Abans PLC / Annual Report 2017/18
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ABANS PLC / ANNUAL REPORT 2017/18 THE PAST, THE PRESENT, THE FUTURE; WE AT ABANS PRESENT THE ANNALS OF A GOLDEN ERA THAT HAS MADE US ONE OF SRI LANKA’s MOST RECOGNISED AND RESPECTED BUSINESS ENTITIES NOW AND IN THE YEARS TO COME. AS WE CELEBRATE 50 YEARS OF INGENUITY, PASSION AND EXCEPTIONAL SERVICE, WE BRING TO MIND THE MILESTONE MOMENTS AND DEDICATION TO CUSTOMER CENTRICITY THAT HAS BROUGHT US TO WHERE WE ARE TODAY. Abans PLC | Annual Report 2017/18 | 1 Overview Management Discussion and Analysis OVERVIEW ManagEMENT Governance and Compliance Financial Reports The Abans Story 4 DISCUSSION AND Supplementary Information Our Journey 6 ANALYSIS Our Presence 7 Colombo City Centre 8 Industry Overview 29 Abans’ Milestones 12 Financial Review 31 Financial Highlights - Group 14 Performance of Subsidiaries 35 Group Structure 16 Product Portfolio Management 37 Branch Network 17 New Products at Abans 42 Message from the Chairperson 18 Awards and Recognition 49 Board of Directors 22 Channel Management Strategy 51 Managing Director’s Review of Performance 25 ICT Integration 55 Customer Engagement 56 COLOMBO Human Resource Management 60 08 CITY CENTRE Corporate Social Responsibility 66 NEW 42 PRODUCTS AT ABANS VISION To attract and retain our customers for life... MISSION Adding value to our most precious asset, our customers, by bestowing a novel range of world-class products and services that reflect comfort, convenience and quality. 2 | Abans PLC | Annual Report 2017/18 GOVERNANCE AND SUPPLEMENTARY COMPLIANCE INFORMATION Risk Management 71 Statement of Value Added 181 Corporate Governance 77 Investor Information 182 Annual Report of the Board of Directors 90 Five Years Summary - Statement of Directors’ Responsibility 93 Statement of Financial Position 184 Audit Committee Report 94 Five Years Summary - Statement of Profit or Loss 186 Board Remuneration Committee Report 96 Real Estate Portfolio 188 Glossary 190 Notice of Meeting 193 FINANCIAL Notes 194 REports Form of Proxy 195 Corporate Information Inner Back Cover Independent Auditor’s Report 99 Statement of Profit or Loss 102 Statement of Comprehensive Income 103 INVESTOR 182 Statement of Financial Position 104 INFORMATION Statement of Changes in Equity 106 Statement of Cash Flows 107 Notes to the Financial Statements 109 STATEMENT OF 104 FINANCIAL POSITION Abans PLC | Annual Report 2017/18 | 3 Overview Management Discussion and Analysis Governance and Compliance Financial Reports THE ABANS STORY Supplementary Information A Lifetime of Achievements Interviewed by Sri Lanka’s Honoree and KOTRA Plaque of The Award of Prof. Geoffrey Entrepreneur Leading Woman Appreciation – 2005 Excellence for Jones of Harvard of the Year at Entrepreneur of for forging strategic Woman Achievers Business School Derana the World at the foreign economic for Outstanding on the topic of Sri Lankan of Leading Women ties between South Achievement “Creating Emerging the Year Awards Entrepreneurs of the Korea and Sri Lanka, from the SAARC Markets.” 2017. World Awards 2006, presented by Mr. Women’s Bangkok, Thailand, Young-Kyo Oh, Association in presented by the President and CEO 2000. Princess of Thailand. of Korea Trade- Investment Promotion Agency (KOTRA). “FIFTY YEARS ON, ABANS CONTINUES embassy auctions and reselling these items for a reasonable price with a guarantee at a little store at Galle Road, Bambalapitiya. She TO Achieve several “firsTs” in SRI also set up a makeshift workshop in her home garage to repair and LANKA, SETTING HIGH BENCHMARKS FOR service the appliances sold by her, being the first such workshop OTHERS TO FOLLOW. ONE EXAMPLE IS to do so in Sri Lanka. THE COLOMBO CITY CENTRE, SRI LANKA’s Despite being a relative unknown in a then male-dominated FIRST MIXED-USE COMMERCIAL BOI industry, Mrs. Pestonjee’s store became highly popular due to her PROJECT.” strong emphasis on personalised customer relations, efficient after-sales service, and high-quality appliances. Fifty years ago, a simple housewife had a vision. A vision to help In 1978 when Sri Lanka emerged into an open economy and Mrs. other housewives alleviate the burden of their household chores. Pestonjee assessed an increased consumer demand for global This vision manifested itself as a small corner shop, and then brands, she started writing letters to reputed British companies into Abans, a mighty conglomerate of over 45 companies with to import their respective white goods. At first several companies showrooms across the island. And the housewife’s name was Mrs. refused. However, her staunch persistence led to Electrolux Aban Pestonjee. representatives visiting her store and service centre, which was located in her garage. Deeply impressed with Mrs. Pestonjee’s In an era where