UNION CHEMICALS LANKA PLC UNION CHEMICALS LANKA PLC
Notice of Meeting
NOTICE IS HEREBY GIVEN THAT the 34th Annual General Meeting of Union Chemicals Lanka PLC will be held at Ceylon Chamber of Commerce, Ground Floor, West Wing Conference Room, No 50 Navam Mawatha, Colombo 02, on Friday, 10th June, 2022 at
10.30 a.m. for the following purposes :
- To receive and consider the Audited Financial Statements for the year ended 25th December, 2021 together with the Reports of the Auditors' thereon and the Annual Report for the said year.
- Reappointment and Re-election of Directors
- To re-appoint as a Director, Mr. Soma Russel Noel de Zilwa who was 75 years on 28th January, 2022 and who vacates his office in terms of Section 210 of the Companies Act No. 7 of 2007 (the Act).
Notice is hereby given to propose the undernoted Ordinary Resolution in compliance with Section 211 of the Act, in relation to his re-appointment.
"RESOLVED THAT Mr. Soma Russel Noel De Zilwa who is 75 years of age be and is hereby re-appointed a Director of the Company and it is hereby declared that the age limit of 70 years referred to in Section 210 of the Companies Act No. 7 of 2007 shall not apply to the said Mr. Soma Russel Noel De Zilwa".
- To re-elect, Mr. U L Pushpakumara, Director, who retires by rotation in terms of Article 84 of the Articles of Association of the Company.
- To re-appoint the retiring Auditors Messrs. KPMG, Chartered Accountants, to hold office until the conclusion of the next Annual
General Meeting and to authorise the Directors to determine their remuneration. - To authorise the Directors to determine and make donations.
(Sgd).
BY ORDER OF THE BOARD
JACEY & COMPANY
SECRETARIES
19th May, 2022
Colombo
NOTE:
- A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE IN HIS/HER STEAD.
- A PROXY NEED NOT BE A MEMBER OF THE COMPANY
- THE COMPLETED FORM OF PROXY MUST BE DEPOSITED AT THE SECRETARIES OFFICE OF THE COMPANY AT NO.9/5, THAMBIAH AVENUE, COLOMBO 07 NOT LESS THAN 48 HOURS BEFORE THE TIME FIXED FOR THE MEETING.
Annual Report 2021 | 1 |
UNION CHEMICALS LANKA PLC
Chairman's Message
Dear Shareholder | Directors |
I am pleased to welcome you to the 34th Annual General Meeting of the Company and present, on behalf of my fellow Directors, the Annual Report and the audited Financial Statements of the Company for the financial year ended 25th December 2021.
Company Performance
Despite the ongoing COVID pandemic, widespread supply bottlenecks, and rising energy and raw materials prices, 2021 was a very successful business year for Union Chemicals. We achieved record levels of sales and earnings during the period under review.
A profit before tax of Rs. 203 Mn was achieved for the year, and by raising the prices by 42% we were able to increase our revenue to Rs.
1.59 Bn, an increase of 48% rom last year. This enabled us to earn a premium on our cost of material for 2021. Strategic intervention measures such as organizational restructuring and cost discipline have paid immediate dividends thus confirming that we are on the right path in taking our business forward during the difficult period.
The pandemic posed many challenges, but we continued undeterred in our journey to deliver locally manufactured products of high quality to our customers. Our front liners' commitment and perseverance during the third COVID wave was truly commendable, and credit for our exceptional performance this year is due to them.
Economy and Future Outlook
Sri Lanka faces unsustainable debt and significant balance of payments challenges. The economic outlook is highly uncertain due to the fiscal and external imbalances. After keeping the exchange rate broadly fixed around 201 LKR/US$ for seven months, the Central Bank floated the currency in the beginning of March 2022 to stem reserve losses, which resulted in the depreciation of our currency by 46 percent by end March. All these facts resulted in an adverse impact to the local semi luxury market, in which Union Chemicals operates.
Turning to 2022, the country is undergoing its worst financial crisis in over 70 years, as paper-thin reserves amid unsustainable debt levels, elevated inflationary pressures and a still-fragile tourism sector led the country to suspend its foreign debt repayments in April 2022. Indeed, both the manufacturing and services sector dipped to the lowest levels in several months. We sincerely hope that the Government will address these issues urgently and bring in appropriate policy measures to stabilise the deteriorating economic condition at the earliest.
We were saddened by the death of Mr. G R Pathmaraj who joined the Board in 18th March 1988 had served the company with dedication for the last 33 years. During his term of office he had made immense contributions to the company, which we value deeply. On behalf of the Board and the Company we convey our heartfelt condolences to his family and relatives.
Dividends
Even though the continuing adverse economic conditions may have negative impact on the future performance of the Company, the Board of Directors, based on the exceptional performance this year, is pleased to propose a final dividend of 10.00 per share to the Annual General Meeting. With the interim dividend of Rs. 15/- per share paid in Oct. 2021, the total dividend payment to shareholders for the 2021 business year will be Rs. 37.5 Mn.
