Annual Report 2008-09.Pdf
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Adam’s Peak… Sri Pada… Sivanolipatha Malai one mountain peak… a footprint at its crest.... intrigues Buddhists who believe the foot print to be that of Lord Buddha… intrigues Hindus who think the footprint may be that of Lord Shiva… intrigues Christians and Muslims alike, who surmise the foot print could be that of Adam as he first set foot on earth… and in being a focal point for the great religions that most Sri Lankans are adherents of... it intrigues us all... as a telling symbol of Unity in Diversity… to a Nation on the threshold of Resurgence and Rebuilding With a history dating back over 2500 years, Sri Lanka was truly the Pearl of the Indian Ocean. We were an important stop along the Silk Route… our spices drew traders from afar to our shores… after the traders, came the colonisers, the Portuguese, the Dutch and the British. Our lush and verdant paddy lands gave way to tea, rubber and coffee… and to other infrastructural development such as roads and railways. This is but a ‘thimbleful’ of the colourful history of the jewel shaped island, Sri Lanka, we call home. As in all affairs of men, we embraced the good and the not so good! External influences brought diversity of races, religions, cultures, food and flora, to name a few. With such change came enrichment as well as enmity… the latter aspect brought into modern focus by an internecine terrorist conflict that had ravaged the country for almost 30 years. And so, the one time ‘Pearl of the Indian Ocean’, ‘Taprobane’, ‘Serendip’ became a ‘Third World’, ‘developing’ and as some would have it, an ‘underdeveloped’ country. Is this truly the real picture? Let’s take stock. Sri Lanka consists of 65,610 square kilometers of unparalleled beauty, bounty and diversity… yes even after all the ravages of history, recent and long past! From the relative aridity of the North, from whence came ample produce and enterprise, to the green and fertile paddy and tea gardens and the urban industrial hubs, there is a nascent prosperity that needs a helping hand to reach full flower. ‘Green’ Sri Lanka existed long before the world woke up to environmental issues… and by and large we enjoy a way of life that supports our eco systems. From Point Pedro to Dondra, ours is a land richly grounded in faith and morals providing a rich religious base for the community. Ours is a highly literate community and one must not lose sight of the fact that we are descendants of a proud land that gave the world some of history’s most stupendous achievements, particularly in irrigation, water management and construction. But time has paled the edge of accomplishment… and today, Sri Lanka stands in need of development to catalyse the resurgence of enterprise lying fallow and to rebuild previously war afflicted areas in the immediate aftermath of the war. But we must realise… that through such development activity must flow true enrichment and safeguarding of national strengths and qualities. It is within this context that one finds LOLC, a Company fully focused on extending the scope of its products and services into the vital areas of Resurgence and Rebuilding of Sri Lanka. We have an excellent pedigree in sustainable business; we espouse good governance practices of the highest standards and have built ourselves into a truly stable entity. More importantly, we realise how vital these qualities are in the context of the renewal and development that must gather momentum. This is an epic undertaking…. one in which YOU can Join us! Play an important role! Photo Catching by LOLC The photographs in these pages, of Sri Lanka in all its diverse beauty, were captured not by a professional photographic unit… but by our own staff. They serve as a reminder of the vast potential that reposes in the country as seen through the eyes of LOLC. It is plainly evident that our task of resurgence and rebuilding is in good hands… in the hands of people who love and cherish their country. Contents Financial Highlights 07 I Chairperson’s Statement 08 I Deputy Chairman’s Review 12 I Group Managing Director’s Review 16 I Board of Directors 22 Corporate Management Team 26 I Operational Management Team 30 I Business Impact Report 32 I Business Synergies 44 Sustainability Review 46 I Human Resources 54 I Expanding Our Reach 58 I Enterprise Governance 60 Enterprise Risk Management Report 72 I Financial Review 78 Financial Report 87 I Audit Committee Report 88 I Remuneration Committee Report 89 I Nominations Committee Report 89 Corporate Governance Committee Report 90 I Annual Report of the Directors on the Affairs of the Company 91 I Directors’ Responsibility for Financial Reporting 97 Chief Executive Officer’s and Chief Financial Officer’s Responsibility Statement 98 I Independent