Asian Hotels & Properties Cinnamon PLC 2015 16 PDF

THE CITY
WITHIN
A CITY
ANNUAL REPORT 2015/16 | ASIAN HOTELS AND PROPERTIES PLC
Asian Hotels and Properties PLC

No. 77, Galle Road, Colombo 03,
Sri Lanka. ANNUAL REPORT 2015/16
T : 0094 -11 2437437 F : 0094 -11 5547555 ASIAN HOTELS AND PROPERTIES PLC
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
Board of Directors
Mr. Susantha Chaminda Ratnayake - Chairman
Mr. Ajit Damon Gunewardene - Managing Director
Mr. James Ronnie Felitus Peiris
Mr. Rohan Jebashantham Karunarajah
Mr. Suresh Rajendra
Mr. Sanjiva Kanishka Gamini Senanayake
Ms. Shirani Anoja Jayasekara
Mr. Cholmondeley John Lloyd Pinto
Mr. Krishan Niraj Jayasekara Balendra (Appointed w.e.f. 01st April 2016)
Company Secretaries
Keells Consultants (Private) Limited
117, Sir Chittampalam, A .Gardiner Mawatha, Colombo 2.
Registered Office
No.77, Galle Road, Colombo 03
Tel: +94 11 2437437 Fax: +94 11 5547555
E-mail: grand@cinnamonhotels.com
Auditors
KPMG
Chartered Accountants
32A, Sir Mohamed Macan Marker Mawatha
Colombo 03.
Bankers
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.
CITI Bank N.A - Colombo
Bank of Ceylon - Colombo
Commercial Bank of Ceylon PLC - Colombo
Design & Concept by: Optima Designs (Pvt) Ltd.

Printed by: Printel (Pvt) Ltd.
THe city
within
a city
Pulsating within the vibrant heart of a buzzing metropolis, where
the dynamic hues of life in the city are truly experienced, this award
winning Five-star city hotel is known for its Luxurious elegance and
incomparable service. Setting benchmarks is an everyday occurrence.
diverse innovations part of its persona and service excellence form the
nucleus of the grandeur that articulates the spirit of cinnamon grand,
an amazingly unique hotel.
CONTENTS
Group Financial Highlights of 2015/16 4

Chairman’s Message 6
Management Discussion and Analysis 11
Operating Environment 11
Group Performance Overview 14
Awards and Certifications 21
Management Structure of Cinnamon Grand 23
Stakeholder Mapping and Engagement Process 24
Cascading Knowledge 34
Sustainable Business 40
Corporate Social Responsibility 45
Our Year at a Glance 48
Board of Directors 60
Risk Management 62
Corporate Governance 69
Annual Report of the Board of Directors 94
Report of the Audit Committee 102
Statement of Directors’ Responsibility 104
Independent Auditors’ Report 105
Income Statement 106
Statement of Profit or Loss and other Comprehensive Income 107
Statement of Financial Position 108
Statement of Changes in Equity 109
Statement of Cash Flow 111
Notes to the Financial Statements 112
Consolidated Value Added Statement 153
Information to Shareholders & Investors 154
Five-Year Financial Summary of the Group 156
Five-Year Financial Summary Property Division 156
Five-Year Financial Summary Cinnamon Grand Hotel 157
Notice of Meeting 158
Form of Proxy 159
Corporate Information Inner Back Cover
Asian Hotels and Properties PLC 3 Annual Report 2015/16
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.
Group Financial Highlights of 2015/16
2015/16 2014/15 Change %
Financial Performance (Rs.’000’)

Total Revenue 8,066,693 8,080,152 -0.2%
Gross Profit 4,642,556 4,723,424 -2%
Finance Income 156,710 199,958 -22%
Change in Fair Value of Investment Property 224,665 28,792 680%
Profit Before Taxation 2,231,460 2,350,653 -5%
Income Tax 208,789 263,196 21%
Profit After Taxation 2,022,671 2,087,457 -3%
Financial Position (Rs.’000’)

Shareholders’ Funds 23,309,235 24,036,938 -3%
Market Capitalisation 21,164,659 27,894,844 -24%
Net Cash Flow from Operating Activities 2,074,421 2,575,285 -19%
Cash & Cash Equivalents 1,527,332 2,858,903 -47%
Total Non Current Assets 26,281,198 25,463,363 3%
Current Assets 2,822,210 3,932,511 -28%
Current Liabilities 1,587,998 1,387,524 14%
Information per Ordinary Share (Rs.)

Earnings 4.16 3.97 5%
Dividend 5.5 4.0 38%
Market Price 47.8 63.0 -24%
Highest Market Price 69.5 75.0 -7%
Lowest Market Price 44.50 58.00 -23%
Net Assets 52.64 54.29 -3%
Key Performance Indicators

Group Occupancy (%) 62% 66% -4%
P/E Ratio (Times) 11.49 15.87 -28%
Dividend Pay-out Ratio (Times) 1.32 1.01 31%
Current Ratio (Times) 1.78 2.83 -37%

Group Revenue & Profitability Net Assets Per Share P/E Ratio
Rs. Mn Rs. Times

8,855
10,000 60.00 18.00

8,256
8,067
8,080
7,891
16.00
8,000 50.00
14.00
16.07
15.88
54.29
52.64
50.45
49.00
40.00 12.00
6,000
12.43
10.00
11.50
30.00
10.85
3,097
8.00
2,819
33.83
2,502
4,000
2,087
2,023
20.00 6.00
2,000 4.00
10.00
2.00
0 0 0
12 13 14 15 16 12 13 14 15 16 12 13 14 15 16
Group Revenue
Profit After Taxation
Dividend Per Share Earnings Per Share Dividend Payout Ratio
Rs. Rs. Times

6.00 6.00 1.40
5.00 5.00 1.20
1.32
5.63
5.50
5.42
1.00
4.00 4.00
4.85
1.01
0.80
4.16
4.00
4.00
4.00
3.97
3.00 3.00
0.60
0.74
0.71
2.00 2.00
0.40
2.00
1.00 1.00
0.41
0.20
0 0 0
12 13 14 15 16 12 13 14 15 16 12 13 14 15 16
Rs. 4.16 Rs. 5.50 Rs. 52.64

Earnings Per Share Dividend Per Share Net Assets Per Share
Rs. 8.06 Bn Rs. 2.02 Bn 44%

Group Revenue Profit After Tax Rooms Market Share
CHAIRMAN’S MESSAGE
Working on an all- Dear Stakeholder, a year-on-year growth of 29.4 per cent
encompassing strategy It is my pleasure to present the Annual driven by the strong growth in Chinese
that would add a definitive Report and Statement of Accounts arrivals of 67.6 per cent to 214,783.
for the Group for the year ended 31st The Chinese market continued to be a
competitive edge to both
March 2016. key thrust market, with many initiatives
Cinnamon Grand and being rolled out at national policy
Cinnamon Lakeside, the Group revenue in the current year at Rs. level. These efforts and the continuing
properties embarked on the 8.07 billion was in line with last year’s increase in flight connectivity resulted
Cinnamonization Strategy revenue of Rs. 8.08 billion. Group Profit in the aforesaid increase in arrivals from
– which aims at creating an Before Tax (PBT) for the year was China, which accounted for 12 per cent
Rs. 2.2 billion compared to Rs. 2.3 of total arrivals to Sri Lanka in 2015.
‘Inspired Living’ lifestyle
billion recorded in the previous year.
experience for guests in both The decline in group revenue and According to the Central Bank of Sri
product and service offerings profitability was primarily due to the Lanka, earnings from tourism recorded a
– placing the hotels of your partial closure of Cinnamon Lakeside for 22.6 per cent growth against last year to
Company on a springboard for essential enhancements and upgrades reach US$ 2.98 billion during the twelve
value addition. during the first seven months of the year months ended in December 2015.
under review.
Group Performance
Global Tourism Both hotels in the Group continued to
The World Tourism Barometer published maintain a pre-eminent position among
by the United Nations World Tourism guests for its signature restaurants,
Organisation (UNWTO) in January 2016 enabling the Group to achieve 2 per
indicated that international tourism cent year-on-year growth in revenue
reached new heights in 2015 with from its restaurants and banquet
international tourist arrivals reaching spaces. Food and Beverage revenue
1,184 million, which is a 4.4 per cent stood at Rs. 3.5 billion, with Cinnamon
year-on-year growth. By region, Europe, Grand contributing a significant Rs. 2.37
the Americas and Asia Pacific recorded billion towards this.
growth of approximately 5 per cent,
while arrivals to the Middle East grew by Group expenses were contained to
approximately 3 per cent. Results from a prudent Rs. 6.2 billion, a marginal
the UNWTO Confidence Index remain increase of 4 per cent over last year. In
positive for 2016. brief, cost of sales marginally increased
by 2 per cent, while distribution
Sri Lanka Tourism expenses increased by 37 per cent and
Sri Lanka recorded 1.79 million tourist administrative expenses by 4 per cent.
arrivals for the calendar year 2015, Group Profit Before Tax (PBT) recorded
representing a growth of 17.8 per a decline of 5 per cent to Rs. 2.23 billion
cent over the previous calendar year. against Rs. 2.35 billion in the previous
Western Europe emerged as the largest year which includes the change in
regional contributor with arrivals fair value of the investment property
increasing by 15.3 per cent year-on- amounting to Rs. 224.6 million, while
year to 552,442. India continued to be Profit After Tax amounted declined by
the largest single source market with 3 per cent to Rs. 2.02 billion against Rs.
316,247 arrivals, whilst East Asia was 2.08 billion in the previous year.
the fastest growing source market with

Cinnamon Grand Colombo Property Development on a number of concepts to entice the

Continuing to mark its presence as This year saw a 10 per cent increase target markets. Cinnamon Lakeside
the leader in the city hotel industry in in footfall at the Crescat Boulevard, launched a ‘See Shop Party Colombo’
Sri Lanka, the pioneering and award affirming its position as the city’s holiday package for the Indian market
winning Cinnamon Grand Colombo premier shopping destination. With the in partnership with the national carrier
celebrated its tenth anniversary under division now having ceased the leasing SriLankan Airlines; while both hotels
the Cinnamon Brand in the year under of apartments, revenue income remains embarked on an extensive campaign
review. Maintaining its reputation and totally reliant on mall operations, which for the Chinese market with dedicated
status, Cinnamon Grand continued to showcased an impressive year-on-year floors in each hotel and other market-
maintain its market share of 31 per cent. growth of 7 per cent. Profit before tax specific value additions.
for this division is Rs. 282.5 million,
The Hotel achieved an average year which includes a gain on fair value of Being firm believers that our success
round occupancy of 76 per cent, investment property of Rs. 98 million. relies on our team, a new Associates
generating room revenue of Rs. 2.61 The recurring profits of the financial Lifestyle Complex was built for the
billion. The signature dining options, year is Rs. 184 million. Cinnamon Grand team, creating a
lounges, bars and banquet choices were colourful and positive work environment
the largest contributors to the total F&B New Initiatives which has positively impacted their
revenue of Rs. 2.37 billion. Working on an all-encompassing service levels to our guests.
strategy that would add a definitive
Total revenue increased to Rs. 5.25 competitive edge to both Cinnamon Awards and Certifications
billion this year, compared to Rs. 4.93 Grand and Cinnamon Lakeside, Your Company received a Silver Award
billion last year, marking a growth of the properties embarked on the for Diversified Holdings (up to five
6 per cent. Showcasing its consistent Cinnamonization Strategy – which subsidiaries) at the Annual Report
performance, Cinnamon Grand posted aims at creating an ‘Inspired Living’ Awards of Excellence 2015 organised by
a Profit Before Tax of Rs. 1.591 billion, lifestyle experience for guests in both the Institute of Chartered Accountants
which is a growth of 3 per cent from last product and service offerings – placing of Sri Lanka for the Group’s Annual
year; while the Profit After Tax also grew the hotels of your Company on a Report. Both hotels excelled in its
by 3 per cent to Rs. 1.448 billion. springboard for value addition. culinary talents when their innovative
teams received numerous accolades
Cinnamon Lakeside Colombo The new strategy is positioned to at Culinary Art 2015 organised by the
As stated, Cinnamon Lakeside Colombo strengthen the brand to compete in Chef’s Guild of Sri Lanka while a team
was partially closed for seven months Asia, targeting the vibrant and modern of chefs from Cinnamon Grand were
for refurbishment in order to prepare middle class who enjoy curated among the winners at the Dilmah Real
itself for the growth expected in the city experiences, experiential F&B menus High Tea Challenge.
hospitality industry. and contemporary settings. Taking on
a holistic approach, all communication Both hotels were successfully audited
Total revenue for the year was Rs. 2.483 facets including signage, banners, for recertification of international
billion with banquets and restaurants printed material and images were standard certifications. These include
contributing significantly with Rs. 572 streamlined to echo the new brand recertifications for ISO 14001, ISO
million and Rs. 569 million respectively; positioning as a lifestyle brand and 22000 and OHSAS 18001. Cinnamon
totalling Rs. 1.14 billion. Revenue from the employees across the industry Grand also gained the certification
room sales contributed Rs. 1.007 billion group were enlightened on this value of Compliance+ from the Employers
into the revenue stream. proposition. Federation of Ceylon.
Profit Before Tax for Cinnamon Lakeside In driving the future of the brand under
this year was recorded at Rs. 358 this Strategy, both properties embarked
million.
CHAIRMAN’S MESSAGE contd.
Future Outlook Conclusion

The Group is looking at a future that I express my sincere thanks to our
will undoubtedly be competitive, but shareholders for their continued
one which also promises to be exciting. confidence in the Group and take this
With tourism continuing to retain its opportunity to thank the Board of
title as the fastest growing industry Directors for the guidance and support
in the world, Sri Lanka continues to extended throughout the year. I also
retain its status as an emerging hot- welcome Mr. Krishan Balendra who was
spot for the global traveller. Sri Lanka appointed to the Board on 1st April
Tourism established a target of 2.2 2016.
million visitors for 2016 with an annual
growth of 22 per cent, and an increase A special acknowledgment of gratitude
in average daily expenditure of a tourist is also due to our guests who have given
to US$ 200. This is expected to increase us the confidence to pursue our vision,
total tourism revenue to US$ 2.75 and our valued business partners, with
billion. whom we share strong relationships,
and who have supported us in our
The proximity to India, increasing flight growth.
connectivity from China coupled with
the value proposition offered by Sri I am extremely appreciative of our
Lanka as a destination where diverse persevering and dynamic teams, who
attractions can be accessed within a remain the foundation to our success.
short-time horizon, are seen as key It is they who have embraced our vision
drivers in attracting arrivals. and the Cinnamon ethos with great
enthusiasm.
Whilst the available room inventory in
Sri Lanka has increased substantially
over the last few years, this is much
needed capacity considering the
ambitious medium to long growth plans Susantha Ratnayake
for tourism in the country. Whilst city Chairman
hotel occupancies did witness slight Asian Hotels and Properties PLC
moderation in the previous two years,
we are beginning to see an increase 25th May 2016
in overall occupancies as indicated by
the fourth quarter of the financial year
under review.
The two hotels are expected to witness

growth in the corporate and leisure
tourist segments, while pursuing unique
business specific strategies aimed at
catering to distinct clientele. The overall
outlook for the corporate segment
appears promising with several MICE
events also in the pipeline for next year.

Where vibrance meets elegance

in a symposium of luxury
MANAGEMENT
DISCUSSION
AND
ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

Cinnamon’s unrelenting Operating Environment
focus on excellence has
meant that innovation
Global Economy
continues to be at the fore,
Global growth according to the IMF World Economic Outlook was estimated at
in order to maintain the
3.1 per cent in 2015, with modest and uneven recovery in advanced economies
excitement and inventive expected to continue, alongside a gradual narrowing of output gaps. Throughout
feel of the brand. Based 2015, global economic activity remained subdued. However, growth in emerging
on a series of analysis markets and developing economies, which account for over 70 per cent of global
especially of emerging growth declined for the fifth consecutive year. Overall growth in China is evolving
broadly, but with the slowdown experienced in imports, and exports being faster than
trends, competition and
expected, a weaker investment and manufacturing activity was experienced. These
threats, a team of external
naturally prompt concerns about the future of the Chinese economy, which in turn,
consultants studied the is seeing spillovers to other economies through trade channels, weaker commodity
competitive advantages prices, as well as diminishing confidence and increasing volatility in financial markets.
of the Cinnamon brand
and unveiled a strategy Oil prices have declined markedly since September 2015. The higher oil supply which
drove the decline in oil prices is expected to support global demand given the higher
designed to take Cinnamon
propensity to spend in oil importers, relative to oil exporters. This together with
Hotels and Resorts to the
several other factors, have dampened the positive impact of lower oil prices.
next level.
Asia’s growth was expected to be 5.4 per cent in 2015/16, retaining its leadership
position as the global growth leader. The relatively strong labour markets, disposable
income growth and ongoing gradual recovery observed in major advanced economies
added benefits to Asia’s growth. Lower commodity prices across Asian economies
also helped consumption. The possibility of a sharper slowdown in China and the
changing composition of China’s demand posed some risks, aggravated by the
strengthening of the US dollar, sudden tightening of global financial conditions,
weaker growth in Japan and weaker regional growth.
With the economic outlook for Asia and the Pacific continuing to be stable and robust
with Asia further cementing its status as the global growth leader, vulnerabilities
associated with increased domestic and foreign debt is rising. Potential growth
therefore is likely to slow, reflecting weaker productivity gains and the impacts of
aging populations and infrastructure bottlenecks adding to the slowdown. Monetary
and fiscal policy settings however are broadly appropriate, but boosting resilience
and potential growth remain top priorities with structural reforms continuing to play
a primary role.
In India, the growth recovery has been supported by a pick up in domestic demand
on the back of strengthening industrial production and fixed investment.
The pick up expected in 2016 will see global growth stand at 3.4 per cent and edge
slightly upwards to 3.6 per cent in 2017. The projected growth in the next two years-
despite the ongoing slowdown in China-primarily reflects forecasts of a gradual
improvement of growth rates in countries currently in economic distress; notably
Brazil, Russia, and few countries in the Middle East, though even this projected partial
recovery could be frustrated by new economic or political shocks.
MANAGEMENT DISCUSSION AND ANALYSIS contd.
GDP at Current Market Prices Sri Lankan Economy Inflation remained below mid single
According to the Annual Report of digit levels supported by the reduction
2015 published by Central Bank of Sri in prices of several consumer items,
Rs. Bn
12,000 Lanka, the country posted a positive favourable supply side developments
growth of 4.8 per cent, although a in the domestic and international
10,000
slight deceleration was seen from last market and well maintained inflation
11,183
10,448
8,000 year’s 4.9 per cent growth. The four expectations. Inflation as measured
9,592
8,732
6,000 major components of the economy, by the change in Colombo Consumer

7,219
agriculture, industry, services and tax Price Index (CCPI) was 2.8 per cent in
4,000
less subsidies on products contributed December 2015 compared to 2.1 per
2,000
their share to the GDP at constant price cent recorded last year. Annual average
0 by 7.9 per cent, 26.2 per cent, 56.6 per headline inflation declined from 3.3 per
11 12 13 14 15
cent and 9.3 per cent respectively. All cent in 2014 to 0.9 per cent in 2015.
Source: Central Bank of Sri Lanka Annual Report 2015
three major economic activities expanded While year-on-year core inflation
significantly, with agriculture reporting increased to 4.5 per cent in December
5.5 per cent, industry 3 per cent and 2015 compared to last year’s 3.2 per
services 5.3 per cent. cent.
Exchange Rates (Year End) Fitch Ratings meanwhile downgraded With the country approaching upper
Sri Lanka’s Long Term Foreign and Local middle income status, borrowing terms
Currency Issuer Default Ratings by one are becoming more commercial, which
Rs.
160
notch to B+ from BB- in March 2016, a could affect affordability. It is also vital
140 reflection of the increase in refinancing that Sri Lanka attracts more FDIs to
risks, with Sri Lanka’s external liquidity sustain a high growth path.
144.06
120
131.05
130.75
ratio being far below the median of its

127.16
100
113.9
80 B rated peers. However, Fitch did note Global Tourism Industry

60 that prevailing low oil prices will continue 2015 was a good year for the international
40 to support Sri Lanka’s current account tourism industry given that it marked the
20 deficit in the near term, and remain sixth consecutive year of above average
0 manageable at approximately 3per cent growth. International tourist arrivals grew
11 12 13 14 15
over GDP in the next financial year. by 4.4 per cent to reach a total of 1,184
Source: Central Bank of Sri Lanka Annual Report 2015
Standard & Poor’s long term sovereign million travelers across the world, with
credit rating for Sri Lanka stands at more than 50 million tourists traveling to
B+, with Moody’s rating for Sri Lanka international destinations compared to
sovereign debt at B1. 2014. The United Nations World Tourism
Organisation (UNWTO) World Tourism
In early September 2015, the Central Barometer declared that the international
Bank decided to allow greater flexibility arrivals has recorded an increase of 4 per
in the determination of the exchange cent or more every year since the post-
rate. Since then till the end of the year, crisis year of 2010. The robust demand is
the Rupee recorded a depreciation of primarily attributed to unusually strong
6.64 per cent and overall deprecation of exchange rate fluctuation and drop in
9.03 per cent against the US Dollar and oil and commodity prices heralding an
against all other major currencies except increase in disposable incomes within
the Euro in which it appreciated by 1.3 importing countries, although it did on the
per cent. It posted a depreciation of 8.9 converse, weaken demand in exporters.
per cent against the JPY, 4.67 per cent On the downside, there was concern on
against the Pound Sterling and 4.84 per safety and security, wars and conflicts
cent against the Indian Rupee. especially across the Middle East, which
impacted some of the major tourist
destinations across that region.

China, USA and UK have driven tourism strife torn past and continue to gallop growth over last year to reach US$ 2.98
expenditure in 2015 supported by rather confidently to present some of billion during the twelve months ending
strong currency and economy. China the region’s most innovative and exciting December 2015.
for example showcased double-digit product offerings, it is certainly a vote of
expenditure for the last 11 years and confidence that arrivals into the country Given the thrust to welcome a total
continues to lead outbound travel rose a phenomenal 17.8 per cent by of 2.2 million tourists by end 2016,
which has seen an upward spike to end 2015 to reach a total of 1.8 million the Sri Lanka Tourism Development
Asian destinations including Japan and tourists. Authority (SLTDA) predicts a growth
Thailand. Benefits of Chinese outbound rate of 22.3 per cent year-on-year
travel have also impacted the USA and India and China now hold firmly to the which will gain much stimulus with
various European destinations. top spots as the highest contributors to the a slew of accommodation options
Sri Lanka’s tourist arrivals with 316,247 at various star levels being added
UNWTO remains largely positive for and 214,783 arrivals respectively. The to the portfolio. From international
prospects in 2016 although at a slightly growth from these two countries was five-star chains to four and three-star
more somber level predicting a growth highly impressive at 30.3 per cent and city hotels, boutique and small luxury
of 4 per cent worldwide. China, the USA 67.6 per cent. Meanwhile, Sri Lanka’s hotels, inns, homestays and informal
and UK are expected to lead outbound traditional source market, the UK grew accommodation, the investment being
travel growth in 2015. Asia Pacific 12.3 per cent last year to herald a total infused into the tourism infrastructure
will lead the way in growth as will the of 161,845 tourists, This is attributed is considerable. Most of these should
Americas with 4 per cent to 5per cent to better economic prospects, stronger be open for business from now to within
growth predicted and Europe slightly currency and Sri Lanka proving to the next two years, augmenting not
lower with 3.5per cent to 4.5 per cent. be safer than most of its regional only room numbers but F&B venues and
A larger degree of uncertainty and counterparts. Germany and France employment generation.
volatility surrounds both the Middle East posted noteworthy growth rates as well
and Africa and predictions are detailed at with 12.5 per cent and 9.2 per cent, to The country’s push towards increasing
2 per cent to 5per cent for these regions. bring in 115,868 and 86,126 visitors its MICE business has also led to
respectively. showcasing the advantages Sri Lanka
has in the region in hosting international
Sri Lankan Tourism Industry
By region, East Asia led by China MICE events
Being a veritable hotspot in the world’s
largest and fastest growing industry posted the highest annual growth of
which accounts for over 10 per cent 29.4 per cent as a region, followed
of global GDP, Sri Lanka tourism has by South Asia with 24.1 per cent and
always posited strength of character Western Europe by 15.3 per cent. The
in the face of adversity. In the current Central Bank declares that earnings
context, as the country pushes back its from tourism recorded a 22.6 per cent
Tourist Arrivals
No. of
Tourists
206,114
250,000
178,672
175,804
165,541
166,610
157,051
156,246
200,000
146,575
144,147
143,374
141,878
140,319
133,048
133,971
132,280
122,217
121,576
119,727
115,467
113,529
112,631
105,535
103,175
150,000
90,046
100,000
50,000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014 2015
Group Revenue Composition (%) The five-star city hotel category which
Group Performance Overview
comprises a total of six city hotels
within the commercial capital of
Colombo encompasses a total of 2,186 As observed in our last year’s report,
2016
rooms. This grouping experienced a competition continued to be intense
relatively flat year in terms of growth. A within the city, a feature we strongly
considerable share of the growth seen believe will continue in the short to
2015
in the city hotel business went to three medium term, getting more competitive.
and four-star city hotels, which added a However, the Cinnamon brand continued
significant number of rooms were added to reflect the brand’s overarching
to the industry. tenet of excellence which held it in
good stead to continue developing
2015 2016
Another emerging challenge for city its market leadership and confidence
Rooms 46% 45%
five-stars is the increase of room options among stakeholders. Cinnamon Grand
F&B 43% 44%
between Colombo and Negombo, which Colombo continues to be the preferred
Other 7% 7%
could see market share in layover, crew hotel of choice in the city. Other city
Shop Rental 5% 5%
and stopover segments declining. hotels, including international five-
star chains hold the balance market
It is believed that with Sri Lanka share. Cinnamon continues to be the
Group Expenses (%)
pursuing business visitors more
benchmarked leader for the industry,
emphatically and the revitalisation of
a title that was further augmented
mega development projects around
this year with a number of pioneering
2016 the country, a growth will be observed
initiatives.
both in corporate and leisure segments,
although this growth will primarily
The high profile celebrities opting to stay
2015
be seen in the three to four-star price
at Cinnamon Grand, the flagship hotel
points, absorbed into the US$ 75 to US$
under Cinnamon Hotel and Resorts and
100 per room night category.
at Cinnamon Lakeside proved to add
to the competitive edge that the city’s
With traffic within the city increasing,
five-star hotels under the Cinnamon
2015 2016 F&B options have also gained
Cost of Sales 53% 53% banner have been garnering since its
considerable boost with an influx of
Administrative Expenses 29% 29% inception. Both five-star hotel, have
restaurants, cafe’s and niche F&B
Other Operating Expenses 10% 9% taken over a considerable segment
establishments pushing F&B sales in
Income Tax 4% 3% of the city hotel market share, which
the city to new heights. The product and
Distribution Expenses 4% 5% reiterates the high standing that the
service offerings are diverse and varied,
Finance Cost 0% 1%
innovative and applicable to any budget Cinnamon brand espouses on all fronts.
adding colour, diversity, excitement to Cinnamon Grand along with Cinnamon
the expansive portfolio on offer. Five- Lakeside, despite it being closed for
star hotels experienced an increase in refurbishment for the first half of the
footfall into their various F&B spaces, financial year, held fast to its market
while also adding venues and thereby leadership. After careful analysis of
new offerings into the city hotel mix. emerging trends in competition, the
hotels launched a number of events and
initiatives that will augment stakeholder
interest and continue maintaining high
visibility of the brand and properties in
the marketplace.

Cinnamonization
Cinnamon’s unrelenting focus on
excellence has meant that innovation
continues to be at the fore in order to
maintain the excitement and inventive
feel of the brand. Based on a series
of analysis especially of emerging
trends, competition and threats, a
team of external consultants studied
the competitive advantages of the
Cinnamon brand and unveiled a strategy
designed to take Cinnamon Hotels and
Resorts to the next level.
‘Cinnamonization’ was rolled out across

the Cinnamon hotels, based on a brand
strategy conceptualised for the new
Asia. The contemporary look and feel of Cinnamon Hotels and Resorts Sector Head-City Hotels Rohan Karr at the launch of
the new brand vignettes are created on Cinnamonization strategy
the platform of Asia being the fastest
growing tourism region in the world and
of the lifestyle experience they must infusing a number of initiatives to give
inter-Asian travel bound to increase
cascade to Cinnamon guests. these tourists a unique experience
substantially in the next few years. The
of ‘Inspired Living’. Mandarin fluent
brand is built to relate to the emerging
Similarly, a focus on attitudinal Guest Relations Officers and front
Asian travell, the modern, youthful and
change was driven with workshops on line associates, a dedicated Chinese
wealthy middle class where quality time
conceptualising curated experiences floor complete with Chinese accents
with family and friends lies paramount.
where associates were imparted to to complement travel requirements,
prompt a newer outlook on products, in-room compendiums in Mandarin
On the theme of ‘Inspired Living’, the
services and enhanced knowledge on and curated F&B concepts built into
Cinnamon spaces are designed to be
product offerings. Transformations were the buffets and beverage menus at the
iconic and vibrant, created as cool and
made to F&B experiences as well, with restaurants are now well in place and
hip to exceed the expectations of this
signature cocktail menus and unique have received positive feedback from the
discerning group of travellers. Cinnamon
in-room dining menus, all reflecting Chinese guests visiting the Hotel.
will be the catalyst in promoting the
the Cinnamonization brand promise.
concept of enjoying life’s best moments
The concept of ‘Inspired Living’ was Colombo City Excursions
in one of the most sought after travel
extended to the transportation services Cinnamon’s city hotels also launched
destinations, while redefining the best
as well where, in-vehicle amenities Colombo City Excursions enabling the
of contemporary Sri Lankan culture,
including a neck-pillow, eye mask, cold city tourist to discover hitherto little
entertainment and hospitality.
towels and a blanket were added as part known or unknown sights and sounds
of the ‘Cinnamon Drive’ experience. of Colombo city. Collaborating with
‘Inspired Living’ is worked through eight
Nature Trails, the exploration tour
touchpoints from the time of booking,
The Chinese Strategy covers culture, nature, history, food,
to arrival, check in, in-room ambiance,
Aligned with the paradigms observed architecture and the multi-ethnic
food and drink, experiences and check
in Sri Lanka’s tourism arrivals as well landscape of the city, promoting city
out. The entire concept was rolled out
as global and regional trends, China is tourism as yet another highlight within
through a series of workshops and
undoubtedly the traveller of the future. the contemporary visitor’s travel
actual ‘touch and feel’ experiences for
Cinnamon’s city hotels embarked on itinerary.
associates. Video walls were placed
within the associates recreation and a multi-faceted strategy to promote
relaxation space to imbue the entirety longer stays among Chinese travelers
Market Share Group Financial Highlights with its constant innovation of product
Group revenue which comprises offerings and benchmarking of services,
revenue from all three properties, which continues to moot interest among
namely Cinnamon Grand, Cinnamon guests to experience the unique ‘Grand’
Lakeside and Crescat Boulevard posted experiences.
a marginal decline this year of 0.2 per
cent, down from Rs. 8.08 billion in Cinnamon Grand saw a slight incline
2014/15 to Rs. 8.07 billion this year. of 1 per cent in occupied rooms this
While Cinnamon Lakeside contributed to year, although with Cinnamon Lakeside
much of this decline due to being closed experiencing a decline, a negative
for refurbishment, Crescat Boulevard did growth of 8 per cent was seen overall.
too, due to apartment sales now being The increase seen in Cinnamon Grand’s
Cinnamon Grand 31%
complete and reliance primarily being occupancy levels, albeit marginal, is yet
Cinnamon Lakeside 12% on shop rentals within the shopping an achievement given that the five-star
Other Five Star City hotels 57% mall. Cinnamon Grand however posted city hotels continued to face intensely
an increase in revenue this year by 6 per high competition from the new and
cent enabling the Group to be consistent refurbished three and four-star hotels
with last year’s revenue patterns. which has begun taking up much of
Contribution to Group Revenue the market share. Overall occupancy
It is the two hotels therefore that are of both hotels dropped to 62 per cent
the core income contributors to the compared to last year’s 66 per cent,
Rs. Mn
Group. Cinnamon Grand accounted for primarily once again due to Cinnamon
5,252
6,000
4,939
4,898
65 per cent of Group Revenue; while Lakeside’s closure. The Average Room
4,623
5,000
Cinnamon Lakeside, despite its closure, Rate showcased a growth of 3 per cent
3,804
4,000 contributed Rs. 2.483 billion revenue, with Cinnamon Grand averaging
2,939
2,840
2,786
2,676
2,484
Rs. 18,885 and Cinnamon Lakeside

2,375
3,000 which is significant given that this Hotel

2,000
was hampered with less revenue from all Rs. 18,569, while occupancy averaged
its revenue streams, rooms, restaurants, at 76 per cent for Cinnamon Grand.
1,000
However, Cinnamon Lakeside saw a dive
356
419
banquets and F&B.

428
331
0 to 43 per cent, once again due to the

12 13 14 15 16
Overall, room revenue experienced a refurbishment taking its toll.
Cinnamon Grand slight decline of 2 per cent primarily
Cinnamon Lakeside due to the three and four-star hotels F&B at Cinnamon Grand as mentioned
Property Division
gaining a competitive edge over the city earlier, continued to be phenomenal,
five-star hotels and due to the closure adding Rs. 2.37 billion to total revenue
of Cinnamon Lakeside for refurbishment compared to last year’s Rs. 2.2 billion.
which saw a loss of 15 per cent of its
room revenue. Cinnamon Grand however Overheads in the Group remain
did increase its room revenue by 5 per commendable, given the Group’s
cent, maintaining the consistency it has uncompromising stance on ensuring
displayed in past years. astute cost management on all fronts.
This highly focused cost management
F&B showcased marginal growth of 2 per strategy has naturally permeated
cent. The somewhat lackluster growth positively on all factors that impact the
could also be construed to the intense bottom line, although refurbishment
competition increasing within the city, and constant infusion on investment
with more dining options and banqueting to upgrade the properties remain an
venues vying for space in this milieu. imperative within the cost management
However, once again it was Cinnamon structure. Cost of Sales saw a marginal
Grand that rose to the fore, posting increase of 2 per cent, while distribution
an F&B revenue increase of 8 per cent expenses inclined by 37 per cent,

administrative expenses by 4 per

cent while other operating expenses
decreased by 5 per cent mainly due to
the savings in electricity cost. Group
taxation also saw a decline of 21 per
cent due to Cinnamon Lakeside’s
closure, impacting Group income
negatively.
This therefore heralded a Group Profit

Before Tax of Rs. 2.23 billion, a slight
decline of 5 per cent compared to last
year’s Rs. 2.35 billion, which once
again is in account of the partial closure
of Cinnamon Lakeside for first seven
months of the year. Profit After Tax
is posted at Rs. 2.02 billion, a decline
of 3 per cent over the figure notched A traditional welcome to Marco Pierre White by Cinnamon Grand Resident Manager Chris Quyn,
last year of Rs. 2.08 billion. The gross Executive Chef Dirk Heinen and Cinnamon Hotels and Resorts Head of Marketing Communications-
profit margin was however maintained city hotels Tharika Goonathilake
commendably at 58 per cent, similar to

focus on standards of excellence that are constructed on a strong foundation of
last year, although a marginal decline of
sustainability.
1 per cent was experienced in net profit
margin.
Being the largest city hotel with its 501 room portfolio including a range of luxurious
suites and the largest number of dining options in a single hotel in the city, Cinnamon
Finance income declined by a significant
Grand thus continued to entice above average room nights, showcasing 76 per cent
22 per cent due to the decrease of Rs.
in occupancy, totaling 138,460 room nights during the year. The Hotel achieved a
28 million experienced in the finance
market share of 31 per cent.
income pertaining to Cinnamon Lakeside
and the property division joining in with
Cinnamon Grand continued to etch an impressive array of celebrities into its guest
a decline of Rs. 14.6 million. However,
book this year including the Rt. Honourable Lord Mayor Aldermon Alan Yarrow and
Cinnamon Grand’s finance income
Lady Yarrow, celebrity photographer Nigel Barker and his family, Masterchef judge
mooted only a drop of Rs. 382,000.
Matt Preston, Godfather of modern cooking Marco Pierre White as well as Australia’s
renowned chef and restaurateur Peter Kuruvita, and CNN’s foremost international
Fair value of the investment properties
business correspondent Richard Quest.
in the Property Division and Cinnamon
Lakeside inclined by Rs. 224.6 million,
From an F&B perspective, the Hotel’s restaurants, lounges and bars continued
with the Crescat Shopping Mall’s fair
to have overwhelming responses due to the expansive product offerings and
value increasing by Rs. 98.5 million
unparalleled service levels they continue to espouse. While total revenue increased
and Cinnamon Lakeside’s investment
to Rs. 2.379 billion from last year showcasing an incline of 8 per cent.
property gaining Rs. 126.1 million.
Similarly, Cinnamon Grand continued to be the preferred choice for banquets in

Cinnamon Grand Colombo the city throughout the year. It hosted an impressive share of repeat clientele
Having built its reputation as a pioneer hosting corporate events, high profile international MICE events, as well as celebrity
for the industry and gaining numerous banquets and weddings which infused considerable revenue into the Hotel’s bottom
accolades to support this, Cinnamon line. Both Nigel Barker and Marco Pierre White held a series of events in collaboration
Grand’s stance on uncompromising with Cinnamon Hotels and Resorts including workshops and celebrity dinners at some
excellence reiterates its pioneering of the iconic dining venues at Cinnamon Grand. The Italian restaurant Echo hosted
reputation. This is well evidenced a curated dinner for Colomboscope where Venice Biennale exhibiting award winning
in the host of best in class events, architects Alex Lehnerer and Savaas Ciriacidis conducted an interactive discussion on
spearheading initiatives and constant Performing Architecture: Narratives of Nationhood.
F&B Revenue Guest experiences were further result of the introduction of BMS which
enhanced this year with the addition efficiently and effectively managed the
of a new entrance to the city’s premier Hotel’s electricity demand.
Rs. Mn
2,500
banqueting venue, the Oak Room,
enabling guests to enter the ballroom In wooing the emerging tourism markets
directly with the added advantage of and in defining various strategies for
2,380
2,000
2,201
2,078
valet parking at the entrance for faster visibility, Cinnamon Grand took part
1,924
1,500
service. in several international trade shows
1,655
1,000 including the Arabian Travel Market

Cinnamon Grand is well attuned to 2015 in Dubai which showcased over
5,00
hosting events graced by Heads of 3,000 exhibitors from across the globe.
0 States, global corporate leaders and With expectations of attracting in excess
12 13 14 15 16
international delegations. These of 23,000 tourists from this region to
include the Sri Lanka Economic Summit Sri Lanka, the visibility at ATM would
organised by the Ceylon Chamber of surely give Cinnamon Grand an added
Commerce and another country specific advantage in ensuring familiarisation
Economic Summit that had among of the brand and property among these
its speakers Founding Chairman of visitors.
Occupancy & Room Revenue Open Society George Soros and Nobel
Laureate Economist Joseph Stieglitz. The Cinnamon Lakeside Colombo
global conference of the International Despite the Hotel being closed for seven
Rs. Mn %
Federation of Essential Oils and Aroma months of the financial year, Cinnamon
2,611
2,590
3,000 78
2,496
2,460
Trades with 700 international industry Lakeside proved its standing within the
2,500 76
leaders, FACETS which is a spectacular city hotel category by closing the year
1,922
76%
76%
gem and jewellery exhibition and

75%
2,000 74
with good results in comparison to the
1,500 72 the 16th Bi-annual Congress of the same period of the year before. Given
72%
1,000 70
International Coloured Gemstone the competition it faced, with intensity
Association with over 250 delegates
70%
building up to lure city travelers to five,

5,00 68
from sixty countries were some of the four and three-star properties within
0 66 other event held at Cinnamon Grand. Colombo, Cinnamon Lakeside used its
12 13 14 15 16
unique location and surrounds to market
The Hotel has been consistent in its its feel of being an oasis in the city.
growth and thus posted a profit before
tax of Rs. 1.591 billion and profit after The Cinnamonization strategy of
tax of 1.448 billion which is a 3 per cent ‘Inspired Living’ was rolled out to
growth over the last year. This increase associates during the partial closure.
in profitability is mainly attributable to This gave them time to concentrate on
the 6 per cent increase in revenue as the new branding strategy. The Hotel
well as management’s constant efforts also ensured that other strategies
to save the operational cost. including the Chinese strategy which
incorporates the dedicated Chinese
Total expenses increased by 7 per cent, floor, specialized F&B offerings and
Cost of sales increased by 9 per cent, Mandarin speaking Guest Relations
distribution expenses by 20 per cent and Officers and front office associates as
administrative expenses by 9 per cent well as other marketing and promotional
compared to last year. strategies were ready for the full
opening of the Hotel in October 2015.
It’s also worth noting that 11 per
cent saving was achieved in the other The two burgeoning markets of China
operational expenses due to the and India were focused on by Cinnamon
reduction in electricity expenses as a Lakeside in its promotional strategies

The two burgeoning markets this year. One such promotional strategy term funds being utilised for payment of
of China and India were to engage the Indian traveler was the final dividends of Rs. 400 million in June
‘See Shop Party Colombo’ launched in 2015 and due to the increase in finance
focused on by Cinnamon
February 2016 at the One World Travel expenses arising from the long term
Lakeside in its promotional
Mart in India. borrowings of USD 3 million obtained
strategies this year. One for renovation purposes. The Company
such promotional strategy Net revenue of Cinnamon Lakeside incurred an unrealised exchange loss of
to engage the Indian during the year 2015/16 was Rs. 2.48 Rs. 42 million during the year on foreign
traveler was the ‘See Shop billion compared to Rs. 2.79 billion currency borrowings due to weakening of
recorded in the previous year. The reason the Sri Lankan Rupee against the United
Party Colombo’ launched
for the decline, which is 11 per cent States Dollar.
in February 2016 at the One
compared to the last year, was mainly
World Travel Mart in India. due to the Hotel being partially closed for The profit before tax for the year was
renovation during the first seven months recorded as Rs. 357.6 million compared
of the financial year. to previous years’ profit of Rs. 664.2
million. Decrease in current years’
Revenue from sale of rooms contributed profitability against previous year
to 41 per cent of the total revenue due to downside effects of the partial
whilst the Food and Beverage revenue closure for renovation, was partly
contributed 46 per cent and the other compensated by the increase in fair
revenue contributed 13 per cent. value of Investment Property by Rs.
126.1 million, which represented 35 per
The gross profit margin of the Company cent of the profitability.
for the year was 57 per cent compared
to 61 per cent achieved in the previous Property Division
year, mainly due to decrease in room The pragmatic initiative of
revenue by 15 per cent. conceptualising a retail hub adjacent
to the flagship city hotel and premier
Sales and marketing expenses recorded apartment complex in the city has surely
a 49 per cent increase from Rs. 129.9 been rewarding, given that this central
million in 2014/15, to Rs. 193.8 space within the city comes under the
million in the current financial year. umbrella of Asian Hotels & Properties
This is mainly due to the heightened PLC.
promotional activities and constructive
and constructed marketing strategy The Crescat Boulevard affirmed its
initiatives, within and outside Sri Lanka, stand this year as the premier shopping
in order to improve the market presence mall in Colombo with 10 per cent
and consistency in business volumes. increase in footfall compared to last
The Hotel also maintained a minimum year, reiterating its iconic retail status
service charge for all eligible employees with world famous brands and popular
during the period of the renovation which Sri Lankan brands within its milieu.
reduced the operating profitability. Continued promotional and marketing
Overall energy cost reduced by Rs. 13.4 campaigns, especially during festive
million compared to the previous year, seasons have been instrumental in
largely due to reduction in electricity increasing footfall as have the various
tariff during the latter part of the previous retail tenants, some of whom have been
financial year. at the Boulevard since inception, adding
a competitive edge to the offerings
Net finance income of the Hotel available. The supermarket, which
decreased by Rs. 75.1 million compared has now taken over a majority of the
to previous year due to excess short basement which it shares with the food
court, has become the preferred option The market price per share at the close The steps ahead will focus on
for the complete lifestyle shopping of year did see a decrease to Rs. 47.8 organic growth, infusing strategies
experience in the city with an expansive having closed the previous year on a that will maximize on the Group’s
range of high-end and local fare, which high of Rs. 63. As a result of that P/E synergies, asserting the position of
has endeared itself to a loyal expatriate ratio declined to 11.5 from 15.88 the being a benchmarked leader in the
customer base as well. previous year. city hospitality industry. The hotels
will further enhance the strategy of
AHPPLC has now ceased the leasing Future Direction ‘Creating a greener mindset’, while
of apartments, a move it made in the We do observe the competition increasing group revenues by enhancing
previous financial year and hence intensifying in the next few years but productivity, efficiency, innovation,
does not gain any rental revenue from remain prepared for the challenges that quality and service, revolving on the
the adjacent apartment complexes. will follow. As trends point out, there Cinnamonization foundation to optimise
However, rental income from Crescat will be growth in both the five-star, three on the opportunities emerging in the
Bourlevard continued to increase and four-star city hotel sectors, albeit a region to entice the contemporary new
year-on-year, posting a growth of 7 per slower pace in the former. For Cinnamon age Asian traveler.
cent. Profit before tax for the division Grand and Cinnamon Lakeside, we do
hence stands at Rs 282.5 million, believe the Cinnamonization process
which includes a gain on fair value of which is now well absorbed into
investment property of Rs. 98 million. the hotels way of life, will give both
hotels considerable edge in luring the
Further the finance income decreased by discerning global traveller. The benefits
49 per cent as dividends were paid out of of this strategy will be fully observed
the available funds. in next year’s financial review from a
quantitative perspective.
Profit after tax was Rs. 270.8 million
which was 105 per cent higher than the In the F&B space, both hotels are
last year’s Rs. 132 million. constantly innovating product
and service offerings, keeping the
Shareholder Value excitement and anticipation of newer
While last year heralded a decline in F&B options always on the cards.
Earnings Per Share, this year’s astute Marketing and promotional strategies
strategies signaled an increase in EPS will include the Cinnamonization
to Rs. 4.16 per share, compared to strategy of discovering gourmet
last year’s Rs. 3.97. The Group ethos journeys via constantly updating menus,
of delivering consistent value to banqueting and dining experiences, food
shareholders saw the Group continue festivals and the visits of international
that momentum with a Dividend per celebrities. An envisaged 20 per cent
share of Rs. 5.5, which is significantly growth is expected for the two hotels in
higher than the previous years. In fact, F&B over the next year given that most
this is the highest Dividend per share restaurants are forecasted to run at full
that has been declared since 2012, capacity.
with the last three year’s consistently
declaring Rs. 4 per share. The Dividend
Payout Ratio thus stands at 1.32 against
1.01 in 2014/15.

