Softlogic Finance PlcCSELK: CRL.N0000

Interim Financial Statment for the period ended 31st March 2024

May 31, 2024 at 3:34 AM UTC · Issued by Softlogic Finance Plc

SOFTLOGIC FINANCE PLC

INTERIM FINANCIAL STATEMENTS

For the Quarter ended

31 March 2024

( Company Registration No: PB641PQ )

No 13, De Fonseka Place, Colombo 04

SOFTLOGIC FINANCE PLC					Page 2
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED
					Rs.
	03 Months Period ended	12 Months Period ended
	31 March		31 March

	2024		2023	2024	2023
	Unaudited		Unaudited	Unaudited	Audited
Income	523,510,391		1,118,961,224	2,735,584,923	4,199,168,041
Interest income	516,698,769		1,026,165,387	2,591,559,219	3,925,424,279
Interest expenses	(369,346,111)		(1,121,436,337)	(2,781,033,747)	(3,891,334,065)
Net interest income	147,352,658		(95,270,949)	(189,474,528)	34,090,214
Fee and commission income	47,798,137		42,027,743	90,926,201	99,060,164
Other operating income	(40,986,515)		50,768,093	53,099,504	174,683,598
Total operating income	154,164,280		(2,475,113)	(45,448,824)	307,833,976
Impairment (charge)/ reversal for loans and other losses	(159,929,010)		(347,934,530)	(642,127,647)	(1,809,774,888)
Net Operating Income	(5,764,729)		(350,409,643)	(687,576,471)	(1,501,940,912)
Operating expenses
Personnel costs	(50,557,233)		(111,434,317)	(358,881,891)	(490,810,119)
Depreciation of property, plant and equipment	(5,156,048)		(7,681,658)	(27,310,351)	(33,967,615)
Amortization of intangible assets	(4,749,369)		(8,309,286)	(18,983,976)	(33,237,142)
Other operating expenses	(133,944,736)		(253,412,058)	(665,266,922)	(935,247,646)
Operating profit / (Loss) before Value Added Tax on financial services	(200,172,116)		(731,246,962)	(1,758,019,611)	(2,995,203,435)
VAT on financial services	-		-	-	-
Profit / (Loss) before income tax	(200,172,116)		(731,246,962)	(1,758,019,611)	(2,995,203,435)
Income tax Reversal/ (expense)	-		-	-	-
Profit / (Loss) for the period	(200,172,116)		(731,246,962)	(1,758,019,611)	(2,995,203,435)
Other comprehensive income/ (expenses)

Other comprehensive income not to be reclassified to profit or loss
Net of Actuarial gain/(loss) on post employment benefit obligations	(406,040)		5,333,178	(406,040)	5,333,178
Deffered tax on Capital gain arising on revaluation of land	-		(5,419,500)	-	-
Gain/(Loss) arising on revaluation of land and building	-		18,065,000	-	12,645,500

Other comprehensive income for the Period , net of tax	(406,040)		17,978,678	(406,040)	17,978,678
Total comprehensive income/(expenses) for the Period	(200,578,156)		(713,268,285)	(1,758,425,651)	(2,977,224,758)

Basic earnings per Share(Rs.) - Annualised	(0.83)		(4.80)	(2.88)	(5.66)
Figures in brackets indicate deductions.
The above figures are provisional and subject to audit

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

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

Balance as at 1 April 2022	6,746,427,723	260,448,732	160,142,882	-	(2,803,598,408)	4,363,420,930
Profit/(Loss) for the 12 month period	-	-	-	-	(2,995,203,435)	(2,995,203,435)
Rights Issue shares	851,497,316	-	-	-	-	851,497,316
Expenses related to share issue	-	-	-	-	(1,646,405)	(1,646,405)
Other comprehensive income,net of tax	-	-	12,645,500	-	5,333,178	17,978,678
Transfer to Non-Distributable Regulatory Loss Allowance Reserve	-	-	-	1,748,974,244	(1,748,974,244)	-
Transfer to Statutory Reserve Fund	-	-	-	-	-	-

