MOVING WITH THE TIMES JOHN KEELLS PLC ANNUAL REPORT 2019/20 JOHN KEELLS PLC In every step we take, John Keells PLC has always kept up with the fast-changing world – staying at the top of our game even as we embrace change and welcome the challenges it brings. We have mastered our traits through the years of our existence to fine-tune and perfect our trade to fulfill the needs of each stakeholder. Our winning formula has been decades of experience and market leadership juxtaposed with the latest in technology and innovation. Now more than ever before, industries such as ours must be resourceful and responsive to remain relevant, and to thrive through innovation and transformation. At John Keells PLC, we stand ready to lead that change. CONTENTS ABOUT US 04 | About Us 05 | Introduction to the Report 06 | Group Structure 07 | Senior Management Team 08 | Performance Highlights 09 | Key Events 10 | Milestones 12 | Chairman’s Statement MANAGEMENT FINANCIAL DISCUSSION AND INFORMATION ANALYSIS 16 | Management Discussion & Analysis 72 | Financial Calendar 24 | Financial Review 73 | Independent Auditor’s Report 30 | Human Resources & CSR 76 | Income Statement 77 | Statement of Comprehensive Income 78 | Statement of Financial Position 79 | Statement of Changes in Equity STEWARDSHIP 81 | Cash Flow Statement 83 | Index to the Notes 84 | Notes to the Financial Statements 36 | The Board of Directors 132 | Information to Shareholders and 38 | Corporate Governance Investors 54 | Enterprise Risk Management 135 | Key Ratios & Information 60 | Report of the Board Audit Committee 136 | Five year Summary 63 | Report of the Related Party Transactions 138 | Glossary of Financial Terms Review Committee 64 | Annual Report of the Board of Directors Inner Back Cover | Corporate Information 70 | Statement of Directors’ Responsibilities 2 ANNUAL REPORT 2019/20 | JOHN KEELLS PLC ABOUT US JOHN KEELLS PLC | ANNUAL REPORT 2019/20 3 ABOUT US John Keells PLC has streamlined its operations to welcome challenges and adapt to change while moving with the times in a fast-changing world. Today we have become a paradigm of innovation prospering through 150 years of experience and market leadership while setting a benchmark of quality, brand excellence, and good governance. This report analyses the responsive strategies and resources that have enabled us to thrive, transform, and remain pertinent to our stakeholders, enabling them to pursue the future and what it holds. Resilience is our greatest source of confidence through turbulent times and economies. Our Annual Report demonstrates how we have moved with the times and performed exceptionally across a range of indicators by maintaining our long-term vision both now and into the years ahead. JOHN KEELLS PLC VISION To be internationally recognised as the best Produce Broker in the world. MISSION To retain the pre-eminent position as Sri Lanka’s leading Tea and Rubber broker; To uphold the traditions and ethics of the Tea and Rubber trades; To ensure superior customer service through a dedicated and motivated workforce. VALUES We are committed to the highest level of integrity and ethical conduct in all our business activities. We will look towards exceeding shareholder and customer expectations by achieving excellence in all areas of operations. We recognise the right of every individual to be treated with fairness, dignity and respect and assist our employees to improve their skills and reward their accomplishments. We will focus on corporate social responsibility and look to protect and safeguard the environment. 4 ANNUAL REPORT 2019/20 | JOHN KEELLS PLC INTRODUCTION TO THE REPORT The Board of Directors along with the Management of John Standards and principles Keells PLC, always strive to keep the stakeholders informed Governance, Risk Management and Operations with regards to the affairs of the Company. Therefore, it is with • Laws and Regulations of the Companies Act No. 7 of much pleasure, we present to you our Annual Report for the 2007 financial year 2019/20, compiled in accordance with relevant reporting frameworks as elaborated in this section. This Report • Listing Rules of the Colombo Stock Exchange (CSE) and will narrate the value creating ability of John Keells PLC (herein subsequent revisions to date referred to as the “Company”) its subsidiaries; John Keells • Code of Best Practice on Corporate Governance jointly Warehousing (Pvt) Ltd (JKW) and John Keells Stock Brokers advocated by the Securities and Exchange Commission (Pvt) Ltd (JKSB), and associate company; Keells Realtors (KRL) of Sri Lanka (SEC) and the Institute of Chartered (herein referred to as the “Group”) in the short, medium and Accountants of Sri Lanka (CA Sri Lanka) long term. • Code of Best Practices on Related Party Transactions (2013) advocated