1. No category

First Capital Holdings PLC
REVIEW OF OPERATIONS
First Capital Group recorded a profit after tax of Rs. 1.09Bn for the 9 months ended 31st December 2014, reflecting a significant
growth over the previous year (2013/14 - Rs. 263Mn). Favourable macro-economic conditions created an attractive government
securities market. Capitalizing on continuous declines in the secondary market interest rates, the Primary Dealer unit realized
trading gains of Rs. 905Mn during the 9 months under review (2013/14 - Rs. 145Mn). First Capital Treasuries continued to
retain its position as market leader among the Non-Banking Primary Dealer segment.
The Corporate Debt unit increased its contribution to Group results during the period, structuring and placing Rs. 19Bn in
corporate debt securities and earning corresponding fee income of over Rs. 112Mn(2013/14 - Rs. 26Mn). First Capital
outperformed competitors, managing debenture issues of Rs. 9.4Bn and becoming the leading listed debenture manager for
the nine months ended 31 December 2014.
First Capital was also the leading intermediary in the secondary market for listed debentures via the DEX for the period under
review.
The Wealth Management unit continued its strong performance during the period, with funds under management increasing
four-fold to Rs. 4.2Bn. First Capital Wealth Fund continued to be the best performing fixed income unit trust fund in Sri Lanka
for the year 2014.
The Stock Broking and Margin Trading units also contributed positively during the period under review.
First Capital Holdings PLC also recorded a one off gain of Rs. 233Mn due to the acquisition of an additional 5% stake in Orient
Finance PLC, which is treated as an investment in an associate. The group’s stockbroking arm First Capital Equities (Private)
Limited became a fully owned subsidiary in November 2014.
First Capital Treasuries Limited, the Primary Dealer unit of the Group enhanced its long term capital base (Tier II) by way of a
listed debenture issue of Rs. 500Mn in January 2015, which was fully subscribed on the same day. Consequently, the unit’s
capital adequacy is in a robust position and First Capital Treasuries is well positioned to take advantage of future trading
opportunities.
The Group will continue to focus on fee based activities as we journey towards achieving our vision of becoming Sri Lanka’s
leading investment bank.
(Sgd.)
Dilshan Wirasekara
Chief Executive Officer
01
First Capital Holdings PLC
01
STATEMENT OF COMPREHENSIVE INCOME
For the period
Note
Income
Group
October ~ December
April ~ December
2014
2013
2014
2013
Unaudited
Unaudited
Unaudited
Unaudited
849,162
417,134
2,548,109
1,326,965
606,769
(210,230)
396,539
415,792
(271,231)
144,561
2,305,005
(854,013)
1,450,992
1,320,840
(923,163)
397,677
242,393
1,342
243,104
6,125
(406,726)
111,183
(115,805)
81,634
23,407
255,613
(7,050)
250,036
(43,124)
1,535,167
9,932
495,368
(74,137)
(5,100)
(944)
(4,371)
(84,552)
(59,785)
(4,760)
(15,984)
(2,158)
(82,687)
(285,601)
(51,327)
(1,424)
(16,485)
(354,837)
(161,633)
(7,541)
(22,649)
(7,262)
(199,085)
Operating profit
171,061
167,349
1,180,330
296,283
Share of profit of equity-accounted investee (net of tax)
Profit before taxation
3,738
174,799
167,349
3,738
1,184,068
296,283
48,598
146
(92,048)
(33,375)
223,397
167,495
1,092,020
262,908
226,163
(2,766)
223,397
158,685
8,810
167,495
1,048,400
43,620
1,092,020
248,581
14,327
262,908
(41,625)
(2,312)
20,812
(23,125)
(233,285)
-
(233,285)
-
(1,794)
-
(1,794)
-
Other comprehensive expense, net of income tax
(276,704)
(2,312)
(214,267)
(23,125)
Total comprehensive income/ (expense) for the period
(53,307)
165,183
877,753
239,783
(50,541)
(2,766)
(53,307)
156,373
8,810
165,183
834,133
43,620
877,753
225,456
14,327
239,783
Earnings per share (Rs.)
