Keeping our eye on the next level - John Keells Holdings PLC · Corporate Social Responsibility Out of 1,012 John Keells scholars of 2012/13, who ... of the Faculty of Management

I N T E R I M C O N D E N S E D F I N A N C I A L S T A T E M E N T S T H R E E M O N T H S E N D E D 3 0 T H J U N E 2 0 1 3

JOHN KEELLS

HOLDINGS PLC

Keep ing our e ye on th e n ex t l e v e l

Keep ing our e ye on th e n ex t l e v e l

Chairman’s Message 1

Consolidated Income Statement 3

Consolidated Statement of

Comprehensive Income 4


Financial Position 5


Cash Flow 6


Changes in Equity 8

Company Income Statement 9

Company Statement of

Comprehensive Income 10

Company Statement of Financial

Position 11

Company Statement of Cash Flow 12

Company Statement of

Changes in Equity 13

Operating Segment Information 14

Notes to the Interim Condensed

Financial Statements 16

Interim Financial Statements l 1

Chairman’s Message Financial Information

CHAIRMAN’S MESSAGE

Dear Stakeholder,

The profit attributed to the equity holders for the first quarter

of the financial year 2013/14 at Rs.1.59 billion reflects a

4 per cent decrease over the corresponding period in the

previous financial year.

The Group profit before tax (PBT) for the first quarter of the

financial year 2013/14 at Rs.2.20 billion was a decrease of

8 per cent over the PBT of Rs.2.40 billion recorded in the

corresponding period in the previous financial year.

The revenue for the first quarter of the financial year

2013/14 of Rs.20.01 billion remained in line with the

revenue recorded during the same period last year.

The results of the first quarter of the financial year are a

reflection of current macroeconomic challenges emanating

from the decisive actions taken by the Government, including

the implementation of cost based electricity pricing, over the

past year to stabilise an over-heated economy and reduce

the budget deficit. Whilst these macroeconomic factors

may have a negative impact on the performance of the

Group in the short term, we believe that your Group is well

positioned to capitalise on the emerging growth opportunities

because of its strong fundamentals and we, therefore, remain

optimistic of the future. Single digit inflation, lower interest

rates and the planned mega infrastructure developments

are expected to translate into increased demand which will

contribute positively to economic growth.

Taking this view of the future, your Company has announced

an integrated resort development, subject to the Project

Company, Waterfront Properties (Private) Limited, receiving

all the requisite approvals and your Company receiving

shareholder approval, where necessary. The Project Company

has entered into an agreement with the Board of Investment

of Sri Lanka (BOI) as a precursor to facilitating the requisite

approvals. Subsequent to the signing of the BOI agreement,

the first Gazette as per the Strategic Development Projects

Act was published by the Government on the 18th of July.

The Waterfront Project is an integrated resort located at

Glennie Street/Justice Akbar Mawatha and consists of

multiple businesses including a luxury hotel, convention

center, entertainment and gaming facilities, international

standard shopping mall, luxury condominiums, serviced

apartments and office space. The concept of integrated

resorts has gained popularity, particularly in the South East

Asian region. Sri Lanka’s proximity to these destinations

and to key source markets strengthens its offering as an

exciting, and emerging, leisure destination in South Asia.

Transportation

The Transportation industry group PBT of Rs.748 million

in the first quarter of 2013/14 was a decrease of 22 per

cent compared to the first quarter of the previous financial

year [2012/13 Q1: Rs.957 million]. The decline in PBT

was mainly on account of a lower contribution from the

bunkering business as a result of lower volumes and

reduced margins, a phenomenon experienced by the

industry globally, whilst the ports, logistics and airline

businesses also saw reductions on the back of changes

in volumes and revenues. With the completion and

commencement of operations of the South Terminal,

the capacity constraints in the Port of Colombo will be

overcome and the Port will be well geared to cater to

increased domestic and transshipment volumes.

Leisure

The Leisure industry group PBT of Rs.461 million in the

first quarter of 2013/14 was a decrease of 29 per cent over

the first quarter of the previous financial year [2012/13

Q1: Rs.648 million], primarily as a result of the lower than

expected performance of Sri Lanka Resorts with the new

resort, Cinnamon Bey, in particular, still being established

in the market. Additionally, there was an impact on lower

interest rate bearing foreign currency denominated loans

as a result of a depreciated Sri Lankan Rupee at the end

of the quarter. Whilst overall tourism arrivals to the country

continue to demonstrate growth, they have not translated

into room nights in the star category hotels. This, we

believe, is the result of a combination of the economic

issues in Europe and the lack of a focused destination

marketing and branding strategy. However, occupancy

continued to be strong in the City Hotels where we

increased our market share, while the Maldivian Resorts

sector performed well benefitting from higher average room

rates and increased occupancies.

