PROVISIONAL CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED 31st MARCH 2021

The Lanka Hospitals C O R P O R A T I O N PLC (PQ 180) THE LANKA HOSPITALS CORPORATION PLC

Provisional Consolidated Financial Statements For the Quarter ended 31st March 2021

Board of Directors Dr.Bandula WIJESIRIWARDENA - Chairman Mr. Ashish BHATIA Ms. Richa Singh DEBGUPTA Ms.Roshini CABRAAL Dr.Ravindra RUBERU Ms.Lakshmi SANGAKKARA Mr. Mayura FERNANDO Mr. Kushan De ALWIS PC Mr. Nadun FERNANDO Ms.Dayakanthi ABEYRATHNE ( Resigned on 10th April 2021 ) Dr. Kanishka KARUNARATNE Mr.Jagath WELLAWATTA Mr. Anurag KALRA - ( Alternate Director to Mr. Ashish BHATIA ) Mr. Rajiv PURI (Alternate Director to Ms. Richa Singh DEBGUPTA )

Principal Place of Business & Registered Office No. 578, Elvitigala Mawatha, Narahenpita, Colombo 05 Tel: +94 11 5430000 Fax: +94 11 4511199 E-mail: [email protected] Web: www.lankahospitals.com THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021

Statement of Financial Position Group Company As at, 31st Mar 2021 31st Dec 2020 31st Mar 2021 31st Dec 2020 Audited Audited Rs. Rs. Rs. Rs. ASSETS

Non Current Assets Property, Plant & Equipment 4,749,783,009 4,757,111,279 4,333,469,363 4,334,095,670 Right of Use Assets 547,348,659 551,719,758 443,747,298 446,981,873 Intangible Assets 67,283,644 56,532,676 55,256,422 42,399,841 Investment Property - - 142,000,000 142,000,000 Investment in Subsidiary - - 414,000,020 414,000,020 Total Non Current Assets 5,364,415,312 5,365,363,714 5,388,473,103 5,379,477,404

Current Assets Inventories 443,707,688 438,907,124 341,871,984 347,819,214 Trade & Other Receivables 805,107,928 676,257,705 549,623,960 541,069,932 Amounts due from Related Parties 2,837,229 3,745,338 33,655,702 11,380,516 Other Financial Assets 3,350,624,178 3,106,994,000 2,975,605,000 2,756,994,000 Cash and Cash Equivalents 637,630,944 290,657,430 555,949,382 231,146,994 Total Current Assets 5,239,907,968 4,516,561,596 4,456,706,027 3,888,410,655 Total Assets 10,604,323,280 9,881,925,310 9,845,179,130 9,267,888,059

EQUITY AND LIABILITIES Equity Stated Capital 2,671,543,090 2,671,543,090 2,671,543,090 2,671,543,090 Revaluation Reserve 1,373,288,469 1,093,047,507 1,279,863,111 1,008,006,749 Retained Earnings 3,984,004,139 3,404,721,752 3,230,987,057 2,950,664,127 Total Equity 8,028,835,698 7,169,312,349 7,182,393,258 6,630,213,967

Non Current Liabilities Employee Benefit Obligations 299,634,062 294,426,643 263,305,478 259,503,102 Deferred Tax Liabilities 547,129,159 1,052,711,169 515,570,220 996,303,172 Lease Liability 189,538,401 199,744,680 108,520,935 112,145,521 Total Non Current Liabilities 1,036,301,622 1,546,882,492 887,396,633 1,367,951,795

Current Liabilities Amounts due to Related Parties 4,769,075 4,769,076 4,769,075 4,769,075 Trade & Other Payables 989,996,694 785,047,518 1,345,876,415 952,719,211 Lease Liability 81,916,424 72,424,798 57,216,240 49,908,439 Income Tax Payable 70,472,658 47,915,055 68,392,616 47,247,078 Bank Overdraft 392,031,109 255,574,022 299,134,892 215,078,494 Total Current Liabilities 1,539,185,960 1,165,730,468 1,775,389,238 1,269,722,297 Total Liabilities 2,575,487,582 2,712,612,961 2,662,785,872 2,637,674,092 Total Equity & Liabilities 10,604,323,280 9,881,925,310 9,845,179,130 9,267,888,059

The figures as at 31st March 2021 are provisional and subject to audit. I certify that the consolidated financial statements comply with the requirements of the Companies Act No. 07 of 2007.

