United Motors Lanka : Annual Report 2023/24

Annual Report 2023/24

In the dynamic landscape of the automotive industry, adaptability and innovation are paramount. United Motors, a pioneering force in this realm, exemplifies these principles through their steadfast commitment to rethink, refocus, and rebuild.

RETHINK: United Motors embraces the power of forward- thinking, consistently challenging conventional norms, exploring new avenues and technologies to stay ahead of the curve. We approach each endeavor with a fresh perspective, fostering creativity and ingenuity.

REFOCUS: In an industry marked by constant evolution, staying true to core values while adapting to shifting paradigms is essential. United Motors excels in refocusing its efforts, directing resources towards initiatives that align with its long-term objectives.

REBUILD: Adversity often presents opportunities for growth, and United Motors understands the importance of resilience.

In times of challenge or setback, we leverage our expertise and determination to rebuild stronger than before.

Furthermore, United Motors recently marked a significant milestone by acquiring full ownership of Dutch Lanka Trailers, a move that amplifies its global footprint and enhances its capabilities in the transportation sector. This strategic acquisition not only expands our portfolio but also reinforces our position as an industry leader, poised for continued innovation and growth.

United Motors' dedication to rethinking, refocusing, and rebuilding serves as a testament to its enduring legacy of excellence in the automotive industry.

2	O V E R V I E W	/	S T E W A R D S H I P	/	M A N A G E M E N T	R E V I E W S

ABOUT THIS REPORT

Welcome to the Annual Report of United Motors Lanka PLC (referred to as UML). This report provides stakeholders with a balanced and concise account of how we created value during the year and our strategic direction going forward. This report will also share UML's financial and operational performance for the year ended 31 March 2024 and our collective strategies to overcome the year's challenges.

SCOPE AND BOUNDARIES

The report covers the operations of United Motors Lanka PLC (UML) and its subsidiaries: Unimo Enterprises Limited (UEL), U M L Heavy Equipment Limited (UMLH), U M L Property Developments Limited (UMPDL), Dutch Lanka Trailer Manufacturers Limited (DLT), and Dutch Lanka Engineering Private Limited (DLE), collectively referred to as the DLT Group. These subsidiaries, along with UML, will be referred to as the 'Group' in this report. The report covers the period from 1 April 2023 to 31 March 2024.

The Group adopts an annual reporting cycle for both its financial and other disclosures reporting, and this report builds on our previous Annual Report for the financial year ended 31 March 2023. Both the financial and non-financial disclosures pertain to the Group, unless specifically mentioned otherwise. The Group acquired Dutch Lanka Trailer Manufacturers Limited, and its' subsidiary company Dutch Lanka Engineering

Private Limited. During the year ended 31 March 2024, and there were no other material changes to the Group. There were also no material restatements

of information published in last year's report.

REPORTING FRAMEWORKS

We are committed to aligning our reporting with global best practices in corporate reporting and comply with a range of internationally accepted reporting frameworks as listed below:

• Companies Act No.7 of 2007
• Sri Lanka Financial Reporting Standards (SLFRS) /Sri Lanka Accounting Standards (LKAS)
• Listing requirements of the Colombo Stock Exchange
• Guidelines issued by the Securities and Exchange Commission of Sri Lanka
• Code of Best Practice on Corporate Governance issued by the Institute of Chartered Accountants of Sri Lanka

INDEPENDENT ASSUARANCE

Independent Assurance has been obtained from Group Auditors Messrs. Deloitte Partners on the Consolidated Financial Statements.

FEEDBACK

We are committed to consistently enhancing the quality and readability of our Annual Report and welcome your feedback, suggestions and other comments. Please direct your feedback to,

[e-mail]

To view this report online, or for any other information please log on to

www.unitedmotors.lk

United Motors Lanka PLC

G O V E R N A N C E	/	F I N A N C I A L	R E P O R T S	/	M I S C E L L A N E O U S	3

TABLE OF CONTENTS

OVERVIEW
About This Report	2
Table of Contents	3
About Us	5
Group Structure	6
Milestones	8
Operational and Financial Highlights	10
STEWARDSHIP
Chairman's Review	13
Group CEO's Review of Operations	17
Board of Directors	22
Senior Management Team	34
MANAGEMENT REVIEWS
Management Discussion and Analysis	45
Review of Operations	53
Financial Capital	60
Manufactured Capital	64
Social and Relationship Capital	67
Human Capital	73
Natural Capital	79
Intellectual Capital	81
GOVERNANCE
How We Govern	85
Report of the Board Audit and
Risk Committee	112
Report of the Remuneration Committee	115
Report of the Nomination and
Governance Committee	118
Report of the Related Party
Transactions Review Committee	121
Report of the Strategy Review Committee 123
Enterprise Risk Management	124
Directors' Statement on
Risk Management and Internal Controls	131
Annual Report of The Board of Directors	133