Property

The Property industry group PBT of Rs.142 million in

the first quarter of 2013/14 was an increase of 120

per cent compared to the corresponding period in the

previous financial year [2012/13 Q1: Rs.65 million],

mainly on account of the revenue recognition cycle of the

“OnThree20” development. The super-structure of the 37

storeyed towers of OnThree20 was completed during the

quarter under review while the total number of apartments

sold is in excess of 80 per cent. Construction of the Group’s

newest residential apartment development, “7th Sense” on

Gregory’s Road, commenced during the quarter with over

50 per cent of the units sold as of-date.

Consumer Foods and Retail

The Consumer Foods and Retail industry group PBT

of Rs.249 million in the first quarter of 2013/14 was

a decrease of 36 per cent over the first quarter of the

previous financial year [2012/13 Q1: Rs.393 million].

PROGRESSIVE

2 l JOHN KEELLS HOLDINGS PLC l www.keells.com

CHAIRMAN’S MESSAGE

Whilst the soft drinks segment maintained its market share,

consumer demand was impacted by the adverse weather

conditions which prevailed in many parts of the country

and the lower discretionary expenditure. Although the ice

cream business lost volume due to the aforesaid reasons, it

increased its market share through enhanced distribution.

Keells Food Products consolidated its production by utilising

the increased capacity in the new plant in Pannala. The

Retail sector completed the roll out of its “way forward”

strategy in its remaining retail outlets. Most of the outlets

have witnessed growth during the quarter under review.

Financial Services

The Financial Services industry group PBT of Rs.259 million

in the first quarter of 2013/14 was marginally higher

compared to the corresponding period last year [2012/13

Q1: Rs.257 million]. The prevailing macro-economic

conditions resulted in modest loan growth across the

banking industry. The performance of the Bank in the first

quarter was impacted by the planned non-recurring costs

associated with the development of its positioning strategy

which will be spread throughout this financial year. The

profitability of the Insurance business was impacted by

higher claim ratios in the non-life business compared to

the previous year. The Stock Broking business increased

its market share, although overall trading activity at the

Colombo Stock Exchange was relatively low.

Information Technology

The Information Technology industry group PBT of Rs.65

million in the first quarter of 2013/14 was an increase

over the corresponding period in the previous financial

year [2012/13 Q1: Rs.6 million]. The improvement in

performance was driven primarily by the Business Process

Outsourcing (BPO) business on account of the expansion of

its client base. The Office Automation business witnessed

growth as it continued to expand its range of products.

Other, including Plantation Services

Other, comprising of Plantation Services and the Corporate

Centre, recorded a PBT of Rs.275 million in the first quarter

of 2013/14 [2012/13 Q1: Rs.72 million]. The performance

was primarily attributed to an increase in net interest

income and a decrease in exchange losses compared to the

previous year.

Sustainability Initiatives

During the quarter, the Group took further steps in

integrating sustainability within its business goals by

broadening the scope of impact assessment in the areas

of indirect energy consumption and other greenhouse gas

emissions.

The Group continues to track key indicators covering carbon

footprint, water usage, waste management, employee

health & safety and staff training. The Group’s overall

carbon footprint at an estimated 18,657 MT is an increase

of 8 per cent [2012/13 Q1: 17,234 MT], while the Group’s

water consumption at an estimated 414,934 cubic meters

is an increase of 4 per cent [2012/13 Q1: 399,197 cubic

meters] over the corresponding period last year, largely as

a result of the expanded reporting scope. The number of

occupational injuries in the Group during the first quarter

increased to 63 [2012/13 Q1: 45]. The number of hours of

training provided to staff was at approximately 12 hours per

employee [2012/13 Q1: 9 hours].

Corporate Social Responsibility

Out of 1,012 John Keells scholars of 2012/13, who

became eligible to sit for the final examination under the

John Keells English Language Scholarship Programme, a

total of 996 children passed the final examination.

The John Keells Foundation successfully coordinated a

comprehensive industrial tour of the John Keells Group for

a group of 94 undergraduates (and 04 faculty members)

of the Faculty of Management Studies and Commerce

of the University of Jaffna in June 2013. The tour was

aimed at creating greater awareness of potential career

opportunities.

Under the John Keells HIV and AIDS Awareness Campaign,

a total of 1,005 persons were educated via 14 sessions

during the quarter, including corporate staff and members

of the Sri Lanka Army.

Under the John Keells Vision Project one eye camp was

held in the first Quarter at the Navy Camp in Delft Island.

Out of a total of 500 patients registered, 70 cataract

patients were identified of whom 56 were operated. A total

of 278 spectacles were also donated.

Under the Village Adoption Programme, initial activities

benefiting different community segments are underway in

certain villages of the Mullaitivu District and Trincomalee

District in the Northern and Eastern provinces of the

country.