Balance as at 31 March 2023	7,597,925,039	260,448,732	172,788,382	1,748,974,244	(7,544,089,315)	2,236,047,083
Balance as at 1 April 2023	7,597,925,039	260,448,732	172,788,382	1,748,974,244	(7,544,089,315)	2,236,047,083
Profit/(Loss) for the 12 month period	-	-	-	-	(1,758,019,611)	(1,758,019,611)
Rights Issue shares	2,332,191,761	-	-	-	-	2,332,191,761
Expenses related to share issue	-	-	-	-	(2,196,556)	(2,196,556)
Other comprehensive income,net of tax	-	-	-	-	(406,040)	(406,040)
Transfer to Retained Earnings	-	-	(172,788,382)	-	172,788,382	-
Transfer to Statutory Reserve Fund	-	-	-	-	-	-

Balance as at 31 March 2024	9,930,116,800	260,448,732	-	1,748,974,244	(9,131,923,140)	2,807,616,636

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

	31/03/2024	31/03/2023
	Unaudited	Audited
Cash flows from operating activities
Net profit/(Loss) before taxation	(1,758,019,611)	(2,995,203,435)
Adjustments for ,
Depreciation	27,310,351	33,967,615
Amortization of intangible assets	18,983,976	33,237,142
Profit on disposal of property, plant and equipment	19,322,805	(28,884,815)
Amortisation expenses on right-of-use assets	50,018,096	64,494,661
Impairment charge on bad and doubtful debts	642,127,647	1,809,774,888
Provision for defined benefit plans	13,664,733	6,091,233
Interest expenses	2,781,033,747	3,891,334,065
Operating profit before working capital changes	1,794,441,745	2,814,811,354
(Increase)/Decrease in Financial Assets at Amortised Cost - Lease & HP rental Receivables	3,784,805,867	3,135,096,590
(Increase)/Decrease in Financial Assets at Amortised Cost - Loans and Receivables	4,391,668,167	(870,203,637)
(Increase)/Decrease in Financial Assets Measured at Fair Value Through Profit or Loss (FVTPL)	(62,166,077)	(316,466,799)
(Increase)/Decrease in Placements with Banks and Other Finance Companies	1,287,187,173	(433,221,806)
(Increase)/Decrease in other assets	253,444,329	(235,994,418)
(Decrease)/Increase in amounts due to customers	(4,949,071,359)	(3,168,405,562)
Increase/(Decrease) in other payables	(105,036,236)	72,494,068
Cash generated from operations	6,395,273,607	998,109,790
Interest paid	(2,781,033,747)	(3,891,334,065)
Taxes paid	-	-
Defined benefit plan costs paid	(21,573,618)	(10,717,653)
Net cash generated from operating activities	3,592,666,242	(2,903,941,928)
Cash flows from investing activities
Purchase of property, plant and equipment & Intangible Assets	(16,205,461)	22,096,003
Proceeds from disposal of property, plant and equipment	354,764,255	56,869,732
Net cash used in investing activities	338,558,794	78,965,735
Cash flows from financing activities
Proceed from long term borrowings-Bank Loan	2,107,161,396	650,000,000
Repayment of long term borrowings- Bank Loan	(3,170,099,883)	(1,985,327,133)
Rights issue of shares	2,332,191,761	851,497,316
Expenses related to share issue	(2,196,556)	(1,646,405)
Proceed from Subordinated Loan	-	109,640,262
Proceeds from commercial papers	6,125,648,006	22,666,462,890
Repayment of commercial papers	(11,403,728,397)	(19,317,130,576)
Repayment of principal portion of lease liabilities	(67,292,916)	(76,210,435)
Net cash (used in) / generated from financing activities	(4,078,316,589)	2,897,285,919
Net Increase/ (decrease) in cash and cash equivalents	(147,091,553)	72,309,726
Cash and cash equivalents at the beginning of the year	458,407,424	386,097,698
Cash and cash equivalents at the end of the year	311,315,871	458,407,424
Reconciliation of cash and cash equivalents
Cash & Bank balances	333,866,263	493,667,734
Bank overdrafts	(22,550,392)	(35,260,310)
Cash and cash equivalents at the end of the year	311,315,871	458,407,424

Figures in brackets indicate deductions.

The above figures are provisional and subject to audit

Page 6

SOFTLOGIC FINANCE PLC

ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS

Rs.

