Enduring the Times

ENDURING THE TIMES

JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020

CHAIRMAN’S REVIEW

Dear Stakeholder, Summarised below are the key operational and financial highlights of our performance Group revenue at Rs.32.39 billion for the during the quarter under review: quarter under review is a decrease of 4 per cent against the comparative period of last • The underlying performance of the Transportation, Consumer Foods, Retail and Financial year [2019/20 Q2: Rs.33.70 billion]. Cumulative Services industry groups continued its growth momentum witnessed in the latter part Group revenue for the first half of the year of the previous quarter, demonstrating a faster than anticipated recovery following the under review at Rs.53.99 billion is a decrease resumption of business activity in the country post the easing of lockdowns in May 2020. of 17 per cent against the revenue of Rs.65.44 billion recorded in the corresponding period • Group EBITDA excluding the Leisure industry group was Rs.4.50 billion during the second of financial year 2019/20. quarter of the year under review, which is a 15 per cent increase against the previous year [2019/20 Q2: Rs.3.91 billion]. Group earnings before interest expense, tax, depreciation and amortisation (EBITDA) • Given the strong recovery momentum in business activity and the generation of cash at Rs.3.32 billion in the second quarter of profits by the Group, a second interim dividend of Rs.0.50 per share, amounting to a the financial year 2020/21 is an 18 per cent payout of Rs.659 million, was declared to be paid on or before 7 December 2020. The decrease against Group EBITDA of Rs.4.02 declaration of this dividend reflects the cash generation capability of the Group’s diverse billion recorded in the previous financial year. portfolio of businesses. Group EBITDA excluding the Leisure industry group was Rs.4.50 billion during the second • The Leisure industry group continued to be impacted by the closure of the airport in quarter of the year under review, which is Sri Lanka, although this has been mitigated, to an extent, by a resumption in domestic a 15 per cent increase against the previous tourism, recovery in the banqueting, food and beverage segments and the opening of year [2019/20 Q2: Rs.3.91 billion]. Cumulative the airport in the Maldives in mid-July. Group EBITDA for the first half of the financial year 2020/21 at Rs.4.12 billion is a 46 per cent • The Frozen Confectionery, Beverage and Convenience Foods businesses recorded decrease against the EBITDA of Rs.7.59 billion double-digit growth in EBITDA against the corresponding period of the previous quarter, recorded in the same period of financial year continuing the trajectory witnessed in June. 2019/20. • The Supermarket business continued its positive momentum with a strong rebound in sales and EBITDA, driven by the contribution from new outlets towards revenue growth Group profit before tax (PBT) at Rs.636 million and a pick-up in same store footfall post the easing of lockdown measures witnessed in in the quarter under review is a 76 per cent the first quarter. decrease against the Rs.2.60 billion recorded in the second quarter of 2019/20. Cumulative • Pace of construction at ‘Cinnamon Life’ continued to gain traction during the quarter. PBT for the first half of the financial year Post ascertaining the impact of COVID-19 on the overall timelines of the project to 2020/21 at a negative Rs.1.79 billion is a 145 manage deliverables and the re-sequencing of work, it is expected that the hand-over per cent decrease against the PBT of Rs.3.96 of the residential apartments and office tower will commence on a staggered basis from billion recorded in the comparative period of the fourth quarter of 2020/21 onwards. the previous financial year.

Profit attributable to equity holders of the EBITDA* (Rs.'000) Quarter ending Six months ending parent at Rs.680 million in the quarter under September 2020 September 2020 review is a 70 per cent decrease against Q2 Q2 % Cumulative Cumulative % the comparative quarter [2019/20 Q2: 2020/21 2019/20 2020/21 2019/20 Rs.2.29 billion]. On a cumulative basis, profit attributable to equity holders of the parent Transportation 929,311 1,109,281 (16) 1,324,053 2,162,287 (39) is a negative Rs.978 million, a 130 per cent Consumer Foods 953,166 735,767 30 1,440,315 1,576,774 (9) decrease against the comparative period. Retail 1,373,211 1,021,307 34 1,875,062 2,057,063 (9) Leisure (1,186,653) 111,599 (1,163) (2,647,840) (224,414) (1,080) Company PBT for the second quarter of 2020/21 at Rs.1.40 billion is a 22 per cent Property (12,376) 44,215 (128) (41,257) 90,723 (145) increase against the Rs.1.15 billion recorded Financial Services 651,803 562,902 16 1,188,528 998,631 19 in the corresponding period of 2019/20. Company PBT for the first half of the financial * EBITDA includes interest income and the share of results of equity accounted investees which is year 2020/21 at Rs.2.31 billion is a 20 per cent based on the share of profit after tax but excludes the impact of exchange losses and gains on its decrease against the corresponding period of foreign currency denominated debt and cash, to demonstrate the underlying cash operational 2019/20. performance of businesses.

1 CHAIRMAN’S REVIEW

During the quarter under review, the Group I wish to place on record my sincere The profitability of Beverage and FC witnessed a faster than anticipated recovery appreciation of the contribution made by businesses expanded on the back of volume momentum with the performance of most our teams who continue to serve in the front growth together with margin expansion businesses reaching close to pre COVID-19 lines, playing a vital role for the benefit of all due to selective price increases across SKUs levels with business activity and consumer people in the country and thank them for their in the Beverage business coupled with cost trends being near normal. This positive support and positive attitude throughout this optimisation strategies in both segments. momentum is reflected in the performance period. The Convenience Foods business recorded a of the Group excluding Leisure. The Leisure double-digit growth in profitability, despite business, however, continued to be Transportation a marginal decline in volume due to a better significantly impacted given the closure of the The Transportation industry group EBITDA sales mix. airport in Sri Lanka and the high dependency at Rs.929 million in the second quarter of on the recovery of key source markets, both 2020/21 is a decrease of 16 per cent against Retail in Sri Lanka and the Maldives, although the the EBITDA of the comparative period The Retail industry group EBITDA of Rs.1.37 resurgence of domestic tourism, food and [2019/20 Q2: Rs.1.11 billion]. The decline in billion in the second quarter of 2020/21 is an beverage and banqueting revenue in Sri Lanka profitability is attributable to the performance increase of 34 per cent over the EBITDA for the as well as the opening of the airport in the of the Group’s Bunkering business, Lanka second quarter of the previous financial year Maldives in mid-July helped support the cash Marine Services (LMS), and the Ports business, [2019/20 Q2: Rs.1.02 billion]. The Supermarket flows of the business during the quarter. South Asia Gateway Terminals (SAGT). During business EBITDA at Rs.1.07 billion is a 32 per the quarter under review, SAGT recorded cent increase against the comparative quarter Whilst the COVID-19 pandemic was contained throughput growth of 7 per cent against the [2019/20 Q2: Rs.810 million]. in Sri Lanka throughout the second quarter, corresponding period of the previous financial resulting in a strong resumption of business year driven by an increase in transshipment The Supermarket business witnessed a activity, the outbreak of a cluster in early volumes which recorded encouraging strong rebound in sales during the quarter, October led to an increase in the number of growth, demonstrating the urgent need, with the new outlets contributing towards COVID-19 cases within the country, prompting and opportunity, for deep water capacity overall revenue growth while same store partial lockdowns in some areas. As at the date enhancement in the Port of Colombo. footfall improved significantly against the of this message, the Western Province of the Profitability at SAGT was negatively impacted previous quarter ending June. Same store country is under a ‘quarantine curfew’ till 9 as a result of the business becoming liable sales declined marginally in the quarter under November 2020, along with a few other cities. for income tax from September 2019 and review, against the corresponding period While it is too early to ascertain the impact due to a change in the throughput mix. The of the previous financial year, as the growth of this cluster outbreak and the resultant Bunkering business was adversely impacted in average basket values was inadequate to performance of the Group, the curtailing by a reduction in demand for bunker fuel on offset the reduction in same store customer of movement has caused a slowdown in the back of the COVID-19 pandemic, which footfall due to the impacts of COVID-19. business activity and the pace of recovery resulted in a contraction in overall market Given the change in shopping behaviours of will depend on how the situation improves volumes and exerted pressure on margins. customers, where the frequency and purchase in the next few weeks. Whilst new cases have dynamics due to consolidation of baskets has been restricted to two clusters and health Consumer Foods changed, the statistics on footfall and basket authorities have assured that there are no The Consumer Foods industry group EBITDA values remain distorted in the short term. Six indications of community transmission, as at Rs.953 million in the second quarter of new outlets were opened during the quarter, of this moment, the Group is taking all steps 2020/21 is an increase of 30 per cent against increasing the total outlet footprint to 115 as to ensure our customers, employees and the corresponding quarter of the previous at September. While the business will continue all other stakeholders are safeguarded. As a year [2019/20 Q2: Rs.736 million], reflecting to selectively expand its outlet network responsible corporate citizen, the Group has the strong rebound post the easing of considering the underlying growth prospects proactively taken action to mitigate the spread lockdown restrictions and driven by margin for the industry, it has also ramped up its of COVID-19 by routine random tests for improvement on the back of higher operating capability, offering and customer experience Group staff, with particular attention to those leverage due to volume growth. Both the on its e-commerce platform. at risk and on the front lines, on a weekly basis. Beverage and Frozen Confectionery (FC) The Group continues to reinforce and evaluate businesses recorded volume growth over The Office Automation business recorded its safety protocols applicable to its own the corresponding period last year, with the double-digit growth in EBITDA on account of employees and customers and has taken all FC business recording strong double-digit improved margins in the mobile segment and possible measures to protect its supply chains growth. better working capital management. in the current environment. We are confident these measures will help the Group overcome the current situation.

