Softlogic Finance PlcCSELK: CRL.N0000

Interim Financial Statements for the period ended 31st December 2024

Jan 24, 2025 at 11:40 AM UTC · Issued by Softlogic Finance Plc

SOFTLOGIC FINANCE PLC

INTERIM FINANCIAL STATEMENTS

For the Quarter ended 31st December 2024

( Company Registration No: PB641PQ )

JFI Tower III, Zone B&C, No 75, Piyadasa Sirisena Mawatha, Colombo 10.

SOFTLOGIC FINANCE PLC				Page 2
STATEMENT OF COMPREHENSIVE INCOME
09 MONTHS PERIOD ENDED
				Rs.

	03 Months Period ended	09 Months Period ended
	31st December	31st December

	2024	2023	2024	2023
	Unaudited	Unaudited	Unaudited	Unaudited
Income	319,164,871	577,648,132	1,259,171,958	2,212,074,532
Interest income	285,109,634	524,203,250	960,399,185	2,074,860,450
Interest expenses	(178,777,453)	(585,902,877)	(669,317,807)	(2,411,687,636)
Net interest income	106,332,182	(61,699,627)	291,081,379	(336,827,187)
Fee and commission income	28,784,941	13,216,218	69,452,052	43,128,064
Profit /(loss) from derecognition of financial assets	-	-	207,629,087	-
Other operating income	5,270,296	40,228,663	21,691,634	94,086,019
Total operating income	140,387,418	(8,254,745)	589,854,152	(199,613,104)
Impairment (charge)/ reversal for loans and other losses	92,733,042	(397,995,389)	149,627,415	(482,198,637)
Net Operating Income	233,120,460	(406,250,134)	739,481,567	(681,811,741)
Operating expenses
Personnel costs	(75,574,230)	(92,708,389)	(222,203,177)	(308,324,657)
Depreciation of property, plant and equipment	(3,520,482)	(7,075,375)	(10,451,515)	(22,154,303)
Amortization of intangible assets	(4,827,220)	(4,749,369)	(14,416,533)	(14,234,607)
Other operating expenses	(124,758,578)	(128,644,867)	(384,183,613)	(531,322,186)
Operating profit / (Loss) before Value Added Tax on financial services	24,439,951	(639,428,135)	108,226,729	(1,557,847,495)

VAT on financial services & SSCL	(20,199,473)	-	(66,049,351)	-
Profit / (Loss) before income tax	4,240,477	(639,428,135)	42,177,378	(1,557,847,495)
Income tax Reversal/ (expense)	-	-	-	-
Profit / (Loss) for the period	4,240,477	(639,428,135)	42,177,378	(1,557,847,495)
Other comprehensive income/ (expenses)
Other comprehensive income not to be reclassified to profit or loss
Net gain / (loss) on equity instruments at fair value through other comprehensive
income	-	-	-	-

Other comprehensive income for the Period , net of tax	-	-	-	-
Total comprehensive income/(expenses) for the Period	4,240,477	(639,428,135)	42,177,378	(1,557,847,495)
Basic earnings per Share(Rs.) - Annualised	0.02	(4.20)	0.06	(3.41)

SOFTLOGIC FINANCE PLC						Page 4
STATEMENT OF CHANGES IN EQUITY
PERIOD ENDED 31ST DECEMBER
						Rs.

	Stated	Statutory Reserve	Non-Distributable	Revaluation	Retained
	Regulatory Loss	Total
	Capital	Fund	Reserve	Earnings
	Allowance Reserve

Balance as at 1 April 2023	7,597,925,039	260,448,732	1,748,974,244	172,788,382	(7,544,089,315)	2,236,047,082
Profit/(Loss) for the 9 month period	-	-	-	-	(1,557,847,495)	(1,557,847,495)
Other comprehensive income,net of tax	-	-	-	-	-	-
Transfer to Statutory Reserve Fund	-	-	-	-	-	-

Balance as at 31 December 2023	7,597,925,039	260,448,732	1,748,974,244	172,788,382	(9,101,936,810)	678,199,587