Awards and Certifications
Being a benchmarked leader in the

hospitality and real estate industries,
AHPPLC has an underlying ethos to
continually improve the bar. It remains
stringent in its focus on governance
and ethics, quality and standards,
leadership and service excellence,
green conscience and contribution to
the industry and to the country. In this
process, the Group has been crowned
with many a laurel and presented
with many a commendation for its
unrelenting focus on being the best.
Cinnamon Hotels and Resorts Head of Human Resources-city hotels Sujeeva Cooray receiving the
AHPPLC
Compliance+ certification for Cinnamon Grand
Silver Award for Diversified Holdings

(up to 5 subsidiaries) Recertifications
Annual Report Awards of Excellence
2015 - Institute of Charted Accountants ISO Recertification for OHSAS 18001, ISO 14001 and ISO 22000 – SGS Lanka
of Sri Lanka The first five-star city hotel in Sri Lanka to receive and maintain uninterrupted ISO
certifications in all three standards for the past nine years.
CINNAMON GRAND COLOMBO Awards
Certifications JKH Chairman’s Award for Sustainability

Commended for its ongoing initiatives and consistent overall sustainability
Compliance+ - Employers Federation performance, Cinnamon Grand won the coveted Chairman’s Award for the second
of Ceylon time.
In recognition of emphasising
international business practices, the
hotel was one of ten conferred with
this certificate which is based on an
independent audit that covers the
four pillars of equal opportunities in
employment, employer-employee
relations, work arrangement practice
and environment. It is supported by
International Organisation of Employers
(IOE).
Culinary Awards
Culinary Art 2015 – Chefs Guild of

Sri Lanka
15 Gold medals, 13 Silver medals and
20 Bronze medals – a total of 48 medals
Dilmah Real High Tea Challenge

Gold Award won by F&B Senior Captain
and Chef
Sports Awards
John Keells Inter Company Rugby 7’s

Overall Cup Champion, Player of the
Tournament and Man of the Final
John Keells Inter-Company Swimming Cinnamon Grand rugby team after winning the coveted Championship Cup at the JKH Intercompany
Rugby 7’s
Championships 2015
Overall Runners Up with 11 Gold
medals, 12 Silver and 18 Bronze
CINNAMON LAKESIDE COLOMBO
Travel Trade Swimming Meet 2015
Overall Runners Up with 14 Gold, 14 Certificate of Compliance in the Hotel Companies Category
Silver and one Bronze Annual Reports Awards for Excellence 2015 – Institute of Chartered Accountants of
Sri Lanka
Membership in Industry
Associations Recertifications
Sri Lanka Conventions Bureau | La Green Globe Certification for the fifth consecutive year
Chaine des Rotisseurs: Echo, the OHSAS 18001:22007 for Health and Safety in the workplace
Italian restaurant and The London ISO 22000:2005 for Food Safety Management Systems
Grill, the hotels fine dining restaurant
are certified members | Tourist Hotel Culinary Awards
Association of Sri Lanka | Ceylon
Chamber of Commerce | Pacific Culinary Art 2015 – Chefs Guild of Sri Lanka
Asia Travel Association (PATA) | Five Gold medals, ten Silver medals, 15 Bronze medals – a total of 30 medals
Indo-Lanka Chamber of Commerce
| AMCHAM | SKAL International World Heart Day Challenge – Ministry of Health
(International Association of Travel First Runner Up
and Tourism Professionals) | Sri
Lanka-British Business Council | Sri Sports Awards
Lanka-Japan Business Council | Sri
Lanka-New Zealand Business Council |
John Keells Inter-Company Swimming Championships
Sri Lanka-Malaysia Business Council |
Second Runner Up with 14 golds, 6 Silvers and 3 Bronze medals, a total of 23
Field Ornithology Group of Sri Lanka
medals
| Sri Lanka Business and Biodiversity
Platform
John Keells Inter-Company Badminton Championships
Women’s Champions and Star Player of the Tournament

Management Structure of Cinnamon Grand
Sector Head -
city hotels /
General Manager
Head of Sales - Head of Marketing Head of Human

Resident Communications - Resources - Director Finance -
Manager city hotels city hotels city hotels city hotels
23
Executive Chef Head of Leisure Manager Chief Head of Human Finance

Sales - city hotels Food & Beverage Engineer Resources Manager
Manager
Compliance Head of Banquet Assistant Learning Security
Executive Front Office Banquet Operations Director
Health & Housekeeper Manager Chief Development Security Consultant -
Safety Sales Manager Engineer Manager City Hotels
Annual Report 2015/16
Stakeholder Mapping and Our guests therefore will always gain fair trade, open dialogue, transparent
Engagement Process an experience beyond compare. The processes and emphasis on quality
Company is continually raising the bar driven relationships. The high standards
in product and service offerings and expected of them have also encouraged
Being a leader in a highly service the Cinnamonization experience will our valued business partners to practice
driven industry, it is imperative that undoubtedly intensify even further. a culture of continuous improvement
the Company maintains a constant within their businesses, which extends
engagement with stakeholders, given While delighting the customer from micro and SME entrepreneurs who
that this is a definite pathway to map completely, we are also keen on supply the Company with local produce,
expectations, paradigms and even creating a mindset that is socially and to large entities, multinationals and
future visions, to create and maintain environmentally conscious through global brands who inculcate best
an ongoing sustainable business. numerous proactive initiatives, believing practices based on international
The Company believes in forging and strongly that our guests are our partners standards. A transparent procuring
nurturing long term relationships and in instilling a better life on and for our process aligned with Group policy
this premise has created a strong planet. enables the Company to have a clear
foundation of loyalty, commitment focus on uncompromising levels of
and confidence which is well evident It is our associates who have taken this excellence.
in the positive feedback we continue Company into the realms of absolute
to receive from stakeholders who are leadership and work hard to affirm this Our communities are integral to
now firm proponents of our brand of status. This is a team who believe in the sustainability of our business.
service excellence. With stakeholder ‘I will get it right the first time, all the We strongly believe that in bringing
engagement being integral to our time’, which has held it in good stead, them into partnership with us, we are
future journey, the Company has given the encouraging feedback we have uplifting and developing communities
instituted a comprehensive and inclusive received from other stakeholders, and that contribute both quantitatively
stakeholder engagement process, the awards and accolades we continue and qualitatively to the larger national
built on openness, transparency, to amass. canvas. Emphasising a culture of
responsiveness and accountability, employee and even guest volunteerism,
which has now been further augmented Being a responsible employer who has the Company has succeeded in instilling
through the Cinnamonization strategy. asserted our position as the preferred a socially conscious mindset for better
employer in the industry, the Company engagement and hence, better results.
Our stakeholders encompass a wide conforms to all regulatory diktats and
demography, all of who expect the best practices as directed by local We also engage continually with the
Company to deliver on its platform of and international regulatory bodies media, industry leaders and regulators,
excellence, inculcating the coherent including the International Labour NGOs, opinion makers, cause
values of the business, which as a Organisation. This includes being a champions and regional counterparts as
corporate steward is expected of us. non-discriminatory employer whether a vital component in running an ongoing
The Company in turn, is attuned to in age, gender, physical ability, culture, business, given the influence they have
these expectations and enthusiastic religion, ethnicity and in shunning child on the industry and the inspiration
on delivering on them, as these form a labour in any form, including among our they can permeate to the Company in
blueprint for the future sustainability valued business partners and suppliers. mapping future business strategy.
of the business. Being a company that All HR policies and strategies are
constantly raises the bar of excellence, aligned to the Group policy.
the demands of our stakeholders too
can be challenging; but it is also a The open and cordial relationships
platform that enables us to continually we have nurtured with our valued
drive ourselves to set benchmarks that business partners has given us an
are higher, quality that is better and edge as the preferred partner to do
service that is unparalleled. business, given our focus on ensuring

Stakeholder Stakeholder Sub Current Method of Engagement and Materiality of Stakeholder Issues
Category Frequency
Customers Adults Method of Engagement: 1. Rate fixing

Awareness campaigns through press 2. Ethical products
releases, posters, social media, fundraising 3. Carbon footprint
for the Field Ornithology Group and 4. Ethical marketing
Cancer Hospital, donations for social 5. Corporate community engagement
groups, participation of international 6. Health and safety
environmental/tourism events, end-user
surveys, booker surveys
Frequency of Engagement:
Face-to-face feedback
Guest Comment Cards in rooms and
restaurants
Feedback and reviews on TripAdvisor
Duty Manager’s Log
Restaurant log books
Bi-annual personal meetings
Awareness through press releases,
posters and social media
Annual fundraising for Cancer Hospital
and participation in international
environmental events
Media events
Daily sales visits
Entertainment of clients and patrons
Children Method of Engagement:
Awareness and education through print
media and cultural education through site
visits, children’s workshops
Monthly cultural and educational visits
to Nuga Gama
Children’s workshops
Kiddies events feedback form
Associates Managers, Method of Engagement: 7. Accommodation
Executives and Non- Participation in green forums, direct 8. Basic salary
Executives reporting, open door policy, annual events, 9. Employee awareness and training
training and development activities, 10. Employee rewards and remuneration
sustainability awareness seminars, 11. Occupational health and safety
celebrations of international environmental 12. Emissions, effluences and waste
dates, employee satisfaction surveys, 13. Mutually beneficial relationship with
intranet communication, competitions and supplier
quarterly associate meetings
Category Frequency
Associates Managers, Frequency of Engagement:

Executives and Non- Weekly meetings, updates on
Executives Sustainability Notice Board
Social media posts
Monthly poster campaigns, initiative
awareness and educational sessions
Monthly management meetings
Assoiciates Quarterly Meetings
Mid-year review
Annual performance review
Annual gatherings, parties and sports
events
Custom-made training programmes and
development activities according to
sustainability guidelines
Voice of Employee survey (VOE)
Great Place To Work survey (GPTW)
‘Tell GM’ box where associates can
directly communicate with the General
Manager on issues they face at work
Business Hotel School, Method of Engagement: 14. Health and safety
Partners Inbound/Destination Questionnaires and surveys, one-on-one 15. Product diversity
Travels Agents meetings, e-mail correspondence, circulars, 16. Adhering to international standards
membership in industry associations 17. Best practices
18. Community engagement and
Frequency of Engagement: Carbon Footprint
Annual contract renegotiations on-going 19. Confidentiality
through conference calls, e-mails and
circulars
Business travel
Trade shows
Experiential tours
Daily sales visits

Category Frequency
Community Local communities Method of Engagement: 20. Infrastructure development

(schools, Awareness through posters, paintings, 21. Creating awareness for youth
monasteries, pre- environmental videos and education
schools, hospitality programmes, donations and community
related educational development projects.
institutions, home
for elders and Frequency of Engagement:
conservation groups) Engagement with the community is
done prior to initiating projects in the
respective areas of focus
Bi-annual discussions for community
development projects
Annual supplier sustainability awareness
sessions
Awareness campaigns in key areas
where suppliers congregate
Sponsorships of educational and social
events
Arts and cultural activities
Familiarisation visits, training
programmes and specific hospitality
career related training
Suppliers Method of Engagement: 22. Environmentally-friendly packaging

One-on-one meetings, group meetings, 23. Resources scarcity
awareness sessions, collateral, education 24. Awareness on environmental issues
programmes, donations and community 25. Ethical production
development projects, ethical purchasing 26. Child labour remediation policy
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 are organised and in which
the hotel participates
Monthly review meetings
Awareness session on quality
Monthly price review meeting
Annual contract renegotiations
Category Frequency
Government Sri Lanka Tourist Method of Engagement: 27. Compliances/regulatory restrictions

Board, Sri Lanka Meetings, discussions, phone calls,
Institute of presentations and briefings, advisory
Tourism and Hotel meetings, Sri Lanka Tourist Board
Management, membership, Sri Lanka Hotel School training
Central programme membership, awareness
Environmental workshops on tourism/sustainability-related
Authority, National issues are ongoing processes with tourism-
Cleaner Production related Government agencies.
Centre, Ceylon
Electricity Board, Frequency of Engagement:
National Water Engagement with these Government
Supply and Drainage bodies is an ongoing process through
Board, National monthly newsletters, e-mails, circulars,
Ozone Unit, National quarterly briefings, websites, etc.
Institute for The Senior Management is on the
Occupational Safety Advisory Board of the Sri Lanka Institute
and Health, National of Tourism and Hotel Management and
Cancer Hospital, are visiting lecturers on a quarterly basis
National Cancer
Control Programme,
Colombo Municipal
Council, Labour
Department and
Sustainable Energy
Authority
Society NGO, Media, Method of Engagement: 28. Ethical business practices
Pressure Opinion Leaders, Websites, press releases, media briefings,
Groups/ Conservation correspondence, discussions, participation
Media Organisations, at NGO forums
Trade Associations,
Tourism Frequency of Engagement:
Associations, Engagement with stakeholders are
National Cancer carried out on an ongoing basis, through
Control Programme correspondence, websites, media
briefings and press releases

Guest Engagement
An integral facet of our stakeholder
engagement process, the Company’s
guest engagement initiatives are
designed to be the channel that
eventually formulate the ultimate
vision, mission, objectives and strategy
of the Company business plan. The
ongoing guest engagement processes
at Cinnamon Grand and Cinnamon
Lakeside evaluate customer feedback
through numerous channels that enable
the collation and evaluation of guest
satisfaction levels in accommodation,
products and services. These include
guest comment cards in rooms and
restaurants which are collected and
analysed daily with solutions whenever Cinnamon Grand Manager Front Office Guillaume Fonseka, Assistant Cheif Engineer Sudarman
possible being immediate or worked Perera, Manager Compliance Health & Safety Rajitha Amarasinghe, Chief Engineer Panduka
Wijewaradana, Executive Housekeeper Vindya Rathnavibushana and Manager F&B Travis Casather
on through the appropriate channels.
at the Hotel’s Earth Hour 2016
Customer feedback is also monitored
through digital and social networking
sites including Trip Advisor, Booking.
Grand’s Green Gestures
The in-room compendiums at Cinnamon Grand highlights a page within which
com, Facebook, Twitter and Zomato.
guests are appraised on the numerous ways they can participate in environmental
conservation and in sustaining the livelihoods of indigenous craftspeople.
Earth Hour Celebrations
In instilling a green consciousness
among our guests, Cinnamon Grand
Green Cards
All rooms have Green Cards that encourage guests to support green initiatives
celebrated the global movement of
mooted by the hotels including those of saving water via sustainable laundry
Earth Hour by switching off all non-
practices and energy conservation.
essential lights and lighting soy candles
at the lobby, encouraging guests to
participate in this step towards reducing Curated Menus
the Hotel’s carbon footprint. Cinnamon The hotel continues to innovative menus based on the Cinnamonization strategy
Grand also used South Asia’s first of ‘Inspired Living’, adding a series of in-room dining experiences and signature
Carbon Neutral venue Nuga Gama for cocktails curated specifically to enhance the guests’ F&B options. In addition, the
this commemoration to augment further Diabetic Menu comprising 30 dishes launched by Cinnamon Grand continues to be a
value to the ethos of the celebrations. popular option among guests who enjoy the hotel’s promise of guilt-free indulgence.
This menu is available at all restaurants of the hotel.
‘Connect with Us’ Cards
Encouraging guests to use social media Celebrations and Festivities
as part of the feedback process and Cinnamon Grand is enthusiastic about redefining contemporary Sri Lankan culture,
reducing the hardcopy versions of entertainment and experiences as directed in the Cinnamonization strategy. Since
the guest feedback forms, the hotel inception however, the hotel has encouraged guests to participate in numerous Sri
distributes ‘Connect with us’ cards with Lankan cultural and religious festivals. This year too, taking advantage of the typical
all relevant social media information so rural setting of the village in the city Nuga Gama, guests celebrated Sinhala and
that guests can join in the interactive Tamil New Year festivities enjoying traditional fare and engaging in local customs,
online conversations and in tandem, games and activities.
reduce the usage of paper in this
process.
For Vesak, the hotel was illuminated

with unique decorations while Nuga
Gama was lit up in a more traditional
manner.
The festive season of Christmas leading

up to the New Year including New Year’s
Eve tends to be a sellout period for
Cinnamon Grand given the reputation
of offering probably the region’s most
unparalleled experiences during the
time. From the highly popular Santa’s
Workshop for children, to the Christmas
Carnival by the poolside, Moods of
Christmas, to dining experiences and
parties that are festive and celebratory,
each year, Cinnamon Grand introduces
a new concept to the seasonal line up. ‘Green Idea’ Winner Anura Silva receiving his prize from Cinnamon Hotels & Resorts Sector Head-
This year, the Hotel debuted its own City Hotels and Cinnamon Grand General Manager Rohan Karr at the Associates Quarterly Meeting
twist to the world’s traditional festive
fairs, introducing the Christmas Market
A number of initiatives have proved to relations. This is doubly significant
with over eighty varieties of seasonal
be extremely successful in founding a as there are no Collective Bargaining
fare sourced from around the world.
pool of excellent ideas and grounds for Agreements in effect with any of these
open and frank discussion. This includes unions. The JSS and ICEU encompass
Employee Engagement
Tell GM, a communication box that less than 10 per cent of our workforce.
Being our most valuable asset and the
encourages associates to input their
reason for the Company continuing
grievances, opinions and suggestions to It is also pertinent to note that
to be a benchmarked leader in the
the General Manager, to which solutions Cinnamon Grand’s strong team today
country, engaging continually with
are posted on an adjacent notice remains one of the best in the industry.
our associates is an essential function
board. Another was the Green Idea Box We are proud to have honed a team that
that must be constantly honed and
launched during Environment Week has become the most sought after in the
nurtured in order to optimise on their
to commemorate World Environment country but at the same time, are aware
contribution towards sustaining our
Day where associates were encouraged of the intensity of the competition which
business. Practicing an open door policy
to share ideas and give suggestions to requires highly skilled professionals for
where each supervisory level remains
make the hotels greener. The best ideas the emerging and existing properties
interlinked to gain this proactive
were rewarded with cash prizes at the in the city hotels milieu. This makes us
engagement, associates are assured of
Associates Quarterly Meeting. very cognisant of the need to ensure
a fair and non-discriminatory working
that our associates know that they are
environment with remuneration
Cinnamon Grand maintains a cordial and valued, appreciated and recognised. The
and benefits that are above par in
transparent relationship with three trade numerous initiatives Cinnamon Grand
the industry. Regular meeting and
unions, namely the Sri Lanka Nidahas has introduced to ensure a motivating,
discussion forums, constant initiatives
Sevaka Sangamaya, Jathika Sevaka inspiring and rewarding environment
designed to improve competencies and
Sangamaya and the Inter-Company is constant and has enabled attrition
capabilities, and numerous platforms
Employees’ Union. The affability of the rates to be contained to 13.8 per cent
of engagement that propose mutually
relationships with these unions are well annually.
beneficial ideas help nurture a strong
evidenced in the fact that the hotel has
and loyal team who are brimming with
faced no employee strikes or labour
propositions for a win-win formula.
unrest in any form and as a result,
has not lost a workday due to labour

Cinnamon Grand also follows a stringent

policy of recruiting associates from
Sri Lanka, believing strongly that
Sri Lankans have the apt talent and
competencies that can be honed to
make a winning team. The premise has
proven to be the right application and
to-date, Cinnamon Grand employs a
total of 1,214 Sri Lankans with just 0.7
per cent comprising foreign expertise.
Rewards and Recognition
Associates Quarterly Awards

High achievers who have shown
immense potential and worked
beyond expectation are rewarded at
the Associates Quarterly Meetings Charismatic politician Rosy Senanayake giving a motivational speech during the Associates
presided by the Sector Head. These Appreciation Week
awards include Associate of the Quarter,

Associate of the Year and the GM’s
Associates Appreciation Week gratuity to those who have completed
Award with nominees and winners alike
Celebrating Cinnamon Grand’s tenth a service of over fifteen years, welfare
presented with cash rewards and letters
anniversary and fittingly appreciating loans and even death donations, the
of appreciation for their dedication to
the team that has made it the iconic wellbeing and interests of associates are
ensuring market leadership of the hotel.
leader in the hospitality industry in the paramount in instilling further loyalty
country, an array of initiatives were and better lifestyles among associates.
Long Service Awards
held for associates for an entire week.
In an era when competition within
From promoting ‘health is wealth’ Work-Life Balance
the industry is intense, loyalty and
through random and fasting blood sugar A healthy and motivated dynamic
commitment must be recognised and
testing, and BMI testing, to enhancing team is the secret to the success of
rewarded. These inherent traits are
personalities through grooming and any business. For this Company, it is
felicitated annually at the Long Service
accessorising correctly, inspirational a necessity given the extraordinary
Awards for those associates who have
workshops as well as wealth commitment that is expected of a team
completed tenures of 5, 10, 15, 20, 25
management seminars and a bazaar that has proved beyond doubt that it
and 30 years and are presented with
with an exciting array of appliances and is a winning one. We strongly believe
gold sovereigns in proportion to the
other items, each event was meant to that happy contented people form the
tenure served.
enhance the work-life balance which nucleus for a productive and motivated
is an imperative facet in creating a workforce, which extends not just to the
Retirees Farewell workplace, but must be imbued in mind,
dynamic and vibrant team.
For those retiring from Cinnamon Grand
body and soul of all associates under
after service of over ten years, the hotel
Welfare Society our umbrella. Team spirit, camaraderie
recognises the immense dedication and
An active and engaged Welfare Society and unity is compulsory, as is peace
long service extended to the Company.
within Cinnamon Grand extends of mind at work and at home, which
A monetary presentation is made both
numerous monetary and support naturally then extends to a better work-
from the Welfare Society and the Hotel
benefits at various milestones and other life balance and higher productivity.
in proportion to the years served.
occurrences. From presenting a gift
on a marriage or the birth of a baby, to At the same time, with the industry
allowances for critical illness or no-pay itself being competitive, the challenges
allowance for those on approved no-pay are immense. Our associates must
leave due to medical reasons, service be prepared to overcome these
innumerable challenges with the right

attitude, skills and competencies.
Cinnamon Grand has instituted a
mentoring programme, enabling
associates to work with a mentor in
meeting the challenges that emerge and
using teams to gain collective strength
in mooting ideas and suggestions, and
increasing productivity.
The Company also firmly believes in

instituting extracurricular activities
as a means of harnessing team spirit,
highlighting inherent talent and skill
among associates and felicitating them
for their achievements.
Associates Lifestyle Complex The interactive social media wall at the Associates Lifestyle Complex
One of the most exciting ventures in
garnering a better work-life balance
for the Cinnamon Grand associates
In addition, Cinnamon Grand also Creating a Greener Mindset
was the launch of the state-of-the-
conducts a free breast cancer screening Based on Cinnamon Grand’s green ethos
art Associates Lifestyle Complex,
and pap-smear test for all female which aims to position the hotel as the
titled the ‘Home of the Trendsetters’.
associates during World Breast Cancer greenest in the city, it has accquired the
The complex, spanning 69,000 sqft
Month. required standards and certifications.
is a multi-storey building, housing
The Hotel continues to instill best
recreation and relaxation lounges,
Sporting Activities green practices among associates and
changing rooms, dormitory facilities,
other stakeholders to ensure that the
PC laboratories, library, hair and beauty
Grand Inter Department Tag Rugby momentum is maintained.
salon, a mini-mart, interactive social
media wall, a rooftop terrace, exclusive Sixes
expatriate quarters and training rooms. Holding the very first Inter-Department World Environment Week
It is also equipped with the latest sound Tag Rugby sixes, 13 teams from various In conjunction with the theme prevalent
system which runs an in-house radio departments at Cinnamon Grand for World Environment Day 2015,
station with voluntary Radio Jockeys participated with over 400 associates ‘Seven billion dreams. One planet.
collated from among associates. forming the cheering squad. Consume with Care’, Cinnamon Grand
initiated a series of programmes
Grand Soccer 7’s during the week in June, bringing
Employee Wellness
The much anticipated Inter-Department together multiple stakeholders on the
With employee health being a wealth
Soccer Championships was held at common platform of environmental
to the Company, Cinnamon Grand
Henry Pedris Grounds with both male consciousness.
has a host of projects that have been
introduced to ensure preventive health and female forming 16 teams. Over 500
and wellbeing. These include an annual Associates were at the grounds to cheer B2b – Banners to Bags
medical checkup for all associates over their colleagues. Pioneered as a first in the region,
forty, all senior executives and food Cinnamon Grand’s Banners to bags
handlers, a 24-hour in-house clinic Inter Department Cricket Sixes (B2b) initiative was extended to the
with a visiting doctor, trained First Aid The BRC Grounds was the venue for the other Cinnamon’s city hotels this
personnel and the conduct of regular 500 associates who gathered to cheer year, broadening scope and impact of
eye clinics. 28 men’s and women’s teams vying for this green initiative which was lauded
the Sixes championships. by a Nobel Co-laureate when it was

launched. The hotels collectively sold

300 bags made from 57 banners,
sourced from banners used by the
hotels and by valued business partners
who have had events at the hotels. A
total of Rs. 161,500 was collected, of
which proceeds were channeled towards
the children’s ward of the Maharagama
Cancer Hospital and cancer related
awareness. Cinnamon’s city hotels
comprise five-star properties Cinnamon
Grand, Cinnamon Lakeside and three-
star lean luxury Cinnamon Red.

Green Idea Box
Each hotel now has a Green Idea Box
which encourages associates to share
their ideas and suggestions in making Cinnamon’s city hotels Planet Quiz underway
the properties more environmentally
friendly and sustainable. The best
ideas are rewarded at the Associates
Quarterly Meetings. Sustainability Short Takes
Introduced by Cinnamon Grand, the monthly Sustainable Short Take is an
educational venture where sustainability-realted topic discussions are circulated
Seminar on Environment and
among city hotel associates in English and Sinhala. Periodic audits are conducted
Biodiversity
to ensure comprehensive knowledge on the contents therein. Green Notice Boards
Cinnamon Grand Associates gained
are displayed at the properties, illustrating the short takes in both languages with a
awareness on endemic and endangered
themed poster to drive awareness.
flora and fauna of Sri Lanka at a seminar
conducted by Environment Lawyer and
Ecologist Jagath Gunawardena, on the
Consumption Reports on the Green Corridor
Cinnamon Grand’s dedicated Green Corridor continued to display wastage from
theme, Environment and Biodiversity.
several units in order to create awareness and encourage waste minimisation. The
display comprises a monthly comparison of consumption in wet garbage, water,
Planet Quiz
electricity, petrol, diesel, furnace oil and recycling initiatives.
In a bid to reiterate the Company’s
stance in creating a greener mind-
set among associates, the first-ever
The Cinnamonization Video Wall
All city properties run a sustainability related video along with an inspirational and
Cinnamon’s city hotels Planet Quiz
an empowering message weekly on its Cinnamonization video wall located at the
brought together 60 associates in teams
cafeterias. However, marrying the concepts of maximising publicity while minimising
of ten from each of the properties.
energy usage, the videos are played only during mealtimes.
Based on creating a platform of learning
and awareness while encouraging
associates to enhance their knowledge
on environmental issues, sustainability
and general knowledge related to the
planet, the overall champions trophy
was won by Cinnamon Grand with a 100
point lead.
indicators reveal a holistic Training making every learning experience, a way

Cascading Knowledge
Needs Analysis that forms the of everyday life.
framework for the annual training
At AHPPLC, the knowledge gaining curriculum within the Company. Cinnamon Grand’s extensive learning
culture is ingrained into the way we and development programmes
work and do business. Each day is one of One of the most unique aspects within are based on instilling absolute
learning, of knowledge gain and of skill the imparting of our training and professionalism, ethics and total
enhancement. While we pride ourselves development needs is the emphasis on commitment to each job description
on having some of the best talent and in-house training which has prompted through every hierarchical level. It is
skill that the country possesses, we the differentiation in our results oriented also designed to bring pride of work
also realise that these talents and skill training capabilities. Training is imparted and dignity of labour at all skill levels.
must be honed if we are to maximise by the Learning and Development Hence cross-skill exposure and team
these individual capabilities. By imbuing Team in collaboration with TAD Trainers efforts are encouraged, while innovative
an enriching training, learning and (Train, Assess and Develop) from the suggestions for training are also
development curriculum, the Company departments whose dynamic approach supported.
has ensured that its associates collate to enhancing and expanding knowledge
an immense amount of industry relevant and skill has been the panacea in seeing Cinnamon Grand conducted a total
knowledge that has been instrumental Cinnamon Grand associates emerge of 33 training and development
in ensuring that Cinnamon’s city hotels as the most sought after industry programmes during the year, imparting
remain industry spearheads. professionals and experts. knowledge to 6,568 associates over
an average of 4.4 training hours per
Formulating a comprehensive training The differentiation is seen in the associate. These programmes were
blueprint that encapsulate Company expansive training curriculum, which conducted in-house using internal
vision with individual aspirations, embeds the hotels value driven culture and external resource persons and
a series of formal and information across every L&D programme, while externally by both foreign and local
trainers.
External training statistics for the year
Category Q1 Q2 Q3 Q4 Total No of Average

No of Staff Hours
Hours
Number of hours of training: AVP and above - - 40 80 120 5 24
Number of hours of training: Manager - - 32 72 104 4 26
Number of hours of training: Assistant Manager - - 56 112 168 7 24
Number of hours of training: Executives 55 333 279 72 739 75 10
Number of hours of training: Non-Executives 0 4 8 163 175 11 16
Number of hours of training for male employees by - - 32 64 96 4 24
category: Manager
category: Assistant Manager
category: Executives
Number of hours of training for male employees by 49 299 251 65 664 73 9
category: Non-Executives

Category Q1 Q2 Q3 Q4 Total No of Average

No of Staff Hours
Hours
Number of hours of training for female employees 0 4 8 163 175 11 16
by category: AVP and above
Number of hours of training for female employees - - 8 16 24 1 24
by category: Manager
Number of hours of training for female employees - - 8 16 24 1 24
by category: Executives
Number of hours of training for female employees 6 34 28 7 75 2 38
by category: Non-Executives
Defined Contribution Plan Obligation (EPF & ETF) in Rs.'000'
2015 2016
Cinnamon Cinnamon Property Group Cinnamon Cinnamon Property Group
Grand Lakeside Grand Lakeside
EPF 65,506 34,429 2,617 102,552 73,651 34,184 2,826 110,661
ETF 13,058 8,542 392 21,992 14,547 8,546 424 23,517
Defined Benefit Plan Obligation (Gratuity) in Rs.'000'
2015 2016
Cinnamon Cinnamon Property Group Cinnamon Cinnamon Property Group

Grand Lakeside Grand Lakeside
Employee Benefit Liability 126,382 110,000 5,491 241,873 148,794 118,604 6,752 274,150
as at 31st March 2016
Payments During the year 8,802 14,561 - 23,363 12,860 16,216 - 29,076
The Cinnamonization strategy and the fundamentals of being part of emerging competition and to sustain its
launched this year comprehensively the JKH group. Another regular training leadership position.
brought together all associates on initiative is Cinnamon Magic, a good
the single ethos of ‘Inspired Living’. example of in-house trainers drawn Project WAVE
In tandem with this strategy, various from different departments who share Founded on an initiative of the
groups of associates also underwent their wealth of experience with new John Keells Foundation, associates
specific training that would enhance recruits. Other targeted programmes participated in Project WAVE (Working
their job descriptions, while gaining include soft skills development, Against Violence Through Education)
the rudiments of both soft skills and personal grooming, customer service to address gender based violence and
specialty skills to enhance the overall tenets, basic fundamentals of specialist child abuse in Sri Lanka. This initiative
look and feel of the brand. departments including legal and finance was aimed at motivating associates to
and etiquette. be the vanguards in creating a safer
Cinnamon Grand and Cinnamon and healthy working environment not
Lakeside conducts a comprehensive Some initiatives listed henceforth, were only at work but also in the family and
three-day induction programme for all introduced this year by Cinnamon Grand community environs as well.
new associates, introducing them into to ensure that skill and talent at all
Hotel’s operational code, value culture levels are maximised in order to meet
Cinnamon Drive
An airline-inspired service offering
developed to provide trendsetting and a
comfortable drive experience to guests,
the ‘Cinnamon Drive’ training was
extended to 58 chauffeurs.
Let’s Learn Chinese

Under the Chinese market strategy, a
booklet was presented to associates
with the most commonly used phrases
in Mandarin. The L&D team with the
help of an interactive video for correct
pronunciation, conducted this training
to all front-line staff.
SOS (Sequence of Service)

Focusing on a guest’s complete Marco Pierre White with his Executive Chef Andrew Bennet in the Tao kitchen, prior to ‘Marco’s
Great British Gala Dinner’
journey at a restaurant, this is an
ongoing training programme spanning
all restaurants. This looks at Critical a once in a lifetime opportunity for the kitchen teams to work with a chef of this
Contact Points (CCPs), appropriate stature, working, contributing and knowledge gaining as a real-time triumph within
words, body language and phrases, their training and development goals.
key F&B techniques and all steps in the
interaction path of a guest. Similarly, food and restaurant critic and Masterchef Australia Judge Matt Preston
held an informal discussion in the kitchens of Cinnamon Grand, detailing some of his
The First Impression experiences in international kitchens and restaurants.
Imparted to all front-line asssociates,
the fundamental of customer service is Internationally acclaimed Executive Chef of the Prestigious ‘Royal Military Academy
conveyed via role play and situations for Sandhurst’ who has managed menus for Royal Family visits, senior dignitaries and
awareness and responsiveness, with the world leaders, Rob Kennedy Executive Chef also shared his expertise with the Cheers
concept of instilling ‘wow’ moments for Pub staff working alongside them in the kitchen during the British Food Week in
customers which make for memorable January.
experiences associated with the
Cinnamon brand. Chef Leo De Leijer, Master Baker at IREKS, one of the world’s premier baking
ingredient manufacturers, conducted a one-of-a-kind workshop for Cinnamon Grand
Masterchefs in the Cinnamon Grand pastry chefs, on the invitation of Cinnamon Grand adding significant depth of skill to
Kitchens their baking prowess, sharing tips and information for perfect baking.
Celebrity restaurateur, gourmet author,
food critic and Masterchef Australia Curator Training
Guest Judge and ‘Godfather of Modern Creating a complete lifestyle experience requires a newer outlook on products and
Cooking’ Marco Pierre White worked services, a brighter attitude and enhanced knowledge on the offerings of the hotels.
in the Cinnamon Grand kitchens with
his Executive Chef Andrew Bennet and Cinnamon Grand and Cinnamon Lakeside conducted an extensive Cinnamon Curator
the hotel’s team of chefs for the many Training for over 50 key F&B associates of the city hotels.
high profile events he hosted. This was

In-house training Programme description Staff per

programme
Cinnamon Grand A three-day comprehensive programme to introduce new recruits into Cinnamon Grand’s 441
Induction operational code. It provides an introduction in to the value culture of a star-class hotel,
while stressing the importance of being part of the JKH group
Cinnamon Magic A programme aimed at instilling the right mindset among new recruits, the sessions 130
are conducted by a team of Cinnamon Magic trainers comprising staff from different
departments to provide a wealth of experience and knowledge
TAD Train the Trainer Conducted by the Learning and Development trainers, the programme is designed to 124
Programme nurture potential TAD trainers from the Hotel’s associates. Upon completion of the
programme, all successful TAD trainers are then certified as such at the Associates
Quarterly Meeting. All TAD trainers would then be responsible for delivering high intensity
developmental SOP trainings within Cinnamon Grand in addition to playing a lead role at
SOP Workshops for the respective departments
Soft Skills for Security The tailor-made soft skills programme addresses the critical role played by the security 33
staff to ensure Cinnamon Grand maintain its star-class standards
Fire Awareness To educate all staff on procedures to be followed during a fire or any other emergency 928
Training situation. How to use fire extinguishers, fire blankets and other safety equipment’s were
conveyed, along with occupational health and safety aspects of working in a hotel. This
was conducted by the in-house fighting team
First Aid Ambassador Basic training for staff to understand the fundamentals of First Aid. The programme was 25
Training conducted in-house by the Red Cross Fire Aid team of Sri Lanka
Seasonal Information This programme was conducted for all staff in the months of October and November to 203
give the basic knowledge on the upcoming events and promotions which were planned for
the December season
Personal Grooming All ladies were given training on the grooming standards that need to be followed while at 135
work. This programme gave practical training on how to apply make-up, how to do one’s
hair, etc.
Customer Service A tailor made comprehensive programme to address the most important aspect for our 446
industry-the customer, and how to handle them in the best of class way
Soft Skills for Trainee This programme focuses on all trainees of the kitchen department. It contains a set of 24
Chefs soft skills that will be needed while working at action stations for chefs on skills, basic
cuts of vegetables and mother sauces, introduction to carving by Senior Kitchen Artist and
standards, certificates an good hygiene practices by the Compliance, Health and Safety
Manager. All trainees are evaluated through an exam at the conclusion
SOP Workshops for Workshops addressing the procedures of Cinnamon Hotels and Resorts in the relevant 55
F&B, Front Office and departments
Housekeeping
Cinnamonization This training was designed by the Management team to impart knowledge of the new band 569
and its offerings to all the associates of the Hotel
Cinnamon Drive This training was conducted for the chauffers of the Hotel so that they will understand the 106
new brand and its connection to chauffer functions
Project WAVE Project Wave was an initiative by JK Foundation that addressed the important elements of 767
women in the workplace
Sequence of Service A programme that addresses the customer path from the time they arrive at our property 66
till the time they depart, giving the trainee a detailed look at handling the customer better
In-house training Programme description Staff per

programme
Legal For Non Legal This programme take a look at the common legal practices within our industry and the 38
Associates correct manner to address them in a way beneficial to the customer and the business
Introduction to Basic The kitchen is one of the most important areas of the Hotel. This programme addrsses one 536
Food Hygiene of the most important aspects which is food hygiene, discussing the correct procedures to
be executed in the operations
Tea and Life As an important aspect of Sri Lankan culture, tea has taken a major role in our operations. 121
This programme discusses the aspects of tea service and the products and services that
are used at the Hotel
Essential Skills for A comprehensive training programme for the new managers that are promoted that looks 32
New Managers and at the essential skills required to do the new job role that has been entrusted to them
Supervisors
Giving Feedback in a A programme that is directed to for all leaders that focuses on the importance of feedback 57
Professional Manner with regards to performance and how to effectively provide feedback to their employees
Products and Services This programme is tailor-made for the sales team to better understand the products and 27
for Sales services that they are responsible for
Expert Talks Experts from all areas of the Hotel are identified and they discuss ‘keys to success’ with 67
the associates at the Hotel
Workshop on A programme that was tailor-made by NIBM for the manages of F&B to develop their 46
Supervisory management skill and take them to the next level of management
Management (NIBM)
Fast Track 15 A joint exposure programme that was done by John Keells and Cinnamon Grand that 7
introduced the hotel operations to a set of graduates that were looking to learn the
operations of a successful business model
The Recipe Training A complete training for the kitchen and F&B department staff on the recipes that are used 188
within the hotel, the preparation and perfect execution of by the subject experts
Cinnamon This programme is designed to train the staff of the Cinnamon Hotels and Resort 565
Competencies competencies so that they will understand what is expected of them to provide a superior
service to our costumers
Raising the Bar for A programme that was implemented to enhance the knowledge of F&B staff to understand 40
Beverage the beverage list served within the Hotel so that a better service can be provided for our
customers
Industry Trends for A tailor made programme that discusses the new trends in the industry in the field of F&B 17
F&B Managers and its implications to the operations at the hotel
E-mail etiquette This programme is tailor-made for the Hotel and is based on e-mail etiquette and how to 67
send professional emails
Silver Service for A training that was conducted for the banquet team on how to provide a star-class silver 6
Banquets service for any function
Menu Book Club This workshop is designed to discuss the menus and items therein to provide a better 12
understanding to the staff who use them on a daily basis
Raising the Bar for This is a programme developed to enhance the service skills of all Font Office staff to 15
Front Office provide the best in class customer service experience for our guests