2 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 Leisure rate regime in the country, where consumers focused collection efforts, despite higher The Leisure industry group recorded a have access to long-term funding at attractive impairment charges. The Bank also benefitted negative EBITDA of Rs.1.19 billion during the rates, will also be a catalyst in driving growth from the removal of the debt repayment quarter under review, a significant decrease in the property industry. The subdued levy, which was in place in the previous year. against the Rs.112 million recorded in the performance of the mall operations, which Union Assurance PLC recorded strong growth comparative quarter of 2019/20 due to the were significantly impacted as a result of the in gross written premiums (GWP) during the continued impact on tourism, although the pandemic, also contributed to the decline in quarter, continuing the recovery momentum uptick in domestic tourism in Sri Lanka and profitability. seen from the month of June onwards. the opening of the airport in the Maldives has been encouraging. During the quarter under review, with Other, including Information Technology the gradual increase in labour strength, and Plantation Services Although the Sri Lankan airport remains closed productivity at the ‘Cinnamon Life’ site was The Other, including Information Technology to-date for foreign arrivals, the resumption of improving towards pre-lockdown levels. The and Plantation Services industry group EBITDA domestic travel continued during the quarter, business is working closely with the contractor of Rs.608 million in the second quarter of with all properties in the Sri Lankan Resorts to ascertain the impact of COVID-19 on the 2020/21 is an increase of 39 per cent over the segment recording an encouraging increase overall timelines of the project to manage EBITDA for the second quarter of the previous in month-on-month occupancy. Despite deliverables. Based on the re-sequencing of financial year [2019/20 Q2: Rs.438 million]. The the challenging operating environment, the work, the residential apartments and office Plantation Services sector recorded a decrease City Hotels sector also exhibited a better tower is expected to be handed over on a in EBITDA on account of lower volumes, than anticipated performance, primarily staggered basis from the fourth quarter of despite an increase in tea prices and reduced driven by the food and beverage and 2020/21 onwards. interest income. banqueting segments. However, the recent cluster outbreak of COVID-19 in Sri Lanka, as The residual funding requirement for the The PBT of the Holding Company was discussed before, will impede this recovery project remains in place with the unutilised negatively impacted by a foreign currency should the current situation prevail. component of the USD 395 million syndicated exchange loss on its net US Dollar loan facility, and cash reserves which are denominated cash holdings on account of The Maldivian airport was opened for leisure earmarked to meet equity commitments at the appreciation of the exchange rate against and business travel from mid-July onwards, the Holding Company level. the previous quarter, whereas the year-on- although arrivals in to the country were year comparison of PBT is lower due to the slow to gather momentum given air travel During the quarter under review, the Group significant exchange gain recorded in the restrictions in key source markets. Whilst increased its existing stake of 60 per cent in second quarter of 2019/20. The US Dollar cash the performance of the Leisure business Vauxhall Land Developments (Private) Limited holdings are earmarked for the planned equity will largely depend on the resumption of (VLDL), an entity which owns a 9.38-acre plot infusions to fund ‘Cinnamon Life’. During regional and global travel with travellers of prime land on Vauxhall Street, Colombo, the quarter, the Holding Company drew regaining confidence, it is encouraging to by increasing its holding by a further 26.7 down USD 100 million of its USD 175 million witness the momentum of forward bookings, per cent at a consideration of Rs.5.98 billion. long-term loan facility from the International demonstrating ‘pent up’ demand for leisure The Group has committed to acquire the Finance Corporation, although there is no travel when restrictions on travel ease. remaining 13.3 per cent equity stake for Rs.2.99 impact on net debt since the cash balance billion by September 2021, post which VLDL was also retained at the Holding Company Property would become a fully owned subsidiary of level. The Property industry group EBITDA at a the Holding Company. With this acquisition, negative Rs.12 million in the second quarter the Group is of the view that the existing land Governance of 2020/21 is a 128 per cent decrease against bank is adequate to sustain a steady pipeline During the quarter under review, the Group the EBITDA of the second quarter of the of projects in the long-term. confirmed participation in the UN Global previous financial year [2019/20 Q2: Rs.44 Compact’s accelerated programme ’Target million]. This is primarily attributable to the Financial Services Gender Equality‘ towards increasing women’s ‘Tri-Zen’ residential development project given The Financial Services industry group EBITDA representation and leadership in business. lower revenue recognition during the quarter at Rs.652 million in the second quarter of In furtherance of this initiative, the Group under review in comparison to the second 2020/21 is an increase of 16 per cent against has instituted a diversity and inclusion team quarter of 2019/20. The revenue recognition the EBITDA of the corresponding period in the towards increasing the diversity of our cycle of ‘Tri-Zen’, however, will continue to previous year [2019/20 Q2: Rs.563 million]. workforce. The Group launched the ‘ONE ramp up as the project progresses. The sales JKH’ brand in September to consolidate its momentum and interest towards ‘Tri-Zen’ Nations Trust Bank PLC recorded an increase efforts towards diversity and inclusion and to continues to recover to pre COVID-19 levels, in profitability, driven by an improvement in reinforce the position on non-discrimination with the business recording encouraging sales net interest income on the back of an increase and equal opportunity. during the quarter. The prevailing low interest in fee income and improved recoveries, given

