LANKA ORIX LEASING COMPANY PLC · Lanka Orix Leasing Company PLC Statement of Financial Position As...

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LANKA ORIX LEASING COMPANY PLCINTERIM FINANCIAL STATEMENTS

YEAR ENDED 31 MARCH 2017

Lanka Orix Leasing Company PLC

Interim Financial Statements

For the year ended 31 March 2017

Content

1 Statement of Financial Position

2 Statement of Profit or Loss

3 Statement of Other Comprehensive Income

4 Statement of Changes in Equity

5 Statement of Cash Flows

6 Notes to the Interim Financial Statements

7 Operating Segments

8 Valuation of Financial Assets and Liabilities

9

10 Top 20 Shareholders

Statement of Directors' Holding and Chief Executive Officer’s holding in Shares of the Entity


Statement of Financial Position

As at 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16

Rs'000 Rs'000 Rs'000 Rs'000

Un-audited Audited Un-audited Audited

Assets

Cash and cash equivalents 54,215,239 13,725,794 460,015 63,407

Trading assets - fair value through profit or loss 4,649,565 2,397,547 453,205 420,126

Investment securities 54,379,321 60,951,440 348,508 684,543

Finance lease receivables, hire purchases and operating leases 51,886,988 51,666,748 4,422 8,920

Advances and other loans 366,809,380 161,116,017 785,110 1,774,112

Insurance premium receivables 1,080,757 801,165 - -

Inventories 4,070,520 3,645,281 364,029 462,760

Current tax assets 1,404,427 1,011,854 131,566 178,334

Trade and other current assets 14,979,118 10,480,953 26,262,575 16,524,924

Prepaid lease rentals on leasehold properties 741,279 742,535 - -

Investment properties 12,684,514 9,073,216 376,600 353,000

Real estate stocks - -

Biological Assets;

Consumable Biological Assets 2,984,091 6,150,990 - -

Bearer Biological Assets 1,151,490 4,811,353 - -

Investments in group companies;

Subsidiary companies - - 61,670,678 42,615,931

Jointly controlled entities - - - -

Equity accounted investees - Associates 15,764,523 16,493,637 4,314,001 7,816,377

Deferred tax assets 1,492,249 490,243 - 80

Intangible assets 13,299,451 2,482,046 203,085 210,021

Property, plant and equipment 39,331,927 33,553,739 6,633,568 4,381,379

Total assets 640,924,839 379,594,558 102,007,362 75,493,914

Liabilities and equity

Liabilities

Bank overdrafts 7,365,332 9,302,310 1,691,299 3,354,589

Trading liabilities - fair value through profit or loss 65,287 17,859 1,252 -

Deposits liabilities 211,128,007 74,165,732 - -

Interest bearing borrowings 286,749,284 205,774,163 51,006,998 35,014,816

Insurance provision - life 2,048,421 1,519,563 - -

Insurance provision - general 2,729,985 2,136,529 - -

Current tax payables 3,636,203 2,084,537 623,434 322,774

Trade and other payables 17,682,263 11,572,669 1,238,198 1,115,435

Deferred tax liabilities 4,492,485 3,930,668 219,926 -

Deferred income 235,832 651,021 - -

Retirement benefit obligations 2,175,902 2,063,282 234,548 184,863

Total liabilities 538,309,001 313,218,333 55,015,655 39,992,477

Equity

Stated capital (475,200,000 shares) 475,200 475,200 475,200 475,200

Reserves 9,075,732 5,436,196 3,377,627 1,653,318

Retained earnings 49,298,766 31,786,984 43,138,880 33,372,919

Equity attributable to shareholders of the Company 58,849,698 37,698,380 46,991,707 35,501,437

Non-controlling interests 43,766,140 28,677,845 - -

Total equity 102,615,838 66,376,225 46,991,707 35,501,437

Total liabilities & equity 640,924,839 379,594,558 102,007,362 75,493,914

Net assets per share (Rs.) 123.84 79.33 98.89 74.71

I certify that these Financial Statements have been prepared and presented in compliance with the requirements of the Companies Act, No.07 of 2007.

Sgd.

Mrs. S.S. Kotakadeniya

Chief Financial Officer - LOLC Group

The board of directors is responsible for the preparation and the fair presentation of these Financial Statements.

Approved and signed for and on behalf of the Board;

Sgd. Sgd.

Mr. I C Nanayakkara Mr. W.D.K. Jayawardena

Deputy Chairman Group Managing Director / CEO

31st May 2017, Rajagiriya (Greater Colombo)

CompanyGroup


Statement of Profit or Loss

31-Mar-17 31-Mar-16 Variance 31-Mar-17 31-Mar-16 Variance

Rs'000 Rs'000 Rs'000 Rs'000

Gross income 27,753,057 19,394,958 43 91,715,284 66,765,048 37

Interest income 15,631,264 11,096,197 41 54,573,084 38,654,652 41

Interest expense (11,415,296) (6,470,478) 76 (33,159,211) (18,850,392) 76

Net interest income 4,215,968 4,625,719 (9) 21,413,873 19,804,260 8

Revenue 6,697,735 5,622,324 19 23,478,451 20,228,126 16

Cost of sales (3,701,990) (2,839,659) 30 (14,121,284) (12,702,851) 11

Gross profit 2,995,745 2,782,665 8 9,357,167 7,525,275 24

Income (159,402) 1,252,321 (113) 7,650,036 6,751,926 13

Other income/(expenses) (Including net finance cost) 5,583,460 1,424,116 292 6,013,713 1,130,344 432

Profit before operating expenses 12,635,771 10,084,821 25 44,434,789 35,211,805 26

