A N N U A L R E P O R T 2 0 2 2 / 2 3
S o f t l o g i c H o l d i n g s P L C
CONTENTS
01 | OVERVIEW | ||
Our Vision - Our Credo | 01 | ||
Financial Highlights 02 | |||
Operational Highlights | 03 | ||
About the Group | 04 | ||
Our Businesses | 06 |
02 | LEADERSHIP & |
GOVERNANCE | |
Message from the Chairman 08 | |
Board of Directors 10 | |
Corporate Governance 14 |
03 | MANAGEMENT DISCUSSION | ||
& ANALYSIS | 20 | ||
Risk & Opportunities | |||
Financial Review 23 | |||
Retail & Telecommunications 25 | |||
Healthcare Services | 28 | ||
Financial Services | 31 | ||
Information Technology & Others 33 | |||
Leisure and Property | 35 | ||
Automobiles | 37 | ||
Human Capital | 38 |
04
05
06
COMMITTEE
REPORTS
Annual Report of The Board of | |
Directors on The Aairs of The Company | 48 |
Board Audit Committee Report 51 | |
Related Party Transactions Review | |
Committee Report 52 | |
HR & Remuneration Committee Report | 53 |
Statement of Directors' Responsibilities | 54 |
FINANCIAL
STATEMENTS
Independent Auditors' Report 56
Income Statement 62
Statement of Comprehensive Income 63
Statement of Financial Position | 64 |
Statement of Changes in Equity | 66 |
Statement of Cash Flows 68
Notes to the Financial Statements 70
SUPPLEMENTARY
INFORMATION
Investor Information 188
Corporate Directory 190
Notice of Meeting 194
Form of Proxy 195
Corporate Information IBC
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OUR
VISION
To be the most preferred and ubiquitous product and service provider.
OUR
CREDO
To make responsible
investment decisions and retain the best talent and become the most admired corporate entity.
Softlogic Holdings PLC
FINANCIAL HIGHLIGHTS
For the year ended 31 March | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |
Earnings Highlights | |||||||||||
Group Revenue | Rs. Mn | 96,899 | 111,229 | 82,621 | 76,722 | 75,143 | 66,019 | 58,882 | 54,600 | 39,564 | 29,246 |
Gross Profit | Rs. Mn | 34,096 | 37,370 | 25,408 | 27,044 | 27,636 | 23,673 | 19,579 | 18,559 | 14,117 | 11,012 |
Earnings Before Interest, Tax,Depreciation & | |||||||||||
Amortisation of Intangibles | Rs. Mn | 12,136 | 13,995 | 8,196 | 9,807 | 11,721 | 11,695 | 8,451 | 7,897 | 6,398 | 5,025 |
Group Earnings/ (Loss) Before Interest & Taxation | Rs. Mn | 8,044 | 10,167 | 4,539 | 6,462 | 8,859 | 9,052 | 6,391 | 6,082 | 4,959 | 3,918 |
Group Earnings/ (Loss) Before Taxation | Rs. Mn | (20,908) | (3,561) | (3,811) | (2,899) | 1,743 | 3,092 | 1,581 | 2,836 | 2,266 | 1,258 |
Group Earnings/ (Loss) After Taxation | Rs. Mn | (23,657) | (5,278) | (4,008) | (3,181) | 2,990 | 2,278 | 920 | 1,870 | 1,819 | 1,009 |
Total Comprehensive Income/ (Loss) Net of | |||||||||||
Taxation | Rs. Mn | (22,706) | (3,090) | (2,739) | (2,272) | 3,127 | 2,827 | 1,793 | 2,859 | 2,160 | 1,237 |
Group Earnings/ (Loss) Attributable to Equity Holders | Rs. Mn | (24,077) | (8,171) | (5,227) | (4,724) | 105 | 204 | 120 | 565 | 556 | 156 |
Group Comprehensive Income/ (Loss) | |||||||||||
Attributable to Equity Holders | Rs. Mn | (23,624) | (7,142) | (4,307) | (4,096) | 353 | 450 | 783 | 1,829 | 761 | 220 |