3 CHAIRMAN’S REVIEW

Sustainability Initiatives • Under the John Keells Vision Project, The Group’s absolute carbon footprint reduced following the re-opening of schools, 81 by 10 per cent whilst water withdrawal school children from 15 schools underwent decreased by 16 per cent to 22,399 MT and vision screening while 200 eye glasses were 419,748 cubic meters, respectively, primarily also donated under the Vision Screening given lower levels of operational activity, Programme conducted in collaboration particularly in the Leisure industry group and with the Department of Health Services. Cinnamon Air as a result of the COVID-19 pandemic. The Group’s carbon footprint per • Under the John Keells Praja Shakthi million Rupees of revenue reduced by 5 per initiative, following a request made by the cent to 0.70 MT and water withdrawal per Divisional Secretary of Colombo to provide million Rupees of revenue reduced by 12 per private sector training for newly-recruited cent to 13.16 cubic meters. Group employees graduates, JKF coordinated placements for were provided with 9 hours of training per 64 trainees via Group businesses. The first employee, whilst 22 occupational injuries were batch completed its 3-week training. In reported during the quarter under review. Hikkaduwa, JKF initiated a capacity building programme for women engaged in the Corporate Social Responsibility batik industry in collaboration with the Following are some of the highlights of John Academy of Design. Keells Foundation’s (JKF) work during the quarter under review. • The Gratiaen Trust, in association with JKF as its primary sponsor, hosted a weekend • Under the Village Adoption Project in event in collaboration with ‘Cinnamon Mullaitivu, JKF completed construction Bentota Beach’. Work of seven Gratiaen Prize of a six-way anicut with a capacity winners was showcased to a new audience to irrigate 300 acres of paddy land in comprising hotel guests and university Iranaipalai, which was declared open students. by the Mullaitivu Government Agent in August. This concluded JKF’s 7-year Dividend integrated development programme in Given the faster than anticipated recovery Iranaipalai and Puthumathalan, comprising following the resumption of business activity fisher and farmer livelihood support, skills in the country and the strong growth development, essential education and momentum witnessed across our Group livelihood related infrastructure, and gender businesses, with the exception of Leisure, and youth empowerment benefiting over your Board declared a second interim 2,035 persons. dividend of Rs.0.50 per share to be paid on or before 7 December 2020. The declaration • In view of COVID-related restrictions, of this dividend reflects the cash generation JKF piloted a soft skills webinar series for capability of the Group’s diverse portfolio of university undergraduates. 388 attendees businesses. The Group declared a first interim participated in three webinars which dividend of Rs.0.50 per share which was paid covered CV writing, interview skills, personal in August 2020. The Group will follow its grooming, social etiquette and a panel dividend policy which corresponds with the discussion with industry leading experts. growth in profits, whilst ensuring that the Company maintains adequate funds to ensure • Under the English Language Scholarship business continuity given the unprecedented Programme, classes and examinations nature of the current circumstances. were conducted in all 19 locations for 602 students. Provincial-based English Days were conducted virtually given the inability to conduct physical events. Krishan Balendra • Under Project WAVE (Working Against Chairman Violence through Education), general 5 November 2020 online awareness on Child Protection was continued reaching a cumulative total of 18,447 persons.

4 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 CONSOLIDATED INCOME STATEMENT

Quarter ended 30 September Six months ended 30 September Note 2020 2019 Change % 2020 2019 Change %

Continuing operations Revenue from contracts with customers 28,676,303 30,919,268 (7) 48,015,194 60,223,304 (20) Revenue from insurance contracts 3,713,397 2,784,579 33 5,976,554 5,218,559 15 Total Revenue 32,389,700 33,703,847 (4) 53,991,748 65,441,863 (17)

Cost of sales (27,154,895) (27,603,239) (2) (46,840,552) (54,115,168) (13)

Gross profit 5,234,805 6,100,608 (14) 7,151,196 11,326,695 (37) Other operating income 642,670 445,245 44 1,041,530 828,866 26 Selling and distribution expenses (1,411,697) (1,349,028) 5 (2,201,001) (2,604,766) (16) Administrative expenses (3,265,411) (3,184,603) 3 (6,477,732) (6,358,283) 2 Other operating expenses (323,608) (768,856) (58) (553,362) (1,498,315) (63) Results from operating activities 876,759 1,243,366 (29) (1,039,369) 1,694,197 (161)

Finance cost 7 (864,355) (423,282) 104 (2,838,516) (1,584,579) 79 Finance income 7 2,017,443 2,514,563 (20) 3,742,041 4,597,718 (19) Change in insurance contract liabilities 6 (2,519,284) (1,857,609) 36 (3,271,962) (2,943,377) 11 Share of results of equity accounted 1,124,962 1,120,609 0 1,613,462 2,193,457 (26) investees (net of tax)

Profit/(loss) before tax 635,525 2,597,647 (76) (1,794,344) 3,957,416 (145) Tax expense 8 (164,050) (359,627) (54) 108,826 (817,026) (113) Profit/(loss) for the period 471,475 2,238,020 (79) (1,685,518) 3,140,390 (154)

Attributable to: Equity holders of the parent 679,742 2,290,064 (70) (977,729) 3,284,392 (130) Non-controlling interest (208,267) (52,044) 300 (707,789) (144,002) 392 471,475 2,238,020 (79) (1,685,518) 3,140,390 (154)

LKR. LKR. LKR. LKR.

Earnings per share Basic 0.52 1.74 (0.74) 2.49 Diluted 0.52 1.74 (0.74) 2.49

Dividend per share 0.50 - 0.50 1.00

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

5 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter ended 30 September Six months ended 30 September Note 2020 2019 2020 2019

Profit/(loss) for the period 471,475 2,238,020 (1,685,518) 3,140,390

Other comprehensive income Other comprehensive income to be reclassified to income statement in subsequent periods Currency translation of foreign operations (491,998) 2,087,505 (1,823,442) 2,506,945 Net gain/(loss) on cash flow hedges 48,975 (477,942) 8,432 (308,072) Net gain/(loss) on debt instruments at fair value through other (110,520) (43,365) 622,304 266,954 comprehensive income Share of other comprehensive income of equity-accounted (61,933) 208,869 (174,982) 349,024 investees (net of tax) Net other comprehensive income to be reclassified to income (615,476) 1,775,067 (1,367,688) 2,814,851 statement in subsequent periods

Other comprehensive income not to be reclassified to income statement in subsequent periods Net gain/(loss) on equity instruments at fair value through other 2,203 4,126 863 19,162 comprehensive income Remeasurement gain / (loss) on defined benefit plans - - - 768 Share of other comprehensive income of equity-accounted - (13,798) - (17,476) investees (net of tax) Net other comprehensive income not to be reclassified to income 2,203 (9,672) 863 2,454 statement in subsequent periods Tax on other comprehensive income 8 (8,579) - (9,677) (18,819)

Other comprehensive income for the period, net of tax (621,852) 1,765,395 (1,376,502) 2,798,486

Total comprehensive income for the period, net of tax (150,377) 4,003,415 (3,062,020) 5,938,876

Attributable to: Equity holders of the parent 93,462 3,946,610 (2,319,786) 5,917,530 Non-controlling interest (243,839) 56,805 (742,234) 21,346 (150,377) 4,003,415 (3,062,020) 5,938,876

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 SIX MONTHS ENDED 30 SEPTEMBER 2020 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30.09.2020 31.03.2020

ASSETS Non-current assets Property, plant and equipment 111,080,026 111,533,759 Right- of - use assets 38,912,724 37,170,270 Investment property 15,007,996 15,007,996 Intangible assets 3,525,593 3,288,989 Investments in equity accounted investees 28,423,164 28,329,492 Non-current financial assets 58,968,574 40,078,469 Deferred tax assets 1,210,414 902,382 Other non-current assets 84,205,193 79,582,749 341,333,684 315,894,106

Current assets Inventories 49,700,979 50,168,754 Trade and other receivables 9,695,112 12,186,327 Amounts due from related parties 168,202 389,766 Other current assets 5,913,048 6,513,353 Short term investments 44,089,175 38,457,970 Cash in hand and at bank 11,957,780 13,333,743 121,524,296 121,049,913 Total assets 462,857,980 436,944,019

EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 62,881,295 62,881,295 Revenue reserves 86,462,911 87,885,071 Other components of equity 64,902,890 66,085,354 214,247,096 216,851,720 Non-controlling interest 16,780,190 26,872,142

Total equity 231,027,286 243,723,862

Non-current liabilities Insurance contract liabilities 41,528,558 38,185,839 Interest-bearing loans and borrowings 79,818,697 50,925,346 Lease liability 22,679,506 19,910,124 Deferred tax liabilities 7,821,618 8,294,955 Employee benefit liabilities 2,579,429 2,343,911 Other non-current financial liabilities 3,538,012 3,619,863 Other non-current liabilities 13,283,446 12,613,909 171,249,266 135,893,947

