John Keells : Interim Financial Statements as @ 31st December 2021

RESILIENCE IN INVESTING

INTERIM CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED 31 DECEMBER 2021

CHAIRMAN'S REVIEW

Dear Stakeholder,

The Group witnessed a strong recovery momentum during the quarter under review with the performance of our businesses reaching close to pre COVID-19 levels with business activity and consumer trends being near 'normal' since the onset of

the pandemic in early 2020. This positive momentum resulted in all sectors within the Group recording a strong growth in profits. The Group's Leisure businesses, in particular, recorded a significant turnaround in performance on account of the resumption in operations in Sri Lanka and the continued recovery in the Maldives.

Whilst the quarter under review was a near 'normal' quarter with minimal COVID-19 related restrictions and disruptions, it should be noted that the performance of the corresponding quarter of the previous year did witness an impact on account of the outbreak of a COVID-19 cluster in early October 2020, which prompted isolation measures in some areas which negatively impacted Group performance.

Group revenue at Rs.53.88 billion for the quarter under review is an increase of 53 per cent against the comparative period of last year [2020/21 Q3: Rs.35.23 billion]. Cumulative Group revenue for the first nine months of the financial year 2021/22 at Rs.141.95 billion is an increase of 60 per cent against the revenue of Rs.88.86 billion recorded in the corresponding period of the financial year 2020/21.

Group earnings before interest expense, tax, depreciation and amortisation (EBITDA) at Rs.9.53 billion in the third quarter of the financial year 2021/22 is a 126 per cent increase against the Group EBITDA of Rs.4.21 billion recorded in the previous financial year. Cumulative Group EBITDA for the first nine months of the financial year 2021/22 at Rs.20.70 billion is an increase of 148 per cent against the EBITDA of Rs.8.33 billion recorded in the comparative period of the previous financial year.

Group profit before tax (PBT) at Rs.6.24 billion in the quarter under review is a 311 per cent increase against the PBT of Rs.1.52 billion recorded in the third quarter of 2020/21. Cumulative Group PBT for the first nine months of the financial year 2021/22 at Rs.10.38 billion is a significant increase against the PBT of negative Rs.275 million recorded in the corresponding period of the previous financial year.

Summarised below are the key operational and financial highlights of our performance during the quarter under review:

• Group EBITDA recorded a significant increase of 126 per cent to Rs.9.53 billion during the quarter under review against the comparative period [2020/21 Q3: Rs.4.21 billion].
• The Group's businesses recorded strong growth in profitability compared to the third quarter of the previous year on the back of a fast recovery momentum with most of the businesses reaching pre COVID-19 levels post the easing of restrictions.
• The Leisure industry group, in particular, recorded a significant turnaround in performance with the Q3 2021/22 EBITDA at Rs.1.23 billion compared to a negative Rs.1.01 billion in the corresponding quarter of the previous year. This turnaround has continued in the month of January 2022 and a strong recovery is expected in the coming months.
• The Maldivian Resorts segment continued its encouraging recovery momentum where the occupancy at our hotels were at pre-pandemic levels during the quarter whilst the Colombo Hotels and Sri Lankan Resorts segments recorded a positive EBITDA in the month of December 2021 on the back of easing of restrictions from October 2021 onwards.
• The Consumer Foods industry group continued its strong recovery momentum with all segments recording strong double-digit growth in volumes during the quarter, with volumes of the Beverages and Frozen Confectionery businesses reaching pre-pandemic levels.
• The Retail industry group recorded an encouraging performance with same store sales growth driving profitability in the Supermarket business, whilst the mobile phones business recorded a strong increase in volumes and profitability.
• The residential and commercial components of the 'Cinnamon Life' project are now completed, with the second residential apartment tower 'The Residence at Cinnamon Life', ready for customer handover from February 2022 onwards.
• The USD 395 million loan at 'Cinnamon Life', which was due for repayment by July 2022,

was refinanced in December 2021 through a syndicated facility during the quarter under review. The new facility comprises of a USD 225 million long term loan component and a USD 100 million bridging facility for a six-month period to align with the maturity date of July 2022 under the original facility.