Cinnamon Grand, having positioned

itself as an undisputed leader in the city
hospitality industry, the responsibility
of cascading knowledge remains
paramount in our focus, especially in
improving and uplifting knowledge
levels. This is primarily to encourage
young people into the hospitality
industry, positioning it as a rewarding
career option. Learning from the best
therefore also instills the importance of
best practices, standards and focus on
quality excellence, vital components
in building a knowledgeable and
professional human resource pool.
Cinnamon Grand continued its practice
therefore of sharing its prowess with
both young people and other industries Students from Ladies’ College watching a cookery demonstration by Cinnamon Grand chefs
that requested such sharing of
expertise.
Instilling Hospitality as a Career Attrition by Age (%)
BTEC Inauguration and Launch Option
In association with Ladies’ College 50 students following a degree in
Vocational Training Institute, Cinnamon Tourism and Events at Plymouth
Grand launched the Edexcel BTEC University UK through the National
Extended Diploma in Hospitality. The School of Business Management
curriculum includes the fundamentals (NSBM) and 20 from the William Angliss
of the hospitality industry, principles of Institute visited Cinnamon Grand on
supervising, leisure, travel and tourism, a learning and development exercise.
customer service and financial control Post a brief introduction of the hotel,
in hospitality. The Level 3 Extended the students were given in depth insight
Diploma combines the best of Edexcel’s into the key operational areas including Age 18-20 2%
Age 21-30 55%
academic and BTEC’s vocational observing backward integration
Age 31-40 32%
qualifications operations that are integral to the
Age 41-55 11%
smooth operations of the hotel.
Cookery Demonstration for

Customer Service Training for Total Employees Age Analysis
Students 0f Ladies’ College
Cinnamon Grand chefs guided 35 Department of Pensions Sri Lanka
No. of
students in the preparation and Showcasing that our customer service Employees
levels are recognised by the country 500
445
440
presentation of a three-course meal

434
398
which included vegetable and fruit as being par excellence, Cinnamon

355
400
337
carving. The training is a feature of Grand was invited to conduct a training

the school’s Annual Pumpkin Trophy programme on customer service to 40 300
Competition. This training was part of team members of the Department of 200
Cinnamon Grand’s contribution to the Pensions, Sri Lanka.
100
BTEC Extended Diploma in Hospitality.
20
14
5
Over 55 4
0
Age 18-20
Age 41-55
Age 21-30
Age 31-40
2014/15 2015/16
Sustainable Business
Product Responsibility
The ethos of excellence is interwoven
into the everyday working fabric of the
Company. It is an uncompromising
stance that reiterates our commitment
to be a responsible corporate entity, to
ensure that our actions and the impact
of our actions are always aligned to our
brand promise.
A sustainable business model is about

linking and balancing economic, social
and environmental aspects and the
impact it has on the bottom line of a
business. This ultimately must be a
Empowering SMEs – handicrafts produced by rural artists sold at Cinnamon Grand’s
sustainable one if it is to have a positive Nuga Gama Kadé
impact on stakeholders. At Cinnamon
Grand, this triad remains paramount in
every aspect of our business, which also With these certifications, besides a this platform, keenly promotes the use
means being cognizant of not only the range of audits, systems and processes of local suppliers whenever possible.
tangible quantifiable features, but also implemented, Cinnamon Grand The supplier portfolio includes micro
the intangible qualitative aspects of demonstrates its pledge to ensuring entrepreneurs and SMEs who may
our business. Product responsibility is that it delivers a product that is supply goods and services including
embedded into this philosophy. Coupled uncompromisingly responsible in all local fruit, vegetables, craft and
with our quest for excellence, Cinnamon aspects-from sourcing, to preparation other products, to large entities and
Grand has continually invested in raising and final delivery. The product is multinationals who have established
the bar in quality and standards to constructed on the vital components niche product portfolios. The entire
ensure that the product we offer our of economic, social and environmental process in the food value chain is
stakeholders is true to the values we consciousness. The very brand promise subject to stringent quality checks
espouse. is one of excellence and the hotel aligned, and most often, beyond
does not veer from the delivery of that the requirements of the standard
This dedication to excellence has promise. It is this unwavering need certifications.
also driven Cinnamon Grand to imbue for the highest quality therefore that
industry best practices which have now has emphasised the importance for While the list of standards, certifications
become the norm across the hospitality the compliance with international best and accolades that have been conferred
industry. It is the first hotel in Sri Lanka practices; thereby assuring the safety on the Company are detailed on page
to be certified with the three most and wellbeing of all guests, associates 21 of this report, given below are some
important standard certifications in and valued business partners and in a initiatives that have set Cinnamon Grand
the hospitality industry and the only larger sense, the community, industry apart from competition and enabled it to
hotel maintaining these certifications and environment. build a sustainable business model.
uninterrupted for nine years. The
hotel is certified for ISO 14001 for The importance of product responsibility Compliance+ Certification
Environmental Management Systems, extends to our entire value chain and is Cinnamon Grand was conferred the
OHSAS 18001 for Health & Safety relevant to procurement and sourcing Compliance+ Certification from the
Management Systems and ISO 22000 as well. Cinnamon Grand prides itself Employers’ Federation of Ceylon in
for Food Safety Management Systems. on being an indigenous brand and on recognition of the hotel’s commitment

to international business practices. are conducted by various foreign tour safety to ensure that OH&S in ingrained
Based on an independent third-party operators and this year, both Gullivers into the way of life at Cinnamon Grand.
audit conducted by the Federation, the Travels Associates (GTA) and Virgin
criteria for compliance was in equal Holidays conducted successful audits The Hotel has been recertified to the
opportunity, employer-employee on Cinnamon Grand. GTA is a world stringent requirements of OHSAS
relations, work arrangement practice leader in travel products and services 18001. OH&S is helmed by the
and the environment. The Hotel was to the fully independent travel industry Department of Compliance, Health
among ten recipients in the country to with over 50,000 suppliers across 180 and Safety, the apex body for health
receive this certification, an initiative countries. Virgin Holidays, founded and safety at Cinnamon Grand, which
supported by the International Labour by Sir Richard Branson is the largest oversees the other germane committees
Organisation (ILO). This certification and most successful transatlantic tour to ensure the bridging of all gaps in
underlines that Cinnamon Grand has operator and market leader for travel to this milieu. The Accident Committee
cultivated an empowered workplace the USA and the Caribbean. and the Evaluation and Prevention
for its associates thus ensuring that the Committee thus proactively support the
product delivered to our stakeholders Supplier Audits standards, principles and practices, of
reflects the empowerment for The Company adheres stringently to the Department to monitor, review and
excellence. standards and policies as laid down by report daily adherence measures.
those of the JKH Group as well as its
ISO 22000:2005 for Food Safety own. Valued business partners must The importance of cascading the
Management Systems conform to these guidelines which are principles of health and safety
Recertification communicated at the inception of their is constantly shared among our
Cinnamon Grand proudly wears the relationship with the Hotel. This also associates through targeted training
crown of being the first five-star hotel in means that all suppliers are subjected and awareness programmes. Our health
Sri Lanka to have been recertified with to periodic audits which enable both and safety emphasis goes beyond the
the standard certifications uninterrupted them and Cinnamon Grand to review fundamentals and into the philosophy of
for nine years consecutively. Having and evaluate any gaps and weaknesses ‘Safety First at all Times’, inculcating a
successfully passed the stringent as well as room for improvement. Non- mindset of identification and prevention
audits conducted by SGS Lanka, conformance penalties are detailed of any potential accidents, being
Cinnamon Grand demonstrates in the initial procurement agreement proactive in the face of an accident
uncompromising safety in its food signed by each supplier. 29 suppliers where the safety of fellow associates,
chain, being responsible for the safety were audited this year for compliance to guests and other stakeholders are
of all food products, compliance with standards. paramount and having the knowledge to
applicable statutory and regulatory food be reactive in the face of disaster.
safety requirements and effectively Occupational Health and Safety
communicating food safety issues with The health and safety of the Company’s All public spaces and walkways have
stakeholders in the food value chain, associates remains integral to our inbuilt security measures including
while conforming stringently to its Food stakeholder relationships. Our clearly demarcated areas for walkways
Safety Policy. commitment to Occupational Health and crossings, loading and unloading
and Safety standards (OH&S) has bays for suppliers, well accessible
Foreign Tour Operator Audits enabled us to foster a safe and healthy fire extinguishers, wheelchairs and
Being the country’s premier five- work environment, protecting not just other implements required to handle
star city hotel, Cinnamon Grand’s our associates but our stakeholders health and safety issues and kitchens
valued business relationships include who visit, stay and work within the which have stringent security features
international giants in the hospitality workplace. While the Hotel itself including in food safety handling.
and leisure industry, given the high-end conforms and upholds international best
clientele caliber it attracts. This also practices in OH&S embedding principles We also train our associates with added
means that the Hotel must conform to and practices that form the blueprint skills to handle emergency situations
stringent standards and guidelines set for a comprehensive Health & Safety that may arise, given that the Hotel
by these global bodies. Regular audits Policy, each associate is also equipped hosts Heads of State and other VVIPs,
with knowledge and skills in health and some of who require stringent security
measures which the Hotel has in place.

This includes training in handling VVIP
security and safety, measures to be
implemented in the face of emergencies
or security threats and handling times of
panic with calm and ease.
Fire Training
All Cinnamon Grand associates are
periodically trained in comprehensive
fire drills and training. This year,
928 associates underwent training
conducted by the hotel’s Security
Department. The training covered the
causes of fire, prevention, evacuation
and reaction to fire.

Seminar on Road Rules Manager Compliance Health & Safety Rajitha Amarasinghe conducting a health and safety training
200 associates participated in a seminar
on road rules conducted by Colombo
City Traffic Inspector of Police/Officer
in Charge-Law Enforcement Sri Sampath 2014/ 2015/
Perera. 2015 2016
Total no of man days for the period 325,512 322,872
Occupational Injuries
Total no of man days lost (TMDL) 199 68
The Company strives towards a ‘Zero
Lost Workday Case’ environment which TMDL as a % of total man days for the period 0.06% 0.02 %
has served in reducing the number of
occupational injuries over the years. Environmental Sustainability
Practicing a policy of prevention at To AHPPLC, responsible interaction with the environment defines long-term
all times, associates are encouraged sustainability, whereby ensuring long-term environment quality, we impact the
to take the initiative in preventing people of today positively without jeopardising the needs of future generations.
accidents, either by informing the We recognise that as a hospitality leader, we are tasked with the responsibility of
relevant Head of Department on duty or making certain that the resources we use must be utilised responsibly and whenever
taking immediate measures to prevent possible, prompt rejuvenation to sustain long term viability. The hospitality industry
the onset of an accident and thereby worldwide is now being encouraged to practice sustainable tourism; meeting its
injury. All associates are trained and are financial obligations and growing its business, while ensuring that both social and
encouraged to inform of any issues that environmental impacts are sustained with great advantage to future generations,
could cause an accident or injury. through to the long term.
We pride ourselves on being a safe and Cinnamon Grand achieved its Green Vision of being the ‘Best five-star sustainable
secure workplace given that we imbue a city hotel’ by its allotted year of 2015 with the implementation of the Building
culture of going beyond compliance in Management System (BMS) which also made the hotel the most intelligent building
OH&S. This year, we reduced the number in Sri Lanka. The visionary stance in reducing carbon footprint was well evidenced
of injuries among associates to six and not just for Sri Lanka but for the region, when it also became the first hotel in South
also saw a significant reduction of the Asia with a total Building Management Energy System, which has prompted best
total man day’s lost from 199 to 68. results in reducing carbon footprint by any hotel in the country. Cinnamon Grand’s

commitment to becoming the greenest ISO 14001 Environmental

hotel in the city also prompted it to Management Standard
pioneer some green initiatives in the Recertification
past which included making Nuga Gama Having been the first city hotel in Sri
Asia’s first Carbon Neutral Venue, the Lanka to be certified with this ISO
‘No Time to Waste’ e-waste awareness standard for the environment nine years
campaign in schools, the ‘Delicious ago, Cinnamon Grand continued to
Waste’ chef’s competition to minimise improve its green benchmarks by having
food waste based on the 3R cycle and its environmental responsibilities and
launching the Green Corridor. management systems recertified. This
certification has enabled the Hotel to
This commitment is further endorsed achieve the intended outcomes of its
with the Hotel constantly undergoing EMS. It also vouches that the Hotel
environmental audits and certifications, is consistent with its environmental
which also enables it to identify areas policies, has enhanced its environmental
for improvement. performance, has fulfilled its
Poster on water conservation displayed on the
compliance obligations and achieved its Sustainability Notice Board at Cinnamon Grand
The green journey at Cinnamon Grand environmental objectives.
is a holistic process where associates
are encouraged to inculcate a greener which we recognise and have been
Carbon Footprint
mindset and have converged on a single focusing on. Water conservation is a
Cinnamon Grand has been consistently
platform to make this green journey. holistic process at our hotel, not only in
reducing its carbon footprint since
encouraging our associates to conserve
directing its unwavering focus on
The Green Idea Box, explained earlier water, but also in encouraging our
good environmental practices. The
in the report is one such initiative guests to be conscious of the prudent
investment into green initiatives have
that encourages associates to share use of this scarce natural resource.
been immense (a prime example
thoughts and suggestions in making Cinnamon Grand is relentless in creating
being the noteworthy Rs. 170 million
Cinnamon Grand a greener hotel. awareness among stakeholders on
investment in the BMS), showcasing
Similarly, by celebrating events such water conservation and has employed
absolute commitment to its green goals.
as Earth Hour and World Environment numerous initiatives including those
By reducing the amount of greenhouse
Day with a series of interactive events, shared via the Green Idea Box by our
gases (GHGs) emitted by the hotel,
enabling associates, guests and valued associates, Grand Green Gestures via
which is usually expressed in equivalent
business partners to join in, Cinnamon in-room compendiums with its green
tons of carbon dioxide (CO2), the Hotel
Grand encourages the permeation of a page for our guests and encouraging
has continued to be a role model for the
greener mindset to a wider scope. valued business partners to join in the
industry, encouraging the hospitality
goals of better water management.
industry to follow suit and practice the
Cinnamon Grand focuses on four key
principles of sustainable tourism without
areas in its sustainability journey – The Hotel has also introduced various
compromise.
judicious use of energy, wise use of water saving measures into its facilities
water, astute waste management and and amenities this year, such as:
In 2014/15, the reduction of carbon
creating awareness to instill a green
footprint was measured at 3 per cent
consciousness. This has been well The reuse of shower water for the
and for this year. The Hotel has thus
entrenched with the global standards water cisterns in the Associates
reduced its carbon footprint by 2.35
that govern the Hotel’s environmental Lifestyle Complex
per cent this year, amounting to 256.8
outlook. Installation of a new water filtration
Co2MT tons of GHGs, a feat we are
system for the fish pond beside the
extremely proud of.
The Taprobane restaurant
Reuse of leftover drinking water and
Water Conservation
ice from the restaurants for the fish
The hospitality industry uses significant
pond adjacent to The Lagoon
amounts of water in its daily operations,

Energy conservation
Energy usage remains high in the
hospitality industry; another fact that
Cinnamon Grand has centered its
emphasis upon. Energy conservation
is even more significant given that
expenditure for electricity in Sri Lanka
is one of the highest in the region and
hence does impact our bottom line. The
investment of the BMS has certainly
brought in rapid rewards in energy
management, while also spurring
interest among our associates on seeing
the tangible results in the reduction
of energy usage. Through multiple
awareness channels, we also encourage
our guests and valued business partners
to practice better energy conservation The Cinnamon’s city hotels Marketing Communications team at the Banners to Bags (B2b) sale
practices.
Besides the advantages infused

in instilling a constant learning culture from regional and global counterparts in
through the BMS, Cinnamon Grand
prevalent waste management methodologies, Cinnamon Grand has employed
initiates and implements numerous
a number of waste management techniques including the 3R precept of Reuse,
energy conservation methods, some
Reduce, Recycle to make waste management a way of life in daily operations.
of which are ideas and suggestions
communicated by associates. One such
Given the very nature of our business, our main waste product is wet garbage
idea is the installation of LED and CFL
comprising food waste accounting for 85 per cent of total waste output. Plastic,
bulbs for Cinnamon Lifestyle Complex.
paper and glass bottle waste accounts for 6.6 per cent. Recycling initiatives include
e-waste being contracted to an accredited recycling company for disposal and CFL
The benefits that have permeated
bulbs given to the Orange Electric for recycling.
through all initiatives have reduced
electricity consumption by 2.43 per
Given below are tables that itemises the disposal method followed by the hotel,
cent for the year. This however is less
each of which conforms to international standards and guidelines, together with
in comparison to the saving of 4.32 per
comparisons of waste in kilograms.
cent experienced last year, primarily
due to the opening of new Lifestyle
Complex, which added a four story Electricity in KWH (‘000) Water in Units m3
building load to the total consumption.
Waste Management 17,000 310,000

Being Colombo’s largest five-star 300,000
property housing 501 rooms and 14 16,000 290,000
restaurants, waste management at 280,000

270,000
Cinnamon Grand is a challenge; but it 15,000
260,000
is a challenge that has been astutely 250,000
managed given the comprehensive 14,000 240,000
policies that have been instituted. Using 230,000
the guidance of the various international 13,000 220,000
12 13 14 15 16 12 13 14 15 16
standard certifications in place and

Waste type Method of disposal 2014/2015 2015/2016

Wet garbage Animal feed to piggery 793,862 760,399
Used oil in kitchen Used to fire the boiler 12,290 11,494
Plastic and polythene Recycled through CEA registered collectors 63,146 59,271
Hazardous waste Recycled through CEA registered collectors 1,577 617
Metal tins and cans Recycled through CEA registered collectors 4,588 3172
Landfill waste Collected by the Colombo Municipal Council 43,636 47,272
Banners to bags (B2b) corporate social responsibility

Cinnamon Grand’s unique initiative
of transforming non-biodegradable
flexi-banners into trendy bags for All CSR programmes implemented are aligned to key projects at Group level, in
multiple uses gained wider scope this collaboration with the John Keells Foundation.
year, with the process extending to the
During the year under review, the Foundation commenced “Project WAVE”
other two hotels under the Cinnamon’s
programme combating gender-based violence and child abuse through education and
city banner. The pioneering initiative
awareness creation with various vulnerable communities associated with the Group’s
embarked by Cinnamon Grand seven
business locations and the general public. AHPPLC was one of the main contributors
years ago gaining the endorsement of
of this project and spent over Rs. 26.8 million towards this worthy cause.
Nobel Co-laureate and Vice Chairman
of the Inter-governmental panel on
During the year under review, the Foundation also commenced conducting external
Climate Change Professor Mohan awareness on gender based violence in collaboration with Zonta Club III and the Bar
Munasinghe, has not only made it Association of Sri Lanka (BASL).
fashionable for Colombo’s hip and
cool to own a B2b bag, but has also John Keells Foundation believes in partnering like-minded organisations in furtherance
generated immense awareness on of its objectives and initiated ‘Stop the Violence Campaign’ in partnership with Sri
environmental degradation and Lanka Girl Guides Association (SLGGA) and a Community Policing Programme in
responsibility. partnership with The Asia Foundation (TAF).
This year, a total of 57 banners which The CSR teams of AHPPLC along with the Foundation continued its Neighbourhood
were used either by the hotel or by Schools Project supporting the development and maintenance of infrastructure and
suppliers were used to be transformed facilities of eight disadvantaged Government schools representing all communities
into 300 bags, which are manufactured and religions. This included Al Iqbal Muslim Balika Vidyalaya, Colombo 02, Holy
by retired tailors in the community, Rosary Sinhala Vidyalaya, Colombo 02, Holy Rosary Tamil Vidyalaya, Colombo 02,
adding the dimension of social Siri Sariputta Maha Vidyalaya, Colombo 02, T.B. Jayah Maha Vidyalaya, Colombo 02,
responsibility via income generation into Modara Sri Medhananda Vidyalaya, Colombo 15, Colombo Central Hindu College,
the equation. Colombo 13 and Al Hikma College, Colombo 12.
AHPPLC also supported the Foundation in various projects undertaken for the year
The total collection amounted to Rs.
such as:
161,500. These funds are used towards
English for Teens offering over 1,000 scholarships to students aged 12-14 years
the maintenance of the Children’s Ward
from disadvantaged government schools,
of the Maharagama Cancer Hospital.
‘Adopted villages’ in Mullaitivu where 30 youth were trained in English Language,
IT and career skills,
Reforestation programme where a total of 3,000 plants comprising a mix of forest
and fruit trees, distributed among 31 pieces of farmland have been planted across
15.3 acres since 2014,
Annual Career Guidance Programme where ten youth who are not eligible to
pursue Advanced Level studies were trained with relevant skills and knowledge to
successfully enter the workforce John Keells,
HIV and AIDS awareness campaign.
Corporate Social Responsibility

Cinnamon Grand
Inculcating a social consciousness
among our stakeholders is vital to us.
The Company has always maintained
that a sustainable business can only
be operated if the triple bottom line
is focused on unwaveringly; and this
means, ensuring that our communities
are constantly developed to spur better
lives and lifestyles. In creating wealth,
there is also an underlying responsibility
to distribute wealth, quantitatively or
qualitatively where communities are
uplifted, while in tandem advantages to
these communities are optimized due to
our presence in the community.
Students from Al-Asha College Trincomalee during the hotel visit
While remaining aligned to the JKH
policy of sustainability and CSR,
Cinnamon Grand has focused primarily
40 students from Keppetipola Maha Vidyalaya Gampaha and 60 students from Al-
on knowledge gaining, health and
Asha College Trincomalee were invited to visit Cinnamon Grand to experience the
wellbeing of young children, believing
quintessence of hospitality, both as a career option and as a learning experience.
strongly that it is they who will become
From visiting the key restaurants to enjoying the green surrounds of Nuga Gama,
future leaders and must be given the apt
a demonstration on vegetable and fruit carving as well as basic food preparation
foundation and support to achieve their
and table etiquette, the students were enthralled with the entire experience which
goals. Another facet is the development
included a five-star meal and tasting of home-made chocolates.
of local arts and crafts which Cinnamon
Grand promotes with great enthusiasm
Cinnamon Grand’s most enjoyable Christmas CSR initiative is the visit of the children
through the Nuga Gama Kadé, where
from Don Bosco Boys’ Home, a much looked forward to event by the 42 boys
products are sourced from local
resident in the home. A fun-filled day included time in the swimming pool, games,
craftsmen, who obtain an income for
quizzes and a range of fun-filled activities and post lunch, a magic show, face
their craft. Similarly, retired tailors from
painting, rides at Excel World. They complete their day with a Christmas party filled
the community gain an income for their
with music and dancing.
handiwork through the B2b sales.
During the year, dry rations and medicinal items was donated to The Dias Elder
The hotel continues its ongoing
Home. Discarded linen were also donated to Wijayaba Subasadana Samithiya,
initiatives including the Children’s Ward
Sisters of Charity Elders Home in Kegalle, Diyagala Boys Town Ragama, Next
at the Maharagama Cancer Hospital
Wattala and to the Inner Wheel Club of Colombo Nuwa Udana.
and the Neighbourhood School Project,
which is a collaborative project with the
Cinnamon Grand also sponsored The Memory Walk of the Alzhimer’s Foundation.
John Keells Foundation by identifying
disadvantaged schools in the vicinity
and developing infrastructure that will
cascade to having a better educational
milieu.

Corporate Social Responsibility

Cinnamon Lakeside
Corporate social responsibility is a way
of life at Cinnamon Lakeside and is
inextricably intertwined into the way we
do business. We believe strongly that the
sustainability of our business depends
on the sustainability of our community
and thereby the sustainability of our
nation. The economic and social impact
of our business must positively touch
our communities, who at the same time,
must see and feel those impacts, which
will change their lives for the better. The
formula we implement must be a win-
win for both our communities and our
business, and this we can only achieve if
we possess the unwavering commitment Donation of lunch packets to the Defense Services College by Rooms Division Manager Anton Peiris
of our associates. and Assistant F&B Manager Prabananthan Renganathan
It is our associates therefore that drive

our CSR philosophy of doing good. To us,
doing good is not simply philanthropy
but rather, impacting our communities
positively in the long term, where our
associates volunteer their time and
energy to engage with communities.
Employee volunteerism therefore plays
a significant part in career progression
and is also linked to productivity and
performance evaluation.
OUR YEAR AT A GLANCE
April
Dilmah Real High Tea Challenge

Winners
Our aspiring chef Soraya Dole who
was training in the pastry kitchen
and F&B Senior Captain Danushka
Sampath won gold at the Dilmah
Real High Tea Challenge for
their delicately crafted High Tea
experience and tea cocktails. They
were placed second in the overall
competition
Grand Inter Department Tag

Rugby Sixes
Cinnamon Grand’s debut Grand Inter
Department Tag Rugby Sixes was
held at the Thurstan College Grounds,
with 13 teams vying for the trophy.
Finance ‘A’ emerged champions after
the final clash with Finance ‘B’. Over
400 associates gathered to cheer
their colleagues
Project WAVE Training

Project WAVE (Working Against
Violence Through Education)
workshop, an initiative of John
Keells Foundation, addressed the
sensitive yet rising concerns in Sri
Lanka; gender based violence and
child abuse. Over 700 associate were
trained on this subject by external
trainers qualified in the area of
discussion

May
Vesak Celebrations
The hotel was illuminated with vibrant
colours during Vesak with the décor
conceptualised and designed by our
Engineering Department. Nuga Gama
also hosted the annual ‘saruwath
dansala’ for the sixth consecutive
year, serving over 1,600 persons
during the Vesak poya evening
BTEC Inauguration and Launch

Cinnamon Grand partnered with
Ladies College to launch the
Edexcel BTEC Extended Diploma in
Hospitality. Students opting for this
diploma will receive a solid grounding
on topics such as hospitality industry,
principles of supervising, leisure,
travel and tourism, customer service
and financial control in hospitality
Visit of Lord and Lady Mayor

Alderman Alan Yarrow
Rt Hon The Lord Mayor Alderman
Alan Yarrow and The Lady Mayoress
Alan Yarrow picked Cinnamon Grand
for their stay during their official visit
to Sri Lanka. They were welcomed by
Cinnamon Grand Resident Manager
Chris Quyn
OUR YEAR AT A GLANCE contd.
June
Banners to Bag (B2b) Sale

Banners to bags (B2b) was held for
the seventh consecutive year at
Cinnamon Grand Colombo. This year,
57 banners used by the Hotel as well
as those left behind after events were
transformed in to 135 bags, tailored
by retired tailors of the hotel
Planet Quiz
Cinnamon Grand won the
championship trophy at the debut
Cinnamon’s city hotels Planet Quiz,
organised in commemoration of
World Environment Day/Week.
Finance team won the property level
assessment of the quiz while F&B and
HR teams came in as first and second
runners up
Seminar on ‘Environment and

Biodiversity’
Environment Lawyer and Ecologist
Jagath Gunawardena educated
Cinnamon Grand associates on
‘Environment and Biodiversity’, as
part of a week-long Environment
Day commemoration at Cinnamon’s
city hotels. Over 100 associates
attended the seminar which focused
on endemic and endangered flora and
fauna in Sri Lanka

July
Visit of Nigel Barker

The international sensation
photographer, TV show host and
author, Nigel Barker along with his
family stayed at Cinnamon Grand
during his visit to Sri Lanka. He
was hosted at The London Grill for
dinner and he conducted a half-day
workshop for aspiring designers at
Oak Room
Big Win at Chefs Guild Culinary

Art 2015
Cinnamon Grand chefs and F&B
personnel proved their culinary
excellence at the Chefs Guild
Culinary Art 2015, bagging 48
medals, which included 15 gold, 13
silver and 20 bronze across various
categories
Customer Service Training for

Department of Pensions Sri
Lanka
Cinnamon Grand Learning and
Development Manager, Shashi
Jayawardena conducted a training
on customer service for 40 staff
members of the Department of
Pensions Sri Lanka
August
Sri Lanka Economic Summit 2015

The two-day Sri Lanka Economic
Summit 2015, organised by Ceylon
Chamber of Commerce took place
at Cinnamon Grand Oak Room. Over
450 business leaders and corporate
executives and professionals
attended the Summit. President
Maithripala Sirisena as well as
Premier Ranil Wickremesinghe were
speakers at the event
Let’s Learn Chinese Booklets

Under the Chinese Strategy, a ‘Let’s
Learn Chinese’ booklet containing
basic words and phrases in Mandarin
was developed by Cinnamon’s city
hotels Marketing Communications,
team and distributed to all
Cinnamon’s city hotels. A video to
help with the pronunciation was also
developed to assist training
JKH Inter Company Swimming

Championship 2015
Cinnamon Grand swim team
emerged Runners Up at the JKH Inter
Company Swimming Championship
2015 held at SSC swimming pool.
The 25-member team comprising
majorly of novice swimmers brought
home the Runners Up trophy in Men’s
Championship along with the overall
Runners Up trophy

September
New Entrance to Oak Room

Cinnamon Grand added a new entry
point for guests patronising the
hotel’s grand ballroom, Oak Room,
creating an exclusive roadway that
connects to Utharananda Road
(Nawam Mawatha) for easier access
Cinnamonization Video Wall

Under Cinnamonization rebranding
process which centres around
creating a lifestyle brand, an
inspirational video wall was erected
at the staff cafeteria to empower and
inspire associates
Associates Quarterly Meeting

Cinnamon Grand’s Associate
Quarterly Meeting for Q1 and
Q2 2015/2016 was held at the
Oak Room recognising dedicated
associates for their exemplary
performance in the first two quarters
of 2015
October
JKH Chairman’s Award for

Sustainability
Cinnamon Grand won the 2015 JKH
Chairman’s Award for Sustainability.
This is the second time the hotel
wins this award. The hotel was in
commendation and recognition for
its ongoing initiatives and consistent
overall sustainability performance
over the previous year
New Lifestyle Complex Open for

Associates
Cinnamon Grand opened a state-of-
the-art Lifestyle Complex offering
top notch facilities for the hotel’s
1,200 associates as part of an overall
capacity enhancement. This ‘Home
of the Trendsetters’ goes beyond
creating a conducive workplace
and offers space for creativity and
community
Visit of Matt Preston

Television personality and
MasterChef Australia judge Matt
Preston made a stop at Cinnamon
Grand for a dinner at The Lagoon
during his stay in Sri Lanka. He was
welcomed by Cinnamon Hotels &
Resorts Sector Head-City Hotels
Rohan Karr along with our chefs

November
Inter Departmental Cricket Sixes

Over 500 Cinnamon Grand associates
gathered at the BRC Grounds to see
28 teams, vying to take home the
championship trophies (men/women)
at the annual Inter Department
Cricket Sixes. Angsana Pain
Killers took home the Men’s Sixes
Championship Trophy while F&B
Avengers emerged Women’s Sixes
Champions
Associate’s Appreciation Week

In commemoration of Cinnamon
Grand’s 10th year anniversary, the
management declared an ‘Associates’
Appreciation Week’. As a part of the
week of activity, there were a number
of health checks, inspirational
speeches by popular personalities
and a bazzar with discounts on
equipment and essentials organised
Seminar on Road Rules

A seminar on road rules was
conducted by the security
department for Grand associates.
Colombo City Traffic Inspector
of Police/Officer in Charge-Law
Enforcement Sri Sampath Perera
conducted the session. Held at the
Oak Room, the seminar was attended
to by over 200 members of the staff
December
The Christmas Market

Cinnamon Grand’s debut ‘The
Christmas Market’ featured over 80
food items from around the world,
especially from Germany, Spain and
Italy. Made around a giant Christmas
tree, the market had a range of home-
made food items, preservatives,
freshly roasted nuts of all kinds,
meats and imported ingredients
Santa’s Workshop
Annual kids’ event, Santa’s Workshop
this year took the theme of ‘Kindness’
and encouraged kids to cultivate
this good habit through a Christmas
narrative by Vinod Senadeera and
team as well as a host of fun and easy
crafts. Over 200 children attended
this event held for the eighth
consecutive year
Visit by Don Bosco boys

42 boys from Don Bosco Boy’s
Home visited the hotel for their
annual Christmas treat. The boys
were entertained with a line-up of
activities, fun games and quizzes,
along with a visit to Excel World and
a Santa’s visit to distribute presents

January 2016
Visit of Marco Pierre White

‘Godfather of Modern Cooking’ Marco
Pierre White stayed at Cinnamon
Grand during his visit to Sri Lanka.
‘Marco’s Great British Gala Dinner’
and Afternoon Tea with MPW were
held at Grand’s Atrium and Courtyard.
White visited Nuga Gama as well as
The Lagoon which he noted as “my
favourite restaurant in the whole of
Sri Lanka”
British Food Week

Cheers Pub held a British Food Week
in association with the British High
Commission in Colombo, SriLankan
Airlines and Cinnamon Hotels &
Resorts. Over 17 specialty classic
British dishes were on offer, made
under Executive Chef Rob Kennedy
who flew down especially for this
event
Sequence of Service for F&B

Team
This workshop focused on the
complete journey a customer
goes through when he comes to a
restaurant. The trainees are first
introduced to the Critical Contact
Points of their restaurants and guided
through the steps of customer
interaction
February 2016
Grand Soccer 7’s

The annual interdepartmental
soccer championship ‘Grand Soccer
7’s’ saw F&B Avengers emerging
as the overall champs beating 16
departmental teams. F&B women’s
team won the female championship.
Over 500 associates was part of the
fun filled day of great sportsmanship
and comradery
Student Visit from National

School of Business Management
(NSBM)
50 students following a degree in
tourism and events at Plymouth
University UK through NSBM were at
Cinnamon Grand for a hotel tour. Our
L&D team gave the students a brief
introduction of the hotel and took
them around to see some of the key
operations
Customer Service: The First

Impression training
This workshop was conducted for
associates of all three city properties
to reitarate the importance of
customer service in a hospitality
environment and the fundamentals of
customer service is explained in detail

March 2016
Visit of Richard Quest

CNN’s foremost international
business correspondent and anchor
of ‘Quest Means Business’, Richard
Quest was welcomed by Cinnamon
Hotels and Resorts Sector Head-city
hotels Rohan Karr
Earth Hour
Cinnamon Grand celebrated the
global movement of Earth Hour by
switching off all non-essential lights
at the hotel and lighting soy candles
at the lobby, with the participation of
guests. Our village in the city, Nuga
Gama opted for a more traditional
commemoration
Student Visit from Monarch

Preschool
30 kids between the ages of three
to five years visited our village in
the city, Nuga Gama as part of
their Sinhala and Tamil New Year
celebrations. The visit was primarily
to give these kids a taste of local
culture
BOARD OF DIRECTORS
Susantha Ratnayake Ronnie Peiris Krishan Balendra
Chairman Director Director
Susantha Ratnayake was appointed as a Ronnie Peiris was appointed as a Krishan Balendra was appointed as a
Director of Asian Hotels and Properties Director of Asian Hotels and Properties Director of Asian Hotels and Properties
PLC in September 2003 and Chairman PLC in 2003. As the Group Finance PLC in April 2016. He is a President and
and CEO of John Keells Holdings PLC Director of John Keells Holdings PLC, Executive Committee member of John
in January 2006. He has served on the Mr. Peiris has overall responsibility for Keells Holdings PLC with responsibility
JKH Board since 1992/1993 and has 38 the Group’s Finance and Accounting, for the Leisure Group and John Keells
years of management experience, all of Taxation, Corporate Finance, Treasury Stock Brokers. He also serves as the
which is within the John Keells Group. and Information Technology functions. Chairman of Nations Trust Bank PLC
A past Chairman of Ceylon Chamber of He is also Director of several other and is the Hon. Consul General of the
Commerce and Sri Lanka Tea Board, he companies in the John Keells Group. He Republic of Poland in Sri Lanka. He is a
is also the Chairman of The Employers was previously the Managing Director former Chairman of the Colombo Stock
Federation of Ceylon. of Anglo American Corporation Limited Exchange. He started his professional
(Central Africa) in Zambia. career at UBS Warburg, Hong Kong, in
investment banking, focusing primarily
He has over 40 years of Finance and on equity capital markets. After a four
Ajit Gunewardene
General Management experience in Sri year stint in Hong Kong, he continued
Director
Lanka and abroad. He is a Fellow of the his career in corporate finance at Aitken
Ajit Gunewardene is the Deputy
Chartered Institute of Management Spence & Company PLC, Sri Lanka
Chairman of John Keells Holdings PLC
Accountants, UK, Association of prior to joining JKH. Krishan holds a
and has been a member of the Board for
Chartered Certified Accountants, UK, law degree (LLB) from the University of
over 21 years. He is a Director of several
and the Society of Certified Management London and an MBA from INSEAD.
companies in the John Keells Group
Accountants, Sri Lanka and holds an
and is the Chairman of Union Assurance
MBA from the University of Cape Town,
PLC. He is a member of the Board of
South Africa. A past Chairman of the
SLINTEC, a company established for the Cholmondeley Pinto
Sri Lanka Institute of Directors, he is
development of nanotechnology in Sri Director
currently a member of the committee of
Lanka under the auspices of the Ministry Cholmondeley Pinto was appointed as
the Ceylon Chamber of Commerce.
of Science and Technology. He is also a Non-Executive Director and as the
a member of the Tourism Advisory Chairman of the Board Audit Committee
Committee appointed by the Minister of Asian Hotels and Properties PLC
of Tourism Development, a member of in July 2011. He is a Fellow of the
the advisory committee for Investment Institute of Chartered Accountants
Promotion appointed by the Minister of of Sri Lanka with 40 years of post-
Development Strategy & International qualifying experience, in the profession
Trade and a member of the Steering and in industry. Before returning to Sri
Committee for establishment of the Lanka in 2006 after a spell of 32 years
National Science Centre in Sri Lanka abroad, he worked for SAB Miller PLC
appointed by the Minister of Science, for 23 years, the world’s second largest
Technology & Research. He has also multinational breweries group, holding
served as the Chairman of the Colombo CFO positions in its listed subsidiaries
Stock Exchange and Nations Trust Bank in several countries. He currently works
PLC. Ajit has a Degree in Economics and as a beverage industry consultant and is
brings over 33 years of management semi-retired. He is also a Non-Executive
experience. Director of Trans Asia Hotels PLC.

