer by 32%. The second was in the third week of November when strong beer taxes were increased by a further 29%. A relatively small reduction in the tax on mild beer was announced in November but was quickly reversed within a few days. Thus taken together, within a period of two months, the excise tax on strong beer was increased by 70% whilst that of mild beer was increased by 27%. Had the intention of the Government in making these tax increases was purely to increase Government revenue, then it has been an abject failure. Collection of Beer taxes as government revenue which stood at Rs. 2.2 Bn in September 2015 was down 18% to Rs. 1.8 Bn by December 2015, the first full month after the double tax increase on the industry. There are no signs to indicate that the position will change for the better in the near future. Not only is Government revenue down but so are volumes and profits of the industry & that of the Company. If the Government had a secondary intention of curbing alcohol intake by its countrymen on a health conscious line, then that strategy also failed since the volume lost by the beer industry has been picked up by the toddy & arrack sectors, both of which carry a higher alcohol percentage. This is not considering the additional spillover to Bukit Darah PLC

7 5 illicit liquor consumption which is by far the largest source of alcohol in Sri Lanka. In summary, the recent excise duty amendments have led to greater consumption of products which are either unhygienic and/or of a higher alcohol content, has enhanced returns in two sectors where tax evasion is perceived to be widely prevalent, has reduced government revenue & has destroyed value in the beer sector. Thus, through this one short-sighted decision, consumer health, government revenue and industry profitability have all been compromised. A number of initiatives have been put in place to re-structure the Company to suit the current operating environment. Thus whilst the results of the final 3 months of the year and excise tax payments are expected to be significantly lower than in the previous quarters, an improvement on the December results have already been realized. Portfolio & Asset Management For the nine months under review, the Colombo All Share Price index (ASPI) recorded growth of 1.09% and the Standard & Poor s SL 20 index decreased by 5.89%. But the 2015 calendar year saw the CSE in negative territory where both the ASPI and Standard & Poor s SL 20 indices depreciated by 5.54% and 11.33% respectively. Foreign interest for the same period was negative, with an outflow of Rs. 4,426 mn. Budget proposals announced in November which included increased turnover based taxes, a two tier income tax system and revised VAT system saw varying impacts across listed companies. However, active lobbying by various bodies saw much of the proposals overturned leaving concerns on achieving the fiscal revenue collection targets. Further to this, economic concerns such as Rupee depreciation, rising domestic interest rates and funding of upcoming external debt repayments continued to dampen spirits on the CSE. Despite sluggish market conditions, the Group s total Assets under Management (AUM) which stood at Rs Bn as at 31st December 2015 depicted year-to-date growth of 1.2%. The discretionary portfolio managed by the group, valued at Rs Bn as at end December 2015, reflected year-to-date growth of 1.37%. After adjusting the impact of dividend distribution, the discretionary portfolio yielded year-to-date return of 3.94%, outperforming the ASPI by 2.85%. Leisure The Group s Leisure business comprising of the two hotel properties; Pegasus Reef Hotel and Giritale Hotel, registered average occupancy of 55% for the period under review, which is an improvement of 9% compared to the 46% average occupancy recorded for the nine months ended 31st December For the Nine Months ended 31st December 2015

8 6 Segmental Review CONTD. However, growth in top line did not translate to higher bottom line, given narrower Gross Margins and relative increase in Overheads. Sector Gross Margin for the period was affected negatively due to repair & maintenance costs incurred and Staff related expenses arising from new recruitments to The Fishery restaurant at Pegasus Reef Hotel. The increase in overheads was mainly driven by sales& marketing expenses incurred for the said restaurant. Accordingly, the Group s leisure business reported overall net profit of 69.6 Mn for the nine months under consideration, which is a year-on-year decrease of 2.9%. Real Estate For the period ended 31st December 2015 the Real Estate sector reported Revenue of Rs Mn, reflecting an increase of 12.1% against the corresponding nine months, driven by growth in Rental Income. The sector recorded a 12.7% increase in overall profit for the period in review compared to the nine months ended 31st December Carsons Management Services (Pvt) Ltd. 8th February 2016 Bukit Darah PLC

9 7 COMPANY STATEMENT OF INCOME Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) For the three months ended 31st December Change For the Nine months ended 31st December Change % % Revenue 1,030 92,974 (99) 189, ,363 (61) Direct operating expenses ,030 92,974 (99) 189, ,363 (61) Other items of income Gain on fair value of financial assets held for trading , Other items of expenses Administrative expenses (6,591) (6,254) 5 (23,229) (18,873) 23 Profit before income tax expenses (5,561) 86,720 (106) 169, ,490 (64) Income tax expenses Current taxation (308) (1,000) (69) (1,653) (2,500) (34) Profit for the period (5,869) 85,720 (107) 167, ,990 (64) Earnings per ordinary share (Rs.) (0.06) 0.84 (107) (71) Dividend per ordinary share (Rs.) Change % column represents the percentage change in current period s results compared to comparative period of previous year. The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements 8th February 2016 For the Nine Months ended 31st December 2015