FINANCIAL REPORTS			13
Financial Calendar		141
Statement of Directors' Responsibility	142
Responsibility Statement of
Chief Executive Officer and		CHAIRMAN'S
Chief Financial Officer		143
Independent Auditor's Report	144	REVIEW
Statement of Profit or Loss and
other Comprehensive Income	150	46
Statement of Financial Position	151
Statement of Changes In Equity	152
Statement of Cash Flows		154
Notes to the Financial Statements	155	OUR VALUE
MISCELLANEOUS			CREATION MODEL
Share Information		235
Ten Year Summary - Group		239	85
Investor Information		240
Glossary of Financial Terms		241
Notice of Meeting		243
Form of Proxy		247	HOW WE
Corporate Information	Inside Back Cover	GOVERN
			239

TEN YEAR SUMMARY -

GROUP

Annual Report 2023/24

OVERVIEW

G O V E R N A N C E	/	F I N A N C I A L	R E P O R T S	/	M I S C E L L A N E O U S	5

ABOUT US

Established in 1945, United Motors Lanka PLC is one of Sri Lanka's oldest and most esteemed automobile companies. Over the decades, we have earned our place among the island's top-tier business entities, consistently recognised in the LMD 100 and Most Respected Entities by LMD. Our commitment to good governance practices is reflected in our annual reports, which have been consistently acknowledged as the Best in the Automotive Sector by the Institute of Chartered Accountants of Sri Lanka.

United Motors Lanka PLC is honored to represent a diversified portfolio of esteemed automotive brands from across the globe. Our offerings include Mitsubishi passenger and Fuso commercial vehicles from Japan, Perodua compact cars from Malaysia, JMC commercial vehicles from and DFSK SUVs from China. Additionally, we are proud to represent JCB heavy equipment and generators from India along with the full product range of LiuGong heavy equipment in the Maldives and their forklifts in Sri Lanka. Furthermore, we distribute premium products such as Yokohama tyres from Japan, Valvoline lubricants, Prestone and Simoniz car care products from the USA.

With a commitment to serving our customers across the island, United Motors maintains a comprehensive branch network in Orugodawatte, Ratmalana, Panchikawatta, Anuradhapura, Kandy, Kurunegala, Matara, Nugegoda, Ratnapura, and Jaffna. This network ensures seamless sales and after-sale services that are customer-centric and reliable. We boast a robust dealer network of over 2,500 outlets nationwide, covering both urban and rural areas for the distribution of tyres, genuine parts, and lubricants.

Additionally, United Motors Lanka PLC has expanded its operations into export activities with the recent acquisition of Dutch Lanka Trailers, marking a strategic move towards broader international market engagement. This development underscores our commitment to growth and diversification, enhancing our position as a leading player in Sri Lanka's automotive and industrial sectors.

We look forward to building on our legacy of excellence and innovation, continuing to exceed expectations and deliver value to our stakeholders in the years ahead.

Annual Report 2023/24

6	O V E R V I E W	/	S T E W A R D S H I P	/	M A N A G E M E N T	R E V I E W S

GROUP STRUCTURE

Vehicle

• Sales
• After-saleservices
• Spare parts

Solar power

			T	C	O
		N		M	P
	E
				A
R
					N
A
P
						Y

AUTOMOBILES

POWER & ENERGY

LUBRICANTS	Reg. No. PQ 74	MANUFACTURING
	& TECHNOLOGY
	(Incorporated - 09 May 1989)

Lubricants and car care	3D Printing equipment/material
	• Sales
	• After-sales services
	• Certification courses
	• Hydrophobic surface
	protection products
	(Nano-coating products)

DIRECTORS

Mr. Devaka Cooray	Mr. Chanaka Yatawara	Mr. Ananda Atukorala
Chairman	Group Chief Executive Officer/
	Executive Director
Mr. Ramesh Yaseen	Ms. Hiroshini Fernando	Prof. Malik Ranasinghe
Executive Director-After-Sale Services		(Resigned w.e.f. 31 March 2024)
Mr. Stuart Chapman	Ms. Coralie Pietersz	Mr. Junya Takami
Mr. Thushara Jayasekara	Mr. V. Govindasamy	Ms. Rinoza Hisham
Executive Director-Finance	(Appointed w.e.f. 15 May 2024)	Company Secretary