Susantha Ratnayake

Chairman

26 July 2013



CONSOLIDATED INCOME STATEMENT

For the three months ended 30th June Note 2013 2012 Change %

Continuing operations

Sale of goods 11,321,732 11,673,741 (3)

Rendering of services 8,690,308 8,339,141 4

Revenue 20,012,040 20,012,882 -

Cost of sales (14,955,754) (14,887,228) -

Gross profit 5,056,286 5,125,654 (1)

Other operating income 340,222 408,508 (17)

Distribution expenses (837,758) (735,308) 14

Administrative expenses (2,354,227) (2,467,344) (5)

Other operating expenses (733,646) (611,430) 20

Results from operating activities 1,470,877 1,720,080 (14)

Finance cost (369,311) (465,485) (21)

Finance income 1,322,957 930,900 42

Net finance income 953,646 465,415 105

Change in insurance contract liabilities 6 (926,371) (581,827) 59

Share of results of equity accounted investees 701,570 792,917 (12)

Profit before tax 2,199,722 2,396,585 (8)

Tax expense 7 (454,473) (540,025) (16)

Profit for the period 1,745,249 1,856,560 (6)

Attributable to :

Equity holders of the parent 1,586,397 1,658,718 (4)

Non-controlling interest 158,852 197,842 (20)

1,745,249 1,856,560 (6)

Earnings per share Rs. Rs.

Basic 1.85 1.95

Diluted 1.84 1.94

Dividend per share 1.50 1.50

Note : All values are in Rupees ‘000s, unless otherwise stated.

Figures in brackets indicate deductions.

The above figures are not audited.

PROGRESSIVE


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the three months ended 30th June Note 2013 2012

Profit for the period 1,745,249 1,856,560

Other comprehensive income

Currency translation of foreign operations 255,915 280,110

Revaluation of land and buildings (1,865) -

Share of other comprehensive income of equity-accounted investees 194,633 316,106

Net (loss) / gain on available-for-sale financial assets 38,457 (371,558)

Tax on other comprehensive income 7 - -

Other comprehensive income for the period, net of tax 487,140 224,658

Total comprehensive income for the period, net of tax 2,232,389 2,081,218

Attributable to :

Equity holders of the parent 2,029,704 1,827,700

Non-controlling interest 202,685 253,518

2,232,389 2,081,218






CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30.06.2013 31.03.2013 ASSETSNon-current assetsProperty, plant and equipment 49,190,178 49,272,979 Lease rentals paid in advance 9,585,723 9,513,671 Investment property 9,316,821 9,294,936 Intangible assets 2,649,908 2,689,514 Investments in associates 16,531,774 15,724,361 Other non current financial assets 17,546,051 18,816,693 Deferred tax assets 241,207 212,227 Other non current assets 4,252,195 3,575,749 109,313,857 109,100,130 Current assetsInventories 4,083,492 3,998,900 Trade and other receivables 11,851,030 12,775,046 Amounts due from related parties 75,443 207,455 Other current assets 3,502,770 2,895,900 Short term investments 30,256,682 26,586,054 Cash in hand and at bank 4,046,762 3,554,804 53,816,179 50,018,159 Total assets 163,130,036 159,118,289 EQUITY AND LIABILITIESEquity attributable to equity holders of the parentStated capital 26,555,676 26,480,396 Capital reserves - - Revenue reserves 43,052,129 42,704,203 Other components of equity 21,077,878 20,634,571 90,685,683 89,819,170 Non-controlling interest 11,073,976 11,366,240 Total equity 101,759,659 101,185,410 Non-current liabilitiesInsurance contract liabilities 18,265,774 17,388,494 Borrowings 12,347,253 11,857,764 Deferred tax liabilities 1,242,864 1,222,210 Employee benefit liabilities 1,422,831 1,385,072 Other deferred liabilities 61,044 50,228 Other non-current liabilities 533,066 530,075 33,872,832 32,433,843 Current liabilitiesTrade and other payables 13,767,823 14,608,263 Amounts due to related parties 8,521 15,280 Income tax payable 1,096,296 981,013 Short term borrowings 2,518,313 1,853,767 Current portion of borrowings 2,928,429 3,048,936 Other current liabilities 1,897,720 1,635,534 Bank overdrafts 5,280,443 3,356,243 27,497,545 25,499,036

Total equity and liabilities 163,130,036 159,118,289

Rs. Rs.Net assets per share 105.73 104.78

Note : All values are in Rupees ‘000s, unless otherwise stated. The above figures are not audited.

I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007.

M J S RajakariarGroup Financial Controller The Board of Directors is responsible for the preparation and presentation of these financial statements.

