PURPOSE DRIVEN - John Keells Holdings PLC...PURPOSE DRIVEN CORPORATE INFORMATION Name of Company...

www.keells.com Six Months Ended 30th September 2012Interim Condensed Financial Statements

PURPOSEDRIVEN

CORPORATE INFORMATION

Name of CompanyJohn Keells Holdings PLC

Legal FormPublic Limited Liability CompanyIncorporated in Sri Lanka in 1979Ordinary Shares listed on the

Colombo Stock Exchange GDRs listed on the Luxembourg

Stock Exchange

Company Registration No.PQ 14

DirectorsS C Ratnayake – ChairmanA D Gunewardene – Deputy

ChairmanJ R F PeirisE F G AmerasingheI Coomaraswamy T DasS EnderbyA R Gunasekara S S Tiruchelvam

Senior Independent DirectorE F G Amerasinghe

Audit CommitteeA R Gunasekara – Chairman E F G AmerasingheI CoomaraswamyS Enderby

Human Resources and Compensation CommitteeE F G Amerasinghe – ChairmanI CoomaraswamyA R GunasekaraS S Tiruchelvam

Nominations CommitteeT Das – ChairmanS EnderbyS C RatnayakeS S Tiruchelvam

BankersBank of CeylonCitibank N.ACommercial BankDeutsche Bank A.GDFCC BankDFCC Vardhana BankHatton National BankHongkong & Shanghai Banking

CorporationICICI BankMuslim Commercial BankNations Trust BankNational Savings BankPan Asia Banking CorporationPeople’s BankSampath BankSeylan BankStandard Chartered Bank

Depository for GDRsCitibank N.A New York

Registered office of the Company130 Glennie StreetColombo 2, Sri LankaInternet: www.keells.comEmail: [email protected]

Secretaries and RegistrarsKeells Consultants (Pvt) Limited130 Glennie StreetColombo 2, Sri LankaTelephone: +94 (0) 11 230 6245Facsimile: +94 (0) 11 243 9037

Investor RelationsJohn Keells Holdings PLC130 Glennie StreetColombo 2, Sri Lanka Telephone: +94 (0) 11 230 6167 +94 (0) 11 230 6000Facsimile: +94 (0) 11 230 6160Email: [email protected]

Group Sustainability and Enterprise Risk ManagementJohn Keells Holdings PLC130 Glennie Street Colombo 2, Sri LankaTelephone: +(94) 11 230 6182Facsimile: +(94) 11 230 6249Email: [email protected]

Contact for MediaCorporate Communications DivisionJohn Keells Holdings PLC130 Glennie StreetColombo 2, Sri LankaTelephone: +94 (0) 11 230 6191Facsimile: +94 (0) 11 471 7706

AuditorsErnst & YoungChartered AccountantsP.O. Box 101Colombo, Sri Lanka

1Interim Financial Statements

Dear Stakeholder, The profit attributable to equity holders for the second quarter at Rs. 2.41 billion reflects an increase of 59 per cent over the previous year while the first half performance at Rs. 4.07 billion reflects an increase of 48 per cent over the corresponding period in the previous year.

The Group profit before tax (PBT) at Rs. 2.99 billion in the second quarter of the financial year 2012/13 was an increase of 46 per cent above the Rs. 2.06 billion recorded in the corresponding period in the previous year. The cumulative PBT for the first half of the financial year 2012/13 at Rs. 5.39 billion was an increase of 44 per cent over the PBT of Rs 3.74 billion recorded in the same period in the previous year.

The revenue at Rs. 20.68 billion and Rs. 40.70 billion in the second quarter and the first half of the financial year 2012/2013 was 17 per cent and 21 per cent above the Rs. 17.63 billion and Rs. 33.51 billion recorded in the corresponding periods in the previous year.

The Company PBT for the first half of Rs. 2.22 billion was an increase of 57 per cent over the Rs. 1.41 billion recorded in the first half of 2011/12.

The Board of Directors have drawn comfort from a special purpose audit carried out by the Group Auditors of all quoted companies and selected subsidiaries for the 6 months ended 30th September 2012, to ensure a smooth transition of SLFRS/LKAS adoption.

Despite the volatile macro-economic environment which continues to be challenging, the performance of the Group demonstrates our resilience and our ability to adapt to changing circumstances.

TransportationThe Transportation industry group PBT of Rs. 1.02 billion was an increase of 57 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 653 million], with the bunkering and logistics businesses predominantly contributing to growth. The Group concluded the joint venture in respect of its current freight forwarding businesses in India and Sri Lanka with Norbert Dentressangle S.A. of France.

LeisureThe Leisure industry group PBT of Rs. 945 million was an increase of 42 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 667 million]. The growth

Financial Information

Chairman’s message

in PBT was mainly driven by City Hotels and Maldivian Resorts. City Hotels increased market share while Maldivian Resorts witnessed higher occupancies. Sri Lankan Resorts and Destination Management were adversely impacted as a result of a disappointing summer. However, the impact of lower occupancies was somewhat offset by higher average room rates. We continue to reiterate the importance of a focused, Sri Lanka centric, destination marketing strategy to attract the relevant visitor segments in ensuring year-round occupancies and yields which justify continued investment in this industry.

Property The Property industry group recorded a loss before tax of Rs. 258 million for the second quarter, as against a loss of Rs. 11 million recorded in the corresponding period of the previous year. This is as a result of provisioning against preliminary project development costs. The progress of ‘OnThree20’ is on schedule and construction has progressed up to the 17th floor. Construction of the 140,000 square foot ‘K Zone’ mall in Kapuwatta, Ja-Ela is nearing completion.

Consumer Foods and Retail The Consumer Foods and Retail industry group PBT of Rs. 288 million was a decrease of 11 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 324 million]. Volumes of carbonated soft drinks were lower than expected amidst challenging market conditions resulting in lower consumption while ice cream volumes witnessed marginal growth. During the quarter, both these businesses continued to invest in enhancing market penetration for their respective products. The acquisition of the meat processing facility of D & W Foods Limited was concluded during the quarter under review. The Rights Issue by Keells Food Products PLC to raise Rs. 1.02 billion to fund the acquisition and the expansion of the D & W facility was successfully completed. The Retail business witnessed revenue growth during the second quarter on the back of same store revenue growth and revenue from new stores following the rolling out of the way forward strategy. The ongoing costs associated with this implementation impacted the profitability.

Financial Services The Financial Services industry group PBT of Rs. 323 million was an increase of 21 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 268 million]. Nations Trust Bank continued to be the primary contributor to the industry group and maintained its growth momentum in the second quarter. Union Assurance announced a Rights Issue

2

John Keells Holdings PLC

of 1 ordinary share for every 7 shares held to strengthen the capital position of the company in order to proactively meet future regulatory requirements. The low level of activity at the Colombo Stock Exchange continues to adversely impact the revenues of the Stock Brokering business.

Information Technology The Information Technology industry group PBT of Rs. 56 million was an increase of 17 per cent over the second quarter of the previous year [2011/12 Q2: Rs. 48 million]. This increase was largely as a result of the improved operations of the Business Process Outsourcing (BPO) operations in India compared with the corresponding period in the previous year. The BPO business continued to experience growth in revenue through the acquisition of new customers. The Group divested its stake in the Chicago based associate Quattro FPO Solutions (Pvt) Limited for a consideration of US Dollars 4.5 million.

Other, including Plantation Services Other, comprising of Plantation Services, John Keells Capital and the Corporate Centre, recorded a PBT of Rs. 620 million for the second quarter of the financial year 2012/13 [2011/12 Q2: Rs. 107 million] as a result of the capital gains from the divestment of Quattro FPO Solutions and the partial divestment of the freight forwarding businesses to Norbert Dentressangle and higher finance income. Tea Smallholder Factories and the produce brokering business which benefited from the increase in tea prices performed well.

Sustainability Initiatives During the quarter, the Group launched an enterprise-wide Sustainability performance tracking system to monitor and track its Sustainability performance. The system will provide timely information to management with regard to the sustainability performance of the businesses and will enable proactive decision making and continuous improvement. Furthermore, the Group will carry out internal Sustainability Assurances thus contributing to a higher quality of information and adherence to the established standard operating procedures.

A third-party external stakeholder engagement was commissioned during the quarter. The findings of this stakeholder engagement would enable the Group to reassess and identify the most material Sustainability indicators.

The Group also continued with its various Sustainability initiatives from last year, in the areas of environmental conservation and community development such as the solar

power initiative at Halmillawe and the rainwater harvesting project at Mangalagama. Spear-headed and developed by the people at JKH, I am pleased to note, these efforts further reaffirm that Sustainability is now a part of the DNA of the Group.

CSR Initiatives The ‘English for Teens’ Programme under the John Keells English Language Scholarship Programme targeting school children in 18 Districts is scheduled to commence in November. The Pre-Intermediate English Programme commenced, covering students representing 8 Districts. The English Day 2012, showcasing the talents of the John Keells scholars of 2011/12, was successfully held in Colombo.

The John Keells Foundation (JKF) launched a Book Donation Campaign named ‘Gift of Knowledge’, covering all Business Units across the Group to coincide with World Literacy Day which fell on 8th September. Books were handed over to the Principals of the five State schools in Colombo 2 supported by the JKF, as well as representatives of the schools in the adopted villages of Halmillawe and Mangalagama.

The John Keells Vision Project conducted a total of 5 eye camps while the HIV and AIDS Awareness Campaign successfully concluded 10 awareness sessions covering various private and government sector establishments, including the Sri Lanka Army.

Upon the successful execution of the Village Adoption Programme in Halmillawe and Mangalagama, plans are underway to select 3 more villages in the Northern and Eastern Provinces to embark on the next phase of the Village Adoption Programme.

DividendThe Board declared a first Interim dividend of Rs. 1.00 for 2012/2013, to be paid on the 23rd of November.

Susantha RatnayakeChairman

9 November 2012



Consolidated inCome statement Quarter ended 30th September Six months ended 30th september 2012 2011 Change % 2012 2011 Change %

Revenue 20,682,653 17,626,717 17 40,695,535 33,507,299 21 Cost of sales (16,163,818) (13,895,767) 16 (31,632,873) (26,561,519) 19 Gross profit 4,518,835 3,730,950 21 9,062,662 6,945,780 30 Other operating income 835,282 193,327 332 1,010,948 400,917 152 Distribution expenses (713,787) (711,174) - (1,449,095) (1,270,465) 14 Administrative expenses (2,830,583) (2,032,756) 39 (5,297,927) (3,997,491) 33 Other operating expenses (581,608) (375,817) 55 (1,193,038) (766,332) 56 Results from operating activities 1,228,139 804,530 53 2,133,550 1,312,409 63 Finance costs (250,754) (164,428) 53 (483,397) (323,942) 49 Finance income 980,724 705,330 39 1,911,624 1,376,830 39 Net finance (costs) / income 729,970 540,902 35 1,428,227 1,052,888 36 Share of results of equity-accounted investees 1,036,455 710,409 46 1,829,372 1,374,446 33 Profit before tax 2,994,564 2,055,841 46 5,391,149 3,739,743 44 Tax expense (341,222) (371,951) (8) (881,247) (705,033) 25 Profit for the period 2,653,342 1,683,890 58 4,509,902 3,034,710 49 Attributable to : Equity holders of the parent 2,411,728 1,515,010 59 4,070,446 2,753,092 48 Non-controlling interests 241,614 168,880 43 439,456 281,618 56 2,653,342 1,683,890 58 4,509,902 3,034,710 49

Earnings per share Rs. Rs. Rs. Rs. Basic 2.83 1.80 4.79 3.28 Diluted 2.81 1.78 4.75 3.24

Dividend per share - - 1.50 1.00

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

4


Consolidated statement ofComprehensive inCome Quarter ended Six months ended 30th September 30th September 2012 2011 2012 2011 Profit for the period 2,653,342 1,683,890 4,509,902 3,034,710

Other comprehensive incomeCurrency translation of foreign operations (268,823) (6,351) 11,287 (50,538)Share of other comprehensive income of equity-accounted investees (214,644) 37,996 101,462 109,279 Net (loss)/gain on available-for-sale financial assets 249,470 (1,045,779) (122,088) (269,984)Write off / transfer (14,082) (5,459) (14,082) (7,336)

Income tax on other comprehensive income - - - (307)

Other comprehensive income for the period, net of tax (248,079) (1,019,593) (23,421) (218,886)

Total comprehensive income for the period, net of tax 2,405,263 664,297 4,486,481 2,815,824

Attributable to :Equity holders of the parent 2,219,718 494,583 4,047,418 2,554,622 Non-controlling interests 185,545 169,714 439,063 261,202 2,405,263 664,297 4,486,481 2,815,824

Note : As required by SLFRS/LKAS, the Other Comprehensive Income includes movements in currency translation of foreign operations, gains/losses on fair valuation of available for sale financial assets, share of other comprehensive income of equity accounted investees etc. Transactions of similar nature were routed directly through the Equity Statement under SLAS.

