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Kelani Vally Plantations PLC a stor y to Tell Kelani Valley Plantations PLC | PLC Plantations Valley Kelani Annual Report 2014/15 Report Annual a story to Tell Kelani Valley Plantations PLC | Annual Report 2014/15 Corporate Information NAME OF COMPANY G4 - 3 MANAGING AGENT Kelani Valley Plantations PLC DPL Plantations (Pvt) Ltd 400, Deans Road, Colombo 10, Sri Lanka LEGAL FORM G4 - 7 A Public Limited Company, incorporated in Sri Lanka SECRETARIES on 18 June 1992. Hayleys Group Services (Pvt) Ltd 400, Deans Road, Colombo 10, Sri Lanka. REGISTRATION NUMBER Telephone : (94-11) 2627650 PQ 58 E-mail : [email protected] ACCOUNTING YEAR END Please direct any queries about the administration of 31 March shareholding to the Company Secretaries. G4 - 5/ 31 STOCK EXCHANGE LISTING REGISTERED OFFICE / HEAD OFFICE The ordinary shares of the Company are listed with the 400, Deans Road, Colombo 10, Sri Lanka Colombo Stock Exchange of Sri Lanka. Telephone : (94-11) 2627700, 2686274-5 (2 Lines) Fax : (94-11) 2694216 PRINCIPAL LINE OF BUSINESS E-mail : [email protected] Producing and processing of Tea and Rubber Website : www.kvpl.com DIRECTORS BANKERS A M Pandithage - Chairman Bank of Ceylon W G R Rajadurai - Managing Director NDB Bank F Mohideen Sampath Bank S Siriwardana Hatton National Bank S C Ganegoda DFCC Bank L T Samarawickrama Citi Bank Dr. K I M Ranasoma Peoples’ Bank C V Cabraal Amana Bank L N De S Wijeyeratne AUDITORS SUBSIDIARIES G4 - 20/ 17 Ernst & Young Kalupahana Power Company (Pvt) Ltd Chartered Accountants Kelani valley Instant Tea (Pvt) Ltd No. 201, De Saram Place, Colombo - 10 Mabroc Teas (Pvt) Ltd Sri Lanka Hayleys Global Beverages (Pvt) Ltd AUDIT COMMITTEE L N De S Wijeyeratne - Chairman F Mohideen C V Cabraal Design & Concept by: Optima Designs (Pvt) Ltd. Printed by: Gunaratne Offset (Pvt) Ltd. Contents Introduction Stewardship Annexure Materiality Assessment 6 Board of Directors 92 Ten Year Summary 210 Milestones 10 Corporate Management Profiles 94 Investor Information 211 Highlights 12 Corporate Governance 97 Environmental Calculations 213 Revenue Distribution Local & Global 14 Risk Management 117 Glossary 214 Our Land 16 Annual Report of the Board of Directors Notice of Meeting 218 Our Spread 17 on the Affairs of the Company 131 Form of Proxy 219 GRI Content Index 135 Corporate Information Inner Back Cover Management Reports Financial Reports Chairman’s Review 18 MD’s Review of Performance 22 Financial Calendar 140 Statement of Directors’ Responsibilities 141 Management Discussion Audit Committee Report 142 and Analysis Managing Directors’ and Chief Financial Officers’ Statement of Responsibility 144 Management Discussion & Analysis 27 Independent Auditors’ Report 145 Value creation 27 Statement of Profit or Loss 146 How To Read This Report Awards and Accolades 34 Statement of Comprehensive In addition to this printed report, an Operational Environment 36 Income 147 electronic copy and comprehensive Operational Review 40 Statement of Financial Position 148 supplementary information are available Financial Review 43 Statement of Changes in Equity 150 on our website Statement of Value Addition 56 Statement of Cash Flows 152 http://www.kvpl.com/ Stakeholder Engagement 58 Notes to the Financial Statements 154 Human Capital Development 61 Environmental Sustainability 70 Independent Assurance Report on the Sustainability Report 89 Kelani Valley Plantations PLC Annual Report 2014/15 /- G4 Reporting Introduction a story to Tell With thousands of people forming the ranks of Kelani Valley Plantations, it is not an easy task to document how much we have impacted their lives. As a business that is focused on long term sustainability by creating better working and living standards, investing in the enhancement of skills and caring for the environment. We know that we have taken significant steps in being more responsible and productive in the industry. The stories we have to tell are ones of hope, resilience and change. Each object that we highlight, speaks not only of one individual but the voices of many who have been a part of our team and have grown with us over the years. These are the stories of Kelani Valley Plantations… a story to Tell About this Report G4 - 32 We are happy to present our third integrated annual is to align our future annual reports with the reporting report that combines the Global Reporting Initiative’s time frame of the Hayleys Group. Therefore, all future (GRIs) G4 framework in accordance with the GRI’s Core Kelani Valley Plantations annual reports will be reporting standard. This report has been externally presented for the 12 months period commencing from assured by Ernst & Young, Sri Lanka, Chartered 1 April to 31 March in the flowing year. Accountants. G4 - 15 G4 - 29/ 28/ 30/ 15 Our annual report