S C Ratnayake J R F PeirisChairman Group Finance Director26 July 2013

PROGRESSIVE


CONSOLIDATED STATEMENT OF CASH FLOW

For the three months ended 30th June Note 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIESProfit before working capital changes A 1,558,928 2,315,541 (Increase) / Decrease in inventories (84,592) 1,347,793 (Increase) / Decrease in trade and other receivables 1,132,386 438,737 (Increase) / Decrease in other current assets 313,282 229,688 (Increase) / Decrease in other non-current assets (676,446) (662,910)Increase / (Decrease) in trade and other payables (844,208) (471,994)Increase / (Decrease) in other current liabilities 255,802 14,136 Increase / (Decrease) in insurance contract liabilities 877,280 598,136 Cash generated from operations 2,532,432 3,809,127 Finance income received 1,241,994 924,957 Finance costs paid (361,788) (232,643)Dividend received - 131,189 Tax paid (1,184,895) (299,624)Gratuity paid (33,540) (14,681)Net cash flow from operating activities 2,194,203 4,318,325 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIESPurchase and construction of property, plant and equipment (492,891) (1,057,500)Purchase of intangible assets (19,672) (3,238)Addition to investment property (21,885) (98,872)Acquisition of associates - (28,390)Proceeds from sale of property, plant and equipment and intangible assets 6,351 12,841 Proceeds from sale of financial instruments - fair valued through profit or loss 180,760 52,590 Purchase of financial instruments - fair valued through profit or loss (160,249) (84,461)(Purchase) / disposal of short term investments (net) (85,668) (1,209,570)(Purchase) / disposal of other non current financial assets (net) 1,309,099 693,367 Net cash flow from / (used in) investing activities 715,845 (1,723,233) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIESProceeds from issue of shares 75,280 721,579 Direct cost on issue of shares (707) - Acquisition of non-controlling interest - (516)Dividend paid to equity holders of parent (1,286,460) (1,275,977)Dividend paid to shareholders with non-controlling interest (446,253) (624,516)Proceeds from long term borrowings 1,447,174 193,898 Repayment of long term borrowings (1,271,362) (875,654)Proceeds from/(repayment of) other financial liabilities (net) 664,546 (929,057)Net cash flow from / (used in) financing activities (817,782) (2,790,243) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 2,092,266 (195,151) CASH AND CASH EQUIVALENTS AT THE BEGINNING 16,860,241 21,518,594

CASH AND CASH EQUIVALENTS AT THE END 18,952,507 21,323,443 ANALYSIS OF CASH AND CASH EQUIVALENTSFavorable balancesShort term investments 20,186,188 20,932,609 Cash in hand and at bank 4,046,762 3,095,993 Unfavorable balances Bank overdrafts (5,280,443) (2,705,159)Total cash and cash equivalents 18,952,507 21,323,443

Note : All values are in Rupees ‘000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited.



For the three months ended 30th June 2013 2012 A Profit before working capital changes Profit before tax 2,199,722 2,396,585 Adjustments for: Finance income (1,322,957) (930,900) Finance cost 369,311 465,485 Share of results of equity accounted investees (701,570) (792,917) Profit on sale of non-current investments 11,461 - Depreciation of property, plant and equipment 611,222 523,092 Provision for impairment losses - 99,769 (Profit) / loss on sale of property, plant and equipment and intangible assets 11,600 (11,233) Amortisation of lease rentals paid in advance 165,835 170,826 Amortisation of intangible assets 61,946 62,293 Amortisation of other deferred liabilities (129) (128) Gratuity provision and related costs 72,032 56,609 Unrealised (gain) / loss on foreign exchange (net) 80,455 276,060 1,558,928 2,315,541


PROGRESSIVE


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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COMPANY INCOME STATEMENT

For the three months ended 30th June Note 2013 2012 Change %

Continuing operations

Rendering of services 181,687 134,905 35

Revenue 181,687 134,905 35

Cost of sales (99,008) (85,378) 16

Gross profit 82,679 49,527 67

Dividend income 2,191,598 2,360,046 (7)

Other operating income 2,350 4,928 (52)

Administrative expenses (295,253) (292,176) 1

Other operating expenses (9,574) (9,092) 5

Results from operating activities 1,971,800 2,113,233 (7)

Finance cost (90,959) (151,937) (40)

Finance income 384,722 281,732 37

Net finance income 293,763 129,795 126

Profit before tax 2,265,563 2,243,028 1

Tax expense 7 (32,532) (4,752) 585

Profit for the period 2,233,031 2,238,276 -

Rs. Rs.

