INTERIM FINANCIAL REPORT TWELVE MONTHS ENDED 31ST MARCH 2010
COMPANY INCOME STATEMENT Quarter ended Twelve Months to 31st March 31st March 2010 2009 Change 2010 2009 Change Rs. '000 Rs. '000 % Rs. '000 Rs. '000 % Revenue 1,865,038 747,055 149.7 3,893,634 2,691,997 44.6 Cost of Sales (1,806,452) (658,539) 174.3 (3,731,721) (2,604,646) 43.3 Gross Profit 58,586 88,516 (33.8) 161,913 87,351 85.4 Add: Other Operating Income 2,946 3,255 (9.5) 13,639 15,625 (12.7) 61,532 91,771 (33.0) 175,552 102,976 70.5 Less: Administrative Expenses (77,438) (50,650) 52.9 (150,553) (85,311) 76.5 Distribution Expenses (1,704) (2,012) (15.3) (2,360) (3,737) (36.8) Profit/(Loss) from Operations (17,610) 39,109 (145.0) 22,639 13,928 62.5 Less: Finance Expenses (2,479) (5,884) (57.9) (8,958) (27,493) (67.4) Profit/(Loss) before Taxation (20,089) 33,225 (160.5) 13,681 (13,565) (200.9) Less: Taxation - (1,464) - (1,464) Profit/(Loss) after Taxation (20,089) 31,761 (163.3) 13,681 (15,029) (191.0) Profit/(Loss) attributable to the Group (20,089) 31,761 (163.3) 13,681 (15,029) (191.0) Earning per share - Basic (11.97) 18.93 8.15 (8.96) Dividend per Share - - - 3.00 Note - All values are in Rs. '000, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. 1
CONSOLIDATED INCOME STATEMENT Quarter ended Twelve Months to 31st March 31st March 2010 2009 Change 2010 2009 Change Rs. '000 Rs. '000 % Rs. '000 Rs. '000 % Revenue 1,880,979 2,743,605 (31.4) 3,955,028 2,743,605 41.9 Cost of Sales (1,818,594) (2,651,062) (31.4) (3,779,857) (2,651,062) 40.8 Gross Profit 62,385 92,543 (32.6) 175,171 92,543 89.3 Add: Other Operating Income 3,390 16,519 (79.5) 14,196 16,519 (17.4) 65,775 109,062 (39.7) 189,367 109,062 73.6 Less: Administrative Expenses (79,772) (94,200) (15.3) (158,170) (94,200) 59.8 Distribution Expenses (3,185) (5,688) (44.0) (4,561) (5,688) (58.5) Profit from Operations (17,182) 9,174 (287.3) 26,636 9,174 190.3 Less: Finance Expenses (2,746) (35,357) (92.2) (14,153) (35,357) (74.7) Profit/(Loss) before Taxation (19,928) (26,183) (23.9) 12,483 (26,183) (147.7) Less: Taxation - (1,683) - - (1,683) - Profit/(Loss) after Taxation (19,928) (27,866) (28.5) 12,483 (27,866) (144.8) Less: Minority Interest (82) 3,777 (102.2) 605 6,293 (90.4) Profit/(Loss) attributable to the Group (20,010) (22,406) (10.7) 13,088 (21,573) (160.7) Earning per share - Basic (12.11) (13.56) 7.92 (13.05) Dividend per Share - - - 3.00 Note - All values are in Rs. '000, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. 2
CONSOLIDATED BALANCE SHEET Company Group As at As at As at As at 31/03/2010 31/03/2009 31/03/2010 31/03/2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 ASSETS: NON CURRENT ASSETS: Property, Plant & Equipment 84,824 96,618 126,377 140,593 Investments 11,136 11,136 12,523 14,303 95,960 107,754 138,900 154,896 CURRENT ASSETS: Inventories 161,246 38,582 167,406 44,184 Trade & Other Receivables 252,948 62,401 287,898 86,179 Cash in Hand & At Bank 57,095 77,191 59,351 82,025 471,289 178,174 514,655 212,388 TOTAL ASSETS 567,249 285,928 653,555 367,284 EQUITY & LIABILITIES: Capital & Reserves Stated Capital 16,778 16,778 16,528 16,528 Capital Reserves 15,717 15,717 34,957 34,956 Revenue Reserves 90,717 77,036 80,662 67,574 123,212 109,531 