by the Securities and Exchange Adhering to the local and international regulations & Commission of Sri Lanka (SEC) guidelines on Financial and Non-Financial reporting, this report will carry the Financial Statements, Reports, other Financial Reporting statements and disclosure of specified information to serve our • Sri Lanka Accounting Standards (SLFRSs / LKASs) issued diverse stakeholders’ information requirements. The following by the Institute of Chartered Accountants of Sri Lanka describes the basic information that provide the basis of (CA Sri Lanka) preparation of this Annual Report and that will be useful in reading and understanding this report. Enterprise Governance We value good governance as we believe that it forms the Reporting Scope and Boundaries foundation of relationships that we build and maintain The Annual Report 2019/20 of John Keells PLC covers the throughout our business engagements. The section on operations of the Company and the Group for the reporting Corporate Governance given on pages 38 to 53 of this period from 1st April 2019 to 31st March 2020. Any material report elaborates how we implement and execute corporate event post this reporting period, up to the date of sign-off by governance practices in the Company and the Group. the Board of Directors on 21st May 2020, have been disclosed The section also describes the mandatory and voluntary in note no. 37 to the financial statements ensuring relevance compliances the Group has made with regards to the and reporting accuracy. Our last report for the most recent corporate governance provisions laid out in the Code of financial year ending 31st March 2019 is available on our Best Practice on Corporate Governance jointly issued by the website www.johnkeellstea.com. Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and Securities and Exchange Commission of Sri Lanka (SEC). The Consolidated Financial Statements of the Group laid out in pages from 76 to 82 provides information on financial Forward-Looking Statements reporting of the Group. Management discussion appearing Within this report, you will find forward-looking statements from pages 16 to 34 identifies the activities of the Group. and information. Such information is based on management This report also covers risks, opportunities and outcomes that experience & judgment, current and forecasted economic could materially affect the organization’s ability to create conditions and a variety of other factors. However, the reality value. There were no significant changes to the Group’s size, may differ from the anticipated performance, and hence may structure, shareholding or supply chain during the period change our business expectations, future outlook, plans and under review. There were also no material re-statements of forecasts. Therefore, shareholders and other stakeholders information from the previous reporting period. are advised to be cautious on placing too much emphasis on such forward-looking statements provided herein. The Company does not undertake to update publicly the forward- looking statements to reflect the changes after the date of this report, except, in compliance with the applicable rules and regulations set by the relevant statutory and regulatory bodies. Contact Person For any inquiries and feedback with reference to this report please contact Devika Weerasinghe - Chief Financial Officer John Keells PLC, No. 186, Vauxhall Street, Colombo 02. E-mail: [email protected] JOHN KEELLS PLC | ANNUAL REPORT 2019/20 5 GROUP STRUCTURE John Keells Holdings PLC Transportation Sector Leisure Sector Property Development Sector Consumer Foods and Retail Sector Financial Services Sector Information Technology Sector Plantation Services 37.62% Sector 86.90% Produce Broking - Tea & Rubber Tea Smallholders Factories John Keells PLC PLC 100% Produce Warehousing - Tea John Keells Warehousing (Pvt) Ltd 76% Stock Broking John Keells Stock Brokers (Pvt) Ltd 6 ANNUAL REPORT 2019/20 | JOHN KEELLS PLC SENIOR MANAGEMENT TEAM JOHN KEELLS PLC [Inc. 1960] JOHN KEELLS STOCK BROKERS (PVT) LTD [Inc.1979] • Hishantha De Mel – Chief Executive Officer / Vice • Tivanka Ranayake – Chief Executive Officer / Vice President John Keells Holdings PLC President John Keells Holdings PLC • Devika Weerasinghe – Chief Financial Officer / Executive • Sherin Cader – Chief Financial Officer / Executive Vice Vice President John Keells Holdings PLC President John Keells Holdings PLC • Ravin Vannitamby – Head of Operations / Assistant Vice • Akmal Mashoor – Head of Sales / Assistant Vice President President John Keells Holdings PLC John Keells Holdings PLC • Dasarath Dasanayaka – Head of Manufacturing – High • Navin Ratnayake – Head of Research / Assistant Vice Grown Tea President
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