Shirani Jayasekara Prior to that he held several key Suresh Rajendra

Director positions in the Citibank group in Sri Director
Shirani Jayasekara was appointed as a Lanka and overseas. Senanayake holds Suresh Rajendra is the President of
Director in September 2009. She has a BSc degree in Electronic and Electrical the Property Group of John Keells
over 35 years of experience combining; Engineering from King’s College, Holdings PLC. He also serves as a
Finance, IT, Audit and Risk Management University of London and an MSc in Director in many companies of the John
in Sri Lanka, Zambia and Bahrain. She Communication Engineering from Keells Group. He has over 22 years of
has also been responsible for regional the Imperial College of Science and experience in the fields of finance, travel
audit assignments in Bangladesh Technology, University of London. He and tourism, and business development
with British American Tobacco and in is also a Director of Sampath Bank PLC acquired both in Sri Lanka and overseas.
Indonesia with Carsons Cumberbatch and Hemas Pharmaceuticals Ltd. Prior to joining the Group, he was the
PLC. Head of Commercial and Business
Development for NRMA Motoring
She has been selected to serve on Rohan Karunarajah and Services in Sydney, Australia and
various committees of the Institute of Director Director/General Manager of Aitken
Chartered Accountants of Sri Lanka such Rohan Karunarajah, Cinnamon Hotels Spence Hotel Managements (Pvt) Ltd,
as the Annual Report awards Committee and Resorts Sector Head-city hotels, Sri Lanka. Suresh is a Fellow of the
(Sustainability Reporting) and Audit currently overlooks the management Chartered Institute of Management
Committee of the Institute. She is also of the Cinnamon Grand, Cinnamon Accountants, UK.
an external Independent Director at LB Lakeside and Cinnamon red. A career
Finance. She is a Fellow of the Institute hotelier counting over three decades,
of Chartered Accountants of Sri Lanka both in the local and international
and a Fellow of the Chartered Institute hospitality industry; he held the position
of Management Accountants UK. of General Manager in several hotels
in the United Kingdom, lastly being the
Marriott Marble Arch, London. He is a
Sanjiva Senanayake Director of Asian Hotels and Properties
Director PLC and Trans Asia Hotels PLC. He
Sanjiva Senanayake joined the read for his Masters in Hospitality and
International Finance Corp (IFC) - the Business Studies from the Thames
World Bank’s private sector financing Valley University, London.
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 Senior Investment
Officer overseeing Financial Markets
Investments in 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.
RISK MANAGEMENT
Overview management calls for measures that all stakeholders. Enhancements
The constantly evolving economic ensure that risks are identified on time, were continuously made to the Risk
business environment and the evaluated in terms of risk appetite of the Management Framework throughout
challenging business operations Group, and that effective management 2015/16 based on the guiding principles
present a competitive industry setting and monitoring mechanisms are of the Enterprise Risk Management
covering local and global regulatory installed. (ERM) process recommended by the
requirements, exposing Asian Hotels John Keells Group Sustainability and
and Properties PLC to an array of The Board of Directors retains ultimate Enterprise Risk Management Division.
changing global and domestic socio- responsibility for ensuring the adequacy The Enterprise Risk Management cycle
economic factors. Our operations and effectiveness of the Group’s risk begins during the second quarter with
also have a direct and indirect management framework. The Audit an annual risk review by the John Keells
impact on the surrounding ecological Committee supports the Board in Group’s Enterprise Risk Management
environments and local communities. fulfilling these duties by providing division which assists heads of business
Risk Management has therefore always objective and independent reviews units and their respective Heads of
been a vital element in our responsible on risk identification and mitigation Departments to comprehensively
business ethic, while risk considerations processes, financial reporting, internal assess, rate and set mitigation plans for
form a critical input in our business control systems and compliance. any structural, operational, financial
decisions. We have continued to nurture The Company has recognised the and strategic risks relevant to each
an organisation-wide risk culture Risk Management Process as an company, based on past information
that aptly balances value creation essential component of the investment and horizon scanning.
for stakeholders with long-term management process to safe and high
sustainability of our capital inputs. The quality products, as well as to maintain
systematic approach required for risk sustainable business operations for
Risk Management Framework
ANALYSIS AND DEFINING MONITORING AND

IDENTIFICATION
MAPPING Measures COMMUNICATION

Risk Management Structure resources to effectively implement

the strategy are included in the capital
expenditure or operational expenditure
budget of the Company. Subsequent to
Audit
Committee
Board the resource planning, the Risk Owner
is responsible for the implementation
of the strategy within the agreed date
plan and to update the Committee
Hotel/Property Risk accordingly.
Management Team
The Company does understand that
in a dynamic environment, the risk
does not stay constant and continuous
monitoring of the environment and the
Business Impact assessed risks ensure that the Company
identifies and is able to stay abreast of
such changes proactively.
Insignificant
Ultra High
Likelihood of Occurrence
The Company follows a well-structured
risk reporting mechanism where the
risk grid is reviewed on a quarterly
Velocity basis by the Risk Committee. The team
Risk Grid signs off on a compliance statement
on a quarterly basis. The responsibility
of maintaining an effective system of
Risk Champions internal control and risk management
lies with The Board and the consolidated
financial and operational compliance
Risk Management Process report is received by the Audit
While individual Business units are the ultimate owner of its risks and are responsible Committee from the President of the
for reviewing their Risk Control Self-Assessment forms on a quarterly basis, Leisure Group. The Audit Committee
the annual Risk Management cycles discusses and identifies risks, impacts and has also included a risk review on
mitigation plans in conjunction with the JKH ERM division. Following the Group Risk the agenda of the Audit Committee
Review, the Company carries out quarterly risk reviews to identify risk events and Meeting; and the Audit Committee on
rank, and prioritise each risk by assigning a risk rating. This is rated by assessing the behalf of the Board reviews the risk
likelihood of occurrence [Probability] and the level of impact to the Company. The management process adopted by the
velocity of risk is also a factor when assessing risks in order to ascertain the speed Company.
at which risks would impact the Company. The product of the risk assessment are
tabulated in a risk grid that rates the risks on a scale of ‘Ultra High’ to ‘Insignificant’, The risk exposure and profile of the
which enables the company to prioritise the risks and plan out risk mitigation Company did not change significantly
strategies. The Management Committee of each business unit was apprised of the during the last year. A review of the
high level risks and core sustainability risks that emerged during the risk review key risks that could materially affect
process. Based on the score derived by each identified risk, the Committee decides Asian Hotels and Properties PLC along
on the appropriate risk response strategies which are categorised into three broad with control measures and action plans
areas– namely preventive, detective and corrective. Based on the field of expertise, implemented to mitigate them are set
risks are assigned to a Risk Owner who is responsible for the implementation and out on the next page.
reporting of the strategy. The Risk Owner is responsible for ensuring that all required
RISK MANAGEMENT contd.
Risk Category and Description Potential Impact Control Measures and Action Plans to Mitigate Risks
Strategic Risks
Business Risk Risk Rating – Medium
The performance of the Company Reduction in fair share T he Company closely monitors competitor activities
could be adversely affected due to of market and loss of and strategies. This process includes the reviewing
intense competition, unfavourable revenue of competitors’ market share and performance.
economic conditions and new entrants Where necessary, new strategies are formulated or
Adverse impact on existing strategies are revised to counter the actions
planned profitability of competitors
and cash flow 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 issues identified
Providing value for money by enhancing services,
improving service delivery and focusing on
consistent quality
Growing web-generated business
Brand Image and Reputation Risk Risk Rating - Low

The Company’s success depends on Decline in customer Although some factors are beyond its control, the group
the continued strength and recognition base, loss of market adopts the following approaches to mitigate this risk:
of the brand on a local and regional share, market Regular Brand Audits of the ’Cinnamon‘ brand are
basis penetration and ability to carried out
develop the business Both the Hotel Division and the Property Division
The ‘Cinnamon’ name is primary ensure that they secure the most sought after and
to its business as well as to the Inability to maintain qualified staff to hold high Managerial positions (in
implementation of its strategy for room rate differentiation different hierarchies)
expanding its businesses. This will and competitive advantage Continuous attention is focused on the environment
depend largely on the success of its and health and safety concerns by complying with
ability to provide high-quality products Erosion in confidence HACCP and other quality certifications
and services to all its clients may damage sustainability The brand of ’Cinnamon’ with emphasis on
of Group business 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

Uncertainty in Regulatory Risk Rating – Low
Environment Risk
Changes in legal and regulatory Potential exposure to C reating awareness about legal & statutory
framework requires significant changes litigation obligations at all levels
to operating process Internal auditors carrying out specific reviews
and checks to ensure that operations and services
remain in compliance with regulations
Tax/regulatory returns submitted by the company
being subjected to regular monitoring and scrutiny
by the Tax Division of the Leisure Group
The Legal Division of John Keells Group provides
guidance and direction to safeguard the company
against any losses or loss of reputation that could
arise from any legal consequences of transactions it
enters into
Operational Risks
Risks from Natural or Man-made Risk Rating – Low
Disasters Injuries to staff and D ocumented business continuity and disaster
Loss of property and equipment guests, damage to recovery plans are in place and appropriate signage
resulting in significant losses property and cost is in place
implication A process to communicate awareness of such
incidents is in place
Fire fighting systems, trained staff and procedures
are in place
Relevant insurance policies are in place and the
adequacy of such cover is subject to regular review
Human Resource Risk Risk Rating – Low
The Company’s human resources are Inability to maintain A s part of the performance appraisal process carried
the backbone of the business, holding quality standards and out in the Company, a clear vision has been set
the Company together. The growth meet guest expectations out on career development and succession plans,
of the Company is heavily dependent enabling the Company to retain its employees
on the talents and efforts of the Higher operational costs Regular training both locally and overseas is carried
highly skilled individuals that the and loss of business out in order to infuse motivation, commitment and
Company is able to attract and retain. empowerment among staff
The recruitment and retention of Adverse impact on the Recruitment of high calibre staff, effective induction
employees is a constant challenge company’s brand image 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
RISK MANAGEMENT contd.
Technology and Data Protection Risk Risk Rating – Low
Failure to keep pace with Adverse impact on R eservation, property management, material
developments in the technology efficiency of operations, management and financial information systems
sphere could impair our competitive guest satisfaction and loss were upgraded for greater alignment with business
position and operation of competitive advantage needs, making it easier to respond to change in
business strategy
Risk of cyber attacks Data theft 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
Supply Chain Risks Risk Rating – Low
Short supply of goods and raw material Cost overruns, reputational Alternate suppliers have been identified
resulting in disruptions to operations loss M aintain good business relationships with supply
chain, rotating contracts when economically
possible
Identification of local supplier base
Internal operational processes Risk Rating – Low
The risk of financial loss and disruption Disruption of C learly defined systems and procedures are in place
to the business due to breakdown in operations, loss of profits to ensure compliance with internal controls, which
internal controls and ineffective use of are monitored and reviewed for their continued
assets and resources efficiency and effectiveness
An outsourced internal audit firm reviews and
provides assurance on the adequacy of the Group’s
financial and operational systems on a quarterly
basis
Quarterly confirmation of compliance with financial,
operational and sustainability procedures and
requirements which include any incidence of fraud
A formal process is in place to review and monitor
all audit findings

Financial Risk
Liquidity and Credit Risk Risk Rating – Low
The economic instability, high inflation Reduced cash flow and Regular review mechanisms are in place to monitor the
rates, adverse foreign currency profitability performance of the Company against approved budget
fluctuations and the global monetary targets and achieve a balance between liquidity and
crisis could affect the Company in Probable penalty charges profitability
recovering the cash from clients of the and adverse credit terms
hotel and tenants of the mall for future business T he Company actively carries out trade debtor
balance reviews with review meetings held on a
Exposure and losses due to default of consistent and continuous basis
settlement by debtors Credit policy and stringent controls are in place to
mitigate the impact of default
Credit limits are reviewed on a regular basis
Capital investments are planned so as not adversely
impact on cash flows and gearing of the Company
Interest Rate Risk Risk Rating – Low

Drop in interest rates will lead to a Reduced income and T he Company has taken measures to maximise the
lower interest income as a result of profitability interest income with the assistance and guidance of
which, the Company would have an the JKH Group Treasury Department
impact on its Other Income Keeping abreast of global as well as local interest
rate activities
Foreign Exchange Risk Reduced revenue and Risk Rating – Low
profitability T ransacting revenue in strong currencies
Matching payments to collection of the same
currency
Continuous monitoring of the exchange rate and
updating the conversion rates according
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.
creating a palette of wonder

CORPORATE GOVERNANCE
Corporate Governance The Company has strived to maintain the highest levels of transparency when
Commentary reporting on both financial and non-financial information which has enabled it to
enhance the trust that stakeholders have in it.
Introduction
The Company holds itself accountable to the highest standards of Corporate
Over the years, Asian Hotels and
Governance and transparency that enhances the public’s access to information
Properties PLC (AHPL) has focussed
about our Company. Effective Corporate Governance in line with the highest
on developing a strong corporate
international standards is an important part of our identity. Our system of Corporate
governance foundation to complement
Governance lays the basis for responsible performance-oriented management and
its efforts in creating and maintaining
control which is geared towards sustainable value creation. Most importantly, our
a sustainable business model. This is
efforts go hand in hand with an unwavering commitment to the accurate, clear
in line with the John Keells Group’s
communication of our performance and the facts of our business.
corporate governance philosophy
which has been institutionalized at all
We are pleased to present this report which sets out the corporate governance
levels through a strong set of corporate
philosophy that is practiced by the Company. We are in compliance with the
values, a written code of conduct and
following statutes, rules and regulations and where necessary, any deviations
a proven performance management
permitted by same, have been duly explained.
and values monitoring systems. The
Board of Directors, Senior Management
Companies Act No. 7 of 2007
and employees of the Company are
– Mandatory compliance
expected to strictly adhere to the
The Continuing Listing Rules of the Colombo Stock Exchange (CSE)
precepts of this culture and follow them
– Mandatory compliance
in performing official duties, whilst
The Recommendations of the Code of Best Practice on Governance issued jointly
ensuring that the Group image remains
by the Securities and Exchange Commission of Sri Lanka (SEC) and the Institute
positive and pragmatic at all times.
of Chartered Accountants of Sri Lanka (ICASL) to the extent that they are
practicable
The governance framework is designed
– Voluntary compliance
taking into consideration the demands
placed by the aspects of conformance
and performance along with legislative
and regulatory requirements and best
practices of enterprise governance.
It consists of a governance structure,
regulation framework and assurance
and certification sources.
CORPORATE GOVERNANCE contd.
Corporate Governance System within a Sustainability Development Framework.
Internal Governance Structure Assurance Mechanisms Regulatory Benchmarks
People & Companies

Audit Nominations Board
Talent Act No. 07
Committee Committee Committees
Management of 2007
Chairman & the

Board of Directors Employees
Internal
Performance
Control
Human Related Party Governance
Resources & Transaction
Compensation Review
Committee Committee Listing Rules
JKH Code of of the CSE
Stakeholder Conduct
Management
President/ External
Sector Head Effective & Audit
Transparent
Management The Code of
Best Practices
on Corporate
Management Employee Governance
Team Participation issued jointly
IT by SEC &
Governance ICASL
Employee
Empowerment
Risk
Management

The Corporate Governance framework is Assurance Mechanisms functions respectively. Clear definitions
founded on the following principles: This comprises ‘bodies and mechanisms’ of authority limits, responsibilities and
which are employed in enabling regular accountabilities are set and agreed upon
(i) Allegiance to John Keells Holdings review of progress against objectives in advance to achieve greater operating
PLC (JKH) and the John Keells with a view to highlight deviations, quick efficiency, expediency, healthy debate
Group, and upholding of Group redress and in providing assurance and freedom of decision making.
values. that actual outcomes are in-line with
(ii) Compliance with the laws and expectations. Role of Chairman
Company Rules and Regulations The Chairman conducts Board Meetings
applying to the territories that the Regulatory Benchmarks and ensures that the participation and
John Keells Group operates in. This comprises regulations which contribution of Executive and Non-
(iii) Conduct of business in an ethical govern, in the main, all our corporate Executive Directors are encouraged
manner at all times, in line with activities from the Companies Act No. and their views on matters under
acceptable business practices. 07 of 2007 to Listing Rules of the CSE, consideration are determined. The
(iv) Exercise of professionalism and Rules of the SEC and the benchmarks Chairman maintains contact with all
integrity in all business and ‘public’ we have set for ourselves in working Directors and has informal discussions
personal transactions. towards local and global best practices. with the Non-Executive Directors as
(v) Ensure that no one person has necessary.
unfettered powers of decision What follows is a more detailed account,
making. including where relevant and applicable As Chairman, he is responsible for:
(vi) Opting for the early adoption of components of the Company’s Ensuring that the principles
accounting standards and best Corporate Governance System. and processes of the Board are
practices in governance regulation maintained, including the provision
when practical. Internal Governance Structure of accurate, timely and clear
(vii)Encourage proactive discussions The Internal Governance Structure information
with the relevant regulatory bodies encompasses; Encouraging debate and
to facilitate the implementation of The Board of Directors, constructive criticism
matters of governance and other Board Sub-committees, and Setting agendas for meetings of the
business reforms in Sri Lanka. Senior Management Committees Board, in conjunction with the Senior
(viii)Make business decisions and Managers and Group Company
resource allocations, in an efficient Strengthened and complemented Secretary, that focus on the
and timely manner, within a by internal policies, processes and strategic direction and performance
framework that ensures transparent procedures, the key components being: of our business
and ethical dealings which adhere Strategy formulation and decision Leading the Board and individual
to the laws of the country and making Director Performance assessments
the standards of governance that Human resource governance Speaking and acting for the Board
stakeholders expect from the Integrated risk management and representing the Board to
Company. IT governance and shareholders
Stakeholder management and Presenting shareholders’ views to
Internal Governance Structure effective communication the Board
This comprises a committees which Facilitating the relationship between
formulate, execute and monitor The components of the internal the Board and the Management
Company related strategies, initiatives, governance structure are designed in
processes and procedures which such a way that the executive authority The Board considers that none of the
support are weaved into the fabric of is well devolved and delegated through Chairman’s other commitments interfere
these committees, enabling them to a committee structure ensuring that the with the discharge of his responsibilities
perform their roles effectively. Presidents, Sector Head and the Senior to the Company. The Board is satisfied
Management Team are accountable for that he makes sufficient time available
the total Company functions and sub- to serve the Company effectively.
Chairman Appraisal the Company’s senior executives and its Non-Executive Non-Independent
The Human Resources and outside advisors and auditors. Directors (NED/NID), three Non-
Compensation Committee of the Executive Independent Directors
ultimate parent Company, John Composition of the Board and (NED/ID) and two Executive Non-
Keells Holdings PLC appraises the Directors’ Independence Independent Director (E/NID).
performance of the Chairman on an As at 31st March 2016, the Board
organisational and individual basis as consisted of 8 Directors comprising: Independence of the Directors have
approved by the Board. 2 Executive Directors (ED) been determined in accordance with the
3 Non-Executive Non-Independent Continuing Listing Rules of the CSE and
Board of Directors Directors (NED/NID) all three Independent, Non-Executive
The Board of Directors is the ultimate 3 Non-Executive Independent Board members have submitted signed
governing body of the Company. It is Directors (NED/ID) confirmations of their independence.
responsible for the ultimate supervision
of the Company. In all actions taken by Mr. K. N. J. Balendra was appointed to The Board members have a wide range
the Board, the Directors are expected the Board on 01st April 2016 as Non- of expertise as well as significant
to exercise their business judgment Executive, Non Independent Director. experience in diverse fields enabling
in what they reasonably believe to be them to discharge their governance
the best interests of the Company. In Therefore the Board now consists of duties in an effective manner.
discharging that obligation, Directors nine (9) Directors comprising of four
may rely on the honesty and integrity of
Name of Director/ Share Holding (1) Material Business Employee of Family Member a Continuous
Capacity Relationship (2) Company (3) Director or CEO (4) service for nine
years (5)
Non-Executive, Non-Independent Directors (NED/NID)
Mr. S.C. Ratnayake Yes No No No N/A
Mr. A.D. Gunewardene No No No No N/A
Mr. J.R.F. Peiris No No No No N/A
Mr. K. N. J. Balendra* No No No No N/A
Executive, Non-Independent Directors (ED/NID)
Mr. R.J. Karunarajah Yes No No No N/A
Mr. S. Rajendra No No No No N/A
Non-Executive, Independent Directors (NED/ID)
Mr. C.J.L. Pinto Yes No No No No
Mr. S.K.G. Senanayake No No No No No
Mrs. S.A. Jayasekara No No 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
* Appointed to the Board on 01st April 2016
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 All Non-Executive Directors are required F ormulating short and long
Board participate in defining goals, to notify the Chairman of changes in term strategies as a basis for the
vision, strategies and business targets. their outside Board appointments and operational plans of the Company
All Directors are able to and willingly the Chairman carries out a review of all Determining and recommending
add value and independent opinion on such appointments in consultation with interim and final dividends for the
the decision making process, which the other Directors where necessary approval of shareholders
is of immense benefit to the effective to ascertain any possible conflicts of Identifying the principal risks of the
functioning of the Board. The details interest. business and periodically reviewing
of the current Board of Directors along the risk management systems in
with a brief resume of each Director Board Responsibilities and Decision place
is found from page 60 and 61 of the Rights Preparation and presentation of
Report. At Asian Hotels and Properties PLC, financial statements, together with a
the businesses are conducted by its statement by the Auditors pertaining
Transactions or events that have a employees, managers and officers, to their reporting responsibilities
material bearing on the Company under the direction of the Executive
are disclosed by way of circulars to Directors and the oversight of the Delegation of Authority
shareholders, announcements to the Board, to enhance the long-term value The Board has delegated some of its
CSE and media/press releases. The of the Company for its shareholders. functions to the Audit Committee
Board is ready to answer questions while retaining the final right to accept
raised by shareholders at general The Board aims to fulfil its the recommendations made by the
meetings and maintains an appropriate responsibilities by creating value for Committee. The Audit Committee is
dialogue with them. all stakeholders that is sustainable chaired by an Independent Director
and beneficial. Stakeholders include appointed by the Board.
The presence of Independent Directors shareholders, employees, customers,
ensures the equal benefits of all the community and the environment. Conflicts of Interest and
shareholders with independent views Without limiting the Board’s function, its Independence
and opinions. Directors will update specific responsibilities include: Each Director holds continuous
the Board with any new information in responsibility to determine whether
relation to interests or relationships A pproving objectives, strategies and he or she has a potential or actual
relevant to independence. financial plans and monitoring the conflict of interest arising from external
Company’s performance against associations, interests or personal
The Board has developed a policy that these plans relationships in material matters which
it uses to determine the independence Monitoring compliance with the are considered by the Board from time
of its Directors. This determination is regulatory requirements and to time.
carried out annually or at any other ensuring all Company employees
time where the circumstances of a act with integrity and diligence in In order to mitigate any potential
Director change such as to warrant the interests of the Company and or actual conflict of interest or
reconsideration. stakeholders independence of Directors throughout
Reviewing and approving all the term of their membership on the
The Board is aware of the other significant policies and procedures Board, the Company has adopted the
commitments of its Directors and is Exercising objective judgment on all following processes:
satisfied that these do not conflict corporate matters independent from
with their duties as Directors of the the Executive Management
Company.
Prior to Once During

Appointment Appointed Board Meetings
Nominees are requested to Directors who are appointed are expected to Directors who have disclosed an interest in
disclose their various interests that inform the Board and obtain Board clearance a matter under discussion have,
could potentially conflict with prior to accepting any position or engaging Excused themselves from deliberations
the interest of the Company in any transaction that could create a on the subject matter
potential conflict of interest Refrained from voting on the subject
matter (such abstentions from Board
All NEDs are required to notify the Chairman decisions are duly recorded)
of changes in their current Board
representations
Details of companies in which Board B oard Sub-Committee reports and other matters exclusive to the Board
members hold Board or Board Status updates of major projects
Committee membership is available Review of performance– in summary and in detail, including high level
with the Company for inspection by commentary on actuals and outlook
shareholders on request. Approval of quarterly and annual financial statements
Ratification of capital expenditure and donations
Board Meetings, Agenda and Ratification of the use of the Company seal and share certificates issued
Attendance Ratification of Circular resolutions
For the financial year 2015/2016 there New resolutions
was a total of four (4) Board meetings. Any other business
During the meetings, the Chairman of
the Board appropriately allocated time The Board of Asian Hotels and Properties PLC met once every quarter and the
for Directors to carefully review and Directors’ attendance is shown in the table given below:
discuss all relative information. There
were also written minutes that were Attendance at Board Meetings
made available for verification and
approved by the Board. All Directors Name of Director 28-04- 28-07- 26-10- 27-01- Meetings
have access to Keells Consultants 2015 2015 2015 2016 Attended
[Private] Limited who act as Company Mr. S.C. Ratnayake √ √ √ √ 4/4
Secretaries for advice on relevant
Mr. A.D. Gunewardene √ √ √ √ 4/4
matters. The Chairman ensured that all
Board proceedings were conducted in a Mr. J.R.F. Peiris √ √ √ √ 4/4
proper manner, approving the agenda Mr. R.J. Karunarajah √ √ - √ 3/4
for each meeting prepared by the Board
Mr. S. Rajendra √ √ - √ 3/4
Secretary. The typical Board agenda in
2015/2016 was; Mr. C.J.L. Pinto - - √ √ 2/4
Mr. S.K.G. Senanayake √ √ √ √ 4/4
C onfirmation of previous minutes
Matters arising from the previous Mrs. S.A. Jayasekara √ √ √ √ 4/4
minutes Mr. K. N. J. Balendra was appointed to the Board in April 2016

Financial Guidance The scoring and open comments and oversight in areas where they have
The Board of Directors consists of were collated by the Independent greater expertise.
four senior qualified Accountants with Director, and the results were analysed
significant experience in the corporate to give the Board an indication of Of the four committees mentioned
sector, who possess the necessary its effectiveness as well as areas below, other than the Audit Committee
knowledge to offer the Board guidance that required addressing and/or and Nomination Committee, the Board
on matters of finance. These Directors strengthening. sub-committees of the ultimate Parent
add substantial value and independent Company, John Keells Holding PLC
judgment on the decision making of the Board Secretary (JKH), functions as the sub-committees
Board on matters concerning finance Keells Consultants (Private) Limited of the Company and its subsidiaries as
and investments. functions as the Secretaries and permitted by the listing rules of the CSE.
Registrars of the Company and provide
Timely Supply of Information the Secretarial input for the Board 1. Audit Committee
All Directors are fully briefed on proceedings in addition to maintaining 2. Nominations Committee
important developments in the various Board minutes and Board records. 3. Human Resources and
business activities of the Company. The Compensation Committee
Directors have access to; Tenure, Retirement and Re-Election 4. Related Party Transactions Review
of Directors Committee
E xternal and Internal Auditors As prescribed by the Company’s
Experts and other external Articles, one-third of the Directors of Audit Committee
professional advisory services the Company except the Chairman and
Senior Managers under a structured Managing Director retire by rotation. A Role of the Committee
arrangement Director retiring by rotation is eligible The role of the Audit Committee is to
Information as is necessary to carry for re-election. assist the Board in fulfilling its oversight
out their duties and responsibilities responsibilities for the integrity of
effectively and efficiently The tenure of office for Non- the Financial Statements of the
Periodic performance reports Independent Directors is limited by their Company, the internal control and risk
Information updates from prescribed Company retirement age. management systems of the Company
Management on topical matters, and its compliance with legal and
new regulations and best practices Independent Directors, on the other regulatory requirements, the External
as relevant to the Company’s hand, can be appointed to office for Auditors’ performance, qualifications
businesses three consecutive terms of three years, and independence, and the adequacy
The services of the Company which however, is subjected to the and performance of the Internal Audit
Secretary age limit set by statute at the time of function, which at the parent company
re-appointment following the end of a (JKH) is termed Group Business Process
Board evaluation term. Review Division (Group BPR). This is
The Board conducted its annual detailed in the terms of reference of the
Board performance appraisal for the The proposal for the re-appointment Committee which has been approved by
financial year 2015/16. This formalised of Directors is set out in the Directors the Board and is reviewed annually.
process of individual appraisal enabled Report as well as the Notice of Meeting
each member to self-appraise on an on page 158 of this Report. The effectiveness of the Committee is
anonymous basis, the performance of evaluated annually by each member
the Board under the areas of: Board Sub-Committees of the Committee and the results are
The Board has delegated some of its communicated to the Board.
R ole clarity and effective discharge functions to sub-committees, while
of responsibilities retaining final decision rights. Members
People mix and structures of these sub-committees are able to
Systems and procedures focus on their designated areas of
Quality of participation responsibility and impart knowledge
Board image
Composition of the Committee and A rrangements for protecting intellectual property and other non-physical assets
Meetings Overseeing the adequacy of the internal controls and allocation of
responsibilities for monitoring internal financial controls
The Audit Committee comprises of Policies, information systems and procedures for preparation and dissemination
three Independent Non-Executive of information to shareholders, stock exchanges and the financial community.
Directors. As prescribed in the Listing
Rules of CSE. The Chairman of the Audit Attendance at Board Audit Committee Meetings
Committee is a Fellow member of the
Name of Director 27-04- 27-07- 22-10- 25-01- Meetings
Institute of Chartered Accountants 2015 2015 2015 2016 Attended
of Sri Lanka with several years of
experience in financial auditing and Mr. C.J.L. Pinto √ √ √ √ 4/4
accounting. Mr. S.K.G. Senanayake √ √ √ √ 4/4
Mrs. S.A. Jayasekara √ - √ √ 3/4
Four (4) meetings were held during
the year. The Executive Directors and
Nominations Committee
Senior Management of Cinnamon
The Parent Company, John Keels Holdings PLC (JKH) functioned as the Nomination
Grand Colombo and Crescat Property
Committee of Asian Hotels and Properties PLC and its Subsidiary until Asian Hotels
Division attend the Audit Committee
and Properties PLC formed its Nominations Committee for the Company with effect
meetings by invitation. Further the
from the 01st December 2015.
representatives of the Internal Auditors
(Messrs. PricewaterhouseCoopers
The Nominations Committee is a sub- committee of the Board of Directors.
(Private) Limited), John Keells Group
The Committee is accountable to the Board of Directors, to whom it makes its
Business Process Review Division and
recommendations for approval. The Committee will undertake an annual self-review
the External Auditors Messrs. KPMG,
of its objectives and responsibilities. Such objectives and responsibilities will also
Chartered Accountants also attend the
be reviewed by the Board of Director and any other person the Board considers
Audit Committee meetings by invitation.
appropriate
The Audit Committee performs an
important monitoring function in the
The Nominations Committee of the Parent company (JKH) which functioned until 1st
overall governance of the Company.
December 2015 consisted of following 6 members;
Mr. T Das - Chairman
The Committee reviews the following;
Mr. E F G Amerasinghe
Procedures for identifying business
Mr. D A Cabraal
risks and controlling their financial
Mr. M A Omar
impact on the Group and the
Ms. M P Perera
operational effectiveness of the
Mr. S C Ratnayake
policies and procedures related to
risk and control
With effect from the 01st December 2015, the Nominations Committee of the
The appointment, remuneration,
Company comprised of two Independent Directors and one Non-Independent
qualifications, independence and
Director , namely:
performance of the External Auditor
and the integrity of the audit process
Mr. S.K.G. Senanayake - Chairman
as a whole
Mr. S.C. Ratnayake - (Non-Independent)
Budgeting and forecasting systems,
Mrs. S.A. Jayasekara
financial reporting systems and
controls
Procedures for ensuring compliance
with relevant regulatory and legal
requirements

Role and Purpose C onsider the making of any appointments or re-appointment to the Boards of its
The objectives of the Nominations subsidiaries;
Committee are: Provide advice and recommendations to the Board or the Chairman (as the case
To regularly review the skills may be) on any such appointment;
composition of the AHPL Board
against the current and emerging Operating Practices
needs and make recommendations A ny two Non-Executive Directors of whom one shall be independent, shall
to the Parent (JKH PLC) Nominations constitute a quorum and be competent to transact the affairs of the Committee
Committee regarding any changes The Committee may adopt such rules and regulations as it deems appropriate
to the status quo for the conduct of its affairs, provided that they are not inconsistent with this
To ratify the appointments made by Charter as approved by the Board. Meetings shall be summoned under the name
the Parent (JKH PLC) Nominations of the Chairman, or if he is incapacitated or unavailable, by any other Committee
Committee to the AHPL Board member
To define and establish a nomination The Committee shall meet when there is a perceived need to transact business
process of non-executives directors in terms of its mandate. Notwithstanding the same, the Committee should
to the Boards of its subsidiaries meet at least twice a year. “Telephonic” presence, and presence facilitated by
To make recommendations to the other technology, at a Committee meeting is considered equivalent to physical
Board in respect of all new Board presence
appointments (and re-election The Committee shall keep minutes of its proceedings and those minutes shall be
of those retiring in terms of the tabled at the next Board meeting
Articles) to its subsidiaries The Chairman of the Committee shall report to the Board, every quarter,
the discussions had and decisions taken. The tabling of the minutes of the
Scope Committee Meeting, where appropriate, will be sufficient compliance with this
R egularly review the structure, size, requirement
composition and competencies, The Chairman of the Committee will present an annual report to the Board of
including the skills, knowledge and Directors summarizing the Committee’s activities during the year and any related
experience), of the Board and make results and findings
recommendations to the Board with A member of the Nominations Committee should not participate in decisions
regard to any changes; relating to his/her own appointment
Ensure that on appointment to the
Board, directors receive a formal Nominations Committee attendance during the subject period was;
letter of appointment
Ensure that every appointee Until 1st December 2015
undergoes an induction to the
Name of Director 12-05-2015 Meeting Attended
organisation
Appointment of the chairperson Mr. T. Das √ 1/1
and Executive Directors shall be the Mr. E. F. G. Amerasinghe √ 1/1
collective decision of the Board.
Mr. D. A. Cabraal √ 1/1
The Committee is authorized by
the Board to seek appropriate Mr. M. A. Omar √ 1/1
professional advice from within and Ms. M. P. Perera √ 1/1
outside the Company as and when it
considers necessary Mr. S. C. Ratnayake √ 1/1
Assess the skills required by the
subject subsidiary Boards, given the With effect from 1st December 2015
current and emerging needs of the Name of Director 30-03-2016 Meeting Attended
business;
Mr. S. K. G. Senanayake √ 1/1
Mr. S. C. Ratnayake √ 1/1
Mrs. S. A. Jayasekara √ 1/1
Human Resources and April 2014. The Parent Company Level to fees paid to other NED/NIDs of
Compensation Committee Committee will act on behalf of the comparable companies. Director fees
As permitted by the Listing Rules of Company, as permitted by the Listing applicable to Non-Executive Directors
the CSE, the Human Resources and Rules of the Colombo Stock Exchange, nominated by JKH are paid directly to
Compensation Committee of JKH, with the intention of ensuring, on the Company and not to individuals.
the Parent Company of Asian Hotels behalf of the Board, that all related
and Properties PLC, functions as the party transactions of JKH and its listed Remuneration for Non-Executive,
Human Resources and Compensation subsidiaries are consistent with the Independent Directors
Committee of the Company and it’s Code of Best Practices on Related Party Compensation for Non-Executive,
Subsidiary. The Human Resources Transactions issued by the SEC. Independent Directors (NED/IDs)
and Compensation Committee of is determined by reference to fees
JKH comprise of five Non-Executive In very broad terms, the scope of this paid to other NED/IDs of comparable
Independent Directors. sub-committee is: companies. NED/IDs receive a fee for
devoting time and expertise for the
Mr. E.F.G. Amerasinghe - Chairman (i) Developing, and recommending for benefit of the Company. Nevertheless,
Dr. I. Coomaraswamy adoption by the Board of Directors NED/IDs fees are not time bound
Mr. M.A. Omar of JKH and its listed subsidiaries, a or defined by a maximum/minimum
Mr. A.N. Fonseka Related Party Transaction Policy number of hours committed to the
Mr. D.A. Cabraal consistent with that proposed by Group per annum and hence is not
the SEC and is in synchronisation subject to additional/lower fees for
The remuneration policy adopted by with the Operating Model and the additional/lower time devoted. NED/
the Company as recommended by the delegated Decision Rights of the IDs do not receive any performance/
Human Resources and Compensation Group. incentive payments.
Committee of its Parent Company,
JKH is formulated to attract and retain (ii) Updating the Board of Directors on The Company does not have an
high calibre executives and motivate the related party transaction of each employee share option scheme.
them to develop and implement the of the listed companies of the Group
business strategy in order to optimise on a quarterly basis. Total aggregate of Non-Executive
long-term shareholder value creation. Director Remuneration for the year was
The customised “pay for performance This committee of JKH comprises Rs. 5,400,000.
scheme” continues to apply for all four Non-Executive Independent
Company employees based on the Directors and two Non-Executive Remuneration for Executive and
pillars of individual performance and Non-Independent Directors. The Head Non-Independent Directors
organisational performance. The of Group Business Process Review The remuneration of the Executive
remuneration package for all employees will operate as the secretary to this Directors is determined as per the
at Assistant Manager level and above committee. remuneration principles of the
is based on organisational performance Group. The Human Resources and
and individual performance. However, Mr. A.N. Fonseka - Chairman Compensation Committee conducted
in respect of the Executive level and Mr. E.F.G. Amerasinghe a market survey of Executive Director
below, the employees scheme operates Mr. D.A. Cabraal remuneration with a view to assessing
purely on the basis of individual Mr. S.C. Ratnayake the appropriateness of compensation
performance. Ms. M.P. Perera with market benchmarks. Having
taken into account the complexities
Related Party Transactions Review Board Remuneration associated with the Group, it was
Committee established that the compensation is
As required by the SEC under its Code Remuneration for Non-Executive, in-line with the market.
of Best Practice for Listed Companies, Non-Independent Directors
the Related Party Transactions Review Compensation for Non-Executive The Executive Directors, like other
Committee was formed at the Parent Directors, Non-Independent Directors eligible employees, have received
Company level with effect from the 01st [NED/NIDs] is determined by reference employee shares option based on role

responsibility and actual performance. During the financial year under review There is a continuous process for
Accordingly the number of options following tasks were performed by the identifying, evaluating and managing
so awarded was recommended to Group Business Process Review Division the significant risks faced by the
the Board by Human Resources and and outsourced Internal Auditors to Company which has been in place
Compensation Committee. ensuring the existence of effective during the financial year and up to the
internal controls; date of approval of the Annual Report
Total aggregate Executive Director and Accounts. The Board regularly
Remuneration for the year was G roup-wide initiative to strengthen reviews this process.
Rs. 58,568,859. the existing Business Continuity
Plans (BCP) and Disaster Recovery Certain aspects of its business
Accountability and Assurance Plans (DRP). All Heads of operation may expose the Company
Department were encouraged to to both internal and external risks. The
System of Internal Controls re-visit their BCPs in confirming Company recognises the importance of
The Board has overall responsibility for that such plans were up-to-date controlling these risks and minimising
the system of internal control. A sound and relevant to the current working the possibility of any negative impact
system of internal control is designed to environment to the Company. The Company is using
manage rather than eliminate the risk of New methods of data analytics were the Business Risk Management (BRM)
failure to achieve business objectives. carried out using sophisticated tools process which is established by JKH to
The Company continues to stress on the where the entire data population was identify both financial and operational
importance of strong internal control analysed (as opposed to analysing risks. It endeavours to ensure the
throughout the organisation. Written a sample) in identifying exceptions control systems designed to safeguard
responsibilities, authority delegation and irregularities the Company’s assets and maintain
and management controls have been Implemented across the Group, proper accounting records that facilitate
adopted to create transparency for process improvements stemming the production and availability of
utilisation of the Company’s resources from the findings of internal audits reliable information are in place and are
and to distinguish the duties of staff The existing SAP SOX processes functioning as planned.
and controllers in order to ensure that were reviewed and updated to
proper verification and monitoring ensure compliance with Sarbanes Investment Appraisal Process and
processes are in place. Oxley Act of 2002 – Section 404 Investment Decisions
Strengthened the management Over the years, the Company has
The Company further maintains a reporting on internal controls to refined the process of investment
system of internal controls, which is facilitate better decision making. appraisal which ensures the involvement
designed to safeguard its assets from Carried out frequent surprise cash of the relevant persons when capital
identified risks, while ensuring that counts across the Group investment decisions are made. In
all transactions are duly authorised, this manner, several views, opinions
recorded and reported. Key systems and Risk Review and advices are obtained prior
rules relating to delegation of authority The Board is responsible for the to the investment decision being
are formalised and documented. formulation of the appropriate systems made. Experience has proven that a
of internal controls for the Group and holistic and well debated view of the
As a member of the John Keells ensuring its effectiveness. The Board is commercial viability and potential
Group, the Company is now part of a fully conscious that any internal control of proposed projects including
comprehensive planning and monitoring system contains inherent limitations operational, financial, funding, risk
process. The Annual Plans and Budgets and no system of internal control could and tax implications has most of the
are developed by the Company along provide absolute assurance against time culminated a good result. All
with a reforecast after six months. the occurrence of material errors, investment decisions are routed through
Strategic priorities and key drivers are poor judgment in decision making, a committee structure which safeguards
pre-identified and tracked on a monthly human errors, losses, fraud or other against one individual having unfettered
basis. irregularities. The Board has therefore decision making powers in such
taken appropriate action to minimise decisions.
such situations.
Operations, Planning, Monitoring emerging technologies and systems, Management Committee

and Decision Rights consistently investing in developing its The Hotel and Property divisions of
The responsibility for monitoring plans IT infrastructure. Continuous focus on Asian Hotels and Properties PLC have
has been entrusted to the Managing cutting-edge technology has ensured two separate Management Committees
Agents. The achievement of annual greater reliability of IT systems and has consisting of Sector Head of the City
plans as well as ensuring compliance shortened information delivery times to Hotel, President of the Property Division
with Group policies and guidelines both internal and external stakeholders. and other key managers of divisions in
rests with the President, Sector Head order to discuss matters pertaining to
/General Manager and functional The IT governance system, in particular, strategy and operations.
department heads of the respective was closely reviewed during the year
business units to whom appropriate towards ensuring the following: Strategic risks and opportunities
decision rights have been granted Leverage IT as a strategic asset arising from changes in our business
in order to execute operational and Ensure agility, in view of the fast environment are regularly reviewed by
financial decisions within their purview. changing technology the Group Management Committee
Establish the right balance between (GMC) of the Hotel and Property
Monitoring of Financial and business needs and IT enablement divisions at the meetings held monthly.
Ensure that all IT investments have The role of the GMC is to provide the
Operational Data
a quantifiable (or visible) business necessary guidance and direction to the
F inancial results and key operational
return Company on matters that are strategic
performance indicators are
Ensure a strong IT governance and and long-term in nature or have the
evaluated against the Annual
regulatory framework through a potential to significantly impact the
Plan and subsequent reforecast
coherent set of policies, processes division’s performance and reputation
on a monthly basis at all levels of
and adoption of best practices in and to make decisions on key business-
management.
line with world class organisations, wide policies, including operational
The Board reviews the financial
but always keeping in mind business policies, internal controls, the Human
results on a quarterly basis.
returns Resources Strategy and the Risk
The IT systems in place facilitate
Ensure that e-enabled platforms Management Policy.
the online display of information
are regularly reviewed for ‘internal
relevant to the needs of hotel
control effectiveness’ through Internal Auditors
managers and functional heads
SOX methodology of process flow Quarterly Audits are conducted by
pertinent to their areas of
analysis the Company’s Internal Auditors,
responsibility.
Messrs. PricewaterhouseCoopers
Human Resource Governance (Private) Limited, a firm of Chartered
Information Technology
(Performance Management) Accountants. The role of the internal
Governance
The Performance Management System audit team is to determine whether risk
The Company Information Technology
(PMS) continued to evolve positively in management, control and governance
(IT) Governance Policy has evolved in
catering to, and fashioning, employee processes are adequate and functioning.
line with the Group’s IT Governance
empowerment in meeting current and The Internal Audit function is
Policy in the last year to deliver and
emerging needs. independent of the External Auditor.
embrace new technologies which
have aligned with the overall business
Following linkages of PMS were further The reports arising out of such audits
objective of the Group. This evolution
strengthened: are, in the first instance, considered
occurred as the Company discerned
Learning and development and discussed at the business/
the competitive advantage gained
Career development functional unit levels and after review
and the enhancement of business
Succession planning by the respective President/CEO of
value which came about through the
Talent management the Company and the Subsidiary are
skillful alignment of IT with its business
Reward and recognition forwarded to the Audit Committee
objectives and the prudent management
Compensation and benefits on a regular basis. Further, the
of its IT resources. The Company has
Audit Committee also assesses the
always been a step ahead in embracing

effectiveness of the risk review process the financial year and comply with the Compliance with Legal
and systems of internal control on a requirements of the Companies Act No. Requirements
regular basis. Follow-ups on internal 07 of 2007. Compliance with legal requirements
audits are done on a structured basis. and Group-internal rules are significant
Information in the Financial Statements elements of Corporate Governance for
Relevant risks and vulnerabilities of the Annual Report are supplemented the management of Asian Hotels and
of the Company are identified and by a detailed ‘Management Discussion Properties PLC. The Board of Directors
promptly brought to the attention of the and Analysis’ from pages 11 to 47 which to the best of their knowledge and
Management, facilitating corrective and explains to shareholders the strategic, belief are satisfied that the Company
preventive measures to be taken in a operational, investment and risk related has not engaged in any activity which
timely manner. aspects of the Company that have contravenes laws and regulations and
translated into the reported financial all financial obligations due to the
Additionally, a technically strong performance and are likely to influence Government and to the employees have
Management Audit function aligned future results. been either duly paid or adequately
with the Company’s strategies adds provided for in the Financial Statements.
value in a variety of ways, including – The Statement of Directors’
Providing an independent opinion Responsibilities in relation to financial Securities Trading Policy
on the integrity, reliability and reporting is given on page 104 of the JKH’s securities trading policy prohibits
relevance of management Annual Report. The Directors’ interests all employees and agents engaged by
information in contracts of the Company are Asian Hotels and Properties PLC who
Assessing the adequacy of controls addressed on page 97 of the Annual are aware of unpublished price sensitive
over the protection of assets and Report. information from trading in Asian
management of liabilities Hotels and Properties PLC shares or
Reviewing compliance with The Directors have taken all reasonable the shares of other companies in which
corporate policies and external steps in ensuring the accuracy and the Company presently has business
regulations timeliness of published information and interests.
Reducing the risk of fraud in presenting an honest and balanced
assessment of results in the quarterly External Audit
Going Concern and Financial and annual Financial Statements. Messrs. KPMG serves as the external
Reporting Price sensitive information has been Auditors of the Company.
The Directors are satisfied that the disclosed to the Colombo Stock
Company has sufficient resources Exchange, shareholders and the press in The audit fees paid by the Company and
to continue in operation for the a timely manner and in keeping with the Group to Messrs. KPMG are separately
foreseeable future. In the unlikely event regulations. classified on page 122 in the Notes to
that the net assets of the Company fall the Financial Statements of the Annual
below a half of shareholders’ funds, Sri Lanka Financial Reporting Report.
shareholders would be notified and an Standards (SLFRS)
extraordinary resolution passed on the Living by the Company’s philosophy The Auditors’ report on the Financial
proposed way forward. of good governance and reporting, Statements of the Company for the year
the Financial Statements for year under review is found on page 105 of
The going concern principle has been 2015/16 have been prepared and the Annual Report.
adopted in preparing the Financial presented in accordance with Sri Lanka
Statements. All statutory and material Accounting Standards (SLFRS/LKAS) The Company has attempted always to
declarations are highlighted in the which have materially converged with separate the internal Auditors from the
Annual Report of the Board of Directors. the International Financial Reporting external Auditors in order to maintain
Financial Statements are prepared Standards (IFRS) as issued by the external Auditor independence.
in accordance with the Sri Lanka International Accounting Standards
Accounting Standards (SLAS), including Board (IASB). The appointment/re-appointment of
all the new standards introduced during these Auditors were recommended by
the Audit Committees to the Boards of
Directors.
Employee Participation in Assurance i. the decision and the