United Motors Lanka PLC

G O V E R N A N C E	/	F I N A N C I A L	R E P O R T S	/	M I S C E L L A N E O U S	7

SUBSIDIARIES

UNIMO ENTERPRISES

U M L HEAVY EQUIPMENT

U M L PROPERTY

DUTCH LANKA TRAILER

LIMITED

LIMITED

DEVELOPMENTS LIMITED

MANUFACTURERS LIMITED

100% Subsidiary

100% Subsidiary

100% Subsidiary

100% Subsidiary

Reg. No. PB 218

Reg. No. PB 5403

Reg. No. PB 253

Reg. No. PB 175

(Incorporated on 17 March 1994)

(Incorporated on 07 July 2017)

(Incorporated on 08 October 1993)

(Incorporated on 13 March 1992)

DUTCH

LANKA

ENGINEERING

(PVT) LIMITED

100% Subsidiary

Reg No PB 7006

(Incorporated on

16 May 1997)

Automobile

Equipment

Tyres

Equipment,

Property

Port and road trailers

Road Trailers

and

Generators and

machinery

machinery

• Renting of

• Assembly

• Sales

• Sales

• Sales

• Terminal Trailers

• Design & manufacture

• Sales

• After-sales

warehouses

• Design and Manufacture

• Local Sale

• After-sales

services

• Export/ Local sales

• Heavy Steel Fabrication

services

• Fabrication

• Services

• Spare part export sales

• Bodybuilding

Applications

• Spare part sales

DIRECTORS

Mr. Devaka Cooray -

Chairman

Mr. Chanaka Yatawara -

Group Chief Executive Officer/

Executive Director

Mr. Ananda Atukorala

Mr. Ramesh Yaseen

Ms. Hiroshini Fernando

Mr. Thushara Jayasekara

Mr. Mahesh Gunathilake - Chief Executive Officer/ Executive Director (Resigned w.e.f. 20 May 2023)

Mr. Raveendra Siriwardene

(Resigned w.e.f. 06 July 2023)

Ms. Rinoza Hisham -

Company Secretary

DIRECTORS	DIRECTORS	DIRECTORS
Mr. Devaka Cooray -	Mr. Devaka Cooray -	Mr. Devaka Cooray -
Chairman	Chairman	Chairman
Mr. Chanaka Yatawara -	Mr. Chanaka Yatawara -	Mr. Chanaka Yatawara -
Group Chief Executive Officer/	Group Chief Executive Officer/	Group Chief Executive Officer/
Executive Director	Executive Director	Executive Director
Ms. Hiroshini Fernando	Mr. Thushara Jayasekara	Mr. Prasanna Haturusinghe -
Mr. Thushara Jayasekara	Ms. Rinoza Hisham -	Chief Executive Officer/ Executive
Director
Mr. Priyantha Ellepola
Company Secretary	Corporate Services (Pvt) Ltd -
Mr. Gihan Pilapitiya
	Company Secretaries
Mr. Buddhika Singhage
Ms. Rinoza Hisham -
Company Secretary

Annual Report 2023/24

8	O V E R V I E W	/	S T E W A R D S H I P	/	M A N A G E M E N T	R E V I E W S

MILESTONES

	Exclusive distributor	Expansion with the
Commencement of	agreement with	incorporation of U M L
United Motors Limited,	Mitsubishi Motors	Property Developments
marking the beginning	Corporation for	Limited to construct	Re-registration as
of its corporate journey	sales of the flagship	a warehouse complex	United Motors Lanka
as a private limited	brand "Mitsubishi,"	at Orugodawatta,	PLC, reflecting UML's
liability company,	establishing UML as	demonstrating	continued growth and
laying the foundation	a trusted partner of a	UML's commitment	transformation into a
for decades of	renowned automotive	to infrastructure	leading automotive
automotive excellence.	brand.	development.	entity.

1945 1985 1993 2007

1972 1989 1994 2009

United Motors	Incorporation of United	Strengthening its	Opening of a local
Limited vested with	Motors Lanka Limited as	stronghold with the	vehicle assembly
the Government and	a public limited liability	incorporation of Unimo	facility within the
commences operations	company with Stated	Enterprises Limited	Orugodawatte
as a Government	Capital of	(UEL) to import and sell	workshop complex by
Owned Business,	LKR 100,000,000	vehicles, enhancing UML	UEL, showcasing UML
solidifying its role as		Group's market presence	Group's commitment
a key player in the		and product offerings.	to local assembly and
automotive industry.			operational efficiency.

United Motors Lanka PLC