ASIAN Hotels AND properties pLC ANNuAL rEporT 2013/14

Transcription

ASIAN Hotels AND properties pLC
|
Annual report 2013/14
No. 77, Galle road, Colombo 03,
Sri Lanka.
T : 0094 -11 2437437
F : 0094 -11 5547555
THE
annual
report
smile
survey
ANNuAL rEporT 2013/14
corporate information
Name of Company
Asian Hotels and Properties PLC
Legal Form
A Public Limited Liability Company incorporated in Sri Lanka
in 1993 and registered with the Board of Investment of Sri
Lanka under Section 17 of the Board of Investment Law No.
4 of 1978. The Company was re-registered as per the New
Companies Act No. 7 of 2007 on 15th June 2007.
Stock Exchange Listing
The issued Ordinary Shares of the Company are listed on the
Main Board of the Colombo Stock Exchange of Sri Lanka.
Company Registration No.
PQ 2
Every
Smile
HAPPINESS IS INDISPENSABLE IN THE HOSPITALITY INDUSTRY. IT IS WHAT FORMS
PERCEPTIONS, CREATES MEMORIES AND KEEPS PEOPLE COMING BACK FOR MORE. FOR
US, IT IS AN EMOTION THAT HAS PERMEATED INTO EVERY ASPECT OF THE BUSINESS;
FROM WHAT WE DELIVER TO THE GUESTS, TO HOW WE DO THINGS, EVERY DAY. IT’S WHAT
MOTIVATES US, WHAT INSPIRES US AND WHAT MAKES US THE BEST IN THE INDUSTRY. THE
HAPPINESS OF OUR PATRONS, OUR TEAM AND OUR SURROUNDINGS IS A REFLECTION OF
THE QUALITY THAT WE OFFER AND A TESTIMONY TO OUR MANY YEARS OF EXPERIENCE.
WE MAKE EVERY MOMENT WORTHWHILE… WE MAKE EVERY SMILE COUNT.
Board of Directors
Mr. Susantha Chaminda Ratnayake - Chairman
Mr. Ajit Damon Gunewardene - Managing Director
Mr. James Ronnie Felitus Peiris
Mr. Rohan Jebashanthan Karunarajah
Mr. Suresh Rajendra
Mr. Sanjiva Kanishka Gamini Senanayake
Ms. Shirani Anoja Jayasekara
Mr. Cholmondeley John Lloyd Pinto
Company Secretaries
Keells Consultants (Private) Limited
117, Sir Chittamplalam A. Gardiner Mawatha,
Colombo 2.
Registered Office
No. 77, Galle Road, Colombo 03
Tel : 0094 -11 2437437
Fax : 0094 -11 5547555
E-mail:[email protected]
Design & Concept by: Optima Designs (Pvt) Ltd.
Printed by: Gunaratne Offset Ltd
Auditors
KPMG
Chartered Accountants
32A, Sir Mohamed Macan Marker Mawatha,
Colombo 03.
Bankers
Citibank N.A - Colombo
Deutsche Bank AG - Colombo
Seylan Bank Ltd - Millennium Branch, Colombo
Hongkong & Shanghai Banking Corp. Ltd. - Colombo
Nations Trust Bank PLC - Union Place, Colombo
DFCC Vardhana Bank Ltd. - W.A.D. Ramanayake Mw,
Colombo
Bank of Ceylon - Colombo
Contents
Group Financial Highlights of 2013/14
4
Chairman's Statement
26
Management Discussion and Analysis
30
Board of Directors
38
Annual Report of the Board of Directors
40
Risk Management
46
Corporate Governance
50
Sustainability Report
76
Financial Calendar
138
Report of the Audit Committee
140
Statement of Directors' Responsibility
142
Independent Auditors' Report
143
Income Statement
144
Statement of Comprehensive Income
145
Statement of Financial Position
146
Statement of Cash Flow
147
Statement of Changes in Equity
148
Notes to the Financial Statements
150
Consolidated Value Added Statement
186
Information to Share Holders and Investors
187
Five Year Financial Summary Group
189
Five Year Financial Summary Property Development 189
Five Year Financial Summary Cinnamon Grand 190
Notice of Meeting
191
Form of Proxy
195
Corporate Information
Back Inner Cover
In order to understand the
varying moods of Asian
Hotels and properties pLC,
we conducted the annual
report smile survey with
the following icons. The
results from guests and staff
have been collated in the
following pages...
THE
annual
report
smile
survey
2
ASIAN HOTELS AND PROPERTIES PLC
Annual Report 2013/14
Corporate Mission
To generate long-term, sustainable,
shareholder wealth by developing the
capacity to add value to land, buildings
and related investments and combine them
uniquely so that they complement and
reinforce each other.
business values
To provide a return on investment
above the risk free investment rate to
shareholders. To increase productivity
of the workforce and provide training
in order to improve their knowledge,
skills and attitudes and to optimise the use
of available resources. To adhere to the
highest levels of integrity, transparency
and ethical conduct.
3
Group financial highlights of 2013/14
20142013
(Rs.'000)(Rs.'000)
Revenue 8,256,149
7,890,978
Gross Profit
5,025,073
4,823,417
Profit After Tax
2,818,511
3,097,386
Shareholders Funds
22,338,036 21,697,467
Market Capitalisation
26,035,188 30,994,271
Earnings Per Share (Rs.)
5.42
5.63
Market Value Per Share (Rs.)
58.80
70.00
Current Ratio (Times)
3.54
3.53
Dividend Per Share (Rs.)
4.00
4.00
Net Assets Per Share (Rs.)
50
49
Dividend Payout Ratio (Percentage)
74%71%
Earnings Per Share
Dividend Per Share
Rs.
Rs.
6.0
4.50
4.00
5.0
3.50
3.00
4.0
2.50
3.0
2.00
1.50
2.0
1.00
1.0
0.50
2014
2013
2012
2011
2014
2013
2012
2011
2010
4
2010
0
0
Rs.
8.2Bn
Rs.
Group Revenue
5.3Bn
company revenue
Rs.
2.8Bn
Rs.
2.3Bn
Rs.
5.42
Rs.
4.00
Group profit After Tax
company profit After Tax
Earnings per Share
Dividend per Share
Net Assets Per Share
Current Ratio
Rs.
Times
60
4.00
3.50
50
3.00
40
2.50
2.00
30
1.50
20
1.00
10
0.50
2014
2013
2012
2011
2014
2013
2012
2011
2010
5
2010
0
0
The Executive Lounge, on the 9th floor of the hotel offers a panoramic view of the city
whilst providing our guests a host of comforts and conveniences. It is the ideal place
for industry professionals to convene for work as well as to relax.
6
THE
annual
report
smile
survey
Ibrahim Awlear
MD of global outlets pvt. ltd.
Lebanon
What did we do to make you smile?
Corporate Guest
COMMENTS : The Executive Lounge at the Cinnamon Grand is not only luxurious but also offers
everything that a professional like me would require in conducting our business activities.
7
The Coffee Stop at the Cinnamon Grand lobby is always a popular stop for the young
and old. It offers a delectable range of delights; from mouth-watering sandwiches to
decadent cakes.
8
THE
annual
report
smile
survey
Abeer gnadialy
a.l. sulimanin
Jeremy vista
flight attendants
india, saudi arabia, phillipines
AIrLINE CrEW
COMMENTS : Abeer - I love the food and the Coffee Shop is always amazing!
Sulimanin - Every stay is a beautiful experience with sunny skies and lovely seafood dishes.
Jeremy - The staff are always welcoming and the Crescat Boulevard has some great places to shop.
9
Under summer skies, the pool is the best place to soak up some sun. The refreshing
blue waters are sure to refresh and revitalise.
10
THE
annual
report
smile
survey
jonathan Downer
sales manager
singapore
LEISurE TrAvELErS
COMMENTS : My family and I love to visit this hotel . We love the atmosphere and the staff who go out
of their way to make our holiday a wonderful one , whenever we visit.
11
Sri Lanka’s finest open market seafood restaurant, The Lagoon offers the widest
selection of seafood, with an opportunity to select your own produce, fresh from the
catch-of-the day and have it served a la´ minute.
12
THE
annual
report
smile
survey
freddie flynt
Restaurant Guest
COMMENTS : Wow! Such a good and fresh selection of seafood and so many preparations! Wish I could
try them all!
13
Whatever you may require for your business dealings, whether it’s a functional and
stylish meeting room or the best of amenities, you can ﬁnd it at our Executive Lounge.
14
THE
annual
report
smile
survey
jacob berman
consultant
usa
Corporate Guest
COMMENTS : The Executive Lounge is a wonderful place for me to relax and conduct my business. It
is always wonderfully comfortable and a definite office away from office .
15
When it comes to events large and small, we provide the perfect venue and the best
packages in order to make your meeting or celebration a success.
16
THE
annual
report
smile
survey
felicia adihetty
managing director of
bconnected pvt. ltd.
Event organiser
COMMENTS : The Cinnamon Grand banquet staff are most co-operative and always willing to go the
extra mile . My work is made much easier, thanks to them.
17
London Grill, the sophisticated restaurant offers the best of Fine Dining, with a menu
that allows for a truly delightful gastronomic experience.
18
THE
annual
report
smile
survey
asanka wijekoon
senior chef, tao
aSSoCIATE
COMMENTS : This is the best place that anyone could work for. The recognition that I have received
for my service here truly makes me proud to be a part of a wonderful hotel .
19
Our luxurious suites are well equipped with the best in modern technology, combined
with classic luxury.
20
THE
annual
report
smile
survey
kaveesha fernando
housekeeping
aSSoCIATE
COMMENTS : I enjoy being a part of this hotel and being able to work under experienced managers
who encourage me to be better everyday.
21
Cheers Pub is a typically British styled pub and is the best place in town for pub grub
or catching some sporting action on a big screen while enjoying a drink with friends.
22
THE
annual
report
smile
survey
Namal jayalath
beverage manager
associate
COMMENTS : My job makes me smile everyday, even amidst the challenges. I am honoured to be a part
of a team that truly understands hospitality and what it takes to be leaders in this industry.
23
here are
the survey
results
97%
98%
Room Guest Services
restaurant & bar Services
Chairman's STATEMENT
Cinnamon city hotels continued
to maintain its brand presence
throughout the year enjoying a
51 per cent market share among
Colombo five star city hotels. The
Group recorded overall year-onyear revenue of Rs. 8.2 billion
reflecting a growth of 5 per cent
over the previous year.
During the financial year ended 31st March 2014, Asian Hotels and Properties PLC
continued to reaffirm its leadership position among the high end city hotels and property
brands in the country. It is on this encouraging note, that I table the Annual Report and
Financial Statements of your Company and Group for the financial year ended 31st
March 2014.
Tourism Industry in 2013
The global economy witnessed a steady recovery in the year 2013 resulting in improving
prospects for sustained growth and lower levels of unemployment in the advanced
economies. According to initial estimates released by the UNWTO, world tourism
reached a record of 1,087 million international tourist arrivals in the calendar year
2013, corresponding to a growth of 5 per cent over the preceding year. The growth in
international tourist arrivals was driven by Asia Pacific, led by South East Asia, Africa and
Europe, demonstrating the continuous change in demographics. Tourism receipts are
projected to post double-digit growth while the outlook for world tourism in the year 2014
is anticipated to be positive.
Sri Lanka tourism is well positioned in the post-conflict setting to be amongst the most
sought after destinations in the world. Arrivals to Sri Lanka grew 27 per cent to reach 1.2
million tourists for the calendar year 2013 with Western Europe and South Asia continuing
to be the dominant generating markets. While all key markets demonstrated appreciable
growth, Eastern Europe, South Asia and East Asia, in particular, grew at a rapid pace.
Tourism receipts were recorded at USD 1.7 billion.
A buoyant outlook is projected for the future of tourism in Sri Lanka. The recent
infrastructure development projects implemented by the government, particularly the
expressway to the main international airport, and other expressway networks, will
provide the necessary impetus in strengthening Sri Lanka’s position as a leading tourism
destination.
Group Performance
Cinnamon city hotels continued to maintain its brand presence throughout the year
enjoying a 51 per cent market share among Colombo five star city hotels. The Group
recorded overall year-on-year revenue of Rs. 8.2 billion reflecting a growth of 5 per cent
over the previous year. Group profits for the year amounted to Rs. 3,046 million against
the Rs. 3,336 million recorded in the preceding year which included fair valuation gains
on investment property of Rs. 268 million and Rs. 517 million respectively.
Accordingly, Group Earnings per Share (EPS) amounted to Rs. 5.42 during the year,
marginally lower than the EPS of Rs. 5.63 in the preceding year.
Cinnamon Grand Colombo
Cinnamon Grand adhered to its core business model, placing greater emphasis on
attracting corporate clientele from both local and regional markets. The hotel maintained
its market dominance, retaining a market share of 33 per cent. Corporate room nights,
which was the key revenue segment, reflected a year-on-year growth of 17 per cent.
The Commonwealth Heads of Government Meeting (CHOGM) 2013 summit held in
26
November 2013 was the major MICE
event hosted during the year. Cinnamon
Grand was chosen as the venue for the
CHOGM Business Forum which positively
impacted its operational reputation. By
leveraging on its unique value proposition,
Cinnamon Grand increased its yearround average occupancy to 76 per cent
from 72 per cent, achieving total revenue
of Rs. 4,897 million which was a 6 per
cent increase over the revenue of Rs.
4,622 million in the preceding year. The
increase in operating costs during the year
eroded revenue gains. However, prudent
management of working capital resulted
in a PBT of Rs. 1,732 million, a marginal
increase from the Rs. 1,720 million
reported in the previous year.
Cinnamon Lakeside Colombo
During the year under review, a focused
operational and marketing strategy
enabled the hotel to record occupancy of
61 per cent, against the city occupancy
of 53 per cent, while achieving an average
room rate of USD 138. Room revenue
grew by 3 per cent year-on-year while
food and beverage revenue posted growth
of 2 per cent, which amounted to Rs. 1.4
billion and Rs. 1.3 billion respectively.
Consolidated net revenue increased to
Rs. 2,939 million from Rs. 2,840 million
in the previous year. However, this
modest revenue gain was eroded by the
increase in operational expenses. This
led to profit from operations declining to
Rs. 816 million from Rs. 857 million last
year. The recurring net profit declined
to Rs. 743 million against a comparable
figure of Rs. 777 million last year which is
after excluding the investment property
valuation gain of Rs. 289 million.
Property Development
Total revenue for the year amounted to
Rs. 419 million, a slight decline from the
Rs. 428 million recorded last year.
27
However, effective controls on direct
costs improved the gross profit margin
to 44 per cent during the year. With a
growing number of high-end foreign
brands displaying a keen interest in
tapping into the Sri Lankan consumer
market, the Property Division leveraged
on its core brand value to conduct a
series of promotional campaigns in a
bid to increase the foot traffic to the
mall. Consequently Rs. 18.6 million was
generated by way of income on account
of these promotional efforts.
service culture within our staff through
the re-invention of our standard operating
procedures and processes.
The PBT of Rs. 442 million in the current
year included a fair valuation gain of
Rs. 268 million against the PBT of Rs. 405
million in the previous year which included
a corresponding gain of Rs. 228 million.
The above initiatives will be augmented
with the implementation of a new
property management system across all
hotels, improving the availability of guest
information and enhancing the ability to
improve satisfaction which should augur
well for the future.
Awards and Accolades
Our pursuit of continuous excellence has
led to a sustainable business model that
delivers coherent value to all stakeholders
associated with our business. Deeply
entrenched in our value culture, the
concept of sustainability permeates
through all aspects of our business,
playing a critical role in our strategic
development agenda. Over the last
decade, our commitment to sustainability
has become a hallmark of our brand
promise which has been recognised
with several awards and accolades. I am
indeed proud of the results achieved,
which are comprehensively captured in
the Sustainability Report.
Future Outlook
During the ensuing year, the Leisure
industry group will consolidate its overall
branding strategy where all resorts
will be brought under the “Cinnamon”
brand resulting in Cinnamon Hotels and
Resorts having 14 hotel properties and
over 2,400 rooms under its umbrella.
The Group is also conscious of the need
to further inculcate the desired ‘lifestyle’
In conjunction with the above, and in
keeping with the evolving trends and
technology, the hotels, as part of the John
Keells Leisure Group, have embarked on
a comprehensive Online and Social Media
Strategy. This will enable “Cinnamon” to
launch a new and revamped website,
establishing its presence across all social
media platforms.
Appreciations
I wish to extend my sincere gratitude to my
colleagues on the Board for the support
and guidance extended to me at all times.
I would like to thank all the respective
teams at Cinnamon Grand, Cinnamon
Lakeside and the Property Division for their
focus, dedication and commitment. I also
take this opportunity to thank our valued
clientele for their continued patronage. To
conclude, I extend my sincere gratitude to
all stakeholders and business partners for
their long standing support.
Susantha Ratnayake
Chairman
28th May 2014
Management
Discussion
& Analysis
Global Tourist Arrivals 2013
Tourist Arrivals to Sri Lanka
Mn
No. of
Arrivals
600
180,000
160,000
500
140,000
400
120,000
100,000
300
80,000
200
60,000
40,000
100
20,000
0
MIDDLE EAST
AFRICA
AMERICAS
ASIA & PACIFIC
EUROPE
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
20122013
Source: Sri Lanka Tourism Development Authority
Source: UNWTO
Global Economy
The global economy grew at a slower
pace during the year, regardless of the
strong economic signals emanating from
advanced economies in the latter part
of the year. Registering a growth of 1.3
per cent for 2013, marginally lower than
the growth of 1.4 per cent recorded in
2012, advanced economies appeared to
be on the rebound. Meanwhile, growth
in some emerging market economies
slowed due to weaker than expected
domestic demand despite improved
growth prospects for their exports. Thus
the global growth aggregate settled
at 3 per cent at the close of the year,
marginally less than the 3.1 per cent
recorded in 2012. Inflation remained
subdued in advanced economies in
2013, raising concerns of deflationary
pressures in some countries, particularly
in the Euro area, while emerging markets
and developing economies faced no great
challenge with regard to inflation, except
for certain countries such as Brazil and
India.
30
Global Tourism Industry Overview
International tourist arrivals reached a
record 1.087 billion in 2013, up 5 per
cent from the 1.035 billion tourist arrivals
reported in 2012. This year, Europe
led growth in absolute volume with an
additional 29 million arrivals in 2013. A total
of 563 million international tourists arrived
in Europe during 2013.
However, Asia and the Pacific experienced
the greatest relative growth with 14 million
additional arrivals, up 6 per cent from
2012. A total of 248 million international
tourists travelled in and through the region
last year. The Middle East is the only
region that did not report a change in
tourist arrivals between 2012 and 2013.
The global tourism sector has shown
a remarkable capacity to adjust to the
changing market conditions, fuelling
growth and job creation around the
world despite the lingering economic
and geopolitical challenges. Indeed,
tourism has been among the few
sectors generating positive news for
many economies. The positive results of
2013 together with the projected global
economic improvement in 2014, are
expected to set the scene for another
good year for international tourism in 2014.
Regional prospects are strongest for Asia
and the Pacific (+5% to +6%) and Africa
(+4% to +6%), followed by Europe and
the Americas (both +3% to +4%). In the
Middle East (0% to +5%), prospects are
positive but remain volatile.
Macro-economic Performance –
Sri Lanka
The Sri Lankan economy rebounded
strongly in 2013 with an annual real GDP
growth of 7.3 per cent, while inflation
remained at single-digit levels for the fifth
consecutive year. In spite of significant
upward adjustment to domestic energy
prices, prudent monetary management
and improved domestic food supply
resulted in a gradual decline in inflation
throughout the year. GDP in nominal
Country Wise Tourist Arrivals to Sri Lanka
Per Capita GDP at Market Prices
USD
No. of
Arrivals
%
3,400
220,000
120
3,200
200,000
100
180,000
3,000
160,000
2,800
80
140,000
2,600
120,000
2,400
100,000
60
40
80,000
2,200
60,000
2,000
20
40,000
1,800
0
2012
2013
Russia
Australia
Source: Central Bank of Sri Lanka
Annual Report 2013
China
2013
France
2012
Maldives
2011
Germany
2010
UK
2009
India
20,000
YoY Growth %
Source: Sri Lanka Tourism Development Authority
terms grew by 14.5 per cent to Rs. 8,674
billion or US dollars 67 billion, raising GDP
per capita to US dollars 3,280 in 2013.
Meanwhile, improved Balance of Payments
and international reserve position enabled
the rupee to remain relatively stable during
the year, with only a 3 per cent annual
depreciation against the US dollar.
Annual Average Exchange Rate
Rs./USD
135
130
125
120
115
110
105
100
2009
2010
2011
2012
Source: Central Bank of Sri Lanka
Annual Report 2013
31
2013
The year also saw the Government of
Sri Lanka step up efforts to improve
economic and social infrastructure across
the country, which forms a key part of the
strategy to achieve sustained economic
growth in the longer term. Among the high
priority areas undertaken were Colombo
city beautification and countrywide
township development projects. Aimed at
enhancing the wellbeing of the population,
the projects are also expected to convey
a number of socio-economic benefits
to the country, including enhancing the
country profile as a more desirable tourist
destination.
Overview of Sri Lanka’s Tourism
Industry
Sri Lanka managed to retain the
customary arrival matrix, with India, UK,
Germany, Maldives and France being the
top five sources of tourist arrivals in 2013,
accounting for 40 per cent of the growth
in tourist arrivals for the period. Meanwhile,
total arrivals to the country also exceeded
the United Nations World Tourism
Organisation’s (UNWTO) tourist growth
estimate of 6 per cent for the Asia Pacific
region and the 5 per cent growth for the
entire world. In tandem with this pattern,
the hotels and restaurants sub sector too
continued its high growth trajectory by
achieving 22.3 per cent growth during
2013 compared to the 20.2 per cent
growth recorded in 2012. Attracting over
1.27 million tourists during the year, the
sub sector performed commendably to
demonstrate year-on-year growth for the
second consecutive year. Thus a 26.7 per
cent year-on-year growth increased the
earnings from tourism to US dollars 1.7
billion.
Sector Overview (City Hotels)
With the enhancement of the island-wide
tourism infrastructure and exposure to
online travel information and booking
channels, Colombo is rapidly transforming
in to a popular travel destination in Asia.
Consequently, the demand for city hotels
grew by 2 per cent compared to last
year, further compounded by the lack
Management Discussion and Analysis contd.
Market Share of Cinnamon City Hotels
this development is likely revolutionise Sri
Lanka’s city hotel landscape in the years
ahead.
33%
Group Performance Overview
49%
18%
Cinnamon Grand
Cinnamon Lakeside
Other City Hotels
of continuous MICE events during the
year. The MICE (Meetings, Incentives,
Conferences and Exhibitions) room nights
dropped by 25 per cent industry-wide,
given that the only major MICE event
scheduled was the CHOGM summit as
opposed to the World T20 and the SLPL
championships that took place in 2012.
The crew segment also fell by 18 per cent
in 2013. The steep decline in both these
markets largely overshadowed the 8 per
cent growth in the corporate segment
and the 9 per cent growth in the leisure
segment during the year. Increases in
electricity tariffs, imposition of a cess on
certain imported food items, followed by
the decrease in interest rates for short
term investments had an adverse impact
on the bottom line of all city hotels during
2013. Meanwhile, competition among
city hotels in Colombo also continued to
intensify, with new properties emerging in
the market alongside a growing volume of
upscale restaurants and bars opening up
across Colombo. Amidst this increasingly
competitive environment another notable
trend observed during the year was the
rapid growth in the number of online
reservations. Undoubtedly a positive
influence on the entire hospitality industry,
32
Market Share
Despite the slow growth witnessed in the
sector, the “Cinnamon” brand continued
to retain its market leadership among city
hotels. Symbolising the top-end of the city
hotel market, the brand holds a market
share of 51 per cent among the Colombo
city hotels, well above its fair share of
38.7%. Capitalising on existing brand
value, a highly focused brand building
agenda was deployed to further enrich
and strengthen the “Cinnamon” brand
identity.
Group Revenue and Profitability
The Group revenue increased by 5 per
cent year-on-year from Rs. 7.89 billion
in 2012/13, to Rs. 8.26 billion during the
current year. Notably, the upward trend
in Group revenue seen since 2008/09
showed signs of tapering off with effect
from 2011/12 as all apartment sales at
the Emperor residencies were concluded
by the end of that year. Consequently, in
the absence of apartment sales, Group
revenue registered a decline in 2012/13,
but continued to show encouraging signs
of an uptake in the year under review.
Although the Property Division was a
major contributor to the Group revenue in
the past, the completion of all apartment
sales by end 2012 meant the division
has since relied mainly on the rent
income earned from the Crescat mall.
The Group hotels are now the core
contributors to the Group revenue, with
only a marginal contribution coming
from the Property Division. Of the total
group revenue, the Cinnamon Grand
Colombo accounted for 59 per cent,
while a further 36 per cent came from the
Cinnamon Lakeside Colombo. In the hotel
segments, cumulative Room Revenue
and F&B Revenue at both properties have
demonstrated good results, denoted by a
steady year-on-year increase for the past
few years. This is indeed a commendable
achievement, given the high degree
of market competition and challenging
industry landscape experienced in the
recent past.
The electricity tariff hike in early 2013, on
the back of consumption resulting from
expanding business volumes, continued
to be a major concern for the Group. In the
face of escalating energy bills, a stringent
group-wide energy management policy
has been initiated to control usage and
contain costs within acceptable levels.
Meanwhile, as the group-wide, prudent
cost management strategies implemented
during the year began to materialise, an
overall reduction was seen in all other cost
formats across all group entities. Group
expenses were increased only by 7 per
cent compared to the last year. Cost of
sales which represents 55 per cent of the
total group expenses grew by 5 per cent.
In the meantime administration expenses
which were 30 per cent of the total group
expenses grew by 7 per cent compared
to the last year.
The Group Net Profit after Tax was Rs.
2.81 billion for the year, compared to the
Rs. 3.09 billion recorded in the preceding
year. It has declined by 8 per cent
year-onyear, largely due to last year’s
profits being boosted by the change in
fair value of the investment property at
Cinnamon Lakeside by Rs. 288.7 million.
Consequently, Earnings Per Share also
declined marginally from Rs. 5.63 in
the previous year to Rs. 5.42 for the
year under review. The commitment to
deliver consistent value to shareholders
Growth of Business Segments
Room Nights
%
450,000
15
400,000
10
350,000
5
-15
100,000
-20
50,000
-25
0
-30
Total
-10
150,000
Crew
200,000
MICE
-5
Leisure
0
250,000
Corporate
300,000
2012/132013/14
% Change
Group Revenue & Profitability
Rs. Mn
9,000
8,000
7,000
6,000
5,000
4,000
has prompted the group to maintain
the Dividend per Share on par with the
previous year.
Being a five star city hotel with international
standards, Cinnamon Grand has always
been designated as the preferred
destination in Colombo for the global
traveller. Consisting of 501 luxury rooms,
Cinnamon Grand’s average occupancy
levels reached 76 per cent for the year
under review, with February 2014 setting
an all-time occupancy record of 88 per
cent. Strengthened by the 4 per cent
year-on-year increase in overall occupancy
levels, Cinnamon Grand managed to
increase its share of the city hotel market,
to end the year with a 33 per cent market
share. It is an achievement, given the
intensity of market competition that
prevailed throughout the year. Keenly
aware that customer satisfaction remains
a key driver of success, the spotlight for
2013 was to improve performance in every
possible area to provide a superior service
to customers. Gauging the pulse of the
customer, via customer feedback received
from online booking sites, a customised
strategic marketing and branding blueprint
was formulated to feature Cinnamon
Grand’s own unique selling proposition.
3,000
2,000
1,000
0
2010
2011
2012
2013
Revenue
Profit After Tax
33
2014
Cinnamon Grand’s key focus in the latter
half of the year was the Commonwealth
Heads of Government Meeting (CHOGM)
held in November 2013, for which the
property was the chosen venue to host
the Business Forum for the summit. A
series of strategies were employed to
further enhance facilities in preparation for
the prestigious event, particularly given
the large foreign contingent expected to
attend the event, with the hotel gearing
up in readiness to provide exclusive
accommodation, banqueting and dinning
facilities for summit participants and State
VIPs.
Cinnamon Grand's revenue increased
by 6 per cent year-on-year from Rs.4.62
billion in 2012/13, to Rs.4.89 billion during
the current year. Cinnamon Grand’s Profit
after tax for the year was Rs. 2 billion
which grew by 2% compared to the
preceding year.
The overall ARR for the year remained
more or less the same, with only a
marginal increase over the previous year
due to competitive pressure. Revenue
per available room (RevPAR) also saw a
significant upward shift from Rs. 13,454
in 2012/13 to Rs. 14,163 in the year under
review. Cinnamon Grand successfully
grew room revenue from the previous year,
demonstrating a 5 per cent growth from
Rs. 2.46 billion in the preceding year, to
Rs.2.58 billion in the year under review.
Despite Colombo’s restaurant market
being inundated with new restaurants
and bars, customers have continued to
patronise the Cinnamon Grand’s iconic
restaurant offerings. In the face of stiff
competition, steps were taken to improve
the versatility of all F&B outlets vis-à-vis
effective management and promotion of
the unique restaurant brands. Moreover,
menu selections were revamped,
introducing diverse international and
fusion cuisine together with a wider range
of gastronomic delights to appeal to a
broader customer demographic. Due in
large part to these timely efforts, restaurant
revenue grew year-on-year by 7 per cent
from Rs. 1.15 billion in the previous year to
Rs. 1.23 billion as at the end of the current
year.
Banquet facilities at Cinnamon Grand
continued to be the most sought after in
Colombo with the hotel being designated
as the premium wedding venue in
Colombo, notwithstanding the multitude
of new locations across the city. While
Group Expenses
Group Revenue Composition
%
Rs. Mn
60
4,500
4,000
50
3,500
3,000
40
2,500
30
2,000
20
1,500
1,000
10
500
0
0
Cinnamon
Grand
Cinnamon
Lakeside
2010
Group
Room Revenue Cost of Sales
F&B Revenue
Cinnamon Grand Profitability
Rs. Mn
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2012
2013
Total Revenue
Profit After Tax
Apartment Sales
2013
Rental Income 2014
Other
2014
building on existing brand value, in 2013
the hotel focused on addressing key
market gaps in a bid to manage costs and
tactically maximise revenue of the banquet
function.
structure which was increased by 8 per
cent compared to the previous year.
Administrative expenses were 30 per cent
of the total expenses which showed a
year-on-year increase of 9 per cent.
These efforts proved to be a tremendous
success with banquet revenue
demonstrating admirable year-on-year
increase of 10 per cent from Rs. 771
million in the previous year to Rs. 848
million for the year under review.
Meanwhile, continuous improvement in
managing major costs was also a key
focus area during the year. Continuous
improvements on energy management
practices and procedures were also
enacted in order to trigger suitable long
term changes to the business model.
These efforts proved to be successful in
reducing the pace of incremental costs.
Moreover cash flow management and
effective working capital control initiatives
helped the company to realise 21 per cent
increase in interest income for the year
under review.
Cinnamon Grand was the host hotel for
a number of international conferences
and workshops during the year including
the 06th South Asia Economic Summit,
JCB India Annual Dealer Conference,
Commonwealth Business Forum, World
Bank Financing Agriculture Forum and the
Asian Paints Annual Dealer Conference.
Total expenses of Cinnamon Grand
grew by 10 per cent compared to the
last year. Cost of sales represented 55
per cent of the Cinnamon Grand’s cost
34
2012
Administrative
Expenses
Other Operating
Expenses
Distribution
Expenses
2010 2011
2011
Maximising the earnings potential of
employees through the payment of
above-average service charge, Cinnamon
Grand continued to retain its position as
an employer of choice in the industry.
Recording the highest ever service charge
Cinnamon Grand Room Revenue
Cinnamon Grand F&B Revenue
Cinnamon Grand Occupancy
RS. Mn
Rs. Mn
%
3,000
2,500
78
2,000
74
1,500
70
1,000
66
500
62
0
58
2,500
2,000
1,500
1,000
500
0
2010
2011
2012
2013
2014
in the history of the hotel in December
2013, Cinnamon Grand paid out Rs.
45,113 per employee, which was the
highest paid among Colombo city hotels
during that month. Moreover, during
2013/14, the annual average service
charge per employee was Rs. 35,195, a 4
per cent year-on-year increase. Even more
significantly, this average has grown by a
phenomenal 86 per cent in past five years.
Cinnamon Lakeside continued to be
ranked among the top city hotels in
Colombo. Recording occupancy levels
in excess of the city average, Cinnamon
Lakeside’s occupancy levels for the
year stood at 61 per cent, while the
average room rate remained strong at
US dollars 138. Room revenue for the
year was Rs. 1,399 million, a 3 per cent
increase compared to the preceding year.
Contribution from Food and Beverage also
saw a 2 per cent increase to reach Rs.
1,265 million.
Net revenue for the year was Rs. 2,939
million, up 3 per cent from Rs. 2,840
million recorded in the previous year.
Denoted by a tight cost management
35
2010
2011
2012
2013
2014
programme instituted at all levels of the
business, Cinnamon Lakeside was able
to restrain annual operational costs to
a large extent with only a 7 per cent
overall increase in costs due mainly to the
increase in electricity tariffs and also the
cess imposed on imported food items.
Consequently, Cinnamon Lakeside was
able to record a sizeable operational profit
of Rs. 816 million for the year. However,
as there was no property revaluation gain
in this financial year as was seen in the
previous year, the operating profit fell short
of the figure recorded in the previous
financial year by 30 per cent.
Property Division
Being the only upscale shopping center
in Sri Lanka, the Crescat Boulevard
Mall continued to dominate the retail
shopping arena in Colombo. With an even
occupancy level of 99 per cent throughout
the year, the mall continued to uphold
international standards of quality and
service. Total income for the year, inclusive
of service charge stood at Rs. 288 million,
while net rent income recorded for the
year was Rs. 197 million, with healthy
contributions coming from the car park
and promotional events.
2010
2011
2012
2013
2014
Future Challenges and Opportunities
With the medium term global economic
outlook signalling a definite path towards
revival, global growth is expected to
exceed 3.7 per cent in 2014 and 3.9 per
cent in 2015. The US economy too is
expected to expand at a similar pace, and
the ending of the protracted recession in
the Euro Zone, GDP growth for the region
as a whole is estimated to reach a positive
aggregate in 2014 itself. Meanwhile,
emerging markets and developing
economies are also expected to grow
steadily for the next two years; with
China’s growth quotient projected towards
a more moderate format. Economic
activity in Sri Lanka too is expected to
pick up in the forthcoming year, with
a further acceleration projected in the
medium term. Steadied by 7.3 per cent
growth in 2013, the economy is expected
to grow by 7.8 per cent in 2014, before
moving to a higher growth trajectory in
excess of over 8 per cent in the medium
term. With the favourable developments
in the economy, per capita income is
expected to surpass US dollars 4,000
in 2015. Moreover, further relaxation of
exchange control regulations are expected
to bolster investments over the medium
Interest Rates (Per cent Per Annum at Year End)
Cinnamon Grand ARR
%
Rs.
20.00
20,000
17.50
16,000
15.00
12.50
12,000
10.00
8,000
7.50
5.00
4,000
2.50
0
0.00
Repurchase
Rate (Overnight)
Treasury Bill
Yields (91 Days)
Commercial
Banks’ (AWFDR)
2010
2011
2012
2013
2014
200820092010201120122013
Source: Central Bank of Sri Lanka Annual Report 2013
Cinnamon Grand Interest Income
Rs. Mn.
200
180
160
140
120
100
80
60
40
20
0
2010
36
2011
2012
2013
2014
term while improvements in infrastructure
facilities will certainly improve the ease
of doing business in the years ahead.
The Government’s strategy to leverage
on the country’s strategic location and
stable geopolitical presence to develop
Sri Lanka as a commercial hub would
underpin the service sector growth in the
next few years, while the tourism sector
would undoubtedly be a key enabler
of this growth. Despite rapid growth in
the post-war era, Sri Lanka’s tourism
industry continues to face a great many
challenges, key among them being the
need for trained staff, improved service
standards, increased room capacity and
aggressive promotional efforts to tap into
non-traditional markets. At present, as the
lack of adequately trained staff continues
to curtail the prospects of the industry,
the urgent need to establish new training
schools is thrown into sharp focus, while
overseas training exposure also remains
critical in augmenting the local service
platform and conforming to international
standards. In terms of increased capacity,
the ongoing mega projects in the hotel
sector are expected to raise the capacity
in the industry to meet requirements of
the targeted tourist arrivals, while timely
completion of these projects would
certainly boost the prospects of the
industry in the years ahead.
From a promotional angle, it is imperative
that the country capitalises on the rising
per capita income of the middle class
populace in India and China to promote
Sri Lanka as a potential regional travel
destination in these markets.
Even though the industry possesses
a strong potential within the country,
continued growth is also heavily
dependent on the ability to cater to the
emerging trends in the tourism industry.
By harnessing the rich natural and cultural
diversity of the country, Sri Lanka could be
further promoted as a niche destination for
ecotourism, thereby encouraging greater
local participation and favouring a more
sustainable business model for the entire
industry as opposed to the traditional
mass tourism model of the past. Thus, a
clear, market-driven strategy would be the
catalyst in driving the growth of the local
tourism industry to achieve its target of 2.5
million tourist arrivals by 2016.
For our part, we would continue to
consolidate both the hotels business as
well as the property division and leverage
on our brand value to further strengthen all
aspects of these businesses in the years
ahead. In the hotel arm, the corporate
segment would remain the key channel to
pursue revenue growth and realising this
potential would compel the company to
fully harness all online booking platforms
available in the market.
37
Moreover, online media would also play
a pivotal role in helping us outline our
strategic customer focus in the years
ahead. By revisiting our parameters in
this manner, we remain committed to
enrich quality of our service standards.
Underscored by the uniqueness of the
Cinnamon brand promise, we will pursue
a highly customer-centric agenda that
will deliver world-class indulgence for
all our patrons. We will thus endeavour
to differentiate ourselves from our
competitors and stay a step ahead, while
making timely investments to strengthen
our brand presence and fulfill the
aspirations of all stakeholders, in the years
ahead.
Cinnamon Grand Average
Service Charge
Rs.
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2010
2011
2012
2013
2014
Board of Directors
Susantha Ratnayake
Chairman
Mr. Ratnayake was appointed as a
Director of Asian Hotels and Properties
PLC in September 2003 and Chairman
and CEO of John Keells Holdings PLC
in January 2006 and has served on the
JKH Board since 1992/93.
He is the Chairman of Ceylon Tobacco
Company PLC, Vice Chairman of the
Employers Federation of Ceylon and
serves as a member of several clusters
of the National Council of Economic
Development. A past Chairman of the
Sri Lanka Tea Board and immediate
past Chairman of the Ceylon Chamber
of Commerce, he also serves on the
Board of the national carrier SriLankan
Airlines.
Ajit Gunewardene
Director
Mr. Ajit Gunewardene is the Deputy
Chairman of John Keells Holdings PLC
and has been a member of the Board
for over 20 years. He is a Director of
many companies in the John Keells
Group and is the Chairman of Union
Assurance PLC. He is a member of
the Board of SLINTEC, a company
established for the development of
nanotechnology in Sri Lanka under the
auspices of the Ministry of Science
and Technology. He is also an Advisory
Committee Member of COSTI, the
Coordinating Secretariat for Science
Technology and Innovation under the
purview of the Minister (Senior) of
Scientific Affairs. He has also served
as the Chairman of the Colombo Stock
Exchange. Mr. Gunewardene has a
Degree in Economics and brings over
31 years of management experience.
38
Ronnie Peiris
Director
Mr. Peiris was appointed as a Director
of Asian Hotels and Properties PLC in
2003. As the Group Finance Director
of John Keells Holdings PLC, Mr.
Peiris has overall responsibility for the
Group’s Finance and Accounting,
Taxation, Corporate Finance, Treasury,
Group Initiatives and the Information
Technology functions. He is also a
Director of several companies in the
John Keells Group. He was previously
the Managing Director of Anglo
American Corporation (Central Africa)
Limited in Zambia.
He has over 40 years of finance and
general management experience in Sri
Lanka and abroad. He is a Fellow of
the Chartered Institute of Management
Accountants, UK, Association of
Chartered Certified Accountants,
UK, and the Society of Certified
Management Accountants, Sri Lanka
and holds an MBA from the University
of Cape Town, South Africa. He is
a member of the Committee of the
Ceylon Chamber of Commerce, and
serves on its Economic, Fiscal and
Policy Planning Sub Committee.
Cholmondeley Pinto
Director
Mr. Pinto was appointed as a NonExecutive Director and as the Chairman
of the Board Audit Committee of Asian
Hotels and Properties PLC in July
2011. He is a Fellow of the Institute
of Chartered Accountants of Sri
Lanka with 40 years of post-qualifying
experience in the profession and in
industry. Before returning to Sri Lanka
in 2006 after spell of 32 years abroad,
he worked for SAB Miller PLC for 23
years, the world’s second largest
multinational breweries group, holding
CFO positions in its listed subsidiaries
in several countries. He currently works
as a beverage industry consultant
and is semi-retired. He is also a NonExecutive Director of Trans Asia Hotels
PLC.
Sanjiva Senanayake
Director
Mr. Senanayake was appointed to the
Board of Asian Hotels and Properties PLC
as an Independent Director in September
2009. He has served in several key
positions in national and international
organisations.
Shirani Jayasekara
Director
Mrs. Jayasekara was appointed
as a Director in September 2009.
She has over 30 years experience
combining Finance, IT, Audit and Risk
Management in Sri Lanka, Zambia and
Bahrain.
Mr. Senanayake joined the International
Finance Corp (IFC), the World Bank’s
private sector financing arm in June 1998
and held the position of Country Manager
for Sri Lanka and Maldives until April 2006
when he was appointed as the Head of
Financial Markets Investments – West
Africa. He held this position until his
retirement in April 2009. Prior to joining
IFC he served as the Assistant General
Manager, Treasury and Investment
Banking at National Development Bank of
Sri Lanka and as Consultant, Treasury and
Business Development at Commercial
Bank of Ceylon.
She has been selected to serve on
various committees of the Institute of
Chartered Accountants of Sri Lanka
such as the Annual Report Awards
Committee (Sustainability Reporting)
and Audit Committee of the Institute.
She is also an external Independent
Director at LB Finance. She is a
Fellow of the Institute of Chartered
Accountants of Sri Lanka and a
Fellow of the Chartered Institute of
Management Accountants UK.
Prior to that he held several key
positions in the Citibank Group in Sri
Lanka and overseas. Mr. Senanayake
holds a BSc degree in Electronic and
Electrical Engineering from King’s
College, University of London and an
MSc in Communication Engineering
from the Imperial College of Science
and Technology, University of London.
He is also a Director of Sampath Bank
PLC, Hemas Power PLC, and Hemas
Pharmaceuticals Ltd.
39
Rohan Karunarajah
Director
Mr. Karunarajah joined the John Keells
Group in 2003 as General Manager
for The Colombo Plaza, and was
appointed a Director in March 2005.
A career hotelier counting over three
decades in the international hospitality
industry, he currently holds the position
of General Manager Cinnamon Grand
and Senior Vice President John Keells
Holdings PLC; having served as
General Manager for the Bristol Marriott
and the Marriott Marble Arch, London.
He read for his Masters in Hospitality
and Business Studies from the Thames
Valley University, London.
Suresh Rajendra
Director
Mr. Suresh Rajendra is the President
Property Group of John Keells
Holdings PLC. He also serves as a
Director in many companies of the
John Keells Group. He has over
21 years of experience in the fields
of finance, travel and tourism and
business development acquired
both in Sri Lanka and overseas. Prior
to joining the Group, he was the
Head of Commercial and Business
Development for NRMA Motoring and
Services in Sydney, Australia and
Director/General Manager of Aitken
Spence Hotel Managements (Pvt) Ltd,
Sri Lanka. Suresh is a Fellow of the
Chartered Institute of Management
Accountants, UK.
Annual report of the Board of Directors
The Board of Directors take pleasure in
presenting the Annual Report together
with the Audited Financial Statements for
the year ended 31st March 2014 to be
presented at the 20th Annual General
Meeting of the Company.
Principal Activities
The Company is engaged in Hoteliering
and Property Development/Management.
Trans Asia Hotels PLC (Cinnamon
Lakeside) is a subsidiary of the Company
and its principal activity is Hoteliering.
There has been no material change in
the activities of the Company or of the
subsidiary during the period under review.
Review of Business and Future
Developments
The financial and operational performance,
during the year ended 31st March 2014
and future business development of the
Company and Group is provided in the
Chairman’s Statement, the Management
Discussion and Analysis in this Annual
Report. These reports, which form an
integral part of the Directors’ Report
together with the Audited Financial
Statements, reflect the state of affairs of
the Company and Group for the financial
year 2013/2014.
Financial Statements and Auditors’
Report
The Financial Statements, duly signed by
the Directors, is provided from pages 144
to 185 and the Auditors’ Report on the
Financial Statements is provided on page
143 of this Annual Report.
Segment Reporting
Segment-wise contribution to Group
revenue, results, assets and liabilities
are provided in Note 37 to the Financial
Statements.
40
Revenue
Revenue generated by the Company amounted to Rs. 5,317 million (Rs. 5,051 million in
2013 ), whilst Group revenue amounted to Rs. 8,256 million (Rs. 7,891 million in 2013).
Contribution to Group revenue, from the different business segments are provided in
Note 37 to the Financial Statements.
Results and Appropriations
The Profit After Tax of the Company was Rs. 2,379 million (Rs. 2,292 million in 2013)
whilst the Group profit attributable to the equity holders of the Parent Company for the
year was Rs. 2,398 million (Rs. 2,494 million in 2013). A detailed description of the Group
results and appropriations are given below.
2013/14
2012/13
Rs. ‘000
Rs.‘000
3,046,463
3,336,251
(227,952)
(238,865)
2,818,511
3,097,386
(420,565)
(603,090)
Leaving a Profit Available to the Group of:
2,397,946
2,494,296
The Brought Forward Profit is:
Net Profit for the year after providing for expenses
including depreciation on Property, Plant and
Equipment was:
From which Income Tax has been deducted of:
Leaving thereafter a Net Profit After Tax of:
The amount attributable to Minority Interest which has
been deducted is:
7,242,060
6,490,690
Transferred to Revenue Reserve of:
15,407
28,175
Other Comprehensive Income:
(4,242)
-
(1,328,326)
(1,328,326)
(442,775)
(442,775)
7,880,070
7,242,060
Final Dividend paid:
Interim Dividend paid:
Leaving an un-appropriated balance to be Carried
Forward of:
Accounting Policies
The Financial Statements which comprise the Income Statement, Statement of
Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity
and the Statement of Cash Flow, together with the accounting policies and notes ('The
Financial Statements') have been prepared in accordance with Sri Lanka Accounting
Standards (SLFRS/LKAS) as issued by the Institute of Chartered Accountants of Sri
Lanka (ICASL) and the requirement of the Companies Act No. 7 of 2007. The changes
to accounting policies have been applied consistently to all financial periods presented in
these Financial Statements, unless otherwise indicated. The accounting policies adopted
in preparation of the Financial Statements are given from page 150 to 185 of this Report.
Dividends
A Final Dividend of Rs. 3/- per share for the financial year ended 31st March 2013, was
paid during the current financial year on 14th June 2013 to those shareholders in the
register as of 4th June 2013, resulting in a total cash pay out amounting to Rs. 1,328
million.
An Interim Dividend of Rs. 1/- per share
for the year ended 31st March 2014,
amounting to Rs. 442 million was paid on
10th January 2014.
The Board of Directors, has declared a
Final Dividend of Rs. 3/- per share for the
financial year ended 31st March 2014. The
Final Dividend will be paid on 18th June
2014 to those shareholders on the register
as at 6th June 2014.
As required by Section 56 (2) of the
Companies Act No. 7 of 2007, the
Board of Directors has confirmed that
the Company satisfies the Solvency Test
in accordance with Section 57 of the
Companies Act No. 7 of 2007 and has
obtained a certificate from the Auditors,
prior to declaring the above dividends.
Property, Plant and Equipment
The book value of Property, Plant and
Equipment as at the balance sheet date
amounted to Rs. 15,053 million (2013 –
Rs. 15,029 million) and Rs. 18,511 million
( 2013 – Rs.18,309 million) for the
Company and Group respectively.
Capital expenditure for the Company and
Group amounted to Rs. 301 million (2013
– Rs. 283 million ) and Rs. 673 million
(2013 – Rs. 489 million) respectively.
Total Freehold Land available − Asian
Hotels and Properties PLC A8 . R00.
P05.08 Total Leasehold Land available
− Trans Asia Hotels PLC A05. R02. P34.28.
Details of Land and Buildings with net
book values including details of Property,
Plant and Equipment of the Group and
their movements are given in Note 14 to
the Financial Statements on page 161.
Market Value of Properties
All buildings owned by the Company
were last revalued as at 31st March
2013. Valuation was carried out by M/s
41
P.B. Kalugalagedara and Associates, a
professional valuer.
All properties classified as investment
property under the Company was
revalued as at 31st March 2014 in
accordance with the requirements of
LKAS 40. This valuation too was carried
out by M/s P.B. Kalugalagedara and
Associates.
M/s P.B. Kalugalagedara and Associates
have also confirmed that the current
value of the building as well as investment
property of the Company is at market
value.
Investment Properties
In accordance with SLAS 40-Investment
Property (2005), the net book value of
properties held to earn rental income, and
properties held for capital appreciation
have been classified as Investment
Properties. The details of Investment
Properties are explained in Note 16 to the
Financial Statements on page 164.
Investment in Subsidiary
Company
No. of
Shares
%
Holding
Trans Asia
Hotels PLC
(Quoted)
86,823,028
43.41
Stated Capital
The Stated Capital of the Company as
at 31st March 2014 is Rs. 3,345 million
(2013 – Rs.3,345 million) comprising of
442,775,300 Ordinary Shares.
Share Information
The market value of an Ordinary Share of
the Company as at 31st March 2014 was
Rs. 58.80 (31st March 2013 – Rs. 70.00).
The distribution and composition of
shareholders and the information relating
to earnings, dividend, net assets, and
market value per share is given in the
Share Information and Five (5) Year
Financial Review section of the Annual
Report.
The Company has made every endeavor
to ensure the equitable treatment of all
shareholders and has adopted adequate
measures to prevent information
asymmetry.
Major Shareholders
Details of the twenty largest shareholders
of the Company and the percentage
shareholding held by the public are
disclosed in the Share Information section
of the Annual Report from page 187 and
188.
Reserves
Total reserves as at 31st March 2014 for
the Company and Group amounted to
Rs. 17,003 million (2013 – Rs. 16,384
million) and Rs. 18,993 million (2013 – Rs.
18,352 million), respectively.
The movements and composition of the
Capital Reserves and Revenue Reserves
during the year are disclosed in the
Statement of Changes in Equity.
Directors
The Board of Directors of the Company
as at 31st March 2014 and brief profiles
of each Director are given in the Board of
Directors section of the Annual Report.
The Directors of the Company who held
office during the year under review are set
out below.
Mr. S.C. Ratnayake - Chairman
Mr. A.D. Gunewardene
Mr. J.R.F. Peiris
Mr. R.J. Karunarajah
Mr. S. Rajendra
Mr. C.J.L. Pinto
Mr. S.K.G. Senanayake
Mrs. S.A. Jayasekara
Annual report of the Board of Directors contd.
Mr. R.J. Karunarajah and Mr. Rajendra
retire by rotation in terms of Article 84
of the Articles of Association of the
Company and being eligible for reelection are recommended by the Board
for re-election. Brief profiles of Mr. R.J.
Karunarajah and Mr. Rajendra are found
on page 39.
of the Parent Company, John Keells
Holdings PLC (JKH), functions as the
Human Resources and Compensation
Committee of the Company.
The Directors of Trans Asia Hotels PLC
[Subsidiary] who held office during the
year under review are set out below:
Mr. E.F.G. Amerasinghe – Chairman
Dr. I. Coomaraswamy
Mr. A.R. Gunasekara
Mr. M.A. Omar*
Mr. N.A. Fonseka**
Mrs. S. Tiruchelvam***
Mr. S.C. Ratnayake - Chairman
Mr. J.R.F. Peiris
Mr. N.L. Gooneratne
Mr. C.J.L. Pinto
Mr. E.H. Wijenaike
Mrs. J.C. Ponniah*
*
Appointed to the Board with effect
from 2nd October 2013.
Responsibility of the Board
Details of responsibilities of the Board and
the manner in which those responsibilities
were discharged during the year are
disclosed in the Corporate Governance
section of the Annual Report.
Board Committees
Board Audit Committee
The following members serve on the
Board Audit Committee
Mr. C.J.L. Pinto - Chairman
The Report of the Audit Committee is
given on page 140 of this Report.
Committee
As permitted by the listing rules of the
Colombo Stock Exchange, the Human
Resources and Compensation Committee
42
The following members serve on the
Committee:
*
Appointed with effect from 28th May
2013.
** Appointed with effect from 7th
November 2013.
*** Resigned with effect from 9th
September 2013.
The Report of the Human Resources
and Compensation Committee and
the remuneration policy is given in the
Corporate Governance section of the
Annual Report.
** Resigned with effect from 9th
September 2013.
The Report of the Nominations Committee
is given in the Corporate Governance
section of the Annual Report.
Interests Register
The Company has maintained an
Interests Register as contemplated by
the Companies Act No. 7 of 2007. In
compliance with the requirements of the
Companies Act No. 7 of 2007, this Annual
Report contains particulars of entries
made in the Interests Register as well as
the particulars of the entries made in the
Interests Register of the Subsidiary which
is a Public Limited Company.
Directors' Interests in Contracts
The Directors of the Company have
made general declarations as required by
Section 192 (2) of the Companies Act No.
7 of 2007 and no additional interests have
been disclosed by any Director.
Nominations Committee
The Nomination Committee of the Parent
Company John Keells Holdings PLC (JKH)
functions as the Nomination Committee of
the Company.
Directors' Remuneration
Directors’ remuneration is established
within a framework approved by the
Committee. The Directors are of the
opinion that the framework assures
appropriateness of remuneration and
fairness for the Company.
The Nominations Committee comprises
four Independent Directors and one Non
Independent Director as at 31st March
2014:
Details of the remuneration and other
benefits received by the Directors of the
Company and the Group are set out in
Note 10 of the Financial Statements.
Mr. T. Das – Chairman
Mr. S.C. Ratnayake (Non-Independent)
Mr. M.A. Omar*
Mr. E.F.G. Amerasinghe*
Mr. D.A. Cabraal *
Mrs. S. Tiruchelvam**
Indemnities and Remuneration
The Board approved the payment of
remuneration to the Executive Directors
of the Company, namely, Mr. R.J.
Karunarajah and Mr. S. Rajendra, for the
period 1st April 2013 to 31st March 2014
comprising:
*
Appointed with effect from 7th
November 2013.
An
increment from 1st July 2013
based on the individual performance
rating obtained by the Executive
Directors in terms of the Performance
Management System of the John
Keells Group; and
Short term variable incentive based on
individual performance, organisation
performance and role responsibility
based on the results of the financial
year 2012/2013, paid in July 2013.
The Remuneration Committee of John
Keells Holdings PLC (being the holding
company of Asian Hotels and Properties
PLC) has not recommended an increment
in fees to the Non-Executive Directors
of the Company. The fees payable to
Non-Executive nominees of John Keells
Holdings PLC are paid to the Company
and not to individual Directors.
Particulars of Entries in the Interests
Register of the Subsidiary
Trans Asia Hotels PLC.
Indemnities and Remuneration
There have been no changes to the
remuneration of the Directors of Trans Asia
Hotels PLC for the financial year ended
31st March 2014.
Further to the appointment of Mrs. J. C.
Ponniah as a Non-Executive Director of
Trans Asia Hotels PLC with effect from
2nd October 2013, the Board approved
the payment to Mrs. J.C. Ponniah of the
standard Non-Executive fees approved
by the Board for Non-Executive Directors
which fees are commensurate with the
market complexities of the Company.
Directors’ Shareholdings
The shares held by Directors’ and their
spouses in the Company as at 31st March
2014 are as follows;
43
Director
Mr. S.C. Ratnayake
Shareholding as at
31.03.2014
Shareholding as at
31.03.2013
20,000
20,000
NIL
NIL
Mr. J.R.F. Peiris
NIL
NIL
200
200
Mr. S. Rajendra
NIL
NIL
NIL
NIL
Mr. C.J.L. Pinto
(Joint account with Mrs. M.R.C. Pinto)
NIL
NIL
7,800
7,800
Directors’ Declarations
The Directors declare that;
a) The Company has complied with all applicable laws and regulations in conducting its
business.
b) They have declared all material interests in contracts involving the Company and
refrained from voting on matters in which they were materially interested.
c) The Company has made all endeavours to ensure the equitable treatment of
shareholders.
d) The business is a going concern with supporting assumptions or qualification as
necessary.
e) A review of internal controls covering financial, operational and compliance controls
and risk management have been conducted and that the Directors have obtained
reasonable assurances of their effectiveness and successful adherence herewith.
f) The Company being listed on the Colombo Stock Exchange (CSE), is compliant with
the rules on Corporate Governance under the Listing Rules of the CSE with regard to
the composition of the Board and its Sub-Committees.
g) The Company is in compliance with the Code of Best Practice on Corporate
Governance jointly issued by the Securities and Exchange Commission of Sri Lanka
(SEC) and the Institute of Chartered Accountants of Sri Lanka (ICASL).
A comprehensive report on Corporate Governance practices and principles with respect
to the management and operations of the Company are set out from pages 50 to 73 of
this Report.
Annual report of the Board of Directors contd.
Sustainability
The Company is conscious of the need to
preserve the environment and its natural
resources and has taken specific steps,
particularly in ensuring the conservation
of its natural resources and environment
as well as addressing material issues
highlighted by its stakeholders. Every
endeavour has been made to minimise
adverse effects on the environment to
ensure sustainable continuity of natural
resources. The Company’s sustainable
practices are detailed from pages 76 to
137.
Employment
The Company has an equal opportunity
policy in respect of employment and
these principles are enshrined in specific
selection, training, development and
promotion policies, ensuring that all
decisions are based on merit. The
Company, in line with the Group policy,
practices equality of opportunity for all
employees irrespective of ethnic origin,
religion, political opinion, gender, marital
status or physical disability.
Details of the Group’s human resource
initiatives are detailed in the employees’
section of the Sustainability Report.
The number of persons employed by the
Company and Group as at 31st March
2014 was 1,234 (1,225 in 2013) and 2,089
(2,067 in 2013), respectively.
There have been no material issues
pertaining to employees and industrial
relations of the Company and the Group
during the Financial Year.
Supplier Policy
The Company, in line with the Group’s
policies, applies an overall policy of
agreeing and clearly communicating terms
of payment as part of the commercial
44
agreements negotiated with suppliers and
endeavours to pay for all items properly
charged in accordance with these agreed
terms. As at 31st March 2014, the trade
and other payables of the Company and
Group amounted to Rs. 514 million (2013 –
Rs. 466 million) and Rs. 736 million (2013
– Rs. 654 million), respectively.
Environmental Protection
The Company is in compliance with the
relevant environmental laws, regulations
and endeavours to comply with best
practices applicable in the country. A
summary of selected Group activities
in the above area is contained in the
Sustainability Report. The Company has
not engaged in any activity that is harmful
to the environment.
Statutory Payments
The Directors confirm that to the best
of their knowledge, all taxes, duties and
levies payable by the Company and
its Subsidiary, all contributions, levies
and taxes payable on behalf of, and in
respect of the employees of the Company
and its Subsidiary, and all other known
statutory dues that were due and payable
by the Company and its Subsidiary as
at the Balance Sheet date have been
paid or, where relevant provided for,
except as specified in Note 38 to the
Financial Statements, covering Contingent
Liabilities.
Risk Management
The Board confirms that there is an
ongoing process of identifying, evaluating
and managing any significant risks faced
by the Company, where annual risk
reviews are carried out by the Enterprise
Risk Management Division and the risks
are further reviewed each quarter by each
business unit. The headline risks are
presented to the Board Audit Committee
for review by the business unit.
The details of the Risk Report and Risk
Management Process are set out from
pages 46 to 49 of this Report.
Internal Control
The Board, through the involvement of
the Group Business Process Review
(Group BPR) Division, takes steps to gain
assurance on the effectiveness of control
systems in place. The Audit Committee
receives regular reports on the adequacy
and effectiveness of internal controls in the
Company. These include compliance with
laws, regulations and established policies
and procedures of the Company.
The Head of Group Business Process
Review Division has direct access to the
Chairman of the Audit Committee. Reports
of the outsourced internal auditors are also
reviewed by the Committee on matters
pertaining to the Company.
The Directors acknowledge their
responsibility for the Company’s systems
of internal controls. The statements of
Corporate Governance from pages 50
to 73 sets out in detail the Company’s
system of internal controls.
Related Party Transactions
There were no related party transactions
which exceeded 10 per cent of the equity
or 5 per cent of the total assets required to
be disclosed under the Listing Rules of the
CSE other than as disclosed under Note
34 to the Financial Statements.
Employee Share Option Plan (ESOP)
Employees of the Company receive
remuneration in the form of sharebased payment transactions, whereby
employees render services as
consideration for equity instruments
(equity-settled transactions). The cost of
the employee services received in respect
of the shares or share options granted
is recognised in the Income Statement
over the period that employees provide
services, from the time when the award
is granted up to the vesting date of the
options. The overall cost of the award
is calculated using the number of share
options expected to vest and the fair value
of the options at the date of grant.
The employee remuneration expense
resulting from the Group’s share option
scheme to the employees of Asian Hotels
and Properties PLC is recognised in the
Income Statement of the Company. This
transaction does not result in a cash
outflow to the Company and expense
recognised is met with a corresponding
equity reserve increase, thus having no
impact on the Statement of Financial
Position (SOFP). The fair value of the
options granted is determined by the
Group using an option model and the
relevant details are communicated by
the Group to all applicable subsidiary
Companies.
Donations
Total donations made by the Company
during the year amounted to Rs. 13.98
million and donations made by the Group
amounted to Rs. 21.08 million (31st March
2013 – Company Rs. 6.9 million/Group
Rs. 10.9 million).
Events Subsequent to the Balance
Sheet Date
Except for the matters disclosed in Note
40 to the Financial Statements on page
185 there are no material events which
require adjustments or disclosure in the
Financial Statements.
Going Concern
The Board of Directors, after considering
the financial position, operating conditions,
regulatory and other factors, and such
matters required to be addressed in the
Code of Best Practice on Corporate
45
Governance issued jointly by the
Securities and Exchange Commission and
the Institute of Chartered Accountants of
Sri Lanka, have a reasonable expectation
that the Company and its Subsidiary
possess adequate resources to continue
in operation for the foreseeable future.
For this reason, they continue to adopt
the Going Concern basis in preparing the
Auditors
The retiring Auditors Messrs. KPMG,
Chartered Accountants, have expressed
their willingness to continue in office.
The Audit Committee at a meeting held
on 19th May 2014 recommended that
they be re-appointed as Auditors. A
Resolution to re-appoint them as auditors
and authorising the Directors to determine
their remuneration will be proposed at the
Annual General Meeting.
Standards Monitoring Board on 4th June
2014.
Annual General Meeting
The 20th Annual General Meeting of
the Company will be held at the Ceylon
Chamber of Commerce, at No. 50, Navam
Mawatha, Colombo 2, on 27th June 2014
at 11.45am. The Notice of Annual General
Meeting appears on page 191 of the
Annual Report.
This Annual Report is signed for and on
behalf of the Board of Directors by;
Director Director
By Order of the Board
The Independent Auditors’ Report to the
shareholders on the Financial Statements
is given on page 143.
The Audit Committee reviews the
appointment of the Auditor, its
effectiveness, independence and its
relationship with the Company, including
the level of audit and non–audit fees paid
to the Auditor.
Based on the declaration of Messrs
KPMG and as far as the Directors
are aware, the Auditors do not have
any relationship [other than that of an
Auditor] or interest in the Company or its
Subsidiary.
Annual Report
The Board of Directors approved the
Consolidated Financial Statements on
28th May 2014. The appropriate number
of copies of this Report will be submitted
to the Colombo Stock Exchange and to
the Sri Lanka Accounting and Auditing
KEELLS CONSULTANTS (PRIVATE)
LIMITED
Secretaries
Colombo
28th May 2014
risk Management
The Company has recognised the Risk
Management Process as an essential
component of both the investment
management process, ensuring safe and
high quality products as well as in our
approach to maintain sustainable business
operations for all our stakeholders.
Enhancements are continuously made
to the Risk Management framework
throughout 2013/14 based on the
guiding principles of the Enterprise
Risk Management (ERM) process
recommended by the John Keells
Group Sustainability and Enterprise Risk
Management Division. The Enterprise
Risk Management cycle begins during
the second quarter with an annual
risk review by the John Keells Group’s
Enterprise Risk Management division
which assists heads of business units and
their respective Heads of Departments
to comprehensively assess, rate and set
46
mitigation plans for any structural, operational, financial and strategic risks relevant to
each company, based on past information and horizon scanning.
Board
Audit Committee
Risk Grid
Business Impact
Likelihood of Occurrence
Velocity
Insignificant
Hotel/ Property Risk Management Team
Ultra High
In the context of constantly changing
guest preference, a competitive industry
environment and covering local and
global regulatory requirements, Asian
Hotels and Properties PLC, continued
its risk management system during the
year under review. The Risk Management
Process is designed to analyse the
exposure on various risks, by identifying
vulnerability and the probability of
occurrence along with its impact to
the business operation. Through this
process we have developed a better
understanding of key risks, encouraged
and facilitated the sharing of best
practices across the individual Business
Units and reduced the overall cost of
risk by continuously improving our risk
management approaches. Thereafter,
action that should be taken to mitigate the
impact and likelihood of such risks to the
business are discussed at various levels
of the Company and corrective measures
are implemented promptly.
Risk Champions
The Group Management Committee of the Hotel and Property Divisions along with the
Audit Committee work closely with the Board of Directors, who are in turn responsible for:
Establishing core standards for the management, measurement and reporting of risk.
Identifying, assessing, communicating and monitoring risks on a Company wide
basis.
Engaging with senior management on a frequent basis regarding material matters
with respect to risk-taking activities in the businesses and related Risk Management
Processes.
Risk Management Process
The Risk Management Process is carried out in order to identify risk events and rank
each risk by assigning a risk rating. This is assessed by the likelihood of occurrence
[Probability], the level of impact to the Company and the velocity of risk is also a
factor when assessing risks. The Management Committee of each business unit was
apprised of the high level risks and core sustainability risks that emerged during the risk
review process, and risk mitigation action plans were presented for review by the Audit
Committee. Risk reviews are carried out on a quarterly basis to monitor and manage the
status of risks mitigation activities. The process is reviewed by the Group Management
Committee and the Group Executive Committee of John Keells Holdings PLC. The Audit
Committee oversees the process on behalf of the Board.
The risk exposure and profile of the Group did not change significantly during the last
year. A review of the key risks that could materially affect the Asian Hotels and Properties
PLC along with control measures and action plans implemented to mitigate them are set
out on the next page.
Risk Category and Description
Control Measures and Action Plans to Mitigate Risks
Strategic Risks
Business Risk
performance of the Company could be adversely
affected due to intense competition, unfavourable economic
conditions and new entrants.
The
The
Company closely monitors competitors activities and
strategies. This process includes the reviewing of competitors
market share and performance. Where necessary, new
strategies are formulated or existing strategies are revised to
counter the actions of competitors.
Ongoing and timely investments to upgrade properties and
facilities.
Exceeding customer expectations by careful analysis of guest
feedback and tailoring appropriate and prompt responses to
identified issues.
Providing value for money by enhancing services, improving
service delivery and focusing on consistent quality.
Growing web-generated business.
Operational Risks
Commercial Relationship Risk
business units of Asian Hotels and Properties PLC, the
Property Division and the Hotel Division benefits from close
commercial relationships with a number of key customers
and suppliers. The disruption of this can have negative
consequences.
Both
The
Company devotes significant resources to carry out
regular training programmes to upgrade its levels of care in
supporting these relationships.
The Company undertakes regular surveys of customer
satisfaction which are reviewed on a continuous basis.
Human Resource Risk
Company’s Human Resources are the backbone of the
As part of the performance appraisal process carried out
business, holding the Company together. The growth of the
in the Company, a clear vision has been set out on career
Company is heavily dependent on the talents and efforts
development and succession plans, enabling the Company
of the highly skilled individuals that the Company is able to
to retain its employees.
attract and retain. The recruitment and retention of employees Regular training both locally and overseas is carried out in
is a constant challenge.
order to infuse motivation, commitment and empowerment
among the staff.
Recruitment of high calibre staff, effective induction to the
Group's corporate culture, transparency in management
actions and effective communication lines are developed in
the Company’s culture to foster good employee relationships.
Developing a spirit of unity by organising associate gatherings
to celebrate staff birthdays, outings, sports activities, family
get-togethers and religious activities.
The
47
risk Management contd.
Brand Image and Reputation Risk
The Company’s success depends on the continued strength
and recognition of the brand on a local and regional basis.
Although some factors are beyond its control, the group adopts
the following approaches to mitigate this risk:
Regular
The
“Cinnamon” name is primary to its business as well
as to the implementation of its strategy for expanding its
businesses. This will depend largely on the success of its
ability to provide high-quality products and services to all its
clients.
Liquidity and Credit Risk
economic instability, high inflation rates, adverse foreign
currency fluctuations and the global monetary crisis could
affect the Company in recovering the cash from clients of the
hotel and tenants of the mall.
Exposure and losses due to default of settlement by debtors.
The
Interest Rate Risk
in interest rates will lead to a lower interest income as
a result of which, the Company would have an impact on its
Other Income.
Drop
48
Brand Audits of the “Cinnamon” brand are carried
out.
Both the Hotel Division and the Property Division ensure that
they secure the most sought after and qualified staff to hold
high Managerial positions (in the different hierarchies.
Continuous attention is focused on the environment and
health and safety concerns by complying with HACCP and
other quality certifications.
The brand of “Cinnamon” with emphasis on maintaining
Minimum Quality Standards and Standards of Performance
carries out ongoing reviews of guest comments in order to
exceed customer expectations.
Encouraging and nurturing responsible corporate citizenship
through CSR initiatives.
Continuous monitoring and reviewing of online customer
reviews and rating.
Regular
review mechanisms are in place to monitor the
performance of the Company against approved budget
targets to achieve a balance between liquidity and profitability.
The Company actively carries out trade debtor balance
reviews with review meetings held on a consistent and
continuous basis.
Credit policy and stringent controls are in place to mitigate the
impact of default.
The
Company has taken measures to maximise the interest
income with the assistance and guidance of the JKH Group
Treasury Department.
Technology and Data Protection Risk
Failure to keep pace with developments in the technology
sphere could impair our competitive position and operation.
Reservation, property management, material management and
financial information systems were upgraded for greater alignment
with business needs, making it easier to respond to change in
business strategy.
The
IT division of the sector and the John Keells Group
have implemented procedures to safeguard the computer
installations of the Company to ensure continuity of
operations.
Commissioning an audit of all websites by an IT Governance,
Risk and Compliance professional to safeguard against
cyber-attacks.
While the Group’s operations are reliant on Information
Technology stringent security measures, disaster recovery
procedures and business continuity plans are implemented,
there are group-wide measures to ensure the mitigation of
significant information technology risks.
Clearly defined IT policy, which is communicated to all
associates.
Fraud Risk
risk posed by corruption and employees abusing
entrusted power for private gain, as well as misappropriation
of assets, which will also negatively impact the Company’s
reputation.
The
All
major procurement decisions are taken on a collective
basis inclusive of Consultants/Project Managers and the
Management.
Internal auditors are appointed to conduct regular reviews
of the areas which are susceptible to misappropriation and
fraud.
Authority limits and segregation of responsibilities and duties
have been implemented for the critical functions of the
Company.
The Company has taken insurance covers in order to mitigate
this risk factor.
The Board confirms that a process for identifying, evaluating and managing significant risks that endanger the achievement of the
strategic objectives of Asian Hotels and Properties PLC has been in place throughout the year in accordance with the guidelines set
out by the Institute of Chartered Accountants of Sri Lanka and industry best practices. The Audit Committee has reviewed the Business
Risk Management process adopted by the Company and has noted that the risk management exercises had been conducted.
49
CORPORATE GOVERNANCE COMMENTARY
Introduction
A culture of performance, entrenched within a framework of compliance, conformance and sustainable development dominates the
governance policy of Asian Hotels and Properties PLC in line with the JKH Group’s corporate governance philosophy which has been
institutionalised at all levels through a strong set of corporate values, a written code of conduct and a proven performance management
and values monitoring systems. The Board of Directors, Senior Management and employees are expected to strictly adhere to the
precepts of this culture and follow them in performing official duties, whilst ensuring that the Group image remains positive and
pragmatic at all times.
The Company has strived to maintain the highest levels of transparency when reporting on both financial and non-financial information
which has enabled it to enhance the trust that stakeholders have in the Company.
The Company holds itself accountable to the highest standards of Corporate Governance and transparency which makes information
about our Company accessible to the public. Effective Corporate Governance in line with the highest international standards is an
important part of our identity. Our system of Corporate Governance lays the basis for responsible performance-oriented management
and control which is geared towards sustainable value creation. Most importantly, our efforts go hand in hand with an unwavering
commitment to the accurate, clear communication of our performance and the facts of our business.
We are pleased to present this report which sets out the corporate governance philosophy that is practiced by the Company. We are in
compliance with the following statutes, rules and regulations and where necessary, any deviations permitted by same, have been duly
explained.
Act No. 7 of 2007 – Mandatory compliance
Listing Rules of the Colombo Stock Exchange (CSE) – Mandatory compliance
The Code of Best Practice on Governance issued jointly by the Securities and Exchange Commission of Sri Lanka and the Institute
of Chartered Accountants of Sri Lanka to the extent that they are practicable – Voluntary compliance
Recommendations of the UK Corporate Governance Code as practicable in the context of the nature of businesses and risk
profiles - Voluntary compliance
Companies
The
Corporate Governance System with a Sustainability Development Framework
Internal Governance Structure
Audit
Committee
Nominations
Committee
Chairman & the
Board of Directors
Human
Resources &
Compensation
Committee
Related Party
Transaction
Review
Committee
President/General Manager
Management Team
Employee Empowerment
50
People &
Talent Management
Employees Performance
Governance
Assurance Mechanisms
Board Committees
Regulatory Benchmarks
Companies Act No. 07
of 2007
Internal Control
Listing Rules of the Colombo
Stock Exchange
Stakeholder Management
JKH Code of Conduct
The Code of Best Practices
on Corporate Governance
issued jointly by SEC & ICASL
Effective & Transparent
Management
IT Governance
Risk Management
External Audit
Employee
Participation
Recommendations of the UK
Corporate Governance Code
as practicable in the context
of the nature of businesses
and risk profiles
The Corporate Governance framework is
founded on the following principles:
(i) Allegiance to John Keells Holdings
PLC (JKH) and the John Keells Group,
and upholding of Group values.
(ii) Compliance with the laws and
Company Rules and Regulations
applying to the territories that the John
Keells Group operates in.
(iii) Conduct of business in an ethical
manner at all times, in line with
acceptable business practices.
(iv) Exercise of professionalism and
integrity in all business and “public”
personal transactions.
(v) Ensure that no one person has
unfettered powers of decision making.
(vi) Opting for the early adoption of
accounting standards and best
practices in governance regulation
when practical.
(vii)Encourage proactive discussions
with the relevant regulatory bodies to
facilitate the implementation of matters
of governance and other business
reforms in Sri Lanka.
(viii)Make business decisions and
resource allocations, in an efficient
and timely manner, within a framework
that ensures transparent and ethical
dealings which adhere to the laws
of the country and the standards of
governance that stakeholders expect
from the Company.
The key components of the corporate
governance framework of the Company
comprising the internal Governance
structure, the external regulatory
51
framework, accountability and assurance
of compliance are discussed in detail in
this report.
This comprises a committees which
formulate, execute and monitor Company
related strategies, initiatives, processes
and procedures which support
are weaved into the fabric of these
committees, enabling them to perform
their roles effectively.
Assurance Mechanisms
This comprises ‘bodies and mechanisms’
which are employed in enabling regular
review of progress against objectives with
a view to highlight deviations, provide
quick redress and assurance that actual
outcomes are in-line with expectations.
Regulatory Benchmarks
This comprises regulations which govern,
in the main, all our corporate activities
from the Companies Act to Listing Rules
of the CSE, Rules of the SEC and the
benchmarks we have set for ourselves
in working towards local and global best
practices.
What follows is a more detailed account
of including where relevant and applicable
components of the Company’s Corporate
Governance System.
The Internal Governance Structure
encompasses;
The
Board of Directors
Board Sub-committees
 Senior Management Committees

