CORPORATE

NSB's innovative Annual Report 2010

People serving People is the theme of the Annual Report 2010 of the National Savings Bank released recently.

The report consists of four major sections and opens with the Chairman's and General Manager's statements written in a concise, readable language.

Chairman NSB Pradeep Kariyawasam said, "This year's report has the theme People serving People and the Bank directly addresses and invites people who are part of the Bank - customers, partners and employees - to share its success through the sub title, 'About You'."

"You're important to us. Great organisations are built by people. The people that work in the organisation. Others they work with. And the people they serve," he said.

General Manager/CEO of the Bank H M Hennayake Bandara said, "Annual Reports in general are focused on past activities but rarely on the future.

The NSB Annual Report 2010 adopts a new approach.

We chose to discuss plans for the next two years and the expected performance under different macroeconomic scenarios.

We believe it is important to communicate to our stakeholders what we are going to do and the possible outcome of our performance against changes in the macro environment.

This will enlighten our stakeholders where the Bank is heading and will improve the transparency of what we are doing."

"With increasing compliance and disclosure requirements, annual reports are getting more voluminous and are crammed with jargon making them less readable.

Our Annual Report 2010, is designed as a coffee table book encased in a soft velvet cover is readable, in content and outlook."

The General Manager/CEO's statement is titled 'A Conversation with the General Manager/CEO' and states, "As we learn more about our different demographic sectors, markets, other service sectors, so we know what we need to improve.

We measure our performance for individual customers and in different markets, and we're going to measure ourselves.

All of our people will progressively be involved in clear and rigorous performance management processes.

Every customer demands the best from NSB. We demand it too."

Over the years NSB's Annual Report has been recognised locally, regionally and internationally for its innovativeness.

Aitken Spence net profit up 23%

Propelled by strong growth in hotels and inbound tourism, Aitken Spence PLC's net profit rose by 23 percent to Rs. 2.5 billion, from Rs. 2.1 billion last year. Net profit before tax increased by 13.8 percent from Rs. 3.4 billion to Rs. 3.8 billion.

Net revenue for the year rose 4 percent to Rs. 24.73 billion, from Rs. 23.80, largely driven by growth in the tourism, cargo, logistics and manufacturing sectors. The Company reported an impressive growth in earnings per share of 23 percent to Rs. 6.25, up from Rs. 5.07 during the previous year.

Aitken Spence announced an outstanding dividend per share of Re. 1, which is a rise of 50 percent from Rs. 0.67 last year.

The Company's share price showed a growth of 77.2 percent compared to the previous year to close at Rs.162.30. Chairman Aitken Spence PLC, D. H. S. Jayawardena said, "I believe the next few years will bring the transformation of Sri Lanka to a truly competitive emerging economy.

Our advantage will be on home ground. We will invest to expand our existing positions of strength while also aggressively exploring fresh opportunities for diversification into growth sectors of the economy.

The Group took advantage of the tourism boom, with its three premier Heritance properties in Sri Lanka recording an outstanding performance.

Its resort portfolio will be expanded in the short-term - Heritance Ayurveda Mahagedara will be opened next month, while construction work has begun on Six Senses in Ahungalla, targeted to launch in 2013.

The Golden Sun Resort Kalutara is being refurbished to a four-star property where construction of an additional 100 rooms will increase rooms to 200.

Brown's Beach Hotel, is currently being demolished with plans afoot for a brand new 200-room luxury resort.

JKH's pre-tax profit up 63%

John Keells Holdings recorded a pretax profit of Rs.10.63 b for the financial year ended March 31, a 63 percent increase over the corresponding period of last year, said Chairman Susantha Ratnayake.

The profit attributable to equity holders was Rs.8.25 b an increase of 59 percent over last year.

The transportation sector has remained the main contributor to the group's post tax profit (PAT) at Rs.13.43 b.

PAT at Rs.2.78 b as 22 percent over last year and 31 percent of the group's total revenue.

While Post Operations performed to expectations the PAT growth of 22 percent over the previous year was mainly due to improved performances by all the strategic units driven by the growth in the economy.

Increased flight frequencies and the advent of new airlines contributed to the performance of the Airline Segment during the year.

This will also enable future growth in passenger and cargo volumes.

Profitability in the bunkering business grew on the efficiencies achieved in operations and fuel purchasing while Shipping, Airexpress and Logistics segments benefited from the pick up in trade volumes arising out of increased economic activity.

As the anticipated growth in infrastructure projects materialises and economic activity gathers further momentum the outlook for the Transpiration Group is positive.

The Leisure Group had a good year. Revenue was Rs.13.81 b and PAT Rs.2.32 b overall PAT in 2010/11 was a 138 percent increase over 2009/2010.

The group remains confident about Sri Lanka's tourism potential. Construction of the 200-roomed Chaya Bay Beruwela has begun and is due to open next May. The former Coral Gardens Hikkaduwa will be relaunched as Chaaya Tranz in November.

Given the positive outlook for tourism the group expects to make substantial investments in Sri Lanka leisure sector.

The property group with a revenue of Rs.2.49 b and a PAT of Rs.780 m contributed four percent and 9 percent.