2.23
1.57
10.35
2.46
Dividend per share (Rs.)
-
-
2.00
2.00
Direct income
Direct expenses
Net trading income
Other income
1
Gain/(loss) on fair valuation of financial
investments - held for trading
Gain/(loss) on fair valuation of derivative
financial instruments
Less :
Administrative expenses
Sales and distribution expense
Specific allowance for impairment
Other operating expense
Income tax (expense)/ reversal
2
Profit for the period
Attributable to:
Equity - holders of the parent
Non - controlling interest
Other comprehensive income/ (expense),
net of income tax
Gain/ (loss) on fair valuation of financial
investments - available for sale
Transfer of fair valuation reserve of financial
investment - available for sale
1.2
Share of other comprehensive expense of
equity-accounted investee (net of tax)
Attributable to:
Equity - holders of the parent
Non - controlling interest
Figures in bracket indicate deductions.
Note: All values are in Rupees ‘000 unless otherwise stated.
First Capital Holdings PLC
02
STATEMENT OF COMPREHENSIVE INCOME
For the period
Note
Company
October ~ December
2014
2013
Unaudited
Unaudited
Income
268,311
26,138
334,630
346,447
Direct income
Direct expenses
Net trading income/(expense)
34,855
(36,577)
(1,722)
26,099
(25,164)
935
98,718
(102,884)
(4,166)
50,054
(46,176)
3,878
233,456
231,734
39
974
235,912
231,746
296,393
300,271
(1,254)
(1,257)
(2,511)
(1,152)
(14)
(1,166)
(5,175)
(70)
(103)
(5,348)
(5,408)
(122)
(5,530)
229,223
(192)
226,398
294,741
-
-
-
-
Profit/(loss) for the period
229,223
(192)
226,398
294,741
Other comprehensive income/(expense),
net of income tax
Gain/ (loss) on fair valuation of financial
investments - available for sale
(41,625)
(2,312)
20,812
(23,125)
Transfer of fair valuation reserve of financial
investment - available for sale
1.2
(233,285)
-
(233,285)
-
Other comprehensive expense,
net of income tax
(274,910)
(2,312)
(212,473)
(23,125)
(45,687)
(2,504)
13,925
271,616
Earnings per share (Rs.)
2.26
-
2.24
2.91
Dividend per share (Rs.)
-
-
2.00
2.00
Other income
1
Less :
Administrative expenses
Sales and distribution expenses
Other operating expense
Profit/(loss) before taxation
Income tax expense
Total comprehensive income/(expense)
for the period
Figures in bracket indicate deductions.
Note: All values are in Rupees ‘000 unless otherwise stated.
03
April ~ December
2014
2013
Unaudited
Unaudited
First Capital Holdings PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31-Dec -2014
Unaudited
As at
Group
31-Dec-2013
31-Mar-2014
Unaudited
Audited
Company
31-Dec-2014
31-Dec-2013
Unaudited
Unaudited
31-Mar-2014
Audited
ASSETS
Cash at banks and in hand
35,654
Derivative financial instruments
1,080
Financial investments - Held for trading
10,825,905
Financial investments - Available for sale
2,000
Financial investments - Loans and receivables
2,973,390
Trade and other receivables
635,604
Group balances receivable
Non - current assets held for sale
45,416
Tax receivables
60,898
Investment in venture capital
6,000
Investment in equity accounted investee (Note 3)
407,145
Investment in subsidiary company
Deferred tax asset
37,211
Property, plant and equipment
31,184
Intangible assets
115,113
Total Assets
15,176,600
35,736
29,848
12,250,249
323,438
2,094,311
494,333
42,416
5,684
6,000
60,880
56,172
113,809
15,512,876
38,298
19,844
11,639,241
304,938
3,276,554
755,567
65
45,416
62,549
6,000
48,173
51,516
112,770
16,360,931
7,419
1,000
2,170,972
5,600
6,000
405,201
311,072
686
2,907,950
