FOR THE QUARTER ENDED - Colombo Stock Exchange · For the quarter ended 31st March 31st March ......

The Lanka HospitalsC O R P O R A T I O N PLC (PQ 180)

PROVISIONAL CONSOLIDATED FINANCIAL

STATEMENTS

FOR THE QUARTER ENDED

31st MARCH 2017

THE LANKA HOSPITALS CORPORATION PLC

Provisional Consolidated Financial Statements

For the Quarter ended

31st March 2017

Board of Directors

Dr. Sarath PARANAVITANE - ChairmanVen. Thiniyawala PALITHA THERO

Dr. Rohan Lalith WIJESUNDERA

Prof. Menaka Dilani Samarawickrema LOKUHETTY

Tel: +94 11 5430000 Fax: +94 11 4511199

E-mail: [email protected]

(Alternate Director to Mr. Daljit SINGH )

Mr.Keith Damien BERNARD

No. 578, Elvitigala Mawatha, Narahenpita, Colombo 05

Principal Place of Business & Registered Office

Mrs.Umashanthiee RAJAMANTRI

Dr.Anil ABEYWICKRAMA

Mr.Ravi SACHDEV

Web: www.lankahospitals.com

Mr.Asendra Chaminda SIRIWARDENA

Mr.Kalyana Sundaram SRIVASTAVA

Mr.Thanuja Lasitha WEERATNE

Mr.Meghraj Arvindrao GORE(Alternate Director to Mr. Kalyana Sundaram SRIVASTAVA)

Mr.Nandana Jayantha MUNASINGHE (appointed on 20th March 2017)

Mr. Daljit SINGH

THE LANKA HOSPITALS CORPORATION PLCProvisional Consolidated Financial Statements for the Quarter ended 31st March 2017

Statement of Financial Position

As at, 31st March 2017 31st Dec 2016 31st March 2017 31st Dec 2016Audited Audited

Rs. Rs. Rs. Rs.

ASSETS

Non Current Assets

Property, Plant & Equipment 4,479,006,508 4,082,879,318 4,106,117,931 3,707,134,116

Intangible Assets 60,068,058 60,324,099 32,930,447 32,596,152

Investment Property - - 110,000,000 110,000,000

Right-to-use of Land on Lease 192,771,687 189,305,932 192,771,687 189,305,932

Investment in Subsidiary - - 414,000,020 414,000,020

Total Non Current Assets 4,731,846,253 4,332,509,349 4,855,820,084 4,453,036,220

Current Assets

Inventories 316,893,487 318,869,291 243,596,584 266,626,776

Trade & Other Receivables 489,912,721 498,903,444 445,057,309 455,908,612

Amounts due from Related Parties 4,022,545 3,567,716 108,750,503 100,856,467

Economic Service Charge Recoverable 13,820,920 4,310,970 - -

Other Financial Assets 1,733,604,458 2,028,553,267 1,413,604,458 1,708,553,267

Cash and Cash Equivalents 282,485,675 165,601,181 220,501,126 164,702,029

Total Current Assets 2,840,739,805 3,019,805,869 2,431,509,980 2,696,647,151 Total Assets 7,572,586,058 7,352,315,218 7,287,330,064 7,149,683,371

EQUITY AND LIABILITIES

Equity

Stated Capital 2,671,543,090 2,671,543,090 2,671,543,090 2,671,543,090

Revaluation Reserve 1,284,777,892 1,284,777,892 1,220,128,576 1,220,128,576

Retained Earnings 2,099,924,265 1,887,953,836 1,781,585,452 1,636,428,932

Total Equity 6,056,245,247 5,844,274,819 5,673,257,119 5,528,100,599

Non Current Liabilities

Employee Benefit Obligations 138,546,625 133,612,676 123,523,244 119,668,001

Deferred Tax Liabilities 436,028,140 426,595,105 421,488,794 412,055,759

Total Non Current Liabilities 574,574,765 560,207,781 545,012,038 531,723,760

Current Liabilities

Amounts due to Related Parties 20,791,824 24,235,610 4,769,075 4,769,075

Trade & Other Payables 587,617,303 653,625,821 736,681,918 817,952,446

Income Tax Payable 47,344,677 36,107,992 41,597,674 33,274,297

Bank Overdraft 286,012,240 233,863,194 286,012,240 233,863,194

Total Current Liabilities 941,766,045 947,832,618 1,069,060,907 1,089,859,012

Total Liabilities 1,516,340,810 1,508,040,399 1,614,072,945 1,621,582,772 Total Equity & Liabilities 7,572,586,058 7,352,315,218 7,287,330,064 7,149,683,371

The figures as at 31st March 2017 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.