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


As at	31.03.2024	31.03.2023	31.03.2024	31.03.2023	31.03.2024		31.03.2023	31.03.2024	31.03.2023

Assets
Cash and Cash Equivalents	-	-	-	-	333,866,263		493,667,734	333,866,263	493,667,734
Placements with Banks and Other Finance Companies	-	-	-	-	-		-	-	-
Securities purchased under repurchase agreements	-	-	-	-	603,494,798		1,890,681,971	603,494,798	1,890,681,971
Financial Assets Measured at Fair Value Through Profit or Loss (FVTPL)	378,632,877	316,466,799	-	-	-		-	378,632,877	316,466,799
Financial Assets at Amortised Cost - Loans and Receivables to Other Customers	-	-	-	-	3,676,196,978		8,842,788,482	3,676,196,978	8,842,788,482
Financial Assets at Amortised Cost - Lease Rental and Hire Purchase Receivables	-	-	-	-	4,164,451,700		7,816,461,877	4,164,451,700	7,816,461,877
Investment in Dealing Securities	-	-	30,600	30,600	-		-	30,600	30,600
Financial Assets at Amortised Cost - Other Financial Assets	-	-	-	-	1,463,900,099		1,648,170,954	1,463,900,099	1,648,170,954
Total Financial Assets	378,632,877	316,466,799	30,600	30,600	10,241,909,838		20,691,771,017	10,620,573,315	21,008,268,417
									Rs.
					Financial Liabilities at	Total
					Amortised Cost (AC)


As at					31.03.2024		31.03.2023	31.03.2024	31.03.2023

Liabilities
Bank Overdrafts					22,550,392		35,260,310	22,550,392	35,260,310
Financial Liabilities at Amortised Cost - Interest bearing Borrowings to Banks					-		150,000,000	-	150,000,000
Financial Liabilities at Amortised Cost - Deposits due to Customers					7,481,875,598		12,430,946,956	7,481,875,598	12,430,946,956
Financial Liabilities at Amortised Cost - Other Borrowed Funds					557,885,592		6,766,179,291	557,885,592	6,766,179,291
Lease Liabilities					75,979,132		129,509,241	75,979,132	129,509,241
Total Financial Liabilities					8,138,290,713		19,511,895,798	8,138,290,713	19,511,895,798

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 March 31, 2024 as given below.
Market Price per Share (Rs.)	CRL.N0000	CRL.R0000
Highest	6.50	0.10
Lowest	5.50	0.10
Closing	5.70	0.10
Ratios
Debt to equity ratio (Times)	3.03
Liquid assets ratio (%) - Statutory Minimum 10%	16.37

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, 2023.

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, 2023.

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

Company Capital adequacy requirements (Both Tier 1 & Tier 2) are below the minimum requirement since April 2022. The Capital Adequacy ratio has improved to 5.6% subsequent to the Rights issue of Rs. 2.3Bn in March 2024. (Refer Note 14.5). The Board of Directors has taken all required actions to comply with the minimum Capital Adequacy ratio requirements in the financial year ending March 31, 2025

SOFTLOGIC FINANCE PLC					Page 8
EXPLANATORY NOTES (Cont;)
9. Twenty Major Shareholders as at 31 March 2024
Name		No. of Shares	(%)
SOFTLOGIC CAPITAL PLC, PAN ASIA BANKING CORPORATION PLC/SOFTLOGIC CAPITAL PLC	918,701,788	95.44%
SOFTLOGIC LIFE INSURANCE PLC-A/C NO. 04 (PARTICIPATING FUND)		15,688,030	1.63%
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%
HATTON NATIONAL BANK PLC/SUBRAMANIAM VASUDEVAN		1,079,585	0.11%
MERCHANT BANK OF SRI LANKA & FINANCE PLC/B. JANEGAN		673,174	0.07%
PEOPLE'S LEASING & FINANCE PLC/L.P.HAPANGAMA		608,959	0.06%
HATTON NATIONAL BANK PLC/ARUNASALAM SITHAMPALAM		274,303	0.03%
DIALOG FINANCE PLC/P.B.C. KURERA		202,225	0.02%
MR. DICKOWITA KANKANAMGE ATHULA KITHSIRI WEERATHUNGA		175,150	0.02%
SAMPATH BANK PLC/MR. ABISHEK SITHAMPALAM		159,782	0.02%
MRS. PAMELA CHRISTINE COORAY		132,444	0.01%
MR. THARMALINGAM LOGANATHAN		114,277	0.01%
MERCHANT BANK OF SRI LANKA & FINANCE PLC 01		112,056	0.01%
PEOPLE'S LEASING & FINANCE PLC/L.H.L.M.P.HARADASA		107,850	0.01%
SEYLAN BANK LIMITED/JAMES HENRY PAUL RATNAYAKE		106,646	0.01%
MR. ADDARA PATHIRANAGE SOMASIRI		100,000	0.01%
PEOPLE'S LEASING & FINANCE PLC/DR.H.S.D.SOYSA & MRS.G.SOYSA		100,000	0.01%
			956,268,010	99.34%
Others		6,305,181	0.66%
Total		962,573,191	100.00%

