Sathosa Motors PLC | Annual Report 2015/16 Sathosa Motors PLC Annual Report 2015/16

100 Pages·2016·2.22 MB·English

SATHOSA MOTORS PLC
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Sathosa Motors PLC | Annual Report 2015/16

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Corporate Information
NAME OF THE COMPANY BANKERS
Sathosa Motors PLC Hatton National Bank
NDB Bank
LEGAL FORM Commercial Bank of Ceylon PLC
A public Limited Liability Company incorporated in Sri Lanka Bank of Ceylon
At Sathosa Motors, we have a reputation for courage, endurance and the will to succeed. That’s why we are
on 11th March 1982 under the Companies Ordinance No: 51 Sampath Bank PLC
excited to see our journey of success take flight with new energy and vigor. The past year has seen the
of 1938 and re-registered under the Companies Act No.7 of
Company make many positive changes which have strengthened us.
AUDITORS
2007. Listed on the Colombo Stock Exchange on 07th
The years ahead are filled with the promise of what we can achieve, the limitless potential stemming from our November 1993. KPMG
far sighted vision. We believe our integrity, service and continuous stakeholder value will facilitate our future Chartered Accountant,
growth – the direction of our dreams. REGISTRATION NUMBER 32 A, Sir Mohomad Macan Marker Mawatha,
PQ 105 Colombo 03.
BOARD OF DIRECTORS SECRETARIES & REGISTRARS
Mr. Sumal Joseph Sanjeewa Perera Chairman P W Corporate Secretarial (Pvt) Ltd
Deshamanya Tilak Dias Gunasekera Managing Director No: 3/17, Kynsey Road,
Mr. J C Joshua Director (Alternate Director Mr. S H S Mendis) Colombo 08.
Contents
Mr. D A R Fernando Director
LAWYERS
Mr. S H S Mendis Director
History of Sathosa Motors PLC | 2
Mr. S D Munasinghe Director Nithi Murugesu & Associate
Financial Highlights | 4
Mr. R J S Gomez Director Attorneys – At – Law – Notaries Public
The New ISUZU Series Reward | 6 (Alternate Director Mr. S D Munasinghe) 28 (level 2) W A D Ramanayake Mawatha,
A Message from the Chairman | 8 Mr. M M N De Silva Director Colombo 02.
A Message from the Managing Director | 10 Mr. Chiran Wijesinghe Director
ACTUARIAL CONSULTANTS
Board of Directors | 13
The Board of Directors who held office at 31st March 2016,
Management Discussion and Analysis | 18 Actuarial & Management Consultants (Pvt) Ltd
are stated under “ Annual Report of the Board of Directors’ on
1st Floor,
Sustainability Report | 24
the Affairs of the Company”
No: 434, R A de Mel Mawatha,
Corporate Governance | 27
Colombo 03.
Senior Management Team
Risk Management Review | 29
Annual Report of the Board of Directors on the Affairs of the Company | 34 Neomal Fernando Assistant General Manager – New Vehicle REGISTERED OFFICE
Independent Auditors’ Report | 37 Dilshan Nugera Sales Manager – New Vehicle
No: 25, Vauxhall Street,
Deepal Dissanayake Service Manager – Workshop
Statement of Profit or Loss and Other Comprehensive Income | 38 Colombo 02.
Harsha Withana Sales Manager – Services
Statement of Financial Position | 39
Upul Ranasinghe Assistant Manager – Services
GENERAL OFFICE / BUSINESS ADDRESS
Statement of Changes in Equity | 40
Nishantha Pieris Manager – Spare Parts
Statement of Cash Flow | 42 No: 25, Vauxhall Street,
Eranga Dias Assistant Manager – Spare Parts
Notes to the Financial Statements | 43 Nilanga Silva Manager HR & Administration Colombo 02.
Tel : [phone]
Related Party Transactions Review Committee Report | 88 Thejani Kodithuwakku Finance Controller
Fax : [phone]
Report of the Audit Committee | 89 Lalith Jayathunga Finance Manager
Web : www.sathosamotorsplc.com
Inoka Jayawickrama Accountant
Information to Investor | 91
Duminda Munasinghe Manager – IT
Statement of Value Added | 93
Notice of Annual General Meeting | 94
Scan this QR code with your
Form of Proxy | 95 smart device to view this Designed & produced by REDWORKS
version of the Annual Report Digital plates & Printed by Printel (Pvt) Ltd
Corporate Information | Inner Back Cover online
Our Vision
To be the trusted leader in the Sri Lankan Automobile Industry
by ensuring that we deliver only the best quality to our valued
customers.
Our Mission
To achieve excellence in customer satisfaction by cultivating
a dynamic and productive organizational culture with highly
motivated staff to provide the best quality vehicles at competitive
and affordable prices, thereby generating the maximum benefit to
all our stakeholders.