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

Date: 9th May 2017

Colombo

(Amounts in brackets indicate deductions)

Group Company

Director


Statement of Comprehensive Income

For the quarter ended 31st March 31st March 2017 31st March 2016 31st March 2017 31st March 2016

Rs. Rs. Rs. Rs.

Revenue 1,508,621,497 1,382,853,189 1,237,340,186 1,165,956,830

Cost of services (785,435,083) (709,010,417) (667,752,384) (623,475,522)

Gross Profit 723,186,413 673,842,772 569,587,803 542,481,308

Other operating income 11,287,587 9,375,197 12,742,587 11,248,579

Administrative expenses (397,636,052) (356,879,689) (319,171,034) (296,062,992)

Other operating expenses (154,331,015) (134,741,154) (139,861,249) (120,829,596)

Profit from Operations 182,506,933 191,597,126 123,298,106 136,837,298

Finance income 57,138,708 30,971,571 46,620,320 28,701,211

Profit before tax 239,645,641 222,568,698 169,918,425 165,538,510

Income tax expense (27,675,212) (29,907,332) (24,761,905) (29,487,810)

Profit for the period 211,970,428 192,661,365 145,156,520 136,050,700

Other comprehensive Income - - - -

Other comprehensive income net of tax - - - -

Total comprehensive income for the period 211,970,428 192,661,365 145,156,520 136,050,700

Basic earnings per share 0.95 0.86 0.65 0.61

Dividend per share - - - -


Group Company


Company Statement of Changes in Equity

Stated Revaluation Retained Total

capital reserve earning / (loss)

Balance as at 1st January 2016 2,671,543,090 960,466,514 1,313,679,672 4,945,689,276

Profit for the period (January 2016 - March 2016) - - 136,050,700 136,050,700

Balance as at 31st March 2016 2,671,543,090 960,466,514 1,449,730,371 5,081,739,975

Balance as at 1 January 2017 2,671,543,090 1,220,128,576 1,636,428,932 5,528,100,599


Balance as at 31st March 2017 2,671,543,090 1,220,128,576 1,781,585,452 5,673,257,119

Group Statement of Changes in Equity

Stated Revaluation Retained Total

capital reserve earning / (loss)

Balance as at 1st January 2016 2,671,543,090 994,281,265 1,324,306,720 4,990,131,075


Balance as at 31st March 2016 2,671,543,090 994,281,265 1,516,968,085 5,182,792,440

Balance as at 1 January 2017 2,671,543,090 1,284,777,892 1,887,953,836 5,844,274,819


Balance as at 31st March 2017 2,671,543,090 1,284,777,892 2,099,924,265 6,056,245,247



Cash Flow Statement

CASH FLOW FROM OPERATING ACTIVITIES 31st March 2017 31st March 2016 31st March 2017 31st March 2016

Rs. Rs. Rs. Rs.

Profit before tax 239,645,641 222,568,698 169,918,425 165,538,510

Adjustments for :

Interest income (33,661,728) (21,705,231) (23,143,340) (19,434,871)

Depreciation on property, plant and equipment 82,354,785 72,564,109 74,269,540 65,129,514

Amortisation of intangible assets 3,033,147 2,725,723 1,634,902 1,451,637

Amortisation of advance lease premium 1,170,869 1,170,869 1,170,869 1,170,869

Provision for defined benefit obligation 6,636,635 6,547,200 5,557,928 6,115,950

Provision for impairment of trade receivable (2,774,930) 3,604,815 (2,774,930) 3,604,815