Strengthened and complemented
by internal policies, processes and
procedures, the key components being:
Strategy
formulation and decision
making
Human resource governance
Integrated risk management
IT governance and
Stakeholder management and
effective communication
The components of the internal
governance structure are designed in
such a way that the executive authority
is well devolved and delegated through
a committee structure ensuring that the
Chairman, Presidents, Sector/Functional
Head and Profit Centre/Function
Managers are accountable for the total
Company functions and sub-functions
respectively. Clear definitions of authority
limits, responsibilities and accountabilities
are set and agreed upon in advance
to achieve greater operating efficiency,
expediency, healthy debate and freedom
of decision making.
Chairman and his Role
The Chairman conducts Board Meetings
and ensures that the participation and
contribution of Executive and NonExecutive Directors are encouraged and
their views on matters under consideration
are determined. The Chairman maintains
contact with all Directors and has informal
discussions with the Non- Executive
Directors as necessary.
As Chairman, he is responsible for:
that the principles and
processes of the Board are
maintained, including the provision of
accurate, timely and clear information
Encouraging debate and constructive
criticism
Setting agendas for meetings of the
Board, in conjunction with the Senior
Managers and Group Company
Secretary, that focus on the strategic
direction and performance of our
business
Ensuring
Corporate Governance contd.
Leading
the Board and individual Director Performance assessments
and acting for the Board and representing the Board to shareholders
Presenting shareholders’ views to the Board
Facilitating the relationship between the Board and the Management
Speaking
The Board considers that none of the Chairman’s other commitments interfere with the discharge of his responsibilities to the Company.
The Board is satisfied that he makes sufficient time available to serve the Company effectively.
Board of Directors
The Board of Directors is the ultimate governing body of the Company. It is responsible for the ultimate supervision of the Company. In
all actions taken by the Board, the Directors are expected to exercise their business judgment in what they reasonably believe to be the
best interests of the Company. In discharging that obligation, Directors may rely on the honesty and integrity of the Company’s senior
executives and its outside advisors and auditors.
Composition of the Board and Directors’ Independence
As at 31st March 2014, the Board consisted of 8 Directors comprising:
Executive Directors (ED)
3 Non-Executive Non-Independent Directors (NED/NID)
3 Non-Executive Independent Directors (NED/ID)
2
Independence of the Directors have been determined in accordance with the Continuing Listing Rules of the Colombo Stock Exchange
and all three Independent, Non-Executive Board members have submitted signed confirmations of their independence.
The Board members have a wide range of expertise as well as significant experience in diverse fields enabling them to discharge their
governance duties in an effective manner.
Name of Director/Capacity
Mr. S.C. Ratnayake
Mr. J.R.F. Peiris
Employee of
Family Member a
Share Holding (1) Material
Company (3)
Director or CEO
Business
(4)
Relationship (2)
Non-Executive ,Non-Independent Directors (NED/NID)
Yes
No
No
No
No
No
No
No
No
No
No
No
Executive ,Non-Independent Directors (ED/NID)
Yes
No
No
No
No
No
No
No
Non-Executive, Independent Directors (NED/ID)
Yes
No
No
No
No
No
No
No
No
No
No
No
Continuous
service for nine
years (5)
Yes
Yes
Yes
Yes
Mr. S. Rajendra
No
Mr. C.J.L. Pinto
No
No
No
Definitions 1. Have shares in the Company.
2. Income/Non cash benefits derived from the Company equivalent to 20 per cent of the Directors annual income.
3. Director was employed by the company two years immediately preceding appointment.
4. Close family member who is a Director or CEO. 5. Has served on the Board continuously for a period exceeding nine years. 52
The Board is of the view that its present
composition ensures a right balance
between executive expediency and
independent judgment.
Directors that made up the Company
Board participate in defining goals,
vision, strategies and business targets.
All Directors are able to and willingly
add value and independent opinion on
the decision making process, which
is of immense benefit to the effective
functioning of the Board. The details of
the current Board of Directors along with a
brief resume of each Director is found from
pages 38 to 39 of the Report.
Transactions or events that have a material
bearing on the Company are disclosed
by way of circulars to shareholders,
announcements to the Colombo Stock
Exchange and media/press releases. The
Board is ready to answer questions raised
by shareholders at general meetings and
maintains an appropriate dialogue with
them.
The presence of Independent Directors
ensures the equal benefits of all
shareholders with independent views
and opinions. Directors will update the
Board with any new information in relation
to interests or relationships relevant to
independence.
The Board has developed a policy that it
uses to determine the independence of
its Directors. This determination is carried
out annually or at any other time where the
circumstances of a Director change such
as to warrant reconsideration.
The Board is aware of the other
commitments of its Directors and is
satisfied that these do not conflict with
their duties as Directors of the Company.
53
All Non Executive Directors are required
to notify the Chairman of changes in
their outside Board appointments and
the Chairman carries out a review of all
such appointments in consultation with
the other Directors where necessary to
ascertain any possible conflicts of interest.
Board Responsibilities and Decision
Rights
At Asian Hotels and Properties PLC,
the businesses are conducted by its
employees, managers and officers,
under the direction of the Executive
Directors and the oversight of the Board,
to enhance the long-term value of the
Company for its shareholders.
The Board aims to fulfill its responsibilities
by creating value for all stakeholders that
is sustainable and beneficial. Stakeholders
include shareholders, employees,
customers, the community and the
environment. Without limiting the Board’s
function, its specific responsibilities
include:
Approving
objectives, strategies and
financial plans and monitoring the
Company’s performance against
these plans
Monitoring compliance with the
regulatory requirements and ensuring
all Company employees act with
integrity and diligence in the interests
of the Company and stakeholders
Reviewing and approving all significant
policies and procedures
Exercise objective judgment on all
corporate matters independent from
the Executive Management
Formulating short and long term
strategies as a basis for the
operational plans of the Company
Determining
and recommending
interim and final dividends for the
approval of shareholders
Identifying the principal risks of the
business and periodically reviewing
the risk management systems in place
Preparation and presentation of
financial statements, together with a
statement by the Auditors pertaining to
their reporting responsibilities
Delegation of Authority
The Board has delegated some of
its functions to the Audit Committee
while retaining the final right to accept
the recommendations made by the
Committee. The Audit Committee is
chaired by an Independent Director
appointed by the Board.
Conflicts of Interest and Independence
Each Director holds continuous
responsibility to determine whether he or
she has a potential or actual conflict of
interest arising from external associations,
interests or personal relationships in
material matters which are considered by
the Board from time to time.
In order to mitigate any potential or actual
conflict of interest or independence of
Directors throughout the term of their
membership on the Board, the Company
has adopted the following processes:
Prior to Appointment
Once Appointed
Nominees are requested to disclose their various interests that could potentially conflict with the
interest of the Company.
Directors who are appointed are expected to inform the Board and obtain Board clearance prior to
accepting any position or engaging in any transaction that could create a potential conflict of interest.
All NEDs are required to notify the Chairman of changes in their current board representations.
Directors who have disclosed an interest in a matter under discussion have,
During
Board Meetings
Excused themselves from deliberations on the subject matter.
Refrained from voting on the subject matter (Such abstentions from Board decisions are duly
recorded).
Details of companies in which Board members hold Board or Board Committee membership is available with the company for
inspection by shareholders on request.
Board Meetings, Agenda and Attendance
For the financial year 2013/2014 there was a total of four (4) Board meetings. During the meetings, the Chairman of the Board
appropriately allocated time for Directors to carefully review and discuss all relative information. There were also written minutes that
were made available for verification and approved by the Board. All Directors have access to Keells Consultants [Private] Limited who
act as Company Secretaries for advice on relevant matters.
The Board met on key matters of importance to the Company, including;
of previous minutes
Matters arising from the previous minutes
Board subcommittee reports and other matters exclusive to the Board
Circular resolutions
Status updates of major projects
Review of performance – in summary and in detail, including high level commentary on actuals and outlook
Summation of strategic issues discussed at pre-Board meetings
Approval of Quarterly and Annual Financial Statements
Ratification of capital expenditure and donations
Ratification of the use of the company seal and share certificates issued
New resolutions
Report on corporate social responsibility
Review of Group risks, sustainability, HR practices/updates
Any other business
Confirmation
54
The Board of Asian Hotels and Properties PLC met once every quarter and the Directors’
attendance is shown in the table given below:
Attendance at Board Meetings
Name of Director
30-04-2013 30-07-2013 29-10-2013 24-01-2014
Meetings
Attended
Mr. S.C. Ratnayake
√
√
√
-
3/4
√
√
√
√
4/4
Mr. J.R.F. Peiris
√
-
√
√
3/4
√
√
√
√
4/4
Mr. S. Rajendra
√
√
√
√
4/4
Mr. C.J.L. Pinto
√
√
-
√
3/4
√
√
√
-
3/4
√
-
-
√
2/4
Financial Guidance
The Board of Directors consists of four senior qualified Accountants with significant
experience in the corporate sector, who posses the necessary knowledge to offer
the Board guidance on matters of finance. These Directors add substantial value and
independent judgment on the decision making of the Board on matters concerning
finance and investments.
Timely Supply of Information
All Directors are fully briefed on important developments in the various business activities
of the Company. The Directors have access to;
External and Internal Auditors
Experts and other external professional advisory services
Senior managers under a structured arrangement
Information as is necessary to carry out their duties and responsibilities effectively
and efficiently
Periodic performance reports
Information updates from management on topical matters, new regulations and best
practices as relevant to the Company's businesses
The services of the Company Secretary
Tenure, Retirement and Re-Election of Directors
As prescribed by the Company’s Articles, one third of the Directors of the Company
except the Chairman and Managing Director retire by rotation. A Director retiring by
rotation is eligible for re-election.
The tenure of office for Non independent Directors is limited by their prescribed Company
retirement age.
Independent Directors, on the other hand, can be appointed to office for three
consecutive terms of three years, which however, is subjected to the age limit set by
55
statute at the time of re-appointment
following the end of a term.
The proposal for the re-appointment of
Directors is set out in the Directors Report
as well as the Notice of Meeting on page
191 of this Report.
Nominations Committee and Board
Appointments
The Nomination Committee of the Parent
Company, John Keells Holdings PLC
functions as the nomination committee
of the Company and its Subsidiary.
The Nomination Committee holds
responsibility to identify and propose
suitable candidates for appointment as
Non-Executive Directors to the Board of
the Company, in keeping with the target
Board composition and skill requirements.
The Board of the Company after due
consideration of such recommendations,
determines and appoints the new Director.
All newly appointed Directors shall hold
office until the next Annual General
Meeting and shall be eligible for re-election
by the Shareholders of the Company, as
provided by Article 91 of the Articles of
Association of the Company.
The Nominations Committee of John
Keells Holdings PLC comprises four
Independent Directors and one Non
Independent Director namely as at 31st
March 2014:
Mr. T. Das - Chairman
Mrs. S. Tiruchelvam*
Mr. S.C. Ratnayake - (Non Independent)
Mr. M.A. Omar**
Mr. E.F.G. Amerasinghe**
Mr. D.A. Cabraal**
*
Resigned with effect from 9th
September 2013.
** Appointed with effect from 7th
November 2013.
Committee
As permitted by the Listing Rules of the
Colombo Stock Exchange, the Human
of John Keells Holdings PLC the Parent
Company of Asian Hotels and Properties
PLC function as the Human Resources
and Compensation Committee of the
Company and its Subsidiary. The Human
of the John Keells Holdings PLC comprise
of Five Non Executive Independent
Directors.
Mr. E.F.G. Amerasinghe - Chairman
Mrs. S. Tiruchelvam*
Dr. I. Coomaraswamy
Mr. A.R. Gunasekara
Mr. M.A. Omar**
Mr. N.A. Fonseka***
*
Resigned with effect from 9th
September 2013
** Appointed with effect from 28th May
2013.
*** Appointed with effect from 7th
November 2013.
The remuneration policy adopted by
the Company as recommended by the
Committee of its Parent Company, John
Keells Holdings PLC is formulated to
attract and retain high caliber executives
and motivate them to develop and
implement the business strategy in
order to optimise long term shareholder
value creation. The customised “pay
for performance scheme” continues to
apply for all group employees based
on the pillars of individual performance
and organisational performance. The
remuneration package for all employees
at Assistant Manager level and above is
based on organisational performance
and individual performance. However, in
56
respect of the Executive level and below,
the employees scheme operates purely
on the basis of individual performance.
Related Party Transactions Review
Committee
As intimated by the Securities and
Exchange Commission of Sri Lanka
under its Code of Best Practice for
Listed Companies, the Related Party
Transactions Review Committee was
voluntarily operationalised by the Group
at the John Keells Holdings PLC from 1st
April 2014. This Parent Level Committee
will act on behalf of the whole Group
including the Company.
In very broad terms, the scope of this subcommittee is:
(i) Developing, and recommending for
adoption by the Board of Directors of
JKH PLC and its listed subsidiaries,
a Related Party Transaction Policy
consistent with that proposed by the
SEC and is in synchronisation with the
Operating Model and the delegated
Decision Rights of the Group.
(ii) Updating the Board of Directors on the
related party transaction of each of the
listed companies of the Group on a
quarterly basis.
This committee of John Keells Holdings
PLC comprises three Non-Executive
Independent Directors and two NonExecutive Non Independent Directors.
The Head of Group Business Process
Review will operate as the secretary to this
committee.
Mr. N. Fonseka - Chairman
Mr. E.F.G. Amerasinghe
Mr. D.A. Cabraal
Mr. S.C. Ratnayake
Mr. J.R.F. Peiris
Board Remuneration
Remuneration for Non-Executive, NonIndependent Directors
Compensation for Non Executive
Directors, Non-Independent Directors
[NED/NIDs] is determined by reference
to fees paid to other NED/NIDs of
comparable companies. Director fees
applicable to Non Executive Directors
nominated by John Keells Holdings PLC
are paid directly to the Company and not
to individuals.
Remuneration for Non-Executive,
Independent Directors
Compensation for Non-executive,
Independent Directors (NED/IDs) is
determined by reference to fees paid to
other NED/IDs of comparable companies.
NED/IDs receive a fee for devoting
time and expertise for the benefit of the
Company. Nevertheless, NED/IDs fees are
not time bound or defined by a maximum/
minimum number of hours committed
to the Group per annum and hence is
not subject to additional/lower fees for
additional/lower time devoted. NED/IDs
do not receive any performance/incentive
payments.
The Company does not have an employee
share option scheme.
Total aggregate of Non- Executive Director
Remuneration for the year was
Rs. 1,440,000.
Remuneration for Executive and NonIndependent Directors
The remuneration of the Executive
Directors is determined as per the
remuneration principles of the Group. The
Committee conducted a market survey
of Executive Director remuneration with a
view to assessing the appropriateness of
compensation with market benchmarks.
Having taken into account the
complexities associated with the Group, it
was established that the compensation is
in-line with the market.
The Executive Directors, like other eligible
employees, have received employee
shares option based on role responsibility
and actual performance. Accordingly
the number of options so awarded
was recommended to the Board by
Committee.
Total aggregate Executive Director
Remuneration for the year was
Rs. 55,327,000.
As a member of the John Keells
Group, the Company is now part of a
comprehensive planning and monitoring
process. The Annual Plans and Budgets
are developed by the Company along with
a reforecast after six months. Strategic
priorities and key drivers are pre-identified
and tracked on a monthly basis.
The Company further maintains a system
of internal controls, which is designed to
safeguard its assets from identified risks,
while ensuring that all transactions are duly
authorised, recorded and reported. Key
systems and rules relating to delegation of
authority are formalised and documented.
57
out frequent surprise cash
counts across the Group.
Group-wide
Risk Review
The Board is responsible for the
formulation of the appropriate systems
of internal controls for the Group and
ensuring its effectiveness. The Board is
fully conscious that any internal control
system contains inherent limitations
and no system of internal control could
provide absolute assurance against
the occurrence of material errors, poor
judgment in decision making, human
errors, losses, fraud or other irregularities.
The Board has therefore taken appropriate
action to minimise such situations.
New
There is a continuous process for
identifying, evaluating and managing the
significant risks faced by the Company
which has been in place during the
financial year and up to the date of
approval of the Annual Report and
Accounts. The Board regularly reviews this
process.
During the financial year under review
following tasks were performed by the
Group Business Process Review Division
and outsourced Internal Auditors to
ensuring the existence of effective internal
controls;
initiative to strengthen
the existing Business Continuity Plans
(BCP) and Disaster Recovery Plans
(DRP). All Heads of Department were
encouraged to re-visit their BCPs
in confirming that such plans were
up-to-date and relevant to the current
working environment.
Accountability and Assurance
System of Internal Controls
The Board has overall responsibility for
the system of internal control. A sound
system of internal control is designed to
manage rather than eliminate the risk of
failure to achieve business objectives.
The Company continues to stress on
the importance of strong internal control
throughout the organisation. Written
responsibilities, authority delegation and
management controls have been adopted
to create transparency for utilisation of the
Company’s resources and to distinguish
the duties of staff and controllers in order
to ensure that proper verification and
monitoring processes are in place.
Carried
methods of data analytics were
carried out using sophisticated tools
where the entire data population was
analysed (as opposed to analysing a
sample) in identifying exceptions and
irregularities.
Implemented
across the Group,
process improvements stemming from
the findings of internal audits.
The
existing SAP SOX processes
were reviewed and updated to ensure
compliance with Sarbanes Oxley Act
of 2002 – Sec 404.
Strengthened
the management
reporting on internal controls to
facilitate better decision making.
Certain aspects of its business operation
may expose the Company to both
internal and external risks. The Company
recognises the importance of controlling
these risks and minimising the possibility
of any negative impact to the Company.
The Company is using the Business
Risk Management [BRM] process
which is established by JKH to identify
both financial and operational risks. It
endeavours to ensure the control systems
designed to safeguard the Company’s
assets and maintain proper accounting
records that facilitate the production and
availability of reliable information are in
place and are functioning as planned.
Investment Appraisal Process and
Investment Decisions
Over the years, the Company has refined
the process of investment appraisal
which ensures the involvement of the
relevant persons when capital investment
decisions are made. In this manner,
several views, opinions and advices are
obtained prior to the investment decision
being made. Experience has proven
that a holistic and well debated view of
the commercial viability and potential of
proposed projects including operational,
financial, funding, risk and tax implications
has most of the time culminated a good
result. All investment decisions are routed
through a committee structure which
safeguards against one individual having
unfettered decision making powers in
such decisions.
Operations, Planning, Monitoring and
Decision Rights
The responsibility for monitoring plans has
been entrusted to the Managing Agents.
The achievement of annual plans as
well as ensuring compliance with Group
policies and guidelines rests with the
President, General Manager and functional
department heads of the respective
business units to whom appropriate
decision rights have been granted in
order to execute operational and financial
decisions within their purview.
Monitoring of Financial and
Operational Data
Financial results and key operational
performance indicators are evaluated
against the Annual Plan and
subsequent reforecast on a monthly
basis at all levels of management.
The Board reviews the financial results
on a quarterly basis.
The IT systems in place facilitate the
online display of information relevant
to the needs of hotel managers and
58
functional heads pertinent to their
areas of responsibility.
Information Technology Governance
The Company Information Technology
(IT) Governance Policy has evolved in line
with the Group's IT Governance Policy in
the last year to deliver and embrace new
technologies which have aligned with the
overall business objective of the Group.
This evolution occurred as the Company
discerned the competitive advantage
gained and the enhancement of business
value which came about through the
skillful alignment of IT with its business
objectives and the prudent management
of it’s IT resources. The Company has
always been a step ahead in embracing
emerging technologies and systems,
consistently investing in developing its
IT infrastructure. Continuous focus on
cutting-edge technology has ensured
greater reliability of IT systems and has
shortened information delivery times to
both internal and external stakeholders.
The IT governance system, in particular,
was closely reviewed during the year
towards ensuring the following:
Leverage
IT as a strategic asset
agility, in view of the fast
changing technology
Establish the right balance between
business needs and IT enablement
Ensure that all IT investments have a
quantifiable (or visible) business return
Ensure a strong IT governance and
regulatory framework through a
coherent set of policies, processes
and adoption of best practices in
line with world class organisations,
but always keeping in mind business
returns.
Ensure that e-enabled platforms
are regularly reviewed for 'internal
control effectiveness' through SOX
methodology of process flow analysis.
Ensure
Human Resource Governance
(Performance Management)
The Performance Management System
(PMS) continued to evolve positively in
catering to, and fashioning, employee
empowerment in meeting current and
emerging needs.
Following linkages of PMS were further
strengthened:
Learning
and development
development
Succession planning
Talent management
Reward and recognition
Compensation and benefits
Career
Audit Committee
Role of the Committee
The role of the Audit Committee is to
assist the Board in fulfilling its oversight
responsibilities for the integrity of the
Financial Statements of the Company,
the internal control and risk management
systems of the Company and its
compliance with legal and regulatory
requirements, the External Auditors’
performance, qualifications and
independence, and the adequacy and
performance of the Internal Audit function,
which at the parent company (John Keells
Holdings PLC) is termed Group Business
Process Review Division (Group BPR).
This is detailed in the terms of reference of
the Committee which has been approved
by the Board and is reviewed annually.
The effectiveness of the Committee is
evaluated annually by each member
of the Committee and the results are
communicated to the Board.
Composition of the Committee and
Meetings
The Audit Committee comprises of three
Independent Non-Executive Directors. As
prescribed in the Listing Rules of Colombo
Stock Exchange. The Chairman of the
Audit Committee is a Fellow member of
the Institute of Chartered Accountants of
Sri Lanka with several years of experience
in financial auditing and accounting.
Four (4) meetings were held during
the year. The Executive Directors and
Senior Management of Cinnamon Grand
Colombo and Crescat Property Division
attend the Audit Committee meetings
by invitation. Further the representatives
of the Internal Auditors (Messrs.
Pricewaterhouse Coopers (Private)
Limited), John Keells Group Business
Process Review Division and the External
Auditors KPMG, Chartered Accountants
attend by invitation. The Audit Committee
performs an important monitoring function
in the overall governance of the Company.
The Committee reviews the following;
for identifying business
risks and controlling their financial
impact on the Group and the
operational effectiveness of the
policies and procedures related to risk
and control
The appointment, remuneration,
qualifications, independence and
performance of the External Auditor
and the integrity of the audit process
as a whole
Budgeting and forecasting systems,
financial reporting systems and
controls
Procedures for ensuring compliance
with relevant regulatory and legal
requirements
Arrangements for protecting
intellectual property and other nonphysical assets
Procedures
59
Overseeing
the adequacy of the internal controls and allocation of responsibilities for
monitoring internal financial controls
Policies, information systems and procedures for preparation and dissemination of
information to shareholders, stock exchanges and the financial community.
Audit Committee attendance during the subject period was;
Attendance at Board Audit Committee Meetings
Name of Director
17-05-2013 26-07-2013 24-10-2013 23-01-2014
Meetings
Attended
Mr. C.J.L. Pinto
√
√
√
√
4/4
√
√
√
√
4/4
√
-
√
√
3/4
Management Committee
The Hotel and Property divisions of Asian Hotels and Properties PLC have two separate
Management Committees consisting of General Manager of the Hotel, President of
the Property Division and other key managers of divisions in order to discuss matters
pertaining to strategy and operations.
Strategic risks and opportunities arising from changes in our business environment
are regularly reviewed by the Group Management Committee (GMC) of the Hotel and
Property divisions at the meetings held monthly. The role of the GMC is to provide the
necessary guidance and direction to the Company on matters that are strategic and
long-term in nature or have the potential to significantly impact the division’s performance
and reputation and to make decisions on key business-wide policies, including
operational policies, internal controls, the Human Resources Strategy and the Risk
Management Policy.
Internal Auditors
Quarterly Audits are conducted by the Company’s Internal Auditors, Messrs
PricewaterhouseCoopers (Private) Limited, a firm of Chartered Accountants. The role of
the internal audit team is to determine whether risk management, control and governance
processes are adequate and functioning. The Internal Audit function is independent of
the External Auditor.
The reports arising out of such audits are, in the first instance, considered and discussed
at the business/functional unit levels and after review by the respective President/CEO
of the Company and the Subsidiary are forwarded to the Audit Committee on a regular
basis. Further, the Audit Committee also assesses the effectiveness of the risk review
process and systems of internal control on a regular basis. Follow-ups on internal audits
are done on a structured basis.
Relevant risks and vulnerabilities of the Company are identified and promptly brought to
the attention of the Management, facilitating corrective and preventive measures to be
taken in a timely manner.
Additionally, a technically strong
Management Audit function aligned with
the Company’s strategies adds value in a
variety of ways, including –
Providing an independent opinion on
the integrity, reliability and relevance of
management information
Assessing the adequacy of controls
over the protection of assets and
management of liabilities
Reviewing compliance with corporate
policies and external regulations
Reducing the risk of fraud
Going Concern and Financial
Reporting
The Directors are satisfied that the
Company has sufficient resources to
continue in operation for the foreseeable
future. In the unlikely event that the net
assets of the Company fall below a half of
shareholders funds, shareholders would
be notified and an extraordinary resolution
passed on the proposed way forward.
The going concern principle has been
adopted in preparing the Financial
Statements. All statutory and material
declarations are highlighted in the Annual
Report of the Board of Directors. Financial
Statements are prepared in accordance
with the Sri Lanka Accounting Standards
(SLAS), including all the new standards
introduced during the financial year and
comply with the requirements of the
Companies Act No. 07 of 2007.
Information in the Financial Statements
of the Annual Report are supplemented
by a detailed ‘Management Discussion
and Analysis’ from pages 30 to 37 which
explains to shareholders the strategic,
operational, investment and risk related
aspects of the Company that have
translated into the reported financial
performance and are likely to influence
future results.
60
The Statement of Directors' Responsibilities
in relation to financial reporting is given
on page 142 of the Annual Report. The
Directors' interests in contracts of the
Company are addressed on page 42 of
the Annual Report.
The Directors have taken all reasonable
steps in ensuring the accuracy and
timeliness of published information and
in presenting an honest and balanced
assessment of results in the quarterly
and annual Financial Statements. Price
sensitive information has been disclosed
to the Colombo Stock Exchange,
shareholders and the press in a
timely manner and in keeping with the
regulations.
Sri Lanka Financial Reporting
Standards (SLFRS)
Living by the Company’s philosophy
of good governance and reporting the
Financial Statements for year 2013/14
have been prepared and presented in
accordance with Sri Lanka Accounting
Standards (SLFRS/LKAS) which have
materially converged with the International
Financial Reporting Standards (IFRS) as
issued by the International Accounting
Standards Board (IASB).
Compliance with Legal Requirements
Compliance with legal requirements
and Group-internal rules are significant
elements of Corporate Governance for
the management of Asian Hotels and
Properties PLC. The Board of Directors,
to the best of their knowledge and belief
are satisfied that the Company has not
engaged in any activity which contravenes
laws and regulations and all financial
obligations due to the Government and to
the employees have been either duly paid
or adequately provided for in the Financial
Statements.
Securities Trading Policy
JKH’s securities trading policy prohibits
all employees and agents engaged by
Asian Hotels and Properties PLC who
are aware of unpublished price sensitive
information from trading in Asian Hotels
and Properties PLC shares or the shares
of other companies in which the Company
presently has business interests.
External Audit
KPMG serves as the external auditors of
the Company.
The audit fees paid by the Company and
Group to KPMG are separately classified
on page 159 in the Notes to the Financial
Statements of the Annual Report.
The Auditors' report on the Financial
Statements of the Company for the year
under review is found on page 143 of the
Annual Report.
The Company has attempted always to
separate the internal auditors from the
external auditors in order to maintain
external auditor independence.
The appointment/re-appointment of these
auditors were recommended by the Audit
Committees to the Boards of Directors.
Employee Participation in Assurance
The following meetings, interviews,
evaluations and surveys were conducted
during the year:
Skip
Level meetings
interviews
Young Forum meetings
360 degree evaluation
Great Place to Work survey
Voice of Employee survey
Exit
Whistle Blower Policy
Through a communication link named
‘Chairman Direct’, concerns about
unethical behaviour and any violation
of Group values could be reported by
any employee to the Chairman of JKH.
Employees reporting such incidents are
guaranteed complete confidentiality and
such complaints are investigated and
addressed via a select committee under
the direction of the Chairman.
Ombudsperson
In order to deal with a situation in which
an employee or group of employees
feel that an alleged violation has not
been addressed satisfactorily using
the available/existing procedures and
processes, an Ombudsperson has been
appointed by JKH being the ultimate
Parent Company to entertain such
concerns.
The Ombudsperson’s duty ceases upon
the confidential written communication of
the findings of the Ombudsperson and
recommendations to the Chairman or the
Senior Independent Director as the case
may be.
The Chairman or the Senior Independent
Director, as applicable, will place before
the Board,
The decision and the
recommendations of the
Ombudsperson
The action taken based on the
recommendations
The areas of disagreement and
the reasons adduced in instances
where the Chairman or the Senior
Independent Director disagrees
with any or all of the findings and/
or recommendations. In such cases,
the Board shall consider the areas of
disagreement and determine the way
forward.
61
The Chairman or the Senior Independent Director is expected to take such steps as
are necessary to ensure that the complainant is not victimised for having invoked this
process.
These open door policies facilitate constant dialogue, communication, transparency and
ultimately employee confidence, which would help retain existing talent whilst attracting
new.
The Code of Conduct
The written Code of Conduct to which all employees at all levels and the Board of
Directors are bound by, engraves the desired behaviour of JKH staff at executive level
and above. This is being constantly and rigorously monitored. The objectives of the Code
of Conduct were further affirmed by a strong set of corporate values which were well
institutionalised at all levels within the Group and thus the Company through structured
communication. The degree of employee conformance with corporate values and their
degree of adherence to the JKH Code of Conduct were the key elements of reward and
recognition schemes.
Code of Conduct
Allegiance
to the Company and the Group
Compliance
with rules and regulations applying in the territories that the group
operates in
Conduct
of business in an ethical manner at all times and in keeping with
acceptable business practices
Exercise
of professionalism and integrity in all business and ‘public’ personal
transactions
The Chairman of the Board affirms that there have not been any material violations of
any of the provisions of the Code of Conduct. In the instances where violations did take
place, or were alleged to have taken place, they were investigated and handled through
the Company’s established procedures.
Shareholder Relations
The Company shareholders exercise their rights at the Annual General Meeting. Each
resolution brought before the shareholders at the Annual General Meeting is voted on
separately by the shareholders.
The notice of the Annual General Meeting and the relevant documents required are
published and sent to the shareholders within the statutory periods. The Company
circulates the agenda for the meeting and shareholders vote on each issue separately.
All shareholders are invited and
encouraged to be present, actively
participate and vote at the Annual General
Meeting. The Annual General Meeting
provides an opportunity for Shareholders
to seek and obtain clarifications and
information on the performance of
the Company and to informally meet
the Directors after the Annual General
Meeting. The External Auditors and the
Company’s lawyers are invited too and are
present at the Annual General Meeting to
render any professional assistance that
may be requested. Shareholders who
are not in a position to attend the Annual
General Meeting in person are entitled
to have their voting rights exercised by a
proxy of their own choice.
Four times each year, the Company
reports to its shareholders regarding
its business development, financial
position and earnings. An ordinary Annual
Shareholders’ Meeting normally takes
place within the first four months of each
financial year. The AGM is the main forum
where the Company communicates with
its shareholders the objectives, strategies
and the way forward for the Company, for
the new financial year.
Roles of Stakeholders
The Company realises the importance of
ensuring that all stakeholders’ rights are
properly observed. Pertinent procedures
are carried out in line with the rules and
regulations of the Stock Exchange of Sri
Lanka, as well as the related laws.
Shareholders: The Company is
committed to create long-term growth
and returns to the shareholders and to
conduct its business in a transparent
manner.
Customers: The Company is committed
to continuously develop better quality of
62
goods and services for the benefit and
satisfaction of its customers.
Partners: The Company treats all
partners fairly in order to achieve mutual
benefits.
Creditors: The Company observes all of
its obligations to creditors.
Competitors: The Company abides by
the framework of fair competition and will
not destroy the reputation of competitors
through false accusations.
Employees: The Company considers
its employees, valuable assets and treats
them fairly in regard to work opportunities,
remuneration and quality of working
environment. The Company also provides
all its employees professional and career
development training.
Society and environment: The
Company is committed to conduct
businesses that benefits the economy,
society and quality of environment. The
Parent Company of Asian Hotels and
Properties PLC has established the
Corporate Social Responsibility (CSR)
Department to promote to the Company’s
staff the importance of the CSR
objectives to achieve balanced benefits
relating to society, the environment and
all stakeholders in harmony with the
Company’s sustainable growth objectives.
Major Transactions
The Directors ensure that any corporate
transaction that would materially affect
the net asset base of the Company are
communicated to shareholders. There
were no major transactions as defined
under Section 185 by the Companies
Act No. 07 of 2007 during the year under
review.
Going Forward
The Board is committed to the highest
standards of corporate governance in
order that the Company shall achieve
its long term sustainable growth
objectives. The Board is accountable
to the Company’s shareholders for
good governance in its management of
the affairs of the Company. The Board
confirms that the Company was fully
compliant throughout the year ended
31st March 2014 with all the principles
and provisions of the good Corporate
Governance and the Code of Business
Conduct and Ethics.
The Company’s approach to Corporate
Governance enables it to understand the
expectations of stakeholders, forecast
trends in social, environmental and
ethical requirements and to manage the
Company’s performance in an appropriate
manner.
While the Board is satisfied with its level
of compliance with the governance
requirements, it recognises that practices
and procedures can always be improved,
and there is merit in continuously
reviewing its own standards. The Board’s
programme of review will continue
throughout the year ahead.
Statement of Compliance Under Section 7.10 of the Rules of the Colombo Stock Exchange (CSE) on Corporate Governance
(Implemented on 1st April 2009 and includes amendments to date)
Compliant
63