Current liabilities Trade and other payables 21,947,023 23,881,479 Amounts due to related parties 27,020 2,073 Income tax liabilities 1,515,495 1,747,597 Short term borrowings 15,590,611 5,803,771 Interest-bearing loans and borrowings 4,579,477 5,206,020 Lease liability 1,528,243 1,382,662 Other current financial liabilities 3,001,644 - Other current liabilities 1,506,099 1,623,137 Bank overdrafts 10,885,816 17,679,471 60,581,428 57,326,210 Total equity and liabilities 462,857,980 436,944,019

LKR LKR Net assets per share 162.49 164.46 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 Thanthirige Group 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 5 November 2020 7 Colombo CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 September Note 2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES Profit before working capital changes A (381,079) 2,397,047

(Increase) / Decrease in inventories 467,775 1,720,680 (Increase) / Decrease in trade and other receivables 2,768,980 5,039,619 (Increase) / Decrease in other current assets 355,571 (134,556) (Increase) / Decrease in other non-current assets (5,881,136) (15,956,448) (Increase)/Decrease in other non-current financial liabilities (73,419) - Increase / (Decrease) in trade and other payables and other non-current liabilities (1,265,715) (84,770) Increase / (Decrease) in other current liabilities and other current financial liabilities (30,359) (873,961) Increase / (Decrease) in insurance contract liabilities 3,342,719 2,858,960 Cash generated from operations (696,663) (5,033,429)

Finance income received 3,719,045 4,597,718 Finance costs paid (595,308) (1,549,511) Dividend received 1,359,184 851,268 Tax paid (1,079,094) (2,039,285) Gratuity paid (84,250) (115,609) Net cash flow from operating activities 2,622,914 (3,288,848)

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (2,170,554) (6,953,854) Purchase of intangible assets (188,593) (206,859) Purchase of lease rights (63,462) (1,455,768) Addition to investment property - (1,010) Increase in interest in equity accounted investees - (2,400) Proceeds from sale of property, plant and equipment and intangible assets 34,500 116,863 Proceeds from sale of financial instruments - fair valued through profit or loss 1,057,734 161,061 Purchase of financial instruments - fair valued through profit or loss (1,352,226) (177,205) (Purchase) / disposal of short term investments (net) (10,371,765) (12,537,094) (Purchase) / disposal of non current financial assets (net) (18,266,938) (1,645,023) Net cash flow from / (used in) investing activities (31,321,304) (22,701,289)

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Changes in non-controlling interest (5,973,660) 170 Dividend paid to equity holders of parent (659,275) (1,318,173) Dividend paid to shareholders with non-controlling interest (154,647) (198,531) Proceeds from long term borrowings 31,346,690 15,777,275 Repayment of long term borrowings (3,073,257) (2,523,183) Repayment of lease liability (1,044,515) (958,470) Proceeds from/(repayment of) other financial liabilities (net) 9,786,840 (3,946,312) Net cash flow from / (used in) financing activities 30,228,176 6,832,776

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 1,529,786 (19,157,361)

CASH AND CASH EQUIVALENTS AT THE BEGINNING 8,759,922 27,718,479

CASH AND CASH EQUIVALENTS AT THE END 10,289,708 8,561,118

ANALYSIS OF CASH AND CASH EQUIVALENTS Favourable balances Short term investments 9,217,744 11,152,640 Cash in hand and at bank 11,957,780 8,928,953 Unfavourable balances Bank overdrafts (10,885,816) (11,520,475) Total Cash and cash equivalents 10,289,708 8,561,118

Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions.

8 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 September 2020 2019

A. Profit before working capital changes Profit/(loss) before tax (1,794,344) 3,957,416 Adjustments for: Finance income (3,742,041) (4,597,718) Finance cost 2,838,516 1,584,579 Share-based payment expense 144,119 185,617 Share of results of equity accounted investees (1,613,462) (2,193,457) Depreciation of property, plant and equipment 2,302,309 1,964,468 (Profit)/loss on sale of property, plant and equipment and intangible assets (3,703) (2,213) Amortisation of right- of - use assets 1,310,201 887,391 Amortisation of intangible assets 288,419 243,468 Employee benefit provision and related costs 319,768 304,721 Unrealised (gain) / loss on foreign exchange (net) (430,861) 62,775 (381,079) 2,397,047

9 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 170 Total equity 185,617 144,119 (198,530) (659,275) (154,647) 3,140,390 2,798,486 5,938,876 (1,318,173) (1,685,518) (1,376,502) (3,062,020) (8,964,753) 231,027,286 230,358,740 234,966,700 243,723,862 - - - - Non (3,785) 21,346 (34,445) 165,348 (144,002) (274,972) (707,789) (742,234) (189,329) interests (9,160,389) 26,071,923 25,814,512 26,872,142 16,780,190 controlling Total 3,955 76,442 34,682 195,636 185,617 144,119 (977,729) (659,275) 3,284,392 2,633,138 5,917,530 (1,318,173) (1,342,057) (2,319,786) 214,247,096 204,286,817 209,152,188 216,851,720 - - 3,124 76,442 34,682 (16,870) (15,474) 195,636 reserve (977,729) (993,203) (659,275) Revenue 3,284,392 3,267,522 (1,318,173) 86,462,911 82,834,219 84,863,134 87,885,071 ------assets reserve 472,169 351,632 351,632 823,801 589,496 589,496 1,094,830 1,684,326 at FVOCI* Fair value of financial ------Other capital reserve 185,617 144,119 2,390,966 2,576,583 2,700,147 2,844,266 ------8,306 8,306 hedge 402,646 103,015 reserve (299,631) (299,631) (508,480) (500,174) Cash flow ------reserve Foreign currency 2,612,663 2,612,663 (1,915,805) (1,915,805) 15,939,589 18,552,252 21,655,664 19,739,859 translation ------Attributable to equity holders of the parent 831 (8,580) (8,580) (14,656) (14,656) reserve 37,569,871 35,931,552 35,917,727 37,578,451 Revaluation ------reserve 3,509,194 3,509,194 3,564,742 3,564,742 Restricted regulatory ------Stated capital 62,806,482 62,806,482 62,881,295 62,881,295 11 11 Note

All values are in LKR '000s, unless otherwise in LKR '000s, All values are stated. in brackets deductions. indicate Figures not audited. figures above The interest non-controlling interest interest non-controlling interest GROUP As at 1 April 2019 for the period Profit Other income comprehensive income comprehensive Total based payments Share dividend paid - 2018/19 Final Subsidiary non-controlling dividend to disposal and changes in Acquisition, As at 30 September 2019 As at 1 April 2020 for the period Profit Other income comprehensive income comprehensive Total based payments Share Dividend paid - 2020/21 Subsidiary non-controlling dividend to disposal and changes in Acquisition, As at 30 September 2020 income other comprehensive value through * Fair : Note

10 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 COMPANY INCOME STATEMENT

Quarter ended 30 September Six months ended 30 September Note 2020 2019 Change % 2020 2019 Change %

Continuing operations Services transferred over time 474,421 367,350 29 788,280 735,004 7 Revenue from contracts with 474,421 367,350 29 788,280 735,004 7 customers

Cost of sales (227,300) (165,999) 37 (428,885) (436,239) (2)

Gross profit 247,121 201,351 23 359,395 298,765 20 Dividend income 1,170,531 106,812 996 2,363,478 1,460,194 62 Other operating income 2,914 6,821 (57) 6,275 10,453 (40) Administrative expenses (291,153) (344,621) (16) (572,330) (579,844) (1) Other operating expenses (1,667) (8,362) (80) (2,411) (18,435) (87) Results from operating activities 1,127,746 (37,999) (3,068) 2,154,407 1,171,133 84

Finance cost 7 (325,765) (9,245) 3,424 (800,015) (206,902) 287 Finance income 7 598,943 1,198,921 (50) 955,449 1,907,934 (50)

Profit before tax 1,400,924 1,151,677 22 2,309,841 2,872,165 (20) Tax expense 8 (232,670) (81,788) 184 (239,077) (145,787) 64 Profit for the period 1,168,254 1,069,889 9 2,070,764 2,726,378 (24)

LKR. LKR. LKR. LKR.