Gross Profit Margin | % | 35 | 34 | 31 | 35 | 37 | 36 | 33 | 34 | 36 | 38 |
Net Profit/ (Loss) Margin | % | (24.41) | (4.74) | (4.85) | (4.15) | 3.98 | 3.45 | 1.56 | 3.43 | 5 | 3.5 |
Earnings/ (Loss) Per Share | Rs. | (20.19) | (6.85) | (4.38) | (3.96) | 0.09 | 0.25 | 0.15 | 0.73 | 0.72 | 0.2 |
Dividends | Rs. Mn | - | - | - | 596 | 596 | 503 | 387 | 194 | - | 120 |
Return on Capital Employed* | % | 7.60 | 9.73 | 4.80 | 6.58 | 9.78 | 11.02 | 9.42 | 9.81 | 8.37 | 8.73 |
Balance Sheet Highlights | |||||||||||
Total Assets | Rs. Mn | 184,237 | 188,705 | 161,834 | 149,551 | 130,670 | 118,823 | 100,915 | 93,152 | 87,324 | 65,863 |
Current Ratio | No. of times | 0.40 | 0.57 | 0.71 | 0.74 | 0.83 | 0.93 | 0.94 | 0.84 | 1.04 | 0.9 |
Asset Turnover | No. of times | 0.53 | 0.59 | 0.51 | 0.51 | 0.58 | 0.56 | 0.61 | 0.61 | 0.45 | 0.4 |
Total Interest Bearing Borrowings | Rs. Mn | 123,742 | 98,946 | 82,585 | 79,669 | 65,788 | 61,227 | 52,255 | 46,480 | 43,906 | 31,518 |
Shareholders' Funds | Rs. Mn | (32,078) | (8,434) | (415) | 3,911 | 14,343 | 11,591 | 8,547 | 8,159 | 7,336 | 6,802 |
Net Asset/ (Liability) Value Per Share | Rs. | (26.90) | (7.07) | (0.35) | 3.28 | 12.23 | 14.05 | 11.04 | 10.54 | 9.47 | 8.7 |
Total Equity | Rs. Mn | (17,872) | 5,597 | 12,006 | 16,129 | 24,839 | 20,917 | 15,623 | 15,531 | 15,356 | 13,351 |
Debt : Equity ** | No. of times | - | 17.68 | 6.88 | 4.94 | 2.65 | 2.93 | 3.34 | 2.99 | 2.86 | 2.4 |
Debt : Total Assets | No. of times | 0.7 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
Operating Cash Flow | Rs. Mn | (7,058) | 9,146 | 17,126 | 9,009 | 1,556 | (106) | 2,331 | 3,432 | 426 | 1,775 |
Capital Expenditure | Rs. Mn | 3,987 | 3,534 | 3,153 | 7,637 | 5,743 | 4,524 | 6,311 | 5,252 | 4,438 | 3,604 |
Cash Earnings/ (Loss) Per Share | Rs. | (5.92) | 7.67 | 14.36 | 7.55 | 1.33 | (0.13) | 3.01 | 4.43 | 0.5 | 2.3 |
Investor Information | |||||||||||
Market Price as at 31 March | Rs. | 15.90 | 37.60 | 11.8 | 12.3 | 16 | 24.6 | 11.9 | 13.3 | 13.2 | 10.6 |
Shares in Issue | Mn | 1,193 | 1,193 | 1,193 | 1,193 | 1,193 | 962 | 779 | 779 | 779 | 779 |
Market Capitalisation as at 31 March | Rs. Mn | 18,969 | 44,857 | 14,072 | 14,668 | 19,081 | 23,659 | 9,270 | 10,205 | 10,283 | 8,257 |
52-Week Market Share Price High | Rs. | 39.80 | 90.00 | 15.3 | 17 | 25.8 | 26.2 | 15.5 | 18 | 20.4 | 12.7 |
52-Week Market Share Price Low | Rs. | 14.50 | 10.40 | 9.8 | 11 | 15.9 | 11.7 | 11.7 | 12.3 | 10.3 | 8.1 |
Price to Book Value | No. of times | - | - | - | 3.7 | 1.3 | 1.7 | 1.01 | 1.1 | 1.4 | 1.5 |
Enterprise Value | Rs. Mn | 137,451 | 134,679 | 89,076 | 90,611 | 81,672 | 78,733 | 58,730 | 53,677 | 52,263 | 38,014 |
Enterprise Value : EBITDA | No. of times | 11.33 | 9.62 | 10.87 | 9.24 | 6.97 | 6.73 | 7.19 | 6.6 | 8.2 | 7.6 |
Dividend Per Share | Rs. | - | - | - | 0.5 | 0.5 | 0.65 | 0.5 | 0.25 | - | 0.16 |
Dividend Payout Ratio | No. of times | - | - | - | (0.53) | (0.89) | 0.14 | 0.38 | 0.19 | - | (5.13) |
- Return on Capital Employed calculated as a percentage of EBIT to Total Capital Employed (Equity plus Interest Bearing Borrowings).
