ENDURING THE TIMES
JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
1
CHAIRMAN’S REVIEW
Dear Stakeholder
The Group revenue at Rs.21.60 billion for the period under review is a decrease of 32 per cent over the Rs.31.74 billion recorded in the previous financial year.
The Group earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs.802 million in the first quarter of the financial year 2020/21 is a decrease of 78 per cent over the EBITDA of Rs.3.57 billion recorded in the previous financial year. EBITDA excludes the impact of exchange losses and gains on its foreign currency denominated debt and cash to demonstrate the underlying cash operational performance of the businesses.
The Group profit before tax (PBT) is a negative Rs.2.43 billion in the first quarter of the financial year 2020/21 compared to the Rs.1.36 billion recorded in the previous financial year. The profit attributable to equity holders is a negative Rs.1.66 billion compared to the Rs.994 million in the corresponding period of the previous financial year.
The Company PBT for the first quarter of 2020/21 at Rs.909 million is a decrease of 47 per cent over the Rs.1.72 billion recorded in the corresponding period of 2019/20.
As elaborated in the JKH Annual Report 2019/20, the COVID-19 pandemic was contained in Sri Lanka through the aggressive and proactive measures undertaken by the Government and the relevant authorities, including the imposition of stringent lockdown measures from March till mid-May which proved effective in curtailing the spread of the virus. A possible second wave was well managed with no restrictions in movement for the general public, where contact tracing was done proactively to identify and contain a cluster spread in July. New cases have been restricted to this cluster and health authorities have assured that there are no current indications of community transmission.
As expected, the performance in the quarter under review was significantly impacted and extremely challenging on account of the stringent lockdown measures prevailing for the first one and a half months of the quarter, with the resumption of activity commencing gradually only from mid-May onwards. Given the resultant distortion to the Group’s performance for the quarter, the
Summarised below are the key operational and financial highlights of our performance during the quarter under review:
• Post the easing of the strict lockdown measures from mid-May onwards, the underlying month-on-month performance of the Transportation, Consumer Foods, Retail and Financial Services businesses, displayed a faster than anticipated recovery momentum reaching almost pre COVID-19 levels.
• The proactive cost containment and productivity improvement measures undertaken to strengthen the Group’s financial and cash position from the beginning of the quarter, combined with the recovery momentum in business activity, enabled the Group to record cash profits despite the extremely challenging operating conditions.
• Given the faster than anticipated recovery momentum in business activity and the generation of cash profits by the Group, a first interim dividend of Rs.0.50 per share, amounting to a payout of approximately Rs.659 million, was declared to be paid on or before 28 August 2020.
• The Group’s Leisure business was significantly impacted during the quarter given the suspension of operations of our hotels in April and May on account of the closure of the airports in Sri Lanka and the Maldives and the lockdown measures in Sri Lanka. The Maldivian airport was opened for arrivals in mid-July. While bookings for the next few weeks are low, we are encouraged by strong forward bookings for the peak season of January to April 2021, exceeding the bookings we had for the same time last year. Whilst Sri Lanka is yet to re-open its airport, our hotels in Sri Lanka have now commenced operations where the recovery of domestic tourism has been encouraging.
• The Consumer Foods businesses displayed a faster than expected recovery in volumes post the easing of the lockdown in May. In the month of June, the Frozen Confectionery and Convenience Foods recorded positive volume growth whilst the Beverage business recorded a low single digit decline.
• The week-on-week momentum of same store sales of the Supermarket business displayed signs of recovery.
• The Group’s Bunkering business, Lanka Marine Services, recorded an increase in profitability driven by improved margins despite a reduction in the overall market volumes due to lower throughput in the Port of Colombo.
• Construction resumed at ‘Cinnamon Life’ in mid-May after a 2-month closure and it is encouraging to note that the momentum is gradually reaching pre COVID-19 levels. The Group is working closely with the contractor to ascertain the impact of the COVID-19 disruptions on the overall timelines of the project. The finishing work of the apartment and office towers are being re-sequenced to be completed within the financial year to enable handover.
• The profitability of Nations Trust Bank recorded an increase despite pressure on margins, due to the positive impact on account of the removal of the Debt Repayment Levy from January 2020 onwards.
• Due to the deployment of cash equity to fund the ‘Cinnamon Life’ project, Group profitability for the quarter was impacted by a year-on-year decrease in finance income, as expected.
EBITDA*
(Rs.'000) Q1 2020/21 Q1 2019/20
Transportation 394,743 1,053,006
Consumer Foods 487,149 841,007
Retail 501,851 1,035,756
Leisure (1,461,187) (336,013)
Property (28,881) 46,507
Financial Services 536,726 435,730
*EBITDA includes interest income and the share of results of equity accounted investees which is based on the share of profit after tax
2 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
CHAIRMAN’S REVIEW
ensuing discussion aims to provide an insight to the performance in the month of June, in particular, where economic activity across the country reached levels of near normalcy.
It is pleasing to note that business recovery is reverting to almost pre COVID-19 levels, faster than anticipated, and this momentum is expected to continue if the pandemic remains contained. The Leisure business, however, continues to be significantly impacted given the closure of the airport in Sri Lanka and the high dependency on the recovery of key source markets in particular.
I wish to, once again, recognise the contribution made by those who served in our front lines and played a pivotal role in serving our stakeholders and the people of our country in its time of need. It was truly heartening to see the positive attitude and spirit of all our people during this crisis, where numerous teams ensured that operations continued seamlessly. The Group also initiated a series of measures to strengthen its financial and liquidity position, including cost containment initiatives, such as the reduction in executive staff remuneration, and productivity improvement measures. The proactive implementation of these measures at the very beginning of the quarter supported the Group in maintaining its position of financial strength.
As a token of appreciation to Sri Lanka’s courageous healthcare workers, Cinnamon Hotels & Resorts offered 2,000 complimentary full board room nights at its properties in Sri Lanka. The packages will be distributed based on the nominations received from the Ministry of Health.
As announced to the Colombo Stock Exchange in June 2020, JKH entered into a ten-year financing agreement with the International Finance Corporation (IFC) for US Dollars 175 million to support funding of the Company’s investment pipeline, marking IFC’s largest investment to date in Sri Lanka. The proceeds from the facility will primarily be utilised to fund the Group’s expansion of its supermarkets business, recent investments in hotels in the Maldives and Sri Lanka and for general corporate investments. The pricing on the loan is linked to 6-month LIBOR plus a margin of 380 basis points with a step-down pricing mechanism to a margin of 355 basis
points by March 2024. Based on 6-month LIBOR at the time of signing the agreement, the total margin amounts to 4.21 per cent per annum. The financing facility has a grace period of four years with capital repayments commencing in December 2024. I believe partnering with an internationally reputed financial institution such as IFC, particularly at this juncture of time, is a vote of confidence for JKH and the country at large.
Transportation The Transportation industry group EBITDA of Rs.395 million in the first quarter of 2020/21 is a decrease of 63 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.1.05 billion]. The decline in profitability is mainly attributable to the performance of the Group’s Ports and Shipping business, South Asia Gateway Terminals (SAGT). Throughput at SAGT was impacted by the lockdowns in Sri Lanka and also India which affected transshipment volumes, with overall volumes recording a decline in excess of 40 per cent in April. However, post the easing of the lockdown in mid-May and resumption in activity in India, volumes have been on a recovery trend, recording a decline of approximately 20 per cent in June compared to the previous year. Profitability of the Group’s Bunkering business, Lanka Marine Services (LMS), recorded an increase due to improved margins despite a reduction in overall market volumes on account of the reduced vessel movements in the Port of Colombo.
Consumer Foods The Consumer Foods industry group EBITDA of Rs.487 million in the first quarter of 2020/21 is a decrease of 42 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.841 million]. The decline in profitability was mainly on account of the steep decrease in volumes across all businesses during the lockdown period. However, post the easing of the lockdown in mid-May, business activity displayed a faster than expected recovery in volumes with the Frozen Confectionery and Convenience Foods businesses recording a positive volume growth in June whilst the Beverage business recorded a low single digit decline. The overall EBITDA of the industry group in the month of June was a growth over the corresponding period of the previous year, reflecting the momentum witnessed.
Retail The Retail industry group EBITDA of Rs.502 million in the first quarter of 2020/21 is a decrease of 52 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.1.04 billion]. The Supermarkets business EBITDA of Rs.308 million in the first quarter of 2020/21 is a decrease of 66 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.912 million].
