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Our COrpOrate philOsOphy it is a clichأ© of management to say, “what gets measured gets managedâ€‌,

Aug 08, 2020

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  • Our COrpOrate philOsOphy

    Our Vision is to be the leading agribusiness plantation Company in sri lanka.

    Our Mission is to be at the forefront by enhancing shareholder value by productively

    utilising our resources through diversity and innovation and continuously

    improving the unique quality of our products to attract and increase our

    customer base.

    Our Values Maintaining the highest ethical standards and discharging our corporate

    social responsibilities by supporting initiatives to uplift health, education

    and the environment, in the communities in which we operate.

    Building an exciting, team-based working environment that will develop

    and sustain employees at all levels.

    ensuring sustainable socio-economic development by protecting and

    developing our natural environment.

  • 1uDapussellaWa plaNtatiONs plC / annual report 2017

    CONteNts

  • 2 uDapussellaWa plaNtatiONs plC / annual report 2017

    FiNaNCial CaleNDar

    Interim Financial Reports 2017 2018

    On or Before

    First Quarter ended 31st March 12.05.2017 15.05.2018

    (unaudited)

    second Quarter ended 30th June 11.08.2017 15.08.2018

    (unaudited)

    third Quarter ended 30th september 08.11.2017 15.11.2018

    (unaudited)

    Fourth Quarter ended 31st December 22.02.2018 28.02.2019

    (unaudited)

    annual report for the year ended 31st December 15.03.2018 31.03.2019

    (audited)

    Meetings

    21st annual General Meeting 20.06.2014

    22nd annual General Meeting 28.05.2015

    23rd annual General Meeting 20.05.2016

    24th annual General Meeting 27.04.2017

    25th annual General Meeting 27.04.2018

  • 3uDapussellaWa plaNtatiONs plC / annual report 2017

    2017 2016 Variance - %

    Performance - year ended 31st December (in Rs. ’000)

    revenue 2,226,762 1,620,095 37.45

    profit/(loss) before interest & tax 334,271 (168,433) 298.46

    profit/(loss) after tax 267,821 (181,801) 247.32

    total Comprehensive income 323,301 (112,477) 387.44

    Financial Position - as at 31st December (in Rs. ’000)

    Non-Current assets 1,948,688 1,883,986 3.43

    Current assets 411,370 378,147 8.79

    total assets 2,360,058 2,262,133 4.33

    Current liabilities 794,506 921,027 (13.74)

    shareholders’ Fund 813,798 490,497 65.91

    stated Capital 340,000 340,000 -

    Capital employed 1,982,685 1,935,286 2.45

    Key Financial Indicators

    earnings per share (rs.) 13.81 (9.37) 247.32

    Net assets per share (rs.) 41.95 25.28 65.91

    Market price of a share (rs.) 42.50 19.40 119.07

    Market capitalisation (rs. ’000) 824,449 376,337 119.07

    rOCe (%) 16.86 (8.70) 293.71

    Current ratio (times) 0.52 0.41 26.11

    FiNaNCial hiGhliGhts year ended 31st December

  • 4 uDapussellaWa plaNtatiONs plC / annual report 2017

    ChairMaN’s MessaGe

    the economy the sri lankan economy has felt the impact of the depressed

    agriculture sector due to drought and floods in the first and

    second quarters of the year with a lower GDp growth of 4%. the

    economic growth in 2018 is forecast at 5%; the turnaround is

    expected in the wake of a stronger global economy.

    inflation has increased and is estimated to be around 6% in 2017,

    compared to 4% in 2016,and is expected to decline in 2018. severe

    drought and flooding in the first half of the year combined with

    higher goods and services tax rates and currency depreciation

    have pushed inflation higher in 2017, but a high base effect and

    firmer credit policy are expected to reverse this trend in 2018.

    the sri lankan rupee depreciated 2.9% against the us Dollar

    with the Dollar ending at lKr 153.15 in December 2017. the

    Central Bank has kept policy interest rates unchanged since the

    last rise in March 2017.

