Interim Financial Statements 30 th September 2017
CONSOLIDATED INCOME STATEMENT Quarter ended 30th September Six months ended 30th september For the six months ended 30th September 2017 2016 Change % 2017 2016 Change % Revenue 198,251 150,002 32 413,091 297,039 39 Cost of sales (71,373) (57,852) 23 (132,094) (104,386) 27 Gross profit 126,878 92,150 38 280,997 192,653 46 Other operating income 79 23 248 3,809 243 1,467 Distribution expenses (2,669) 3,446 (177) (5,609) 2,755 (304) Administrative expenses (57,052) (58,519) (3) (118,276) (109,277) 8 Results from operating activities 67,236 37,100 81 160,921 86,374 86 Finance costs (20,568) (14,460) 42 (44,919) (30,493) 47 Finance income 9,540 6,121 56 25,546 30,886 (17) Net finance (costs) / income (11,028) (8,339) 32 (19,373) 393 (5,030) Share of results of equity-accounted investees 573 1,703 (66) 1,123 2,328 (52) Profit before tax 56,781 30,463 86 142,671 89,095 60 Tax expense (9,418) (11,117) (15) (34,428) (24,150) 43 Profit for the period 47,363 19,346 145 108,243 64,945 67 Attributable to : Equity holders of the parent 47,287 20,885 126 107,063 66,866 60 Non-controlling interests 76 (1,539) (105) 1,180 (1,921) (161) 47,363 19,346 145 108,243 64,945 67 Earnings per share Rs. Rs. Rs. Basic 0.78 0.34 1.76 1.10 Dividend per share - - 2.00 1.00 1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarter ended 30th September Six months ended 30th September For the six months ended 30th September 2017 2016 2017 2016 Profit for the period 47,363 19,346 108,243 64,945 Other comprehensive income Share of other comprehensive income of equity-accounted investees - (1,084) - (1,216) Net (loss)/gain on available-for-sale financial assets (11,579) 19,556 (23,416) (15,954) Other comprehensive income for the period, net of tax (11,579) 18,472 (23,416) (17,170) Total comprehensive income for the period, net of tax 35,784 37,818 84,827 47,775 Attributable to : Equity holders of the parent 35,708 39,357 83,647 49,696 Non-controlling interests 76 (1,539) 1,180 (1,921) 35,784 37,818 84,827 47,775 2
CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30th September 2017 2016 As at 31.03.2017 ASSETS Non-current assets Property, plant and equipment 324,439 329,567 321,237 Lease rentals paid in advance 37,479 38,569 38,024 Investment property 227,750 182,420 227,750 Intangible assets - 339 92 Equity accounted investments 100,538 97,244 99,632 Other non-current financial assets 2,332,230 2,520,166 2,408,119 Other non-current assets 6,329 4,314 6,636 Deferred tax assets 30,445 26,837 29,118 3,059,210 3,199,456 3,130,608 Current assets Inventories 500 572 456 Trade and other receivables 1,405,091 1,075,946 2,061,480 Amounts due from related parties 1,997 4,373 30,155 Income Tax Refunds - 1,401 1,489 Short Term Investment 226,968 310,170 221,030 Other current assets 17,759 4,433 5,140 Cash in hand and at bank 178,647 201,959 175,234 1,830,962 1,598,854 2,494,984 Total assets 4,890,172 4,798,310 5,625,592 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 152,000 152,000 152,000 Revenue reserves 2,722,166 2,608,672 2,736,703 Other components of equity 500,942 553,494 514,270 3,375,108 3,314,166 3,402,973 Non-controlling interests 36,352 23,069 33,781 Total equity 3,411,460 3,337,235 3,436,754 Non-current liabilities Deferred tax liabilities 35,473 34,836 35,060 Employee benefit liabilities 70,359 65,023 65,363 105,832 99,859 100,423 Current liabilities Trade and other payables 584,437 735,769 1,379,257 Amounts due to related parties 3,458 3,023 3,153 Income tax payable 32,345 4,898 30,303 Short term borrowings - - - Other current liabilities 2,318 1,785 2,125 Bank overdrafts 750,322 615,741 673,577 1,372,880 1,361,216 2,088,415 Total equity and liabilities 4,890,172 4,798,310 5,625,592 Rs. Rs. Rs. Net assets per share 55.51 54.51 55.97 I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007. P.A.P.Perera Sector Financial Controller The Board of Directors is responsible for the preparation and presentation of these financial statements. 27 th October, 2017 A.D.Gunewardene Director J. R. F. Peiris Director 3
