The Directors have pleasure in presenting the Annual Report on the State of Affairs, together with the Audited Financial Statements for both the Company and the Group pertaining to the financial year ended 31 March 2023 of Expolanka Holdings PLC and the Auditors’ Report on the Financial Statements. Expolanka Holdings PLC which was incorporated in Sri Lanka on the 5 March 2003 as a Private Limited Liability Company under the Companies Act No. 17 of 1982 and Re-registered on in 2008 as a Limited Liability Company under Companies Act No. 07 of 2007, and in 2011 as a Public Limited Company under Companies Act No 07 of 2007 and the Company’s Re-registration Number is PB 744. The contents of this Report are in accordance with the statutory requirements, the requirements of relevant regulatory authorities and best accounting practices which have been brought to the notice of the shareholders and other stakeholders. These Audited Financial Statements were approved by the Board of Directors on 30 June 2023.
COVENANT AND CORE VALUES
Covenant of Expolanka: “Building great businesses with a dare to do spirit”
Core values of Expolanka;
Follow ethical business principles in transacting and managing business
- Caring for stakeholder’s interests
- Commitment to excellence
- Innovation and entrepreneurship
The business activities of the Company and the Group are conducted maintaining the highest levels of ethical standards in achieving its corporate objectives. All new staff absorbed to the permanent cadre of the Company are briefed on the requirements of the code of conduct and ethics.
Expolanka Holdings PLC, the Group’s holding Company manages a portfolio of investments consisting of a range of diverse business operations, which together constitute the Expolanka Group, and provides numerous function based services to its Group Companies. The Companies within the Group and its holding percentages are described in the section on Notes to the Financial Statements of this Annual Report. The principal activities of the Group are categorised into three sectors namely, Logistics, Leisure and Investment.
BUSINESS REVIEW AND OUTLOOK
A review of both financial and operational performances during the year under review along with financial highlights and future business developments and strategies of the Group and Individual Business Units are described in the Our Businesses section, Chairman’s Message and CEO’s Review of the Annual Report. These reports together with the Audited Financial Statements reflect the state of the affairs of the Company and the Group. The Directors, to the best of their knowledge and belief confirm that the Company and the Group have not engaged in any activities that contravene the laws and regulations of the country and any regulatory institution.
The Audited Financial Statements of the Company and the Group.
The Auditor’s Report on the Financial Statements of the Company and the Group.
Details of accounting policies have been discussed in Note 02 of the Financial Statements. There have been no changes in the accounting policies adopted by the Group during the year under review.
Revenue generated by the Company amounted to Rs. 64,925,515 (2022 – Rs. 92,740,000) whilst Group revenue amounted to Rs. 546,400,880,718 (2022 – Rs. 694,157,420,841). Contribution to the Group revenue from the different business segments is provided in note 27.
RESULTS AND DIVIDENDS
The profit after tax of the holding Company was Rs. 16,578,128,114 (2022 – Rs. 3,736,326,373) whilst the Group profit attributable to equity holders of the parent for the year was Rs. 30,938,134,686 (2022 – Rs. 72,742,531,301). Results of the Company and of the Group are given in the income statement in the audited Financial Statement. The Company declared an interim dividend of Rs. 16,010,753,850 at Rs. 8.19 per share for the financial year 2022/23. Dividend per share has been computed based on the amount of dividends recognised as distribution to the equity holders during the period. As required by Section 56 (2) of the Companies Act No. 7 of 2007, the Board of Directors has confirmed that the Company satisfies the solvency test in accordance with Section 57 of the Companies Act No. 7 of 2007, and has obtained a certificate from the Auditors, prior to declaring the dividend.
The Company made a total donation of Rs. 111,492,341 (2022 – 47,246,680) and the Group made a total donation of Rs. 281,966,058 (2022 – Rs. 144,568,477) during the financial year 2022/23. The amounts do not include contributions on account of Corporate Social Responsibility (CSR) initiatives. The CSR initiatives, including completed and on-going projects, are detailed in the sustainability report of the Annual Report.
PROPERTY, PLANT AND EQUIPMENT
The book value of property, plant and equipment of the Company as at the balance sheet date amounted to Rs. 25,062,425 (2022 – Rs. 22,612,805) and Rs. 9,894,496,716 (2022 – Rs. 5,750,794,286) for the Group. Capital expenditure for the Company and the Group amounted to Rs. 10,975,564 (2022 – Rs. 5,886,105) and Rs. 5,095,271,733 (2022 – Rs. 1,958,160,799) respectively. The Board believes the carrying value of properties are approximately reflecting of the fair value. Details of property, plant and equipment and their movements are given in Note 3 to the Financial Statements.
Investments of the Company in subsidiaries, associates, joint ventures and other external equity investments amounted to Rs. 4,676,972,116 (2022 – Rs. 4,646,972,116) respectively. Detailed description of the short and long-term investments held as at the balance sheet date, are given in note 6.