10. Directors' Shareholding as at 31 March 2024
Names of Directors		No. of Shares	(%)
1. Mr. Dinesh P. Renganathan (Resigned w.e.f. 02 May 2024)		Nil	Nil
2. Mr. H. K. Kaimal		Nil	Nil
3. Mr. H.S. Samantha Dabare (Appointed as Acting Chairman w.e.f. 02 May 2024)	Nil	Nil
4. Mr. R.J.Perera.		9,600	0.00%
5. Mr. C. Kalupahana (Appointed w.e.f. 24 Oct 2023)		Nil	Nil
11. Public shareholding as at 31 March 2024
Public holding		20,821,953	2.17%
Number of public shareholders		2019
12. Float adjusted market Capitalization as at 31 March 2024

		Threshold	Compliance (Y/N)	Value

Float adjusted market Capitalization (Rs)	Less than 1 Bn	Yes	-
Minimum Public Holding (%)	Minimum 10%	No	2.17%

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.

8,272,772

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 March 31, 2024

Rs.

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


Softlogic Capital PLC	Parent Company	-	-	-	-	416,362,278	-

Softlogic Corporate Services (Pvt) Ltd	Affiliated Company	-	-	-	-	4,889,821	-

Softlogic Brands (Pvt) Ltd	Group Company	-	-	345,674	-	14,688	-

Softlogic Holdings PLC	Ultimate Parent Company	-	-	-	-	1,200,199	-

Softlogic Retail (Pvt) Ltd	Affiliated Company	(1,022,484)	-	312	-	29,057,392	-

Softlogic Computers (Pvt) Ltd	Affiliated Company	-	-	-	-	801,745	-

Softlogic Information Technologies (Pvt) Ltd	Affiliated Company	27,300	-	-	-	265,300	-

Softlogic BPO Services (Pvt) Ltd	Affiliated Company	-	1,011,953	-	208,449	50,192,235	-

Future Automobiles (Pvt) Ltd	Affiliated Company	112,502	-	-	-	15,186,382	-

Softlogic Life PLC	Affiliated Company	(1,799,798)	-	-	-	8,116,711	-

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.

							% 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	Amount allocated from	against allocation
number	per Circular in Rs.	utilisation as per Circular	proceeds	(B)	utilized where are the funds
	(B/A)
				proceeds in Rs. (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.

						% 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 Amount allocated from	proceeds	(B)	utilized where are the funds
	(B/A)
			proceeds in Rs. (A)			invested

To repay maturity liabilities

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

	(ii) 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.

							% 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 Amount allocated from	proceeds	(B)	utilized where are the funds
	(B/A)
				proceeds in Rs. (A)			invested

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

To repay maturity liabilities,

utilize in the lending and other business operations.

				Within 6 months from

	To increase the secured lending portfolio		2,239,667,740 the completion of the	2,239,667,740	100%	2,239,667,740	100%	N/A
			Rights issue
(c)	to the required regulatory 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.

							% 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	Amount allocated from	against allocation
number	per Circular in Rs.	utilisation as per Circular	proceeds	(B)	utilized where are the funds
	(B/A)
				proceeds in Rs. (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.

% 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

Amount allocated from

against allocation

number

per Circular in Rs.

utilisation as per Circular

proceeds

(B)

utilized where are the funds

(B/A)

proceeds in Rs. (A)

invested

To improve the Capital adequacy ratio as

(a)

per the Finance Business Act Direction

Immediate

N/A

No. 03 of 2018

To address the serious loss of capital

(b)

situation as per S220 of the Companies

Immediate

N/A

Act No. 07 of 2007

improve

the

Core

Capital

( c )

Requirement,

as stipulated

the

Immediate

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)

settle the

Securitization

loan

191,843,560

Immediate

191,843,560

100%

N/A

Commercial papers as per the maturities

2,332,191,761

100%

2,332,191,761

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