Operating expenses

VAT on financial services (857,249) (482,137) 78 (2,235,764) (1,299,682) 72

Other direct expenses excluding finance costs (1,498,584) (1,818,100) (18) (5,227,112) (3,863,958) 35

Personnel costs (3,813,565) (3,985,172) (4) (12,615,735) (10,309,111) 22

Net impairment (loss) / reversal on financial assets (2,293,418) (801,079) 186 (4,279,678) (2,978,061) 44

Depreciation and amortization (571,723) (507,059) 13 (1,862,658) (1,577,846) 18

Other operating expenses (714,999) (799,637) (11) (8,257,071) (6,470,433) 28

Results from operating activities 2,886,233 1,691,637 71 9,956,771 8,712,714 14

Share of profits of equity accounted investees 796,107 787,428 1 3,827,962 3,094,237 24

Results on acquisition and divestment of group investments 10,398,123 50,963 20,303 10,594,331 50,963 20,688

Profit before income tax expense 14,080,463 2,530,028 457 24,379,064 11,857,914 106

Income tax expense (1,046,484) (333,719) 214 (3,458,452) (2,526,527) 37

Profit for the period 13,033,979 2,196,309 493 20,920,612 9,331,387 124

Profit attributable to;

Equity holders of the Company 9,634,134 2,294,433 320 17,157,762 8,518,690 101

Non-controlling interests 3,399,845 (98,124) (3,565) 3,762,850 812,697 363

13,033,979 2,196,309 493 20,920,612 9,331,387 124

Basic earnings per share (Rs.) 20.27 4.83 320 36.11 17.93 101

Figures in brackets indicate deductions.

Group

Three Months Ended Year Ended


Statement of Other Comprehensive Income


Rs'000 Rs'000 Rs'000 Rs'000

Profit for the period 13,033,979 2,196,309 493 20,920,612 9,331,387 124

Other comprehensive income

Other comprehensive income that will never be reclassified to

profit or loss in subsequent periods:

Revaluation surplus of property, plant and equipment

Revaluation of property, plant and equipment 3,317,781 1,960,991 69 3,317,781 1,960,991 69

Related tax (59,807) (137,435) (56) (59,807) (137,435) (56)

Defined benefit plan actuarial gains / (losses)

Re-measurement of defined benefit liabilities 35,918 520,882 (93) 35,918 520,882 (93)

Related tax (7,576) (40,655) (81) (7,576) (40,655) (81)

Share of other comprehensive income of equity accounted

investees (net of tax) 314,949 147,842 113 314,949 147,842 113

3,601,265 2,451,625 47 3,601,265 2,451,625 47

Other comprehensive income that are or may be reclassified to

profit or loss in subsequent periods :

Available for sale financial instruments

Net change in fair value of available-for-sale financial assets (146,836) (603,779) (76) (159,712) (624,567) (74)

Transfers upon disposals - - - - -

Foreign currency translation differences for foreign operations

Exchange gain from translation of foreign operations 414,601 470,580 (12) 529,655 800,325 (34)

Transfer of translation reserve on disposed foreign associate (777,589) - 100 (777,589) - 100

Fair value differences on cash flow hedges

Net movement in cash flow hedges 221,869 300,639 (26) (106,741) 416,017 (126)

Related tax (16,996) (71,299) (76) (16,996) (71,299) (76)

Share of other comprehensive income of equity accounted

investees (net of tax) 688,828 (965,125) (171) 688,828 (965,125) (171)

383,877 (868,984) (144) 157,445 (444,649) (135)

Total other comprehensive income/ (expense) for the year, net

of tax 3,985,142 1,582,641 152 3,758,710 2,006,976 87

Total comprehensive income for the year, net of tax 17,019,121 3,778,950 350 24,679,322 11,338,363 118

Tota comprehensive income attributable to;

Equity holders of the Company 13,160,167 2,179,889 504 20,397,257 8,689,716 135

Non-controlling interests 3,858,954 1,599,061 141 4,282,065 2,648,647 62

17,019,121 3,778,950 350 24,679,322 11,338,363 118


Group



Statement of Profit or Loss


Rs.' 000 Rs.' 000 % Rs.' 000 Rs.' 000 %

Gross income 14,641,787 1,854,050 690 20,265,814 4,831,550 319

Interest income 1,217,834 567,505 115 3,832,011 1,883,911 103

Interest expense (1,538,385) (972,156) 58 (5,270,261) (3,191,053) 65

Net interest income (320,551) (404,651) 173 (1,438,250) (1,307,142) 169

Income 3,904,562 9,888 39,388 3,967,725 71,158 5,476

Other income/(expenses) 9,519,391 1,276,657 646 12,466,078 2,876,481 333

Profit before operating expenses 13,103,402 881,894 1,386 14,995,553 1,640,497 814

Operating expenses

VAT on financial services (61,872) (23,583) 162 (110,052) (56,571) 95

Other direct expenses excluding finance costs 12,980 13,920 (7) (21,047) (6,806) 209

Personnel costs (1,694,445) (72,450) 2,239 (1,896,479) (175,455) 981

Net impairment (loss) / reversal on financial assets 1,374 2,198 (37) 4,918 1,811 172

Depreciation and amortization (155,422) (132,373) 17 (436,931) (360,747) 21

Other operating expenses (2,162,418) (69,124) 3,028 (2,386,585) (207,797) 1,049

Profit before income tax expense 9,043,599 600,482 1,406 10,149,377 834,932 1,116

Income tax expense (134,086) (80,506) 67 (372,071) (146,152) 155

Profit for the period 8,909,513 519,976 1,613 9,777,306 688,780 1,320

Profit attributable to;