The group will continue to look for opportunities to maximise the potential of its large land bank in Colombo and will look to expand it with the acquisition of sites with high development potential.

The Consumer Food and Retail Group recorded a revenue of Rs.18.36 b and a PAT of Rs.230 m.

Hydropower Free Lanka expands

A subsidiary company of Free Lanka Capital Holdings PLC, Hydropower Free Lanka PLC (HPFL) has joined the national effort of providing hydropower throughout the country.

The Company has already completed two mini-hydropower projects, begun construction work on two more and is finalising plans on some others.

Incorporated in 2000, the Company began operations by developing hydropower within the premises of Pussellawa Plantations Limited and Maturata Plantations Limited - the two plantation companies in the Group. The commissioned plants are at Sanquhar Estate Atabage and at Delta Estate, Pupuressa, producing 1.6mw of hydropower each.

The Company has reported a very profitable fourth quarter ending as at March 31 with a profit before tax of Rs. 22.14 million as against Rs. 2.3 million in the corresponding period last year (as per unaudited accounts).

A total profit before tax of Rs. 70.4 million has been recorded for the financial year 2010/11.

It shows a decrease from Rs. 75.2 million profit made during the previous year.

A spokesman said that the decrease is due to additional depreciation and expenses relating to the Initial Public Offering last year.

The company is utilising assets available on its tea estates, the spokesman said.

"Maturata Plantations and Pussellawa Plantations have hydropower resources and we are expanding activities in those areas," he said.

The company recently signed a Standard Power Purchase Agreement with the Ceylon Electricity Board (CEB) for two projects. Construction work on these - Thebuwana at Kuruwita and Stellenberg at Gampola - has already begun. Power generation is scheduled to start around March 2012.

Construction work on two more projects at Ragala will commence soon and work is due to be completed by August 2012.

In addition to hydropower plants being constructed by HPFL, Free Lanka Capital Holdings (FLCH) will also set up seven more hydropower plants in Deniyaya and Rakwana.

By the end of 2013, the Group expects to generate 16.02 mw of power to the national grid.

The company's rationale in moving in to hydropower is that they are guided by the government's policy of developing it to its full potential as it is a major indigenous resource for power generation.

In the past decade, the country's electricity demand reports an average annual growth of 7 - 8 percent.

This is expected to increase with the boom of the industrial sector and also the government's infrastructure development programs to enhance living standards.

Vallibel Finance records 159% profit growth

Vallibel Finance's gross income of Rs. 425.89 m in 2009/2010 grew to Rs. 639.87 m this year, an increase of 50 percent.

The company's pre-tax profits recorded a 116 percent increase to Rs. 231.6 m from last year's profit of Rs. 107.1 m while profit after tax (PAT) recorded Rs. 107.9m a 159 percent increase from the previous year's Rs. 41.6 m.The company continued to grow its deposit base from Rs. 1.13 b to Rs. 2.59 b during the year.

The company's NPL ratio was 1.07, down from 3.26 in the previous year. Total assets grew to an impressive Rs. 3.88 b from Rs. 1.79 b in the previous financial year, an increase of 116 percent.

"Vallibel Finance has had a truly outstanding year," said Jayantha Rangamuwa MD Vallibel Finance. For a company launched during such an uncertain period, we have seen substantial growth even during the bleak period of time.

Laugfs retains MTI

The fast growing Sri Lankan conglomerate Laugfs Holdings has retained MTI Consulting to work with the Group and guide it through a comprehensive strategic planning process, in pursuit of taking the Group to the next level.

Chairman Laugfs W.K.H. Wegapitiya said, "Having gone public with Laugfs Gas, we see the potential to take our Group to even greater heights and to do so we realised the criticality of strategy and strategic thinking. All our CEOs have now been through an executive education process on Strategic Thinking with MTI. Individual companies are now embarking on Strategic Planning"

"Laugfs represents the new generation of Sri Lankan business conglomerates. Its rise to the top in just 15 years is truly impressive. Equally impressive is the unique culture of the Group.

CDB records Rs. 529.8m PAT

Citizens Development Business Finance PLC (CDB) recorded a consolidated net profit after tax of Rs. 529.8m for 2010/11, an over seven-fold increase compared with the corresponding figures for the previous year.

Director/CEO Damith Tennakoon said, "The total asset base recorded a growth of 53 percent surpassing the Rs. 10b mark. Revenue figures reflected a growth of 47.6 percent or Rs. 719m amid a falling interest rate scenario offset by a strong loan book growth of 54 percent. The key contributors were from the growth of net interest income figure which recorded a growth of 68 percent surpassing Rs. 800m and a mark to market adjustment of Rs. 312m deriving from investment in shares".

CDB has also recorded an exceptionally healthy figure in its asset quality recording a NPL Ratio of 3.64 percent. CDB obtained a listing on the Colombo Stock Exchange and is listed on the Main Board with a market capitalisation figure exceeding Rs. 3.5 b.

Managing Director/Chief Executive Officer Mahesh Nanayakkara said that these results reflect the unprecedented transformation of CDB from virtually an unknown institution in 2001 with an asset base of a mere Rs. 275 m.