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



Consolidated statement offinanCial positionAs at 30th September 2012 2011 As at 31.03.2012 As at 01.04.2011

ASSETS Non-current assets Property, plant and equipment 35,613,189 30,192,909 34,290,012 28,627,982 Lease rentals paid in advance 10,023,850 9,236,715 10,278,349 9,512,117 Investment property 7,835,722 5,908,526 7,631,494 5,386,166 Intangible assets 2,515,254 2,724,922 2,633,073 2,631,950 Investments in associates 16,847,813 15,240,404 15,621,800 14,692,435 Other non-current financial assets 14,025,459 14,497,986 13,689,819 13,276,625 Deferred tax assets 182,476 205,098 129,478 202,850 Other non-current assets 2,696,338 1,673,313 2,405,197 2,265,984 89,740,101 79,679,873 86,679,222 76,596,109 Current assets Inventories 4,007,150 4,241,291 4,372,348 3,152,870 Trade and other receivables 11,355,536 9,091,081 9,915,048 8,710,917 Amounts due from related parties 81,658 11,531 10,715 18,520 Other current assets 3,892,559 3,205,534 4,024,750 3,323,734 Other investments 26,195,327 15,494,936 24,765,556 16,879,567 Cash in hand and at bank 3,531,739 2,503,415 4,267,175 2,112,626 49,063,969 34,547,788 47,355,592 34,198,234 Total assets 138,804,070 114,227,661 134,034,814 110,794,343 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital 25,880,021 24,715,906 25,110,528 24,611,507 Capital reserves - 428,365 428,365 428,365 Revenue reserves 36,207,736 27,557,630 32,950,723 25,296,044 Other components of equity 12,779,023 9,461,054 12,797,149 9,770,533 74,866,780 62,162,955 71,286,765 60,106,449Non-controlling interests 8,691,961 7,693,435 8,876,914 7,641,956 Total equity 83,558,741 69,856,390 80,163,679 67,748,405 Non-current liabilities Insurance provisions 16,448,301 13,810,934 14,710,527 12,662,500 Borrowings 10,550,078 8,178,705 12,220,907 8,275,452 Deferred tax liabilities 741,240 624,492 707,970 647,960 Employee benefit liabilities 1,437,901 1,307,261 1,372,161 1,215,597 Other deferred liabilities 31,457 6,742 3,631 3,460 Other non-current liabilities 1,002,424 1,247,462 773,884 746,938 30,211,401 25,175,596 29,789,080 23,551,907

Current liabilities Trade and other payables 15,284,151 11,400,750 14,530,653 11,177,305 Amounts due to related parties 4,962 2,096 1,650 2,237 Income tax payable 842,170 632,960 828,303 791,606 Short term borrowings 927,590 110,000 1,009,057 232,000 Borrowings 3,379,810 2,103,038 2,408,740 2,134,418 Other current financial liabilities - - 74,593 - Other current liabilities 874,170 758,642 881,705 1,252,349 Bank overdrafts 3,721,075 4,188,189 4,347,354 3,904,116 25,033,928 19,195,675 24,082,055 19,494,031 Total equity and liabilities 138,804,070 114,227,661 134,034,814 110,794,343

Rs. Rs. Rs. Rs.Net assets per share 87.97 73.04 83.76 70.62 Note : All values are in Rupees ‘000s, unless otherwise stated. The above figures are not audited. I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007.

M J S RajakariarGroup Financial Controller The Board of Directors is responsible for the preparation and presentation of these financial statements. S C Ratnayake J R F PeirisChairman Group Finance Director

9 November 2012

6


For the six months ended 30th September Note 2012 2011

CASH FLOWS FROM OPERATING ACTIVITIESProfit before working capital changes A 3,963,706 2,945,721 (Increase) / Decrease in inventories 1,175,650 631,892 (Increase) / Decrease in trade and other receivables (2,035,255) (41,217)(Increase) / Decrease in other current assets 137,318 125,014 (Increase) / Decrease in other non-current assets (1,045,235) (1,234,503)Increase / (Decrease) in trade and other payables 1,111,761 458,098 Increase / (Decrease) in other current liabilities (15,347) (479,382)Increase / (Decrease) in other current financial liabilities (74,593) - Increase / (Decrease) in insurance provisions 1,737,774 1,148,434 Cash generated from operations 4,955,779 3,554,057 Finance income received 1,907,233 1,313,934 Finance costs paid (444,956) (323,978)Dividend received 271,589 268,516 Tax paid (687,612) (717,852)Gratuity paid (73,611) (38,122)Net cash flow from operating activities 5,928,422 4,056,555 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Purchase and construction of property, plant and equipment (2,440,282) (2,350,121)Purchase of intangible assets (8,589) (6,041)Addition to lease rights - (1,089)Addition to investment property (204,228) (522,360)Acquisition of subsidiary, net of cash acquired - 126,719 Acquisition of associates (168,955) (27,560)Increase in interest in associates (58,130) (76,755)Proceeds from sale of property, plant and equipment and intangible assets 41,149 64,833 Proceeds from sale of interest in associates 585,675 - proceeds from sales of non-current investments B 137,808 - Proceeds from sale of financial instruments - fair valued through profit or loss 115,552 179,259 Purchase of financial instruments - fair valued through profit or loss (410,782) (592,483)(Purchase) / disposal of other financial assets (net) 1,474,788 (1,137,534)(Purchase) / disposal of other investments (net) (515,536) (1,358,788) Net cash flow from / (used in) investing activities (1,451,530) (5,701,920) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 769,493 104,399 Proceeds from non-controlling interests on issue of rights in subsidiaries 49,903 63,405 Direct cost on issue of shares (6,547) (12,405)Acquisition of non-controlling interest (516) - Dividend paid to equity holders of parent (1,275,977) (629,833)Dividend paid to non-controlling interests (627,775) (244,330)Proceeds from/(repayment of) long term borrowings (808,850) (108,073)Proceeds from/(repayment of) other financial liabilities (net) (81,467) (122,000)Net cash flow from / (used in) financing activities (1,981,736) (948,837) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 2,495,156 (2,594,202) CASH AND CASH EQUIVALENTS AT THE BEGINNING 19,810,729 12,016,844 CASH AND CASH EQUIVALENTS AT THE END 22,305,885 9,422,642 ANALYSIS OF CASH AND CASH EQUIVALENTS Favourable balances Other investments 22,495,221 11,107,416 Cash in hand and at bank 3,531,739 2,503,415 Unfavourable balances Bank overdrafts (3,721,075) (4,188,189)Cash and cash equivalents 22,305,885 9,422,642 Note : All values are in Rupees ‘000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited.

ConsolidatedCash flow statement



For the six months ended 30th September 2012 2011

A. Profit before working capital changes Profit before tax 5,391,149 3,739,743 Adjustments for: Finance income (1,911,624) (1,376,866) Finance costs 483,397 323,978 Share of results of equity-accounted investees (1,829,372) (1,374,446) Profit on sale of non-current investments (172,980) - Profit on sale of investments in associates (129,939) - Depreciation of property, plant and equipment 1,064,217 880,030 Provision for impairment losses 450,000 15,260 Profit on sale of property, plant and equipment and intangible assets (7,987) (7,514) Amortisation of lease rentals paid in advance 344,341 256,551 Amortisation of intangible assets 129,586 124,017 Amortisation of other deferred liabilities (257) (257) Gratuity provision and related costs 146,773 125,366 Loss on disposal of financial instruments 89,377 22,281 (Increase) / decrease in fair value of financial instruments (94,393) 212,188 Unrealised (gain) / loss on foreign exchange (net) 11,418 5,390 3,963,706 2,945,721

B Disposal of non current investments The fair value of net assets disposed of John Keells Logistics India (Pvt) Ltd. and John Keells Logistics Lanka (Pvt)

Ltd. were as follows.

ASSETS Cash in hand and at bank 19,369 Other investments 2,079 Trade and other receivables 178,417 Goodwill 9,285 Deferred tax assets 6,874 Other non-current financial assets 5,841 Property, plant and equipment 18,404

LIABILITIES Bank overdrafts (71,401) Employee benefit liabilities (7,423) Trade and other payables (98,081) Total identifiable net assets 63,364 Transferred to investment in associates (23,700) Profit on disposal of non current investments 172,980 Fair value of contingent consideration received (124,789) Cash consideration received on disposal of non current investments 87,855 Cash and cash equivalents disposed 49,953 Net cash inflow on disposal of non current investments 137,808

Note : All values are in Rupees ‘000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit.

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Consolidated statement ofChanges in eQUitY

John Keells Holdings PLC John Keells Holdings PLC


CompanYinCome statement Quarter ended 30th September Six months ended 30th september 2012 2011 Change % 2012 2011 Change %

Revenue 173,524 148,014 17 314,638 287,863 9

Cost of sales (96,494) (77,767) 24 (181,872) (143,331) 27

Gross profit 77,030 70,247 10 132,766 144,532 (8)

Dividend income 99,215 379,560 (74) 2,468,660 1,351,030 83

Other operating income 73,286 58,292 26 87,795 134,523 (35)

Administrative expenses (534,931) (201,736) 165 (827,107) (407,963) 103

Other operating expenses (8,081) (7,502) 8 (17,172) (16,278) 5

Results from operating activities (293,481) 298,861 (198) 1,844,942 1,205,844 53

Finance costs (9,449) (51,143) (82) (161,385) (103,761) 56

Finance income 279,142 147,189 90 535,683 310,383 73

Net finance (costs) / income 269,693 96,046 181 374,298 206,622 81

Profit before tax (23,788) 394,907 (106) 2,219,240 1,412,466 57

Tax expense - (4,655) (100) (4,752) (22,826) (79)

Profit for the period (23,788) 390,252 (106) 2,214,488 1,389,640 59

Rs. Rs. Rs. Rs.

Dividend per share - - 1.50 1.00



10


Quarter ended Six months ended 30th September 30th september 2012 2011 2012 2011

Profit for the period (23,788) 390,252 2,214,488 1,389,640

Other comprehensive incomeNet (loss)/gain on available-for-sale financial assets 266,672 (915,731) (48,009) 154,628

Income tax on other comprehensive income - - - -

Other comprehensive income for the period, net of tax 266,672 (915,731) (48,009) 154,628

Total comprehensive income for the period, net of tax 242,884 (525,479) 2,166,479 1,544,268


CompanY statement ofComprehensive inCome



CompanY statement offinanCial positionAs at 30th September 2012 2011 As at 31.03.2012 As at 01.04.2011

ASSETS Non-current assets Property, plant and equipment 74,681 80,421 89,559 73,543 Intangible assets 48,538 36,906 48,141 43,724 Investments in subsidiaries and joint ventures 25,389,527 24,603,141 24,682,271 23,500,112 Investments in associates 9,712,616 9,285,130 9,485,530 9,257,569 Other non-current financial assets 1,935,912 1,777,993 2,025,471 658,555 Deferred tax assets - 40,198 - 54,198 37,161,274 35,823,789 36,330,972 33,587,701

Current assets Inventories - - - 760 Trade and other receivables 368,441 124,160 458,598 138,405 Amounts due from related parties 634,614 604,716 978,748 696,782 Other current assets 372,655 346,774 342,926 373,475Other investments 10,926,562 8,388,339 10,102,198 10,071,249 Cash in hand and at bank 41,701 10,519 454,495 19,382 12,343,973 9,474,508 12,336,965 11,300,053 Total assets 49,505,247 45,298,297 48,667,937 44,887,754 EQUITY AND LIABILITIES Stated capital 25,880,021 24,715,906 25,110,528 24,611,507 Revenue reserves 16,780,480 14,283,776 15,841,969 13,523,969 Other components of equity 181,586 (9,162) 229,595 (163,790)Total equity 42,842,087 38,990,520 41,182,092 37,971,686 Non-current liabilities Borrowings 4,467,058 4,886,429 5,060,493 5,442,865 Employee benefit liabilities 128,421 113,941 126,864 104,752 4,595,479 5,000,370 5,187,357 5,547,617

Current liabilities Trade and other payables 271,583 181,206 331,525 220,667 Amounts due to related parties 6,961 7,766 6,926 9,274 Borrowings 1,292,500 1,101,500 1,281,000 1,104,000 Bank overdrafts 496,637 16,935 679,037 34,510 2,067,681 1,307,407 2,298,488 1,368,451 Total equity and liabilities 49,505,247 45,298,297 48,667,937 44,887,754 Rs. Rs. Rs. Rs.Net assets per share 50.34 45.81 48.39 44.62 Note : All values are in Rupees ‘000s, unless otherwise stated. The above figures are not audited.