JKH Code of Conduct
The following meetings, interviews, recommendations
evaluations and surveys were conducted ii. action taken based on the
during the year: recommendations
Allegiance to the Company and
Skip Level meetings iii. where the Chairman-CEO the Group
Exit interviews or the Senior Independent
Young Forum meetings Director disagrees with any or
360 degree evaluation all of the findings and or the Compliance with rules and regulations
Great Place to Work survey recommendations thereon, the areas applying in the territories that the Group
operates in
Voice of Employee survey of disagreement and the reasons
therefore.
Whistleblower Policy Conduct all business in an ethical manner
at all times in keeping with acceptable
Through a communication link named In situation (iii) the Board is required businesses practices
‘Chairman Direct’, concerns about to consider the areas of disagreement
unethical behaviour and any violation and decide on the way forward.
Exercise of professionalism and integrity
of Group values could be reported by The Chairman-CEO or the Senior in all businesses and “public” personal
any employee of the Company to the Independent Director is expected to transactions
Chairman of JKH. Employees reporting take such steps as are necessary to
such incidents are guaranteed complete ensure that the complainant is not
confidentiality and such complaints are victimised, in any manner, for having The Chairman of the Board affirms
investigated and addressed via a select invoked this process. that there have not been any material
committee under the direction of the violations of any of the provisions of
Chairman. These open door policies facilitate the Code of Conduct. In the instances
constant dialogue, communication, where violations did take place, or were
Ombudsperson transparency and ultimately boost alleged to have taken place, they were
In order to deal with a situation in which employee confidence, which would help investigated and handled through the
an employee or group of employees retain existing talent whilst attracting Company’s established procedures.
feel that an alleged violation has not new.
been addressed satisfactorily using Shareholder Relations
the available/existing procedures and The Code of Conduct The Company shareholders exercise
processes, an Ombudsperson has been The written Code of Conduct to which their rights at the Annual General
appointed by JKH being the ultimate all employees at all levels and the Board Meeting. Each resolution brought before
Parent Company to entertain such of Directors are bound by, engraves the shareholders at the Annual General
concerns. the desired behaviour of JKH staff at Meeting is voted on separately by the
executive level and above. This is being shareholders.
The findings and the recommendations constantly and rigorously monitored.
of the Ombudsperson arising The objectives of the Code of Conduct The notice of the Annual General
subsequent to an independent inquiry were further affirmed by a strong set Meeting and the relevant documents
is confidentially communicated to of corporate values which were well required are published and sent to
the Chairman-CEO or to the Senior institutionalised at all levels within the shareholders within the statutory
Independent Director upon which the the Group and thus the Company periods. The Company circulates
involvement duty of the Ombudsperson through structured communication. The the agenda for the meeting and
ceases. degree of employee conformance with shareholders vote on each issue
corporate values and their degree of separately.
On matters referred to him by the adherence to the JKH Code of Conduct
Ombudsperson, the Chairman-CEO or were the key elements of reward and
the Senior Independent Director, as recognition schemes.
the case may be, will place before the
Board:

All shareholders are invited and Employees: The Company considers The Company’s approach to Corporate
encouraged to be present, actively its employees, valuable assets and Governance enables it to understand the
participate and vote at the Annual treats them fairly in regard to work expectations of stakeholders, forecast
General Meeting. The Annual General opportunities, remuneration and quality trends in social, environmental and
Meeting provides an opportunity of working environment. The Company ethical requirements and to manage
for Shareholders to seek and obtain also provides all its employees the Company’s performance in an
clarifications and information on the professional and career development appropriate manner.
performance of the Company and to training.
informally meet the Directors after the While the Board is satisfied with its level
Annual General Meeting. The External Society and Environment: The of compliance with the governance
Auditors and the Company’s lawyers Company is committed to conduct requirements, it recognises that
are invited too and are present at the businesses that benefits the economy, practices and procedures can always
Annual General Meeting to render any society and quality of environment. be improved, and there is merit
professional assistance that may be The Parent Company of Asian Hotels in continuously reviewing its own
requested. Shareholders who are not in and Properties PLC has established standards. The Board’s programme of
a position to attend the Annual General the Corporate Social Responsibility review will continue throughout the year
Meeting in person are entitled to have (CSR) Department to promote to ahead.
their voting rights exercised by a proxy the Company’s staff the importance
of their own choice. of the CSR objectives to achieve Regulatory Benchmarks
balanced benefits relating to society, The Board of Directors has taken all
Roles of Stakeholders the environment and all stakeholders reasonable steps to ensure that all
The Company realises the importance of in harmony with the Company’s Financial Statements are prepared
ensuring that all stakeholders’ rights are sustainable growth objectives. in accordance with the Sri Lanka
properly observed. Pertinent procedures Accounting Standards (SLFRS/LKAS)
are carried out in line with the rules and Major Transactions issued by ICASL and the requirements
regulations of the CSE, as well as the The Directors ensure that any corporate of the CSE and other applicable
related laws. transaction that would materially affect authorities.
the net asset base of the Company are
Shareholders: The Company is communicated to shareholders. There The Company and its subsidiary are
committed to create long-term growth were no major transactions as defined fully compliant with all the mandatory
and returns to the shareholders and to under Section 185 of the Companies Act rules and regulations stipulated by the
conduct its business in a transparent No. 07 of 2007 during the year under Corporate Governance Listing Rules
manner. review. published by the CSE and also by the
Companies Act No. 07 of 2007. The
Customers: The Company is committed Going Forward Group has also given due consideration
to continuously develop better quality The Board is committed to the highest to the Best Practice on Corporate
of goods and services for the benefit standards of Corporate Governance in Governance Reporting guidelines jointly
and satisfaction of its customers. order that the Company shall achieve set out by ICASL and the SEC and
its long term sustainable growth has voluntarily adopted the relevant
Partners: The Company treats all objectives. The Board is accountable provisions as far as is practicable.
partners fairly in order to achieve to the Company’s shareholders for
mutual benefits. good governance in its management of
the affairs of the Company. The Board
Creditors: The Company observes all of confirms that the Company was fully
its obligations to creditors. compliant throughout the year ended
31st March 2016 with all the principles
Competitors: The Company abides and provisions of the good Corporate
by the framework of fair competition Governance and the Code of Business
and will not destroy the reputation of Conduct and Ethics.
competitors through false accusations.
Statement of Compliance under Section 7.10 of the Rules of the Colombo Stock Exchange (CSE) on Corporate Governance
(Mandatory provisions – fully complied)
Compliant  Non Compliant 

CSE Rule Subject Compliance Requirement Compliance Applicable Section in
No. Status the Annual Report
7.10 Compliance T
he Group is in compliance with the Corporate  Corporate Governance
(a-c) Governance Rules and any deviations are
explained where applicable
7.10.1 Non-Executive T
wo or at least one-third of the total number  Corporate Governance
(a-c) Directors of Directors should be Non-Executive
Directors, whichever is higher
7.10.2(a) Independent T
wo or one-third of Non-Executive Directors,  Corporate Governance
Directors whichever is higher, should be independent
7.10.2(b) Independent E
ach Non-Executive Director should submit  Available with the
Directors a declaration of independence/Non- Secretaries for review
Independence in the prescribed format
7.10.3(a) Disclosure relating T he Board shall annually determine the  Corporate Governance
to Directors independence or otherwise of the Non-
Executive Directors
Names of the Independent Directors should 
be disclosed in the Annual Report
7.10.3(b) Disclosure relating T

he basis for the Board’s determination of  Corporate Governance
to Directors Independent Director, if criteria specified for
Independence is not met
7.10.3(c) Disclosure relating A
brief resumé of each Director should be  Board of Directors
to Directors included in the Annual Report and should (profile) section in the
include the Directors areas of expertise Annual Report
7.10.3(d) Disclosure relating P
rovide a brief resumé of new Directors  Corporate Governance
to Directors appointed to the Board with details specified
in 7.10.3(a), (b) and (c) to the Colombo Stock
Exchange
7.10.4 Criteria for defining R
equirements for meeting criteria to be  Corporate Governance
(a-h) Independence Independent
7.10.5 Human Resources A

listed Company shall have a Remuneration  Corporate Governance
and Compensation Committee. The Remuneration Committee of
Committee the listed Parent Company may function as
the Remuneration Committee
7.10.5(a) Composition of S
hall comprise of Non-Executive Directors, a  Corporate Governance
Human Resources majority of whom will be Independent
and Compensation
Committee


7.10.5.(b) Functions of T
he Human Resources and Compensation  Corporate Governance
Human Resources Committee shall recommend the
and Compensation remuneration of the Chief Executive Officer
Committee and Executive Directors
7.10.5.(c) Disclosure in the N

ames of Directors comprising the Human  Corporate Governance
Annual Report Resources and Compensation Committee and the Board of
relating to Human Statement of Remuneration Policy Directors Reports
Resources and Aggregated remuneration paid to Executive 
Compensation and Non-Executive Directors
Committee
7.10.6 Audit Committee The Company shall have an Audit Committee  Corporate Governance
7.10.6(a) Composition of S hall comprise of Non-Executive Directors a  Corporate Governance

Audit Committee majority of whom will be Independent and the Board of
A Non-Executive Director shall be appointed Directors Reports
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 
7.10.6(b) Audit Committee Overseeing of the

Functions Preparation, presentation and adequacy  Corporate Governance
of disclosures in the Financial Statements and the Board of
in accordance with Sri Lanka Accounting Directors Reports
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, re-appointment 
and removal of external auditors, and approve
the remuneration and terms of engagement
of the external auditor

7.10.6(c) Disclosure in N ames of Directors comprising the Audit  Corporate Governance
Annual Report Committee and the Audit
relating to Audit The Audit Committee shall make a  Committee Report
Committee 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 the manner
of compliance with their functions
Code of Best Practice of Corporate Governance Jointly Issued by the Securities and Exchange Commission of Sri Lanka (SEC)
and the Institute of Chartered Accountants of Sri Lanka (CA-Sri Lanka)
Compliant  Non Compliant 

Code Ref. Subject Applicable Requirement Status Compliance Applicable Section in
the Annual Report
A. Directors
A.1 The Board
A.1 The Board C
ompany to be headed by an effective Board  Corporate Governance
to direct and control the Company
A.1.1 Frequency of Board B
oard should meet regularly, at least once in  Corporate Governance/
Meetings every quarter Annual Report of the
Board of Directors
A.1.2 Responsibilities of F ormulation and implementation of strategy  Corporate Governance
the Board 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 
A.1.3 Access to P
rocedure to obtain independent professional  Corporate Governance
professional advice advice when deemed necessary
A.1.4 Company Secretary E nsure adherence to Board procedures and  Corporate Governance
applicable rules and regulations
Procedure for Directors to access services of 
Company Secretary
A.1.5 Independent D
irectors should exercise independent  Corporate Governance
Judgment judgment on issues of strategy, resources,
performance and standards of business
judgment


the Annual Report
A.1.6 Dedication of D
irectors should devote adequate time and  Corporate Governance
adequate time and effort to discharge their responsibilities to the
effort by Directors Company satisfactorily
A.1.7 Board and training D
irectors should receive appropriate  Corporate Governance
induction, training, hone skills and expand
knowledge to more effectively perform duties
A.2 Chairman and Chief Executive Officer
A.2.1 Justification for A
balance of power and authority to be  Corporate Governance
combining the roles maintained by separating responsibility for
of the Chairman conducting Board business from that of
and the CEO executive decision making
A.3 Chairman’s Role
A.3.1 Ensure good Chairman to preserve order and facilitate  Corporate Governance
corporate effective discharge of Board functions by
governance proper conduct of Board meetings
A.4 Financial Acumen
A.4.1 Possession of Board to ensure adequacy of financial  Corporate Governance
adequate financial acumen and knowledge within the Board
acumen
A.5 Board Balance
A.5.1 Composition of T
he Board should include a sufficient number  Corporate Governance
Board of Non-Executive Independent Directors
A.5.2 Proportion of Two or one-third of the Non-Executive  Corporate Governance
Independent Directors should be independent
Directors
A.5.3 Test of Independent Directors should be independent  Corporate Governance
Independence of management and free of any business
or other relationship that could materially
interfere with the exercise of unfettered and
independent judgment
A.5.4 Declaration of N
on-Executive Directors should submit  Corporate Governance/
Independence a signed and dated declaration of their Annual Report of the
independence/non-independence Board of Directors
A.5.5 Annual T
he Board should annually determine and  Corporate Governance
determination disclose the names of Directors deemed to be
of criteria of Independent
independence/non-
independence and
declaration of same
by Board

the Annual Report
A.5.6 Appointment of an I f an alternate Director is appointed by a Non- N/A
alternate Director Executive Director, such alternate Director
should not be an executive of the company
A.5.7 Appointment of If the roles of Chairman/CEO are combined, a N/A
Senior Independent Non-Executive Director should be appointed
Director (SID) as a Senior Independent Director
A.5.8 Availability of If warranted, the SID should be available N/A
Senior Independent to the other Directors for confidential
Director to other discussions
Directors
A.5.9 Interaction The Chairman should meet the Non-Executive  Corporate Governance
between Chairman Independent Directors at least once a year
and Non-Executive,
Independent
Directors
A.5.10 Directors concerns W
hen matters are not unanimously resolved, N/A
to be recorded Directors to ensure their concerns are
recorded in Board minutes
A.6 Supply of Information
A.6.1 Provision of Management to ensure the Board is provided  Corporate Governance
adequate with timely and appropriate information
information to
Board
A.6.2 Adequacy of notice Board minutes, agenda and papers should  Corporate Governance
and formal agenda be circulated at least seven days before the
to be discussed at Board meeting
Board meetings
A.7 Appointment to the Board
A.7 Appointments to F
ormal and transparent procedure for Board  Corporate Governance
the Board appointments
A.7.1 Nomination N
omination committee of the ultimate Parent  Corporate Governance
Committee Company may function as such for the
Company and make recommendations to the
Board on new Board appointments
A.7.2 Annual assessment N
omination committee of Board should  Corporate Governance
of Board annually assess the composition of Board
composition
A.7.3 Disclosure of Profiles of new Board appointments to be  Corporate Governance/
new Board communicated to Shareholders Notice of Meeting
appointments


the Annual Report
A.8 Re-election
A.8.1 Appointment of A
ppointment of Non-Executive Directors  Corporate Governance/
Non-Executive should be for specified terms and re-election Annual Report of the
Directors should not be automatic Board of Directors
A.8.2 Shareholders’ T
he appointment of all Directors should be  Corporate Governance/
approval of subject to election by Shareholders at the Annual Report of the
appointment of all first opportunity Board of Directors/
Directors Notice of Meeting
A.9 Appraisal of Board Performance
A.9.1 Annual appraisal of The Board should annually appraise  Corporate Governance
Board performance how effectively it has discharged its key
responsibilities
A.9.2 Self evaluation of T

he Board should evaluate its performance  Corporate Governance/
Board and Board and that of its committees annually Audit Committee Report
Committee
A.9.3 Declaration of basis T
he Board should disclose how performance  Corporate Governance
of performance evaluations have been carried out
evaluation
A.10 Disclosure of Information in respect of Directors
A.10.1 Biographical A
nnual Report should disclose the  Board of Directors
Profiles and biographical details of Directors and profiles section/
relevant details attendance at Board/Committee meetings Corporate Governance/
of Directors to be Audit Committee Report
disclosed
A.11 Appraisal of Chief Executive Officer
A.11.1 Short, medium and T
he Board should set out the short, medium  Corporate Governance
long term, financial and long-term financial and non-financial
and non-financial objectives at the commencement of each
objectives to be set year
A.11.2 Evaluation of CEO T
he performance of the CEO should be  Corporate Governance
performance evaluated by the Board at the end of the year
B. Directors Remuneration
B.1 Remuneration Procedure
B.1.1 Appointment of R
emuneration Committee of the ultimate  Corporate Governance
Remuneration Parent Company may function as such for
Committee the Company to make recommendations on
Director’s remuneration
B.1.2 Composition of R
emuneration Committee should consist  Corporate Governance
Remuneration exclusively of Non-Executive Directors
Committee

the Annual Report
B.1.3 Disclosure of T
he Annual Report should disclose the  Corporate Governance
members of Chairman and Directors who serve on the
Remuneration Remuneration Committee
Committee
B.1.4 Remuneration of B
oard to determine the level of remuneration  Corporate Governance
Non-Executive of Non-Executive Directors
Directors
B.1.5 Access to R
emuneration Committee should have access  Corporate Governance
professional advice to professional advice in order to determine
appropriate remuneration for Executive
Directors
B.2 Level and Make up of Remuneration
B.2.1 to Performance P ackages should be structured to attract,  Corporate Governance
B.2.4 related elements retain and motivate Executive Directors
in pay structure Packages should be comparable and relative 
and alignment to to that of other companies as well as the
industry practices 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.2.5 Share options E
xecutive share options should not be offered  Corporate Governance
at a discount
B.2.6 to Remuneration S
hould reflect time, commitment and  Corporate Governance
B.2.9 packages for Non- responsibilities of role and in line with existing
Executive Directors market practice
B.3 Disclosure of Remuneration
B.3.1 Disclosure The Annual Report should disclose the  Financial Statements
of details of remuneration paid to Directors
remuneration
C. Relations with Shareholders
C.1 Constructive Use and Conduct of Annual General Meeting
C.1.1 Proxy votes to be T
he Company should count and indicate the  Corporate Governance
counted level of proxies lodged for and against in
respect of each resolution
C.1.2 Separate Separate resolutions should be proposed for  Corporate Governance/
resolutions substantially separate issues Notice of Meeting
C.1.3 Availability of T
he Chairman of Board Committee should be  Corporate Governance
Chairman's of available to answer any queries at AGM
Committees at
AGM


the Annual Report
C.1.4 Notice of AGM 1
5 working days notice to be given to  Notice of Meeting
shareholders
C.1.5 Procedure for C
ompany to circulate the procedure for  Notice of Meeting
voting at meetings voting with Notice of Meeting
C.2 Communication with Shareholders
C.2.1 Chanel of Channel to reach all shareholders to  Corporate Governance
Communication disseminate timely information
C.2.2 – Policy and P
olicy and Methodology of communication  Corporate Governance
C.2.7 Methodology of with shareholders and implementation
Communication
C.3 Major and Material Transactions
C.3.1 Disclosure of Major D
isclosure for all material facts involving all  Notes to the Financial
Transactions material transactions including related party Statements
transactions
D. Accountability and Audit
D.1 Financial Reporting
D.1.1 Presentation of S
hould be balanced, understandable and  Corporate Governance/
Public Reports comply with statutory and regulatory Risk Management/
requirements Financial Statements
D.1.2 Directors’ Report The Directors’ Report should be included in the
Annual Report and confirm that , Annual Report of the
The Company has not contravened laws or  Board of Directors
regulations in conducting its activities Audit Committee Report
Material interests in contracts have been 
declared by Directors Annual Report of the
The Company has endeavoured to ensure  Board of Directors
equitable treatment of shareholders Corporate Governance
That there is reasonable assurance of 
the effectiveness of the existing business Audit Committee
systems following a review of the internal Report/Risk
controls covering financial, operational and Management
compliance
That the business is a “going concern”  Annual Report of the
Board of Directors
D.1.3 Respective T
he Annual Report should contain separate  Respective
responsibilities statements setting out the responsibilities responsibilities of the
of Directors and of the Directors for the preparation and Directors and Auditors
Auditors presentation of the Financial Statements and
the reporting responsibilities of the Auditors
D.1.4 Management A
nnual report to include section on  Management Discussion
Discussion and Management Discussion and Analysis
Analysis

the Annual Report
D.1.5 Going Concern D
irectors to substantiate and report that  Annual Report of the
the business is a going concern or qualify Board of Directors
accordingly
D.1.6 Serious Loss of D
irectors to summon an Extraordinary N/A
Capital General Meeting in the event that the net
assets of the Company falls below 50% of the
value of Shareholders Funds
D.1.7 Related Party Disclosure of Related Party Transactions  Notes to the Financial
Transactions Statements
D.2 Internal Control
D.2.1 Effectiveness of D
irectors to annually conduct a review of  Audit Committee
system of internal the effectiveness of the system of internal Report/Risk
controls controls. This responsibility may be delegated Management
to the Audit Committee
D.2.2 Internal Audit T
he internal audit function in Group  Corporate Governance
Function companies is not outsourced to the external
auditor of that company in a further attempt
to ensure external auditor independence
D.2.3- Continuity of M
aintaining a sound system of internal  Corporate Governance
D.2.4 Internal control control
D.3 Audit Committee
D.3.1 Chairman and S hould comprise a minimum of two  Audit Committee Report
Composition of independent, Non-Executive Directors
Audit Committee Audit Committee Chairman should be 
appointed by the Board
D.3.2 Duties of Audit Should include Corporate Governance
Committee Review of scope and results of audit and its 
effectiveness
Independence and objectivity of the Auditors 
D.3.3 Terms of Reference The Audit Committee should have a written  Corporate Governance
/ Charter Terms of Reference which define the
purpose of the Committee and its duties and
responsibilities
D.3.4 Disclosure T he Annual Report should disclose the names  Corporate Governance/
of Directors serving on the Audit Committee Audit Committee Report
The Audit Committee should determine the
independence of the Auditors and disclose  Corporate Governance
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 Audit Committee
period to which the report relates


the Annual Report
D.4 Code of Business Conduct and Ethics
D.4.1 Adoption of T
he Company must adopt a Code of Business  Corporate Governance
Code of Business Conduct and Ethics for Directors and
Conduct and Ethics members of the senior management team and
promptly disclose any violation of the Code
D.4.2 Chairman’s T
he Annual Report must include an  Chairman’s Statement/
affirmation affirmation by the Chairman that he is not Director’s Report
aware of any violation of the provision of the
Code of Conduct
D.5 Corporate Governance Disclosures
D.5.1 Corporate T
he Annual Report should include a report  Corporate Governance
Governance Report setting out the manner and extent to which
the Company has adopted the principals and
provisions of the Code of Best Practice on
Corporate Governance
E. Institutional Investors
E.1 Structured Dialogue
E.1.1 Structured A
regular and structured dialogue should  Corporate Governance
Dialogue with be conducted with shareholders and the
Shareholders outcome of such dialogue should be
communicated to the Board by the Chairman
E.2 Evaluation of I nstitutional investors should be encouraged  Corporate Governance
Governance to consider the relevant factors drawn to their
Disclosure by attention with regard to Board structure and
Institutional composition
Investors
F. Other Investors
F.1 Individual I ndividual shareholders should be  Corporate Governance
Investors encouraged to carry out adequate analysis
and seek professional advice when making
their investment/divestment decisions
F.2 Shareholder Voting I ndividual shareholders should be  Corporate Governance/
encouraged to participate in General Form of Proxy
Meetings of companies and exercise their
voting rights.
G. Sustainability Reporting
G.1-G.1.7 Sustainability Disclosure on adherence to sustainability  Annual Report-
Reporting principles Management Discussion
Annual Report of the Board of Directors
The Board of Directors have pleasure Report. These reports, together with the audited Financial Statements, reflect the
in presenting the 22nd Annual Report state of affairs of the Company and the Group Segment-wise contribution to Group
of your Company together with the revenue, results, assets and liabilities are provided in Note 37 to the Financial
Audited Financial Statements of Statements.
Asian Hotels and Properties PLC, and
the audited Consolidated Financial Revenue
Statements of the Group for the year Revenue generated by the Company amounted to Rs. 5,583 million (Rs. 5,294
ended 31st March 2016. million in 2015), whilst Group revenue amounted to Rs. 8,067 million (Rs. 8,080
million in 2015).Contribution to Group revenue, from the different business
Principal Activities segments are provided in Note 37 to the Financial Statements.
The Company is engaged in Hoteliering
and Property Development/ Results and Appropriations
Management. Trans Asia Hotels PLC The Profit After Tax of the Company was Rs. 1,876 million (Rs. 1,807 million in
(the owner and operator of Cinnamon 2015) whilst the Group profit attributable to the equity holders of the Parent
Lakeside Hotel) is a subsidiary of the Company for the year was Rs. 1,841 million (Rs. 1,757 million in 2015). A detailed
Company and its principal activity is description of the Group results and appropriations are given below.
Hoteliering. There has been no material
2015/16 2014/15
change in the activities of the Company
Rs. ‘000 Rs.‘000
or of the subsidiary during the period
under review. Net Profit for the year after providing for expenses 2,231,460 2,350,653
including depreciation on Property, Plant and
Review of Business and Future Equipment was:
Developments From which Income Tax has been deducted of: (208,789) (263,196)
The financial and operational
Leaving thereafter a Net Profit After Tax of: 2,022,671 2,087,457
performance, during the year ended
31st March 2016 and future business The amount attributable to Minority Interest which (181,538) (330,828)
development of the Company and has been deducted is:
Group, is provided in the Chairman’s Leaving a Profit Available to the Group of: 1,841,133 1,756,629
Statement, the Management Discussion
The Brought Forward Profit is: 7,883,065 7,880,070
and Analysis in this Annual Report.
These reports, which form an integral Transferred to Revenue Reserve of: 10,911 17,358
part of Annual Report of the Board of Other Comprehensive Income: (10,428) 109
Directors, together with the Audited
Charge relating to Super Gain Tax (149,487) -
Financial Statements, reflect the state
of affairs of the Company and Group. Final Dividend paid: (1,328,326) (1,328,326)
Interim Dividend paid: (1,106,938) (442,775)
Financial Statements and Auditors’
Leaving an un-appropriated balance to be Carried 7,139,930 7,883,065
Report
Forward of:
The Financial Statements, duly signed
* In accordance with the LKAS 10, Events after the reporting period, the final
by the Directors, is provided from pages
dividend has not been recognised as a liability in the Financial Statements.
106 to 152 and the Auditors’ Report on
the Financial Statements is provided on
Accounting Policies
page 105 of this Annual Report.
The Financial Statements, which comprise the Income Statement, Statement of
Comprehensive Income, Statement of Financial Position, Statement of Changes
Segment Reporting
in Equity and the Statement of Cash Flow, together with the accounting policies
A review of the financial and operational
and notes (‘The Financial Statements’) have been prepared in accordance with Sri
and future business development of
Lanka Accounting Standards (SLFRS/LKAS) as issued by the Institute of Chartered
the Group and its business units are
Accountants of Sri Lanka (ICASL) and the requirement of the Companies Act No.
described in the management discussion
7 of 2007. The changes to accounting policies have been applied consistently to
and analysis section of the Annual

all financial periods presented in these Capital expenditure for the Company and Group amounted to Rs. 548 million (2015
Financial Statements, unless otherwise – Rs. 838 million) and Rs. 1,136 million (2015 – Rs. 1,010 million) respectively.
indicated. The accounting policies
adopted in preparation of the Financial Total Freehold Land available − Asian Hotels and Properties PLC A8. R00. P05.08
Statements are given from pages 112 to Total Leasehold Land available − Trans Asia Hotels PLC A05. R02. P34.28.
120 of this Report.
Details of Land and Buildings with net book values including details of Property,
Dividends Plant and Equipment of the Group and their movements are given in Note 14 to the
An Interim Dividend of Rs. 1/- per share Financial Statements on page 125.
for the year ended 31st March 2015,
amounting to Rs. 442 million was paid Market Value of Properties
on 31st March 2015. A Final Dividend All buildings owned by the Company were last revalued as at 31st March 2015.
of Rs. 3/- per share for the financial Valuation was carried out by M/s P.B. Kalugalagedara and Associates, Chartered
year ended 31st March 2015, was paid Valuation Surveyor.
during the current financial year on 19th
June 2015 to those shareholders in the All properties classified as investment property were also revalued as at 31st March
register as of 10th June 2015, resulting 2016 in accordance with the requirements of LKAS 40. This valuation too was carried
in a total cash pay out amounting to Rs. out by M/s P.B. Kalugalagedara and Associates.
1,328 million.
Details of property valuations, including the valuation methods are provided in Note
An Interim Dividend of Rs. 2.50 per 14.3 to the Financial Statement on page 128 of this report.
share for the year ended 31st March
2016, amounting to Rs. 1,107 million Investment Properties
was paid on 31st March 2016. 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
The Board of Directors has declared a have been classified as Investment Properties. The details of Investment Properties
Final Dividend of Rs. 2.00/- per share are explained in Note 16 to the Financial Statements on page 129.
for the financial year ended 31st March
2016. The Final Dividend will be paid on Investment in Subsidiary
13th June 2016 to those shareholders
on the register as at 3rd June 2016. Company No. of Shares % Holding
Trans Asia Hotels PLC (Quoted) 86,823,028 43.41

As required by Section 56 (2) of the
Companies Act No. 7 of 2007, the Board Stated Capital
of Directors has confirmed that the The Stated Capital of the Company as at 31st March 2016 is Rs. 3,345 million (2015
Company satisfies the Solvency Test – Rs.3,345 million) comprising of 442,775,300 Ordinary Shares.
in accordance with Section 57 of the
Companies Act No. 7 of 2007 and has
Share Information
obtained a certificate from the Auditors,
The market value of an Ordinary Share of the Company as at 31st March 2016 was
prior to declaring the above dividends.
Rs. 47.80 (31st March 2015 – Rs. 63.00).
Property, Plant and Equipment The distribution and composition of shareholders and the information relating to
The book value of Property, Plant and earnings, dividend, net assets, and market value per share is given in the Share
Equipment as at the balance sheet date Information and Five (5) Year Financial Review section of the Annual Report.
amounted to Rs. 17,516 million (2015
– Rs. 17,285 million) and Rs. 21,291 The Company has made every endeavour to ensure the equitable treatment of
million (2015 – Rs. 20,704 million) for all shareholders and has adopted adequate measures to prevent information
the Company and Group respectively. asymmetry.
Annual Report of the Board of Directors contd.
Major Shareholders Executive Independent Directors Responsibility of the Board

Details of the twenty largest (NED/ID) and two Executive Non- Details of responsibilities of the
shareholders of the Company and Independent Director (E/NID). Board and the manner in which those
the percentage shareholding held by responsibilities were discharged during
the public are disclosed in the Share In accordance with the criteria for the year are disclosed in the Corporate
Information section of the Annual ‘Independence’ specified by section Governance section of the Annual
Report from page 154 and 155. 7.10.4 of the listing rules of the Report.
Colombo Stock Exchange and as
Reserves identified by the Code of Best Practice, Board Committees
Total reserves as at 31st March 2016 for the Board affirms that the aforesaid four Board Audit Committee
the Company and Group amounted to Non-Executive Independent Directors The following members serve on the
Rs. 18,148 million (2015 – Rs. 18,753 satisfy the criteria for independence Board Audit Committee
million) and Rs. 19,964 million (2015 – and have satisfied the requirements
Rs. 20,692 million), respectively. under clause 7.10.2 (b) Mr. C.J. L. Pinto - Chairman
Mr. S.K.G. Senanayake
The movements and composition of the Mr. S K G Senanayake and Mrs. S A Mrs. S.A. Jayasekara
Capital Reserves and Revenue Reserves Jayasekara retire by rotation in terms of
during the year are disclosed in the Article 84 of the Articles of Association The Report of the Audit Committee
Statement of Changes in Equity. of the Company and being eligible for is given on page 102 and 103 of this
re-election are recommended by the Report.
Directors Board for re-election. Brief profiles
The Board of Directors of the Company of Mr. S K G Senanayake and Mrs. S A Nominations Committee
as at 31st March 2016 and brief profiles Jayasekara are found on page 61. The Nominations Committee of the
of each Director are given in the Board Company which was formed with effect
of Directors section of the Annual Mr. K N J Balendra retires in terms of the from 01st December 2015.
Report. Article 91 of the Article of Association
of the Company and being eligible is The Nominations Committee comprises
The Directors of the Company who held recommended by the Board for re- two Independent Directors and one Non
office during the year under review are election. A brief profile of Mr. K N J Independent Director as at 31st March
set out below. Balendra is contained in section/page 2016:
60 Mr. S.K.G. Senanayake - Chairman
Mr. S.C. Ratnayake - Chairman Mr. S.C. Ratnayake (Non-Independent)
Mr. A.D. Gunewardene The Directors of Trans Asia Hotels PLC Mrs. S.A. Jayasekara
Mr. J. R. F. Peiris [Subsidiary] who held office during the
Mr. R.J. Karunarajah year under review are set out below: The Report of the Nominations
Mr. S. Rajendra Committee is given in the Corporate
Mr. C.J.L. Pinto Mr. S.C. Ratnayake - Chairman Governance section of the Annual
Mr. S.K.G. Senanayake Mr. A.D. Gunewardene Report.
Mrs. S.A. Jayasekara Mr. J.R.F. Peiris
Mr. N.L. Gooneratne
Human Resources and
Mr. K. N. J. Balendra was appointed to Mr. C.J.L. Pinto
Compensation Committee
the Board on 01st April 2016 as Non- Mr. E.H. Wijenaike
As permitted by the listing rules of
Executive, Non Independent Director. Mrs. J.C. Ponniah
the Colombo Stock Exchange, the
Mr. R.J. Karunarajah
Human Resources and Compensation
Therefore the Board now consists of Committee of the Parent Company,
nine (9) Directors comprising of four Mr. K. N. J. Balendra was appointed to
John Keells Holdings PLC (JKH),
Non-Executive Non-Independent the Board of Trans Asia Hotels PLC with
functions as the Human Resources
Directors (NED/NID), three Non- effect from 01st April 2016
and Compensation Committee of the
Company.

The following members serve on the made in the Interests Register of the As recommended by the Human
Human Resources and Compensation Subsidiary which is a Public Limited Resource and Compensation Committee
Committee: Company. of John Keells Holdings PLC the holding
company of Asian Hotels & Properties
Mr. E.F.G. Amerasinghe - Chairman Directors’ Interests in Contracts PLC in keeping with the John Keells
Dr. I. Coomaraswamy The Directors of the Company have group remuneration policy.
Mr. M.A. Omar made general declarations as required
Mr. A. N. Fonseka by Section 192 (2) of the Companies 2. Ms. S A Jayasekera’s and Mr. S
Mr. D.A. Cabraal Act No. 7 of 2007 and no additional K G Senanayke’s contracts as
interests have been disclosed by any Non- Executive Directors of Asian
The Report of the Human Resources Director. Hotels and Properties PLC were
and Compensation Committee and renewed for a further period at
the remuneration policy is given in the Directors’ Remuneration Non-Executive Directors fees
Corporate Governance section of the Directors’ remuneration is established approved by the Human Resources
Annual Report. within a framework approved by the and Compensation Committee
Human Resources and Compensation of John Keells Holdings PLC, the
Related Party Transactions Review Committee. The Directors are of the holding company, which fees are
Committee opinion that the framework assures commensurate with the market
The Related Party Transactions Review appropriateness of remuneration and complexities of the Company
Committee of the Parent Company John fairness for the Company.
Keells Holdings PLC (JKH) functions as 3. Mr. Krishan Niraj Jayasekara
the Related Party Transactions Review Details of the remuneration and other Balendra was appointed as a Non-
Committee of the Company which was benefits received by the Directors of the Executive Director of Asian Hotels
formed with effect from 01st April 2014. Company and the Group are set out in and Properties PLC from 01st April
Note 10 of the Financial Statements. 2016 at the standard Non-Executive
The Related Party Transactions Review fees approved by the Board for
Committee comprises four Independent Indemnities and Remuneration Non-Executive Directors which fees
Directors and two Non Independent are commensurate with the market
Directors as at 31st March 2016: 1. The Board approved the payment complexities of the Company
to Messrs. R J Karunarajah and S
Mr. A. N. Fonseka - Chairman Rajendra, Executive Directors of The fees payable to Non-Executive
Mr. E.F.G. Amerasinghe Asian Hotels & Properties PLC, a nominee Directors of John Keells
Mr. D.A. Cabraal remuneration comprising of: Holdings PLC are paid to John Keells
Ms. P. Perera Holding PLC and not to individual
Mr. S.C. Ratnayake A n increment from 1st July Directors.
2015 based on the individual
The Related Party Transactions Review performance rating obtained by Particulars of Entries in the
Committee is given in the Corporate the Executive Directors in terms Interests Register of the Subsidiary
Governance section of the Annual of the performance management Trans Asia Hotels PLC.
Report. system of the John Keells Group;
A short term variable incentive There have been no changes to the
Interests Register based on individual performance, remuneration of the Directors of Trans
The Company has maintained an organisation performance and Asia Hotels PLC for the financial year
Interests Register as contemplated by role responsibility based on ended 31st March 2016.
the Companies Act No. 7 of 2007. In the results of the financial year
compliance with the requirements of 2014/2015; and Further to the appointment of Mr.
the Companies Act No. 7 of 2007, this Long Term Incentive Plan in Krishan Niraj Jayasekara Balendra as a
Annual Report also contains particulars the form of an Employee Share Non-Executive Director of Trans Asia
of entries made in the Interests Register Options at John Keells Holdings Hotels PLC with effect from 01st April
as well as the particulars of the entries PLC 2016.
Directors’ Shareholdings Corporate Governance

The shares held by Directors’ and their spouses in the Company as at 31st March Directors’ Declarations
2016 are as follows;
The Directors declare that;
a) The Company has complied with all
Director Shareholding as at Shareholding as at
31.03.2016 31.03.2015 applicable laws and regulations in
conducting its business
Mr. S.C. Ratnayake 20,000 20,000
Mr. A.D. Gunewardene NIL NIL b) The Directors have declared all
material interests in contracts
Mr. J.R.F. Peiris NIL NIL
involving the Company and refrained
Mr. R.J. Karunarajah 200 200 from voting on matters in which they
Mr. S. Rajendra NIL NIL were materially interested
Mr. S.K.G. Senanayake NIL NIL

c) The Company has made all
Mrs. S.A. Jayasekara NIL NIL endeavours to ensure the equitable
Mr. C.J.L. Pinto (Joint account 7,800 7,800 treatment of shareholders
with Mrs. M.R.C. Pinto)
d) The business is a going concern
Employee Share Option Plan (ESOP) with supporting assumptions or
Employees of the Company receive remuneration in the form of share-based qualification as necessary
payment under the John Keells Group’s Employees Share Option Scheme (ESOP),
share options of the parent are granted to senior executives of the company, e) Have conducted a review of
whereby employees render services as consideration for equity instruments (equity- internal controls covering financial,
settled transactions). The cost of the employee services received in respect of the operational and compliance controls
shares or share options granted is recognised in the Income Statement over the and risk management and have
period that employees provide services, from the time when the award is granted up obtained a reasonable assurances of
to the vesting date of the options. The overall cost of the award is calculated using their effectiveness and successful
the number of share options expected to vest and the fair value of the options at the adherence herewith
date of grant.
f) The Company being listed on the
The employee remuneration expense resulting from the Group’s share option Colombo Stock Exchange (CSE)
scheme to the employees of Asian Hotels and Properties PLC is recognised in the is compliant with the rules on
income statement of the Company. This transaction does not result in a cash outflow Corporate Governance under the
to the Company and expense recognised is met with a corresponding equity reserve Listing Rules of the CSE with regard
increase, thus having no impact on the Statement of Financial Position (SOFP). to the composition of the Board and
The fair value of the share options is estimated at the grant date using a binomial its Sub-Committees
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 g) The Company is in compliance
price, expected time to maturity, exercise price, expected volatility of share price, with the Code of Best Practice on
expected dividend yield and risk free interest rate. 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 with suppliers and endeavours to The details of the Risk Report and Risk
Governance practices and principles pay for all items properly charged in Management Process are set out from
with respect to the management and accordance with these agreed terms. As pages 62 to 67 of this Report.
operations of the Company are set out at 31st March 2016, the trade and other
from pages 69 to 93 of this Report. payables of the Company and Group Internal Control
amounted to Rs. 453 million The Board, through the involvement
Sustainability (2015 – Rs. 434 million) and Rs. 768 of the Group Business Process Review
The Company is conscious of the need million (2015 – Rs. 682 million), (Group BPR) Division, takes steps to
to preserve the environment and its respectively. gain assurance on the effectiveness
natural resources and has taken specific of control systems in place. The Audit
steps, particularly in ensuring the Environmental Protection Committee receives regular reports
conservation of its natural resources The Company is in compliance with on the adequacy and effectiveness
and environment as well as addressing the relevant environmental laws, of internal controls in the Company.
material issues highlighted by its regulations and endeavours to comply These include compliance with laws,
stakeholders. Every endeavour has been with best practices applicable in the regulations and established policies and
made to minimise adverse effects on country. A summary of selected Group procedures of the Company.
the environment to ensure sustainable activities in the above area is contained
continuity of natural resources. The in the Management Discussion and The Head of Group BPR Division has
Company’s sustainable practices are Analysis. The Company has not engaged direct access to the Chairman of the
detailed from pages 24 to 47. in any activity that is harmful to the Audit Committee. Reports of the
environment. outsourced Internal Auditors are also
Employment reviewed by the Committee on matters
The Company has an equal opportunity Statutory Payments pertaining to the Company.
policy in respect of employment and The Directors confirm that to the best
these principles are enshrined in specific of their knowledge, all taxes, duties The Directors acknowledge their
selection, training, development and and levies payable by the Company responsibility for the Company’s
promotion policies, ensuring that all and its Subsidiary, all contributions, systems of internal controls. The
decisions are based on merit. The levies and taxes payable on behalf of, statements of Corporate Governance
Company, in line with the Group policy, and in respect of the employees of the from pages 69 to 93 sets out in detail
practices equality of opportunity for Company and its Subsidiary, and all the Company’s system of internal
all employees irrespective of ethnic other known statutory dues that were controls.
origin, religion, political opinion, gender, due and payable by the Company and
marital status or physical disability. its Subsidiary as at the Balance Sheet Related Party Transactions
date have been paid or, where relevant There were no related party transactions
The number of persons employed by the provided for, except as specified in Note required to be disclosed under the
Company and Group as at 31st March 38 to the Financial Statements, covering Listing Rules of the CSE other than as
2016 was 1,224 (1,230 in 2015) and Contingent Liabilities. disclosed under Note 34 to the Financial
2,005 (2,078 in 2015), respectively. Statements.
Enterprise Risk Management
There have been no material issues The Board confirms that there is Donations
pertaining to employees and industrial an ongoing process of identifying, Total donations made by the Company
relations of the Company and the Group evaluating and managing any significant during the year amounted to Rs. 23.56
during the Financial Year. risks faced by the Company, where million and donations made by the
annual risk reviews are carried out Group amounted to Rs. 27.67 million
Supplier Policy by the Enterprise Risk Management (31st March 2015 – Company Rs. 16.09
The Company, in line with the Group’s Division and the risks are further million/Group Rs. 26.93 million).
policies, applies an overall policy of reviewed each quarter by each business
agreeing and clearly communicating unit. The headline risks are presented to
terms of payment as part of the the Board Audit Committee for review
commercial agreements negotiated by the respective business units.
Events Subsequent to the Balance Based on the declaration of Messrs.