CONSOLIDATED CASH FLOW STATEMENT For the six months ended 30th September Note 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES Profit before working capital changes A 185,553 114,014 (Increase) / Decrease in inventories (44) (88) (Increase) / Decrease in amounts due from Related Parties 28,158 (1,738) (Increase) / Decrease in trade and other receivables 656,389 413,899 (Increase) / Decrease in other current assets (12,619) (403) (Increase) / Decrease in other non-current assets 56,643 (99,378) Increase / (Decrease) in trade and other payables (794,820) (142,240) Increase / (Decrease) in amounts Due to Related Parties 305 202 Increase / (Decrease) in other current liabilities 193 (3,227) Cash generated from operations 119,758 281,041 Finance income received 18,598 12,359 Finance costs paid (44,919) (30,493) Dividend received 6,948 19,689 Tax paid (31,197) (5,328) Gratuity (paid)/ transfers In (131) (12,238) Net cash flow Used in operating activities 69,057 265,030 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (14,851) (1,256) Proceeds from sale of property, plant and equipment - - Net cash flow used in investing activities (14,851) (1,256) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Dividend paid to equity holders of parent (121,600) (60,800) Dividend paid to shareholders with non-controlling interest - (180) Proceeds from Short Term borrowings - - Repayment of long term borrowings - - Net cash flow used in financing activities (121,600) (60,980) NET DECREASE IN CASH AND CASH EQUIVALENTS (67,394) 202,794 CASH AND CASH EQUIVALENTS AT THE BEGINNING (277,313) (306,406) CASH AND CASH EQUIVALENTS AT THE END (344,707) (103,612) ANALYSIS OF CASH AND CASH EQUIVALENTS Favourable balances Short term investments 226,968 310,170 Cash in hand and at bank 178,647 201,959 405,615 512,129 Unfavourable balances Bank overdrafts (750,322) (615,741) Cash and cash equivalents (344,707) (103,612) 4
CONSOLIDATED CASH FLOW STATEMENT For the six months ended 30th September 2017 2016 A. Profit before working capital changes Profit before tax 142,671 89,095 Adjustments for: Finance income (18,598) (12,359) Finance costs 44,919 30,493 Dividend income (6,948) (19,689) Share of results of equity-accounted investees (1,123) (2,328) Depreciation of property, plant and equipment 11,703 11,297 (Profit) / loss on sale of property, plant and equipment and intangible assets (3,677) (63) Share base payment expenses 11,479 12,872 Gratuity provision and related costs 5,127 4,696 185,553 114,014 5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 6 Attributable to equity holders of parent Other Components of Equity Stated Revenue Revaluation Available Other Total Non-controlling Total Capital Reserves Reserves for sale capital interest Equity Reserve Reserves As at 1 April 2016 152,000 2,602,606 188,996 304,060 64,736 3,312,398 23,820 3,336,218 Profit for the period - 66,866 - - 66,866 (1,921) 64,945 Other comprehensive income - - - (17,170) - (17,170) - (17,170) Total comprehensive income - 66,866 - (17,170) - 49,696 (1,921) 47,775 Exercise Share base of payment share option expenses 12,872 12,872 1,350 14,222 Final dividend paid - 2015/16 - (60,800) - - (60,800) - (60,800) Subsidiary dividend to non-controlling interest - - - (180) (180) As at 30 September 2016 152,000 2,608,672 188,996 286,890 77,608 3,314,165 23,069 3,337,235 As at 1 April 2017 152,000 2,736,703 188,996 238,514 86,760 3,402,973 33,781 3,436,754 Profit for the period - 107,063 - - 107,063 1,180 108,243 Other comprehensive income - - - (23,416) (23,416) (23,416) Total comprehensive income - 107,063 - (23,416) 83,647 1,180 84,827 Share base payment expenses 10,088 10,088 1,391 11,479 Final dividend paid - 2016/17 - (121,600) - - (121,600) - (121,600) Subsidiary dividend to non-controlling interest - - - - - - - Subsidiary dividend to non-controlling interest As at 30 September 2017 152,000 2,722,166 188,996 215,098 96,848 3,375,108 36,352 3,411,460
COMPANY INCOME STATEMENT Quarter ended 30th September Six months ended 30th September For the Six months ended 30th September 2017 2016 Change % 2017 2016 Change % Revenue 130,927 98,648 33 273,051 196,346 39 Cost of sales (40,311) (35,344) 14 (71,703) (56,096) 28 Gross profit 90,616 63,304 43 201,348 140,250 44 Dividend income 6,750 1,162 481 13,698 20,202 (32) Other operating income (10) 13 (177) 3,534 13 27,085 Distribution expenses (2,271) 3,907 (158) (4,182) 3,670 (214) Administrative expenses (25,821) (24,392) 6 (52,473) (51,624) 2 Results from operating activities 69,264 43,994 57 161,925 112,511 44 Finance costs (20,437) (14,454) 41 (44,609) (30,486) 46 Finance income 2,150 1,709 26 4,039 3,288 23 Net Finanace Costs (18,287) (12,745) 43 (40,570) (27,198) 49 Profit before tax 50,977 31,249 63 121,355 85,313 42 Tax expense (6,671) (9,838) (32) (27,194) (21,625) 26 Profit for the period 44,306 21,412 107 94,161 63,688 48 Rs. Rs. Dividend per share - - 2.00 1.00 7
COMPANY STATEMENT OF COMPREHENSIVE INCOME Quarter ended 30th September Six months ended 30th September For the six months ended 30th September 2017 2016 2017 2016 Profit for the period 44,306 21,412 94,161 63,688 Other comprehensive income Net (loss)/gain on available-for-sale financial assets (11,579) 19,556 (23,416) (15,954) Other comprehensive income for the period, net of tax (11,579) 19,556 (23,416) (15,954) Total comprehensive income for the period, net of tax 32,727 40,968 70,745 47,734 8
COMPANY STATEMENT OF FINANCIAL POSITION As at 30th September 2017 2016 As at 31.03.2017 ASSETS Non-current assets Property, plant and equipment 26,732 20,390 18,162 Investment property 227,750 182,420 227,750 Investment In Subsidiaries 158,570 120,380 158,570 Equity accounted investments 24,000 24,000 24,000 Other non-current financial assets Other non-current assets 2,321,918 4,701 2,510,818 3,095 2,397,665 5,082 Deferred tax assets 16,703 18,788 15,380 2,780,374 2,879,891 2,846,609 Current assets Inventories 268 391 332 Trade and other receivables 1,282,501 946,725 1,268,496 Amounts due from related parties Income Tax Refunds 1,905-4,291-4,314 - Other current assets 1,354 586 1,992 Cash in hand and at bank 146,577 167,155 158,633 1,432,605 1,119,148 1,433,767 Total assets 4,212,979 3,999,039 4,280,376 EQUITY AND LIABILITIES Stated capital 152,000 152,000 152,000 Revenue reserves 2,552,178 2,455,039 2,579,617 Other components of equity 278,110 339,145 296,305 Total equity 2,982,288 2,946,184 3,027,922 Non-current liabilities Employee benefit liabilities 34,223 32,782 31,833 34,223 32,782 31,833 Current liabilities Trade and other payables 417,645 432,843 509,026 Amounts due to related parties 5,433 5,843 8,471 Income Tax Payable 29,755 4,229 1,707 Other current liabilities 1,141 768 29,050 Short term borrowings - - - Bank overdrafts 742,494 576,390 672,367 1,196,468 1,020,073 1,220,621 Total equity and liabilities 4,212,979 3,999,039 4,280,376 Rs. Rs. Rs. Net assets per share 49.05 48.46 49.80 I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007. P.A.P.Perera Sector Financial Controller The Board of Directors is responsible for the preparation and presentation of these financial statements. 27 th October, 2017 A.D.Gunewardene Director J. R. F. Peiris Director 9
