UNAUDITED FINANCIAL STATEMENTS
UNAUDITED FINANCIAL STATEMENTS TABLE OF CONTENTS PAGE (S) STATEMENT OF COMPREHENSIVE INCOME 1 STATEMENT OF FINANCIAL POSITION 2 STATEMENT OF CHANGES IN EQUITY 3 STATEMENT OF CASH FLOWS 4 NOTES TO THE FINANCIAL STATEMENTS 5-10
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME Page 1 Unaudited Unaudited Unaudited Unaudited Audited Quarter Quarter Nine (9) Months Nine (9) Months Year ended ended ended ended ended ended September 30, September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2016 $ $ $ $ $ Revenue 54,462,710 52,415,313 158,186,857 143,100,757 195,896,114 Cost of Sales (17,488,699) (16,415,066) (50,298,761) (44,766,238) (62,696,769) Gross profit 36,974,011 36,000,247 107,888,096 98,334,519 133,199,345 Other operating income 5,010,254 344,109 10,870,653 1,263,433 176,771,980 Administrative and other expense (34,443,439) (29,725,486) (96,304,006) (82,996,042) (129,443,531) Profit from operations 7,540,826 6,618,870 22,454,743 16,601,910 180,527,794 Finance income - - - 155,543,853 - Finance and depreciation cost (2,476,171) (2,604,137) (10,273,186) (13,612,148) (18,377,713) Profit before taxation 5,064,655 4,014,733 12,181,557 158,533,615 162,150,081 Taxation - - - - 872,340 NET PROFIT FOR THE PERIOD FROM CONTINUED OPERATIONS 5,064,655 4,014,733 12,181,557 158,533,615 163,022,421 Net Loss from discontinued operation - (507,369) - (876,769) (1,361,547) NET PROFIT FOR THE PERIOD FROM OPERATIONS 5,064,655 3,507,364 12,181,557 157,656,846 161,660,874 Unrealized Gain on revalution of investment in subsidiary, transferred to ravaluation reserved - - - (76,216,488) - NET PROFIT FOR THE PERIOD, BEING TOTAL COMPREHENSIVE PROFIT FOR THE YEAR 5,064,655 3,507,364 12,181,557 81,440,358 161,660,874 - Number of shares 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 Profit per stock unit: 5 cents 4 cents 12 cents 81 cents 162 cents
UNAUDITED STATEMENT OF CHANGES IN EQUITY Page 3 Share capital Revaluation reserve Retained earnings Total $ $ $ Audited balances at December 31, 2015 122,903,318 - (149,781,064) (26,877,746) Total comprehensive profit for the period ended September 30, 2016 - - 157,656,846 157,656,846 Un realized - Gain on revalution of investment in subsidiary, transferred to ravaluation reserved - 76,216,488 (76,216,488) - Unaudited balances at September 30, 2016 122,903,318 76,216,488 (68,340,706) 130,779,100 Audited balances at December 31, 2016 122,903,318-11,879,810 134,783,128 Total comprehensive profit for the period ended September 30, 2017 - - 12,181,557 12,181,557 Unaudited balances at September 30, 2017 122,903,318-24,061,367 146,964,685 (9,477,476) 24,061,367-1,063
UNAUDITED STATEMENT OF CASH FLOWS Page 4 CASH FLOWS FROM OPERATING ACTIVITIES Unaudited Unaudited Audited Quarter ended Quarter ended Year ended September 30, September 30, December 31, 2017 2016 2016 $ $ $ Profit (Loss) for the period / year 12,181,557 81,440,358 161,660,874 Items not affecting cash 13,886,569 90,320,487 (59,441,174) Operating profit before changes in working capital 26,068,126 171,760,845 102,219,700 Changes in working capital: Inventories 514,370 1,170,278 1,282,780 Receivables (5,681,480) 327,399 7,844,793 Payables (9,477,476) (7,616,930) (13,383,920) Related party (9,846,886) (85,376,846) (88,051,388) Taxation (995) (740) (61,123) Net cash provided by operations 1,575,659 80,264,006 9,850,842 Cash flows from investing activities Interest received 3,959 3,140 4,670 Sale of shares - investment in subsidiary - (76,216,488) - Purchase of property, plant and equipment (455,737) (1,709,928) (2,446,215) Net cash used in by investing activities (451,778) (77,923,276) (2,441,545) Cash flows from financing activities Interest Expense (1,686,003) (1,902,613) (2,755,744) Proceeds from loans - 6,584,831 16,600,000 Loan repayment (2,697,548) (3,318,293) (13,883,499) Net cash (used in)/provided by financing activities (4,383,551) 1,363,925 (39,243) Net (decrease)/increase in cash and cash equivalents (3,259,670) 3,704,655 7,370,054 Cash and cash equivalents at beginning of period: 6,016,923 (1,353,131) (1,353,131) Cash and cash equivalents at end of period / year 2,757,253 2,351,524 6,016,923
Page 5 K.L.E. GROUP LIMITED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1. IDENTIFICATION AND PRINCIPAL ACTIVITIES K.L.E Group Limited (the "Company ") and its subsidiary (Collectively referred to as the Group) are limited liability companies incorporated and domiciled in Jamaica. The registered office of the company and its subsidiaries is Unit 6, 67 Constant Spring Road, Kingston 10, Jamaica. The Company's shares were listed on the Junior Market of the Jamaica Stock exchange on October 22, 2012. The principal activity of the Company is the provision of live entertainment. It operates a restaurant and is involved in other related activities. As at March 31, 2016 KLE Group had 49% shareholding in T and R Restaurant Systems Limited trading as Franchise Jamiaca (short Franjam). Franjam was formed to own, develop, manager and license Jamaican themed restaurants. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of preparation The interim financial statements have been prepared under the historical cost basis and are expressed in Jamaican Dollars. The Company's financial statements have been prepared in accordance and comply with International Financial Reporting Standards (IFRS). The interim financial report is to be read in conjunction with the audited financial statements for the year ended December 31, 2016. These explanatory notes attached to the interim financials statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Company since the financial year ended December 31, 2016. The significant accounting policies adopted are consistent with those of the audited financial statement for the year ended December 31, 2016.