• A private placement of JKH shares of the LKR equivalent of USD 80 million to Asian Development Bank (ADB) was approved by shareholders in December. The first phase of the transaction amounting to USD 50 million was received on 19 January 2022.
• Colombo West International Container Terminal (Private) Limited (CWIT), the project company for the development of the West Container Terminal-1(WCT-1) in the Port of Colombo, is in the final stages of fulfilling the conditions precedent in the Build, Operate and Transfer (BOT) agreement, and the handover of the site for the commencement of construction is expected to take place in the ensuing quarter.
• Initiatives for the quarter by ONE JKH, the Diversity, Equity, and Inclusion (DE&I) brand of the John Keells Group, included the enhancement of employer supported childcare with an additional creche location being introduced to staff and the presentation of the inaugural Chairman's Award for DE&I at the 2021 annual awards ceremony.
• The Group's carbon footprint per million rupees of revenue decreased by 15 per cent to 0.50 MT while the water withdrawal per million rupees of revenue decreased by 11 per cent to 9.68 cubic meters

EBITDA*	Quarter ending		Nine months ending
(Rs.'000)	31 December		31 December
	Q3	Q3	%	Cumulative	Cumulative	%
	2021/22	2020/21		2021/22	2020/21
Transportation	1,395,668	930,351	50	3,620,152	2,254,404	61
Consumer Foods	1,004,217	605,019	66	1,922,194	2,045,334	(6)
Retail	2,274,900	1,695,770	34	5,165,667	3,570,832	45
Leisure	1,234,230	(1,008,108)	222	539,305	(3,655,948)	115
Property	707,472	13,771	5,037	2,510,890	(27,486)	9,235
Financial Services	2,110,677	1,229,162	72	3,862,418	2,417,690	60

• EBITDA includes interest income and the share of results of equity accounted investees which is based on the share of profit after tax but excludes the impact of exchange losses and gains on its foreign currency denominated debt and cash, to demonstrate the underlying cash operational performance of businesses.

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CHAIRMAN'S REVIEW

Profit attributable to equity holders of the parent at Rs.4.91 billion in the quarter under review is a significant increase against the comparative quarter [2020/21 Q3: Rs.992 million]. On a cumulative basis, profit attributable to equity holders of the parent is at Rs.9.30 billion, compared to Rs.15 million in the comparative period of 2020/21.

Company PBT for the third quarter of 2021/22 at Rs.476 million is a 79 per cent decrease against the Rs.2.26 billion recorded in the corresponding period of 2020/21, mainly as a result of a decline in dividend inflows to the Holding Company due to the timing of dividend receipts. Company PBT for the first nine months of the financial year 2021/22 at Rs.3.40 billion is a 26 per cent decrease against the corresponding period of 2020/21.

The positive momentum of the Group's performance during the quarter is largely on account of the COVID-19 pandemic being well contained in Sri Lanka, primarily as a result

of the successful vaccination drive where almost the entirety of the adult population is fully vaccinated. Whilst new variants have emerged globally, the risk of an outbreak of serious cases is expected to be contained given the high vaccination rates, including the administration of booster doses which

is currently being rolled out across the country.

It is encouraging to witness the resumption of tourist arrivals to the country, where arrivals in December 2021 was recorded at approximately 90,000 for the month; the highest figure achieved in 20 months. The re-opening of the country for tourism will be a key catalyst to drive the recovery of the economy, particularly in the context of the positive impact it will have on foreign exchange earnings. Whilst the foreign exchange market continued to witness significant volatility and uncertainty during the quarter, the strong balance sheet of the Group and cash reserves aided in navigating this period, with operations and investments continuing, as planned.

Despite the challenging macroenvironment, the USD 395 million syndicated loan at 'Cinnamon Life', which was due for repayment by July 2022, was refinanced through a USD 325 million loan facility in December 2021. In addition to the proceeds from the refinancing facility, proceeds from the sales of the

apartments and cash reserves were utilised to settle the remaining outstanding of the original syndicated loan facility. The refinanced facility comprises of two tranches; where the main loan is a five-year syndicated term loan for USD 225 million, and the second tranche of USD 100 million is a six-month bridging loan facility to align with the maturity date of July 2022 under the original facility. The refinancing facility was concluded at a rate similar to the previous facility taking into account step- down pricing triggers as well.