Given the classification of the supermarkets as an essential service by the Government during the lockdown period, operations continued, although limited to home delivery during periods of curfew. Revenue was negatively impacted during this period, as most of the outlets remained closed to the public while online sales could not fully offset this impact. With the easing of restrictions on movement, outlets were gradually opened to customers, adhering to the strict safety guideline issued by Government and health authorities. The business has seen a sharp rebound in sales, which is encouraging with footfall gradually recovering close to pre COVID-19 levels. Same store sales growth for the month of June recovered to negative single digit levels compared to the decline of 45 per cent, on average, in the months of April and May. Given the change in the shopping patterns of customers where the frequency and purchase patterns due to consolidation of baskets has changed, the statistics on footfall and basket values are distorted in the short term.
In July, the business revamped its online platform enabling a more diverse offering and real-time stock availability, amongst other, to enable a faster and better shopping experience. The business will continue to focus on an omni-channel strategy to cater to different customer segments and needs. Three outlets were opened in the month of July bringing the total count to 111 outlets. The business will continue to evaluate opportunities to selectively expand its outlet network.
Despite the challenging operating conditions, the Office Automation business recorded a strong performance on account of improved margins in the mobile segment and better working capital management.
3
Leisure The Leisure industry group EBITDA of a negative Rs.1.46 billion in the first quarter of 2020/21 is a significant decrease over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: negative Rs.336 million].
As elaborated in the JKH Annual Report 2019-20, Sri Lanka and the Maldives witnessed the imposition of stringent measures to control the transmission of COVID-19, and, as a result closed its airports for arrivals. The Sri Lankan airport remains closed to date whilst the Maldives airport was opened in mid-July.
Due to the restrictions in movement, the Group decided to suspend operations of its hotel properties in Sri Lanka and the Maldives during the month of April and May, thereby saving on overheads and other expenses. The Sri Lankan resort hotels and the City hotels opened to the public from June onwards, under stringent safety guidelines issued by the Government post the easing of the lockdown, with the exception of ‘Hikka Tranz by Cinnamon’ which was earmarked for a structural repair prior to the outbreak of the pandemic. Similar to several other countries, the gradual resumption of domestic travel has been encouraging in the Sri Lankan resorts segment. ‘Cinnamon Dhonveli Maldives’ re-commenced operations in mid-July whilst the remainder of our Maldivian hotels will be gradually opened over the ensuing weeks. Whilst the performance of the Leisure business will largely depend on resumption of regional and global travel, it is encouraging to witness strong forward bookings for the winter season, demonstrating the ‘pent up’ demand for leisure travel should restrictions on travel ease.
PropertyThe Property industry group EBITDA of negative Rs.29 million in the first quarter of 2020/21 is a decrease of 162 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.47 million]. The decline in profitability is mainly on account of the performance of the mall operations which were significantly impacted as a result of the pandemic.
The construction sites of both ‘Tri-Zen’ and ‘Cinnamon Life’ were closed with the imposition of curfew for two months
from March 2020 until mid-May. Both sites commenced work, as permitted under the relevant Government directives. Although the labour strength and productivity at ‘Cinnamon Life’ is yet to reach pre-lockdown levels it is encouraging to note a gradual improvement in manpower and productivity. The business is working closely with the contractor to ascertain the impact of COVID-19 on the overall timelines of the project to manage deliverables. The finishing work of the apartment and office towers are being re-sequenced to be completed within the financial year to enable handover. The funding of ‘Cinnamon Life’ is in place with the unutilised component of the committed syndicated loan facility and availability of funds earmarked for the project at the parent company level.
Financial ServicesThe Financial Services industry group EBITDA of Rs.537 million in the first quarter of 2020/21 is an increase of 23 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.436 million]. The profitability of Nations Trust Bank PLC recorded an increase despite pressure on margins, due to the positive impact on account of the removal of the Debt Repayment Levy from January 2020 onwards. Whilst the performance of Union Assurance PLC was impacted in the month of April and May, the business witnessed a strong recovery in its gross written premiums in the month of June.
Other, Including Information Technology and Plantation ServicesThe Other, including Information Technology and Plantation Services industry group EBITDA of Rs.371 million in the first quarter of 2020/21 is a decrease of 24 per cent over the EBITDA for the first quarter of the previous financial year [2019/20 Q1: Rs.489 million]. The decrease in profitability is attributable to the decline in interest income on account of lower cash and cash equivalents at the Holding Company due to the planned equity infusions to fund the ‘Cinnamon Life’ project. The Plantation Services sector recorded an improvement in profitability as a result of an increase in tea prices and a reversal of a bad debt provision at John Keells PLC. The Information Technology sector recorded a growth in profitability driven by increased digital adoption by clients in the current environment.
Sustainability Initiatives The Group’s absolute carbon footprint and water withdrawal reduced by 25 per cent and 2 per cent to 17,077 MT and 412,632 cubic meters respectively, mainly due to the lower levels of operational activity, particularly in the Leisure and Supermarket businesses as a result of the COVID-19 pandemic. However, the higher than proportionate reduction in revenue resulted in the Group’s carbon footprint per million Rupees of revenue increasing by 10 per cent to 0.80 MT and water withdrawal per million Rupees of revenue increasing by 44 per cent. Group employees were provided with approximately 4 hours of training per employee, whilst 14 occupational injuries were reported this quarter.
Corporate Social Responsibility Following are some of the highlights of the John Keells Foundation’s (JKF) work during the quarter under review.
• JKF, together with Group businesses, continued to support efforts to combat the COVID-19 pandemic and resumption of livelihoods and schools through the following initiatives:
> Donation of Personal Protection Equipment (PPE) to the National Institute of Infectious Diseases, Teaching Hospital at the Kotelawala Defense University, Homagama Base Hospital, Neluwa Base Hospital and Hinidiuma Base Hospital.
> Installation of handwashing units in schools and public offices in the John Keells Praja Shakthi locations of Colombo 2 and Ranala.
> Supporting the police station in Colombo 2 to disinfect 5 schools.
> Upskilling and linking unskilled and semi-skilled labour opportunities to local communities in Colombo 2.
• The English Language Scholarship Programme commenced online classes in 11 locations. 697 students are currently engaged in the online and study pack programmes.
4 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
CHAIRMAN’S REVIEW
• JKF launched the following new initiatives to support the livelihoods of identified groups towards enhancing their overall product/service offerings and income opportunities in a post-pandemic environment:
> `Skill into Progress (SKIP)’ – Upskilling of identified supplier groups of the John Keells Group. A pilot programme for chauffeurs and safari jeep drivers from Colombo and Yala to enhance industry-related English communication skills.
> #KeepItSafe campaign - A series of videos on food safety and hygiene developed by JKF with the support of Chefs from Cinnamon Hotels and Resorts for the upskilling of small entrepreneurs engaged in catering services in Colombo 2.
• Under Project WAVE, JKF initiated online awareness on gender-based violence and child protection during the lockdown period reaching a total of 5,356 persons. JKF is also in the process of developing an e-module for its ongoing awareness among Group staff.
• The Gratiaen Trust (GT), in association with JKF as primary sponsor, conducted three online events with its shortlisted candidates.
• Under JKF’s sustained sponsorship support, the Museum of Modern and Contemporary Art Sri Lanka (MMCA) commenced activities through digital platforms, including moving its ‘One Hundred Thousand Small Tales’
exhibition online, conducting a series of consultations with translations scholars and editors to create an open access translation toolkit and undertaking studio visits online with three artists as part of livelihood development of artists.
DividendGiven the resumption of economic activity to levels of near normalcy and the rebound of our Group businesses, with the exception of Leisure, your Board declared a first interim dividend of Rs.0.50 per share to be paid on or before 28 August 2020. This reflects the positive outlook the Group has in the current circumstances for its portfolio of businesses and the generation of cash profits in the Group, despite the impacts on the Leisure business on the overall performance of the Group. The Group will follow its dividend policy which corresponds with growth in profits, whilst ensuring that the Company maintains adequate funds to ensure business continuity given the prevailing unprecedented circumstances.