10 8 COMPANY STATEMENT OF FINANCIAL POSITION Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) As at As at 31st December (Audited) Assets Non Current Assets Investments in subsidiaries 7,139,062 7,139,062 Total non - current assets 7,139,062 7,139,062 Current Assets Other non financial receivables 1,908 1,349 Financial assets held for trading - 110,132 Cash and cash equivalents 67, ,394 Total current assets 69, ,875 Total assets 7,208,481 7,372,937 Equity and Liabilities Equity Stated capital 412, ,635 Capital Reserve 40,000 40,000 Revenue reserves 6,660,872 6,845,682 Total equity 7,113,507 7,298,317 Current Liabilities Other financial payables 94,467 74,355 Current tax liabilties Total current liabilities 94,974 74,620 Total liabilities 94,974 74,620 Total Equity and Liabilities 7,208,481 7,372,937 Net assets per ordinary share (Rs) I certify that these financial statements are in compliance with the requirements of Companies Act No. 07 of Sgd. A.P. Weeratunge Director - Finance Carsons Management Services (Pvt) Ltd. The Board of Directors is responsible for the preparation and presentation of these financial statements. These financial statements were approved by the Board on 8th February Sgd. sgd. H. Selvanathan m. Selvanathan Chairman Director The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements Bukit Darah PLC

11 9 COMPANY STATEMENT OF CHANGES IN EQUITY Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) Stated Capital Revenue Total Capital Reserve Reserve Equity Balance as at 31st March 2015 (Audited) 412,635 40,000 6,845,682 7,298,317 Change relating to Super gain tax (Note 11) - - (2,340) (2,340) Profit for the period , ,695 Total Comprehensive Income for the period , ,355 Transactions with owners of the company Dividend paid - Participating Cumulative Preference Shares - - (44,165) (44,165) - Ordinary Shares (306,000) (306,000) Balance as at 31st December 2015 (Unaudited) 412,635 40,000 6,660,872 7,113,507 Balance as at 31st March 2014 (Audited) 412,635 40,000 6,733,457 7,186,092 Profit for the period , ,990 Total Comprehensive Income for the period , ,990 Transactions with owners of the company Dividend paid - Participating Cumulative Preference Shares - - (44,165) (44,165) - Ordinary Shares - - (306,000) (306,000) Balance as at 31st December 2014 (Unaudited) 412,635 40,000 6,850,282 7,302,917 The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements For the Nine Months ended 31st December 2015

12 10 COMPANY STATEMENT OF CASH FLOW Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) For the Nine months ended 31st December Cash Flows from Operating Activities Profit before income tax expenses 169, ,490 Operating profit before working capital changes 169, ,490 (Increase)/decrease in trade and other receivables (557) (1,664) Increase/(decrease) in trade and other payables (1,370) (1,325) 167, ,501 Net cash movement in investment 110,130 - Cash generated from operations 277, ,501 Income tax paid (1,411) (558) Super gain tax paid (Note 11) (2,340) - Net cash generated from operating activities 273, ,943 Cash Flows from Financing Activities Dividend paid by the Company (328,683) (334,756) Net cash used in financing activities (328,683) (334,756) Net increase/(decrease) in cash & cash equivalents (54,883) 131,187 Cash & cash equivalents at the beginning of the year 122, ,507 Cash & cash equivalents at the end of the period 67, ,694 Statement of Cash & Cash Equivalents Cash and cash equivalents 67, ,694 67, ,694 The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements Bukit Darah PLC

13 11 CONSOLIDATED STATEMENT OF INCOME Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) For the three months ended 31st December Change For the Nine months ended 31st December Change Notes % % Revenue 20,591,691 22,579,994 (9) 65,201,585 64,845,808 1 Direct operating expenses (15,334,711) (15,876,093) (3) (47,904,473) (45,368,390) 6 5,256,980 6,703,901 (22) 17,297,112 19,477,418 (11) Other items of income Changes in fair value of biological assets 5 1,661,410 (232,818) (814) 898, , Changes in fair value of financial assets held for trading (20,643) 22,071 (194) 24, ,126 (89) Other income 68, ,243 (48) 265, , Other items of expenses Distribution expenses (1,331,150) (1,471,266) (10) (4,060,311) (4,126,391) (2) Administrative expenses (2,684,643) (1,871,247) 43 (6,444,466) (5,447,201) 18 Other operating expenses (114,047) (42,256) 170 (293,355) (147,702) 99 Foreign exchange losses 6 1,681,529 (163,665) (1,127) (1,053,252) (1,237,774) (15) Profit /(Loss) from operations 4,518,113 3,077, ,634,178 9,153,297 (28) Net finance cost (654,573) (919,824) (29) (2,267,260) (2,007,018) 13 Share of net results of Joint venture 487 (803) (161) 2,233 (2,700) (183) Profit before income tax expenses 3,864,027 2,157, ,369,151 7,143,579 (39) Income tax expense Current taxation (477,722) (388,321) 23 (1,156,137) (1,869,040) (38) Deferred taxation (789,790) (323,290) 144 (460,929) (337,860) 36 (1,267,512) (711,611) 78 (1,617,066) (2,206,900) (27) Profit for the period 2,596,515 1,445, ,752,085 4,936,679 (44) Profit Attributable to: Owners of the Company 1,238, , ,641 1,625,124 (62) Non controlling interest 1,357, , ,140,444 3,311,555 (35) 2,596,515 1,445, ,752,085 4,936,679 (44) Earnings per ordinary share (Rs.) (64) Dividend per ordinary share (Rs.) Change % column represents the percentage change in current period s results compared to comparative period of previous year. The above figures are subject to audit. Figures in brackets indicate deductions. The notes on pages 18 to 30 form an integral part of these financial statements 8th February 2016 For the Nine Months ended 31st December 2015