Non Compliant

CSE
Rule No.
Subject
Compliance Requirement
7.10
(a-c)
Compliance
The

7.10.1
(a-c)
Non-Executive Directors
Two

7.10.2(a)
Two

7.10.2(b)
Each

Available with the
Secretaries for review
7.10.3(a)
Disclosure relating to
Directors
The
Board shall annually determine the
independence or otherwise of the NonExecutive Directors
Names of the Independent Directors
should be disclosed in the Annual
Report

Group is in compliance with the
Corporate Governance Rules and
any deviations are explained where
applicable
or at least one third of the total
number of Directors should be NonExecutive Directors, whichever is higher
or one third of Non-Executive
Directors, whichever is higher, should be
independent
Non-Executive Director should
submit a declaration of independence/
non-independence in the prescribed
format
Applicable Section in the
Annual Report

7.10.3(b)
Directors
The

7.10.3(c)
Directors
A

Board of Directors (profile)
section in the Annual Report
7.10.3(d)
Directors
Provide

7.10.4
(a-h)
Criteria for defining
Independence
Requirements

basis for the Board's determination
of Independent Director, if criteria
specified for Independence is not met
Compliance
Status
brief resumé of each Director should
be included in the Annual Report and
should include the Directors areas of
expertise
a brief resumé of new Directors
appointed to the Board with details
specified in 7.10.3(a), (b) and (c) to the
Colombo Stock Exchange
Independent
for meeting criteria to be
64
CSE
Rule No.
Subject
7.10.5
Human Resources and
Compensation Committee
A

7.10.5(a)
Composition of Human
Resources and
Shall

7.10.5.(b)
Functions of Human
Resources and
The

7.10.5.(c)
Disclosure in the Annual
Report relating to
Human Resources and
Names
of Directors comprising the
Committee
Statement of Remuneration Policy
Aggregated remuneration paid to
Executive and Non–Executive Directors

and the Board of Directors
Reports
listed Company shall have a
Remuneration Committee. The
Remuneration Committee of the listed
Parent Company may function as the
Remuneration Committee
comprise of Non–Executive
Directors, a majority of whom will be
Independent
Human Resources and
Compensation Committee shall
recommend the remuneration of the
Chief Executive Officer and Executive
Directors
Compliance
Status
Annual Report

7.10.6
Audit Committee
The

7.10.6(a)
Composition of Audit
Committee
Shall

Reports
Company shall have an Audit
Committee
comprise of Non–Executive
Directors a majority of whom will be
Independent
A Non–Executive Director shall be
appointed as the Chairman of the
Committee
General Manager, President and
Financial Controller should attend Audit
Committee Meetings
The Chairman of the Audit Committee or
one member should be a member of a
professional accounting body



CSE
Rule No.
Subject
7.10.6(b)
Audit Committee Functions
Overseeing of the
Preparation, presentation and
adequacy of disclosures in the Financial
Statements in accordance with Sri
Lanka Accounting Standards(SLFRS/
LKAS)
Compliance with financial reporting
requirements, information requirements
of the Companies Act and other relevant
financial reporting related regulations
and requirements
Processes to ensure that the internal
controls and risk management are
adequate to meet the requirements of
the Sri Lanka Auditing Standards
Assessment of the independence and
performance of the external auditors
Make recommendations to the
Board pertaining to appointment, reappointment and removal of external
auditors, and approve the remuneration
and terms of engagement of the external
auditor
7.10.6(c)
65
Disclosure in Annual Report
relating to Audit Committee
Names
of Directors comprising the Audit
Committee
The Audit Committee shall make a
determination of the independence of
the Auditors and disclose the basis for
such determination
The Annual Report shall contain a
Report of the Audit Committee setting
out of the manner of compliance with
their functions
Compliance
Status

Annual Report
Reports







Corporate Governance and
the Audit Committee Report
Code of Best Practice of Corporate Governance Jointly Issued by the Securities and Exchange Commission of Sri Lanka
(SEC) and Institute of Chartered Accountants of Sri Lanka (ICASL)
(Issued on 1st July 2008 and includes amendments to date)
Compliant

Code Ref.
Non Compliant
Subject

Applicable Requirement Status
Compliance
Applicable Section in
the Annual Report
A. Directors
A.1 The Board
66
A.1
The Board
Company
to be headed by an effective
Board to direct and control the
Company

A.1.1
Frequency of Board
Meetings
Board

Corporate Governance/
Annual Report of the Board
of Directors
A.1.2
Responsibilities of the Board Formulation and implementation of
strategy
Skill adequacy of management and
succession
Integrity of information, internal controls
and risk management
Compliance with laws, regulations and
ethical standards
Code of conduct
Adoption of appropriate accounting
policies

should meet regularly, at least
once every quarter
to obtain Independent
professional advice when deemed
necessary





A.1.3
Access to professional
advice
Procedure

A.1.4
Company Secretary
Ensure
adherence to Board procedures
and applicable rules and regulations
Procedure for Directors to access
services of Company Secretary

Directors

should exercise independent
judgment on issues of strategy,
resources, performance and standards
of business judgment

A.1.5
Independent Judgment
A.1.6
Dedication of adequate time Directors should devote adequate
and effort by Directors
time and effort to discharge their
responsibilities to the Company
satisfactorily

A.1.7
Board and training

Directors
should receive appropriate
induction, training, hone skills and
expand knowledge to more effectively
perform duties
Code Ref.
Subject
Compliance
the Annual Report
A

Chairman

Board

A.2 Chairman and Chief Executive Officer
A.2.1
Justification for combining
the roles of the Chairman
and the CEO
balance of power and authority to be
maintained by separating responsibility
for conducting Board business from
that of executive decision making
A.3 Chairman’s Role
A.3.1
Ensure good corporate
governance
to preserve order and
facilitate effective discharge of Board
functions by proper conduct of Board
meetings
A.4 Financial Acumen
A.4.1
Possession of adequate
financial acumen
to ensure adequacy of financial
acumen and knowledge within the
Board
A.5 Board Balance
67
A.5.1
Composition of Board
The

A.5.2
Proportion of Independent
Directors
Two

A.5.3
Test of Independence
Independent

A.5.4
Declaration of
Independence
Non-Executive

Corporate Governance /
of Directors
A.5.5
Annual determination of
criteria of independence/
non-independence and
declaration of same by
Board
The

A.5.6
Appointment of an alternate
Director
If
N/A
A.5.7
Appointment of Senior
Independent Director (SID)
If
N/A
A.5.8
Availability of Senior
Independent Director to
other Directors
If
N/A
Board should include a sufficient
number of Non-Executive Independent
Directors
or one third of the Non-Executive
Directors should be independent
Directors should be
independent of management and free
of any business or other relationship
that could materially interfere with the
exercise of unfettered and independent
judgment
Directors should submit
a signed and dated declaration of their
independence/non-independence
Board should annually determine
and disclose the names of Directors
deemed to be Independent
an alternate Director is appointed by a
Non-Executive Director, such alternate
Director should not be an executive of
the company
the roles of Chairman/CEO are
combined, a Non-Executive Director
should be appointed as a Senior
Independent Director
warranted, the SID should be
available to the other Directors for
confidential discussions
Code Ref.
Subject
Compliance
the Annual Report
A.5.9
Interaction between
Chairman and NonExecutive, Independent
Directors
The

A.5.10
Directors concerns to be
recorded
When
N/A
Chairman should meet the NonExecutive Independent Directors at
least once a year
matters are not unanimously
resolved, Directors to ensure their
concerns are recorded in Board
minutes
A.6 Supply of Information
A.6.1
Provision of adequate
information to Board
Management
to ensure the Board is
provided with timely and appropriate
information

A.6.2
Adequacy of notice
and formal agenda to
be discussed at Board
meetings
Board

minutes, agenda and papers
should be circulated at least seven
days before the Board meeting
A.7 Appointment to the Board
A.7
Appointments to the Board
Formal
and transparent procedure for
Board appointments

A.7.1
Nomination Committee
Nomination

A.7.2
Annual assessment of
Board composition
Nomination

A.7.3
Disclosure of new Board
appointments
Profiles

Notice of Meeting
committee of the ultimate
Parent Company may function as
such for the Company and make
recommendations to the Board on new
Board appointments
committee of Board should
annually assess the composition of
Board
of new Board appointments to
be communicated to Shareholders
A.8 Re-election
A.8.1
Appointment of NonExecutive Directors
Appointment
of Non-Executive
Directors should be for specified
terms and re-election should not be
automatic

of Directors
A.8.2
Shareholders approval of
appointment of all Directors
The

of Directors/ Notice of
Meeting
The

appointment of all Directors should
be subject to election by Shareholders
at the first opportunity
A.9 Appraisal of Board Performance
A.9.1
68
Annual appraisal of Board
performance
Board should annually appraise
how effectively it has discharged its key
responsibilities
Code Ref.
Subject
Compliance
the Annual Report
A.9.2
Self evaluation of Board and The Board should evaluate its
performance and that of its committees
Board Committee
annually

Audit Committee Report
A.9.3
Declaration of basis of
performance evaluation

Annual

Board of Directors profiles
section
A.11.1
The Board should set out the short,
Short, medium and long
medium and long-term financial
term, financial and nonand non-financial objectives at the
financial objectives to be set
commencement of each year

A.11.2
Evaluation of CEO
performance
The

The
Board should disclose how
performance evaluations have been
carried out
A.10 Disclosure of Information in respect of Directors
A.10.1
Profiles of the Board of
Directors
Report should disclose the
biographical details of Directors
A.11 Appraisal of Chief Executive Officer
performance of the CEO should
be evaluated by the Board at the end
of the year
B. Directors Remuneration
B.1 Remuneration Procedure
69
B.1.1
Appointment of
Remuneration

B.1.2
Composition of
Remuneration

B.1.3
Disclosure of members of
The

B.1.4
Remuneration of NonExecutive Directors
Board

B.1.5
Access to professional
advice
Remuneration

Committee of Parent
may function as such for the Company
to make recommendations on
Director's remuneration
Committee should
consist exclusively of Non-Executive
Directors
Annual Report should disclose the
Chairman and Directors who serve on
the Remuneration Committee
to determine the level of
remuneration of Non-Executive
Directors
Committee should have
access to professional advice in order
to determine appropriate remuneration
for Executive Directors
Code Ref.
Subject
Compliance
the Annual Report
should be structured to
attract, retain and motivate Executive
Directors
Packages should be comparable and
relative to that of other companies as
well as the relative performance of the
company
When determining annual increases
remuneration committee should
be sensitive to that of other Group
companies
Performance related elements of
remuneration should be aligned with
interests of Company

B.2 Level and Make up of Remuneration
B.2.1 to
B.2.4
Performance related
elements in pay structure
and alignment to industry
practices
Packages



B.2.5
Share options
Executive

B.2.9
Remuneration packages for
Non-Executive Directors
Should

The

Financial Statements
share options should not be
offered at a discount
reflect time, commitment and
responsibilities of role and in line with
existing market practice
B.3 Disclosure of Remuneration
B.3.1
Disclosure of details of
remuneration
remuneration paid to Directors
C. Relations with Shareholders
C.1 Constructive Use and Conduct of Annual General Meeting
C.1.1
Proxy votes to be counted
The
company should count and
indicate the level of proxies lodged
for and against in respect of each
resolution

C.1.2
Separate resolutions
Separate

Notice of Meeting
C.1.3
Availability of Committee
Chairman at AGM
The

C.1.4
Notice of AGM
15

Notice of Meeting
C.1.5
Procedure for voting at
meetings
Company

Notice of Meeting
resolutions should be
proposed for substantially separate
issues
Chairman of Board Committee
should be available to answer any
queries at AGM
working days notice to be given to
shareholders
to circulate the procedure for
voting with Notice of Meeting
C.2 Communication with Shareholders
70
C.2.1
Chanel of Communication
Channel

C.2.2 –
C.2.7
Policy and Methodology of
Communication
Policy

to reach all shareholders to
disseminate timely information
and Methodology of
communication with shareholders and
implementation
Code Ref.
Subject
Compliance
the Annual Report
C.3 Major and Material Transactions
C.3.1
Disclosure of Major
Transactions
Disclosure
for all material facts involving
all material transactions including
related party transactions

Notes to the Financial
Statements

Risk Management/
D. Accountability and Audit
D.1 Financial Reporting
71
D.1.1
Presentation of Public
Reports
Should
be balanced, understandable
and comply with statutory and
regulatory requirements
D.1.2
Directors' Report
The Directors' Report should be included in
the Annual Report and confirm that :
The Company has not contravened
laws or regulations in conducting its
activities
Material interests in contracts have
been declared by Directors
The Company has endeavoured
to ensure equitable treatment of
shareholders
That there is reasonable assurance
of the effectiveness of the existing
business systems following a review of
the internal controls covering financial,
operational and compliance
That the business is a “going concern”



of Directors
of Directors

Audit Committee Report/
Risk Management

of Directors
D.1.3
Respective responsibilities
of Directors and Auditors
The

Respective responsibilities
of the Directors and
Auditors
D.1.4
Management Discussion
and Analysis
Annual

Management Discussion
D.1.5
Going Concern
Directors

of Directors
D.1.6
Serious Loss of Capital
Directors
N/A
D.1.7
Related Party Transactions
Disclosure

Annual Report should contain
separate statements setting out the
responsibilities of the Directors for the
preparation and presentation of the
Financial Statements and the reporting
responsibilities of the Auditors
report to include section on
to substantiate and report
that the business is a going concern or
qualify accordingly
to summon an Extraordinary
General Meeting in the event that the
net assets of the Company falls below
50% of the value of Shareholders
Funds
of Related Party
Transactions
Notes to the Financial
Statements
Code Ref.
Subject
Compliance
the Annual Report
D.2 Internal Control
D.2.1
Effectiveness of system of
internal controls
Directors
to annually conduct a review
of the effectiveness of the system of
internal controls. This responsibility may
be delegated to the Audit Committee

Audit Committee Report/
Risk Management
D.2.2
Internal Audit Function
The

D.2.3D.2.4
Continuity of Internal control
Maintaining
a sound system of internal

comprise a minimum of two
independent, Non-Executive Directors
Audit Committee Chairman should be
appointed by the Board

internal audit function in Group
companies is not outsourced to the
external auditor of that company in
a further attempt to ensure external
auditor independence
control
D.3 Audit Committee
D.3.1
D.3.2
Chairman and Composition
of Audit Committee
Duties of Audit Committee
Should
Should include
Review of scope and results of audit
and its effectiveness
Independence and objectivity of the
Auditors



D.3.3
Terms of Reference /
Charter
The

D.3.4
Disclosure
The



Audit Committee

Audit Committee should have
a written Terms of Reference which
define the purpose of the Committee
and its duties and responsibilities
names of Directors serving on the Audit
Committee
The Audit Committee should determine
the independence of the Auditors
and disclose the basis of such
determination
The Annual Report should contain a
report by the Audit Committee setting
out the manner of the compliance of
the Company during the period to
which the Report relates
D.4 Code of Business Conduct and Ethics
D.4.1
72
Adoption of Code of
Business Conduct and
Ethics
The
Company must adopt a Code
of Business Conduct and Ethics for
Directors and members of the senior
management team and promptly
disclose any violation of the Code
Code Ref.
Subject
Compliance
the Annual Report
D.4.2
Chairman’s affirmation
The

Chairman’s Statement/
Director's Report
The

Annual Report must include an
affirmation by the Chairman that he
is not aware of any violation of the
provision of the Code of Conduct
D.5 Corporate Governance Disclosures
D.5.1
Report
Annual Report should include
a report setting out the manner and
extent to which the Company has
adopted the principals and provisions
of the Code of Best Practice on
E. Institutional Investors
E.1 Structured Dialogue
E.1.1
Structured Dialogue with
Shareholders
A
regular and structured dialogue
should be conducted with shareholders
and the outcome of such dialogue
should be communicated to the Board
by the Chairman

E.2
Evaluation of Governance
Disclosure by Institutional
Investors
Institutional

investors should be
encouraged to consider the relevant
factors drawn to their attention
with regard to Board structure and
composition
F. Other Investors
F.1
Individual Investors
Individual
shareholders should be
encouraged to carry out adequate
analysis and seek professional advice
when making their investment/
divestment decisions