    industry grew by 5.8% and the service sector expanded by 4%

    in the first half. an increase in financial services, including

    insurance and government services, offset slippage in wholesale

    and retail trade and in hospitality. as global trade growth augurs

    well for the industry sector in 2017, the higher forecast for GDp

    growth in 2018 is maintained as sri lanka pursues economic

    adjustment as highlighted in the National Budget, and changes in

    the income tax and foreign exchange control arenas.

    tea industry retrospective the year 2017 will go down in history as one of the better years

    for the tea industry particularly in terms of prices, a fitting

    tribute to the 150th year of the tea industry in sri lanka.

    the sri lankan tea industry witnessed a better year in 2017

    with an increase in production and average prices reaching all-

    time high levels, which were very significant to the industry.

    Despite the mentioned positivity, the industry continued to be

    troubled by the political tension in the Middle eastern countries,

    policy decisions, and temperature variability which affected

    the production of tea during the year and may have lagged the

    industry growth.

    the total tea production of sri lanka for the year 2017 recorded

    a growth of 14.51 million kg to reach 307.08 million kg in

    comparison to 292.57 million kg in 2016. although the tea

    production increased by close to 5% (14.5 million kg), exports

    have only increased by 0.21 million kg compared to 2016.

    the total National average of teas prices for the year 2017 was

    lKr 618.14 (usD 4.04) per kg compared to lKr 468.61 (usD 3.14)

    in 2016. the 2017 national average tea price recorded was the

    highest-ever yearly auction rate, surpassing the recorded price

    in 2016.

    turkey remained the largest importer of sri lanka tea for 2017,

    followed by iraq and russia. More importantly, tea exports

    to Vietnam, taiwan, turkey, China and uK have increased

    significantly whilst tea exports to syria, Kuwait, iran, ukraine

    and u.a.e. have shown a notable decline as against 2016. this is

    attributed to the shortfall, mainly of orthodox black tea, from the

    major producer-exporting countries in 2016, and the shortfall of

    tea from Kenya in the first quarter of 2017 cumulated with the

    strengthening of oil prices, which had influence on some key

    importing countries of sri lankan teas.

    Company the Company has seen a shortfall in our total tea production

    over the years. Firstly, it had to contend with the change in

    climatic conditions, then with the ban on glyphosates without

    a cost-effective alternative, which has not been resolved to date.

    this is a serious concern to all tea growers and is bound to have

    serious repercussions on our estates from the perspective of

    production, productivity and the discipline of good agricultural

    practice.

    it is of the utmost importance that the authorities take serious

    note of the gravity of the situation, give a hearing to the

    stakeholders/organisations that represent the tea growers

    and find a solution, failing which the farmers/growers may,

    through desperation to sustain their livelihood and business,

    find alternatives that could have an impact on the quality of

    our product at the marketplace. sri lankan teas then could be

    discounted or banned due to exceeding maximum residue levels,

    which we are made to understand has already become an issue.

    availability of Workers less hands-on harvesting due to shortfall of workers too

    brings out the importance of retaining available workers on the

    estates. this factor, if not arrested early, could have an impact

    on production in the future and is already being seen on some

    estates.

    timber harvesting another negative aspect of the business is that once again a

    change in policy imposing further restrictions on harvesting of

    trees on estates has deprived the Company of over rs 40 million

  • 5uDapussellaWa plaNtatiONs plC / annual report 2017

    ChairMaN’s MessaGe (CONt.) during the year under review. the Company has invested large

    sums, planting timber/fuelwood for our own requirements and

    for Commercial purposes, diversifying the land unsuitable on

    estates for planting in tea or rubber. here again the authorities

    that matter have not been able to find solutions or persuade the

    decision makers to see reality.

    Corporate performance profit for the year as determined by the total Comprehensive

    income for the year of lKr 323 million represents a 387%

    increase over the previous year, and was driven by the strong

    tea prices. this together with continuous increase in the returns

    from the investments from our strategic diversified business

    units have contributed to the profitability.

    the revenue records a growth of 37% whilst costs have been

    effectively controlled. the estate tea crop increased by 6% in

    2017.

    acknowledgement During the year Messrs Jayampathy Molligoda, Meyan Vamadevan

    and Nishantha Wickremasinghe resigned from the Company’s