- Debt to Equity calculated based on Total Equity Capital.
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Annual Report 2022/2023
Overview | Leadership & Governance | Management Discussion & Analysis | Committee Reports | Financial Statements | Supplementary Information | |||||
OPERATIONAL HIGHLIGHTS
Annual Report 2022/2023
3
Softlogic Holdings PLC
ABOUT THE GROUP
Softlogic Holdings PLC is a dynamic and diversified conglomerate with a strong presence across various growth-oriented industries in Sri Lanka. The Group's expertise spans across retail & telecommunications, information technology, healthcare services, financial services, automobile, and leisure, where we offer a wide array of internationally-acclaimed products and services to meet diverse consumer demands.
With a strong focus on customer satisfaction and innovation, Softlogic continues to set new standards of excellence across all sectors it operates in.
RETAIL
- Softlogic Retail is one of the largest consumer electronic and durables retailer in the country with 198 stores covering an island-wide retail space of over 200,000 sq.ft.
- A key player in mobile phone distribution, renowned for having the largest distribution network and a portfolio featuring top international brands like Samsung and Nokia.
- ODEL and Softlogic Brands, the dominant force in fashion retailing showcases a portfolio of over 67 international fashion brands alongside its own private labels. Our fashion department stores, ODEL and Cotton Collection, are synonymous with style and quality, offering a premium shopping experience that caters to discerning fashion enthusiasts.
- We also operate the exclusive franchise for a global footwear brand 'Bata' which is a renowned household brand for footwear in Sri Lanka for many decades.
-
As a prominent force in Sri Lanka's restaurant industry, we operate six international franchise brands that cater to a wide range of customer segments across a network of
42 restaurants. These brands include Burger King, Popeyes, Baskin Robbins, Délifrance, Crystal Jade and Subway. - Through Glomark, a leading and growing supermarket chain, the Group complemented its presence in all areas of the retail business.
- ODEL PLC is the listed company of this sector.
- Softlogic Retail Holdings is the sector holding of the retail cluster.
HEALTHCARE SERVICES
- Asiri Health stands as the largest private healthcare provider in Sri Lanka, operating over 800 beds across its seven hospitals spanning three provinces.
- Asiri Laboratories is the country 's largest private laboratory service, offering a wide range of tests through its Main Lab, six hospital labs, 17 Satellite Labs, and 80 collection centers.
- Asiri Health engages, consults, and collaborates with a team of highly dedicated, skilled, and experienced healthcare professionals in Sri Lanka.
- Our hospitals adhere to global accreditation standards set by the Joint Commission International (JCI) and the Australian Council of Health Standards International (ACHSI) for quality and patient safety. Additionally, our laboratories have obtained industry-specific and quality management ISO certifications, ensuring the highest standards of service and reliability.
- Asiri Hospital Holdings PLC and Asiri Surgical Hospital PLC are two listed companies in this sector.
FINANCIAL SERVICES
- Softlogic Life Insurance PLC is the second top player in the life insurance sector, offering a range of innovative and comprehensive life and medical insurance solutions to meet the evolving needs of customers.
- Softlogic Finance PLC, a licensed finance company, provides a wide range of financial services including leasing, hire purchase, loans, and savings products, catering to both individual and corporate clients.
- Softlogic Stockbrokers and Softlogic Asset Management are renowned for their expertise in stockbroking and asset management services, offering investment solutions and advisory services to clients.
- Softlogic Capital PLC, the sector holding company, which oversees and manages the strategic direction and growth initiatives of the financial services sector, ensuring synergies and strategic alignment across its various entities.
- Softlogic Capital PLC, Softlogic Life Insurance PLC and Softlogic Finance PLC are the three listed companies of this sector.
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Annual Report 2022/2023
Overview | Leadership & Governance | Management Discussion & Analysis | Committee Reports | Financial Statements | Supplementary Information | |||||
INFORMATION
TECHNOLOGY & OTHERS
- A leading provider of IT solutions, offering a comprehensive range of services across the IT value chain. From end-user computing to back-end data centers, advanced infrastructure, cloud services, cyber security, imaging, printing, and managed services, we provide a holistic approach to meeting our clients' technological needs.
- We specialise in centralised management and consultancy services, ensuring seamless integration and optimisation of IT resources across organisations.
- Our expertise and commitment to excellence have positioned us as a trusted partner in delivering innovative and reliable IT solutions through our independent dealer network of over 150 distributors.
-
We bring cutting-edge technologies and best-in-class products to
our clients representing world- class brands such as Dell EMC, Microsoft, Aruba, Meraki, Lenovo, Huawei, VMware, and Epson, among others.
LEISURE & PROPERTY
- Two exceptional hotel properties: the luxurious 5-star Mövenpick Hotel Colombo, with 219 rooms that offer comfort and service, and the serene 4-star Centara Ceysands Resort & Spa in Bentota, featuring 166 rooms set in a picturesque environment ideal for relaxation and rejuvenation.
- Softlogic Destination Management, a specialised division focusing on outbound travel services. With a wealth of experience and expertise, Softlogic Destination Management is dedicated to providing travel experiences to both the Group companies and external clients.
- Sabre, the online ticketing platform used by the travel industry, offers convenient and efficient booking solutions for travel enthusiasts, ensuring seamless travel planning and management.
- Softlogic Properties, our sector holding company and a leading property developer, successfully completed the Everest apartment project in Colombo 5.
AUTOMOBILES
-
Future Automobiles is the authorised dealer for Ford vehicles. Softlogic Automobiles is the authorised dealer for King Long buses. Suzuki Motors Lanka holds the exclusive Agency Agreement with Suzuki Motor Corporation
of Japan for motorbikes. Vehicle imports are currently suspended due to foreign exchange control restrictions in the country. - Softlogic Automobiles also operates a state-of-the-art collision repair center, equipped to handle repairs for all vehicle brands in the country.
Annual Report 2022/2023
5
Softlogic Holdings PLC
OUR BUSINESSES
RETAIL | HEALTHCARE SERVICES | FINANCIAL SERVICES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
100% | 55% | 77% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CORE VERTICALS
Softlogic Retail Holdings (Pvt) Ltd
› Softlogic Retail (Pvt) Ltd
» Suzuki Motors Lanka Ltd
» SML Holdings (Pvt) Ltd
» Dai-Nishi Securities (Pvt) Ltd
› Odel PLC
» Softlogic Brands (Pvt) Ltd
» Odel Lanka (Pvt) Ltd
» Odel Apparels (Pvt) Ltd
» Odel Properties (Pvt) Ltd
» Odel Information Technology Services
(Pvt) Ltd
» Odel Properties One (Pvt) Ltd
» Odel Restaurants (Pvt) Ltd
» Cotton Collection (Pvt) Ltd
» Odel Apparel Holdings (Pvt) Ltd
» Odel Apparel Lanka (Pvt) Ltd
› Softlogic Mobile Distribution (Pvt) Ltd » Softlogic Communications (Pvt) Ltd
› Softlogic Communication Services (Pvt) Ltd
› Softlogic International (Pvt) Ltd
› Softlogic Restaurants (Pvt) Ltd
» Softlogic JSM Entertainment (Pvt) Ltd » Silk Route Foods (Pvt) Ltd
» Softlogic Healthy Concepts (Pvt) Ltd
› Softlogic Retail One (Pvt) Ltd
› Softlogic Supermarkets (Pvt) Ltd
› Softlogic Rewards (Pvt) Ltd
› Softlogic Pharmaceuticals (Pvt) Ltd
› Softlogic Manufacturing (Pvt) Ltd
› Footwear Retailer (Pvt) Ltd
› Softlogic Venture (Pvt) Ltd
6 Annual Report 2022/2023
Asiri Hospital Holdings PLC
-
Asiri Surgical Hospital PLC
» Asiri AOI Cancer Centre (Pvt) Ltd - Central Hospital Ltd
- Asiri Central Hospitals Ltd
- Asiri Diagnostics Services (Pvt) Ltd
- Asiri Hospital Matara (Pvt) Ltd
- Digital Health (Pvt) Ltd
- Asiri Laboratories (Pvt) Ltd
- Asiri Hospital Galle (Pvt) Ltd
- Asiri Diagnostic Services (Asia) Pte Ltd
- Asiri Port City Hospital (Pvt) Ltd
- Asiri Academy of Health Sciences (Pvt) Ltd
- Asiri Myanmar Ltd
Softlogic Capital PLC
- Softlogic Life Insurance PLC
- Softlogic Finance PLC
- Softlogic Stockbrokers (Pvt) Ltd
- Softlogic Asset Management (Pvt) Ltd
Overview | Leadership & Governance | Management Discussion & Analysis | Committee Reports | Financial Statements | Supplementary Information | |||||
LEISURE & PROPERTY | AUTOMOBILES | INFORMATION | |||||||||||||||||||||||||||||||||||||||||||||
TECHNOLOGY & OTHERS | |||||||||||||||||||||||||||||||||||||||||||||||
100% | 100% | 100% | |||||||||||||||||||||||||||||||||||||||||||||
NON-CORE VERTICALS
Softlogic Properties (Pvt) Ltd
› | Softlogic City Hotels (Pvt) Ltd | › Future Automobiles (Pvt) Ltd | › | Softlogic IT Holdings (Pvt) Ltd |
› | Ceysand Resorts Ltd | › Softlogic Automobiles (Pvt) Ltd | » Softlogic Information Technologies (Pvt) Ltd | |
› | Softlogic Destination Management | » Softlogic Computers (Pvt) Ltd | ||
(Pvt) Ltd | › | Softlogic Australia (Pty) Ltd | ||
› Sabre Travel Network Lanka (Pvt) | › | Softlogic BPO Services (Pvt) Ltd | ||
Ltd (Associate Company) | ||||
› | Nextage (Pvt) Ltd | |||
(Associate Company)
› Softlogic Corporate Services (Pvt) Ltd
› Jendo Innovations (Pvt) Ltd
(Associate Company)
› Softlogic Healthcare Holdings Ltd
› Softlogic Solar (Pvt) Ltd
Annual Report 2022/2023 | 7 |
Softlogic Holdings PLC
MESSAGE FROM THE CHAIRMAN
Under more favourable conditions, the Group's strategic plans would have achieved unprecedented transformation and growth, especially in the Retail sector with its strong distribution network, large customer base and over 320 retail stores with a first-in-class supermarket and unrivalled collection of international brands and products.
Dear Stakeholders,
This year was a challenging one for the Softlogic Group, although a Consolidated Revenue of Rs. 96.9 Bn was achieved with the resultant EBITDA of Rs. 10.5 Bn. In the face of unparalleled turbulence, uncertainty, and volatility, the Softlogic Group has shown resilience and adaptability, drawing upon decisive leadership to ensure sustained value creation for our stakeholders despite some setbacks.
OPERATING ENVIRONMENT AND CHALLENGES
During the year, the global economy witnessed inflation, supply chain disruptions, and geopolitical tensions amid the persistent impact of the pandemic and the economy which was beset by internal challenges.
Within the domestic realm, Sri Lanka confronted exceptional macroeconomic challenges throughout the year, affecting consumers, companies, and the government causing significant distress. Systemic disparities consisting of fiscal and current account deficits were accentuated by
external shocks, precipitating sovereign and balance-of-payments pressures. This precarious condition compelled Sri Lanka to suspend servicing of external debt in April 2022. The economic outcome resulted in a substantial 7.8% contraction in the nation's Gross Domestic Product (GDP) in 2022, inciting public protests, ultimately leading to political instability and a change of leadership at the top.
The business landscape suffered immensely owing to supply chain disturbances, import limitations, currency scarcity, and difficulties securing letters of credit, thus obstructing imports. Additionally, operational hurdles resulted in transportation issues due to fuel shortages and inconsistent electricity supply which negatively influenced consumer
and business confidence. To counteract the deteriorating scenario, concerted policy actions spearheaded by GoSL and the Central Bank of Sri Lanka (CBSL) were implemented. Monetary policy was significantly tightened, with the weekly AWPLR trending as high as 29.67% during the year.
TOTAL ASSETS
Rs. 184 Bn
TOTAL REVENUE
Rs. 97 Bn
EMPLOYEES ACROSS 6 SECTORS
11,092
8
Annual Report 2022/2023
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Softlogic Holdings plc published this content on 17 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 April 2024 11:19:01 UTC.