Uml-Annual-Report-2015-16.Pdf
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At United Motors Lanka PLC., we believe in providing something special for everyone. Shaping a better, safer and exciting future on this remarkable journey we started 69 years ago. To our shareholders, a better financial performance with one of the highest returns ever. To our customers, transport solutions from two wheelers, to three wheelers & a range of commercial vehicles and passenger vehicles coupled with a customer centric after sales service platform. To our staff, a work environment that rewards merit and encourages out of the box thinking, innovation and performance. To our principals, a partner passionate in building growth and brand equity. To our society, activities that increase awareness of sustainability and CSR efforts to improve the health and education sectors. To all our other stakeholders, a responsible and transparent partner that they can depend on and trust. We believe in many things, so that we can serve you better. Contents Review of the Business Governance The Company ...................................................... 03 Corporate Governance ....................................... 82 Operational Highlights ....................................... 04 Audit Committee Report ..................................100 Financial Highlights ............................................ 05 Remuneration Committee Report ...................102 Events of the Year ............................................... 06 Nomination Committee Report .......................104 Milestones .......................................................... 12 Related Party Transactions Group Structure .................................................. 14 Review Committee Report ...........................105 Chairman’s Message .......................................... 16 Enterprise Risk Management ..........................106 Group Chief Executive Officer’s Annual Report of the Board of Directors .........112 Review of Operations ..................................... 20 Board of Directors .............................................. 24 Financial Information Senior Management Team of UML .................... 28 Financial calendar ............................................120 Subsidiaries’ CEOs & Heads of Companies ....... 31 Statement of Director’s Responsibility ............121 Senior Management Team of Directors’ Statement on Internal Controls .....123 Subsidiaries & Joint Venture ......................... 32 CEO & CFO’s Responsibility Statement ...........124 Independent Auditors’ Report..........................125 Management Review Statements of Profit or Loss and Group Review ..................................................... 34 Other Comprehensive Income .....................126 Economic Review ............................................... 35 Statements of Financial Position .....................127 Operations Review ............................................. 39 Statements of Changes in Equity ....................128 Performance by UML Subsidiaries .................... 43 Statements of Cash Flows ...............................130 Performance by Joint Venture Companies ....... 44 Notes to the Financial Statements ..................132 Future Outlook ................................................... 46 Financial Review ................................................. 48 Supplementary Information Company Review ................................................ 48 Share Information ............................................185 Cost of Finance ................................................... 50 Ten Year Summary - Group ..............................191 Investor Information ........................................192 Sustainability Report Glossary of Financial Terms ............................193 Blueprint for Sustainability ................................ 54 Notice of Meeting .............................................195 Customers .......................................................... 54 Proxy Form .......................................................199 Shareholders ...................................................... 58 Corporate Information ......................................IBC Human Capital .................................................... 60 Partners .............................................................. 66 Community ......................................................... 75 Environment ...................................................... 