Sheet KPMG and as far as the Directors are
Date Except for the matters disclosed in aware, the Auditors do not have any
Note 40 to the Financial Statements on relationship [except in so far as an
page 152 there were no material events Auditor] or interest in the Company or
which require adjustments or disclosure its Subsidiary.
in the Financial Statements.
Annual Report
Going Concern The Board of Directors approved the
The Board of Directors, after Consolidated Financial Statements
considering the financial position, on 25th May 2016. The appropriate
operating conditions, regulatory and number of copies of this Report
other factors, and such matters required will be submitted to the Colombo
to be addressed in the Code of Best Stock Exchange and to the Sri Lanka
Practice on Corporate Governance Accounting and Auditing Standards
issued jointly by the Securities and Monitoring Board on 27th May 2016.
Exchange Commission and the Institute
of Chartered Accountants of Sri Lanka, Annual General Meeting
has a reasonable expectation that the The 22nd Annual General Meeting of the
Company and its Subsidiary possess Company will be held at the Auditorium
adequate resources to continue in of Ceylon Chamber of Commerce, at
operation for the foreseeable future. No. 50, Navam Mawatha, Colombo 2,
For this reason, the Board continues on 20th June 2016 at 11.00 a.m. The
to adopt the Going Concern basis in Notice of Annual General Meeting
preparing the Financial Statements. appears on page 158 of the Annual
Report.
Auditors
The retiring Auditors Messrs. KPMG, This Annual Report is signed for and on
Chartered Accountants, have expressed behalf of the Board of Directors by;
their willingness to continue in office.
The Audit Committee at a meeting
held on 25th April 2016 recommended
that they be re-appointed as Auditors.
A Resolution to re-appoint them as Director Director
auditors and authorising the Directors By Order of the Board
to determine their remuneration will
be proposed at the Annual General
Meeting.
The Independent Auditors’ Report KEELLS CONSULTANTS (PRIVATE)

to the shareholders on the Financial LIMITED
Statements is given on page 105. Secretaries
The Audit Committee reviews the Colombo

appointment of the Auditor, its 25th May 2016
effectiveness, independence and
its relationship with the Company,
including the level of audit and non–
audit fees paid to the Auditor.

Financial
Statements
Financial Calendar
Interim Reports
1st Quarter 28th July 2015
2nd Quarter 29th October 2015
3rd Quarter 27th January 2016
4th Quarter 25th May 2016
Annual Reports
2014/15 29th May 2015
2015/16 25th May 2016
Meetings
21st Annual General Meeting 26th June 2015
22nd Annual General Meeting 20th June 2016

Dividens
Final dividend of Rs.3 per share for the year 2014/15 was paid on 19.06.2015
Interim dividend of Rs.2.5 per share for the year 2015/16 was paid on 31.03.2016
Report of the Audit Committee
Introduction Composition of the Committee and The Audit Committee held four (4)
The Board Audit Committee of Asian Meetings meetings during the financial year.
Hotels and Properties PLC is formally The Audit Committee comprised of Information on the attendance at these
constituted as a Sub-Committee of the three Non-Executive Independent meetings is given under Corporate
Main Board, to which it is accountable. Directors. Mr. C.J.L. Pinto serves as the Governance on page 76. In addition,
Charter of the Committee clearly Chairman of the Audit Committee since the Chairman of the Committee met
defines the terms of reference of the 2011. He is a Fellow of the Institute of the Internal and External Auditors and
Audit Committee. It demonstrates that Chartered Accountancy of Sri Lanka in-house personnel, as necessary, to
activities of the Audit Committee are and has 44 years of post qualifying strengthen guidance and oversight
in-line with the Code of Best Practice on experience in the profession. He also related to Audit Committee matters.
Corporate Governance issued jointly by serves as the Chairman of the Audit
the Institute of Chartered Accountants Committee of Trans Asia Hotels PLC. The activities and views of the
of Sri Lanka and the Securities and Other members of the Committee Committee have been communicated to
Exchange Commission of Sri Lanka. are Chartered Accountants, whilst the Board of Directors quarterly through
one member of the Committee has a verbal briefings and by tabling the
The effectiveness of the Committee is specialist financial background. All minutes of the Committee’s meetings.
evaluated annually by each member Non-Executive Directors satisfy the
of the Committee and the results are criteria for independence as specified in Financial Reporting
communicated to the Board. the Standards on Corporate Governance The Audit Committee has reviewed and
for listed Companies issued by the discussed the Group’s quarterly and
This report focuses on the activities of Securities and Exchange Commission of annual Financial Statements prior to
the Audit Committee for the year under Sri Lanka. The Audit Committee reports publication with management and the
review. A more general description directly to the Board. The individual and external auditors, including the extent
of the Committee’s functions is also collective financial and hotel industry of compliance with Sri Lanka Accounting
given under Corporate Governance specific knowledge, business experience Standards, the appropriateness of
Commentary on pages 75 and 76. and independence of members are its accounting policies and material
brought to bear on all matters, which judgmental matters. The Committee has
Role of the Committee fall within the committee’s purview. The also regularly discussed the operations
The role of the Audit Committee is to Director Finance of the Cinnamon’s city of the Company and its future prospects
assist the Board in fulfilling its oversight hotels sector served as the Secretary to with the Management and is satisfied
responsibilities for the integrity of the the Audit Committee. that all relevant matters have been
Financial Statements of the Company taken into account in the preparation
and the Group, the internal control The President of the Property Group of of the Financial Statements. The
and risk management systems of the John Keells Holdings, Sector Head of Committee also discussed with the
Group and its compliance with legal and Cinnamon’s city hotels, Sector Financial External Auditors and Management
regulatory requirements, the external Controllers of Property and Hotels the matters communicated to the
auditors’ performance, qualifications Sectors together with the Head of Group Committee by the External Auditors in
and independence, and the adequacy Business Process Review of John Keells their reports on the audit for the year.
and performance of the internal audit Holdings PLC, attend Audit Committee
function, which at John Keells Holding meetings by invitation. Other officials Internal Audit, Risks and Controls
PLC is termed Group Business Process are invited to attend on a need- PricewaterhouseCoopers (Pvt) Ltd
Review Division (Group BPR). This is basis. Outsourced Internal Auditors, continued to serve as the Outsourced
detailed in the terms of reference of the PricewaterhouseCoopers (Pvt) Ltd., and Internal Auditors of the Company, and
Committee which has been approved by Independent External Auditors KPMG the audit plans and scope of work were
the Board and is reviewed annually. are required to attend meetings on a formulated in consultation with the John
regular basis. Keells Group Business Process Review
(Group BPR) Division and approved by
the Committee.

The main focus of the Internal Audit was The effectiveness and resource The performance of the External
to provide independent assurance on requirements of the Group BPR division Auditors has been evaluated and
the overall system of internal controls, was reviewed and discussed with discussed with the senior management
risk management and governance; management. of the Company, and the Committee
by evaluating the adequacy and has recommended to the Board that
effectiveness of internal controls, and External Audit KPMG be re-appointed as the External
compliance with laws and regulations The External Auditors’ letter of Auditors of Asian Hotels and Properties
and established policies and procedures engagement, including the scope of PLC for the financial year ending 31st
of the company. Reports from the the audit, was reviewed and discussed March 2017, subject to approval by
Outsourced Internal Auditors on the by the Committee with the external the shareholders at the Annual General
operations of the Company were also auditors and Management prior to the Meeting.
reviewed by the Committee. commencement of the audit.
Conclusion
During the year, reports were received The External Auditors kept the Based on the reports submitted by the
by the Committee from the Outsourced Committee advised on an on-going basis External Auditors and the Outsourced
Internal Auditors, which were reviewed regarding any unresolved matters of Internal Auditors of the Company, the
and discussed with Management, the significance. Before the conclusion of assurances and certifications provided
Outsourced Internal Auditors and the audit, the Committee met with the by the senior management, and the
the John Keells Group BPR Division. External Auditors to discuss all audit discussions with the Management and
The recommendations of the Internal issues and agree on their treatment. the auditors both at formal meetings
Auditors have been followed up and are This included the discussion of formal and informally, the Committee is of
being implemented. reports from the External Auditors to the view that the control environment
the Committee. The Committee also within the Company is satisfactory and
The Audit Committee has also reviewed met the External Auditors, without the provides reasonable assurance that the
the processes for the identification, Management being present, prior to the financial position of the Company is
evaluation and management of all finalisation of the Financial Statements. adequately monitored and its assets are
significant operational risks faced by safeguarded.
the Company. The most significant The External Auditors’ final
operational risks and the remedial management reports on the audit of
measures taken to mitigate them have the Company and Group Financial
been reviewed with the Management Statements for the year 2015/16,
and the John Keells Group Sustainability together with management’s responses, C.J.L. Pinto
and Enterprise Risk Management were discussed with management and Chairman of the Audit Committee
division. the auditors.
25th May 2016
Formal confirmations and assurances The Audit Committee is satisfied that
have been received from senior the independence of the External
management on a quarterly basis Auditors have not been impaired by
regarding the efficacy and status of any event or service that given rise to a
the internal control systems and risk conflict of interest. Due consideration
management systems, and compliance has been given to the level of audit and
with applicable laws and regulations. non-audit fees received by the External
The Committee reviewed the whistle Auditors from the John Keells Group and
blowing arrangements for the Company confirmation has been received from the
which is in-line with the Group External Auditors of their compliance
arrangements and had direct access to with the independence criteria given in
the Ombudsman for the Group. the Code of Ethics of the Institute of
Chartered Accountants of Sri Lanka.
Statement of Directors’ Responsibility
The responsibility of the Directors in Provide the information required in accordance with Section 57 of the
relation to the Financial Statements is by and otherwise comply with the Companies Act No. 7 of 2007, and have
set out in the following statement. The Companies Act No. 7 of 2007 and obtained a certificate from the Auditors,
responsibility of the Auditors, in relation the Listing Rules of the Colombo prior to declaring a Final Dividend of
to the Financial Statements prepared Stock Exchange. Rs. 2/- per share for the year ended
in accordance with the provision of the 31st March 2016, to be paid on 13th
Companies Act No. 7 of 2007, is set out The Directors are also required to June 2016.
in the Report of the Auditors. ensure that the Company has adequate
resources to continue in operation to The Directors are of the view that they
The Financial Statements comprise of: justify applying the going concern basis have discharged their responsibilities as
in preparing these Financial Statements. set out in this Statement.
I ncome Statement and Statement
of Comprehensive Income of the Furthermore, the Directors have Compliance Report
Company and of the Group, which a responsibility to ensure that the The Directors confirm that, to the best
present a true and fair view of the Company maintains sufficient of their knowledge, all taxes, duties
profit and loss of the Company accounting records to disclose, with and levies payable by the Company
and of the Group for the respective reasonable accuracy, the financial and the Group, all contributions, levies
financial year. position of the Company and of the and taxes payable on behalf of and
Group. in respect of the employees of the
A Statement of the Financial Company and the Group, and all other
Position, which presents a true and The Directors are also responsible for known statutory dues as were due and
fair view of the state of affairs of the taking reasonable steps to safeguard payable by the Company and the Group
Company and of the Group as at the the assets of the Company and of the as at the Balance Sheet date have been
end of the financial year: and Group and in this regard to give proper paid and/or provided for, except as
consideration to the establishment of specified in Note 38 to the Financial
The Directors are required to confirm appropriate internal control systems Statements covering Contingent
that the Financial Statements have been with a view to preventing and detecting Liabilities.
prepared: fraud and other irregularities.
By Order of the Board
U
sing appropriate accounting The Directors are required to prepare
policies which have been selected the Financial Statements and to provide
and applied in a consistent manner, the Auditors with every opportunity
and material departures, if any, have to take whatever steps and undertake
been disclosed and explained; and whatever inspections that may be Keells Consultants (Private) Limited
considered being appropriate to enable Secretaries
Presented in accordance with the them to give their audit opinion.
Sri Lanka Accounting Standards 25th May 2016
(SLFRS/LKAS) and that reasonable Further, as required by Section 56 (2) of
and prudent judgments and the Companies Act No. 7 of 2007, the
estimates have been made so Board of Directors have confirmed that
that the form and substance of the Company, based on the information
transactions are properly reflected; available, satisfies the solvency test
and immediately after the distribution,

Independent Auditors’ Report
TO THE SHAREHOLDERS OF ASIAN requirements and plan and perform the for the year then ended in accordance
HOTELS AND PROPERTIES PLC audit to obtain reasonable assurance with Sri Lanka Accounting Standards.
about whether the financial statements
Report on the Financial are free from material misstatement. Report on Other Legal and
Statements Regulatory Requirements
We have audited the accompanying An audit involves performing procedures As required by section 163 (2) of the
financial statements of Asian Hotels and to obtain audit evidence about the Companies Act No. 07 of 2007, we state
Properties PLC, (the “Company”), and amounts and disclosures in the financial the following:
the consolidated financial statements statements. The procedures selected
of the Company and its subsidiary (the depend on the auditor’s judgment, a) The basis of opinion and scope and
“Group”), which comprise the statement including the assessment of the limitations of the audit are as stated
of financial position as at 31st risks of material misstatement of the above.
March 2016, and income statement, financial statements, whether due to b) In our opinion;
statement of profit or loss and other fraud or error. In making those risk - We have obtained all the
comprehensive income, statement assessments, the auditor considers information and explanations
of changes in equity and cash flow internal control relevant to the entity’s that were required for the audit
statement for the year then ended, and preparation of the financial statements and, as far as appears from our
a summary of significant accounting that give a true and fair view in order examination, proper accounting
policies and other explanatory notes set to design audit procedures that are records have been kept by the
out on pages 106 to 152. appropriate in the circumstances, but Company,
not for the purpose of expressing an - The financial statements of the
Board’s Responsibility for the opinion on the effectiveness of the Company give a true and fair
Financial Statements entity’s internal control. An audit also view of its financial position as
The Board of Directors (“Board”) is includes evaluating the appropriateness at 31st March 2016, and of its
responsible for the preparation of these of accounting policies used and the financial performance and cash
financial statements that give a true and reasonableness of accounting estimates flows for the year then ended
fair view in accordance with Sri Lanka made by Board, as well as evaluating in accordance with Sri Lanka
Accounting Standards, and for such the overall presentation of the financial Accounting Standards.
internal control as Board determines is statements. - The financial statements of the
necessary to enable the preparation of Company and the Group comply
financial statements that are free from We believe that the audit evidence with the requirements of sections
material misstatement, whether due to we have obtained is sufficient and 151 and 153 of the Companies
fraud or error. appropriate to provide a basis for our Act No. 07 of 2007.
audit opinion.
Auditor’s Responsibility
Our responsibility is to express an Opinion
opinion on these financial statements In our opinion, the consolidated
based on our audit. We conducted financial statements give a true and Chartered Accountants
our audit in accordance with Sri Lanka fair view of the financial position of the Colombo.
Auditing Standards. Those standards Group as at 31st March 2016, and of its 25th May 2016
require that we comply with ethical financial performance and cash flows
Income Statement
GROUP COMPANY
For the year ended 31st March 2016 2015 2016 2015
In Rs.’000s Page No. Note

Revenue 121 5 8,066,693 8,080,152 5,583,004 5,294,080
Cost of Sales (3,424,137) (3,356,728) (2,291,195) (2,201,856)
Gross Profit 4,642,556 4,723,424 3,291,809 3,092,224

Dividend Income 121 6 - - 156,281 273,493
Other Operating Income 121 7 76,739 80,523 70,984 70,523
Distribution Expenses (326,979) (238,765) (133,226) (108,885)
Administrative Expenses (1,915,898) (1,836,041) (1,284,173) (1,179,197)
Other Operating Expenses (579,259) (607,048) (320,109) (361,448)
Results from operating activities 1,897,159 2,122,093 1,781,566 1,786,710
Finance Cost 121 8 (47,074) (190) - -

Finance Income 121 9 156,710 199,958 150,038 165,046
Net Finance Income 109,636 199,768 150,038 165,046
Change in Fair Value of Investment Property 129 16 224,665 28,792 98,565 8,142
Profit Before Tax 122 10 2,231,460 2,350,653 2,030,169 1,959,898

Income Tax Expense 122 11 (208,789) (263,196) (154,647) (153,164)
Profit for the Year 2,022,671 2,087,457 1,875,522 1,806,734
Attributable to:
Owners of the Company 1,841,133 1,756,629 1,875,522 1,806,734
Non-controlling Interest 181,538 330,828 - -
2,022,671 2,087,457 1,875,522 1,806,734
Rs. Rs. Rs. Rs.
Earnings Per Share 124 12 4.16 3.97 4.24 4.08
Figures in brackets indicate deductions.

The accounting policies and notes as set out in pages 112 to 152 form an integral part of these Financial Statements.

Statement of Profit or Loss and Other

Comprehensive Income
Group Company
For the year ended 31st March Note 2016 2015 2016 2015
In Rs.’000s
Profit for the Year 2,022,671 2,087,457 1,875,522 1,806,734
Other comprehensive income

Items that will never be reclassified to profit or loss - - - -
Revaluation of land and buildings 14.1-14.2 - 1,687,240 - 1,687,240
Re-measurement gain/(loss) on defined benefit Plans 30 (13,108) 1,215 (8,771) (574)
Differed tax effect on actuarial Valuation Gain 11.2 520 (215) - -
Other comprehensive income for the year, net of tax (12,588) 1,688,240 (8,771) 1,686,666
Total comprehensive income for the year, net of tax 2,010,083 3,775,697 1,866,751 3,493,400
Attributable to :
Owners of the Company 1,830,705 3,443,978 1,866,751 3,493,400
Non-controlling Interests 179,378 331,719 - -
2,010,083 3,775,697 1,866,751 3,493,400
Figures in brackets indicate deductions.
STATEMENT OF FINANCIAL POSITION
GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs.’000s Page No. Note
ASSETS
Non current Assets
Property, Plant and Equipment 125 14 21,291,020 20,703,920 17,515,878 17,284,527
Lease Hold property 128 15 793,856 806,260 - -
Investment Property 129 16 4,165,000 3,935,508 2,260,000 2,156,608
Intangible Assets 130 17 2,897 2,858 1,523 708
Investment in Subsidiary 131 18 - - 660,045 660,045
Non Current Financial Assets 133 20 24,590 12,173 17,833 8,436
Other Non Current Assets 133 21 3,835 2,644 2,806 2,002
Total Non current Assets 26,281,198 25,463,363 20,458,085 20,112,326
Current Assets
Inventories 133 22 125,566 120,336 86,828 86,412
Trade and Other Receivables 133 23 782,657 637,985 366,804 322,227
Amounts Due from Related Parties 140 34.2 87,901 66,484 27,822 31,801
Other Current Assets 134 24 122,021 132,075 75,948 88,830
Short Term Investments 134 25 1,198,681 2,475,667 1,198,681 2,239,351
Cash In Hand and at Bank 505,384 499,964 379,738 267,245
Total Current Assets 2,822,210 3,932,511 2,135,821 3,035,866
Total Assets 29,103,408 29,395,874 22,593,906 23,148,192
EQUITY & LIABILITIES

Equity attributable to owners of the company
Stated Capital 134 26 3,345,117 3,345,117 3,345,117 3,345,117
Revenue Reserves 7,139,930 7,883,065 5,802,677 6,432,793
Other components of equity 134 27 12,824,188 12,808,756 12,345,799 12,319,823
23,309,235 24,036,938 21,493,593 22,097,733
Non-controlling Interest 3,227,406 3,388,477 - -

Total Equity 26,536,641 27,425,415 21,493,593 22,097,733
Non Current Liabilities

Interest bearing borrowings 136 28 359,897 - - -
Deferred tax liabilities 137 29 344,721 341,062 - -
Employee benefit liabilities 138 30 274,150 241,873 155,546 131,873
Total Non Current Liabilities 978,768 582,935 155,546 131,873
Current Liabilities
Trade and Other Payables 139 31 768,822 682,330 453,027 434,129
Amounts Due to Related Parties 140 34.3 112,789 111,471 80,523 85,971
Income tax liabilities 139 32 62,859 144,236 51,406 117,099
Current portion of borrowings 136 28 83,053 - - -
Other current liabilities 139 33 383,743 332,759 266,649 221,558
Bank Overdrafts 176,733 116,728 93,162 59,829
Total Current Liabilities 1,587,999 1,387,524 944,767 918,586
Total Equity and Liabilities 29,103,408 29,395,874 22,593,906 23,148,192
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
Director Director
The accounting policies and notes as set out in pages 112 to 152 form an integral part of these financial statements.
25th May, 2016

STATEMENT OF CHANGES IN EQUITY

GROUP Attributable to Owners of the Company
Note Stated Revaluation Other Retained Total Non Total
Capital Reserve Capital Earnings controlling Equity
Reserve Interest
In Rs.’000s
As at 1 April 2014 3,345,117 11,094,883 15,988 7,880,070 22,336,058 3,451,487 25,787,545

Total comprehensive income
Profit for the year - - - 1,756,629 1,756,629 330,828 2,087,457
Other comprehensive income - 1,687,240 - 109 1,687,349 891 1,688,240
Total comprehensive income - 1,687,240 - 1,756,738 3,443,978 331,719 3,775,697
Transactions with Owners of the Company
Transferred to revenue reserve Note (a) (6,447) 6,447 - - -
Transferred to revenue reserve Note (b) - (10,911) - 10,911 - - -
Share based payments 27.2 - - 28,003 - 28,003 1,401 29,404
Final dividend paid- 2013/14 13 - - - (1,328,326) (1,328,326) - (1,328,326)
Interim dividend Paid-2014/15 13 - - - (442,775) (442,775) - (442,775)
Subsidiary dividend to Non-controling Interest -2013/14 - - - - - (226,360) (226,360)
Subsidiary dividend toNon-controling Interest -2014/15 - - - - - (169,770) (169,770)
As at 31st March 2015 3,345,117 12,764,765 43,991 7,883,065 24,036,938 3,388,477 27,425,415
As at 01st April 2015 3,345,117 12,764,765 43,991 7,883,065 24,036,938 3,388,477 27,425,415
Charge relating to super gain tax Note (c) - - - (149,487) (149,487) (114,566) (264,053)
Profit for the year - - - 1,841,133 1,841,133 181,538 2,022,671
Other comprehensive income - - - (10,428) (10,428) (2,160) (12,588)
Total comprehensive income - - - 1,830,705 1,830,705 179,378 2,010,083
Transferred to revenue reserve Note (a) - - - - - - -
Transferred to revenue reserve Note (b) (10,911) - 10,911 - - -
Share based payments 27.2 26,343 26,343 477 26,820
Final dividend paid - 2014/15 13 - - - (1,328,326) (1,328,326) - (1,328,326)
Interim dividend Paid-2015/16 13 - - - (1,106,938) (1,106,938) - (1,106,938)
Subsidiary dividend to Non-controling Interest -2014/15 - - - - - - (226,360) (226,360)
As at 31st March 2016 3,345,117 12,753,854 70,334 7,139,930 23,309,235 3,227,406 26,536,641
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.6.44 million has been
transferred directly to Retained Earnings as at the last year reporting date(31st March 2015).
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 assets’ original cost is
transferred from revaluation surplus to retained earnings amounting Rs.10.91 million. (Rs.10.91 million in 2015).
Note (c) As per the provisions of Part III of the Finance Act, No. 10 of 2015 which was certified on 30 October 2015,the Group is liable for Super
Gain tax of Rs. 264.05 Million. According to the Act, the super gain tax shall be deemed to be an expenditure in the financial statements relating
to the year of assessment which commenced on 1 April 2013. The Act supersedes the requirements of the Sri Lanka Accounting Standards,hence
the expense of Super gain tax is accounted in accordance with the requirements of the said Act as recommended by the Statement of Alternative
Treatment (SoAT) on Accounting for Super Gain Tax issued by the Institute of Chartered Accountants of Sri Lanka, dated 24 November 2015.
Figures in brackets indicate deductions

The Notes to the Financial Statements from Page 112 to 152 form an integral part of these Financial Statements.
STATEMENT OF CHANGES IN EQUITY contd.
COMPANY
Note Stated Revaluation Other Retained Total
Capital Reserve Capital Earnings Equity
Reserve
In Rs.’000s
As at 01st April, 2014 3,345,117 10,597,631 14,470 6,391,287 20,348,505

Profit for the year - - - 1,806,734 1,806,734
Other comprehensive income - 1,687,240 - (574) 1,686,666
Total comprehensive income - 1,687,240 - 1,806,160 3,493,400
Tranferred to revenue reserve Note (a) - (6,447) - 6,447 -
Share based payments 27.3 - - 26,929 - 26,929
Final dividend paid- 2013/2014 13 - - - (1,328,326) (1,328,326)
Interim dividend paid-2014/2015 13 - - - (442,775) (442,775)
As at 31st March, 2015 3,345,117 12,278,424 41,399 6,432,793 22,097,733
As at 01st April 2015 3,345,117 12,278,424 41,399 6,432,793 22,097,733
Charge relating to super gain tax Note (b) - - - (61,603) (61,603)
Profit for the year - - - 1,875,522 1,875,522
Other comprehensive income - - - (8,771) (8,771)
Total comprehensive income - - - 1,866,751 1,866,751
Tranferred to revenue reserve Note (a) - - - - -
Share based payments 27.3 - - 25,976 - 25,976
Final dividend paid - 2014/2015 13 - - - (1,328,326) (1,328,326)
Interim dividend paid-2015/2016 13 - - - (1,106,938) (1,106,938)
As at 31st March, 2016 3,345,117 12,278,424 67,375 5,802,677 21,493,593
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.6.44 million has been transferred directly to Retained Earnings as at the last year reporting date(31st March
2015). (Refer Note No 27 on page 134 for details).
Note (b) As per the provisions of Part III of the Finance Act, No. 10 of 2015 which was certified on 30 October 2015,the
Company is liable for Super Gain tax of Rs. 61.60 Million. According to the Act, the super gain tax shall be deemed to be
an expenditure in the financial statements relating to the year of assessment which commenced on 1 April 2013. The Act
supersedes the requirements of the Sri Lanka Accounting Standards,hence the expense of Super gain tax is accounted in
accordance with the requirements of the said Act as recommended by the Statement of Alternative Treatment (SoAT) on
Accounting for Super Gain Tax issued by the Institute of Chartered Accountants of Sri Lanka, dated 24 November 2015.


STATEMENT OF CASH FLOW

GROUP COMPANY
For the Year Ended 31st March Note 2016 2015 2016 2015
In Rs.’000s
CASH FLOWS FROM OPERATING ACTIVITIES

Operating Profit Before Working Capital Changes A 2,518,516 2,698,412 1,985,891 1,851,406
(Increase) / Decrease in Inventories (6,020) 683 (416) (1,266)

(Increase) / Decrease in Trade and Other Receivables (137,349) (159,869) (38,140) (75,222)
(Increase) / Decrease Amounts Due from Related Parties (21,417) (17,621) 3,979 2,916
(Increase) / Decrease Other Current Assets 2,960 (35,583) 8,283 (18,648)
Increase / (Decrease) Trade and Other Payables 86,492 55,807 18,897 30,404
Increase / (Decrease) Amounts Due to Related Parties 1,318 24,130 (5,448) 25,067
Increase / (Decrease) Other Current Liabilities 50,984 18,896 45,091 2,114
Cash Generated from Operations 2,495,484 2,584,855 2,018,137 1,816,771

Finance Income Received 9 156,710 199,958 150,038 165,046
Finance Cost Paid 8 (5,524) (190) - -
Dividend Received 6 - - 156,281 273,493
Super Gain Tax Paid (264,053) - (61,603) -
Tax Paid (279,119) (185,975) (215,740) (62,853)
Gratuity Paid 30 (29,076) (23,363) (12,860) (8,802)
Net Cash Flow from Operating Activities 2,074,422 2,575,285 2,034,253 2,183,655
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Purchase / Transfers and Construction of Property, Plant and Equipment 14 (1,136,392) (1,009,938) (548,245) (838,093)
Addition to Investment Property 16 (4,827) - (4,827) -
Addition to Intangible Assets 17 (1,398) (800) (1,155) -
Proceeds from Sale of Property, Plant & Equipment 10,456 19,936 3,929 7,132
Proceeds from/ (Repayment of) Other Assets (Net) (13,608) 6,996 (10,201) 4,217
Net Cash Used in Investing Activities (1,145,769) (983,806) (560,499) (826,744)
CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES

Dividend Paid to Equity Holders of Parent 13 (2,435,264) (1,771,101) (2,435,264) (1,771,101)
Dividend paid to shareholders with non-controlling interest (226,360) (396,130) - -
Proceeds from Long Term Borrowings 28 401,400 - - -
Net Cash Used in Financing Activities (2,260,224) (2,167,231) (2,435,264) (1,771,101)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (1,331,571) (575,752) (961,510) (414,190)
CASH AND CASH EQUIVALENTS AT THE BEGINNING 2,858,903 3,434,655 2,446,767 2,860,957
CASH AND CASH EQUIVALENTS AT THE END 1,527,332 2,858,903 1,485,257 2,446,767
ANALYSIS OF CASH AND CASH EQUIVALENTS

Favourable Balances
Cash and Bank 505,384 499,964 379,738 267,245
Short Term Investments 1,198,681 2,475,667 1,198,681 2,239,351
Unfavourable Balances
Bank Overdrafts (176,733) (116,728) (93,162) (59,829)
Total Cash and Cash Equivalents 1,527,332 2,858,903 1,485,257 2,446,767
A. Operating Profit Before Working Capital Changes

Profit before Tax 2,231,460 2,350,653 2,030,169 1,959,898
Adjustments for:
Finance Income 9 (156,710) (199,958) (150,038) (165,046)
Dividend Income 6 - - (156,281) (273,493)
Finance Cost 8 5,524 190 - -
Change in Fair Value of Investment Property 16 (224,665) (28,792) (98,565) (8,142)
Depreciation of Property, Plant and Equipment 14 512,585 482,938 307,741 283,110
(Profit) / Loss on Disposal of Property, Plant & Equipment 7 1,686 (434) 5,223 1,959
Amortisation of Leasehold Properties 15 12,404 12,404 - -
Amortisation of Intangiable Assets 17 1,359 3,207 340 294
Provision /(Reversal) for Doubtful Debts 23 (6,280) 3,091 (6,436) 460
Gratuity Charge and Related Costs 30 47,429 44,846 27,762 25,437
Share Based Payment Expenses 27.2-27.3 26,820 29,404 25,976 26,929
Provision Made on slow moving Inventory 22 790 863 - -
Unrealised Gain/Loss on Foreign Exchange 8 41,550 - -
De-recognition of Property, Plant and Equipment 24,564 - - -
2,518,516 2,698,412 1,985,891 1,851,406

NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY The Consolidated Financial Statements assumptions are reviewed on an ongoing
Asian Hotels and Properties PLC is were authorized for issue by the Board basis. Revisions to accounting estimates
a public limited liability Company of Directors on 25th May 2016. are recognised prospectively.
incorporated and domiciled in Sri
Lanka and listed on the Colombo (b) Basis of Measurement i) Judgements
Stock Exchange. The registered office The Financial Statements have been Information about judgements made
and principal place of business of the prepared on the historical cost basis in applying accounting policies that
company is located at No.77, Galle except for followings items, which are have the most significant effects on
Road, Colombo 03. The consolidated measured on an alternative basis on the amounts recognised in the financial
financial statements of the Company as each reporting date. statements is included in the following
at and for the year ended 31st March Freehold Land and Buildings which notes:
2016 comprise the financial information are measured at cost, at the time Consolidation: whether the Group
of the Company and its subsidiary; Trans of acquisition are subsequently has de facto control over an investee
Asia Hotels PLC (together referred to as recognised at revalued amounts - Note 18.
the ‘Group’ and individually as ‘Group which are the fair values at the date
entities’). of revaluation less accumulated ii) Assumptions and Estimation
depreciation and impairment cost if Uncertainties
The principal activities of the Company any. Information about assumptions and
and the Group during the year were Investment properties which are estimation uncertainties that have a
hoteliering and property development. stated at fair values. significant risk of resulting in a material
There were no significant changes in Defined benefit obligations are adjustment in the year ended 31 March
the nature of the principal activities of measured at its present value, 2016 is included in the following notes:
the Company and the Group during the based on an actuarial valuation as
financial year under review. explained in Note 30. Measurement of Defined Benefit
Plans - key actuarial assumptions
The Group had 2,005 (2015 – 2,078) (c) Presentation and Functional Note 30.
employees and the Company had 1,224 Currency Impairment test: key assumptions
(2015- 1,230) employees as at the The Financial Statements are presented underlying recoverable amounts –
Reporting date. in Sri Lankan Rupees, the Group’s page 117.
functional and presentation currency, Recognition and measurement of
which is the currency of the primary provisions and contingencies: key
2. BASIS OF PREPARATION economic environment in which the assumptions about the likelihood
Holding Company operates. Each and magnitude of an outflow of
(a) Statement of Compliance entity in the Group uses the currency of resources – note 38
The Financial Statements of the the primary economic environment in
Company and the Group comprise which they operate as their functional Measurement of Fair Values:
the statements of financial position, currency. All values are rounded to the A number of the Group’s accounting
income, profit or loss and other nearest Sri Lankan Rupees thousand policies and disclosures require the
comprehensive income, changes in (Rs.’000) unless otherwise indicated. measurement of fair values for both
equity and cash flows together with the financial and non-financial assets and
notes to the financial statements. The (d) Use of Estimates and Judgments liabilities. Company regularly reviews
consolidated Financial Statements have The preparation of the Financial significant unobservable inputs and
been prepared in accordance with Sri Statements, management has made valuation adjustments. If third party
Lanka Accounting Standards (LKAS/ judgments, estimates and assumptions information is used to measure fair
SLFRS) laid down by the Institute of that affect the application of accounting values, Company assesses the evidence
Chartered Accountants of Sri Lanka and policies and the reported amounts of obtained from the third parties to
the requirements of Companies Act No. assets, liabilities, income and expenses. support the conclusion that such
7 of 2007. Actual results may differ from these valuations meet the requirements of
estimates. Estimates and underlying SLFRS, including the level in the fair

value hierarchy in which such valuations 4. ACCOUNTING POLICIES any related NCI and other components
should be classified. Significant The Accounting Policies set out below of equity. Any resulting gain or loss is
valuation issues are reported to the have been applied consistently to all recognised in profit or loss. Any interest
Group’s Audit Committee. When periods presented in the Financial retained in the former subsidiary is
measuring the fair value of an asset or Statements of the Company and the measured at fair value when control is
a liability, the Group uses observable Group unless otherwise indicated. lost.
market data as far as possible. Fair values
are categorized into different levels in a (a) Basis of Consolidation (v) Transactions Eliminated on
fair value hierarchy based on the inputs Consolidation
used in the valuation techniques as (i) Business Combinations Intra-group balances and transactions,
follows: Business combinations are accounted and any unrealised income and
for using the acquisition method as at expenses arising from intra-group
I. Level 1: Quoted prices (unadjusted) in the acquisition date - i.e. when control transactions, are eliminated in preparing
active markets for identical assets or is transferred to the Group. Control is the Consolidated Financial Statements.
liabilities. the power to govern the financial and
operating policies of an entity so as to (b) Foreign Currency Transactions
II. Level 2: Inputs other than quoted obtain benefits from its activities. In Transactions in foreign currencies are
prices included in Level 1 that are assessing control, the Group takes into translated to the respective functional
observable for the asset or liability, consideration potential voting rights currencies of Group entities at exchange
either directly (i.e. as prices) or that are currently exercisable. rates at the dates of the transactions.
indirectly (i.e. derived from prices). Monetary assets and liabilities
(ii) Non-controlling Interests denominated in foreign currencies at
III. Level 3: Inputs for the asset or liability NCI are measured at their proportionate the reporting date are retranslated to
that are not based on observable share of the acquiree’s identifiable net the functional currency at the exchange
market data (unobservable inputs). assets, which are generally at fair value rate at that date.
at the date of acquisition.
If the inputs used to measure the fair The foreign currency gain or loss
value of an asset or a liability fall into Changes in the Group’s interest in a on monetary items is the difference
different levels of the fair value hierarchy, subsidiary that do not result in a loss between amortised cost in the
then the fair value measurement is of control are accounted for as equity functional currency at the beginning
categorised in its entirety in the same transactions. of the year, adjusted for effective
level of the fair value hierarchy as the interest and payments during the
lowest level input that is significant to the (iii) Subsidiaries year, and the amortised cost in foreign
entire measurement. Subsidiaries are those enterprises currency translated at the exchange
controlled by the group. The Group rate at the end of the year. Non-
The Group recognises transfers between controls an entity when it is exposed monetary assets and liabilities that
levels of the fair value hierarchy at the to, or has rights to, variable returns are measured at fair value in a foreign
end of the reporting period during which from its involvement with the entity and currency are retranslated to the
the change has occurred. has the ability to affect those returns functional currency at the exchange
through its power over the entity. The rate at the date that the fair value was
financial statements of subsidiaries are determined. Non-monetary items that
3. COMPARATIVE included in the consolidated financial are measured based on historical cost
INFORMATION statements from the date on which in a foreign currency are translated
The presentation and classification of control commences until the date on using the exchange rate at the date
the Financial Statements of the previous which control ceases. of the transaction. Foreign currency
years have been amended, where differences arising on retranslation are
relevant for better presentation and to be (iv) Loss of Control recognised in profit or loss.
comparable with those of the current When the Group loses control over a
year. subsidiary, it derecognises the assets
and liabilities of the subsidiary, and
NOTES TO THE FINANCIAL STATEMENTS contd.
(c) Financial Instruments However Company carry only financial substantially all of the risks and rewards
assets categorised as loans and of the asset nor transferred control
(i) Non-Derivative Financial Assets receivables as at the balance sheet date of it, the asset is recognised to the
extent of the Company and the Group’s
Initial Recognition and Measurement Loans and Receivables continuing involvement in it. In that
Financial assets within the scope of Loans and receivables are financial case, the Company and the Group also
LKAS 39 are classified as financial assets with fixed or determinable recognise an associated liability. The
assets at fair value through profit or payments that are not quoted transferred asset and the associated
loss, loans and receivables, held-to- in an active market. After initial liability are measured on a basis that
maturity investments, available-for- measurement, such financial assets are reflects the rights and obligations
sale financial assets, or as derivatives subsequently measured at amortised that the Company and the Group have
designated as hedging instruments in cost using the Effective Interest retained
an effective hedge, as appropriate. The Rate method (EIR), less impairment.
Company and the Group determine the Amortised cost is calculated by taking ii) Non-Derivative Financial
classification of its financial assets at into account any discount or premium Liabilities
initial recognition. All financial assets on acquisition and fees or costs that
are recognised initially at fair value are an integral part of the EIR. The Initial Recognition and Measurement
plus, in the case of assets not at fair EIR amortisation is included in finance Financial liabilities within the scope
value through profit or loss, directly income in the income statement. The of LKAS 39 are classified as financial
attributable transaction costs. Purchases losses arising from impairment are liabilities at fair value through profit
or sales of financial assets that require recognised in the income statement in or loss, other financial liabilities, or
delivery of assets within a time frame finance costs. as derivatives designated as hedging
established by regulation or convention instruments in an effective hedge, as
in the marketplace (regular way trades) De-recognition appropriate. The Company and the
are recognised on the trade date, i.e., the A financial asset is de-recognised when: Group determine the classification of its
date that the Company and the Group financial liabilities at initial recognition.
commit to purchase or sell the asset. T he rights to receive cash flows from
However, as at each reporting date, the the asset have expired When a financial liability is recognised
Company and the Group hold on only the The Company and the Group have initially, an entity shall measure it at its
financial assets categorised as ‘loans and transferred its rights to receive fair value plus, in the case of a financial
receivables’. cash flows from the asset or has liability not at fair value through profit
assumed an obligation to pay the or loss, transaction costs that are
The Company and the Group initially received cash flows in full without directly attributable to the acquisition or
recognise such loans and receivables on material delay to a third party under issue of financial liability. The Company
the date that they are originated. a ‘passthrough’ arrangement; and and the Group classify financial
either liabilities into the other financial
Financial assets and liabilities are offset liabilities category. Such financial
and the net amount presented in the a) The Company and the Group have liabilities are recognised initially at
statement of financial position when, and transferred substantially all the risks fair value less any directly attributable
only when the Company and the Group and rewards of the asset, or transaction costs.
have a legal right to offset the amounts (b) The Company and the Group have
and intends either to settle them on a net neither transferred nor retained Subsequent Measurement
basis or to realise the asset and settle the substantially all the risks and The measurement of financial liabilities
liability simultaneously. rewards of the asset, but has depends on their classification and
transferred control of the asset. the Company and the Group only hold
Subsequent Measurement financial liabilities categorised as other
The subsequent measurement of When the Company and the Group financial liabilities.
financial assets depends on their have transferred its rights to receive
classification and the Company and cash flows from an asset or has entered
the Group only hold financial assets into a passthrough arrangement, and
categorised as loans and receivables. has neither transferred nor retained