Krishan Balendra Chairman
29 July 2020
5
CONSOLIDATED INCOME STATEMENT
For the three months ended 30 June Note 2020 2019 Change %
Continuing operations
Revenue from contracts with customers 19,338,891 29,304,036 (34)
Revenue from insurance contracts 2,263,157 2,433,980 (7)
Total Revenue 21,602,048 31,738,016 (32)
Cost of sales (19,685,657) (26,511,929) (26)
Gross profit 1,916,391 5,226,087 (63)
Other operating income 398,860 383,621 4
Selling and distribution expenses (789,304) (1,255,738) (37)
Administrative expenses (3,212,321) (3,173,680) 1
Other operating expenses (229,754) (729,459) (69)
Results from operating activities (1,916,128) 450,831 (525)
Finance cost 7 (1,974,161) (1,161,297) 70
Finance income 7 1,724,598 2,083,155 (17)
Change in insurance contract liabilities 6 (752,678) (1,085,768) (31)
Share of results of equity accounted investees (net of tax) 488,500 1,072,848 (54)
Profit/(loss) before tax (2,429,869) 1,359,769 (279)
Tax expense 8 272,876 (457,399) (160)
Profit/(loss) for the period (2,156,993) 902,370 (339)
Attributable to:
Equity holders of the parent (1,657,471) 994,328 (267)
Non-controlling interest (499,522) (91,958) 443
(2,156,993) 902,370 (339)
LKR. LKR.
Earnings per share
Basic (1.26) 0.75
Diluted (1.26) 0.75
Dividend per share - 1.00
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.
6 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the three months ended 30 June Note 2020 2019
Profit/(loss) for the period (2,156,993) 902,370
Other comprehensive income
Other comprehensive income to be reclassified to income statement in subsequent periods
Currency translation of foreign operations (1,331,444) 419,440
Net gain/(loss) on cash flow hedges (40,543) 169,870
Net gain/(loss) on debt instruments at fair value through other comprehensive income 732,824 310,319
Share of other comprehensive income of equity-accounted investees (net of tax) (113,049) 140,155
Net other comprehensive income to be reclassified to income statement in subsequent periods (752,212) 1,039,784
Other comprehensive income not to be reclassified to income statement in subsequent periods
Net gain/(loss) on equity instruments at fair value through other comprehensive income (1,340) 15,036
Remeasurement gain / (loss) on defined benefit plans - 768
Share of other comprehensive income of equity-accounted investees (net of tax) - (3,678)
Net other comprehensive income not to be reclassified to income statement in subsequent periods (1,340) 12,126
Tax on other comprehensive income 8 (1,098) (18,819)
Other comprehensive income for the period, net of tax (754,650) 1,033,091
Total comprehensive income for the period, net of tax (2,911,643) 1,935,461
Attributable to:
Equity holders of the parent (2,413,248) 1,970,920
Non-controlling interest (498,395) (35,459)
(2,911,643) 1,935,461
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.
7
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30.06.2020 31.03.2020
ASSETSNon-current assetsProperty, plant and equipment 111,073,028 111,533,759 Right- of - use assets 36,683,656 37,170,270 Investment property 15,007,996 15,007,996 Intangible assets 3,214,601 3,288,989 Investments in equity accounted investees 27,511,995 28,329,492 Non-current financial assets 43,792,988 40,078,469 Deferred tax assets 1,066,591 902,382 Other non-current assets 80,283,288 79,582,749
318,634,143 315,894,106
Current assetsInventories 48,575,534 50,168,754 Trade and other receivables 10,709,975 12,186,327 Amounts due from related parties 151,645 389,766 Other current assets 6,602,439 6,513,353 Short term investments 37,237,939 38,457,970 Cash in hand and at bank 9,105,148 13,333,743
112,382,680 121,049,913 Total assets 431,016,823 436,944,019
EQUITY AND LIABILITIESEquity attributable to equity holders of the parentStated capital 62,881,295 62,881,295 Revenue reserves 86,261,184 87,885,071 Other components of equity 65,402,735 66,085,354
214,545,214 216,851,720 Non-controlling interest 26,339,065 26,872,142
Total equity 240,884,279 243,723,862
Non-current liabilitiesInsurance contract liabilities 38,980,906 38,185,839 Interest-bearing loans and borrowings 53,074,913 50,925,346 Lease liabilities 20,335,357 19,910,124 Deferred tax liabilities 8,029,939 8,294,955 Employee benefit liabilities 2,458,331 2,343,911 Non-current financial liabilities 3,606,748 3,619,863 Other non-current liabilities 12,822,830 12,613,909
139,309,024 135,893,947
Current liabilitiesTrade and other payables 20,331,619 23,881,479 Amounts due to related parties 1,227 2,073 Income tax liabilities 1,307,940 1,747,597 Short term borrowings 4,977,571 5,803,771 Interest-bearing loans and borrowings 4,891,899 5,206,020 Lease liabilities 1,265,261 1,382,662 Other current liabilities 1,410,875 1,623,137 Bank overdrafts 16,637,128 17,679,471
50,823,520 57,326,210 Total equity and liabilities 431,016,823 436,944,019
LKR. LKR. Net assets per share 162.71 164.46
Note : All values are in LKR '000s, unless otherwise stated. The above figures not audited.
I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007.
K M ThanthirigeGroup Financial Controller
The Board of Directors is responsible for these financial statements.
K N J Balendra J G A Cooray Chairman Deputy Chairman/Group Finance Director
29 July 2020Colombo
8 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended 30 June Note 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIESProfit/(loss) before working capital changes A (614,337) 1,190,442
(Increase) / Decrease in inventories 1,593,220 1,119,827 (Increase) / Decrease in trade and other receivables 26,440 4,281,682 (Increase) / Decrease in other current assets (109,603) (44,107)(Increase) / Decrease in other non-current assets (688,204) (4,330,574)(Increase)/ Decrease in other non-current financial liabilities (53,657) -Increase / (Decrease) in trade and other payables and other non-current liabilities (3,358,801) (3,168,829)Increase / (Decrease) in other current liabilities (162,638) (549,010)Increase / (Decrease) in insurance contract liabilities 795,067 1,108,018 Cash generated from operations (2,572,513) (392,551)
Finance income received 1,712,263 2,083,155 Finance costs paid (457,160) (598,680)Dividend received 1,192,947 727,067 Tax paid (626,210) (1,352,975)Gratuity paid (89,150) (97,731)Net cash flow from operating activities (839,823) 368,285
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIESPurchase and construction of property, plant and equipment (918,673) (2,759,938)Purchase of intangible assets (50,960) (142,924)Purchase of lease right (53,604) - Proceeds from sale of property, plant and equipment and intangible assets 10,426 83,758 Proceeds from sale of financial instruments - fair valued through profit or loss 595,169 47,104 Purchase of financial instruments - fair valued through profit or loss (630,317) (53,424)(Purchase) / disposal of short term investments (net) 16,750,959 9,513,102 (Purchase) / disposal of non current financial assets (net) (2,983,035) (544,719)Net cash flow from / (used in) investing activities 12,719,965 6,142,959
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIESDividend paid to equity holders of parent - (1,318,173)Dividend paid to shareholders with non-controlling interest - (197,244)Proceeds from long term borrowings 3,860,150 2,373,521 Repayment of long term borrowings (1,142,643) (469,458)Payment of lease liabilities (391,157) (568,906)Proceeds from/(repayment of ) other financial liabilities (net) (826,200) (4,976,336)Net cash flow from / (used in) financing activities 1,500,150 (5,156,596)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 13,380,292 1,354,648
CASH AND CASH EQUIVALENTS AT THE BEGINNING 8,759,922 27,718,479
CASH AND CASH EQUIVALENTS AT THE END 22,140,214 29,073,127
ANALYSIS OF CASH AND CASH EQUIVALENTSFavourable balances
Short term investments (less than three months) 29,672,194 30,343,524 Cash in hand and at bank 9,105,148 12,696,531 Unfavourable balancesBank overdrafts (16,637,128) (13,966,928)Total cash and cash equivalents 22,140,214 29,073,127
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions.