Group Chief Financial Officer

The Board of the Directors is responsible for the preparation and presentation of these consolidated financial statements. Approved and signed for and on behalf of the Board.

Chairman Director

Date 12th May 2021 Colombo (Amounts in brackets indicate deductions) THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021

Statement of Comprehensive Income Group Company For the 3 months ended, 31st March 2021 31st March 2020 31st March 2021 31st March 2020

Rs. Rs. Rs. Rs.

Revenue from contract with customers 2,205,704,837 1,697,399,649 1,492,706,209 1,385,845,180

Cost of services (1,160,143,501) (949,881,319) (891,842,535) (827,982,392)

Gross profit 1,045,561,336 747,518,331 600,863,674 557,862,788

Other operating income 17,236,566 18,265,107 19,025,919 20,061,957

Administrative expenses (526,760,117) (541,033,048) (381,709,480) (410,164,461)

Other operating expenses (173,953,182) (171,099,586) (158,700,583) (153,491,980)

Change in fair value of investment property - - - -

Profit from operations 362,084,603 53,650,803 79,479,529 14,268,304

Finance income 192,583,211 133,451,023 187,851,571 123,052,824

Finance Cost (8,169,743) (9,467,839) (4,740,094) (6,647,911)

Profit before tax 546,498,070 177,633,987 262,591,006 130,673,216

Income tax expense (59,594,873) (22,292,566) (58,182,808) (19,817,404)

Effect on deferred tax due to income tax rate change 260,178,317 - 243,713,859 -

Profit for the period 747,081,514 155,341,421 448,122,057 110,855,812

Other comprehensive Income Effect on deferred tax due to income tax rate change 280,240,962 - 271,856,362 -

Other comprehensive income net of tax 280,240,962 - 271,856,362 -

Total comprehensive income for the period 1,027,322,476 155,341,421 719,978,419 110,855,812

Basic earnings per share 3.34 0.69 2.00 0.50

Dividend per share 0.75 - 0.75 -

(Amounts in brackets indicate deductions) THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021 Company Statement of Changes in Equity

Stated Revaluation Retained Total capital reserve earning / (loss)

Balance as at 1st January 2020 2,671,543,090 918,291,662 2,464,218,824 6,054,053,576

Profit for the period (January 2020 - March 2020) - - 110,855,812 110,855,812

Balance as at 31st March 2020 2,671,543,090 918,291,662 2,575,074,636 6,164,909,388

Balance as at 1st January 2021 2,671,543,090 1,008,006,749 2,950,664,127 6,630,213,967

Profit for the period (January 2021 - March 2021) - - 448,122,057 448,122,057

Other comprehensive income for the year Effect on deferred tax due to income tax rate change - 271,856,362 - 271,856,362

Dividend - - (167,799,127) (167,799,127)

Balance as at 31st March 2021 2,671,543,090 1,279,863,111 3,230,987,057 7,182,393,258

Group Statement of Changes in Equity

Stated Revaluation Retained Total capital reserve earning / (loss)

Balance as at 1st January 2020 2,671,543,090 982,213,369 2,975,801,877 6,629,558,336

Profit for the period (January 2020 - March 2020) - - 155,341,421 155,341,421

Balance as at 31st March 2020 2,671,543,090 982,213,369 3,131,143,298 6,784,899,757

Balance as at 1 January 2021 2,671,543,090 1,093,047,507 3,404,721,752 7,169,312,349

Profit for the period (January 2021 - March 2021 ) - - 747,081,514 747,081,514

Other comprehensive income for the year Effect on deferred tax due to income tax rate change - 280,240,962 - 280,240,962