Dividend per share 0.50 - 0.50 1.00

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

11 COMPANY STATEMENT OF COMPREHENSIVE INCOME

Quarter ended 30 Six months ended 30 September September Note 2020 2019 2020 2019

Profit for the period 1,168,254 1,069,889 2,070,764 2,726,378

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 2,199 4,099 910 19,216 comprehensive income Net other comprehensive income not to be reclassified to income 2,199 4,099 910 19,216 statement in subsequent periods

Tax on other comprehensive income 8 - - - -

Other comprehensive income for the period, net of tax 2,199 4,099 910 19,216 Total comprehensive income for the period, net of tax 1,170,453 1,073,988 2,071,674 2,745,594

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 SIX MONTHS ENDED 30 SEPTEMBER 2020 COMPANY STATEMENT OF FINANCIAL POSITION

As at 30.09.2020 31.03.2020

ASSETS Non-current assets Property, plant and equipment 123,616 144,353 Intangible assets 88,858 102,542 Investments in subsidiaries 94,244,544 87,835,917 Investments in equity accounted investees 10,381,881 10,381,881 Non current financial assets 15,205,535 284,978 Other non-current assets 94,614 18,842 120,139,048 98,768,513

Current assets Trade and other receivables 239,530 125,451 Amounts due from related parties 1,070,360 681,617 Other current assets 517,777 1,124,829 Short term investments 30,355,088 27,372,003 Cash in hand and at bank 1,234,111 176,662 33,416,866 29,480,562 Total assets 153,555,914 128,249,075

EQUITY AND LIABILITIES Stated capital 62,881,295 62,881,295 Revenue reserves 61,042,925 59,631,436 Other components of equity 2,869,973 2,724,944 Total equity 126,794,193 125,237,675

Non-current liabilities Interest-bearing loans and borrowings 18,297,958 289,705 Employee benefit liabilities 198,347 171,450 18,496,305 461,155

Current liabilities Trade and other payables 473,862 423,393 Amounts due to related parties 65 777 Income tax liabilities 154,905 389,510 Short term borrowings 7,215,400 - Interest bearing loans and borrowings 406,679 316,042 Other current liabilities 8,174 3,375 Bank overdrafts 6,331 1,417,148 8,265,416 2,550,245 Total equity and liabilities 153,555,914 128,249,075

LKR LKR Net assets per share 96.16 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 Thanthirige Group 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 5 November 2020 Colombo 13 COMPANY STATEMENT OF CASH FLOWS

For the six months ended 30 September 2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 2,309,841 2,872,165 Adjustments for: Finance income (955,449) (1,907,934) Dividend income (2,363,478) (1,460,194) Finance cost 800,015 206,902 Profit on sale of non-current investments - (2,185) Depreciation of property, plant and equipment 20,736 16,694 Profit/ (loss) on sale of property, plant and equipment and intangible assets - 29 Amortisation of prepaid staff motor vehicle loan 2,295 - Amortisation of intangible assets 13,682 12,529 Share based payment expenses 36,886 72,075 Employee benefit provision and related costs 31,794 31,954 Profit before working capital changes (103,678) (157,965)

(Increase) / Decrease in trade and other receivables (497,204) (165,954) (Increase) / Decrease in other current assets 607,052 (61,555) (Increase) / Decrease in other non-current assets (78,067) 4,496 Increase / (Decrease) in trade and other payables 264,276 (157,520) Increase / (Decrease) in other current liabilities 4,799 10,328 Cash generated from operations 197,178 (528,170)

Finance income received 346,805 3,262,022 Finance costs paid (682,041) (206,902) Dividend received 2,363,478 1,478,608 Tax paid (473,682) (310,834) Gratuity paid (4,898) (9,148) Net cash flow from operating activities 1,746,840 3,685,576

CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment - (10,624) Purchase of intangible assets - (115,509) Increase in interest in subsidiaries (6,301,392) (4,921,450) Proceeds from sale of property, plant and equipment and intangible - 523 Proceeds from sale of non-current investments - 2,185 (Purchase) / disposal of short term investments (net) (7,965,140) (13,847,009) (Purchase) / disposal of non current financial assets (net) (14,922,200) (19,416) Net cash flow from/(used in) investing activities (29,188,732) (18,911,300)

CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Dividend paid (659,275) (1,318,173) Proceeds from/(repayment of) short term borrowings 7,200,000 (4,000,010) Proceeds from/(repayment of) long term borrowings 17,781,801 (148,170) Net cash flow from / (used in) financing activities 24,322,526 (5,466,353)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (3,119,366) (20,692,077)

CASH AND CASH EQUIVALENTS AT THE BEGINNING 6,906,686 26,782,682

CASH AND CASH EQUIVALENTS AT THE END 3,787,320 6,090,605

ANALYSIS OF CASH & CASH EQUIVALENTS Favourable balances Short term investments 2,559,540 5,546,228 Cash in hand and at bank 1,234,111 578,965 Unfavourable balances Bank overdrafts (6,331) (34,588) Total cash and cash equivalents 3,787,320 6,090,605

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

14 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 COMPANY STATEMENT OF CHANGES IN EQUITY

Note Stated Other Fair value Revenue Total capital capital reserve of reserves Equity reserve financial assets at FVOCI*

As at 1 April 2019 62,806,482 2,390,966 9,773 55,598,189 120,805,410

Profit for the period - - - 2,726,378 2,726,378 Other comprehensive income - - 19,216 - 19,216 Total comprehensive income - - 19,216 2,726,378 2,745,594 Share based payments - 185,617 - - 185,617 Final dividend paid - 2018/19 11 - - (1,318,173) (1,318,173) As at 30 September 2019 62,806,482 2,576,583 28,989 57,006,394 122,418,448

As at 1 April 2020 62,881,295 2,700,147 24,797 59,631,436 125,237,675

Profit for the period - - - 2,070,764 2,070,764 Other comprehensive income - - 910 - 910 Total comprehensive income - - 910 2,070,764 2,071,674 Share based payments - 144,119 - - 144,119 Dividend paid - 2020/21 - - - (659,275) (659,275) As at 30 September 2020 62,881,295 2,844,266 25,707 61,042,925 126,794,193

* Fair value through other comprehensive income Note : All values are in LKR '000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures not audited.

15 NOTES TO THE FINANCIAL STATEMENTS

Operating segment information Business segments The 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 quarter ended 30 September 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Goods transferred at a point in time 3,483,865 5,134,641 5,201,953 4,327,661 17,620,414 16,276,243 ------636,457 540,083 26,942,689 26,278,628 Services transferred over time 573,515 617,595 - - 72,509 47,591 1,182,742 3,740,053 170,801 206,861 3,786,875 2,818,080 1,061,544 935,197 6,847,986 8,365,377 Total segment revenue 4,057,380 5,752,236 5,201,953 4,327,661 17,692,923 16,323,834 1,182,742 3,740,053 170,801 206,861 3,786,875 2,818,080 1,698,001 1,475,280 33,790,675 34,644,005 Eliminations of inter segment revenue (1,400,975) (940,158) Net revenue 32,389,700 33,703,847

Segment result 137,990 339,746 787,202 517,329 952,021 554,211 (2,035,254) (629,460) (51,387) (52,549) (110,771) (137,351) (480,117) (123,071) (800,316) 468,855