STATED CAPITAL MOVEMENTS
There was no movement in the stated capital during the year under review and is given below;
|As at 1 April 2022||4,097,985,000|
|Movements during the year||–|
|As at 31 March 2023||4,097,985,000|
The names of the Directors who held office at the end of the financial year are given below.
- Hitoshi Kanahori – Chairman
- Hanif Yusoof – CEO/Executive Director
- Ha Yo – Non-Executive Director
- Bokuto Yamauchi – Non-Executive Director
- Sanjay Kulatunga – Non-Executive Independent Director
- Harsha Amarasekera – Non-Executive Independent Director
Note: Mr Hitoshi Kanahori resigned with effect 31 March 2023 and was replaced by Mr Junji Shimasaki. Mr Bokuto Yamauchi was appointed as the Chairman and Mr Ha Yo was appointed as an Executive Director.
The Directors’ brief profiles are given in the Board of Directors section of the Annual Report.
Directors’ remuneration, in respect of the Company for the financial year 2022/23 is Rs. 108,983,397 (Rs. 78,591,566 was paid as remuneration for Executive Directors and Rs. 30,391,840 was paid to Non Executive Directors of the Company). Directors’ remuneration in respect of the Company’s Subsidiaries for the financial year 2022/23 is Rs. 1,480,066,225.
The following Directors serve the Audit Committee;
- Sanjay Kulatunga – Chairman
- Harsha Amarasekera – Member
The report of the Audit Committee is given under the section of Corporate Governance of the Annual Report.
The following Directors serve the Remuneration Committee;
- Harsha Amarasekera – Chairman
- Sanjay Kulatunga – Member
The report of the Remuneration Committee is given under the section of Corporate Governance of the Annual Report.
RELATED PARTY TRANSACTIONS REVIEW COMMITTEE
The following Directors serve the Related Party Transactions Review Committee;
- Sanjay Kulatunga – Chairman
- Harsha Amarasekara – Member
The report of the Related Party Transactions Review Committee is given under the section of Corporate Governance of the Annual Report. Further, the Board confirms that the transactions incurred between Related Parties which are listed in Note 28 are in compliance with Colombo Stock Exchange Listing Rule 9.3.2 and the Code of Best Practices on Related Party Transactions under the Securities and Exchange Commission Directive issued under Section 13(c) of the Securities and Exchange Commission Act.
The distribution and composition of shareholders and the information relating to share trading is given in the Share Information section of the Annual Report. Given below, are details of shareholding, pertaining to the Directors of Expolanka Holdings PLC, as at 31 March 2023
|Name of Director||31 March 2023|
EQUITABLE TREATMENT OF SHAREHOLDERS
It is the Group’s policy to endeavour to ensure equitable treatment to its shareholders at all times.
|No.||Name of shareholder||31 March 2023||31 March 2022|
|1.||SG Holdings Global Pte Ltd.||1,611,532,626||82.43||1,611,532,626||82.43|
|2.||Mr H Yusoof||147,021,464||7.52||147,021,464||7.52|
|3.||Sri Lanka Insurance Corporation Ltd. Life Fund||22,266,867||1.14||22,266,867||1.14|
|4.||Mr F Kassim||13,001,592||0.67||4,217,484||0.22|
|5.||Hatton National Bank PLC/Subramaniam Vasudevan||4,062,920||0.21||4,513,430||0.23|
|6.||Sri Lanka Insurance Corporation Ltd. – General Fund||3,510,519||0.18||3,510,519||0.18|
|7.||Nuwara Eliya Property Developers (Pvt) Ltd.||2,444,868||0.13||2,434,868||0.12|
|8.||Mr S Senthilnathan||2,379,256||0.12||2,379,256||0.12|
|9.||Simonas Trust Service Pvt Ltd.||2,261,768||0.12||2,261,768||0.12|
|10.||Commercial Bank of Ceylon PLC/G S N Peiris||2,006,515||0.10||3,070,000||0.16|
|11.||Rush Japan Corporation||1,976,622||0.10||1,515,477||0.08|
|12.||Mr M H Omar||1,935,875||0.10||1,935,875||0.10|
|13.||Phantom Investments (Pvt) Ltd.||1,730,000||0.09||1,470,000||0.08|
|14.||Amana Bank PLC/Mr Mohamed Nayaz Deen||1,340,477||0.07||1,340,477||0.07|
|14.1||Seylan Bank PLC/Mohamed Nayaz Deen||912,887||0.05||912,887||0.05|
|15.||Northern Trust Company S/A Legal & General Icav||1,290,141||0.07||1,290,141||0.07|
|16.||Mr M I M Shafie||1,200,000||0.06||1,057,000||0.05|
|17.||Mr S A Mohamed Basheer||1,111,000||0.06||1,111,000||0.07|
|18.||Seylan Bank PLC/Hiline Towers (Pvt) Ltd.||1,046,350||0.05||20,000||0.06|
|19.||Mr A H Musthakeem||1,033,000||0.05||1,033,000||0.05|
|20.|| Acuity Partners (Pvt) Limited/Mr Elayathamby
Thavagnanasooriyam/Mr Elayathamby Havagnanasundaram
The Board of Expolanka Holdings PLC is committed towards ensuring the Company has necessary processes in place to enable good governance practices. Accordingly, the Board confirm that the Company has complied with the Corporate Governance rules laid down under the Listing Rules of the Colombo Stock Exchange and further details are available under the Governance section of this Annual Report.
