EXPOLANKA HOLDINGS PLC INTEGRATED ANNUAL REPORT 2020/21 EXPOLANKA HOLDINGS PLC | INTEGRATED REPORT 2020/21 2 fruitionEXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 At Expolanka, we remain fully committed to our promise made several years ago, to drive long term sustainable value, by adapting a focused, constant and consistent strategy. Even though the year under review post several challenges, we were able to pursue our said strategies and bring to fruition our plans for progress which was fueled by our innate resilience and strength. The seeds we planted have taken root and we keep our focus upward, expanding in our focused direction in order to adapt to the current environment. We remain fruitful in our optimism, our can-do attitude and endurance, a recipe for success that will carry us through to more opportunity. Overview EXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 2 CONTENTS Chairman’s Overview Compliance Reports 12 About Us 3 Corporate Governance 71 Message About this Report 4 Risk Management Report 93 Group Milestones 5 Related Party Transactions Financial Highlights 6 Review Committee Report 101 15 Group CEO’s Highlights of the Year 7 Remuneration Committee Report 103 Review Chairman’s Message 12 Group CEO’s Review 15 Financial Reports Board of Directors 18 Annual Report of the Board of Directors Group Senior Management Team 20 on the Affairs of the Company 108 23 Financial Indicators 22 The Statement of Directors’ Responsibility 112 Performance Group Performance 23 Audit Committee Report 113 Overcoming COVID-19 Challenges 24 Independent Auditors’ Report 116 Group Strategy 25 Statement of Financial Position 120 39 Capital Statement of Profit or Loss 121 Management Integrated Management Discussion Statement of Comprehensive Income 122 and Analysis Statement of Changes in Equity 123 Reports Sustainability Strategy 27 Statement of Cash Flows 124 Material Topics and Topic Boundaries 28 Notes to the Financial Statement 125 Stakeholder Engagement 33 60 Sector Stakeholder Value Creation 37 Supplementary Information Report Capital Management Reports 39 Group Real Estate Portfolio 187 Financial Capital 39 Five Year Summary 188 Manufactured Capital 40 Share Information 189 Corporate Intellectual Capital 41 Corporate Information 192 71 Human Capital 43 Notice of Meeting 194 Governance Natural Capital 49 Form of Proxy 195 Social and Relationship Capital 52 GRI Index 54 192 Corporate Operational Review Information Organisational Structure 57 Our Footprint 58 120 Statement Sector Report 60 Logistics Sector 60 of Financial Leisure Sector 65 Position Investment Sector 68 Overview EXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 3 ABOUT US Who We Are Expolanka Holdings PLC is headquartered in Sri Lanka with interests in global logistics, travel & leisure and investments. The Group’s reputation is built on a track record spanning over 40 years of excellence in serving its chosen markets. Moreover, Expolanka Companies are widely regarded as game changers known for their ability to seize potential opportunities for growth and innovation and thereby remain a cut above the rest. “Building a great business with a dare to do spirit” Our Values To always follow ethical business principles in transacting & managing business Caring for stakeholder’s interests Commitment to Excellence Innovation & Entrepreneurship Overview EXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 4 ABOUT THIS REPORT GRI 102-12, 102-46, 102-48 102- 49, prospective investors and all other key Directors Statement of Responsibility for this stakeholders. These Material matters are Report 102- 50, 102- 51, 102- 52, 102-53, described on page 28 of this report. We the Board of Directors of Expolanka 102- 54, 102-56 Holdings PLC acknowledge our responsibility In our 7th Integrated Annual Report, we Reporting Frameworks for confirming the integrity of the Group’s continue to advocate the principles of integrated Our Integrated Reporting process, as well as Integrated Report for the year 2020/21. reporting. We believe that this approach has the contents of this report, are guided primarily served us well in the past by providing the by the principles outlined by the International Reflecting on our operating context, strategy framework to report on the progress made Integrated Reporting Council (IIRC) Integrated and value creation model, we believe this by Expolanka Holdings PLC (Expo Group) in Reporting Framework <IR>. In the interest Integrated Report addresses all matters meeting the expectations of its stakeholders. of greater transparency, certain sections of that have, or could have, a material effect on the report also refer to the Global Reporting our ability to create value. We have applied This report is prepared