14 12 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) For the three months ended 31st December Change For the Nine months ended 31st December Change % % Profit for the period 2,596,515 1,445, ,752,085 4,936,679 (44) Other Comprehensive Income Item that may be reclassified subsequently to profit or loss Unrealized gain / Loss on available-forsale financial assets (81,660) (15,608) ,597 1,762,071 (86) Realized gain / Loss on available-for-sale financial assets (75,928) (249,068) (70) (579,717) (910,882) (36) Exchange differences on translation of foreign operations 3,562,949 (1,175,097) (403) (1,037,384) (4,567,973) (77) Other comprehensive income / (expenses) for the Period net of tax 3,405,361 (1,439,773) (337) (1,376,504) (3,716,784) (63) Total Comprehensive Income for the period net of tax 6,001,876 5, ,738 1,375,581 1,219, Attributable to: Owners of the Company 3,165,033 (246,073) (1,386) (133,374) (700,560) (81) Non controlling interest 2,836, ,025 1,026 1,508,955 1,920,455 (21) 6,001,876 5, ,738 1,375,581 1,219, The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements 8th February 2016 Bukit Darah PLC

15 13 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) As at As at 31st December (Audited) Assets Non Current Assets Property, plant & equipment 59,166,091 58,198,456 Biological assets 52,450,822 47,034,490 Prepaid lease payment for land 4,677,124 4,466,870 Investment properties 2,356,381 2,355,945 Intangible assets 6,979,444 6,991,118 Investments in joint venture 28,614 25,913 Available-for-sale financial assets 9,247,150 9,093,006 Deferred tax assets 3,719,865 2,756,688 Other financial receivables 133, ,545 Other non financial receivables 3,465,138 2,841,838 Total non current assets 142,223, ,886,869 Current Assets Inventories 7,231,432 7,665,077 Trade receivables 4,440,449 4,491,999 Other financial receivables 1,027, ,608 Other non financial receivables 7,073,098 5,076,741 Assets held for sale 368, ,895 Current tax recoverable 55,071 83,209 Financial assets held for trading 3,133,084 2,822,368 Derivative financial instruments ,383 Cash and cash equivalents 6,953,938 9,145,650 Total current assets 30,283,549 30,518,930 Total Assets 172,507, ,405,799 Equity and Liabilities Equity Stated capital 412, ,635 Capital Reserve 2,197,149 2,202,190 Revenue reserves 24,925,457 25,496,864 Equity attributable to owners of the company 27,535,241 28,111,689 Non - controlling interest 35,802,542 35,065,642 Total Equity 63,337,783 63,177,331 Investment through subsidiaries (10,688) (10,688) 63,327,095 63,166,643 For the Nine Months ended 31st December 2015

16 14 CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONTD. Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) As at As at 31st December (Audited) Liabilities Non Current Liabilities Loans and borrowings 40,548,036 46,533,446 Debenture 3,798,200 4,597,600 Other financial payables 63,171 55,818 Other non financial liabilities 1,411,446 1,254,959 Deferred tax liabilities 11,769,504 10,357,260 Total Non current liabilities 57,590,357 62,799,083 Current Liabilities Trade payables 6,544,090 4,763,259 Other financial payables 14,351,282 8,559,397 Current tax liabilities 890, ,222 Loans and borrowings 28,883,171 24,517,231 Debenture 920, ,964 Total current liabilities 51,589,744 38,440,073 Total Liabilities 109,180, ,239,156 Total Equity and Liabilities 172,507, ,405,799 Net assets per ordinary share (Rs.) I certify that these financial statements are in compliance with the requirements of Companies Act No. 07 of Sgd. A.P. Weeratunge Director - Finance Carsons Management Services (Pvt) Ltd. The Board of Directors is responsible for the preparation and presentation of these financial statements. These financial statements were approved by the Board on 8th February Sgd. sgd. H. Selvanathan M. Selvanathan Chairman Director The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements 8th February 2016 Bukit Darah PLC