Finance cost (10,878) (34,394) (37,424) (56,258) (424,005) (421,054) (301,939) (113,254) (3,542) (11,660) 247,708 250,879 (332,587) (37,541) (862,667) (423,282) Finance income 32,270 37,400 12,293 12,875 13,451 6,856 47,516 56,409 19,554 27,291 26,695 24,241 1,066,448 1,224,465 1,218,227 1,389,537 Share of results of equity accounted investees 708,362 693,157 - - - - (16,832) 863 14,764 61,554 418,668 365,035 - - 1,124,962 1,120,609 Eliminations / adjustments - 13,215 (14,778) (3,000) (2,368) - (883) (2,933) (8,263) (5,604) - - (18,389) 40,250 (44,681) 41,928 Profit / (loss) before tax 867,744 1,049,124 747,293 470,946 539,099 140,013 (2,307,392) (688,375) (28,874) 19,032 582,300 502,804 235,355 1,104,103 635,525 2,597,647 Tax expense (9,753) (61,944) (164,671) (138,014) 110,642 (44,709) 250,087 69,631 (19,079) 8,733 (68,684) (62,247) (262,592) (131,077) (164,050) (359,627) Profit / (loss) for the period 857,991 987,180 582,622 332,932 649,741 95,304 (2,057,305) (618,744) (47,953) 27,765 513,616 440,557 (27,237) 973,026 471,475 2,238,020

Purchase and construction of PPE* 2,417 38,739 64,635 368,877 643,148 637,506 498,902 3,043,317 33,212 53,813 6,630 29,108 2,937 22,556 1,251,881 4,193,916 Addition to IA* - 710 474 597 452,238 26,104 - 14,552 - - 1,774 11,352 2,147 10,620 456,633 63,935 Depreciation of PPE* 48,102 34,674 161,217 206,120 287,296 255,526 523,113 433,292 12,266 11,076 20,983 21,540 29,712 32,087 1,082,689 994,315 Amortisation of IA* 381 569 671 704 26,212 14,681 16,953 16,558 1,664 1,688 91,139 81,206 8,621 8,897 145,641 124,303 Amortisation of ROU* assets - - 1,642 1,607 299,285 186,472 292,990 231,079 5,136 4,555 22,604 32,700 294 294 621,951 456,707 Employee benefit provision and related costs 4,268 7,102 43,832 38,399 24,553 21,800 39,303 24,675 645 519 15,510 12,321 29,699 28,569 157,810 133,385

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)

16 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 Operating segment information Business segments The 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 quarter ended 30 September 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Segment result 137,990 339,746 787,202 517,329 952,021 554,211 (2,035,254) (629,460) (51,387) (52,549) (110,771) (137,351) (480,117) (123,071) (800,316) 468,855

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 NOTES TO THE FINANCIAL STATEMENTS

Operating segment information Business segments The 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 six months ended 30 September 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Goods transferred at a point in time 6,157,820 9,992,368 8,381,541 8,876,383 29,988,059 31,968,817 ------1,228,525 1,073,195 45,755,945 51,910,763 Services transferred over time 1,038,729 1,239,936 - - 95,978 47,591 1,337,042 6,654,722 281,014 416,776 6,082,467 5,276,842 1,901,067 1,779,325 10,736,297 15,415,192 Total segment revenue 7,196,549 11,232,304 8,381,541 8,876,383 30,084,037 32,016,408 1,337,042 6,654,722 281,014 416,776 6,082,467 5,276,842 3,129,592 2,852,520 56,492,242 67,325,955 Eliminations of inter segment revenue (2,500,494) (1,884,092) Net revenue 53,991,748 65,441,863

Segment result 262,357 492,371 1,007,594 1,143,911 1,023,847 1,181,674 (4,552,631) (1,668,940) (108,658) (126,244) 638,511 174,076 (95,973) (230,519) (1,824,953) 966,329

Finance cost (30,656) (71,659) (89,061) (120,497) (894,264) (851,221) (600,629) (218,227) (10,057) (22,648) (394,106) (32,625) (819,743) (267,702) (2,838,516) (1,584,579) Finance income 65,683 74,004 22,121 26,535 22,563 13,330 102,649 127,992 39,188 95,861 49,856 113,315 1,004,233 1,958,438 1,306,293 2,409,475 Share of results of equity accounted investees 888,644 1,537,286 - - - - (35,886) (14,746) 3,896 47,226 756,808 623,691 - - 1,613,462 2,193,457 Eliminations / adjustments - - (17,778) (6,000) 3,828 - (1,764) (5,866) (16,527) (15,400) - - (18,389) - (50,630) (27,266) Profit / (loss) before tax 1,186,028 2,032,002 922,876 1,043,949 155,974 343,783 (5,088,261) (1,779,787) (92,158) (21,205) 1,051,069 878,457 70,128 1,460,217 (1,794,344) 3,957,416 Tax expense (34,840) (83,124) (199,480) (304,410) 220,362 (106,856) 565,705 142,100 (22,405) (14,604) (137,907) (120,819) (282,609) (329,313) 108,826 (817,026) Profit / (loss) for the period 1,151,188 1,948,878 723,396 739,539 376,336 236,927 (4,522,556) (1,637,687) (114,563) (35,809) 913,162 757,638 (212,481) 1,130,904 (1,685,518) 3,140,390

Purchase and construction of PPE* 4,934 154,274 111,058 530,826 1,060,157 1,296,566 923,853 4,707,530 33,212 149,384 25,103 50,790 12,237 64,484 2,170,554 6,953,854 Addition to IA* 500 710 3,613 1,408 487,873 43,380 - 19,877 - - 10,518 18,871 5,089 122,613 507,593 206,859 Depreciation of PPE* 96,691 68,984 419,869 409,495 571,833 509,560 1,080,282 848,642 24,553 21,945 41,882 42,485 67,199 63,357 2,302,309 1,964,468 Amortisation / impairment of IA* 754 1,138 1,276 1,392 51,032 28,139 33,905 30,761 3,337 3,375 180,809 162,198 17,306 16,465 288,419 243,468 Amortisation of ROU* assets 1,037 - 3,172 3,147 512,923 372,033 736,579 456,158 10,272 9,594 45,631 45,872 587 587 1,310,201 887,391 Employee benefit provision and related costs 16,111 13,347 87,720 74,569 42,857 36,520 79,174 96,678 1,505 1,161 33,162 19,520 59,239 62,926 319,768 304,721

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 SIX MONTHS ENDED 30 SEPTEMBER 2020 Operating segment information Business segments The 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 six months ended 30 September 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Segment result 262,357 492,371 1,007,594 1,143,911 1,023,847 1,181,674 (4,552,631) (1,668,940) (108,658) (126,244) 638,511 174,076 (95,973) (230,519) (1,824,953) 966,329

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)

19 NOTES TO THE FINANCIAL STATEMENTS

Operating segment information Business segments The 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 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020

Property, plant and equipment 969,570 1,058,895 9,478,756 9,787,579 13,230,172 12,759,302 57,039,703 57,493,120 4,763,554 4,795,211 2,474,974 2,491,822 1,357,473 1,377,581 89,314,202 89,763,510 Right-of-use-assets 1,383 2,420 235,993 238,275 9,297,763 8,405,902 27,715,885 26,859,174 224,192 225,680 268,955 278,669 36,568 37,155 37,780,739 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 8,088 8,342 251,627 249,290 1,006,510 535,896 274,225 308,129 917 29,336 1,192,112 1,316,147 170,963 158,098 2,904,442 2,605,238 Non-current financial assets 154,621 153,004 174,362 172,527 151,549 132,965 6,526,982 6,722,027 40,130 227,449 42,493,468 38,561,535 15,466,060 333,040 65,007,172 46,302,547 Other non-current assets 18,706 20,486 51,395 55,962 861,370 881,782 36,430 37,318 83,558,219 78,973,882 99,871 112,579 116,499 32,954 84,742,490 80,114,963 Segment non-current assets 1,152,368 1,243,147 10,488,554 10,800,054 24,547,364 22,715,847 96,115,950 95,942,493 118,656,373 115,562,851 46,529,380 42,760,752 19,255,272 2,804,604 316,745,261 291,829,748