Equity holders of the Company 8,909,513 519,976 1,613 9,777,306 688,780 1,320

Non-controlling interests - - - - - -

8,909,513 519,976 1,613 9,777,306 688,780 1,320

Basic earnings per share (Rs.) 18.75 1.09 1,613 20.58 1.45 1,320


The above figures are not audited

Statement of Other Comprehensive Income


Rs.' 000 Rs.' 000 % Rs.' 000 Rs.' 000 %

Profit for the period 8,909,513 519,976 1,613 9,777,306 688,780 1,320


Net change in fair value of available-for-sale financial assets (109,697) (170,856) (36) (132,025) (101,931) 30

Revaluation of property, plant & equipment 1,890,592 - - 1,890,592 - -

Deferred tax on revaluation (34,258) - - (34,258) - -

Net movement of cash flow hedges - 827 (100) - (719) (100)

Defined benefit plan actuarial gains / (losses) (11,345) 18,939 (160) (11,345) 18,939 (160)

Other comprehensive income/ (expense) for the period, net

of tax 1,735,292 (151,090) (1,249) 1,712,964 (83,711) (2,146)

Total comprehensive income / (expense) for the period 10,644,805 368,886 2,786 11,490,270 605,069 1,799

Total comprehensive income / (expense) attributable to;

Equity holders of the Company 10,644,805 368,886 2,786 11,490,270 605,069 1,799

Non-controlling interests - - - - - -

Total comprehensive income / (expense) for the period 10,644,805 368,886 2,786 11,490,270 605,069 1,799



Company

Company




Statement of Changes in EquityFor the year ended 31 March 2017

Company

Stated Capital Revaluation

Reserve

Cash flow hedge

Reserve

Fair Value

Reserve on AFS

Future Taxation

Reserve

Retained

Earnings Total

Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000

Balance as at 01 April 2015 475,200 1,300,116 719 266,963 205,000 32,648,370 34,896,368

Total comprehensive income for the period

Profit for the period - - - - - 688,780 688,780


Net change in fair value of available-for-sale financial assets (net of tax) - - - (101,931) - - (101,931)

Transfer to revaluation reserve - (16,830) - - - 16,830 -

Net movement of cash flow hedge - (719) - - - (719)

Deffered tax on re-measurement of defined benefit liabilities - - - - - 18,939 18,939

Total comprehensive income for the period - (16,830) (719) (101,931) - 724,549 605,069

Balance as at 31 March 2016 475,200 1,283,286 - 165,032 205,000 33,372,919 35,501,437

Balance as at 01 April 2016 475,200 1,283,286 - 165,032 205,000 33,372,919 35,501,437


Profit for the period - - - - - 9,777,306 9,777,306


Net change in fair value of available-for-sale financial assets (net of tax) - - - (132,025) - - (132,025)

Transfer to revaluation reserve - - - - - - -

Revaluation of property, plant and equipment - 1,890,592 - - - - 1,890,592

Deferred tax on revaluation - (34,258) - - - - (34,258)

Defined benefit plan actuarial gains / (losses) - - - - - (11,345) (11,345)

Total comprehensive income for the period - 1,856,334 - (132,025) - 9,765,961 11,490,270

Balance as at 31 March 2017 475,200 3,139,620 - 33,007 205,000 43,138,880 46,991,707



Equity attributable to the shareholders of the Company



Group


Reserve

Cash flow hedge

Reserve

Fair Value

Reserve on AFS

Translation

Reserve

Future Taxation

Reserve

Statutory Reserve

Fund

Retained

Earnings Total

Non-controlling

Interests Total Equity

Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000

Balance as at 01 April 2015 475,200 2,932,414 (102,894) 244,963 327,120 205,000 1,697,783 22,454,099 28,233,685 27,853,620 56,087,305


Profit for the period - - - - - - - 8,518,690 8,518,690 812,697 9,331,387


Net change in fair value of available-for-sale financial assets - - - (594,628) - - - - (594,628) (29,939) (624,567)

Net movement of cash flow hedges - - 378,174 - - - - - 378,174 37,843 416,017

Defferdt Tax Impact on cash flow hedge - - (57,039) - - - - - (57,039) (14,260) (71,299)

Effect on translation differences for foreign operations - - - - 603,423 - - - 603,423 196,902 800,325

Revaluation of property, plant and equipment - 483,317 - - - - - - 483,317 1,477,674 1,960,991

Deferred tax on revaluation - (17,614) - - - - - - (17,614) (119,821) (137,435)

Re-measurement of defined benefit liabilities - - - - - - - 55,248 55,248 465,634 520,882

Deferred tax on re-measurement of defined benefit liabilities - - - - - - - (4,480) (4,480) (36,175) (40,655)

Share of other comprehensive income of equity accounted investees (net of - 61,548 - (755,700) (766) - - 19,543 (675,375) (141,908) (817,283)

Total other comprehensive income for the period - 527,251 321,135 (1,350,328) 602,657 - - 70,311 171,026 1,835,950 2,006,976

Total comprehensive income for the period - 527,251 321,135 (1,350,328) 602,657 - - 8,589,001 8,689,716 2,648,647 11,338,363

Transactions with owners directly recorded in the Equity

Contributions by and distributions to owners

Dividends paid during the period - - - - - - - - - (208,150) (208,150)

Dividend forfieted - - - - - - - 3,676 3,676 33 3,709

Total contribution by/(distribution to) owners of the Company - - - - - - - 3,676 3,676 (208,117) (204,441)

Transactions due to changes in group holding

NCI recognized on acquisition of subsidiaries - - - - - - - - - 354,484 354,484

NCI contribution for subsidiary share issue - - - - - - - - - 245,000 245,000

Acquisiton of non-controlling interests - 881,930 881,930 (2,278,070) (1,396,140) Changes in ownership interests that do not result in a change in control (110,168) (110,168) 64,322 (45,846)