9
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended 30 June 2020 2019
A. Profit before working capital changes Profit/(loss) before tax (2,429,869) 1,359,769 Adjustments for: Finance income (1,724,598) (2,083,155) Finance cost 1,974,161 1,161,297 Share-based payment expense 72,060 113,806 Share of results of equity accounted investees (488,500) (1,072,848) Depreciation of property, plant and equipment 1,219,620 970,153 (Profit)/loss on sale of property, plant and equipment and intangible assets (1,127) 4,033 Amortisation of right- of - use assets 688,250 430,684 Amortisation of intangible assets 142,778 119,165 Employee benefit provision and related costs 203,570 191,625 Unrealised (gain) / loss on foreign exchange (net) (270,682) (4,087)
(614,337) 1,190,442
10 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYA
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429
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1
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,935
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ts -
- -
- -
113
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-
113
,806
-
113
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Fi
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paid
- 20
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- -
- -
- -
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2,88
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216
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,720
2
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2,14
2 2
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t/(lo
ss) f
or th
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riod
- -
- -
- -
- (1
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,471
) (1
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,471
) (4
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(2,1
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er c
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- -
- (1
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)To
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- -
- (1
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,429
) (3
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685
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(1
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,569
) (2
,413
,248
) (4
98,3
95)
(2,9
11,6
43)
Shar
e ba
sed
paym
ents
- -
- -
- 7
2,06
0 -
72,
060
- 7
2,06
0 Su
bsid
iary
div
iden
d to
non
-con
trol
ling
inte
rest
- -
- -
- -
- 3
4,68
2 3
4,68
2 (3
4,68
2) -
As
at 3
0 Ju
ne 2
020
62,
881,
295
3,5
64,7
42
37,
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20,
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235
(547
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) 2
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,207
1
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,090
8
6,26
1,18
4 2
14,5
45,2
14
26,
339,
065
240
,884
,279
* Fa
ir va
lue
thro
ugh
othe
r com
preh
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e in
com
eN
ote
: Al
l val
ues a
re in
LKR
'000
s, un
less
oth
erw
ise st
ated
.
Figu
res i
n br
acke
ts in
dica
te d
educ
tions
.
The
abov
e fig
ures
not
aud
ited.
11
COMPANY INCOME STATEMENT
For the three months ended 30 June Note 2020 2019 Change %
Continuing operations
Services transferred over time 313,859 367,654 (15)
Revenue from contracts with customers 313,859 367,654 (15)
Cost of sales (201,585) (270,240) (25)
Gross profit 112,274 97,414 15
Dividend income 1,192,947 1,353,382 (12)
Other operating income 3,361 3,632 (7)
Administrative expenses (281,177) (235,223) 20
Other operating expenses (744) (10,073) (93)
Results from operating activities 1,026,661 1,209,132 (15)
Finance cost 7 (474,250) (197,657) 140
Finance income 7 356,506 709,013 (50)
Profit before tax 908,917 1,720,488 (47)
Tax expense 8 (6,407) (63,999) (90)
Profit for the period 902,510 1,656,489 (46)
LKR. LKR.
Dividend per share - 1.00
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.
12 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
COMPANY STATEMENT OF COMPREHENSIVE INCOME
For the three months ended 30 June Note 2020 2019
Profit for the period 902,510 1,656,489
Other comprehensive income
Other comprehensive income not to be reclassified to income statement in subsequent periods
Net gain/(loss) on equity instruments at fair value through other comprehensive income (1,289) 15,117
Net other comprehensive income not to be reclassified to income statement in subsequent periods (1,289) 15,117
Tax on other comprehensive income 8 - -
Other comprehensive income for the period, net of tax (1,289) 15,117
Total comprehensive income for the period, net of tax 901,221 1,671,606
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.
13
COMPANY STATEMENT OF FINANCIAL POSITION
As at 30.06.2020 31.03.2020
ASSETSNon-current assetsProperty, plant and equipment 133,910 144,353 Intangible assets 95,625 102,542 Investments in subsidiaries 88,210,533 87,835,917 Investments in equity accounted investees 10,381,881 10,381,881 Non current financial assets 2,382,374 284,978 Other non-current assets 18,842 18,842
101,223,165 98,768,513
Current assetsTrade and other receivables 154,557 125,451 Amounts due from related parties 362,674 681,617 Other current assets 1,120,386 1,124,829 Short term investments 25,859,103 27,372,003 Cash in hand and at bank 533,052 176,662
28,029,772 29,480,562 Total assets 129,252,937 128,249,075
EQUITY AND LIABILITIESStated capital 62,881,295 62,881,295 Revenue reserves 60,533,946 59,631,436 Other components of equity 2,795,715 2,724,944 Total equity 126,210,956 125,237,675
Non-current liabilitiesInterest-bearing loans and borrowings 201,458 289,705 Employee benefit liabilities 184,187 171,450
385,645 461,155
Current liabilitiesTrade and other payables 538,331 423,393 Amounts due to related parties 14,446 777 Income tax liabilities 79,607 389,510 Interest bearing loans and borrowings 316,042 316,042 Other current liabilities 7,244 3,375 Bank overdrafts 1,700,666 1,417,148
2,656,336 2,550,245 Total equity and liabilities 129,252,937 128,249,075
LKR. LKR.Net assets per share 95.72 94.98
Note : All values are in LKR '000s, unless otherwise stated. The above figures not audited.
I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007.
K M ThanthirigeGroup Financial Controller
The Board of Directors is responsible for these financial statements.
K N J Balendra J G A Cooray Chairman Deputy Chairman/Group Finance Director
29 July 2020Colombo
14 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
COMPANY STATEMENT OF CASH FLOWS
For the three months ended 30 June 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 908,917 1,720,488 Adjustments for: Finance income (356,506) (709,013) Dividend income (1,192,947) (1,353,382) Finance cost 477,016 197,657 Depreciation of property, plant and equipment 10,442 8,154 Amortisation of intangible assets 6,915 5,600 Share based payment expenses 18,443 32,505 Employee benefit provision and related costs 16,032 16,349 Profit before working capital changes (111,688) (81,642)
(Increase) / Decrease in trade and other receivables 289,840 (164,276)(Increase) / Decrease in other current assets 4,443 (84,919)Increase / (Decrease) in trade and other payables 119,072 (11,761)Increase / (Decrease) in other current liabilities 3,870 8,436 Cash generated from operations 305,537 (334,162)
Finance income received 471,220 2,362,242 Finance costs paid (474,250) (197,657)Dividend received 1,192,947 1,342,938 Tax paid (316,310) (170,244)Gratuity paid (3,296) (8,769)Net cash flow from operating activities 1,175,848 2,994,348
CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIESPurchase and construction of property, plant and equipment - (3,305)Purchase of intangible assets - (109,161)Increase in interest in subsidiaries (321,000) (3,921,750)(Purchase) / disposal of short term investments (net) 16,654,581 9,070,104 (Purchase) / disposal of non current financial assets (net) (2,101,451) 1,285 Net cash flow from/(used in) investing activities 14,232,130 5,037,173
CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIESDividend paid - (1,318,173)Proceeds from/(repayment of ) other financial liabilities (net) - (4,000,010)Repayment of long term borrowings (78,708) (73,337)Net cash flow from / (used in) financing activities (78,708) (5,391,520)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 15,329,270 2,640,001
CASH AND CASH EQUIVALENTS AT THE BEGINNING 6,906,686 26,782,682
CASH AND CASH EQUIVALENTS AT THE END 22,235,956 29,422,683
ANALYSIS OF CASH & CASH EQUIVALENTSFavourable balancesShort term investments 23,403,570 25,564,699 Cash in hand and at bank 533,052 4,021,983 Unfavourable balancesBank overdrafts (1,700,666) (163,999)Total cash and cash equivalents 22,235,956 29,422,683
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.
15
COMPANY STATEMENT OF CHANGES IN EQUITY
Note Statedcapital
Other capital
reserve
Fair value reserve of
financial assets at
FVOCI*
Revenue reserves
Total Equity
As at 1 April 2019 62,806,482 2,390,966 9,773 55,598,189 120,805,410
Profit for the period - - - 1,656,489 1,656,489
Other comprehensive income - - 15,117 - 15,117
Total comprehensive income - - 15,117 1,656,489 1,671,606
Share based payments - 113,806 - - 113,806
Final dividend paid - 2018/19 11 - - - (1,318,173) (1,318,173)
As at 30 June 2019 62,806,482 2,504,772 24,890 55,936,505 121,272,649
As at 1 April 2020 62,881,295 2,700,147 24,797 59,631,436 125,237,675
Profit for the period - - - 902,510 902,510
Other comprehensive income - - (1,289) - (1,289)
Total comprehensive income - - (1,289) 902,510 901,221
Share based payments - 72,060 - - 72,060
As at 30 June 2020 62,881,295 2,772,207 23,508 60,533,946 126,210,956
* Fair value through other comprehensive incomeNote : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.