F.2
Shareholder Voting
Individual

Form of Proxy
Disclosure

Annual ReportSustainability Report
shareholders should be
encouraged to participate in General
Meetings of companies and exercise
their voting rights.
G. Sustainability Reporting
G.1-G.1.7
73
Sustainability Reporting
on adherence to
sustainability principles
sustainability
report
Sustainability report
Reporting Principles and Guidelines: Global Reporting Initiatives (GRI)
This sustainability report has been compiled in accordance with Global Reporting
Initiatives (GRI) for sustainable reporting. By adhering to these globally accepted
parameters, Asian Hotels and Properties PLC (AHPPLC), aims to conform to the
disclosure requirements for economic, social and environmental criteria that are impacted
by the company’s commercial operations.
Report Boundary and Scope
This report has been compiled in conformity with GRI G3.1 level B compliance criteria.
The report covers the company’s activities for the period beginning from 01st April
2013 to 31st March 2014 and includes aspects covered at Cinnamon Grand Colombo,
AHPPLC’s flagship brand. In captioning the information, every effort has been made
towards achieving completeness of the report as much as possible in accordance with
the GRI guidelines.
Materiality
Materiality is an important aspect of the GRI reporting guidelines. Accordingly, this
report attempts to quantify the material impact of the company’s activities on social,
environmental and economic aspects and qualify its influence on various organisational
stakeholders. Listed below, in order of priority, are the key GRI indicators that are relevant
for the company.
Relevance to stakeholders and the environment
High Materiality
Medium Materiality
76
LA1, LA2, LA7, LA8
LA10, EN8, SO1, HR6, LA12, LA13,
EN23, EC8
Relevance to the Company
EN3, EN4, EN5, EN11, EN12, EN16, EN22, EN28, PR3, PR6, PR9, SO2, EC1, EC3, EC6
Operating Structure of The Organisation
General Manager
Director Rooms
Division
Manager
Marketing
Communications
& Sustainability
Executive
Housekeeper
Chief Engineer
Front Office
Manager
Deputy Executive
Housekeeper
77
Director Human
Resources
Human Resources
Manager
Director Security
Director Sales
Executive Chef
Assistant Director
Sales
Director Finance
Manager
Restaurant & Bars
Chief Accountant
Manager F&B
(Banquets)
Purchasing
Manager
Sustainability report contd.
Awards and Accolades
AHPPLC
Annual Report Award
The AHPPLC Annual Report won Silver at
the Annual Report Awards 2013 organised
by the Institute of Chartered Accountants
of Sri Lanka (CA Sri Lanka) for Diversified
Holdings with up to Five Subsidiaries.
Cinnamon lakeside Colombo
2013/14
Awards
Awarded
'A+' Grade at the Hotel
Hygiene Classification Audit 2013
conducted by the Colombo Municipal
Council.
Received 5 Crowns out of 5 at the
Indexpo Crowns for Food Hygiene
Awards Ceremony 2013.
Winner (Classic Category) - Colombo
Region Marie Brizard Cocktail
Competition 2013.
Winner and Runner up (Flair Category)
− Colombo Region Marie Brizard
Cocktail Competition 2013.
Winner (Classic Category) – Midori
Cocktail Competition 2013.
Merit award at the EU Switch-Asia
Greening Sri Lankan Hotels Awards
2013.
Certificate of Excellence 2013 by
TripAdvisor LLC.
Bronze Award – Hotel Companies
Category at the Annual Report Awards
2013 conducted by CA Sri Lanka.
Awarded A+ Grade Kitchen at the City
Food Safety High Achievers Awards
Ceremony organised by the Colombo
Municipal Council.
78
2013/14
Awards
Sri
Lanka National Energy
Efficiency Award
Cinnamon Grand Colombo once again
was awarded a Merit Award at this year’s
National Energy Efficiency Awards 2013.
This is the second year in succession for
the hotel to be awarded this prestigious
award. Notably, Cinnamon Grand was the
only city hotel to receive such an award
in the large-scale hotel sector category.
The awards, organised by the Sri Lanka
National Energy Efficiency Awards
(SLNEEA) recognise commitment towards
energy efficiency and management.
Merit
Award at The EU-SWITCH –
Asia Greening Hotels Award
On the 14th of October 2013, the
Cinnamon Grand was conferred the Merit
Award at the EU Switch Asia Greening
Hotel Awards 2013. This is a significant
achievement in light that Cinnamon Grand
is a city hotel operating in the middle of a
concrete jungle as well as being one of
only three city hotels to be bestowed with
this award. We are proud to say that this is
the second consecutive year that we have
received this award.
John
Keells Chairman’s Award for
Sustainability
The Annual Award for Sustainability
presented at the JK Chairman’s Awards
for 2012/13 on 8th November 2013
was awarded to Cinnamon Grand in
recognition of the hotel’s outstanding
efforts in the sphere of sustainability.
Certification
and appointment of Chief
Engineer of Cinnamon Grand Panduka
Wijeyawardena as ‘Energy Manager’
for Cinnamon Grand property by
the Sri Lanka Sustainable Energy
Authority.
Recertifications
Green
Globe Recertification
Green Globe Certification (by Green Globe
Certification, Los Angeles) Cinnamon
Grand has been conferred with the Green
Globe re-certification following a two day
audit by Green Globe auditors. The hotel
was audited and measured on relevant
compliance indicators for the Green Globe
Certification with key indicators on energy
usage, water and waste management,
employee training to implementation
of customer satisfaction measures,
community support and awareness
initiatives.
Green Globe Certification is the
worldwide sustainability system based
on internationally-accepted criteria for
sustainable operation and management
of travel and tourism businesses.
Operating under a worldwide licence,
Green Globe is based in California, USA
and is represented in 83 countries. The
Green Globe brand represents the best in
sustainable practice within the travel and
tourism sector and provides certification,
training and marketing services.
ISO
Recertification for OHSAS
18001, ISO 14001 and ISO 22000
(Swiss accreditation by SGS Lanka (Pvt)
Ltd) – the Cinnamon Grand is the first 5
-star city hotel in Sri Lanka to receive and
maintain uninterrupted ISO certification for
the past 8 years.
Carbon
Neutral Recertification for
Nuga Gama
Recertification of Nuga Gama Carbon
Neutral Certificate by Carbon Consulting
Company.
Nuga Gama is the first venue in Asia to
receive an accolade of this nature. The
certification was handed over by world
renowned physicist and climatologist
as well as Vice Chairman of the
Intergovernmental Panel on Climate
Change and 2007 Nobel Laureate
Professor Mohan Munasinghe.
Absolut
Bartender Cocktail
Challenge
F&B Team Supervisor A.M.D. Sampath
was placed second runner up at Absolut
Bartender Cocktail Challenge 2013classic category.
Rockland
and Midori Bartender
Challenge
Dinithi Siriwardena from F&B was the first
runner up at the Rockland and Midori
Bartender Challenge 2013, Cocktail
Competition.
City
TripAdvisor
Certificate of
Excellence
Certificate of Excellence 2013 by
TripAdvisor LLC.
Audits
Central
Environmental audit for
National Green Awards 2013.
Sustainable Energy Authority audit for
Sri Lanka National Energy Efficiency
Awards 2012.
Assessment done by Carbon
Consultant Company for Nuga Gama
Carbon Neutral Certification.
ISO Surveillance Audit for the year
2013 held in August 2013.
Awarded 'A+' Grade at the Hotel
Hygiene Classification Audit 2013
conducted by the Colombo Municipal
Council.
Culinary Awards
15th
Culinary Art Competition
Received 5 Crowns out of 5 at the
Indexpo Crowns for Food Hygiene Awards
Ceremony 2013. Cinnamon Grand’s
Chefs’ team brought home 13 Gold, 12
Silver and 18 Bronze medals and won
the titles as the ‘Best City Hotel’ and was
place second runner up ‘Best Hotel Team’
at the 15th Culinary Art Competition 2013,
organised by Chefs’ Guild Colombo.
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Food Safety High Achievers
Awards
Awarded A+ Grade Kitchen at the City
Food Safety High Achievers Awards
Ceremony organised by the Colombo
Municipal Council.
Sports Awards
Mercantile
Basketball
Championship
Cinnamon Grand’s associate Lakshan
Samarasinghe part of the Sales and
Marketing Team brought the hotel pride
by captaining the John Keells Group
Basketball team at the Mercantile
Basketball Championship 2013 and
leading the team to victory. He was also
recognised as the ‘Best Player of the
Twournament’.
John
Keells Inter Company Rugby
7s
Runner up at the John Keells Inter
Company Rugby 7s 2013.
John
Keells Inter Company
Swimming Championship
Third place at the John Keells Inter
Company Swimming Championship 2013.
Travel
Trade Soccer 7s
Semi-finalist at the Travel Trade Soccer 7s
2013.
JKH
Inter Company Soccer 7s
Runners up at the JKH Inter Company
Soccer 7s 2013.
Mercantile
Athletic Championship
Two Gold medals and one Silver medal
at the Mercantile Athletic Championship
2013.
Sri
Lanka Rugby Squad
Mekalanka Promoda of Cinnamon Grand
was chosen to the Sri Lanka Rugby
Squad in September 2013.
Membership in Industry Associations
Sri
Lanka Conventions Bureau
Chaine des Rotisseur: Echo, the
Italian restaurant and The London Grill,
the hotels Fine Dining restaurant are
certified members.
Tourist Hotel Association of Sri Lanka.
Ceylon Chamber of Commerce.
Pacific Asia Travel Association (PATA).
Indo-Lanka Chamber of Commerce.
AMCHAM.
SKAL International (International
Association of Travel and Tourism
Professionals).
Sri Lanka-British Business Council.
Sri Lanka-Japan Business Council.
Sri Lanka-New Zealand Business
Council.
Sri Lanka-Malaysia Business Council.
Field Ornithology Group of Sri Lanka.
La
Accolades
John Keells Chairman’s Award for Sustainability – General Manager Rohan Karr, Manager Marketing Communications and
Sustainability Tharika Goonathilake and Chief Engineer Panduka Wijewardena
• Cinnamon Grand Director Finance Shanaka Silva receiving the Silver at the Annual Report Awards 2013 for the AHPPLC
Annual Report organised by the Institute of Charted Accountants of Sri Lanka for Diversified Holdings with up to Five
Subsidiaries.
• Cinnamon Grand Engineering Team at the Energy Efficiency Awards 2013 winning the merit award
• Merit award at the EU Switch Asia Greening Hotel Award – Compliance, Health and Safety Manager Rajitha Amarasinghe,
Chief Engineer Panduka Wijewardena and Assistant Chief Engineer Sudarman Perera
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Accolades (f&b)
Team that brought home the title of ‘Best City Hotel Team’ and second runner up 'Best Hotel Team' at 15th Culinary Art Competition
2013, organised by Chefs Guild of Colombo
• Dinithi Siriwardena from F&B was the first runner up at Rockland and Midori Bartender Challenge 2013 Cocktail Competition
• Chef Sujith Ariyarathne with his Gold medal for ‘Live Cooking Five Course Meal’ at the Culinary Art Competition 2013
• F&B Team Supervisor A.M.D. Sampath with his second runner up award at 2013 Absolut Bartender Cocktail Challenge in the
classic category
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Precautionary Principle
AHPPLC is influenced by the
precautionary principle in its endeavour
to preserve the environment and contain
the impact of its operations on the
local communities. The precautionary
principle is highlighted by the continuous
success of our initiatives in improving
our environment, reducing our energy
consumption and Carbon Footprint and
embedding our social responsibility in all
employees. Through our risk management
processes and internal control systems,
we have adhered to the precautionary
principle. We have incorporated the triple
bottom line principles in our practices and
performance. We have also obtained ISO
14001, ISO 22000, OHSAS 18001, and
Green Globe, Earthcheck benchmarking
and Carbon Neutral certifications. From
a corporate governance perspective,
we ensure that we meet the regulatory
requirements and are compliant with
external rules and codes that include
the listing rules of the Colombo Stock
Exchange and all provisions of the Code
of Governance of the Institute of Chartered
Accountants of Sri Lanka.
Data Measurement Techniques
In all areas of operation, data
measurement and data collation is a daily
process; and the point of data entry is in
the form of logbooks and log sheets while
recordings are carried out on a daily basis.
Data is collated on a monthly basis for
reporting purposes, which are analysed
monthly, after which a quarterly report is
prepared.
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Strategy and Focus
Our sustainability ethos demands that we act as value creators to the community by
facilitating enduring social change across a wide stratum of society. In pursuance of
these goals, we have witnessed our sustainability philosophy evolving into a meticulous
code of ethics that now pervades into all spheres of our business on a day-to-day-basis.
Core Competencies
Superior
Brand Value
JKH Group
Synergies
Dynamic,
Innovative
Culture
Market
Leadership
Employer of
Choice in the
Industry
Vision
We will always be the Hospitality Trendsetter
Primary Business Focus
To be the best Sustainable Five Star City Hotel by 2015
Sustainability Pledge
I will be Green
Commitment to Excellence
I will be careful
in the way I use
energy
I will be careful
in the way I use
water
I will reduce food
waste
I will not to
pollute
I CAN MAKE A DIFFERENCE
I will reduce,
reuse, recycle
Sustainability Stewardship
Led by the General Manager, Cinnamon Grand Colombo follows a top-down approach to sustainability stewardship, where a fully
integrated sustainability policy promotes a positive attitude and a dynamic approach strengthened by a traditional organisational value
culture. Aligned with the overall vision of the JK Leisure Sector, the Cinnamon Grand is guided by the vision 'To be the Best Sustainable
Five Star City Hotel by 2015'. Moreover, a dedicated sustainability team drives all sustainability initiatives at Cinnamon Grand supported
by a special Green Team, comprising of members from cross functional disciplines. The Green Team maps areas pertinent to all
aspects of the business.
Cinnamon Grand Vision
To be ranked as the Best Five Star Sustainable City Hotel in Sri Lanka by 2015
Target
To Reduce the Carbon Footprint of the Hotel by 5% by March 2014
Head of Sustainability
Green Team
Electricity
Conservation
Team
To promote a
5% year-on-year
reduction in the
hotel’s electricity
consumption
83
Water
Management
Team
To promote 10%
year-on-year
reduction in the
hotels water
consumption
Recycling
Team
Food Waste
Reduction
To increase
the amount of
recycling items
and weightage
by 20%
(products used
by the hotel) and
reduce landfill
To generate a
20% reduction in
food waste at the
hotel
Communication
& Awareness
Team
Special
Community
Projects Team
To create
awareness and
a green mindset amongst
associates
and assist in
reduction targets
Identify and
implement
community projects
that have a positive
impact on social,
environmental and
economic aspects
as per stakeholder
feedback
Identifying Risks and Opportunities
In achieving sustainability goals the company strives to understand the risks and opportunities that arise from each Triple Bottom Line
(TBL) indicator. The detailed blueprint outlined below aims to pre-empt potential impacts and thereby help trigger policy level activations
that support sustainability initiatives to fuel meaningful change for the future.
Key Impacts, Risks and Opportunities
Triple
Challenges
Bottom Line (Potential
Impact)
Risks/
Opportunities
Social
Risk: Under Training and
development for
developed human
enhancement of skills
capital
Opportunity:
Promote social
Empower human
inclusiveness
through the hotel’s
capital through skills
product and service
development
offering as well
Risk: Social
as sustainability
alienation
initiatives
Opportunity: Greater
social engagement Provide increased
to promote wealth
financial access for
creation
rural communities
Youth
Risk : Change in
weather patterns
that pose a threat to
livelihoods
Risk: Depletion
of biodiversity and
loss of eco systems
that are a danger to
national and global
welfare
Opportunity: The
growing need for
green hotels
Opportunity:
Reduced carbon
footprint to become
a ‘green hospitality
institution’
Opportunity:
Promote green
practices to lower
long-term energy
and overhead costs
Implementation
Social
Development
Environmental Global
Warming
Biodiversity
and Eco
Systems
Environmental
Degradation
84
Engagement Approach
Seek
alternative
energy sources and
minimise usage
Protection of
biodiversity in
partnership with the
Field Ornithology
Group of Sri Lanka
Construction of
‘green buildings’ to
minimise impact of
the operations to the
environment
Green procurement
policy
Process Undertaken
empowerment and women's
empowerment
Industrial training for chefs through tourism
hospitality management
Donation to social groups
Community development projects
Develop creativity and skills workshops for
children
of the Green Policy
of audits to minimise the
waste at the hotel
Adoption of the 3R concept (Reduce,
Reuse and Recycle)
Promote green buildings. Eg: Nuga Gama
Education and awareness for suppliers to
encourage them to adopt green practices
Collaboration with the Field Ornithology
Group of Sri Lanka to protect biodiversity
Conduct awareness and education
programmes for hotel associates
through seminars, posters, social media,
environmental videos and hotel green
corridor
Improve customer awareness through print
and social media
Promote green practices among children
through cultural tours and cultural
educational workshops at Nuga Gama
Investigating alternative energy sources at
the preliminary testing stage
Initiatives to promote energy and water
conservation together with effective waste
management practices
Implementation
Triple
Challenges
Bottom Line (Potential
Impact)
Economic
Community
Empowerment
National
Wealth
Creation
Inculcating
Behavioural
Changes and
Instilling Values
85
Risks/
Opportunities
Engagement Approach
Risk: City-centric
employment
Opportunity:
Integration of rural
economy through
local employment
Risk: Inward
looking business
model
Opportunity:
Customer-centric
approach
Opportunity: Act
as a catalyst in
changing values
and behaviours
Opportunity:
Capacity building
for micro and SME
suppliers in line with
a forward-looking
strategy
A
Process Undertaken
comprehensive
Island-wide recruitment drive
Ensuring all products and services are
employment policy
aligned to the tourism industry priorities
to ensure adequate
skills development for SME focused product development
workshops in line with National Cleaner
the preservation and
Production Center guidelines
development of the
hospitality/tourism
industry
Business strategy
that has the
bandwidth to evolve
with national tourism
development
Specific customer
development
programmes
aimed at nurturing
relationships
Product development
Programmes aimed
at instilling values
vital for sustainable
production of goods
and services
Stakeholder Mapping and Engagement Process
The aim of engineering a sustainable business platform has led to the understanding that this cannot be achieved in isolation. The
company believes a holistic approach is the key to ensuring its sustainability ethos, which is deposited across the value chain encircling
all business partners and stakeholders. Through an extensive stakeholder mapping exercise the company has devised a suitable
engagement curriculum to inculcate the company’s unique value proposition to all corporate stakeholder groups as outlined below.
Stakeholder Engagement
Identification of Issues
Categorisation of Issues
Customers
Associates
Community
Suppliers
Government
Addressing of Material Issues
(By the Sustainability Department and Green Team)
Setting Goals and Objectives to Redress Identified Issues
(By General Manager)
Implementation and Monitoring
(By the Head of Sustainability and Green Team Project Champions)
86
Society Pressure
Groups/Media
Stakeholder
Stakeholder Sub-Category
Current Level of Engagement and Frequency
Materiality of Stakeholder
Issues
Customers
Adults
Level of Engagement:
Awareness campaigns through press releases,
posters, social media, fundraising for the Field
Ornithology Group and Cancer Hospital, donations
for social groups, participation of international
environmental/tourism events, end-user surveys,
booker surveys.
1. Rate fixing
2. Ethical products
3. Carbon Footprint
4. Ethical marketing
5.Corporate
community
engagement
6. Health and safety
Frequency of Engagement:
feedback
Guest Comment Cards on a daily basis in rooms
and restaurants
Feedback and reviews on TripAdvisor
Duty Manager's Log
Restaurant log books
Bi-annual personal meetings
Weekly awareness through press releases,
posters, social media
Annually: Fundraising for Cancer Hospital,
participation in international environmental events
Annual Secretaries’ Party
Media nights
Daily sales visits
Entertainment of clients and patrons
Face-to-face
Children
Awareness and education through print media and
cultural education through site visits, children’s
workshops according to the environmental
calendar, road shows and trade fairs for kids.
cultural and educational visits to Nuga
Gama
Children’s workshops according to an
environmental calendar
Annual road shows and trade fairs for kids
Kiddies events feedback form
Weekly newsletter
Monthly
87
Stakeholder
Issues
Associates
Managers, Executives and
Non-Executives
Participation in the green corridor campaigns,
green forum, direct reporting, open door policy,
annual events, training and development activities,
sustainability awareness seminars, celebrations of
international environmental calendar dates, employee
satisfaction surveys, intranet communication,
competitions and quarterly associate meeting.
7.Accommodation
8. Basic salary
9. Employee awareness
and training
10.Employee rewards and
remuneration
11. Occupational health and
safety
12. Emissions, effluences
and waste
13.Mutually beneficial
relationship with supplier
14. Gender related society
discriminations
meetings, updates on sustainability notice
board, green corridor and internet
Monthly poster campaigns, initiative awareness
and educational sessions
Monthly management meetings
Staff quarterly meetings
Mid-year review
Annual performance review
Annual gatherings, parties and sports events
Green idea box
Custom made training programmes and
development activities according to sustainability
guidelines.
Voice of Employee survey
Great Place To Work survey-GPTW
‘Tell GM’ box where associates can directly
communicate with the General Manager on issues
they face while working
Weekly
Business
Partners
Hotel School, Inbound/
Destination travels agents
Questionnaires and surveys, one-on-one meetings,
e-mail correspondence, circulars, membership in
industry associations.
contract renegotiations on-going through
conference calls, e-mails and circulars
Business travel
Trade shows
Experiential tours
Daily sales visits
Annual
88
15. Health and safety
16. Product diversity
17. Adhering to international
standards
18. Best practices
19. Community engagement
and Carbon Footprint
20. Confidentiality
Stakeholder
Issues
Community
Local Communities (schools,
monasteries, pre-schools,
hospitality related educational
institutions, home for elders
and conservation groups)
Awareness through posters, paintings, environmental
videos and education programmes, donations and
community development projects.
21.Infrastructure
development
22.Creating awareness for
youth
Engagement with the community is done prior to
initiating projects in the respective areas of focus:
Monthly awareness and education sessions for
schools
Bi-annual discussions for community development
projects
Special on-going school projects with monthly
meetings
Annual supplier sustainability awareness sessions
Awareness campaigns in key areas where
suppliers congregate
Annual donations to the Field Ornithology Group
Sponsorships of educational and social events
Arts and cultural activities
Familiarisation visits, training programmes and
specific hospitality career related training
Suppliers
One-on-one meetings, group meetings, awareness
sessions and collateral, environmental videos and
education programmes, donations and community
development projects, ethical purchasing policy,
flexibility of credit period, review of pricing, child
labour remediation policy, membership in industry
associations.
Promoting responsible tourism/products through
community related awareness activities that we
organise and in which we participate
Monthly review meetings
Awareness session on quality
Monthly price review meeting
Annually through contract renegotiations
89
23.Environmentally friendly
packaging
24.Resources scarcity
25.Awareness on
environmental issues
26.Ethical production
27. Child labour remediation
policy
Stakeholder
Issues
Government
Sri Lanka Tourist Board,
Sri Lanka Institute of Tourism
and Hotel Management,
Central Environmental
Authority, National Cleaner
Production Centre, Ceylon
Electricity Board, National
Water Supply and Drainage
Board, National Ozone
Unit, National Institute for
Occupational Safety and
Health, National Cancer
Hospital, National Cancer
Control Programme, Colombo
Municipal Council, Labour
Department and Sustainable
Energy Authority
Meetings, discussions, phone calls, presentations
and briefings, advisory meetings, membership on
the Sri Lanka Tourist Board, membership in the Sri
Lanka Hotel school training programme, awareness
workshops on tourism/sustainability related issues are
on-going processes with tourism related government
agencies.
28.Compliances/regulatory
restrictions
Society
Pressure
Groups/
Media
90
NGO, Media, Opinion
Leaders, Conservation
Organisations, Trade
Associations, Tourism
Associations, National Cancer
Control Programme
with these government bodies is an
on-going process through monthly newsletters,
e-mails, circulars, quarterly briefings, websites, etc
Senior Management is on the advisory board
of the Sri Lanka Institute of Tourism and Hotel
Management and visiting lecturers on a quarterly
basis
Engagement
Websites, press releases, media briefings,
correspondence, discussions, participation at NGO
forums
Engagement with these stakeholders is carried out on
an on-going basis through correspondence, websites,
media briefings and press releases (at least monthly)
29.Ethical business
practices
Stakeholder Initiatives for the year
Stakeholder Group:
Children
Children’s Holiday Workshops
The Cinnamon Grand’s Nuga Gama was
the venue for the first session of the Kids
Holiday Workshop held in August 2013.
Designed for children aged between 6
to 9 years, the full day session included
a host of fun, games, cookery, creativity
and learning. The workshop presented
children with an opportunity to understand
and appreciate traditional village life in a
safe and enjoyable manner. Encouraging
the youngsters to put away their high-tech
gadgetry for the day, the programme also
included a reality challenge game that
simulated a series of real life challenges,
which could be overcome only with the
right attitude and team spirit.
The 44 children who attended the
first workshop spent a pleasant day of
enjoyment, entertainment and education
learning about the many varieties of
indigenous flora found in rural Sri Lanka.
Moreover, a cookery demonstration was
conducted by Nuga Gama’s Chef Sujith,
who showed the children how to make
their own lotus shaped sweet roti as
well as a rambutan milkshake. A drama
workshop was also conducted by leading
theatre director Vinodh Senadheera to
encourage these youngsters to appreciate
theatre and the arts, while a range of
fun games and making of aesthetic
crafts using recyclable items were also
part of the day's activities. The session
concluded with food and drink, and a
calming yoga session.
91
Forming a part of the hotel’s Marketing
Communications and Sustainability
initiatives, the entertaining and enriching
holiday workshop was aimed at inculcating
in today’s children, an appreciation for
nature, culture and heritage of traditional
Sri Lankan village life.
Following the success of the first session,
a second programme was held towards
end August 2013; this time for 44 children
aged between 10 and 12 years. Following
a similar theme as the first workshop, this
programme also included a session on
‘Music, Song, Rhythm and Movement’
conducted by Soundarie David and
the acclaimed Soul Sounds Academy.
Meanwhile, the participants were also
provided an insight into the close links
between Sri Lanka’s wildlife and village life.
Offering a different career perspective, the
programme also had a session on 'How to
be a radio DJ' by Jimmy Deen.
Santa’s Workshop
During the Christmas season, the
Cinnamon Grand conducted its fifth
consecutive Santa’s workshop where
220 lucky children were able to discover
the magic inside Santa’s Workshop and
be a part of the magic and mystery of
Santa’s home and all the work that goes
on the night before Christmas. Starting
off their adventure in the elves’ costumes
closet, the children made themselves at
home thereafter with Santa’s family while
engaging in handcrafts and cookery
with the big man in the red suit, his wife
Mrs. Clause and the elves from Santa’s
toyshop, mailroom and kitchen.
Kids Workshop at Nuga Gama
Kids and the Grand team posing at the end of a successful Kids Holiday Workshop at Nuga Gama
• Showing off his recycled windmill made out of toilet paper rolls
• Nuga Gama Manager and Village Headsman Gamini Silva all smiles with kids at cookery demonstration for kids
• Introducing toys used in villages to city kids – a ‘kurumbatti’ machine
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Santa's workshop – a green Christmas
Cinnamon Grand team recreates Christmas Magic of Santa’s Home in the North Pole for the fifth consecutive year
• Kids learning the importance of recycling through craft
• At Santa’s Costume Closet
• All smiles with a Santa’s helper
93
Stakeholder Group:
Stakeholder Group:
Suppliers
Associates
Food Safety and Hygiene
The Sustainability Division and
Compliance, Health and Safety Division
of Cinnamon Grand organised a seminar
on the importance of food safety and
hygiene, while also stressing on other
critical areas that support the hotel's
commitment to being a sustainable
corporate entity. Among the key aspects
addressed were the delivery standards,
water conservation and the role of
suppliers in producing sustainable goods
and services for all stakeholders.
Attended by over 50 stakeholders
associated with the business, the session
focused on improving capabilities of the
stores, and the purchasing and receiving
department.
The participants, mainly suppliers were
encouraged to work parallel to the hotel’s
sustainability goals to embrace a more
environmentally conscious operational
model for their business. The programme
was also aligned to the theme for World
Tourism Day 2013, being ‘Tourism and
Water’. While highlighting the importance
of understanding the water footprint of
a business, speakers also focused on
creating awareness on the critical role
played by suppliers in ensuring overall
hygiene and safety standards of the
Cinnamon Grand’s products and services.
Water Conservation
Awareness was created on water
conservation for suppliers by displaying
posters at the loading bay.
94
Developing Sustainable Individuals
Cinnamon Grand’s Sustainability
Department launched an initiative
to educate and create awareness
amongst the hotel’s associates regarding
areas critical towards maintaining
the sustainability of the hotel. Entitled
‘Sustainability Short Takes’, a series of
policies and procedures were formulated
to ensure all associates strive to promote
sustainability as much as possible.
A simple, accessible and easy to
understand mechanism, these 'Short
Takes' cover topics relating to the hotel’s
projects and initiatives, while outlining
general sustainability information and
personal steps that can be taken to be a
more ‘green’ person. Each department
was, presented with a ‘sustainability short
take folder, which highlights the hotel’s
weekly short take focus. Further, a weekly
A/V was introduced at the Grand Café
every Monday, which corresponds to and
complements that week’s sustainability
short take.
Organic Vegetable Offering
Cinnamon Grand made available to
their associates the first harvest of the
Cinnamon Grand's Organic Garden at D.S
Senanayake College through a sale at the
Grand Café. This offered associates the
opportunity to purchase fresh vegetables
that were 100 per cent organic.
Commemorating Health and Safety
Week at Cinnamon Grand Colombo
Under the ageism of the Cinnamon
Grand’s Department of Health, Safety
and Compliance in collaboration with the
Ministry of Labour and Labour Relations,
a programme was conducted to create
awareness on safety at the work place.
The awareness campaign coincided with
the Health and Safety Week, declared
by the Ministry of Labour and Labour
Relations from the 3rd to the 12th of
October 2013.
Parallel to this initiative, a poster campaign
was also launched during the month,
following a series of special 'Short Takes'
on health and safety conducted for all
departmental staff at the hotel.
Improved Facilities
Endeavouring to improve hygienic
conditions for its associates, a new sink
was fixed in the hotel’s garbage room
so as to enable cleaners and workers to
wash hands properly.
Awareness on Carbon Neutral
Certification
An educational session on Carbon Neutral
Certification was held for the associates of
Cinnamon Grand by the Sri Lankan arm
of the Carbon Consultancy Company, so
as to be fully knowledgeable on the facts
pertaining to this certification.
Further Initiatives
A Delicious Waste Chefs Competition
and Energy Saving Seminar and a Waste
Management Seminar described in detail
later in the report were also conducted.
Developing Proactive Sustainability
Tools for Effective Governance
Focus on Enriching the Green Team
A learning forum was launched during the
year to instil in our members the importance of sustainability initiatives as well as
future strategies that will require the support of the Green Team members in different departments. Riding on the success
of the inaugural Monthly Learning Forum
in creating awareness on sustainability
related issues among members of the
Green Team, it has been decided to hold
these informative and knowledge sharing
sessions fortnightly. The first of these
programmes enlightened members on the
methods of reducing water and electricity
consumption. A team of representatives
of the Engineering Department presented
to the selected audience, general energy
facts in order to differentiate units (Cubic
Meter, KWh) consumed in electricity and
water in a household in contrast to its usage at the hotel. The agenda also covered
techniques of optimising the KW usage
of 8 household items, i.e. refrigerator, TV,
heater, ceiling fan, rice cooker, microwave,
100W bulb and PC. The programme also
emphasised the importance of water
purification and its impact on the hotel and
the wider environment.
Gifting the Book ‘Sustainable
Development and Climate Change
Made Easy’ to Green Team members
25 copies of the book titled 'Sustainable
Development and Climate Change Made
Easy' co-authored by Sria Munasinghe,
Vice President of MIND (Munasighe
Institute for Development) and wife of
Professor Mohan Munasinghe (2007
Nobel Laureate, world-renowned physicist
and climatologist and Vice Chairman of
the Intergovernmental Panel on Climate
Change) were gifted to the Cinnamon
Grand Green Team by General Manager
Rohan Karr.
Special Green Team Members were
Presented with ‘Green Champions’
Badge at the Associates Quarterly
Meeting
Cinnamon Grand’s associates who
went beyond their call of duty were
recognise at the Associates Quarterly
Meeting. The highlight of the event was
the presenting of the ‘Green Champions’
badge to members of the hotel’s Green
Team who proactively championed
95
projects which made a tangible difference
to the company, the society and the
world we live in. Rajitha Amarasinghe,
Rushani Jayakody, Sisira Katukurunda,
Amaranath Chandrasiri, D.P. Kumarasiri,
Liana Keragala, Gamini Silva, Deepika
Satyapala, Mahinda Wijeratne and
Anthony Lonappan were the recipients
of this recognition. The event was also a
platform where associates were briefed
on the company's progress and future
initiatives.
Creating a greener mindset
Our attentive Chefs at the Energy Saving Awareness Seminar
• Senior Public Relations Officer from National Water Supply and Drainage Board Sarathchandra Muthubanda addressing our staff
• Director National Cleaner Production Centre Sena Peiris during a seminar
• Director Renewable Energy Sustainable Energy Authority Sanath Kithsiri speaking at the Green Forum
96
First harvest
Organic Garden Project Champion Sisira Katukurunda and Chef Sujith Ariyarathne receiving the first harvest of School Organic Garden
Project from D.S. Senanayake College
• Organic Garden Project members Chef Sujith Ariyarathne, Sisira Katukurunda and Amaranath Chandrasiri handing over the harvest to
General Manager Rohan Karr
• D.S. Senanyake College Teacher-in-Charge of Agriculture Tamara Dissanyake with our project members
• Hotel associates purchasing organic harvest
97
Creating a green mindset at cinnamon grand
Green Team Member from Engineering Sudarman Perera sharing his knowledge on water and electricity conservation with Green Team
Members at the Learning Forum
• General Manager Rohan Karr handing over a book on ‘Sustainable Development and Climate Change Made Easy’ to Green Team
members
• Green Team on a food waste survey at the Grand Café
• General Manager Rohan Karr handing over a Green Champions Badge to D.P. Kumarisiri of Engineering at the Associates Quarterly
Meeting
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Stakeholder Group:
Guests
Offering Guilt-Free Dining
At Nuga Gama, the village in the city,
which pays tribute to Sri Lanka’s
indigenous culinary heritage, guests can
enjoy an authentic dining experience,
knowing that their indulgence will have a
minimum toll on the environment.
Banners to Bags (B2b) Initiative
Celebrates 4th Successive Year
A year’s worth of promotional banners
were recycled into durable, colourful
and trendy bags, in different sizes, for
different purposes as hotel’s B2b initiative
continued for its fourth successive year.
The immensely popular B2b products
were offered at a sale held on the 05th of
June at the hotel premises. The sale was
among the activities held by the hotel to
commemorate World Environment Day.
Proceeds from these sales amounting
to Rs. 22,530/- were directed to the
Children’s Ward of the Maharagama
Cancer Hospital.
Awareness Campaign on Green Travel
An awareness campaign was held for
guests on green travel and reducing their
water footprint.
Sustainability Awareness
The hotel’s Marketing Communications
and Sustainability Department developed
a flyer on sustainability and the hotel's
sustainability initiatives to keep their guests
informed and educated on the hotels
vision for sustainability. These flyers were
placed in all hotel rooms and distributed to
guests visiting the hotel and to associated
travel agents.
99
Further to convey the importance of
saving and recycling paper, Cinnamon
Grand launched an ambient message
communicated through the tissue
dispenser at the wash room at Cinnamon
Grand's Nuga Gama, Asia's first Carbon
Neutral® venue. The images indicate the
link between trees and the production
of paper through a pictorial reduction of
green in the island each time a tissue is
pulled out. This aims to create awareness
on the correlation between paper and
trees while encouraging responsible use
of paper.
Earth Hour Tribute
A unique and creative musical tribute
was designed to celebrate Earth Hour
2014. The tribute highlighted the need
to champion causes that strive to save
the planet, and power individuals that are
capable to influence that change. The
video clip titled `Be an Earth Champion'
was conceptualised by the hotel's
Sustainability and Green Teams to create
awareness, whilst pledging support to
making Earth Hour go beyond an hour
and a day. The musical video was inspired
by the internationally acclaimed emotive
hit, `Hall Of Fame' sung by The Scripts.
Lyrics for the track were conceptualised
by Manager Marketing Communications
and Sustainability Tharika Goonathilake
with the vocals by talented trio Shehan
Wanigasekara (Sales and Marketing),
Rushani Jayakody (Marketing
Communications and Sustainability)
and Shehan Mendis (Marketing
Communications and Sustainability).
The clip is available on the hotel's YouTube
Channel http://goo.gl/2FHz6X.
Stakeholder Group: Guests,
Suppliers and Associates
World Tourism Day at the Cinnamon
Grand
Celebrating World Tourism Day 2013,
the hotel’s Marketing Communications
and Sustainability Department rolled out
a unique awareness campaign for its
stakeholders, including guests, suppliers
and associates. 'Tourism and Water’
being the theme for the year; the aim of
this campaign was to create awareness
on the importance of water conservation
at all times. As part of the campaign, a
striking message was displayed at water
canisters, washing bays and public taps
around the hotel regarding the importance
of saving water.
Grand's Green Gestures
Be an Earth Champion – a musical tribute in honour of Earth Day (http://goo.gl/pBgxiM)
• Environmental wisdom cards that are for sale at Cinnamon Grand
• A handicraft at Nuga Gama kadé (shop)
• A happy customer at Banners to Bags (B2b) sale 2013 held for the fourth consecutive year
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Economic
Management Approach
Policy Level Commitments
Focusing on the fundamental tenets
of profit, people and environment, the
ultimate objective is to make significant
profits without compromising on
people and environment. Therefore, we
consciously make an effort to reduce
our Carbon Footprint, which we believe
will have a positive impact on our
economic growth. Our growth strategy
focuses on creating employment
opportunities, providing competitive
salaries and benefits, and ensuring
the development of employees, which
has an impact on our productivity and
revenue. Our internal economic policies
are aligned to the national growth
agenda.
A
At all times keeping an ROI in mind,
pricing decisions and financial/
economic strategies are formulated
and based on in-depth analyses on the
industry risk profile that would impact
our business.
101
Execution Strategy
policy of employment from every
Island-wide recruitment
Products and services that meet
point of the Hotel’s presence thus
the tourism industry priorities, SME
developing the skill base for the
focused product development
preservation and development of the
workshops according to the National
hospitality/tourism industry
Cleaner Production Center guidelines
Business strategy that has the
bandwidth to evolve with national
tourism development
Specific customer development
programmes around the year, aimed
at building capacity and market
linkages
Product development − new and
existing
Programmes aimed at instilling values
vital for sustainable production of
goods and services
Defined Contribution Plan Obligations
All Cinnamon Grand employees are
eligible for Employee’ Provident Fund
(EPF) contribution, as per the terms of the
Employees’ Provident Fund Act No. 15 of
1958 and its subsequent amendments
in addition to the stipulations of the
Employees’ Trust Fund (ETF) Act
No. 46 of 1980 and its subsequent
amendments. The Company contributes
the relevant percentages of the eligible
gross emoluments of employees to the
respective EPF and ETF.
Defined Benefit Plan Obligation
(Payment of Gratuity)
All employees are entitled to retirement
gratuity, payable under the Payment
of Gratuity Act No. 12 of 1983 and an
employee with more than 5 years of
service will receive half a month's salary
for every year of service on retirement or
termination of service.
Venue Recognition
Cinnamon Grand Colombo takes pride
in being chosen as the preferred partner
in many international conferences and
workshops during the year including
the 06th South Asia Economic Summit,
JCB India Annual Dealer Conference,
Commonwealth Business Forum, World
Bank Financing Agriculture Forum and
Asian Paints Annual Dealer Conference.
We are also instrumental in setting high
standards for five-star hospitality with our
superior quality principles, through our
Cinnamon Hotels and Resorts branding
standards and our customer profiling of
the hotel. As a city hotel, we have the
highest service charge in the city, which is
equally distributed to all associates.
Cinnamon Grand still prevails as the only
city hotel to be in the Sri Lanka Tourism
Hall of Fame since 2009. Cinnamon
Grand has 14 unique restaurants, which is
the largest number of F&B options under
one roof in the country catering to varied
palates.
Our signature restaurants include Tao for
fusion fare, Lagoon for seafood, Echo for
Italian cuisine, Chutneys for South Indian
and London Grill for Fine Dining. We have
set a high standard in the industry with
our innovative F&B features encouraging
others in the industry to raise their bars.
102
Our ethos of affordable indulgence for all
ages caters to a wide range of customers
without compromising on quality. While
offering the highest number of buffet
options, our most noteworthy outlet,
Taprobane is famous for its international
buffets and Sunday brunches, which are
the best in the city.
Nuga Gama, Sri Lanka’s only 'village in the
city;, won a cultural award from the Tourist
Board and is being used as a case study
highlighting a growing indigenous brand.
We are the only city hotel that holds an
entire rural village within its premises.
The typical local rural ambiance at Nuga
Gama is used for case studies, thesis and
research work by undergraduate students
at different universities, Department
of Archaeology and the Architect
Association.
cinnamon grand colombo, the preferred venue
Cinnamon Grand was the host hotel for the high-profile Commonwealth Heads of Government Meeting (CHOGM) in November. The
opening ceremony saw the presence of President Mahinda Rajapaksa and Commonwealth Business Council Chairman Dr. Mohan
Kaul among other dignitaries and diplomats.
• Cinnamon Grand General Manager Rohan Karr welcoming South Korean Prime Minister Jung Hong-Won to the hotel on his first
official visit to Sri Lanka
• Indian External Affairs Minister Salman Khurshid being welcomed at the hotel
• Indian Film Director Karan Johar enjoying a cup of coffee at Coffee Stop
103
Defined Contribution Plan Obligation (EPF & ETF) in Rs. ’000
2014
CG
CL
2013
Property
Total
CG
CL
2012
Property
Total
CG
CL
2011
Property
Total
CG
Property
Total
EPF
59,468
33,745
2,412
95,625
52,983
31,400
2,193
86,576
46,000
26,400
10,603
83,002
37,749
24,567
8,602
70,918
ETF
11,847
8,500
362
20,709
10,601
7,800
330
18,731
9,233
6,600
2,195
18,029
8,037
6,297
1,747
16,081
CG
CL
Total
CG
CL
Defined Benefit Plan Obligations (Payment of Gratuity) in Rs. ’000
2014
2013
CG
CL
Employee benefit 109,936 106,570
liability as at 31
March
Payments during
the financial year
7,344
Property
Total
4,728 221,234
11,072
-
18,416
CG
CL
92,284
98,027
13,832
11,137
Property
2012
Total
3,787 194,098
175
24,794
86,926
99,100
4,145
7,700
2011
Property
22,625 208,651
347
11,498
67,441
89,300
9,709
7,600
Value Added by the Group
2012 / 2013
2013 / 2014
16%
17%
32%
16%
6%
23%
To Employees as Remuneration
To The Government as Taxes
As Interest on Loans
As Minority Interest
To Shareholders as Dividends
As Depreciation
As Reserves
104
CL
0%
6%
15%
33%
0%
5%
8%
23%
To Employees as Remuneration
To The Government as Taxes
To Shareholders as Dividends
As Depreciation
As Reserves
Property
Total
18,708 175,449
880
16,429
environment
Environmental Policy
Grand Indulgence: Not a guilty pleasure
At Cinnamon Grand, every day we
make hundreds of choices that in some
way impacts the environment and the
communities within which we operate.
Our environmental strategies aim to better
understand these choices and ensure that
we consider a range of options and impacts
when we make corporate decisions. We
believe that this mechanism better enables
our Company to make more responsible