Total transactions due to changes in group holding - - - - - - - 771,762 771,762 (1,614,264) (842,502)Total transactions with owners directly recorded in the equity - - - - - - - 775,438 775,438 (1,822,381) (1,046,943)

Other movements in equity

Depreciation transfer on revaluation - (25,480) - - - - - 25,480 - - -

Net transfers to statutory reserve fund - - - - - - 56,575 (56,575) - - -

Share issue cost of subsidiary companies - - - - - - - (459) (459) (2,041) (2,500)

Total other movements - (25,480) - - - - 56,575 (31,554) (459) (2,041) (2,500)

Balance as at 31 March 2016 475,200 3,434,185 218,241 (1,105,365) 929,777 205,000 1,754,358 31,786,984 37,698,380 28,677,845 66,376,225

Equity Attributable to the Owners of the Company



Group


Reserve

Cash flow hedge

Reserve

Fair Value

Reserve on AFS

Translation

Reserve

Future Taxation

Reserve

Statutory Reserve

Fund

Retained

Earnings Total

Non-controlling

Interests Total Equity

Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000

Equity Attributable to the Owners of the Company

Balance as at 01 April 2016 475,200 3,434,185 218,241 (1,105,365) 929,777 205,000 1,754,358 31,786,984 37,698,380 28,677,845 66,376,225


Profit for the period - - - - - - - 17,157,762 17,157,762 3,762,850 20,920,612


Net change in fair value of available-for-sale financial assets - - - (161,994) - - - - (161,994) 2,282 (159,712)

Net movement of cash flow hedges - - (83,034) - - - - - (83,034) (23,707) (106,741)

Defferdt Tax Impact on cash flow hedge - - (16,851) - - - - - (16,851) (145) (16,996)

Effect on translation differences for foreign operations - - - - 315,848 - - - 315,848 213,807 529,655

Revaluation of property, plant and equipment - 3,094,790 - - - - - - 3,094,790 222,991 3,317,781

Deferred tax on revaluation - (48,485) - - - - - - (48,485) (11,322) (59,807)

Re-measurement of defined benefit liabilities - - - - - - - (13,245) (13,245) 49,163 35,918

Deferred tax on re-measurement of defined benefit liabilities - - - - - - - (1,135) (1,135) (6,441) (7,576) Share of other comprehensive income of equity accounted investees (net of

tax) - 274,999 - 372,143 276,498 - - 7,550 931,190 72,587 1,003,777

Transfer of translation reserve on disposed foreign associate - - - - (777,589) - - (777,589) - (777,589)

Total other comprehensive income for the period - 3,321,304 (99,885) 210,149 (185,243) - - (6,830) 3,239,495 519,215 3,758,710

Total comprehensive income for the period - 3,321,304 (99,885) 210,149 (185,243) - - 17,150,932 20,397,257 4,282,065 24,679,322

Transactions with owners directly recorded in the Equity

Contributions by and distributions to owners

Dividends paid during the period - - - - - - - - - (237,209) (237,209)

Total contribution by/(distribution to) owners of the Company - - - - - - - - - (237,209) (237,209)

Transactions due to changes in group holding

NCI recognized on acquisition of subsidiaries - - - - - - - - - 17,744,244 17,744,244

Changes in ownership interests that do not result in a change in control - - - - - - - 754,061 754,061 (1,931,302) (1,177,241)

Total transactions due to changes in group holding - - - - - - - 754,061 754,061 15,812,942 16,567,003 Total transactions with owners directly recorded in the equity - - - - - - - 754,061 754,061 15,575,733 16,329,794

Other movements in equity

Depreciation transfer on revaluation - (10,592) - - - - - 10,592 - - -

Net transfers to statutory reserve fund - - - - - - 403,803 (403,803) - - -

Disposal of Subsidiary - - - - - - - - - (4,769,503) (4,769,503)

Total other movements - (10,592) - - - - 403,803 (393,211) - (4,769,503) (4,769,503)

-

Balance as at 31 March 2017 475,200 6,744,897 118,356 (895,216) 744,534 205,000 2,158,161 49,298,766 58,849,698 43,766,140 102,615,838




Statement of Cash Flows

For the year ended 31 March 2017 2016 2017 2016

Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000

CASH FLOW FROM OPERATING ACTIVITIES

Profit before income tax expense 24,379,064 11,857,914 10,149,377 834,932

Adjustment for:

(Gain) / loss on sale of property, plant and equipment (40,942) (135,156) (59,256) (116,939)

Depreciation and amortization 1,862,658 1,577,846 436,931 360,747

Insurance provision 1,122,314 1,285,583 - -

Change in fair value of forward contracts 28,699 (108,825) - -

Provision for gratuity 537,318 351,302 57,219 14,978

Net impairment (loss) / reversal on financial assets 4,279,678 2,978,061 (4,918) (1,811)

Provision for fall/(increase) in value of investments (161,706) 99,615 - 89,959

Investment Income (56,552) (1,809,205) - (287,397)

Finance costs 33,159,211 20,098,345 5,270,261 3,191,053

Interest income (3,409,180) - (309,111) -

(Profit)/loss on sale of quoted and non-quoted shares 21,448 (130,108) (12,011) 1,654

Share of profits of equity accounted investees (3,827,962) (3,094,237) - -

Foreign exchange gain / (loss) (38,925) 80,402 - -

Results on acquisition and divestment of Group investment (10,594,331) (50,963) (9,099,508) -

Gain in fair value of consumer biological assets (214,815) 194,354 - -

Change in fair value of investment properties (855,409) (135,120) (23,600) (9,000)