I certify that the financial statements comply with the requirements of the Companies Act No.7 of 2007. M J S RajakariarGroup Financial Controller

The Board of Directors is responsible for the preparation and presentation of these financial statements. S C Ratnayake J R F PeirisChairman Group Finance Director

9 November 2012

12


CompanYCash flow statementFor the six months ended 30th September 2012 2011

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 2,219,240 1,412,466 Adjustments for: Finance income (535,683) (310,383) Dividend income (2,468,660) (1,351,030) Finance costs 161,385 103,761 Depreciation of property, plant and equipment 12,909 16,934 Profit on sale of property, plant and equipment (2,697) (3,375) Amortisation of intangible assets 7,915 6,819 Provision for impairment losses 450,000 - Profit on sale of other investment (11,624) - Gratuity provision and related costs 11,284 9,924 Unrealised (gain) / loss on foreign exchange(net) 30,857 (17,821) Profit before working capital changes (125,074) (132,705) (Increase) / Decrease in inventories - 760 (Increase) / Decrease in trade and other receivables 32,284 68,229 (Increase) / Decrease in other non-current assets 43,033 37,625 Increase / (Decrease) in creditors and accruals (53,178) (41,438)Cash generated from operations (102,935) (67,529) Finance income received 534,201 297,864 Finance expenses paid (122,945) (103,761)Dividend received 2,468,660 1,435,739 Tax paid (28,071) (11,116)Gratuity paid (9,727) (734)

Net cash flow from operating activities 2,739,183 1,550,463 CASH FLOWS FROM/ (USED IN) INVESTING ACTIVITIESPurchase and construction of property, plant and equipment (2,033) (28,076)Addition to intangible assets (8,312) - Increase in interest in subsidiaries (790,381) (1,103,028)Acquisition of associates - (27,560)Increase in interest in associates (227,085) - Proceeds from sale of Property, plant and equipment 6,696 7,637 Proceeds from sales of non-current investments 46,563 - (Purchase) / disposal of other investments (net) (1,099,804) (1,243,416)Net cash flow from/(used in) investing activities (2,074,356) (2,394,443) CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES Proceeds from issue of shares 769,493 104,399 Dividend paid (1,275,977) (629,833)Repayment of long term borrowings (664,176) (547,500)

Net cash flow from / (used in) financing activities (1,170,660) (1,072,934) NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (505,833) (1,916,914) CASH AND CASH EQUIVALENTS AT THE BEGINNING 8,919,099 9,393,111 CASH AND CASH EQUIVALENTS AT THE END 8,413,266 7,476,197 ANALYSIS OF CASH AND CASH EQUIVALENTS Favourable balances Other investments 8,868,202 7,482,613 Cash in hand and at bank 41,701 10,519 Unfavourable balances Bank overdrafts (496,637) (16,935) 8,413,266 7,476,197 Note : All values are in Rupees ‘000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit.



CompanY statement ofChanges in eQUitY Stated Available for Revenue Total capital sale reserve reserves Equity

As at 1 April 2012 25,110,528 229,595 15,841,969 41,182,092

Profit for the period - - 2,214,488 2,214,488

Other comprehensive income - (48,009) - (48,009)

Total comprehensive income 25,110,528 181,586 18,056,457 43,348,571

Exercise of share option 769,493 - - 769,493

Final dividend paid - 2011/12 - - (1,275,977) (1,275,977)

As at 30th September 2012 25,880,021 181,586 16,780,480 42,842,087

As at 1 April 2011 24,611,507 (163,790) 13,523,969 37,971,686

Profit for the period - - 1,389,640 1,389,640

Other comprehensive income - 154,628 - 154,628

Total comprehensive income 24,611,507 (9,162) 14,913,609 39,515,954

Exercise of share option 104,399 - - 104,399

Final dividend paid - 2010/11 - - (629,833) (629,833)

As at 30th September 2011 24,715,906 (9,162) 14,283,776 38,990,520


14


operatingsegment informationOPERATING SEGMENTS The following tables present revenue and profit information regarding the Group’s operating segments. Transportation Leisure Property Consumer Foods & Retail Financial Services Information Technology Others Group TotalFor the Quarter ended 30th September 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

External Revenue 5,326,710 4,143,071 4,650,872 3,673,030 439,710 256,320 5,985,284 5,341,388 2,137,951 1,935,161 1,427,177 1,674,946 714,949 602,801 20,682,653 17,626,717

Inter segment revenue 91,290 97,221 13,238 12,250 68,741 43,426 10,745 17,002 24,977 43,756 72,845 75,686 140,315 142,736 422,151 432,077

Segment Revenue 5,418,000 4,240,292 4,664,110 3,685,280 508,451 299,746 5,996,029 5,358,390 2,162,928 1,978,917 1,500,022 1,750,632 855,264 745,537 21,104,804 18,058,794

Eliminations (422,151) (432,077)

Revenue 20,682,652 17,626,717

Segment Profit / (loss) before tax 230,096 115,199 966,637 713,066 (276,702) (800) 309,441 342,778 49,459 69,906 67,020 50,776 112,814 4,440 1,458,765 1,295,365

Finance costs (12,497) (1,707) (88,080) (68,632) (2,094) (15,951) (32,561) (27,570) (3) (22) (19,266) (5,088) (96,253) (45,458) (250,754) (164,428)

Finance income 51,905 20,661 62,389 31,525 22,949 9,187 13,625 3,097 13,007 8,899 3,013 1,050 266,684 169,424 433,572 243,843

Share of results of equity - accounted investees 753,287 518,657 - - - - - - 260,360 188,789 5,070 1,021 17,738 1,942 1,036,455 710,409

Eliminations / adjustments (588) - 3,832 (8,799) (2,430) (3,257) (3,000) 6,000 - - - - 318,712 (23,292) 316,526 (29,348)

Profit / (loss) before tax 1,022,203 652,810 944,778 667,160 (258,277) (10,821) 287,505 324,305 322,823 267,572 55,837 47,759 619,695 107,056 2,994,564 2,055,841

Tax expense (62,252) (39,487) (21,302) (45,570) (10,611) (6,948) (107,108) (111,438) (104,181) (88,404) (11,800) (24,523) (23,968) (55,581) (341,222) (371,951)

Profit / (loss) for the period 959,951 613,323 923,476 621,590 (268,888) (17,769) 180,397 212,867 218,642 179,168 44,037 23,236 595,727 51,475 2,653,342 1,683,890

Purchase and construction of PPE 1 813 24,782 1,018,631 980,798 (98,302) 8,038 366,416 194,667 31,122 75,632 37,185 21,569 26,917 43,413 1,382,782 1,348,899

Addition to IA 2 - - - - - - 832 348 - - 4,519 5,468 - - 5,351 5,816

Depreciation of PPE 1 16,657 21,335 312,024 211,376 (54,188) 2,541 166,213 134,388 36,582 33,384 34,360 20,061 29,477 30,351 541,125 453,436

Amortisation / impairment of IA 2 1,205 2,950 - 6 - - 3,077 2,703 46,854 46,854 5,801 5,059 10,358 3,409 67,293 60,981

Amortisation of LRPA 3 - - 173,194 127,588 - - - - - - - - 321 345 173,515 127,933

Gratuity provision and related costs 5,771 4,692 20,706 16,307 2,170 782 16,985 17,937 6,550 6,417 5,230 5,006 23,593 11,056 81,005 62,197

Note : All values are in Rupees ‘000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 1 Property, plant and equipment, 2 Intangible assets, 3 Lease rentals paid in advance



OPERATING SEGMENTS The following tables present revenue and profit information regarding the Group’s operating segments. Transportation Leisure Property Consumer Foods & Retail Financial Services Information Technology Others Group TotalFor the Quarter ended 30th September 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

External Revenue 5,326,710 4,143,071 4,650,872 3,673,030 439,710 256,320 5,985,284 5,341,388 2,137,951 1,935,161 1,427,177 1,674,946 714,949 602,801 20,682,653 17,626,717

Inter segment revenue 91,290 97,221 13,238 12,250 68,741 43,426 10,745 17,002 24,977 43,756 72,845 75,686 140,315 142,736 422,151 432,077

Segment Revenue 5,418,000 4,240,292 4,664,110 3,685,280 508,451 299,746 5,996,029 5,358,390 2,162,928 1,978,917 1,500,022 1,750,632 855,264 745,537 21,104,804 18,058,794

Eliminations (422,151) (432,077)

Revenue 20,682,652 17,626,717

Segment Profit / (loss) before tax 230,096 115,199 966,637 713,066 (276,702) (800) 309,441 342,778 49,459 69,906 67,020 50,776 112,814 4,440 1,458,765 1,295,365

Finance costs (12,497) (1,707) (88,080) (68,632) (2,094) (15,951) (32,561) (27,570) (3) (22) (19,266) (5,088) (96,253) (45,458) (250,754) (164,428)

Finance income 51,905 20,661 62,389 31,525 22,949 9,187 13,625 3,097 13,007 8,899 3,013 1,050 266,684 169,424 433,572 243,843

Share of results of equity - accounted investees 753,287 518,657 - - - - - - 260,360 188,789 5,070 1,021 17,738 1,942 1,036,455 710,409

Eliminations / adjustments (588) - 3,832 (8,799) (2,430) (3,257) (3,000) 6,000 - - - - 318,712 (23,292) 316,526 (29,348)

Profit / (loss) before tax 1,022,203 652,810 944,778 667,160 (258,277) (10,821) 287,505 324,305 322,823 267,572 55,837 47,759 619,695 107,056 2,994,564 2,055,841

Tax expense (62,252) (39,487) (21,302) (45,570) (10,611) (6,948) (107,108) (111,438) (104,181) (88,404) (11,800) (24,523) (23,968) (55,581) (341,222) (371,951)

Profit / (loss) for the period 959,951 613,323 923,476 621,590 (268,888) (17,769) 180,397 212,867 218,642 179,168 44,037 23,236 595,727 51,475 2,653,342 1,683,890

Purchase and construction of PPE 1 813 24,782 1,018,631 980,798 (98,302) 8,038 366,416 194,667 31,122 75,632 37,185 21,569 26,917 43,413 1,382,782 1,348,899

Addition to IA 2 - - - - - - 832 348 - - 4,519 5,468 - - 5,351 5,816

Depreciation of PPE 1 16,657 21,335 312,024 211,376 (54,188) 2,541 166,213 134,388 36,582 33,384 34,360 20,061 29,477 30,351 541,125 453,436


Amortisation of LRPA 3 - - 173,194 127,588 - - - - - - - - 321 345 173,515 127,933

Gratuity provision and related costs 5,771 4,692 20,706 16,307 2,170 782 16,985 17,937 6,550 6,417 5,230 5,006 23,593 11,056 81,005 62,197

Note : All values are in Rupees ‘000s, unless otherwise stated. Figures in brackets indicate deductions. The above figures are not audited. 1 Property, plant and equipment, 2 Intangible assets, 3 Lease rentals paid in advance