Key Corporate Values
• We value and believe in maintaining the highest standards of
integrity, honesty, transparency, responsibility and ethical
behaviour in all our dealings and transactions.
• We respect the dignity of people
• We are passionate about delivering the highest levels of
service quality to all our internal and external stakeholders.
• We encourage and respect diversity among our team in
order to create an inclusive organizational culture.
• We believe in leading by example.
• We firmly believe in taking all prudent and responsible
measures to strengthen our Company’s financial foundation.
• We believe in the importance of ensuring excellence in all our
processes and systems as a means of maintaining a strong
niche position in the Sri Lankan market: from expanding
our dealership network, to introducing innovative product
ranges to the market, to market development, to leveraging
training as an opportunity to enhance expertise and
productivity.
• We are committed at all times to strengthening the
corporate image of Sathosa Motors by communicating and
delivering on our core values.
History of Sathosa Motors PLC
1962
The Isuzu Agency was secured
by the Co-operative Wholesale
Establishment (CWE), under their
A leading company in Sri Lanka’s
New Vehicles and Machinery
automobile sector, Sathosa Motors Department.
PLC came into being in 1962,
when Sri Lanka’s Isuzu Agency 1985
was secured by the Co-operative Converts the New Vehicles and
Wholesale Establishment (CWE). Machinery Department into
a fully owned subsidiary of
The first agreement was signed
the CWE, under the auspices
between M/s Isuzu Motors Limited, of the Ministry of Trade and
Tokyo, Japan (Manufacturer); M/s Commerce as “Sathosa Motors
Limited” to enable the Company
C Itoch & Co. Ltd., (Distributor);
to operate more independently
and the Co-operative Wholesale and efficiently, catering to the
Establishment C.W.E. (Franchise growing demand.
holder). Soon, with the liberalization
of imports in 1978 and the open
economic policy, Isuzu became the
most sought-after brand by fleet
owners, the government sector
and so on. Sathosa Motors Limited
was established as a fully-owned
subsidiary of the C.W.E on 1st
January 1985 in order to provide
1992
more freedom to carry on efficient
Partial privatization of Sathosa
business operations. Subsequently,
Motors Limited, in line with
Access Engineering Company Ltd the government policy. 60%
(AEL), which went public, acquired of the issued capital was
acquired by M/s Itoch & Co
a major controlling stake in
limited (ITOUCH Corporation,
Sathosa Motors PLC (SML) during Tokyo Japan, a leading trading
2012. Later, Sathosa Motors PLC organization in Japan, 10% of
the balance shares were gifted
obtained 50% ownership of SML
to employees, and 30% was
Frontier Automotive Pvt Ltd, the issued to the general public.
Land Rover Company.
2
2007
2012
The Company was re-registered
The controlling stake of SML was
under the Company’s Act No 7
acquired by Access Engineering
of 2007, as Sathosa Motors PLC
Company Limited.
(SML).
2013
A strategic decision was
made to acquire 50% stake
in Frontier Automotive Pvt
Ltd, the exclusive distributor
for Land Rover in Sri Lanka, a
luxury European Brand, best
known as the ‘Sri Lankan
Military’s Vehicle of Choice’.
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Further strengthening the product 2
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offer with the Introduction of or
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Isuzu SUV with distinctive styling, e
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spacious interiors and the promise al
of a smooth drive, complementing nu
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the existing Isuzu heavy and light A
commercial trucks and Isuzu C |
luxury buses and double cabs. L
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2015 A
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The company sets up a state H
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of the art workshop at Vauxhall A
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street, Colombo 2, to cater
mainly to Isuzu SUV customers.