Dividend per share 1.50 1.50




PROGRESSIVE


COMPANY STATEMENT OF COMPREHENSIVE INCOME

For the three months ended 30th June Note 2013 2012

Profit for the period 2,233,031 2,238,276

Other comprehensive income

Net (loss)/gain on available-for-sale financial assets 43,481 (314,681)

Tax on other comprehensive income 7 - -

Other comprehensive income for the period, net of tax 43,481 (314,681)

Total comprehensive income for the period, net of tax 2,276,512 1,923,595




COMPANY STATEMENT OF FINANCIAL POSITION

As at 30.06.2013 31.03.2013

ASSETS

Non-current assets

Property, plant and equipment 70,038 75,309

Intangible assets 82,143 74,004

Investments in subsidiaries and joint ventures 26,522,694 26,641,307

Investments in associates 9,821,364 9,821,364

Other non current financial assets 1,774,566 1,710,653

Other non current assets 10,310 10,310

38,281,115 38,332,947

Current assets

Trade and other receivables 1,057,226 994,862

Amounts due from related parties 557,072 518,084

Other current assets 388,063 384,966

Short term investments 13,624,488 12,551,540

Cash in hand and at bank 586,128 63,159

16,212,977 14,512,611

Total assets 54,494,092 52,845,558

EQUITY AND LIABILITIES

Stated capital 26,555,676 26,480,396

Revenue reserves 21,168,327 20,221,756

Other components of equity 126,938 83,457

Total equity 47,850,941 46,785,609

Non-current liabilities

Borrowings 3,212,279 3,752,621

Employee benefit liabilities 137,753 134,075

3,350,032 3,886,696

Current liabilities

Trade and other payables 241,213 229,990

Amounts due to related parties 12,679 13,156

Current portion of borrowings 1,308,636 1,314,424

Other current liabilities 8,102 105,478

Bank overdrafts 1,722,489 510,205

3,293,119 2,173,253

Total equity and liabilities 54,494,092 52,845,558

Rs. Rs.

Net assets per share 55.79 54.58



I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007.

M J S Rajakariar

Group Financial Controller

The Board of Directors is responsible for the preparation and presentation of these financial statements.

S C Ratnayake J R F Peiris

Chairman Group Finance Director

26 July 2013

PROGRESSIVE


COMPANY STATEMENT OF CASH FLOW

For the three months ended 30th June 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 2,265,563 2,243,028 Finance income (384,722) (281,732) Dividend income (2,191,598) (2,360,046) Finance cost 90,959 151,937 Depreciation of property, plant and equipment 6,041 6,520 Profit on sale of property, plant and equipment (4) (2,696) Amortisation of intangible assets 5,961 4,376 Provision for impairment losses 118,613 99,769 Gratuity provision and related costs 6,198 5,686 Profit before working capital changes (82,989) (133,158)

(Increase) / Decrease in trade and other receivables (36,885) 559,119(Increase) / Decrease in other current assets (2,165) (85,377) Increase / (Decrease) in trade and other payables 10,747 (43,993)Increase / (Decrease) in other current liabilities (97,376) (2,127) Cash generated from operations (208,668) 294,464 Finance income received 384,722 255,981 Finance expenses paid (87,552) (64,430)Dividend received 2,218,061 2,369,445 Tax paid (33,461) (12,946)Gratuity paid (2,519) (2,518)Net cash flow from operating activities 2,270,583 2,839,996

CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIESPurchase and construction of property, plant and equipment (769) (804)Purchase of intangible assets (14,099) - Increase in interest in subsidiaries - (15,526)Increase in interest in associates - (28,389)Proceeds from sale of property, plant and equipment 4 6,696 (Purchase)/disposal of short term investments (net) 4,469,699 (1,510,948)(Purchase)/disposal of other non current financial assets (net) (20,431) 3,946Net cash flow from/(used in) investing activities 4,434,404 (1,545,025)

CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIESProceeds from issue of shares 75,280 721,579 Dividend paid (1,286,460) (1,275,977)Repayment of long term borrowings (640,475) (664,176)Net cash flow from / (used in) financing activities (1,851,655) (1,218,574)

NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS 4,853,332 76,397

CASH AND CASH EQUIVALENTS AT THE BEGINNING 5,433,342 8,919,099

CASH AND CASH EQUIVALENTS AT THE END 10,286,674 8,995,496

ANALYSIS OF CASH & CASH EQUIVALENTSFavorable balancesShort term investments 11,423,035 8,983,135 Cash in hand and at bank 586,128 61,594 12,009,163 9,044,729 Unfavorable balancesBank overdrafts (1,722,489) (49,233)Total cash and cash equivalents 10,286,674 8,995,496




COMPANY STATEMENT OF CHANGES IN EQUITY

Stated Available for Revenue Total

capital sale reserve reserves Equity

As at 1 April 2013 26,480,396 83,457 20,221,756 46,785,609

Profit for the period - - 2,233,031 2,233,031

Other comprehensive income - 43,481 - 43,481

Total comprehensive income - 43,481 2,233,031 2,276,512

Exercise of share option 75,280 - - 75,280

Final dividend paid - 2012/13 - - (1,286,460) (1,286,460)

As at 30 June 2013 26,555,676 126,938 21,168,327 47,850,941

As at 1 April 2012 25,110,528 229,595 15,754,217 41,094,340

Profit for the period - - 2,238,276 2,238,276

Other comprehensive income - (314,681) - (314,681)

Total comprehensive income - (314,681) 2,238,276 1,923,595

Exercise of share option 721,579 - - 721,579

Final dividend paid - 2010/11 - - (1,275,977) (1,275,977)

As at 30 June 2012 25,832,107 (85,086) 16,716,516 42,463,537




PROGRESSIVE


OPERATING SEGMENT INFORMATION

BUSINESS SEGMENTS

The following tables present revenue, profit information and segment assets regarding the Group’s operating segments.