16


operatingsegment informationOPERATING SEGMENTS The following tables present revenue, profit information and segment assets regarding the Group’s operating segments. Transportation Leisure Property Consumer Foods & Retail Financial Services Information Technology Others Group Total For the Six months ended 30th September 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 External Revenue 10,634,160 8,119,699 8,563,783 6,701,085 1,051,251 604,642 11,972,127 10,589,379 4,135,343 3,663,536 2,859,123 2,598,915 1,479,748 1,230,043 40,695,535 33,507,299 Inter segment revenue 183,484 190,505 24,887 22,757 137,269 103,723 25,742 31,673 49,426 128,167 145,581 137,474 285,028 267,491 851,417 881,790 Segment Revenue 10,817,644 8,310,204 8,588,670 6,723,842 1,188,520 708,365 11,997,869 10,621,052 4,184,769 3,791,703 3,004,704 2,736,389 1,764,776 1,497,534 41,546,952 34,389,089 Eliminations (851,417) (881,790)Revenue 40,695,535 33,507,299

Segment Profit / (loss) before tax 568,061 260,613 1,650,168 1,129,663 (245,893) 87,969 717,605 584,933 78,533 150,912 96,601 72,383 1,140 (16,296) 2,866,215 2,270,177 Finance costs (36,403) (3,670) (191,650) (128,234) (4,768) (27,096) (53,006) (64,341) (6) (88) (34,758) (8,006) (162,806) (92,507) (483,397) (323,942)Finance income 104,322 39,999 130,490 48,474 61,927 18,806 21,440 5,034 25,826 17,771 4,550 2,038 535,684 333,349 884,239 465,471 Share of results of equity - accounted investees 1,344,236 1,073,937 - - - - - - 475,698 344,175 (4,909) (39,117) 14,347 (4,549) 1,829,372 1,374,446 Eliminations / adjustments (1,176) - 3,832 (8,799) (4,857) (5,603) (6,000) 3,000 - - - - 302,921 (35,007) 294,720 (46,409) Profit / (loss) before tax 1,979,040 1,370,879 1,592,840 1,041,104 (193,591) 74,076 680,039 528,626 580,051 512,770 61,484 27,298 691,286 184,990 5,391,149 3,739,743 Tax expense (133,441) (77,628) (66,308) (70,213) (33,228) (18,204) (235,280) (181,136) (189,208) (168,838) (17,185) (39,746) (206,597) (149,268) (881,247) (705,033) Profit / (loss) for the period 1,845,599 1,293,251 1,526,532 970,891 (226,819) 55,872 444,759 347,490 390,843 343,932 44,299 (12,448) 484,689 35,722 4,509,902 3,034,710 Segment assets 7,901,875 4,209,380 50,010,878 44,827,074 10,925,343 9,446,458 13,914,679 10,217,160 25,257,283 21,466,797 4,020,518 2,771,383 19,709,758 15,036,104 131,740,334 107,974,356Investments in associates 16,847,813 15,240,404 Deferred tax assets 182,476 205,098 Goodwill 758,115 767,400Tax refunds 2,030,488 2,209,501 Eliminations / adjustments (12,755,156) (12,169,098)Total Assets 138,804,070 114,227,661

Purchase and construction of PPE 1 7,406 27,748 1,621,930 1,755,954 3,665 8,643 622,921 371,641 86,898 100,598 51,960 31,259 45,502 54,278 2,440,282 2,350,121

Addition to IA 2 - 46 - 74 - - 1,455 348 - - 7,134 5,573 - - 8,589 6,041

Depreciation of PPE 1 40,061 43,339 507,789 413,203 5,081 4,709 312,604 264,349 72,601 66,826 66,995 26,952 59,086 60,652 1,064,217 880,030


Amortisation of LRPA 3 - - 343,835 255,861 - - - - - - - - 506 690 344,341 256,551 Gratuity provision and related costs 10,981 10,658 37,607 34,174 2,470 1,561 39,532 36,650 14,356 12,606 8,460 8,906 33,367 20,811 146,773 125,366


1 Property, plant and equipment, 2 Intangible assets, 3 Lease rentals paid in advance



OPERATING SEGMENTS The following tables present revenue, profit information and segment assets regarding the Group’s operating segments. Transportation Leisure Property Consumer Foods & Retail Financial Services Information Technology Others Group Total For the Six months ended 30th September 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 External Revenue 10,634,160 8,119,699 8,563,783 6,701,085 1,051,251 604,642 11,972,127 10,589,379 4,135,343 3,663,536 2,859,123 2,598,915 1,479,748 1,230,043 40,695,535 33,507,299 Inter segment revenue 183,484 190,505 24,887 22,757 137,269 103,723 25,742 31,673 49,426 128,167 145,581 137,474 285,028 267,491 851,417 881,790 Segment Revenue 10,817,644 8,310,204 8,588,670 6,723,842 1,188,520 708,365 11,997,869 10,621,052 4,184,769 3,791,703 3,004,704 2,736,389 1,764,776 1,497,534 41,546,952 34,389,089 Eliminations (851,417) (881,790)Revenue 40,695,535 33,507,299

Segment Profit / (loss) before tax 568,061 260,613 1,650,168 1,129,663 (245,893) 87,969 717,605 584,933 78,533 150,912 96,601 72,383 1,140 (16,296) 2,866,215 2,270,177 Finance costs (36,403) (3,670) (191,650) (128,234) (4,768) (27,096) (53,006) (64,341) (6) (88) (34,758) (8,006) (162,806) (92,507) (483,397) (323,942)Finance income 104,322 39,999 130,490 48,474 61,927 18,806 21,440 5,034 25,826 17,771 4,550 2,038 535,684 333,349 884,239 465,471 Share of results of equity - accounted investees 1,344,236 1,073,937 - - - - - - 475,698 344,175 (4,909) (39,117) 14,347 (4,549) 1,829,372 1,374,446 Eliminations / adjustments (1,176) - 3,832 (8,799) (4,857) (5,603) (6,000) 3,000 - - - - 302,921 (35,007) 294,720 (46,409) Profit / (loss) before tax 1,979,040 1,370,879 1,592,840 1,041,104 (193,591) 74,076 680,039 528,626 580,051 512,770 61,484 27,298 691,286 184,990 5,391,149 3,739,743 Tax expense (133,441) (77,628) (66,308) (70,213) (33,228) (18,204) (235,280) (181,136) (189,208) (168,838) (17,185) (39,746) (206,597) (149,268) (881,247) (705,033) Profit / (loss) for the period 1,845,599 1,293,251 1,526,532 970,891 (226,819) 55,872 444,759 347,490 390,843 343,932 44,299 (12,448) 484,689 35,722 4,509,902 3,034,710 Segment assets 7,901,875 4,209,380 50,010,878 44,827,074 10,925,343 9,446,458 13,914,679 10,217,160 25,257,283 21,466,797 4,020,518 2,771,383 19,709,758 15,036,104 131,740,334 107,974,356Investments in associates 16,847,813 15,240,404 Deferred tax assets 182,476 205,098 Goodwill 758,115 767,400Tax refunds 2,030,488 2,209,501 Eliminations / adjustments (12,755,156) (12,169,098)Total Assets 138,804,070 114,227,661

Purchase and construction of PPE 1 7,406 27,748 1,621,930 1,755,954 3,665 8,643 622,921 371,641 86,898 100,598 51,960 31,259 45,502 54,278 2,440,282 2,350,121

Addition to IA 2 - 46 - 74 - - 1,455 348 - - 7,134 5,573 - - 8,589 6,041

Depreciation of PPE 1 40,061 43,339 507,789 413,203 5,081 4,709 312,604 264,349 72,601 66,826 66,995 26,952 59,086 60,652 1,064,217 880,030


Amortisation of LRPA 3 - - 343,835 255,861 - - - - - - - - 506 690 344,341 256,551 Gratuity provision and related costs 10,981 10,658 37,607 34,174 2,470 1,561 39,532 36,650 14,356 12,606 8,460 8,906 33,367 20,811 146,773 125,366


1 Property, plant and equipment, 2 Intangible assets, 3 Lease rentals paid in advance

18


notes to the interim Condensed finanCial statements1 CORPORATE INFORMATION John Keells Holdings PLC, is a public limited company incorporated and domiciled in Sri Lanka and listed on the

Colombo Stock Exchange. Ordinary shares of the company are listed on the Colombo Stock Exchange and Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange.

2 INTERIM CONDENSED FINANCIAL STATEMENTS The financial statements for the period ended 30 September 2012, includes “the Company” referring to John Keells

Holdings PLC, as the holding company and “the Group” referring to the companies whose accounts have been consolidated therein.

3 APPROVAL OF FINANCIAL STATEMENTS The interim condensed financial statements of the Group and the Company for the 6 months ended 30 September

2012 were authorised for issue by the Board of Directors on 9 November 2012.

4 BASIS OF PREPARATION The interim condensed financial statements have been prepared in compliance with Sri Lanka Accounting Standard

(SLAS) LKAS 34 - Interim Financial Reporting. These interim condensed financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2012, and changes to the accounting policies as given in Note 6 to these financial statements.

For all periods up to and including the year ended 31 March 2012, the Group prepared its financial statements in accordance with SLAS which were effective up to 31 March 2012. The financial statements for the quarter ended 30 June 2012 were the first financial statements prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS) immediately effective from 1 April 2012. These SLFRS/LKASs have materially converged with the International Financial Reporting Standards (IFRS) as issued by, the International Accounting Standards Board (IASB).

The effect of the transition to SLFRS/LKAS on previously reported financial positions, financial performances and cash flows of the Group and the Company is given in Notes to the financial statements.

The interim condensed financial statements have been prepared on a historical cost basis, except for investment

properties, land and buildings and financial instruments.

The interim condensed financial statements are presented in Sri Lankan Rupees and all values are rounded to the nearest thousand except when otherwise indicated.

5 BASIS OF CONSOLIDATION The interim condensed consolidated financial statements comprise the financial statements of the Company and its

subsidiaries as at each reporting date.

Effective from 1st April 2012 the basis of consolidation will include the following changes;

5.1 Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.



5.2 A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

5.3 If the Group loses control over a subsidiary, it: Derecognises the assets (including goodwill) and liabilities of the subsidiary Derecognises the carrying amount of any non-controlling interest Derecognises the cumulative translation differences, recorded in equity Recognises the fair value of the consideration received and receivable Recognises the fair value of any investment retained Recognises any surplus or deficit in profit or loss Reclassifies the parent’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

5.4 The Group measures goodwill at the acquisition date as the fair value of the consideration transferred including the

recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The Group elects on a transaction-by-transaction basis whether to measure non-controlling interests at fair value, or at their proportionate share of the recognised amount of the identifiable net assets, at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

5.5 In a business combination achieved in stages, the Group remeasures its previously held equity interest at fair value in the acquiree at each acquisition-date and recognise the resulting gain or loss, if any, in profit or loss.

5.6 Upon loss of joint control the Group measures and recognises its remaining investment at its fair value. Any difference between the carrying amount of the former joint controlled entity upon loss of joint control and the fair value of the remaining investment and proceeds from disposal are recognised in profit or loss. When the remaining investment constitutes significant influence, it is accounted for as investment in an associate.

5.7 Upon loss of significant influence over the associate, the Group measures and recognises any retaining investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognised in profit or loss.

6 SIGNIFICANT ACCOUNTING POLICIES The changes to accounting policies set out below have been applied consistently to all periods presented in these

interim condensed financial statements and in preparing the opening SLFRS/LKAS statement of financial position as at 1 April 2011 for the purpose of the transition to SLFRS/LKAS, unless otherwise indicated.

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.

20


notes to the interim Condensed finanCial statements

6.1 Customer Loyalty program The Group has a customer loyalty programme whereby customers are awarded credits known as ‘Nexus points’

entitling customers to the right to purchase goods & services at a discount from the Group and out side registered retailers.

The fair value of the consideration received or receivable in respect of the initial sale is allocated between the points and the other components of the sale. The amount allocated to the points is estimated by reference to the fair value of the right to purchase goods and services at a discount.

Such amount is deferred and revenue is recognised when the points are redeemed and the Group has fulfilled its obligations to supply the discounted products. The amount of revenue recognised in those circumstances is based on the number of points that have been redeemed in exchange for discounted products, relative to the total number of points that is expected to be redeemed. Deferred revenue is also released to income when it is no longer considered probable that the points will be redeemed.

