Annual Report 2011 - Colombo Stock Exchange

UNION CHEMICALS LANKA PLC2 0 1 1 - A N N U A L R E P O R TCHAIRMAN’S MESSAGEthOn behalf of the Board of Directors, I welcome you to the 24 Annual General Meeting of the Company andsubmit you the Annual Report together with the audited Statement of Accounts of the Company for thethfinancial year ended 25 December 2011.The EconomyThe economy grew by 8.3 percent in 2011, the highest in Sri Lanka's post independence history, sustaining agrowth momentum of 8 percent over two consecutive years. The Industry and Service sectors were the driversof high growth momentum in 2011.Industry sector remained resilient in a challenging environment recordingimpressive growth of 10.3 percent in 2011.Inflation remained at single digit levels for the third consecutive yearsupported by improved domestic supply conditions and prudent liquidity management by the Central Bank.PerformanceThe performance of the Company is analyzed in detail in the Review of Operations in page 04. The revenue ofthe Company for the year was Rs.659.13 mn, a growth of 11% over the last year's performance. Wecommercialized new solutions that anticipate and address needs of our customers to enhance our growth inearnings. The profit after tax for the period is Rs.57.08 mn in comparison to Rs. 54.25 in the previous year. Wedelivered these results in the midst of an often unpredictable economic environment, which is validation of theresilience of our Company.Future OutlookThe global economic outlook for 2012 is mixed, while downside risks to global economic recovery continue topersist. The Sri Lankan economy is projected to grow at a slower rate of 7.2 percent in 2012.Our priorities remainclear for 2012 and beyond. Our R& D pipeline is stronger than ever before, and more importantly, ourinnovations are delivering real value to the bottom line today. Our investments in R&D continue to add newproducts for the paints and adhesives industries and new specialty chemicals will be introduced in to themarket through new trading partners. We have strengthened our balance sheet and continue to driveefficiencies throughout the Company, which gives us greater flexibility to execute on our strategy.DividendsThe Board of Directors declared Rs.6.00 per share as interim dividend in December 2011. We now recommendthe payment of final dividend of Rs.5.00 per share.AcknowledgmentI wish to thank my colleagues on the Board of Directors for their valuable advice and support during the year.My thanks to the management team and employees for high levels of commitment and dynamism they havemade to the continued good performance of the Company during the year 2011. I also appreciates theassistance extended by Dow Chemical Company and other suppliers, Government Institutes and Banks. FinallyI take this opportunity to express our appreciation to our valued business partners and stockholders for yourinvestment and your confidence in our future.Dr. P.M. GunasekeraChairmanth25 April 2012.3