Transportation Leisure Property Consumer Foods & Retail

For the three months

ended 30th June 2013 2012 2013 2012 2013 2012 2013 2012

External revenue 4,128,503 5,307,450 4,116,630 3,912,911 672,752 611,541 6,154,518 5,986,843

Inter segment revenue 102,988 92,194 35,438 11,649 79,234 68,528 91,660 14,997

Total Segment revenue 4,231,491 5,399,644 4,152,068 3,924,560 751,986 680,069 6,246,178 6,001,840

Eliminations of inter

segment revenue

Net Revenue

Segment result 229,709 337,965 473,645 683,531 127,376 30,809 251,964 408,164

Finance cost (12,960) (23,906) (153,437) (103,570) (17,176) (2,674) (42,734) (20,445)

Finance income 41,204 52,417 141,889 68,101 35,780 38,978 43,104 7,815

Share of results of equity

accounted investees 490,324 590,949 - - - - - -

Eliminations / adjustments (604) (588) (1,100) - (3,518) (2,427) (3,000) (3,000)

Profit / (loss) before tax 747,673 956,837 460,997 648,062 142,462 64,686 249,334 392,534

Tax expense (44,022) (71,189) (66,847) (45,006) (17,150) (22,617) (64,679) (128,172)

Profit / (loss) for the period 703,651 885,648 394,150 603,056 125,312 42,069 184,655 264,362

Segment assets 6,586,187 8,137,942 48,234,607 50,021,694 14,317,293 11,136,074 16,466,328 12,768,537

Investments in associates

Deferred tax assets

Goodwill

Other current assets

Eliminations / adjustments

Total Assets

Purchase and

construction of PPE 6,580 6,593 249,364 703,708 13,410 1,558 126,224 256,505

Addition to IA - - - - - - 2,268 623

Depreciation of PPE 19,407 23,404 320,733 252,499 5,833 2,535 168,071 146,391

Amortisation /

impairment of IA 1,207 2,950 - - - - 3,974 3,046

Amortisation of LRPA - - 162,623 170,641 - - - -

Gratuity provision and

related costs 4,061 5,210 21,821 16,901 300 300 24,171 22,547




PPE (Property, plant and equipment), IA (Intangible assets), LRPA (Lease rentals paid in advance)



Financial Services Information Technology Others Group Total

2013 2012 2013 2012 2013 2012 2013 2012

2,229,523 1,997,392 1,879,275 1,431,946 830,839 764,799 20,012,040 20,012,882

26,998 24,449 75,117 72,736 141,510 144,713 552,945 429,266

2,256,521 2,021,841 1,954,392 1,504,682 972,349 909,512 20,564,985 20,442,148

(552,945) (429,266)

20,012,040 20,012,882

31,579 174,409 8,514 29,581 (108,237) (24,167) 1,014,550 1,640,292

(1) (145,338) (20,247) (15,492) (122,756) (154,060) (369,311) (465,485)

27,435 12,819 3,496 1,537 389,197 269,000 682,105 450,667

200,480 215,338 - (9,979) 10,766 (3,391) 701,570 792,917

- - 72,820 - 106,210 (15,791) 170,808 (21,806)

259,493 257,228 64,583 5,647 275,180 71,591 2,199,722 2,396,585

(65,933) (85,027) (11,585) (5,385) (184,257) (182,629) (454,473) (540,025)

193,560 172,201 52,998 262 90,923 (111,038) 1,745,249 1,856,560

28,465,997 23,378,562 3,641,604 3,283,744 24,200,021 19,860,912 141,912,037 128,587,465

16,531,774 16,640,319

241,207 163,894

950,884 717,900

3,502,770 1,708,244

(8,636) (15,201,104)

163,130,036 132,616,718

44,406 55,776 25,452 14,775 27,455 18,585 492,891 1,057,500

- - 3,305 2,615 14,099 - 19,672 3,238

37,841 36,019 29,202 32,635 30,135 29,609 611,222 523,092

47,066 46,854 3,738 5,067 5,961 4,376 61,946 62,293

- - - - 3,212 185 165,835 170,826

8,132 7,806 3,571 3,230 9,976 9,774 72,032 65,768

PROGRESSIVE


NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

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 2013, 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 3 months ended 30 June 2013 were authorised

for issue by the Board of Directors on 26 July 2013.