6.2 Finance income and finance costs Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend

income, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss, gains on the remeasurement to fair value of any pre-existing interest in an acquiree, and gains on hedging instruments that are recognised in profit or loss.

Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss.

6.3 Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement

at inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate.



6.4 Financial assets Initial recognition and measurement Financial assets within the scope of LKAS 39 are classified as financial assets at fair value through profit or loss,

loans and receivables, held-to-maturity investments and available-for-sale financial assets, as appropriate and determines the classification of its financial assets at initial recognition.

All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group account for the fair value changes between trade date and settlement date.

The financial assets include cash and short-term deposits, trade and other receivables, loans and other receivables, quoted and unquoted financial instruments and derivative financial instruments.

Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss includes financial assets held for trading and financial assets

designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term.

Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement.

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in

an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement.

Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-

to-maturity when the Group has the positive intention and ability to hold it to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised as finance cost in the income statement.

22



Available-for-sale financial investments Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-

for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is reclassified to the income statement in finance costs and removed from the available-for-sale reserve.

Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

The rights to receive cash flows from the asset have expired The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Group’s continuing involvement in it.

In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group

of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.



6.5 Financial liabilities Initial recognition and measurement Financial liabilities within the scope of LKAS 39 are classified as financial liabilities at fair value through profit or

loss, loans and borrowings, or as derivatives as appropriate and determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.

The financial liabilities include trade and other payables, bank overdrafts, loans and borrowings, financial guarantee contracts, and derivative financial instruments.

Subsequent measurement The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial

liabilities designated upon initial recognition as at fair value through profit or loss.

Gains or losses on liabilities held for trading are recognised in the income statement.

The Group has not designated any financial liabilities upon initial recognition as at fair value through profit or loss.

Borrowings After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using

the effective interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the income statement.

Financial guarantee contracts Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to

reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.

Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of

financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

24


notes to the interimCondensed finanCial statements

Fair value of financial instruments The fair value of financial instruments that are traded in active markets at each reporting date is determined by

reference to quoted market prices or dealer price quotations, without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.

Derivative financial instruments Initial recognition and subsequent measurement The Group uses derivative financial instruments such as forward currency contracts, interest rate swaps and forward

commodity contracts to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

The fair value of commodity contracts that meet the definition of a derivative as defined by LKAS 39 but are entered into in accordance with the Group’s expected purchase requirements are recognised in the income statement in cost of sales.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to the income statement.

Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms,

or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the income statement.

6.6 Insurance operations Product classification

Insurance contracts are contracts under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder.

Significant insurance risk exists if an insured event could cause an insurer to pay significant additional benefits in any scenario, excluding scenarios that lack commercial substance (i.e. have no discernible effect on the economics of the transaction). The classification of contracts identifies both the insurance contracts that issues and reinsurance contracts that holds (SLFRS 4 appendix a).



6.7 Financial risk management objectives and policies The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other

payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group has loan and other receivables, trade and other receivables, and cash and short-term deposits that arise directly from its operations. The Group also holds available-for-sale investments and enters into derivative transactions. The Group is exposed to market risk, credit risk and liquidity risk.

The Group’s senior management oversees the management of these risks. The Group’s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Group. The financial risk committee provides assurance to the Group’s senior management that the Group’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Group policies and Group risk appetite. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes shall be undertaken.

6.8 Operating Segment An operating segment is a component of the Group that engages in business activities from which it may earn

revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Unallocated items comprise mainly corporate assets and income tax assets and liabilities.

7 STANDARDS ISSUED BUT NOT yET EFFECTIVE Standards issued but not yet effective up to the date of issuance of the Group’s interim financial statements are listed

below. This listing of standards and interpretations issued are those that the Group reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date. The Group intends to adopt these standards when they become effective.

7.1 SLFRS 10-Consolidated Financial Statements SLFRS 10 replaces the portion of LKAS 27 Consolidated and Separate Financial Statements that addresses the

accounting for consolidated financial statements. It also includes the issues raised in Standing Intepretations Committee - SIC-12 Consolidation - Special Purpose Entities.

SLFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by SLFRS 10 will require management to exercise significant judgment to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the requirements that were in LKAS 27. This standard becomes effective for annual periods beginning on or after 1 January 2013.

26



7.2 SLFRS 11-Joint Arrangements SLFRS 11 replaces LKAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities - Non-monetary

Contributions by Venturers. SLFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. The application of this new standard will impact the financial position of the Group. This is due to the cessation of proportionate consolidating of joint ventures being changed to equity accounting. This standard becomes effective for annual periods beginning on or after 1 January 2013.

7.3 SLFRS 12-Disclosure of Interests in other entities SLFRS 12 includes all of the disclosures that were previously in LKAS 27 related to consolidated financial statements,

as well as all of the disclosures that were previously included in LKAS 31 and LKAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. This standard becomes effective for annual periods beginning on or after 1 January 2013.

7.4 SLFRS 13-Fair Value Measurement SLFRS 13 establishes a single source of guidance under SLFRS for all fair value measurements. SLFRS 13 does not

state when an entity is required to use fair value, but rather provides guidance on how to measure fair value under SLFRS when fair value is required or permitted. The Group is currently assessing the impact that this standard will have on the financial position and performance. This standard becomes effective for annual periods beginning on or after 1 January 2013.

8 DEFERRING APPLICATION OF IFRIC 15 – AGREEMENTS FOR ThE CONSTRUCTION ON REAL ESTATE The Group has not adopted IFRIC 15 which is related to recognition of revenue of construction of real estate. The

group has deferred application of this IFRIC based on the ruling issued by CA Sri Lanka.

9 APPLICATION OF SLFRS 2 - ShARE-BASED PAyMENT SLFRS 2 Share-based Payment has not been applied to equity instruments in share-based payment transactions that

were granted on or before 1 January 2012.

10 FIRST TIME ADOPTION OF SLFRS/LKAS The interim condensed financial statements, for the period ended 30 June 2012, were the first financial statements

prepared in accordance with SLFRS/LKAS. Previously for periods up to and including the year ended 31 March 2012, the Group and Company prepared its financial statements in accordance with Sri Lanka Accounting Standards which were effective up to 31 March 2012.

In preparing these financial statements, the opening statement of financial position was prepared as at 1 April 2011, the date of transition to SLFRS/LKAS. This note summarises and explains the principal adjustments made in restating its SLAS statement of financial position as at 1 April 2011, 31 March 2012 and its previously published SLAS financial statements as at and for the period ended 30 September 2011.

Exemptions applied SLFRS 1 First-Time Adoption of Sri Lanka Financial Reporting Standards allows first-time adopters certain exemptions

from the retrospective application of certain SLFRS/LKAS.



10.1 The Group has applied the following optional exemptions: SLFRS 3 Business Combinations has not been applied to acquisitions of subsidiaries, which are considered

businesses for SLFRS/LKAS, or of interests in associates and joint ventures that occurred before 1 April 2011. The Group has not applied LKAS 21 retrospectively to fair value adjustments and goodwill from business combinations that occurred before the date of transition to SLFRS/LKAS. Such fair value adjustments and goodwill are treated as assets and liabilities of the parent rather than as assets and liabilities of the acquiree. Therefore, those assets and liabilities are already expressed in the functional currency of the parent or are non-monetary foreign currency items and no further translation differences occur.

Use of this exemption means that the SLAS carrying amounts of assets and liabilities, which are required to be recognised under SLFRS/LKAS, are stated at their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with SLFRS/LKAS. Assets and liabilities that do not qualify for recognition under SLFRS/LKAS are excluded from the opening SLFRS/LKAS statement of financial position.

SLFRS 1 also requires that the SLAS carrying amount of goodwill must be used in the opening SLFRS/LKAS statement of financial position (apart from adjustments for goodwill impairment and recognition or derecognition of intangible assets). In accordance with SLFRS 1, the Group has tested goodwill for impairment at the date of transition to SLFRS/LKAS.

Freehold land and buildings, other than investment property, were carried in the statement of financial position prepared in accordance with SLAS on the basis of valuations performed prior to 31 March 2012. The Group has elected to regard those values as deemed cost at the date of the revaluation since they were broadly comparable to fair value.

IFRIC 4 Determining whether an arrangement contains a Lease The Group has applied the transitional provision as per IFRIC 4 determining whether an arrangement contains a Lease

and has assessed all arrangements based upon the term and conditions in place as at the date of transition.

Unquoted equity Instruments The Group has designated unquoted equity instruments held as at 1 April 2011 as available-for-sale investments.

10.2 The Group has applied the following mandatory exceptions: Significant accounting judgment, estimates and assumptions Significant accounting judgment, estimates and assumptions at 1 April 2011 and at 31 March 2012 are consistent

with those made for the same dates in accordance with SLAS effective up to 31 December 2011 (after adjustments to reflect any differences in accounting policies). The estimates used by the Group to present these amounts in accordance with SLFRS/LKAS effective from 1 April 2012 reflect conditions at 1 April 2011, the date of transition to SLFRS/LKAS and as of March 31, 2012.

11 EXPLANATIONS FOR TRANSITION TO SLFRS/LKASs In preparing SLFRS/LKAS statement of financial position for previously reported financial periods, required

adjustments have been made in accordance with the respective SLFRS/LKASs. The effect of the transition from SLASs to SLFRS/LKASs has been presented in the reconciliation statements and accompanying notes to the material reconciliation items.

28


reConCiliation - ConsolidatedinCome statement For the Quarter ended 2011 For the Six months ended 2011 30th September 30th September As per SLAS As per As per SLAS As per Note Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS

Revenue 11.2 17,441,321 185,396 17,626,717 33,133,519 373,780 33,507,299

Cost of sales 11.2 (13,706,790) (188,977) (13,895,767) (26,183,044) (378,475) (26,561,519)

Gross profit 3,734,531 (3,581) 3,730,950 6,950,475 (4,695) 6,945,780

Dividend income 31,765 (31,765) - 40,637 (40,637) -

Other operating income 11.3 843,677 (650,350) 193,327 1,704,980 (1,304,063) 400,917

Distribution expenses (710,472) (702) (711,174) (1,269,171) (1,294) (1,270,465)

Administrative expenses (2,030,375) (2,381) (2,032,756) (3,993,267) (4,224) (3,997,491)

Other operating expenses (375,817) - (375,817) (766,332) - (766,332)

Finance costs (164,464) 36 (164,428) (323,978) 36 (323,942)

Finance income 11.3 - 705,330 705,330 - 1,376,830 1,376,830

Share of results of

equity-accounted investees 11.1 792,047 (81,638) 710,409 1,465,684 (91,238) 1,374,446

Profit before tax 2,120,892 (65,051) 2,055,841 3,809,028 (69,285) 3,739,743

Tax expense (375,322) 3,371 (371,951) (712,081) 7,048 (705,033)

Profit for the period 1,745,570 (61,680) 1,683,890 3,096,947 (62,237) 3,034,710




reConCiliation - Consolidated statement ofComprehensive inCome For the Quarter ended 2011 For the Six months ended 2011 30th September 30th September As per SLAS As per As per SLAS As per Note Remeasurements SLFRS/LKAS Remeasurements SLFRS/LKAS Profit for the period - 2,055,841 2,055,841 - 3,034,710 3,034,710

Other comprehensive income Currency translation of foreign operations - (6,351) (6,351) - (50,538) (50,538)Share of other comprehensive income of equity-accounted investees - 37,996 37,996 - 109,279 109,279 Net (loss)/gain on available-for-sale financial assets 11.4 - (1,045,779) (1,045,779) - (269,984) (269,984)Write off / transfer - (5,459) (5,459) - (7,336) (7,336) Income tax on other comprehensive income 11.9 - - - - (307) (307)

Other comprehensive income for the period, net of tax - (1,019,593) (1,019,593) - (218,886) (218,886)

Total comprehensive income for the period, net of tax - 1,036,248 1,036,248 - 2,815,824 2,815,824