17 15 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) Stated Capital Capital Reserves Revenue Reserves Attributable to owners of the company Non - controlling interest Total Equity Balance as at 31st March 2015 (Audited) 412,635 2,202,190 25,496,864 28,111,689 35,065,642 63,177,331 Change relating to Super gain tax (Note 11) - - (165,206) (165,206) (348,156) (513,362) Profit for the period , ,641 2,140,444 2,752,085 Other comprehensive expenses for the period - - (745,015) (745,015) (631,489) (1,376,504) Total comprehensive expenses for the period - - (133,374) (133,374) 1,508,955 1,375,581 Transaction with owners of the Company, recognised directly in equity Goodwill on change in shareholdings - - (28,970) (28,970) (22,891) (51,861) Scrip/share/units Issue by Subsidiaries ,104 91,104 Dividend paid - Participating Cumulative Preference Shares - - (44,165) (44,165) - (44,165) - Ordinary Shares - - (306,000) (306,000) - (306,000) Ordinary Dividend paid to Non controlling shareholders (560,214) (560,214) Movement Due to Changes in Equity - (5,041) 106, ,268 68, ,370 Total Transactions with owners of the Company - (5,041) (272,826) (277,867) (423,899) (701,766) Balance as at 31st December 2015 (Unaudited) 412,635 2,197,149 24,925,457 27,535,241 35,802,542 63,337,783 Balance as at 31st March 2014 (Audited) 412,635 2,188,938 27,676,812 30,278,385 36,190,123 66,468,508 Profit for the period - - 1,625,124 1,625,124 3,311,555 4,936,679 Other comprehensive income / (expenses) for the period - - (2,325,684) (2,325,684) (1,391,100) (3,716,784) Total comprehensive income / (expenses) for the period - - (700,560) (700,560) 1,920,455 1,219,895 Transaction with owners of the Company, recognised directly in equity Acquisition of New Subsidiaries , ,976 Goodwill on change in shareholdings - 12,890 (25,100) (12,210) (370,060) (382,270) Movement due to changes in equity (663,619) (663,619) Dividend paid - Participating Cumulative Preference Shares - - (44,165) (44,165) - (44,165) - Ordinary Shares - - (306,000) (306,000) - (306,000) Ordinary Dividend paid to Non controlling shareholders (721,836) (721,836) Total Transactions with owners of the Company - 12,890 (375,265) (362,375) (1,636,539) (1,998,914) Balance as at 31st December 2014 (Unaudited) 412,635 2,201,828 26,600,987 29,215,450 36,474,039 65,689,489 The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements For the Nine Months ended 31st December 2015

18 16 CONSOLIDATED STATEMENT OF CASH FLOW Condensed Interim Financial Statements (Amounts expressed in Sri Lankan Rs. 000) For the Nine months ended 31st December Cash Flows from Operating Activities Profit before income tax expenses 4,369,151 7,143,579 Adjustments for: Foreign exchange loss 1,053,252 1,237,774 Change in fair value of biological assets (898,572) (240,302) Unwinding of discount on compensation receivable (10,474) (9,393) Mark to market value adjustments - Unrealized (24,478) (226,126) Share of net result of Joint venture (2,233) 2,700 Depreciation on property, plant & equipment 2,596,615 2,145,579 Amortization of intangible assets/prepaid lease payment 198, ,984 Provision for retiring gratuity 240, ,665 Provision for Inventory (20,092) 55,305 Finance expenses 2,267,260 2,007,018 Negative goodwill on consolidation - (70,944) Profit on disposal of property, plant & equipment (8,864) (15,391) Profit on disposal of non current investments (23,298) - 5,367,545 5,288,869 Operating profit before working capital changes 9,736,696 12,432,448 (Increase)/decrease in inventories 433, ,334 (Increase)/decrease in trade and other receivables (2,484,331) (2,082,903) Increase/(decrease) in trade and other payables 7,550,877 (3,027,077) 15,236,887 7,434,802 Net cash movement in investment (760,733) (928,975) Cash generated from operations 14,476,154 6,505,827 Interest paid (3,406,215) (2,241,257) Income tax paid (504,744) (1,166,294) Super gain tax paid (Note 11) (513,362) - Gratuity paid (111,983) (58,316) Net cash generated from operating activities 9,939,850 3,039,960 Bukit Darah PLC

19 17 For the Nine months ended 31st December Cash Flows from Investing Activities Payments for property, plant & equipment/investment property (3,396,609) (7,598,301) Payments for biological assets (2,518,080) (3,308,098) Payments for Intangible assets/prepaid lease payments (328,690) (5,354,714) Payments for acquisition of additional interest in subsidiaries (66,232) (1,080,557) Payments for Investment in subsidiaries Companies - (1,068,738) Movement in Plasma investment (217,663) (792,742) Proceeds from disposal of long - term investments in Subsidiaries 37,601 - Proceeds from disposal of property, plant & equipment 164,347 34,763 Deposits received 104,729 54,541 Net cash used in investing activities (6,220,597) (19,113,846) Cash Flows from Financing Activities Proceeds from long - term loans 1,783,708 13,919,038 Payment of borrowings /debenture (8,488,995) (5,630,067) Payment of finance lease creditors (147,670) (57,856) Dividend paid to non -controlling shareholders by subsidiaries (476,892) (721,836) Dividend paid by the Company (247,751) (247,759) Net cash generated from/(used in) financing activities (7,577,600) 7,261,520 Net decrease in cash & cash equivalents (3,858,347) (8,812,366) Cash & cash equivalents at the beginning of the year (8,097,671) (1,192,872) Cash & cash equivalents at the end of the period (11,956,018) (10,005,238) Statement of Cash & Cash Equivalents Cash and cash equivalents 6,953,938 6,857,366 6,953,938 6,857,366 Short term borrowings (18,909,956) (16,862,604) (11,956,018) (10,005,238) The above figures are subject to audit. The notes on pages 18 to 30 form an integral part of these financial statements For the Nine Months ended 31st December 2015