3,703
322,438
1,029,866
90,562
2,750
5,684
6,000
310,872
2,333
1,774,208
4,330
303,938
1,480,091
263,663
5,600
6,000
310,872
1,921
2,376,415
31,409
24,360
9,700,359
1,848,322
406,218
1,381
21,981
498,584
12,532,614
4,267
10,374
12,164,056
1,145,288
174,193
17,191
13,515,369
7,775
12,368,398
1,052,435
432,032
19,040
452,248
14,331,928
1,557,365
7,547
73,923
498,584
2,137,419
2,454
956,344
12,813
635
972,246
2,184
899,176
13,325
502,624
1,417,309
227,500
871,034
1,459,954
2,558,488
85,498
2,643,986
227,500
620,330
821,963
230,973
1,900,766
96,741
1,997,507
227,500
648,793
859,019
212,473
1,947,785
81,218
2,029,003
227,500
543,031
770,531
770,531
227,500
343,489
230,973
801,962
801,962
227,500
519,133
212,473
959,106
959,106
15,176,600
15,512,876
16,360,931
2,907,950
1,774,208
2,376,415
LIABILITIES
Bank overdrafts
Derivative financial instruments
Securities sold under re-purchase agreements
Short term borrowings
Group balances payable
Trade and other payables
Tax payables
Retirement benefit obligations
Borrowings on debentures
Total Liabilities
EQUITY
Stated capital
Capital reserves
Retained earnings
Fair valuation reserve
Equity attributable to the equity holders of the parent
Non - controlling interests
Total Equity
Total Equity and Liabilities
Note: All values are in Rupees ‘000 unless otherwise stated.
The above figures are subject to audit.
These financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.
(Sgd.)
Mangala Jayashantha
Chief Financial Officer
The Board of Directors is responsible for the preparation and presentation of these financial statements.
(Sgd.)
Manjula Mathews (Ms.)
Chairperson
10 February 2015
Colombo
03
(Sgd.)
Dinesh Schaffter
Managing Director
First Capital Holdings PLC
04
STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2014
Attributable to equity holders of parent
Stated
Capital
Capital
Reserves
Retained
Earnings
Fair
Valuation
Reserve
Total
Non controlling
Interest
Total
Equity
As at 1 April 2013 (Audited)
227,500
Profit for the period
Other comprehensive expense, net of tax
Dividend paid
Adjustment due to acquisition
Transfer to capital reserve
As at 31 December 2013
227,500
553,704
66,626
620,330
842,508
248,581
(202,500)
(66,626)
821,963
254,098
(23,125)
230,973
1,877,810
248,581
(23,125)
(202,500)
1,900,766
77,348
14,327
(16,554)
21,620
96,741
1,955,158
262,908
(23,125)
(219,054)
21,620
1,997,507
As at 1 April 2014 (Audited)
227,500
Profit for the period
Other comprehensive expense, net of tax
Dividend paid
Adjustment due to acquisition
Transfer to capital reserve
As at 31 December 2014
227,500
648,793
222,241
871,034
859,019
1,048,400
(1,794)
(202,500)
(20,930)
(222,241)
1,459,954
212,473
(212,473)
-
1,947,785
1,048,400
(214,267)
(202,500)
(20,930)
2,558,488
81,218
43,620
(35,070)
(4,270)
85,498
2,029,003
1,092,020
(214,267)
(237,570)
(25,200)
2,643,986
Group
For the period ended 31 December 2014
Company
Stated
Capital
Retained
Earnings
Fair Valuation
Reserve
Total
Equity
As at 1 April 2013 (Audited)
Profit for the period
Other comprehensive income, net of tax
Dividend paid
As at 31 December 2013
227,500
227,500
251,248
294,741
(202,500)
343,489
254,098
(23,125)
230,973
732,846
294,741
(23,125)
(202,500)
801,962
As at 1 April 2014 (Audited)
Profit for the period
Other comprehensive expense, net of tax
Dividend paid
As at 31 December 2014
227,500
227,500
519,133
226,398
(202,500)
543,031
212,473
(212,473)
-
959,106
226,398
(212,473)
(202,500)
770,531
Figures in bracket indicate deductions.