As announced to the Colombo Stock Exchange in November 2021 and subsequent to shareholder approval at an Extraordinary General Meeting held in December 2021, JKH issued 65,042,006 ordinary shares at Rs.154.50 per share to Asian Development Bank (ADB) on 19 January 2022, for a consideration of USD 50 million. As detailed in the Circular to the shareholders, ADB was issued 39,025,204 non- tradeable/non-transferable options, which will entitle ADB to subscribe for additional new ordinary shares until 18 January 2023 for an amount of up to the LKR equivalent of USD 30 million. The USD 50 million of funds raised under Phase 1 of the private placement was received by JKH in US dollars pursuant to the relevant directives of the Central

Bank of Sri Lanka. The receipt of these funds, together with our existing cash reserves, will afford the Group the flexibility and agility to fund our investments in an optimal manner, whilst providing additional support to the Group's liquidity position and managing the foreign currency commitments of the Group's landmark projects such as the 'Cinnamon Life' integrated resort and the West Container Terminal-1 in the Port of Colombo. The Group is pleased to have an internationally reputed financial institution such as the ADB as a shareholder, particularly at this juncture of time, which is a vote of confidence for JKH and the country and we will work towards obtaining technical expertise from ADB, including further driving our ESG strategy and building capacity for climate resilience and farmer assistance initiatives.

Transportation

The Transportation industry group EBITDA at Rs.1.40 billion in the third quarter of 2021/22 is an increase of 50 per cent against the EBITDA for the corresponding quarter of the previous financial year [2020/21 Q3: Rs.930 million]. The increase in profitability is primarily

attributable to the performance of the Group's Ports business, South Asia Gateway Terminals (SAGT), and the Bunkering business, Lanka Marine Services (LMS). The profitability at SAGT recorded an increase as a result of improved volumes and higher revenue from ancillary operations, despite the marginal shift in the throughput mix on account of the continuing import restrictions in place in the country. It should be noted that SAGT volumes in the third quarter of 2020/21 were impacted due to a brief industrial disruption which affected operations for a few days. LMS recorded an increase in profitability driven by an increase in margins.

Colombo West International Container Terminal (Private) Limited (CWIT), the project company for the development of the West Container Terminal-1(WCT-1) in the Port

of Colombo, is currently in the final stages of fulfilling the conditions precedent in the Build, Operate and Transfer (BOT) agreement, and the handover of the site for the commencement of construction is expected to take place in the ensuing quarter. The debt funding for the project has been secured and the related financing documents are at final stages of execution.

Consumer Foods

The Consumer Foods industry group EBITDA of Rs.1.00 billion in the third quarter of 2021/22 is an increase of 66 per cent against the EBITDA for the corresponding quarter of the previous financial year [2020/21 Q3: Rs.605 million]. The Beverages, Frozen Confectionery and Convenience Foods businesses continued their strong recovery momentum as all three segments recorded strong double-digit growth in volumes during the quarter and saw strong growth in profitability driven by the significant operating leverage. Whilst

the businesses undertook price increases in selective SKUs to mitigate the impact of increasing raw material prices, the pressure on product margins is likely to continue over the next few quarters although any such impact could be off-set by the significant operating leverage going forward on account of higher volumes. It is encouraging to note that the volumes of the Beverages and Frozen Confectionery businesses reached pre-pandemic levels during the quarter, particularly driven by the seasonal sales in December 2021.

2 JOHN KEELLS HOLDINGS PLC | INTERIM CONDENSED FINANCIAL STATEMENTS NINE MONTHS ENDED 31 DECEMBER 2021

Retail

The Retail industry group EBITDA of Rs.2.27 billion in the third quarter of 2021/22 is an increase of 34 per cent against the EBITDA for the corresponding quarter of the previous financial year [2020/21 Q3: Rs.1.70 billion]. The Supermarket business EBITDA at Rs.1.58 billion is a 16 per cent increase against the comparative quarter [2020/21 Q3: Rs.1.37 billion]. The performance of the Supermarket business continued its strong recovery momentum with same store sales recording an encouraging growth for the quarter under review.

Four new outlets were opened during the quarter, increasing the total outlet footprint to 128 as of 31 December 2021. The business will continue to selectively expand its outlet network considering the underlying growth prospects and emerging opportunities

for the industry. During the quarter under review, a new concept 'Keells' store was opened at Lauries Road, Colombo, taking into consideration feedback from customers seeking a world-class shopping experience with technology, atmosphere and product range. This store brings innovative technology features such as 'scan & go', self-checkouts and a food ordering kiosk in a very sleek and contemporary atmosphere. In keeping with our strategy of promoting fresh produce and ready to consume food, a 'Kafe' serving affordable coffee, snacks and beverages also is a key feature of the store. These elements will be rolled out in selected outlets in our expansion plans.