4 BASIS OF PREPARATION

The interim condensed financial statements have been prepared in compliance with Sri Lanka Accounting Standard 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 March 2013.

The presentation and classification of the financial statements of the previous year have been amended, where relevant, 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 seven

reportable operating segments as follows:

Transportation Leisure

Property Consumer Foods & Retail

Financial Services Information Technology

Others

6 CHANGE IN LIFE INSURANCE CONTRACT LIABILITIES

The results of Union Assurance PLC’s life business segment is consolidated line by line into the Group’s consolidated income

statement. The change in life 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.

7 TAX EXPENSE

Group Company

For the three months ended 30th June 2013 2012 2013 2012

Income statement

Current income tax 463,204 547,584 32,532 4,752

Deferred tax (8,731) (7,559) - -

Other comprehensive Income

Deferred tax - - - -

454,473 540,025 32,532 4,752



8 RELATED PARTY TRANSACTIONS

Group Company

For the three months ended 30th June 2013 2012 2013 2012

Transactions with related parties

Subsidiaries

(Purchase) / sale of goods - - 996 (287)

(Receiving) / rendering of services - - 155,381 120,607

(Purchase) / sale of property plant & equipment - - - -

Loans given - - - 45,000

Interest received / (paid) - - - 15,791

Rent received / (paid) - - (29,012) (12,819)

Guarantees received / (paid) - - - -

Joint Ventures

(Receiving) / rendering of services 15,628 8,513 - -

Associates

(Purchase) / sale of goods 1,903 - - -

(Receiving) / rendering of services 10,527 6,924 900 -

Interest received / (paid) 43,897 111,477 19,386 71,489

Loans taken - - - -

Leases taken - - - -

Key management personnel (KMP)

(Receiving) / rendering of services - - - -

Close family members of KMP

(Receiving) / rendering of services - - - -

Companies controlled / jointly controlled / significantly

Influenced by KMP and their close family members

(Purchase) / sale of goods - - - -

Post employment benefit plan

Contributions to the provident fund 87,378 49,204 19,121 10,331

PROGRESSIVE


NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

9 SHARE INFORMATION

9.1 Public share holdings

The percentage of shares held by the public as at 30 June 2013 was 98.45 % (31 March 2013 - 88.36 %).

9.2 Directors’ share holdings

The number of shares held by the Board of Directors are as follows:

As at 30-06-2013 31-3-2013

S C Ratnayake – Chairman/CEO 5,299,066 5,299,066

A D Gunewardene – Deputy Chairman 6,481,720 6,481,720

J R F Peiris 1,371,392 1,371,392

E F G Amerasinghe 5,514 5,514

T Das Nil Nil

S S Tiruchelvam 1,300 1,300

I Coomaraswamy Nil Nil

A R Gunasekara 107,866 107,866

M A Omar Nil Nil

9.3 Twenty largest shareholders of the Company are as follows:

As at 30-06-2013 31-3-2013

Number of % Number of %

shares shares % shares

1 Mr S E Captain 84,774,813 9.9% 82,431,062 9.6%

2 Broga Hill Investments Limited 84,681,555 9.9% 74,591,759 8.7%

3 Janus Overseas Fund 75,942,233 8.9% 86,536,133 10.1%

4 Paints & General Industries Limited 50,007,835 5.8% 49,086,579 5.7%

5 Deutsche Bank AG – London 33,628,953 3.9% 32,930,641 3.8%

6 Aberdeen Global-Asian Smaller Companies Fund 32,930,435 3.8% 26,563,207 3.1%

7 Melstacorp (Private) Limited 31,499,883 3.7% 31,499,883 3.7%

8 Aberdeen Global-Emerging Markets Smaller companies fund 22,990,207 2.7% 30,850,435 3.6%

9 Estate of Mr A A N De Fonseka 19,952,358 2.3% 19,952,358 2.3%

10 Aberdeen Global Asia Pacific Equity Fund 19,047,737 2.2% 19,047,737 2.2%

11 Janus Aspen series Overseas Portfolio Fund 18,303,333 2.1% 18,303,333 2.1%

12 Schroder International Selection Fund 13,531,656 1.6% 13,172,166 1.5%

13 Mr K Balendra 13,141,807 1.5% 13,141,807 1.5%

14 J P Morgan Clearing Corporation 11,365,142 1.3% 11,518,889 1.3%

15 Rubber Investment Trust Limited A/C no.1 10,991,944 1.3% 11,535,763 1.3%

16 London- Edinburgh Dragon Trust PLC 10,936,664 1.3% 10,936,664 1.3%

17 BBH-Matthews International Funds 9,556,504 1.1% 9,556,504 1.1%

18 Aberdeen Asia Pacific Fund 9,074,229 1.1% 9,074,229 1.1%

19 Mrs D Kumaranayagam 7,751,552 0.9% 7,751,552 0.9%

20 Aberdeen Institutional Commingled Funds, LLC 7,530,938 0.9% 7,325,938 0.9%



9.4 Stated capital

Stated capital is represented by number of shares in issue as given below:

As at 30-06-2013 31-03-2013

Ordinary shares 856,577,088 856,112,828

Global depository receipts 1,122,069 1,129,677

9.5 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 June 2013.