Balance as at 1 April 2024	9,930,116,800	260,448,732	1,736,237,951	-	(9,137,904,468)	2,788,899,016
Profit/(Loss) for the 9 month period	-	-	-	-	42,177,378	42,177,378
Transfer Out from Regulatory Loss	-	-	(924,684,147)	-	924,684,147
Allowance Reserve

Other comprehensive income,net of tax	-	-	-	-	-	-
Transfer to Statutory Reserve Fund	-	1,896,845	-	-	(1,896,845)	-

Balance as at 31 December 2024	9,930,116,800	262,345,578	811,553,804	-	(8,172,939,788)	2,831,076,394

SOFTLOGIC FINANCE PLC			Page 5
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED
		Rs.

	31/12/2024	31/12/2023
	Unaudited	Unaudited
Cash flows from operating activities
Net profit/(Loss) before taxation	42,177,378	(1,557,847,495)
Adjustments for ,
Depreciation	10,451,515	22,154,303
Amortization of intangible assets	14,416,533	14,234,607
Profit on disposal of property, plant and equipment	(5,656,672)	(1,743,531)
Amortisation expenses on right-of-use assets	40,586,775	37,980,947
Impairment charge on bad and doubtful debts	(149,627,415)	482,198,637
Provision for defined benefit plans	9,571,000	11,315,000
Interest expenses	669,317,807	2,411,687,636
Operating profit before working capital changes	631,236,920	1,419,980,105
(Increase)/Decrease in Financial Assets at Amortised Cost - Lease & HP rental Receivables	2,171,703,835	2,835,595,182
(Increase)/Decrease in Financial Assets at Amortised Cost - Loans and Receivables	1,111,347,290	3,877,138,474
(Increase)/Decrease in Financial Assets Measured at Fair Value Through Profit or Loss (FVTPL)	378,632,877	316,466,799
(Increase)/Decrease in Placements with Banks and Other Finance Companies	(221,597,301)	1,169,861,177
(Increase)/Decrease in other assets	(111,006,575)	178,648,613
(Decrease)/Increase in amounts due to customers	(3,140,306,966)	(4,539,747,469)
Increase/(Decrease) in other payables	282,159,039	(19,619,984)
Cash generated from operations	1,102,169,119	5,238,322,897
Interest paid	(669,317,807)	(2,411,687,636)
Taxes paid	-	-
Defined benefit plan costs paid	(6,103,540)	31,768,288
Net cash generated from operating activities	426,747,772	2,858,403,548
Cash flows from investing activities
Purchase of property, plant and equipment & Intangible Assets	(15,747,122)	(5,563,470)
Proceeds from disposal of property, plant and equipment	8,012,210	2,088,700
Net cash used in investing activities	(7,734,911)	(3,474,770)
Cash flows from financing activities
Proceed from long term borrowings-Bank Loan	245,898,510	2,067,663,371
Repayment of long term borrowings- Bank Loan	(518,392,181)	(709,009,775)
Proceeds from commercial papers	82,907,734	5,996,943,871
Repayment of commercial papers	(359,242,898)	(10,434,443,429)
Repayment of principal portion of lease liabilities	(65,205,258)	(50,747,893)
Net cash (used in) / generated from financing activities	(614,034,093)	(3,129,593,855)
Net Increase/ (decrease) in cash and cash equivalents	(195,021,232)	(274,665,077)
Cash and cash equivalents at the beginning of the year	311,315,871	458,407,425
Cash and cash equivalents at the end of the period	116,294,639	183,742,348
Reconciliation of cash and cash equivalents
Cash, bank balance	220,146,046	333,428,077
Bank overdrafts	(103,851,407)	(149,685,729)
Cash and cash equivalents at the end of the period	116,294,639	183,742,348

Page 6

SOFTLOGIC FINANCE PLC

ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS

Rs.