30


reConCiliation - Consolidated statement offinanCial position Equity as at 30th September 2011 Equity as at 31st March 2012 Equity as at 1st April 2011 (date of transition to SLFRS/LKAS) As per As per As per SLAS As per As per SLAS As per Note SLAS Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS ASSETSNon-current assetsProperty, plant and equipment 30,192,909 - 30,192,909 34,290,012 - 34,290,012 28,627,982 - 28,627,982 Lease rentals paid in advance 9,240,219 (3,504) 9,236,715 10,281,853 (3,504) 10,278,349 9,515,621 (3,504) 9,512,117 Investment property 5,908,526 - 5,908,526 7,631,494 - 7,631,494 5,386,166 - 5,386,166 Intangible assets 2,731,520 (6,598) 2,724,922 2,639,671 (6,598) 2,633,073 2,631,950 - 2,631,950 Investments in subsidiaries and joint ventures 5,115 (5,115) - 5,115 (5,115) - 5,115 (5,115) - Investments in associates 15,315,308 (74,904) 15,240,404 15,669,114 (47,314) 15,621,800 14,644,712 47,723 14,692,435 Other non-current financial assets 11.4 11.5 13,151,241 1,346,745 14,497,986 12,378,883 1,310,936 13,689,819 11,792,453 1,484,172 13,276,625 Deferred tax assets 205,098 - 205,098 129,478 - 129,478 202,850 - 202,850 Other non-current assets 11.5 2,745,591 (1,072,278) 1,673,313 3,499,915 (1,094,718) 2,405,197 3,231,401 (965,417) 2,265,984 79,495,527 184,346 79,679,873 86,525,535 153,687 86,679,222 76,038,250 557,859 76,596,109

Current assets Inventories 4,232,051 9,240 4,241,291 4,372,348 - 4,372,348 3,143,630 9,240 3,152,870 Trade and other receivables 11.6 12,327,295 (3,236,214) 9,091,081 13,971,848 (4,056,800) 9,915,048 12,072,147 (3,361,230) 8,710,917 Amounts due from related parties 11,531 - 11,531 10,715 - 10,715 18,520 - 18,520 Other current assets 11.6 - 3,205,534 3,205,534 - 4,024,750 4,024,750 - 3,323,734 3,323,734 Other investments 15,496,406 (1,470) 15,494,936 24,767,025 (1,469) 24,765,556 16,881,036 (1,469) 16,879,567 Cash in hand and at bank 2,503,415 - 2,503,415 4,267,175 - 4,267,175 2,112,626 - 2,112,626 34,570,698 (22,910) 34,547,788 47,389,111 (33,519) 47,355,592 34,227,959 (29,725) 34,198,234 Total assets 114,066,225 161,436 114,227,661 133,914,646 120,168 134,034,814 110,266,209 528,134 110,794,343 EQUITY AND LIABILITIESEquity attributable to equity holders of the parentStated capital 24,715,906 - 24,715,906 25,110,528 - 25,110,528 24,611,507 - 24,611,507 Capital reserves 11.7 9,498,979 (9,070,614) 428,365 12,903,984 (12,475,619) 428,365 9,560,417 (9,132,052) 428,365 Revenue reserves 27,762,459 (204,829) 27,557,630 33,137,602 (186,879) 32,950,723 25,389,266 (93,222) 25,296,044 Other components of equity 11.4 11.7 - 9,461,054 9,461,054 - 12,797,149 12,797,149 - 9,770,533 9,770,533 61,977,344 185,611 62,162,955 71,152,114 134,651 71,286,765 59,561,190 545,259 60,106,449 Non-controlling interests 7,677,305 16,130 7,693,435 8,864,609 12,305 8,876,914 7,608,220 33,736 7,641,956

Total equity 69,654,649 201,741 69,856,390 80,016,723 146,956 80,163,679 67,169,410 578,995 67,748,405

Non-current liabilities Insurance provisions 13,810,934 - 13,810,934 14,744,712 (34,185) 14,710,527 12,662,500 - 12,662,500 Non-interest bearing borrowings 18,000 (18,000) - 18,000 (18,000) - 18,000 (18,000) - Borrowings 8,249,026 (70,321) 8,178,705 12,284,414 (63,507) 12,220,907 8,352,587 (77,135) 8,275,452 Deferred tax liabilities 624,492 - 624,492 707,970 - 707,970 647,960 - 647,960 Employee benefit liabilities 1,307,261 - 1,307,261 1,372,161 - 1,372,161 1,215,597 - 1,215,597 Other deferred liabilities 3,886 2,856 6,742 3,631 - 3,631 4,143 (683) 3,460 Other non-current liabilities 1,247,462 - 1,247,462 773,884 - 773,884 746,938 - 746,938 25,261,061 (85,465) 25,175,596 29,904,772 (115,692) 29,789,080 23,647,725 (95,818) 23,551,907

Current liabilities Trade and other payables 11.8 12,109,124 (708,374) 11,400,750 15,398,047 (867,394) 14,530,653 12,379,589 (1,202,284) 11,177,305 Amounts due to related parties 2,096 - 2,096 1,650 - 1,650 2,237 - 2,237 Income tax payable 638,068 (5,108) 632,960 828,303 - 828,303 796,714 (5,108) 791,606 Short term borrowings 110,000 - 110,000 1,009,057 - 1,009,057 232,000 - 232,000 Borrowings 2,103,038 - 2,103,038 2,408,740 - 2,408,740 2,134,418 - 2,134,418 Other current financial liabilities - - - - 74,593 74,593 - - - Other current liabilities 11.8 - 758,642 758,642 - 881,705 881,705 - 1,252,349 1,252,349

Bank overdrafts 4,188,189 - 4,188,189 4,347,354 - 4,347,354 3,904,116 - 3,904,116 19,150,515 45,160 19,195,675 23,993,151 88,904 24,082,055 19,449,074 44,957 19,494,031 Total equity and liabilities 114,066,225 161,436 114,227,661 133,914,646 120,168 134,034,814 110,266,209 528,134 110,794,343




Equity as at 30th September 2011 Equity as at 31st March 2012 Equity as at 1st April 2011 (date of transition to SLFRS/LKAS) As per As per As per SLAS As per As per SLAS As per Note SLAS Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS ASSETSNon-current assetsProperty, plant and equipment 30,192,909 - 30,192,909 34,290,012 - 34,290,012 28,627,982 - 28,627,982 Lease rentals paid in advance 9,240,219 (3,504) 9,236,715 10,281,853 (3,504) 10,278,349 9,515,621 (3,504) 9,512,117 Investment property 5,908,526 - 5,908,526 7,631,494 - 7,631,494 5,386,166 - 5,386,166 Intangible assets 2,731,520 (6,598) 2,724,922 2,639,671 (6,598) 2,633,073 2,631,950 - 2,631,950 Investments in subsidiaries and joint ventures 5,115 (5,115) - 5,115 (5,115) - 5,115 (5,115) - Investments in associates 15,315,308 (74,904) 15,240,404 15,669,114 (47,314) 15,621,800 14,644,712 47,723 14,692,435 Other non-current financial assets 11.4 11.5 13,151,241 1,346,745 14,497,986 12,378,883 1,310,936 13,689,819 11,792,453 1,484,172 13,276,625 Deferred tax assets 205,098 - 205,098 129,478 - 129,478 202,850 - 202,850 Other non-current assets 11.5 2,745,591 (1,072,278) 1,673,313 3,499,915 (1,094,718) 2,405,197 3,231,401 (965,417) 2,265,984 79,495,527 184,346 79,679,873 86,525,535 153,687 86,679,222 76,038,250 557,859 76,596,109

Current assets Inventories 4,232,051 9,240 4,241,291 4,372,348 - 4,372,348 3,143,630 9,240 3,152,870 Trade and other receivables 11.6 12,327,295 (3,236,214) 9,091,081 13,971,848 (4,056,800) 9,915,048 12,072,147 (3,361,230) 8,710,917 Amounts due from related parties 11,531 - 11,531 10,715 - 10,715 18,520 - 18,520 Other current assets 11.6 - 3,205,534 3,205,534 - 4,024,750 4,024,750 - 3,323,734 3,323,734 Other investments 15,496,406 (1,470) 15,494,936 24,767,025 (1,469) 24,765,556 16,881,036 (1,469) 16,879,567 Cash in hand and at bank 2,503,415 - 2,503,415 4,267,175 - 4,267,175 2,112,626 - 2,112,626 34,570,698 (22,910) 34,547,788 47,389,111 (33,519) 47,355,592 34,227,959 (29,725) 34,198,234 Total assets 114,066,225 161,436 114,227,661 133,914,646 120,168 134,034,814 110,266,209 528,134 110,794,343 EQUITY AND LIABILITIESEquity attributable to equity holders of the parentStated capital 24,715,906 - 24,715,906 25,110,528 - 25,110,528 24,611,507 - 24,611,507 Capital reserves 11.7 9,498,979 (9,070,614) 428,365 12,903,984 (12,475,619) 428,365 9,560,417 (9,132,052) 428,365 Revenue reserves 27,762,459 (204,829) 27,557,630 33,137,602 (186,879) 32,950,723 25,389,266 (93,222) 25,296,044 Other components of equity 11.4 11.7 - 9,461,054 9,461,054 - 12,797,149 12,797,149 - 9,770,533 9,770,533 61,977,344 185,611 62,162,955 71,152,114 134,651 71,286,765 59,561,190 545,259 60,106,449 Non-controlling interests 7,677,305 16,130 7,693,435 8,864,609 12,305 8,876,914 7,608,220 33,736 7,641,956

Total equity 69,654,649 201,741 69,856,390 80,016,723 146,956 80,163,679 67,169,410 578,995 67,748,405

Non-current liabilities Insurance provisions 13,810,934 - 13,810,934 14,744,712 (34,185) 14,710,527 12,662,500 - 12,662,500 Non-interest bearing borrowings 18,000 (18,000) - 18,000 (18,000) - 18,000 (18,000) - Borrowings 8,249,026 (70,321) 8,178,705 12,284,414 (63,507) 12,220,907 8,352,587 (77,135) 8,275,452 Deferred tax liabilities 624,492 - 624,492 707,970 - 707,970 647,960 - 647,960 Employee benefit liabilities 1,307,261 - 1,307,261 1,372,161 - 1,372,161 1,215,597 - 1,215,597 Other deferred liabilities 3,886 2,856 6,742 3,631 - 3,631 4,143 (683) 3,460 Other non-current liabilities 1,247,462 - 1,247,462 773,884 - 773,884 746,938 - 746,938 25,261,061 (85,465) 25,175,596 29,904,772 (115,692) 29,789,080 23,647,725 (95,818) 23,551,907

Current liabilities Trade and other payables 11.8 12,109,124 (708,374) 11,400,750 15,398,047 (867,394) 14,530,653 12,379,589 (1,202,284) 11,177,305 Amounts due to related parties 2,096 - 2,096 1,650 - 1,650 2,237 - 2,237 Income tax payable 638,068 (5,108) 632,960 828,303 - 828,303 796,714 (5,108) 791,606 Short term borrowings 110,000 - 110,000 1,009,057 - 1,009,057 232,000 - 232,000 Borrowings 2,103,038 - 2,103,038 2,408,740 - 2,408,740 2,134,418 - 2,134,418 Other current financial liabilities - - - - 74,593 74,593 - - - Other current liabilities 11.8 - 758,642 758,642 - 881,705 881,705 - 1,252,349 1,252,349

Bank overdrafts 4,188,189 - 4,188,189 4,347,354 - 4,347,354 3,904,116 - 3,904,116 19,150,515 45,160 19,195,675 23,993,151 88,904 24,082,055 19,449,074 44,957 19,494,031 Total equity and liabilities 114,066,225 161,436 114,227,661 133,914,646 120,168 134,034,814 110,266,209 528,134 110,794,343


32

John Keells Holdings PLC John Keells Holdings PLC

reConCiliation - CompanY inCome statement

For the Quarter ended For the Six months ended 30th September 2011 30th September 2011 As per As per As per As per Note SLAS Remeasurements SLFRS/LKAS SLAS Remeasurements SLFRS/LKAS

Revenue 148,014 - 148,014 287,863 - 287,863

Cost of sales (77,767) - (77,767) (143,331) - (143,331)