environmental choices and contributes to the
safety and sustainability of the resources of
our planet.
We have strived to adopt an environmentally
sustainable approach that is interwoven into
the heart of our organisation though our
employees, business partners and our entire
supply chain.
We are committed to continuous
improvements in our environmental
performance by reducing our ecological
footprint. Corporate Social Responsibility and
sustainability have long been the driving force
behind our comprehensive products and
services package that promises affordable
indulgence for all ages.
The hotel’s Green Agenda embraces four key
areas − waste management and recycling,
energy and water management, conservation
and community awareness. Within each of
these areas, specific measurable strategies
are identified to help reduce the impact the
company’s activities bring to bear upon the
environment.
We have strived to embed and inculcate a
culture of environmental awareness within our
organisation through earth-friendly initiatives.
These initiatives serve to create a sense of
responsibility and cooperation amongst our
105
associates, guests and business partners,
on the need for greater environmental
stewardship and true commitment towards
caring for our planet.
To encourage both customers and
employees to actively engage in
environmental stewardship, the 'We Dream
in Green' campaign has been designed to
communicate greener initiatives, create a
greener mindset and encourage activities that
support sustainable lifestyles and decision
making.
The hotel’s Management, Green Team and
staff participated in defining the company’s
Environmental Policy and the creation of
the Environmental Action Plan for the entire
property.
A quarterly and annual review is conducted
and presented to the staff and all our
stakeholders with an aim to secure consistent
and continuous improvement of our
sustainable performance.
We comply with all legal and environmental
procedures in our commitment to operate our
business responsibly.
Our ultimate goal is to enhance the `Grand
Guest Experience’ through comfort and
luxury that takes a minimum toll on the world
around us.
The next time you decide to visit Cinnamon
Grand, rest assured that sustainability is at
the heart of everything we do. So you can
have the luxury of Grand indulgence without
any guilt.
Rohan Karr - General Manager
Cinnamon Grand
First Sri Lankan Hotel
in uninterrupted
ISO implementation
since March 2006
Management Approach
We have endeavoured to adopt an
environmentally sustainable approach
that is imbued into the very fabric of
our organisation and embraces all
stakeholders including employees,
business partners and our entire supply
chain. Our enduring commitment
underscores the need for continuous
improvement in our environmental
policies and performance by reducing
our ecological footprint.
The hotel’s Green Agenda, embraces
four key areas: waste management
and recycling, energy and water
management, conservation and
community awareness. Specific
measurable strategies are identified
within each of these areas to help
reduce the impact of the Company’s
activities upon the environment.
106
Cinnamon Grand Green Vision
To be ranked as the Best Five Star Sustainable City Hotel in Sri Lanka by 2015
Cinnamon Grand Goal
5% reduction in the Carbon Footprint of the Hotel by March 2015
Execution Strategy
Alternative
Implementation
Implementation
energy usage and
of Green policies
of audits to minimise
reduction
the hotel waste
Protection of biodiversity in partnership
with the Field Ornithology Group of Sri Adoption of an environmental policy
Construction and operations of a fully
Lanka
sustainable and carbon neutral village
Construction of ‘Green Buildings’ to
- Nuga Gama
minimise impact of the operations to
Suppliers educated and motivated to
environment
adopt green practices
Green procurement policy
Collaboration with the Field
Ornithology Group of Sri Lanka to
protect biodiversity
Awareness and education to hotel
associates through seminars, posters,
social media, environmental videos
and the green corridor in the hotel
Awareness and education through
print and social media to customers
Children: Cultural tours at Nuga Gama
and workshops according to an
environmental calendar
Alternative energy use in the
preliminary testing stage
Energy, water and waste saving and
recycling initiatives
In pursuit of Environmental Excellence
Adding to the many jewels in our crown,
the Cinnamon Grand Colombo was
applauded as the first hotel in the country
and in Asia to be certified with all three ISO
standard certifications, i.e. ISO 14001, ISO
22000, and OHSAS 18001, in recognition
of our unrelenting efforts towards
environmental excellence. The concept
of Environmental, Health and Safety is
deeply ingrained in Cinnamon Grand’s
operational fabric, and is reflected in all
our tasks. The ‘Care Programme’, which
focuses predominantly on environmental
preservation and conservation further
emphasises hotel’s endeavour to be an
environmentally friendly organisation.
Moreover, being a city hotel in a concrete
jungle, it also ensures that all construction
and property development standards
conform to guidelines laid down by the
environmental regulators.
Energy and Water Management
As a core area of focus for the hotel, energy and water management plays a crucial role
in conveying sustainable business performance for the hotel. Hence both aspects are
integrated into all areas of the business, where every effort is made to ensure the efficient
management and control of energy and water usage which is practised on an ongoing
basis.
Cinnamon Grand’s Energy and Water Consumption Statistics
Water Consumption
2014
2013
2012
2011
230,000
The principles and guidelines delineated
by the certifications and the Care
Programme are woven into the day-to-day
operations at the hotel and permeated
throughout the entire organisation by
enlisting the commitment of all Cinnamon
Grand associates as follows:
Care for the Environment which we live
in (ISO 14001)
Care for the associates who dedicate
the best part of their lives working at
the Hotel (OHSAS 18001)
Care for our most valued customers.
(ISO 22000)
107
240,000
250,000
260,000
270,000
280,000
290,000
300,000
M3
14,000
14,500
15,000
15,500
16,000
kWh
Electricity Consumption
2014
2013
2012
2011
12,500
13,000
13,500
Energy Savings Activations for the Year
Description
Electricity Saving (KWH Per
Annum)
Installation of Variable Frequency Drives for the ground water pump
8,760
Installation of LED fluorescent lights in main kitchen and car parks
65,700
Installation of LED lights in lobby fillers
16,556.40
Installation of Variable Frequency Drives for the chilled water pumps
30,660
Installation of motion sensor lights in the ground floor car park
4,415.04
Installation of fluorescent lights were installed for Premium Wing and Courtyard building stairways
3,083.52
Installation of LED lights for Premium Wing guest corridors (room entrance.)
60,829.44
Reformatting switch panels in the engineering room
3,547.80
Installation of LED lights for service lift landing at Courtyard Wing
4,079.97
Managing Cinnamon Grand’s Carbon
Footprint
Earth Hour Celebrations
Cinnamon Grand joined in the worldwide
Earth Hour Celebrations, by switching
off lights in the hotel's 501 rooms, 14
restaurants, gardens, fish ponds and
swimming pools from 8.30 p.m. to 9.30
p.m. on Saturday March 29th. In house
guests and restaurant patrons in the
hotel's 14 dining outlets, joined the Grand
team in this symbolic gesture to mark
their commitment to Earth Hour 2014
by switching off lights in their rooms and
participating at the ceremonies held at the
hotel's lobby and Nuga Gama.
This year’s Earth Hour signage slogan was
constructed by the hotel’s engineering
team creating the Earth 60+ logo through
solar power.
Promoting Energy Saving
Cinnamon Grand’s Sustainability
Department organised a seminar which
was the first session on how to save
energy, for the hotel’s kitchen staff on
domestic appliances. This is part of an
ongoing effort by the hotel to educate
associates on being energy efficient while
encouraging sustainability practices. The
key speaker at the event was Mr. Sanath
Kithsiri, Head of Energy Management,
from the Sustainable Energy Authority,
who elaborated on not only how to save
energy, but more importantly, why it
should be done.
Mr. Sanath Kithsiri, Head of energy
management, from the Sustainable Energy
Authority. Over 60 associates attended
this seminar.
The second session on how to save
energy when using the hotel’s kitchen
appliances was conducted at the Cedar
Room, especially for the hotel’s kitchen
staff. The key speaker at the event was
Earth Hour Savings
Date
29th March 2014
108
Time
Consumption (KWH)
Consumption (Rs.)
8.30 pm to 9.30 pm
720
16,560
Waste Management
As Colombo’s largest five star property, with 501 rooms and 14 restaurants, the Cinnamon Grand remains committed to minimising
food waste, and has made food waste management an integral part of the hotel’s day-to-day functions. With this in mind, the Grand’s
Marketing Communications and Sustainability Department in collaboration with the hotel’s team of chefs presented the ‘Delicious Waste’
initiative, so as to encourage and inspire the hotels associates as well as other stakeholders to play a proactive role in reducing food
waste.
Waste Management Initiatives
Delicious Waste Chefs Competition
Marking the World Environment Day under the ageis of the United Nations Environment Programme (UNEP) and the Food and
Agricultural Organisation (FAO), our sustainability department together with the marketing communications and the talented team
of chefs organised ‘The Delicious Waste Chefs’ Competition’ on 5th September 2013.
This competition, well attuned with this year’s Environment Day theme ‘Think.Eat.Save: Reduce Your Foodprint’ advocated to
be creative in cuisine whilst reducing food waste. Introducing this novel concept - first-of-its-kind in the hospitality industry of Sri
Lanka, the hotel’s chefs presented delicious and creative dishes in the Breakfast, Lunch, Dinner, Snack and Dessert categories
with ingredients otherwise considered as ‘non-appetising’. This competition was judged by a distinguished panel - Hemalallindre
Ranawake (famously known as Koluu), Sri Lanka’s celebrity chef; Felicia Sorensen, internationally acclaimed Queen of Curries
and Savithri Rodrigo, renowned travel writer. We saw 41 of our senior and junior chefs presenting 73 dishes and the most
talented were awarded with cash prizes, medals and certificates.
Breakfast Category
1st - V. Krishna
2nd - Asanka Wijekoon
3rd - N. Sattiyaseelan
Lunch Category
1st - Sujith Ariyarathne
2nd - Rasika Weerarathne
3rd - Sujith Ariyarathne
Dinner Category
1st - D.C. Dissanayake
2nd - G. Margaret
3rd - Suresh Senaratne
Snack Category
1st - G. Margaret
2nd - N. Sathiyaseelan
3rd - Ananda Rakitha
Dessert Category
1st - Ranuka de Silva
2nd - Sirilak Suksamran
3rd - P.K. Kumara
As Colombo’s largest five-star property, we remain committed to food waste management; an integral part of the hotel’s day to
day functions. This initiative was ideal to encourage and inspire our associates as well as other stakeholders to join in our efforts
and complement our target of reducing the hotel’s ‘foodprint’ by 25 per cent each year.
Hotel Food Waste Kg’s
109
2013/14
2012/13
Reduction
701,773
825,448
18%
cinnamon grand's Delicious waste competition
Delicious waste competition winners with Cinnamon Grand General Manager Rohan Karr
• Lagoon Chef preparing her creative, delicious waste dessert
• The array of creative dishes on display
• Judges: Celebrity Chef Hemalalindre Ranawaka (Koluu), internationally acclaimed Queen of Curries Felicia Sorensen and
renowned travel writer Savithri Rodrigo
110
Eco-friendly waste management practices
Cinnamon Grand launched an ambient message conveying the importance of saving and recycling paper, by highlighting the toll that
paper production and consumption takes on trees and, in turn, negatively impacting the environment. The message is communicated
through the tissue dispenser at the wash room at Cinnamon Grand's Nuga Gama, Asia's first CarbonNeutral® venue. The images
indicates the link between trees and the production of paper through a pictorial reduction of green in the island each time a tissue is
pulled out. This aims to create awareness on the correlation between paper and trees while encouraging responsible use of paper. This
communiqué is part of Cinnamon Grand's commitment to creatively conveying the importance of being environmentally conscious and
embracing sustainable practices.
Banners to Bags (B2b):
A unique, innovative recycling initiative introduced by Cinnamon Grand with the aim of converting used promotional flex banners
of the hotel and suppliers into practical, durable and waterproof bags. Flex material is a petroleum by-product discarding these
banners without a sustainable recycling plan was not an option. The hotel collected these banners for a year to avoid health and
environmental hazards until an environmentally friendly plan was formulated which resulted in B2b.
B2b emphasises the importance of infusing the triple bottom line concept into the hotel’s daily operations and is inspired by
the 3R initiative of Reduce, Reuse and Recycle. Cinnamon Grand Colombo worked on reducing waste that could arise from
discarding the banners and reusing the discarded product by recycling it for more productive use in the form of trendy, useful and
long-lasting bags.
The B2b process was researched through the Sustainable Development Triangle Model developed by MIND (Munasinghe
Institute for Development) and was studied thoroughly by MIND prior to the endorsement of Nobel Peace Prize 2007 Co-Laureate
Professor Mohan Munasinghe.
The B2b project has led to remarkable benefits and advantages in the areas of environment, economy and society as indicated
below.
Environmental Advantages
A sustainable environmentally friendly recycling initiative of a product that causes immense land degradation and air pollution.
Landfills will no longer have the non-bio degradable flex banners disposed into it.
The need for incineration of the flex banners as yet another method of disposal and the ensuing noxious fumes will no longer
be a cause for environmental concern.
Economic Advantages
production of the bags creates a sustainable income-generating avenue for unemployed tailors, with the dual advantage
of adding to family incomes and giving them a sense of self worth and dignity.
The
Social Benefits
from the sale being channelled towards the hotel’s primary CSR initiative, the children’s ward of the Maharagama
Cancer Hospital assists in maintaining a sustainable fund for the continuing work of this project.
The fashionable, hip and trendy bags create added hype and awareness among society, not only of its environmentally
friendly features but also of the dual social commitment. This further leads to a ‘feel good’ factor permeating through to the
owners of the B2b bags.
Proceeds
111
Waste Management Efforts for the Year
Item (KGs)
Description
Quarter 1
Quarter 2
Quarter 3
Wet garbage
Collected by three piggery farms to
feed the pigs
188,098.10 185,781.72 184,627.37 203,435.43 761,942.62
Kitchen used oil
Fire the boilers of the hotel
1,624.50
2,834.10
3,177.90
3,735.90
11,372.40
Plastic and polythene
Given to Central Environmental
Authority listed collectors for recycling
3,823.66
3,972.40
4,305.00
4,898.60
16,999.66
Paper
Given to Central Environmental
Authority listed collectors for recycling
6,924.49
5,364.50
7,208.50
8,293.20
27,790.69
Glass bottles
Given to Piramal Glass Company for
recycling
1,315.10
3,671.50
3,926.00
5,320.90
14,233.50
Hazardous waste
(E-waste and CFL and
tube bulbs)
All E-waste is collected by Think
Green and all CFL and tube bulbs
are collected by Orange. Both
companies are registered with the
Central Environmental Authority
94.60
85.20
76.27
95.02
351.09
Metal tins and cans
Given for recycling to the same
collector as plastic and polythene
369.60
619.24
381.00
819.20
2,189.04
Composting
Composting is processed in the hotel
and used for the garden areas
11,608.00
11,744.00
9,322.00
10,043.00
42,717.00
Landfill waste
Given to the Colombo Municipal
Council for dumping
10,909.00
10,909.00
10,909.00
10,909.00
43,636.00
Coconut shells
Collected by one of our garbage
collectors and given to a company
which uses it to fire their boiler
0.00
0.00
0.00
568.00
568.00
Total
Waste
Quarter 4
Total
921,800.00
Waste Disposal and Recycling
In order to create awareness on proper waste disposal and recycling, garbage disposal cubicles were painted in CEA (Central
Environmental Authority) recommended colours which assisted associates to recognise the different types of waste disposal bins/areas
and remind them of the importance of categorising when disposing.
24 hour CCTV cameras were also fixed to monitor whether correct disposing of garbage was taking place.
112
Conservation of Biodiversity
Carbon Neutral Venue at Nuga
Gama:
One of our objectives was to create a
Carbon Neutral Venue to encourage
Carbon Neutral events, meetings
and conferences. Nuga Gama has
now been certified as South Asia’s
first Carbon Neutral Venue by the
Carbon Consultancy Company,
according to World renowned physicist
and climatologist as well as Vice
Chairman of the Intergovernmental
Panel on Climate Change and 2007
Nobel Laureate Professor Mohan
Munasinghe. Cinnamon Grand
Colombo with its passion to excel
will take it one step further and plans
are under way with our innovative
chef creating a typical village style
menu where sourcing, transport and
preparation has a minimal impact on
the environment.
113
Cinnamon Grand Colombo believes and
supports conservation of biodiversity.
The 200-year-old Nuga Tree in the hotel
premises stands as a testament to our
commitment to nature. Our ethos was to
provide visitors an experience based on
the ambience of rural life without leaving
the city and hence, the ‘village in the
city’ emerged. The very fact that Nuga
Gama which has infused the true village
concept into its entirety demonstrates
our commitment to environmental
sustainability. The rural village of Cinnamon
Grand was built on an environmentally
sustainable platform, where eco-friendly
practices were inculcated throughout the
entire village.
The lifestyle restaurant is set within the
picturesque location of a farmland with
thatched mud huts, cattle and poultry,
and other paddy harvesting features.
The environmentally friendly concepts
practiced within the village are manifested
in all aspects of the milieu. The floors,
roofs and walls of the huts, community
hall, the kadé (shop) are built with ecofriendly substances such as mud, Iluk,
and coir rope.
The farming practices established are
organic and devoid of artificial fertilisers
which are harmful to the environment.
Drinks served are from local seasonal
fruits, hence no preservatives; while the
cuisine, cooked on a firewood hearth in
earthenware pots is primarily organic,
using local spices, fruit, vegetables, meat,
fish sourced from village suppliers or from
the Nuga Gama garden. The Nuga Gama
garden is enriched with about 45 varieties
of plant species including indigenous
medicinal herbs, leafy greens, fruit trees
and spices. We also have a number of
endemic floras such as the Honey Tree or
Mee, of which bark and seed-oil are used
to treat various ailments. We have created
habitats for small birds, insects and all
plants in the Nuga garden and they have
been categorised and recorded. Plans
are under way to categorise birds and
butterflies.
We do believe that having infused the best
practices prevalent in a true Sri Lankan
rural village, environmental sustainability
becomes a natural phenomenon rather
than one that has to be consciously put
in place.
rich biodiversity amidst the bustling city
The lotus pond at Nuga Gama which sets the tone of a diverse nature from the moment you step in to the village in the city
• A common kingfisher post-pruning session enjoys the view atop a lamp
• Beautiful butterflies are a common sight at the village
• A monitor lizard scanning the area
114
Events at Nuga Gama - asia's 1st carbon neutral® venue
Nuga Gama decorated for a green wedding
• The dashing bridesmaids clad in traditional attire
• Guilt-free dining at Nuga Gama
• Interactive Sri Lankan cooking classes for guests
115
Social
Enriching the Workforce Management Approach
At Cinnamon Grand we strive to
develop an atmosphere in which
employees are inspired to discover
their full potential. Our endeavour is to
create a dynamic, loyal workforce with
a positive mind set. Underpinned by
this premise, we remain committed to
nurture an empowered team that will
play a pivotal role in enacting the future
aspirations of the hotel.
Strategy Execution
Skills
Highly
enhancement and
development of the resource pool
Improving workplace health and
safety standards
Creating a suitable work-life balance
for all employees
focused recruitment agenda
to ensure the right candidates are
selected
Extensive training and education to
improve knowledge and expertise
Ensuring compliance with all
mandatory safety regulations
Conducting regular training to
enhance safety standards
Promoting greater social interaction
and inculcating the required
psychological and attitudinal
behaviour patterns among
employees
Goal:
To be the Employer of Choice among all Five Star Hotels in the Country
Embracing a non-discrimination policy, the Cinnamon Grand continues to affirm its commitment as an equal opportunity employer.
We do not discriminate based on race, religion, gender, age, nationality, social origin, disability, political affiliation, opinion or any other
status protected by law. Also as per the JKH Group policy we do not condone child labour, forced or compulsory. So much so that
while infusing a deep sense of belonging among our associates, the multi-cultural and multi-ethnic environment has in fact been the
cornerstone of Cinnamon Grand’s enduring success. Moreover, we have actively promoted within our team, differently-abled individuals
that work alongside their colleagues, integrating themselves into regular society and enabling them a secure livelihood.
Employee Gender Analysis as at 31st March 2014
Type
Male
AVP and Above
5
Manager
4
Assistant Manager
Executive
Non-Executive
Female
Total Head
Count
5
1
5
5
3
8
102
26
128
1001
86
1087
Leveraging on the hotel’s commercial success, we offer all our associates a competitive remuneration package, consisting of a range of
benefits in addition to the basic salary and stipulated industry perks.
116
Standard Benefits Package
Annual bonus
Night transport for female associates
Emergency loans
Uniforms
Dormitory and locker facilities
On-duty meals
Discounted pastry and bakery items
Annual
medical check-ups
Additional Welfare Benefits
All associates are entitled to the Cinnamon
Grand welfare benefit plan. The monthly
contribution of Rs. 50/- per employee
is matched by an additional Rs. 100/contributed by the company to the hotel's
welfare benefit fund. All associates are
entitled to the following benefits from the
welfare benefit fund:
Distress
loan to be recovered from
the associate’s salary in 10 monthly
installments at an interest rate of 2.5 %
Donation to meet funeral expenses in
the event of the death of an associate
or a member of their immediate family
including parents and parents-in-law
A wedding gift for newly married
associates
Christmas gifts for associate’s children
below the age of 12
As a birthday treat, associates are
offered a special overnight stay
package on a full board basis
Donation for associates undergoing
operations for critical illnesses
A service gratuity is paid to associates
who leave the hotel after a continuous
service period of more than 15 years
A savings account is opened at a
preferred bank for a new born baby of
an associate
A retirement gratuity is given to
associates who retire after serving the
hotel more than 5 years
Festival advances are paid during
seasonal periods and is recoverable
from the associates’ salary
117
Employee Engagement
With the objective of creating a dynamic
resource pool, the Cinnamon Grand
adopts an open-door management
policy that promotes a communicative
employment culture within the
organisation. A comprehensive agenda
facilitates greater interactions between
employees and key management through
regular meetings and conferences. Taking
the form of consultative discussions,
these forums are a meeting of minds
that stimulate the exchange of mutually
beneficial ideas. These regular interactions
also help nurture employee goal
congruence and engender workforce
loyalty towards the organisation. Further
efforts to address employee concerns
has prompted the introduction of a
communication box entitled ‘Tell GM’,
which serves to deliver written grievances,
opinions and suggestions of associates.
Once collated and addressed by the
General Manager, solutions are posted on
a board next to the box.
Moreover, the hotel maintains relationships
with three unions namely the Sri Lanka
Nidahas Sevaka Sangamaya (SLNSS), the
Jathika Sevaka Sangamaya (JSS) and the
Inter Company Employee’s Union (ICEU)
with JSS and ICEU together representing
less than 10% of our workforce. Even in
the absence of any collective agreement
with these unions, the management
continues to maintain a healthy relationship
with them.
Rewards and Recognition
Schemes
Associate Quarterly Awards:
Associates are recognised on a quarterly
basis for outstanding achievements in
terms of commitment, productivity and
contribution to the common goal of
making Cinnamon Grand Colombo the
Best Hotel in the City and are nominated
by their respective departments. They
are rewarded at the staff meeting held
every quarter. Categories of award
winners include: Associate of the Quarter,
Associate of the Year and GM’s Special
Award. The nominees as well as the
winners are awarded with a cash reward.
Long Service Awards:
The Service Awards Ceremony is held
every year to reward associates that have
served the hotel for a long period of time.
Associates are given gold sovereigns in
proportion to their years of service (up
to 35 years). This awards ceremony is
held in a grand manner in recognition
and appreciation of their long service and
dedication.
Creating a Healthy Work-Life Balance
A firm belief that a healthy, motivated
workforce is an unparalleled resource
has led us to adopt a holistic approach
towards creating a meaningful work-life
balance for all our employees. We provide
a mentoring role in supporting employees
to meet the challenge of their work while
ensuring they remain committed to the
long term objectives of the company.
Recognising and rewarding both personal
and professional achievements form a
key part of our endeavour to encourage
employees to tap into their potential talents
and develop leadership abilities that would
underpin their success.
Encouraging National Sportsmen/
Women
Shaminda Eranga, an associate of
Cinnamon Grand, also represents the
Sri Lanka National Cricket Team. A
brisk fast-medium bowler, Shaminda
Eranga made a spectacular debut
in the cricketing world with his first
ODI against Australia in 2011. Having
performed exceptionally well since
his first encounter, Shaminda is
considered to be an invaluable asset
to the National Team.
Ishan Jayaratne, also one of hotel’s
associates represented the Sri Lanka
'A' Team as a right-arm seam bowler.
Cinnamon Grand’s associate Lakshan
Samarasinghe part of the Sales
and Marketing Team brought the
hotel pride by captaining the John
Keells Group Basketball team at the
Mercantile Basketball championships
2013 and leading the team to victory.
He was also recognised as the ‘Best
Player of the tournament’.
Key 'work-life' initiatives
for the year
Inter Department Cricket 6s
The annual Inter Department Cricket 6s,
a highly anticipated inter-departmental
sporting event was concluded at the
Burgher Recreation Club (BRC) Grounds
on 27th October 2013, with Team Front
Office emerging as winners in the male
category while Team Sales emerged as
winners in the female category.
Inter Departmental Soccer 7s
Annual Inter Department Soccer 7s,
another inter-departmental sporting battle,
was successfully concluded at the Malay
Grounds on the 9th of February 2014,
with Team Angsana taking the top spot in
the male category while Team F&B were
awarded the Winners Trophy in the female
category.
Cinnamon Grand Sports Meet
The Cinnamon Grand Inter-house Sports
Meet, a much looked forward to event
in the hotel’s sports calendar was held
on 29th September 2013. A challenge
between the Tangerine, Celery, Olive,
118
Blueberry, Rhubarb, and Grape houses,
the event comprised a number of track
and field events and culminated with
a March Past. Held at the Burgher
Recreation Club (BRC) Grounds, the event
concluded successfully with the Tangerine
house winning the overall championship
trophy.
Improving Employee Wellness
Facilities available to improve employee
wellness include;
Annual
medical checks for all
associates over 40
Senior Executives annual medical
check-ups
Special annual medical checks for
food-handlers
Eye clinic
24 in-house clinic and doctor visits
twice a day
First aid trainers
Breast cancer awareness
programmes
Breast Cancer Awareness Seminar
Cinnamon Grand conducted a Breast
Cancer Awareness seminar for its female
associates, with 53 participants from
departments across the hotel attending,
in commemoration of Breast Cancer
month. Chaired by a panel of imminent
speakers, the session focused on creating
awareness on prevention and early
detection. Elaborating on the importance
of early detection, the speakers also
explained self-examination techniques
that are critical towards prevention and
early detection. Control and treatment
measures were also discussed.
The seminar was organised by the hotel’s
Sustainability Division and supported
by Green Team champion Deepika
Satyapala, who handed over the funds
collected through the sale of pink ribbons,
to the Mithuruwela fund.
Drink Wise Campaign
The first phase of the ‘Don’t Drink and
Drive’ campaign was launched by the
hotel in November 2013 in partnership
with the British multinational alcoholic
beverages company DIAGEO, the world's
largest producer of spirits and a major
producer of beer and wine. The slogan
for the campaign being ‘Responsible
Drinking’, was aimed at creating
awareness among F&B managers and
supervisors about the dangers of driving
under the influence of alcohol.
Staff events
Cinnamon Grand Sports Meet
• Cinnamon Grand Team all dressed up for Octoberfest in keeping with the hotel’s German theme at the JKH Inter-Company
Rugby 7s
• Associates Quarterly Meeting
• Service Award 2013 (staff with a service of over 20 years and above)
119
Grand Sportsmanship
Champions at the 9th annual ‘Battle of the Spices’ cricket encounter between Cinnamon Grand and Cinnamon Lakeside
• John Keells Group Basketball Team Captain Lakshan Samarasinghe with the Mercantile Basketball Championships Trophy 2013
• Cinnamon Grand Colombo’s A Team emerged Runner Up in the soccer encounter of John Keells Inter-Company Goal and Ring 7s
• Inaugural Travel Trade Beach Rugby Tournament Winners – Cinnamon Grand Colombo B Team
120
Developing a dynamic training curriculum
Efforts to enrich our people have always been underscored by the need to create a dynamic training blueprint that would caption
the current needs of our workforce. By collating the results of a series of formal and informal indicators, we are able to develop a
comprehensive Training Needs Analysis (TNA) that forms the basis of the annual training curriculum at Cinnamon Grand.
Annual Performance
Review
Guest Reviews
Feedback from
Managers
Training Needs
Analysis (TNA)
Voice of the
Employee Surveys
Training Audits
The Importance of In-house Training
Given the highly competitive nature of our business, where service differentiation remains the key to success, in-house training plays a
critical role in manifesting the desired level of service clarity and professionalism to pursue Cinnamon Grand’s unique selling proposition.
Conducted by the learning and development team together with the support of our departmental trainers (Train, Assess and Develop or
TAD trainers), our in-house training framework follows a dynamic approach to enhance and improve knowledge and skills, while instilling
the right attitudes to help associates absorb the hotel's unique value culture.
121
In-house Training Programmes
Programme Description
Cinnamon Grand induction
A three-day comprehensive program to introduce new recruits into
Cinnamon Grand’s operational code and provide an introduction into the
value culture of a star class resort, while also stressing on the importance
of being part of the JKH group.
350
SOP Workshops (Standard Operating
Procedures)
This is a training initiative for Associates to ensure departmental staff
is kept abreast of the standard operating procedures in use in their
respective departments. The SOP sessions also include training sessions
conducted by TAD trainers from other departments.
97
On-the-job training at Front Office and
Food and Beverage Departments
Trainers work on a roster basis at these departments to identify and
analyse the training requirements as well as to conduct on-the-job training
within each department
189
City Tour for Concierge and Butler
associates
City tours to explain the attractions that Colombo has to offer which in
turn could be used in day-to-day operations by the staff of concierge
and butlers. The programme was implemented this year to increase the
knowledge of the associates for them to better manage the needs of
guests
23
Motivation (Level 1)
A motivational workshop conducted to identify the issues faced by
associates at the workplace and how they can in turn realise these issues
and turn them into positivity at the workplace.
605
Staff Per Session
122
Motivation (Level 2)
A continuation of level 1, this session examines the areas that were
identified in the previous training and looked at ways and means of
turning de-motivating factors into motivators
742
PMS Training
Focusing on educating associates on the procedures of Cinnamon
Grand’s Performance Management System to enable them to navigate
the system and use it as a tool to improve their own performance, and
convey greater benefit to the day-to-day operations of the hotel
68
Cinnamon Magic
A programme aimed at instilling the right mind-set among new recruits,
the sessions are conducted by a team of Cinnamon Magic trainers
comprising staff from different departments to provide a wealth of
experience and knowledge
124
TAD Trainer Programme
Conducted by the Learning and Development trainers, the programme is
designed to nurture potential TAD trainers from among hotel’s associates.
Upon completion of the programme, all successful TAD trainers are then
certified as such at the Associate Quarterly Meeting (AQM). All certified
TAD trainers would then be responsible for delivering high intensity
departmental SOP trainings within Cinnamon Grand in addition to playing
a lead role at SOP workshops for their respective departments.
42
Exam Revision
Revision sessions to prepare associates for exams. The subject matter
used is based on management decisions, TripAdvisor comments and
data gathered via customer feedback
400
Associate Quarterly Exams
Introduced with the aim of testing competency levels, all associates in the
categories of junior executives and below are tested. The subject matter
for the questionnaires are derived from the TNA as well as information
provided to the L&D team by the management
325
Soft Skills for Telephone Operators
A programme designed to improve the conversational skills and
telephone etiquette of hotel’s telephone operators
5
Soft Skills for Security
This tailor-made soft skills program addresses the critical role played by
the security staff to ensure Cinnamon Grand continues to maintain its star
class standards
15
Customer Service 101
A programme that extensively covers the basics of customer handling
and service
976
Cinnamon Grand Competency
Training
Covering the standard competency model for all Cinnamon Hotels and
Resorts, these sessions aim to create awareness on how best to emulate
the model
Food and Beverage Module
This training package offers comprehensive training on F&B for
associates working at hotel and covers most areas that are vital for daily
operations. All participants are awarded a certificate following successful
completion of training
356
English for Cinnamon Grand
Associates
A programme initiated to enhance the degree of spoken English at
different levels
82
Staff Facilities and Locker Etiquette
To maintain the standards of the facilities and lockers that are provided
by the hotel, in-depth training is conducted to instruct associates on how
staff facilities should be utilised and maintained with due care
647
Staff Per Session
1,019
Staff Per Session
First Aid Training
Basic training for staff to understand the fundamentals of First Aid. The
programme was conducted in-house by the Red Cross First Aid team of
Sri Lanka
37
Preparing for CHOGM
A special one-time training programme was designed and implemented
for all staff operating in guest areas to improve their guest servicing skills
to cater to the event
1055
Awareness Programme on HR
Practices
While promoting transparent HR practices, this training session informs all
associates on Human Resources practices and the HR offers available to
the staff of the hotel
907
Guest Service (Level 01)
Conducted for all staff at Level 01 (junior executive and below). The
programme delivers the key competencies that are required in the leisure
sector. This workshop is an in-depth, customer focused session that
targets all areas of customer handling
198
Finance for Non-Finance Staff
Conducted by Mr. Sunil Peiris, Sector Financial Controller at Keells Hotels
and Resorts, the session allowed Cinnamon Grand staff to take a closer look
at the world of hospitality finance
26
External Training Statistics for the Year
Category
Q2
Q3
Q4
Total No: Staff
Hours
Average
Hours
Number of hours of training: AVP and above
16
36
48
6
106
5
21.2
Number of hours of training: Manager
24
80
64
12
180
5
36.0
140
105
40
18
303
8
37.9
Number of hours of training: Assistant Managers
Number of hours of training: Executives
224
944
854
313
2,335
128
18.2
12,051
18,382
11,397
16,188
58,018
1,087
53.4
Number of hours of training for male employees by
category: AVP and above
16
36
48
6
106
5
21.2
category: Manager
21
72
64
6
163
4
40.8
category: Assistant Manager
129
95
8
12
244
5
48.8
category: Executives
179
850
769
282
2,080
102
20.4
category: Non-Executives
10,870
16,544
10,257
14,569
52,240
1,001
52.2
Number of hours of training for female employees by
category: Manager
3
8
0
6
17
1
17.0
category: Assistant Manager
11
10
32
6
59
3
19.7
category: Executives
45
94
85
31
255
26
9.8
category: Non-Executives
1,181
1,838
1,140
1,619
5,778
86
67.2
Number of hours of training: Non-Executives
123
Q1
Associate training
Learning and Development Manager Shashi Jayawardena training the associates
• Housekeeping golden rules explained by Departmental TAD trainers
• Cinnamon Magic Mind Set Training for associates
• Staff Motivation program
124
Workplace Health and
Safety
As always health and safety of the
workforce remains a primary concern
for Cinnamon Grand as we strive to
uphold international hospitality standards
at all times. A sound set of principles
and practices form the basis of our
safety policy, which is comprehensively
captured in the hotel’s safety manual.
The hotel’s Department of Compliance,
Health and Safety is the apex body
within the organisation, in charge of all
safety aspects. Further the Accident
Committee and the Evaluation and
Prevention Committee which come under
the supervision of the Health and Safety
Department, also offer proactive support
in maintaining safety standards. The
department is tasked with monitoring,
reviewing and reporting on the dayto-day adherence of safety standards
and procedures. The company’s safety
procedures are further strengthened
by OHSAS 18001 certification obtained
from SGS Lanka, the accredited body
for OHSAS certifications in Sri Lanka.
The certification confirms that Cinnamon
Grand’s systems and processes are fully
compliant with OHSAS 18001 international
standards for occupational health and
management systems.
Occupational Health and Safety Policy
(AHPPLC) was awarded with the OHSAS
18001 Certification in May 2012 for
maintenance, housekeeping and security
of the Crescat Boulevard shopping mall,
food outlets and premises. AHPPLC is
committed to protecting the health and
safety of all persons in the shopping
mall, food court and other relevant areas
and workplace including employees,
125
contractors, customers and other visitors.
AHPPLC employees, contractors,
customers and visitors have a duty of care
including the responsibility to work safely,
to take all reasonable care for their own
health and safety, and to consider the
health and safety of other people who may
be affected by their actions. AHPPLC will
take all reasonable and practical steps to
improve work safety conditions and will
strive to uphold its core values of safety,
knowledge, integrity and leadership in
order to achieve its goal of zero harm.
Asian Hotels and Properties PLC is
committed to:
Complying
with all applicable health
and safety laws, regulations and
standards.
Providing safe plant and equipment for
controlled work.
Implementing risk and hazard
management systems which
are relevant and suitable for the
organisation's risk exposure as well
as identify, promote and continuously
improve health and safety
performance.
Ensuring all managers remain directly
responsible and accountable for the
health, safety and welfare of their
employees and provide adequate
resources to assist managers in this
cause.
Provision
of appropriate Health and
Safety Training to all relevant persons.
Maintaining relevant policies,
procedures, systems, information,
training, recognition programs, and
organisational structures to support
and communicate effective health
and safety practices throughout the
organisation.
Utilising appropriate internal and/or
external expertise when required in all
related activities.
Establishing clear targets and
objectives to continuously improve
health and safety in the workplace.
Maintaining a positive safety
culture through encouraging
active participation, consultation
and cooperation of all employees,
contractors, customers and visitors in
promoting and developing measures
to improve health and safety at work.
AHPPLC will implement and maintain
these systems, inclusive of standards,
policies and procedures. These standards
will be monitored regularly to ensure their
integrity and effectiveness to facilitate
continuous improvement.
Injury Rate
In the Financial year under review, a total of 24 associates of Cinnamon Grand were
affected by occupational injuries, a decrease of 55% compared to last year.
Lost Day Rate
2013/14
2012/13
Total no: of man days in the period
325,512
323,136
199
514
0.06%
0.16%
Total no: of man days lost (TMDL)
TMDL as a % of total man days in the period
Product Responsibility
Management Approach
We strive to continually increase
the sustainability of our product
offering, keeping in mind its toll on
the ecology and economy, while
continuously creating products and
services that deliver on our brand
promise of affordable indulgence for
all ages. As Sri Lanka’s largest hotel
property offering a diversity of luxurious
products and services, we understand
the need to assess the sustainability
of our processes and products across
their entire life cycles, to ensure the
highest health and safety standards,
resource efficiency and cleaner
production strategies.
Our purchasing policies underpin
the importance of eco-friendly
products that take into consideration
the complete product life cycle from
production, to product use, to disposal
and reuse. We work in collaboration
with our wide network of suppliers to
develop new sustainable products
with values ascertained on the basis
of environmental, business and social
sustainable indicators. This extends to
our attitude towards customer care and
focus, which is of the highest quality.
Being at the crux of our operations,
products and services we offer have a
profound impact not only on the hotel’s
economic performance, but also on the
community and the environment. Aligned
to the group policy, the Cinnamon Grand’s
product responsibility ethos strives to
conform to all industry benchmarks for
best practices and compliance with
both local and international statutory
and regulatory requirements, that would
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validate the quality and integrity of our
products and services. Ensuring product
diversity and reasonable pricing allows
us to cater to diverse market segments
without compromising on the quality of our
products and services.
Product and service responsibility
initiatives undertaken by the hotel in
conformity with the product responsibility
guidelines are as follows:
All
meat products are purchased from
Halal certified suppliers, in order to
meet the requirements of our guests
which include special care in the
preparation of food.
Adherence to the supply chain
policies of Cinnamon Grand and the
JKH Group help us tap into additional
suppliers in conformity with the group
policy for ethical sourcing. This not
only allows for a guaranteed supply
at a fair price, but also ensures that
child labour is not utilised in the
process. Further, we adhere to the AIS
standards of advertising and have a
high percentage of suppliers from the
SME sector.
In keeping with our promise of guiltfree indulgence, a Diabetic Menu was
launched in response to a growing
demand for such options given
the recent escalation of diabetes.
The menu is available at the hotel’s
restaurants and consists of 30
dishes. We are now in the process
of developing an organic menu for
Nuga Gama, which is Carbon Neutral
Certified. We also offer vegetarian
options in all our restaurants and a
special healthy menu option for kids.
Nuga Gama’s organic garden produce
is used daily in at least one dish,
thus providing guests with alternative
organic options for food.
Improving services is considered
high priority, as the hotel strives to
provide guests with an unforgettable
experience. Customer feedback
is frequently gathered to gauge
satisfaction levels and identify ways to
enhance our products and services.
Guest comment cards in rooms and
restaurants are collected and analysed
daily. The Rooms Division, which
comprises of housekeeping, laundry,
recreation, reception and front office,
interacts with at least 30 guests daily
and their feedback is passed onto
to the Head of the Department, who
shares it at the morning meeting.
Customer feedback is also monitored
through TripAdvisor and Facebook.
Customer complaints are received
through guest comment cards. All
complaints are logged into the system
and categorised broadly as F&B and
front office. Complaints are dealt with
at the Heads of Department morning
meetings and a response to the
customer is provided within 24 hours.
Bi-annual brand audits are carried out
with the audit team experiencing and
observing the services at the hotel.
F&B conducts self-audits monthly as
well as reviews by ‘Mystery Guests’
sourced by the General Manager.
Food safety is paramount in our
organisation and we have been
certified with ISO 22000 for Food
Safety Management systems
in addition to the Five Crowns
certification.
Introducing Organic Wines
Making available organic wines to its
beverage list so that patrons can have
the choice of enjoying organic options
when ordering drinks stands as statement
to the hotel's environmentally-conscious
commitment to future generations. The
wines are made from organically grown
grapes with no interference to the natural
ripening process.
product responsibility at cinnamon grand
Organic produce cultivated at our own backyard at Nuga Gama