	Financial Assets recognised through	Financial Assets at Fair Value	Financial Assets at Amortised
	through Other Comprehensive	Total
	Profit or Loss (FVTPL)	Cost (AC)
	Income (FVTOCI)


As at	31.12.2024	31.03.2024	31.12.2024	31.03.2024	31.12.2024		31.03.2024	31.12.2024	31.03.2024

Assets
Cash and Cash Equivalents	-	-	-	-	220,146,046		333,866,263	220,146,046	333,866,263
Placements with Banks and Other Finance Companies	-	-	-	-	-		-	-	-
Securities purchased under repurchase agreements	-	-	-	-	825,092,098		603,494,798	825,092,098	603,494,798
Financial Assets Measured at Fair Value Through Profit or Loss (FVTPL)	-	378,632,877	-	-	-		-	-	378,632,877
Financial Assets at Amortised Cost - Loans and Receivables to Other Customers	-	-	-	-	2,737,784,800		3,840,154,976	2,737,784,800	3,840,154,976
Financial Assets at Amortised Cost - Lease Rental and Hire Purchase Receivables	-	-	-	-	1,967,486,091		3,998,539,625	1,967,486,091	3,998,539,625
Investment in Dealing Securities	-	-	30,600	30,600	-		-	30,600	30,600
Financial Assets at Amortised Cost - Other Financial Assets	-	-	-	-	1,308,020,561		1,355,458,492	1,308,020,561	1,355,458,492
Total Financial Assets	-	378,632,877	30,600	30,600	7,058,529,596		10,131,514,153	7,058,560,196	10,510,177,630
									Rs.

					Financial Liabilities at	Total
					Amortised Cost (AC)


As at					31.12.2024		31.03.2024	31.12.2024	31.03.2024

Liabilities
Bank Overdrafts					103,851,407		22,550,392	103,851,407	22,550,392
Financial Liabilities at Amortised Cost - Interest bearing Borrowings to Banks					-		-	-	-
Financial Liabilities at Amortised Cost - Deposits due to Customers					4,341,410,584		7,481,717,550	4,341,410,584	7,481,717,550
Financial Liabilities at Amortised Cost - Other Borrowed Funds					9,056,757		557,885,592	9,056,757	557,885,592
Lease Liabilities					194,984,265		75,979,132	194,984,265	75,979,132
Total Financial Liabilities					4,649,303,013		8,138,132,666	4,649,303,013	8,138,132,666

SOFTLOGIC FINANCE PLC			Page 7
EXPLANATORY NOTES
1. The above figures are provisional and subject to audit.
2. Information on shares for the quarter ended December 31, 2024 as given below.
Market Price per Share (Rs.)	CRL.N0000	CRL.R0000
Highest	6.50	-
Lowest	5.10	-
Closing	5.90	-
Last Traded price	5.90	-
Ratios
Debt to equity ratio (Times)	1.81
Liquid assets ratio (%) - Statutory Minimum 10%	24.03

3. There are no changes in the accounting policies and methods of computations since the publication of Annual report for the year ended March 31, 2024.

4. The Interim Financial Statements are in compliance with Sri Lanka Accounting Standards LKAS 34 - Interim Financial Reporting and provide the information required by the Colombo Stock Exchange.

5. The presentation and classification of figures for the corresponding period of the previous year have been amended, where relevant, for better presentation and to be comparable with those of the current year.

6. There has been no significant change in the nature of the contingent liabilities, which were disclosed in the Annual report for the year ended March 31, 2024.

7. No circumstances have arisen since the statement of financial position date, which would require adjustments to or disclosure in the financial statements

8. Capital Adequacy Ratio

The Company engaged its independent auditor to provide a special purpose audit opinion on the Statement of Profit or Loss and the Statement of Changes in Equity for the six-month period ended September 30, 2024.

This special purpose audit report was prepared specifically for submission to the Central Bank of Sri Lanka. Its purpose is to include the profits after tax and the reversal of the Regulatory Loss Allowance Reserve (RLAR) of the Company for the six- month period ending September 30, 2024, as part of Tier 1 capital and in calculating the Capital Adequacy Ratios. The Company has submitted this report to the Central Bank for regulatory capital adequacy purposes.