Amortization of deferred income (85,169) (34,610) (32,691) -

Provision for slow moving inventories 53,448 (88,519) - -

Allowance for trade and other receivables 215,963 83,181 - -

Transaction cost on acquisition of subsidiaries 303,970 - - -

Loss on disposal of subsidiaries - 4,864 - -

Fair value of previously held interest in BRAC 46,678,780 33,024,724 6,372,693 4,078,176

Working capital changes

Increase/(decrease) in trade and other payables 1,736,478 3,984,128 384,311 (1,144,775)

(Increase)/decrease in investment in leases, hire purchase and others (863,888) (11,194,861) 4,499 (7,237)

(Increase)/decrease in investment in advances and other loans (36,113,361) (64,705,539) 993,918 (462,041)

(Increase)/decrease in premium receivables (279,592) (199,066) - -

(Increase)/decrease in inventories (893,689) (1,723,090) 98,731 (452,510)

(Increase)/decrease in trade and other receivables (3,682,126) (1,612,642) (9,928,268) (11,092,217)

Increase/(decrease) in customer deposits 29,344,211 23,578,493 - -

Cash generated from operations 35,926,813 (18,847,853) (2,074,116) (9,080,604)

Finance cost paid (31,393,879) (19,835,244) (5,219,512) (3,275,596)

Income tax and Economic Service Charge paid (2,219,132) (1,612,220) (41,713) (1,525)

Defined benefit plan costs paid (428,258) (284,887) (7,534) (4,630)

Net cash from/(used in) operating activities 1,885,544 (40,580,204) (7,342,875) (12,362,355)

CASH FLOW FROM INVESTING ACTIVITIES

Investment in subsidiary companies - - (19,004,747) (189,881)

Net cash and cash equivalents on acquisition of subsidiary (7,364,823) (393,826) - -

Net cash and cash equivalents received on disposal of subsidiary 4,932,202 4,740 12,601,885 -

Investment in equity accounted investees (1,055,383) (276,539) - (166,172)

Proceeds from disposal of equity accounted investees 12,601,885 1,103,230 - -

Acquisition of Jointly controlled entities - - - -

Acquisition of non-controlling interests (996,108) - - -

Acquisition of property, plant and equipment and leasehold rights (8,541,071) (5,424,129) (879,320) (1,209,031)

Acquisition / (Disposal) of intangible assets (212,780) (176,861) 6,937 (70,000)

Net additions to trading assets (2,125,305) (1,260,613) 11,624 (2,573)

Net additions to investment securities 7,160,958 (42,693,744) 336,035 2,816

Proceeds from the sale of property, plant and equipment 896,351 465,137 215,046 343,610

Investment income received 3,409,180 1,809,205 - -

Dividend received 810,635 479,514 240,193 101,660

Net additions to biological assets (491,421) (280,964) - -

Payment of lease rentals (376,240) (408,683) - -

Net cash flow from investing activities 8,648,080 (47,053,533) (6,472,347) (1,189,571)

CASH FLOW FROM FINANCING ACTIVITIES

Net cash proceeds from short-term interest bearing borrowings (7,227,244) 21,850,963 16,944,232 8,023,432

Principal repayment under finance lease liabilities (719,091) (307,777) (80,344) (119,511)

Proceeds from long-term interest bearing loans and borrowings 37,277,060 87,200,910 1,007,081 5,415,716

Repayments of long-term interest bearing loans and borrowings (15,835,231) (22,218,903) (1,855,849) (1,823,826)

Issue/(repayment) of debentures (140,000) 5,000,000 (140,000) (1,110,000)

Dividends paid to non-controlling interests (237,209) (208,150) - -

NCI contributions to share issue of subsidiaries - 245,000 - -

Receipt of deferred income 142,924 77,976 - -

Share issue cost of subsidiaries - (2,500) - -

NCI contribution to subsidiary share issues 18,631,591 (1,396,140) - -

Net cash generated from financing activities 31,892,800 90,241,379 15,875,120 10,385,811

Net increase/(decrease) in cash and cash equivalents during the period 42,426,423 2,607,642 2,059,898 (3,166,115)

Cash and cash equivalents at the beginning of the period 4,423,484 1,815,842 (3,291,182) (125,067)

Cash and cash equivalents at the end of the period 46,849,907 4,423,484 (1,231,284) (3,291,182)

Analysis of cash and cash equivalents at the end of the period

Cash in Hand and Favorable Bank Balances 54,215,239 13,725,794 460,015 63,407

Unfavorable Bank Balances used for cash management purposes (7,365,332) (9,302,310) (1,691,299) (3,354,589)

46,849,907 4,423,484 (1,231,284) (3,291,182)



Group Company


Notes to the Interim Financial Statements

1

2

3

4

5

6

7

8 Acquisition of PRASAC Microfinance Institution Ltd

Rs. Mn

Assets

Cash and cash equivalents 33,243

Investment securities 4

Advances and other loans 172,145

Trade and other receivables 2,767

Deferred tax asset 488

Intangible assets 278

Property, plant and equipment 922

209,847

Liabilities

Deposit liabilities 107,618

Interest bearing borrowings 68,664

Current tax payable 615

Trade and other payables 4,368

Retirement benefit obligations 754

182,019

Fair value of Identifiable net assets acquired 27,828

Results of the acquisitions of above subsidiaries are as follows;

Fair value of consideration paid (net of transaction cost) 40,309

Non-controlling interests acquired (2,067)

38,242

Fair value of Identifiable net assets acquired 27,828

Resulting goodwill 10,414

There are no significant changes in the nature of the contingent liabilities disclosed in the Financial Statements for the year ended 31 March 2016.