The construction of the new centralised distribution centre in Kerawalapitiya is nearing completion with operations expected to commence in the ensuing quarter. This will augment the offering of the Supermarket business, given its ability to cater to its outlet expansion in the medium to long-term

and translate into significant process and operational efficiencies, particularly given the centralisation of almost the entirety of the dry and fresh range.

The Office Automation business recorded a strong increase in profitability driven by a growth in mobile phone volumes.

Leisure

The Leisure industry group EBITDA of Rs.1.23 billion in the third quarter of 2021/22 is significant turnaround compared with the comparative period of the previous financial

year [2020/21 Q3: negative Rs.1.01 billion]. The turnaround in performance is on account of the strong performance of the Maldivian Resorts and the encouraging recovery momentum witnessed in the Sri Lankan Leisure businesses as a result of the relaxation of travel restrictions and the reopening of the airport. In addition to the Maldivian Resorts segment, both the Colombo Hotels and Sri Lankan Resorts segments recorded a positive EBITDA in the month of December 2021.

The Maldivian Resorts segment continued its recovery momentum where the occupancy at our hotels reached pre-pandemic levels during this quarter on the back of recoveries in arrivals. It is encouraging to witness the continuous momentum of forward bookings for the next few months in the Maldives, demonstrating a significant 'pent-up' demand for leisure travel. It should be noted that the average room rates for the quarter are based on rates which predominantly comprised of forward bookings at the time where tourist arrivals were at early stages of recovery. Based on the current forward booking trends and rates, the average room rates for the ensuing quarter are expected to recover to pre- pandemic levels.

With the easing of restrictions, the Colombo Hotels witnessed a significant pick-up in the number of events and banquets while restaurant operations have reverted to pre- pandemic levels, particularly during the month of December 2021.

All the Group's Sri Lankan Resorts recommenced operations during the quarter with the relaxation of travel restrictions. With domestic tourism still being a key catalyst, it is encouraging to note that almost all properties recorded a positive EBITDA for the month

of December 2021. With the resumption of international tourism, we remain confident that operations will continue to recover over the next few months as our properties are well prepared and geared to take advantage of the pent-up demand for leisure travel from the various markets.

Property

The Property industry group EBITDA of Rs.707 million in the third quarter of 2021/22 is a significant increase against the EBITDA for the corresponding quarter of the previous financial year [2020/21 Q3: Rs.14 million].

The revenue and profit recognition from the handover of the commercial office spaces,

along with the residential apartment units at 'Cinnamon Life' continued during the quarter under review. In addition, the profits include the recognition of the recurring revenue from the lease component of five commercial office floors at the 'The Offices' at 'Cinnamon Life' which commenced from the month of December 2021.

The momentum of construction at 'Cinnamon Life' is progressing well, where the residential and the commercial components of the 'Cinnamon Life' project are now completed, with the second residential apartment tower 'The Residence at Cinnamon Life' ready for customer handover from February 2022 onwards. The Group has commenced discussions with key tenants of the retail mall, with various alternatives being considered for the retail space to ensure unique attractions and offerings.

Construction of the 'Tri-Zen' development continued to progress well with the towers reaching 52 floors. The sales momentum and interest towards 'Tri-Zen' continued to strengthen with pre-sales increasing substantially during the quarter. The Group is confident that this sales momentum will continue to improve in conjunction with the on-going recovery from the pandemic and a trend of shifting of asset investment classes by some customers. The revenue recognition cycle of 'Tri-Zen' will continue to ramp up as the project progresses.

The newly revamped 'Crescat' mall was launched in November 2021, offering a revitalised, upmarket shopping and dining experience for Colombo's shoppers.

Financial Services

The Financial Services industry group EBITDA at Rs.2.11 billion in the third quarter of 2021/22 is an increase of 72 per cent against the EBITDA for the corresponding quarter of the previous financial year [2020/21 Q3: Rs.1.23 billion]. The significant improvement in profitability is mainly on account of the Group's Insurance business, which recorded encouraging double-digit growth in gross written premiums, which reached pre- pandemic levels. The new business premiums in particular recorded an encouraging increase. Nations Trust Bank (NTB) recorded an increase in profitability driven by positive loan growth and lower operating expenses.

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