SOFTLOGIC FINANCE PLC			Page 8
EXPLANATORY NOTES (Cont;)
9. Twenty Major Shareholders as at 31 December 2024
Name	No. of Shares	(%)

SOFTLOGIC CAPITAL PLC & PAN ASIA BANKING CORPORATION PLC/SOFTLOGIC CAPITAL PLC	910,701,778	94.61%
SOFTLOGIC LIFE INSURANCE PLC-A/C NO. 04 (PARTICIPATING FUND)	15,688,030	1.63%
MR. NIHAL SAMARASURIYA	7,800,000	0.81%
SOFTLOGIC HOLDINGS PLC	5,657,598	0.59%
VANIK INCORPORATION LTD	5,376,068	0.56%
MR. KULAPPUARACHCHIGE DON DAMMIKA PERERA	3,154,253	0.33%
L.B. FINANCE LIMITED.	2,090,000	0.22%
PEOPLES BANK/ASOKA KARIYAWASAM PATHIRAGE	1,653,822	0.17%
MR. SUBRAMANIAM VASUDEVAN	1,079,585	0.11%
MERCHANT BANK OF SRI LANKA & FINANCE PLC/B. JANEGAN	714,564	0.07%
PEOPLE S LEASING AND FINANCE PLC/L.P.HAPANGAMA	603,594	0.06%
HATTON NATIONAL BANK PLC/ARUNASALAM SITHAMPALAM	285,783	0.03%
SAMPATH BANK PLC/MR. ABISHEK SITHAMPALAM	159,782	0.02%
VIANAAR HOMES (PVT)LTD	150,000	0.02%
MR. PULAHINGE KASUN ERANGA RODRIGO	133,534	0.01%
MRS. PAMELA CHRISTINE COORAY	132,444	0.01%
MRS. WANNIACHCHIGE AYOMA NILMINI FONSEKA	118,972	0.01%
MR. THARMALINGAM LOGANATHAN	117,966	0.01%
DIALOG FINANCE PLC/P.B.C. KURERA	113,000	0.01%
MERCHANT BANK OF SRI LANKA & FINANCE PLC 01	112,056	0.01%

	955,842,829	99.30%
Others	6,730,362	0.70%

Total	962,573,191	100.00%

10. Directors' Shareholding as at 31 December 2024
Names of Directors	No. of Shares	(%)
1. Mr. A. K. Pathirage	1,653,822	0.17%
2. Mr. H. K. Kaimal	Nil	Nil
3. Mr. C. Kalupahana	Nil	Nil
4. Mr. Viresh Binomal Nanayakkara	Nil	Nil
5. Mr. H.S. Samantha Dabare	Nil	Nil
6. Mr. R.J.Perera.	9,600	0.00%
7. Mr. N.C.A. Abeyesekera (Appointed w.e.f. 23 October 2024)	Nil	Nil
11. Public shareholding as at 31 December 2024
Public holding	28,862,363	2.99%
Number of public shareholders	2,047

12. Float adjusted market Capitalization as at 31 December 2024

Float adjusted market Capitalization (Rs)

Minimum Public Holding (%)

Threshold	Compliance (Y/N)	Value

Less than 1 Bn	Yes	169,807,536.62
Minimum 10%	No	2.99%

In terms of Rule 7.14.1(b) of the Listing Rules of Colombo Stock Exchange, Softlogic Finance PLC is hereby announced that the Company is non-compliant with the Public Holding percentage as specified in Rule 7.14.(b) of the Listing Rules.

SOFTLOGIC FINANCE PLC	Page 9

EXPLANATORY NOTES (Contd.)

13 RELATED PARTY TRANSACTIONS

Details of significant related party disclosures are as follows:

13.1 Transactions with Key Managerial Personnel (KMPs)

Key Managerial Personnel includes Members of the Board of Directors of the Company and of it's Holding Company.

Short-term employee benefits for the period

Rs.