16 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Operating segment informationBusiness segmentsThe following tables present revenue, profit information and other disclosures regarding Group's business segments.
Transportation Consumer Foods Retail Leisure Property Financial Services Others Group Total
For the three months ended 30 June 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Goods transferred at a point in time 2,673,955 4,857,727 3,179,588 4,548,722 12,367.645 15,669,154 - - - - - - 592,068 533,112 18,813,256 25,632,135
Services transferred over time 465,214 622,341 - - 23,469 23,420 154,300 2,914,669 110,213 209,915 2,295,592 2,458,762 839,523 844,128 3,888,311 7,049,815
Total segment revenue 3,139,169 5,480,068 3,179,588 4,548,722 12,391,114 15,692,574 154,300 2,914,669 110,213 209,915 2,295,592 2,458,762 1,431,591 1,377,240 22,701,567 32,681,950
Eliminations of inter segment revenue (1,099,519) (943,934)
Net revenue 21,602,048 31,738,016
Segment result 124,367 152,625 220,392 626,582 71,826 627,463 (2,517,377) (1,039,480) (57,271) (73,695) 749,282 311,427 384,144 (107,448) (1,024,637) 497,474
Finance cost (19,778) (37,265) (51,637) (64,239) (470,259) (430,167) (298,690) (104,973) (6,515) (10,988) (641,814) (283,504) (487,156) (230,161) (1,975,849) (1,161,297)
Finance income 33,413 36,604 9,828 13,660 9,112 6,474 55,133 71,583 19,634 68,570 23,161 89,074 (62,215) 733,973 88,066 1,019,938
Share of results of equity accounted investees 180,282 844,129 - - - - (19,054) (15,609) (10,868) (14,328) 338,140 258,656 - - 488,500 1,072,848
Eliminations / adjustments - (13,215) (3,000) (3,000) 6,196 - (881) (2,933) (8,264) (5,568) - (2,135) - (42,343) (5,949) (69,194)
Profit / (loss) before tax 318,284 982,878 175,583 573,003 (383,125) 203,770 (2,780,869) (1,091,412) (63,284) (36,009) 468,769 373,518 (165,227) 354,021 (2,429,869) 1,359,769
Tax expense (25,087) (21,180) (34,809) (166,396) 109,720 (62,147) 315,618 72,469 (3,326) (23,337) (69,223) (58,572) (20,017) (198,236) 272,876 (457,399)
Profit / (loss) for the period 293,197 961,698 140,774 406,607 (273,405) 141,623 (2,465,251) (1,018,943) (66,610) (59,346) 399,546 314,946 (185,244) 155,785 (2,156,993) 902,370
Purchase and construction of PPE* 2,517 115,535 46,423 161,949 417,009 659,060 424,951 1,664,213 - 95,571 18,473 21,682 9,300 41,928 918,673 2,759,938
Addition to IA* 500 - 3,139 811 35,635 17,276 - 5,325 - - 8,744 7,519 2,942 111,993 50,960 142,924
Depreciation of PPE* 48,589 34,310 258,652 203,375 284,537 254,034 557,169 415,350 12,287 10,869 20,899 20,945 37,487 31,270 1,219,620 970,153
Amortisation of IA* 373 569 605 688 24,820 13,458 16,952 14,203 1,673 1,687 89,670 80,992 8,685 7,568 142,778 119,165
Amortisation of ROU* assets 1,037 - 1,530 1,540 213,638 185,561 443,589 225,079 5,136 5,039 23,027 13,172 293 293 688,250 430,684
Employee benefit provision and related costs 11,843 6,245 43,888 36,170 18,304 35,009 39,871 72,003 860 642 59,264 7,199 29,540 34,357 203,570 191,625
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions.
* PPE (Property, plant and equipment), IA (Intangible assets), ROU (Right-of-use)
17
Operating segment informationBusiness segmentsThe following tables present revenue, profit information and other disclosures regarding Group's business segments.
Transportation Consumer Foods Retail Leisure Property Financial Services Others Group Total
For the three months ended 30 June 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Goods transferred at a point in time 2,673,955 4,857,727 3,179,588 4,548,722 12,367.645 15,669,154 - - - - - - 592,068 533,112 18,813,256 25,632,135
Services transferred over time 465,214 622,341 - - 23,469 23,420 154,300 2,914,669 110,213 209,915 2,295,592 2,458,762 839,523 844,128 3,888,311 7,049,815
Total segment revenue 3,139,169 5,480,068 3,179,588 4,548,722 12,391,114 15,692,574 154,300 2,914,669 110,213 209,915 2,295,592 2,458,762 1,431,591 1,377,240 22,701,567 32,681,950
Eliminations of inter segment revenue (1,099,519) (943,934)
Net revenue 21,602,048 31,738,016
Segment result 124,367 152,625 220,392 626,582 71,826 627,463 (2,517,377) (1,039,480) (57,271) (73,695) 749,282 311,427 384,144 (107,448) (1,024,637) 497,474
Finance cost (19,778) (37,265) (51,637) (64,239) (470,259) (430,167) (298,690) (104,973) (6,515) (10,988) (641,814) (283,504) (487,156) (230,161) (1,975,849) (1,161,297)
Finance income 33,413 36,604 9,828 13,660 9,112 6,474 55,133 71,583 19,634 68,570 23,161 89,074 (62,215) 733,973 88,066 1,019,938
Share of results of equity accounted investees 180,282 844,129 - - - - (19,054) (15,609) (10,868) (14,328) 338,140 258,656 - - 488,500 1,072,848
Eliminations / adjustments - (13,215) (3,000) (3,000) 6,196 - (881) (2,933) (8,264) (5,568) - (2,135) - (42,343) (5,949) (69,194)
Profit / (loss) before tax 318,284 982,878 175,583 573,003 (383,125) 203,770 (2,780,869) (1,091,412) (63,284) (36,009) 468,769 373,518 (165,227) 354,021 (2,429,869) 1,359,769
Tax expense (25,087) (21,180) (34,809) (166,396) 109,720 (62,147) 315,618 72,469 (3,326) (23,337) (69,223) (58,572) (20,017) (198,236) 272,876 (457,399)
Profit / (loss) for the period 293,197 961,698 140,774 406,607 (273,405) 141,623 (2,465,251) (1,018,943) (66,610) (59,346) 399,546 314,946 (185,244) 155,785 (2,156,993) 902,370
Purchase and construction of PPE* 2,517 115,535 46,423 161,949 417,009 659,060 424,951 1,664,213 - 95,571 18,473 21,682 9,300 41,928 918,673 2,759,938
Addition to IA* 500 - 3,139 811 35,635 17,276 - 5,325 - - 8,744 7,519 2,942 111,993 50,960 142,924
Depreciation of PPE* 48,589 34,310 258,652 203,375 284,537 254,034 557,169 415,350 12,287 10,869 20,899 20,945 37,487 31,270 1,219,620 970,153
Amortisation of IA* 373 569 605 688 24,820 13,458 16,952 14,203 1,673 1,687 89,670 80,992 8,685 7,568 142,778 119,165
Amortisation of ROU* assets 1,037 - 1,530 1,540 213,638 185,561 443,589 225,079 5,136 5,039 23,027 13,172 293 293 688,250 430,684
Employee benefit provision and related costs 11,843 6,245 43,888 36,170 18,304 35,009 39,871 72,003 860 642 59,264 7,199 29,540 34,357 203,570 191,625
Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions.
* PPE (Property, plant and equipment), IA (Intangible assets), ROU (Right-of-use)
18 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
Operating segment informationBusiness segmentsThe following table presents segment assets and liabilities of the Group’s business segments.