Gain on disposal of property, plant & equipment (619,417) - (619,417) -

Operating profit before working capital changes 295,785,000 287,476,182 226,013,977 223,576,424

Decrease in inventories 1,975,804 905,331 23,030,192 1,994,511

Decrease in trade and other receivables 2,255,703 2,807,615 13,626,233 4,779,052

(Increase) / decrease in amounts due from related company (454,828) 1,594,880 (7,894,036) (5,625,774)

Increase / (decrease) in amounts due to related company (3,443,786) (9,346,514) - 1,741,866

Decrease in trade and other payables (66,008,519) (49,391,010) (81,270,528) (125,566,200)

Cash generated from operating activities 230,109,374 234,046,485 173,505,839 100,899,880

Income Tax paid (7,005,480) (6,129,599) (7,005,480) (6,129,599)

Defined benefit obligation paid (1,702,686) (5,056,689) (1,702,686) (5,056,689)

Net cash flow from operating activities 221,401,208 222,860,197 164,797,673 89,713,591

Cash flow from investing activities

Purchase of property, plant and equipment (480,682,776) (116,237,015) (475,454,161) (87,968,028)

Purchase of Intangible assets (2,777,107) - (1,969,197) -

Proceeds from disposal of property, plant & equipment 2,820,222 - 2,820,222 -

Advance lease premium paid (4,636,636) (4,636,639) (4,636,636) (4,636,639)

Interest income 33,661,728 21,705,231 23,143,340 19,434,871

(Investment)/withdrawal in other financial assets 294,948,809 (122,006,453) 294,948,809 (72,006,453)

Net cash flow from investing activities (156,665,760) (221,174,877) (161,147,622) (145,176,251)

Cash flow from financing activities

Dividend paid - - - -

Net cash flow from financing activities - - - -

Net increase in cash and cash equivalents 64,735,449 1,685,320 3,650,051 (55,462,659)

Cash and cash equivalents at the beginning of the year (68,262,013) 35,971,546 (69,161,165) (918,760)

Cash and cash equivalents at the end of the year (3,526,565) 37,656,866 (65,511,114) (56,381,420)

Note A

Cash & Cash Equivalents at the end of the Period

Cash & Cash Equivalents 282,485,675 226,801,957 220,501,126 131,053,692

Bank Overdraft (286,012,240) (189,145,091) (286,012,240) (187,435,112)

(3,526,565) 37,656,866 (65,511,114) (56,381,420)


Group Company

3 months ended 3 months ended


Provisional Consolidated Financial Statements for the Quarter ended 31st March 2017

1). Basis of preparation of the Interim Financial Statements

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

2). Comparative figures

3). Contingent liabilities

4). Public Holding

5). Revaluation of Assets

The buildings of the Company / Group were revalued as at 31 December 2016 by Messrs A.A.M Fathihu - F.I.V (Sri Lanka)

independent qualified valuer. Such assets were valued on market approach (Direct Comparison method) and Cost approach

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.

The land of the company / Group were revalued as at 31st December 2016 by Messrs A.A.M Fathihu - F.I.V (Sri Lanka)

independent qualified valuer.Such assets were valued on open market value method. The surplus arising from the

revaluation was transferred to the revaluation reserve and the value of the land of the Company / Group has been reflected

in the financial statements at the revalued amount.

As per the Rule No 8.7 (h) of the Colombo Stock Exchange, percentage of public shareholding as at 31/3/2017 was 16.73%

(No of shares 37,433,261) and public shareholders as at 31/3/2017 was 7,334

There has been no significant change in the nature of the contingent Liabilities which were disclosed in the annual report for

the year ended 31 December 2016

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 financial statements

for the year ended 31st December 2016.

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 2016.

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.

6). Investment in Subsidiary

7). Investment Property

8). Capital Commitments

Rs

1999 to 2003 9,273,274 2004 to 2025 18,546,548 2026 9,273,274

The future aggregate minimum lease payments under non cancellable operating lease by 2026 as follows:

As at 31st March, 2017 2016Rs Rs

Within one year 18,546,548 18,546,548 One year to five years 74,186,192 74,186,192 After 5 years 83,459,466 102,006,014

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.