Gross profit 70,247 - 70,247 144,532 - 144,532

Dividend income 464,269 (84,709) 379,560 1,435,739 (84,709) 1,351,030

Other operating income 11.3 204,614 (146,322) 58,292 443,172 (308,649) 134,523

Administrative expenses (201,501) (235) (201,736) (407,492) (471) (407,963)

Other operating expenses (7,502) - (7,502) (16,278) - (16,278)

Finance costs (51,143) - (51,143) (103,761) - (103,761)

Finance income 11.3 - 147,189 147,189 - 310,383 310,383

Profit before tax 478,984 (84,077) 394,907 1,495,912 (83,446) 1,412,466

Tax expense (4,655) - (4,655) (22,826) - (22,826)

Profit for the period 474,329 (84,077) 390,252 1,473,086 (83,446) 1,389,640




reConCiliation - CompanY statement ofComprehensive inCome For the Quarter ended For the Six months ended 30th September 2011 30th September 2011 As per As per As per As per Note SLAS Remeasurements SLFRS/LKAS SLAS Remeasurements SLFRS/LKAS Profit for the period - 390,252 390,252 - 1,389,640 1,389,640 Other comprehensive income

Net (loss)/gain on available-for-sale financial assets 11.4 - (915,731) (915,731) - 154,628 154,628 Income tax on other comprehensive income - - - - - - Other comprehensive income for the period, net of tax - (915,731) (915,731) - 154,628 154,628 Total comprehensive income for the period, net of tax - (525,479) (525,479) - 1,544,268 1,544,268


34


reConCiliation - CompanY statement offinanCial position Equity as at 30th September 2011 Equity as at 31st March 2012 Equity as at 1st April 2011 (date of transition to SLFRS/LKAS) As per As per As per SLAS As per As per SLAS As per Note SLAS Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS ASSETSNon-current assetsProperty, plant and equipment 80,421 - 80,421 89,559 - 89,559 73,543 - 73,543 Intangible assets 36,906 - 36,906 48,141 - 48,141 43,724 - 43,724 Investments in subsidiaries and joint ventures 24,585,141 18,000 24,603,141 24,664,271 18,000 24,682,271 23,482,112 18,000 23,500,112 Investments in associates 9,285,130 - 9,285,130 9,485,530 - 9,485,530 9,257,569 - 9,257,569 Other non-current financial assets 11.4 11.5 1,582,506 195,487 1,777,993 1,582,506 442,965 2,025,471 581,806 76,749 658,555 Deferred tax assets 40,198 - 40,198 - - - 54,198 - 54,198

Other non-current assets 11.5 221,386 (221,386) - 228,845 (228,845) - 258,539 (258,539) - 35,831,688 (7,899) 35,823,789 36,098,852 232,120 36,330,972 33,751,491 (163,790) 33,587,701

Current assets Inventories - - - - - - 760 - 760 Trade and other receivables 11.6 541,255 (417,095) 124,160 865,031 (406,433) 458,598 589,015 (450,610) 138,405 Amounts due from related parties 604,716 - 604,716 532,981 445,767 978,748 612,073 84,709 696,782 Other current assets 11.6 - 346,774 346,774 - 342,926 342,926 - 373,475 373,475Other investments 8,388,339 - 8,388,339 10,102,198 - 10,102,198 10,071,249 - 10,071,249

Cash in hand and at bank 10,519 - 10,519 454,495 - 454,495 19,382 - 19,382 9,544,829 (70,321) 9,474,508 11,954,705 382,260 12,336,965 11,292,479 7,574 11,300,053 Total assets 45,376,517 (78,220) 45,298,297 48,053,557 614,380 48,667,937 45,043,970 (156,216) 44,887,754 EQUITY AND LIABILITIES Stated capital 24,715,906 - 24,715,906 25,110,528 - 25,110,528 24,611,507 - 24,611,507 Revenue reserves 14,282,513 1,263 14,283,776 15,393,677 448,292 15,841,969 13,439,260 84,709 13,523,969

Other components of equity 11.4 - (9,162) (9,162) - 229,595 229,595 - (163,790) (163,790)Total equity 38,998,419 (7,899) 38,990,520 40,504,205 677,887 41,182,092 38,050,767 (79,081) 37,971,686 Non-current liabilitiesBorrowings 4,956,750 (70,321) 4,886,429 5,124,000 (63,507) 5,060,493 5,520,000 (77,135) 5,442,865

Employee benefit liabilities 113,941 - 113,941 126,864 - 126,864 104,752 - 104,752 5,070,691 (70,321) 5,000,370 5,250,864 (63,507) 5,187,357 5,624,752 (77,135) 5,547,617

Current liabilities Trade and other payables 181,206 - 181,206 331,525 - 331,525 220,667 - 220,667 Amounts due to related parties 7,766 - 7,766 6,926 - 6,926 9,274 - 9,274 Borrowings 1,101,500 - 1,101,500 1,281,000 - 1,281,000 1,104,000 - 1,104,000

Bank overdrafts 16,935 - 16,935 679,037 - 679,037 34,510 - 34,510 1,307,407 - 1,307,407 2,298,488 - 2,298,488 1,368,451 - 1,368,451 Total equity and liabilities 45,376,517 (78,220) 45,298,297 48,053,557 614,380 48,667,937 45,043,970 (156,216) 44,887,754




Equity as at 30th September 2011 Equity as at 31st March 2012 Equity as at 1st April 2011 (date of transition to SLFRS/LKAS) As per As per As per SLAS As per As per SLAS As per Note SLAS Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS Re-stated Remeasurements SLFRS/LKAS ASSETSNon-current assetsProperty, plant and equipment 80,421 - 80,421 89,559 - 89,559 73,543 - 73,543 Intangible assets 36,906 - 36,906 48,141 - 48,141 43,724 - 43,724 Investments in subsidiaries and joint ventures 24,585,141 18,000 24,603,141 24,664,271 18,000 24,682,271 23,482,112 18,000 23,500,112 Investments in associates 9,285,130 - 9,285,130 9,485,530 - 9,485,530 9,257,569 - 9,257,569 Other non-current financial assets 11.4 11.5 1,582,506 195,487 1,777,993 1,582,506 442,965 2,025,471 581,806 76,749 658,555 Deferred tax assets 40,198 - 40,198 - - - 54,198 - 54,198

Other non-current assets 11.5 221,386 (221,386) - 228,845 (228,845) - 258,539 (258,539) - 35,831,688 (7,899) 35,823,789 36,098,852 232,120 36,330,972 33,751,491 (163,790) 33,587,701

Current assets Inventories - - - - - - 760 - 760 Trade and other receivables 11.6 541,255 (417,095) 124,160 865,031 (406,433) 458,598 589,015 (450,610) 138,405 Amounts due from related parties 604,716 - 604,716 532,981 445,767 978,748 612,073 84,709 696,782 Other current assets 11.6 - 346,774 346,774 - 342,926 342,926 - 373,475 373,475Other investments 8,388,339 - 8,388,339 10,102,198 - 10,102,198 10,071,249 - 10,071,249

Cash in hand and at bank 10,519 - 10,519 454,495 - 454,495 19,382 - 19,382 9,544,829 (70,321) 9,474,508 11,954,705 382,260 12,336,965 11,292,479 7,574 11,300,053 Total assets 45,376,517 (78,220) 45,298,297 48,053,557 614,380 48,667,937 45,043,970 (156,216) 44,887,754 EQUITY AND LIABILITIES Stated capital 24,715,906 - 24,715,906 25,110,528 - 25,110,528 24,611,507 - 24,611,507 Revenue reserves 14,282,513 1,263 14,283,776 15,393,677 448,292 15,841,969 13,439,260 84,709 13,523,969

Other components of equity 11.4 - (9,162) (9,162) - 229,595 229,595 - (163,790) (163,790)Total equity 38,998,419 (7,899) 38,990,520 40,504,205 677,887 41,182,092 38,050,767 (79,081) 37,971,686 Non-current liabilitiesBorrowings 4,956,750 (70,321) 4,886,429 5,124,000 (63,507) 5,060,493 5,520,000 (77,135) 5,442,865

Employee benefit liabilities 113,941 - 113,941 126,864 - 126,864 104,752 - 104,752 5,070,691 (70,321) 5,000,370 5,250,864 (63,507) 5,187,357 5,624,752 (77,135) 5,547,617

Current liabilities Trade and other payables 181,206 - 181,206 331,525 - 331,525 220,667 - 220,667 Amounts due to related parties 7,766 - 7,766 6,926 - 6,926 9,274 - 9,274 Borrowings 1,101,500 - 1,101,500 1,281,000 - 1,281,000 1,104,000 - 1,104,000

Bank overdrafts 16,935 - 16,935 679,037 - 679,037 34,510 - 34,510 1,307,407 - 1,307,407 2,298,488 - 2,298,488 1,368,451 - 1,368,451 Total equity and liabilities 45,376,517 (78,220) 45,298,297 48,053,557 614,380 48,667,937 45,043,970 (156,216) 44,887,754


36


notes to the interim Condensed finanCial statements NOTES TO ThE RECONCILIATIONS

11.1 Comparatives For the period ended 30 September 2012, The share of results of listed associates have been mirrored for the actual

corresponding periods, irrespective of their financial year ends. Accordingly, the comparatives for the period ended 30 September 2011 also have been amended as follows:

For the Quarter ended For the Six months ended 30th September 2011 (SLAS) 30th September 2011 (SLAS) As reported Current As reported Current previously presentation previously presentation Share of results of equity-accounted investees 792,047 792,047 1,660,331 1,465,684 Profit before tax 2,120,892 2,120,892 4,003,675 3,809,028 Tax expense (375,322) (375,322) (777,980) (712,081) Profit for the period 1,745,570 1,745,570 3,225,695 3,096,947

Investments in associates As reported Current previously presentation As at 31st March 2012 (SLAS) 15,692,608 15,669,114 As at 1st April 2011 (SLAS) 14,670,235 14,644,712 11.2 Revenue recognition The Group operates a loyalty points programme. Under SLAS, the fair value of points issued are accounted as cost

of sales. However, as per SLFRS/LKAS the fair value of the points issued is deferred and recognised as revenue when the points are redeemed. The Group reassesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The group has reassessed the revenue recognition policy on freight forwarding and out bound tour arrangements. From 1st April 2011 revenue is being recognised on gross basis.

The changes relating to these are as follows :

For the Quarter ended For the Six months ended 30th September 2011 30th September 2011 As per previous As per Re- As per previous As per Re- (SLAS) SLFRS/LKAS measurements (SLAS) SLFRS/LKAS measurements Revenue 58,831 244,227 185,396 117,777 491,557 373,780 Cost of sales (19,020) (207,997) (188,977) (36,176) (414,651) (378,475) Net impact 39,811 36,230 (3,581) 81,601 76,906 (4,695)

11.3 Other operating income As per previous SLAS interest income has been classified under other operating income. Under SLFRS/LKAS interest

income has been classified in finance income.

For the Quarter ended For the Six months ended 30th September 2011 30th September 2011 Reclassification from Reclassification to Group Company Group Company Other operating Income Finance Income 705,330 147,189 1,376,830 310,383



11.4 Available-for-sale financial assets Under previous SLAS, the Group and company accounted for long term investments measured at cost. Under SLFRS/

LKAS, the Group and Company have designated such investments as available for sale investments. SLFRS/LKAS requires available for sale investments to be measured at fair value.

Difference between the fair value under SLFRS/LKAS and carrying value under previous SLAS has been recognised as a separate component of equity, in the available for sale reserve net of deferred tax.

Equity as at 01st April 2011 (date of Equity as at 30th Equity as at 31st transition to September 2011 March 2012 SLFRS/LKAS) Fair value of these assets as per SLFRS/LKAS 13,538,250 12,679,366 12,449,445 Carrying amount of these assets as per SLAS 13,125,662 12,353,307 11,766,874 Net (loss) gain on available for sale financial assets Group Company

For the six months ended 30 September 2011 (269,984) 154,628

11.5 Other non-current asset Due to the application of LKAS 32 and 39, financial assets in other non-current assets have been reclassified to other

noncurrent financial assets. Reclassification from - Other non-current assets

Reclassification to - Other non-current financial assets Group Company As at 30th September 2011 1,072,278 221,386 As at 31st March 2012 1,094,718 228,845 As at 1st April 2011 965,417 258,539

11.6 Trade and other receivables Due to the application of LKAS 32 and 39, non financial assets (Prepayments and Tax refunds) in trade and other

receivables have been reclassified to other current assets.