for the benefit of Expo Initiative (GRI) Standards (“Core” option). our collective judgment in the preparation Group stakeholders and as such contains and presentation of information in this information relevant to the way we create The Corporate Governance section has been Integrated Report and are satisfied that the value for all key stakeholders, including prepared in accordance with the Code of Best aforementioned reporting principles have been our employees, clients, regulators and Practice on Corporate Governance issued applied properly. communities. jointly by the Institute of Chartered Accountants of Sri Lanka, the Securities and Exchange Feedback Commission of Sri Lanka and The Colombo Our most recent integrated report for the year For further information or feedback please ended 31st March 2020, as well as the reports Stock Exchange (CSE).The report further complies with Listing rules of the CSE. contact: for the past 10 years are available on our Mushtaq Ahamed website: www.expolanka.com. Assurance Director - Group Finance, Expolanka Holdings PLC We employ a combined assurance model to Address : 15A Clifford Avenue, Colombo 03. Scope and Boundary Email : [email protected] This report covers the period 01st April 2020 assess and assure various aspects of business to 31st March 2021, which coincides with our operations. financial reporting cycle. The report provides an overview of the primary activities of the Expo Internal / Independent Group including strategy, targets and objectives External as well as the key performance indicators for Sustainability the year. Entities that are not operationally X controlled by the Group are not included in the Reporting scope of this Integrated Annual Report. Corporate X Governance To reflect the importance assigned to Financial integrated thinking, the report extends beyond X X financial reporting and includes non-financial Reporting performance, opportunities, risks and outcomes attributable to or associated with our key Forward Looking Statements stakeholders, which have a significant influence This report contains certain on our ability to create value. forward-looking statements with respect to the financial condition and results of operations of There were no significant changes from Expolanka Holdings PLC, which by their nature, previous reporting periods in the scope involve risk and uncertainty because they and aspect boundaries, nor were there any relate to events and depend on circumstances restatements to the Annual Report issued in the that may or may not occur in the future. previous reporting year. Factors that could cause actual results to differ materially from those in the forward-looking Materiality statements include global and local economic The principle of Materiality has been applied conditions, competitive and regulatory factors etc. Consequently, the Expo Group does not to define the content to be presented in this Scan QR code integrated report. Accordingly, the report undertake to review and revise any of these captures the opportunities and challenges that forward-looking statements at a later date. have a Material impact on the Expo Group and its ability to be a sustainable business entity that consistently delivers value to shareholders, www.expolanka.com Overview EXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 5 GROUP MILESTONES 2017-19 Expolanka focused 2014-16 on consolidation and S G Holdings Global Pte. expansion Ltd. purchased a majority shareholding of Expolanka Holdings PLC 2013-17 Expolanka restructured its 2011 portfolio Listed on the main board of the Colombo Stock Exchange via an Initial Public Offering 1993 EFL began operations beyond borders by establishing its first overseas office 1982 Expolanka started operations in the freight sector through the incorporation of Expolanka Freight (Pvt) Ltd – Sri Lanka 1978 Expolanka established its business as an exporter of fresh produce through incorporation of Expolanka (Pvt) Ltd Overview EXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 6 FINANCIAL HIGHLIGHTS EBIT Revenue 95.88% - Logistics 98.73% - Logistics 5.59% - Investment 1.12% - Investment -1.47% - Leisure 0.15% - Leisure Revenue Gross Profit EBIT 218,735 Mn 38,431 Mn 16,952 Mn 112% 100% 2,205% PBT PAT 16,585 Mn 14,880 Mn 5,821% 3,498% Overview EXPOLANKA HOLDINGS PLC | INTEGRATED ANNUAL REPORT 2020/21 7 HIGHLIGHTS OF THE YEAR Relief Packages Arranged for Those in Need EFL Extends Footprint to Scandinavian Region – April 2020 – April 2020 At the start of the lockdown in Sri Lanka, EFL EFL setup its first operation in the Scandinavian arranged relief packages for society and the Region with the launch of its Denmark office in community at large with distributions in the April 2020. This expansion enables