76 02 United Motors Lanka PLC | Annual Report 2015/16 Review of the Business The Company Vision To be the best company in Sri Lanka through diversification whilst maintaining the leadership position in the transport industry. Mission To delight and make lifelong relationships with our customers by providing high quality products, services and transport solutions using state-of-the-art The Company was incorporated in technology and developing a team of people who are committed to excellence 1945 as a Private Limited Liability with the highest level of integrity through a corporate culture that encourages Company. It was vested with the participative management to create a socially responsible corporate entity,whilst Government on 8 March 1972 ensuring optimum returns to shareholders. and carried on operations as the Government Owned Business Undertaking (GOBU) of United Motors. Values In 1985, the Company entered into a Our customers and our business: we believe in being customer oriented and distributor agreement with Mitsubishi possess a policy of providing first place to the customer. Customer needs drive Motors Corporation, Japan and has our choice of products and services and the way we deliver them. since then been the sole distributor for brand new Mitsubishi vehicles Our people are our most valuable asset: we will retain and develop quality people in Sri Lanka. In 1989 the Company committed to working as a team to fulfil our corporate mission. We will provide was selected as the first Government our staff with the opportunity to realise their full potential and cultivate their venture for ‘Peoplisation’ with the abilities to the utmost. Whilst individual initiative and performance are recognised, intention of broadening its ownership all are identified with the success of the company and a winning attitude prevails. amongst the public. Accordingly, on 9 May 1989, the Company was renamed Our style of management will encourage employee involvement and a positive as United Motors Lanka Limited and work attitude: we will utilise our resources effectively to maintain a superior incorporated as a Public Limited quality of service by following a policy of continuous improvement, openness to Liability Company. On 30 August 2007, change, search for better ways, speed of action, hard work and an aggressive the Company was reregistered under determination to get things done, which will characterise our attitude towards the new Companies Act No. 07 of 2007 every aspect of our work. as United Motors Lanka PLC. Since becoming a Public Limited Liability Our principals / suppliers are essential to our business: we will pursue a Company, United Motors has achieved confident and mutually beneficial relationship. We will deal fairly and impartially remarkable results and is a leading and provide principals, suppliers and their accredited agents with timely advice of blue-chip company in Sri Lanka today. future requirements and quality expectations. Our company is a responsible member of our community: we believe that our success and growth will contribute to the quality of life of our people and towards this end we will work in harmony with nature and would seek to eliminate all forms of pollution. United Motors Lanka PLC | Annual Report 2015/16 03 Operational Highlights No. of Employees Turnover per Employee (Rs.’000) Inventory Turnover (Times) 1,200 20,000 6.0 900 15,000 4.5 600 10,000 3.0 300 5,000 1.5 0 0 0 15/16 15/16 13/14 13/14 12/13 12/13 14/15 14/15 15/16 13/14 12/13 14/15 Group Company Group Company Group Company PBT per Employee (Rs.’000) Value Added per Employee (Rs.’000) Debtors Collection Period (Days) 6,000 10,000 48 4,500 7,500 36 3,000 5,000 24 1,500 2,500 12 0 0 0 15/16 15/16 15/16 13/14 13/14 13/14 12/13 12/13 12/13 14/15 14/15 14/15 Group Company Group Company Group Company Profit Before Tax (Rs. Mn) No. of Vehicles Sold Earnings Per Share (Rs.) 4,000 10,000 24.00 3,000 7,500 18.00 2,000 5,000 12.00 1,000 2,500 6.00 0 0 0 15/16 15/16 15/16 13/14 13/14 13/14 12/13 12/13 12/13 14/15 14/15 14/15 Group Company Group Company Group Company 04 United Motors Lanka PLC | Annual Report 2015/16 Review of the Business Financial Highlights Group Company 2016 2015 Change 2016 2015 Change % % Profitability (Rs.’000) Turnover 15,303,852 10,538,194 45.22 10,695,375 8,316,203 28.61 Profit before tax 2,353,603 1,625,881 44.76 2,049,981 1,586,165 29.24 Profit attributable to equity holders of the parent 1,702,223 1,262,332 34.85 1,457,126 1,236,867 17.81 Financial position (Rs.’000) Investment in PPE and intangible assets 273,819 141,639 93.32 253,700 139,267 82.17 Non-current assets 6,356,068 5,868,063 8.32 5,694,367 5,388,705 5.67 Current assets 8,735,328 7,281,121 19.97 4,753,719 5,392,161 (11.84) Current liabilities 4,598,093 2,532,239 81.58 1,595,419 1,665,376 (4.20) Non-current liabilities 181,188 181,374 (0.10) 154,070 152,919 0.75 Shareholders’ funds 10,312,115 10,435,571 (1.18) 8,698,597 8,962,571 (2.95) Ratio Interest cover (times) 17.70 20.74 (14.66) 28.51 49.06 (41.89) Profit before tax to revenue (%) 15.38 15.43 (0.32) 19.17 19.07