Note: All values are in Rupees ‘000 unless otherwise stated.
05
First Capital Holdings PLC
04
CASH FLOW STATEMENT
For the period
Cash flows from operating activities
Interest receipts and gains realised
Interest payments and other direct cost
Other receipts
Cash payments to employees and suppliers
Operating profit / (loss) before changes in operating
assets and liabilities
(Increase)/decrease in financial investments
(Held for trading / loans and receivables)
(Increase) / decrease in trade and other recievables
(Increase) / decrease in group balances receivable
Increase / (decrease) in trade and other payables
Increase / (decrease) in group balances payable
Increase / (decrease) in short term borrowings
Increase/ (decrease) in borrowings under
re-purchase agreements
Cash generated from operations
Group
April - December
2014
2013
Unaudited
Unaudited
Company
April - December
2014
2013
Unaudited
Unaudited
2,298,695
(975,106)
8,049
(330,357)
1,319,231
(824,616)
1,953
(159,277)
34,700
(51,359)
546
(4,113)
50,054
(46,176)
39
(4,294)
1,001, 281
337,291
(20,226)
(377)
1,000,695
124,850
65
73,276
795,887
(645,597)
83,241
1,226
(109,931)
565,817
(690,881)
327,681
5,033
7,545
658,189
(860,345)
(88,386)
10,148
419
845,277
(2,668,039)
328,015
294,213
526,260
287,341
(93,264)
Tax paid
Gratuity paid
Net cash flow from operating activities
Cash flow from investing activities
Purchase of property, plant, equipment and intangible assets
Investment in equity - accounted investee
Investment in subsidiary companies
Sale of property plant and equipment
Dividend receipts
Net cash flow from investing activities
(59,717)
(494)
267,804
(72,371)
453,889
287,341
(93,264)
(6,860)
(81,451)
(25,200)
4,500
2,499
(106,512)
(35,504)
(185,000)
10
4,162
(216,332)
(81,451)
(200)
2,083
(79,568)
296,354
296,354
Cash flows from financing activities
Dividend paid
Dividend paid to shareholders with non - controlling interest
Borrowings on Debentures
Net cash flow from financing activities
(202,500)
(35,070)
50,000
(187,570)
(202,500)
(16,554)
(219,054)
(202,500)
(202,500)
(202,500)
(202,500)
(26,278)
30,523
4,245
18,503
12,966
31,469
5,273
2,146
7,419
590
659
1,249
38,298
(7,775)
30,523
18,304
(5,338)
12,966
4,330
(2,184)
2,146
659
659
35,654
(31,409)
4,245
35,736
(4,267)
31,469
7,419
7,419
3,703
(2,454)
1,249
Net cash inflow / (outflow) for the period
Cash and cash equivalents at the beginning of the period (Note A)
Cash and cash equivalents at the end of the period (Note B)
Note A
Cash at bank and hand
Bank overdraft
Note B
Cash at bank and hand
Bank overdraft
Figures in bracket indicate deductions.
Note: All values are in Rupees ‘000 unless otherwise stated.
First Capital Holdings PLC
06
NOTES TO THE FINANCIAL STATEMENTS
1.