Dividend - - (167,799,127) (167,799,127)

Balance as at 31st March 2021 2,671,543,090 1,373,288,469 3,984,004,139 8,028,835,698

(Amounts in brackets indicate deductions) THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021

Cash Flow Statement 3 months ended 3 months ended Group Company Cash flow from operating activities 31st March 2021 31st March 2020 31st March 2021 31st March 2020 Rs. Rs. Rs. Rs. Profit before tax 546,498,070 177,633,987 262,591,006 130,673,216

Adjustments for : Interest income (50,085,242) (49,462,563) (45,059,851) (42,593,958) Depreciation on property, plant and equipment 107,199,371 104,959,748 98,581,268 92,324,536 Amortisation of intangible assets 5,541,909 5,798,874 3,436,297 3,731,865 Provision for defined benefit obligation 13,894,106 13,405,044 12,489,062 12,000,000 Provision for impairment of trade receivable 1,774,907 5,943,841 1,774,907 5,943,841 Amortisation of lease assets 16,008,154 19,626,470 9,075,418 12,566,374 Interest cost - Lease assets 8,169,743 9,467,839 4,740,094 6,647,911 Gain on disposal of property, plant & equipment & ROU (2,034,791) - (2,034,791) - Operating profit before working capital changes 646,966,227 287,373,240 345,593,410 221,293,784

(Increase) / decrease in inventories (4,800,565) (96,530,833) 5,947,230 (65,103,220) (Increase) / decrease in trade and other receivables (141,798,669) (52,420,337) (21,643,909) (54,573,632) (Increase) / decrease in amounts due from related company 908,109 (688,833) (22,275,187) (67,583,830) Increase / (decrease) in amounts due to related company - (1,591,599) - - Increase / (decrease) in trade and other payables 204,949,176 29,125,974 393,157,204 107,958,843 Cash generated from operating activities 706,224,279 165,267,612 700,778,749 141,991,946

Income Tax paid (2,200,000) (15,845,818) (2,200,000) (15,465,989) Interest cost paid (8,169,743) (9,467,839) (4,740,094) (6,647,911) Defined benefit obligation paid (8,686,685) (3,401,518) (8,686,685) (2,977,916) Net cash flow from operating activities 687,167,850 136,552,437 685,151,970 116,900,129

Cash flow from investing activities Purchase of property, plant and equipment (106,602,835) (120,007,917) (99,825,008) (100,227,302) Purchase of Intangible assets (16,292,880) - (16,292,880) - Proceeds from disposal of property, plant & equipment 3,904,838 - 3,904,838 - Lease paid (7,036,202) (27,731,684) (2,157,627) (16,260,747) Interest income Received 60,804,961 74,573,087 56,374,824 41,985,825 (Investment)/withdrawal in other financial assets (243,630,178) (430,293,967) (218,611,000) (240,293,966) Net cash flow from / (used in) investing activities (308,852,297) (503,460,480) (276,606,853) (314,796,190)

Cash flow from financing activities Dividend (167,799,127) - (167,799,127) - Net cash flow from / (used in) financing activities (167,799,127) - (167,799,127) -

Net increase in cash and cash equivalents 210,516,427 (366,908,044) 240,745,990 (197,896,060) Cash and cash equivalents at the beginning of the year 35,083,408 259,585,553 16,068,500 77,738,525 Cash and cash equivalents at the end of the year (Note A) 245,599,835 (107,322,490) 256,814,490 (120,157,535)

Note A Cash & Cash Equivalents at the end of the Period Cash & Cash Equivalents 637,630,944 151,332,290 555,949,382 138,497,246 Bank Overdraft (392,031,109) (258,654,781) (299,134,892) (258,654,781) 245,599,835 (107,322,490) 256,814,490 (120,157,535) (Amounts in brackets indicate deductions) THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021

1). Basis of preparation of the Interim Financial Statements

These interim financial statements have been prepared in accordance with Sri Lanka Accounting Standard LKAS 34 - Interim Financial Reporting. These interim financial statements should be read in conjunction with the annual audited financial statements for the year ended 31 December 2019. Further, provisions of the Companies Act No 7 of 2007 have been considered in preparing the interim financial statements of the Company. Latest Financial statements have been audited for the period ended 31st December 2020.