• Tasty yet healthy menu option for kids
• Guilt-free indulgences at Grand – diabetic menu for our diners
• Organic wines are part of our beverage list
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Corporate Social Responsibility
Management Approach
Cinnamon Grand’s CSR proclamation
has been developed in cognisance
with the national endeavour to uplift
the social standards and living
conditions of less developed and
vulnerable communities in the country.
Hence, driven by a deep rooted social
conscience, we have continued to
work towards the betterment of society
in general. In particular, our endeavours
towards uplifting social standards
concentrated on youth empowerment
and knowledge sharing as means of
capacity building for underprivileged
youth in the country.
Industrial Training for Students
Key efforts in this regard saw Cinnamon Grand host a group of 90 students from the
University of Jaffna for a one-day session including a comprehensive briefing on the
hospitality industry. The session was carried out by the hotel’s Heads of Departments
and the Training and Development Team and also included a tour of the hotel. The
highlight of the day was the presentation made by General Manager Rohan Karr,
describing his long and challenging journey to the top, in an inspiring and motivating
sharing of personal experiences. To conclude the day’s events, each student was gifted
a motivational book as a token, in hope that it will in some way inspire them as they
prepare to enter the working world. The visit was part of a project organised by the JKH
CSR division, to sponsor 100 students from the Faculty of Management Studies and
Commerce of the University of Jaffna, on a week-long industrial tour of its business units
in Colombo.
Vocational Training Programme
As a key CSR initiative in collaboration with the John Keells Foundation, we commenced
our vocational training programme targeting school leavers, primarily from the
neighbouring schools. As the first step, the internship opportunities were provided to
school leavers from neighbouring schools with a view to providing them the foundation
needed to jump start their careers after having completed their O/Ls.
Other Tours Conducted by the Learning and Development Team During the Year:
Category
Scope of the tour
Navy Supply and Secretariat School a part
of the Naval and Maritime Academy of
Trincomalee
Key F&B, Kitchen and Banqueting
information, tour of the hotel and a session
on adopting five-star service standards
Maldivian school students
Insights on the hotel industry and tour of
the hotel
Bamunugama Maliyadeva Vidyalaya-Home
Science students
F&B Kitchen basics, food carving
demonstration, tour of the hotel
Home Science students of Ladies College, F&B Kitchen basics, food carving
Colombo
demonstration, tour of the hotel
Students from School for the Deaf,
Ratmalana
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Tour of the hotel
Corporate social responsibility
Students from Jaffna received the Grand experience both in the hotel and the city for the very first time
• Cinnamon Grand’s Green Team, Breast Cancer Awareness Fundraising Project Champion Deepika Sathyapala handing over a donation
raised by the sale of pink ribbons in commemoration of Breast Cancer month to Prof. Riyana Raheem, Mithuruwela Cancer Support
Network
• Spreading a little sunshine to the children at the CCC Transit Home-Maharagama Cancer Hospital
• Kids from Deaf and Blind School in Ratmalana visit Grand
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Promoting local heritage
and culture
From the inception we have supported the
traditional Sri Lankan handicraft industry
in a bid to offer our guests an insight into
our rich culture. We have also consistently
supported local cultural performers by
providing them a platform to showcase
their talents and skills to our guests. These
efforts are now intrinsically linked with the
Cinnamon Grand’s brand identity and form
a key part of our endeavour to manifest
meaningful societal change in the long
term.
Promoting Local Craft:
The traditional ‘Kadé’ or village shop,
located at the Nuga Gama affords skilled
rural craftsmen the opportunity to display
and sell their products. Guests are
encouraged to purchase these unique
products and enable these talented
craftsmen to generate a sustainable
livelihood. The supplier network for the
Nuga Gama kadé spans different parts of
Sri Lanka including Matara, Habaraduwa,
Ambalangoda, Dankotuwa, Galle, Kandy,
Balapitiya, Jaffna and Panadura.
Promoting Traditional Sri Lanka’s
Dance Rituals:
The Nuga Gama regularly hosts
entertaining dance segments that portray
the intricacies of daily village life. Led by
generations of professional dancers, the
performances are done by the highly
accomplished Shilpa Ranga Cultural
Dance Troupe that performs a wide range
of informative dance rituals based on
traditional Sri Lankan folklore.
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Women’s Empowerment:
The traditional ‘Kussiya’ or kitchen at Nuga
Gama, employs traditional village women
chosen from less developed village
communities. Using their considerable
culinary skills these women produce
authentic Sri Lankan dishes that are
made available at the Nuga Gama. While
recognising the skills these women
possess, this initiative also facilitates a
sustainable income for their families.
Promoting Sri Lankan Crafts and
Produce:
The hotel also promotes batik items,
Cinnamon branded bookmarks, locally
manufactured children’s sling pouches,
recycled paper note pads and wooden
handicrafts, all manufactured by Sri
Lankan craftsmen. Moreover, VIP guests
are offered an array of traditional Sri
Lankan sweet meats and confectionery
in addition to a complementary basket of
fresh Sri Lankan fruits in all guest rooms.
Other CSR Initiatives
Uplifting Disadvantaged Senior
Citizens
The hotel provided a monthly requirement
of dry rations and medical items to the
Dias Elders Home in Wellampitiya, as
these senior citizens do not have the
means or financial support or care from
their families.
Continuing to support the home linen
including towels, mats and bed sheets
were also donated to the 23 elders at the
Dias Home. Bath towels, wash cloths,
duvet covers, table cloths, pillow cases,
etc were also donated later in the year.
Supporting the Differently-abled
Donation to the Sri Lanka National
Organisation of the Deaf
A stock of towels and bed sheets
was donated to the Sri Lanka National
Organisation of the Deaf Sports
Club. The contribution was made
during the organisation’s ‘Bak Maha
Ulela’ (Avurudhu festival), held at the
Nittambuwa Municipal Grounds in
April 2013.
Supporting Meth Mihira School for the
differently abled
The Inter Faith Society of Asian
International School
The
school hosted a Christmas Party
for the students of Meth Mihira School
for Special Children in Ratmalana.
The Cinnamon Grand stepped in to
sponsor the snack packs and drink
packs for these differently-abled
children attending the party.
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'Spreading Some Sunshine' to Under
Privileged Children
Donation of Avurudhu Lunch Packets
to The Salvation Army Boys' Home
The hotel provided a lunch time treat for
20 boys from the Salvation Army Boys’
Home in Rajagiriya during ‘Avurudhu’
(Sinhalese and Tamil New Year) season
in April 2013. The Salvation Army Boys'
Home is a shelter for destitute boys
between the ages of 5 and 17 years,
who are unable to return to their homes
due to unavoidable domestic or legal
circumstances. Although some of the
children do return to their relatives during
the season, in some unfortunate cases a
few of the children have no place to return
to and hence remain at the home. The
lunch donation was to show support to
these children for the New Year.
Visits of Students from the School for
the Deaf, Ratmalana
The hotel’s training department and
the associates gave the students of
the Ratmalana School for the Deaf a
‘Grand Tour’ of the hotel with a special
chocolate making experience that had the
children entranced. A sumptuous lunch,
entertainment and gifts completed the
experience in keeping with the Grand’s
endeavour of spreading a little sunshine.
A Grand Day for Don Bosco Boys
Cinnamon Grand continued with tradition
and hosted the annual Christmas treat
for the Don Bosco boy’s home, on the
09th December 2013. This year, 58 boys
had a fun and eventful day with a twist to
the usual programme, with the morning
starting off with a 3D movie at the Majestic
Cinema. Thereafter they had an outdoor
picnic at a waterside site where they
enjoyed boat rides on the Diyawanna
Oya, played outdoor games and enjoyed
a McDonald’s and KFC lunch! Mid-day
consisted of a Colombo city tour on an
open Double Decker bus, after which
they came to Cinnamon Grand for the
usual swim time in the hotel pool and the
dinner at the Atrium and Christmas party
at the Cedar Room. The party with a
grand dinner buffet, DJ music, dancing,
magic show, a special visit by Santa and
Christmas gifts from General Manager
Rohan Karr was a grand end to a grand
day. A thank you to all volunteers who
gave their time to ensure the kids had a
memorable day.
Community Schools Development
Programme
La-Salian Montessori Project at
Modara
The La-Salian Montessori has 145
students between 3-5 years and 6
teachers. The 'little school' is an attempt
by La-Salian Foundation to give under
privileged pre-schoolers an opportunity
to learn and shine. However, due to the
lack of adequate financial support, their
personal progress is severely hindered.
Efforts to uplift their learning environment
prompted the hotel to improve the
facilities. Having commenced in 2012, the
project is an ongoing endeavour, with a
five-year commitment window that would
see Cinnamon Grand actively participate
in the development of the school, in the
years ahead as well.
A team of volunteers from the Cinnamon
Grand put aside their suits, coats and
uniforms for a day to instead drape an
apron, pick up a paint brush and play
their part in adding a little colour to an
otherwise bleak situation. The La-Salian
Montessori, situated in a dismal nook
for Modhara is school to 145 children
between the ages of 3 and 5. These kids
hail from the lowest of low income families,
surviving amidst rampant crime and drug
addiction in the area. The Montessori is
their only escape from reality and their only
chance at an education.
Cinnamon Grand embraced the challenge
of making this Montessori a brighter place
for the children, providing for a cheerful
environment for them to learn in.
With aerated sea creatures swimming
around a whirly blue ocean, looming
giraffes quizzically observing mocking
monkeys swinging on tall trees, buzzing
bees and breezy butterflies flying around
lanky grass weeds, colourful flowers
blossoming beautifully and letters of the
alphabet dancing musingly, each wall was
a carefully crafted masterpiece.
The team also donated a sink for the
children to wash their hands in the
classroom as well as a fully tiled pantry
counter, a bag and bottle rack and a linen
donation. A gift of a variety of plants was
made for the ‘ape wattha’ area, which was
constructed as a flowering garden for the
kids to appreciate.
Cinnamon Grand carried out a threemonth reconstruction of the Montessori
leading up to the painting day. The
Grand works with developing the La
Salian Montessori as part of its ‘spread
a little sunshine’ CSR initiative, intended
at striving to uplift the underprivileged
communities in the country.
Lending a Hand
Donation to the Family of a Deceased
Team Member
In memory of the Chef Lalith Bandara
funds were collected voluntarily by means
of a donation form circulated amongst
all management and other staff and
was handed over to the family of late
Chef Lalith Bandara. Chef Bandara,
who passed away unexpectedly, will be
remembered as a valued member of our
team having served as a COMMI 2 at
Cinnamon Grand’s kitchen.
Donation of a Hand-rail to Associate
Associate Chandana Krishanth, lost
control over the movement of his right leg,
due to sudden paralysis. Cinnamon Grand
recognised his plight and donated a handrail, at a cost of Rs. 20,000, to be fitted
to the stairway in his residence so as to
make his ascent to his bedroom not only
easier, but much safer. Until that time, Mr.
Krishanth had to make his way upstairs
aided by his wife, posing a risk to both
parties. Cinnamon Grand saw his need,
and came to his assistance to avert this
potential peril with this much needed and
greatly appreciated donation.
Cancer Awareness Drive
The Cinnamon Grand also donated linen
including shirts, blouses, sarees, bed
sheets, aprons, ties, jackets and table
covers to the La-Salian Community and
Education Service Centre (Modara).
Donation to the Peter Weerasekara
Children's Home
The Cinnamon Grand donated old linen
including discarded stewarding shirts,
white shirts, blouses, saree blouses,
ladies suits, aprons, trousers etc to the
Peter Weerasekara Children's Home in
Buthpitiya. This facility houses 82 children
who have been orphaned or abandoned
by their families.
132
Donation to Mithuruwela Charity
During Breast Cancer month in October
pink ribbons were sold to associates
and guests as a fund raising initiative.
All proceeds raised through the sale of
ribbons among hotel associates and the
guests was donated to the Mithuruwela
Charity for cancer support.
Established by a group of cancer
survivors in 2005, the Mithuruwela
charity aims to provide awareness
and a better understanding of cancer
through the dissemination of information
in print and other media and to facilitate
activities that would help cancer patients
and caregivers, in particular those
from disadvantaged and marginalised
communities.
CCC Cancer Transit Home
During the festive season, games and
toys, stationary, books, batteries and
seasonal toys were gifted to the children
at the CCC House (Courage, Compassion
and Commitment), which is a transit
home for children suffering from cancer.
Cinnamon Grand also provided dinner to
40 children and their parents at the CCC
House.
Donation of Breast Cancer Awareness
Booklets
Cinnamon Grand donated 75 Breast
Cancer Awareness booklets to the La
Salian Community and Education Service
Centre (Modara). The booklets were
developed by the hotel Marketing and
Communications Department together
with the National Cancer Programme.
Other Community Support
Initiatives
Annual Lanka Alzheimer’s Foundation
Memory Walk
Cinnamon Grand continued with the
annual sponsorship to the Lanka
Alzheimer’s Foundation Memory Walk at
the Angsana City Club and Spa complex
with breakfast refreshments provided for
all participants.
Ceylon Bible Society Sale
The Cinnamon Grand supported the
Ceylon Bible Society’s annual charity fair,
which was held at the Christian Reformed
Church of Wellawatte. We donated
four kilos of fruit cake for the event’s
refreshment stall in our endeavour to
support the cause of the bible society, of
raising funds in order to uplift the lives of
under privileged communities.
Don Bosco Boys Home annual Christmas treat
58 boys from Don Bosco enjoying their annual Christmas indulgence at the Cinnamon Grand pool
• Happy faces post the Diyawanna Lake boat experience
• Singing along to the music; party at the Grand
• The boys at the movies
133
The La-Salian Montessori project
Enthusiastic volunteers of the Cinnamon Grand team after a full day of work recreating beautiful spaces for the kids
• High poverty conditions the children live in, in Modara
• Children enjoying the enhanced facilities and walls depicting sceneries of nature
• The montessori before painting
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Cinnamon Lakeside Colombo marked
many renowned accomplishments in the
year 2013 and maintained certifications
from recognised bodies, demonstrating
the commitment towards sustainable
and responsible business practices. The
following are the awards and certifications
received endorsing our hotel’s product
responsibility initiatives.
ISO
Certification
The hotel was recertified for ISO
22000:2005 Food Safety Management
System Standard for the third consecutive
time in year 2013. This certification covers
the hotel’s entire food manufacturing
operations including materials, purchasing,
stores, kitchens, stewarding, restaurants,
bars, human resources, maintenance and
waste disposal.
OHSAS
18001
Our proactive measures to ensure
health and safety in our workplace were
recognised and we received certification
for standards prescribed by OHSAS
18001, an international occupational
health and safety management system.
Crescentrating
Singapore
We have certification in place from
Crescentrating Singapore, an international
rating standard for Halal friendly travel
services, upholding our responsibility
towards meeting faith based needs of our
guests.
135
Green
Globe
This is a well acclaimed international
certification programme for sustainable
tourism, entailing 41 standard criteria
and 137 compliance indicators. The
certification programme lays emphasis on
conserving energy and water resources,
reducing operational costs, positively
contributing to local communities and the
environment. Having obtained the initial
certification in 2010, our hotel continued to
be compliant in the year to the mandatory
standards and sought to better the
score to be eligible for re-certification.
After an on-line audit by Green Globe
including a detailed evaluation of the
submissions of our sustainability initiatives
and measures adopted, our hotel was
granted re-certification for the fourth year
in succession, in effect, as the only Sri
Lankan hotel thus far to do so.
TripAdvisor
LLC
Cinnamon Lakeside was recognised by
TripAdvisor, the world renowned internet
based travel site with a Certificate of
Excellence 2013 which is based on
customers’ perspective, recognition
reviews and feedback on the site. The
hotel was ranked amongst the top ten
island-wide in the TripAdvisor Travellers
Choice Award.
EU
Switch-Asia
Our initiatives and measures in energy,
water and waste management were well
recognised with a Merit Award at the EU
Switch-Asia Greening Sri Lankan Hotels
Awards 2013, implemented by the Ceylon
Chamber of Commerce and supported by
the European Union.
Reporting
Standards
Cinnamon Lakeside was adjudged
the ‘Bronze’ winner of the Hotel Sector
Category at the Annual Report Awards
2013 conducted by the Institute of
Chartered Accountants of Sri Lanka,
signifying the excellence in presentation
and disclosure of high quality, relevant,
reliable and objective financial statements
in accordance with the framework
stipulated by the International Accounting
Standards Board (IASB).
City
Naturalist Sponsorship
Cinnamon Lakeside Colombo also
supported Cinnamon Nature Trails to
launch an edutainment programme for
children - ‘City Naturalist Award’ in May
2013. This award designed to inspire
children on studying and conserving
biodiversity in the city of Colombo was
conducted by leading experts in the
field of ecotourism. The programme
encompassed a three pronged approach
- lessons in flora and fauna found in the
city, study of birds and butterflies and
assessed nature walks. Participants
received a City Naturalist Award and
Badge along with immense exposure to
enhance skills in team work, leadership,
creativity, photography, public speaking
and communication skills. 25 children
participated in this programme which
spanned 3 days.
World Environment Day
commemorated World Environment Day
by dedicating the month to sustainable
initiatives. In this vein, an awareness
programme on ‘Protecting the Environment
for the Future Generations’ was organised
on 11th June 2013. The programme was
facilitated by Dr. Waruna Fernando, a
world renowned expert on environmental
management systems which disseminated
information and long term solutions on
common waste related issues. This
was attended by 350 students from five
neighbouring schools: T.B. Jaya Maha
Vidyalaya, Saripuththa Maha Vidyalaya, Al
Iqbal Balika Maha Vidyalaya, Holy Rosary
Sinhala School and Holy Rosary Tamil
School together with 100 students from
the Sri Lanka Institute of Tourism and Hotel
Management.
Uplifting the Community
Vocational Training Programme
As a key CSR initiative in collaboration
with the John Keells Foundation, we
commenced our vocational training
programme targeting school leavers,
primarily from the neighbouring
schools. As the first step, the internship
opportunities were provided to five school
leavers from neighbouring schools with
a view to providing them the foundation
needed to jump-start their careers after
having completed their O/Ls. The two
interns who completed the internship
successfully are currently serving the
Hotel under the purview of the Engineering
Department.
136
Children's Day
As part of this project and celebrating the
Children’s Day in Sri Lanka on 1st October
2013, our CSR team led by the General
Manager invited 60 students from multiethnic and religious backgrounds from
the neighbouring schools for a workshop
organised at the hotel; Al Iqbal Balika
Vidyalaya, T.B. Jayah Maha Vidyalaya
and Sri-Sariputhra Maha Vidyalaya. The
objective of this initiative was to give the
students an exposure to the hospitality
industry, inculcate career planning and
motivate them to be responsible and
respectful future leaders.
Cinnamon Lakeside projects
CSR project for Balagolla Maha Vidyalaya in Mahiyangana
• Children’s Day programme for neighborhood schools
• Receiving the award at EU Switch Asia Greening Sri Lanka Hotels
• Awareness programme for school children on World Environment Day, conducted by Dr. Waruna Fernando
137
Financial Calender 2013/14
Interim Reports
1st Quarter - 30th July 2013
2nd Quarter - 29th October 2013
3rd Quarter - 24th January 2014
Annual Reports
2012/13 - 23rd May 2013
2013/14 - 28th May 2014
Meetings
19th Annual General Meeting - 24th June 2013
20th Annual General Meeting - 27th June 2014
Dividends
Final Dividend of Rs. 3/- per Share for the year
2012/13 was paid on 14th June 2013
Interim Dividend of Rs. 1/- per Share for the year
2013/14 was paid on 10th January 2014
Financial
statements
report of the Audit Committee
Role of the Committee
The role of the Audit Committee is to
assist the Board in fulfilling its oversight
responsibilities for the integrity of the
Financial Statements of the Company,
the internal control and risk management
systems of the Company and its
compliance with legal and regulatory
requirements, the external auditors’
performance and independence and the
adequacy and performance of the internal
audit function, which at John Keells is
termed Group Business Process Review
Division (Group BPR). This is detailed in
the terms of reference of the Committee
which has been approved by the Board
and is reviewed annually.
Composition of the Committee and
Meetings
The Audit Committee comprised of three
Non-Executive Independent Directors.
The Chairman of the Audit Committee
and another member of the Committee
are Chartered Accountants while the
other member of the Committee has a
specialist financial background. All NonExecutive Directors satisfy the criteria
for independence as specified in the
Standards on Corporate Governance for
listed Companies issued by the Securities
and Exchange Commission of Sri Lanka.
The Audit Committee reports directly to
the Board. The individual and collective
financial and hotel industry specific
knowledge, business experience and
independence of members are brought
to bear on all matters, which fall within
the committee’s purview. The Director
Finance of the Hotel sector served as the
Secretary to the Audit Committee.
The President of the Property Group of
John Keells Holdings, General Manager
of Cinnamon Grand, Sector Financial
Controllers of Property and Hotels Sectors
140
together with the Head of Group Business
Process Review of John Keells Holdings
PLC, attend Audit Committee meetings
by invitation. Outsourced Internal Auditors,
PricewaterhouseCoopers (Pvt) Ltd., and
Independent External Auditors KPMG are
required to attend meetings on a regular
basis.
The Audit Committee held four (4)
meetings during the financial year.
Information on the attendance at these
meetings is given under Corporate
Governance on page 59. In addition,
the Chairman of the Committee met the
Internal and External Auditors and in house
personnel, as necessary, to strengthen
guidance and oversight related to Audit
Committee matters.
The effectiveness of the Committee is
evaluated annually by each member
of the Committee and the results are
communicated to the Board.
The activities and views of the Committee
have been communicated to the Board
of Directors quarterly through verbal
briefings and by tabling the minutes of the
Committee’s meeting.
Financial Reporting
The Audit Committee has reviewed and
discussed the Company’s quarterly
and annual Financial Statements prior
to publication with the management
and external auditors, including the
extent of compliance with International
Financial Reporting Standards(IFRS)
adopted locally as Sri Lanka Financial
Reporting Standards(SLFRS), LKAS the
adequacy of disclosures required by other
applicable laws, rules and guidelines. The
Committee has also regularly discussed
the operations of the Company and its
future prospects with management and
is satisfied that all relevant matters have
been taken into account in the preparation
of the Financial Statements.
Internal Audit, Risks and Controls
PricewaterhouseCoopers (Pvt) Ltd
continued to serve as the Outsourced
Internal Auditors of the Company, and
the audit plans and scope of work were
formulated in consultation with the John
Keells Group Business Process Review
(Group BPR) Division and approved by the
Committee.
The main focus of the Internal Audit was
to provide independent assurance on
the overall system of internal controls,
risk management and governance, by
evaluating the adequacy and effectiveness
of internal controls, and compliance with
laws and regulations and established
policies and procedures of the company.
During the year, reports were received
by the Committee from the Outsourced
Internal Auditors, which were reviewed
and discussed with management, the
Outsourced Internal Auditors and the
John Keells Group BPR Division. The
recommendations of the Internal Auditors
have been followed up and are being
implemented.
The Audit Committee has also reviewed
the processes for the identification,
evaluation and management of all
significant operational risks faced by the
Company. The most significant operational
risks and the remedial measures taken to
mitigate them have been reviewed with
the management and the John Keells
Group Sustainability and Enterprise Risk
Management division.
Formal confirmations and assurances
have been received from senior
management on a quarterly basis
regarding the efficacy and status of
the internal control systems and risk
management systems, and compliance
with applicable laws and regulations. The
Committee reviewed the whistleblowing
arrangements for the Company which is in
line with the group arrangements.
External Audit
The External Auditors’ letter of
engagement, including the scope of the
audit, was reviewed and discussed by the
Committee with the external auditors and
management prior to the commencement
of the audit.
The External Auditors kept the Committee
advised on an on-going basis regarding
any unresolved matters of significance.
Before the conclusion of the audit, the
Committee met with the External Auditors
to discuss all audit issues and agree
on their treatment. The Committee also
met the External Auditors, without the
management being present, prior to the
finalisation of the Financial Statements.
The Audit Committee is satisfied that the
independence of the External Auditors has
not been impaired by any event or service
that gives rise to a conflict of interest.
Due consideration has been given to the
level of audit and non-audit fees received
by the External Auditors from the John
Keells Group and confirmation has been
received from the External Auditors of their
compliance with the independence criteria
given in the Code of Ethics of the Institute
of Chartered Accountants of Sri Lanka.
The performance of the External Auditors
has been evaluated and discussed with
the senior management of the Company,
and the Committee has recommended
to the Board that KPMG be re-appointed
as the External Auditors of Asian Hotels
141
and Properties PLC for the financial
year ending 31st March 2015, subject
to approval by the shareholders at the
Annual General Meeting.
Conclusion
Based on the reports submitted by the
External Auditors and the Outsourced
Internal Auditors of the Company, the
assurances and certifications provided
by the senior management, and the
discussions with management and the
auditors both at formal meetings and
informally, the Committee is of the view
that the control environment within the
Company is satisfactory and provides
reasonable assurance that the financial
position of the Company is adequately
monitored and its assets are safeguarded.
C.J.L. Pinto
Chairman of the Audit Committee
28th May 2014
Statement of Directors' responsibility
The responsibility of the Directors in
relation to the Financial Statements is
set out in the following statement and
should be read in conjunction with the
Report of the Auditors. The responsibility
of the Auditors, in relation to the Financial
Statements prepared in accordance with
the provisions of the Companies Act No.
7 of 2007, is set out in the Report of the
Auditors.
• Provide the information required
by and otherwise comply with the
Companies Act and the Listing Rules
of the Colombo Stock Exchange.
As per the provisions of the Companies
Act No. 7 of 2007, the Directors are
required to prepare for each financial
year and place before a general meeting,
Financial Statements which comprise of:
Furthermore, the Directors have a
responsibility to ensure that the Company
maintains sufficient accounting records to
disclose, with reasonable accuracy, the
financial position of the Company and of
the Group.
• The Income Statement and Statement
of Comprehensive Income of the
Company and of the Group, which
present a true and fair view of the profit
and loss of the Company and of the
Group for the respective financial year;
• A Statement of the Financial Position,
which presents a true and fair view
of the state of affairs of the Company
and of the Group as at the end of the
financial year.
The Directors confirm that the Financial
Statements:
• have been prepared using appropriate
accounting policies which have been
selected and applied in a consistent
manner, and material departures,
if any, have been disclosed and
explained; and
• have been presented in accordance
with the Sri Lanka Accounting
Standards (SLFRS/LKAS) and that
reasonable and prudent judgments
and estimates have been made
so that the form and substance of
transactions are properly reflected;
and
142
The Directors are of the view that the
Company has adequate resources to
continue in operation to justify applying the
going concern basis in preparing these
Financial Statements covering Contingent
Liabilities.
Moreover, as required by Section 56 (2)
of the Companies Act No. 7 of 2007,
the Board of Directors have confirmed
that the Company, satisfies the Solvency
Test immediately after the distribution,
in accordance with Section 57 of the
Companies Act No. 7 of 2007, and have
obtained a certificate from the Auditors,
prior to declaring a Final Dividend of Rs.
3/- per share for the year ended 31st
March 2014, to be paid on 18th June
2014.
By Order of the Board
The Directors have also taken all
reasonable steps to safeguard the assets
of the Company and of the Group and in
this regard to give proper consideration to
the establishment of appropriate internal
control systems with a view to preventing
and detecting fraud and other irregularities.
Secretaries
28th May 2014
The Directors are required to prepare
the Financial Statements and to provide
the Auditors with every opportunity to
undertake whatever steps and inspections
that may be considered as appropriate
to enable them to give their audit opinion.
The Directors are of the view that they
have discharged their responsibilities in
this regard.
Compliance Report
The Directors confirm that, to the best
of their knowledge, all taxes, duties
and levies payable by the Company all
contributions, levies and taxes payable on
behalf of and in respect of the employees
of the Company and all other known
statutory dues as were due and payable
by the Company as at the Balance Sheet
date have been paid or provided for,
except as specified in Note 38 to the
Independent auditors' report
TO THE SHAREHOLDERS OF ASIAN
HOTELS AND PROPERTIES PLC
Report on the Financial Statements
We have audited the accompanying
financial statements of Asian Hotels and
Properties PLC (“the Company”) and
the consolidated financial statements
of the Company and its subsidiary (“the
Group”), which comprise the statement of
financial position as at March 31, 2014,
the statements of income, comprehensive
income, changes in equity and cash
flows for the year then ended, and notes,
comprising a summary of significant
accounting policies and other explanatory
information set out from pages 150 to 185
of the annual report.
Management’s Responsibility for the
Management is responsible for the
preparation and fair presentation of
these financial statements in accordance
with Sri Lanka Accounting Standards.
This responsibility includes: designing,
implementing and maintaining internal
control relevant to the preparation and
fair presentation of financial statements
that are free from material misstatement,
whether due to fraud or error; selecting and
applying appropriate accounting policies;
and making accounting estimates that are
reasonable in the circumstances.
143
Scope of Audit and Basis of Opinion
Our responsibility is to express an opinion
on these financial statements based
on our audit. We conducted our audit
in accordance with Sri Lanka Auditing
Standards. Those standards require
that we plan and perform the audit to
obtain reasonable assurance whether the
financial statements are free from material
misstatement.
An audit includes examining, on a test
basis, evidence supporting the amounts
and disclosures in the financial statements.
An audit also includes assessing the
accounting policies used and significant
estimates made by management, as well
as evaluating the overall financial statement
presentation.
We have obtained all the information and
explanations which to the best of our
knowledge and belief were necessary
for the purposes of our audit. We
therefore believe that our audit provides a
reasonable basis for our opinion.
Opinion
In our opinion, so far as appears from our
examination, the Company maintained
proper accounting records for the year
ended March 31, 2014, and the financial
statements give a true and fair view of
the financial position of the Company as
at March 31, 2014, and of its financial
performance and its cash flows for the year
then ended in accordance with Sri Lanka
Accounting Standards.
In our opinion, the consolidated financial
statements give a true and fair view of the
financial position of the Company and its
subsidiary dealt with thereby as at March
31, 2014, and of its financial performance
and its cash flows for the year then ended
in accordance with Sri Lanka Accounting
Standards.
Report on Other Legal and Regulatory
Requirements
These financial statements also comply
with the requirements of Sections 153(2)
to 153(7) of the Companies Act No. 07 of
2007.
Colombo
28th May 2014
Income Statement
GroupCompany
For the year ended 31st March 2014
2013
2014
2013
Page No. NoteRs.’000Rs.’000Rs.’000Rs.’000
Revenue 1585
8,256,1497,890,9785,316,6865,050,755
Cost of Sales
(3,231,076)(3,067,561)(2,087,622)(1,986,177)
Gross Profit
5,025,0734,823,4173,229,0643,064,578
Dividend Income
158
6
Other Operating Income
158
7
Distribution Expenses
Administrative Expenses
Other Operating Expenses
--
273,493234,422
75,54671,30862,26159,074
(207,964)(176,620)(118,633)(96,826)
(1,776,265)(1,644,638)(1,126,839)(1,042,943)
(640,246)(565,991)(386,207)(334,173)
Results from operating activities
2,476,1442,507,4761,933,1391,884,132
Finance Cost
158
8
Finance Income
158
9
Net Finance Income
Change in Fair Value of
Investment Property
164
16
(3,287)(455)
(3,249)(359)
305,042312,020249,783247,187
301,755311,565246,534246,828
268,564517,210268,564228,500
Profit Before Tax
15910
3,046,4633,336,2512,448,2372,359,460
Income Tax Expenses
159
11
(227,952)(238,865) (69,025)(67,323)
Profit for the Year
2,818,5113,097,3862,379,2122,292,137
Attributable to:
Equity Holders of the Parent
2,397,9462,494,2962,379,2122,292,137
Non-controlling Interest
420,565603,090
-
2,818,5113,097,3862,379,2122,292,137
Rs.Rs.Rs.Rs.
Earnings Per Share
Dividend Per Share
160125.425.635.375.18
161134.004.004.004.00
Figures in brackets indicate deductions.
The accounting policies and notes as set out in pages 150 to 185 form an integral part of these Financial Statements.
144
Statement of Comprehensive Income
GroupCompany
For the year ended 31st March
2014
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000
Profit for the Year
2,818,5113,097,3862,379,2122,292,137
Other comprehensive income
Revaluation of land and buildings
Re-measurement gain/(loss) on defined benefit Plans
Deferred Tax effect on Revaluation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
-6,242,265
-5,842,595
(4,860)-
(3,768)- (47,960)
- (4,860)6,194,305
(3,768)5,842,595
2,813,6519,291,6912,375,4448,134,732
Attributable to:
Equity holders of the parent
2,393,7048,489,568
Non-controlling interests
419,947802,123
2,813,6519,291,691
145
Statement of Financial position
GroupCompany
As at 31st March2014201320142013
Page No. NoteRs.’000Rs.’000Rs.’000Rs.’000
ASSETS
Non Current Assets
Property, Plant and Equipment
161
14
Lease Hold Property
163
15
Investment Property
164
16
Intangible Assets
165
17
Investment in Subsidiary
165
18
Other Non Current Financial Assets
166
20
Other Non Current Assets
167
21
Total Non current Assets
18,511,38518,308,98315,053,59815,029,139
818,664831,068
-
3,904,5143,618,7502,146,2641,860,500
5,2658,5171,0021,062
-
-
660,045660,045
17,02719,21511,39112,339
4,7863,3573,2642,953
23,261,64122,789,89017,875,56417,566,038
Current Assets
Inventories
16722
121,019135,186 85,146102,154
Trade and Other Receivables
167
24
476,374523,956241,925290,696
Amounts Due from Related Parties
173
34.1
48,86334,65934,71720,136
Other Current Assets
168
25
88,232169,489 47,48292,914
Short Term Investments
168
26
3,134,1942,715,7982,647,2692,155,924
Cash In Hand and at Bank
430,541407,409289,804307,569
Total Current Assets
4,299,2233,986,4973,346,3432,969,393
Total Assets
27,560,86426,776,38721,221,90720,535,431
EQUITY & LIABILITIES
Equity attributable to equity holders of the parent
Stated Capital
16827
3,345,1173,345,1173,345,1173,345,117
Revenue Reserves
7,880,0707,242,0606,391,2875,782,448
Other Components of Equity
168
28
11,112,84911,110,29010,612,10110,602,127
Equity attributable to equity holders 22,338,03621,697,46720,348,50519,729,692
Non-controlling Interest
3,449,5093,425,692
-
Total Equity
25,787,54525,123,15920,348,50519,729,692
Non Current Liabilities
Deferred Tax Liabilities
17029
337,411329,313
- Employee Benefit Liabilities
171
30
221,234194,097114,66496,071
Other Non Current Liabilities
172
31
-1,416
-
Total Non Current Liabilities
558,645524,826114,66496,071
Current Liabilities
Trade and Other Payables
173
32
736,713654,530513,915466,393
Amounts Due to Related Parties
173
34.2
87,34187,64360,90458,377
Income Tax Liabilities
58,31865,252
-
Other Current Liabilities
173
33
202,222158,294107,80361,793
Bank Overdrafts
130,080162,683 76,116123,105
Total Current Liabilities
1,214,6741,128,402 758,738709,668
Total Liabilities
1,773,3191,653,228 873,402805,739
Total Equity and Liabilities
27,560,86426,776,38721,221,90720,535,431
I certify that the Financial Statements comply with the requirements of the Companies Act No. 7 of 2007.
Sunil Peiris
Sector Financial Controller
The Board of Directors is responsible for the preparation and presentation of these Financial Statements.
A.D. Gunewardene
J.R.F. Peiris
DirectorDirector
28th May 2014
146
Statement of Cash Flow
GroupCompany
For the Year Ended 31st March 2014
2013
2014
2013
NoteRs.’000Rs.’000Rs.’000Rs.’000
CASH FLOWS FROM OPERATING ACTIVITIES
Operating Profit before Working Capital Changes A
3,019,8113,054,0491,971,040 1,995,201
(Increase)/Decrease in Inventories
Decrease in Trade and Other Receivables
(Increase)/Decrease in Amounts Due from Related Parties
Decrease in Other Current Assets
Increase/(Decrease) in Trade and Other Payables
Increase/(Decrease) in Amounts Due to Related Parties
Increase in Other Current Liabilities
14,158 (26,508) 17,009(28,583)
39,16967,01047,509 47,511
(14,203)11,970(14,581)8,091
81,2573,573
45,43338,714
82,182 (201,497) 47,522(149,325)
(302)3,329 2,5261,685
43,94834,45646,0126,903
Cash Generated from Operations
3,266,020 2,946,382 2,162,4701,920,197
Finance Income Received
305,042312,020249,783247,187
Finance Cost Paid
(3,287)(455)
(3,249)(359)
Dividend Received
--
273,493
234,422
Tax Paid
(226,787)(217,449) (69,025)(67,323)
Gratuity Paid
(18,415)(44,062) (7,344)(32,924)
Net Cash Flow from Operating Activities
3,322,573 2,996,436 2,606,1282,301,200
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
Purchase/Transfers and Construction of
Property, Plant and Equipment (673,031)(489,098)(300,645)(283,257)
Addition to Work-in-Progress
-(3,897)
-(3,897)
Addition/Transfers to Investment Property
(17,200)-
(17,200)Addition/Transfers to Intangible Assets
(622)(1,586) (299)(274)
Proceeds from Sale of Property, Plant & Equipment 10,319 15,296 3,0497,105
Proceeds from/(Repayment of) Other Assets (Net)
759 22,561
637(2,033)
Net Cash Flow Used in Investing Activities
(679,775)(456,724)(314,458)(282,356)
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
Dividend Paid to Equity Holders of Parent
(1,771,101)(2,213,876)(1,771,101)(2,213,876)
Dividend paid to shareholders with non-controlling interest
(396,130)(339,540)
-Repayment of Long Term Borrowings
(1,436)(1,436)
-Net Cash Flow Used in Financing Activities
(2,168,667)(2,554,852)(1,771,101)(2,213,876)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
474,131(15,140)
520,569(195,032)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
2,960,5242,975,6642,340,3882,535,420
CASH AND CASH EQUIVALENTS AT THE END 3,434,655 2,960,524 2,860,9572,340,388
ANALYSIS OF CASH AND CASH EQUIVALENTS
Favorable Balances
Cash and Bank
Short Term Investments
430,541407,409289,804307,569
3,134,1942,715,7982,647,2692,155,924
Unfavorable Balances
Bank Overdrafts
(130,080)(162,683) (76,116)(123,105)
Total Cash and Cash Equivalents
3,434,6552,960,5242,860,9572,340,388
A. Operating Profit before Working Capital Changes
Profit before Tax
3,046,4633,336,2512,448,2372,359,460
Adjustments for:
Finance Income
(305,042)(312,020)(249,783)(247,187)
Dividend Income
--
(273,493)(234,422)
Finance Cost
3,287455
3,249359
Change in Fair Value of Investment Property
(268,564)(517,210)(268,564)(228,500)
Depreciation of Property, Plant and Equipment
455,964412,314266,153244,784
(Profit)/Loss on Disposal of Property, Plant & Equipment
4,346(191)
6,9824,865
Amortisation of Leasehold Properties
12,40412,404
- Amortisation of Intangible Assets
3,874 5,259 359585
Provision for Doubtful Debts
8,413 7,935 1,2617,524
Gratuity Charge and Related Costs
40,692 29,463 22,16919,444
Project Costs
-68,289
-68,289
Share Based Payment Expenses 17,966-
14,470 Provision made on slow moving inventory 87,174
- Insurance Claim Receivables
-3,926
-
3,019,8113,054,0491,971,0401,995,201
147
Statement of Changes In Equity
Attributable to Equity Holders of the Parent
Other
Non
StatedRevaluation
Capital Retained controlling
Total
CapitalReserveReserveEarnings Total interest Equity
GROUP
Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000
As at 1st April 2012
3,345,1175,143,193
-6,490,690
14,979,0002,963,109
17,942,109
Profit for the year
-
-
-
2,494,296
2,494,296
603,090
3,097,386
Other Comprehensive Income
-5,995,272
-
-5,995,272 199,0336,194,305
Total Comprehensive Income
-5,995,272
-2,494,2968,489,568 802,1239,291,691
Transferred to Revenue Reserve (Note a)
-
(13,418)
-
13,418
-
-
Transferred to Revenue Reserve (Note b)
-
(14,757)
-
14,757
-
-
Final Dividend Paid - 2011/2012
-
-
- (1,328,326) (1,328,326)
- (1,328,326)
Interim Dividend Paid - 2012/2013
-
-
-
(442,775)
(442,775)
-
(442,775)
Subsidiary dividend to
Minority Shareholders - 2011/2012
(226,360)
(226,360)
Minority Shareholders - 2012/2013 -----
(113,180)
(113,180)
As at 31st March, 2013
3,345,11711,110,290
- 7,242,06021,697,467 3,425,69225,123,159
As at 1st April 2013
3,345,11711,110,290
- 7,242,06021,697,467 3,425,69225,123,159
Profit for the year -
-
-
2,397,946
2,397,946
420,565
2,818,511
Other Comprehensive Income
-
-
-
(4,242)
(4,242)
(618)
(4,860)
-
-
-2,393,7042,393,704 419,9472,813,651
Transferred to Revenue Reserve Note (a)
-
(4,496)
-
4,496
-
-
Transferred to Revenue Reserve (Note b)
-
(10,911)
-
10,911
-
-
Share Based Payments (Note 28.4)
-
-
17,966
-
17,966
-
17,966
-
-
- (1,328,326) (1,328,326)
- (1,328,326)
-
-
-
(442,775)
(442,775)
-
(442,775)
(226,360)
(226,360)
(169,770)
(169,770)
As at 31st March 2014
3,345,11711,094,883
17,966 7,880,07022,338,036 3,449,50925,787,545
Note (a) According to the Sri Lanka Accounting Standard - 16 "Property, Plant and Equipment", the Revaluation Surplus included in the Equity can
be transferred to Retained Earnings when the surplus is realised. Accordingly, the surplus realised amounting to Rs. 4.49 Mn (Rs. 13.41 Mn in
2013) has been transferred directly to Retained Earnings as at the reporting date.
Note (b) According to the Sri Lanka Accounting Standard - 16 "Property, Plant and Equipment", when the revalued asset is used by an entity,
the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost is
transferred from revaluation surplus to retained earnings amounting to Rs.10.91 Mn. (Rs.14.75 Mn in 2013).
148
Other
StatedRevaluation
Capital Retained
Total
CapitalReserveReserveEarnings Equity
COMPANYRs.’000Rs.’000Rs.’000Rs.’000Rs.’000
As at 1st April, 20123,345,1174,772,950
-5,247,994
13,366,061
Profit for the year
-
-
-
2,292,137 2,292,137
Other Comprehensive Income-
5,842,595--
5,842,595
-5,842,595
-2,292,1378,134,732
-
(13,418)
-
13,418
-
-
- (1,328,326) (1,328,326)
-
-
-
(442,775)
(442,775)
As at 31st March, 2013 3,345,11710,602,127
- 5,782,44819,729,692
As at 1st April, 2013 3,345,11710,602,127
- 5,782,44819,729,692
Profit for the year 2013/2014
-
-
-
2,379,212
2,379,212
Other Comprehensive Income---
(3,768)
(3,768)
Total Comprehensive Income---
2,375,444
2,375,444
-
(4,496)
-
4,496
Share Based Payments (Note 28.5)
-
-
14,470
-
14,470
-
-
- (1,328,326) (1,328,326)
-
-
-
(442,775)
(442,775)
As at 31st March, 2014 3,345,11710,597,631
14,470 6,391,28720,348,505
Note (a) According to the Sri Lanka Accounting Standard - 16 “Property, Plant and Equipment”, the Revaluation surplus included in the Equity can
be transferred to Retained Earnings when the surplus is realised. Accordingly, the surplus realised amounting to Rs. 4.49 Mn (Rs. 13.41 Mn in
2013) has been transferred directly to Retained Earnings as at the reporting date (Refer Note No 28 on page 168 for details).
149
Notes To The Financial Statements
1. REPORTING ENTITY
is a public limited liability Company
incorporated and domiciled in Sri
Lanka and listed on the Colombo
Stock Exchange. The registered office
and principal place of business of the
company is located at No.77, Galle Road,
Colombo 03. The consolidated financial
statements of the Company as at and for
the year ended 31st March 2014 comprise
the financial information of the Company
and its subsidiary; Trans Asia Hotels PLC
(together referred to as the ‘Group’ and
individually as ‘Group entities’).
The principal activities of the Company
and the Group during the year were
hoteliering and property development.
There were no significant changes in
the nature of the principal activities of