132,147 119,058 Minority Interest - - 18,200 18,805 Total Equity 123,212 109,531 150,347 137,863 NON CURRENT LIABILITIES: Interest Bearing Borrowings - - 2,290 4,309 Deferred Tax 3,317 3,318 3,317 3,318 Retirement Benefit Obligations 13,378 13,377 15,190 15,059 16,695 16,695 20,797 22,686 CURRENT LIABILITIES: Trade & Other Payables 19,973 15,287 47,547 30,098 Interest Bearing Borrowings 407,369 144,415 434,864 176,637 427,342 159,702 482,411 206,735 TOTAL EQUITY & LIABILITIES 567,249 285,928 653,555 367,284 Net assets per share - Rs. 73 65 80 72 Note - All values are in Rs. '000, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. The Board of Directors is responsible for the preparation and presentation of these Financial Statements The Finance Director certifies that the financial statements have been prepared in compliance with the requirements of the Companies Act No.7 of 2007 Mr. A.Karunarathne Managing Director 4th June 2010 3 Mr. J.A.D. Srinath Finance Director
STATEMENT OF CHANGES IN EQUITY - COMPANY Other Accumulated Number of Stated Capital Revenue Profit/ Total Shares Capital Reserve Reserves (Loss) Equity Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Balance as at 1st April 2008 1,677,800 16,778 15,717 11,416 85,682 129,593 Net Profit for the Period (15,029) (15,029) Dividend Paid - - - - (5,033) (5,033) Balance as at 31st March 2009 1,677,800 16,778 15,717 11,416 65,620 109,531 Balance as at 1st April 2009 1,677,800 16,778 15,717 11,416 65,620 109,531 Net Profit for the Period 13,681 13,681 Dividend Paid - - - - - - Balance as at 31st March 2010 1,677,800 16,778 15,717 11,416 79,301 123,212 Note - All values are in Rs. '000, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. 4
STATEMENT OF CHANGES IN EQUITY - GROUP Capital Other Redemption Other Accumulated Number of Stated Capital Revaluation Reserve General Revenue Profit/ Total Shares Capital Reserves Reserves Fund Reserve Reserves (Loss) Equity Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Balance as at 1st April 2008 1,652,800 16,528 16,517 2,396 312 455 11,416 81,846 129,470 Revaluation Surplus 15,884 15,884 Profit for the Period - - - - - - (21,574) (21,574) Transferred (152) 152 - Dividend Paid (4,721) (4,721) Balance as at 31st March 2009 1,652,800 16,528 16,517 18,128 312 455 11,416 55,703 119,059 Balance as at 1st April 2009 1,652,800 16,528 16,517 18,128 312 455 11,416 55,703 119,059 Profit for the Period - - - - - - 13,088 13,088 Dividend Paid - - Balance as at 31st March 2010 1,652,800 16,528 16,517 18,128 312 455 11,416 68,791 132,147 Note - All values are in Rs. '000, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. 5
CONSOLIDATED CASH FLOW STATEMENT Company Group For the Period ended 31st March 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 CASH FLOWS FROM OPERATING ACTIVITIES: Net Profit/( Loss) before Taxation 13,681 (13,565) 12,483 (26,184) Adjustments for Finance Cost 8,958 27,493 14,153 35,357 Dividend Received (9) (52) (9) (177) Depreciation 21,000 19,043 24,488 23,176 Provision for Defined Benefit Plan 190 1,779 385 2,017 Profit /Loss on sale of Property, Plant & Equipment (1,858) (4,267) (1,858) (4,267) Operating Profit/(Loss) before Working Capital Changes 41,962 30,431 49,642 29,922 (Increase)/Decrease in Inventories (122,664) 130,190 (123,222) 129,852 (Increase)/Decrease in Debtors & Other Receivables (188,339) 102,547 (199,454) 104,770 Increase/(Decrease) in Trade & Other Payables 4,686 (31,664) 17,450 (24,128) Cash Generated from Operations (264,355) 231,504 (255,584) 240,416 Finance Cost Paid (8,958) (27,493) (14,153) (35,357) Defined Benefit Plan Cost Paid (190) (92) (254) (114) Tax Paid (2,208) (11,734) (2,265) (11,850) CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES (275,711) 192,185 (272,256) 193,095 CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Acquisition of Property, Plant & Equipment (9,206) (4,925) (10,272) (5,777) Proceeds from sale of Property, Plant & Equipment 1,858 4,266 1,858 4,266 Proceeds from Disposal of Investments 1,780 Acquisition of Investments - (351) Dividend Received 9 52 9 177 NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES (7,339) (607) (6,625) (1,685) 6
CONSOLIDATED CASH FLOW STATEMENT (CONTD/.) Company Group For the Period ended 31st March 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES Repayment of Interest Bearing Loans and Borrowings 139,535 (75,317) (62,217) (76,431) (Net) Repayment of Lease Liabilities (1,144) (850) Dividend Paid - (5,033) - (4,721) NET CASH FLOWS FROM /(USED IN) FINANCING ACTIVITIES 139,535 (81,494) (62,217) (82,002) Net Increase/(Decrease) in Cash & Cash Equivalents (143,515) 110,084 (341,098) 109,408 Cash & Cash Equivalents at the beginning of the Period (7,889) (117,973) (17,138) (126,546) Cash & Cash Equivalents at the end of the Period (151,404) (7,889) (358,236) (17,138) Cash & Cash Equivalents: Cash in hand & at Bank 57,095 77,191 59,351 82,024 Bank Overdrafts (208,499) (85,080) (218,717) (99,162) Cash and Cash Equivalents at the end of the Period (151,404) (7,889) (159,366) (17,138) Note - All values are in Rs. '000, unless otherwise stated. Figures in brackets indicate deductions. The above figures are subject to audit. 7
. NOTES TO THE. For the Quarter ended 31 st March 2010. 1. The interim financial statements of the company and of the group have been prepared on the basis of the same accounting policies and methods applied for the year ended 31 st March 2009 and are in compliance with Sri Lanka Accounting Standard 35 Interim Financial Reporting, further provisions of the new companies Act No. 7 of 2007 have been considered in preparing the interim financial statements of the company and of the group. 2. The presentation and classification of the financial statements of the previous period have been amended, where relevant, for better presentation and to be comparable with those of the current period. 3. Net assets per share have been calculated, for all periods, based on the Number of Shares in issue as at 31 st March 2009. 4. There have been no events subsequent to the Balance Sheet date, which require discloser in the interim financial statements. 5. During the quarter, there were no changes in contingent liabilities since the last annual balance sheet. 6. All values included in these financial statements are in Rs. 000 unless otherwise stated. 7. The Group does not distinguish its products in to significant components for identifying segments. 8. Market Price per Share for the quarter ended 31 st March 2010 Highest Rs. 235.00 Lowest Rs. 151.00 Last Traded Rs. 151.00 9. Ratios and Percentages Company Group 2010 2009 2010 2009 Debt/Equity Ratio N/A N/A 1 : 0.01 1 : 0.03 Quick Assets Ratio 1 : 0.81 1 : 1. 87 1 : 0.79 1 : 0.81 Interest covers 1 : 7.66-1 : 5.13 - Interest yield N/A N/A N/A N/A Yield to maturity of trade N/A N/A N/A N/A Interest rate of comparable N/A N/A N/A N/A Government Security (N/A represents Not Applicable) 8