Investments in equity accounted investees 12,784,719 13,444,422 - - - - 1,358,697 1,394,583 1,887,189 1,883,293 12,392,559 11,607,194 - - 28,423,164 28,329,492 Deferred tax assets 1,210,414 902,382 Goodwill 738,596 738,596 Eliminations / adjustments (5,783,751) (5,906,112) Total non-current assets 341,333,684 315,894,106

Inventories 753,615 729,864 2,098,658 2,065,766 5,890,892 5,361,774 324,185 426,131 40,409,991 41,407,129 5,693 12,514 268,355 198,206 49,751,389 50,201,384 Trade and other receivables 1,531,808 1,896,377 2,804,469 2,623,940 2,233,082 2,649,605 1,193,778 3,340,894 257,594 121,086 1,367,549 1,184,041 2,518,140 1,038,157 11,906,420 12,854,100 Short term investments 150,551 205,320 130,032 14,706 1,988,424 449,088 2,996,981 3,199,538 453,306 888,226 9,620,012 8,205,827 31,017,841 27,661,442 46,357,147 40,624,147 Cash in hand and at bank 2,322,961 4,495,130 186,414 323,546 568,793 240,814 921,160 1,463,798 3,606,168 1,726,800 616,695 1,063,919 3,158,262 2,117,976 11,380,453 11,431,983 Segment current assets 4,758,935 7,326,691 5,219,573 5,027,958 10,681,191 8,701,281 5,436,104 8,430,361 44,727,059 44,143,241 11,609,949 10,466,301 36,962,598 31,015,781 119,395,409 115,111,614

Other current assets 5,913,048 6,513,353 Eliminations / adjustments (3,784,161) (575,054) Total current assets 121,524,296 121,049,913 Total assets 462,857,980 436,944,019

Insurance contract liabilities ------41,528,558 38,185,839 - - 41,528,558 38,185,839 Interest bearing loans and borrowings 43,889 - 899,063 1,080,214 - - 16,342,991 17,350,581 50,216,770 38,358,644 - - 18,329,958 289,705 85,832,671 57,079,144 Lease liability 2,007 2,333 101,060 87,887 8,460,617 7,334,023 13,903,420 12,321,600 432 432 166,314 163,849 - - 22,633,850 19,910,124 Employee benefit liabilities 99,325 94,899 608,207 548,681 298,178 254,210 869,758 813,935 14,664 110,174 225,050 204,579 464,247 317,434 2,579,429 2,343,912 Non-current financial liabilities ------3,538,004 3,619,863 - - 7 - 3,538,011 3,619,863 Other non-current liabilities - - 115,610 117,940 - - 152,993 93,353 13,015,038 12,402,802 - - 477 487 13,284,118 12,614,582 Segment non-current liabilities 145,221 97,232 1,723,940 1,834,722 8,758,795 7,588,233 31,269,162 30,579,469 66,784,908 54,491,915 41,919,922 38,554,267 18,794,689 607,626 169,396,637 133,753,464

Deferred tax liabilities 7,821,618 8,294,955 Eliminations / adjustments (5,968,989) (6,154,472) Total non-current liabilities 171,249,266 135,893,947

Trade and other payables 1,344,119 1,853,419 2,623,606 1,726,140 11,728,448 8,797,570 2,025,232 2,281,147 1,104,873 6,005,379 3,463,816 2,708,601 1,367,880 1,032,217 23,657,974 24,404,473 Short term borrowings 1,860,644 4,073,865 - - 6,687,919 1,984,311 2,094,024 1,914,264 - - - - 7,237,474 12,074 17,880,061 7,984,514 Interest bearing loans and borrowings 1,111 - 543,455 543,455 - - 2,014,279 1,081,608 1,613,953 3,310,571 - - 406,679 316,042 4,579,477 5,251,676 Lease liability - - 1,008 11,043 276,581 237,954 1,260,646 1,100,006 - - 96,656 101,110 - - 1,634,891 1,450,113 Other current financial liabilities - - - - 10,551 ------10,551 - Bank overdrafts 403,853 409,700 920,049 1,637,251 4,122,653 9,200,324 4,638,075 3,789,101 363,424 937,611 143,046 331,411 366,716 1,446,072 10,957,816 17,751,470 Segment current liabilities 3,609,727 6,336,984 4,088,118 3,917,889 22,826,152 20,220,159 12,032,256 10,166,126 3,082,250 10,253,561 3,703,518 3,141,122 9,378,749 2,806,405 58,720,770 56,842,246

Income tax liabilities 1,515,495 1,747,597 Other current liabilities 1,506,099 1,623,137 Eliminations / adjustments (1,160,936) (2,886,771) Total current liabilities 60,581,428 57,326,210 Total liabilities 231,830,694 193,220,157

Total segment assets 5,911,303 8,569,838 15,708,127 15,828,012 35,228,555 31,417,128 101,552,054 104,372,854 163,383,432 159,706,092 58,139,329 53,227,053 56,217,870 33,820,385 436,140,670 406,941,362 Total segment liabilities 3,754,948 6,434,216 5,812,058 5,752,611 31,584,947 27,808,392 43,301,418 40,745,595 69,867,158 64,745,476 45,623,440 41,695,389 28,173,438 3,414,031 228,117,407 190,595,710

Note : All values are in LKR '000s, unless otherwise stated.

20 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 Operating segment information Business segments The 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 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020 30.09.2020 31.03.2020

Other current assets 5,913,048 6,513,353 Eliminations / adjustments (3,784,161) (575,054) Total current assets 121,524,296 121,049,913 Total assets 462,857,980 436,944,019

Deferred tax liabilities 7,821,618 8,294,955 Eliminations / adjustments (5,968,989) (6,154,472) Total non-current liabilities 171,249,266 135,893,947

Note : All values are in LKR '000s, unless otherwise stated.

21 NOTES TO THE FINANCIAL STATEMENTS

1 CORPORATE INFORMATION 4.2 Fair value measurement and related fair value disclosures John Keells Holdings PLC is a public limited company incorporated The fair values of all the financial assets and financial liabilities recognised and domiciled in Sri Lanka and listed on the Colombo Stock Exchange. during the period were not materially different from the transaction Ordinary shares of the company are listed on the Colombo Stock prices at the date of initial recognition. There were no transfers between Exchange and Global Depository Receipts (GDRs) are listed on the Level 1 and Level 2 and no transfers into or out of Level 3 categories as Luxembourg Stock Exchange. per the fair value hierarchy, during the period. The fair value changes on financial instruments in Level 3 category was properly recorded in the 2 INTERIM CONDENSED FINANCIAL STATEMENTS statement of other comprehensive income and there were no purchases The financial statements for the period ended 30 September 2020, and/or disposals during the period. includes “the Company” referring to John Keells Holdings PLC, as the holding company and “the Group” referring to the companies whose Fair valuation was done as of 30 September 2020 for all unquoted equity accounts have been consolidated therein. shares classified as Level 3 within the fair value hierarchy according to fair valuation methodology. Fair value would not significantly vary if one or 3 APPROVAL OF FINANCIAL STATEMENTS more of the inputs were changed. The interim condensed financial statements of the Group and the Company for the 6 months ended 30 September 2020 were authorised 5 OPERATING SEGMENTS for issue by the Board of Directors on 5 November 2020. For management purposes, the Group organised into business units based on their products and services and has seven reportable 4 BASIS OF PREPARATION AND CHANGES TO THE GROUP'S operating segments as follows: ACCOUNTING POLICIES 4.1 Basis of Preparation Transportation The interim condensed consolidated financial statements for the six Consumer Foods months ended 30 September 2020 have been prepared in accordance Retail with LKAS 34 Interim Financial Reporting. Leisure Property The interim condensed consolidated financial statements do not include Financial Services all the information and disclosures required in the annual financial Others statements, and should be read in conjunction with the Group’s annual consolidated financial statements as at 31 March 2020. 6 CHANGE IN INSURANCE CONTRACT LIABILITIES The results of Union Assurance PLC are consolidated line by line into The presentation and classification of the financial statements of the Group's consolidated income statement. The change in insurance the previous period have been amended, where relevant, for better contract liabilities represents the transfer to the Life Fund, the difference presentation and to be comparable with those of the current period. between all income and expenditure attributable to life policy holders during the 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.