the Company and the Group during the
financial year under review.
The Group had 2,089 (2,067 in 2013)
employees and the Company had 1,234
(1,225 in 2013) employees as at the
Balance Sheet date.
2. BASIS OF PREPARATION
(a) Statement of compliance
The Financial Statements of the Company
and the Group comprise the statements of
financial position, income, comprehensive
income, changes in equity and cash flows
together with the notes to the Financial
Statements. The consolidated Financial
Statements have been prepared in
accordance with Sri Lanka Accounting
Standards (LKAS/SLFRS) laid down by
the Institute of Chartered Accountants
of Sri Lanka and the requirements of
Companies Act No. 7 of 2007.
The Consolidated Financial Statements
were authorised for issue by the Board of
Directors on 28th May 2014.
(b) Bases of Measurement
The Financial Statements have been
prepared on an accrual basis and under
the historical cost convention except for
followings.
•
•
•
•
•
•
Freehold Land and Buildings which
are measured at cost, at the time
of acquisition are subsequently
recognised at revalued amounts,
less accumulated depreciation and
impairment cost if any.
Investment properties are stated at
fair values.
Defined benefit obligations are
measured at its present value,
based on an actuarial valuation as
explained in Note 30.
Staff loans are stated at amortised
cost.
(c) Presentation and Functional Currency
The Consolidated Financial Statements
are presented in Sri Lankan Rupees. Each
entity in the Group uses the currency
of the primary economic environment
in which they operate as their functional
currency. All values are rounded to the
nearest rupees thousand (Rs.’000) except
when otherwise indicated.
(d) Use of estimates and judgments
The preparation of the consolidated
financial statements in conformity with
LKAS/SLFRS requires management
to make judgments, Estimates and
assumptions that affect the application
of accounting policies and the reported
amounts of assets, liabilities, income and
expenses. Actual results may differ from
these estimates. Estimates and underlying
assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates
are recognised in the period in which the
estimates are revised and in any future
periods affected
Judgments made by management in
the application of LKAS/SLFRs that
150
have a significant effect on the Financial
Statements are mentioned below.
•
•
Valuation of Property, Plant and
Equipment-Note (d)
Valuation of investment propertyNote (f)
Deferred taxation - Note (s) (ii)
Defined Benefit Plans- Note (k) (ii)
3. COMPARATIVE INFORMATION
The presentation and classification of the
financial statements of the previous years
have been amended, where relevant for
better presentation and to be comparable
with those of the current year.
4. ACCOUNTING POLICIES
The Accounting Policies set out below
have been applied consistently to
all periods presented in the financial
statements of the Company and the
Group unless otherwise indicated.
(a)
Basis of consolidation
(i) Business combinations
Business combinations are accounted
for using the acquisition method as at
the acquisition date - i.e. when control
is transferred to the Group. Control is
the power to govern the financial and
operating policies of an entity so as
to obtain benefits from its activities. In
assessing control, the Group takes into
consideration potential voting rights that
are currently exercisable.
(ii) Non-controlling interests
For each business combination, the
Group elects to measure any noncontrolling interests in the acquiree either:
•
•
At fair value; or
At their proportionate share of the
acquiree’s identifiable net assets,
which are generally at fair value.
Changes in the Group’s interest in a
subsidiary that do not result in a loss of
control are accounted for as transactions
with owners in their capacity as owners.
Adjustments to non-controlling interests
are based on a proportionate amount of
the net assets of the subsidiary.
(iii)Subsidiaries
Subsidiaries are those enterprises
controlled by the parent. Control exists
when the parent has the power, directly
or indirectly to govern the financial and
operating policies of an enterprise.
Subsidiaries are controlled from the date
the parent obtains control until the date
that control ceases. Asian Hotels and
Properties PLC has the power to directly
govern the financial and operating policies
of Trans Asia Hotels PLC, accordingly
the entity is considered as a subsidiary
of Asian Hotels and Properties PLC.
The total profits and losses for the year,
of the Company and of its Subsidiaries
included in consolidation and all assets
and liabilities of the Company and of its
Subsidiaries included in consolidation are
shown in the consolidated statements
of Income, other comprehensive income
and financial position respectively. Minority
interests which represents the portion of
profit or loss and net assets not held by
the Group, are presented separately in the
consolidated income statement and within
equity in the consolidated Statement of
financial position, separately from parent
shareholders’ equity. The consolidated
cash flow statement includes the cash
flows of the Company and its Subsidiaries.
(iv) Loss of control
On the loss of control, the Group
derecognises the assets and liabilities
of the subsidiary, any non-controlling
interests and the other components
of equity related to the subsidiary. Any
surplus or deficit arising on the loss of
control is recognised in profit or loss. If the
Group retains any interest in the previous
subsidiary, then such interest is measured
151
at fair value at the date that control is
lost. Subsequently that retained interest
is accounted for as an equity-accounted
investee or as an available-for-sale financial
asset depending on the level of influence
retained.
(v) Transactions eliminated on
consolidation
Intra-group balances and transactions,
and any unrealised income and expenses
arising from intra-group transactions, are
eliminated in preparing the Consolidated
(b) Foreign currency transactions
Transactions in foreign currencies are
translated to the respective functional
currencies of Group entities at exchange
rates at the dates of the transactions.
Monetary assets and liabilities
denominated in foreign currencies at
the reporting date are retranslated to the
functional currency at the exchange rate at
that date.
The foreign currency gain or loss on
monetary items is the difference between
amortised cost in the functional currency
at the beginning of the year, adjusted for
effective interest and payments during the
year, and the amortised cost in foreign
currency translated at the exchange rate at
the end of the year. Non-monetary assets
and liabilities that are measured at fair
value in a foreign currency are retranslated
to the functional currency at the exchange
rate at the date that the fair value was
determined. Non-monetary items that
are measured based on historical cost
in a foreign currency are translated using
the exchange rate at the date of the
transaction. Foreign currency differences
arising on retranslation are recognised in
profit or loss.
(c)
(i)
Financial instruments Financial assets
Initial recognition and measurement
Financial assets within the scope of
LKAS 39 are classified as financial
assets at fair value through profit or loss,
loans and receivables, held-to-maturity
investments, available-for-sale financial
assets, or as derivatives designated as
hedging instruments in an effective hedge,
as appropriate. The Company and the
Group determine the classification of its
financial assets at initial recognition. All
financial assets are recognised initially at
fair value plus, in the case of assets not
at fair value through profit or loss, directly
attributable transaction costs. Purchases
or sales of financial assets that require
delivery of assets within a time frame
established by regulation or convention in
the marketplace (regular way trades) are
recognised on the trade date, i.e., the date
that the Company and the Group commit
to purchase or sell the asset. Financial
Assets could be categorised into four
categories, namely
•
•
•
•
Fair value through profit and loss
Available for sale
Held to maturity
Loans and receivables
However, as at each reporting date, the
Company and the Group hold on only the
financial assets categorised as ‘loans and
receivables’.
The Company and the Group initially
recognise such loans and receivables on
the date that they are originated.
Financial assets and liabilities are offset
and the net amount presented in the
statement of financial position when, and
only when the Company and the Group
have a legal right to offset the amounts
and intends either to settle them on a net
basis or to realise the asset and settle the
liability simultaneously.
Notes To The Financial Statements contd.
Subsequent measurement
The subsequent measurement of financial
assets depends on their classification and
the Company and the Group only hold
financial assets categorised as loans &
receivables.
Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an
active market. After initial measurement,
such financial assets are subsequently
measured at amortised cost using the
Effective Interest Rate method (EIR), less
impairment. Amortised cost is calculated
by taking into account any discount or
premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR
amortisation is included in finance income
in the income statement. The losses
arising from impairment are recognised in
the income statement in finance costs.
De-recognition
A financial asset is de-recognised when:
•
The rights to receive cash flows
from the asset have expired
•
The Company and the Group have
transferred its rights to receive
cash flows from the asset or has
assumed an obligation to pay the
received cash flows in full without
material delay to a third party under
a ‘pass through’ arrangement; and
either
a) The Company and the Group have
transferred substantially all the risks
and rewards of the asset, or
(b) The Company and the Group have
neither transferred nor retained substantially all the risks and rewards
of the asset, but has transferred
control of the asset.
152
When the Company and the Group have
transferred its rights to receive cash flows
from an asset or has entered into a pass
through arrangement, and has neither
transferred nor retained substantially all
of the risks and rewards of the asset
nor transferred control of it, the asset is
recognised to the extent of the Company
and the Group’s continuing involvement
in it. In that case, the Company and the
Group also recognise an associated
liability. The transferred asset and the
associated liability are measured on
a basis that reflects the rights and
obligations that the Company and the
Group have retained
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope
of LKAS 39 are classified as financial
liabilities at fair value through profit or loss,
other financial liabilities, or as derivatives
designated as hedging instruments in
an effective hedge, as appropriate. The
Company and the Group determine the
classification of its financial liabilities at
initial recognition.
When a financial liability is recognised
initially, an entity shall measure it at its
fair value plus, in the case of a financial
liability not at fair value through profit or
loss, transaction costs that are directly
attributable to the acquisition or issue of
financial liability. The Company and the
Group classify financial liabilities into the
other financial liabilities category. Such
financial liabilities are recognised initially
at fair value less any directly attributable
transaction costs.
Subsequent measurement
The measurement of financial liabilities
depends on their classification and
the Company and the Group only hold
financial liabilities categorised as other
financial liabilities.
Other liabilities
After initial recognition, other liabilities are
subsequently measured at amortised cost
using the effective interest rate method.
Gains and losses are recognised in the
income statement when the liabilities
are derecognised as well as through
the effective interest rate method (EIR)
amortisation process.Amortised cost is
calculated by taking into account any
discount or premium on acquisition and
fees or costs that are an integral part of
the EIR. The EIR amortisation is included in
finance costs in the income statement.
De-recognition
A financial liability is de-recognised
when the obligation under the liability is
discharged or canceled or expires.When
an existing financial liability is replaced
by another from the same lender on
substantially different terms, or the terms
of an existing liability are substantially
modified, such an exchange or
modification is treated as a de-recognition
of the original liability and the recognition
of a new liability, and the difference in the
respective carrying amounts is recognised
in the income statement.
(iii) Fair value measurement
The management assessed that cash
at bank and short-term deposits, trade
receivables, trade payables, bank
overdrafts and other current financial
liabilities approximate their carrying
amounts largely due to the short-term
maturities of these instruments.
The fair value of the financial assets and
liabilities is included at the amount at
which the instrument could be exchanged
in a current transaction between willing
parties, other than in a forced or liquidation
sale.
(d) Property, Plant, and Equipment
Basis of Recognition
Property, plant and equipment are
recognised if it is probable that future
economic benefits associated with
the asset will flow to the company and
the cost of the asset can be reliably
measured.
income reduces the amount accumulated
in equity under the heading of revaluation
surplus.
Basis of measurement
All items of Property, Plant and Equipment
are initially recorded at cost. Where
items of property, plant and equipment
are subsequently revalued, the entire
class of such assets is revalued at fair
value. The Group applies cost model to
property, plant and equipment except for
land and buildings and records at cost
of purchase or construction together
with any incidental expenses thereon
less accumulated depreciation and any
accumulated impairment losses. The
carrying values of Property Plant and
Equipment are reviewed for impairment
when events or changes in circumstances
indicate that the carrying value may not be
recoverable.
The revaluation surplus included in equity
in respect of an item of property, plant
and equipment may be transferred directly
to retained earnings when the asset is
derecognised.
The Group applies the re-valuation model
to land and buildings. The Group has
adopted a policy of revaluing assets every
five years.
If an asset's carrying amount is
increased as a result of a revaluation,
the increase shall be recognised in other
comprehensive income and accumulated
in equity under the heading of revaluation
surplus. However, the increase shall be
recognised in profit or loss to the extent
that it reverses a revaluation decrease of
the same asset previously recognised in
profit or loss.
If an asset's carrying amount is decreased
as a result of a revaluation, the decrease
shall be recognised in profit or loss.
However, the decrease shall be
recognised in other comprehensive
income to the extent of any credit balance
existing in the revaluation surplus in
respect of that asset. The decrease
recognised in other comprehensive
153
De-recognition
An item of property, plant and equipment
are de-recognised upon replacement,
disposal or when no future economic
benefits are expected from its use.
Any gain or loss arising on de-recognition
of the asset is included in the income
statement in the year the asset is derecognised.
Depreciation
Depreciation is calculated by using
a straight-line method on the cost or
valuation of all property, plant and
equipment, other than freehold land, in
order to write off such amounts over the
estimated useful economic life of such
assets. The estimated useful life of assets
is as follows:
Asset Class
Years
Buildings75
Plant and Machinery
10-20
Motor Vehicles 4-10
Floating Restaurant
18
Furniture, Fittings and Equipment
5-15
Computers5
Base Stock/Circulating Assets
3-10
The asset’s residual values and useful lives
are reviewed, and adjusted if appropriate,
at each financial year end.
Buildings of the subsidiary are depreciated
using reducing balance method in order to
depreciate over the balance lease period
of 66 years.
Depreciation of an assets ceases at
the earlier of the date that the asset is
classified as held for sale and the date that
asset is de-recognised.
(e) Leasehold property
Prepaid lease rentals paid to acquire land
use rights are amortised over the lease
term in accordance with the pattern of
benefits provided. Leasehold property
comprising of land use rights and stated at
valuation, are amortised on a straight line
basis over the remaining lease term.
Trans Asia Hotels PLC - The leasehold
land is for 99 years commencing 7th
August 1981 and is being amortised over
a period of 94 years commencing from 1st
April 1986.
(f) Investment properties
Basis of Recognition
Investment properties are initially
recognised at cost. Subsequent to initial
recognition the Investment Properties are
stated at fair value, which reflects market
conditions at the Statement of Financial
Position date.
Basis of Measurement
Investment properties are revalued where
necessary to ensure that the carrying
amount does not differ materially from fair
values at the Balance Sheet date, and
are revalued at least once in three years.
Gains or losses arising from changes in
fair value are included in the profit or loss
in the year in which they arise. Investment
Properties are de-recognised when
disposed of, or permanently withdrawn
from use because no future economic
benefits are expected.
Any gains or losses on retirement or
disposal are recognised in profit or loss
in the year of retirement or disposal.
Transfers are made to and from Investment
Property only when there is a change in
use in accordance with the criteria listed
in Sri Lanka Accounting Standard 40
“Investment Property” (LKAS 40).
(g) Intangible assets
An intangible asset is an identifiable non
monitory asset without physical substance
held for use in the production or supply
goods or other services, rental to others or
for administrative purposes. An intangible
asset is initially recognised at cost, if it is
probable that future economic benefit will
flow to the enterprise, and the cost of the
asset can be measured reliably. Following
initial recognition, intangible assets are
carried at cost less any accumulated
amortisation and any accumulated
impairment losses.
(i) Computer software
All computer software costs incurred,
licensed for use by the Group, which
are not integrally related to associated
hardware, which can be clearly identified,
reliably measured and it’s probable that
they will lead to future economic benefits,
are included in the Financial Position under
the category intangible assets and carried
at cost less accumulated amortisation and
any accumulated impairment losses.
(ii)Amortisation
Intangible assets with finite lives are
amortised over the estimated useful
economic life and assessed for
impairment whenever there is an indication
that the intangible asset may be impaired.
Intangible assets are amortised on a
straight line basis in the Income Statement
from the date on which the asset was
available for use, over the best estimate
of its useful life. The estimated useful life
of software is 5 years. The amortisation
period and the amortisation method for
an intangible asset with a finite useful life
are reviewed at least at each financial
year-end.
Amortisation shall cease at the earlier
of the date that the asset is classified
as held for sale or the date that asset is
derecognised.
154
(iii)De-recognition
An intangible asset is de-recognised on
disposal or when no future economic
benefits are expected from its use and
subsequent disposal.
(h)Inventories
Inventories are valued at the lower of cost
and net realisable value. Net realisable
value is the estimated selling price less
estimated costs of completion and the
estimated costs necessary to make the
sale.
(i) Cash and Cash Equivalents
Cash and short-term deposits in the
statement of financial position comprise
cash at banks and on hand and shortterm deposits with a maturity of three
months or less. For the purpose of the
cash flow statement, cash and cash
equivalents consist of cash and shortterm deposits as defined above, net of
outstanding bank overdrafts.
(j)Impairment
The recoverable amount of an asset
or Cash Generating Unit (CGU) is the
greater of its value in use and its fair value
less costs to sell. In assessing value in
use, the estimated future cash flows are
discounted to their present value using a
pre-tax discount rate that reflects current
market assessments of the time value of
money and the risks specific to the asset
or CGU. or impairment testing, assets
are grouped together into the smallest
group of assets that generates cash
inflows from continuing use that are largely
independent of the cash inflows of other
assets or CGUs. Impairment losses are
recognised in profit or loss. Impairment
losses recognised in respect of CGUs are
allocated to reduce the carrying amounts
of the other assets in the CGU (group of
CGUs) on pro-rata basis.
For other assets, an impairment loss
is reversed only to the extent that the
asset’s carrying amount does not exceed
the carrying amount that would have
been determined, net of depreciation or
amortisation, if no impairment loss had
been recognised.
(i) Financial assets
Financial assets are assessed at each
reporting date to determine whether there
is objective evidence that it is impaired.
A financial asset is impaired if there is
objective evidence of impairment as a
result of one or more events that occurred
after the initial recognition of the asset, and
that loss event(s) had an impact on the
estimated future cash flows of that asset
that can be estimated reliably.
Objective evidence that financial
assets are impaired includes default or
delinquency by a debtor, restructuring of
an amount due to the Company on terms
that the Company and the Group would
not consider otherwise, indications that
a debtor or issuer will enter bankruptcy,
adverse changes in the payment status
of borrowers or issuers, economic
conditions that correlate with defaults or
the disappearance of an active market for
a security.
The Company and the Group consider
evidence of impairment for financial assets
measured at amortised cost (loans and
receivables) at specific asset level. All
individually significant assets are assessed
for specific impairment.
An impairment loss in respect of a financial
asset measured at amortised cost is
calculated as the difference between
its carrying amount and the present
value of the estimated future cash flows
discounted at the asset’s original effective
interest rate. Losses are recognised in
profit or loss and reflected in an allowance
account against loans and receivables
or held-to maturity investment securities.
Interest on the impaired asset continues to
be recognised. When an event occurring
after the impairment was recognised
causes the amount of impairment loss to
decrease, the decrease in impairment loss
is reversed through profit or loss.
(ii) Non-financial assets
The carrying amounts of the Company
and the Group non-financial assets, other
than inventories and deferred tax assets,
are reviewed at each reporting date to
determine whether there is any indication
of impairment. If any such indication
exists, then the asset’s recoverable
amount is estimated. An impairment loss
is recognised if the carrying amount of an
asset exceeds its recoverable amount.
(k)
Employee Benefits
(i) Defined contribution plans
Employees’ Provident Fund and
Employees’ Trust Fund (EPF & ETF) are
recognised as incurred.
Employees are eligible for Employees’
Provident Fund contributions and
Employees’ Trust Fund contributions in line
with respective statutes and regulations.
The Company and the Group contribute
15% and 3% of gross emoluments of
employees to Employees’ Provident Fund
and Employees’ Trust Fund respectively.
(ii) Defined benefit plans
A defined benefit plan is a postemployment benefit plan other than a
defined contribution plan.
The Company and the Group are liable to
pay retirement benefits under the Payment
of Gratuity Act, No. 12 of 1983.
The liability recognised in the statement
of financial position is the present value
of the defined benefit obligation at the
reporting date.
The defined benefit obligation is calculated
by a qualified actuary as at the reporting
date using the Projected Unit Credit
155
(PUC) method as recommended by LKAS
19 - ‘Employee Benefits’. Such actuarial
valuations will be carried out every year.
•
The liability is not externally funded. All
Actuarial gains or losses are recognised
immediately in the other comprehensive
income. Under the Payment of Gratuity
Act No. 12 of 1983, the liability to an
employee arises only on completion of 5
years of continued service.
•
(l)Provisions
Provisions are recognised when the
Company and the Group have a present
obligation (legal or constructive) as a
result of a past event, it is probable that
an outflow of resources embodying
economic benefits will be required to
settle the obligation and a reliable estimate
can be made of the amount of the
obligation. Where the Company and the
Group expect some or all of a provision
to be reimbursed, for example under an
insurance contract, the reimbursement
is recognised as a separate asset but
only when the reimbursement is virtually
certain. The expense relating to any
provision is presented in the income
statement net of any reimbursement.
If the effect of the time value of money
is material, provisions are discounted
using a current pre-tax rate that reflects,
where appropriate, the risks specific to
the liability. Where discounting is used,
the increase in the provision due to the
passage of time is recognised as a finance
cost.
(m) Contingent Assets and Contingent
Liabilities
All contingent liabilities are disclosed as
a note to the financial statements unless
the outflow of resources is remote.
A contingent liability recognised in a
business combination is initially measured
at its fair value. Subsequently, it is
measured at the higher of:
The amount that would be recognised in accordance with the general guidance for provisions above
(LKAS 37) or
The amount initially recognised
less, when appropriate, cumulative
amortisation recognised in accordance with the guidance for revenue
recognition (LKAS 18)
Contingent assets are disclosed, where
inflow of economic benefit is probable but
not virtually certain.
(n) Revenue recognition
Revenue is recognised to the extent that
it is probable that the economic benefits
will flow to the Group, and the revenue
and associated costs incurred or to
be incurred can be reliably measured.
Revenue is measured at the fair value of
the consideration received or receivable,
net of trade discounts and value added
taxes, after eliminating sales within the
Group. The following specific criteria are
used for recognition of revenue:
(i) Sale of Apartments
Revenue has been recognised on
apartment sales of ‘The Emperor’ up to
the maximum of percentage completion or
cash paid by the buyer whichever is lower.
(ii) Income from Hotel/Restaurants
Revenue is recognised on the rooms
occupied on daily basis and food and
beverages and hotel related sales are
accounted for at the time of sale.
(iii) Interest Income
Interest income is recognised on an
accrual basis.
(iv) Rental Income
Rental income is recognised on an accrual
basis.
(v) Dividend Income
Dividend income is recognised on a cash
basis.
(vi) Other Gains and Losses
Net gains and losses of a revenue nature
arising from the disposal of property,plant
and equipment and other noncurrent
assets, including investments, are
accounted for in the income statement,
after deducting from the proceeds on
disposal, the carrying amount of such
assets and the related selling expenses.
(vii) Other Income
Other income is recognised on an
accrual basis. Net gains and losses of a
revenue nature arising from the disposal
of property, land and equipment and
other non current assets, including
investments, are accounted for in the
income statement, after deducting from
the proceeds on disposal, the carrying
amount of such assets and the related
selling expenses. Gains and losses
arising from activities incidental to the
main revenue generating activities and
those arising from a Group of similar
transactions, which are not material are
aggregated, reported and presented
on a net basis. Any losses arising from
guaranteed rentals are accounted for in
the year of incurring the same. A provision
is recognised if the projection indicates a
loss.
(o) Expenditure recognition
Expenses are recognised in the income
statement on the basis of a direct
association between the cost incurred and
the earning of specific items of income.
All expenditure incurred in the running
of the business and in maintaining the
property,plant and equipment in a state
of efficiency has been charged to the
income statement. For the purpose of
presentation of the income statement, the
“function of expenses” method has been
adopted, on the basis that it presents fairly
the elements of the Company and Group’s
performance.
156
(p) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production
of an asset that necessarily takes a
substantial period of time to get ready for
its intended use or sale are capitalised as
part of the cost of the respective assets.
All other borrowing costs are expensed
in the period they occur. Borrowing costs
consist of interest and other costs that
the Group incurs in connection with the
borrowing of funds.
(q) Guaranteed Rental
Losses if any, of guaranteed rentals will
be accounted for in the year in which they
occur. A provision is recognised if the best
estimate indicates a loss.
(r) Segment Reporting
A segment is a distinguishable component
of the Company that is engaged either
in providing products or services which
are subject to risks and rewards that are
different from those of other segments.
The rental income generated from the
Commercial Centre which is categorised
as Investment Property is shown
separately.
(s) Income Tax Expenses
Income tax expenses comprise of current
and deferred tax.
(i) Current Taxation
The subsidiary company is liable for
taxation at a rate of 12% in terms of
Section 46(1) of the Inland Revenue Act
No.10 of 2006 amendments thereto, on its
profits derived from “promotion of tourism”.
The Group is liable for Income Tax on any
other income at 28%.
In accordance with BOI agreement dated
11th March 1994 the profits and income of
the company were exempt from taxation
until year 2014. The Board of Directors
of the company resolved to compute the
income tax payable at 2% of the turnover
of the company with effective from 1st
April 2014.
(ii) Deferred Taxation
Deferred taxation is provided using the
Statement of Financial Position liability
method providing for temporary difference
between the carrying amount of assets
and liabilities for financial reporting
purposes and the amounts used for
taxation purposes. The amount of deferred
tax provided is based on the expected
manner of realisation or settlement of the
carrying amount of assets and liabilities
using tax rates enacted or substantively
enacted by the reporting date. Deferred
tax assets including those related to
tax effects of income tax losses and
credits available to be carried forward,
are recognised only to the extent that it is
probable that future taxable profit will be
available against which the asset can be
utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to
the extent that is no longer probable that
the related tax benefit will be realised.
(t) Events after the Reporting Period
All material events after the reporting date
has been considered and appropriate
adjustments or disclosures have been
made in the respective Notes to the
(u) Cash Flow Statement
The Cash Flow Statement has been
prepared using the “Indirect Method” of
preparing Cash Flows in accordance with
the Sri Lanka Accounting Standard LKAS
7. The cash and cash equivalent include
cash in-hand, balances with banks and
money at call and short notice.
(v) Directors’ Responsibility
The Board of Directors is responsible for
the preparation and presentation of the
financial statements. This is more fully
described under the relevant clause in the
Directors’ Report.
(w) Share based payment
In accounting for employee remuneration
in the form of shares, SLFRS 2- Share
Based Payments, is effective for the
Company’s Parent entity John Keells
Holdings PLC, from the financial year
beginning 2013/14.
Employees of the Company receive
remuneration in the form of sharebased payment transactions, whereby
employees render services as
consideration for equity instruments of the
Parent entity John Keells Holdings PLC
(equity-settled transactions). The cost of
the employee services received in respect
of the shares or share options granted
is recognised in the Income statement
over the period that employees provide
services, from the time when the award
is granted up to the vesting date of the
options. The overall cost of the award
is calculated using the number of share
options expected to vest and the fair value
of the options at the date of grant.
The employee remuneration expense
resulting from the Group’s share option
scheme to the employees of Asian Hotels
and Properties PLC is recognised in the
income statement of the company. This
transaction does not result in a cash
outflow to the company and expense
recognised is met with a corresponding
equity reserve increase, thus having
no impact on the Statement of financial
Position (SOFP). The fair value of the
options granted is determined by the
Group using an option model and the
relevant details are communicated by
the Group to all applicable subsidiary
companies.
(x) New Accounting Standards Not
Effective at the Reporting Date
The Institute of Chartered Accountants of
Sri Lanka has issued the following new Sri
Lanka Accounting Standards which will
become applicable for financial periods
157
beginning on or after 1st January 2014/
2015.Accordingly, these Standards have
not been applied in preparing these
Sri Lanka Accounting Standard - SLFRS
13, “Fair Value Measurement”
This SLFRS defines fair value, sets out in a
single SLFRS a framework for measuring
fair value; and requires disclosures about
fair value measurements. This SLFRS will
become effective from 01st January 2014.
This SLFRS shall be applied prospectively
as of the beginning of the annual period in
which it is initially applied. The disclosure
requirements of this SLFRS need not
be applied in comparative information
provided for periods before initial
application of this SLFRS.The Company
has started the process of evaluating the
potential effect of this. Although many
of the IFRS 13 disclosure requirements
regarding financial assets and financial
liabilities are already required, the adoption
of IFRS 13 will require the Company to
provide additional disclosures. Given
the nature of the Company’s operations,
this standard is not expected to have
a pervasive impact on the Company’s
financial statements.
Sri Lanka Accounting Standard –
SLFRS 9 “Financial Instruments”
The objective of this SLFRS is to establish
principles for the financial reporting of
financial assets and financial liabilities that
will present relevant and useful information
to users of financial statements for their
assessment of the amounts, timing and
uncertainty of an entity’s future cash flows.
An entity shall apply this SLFRS to all
items within the scope of LKAS 39
Financial Instruments: Recognition and
Measurement.
The effective date of this Standard has
been deferred.
GroupCompany
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000
5.REVENUE
Gross Revenue
Value Added Tax
Net Revenue
9,301,1848,875,7615,976,6295,669,197
(1,045,035)(984,783)(659,943)(618,442)
8,256,1497,890,9785,316,6865,050,755
6. DIVIDEND INCOME
Dividend from Subsidiary (Trans Asia Hotels PLC)
--
273,493234,422
--
273,493234,422
7. OTHER OPERATING INCOME
Exchange Gain
19,17211,78212,9898,642
Profit/(Loss) on Disposal of Property, Plant & Equipment
(4,347)191
(6,983)(4,864)
Car Park Income
16,94416,46316,94416,463
Promotional Income
18,65818,97018,65818,970
Taxi Line Commission
11,3979,593
11,3979,593
Sundry Income
13,72214,309 9,25610,270
75,54671,30862,26159,074
8. FINANCE COST
Finance cost on other financial instruments
3,287455
3,249359
3,287455
3,249359
9. FINANCE INCOME
Interest income on loans to employees
2,1972,1722,1972,172
Income from short term investments
302,845309,848247,586245,015
305,042312,020249,783247,187
158
GroupCompany
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000
10. PROFIT BEFORE TAX
Profit Before Tax is stated after charging all expenses
including the following
Remuneration to Executive Directors
Remuneration to Non Executive Directors
55,32751,51255,32751,512
6,0005,8802,8802,880
Remuneration to Auditors
Audit service fee
Audit related service fee
1,5001,413 960913
465662335462
Defined benefit plan cost
39,73237,68321,20820,679
Defined contribution plan cost - EPF and ETF
116,334105,307 74,08966,107
Staff Expenses
1,174,0551,110,442 700,534610,360
Depreciation of Property, Plant and Equipment
455,964412,314266,153244,784
Amortisation Lease Hold Property
12,40412,404
-
Donations
21,08710,94813,9836,852
Amortisation of Intangible Assets
3,9125,259 397585
Impairment losses on Trade and other receivables
8,4807,9351,3287,524
Impairment losses on Insurance Claim Receivable
- 3,926
- -
11. INCOME TAX EXPENSE
Current tax charge (Note 11.1)
189,466187,259 69,02567,323
Provision for Deferred tax (Note 11.2)
8,09825,559
- 10% Withholding tax on inter company dividends
30,38826,047
-
227,952238,865 69,02567,323
The Profits of Trans Asia Hotels PLC, being involved in the promotion of tourism has been taxed on its adjusted profit at 12% in terms of
the Inland Revenue Act Number 10 of 2006 and the amendment thereto. Income Tax on other income has been provided at the normal
tax rate of 28% (28% in 2013).
Income tax of Asian Hotels and Properties PLC (Company) on other income has been provided at the normal tax rate of 28%
(28% in 2013).
159
GroupCompany
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000
11.1 Reconciliation between Income Tax Expense
and the Product of Accounting Profit
Profit Before Tax
Exempt Profits
Accounting profit chargeable to income taxes
3,046,4633,328,0312,448,2372,358,225
(2,202,644)(2,121,474)(2,201,718)(2,119,995)
843,8191,206,557 246,519238,230
Tax effect on chargeable profits
190,583226,026 69,02566,704
Tax effect on disallowable Expenses
5,298(25,194)
-
Qualifying Payment Relief
(170)(172)
-
Tax effect on adjustment to opening Deferred tax liability
(20)14,055
-
Under/(Over) provision for previous years
1,873(1,897)
-619
Tax on inter company dividend
30,38826,047
-
227,952238,865 69,02567,323
Income Tax charged at
Standard rate 28% - CSE Listed Companies (2013 - 28%)
Concessionary rate of 12% - (2013 - 12%)
Under provision for previous years
Charge for the year
11.2 Provision for Deferred Tax
Deferred Tax arising from
Accelerated Depreciation for tax purposes
Post-Employment Medical Benefits
Total Deferred Tax Charge
98,88591,21569,02566,704
88,70897,941
- 1,873(1,897)
- 619
189,466187,259 69,02567,323
9,12325,425
(1,025)134
8,09825,559
-
-
--
12. EARNINGS PER SHARE
The Basic Earnings per Share is based on the profit attributable to equity holders' of Asian Hotels & Properties PLC.
Net Profit for the Year
Number of Ordinary Shares
Basic Earnings per Share (Rs.)
160
2,397,9462,490,0292,379,2122,290,902
442,775442,775442,775442,775
5.425.635.375.18
GroupCompany
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000
13. DIVIDEND PER SHARE
- 1,328,326
- 1,328,326
- 442,775
- 442,775
1,328,326
-
1,328,326Interim Dividend Paid - 2013/2014
442,775-442,775Total Dividends
1,771,1011,771,1011,771,1011,771,101
4.00 Dividend Per Share (Rs.)
4.00 4.00
4.00 14. PROPERTY, PLANT AND EQUIPMENT
14.1Group
Outdoor Base Furniture, Capital Freehold Car Park
Plant &
Stock & Fittings &
Motor
Work In
Total
Total
Land
Buildings
Development
Machinery Circulating
Equipment
Vehicles
Progress20142013
As at 31st March
Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000
Cost or Valuation
At the Beginning of the Year
10,018,325 6,209,514
11,783 1,191,495 1,202,187 1,642,306
79,582
72,649 20,427,841 14,266,890
Additions
-160,562
-118,453176,557191,776
210 25,958673,517489,098
Disposals
-
-
-(31,309)(42,017)(22,888) (175)
-(96,390)(56,770)
Revaluation Gain
---------
6,242,265
Depreciation adjustment on Revaluation---------
(513,642)
Transfers to investment property/others
At the end of the Year
-
71,080
10,018,325 6,441,156
Accumulated Depreciation
Charge for the Year
Disposals
12,202
-
11,783 1,278,154 1,339,063 1,823,396
-
(485)
2,336
79,617
-
-
3,145
694,753
654,348
749,009
17,603
-122,792 1,178 46,013162,082116,776 7,122
-
-
-(27,818)(34,555)(19,177) (176)
(85,619)
(486)
12,988 21,004,483 20,427,841
- 2,118,858 2,261,853
-455,964412,314
-(81,726)(41,667)
Transfers to cost
---------
(513,642)
-
Carrying Value
122,792
4,323
712,948
781,875
846,608
24,549
- 2,493,096 2,118,858
10,018,325
6,318,364 7,460565,206557,188976,788 55,066 12,988
18,511,385
10,018,325 6,209,514
8,638
496,742
547,839
893,297
61,979
72,649 18,308,983
(Note-14.1a) Freehold Land and Buildings of the Group were valued by M/s. P.B. Kalugalagedara & Associates, an independent Chartered Valuer as at 31st March 2013,
and the book values were written up to correspond with the valuation. Valuation Method used is Direct Capital Comparison Method.
Had the revalued Buildings of the Group been included at cost, the carrying value of the said asset would amount to Rs. 4,524 Mn. (Rs. 4,389 Mn in 2013) Had the revalued
Land of Group been included at cost, the carrying value of the said asset would amount to Rs. 470 Mn. (Rs. 470 Mn in 2013).
161
(Note-14.1b)
Details of Groups' Land and Building stated at valuation are indicated below:
Property
Land /Building Extent
Location
Company
Land 1
A08 - R0- P05.08
No 77, Galle Road, Colombo 03
Building - Stage(1)
348,818 Sq Ft
Building - Stage (11) & (111)
299,975 Sq Ft
Company
Building 1
145,196 Sq Ft
Subsidiary
Building 1
55,548 Sq Ft
No. 117, Sir Chittampalam A. Gardiner Mawatha, Colombo 02.
Land
A01 - R02- P30.0
Subsidiary
Building 1
316,067 Sq Ft
Land
A05 - R02- P34.28
Freehold Land and Building
Investment Properties
Leasehold Properties
(Note-14.1c) The Vessel of floating restaurant of the Subsidiary has been classified under Motor Vehicles.
(Note-14.1d) The cost of the fully depreciated assets which are still in use of the Group amounting Rs. 1,021.07 Mn. (Rs. 737.71 Mn in 2013).
(Note-14.1e) There are no assets pledged that required to disclose in the Group.
14.2Company
Outdoor Base Furniture, Capital Freehold Car Park
Plant &
Stock & Fittings &
Motor
Work In
Total
Total
Land
Buildings
Development
Machinery Circulating
Equipment
Vehicles
Progress20142013
As at 31st March
Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000
PROPERTY, PLANT AND EQUIPMENT
Cost or Valuation
10,018,325 3,901,771
11,783
720,179
481,373 1,002,668
14,643
11,395 16,162,137 10,468,217
Additions
- 7,167
- 76,968130,234 64,639
210 21,912301,131283,257
Disposals
-
-
-(16,090)(35,679)(10,176)
(97)
-(62,042)(45,497)
Revaluation Gain
---------
5,842,595
Depreciation adjustment on Revaluation
---------
(386,435)
Transfers to investment property / others
-
14,328-
(485)
2,506
12,032-
(28,866)
(486)At the end of the Year
11,783
780,572
578,434 1,069,163
14,757
4,441 16,400,741 16,162,137
Accumulated Depreciation
Charge for the Year
Disposals
-
-
3,145
459,977
236,885
427,400
5,591
-79,962 1,17826,78577,87877,409 2,940
-
-
-(16,093)(28,517) (7,302)
(97)
Transfers to revaluation
---------
(386,435)
-
Carrying Value
162
10,018,325 3,923,265
79,962
10,018,325
3,843,303
10,018,325 3,901,771
4,323
470,669
286,246
497,507
8,434
- 1,132,998 1,308,178
-
266,153
244,784
-(52,009)(33,529)
- 1,347,142 1,132,998
7,460309,903292,188571,656 6,322 4,441
15,053,598
8,638
260,202
244,488
575,268
9,052
11,395 15,029,139
(Note-14.2a) Had the revalued Buildings of the company been included at cost, the carrying value of the said asset would amount to Rs. 3,170 Mn. (Rs. 3,196 Mn in 2013)
Had the revalued Land been included at cost, the carrying value of the said asset would amount to Rs. 470 Mn. (Rs. 470 Mn in 2013).
(Note-14.2b) The cost of the fully depreciated assets which are still in use of the Company amounting Rs. 666.17 Mn. (in 2013 Rs. 390.58 Mn).
(Note-14.2c) There are no assets pledged that required to disclose in the Company.
14.3 Details of Group’s land, building and other properties stated at valuation are indicated below;
Method of
valuation
Effective date
of valuation
Property
valuer
Building on leasehold land of
Direct capital
31st March 2013
P.B. Kalugalagedara,
Trans Asia Hotels PLC.
comparison method
Chartered Valuation
Surveyor
Land and building of
Direct capital
31st March 2013
P.B. Kalugalagedara,
Asian Hotels and Properties PLC.
comparison method
Chartered Valuation
Surveyor
Group
As at 31st March
2014
2013
Rs.’000Rs.’000
15. LEASEHOLD PROPERTY
At the beginning of the year
831,068843,472
Amortisation for the year
(12,404)(12,404)
At the end of the year
818,664831,068
The leasehold property is amortised on a straight line basis over 74 years. The remaining period of Lease as at 31st March 2014 was 66
years.
15.1 Details of leasehold Property
Amount
Land extent
Lease
2014
2013
Property
(in acres)
period
Rs.’000
Rs.’000
Trans Asia Hotels PLC, Colombo
7.65
99 years from 07-08-1981
818,664
831,068
818,664831,068
163
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
16. INVESTMENT PROPERTY
3,618,7503,101,5401,860,5001,632,000
Additions
16,714
-
16,714Transfers
486
-
486Change in fair value during the year
268,564517,210268,564228,500
3,904,5143,618,7502,146,2641,860,500
16.1 Valuation details of investment property
Investment properties of the Group were valued by a qualified professional valuer as at 31st March 2014, details of which are as follows;
In order to adopt the Fair Value model on Investment Property, as per Sri Lanka Accounting Standard 40 “Investment Property” the Land
& Building classified as Investment Property of Asian Hotels and Properties PLC which includes Crescat Boulevard was valued by Mr.
P.B. Kalugalagedera, a Chartered Valuation Surveyor using investment method of valuation on 01st of April 2005 (date of adoption of the
Standard), 31st March 2006, 31st March 2007, 31st March 2009, 31st March 2011, 31st March 2012,31st March 2013 and 31st March
2014 respectively.
The Commercial Centre of Trans Asia Hotels PLC was valued by Messrs. A.Y. Daniel and Sons, a Professional Valuer using accredited
contractor (cost) method of valuation on 1st April 2005, 31st March 2006 and 31st March 2009 respectively. The Commercial Centre of
Trans Asia Hotels PLC was valued by Mr. P.B. Kalugalagedera, a Chartered Valuation Surveyor using the Market Value Method on 31st
March 2011, 31st March 2012 and 31st March 2013 respectively.
The valuation of the Investment property of the Trans Asia Hotels PLC has been obtained and confirmed that there is no change in value
of property as at 31st March 2014.
Rental Income earned from Investment Property by the Company and Group amounted to Rs. 288 Mn (Rs. 258 Mn in 2013) and Rs. 349
Mn (Rs.292 Mn in 2013) respectively. Direct Operating Expenses incurred by the Company and Group amounted to Rs. 79 Mn (Rs.75
Mn in 2013) and Rs. 86 Mn (Rs. 81 Mn in 2013) respectively.
Rental income earned from investment property by the Group amounts to Rs. 349 Mn (2013 - Rs. 301 Mn) and direct operating
expenses incurred by the Group amounted to Rs. 86 Mn (2013 - Rs. 81 Mn).
164
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
17. INTANGIBLE ASSETS
Computer Software
Cost
32,80431,218 8,7108,436
Additions
1,0201,586 697274
Transfers
(398)-
(398)
At the End of the Year
33,42632,804 9,0098,710
Accumulated Amortisation
24,28719,028 7,6487,063
Amortisation 3,9125,259 397585
Transfers
(38)-
(38)
28,16124,287 8,0077,648
Carrying value
As at 31st March
5,2658,5171,0021,062
COMPANY
As at 31st March
2014
2013
Rs.’000Rs.’000
18. INVESTMENTS IN SUBSIDIARIES
Carrying value
Investments in subsidiaries-Quoted
660,045660,045
660,045660,045
165
Company
As at 31st March
Number of
Effective
shares
holding %
2014
Rs.’000
2013
Rs.’000
Cost
Company's quoted investments
"Trans Asia Hotels PLC at Cost (Quoted)”
86,823,02843.41%660,045660,045
660,045660,045
Company
As at 31st March
2014
2013
Rs.’000Rs.’000
Market Value
Company's quoted investments
Trans Asia Hotels PLC at market value
86,823,028
43.41%
6,937,1606,112,341
6,937,1606,112,341
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
19. LONG TERM INVESTMENTS
Sri Lanka Hotel & Tourism
100100100100
Less: Fall in value of the Investment
(100)(100)(100)(100)
---The Company has fully provided for the above investment during the year 2009/2010, due to the non recoverability of the same. This
balance was written off during the year against the provision.
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
20. Other Non Current Financial Assets
20.1 Loans to executives
26,65143,65918,04135,689
Loans granted/(transfers)
7,486(5,719)3,286(10,152)
Recoveries
(11,680)(11,289) (5,710)(7,496)
22,45726,65115,61718,041
20.2 Insurance Claim Receivable
28,926
-
-
Impairment during the year
(3,926)
-
-
Payment received during the year
(25,000)
-
- ---Receivable within one year
Receivable between one to five years
166
5,4307,4364,2265,702
17,02719,21511,39112,339
22,45726,65115,61718,041
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
21. Prepaid Staff Loan4,7863,3573,2642,953
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
22.INVENTORIES
Food & Beverage
78,86672,29651,27146,786
General
11,68410,836 8,8988,561
Diesel/ Furnace/Gas Stock
13,19713,292 8,4779,471
Engineering Stock
24,45424,80616,50016,206
Apartment Inventory
-21,130
-21,130
Inventory Slow moving Provision
(7,182)(7,174)
-Amount at the End of the Year
121,019135,186 85,146102,154
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
23. WORK-IN-PROGRESS - APARTMENTS - CURRENT ASSETS
Incurred During the Year
Transferred to Cost of Sales
Transferred to Apartment Inventory
Transferred from Non-Current Assets
-
64,392
- 3,897
- (47,159)
-
(21,130)
-
-
-
64,392
-
3,897
-
(47,159)
-
(21,130)
- -
Last year the Company completed its Apartment project and accordingly there was no WIP - Apartments as at reporting date.
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
24. TRADE AND OTHER RECEIVABLES
Trade receivables
373,487440,168158,362239,932
Other receivables
128,419
100,907
99,977
65,917
Less: Impairment
(25,532)(17,119)(16,414)(15,153)
476,374523,956241,925290,696
Impairment
Provision for the year
Written off during the year
167
17,11910,69815,1539,143
8,4807,9351,3287,524
(67)(1,514) (67)(1,514)
25,53217,11916,41415,153
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
25. OTHER CURRENT ASSETS
Prepayments and non cash receivables
56,49054,44625,19822,330
WHT Recoverables
7,03113,715 2,10210,727
ESC Recoverables
-
2,862
-Advance to Creditors
24,71192,88520,18254,275
Refundable Deposits
-
5,581
- 5,582
88,232169,489 47,48292,914
26. SHORT TERM INVESTMENTS
Fixed & Call deposits
3,134,1942,715,7982,647,2692,155,924
3,134,1942,715,7982,647,2692,155,924
27. STATED CAPITAL
GroupCompany
20142013 2014 2013
Number of
Value of Number of
Value of Number of
Value of Number of
Value of
sharessharessharessharessharessharessharesshares
As at 31st MarchRs.’000Rs.’000Rs.’000Rs.’000
442,775
3,345,117 442,7753,345,117 442,7753,345,117 442,7753,345,117
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
28. OTHER COMPONENTS OF EQUITY
Revaluation reserve
28.1
11,094,88311,110,29010,597,63110,602,127
Share-based Payments
28.2
17,966-
14,470
11,112,84911,110,29010,612,10110,602,127
28.1 Revaluation reserves
11,110,2905,143,193
10,602,1274,772,950
Transferred to Revenue Reserves
(4,496)(13,418) (4,496)(13,418)
Transferred to Revenue Reserves
(10,911)
(14,757)
-Transferred from Deferred Tax
-
(47,960)
-Revaluation gain on Freehold Land & Buildings
-6,043,232
-5,842,595
11,094,88311,110,29010,597,63110,602,127
168
28.2 Share-based Payment Plans
Under the John Keells Group’s Employees Share Option Scheme (ESOP), share options of the parent are granted to senior executives of
the Group with more than 12 months of service. The exercise price of the share options is equal to the 30 day volume weighted average
market price of the underlying shares on the date of grant. The share options vest over a period of four years and is dependent on a
performance criteria and a service criteria. The performance criteria being a minimum performance achievement of "Met Expectations" and
service criteria being that the employee has to be in employment at the time the share options vest. The fair value of the share options
is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the share
options were granted.
Fair value of the share option and assumptions
The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and
conditions upon which the share options were granted.
The valuation takes into account factors such as stock price, expected time to maturity, exercise price, expected volatility of share price,
expected dividend yield and risk free interest rate.
Employee Share Option Scheme - Group
The expense recognised for employee services received during the year is shown in the following table:
20142013
Rs.’000Rs.’000
Expense arising from equity-settled share-based payment transactions
Total expense arising from share-based payment transactions 17,966
17,966
-
Movements in the year
The following table illustrates the number (No.) and Weighted Average Exercise Prices (WAEP) of, and movements in, share options during
the year:
20142014
No.
WAEP
Outstanding as at 1st April
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding as at 31st March
Exercisable as at 31st March
169
- 615,692253.16
(17,307)253.16
-253.16
- 598,385253.16
-
-
28.3 Share-based Payment Plans
Employee Share Option Scheme - Company
The expense recognised for employee services received during the year is shown in the following table:
20142013
Rs.’000Rs.’000
Expense arising from equity-settled share-based payment transactions
Total expense arising from share-based payment transactions 14,470
14,470
-
Movements in the year
The following table illustrates the number (No.) and Weighted Average Exercise Prices (WAEP) of, and movements in, share options during
the year:
20142014
No.
WAEP
Outstanding as at 1st April
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding as at 31st March
Exercisable as at 31st March
-
495,466
-
-
-
495,466
-
253.16
253.16
253.16
253.16
Group
As at 31st March
2014
2013
Rs.’000Rs.’000
29. DEFERRED TAXATION
329,313255,793
Charge for the year
8,09825,560
Deferred Tax effect on revaluation of Buildings
-47,960
At the End of the year
337,411329,313
170
The closing Deferred Tax liability relates to the followings,
Group
As at 31st March
2014
2013
Rs.’000Rs.’000
Revaluation of buildings
-47,960
Accelerated Depreciation for tax purposes
350,199293,116
Employee Benefit Liability
(12,788)(11,763)
337,411329,313
In accordance with the BOI agreement dated 11th March 1994 the profits and income of the Company were exempt from taxation till year
2014, and at the expiry of said period the following options were available for the Company.
(a) Income tax payable for the year of assessment shall be computed at 2% of the Turnover of the Company or;
(b) The provisions of the Inland Revenue Laws for the time being imposed shall apply.
Since Company elected option (a) no Deferred Tax liability will arise even after the expiry of the tax exemption period.
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
30. EMPLOYEE BENEFIT LIABILITIES
194,097208,696 96,071109,551
Current service cost
22,38416,81411,6019,724
Interest cost on benefit obligation
18,30820,86910,56810,955
Payments
(17,049)(23,828) (5,977)(12,690)
(Gain)/Loss arising from changes in assumptions or due to
4,860(8,220)3,768(1,235)
Transfers
(1,366)(20,234) (1,367)(20,234)
221,234194,097114,66496,071
The employee benefit liability of the Company and Group is based on the actuarial valuations carried out as at 31st March 2014 by
Mr. M. Poopalanathan, AIA, Messers. Actuarial & Management Consultant (Pvt) Ltd; a firm of professional actuaries.
171
The principal assumptions used in determining the cost of employee benefits were:
20142013
Discount rate
11%11%
Future salary increases
10%10%
30.1 Sensitivity of assumptions used
If a one percentage point change in the assumed discount rate would have the following effects:
Discount rate
Salary increment
20142014
GroupCompany
GroupCompany
Rs.’000Rs.’000Rs.’000Rs.’000
Increase by one percentage Decrease by one percentage
(9,640) (4,630)11,721 5,917
11,022 5,500(10,450) (5,100)
30.2 Maturity analysis of the payments
The following payments are expected on employee benefit liabilities in future years.
2014
Group
Company
Rs.’000Rs.’000
Within the next 12 months
30,752
Between 1-2years
57,756
Between 2-5years
58,835
Between 5-10 years
51,825
Beyond 10 years
22,066
Total
221,234
15,805
32,355
29,508
29,136
7,860
114,664
Group
As at 31st March
2014
2013
Rs.’000Rs.’000
31. Other Non Current Liabilities
31.1Movement
2,8524,289
Additions-Repayments
(1,436)(1,437)
1,4162,852
Repayable within one year
1,4161,436
Repayable after one year
Repayable between one to five years
-1,416
Repayable after five years
- - 1,416
1,4162,852
172
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
32. TRADE AND OTHER PAYABLES
Trade Payables
177,073160,945111,271105,706
Payable to Contractors
2,7441,7042,7441,704
Retention on Construction
21,56118,44221,56018,442
Accrued Expenses
139,274111,724 51,00747,082
Other Creditors
396,061361,715327,333293,459
736,713654,530513,915466,393
33. OTHER CURRENT LIABILITIES
Refundable Deposits
4,0083,6514,0083,650
Other Tax Payables
20,75822,359
-Banquet Advances
156,796107,713 89,97344,264
Other Advances
20,66024,57113,82213,879
202,222158,294107,80361,793
34. RELATED PARTY discloses
The Company carries out transactions in the ordinary course of its business with parties who are defined as related parties in LKAS 24
Related Party Disclosure, the details of which are reported below. The pricing applicable to such transactions is based on the assessment
of risk and pricing model of the Company and comparable with what is applied to transactions between the Company and its unrelated
customers.
GroupCompany
As at 31st March2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
34.1 Amounts due from related parties
Parent-John Keells Holdings PLC
Subsidiary-Trans Asia Hotels PLC
Associates of JKH PLC
Companies under common control of JKH PLC
1,5913,3031,129799
-
-
1568
36
-
36
47,23631,35633,53719,269
48,86334,65934,71720,136
34.2 Amounts due to related parties
Parent-John Keells Holdings PLC
5,1063,6832,7423,341
Subsidiary-Trans Asia Hotels PLC
-
-
263233
Companies under common control of JKH PLC
82,23583,96057,89954,803
87,34187,64360,90458,377
173
GroupCompany
2014
2013
2014
2013
NoteRs.’000Rs.’000Rs.’000Rs.’000
34.3 Transactions with related parties
Transactions with Parent Company
The Company's parent is John Keells Holdings PLC
Rendering/(Receiving) of services
Rent Received
(43,713)(44,645)(23,578)(21,360)
37,52929,755
-
-
Subsidiaries
(Receiving)/Rendering of services
Rent received/(paid)
--
(1,135)1,442
--
1,014
-
Transaction with companies under common control of JKH PLC
Sales/(Purchases) of goods
(18,761)(49,933) (6,148)(28,209)
Rendering /(Receiving) of services
(486,596)(356,896)(291,670)(183,675)
Sales/(Purchases) of Property Plant & Equipment
(3,117)(4,056)(3,117)(4,056)
34.4 Transaction with Key Management
Personnel (KMP) of the Company
According to LKAS 24 Related Party Disclosure “Key Management Personnel” are those having authority and responsibility for planning
and controlling activities of the entity. Accordingly, the Directors of the Company (including Executives and Non-Executive Directors) and
their immediate family members have been classified as KMP of the Company.
As the John Keells Holding PLC is the Parent of the Company and the Board of Directors of the Parent Company have the authority and
responsibility of planning, directing and controlling the activities of the Company, the Directors of the parent Company and their immediate
family member have also been identified as Key Management Personnel of the Company. Immediate family member is defined as spouse
or dependent. A dependent is defined as anyone who depends on the respective director for more than 50% of his/her financial needs.
GroupCompany
2014
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000
Short-term employee benefits
Contribution to provident fund
Share base payment
61,32757,39258,20754,392
4,0284,0373,5743,596
10,914-
10,914-
Remuneration paid to Directors is disclosed in the Note No. 10 to these Financial Statements.
174
35. FINANCIAL INSTRUMENTS
35.1 Fair value of Financial Instrument
The management assessed that the fair value of the financial instruments, with includes cash at bank, short term deposits, other non
current assets, amounts due from - due to related parties, trade receivables, trade payables, bank over drafts and other current financial
liabilities, approximate their carrying amounts largely due to the short term maturities of these instruments.
The Group does not designate any of its Financial Assets/Liabilities at fair value, hence a classification between fair value hierarchy do not
apply.
35.2 FINANCIAL ASSETS AND LIABILITIES BY CATEGORIES -GROUP
Financial assets by categories
Loans and
receivables
As at 31st March
2014
2013
Rs.’000
Rs.’000
Financial instruments in non-current assets
Other non-current financial assets 17,02719,215
Other non-current assets
4,7863,357
Financial instruments in current assets
Trade and other receivables
476,374523,956
Amounts due from related parties
48,86334,659
Short term investments
3,134,1942,715,798
Cash in hand and at bank 430,541407,409
Total
4,111,7853,704,394
The fair value of loans and receivables is not significantly different from the value based on amortised cost methodology.
Financial liabilities by categoriesFinancial liabilities
measured
at amortised cost
As at 31st March
2014
2013
Rs.’000Rs.’000
Financial instruments in non-current liabilities
Other non current liabilities
- 1,416
Financial instruments in current liabilities
Trade and other payables
736,713654,530
Amounts due to related parties
87,34187,643
Other current liabilities
202,222158,294
Bank overdrafts
130,080162,683
Total
1,156,3561,064,566
The fair value of financial liabilities is not significantly different from the value based on amortised cost methodology.
175
35.3 Financial Assets and Liabilities by Categories - Company
Financial assets and liabilities in the tables below are split into categories in accordance with LKAS 39.
Financial assets by categories
Loans and
receivables
As at 31st March
2014
2013
Rs.’000Rs.’000
Financial instruments in non-current assets
Other non-current financial assets
Other non-current assets
11,39112,339
3,2642,953
Financial instruments in current assets
241,925290,696
34,71720,136
2,647,2692,155,924
Cash in hand and at bank
289,804307,569
Total
3,228,3702,789,617
The Fair value of loans and receivables is not significantly different from the value based on amortised cost methodology of the Company.
Financial liabilities by categoriesFinancial liabilities measured
at amortised cost
As at 31st March
2014
2013
Rs.’000Rs.’000
Financial instruments in non-current liabilities
Financial instruments in current liabilities
513,915466,393
60,90458,377
107,80361,793
Bank overdrafts
76,116123,105
Total
758,738709,668
The fair value of financial liabilities is not significantly different from the value based on amortised cost methodology of the Company.
176
36. Financial risk management objectives and policies
Financial instruments held by the Group, principally comprise of cash at bank, short-term deposits, other non current assets, amounts
due from/due to related parties, trade receivables, trade payables, bank overdrafts and other current financial liabilities. The main purpose
of these financial instruments is to manage the operating, investing and financing activities of the Group.
Financial risk management of the Group is carried out based on guidelines established by its parent company’s central treasury
department (Group Treasury) which comes under the purview of the Group Executive Committee (GEC) of the parent company.
Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The parent
company provides guidelines for overall risk management, as well, covering specific areas such as credit risk, investment of excess
liquidity, interest rate risk and foreign currency risk.
The Group has established guidelines for risk controlling procedures and for the use of financial instruments, including a clear segregation
of duties with regard to financial activities, settlement, accounting and related controlling. The guidelines upon which the Group’s risk
management processes are based are designed to identify and analyse these risks throughout the Group, to set appropriate risk limits
and controls and to monitor the risks by means of reliable and up-to-date administrative and information systems. The guidelines and
systems are regularly reviewed and adjusted to changes in markets and products. The Group manages and monitors these risks primarily
through its operating and financing activities.
The Audit Committee of John Keells Holdings PLC, the parent company,oversees how management monitors compliance with the
Group’s risk management policies and procedures,and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad
hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
36.1 Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial
loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including
deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
The Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all clients who wish to trade on credit terms
are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the
Group’s exposure to bad debts is not significant.
With respect to credit risk arising from the other financial assets of the Group, such as cash and cash equivalents, available-for-sale
financial investments, investments, and certain derivative instruments, the Group’s exposure to credit risk arises from default of the
counterparty. The Group manages its operations to avoid any excessive concentration of counterparty risk and the Group takes all
reasonable steps to ensure the counterparties fulfil their obligations.
36.1.1 Risk exposure
Credit risk is the risk of financial loss to the Group,if a customer or counter party to a financial instrument fails to meet its contractual
obligations, and arises principally from the group's receivables from customers and placements in deposits with banking institutions and in
government securities.
The maximum risk positions of financial assets which are generally subject to credit risk are equal to their carrying amounts (without
consideration of collateral, if available). Following table shows the maximum risk positions.
177
36.1.1 Risk exposure
Credit risk is the risk of financial loss to the Group,if a customer or counter party to a financial instrument fails to meet its contractual
obligations, and arises principally from the group’s receivables from customers and placements in deposits with banking institutions and
in government securities.
The maximum risk positions of financial assets which are generally subject to credit risk are equal to their carrying amounts (without
consideration of collateral, if available).Following table shows the maximum risk positions.
2014
Risk exposure Group
Notes Other non Cash in
Trade
Short Amounts
Total
% of
current hand
and
term
due allocation
financial and
other investments
from
assets at bank receivables
related
parties
Deposits with bank
36.1.2
Loans to executives
36.1.3
36.1.4
36.1.5
36.1.6
Total credit risk exposure
-
17,027
-
-
-
17,027
-
-
-
-
430,541
430,541
- 3,134,194
5,431
-
470,943
-
-
-
-
-
476,374 3,134,194
- 3,134,194
-
22,458
- 470,943
48,863
48,863
- 430,541
48,863 4,106,999
76%
1%
12%
1%
10%
100%
2014
Risk exposure Company
Notes Other non Cash in
Trade
Short Amounts
Total
% of
current hand
and
term
due allocation
financial and
other investments
from
assets at bank receivables
related
parties
Deposits with bank
Loans to executives
Loans to life policy holders
Total credit risk exposure
178
36.1.2
36.1.3
36.1.6
36.1.4
36.1.5
36.1.6
-
11,391
-
-
-
-
11,391
-
-
-
-
-
289,804
289,804 2,647,269
4,227
-
-
-
237,698
-
-
-
-
-
241,925 2,647,269
- 2,647,269
-
15,618
-
-
- 237,698
34,717
34,717
- 289,804
34,717 3,225,106
82%
1%
-
7%
1%
9%
100%
2013
Other non
Cash in
Trade
Short
Amounts
Total
current
hand and
and other
term
due
financial
at bank
receivables
investments
from
assets
related
parties
-
19,215
-
-
-
19,215
-
-
-
-
407,409
407,409
-
7,437
516,519
-
-
523,956
2,715,798
-
-
-
-
2,715,798
-
-
-
34,659
-
34,659
2,715,798
26,652
516,519
34,659
407,409
3,701,037
2013
Other non
Cash in
Trade
Short
Amounts
Total
current
hand and
and other
term
due
financial
at bank
receivables
investments
from
assets
related
parties
-
12,339
-
-
-
-
12,339
179
-
-
-
-
-
307,569
307,569
-
5,703
-
284,993
-
-
290,696
2,155,924
-
-
-
-
-
2,155,924
-
-
-
-
20,136
-
20,136
2,155,924
18,042
-
284,993
20,136
307,569
2,786,664
% of
allocation
73%
1%
14%
1%
11%
100%
% of
allocation
77%
1%
10%
1%
11%
100%
36.1.2 Deposits with bank
Deposits with bank mainly consist of fixed and call deposits.
As at 31st March 2014, fixed and call deposits comprise 90% (2013- 61%) and 93% (2013- 70%) for the group and company
respectively were rated “A+” or better.
GroupCompany
As at 31 March
2014
2013
2014
2013
Fitch ratings
Rating % Rating % Rating % Rating %
Rs.’000
of total In Rs.’000
of total
AA+
AA
AA-
A
Total
659,10321%1,531,166
56% 659,10325%1,531,167
71%
359,96811%559,875
21%
---672,29822%624,757
23%672,29825%624,757
29%
1,442,82546%--
1,315,86850%-3,134,194100%
2,715,798100%
2,647,269100%2,155,924
100%
* Rating agencies
36.1.3 Loans to executives
Loans to executive portfolio is largely made up of vehicle loans which are given to staff at assistant manager level and above. The
respective business units have obtained the necessary Power of Attorney/promissory notes as collateral for the loans granted.
36.1.4 Trade and other receivables
GroupCompany
2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
Neither past due nor impaired
225,008189,693 29,40920,773
Past due but not impaired
0-30 days
163,339220,211128,601173,006
31–60 days
51,86360,77544,32054,127
61–90 days
9,83915,536 7,83810,118
91–120 days
5,0788,4532,6574,841
121–180 days
5,4133,2334,7512,710
> 181 days
41,01140,28840,40839,353
Impaired
3552,886 355921
Gross carrying value
501,906541,075258,339305,849
Less: impairment provision
Individually assessed impairment provision
(9,118)(1,966)
- Collectively assessed impairment provision
(16,414)(15,153)(16,414)(15,153)
Total
476,374523,956241,925290,696
180
The Group has obtained customer deposit from major customers by reviewing their past performance and credit worthiness, as collateral.
The requirement for an impairment is analysed at each reporting date on an individual basis for major customers. Additionally, a large
number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based
on actual incurred historical data.
36.1.5 Amounts due from related parties
The Group's amounts due from related party mainly consists of balances from affiliate Companies and parent.
36.1.6 Credit risk relating to cash and cash equivalents
In order to mitigate the concentration, settlement and operational risks related to cash and cash equivalents, the Group consciously
manages the exposure to a single counterparty taking into consideration, where relevant, the rating or financial standing of the
counterparty, where the position is reviewed as and when required, the duration of the exposure in managing such exposures and the
nature of the transaction and agreement governing the exposure.
36.2 Liquidity Risk
The Group’s policy is to hold cash and undrawn committed facilities at a level sufficient to ensure that the Group has available funds
to meet its short and medium term capital and funding obligations, including organic growth and acquisition activities, and to meet any
unforeseen obligations and opportunities. The Group holds cash and undrawn committed facilities to enable the Group to manage its
liquidity risk.
The Group monitors its risk to a shortage of funds using a daily cash management process. This process considers the maturity of both
the Group’s financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows from
operations.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of multiple sources of funding
including debentures, bank loans, loan notes, overdrafts and finance leases over a broad spread of maturities.
36.2.1 Net debt
GroupCompany
2014201320142013
Rs.’000Rs.’000Rs.’000Rs.’000
3,134,1942,715,7982,647,2692,155,924
430,541407,409289,804307,569
Total liquid assets
3,564,7353,123,2072,937,0732,463,493
- (1,416)
- Other Current Liabilities
(1,416)(1,436)
- Bank overdrafts
(130,080)(162,683) (76,116)(123,105)
Total liabilities
(131,496)(165,535) (76,116)(123,105)
Net debt 3,433,2392,957,6722,860,9572,340,388
181
36.2.2 Liquidity risk management
The mixed approach combines elements of the cash flow matching approach and the liquid assets approach. The business units attempt
to match cash outflows in each time budget against a combination of contractual cash inflows plus other inflows that can be generated
through the sale of assets, repurchase agreement or other secured borrowings.
Maturity analysis
The table below summarises the maturity profile of the Group’s financial liabilities as at 31st March 2014 based on contractual
undiscounted payments.
Group
In Rs. '000
Bank overdrafts
Within 1 Between 1-2 Between 2-3 Between 3-4 Between 4-5 More than 5
Total
yearyearsyearsyearsyearsyears
736,713
87,341
202,222
130,080
1,156,356
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
736,713
87,341
202,222
130,080
1,156,356
The table below summarises the maturity profile of the Group’s financial liabilities as at 31st March 2013 based on contractual
Group
In Rs. '000
Total
-
1,416----
1,416
654,530
-
-
-
-
-
654,530
87,643
-
-
-
-
-
87,643
158,294
-
-
-
-
-
158,294
Bank overdrafts
162,683
-
-
-
-
-
162,683
1,063,150
1,416
-
-
-
-
1,064,556
Maturity analysis
The table below summarises the maturity profile of the Company financial liabilities as at 31st March 2014 based on contractual
182
Company
In Rs. '000
Total
Bank overdrafts
513,915
-
-
-
-
-
513,915
60,904
-
-
-
-
-
60,904
107,803
107,803
76,116
-
-
-
-
-
76,116
758,738
-
-
-
-
-
758,738
The table below summarises the maturity profile of the Company financial liabilities as at 31st March 2013 based on contractual
Company
In Rs. '000
Total
Bank overdrafts
466,393
-
-
-
-
-
466,393
58,377
-
-
-
-
-
58,377
61,791
61,793
123,105
-
-
-
-
-
123,105
709,666
-
-
-
-
-
709,668
36.3 Market risk
Market risk is the risk that the Fair value of future cash flows of a financial instrument will fluctuate because of the changes in market
prices.
Market prices comprise four types of risk:
•
•
•
•
Interest rate risk
Currency risk
Commodity price risk
Equity price risk
The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising
the return.
36.3.1 Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market
interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt
obligations with floating interest rates.
Most lenders grant loans under floating interest rates. To manage this, based on the market condition and outlook of the interest rate, the
Group takes mitigating action such as interest rate swaps, caps, etc.
183
36.4 Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong financial position and healthy capital ratios
in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may issue new shares, have a rights issue or buy back of shares.
GroupCompany
2014201320142013
Debt / Equity
0.5%0.7%0.4%0.6%
37. OPERATING SEGMENT INFORMATION
REVENUEHOTELSPROPERTY
Group Total
2014
2013
2014
2013
2014
2013
Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000
External Revenue
Inter segment Revenue
Total Segment Revenue
Segment Operating Profits
before Finance Expenses
Inter Company Dividends
Finance Expenses
Change in Fair Value of Investment Properties
Company
Commercial Centre of Subsidiary
Profit before Taxation
Income Tax Expense
Eliminations
Profit after Taxation
Minority Interest
Net Profit for the Year
7,775,9547,428,633 480,194462,345
8,256,1497,890,978
7,775,9547,428,633 480,194462,345
8,256,1497,890,978
2,826,8502,840,613 227,828205,085
3,054,6783,045,698
(273,493)(234,422)
-
-
(273,493)(234,422)
(3,287)(96) -(359)
(3,287)(455)
--
268,564 228,500 268,564
228,500
-
-
-
288,710
-288,710
2,550,071 2,606,095
496,392
721,936 3,046,463 3,328,031
(181,084)
(188,888)
(16,480)
(23,930)
(197,564)
(212,818)
(30,388)
(26,047)
-
-
(30,388)
(26,047)
2,338,599 2,391,160
479,912
698,006 2,818,511 3,089,166
-
-
-
-
(420,565)(599,137)
2,338,599 2,391,160
479,912
698,006 2,397,946 2,490,029
Assets
Segment Assets
21,200,382 20,682,030
7,971,918
8,408,660 29,172,300 29,090,690
Eliminations
1,611,436 (2,314,302)
Total Assets
21,200,382 20,682,030 7,971,918 8,408,660 27,560,864 26,776,388
Liabilities
Segment Liabilities
Eliminations/Adjustments
Total Liabilities
184
2,526,651
-
2,526,651
3,121,386
-
3,121,386
198,043
-
198,043
186,100
-
186,100
2,724,710
3,307,486
(951,391) (1,654,257)
1,773,319 1,653,229
38. CONTINGENT LIABILITIES
There were no material contingent liabilities existing as at reporting date.
39. CAPITAL COMMITMENTS
The Asian Hotels & Properties PLC Group had Capital Expenditure contracted for Rs. 47.4 Mn as at 31st March 2014, which were not
provided for in the consolidated Financial Statements.
40. EVENTS SUBSEQUENT TO THE reporting DATE
Other than the contingent liabilities and commitments referred to in Note 38 & 39 to the Financial Statements, there have been no events
subsequent to the reporting date which would have any material effect on the Company or on the Group.
The Board of Directors of the Company has declared a Final Dividend of Rs. 3/- per share for the financial year ended 31st March 2014.
As required by Section 56 (2) of the Companies Act No. 7 of 2007, the Board of Directors have confirmed that the Company satisfies the
Solvency test in accordance with Section 57 of the Companies Act No. 7 of 2007, and have obtained a certificate from Auditors, prior to
declaring a Final Dividend.
In accordance with Sri Lanka Accounting Standard (LKAS) 10, Events after Balance Sheet date, the proposed final Dividend has not been
recognised as a liability in the Financial Statements as at 31st March 2014.
41. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Please refer to the page 142 for
the Statement of Directors' Responsibility for Financial Reporting.
185
Consolidated value ADDED STATEMENT
20142013
Rs.’000Rs.’000
Revenue
8,256,149
7,890,978
Adjustment for Change in Fair Value of Investment Property
Adjustment for Finance Income
Adjustment for Other Income
268,564
305,042
75,546
8,905,301
517,210
312,020
71,308
8,791,516
Less: Cost of Materials & Services
Purchased from external sources
Value Added
1,319,224 1,165,019
7,586,077 7,626,497
2014 %2013
Distributed as follows:
Rs.’000
Rs.’000
To the Employees as Remuneration
To the Government as Taxes
To the Providers of Capital
To the Shareholders as Dividends
Retained within the business
As Depreciation
As Reserves
186
%
1,330,120 1,211,336
18
16
1,242,90616
1,106,309
15
3,287
420,565
1,771,101
0
6
23
455
599,137
1,771,101
455,964
2,393,704 7,586,077 6
412,314
31 2,494,275
1007,626,497
0
8
23
5
33
100
information to share holders and investors
STOCK EXCHANGE LISTING
The Issued Ordinary Shares of Asian Hotels and Properties PLC are listed with the Colombo Stock Exchange of Sri Lanka. The Audited
Financial Statements of the Company and the Consolidated Financial Statements for the year ended 31st March 2014 have been
submitted to the Colombo Stock Exchange.
DISTRIBUTION OF SHAREHOLDINGS
From
To
Number of Share Holders
1
- 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 1,000,000
1,000,001 and above
31.03.2014
Total Percentage
Share
of Share
Holdings
Holdings 2,218641,523
7992,867,237
1774,941,326
245,989,598
12428,335,616
3,230442,775,300
Number of
Share
Holders
31.03.2013
Total Percentage
Share of Share
Holdings
Holdings
0.1 2,195655,015
0.1
0.7
7862,807,146
0.7
1.1
1765,015,402
1.1
1.4
317,871,001
1.8
96.7
15426,426,736
96.3
100.03,203
442,775,300100.0
ANALYSIS OF SHAREHOLDERS
Categories of Shareholders
31.03.2014
31.03.2013
HoldingsHoldings
Number
%Number
Individual
13,694,105
3.09
13,893,764
Institutions
429,081,195
96.91
428,881,536
442,775,300
100.00
442,775,300
3.14
96.86
100.00
Resident 432,649,633
Non Resident
10,125,667
442,775,300
93.84
6.16
100.00
97.71
2.29
100.00
415,494,111
27,281,189
442,775,300
Public
94,646,347
21.38
94,643,809
Non Public*
348,128,953
78.62
348,131,491
442,775,300
100.00
442,775,300
*Includes shareholdings of Inter Company, Directors & Spouses.
187
%
21.38
78.62
100.00
information to share holders & investors contd.
For the Year Ended 31st March
2014
2013
Rs.Rs.
Market Value
Highest Market Price Per Share
Lowest Market Price Per Share
Last Traded Market Price Per Share
79.0090.00
57.0065.00
58.8070.00
Dividend Payments
Interim Dividend Per Share
Final Dividend Per Share
1.00 1.00
3.003.00
TOP TWENTY SHAREHOLDERS
As at As at
31.03.201431.03.2013
Share Percentage
Share Percentage
Holdings
Holdings John Keells Holdings PLC
347,824,19278.56347,824,192
78.56
Employees Provident Fund
42,477,7149.5924,209,022
5.47
Sri Lanka Insurance Corporation Ltd-Life Fund
10,055,9002.2710,055,900
2.27
Bank of Ceylon A/C Ceybank Unit Trust
9,285,3902.109,190,407
2.08
HSBC International Nominees Limited-MSNY-Bay Pond
Partners L.P.
3,580,0000.81
3,580,000 0.81
Dr. S. Yaddehige
3,415,2000.77
3,415,200 0.77
Bank of Ceylon-No. 2 A/C
2,583,4000.58
2,583,400 0.58
Bank of Ceylon-No. 1 Account
2,232,4000.50
2,232,400 0.50
Mr. M.J. Fernando
2,018,0000.46
2,018,000 0.46
AIA Insurance Lanka PLC A/C No.07
1,966,5280.44
1,903,439 0.43
HSBC International Nominees Limited-MSNY-Bay Pond
Investors (Bermuda) L.P
1,724,2000.39
1,724,200 0.39
Bank of Ceylon A/C Ceybank Century Growth Fund
1,172,692
0.261,144,564
0.26
Employee Trust Fund Board
767,4780.17
767,478 0.17
Mr. M. Mannawarajan
650,0160.15
650,016 0.15
Richard Pieris & Co Ltd - Account No. 01
639,4000.14639,400
0.14
National Savings Bank
441,0000.10
441,000 0.10
Rockport Limited
386,0000.09
386,000 0.09
Union Assurance PLC/Account No. 05 (Unit-linked Life Insurance
Fund-Equity Tracker Fund) 276,7610.06
279,299 0.06
Elgin Investments Limited
225,0000.05
175,000 0.04
Merrill J Fernando & Sons (Pvt) Limited
220,0000.05
220,000 0.05
431,941,27197.55
413,438,917 93.37
188
Five Year Financial Summary Group
2013/142012/132011/122010/112009/10
Rs. ‘000
Rs. ‘000
Rs. ‘000
Rs. ‘000
Rs. ‘000
Revenue 8,256,149
7,890,978
8,855,241
7,457,325
4,899,671
Profit After Taxation
2,818,511
3,097,386
2,502,458
2,147,886
688,806
Share Capital & Reserves
Stated Capital
Other Components of Equity
Retained Profit
Shareholders’ Funds
3,345,117
11,112,849
7,880,070
22,338,036
3,345,117
11,110,290
7,242,060
21,697,467
3,345,117
5,143,193
6,490,690
14,979,000
3,345,117
5,179,592
5,194,517
13,719,226
3,345,117
5,233,818
3,585,332
12,164,267
Minority Interest
3,449,509
25,787,545
3,425,692
25,123,159
2,963,109
17,942,109
2,783,930
16,503,156
2,464,777
14,629,044
Assets & (Liabilities)
Current Assets
4,299,223
Current Liabilities
(1,214,674)
Net Current Assets
3,084,549
Non Current Assets
23,261,641
Non Current Liabilities
(558,645)
25,787,545
3,986,497
(1,128,402)
2,858,095
22,789,890
(524,826)
25,123,159
4,038,373
(1,640,220)
2,398,153
16,011,297
(467,341)
17,942,109
2,705,026
(1,219,974)
1,485,052
15,446,194
(428,090)
16,503,156
1,766,283
(1,582,940)
183,343
15,397,524
(951,823)
14,629,044
Ratio Analysis
Earnings Per share (Rs.)*
Net Assets Per share (Rs.)
Current Ratio (Times)
After Tax Return on Net Assets
Dividend Per Share* (Rs.)
P/E Ratio (Times)
5.425.634.854.011.42
50.4549.0033.8330.9827.47
3.543.532.462.221.12
10.73%11.50%14.35%12.93% 5.18%
4.004.002.000.501.00
10.8512.4316.0723.4446.22
* The increased number of ordinary shares of 442,775,300 has been considered for the previous year’s comparative figures.
five year financial summary property development division
Revenue 419,119
Cost of Sales
234,571
Gross Profit
184,548
428,062
265,101
162,961
2,675,625
2,066,140
609,485
2,468,699
1,779,735
688,964
1,586,995
1,189,314
397,681
117,702
106,759
268,564
442,170
121,012
134,559
228,500
405,008
205,362
111,903
206,971
722,997
163,898
62,638
215,088
802,792
151,518
43,001
289,164
Administration & Other Overheads
Other Income
Change in Fair Value of Investment Property
Net Profit Before Tax
189
2013/142012/132011/122010/112009/10
Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000
five year financial summary cinnamon grand hotel
Revenue
Rooms 2,589,915
Food 1,779,373
Beverage
298,787
Food & Beverage Others
16,467
Telephone
4,827
Rental Income
16,668
Other Operating Income
191,530
Total Revenue 4,897,567
2,460,356
1,638,767
284,989
19,488
4,914
15,289
198,890
4,622,693
1,921,952
1,405,859
249,572
20,264
5,349
12,510
188,631
3,804,137
1,425,573
1,220,522
216,899
15,638
6,451
11,419
120,268
3,016,770
947,949
1,007,744
169,933
13,574
7,746
11,395
87,822
2,246,163
Expenses
Room
Food Cost
Beverage Cost
Food & Beverage
Telephone
Other
Total Expenses
343,617
696,668
90,929
548,926
5,289
167,622
1,853,051
301,195
658,271
87,993
511,554
5,021
157,042
1,721,076
255,945
561,902
79,662
454,770
4,987
133,371
1,490,637
210,295
497,769
74,734
372,665
4,453
84,625
1,244,541
156,643
392,579
58,673
308,877
4,144
58,951
979,867
Gross Operating Income
3,044,516
2,901,617
2,313,500
1,772,229
1,266,296
262,603
111,808
376,177
173,579
924,167
241,574
86,428
324,795
138,856
794,133
199,685
72,363
285,126
140,729
697,903
180,941
86,139
261,680
121,717
650,477
155,318
76,840
201,549
97,960
531,667
2,120,349
188,746
273,493
16,538
2,599,127
2,108,719
153,787
234,422
17,915
2,514,843
1,615,597
37,403
117,211
12,067
1,782,278
1,121,752
6,391
39,070
14,832
1,182,045
734,629
16,816
19,535
2,176
773,156
Insurance 13,436
Interest Expenses
3,249
Rates
11,796
Management/ Marketing Fee
304,917
Depreciation 259,662
593,060
17,897
-
11,660
294,239
237,830
561,626
16,098
84
10,516
232,340
218,036
477,074
15,335
39,829
10,135
178,499
203,297
447,095
16,003
105,880
10,135
128,093
188,231
448,342
Net Profit Before Tax 2,006,067
1,954,452
1,305,204
734,950
324,814
Expenses
Administration & General
Advertising & Sales Promotion
Heat, Light & Power
Repair & Maintenance
Total Deductions
Gross Operating Profit
Interest Income
Dividend Income
Sundry Income
190
2013/142012/132011/122010/112009/10
Rs.’000Rs.’000Rs.’000Rs.’000Rs.’000
Notice of MEETING
NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of Asian Hotels and Properties PLC will be held at the
Auditorium of the Ceylon Chamber of Commerce, No. 50, Navam Mawatha, Colombo 2, on 27th June 2014 at 11.45 a.m. for the
following purposes:
1. To read the notice convening the meeting.
2. To receive and consider the Annual Report and Audited Financial Statements of the Company for the year ended 31st March 2014
together with the Report of the Auditors thereon.
3. To re-elect as a Director Mr. R.J. Karunarajah who retires by rotation in terms of Article 84 of the Articles of Association of the
Company. A brief profile of Mr. R.J. Karunarajah is contained in Section /Page 39 of the Annual Report.
4. To re-elect as a Director Mr. S. Rajendra who retires by rotation in terms of Article 84 of the Articles of Association of the Company.
A brief profile of Mr. S. Rajendra is contained in Section /Page 39 of the Annual Report.
5. To re-appoint the retiring Auditors, KPMG, Chartered Accountants, and to authorise the Directors to determine their remuneration.
6. To consider any other business of which due notice has been given in terms of the relevant laws and regulations.
BY ORDER OF THE BOARD
KEELLS CONSULTANTS (PRIVATE) LIMITED
SECRETARIES
Colombo, 30th May 2014
Note:
i. A member unable to attend is entitled to appoint a Proxy to attend and vote in his/her place.
ii. A Proxy need not be a member of the Company.
iii. A member wishing to vote by Proxy at the Meeting may use the Proxy Form enclosed.
iv. In order to be valid, the completed Proxy Form must be lodged at the Registered Office of the Company not later than 48 hours
before the meeting.
v. If a poll is demanded, a vote can be taken on a show of hand or by a poll. Each share is entitled to one vote. Votes can be cast
in person, by proxy or corporate representatives. In the event an individual shareholder and his proxy holder are both present at
the meeting, only the shareholder’s vote is counted. If the proxy holder’s appointor has indicated the manner of voting, only the
appointors indication of the manner to vote will be used.
191
Notes
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194
Form of proxy
I/We .................................................................................................................................................................................................................................................
of ......................................................................................................................................................................................................................................................
being a *member/members of Asian Hotels and Properties PLC hereby appoint
...................................................................................................................................................................................................................................................... of
.......................................................................................................................................................................................................................................... or failing
him/her
Mr. S.C. Ratnayake
Mr. J.R.F. Peiris
Mr. S. Rajendra
Mr. C.J.L. Pinto
Mrs. S.A. Jayasekera
of Colombo, failing whom
of Colombo
as *my/our proxy to represent *me/us and to vote on *my/our behalf at the Annual General Meeting of the Company, to be held on
the 27th day of June 2014 and at any adjournment thereof, and at any poll which may be taken in consequence thereof. *I/We the
undersigned hereby authorise *my/our proxy to vote on *my/our behalf in accordance with the preferences indicated below:
1. To re-elect as a Director Mr. R.J. Karunarajah who retires in terms of Article 84 of the Articles
of Association.
FOR
AGAINST
2. To re-elect as a Director Mr. S. Rajendra who retires in terms of 84 Article of the Articles of Association.
3. To re-appoint the retiring Auditors, KPMG, Chartered Accountants, and to Authorise the Directors to
determine their remuneration.
Signed this .......................................... day of .................................. Two Thousand and Fourteen
...................................................
Signature of Shareholder
Notes:
(a) *Strike out whichever is not desired.
(b) Instructions to completion of the Form of Proxy are set out on the reverse hereof.
(c) A proxy need not be a Member of the Company.
(d) Please indicate an “X” in the cage provided how your Proxy should vote on each Resolution. If no indication is given, or if there is,
in the view of the Proxy holder, any doubt (by reason of the manner in which the instructions contained in the Proxy have been
completed) as to the way in which the Proxy holder should vote, the Proxy holder in his/her discretion may vote as he/she thinks fit.
195
Form of proxy contd.
INSTRUCTIONS FOR COMPLETION
1. Please perfect the Form of Proxy by filling in legibly your full name and address, signing in
the space provided and filling in the date of signature.
2. The completed Form of Proxy should be deposited at the Registered Office of the Company
at No. 77, Galle Road, Colombo 3, not later than 48 hours before the time appointed for the
holding of the Meeting.
3. If the Form of Proxy is signed by an Attorney, the relevant Power of Attorney should
accompany the completed Form of Proxy for registration, if such Power of Attorney has not
already been registered with the Company.
4. If the appointer is a company or corporation, the Form of Proxy should be executed
under its Common Seal or by a duly authorised officer of the Company or Corporation in
accordance with its Articles of Association or Constitution.
5. If this Form of Proxy is returned without any indication of how the person appointed as
Proxy shall vote, then the Proxy shall exercise his/her discretion as to how he/she votes or,
whether or not he/she abstains from voting.
Please fill in the following details:
Name
: …………………………………………………………………………………
Address
: …………………………………………………………………………………
.………………………………………………………………………………….
.....……………………………………………………………………………….
196
Jointly with
: …………………………………………………………………………………
Share Folio No.
: …………………………………………………………………………………
corporate information
Name of Company
Legal Form
A Public Limited Liability Company incorporated in Sri Lanka
in 1993 and registered with the Board of Investment of Sri
Lanka under Section 17 of the Board of Investment Law No.
4 of 1978. The Company was re-registered as per the New
Companies Act No. 7 of 2007 on 15th June 2007.
Stock Exchange Listing
The issued Ordinary Shares of the Company are listed on the
Main Board of the Colombo Stock Exchange of Sri Lanka.
Company Registration No.
PQ 2
Every
Smile
HAPPINESS IS INDISPENSABLE IN THE HOSPITALITY INDUSTRY. IT IS WHAT FORMS
PERCEPTIONS, CREATES MEMORIES AND KEEPS PEOPLE COMING BACK FOR MORE. FOR
US, IT IS AN EMOTION THAT HAS PERMEATED INTO EVERY ASPECT OF THE BUSINESS;
FROM WHAT WE DELIVER TO THE GUESTS, TO HOW WE DO THINGS, EVERY DAY. IT’S WHAT
MOTIVATES US, WHAT INSPIRES US AND WHAT MAKES US THE BEST IN THE INDUSTRY. THE
HAPPINESS OF OUR PATRONS, OUR TEAM AND OUR SURROUNDINGS IS A REFLECTION OF
THE QUALITY THAT WE OFFER AND A TESTIMONY TO OUR MANY YEARS OF EXPERIENCE.
WE MAKE EVERY MOMENT WORTHWHILE… WE MAKE EVERY SMILE COUNT.
Board of Directors
Mr. Susantha Chaminda Ratnayake - Chairman
Mr. Ajit Damon Gunewardene - Managing Director
Mr. James Ronnie Felitus Peiris
Mr. Rohan Jebashanthan Karunarajah
Mr. Suresh Rajendra
Mr. Sanjiva Kanishka Gamini Senanayake
Ms. Shirani Anoja Jayasekara
Mr. Cholmondeley John Lloyd Pinto
Company Secretaries
117, Sir Chittamplalam A. Gardiner Mawatha,
Colombo 2.
Registered Office
No. 77, Galle Road, Colombo 03
Tel : 0094 -11 2437437
Fax : 0094 -11 5547555
E-mail:[email protected]
Design & Concept by: Optima Designs (Pvt) Ltd.
Printed by: Gunaratne Offset Ltd
Auditors
KPMG
32A, Sir Mohamed Macan Marker Mawatha,
Colombo 03.
Bankers
Citibank N.A - Colombo
Deutsche Bank AG - Colombo
Seylan Bank Ltd - Millennium Branch, Colombo
Hongkong & Shanghai Banking Corp. Ltd. - Colombo
Nations Trust Bank PLC - Union Place, Colombo
DFCC Vardhana Bank Ltd. - W.A.D. Ramanayake Mw,
Colombo
Bank of Ceylon - Colombo
|
Annual report 2013/14
No. 77, Galle road, Colombo 03,
Sri Lanka.
T : 0094 -11 2437437
F : 0094 -11 5547555
THE
annual
report
smile
survey
ANNuAL rEporT 2013/14

ASIAN Hotels AND properties pLC ANNuAL rEporT 2013/14

Transcription

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