20 18 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS Operating Segment Information - Group Operating Segmental Information - For the quarter ended 31st December - Group (Amounts expressed in Sri Lankan Rs. 000) Portfolio & Asset Business Segment Investment Holdings Management Oil Palm Plantations Oils and fats Total revenue 1,036 93, , ,444 4,597,213 7,361,132 7,512,569 7,215,143 Intra segment revenue - (89,707) (21,269) (16,150) (195,731) (1,114,042) (346,253) (56,799) Segment revenue 1,036 3, , ,294 4,401,482 6,247,090 7,166,316 7,158,344 Inter segment revenue - (285) - (1) (81,599) - (105,017) (70,959) Revenue 1,036 3, , ,293 4,319,883 6,247,090 7,061,299 7,087,385 Segment results (27,668) (18,590) 110, , ,310 1,849,687 (147,868) 121,203 Changes in fair value of biological assets ,661,410 (232,818) - - Foreign Exchange gain / (losses) ,667,439 (130,423) (9,252) (20,881) Profits from operations (27,668) (18,590) 110, ,124 3,496,159 1,486,446 (157,120) 100,322 Net finance cost (22,844) (14,203) (12,565) 152 (255,175) (586,754) (129,666) (160,094) Share of net results of Joint venture (803) Profit/ (loss) before taxation (50,512) (32,793) 98, ,473 3,240, ,692 (286,786) (59,772) Income tax expenses Current taxation (776) (4,295) (6,492) (11,645) (306,044) (119,198) (2,663) 272 Deferred taxation (610,936) (179,506) 25,761 (63,418) (776) (4,295) (6,492) (11,645) (916,980) (298,704) 23,098 (63,146) Profit/ (loss) for the period (51,288) (37,088) 92, ,828 2,324, ,988 (263,688) (122,918) Attributable to Owners of the Company (27,069) (14,435) 24, ,331 1,280, ,237 (162,132) (77,778) Non controlling interest (24,219) (22,653) 68, ,497 1,043, ,751 (101,556) (45,140) (51,288) (37,088) 92, ,828 2,324, ,988 (263,688) (122,918) Bukit Darah PLC

21 19 Beverage Real Estate Leisure Management Services Group ,820,882 8,609,989 58,150 52, , , ,100 75,452 21,485,224 24,047,018 (24,210) (39,708) (587,463) (1,316,406) 8,796,672 8,570,281 58,150 52, , , ,100 75,452 20,897,761 22,730, (4,698) (4,284) - - (114,757) (75,089) (306,070) (150,618) 8,796,672 8,570,281 53,452 47, , , ,591,691 22,579, ,139 1,018,457 28,570 28,073 33,934 17,467 14,167 (8,858) 1,175,174 3,474, ,661,410 (232,818) 23,270 (12,478) ,681,529 (163,665) 1,019,409 1,005,979 28,570 28,073 33,934 17,467 14,167 (8,858) 4,518,113 3,077,963 (236,391) (171,602) (847) (829) 2,907 13, (654,573) (919,824) (803) 783, ,377 27,723 27,244 36,841 30,960 14,175 (8,845) 3,864,027 2,157,336 (153,925) (249,870) (5,090) (3,052) (2,732) (533) - - (477,722) (388,321) (199,797) (68,473) (3,360) (7,911) (1,458) (3,982) - - (789,790) (323,290) (353,722) (318,343) (8,450) (10,963) (4,190) (4,515) - - (1,267,512) (711,611) 429, ,034 19,273 16,281 32,651 26,445 14,175 (8,845) 2,596,515 1,445,725 94, ,960 8,026 6,866 13,889 12,232 6,475 (4,040) 1,238, , , ,074 11,247 9,415 18,762 14,213 7,700 (4,805) 1,357, , , ,034 19,273 16,281 32,651 26,445 14,175 (8,845) 2,596,515 1,445,725 For the Nine Months ended 31st December 2015