9.6 Market price per share

For the quarter ended 30th June 2013 2012

Rs. Rs.

Highest 299.80 249.70

Lowest 243.50 219.00

Last traded 251.50 247.00

10 DIVIDENDS PAID

A final dividend of Rs.1.50 per share for the financial year ended 31 March 2013 was paid on 17 June 2013.

11 DISPOSAL OF ASSOCIATE

In June 2013, as per sales and purchase agreement the Group disposed of its interest in one of its associates, namely NDO India

(Pvt) Ltd. The resultant loss of Rs.11mn has been reflected in the Consolidated Income Statement.

12 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 2013.

13 EVENTS AFTER THE REPORTING PERIOD

John Keells holdings PLC. (JKH) has proposed to the Government of Sri Lanka a Project, valued in excess of USD 650mn, involving

the developing, owning, managing, operating, selling, leasing and renting a luxury multi/mixed use Integrated Resort (the “Project”)

in the land owned and occupied by its subsidiaries Ceylon Cold Stores PLC (CCS), John Keells PLC (JKL), John Keells Properties

(Pvt) Ltd (JKP) and Waterfront Properties (Pvt) Ltd (WPL) in Colombo 2. John Keells Holdings PLC together with its subsidiaries CCS,

JKL and JKP will be majority shareholders in the Project Company, WPL. The Board of Directors has approved the Project subject

to the Company receiving all the necessary approvals to the satisfaction of the Board including shareholder approval as necessary.

The Project Company has already entered into an agreement with the Board of Investment of Sri Lanka to facilitate the requisite

approvals and a Gazette published on the 18 July 2013 under the Strategic Development Projects Act has made available tax, duty

and other concessions to the Project. The Board has authorized the Company to call for an EGM to seek shareholder approval of the

Investment as a Major Transaction under the Companies Act of 2007.

PROGRESSIVE


NOTES

Corporate Information

Name of Company

John Keells Holdings PLC

Legal Form

Public Limited Liability Company

Incorporated in Sri Lanka in 1979

Ordinary Shares listed on the

Colombo Stock Exchange

GDRs listed on the Luxembourg

Stock Exchange

Company Registration No.

PQ 14

Directors

S C Ratnayake – Chairman

A D Gunewardene – Deputy Chairman

J R F Peiris

E F G Amerasinghe

I Coomaraswamy

T Das

A R Gunasekara

M A Omar

S S Tiruchelvam

Senior Independent Director

E F G Amerasinghe

Audit Committee

A R Gunasekara – Chairman

E F G Amerasinghe

I Coomaraswamy

Human Resources and

Compensation Committee

E F G Amerasinghe – Chairman

I Coomaraswamy

A R Gunasekara

S S Tiruchelvam

Nominations Committee

T Das – Chairman

S S Tiruchelvam

S C Ratnayake

Bankers

Bank of Ceylon

Citibank N.A

Commercial Bank

Deutsche Bank A.G

DFCC Bank

DFCC Vardhana Bank

Hatton National Bank

Hongkong & Shanghai Banking

Corporation

Muslim Commercial Bank

Nations Trust Bank

National Savings Bank

Pan Asia Banking Corporation

People’s Bank

Sampath Bank

Seylan Bank

Standard Chartered Bank

Depository for GDRs

Citibank N.A

New York

Registered office of the Company

130 Glennie Street

Colombo 2, Sri Lanka

Internet: www.keells.com

Email: [email protected]

Secretaries and Registrars

Keells Consultants (Pvt) Limited

130 Glennie Street


Telephone: +94 11 230 6245

Facsimile: +94 11 243 9037

Investor Relations


130 Glennie Street


Telephone: +94 11 230 6165

+94 11 230 6000

Facsimile: +94 11 230 6160


Group Sustainability and

Enterprise Risk Management


130 Glennie Street


Telephone: +94 11 230 6182

Facsimile: +94 11 230 6249


Contact for Media

Corporate Communications Division


130 Glennie Street


Telephone: +94 11 230 6191


Auditors

Ernst & Young

Chartered Accountants

P.O. Box 101

Colombo, Sri Lanka

w w w . k e e l l s . c o m

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