Other Income (Group)
For the period
October - December
2014
2013
Rs.’000
Rs.’000
Gain on disposal of Financial Investment -Available for sale (Note 1.1) 233,285
Dividend income
416
Miscellaneous income
8,692
1,342
242,393
1,342
Other Income (Company)
For the period
October - December
2014
2013
Rs.’000
Rs.’000
Gain on disposal of Financial Investment -Available for sale (Note 1.1) 233,285
Dividend income
Miscellaneous income
171
39
233,456
39
April - December
2014
2013
Rs.’000
Rs.’000
233,285
2,499
4,162
7,320
1,963
243,104
6,125
April - December
2014
2013
Rs.’000
Rs.’000
233,285
2,083
296,354
544
39
235,912
296,393
1.1 The Company’s 20% investment in Orient Finance PLC had been recorded as “Financial Investments -Available for Sale”.
Consequent to the acquisition of an additional stake of 5% in October 2014, the total investment has been classified as
“Investment in Equity- accounted Investee.” Accordingly, the previous holding is considered as a deemed disposal of
Financial Investments -Available for sale and resulting excess has been treated as a gain in the Statement of
Comprehensive Income.”
1.2 The transfer of fair valuation reserve of Rs. 233.3Mn relates to financial investments-available for sale which have been
classified as Investment in equity - accounted investee.
2.
Income Tax Expenses (Group)
For the period
Current tax (expense)/ reversal
Deferred tax expenses
Taxes on Dividend
3
October - December
2014
2013
Rs.’000
Rs.’000
(53,159)
(95)
4,437
(51)
124
(48,598)
(146)
April - December
2014
2013
Rs.’000
Rs.’000
21,370
3,743
10,961
2,015
59,717
27,617
92,048
33,375
Investment in equity accounted investee
Orient Finance PLC became an Equity accounted Investee of First Capital Holdings PLC with the acquisition of additional
stake of 5% at a cost of Rs. 81.4 Mn in October 2014.
The Goodwill arosed on the acquisition of said investee company is derived as follows.
Cost of the acquisition
Less;
Net Assets acquired (25%)
Goodwill on acquisition
07
First Capital Holdings PLC
Rs.’000
405,201
(219,350)
185,851
NOTES TO THE FINANCIAL STATEMENTS
4
Net Assets per Share
Group
Company
5
31-12-2014
Rs.
31-12-2013
Rs.
31-03-2014
Rs.
25.27
7.61
18.77
7.92
19.24
9.47
31-12-2014
Rs.
31-12-2013
Rs.
31-03-2014
Rs.
58.60
44.10
47.00
17.70
14.30
17.50
21.60
11.00
19.30
Market Price per Share
Highest market price recorded
Lowest market price recorded
Closing market price recorded
6
The above figures are provisional and subject to audit. The same accounting policies as in the Annual Report for the year
ended 31 March 2014 have been followed in the preparation of the above interim financial statements.
7
The presentation and classification of figures for the corresponding period of the previous year have been reclassified
to be comparable with those of the current year where necessary.
8
The number of shares represented by stated capital as at 31 December 2014 is 101,250,000 shares (31 December 2013
- 101,250,000 shares).
9
There have been no significant changes in the nature of the Contingent Liabilities which were disclosed in the Audited
Financial Statements for the year ended 31 March 2014 other than the following:
In December 2014, the Tax Appeals Commission delivered a determination in favour of the Commissioner General of
Inland Revenue with respect to the chargeability of interest income earned by the Company in respect of the year of
assessment 2008/ 09. The assessed tax liability is Rs. 101.3 Mn. The company is in the process of filing an application
with the Court of Appeal and based on legal opinion is of the view that no liability would arise.
10 There have been no material events subsequent to the reporting date which require disclosures/ adjustments in the
interim financial statements other than the following:
First Capital Treasuries Limited offered 5,000,000 listed, rated, subordinated, unsecured, redeemable debentures
at a face value of Rs.100/- each to raise Rs. 500,000,000/- and the debenture issue was fully subscribed on the
opening day.