COMPANY CASH FLOW STATEMENT For the six months ended 30th September 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 121,355 85,313 Adjustments for: Finance income (4,039) (3,288) Dividend income (13,698) (20,202) Finance costs 44,609 30,486 Depreciation of Property, plant and equipment 4,780 3,821 Profit on sale of property, plant and equipment (3,534) (13) Gratuity provision and related costs 2,390 2,784 Share base payment expenses 5,221 6,833 Profit before working capital changes 157,084 105,734 (Increase) / Decrease in inventories 64 (47) (Increase) / Decrease in trade and other receivables (14,005) 322,570 (Increase) / Decrease in other non-current assets 56,452 (104,685) (Increase) / Decrease in amounts due from Related Parties 2,409 (1,591) (Increase) / Decrease in other current assets 638 469 Increase / (Decrease) in amounts Due to Related Parties (3,038) 41 Increase / (Decrease) in Other Current Liabilities (566) (444) Increase / (Decrease) in trade and other payables (91,381) (87,623) Cash generated from / (used in) operations 107,657 234,424 Finance income received 4,039 3,288 Finance expenses paid (44,609) (30,486) Dividend received 13,698 20,202 Tax paid (27,979) (736) Gratuity (paid)/ Transfers in - (12,387) Net cash flow from operating activities 52,806 214,305 CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (13,389) (348) Net cash flow used in investing activities (13,389) (348) CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Dividend paid (121,600) (60,800) Proceeds from Short Term borrowings - - Net cash flow used in financing activities (121,600) (60,800) NET DECREASE IN CASH AND CASH EQUIVALENTS (82,183) 153,157 CASH AND CASH EQUIVALENTS AT THE BEGINNING (513,734) (562,392) CASH AND CASH EQUIVALENTS AT THE END (595,917) (409,235) ANALYSIS OF CASH & CASH EQUIVALENTS Favourable balances Cash in hand & at bank 146,577 167,155 Unfavourable balances Bank overdrafts (742,494) (576,390) (595,917) (409,235) 10
COMPANY STATEMENT OF CHANGES IN EQUITY Other Components of Equity Stated Revenue Available Other Total capital Reserves for sale Capital Equity Reserve Reserves As at 1 April 2016 152,000 2,452,151 302,844 45,422 2,952,417 Profit for the period - 63,688 - - 63,688 Other comprehensive income - - (15,954) - (15,954) Total comprehensive income - 63,688 (15,954) - 47,734 Share base payment expenses - 6,833 6,833 Final dividend paid - 2015/16 - (60,800) - - (60,800) As at 30 September 2016 152,000 2,455,039 286,890 52,255 2,946,184 As at 1 April 2017 152,000 2,579,617 238,514 57,791 3,027,922 Profit for the period - 94,161 - - 94,161 Other comprehensive income - - (23,416) - (23,416) Total comprehensive income - 94,161 (23,416) - 70,745 Share base payment expenses - 5,221 5,221 Final dividend paid - 2016/17 - (121,600) - - (121,600) As at 30 September 2017 152,000 2,552,178 215,098 63,012 2,982,288 11