Transportation Consumer Foods Retail Leisure Property Financial Services Others Group Total
As at 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020
Property, plant and equipment 1,012,839 1,058,895 9,567,721 9,787,579 12,874,343 12,759,302 57,222,234 57,493,120 4,746,191 4,795,211 2,489,334 2,491,822 1,392,327 1,377,581 89,304,989 89,763,510 Right-of-use-assets 1,383 2,420 236,745 238,275 8,822,883 8,405,902 25,974,249 26,859,174 224,936 225,680 259,108 278,669 36,862 37,155 35,556,166 36,047,275 Investment property - - 296,421 296,421 - - 4,522,725 4,522,725 30,069,361 31,311,293 - - 2,107,709 865,776 36,996,216 36,996,215 Intangible assets 8,469 8,342 251,824 249,290 564,143 535,896 291,177 308,129 959 29,336 1,232,569 1,316,147 179,064 158,098 2,528,205 2,605,238 Non-current financial assets 149,099 153,004 155,442 172,527 126,649 132,965 6,611,681 6,722,027 33,258 227,449 40,202,964 38,561,535 2,629,480 333,040 49,908,573 46,302,547 Other non-current assets 19,042 20,486 51,128 55,962 838,798 881,782 43,191 37,318 79,719,753 78,973,882 104,166 112,579 41,965 32,954 80,818,043 80,114,963 Segment non-current assets 1,190,832 1,243,147 10,559,281 10,800,054 23,226,816 22,715,847 94,665,257 95,942,493 114,794,458 115,562,851 44,288,141 42,760,752 6,387,407 2,804,604 295,112,192 291,829,748
Investments in equity accounted investees 12,291,650 13,444,422 - - - - 1,375,529 1,394,583 1,872,425 1,883,293 11,972,390 11,607,194 - - 27,511,995 28,329,492 Deferred tax assets 1,066,591 902,382 Goodwill 545,827 738,596 Eliminations / adjustments (5,602,462) (5,906,112) Total non-current assets 318,634,143 315,894,106
Inventories 384,699 729,864 2,036,975 2,065,766 4,855,229 5,361,774 337,333 426,131 40,678,731 41,407,129 8,190 12,514 310,009 198,206 48,611,166 50,201,384 Trade and other receivables 1,617,071 1,896,377 2,444,165 2,623,940 1,638,619 2,649,605 2,119,028 3,340,894 233,632 121,086 2,063,771 1,184,041 2,311,728 1,038,157 12,428,014 12,854,100 Short term investments 265,035 205,320 16,776 14,706 776,492 449,088 3,201,840 3,199,538 471,594 888,226 8,239,929 8,205,827 26,499,116 27,661,442 39,470,782 40,624,147 Cash in hand and at bank 1,691,294 4,495,130 245,714 323,546 859,782 240,814 1,224,936 1,463,798 1,325,757 1,726,800 688,513 1,063,919 2,734,992 2,117,976 8,770,988 11,431,983 Segment current assets 3,958,099 7,326,691 4,743,630 5,027,958 8,130,122 8,701,281 6,883,137 8,430,361 42,709,714 44,143,241 11,000,403 10,466,301 31,855,845 31,015,781 109,280,950 115,111,614
Other current assets 6,602,439 6,513,353 Eliminations / adjustments (3,500,709) (575,054) Total current assets 112,382,680 121,049,913 Total assets 431,016,823 436,944,019
Insurance contract liabilities - - - - - - - - - - 38,980,906 38,185,839 - - 38,980,906 38,185,839 Interest bearing loans and borrowings 15,000 - 1,042,346 1,080,214 - - 16,648,709 17,350,581 41,246,360 38,358,644 - - 213,458 289,705 59,165,873 57,079,144 Lease liability 2,007 2,333 88,651 87,887 7,937,536 7,334,023 12,094,519 12,321,600 432 432 166,555 163,849 - - 20,289,700 19,910,124 Employee benefit liabilities 101,775 94,899 580,084 548,681 272,596 254,210 840,668 813,935 14,091 110,174 212,389 204,579 436,726 317,434 2,458,329 2,343,912 Non-current financial liability - - - - - - - - 3,606,748 3,619,863 - - - - 3,606,748 3,619,863 Other non-current liabilities - - 118,066 117,940 - - 170,715 93,353 12,534,237 12,402,802 - - 482 487 12,823,500 12,614,582 Segment non-current liabilities 118,782 97,232 1,829,147 1,834,722 8,210,132 7,588,233 29,754,611 30,579,469 57,401,868 54,491,915 39,359,850 38,554,267 650,666 607,626 137,325,056 133,753,464
Deferred tax liabilities 8,029,939 8,294,955 Eliminations / adjustments (6,045,971) (6,154,472) Total non-current liabilities 139,309,024 135,893,947
Trade and other payables 1,076,117 1,853,419 1,914,559 1,726,140 8,049,999 8,797,570 2,389,876 2,281,147 3,008,799 6,005,379 3,254,876 2,708,601 2,098,238 1,032,217 21,792,464 24,404,473 Short term borrowings 1,251,148 4,073,865 - - 3,985,028 1,984,311 1,983,644 1,914,264 - - - - 12,074 12,074 7,231,894 7,984,514 Interest bearing borrowings - - 536,035 543,455 - - 1,562,663 1,081,608 2,477,159 3,310,571 - - 316,042 316,042 4,891,899 5,251,676 Lease liability - - 10,840 11,043 197,035 237,954 1,084,006 1,100,006 - - 83,796 101,110 - - 1,375,677 1,450,113 Bank overdrafts 532,512 409,700 964,966 1,637,251 7,916,881 9,200,324 4,256,920 3,789,101 701,698 937,611 172,604 331,411 2,163,545 1,446,072 16,709,126 17,751,470 Segment current liabilities 2,859,777 6,336,984 3,426,400 3,917,889 20,148,943 20,220,159 11,277,109 10,166,126 6,187,656 10,253,561 3,511,276 3,141,122 4,589,899 2,806,405 52,001,060 56,842,246
Income tax liabilities 1,307,940 1,747,597 Other current liabilities 1,410,875 1,623,137 Eliminations / adjustments (3,896,355) (2,886,770) Total current liabilities 50,823,520 57,326,210 Total liabilities 190,132,544 193,220,157
Total segment assets 5,148,931 8,569,838 15,302,911 15,828,012 31,356,938 31,417,128 101,548,394 104,372,854 157,504,171 159,706,092 55,288,544 53,227,053 38,243,252 33,820,385 404,393,141 406,941,362 Total segment liabilities 2,978,559 6,434,216 5,255,547 5,752,611 28,359,075 27,808,392 41,031,720 40,745,595 63,589,524 64,745,476 42,871,126 41,695,389 5,240,565 3,414,031 189,326,116 190,595,710
Note : All values are in LKR '000s, unless otherwise stated.
19
Operating segment informationBusiness segmentsThe following table presents segment assets and liabilities of the Group’s business segments.