also acts as our Communication of Our previous integrated report for the year 2013, Progress (CoP)for the UNGC. The UNGC COP requirement covered the period from 1 January to 31 December, has been met by incorporating specific disclosures from 2013. The current report differs from our previous what has been designated as relevant to the UNGC’s 10 annual reports by covering 15 month period, starting principles. Therefore, these disclosures were deemed from 1 January 2014 to 31 March 2015 instead of the material to this report and have been used to explain traditional 12 month reporting period. The difference how we upheld our commitments to the UNGC, during in reporting time frame in the current annual report, the current reporting period. 2 It has a story “Unilever Sri Lanka recognises Kelani Valley Plantation’s commitment to maintain consistently high product quality, whilst continuing to be a role model with its sustainability agenda linked to the Rainforest Alliance™ certification” Shamal De Silva Procurement Manager Unilever Sri Lanka Kelani Valley Plantations PLC Annual Report 2014/15 / G4 Reporting Introduction G4 - 4 Our Profile Incorporated as a plantation company in 1992. Today, we have grown to a diversified agribusiness entity with interests in production, processing, marketing, of plantation crops and hydro power generation. KVPL comprises 26 estates covering over 13,000 hectares sharing almost equal extents of tea and rubber plantations, on a 53 year lease agreement with the Government of Sri Lanka. Our business is managed and operated according to internationally acclaimed standards, through an extensive system of accreditation on sustainable agribusiness management and food safety. Spanning across three distinctive agro climatic regions in Sri Lanka, KVPL produces traditional Ceylon Tea in thirteen tea processing centres. Our high grown estates in Nuwara Eliya produce world renowned light bright teas with delicacy of flavor and quality, whilst our estates in Hatton and Dickoya, produce strong and coloury liquored teas. Our low grown estates in Yatiyantota and Bulathkohupitiya processes orthodox low grown leafy teas. Green tea is produced on our highland estates of Oliphant and Glassaugh and our instant tea processing centres are located in the Nuwara Eliya and Hatton regions. Sole Crepe, Centrifuge Latex and Crepe Rubber is manufactured at our FSC™ certified rubber estates located in the lower elevations of Yatiyantota and Bulathkohupitiya. As a business diversification policy, in association with Eco-Power (Pvt) Ltd., we ventured into generating hydro power by incorporating the Kalupahana Power Company (Pvt) Ltd., in 2003. The Tea product portfolio was further strengthened with the establishment of Kelani Valley Instant Tea (Pvt) Ltd., and Hayleys Global Beverages (Pvt) Ltd., in 2007 and 2013 respectively. In order to pursue direct marketing initiatives more aggressively, Mabroc Teas (Pvt) Ltd., was acquired in the year 2010. We provide employment to nearly 12,000 people and our estates are the traditional homelands for an estate population of nearly 58,000 men, women and children. Our Vision “Kelani Valley Plantations - Products of Excellence” 4 Kelani Valley Plantations PLC Annual Report 2014/15 / G4 Reporting Introduction Our Mission To Optimise Productivity of the Plantations, ensuring Highest Quality, by Harnessing and Developing the Employees, to improve the Quality of Life of the Community, whilst ensuring an Acceptable Return on Investment. Values G4 - 56 We strive to do our best for our stakeholders in the following ways: Our Customers: We provide consistent good quality products and excellent service, at competitive prices, whilst ensuring continuity of supplies. We are conscious of Customer requirements and ever changing market trends and orient our production to suit specific needs. Our Employees: We care for our employees and create a favourable environment for their participation in managing our affairs, thereby increasing productivity. We develop and create individuals who feel contended and secure in their jobs. We recognise merit. Our Suppliers: We establish mutually beneficial relationships with our Suppliers based on trust, quality and reliability. We treat them as we wish to be treated ourselves. Our Owners: We enhance the reputation of the Company through conformity to high levels of conduct. We generate adequate returns and ensure security of their investments by maintaining high viability and long term stability. Our Competitors: We view our competitors as a source of inspiration to our own advancement. We are conscious of their strengths and weaknesses and compete for market superiority without resorting to unethical practices but maintain close co-operation on common issues. Our Country
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