First Capital Holdings PLC
08
INVESTOR INFORMATION
List of twenty major shareholders
Names of shareholders
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
No. of Shares
as at 31 December 2014
Dunamis Capital PLC
Seylan Bank PLC/ Dunamis Capital PLC
Commercial Bank of Ceylon PLC/ Dunamis Capital PLC
HSBC International Nominees Ltd - SSBT Deustche Bank AG Singapore A/C No. 1
Seylan Bank PLC/ Janashakthi Limited
HSBC International Nominees Limited - UBS AG Singapore Branch (EX SBC)
Janashakthi General Insurance Limited
Mellon Bank N.A. Acadian Frontier Markets Equity Fund
Life Insurance Corporation (Lanka) Limited
Mr. Kankanamge Sunil Dharmabandu Senaweera
Mr. Arunasalam Sithampalam
Mr. Charitha Prasanna De Silva
Mr. Sujeewa Chandana Hiththatiyage
Commercial Bank of Ceylon PLC/ Janashakthi Limited
People’s Leasing & Finance PLC/ HI Line Trading (Private) Limited
Commercial Bank of Ceylon PLC/ Mr. U.C. Bandaranayake
Mr. Sashimaal Ruhash Fernando
Mr. Nagen Dayaranjan Kurukulasuriya
Mr. Danusha Senajit Duke De Lanerolle
Dr. Subashi Nemindi Samarasinghe
Directors’ shareholding
Name of the Director
Ms. Manjula Mathews
Mr. Dinesh Schaffter
Mr. Nihara E. Rodrigo
Mr. Eardley Perera
Ms. Minette Perera
Mr. Nishan Fernando
Mr. Chandana Lal de Silva
No. of Shares
as at 31 December 2014
Nil
Nil
5,000
Nil
Nil
Nil
Nil
Public holding as a percentage of issued share capital is 25.01%.
Number of shareholders representing the public holding is 5,996.
09
First Capital Holdings PLC
45,626,756
25,400,000
4,891,692
2,156,668
1,967,000
1,000,000
858,650
551,305
532,500
410,100
339,000
335,000
310,711
300,703
292,193
250,000
234,374
208,836
203,000
200,616
86,069,104
Holding (%)
45.06
25.09
4.83
2.13
1.94
0.99
0.85
0.54
0.53
0.41
0.33
0.33
0.31
0.30
0.29
0.25
0.23
0.21
0.20
0.20
85.02
INVESTOR INFORMATION
Information on Listed Debentures
Market value per Debenture
31-12-2014
Rs.
31-12-2013
Rs.
31-03-2014
Rs.
3 year fixed rate (13.5% p.a. payable annually)
Highest price
Lowest price
Last traded price
100.10
100.10
100.10
N/A
N/A
N/A
-
4 year fixed rate (13.75% p.a. payable annually)
Highest price
Lowest price
Last traded price
110.10
106.74
110.10
N/A
N/A
N/A
-
5 year fixed rate (14.00% p.a. payable annually)
Highest price
Lowest price
Last traded price
-
N/A
N/A
N/A
-
As at
31-12-2014
4.58
N/A
2.44
As at
31-12-2013
6.66
N/A
1.33
As at
31-03-2014
6.84
N/A
1.34
As at
31-12-2014
2.74
N/A
3.20
As at
31-12-2013
1.19
N/A
7.38
As at
31-03-2014
1.46
N/A
6.50
3 year fixed rate (13.5 % p.a. payable annually )
4 year fixed rate (13.75 % p.a. payable annually )
5 year fixed rate (14.00 % p.a. payable annually )
As at
31-12-2014
13.49%
12.49%
12.69%
As at
31-12-2013
N/A
N/A
N/A
As at
31-03-2014
13.50%
13.75%
14.00%
Yield of comparable government securities (%)
3 Year treasury bond
4 Year treasury bond
5 Year treasury bond
As at
31-12-2014
6.96%
7.13%
7.31%
As at
31-12-2013
N/A
N/A
N/A
As at
31-03-2014
8.27%
8.83%
9.04%
Debt Ratios (Group)
Debt/equity ratio (times)
Quick asset ratio (times)
Interest cover (times )
Debt Ratios (Company)
Debt/equity ratio (times)
Quick asset ratio (times)
Interest cover (times )
Debenture Interest Yield
N /A - Not Applicable
First Capital Holdings PLC
10