Acknowledgement
I thank wholeheartedly my colleagues on the Board of Directors for their valuable advice and support during the year. I wish to congratulate the Managing Director for his visionary leadership and astute management skills.
The dedication of our employees, suppliers- Dow Chemical Company and others-, and other stakeholders has been integral in sustaining our operations across the whole value chain, and for which, we are truly grateful. Appreciation is also due to Government Institutes and Banks for their support and assistance extended to our business operations. We also extend our heartfelt appreciation to you, our shareholders, for the continued trust placed on us during a most difficult and challenging year.
(Sdg).
Dr. Azeez M Mubarak
Chairman
29th April 2022
2 | Annual Report 2021 |
UNION CHEMICALS LANKA PLC
Financial Review
Union Chemical Lanka PLC, is manufacturing and trading of waterborne polymer, adishive, coating and industrial chemicals to deliver excellent performance.
Majority of the key factors influencing our business are global and regional economic conditions, oil and gas exploration, shipping freights charges currency fluctuations. and international and local regulation on chemical manufacturing.
As the Company's operations involve providing a range of products a broad spectrum of customers in mainly western province, no one factor opinion, determines the Companies' financial condition or the profitability of the Company's operations.
Global growth in the chemical industry was 6.1% in 2021, almost as high as growth for the industry as a whole, despite only a minimal decline in chemical production in the previous year unlike in many other industries. While the stronger performance in the previous year had mainly been due to extraordinary pandemic-related demand for disinfectants, cleaning agents and single-use plastics, as well as to the early recovery in China, in 2021, the global upswing in many consumer goods industries contributed to growth.
Chemical production in China, the world's largest chemical market, saw especially strong expansion (+7.7%). However, growth slowed at a high level during the course of the year. Electricity cuts had a negative effect on production, particularly in the third and fourth quarters. Growth in other emerging markets of Asia was also high at around 6.9%.
Cost of sale increased considerably year under review due to increase in key raw material effected increasing the price of a barrel of Brent crude oil averaged $71 in 2021 (2020: $42). Gas prices on European spot markets rose sharply and were at an all-time high at the end of 2021.
Revenue
Rs. 1,596.7 Mn.
2020 - Rs. 1,026.1 Mn.
Rs. Mn. | Revenue | ||||||||
1.8 | |||||||||
1.6 | |||||||||
1.4 | |||||||||
1.2 | |||||||||
1.0 | |||||||||
0.8 | |||||||||
0.6 | |||||||||
0.4 | |||||||||
0.2 | |||||||||
- | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
2012 |
The revenue of the Company increased by 56% to Rs. 1,596.7 Mn. from Rs. 1,026.1 Mn. The revenue from latex segment and chemicals & plastic segment increased by 62% and 40% respectively comparative to last year.
Revenue of paints, adhesive coatings and textiles increase by 66%, 51%, 89% and 28% respectively comparative to last year.
The performance of chemicals & plastic segment recorded a significant increase in revenue of 40% comparative to last year.
Segment contribution to the Company revenue Company revenue includes the Company's core activity of manufacturing of latex products and trading of chemical & plastic. The major revenue contributor for the Company has become manufacturing of latex 74.58% from total revenue compared to 71.74% recorded last year.
Revenue per employee
Rs. 38.9 Mn.
2020 - Rs. 25.0 Mn.
Rs.(000) | Revenue per employee |
40 | |||||||||
35 | |||||||||
30 | |||||||||
25 | |||||||||
20 | |||||||||
15 | |||||||||
10 | |||||||||
5 | |||||||||
- | |||||||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Our employees make a significant contribution to Union Chemical's success. We want to attract and retain talented people for our Company and support them in their development. To do so, we cultivate a working environment that inspires and connects people. It is founded on inclusive leadership based on mutual trust, respect and dedication to excellent performance.
Goss Profit
Rs. 304.7 Mn.
2020 - Rs. 239.5 Mn.
The gross profit for the period is Rs. 304.7 Mn. against Rs. 239.5 Mn. in 2020. Gross profit margin of latex segment decreased to 15% from 23. % comparative to last year. Significant increase in CIF prices in term of LKR per Kg in key raw material of Styrene Monomer by 63%, Vinyl Acetate Monomer by 121 %, Butyl Acrylate by 142% and 2- Ethyl Hexyl Acrylate by 146% in Latex segment comparative to last year.
Gross profit margin of chemicals and plastic segment increased to 34% from 27. % Comparative to last year. Increasing in gross profit margin in chemicals and plastic segment significantly offset the performance of the latex sector year under review.
Annual Report 2021 | 3 |
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Union Chemicals Lanka plc published this content on 20 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 May 2022 07:54:08 UTC.