22 20 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS CONTD. Operating Segment Information - Group Operating Segmental Information For the Nine Months ended 31st December - Group (Amounts expressed in Sri Lankan Rs. 000) Portfolio & Asset Business Segment Investment Holdings Management Oil Palm Plantations Oils and fats Total revenue 703,365 1,275,411 1,208,298 1,861,965 16,187,469 23,315,177 21,640,789 21,680,592 Intra segment revenue (179,412) (269,119) (143,182) (62,992) (1,591,738) (4,914,701) (461,067) (154,195) Segment revenue 523,953 1,006,292 1,065,116 1,798,973 14,595,731 18,400,476 21,179,722 21,526,397 Inter segment revenue (493,138) (995,751) (62,001) (62,079) (81,599) - (248,296) (261,571) Revenue 30,815 10,541 1,003,115 1,736,894 14,514,132 18,400,476 20,931,426 21,264,826 Segment results (38,813) (42,777) 844,123 1,822,599 2,505,378 5,806,352 (60,135) (319,572) Changes in fair value of biological assets , , Foreign Exchange gain / (losses) (897,639) (1,088,842) (159,790) (126,238) Profits from operations (38,813) (42,777) 844,181 1,822,705 2,506,311 4,957,812 (219,925) (445,810) Net finance cost (58,249) (45,886) (17,033) 393 (1,057,663) (1,185,064) (384,727) (364,224) Share of net results of Joint venture - - 2,233 (2,700) Profit/ (loss) before taxation (97,062) (88,663) 829,381 1,820,398 1,448,648 3,772,748 (604,652) (810,034) Income tax expenses Current taxation (5,355) (6,568) (24,383) (39,097) (672,921) (1,143,976) (3,406) (1,346) Deferred taxation ,970 (159,364) 13,626 10,180 (5,355) (6,568) (24,383) (39,097) (609,951) (1,303,340) 10,220 8,834 Profit/ (loss) for the period (102,417) (95,231) 804,998 1,781, ,697 2,469,408 (594,432) (801,200) Attributable to: Owners of the Company (56,278) (44,153) 209, , ,426 1,321,965 (368,578) (492,412) Non controlling interest (46,139) (51,078) 595,328 1,337, ,271 1,147,443 (225,854) (308,788) (102,417) (95,231) 804,998 1,781, ,697 2,469,408 (594,432) (801,200) Bukit Darah PLC

23 21 Beverage Real Estate Leisure Management Services Group ,390,808 23,173, , , , , , ,286 68,998,128 72,067,913 (245,822) (265,382) (2,621,221) (5,666,389) 28,144,986 22,907, , , , , , ,286 66,376,907 66,401, (14,094) (12,500) - - (276,194) (223,815) (1,175,322) (1,555,716) 28,144,986 22,907, , , , ,125 1,930 1,471 65,201,585 64,845,808 3,418,948 2,741, ,370 96,637 63,356 69,519 (48,369) (23,255) 6,788,858 10,150, , ,302 4,119 (22,800) (1,053,252) (1,237,774) 3,423,067 2,718, ,370 96,637 63,356 69,519 (48,369) (23,255) 6,634,178 9,153,297 (763,154) (423,169) (2,366) (2,412) 15,837 13, (2,267,260) (2,007,018) ,233 (2,700) 2,659,913 2,295, ,004 94,225 79,193 82,815 (48,274) (23,207) 4,369,151 7,143,579 (425,277) (654,786) (18,596) (16,241) (6,199) (7,026) - - (1,156,137) (1,869,040) (525,779) (173,201) (8,305) (11,327) (3,441) (4,148) - - (460,929) (337,860) (951,056) (827,987) (26,901) (27,568) (9,640) (11,174) - - (1,617,066) (2,206,900) 1,708,857 1,467,310 75,103 66,657 69,553 71,641 (48,274) (23,207) 2,752,085 4,936, , ,755 31,272 27,686 30,432 32,061 (22,050) (10,601) 611,641 1,625,124 1,322,110 1,120,555 43,831 38,971 39,121 39,580 (26,224) (12,606) 2,140,444 3,311,555 1,708,857 1,467,310 75,103 66,657 69,553 71,641 (48,274) (23,207) 2,752,085 4,936,679 For the Nine Months ended 31st December 2015

24 22 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS CONTD. Operating Segment Information - Group (b) Segments Assets/ liabilities are as follows: (Amounts expressed in Sri Lankan Rs. 000) Investment Holding Portfolio & Asset Management Oil Palm Plantations Oils & Fats As at SEGMENT ASSETS Non - Current Assets Fixed assets** - - 8,529 8,517 90,799,263 83,878,547 8,640,482 9,288,800 Intangible assets ,791 84, , ,294 1,929,059 1,885,909 Available-for-sale financial assets/joint venture 51,882 51,882 9,223,882 9,067, Deferred tax assets ,719,865 2,756, Other receivables ,465,140 2,841, Total non - current assets 51,882 51,882 9,317,202 9,160,345 98,613,893 90,124,367 10,569,541 11,174,709 Current Assets Inventories ,367,468 1,831,520 2,654,128 2,991,599 Trade debtors and other receivables 12,724 9,183 69, ,988 4,469,330 4,103,322 5,332,262 3,678,671 Financial assets held for trading 24, ,361 3,027,191 2,684, ,434 5,311 Cash and cash equivalents 71, ,472 1,488,434 1,786, ,623 4,092,321 67, ,514 Total current assets 108, ,016 4,584,909 4,731,730 6,336,421 10,027,163 8,059,761 7,290,095 Total segmental assets 160, ,898 13,902,111 13,892, ,950, ,151,530 18,629,302 18,464,804 SEGMENT LIABILITIES Non - Current Liabilities Loans and borrowings ,845,675 38,871,451 3,665,808 4,494,633 Other liabilities - - 8,855 10,034 1,222,743 1,076,527 9,207 8,203 Deferred tax liabilities ,622,853 7,648, , ,475 Total non - current liabilities - - 8,855 10,034 44,691,271 47,596,485 4,022,861 4,950,311 Current Liabilities Trade and other payables 224, , , ,565 12,484,481 6,804,913 5,639,012 2,835,804 Loans and borrowings 1,256,800 1,061,717 25,378 2,556 12,422,191 10,496,733 6,264,279 7,004,767 Total current liabilities 1,480,925 1,266, , ,121 24,906,672 17,301,646 11,903,291 9,840,571 Total segmental liabilities 1,480,925 1,266, , ,155 69,597,943 64,898,131 15,926,152 14,790,882 ** Fixed assets include, Property Plant & Equipments, Biological Assets, Leasehold land rights & Investment properties. Bukit Darah PLC