there was a paucity of women in business, Mrs. ability to provide effective after-sales services, Electrolux became Aban Pestonjee boldly embarked on the goal of making the lives the first brand to join hands with Abans to enter the Sri Lankan of homemakers like herself easier and more convenient. She market. Other famous brands including Hoover soon started began repurposing second hand home appliances retrieved from knocking on her door. 4 | Abans PLC | Annual Report 2017/18 Overview Management Discussion and Analysis Governance and Compliance Financial Reports Supplementary Information Guided by the simple business model of “Hard Work, Honesty, Further, Abans’ transformation into Sri Lanka’s most trusted and Perseverance”, Mrs. Aban Pestonjee’s tireless efforts have household name remains a singular account of how sheer tenacity, resulted in the Abans Group of Companies being the corporate integrity, a willingness to take risks, and a passion for innovation giant it is today. The conglomerate is currently divided into six can guarantee true success in business. It is a story of how a strategic business categories encompassing retail, services, resolute woman can lead a team of proactive, talented and driven logistics, manufacturing, real estate and infrastructure. Abans PLC, individuals to not only permanently redefine the retail industry in the organisation’s flagship company and retail arm, possesses a Sri Lanka, but also uplift the standard of living for local citizens. vast island-wide network which spans over 450 showrooms and 17 service centres. Brands such as LG, Apple, SKECHERS, Haier, Dell, Fifty years on, Abans continues to achieve several “firsts” in Sri and many others presently form a part of Abans PLC’s extensive Lanka, setting high benchmarks for others to follow. One example brand portfolio. Mrs. Pestonjee’s keen eye for talent has also is Colombo City Centre, Sri Lanka’s first of its kind mixed-use produced jobs for approximately 13,000 people across the Group commercial BOI project. Developed under the benevolent leadership of Companies, which further underscores Abans’ significant impact of Mrs. Aban Pestonjee and other preeminent directors, this venture on the Sri Lankan economy. will comprise of 192 high-end residences with panoramic views of the city skyline, Beira Lake, and Indian Ocean, the upscale NEXT Mrs. Aban Pestonjee’s reputation still commands immense Hotel, and the island’s first international mall which is slated to open international and local acclaim from her contemporaries in in 2018. The Colombo City Centre stands to revolutionise local the field. Her incredible dedication and persistence has left an urban lifestyles and become an iconic landmark of Colombo. indelible mark in the business world, with her legacy continuing to inspire generations of female entrepreneurs to emulate her So we dedicate this joyous occasion of Abans’ golden anniversary professional journey. to Mrs. Aban Pestonjee, an inspirational leader, a progressive entrepreneur, a loving wife, mother, grandmother and great grandmother. Abans PLC | Annual Report 2017/18 | 5 Overview OUR JOURNEY Management Discussion and Analysis Governance and Compliance Financial Reports Supplementary Information 6 | Abans PLC | Annual Report 2017/18 Overview OUR PRESENCE Management Discussion and Analysis Governance and Compliance Financial Reports Supplementary Information Trading Financial Services Automobile Services Abans PLC Abans Finance PLC Abans Auto (Pvt) Ltd. Engineering Warehousing & Logistics Manufacturing & Services Abans Engineering Abans Logistics (Pvt) Ltd & Crown Abans Electricals PLC (Pvt) Ltd. City Developers (Pvt) Ltd Facilities Management Security, Cash Transportation Restaurants Management, Electronic Security & Related Services Abans Environmental Services Abans Restaurants Systems (Pvt) (Pvt) Ltd., Cleantech (Pvt) Ltd. Ltd. (Franchisee for McDonalds) AB Securitas (Pvt) Ltd Courier Services Documentary Management Real Estate and Infrastructure & Electronic Archiving DOC Solutions Colombo City Center AB Courier (Pvt) Ltd Lanka (Pvt) Ltd. Partners (Pvt) Ltd Abans PLC | Annual Report 2017/18 | 7 Overview Management Discussion and Analysis Governance and Compliance Financial Reports Supplementary Information Colombo City Centre Residencies which consist of 192 upscale apartments can be simply described as a man made heaven in the pearl of the Indian Ocean. Making an iconic contribution to the changing landscape in the rapidly developing city of Colombo, the Abans Group, along with their well-renowned Singapore based Joint Venture Partner Next Story Group (formally, known as Silver Needle Hospitality) are engaged in developing Colombo City Centre - the largest project by Abans Group in its property development arena. By the end of the financial