Other Liabilities Basis of Measurement The revaluation surplus included in

After initial recognition, other All items of property, plant and equity in respect of an item of property,
liabilities are subsequently measured equipment are initially recorded at plant and equipment may be transferred
at amortised cost using the effective cost. Where items of property, plant directly to retained earnings when the
interest rate method. Gains and losses and equipment are subsequently asset is derecognised.
are recognised in the income statement revalued, the entire class of such
when the liabilities are derecognised as assets is revalued at fair value. The De-recognition
well as through the effective interest Group applies cost model to property, An item of property, plant and
rate method (EIR) amortisation process. plant and equipment except for land equipment are de-recognised upon
Amortised cost is calculated by taking and buildings and records at cost of replacement, disposal or when no future
into account any discount or premium purchase or construction together economic benefits are expected from
on acquisition and fees or costs that with any incidental expenses thereon its use.
are an integral part of the EIR. The EIR less accumulated depreciation and
amortisation is included in finance costs any accumulated impairment losses. Any gain or loss arising on de-
in the income statement. The carrying values of property plant recognition of the asset is included in
and equipment are reviewed for the income statement in the year the
De-recognition impairment when events or changes in asset is de-recognised.
A financial liability is de-recognised circumstances indicate that the carrying
when the obligation under the liability value may not be recoverable. Depreciation
is discharged or canceled or expires. Depreciation is calculated by using a
When an existing financial liability is The Group applies the re-valuation straight-line method on the cost or
replaced by another from the same model to land and buildings. The Group valuation of all property, plant and
lender on substantially different terms, has adopted a policy of revaluing assets equipment, other than freehold land,
or the terms of an existing liability every five years. in order to write off such amounts over
are substantially modified, such an the estimated useful economic life of
exchange or modification is treated as If an asset’s carrying amount is such assets. The estimated useful life of
a de-recognition of the original liability increased as a result of a revaluation, assets is as follows:
and the recognition of a new liability, the increase shall be recognised in
and the difference in the respective other comprehensive income and Assets Years
carrying amounts is recognised in the accumulated in equity under the
Buildings 75
income statement. heading of revaluation surplus.
However, the increase shall be Plant and Machinery 10-20
Amortised Cost Measurement recognised in profit or loss to the extent Motor Vehicles 4-10
The amortised cost of a financial asset that it reverses a revaluation decrease
or liability is the amount at which the of the same asset previously recognised Floating Restaurant 18
financial asset or liability is measured in profit or loss. Furniture,Furnishings 5-15
at initial recognition, minus principal Equipment
repayments and any impairment and If an asset’s carrying amount is
Computers 5
plus/minus the cumulative amortisation decreased as a result of a revaluation,
using the effective interest method the decrease shall be recognised in Base Stock/Circulating 3-10
of any difference between the initial profit or loss. Assets
amount recognised and the maturity
amount. However, the decrease shall be The asset’s residual values and useful
recognised in other comprehensive lives are reviewed, and adjusted if
(d) Property, Plant, and Equipment income to the extent of any credit appropriate, at each financial year end.
balance existing in the revaluation
Basis of Recognition surplus in respect of that asset. Buildings of the subsidiary are
Property, plant and equipment are The decrease recognised in other depreciated using straight Line method
recognized if it is probable that future comprehensive income reduces the in order to depreciate over the balance
economic benefits associated with the amount accumulated in equity under lease period of 64 years.
asset will flow to the company and the heading of revaluation surplus.
the cost of the asset can be reliably
measured.
Depreciation of an assets ceases at a change in use in accordance with the Amotisation shall cease at the earlier
the earlier of the date that the asset is criteria listed in Sri Lanka Accounting of the date that the asset is classified
classified as held for sale and the date Standard 40 “Investment Property” as held for sale or the date that asset is
that asset is de-recognised. (LKAS 40). de-recognised.
(e) Leasehold Property (g) Intangible Assets (iii) De-recognition

Prepaid lease rentals paid to acquire An intangible asset is an identifiable An intangible asset is de-recognised on
land use rights are amortised over non monitory asset without physical disposal or when no future economic
the lease term in accordance with the substance held for use in the production benefits are expected from its use and
pattern of benefits provided. Leasehold or supply goods or other services, subsequent disposal.
property comprising of land use rights rental to others or for administrative
and stated at valuation,are amortised on purposes.An intangible asset is initially (h) Inventories
a straight line basis over the remaining recognised at cost, if it is probable that Inventories are valued at the lower
lease term. future economic benefit will flow to the of cost and net realisable value. Net
enterprise, and the cost of the asset realisable value is the estimated selling
Trans Asia Hotels PLC – The leasehold can be measured reliably. Following price less estimated costs of completion
land is for 99 years commencing 7th initial recognition, intangible assets are and the estimated costs necessary to
August 1981 and is being amortised carried at cost less any accumulated make the sale.
over a period of 94 years commencing amortisation and any accumulated
from 1st April 1986. impairment losses. (i) Cash and Cash Equivalents
Cash and short-term deposits in the
(f) Investment Properties (i) Computer Software statement of financial position comprise
All computer software costs incurred, cash at banks and on hand and short-
Basis of Recognition licensed for use by the Group, which term deposits with a maturity of three
Investment properties are initially are not integrally related to associated months or less. For the purpose of the
recognised at cost. Subsequent to initial hardware, which can be clearly cash flow statement, cash and cash
recognition the Investment Properties identified, reliably measured and it’s equivalents consist of cashand short-
are stated at fair value, which reflects probable that they will lead to future term deposits as defined above, net of
market conditions at the Statement of economic benefits, are included in outstanding bank overdrafts.
Financial Position date. the Statement of Financial Position
under the category intangible assets (j) Impairment
Basis of Measurement and carried at cost less accumulated The recoverable amount of an asset
Investment properties are revalued amortisation and any accumulated or Cash Generating Unit (CGU) is the
where necessary to ensure that the impairment losses. greater of its value in use and its fair
carrying amount does not differ value less costs to sell. In assessing
materially from fair values at the (ii) Amortisation value in use, the estimated future cash
Balance Sheet date, and are revalued Intangible assets with finite lives flows are discounted to their present
at least once in three years. Gains or are amortised over the estimated value using a pre-tax discount rate that
losses arising from changes in fair value useful economic life and assessed reflects current market assessments
are included in the profit or loss in the for impairment whenever there is an of the time value of money and the
year in which they arise. Investment indication that the intangible asset risks specific to the asset or CGU, or
properties are de-recognised when may be impaired. Intangible assets are impairment testing, assets are grouped
disposed of, or permanently withdrawn amortised on a straight line basis in the together into the smallest group of
from use because no future economic Income Statement from the date on assets that generates cash inflows
benefits are expected. which the asset was available for use, from continuing use that are largely
over the best estimate of its useful life. independent of the cash inflows of other
Any gains or losses on retirement or The estimated useful life of software assets or CGUs. Impairment losses are
disposal are recognised in profit or loss is 5 years. The amortisation period recognised in profit or loss. Impairment
in the year of retirement or disposal. and the amortisation method for an losses recognised in respect of CGUs
Transfers are made to and from intangible asset with a finite useful life are allocated to reduce the carrying
investment property only when there is are reviewed at least at each financial amounts of the other assets in the CGU
year-end. (group of CGUs) on a pro-rata basis.

For other assets, an impairment loss cash flows discounted at the asset’s (ii) Defined Benefit Plans
is reversed only to the extent that the original effective interest rate. Losses A defined benefit plan is a post-
asset’s carrying amount does not exceed are recognised in profit or loss and employment benefit plan other than a
the carrying amount that would have reflected in an allowance account defined contribution plan.
been determined, net of depreciation or against loans and receivables or held-to
amortisation, if no impairment loss had maturity investment securities. Interest The Company and the Group are liable
been recognised. on the impaired asset continues to be to pay retirement benefits under the
recognised. When an event occurring Payment of Gratuity Act, No. 12 of
(i) Impairment of Non-derivative after the impairment was recognised 1983.
Financial Assets causes the amount of impairment loss
Financial assets are assessed at each to decrease, the decrease in impairment The liability recognised in the statement
reporting date to determine whether loss is reversed through profit or loss. of financial position is the present value
there is objective evidence that it is of the defined benefit obligation at the
impaired. A financial asset is impaired (iii) Non-Financial Assets reporting date.
if there is objective evidence of The carrying amounts of the Company
impairment as a result of one or more and the Group non-financial assets, The defined benefit obligation is
events that occurred after the initial other than inventories and deferred tax calculated by a qualified actuary
recognition of the asset, and that loss assets, are reviewed at each reporting as at the reporting date using the
event(s) had an impact on the estimated date to determine whether there is Projected Unit Credit (PUC) method as
future cash flows of that asset that can any indication of impairment. If any recommended by LKAS 19 - ‘Employee
be estimated reliably. such indication exists, then the asset’s Benefits’. Such actuarial valuations will
recoverable amount is estimated. An be carried out every year.
Objective evidence that financial impairment loss is recognised if the
assets are impaired includes default or carrying amount of an asset exceeds its The liability is not externally funded. All
delinquency by a debtor, restructuring recoverable amount. Actuarial gains or losses are recognised
of an amount due to the company immediately in the other comprehensive
on terms that the Company and the (k) Employee Benefits income. Under the Payment of Gratuity
Group would not consider otherwise, Act No. 12 of 1983, the liability to an
indications that a debtor or issuer will (i) Defined Contribution Plans employee arises only on completion of
enter bankruptcy, adverse changes Employees’ Provident Fund and five-years of continued service.
in the payment status of borrowers Employees’ Trust Fund (EPF & ETF) are
or issuers, economic conditions recognised as incurred. (l) Provisions
that correlate with defaults or the Provisions are recognised when the
disappearance of an active market for a Employees are eligible for Employees’ Company and the Group have a present
security. Provident Fund contributions and obligation (legal or constructive) as
Employees’ Trust Fund contributions a result of a past event, it is probable
(ii) Impairment Losses on Financial in line with respective statutes and that an outflow of resources embodying
Assets Carried at Amortised regulations. economic benefits will be required
Cost to settle the obligation and a reliable
The Company and the Group consider The Company and the Group contribute estimate can be made of the amount
evidence of impairment for financial 3% of gross emoluments of employees of the obligation. Where the Company
assets measured at amortised cost to the Employees’ Trust Fund. and the Group expect some or all
(loans and receivables) at specific asset Company contributes 15 % & subsidiary of a provision to be reimbursed, for
level. All individually significant assets contributes 12 % of gross emoluments example under an insurance contract,
are assessed for specific impairment. of employees to Employees’ Provident the reimbursement is recognised as
Fund. a separate asset but only when the
An impairment loss in respect of a reimbursement is virtually certain. The
financial asset measured at amortised expense relating to any provision is
cost is calculated as the difference presented in the income statement net
between its carrying amount and the of any reimbursement.
present value of the estimated future
If the effect of the time value of (ii) Interest Income the running of the business and in
money is material, provisions are Interest income is recognised on an maintaining the property, plant and
discounted using a current pre-tax rate accrual basis. equipment in a state of efficiency has
that reflects, where appropriate, the been charged to the income statement.
risks specific to the liability. Where (iii) Rental Income For the purpose of presentation of the
discounting is used, the increase in the Rental income is recognised on an income statement, the “function of
provision due to the passage of time is accrual basis. expenses” method has been adopted,
recognised as a finance cost. on the basis that it presents fairly the
(iv) Dividend Income elements of the Company and Group’s
(m) Contingent Assets and Dividend income is recognised on a cash performance.
Contingent Liabilities basis.
All contingent liabilities are disclosed as (p) Guaranteed Rental
a note to the financial statements unless (v) Other Gains and Losses Losses, if any, of guaranteed rentals will
the outflow of resources is remote. Net gains and losses of a revenue be accounted for in the year in which
A contingent liability recognised in nature arising from the disposal of they occur. A provision is recognised if
a business combination is initially property, plant and equipment and the best estimate indicates a loss.
measured at its fair value. Subsequently, other non current assets, including
it is measured at the higher of: investments, are accounted for in the (q) Segment Reporting
The amount that would be income statement, after deducting from A segment is a distinguishable
recognised in accordance with the the proceeds on disposal, the carrying component of the Company that is
general guidance for provisions amount of such assets and the related engaged either in providing products or
above (LKAS 37) or selling expenses. services which are subject to risks and
The amount initially recognised rewards that are different from those of
less, when appropriate, cumulative (vii) Other Income other segments. Group had identified
amortisation recognised in Other income is recognised on an to segments as hotels and property.
accordance with the guidance for accrual basis. Net gains and losses of a The details of the segmental revenue is
revenue recognition (LKAS 18) revenue nature arising from the disposal disclosed in the Note 37 to the financial
of property, land and equipment and statements.
Contingent assets are disclosed, where other non current assets, including
inflow of economic benefit is probable investments, are accounted for in the (r) Income Tax
but not virtually certain. income statement, after deducting from Income tax expenses comprise
the proceeds on disposal, the carrying of current and deferred tax. It is
(n) Revenue Recognition amount of such assets and the related recognised in profit or loss except items
Revenue is recognised to the extent that selling expenses. Gains and losses recognised directly in equity or in OCI.
it is probable that the economic benefits arising from activities incidental to the
will flow to the Group, and the revenue main revenue generating activities and (i) Current Tax
and associated costs incurred or to those arising from a group of similar Current tax comprises the expected tax
be incurred can be reliably measured. transactions, which are not material are payable or receivable on the taxable
Revenue is measured at the fair value of aggregated, reported and presented income or loss for the year and any
the consideration received or receivable, on a net basis. Any losses arising from adjustment to the tax payable or
net of trade discounts and value added guaranteed rentals are accounted for receivable in respect of previous years.
taxes, after eliminating sales within the in the year of incurring the same. A The amount of current tax payable or
Group. The following specific criteria are provision is recognised if the projection receivable is the best estimate of the tax
used for recognition of revenue: indicates a loss. amount expected to be paid or received
that reflects uncertainty related to
(i) Income from Hotel/Restaurants (o) Expenditure Recognition income taxes, if any. It is measured
Revenue is recognised on the rooms Expenses are recognised in the income using tax rates enacted or substantively
occupied on daily basis and food and statement on the basis of a direct enacted at the reporting date.
beverages and hotel related sales are association between the cost incurred Current tax assets and liabilities are
accounted for at the time of sale. and the earning of specific items of offset only if certain criteria are met.
income. All expenditure incurred in

The subsidiary company is liable for s) Events after the Reporting The employee remuneration expense
taxation at a rate of 12% in terms of Period resulting from the John Keells
Section 46(1) of the Inland Revenue All material events after the reporting Holdings PLC’s share option scheme
Act No.10 of 2006 and amendments date has been considered and to the employees of Asian Hotels and
thereto, on its profits derived from appropriate adjustments or disclosures Properties PlC is recognised in the
“promotion of tourism”. have been made in the respective notes income statement of the company. This
to the Financial Statements. transaction does not result in a cash
In accordance with BOI agreement outflow to the company and expense
dated 11th March 1994 the profits and (t) Cash Flow Statement recognised is met with a corresponding
income of the company were exempt The Cash Flow Statement has been equity reserve increase, thus having no
from taxation until 2014 and at the prepared using the “Indirect Method” impact on the Statement of Financial
expiry of said period the following of preparing Cash Flows in accordance Position (SOFP). The fair value of
options were available for the Company. with the Sri Lanka Accounting Standard the options granted is determined by
LKAS 7. The cash and cash equivalent the John Keells Holdings PLC using
(a) Income tax payable for the year of include cash in-hand, balances with and option model and the relevant
assessment shall be computed at 2% banks and money at call and short details are communicated by the John
of the turnover of the Company or; notice. Keells Holdings PLC to all applicable
(b) To adapt the provisions of the Inland subsidiary companies.
Revenue Laws for the time being (u) Directors’ Responsibility
imposed The Board of Directors is responsible for (w) New Accounting Standards not
the preparation and presentation of the Effective at the
The Board of the Company resolved to Financial Statements. This is more fully Reporting Date
compute the income tax payable at 2% described under the relevant clause in The following SLFRSs have been
of the turnover of the company with the Directors’ Report. issued by the Institute of Chartered
effective from 01st April 2014. Accountants of Sri Lanka (CA Sri Lanka)
The Group is liable for Income Tax on (v) Share Based Payments that have an effective date in the
any other income at 28%. In accounting for employee future and have not been applied in
remuneration in the form of shares, preparing these Financial Statements.
(ii) Deferred Taxation SLFRS 2 – Share based payments, is Those SLFRSs will have an effect on
Deferred taxation is provided using effective for the Company’s parents the accounting policies currently
the Statement of Financial Position entity John Keells Holdings Plc, from the adopted by the Company and may
liability method providing for temporary financial year beginning 2013/14. have an impact on the future Financial
difference between the carrying amount Statements.
of assets and liabilities for financial Employees of the company receive
reporting purposes and the amounts remuneration in the form of share i) SLFRS 9 - ‘Financial
used for taxation purposes. The amount based payment transactions, whereby Instruments’
of deferred tax provided is based on employees render services as SLFRS 9, published in July 2014,
the expected manner of realisation or consideration for equity instruments of replaces the existing guidance in LKAS
settlement of the carrying amount of the Parent entity John Keells Holdings 39 financial Instruments: Recognition
assets and liabilities using tax rates PLC (equity settled transactions). and Measurement. SLFRS 9 includes
enacted or substantively enacted by The cost of the employee services revised guidance on the classification
the reporting date. Deferred tax assets received in respect of the shares or and measurement of financial
including those related to tax effects of share options granted is recognised in instruments, including a new expected
income tax losses and credits available the income statements over the period credit loss model for calculating
to be carried forward, are recognised that employees provide services, from impairment on financial assets, and
only to the extent that it is probable that the time when the award is granted up the new general hedge accounting
future taxable profit will be available to the vesting date of the options. The requirements. It also carries forward
against which the asset can be utilised. overall cost of the award is calculated the guidance on recognition and
Deferred tax assets are reviewed at each using the number of share options derecognition of financial instruments
reporting date and are reduced to the expected to vest and the fair value of from LKAS 39.
extent that is no longer probable that the options at the date of grant.
the related tax benefit will be realised.
SLFRS 9 is effective for annual reporting

periods beginning on or after 1st
January 2018, with early adoption
permitted.
The company is assessing the potential

impact on it’s financial statements
resulting from the application of IFRS 9.

ii) SLFRS 15 – ‘Revenue from
Contracts with Customers’
SLFRS 9, published in July 2014,
replaces the existing guidance in LKAS
39 financial Instruments: Recognition
and Measurement. SLFRS 9 includes
revised guidance on the classification
and measurement of financial
instruments, including a new expected
credit loss model for calculating
impairment on financial assets, and
the new general hedge accounting
requirements. It also carries forward
the guidance on recognition and
derecognition of financial instruments
from LKAS 39.SLFRS 9 is effective for
annual reporting periods beginning on
or after 1st January 2018, with early
adoption permitted.
The company is assessing the potential

impact on it’s financial statements
resulting from the application of IFRS
15.However possible impacts are
limited.
III) Agriculture: Bearer Plants

(Amendments to LKAS 16
and LKAS 41)
These amendments require a bearer
plant, defined as a living plant, to be
accounted for as Property, Plant and
Equipment and included in the scope of
LKAS 16 Property, Plant and Equipment,
instead of LKAS 41 Agriculture. The
amendments are effective for annual
reporting periods beginning on or after
1 January 2016, with early adoption
permitted.
The group doesn’t have any bearer

plants.

5. Revenue
GROUP COMPANY
Rs.’000
Gross Revenue 9,023,500 9,095,286 6,240,242 5,951,652

Value Added Tax (956,807) (1,015,134) (657,238) (657,572)
Net Revenue 8,066,693 8,080,152 5,583,004 5,294,080
6. Dividend Income
GROUP COMPANY
Rs.’000
Dividend from Subsidiary (Trans Asia Hotels PLC) - - 156,281 273,493

- - 156,281 273,493
7. Other Operating Income

GROUP COMPANY
Rs.’000
Exchange Gain 11,862 13,386 10,062 7,213

Profit/(Loss) on Disposal of Property, Plant & Equipment (1,686) 434 (5,223) (1,959)
Car Park Income 21,396 19,949 21,396 19,949
Promotional Income 19,662 20,674 19,662 20,674
Taxi Line Commission 8,295 9,445 8,295 9,445
Sundry Income 17,210 16,635 16,792 15,201
76,739 80,523 70,984 70,523
8. Finance Cost
GROUP COMPANY
Rs.’000
Interest expense on long term borrowings 5,234 - - -

Exchange Loss on long term borrowings 41,550 - - -
Finance cost on other financial instruments 290 190 - -
47,074 190 - -
9. Finance Income
GROUP COMPANY
Rs.’000
Interest income on a loan to employees 1,818 2,028 1,818 2,028

Income from short term investments 154,892 197,930 148,220 163,018
156,710 199,958 150,038 165,046
10. Profit Before Tax

GROUP COMPANY
For the year ended 31st March Note 2016 2015 2016 2015
Rs.’000
Profit Before Tax is stated after charging all expenses

including the following
Remuneration to Executive Directors 58,569 59,211 58,569 59,211
Remuneration to Non-Executive Directors 11,700 10,335 5,400 4,770
Remuneration to Auditors
Audit 1,595 1,567 1,000 1,000
Audit related service - fee 169 190 169 133
Defined benefit plan cost 30 47,429 44,846 27,762 25,437

Defined contribution plan cost - EPF and ETF 134,180 124,544 91,448 81,573
Staff Expenses 1,364,341 1,261,818 858,986 784,200
Depreciation of Property, Plant and Equipment 14-14.2 512,585 482,938 307,741 283,110
Amortisation Lease Hold Property 15 12,404 12,404 - -
Donations 27,667 26,932 23,564 16,089
Amortisation of Intangible Assets 17 1,359 3,207 340 294
Impairment losses on Trade and other receivables 23 (6,280) 3,091 (6,434) 460
11. Income Tax Expense

GROUP COMPANY
Rs.’000
Current income tax

Current tax charge 11.1 187,244 229,372 154,647 153,164
Provision for Deferred tax 11.2 4,180 3,436 - -
10% Withholding tax on inter company dividends 11.1 17,365 30,388 - -
208,789 263,196 154,647 153,164
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% (2015 - 28%).
In accordance with BOI agreement dated 11th March 1994 the profits and income of the company were exempt from taxation
until year 2014, subsequent to the tax exemption period, based on the option available the Board of Directors of the Asian
Hotels and Properties PLC (Company) resolved to compute the income tax payable at 2% of the turnover of the company with
effective from 1st April 2014.
Income tax of Asian Hotels and Properties PLC (Company) on other income has been provided at the normal tax rate of 28%
(2015 -28%).

11.1 Reconciliation between Income Tax Expense and the Product of Accounting Profit

For the year ended 31st March 2016 2015
In Rs.’000s
Company
Revenue 5,649,153 5,364,050
Tax on 2% 112,983 107,281
Standard rate 28% on other income 41,716 45,857
Under or over provision on Income tax previous year (52) 26
Current Income tax charge 154,647 153,164

Subsidiary
Reconciliation between Income Tax Expense and the Product of Accounting Profit
Profit before tax 357,572 664,248
Profits not liable for tax (893) (1,014)
Accounting profit chargeable to income taxes 356,679 663,234
Tax effect on disallowable expenses 52,820 93,768
Tax effect on aggregate Allowable expenses 2,425 3,372
Tax effect on IP revaluation (18,468) (2,479)
Under or over provision on Income tax previous year - (13,337)

Income tax charged at
Standard rate - 28% 17,532 24,822
Concessionary rate of 12% 15,065 64,722
32,597 89,544
Under or Over provision on Income Tax previous year - (13,337)
Current Income tax charge 32,597 76,207

Group
Company 154,647 153,164
Subsidiary 32,597 76,207
Group Current Income tax charge 187,244 229,371
11.2 Provision for Deferred Tax

GROUP COMPANY
Rs.’000
Deferred Tax arising from

Accelerated Depreciation for tax purposes 5,212 4,064 - -
Employment Benefits (1,031) (628) - -
Deferred Tax Charge - Income Statement 4,180 3,436 - -
Impact of Acturial adjustment on gratuity - OCI (520) 215 - -
Total Deferred Tax Charge 3,659 3,651 - -
Deferred Tax Liability has been computed taking into consideration the tax rate of 12% applicable for the Toursim Industry,
for the subsidiary, TAH PLC.
No deferred tax is applicable to the AHPL as Company is paying tax as a percentage of total revenue.
12. Earnings Per Share

The Basic Earnings per Share is based on the profit attributable to Asian Hotels & Properties PLC.
GROUP COMPANY
In Rs.’000s
Net Profit for the Year 1,841,133 1,756,629 1,875,522 1,806,734

Number of Ordinary Shares 442,775 442,775 442,775 442,775
Basic Earnings Per Share (Rs.) 4.16 3.97 4.24 4.08
13. Dividend Per Share

GROUP COMPANY
Rs.’000
Final dividend paid- 2013/2014 - 1,328,326 - 1,328,326

Interim Dividend Paid-2014/2015 - 442,775 - 442,775
Final dividend paid - 2014/2015 1,328,326 - 1,328,326 -
Interim Dividend Paid-2015/2016 1,106,938 - 1,106,938 -
Total Dividends 2,435,264 1,771,101 2,435,264 1,771,101
Dividend Per Share (Rs.) 5.50 4.00 5.50 4.00

14. Property, Plant And Equipment
Outdoor Plant & Base Furniture, Motor Capital Total Total
As at 31 st March Freehold Buildings Carpark Machinery Stock & Fittings & Vehicles Work In 2016 2015
Land Development Circulating quipment Progress
In Rs. ‘000s
14.1 Group
Cost or Valuation
At the Beginning of the Year 11,231,270 6,806,540 11,783 1,346,174 1,426,674 1,940,385 80,575 414,724 23,258,126 21,004,482
Additions - 459,645 - 40,488 170,530 152,427 267 313,034 1,136,392 1,009,938

Disposals - (24,795) - (35,535) (96,481) (62,887) (136) - (219,835) (261,171)
Revaluations Gain - - - - - - - - - 1,687,240
Depreciation adjustment on Revaluation - - - - - - - - - (160,097)
Transfers to investment property - - - - - - - - - (22,267)
Transfers from work in progress - 480,133 - 111,237 680 25,890 - (617,940) - -
At the end of the Year 11,231,270 7,721,523 11,783 1,462,364 1,501,403 2,055,815 80,706 109,818 24,174,682 23,258,125
Accumulated Depreciation
At the Beginning of the Year - 87,998 5,501 627,232 915,537 892,583 25,354 - 2,554,205 2,493,095
Charge for the Year - 134,094 1,178 54,444 176,227 137,918 8,725 - 512,585 482,938
Disposals - (1,018) - (33,816) (91,365) (56,824) (106) - (183,128) (241,667)
Revaluations - - - - - - - - - (160,097)
At the end of the Year - 221,074 6,679 647,860 1,000,399 973,677 33,973 - 2,883,662 2,554,205
Carrying Value
125
As at 31st March 2016 11,231,270 7,500,449 5,104 814,504 501,004 1,082,138 46,733 109,818 21,291,020 -
As at 31st March 2015 11,231,270 6,718,542 6,282 718,942 511,137 1,047,802 55,221 414,724 - 20,703,920
Note-14.1. a. Freehold Land and Buildings of the Group were valued by M/s. P.B. Kalugalagedara & Associates, an independent Chartered Valuer
as at 31st March 2015, 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.4,945 million.
(Rs.4,368 million in 2015) Had the revalued Land of Group been included at cost, the carrying value of the said asset would amount to
Rs.470 million. (Rs.470 million in 2015).
(Details of the fair Value hierarchy is given in note 14.3).
Note-14.1. b. Details of Groups’ Land and Building stated at valuation are indicated below
Property Land /Building Extent Location
Free hold Land and Building

Company Land 1 A08 - R0- P05.08 No 77, Galle Road, Colombo 03
Building- Stage(1) 348,818 Sq Ft No 77, Galle Road, Colombo 03
Building- Stage (11) & (111) 299,975 Sq Ft No 77, Galle Road, Colombo 03
Investment Properties
Company Building 1 145,196 Sq Ft No 89, Galle Road, Colombo 03
Subsidiary Building 1 55,548 Sq Ft No. 117, Sir Chittampalam A. Gardiner

Mawatha, Colombo 02.
Land A01 - R02- P30.0 No. 117, Sir Chittampalam A. Gardiner
Mawatha, Colombo 02.
Lease hold Properties

Subsidiary Building 1 316,067 Sq Ft No. 115, Sir Chittampalam
A. Gardiner Mawatha, Colombo 02.
Land A05 - R02- P34.28 No. 115, Sir Chittampalam
A. Gardiner Mawatha, Colombo 02.
Note-14.1. c The Vessel of floating resturant of the Subsidiary has been classified under Motor Vehicles.
Note-14.1.d The cost of the fully depreciated assets in the Group which are still in use of the Company amounting
Rs. 949.97 million. (in 2015 Rs. 1,021.07 million).
Note-14.1.e There are no assets pledged that required to disclose in the Group.

14.2 Company
Freehold Buildings Outdoor Plant & Base Furniture, Motor Capital Total Total
Land Carpark Machinery Stock & Fittings & Vehicles Work In 2016 2015
As at 31 st March Development Circulating Equipment Progress
In Rs. ‘000s
PROPERTY, PLANT AND EQUIPMENT

Cost or Valuation
At the Beginning of the Year 11,231,270 4,265,178 11,783 815,672 628,833 1,182,522 14,757 393,900 18,543,915 16,400,740
Additions - 20,148 - 12,191 107,574 101,343 267 306,721 548,245 838,093

Disposals - - - (16,906) (44,068) (52,792) (136) - (113,903) (199,794)
Revaluations Gain - - - - - - - - - 1,687,240
Depreciation adjustment on Revaluation - - - - - - - - - (160,097)
Transfers from work in progress - 472,723 - 110,565 735 25,835 - (609,858) - -
At the end of the Year 11,231,270 4,758,048 11,783 921,521 693,074 1,256,908 14,888 90,764 18,978,256 18,543,915
Accumulated Depreciation
At the Beginning of the Year - - 5,501 369,587 347,811 525,104 11,385 - 1,259,388 1,347,141
Charge for the Year - 84,149 1,178 33,914 98,073 87,446 2,981 - 307,741 283,110
Disposals - - - (15,578) (41,293) (47,775) (106) - (104,751) (190,702)
Revaluations - - - - - - - - - (160,097)
Transfers to investment property/other - - - - - - - - - (20,064)
At the end of the Year - 84,149 6,680 387,923 404,590 564,775 14,261 - 1,462,378 1,259,388
Carrying Value
127
As at 31st March 2016 11,231,270 4,673,899 5,103 533,598 288,483 692,133 628 90,764 17,515,878 -
As at 31st March 2015 11,231,270 4,265,178 6,282 446,085 281,022 657,418 3,372 393,900 - 17,284,527
Note-14.2.a Had the revalued Buildings of the company been included at cost, the carrying value of the said asset would amount to Rs.3,587 million. (Rs.3,188
million in 2015) Had the revalued Land been included at cost,the carrying value of the said asset would amount to Rs.470 million. (Rs.470 million
in 2015).
Note-14.2.b The cost of the fully depreciated assets which are still in use of the Company amounting Rs. 517.38 million. (in 2015 Rs. 467.19 million).
Note-14.2.c There are no assets pledged that required to disclose in the Company.
(The Company has completed construction of new human resource building and total cost incurred Rs:597,321,445).
14.3 Details of Group’s land, building and other properties stated at valuation are indicated below;
Method of Effective date Property

valuation of valuation valuer
Buildings on leasehold land of Open market value 31-Mar-13 P B Kalugalagedara,

Trans Asia Hotels PLC. method Chartered Valuation
Surveyor
Land and building of Summation method 31-Mar-15 P B Kalugalagedara,

Asian Hotels and Properties PLC. Chartered Valuation
Surveyor
(i) Fair Value Hierarchy

The fair value of property was determined by external independent property valuer having appropriate recognised
professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all properties has been categorised as level 03 based on the input to the valuation
technique used.
(ii) Valuation Technique and Significant Unobservable Inputs

The following table shows the valuation technique used in measuring the fair value of property, as well as the significant
unobservable inputs used:
Valuation Technique Significant Unobservable Inputs Interrelationship between Key

Unobservable Inputs and Fair Value
Measurements
Open market value method; Estimated open market price per square feet Possitive correlated sensitiviy
Summation method; Estimated Constructed cost per square feet Possitive correlated sensitiviy
15. Leasehold Property

Group
As at 31st March 2016 2015
In Rs. ‘000s
At the beginning of the year 806,260 818,664

Amortisation for the year (12,404) (12,404)
At the end of the year 793,856 806,260

15. Leasehold Property (contd.)

Leasehold property is the land which the hotel is located. The land is on a 99 year long term lease agreement entered with The
Urban Development Authority, Sri Lanka, which commenced from 7th August 1981. The leasehold property is being amortised
on a straight line basis over 94 years which commenced from 1st April 1986.
Land extent Lease period Group

Property (in acres)
In Rs. ‘000s 2016 2015
Trans Asia Hotels PLC. Colombo 7.65 99 years from 793,856 806,260
07-08-1981
793,856 806,260
16. Investment Property

Group Company
As at 31st March 2016 2015 2016 2015
In Rs. ‘000s
At the beginning of the year 3,935,508 3,904,514 2,156,608 2,146,264

Additions 4,827 - 4,827 -
Transfers - 2,202 - 2,202
Change in fair value during the year 224,665 28,792 98,565 8,142
At the end of the year 4,165,000 3,935,508 2,260,000 2,156,608
16.1 Valuation details of investment property

Investment properties of the Group were valued by a qualified professional valuer as at 31-03-2016, 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
31st March 2016.
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 2016.
Changes in the values are recognised as gains in profit or loss. All gains are unrealised.
Rental Income earned from Investment Property by the Company and Group amounted to Rs. 331 million (2015 Rs.309
million) and Rs. 391 million (2015 Rs.370 million) respectively. Direct Operating Expenses incurred by the Company and
Group amounted to Rs. 89 million (2015 Rs.72 million) and Rs. 96 million (2015 Rs.78 million) respectively.
The significant assumptions used by the valuer in the years 2015 and 2016 are as follows;
As at 31 March
Property Method of Valuation
Asian Hotels and Properties PLC. Income capitalisation

Crescat Boulevard, Colombo 3 approach
Trans Asia Hotels PLC. Open market value

Commercial Centre, Colombo 2 based on annual rent
16.2
(i) Fair Value Hierarchy
The fair value of property was determined by external independent property valuer having appropriate recognised
professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all properties has been categorised as level 03 based on the input to the valuation
technique used.
(ii) Valuation Technique and Significant Unobservable Inputs

The following table shows the valuation technique used in measuring the fair value of property, as well as the significant
unobservable inputs used:
Valuation Technique Significant Unobservable Inputs Interrelationship between Key

Unobservable Inputs and Fair Value
Measurements
Income capitalisation approach Income capitalisation rate Positively correlated sensitivity
Open market value based on Estimated market rental rate Positively correlated sensitivity
annual rent per square feet and rental period
17. Intangiable Assets

GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs. ‘000s
Computer Software
Cost
At the Beginning of the Year 34,226 33,426 9,009 9,009
Additions 1,398 800 1,155 -
Disposals (461) - (461) -
At the End of the Year 35,163 34,226 9,703 9,009
Accumulated Amortisation
At the Beginning of the Year 31,368 28,161 8,301 8,007
Amortisation 1,359 3,207 340 294
Disposals (461) - (461)
At the End of the Year 32,266 31,368 8,180 8,301
Carrying value
As at 31 March 2,897 2,858 1,523 708

18. Investments in Subsidiaries

COMPANY
As at 31st March 2016 2015
In Rs. ‘000s
Carrying value
660,045
Investments in subsidiaries 660,045
660,045 660,045
2016 Number of Effective Cost of Market

shares holding % Investment Value
Trans Asia Hotels PLC.

At Cost (Quoted)” 86,823,028 43.41% 660,045 6,937,160
2015 Number of Effective Cost of Market

shares holding % Investment Value
Trans Asia Hotels PLC.

At Cost (Quoted)” 86,823,028 43.41% 660,045 8,161,365
AHPL consider TAH as a subsidiary since the AHPL has power and exposure, right to variable return and ability to use its power
over TAH, based on the factors mentioned below even though it has only 43.41% ownership.
It is AHPL that strategizes the marketing, positioning and sales of TAH, thereby, affecting the operating return, in addition to the
Dividend. This duly approved Operating Model established for AHPL and TAH is driven by AHPL as the lead.
AHPL is exposed to variable returns from its involvement with TAH as a result of its performance. In addition AHPL has
quantitative, and qualitative, returns that are not available to other interest holders, due to its ability to use TAH’s assets in
combination with its own to achieve economies of scale, cost savings and other synergies in their mutual interest.
In addition to having the lead of the Operating Model, AHPL also has the right to nominate directors to the TAH board. JKH had
now assigned the power to nominate Directors to TAH, to AHPL.
NCI in subsidiary
The following table summarizes the information relating to the Group’s subsidiary that has NCI.
NCI percentage 56.59% 56.59%
2016 2015
Non current assets 3,668,820 3,401,673

Current assets 391,215 507,743
Non current liabilities (465,861) (255,255)
Current liabilities (366,769) (265,684)
Net assets 3,227,405 3,388,477
Carrying amount of NCI 3,227,405 3,388,477
Revenue 1,405,520 1,576,638

Profit 181,538 330,828
Other comprehensive income (2,160) 891
Total Comprihensive income allocated to NCI 179,378 331,719
Cash flow from operating activities 119,069 395,154

Cash flow from investing activities (329,277) (90,453)
Cash flow from financing activities 792 (396,130)
Net increase in cash and cash equivalents
(209,416) (91,429)
19. Long Term Investments

GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs. ‘000s
Sri Lanka Hotel & Tourism 100 100 100 100

(-) 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.

