Annual Report 2009/2010 - Colombo Stock Exchange

C h a i r m a n ' s S t a t e m e n t
2
CHAIRMAN'S STATEMENT
It gives me great pleasure to welcome all of you to our
th
14 Annual General Meeting and to present to you the
audited Financial Statements of the Company for the
st
year ended 31 March 2010.
The Company commenced the year in some
considerable difficulty; on the global front, world
leaders were still in the process of getting to grips with
the financial crisis, in Sri Lanka, the conflict in the
North had intensified considerably & for Lion it was
imperative that it addressed the issue of its balance
sheet weighed down by high gearing. I am pleased to
say that all three are now behind us.
In Sri Lanka, amidst much pressure from both home &
overseas a resolute President gave strong political
leadership to conclude a three decade long war. A
grateful nation gave President Rajapakse & his
administration a resounding mandate for a second
term in the recently concluded Presidential & General
Elections.
The financial crisis that threatened to paralyze global
economic growth was gradually brought under
control. The recovery will be slow but a recovery there
is & we must all be glad that the worst in behind us.
In September 2009, the successfully concluded Right
Issue helped correct the anomalies in the balance
sheet of Lion Brewery. The year also saw the Company
return to a reasonable level of profitability after a less
than satisfactory result in the previous period. Volumes
grew once optimism returned to the country at the
conclusion of the war. Tourist returned to Sri Lanka in
reasonable numbers although still much behind its true
potential. Interest rates too declined on the back of
lower inflation and the currency remained stable for
much of the year. That the Company was able to take
full advantage of the dramatic change in the
environment is a tribute to its multiple strengths of
Brand portfolio, world class distribution &
manufacturing systems, efficient logistics operations &
aggressive management.
Based on the results achieved during the year, I am
pleased to announce that the Board is recommending a
first & final dividend of Rs 3 per share. This dividend will
be free of tax in the hands of shareholders.
I foresee a period of stability & growth for Sri Lanka. The
Country has a peaceful environment & a stable, popular
& credible presidency & administration in place after
many a year. The focus on infrastructure development is
expected to continue. Tourist arrivals will increase
significantly. All these augur well for businesses in
general including your Company. On the alcohol policy
front, it is unlikely that changes for the worse will be
implemented since the focus will now be on growth and
development.
Based on these factors, I believe that your Company is on
the threshold of further growth in the year ahead. In
order to meet market demand it is necessary that we
expand capacity at the brewery & this is currently in
progress.
In India too we expect a period of sustained growth in
the year ahead. The economic environment continues to
improve at an impressive pace & with it the beer industry
is expected to grow at double digit rates. The Indian
business is still very much in an investment phase but this
is to be expected since establishing an appropriate
distribution & manufacturing footprint in such a large
geographical area is no small matter.
I extend my appreciation to all employees, especially the
Management Team, for it is their dedication &
commitment to the Company and its brands that laid the
strong platform for growth during the year under review.