OPERATING SEGMENT INFORMATION OPERATING SEGMENTS The following tables present revenue and profit information regarding the Group's operating segments. Produce Broking Warehousing Share Broking Group Total For the three months ended 30th September 2017 2016 2017 2016 2017 2016 2017 2016 External Revenue 130,926 98,647 24,064 19,090 43,261 32,265 198,251 150,002 Inter segment revenue - 1,329 1,254 - - 1,329 1,254 Segment Revenue 130,926 98,647 25,393 20,344 43,261 32,265 199,580 151,256 Eliminations of inter segment revenue (1,329) (1,254) Net Revenue 198,251 150,002 Segment Profit / (loss) 62,512 53,376 9,255 5,643 (4,531) (21,918) 67,236 37,100 Finance expenses (20,437) (14,454) (1) (1) (130) (5) (20,568) (14,460) Finance income 2,150 1,709 1,135 657 6,255 3,755 9,540 6,121 Share of results of equity-accounted investees 573-1,703- Profit / (loss) before tax 44,225 40,631 10,389 6,299 1,594 (18,168) 56,781 30,463 Tax expense (9,418) (11,117) Profit/ (loss) for the period 47,363 19,346 12
OPERATING SEGMENT INFORMATION OPERATING SEGMENTS The following tables present revenue and profit information regarding the Group's operating segments. Produce Broking Warehousing Share Broking Group Total For the Six months ended 30th September 2017 2016 2017 2016 2017 2016 2017 2016 External Revenue 273,050 196,346 44,091 36,745 95,950 63,948 413,091 297,039 Inter segment revenue - 2,651 2,457 - - 2,651 2,457 Segment Revenue 273,050 196,346 46,742 39,202 95,950 63,948 415,742 299,496 Eliminations of inter segment revenue (2,651) (2,457) Net Revenue 413,091 297,039 Segment Profit / (loss) 148,225 92,309 15,367 10,712 (2,671) (16,647) 160,921 86,374 Finance expenses (44,609) (30,486) (1) (2) (309) (5) (44,919) (30,493) Finance income 10,986 21,815 2,135 1,140 12,425 7,931 25,546 30,886 Share of results of equity-accounted investees 1,123 2,328 - - Profit before tax 114,602 83,638 17,501 11,850 9,445 (8,721) 142,671 89,095 Tax expense (34,428) (24,150) Profit for the period 108,243 64,945 13
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 1 CORPORATE INFORMATION John Keells PLC, is a public limited company incorporated and domiciled in Sri Lanka and listed on the Colombo Stock Exchange. 2 INTERIM CONDENSED FINANCIAL STATEMENTS The financial statements for the period ended 30 September 2017, includes the Company referring to John Keells PLC. as the holding company and the Group referring to the companies whose accounts have been consolidated therein. 3 APPROVAL OF FINANCIAL STATEMENTS The interim condensed financial statements of the Group and the Company for the 6 months ended 30th September 2017 were authorised for issue by the Board of Directors on 27th October 2017. 4 BASIS OF PREPARATION The interim condensed financial statements have been prepared in compliance with Sri Lanka Accounting Standard (SLAS) LKAS 34 Interim Financial Reporting. These interim condensed financial statements should be read in conjunction with the annual financial statements for the year ended 31 st March 2017. The presentation and classification of the financial statements of the previous year have been amended, where relevent, for better presentation and to be comparable with those of the current year. The interim condensed financial statements are presented in Sri Lankan Rupees and all values are rounded to the nearest thousand except when otherwise indicated. 5 OPERATING SEGMENTS For management purposes, the group is organised into business units based on their products and services and has three reportable operating segments as follows: 5.1 Produce Broking This includes tea and rubber broking. 5.2 Warehousing This includes tea and rubber pre-auction produce warehousing. 5.3 Stock Broking This includes the stock Broking segement. 