. NOTES TO THE. For the Quarter ended 31 st March 2010. 10. Major Shareholders and percentages of holdings Name No. of shares % of holding J.B.L. de Silva 462,604 27.57 H.J. de Silva 230,102 13.70 Mrs. C.I. Thilakarathne 216,952 12.93 C.S.J. De Silva 203,302 12.12 N.S. Karunaratne 180,416 10.75 Eamel Exports Ltd. 100,000 5.96 S. De A. Rajapakse 42,000 2.50 A. Karunaratne 40,800 2.43 M. De A. Rajapakse 28,000 1.67 Mrs. D.E. Perera 28,000 1.19 Charitable Trust 20,000 0.83 Dr. E.D. Rodrigo 14,000 0.60 N.K.I. Tilakaratna 10,024 0.60 Mrs. K.A.G. Ranasinghe 10,000 0.40 H.M. Udeshi 6,667 0.30 Ms. N.D. Jayasekera 5,000 0.27 A.H. Rodrigo 4,600 0.26 M.B. Gunathilake 4,000 0.23 U.W.R.M. Weerakoon 4,000 0.23 I. De Zoysa 4,000 0.23. 11. Director s Shareholding No. of shares % of holding Mr. J.B.L de Silva Chairman 462,604 27.57 Mr. A.Karunarathne - Managing Director 40,800 2.43 Mr. N.K.L.Thilakarathne 10,024 0.60 Mr. S A. Chandrarathne 500 0.03 Mrs. C.I.Thilakarathne 216,952 12.93 Mr. S Jayakody 3,334 0.20 12. The public holding percentage was 12.13% as at end of the quarter. 9
. NOTES TO THE. For the Quarter ended 31 st March 2010. 10. Major Shareholders and percentages of holdings Name No. of shares % of holding J.B.L. de Silva 462,604 27.57 H.J. de Silva 230,102 13.70 Mrs. C.I. Thilakarathne 216,952 12.93 C.S.J. De Silva 203,302 12.12 N.S. Karunaratne 180,416 10.75 Eamel Exports Ltd. 100,000 5.96 S. De A. Rajapakse 42,000 2.50 A. Karunaratne 40,800 2.43 M. De A. Rajapakse 28,000 1.67 Mrs. D.E. Perera 28,000 1.19 Charitable Trust 20,000 0.83 Dr. E.D. Rodrigo 14,000 0.60 N.K.I. Tilakaratna 10,024 0.60 Mrs. K.A.G. Ranasinghe 10,000 0.40 H.M. Udeshi 6,667 0.30 Ms. N.D. Jayasekera 5,000 0.27 A.H. Rodrigo 4,600 0.26 M.B. Gunathilake 4,000 0.23 U.W.R.M. Weerakoon 4,000 0.23 I. De Zoysa 4,000 0.23. 11. Director s Shareholding No. of shares % of holding Mr. J.B.L de Silva Chairman 462,604 27.57 Mr. A.Karunarathne - Managing Director 40,800 2.43 Mr. N.K.L.Thilakarathne 10,024 0.60 Mr. S A. Chandrarathne 500 0.03 Mrs. C.I.Thilakarathne 216,952 12.93 Mr. S Jayakody 3,334 0.20 12. The public holding percentage was 12.13% as at end of the quarter. 9
CORPORATE INFORMATION Name of company Eastern Merchants PLC Legal Form Public Limited Liability Company Incorporated in Sri Lanka Ordinary Shares listed on the Colombo Stock Exchange. Directors Mr. J.B.L de Silva - Chairman Mr. A.Karunarathne - Managing Director Mr. N.K.L.Thilakarathne Mr. S A. Chandrarathne Mr. M.D.A.Rajapakse Mrs. C.I.Thilakarathne Mr. S Jayakody Secretary Mr. S.Jayakody Auditors D.H.P.Munaweera & Co Chartered Accountants N0. 5/6, Police Park Terrace, Off Police Park Avenue, Colombo 05. Bankers HSBC PLC Seylan Bank PLC Hatton National Bank PLC Nations Trust bank PLC National Development Bank PLC 10