Reclassification from - Trade and other receivables Reclassification to - Other current assets Group Company As at 30th September 2011 3,205,534 346,774 As at 31st March 2012 4,024,750 342,926 As at 1st April 2011 3,323,734 373,475

11.7 Capital reserves Due to the application of SLFRS/LKAS, Presentation of financial statements has changed. Some capital reserves have

been reclassified to other component of equity.

Reclassification from - Capital reserves Reclassification to - Other components of equity Group Company As at 30th September 2011 9,070,614 - As at 31st March 2012 12,475,619 - As at 1st April 2011 9,132,052 -

38



11.8 Trade and other payables Due to the application of LKAS 32 and 39, non financial liabilities (Tax payables and Advance received) in trade and

other payables have been reclassified to other current liabilities.

Reclassification from - Trade and other payables Reclassification to - Other current liabilities Group Company As at 30th September 2011 758,642 - As at 31st March 2012 881,705 - As at 1st April 2011 1,252,349 - 11.9 Deferred tax Transitional adjustments relating to SLFRS/LKAS adjustments lead to temporary differences. Such temporary

differences results in deferred tax adjustments which are recognised in correlation to the underlying transaction either in retained earnings or as a separate component of equity.

11.10 Statement of cash flows The transition from SLAS to SLFRS/LKAS has not had a material impact on the statement of cash flows.

12 OPERATING SEGMENTS For management purposes, the group is organised into business units based on their products and services and has

seven reportable operating segments as follows:

12.1 Transportation Businesses of the transportation operating segment offer an array of transportation related services in Sri Lanka

and the region and these operations comprise of South Asia Gateway Terminals in the port of Colombo, a marine bunkering business, joint ventures / associations with leading shipping and air transportation multinationals and logistics, travel and airline services in Sri Lanka, India and the Maldives.

12.2 Leisure The leisure operating segment encompasses two five star city hotels in Colombo and seven resort hotels spread in

prime tourist locations all over Sri Lanka and three resorts in the Maldives offering beaches, mountains, wildlife and cultural splendour under the two brands ‘Cinnamon Hotels and Resorts’ and ‘Chaaya Hotels and Resorts’.

The Leisure operating segment also has destination management businesses in Sri Lanka and India.

12.3 Property The property operating segment concentrates primarily on development and sale of residential apartments.

12.4 Consumer Foods & Retail The consumer foods & retail operating segment competes in the three major categories namely beverages, frozen

confectionary and convenience foods. Retailing business through the ‘Keells Super’ chain of supermarkets and in partnership with Nations Trust Bank, has created ‘Nexus’, coalition loyalty card in the country.

12.5 Financial Services The financial services operating segment offer a complete range of financial solutions including commercial banking,

insurance, stock broking, debt trading, fund management and leasing.

12.6 Information Technology The information technology operating segment comprises from BPO, software services and information integration to

office automation which offers end-to-end ICT services and solutions.



12.7 Others Others operating segment includes plantation services sector which operates tea factories, tea and rubber broking

and pre-auction produce warehousing. This segment also consists of John Keells Holdings PLC including its divisions / centre functions such as John Keells Capital and Strategic Group Information Technology division (SGIT), as well as other companies providing ancillary services.

No operating segments have been aggregated to form the above reportable operating segments. An individual segment manager is determined for each operating segment and the results are regularly reviewed by the Board of Directors. The Board of Directors monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the operating segments information, is measured differently from operating profit or loss in the consolidated financial statements. However, except for Financial Services segment other segments’ financing activities are managed on a group basis and are not allocated to operating segments. The income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s-length basis in a manner similar to transactions with

third parties.

13 RELATED PARTy TRANSACTIONS Group Company For the Six months ended 30th September 2012 2011 2012 2011 Transactions with related parties Subsidiaries (Purchases) / Sales of goods - - (1,446) (1,681) (Receiving) / Rendering of services - - 293,923 259,641 (Purchases) / sale of property plant & equipment - - - Loans given - - 485,000 597,391 Interest received / (Interest paid) - - 36,723 33,242 Rent (taken) / Given - - (26,454) (22,381) (Guarantees taken) / Guarantees given - - - - Joint Ventures (Receiving) / Rendering of services 17,582 8,395 - - Associates (Purchases) / Sales of goods 3,208 2,843 - - (Receiving) / Rendering of services 8,926 4,263 2,111 1,297 Interest received / (Interest paid) 227,863 95,176 121,210 35,808 Loans taken (10) (37,300) - - Leases taken - - - - Key management personnel (Receiving) / Rendering of services - - - - Close family members of KMP (Receiving) / Rendering of services - - - - Companies controlled / jointly controlled / significantly Influenced by KMP and their close family members (Purchases) / Sales of goods - - - - Post employment benefit plan Contributions to the provident fund 100,378 95,728 21,185 20,181

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14 ShARE INFORMATION

14.1 Public share holdings The percentage of shares held by the public as at 30 September 2012 was 76.61 % (30 June 2012 – 76.54%).

14.2 Directors’ share holdings The number of shares held by the Board of Directors are as follows:

As at 30-09-2012 30-06-2012

S C Ratnayake – Chairman/CEO 5,000,000 5,157,303 A D Gunewardene – Deputy Chairman 5,844,979 6,211,920 J R F Peiris 1,215,859 1,215,859 E F G Amerasinghe 5,514 5,514 T Das Nil Nil S Enderby Nil Nil S S Tiruchelvam 1,300 1,300 I Coomaraswamy Nil Nil A R Gunasekara 107,866 107,866

14.3 Twenty largest shareholders of the company are as follows:

As at 30-09-2012 30-06-2012 Number of Number of

shares % shares %

1 Mr S E Captain 100,000,001 11.7% 100,317,222 11.8% 2 Janus Overseas Fund 86,536,133 10.2% 86,536,133 10.2% 3 Broga Hill Investments Limited 74,591,759 8.8% 74,591,759 8.8% 4 Paints & General Industries Limited 47,275,935 5.6% 43,123,868 5.1% 5 Melstacorp (Private) Limited 31,499,883 3.7% 31,499,883 3.7% 6 Deutsche Bank AG – London 28,634,605 3.4% 27,734,599 3.3% 7 Estate of Mr A A N De Fonseka 19,952,358 2.3% 19,952,358 2.3% 8 Aberdeen Global Asia Pacific Equity Fund 19,047,737 2.2% 19,047,737 2.2% 9 Janus Aspen series Overseas Portfolio Fund 18,303,333 2.2% 18,303,333 2.2% 10 BPSS LUX-Aberdeen Global-Emerging Markets Smaller Companies Fund 15,502,743 1.8% 15,502,743 1.8% 11 Rubber Investment Trust Limited A/C no.1 14,294,471 1.7% 14,581,090 1.7% 12 Sri Lanka Insurance Corporation Ltd-Life Fund 14,288,150 1.7% 14,288,150 1.7% 13 Mr K Balendra 13,141,807 1.5% 13,141,807 1.5% 14 HSBC INTL NOM LTD-JPMLU-Schroder International Selection Fund 12,878,166 1.5% 12,779,366 1.5% 15 J P Morgan Clearing Corporation 12,674,585 1.5% 20,263,651 2.4% 16 Aberdeen Global-Asian Smaller Companies Fund 12,085,150 1.4% 11,530,150 1.4% 17 HSBC INTL NOM LTD-BP2S London-Edinburgh Dragon Trust PLC 9,936,664 1.2% 9,936,664 1.2% 18 Aberdeen Institutional Commingled Funds, LLC 9,574,873 1.1% 8,906,873 1.0% 19 Aberdeen Asia Pacific Fund 9,074,229 1.1% 9,074,229 1.1% 20 RBC Dexia Investor Services Bank S A - Vontobel Fund 8,466,865 1.0% 8,466,865 1.0%



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

As at 30-09-2012 31-03-2012 30-09-2011

Ordinary shares 849,939,665 842,934,999 893,346,356 Global depository receipts 1,129,677 1,185,047 1,185,047

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

September 2012.

14.6 Market price per share For the quarter ended 30 September 2012 2011 Rs. Rs. Highest 229.90 220.00 Lowest 176.00 183.00 Last traded 229.10 203.90 15 DIVIDENDS PAID A final dividend of Rs. 1.50 per share for the financial year ended 31 March 2012 was paid on 15 June 2012.

16 DISPOSAL OF ASSOCIATE In September 2012, the Group disposed of its interest in one of its associates, namely Quattro FPO Solutions (Pvt)

Limited (QFPO) for a consideration of Rs. 586 Million. The resultant gain has been reflected in the Consolidated Income Statement.

17 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 2012 other than as disclosed below;

Keells Food Products PLC (KFPL), a subsidiary of JKH has made an advance payment of Rs. 350 Million towards the acquisition of the assets of a meat processing factory owned by D&W Food Products (Pvt) Limited, including the leasehold rights attaching the land. The balance payment of Rs. 350 Million is payable upon the execution of the leasehold rights attaching to the land to KFPL. KFPL has established letters of credit amounting to Euro 950,000 to import part of the machinery required for the expansion.

18 EVENTS AFTER ThE REPORTING PERIOD The board of directors of the company has declared a first interim dividend of Rs.1.00 per share for the financial year

2012/13. As required by section 56 (2) of the Companies Act no 07 of 2007, the board of directors has confirmed that the company satisfies the solvency test in accordance with section 57 of the companies Act No.07 of 2007, and has obtained a certificate from auditors, prior to declaring a final dividend which is to be paid on the 23 November 2012.

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notes

CORPORATE INFORMATION

Name of CompanyJohn Keells Holdings PLC

Legal FormPublic Limited Liability CompanyIncorporated in Sri Lanka in 1979Ordinary Shares listed on the

Colombo Stock Exchange GDRs listed on the Luxembourg

Stock Exchange

Company Registration No.PQ 14

DirectorsS C Ratnayake – ChairmanA D Gunewardene – Deputy

ChairmanJ R F PeirisE F G AmerasingheI Coomaraswamy T DasS EnderbyA R Gunasekara S S Tiruchelvam

Senior Independent DirectorE F G Amerasinghe

Audit CommitteeA R Gunasekara – Chairman E F G AmerasingheI CoomaraswamyS Enderby

Human Resources and Compensation CommitteeE F G Amerasinghe – ChairmanI CoomaraswamyA R GunasekaraS S Tiruchelvam

Nominations CommitteeT Das – ChairmanS EnderbyS C RatnayakeS S Tiruchelvam

BankersBank of CeylonCitibank N.ACommercial BankDeutsche Bank A.GDFCC BankDFCC Vardhana BankHatton National BankHongkong & Shanghai Banking

CorporationICICI BankMuslim Commercial BankNations Trust BankNational Savings BankPan Asia Banking CorporationPeople’s BankSampath BankSeylan BankStandard Chartered Bank

Depository for GDRsCitibank N.A New York

Registered office of the Company130 Glennie StreetColombo 2, Sri LankaInternet: www.keells.comEmail: [email protected]

Secretaries and RegistrarsKeells Consultants (Pvt) Limited130 Glennie StreetColombo 2, Sri LankaTelephone: +94 (0) 11 230 6245Facsimile: +94 (0) 11 243 9037

Investor RelationsJohn Keells Holdings PLC130 Glennie StreetColombo 2, Sri Lanka Telephone: +94 (0) 11 230 6167 +94 (0) 11 230 6000Facsimile: +94 (0) 11 230 6160Email: [email protected]

Group Sustainability and Enterprise Risk ManagementJohn Keells Holdings PLC130 Glennie Street Colombo 2, Sri LankaTelephone: +(94) 11 230 6182Facsimile: +(94) 11 230 6249Email: [email protected]

Contact for MediaCorporate Communications DivisionJohn Keells Holdings PLC130 Glennie StreetColombo 2, Sri LankaTelephone: +94 (0) 11 230 6191Facsimile: +94 (0) 11 471 7706

AuditorsErnst & YoungChartered AccountantsP.O. Box 101Colombo, Sri Lanka

www.keells.com Six Months Ended 30th September 2012Interim Condensed Financial Statements

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