6 RELATED PARTY TRANSACTIONS Group Company For the six months ended 30 th September 2017 2016 2017 2016 Transactions with related parties Ultimate Parent (Receiving) / Rendering of services 15,496 15,482 7,636 8,500 Subsidiaries Renting of stores space for which rent is paid - - 2,651 2,457 Key management personnel (Receiving) / Rendering of services - - - - Close family members of KMP (Receiving) / Rendering of services - - - - Companies under common control Purchases of goods for a fee 415 992 415 94 Receiving of Services for which fees are paid 5,743 2,869 3,724 2,330 Lending/investing Money for which interest is received (10,142) (6,736) - (476) Renting Office space for which rent is received (844) (842) (844) (842) Providing of Services for which fees are received (14,942) (11,143) (13,755) (11,143) 14 Post employment benefit plan Contributions to the provident fund 5,729 5,323 5,729 5,323
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 7 SHARE INFORMATION 7.1 Public share holdings The percentage of shares held by the public as at 30 September 2017 was 13.10% (30 June 2017 13.10%). The number of shares held by the Public as at 30 th September 2017 was 1,235. (30 th June 2017-1,213) 7.2 Directors' share holdings The number of shares held by the Board of Directors are as follows: As at 30-09-2017 30-06-2017 S C Ratnayake Chairman Nil Nil A D Gunewardene Nil Nil J R F Peiris Nil Nil V. A. A.Perera Nil Nil A. K Gunawardhana Nil Nil C. N. Wijewardane Nil Nil B.A.I Rajakarier Nil Nil H.G.R.De Mel - CEO Nil Nil 7.3 Twenty largest shareholders of the company are as follows: As at 30-09-2017 30-06-2017 Number of shares % Number of shares % 1 John Keells Holdings Plc 52,834,784 86.90% 52,834,784 86.90% 2 H. S.D. Soysa 620,160 1.02% 620,160 1.02% 3 Bank of Ceylon No 2 a/c 338,414 0.56% 338,414 0.56% 4 Bank of Ceylon No 1 a/c 250,200 0.41% 250,200 0.41% 5 H. G. S.Ansell 240,000 0.39% 240,000 0.39% 6 Est. of Late M Radhakrishnan 232,800 0.38% 232,800 0.38% 7 M. L. De Silva 207,872 0.34% 207,872 0.34% 8 A. M. Weerasinghe 179,792 0.30% 179,792 0.30% 9 H.A.Van Starrex 174,910 0.29% 179,534 0.30% 10 Catholic Bishops Conference in Sri Lanka 171,416 0.28% 171,416 0.28% 11 Employees trust Fund Board 169,988 0.28% 169,988 0.28% 12 Waldock Mackenzie Ltd - H. S. D. Soyza 151,138 0.25% 151,138 0.25% 13 N S De Mel 137,115 0.23% 137,115 0.23% 14 N Tirimanne 133,580 0.22% 133,580 0.22% 15 Peoples; Leasing & Finance PLC/ L.P Hapangama 130,886 0.22% 130,886 0.22% 16 Waldock Mackenzie Ltd - Mrs G Soyza 130,868 0.22% 130,868 0.22% 17 F A A Mack 130,000 0.21% 121,644 0.20% 18 Sisira Investors Ltd 114,272 0.19% 114,272 0.19% 19 Com Bank-Colombo Fort Investments Ltd 112,000 0.18% 112,000 0.18% 20 Pinnacle Trust (Pvt) Ltd 110,587 0.18% 110,587 0.18% 56,570,782 93.04% 56,567,050 93.04% 7.4 Stated capital Stated capital is represented by number of shares in issue as given below: As at 30-09-2017 30-06-2017 Ordinary shares 60,800,000 60,800,000 7.5 Net assets per share Net assets per share have been calculated, for all periods, based on the number of shares in issue as at 30 September 2017. 7.6 Market price per share For the quarter ended 30 September 2017 2016 Rs. Rs. Highest 64.00 68.80 Lowest 52.80 62.00 Last traded 52.80 64.50 8 DIVIDENDS PAID A final dividend of Rs 2.00 per share for the financial year ended 31 st March 2017 was paid on 14 th June 2017. 9 CONTINGENCIES, CAPITAL AND OTHER COMMITMENTS There has been no significant change in the nature of the contingencies and other commitments, which were disclosed in the annual report for the year ended 31 March 2017 and no circumstances have arisen since the Statement of Financial Position date, which would require adjustments to or disclosure in the financial statements. 10 EVENTS AFTER THE REPORTING PERIOD. There have been no events subsequent to the reporting date. 15