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 (Private) Limited.

The Company's investment properties were revalued on 1 January 2014, 31 December 2014 , 31st December 2015 and 31st

December 2016 on the basis of valuation by an independent professionally qualified valuer, who holds a recognised relevant

professional qualification and has recent experience in the locations and categories of the investment properties valued.

Valuations were made on the basis of market value. The fair value gain on investment property of Rs 3,592,000 was credited

to statement of comprehensive income 2015 and fair value gain of Rs.8,000,000 was credited to statement of

comprehensive income 2016.

The Company has entered into a 99 years lease agreement with the Urban Development Authority. In terms of this

agreement annual lease premium payable are as follow.

Annual lease

premiums

(Excluding taxes)

Group/Company

Lanka Hospitals Diagnostics (Private) Limited is committed to make a minimum investment of Rs. 500,000,000 in project

fixed assets to get the entitlement for a tax exemption period of seven years. The Company has invested Rs. 375,297,621.64

in fixed assets as of 31 st March 2017 and the balance commitment amounting to Rs. 124,702,378.36 to be fulfilled.

9). Events Occurring After the Reporting Date

10). Reclassification of Cost of Services Comparative Figures

11). Reclassification of Administrative Expenses Comparative Figures

Amounts transferred to administrative expenses are as follows:

1 st quarter 2017 2016 2017 2016

Staff cost 278,478,802 241,826,421 217,787,641 196,342,275

Depreciation 47,069,574 41,526,046 42,020,827 37,014,074

Other administrative expenses 72,087,676 73,527,222 59,362,567 62,706,643397,636,052 356,879,689 319,171,034 296,062,992

Company

No circumstance have arisen since the reporting date, which require adjustments to or disclosure in the Financial

Statements.

For the better presentation, the management has reclassified the clinical staff salaries under cost of services, which was

classified under staff costs in 1st quarter 2016. The amounts reclassified for 1st quarter 2016 was Rs. 144,976,177/=. In

addition to this reclassification, medical vehicle depreciation has also been categorized under cost of services, which was

classified under administration expenses in 1st quarter 2016. The amount reclassified for 1st quarter 2016 was Rs

1,507,371/=.

For the better presentation, the management has categorised general administration expenses incurred by the group under

the caption “Administrative expenses”.

Group


Provisional Consolidated Financial Statements for the Quarter ended 31st March 2017

Shareholder and Investor Information

Top 20 Shareholding as at 31st March 2017

Shareholder No of shares Holding

1 Sri Lanka Insurance Corporation Ltd - Life Fund 66,097,350 29.54%

2 Fortis Healthcare International Pte Limited 64,120,915 28.66%

3 Sri Lanka Insurance Corporation Ltd - General Fund 56,080,643 25.07%

4 Property Development PLC 21,329,000 9.53%

5 Bank of Ceylon A/c Ceybank Unit Trust 2,823,787 1.26%

6 Bank of Ceylon A/c Ceybank Century Growth Fund 833,094 0.37%

7 Deutsche Bank AG as Trustee for Namal Acuity Value 800,000 0.36%

8 Ceylon Investment PLC A/c # 01 448,000 0.20%

9 Mr. Don Janka Nishan Hettiarachchi 388,564 0.17%

10 Ceylon Guardian Investment Trust PLC A/C # 01 350,000 0.16%

11 Bank of Ceylon No.1 Account 314,042 0.14%

12 Deutsche Bank AG-National Equity Fund 300,000 0.13%

13 Deutsche Bank AG-As Trustee for Guardian Acuity 249,337 0.11%

14 Mr.Hamish Winston Mcdonald Woodward 220,300 0.10%

15 Sandwave Limited 206,108 0.09%

16 Life Insurance Corporation (Lanka) Ltd 186,817 0.08%

17 Mr.Abeysiri Hemapala Munasinghe 179,471 0.08%

18 Mr.Surendran Subramaniam 156,104 0.07%

19 Sezeka Limited 143,544 0.06%

20 Mr.Shyam Anel De Silva 115,196 0.05%

215,342,272 96.25%

Individual / Institution

As % As %

Individual 7,217 98.36 8,366,970 3.74

Institution 120 1.64 215,365,199 96.26

7,337 100.00 223,732,169 100.00

Resident / Non-Resident

As % No of Shares As %

Resident 7,313 99.67 158,870,806 71.01

Non-Resident 24 0.33 64,861,363 28.99

7,337 100.00 223,732,169 100.00

Directors'/Senior Management Shareholdings as at 31st March 2017

Board of Directors Position No of shares Holding %

Dr. Sarath PARANAVITANE Chairman - -

Ven Thiniyawala PALITHA THERO Director - -

Prof. Menaka Dilani Samarawickrema LOKUHETTY Director - -

Dr.Rohan Lalith WIJESUNDERA Director - -

Mr. Daljit SINGH Director - -

Mr.Kalyana Sundaram SRIVASTAVA Director - -

Mr.Keith Damien BERNAD Director - -

Dr. Anil ABEYWICKRAMA Director - -

Mrs.Ranathunga Arachchige Dona Umashanthiee RAJAMANTRI Director - -

Mr.Hewakumanayakage Asendra Chaminda SIRIWARDENA Director -

Mr.Weeratnemulla Gamage Thanuja Lasitha WEERATNE Director - -

Mr.Nandana Jayantha MUNASINGHE (Appointed on 20th March 2017) Director - -

Mr Ravi SACHDEV (Alternative Director to Mr.Daljith SINGH) Alternate Director - -

Senior Management

Chief Executive OfficerDr.Prasad Medawatte - -

No of Shareholders No of Shares

No of Shareholders

Mr Meghraj Aravindrao GORE (Alternative Director to Mr.Kalyana

Sundaram SRIVASTA)Alternate Director - -


Shareholder and Investor Information (cont.)

Price fluctuation (Market price of Ordinary share)

Rs. Rs.

Highest price

Lowest price

Closing Price

Summary of Share Ranges

Share RangeNo of

shareholdersNo of shares Holding %

1 1 -1,000 5,906 2,140,366 0.96

2 1001 - 10000 1,319 3,644,421 1.63

3 10,001 - 100,000 91 2,493,086 1.11

4 100,001 - 1,000,000 16 5,002,601 2.24

5 1,000,001 - 10,000,000 1 2,823,787 1.26

6 10,000,001 & Above 4 207,627,908 92.80

7,337 223,732,169 100.00

61.50 51.00

31st March 2017 31st March 2016

61.00

45.00

Current Interim Period Comparative Period

3 Months ended 3 months ended

68.50

58.00


Financial Indicators

Group Company Group Company1 Net asset per share Rs. Rs. Rs. Rs.

Total Assets - Short Term & Long Term Liabilities 27.07 25.36 26.12 24.71

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 -

5,528,100,599 3 Quick Asset Ratio (Times)

Current Assets-Inventory 2.68 2.05 2.85 2.23

Current Liabilities 2,187,913,396

1,069,060,907 4 Interest Cover

Profit before interest & tax (PBIT) N/A N/A N/A N/A

Interest charges 108,663,485

-

Current Period

3 Months ended 31st March 2017

Comparative Period

Immediately Preceding Financial Year

31st December 2016 (Audited)

Current Interim Period

Corporate Information

Name of the Company Auditors

The Lanka Hospitals Corporation PLC M/S KPMG

(Chartered Accountants)

Company Registration No. No: 32 A

PQ 180 Sir Mohamed MacanMarkar Mawatha

Colombo 03, Sri Lanka

Tel: +94 115426426

Registered Office Secretaries & Registrars to Shares

No.578, Elvitigala Mawatha, Business Intelligence (Private) Limited

Narahenpita, Colombo 05, Sri Lanka No. 8, Tickell Road,

Tel: +94 11 5430000 Colombo 08, Sri Lanka

Fax: +94 11 4511199 Tel: +94 112015900

E-mail: [email protected] Fax: +94 112015950

E-mail: [email protected]

Bankers

Bank of Ceylon

Hatton National Bank PLC

FOR THE QUARTER ENDED - Colombo Stock Exchange · For the quarter ended 31st March 31st March ......

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