Auditor’s Report 99 I Income Statements 100 I Balance Sheets 101 Statements of Changes in Equity 102 I Cash Flow Statements 103 I Notes to the Financial Statements 105 I Milestones 140 I Ten Year Summary 142 Summarised Quarterly Statistics 143 I Value Addition 144 I Group Companies 146 I Investor Information 149 I Economic and Financial Indicators 151 Glossary 152 I Notice of Meeting 155 I Form of Proxy Enclosed I Corporate Information Inner Back Cover ORIX Corporation was established in 1964 in added value to ORIX with its long track record of Osaka, Japan as Orient Leasing Company Ltd. successful business innovation and diversification. The ORIX by three trading companies and five banks, as a LOLC’s dynamic diversification strategy is based pioneer of leasing. Since its inception, ORIX has on the driving principle that ‘expansion into been on the leading edge of financial innovation new areas will increase our specialisation and and attributes its success to the ability to competitiveness, which will then create new value Connection respond rapidly to changes in the market place. for our customers. This strategy draws inspiration ORIX’s growth strategy has involved expansion from the ‘ORIX-way’ and enables it to sustain Group strategically and geographically, with a boldness synergy, professionalism, expertise, technology, and scope that puts the Company in a class by innovative products and services and a dynamic itself among major Japanese financial services corporate culture. firms. ORIX has a diverse range of revenue streams, from operating and financing leases, low- In addition to the parental guidance margin business focused on auto and equipment LOLC constantly receives from ORIX, it also leasing, insurance, corporate rehabilitation, loan benefits from the global ORIX network by way servicing, real-estate related and other specialised of knowledge transfer, technical expertise and finance, investments and retail banking and compliance standards through its regular reviews value-added services. The Company’s name was and participation in ORIX conferences. changed to ORIX Corporation in 1989 to reflect its increasingly international profile into financial While LOLC gained pioneering status as a leasing services other than leasing and is listed in the entity in Sri Lanka 29 years ago, the Group has now Tokyo and New York Stock Exchanges. morphed into a Total Financial Solutions Provider with an array of services beyond leasing such as Today, ORIX Corporation is the single largest insurance, factoring, savings and fixed deposits, leasing company in the world and the second pawning, micro finance, mortgage loans, islamic largest financial solutions provider in Japan finance, working capital and stock brokering. and has a global network of 231 consolidated The Group has also invested into other business subsidiaries and 100 affiliates throughout 27 streams in line with its long-term business goals. countries worldwide. It has 1,208 offices in Japan, with 298 locations throughout the United States, With the end of the terrorist conflict in the Northern Asia, Oceania, Europe, the Middle East and part of the country, LOLC look forward to playing a Northern Africa. prominent role in the country’s economy to rebuild the nation, having a business model developed The financial year completed was challenging to suit financial needs of the most deserving SME for ORIX, with the global business environment and the Micro sectors. LOLC is also focusing on changing dramatically affecting most international regional expansion opportunities with a view to businesses. The impact on ORIX’s dominant client facilitating cross-border knowledge and technology base in Small and Medium - sized Enterprises transfer, which will enable it to become a financial (SMEs) in Japan, required the Company to adopt a services leviathan. strict approach towards credit. While many global financial giants faced financial crisis, ORIX has LOLC will continue to follow in the footsteps of maintained a healthy level of profits and steered the ORIX while pursuing its management strategy to Group towards long term economic sustainability in contribute to the betterment of society and provide a turbulent environment. greater long-term benefits to its stakeholders by keeping abreast of market trends to continue to Lanka ORIX Leasing Company PLC (LOLC) being create new value. the third Joint Venture of ORIX with the International Finance Corporation (IFC), has relentlessly 01. Australia 14. New Zealand 02. China 15. Oman 03. China (Hong Kong) 16. Pakistan 04. Egypt 17. Philippines 05. England 18. Poland 06. France 19. Saudi Arabia 07. Germany 20. Singapore 08. India 21. South Korea 09. Indonesia 22. Sri Lanka 10. Ireland 23. Taiwan 11. Japan 24. Thailand 12. Kazakhstan 25. UAE 13. Malaysia 26.