7,077,353

13.2 Transactions, arrangements and agreements involving KMPs and their close members of the family

The following provides the total amount of transactions which have been entered in to with Key Managerial Personnel and their close family members.

Time Deposits	Rs.	-
Savings Deposits	Rs.	-

13.3 Transactions with Group Companies

The Company enters into transactions with group companies and the following tables shows the outstanding balances and corresponding transactions during the period ended December 31, 2024

							Rs.

Company	Relationship	(Receivables)	Loans, Advances,	Borrowings /	Income Earned	Cost Incurred	Plant & Equip.
/Payables	Investments & SPV	Deposits	Purchased / (sold)


Softlogic Capital PLC	Parent Company	-	-	-	-	4,991,246	-

Softlogic Corporate Services (Pvt) Ltd	Affiliated Company	-	-	-	-	4,788,663	-

Softlogic Brands (Pvt) Ltd	Group Company	-	-	353,168	-	7,888	-

Softlogic Retail (Pvt) Ltd	Affiliated Company	(126,938)	-	317	-	5	-

S R One (Pvt) Ltd	Affiliated Company	792,810	1,100,266,157	-	-	80,642	-

Softlogic Computers (Pvt) Ltd	Affiliated Company	-	-	-	-	41,300	-

Softlogic Information Technologies (Pvt) Ltd	Affiliated Company	-	-	-	-	50,268	-

Softlogic BPO Services (Pvt) Ltd	Affiliated Company	(8,289,009)	-	-	81,640	51,664,690	-

Softlogic Life PLC	Affiliated Company	(78,667)			-	17,241,926	-

The Company entered into agreements with S R One (Pvt) Ltd, a fully owned subsidiary of Softlogic Capital PLC, and carried out two transfers of the beneficial ownership of a part of the Company's loan portfolio for cash. The rationale for entering into these transactions is pursuant to an alternative Capital Augmentation Plan of the Company.

This plan is designed to enhance the Company's balance sheet and meet its capital adequacy requirements. The aggregate value of these transactions carried out amounted to LKR 1.1 billion. The

Company has disclosed these transactions to the Colombo Stock Exchange via its announcements dated 01st August 2024, 06th September 2024 and 10th September 2024.

Page 10

SOFTLOGIC FINANCE PLC

EXPLANATORY NOTES (Contd.)

14 Utilisation of funds raised via capital market.

The company has raised funds via the capital market through a rights issue on 20th December 2019. The progress of uitlisation of the capital raised as per the objectives stated in the

14.1 right issue circular is given below.

				Amount allocated			% of utilisation	Clarification if not fully
Objective		Amount allocated as	Proposed date of	% of total	Amount utilised in Rs.	utilised including if not
Objective as per Circular	from proceeds in Rs.	against allocation
number	per Circular in Rs.	utilisation as per Circular	proceeds	(B)	utilized where are the funds
	(B/A)
				(A)			invested

	To Settle the utilized overdraft facilities		Within 2 monhs from
(a)	474,880,432	the completion of the	474,880,432	79%	474,880,432	100%	N/A
of the company
		Rights Issue

	To expand the lending activities of the		Within 2 monhs from
(b)	127,614,800	the completion of the	127,614,800	21%	127,614,800	100%	N/A
company
		Rights Issue

		602,495,232		602,495,232	100%	602,495,232

14.2

The company has raised funds further via the capital market through a rights issue on 15th December 2020. The progress of uitlisation of the capital raised as per the objectives stated in the right issue circular is given below.

				Amount allocated			% of utilisation	Clarification if not fully
Objective		Amount allocated as	Proposed date of	% of total	Amount utilised in Rs.	utilised including if not
Objective as per Circular		against allocation
number	per Circular in Rs.	utilisation as per Circular from proceeds in Rs.	proceeds	(B)	utilized where are the funds
	(B/A)
				(A)			invested

To repay maturity liabilities

	To increase the secured lending	Within 6 months from
	portfolio to the required regulatory
	1,901,994,752 the completion of the	1,901,994,752	100%	1,901,994,752	100%	N/A
(b)	levels
Rights issue

Leasing
Other lending

1,901,994,752	1,901,994,752	100%	1,901,994,752

The company has raised funds further via the capital market through a rights issue on 26th August 2021. The progress of uitlisation of the capital raised as per the objectives stated in the

14.3 right issue circular is given below.