Transportation Consumer Foods Retail Leisure Property Financial Services Others Group Total
As at 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020 30.06.2020 31.03.2020
Property, plant and equipment 1,012,839 1,058,895 9,567,721 9,787,579 12,874,343 12,759,302 57,222,234 57,493,120 4,746,191 4,795,211 2,489,334 2,491,822 1,392,327 1,377,581 89,304,989 89,763,510 Right-of-use-assets 1,383 2,420 236,745 238,275 8,822,883 8,405,902 25,974,249 26,859,174 224,936 225,680 259,108 278,669 36,862 37,155 35,556,166 36,047,275 Investment property - - 296,421 296,421 - - 4,522,725 4,522,725 30,069,361 31,311,293 - - 2,107,709 865,776 36,996,216 36,996,215 Intangible assets 8,469 8,342 251,824 249,290 564,143 535,896 291,177 308,129 959 29,336 1,232,569 1,316,147 179,064 158,098 2,528,205 2,605,238 Non-current financial assets 149,099 153,004 155,442 172,527 126,649 132,965 6,611,681 6,722,027 33,258 227,449 40,202,964 38,561,535 2,629,480 333,040 49,908,573 46,302,547 Other non-current assets 19,042 20,486 51,128 55,962 838,798 881,782 43,191 37,318 79,719,753 78,973,882 104,166 112,579 41,965 32,954 80,818,043 80,114,963 Segment non-current assets 1,190,832 1,243,147 10,559,281 10,800,054 23,226,816 22,715,847 94,665,257 95,942,493 114,794,458 115,562,851 44,288,141 42,760,752 6,387,407 2,804,604 295,112,192 291,829,748
Investments in equity accounted investees 12,291,650 13,444,422 - - - - 1,375,529 1,394,583 1,872,425 1,883,293 11,972,390 11,607,194 - - 27,511,995 28,329,492 Deferred tax assets 1,066,591 902,382 Goodwill 545,827 738,596 Eliminations / adjustments (5,602,462) (5,906,112) Total non-current assets 318,634,143 315,894,106
Inventories 384,699 729,864 2,036,975 2,065,766 4,855,229 5,361,774 337,333 426,131 40,678,731 41,407,129 8,190 12,514 310,009 198,206 48,611,166 50,201,384 Trade and other receivables 1,617,071 1,896,377 2,444,165 2,623,940 1,638,619 2,649,605 2,119,028 3,340,894 233,632 121,086 2,063,771 1,184,041 2,311,728 1,038,157 12,428,014 12,854,100 Short term investments 265,035 205,320 16,776 14,706 776,492 449,088 3,201,840 3,199,538 471,594 888,226 8,239,929 8,205,827 26,499,116 27,661,442 39,470,782 40,624,147 Cash in hand and at bank 1,691,294 4,495,130 245,714 323,546 859,782 240,814 1,224,936 1,463,798 1,325,757 1,726,800 688,513 1,063,919 2,734,992 2,117,976 8,770,988 11,431,983 Segment current assets 3,958,099 7,326,691 4,743,630 5,027,958 8,130,122 8,701,281 6,883,137 8,430,361 42,709,714 44,143,241 11,000,403 10,466,301 31,855,845 31,015,781 109,280,950 115,111,614
Other current assets 6,602,439 6,513,353 Eliminations / adjustments (3,500,709) (575,054) Total current assets 112,382,680 121,049,913 Total assets 431,016,823 436,944,019
Insurance contract liabilities - - - - - - - - - - 38,980,906 38,185,839 - - 38,980,906 38,185,839 Interest bearing loans and borrowings 15,000 - 1,042,346 1,080,214 - - 16,648,709 17,350,581 41,246,360 38,358,644 - - 213,458 289,705 59,165,873 57,079,144 Lease liability 2,007 2,333 88,651 87,887 7,937,536 7,334,023 12,094,519 12,321,600 432 432 166,555 163,849 - - 20,289,700 19,910,124 Employee benefit liabilities 101,775 94,899 580,084 548,681 272,596 254,210 840,668 813,935 14,091 110,174 212,389 204,579 436,726 317,434 2,458,329 2,343,912 Non-current financial liability - - - - - - - - 3,606,748 3,619,863 - - - - 3,606,748 3,619,863 Other non-current liabilities - - 118,066 117,940 - - 170,715 93,353 12,534,237 12,402,802 - - 482 487 12,823,500 12,614,582 Segment non-current liabilities 118,782 97,232 1,829,147 1,834,722 8,210,132 7,588,233 29,754,611 30,579,469 57,401,868 54,491,915 39,359,850 38,554,267 650,666 607,626 137,325,056 133,753,464
Deferred tax liabilities 8,029,939 8,294,955 Eliminations / adjustments (6,045,971) (6,154,472) Total non-current liabilities 139,309,024 135,893,947
Trade and other payables 1,076,117 1,853,419 1,914,559 1,726,140 8,049,999 8,797,570 2,389,876 2,281,147 3,008,799 6,005,379 3,254,876 2,708,601 2,098,238 1,032,217 21,792,464 24,404,473 Short term borrowings 1,251,148 4,073,865 - - 3,985,028 1,984,311 1,983,644 1,914,264 - - - - 12,074 12,074 7,231,894 7,984,514 Interest bearing borrowings - - 536,035 543,455 - - 1,562,663 1,081,608 2,477,159 3,310,571 - - 316,042 316,042 4,891,899 5,251,676 Lease liability - - 10,840 11,043 197,035 237,954 1,084,006 1,100,006 - - 83,796 101,110 - - 1,375,677 1,450,113 Bank overdrafts 532,512 409,700 964,966 1,637,251 7,916,881 9,200,324 4,256,920 3,789,101 701,698 937,611 172,604 331,411 2,163,545 1,446,072 16,709,126 17,751,470 Segment current liabilities 2,859,777 6,336,984 3,426,400 3,917,889 20,148,943 20,220,159 11,277,109 10,166,126 6,187,656 10,253,561 3,511,276 3,141,122 4,589,899 2,806,405 52,001,060 56,842,246
Income tax liabilities 1,307,940 1,747,597 Other current liabilities 1,410,875 1,623,137 Eliminations / adjustments (3,896,355) (2,886,770) Total current liabilities 50,823,520 57,326,210 Total liabilities 190,132,544 193,220,157
Total segment assets 5,148,931 8,569,838 15,302,911 15,828,012 31,356,938 31,417,128 101,548,394 104,372,854 157,504,171 159,706,092 55,288,544 53,227,053 38,243,252 33,820,385 404,393,141 406,941,362 Total segment liabilities 2,978,559 6,434,216 5,255,547 5,752,611 28,359,075 27,808,392 41,031,720 40,745,595 63,589,524 64,745,476 42,871,126 41,695,389 5,240,565 3,414,031 189,326,116 190,595,710
Note : All values are in LKR '000s, unless otherwise stated.
20 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
1 CORPORATE INFORMATION John Keells Holdings PLC is a public limited company incorporated and domiciled in Sri Lanka and listed on the Colombo Stock Exchange. Ordinary shares of the company are listed on the Colombo Stock Exchange and Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange.
2 INTERIM CONDENSED FINANCIAL STATEMENTS The financial statements for the period ended 30 June 2020 , includes “the Company” referring to John Keells Holdings 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 three months ended 30 June 2020 were authorised for issue by the Board of Directors on 29 July 2020.
4 BASIS OF PREPARATION AND GROUP'S ACCOUNTING POLICIES
4.1 Basis of Preparation The interim condensed consolidated financial statements for the three months ended 30 June 2020 have been prepared in accordance with LKAS 34 Interim Financial Reporting.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements as at 31 March 2020.
The presentation and classification of the financial statements of the previous period have been amended, where relevant, for better presentation and to be comparable with those of the current period.
The interim condensed financial statements are presented in Sri Lankan Rupees (LKR) and all values are rounded to the nearest thousand except when otherwise indicated.
4.2 Fair value measurement and related fair value disclosures As of 31 March 2020, all the listed equity instruments valued at fair value through profit or loss, amounting to LKR 2,870 Mn were transferred from level 1 to level 2 since as at 31 March 2020 as it showed factors which were indicative of an inactive market due to COVID-19 pandemic and determined the fair value of equity portfolio as of 31 March 2020, based on the closing traded prices that existed as of 31 December 2019.
However, by 30 June 2020, investor sentiment has improved slightly, providing tailwind to the market's recovery and Sri Lanka eases out of lockdown, triggering a relaxation of Sri Lanka's stock market. Therefore, all the listed equity instruments were measured based on the market prices as at 30 June 2020 and LKR 2,260 Mn were transferred back from Level 2 to Level 1 since there was an active market.
5 OPERATING SEGMENTSFor management purposes, the Group organised into business units based on their products and services and has seven reportable operating segments as follows:
TransportationConsumer Foods RetailLeisurePropertyFinancial ServicesOthers
6 CHANGE IN INSURANCE CONTRACT LIABILITIESThe results of Union Assurance PLC are consolidated line by line into the Group's consolidated income statement. The change in insurance contract liabilities represents the transfer to the Life Fund, the difference between all income and expenditure attributable to life policy holders during the period.