Figures for the three months are provisional and subject to audit.

2). Comparative figures 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.

3). Contingencies , Capital and Other commitments

There has been no significant change in the nature of the contingencies, capital and other commitments, which were disclosed in the annual report for the year ended 31st December 2019.

4). Public Shareholding Public shareholding percentage as at 31st March 2021 - 20% Number of public shares as at 31st March 2021 - 44,749,303 Number of public shareholders as at 31st March 2021 - 7,534 Adjusted Floated Market Capitalization Rs. 1,946,594,680

The Float adjusted market capitalization of the Company falls under Option 5 of Rule 7.13.1 (a), of the Listing Rules of the and the Company has complied with the minimum public holding requirement applicable under the said option.

5). Event After the Reporting Period

There have been no events subsequent to the reporting date, which require disclosure in the interim condensed financial statements.

6). Revaluation of Assets

The buildings of the Company / Group were revalued as at 31 December 2020 by Messrs A.A.M Fathihu (FIV) chartered valuer. Such assets were valued on current replacement cost basis, the surplus arising from the revaluation was transferred to the revaluation reserve and the value of the buildings of the company / group has been reflected in the financial statements at the revalued amount.

Freehold land of the Company was revalued by Mr A.A.M. Fathihu (FIV), chartered Valuer in 31st December 2020 on current market value basis.

7). Investment in Subsidiary Investment made in subsidiary represents the acquisition of 41,400,002 shares at a value of Rs. 10 per share of the Lanka Hospitals Diagnostics (Pvt) Ltd, a fully owned subsidiary of the company.

8). Investment Property Investment property consists of value attributable to 7th floor of the building constructed on leasehold land, which is given on rental to Lanka Hospitals Diagnostics (Pvt) Ltd.

As at 31st December 2020,the fair value of the investment property is based on valuation performed by Mr. A.A.M. Fathihu (FIV), Chartered Valuer, an accredited independent valuer who has appropriate experience in valuation of properties. The valuation is based on current replacement cost method.

9). Deferred Tax Liabilities In 2021, a new corporate tax rate was enacted in Sri Lanka for the Healthcare Services Sector. Consequently, as of 1 April 2021, the corporate tax rate for healthcare service sector will be reduced from 28% to 14%. The change is resulted in a reversal of deferred tax liability Rs.540,419,279 and Rs.515,570,221 related to the remeasurement of deferred tax assets and liabilities of the group & the company for the period ended 31 March 2021. THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021 Shareholder and Investor Information

Top 20 Shareholding as at 31st March 2021

Shareholder No of shares Holding

1 Fortis Healthcare International Pte Ltd 64,120,915 28.66% 2 Corporation Ltd - Life Fund 58,781,308 26.27% 3 Sri Lanka Insurance Corporation Ltd - General Fund 56,080,643 25.07% 4 Property Development PLC A/C No.1 21,329,000 9.53% 5 Peoples Bank 7,316,042 3.27% 6 A/c Ceybank Unit Trust 3,014,475 1.35% 7 Dr.M.R. Mubarak 1,421,606 0.64% 8 Bank of Ceylon A/c Ceybank Century Growth Fund 857,616 0.38% 9 Bank of Ceylon A/c No.1 Account 609,949 0.27% 10 Access Engineering PLC 311,382 0.14% 11 Mr.A.H.Munasinghe 293,300 0.13% 12 Mr.W.D.N.H.Perera 250,000 0.11% 13 Deutsche Bank AG as Trustee for Guardian Acuity Equity Fund 249,337 0.11% 14 Sandwave Limited 227,977 0.10% 15 Mrs.C.A.D.S. Woodward 220,300 0.10% 16 PLC - Arpico Ataraxia Equity Income Fund 200,000 0.09% 17 Mr.S.Subramaniam 156,104 0.07% 18 Dr.N.I.Gamaathige 127,847 0.06% 19 Pioneer Homes (Private) Limited 122,731 0.05% 20 Mrs.M.A.C.Felsinger 117,700 0.05% 215,808,232 96.46%