20. Non Current Financial Assets

GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs. ‘000s
20.1 Loans to executives

At the beginning of the year 17,170 22,457 12,288 15,617
Loans granted / (transfers) 26,451 10,075 16,751 4,525
Recoveries (13,823) (15,362) (7,536) (7,854)
At the end of the year 29,798 17,170 21,503 12,288
Receivable within one year 5,208 4,997 3,670 3,852

Receivable between one and five years 24,590 12,173 17,833 8,436
29,798 17,170 21,503 12,288
21. Other Non Current Assets

GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Prepaid cost of Staff Motor Vehicle Loan

22. Inventories
GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Food & Beverage 85,624 80,167 55,271 53,833

General 12,302 10,899 9,916 8,748
Diesel/ Furnace/ Gas Stock 14,231 14,069 7,837 8,951
Engineering Stock 22,244 23,246 13,804 14,880
Inventory Slow moving Provision (8,835) (8,045) - -
23. Trade and Other Receivables

GROUP COMPANY
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Trade receivables 698,840 616,048 308,454 316,642

Other receivables 106,160 50,560 68,788 22,459
Less: Impairment (22,343) (28,623) (10,438) (16,874)
782,657 637,985 366,804 322,227
Impairment
Provision/(Reversal) for the year (6,280) 3,549 (6,436) 508
Written off during the year - (458) - (48)
24. Other Current Assets

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Prepayments and non cash receivables 57,262 77,592 26,848 50,344

WHT Recoverable 16,497 20,438 14,793 16,240
ESC Recoverable - 3,284 - 3,284
Advance to Creditors 48,262 30,761 34,307 18,962
25. Short Term Investments

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Fixed & Call deposits 1,198,681 2,475,667 1,198,681 2,239,351

26. Stated Capital

Group Company
2016 2015 2016 2015
Number Value of Number Value of Number Value Number Value of
of shares of of of of of shares
As at 31st March shares shares shares shares shares shares
In ‘000s Rs. Rs. Rs. Rs.
At the end of the year 442,775 3,345,117 442,775 3,345,117 442,775 3,345,117 442,775 3,345,117
27. Other Components of Equity

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Revaluation reserve 27.1 12,753,854 12,764,765 12,278,424 12,278,424

Share based payments 27.2-27.3 70,334 43,991 67,375 41,399
27.1 Revaluation reserve

At the Beginning of the Year 12,764,765 11,094,883 12,278,424 10,597,631
Transferred to Revenue Reserve - (6,447) - (6,447)
Transferred to Revenue Reserve (10,911) (10,911) - -
Revaluation gain on Freehold Land & Buildings - 1,687,240 - 1,687,240
At the End of the Year 12,753,854 12,764,765 12,278,424 12,278,424

27.2 Share-based payment plans -Group

Employee Share Option Scheme
Under the John Keells Group’s Employees Share Option scheme (ESOP), share options of the parent are granted to senior
executives of the Company 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.
The contractual term for each option granted is five years. There are no cash settlement alternatives. The Group does not have
a past practice of cash settlement for these share options.
JKH share option scheme is managed centrally by the John Keells Holdings PLC , following disclosures are based on
information provided by the parent.
The expense recognised for employee services received during the year is shown in the following table:
2016 2015
At the Beginning of the Year 47,370 17,966

Expense arising from equity-settled share-based payment transactions 26,820 29,404
Total expense arising from share-based payment transactions 26,820 29,404
At the End of the year with non- contolling interest 74,190 47,370
At the End of the year 70,334 43,991
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:
2016 2015
No. WAEP No. WAEP
Outstanding at 1 April 1,016,128 253.16 598,385 253.16

Granted during the year 447,197 171.25 562,227 229.93
Lapses/Forfeited during the year (34,143) 122.01 - -
Adjusted - sub division during the year 208,543 197.28 - -
Adjusted - Warrents during the year 23,763 219.03 - -
Exercised during the year - - - -
Expired during the year - - (118,985) 241.61
Transfers 6,316 140.58 (25,499) 253.16
Outstanding at 31 March 1,667,804 197.16 1,016,128 241.08
Exercisable at 31 March 432,166 212.51 151,125 253.16
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.
27.3 Share-based payment plans -Company

Employee Share Option Scheme
The expense recognised for employee services received during the year is shown in the following table:
2016 2015

Expense arising from equity-settled share-based payment transactions 25,976 26,929
Total expense arising from share-based payment transactions 25,976 26,929
At the End of the year 67,375 41,399
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:
2016 2016 2015 2015

No. WAEP No. WAEP
Outstanding at 1 April 945,184 253.16 495,466 -

Granted during the year 386,647 171.25 507,790 253.16
Lapses/Forfeited during the year (5,600) 85.63 - -
Adjusted - sub division during the year 187,663 199.11 - -
Adjusted - Warrents during the year 22,055 219.03 - -
Exercised during the year - - - -
Expired during the year - - (32,573) 241.61
Transfers (18,087) 105.44 (25,499) 253.16
Outstanding at 31 March 1,517,862 198.67 945,184 253.16
Exercisable at 31 March 400,141 212.63 123,867 253.16
28. Interest Bearing Borrowings

Group
As at 31st March 2016
In Rs.’000s

Loans obtained 401,400
Translation /Exchange difference 41,550
At the end of the year 442,950
Repayable within one year 83,053

Repayable after one year
Repayable between one and five years 359,897
At the end of the year 442,950

Security and repayment terms
2016
Lending Nature of Interest Repayment Security Rs.000 Rs.000
institution facility rate terms Face carrying
value value
Hatton National Bank Term Loan (USD) 2.87% fixed for Capital repayment in 16 equal None 442,950 442,950
PLC first year and quarterly installments of USD
pricing to be 187,500 after initial grace
reviewed period of one year. Interest to
annually be serviced monthly. Interest
to be serviced in the grace
period as well
29. Deferred Taxation

Group
As at 31st March Note 2016 2015
In Rs.’000s

Charge for the year 11.2 3,659 3,651
At the end of the year 344,721 341,062
The closing Differed Tax liability relates to the followings:
Revaluation of Land and Buildings to Fair Value 47,960 47,960

Accelerated Depreciation for Tax Purpose 310,993 306,302
Employee Benefit Liability (14,232) (13,200)
344,721 341,062
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.
30. Employee Benefit Liabilities

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s

Current service cost 23,242 20,510 14,575 12,824
Interest cost on benefit obligation 24,187 24,336 13,187 12,613
Payments (29,076) (23,363) (12,860) (8,802)
(Gain)/Loss arising from changes in assumptions 13,108 (1,215) 8,771 574
Transfers 816 371 - -
The employee benefit liability of the Company and Group is based on the actuarial valuations carried out as at 31st March
2016 by Mr. M. Poopalanathan, AIA, Messers. Actuarial & Management Consultant (Pvt) Ltd; a firm of professional actuaries.
The principal assumptions used in determining the cost of employee benefits were:
Group Company
2016 2015 2016 2015
Discount rate 10.50% 10.00% 10.50% 10.00%

Future salary increases 9.00% 8.00% 9.00% 8.00%
30.1 Sensitivity of assumptions used

If one percentage point change in the assumed discount rate would have the following effects:
In Rs.’000s
Discount rate Salary increment
2016 2016
Group Company Group Company
Increase by one percentage point 12,287 6,960 (14,333) (8,151)

Decrease by one percentage point (13,461) (7,602) 13,289 7,581
30.2 Maturity analysis of the payments

The following payments are expected on employee benefit liabilities in future years
2016 2015
Group Company Group Company
within the next 12 months 43,132 25,246 37,742 19,260

Between 1-2years 66,873 34,302 61,186 31,084
Between 2-5years 66,416 39,346 62,318 32,966
Between 5-10 years 71,160 41,425 58,136 36,039
Beyond 10 years 26,569 15,227 22,491 12,524
Total 274,150 155,546 241,873 131,873

31. Trade and Other Payables

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Trade Payables 194,594 193,680 124,877 124,058

Retention on Construction 32,571 45,762 32,571 45,762
Accrued Expenses 195,405 140,593 30,517 31,657
Other Creditors 346,252 302,295 265,062 232,652
32. Income Tax Liabilities

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s

Charge for the year 187,244 229,372 154,647 153,164
Payments and set off against refunds and credits (268,621) (196,999) (220,340) (89,610)
33. Other Current Liabilities

Group Company
As at 31st March 2016 2015 2016 2015
In Rs.’000s
Other tax payables 79,274 81,913 51,317 38,156

Banquet Advanced 208,667 155,611 128,483 95,553
Other Advanced 95,802 95,235 86,849 87,849
34. Related Party Disclosures

Group carried out transactions in the ordinary course of business with parties who are defined as related parties as per LKAS
24 “Related Party Disclosure”.
34.1 Parent and Ultimate Controlling Party

The Company’s Ultimate Parent Undertaking and controlling party is John Keells Holding PLC.
The amounts receivable from or payable to related parties as at 31st March 2016, are disclosed below,
34.2 Amounts due from related parties

Group Company
As at 31st March 2016 2015 2016 2015
In Rs. ’000s
Parent-John Keells Holdings PLC 5,662 1,303 768 56

Subsidiary-Trans Asia Hotels PLC - - 4,604 505
Companies under common control of JKH PLC 82,239 65,181 22,450 31,240
87,901 66,484 27,822 31,801
34.3 Amounts due to related parties

Parent-John Keells Holdings PLC 6,795 3,925 4,106 3,005
Subsidiary-Trans Asia Hotels PLC - - 319 76
Companies under common control of JKH PLC 105,994 107,546 76,098 82,890
112,789 111,471 80,523 85,971

34.4 Transactions with Related Parties

The Group and Company carried out transactions with the following related entities.
Group Company
In Rs.’000s
(a) Transactions with Parent Company

The company’s parent is John Keells Holdings PLC
Rendering /(Receiving) of services (42,601) (43,713) (27,350) (26,111)
Rent Received / (Paid) 25,142 37,529 - -
(b) Transactions with Subsidiary Companies

(Receiving) / Rendering of services - - 3,909 644
Rent received / (paid) - - - 536
Sales/(Purchases) of goods - - - (48)
(c) Transaction with companies Under common

control of JKH PLC
Rendering /(Receiving) of services (391,468) (457,103) (327,796) (409,464)
Rent received / (paid) 81,283 80,998 43,843 43,474
Sales / (Purchases) of goods (13,713) (11,310) (5,800) (3,332)
34.5 Transactions with Key Management Personnel

‘According to Sri Lanka Accounting Standard (LKAS) 24 - Related Party Disclosure, ‘Key Management Personnel’ are those
having authority and responsibility for planning, directing and controlling the activities of the entity. Accordingly, the
Directors (including Executive 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 has 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 dependant. A dependant is defined as anyone who depends on the
respective Director for more than 50% of his/her financial needs.
Group Company
In Rs.’000s
(i) Compensation of Key Management Personnel

Short-term employee benefits 71,133 69,546 64,833 63,981
Contributions to the provident fund 3,742 3,892 3,742 3,473
Share base payment 17,129 17,067 17,129 17,067
In addition to their salaries the Company provides non-cash benefits to the Key Management Personnel and contributes to a
post-employment defined benefit plan on their behalf. Directors’ emoluments are disclosed in Note 10 to the Financial
Statements.
35. Financial Instruments - Accounts Classification and Fair Values of the Group
35.1 Financial Assets and Liabilities by Categories
Financial assets and liabilities in the tables below are split into categories in accordance with LKAS 39.
Financial
liabilities

Financial assets by categories by categories
Loans and Financial Available Held-to- Total Financial
receivables assets at for-sale- maturity liabilities
fair value financial investments measured
through assets at amortised
profit or loss cost
As at 31 st March Note 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
In Rs. ‘000
Financial instruments in
non-current assets/
non-current liabilities
Other non-current financial
assets 20.1 24,590 12,173 - - - - - - 24,590 12,173 - -
Interest bearing borrowings 28 - - - - - - - - - - 359,897 -
142
current assets/
current liabilities
Trade and other receivables /
Payable 23-31 782,657 637,985 - - - - - - 782,657 637,985 768,822 682,330
Amounts due from / due to
related parties 34.2-34.3 87,901 66,484 - - - - - - 87,901 66,484 112,789 111,471
Other current financial
liabilities 33 - - - - - - - - - - 383,743 332,759
Current portion of borrowings 28 - - - - - - - - - - 83,053 -
Short term investments 25 1,198,681 2,475,667 - - - - - - 1,198,681 2,475,667 - -
Cash in hand and at bank 505,384 499,964 - - - - - - 505,384 499,964 - -
Bank overdrafts 176,733 116,728
Total 2,599,213 3,692,273 - - - - - - 2,599,213 3,692,273 1,885,037 1,243,288
The management assessed that the fair value of cash at bank, short term deposits, trade receivables, other payables, bank overdrafts, other current
financial liabilities and related party payble and receivable approximate their carrying amounts to its fair values largely due to the short term maturities
of these instruments. Accordingly the fair value hierarchy does not apply.

35. Financial Instruments - Accounts Classification and Fair Values of the Company
35.2 Financial Assets and Liabilities by Categories

Financial assets and liabilities in the tables below are split into categories in accordance with LKAS 39.
Financial
liabilities
Financial assets by categories by categories
Loans and Financial Available Held-to- Total Financial

receivables assets at for-sale- maturity liabilities
fair value financial investments measured
through assets at amortised
profit or loss cost
As at 31 st March Note 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
In Rs. ‘000
non-current assets
Other non-current financial
assets 20.1 17,833 8,436 - - - - - - 17,833 8,436 - -
current assets
Trade and other receivables/
Payable 23-31 366,804 322,227 - - - - - - 366,804 322,227 453,027 434,129
143
Amounts due from / due to

related parties 34.2-34.3 27,822 31,801 - - - - - - 27,822 31,801 80,523 85,971
Other current financial
liabilities 33 - - - - - - - - - - 266,649 221,558
Short term investments 25 1,198,681 2,239,351 - - - - - - 1,198,681 2,239,351 - -
Cash in hand and at bank 379,738 267,245 - - - - - - 379,738 267,245 - -
Bank overdrafts - - - - - - - - - - 93,162 59,829
Total 1,990,878 2,869,060 - - - - - - 1,990,878 2,869,060 893,361 801,487
The management assessed that the fair value of cash at bank, short term deposits, trade receivables, other payables, bank overdrafts, other current
financial liabilities and related party payable and recivable approximate their carrying amounts to its fair values largely due to the short term maturities
of these instruments. Accordingly the fair value hierarchy does not apply.
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, other current financial
liabilities and loans & borrowings. 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 the Company monitors how management 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, credit worthy 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 and
investments. 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
fulfill their obligations.

36.1.1 Risk Exposure
Credit risk is the risk of financial loss to the Group, if a customer or counterparty 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.
In Rs. ’000s 2016 2015

Risk exposure Group Notes Other Cash in Trade Short Amounts Total % of Other Cash in Trade Short Amounts Total % of
non hand and term due allocation non hand and term due allocation
current and other investments from current and other investments from
financial at bank receivables related financial at receivables related
assets parties assets bank parties
Deposits with bank 36.1.2 - - - 1,198,681 - 1,198,681 46% - - - 2,475,667 - 2,475,667 67%
Loans to executives 36.1.3 24,590 - 15,208 - - 39,797 2% 12,173 - 4,997 - - 17,170 0%
Trade and other receivables 36.1.4 - - 767,449 - - 767,449 30% - - 632,988 - - 632,988 17%
Amounts due from related parties 36.1.5 - - - - 87,901 87,901 3% - - - - 66,484 66484 2%
Cash in hand and at bank 36.1.6 - 505,384 - - - 505,384 19% - 499,964 - - - 499,964 14%
Total credit risk exposure 24,590 505,384 782,657 1,198,681 87,901 2,599,212 100% 12,173 499,964 637,985 2,475,667 66,484 3,692,273 100%
Total 24,590 505,384 782,657 1,198,681 87,901 - - 12,173 499,964 637,985 2,475,667 66,484
In Rs. ’000s 2016 2015

Risk exposure Company Notes Other Cash in Trade Short Amounts Total % of Other Cash in Trade Short Amounts Total % of
non hand and term due allocation non hand and term due allocation
current financial other investments from current and other investments from
assets and receivables related financial at receivables related
145
at bank parties assets bank parties
Deposits with bank 36.1.2 - - - 1,198,681 - 1,198,681 60% - - - 2,239,351 - 2,239,351 78%
Loans to executives 36.1.3 17,833 - 3,670 - - 21,502 1% 8,436 - 3,852 - - 12,288 1%
Trade and other receivables 36.1.4 - - 363,134 - - 363,134 18% - - 318,375 - - 318375 11%
Amounts due from related parties 36.1.5 - - - - 27,822 27,822 1% - - - - 31,801 31,801 1%
Cash in hand and at bank 36.1.6 - 379,738 - - - 379,738 20% - 267,245 - - - 267,245 9%
Total credit risk exposure 17,833 379,738 366,804 1,198,681 27,822 1,990,877 100% 8,436 267,245 322,227 2,239,351 31,801 2,869,060 100%
Total 17,833 379,738 366,804 1,198,681 27,822 1,990,877 100% 8,436 267,245 322,227 2,239,351 31,801 2,869,060 100%
36.1.2 Deposits with Bank

Deposits with bank mainly consist of REPO.
As at 31 March 2016, REPO comprise 100% (2015- 90%) and 100% (2015- 90%) for the group and company respectively were
rated “A+” or better.
Group Company
As at 31 March 2016 2015 2016 2015
In Rating % In Rating % In Rating % In Rating %
Rs. ’000s of total Rs. ’000s of total Rs. ’000s of total Rs. ’000s of total
Fitch ratings
AA 1,038,573 87% 2,055,620 83% 1,038,573 87% 1,819,304 0.81
AA- 160,108 13% 420,047 17% 160,108 13% 420,047 19%
Total 1,198,681 100% 2,475,667 100% 1,198,681 100% 2,239,351 100%
* rating agenceies
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

Group Company
2016 2015 2016 2015
In Rs. ’000s In Rs. ’000s In Rs. ’000s In Rs. ’000s
Neither past due nor impaired

148,128 222,653 100,486 49,322
Past due but not impaired

0-30 days 381,264 234,566 186,258 137,341
31–60 days 167,124 85,463 50,293 64,295
61–90 days 53,845 32,901 13,124 20,203
91–120 days 11,079 25,716 2,538 16,481
121–180 days 3,970 11,151 - 10,457
> 181 days 39,588 42,409 24,543 41,002

impaired - 11,749 - -
Gross carrying value 804,998 666,608 377,242 339,101
Less: impairment provision
Individually assessed impairment provision - - - -
Collectively assessed impairment provision (22,341) (28,623) (10,438) (16,874)
Total 782,657 637,985 366,804 322,227
The Group has obtained customer deposit from major customers by reviewing their past performance and credit worthiness.
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 parent, subsidiary & other related entities.
The Company balance consists of the balance from related entities.
36.1.6 Credit Risk Relating to Cash and Cash Equivalents

In order to mitigate settlement and operational risks related to cash and cash equivalents, The Group uses several banks with
acceptable rating for its deposits.
36.2 Liquidity Risk

Liquidity risk is the risk that will encounter difficulty in meeting the obligation associated with it’s financial liabilities that
are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far
as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to Group’s reputation. Group monitors the level of
expected cash inflows on trade and other receivable together with expected cash outflows on trade and other payables.
This excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of multiple
sources of funding including bank loans, overdrafts and over a broad spread of maturities.
36.2.1 Net Debt/(Cash)

Group Company
2016 2015 2016 2015
Short term investments 1,198,681 2,475,667 1,198,681 2,239,351

Cash in hand and at bank 505,384 499,964 379,738 267,245
Total liquid assets 1,704,065 2,975,631 1,578,419 2,506,596
Borrowings 359,897 - - -
Current portion of borrowings 83,053 - - -
Bank overdrafts 176,733 116,728 93,162 59,829
Total liabilities 619,683 116,728 93,162 59,829
Net debt (cash) (1,084,382) (2,858,903) (1,485,257) (2,446,767)
36.2.2 Liquidity Risk Management

The Group’s approach to managing liquidity is to as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
top’s reputation.
Group maintains a portion of its assets in highly liquid form in order to meet its contractual obligations during the normal
course of its operations.
Group monitors the level of expected cash flows on trade and other receivables together with expected cash outflow on trade
and other payables and it expected a significant portion of trade receivables as at the reporting date would mature within a
shorter period of time, given the historical trends, which enable to meet its contractual obligations.
Maturity Analysis
The table below summarises the maturity profile of the Group’s financial liabilities at 31st March 2016 based on contractual
undiscounted payments.
Group Within Between Between Between Between More than Total

1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years 2016
Interest bearing borrowings 83,053 89,974 89,974 89,974 89,974 - 442,950

Trade and other payables 768,822 - - - - - 768,822
Amounts due to related parties 112,789 - - - - - 112,789
Other current financial liabilities 383,743 - - - - - 383,743
Bank overdrafts 176,733 - - - - - 176,733
1,525,140 89,974 89,974 89,974 89,974 - 1,885,037
The table below summarises the maturity profile of the Group’s financial liabilities at 31 March 2015 based on contractual
Group Within Between Between Between Between More than Total


Bank overdrafts 116,728 - - - - - 116,728
1,243,288 - - - - - 1,243,288
Maturity Analysis
The table below summarises the maturity profile of the Company financial liabilities at 31 March 2016 based on contractual
Company Within Between Between Between Between More than Total


Bank overdrafts 93,162 - - - - - 93,162
893,361 - - - - - 893,361

36.2.2 Liquidity Risk Management (Contd.)

The table below summarises the maturity profile of the Company financial liabilities at 31 March 2015 based on contractual
Company Within Between Between Between Between More than Total


Bank overdrafts 59,829 - - - - - 59,829
801,487 - - - - - 801,487
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 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 Currency Risk

Foreign currency risk that the fair value or future cash flows of a financial instrument will fluctuate, due to changes in foreign
exchange rates. Group as at the reporting date except for loans and borrowings, do not hold significant ‘Financial Instruments’
denominated in currencies other than its functional / reporting currency, hence do not get significantly exposed to currency
risk from transaction of such balances in to the functional/reporting currency, which is Sri Lankan Rupees.
The bank loan obtained by TAH in US Dollar terms are matched with US Dollar receipts from customers. The annual
repayment of the US dollar loan for the following financial year is USD 562,500. The annual average US Dollar receipts of the
TAH is USD 800,000 approximately.
However, Group engages in transactions associated with foreign currencies in its ordinary course of operations, hence
exposed to currency risk
Across the industry, the hotel rates targeting the foreign tourists are quoted in US Dollar terms, However a fluctuation in the
exchange rate will not have a significant impact since majority of the quotes are converted to local currency at the point of
invoicing. The Group monitors fluctuations in foreign exchange rates and takes precautionary measures to revise its exchange
rates on a regular basis. In an attempt to mitigate the exposure to currency risk arising from its transactions.
36.3.2 Interest Rate Risk

Interest rate mainly arises as a result of Group having interest sensitive assets and liabilities which are directly impacted
by changes in the interest rates. Management monitors the sensitivities on regular basis and ensure risks are managed on a
timely manner.
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.
Group Company
2016 2015 2016 2015
Total liabilities 2,566,766 1,970,459 1,100,313 1,050,459

Less: cash and cash equivalents 1,704,065 2,975,631 1,578,419 2,506,596
Adjusted net debt 862,702 (1,005,172) (478,106) (1,456,137)
Total equity 26,536,641 27,425,415 21,493,593 22,097,733
Adjusted net debt to adjusted equity ratio 3.25% (3.67%) (2.22%) (6.59%)
37. Operating Segment Information

The Group has the following two strategic divisions, which are its reportable segments.
The following summary describes the operations of each reportable segment.
Reportable Segments Operations
Hotel Provide hoteling services to local and foreign tours

Property Property development and rent out premises
Revenue Hotels Property Group Total

For the year ended 31st March 2016 2015 2016 2015 2016 2015
In Rs. ’000s
External revenue 7,674,330 7,663,293 392,364 416,858 8,066,693 8,080,152

Inter segment revenue
Total Segment Revenue 7,674,330 7,663,293 392,364 416,858 8,066,693 8,080,152
Segment Operating Profits
Before Finance Expenses 1,846,041 2,399,625 364,109 195,919 2,210,150 2,595,544
Inter Company Dividends (156,281) (273,493) - - (156,281) (273,493)
Finance Expenses (47,074) (190) - - (47,074) (190)
Change in Fair Value of

Investment Properties
Company - - 98,565 8,142 98,565 8,142
Commercial Centre of Subsidiary - - 126,100 20,650 126,100 20,650
Profit Before Taxation 1,642,686 2,125,942 588,774 224,711 2,231,460 2,350,653
Income Tax Expense (179,721) (216,442) (11,703) (16,366) (191,424) (232,808)
Eliminations (17,365) (30,388) - - (17,365) (30,388)
Profit After Taxation 1,445,600 1,879,112 577,071 208,345 2,022,671 2,087,457
Minority Interest (8,261) (287,871) (173,277) (42,957) (181,538) (330,828)

Net Profit for the Year 1,437,339 1,591,241 403,794 165,388 1,841,133 1,756,629

37. Operating Segment Information (contd.)
Hotels Property Group Total

As at 31st March 2016 2015 2016 2015 2016 2015
In Rs. ’000s
Assets
Segment Assets 22,825,644 23,166,638 7,101,349 7,359,693 29,926,993 30,526,331
Eliminations - - - - (823,585) (1,130,457)
Total Assets 22,825,644 23,166,638 7,101,349 7,359,693 29,103,408 29,395,874
Liabilities
Segment Liabilities 2,558,663 2,259,116 171,680 181,787 2,730,343 2,440,903
Eliminations/Adjustments - - - - (163,577) (470,454)
Total Liabilities 2,558,663 2,259,116 171,680 181,787 2,566,766 1,970,449
38. Contingent Liabilities

There were no material contingent liabilities existing as at balance sheet date.
39. Capital Commitments

The Asian Hotels & Properties PLC Group had capital Expenditure contracted for Rs. 37.26 million as at 31st March 2016,
which were not provided for in the consolidated financial statements.
40. Events Subsequent to the Reporting Date and Other Matters
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. 2/- per share for the financial year ended 31st
March 2016.
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 2016.
41. Directors’ Responsibility Statement

The Board of Directors is responsible for the preparation and presentation of these Financial Statements. Please refer to the
page 104 for the Statement of Directors Responsibility for Financial Reporting.

CONSOLIDATED VALUE ADDED STATEMENT

2016 2015
In Rs. ‘000s
Revenue 8,066,693 8,080,152
Adjustment for Change in Fair Value of Investment Property 224,665 28,792

Adjustment for Finance Income 156,710 199,958
Adjustment for other Income 76,739 80,523
8,524,807 8,389,425
Less : Cost of Materials & Services

Purchased from external sources 3,103,367 3,086,488
Value Added 5,421,440 5,302,937
Distributed as follows: 2016 % 2015 %
To Employees as Remuneration 1,545,950 29% 1,431,208 28%

To the Government as Taxes 1,343,778 25% 1,280,470 24%
To the Providers of Capital
As Interest on Loans 5,524 0% 190 0%
As Minority Interest 181,538 3% 330,828 6%
To Shareholders as Dividends 1,106,938 20% 1,771,101 33%
Retained within the business
As Depreciation 513,944 10% 486,145 9%
As Reserves 723,767 13% 2,995 0%
5,421,440 100% 5,302,937 100%
2015/16 2014/15
To Employees as Remuneration 29% To Employees as Remuneration 28%

To the Government as Taxes 25% To the Government as Taxes 24%
As Interest on Loans 0% As Interest on Loans 0%
As Minority Interest 3% As Minority Interest 6%
To Shareholders as Dividends 20% To Shareholders as Dividends 33%
As Depreciation 10% As Depreciation 9%
As Reserves 13% As Reserves 0%
Information to Shareholders & Investors
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 2016
have been submitted to the Colombo Stock Exchange.
Distribution of Shareholdings
31.03.2016 31.03.2015
From To Number of Total Percentage Number of Total Percentage
Share Share Share Share Share of Share
Holders Holdings of Holdings Holders Holdings Holdings
1 - 1,000 2,206 598,168 0.1 2,156 604,747 0.1

1,001 - 10,000 757 2,623,991 0.6 761 2,696,983 0.6
10,001 - 100,000 168 4,778,719 1.1 164 4,529,410 1.0
100,001 - 1,000,000 22 5,226,759 1.2 22 5,276,208 1.2
1,000,001
and above 13 429,547,663 97.0 13 429,667,952 97.0
3,166 442,775,300 99.4 3,116 442,775,300 99.4
Analysis of Shareholders
Categories of Shareholders
31.03.2016 31.03.2015
Holdings % Holdings %
Number Number
Individual 14,038,169 3.17 13,413,413 3.03

Institutions 428,737,131 96.83 429,361,887 96.97
442,775,300 100.00 442,775,300 100.00
Resident 433,011,852 97.79 433,639,407 97.94

Non Resident 9,763,448 2.21 9,135,893 2.06
442,775,300 100.00 442,775,300 100.00
Public 94,923,108 21.44 94,923,108 21.44

Non Public* 347,852,192 78.56 347,852,192 78.56
442,775,300 100.00 442,775,300 100.00
*Includes shareholdings of Parent Company, Directors & Spouses.

For the Year Ended 31st March 2016 2015
Market Value
Highest Market Price per share Rs. 69.50 75.00
Lowest Market Price per share Rs. 44.50 58.00
Last Traded Market Price per share as at Rs. 47.80 63.00
Dividend Payments
Interim Dividend per Share Rs. 2.50 1.00
Final Dividend per Share Rs. 3.00 3.00
Top Twenty Shareholders

As at 31.03.2016 As at 31.03.2015
Name Share
Percentage Share Percentage
Holdings Holdings
John Keells Holdings PLC 347,824,192 78.56 347,824,192 78.56

Employees Provident Fund 43,552,236 9.84 43,552,236 9.84
Sri Lanka Insurance Corporation Ltd-Life Fund 10,055,900 2.27 10,055,900 2.27
Bank of Ceylon A/C Ceybank Unit Trust 9,688,818 2.19 9,537,403 2.15
Dr. S. Yaddehige 3,415,200 0.77 3,415,200 0.77
HSBC International Nominees Limited-MSNY-Bay Pond Partners L.P. 3,102,883 0.70 3,151,924 0.71
Bank of Ceylon-No. 2 A/C 2,583,400 0.58 2,583,400 0.58
Bank of Ceylon-No. 1 Account 2,367,741 0.53 2,367,741 0.53
Mr. M.J. Fernando 2,018,000 0.46 2,018,000 0.46
National Savings Bank 1,366,132 0.31 1,366,132 0.31
HSBC International Nominees Limited-MSNY-Bay Pond Investors (Bermuda) L.P 1,358,032 0.31 1,377,276 0.31
Bank of Ceylon A/C Ceybank Century Growth Fund 1,190,269 0.27 1,184,409 0.27
RBC Investor Services Bank-Alquity Sicav-Alquity Asia Fund 1,024,860 0.23 496,950 0.11
Employee Trust Fund Board 767,478 0.17 767,478 0.17
Mr. M. Mannawarajan 650,016 0.15 650,016 0.15
Richard Pieris & Co Ltd - Account No. 01 639,400 0.14 639,400 0.14
HSBC International Nominees Limited - SSBT- Destche Bank 350,000 0.08 - 0.00
Merrill J Fernando & Sons (pvt) Limited 220,000 0.05 220,000 0.05
Hatton National Bank PLC A/C no.05 (Trading Portfolio) 207,476 0.05 207,476 0.05
Merchant Bank of Sri Lanka Ltd A/C no 1 206,214 0.05 206,214 0.05
432,588,247 97.70 431,621,347 97.48
Five-YEAR FINANCIAL SUMMARY OF THE GROUP
2015/16 2014/15 2013/14 2012/13 2011/12
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Revenue
8,066,693 8,080,152 8,256,149 7,890,978 8,855,241
Profit After Taxation 2,022,671 2,087,457 2,818,511 3,097,386 2,502,458
Share Capital & Reserves

Stated Capital 3,345,117 3,345,117 3,345,117 3,345,117 3,345,117
Other Components of Equity 12,824,188 12,808,756 11,110,871 11,110,290 5,143,193
Revenue reserves 7,139,930 7,883,065 7,880,070 7,242,060 6,490,690
Shareholders’ Funds 23,309,235 24,036,938 22,336,058 21,697,467 14,979,000
Minority Interest 3,227,406 3,388,477 3,451,487 3,425,691 2,963,109

26,536,641 27,425,415 25,787,545 25,123,159 17,942,109
Assets & (Liabilities)

Current Assets 2,822,210 3,932,511 4,358,006 3,986,497 4,038,373
Current Liabilities (1,587,999) (1,387,524) (1,273,457) (1,128,402) (1,640,220)
Net Current Assets 1,234,211 2,544,987 3,084,549 2,858,095 2,398,153
Non Current Assets 26,281,198 25,463,363 23,261,641 22,789,890 16,011,297
Non Current Liabilities (978,767) (582,935) (558,645) (524,826) (467,341)
26,536,641 27,425,415 25,787,545 25,123,159 17,942,109
Ratio Analysis
Earnings per Share (Rs)* 4.16 3.97 5.42 5.63 4.85
Net Assets per Share (Rs) 52.64 54.29 50.45 49.00 33.83
Current Ratio (Times) 1.78 2.83 3.42 3.53 2.46
After Tax Return on Net Assets 7.90% 7.31% 10.73% 11.50% 14.35%
Dividend Per Share* 5.50 4.00 4.00 4.00 2.00
P/E Ratio 11.50 15.88 10.85 12.43 16.07
Dividend Payout Ratio 1.32 1.01 0.74 0.71 0.41
* 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 Division

2015/16 2014/15 2013/14 2012/13 2011/12
Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000
Revenue 331,033 355,528 419,119 428,062 2,675,625

Cost of Sales 98,142 191,677 243,057 272,726 2,071,868
Gross Profit 232,891 163,851 176,062 155,336 603,757
Administration & Other Overheads 111,002 104,700 109,215 113,387 199,634

Other Income 62,122 81,510 106,759 134,559 111,903
Change in Fair Value of Investment Property 98,565 8,142 268,564 228,500 206,971
Net Profit Before Tax 282,576 148,803 442,170 405,008 722,997

Five-Year Financial Summary

Cinnamon Grand Hotel
2015/16 2014/15 2013/14 2012/13 2011/12
Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000
Revenue
Rooms 2,610,729 2,495,720 2,589,915 2,460,356 1,921,952
Food 2,030,676 1,884,175 1,779,373 1,638,767 1,405,859
Beverage 348,910 316,647 298,787 284,989 249,572
Food & Beverage Others 17,573 17,386 16,467 19,488 20,264
Telephone 2,736 3,401 4,827 4,914 5,349
Rental Income 20,400 18,360 16,668 15,289 12,510
Other Operating Income 220,947 202,862 191,530 198,890 188,631
Total Revenue 5,251,971 4,938,552 4,897,567 4,622,693 3,804,137
Expenses
Room 430,593 380,079 343,617 301,195 255,945
Food Cost 797,165 748,639 696,668 658,271 561,902
Beverage Cost 125,311 104,407 90,929 87,993 79,662
Food & Beverage Other 651,684 600,315 548,926 511,554 454,770
Telephone 5,874 5,548 5,289 5,021 4,987
Other 182,427 171,191 167,622 157,042 133,371
Total Expenses 2,193,054 2,010,179 1,853,051 1,721,076 1,490,637
Gross Operating Income 3,058,918 2,928,373 3,044,516 2,901,618 2,313,500
Expenses
Administration & General 357,623 323,849 262,603 241,584 199,685
Advertising & Sales Promotion 124,584 103,407 111,808 86,428 72,363
Heat, Light & Power 318,894 359,804 376,177 324,795 285,126
Repair & Maintenance 178,994 156,589 173,579 138,856 140,729
Total Deductions 980,095 943,650 924,167 791,663 697,903
Gross Operating Profit 2,078,823 1,984,723 2,120,349 2,109,955 1,615,597

Interest Income 134,912 135,294 188,746 153,787 37,403
Dividend Income 156,281 273,493 273,493 234,422 117,211
Sundry Income 24,158 18,765 16,538 17,915 12,067
2,394,174 2,412,276 2,599,127 2,516,079 1,782,278
Insurance 12,595 11,778 13,436 17,897 16,098
Interest Expenses - 3,249 - 84 39,829
Rates 11,658 11,658 11,796 11,660 10,516
Management/ Marketing Fee 317,699 300,752 304,917 294,239 232,340
Depreciation 304,629 276,989 259,662 237,830 218,036
646,581 601,176 593,060 561,625 477,074
Net Profit Before Tax 1,747,593 1,811,095 2,006,067 1,954,453 1,305,204

NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the Twenty Second 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
20th June 2016 at 11.00 a.m.
The business to be brought before the meeting will be:
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
2016 together with the Report of the Auditors thereon.
3. To re-elect as Director Mr. S K G Senanayake who retires in terms of Article 84 of the Articles of Association of the Company.
A brief profile of Mr. S K G Senanayake is contained in Page 61 of the Annual Report.
4. To re-elect as Director Mrs. S A Jayasekera who retires in terms of Article 84 of the Articles of Association of the Company.
A brief profile of Mrs. S A Jayasekera is contained in Page 61 of the Annual Report.
5. To re-elect as Director, Mr. K N J Balendra who retires in terms of Article 91 of the Articles of Association of the Company.
A brief profile of Mr. K N J Balendra is contained in Page 60 of the Annual Report.
6. To re-appoint Auditors, Messrs. KPMG, Chartered Accountants, and to authorise the Directors to determine their
remuneration.
7. 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

ASIAN HOTELS AND PROPERTIES PLC

Secretaries
Colombo,
27th May 2016
Notes:
(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 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/her proxy holder are
both present at the meeting, only the shareholder’s vote is counted. If proxy holder’s appointer has indicated the manner of
voting, only the appointer’s indication of the manner of vote will be used.

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 of Colombo, failing whom

Mr. A D Gunewardene of Colombo, failing whom
Mr. J R F Peiris of Colombo, failing whom
Mr. R J Karunarajah of Colombo, failing whom
Mr. S Rajendra of Colombo, failing whom
Mr. C J L Pinto of Colombo, failing whom
Mr. S K G Senanayake of Colombo, failing whom
Mrs. S A Jayasekera of Colombo, failing whom
Mr. K N J Balendra of Colombo
as my/our proxy to represent me/us and vote on my/our behalf at the 22nd Annual General Meeting of the Company, to be
held on the 20th day of June 2016 at 11.00 a.m. and at any adjournment thereof, and at every poll which may be taken in
consequence thereof.
I/We, the undersigned, hereby direct my/our proxy to vote for me/us and on my/our behalf in accordance with the preferences
indicated below:
FOR AGAINST
1. To re-elect as Director Mr. S K G Senanayake who retires in terms of Article 84 of the Articles of
Association of the Company.
2. To re-elect as Director Mrs. S A Jayasekera who retires in terms of Article 84 of the Articles of
3. To re-elect as Director, Mr. K N J Balendra who retires in terms of Article 91 of the Articles of
4. To re-appoint Auditors, Messrs. KPMG, Chartered Accountants, and to Authorize the Directors to
determine their remuneration.
Signed this ………… day of …………………… Two Thousand and Sixteen

……………………………………......
Signature of Shareholder
Notes:
Instructions as to Completion of the Proxy form Are Noted on the Reverse.
FORM OF PROXY Contd.
INSTRUCTIONS AS TO 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 03, 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 : ..............................................................................................................
..............................................................................................................
..............................................................................................................
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.

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
Board of Directors
Mr. Susantha Chaminda Ratnayake - Chairman
Mr. Ajit Damon Gunewardene - Managing Director
Mr. James Ronnie Felitus Peiris
Mr. Rohan Jebashantham Karunarajah
Mr. Suresh Rajendra
Mr. Sanjiva Kanishka Gamini Senanayake
Ms. Shirani Anoja Jayasekara
Mr. Cholmondeley John Lloyd Pinto
Mr. Krishan Niraj Jayasekara Balendra (Appointed w.e.f. 01st April 2016)
Company Secretaries
117, Sir Chittampalam, A .Gardiner Mawatha, Colombo 2.
Registered Office
No.77, Galle Road, Colombo 03
Tel: +94 11 2437437 Fax: +94 11 5547555
E-mail: grand@cinnamonhotels.com
Auditors
KPMG
Chartered Accountants
32A, Sir Mohamed Macan Marker Mawatha
Colombo 03.
Bankers
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.
CITI Bank N.A - Colombo
Bank of Ceylon - Colombo
Commercial Bank of Ceylon PLC - Colombo
Design & Concept by: Optima Designs (Pvt) Ltd.

Printed by: Printel (Pvt) Ltd.
THE CITY
WITHIN
A CITY
ANNUAL REPORT 2015/16 | ASIAN HOTELS AND PROPERTIES PLC

No. 77, Galle Road, Colombo 03,
Sri Lanka. ANNUAL REPORT 2015/16
T : 0094 -11 2437437 F : 0094 -11 5547555 ASIAN HOTELS AND PROPERTIES PLC

Asian Hotels & Properties Cinnamon PLC 2015 16 PDF

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THE CITY

ANNUAL REPORT 2015/16 | ASIAN HOTELS AND PROPERTIES PLC

Asian Hotels and Properties PLC

Stock Exchange Listing

Company Registration No.

Design & Concept by: Optima Designs (Pvt) Ltd.

Group Financial Highlights of 2015/16 4

Financial Performance (Rs.’000’)

Financial Position (Rs.’000’)

Information per Ordinary Share (Rs.)

Key Performance Indicators

Asian Hotels and Properties PLC 4 Annual Report 2015/16

Rs. Mn Rs. Times

10,000 60.00 18.00

Dividend Per Share Earnings Per Share Dividend Payout Ratio

Rs. Rs. Times

5.00 5.00 1.20

Rs. 4.16 Rs. 5.50 Rs. 52.64

Rs. 8.06 Bn Rs. 2.02 Bn 44%

Asian Hotels and Properties PLC 6 Annual Report 2015/16

Cinnamon Grand Colombo Property Development on a number of concepts to entice the

Future Outlook Conclusion

The two hotels are expected to witness

Asian Hotels and Properties PLC 8 Annual Report 2015/16

Where vibrance meets elegance

Asian Hotels and Properties PLC 10 Annual Report 2015/16

MANAGEMENT DISCUSSION AND ANALYSIS

6,000 major components of the economy, by the change in Colombo Consumer

ratio being far below the median of its

80 B rated peers. However, Fitch did note Global Tourism Industry

Asian Hotels and Properties PLC 12 Annual Report 2015/16

Asian Hotels and Properties PLC 14 Annual Report 2015/16

‘Cinnamonization’ was rolled out across

Rs. 18,885 and Cinnamon Lakeside

3,000 which is significant given that this Hotel

banquets and F&B.

0 to 43 per cent, once again due to the

Asian Hotels and Properties PLC 16 Annual Report 2015/16

administrative expenses by 4 per

This therefore heralded a Group Profit

commendably at 58 per cent, similar to

Similarly, Cinnamon Grand continued to be the preferred choice for banquets in

1,000 including the Arabian Travel Market

gem and jewellery exhibition and

building up to lure city travelers to five,

Asian Hotels and Properties PLC 18 Annual Report 2015/16

Asian Hotels and Properties PLC 20 Annual Report 2015/16

Awards and Certifications

Being a benchmarked leader in the

Silver Award for Diversified Holdings

CINNAMON GRAND COLOMBO Awards

Certifications JKH Chairman’s Award for Sustainability

Culinary Art 2015 – Chefs Guild of

Dilmah Real High Tea Challenge

John Keells Inter Company Rugby 7’s

Asian Hotels and Properties PLC 22 Annual Report 2015/16

Management Structure of Cinnamon Grand

Head of Sales - Head of Marketing Head of Human

Executive Chef Head of Leisure Manager Chief Head of Human Finance

Asian Hotels and Properties PLC 24 Annual Report 2015/16

Customers Adults Method of Engagement: 1. Rate fixing

Associates Managers, Frequency of Engagement: