INTERIM FINANCIAL STATEMENTS
For the nine months ended September 30, 2022
COMMERCIAL DEVELOPMENT COMPANY PLC
STATEMENT OF COMPREHENSIVE INCOME | 02 | ||||||||
For the Nine Months Ended | For the Quarter Ended | ||||||||
September 30, | September 30, | Change | September 30, | September 30, | Change | ||||
2022 | 2021 | 2022 | 2021 | ||||||
Note | Rs. 000 | Rs. 000 | % | Rs. 000 | Rs. 000 | % | |||
Revenue | 4 | 466,147 | 485,403 | (4.0) | 163,859 | 165,215 | (0.8) | ||
Cost of Sales | 8 | (237,896) | (291,587) | (18.4) | (79,742) | (74,749) | 6.7 | ||
Gross Profit | 228,251 | 193,816 | 17.8 | 84,117 | 90,466 | (7.0) | |||
Other Income | 2,001 | 36 | 5,458.3 | 64 | 25 | 156.0 | |||
230,252 | 193,852 | 18.8 | 84,181 | 90,491 | (7.0) | ||||
Administrative Expenses | (27,347) | (24,735) | 10.6 | (8,128) | (7,477) | 8.7 | |||
Operating Profit | 202,905 | 169,117 | 20.0 | 76,053 | 83,014 | (8.4) | |||
Net Finance Income | 39,682 | 22,311 | 77.9 | 19,199 | 8,261 | 132.4 | |||
Profit before Tax | 242,587 | 191,428 | 26.7 | 95,252 | 91,275 | 4.4 | |||
Income Tax (Expense)/Reversal | 5 | (58,498) | 6,144 | (1,052.1) | (22,849) | (22,028) | 3.7 | ||
Profit for the period attributable to Owners of the Company | 184,089 | 197,572 | (6.8) | 72,403 | 69,247 | 4.6 | |||
Other Comprehensive Income, Net of Tax | |||||||||
Net change in fair value of Debt investments at FVOCI | (1,728) | - | - | 684 | - | - | |||
Related Tax | 415 | - | - | (164) | - | - | |||
Other Comprehensive Income/(Expense) for the period Net of Tax | (1,313) | - | - | 520 | - | - | |||
Total Comprehensive Income for the period, Net of Tax | 182,776 | 197,572 | (7.5) | 72,923 | 69,247 | 5.3 | |||
Earnings per Share (Rs.) | 15.34 | 16.46 | (6.8) | 6.03 | 5.77 | 4.6 |
The above figures are provisional and subject to audit unless indicated as audited.
Explanatory Notes
- Financial Statements of the Company have been prepared in accordance with the Sri Lanka Accounting Standards (SLFRSs/LKASs) issued by The Institute of Chartered Accountants of Sri Lanka. There were no changes in the Accounting Policies and methods of computation since the publication of the Annual Report for the year ended December 31, 2021.
- These Interim Financial Statements are presented in accordance with the requirements of the Sri Lanka Accounting Standard - LKAS - 34 on ''Interim Financial Reporting'' and provide the information as required in terms of Rule 7.4 of the Colombo Stock Exchange.
- During the quarter, there were no material changes in the composition of assets and liabilities.
- The drop in revenue compared to the corresponding period of the last year was due to discontinuation of sanitization business. The income from sanitization business for the quarter/nine months ended September 30, 2021 amounted to Rs.22.2 Mn and Rs.53.7 Mn. respectively.
- The credit balance in the income tax expense reported for the nine months ended September 30, 2021, was due to the reversal of income tax provision as at December 31, 2020, consequent to the reduction in the income tax rate from 28% to 24% as announced in the Government Budget Proposals for 2021. Accordingly, current tax reversal for the year ended December 31, 2020, amounting to Rs.7,921,015/- and deferred tax reversal as at December 31, 2020, amounting to Rs. 44,547,695/- had been recognized in the income tax expense for the nine months ended September 30, 2021.
-
Related Party Transactions
( a ) Mr.S.C.U.Manatunge, Managing Director of the Company is also the Managing Director of Commercial Bank of Ceylon PLC, the sole tenant and the parent of the Company. Mr.U.I.S.Tillakawardana, Director of the Company functions as the Deputy General Manager - Human Resources Management of the Commercial Bank of Ceylon PLC. During the quarter ended September 30, 2022, the Company received Rs. 162,368,665/- as rental, income from outsourcing services, vehicle hiring charges and other utility services from Commercial Bank of Ceylon PLC (Rs.163,812,972/- during the quarter ended September 30, 2021).
( b ) Mr.U.I.S.Tillakawardana, a Director of the Company is also a Director of Commercial Insurance Brokers (Pvt) Ltd, a subsidiary of the Parent Company which acts as one of the insurance advisers to the Company. During the quarter, the Company paid Rs.6,653,626/- as Insurance premium to Insurance Companies through Commercial Insurance Brokers (Pvt) Ltd (Rs.7,340,514/- was paid during the quarter ended September 30, 2021). Out of the insurance premium of Rs.6,653,626/-, Rs.5,460,209/- was paid to Continental Insurance Lanka Ltd, wherein Mr.A.L.Gooneratne, a Director of the Company functions as a Director (Rs.7,309,209 out of Rs.7,340,514/- for the quarter ended September 30, 2021).
( c ) As at the reporting date, the Company has invested Rs.523,626,374/- in Fixed Deposits (inclusive of interest) at market interest rates at CBC Finance Limited, which is a fully owned subsidiary of the Parent. - All known expenses have been provided for in these Interim Financial Statements.
-
There were no material events that took place since September 30, 2022, that require disclosure in these Interim Financial Statements, except that the Company has planned to renovate the Commercial House Building. The renovation project could not be commenced as planned in the third quarter of 2022 due to excessive prices quoted by the prospective contractors. However, the Company is keen to start the project as soon as possible by exploring alternative ways to minimize the cost.
It is pertinent to mention that the increase in cost of sales for the nine months ended September 30, 2021 included a provision made on account of above mentioned renovation of Commercial House building amounting to Rs.60 Mn during the second quarter of 2021. However, the expected renovations could not be carried out due to the pandemic.
STATEMENT OF COMPREHENSIVE INCOME | 03 |
9 The Government of Sri Lanka in its Budget for 2022 proposed a one-time tax, referred to as a Surcharge Tax, at the rate of 25% to be imposed on any individual, partnership, company or each company of a group of companies (holding and subsidiaries) that have earned a taxable income in excess of Rs.2,000 million for the year of assessment 2020/2021.
Being part of the Commercial Bank of Ceylon PLC Group, the Company was liable for Surcharge Tax of Rs. 50.6 Mn. According to the provisions of Surcharge Tax Act No. 14 of 2022, the Surcharge tax shall be deemed to be an expenditure in the financial statements relating to the year of assessment which commenced on April 01,2020. The Act supersedes the requirements of the Sri Lanka Accounting Standards and hence the expense of Surcharge tax is accounted in accordance with the requirements of the said Act as recommended by the Statement of Alternative Treatment (SoAT) on Accounting for Surcharge Tax issued by the Institute of Chartered Accountants of Sri Lanka, in April 2022.
The Company paid Rs.50,556,342/- as Surcharge Tax in two equal installments in April and July 2022.
10 There were no contingent assets, contingent liabilities or capital commitments outstanding as at the Reporting date except that a case was filed against the Company by a former employee at the Labour Tribunal, Negombo. The Labour Tribunal ordered that the said employee be compensated with Rs. 2,034,000/- . The Company has appealed against this order to the High Court.
No provision is made in these Interim Financial Statements in respect of the above claim as the lawyers are of the opinion that the outcome of the appeal to the High Court is more likely to be favorable to the Company and the likelihood of the payment is remote.
STATEMENT OF FINANCIAL POSITION | 04 | |||
As at | As at | Change | ||
September 30, | December 31, | |||
2022 | 2021 | |||
(Audited) | ||||
ASSETS | Rs.'000 | Rs.'000 | % | |
Non-Current Assets | ||||
Property, Plant & Equipment | 143,562 | 90,897 | 57.94 | |
Intangible Assets | 2,290 | 2,762 | (17.09) | |
Investment Property | 2,966,713 | 2,966,713 | - | |
Deposits Receivable | 10,948 | 10,857 | 0.84 | |
3,123,513 | 3,071,229 | 1.70 | ||
Current Assets | ||||
Trade and Other Receivables | 48,837 | 43,011 | 13.55 | |
Financial Investments | 640,861 | 565,585 | 13.31 | |
Cash and Cash Equivalents | 144,175 | 105,524 | 36.63 | |
833,873 | 714,120 | 16.77 | ||
Total Assets | 3,957,386 | 3,785,349 | 4.54 | |
EQUITY AND LIABILITIES | ||||
Equity | ||||
Stated Capital | 120,000 | 120,000 | - | |
Other Reserves | 2,416,851 | 2,418,164 | (0.05) | |
Retained Earnings | 874,732 | 789,199 | 10.84 | |
Total Equity | 3,411,583 | 3,327,363 | 2.53 | |
Non-Current Liabilities | ||||
Deposits Payables | 56,617 | 54,492 | 3.90 | |
Employee Benefits | 57,025 | 50,966 | 11.89 | |
Lease Creditors | 73,262 | 14,374 | 409.68 | |
Deferred Tax | 262,392 | 263,159 | (0.29) | |
449,296 | 382,991 | 17.31 | ||
Current Liabilities | ||||
Trade and Other Payables | 35,643 | 16,958 | 110.18 | |
Lease Creditors | 15,471 | 5,080 | 204.55 | |
Deferred Revenue | 7,470 | 10,566 | (29.30) | |
Current Tax | 37,923 | 42,391 | (10.54) | |
96,507 | 74,995 | 28.68 | ||
Total Equity and Liabilities | 3,957,386 | 3,785,349 | 4.54 | |
Net Assets Value Per Ordinary Share (Rs.) | 284.30 | 277.28 | 2.53 | |
The above figures are provisional and subject to audit unless indicated as audited.
I certify that these Financial Statements have been prepared in accordance with the requirements of the Companies Act No.07 of 2007 and amendments thereto.
(Sgd.)
W.H. Wijesekara
Accountant
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
(Sgd.) | (Sgd.) |
B.R.L. FERNANDO | S.C.U.MANATUNGE |
CHAIRMAN | MANAGING DIRECTOR |
October 25, 2022 |
STATEMENT OF CHANGES IN EQUITY | 05 | ||||||
Stated | Other Reserves | Retained | Total | ||||
Capital | Fair Value | Fair Value | Earnings | Equity | |||
Reserve - | Reserve - | ||||||
Investment | Financial | ||||||
Property | Assets | ||||||
Rs.'000 | Rs.'000 | Rs.'000 | Rs.'000 | Rs.'000 | |||
Balance as at January 1, 2021 | 120,000 | 2,287,444 | - | 587,661 | 2,995,105 | ||
Total Comprehensive Income for the nine months ended September 30, 2021 | |||||||
Profit for the nine months ened September 30, 2021 | - | - | - | 197,572 | 197,572 | ||
Other Comprehensive Income for the nine months ended September 30, 2021 | - | - | - | - | - | ||
- | - | - | 197,572 | 197,572 | |||
Transaction with equity holders, recognized directly in equity | |||||||
Final Dividend for 2020 | - | - | - | (42,000) | (42,000) | ||
Transfer of Deferred Tax reversal consequent to change in the Income Tax rate | - | 38,398 | - | (38,398) | - | ||
Balance as at September 30, 2021 | 120,000 | 2,325,842 | - | 704,835 | 3,150,677 | ||
Total Comprehensive Income for the three months ended December 31, 2021 | |||||||
Profit for the three months ended December 31, 2021 | - | - | - | 203,934 | 203,934 | ||
Other Comprehensive Income for the three months ended December 31, 2021 | - | - | (185) | 2,621 | 2,436 | ||
- | - | (185) | 206,555 | 206,370 | |||
Transaction with equity holders, recognized directly in equity | |||||||
Interim Dividend for 2021 | - | - | - | (30,000) | (30,000) | ||
Write back of Unclaimed Dividends | - | - | - | 316 | 316 | ||
Transfer of Fair Value Gain on Investment Property | - | 92,507 | - | (92,507) | - | ||
Balance as at December 31, 2021 - Audited | 120,000 | 2,418,349 | (185) | 789,199 | 3,327,363 | ||
Balance as at January 01, 2022 | 120,000 | 2,418,349 | (185) | 789,199 | 3,327,363 | ||
Surcharge Tax for the year 2020 | - | - | - | (50,556) | (50,556) | ||
Adjusted Balance as at January 01, 2022 | 120,000 | 2,418,349 | (185) | 738,643 | 3,276,807 | ||
Total Comprehensive Income for the nine months ended September 30, 2022 | |||||||
Profit for the nine months ened September 30, 2022 | - | - | - | 184,089 | 184,089 | ||
Other Comprehensive Income for the nine months ended September 30, 2022 | - | - | (1,313) | - | (1,313) | ||
- | - | (1,313) | 184,089 | 182,776 | |||
Transaction with equity holders, recognized directly in equity | |||||||
Final Dividend for 2021 | - | - | - | (48,000) | (48,000) | ||
Balance as at September 30, 2022 | 120,000 | 2,418,349 | (1,498) | 874,732 | 3,411,583 |
The above figures are provisional and subject to audit unless indicated as audited.
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Commercial Development Company plc published this content on 25 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2022 10:53:01 UTC.