				Amount allocated			% of utilisation	Clarification if not fully
Objective		Amount allocated as	Proposed date of	% of total	Amount utilised in Rs.	utilised including if not
Objective as per Circular	from proceeds in Rs.	against allocation
number	per Circular in Rs.	utilisation as per Circular	proceeds	(B)	utilized where are the funds
	(B/A)
				(A)			invested

(a)	To improve the Capital adequacy ratio	-	Immediate	-	0%	-	0%	N/A

	To repay maturity liabilities,
(b)	utilize in the lending and other
	business operations.		Within 6 months from

	To increase the secured lending
	2,239,667,740	the completion of the	2,239,667,740	100%	2,239,667,740	100%	N/A

	portfolio to the required regulatory		Rights issue

(c)	levels
	(i) Leasing
	(ii) Other lending *

		2,239,667,740		2,239,667,740	100%	2,239,667,740

The maturity liabilities mentioned above under objective (c), include forecasted outflow of fixed deposits. If the outflow is less than expected and as a result if any proceeds from the rights remain unutilized, such amount will be utilized in lending and other business operations.

14.4 The company has raised funds further via the capital market through a rights issue on 08 December 2022. The progress of uitlisation of the capital raised as per the objectives stated in the right issue circular is given below.

				Amount allocated			% of utilisation	Clarification if not fully
Objective		Amount allocated as	Proposed date of	% of total	Amount utilised in Rs.	utilised including if not
Objective as per Circular	from proceeds in Rs.	against allocation
number	per Circular in Rs.	utilisation as per Circular	proceeds	(B)	utilized where are the funds
	(B/A)
				(A)			invested

(a)	To improve the Capital adequacy ratio	-	Immediate	-	0%	-	0%	N/A

(b)	To settle the working capital loan	851,497,316	Immediate	851,497,316	100%	851,497,316	100%	N/A
borrowed from Softlogic Capital PLC.


		851,497,316		851,497,316	100%	851,497,316

14.5 The company has raised funds further via the capital market through a rights issue on 27 March 2024. The progress of uitlisation of the capital raised as per the objectives stated in the right issue circular is given below.

						Amount allocated			% of utilisation	Clarification if not fully
Objective				Amount allocated as	Proposed date of	% of total	Amount utilised in Rs.	utilised including if not
Objective as per Circular	from proceeds in Rs.	against allocation
number	per Circular in Rs.	utilisation as per Circular	proceeds	(B)	utilized where are the funds
			(B/A)
						(A)			invested

	To improve the Capital adequacy ratio as
(a)	per the Finance Business Act Direction	-	Immediate	-	0%	-	0%	N/A
	No. 03 of 2018

	To address the serious loss of capital
(b)	situation as per S220 of the Companies	-	Immediate	-	0%	-	0%	N/A
	Act No. 07 of 2007

	To improve the Core Capital
( c )	Requirement,	as stipulated	by the	-	Immediate	-	0%	-	0%	N/A
Finance Business Act Direction No.2 of

	2017

(d)	To settle Subordinated Debt of Rs. 900	1,049,966,135	Immediate	1,049,966,135	45%	1,049,966,135	100%	N/A
Mn obtained from Softlogic Capital PLC


	To settle multiple short term loans of Rs.
(e)	920 Mn obtained from Softlogic Capital	1,090,382,066	Immediate	1,090,382,066	47%	1,090,382,066	100%	N/A
	PLC

(f)	To settle the	Securitization	loan &	191,843,560	Immediate	191,843,560	8%	191,843,560	100%	N/A
Commercial papers as per the maturities

2,332,191,761	2,332,191,761	100%	2,332,191,761

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