Individual / Institution

No of Shareholders As % No of Shares As % Individual 7,409 98.30 9,698,197 4.33 Institution 128 1.70 214,033,972 95.67 7,537 100.00 223,732,169 100.00

Resident / Non-Resident

No of Shareholders As % No of Shares As % Resident 7,516 99.72 159,084,321 71.10 Non-Resident 21 0.28 64,647,848 28.90 7,537 100.00 223,732,169 100.00

Directors'/Senior Management Shareholdings as at 31st March 2021

Board of Directors Position No of shares Holding %

Dr.Bandula WIJESIRIWARDHANA Chairman - - Mr.Ashish BHATIA Director - - Ms. Richa Singh DEBGUPTA Director - - Ms.Roshini CABRAAL Director - - Dr.Ravindra RUBERU Director - - Ms.Lakshmi SANGAKKARA Director - - Mr.Mayura FERNANDO Director 500.00 - Mr.Kushan De ALWIS PC Director - - Mr.Nandun FERNANDO Director - - Ms.Dayakanthi ABEYRATHNE Director - - Dr.Kanishka KARUNARATNE Director - - Mr.Jagath WELLAWATTA Director Mr Anurag KALRA (Alternate Director to Mr.Ashish BHATIA) Alternate Director - -

Mr. Rajiv PURI (Alternate Director to Ms. Richa Singh - - DEBGUPTA) Alternate Director

Senior Management

Group Chief Executive Mr.Deepthi LOKUARRACHCHI - - Officer THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021 Shareholder and Investor Information (cont.)

Price fluctuation (Market price of Ordinary share) Current Interim Period Comparative Period 3 months ended 3 months ended 31st March 2021 31st March 2020 Rs. Rs.

Highest price 60.00 42.50

Lowest price 40.00 27.50

Closing price 43.50 27.50

Summary of Share Ranges No of Share Range No of shares Holding % shareholders

1 1 -1,000 6,163 2,110,460 0.94 2 1,001 - 10,000 1,264 3,508,162 1.57 3 10,001 - 100,000 88 2,077,614 0.93 4 100,001 - 1,000,000 15 3,971,944 1.78 5 1,000,001 & above 7 212,063,989 94.78 7,537 223,732,169 100.00 THE LANKA HOSPITALS CORPORATION PLC Provisional Consolidated Financial Statements for the Quarter ended 31st March 2021 Financial Indicators

Current Interim Period Comparative Period Current Period Immediately Preceding Financial Year 3 Months ended 31st March 2021 31st December 2020 Group Company Group Company 1 Net asset per share Rs. Rs. Rs. Rs.

Total Assets - Short Term & Long Term Liabilities 35.89 32.10 32.04 29.63 Total No of Shares 223,732,169 223,732,169

2 Gearing Ratio

Total Debt N/A N/A N/A N/A Total Equity - 6,630,213,967 3 Quick Asset Ratio (Times)

Current Assets-Inventory 3.12 2.32 3.50 2.79 Current Liabilities 4,114,834,043 1,775,389,238 4 Interest Cover

Profit before interest & tax (PBIT) N/A N/A N/A N/A Interest charges 108,663,485 - Corporate Information

Name of the Company The Lanka Hospitals Corporation PLC

Company Registration No. PQ 180

Registered Office No.578, Elvitigala Mawatha, Narahenpita, Colombo 05, Sri Lanka. Tel: +94 11 5430000 Fax: +94 11 4511199 E-mail: [email protected]

Secretaries & Registrars to Shares Accounting Systems Secretarial Services (Private) Limited, Level 03, No:11, Castle Lane, Colombo 4 Tel: +94 11 544 4400

Auditors National Audit Office 306/72, Polduwa Road, Battaramulla, Sri Lanka.