3
Financial Highlights
Company Group
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 13/14 14/15 15/16
Gross Turnover (Rs.000) 885,743 824,765 1,449,396 1,902,741 2,334,937 2,459,490 2,752,022 3,010,586 3,075,580 3,527,240 4,067,822
Profit before Taxation (Rs.000) 73,981 42,513 175,775 242,311 286,342 322,327 349,652 431,827 415,067 382,172 462,188
Profit after Taxation (Rs.000) 55,352 26,995 110,512 173,026 205,752 231,771 252,968 315,704 288,233 269,805 327,111
Property Plant & Equipment
& pre paid Lease Payment (Rs.000) 51,364 45,393 41,349 39,012 44,897 74,465 118,079 133,505 178,779 337,928 593,144
Investment Property ( Rs.000) - - - - 21,683 24,192 24,192 45,360 24,192 24,192 45,360
Gross Dividends Paid Final (Rs.000) 36,202 12,067 30,168 30,168 30,168 30,168 30,168 42,235 30,168 30,168 42,235
Gross Dividends Paid Interim ( Rs.000) - - - - - - - 30,168 - - 30,168
Gross Dividends Proposed (Rs.000) - - - - - 30,168 42,235 90,504 30,168 42,235 90,504
Dividend Per Share (Rs.) 6.00 2.00 5.00 5.00 5.00 5.00 7.00 15.00 5.00 7.00 15.00
Dividend Cover (Times) 1.53 2.24 3.66 5.74 6.82 7.68 5.99 3.49 8.62 6.18 3.55
Earnings Per Share (Rs.) 9.17 4.47 18.32 28.68 34.10 38.41 41.93 52.33 43.09 43.32 53.22
Net Asset Per Share (Rs.) 60.22 58.69 74.51 98.64 127.76 161.08 197.96 224.88 165.76 204.02 231.82
Net Profit to Revenue (Before tax) (%) 8.42 5.20 12.28 13.02 12.39 13.24 12.77 14.37 13.65 10.91 11.42
Current Ratio (Times) 2.69 4.69 1.77 1.73 2.14 2.36 2.50 1.50 1.99 1.96 1.28
Quick Assets Ratio (Times) 0.87 2.61 0.85 0.83 0.74 1.30 1.14 0.47 1.15 0.97 0.47
Return on Capital Employed (%) 15.24 7.62 24.58 29.07 26.69 23.85 21.18 23.27 28.82 21.92 23.39
Company
Net Revenue PAT
Rs. 3,006 Mn. Rs. 316 Mn.
ROCE EPS
23.27% Rs. 52.33
4
Revenue Analysis of Year 2015/16 (Gross)
6.69% 0.06%
Rs.
6.10%
New Vehicles 2,623,665,394
Spareparts 183,793,978
Workshop 201,257,863
Others 1,868,272
Total 3,010,585,507
87.15%
Revenue (Gross)
Rs. Mn.
3,500
3,000
2,500
In Rs. Mn.
2,000
Year 11/12 12/13 13/14 14/15 15/16
1,500
Revenue 1902.74 2334.94 2459.49 2752.02 3010.59
1,000
500
0
11/12 12/13 13/14 14/15 15/16
Year 11/12 12/13 13/14 14/15 15/16
Return on Capital Employed (After Tax)
Return on Capital
30%
Employed % 29.07% 26.69% 23.85% 21.18% 23.27%
25% Capital Employed
20% Rs.Mn. 595.17 770.83 971.90 1,194.39 1,356.83
Net Profit After Tax
15%
Rs.Mn. 173.02 205.75 231.77 252.97 315.77
10%
11/12 12/13 13/14 14/15 15/16
Profitability (Rs.Mn.) 6
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500 In Rs. Mn. 01
2
400 Year 11/12 12/13 13/14 14/15 15/16 rt
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300 Profit Before Tax 242.31 286.34 322.33 349.65 431.83 e
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Profit After Tax 173.03 205.75 231.77 252.97 315.70 al
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11/12 12/13 13/14 14/15 15/16 C |
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Earning & Dividend Per Share (Rs.) R
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In Rs. M
50 Year 11/12 12/13 13/14 14/15 15/16 A
40 S
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30 Dividend Per Share 5.00 5.00 5.00 7.00 12.00 H
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20 Earning Per Share 28.68 34.10 38.41 41.93 52.33 A
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11/12 12/13 13/14 14/15 15/16
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The New ISUZU Series Reward
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7
A Message from the Chairman
Dear Valued Shareholders,
It gives me immense pride to place
before you the annual report and
audited financial statements for the
financial year ended 31st March 2016.
I am pleased to reiterate the same
words as I did in the previous annual
report, which is to announce that
Your Company has surpassed last
year’s historic financial performance
in the year under review. It gives me
pleasure to declare that Your Company
has recorded the highest ever profit
in the company’s history by posting
group revenue of over Rs. 4 billion
as compared to Rs.3.50 billion in
the previous year. Your Company’s
revenues rose by 9.78% from Rs.2.737
billion to record Rs.3.006 billion in the
year under review.
Your Company has achieved the feat of
posting a stellar performance for the
second consecutive year, which reflects
the stability and growth potential of
the company, which persevered in its
success despite a challenging external
environment.
2015 Macro Economic Environment
The country recorded GDP growth
of 4.8%, compared with 4.9% in
the previous year. A slowdown in
the growth of demand in Sri Lanka’s
traditional export markets impacted
the growth of the export sector while a
strengthening US economy prompted
short term capital outflows. The impact
“... Company stayed the course and went on of these developments was offset to
some extent by lower international
to post its strongest performance yet. As a
commodity prices. Nevertheless,
result, the profit attributable to the owners
domestic consumption rebounded
or the ordinary shareholders of the Sathosa as incomes grew, particularly among
public sector workers.
Motors Group rose from Rs.261.386 million in
”
2014/15 to Rs.321.083 million in 2015/16.
Later in the year, the government had
8
to address the adverse implications of