In March 2017, LOLC Group has increased its controlling stake in PRASAC Microfinance Institution Limited ("PRASAC") from 22.25% to 70% with the further

acquisition. This transaction was facilitated through the purchase of 47.75% issued share capital of PRASAC for a value of USD 186Mn through LOLC

International Private Limited, a wholly owned subsidiary of the LOLC Group based in Singapore.

The provisional fair values of the identifiable assets and liabilities of the acquiree as at the date of acquisition were;

PRASAC was established in 1995 as a credit provider involved in financing to rehabilitate the agriculture sector in rural Cambodia. PRASAC is the largest

microfinance service provider of Cambodia.

All expenses related to management expenditure is fully provided for in the financial statements.

The Statement of Financial Position as at 31 March 2017, Income Statement, Statement of Comprehensive Income, Statement of Cash Flows and

Statement of Changes in Equity of the Company and the Group for the year ended thereof are drawn up from unaudited financial statements of the

Company, its subsidiaries, associates and joint ventures and provide information as required by the Colombo Stock Exchange and LKAS 34. Further,

provisions of the Companies Act No.7 of 2007 has been considered in preparing the said financial statements of the Company and of the Group.

Accounting policies and methods of computation as stated in the Financial Statements for 2015/16 are followed in the preparation of these Interim

Financial Statements.

Revenue includes revenue from trading, manufacturing, leisure, plantation and other activities of the Group.

Interest income and income represent the income receivable for the period on all contracts, rentals on operating leases, income on factoring of client

debtors, earned premium on insurance contracts and IT service fees. It includes all income related to operations such as interest on overdue rentals,

profit/loss on leases and loans terminated and collections on contracts written off.

Other income / (expenses) includes foreign exchange gains / (losses), realized capital gains, capital gains and losses arising from marked to market

valuation of quoted shares held for trading purposes, rent income and dividend.



8.1

Rs. Mn

Carrying amount of the previously held interest of PRASAC 6,353

Fair value of the previously held interest 12,602

Gain on associate become subsidiary 6,249

Total Results of the PRASAC Acquisition

Gain on disposal of associate 6,249

778

Total gain recognized in income statement 7,027

9 Disposal of Subsidiaries

During the current financial year group has divested following subsidiaries,

Subsidiary Controlling interest sold

Consideration

Received (net of

transaction cost)

Fair value of the

remaining stake

Fair value of the total

consideration

received

Rs. Mn Rs. Mn Rs. Mn

FLMC Plantations (Pvt) Ltd 45.10% 4,636 1,000 5,636

72.13% 541 N/A 541

Fair values of the identifiable assets and liabilities of the disposed groups at the date of disposal were;

FLMC Group Lotus Hydro Group

Rs. Mn Rs. Mn

Cash and cash equivalents 275 36

Investment securities 306 -

Trade and other receivables 491 61

Inventories 407 8

Bialogical assets 7,134

Deferred tax asset 210 -

Property, plant and equipment 1,050 864

9,873 969

Bank overdraft 65 2

Interest bearing borrowings 372 136

Trade and other payables 684 94

Deferred tax liabilities 924 -

Deferred income 473 -

Retirement benefit obligations 712 4

3,230 236

Net assets disposed 6,643 734

2,265 344

5,636 541

Gain on disposal 3,371 196

LOLC group had 22.25% stake in PRASAC which was accounted as Associate in the LOLC group financials till 31st March 2017 using equity accounting under

LKAS 27. With the acquisition of 47.75% issued share capital of the PRASAC, it has become a subsidiary of the LOLC group and accounted as subsidiary

under SLFRS 10.

Reclassify the previously recognized Foreign Currency Translation Reserve to Income Statement

Lotus Hydro Power PLC (Formerly known

as Browns Hydro Power PLC)

Net assets attributable to the group

Fair value of consideration received (net of transaction cost)



10 Deconsolidation of Agalawatte Plantations PLC

Date of the transaction Description Value

Rs. '00014th July, 2016 Cost of acquisition of APL group 306,166

28th March, 2017 Disposal proceeds form sale of APL Group 272,708

Loss on disposal (33,458)

11

12

Joint Investment agreement to develop Excel World Property

13

Rs.

Closing price 61.00

Highest Price (10th January, 2017) 79.00

Lowest Price (07th March, 2017) 59.00

Market prices of ordinary shares recorded during the quarter ended 31st March 2017 are as follows;

No circumstances have arisen since the reporting date, which would require adjustments to or disclosure in the financial statements other than disclosed

as follows.

Browns Investments PLC, sub subsidiary of the group entered into a joint investment agreement with Zhongtian Ding Hui (Pvt) Ltd on 6th April 2017

pertaining to co-develop the Excel World Property.

Zhongtian Ding Hui (Pvt) Ltd and Browns Investments PLC in terms of the agreement entered into shall invest in the share capital of Excel Global Holdings

(Pvt) Ltd, in order to co-develop the project location situated at 338, TB Jaya Mawatha, Colombo of which the lease hold rights are held by Millenium

Development (Pvt) Ltd.

Subsequent to the re-audit, the auditor of APL has issued a disclaimed audit opinion on the re-audited financial statements for the financial year ended

2014 and as at the date in which the financial statements of the Group is authorised for issue by the directors, no audited financial statements of APL for

Financial years 2015 and 2016 are available. Since it was impracticable to obtain reliable financial information after making every reasonable effort to do

so and considering the significant limitations and uncertainty described above, the management is of the view that consolidation of the results of APL may

not represent a true and fair view of the financial statements. Consequently, in order to present the substance of the transaction and its effect, the

management concluded that the investment in APL be not treated as an investment in subsidiary from the date of acquisition for the purpose of preparing

Group financial statements for the year ended 31st March 2017.

During the period, the group acquired the remaining 40% of Ceylon Roots (Pvt) Ltd for Rs. 8Mn.