Page 6 K.L.E. GROUP LIMITED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 3. PROPERTY, PLANT AND EQUIPMENT Leashold Furniture Security Improvements Equipment & Fixtures System Computers Total $ $ $ $ $ $ At cost: Beginning of year 72,095,270 25,945,798 45,459,263 138,293 7,544,524 151,183,148 Additions 34,000 120,402 66,299-235,037 455,737 End of period 72,129,270 26,066,199 45,525,562 138,293 7,779,561 151,638,886 Accumulated Depreciation Beginning of year 49,976,460 10,664,856 23,295,668 74,993 6,275,515 90,287,492 Charge for the period 6,703,020 1,390,676 3,050,613 10,371 1,049,845 12,204,526 End of period ### 56,679,480 12,055,533 26,346,281 85,365 7,325,360 102,492,019 Net book value end of period 15,449,790 14,010,667 19,179,280 52,929 454,200 49,146,867 End of prior year 22,118,810 15,280,942 22,163,594 63,300 1,269,010 60,895,656
Page 7 K.L.E. GROUP LIMITED NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 4. LOANS PAYABLE Unaudited Unaudited Audited Sept 30, 2017 Sept 30, 2016 December 31, 2016 $ $ $ Bank loan - Sagicor Bank Limited (i) J$16.6 Million Loan 12,083,246 15,330,831 14,780,794 Total loans 12,083,246 15,330,831 14,780,794 Classified as follows: Non-current Bank loans 8,056,281 11,909,179 11,216,928 Current Bank loan 4,026,965 3,421,652 3,563,866 Total loan payable 12,083,246 15,330,831 14,780,794
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS Page 8 5. PAYABLES Unaudited Unaudited Audited Sept 30, 2017 Sept 30, 2016 December 31, 2016 $ $ $ Trade payables 11,391,346 26,424,310 16,411,974 Statutory payables 9,852,181 11,392,088 11,352,397 Credit cards 11,979,021 12,236,142 11,214,667 GCT 10,907,033 13,391,847 14,365,998 Deferred income - 6,593,559 - Royalties payable 4,432,894 1,722,593 2,474,982 Other payables 14,452,147 1,549,546 16,672,080 63,014,622 73,310,085 72,492,098
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS Page 9 6. SEGMENT REPORTING The company has three reportable segements based on location and services that it offers. These services are described in its principal activities (Note 1). The identification of business segment is based on the management and internal reporting structure. Segement results, assets and liabilites include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Information regarding results of each reportable segement is included below. Performance is measured on segment profit before taxation as included in the management reports. Segment profit before taxation is used to measure performance as management beleives that such information is most relevant in evaluating the results of certain segments relative to other entities that operates within these industries. Unaudited Nine (9) months ended September 30, 2017 Night Club Corporate (Discontinued) Restaurant Office Total $ $ $ $ Revenues - 158,186,857 158,186,857 Segment profit/(loss) for the period before taxation - 22,936,854 (10,755,297) 12,181,556 Unaudited as at September 30, 2017 Night Club Corporate (Discontinued) Restaurant Office Total $ $ $ $ Segment assets 43,182,364 186,078,106 229,260,470 Segment liabilities - 58,545,443 23,750,341 82,295,784
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS Page 10 6. SEGMENT REPORTING (CONT'D) Unaudited Nine (9) months ended September 30, 2016 Coroprate Night Club Restaurant Office Total $ $ $ $ Revenues - 143,100,757-143,100,757 Segment (loss) / profit for the period before taxation (876,869) 17,250,409 65,066,716 81,440,256 Unaudited as at September 30, 2016 Coroprate Total Night Club Restaurant Office $ $ $ $ Segment assets 30,786,811 62,134,524 129,890,226 222,811,561 Segment liabilities - 26,311,020 65,721,442 92,032,462 Audited Year ended December 31, 2016 Night Club Coroprate (Discontinued) Restaurant Office Total $ $ $ $ Revenues - 195,896,114-195,896,114 Segment (loss) / profit for the year before taxation (1,361,547) 20,763,927 142,258,494 161,660,874 Audited as at December 31, 2016 Night Club Coroprate (Discontinued) Restaurant Office Total $ $ $ $ Segment assets - 58,525,272 169,598,228 228,123,500 Segment liabilities - 50,122,566 43,217,807 93,340,372