25 23 Beverage Real Estate Leisure Management Services Group ,214,776 14,930,708 2,697,165 2,678,174 1,232,924 1,188,693 57,279 82, ,650, ,055,761 4,321,625 4,358,564 12,799 12, ,545 1,761 6,979,444 6,991, ,275,764 9,118, ,719,865 2,756, , , ,598,156 2,964,383 19,536,401 19,289,272 2,709,964 2,690,973 1,365,940 1,311,238 58,824 84, ,223, ,886,869 3,189,986 2,828, ,762 13, ,231,432 7,665,077 2,897,244 2,665,163 86,436 69,991 51,146 50,411 46,669 48,105 12,965,095 10,885, , ,133,084 2,822,368 4,656,088 2,326,081 12,275 28, , ,765 54,894 32,514 6,953,938 9,145,650 10,743,318 7,820,049 98,711 98, , , ,651 80,712 30,283,549 30,518,930 30,279,719 27,109,321 2,808,675 2,789,901 1,615,872 1,511, , , ,507, ,405,799 5,834,753 7,764, ,346,236 51,131, , ,642 66,957 61,056 14,516 12,495 44,319 39,820 1,474,617 1,310,777 2,600,159 2,074, , ,341 38,000 34, ,769,504 10,357,260 8,542,932 9,941, , ,397 52,516 47,054 44,319 39,820 57,590,357 62,799,083 2,960,257 3,032, , , ,249 93,665 45,973 59,844 21,786,328 13,590,878 9,834,768 6,283, ,803,416 24,849,195 12,795,025 9,315, , , ,249 93,665 45,973 59,844 51,589,744 38,440,073 21,337,957 19,257, , , , ,719 90,292 99, ,180, ,239,156 For the Nine Months ended 31st December 2015

26 24 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS CONTD. (Amounts expressed in Sri Lankan Rs. 000) 1. Reporting Entity Bukit Darah PLC is a limited liability company which is incorporated in Sri Lanka. The ordinary shares of the Company have a primary listing on the Colombo Stock Exchange. The Group is a diversified conglomerate and one of the foremost business establishments in Sri Lanka backed by a heritage of well over 100 years. Today it is positioned as a company whose outlook is regional, focused on a future which is technology-oriented, results driven and world class. The businesses range from oil palm plantations in Malaysia and Indonesia, palm oil refining in Malaysia and India to breweries, investment holdings, portfolio & assets management, real estate and leisure in Sri Lanka. The Group has offices in Malaysia, Singapore, Indonesia and India. There were no significant changes in the nature of the principal activities of the Company and the Group during the financial period under review. 2. Basis of Preparation of Interim Condensed Financial Statements These Interim Financial Statement of the Company and the Group have been prepared based on the Sri Lanka Accounting Standards LKAS 34 -Interim Financial reporting. There were no changes to the Accounting Policies and methods of computation since the publication of the Annual Report Previous year figures and phrases have been re-arranged wherever necessary to conform to the current presentation. 3. Segmental Information For management purposes the Group s primary format segment reporting is Industry segments. The risks and returns of the Group s operations are primarily determined by the nature of the different activities that the Group engages in, rather than the geographical location of these operations. This is reflected by the Group s organizational structure. Industry segment activities of the Group have been broadly classified into eight segments: Investment Holdings, Portfolio and Asset Management, Oil Palm Plantations, Beverage, Real-Estate, Leisure, Oils & fats and Management Services according to the nature of product or service rendered. The principal product and services of each segments are follows. Investment Holdings - Holding of Strategic Investment Portfolio Management - Investment and management of listed, private equity, fixed income and unit trust investments Oil Palm Plantations Beverage Real Estate Leisure - Production and sale of palm oil, palm kernel and fresh fruit bunches to the local and international market - Production and sale of Beer, Import & distribution of alcoholic beverages - Letting office and warehouse premises on rent for commercial purposes - Hoteliering Bukit Darah PLC