Browns Investments PLC, at present holds 100% of Excel Global Holdings (Pvt) Ltd, and that shareholding is valued at USD 20 Million. Browns Investments

PLC shall further infuse USD 15 Million, and arrange Excel Global Holdings (Pvt) Ltd a USD 20 Million loan. Browns Investments PLC shall hold 51% of total

shares of Excel Global Holdings (Pvt) Ltd and Zhongtian Ding Hui (Pvt) Ltd shall invest USD 35 Million in this project and acquire a shareholding of 49% of

the total share in Excel Global Holdings (Pvt) Ltd. Both parties agreed that the total development cost for constructing the proposed life style shopping mall

cum family leisure center shall be USD 70 Million.

The details of the investment in APL, disposal and resultant loss on disposal recognized in the Group financial statements is stated below.

In July 2016, the Group acquired 60.80% stake in Agalawatte Plantations PLC (APL) with a long term view and considered it as an investment in Subsidiary

of the Group. Accordingly, Agalawatte Plantations PLC was consolidated and unaudited financial statements for the quarters ended 30th September 2016

and 31st December 2016 was presented.

By a letter dated 28th September 2016, The Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB), issued a direction to the Board of

Directors of APL to re-audit the published financial statements of the company for the year ended 31st December 2014. Consequent to the re-audit, which

was finalized in March 2017, it was revealed that the liabilities of APL were significantly higher than what was in the publicly available financial statements

at the time of acquisition. The management evaluated the significance of such risk that poses on the Group and consequently the management changed

its intention on the investment in APL and divested the Investment in March 2017



14

14.1 Interest rate of comparable government security

Buying and Selling prices of Treasury Bonds of the bond market as at 31 March 2017

Buying Selling

4 Year Bond

Price 98.05 98.14

Yield - % 10.74 10.55

5 Year Bond

Price 95.88 96.15

Yield - % 10.48 11.68

14.2 Market prices and yield during the period (ex interest)

4 Year Bond 5 Year Bond

Price 97.31 97.39

Yield - % 10.47 10.91

Current period

Yield to maturity of trade done on 20 March 2017 13.00

Debt to equity 1.17 times

Interest cover 2.93 times

Quick asset ratio 7.68 times

14.3 The market prices during the period (ex interest)

Highest price 93.60

Lowest price 90.30

Last traded price 91.20

15 Backed to backed deposits details As at 31 March 2017

Rs. '000

Back to back deposits on foreign funding 13,138,299

Interest income earned on back to back deposits 993,279

16 Group Portfolio information As at 31 March 2017

Rs. '000

Gross portfolio 427,365,086

Non-performing portfolio > 6 months 7,736,075

Allowance for non-performing portfolio 8,668,718

Information on Company's listed debentures


Operating Segments


Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000

Gross income 83,040,289 5,099,982 18,567,797 2,785,890 11,422,106 - (29,200,780) 91,715,284

Net interest cost (34,407,470) - (1,231,633) (971,794) (634,777) - 4,086,463 (33,159,211)

Cost of sales - - (11,343,469) (1,112,339) (1,734,630) - 69,154 (14,121,284)

Profit before operating expenses 48,632,819 5,099,982 5,992,695 701,757 9,052,699 - (25,045,163) 44,434,789

Operating expenses (28,856,496) (4,467,909) (3,803,924) (1,604,664) (4,229,081) - 8,484,056 (34,478,018)

Results from operating activities 19,776,323 632,073 2,188,771 (902,907) 4,823,618 - (16,561,107) 9,956,771 Share of profits of equity accounted investees - - - - - 3,827,962 - 3,827,962

Results of Acquisition/ Divestment of Group Investment - - - - - - 10,594,331 10,594,331 Profit before taxation 19,776,323 632,073 2,188,771 (902,907) 4,823,618 3,827,962 (5,966,776) 24,379,064


Gross income 49,013,466 4,271,572 15,384,503 1,319,006 5,734,203 - (8,957,702) 66,765,048

Net interest cost (20,677,797) - (792,472) (455,481) (319,433) - 3,394,791 (18,850,392)

Cost of sales - - (10,247,716) (303,285) (2,255,059) - 103,209 (12,702,851)

Profit before operating expenses 28,335,669 4,271,572 4,344,315 560,240 3,159,711 - (5,459,702) 35,211,805

Operating expenses (18,659,128) (4,347,920) (3,220,298) (1,177,761) (3,828,987) - 4,735,003 (26,499,091)

Results from operating activities 9,676,541 (76,348) 1,124,017 (617,521) (669,276) - (724,699) 8,712,714

Share of profits of equity accounted investees - - - - - 3,094,237 - 3,094,237 Results on acquisition and divestment of group investments - - - - - 50,963 50,963

Profit before taxation 9,676,541 (76,348) 1,124,017 (617,521) (669,276) 3,094,237 (673,736) 11,857,914


Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000 Rs.' 000

Net impairment (loss) / reversal on financial assets (4,081,329) (861) (197,488) - - - - (4,279,678)

Depreciation and amortization (857,531) (47,896) (269,199) (282,151) (386,855) - (19,026) (1,862,658)

Total assets (as at 31 March 2017) 623,139,736 9,030,458 31,631,751 40,999,938 19,428,821 - (83,305,865) 640,924,839

Total liabilities (as at 31 March 2017) 525,837,051 5,920,706 14,146,667 15,062,881 8,254,854 - (30,913,158) 538,309,001


Net impairment (loss) / reversal on financial assets 2,965,890 13,493 (1,322) - - - - 2,978,061

Depreciation and amortization 588,667 45,238 305,651 260,094 353,605 - 24,591 1,577,846