22 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 7 NET FINANCE INCOME/EXPENSE GROUP COMPANY For the six months ended 30 September 2020 2019 2020 2019 In LKR ‘000s

Finance income Interest income 3,744,642 3,660,773 955,449 1,013,473 Dividend income on Financial assets at fair value through profit or loss 42,935 103,188 - 18,414 Investment related direct expenses (45,536) (42,290) - - Exchange gains - 876,047 - 876,047 Total finance income 3,742,041 4,597,718 955,449 1,907,934

Finance cost Interest expense on borrowings 1,140,059 1,079,701 180,220 206,902 Finance charge on lease liabilities 684,558 472,257 - - Fair value loss on financial assets at fair value through profit or loss 394,104 32,621 - - Exchange loss 619,795 - 619,795 - Total finance cost 2,838,516 1,584,579 800,015 206,902 Net finance income 903,525 3,013,139 155,434 1,701,032

8 TAX EXPENSE GROUP COMPANY For the six months ended 30 September 2020 2019 2020 2019 In LKR ‘000s

Income statement Current income tax 705,458 797,768 239,077 145,787 Deferred tax charge/(reversal) (814,284) 19,258 - - (108,826) 817,026 239,077 145,787

Other comprehensive Income Deferred tax charge/(reversal) 9,677 18,819 - - 9,677 18,819 - -

23 NOTES TO THE FINANCIAL STATEMENTS

9 RELATED PARTY TRANSACTIONS GROUP COMPANY For the six months ended 30 September 2020 2019 2020 2019 In LKR ‘000s

Transactions with related parties Subsidiaries Purchase of goods 4,950 3,030 Rendering of services 512,284 566,241 Receiving of services 178,697 41,646 Rent paid 15,967 20,725 Dividend received 1,004,295 648,995 Equity accounted investees Sale of goods 4,291 12,096 - - Rendering of services 227,113 182,574 135,438 164,332 Receiving of services 118,727 107,490 - 145 Interest received 42,981 36,186 11 - Interest paid 10,014 5,047 - - Dividend received 1,359,184 811,199 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 123,684 134,432 21,721 27,813

10 SHARE INFORMATION 10.1 Stated capital Stated capital is represented by the number of shares in issue as given below:

As at 30-09-2020 30-06-2020

Ordinary shares * 1,318,550,768 1,318,550,768

* Includes global depository receipts of 1,320,942 (30 June 2020 - 1,320,942).

10.2 Public share holdings Percentage of shares held by the public and the number of public shareholders is as given below:

As at 30-09-2020 30-06-2020

Public shareholding (%) 99.02 99.15 Number of public shareholders 14,118 13,478 Compliant under option 1 - Float adjusted market capitalization (LKR Bn) 175.74 160.15

10.3 Net assets per share Net assets per share have been calculated, for all periods, based on the number of shares in issue as at 30 September 2020.

24 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 10.4 Market price per share The Company's highest, lowest and last traded market price is as given below:

For the quarter ended 30 September 2020 2019

Highest 138.00 158.80 Lowest 104.00 139.00 Last traded 134.60 153.80

10.5 Directors' share holdings The number of shares held by the Board of Directors (including their spouses) are as given below:

As at 30-09-2020 30-06-2020

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 shareholders Twenty largest shareholders of the Company are as given below: As at 30-09-2020 30-06-2020 Number of % Number of % shares shares

1 Mr S E Captain 152,786,302 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 91,787,627 7.0 87,164,219 6.6 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 30,764,942 2.3 32,906,565 2.5 8 Mr R S Captain 25,631,534 1.9 15,064,303 1.1 9 Aberdeen Standard Asia Focus PLC 24,993,572 1.9 26,393,572 2.0 10 Edgbaston Asian Equity Trust 20,589,253 1.6 27,978,963 2.1 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 18,626,145 1.4 18,690,918 1.4 14 Mrs C S De Fonseka 16,952,586 1.3 16,760,381 1.3 15 Mrs S A J De Fonseka 15,204,230 1.2 15,009,183 1.1 16 Schroder Asian Growth Fund 13,164,018 1.0 13,164,018 1.0 17 Sisil Investment Holdings (Pvt) Ltd. 12,195,133 0.9 Nil 0.0 18 Aberdeen Standard SICAV I - Asian Smaller Companies Fund 12,113,554 0.9 15,613,554 1.2 19 Edinburgh Dragon Trust PLC - London 11,860,519 0.9 11,860,519 0.9 20 Don and Don Holdings (Pvt) Ltd. 11,656,245 0.9 Nil 0.0

25 NOTES TO THE FINANCIAL STATEMENTS

11 DIVIDENDS PAID For the six months ended 30 September 2020 2019 In LKR '000s

Dividend for 2020/21 LKR 0.50 (2018/19 LKR 1.00 ) 659,275 1,318,173

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 2020.

13 EVENTS AFTER THE REPORTING PERIOD Interim Dividend The Board of Directors of the Company declared a second 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 7 December 2020.

26 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED 30 SEPTEMBER 2020 CORPORATE INFORMATION

Name of Company Related Party Transaction Review Contact for Media John Keells Holdings PLC Committee Corporate Communications Division M P Perera - Chairperson John Keells Holdings PLC Legal Form D A Cabraal 117 Sir Chittampalam A. Gardiner Mawatha Public Limited Liability Company A N Fonseka Colombo 2, Sri Lanka Incorporated in Sri Lanka in 1979 Telephone : +94 11 230 6191 Ordinary Shares listed on the Colombo Stock Project Risk Assessment Committee Email : [email protected] Exchange S S H Wijayasuriya - Chairman GDRs listed on the Luxembourg Stock K N J Balendra Auditors Exchange J G A Cooray Ernst & Young M P Perera Chartered Accountants Company Registration No. P.O. Box 101 PQ 14 Registered Office of the Company Colombo, Sri Lanka 117 Sir Chittampalam A. Gardiner Mawatha Directors Colombo 2, Sri Lanka Bankers for the Company K N J Balendra - Chairman/CEO Telephone : +94 11 230 6000 Bank of Ceylon J G A Cooray - Deputy Chairman/Group Internet : www.keells.com Citibank N.A. Finance Director Email : [email protected] Commercial Bank of Ceylon D A Cabraal Deutsche Bank A.G. A N Fonseka Secretaries DFCC Bank M A Omar Keells Consultants (Pvt) Ltd. Hatton National Bank M P Perera 117 Sir Chittampalam A. Gardiner Mawatha Hongkong and Shanghai Banking Corporation S S H Wijayasuriya Colombo 2, Sri Lanka Nations Trust Bank Telephone : +94 11 230 6245 People’s Bank Senior Independent Director Facsimile : +94 11 243 9037 Sampath Bank A N Fonseka Seylan Bank Investor Relations Standard Chartered Bank Audit Committee John Keells Holdings PLC A N Fonseka - Chairman 117 Sir Chittampalam A. Gardiner Mawatha Depository for GDRs D A Cabraal Colombo 2, Sri Lanka Citibank N.A. New York M P Perera Telephone : +94 11 230 6170 Facsimile : +94 11 230 6160 Human Resources and Compensation Email : [email protected] Committee D A Cabraal - Chairman Sustainability, Enterprise Risk M A Omar Management and Group Initiatives S S H Wijayasuriya 186 Vauxhall Street, Colombo 2, Sri Lanka Telephone : +94 11 230 6182 Nominations Committee Facsimile : +94 11 230 6249 M A Omar - Chairman Email : [email protected] K N J Balendra M P Perera S S H Wijayasuriya www.keells.com