NOTES TO THE FINANCIAL STATEMENTS
21
7 NET FINANCE INCOME/EXPENSE
GROUP COMPANY
For the three months ended 30 JuneIn LKR ‘000s
2020 2019 2020 2019
Finance income
Interest income 1,735,822 1,873,498 356,506 555,848
Dividend income on
Financial assets at fair value through profit or loss 19,547 83,756 - -
Financial assets at fair value through other comprehensive income - 18,414 - 18,414
Investment related direct expenses (30,771) (27,264) - -
Exchange gains - 134,751 - 134,751
Total finance income 1,724,598 2,083,155 356,506 709,013
Finance cost
Interest expense on borrowings (574,709) (613,418) (30,603) (197,657)
Finance charge on lease liabilities (313,987) (264,375) - -
Fair value loss on financial assets at fair value through profit or loss (641,818) (283,504) - -
Exchange loss (443,647) - (443,647) -
Total finance cost (1,974,161) (1,161,297) (474,250) (197,657)
Net finance income/(expenses) (249,563) 921,858 (117,744) 511,356
8 TAX EXPENSE
GROUP COMPANY
For the three months ended 30 JuneIn LKR ‘000s
2020 2019 2020 2019
Income statement
Current income tax 232,794 480,692 6,407 63,999
Deferred tax charge/(reversal) (505,670) (23,293) - -
(272,876) 457,399 6,407 63,999
Other comprehensive Income
Deferred tax charge/(reversal) 1,098 18,819 - -
1,098 18,819 - -
22 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
NOTES TO THE FINANCIAL STATEMENTS
9 RELATED PARTY TRANSACTIONS
GROUP COMPANY
For the three months ended 30 JuneIn LKR ‘000s
2020 2019 2020 2019
Transactions with related parties
Subsidiaries
Purchase of goods - - 80 1,575
Rendering of services - - 261,628 285,524
Receiving of services - - 79,074 8,238
Rent paid - - 9,358 9,697
Dividend received - - - 648,995
Equity accounted investees
Sale of goods 1,126 13,065 - -
Rendering of services 89,508 212,675 52,096 80,228
Receiving of services 44,125 62,392 - 42
Interest received 24,709 9,232 11 -
Interest paid 3,802 4,770 - -
Dividend received - - 1,192,947 704,387
Key management personnel (KMP)
Sale of goods - - - -
Close family members of KMP
Sale of goods - - - -
Companies controlled/jointly controlled/significantly influenced by KMP and their close family members of KMP
Sale of goods - - - -
Post employment benefit plan
Contributions to the provident fund 57,692 64,821 9,980 13,375
10 SHARE INFORMATION 10.1 Stated capital Stated capital is represented by the number of shares in issue as given below:
As at 30-06-2020 31-03-2020
Ordinary shares * 1,318,550,768 1,318,550,768
* Includes global depository receipts of 1,320,942 (31 March 2020 - 1,320,942).
10.2 Public share holdingsPercentage of shares held by the public and the number of public shareholders is as given below:
As at 30-06-2020 31-03-2020
Public shareholding (%) 99.15 99.15
Number of public shareholders 13,478 11,737
Compliant under option 1 - Float adjusted market capitalization (LKR Bn) 160.15 150.87
10.3 Net assets per shareNet assets per share have been calculated, for all periods, based on the number of shares in issue as at 30 June 2020.
23
10.4 Market price per shareThe Company's highest, lowest and last traded market price is as given below:
For the quarter ended 30 June 2020 2019
Highest 132.00 156.00
Lowest 79.90 134.80
Last traded 122.50 138.70
10.5 Directors' share holdingsThe number of shares held by the Board of Directors (including their spouses) are as given below:
As at 30-06-2020 31-03-2020
K N J Balendra - Chairman/CEO 10,914,400 10,914,400
J G A Cooray - Deputy Chairman /Group Finance Director 207,105 207,105
D A Cabraal 45,137 45,137
A N Fonseka Nil Nil
M A Omar Nil Nil
M P Perera Nil Nil
S S H Wijayasuriya Nil Nil
10.6 Twenty largest shareholdersTwenty largest shareholders of the Company are as given below:
As at 30-06-2020 31-03-2020
Number ofshares
% Number of shares
%
1 Mr S E Captain 153,211,107 11.6 153,211,107 11.6
2 Citigroup Global Markets Limited Agency Trading Prop Securities A/C 141,854,717 10.8 141,854,717 10.8
3 Melstacorp PLC 128,917,111 9.8 128,917,111 9.8
4 Paints & General Industries Limited 87,164,219 6.6 93,787,615 7.1
5 Schroder International Selection Fund 42,475,806 3.2 42,475,806 3.2
6 HWIC Asia Fund 39,250,982 3.0 39,250,982 3.0
7 Norges Bank Account 2 32,906,565 2.5 28,394,516 2.2
8 Edgbaston Asian Equity Trust 27,978,963 2.1 29,849,703 2.3
9 Aberdeen Standard Asia Focus PLC 26,393,572 2.0 22,693,572 1.7
10 Aberdeen Standard SICAV I - Asia Pacific Equity Fund 19,898,613 1.5 19,898,613 1.5
11 Mr Kandiah Balendra 19,511,476 1.5 19,511,476 1.5
12 Fidelity Fund-Pacific 19,060,108 1.4 19,060,108 1.4
13 Employees Trust Fund Board 18,690,918 1.4 18,690,918 1.4
14 Mrs C S De Fonseka 16,760,381 1.3 13,668,417 1.0
15 Aberdeen Standard SICAV I - Asian Smaller Companies Fund 15,613,554 1.2 16,763,554 1.3
16 Mr R S Captain 15,064,303 1.1 35,733,994 2.7
17 Mrs S A J De Fonseka 15,009,183 1.1 13,122,826 1.0
18 Sri Lanka Insurance Corporation Ltd - Life Fund 14,625,018 1.1 4,119,718 0.3
19 Schroder Asian Growth Fund 13,164,018 1.0 13,164,018 1.0
20 BP2S London - Edinburgh Dragon Trust PLC 11,860,519 0.9 8,860,519 0.7
24 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED 30 JUNE 2020
11 DIVIDENDS PAID
For the three months ended 30 JuneIn LKR '000s
2020 2019
Final dividend 2018/19 LKR 1.00 - 1,318,173
12 CONTINGENCIES, CAPITAL AND OTHER COMMITMENTSThere 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 2020.
13 EVENTS AFTER THE REPORTING PERIODThe Board of Directors of the Company declared an interim dividend of LKR 0.50 per share for the financial year 2020/21. As required by section 56 (2) of the Companies Act No. 07 of 2007, the Board of Directors had confirmed that the Company satisfied the solvency test in accordance with section 57 of the Companies Act No. 07 of 2007, and obtained a certificate from auditors, prior to declaring the dividend, which is to be paid on or before 28 August 2020.
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE INFORMATION
Name of CompanyJohn Keells Holdings PLC
Legal FormPublic Limited Liability CompanyIncorporated in Sri Lanka in 1979Ordinary Shares listed on the Colombo Stock ExchangeGDRs listed on the Luxembourg Stock Exchange
Company Registration No.PQ 14
DirectorsK N J Balendra - Chairman/CEOJ G A Cooray - Deputy Chairman/Group Finance DirectorD A CabraalA N FonsekaM A OmarM P PereraS S H Wijayasuriya
Senior Independent DirectorA N Fonseka
Audit CommitteeA N Fonseka - ChairmanD A CabraalM P Perera
Human Resources and Compensation CommitteeD A Cabraal - ChairmanM A OmarS S H Wijayasuriya
Nominations CommitteeM A Omar - ChairmanK N J BalendraM P PereraS S H Wijayasuriya
Related Party Transaction Review CommitteeM P Perera - ChairpersonD A CabraalA N Fonseka
Project Risk Assessment CommitteeS S H Wijayasuriya - ChairmanK N J BalendraJ G A CoorayM P Perera
Registered Office of the Company117 Sir Chittampalam A. Gardiner MawathaColombo 2, Sri LankaTelephone : +94 11 230 6000Internet : www.keells.comEmail : [email protected]
SecretariesKeells Consultants (Pvt) Ltd.117 Sir Chittampalam A. Gardiner MawathaColombo 2, Sri LankaTelephone : +94 11 230 6245Facsimile : +94 11 243 9037
Investor RelationsJohn Keells Holdings PLC117 Sir Chittampalam A. Gardiner MawathaColombo 2, Sri LankaTelephone : +94 11 230 6170Facsimile : +94 11 230 6160Email : [email protected]
Sustainability, Enterprise Risk Management and Group Initiatives186 Vauxhall Street, Colombo 2, Sri LankaTelephone : +94 11 230 6182Facsimile : +94 11 230 6249Email : [email protected]
Contact for MediaCorporate Communications DivisionJohn Keells Holdings PLC117 Sir Chittampalam A. Gardiner MawathaColombo 2, Sri LankaTelephone : +94 11 230 6191Email : [email protected]
AuditorsErnst & YoungChartered AccountantsP.O. Box 101Colombo, Sri Lanka
Bankers for the CompanyBank of CeylonCitibank N.A.Commercial Bank of CeylonDeutsche Bank A.G.DFCC BankHatton National BankHongkong and Shanghai Banking CorporationNations Trust BankPeople’s BankSampath BankSeylan BankStandard Chartered Bank
Depository for GDRsCitibank N.A. New York
www.keells.com