Total assets (as at 31 March 2016) 353,254,187 6,817,848 28,552,395 26,914,287 19,364,499 - (55,308,658) 379,594,558

Total liabilities (as at 31 March 2016) 304,171,205 4,427,509 12,951,776 7,693,670 8,206,692 - (24,232,519) 313,218,333

Others /

Eliminations

Total

Financial Services

Long term &

General Insurance

Manufacturing &

Trading

Leisure &

Entertainment

Plantation &

Hydro power

Equity Accounted

Investees

Others /

Eliminations Total

Financial Services

Long term &

General Insurance

Manufacturing &

Trading

Leisure &

Entertainment

Plantation &

Hydro power

Equity Accounted

Investees


Valuation of Financial Assets and Liabilities

Fair value -

derivatives

Fair value - held for

trading

Fair value through

other comprehensive

income - available for

sale

Amortised cost / Not

measured at fair value Total carrying amount Fair value

Fair value measurement

level

- 4,649,565 - - 4,649,565 4,649,565 Level 1 and Level 2

- - 8,449,097 45,930,224 54,379,321 54,379,321 Level 1 and Level 2

- - - 51,886,988 51,886,988 51,347,363 Level 3

- - - 366,809,380 366,809,380 366,572,054 Level 3

- 4,649,565 8,449,097 464,626,592 477,725,254 476,948,304

65,287 - - - 65,287 65,287 Level 1

- - - 211,128,007 211,128,007 212,394,775 Level 3

- - - 286,749,284 286,749,284 288,469,780 Level 3

65,287 - - 497,877,291 497,942,578 500,929,842

Fair value -

derivatives

Fair value - held for

trading

Fair value through

other comprehensive

income - available for

sale

Amortised cost / Not

measured at fair value Total carrying amount Fair value

Fair value measurement

level

- 2,397,547 - - 2,397,547 2,397,547 Level 1 and Level 2

- - 11,092,834 49,858,606 60,951,440 59,332,190 Level 1 and Level 2

- - - 51,666,748 51,666,748 51,056,981 Level 3

- - - 161,116,017 161,116,017 161,486,583 Level 3

- 2,397,547 11,092,834 262,641,371 276,131,752 274,273,301

Trading liabilities - fair value through profit or loss 17,859 - - - 17,859 17,859 Level 1

- - - 74,165,732 74,165,732 72,562,994 Level 3

- - - 205,774,163 205,774,163 204,361,672 Level 3

17,859 - - 279,939,895 279,957,754 276,942,525

For the cash and cash equivalents, short term receivables and payables, the fair value reasonably approximates its costs.

Rs'000

Rs'000

Deposits liabilities

Interest bearing borrowings

Total financial liabilities

Advances and other loans

Total financial assets

As at 31st March 2016 - Group

Trading assets - fair value through profit or loss

Investment securities

Finance lease receivables, hire purchases and operating

leases

Total financial liabilities

Total financial assets

Trading liabilities - fair value through profit or loss

Advances and other loans

Interest bearing borrowings

Deposits liabilities

Finance lease receivables, hire purchases and operating

leases

As at 31 March 2017 - Group

Trading assets - fair value through profit or loss

Investment securities

172,492,292 36.299

59,895,500 12.604

- -

23,760,000 5.000

- -

12,600 0.003

- -

- -

- -

- -

Shareholder No. of % of Issued

Shares Capital

1 Mr. R M Nanayakkara (Decd) 172,492,292 36.299

2 Orix Corporation 142,560,000 30.000

3 Mr. I C Nanayakkara 59,895,500 12.604

4 Mrs. K U Amarasinghe 23,760,000 5.000

5 Employees Provident Fund 15,182,259 3.195

6 HSBC Intl Nom Ltd - BBH - Mathews International Funds 12,121,473 2.551

7 Renaissance Capital (Private) Limited 8,671,625 1.825

8 HSBC Intl Nom Ltd - State Street Luxembourg C/O SSBT-ABN

AMRO MULTI - MANAGER FUND 6,937,775 1.460

9 Mrs. I Nanayakkara 2,827,948 0.595

10 Employees Trust Fund Board 2,740,493 0.577

11 Mr. R C De Silva 1,634,000 0.344

12 Mr. G G Ponnambalam 1,044,960 0.220

13 Dr. M Ponnambalam 1,044,960 0.220

14 Swasthika Mills LTD 1,006,800 0.212

15 Mrs. S N Fernando 818,440 0.172

16 National Savings Bank 606,900 0.128

17 CONFIFI Management Services Ltd 600,000 0.126

18 HSBC Intl Nom Ltd - BBH - Mathews Emerging Asia Fund 573,466 0.121

19 Mr. G C Goonetileke 525,000 0.110

20 Ms. A C Radhakrishnan 500,000 0.105

21 Mr. R. Maheswaran 500,000 0.105

22 Ms. M P Radhakrishnan 500,000 0.105

456,543,891 96.074

The Public Shareholding as at 31 March 2017 was 15.499 % comprising of 3,144 shareholders.

Alternate Director to H Nishio


Statement of Directors' holding and Chief Executive Officer's holding in shares of the Entity as at 31 March

2017

Mr. Takehisa Kaneda

Directors Name No of shares %

Alternate Director to H Yamaguchi

Mr. R M Nanayakkara

Deshamanya M D D Peiris

Mr. W D K Jayawardena

Group Managing Director / CEO

Mr. H Yamaguchi

Mr. H Nishio

Top 20 shareholders as at 31 March 2017

Mr. I C Nanayakkara

Deputy Chairman (Alternate to Mr. R M Nananayakkara up to -

22.03.2017)

Mrs. K U Amarasinghe

Deseased - 22.03.2017

Mr. R A Fernando

Mr. K Okuno

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