27 25 Oils & Fats - Manufacturing, marketing and selling of refined oils and specialty fats to the bakery, chocolate and confectionery ice creams and creamer industries and cooking oil products to end consumers Management Services - Providing support services to the Group Companies. Sales between segments are made at prices that approximate the market prices. Segment revenue, segment expenses and segment results include transactions between industry segments. These transactions and any unrealized profits and losses are eliminated on consolidation. Segmental expenses are expenses that are directly attributed to a relevant segment or a portion of expenses that can be allocated on a reasonable basis as determined by the Management. 4 Exchange Rates The results and net assets of the Group, as reported in Sri Lankan Rupees, are affected by movements in exchange rates between Sri Lankan Rupees and operational currencies of overseas subsidiaries. Bukit Darah PLC uses the average of exchange rates prevailing during the period to translate the results and cash flows of overseas Group subsidiaries and associates into Sri Lankan Rupees, and period end rates to translate the net assets of those undertakings. The currencies which most influence these translations, and the relevant exchange rates, are: Nine months Nine months Six months First Quarter Year ended ended ended ended ended Rs. Rs. Rs. Rs. Rs. Average rates: Malaysian Ringgit US Dollar Indonesian Rupiah (Rp) Indian Rupee Period-end rates: Malaysian Ringgit US Dollar Indonesian Rupiah (Rp) Indian Rupee For the Nine Months ended 31st December 2015

28 26 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS CONTD. (Amounts expressed in Sri Lankan Rs. 000) 5 Biological assets Biological valuation of Indonesian plantations The fair value of biological assets was determined by KJPP Rengganis, Hamid & Partners an Indonesian independent valuer. The valuations of the biological assets were performed in accordance with International Valuation Standards and Indonesian valuation standards ( Standard Penilaian Indonesia /SPI) using discounted cash flows of the underlying biological assets. The expected cash flows from the whole life cycle of the oil palm plantations are determined using the market price and the estimated yield of FFB, net of maintenance and harvesting costs and any costs required to bring the oil palm plantations to maturity. The estimated yield of the oil palm plantations is dependent on the age of the oil palm trees, the location of the plantations, soil type and infrastructure. The market price of the FFB is largely dependent on the prevailing market prices of crude palm oil and palm kernel. Point-of-sale costs include all costs that would be necessary to sell the assets. The following table shows the key unobservable inputs used in valuation models. Key unobservable inputs Oil palm trees have an average life of 22 (31st March 2015: 22) years, with the first three years as immature and remaining years as mature No new planting or replanting activities are assumed Discount rate per annum of Indonesian plantation 13.85% (31st March %) and Malaysian Plantation 8.67% (31st March %) FFB selling price Indonesian Plantation of US$ 93 to US$ 98 (31st March 2015: US$ US$ 121) per metric tonne FFB selling price Malaysian Plantation of US$ 117 (31st March 2015: US$ 137) per metric tonne Yield per hectare of Indonesian Plantation of 4 MT to 29 MT (31st March MT to MT) and Malaysian Plantations 7 MT to 35 MT (31st March MT to 29 MT) Inter relationship between key unobservable inputs and fair value measurement The estimated fair value increases as the estimated average life increases. The estimated fair value decreases with replanting activities. The estimated fair value increases as the estimated discount rate per annum decreases. The estimated fair value increases as the estimated selling price of FFB increases. The estimated fair value increases as the average yield per hectare increases. Bukit Darah PLC

29 27 6 Foreign Exchange losses The foreign exchange loss relates to the assets, liabilities, income and expenses of the Goodhope Asia Holdings limited and its subsidiaries whose transactions and balances are recorded in different currencies other than reporting currency of each such subsidiary. For the nine months period ended 31st December 2015, the Goodhope Asia Holding Limited group recorded a foreign exchange loss of US$ 8.28Mn. This includes realized exchange loss of US$ 0.28 Mn and unrealized exchange loss of US$ 8 Mn. The unrealized exchange loss mainly arose from the translation of foreign currency denominated long term borrowings as at the balance sheet date consequent to a significant depreciation of the Indonesian rupiah (IDR) against the US dollar (USD) during the nine months period ended 31st December The closing exchange rate of IDR against USD as at 31st December, 2015 was IDR 13,795 which is a 5.4% depreciation compared to the closing exchange rate that prevailed as at 31 March, Dividend Per Share Total dividend Dividend per share (Rs 000) (Rs 000) Rs Rs On ordinary shares Paid for , , , , On preference shares Annual dividend Paid for ,058 44, ,165 44, Total 350, ,165 8 Intangible assets Total as at Total as at Customer 31st December 31st March Goodwill Relationship Trade Mark Cost Balance at beginning of period 1,736, ,882 4,000,000 6,301,983 2,301,983 Acquisition/ addition through business combinations ,000,000 1,736, ,882 4,000,000 6,301,983 6,301,983 Impairment losses Balance at beginning of period - 212, , ,618 Amortization - 42,441-42,441 56, , , ,206 1,736, ,235 4,000,000 6,047,336 6,089,777 For the Nine Months ended 31st December 2015