Messrs Ernst & Young, Chartered Accountants, are deemed reappointed, in terms of Section 158 of the Companies Act No. 7 of 2007, as Auditors of the Company. A resolution proposing the Directors be authorised to determine their remuneration will be submitted at the Annual General Meeting. Details of audit fees are set out in Note 22 of the Financial Statements. In addition to the above, Group companies, both, local and overseas, engage with other audit firms. The Auditors of the Company and its Subsidiaries have confirmed that they do not have any relationships (other than that of Auditor) with, or interests in, the Company or any of its Subsidiaries. The Auditors Report is found in the Financial Information section of the Annual Report. The Audit Committee reviews the appointment of the Auditor, its effectiveness, its independence and its relationship with the Group, including the level of audit and non audit fees paid to the Auditor. The details on the work of the Auditor and the Audit Committee are set out in the Audit Committee Report.
The Company and its Subsidiaries have equal opportunity policy and such employee related codes are protected in the respective selection, training, development and promotion policies, ensuring that all related decisions are purely based on merit. In this regard the Group practices equality of opportunity for all employees irrespective of ethnic origin, religion, political opinion, gender, marital status or physical disability. The number of persons employed by the Company and its Subsidiaries at year-end was 3,734 (2022 – 3,202). The details of the Group’s employment, human resources initiatives and employees are included under the Group Human Resources section of the Annual Report. There have been no material issues pertaining to the employees and employee relations of the Company and its Subsidiaries.
The Directors confirm that to the best of their knowledge, all taxes, duties and levies payable by the company and its subsidiaries, all contributions, levies and taxes payable on behalf of, and in respect of the employees of the company and its subsidiaries, and all other known statutory dues as were due and payable by the company and its subsidiaries as at the balance sheet date have been paid or, where relevant provided for, except as specified in the Financial Statements covering contingent liabilities.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board confirms that there is an established process in place for identifying, evaluating and managing any significant risks faced by the Group. Risk assessment and evaluation for each business unit takes place as an integral part of the annual strategic planning cycle and the major risks and mitigating actions in place are reviewed on a periodic basis by the Board and the Audit Committee. The Board, through the involvement of the Internal Audit and Risk Committee takes steps to gain assurance on the effectiveness of internal controls in place. The Audit Committee receives reports on the results of independent Internal Audits and recommendations are made to constantly enhance the internal control system. The Risk Management report is given under the Governance Section of the Annual Report.
EVENTS OCCURRING AFTER THE REPORTING DATE
No circumstances have arisen since the reporting date that would require adjustment, other than those disclosed in Note 30 to the Financial Statements.
The Directors are satisfied that the company, its subsidiaries and associates, have adequate resources to continue in operational existence for the foreseeable future, to justify adopting the going concern basis. The Directors after making necessary inquiries and reviews including reviews of the Group’s budget for the ensuing year, capital expenditure requirements, future prospects and risks and cash flows, and such other matters are satisfied that the Company and the Group have adequate resources to continue operations into the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Financial Statements.
The Group complies with the relevant environmental laws, regulations and endeavours to comply with best practices applicable in the country of operation. A summary of selected group activities in the above area is contained in the Sustainability Report.
The Group pursues its business goals under corporate business governance and the Group has taken numerous steps, particularly in ensuring the conservation of its natural resources and environment. These steps have been encapsulated in groupwide sustainability programmes that were launched and are being launched in a continuous manner and immense progress has been made in various projects. The Sustainability Report forms part of this annual report and could be referred on Sustainable Operations.
The Board of Directors has approved the Company and the Consolidated Financial Statements on 30 June 2023. Further to the circular issued dated 27 May 2022 by the Colombo Stock Exchange, a digital copy shall be made available for download on www.expolanka.com and appropriately made available on the Colombo Stock Exchange website www.cse.lk.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held at the Grand Ballroom B partition, Hotel Galadari, No. 64, Lotus Road, Colombo 01, on 26 July 2023 at 4.00pm.
By Order of the Board
Non Executive Chairman
SSP CORPORATE SERVICES (PVT) LTD SECRETARIES
30 June 2023